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HomeMy WebLinkAboutCC RES 23-14__________________ Resolution 23-14 Page 1 of 3 RESOLUTION NO. 23-14 A RESOLUTION OF THE CITY OF TUSTIN, CALIFORNIA, AUTHORIZING THE GENERAL FUND’S INVESTMENT IN A PROMISSORY NOTE OF THE TUSTIN WATER ENTERPRISE FUND AND AUTHORIZING THE EXECUTION OF THE PROMISSORY NOTE BY THE WATER ENTERPRISE FUND. WHEREAS, the City of Tustin Water Enterprise Fund (the “Water Enterprise”) currently has three Refunding Water Revenue Bonds dated 2016 and 2020 which were issued to refinance prior obligations which were issued to finance capital improvements to the water system (collectively, the “Refunding Water Revenue Bonds”); WHEREAS, the Refunding Water Revenue Bonds are subject to bond rate covenants requiring net revenues including other funds accumulated in the Fund which are lawfully available for payment of the debt service on the Bond to equal at least 120% of the total amounts payable for debt service during the Fiscal Year as stated in the Refunding Water Revenue Bonds Indenture; WHEREAS, the Water Enterprise is not projected to meet the covenants for fiscal year ending 6/30/2023, thus requiring a replenishment of cash in the Water Enterprise of $3,830,700; WHEREAS, the Water Enterprise’s obligation to meet such bond covenants constitutes an obligation to the bond holders; WHEREAS, the Water Enterprise is authorized pursuant to Articles 10 and 11 (commencing with Section 53570) of Chapter 3 of Division 2 of Title 5 of the California Government Code (the "Act") to issue bonds, warrants, notes or other evidence of indebtedness for the purpose of meeting the bond covenant; WHEREAS, in order to meet the bond covenants, the Water Enterprise desires to issue, pursuant to the Act, its Promissory Note, with an approximately seven-year term to maturity (the "Promissory Note") payable to the City of Tustin (the "City"); WHEREAS, Section 53601 of the California Government Code provides that, subject to the limitations specified therein, the legislative body of a local agency (including a local agency such as the City) having money in its treasury not required for the immediate needs of the local agency, may invest any portion of the money that it deems wise or expedient in bonds, notes, warrants or other evidences of indebtedness of any local agency within the State of California (including a local agency such as the Water Enterprise); DocuSign Envelope ID: 739E2D6E-E380-4FE0-A1C0-E9AB79F02AE0 WHEREAS, the City desires to invest in the Promissory Note by advancing to the Water Enterprise the principal amount thereof; WHEREAS, such advance is to be used by the Water Enterprise to meet the bond covenants requirements; WHEREAS, a form of the Promissory Note has been submitted prior to this meeting of the City Council; and WHEREAS, the City Council desires to authorize the investment by the City of moneys in its treasury in the Promissory Note and the performance of such acts by or on behalf of the City as may be necessary or desirable to effect such investment; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Tustin, as follows: Section 1. The investment by the City of a portion of the money in its treasury in the Promissory Note is hereby authorized and approved; provided, however, that the principal amount of the Promissory Note shall not be greater than $3,830,700, the maturity date of the Promissory Note shall not be later than July 1, 2030 and the simple interest rate on the Promissory Note shall be 3.5% per annum. Section 2. The City Council hereby finds and determines that the City has money in its treasury not required for the immediate needs of the City in an amount at least equal to the maximum principal amount of the Promissory Note specified in Section 1. Section 3. The City Council hereby finds and determines that the investment of such money in the treasury of the City in the Promissory Note, as provided herein, is wise and expedient. Section 4. The officers and employees of the City, and each of them is, hereby authorized and directed, for and in the name of the City, to do any and all things and to execute and deliver any and all documents which they or any of them deem necessary or advisable in order to consummate the investment of money in the City treasury in the Promissory Note and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. Section 5. The officers and employees of the City and Water Enterprise, and each of them is, hereby authorized and directed, for and on behalf of the Water Enterprise, to do any and all things and to execute and deliver on behalf of the Water Enterprise the Promissory Note specified in Section 1, and any and all other documents which they or any of them deem necessary or advisable in order to consummate the investment of money in the City treasury in the Promissory Note and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. Section 6. All actions heretofore taken by the officers and employees of the City and Water Enterprise with respect to the investment of money in the City treasury in the __________________ Resolution 23-14 Page 2 of 3 DocuSign Envelope ID: 739E2D6E-E380-4FE0-A1C0-E9AB79F02AE0 __________________ Resolution 23-14 Page 3 of 3 Promissory Note are hereby approved, confirmed and ratified. Section 7. This Resolution shall take effect immediately upon its adoption. APPROVED and ADOPTED at a meeting of the City Council of the City of Tustin on May 2, 2023. AUSTIN LUMBARD, Mayor ATTEST: ERICA N. YASUDA, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica N. Yasuda, City Clerk of the City of Tustin, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 23-14 was duly passed and adopted at a regular meeting of the City of Tustin, held on the 2nd day of May, 2023, by the following vote: COUNCILMEMBER AYES: Lumbard, Clark, Gallagher, Gomez, Schnell (5) COUNCILMEMBER NOES: (0) COUNCILMEMBER ABSTAINED: (0) COUNCILMEMBER ABSENT: (0) COUNCILMEMBER RECUSED: (0) ____________________________ ERICA N. YASUDA, City Clerk DocuSign Envelope ID: 739E2D6E-E380-4FE0-A1C0-E9AB79F02AE0