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HomeMy WebLinkAboutReso - CC - 043-2006RESOLUTION NO. 41-70 6 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AUTHORIZING THE ISSUANCE OF ONE OR MORE SERIES OF PENSION OBLIGATION BONDS, APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST AGREEMENT, AND AUTHORIZING A VALIDATION ACTION AND OTHER MATTERS RELATING THERETO RESOLVED, by the City Council of the City of Burlingame: WHEREAS, the City Council (the "City Council") of the City of Burlingame (the "City") adopted a retirement plan pursuant to the Public Employees' Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the "Retirement Law"); and WHEREAS, the Retirement Law obligates the City to (1) make annual contributions to the California Public Employees' Retirement System (the "System"), to fund pension benefits for its employees, (2) amortize the unfunded accrued actuarial liability with respect to such pension benefits, and (3) appropriate funds for the purposes described in (1) and (2); and WHEREAS, the obligation of the City to pay its unfunded accrued actuarial liability to the System and its normal annual contribution to the System for its police, fire and miscellaneous pension plans (collectively, the "Pension Obligation") are evidenced by contracts between the City and the System, as heretofore and hereafter amended from time to time (collectively, the "PERS Contract"); and WHEREAS, the City desires to issue bonds (the "Pension Obligation Bonds") in an aggregate principal amount not to exceed the Pension Obligation, plus an additional amount to pay costs of issuance of the Pension Obligation Bonds, for the purpose of refunding the PERS Contract and thereby providing funds to the System in payment of all or part of the Pension Obligation and to authorize the issuance of additional bonds in the future from time to time for the purpose of paying the obligations of the City to the System required pursuant to the Retirement Law, including (i) all or a portion of the unfunded accrued actuarial liability of the City remaining unpaid on the date of issuance of such additional bonds and the unpaid amount of the City's normal annual contribution to the System for the Fiscal Year in which such additional bonds are issued and (ii) refunding the Pension Obligation Bonds or additional series of bonds; and WHEREAS, there is on file with the City Council the proposed form of Trust Agreement (the "Trust Agreement") to be entered into between the City and The Bank of New York Trust Company, N.A., as trustee (the "Trustee"), relating to the Pension Obligation Bonds, including the forms of Bonds attached thereto as an exhibit. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BURLINGAME DOES HEREBY RESOLVE: Section 1. This City Council hereby finds and declares that the issuance of the Pension Obligation Bonds to refund the Pension Obligation, and the other actions contemplated by this Resolution are in the best interests of the City and are anticipated to result in savings based on current actuarial assumptions. Section 2. This City Council hereby authorizes and approves the issuance of the Pension Obligation Bonds and hereby authorizes and directs the City Manager to execute the Pension Obligation Bonds, and to cause the Pension Obligation Bonds to be authenticated and delivered in accordance with the Trust Agreement. The Pension Obligation Bonds shall be in substantially the forms attached to the Trust Agreement, with such changes therein, deletions therefrom and additions thereto as the City Manager shall approve, such approval to be conclusively evidenced by the execution and delivery of the Pension Obligation Bonds; the Pension Obligation Bonds may be issued as either current interest fixed rate bonds, listed securities, capital appreciation bonds, index bonds or auction rate securities or a combination thereof, and may be issued in a single series or in two or more series, at one time or from time to time, provided, however, that the aggregate initial principal amount of the Pension Obligation Bonds shall not exceed the amount of the Pension Obligation (as confirmed by the System or the City's actuary) remaining unpaid on the date of issuance of the Pension Obligation Bonds, plus an additional amount to pay costs of issuance of the Pension Obligation Bonds, original issue discount, and underwriter's discount on the Pension Obligation Bonds (such underwriter's discount, excluding original issue discount, not to exceed one and twenty hundredths percent (1.20%) of the aggregate principal amount of the Pension Obligation Bonds); the maximum interest rate on each series of the Pension Obligation Bonds which are issued as fixed rate bonds, including current interest fixed rate bonds, listed securities or capital appreciation bonds shall not exceed seven and one-half percent (7.5%) per annum and the maximum interest rate on each series of the Pension Obligation Bonds which are issued as variable rate bonds, including index bonds or auction rate securities shall not exceed seventeen percent (17%) per annum; and the Pension Obligation Bonds shall mature not later than thirty (30) years following their date of issuance. Section 3. The proposed form of Trust Agreement, between the City and the Trustee, on file with the City Clerk, is hereby approved. The City Manager and the Finance Director/Treasurer (the "Authorized Representatives") are each hereby authorized and directed, severally, or any such officer's designee, for and on behalf of the City, to execute and deliver the Trust Agreement, substantially in the form on file with the City Clerk, with such changes therein, deletions therefrom and additions thereto (including, but not limited to changes, deletions and additions as may be required by a municipal Bond Insurer) as such Authorized Representative shall approve, such approval to be conclusively evidenced by the execution and delivery of the Trust Agreement. Pursuant to the terms of the Trust Agreement, the City Council hereby approves the issuance of additional series of bonds in the future from time to time (which additional series of bonds may be current interest fixed rate bonds, listed securities, capital appreciation bonds, index bonds, auction rate securities, variable rate bonds or tender option bonds) pursuant to supplemental trust agreements, subject to the limitations contained in the Trust Agreement presented to this meeting, for the purpose of refunding the Pension Obligation Bonds or any additional series of bonds from time to time issued pursuant to a supplemental trust agreement or for the purpose of paying the obligations of the City to the System required pursuant to the Retirement Law, including all or a portion of the unfunded accrued actuarial liability of the City remaining unpaid on the date of issuance of such additional series of bonds and the unpaid amount of the City's normal annual contribution to the System for the Fiscal Year in which such additional series of bonds are issued. Section 4. If an Authorized Representative determines that it will be advantageous to the City to purchase municipal bond insurance or secure other credit or liquidity enhancement with respect to some or all of the Pension Obligation Bonds, such Authorized Representative or his designee is hereby authorized to do so at market rates. Section 5. The Authorized Representatives of the City are, and each of them hereby is, authorized and directed to do any and all things, including bringing a validation action under Section 860 of the California Code of Civil Procedure, and to take any and all actions (including any required publications of summons or other notice) and execute and deliver any and all documents which they or any of them deem necessary or advisable in order to consummate the transactions contemplated by this Resolution and the Trust Agreement and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution and the Trust Agreement. Section 6. This Resolution shall take effect from and after its date of adoption. FO"01 AM I, DORIS MORTENSEN, City Clerk of the City of Burlingame, do hereby certify that the foregoing resolution was introduced at a regular meeting of the City Council held on the 19th day of June 2006, and was adopted thereafter by the following vote: AYES: COUNCILMEMBERS: . BAYLOCK, COHEN, %EIGH6AN, NAGEL, O'MAHONY NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE