Loading...
Res 21-069RESOLUTION NO. 21-069 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA AUTHORIZING THE ISSUANCE OF BONDS TO REFUND CERTAIN PENSION OBLIGATIONS OF THE CITY, APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF A TRUST AGREEMENT AND PURCHASE CONTRACT, AUTHORIZING JUDICIAL VALIDATION PROCEEDINGS RELATING TO THE ISSUANCE OF SUCH BONDS AND APPROVING ADDITIONAL ACTIONS RELATED THERETO WHEREAS, the City of Poway (the "City") has previously adopted a retirement plan pursuant to the Public Employees' Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the "Retirement Law") and elected to become a contracting member of the California Public Employees' Retirement System ("PERS"); WHEREAS, the Retirement Law and the contract (the "PERS Contract") effective February 1, 1981 between the Board of Administration of PERS and the City Council of the City (the "City Council") obligates the City: (i) to make contributions to PERS to fund pension benefits for certain City employees; (ii) to amortize the unfunded accrued actuarial liability with respect to such pension benefits; and (iii) to appropriate funds for the foregoing purposes; WHEREAS, the City desires to authorize the issuance of its City of Poway Pension Obligation Bonds, Series 2021 (Federally Taxable) (the "Bonds") pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the "Bond Law"), in a maximum principal amount not to exceed that required for the purpose of refunding all or a portion of the City's current obligation to PERS for fiscal year 2021-22, pursuant to the PERS Contract, to pay all or a portion of the unfunded accrued actuarial liability of the City (the "Unfunded Liability") with respect to pension benefits under the Public Employees' Retirement Law and the PERS Contract, to pay capitalized interest on the Bonds and to pay the costs of issuance of such Bonds, including the underwriter's discount and any original issue discount on such Bonds; WHEREAS, the City expects that the need may arise in the future to issue additional refunding bonds (the "Additional Bonds") pursuant to the Bond Law to amortize the accrued and Unfunded Liability of the City to PERS as required by the Retirement Law and the PERS Contract and to fund all or a portion of the normal contributions required by the PERS Contract; WHEREAS, the Bonds will be issued under and secured by a Trust Agreement (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Trust Agreement") by and between the City and a trustee to be selected by the City (the "Trustee"); WHEREAS, the City has determined the advisability of filing an action to determine the validity of the Bonds, the Additional Bonds and the Trust Agreement, and the actions proposed to be taken in connection therewith; and WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby do exist, have happened and have been 4836-1134-0017v3/022468-0021 Resolution No. 21-069 Page 2 performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: SECTION 1: The City Council does hereby find and declare that the above recitals are true and correct. SECTION 2: The issuance of the Bonds on the terms and conditions set forth in, and subject to the limitations specified in, the Trust Agreement, is hereby authorized and approved. The Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be issued in the form and shall have terms as provided in the Trust Agreement, as the same shall be completed in accordance with this Resolution. The title of the Bonds may be changed to reflect the year in which the Bonds are issued, and to reflect the appropriate series designation, as directed by the City Manager of the City. SECTION 3: The Trust Agreement, in substantially the form on file with the City Clerk, is hereby approved. The Mayor, the Deputy Mayor, the City Manager or the Director of Finance, and their authorized designees (the "Designated Officers") are, and each of them is, hereby authorized and directed, for and in the name of the City, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Designated Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Designated Officer. The City Clerk is hereby authorized and directed to attest the Trust Agreement for and in the name and on behalf of the City. The City Manager and the Director of Finance are each hereby authorized to work with the Municipal Advisor (as identified in Section 8) to select the Trustee for the Bonds. SECTION 4: The City hereby authorizes and approves the issuance of Additional Bonds pursuant to the Bond Law, as authorized by the Trust Agreement, from time to time, to refund all or a portion of the Unfunded Liability and the City's obligation to PERS pursuant to the PERS Contract for the then -current fiscal year, provided that the City Manager, or the designee thereof, first certifies to the City Council in writing that such actions will result in cost savings to the City. The City Council authorizes any one of the Designated Officers, or their designees, to execute and deliver one or more other trust agreements and/or one or more supplemental agreements supplementing or amending the Trust Agreement and providing for the issuance of Additional Bonds (each, an "Additional Trust Agreement"); provided, however, that: (i) each series of Additional Bonds shall be in a principal amount not to exceed the sum of: (a) the Unfunded Liability of the City to PERS under the PERS Contract and the Retirement Law remaining unpaid on the date of issuance of such Additional Bonds; plus (b) the obligation to PERS for the current or subsequent fiscal year pursuant to the PERS Contract; plus (c) the costs of issuing the Additional Bonds; (ii) the stated interest rate on the Additional Bonds shall not exceed the discount rate assumed by PERS with respect to the amortization of the Unfunded Liability at the time such Additional Bonds are issued; and (iii) the Additional Bonds issued pursuant to such Additional Trust Agreement shall mature not later than 30 years from the date of their issuance. Each Unfunded Liability refunded by the Bonds and each series of Additional Bonds pursuant to the Trust Agreement and each Additional Trust Agreement constitutes an obligation imposed by law, pursuant to the Constitution and laws of the State of California and an obligation 4836-1134-0017v3/022468-0021 Resolution No. 21-069 Page 3 of the City not limited as to payment from any special source of funds. The Unfunded Liability refunded by the Bonds pursuant to the Trust Agreement and each series of Additional Bonds pursuant to an Additional Trust Agreement shall not, however, constitute an obligation of the City for which the City is obligated or permitted to levy or pledge any form of taxation or for which the City has levied or pledged or will levy or pledge any form of taxation. SECTION 5: The form of the Bond Purchase Agreement (the "Purchase Contract") by and between the City and an underwriter or underwriters to be selected by the City (the "Underwriter") in substantially the form on file with the City Clerk, and the sale of the Bonds to the Underwriter pursuant thereto upon the terms and conditions set forth therein, are hereby approved. Subject to such approval and to the provisions hereof, the Designated Officers are each hereby authorized and directed to evidence the City's acceptance of the offers made by the Purchase Contract by executing and delivering the Purchase Contract in said form with such changes therein as the Designated Officer or Designated Officers executing the same may approve and such matters as are authorized by this Resolution, such approval to be conclusively evidenced by the execution and delivery thereof by any one of the Designated Officers. The City Manager and the Director of Finance are each hereby authorized to work with the Municipal Advisor to select the Underwriter for the Bonds. SECTION 6: Terms of the Bonds. The Designated Officers are each authorized, on behalf of the City, to establish and determine: (i) the final principal amount of the Bonds, provided that the aggregate initial principal amount of the Bonds shall not be greater than the lesser of: (a) $65,000,000; or (b) sum of: (1) the City's obligation to PERS for the remainder of fiscal year 2021-22, as evidenced by the PERS Contract; plus (2) the Unfunded Liability as calculated by PERS or another actuary selected by the Designated Officer; plus (3) the costs of issuing the Bonds as approved by such Designated Officer; (ii) the final interest rates on various maturities of the Bonds, provided that the total estimated principal and interest on the Bonds through maturity shall be less than the estimated sum of the Unfunded Liability to be refunded together with the payments with respect to such Unfunded Liability at the then current discount rate required by PERS through maturity of such Unfunded Liability and that the maturity date of the Bonds shall not be later than the last date determined by PERS for the amortization of the Unfunded Liability of the City in accordance with its current procedures; and (iii) the Underwriter's discount for the purchase of the Bonds, not to exceed 0.80% of the principal amount of the Bonds. The net present value savings shall be calculated by comparing present value of the payments required to amortize the Unfunded Liability at the discount rate assumed by PERS to the present value of the principal and interest payments on the Bonds. SECTION 7: The Designated Officers are hereby authorized to negotiate and execute an insurance policy and debt service reserve fund insurance policy for the Bonds (and such other agreements that may be required by the insurer in connection therewith) if it is determined that the policies will result in interest rate savings for the City, and to pay the insurance premium of such policies from the proceeds of the issuance and sale of the Bonds. SECTION 8: In order to determine the validity of the Bonds, the Additional Bonds, the Trust Agreement and the Additional Trust Agreements, and the actions authorized hereby to be taken in connection therewith, the City Council hereby authorizes the City Attorney, in concert with SYCR, to prepare and cause to be filed and prosecuted to completion all proceedings required for the judicial validation of the Bonds, the Additional Bonds, the Trust Agreement and the Additional Trust Agreements in the Superior Court of San Diego County, under and pursuant to the provisions of Sections 860 et seq. of the California Code of Civil Procedure. The City Council further authorizes the Designated Officers and all other officers, employees and agents 4836-1134-0017v3/022468-0021 Resolution No. 21-069 Page 4 of the City to take any and all actions, including the execution and delivery or appropriate documentation, as may be required to conclude such judicial validation proceedings. SECTION 9: The Designated Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereby, including, but not limited to, the preparation of an Official Statement (and a Preliminary Official Statement) for use in connection with the offering and sale of the Bonds, the execution and delivery of a continuing disclosure undertaking and the execution and delivery of any documents required by PERS in order to complete the issuance of the Bonds and the refunding of the Unfunded Liability. All actions heretofore taken by the Designated Officers and by any other officers, employees or agents of the City with respect to the issuance of the Bonds, or in connection with or related to any of the agreements or documents referenced herein, are hereby approved, confirmed and ratified. SECTION 10: This Resolution shall take effect from and after the date of its passage and adoption. SECTION 11: The City Clerk shall certify to the passage and adoption thereof. PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California on the 3rd day of August, 2021 by the following vote, to wit: AYES: MULLIN, FRANK, GROSCH, LEONARD, VAUS NOES: NONE ABSENT: NONE DISQUALIFIED: NONE teve Vaus, Mayor ATTEST: rah Harrington, Inter;. City Clerk 4836-1134-0017v3/022468-0021