Resolution No. 82471
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RESOLUTION NO. 8247
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON AUTHORIZING THE ENTRY INTO ONE OR MORE
INTEREST RATE SWAP TRANSACTIONS AND CERTAIN ACTIONS
RELATING THERETO
WHEREAS, the City of Vernon (the "City") is a municipal
corporation and a chartered city of the State of California organized
and existing under its Charter and the Constitution of the State of
lCalifornia; and
WHEREAS, the City is authorized pursuant to the provisions
lof its Charter and the City of Vernon Municipal Facilities Revenue
Bond Law, constituting Chapter 2, Article XI, of the Vernon City Code,
to issue bonds, notes and other obligations payable from the Net
Revenues of the Electric System (capitalized terms used herein and not
otherwise defined shall have the meanings given such terms in the
Master Indenture mentioned below) to finance the Costs of improvements
and additions to the Electric System and to refund such bonds, notes
and other obligations; and
WHEREAS, pursuant to Resolution No. 8150 (the "Bond
Resolution") adopted by the City Council on February 19, 2003, the
City entered into that certain Indenture of Trust (the "Master
Indenture"), dated as of April 1, 2003, with BNY Western Trust
Company, as trustee (the "Trustee"), providing the terms of City of
Vernon Electric System Revenue Bonds to finance the Costs of
improvements and additions to the Electric System or to refund any
Outstanding Bond or Bonds; and
WHEREAS, pursuant to the Master Indenture, as supplemented
by that certain First Supplemental Indenture of Trust, dated as of
1 April 1, 2003, the City has issued, and there remains outstanding,
2 $50,000,000 aggregate principal amount of City of Vernon Malburg
3 Generating Station Project Electric System Revenue Bonds, 2003 Series
4 A (the "2003 Series A Bonds") to finance a portion of the Costs of the
5 Malburg Generating Station; and
6 WHEREAS, pursuant to the Master Indenture, as supplemented
7 by that certain Second Supplemental Indenture of Trust, dated as of
8 April 1, 2003, the City has issued, and there remains outstanding,
9 $37,500,000 aggregate principal amount of City of Vernon Malburg
10 Generating Station Project Electric System Revenue Bonds, 2003 Series
11 B (the "2003 Series B Bonds") to finance a portion of the Costs of the
12 Malburg Generating Station; and
13 WHEREAS, pursuant to the Master Indenture, as supplemented
14 by that certain Third Supplemental Indenture of Trust, dated as of
15 April 1, 2003, the City has issued, and there remains outstanding,
16 $75,110,000 aggregate principal amount of City of Vernon Malburg
17 Generating Station Project Electric System Revenue Bonds, 2003 Series
18 C (the "2003 Series C Bonds" and, together with the 2003 Series A
19 Bonds and the 2003 Series B Bonds, the "2003 Series Bonds") to finance
20 a portion of the Costs of the Malburg Generating Station; and
21 WHEREAS, on February 19, 2003, the City Council of the City
22 of Vernon adopted Resolution No. 8151 approving the form of an
23 interest rate swap agreement and authorizing the entry into one or
24 more interest rate swap transactions and certain other actions
25 relating thereto; and
26 WHEREAS, the City has entered into that certain ISDA Master
27 Agreement, dated as of March 27, 2003, as amended and supplemented by
28 the Schedule to the Master Agreement and the Credit Support Annex,
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each between the City and Bank of America, N.A. (such ISDA Master
Agreement, as so amended and supplemented, being referred to as the
"Swap Agreement"); and
WHEREAS, the City Council desires to authorize certain
officers of the City to enter into one or more interest rate swap
transactions with respect to the 2003 Series Bonds as authorized by
law, including the City Charter and Section 5922 of the California
Government Code; and
WHEREAS, each interest rate swap transaction authorized
hereby shall constitute a Transaction (as defined in the Swap
Agreement, a "Transaction"), the specific terms of which shall be
contained in a Confirmation (as defined in the Swap Agreement, a
"Confirmation") to be delivered on or about the date such Transaction
is agreed upon by the parties; and
WHEREAS, each Transaction is to constitute a Qualified Swap
Agreement under the Master Indenture and the City's obligations under
each Transaction will be a special obligation payable solely from the
Net Revenues of the Electric System and the other funds included in
the Trust Estate as provided in the Indenture.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Administrator of the City (an
"Authorized Officer") is hereby authorized, subject to the
satisfaction of the applicable terms and conditions set forth in this
Resolution, to.enter into a Transaction under the Swap Agreement by
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agreeing to, accepting and executing a Confirmation to place the
subject 2003 Series Bonds on the desired interest rate basis at any
time that City Administrator determines that it is in the best
interests of the City in managing the City's interest rate position in
connection with the 2003 Series Bonds on a on -going basis to modify
the then applicable basis (the "Current Interest Rate Basis") on which
payments are economically being made in connection with all or any
portion of the 2003 Series Bonds (determined taking into account the
effect of any interest rate swap or other transactions which
economically modify the effective basis on which the City is making
interest payments with respect to the subject 2003 Series Bonds,
including without limitation reversals of Transactions under the Swap
Agreement and economic reversals of such Transactions outside the Swap
Agreement), and the City Clerk of the City (the "City Clerk") is
hereby authorized to attest the Confirmation describing each such
Transaction.
SECTION 3: The Authorized Officer executing the
Confirmation for each Transaction entered into pursuant to this
Resolution shall specify the 2003 Series Bonds to which such
Transaction relates (the "Related Bonds"). If the Current Interest
Rate Basis for the Related Bonds is a fixed rate, the Transaction may
modify such basis to a variable rate or to a different fixed rate. If
the Current Interest Rate Basis for the Related Bonds is a variable
rate, the Transaction may modify such basis to a fixed rate or change
the index or other basis on which interest is determined.
If the Current Interest Rate Basis with respect to the
Related Bonds is a fixed rate which is to be adjusted to another fixed
rate, then the new fixed rate shall be at least twenty-five (25) basis
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points less than the existing fixed rate with respect to the Related
Bonds. If the Current Interest Rate Basis with respect to the Related
JBonds is a fixed rate which is to be adjusted to a variable .rate, then
the variable rate in effect on the date of the applicable Transaction
shall be at least fifty (50) basis points below the existing fixed
rate with respect to the Related Bonds. If the Current Interest Rate
Basis with respect to the Related Bonds is a variable rate which is to
be adjusted to a fixed rate, then the fixed rate shall not be more
than two hundred fifty basis points over variable rate in effect with
respect to the Related Bonds on the date of the applicable
Transaction. If the Current Interest Rate Basis with respect to the
Related Bonds is a variable rate interest rate which is to be adjusted
to another variable rate, then the new variable rate with respect to
the Related Bonds effective on the date of the applicable Transaction
shall not be greater than the variable rate then in effect on the date
of the applicable Transaction.
A Transaction may become effective on a date subsequent to
the date of the Confirmation relating to such Transaction. A
Transaction may utilize any index or basis in establishing a variable
rate for a Transaction, including those with respect to taxable or
tax-exempt interest rates or commodity or other prices, which are
subject to verification from entities not party to the Transaction as
may be approved by the Authorized Officer executing the Confirmation
relating to such Transaction, such approval to be conclusively
evidenced by the execution of such Confirmation.
SECTION 4: In addition to the requirements of Section 3 of
this Resolution, each Transaction and Confirmation entered into
pursuant to this Resolution shall satisfy the following terms and
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conditions: (i) the term of the Transaction shall not exceed the
final maturity of the Related Bonds; (ii) the aggregate notional
amount of all Transactions then in effect (and not economically
reversed) with respect to the Related Bonds shall not exceed the
principal amount of the outstanding Related Bonds; (iii) any fixed
rate payable by the City under any such Transaction shall not exceed
twenty percent (200) per annum; (iv) any fixed rate to be received by
the City under any such Transaction shall not be less than three
percent (30) per annum; and (v) all payment obligations of the City
under the Confirmation and the Transaction shall be special
obligations of the City payable as provided in the Indenture solely
from the Net Revenues and the other funds included in the Trust
Estate.
SECTION 5: The City Council hereby finds and determines
that the program of Transactions authorized hereby is designed to
reduce the amount of interest cost to the City with respect to the
2003 Series Bonds.
SECTION 6: Each of the City Administrator, the City Clerk,
the Finance Administrator, and any other proper officer of the City is
hereby authorized and directed, acting singly, to execute such other
agreements, documents and certificates, and to take such actions,
including providing securities as required by the Credit Support
Annex, as may be necessary or convenient to carry out the City's
obligations under and to effect the purposes of the Swap Agreement,
each Transaction, each Confirmation, this Resolution and the
transactions herein authorized.
SECTION 7: All actions heretofore taken by any committee of
the City Council, or any officer, representative or agent of the City
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in connection with the execution and delivery of the Swap Agreement
and the performance of the Transactions and the other actions
1contemplated by this Resolution, is hereby ratified, approved and
(confirmed.
SECTION 8: The authorization to enter into Transactions in
1connection with the 2003 Series Bonds contained in this Resolution is
an independent source of authority for the Transactions authorized
hereby and is in addition to any other authorization to enter into
interest rate swap transactions in connection with the 2003 Series
Bonds contained in other resolutions of the City Council. The
Transactions authorized hereby may be entered into upon satisfaction
of only the terms and conditions contained herein without regard to
other terms and conditions contained in other resolutions of the City
Council in connection with interest rate swap transactions with
respect to the 2003 Series.Bonds. This Resolution shall not be
construed to limit or restrict the entry into Transactions authorized
by other resolutions of the City Council or to modify or supplement
the terms of any such resolution.
SECTION 9: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 16th day of July, 2003.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MALEkJRG, Ma or
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'CITY COUNCIL
}
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro -Tern
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
City Council
City of Vernon
Honorable Members:
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
July 10, 2003
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
It is hereby recommended that the City Administrator be authorized to
manage the Malburg Generating Station Project Electric System Bond
financing, including Weekly A & B series and Long term C series bonds
which were the subject of an interest rate SWAP Agreement.
Very truly yours,
Bruce V. Malkenhorst
City Administrator/City Clerk
BVM/gm
Memo
To: Bruce V. Malkenhorst, City Administrator/City Clerk
From: Eric Fresch, Finance Administrator
Date: July 10, 2003
Re: Resolution Authorizing Entry into One or More Interest Rate SWAP
Transactions - Malburg Generating Station Project Electric
System Revenue Bonds
The purpose of the resolution is to give authority to the City
Administrator to manage the Malburg Generating Station Project bond
financing, both the weekly A and B Series Bonds and the long-term C
Series Bonds, which were the subject of an interest rate SWAP
Agreement.
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