HomeMy WebLinkAboutRES NO 012-12RESOLUTION NO. 0 1 2 2
A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF NOT TO
EXCEED $25 MILLION IN AGGREGATE PRINCIPAL AMOUNT OF CITY
OF BAKERSFIELD, CALIFORNIA WASTEWATER REVENUE
REFUNDING BONDS SERIES 2012A, APPROVING A THIRD
SUPPLEMENTAL TRUST INDENTURE, A REMARKETING AGREEMENT,
A STANDBY BOND PURCHASE AGREEMENT, AN OFFICIAL
STATEMENT, A BOND PURCHASE AGREEMENT, AN ESCROW
AGREEMENT, AND A CONTINUING DISCLOSURE CERTIFICATE AND
AUTHORIZING AND DIRECTING ADDITIONAL ACTIONS IN
CONNECTION WITH THE ISSUANCE OF THE REVENUE REFUNDING
BONDS.
(Wastewater Revenue Refunding Bonds Series 2012A)
WHEREAS, the City of Bakersfield (the "City") is a charter city organized and existing
under the laws of the State of California (the "State"); and
WHEREAS, the City now owns and operates a municipal sewer system (the
"Enterprise"); and
WHEREAS, the City Council (the "Council") of the City, acting under and pursuant to
the powers reserved to the City under Sections 3, 5 and 7 of Article XI of the Constitution of the
State of California and Section 33.3 of the Charter of the City, has enacted the City of
Bakersfield Enterprise Revenue Bond Law (the "Law"), being Chapter 3.55 of the Municipal
Code of the City, which incorporates, to the extent made applicable by the Law, the Revenue
Bond Law of 1941, being Chapter 6 of Division 2 of Title 5 of the California Government Code,
as enacted and as thereafter amended; and
WHEREAS, the Law authorizes the City to issue enterprise revenue bonds for the
purposes set forth therein; and
WHEREAS, the City has determined that it is necessary and advisable to issue, from time
to time, one or more series of Bonds (as defined in the Master Trust Indenture, dated as of
August 1, 2007 (the "Master Trust Indenture"), by and between the City and U.S. Bank National
Association (the "Trustee")) for the purposes set forth in the Law and the Master Trust Indenture
and that such Bonds be payable from and secured by Net Revenues (as defined in the Master
Trust Indenture); and
WHEREAS, the City previously issued its City of Bakersfield, California Wastewater
Revenue Bonds Series 2007B (the "Series 2007B Bonds") in the initial aggregate principal
amount of $43,730,000; and
WHEREAS, the City has determined that it is in its best interest to issue one or more
series of Bonds in an aggregate principal amount not to exceed $25 million for the purpose of
refunding the outstanding Series 2007B Bonds (the "Refunding Bonds") in order to facilitate
replacing the existing liquidity provider supporting the 2007B Bonds; and
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WHEREAS, the City has determined that such Refunding Bonds shall be designated as
City of Bakersfield, California Wastewater Revenue Refunding Bonds Series 2012A (the
"Series 2012A Bonds"); and
WHEREAS, the City has previously entered into the State Revolving Fund Loan
Program Contract No. 7-806-550-0, dated as of September 3, 1997 (the "State Loan"), by and
between the City, and the State, acting through the State Water Resources Control Board (the
"State Water Board") whereby the City borrowed $14,954,054 from the State Revolving Fund
Loan Program to pay a portion of the costs and expenses of an upgrade and expansion to the
Enterprise's Wastewater Treatment Plant 2; and
WHEREAS, pursuant to the State Loan, the City owed a repayment amount of
$17,944,937; and;
WHEREAS, pursuant to the State Loan, the City has granted to the State a first lien (but
not necessarily an exclusive lien) on and pledge of the Net Revenues; and
WHEREAS, under the terms of the State Loan, the City may create a charge or lien on
the Net Revenues on a parity with or subordinated to the charge or lien of the State Loan; and
WHEREAS, the City previously issued, pursuant to the terms of the Master Indenture,
and a first supplement thereto, its City of Bakersfield, California Wastewater Revenue Bonds
Series 2007A (the "Series 2007A Bonds") in the initial aggregate principal amount of
$190,695,000, and such Series 2007A Bonds are secured by a pledge of Net Revenues; and
WHEREAS, the Series 2012A Bonds will be issued on a parity with the State Loan and
the Series 2007A Bonds; and
WHEREAS, the Series 2012A Bonds will be issued pursuant to the Law, certain other
provisions of the laws of the State (including Section 53580 et seq. of the California Government
Code), the Master Trust Indenture and the Third Supplemental Indenture (as hereinafter defined);
and
WHEREAS, the City has determined that it is appropriate and to its benefit to provide for
liquidity support of the Series 2012A Bonds in the form of the Standby Bond Purchase
Agreement (as hereinafter defined), to be entered into with JPMorgan Chase Bank, National
Association (the "Liquidity Provider"); and
WHEREAS, pursuant to the Standby Bond Purchase Agreement, the City is obligated to
repay the Liquidity Provider for its payment of the purchase price of the Series 2012A Bonds and
pay the Liquidity Provider other amounts owed pursuant to the provisions of the Standby Bond
Purchase Agreement; and
WHEREAS, the Series 2012A Bonds will be issued so that the interest paid on the
Series 2012A Bonds will be excluded from the gross income of the recipients thereof under the
varying provisions of the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder or related thereto (collectively, the "Code"); and
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WHEREAS, City staff has recommended the selection of U.S. Bank National Association
to act as escrow agent (the "Escrow Agent") under the Escrow Agreement; and
WHEREAS, City staff has recommended the selection of George K. Baum & Company
to act as underwriter of the Series 2012A Bonds and the remarketing agent for the Series 2012A
Bonds; and
WHEREAS, there have been prepared and submitted to the City Clerk for consideration
of this Council forms of the following documents:
(a) a form of the Third Supplemental Trust Indenture (the "Third
Supplemental Indenture") by and between the City and the Trustee;
(b) a form of the final Official Statement (the "Official Statement") relating to
the issuance of the Series 2012A Bonds;
(c) a form of the Bond Purchase Agreement (the "Bond Purchase
Agreement") by and between George K. Baum & Company (the "Underwriter") and the
City with respect to the purchase and sale of the Series 2012A Bonds;
(d) a form of the Remarketing Agreement (the "Remarketing Agreement") by
and between the City and George K. Baum & Company, as remarketing agent (the
"Remarketing Agent");
(e) a form of the Standby Bond Purchase Agreement (the "Standby Bond
Purchase Agreement"), by and between the City and the Liquidity Provider;
(f) a form of the Escrow Agreement (the "Escrow Agreement"), by and
between the City, the Trustee and the Escrow Agent, to be entered into with respect to the
Series 2007B Bonds; and
(g) a form of a Continuing Disclosure Certificate (the "Continuing
Disclosure Certificate") by the City; and
WHEREAS, said documents will be modified and amended to reflect the various details
applicable to the Series 2012A Bonds and said documents are subject to completion to reflect the
results of the sale of the Series 2012A Bonds;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Bakersfield
as follows:
Section 1. Issuance of Series 2012A Bonds; Terms of Series 2012A Bonds. For
the purposes set forth in the foregoing recitals, the City hereby authorizes the issuance of its
Series 2012A Bonds in an aggregate principal amount not to exceed $25,000,000 (subject to the
limitations set forth in this Resolution). The proceeds from such Series 2012A Bonds, and any
other moneys made available in connection with the refunding of the Series 2007B Bonds, may
be used to pay the costs of issuance and fund an escrow fund to pay the principal and interest on
the Series 2007B Bonds on the applicable redemption date.
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The Series 2012A Bonds shall be in fully registered form and may be issued as Book
Entry Bonds as provided for in the Master Trust Indenture and the Third Supplemental
Indenture. Payment of principal of and interest on the Series 2012A Bonds shall be made at the
place or places and in the manner provided in the Master Trust Indenture and the Third
Supplemental Indenture.
The Series 2012A Bonds shall be issued as current interest bonds and shall be initially
available in denominations of $100,000 and integral multiples of $5,000 thereof, or such other
denominations as may be authorized by a Designated Officer (as hereinafter defined). The
Series 2012A Bonds shall, when issued, be in the aggregate principal amounts and serial and/or
term maturities and be dated as provided in the final form of the Third Supplemental Indenture.
The Series 2012A Bonds shall initially be sold at par and shall initially bear interest at a variable
rate as described in the Third Supplemental Indenture, but in any event not in excess of twelve
percent (12%) per annum. Interest on the Series 2012A Bonds shall be paid on the dates set
forth in the Third Supplemental Indenture. The Series 2012A Bonds shall be sold in a manner by
which the interest thereon is excludable from gross income under the Code.
The City shall be obligated to reimburse the Liquidity Provider for all amounts drawn
under the Standby Bond Purchase Agreement and to pay interest on the amounts drawn under the
Standby Bond Purchase Agreement until such amounts are reimbursed all in accordance with the
terms of the Standby Bond Purchase Agreement, and the City authorizes the incurrence of the
payment obligations to the Liquidity Provider, being the obligation to repay advances and to pay
interest thereon, owed to the Liquidity Provider under the Standby Bond Purchase Agreement
(collectively, the "Payment Obligations"). The principal amount of each Payment Obligation
shall bear interest at such rates as set forth in the Standby Bond Purchase Agreement. The
Payment Obligations shall be subject to prepayment at any time in accordance with the terms of
the Standby Bond Purchase Agreement.
The City Council acknowledges that the interest rate payable on unpaid Payment
Obligations may exceed the maximum rate payable on the Series 2012A Bonds.
Section 2. Pledge to Secure the Series 2012A Bonds and the Payment
Obligations. The pledge to secure the Series 2012A Bonds as set forth in the Master Trust
Indenture and the Third Supplemental Indenture is hereby approved. Net Revenues are hereby
irrevocably pledged in accordance with the terms of the Master Trust Indenture to secure the
Payment Obligations as set forth in the Master Trust Indenture, the Third Supplemental
Indenture and the Standby Bond Purchase Agreement. The pledge to secure the Payment
Obligations as set forth in the Third Supplemental Indenture and the Standby Bond Purchase
Agreement is hereby approved.
Section 3. Special Obligations. The Series 2012A Bonds and the Payment
Obligations shall be special obligations of the City, secured by, and payable from, Net Revenues
and from the funds and accounts held by the Trustee and the City under the Master Trust
Indenture and the Third Supplemental Indenture, as and to the extent therein described. The
Series 2012A Bonds and the Payment Obligations shall also be secured by and be paid from such
other sources as the City may hereafter provide.
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Section 4. Forms of Series 2012A Bonds. The Series 2012A Bonds and the
Trustee's Certificate of Authentication to appear thereon shall be in substantially the form set
forth in Exhibits A-1 and A-2 to the Third Supplemental Indenture with necessary or appropriate
variations, omissions and insertions as permitted or required by the Master Trust Indenture or the
Third Supplemental Indenture or as appropriate to adequately reflect the terms of the
Series 2012A Bonds and the obligation represented thereby.
Section 5. Execution of the Series 2012A Bonds. Each of the Series 2012A Bonds
shall be executed by the Mayor or the City Manager of the City (each a "Designated Officer")
and attested by the Finance Director or Clerk of the City. Any such signatures may be by
manual or facsimile signature and the seal of the City may be impressed or printed on the
Series 2012A Bonds. Additionally, each of the Series 2012A Bonds shall be authenticated by
the signature of the Trustee or an agent of the Trustee as required and permitted by the Master
Trust Indenture and the Third Supplemental Indenture. Any facsimile signature of such
Designated Officer of the City shall be of the same force and effect as if such signature were
manually placed on such Series 2012A Bonds.
Section 6. Approval of Documents; Authorization for Execution. The form,
terms and provisions of the Third Supplemental Indenture, the Remarketing Agreement
(including the payment of a remarketing fee per annum equal to 0.08% (8 basis points) of the
weighted average daily principal amount of the Series 2012A Bonds), the Escrow Agreement
and the Continuing Disclosure Certificate (collectively, the "Documents") are in all respects
approved and the Mayor of the City, the City Manager, the Finance Director of the City, the City
Attorney and such other officers as are specified by each of the respective Documents (together
with any designee in writing of any such officer; all references hereinafter in this resolution to
any officer of the City shall be deemed to include any designee in writing of such officer) are
hereby authorized, empowered and directed to execute, acknowledge and deliver each of the
Documents including counterparts thereof, in the name and on behalf of the City. The
Documents, as executed and delivered, shall be in substantially the forms now before this
meeting and hereby approved, or with such changes therein as shall be approved by the officer or
officers of the City executing the same; the execution thereof shall constitute conclusive
evidence of the City's approval of any and all changes or revisions therein from the forms of the
Documents now before this meeting; and from and after the execution and delivery of the
Documents, the officers, agents and employees of the City are hereby authorized, empowered
and directed to do all such acts and things and to execute all such documents as may be
necessary to carry out and comply with the provisions of the Documents.
Section 7. Sale of the Series 2012A Bonds. The sale of the Series 2012A Bonds is
hereby approved through a private, negotiated sale to the Underwriter. The Mayor of the City,
the City Attorney, the City Manager and the Finance Director of the City, or any one of them, are
hereby authorized to approve the final terms of the sale of the Series 2012A Bonds subject to the
terms, conditions and restrictions set forth in this Resolution.
The Series 2012A Bonds shall be sold with an underwriter's discount and/or underwriting
fee as set forth in the Bonds Purchase Agreement, not to exceed one-half percent (.1)% of the
aggregate principal amount of the Series 2012A Bonds, and subject to the terms and conditions
set forth in the Bond Purchase Agreement.
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The form, terms and provisions of the Bond Purchase Agreement now before this
meeting are in all respects hereby approved and the Mayor of the City, the City Attorney, the
City Manager and the Finance Director of the City are hereby authorized and empowered, either
alone or in combination, to execute and deliver the Bond Purchase Agreement, including
counterparts thereof, in the name and on behalf of the City. The Bond Purchase Agreement, as
executed and delivered, shall be in substantially the form now before this meeting and hereby
approved, or with such changes therein as shall be approved by the officer(s) executing the same;
the execution thereof shall constitute conclusive evidence of the City's approval of any and all
changes or revisions therein from the form of the Bond Purchase Agreement now before this
meeting; and from and after the execution and delivery of the Bond Purchase Agreement, the
officers, agents and employees of the City are hereby authorized, empowered and directed to do
all such acts and things and to execute all such documents as may be necessary to carry out and
comply with the provisions of the Bond Purchase Agreement.
Section 8. Standby Bond Purchase Agreement. The form, terms and provisions of
the Standby Bond Purchase Agreement are in all respects approved, including the payment of a
facility fee on the Available Commitment (as defined in the Standby Bond Purchase Agreement)
to the Liquidity Providerjplus any other fees or amounts owed to the Liquidity Provider
provided for thereunder. The Mayor of the City, the City Attorney, the City Manager and the
Finance Director of the City are hereby authorized and empowered, either alone or in
combination, to execute, acknowledge and deliver the Standby Bond Purchase Agreement
including counterparts thereof, in the name and on behalf of the City. The Standby Bond
Purchase Agreement, as executed and delivered, shall be in substantially the form now before
this meeting and hereby approved, or with such changes therein as shall be approved by the
officer(s) executing the same; the execution thereof shall constitute conclusive evidence of the
City's approval of any and all changes or revisions therein from the form of the Standby Bond
Purchase Agreement now before this meeting; and from and after the execution and delivery of
the Standby Bond Purchase Agreement, the officers, agents and employees of the City are hereby
authorized, empowered and directed to do all such acts and things and to execute all such
documents as may be necessary to carry out and comply with the provisions of the Standby Bond
Purchase Agreement.
Section 9. Appointment of Remarketing Agent. George K. Baum & Company is
hereby appointed as the initial Remarketing Agent for the Series 2012A Bonds. The
Remarketing Agent shall perform its duties and obligations as provided in the Remarketing
Agreement.
Section 10. Official Statement. The form of the Official Statement now before this
meeting is in all respects hereby approved to be used in connection with the sale of the
Series 2012A Bonds to the public. The Official Statement shall be in substantially the form now
before this meeting and hereby approved, or with such changes therein as shall be approved by
the Mayor of the City, the City Manager and the Finance Director of the City, or any one of
them. The Mayor of the City, the City Manager, the Finance Director of the City, or any one of
them, are hereby authorized and directed to execute the Official Statement in the name and on
behalf of the City. The execution thereof shall constitute conclusive evidence of the City's
approval of any and all changes or revisions therein from the form of the Official Statement now
before this meeting. The Official Statement shall be circulated (via printed format and/or
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electronic means) for use in selling the Series 2012A Bonds at such time or times as the Mayor
of the City, the City Manager, the Finance Director of the City, or any one of them, (after
consultation with the City's bond counsel and disclosure counsel and such other advisors the
City believes to be useful) shall determine that each Official Statement is a "final official
statement" within the meaning of Rule 15c2-12 promulgated under the Securities Exchange Act
of 1934, as amended ("Rule 15c2-12"), and any such action previously taken is hereby
confirmed, ratified and approved. The Underwriter is hereby authorized to distribute (via printed
format and/or electronic means) the Official Statement, in connection with the sale of the
Series 2012A Bonds to the public.
Section 11. Paying Agent and Registrar. The City hereby appoints U.S. Bank
National Association as paying agent (the "Paying Agent") and as registrar (the "Registrar") for
the Series 2012A Bonds. Such appointments shall be effective upon the issuance of the
Series 2012A Bonds, respectively, and shall remain in effect until the City shall, by supplemental
agreement or by resolution, name a substitute or successor thereto.
Section 12. Escrow Agent. The City hereby appoints U.S. Bank National
Association, as the Escrow Agent, in connection with the current refunding and defeasance of the
Series 2007B Bonds. Such appointment shall be effective upon the execution and delivery of the
Escrow Agreement and shall remain in effect until the City shall, by resolution, name a substitute
or successor thereto.
Section 13. Additional Authorization. The Mayor of the City, the City Manager, the
Finance Director of the City, the City Attorney and all officers, agents and employees of the
City, for and on behalf of the City, be and they hereby are authorized and directed to do any and
all things necessary to effect the execution and delivery of the Series 2012A Bonds, the
Documents, the Official Statement, the Bond Purchase Agreement and the Standby Bond
Purchase Agreement and to carry out the terms thereof. The Mayor of the City, the City
Manager, the Finance Director of the City, the City Attorney and all other officers, agents and
other employees of the City are further authorized and directed, for and on behalf of the City, to
execute all papers, documents, certificates and other instruments that may be required in order to
carry out the authority conferred by this Resolution and by the Series 2012A Bonds, the
Documents, the Official Statement, the Bond Purchase Agreement and the Standby Bond
Purchase Agreement or to evidence the same authority and its exercise. The foregoing
authorization includes, but is in no way limited to, authorizing City staff to pay costs of issuance
of the Series 2012A Bonds and the underwriting fees; authorizing the Finance Director of the
City to direct the investment of the proceeds of the Series 2012A Bonds in one or more of the
permitted investments provided for under the Master Trust Indenture and the Third Supplemental
Indenture (including, but not limited to, investment agreements) and to execute any documents
relating to such investments; and authorizing the execution by the Mayor of the City, the City
Manager, the Finance Director of the City, or any of them, of a tax compliance certificate as
required by the Master Trust Indenture and the Third Supplemental Indenture for the purpose of
complying with the arbitrage and rebate requirements of the Code, any documents required by
The Depository Trust Company in connection with the Book-Entry Bonds (as defined in the
Third Supplemental Indenture) and any notices of the current refunding and defeasance of the
Series 2007B Bonds required pursuant to the Master Trust Indenture and the Second
Supplemental Indenture.
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Section 14. Costs of Issuance. The City authorizes funds of the City to be used to pay
costs of issuance of the Series 2012A Bonds, including, but not limited to, costs and expenses of
attorneys, accountants and financial advisors, underwriting fees, costs associated with rating
agencies, remarketing agents, liquidity providers, the Trustee, the Escrow Agent, bond issuance
and surety bonds, printing, publications and mailing expenses; and any related filing fees thereof.
Section 15. Severability. The provisions of this Resolution are hereby declared to be
severable and, if any section, phrase or provisions shall for any reason be declared to be invalid,
such declaration shall not affect the validity of the remainder of the sections, phrases and
provisions hereof.
Section 16. Governing Law. This resolution shall be construed and governed in
accordance with the laws of the State of California.
Section 17. Repeal of Inconsistent Resolutions. All other resolutions of the City, or
parts of resolutions, inconsistent with this Resolution, are hereby repealed to the extent of such
inconsistency.
Section 18. Effective Date of Resolution. This Resolution shall take effect
immediately upon its passage.
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I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City
Council of the City of Bakersfield at a regular meeting thereof held on January 11, 2012, by the
following vote:
✓ ✓ ✓ ✓ ✓ ✓
SAGAS, BENHAM, WEIR, COUCH, HANSON, SULLIVAN, JOHNSON
AYE COUNCILMEMBER
NOES: COUNCILMEMBER
ABSTAIN: COUNCILMEMBER rlmng
ABSENT: COUNCILMEMBER ✓ M6.A. _
APPROVED this 111" day of January, 2012
uADVL`v r uAr r
VIRGINIA GENNARO
City Attorney
6JOVUA . RUDNICK
y Attorney II
4Z44- -e&/'/4t'cf
City Clerk and Ex Officio Cl k
of the Council of the City of akersfield
A KF
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APPROVED AS TO FORM: