HomeMy WebLinkAboutResolution No. 2023-C58RESOLUTION NO. 2023-C58
RESOLUTION OF THE CITY COUNCIL OF CITY OF AZUSA
AUTHORIZING OPEN MARKET BOND REPURCHASE OF A PORTION
OF ITS OUTSTANDING TAXABLE PENSION OBLIGATION BONDS,
SERIES 2020
WHEREAS, in order to refinance certain pension liabilities of the City of Azusa (the
“City”), the City issued its Taxable Pension Obligation Bonds, Series 2020 (the “2020 FOBS”)
which were issued on September 30,2020; and
WHEREAS, the City is obligated to make certain annual debt service payments on such
outstanding 2020 FOBS; and
WHEREAS, recent increases in yields demanded by investors in virtually all types of
bonds have produced corresponding decreases in the market prices for such bonds, and as a result
thereof many of the City’s bonds now trade at prices significantly less than the principal amount;
and
WHEREAS, due to such decrease in the market prices for such bonds, the City may
achieve savings from the repurchase of a portion of the 2020 FOBS periodically on the open
market; and
WHEREAS, the City Council of the City (the “City Council”) deems it advisable and in
the best interests of the City to authorize the repurchase a portion of the outstanding of the 2020
FOBS on the open market (“Bond Repurchase Program”) from time to time; and
WHEREAS, the City shall utilize legally available monies in the City’s general fund
(“Surplus Cash”) to purchase a portion of the outstanding 2020 FOBS on the open market and
deliver them to the Wilmington Trust National Association, as trustee of the 2020 FOBS, to be
cancelled; and
WHEREAS, the use of Surplus Cash to purchase on the open market and cancel a portion
of the outstanding 2020 FOBS will reduce both the principal amount of the City’s bonds
outstanding and the annual amount of bond interest payable by the City; and
WHEREAS, the City Council desires Samuel A. Ramirez & Co., Inc. (“Ramirez & Co.”)
to serve as its repurchase agent in connection with the open market purchase of a portion of the
2020 FOBS; and
WHEREAS, on October 12, 2023, the City posted a notice on the Municipal Securities
Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) website a notice that
informs current holders of the outstanding 2020 FOBS of its intention to consider the repurchase
of a portion of the 2020 FOBS; and
WHEREAS, the City Council hereby authorizes the Bond Repurchase Program to reduce
debt service on the outstanding 2020 FOBS provided that any repurchase under the Bond
Repurchase Program will provide significant public benefits in the form of reductions in the
amounts of both the principal and interest payable on the City’s bonds as set forth in this resolution;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Azusa:
California does hereby find, determine and declare as follows:
SECTION LThe above recitals, and each of them, are true and correct and all actions
taken by the City related to the Bond Repurchase Program, including the posting of the notice on
EMMA are hereby accepted and ratified.
SECTION 2. The Bond Repurchase Program as described herein is hereby approved; and,
in connection therewith, the City Manager of the City (the “City Manager”) or the Director of
Administrative Services (the “Director of Administrative Services,” collectively with the City
Manager, the “Authorized Officers”) are each hereby authorized to utilize Surplus Cash to
purchase outstanding bonds of the 2020 POBS from time to time provided that:
the amount of Surplus Cash so used shall not exceed a total of $4,000,000,
inclusive of any fees and costs of such repurchase;
(a)
the present value of the debt service savings generated by such repurchase
is greater than zero, with such savings calculated net of all fees and expenses incurred in
connected therewith (in the case of a future available par redemption, the present value
calculation shall incorporate the defeased debt service from the call date to the final
maturity date);
(b)
the total amount of 2020 POBS purchased pursuant to the Bond Repurchase
Program shall not exceeds 20% of the outstanding principal amount of the 2020 POBS;
(c)
and
(d)any offer to purchase shall only be solicited to institutional buyers or
sophisticated investors.
SECTION 3. The form of the Dealer Manager and Bond Repurchase Agreement by and
between the City and Ramirez 8c Co., as repurchase agent (the “Agreement”) presented herewith
is approved as to form. Each Authorized Officer, acting on behalf of the City, is hereby authorized
and directed to execute and deliver the final form of the Agreement, with such additions thereto or
changes therein as such Authorized Officer may deem necessary and advisable. The approval of
such additions or changes shall be conclusively evidenced by the execution and delivery of such
documents or instruments by an Authorized Officer, following consultation with and review by
Best Best & Krieger LLP.
SECTION 4. All compensation payable to Ramirez & Co. for its services as Repurchase
Agent shall be included in the proposed purchase price of the bonds presented for purchase;
provided, however, that in no event shall Ramirez &Co.’s compensation exceed 1.00% of the
principal amount of any 2020 POBS so purchased.
SECTION 5. The following professionals are hereby appointed to serve the City in
connection with the Bond Repurchase Program:
l Urban Futures, Inc. is hereby engaged as municipal advisor; and
l Best Best & Krieger LLP is hereby engaged as special counsel.
SECTION 6. Each Authorized Officer hereby authorized and directed, jointly and
severally, to execute and sign any and all approvals, certificates, statements, requests, requisitions
and orders of the City in connection with the implementation of the Bond Repurchase Program
and the purchase and cancelation of bonds pursuant thereto; and any action specifically authorized
or directed by this Resolution to be undertaken by either of such officers may be undertaken by
the other with the same force and effect as if it had been undertaken by the officer specifically
authorized or directed to do so.
SECTION 7. This Resolution shall take effect from and after its adoption.
PASSED, APPROVED and ADOPTED this 16'^ day of October, 2023.
RobS"Qs&da\es
Mayor
ATTEST:
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CITY OF AZUSA
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) ss.
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1 HEREBY CERTIFY that the foregoing Resolution No.2023-C58 was duly adopted by the City
Council of Azusa at a regular meeting thereof, held on the 16‘^ day of October, 2023, by the
AYES:
NOES:
ABSENT: COUNCILMEMBERS: MENDEZ
COUNCILMEMBERS: GONZALES, BECKWITH, ALVAREZ, AVILA
COUNCILMEMBERS:
ity Clerk
APPROVED AS TO FORM:
Best, Bek & Krieger,
City Attorney
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