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MORENO VALLEY PUBLIC FINANCING AUTHORITY
RESOLUTION NO. ____
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE
OF NOT TO EXCEED $ 25,000,000 AGGREGATE PRINCIPAL
AMOUNT OF LEASE REVENUE REFUNDING BONDS,
SERIES 2024A TO REFINANCE CERTAIN CAPITAL
IMPROVEMENTS; AUTHORIZING EXECUTION AND
DELIVERY OF A N INDENTURE, A GROUND LEASE, A
LEASE AGREEMENT, AN ASSIGNMENT AGREEMENT, A
BOND PURCHASE AGREEMENT AND AN ESCROW
AGREEMENT; APPROVING THE FORM O F OFFICIAL
STATEMENT; AND AUTHORIZING THE EXECUTION OF
DOCUMENTS AND THE TAKING OF ALL NECESSARY
ACTIONS RELATING TO THE FINANCING
WHEREAS, the City of Moreno Valley (the “ City”) and the former Community Redevelopment Agency of the City of Moreno Valley (the “Agency”) have heretofore executed a Joint Exercise of Powers Agreement, dated as of October 28, 1997 (the “ Joint Powers Agreement”), by and between the City and the Agency, which Joint Powers Agreement creates and establishes the Moreno Valley Public Financing Authority (the “Authority”); WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “ Marks-Roos Local Bond Pooling Act of 1985 ”) and the Joint Powers Agreement, the Authority is authorized to issue bonds for the purposes of financing and refinancing public capital improvements whenever there are significant public benefits to be realized; WHEREAS, the Authority has previously issued its Lease Revenue Refunding Bonds, Series 2014 (the “ Series 2014 Bonds”), the proceeds of which were applied by the City to refund the remaining outstanding Moreno Valley Public Financing Authority 2005 Lease Revenue Bonds (the “2014 Refunding Project”);
WHEREAS, the Authority and the City have determined that it would be in the best interests of the Authority, the City and the residents of the City to authorize the preparation, sale and delivery of the “Moreno Valley Public Financing Authority Lease Revenue Refunding Bonds, Series 2024A (the “Series 2024A Bonds”) for the purpose of refinancing the 2014 Refunding Project through the refunding of the Series 2014 Bonds and the prepayment the City’s lease obligations entered into in connection with the Series 2014 Bonds;
WHEREAS, in order to facilitate the issuance of the Series 2024A Bonds, the City and the Authority desire to enter into a Ground Lease, by and between the City and the Authority (the “Ground Lease”), pursuant to which the City will lease certain real property and improvements thereon, consisting of City Hall (the “Leased Assets”) to the Authority, and a Lease Agreement, by and between the City and the Authority (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Renta l Payments (as defined in the Lease Agreement), which are pledged to the owners of the Series 2024A Bonds by the Authority pursuant to an Indenture (the “Indenture”) by and among Wilmington Trust, National Association, as trustee (the “Trustee”), the City and the Authority;
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WHEREAS, the Authority and the Trustee desire to enter into an Assignment Agreement (the “Assignment Agreement”) in order to provide, among other things, that all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee; WHEREAS, in order to facilitate the refunding of the Series 2014 Bonds, the City, the Authority and Computershare Trust Company, National Association, as escrow agent (the “ Escrow Agent”) will enter into an Escrow Agreement (the “Escrow Agreement”); WHEREAS, the City and the Authority desire to provide for the negotiated sale of the Bonds and to enter into a Bond Purchase Agreement (the “Bond Purchase Agreement”) with Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) governing the terms of the Underwriter’s purchase of the Series 2024A Bonds from the Authority;
WHEREAS, a form of an Official Statement with respect to the Series 2024A Bonds (the “Official Statement”) has been prepared;
WHEREAS, Section 5852.1 of the California Government Code, which became effective on January 1, 2018, enacted pursuant to Senate Bill 450 (Chapter 625 of the 2017 -2018 Session of the California Legislature) (“SB 450”), requires that the Board of Directors obtain from an under writer, municipal advisor or private lender and disclose, prior to authorization of the issuance of bonds, including debt instruments such as the Series 2024A Bonds, with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public: (a) the true interest cost of the Series 2024A Bonds ; (b) the sum of all fees and charges to be paid to third parties with respect to the Series 2024A Bonds ; (c) the amount of proceeds of the Series 2024A Bonds that is expected to be received net of the fees and charges to be paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Series 2024A Bonds; and (d) the sum total of all debt service payments on the Series 2024A Bonds calculated to the final maturity of the Series 2024A Bonds plus the fees and charges to be paid to third parties which are not paid from the proceeds of the Series 2024A Bonds;
WHEREAS, in compliance with SB 450, the Board of Directors has obtained from Fieldman, Rolapp & Associates, Inc., as the City’s municipal advisor (the “ Municipal Advisor ”), and the Underwriter, the required good faith estimates and such estimates are disclosed and set forth on Exhibit A;
WHEREAS, there have been submitted to and are on file with the Secretary proposed forms of the Indenture, the Ground Lease, the Lease Agreement, the Assignment Agreement, the Escrow Agreement, the Bond Purchase Agreement and the Preliminary Official Statement; and WHEREAS, the issuance of the Series 2024A Bonds by the Authority and the execution and delivery of the Indenture, the Ground Lease, the Lease Agreement and the Assignment Agreement by the Authority will result in significant public benefits within the meaning of Section 6586 of the Marks- Roos Local Bond Pooling Act of 1985 through demonstrable savings in the effective interest rates and bond issuance costs and a more efficient delivery of City services to residential and commercial development, and it furthers the City’s public purpose to refinance for the purpose of refinancing the 2014 Refunding Project through the refunding of the Series 2014 Bonds and the prepayment the City’s lease obligations entered into in connection with the Series 2014 Bonds; 3 4891-4707-1410v4/022432-0049
NOW THEREFORE, THE BOARD OF DIRECTORS OF THE MORENO VALLEY
PUBLIC FINANCING AUTHORITY HEREBY FINDS, DETERMINES, DECLARES AND RESOLVES AS FOLLOWS:
Section 1. All of the recitals set forth above are true and correct, and the Board of Directors so finds and determines.
Section 2. The Board hereby approves the issuance of the Series 2024A Bonds by the Authority, in an aggregate principal amount not to exceed $ 25,000,000, to refinance the 2014 Refunding Project through the refunding the Series 2014 Bonds and the prepayment of the City’s lease obligations entered into in connection with the Series 2014 Bonds ; provided that the maturity date or dates (not to exceed November 1, 2035), interest rate or rates (not to exceed a true interest cost of
4.00%), interest payment dates, series, denominations, forms, registration privileges, manner of execution, place or places of payment, terms of redemption and other terms of the Series 2024A Bonds shall be as provided in the Indenture, as finally executed. The Chair, the Vice Chair, the Execu tive Director, the Treasurer and the Secretary (the “Authorized Officers”) of the Authority are hereby directed to perform the duties, if any, imposed upon each of them by the provisions of the financing documents approved herein, including the Indenture, the Ground Lease, the Lease Agreement, the Assignment Agreement and the Bond Purchase Agreement.
Section 3. The proposed form of Indenture, on file with the Secretary, is hereby approved.
The Authorized Officers, jointly and severally, are hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 4. The proposed form of Ground Lease , on file with the Secretary, is hereby approved. The Authorized Officers, jointly and severally, are hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Ground Lease in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of said Ground Lease shall end no later than November 1, 2035, plus an extension period of not to exceed 10 years.
Section 5. The proposed form of Lease Agreement, on file with the Secretary, is hereby approved. The Authorized Officers, jointly and severally, are hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Lease Agreement in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of said Lease Agreement shall end no later than November 1, 2035, plus an extension period of not to exceed 10 years.
Section 6. The proposed form of Assignment Agreement, on file with the Sec retary, is hereby approved. The Authorized Officers, jointly and severally, are hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement in substantially said form, with such chang es therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. 4 4891-4707-1410v4/022432-0049
Section 7. The proposed form of Bond Purchase Agreement, on file with the Secretary, is hereby approved. The Authorized Officers, jo intly and severally, or any such officer’s designee, are each hereby authorized and directed, on behalf of the Authority, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the underwriting discount (not including original issue discount) shall not exceed 1.00% of the aggregate principal amount of the Series 2024A Bonds.
Section 8. The proposed form of Escrow Agreement, on file with the Secretary, is hereby approved. The Authorized Officers, jointly and severally, or any such officer’s designee, are each hereby authorized and directed, on behalf of the Authority, to execu te and deliver the Escrow Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 9. The proposed form of Official Statement relating to the Series 2024A Bonds, in its preliminary form on file with the Secretary, is hereby approved. The Authorized Officers, jointly and severally, are hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver a final Official Statement in substantially the form of such preliminary Official Statement, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The Underwriter is hereby directed to distribute copies of the Official Statement to all actual purchasers of the Series 2024A Bonds .
Distribution by the Underwriter of the preliminary Official Statement relating to t he Series 2024A Bonds is hereby approved and the Authorized Officers, jointly and severally, are hereby authorized and directed, to execute a certificate confirming that the preliminary Official Statement has been “deemed final” by the Authority for purpos es of Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934.
Section 10. In accordance with SB 450, good faith estimates of the following have been obtained from the Municipal Advisor and the Underwriter and are set forth on Exhibit A: (a) the true interest cost of the Series 2024A Bonds; (b) the sum of all fees and charges to be paid to third parties with respect to the Series 2024A Bonds; (c) the amount of proceeds of the Series 2024A Bonds that is expected to be received net of the fees and charges to be paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Series 2024A Bonds; and (d) the sum total of all debt service payments on the Series 2024A Bonds calculated to the final maturity of the Series 2024A Bonds plus the fees and charges to be paid to third parties which are not paid with the proceeds of the Series 2024A Bonds.
Section 11. The Authorized Officers and Board members of the Authority are hereby authorized and directed, jointly and severally, to do any and all t hings and to execute and deliver any and all documents and certificates or revise any and all documents approved herein which they deem necessary or advisable in order to consummate the execution and delivery of the documents mentioned herein and otherwise to effectuate the purposes of this Resolution and the transactions contemplated hereby, including but not limited to taking such steps as may be necessary to record or cause to be recorded the Ground Lease, the Lease Agreement (or a memorandum thereof) an d the Assignment Agreement in the Office of the Riverside County Recorder, to execute and record or cause to be recorded termination agreements or quitclaims in connection with the refunding of the Series 2014 Bonds in the Office of the Riverside County Recorder, to execute escrow and/or redemption instructions, as may be necessary to refund the Series 2014 Bonds and to obtain bond insurance and/or a reserve fund surety policy to support the Series 2024A Bonds. 5 4891-4707-1410v4/022432-0049
Section 12. All actions heretofore taken by the Authorized Officers and other officers and agents of the Authority, or by the members of the Board of Directors of the Authority, with respect to the financing are hereby ratified, confirmed and approved.
Section 13. The Board of Directors hereby approves the execution and de livery of all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the California Government Code using DocuSign.
Section 14. This Resolution shall take effect from and after its adoption and approval.
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APPROVED AND ADOPTED this June 4, 2024.
Chairperson
ATTEST:
Secretary
APPROVED AS TO FORM:
General Counsel
A-1
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EXHIBIT A
GOOD FAITH ESTIMATES
The following information was obtained from the Municipal Advisor and the Underwriter, and is provided in compliance with Section 5852.1 of the California Government Code with respect to the base rental payments evidenced by the Series 2024A Bonds:
1. True Interest Cost of the Base Rental Payments Evidenced by the Series 2024A Bonds.
Assuming the principal amount of the Series 2024A Bonds issued by the Authority is $22,255,000 (the “Estimated Par Amount”), and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the base rental payments evidenced by the Series 2024A 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 Series 2024A Bonds, is 3.28%.
2. Finance Charge of the Series 2024A Bonds. Assuming the Estimated Par Amount of the Series 2024A Bonds is sold, and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the City’s finance charge of the Series 2024A Bonds , which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2024A Bonds), is $552,724.
3. Amount of Proceeds to be Received. Assuming the Estimated Par Amount of the Series 2024A Bonds is sold, and based on market interest rates p revailing at the time of preparation of this information, a good faith estimate of the amount of proceeds expected to be received by the City following the Authority’s sale of the Series 2024A Bonds, less the finance charge of the Series 2024A Bonds described in paragraph 2 above and any reserves or capitalized interest paid or funded with proceeds of the Series 2024A Bonds, is $24,031,454.
4. Total Payment Amount . Assuming the Estimated Par Amount of the Series 2024A Bonds is sold, and based on market int erest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all base rental payments the City pay, plus the finance charge of the Series 2024A Bonds described in paragraph 2 above not paid with the proceeds of the Series 2024A Bonds , calculated to the final base rental payment evidenced by the Series 2024A Bonds, is $29,193,142.
Attention is directed to the fact that the foregoing information constitutes good faith estimates only. The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from those presently estimated due to variations from these estimates in the timing of the sale of the Series 2024A Bonds, the actual principal amount of Series 2024A Bonds sold, the amortization of the Series 2024A Bonds sold and market interest rates at the time of sale. The date of sale and the amount of Series 2024A Bonds sold will be determined by the City based on market conditions and othe r factors. The actual interest rates at which the Series 2024A Bonds will be sold will depend on the bond market at the time of sale. The actual amortization of the Series 2024A Bonds will also depend, in part, on market interest rates at the time of sal e. Market interest rates are affected by economic and other factors beyond the City’s control.
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SECRETARY’S CERTIFICATE
The undersigned, Secretary of the Moreno Valley Public Financing Authority , does hereby certify as follows:
The foregoing resolution is a full, true and correct copy of a resolution duly adopted by a vote of a majority of the Board of Directors of the Moreno Valley Public Financing Authority at a regular meeting of said Board duly and regularly and legally held at the Council Chambers of the City Council, City Hall, 14177 Frederick Street, Moreno Valley, California, on June 4, 2024, of which all of such members had due notice, as follows:
AYES:
NOES:
ABSTAIN:
ABSENT:
An agenda of said meeting was posted at least 72 hours before said meeting at 14177 Frederick Street, Moreno Valley, California, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.
I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.
Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.
Dated: __________, 2024
Jane Halstead
Secretary of the Moreno Valley Public
Financing Authority
[Seal]