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HomeMy WebLinkAboutCity Council Resolution 18-062 -Amending Arrowhead ResoRESOLUTION NO. 18-062 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA FOR ITS COMMUNITY FACILITIES DISTRICT NO.2016 1 (ARROWHEAD PROJECT), APPROVING AND DIRECTING THE EXECUTION OF AN INDENTURE, APPROVING OTHER RELATED DOCUMENTS AND ACTIONS, AND SUPERSEDING RESOLUTION NO. 18-053 RESOLVED by the City Council (the "City Council") of the City of Saratoga (the "City") as follows: WHEREAS, the City Council intends that this Resolution (the "Resolution") shall supersede Resolution No. 18-053 in full; and WHEREAS, the City Council has conducted proceedings under and pursuant to the Mello - Roos Community Facilities Act of 1982 (the "Law"), to form the City of Saratoga Community Facilities District No. 2016-1 (Arrowhead Project) (the "District"), to authorize the levy of special taxes upon the land within the District, and to issue bonds secured by the special taxes the proceeds of which are to be used to finance water infrastructure improvements (the "Facilities"), all as described in the Resolutions entitled "A Resolution of Formation of City of Saratoga Community Facilities District No. 2016-1 (Arrowhead Project) Authorizing the Levy of a Special Tax Within the District, and Preliminarily Establishing an Appropriations Limit for the District" and "A Resolution of the City Council of the City of Saratoga, California Determining the Necessity to Incur Bonded Indebtedness Within City of Saratoga Community Facilities District No. 2016-1 (Arrowhead Project)," which Resolutions were adopted by the City Council on December 21, 2016; and WHEREAS, pursuant to said resolutions, an election was held within the District on May 2, 2017 and the qualified electors approved the propositions of the incurrence of the bonded debt, the establishment of the appropriations limit for the District and the levy of the special tax by more than two-thirds of the votes cast at said election; and WHEREAS, the City Council, as the legislative body of the District, desires to issue a first series of bonds for the District at this time under the Law to finance water infrastructure improvements which the District is authorized to finance; and WHEREAS, there have been filed with the City Clerk an Indenture (the "Indenture") providing for the issuance of the Series 2018 Bonds (as defined in Section 1 below), an Engagement Letter (the "Placement Engagement Letter"), executed by Piper Jaffrey & Co. (the "Placement Agent") and the City to be used in connection with the placement of the Series 2018 Bonds to Western Alliance Business Trust, a wholly owned affiliate of Western Alliance Bank, an Arizona corporation (the "Purchaser"), and a Commitment Letter from the Purchaser to the City, (the "Commitment Letter"), and the City Council, with the aid of City staff, has found the foregoing documents to be in proper order; and WHEREAS, based on the Fiscal Year 2018-19 assessed value of the real property within the District, the value of the real property in the District subject to the special tax to pay debt service on the Series 2018 Bonds is more than three times the sum of the principal amount of the Series 2018 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Law or a special assessment levied on property within the District as calculated in the manner set forth in Section 53345.8(a) of the Law; and WHEREAS, the City Council has determined in accordance with Section 53360.4 of the Law that a negotiated sale and private placement of the Series 2018 Bonds with the Purchaser, pursuant to the terms described in the Commitment Letter, will result in a lower overall cost to the City than a public sale; and WHEREAS, the Rate and Method of Apportionment for the District (the "Rate and Method of Apportionment") previously approved by the City and the requisite number of qualified voters permits the City Council to pass an ordinance or resolution for purposes of clarifying any vagueness or ambiguity as it relates to the Rate and Method of Apportionment, and attached hereto as Exhibit A are certain clarifications and guidance related to the calculation of the prepayment provisions in the Rate and Method of Apportionment in the event Special Taxes are prepaid prior to the issuance of any Bonds for the District; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the Series 2018 Bonds and the levy of said special taxes as contemplated by this Resolution and the documents referred to herein exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Law. NOW, THEREFORE, the City Council resolves and declares, as follows: 1. Pursuant to the Law, this Resolution and the Indenture, special tax bonds of the District (the "Bonds") in an aggregate principal amount not to exceed $3,000,000 are hereby authorized to be issued, and such Bonds shall be designated the "City of Saratoga Community Facilities District No. 2016-1 Special Tax Bonds, Series 2018 (Arrowhead Project) (Federally Taxable)" (the "Series 2018 Bonds"), to be issued and sold as provided herein. The Series 2018 Bonds shall be executed in the form set forth in and otherwise as provided in the Indenture. In accordance with the requirements of Section 53345.8 of the Law and the City's Local Goals and Policies for Community Facilities Districts, adopted by the City Council on May 19, 2016 (the "Local Goals and Policies"), the City Council hereby finds and determines that the Series 2018 Bonds, based on the Fiscal Year 2018-19 assessed value of the real property within the District subject to the special tax to pay debt service on the Series 2018 Bonds pursuant to the records of the County Assessor of the County of Santa Clara, is more than three times the principal amount of the Series 2018 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Law or a special assessment levied on property within the District, all as calculated in the manner provided in Section 53345.8(a) of the Law. The City Council finds that the Series 2018 Bonds, when issued pursuant to the Indenture, will be in accordance with the Local Goals and Policies. The City Council further finds that the private placement of the Series 2018 Bonds to the Purchaser as contemplated by the Placement Engagement Letter will result in a lower overall cost to the District than a public sale in accordance with Section 53360.4 of the Law. 2. The Indenture, including any attachments thereto, in the form on file with the City Clerk, is hereby approved. The City Manager, the Finance Director of the City and such other officers as the City Manager or Finance Director may designate (each, an "Authorized Officer") are hereby authorized and directed to execute and deliver the Indenture in said form, with such additions thereto or changes therein as are approved by an Authorized Officer upon consultation with the City Attorney ("City Attorney") and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Indenture by an Authorized Officer. The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms of the Series 2018 Bonds shall be as provided in the Indenture as finally executed. 3. The Commitment Letter between the City and the Purchaser, in the form on file with the City Clerk, is hereby approved. Each Authorized Officer is hereby authorized and directed to execute and deliver the Commitment Letter (provided that the aggregate principal amount of the Series 2018 Bonds placed thereby is not in excess of $3,000,000, and the interest rate on the Series 2018 Bonds does not exceed 6.05% per annum), with such additions thereto or changes therein as are recommended or approved by such officer upon consultation with the City Attorney and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Placement Engagement Letter by an Authorized Officer. 4. The Placement Engagement Letter between the City and the Placement Agent, in the form on file with the City Clerk, is hereby approved. Each Authorized Officer is hereby authorized and directed to execute and deliver the Placement Engagement Letter (provided that the Placement Agent fee is not in excess of $45,000), with such additions thereto or changes therein as are recommended or approved by such officer upon consultation with the City Attorney and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Placement Engagement Letter by an Authorized Officer. 5. The First Amendment to the Funding Agreement (the "First Amendment"), amending the Funding Agreement, dated November 2, 2016, by and between the City and the Arrowhead Cooperative, Inc., in the form on file with the City Clerk, is hereby approved. An Authorized Officer of the City is hereby authorized and directed to execute and deliver the First Amendment in said form, with such additions thereto or changes therein as are approved by an Authorized Officer upon consultation with the City Attorney and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the First Amendment by an Authorized Officer. 6. The City hereby covenants, for the benefit of the Series 2018 Bondowners, to commence and diligently pursue to completion any foreclosure action regarding delinquent installments of any amount levied as a special tax for the payment of interest or principal of the Series 2018 Bonds, said foreclosure action to be commenced and pursued as more completely set forth in the Indenture. 7. The Series 2018 Bonds, when executed, shall be delivered to the Trustee (as defined in the Indenture) for authentication. The Trustee is hereby requested and directed to authenticate the Series 2018 Bonds by executing the Trustee's certificate of authentication and registration appearing thereon, and to deliver the Series 2018 Bonds, when duly executed and authenticated, to the purchaser thereof in accordance with written instructions executed on behalf of the City by an Authorized Officer, which instructions such officer is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver to the Trustee. Such instructions shall provide for the delivery of the Series 2018 Bonds to the Purchaser thereof upon payment of the purchase price therefor. 8. The City Council approves the interpretations of the clarifications and ambiguities of the Rate and Method of Apportionment as provided in Exhibit A attached hereto. 9. All actions heretofore taken by the officers and agents of the City with respect to the establishment of the District, the rate and method of apportionment of special taxes for the District and the levy of the special tax in the District, and the sale and issuance of the Series 2018 Bonds are hereby approved, confirmed and ratified, and any Authorized Officer is hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the 2018 Bonds in accordance with this Resolution, and any certificate, agreement, and other document described in the documents herein approved. Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. 10. This Resolution and all of its resolutions and approvals shall supersede Resolution No. 18-053 adopted on October 17, 2018 in full. 11. This Resolution shall take effect upon its adoption. The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga City Council held on the 21st day of November 2018 by the following vote: AYES: Mayor Mary -Lynne Bernald, Vice Mayor E. Manny Cappello, Council Members Howard A. Miller, Emily Lo, Rishi Kumar NOES: ABSENT: ABSTAIN: Mary- �neernald,Mayor ATTEST: ;�2 " DATE: It �� 7 lz"al ebbie Bretschneider, Interim City Clerk EXHIBIT A Clarification of Rate and Method of Apportionment of the District for Prepayment Prior to Bond Issuance The Rate and Method of Apportionment of the District contemplated that prepayment of the special tax prior to the issuance of bonds for the District would be available to property owners. The Rate and Method of Apportionment of the District did not provide full instructions on how the prepayment of the special tax would be implemented. The mechanics on how prepayments of the special tax shall be paid in order to discharge the special tax lien prior to the issuance of bonds is clarified as follows: Prepayment in Full Prior to Bond Issuance Property owners in the District have had the opportunity to pay their special tax obligation without penalty or interest prior to the issuance of bonds for the District in adherence to the City of Saratoga, California Community Facilities District No. 2016-1 Funding Agreement, between the City and Arrowhead Cooperative, dated November 2, 2016. Property owners desiring to prepay their special tax obligation were required to notify the Arrowhead Cooperative of their intent to prepay such special tax obligation by July 31, 2017. Arrowhead Cooperative has mailed statements to each property owner requesting prepayment a statement containing the following information: • Assessor's Parcel Number to identify the property upon which the special tax is being prepaid • Amount required to prepay the special tax obligation in full. • Time and place of payment and the effect of failure to pay within such time. • Statement that the Special Tax lien has been recorded and the date of recordation. • Statement that prepayment of the Special Tax Lien does not guaranty that the improvements will be completed for the estimated cost and that additional monies may be required. The Special Tax lien will be released for all Assessor's Parcels which have paid their obligation in full as described in the mailed statement.