Res 05-043
RESOLUTION NO. 05-043
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY AUTHORIZING
THE ISSUANCE OF ITS 2005 SERIES A HOUSING REVENUE BONDS (FIRST LIEN
BONDS) POWAY ROYAL MOBILE HOME PARK AND 2005 SERIES B HOUSING
REVENUE BONDS (SECOND LIEN BONDS) POWAY ROYAL MOBILE HOME PARK
AND MAKING CERTAIN DETERMINATIONS RELATING THERETO
WHEREAS, the Poway Redevelopment Agency (the "Agency") is a
redevelopment agency duly created, established and authorized to transact business
and exercise its powers, all under and pursuant to the Community Redevelopment Law
(Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code
of the State of California); and
WHEREAS, the Agency has requested that the City of Poway (the "City") issue
its 2005 Series A Housing Revenue Refunding Bonds (First Lien Bonds) Poway Royal
Mobile Home Park (the "First Lien Bonds") and, on a subordinate basis to the First Lien
Bonds, its 2005 Series B Housing Refunding Revenue Bonds (Second Lien Bonds)
Poway Royal Mobile Home Park (the "Second Lien Bonds" and, together with the First
Lien Bonds, the "Bonds") for the purpose of making a loan to the Agency, the proceeds
of which loan will be applied by the Agency to pay to the City the purchase price for the
Poway Royal Mobilehome Park (the "Park"), and which purchase price will be applied
by the City to currently refund those certain 1995 Refunding Certificates of Participation
(City of Poway Capital Improvement Project-Poway Royal Mobilehome Park) initially
issued in the aggregate principal amount of $31,770,000 (the "Prior Certificates"), which
Prior Certificates refunded the $28,300,000 City of Poway Certificates of Participation
(City of Poway 1991 Capital Improvement Project-Poway Royal Mobilehome Park); and
WHEREAS, the Agency desires to enter into a Mobilehome Park Sale and
Operating Agreement (the "Operating Agreement") with the City pursuant to which the
Agency will purchase the Park from the City, the form of which has been presented at
the meeting of which this Resolution has been adopted; and
WHEREAS, the Agency intends to, but is not obligated to, sell the Park to
Wakeland Housing and Development Corporation, a non-profit corporation
("Wakeland"), or an entity formed by Wakeland, provided that it will not sell the Park
absent an opinion of nationally recognized bond counsel that the exclusion from gross
income of interest on the Bonds will not be adversely affected for federal income tax
purposes as a consequence of such sale, and therefore the Bonds are being issued as
qualified 501(c)(3) bonds pursuant to the Internal Revenue Code of 1986, as amended
(the "Code"); and
WHEREAS, pursuant to Section 147(f) of the Code, the issuance of the Bonds is
required to be approved, following a public hearing, by an elected representative of the
issuer of the Bonds and an elected representative of the governmental unit having
jurisdiction over the area in which the Park is located; and
Resolution No. 05-043
Page 2
WHEREAS, the Park is located wholly within the geographic jurisdiction of the
City; and
WHEREAS, this City Council is the elected legislative body of the City; and
WHEREAS, the City has caused a notice to be published in a newspaper of
general circulation in the City, at least fourteen days prior to this meeting, to the effect
that a public hearing would be held by this City Council on May 26, 2005, and June 2,
2005, regarding the proposed issuance of the Bonds by the City and the nature and
location of the Park; and
WHEREAS, this City Council has conducted a public hearing on this date, at
which time an opportunity was provided to the public to present arguments both for and
against the issuance of the Bonds and the nature and location of the Park; and
WHEREAS, in order to accomplish the refunding of the Prior Certificates, the City
and the Agency further desire to enter into that certain Loan Agreement, by and among
the City, the Agency, as Borrower, and U.S. Bank National Association (the "Trustee"),
as Trustee (the "Loan Agreement"), and that certain Regulatory Agreement and
Declaration of Restrictive Covenants, by and among the City, the Agency and the
Trustee (the "Regulatory Agreement"), each to be dated as of the first day of the month
in which the Purchase Agreement is executed, the forms of which have been presented
to this City Council at the meeting at which this Resolution has been adopted, pursuant
to which Loan Agreement the Agency will agree to pay certain loan payments in
connection therewith which will be pledged to the owners of the Bonds, and pursuant to
which Regulatory Agreement the Agency will agree to certain restrictions upon the
operation of the Park; and
WHEREAS, the Bonds will be issued pursuant to an Indenture of Trust (the
"Indenture") to be dated as of the first day of the month in which the Purchase
Agreement is executed, by and among the Trustee, the City and the Agency, the form of
which Indenture has been presented to this City Council at the meeting at which this
Resolution has been adopted; and
WHEREAS, the Prior Certificates will be refunded pursuant to the terms of an
escrow agreement (the "Escrow Agreement") by and among the City, the Agency and
U.S. Bank National Association (the "Escrow Bank"), as Escrow Bank and Prior
Certificates trustee dated as of the date of the Indenture, the form of which Escrow
Agreement will be prepared by Bond Counsel subsequent to the meeting at which this
Resolution has been adopted; and
WHEREAS, the City Council desires to approve the form of a Purchase
Agreement (the "Purchase Agreement"), by and between the City, the Agency and
Spelman & Co., Inc. (the "Purchaser"), pursuant to which the Purchaser will agree to
buy the Bonds on the terms and conditions set forth therein, the form of which has been
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Page 3
presented to this City Council at the meeting at which this Resolution has been adopted,
and to approve the form of Bond Counsel Agreement by and between the City and
Stradling Yocca Carlson & Rauth, a Professional Corporation presented to this City
Council at such meeting (the "Bond Counsel Agreement"); and
WHEREAS, the City Council desires to approve the forms of a Preliminary
Official Statement relating to the Bonds (the "Preliminary Official Statement") to be
distributed to potential investors, for the purposes of facilitating the sale of the Bonds at
the lowest feasible interest rate, and a Continuing Disclosure Agreement (the
"Continuing Disclosure Agreement") by and between the Agency and U.S. Bank
National Association (the "Dissemination Agent"), as Dissemination Agent with respect
to the Continuing Disclosure Agreement pursuant to which the Agency will agree to
provide annual disclosure as described therein, the forms of which Preliminary Official
Statement and Continuing Disclosure Agreement have been presented to this City
Council at the meeting at which this Resolution has been adopted.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway
as follows:
Section 1. Approval of Issuance of Bonds. The issuance of the "City of Poway
2005 Series A Housing Revenue Bonds, (First Lien Bonds) Poway Royal Mobile Home
Park" and the "City of Poway 2005 Series B Housing Revenue Bonds (Second Lien
Bonds) Poway Royal Mobile Home Park in the approximate aggregate principal amount
of $32,000,000 is hereby authorized and approved pursuant to Chapter 8 of Part 5 of
Division 31 of the Health and Safety Code and Section 147(f) of the Code. It is the
purpose and intent of this City Council that this resolution constitute approval of the
issuance of the Bonds by the applicable elected representative of the governmental unit
having jurisdiction over the area in which the Project is located, all in accordance with
Section 147(f) of the Code.
Section 2. U.S. Bank National Association is hereby appointed as Trustee on
behalf of the owners of the Bonds, with the duties and powers of such Trustee as set
forth in the Indenture, as the Escrow Bank with the duties and powers of the Escrow
Bank as set forth in the Escrow Agreement and as Dissemination Agent with the duties
and powers of the Dissemination Agent as set forth in the Continuing Disclosure
Agreement.
Section 3. The forms of the Escrow Agreement, the Loan Agreement, the
Regulatory Agreement, the Indenture, the Operating Agreement and the Continuing
Disclosure Agreement presented at this meeting are hereby approved. Each of the
Mayor of the City, the City Manager or his designee (the "City Manager") and the City
Clerk is hereby authorized for and in the name of the Agency to execute the Escrow
Agreement, the Loan Agreement, the Regulatory Agreement, the Continuing Disclosure
Agreement and the Indenture in substantially the forms hereby approved, with such
additions thereto and changes therein as are recommended or approved by Stradling
Yocca Carlson & Rauth, as Bond Counsel to the City ("Bond Counsel"), or City Manager
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Page 4
and the officers executing the same, including all changes necessary to reflect the
purchase of bond insurance as described in Section 5 below. Approval of such
changes shall be conclusively evidenced by the execution and delivery of the foregoing
documents by such officers. The Mayor, the City Manager, and the City Clerk are
hereby authorized to execute, acknowledge and deliver any and all documents required
to consummate the transactions contemplated by the Loan Agreement, the Regulatory
Agreement, the Operating Agreement, the Continuing Disclosure Agreement and the
Indenture, including, but not limited to, any termination agreements with respect to the
financing documents heretofore entered into in connection with the Prior Certificates
which the City Manager determines are required to be executed in order to accomplish
the defeasance of the Prior Certificates.
Section 4. The form of the Purchase Agreement presented at this meeting and
the sale of the Bonds pursuant thereto are hereby approved, and each of the Mayor and
the City Manager is hereby authorized to evidence the Agency's acceptance of the
terms and provisions of the Purchase Agreement by executing and delivering the
Purchase Agreement in the form presented to the City at this meeting, with such
additions thereto and changes therein as are recommended or approved by Bond
Counsel and the officers executing the same. Approval of such additions and changes
shall be conclusively evidenced by the execution and delivery of the Purchase
Agreement; provided, however, that the Purchase Agreement shall be signed only if the
present value of the debt service payments due with respect to the Bonds attributable to
refunding the Prior Certificates is less than the present value of the debt service due
with respect to the Prior Certificates (as set forth in writing by the City's Financial
Advisor) and the Purchaser's discount (exclusive of original issue discount and any
bond insurance premium) with respect to the Bonds does not exceed 1.75% of the
aggregate principal amount of the Bonds. The City Manager is authorized to determine
the day on which the Bonds are to be priced in order to produce the lowest financing
cost for the Bonds, which determination shall be conclusively evidenced by the
execution and delivery of the Purchase Agreement by one of the aforesaid officers,
provided, however, that the net interest cost of the First Lien Bonds shall not exceed
6.00% and the net interest cost of the Second Lien Bonds shall not exceed 6.75%. The
City Manager, or his designee, is authorized to reject any terms presented by the
Purchaser if determined not to be in the best interest of the City and is further
authorized to evaluate whether the purchase of municipal bond insurance for the Bonds
will result in a net savings to the City and if so to purchase such municipal bond
insurance.
Section 5. The form of the Bonds as set forth in the Indenture (as the
Indenture may be modified pursuant to Section 4 hereof) is hereby approved.
Section 6. The form of the Preliminary Official Statement presented at this
meeting is hereby approved, and the Preliminary Official Statement may be distributed
to prospective purchasers in the form so approved, together with such additions thereto
and changes therein as are determined necessary by the City Manager, or his
designee, to make such Preliminary Official Statement final as of its date for purposes
Resolution No. 05-043
Page 5
of Rule 15c2-12 of the Securities and Exchange Commission. Each of the Mayor and
the City Manager is hereby authorized to execute a final Official Statement in the form
of the Preliminary Official Statement, together with such changes as are determined
necessary by the City Manager, or his designee, to make such Official Statement
complete and accurate as of its date. The Purchaser is further authorized to distribute
the final Official Statement for the Bonds to the purchasers thereof upon its execution by
an officer of the Agency as described above. The City Manager and his written
designees are hereby authorized and directed to take whatever steps are necessary to
comply with the requirements of Rule 15c(2)-12 applicable to the Bonds following their
execution and delivery.
Section 7. The form of Bond Counsel Agreement presented at this meeting is
hereby approved and the City Manager is authorized to execute such Agreement and
deliver such to Bond Counsel.
Section 8. The Mayor of the City, the City Manager of the City, the City
Treasurer, the City Clerk of the City, and any other proper officer of the City, acting
singly, be and each of them hereby is authorized and directed to execute and deliver
any and all documents and instruments, including without limitation the Escrow
Agreement and the Administration and Oversight Agreement, and to do and cause to be
done any and all acts and things necessary or proper for carrying out the transactions
contemplated by the Indenture, the Loan Agreement, the Regulatory Agreement, the
Operating Agreement, the Purchase Contract, the Continuing Disclosure Agreement,
the Escrow Agreement, the Administration and Oversight Agreement, the Official
Statement, this Resolution and any other such agreements.
Section 9. Effective Date. This Resolution shall take effect upon adoption.
PASSED, ADOPTED, AND APPROVED by the City Council of the City of
Poway, State of Califomia, at a regular meeting this 14th day of June 2005.
ATTEST:
't..'!ill~
C{. iane Shea, City Clerk
Resolution No. 05-043
Page 6
STATE OF CALIFORNIA
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ss.
COUNTY OF SAN DIEGO
I, L. Diane Shea, City Clerk of the City of Poway, doe hereby certify under the
penalty of perjury, that the foregoing Resolution No. 05-043 was duly adopted by the
City Council at a meeting of said City Council held on the 14th day of June 2005, and
that it was so adopted by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
BOYACK, EMERY, HIGGINSON, REXFORD, CAFAGNA
NONE
NONE
NONE
fkJ1$"< ~f.-
L. lane Shea, City Clerk
City of Poway