RESOLUTION NO. 2024-52
RESOLUTION OF THE CITY OF HESPERIA AUTHORIZING THE ISSUANCE AND SALE OF SPECIAL TAX REFUNDING BONDS AND APPROVING AND AUTHORIZING RELATED DOCUMENTS AND ACTIONS City of Hesperia
Community Facilities District 2005-1 (Belgate Development Restructuring), County of San Bernardino, State of California
Special Tax Refunding Bonds, Series 2024
WHEREAS, the City Council of the City of Hesperia (the “City”) has conducted proceedings under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code (the “Act”), to form “City of Hesperia Community Facilities District 2005-1 (Belgate Development Restructuring), County of San Bernardino, State of California” (the “CFD”), to authorize the levy of special taxes upon the land within the CFD, and to issue bonds secured by said special taxes the proceeds of which are to be used to finance certain public improvements (the “Facilities”), all as described in those proceedings; and WHEREAS, under the provisions of the Act and pursuant to a Fiscal Agent Agreement, dated as of December 1, 2014 (the “2014 Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent (the “2014 Fiscal Agent”), the City issued its $18,450,000 initial principal amount City of Hesperia Community Facilities District No. 2005-1 (Belgate Development Restructuring), County of San Bernardino, State of California Special Tax Refunding Bonds, Series 2014 (the “2014 Bonds”); and WHEREAS, the 2014 Bonds are subject to optional redemption on March 1, 2025, without premium; and WHEREAS, the City has determined that, due to favorable interest rates, it is in the best interests of the City and the CFD that the 2014 Bonds be refinanced; and WHEREAS, this City Council now proposes to issue its City of Hesperia Community Facilities District 2005-1 (Belgate Development Restructuring), County of San Bernardino, State of California Special Tax Refunding Bonds, Series 2024 (the “Bonds”), and there have been submitted to this City Council certain documents described below providing for the issuance of the Bonds for the CFD and the use of the proceeds of those Bonds to refund the 2014 Bonds, and this City Council with the aid of its staff, has reviewed the documents and found them to be in proper order; and WHEREAS, there has also been submitted to this City Council a form of preliminary Official Statement in connection with the marketing of the Bonds and the City Council, with the aid of its staff, has reviewed the preliminary Official Statement; and WHEREAS, in accordance with Government Code Section 5852.1, the City Council has obtained and wishes to disclose the information set forth in Appendix A hereto; and 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 Bonds and the levy of the special taxes 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 Hesperia, as follows:
Section 1. Bonds Authorized. Pursuant to the Act, this Resolution, and the Fiscal Agent Agreement (as defined in Section 3 of this Resolution), bonds designated the “City of Hesperia Community Facilities District 2005-1 (Belgate Development Restructuring), County of San Bernardino, State of California Special Tax Refunding Bonds, Series 2024” (the “Bonds”) in the principal amount not to exceed thirteen million dollars ($13,000,000) are hereby authorized to be issued. The Bonds shall be dated, shall bear interest at the rates, shall mature on the dates (provided that the final maturity date of the Bonds shall not exceed the final maturity date of the 2014 Bonds), shall be issued in the form, shall be subject to redemption, shall be executed, and shall otherwise be issued and secured on the terms and conditions, all as set forth in the Fiscal Agent Agreement and in accordance with this Resolution; provided, however, that the net present value of the savings to be realized by the City as a result of the issuance of the Bonds (after deducting the costs of issuing the Bonds) must be at least 3% of the outstanding principal amount of the 2014 Bonds. The Fiscal Agent (as defined in Section 3 of this Resolution), an Authorized Officer (as defined in Section 2 of this Resolution) and other responsible officers of the City are hereby authorized and directed to take such actions as are required to cause the delivery of the Bonds upon receipt of the purchase price thereof.
The City Council hereby finds that:
(a) The Bonds constitute “refunding bonds” within the meaning of the Act because the proceeds thereof will be used to refund the 2014 Bonds. For the purposes of these proceedings for the issuance of the Bonds, the City Council hereby determines that (i) the total interest cost to maturity on the Bonds plus the principal amount of the Bonds is less than the total interest cost to maturity of the 2014 Bonds plus the principal amount of the 2014 Bonds to be refunded and (ii) the final maturity date of the Bonds is not later than the final maturity date of the 2014 Bonds. (b) It would be prudent in the management of the City’s fiscal affairs to issue the Bonds to refund the 2014 Bonds and, as a result, to cause a refunding of the 2014 Bonds. (c) The fiscal year 2024-25 assessed value of the real property in the CFD that would be subject to the special tax to pay debt service on the Bonds will be at least three times the principal amount of the sum of the following: (i) the principal amount of the Bonds and (ii) the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the CFD or a special assessment levied on property within the CFD.
Section 2. Authorities Granted. Each of the Mayor, the City Manager and the Assistant City Manager, or the written designee of any one of them as set forth in Section 9 below (each, an “Authorized Officer”), acting alone, is hereby authorized and directed to execute and deliver the documents approved herein in substantially the form on file with the City Clerk, together with such additions or changes as are approved by such Authorized Officer, including such additions or changes as are necessary or advisable to permit the timely issuance, sale and delivery of the Bonds. The approval of such additions or changes shall be conclusively evidenced by the execution and delivery by an Authorized Officer of the documents herein specified.
Section 3. Fiscal Agent Agreement. The Council hereby approves the form of the Fiscal Agent Agreement by and between the City, for and on behalf of the CFD, and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent Agreement”) with respect to the Bonds, in substantially the form on file with the City Clerk. The terms and provisions of the Fiscal Agent Agreement, as executed, are incorporated herein by this reference as if fully set forth herein. An Authorized Officer is hereby authorized and directed to execute the Fiscal Agent Agreement on behalf of the City and the City Clerk is hereby authorized and directed to attest thereto.
Section 4. Escrow Agreement. The form of Escrow Deposit and Trust Agreement by and among the City, for and on behalf of the CFD, and U.S. Bank Trust Company, National Association, as escrow holder, in substantially the form on file with the City Clerk (the “Escrow Agreement”), is hereby approved. An Authorized Officer is hereby directed to execute the same for the City. For the purposes hereof, the “Escrow Fund” established under the Escrow Agreement shall constitute the “refunding fund” under the Act and the “designated costs of issuing the refunding bonds” under the Act shall include the Costs of Issuance as defined in the Fiscal Agent Agreement and costs set forth in the Escrow Agreement. The City Council anticipates that the refunding of the 2014 Bonds will occur on or about March 1, 2025.
Section 5. Official Statement. The Council hereby approves the Official Statement prepared in connection with the Bonds in substantially the form submitted to the Council, together with any changes therein or additions thereto deemed advisable by an Authorized Officer. The Council hereby approves and authorizes the distribution by Stifel, Nicolaus & Co., Incorporated, the underwriter of the Bonds (the “Underwriter”), of the Official Statement to prospective purchasers of the Bonds, and authorizes and directs an Authorized Officer on behalf of the City to deem the Official Statement “final” pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”) prior to its distribution to prospective purchasers of the Bonds. The execution of the final Official Statement, which shall include then-current material financial information regarding the City and the CFD and such other changes and additions thereto deemed advisable by an Authorized Officer and such information permitted to be excluded from the preliminary version of the Official Statement pursuant to the Rule, shall be conclusive evidence of the approval of the Official Statement by the City for and on behalf of the CFD.
Section 6. Continuing Disclosure. The Council hereby approves the form of the Continuing Disclosure Certificate with respect to the Bonds in substantially the form thereof attached to the Official Statement on file with the City Clerk. An Authorized Officer is hereby authorized and directed to complete and execute the Continuing Disclosure Certificate on behalf of the City (for and on behalf of the CFD) with such changes, additions or deletions as may be approved by the Authorized Officer.
Section 7. Sale of the Bonds; Bond Purchase Agreement. The City Council hereby approves the appointment of Stifel, Nicolaus & Company, Incorporated, as Underwriter. The Bond Purchase Agreement, between the City and the Underwriter, in substantially the form on file with the City Clerk and made a part hereof as though set forth in full herein, is hereby approved by the City Council. An Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement in such form, together with such changes, insertions and omissions which are approved by an Authorized Officer and which are in accordance with the provisions of this Resolution, such execution to be conclusive evidence of such approval; subject to the requirement that the Underwriter’s discount on the purchase of the Bonds may not exceed 1.0% and the interest rate may not exceed the rate specified in Section 1 hereof. The City Council hereby approves the negotiated sale of the Bonds to the Underwriter pursuant to such Bond Purchase Agreement on the basis that such negotiated sale will result in a lower overall cost than would a competitive sale of the Bonds; such negotiated sale may be on a forward basis, as determined by an Authorized Officer.
Section 8. Approval of Agreements with Bond Counsel and Disclosure Counsel, Municipal Advisor and Special Tax Consultant. The Council hereby approves the form of the agreement for legal services with Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel to the City in connection with the Bonds, in substantially the form on file with the City Clerk. An Authorized Officer is hereby authorized and directed to complete and execute the Agreement for Legal Services on behalf of the City with such changes, additions or deletions as may be approved by the Authorized Officer.
The Council hereby approves the form of the agreement for municipal advisor services with Fieldman Rolapp & Associates, as municipal advisor to the City in connection with the Bonds, in substantially the form on file with the City Clerk. An Authorized Officer is hereby authorized and directed to complete and execute the agreement on behalf of the City with such changes, additions or deletions as may be approved by the Authorized Officer.
The Council hereby approves the form of the agreement for special tax consulting services with NBS Government Finance Group, in substantially the form on file with the City Clerk. An Authorized Officer is hereby authorized and directed to complete and execute the agreement on behalf of the City with such changes, additions or deletions as may be approved by the Authorized Officer.
Section 9. Actions Authorized. All actions heretofore taken by the officers and agents of the City with respect to the establishment of the CFD and the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the appropriate officers of the City are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements 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 Bonds in accordance with this resolution, including but not limited to any actions required in connection with issuance of ratings or one or more municipal bond insurance policies with respect to the Bonds, and any certificate, agreement, and other document described in the documents herein approved. All actions to be taken by an Authorized Officer, as defined herein, may be taken by such Authorized Officer or any designee, with the same force and effect as if taken by the Authorized Officer.
Section 10. Effectiveness. This resolution shall take effect from and after its adoption. The provisions of any previous resolutions in any way inconsistent with the provisions hereof in and for the issuance of the Bonds as herein described are hereby repealed. * * * * * * * * * * * *
ADOPTED AND APPROVED by the City Council of the City of Hesperia at a regular meeting held this 15th day of October 2024.
Larry Bird, Mayor
ATTEST:
Erin Baum, Assistant City Clerk
Appendix A
Government Code Section 5852.1 Disclosure
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 City by Fieldman Rolapp & Associates, the City’s Municipal Advisor, in consultation with Stifel, Nicolaus & Company, Incorporated, Underwriter of the Bonds.
Principal Amount. The Municipal Advisor has informed the City that, based on the CFD financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $11,280,000 (the “Estimated Principal Amount”).
True Interest Cost of the Bonds. The Municipal Advisor has informed the City 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 3.09%.
Finance Charge of the Bonds. The Municipal Advisor has informed the City 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 $477,994. Such fees and charges include fees for bond and disclosure counsel, municipal advisor, appraiser, market absorption consultant, special tax consultant, fiscal agent, city attorney and staff time related to bond issuance, set-aside for Fiscal Year 2024-25 CFD administrative expenses, printing, and underwriting.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City 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 on behalf of the CFD for sale of the Bonds, 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 $11,556,091.
Total Payment Amount. The Municipal Advisor has informed the City 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 that the CFD property owners 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 (including the Bond proceeds deposited into a debt service reserve fund), calculated to the final maturity of the Bonds, is $14,834,833.
The foregoing estimates 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 CFD financing plan, delays in the financing, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City 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 City. -4-
RESOLUTION NO. 2024-52
Resolution 2024-52