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HomeMy WebLinkAboutResolution No. 4069 - Approval of Financing for Certain Water System ImprovementsResolution No. 4069 Page 1 of 6 STATE OF CALIFORNIA ) RESOLUTION NO. 4069 COUNTY OF RIVERSIDE ) ss CITY OF SAN JACINTO ) A RESOLUTION OF THE CITY OF SAN JACINTO, CALIFORNIA, APPROVING AN INSTALLMENT PURCHASE AGREEMENT, WITH RESPECT TO FINANCING IMPROVEMENTS TO THE WATER SYSTEM IN AN AMOUNT NOT TO EXCEED $9,500,000 AND OTHER MATTERS PERTAINING THERETO WHEREAS, the City of San Jacinto (the “City”) is authorized by the laws of the State of California to acquire, design, and construct improvements to the City’s water system (the “Water System”); and WHEREAS, the City has heretofore undertaken the acquisition, design and construction of improvements to the Water System (the “Project”); and WHEREAS, the City and the City of San Jacinto Public Financing Authority (the “Authority”) have determined that it would be in their best interests to provide for the financing (the “Financing”) of the Project by entering into the Installment Purch ase Agreement dated as of April 1, 2025, by and between the City and the Authority (the “Agreement”); and WHEREAS, the Authority will enter into an Assignment Agreement dated as of April 1, 2025 (the “Assignment Agreement”) with Banc of America Public Capital Corp. (the “Assignee”) pursuant to which the Authority will assign its interests in the Agreement to the Assignee which in turn will provide the funding for the Project; and WHEREAS, the City, the Authority, the Assignee and Argent Institutional Trust Company (“Escrow Agent”) will enter into the Escrow and Account Control Agreement dated the closing date (the “Escrow Agreement”) pursuant to which the Escrow Agent will hold the funds deposited in the escrow account established under the Escrow Agreement (the “Project Fund”); and WHEREAS, the City has determined that the Financing should be offered for private placement and have received a term sheet from the Assignee and that such Financing will bear interest at a fixed rate; and WHEREAS, Section 5852.1 of the Government Code of the State of California (“Section 5852.1”) provides that the City obtain from an underwriter, municipal advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the Financing, good faith estimates of: (a) the true interest cost of the installment payments made pursuant to the Agreement (the “Installment Payments”), (b) the finance charge of the Agreement, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Agreement received less the finance charge described above and any reserves or capitalized interest paid or funded with Docusign Envelope ID: 623F7AE0-F8BF-4FE8-A863-2A350654E0BB Resolution No. 4069 Page 2 of 6 proceeds of the Agreement and (d) the sum total of all Installment Payments calculated to the final Installment Payment Date (as defined in the Agreement) plus the fees and charges paid to third parties not paid with the proceeds of the Agreement; and WHEREAS, in accordance with Section 5852.1, the City has obtained such good faith estimates from Fieldman, Rolapp & Associates, Inc., its municipal advisor, and such estimates are attached hereto as Exhibit A; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of the Agreement and the Escrow Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized to execute, enter into and perform the Agreement and Escrow Agreement. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN JACINTO RESOLVES AS FOLLOWS: SECTION 1. Approval of Installment Purchase Agreement. The Agreement, which provides generally for (i) the resale of the Project by the Authority to the City, (ii) the purchase by the City from the Authority of the Project, and (ii) the payment by the City to the Authority of the Installment Payments in amounts which will be sufficient to pay the principal of and interest owing to the Assignee, is hereby approved and any of the City Manager, the Deputy City Manager and Finance Director of the City (together, the “Authorized Officers”) are each individually authorized to execute, acknowledge and deliver said agreement on behalf of the City in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 2. Approval of Escrow Agreement. The Escrow Agreement, which provides the terms and conditions pursuant to which the Project Fund is held, is hereby approved and any of the Authorized Officers are each individually authorized to execute, acknowledge and deliver said agreement on behalf of the Authority in substantially the form hereby approved with such changes therein as the officer executing the same may approve, suc h approval to be conclusively evidenced by the execution and delivery thereof. SECTION 3. Financing Terms. The financing terms presented to the City by the Assignee are approved as follows: maximum principal amount of financing is $9,500,000; maximum interest rate with respect to the financing is 4.50%, except in the event of default, or if interest payable on the Agreement is determined to be taxable, such rate may increase as agreed upon in the Agreement, and maximum term for the financing is 20 years. Docusign Envelope ID: 623F7AE0-F8BF-4FE8-A863-2A350654E0BB Resolution No. 4069 Page 3 of 6 SECTION 4. Requisitions. The Authorized Officers, or any one of them, are hereby authorized and directed to execute one or more requisitions authorizing the payment of costs of preparing and delivering the Financing from the proceeds of payment by the Assignee. SECTION 5. Appointment of Professionals. The City hereby authorizes and approves the following professionals to provide services in connection with the Financing: Fieldman, Rolapp & Associates, Inc., as municipal advisor, Best Best & Krieger LLP, as special counsel, Oppenheimer & Co., Inc., as placement agent, and Argent Institutional Trust Company, as escrow agent, and the Authorized Officers are hereby authorized to enter into agreement with said firms in connection with their providing services with respect to the Financing. SECTION 6. Other Acts. The Authorized Officers are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the staff and the City’s legal counsel they may deem necessary or advisable in order to consummate the Financing, or otherwise to effectuate the purposes of this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed. SECTION 7. Effective Date. This Resolution shall become effective on the date on which it is adopted. Docusign Envelope ID: 623F7AE0-F8BF-4FE8-A863-2A350654E0BB Resolution No. 4069 Page 4 of 6 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council on the 15th day of April 2025 by the following vote: AYES: Ruiz, Sanchez, Ledezma, Ayala, Vandever NAYS: None ABSENT: None ABSTAIN: None CITY OF SAN JACINTO: ______________________________ Valerie Vandever, Mayor ATTEST: ______________________________ Julia Espinoza, City Clerk APPROVED AS TO FORM: Best Best & Krieger LLP ______________________________ Craig Hayes, City Attorney Docusign Envelope ID: 623F7AE0-F8BF-4FE8-A863-2A350654E0BB Resolution No. 4069 Page 5 of 6 CERTIFICATION STATE OF CALIFORNIA) COUNTY OF RIVERSIDE) ss CITY OF SAN JACINTO) I, Julia Espinoza, City Clerk of the City of San Jacinto, DO HEREBY CERTIFY that the foregoing Resolution 4069 was passed, approved, and adopted at the Regular Meeting of the San Jacinto City Council held on the 15th day of April 2025 by the following vote: AYES: Ruiz, Sanchez, Ledezma, Ayala, Vandever NAYS: None ABSENT: None ABSTAIN: None WITNESS MY HAND AND OFFICIAL SEAL this 15th day of April 2025 _____________________________ Julia Espinoza, City Clerk Docusign Envelope ID: 623F7AE0-F8BF-4FE8-A863-2A350654E0BB 24438.70027\43324553.4 A-1 EXHIBIT A SB 450 Good Faith Estimates Set forth below are good faith estimates of Fieldman, Rolapp & Associates, Inc., the City’s municipal advisor, as required under Section 5852.1 of the California Government Code (the “Code”) for the Installment Purchase Agreement to finance the acquisition, design and construction of certain improvements to City of San Jacinto’s water system. a) The true interest cost of the installment payments is at 4.32%, calculated as provided in Section 5852.1(a)(1)(A) of the Code. b) The finance charge of the Installment Purchase Agreement, including all fees and charges paid to third parties, is estimated at $97,000. c) Proceeds of the Installment Purchase Agreement received by the City of $9,097,000 less the finance charges set forth in (b) above, is equal to $9,000,000. d) The total payment amount calculated as provided in Section 5852.1(a)(1)(D) of the Code is estimated at $13,577,580. The foregoing are estimates and the final costs can vary from the estimated amounts set forth above. Docusign Envelope ID: 623F7AE0-F8BF-4FE8-A863-2A350654E0BB