RES-2020-002 RESOLUTION NO. 2020- 0 0 2
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM (I)
APPROVING THE ISSUANCE OF NOT TO EXCEED $250,000,000
AGGREGATE PRINCIPAL AMOUNT OF REVENUE BONDS, SERIES 2020-
A (ELECTRIC UTILITY DISTRIBUTION SYSTEM IMPROVEMENTS),
REVENUE REFUNDING BONDS, SERIES 2020-B (ELECTRIC UTILITY
DISTRIBUTION SYSTEM REFUNDING) (TAXABLE) AND REVENUE
REFUNDING BONDS, SERIES 2020-C(ELECTRIC UTILITY DISTRIBUTION
SYSTEM REFUNDING) OF THE ANAHEIM HOUSING AND PUBLIC
IMPROVEMENTS AUTHORITY; (II) APPROVING THE FORMS AND
AUTHORIZING THE EXECUTION OF AN INSTALLMENT PURCHASE
AGREEMENT, AN INDENTURE OF TRUST, ESCROW AGREEMENTS, A
CONTINUING DISCLOSURE AGREEMENT, PURCHASE CONTRACTS
AND OTHER RELATED DOCUMENTS; (III) APPROVING THE DELIVERY
OF AN OFFICIAL STATEMENT; AND (IV) APPROVING CERTAIN
ACTIONS IN CONNECTION THEREWITH
WHEREAS, on or about July 1, 2014, the City of Anaheim (the "City") and the
Anaheim Housing Authority entered into a Joint Exercise of Powers Agreement establishing the
Anaheim Housing and Public Improvements Authority (the "Authority"); and
WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the
Government Code of the State of California(the "Bond Law")and the Authority's Joint Exercise
of Powers Agreement, the Authority is authorized to borrow money for the purpose of assisting
the City in the financing and refinancing of costs related to public capital improvements of the
City; and
WHEREAS, it is proposed that the Authority assist the City in the financing of
certain public capital improvements to the City's electric distribution system(the"Improvements")
and the refinancing of certain assets of the City's electric distribution system (the "Assets" and,
together with the Improvements, "Distribution System Assets"); and
WHEREAS, in order to assist the City with the financing and refinancing of the
Distribution System Assets,it is proposed that the City initially sell the Distribution System Assets
to the Authority, and that the Authority sell the Distribution System Assets to the City and the City
purchase such Distribution System Assets from the Authority pursuant to an Installment Purchase
Agreement (the "Installment Purchase Agreement"), by and between the City and the Authority,
the proposed form of which has been presented to this City Council, pursuant to which the City
will agree to make certain installment purchase payments (the "2020 Purchase Payments") in
connection therewith; and
WHEREAS,the Authority and the City have determined that it would be in the best
interests of the Authority,the City and the citizens of the City to authorize,pursuant to an Indenture
of Trust (the "Indenture"), by and among the Authority, the City and U.S. Bank National
Association,as trustee(the"Trustee"),the proposed form of which has been presented to this City
Council, the issuance of the Authority's Revenue Bonds, Series 2020-A (Electric Utility
Distribution System Improvements) (the "2020-A Bonds"), Revenue Refunding Bonds, Series
2020-B (Electric Utility Distribution System Refunding) (Taxable) (the "2020-B Bonds") and
Revenue Refunding Bonds, Series 2020-C (Electric Utility Distribution System Refunding) (the
"2020-C Bonds" and collectively with the 2020-A Bonds and the 2020-B Bonds, the "2020
Bonds") in the aggregate principal amount of not to exceed $250,000,000 under the provisions of
the Bond Law, for the purpose of raising funds necessary to provide such financial assistance to
the City; and
WHEREAS,the 2020 Bonds will be offered for sale through a Preliminary Official
Statement and an Official Statement, the proposed form of which has been presented to this City
Council; and
WHEREAS, it is proposed that the City enter into a Purchase Contract(the "2020-
A and 2020-B Purchase Contract") with J.P. Morgan Securities LLC, as representative of itself,
Goldman Sachs & Co. LLC and RBC Capital Markets, LLC, as underwriters (collectively, the
"Underwriters"), the proposed form of which has been presented to this City Council, providing
for the negotiated sale of the 2020-A Bonds and 2020-B Bonds to the Underwriters; and
WHEREAS, it is proposed that the City enter into a Purchase Contract(the "2020-
C Purchase Contract" and together with the 2020-A and 2020-B Purchase Contract,the"Purchase
Contracts")with J.P. Morgan Securities LLC, as representative of the Underwriters,the proposed
form of which has been presented to this City Council, providing for the negotiated sale of the
2020-A Bonds and 2020-B Bonds to the Underwriters; and
WHEREAS, it is proposed that the City enter into a Continuing Disclosure
Agreement (the "Continuing Disclosure Agreement") with the Trustee, the proposed form of
which has been presented to this City Council, in order to assist the Underwriters in complying
with SEC Rule 15c2-12; and
WHEREAS, it is proposed that a portion of the proceeds received from the sale of
the 2020-B Bonds, and certain other moneys, be deposited in an escrow fund created pursuant to
an escrow agreement (the "Escrow Agreement (2016-A)") between the City and U.S. Bank
National Association, as escrow agent,the proposed form of which has been presented to this City
Council, to provide for the refunding of certain prior electric revenue obligations of the City; and
WHEREAS, it is proposed that a portion of the proceeds received from the sale of
the 2020-C Bonds, and certain other moneys, be deposited in an escrow fund created pursuant to
an escrow agreement(the"Escrow Agreement(2015-A)"and together with the Escrow Agreement
(2016-A), the "Escrow Agreements") between the City and U.S. Bank National Association, as
escrow agent, the proposed form of which has been presented to this City Council, to provide for
the refunding of certain prior electric revenue obligations of the City; and
WHEREAS,the City has determined that it is in the best public interest of the City
to approve the above documents and authorize and approve the transactions contemplated thereby;
NOW,THEREFORE,the City Council of the City of Anaheim does hereby resolve,
determine and order as follows:
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Section 1. The City Council hereby approves the issuance of the 2020 Bonds
by the Authority under and pursuant to the Bond Law; provided, the aggregate principal amount
of the 2020 Bonds shall not exceed$250,000,000. The 2020 Bonds shall be issued pursuant to the
Indenture. The City Council hereby approves the Indenture in the form thereof on file with the
City Clerk,together with such additions thereto and changes therein as are approved in accordance
with Section 7 hereof, such approval to be conclusively evidenced by the execution and delivery
thereof.
The Mayor, the City Manager, the City Treasurer, the Public Utilities General
Manager and the Public Utilities Assistant General Manager—Finance and Administration, and
their respective designees(each,an"Authorized Officer"),are each hereby authorized and directed
to execute, and the City Clerk is hereby authorized and directed to attest and affix the seal of the
City to, the final form of the Indenture, for and in the name and on behalf of the City. The City
Council hereby authorizes the delivery and performance of the Indenture.
The City Council hereby approves the issuance of the 2020 Bonds in accordance
with the terms and provisions of the Indenture(as executed and delivered).
Section 2. The City Council hereby approves the Installment Purchase
Agreement in the form thereof on file with the City Clerk,together with such additions thereto and
changes therein as are approved in accordance with Section 7 hereof, such approval to be
conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each
hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to
attest and affix the seal of the City to, the final form of the Installment Purchase Agreement, for
and in the name and on behalf of the City. The City Council hereby authorizes the delivery and
performance of the Installment Purchase Agreement.
Section 3. The City Council hereby approves the Escrow Agreements in the
forms thereof on file with the City Clerk,together with such additions thereto and changes therein
as are approved in accordance with Section 7 hereof, such approval to be conclusively evidenced
by the execution and delivery thereof. The Authorized Officers are each hereby authorized and
directed to execute, and the City Clerk is hereby authorized and directed to attest and affix the seal
of the City to, the final forms of the Escrow Agreements, for and in the name and on behalf of the
City.The City Council hereby authorizes the delivery and performance of the Escrow Agreements.
Section 4. The City Council hereby approves the Continuing Disclosure
Agreement in the form on file with the City Clerk,together with such additions thereto and changes
therein as are approved by Section 7 hereof, such approval to be conclusively evidenced by the
execution and delivery thereof. The Authorized Officers are each hereby authorized and directed
to execute, and the City Clerk is hereby authorized and directed to attest and affix the seal of the
City to,the final form of the Continuing Disclosure Agreement, for and in the name and on behalf
of the City. The City Council hereby authorizes the delivery and performance of the Continuing
Disclosure Agreement.
Section 5. The City Council hereby approves the Purchase Contracts in the
forms thereof on file with the City Clerk, together with such additions thereto and changes therein
as are approved by Section 7 hereof, such approval to be conclusively evidenced by the execution
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and delivery thereof. The Authorized Officers are each hereby authorized and directed to execute,
and the City Clerk is hereby authorized and directed to attest and to affix the seal of the City to,
the final forms of the Purchase Contracts, for and in the name and on behalf of the City. The City
Council hereby authorizes the delivery and performance of the Purchase Contracts.
Section 6. The City Council hereby approves the Preliminary Official
Statement relating to the 2020 Bonds (the "Preliminary Official Statement") in the form thereof
on file with the City Clerk,with such additions thereto and changes therein as are approved by any
Authorized Officer,upon consultation with the City Attorney and Norton Rose Fulbright US LLP,
bond counsel and disclosure counsel (referred to herein as "Bond Counsel"). Each of the
Authorized Officers is hereby authorized and directed to execute and deliver a certificate deeming
the Preliminary Official Statement final for purposes of SEC Rule 15c2-12. Upon the pricing of
the 2020 Bonds, each of the Authorized Officers is hereby authorized and directed to prepare and
execute a final Official Statement (the "Official Statement"), substantially in the form of the
Preliminary Official Statement, with such additions thereto and changes therein as approved by
any Authorized Officer, upon consultation with the City Attorney and Bond Counsel. The City
Council hereby authorizes the distribution of the Preliminary Official Statement and the Official
Statement by the Underwriters in connection with the offering and sale of the 2020 Bonds.
Section 7. The agreements approved in Sections 1, 2, 3, 4 and 5 of this
Resolution shall, when executed and delivered pursuant to said sections, contain such additions
and changes as shall have been approved by the Authorized Officers. Each Authorized Officer is
hereby authorized to determine, in connection with the execution and delivery of the agreements
approved in Sections 1, 2, 3,4 and 5 hereof, the following with respect to the 2020 Bonds:
(a) the aggregate principal amount of the 2020 Bonds, which shall not exceed
$250,000,000;
(b) the capital projects to be financed with the proceeds of the 2020-A Bonds;
(c) the outstanding obligations of the City, the Authority and the California
Municipal Finance Authority to be defeased or refunded by the 2020-B Bonds and the
2020-C Bonds;
(d) the final 2020 Purchase Payment under the Installment Purchase
Agreement, which shall be due and payable not later than October 1, 2050;
(e) the yield on the 2020 Bonds, which shall not exceed 5.00%; and
(f) the Underwriters' discount on the 2020 Bonds, which shall not exceed
0.40% of the principal amount thereof.
Section 8. Prior to the Crossover Date (as defined in the Installment Purchase
Agreement), the 2020 Purchase Payments and all other payments with respect to Qualified
Obligations (as defined in the Installment Purchase Agreement) shall be secured by a pledge,
charge and lien upon the Surplus Revenues in the Qualified Obligations Account (as defined in
the Installment Purchase Agreement) and shall be paid from Surplus Revenues in the Qualified
Obligations Account unless otherwise paid from other sources of legally available funds. 2020
98736076.5/135685
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Purchase Payments and all other payments with respect to Qualified Obligations shall be equally
secured by the Surplus Revenues in the Qualified Obligations Account without priority for number
or date. The Surplus Revenues in the Qualified Obligations Account shall be held in trust by the
City Treasurer for the payment of the 2020 Purchase Payments and any other Qualified
Obligations. From and after the Crossover Date, the 2020 Purchase Payments and any other
Distribution System Parity Obligations (as defined in the Installment Purchase Agreement) shall
be equally secured by the Distribution System Net Revenues (as defined in the Installment
Purchase Agreement) and shall be paid from the Distribution System Net Revenues unless
otherwise paid from other sources of legally available funds. From and after the Crossover Date,
the Distribution System Net Revenues shall be held in trust by the Treasurer of the City for the
payment of the 2020 Purchase Payments and any other Distribution System Parity Obligations.
Section 9. The Mayor,the City Manager,the Public Utilities General Manager
and the Public Utilities Assistant General Manager—Finance and Administration, the City
Treasurer, the City Attorney and the City Clerk of the City and the other officers, employees and
agents of the City are hereby authorized and directed,jointly and severally, for and in the name of
the City, to do any and all things and to take all actions, including 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 or
advisable in order to consummate the lawful issuance and sale of the 2020 Bonds, and to
consummate the transactions contemplated by the Indenture,the Installment Purchase Agreement,
the Continuing Disclosure Agreement, the Escrow Agreement, the Purchase Contract and this
Resolution, and such actions previously taken by such officers, employees and agents are hereby
ratified and confirmed.
Section 10. This City Council hereby finds and determines that the transfer of
title to Distribution System Assets to the Authority under the terms of the Installment Purchase
Agreement is in the best interests of the City, and hereby agrees to transfer such title to the
Authority.
Section 11. In accordance with SB 450, good faith estimates of the following
are set forth on Exhibit A attached hereto: (a) the true interest cost of the 2020 Bonds, (b)the sum
of all fees and charges paid to third parties with respect to the 2020 Bonds, (c) the amount of
proceeds of the 2020 Bonds expected to be received net of the fees and charges paid to third parties
and any reserves or capitalized interest paid or funded with proceeds of the 2020 Bonds, and (d)
the sum total of all debt service payments on the 2020 Bonds calculated to the final maturity of the
2020 Bonds plus the fees and charges paid to third parties not paid with the proceeds of the 2020
Bonds.
Section 12. This Resolution shall take effect from and after its date of adoption.
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THE FOREGOING RESOLUTION was approved and adopted by the City Council
of the City of Anaheim at a regular meeting of said City Council held on the 14th day of January,
2020,by the following vote:
AYES: Mayor Sidhu and Council Members Faessel, Barnes,
Brandman, Moreno, Kring, and O'Neil
NOES: None
ABSENT: None
ABSTAIN:None
CITY OF ANAHEIM
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[SEAL]
ATTEST:
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CITY CLERK OFT CI HEIM
98736076.5/135685
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EXHIBIT A
The following information is obtained from the Underwriters with respect to the 2020
Bonds to be approved by this Resolution, and is being provided in compliance with Senate Bill
450(Chapter 625 of the 2017-2018 Session of the California Legislature)with respect to the 2020
Bonds:
1. True Interest Cost of the 2020 Bonds. Assuming an aggregate principal amount of
$233,990,000 of the 2020 Bonds are sold and based on market interest rates prevailing at the time
of preparation of this information,a good faith estimate of the true interest cost of the 2020 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 2020 Bonds, is 3.61%.
2. Finance Charge of the 2020 Bonds. Assuming an aggregate principal amount of
$233,990,000 of the 2020 Bonds are sold and based on market interest rates prevailing at the time
of preparation of this information, a good faith estimate of the finance charge of the 2020 Bonds,
which means the sum of all fees and charges paid to third parties(or costs associated with the 2020
Bonds), is $1,083,000.
3. Amount of Proceeds to be Received. Assuming an aggregate principal amount of
$233,990,000 of the 2020 Bonds are sold and based on market interest rates prevailing at the time
of preparation of this information, a good faith estimate of the amount of proceeds expected to be
received by the City for sale of the 2020 Bonds (including estimated original issue premium) less
the finance charge of the 2020 Bonds described in 2 above and any reserves or capitalized interest
paid or funded with proceeds of the 2020 Bonds, is $249,658,000.
4. Total Payment Amount. Assuming an aggregate principal amount of$233,990,000
of the 2020 Bonds are sold and based on market interest rates prevailing at the time of preparation
of this information, a good faith estimate of the total payment amount, which means the sum total
of all payments the City will make to pay debt service on the 2020 Bonds plus the finance charge
of the 2020 Bonds described in paragraph 2 above not paid with the proceeds of the 2020 Bonds,
calculated to the final maturity of the 2020 Bonds, is $385,461,000.
Attention is directed to the fact that the foregoing information constitutes good faith
estimates only. The actual interest cost, finance charges, amount of proceeds and total payment
amount may vary from the estimates above due to variations from these estimates in the timing of
2020 Bond sales, the amount of 2020 Bonds sold, the amortization of the 2020 Bonds sold and
market interest rates at the time of each sale. The date of sale and the amount of 2020 Bonds sold
will be determined by the City based on market and other factors.The actual interest rates at which
the 2020 Bonds will be sold will depend on the bond market at the time of sale. The actual
amortization of the 2020 Bonds will also depend, in part, on market interest rates at the time of
sale. Market interest rates are affected by economic and other factors beyond the City's control.
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CLERK'S CERTIFICATE
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ANAHEIM
I, THERESA BASS, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the
original Resolution No. 2020-002 adopted at a regular meeting provided by law, of the Anaheim
City Council held on the 14th day of January, 2020 by the following vote of the members thereof:
AYES: Mayor Sidhu and Council Members Faessel, Barnes, Brandman,
Moreno, Kring, and O'Neil
NOES: None
ABSENT: None
ABSTAIN: None
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of January, 2020.
CITY CLERK F THE CITY OF ANAHEIM
(SEAL)