RESOLUTION NO. OPFA-_____
A RESOLUTION OF THE ONTARIO PUBLIC FINANCING AUTHORITY
AUTHORIZING THE ISSUANCE OF ITS LEASE REVENUE BONDS IN
THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED
$100,000,000 IN CONNECTION WITH THE FINANCING OF PUBLIC
CAPITAL IMPROVEMENTS, AUTHORIZING AND DIRECTING
EXECUTION OF AN INDENTURE, LEASE AGREEMENT,
MEMORANDUM OF ASSIGNMENT, BOND PURCHASE AND
CONTINUING COVENANT AGREEMENT AND AGENCY AGREEMENT,
AUTHORIZING THE SALE OF THE BONDS AND A PLACEMENT AGENT
AGREEMENT AND AUTHORIZING OFFICIAL ACTIONS AND
EXECUTION OF RELATED DOCUMENTS
WHEREAS, the Ontario Public Financing Authority (the “Authority”) has been formed pursuant to the laws of the State of California, namely, the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State, as amended from time to time (the “Act”), to finance the acquisition and construction of public capital improvements for the City of Ontario (the “City”); and
WHEREAS, the City has requested the Authority to issue its Taxable Lease Revenue Bonds, 2023 Series A (the “Bonds”) for the purpose of providing funds to enable the City to finance land acquisition and infrastructure improvements (the “Project”); and WHEREAS, the City intends to lease certain public improvements owned by the City (the “Leased Premises”) to the Authority and lease the Leased Premises back from the Authority pursuant to the Lease Agreement between the City and the Authority (the “Lease Agreement”); and
WHEREAS, the Bonds will be issued for the purpose of financing the cost of constructing and acquiring the Project, which Bonds are payable from lease payments to be paid to the Authority by the City pursuant to the Lease Agreement; and WHEREAS, the Bonds will be issued under the Indenture (the “Indenture”) by and between the Authority and Zions Bancorporation, National Association as trustee (the “Trustee”) and secured by the payment of the lease payments under the Lease Agreement; and
WHEREAS, under the Indenture, the Authority will assign its right to receive the lease payments and the right to exercise remedies under the Lease Agreement, to the Trustee as shown in a Memorandum of Assignment (the “Memorandum of Assignment”); and
WHEREAS, the City will undertake to construct the Project for the Authority pursuant to an Agency Agreement (the “Agency Agreement”) between the City and the Authority; and
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WHEREAS, the Authority and the City have been presented with a form of Bond Purchase and Continuing Covenant Agreement (the “Bond Purchase and Continuing Covenant Agreement’) among the Authority, the City and Bank of America, N.A. (or an affiliate thereof) (the “Purchaser’), which establishes the conditions under which the purchaser will acquire the Bonds originally for its own account and the necessary terms to be included in the bond documents; and
WHEREAS, the Authority and the City have been presented with a form of Placement Agent Agreement (the “Placement Agent Agreement”), among the Authority, the City and Hilltop Securities Inc., as placement agent for the Bonds (the “Placement Agent”), which establishes the terms and conditions for the Placement Agent to assist the Authority in placing the Bonds; and
WHEREAS, the Board of the Authority (the “Board”) has duly considered such transactions and has determined that it approves said transactions in the public interests of the City and the Authority;
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE ONTARIO PUBLIC
FINANCING AUTHORITY DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS:
SECTION 1. Findings and Determinations. (a) Pursuant to the Act, the Board hereby finds and determines that the issuance of the Bonds will result in savings in effective interest rates, bond underwriting costs and bond issuance costs and thereby result in significant public benefits within the contemplation of Section 6586 of the Act. (b) The Board finds and determines that the above recitals are true and correct and that the fair rental value of the leased premises exceeds the present value of lease payments to be made under the Lease Agreement.
SECTION 2. Issuance of Bonds. The Board hereby authorizes the issuance of the Bonds for the purpose of refinancing the Bonds under and pursuant to the Act, in the maximum aggregate principal amount not to exceed $100,000,000.00.
SECTION 3. Approval of Financing Documents. The Board hereby approves each of the following documents in substantially the respective forms on file with the Secretary, together with such additions thereto and changes therein as Bond Counsel shall deem necessary, desirable or appropriate, the execution of which by the Chair, the Vice Chair, the Executive Director, or the Treasurer shall be conclusive evidence of the approval of any such additions and changes:
(1) the Indenture;
(2) Lease Agreement;
(3) the Memorandum of Assignment;
(4) the Bond Purchase and Continuing Covenant Agreement; and 180
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(5) the Agency Agreement.
The Chair, the Vice Chair, the Executive Director or the Treasurer are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest and affix the seal of the Authority to, the final form of each of the foregoing documents and agreements for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of each of the foregoing documents and agreements.
SECTION 4. Placement Agent Agreement. Subject to the provisions of Section 5 hereof, the Executive Director, the Treasurer or their designee is hereby authorized and directed to negotiate and evidence the Authority’s acceptance of the offer made by the Placement Agent Agreement by executing and delivering the Placement Agent Agreement in a form as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof, so long as the Placement Agent’s fee shall not exceed $100,000.00.
SECTION 5. Final Terms of Bonds. The Executive Director or the Treasurer, or their designee based on such advice of Authority staff and the Authority’s financial consultant as said officer may deem necessary, is hereby authorized and directed to act on behalf of the Authority to establish and determine (i) the final principal amount of the Bonds, which amount shall not exceed $100,000,000.00; and (ii) the interest cost on the Bonds shall be as set forth in the term sheet presented to this meeting.
SECTION 6. Official Actions. The Chair, the Vice Chair, the Executive Director, the Treasurer, the Secretary and any and all other officers of the Authority are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, and including execution, delivery and recording of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in connection with the issuance and sale of the Bonds.
SECTION 7. Effective Date. This Resolution shall take effect upon adoption.
The Secretary of the Ontario Public Financing Authority shall certify as to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 7th day of March, 2023.
PAUL S. LEON, CHAIRMAN
ATTEST:
SHEILA MAUTZ, AUTHORITY SECRETARY
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APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
CITY ATTORNEY
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, Sheila Mautz, Secretary of the Ontario Public Financing Authority, DO HEREBY CERTIFY that the foregoing Resolution No. OPFA-___ was duly passed and adopted by the Board Members of the Ontario Public Financing Authority at their regular meeting held March 7, 2023 by the following roll call vote, to wit:
AYES: CHAIRMAN/BOARD MEMBERS:
NOES: BOARD MEMBERS:
ABSENT: BOARD MEMBERS:
SHEILA MAUTZ, AUTHORITY SECRETARY
(SEAL)
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The foregoing is the original of Resolution No. OPFA-___ duly passed and adopted by the Ontario Public Financing Authority at their regular meeting held March 7, 2023
SHEILA MAUTZ, AUTHORITY SECRETARY
(SEAL)
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RESOLUTION NO. 2023-____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA AUTHORIZING PROCEEDINGS AND AGREEMENTS
RELATING TO THE FINANCING OF PUBLIC CAPITAL IMPROVEMENTS
FOR PUBLIC PURPOSES, APPROVING THE ISSUANCE AND SALE OF
BONDS BY THE ONTARIO PUBLIC FINANCING AUTHORITY,
APPROVING A BOND PURCHASE AND CONTINUING COVENANT
AGREEMENT, A PLACEMENT AGENT AGREEMENT AND
AUTHORIZING OFFICIAL ACTIONS
WHEREAS, the Ontario Public Financing Authority (the “Authority”) has been formed pursuant to the laws of the State of California, namely, the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State, as amended from time to time (the “Act”), to finance the acquisition and construction of public capital improvements for the City of Ontario (the “City”); and
WHEREAS, the City has requested that the Authority issue its lease revenue bonds for the purpose of providing funds to enable the City to finance land acquisition and infrastructure improvements (the “Project”); and
WHEREAS, the City intends to lease certain public improvements owned by the City (the “Leased Premises”) to the Authority and lease the Leased Premises back from the Authority pursuant to the Lease Agreement between the City and the Authority (the “Lease Agreement”); and
WHEREAS, the Authority desires to issue its Taxable Lease Revenue Bonds, 2023 Series A (the “Bonds”) for the purpose of financing the Project, which Bonds will be payable from lease payments to be paid to the Authority by the City pursuant to the Lease Agreement; and
WHEREAS, the Bonds will be issued under the Indenture (the “Indenture”) by and between the Authority and Zions Bancorporation, National Association as trustee (the “Trustee”) and secured by the payment of the lease payments under the Lease Agreement; and
WHEREAS, under the Indenture, the Authority will assign its right to receive the lease payments and the right to exercise remedies under the Lease Agreement, to the Trustee as shown in a Memorandum of Assignment (the “Memorandum of Assignment”); and
WHEREAS, the City will undertake to construct the Project for the Authority pursuant to an Agency Agreement (the “Agency Agreement”) between the City and the Authority; and
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WHEREAS, the City and the Authority have been presented with a form of Bond Purchase and Continuing Covenant Agreement (the “Bond Purchase and Continuing Covenant Agreement”) among the Authority, the City and Bank of America, N.A. (or an affiliate thereof) (the “Purchaser”), which establishes the conditions under which the Purchaser will acquire the Bonds originally for its own account and the necessary terms to be included in the Indenture and Lease Agreement; and WHEREAS, the City and the Authority have been presented with a form of Placement Agent Agreement (the “Placement Agent Agreement”), among the Authority, the City and Hilltop Securities Inc., as placement agent for the Bonds (the “Placement Agent”), which establishes the terms and conditions for the Placement Agent to assist the Authority in placing the Bonds; and
WHEREAS, Section 5852.1 of the Government Code of the State of California (“Section 5852.1”) provides that the City Council obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Bonds, good faith estimates of: (a) the true interest cost of the Bonds, (b) the finance charge of the Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Bonds received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Bonds and (d) the sum total of all debt service payments on the Bonds calculated to the final maturity of the Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Bonds; and
WHEREAS, in accordance with Section 5852.1, the City has obtained such good faith estimates from the Placement Agent, and such estimates are disclosed in Exhibit A attached hereto; and
WHEREAS, the City Council has conducted a noticed public hearing pursuant to Section 6586.5 of the California Government Code and published notice was given in accordance with the terms of the Government Code.
WHEREAS, the City Council wishes at this time to authorize all proceedings relating to the issuance and sale of the Bonds and all other agreements and documents relating thereto.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY OF ONTARIO AS FOLLOWS:
SECTION 1. Findings and Determinations. (a) The City Council finds and determines that it is in the prudent management of the fiscal affairs of the City that the proceeds of the Bonds be used to finance the Project.
(b) Pursuant to the Act, the City Council hereby finds that the issuance of the Bonds by the Authority will result in savings in effective interest rates and bond issuance costs and thereby result in significant public benefits pursuant to Section 6586 of the Act.
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(c) The fair rental value of the leased premises, under the Lease Agreement (the “Leased Premises”), exceeds the present value of lease payments to be made under the Lease Agreement.
SECTION 2. Approval of Bonds. The City Council hereby approves of the issuance of the Bonds for the purpose of financing the Project by the Authority under and pursuant to the Act provided that the maximum aggregate principal amount of the Bonds shall not exceed $100,000,000.00.
SECTION 3. Approval of Financing Documents. The City Council hereby approves each of the following documents in the respective forms on file with the City Clerk, together with such additions thereto and changes therein as the Bond Counsel shall deem necessary, desirable or appropriate, the execution of which by the Mayor, the Mayor Pro Tem, the City Manager or the Executive Director of Finance shall be conclusive evidence of the approval of any such additions and changes. (a) The Lease Agreement;
(b) the Bond Purchase and Continuing Covenant Agreement; and (c) the Agency Agreement.
The Mayor, the Mayor Pro Tem, the City Manager or the Executive Director of Finance is hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to attest and affix the seal of the City to, the final forms of each of the above-mentioned documents for and in the name and on behalf of the City.
SECTION 4. Placement Agent Agreement. Subject to the provisions of Section 5 hereof, the City Manager, the Executive Director of Finance, or his designee is hereby authorized and directed to negotiate and evidence the City’s acceptance of the offer made by the Placement Agent Agreement by executing and delivering the Placement Agent Agreement in a form as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof so long as the Placement Agent’s fee shall not exceed $100,000.00.
SECTION 5. Final Terms of Bonds. The City Manager or the Executive Director of Finance, or his designee based on such advice of City staff and the Placement Agent as said officer may deem necessary, is hereby authorized and directed to act on behalf of the City to establish and determine (i) the final principal amount of the Bonds, which amount shall not exceed $100,000,000.00; and (ii) the interest cost on the Bonds shall be as set forth in the term sheet presented to this meeting.
SECTION 6. Official Actions. The Mayor, the Mayor Pro Tem, the City Manager, the Executive Director of Finance, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution, delivery and recording of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, 186
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may deem necessary or advisable in order to consummate the transactions as described herein in connection with the issuance and sale of the Bonds.
SECTION 7. Effective Date. This Resolution shall take effect upon adoption.
The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 7th day of March, 2023.
PAUL S. LEON, MAYOR
ATTEST:
SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
CITY ATTORNEY
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STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, Sheila Mautz, City Clerk of the City of Ontario, DO HEREBY CERTIFY that the foregoing Resolution No. 2023-___ was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held March 7, 2023 by the following roll call vote, to wit:
AYES: MAYOR/BOARD MEMBERS:
NOES: BOARD MEMBERS:
ABSENT: BOARD MEMBERS:
SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2023-___ duly passed and adopted by the Ontario City Council at their regular meeting held March 7, 2023
SHEILA MAUTZ, CITY CLERK
(SEAL)
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EXHIBIT A
GOOD FAITH ESTIMATES
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 the Placement Agent.
Principal Amount. The Placement Agent has informed the City that, based on the financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $100,000,000.00 (the “Estimated Principal Amount”) which does not include net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. Such Estimated Principal Amount and such estimated net premium amount would produce approximately $100,000,000.00 of gross proceeds.
True Interest Cost of the Bonds. The Placement Agent 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 4.99%.
Finance Charge of the Bonds . The Placement Agent 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 and inclusive of costs attributable to the purchase of a bond insurance or reserve surety policy (which the City would purchase only if the cost of such insurance premiums were less than the interest cost savings attributable thereto), 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 $556,000.00.
Amount of Proceeds to be Received. The Placement Agent 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 by the City for the 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 $99,460,000.00.
Total Payment Amount . The Placement Agent 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 the City 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, calculated to the mandatory tender date 189
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of the Bonds (being March 1, 2026), is $115,485,250 (excluding any offsets from any reserves or capitalized interest).
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 financing plan or finance charges, or a combination of such factors. Market interest rates are affected by economic and other factors beyond the control of the City.
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