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HomeMy WebLinkAboutResolution No. 08-C0400 0 RESOLUTION NO. 08-C40 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF CITY OF AZUSA TAXABLE PENSION OBLIGATION BONDS, AND APPROVING THE FORMS OF AND AUTHORIZING THE EXECUTION. AND DELIVERY OF AN INDENTURE RELATING THERETO, AND AUTHORIZING A VALIDATION ACTION AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City Council of the City of Azusa (the "City Council" and the "City", respectively) adopted a retirement plan pursuant to the Public Employees' Retirement Law, commencing at Section 20000 of the Government Code of the State of California, as amended (the "PERS Law"); and WHEREAS, among other things, the PERS Law obligates the City (1)'to amortize the unfunded accrued actuarial liability to the California Public Employees' Retirement System (including any successor system established by the State of California, (the "State Retirement System"), with respect to pension benefits for its employees who are members thereof; and (2) to make annual contributions to the State Retirement System to fund pension benefits for said employees; and WHEREAS, the obligation of the City to pay its unfunded accrued actuarial liability to the State Retirement System and its normal annual contribution to the State Retirement System for its police, fire and miscellaneous pension plans (collectively, the "PERS Obligation") is evidenced by a contract between the City and the State Retirement System, dated as of December 20, 1948, as amended thereafter from time to time (collectively, the "PERS Contract"); and WHEREAS, as of June 30, 2008, based upon the actuarial report of the State Retirement System, the City will have an obligation of approximately $7,763,106 for public safety and approximately $6,000,000 for miscellaneous pursuant to the PERS Law as an unfunded accrued actuarial liability of the State Retirement System; and WHEREAS, the City currently has a normal annual contribution obligation of approximately $819,179 for public safety and $1,182,907 for miscellaneous which annual contribution does not include payments for the unfunded accrued actuarial liability obligation; and WHEREAS, the City desires to issue its taxable pension obligation bonds in one or more series (the "Series 2008 Bonds") in an aggregate principal amount equal to the sum of (a) the principal amount not to exceed the total amount of the PERS Obligation relating to the public safety plan, (b) the costs of issuance of the Series 2008 Bonds (including underwriters' discount), and (c) the original issue discount (if any) on the Series 2008 Bonds, for the purpose of refunding the PERS Contract and thereby providing funds to the State Retirement System for investment; and RVPUB\KBYRENS\749007.1 I 9 0 WHEREAS, the City desires to authorize the issuance of additional pension obligation bonds (the "Additional Bonds," and together with the Series 2008 Bonds, the "Bonds") for the purpose of refunding any additional PERS Obligations, in the future from time to time; and WHEREAS, there has been presented to this meeting the form of an Indenture proposed to be entered into by and between the City and Wells Fargo Bank, National Association, as trustee (the "Trustee"), relating to the Bonds (the "Indenture"); and WHEREAS, this Council desires to authorize and direct the execution of certain documents and the issuance of the Bonds; and WHEREAS, the City has full legal right, power and authority under the Constitution and the laws of the State of California to enter into the transactions hereinafter authorized. THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Recitals. The foregoing recitals are true and correct and this Council hereby so finds and determines. SECTION 2. Findings. The Council hereby finds and declares that the issuance of the Bonds to refund the PERS Contract relating to the public safety plan and the other actions contemplated hereby are in the best interests of the City and are expected, based on investment and other assumptions, to result in significant savings to the taxpayers of the City. SECTION 3. Issuance of Bonds. The Council hereby authorizes and approves the issuance of the Series 2008 Bonds to refund the PERS Contract relating to the public safety plan and the issuance of Additional Bonds from time to time to refund any additional PERS Obligations, and the Council hereby authorizes and directs any of the Mayor, the Mayor Pro Tem and the City Manager of the City (each, an "Authorized Officer") to execute the Series 2008 Bonds and the City Clerk of the City (the "City Clerk") to affix and attest the seal of the City thereto and to cause the Series 2008 Bonds to be authenticated and delivered in accordance with the Indenture; provided, that the aggregate principal amount of the Series 2008 Bonds (which in no event shall exceed ten million dollars ($10,000,000) net of the original issue discount (if any) on the Series 2008 Bonds) shall not exceed the sum of the unpaid principal amount of the PERS Obligation, plus the underwriter's discount on the Series 2008 Bonds and plus the original issue discount (if any) on the Series 2008 Bonds and plus the costs of issuance of the Series 2008 Bonds (including any bond insurance premiums and administrative cost related to the Series 2008 Bonds); and provided further, that the interest rate on the Series 2008 Bonds shall not exceed six and one-half percent (6.50%) per annum; and provided further, that the Series 2008 Bonds shall mature not later than thirty (30) years from their date of issuance. The Series 2008 Bonds shall be in substantially the forms set forth in the Indenture, with such changes therein, deletions therefrom and additions thereto as an Authorized Officer, or said officer's designee, shall approve as provided herein, such approval to be conclusively evidenced by the execution and delivery of the Series 2008 Bonds. Any Bonds may (as determined by an Authorized RVPUB\KBYRENS\749007.1 2 0 Officer or said officer's designee), be issued as fixed rate bond, auction rate securities, variable rate bonds, indexed notes, current interest bonds, deferred interest bonds, capital appreciation bonds, convertible capital appreciation bonds, embedded cap bonds, equity participation bonds or synthetic or hedged fixed rate bonds (or any combination of the foregoing) and may have applicable call features, base rates, variable rate determination methods, index maturities, spreads, spread multipliers, authorized denominations, payment date, applicable indexes and other variable items related thereto and may use credit enhancement (including, but not limited to, bond insurance, letters of credit and surety bonds). The City is obligated to satisfy its obligations under the Bonds from any lawfully available funds of the City. SECTION 4. The Indenture. The City is hereby authorized to enter into the Indenture with the Trustee, and an Authorized Officer, or said officers, is hereby authorized and directed to execute and deliver the Indenture on behalf of the City, which shall be in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto as an Authorized Officer, or said officer's designee, shall approve (but consistent with the authority granted to an Authorized Officer, or said officer's designee, in Section 3 hereof including, but not limited to, additions necessary for the issuance of the types of bonds referred to in Section 3 hereof) in consultation with the City Attorney ("City Attorney") and Best Best & Krieger LLP, Bond Counsel for the Bonds, and such approval shall be conclusively evidenced by the execution and delivery of the Indenture. Pursuant to the terms of the Indenture, any Additional Bonds shall be issued pursuant to supplemental indentures, subject to the limitations contained herein and in the Indenture. SECTION 5. Financing Participants. Urban Futures, Incorporated is hereby appointed to act as financing advisor for the 2008 Bonds. Best Best & Krieger LLP is hereby appointed as Bond Counsel for the 2008 Bonds. Chilton & Associates is hereby appointed underwriter for the 2008 Bonds subject to such limitations to be set forth in a bond purchase agreement which will be approved by the City Council at a later date. SECTION 6. Validation Action. The officers and agents of the City are, and each of them hereby is, authorized and directed to do any and all things, including bringing, a validation action under Section 860 of the California Code of Civil Procedure, and to execute and deliver any and all documents which they or any of them deem necessary or advisable in order to consummate the transactions contemplated by this resolution, the Indenture and the Series 2008 Bonds and otherwise to carry out, give effect to and comply with the terms and intent of this resolution, and all such actions heretofore taken by such officers are hereby ratified, confirmed and approved. SECTION 7. Effective Date. This resolution shall take effect immediately upon its passage. RVPUBUKBYRENS\749007.1 3 n PASSED, APPROVED AND ADOPTED this 2nd day of June, 2008. J eph Rocha, Mayor ATTEST: Vera Mendoza, City Clerk APPROVED AS TO FORM: Sonia Carvalho, City Attorney, BBK Law LLP STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I, Vera Mendoza, City Clerk of the City of Azusa, do hereby certify that the foregoing Resolution No. 08-C40, was duly introduced and adopted at a regular meeting of the Azusa City Council on this 2nd day of June, 2008, by the following vote, to wit: AYES: COUNCILMEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE Vera Mendoza, City Clerk RV PUB%KBYRENS1749007.1