RESOLUTION R2022-XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MANTECA, STATE OF CALIFORNIA, AUTHORIZING THE BORROWING OF FUNDS PURSUANT TO A LOAN AGREEMENT TO REFINANCE PRIOR OBLIGATIONS OF THE WATER SYSTEM AND WASTEWATER SYSTEM, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the City of Manteca (the “City”) owns and operates a system for the supply, treatment and distribution of water within the service area of the City (the “Water System”); and WHEREAS, to refinance improvements to the Water System, the City previously executed an Indenture, dated as of December 1, 2012, between the City and U.S. Bank National Association (now succeeded by U.S. Bank Trust Company, National Association), as trustee, in the principal amount of $35,840,000 (the “Prior Water Obligation”); and WHEREAS, the City owns and operates a system for the collection, treatment and disposal of wastewater within the service area of the City (the “Wastewater System”); and WHEREAS, to finance and refinance improvements to the Wastewater System, the City previously executed (1) Amendment No. 1 to Installment Sale Agreement, dated as of June 1, 2009, in the principal amount of $19,000,000, which amended that certain Installment Sale Agreement, dated as of December 1, 2003, between the City and the Manteca Financing Authority (the “Authority”), and (2) an Indenture, dated as of December 1, 2012, between the City and U.S. Bank National Association (now succeeded by U.S. Bank Trust Company, National Association), as trustee, in the principal amount of $22,690,000 (together, the “Prior Wastewater Obligations”); and WHEREAS, the Prior Water Obligation and the Prior Wastewater Obligations are sometimes collectively referred to herein as the “Prior Obligations”; and WHEREAS, the City has determined that it is in its best interests at this time to refinance, in full, the Prior Obligations and thereby realize interest rate savings, and in order to provide funds for that purpose, the City has determined to borrow funds from a private placement bank pursuant to a loan agreement as described herein; and WHEREAS, the City is authorized to borrow amounts for the purpose of refinancing the Prior Obligations under the laws of the State of California, including the provisions of Articles 10 and 11, Chapter 3, Part 1, Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code; and WHEREAS, the City has previously adopted a debt management policy and execution of the Loan Agreement is in compliance with the debt management policy; and WHEREAS, the information required to be obtained and disclosed with respect to the Loan Agreement by the City Council in accordance with Government Code Section 5852.1 is set forth in the staff report accompanying this Resolution; and WHEREAS, the City Council approves all of said transactions in furtherance of the public purposes of the City, and the City Council wishes at this time to authorize all proceedings relating to the borrowing of funds for the purposes specified herein; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Manteca, as follows:
To refund the Prior Water Obligation, the City Council hereby approves the borrowing of funds from J.P. Morgan Chase Bank, N.A. (including its affiliates, successors and assigns, the “Lender”) in a maximum principal amount not to exceed $21,000,000 and at an initial tax-exempt interest rate not to exceed 4.27%.
To refund the Prior Wastewater Obligations, the City Council hereby approves the borrowing of funds from the Lender in a maximum principal amount not to exceed $26,000,000 and at an initial tax-exempt interest rate not to exceed 4.48%.
In furtherance of the foregoing, each of the Mayor and the City Manager (including any person holding such office in an interim or acting capacity) (each, an “Authorized Officer”) is hereby authorized and directed to execute and deliver, on behalf of the City, the term sheet with the Lender, in substantially the form on file with the City Clerk.
In addition, the City Council hereby authorizes and directs an Authorized Officer to execute and deliver, on behalf of the City, the Loan Agreement between the City and the Lender (the “Loan Agreement”), in substantially the form on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the City Manager or City Attorney, in consultation with the City’s special legal counsel, Jones Hall, A Professional Law Corporation.
Amounts borrowed to refinance the Prior Water Obligation shall be secured by and payable from the net revenues of the Water System, and amounts borrowed to refinance the Prior Wastewater Obligations shall be secured by and payable from the net revenues of the Wastewater System, as described in further detail in the Loan Agreement.
If the final interest rate provided by J.P. Morgan Chase Bank, N.A. pursuant to its term sheet exceeds the parameters set forth in this Resolution, or if said bank fails for any reason to fund amounts required to refinance the Prior Obligations, the Authorized Officers are hereby authorized and directed to designate another bank or other financial institution to serve as lender with respect to the execution and delivery of the Loan Agreement (subject to the parameters set forth above), and all references to the “Lender” in this Resolution shall refer to such alternative bank or other financial institution without the need for any further action by the City Council.
In connection with the refinancing transactions described in this Resolution, the City Council hereby authorizes, ratifies and confirms the appointment of Urban Futures, Inc. to serve as municipal advisor, Oppenheimer & Co., Inc. to serve as placement agent, and Jones Hall, A Professional Law Corporation to serve as special legal counsel, with the fees and expenses of each such firm payable from the proceeds of the refinancing or other legally available funds.
The Mayor, City Manager, Finance Director, City Attorney, City Clerk and all other officers of the City are each authorized and directed in the name and on behalf of the City to execute and deliver any and all assignments, certificates, requisitions, agreements, notices, consents, and other documents, which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by the agreements and documents approved under this Resolution, including an escrow agreement or refunding instructions related to the Prior Obligations to be delivered on behalf of the City and the Authority.
Whenever in this Resolution any officer of the City is authorized to execute or attest to any document or take any other action, such execution, attestation, or other action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable.
This Resolution shall take effect immediately upon its adoption.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Manteca at a public meeting of said City Council held on the 1st day of November, 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
MAYOR:
BENJAMIN J. CANTU
Mayor
ATTEST:
CASSANDRA CANDINI-TILTON
City Clerk
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