HomeMy WebLinkAboutAdopt Resolution No. 2019-72 Authorizing the Execution and D City of Huntington Beach
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File #: 19-1018 MEETING DATE: 10/21/2019
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Chuck Adams, Interim Chief Financial Officer
Subiect:
Adopt Resolution No. 2019-72 authorizing the execution and delivery of a Second
Supplemental Indenture in connection with a change in the authorized use of proceeds of the
Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue
Bonds, 2014 Series A, and authorizing the execution of necessary documents and certificates
and related actions in connection therewith
Statement of Issue:
City Council authorization is requested to amend the authorized use of available proceeds related to
the 2014 Series A Lease Revenue Bonds to include soft costs related to the Police Building
Modernization Project.
Financial Impact:
There are sufficient fund balances in the Infrastructure Fund (314) and the Bond Project Fund (319)
to support this request.
Recommended Action:
A) Adopt Resolution No. 2019-72, "Resolution of the City Council of the City of Hunting Beach
Authorizing the Execution and Delivery of a Second Supplemental Indenture in Connection with a
Change in the Authorized Use of Proceeds of the Huntington Beach Public Financing Authority
(Orange County, California) Lease Revenue Bonds, 2014 Series A, and Authorizing the Execution of
Necessary Documents and Certificates and Related Actions in Connection Therewith;" and,
B) Approve authorization to execute any necessary actions to comply with Resolution 2019-72
including: 1) the inter-fund transfer of$514,651 from the Bond Project Fund (319) to the
Infrastructure Fund (314); and 2) an appropriation increase of$320,349 to the Bond Project Fund to
utilize the remaining bond proceeds on capital projects as authorized in the Bond Indenture and
Supplemental Amendments.
Alternative Action(s):
City of Huntington Beach Page 1 of 2 Printed on 10/16/2019
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File #: 19-1018 MEETING DATE: 10/21/2019
Do not approve the recommended action and direct staff accordingly.
Analysis:
In November 2014, the City issued Lease Revenue Bonds totaling $15.295M to finance the
construction of a new Senior Center in Central Park. Due to project cost savings, approximately
$835,000 in bond proceeds are remaining and available to use towards other capital projects. In
order to expend bond proceeds on capital projects other than the Senior Center, the City is required
to adopt Resolution 2019-72 that provides City Council authority to amend the project scope listed in
the bond indenture documents to include soft costs associated with the Police Building Modernization
Project.
Authorization is requested for appropriation and transfer authority of (A) $514,651 from the Bond
Project Fund (319) to the Infrastructure Fund (314) for previously approved and incurred capital
improvement costs related to the Police Building Modernization Project; and (B) $320,349 in
additional appropriations in the Bond Project Fund to expend the remaining bond proceeds from the
2014 Series A Lease Revenue Bond on capital projects as authorized in the Bond Indenture and
Supplemental Amendments.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Enhance and maintain high quality City services
Enhance and maintain the infrastructure
Strengthen long-term financial and economic sustainability
Enhance and modernize public safety service delivery
Attachment(s):
1. Resolution No. 2019-72, "Resolution of the City Council of the City of Huntington Beach
Authorizing the Execution and Delivery of a Second Supplemental Indenture in Connection with a
Change in the Authorized Use of Proceeds of the Huntington Beach Public Financing Authority
(Orange County, California) Lease Revenue Bonds, 2014 Series A, and Authorizing the Execution
of Necessary Documents and Certificates and Related Actions in Connection Therewith"
2. Second Amendment Supplemental Indenture
City of Huntington Beach Page 2 of 2 Printed on 10/16/2019
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RESOLUTION NO. 2019-72
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON
BEACH AUTHORIZING THE EXECUTION AND DELIVERY OF A
SECOND SUPPLEMENTAL INDENTURE IN CONNECTION WITH A
CHANGE IN THE AUTHORIZED USE OF PROCEEDS OF THE
HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE
COUNTY, CALIFORNIA) LEASE REVENUE BONDS, 2014 SERIES A, AND
AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND
CERTIFICATES AND RELATED ACTIONS IN CONNECTION THEREWITH
WHEREAS, in order to finance and refinance various capital improvement projects
(collectively, the "Projects"), the City of Huntington Beach (the "City") leased certain real
property owned by the City, including the improvements thereto, known as the Civic Center
(collectively, the "Property"), to the Huntington Beach Public Financing Authority (the
"Authority") pursuant to a Site Lease, dated as of September 1, 2011, by and between the City
and the Authority, as amended and supplemented by the First Amendment to Site Lease, dated as
of November 1, 2014, by and between the City and the Authority, and subleased the Property
back from the Authority pursuant to a Lease Agreement, dated as of September 1, 2011, by and
between the City and the Authority, as amended and supplemented by the First Amendment to
Lease Agreement, dated as of November 1, 2014, by and between the City and the Authority
(collectively, the "Lease Agreement"); and
The City and the Authority determined that it would be in the best interests of the City
and the Authority to provide the funds necessary to finance and refinance the Projects through
the issuance by the Authority of(i) the Huntington Beach Public Financing Authority (Orange
County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement
Refinancing Project) (the "Series 2011A Bonds"), and (ii) the Huntington Beach Public
Financing Authority (Orange County, California) Lease Revenue Bonds, 2014 Series A (Senior
Center Project) (the "Series 2014A Bonds" and together with the Series .2011A Bonds, the
"Bonds"), pursuant to an Indenture, dated as of September 1, 2011, by and among the Authority,
the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), as
amended and supplemented by the First Supplemental Indenture, dated as of November 1, 2014,
by and among the Authority, the City and the Trustee (collectively, the "Indenture"), payable
from the base rental payments (the "Base Rental Payments") to be made by the City under the
Lease Agreement and the other assets pledged therefor under the Indenture; and
All rights to receive such Base Rental Payments were assigned without recourse by the
Authority to the Trustee pursuant to the Indenture; and
In consideration of such assignment and the execution of the Indenture, the Authority
issued the Bonds (capitalized undefined terms used in these recitals shall have the meanings
ascribed thereto in the Indenture); and
The Indenture provides that, subject to the conditions set forth therein, the Indenture and
the rights and obligations of the Authority, the City, the Trustee and the Owners under the
Resolution No. 2019-72
Indenture may be modified or amended from time to time and at any time by a Supplemental
Indenture, which the Authority, the City and the Trustee may enter into without the consent of
any Owners for any reason not otherwise provided for in the Indenture, provided such
amendment or supplement does not adversely affect the rights or interests of the Owners; and
A portion of the proceeds of the Series 2014A Bonds remains unspent and the City and
the Authority have determined that it would be in the best interests of the City and the Authority
to amend the Indenture to expand the Projects funded with the Series 2014A Bonds to include
the Police Building Modernization Project to be completed for the Police Department building at
the Civic Center (the "Police Building Modernization Project") and any other capital
improvement project the City deems a priority (collectively, the "Expanded Projects"); and
The City and the Authority have determined that such an amendment to the Indenture
would not adversely affect the rights or interests of the Owners under the Indenture; and
The Authority and the City desire that the Trustee, the Authority and the City enter into a
Second Supplemental Indenture (the "Second Supplemental Indenture") in order to provide for
the amendment of the Indenture to expand the Projects funded with the Series 2014A Bonds to
include the Expanded Projects; and
The City Council of the City (the "City Council") has been presented with the form of the
Second Supplemental Indenture, and the City Council has examined and approved the Second
Supplemental Indenture and desires (i) to authorize and direct the execution of such document
and the consummation of the amendment of the Indenture to expand the Projects funded with the
Series 2014A Bonds to include the Expanded Projects, and (ii) authorize the expenditure of the
remaining Series 2014A Bond proceeds on the Expanded Projects; and
All acts, conditions and things required by the Constitution and laws of the State of
California to exist, to have happened and to have been performed precedent to and in connection
with the consummation of the actions authorized hereby 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 and empowered, pursuant to each and every requirement of law, to consummate such
actions for the purpose, in the manner and upon the terms herein provided;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HUNTINGTON
BEACH DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. All of the recitals herein contained are true and correct and the City Council
so finds.
Section 2. The form of the Second Supplemental Indenture, submitted to and on file with
the City Clerk, is hereby approved, and the Mayor of the City, and such other member of the
City Council as the Mayor may designate, the City Manager, the Assistant City Manager and the
Chief Financial Officer of the City, and such other officers of the City as the City Manager may
designate (collectively, the "Authorized Officers"), are each hereby authorized and directed, for
and in the name and on behalf of the City, to execute and deliver the Second Supplemental
Indenture in substantially said form, with such changes therein as the Authorized Officer
executing the same may require or approve, such approval to be conclusively evidenced by the
19-8037/215350 2
Resolution No. 2019-72
execution and delivery thereof, and the Authorized Officers are each hereby authorized and
directed, for and in the name and on behalf of the City, to expend the remaining Series 2014A
Bond proceeds on the Expanded Projects.
Section 3. The Authorized Officers are hereby authorized and directed, jointly and
severally, to do any and all things which they may deem necessary or advisable in order to
consummate the transaction herein authorized and otherwise to carry out, give effect to and
comply with the terms and intent of this Resolution.
Section 4. All actions heretofore taken by the officers, employees and agents of the City
with respect to the transaction set forth above are hereby approved, confirmed and ratified.
Section 5. This Resolution and the declaration herein shall take effect from and after its
date of adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 21st day of October , 2019.
.r
�— Mayor
0. anager
ED AND APP ED: INITIATED AND APPROVED:
Interim Chief Financial Officer
APPROVED AS TO FORM:
ity ttorney l
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Res. No. 2019-72
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, ROBIN ESTANISLAU, the duly elected, qualified City Clerk of the
City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do
hereby certify that the whole number of members of the City Council of the City of
Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a Regular meeting thereof held on October 21, 2019 by the following vote:
AYES: Brenden, Carr, Semeta, Peterson, Posey, Delgleize , Hardy
NOES: None
ABSENT: None
RECUSE: None
City Clerk and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California
SECOND SUPPLEMENTAL
INDENTURE
by and among
HUNTINGTON BEACH PUBLIC
FINANCING AUTHORITY
and
CITY OF HUNTINGTON BEACH
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
AS TRUSTEE
Dated as of October 1, 2019
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4164-9723-2159.1
TABLE OF CONTENTS
Page
PART I
PARTICULAR AMENDMENTS
Part 1.1.. Amendments to Section 1.01.......................................................................................... 3
PART 2
MISCELLANEOUS
Part 2.1. Effect of Second Supplemental Indenture...................................................................... 4
Part 2.2. Execution in Counterparts.............................................................................................. 4
Part2.3. Effective Date.................................................................................................................4
Part2.4. Effective Date................................................................................................................. 4
i
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4164-9723-2159.1
SECOND SUPPLEMENTAL INDENTURE,
THIS SECOND SUPPLEMENTAL INDENTURE (this "Second Supplemental
Indenture"), is made and entered into as of October 1, 2019, by and among the HUNTINGTON
BEACH PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and
existing under and by virtue of the laws of the State of California(the "Authority"), the CITY OF
HUNTINGTON BEACH, a municipal corporation and charter city duly organized and existing
under and by virtue of the Constitution and laws of the State of California and its Charter (the
"City"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national
banking association duly organized and existing under and by virtue of the laws of the United
States of America(the "Trustee").
WITNESSETH:
WHEREAS, in order to finance and refinance various capital improvement projects
(collectively, the "Projects"), the City leased certain real property owned by the City, including
the improvements thereto, known as the Civic Center (collectively, the "Property"), to the
Authority pursuant to a Site Lease, dated as of September 1, 2011, by and between the City and
the Authority, as amended and supplemented by the First Amendment to Site Lease, dated as of
November 1, 2014, by and between the City and the Authority, and subleased the Property back
from the Authority pursuant to a Lease Agreement, dated as of September 1, 2011, by and
between the City and the Authority, as amended and supplemented by the First Amendment to
Lease Agreement, dated as of November 1, 2014, by and between the City and the Authority
(collectively, the "Lease Agreement"); and
WHEREAS, the City and the Authority determined that it would be in the best interests
of the City and the Authority to provide the funds necessary to finance and refinance the Projects
through the issuance by the Authority of (i) the Huntington Beach Public Financing Authority
(Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital
Improvement Refinancing Project) (the "Series 2011A Bonds"), and (ii) the Huntington Beach
Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2014 Series A
(Senior Center Project) (the "Series 2014A Bonds" and together with the Series 2011A Bonds,
the `Bonds"), pursuant to an Indenture, dated as of September 1, 2011, by and among the
Authority, the City and the Trustee, as amended and supplemented by the First Supplemental
Indenture, dated as of November 1, 2014, by and among the Authority, the City and the Trustee
(collectively, the "Indenture"), payable from the base rental payments (the "Base Rental
Payments") to be made by the City under the Lease Agreement and the other assets pledged
therefor under the Indenture; and
WHEREAS, all rights to receive such Base Rental Payments were assigned without
recourse by the Authority to the Trustee pursuant to the Indenture; and
WHEREAS, in consideration of such assignment and the execution of the Indenture, the
Authority issued the Bonds (capitalized undefined terms used in these recitals shall have the
meanings ascribed thereto in the Indenture); and
WHEREAS, the Indenture provides that, subject to the conditions set forth therein, the
Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners
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4164-9723-2159.1
under the Indenture may be modified or amended from time to time and at any time by a
Supplemental Indenture, which the Authority, the City and the Trustee may enter into without the
consent of any Owners for any.reason not otherwise provided for in the Indenture, provided such
amendment or supplement does not adversely affect the rights or interests of the Owners; and
WHEREAS, a portion of the proceeds of the Series 2014A Bonds remains unspent and
the City and the Authority have determined that it would be in the best interests of the City and
the Authority to amend the Indenture to expand the Projects funded with the Series 2014A Bonds
to include the Police Building Modernization Project to be completed for the Police Department
building at the Civic Center and any other capital improvement projects the City deems a priority
(collectively, the "Expanded Projects"); and
WHEREAS, the City and the Authority have determined that such an amendment to the
Indenture would not adversely affect the rights or interests of the Owners under the Indenture;
and
WHEREAS, in order to accomplish the amendment of the Indenture to expand the
Projects to include the Expanded Projects, the Trustee, the Authority and the City are entering
into this Second Supplemental Indenture; 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 entering into
of this Second Supplemental Indenture do exist, have happened and have been performed. in
regular and due time, form and manner as required by law, and the parties hereto are now duly
authorized to execute and enter into this Second Supplemental Indenture;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants contained herein and for other valuable consideration, the parties do hereby agree
as follows:
PART 1
PARTICULAR AMENDMENTS
Part 1.1. Amendments to Section 1.01. Section 1.01 of the Indenture is hereby
amended by modifying the following term:
"Series 2014A Project" means (i) the capital improvement project
described in recital clauses to the First Supplemental Indenture, (ii) the capital
improvement project constituting the. City's Police Building Modernization
Project to be completed for the Police Department building at the Civic Center,
and (iii) any other capital improvement project the City deems a priority.
PART 2
MISCELLANEOUS
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4164-9723-2159.1
Part 2.1. Effect of Second Supplemental Indenture. This Second Supplemental
Indenture and all of the terms and provisions herein contained shall form part of the Indenture as
fully and with the same effect as if all such terms and provisions had been set forth in the
Indenture. The Indenture is hereby ratified and confirmed and shall continue in full force and
effect in accordance with the terms and provisions thereof, as heretofore amended and
supplemented, and as amended and supplemented hereby. If there shall be any conflict between
the terms of this Second Supplemental Indenture and the terms of the Indenture (as in effect on
the day prior to the effective date of this Second Supplemental Indenture), the terms of this
Second Supplemental Indenture shall prevail.
Part 2.2. Execution in Counterparts. This Second Supplemental Indenture may be
executed in several counterparts, each of which shall be deemed an original, and all of which
shall constitute but one and the same instrument.
Part 2.3. Governinf, Law. This Second Supplemental Indenture shall be construed and
governed in accordance with the laws of the State of California.
Part 2.4. Effective Date. This Second Supplemental Indenture shall become effective
immediately upon the execution hereof.
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4164-9723-2159.1
IN WITNESS WHEREOF, the parties hereto have executed this Second Supplemental
Indenture by their officers thereunto duly authorized as of the day and year first written above.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
By:
Authorized Officer
HUNTINGTON BEACH PUBLIC
FINANCING AUTHORITY
Erik Peterson,
Chair of the Board of Directors
CITY OF HUNTINGTON BEACH
By:
Chuck Adams,
Interim Chief Financial Officer
APPROVED AS TO Rh1
By.
qt� TES
CITY A NEY
CITY Of HU" .� TON BEACH
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4164-9723-2159.1
IN WITNESS WHEREOF, the parties hereto have executed this Second Supplemental
Indenture by their officers thereunto duly authorized as of the day and year first written above.
THE BANK OF NEW YORK MELLON
TRUST COMPANY,N.A.,as Trustee
By: .
Authorized Officer
HUNTINGTON BEACH PUBLIC
FINANCING AUTHORITY
By:
CITY OF HUNTINGTON BEACH
By:
COUNTERPART
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