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HomeMy WebLinkAboutRES NO 194-89RESOLUTION NO. 194-89 RESOLUTION OF THE COUNCIL OF THE CITY OF BAKERSFIELD CONCERNING THE DELIVERY OF CERTIFICATES OF PARTICIPATION TO FINANCE CERTAIN HEALTH CARE FACILITIES FOR SOUTHERN CARE CORPORATION AND AUTHORIZING THE FINANCE DIRECTOR TO EXECUTE CERTAIN DOCUMENTS IN CONNECTION THEREWITH WHEREAS, the City of Bakersfield, a municipal corporation and charter city duly organized and existing under and pursuant to the laws of the State of California (the "City"), is authorized under provisions of the California Government Code, particularly Chapter 5 of Part 2 of Division 3 of Title 4 thereof (the "Act"), to purchase, sell and lease both personal and real property for the common benefit and as is necessary or proper for municipal purposes; WHEREAS, Southern Care Corporation, a nonprofit corporation organized under the nonprofit corporation laws of the State of Texas and an organization described in Section 501(c) (3) of the Internal Revenue Code of 1986, as amended (the "Company"), has proposed that the City provide financing for certain skilled nursing care facilities located in the City (the "Health Facilities"), including but not limited to certain additions, improvements and betterments to the Health Facilities and such facilities as are appurtenant or related thereto, acquisition of equipment and payment of fees and expenses incurred in connection with the foregoing financing, which financing shall be accomplished by means of a lease and sublease arrangement (the "Project"); WHEREAS, the City has full legal right, power and authority under the Act to purchase, sell and lease real and personal property for the common benefit and as is necessary or proper for municipal purposes; WHEREAS, on August 30, 1989, the City adopted a resolution (the "Initial Resolution") giving its preliminary approval to the proposed execution and delivery of certain Certificates of Participation (Hilltop and Colonial Project), 1989 Series A (the "Certificates"), to finance the Health Facilities; WHEREAS, as of the date of the Initial Resolution, the proposed borrower of the proceeds of sale of the Certificates was to be AMG International, a New Jersey nonprofit corporation, but the parties to the financing have, for good cause shown, requested the right to substitute Southern Care Corporation as the borrower; WHEREAS, as of the date of the Initial Resolution, a maximum principal amount of Certificates of $9,000,000 was established, but the parties to the financing have, for marketing reasons, requested the City to authorize an increase in the aggregate principal amount of Certificates which may be delivered to $10,000,000; WHEREAS, there have been presented at this meeting a proposed form of Contract of Purchase (the "Contract of Purchase") to be entered into by and between Ehrlich Bober & Co., Inc., as underwriter (the "Underwriter") and the City, and approved and agreed to by the Company, a proposed form of Trust Agreement by and among U.S. Trust Company of California, N.A., as trustee (the "Trustee"), a proposed form of Lease Agreement by and between the Company and the City (the "Lease Agreement"), a proposed form of Sublease Agreement (the "Sublease Agreement") by and between the City and the Company, and a proposed form of Limited Offering Memorandum (the "Limited Offering Memorandum") to be distributed by the Underwriter in connection with the delivery and sale of the Certificates; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Bakersfield, California, as follows: Section 1. A lease and sublease financing through the execution and delivery of the Certificates is hereby approved to be accomplished under and pursuant to the Act. The Certificates shall be designated "City of Bakersfield Certificates of Participation (Hilltop and Colonial Project), 1989 Series A" and shall be executed and sold for the purpose of financing: (i) the acquisition and improvement of the Project as more fully described in the Lease Agreement and the Sublease Agreement; (ii) a reserve fund for the Certificates; and (iii) the costs of issuing the Certificates, which shall include an Underwriter's discount in an amount. not to exceed 2% of the par amount of the Certificates. Section 2. Southern Care Corporation is approved as the borrower of the proceeds of the sale of the Certificates. Section 3. The aggregate principal amount of the Certificates will not. exceed $10,000,000. Section 4. The average interest rate on the Certificates will not. exceed 10.5% per annum, payable semiannually. Section 5. The Certificates are to be revenue obligations of the City payable solely from the payments received 2 from the Company pursuant to the Sublease Agreement and are not to be secured by the taxing power or general credit of the City. Section 6. The proposed form of the Contract of Purchase presented a~ this meeting is hereby approved; and the Mayor, the Finance Director and the City Attorney of the City are hereby authorized and directed, for and in the name of the City, to execute the Contract of Purchase. Such Contract of Purchase shall be executed in substantially the form hereby approved, with such additions thereto or changes therein as are recommended or approved by the persons executing the same, such approval to be conclusively evidenced by the execution and delivery of the Contract of Purchase.. Section 7. The proposed form of the Trust Agreement presented at this meeting is hereby approved; and the Mayor, the Finance Director and the City Attorney are hereby authorized and directed, for and in the name of the City, to execute the Trust Agreement. Such Trust Agreement shall be executed in substantially the form hereby approved, with such additions thereto or changes therein as are recommended or approved by the persons executing the same, such approval to be conclusively evidenced by the execution and delivery of the Trust Agreement. Section 8. The proposed form of the Lease Agreement presented at this meeting is hereby approved; and the Mayor, the Finance Director and the City Attorney are hereby authorized and directed, for and in the name of the City, to execute the Lease Agreement. Such Lease Agreement shall be executed in substantially the form hereby approved, with such additions thereto or changes therein as are recommended or approved by the persons executing the same, such approval to be conclusively evidenced by the exeoution and delivery of the Lease Agreement. Section 9. The proposed form of the Sublease Agreement presented at this meeting is hereby approved; and the Mayor, the Finance Director and the City Attorney are hereby authorized and directed, for and in the name of the City, to execute the Sublease Agreement. Such Sublease Agreement shall be executed in substantially the form hereby approved, with such additions thereto or changes therein as are recommended or approved by the persons executing the same, such approval to be conclusively evidenced by the execution and delivery of the Sublease Agreement. Section 10. The proposed form of Limited Offering Memorandum presented at this meeting is hereby approved, and the Mayor, the Finance Director and/or the City Attorney are each hereby authorized and directed, for and in the name of the City to execute the Limited Offering Memorandum. Such Limited Offering Memorandum shall be executed in substantially the form hereby approved, with such additions thereto or changes therein 3 as are recommended or approved by the person or persons executing the same, such approval to be conclusively evidenced by the execution and delivery of the Limited Offering Memorandum. Section 11. U.S. Trust Company of California, N.A., Los Angeles, California, is hereby appointed as Trustee for the City and the Owners of the Certificates, with the duties and powers of such Trustee as shall be set forth in the Trust Agreement. The Trustee is hereby requested and directed to execute and to deliver the Certificates in accordance with the provisions of the Trust Agreement, upon payment of the purchase price thereof. Section 12. Any documents the execution of which by the Mayor, the Finance Director or the City Attorney (the "Authorized City Signatories") is authorized by this Resolution shall, in the absence or inability to act of any of the Authorized City Signatories, be executed by another of the Authorized City Signatories, as appropriate, or any other duly designated representative of the City. Section 13. The Authorized City Signatories and any other officers of the City are hereby authorized and directed, jointly and severally, to do any and all things to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the execution, sale and delivery of the Certificates, and otherwise to effectuate the purposes of this Resolution; and such actions previously taken by such officers ar hereby ratified and confirmed. Section 14. This resolution shall take effect immediately upon its passage. Dated: November 1, 1989 Mayor- CLARENCE E. MEDDERS 4 I, CAROL WILLIAMS , City Clerk of the City of Bakersfield, certify that the foregoing resolution was adopted by the Council of the City of Bakersfield, at a regular meeting held on the 1st day of November, 1989, by the following vote: Ayes: None Noes: None Absent: None City Clerk Bakersfield.fin