HomeMy WebLinkAbout2022-07-12; City Council; Resolution 2022-178RESOLUTION NO. 2022-178
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING THE ISSUANCE OF REFUNDING BONDS, AND
APPROVING AND AUTHORIZING RELATED DOCUMENTS AND ACTIONS
WHEREAS, pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division
11.5 of the California Streets and Highways Code) (the "Act"), the City of Carlsbad (the "City"), a
municipal corporation that is duly organized and existing under the Constitution of the State of
California and its charter, has previously issued its Reassessment District No. 2012-1 Limited Obligation
Refunding Bonds (the "2012 Bonds"), which are secured by the unpaid reassessments on the properties
within Reassessment District No. 2012-1 of the City (the "2012 Reassessment District"); and
WHEREAS, the public interest requires the refunding of the 2012 Bonds, and the City Council of
the City (the "City Council") intends to accomplish the refunding through the levy of reassessments and
the issuance of refunding bonds upon the security thereof; and
WHEREAS, the City desires: (i) to establish a new reassessment district entitled Reassessment
District No. 2022-1 (the "Reassessment District") and to levy reassessments therein, including within
the 2012 Reassessment District; and (ii) to issue refunding bonds (the "Refunding Bonds") of the
Reassessment District pursuant to the Act, the proceeds of which Refunding Bonds will be applied to
refund the 2012 Bonds, and, on the date hereof, the City Council is adopting this Resolution with
respect to the matters described in clause (ii) and has adopted a separate resolution (described in the
following WHEREAS clause) with respect to the matters described in clause (i); and
WHEREAS, on the date hereof, the City Council adopted a resolution regarding its intention to
levy reassessments and to issue refunding bonds (the "Resolution· of Intention to Levy
Reassessments"), in and for the Reassessment District, and the City Council thereafter conducted
proceedings pursuant to the Act; and
WHEREAS, the proceedings under the Act and the Resolution of Intention to Levy
Reassessments are now completed, a list of unpaid reassessments (the "List of Unpaid Reassessments")
is on file with the City Clerk and the City Council wishes to provide for the issuance of the Refunding
Bonds on the security of such unpaid reassessments pursuant to the Act; and
WHEREAS, the purpose of the issuance of the Refunding Bonds shall be to refund and redeem
the 2012 Bonds; and
Exhibit 3
July 12, 2022 Item #17 Page 16 of 463
WHEREAS, there has been submitted to the City Council an indenture (the "Indenture")
providing for the issuance of the Refunding Bonds by the City for the Reassessment District, and the
City Council, with the aid of City staff, has reviewed the Indenture and found it to be in proper order,
and now desires to approve the Indenture and the issuance of the Refunding Bonds; and
WHEREAS, there has been submitted to the City Council an escrow agreement relating to the
2012 Bonds (the "Escrow Agreement"), which will be used to refund and redeem the 2012 Bonds, and
the City Council, with the aid of City staff, has reviewed the Escrow Agreement and found it to be in
proper order, and now desires to approve the Escrow Agreement; and
WHEREAS, the City Council has determined that a negotiated sale of the Refunding Bonds to
Stifel, Nicolaus & Company, Incorporated, as Underwriter (the "Underwriter") will result in a lower
overall cost to the City than a sale of the Refunding Bonds on sealed proposals to the highest bidder in
that a negotiated sale will allow for adequate time to pre-market the Refunding Bonds and for the
timing of the sale of the Refunding Bonds to be flexible, thereby maximizing the likely debt service
savings to the City; and
WHEREAS, there has been submitted to the City Council a bond purchase agreement with the
Underwriter relating to the Refunding Bonds (the "Purchase Agreement"), pursuant to which the
Underwriter will purchase the Refunding Bonds, and the City Council, with the aid of City staff, has
reviewed the Purchase Agreement and found it to be in proper order, and now desires to approve the
Purchase Agreement; and
WHEREAS, there has been prepared by City staff and submitted to the City Council a Preliminary
Official Statement relating to the Refunding Bonds (the "Preliminary Official Statement"), and the City
Council, with the aid of City staff, has reviewed the Preliminary Official Statement and found it to be in
proper order, and now desires to approve the Preliminary Official Statement; and
WHEREAS, there has been submitted to the City Council a Continuing Disclosure Agreement
relating to the Refunding Bonds (the "Continuing Disclosure Agreement"), and the City Council, with
the aid of City staff, has reviewed the Continuing Disclosure Agreement and found it to be in proper
order, and now desires to approve the Continuing Disclosure Agreement; and
WHEREAS, there has been presented to the City Council a List of Unpaid Reassessments showing
the unpaid reassessments upon the security of which the Refunding Bonds shall be issued, and the City
Council, with the aid of City staff, has reviewed and considered the List of Unpaid Reassessments; and
July 12, 2022 Item #17 Page 17 of 463
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 Refunding Bonds and the levy of the reassessments
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 Act.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.The City Council approves the reassessments which remain unpaid as shown on the List
of Unpaid Reassessments, which are incorporated herein by this reference. The total
amount of the unpaid reassessments is $20,225,000. For a particular description of the
lots, pieces and parcels of land bearing the respective reassessment numbers set forth
in the List of Unpaid Reassessments, reference is hereby made to the reassessment and
to the reassessment diagram, and any amendments thereto approved by the City
Council, all as recorded in the office of the Transportation Director, who is the
Superintendent of Streets of the City.
3.The City Council authorizes, pursuant to the Act, this Resolution and the Indenture, the
issuance of the Refunding Bonds in an aggregate principal amount of not to exceed
$20,225,000. 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, covenants and conditions of the
Refunding Bonds will be as provided in the Indenture as finally executed.
4.The City Council authorizes and directs the Mayor, the City Manager, the Assistant City
Manager, any Deputy City Manager, or the City Treasurer (each, an "Authorized Officer")
or the designee thereof to execute and deliver the various documents and instruments
described in this Resolution, provided that no additions or changes shall authorize an
aggregate principal amount of Refunding Bonds in excess of $20,225,000, a final
maturity date of the Refunding Bonds after September 2, 2035 or a stated interest rate
on the Refunding Bonds in excess of 5.00% per annum. The approval of such additions
July 12, 2022 Item #17 Page 18 of 463
or changes shall be conclusively evidenced by the execution and delivery of such
documents or instruments by an Authorized Officer, upon consultation with Stradling
Yocca Carlson & Rauth, a Professional Corporation, the City's bond counsel ("Bond
Counsel"), or Fieldman Rolapp & Associates, Inc., the City's municipal advisor (the
"Municipal Advisor").
5.The City Council approves the proposed form of Indenture presented to the City Council
at this meeting. Each of the Authorized Officers is hereby authorized and directed to
cause the same to be completed and executed on behalf of the City, subject to Sections
3 and 4 above.
6.The City Council approves the refunding of the 2012 Bonds with the proceeds of the
Refunding Bonds and other available moneys, in accordance with the provisions of the
documents pursuant to which such 2012 Bonds were sold and delivered.
7.The City Council approves the proposed form of Escrow Agreement presented to the
City Council at this meeting. Each of the Authorized Officers is hereby authorized and
directed to cause the same to be completed and executed on behalf of the City. Each
of the Authorized Officers is also hereby authorized and directed to cause escrow,
prepayment and/or redemption instructions with respect to the 2012 Bonds to be
completed and executed on behalf of the City, as necessary.
8.The City Council approves the proposed form of Purchase Agreement presented to the
City Council at this meeting. Each of the Authorized Officers is hereby authorized and
directed to cause the same to be completed and executed on behalf of the City, subject
to Section 4 above.
9.The City Council approves the preparation and distribution of the Preliminary Official
Statement in substantially the form presented to the City Council at this meeting. Each
of the Authorized Officers is hereby authorized: (i) to sign a certificate pursuant to Rule
1Sc2-12 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 in substantially the form of the Preliminary Official
Statement with such changes, insertions and omissions as the officer or officers
July 12, 2022 Item #17 Page 19 of 463
executing said document may require or approve, subject to advice from the City
Attorney or Bond 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 Refunding Bonds.
10.The City Council approves the proposed form of Continuing Disclosure Agreement
presented to the City Council at this meeting. Each of the Authorized Officers is hereby
authorized and directed to cause the same to be completed and executed on behalf of
the City.
11.The City Council directs, upon the sale of the Refunding Bonds to the Underwriter, the
Refunding Bonds to be prepared, authenticated and delivered, all in accordance with
the applicable terms of the Indenture, and each of the Authorized Officers is hereby
authorized and directed to take such actions as are required under the Indenture or the
Purchase Agreement to complete all actions required to evidence the delivery of the
Refunding Bonds upon the receipt of the purchase price thereof from the Purchaser.
12.The City Council discloses the good faith estimates of costs related to the Refunding
Bonds which are required by Section 5852.1 of the California Government Code in
Attachment A hereto and which are available to the public at the meeting at which this
Resolution is approved.
13.The City Council approves, confirms and ratifies all actions heretofore taken by the
officers and agents of the City with respect to the establishment of the Reassessment
District and the sale and issuance of the Refunding Bonds, including but not limited to
the distribution of the Preliminary Official Statement, and the proper officers of the City
are hereby authorized and directed to do any and all things, take any and all actions and
execute any and all certificates, agreements, contracts 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 Refunding Bonds in accordance with this Resolution,
the Indenture and any certificate, agreement, contract and other document described
in the documents herein approved, including but not limited to soliciting bids on a
municipal bond insurance policy and/or reserve surety, negotiating the terms of such
policy or policies, finalizing, if appropriate, the form of such policy or policies with a
July 12, 2022 Item #17 Page 20 of 463
municipal bond insurer and, if it is determined that the policy or policies will result in
net savings for the City, paying the insurance premium of such policy or policies from
the proceeds of the issuance and sale of the Refunding Bonds.
14.Each of the Authorized Officers is authorized to provide for all services necessary to
effect the issuance, sale and delivery of the Refunding Bonds. Such services shall
include, but not be limited to, obtaining legal services as approved by the City Attorney,
trustee services, verification agent services, consultant services, reassessment engineer
services and any other services deemed appropriate by an Authorized Officer. Any one
of the Authorized Officers is authorized to pay for the cost of such services, together
with other Costs of Issuance (as defined in the Indenture and as otherwise agreed to in
writing by an Authorized Officer) from the sale and delivery of Refunding Bond proceeds.
The Authorized Officers are hereby authorized and directed to pay all the fees and other
costs of issuance of the Refunding Bonds in accordance with the Purchase Agreement
and as otherwise agreed to by the City and the respective parties thereto, including
applicable CDIAC fees, verification agent fees and printer fees.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 12th day of :!!!!Y, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Hall, Blackburn, Bhat-Patel, Acosta.
None.
Norby.
/w FAVIOLA Mi:!!::J;;.,k Services Manager
(SEAL)
July 12, 2022 Item #17 Page 21 of 463
ATTACHMENT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Refunding Bonds in
accordance with Section 5852.1 of the California Government Code. Such good faith estimates have
been provided to the City by the City’s Municipal Advisor, after consultation with the Underwriter.
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s
financing plan and current market conditions, its good faith estimate of the aggregate principal amount
of the Refunding Bonds to be sold is $16,680,000 (the “Estimated Principal Amount”), which excludes
net premium estimated to be generated based on current market conditions. 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 Refunding Bonds. The Municipal Advisor has informed the City that,
assuming that the Estimated Principal Amount of the Refunding 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 Refunding 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 Refunding
Bonds, is 3.52%.
Finance Charge of the Refunding Bonds. The Municipal Advisor has informed the City that,
assuming that the Estimated Principal Amount of the Refunding 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 Refunding Bonds, which means the sum of all fees and charges paid to third
parties (or costs associated with the Refunding Bonds), is $463,243.
July 12, 2022 Item #17 Page 22 of 463
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming
that the Estimated Principal Amount of the Refunding 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 Refunding Bonds, less the finance charge
of the Refunding Bonds, as estimated above, and any reserves or capitalized interest paid or funded
with proceeds of the Refunding Bonds, is $17,023,384.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the
Estimated Principal Amount of the Refunding 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
Refunding Bonds, plus the finance charge for the Refunding Bonds, as described above, not paid with
the proceeds of the Refunding Bonds, calculated to the final maturity of the Refunding Bonds, is
$23,027,701.
The foregoing estimates constitute good faith estimates only. The actual principal amount of
the Refunding 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 Refunding Bonds being
different than the date assumed for purposes of such estimates; (b) the actual principal amount of
Refunding Bonds sold being different from the Estimated Principal Amount; (c) the actual amortization
of the Refunding Bonds being different than the amortization assumed for purposes of such estimates;
(d) the actual market interest rates at the time of sale of the Refunding Bonds being different than
those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the
City’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 Refunding Bonds
and the actual principal amount of Refunding Bonds sold will be determined by the City based on the
timing of the need for proceeds of the Refunding Bonds and other factors. The actual interest rates
July 12, 2022 Item #17 Page 23 of 463
borne by the Refunding Bonds will depend on market interest rates at the time of sale thereof. The
actual amortization of the Refunding 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 City.
July 12, 2022 Item #17 Page 24 of 463