RESOLUTION HPJFA NO. 2023-02
RESOLUTION OF THE HESPERIA JOINT PUBLIC FINANCE AUTHORITY APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS IN CONNECTION WITH THE REFINANCING OF AN OUTSTANDING LEASE OBLIGATION OF THE CITY OF HESPERIA WHEREAS, the City of Hesperia (the “City”) and the Hesperia Water District entered into a Joint Exercise of Powers Agreement, dated as of October 2, 2012, establishing the Hesperia Joint Public Finance Authority (the “Finance Authority”) for the purpose, among others, of providing assistance to the City with its financing programs; and WHEREAS, to provide assistance to the City with the financing of its acquisition of approximately 5,971 acre-feet of base annual production rights in the Alto Subarea of the Mojave Water Basin previously held by Rancho Las Flores, LLC, the Finance Authority previously issued its 2012 Lease Revenue Bonds (Water Rights Acquisition) in the aggregate principal amount of $26,735,000 (the “2012 Bonds”), under an Indenture dated as of December 1, 2012; the 2012 Bonds are payable from lease payments made by the City under a Property Lease dated as of December 1, 2012 (the “2012 Property Lease”), between the Finance Authority as lessor and the City as lessee; and WHEREAS, the property leased by the City from the Finance Authority under the 2012 Lease Agreement includes the real property and improvements constituting the Hesperia Branch Library, the Civic Plaza Park and the Hesperia Police Station; and WHEREAS, in order to finance acquisition and construction of a new Civic Plaza and related on-site improvements, the City previously caused execution and delivery of its 2005 Variable Rate Demand Certificates of Participation (Civic Plaza Financing) (the “2005 Certificates”) pursuant to a Trust Agreement, dated as of May 1, 2005, among the City, the Hesperia Public Financing Authority (the “Financing Authority”) and a corporate trustee; the 2005 Certificates represented interests in lease payments made by the City to the Financing Authority pursuant to a Lease Agreement, dated as of May 1, 2005; and WHEREAS, for the purpose of refinancing the 2005 Certificates, the City subsequently caused the Finance Authority to issue its 2013 Refunding Lease Revenue Bonds (Refinancing of 2005 Civic Plaza Financing) in the aggregate principal amount of $12,445,000 (the “2013 Bonds”), under an Indenture dated as of October 1, 2013; the 2013 Bonds are payable from lease payments made by the City under a Property Lease dated as of October 1, 2013 (the “2013 Lease Agreement”), between the Finance Authority as lessor and the City as lessee; and WHEREAS, the City leased the real property and improvements comprising City Hall from the Finance Authority under the 2013 Lease Agreement; and WHEREAS, the 2013 Bonds maturing on or after October 1, 2024 are subject to optional redemption, without premium, prior to maturity on any date on or after October 1, 2023, at the option of the Finance Authority; and WHEREAS, in order to achieve cash flow savings, the City wishes to prepay the lease payments payable by the City under the 2013 Lease Agreement and to cause the Finance Authority to defease and redeem the 2013 Bonds, and, for that purpose, the Finance Authority proposes to issue lease revenue bonds (the “2023 Lease Revenue Bonds”) under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Law”); and WHEREAS, in order to accomplish the refinancing plan, (i) the City and the Finance Authority will enter into a Site and Facilities Lease (the “Site Lease”), under which the City will lease to the Finance Authority certain real property and improvements of the City (the “Leased Property”), (ii) the City and the Finance Authority will enter into a Property Lease (the “Property Lease”), under which the Finance Authority will sublease the Leased Property to the City, (iii) the City and the Finance Authority will enter into an Escrow Deposit and Trust Agreement (the “Escrow Agreement”) with U.S. Bank Trust Company, National Association, as escrow bank and trustee for the 2013 Bonds, (iv) the Finance Authority will enter into an Indenture (the “Indenture”) with U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) and (v) the Finance Authority will issue the 2023 Lease Revenue Bonds, which will be payable from the lease payments made by the City to the Finance Authority under the Property Lease; and WHEREAS, there has been submitted to the Board of Directors (the “Board”) of the Finance Authority a form of preliminary Official Statement in connection with the marketing of the 2023 Lease Revenue Bonds and the Board, with the aid of its staff, has reviewed the preliminary Official Statement to assure proper disclosure of all material facts relating to the 2023 Lease Revenue Bonds that are in the personal knowledge of the members of the Board; and WHEREAS, the Finance Authority and the City propose to sell the 2023 Lease Revenue Bonds to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) pursuant to a bond purchase agreement (the “Bond Purchase Agreement”), the form of which is on file with the City Clerk; and WHEREAS, pursuant to Government Code Section 5852.1, certain information relating to the 2023 Lease Revenue Bonds is set forth in Exhibit A attached to this Resolution, and such information is hereby disclosed and made public; and WHEREAS, as permitted by Section 12.02 of the 2012 Property Lease, the City wishes to amend the 2012 Property Lease and certain other documents related to the 2012 Bonds to release the Hesperia Branch Library and the Civic Plaza Park from the 2012 Property Lease; and WHEREAS, the City and the Public Finance Authority intend to lease the Hesperia Branch Library and the Civic Plaza Park under the Property Lease and the Site Lease, but, in order to lease the Hesperia Branch Library, the City needs to receive from the County of San Bernardino (the “County”) a written subordination of its interests under an unrecorded lease agreement (“County Library Lease Agreement”) to the Property Lease and the Site Lease; and WHEREAS, as a result, the City intends to lease the City Hall under the Property Lease and the Site Lease in place of the Hesperia Branch Library until the County has agreed to subordinate the County Library Lease Agreement to the Property Lease and the Site Lease, after which the City intends to substitute the Hesperia Branch Library for the Hesperia City Hall; and WHEREAS, the Board has duly considered these transactions and wishes at this time to approve these transactions and make certain findings regarding significant public benefits to the Finance Authority’s members with respect to these transactions; NOW, THEREFORE, BE IT RESOLVED, BY THE BOARD OF DIRECTORS OF THE HESPERIA JOINT PUBLIC FINANCE AUTHORITY, as follows:
Section 1. Findings and Determinations. Pursuant to the Act, the Board hereby finds and determines that the issuance of the 2023 Lease Revenue Bonds and the transactions related thereto will result in significant public benefits to its members.
Section 2. Issuance of Bonds; Approval of Indenture. The Board hereby authorizes the issuance of the 2023 Lease Revenue Bonds in the maximum principal amount of not to exceed $9,000,000, subject to the requirement that the issuance of the 2023 Lease Revenue Bonds result in net present value savings equal to or greater than 3% of the outstanding principal amount of the 2013 Bonds and the Underwriter’s discount (exclusive of any original issue discount) does not exceed 1.1% of the principal amount of the 2023 Lease Revenue Bonds. The 2023 Lease Revenue Bonds shall be issued pursuant to the Indenture. The Board hereby approves the Indenture in the form on file with the Secretary of the Finance Authority (the “Secretary”), together with such additions thereto and changes therein as the Chair, the Executive Director or the Treasurer, or the written designee of any of them (each, a “Designated Officer”), acting alone, deems necessary, desirable or appropriate upon consultation with Jones Hall, A Professional Law Corporation, as bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Indenture for and in the name and on behalf of the Finance Authority. The Board hereby authorizes the performance by the Finance Authority of its obligations under the Indenture. The Board further hereby authorizes and directs execution and delivery by a Designated Officer of a memorandum of Indenture.
Section 3. Approval of Property Lease and Site Lease. The Board hereby approves the form of the Property Lease and the Site Lease by and between the Finance Authority and the City in the forms on file with the Secretary together with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final forms of the Property Lease and the Site Lease for and in the name of and on behalf of the Finance Authority. The Finance Authority hereby authorizes the performance by the Finance Authority of its obligations under the Property Lease and the Site Lease. The Board further hereby authorizes and directs execution and delivery by a Designated Officer of a memorandum of Property Lease.
Section 4. Approval of 2012 Lease Amendments The Board hereby approves the forms of the amendments to the site lease and the 2012 Property Lease related to the 2012 Bonds (the “2012 Lease Amendments”) on file with the Secretary, together with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized to attest, as appropriate, the 2012 Lease Amendments and such other agreements, documents and certificates as may be necessary or desirable to effectuate the purposes of the 2012 Lease Amendments. For the avoidance of doubt, the Board hereby approves and directs execution and delivery of the 2012 Lease Amendments regardless of whether the 2023 Lease Revenue Bonds are issued.
Section 5. Subordination Agreement. The Board hereby approves the form of a subordination agreement (the “Subordination Agreement”) between the City and the County on file with the Secretary, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel. If requested by the County or another interested party, the Subordination Agreement may be updated to add the Finance Authority as a party, and execution of the Subordination Agreement by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes approved hereby. A Designated Officer, acting alone, is hereby authorized and directed to execute, and the Secretary is hereby authorized to attest, as appropriate, the Subordination Agreement and such other agreements, documents and certificates as may be necessary or desirable to effectuate the purposes of the Subordination Agreement.
Section 6. Sale of Bonds. The Finance Authority hereby authorizes and directs a Designated Officer of the Finance Authority to enter into a contract on behalf of the Finance Authority to sell the 2023 Lease Revenue Bonds pursuant to a negotiated sale to the Underwriter. The Finance Authority hereby approves the form of the Bond Purchase Agreement on file with the Secretary, with such additions thereto and changes therein as a Designated Officer deems necessary, desirable or appropriate upon consultation with bond counsel to the Finance Authority, the execution of which by a Designated Officer be conclusive evidence of the approval of any such additions or changes, subject to compliance with the parameters set forth in Section 2. A Designated Officer, acting alone, is hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the Finance Authority’s obligations thereunder.
Section 7. Official Statement. The Board hereby approves the form of Official Statement relating to the 2023 Lease Revenue Bonds (the “Official Statement”) on file with the Secretary, together with such changes or additions thereto as a Designated Officer deems necessary, desirable or appropriate upon consultation with bond counsel to the Finance Authority, and authorizes a Designated Officer, acting alone, to deem a preliminary form of the Official Statement final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended, except for omissions permitted therein. Distribution of the preliminary form of Official Statement by the Underwriter is hereby approved. A Designated Officer, acting alone, is hereby authorized to execute the final form of the Official Statement with such changes or additions as the Designated Officer deems necessary, desirable or appropriate upon consultation with bond counsel to the Finance Authority, and the execution of the final Official Statement by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Board hereby authorizes the distribution of the final Official Statement.
Section 8. Escrow Agreement. The Board hereby approves the form of the Escrow Agreement on file with the Secretary, with such additions thereto and changes therein as a Designated Officer, acting alone, deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. A Designated Officer, acting alone, is hereby authorized and directed to execute the Escrow Agreement. The Board hereby authorizes the performance by the Finance Authority of its obligations under the Escrow Agreement.
Section 9. Agreement with Bond Counsel and Disclosure Counsel. The Board hereby designates Jones Hall, A Professional Law Corporation, to act as bond counsel and disclosure counsel. The Designated Officers, each acting alone, are hereby authorized and directed to execute an agreement with Jones Hall, A Professional Law Corporation, in the form on file with the Secretary.
Section 10. Official Actions. The Designated Officers, the Secretary and any and all other officers of the Finance Authority are hereby authorized and directed, for and in the name of and on behalf of the Finance Authority, to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the 2023 Lease Revenue Bonds, the refinancing of the 2013 Bonds, the selection of the Leased Property under the Property Lease, the removal of the Hesperia Branch Library and Civic Plaza Park as leased property with respect to the 2012 Bonds, the Subordination Agreement, the elimination of encumbrances on title to the Leased Property (including any amendments to the documents related to the 2013 Bonds), the purchase of one or more insurance policies for the 2023 Lease Revenue Bonds if determined to be in the bests interest of the Finance Authority by a Designated Officer, and the consummation of the transactions described herein, and such documents, assignments, certificates and agreements as may be required by the Indenture, the Property Lease, the Site Lease, the Refunding Instructions and any and all other documents and agreements approved hereunder.
Section 11. Effective. This Resolution shall take effect immediately upon its passage and adoption. * * * * * * * * * *
PASSED, APPROVED AND ADOPTED by the Board of Directors of the Hesperia Joint Public Finance Authority at a regular meeting held this 6th day of June, 2023.
AYES: Member:
NOES: Member:
ABSENT: Member:
ABSTAIN: Member
Brigit Bennington, Chair
ATTEST:
Erin Baum, Secretary
EXHIBIT A
REQUIRED GOOD FAITH ESTIMATES PURSUANT TO
GOVERNMENT CODE SECTION 5852.1
1. True Interest Cost of the 2023 Lease Revenue Bonds: 3.53%.
2. Finance charge for the 2023 Lease Revenue Bonds, being the sum of all fees and charges paid to third parties (Costs of Issuance of approximately $287,744 plus estimated underwriter’s compensation of $82,280): $370,024.
3. Amount of proceeds of the 2023 Lease Revenue Bonds expected to be received by the Finance Authority, net of proceeds for Costs of Issuance described in (2) above and net of capitalized interest (if any) and reserves (if any) paid or funded with the proceeds of the 2023 Lease Revenue Bonds: $7,983,372.
4. Total payment amount for the 2023 Lease Revenue Bonds, being the sum of (a) debt service to be paid on the 2023 Lease Revenue Bonds to final maturity, plus (b) any financing costs not paid from proceeds of the 2023 Lease Revenue Bonds: $10,417,722. *All amounts and percentages are estimates, and are made in good faith by the Finance Authority based on information available as of the date of adoption of this Resolution. - 4 -