Res F-23-01RESOLUTION NO. F-23-01
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
POWAY PUBLIC FINANCING AUTHORITY APPROVING THE
SALE OF ITS WATER REVENUE BONDS, SERIES 2023A, IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$38,000,000 AND APPROVING THE EXECUTION AND
DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION
THEREWITH AND CERTAIN OTHER MATTERS
WHEREAS, the Poway Public Financing Authority (the "Authority"), a public entity that is
duly organized and existing under a joint exercise of powers agreement and under the
Constitution and laws of the State of California (the "State"), has the powers, among others, to
issue bonds and to finance water facilities on behalf of its members pursuant to Articles 1, 2 and
4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State, including but not
limited to Article 4 thereof, known as the "Marks -Roos Local Bond Pooling Act of 1985,"
Government Code Section 6584 et seq. (the "Act");
WHEREAS, the City of Poway (the "City"), a municipal corporation that is duly organized
and existing under the general laws of the State, and a member of the Authority, desires to finance
the acquisition and construction of certain existing improvements, betterments, renovations and
expansions of facilities within its water system (collectively, the "2023 Project");
WHEREAS, the Board of Directors of the Authority (the "Board") has determined that it is
desirable to issue its Water Revenue Bonds, Series 2023A (the "Bonds") in an aggregate principal
amount not to exceed $38,000,000 to assist the City in financing the 2023 Project;
WHEREAS, the Bonds are to be secured by installment payments to be made by the City
pursuant to an Installment Purchase Agreement (the "Installment Purchase Agreement"), by and
between the City and the Authority, which installment payments will be payable from net revenues
of the City's water system;
WHEREAS, the Authority and the City previously entered into an Installment Purchase
Agreement, dated as of November 1, 2021 (the "2021 Installment Purchase Agreement"), to
finance certain capital improvements to the City's water system;
WHEREAS, the installment payments under the Installment Purchase Agreement are to
be payable from net revenues of the City's water system on a parity with the obligation of the City
to make payments under the 2021 Installment Purchase Agreement, which is currently
outstanding in the principal amount of $12,560,000;
WHEREAS, the Board has determined that it is in the best interest of the Authority to enter
into the Installment Purchase Agreement with the City, and to approve certain other documents;
WHEREAS, the Authority and U.S. Bank Trust Company, National Association, as trustee
(the "Trustee") desire to enter into an Indenture of Trust (the "Indenture"), to provide for the
issuance and security of the Bonds and to provide for the financing of the 2023 Project;
WHEREAS, pursuant to the Indenture, the Authority will assign to the Trustee the
installment payments payable under the Installment Purchase Agreement;
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WHEREAS, the Authority desires to execute and deliver a bond purchase agreement (the
"Purchase Contract") with the City and Stifel, Nicolaus & Company, Incorporated, as underwriter
of the Bonds (the "Underwriter"), with respect to the Bonds;
WHEREAS, in order to effect a public sale of the Bonds to the Underwriter, the Authority
is required under federal securities laws and regulations to prepare a preliminary official statement
(the "Preliminary Official Statement") disclosing material information about the Bonds, the City,
the 2023 Project and the City's water system; and
WHEREAS, the Authority wishes to approve the Preliminary Official Statement for the
Bonds, which has been prepared by the City and the Authority with the assistance of Stradling
Yocca Carlson & Rauth, a Professional Corporation, as disclosure counsel ("Disclosure
Counsel").
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Poway Public
Financing Authority as follows:
SECTION 1: The Board hereby specifically finds and declares that each of the
statements, findings and determinations of the Authority that are set forth in the above recitals
and in the preambles of the documents that are approved herein are true and correct and that:
(a) the financing of the 2023 Project will result in significant public benefits to the citizens of the
City of the type that is described in Section 6586 of the Act, in that having the Authority assist the
City with respect to the financing of the 2023 Project through the issuance of the Bonds and
related transactions will result in demonstrable savings in effective interest rate to the City and
significant reductions in effective user charges levied by the City; and (b) the 2023 Project includes
facilities for the production, storage, transmission or treatment of water within the meaning of
Section 6586.5(c) of the Act.
SECTION 2: The Board hereby authorizes the preparation, sale and delivery of the
Bonds in accordance with the terms and provisions of the Indenture in an aggregate principal
amount (not in excess of $38,000,000) that is determined by the Executive Director (which shall
be the City Manager of the City) or the Treasurer, together with other available funds, as being
necessary: (a) to finance the 2023 Project; (b) to pay the costs of issuing the Bonds; and (c) if
advisable to reduce the interest rate payable on the Bonds and/or secure a higher credit rating on
the Bonds, to establish a reserve fund for the Bonds.
SECTION 3: The form of the Bonds, as set forth in the form of the Indenture (as the
Indenture may be modified pursuant hereto), is hereby approved; and the Chair and the Secretary
are hereby authorized and directed to execute the Bonds by manual or facsimile signature in the
name and on behalf of the Authority.
SECTION 4: The Installment Purchase Agreement is hereby approved in substantially
the form on file with the Secretary and, upon execution as authorized below, made a part hereof
as though set forth in full herein. The Chair, the Vice Chair, the Executive Director and the
Treasurer of the Authority (each, a "Designated Officer") or the designee thereof is hereby
authorized and directed to execute and deliver such Installment Purchase Agreement with such
changes, insertions and omissions as may be recommended by General Counsel or Stradling
Yocca Carlson & Rauth, a Professional Corporation, as bond counsel ("Bond Counsel") and
approved by the officer executing the same, said execution being conclusive evidence of such
approval.
Resolution No. F- 23-01
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SECTION 5: The Indenture is hereby approved in substantially the form on file with the
Secretary and, upon execution as authorized below, made a part hereof as though set forth in full
herein. Each Designated Officer or the designee thereof is hereby authorized and directed to
execute and deliver such Indenture with such changes, insertions and omissions as may be
recommended by General Counsel or Bond Counsel and approved by the officer executing the
same, said execution being conclusive evidence of such approval.
SECTION 6: The Purchase Contract is hereby approved in substantially the form on file
with the Secretary and, upon execution as authorized below, made a part hereof as though set
forth in full herein. Each Designated Officer or the designee thereof is hereby authorized and
directed to execute and deliver such Purchase Contract with such changes, insertions and
omissions as may be recommended by General Counsel or Bond Counsel and approved by the
officer executing the same, said execution being conclusive evidence of such approval; provided,
however, that in no event shall the aggregate principal amount of the Bonds exceed $38,000,000,
nor shall the underwriting discount for the Bonds (excluding any net original issue discount)
exceed 0.75% of the aggregate principal amount of the Bonds, nor shall the all -in true interest
cost of the Bonds exceed 4.75%.
SECTION 7: The preparation and distribution of the Preliminary Official Statement in
substantially the form on file with the Secretary is hereby approved. Each Designated Officer is
hereby authorized: (i) to sign a certificate pursuant to Rule 15c2-12 promulgated under the
Securities Exchange Act of 1934 (the "Rule") deeming the Preliminary Official Statement
substantially final under the Rule, except for the omission of information as permitted by the Rule;
and (ii) to execute, approve and deliver the final Official Statement substantially in the form of the
Preliminary Official Statement with such changes, insertions and omissions as the officer or
officers executing said document may require or approve, subject to advice from the General
Counsel or Disclosure Counsel, such approval to be conclusively evidenced by the execution and
delivery thereof. The Underwriter is directed to deliver copies of the final Official Statement to all
actual initial purchasers of the Bonds.
SECTION 8: The proceeds of the Bonds shall be deposited as provided in the Indenture
and the Installment Purchase Agreement to finance the 2023 Project.
SECTION 9: The appointment of U.S. Bank Trust Company, National Association, as
Trustee under and pursuant to the Indenture, with the powers and duties of said office as set forth
therein, is hereby approved.
SECTION 10: The Board hereby authorizes the Executive Director or his designee: (i) to
solicit bids on a municipal bond insurance policy and/or reserve surety; (ii) to negotiate the terms
of such policy or policies; (iii) to finalize, if appropriate, the form of such policy or policies with a
municipal bond insurer; and (iv) if it is determined that the policy or policies will result in net debt
service savings on the Bonds, to pay the insurance premium of such policy or policies from the
proceeds of the issuance and sale of the Bonds.
SECTION 11: The Designated Officers or any other proper officer of the Authority, acting
singly, be 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 by the Indenture, the Installment
Purchase Agreement, the Purchase Contract, bond insurance, a reserve surety and this
Resolution, including any reimbursement agreement or other agreement related to bond
insurance or a reserve surety. In the event that the Chair and Vice Chair of the Board are
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unavailable to sign any of the agreements described herein, any other member of the Board may
sign such agreement.
SECTION 12: The good faith estimates of costs related to the Bonds which are required
by Section 5852.1 of the California Government Code are disclosed in Exhibit A hereto and are
available to the public at the meeting at which this Resolution is approved.
SECTION 13: Unless otherwise defined herein, all terms that are used herein and not
otherwise defined shall have the meanings given to such terms in the Indenture unless the context
otherwise clearly requires.
SECTION 14: This Resolution shall take effect from and after the date of its passage and
adoption.
SECTION 15: The Secretary shall certify to the passage and adoption thereof.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the Board of Directors of
the Poway Public Financing Authority on the 15th day of August 2023 by the following vote, to
wit:
AYES: DE HOFF, EDMONDSON, PEPIN, FRANK, VAUS
NOES: NONE
ABSTAINED: NONE
ABSENT: NONE
DISQUALIFIED: NONE
Steve Vaus, Authority Chair
ATTEST:
Carrie Gallagher, Secretary
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EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in
accordance with California Government Code Section 5852.1. Such good faith estimates have
been provided to the Authority by Fieldman, Rolapp & Associates, Inc. (the Authority's "Municipal
Advisor") in consultation with Stifel, Nicolaus & Company, Incorporated, the Underwriter of the
Bonds.
Principal Amount. The Municipal Advisor has informed the Authority that, based on the
Authority's financing plan and current market conditions, its good faith estimate of the aggregate
principal amount of the Bonds to be sold is $35,655,000 (the "Estimated Principal Amount"), which
excludes approximately $3,015,522 of net premium estimated to be generated based on current
market conditions, which together total $38,670,522. Net premium is generated when, on a net
aggregate basis for a single issuance of bonds, the price paid for the bonds is higher than the
face value of such bonds.
True Interest Cost of the Bonds. The Municipal Advisor has informed the Authority that,
assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest
rates prevailing at the time of preparation of such estimate, its good faith estimate of the true
interest cost of the Bonds, which means the rate necessary to discount the amounts payable on
the respective principal and interest payment dates to the purchase price received for the Bonds,
is 4.38%.
Finance Charge of the Bonds. The Municipal Advisor has informed the Authority that,
assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest
rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance
charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs
associated with the Bonds), is $570,522.
Amount of Proceeds to be Received. The Municipal Advisor has informed the Authority
that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market
interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the
amount of proceeds expected to be received by the City for sale of the Bonds, less the finance
charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded
with proceeds of the Bonds, is $38,100,000.
Total Payment Amount. The Municipal Advisor has informed the Authority that, assuming
that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates
prevailing at the time of preparation of such estimate, its good faith estimate of the total payment
amount, which means the sum total of all payments the City will make to pay debt service on the
Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of
the Bonds, calculated to the final maturity of the Bonds, is $69,661,850,
The foregoing estimates constitute good faith estimates only. The actual principal amount
of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the
amount of proceeds received therefrom and total payment amount with respect thereto may differ
from such good faith estimates due to: (a) the actual date of the sale of the Bonds being different
than the date assumed for purposes of such estimates; (b) the actual principal amount of Bonds
sold being different from the Estimated Principal Amount; (c) the actual amortization of the Bonds
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being different than the amortization assumed for purposes of such estimates; (d) the actual
market interest rates at the time of sale of the Bonds being different than those estimated for
purposes of such estimates; (e) other market conditions; or (f) alterations in the Authority's
financing plan, delays in the financing, additional legal work or a combination of such factors and
additional finance charges, if any, attributable thereto. The actual date of sale of the Bonds and
the actual principal amount of Bonds sold will be determined by the Authority based on the timing
of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the
Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of
the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market
interest rates are affected by economic and other factors beyond the control of the Authority.