Resolution - 2013-65RESOLUTION NO.2013-65
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, APPROVING A SITE LEASE, A LEASE
AGREEMENT, A PRELIMINARY OFFICIAL STATEMENT, AN
OFFICIAL STATEMENT, A CONTINUING DISCLOSURE
AGREEMENT AND A BOND PURCHASE AGREEMENT; APPROVING
CERTAIN TERMS AND CONDITIONS FOR A REIMBURSEMENT
AGREEMENT; AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City of West Covina, California (the "City") desires to refinance the
construction and improvement of the Cameron Park Community Center, a recreational facility of
the City (collectively, the "Project"), and the West Covina Public Financing Authority (the
"Authority") wishes to assist the City with such refinancing;
WHEREAS, the Authority has previously caused the issuance and delivery of West
Covina Public Financing Authority Lease Revenue Bonds, 2003 Series A (Community Center
Project) (the "Prior Bonds");
WHEREAS, the City wishes to cause the refunding of the Prior Bonds;
WHEREAS, the Authority will authorize the issuance of its Variable Rate Demand
Lease Revenue Refunding Bonds, Series 2013A (Community Center Project) (the "Bonds") to
assist the City with the refunding of the Prior Bonds; and
. WHEREAS, the.Authority and the City desire to enter into the Site Lease (as hereinafter
defined) pursuant to which the City agrees to lease to the Authority certain parcels constituting
the Cameron Park Community Center (the "Leased Property");
WHEREAS, the City and the Authority desire to enter into the Lease (as hereinafter
defined) pursuant to which the Authority agrees to sublease the Leased Property to the City in
consideration for which the City has agreed to make certain payments of base rental, which the
Authority will use to pay debt service on the Bonds; and
WHEREAS, it is proposed that the Bonds be sold on a negotiated basis in accordance
with the terms and provisions of a bond purchase agreement among the Authority, the City and
Gates Capital Corporation (the "Underwriter"), as underwriter for the Bonds (the "Bond
Purchase Agreement"); and
WHEREAS, the City desires to cause the preparation of a Preliminary Official Statement
and an Official Statement (each as hereinafter defined) in connection with the marketing and sale
of the Bonds; and
WHEREAS, to fulfill the requirements of Rule 15c2-12 promulgated under the
Securities Exchange Act of 1934, as amended (the "Rule"), the City will enter into a Continuing
Disclosure Agreement (the "Continuing Disclosure Agreement") with respect to the Bonds,
whereby the City will agree to provide disclosure reports and notices of certain enumerated
events pursuant to the Rule; and
WHEREAS, the Bonds are to be issued pursuant to the Marks -Roos Local Bond Pooling
Act of 1985 (the "Act"), constituting Article 4 (commencing with Section 6584) of Chapter 5 of
Division 7 of Title 1 of the Government Code of the State of California; -and
WHEREAS, the City is a member of the Authority and the Project is to be located within
the boundaries of the City; and
WHEREAS, the City Council has reviewed the documentation related to the issuance of
the Bonds which documentation is on file with the City Clerk of the City of West Covina;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Resolution No. 2013-65
Page 2
Section 1. The City hereby finds and determines that the foregoing recitals are true and
correct.
Section 2. The Site and Facility Lease (the "Site Lease"), in: substantially the form on
file with the City Clerk of the City and presented to the City Council at this meeting, is hereby
approved. Any one of the Mayor, the Mayor Pro Tem, the City Manager, the Finance' -Director
or their designees (each an "Authorized Officer") is hereby;authorized and directed, for and in
the name and on behalf of the City, to execute .and deliver the Site Lease, . with such insertions
and changes as may be approved by the Authorized Officer executing the same, subject to the
provisions of this Resolution, such approval to be conclusively evidenced by such execution and
delivery.
Section .3. The Lease Agreement (the "Lease"), in substantially the form on file with the
City Clerk of the City and presented to the City Council at this meeting, is hereby approved.
Any one of the. Authorized Officers is hereby authorized and directed, for and in the name and on
behalf of the City, to execute and deliver the Lease, with such insertions and changes as may be
approved by the Authorized Officer executing the same, subject to the provisions of this
Resolution, such approval to be conclusively evidenced by such execution and delivery.
Section 4. The Bond Purchase Agreement, in substantially the form on file with the City
Clerk of the City and presented to the City Council at this meeting, is hereby approved. ° Any one
of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf
of the City, to execute and deliver the Bond Purchase Agreement, with such insertions and
changes as may be approved by the Authorized Officer executing the same, subject to the
provisions of this Resolution, such approval to be conclusively evidenced by such execution and
delivery.
Section 5. The City Council hereby approves the use by the Underwriter of a
Preliminary Official Statement relating to the Bonds, substantially in the form on filewith the
City Clerk of the City and presented to the City Council at this meeting (the "Preliminary
Official Statement") and following pricing, an Official Statement in connection with the sale of
the Bonds (the "Official Statement"), in each case with such changes as may be approved by the
Authorized Officer and any one of the Authorized Officers is authorized to deliver copies of the
Preliminary Official Statement -and the Official Statement with such changes therein as such
Authorized Officer shall. approve, in his or her discretion, as be in the best interests of the
City. Upon the approval of such changes by such Authorized Officer, the Preliminary Official
Statement shall be "deemed final" as of its date except for the omission of certain information as
provided in and pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of
1934, as amended. The Authorized Officer is hereby -authorized and directed to execute such
Official Statement with such changes therein, deletions therefrom and modifications thereto as
such Authorized Officer may approve, such approval to be conclusively evidenced by the
execution and delivery thereof.
Section 6. The Continuing Disclosure Agreement, in substantially the form on: file with
the City Clerk of the City and presented to the City Council at this meeting, is hereby approved.
Any Authorized Officer is hereby authorized to execute the Continuing Disclosure Agreement in
substantially the forms on file, with such revisions, amendments and completions as shall be
approved by an Authorized Officer, such approval to be conclusively evidenced by the execution
and delivery thereof.
Section 7. Any Authorized Officer is hereby authorized and directed to execute and
deliver a reimbursement agreement, standby agreement or other form of agreement" with the
Bank of the West in connection with the Bonds (the ".Reimbursement Agreement") with such
terms and conditions as may be necessary or desirable, provided that such terms and conditions
are not materially inconsistent with the terms and conditions set forth in Exhibit A hereto.
Section 8. Pursuant to Section 5922 of the Government Code of the State of California,
the City Council hereby finds and determines that the Reimbursement Agreement and any
interest rate cap agreement delivered in connection with the Bonds is designed to reduce the
amount or duration of payment, rate, spread or similar risk or result in a lower cost of borrowing
when used in combination with the Bonds.
Resolution No. 2013-65
Page 3
Section 9. The Authorized Officers, the other officers and employees of the City, the
members of the City Council and any. consultants to and agents of the City, are each hereby
authorized and directed to do all things and take all actions necessary or desirable to effectuate
the transaction contemplated by this Resolution, including the procurement of bond insurance,
and to execute such other assignments, agreements (including an interest rate hedge and/or cap
agreement), certificates, receipts, endorsements, orders, opinions and other documents.
Section 10. All actions heretofore taken by the Authorized Officers and by any other
officers, employees or agents of the City with respect to. the issuance of the Bonds, or in
connection with or related to any of the agreements or documents referenced herein, are hereby
approved, confirmed and ratified.
Section 11. This Resolution shall become effective immediately upon adoption.
APPROVED AND ADOPTED on this I t day of October 2013.
ATTES ,
City Clerk L'aurle. Carrico
I, LAURIE CARRICO, CITY CLERK of the City of West Covina, California, do hereby certify
that the foregoing resolution was duly adopted by the City Council of the City of West Covina,
California, at a regular meeting held thereof on the 1 St day of October 2013 by the following vote
of the City Council:
AYES: Herfert, McIntyre, Sotelo, Sykes, Sanderson
NOES: None
ABSENT: None I
ABSTAIN: None �!�/✓
City Clerk Laurie Carrico '
APPROVED AS TO FORM:
pity Attorney Arnold Alvarez-Glasman
UNK-86NVEST
Proposal from Bank of the West
to the City of West Covina to provide a
Direct Pay Letter of Credit for
-.West Covina Public Financing Authority
Lease Revenue Bonds
2013 Series A
(Community Center Project)
Bank Facility
Bank of the West is proposing to provide a Letter of Credit for up to $2.05 million plus interest coverage for the
above -mentioned bonds. The Letter of Credit will provide credit enhancement and liquidity for the bond issue.
Bank Representatives
Bank of the West is represented by:
Edward C. (Ted) Neu
Senior Vice President
180 Montgomery Street, 91h Floor
San Francisco, CA 94104
(415)765-4938
ted.neu@bankofthewest.com
Shari Sacks
Vice President
180 Montgomery Street, 9`h Floor
San Francisco, CA 94104
(415)765-4915
shari.sacksC@bankofthewest.com "
Credit Approval
This facility is subject to formal credit approval by the Bank.
Bank of the West Credit Ratings
The Bank's current long-term ratings are A/A2/A+from Standard and Poor's, Moody's and Fitch,
respectively. The Bank's short-term ratings are A-1/P-1/F1.
September23, 2013
Proposal to City of West Covina to Provide a Letter of Credit for West Covina Public Financing Authority,Lease Revenue
Bonds, 2013 Series A (Community Center Project)
The Bank's standard disclosure follows:
LETTER OF CREDIT BANK
Bank of the West (the "Bank") is a California. banking corporation organized under the laws of the State of California and the
largest subsidiary of BancWest Corporation ("BancWest"), which is a wholly -owned subsidiary of BNP Paribas, a French
corporation ("BNP Paribas"). BNP Paribas is a European leader in global banking and financial services and one of the six
strongest banks in the world according to Standard & Poor's. The group is present in more than 80 countries with more
than 200,000 employees.
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Bank of the West is a financially strong regional financial services company with community bank roots dating back more`
than 135 years. It is the third -largest commercial bank based in California and operates a network of more than 700
commercial and retail banking locations throughout 19 Western, Rocky Mountain, and Midwestern states as well as
representative offices in New York, Tokyo, and Taipei. The Bank has 10,105 employees serving the needs of 1.7 million
customers.
Through four major business areas — Commercial Banking, Regional Banking, National Finance, and Wealth Management -
The Bank and its subsidiaries offer clients a broad range of retail, small business and commercial banking products and
services to fit their evolving financial needs. in addition to banking products, the Bank and its subsidiaries provide clients
with comprehensive investment services through BancWest Investment Services, and insurance products and services
through BW Insurance"Agency, Inc.
As of December 31, 2012, Bank of the West had total assets of approximately $63 billion and total deposits of $47 billion_
Net income for the full fiscal year ending December 31, 2012 was $555 million. Tier I Risk -Based Capital Ratio was 14.69%;
Total Risk -Based Capital Ratio was 15.95%; and Tier I Leverage Ratio 12.46%.
The Banks current Credit Ratings are as follows:
Standard and Poor's:
Long Term Rating: A
Short Term Rating: A-1
Moody's:
Long Term Rating: A2
Short Term Rating: P-1
Fitch:
Long Term Deposit Rating: A+
Short Term Deposit Rating: F1
The principal offices of the Bank are located at 180 Montgomery Street, San Francisco, California, 94104, and its telephone
number is (925) 942-8300. The Bank files financial reports with the Federal Deposit Insurance.System ("FDIC") and those
reports may be viewed on the FDIC's web site at: http://www.fdic.gov.
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September23, 2013
Proposal to City of West Covina to Provide a Letter of Credit for West Covina Public Financing Authority Lease Revenue
Bonds, 2013 Series A (Community Center Project)
Documentation:
The Bank's counsel will prepare a reimbursement agreement with standard covenants; events of default,
indemnification, representations and warranties, and governing law provisions. This Term Sheet does not
intend to summarize all relevant terms and conditions of the transaction.
Bank of the West will be represented by Melanie Murakami of Hawkins Delafield & Wood LLP.
Melanie S. Murakami
Hawkins Delafield & Wood LLP
333 South Grand Avenue, 361h Floor
Los Angeles, California 90071
(213) 236-9063
mmurakami(c�hawkins.com
Ms. Murakami's fees will be estimated at $25,000. The City shall be responsible for the Bank's legal expenses
whether or not the transaction closes.
Bank of the West Experience with Similar Facilities
Bank of the West currently provides letters of credit to the following clients:
Letter of Credit for $50 . million for the. City of Los Angeles Municipal Improvement Corporation
("M.ICLA") commercial paper program.
Letter of Credit for $35 million backing the City of Pittsburg (CA) Water Revenue Bonds.
Fees
Term
LC Fee
Upfront fee
2years
1.00%per
None
annum payable
quarterly in
arrears
Bank Interest Rate &
Term Out for
Liquidity Draws
Base Rate + 3%, payable over 3 years
Default, Rate
Base Rate +5%
Drawing Fee /
$250 per draw/ $2,500 annual
Annual Cap
maximum
Transfer Fee
$1,000 per transfer
Amendment Fee
$2,500 per amendment
Attorney's Fees
Fees for the 2004 Revenue Bond
transaction are estimated at
$ 25,000.
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September 23, 2013
Proposal to City of West Covina to Provide a Letter of Credit for West Covina Public Financing Authority Lease Revenue
Bonds, 2013 Series A (Community Center Project)
Repayment Terms
Drawings in the event that the lease revenue bonds cannot be sold due to market failure will bear interest at
Base Rate + 3%. Provided that there is no event of default, 90 days following the draw the outstanding amount
may convert to a Term Loan to be repaid over a period of three years at Base Rate + 3%. Draws will amortize in
equal semi-annual payments.
Credit draws for the payment of principal or interest are immediately due and payable.
There shall be no maximum rate applicable to the Bank facility.
Security
The Bonds and the reimbursement obligation to the Bank are secured by a general fund obligation of the City of
West Covina to make lease payments for the continued use of certain essential assets (the "Leased Assets").
Lease payments will be subject to abatement only and will not be subject to appropriation.
The Leased Assets are as follows:
Collateral A
Six acre Cameron Park which includes the Community Center. The Community Center is 24,000 square
feet that consists of a gym, multi -purpose rooms, kitchen and offices. Total cost in 2003 was
$4,777,000.
Collateral B
The City Yard at 825 Sunset Avenue is situated on about 352,400 square feet (8 acres) of land. The land
and various buildings comprising Collateral B have a combined insured value of $---
The City Yard contains:
i) Administration. Building (10,000 square feet),
ii) Warehouse (6,500 square feet),
iii) Electronics and Radio Shop (2,200 square feet) .
iv) Auto Repair Shop (9,000 square feet).
v) Miscellaneous small storage or shade structures (15,000 square feet)
vi) Fire Station (6,500 square feet)
vii) Chamber of Commerce Office which is currently vacant (4,000 square feet)
The City Yard provides the location for staging and storage for all City maintenance operations including
administration, storage, shipping and receiving, vehicle repair, and the maintenance of City streets,
sewers, storm drains, traffic signals, parks, buildings and landscaping.
The buildings house offices, locker rooms, auto repair equipment, electronics, storage of maintenance
supplies, paint, vehicles, tractors, trailers, tools etc. There is also substantial pavement for parking and
outdoor storage of materials. There is a trash transfer station and propane and CNG fueling facilities.
September 23, 2013
Proposal to City of West Covina to Provide a Letter. of Credit for West Covina.Public Financing Authority Lease Revenue
Bonds, 2013 Series A (Community Center Project)
About 44 full time public works employees operate from the yard. The site is essential to the ongoing
operations of the City. It would be essential in any local or regional disaster. The site also is an alternate
emergency operations center should the main center become unusable.
Future Commitment and Fees
The Bank is willing to consider an extension request for the facility at any time. Commitment fees are open for
renegotiation prior to renewal.
Depository Relationship
The Bank of the West offers and array of products and services to governmental clients through our,
Government Banking Division. As a condition to closing, the Bank will require a minimum $500,000 deposit from
the City. The Bank looks forward to working with the City to develop a broader banking relationship.
Expiration of Proposal
Your acknowledgment of this letter shall constitute acceptance of the foregoing terms and conditions. Unless
accepted or terminated, this proposal will expire 30 days from the date of issuance unless it is accepted by the
City or extended by the Bank in writing.
Credit Approval
This proposal is subject to credit approval at the Bank.
The proposed terms and conditions are provided for discussion purposes only and do not constitute an offer, agreement, or
commitment to lend by Bank of the West ("Lender"). The actual terms and conditions upon which Bank of the West might extend
credit to the Borrower are subject to satisfactory completion of due diligence, internal credit approval, satisfactory documentation
and other such terms and conditions as determined solely by Bank of the West.
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