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HomeMy WebLinkAboutCC Resolution 12928 (Validation Action; Pension Obligation Bonds)RESOLUTION NO. 12928 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE FILING OF A VALIDATION ACTION REGARDING THE ISSUANCE OF PENSION OBLIGATION BONDS TO REFINANCE THE OUTSTANDING OBLIGATIONS OF THE CITY TO THE MARIN COUNTY EMPLOYEES' RETIREMENT ASSOCIATION WHEREAS, the City of San Rafael (the "City") adopted Resolution No. 5294 on May 2, 1977, approving an agreement (as further defined herein, the "MCERA Agreement") with the Marin County Employees' Retirement Association ("MCERA") established by the County of Marin pursuant to the County Employees Retirement Law, commencing with Section 31450 of the Government Code of the State of California, as amended, whereby the employees of the City have been accepted as members of MCERA; and WHEREAS, pursuant to the MCERA Agreement, the City is obligated to make certain payments (including normal costs for the current year) to MCERA in order to fund retirement benefits for such employees; and WHEREAS, the City has not, at this time, fully funded on an actuarial basis, the cost of retirement of its employees that are members of MCERA and has unfunded obligations as a result (the "MCERA Obligations"); and WHEREAS, the City is authorized under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the "Bond Law"), to issue its bonds for the purpose of refunding certain outstanding obligations of the City, including the MCERA Obligations; and WHEREAS, in order to refund a portion of the MCERA Obligations and thereby realize interest savings, the City proposes at this time, subject to additional approvals of this City Council, to authorize the issuance of its bonds under the Bond Law for the purpose of refinancing the MCERA Obligations in whole or in part; and WHEREAS, the City Council wishes at this time to institute judicial proceedings to determine the validity of such bonds. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Rafael, as follows: Section 1. Authorization of Bonds. The City Council hereby authorizes the issuance of its bonds under the Bond Law for the purpose of financing the MCERA Obligations of the City which are due and owing to MCERA (the "Bonds"). The Bonds may be issued by the City in one or more series from time to time. The aggregate principal amount of the Bonds shall not exceed the aggregate amount of the unfunded accrued actuarial liability represented by the MCERA Obligations, as reported to the City by MCERA, plus an amount required to pay all costs of issuing the Bonds (including underwriter's discount and original issue discount, if any). Section 2. Material Provisions of Bonds. The Bonds shall be issued under an Indenture of Trust (the "Bond Indenture") between the City and a trustee to be selected by the City (the "Trustee"), in substantially the form on file with the City Clerk. The final form of the Indenture shall be subject to approval by resolution of the City Council adopted following the conclusion of proceedings described in Section 3. Additional series of the Bonds may be issued by the City from time to time in accordance with the provisions of the Bond Indenture and subject to the limitations contained herein. All Bonds at any time issued by the City shall be subject to the following limitations: (a) Any series of Bonds shall mature over a term not exceeding 30 years from the date of the original issuance of such series of Bonds. (b) Interest on the Bonds may be calculated at a fixed, variable or adjustable rate. The Bonds may be issued as current interest bonds, as capital appreciation bonds or as any combination thereof. Interest on the Bonds shall not exceed the maximum rate of interest permitted by law. (c) Principal of and interest and redemption premiums (if any) on the Bonds shall be payable from the General Fund of the City and from any other source of legally available funds of the City. The Bonds shall not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation. (d) Proceeds of the Bonds, except to the extent required to pay the costs of issuing and underwriting the Bonds, shall be deposited with the Trustee and applied to discharge the MCERA Obligations of the City in whole or in part. Section 3. Institution of Judicial Validation Proceedings; Engagement of Legal Services. The City Council hereby authorizes the filing of an action to determine the validity of the Bonds, the Bond Indenture and related matters in the Superior Court of Marin County, under the provisions of Sections 860 et sea• of the Code of Civil Procedure of the State of California. To that end, the City Council hereby approves the engagement of Jones Hall, A Professional Law Corporation, to act as bond counsel for the Bonds, and authorizes the City Manager or his designee to execute an agreement with said firm in the form on file with the City Clerk. Said firm is hereby directed, in concert with the City Attorney, to prepare and cause to be filed and prosecuted to completion all proceedings required for the judicial validation of the Bonds, the Bond Indenture and related matters. Section 4. Approval of Additional Documents. Upon completion of the validation action authorized under Section 3, the City staff shall cause the following to be submitted to this City Council for final approval: (i) an agreement for the purchase of the Bonds by E.J. De La Rosa as underwriter, (ii) a Preliminary Official Statement relating to the Bonds, to be prepared by Jones Hall, A Professional Law Corporation, acting as disclosure counsel to the City, (iii) the final form of the Bond Indenture and (iv) such other agreements and documents as are necessary or convenient to implement the issuance, sale and delivery of the Bonds. Notwithstanding anything in this resolution to the contrary, Bonds shall not be issued without the subsequent approval of this City Council as provided in this Section 4. -2- Section 5. Effective Date. This Resolution shall take effect from and after the date of approval and adoption thereof. I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the Council of the City of San Rafael held on the 1st day of March, 2010, by the following vote, to wit: AYES: COLINCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COLINCILMEMBERS: None ABSENT: COLINCILMEMBERS: None Ili hs-` G . l9oe to" ESTHER C. BEIRNE, City Clerk