RESOLUTION NO. SMPFA __________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SAN MARCOS PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF SPECIAL TAX REVENUE REFUNDING BONDS, SERIES 2024, APPROVING THE FORMS OF AN INDENTURE OF TRUST, BOND PURCHASE AGREEMENT AND AN ESCROW DEPOSIT AND TRUST AGREEMENT, AND PRELIMINARY OFFICIAL STATEMENT, AND AUTHORIZING OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the San Marcos Public Financing Authority (the “Authority”) is a public agency organized under the Joint Exercise of Powers Law of the State of California and is authorized pursuant to said law and the Amended and Restated Joint Exercise of Powers Agreement creating the Authority to borrow money for the purpose of financing or refinancing public capital facilities improvements of the City of San Marcos (the “City”), the San Marcos Fire Protection District (the “Fire Protection District”) or any agency or subdivision of the City or the Fire Protection District, including any community facilities district formed by either the City or the Fire Protection District; and WHEREAS, the Authority has previously issued its $32,395,000 San Marcos Public Financing Authority Special Tax Revenue Refunding Bonds, Series 2014A (the “Prior Authority Bonds”) to finance, in part, the acquisition of the special tax refunding bonds issued by the City of San Marcos Community Facilities District No. 99-01 (the “Community Facilities District”) identified in Exhibit A attached hereto and incorporated herein by this reference (together, the “Prior Special Tax Refunding Bonds”); and WHEREAS, as a result of a combination of favorable conditions in the municipal bond market and the level of development, diversity of ownership, and increase in value of the properties within certain improvement areas of the Community Facilities District (collectively, the “Improvement Areas”) for which the Prior Special Tax Refunding Bonds were issued, the City Council of the City (the “City Council”), acting as the legislative body of the Community Facilities District, desires to issue the special tax refunding bonds identified in Exhibit B attached hereto and incorporated by this reference (collectively, the “Special Tax Refunding Bonds”) for the purpose of defeasing and redeeming the Prior Authority Bonds and thereby discharging the Prior Special Tax Refunding Bonds prior to their scheduled maturity in order to reduce the borrowing costs on such indebtedness; and WHEREAS, a reduction in such borrowing costs will, in turn, result in a reduction in the rate of special taxes necessary to be levied within the Improvement Areas thereby resulting in savings to the owners of the properties subject to the levy of such special taxes; and WHEREAS, the City Council has requested that the Authority issue, sell, and deliver its Special Tax Revenue Refunding Bonds, Series 2024 (the “2024 Authority Bonds”) in an aggregate principal amount not to exceed $20,000,000.00 to provide funds in order to acquire the Special Tax Refunding Bonds, and the Special Tax Refunding Bonds will provide funds to finance the defeasance and redemption of the Prior Authority Bonds thereby providing for the discharge of the Prior Special Tax Refunding Bonds; and WHEREAS, the 2024 Authority Bonds are to be offered by a negotiated sale to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”); and WHEREAS, there have been prepared and filed with the Secretary of this Board of Directors the forms of the following documents:
that certain Indenture of Trust, by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), establishing the terms and conditions pertaining to the issuance, sale, and administration of the 2024 Authority Bonds (the “Indenture of Trust”); the preliminary official statement describing the City, the Authority, the Community Facilities District and the Improvement Areas, the 2024 Authority Bonds, and the Special Tax Refunding Bonds (the “Preliminary Official Statement”); the Bond Purchase Agreement, by and among the Authority, the Community Facilities District and the Underwriter (the “Bond Purchase Agreement”), relating to the purchase of the 2024 Authority Bonds by the Underwriter and the purchase of the Special Tax Refunding Bonds by the Authority; and the Escrow Deposit and Trust Agreement by and among the Authority, the Community Facilities District, and U.S. Bank Trust Company, National Association, as escrow bank (the “Escrow Agreement”) to provide for the defeasance and redemption of the Prior Authority Bonds and the discharge of the Prior Special Tax Refunding Bonds; and WHEREAS, this Board has reviewed and considered such Indenture of Trust, Preliminary Official Statement, Escrow Agreement, and Bond Purchase Agreement and finds those documents suitable for approval, subject to the conditions set forth in this Resolution; and WHEREAS, Section 5852.1 of the California Government Code (“Section 5852.1”) provides that the Authority shall 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 2024 Authority Bonds, good faith estimates of (a) the true interest cost of the 2024 Authority Bonds, (b) the finance charge of the 2024 Authority Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the 2024 Authority Bonds received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the 2024 Authority Bonds, and (d) the sum total of all debt service payments on the 2024 Authority Bonds calculated to the final maturity of the 2024 Authority Bonds plus the fees and charges paid to third parties not paid with the proceeds of the 2024 Authority Bonds; and WHEREAS, in accordance with Section 5852.1, the Authority has obtained such good faith estimates from Fieldman, Rolapp & Associates, Inc., the Authority’s municipal advisor (the “Municipal Advisor”), and such estimates are disclosed in Exhibit C attached 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 2024 Authority Bonds as contemplated by this resolution and the documents referred to herein exist, have happened and have been performed or have been ordered to have been performed in due time, form and manner as required by the laws of the State of California.
NOW, THEREFORE, BE IT RESOLVED AND DETERMINED by the Board of Directors of the San Marcos Public Financing Authority as follows:
SECTION 1. Recitals. The above recitals are true and correct.
SECTION 2. Approval of Issuance and Sale of 2024 Authority Bonds. This Board of Directors hereby approves the issuance and sale of the 2024 Authority Bonds by negotiated sale to the Underwriter. The proceeds of the 2024 Authority Bonds shall be expended to purchase the Special Tax Refunding Bonds.
SECTION 3. Indenture of Trust. The form of the Indenture of Trust relating to the 2024 Authority Bonds presented at this meeting is hereby approved. The Executive Director, the Treasurer, or either of their authorized designee (each, an “Authorized Officer”), acting for and on behalf of the Authority, are, and each of them individually is, hereby authorized and directed to execute, acknowledge, and deliver the Indenture of Trust in substantially the form approved hereby, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve as being in the best interests of the Authority, and as approved as to form by the legal advisor to the Authority (“Authority General Counsel”) and Best Best & Krieger LLP, as bond counsel (“Bond Counsel”), such approval to be conclusively evidenced by the execution and delivery thereof by such Authorized Officer. The 2024 Authority Bonds shall mature on the dates and pay interest at the rates set forth in and shall be issued under the terms of the Indenture of Trust.
SECTION 4. Bond Purchase Agreement. The form of the Bond Purchase Agreement presented at this meeting and the sale of the 2024 Authority Bonds pursuant thereto is hereby approved. The Authorized Officers, acting for and on behalf of the Authority, are, and each of them individually is, hereby authorized and directed to evidence the Authority's acceptance of the terms and provisions of the Bond Purchase Agreement by executing and delivering the Bond Purchase Agreement, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve as being in the best interests of the Authority, and as approved as to form by the Authority General Counsel and Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof by such Authorized Officer; provided, however, that the Authorized Officer shall execute the Bond Purchase Agreement only if (i) the aggregate principal amount of the 2024 Authority Bonds is equal to or less than $20,000,000.00; (ii) the Authorized Officer determines that as a result of the sale of the 2024 Authority Bonds, as to each series of the Special Tax Refunding Bonds to be sold to the Authority, the total net interest cost to maturity of such Special Tax Refunding Bonds plus the principal amount of such Special Tax Refunding Bonds will not exceed the total net interest cost to maturity on the series of the Prior Special Tax Refunding Bonds being discharged plus the principal amount of such Prior Special Tax Refunding Bonds and has further determined, in his or her professional and prudent judgment, that under the circumstances existing at the time of the execution of the Bond Purchase Agreement the level of savings to be realized from the issuance of the 2024 Authority Bonds will be in the best interest of the taxpayers within the Improvement Areas; (iii) the final maturity of the 2024 Authority Bonds shall not be later than September 1, 2038, (iv) the Underwriter’s discount shall not exceed 1.00% of the principal amount of the 2024 Authority Bonds, and (v) the true interest cost of the 2024 Authority Bonds shall not exceed 4.00%.
SECTION 5. Approval of Preliminary Official Statement and Final Official Statement. The form of Preliminary Official Statement presented at this meeting is hereby approved. The Authorized Officers, acting for and on behalf of the Authority, are, and each of them individually is, hereby authorized and directed to approve such changes, insertions, and omissions therein as are necessary to enable such Authorized Officer to certify on behalf of the Authority that the approved Preliminary Official Statement is deemed final as of its date except for the omission of certain information as permitted by Section 240.15c2-12(b)(1) of Title 17 of the Code of Federal Regulations. The Authorized Officers, acting for and on behalf of the Authority, are, and each of them is further authorized and directed to cause the Authority to bring the Preliminary Official Statement into the form of a final official statement (the “Final Official Statement”) and to execute a statement that the facts contained in the Final Official Statement, and any supplement or amendment thereto (which shall be deemed an original part thereof for the purpose of such statement) were, at the time of sale of the 2024 Authority Bonds, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the 2024 Authority Bonds, and does not, as of the date of delivery of the 2024 Authority Bonds, contain any untrue statement of a material fact with respect to the Authority or omit to state material facts with respect to the Authority required to be stated where necessary to make any statement made therein not misleading in light of the circumstances under which it was made. This Board of Directors hereby authorizes the Authorized Officers, acting for and on behalf of the Authority, and each of them individually, to execute and deliver the final form of the Final Official Statement to the Underwriter. The Underwriter is hereby authorized to distribute copies of the Preliminary Official Statement to persons who may be interested in the purchase of the 2024 Authority Bonds and is directed to deliver copies of the Final Official Statement to all actual purchasers of the 2024 Authority Bonds.
SECTION 6. Authorization to Apply for and Accept Municipal Bond Insurance and Reserve Fund Surety. The Executive Director and the Treasurer, with the assistance of Fieldman Rolapp & Associates, Inc., as the Municipal Advisor to the Authority and the Community Facilities District, and the Underwriter, are hereby authorized to apply for and, if deemed cost effective, accept any commitment (a) to provide municipal bond insurance for the 2024 Authority Bonds and (b) to provide a reserve fund surety for the 2024 Authority Bonds. The Executive Director and the Treasurer are, and each of them individually is, hereby authorized to execute any commitment letter and to do any and all things and to deliver all documents necessary to obtain such municipal bond insurance and reserve fund surety.
SECTION 7. Escrow Agreement. The form of the Escrow Agreement presented at this meeting is hereby approved with such changes, insertions, and omissions as the Authorized Officer executing the same may require or approve.
SECTION 8. Appointment of Professionals.
Underwriter. Stifel Nicolaus & Company, Incorporated is hereby selected as the Underwriter for the 2024 Authority Bonds.
Municipal Advisor. Fieldman, Rolapp & Associates, Inc., is hereby appointed to serve as the municipal advisor to the Authority in connection with the issuance of the 2024 Authority Bonds.
Bond Counsel. Best Best & Krieger LLP is hereby appointed to serve as Bond Counsel to the Authority in connection with the issuance of the 2024 Authority Bonds.
Disclosure Counsel. Stradling Yocca Carlson & Rauth LLP, is hereby appointed to serve as disclosure counsel to the Authority in connection with the issuance of the 2024 Authority Bonds.
SECTION 9. Official Actions. The Chairperson, the Vice-Chairperson, the Secretary, the Authorized Officers and any of their respective designees are hereby authorized and directed, jointly and severally, for and in the name of the Authority, to do any and all things and take any and all actions, including without limitation, the execution and delivery 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 and advisable in order to consummate the transactions contemplated by the documents approved pursuant to this Resolution and any such actions previously taken by such officers are hereby ratified and confirmed. In the event any such officer is unavailable or unable to execute and deliver any of the above-referenced documents, any other officer of the Authority may validly execute and deliver such document.
SECTION 10. Effective Date. This Resolution shall take effect immediately upon its passage and adoption.
PASSED, APPROVED AND ADOPTED by the Board of Directors of the San Marcos Public Financing Authority this _______ day of ______________, 2024 by the following votes:
AYES: DIRECTORS:
NOES: DIRECTORS:
ABSENT: DIRECTORS:
ABSTAIN: DIRECTORS
____________________________
Rebecca D. Jones, Chair
San Marcos Public Financing Authority
ATTEST:
_______________________________
Phillip Scollick, Secretary
San Marcos Public Financing Authority
EXHIBIT A
The Prior Special Tax Refunding Bonds
The following are the Prior Special Tax Refunding Bonds:
$1,475,359.26 City of San Marcos Community Facilities District No. 99-01 Improvement Area A1 Special Tax Refunding Bonds, Series 2014. $1,562,336.46 City of San Marcos Community Facilities District No. 99-01 Improvement Area A2 Special Tax Refunding Bonds, Series 2014. $1,481,085.88 City of San Marcos Community Facilities District No. 99-01 Improvement Area B1 Special Tax Refunding Bonds, Series 2014. $1,266,764.81 City of San Marcos Community Facilities District No. 99-01 Improvement Area B2 Special Tax Refunding Bonds, Series 2014. $2,403,561.51 City of San Marcos Community Facilities District No. 99-01 Improvement Area C1 Special Tax Refunding Bonds, Series 2014. $1,293,335.80 City of San Marcos Community Facilities District No. 99-01 Improvement Area D1 Special Tax Refunding Bonds, Series 2014. $2,555,000.00 City of San Marcos Community Facilities District No. 99-01 Improvement Area F2/V2 Special Tax Refunding Bonds, Series 2014. $948,429.42 City of San Marcos Community Facilities District No. 99-01 Improvement Area G3 Special Tax Refunding Bonds, Series 2014. $1,029,351.34 City of San Marcos Community Facilities District No. 99-01 Improvement Area H1A Special Tax Refunding Bonds, Series 2014. $957,906.19 City of San Marcos Community Facilities District No. 99-01 Improvement Area H1B Special Tax Refunding Bonds, Series 2014. $3,715,000.00 City of San Marcos Community Facilities District No. 99-01 Improvement Area J Special Tax Refunding Bonds, Series 2014. $3,004,456.51 City of San Marcos Community Facilities District No. 99-01 Improvement Area M Special Tax Refunding Bonds, Series 2014. $1,856,315.82 City of San Marcos Community Facilities District No. 99-01 Improvement Area N1 Special Tax Refunding Bonds, Series 2014. $1,746,324.14 City of San Marcos Community Facilities District No. 99-01 Improvement Area N2 Special Tax Refunding Bonds, Series 2014. $1,937,773.71 City of San Marcos Community Facilities District No. 99-01 Improvement Area R1 Special Tax Refunding Bonds, Series 2014. $1,525,227.84 City of San Marcos Community Facilities District No. 99-01 Improvement Area R2 Special Tax Refunding Bonds, Series 2014. $2,185,000.00 City of San Marcos Community Facilities District No. 99-01 Improvement Area V1A Special Tax Refunding Bonds, Series 2014.
EXHIBIT B
Special Tax Refunding Bonds
City of San Marcos Community Facilities District No. 99-01 Improvement Area A1 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $900,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area A2 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,000,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area B1 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,000,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area B2 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $800,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area C1 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,500,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area D1 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $900,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area F2/V2 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,700,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area G3 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $700,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area H1A Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $700,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area H1B Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $700,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area J Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $2,400,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area M Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,700,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area N1 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,200,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area N2 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,100,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area R1 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,200,000.00; City of San Marcos Community Facilities District No. 99-01 Improvement Area R2 Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,000,000.00; and
17. City of San Marcos Community Facilities District No. 99-01 Improvement Area V1A Special Tax Refunding Bonds, Series 2024 in a principal amount not to exceed $1,500,000.00.
EXHIBIT C
Good Faith Estimates
The good faith estimates set forth herein are provided with respect to the 2024 Authority Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the Authority by the Municipal Advisor in consultation with the Underwriter.
Principal Amount. The Municipal Advisor has informed the Authority that, based on the financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the 2024 Authority Bonds to be sold is $17,240,000 (the “Estimated Principal Amount”), which excludes approximately $1,967,502 of 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 2024 Authority Bonds, the price paid for such 2024 Authority Bonds is higher than the face value of the 2024 Authority Bonds.
True Interest Cost of the 2024 Authority Bonds. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the 2024 Authority 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 2024 Authority 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 2024 Authority Bonds, is 3.14% for all series of the 2024 Authority Bonds.
Finance Charge of the 2024 Authority Bonds. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of 2024 Authority 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 2024 Authority Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2024 Authority Bonds), is $374,969.
Amount of Proceeds to be Received. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the 2024 Authority 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 Authority for the sale of the 2024 Authority Bonds, less the finance charge of the 2024 Authority Bonds, as estimated above, and any reserve fund paid or funded with proceeds of the 2024 Authority Bonds $17,872,158.
Total Payment Amount. The Municipal Advisor has informed the Authority that, assuming that the Estimated Principal Amount of the 2024 Authority 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 Authority will make to pay debt service on the 2024 Authority Bonds, plus the finance charge for the 2024 Authority Bonds, as described above, not paid with the proceeds of the 2024 Authority Bonds, calculated to the final maturity of the 2024 Authority Bonds, is $22,946,044.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the 2024 Authority 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 2024 Authority Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of 2024 Authority Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the 2024 Authority 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 2024 Authority Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or alterations in the financing plan or finance charges, or a combination of such factors. The actual date of sale of the 2024 Authority Bonds and the actual principal amount of 2024 Authority Bonds sold will be determined by the Authority based on the timing of the need for proceeds of the 2024 Authority Bonds and other factors. The actual interest rates borne by the 2024 Authority Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the 2024 Authority 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 Authority. 5 61012.00014\42034926.3
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