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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 Resolution No. 05-043 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 Resolution No. 05-043 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 ) ) ) 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