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HomeMy WebLinkAbout2022-07-12 - Resolution No. FA-2022-01RESOLUTION NO. FA-2022-01 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT FINANCING AUTHORITY APPROVING THE SALE OF ITS REVENUE BONDS, SERIES 2022A IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $35,000,000 AND APPROVING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION THEREWITH AND CERTAIN OTHER MATTERS WHEREAS, the Yorba Linda Water District Financing Authority (the "Authority"), a public entity 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 and wastewater 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.)] and WHEREAS, the Yorba Linda Water District (the "District"), a county water district duly organized and existing under and by virtue of the laws of the State, and a member of the Authority, proposes to undertake the financing of the acquisition and construction of certain improvements, betterments, renovations and expansions of facilities within its water system (the "2022 Project"); and WHEREAS, the District also proposes to undertake the refinancing of the acquisition and construction of certain improvements, betterments, renovations and expansions of facilities within its water system (the "2012 Project" and, together with the 2022 Project, the "Project"); and WHEREAS, the Board of Directors of the Authority (the "Board") has determined that it is desirable to issue its Revenue Bonds, Series 2022A (the "Bonds") in an aggregate principal amount not to exceed $35,000,000 to assist the District in financing the 2022 Project and refinancing the 2012 Project; and WHEREAS, the Bonds are to be secured by installment payments to be made pursuant to an Installment Purchase Agreement (the "Installment Purchase Agreement"), by and between the District and the Authority, which installment payments will be payable from net revenues of the District's water system; and WHEREAS, the Board has determined that it is in the best interest of the Authority to enter into the Installment Purchase Agreement with the District, and to approve certain other documents; and Resolution No. FA-2022-01 Approving Sale of Revenue Bonds Series 2022A Not to Exceed $35M 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 2022 Project and the refinancing of the 2012 Project; and WHEREAS, pursuant to the Indenture, the Authority will assign to the Trustee the installment payments payable under the Installment Purchase Agreement; and WHEREAS, a preliminary official statement with respect to the Bonds (the "Preliminary Official Statement"), has been prepared by the District and the Authority with the assistance of Stradling Yocca Carlson & Rauth, a Professional Corporation, as bond counsel ("Bond Counsel") and disclosure counsel; and WHEREAS, the Authority desires to execute and deliver a Bond Purchase Agreement (the "Purchase Contract") with the District and Barclays Capital Inc., as underwriter of the Bonds (the "Underwriter"), with respect to the Bonds; and WHEREAS, there have been presented to the Board copies of each of the aforementioned documents and certain other documents relating to the foregoing; NOW, THEREFORE, the Board of Directors of the Yorba Linda Water District Financing Authority hereby finds, determines, declares and resolves as follows: SECTION 1. The Board hereby specifically finds and declares that each of the statements, findings and determinations of the Authority set forth in the above recitals and in the preambles of the documents approved herein are true and correct and that the financing and refinancing of the Project will result in significant public benefits for the residents of the District. The Board hereby further finds and determines that: (a) there are significant public benefits to the citizens of the District of the type described in Section 6586 of the Marks-Roos Local Bond Pooling Act of 1985 (the "Act") in having the Authority assist the District with respect to the financing and refinancing of the Project through the issuance of the Bonds, in that the issuance of the Bonds and related transactions will result in demonstrable savings in effective interest rate to the District and significant reductions in effective user charges levied by the District; and (b) the Project includes facilities for the production, storage, transmission or treatment of water within the meaning of Section 6586.5(c) of the Act. Resolution No. FA-2022-01 Approving Sale of Revenue Bonds Series 2022A Not to Exceed $35M 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 $35,000,000) that is determined by the Executive Director or the Treasurer, together with other available funds, as being necessary: (a) to finance the 2022 Project; (b) to refinance the 2012 Project; and (c) to pay the costs of issuing 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 substantially in the form on file with the Secretary. The Chair or Vice Chair of the Board or the Executive Director or the Treasurer of the Authority (each, an "Authorized 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 Bond Counsel and approved by the officer executing the same, said execution being conclusive evidence of such approval. SECTION 5. The Indenture is hereby approved substantially in the form on file with the Secretary. Each Authorized 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 substantially in the form on file with the Secretary. Each Authorized 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 $35,000,000, nor shall the underwriting discount exceed 0.30% of the aggregate principal amount of the Bonds, nor shall the all-in true interest cost of the Bonds exceed 5.00% per annum. SECTION 7. The preparation and distribution of the Preliminary Official Statement in substantially the form on file with the Secretary is hereby approved. Each Authorized Officer or the designee thereof is hereby authorized to sign a certificate pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 relating to the Preliminary Official Statement, and Resolution No. FA-2022-01 Approving Sale of Revenue Bonds Series 2022A Not to Exceed $35M each Authorized Officer or the designee thereof is hereby authorized and directed 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 General Counsel 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 Bonds. SECTION 8. SECTION 9. SECTION 10. SECTION 11. SECTION 12. The proceeds of the Bonds shall be deposited as provided in the Indenture and the Installment Purchase Agreement to finance the 2022 Project and refinance the 2012 Project. 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. The Board hereby authorizes the General Manager 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 savings for the District, to pay the insurance premium of such policy or policies from the proceeds of the issuance and sale of the Bonds. The Authorized Officers, the Secretary 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 relative to bond insurance or a reserve surety. In the event that the Chair and Vice-Chair of the Board are unavailable to sign any of the agreements described herein, any other member of the Board may sign such agreement. Good faith estimates of the costs associated with the Bonds, as required by California Government Code Section 5852.1, are disclosed in Exhibit A. SECTION 13.Unless otherwise defined herein, all terms used herein and not otherwise defined shall have the meanings given such terms in the Indenture unless the context otherwise clearly requires. Resolution No. FA-2022-01 Approving Sale of Revenue Bonds Series 2022A Not to Exceed $35M SECTION 14. This resolution shall take effect immediately. PASSED AND ADOPTED this 12'^ day of July 2022 by the following called vote: AYES: Directors DesRoches, Hawkins, Jones, Lindsey, and Miller NOES: None ABSTAIN: None ABSENT: None J. Wayne Iwller, PhD, President Yorba Linda Water District Financing Authority ATTEST: Annie Alexander, Board Secretary Yorba Linda Water District Financing Authority Reviewed as to form by General Counsel: Andrew B. Gagep<^sq. Kidman Gagenlaw LLP Resolution No. FA-2022-01 Approving Sale of Revenue Bonds Series 2022A Not to Exceed $35M 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 "Municipal Advisor"). Principal Amount. The Municipal Advisor has informed the Authority that, based on the District's financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $32,055,000 (the "Estimated Principal Amount"). 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 4.12%. 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 $273,865. 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 District for sale of the Bonds, plus the estimated premium amount of $3,575,082, plus the District's estimated contributions of $377,829, 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 $35,734,046. 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 District 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 $62,933,076. Resolution No. FA-2022-01 Approving Sale of Revenue Bonds Series 2022A Not to Exceed $35i\/l A-1 The foregoing estinnates 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 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 District'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. Resolution No. FA-2022-01 Approving Sale of Revenue Bonds Series 2022A Not to Exceed $35M A-2