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Home My WebLink About4 - RESO - POLICE FACILITY BONDSREQUEST FOR SANTA ANA FINANCING AUTHORITY ACTION CITY COUNCIL MEETING DATE: AUGUST 5, 2014 TITLE: RESOLUTION AUTHORIZING A SUPPLEMENTAL INDENTURE RELATING TO POLICE ADMINISTRATION AND HOLDING FACILITY REVENUE BONDS SERIES 1994A RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: _a"•.• __y ❑ As Recommended ❑ As Amended ❑ Ordinance on I" Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution authorizing a supplemental indenture relating to the Police Administration and Holding Facility Lease Revenue Bonds 1994A. DISCUSSION On June 3, 2014, the City Council unanimously approved resolutions executing agreements and financing documents related to the defeasance of a portion of the Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A, the defeasance and refunding of the outstanding City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project), and • decrease in the lease rates for the City Hall parking structure. The issuance was provided under • private placement strategy and will generate annual savings in the amount of $280,000 for the first ten years. However, during the issuance it was discovered that since the structure required that only 50% of 1994 Bonds be defeased, the denomination at which the bonds are sold ($5,000) did not hold for bonds maturing on July 1, 2016 and on July 1, 2018. As such, the approved indenture needs to be amended so that authorized denominations for bonds maturing on the aforementioned dates include the $5,000 and any integral multiple of $2,500. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #4 City Financial Stability, Objective #2 (provide a reliable five -year financial forecast that ensures financial stability in accordance with the strategic plan), Strategy D (conduct an assessment of the City's debt and refinancing options to achieve savings). 4 -1 Reso Authorizing Supplemental Indenture Bond Series 1994A August 5, 2014 Page 2 FISCAL IMPACT There is no fiscal impact associated with this action. Francisco Gutierrez Executive Director Finance and Management Services Agency 4 -2 SAFA RESOLUTION NO. RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF A SUPPLEMENTAL INDENTURE RELATING TO THE SANTA ANA FINANCING AUTHORITY POLICE ADMINISTRATION AND HOLDING FACILITY LEASE REVENUE BONDS, SERIES 1994A, AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO BE IT RESOLVED BY THE BOARD OF DIRECTORS (THE "BOARD ") OF THE SANTA ANA FINANCING AUTHORITY (THE "AUTHORITY'), AS FOLLOWS: WHEREAS, the Authority has heretofore issued its Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A (the 1994 Bonds "), pursuant to that certain Indenture, dated as of March 1, 1994 (the 'Indenture "), by and between the Authority and Meridian Trust Company of California, as trustee, as amended as of February 1, 2004, by and between the Authority and BNY Western Trust Company, as successor trustee; WHEREAS, the 1994 Bonds are outstanding in the principal amount of $67,100,000 outstanding; WHEREAS, in June 2014, the City of Santa Ana entered into a lease financing whereby a portion of the proceeds thereof was used to defease to maturity 50 %, or $33,550,000, of the outstanding 1994 Bonds; WHEREAS, by virtue of such defeasance, 50% of the 1994 Bonds were designated as "defeased" 1994 Bonds and 50% of the 1994 Bonds were designated as "non - defeased" 1994 Bonds, requiring the assignment of new CUSIP numbers to the "defeased" 1994 Bonds and to the "non - defeased" 1994 Bonds to distinguish them from the original 1994 Bonds; WHEREAS, by virtue of the 50% split of the 1994 Bonds, the "defeased" 1994 Bonds and "non- defeased" 1994 Bonds maturing on July 1, 2016, and on July 1, 2018, no longer satisfy the requirement of the Indenture that the 1994 Bonds be issued in the denomination of $5,000 and integral multiples of $5,000; WHEREAS, it is therefore necessary to amend the Indenture to permit the "defeased" 1994 Bonds and the "non- defeased" 1994 Bonds maturing on July 1, 2016, and July 1, 2018, to be issued in the denomination of $5,000 and integral multiples of $2,500; WHEREAS, Section 8.01(a) of the Indenture, authorizes the execution of a supplement to the Indenture without the consent of the owners of the 1994 Bonds, after 4 -3 the receipt of an approving Opinion of Counsel (as such term is defined in the Indenture), to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained therein or in regard to questions arising thereunder which the Authority may deem desirable or necessary and not inconsistent therewith and which shall not adversely affect the interest of the owners of the 1994 Bonds or the Bond Insurer; and WHEREAS, the Authority and The Bank of New York Mellon Trust Company, N.A., as successor trustee, will receive, as a condition precedent to the effectiveness of such supplement, an Opinion of Counsel confirming that such supplement is made for the purpose of curing and ambiguity or of correcting, curing or supplementing any defective provision contained in the Indenture and does not adversely affect the interest of the owners of the 1994 Bonds or the Bond Insurer (as such term is defined in the Indenture); NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: Section 1. A second supplemental indenture, in the form attached hereto as Exhibit A, be and is hereby approved, and the Chair, the Executive Director or the Treasurer, or any designee thereof, is hereby authorized and directed to execute said document, with such changes, insertions and omissions as may be approved by such official, the execution thereof to be conclusive evidence of such approval, and the Secretary is hereby authorized and directed to attest to such official's signature. Section 2. The Chair, the Executive Director, the Treasurer, the Secretary and other officials of the Authority are hereby authorized and directed to execute such other agreements, documents and certificates and to take such other actions as may be necessary to effect the purposes of this resolution. Section 3. This Resolution shall take effect upon its adoption by the Board. PASSED AND ADOPTED by the Board of Directors of the Santa Ana Financing Authority this 5th day of August, 2014: SANTA ANA FINANCE AUTHORITY M -2- 4-4 Chair APPROVED AS TO FORM: Sonia R. Carvalho, General Counsel Bv: Jose Sandoval, Assistant General Counsel AYES: Boardmembers: NOES: Boardmembers: ABSTAIN: Boardmembers: NOT PRESENT: Boardmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Secretary to the Board, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the Santa Ana Financing Authority on Date: -3- 4-5 Maria D. Huizar, Secretary to the Board EXHIBIT A FORM OF SECOND SUPPLEMENTAL INDENTURE This SECOND SUPPLEMENTAL INDENTURE (this "Second Supplement'), dated as of July 1, 2014, is made between by and between the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority of the State of California (the "Authority "), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under and by virtue of the laws of the United States of America (the "Trustee "), amending that certain Indenture, dated as of March 1, 1994 (the 'Indenture "), by and between the Authority and Meridian Trust Company of California, as trustee (the "Original Trustee "), as amended as of February 1, 2004 (the "First Supplement'), by and between the Authority and BNY Western Trust Company, as successor trustee (the "First Successor Trustee "). WHEREAS, the Authority and the Original Trustee executed and delivered the Indenture under and pursuant to which the Authority issued its $107,399,438.50 Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A (the 1994 Bonds'); WHEREAS, the Authority and the First Successor Trustee executed and delivered the First Supplement pursuant to which the Authority issued its $38,845,000 Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Refunding Bonds, Series 2004A (the "2004 Bonds "), issued to provide for the defeasance and refunding of a portion of the 1994 Bonds; WHEREAS, the 2004 Bonds have been fully paid and are no longer outstanding; WHEREAS, the 1994 Bonds are outstanding in the principal amount of $67,100,000 outstanding; WHEREAS, in June 2014, the City of Santa Ana entered into a lease financing whereby a portion of the proceeds thereof was used to defease to maturity 50 %, or $33,550,000, of the outstanding 1994 Bonds; WHEREAS, by virtue of such defeasance, 50% of the 1994 Bonds were designated as "defeased" 1994 Bonds and 50% of the 1994 Bonds were designated as "non - defeased" 1994 Bonds, requiring the assignment of new CUSIP numbers to the "defeased" 1994 Bonds and to the "non- defeased" 1994 Bonds to distinguish them from the original 1994 Bonds; WHEREAS, by virtue of the 50% split of the 1994 Bonds, the "defeased" 1994 Bonds and "non- defeased" 1994 Bonds maturing on July 1, 2016, and on July 1, 2018, no longer satisfy the requirement of the Indenture that the 1994 Bonds be issued in the denomination of $5,000 and integral multiples of $5,000; Exhibit A Page 1 4 -6 WHEREAS, it is therefore necessary to amend the Indenture to permit the "defeased" 1994 Bonds and the "non - defeased" 1994 Bonds maturing on July 1, 2016, and July 1, 2018, to be issued in the denomination of $5,000 and integral multiples of $2,500; WHEREAS, Section 8.01(a) of the Indenture, authorizes the execution of a supplement to the Indenture without the consent of the owners of the 1994 Bonds, after the receipt of an approving Opinion of Counsel, to make such provisions for the purpose of curing and ambiguity or of correcting, curing or supplementing any defective provision contained therein or in regard to questions arising thereunder which the Authority may deem desirable or necessary and not inconsistent therewith and which shall not adversely affect the interest of the Owners of the 1994 Bonds or the Bond Insurer; and WHEREAS, the Authority and the Trustee will receive, as a condition precedent to the effectiveness of this Second Supplement, an Opinion of Counsel confirming that this Second Supplement is made for the purpose of curing and ambiguity or of correcting, curing or supplementing any defective provision contained in the Indenture and does not adversely affect the interest of the Owners of the 1994 Bonds or the Bond Insurer; NOW, THEREFORE, the parties hereto, for good and valuable consideration the receipt of which is acknowledged, and intending to be legally bound hereby, agree as follows: Section 1. Definitions. All defined terms used in this Second Supplement and the Recitals hereto, unless defined elsewhere in this Second Supplement, shall have the meanings given to those terms in the Indenture. Section 2. Amendment of Section 1.01 of the Indenture. The definition of "Authorized Denomination" set forth in Section 1.01 of the Indenture is hereby amended in full as follows: Authorized Denominations The term "Authorized Denominations" means, with respect to Current Interest Bonds, $5,000 and any integral multiple of $5,000 and, with respect to Capital Appreciation Bonds, $5,000 maturity amount, being denominations of initial principal amount (as set forth in Section 2.02 hereof for 1994 Bonds) for Capital Appreciation Bonds of the corresponding maturity, or any integral multiple thereof; provided, however, that in connection with the June 2014 defeasance of 50% of the 1994 Bonds, "Authorized Denominations" with respect to the 1994 Bonds maturing on July 1, 2016, and July 1, 2018, means $5,000 and any integral multiple of $2,500. Exhibit A Page 2 4 -7 Section 6. Survival. Except as specifically provided in this Second Supplement, all terms and conditions of the Indenture shall remain in full force and effect, unaltered and unamended hereby. Section 7. Counterparts. This Second Supplement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. Section 8. Governing Law. This Second Supplement shall be governed by and construed and interpreted in accordance with the Constitution and laws of the State of California without giving effect to conflict of laws principles thereof. Section 9. Headings. Headings of Sections in this Second Supplement are for reference purposes only and shall not be deemed to have any substantive effect. IN WITNESS WHEREOF, the SANTA ANA FINANCING AUTHORITY has caused this Second Supplement to be signed in its name by one of its authorized officers, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee, in token of its acceptance of the trusts created hereunder, has caused Second Supplement to be signed in its corporate name by one of its authorized officers, all as of the day and year first above written. Attest: Maria D. Huizar Secretary David Cavazos Executive Director THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee M Exhibit A Page 3 4 -8 Deborah D. Young Vice President