Res 21-093RESOLUTION NO. 21-093
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, AUTHORIZING THE SALE OF TAXABLE
PENSION OBLIGATION BONDS TO REFINANCE THE CITY'S
OBLIGATION TO THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM, APPROVING THE FORM OF A
PRELIMINARY OFFICIAL STATEMENT AND A CONTINUING
DISCLOSURE AGREEMENT, 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, pursuant to Resolution No. 2021-069 adopted by the City Council on August
3, 2021 (the "Prior Resolution"), the City previously authorized 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 purposes 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 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, pursuant to the Prior Resolution, the City Council also approved the forms
of certain legal documents in connection with the issuance of the Bonds, including a Trust
Agreement and a Bond Purchase Agreement;
WHEREAS, pursuant to the Prior Resolution, the City Council also authorized the
institution of a proceeding for judicial validation of the Bonds and the Trust Agreement 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 "Validation Proceeding");
WHEREAS, a default was entered in the Validation Proceeding on November 4, 2021,
and a judgment is expected to be entered shortly in the Validation Proceeding determining that
the Bonds and the Trust Agreement will be valid and legal obligations of the City;
WHEREAS, the City Council has determined that it is in the best interests of the City and
its residents to proceed with the issuance of the Bonds and the sale thereof to the underwriter
named in the Bond Purchase Agreement;
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WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934
("Rule 15c2-12") requires that, in order to be able to purchase or sell the Bonds, the underwriter
thereof must have reasonably determined that the City has undertaken in a written agreement
or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial
information and certain events on an ongoing basis;
WHEREAS, in order to cause such requirement to be satisfied, the City desires to
execute and deliver a Continuing Disclosure Agreement (the "Continuing Disclosure
Agreement") in connection with the issuance of the Bonds;
WHEREAS, Rule 15c2-12 also requires that, in order to offer the Bonds for sale to the
public, the underwriter must receive a disclosure document with respect to the Bonds and the
City;
WHEREAS, in order to cause such requirement to be satisfied, the City has prepared a
Preliminary Official Statement (the "Preliminary Official Statement") in connection with the
issuance of the Bonds;
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
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;
and
WHEREAS, the City Council recognizes that issuance of the Bonds is one tactic in a
broader strategy to manages the City's pension costs and, as such, recognizes the benefits of
adopting a Pension Reserve and Funding Policy so that the City Manager or designee can
make pension reserve management decisions while following City Council approved guidelines.
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 City Council hereby reaffirms its approval of the issuance of the
Bonds upon the terms and conditions set forth in the Prior Resolution and authorizes staff to
proceed with a public sale of the Bonds.
SECTION 3: The form of Preliminary Official Statement presented at this meeting, with
such changes, insertions and omissions therein as may be approved by the Mayor, the Deputy
Mayor, the City Manager or the Director of Finance, and their authorized designees (the
"Designated Officers"), is hereby approved, and the use of the Preliminary Official Statement in
connection with the offering and sale of the Bonds is hereby authorized and approved. Each
Designated Officer is hereby authorized to certify on behalf of the City that the Preliminary
Official Statement is deemed final as of its date within the meaning of Rule 15c2-12 (except for
the omission of certain final pricing, rating and related information as permitted by Rule 15c2-
12). The Designated Officers are each hereby authorized and directed to furnish, or cause to
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Page 3
be furnished, to prospective bidders for the Bonds a reasonable number of copies of the
Preliminary Official Statements.
SECTION 4: The preparation and delivery of an Official Statement, and its use in
connection with the offering and sale of the Bonds, is hereby authorized and approved. The
Official Statement shall be in substantially the form of the Preliminary Official Statement, with
such changes, insertions and omissions as may be approved by a Designated Officer (including
changes to reflect the entry into of a municipal bond insurance policy and/or debt service
reserve surety policy, as approved pursuant to the Prior Resolution), such approval to be
conclusively evidenced by the execution and delivery thereof. The Designated Officers are
each hereby authorized and directed, for and in the name of and on behalf of the City, to
execute the final Official Statement and any amendment or supplement thereto for and in the
name and on behalf of the City.
SECTION 5: The form of Continuing Disclosure Agreement presented at this meeting
is hereby approved, and the Designated Officers are each hereby authorized and directed, for
and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure
Agreement in substantially said form, with such changes, insertions and omissions therein as
the Designated Officer executing the same may require or approve, such approval to be
conclusively evidenced to the execution and delivery thereof.
SECTION 6: U.S. Bank National Association is hereby appointed to act as Trustee
under the Trust Agreement.
SECTION 7: Stifel, Nicolaus & Company, Incorporated (the "Underwriter") is hereby
appointed to act as Underwriter under the Bond Purchase Agreement.
SECTION 8: 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 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 9: The City Council hereby approves the execution and delivery of any and
all agreements, documents, certificates and instruments referred to herein with digital signatures
as may be permitted under Section 16.5 of the Government Code using DocuSign.
SECTION 10: The City Council hereby approves a Pension and Reserve Funding
Policy, Policy No. 66, as it may be amended from time to time, and adds a Pension Reserve
Fund to existing General Fund Assigned Fund Balance classifications consistent with and in
compliance of the requirements of Governmental Accounting Standards Board Statement No.
54.
SECTION 11: The City Council hereby authorizes the City Manager or designee to
make transfers, and related transfer appropriations, from the General Fund unassigned fund
balance to the Pension Reserve Fund consistent with the Pension and Reserve Funding Policy
as may be necessary from time to time.
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SECTION 12: This Resolution shall take effect from and after the date of its passage
and adoption.
SECTION 13: 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 16th day of November, 2021 by the following vote, to wit:
AYES: MULLIN, FRANK, GROSCH, LEONARD, VAUS
NOES: NONE
ABSENT: NONE
DISQUALIFIED: NONE
Steve Vaus, Mayor
ATTEST:
Carrie Gallagher, City Clerk