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HomeMy WebLinkAboutRESOLUTIONS - 01012003 - 2003-207 BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA RESOLUTION NO. 2003/Zl__ RESOLUTION AUTHORIZING THE ISSUANCE OF AN ADDITIONAL COUNTY OF CONTRA COSTA PENSION OBLIGATION DEBENTURE, THE ISSUANCE AND SALE OF ONE OR MORE ADDITIONAL SERIES OF COUNTY OF CONTRA COSTA PENSION OBLIGATION BONDS, AUTHORIZING ONE OR MORE SWAP AGREEMENTS, SUPPLEMENTAL TRUST AGREEMENTS, AGREEMENTS RELATING TO AUCTION RATE SECURITIES, CONTRACTS OF PURCHASE, A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT, CONTINUING DISCLOSURE AGREEMENTS AND OTHER MATTERS RELATING THERETO WHEREAS,the County of Contra Costa(the"County") adopted a retirement plan under the County Employees Retirement Law of 1937, being Chapter 3 of the Government Code of the State of California, Sections 31450 through 31898, inclusive, as amended(the"Retirement Law"), and WHEREAS, the Retirement Law obligates the County to (1)make annual contributions to the Contra Costa County Employees Retirement Association(the"Association") to fund pension benefits for its employees, (2)amortize the unfunded actuarial accrued liability ("UAAL")with respect to such pension benefits over a period not exceeding 30 years, and (3)appropriate funds for the purposes described in(1)and (2); WHEREAS, on November 9, 1993, the Board of Supervisors of the County(the "Board")adopted Resolution No. 93/668 ("Resolution No. 93/668")authorizing the issuance of one or more County Pension Obligation Debentures and the issuance and sale of one or more series of County Pension Obligation Bonds; WHEREAS, this Resolution supplements Resolution No: 93/668; WHEREAS, the County, in 1994, evidenced its obligations to the Association to pay the then-current UAAL of the County by executing a Debenture(the"1994 Debenture")in favor of the Association; WHEREAS, the County issued its Taxable Pension Obligation Bonds, 1994 Series A(the"1994 Series A Bonds") in an aggregate principal amount of$337,365,000 pursuant to a Trust Agreement dated as of February 1, 1994 (the"Original Trust Agreement"), by and between the County and First Interstate Bank of California, as trustee(the"Original Trustee"), a portion of the proceeds of which were used to refund the 1994 Debenture; WHEREAS, on March 20, 2001, the County issued its Taxable Pension Obligation Bonds, Refunding Series 2001 (the"2001 Bonds")in an aggregate principal amount DOCSSF1:671642.2 of$107,005,000, pursuant to the Original Trust Agreement, as supplemented by the First Supplemental Trust Agreement, dated as of March 1, 2001, between the County and BNY Western Trust Company, as successor trustee(the"Trustee")to refund and defease a portion of the 1994 Series A Bonds; WHEREAS, recently the Board instituted a number of enhanced pension benefits and, partially as a consequence of which, the County had, as of December 31, 2001, a URAL,in the amount of not less than$319,094,719, after giving effect to any existing credit, based on the estimate of William M. Mercer, Incorporated(the"Actuary"), made as of November 26, 2002 pursuant to the Retirement Law; and WHEREAS, the County desires to evidence its obligation to the Association to pay the UAAL by executing an additional debenture(the"2003 Debenture"}; and WHEREAS, the County desires to issue Additional Bonds (the"2003 Bonds") pursuant to a Second Supplemental Trust Agreement in an aggregate principal amount not to exceed $340 million in order to refund the principal amount of the 2003 Debenture and pay costs of issuance of the 2003 Bonds including,without limitation, underwriters' discount, thereby providing funds to the Association for investment and refunding a portion of the County's pension obligations; and WHEREAS, there have been presented to this meeting proposed forms of the following documents: 1. the 2003 Debenture; 2. a Second Supplemental Trust Agreement(the"Second Supplemental Trust Agreement")to be entered into between the County and the Trustee, relating to the 2003 Bonds; 3. a Contract of Purchase; 4. an ISDA Master Agreement and Schedule; 5. an Auction Agent Agreement; 6. a Broker-Dealer Agreement; 7. a Market Agent Agreement; 8. a Preliminary Official Statement for the 2003 Bonds; and 9. a Continuing Disclosure Agreement. NOW, THEREFORE, IT IS RESOLVED,DETERMINED AND ORDERED by the Board of Supervisors of the County of Contra Costa as follows: DMSSF1:671642.2 2 Section 1. The Board hereby finds and declares that the execution of the 2003 Debenture,the issuance of the 2003 Bonds in an aggregate principal amount not to exceed $340 million to refund the 2003 Debenture and the other actions contemplated by this Resolution are in the best interests of the County. Section 2. The Board hereby authorizes and approves the execution and delivery of the 2003 Debenture in an initial principal amount not exceeding the estimated unfunded actuarial accrued liability as determined by an actuary of the Association as of the date of issuance of the 2003 Debenture, and authorizes and directs the Treasurer-Tax Collector of the County(the"Treasurer-Tax Collector")to execute and deliver the 2003 Debenture to the Association, substantially in the form presented to this meeting,with such changes therein, deletions therefrom and additions thereto as the Treasurer-Tax Collector in consultation with County Counsel shall approve, such approval to be conclusively evidenced by the execution and delivery of the 2003 Debenture to the Association, and the Clerk of the Board is authorized and directed to affix and attest the seal of the County; provided, however, that the stated interest rate on the 2003 Debenture shall not exceed eight and thirty-five hundredths percent (8.35%)per annum, the 2003 Debenture shall be prepayable at any time without premium, and the 2003 Debenture shall mature not later than 20 years, or the UAAL amortization period in effect at the Association, from its date of issuance. The 2003 Debenture shall constitute an obligation imposed by law, pursuant to the Constitution of the State of California and the Retirement Law and an obligation of the County not limited as to payment from any special source of funds. The 2003 Debenture shall not, however, constitute an obligation of the County for which the County is obligated or permitted to levy or pledge any form of taxation or for which the County has levied or pledged or will Ievy or pledge any form of taxation. Section 3. The Board hereby authorizes and approves the issuance of the 2003 Bonds in an aggregate principal amount not to exceed $340 million and hereby authorizes and directs the Chair of the Board and the Treasurer-Tax Collector to execute the 2003 Bonds, and the Clerk of the Board to affix and attest the seal of the County and to cause the 2003 Bonds to be authenticated and delivered in accordance with the Second Supplemental Trust Agreement. The 2003 Bonds shall be in substantially the form set forth in the exhibit to the Second Supplemental Trust Agreement, with such changes therein, deletions therefrom and additions thereto as the Chair of the Board, the County Administrator of the County or the Treasurer-Tax Collector or a designee of any of such officers(each an"Authorized Officer")in consultation. with County Counsel shall approve, such approval to be conclusively evidenced by the execution (by manual or facsimile signature)and delivery of the 2003 Bonds;the 2003 Bonds may be issued in a single series or in two or more series or subseries, and may be issued as Fixed Rate Bonds or Auction Rate Bonds as specified in the Second Supplemental Trust Agreement when executed;provided, however, that the aggregate initial principal amount of the 2003 Bonds shall not exceed the sum of the amount necessary to refund the unpaid principal amount of the 2003 Debenture, plus the underwriters' discount on the 2003 Bonds and the costs of issuance of the 2003 Bonds(including any bond insurance premiums and ongoing administrative costs related to the 2003 Bonds); the interest rate on the 2003 Bonds which are Fixed Rate Bonds(and in the case of Auction Rate Bonds, initially or after giving effect to any Swap Agreement(defined below) or as estimated over the term of the Bonds) shall not exceed eight percent (8%) per annum; and the 2003 Bonds shall mature not later than 20 years or the UAAL amortization period in effect at the Association from the date of issuance of the 2003 Debenture. DOCSSF1:671642.2 3 Notwithstanding the provisions of the draft of the Second Supplemental Trust Agreement presented to this meeting, the Authorized Officer is hereby authorized to determine the provisions for redemption of the 2003 Bonds, if any. The Authorized Officer is hereby authorized to determine whether the 2003 Bonds will be issued as Fixed Rate Bonds or Auction Rate Bonds, or any combination thereof, and the interest payment dates for any 2003 Bonds, subject to any limits imposed by the Original Trust Agreement. Each such determination by the Authorized Officer shall be conclusively evidenced by the issuance of the 2003 Bonds. The 2003 Bonds shall constitute an obligation imposed by law, pursuant to the Constitution of the State of California and the Retirement.Law and an obligation of the County not limited as to payment from any special source of funds. The 2003 Bonds shall not, however, constitute an obligation of the County for which the Courcy is obligated or permitted to levy or pledge any form of taxation or for which the County has levied or pledged or win levy or pledge any form of taxation. Section 4. The County shall enter into the Second Supplemental Trust Agreement with BNY'Western Trust Company as trustee. The Authorized Officer is hereby authorized and directed to execute and deliver the Second Supplemental Trust Agreement on behalf of the County, substantially in the form presented to this meeting,with such changes therein, deletions therefrom and additions thereto, as the Authorized Officer in consultation with County Counsel shall approve(but consistent with the authority granted to the Authorized Officer in Section 3 hereof), such approval to be conclusively evidenced by the execution and delivery of the Second Supplemental Trust Agreement, and the Clerk of the Board is authorized and directed to affix and attest the seal of the County thereto. Section 5. The Authorized Officer is hereby authorized to execute and deliver on behalf of the County one or more interest rate swap agreements and/or hedging agreements and/or any other form of derivative agreement or arrangement(each a"Swap Agreement")with an institutional party provided, however,that (i)the institutional party shall have an unsecured, long-term credit rating from either of(a)Moody's Investors Services, Inc., a Delaware Corporation and its successors(and if such corporation shall for any reason no longer perform the functions of a securities rating agency, any other nationally recognized security rating agency designated by the County) of"A" or better, or(b) Standard&Poor's Corporation, a New York corporation and its successors(and if such corporation shall no longer perform the function of a securities rating agency any other nationally recognized securities rating agency designated by the County) of"A" or better, (ii)the term of the swap agreement, derivative agreement or hedging agreement shall not exceed the final maturity of the Bonds, (iii)the County's obligations shall be contingent upon certain performance by the counterparty to the agreement or arrangement and(iv)that the County will have the right to terminate the agreement or arrangement upon the occurrence of certain circumstances. The Board hereby finds and determines pursuant to the provisions of Government Code Section 5922 that the Swap Agreements described in this Section 5 will reduce the amount of interest rate risk or result in a lower cost of borrowing to the County. In furtherance of the foregoing,the Authorized Officer is hereby authorized to execute and deliver one or more ISDA Master Agreements, Schedules and related confirmations in substantially the form presented to this meeting, such Swap Agreements to be in an aggregate notional amount not exceeding the aggregate amount of the 2003 Bonds which are issued DOcssrz:671642.2 4 pursuant to this Resolution. Each Swap Agreement shall be in such form as may be approved by the Authorized Officer in consultation with County Counsel and Bond Counsel, said execution to be conclusive evidence of such approval;provided, however, that (i)the payments made by the counterparty to each Swap Agreement must be made at the same frequency and on the same dates as the interest payments due on that principal amount of 2003 Bonds equal to the notional amount of the SwapAgreement; (ii) each Swap Agreement shall provide for payment by the County at each payment date under each Swap Agreement of an amount which is net of amounts accrued or payable with respect to the counterparty's payment obligation under the Swap Agreement, and(iii)each Swap Agreement shall be such that(A)it by entering into such Swap Agreement the County will be agreeing to pay a variable interest rate and shallbe receiving a fixed rate, then the initial floating rate to be paid by the County expressed as an annual percentage rate shall be less than the fixed rate to be received by the County, or(B)if,by entering into such Swap Agreement the County will be agreeing to pay a fined interest rate and shall be receiving a variable interest rate, then the Authorized Officer shall have determined that the Swap Agreement will reduce the amount of interest rate risk or result in a lower cost of borrowing and is in the best financial interest of the County. In connection with the 2003 Bonds or with any Swap Agreement, the Authorized Officer also is hereby authorized to execute and deliver one or more interest rate cap agreements (each a"Cap Agreement"), such Cap Agreements to be in an aggregate notional amount not exceeding the aggregate amount of the Bonds which are issued pursuant to this Resolution. Each Cap Agreement shall be in such form as may be approved by the Authorized Officer in consultation with County Counsel and Bond Counsel, said execution tote conclusive evidence of such approval. Pursuant to each Cap Agreement,the Authorized Officer may agree to pay the counterparty to such Cap Agreement a fee(the"Cap Fee")as provided in the Cap Agreement in order to receive from such counterparty the amount, if any, by which a variable interest rate exceeds a fixed interest rate, each as specified in such Cap Agreement, for each period specified in such Cap Agreement;provided, however, that the Authorized Officer shall have determined that payment of the Cap Fee is appropriate for the reduction in the County's exposure to variations in interest rates during the term of the 2003 Bonds or any Swap Agreement. The Authorized Officer is also hereby authorized to terminate or replace any Swap Agreement or execute and deliver any Swap Agreement or Cap Agreement that serves to reverse any outstanding Swap Agreement or Cap Agreement, respectively, if in the judgment of the Authorized Officer, in consultation with County Counsel, such termination, replacement or reversal,together with any other action taken by the County, would reduce the amount of interest rate risk or result in a lower cost of borrowing to the County. Such reversal will not be considered for purposes of calculating the aggregate amount of such Swap Agreement or Cap Agreement authorized by this Resolution pursuant to the preceding three paragraphs. Section 6. There has been prepared and presented to the Board a proposed form of auction agent agreement(hereinafter referred to as the"Auction Agreement")relating to the performance of certain duties with respect to any Series of 2003 Bonds while such Series of 2003 Bonds bears interest at an auction rate, such Auction Agreement to be entered into with one or more auction agents(each an"Auction Agent" and hereinafter collectively referred to as the "Auction Agents"), which Auction Agreement may be executed and delivered in the event that one or more Series of 2003 Bonds is issued in an auction rate mode. The Authorized Officer is DOC.SSFI:671642.2 5 hereby authorized to execute and deliver one or more Auction Agreements on behalf of the County, in substantially such form, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer, in consultation with County Counsel shall approve, which approval shall be conclusively evidenced by the execution and delivery of the Auction Agreement. The Authorized Officer is further authorized to remove and replace Auction Agents in the future as such officer deems necessary or convenient. Section 7. There has been prepared and presented to the Board a proposed form of broker-dealer agreement (hereinafter referred to as the"Broker-Dealer Agreement") relating to the performance of certain duties with respect to any Series of 2003 Bonds while such Series of 2003 Bonds bears interest at an auction rate, such Broker-Dealer Agreement to be entered into with one or more entities that is permitted by law to perform the function of broker- dealer and is a member of, or a direct participant in, the security depository for the 2003 Bonds (each a"Broker-Dealer" and hereinafter collectively referred to as the"Broker-Dealers"), which Broker-Dealer Agreement may be executed and delivered in the event one or more Series of 2003 Bonds is issued in an auction rate mode. The Authorized Officer is hereby authorized to execute and deliver one or more Broker-Dealer Agreements on behalf of the County, in substantially such form,with such changes therein, deletions therefrom and additions thereto as the Authorized Officer, in consultation with County Counsel shall approve, which approval shall be conclusively evidenced by the execution and delivery of the Broker-Dealer Agreement. The Authorized Officer is further authorized to remove, replace and appoint additional Broker- Dealers with respect to the 2003 Bonds as such officer deems necessary or convenient. Section 8. There has been prepared and presented to the Board a proposed form of market agent agreement(hereinafter referred to as the"Market Agent Agreement") relating to the performance of certain duties with respect to any Series of 2003 Bonds while such Series of 2003 Bonds bears interest at an auction rate, such Market Agent Agreement to be entered into with one or more market agents(each an"Market Agent" and hereinafter collectively referred to as the"Market Agents"), which Market Agent Agreement may be executed and delivered in the event that one or more Series of 2003 Bonds is issued in an auction rate mode. The Authorized Officer is hereby authorized to execute and deliver one or more Market Agent Agreements on behalf of the County, in substantially such form, with such changes therein„ deletions therefrom and additions thereto as the Authorized ricer, in consultation with County Counsel shall approve, which approval shall be conclusively evidenced by the execution and delivery of the Market Agent Agreement. The Authorized Officer is further authorized to remove and replace Market Agents in the future as such officer deems necessary or convenient. Section 9. If the Authorized Officer determines that it will be advantageous to the County to purchase municipal bond insurance with respect to some or all of the 2003 Bonds or Swap Agreements, the Authorized Officer is hereby authorized to purchase such insurance at market rates. Section 10. In the event this Board fails or neglects to make appropriations for transfer in respect of its obligation to pay the 2003 Bonds, the Auditor-Controller of the County is hereby authorized and directed, pursuant to Section 31584 of the Retirement Law, to transfer DOCSSFt:672642.2 6 from any money available in any fund in the County treasury amounts necessary to make such payments with such transfer having the same force and effect as an appropriation by this Board. Section 11. The Authorized Officer of the County is hereby authorized and directed to enter into one or more Purchase Contracts with respect to the 2003 Bonds substantially in the form presented to this meeting(the"Purchase Contract")with Lehman Brothers, Morgan Stanley& Co. Incorporated, Bear, Stearns&Co. Inc., and Merrill Lynch& Co. (the"Underwriters"),with such changes therein as the Authorized Officer, in consultation with County Counsel shall approve as evidenced by the execution thereof, provided, however, that the underwriting fee payable by the County pursuant to the Purchase Contract shall not exceed the sum of one percent (1.00°/0) of the principal amount of the 2003 Bonds and the principal amount of the 2003 Bonds and the interest rates thereon shall be limited as specified in Section 3 hereof. Section 12. The Preliminary Official Statement of the County, in the form presented to this meeting,is hereby approved and the same may be used and is hereby authorized to be used and distributed in the market by the Underwriters incident to the marketing of the 2003 Bonds. The Authorized Officer is hereby authorized(a)to make such changes in such form of the Preliminary Official Statement as either of them, in consultation with County Counsel and the Underwriters, shall determine to be appropriate, and(b) on behalf of the County, to deem such Preliminary Official Statement"final"pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the"Rule"). The appropriate officers of the County are, and . each of them hereby is, authorized and directed to prepare a final Official Statement, with such additional information as may be permitted to be excluded from the Preliminary Official Statement pursuant to the Rule. The final Official Statement shall be executed and delivered in the name and on behalf of the County by the Authorized Officer. Section 13. The Continuing Disclosure Agreement of the County, in substantially the form presented to this meeting, is hereby approved and the same may be used and is hereby authorized to be used and distributed in the market by the Underwriters incident to the marketing of the 2003 Bonds. The Authorized Officer is hereby authorized to execute and deliver the Continuing Disclosure Agreement on behalf of the County, substantially in the form presented to this meeting,with such changes therein, deletions therefrom and additions thereto as the Authorized Officer in consultation with County Counsel shall approve, such approval to be conclusively evidenced by the execution and delivery of the Continuing Disclosure Agreement. Section 14. The Board hereby authorizes the Authorized Officer to enter into one or more investment agreements on behalf of the County providing for the investment of moneys in the funds and accounts created under the Trust Agreement, as the Authorized Officer deems appropriate, including the amendment, termination or revision of any existing investment agreements(collectively,the"Investment Agreement"). The Board hereby finds and determines pursuant to Government Code Section 5922, that the Investment Agreement and Escrow Agreement will reduce the amount and duration of interest rate risk with respect to amounts invested pursuant to such agreements. The Authorized Officer is hereby authorized and directed to execute and deliver the Investment Agreement and any other related agreement or agreements on behalf of the County as may be approved by the Authorized Officer, such approval to be conclusively evidenced by the execution and delivery of such agreement or agreements. Any DocssFi.671642.2 7 termination amounts required to be paid by the County with respect to the Investment Agreement shall be paid from proceeds of the 2043 Bonds or amounts invested pursuant to the Investment Agreement. Any termination amounts or up front payments received with respect to the Investment Agreement will be applied as determined by the Authorized Officer. Section 15. The supervisors, officers and employees of the County are hereby authorized and directed,jointly and severally,to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. The Chair of the Board of Supervisors, the Clerk of the Board, the County Administrator and the Director, Capital Facilities and Debt Management, in her official capacity and as designee of the County Administrator(the"Director"), and the other officers and employees of the County are hereby authorized and directed to execute and deliver any and all documents, certificates and representations, including, but not limited to, signature certificates, no-litigation certificates and certificates concerning the official statement describing the Bonds, necessary or desirable to accomplish the transactions set forth above. If either the Chair of the Board or the Clerk of the Board and County Administrator is unavailable at the time the documents authorized herein are to be executed and attested, such documents may be executed by the Vice-Chair of the Board, a Deputy Clerk or the Director, respectively, with the same effect as if executed by the Chair of the Board or the Clerk of the Board and the County Administrator. Section 16. All actions heretofore taken by the supervisors, officers and agents of the County with respect to the execution and delivery of the Bonds and the other transactions authorized and contemplated herein are hereby approved, confirmed and ratified. DMSSFi:671642.2 8 Section 17. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the Board of Supervisors of the County of Contra Costa this 1st day of APRIL , 2003. . Chair of the Board of Supervisors County of Contra Costa, California [Sea]] ATTEST: John R. Sweeten, Clerk of the Board of Supervisors and County Administrator �j J � By Deputy Clerk of the Board f Supervisors of the County of Contra Costa, State of California nocssFi:671642.2 9