MINUTES OF THE FINANCING AUTHORITY BOARD
SAN JOSÉ, CALIFORNIA TUESDAY,
JUNE 19, 2001
The Financing Authority of the City of San Jose convened in Regular Session at 3:25 p.m. for a joint meeting with the City Council and the Redevelopment Agency in Council Chambers at City Hall.
Present: Board Members: Campos, Chavez, Cortesé, Dando, Diquisto, LeZotte, Reed, Shirakawa Jr., Williams, Yeager; Gonzales
Absent: Board Members: None
1.1 (a) Adoption of a resolution by the City of
San José Financing Authority:
(1) Authorizing the issuance of City of San
José Financing Authority, Tax-Exempt Lease Revenue Bonds, Series 2001F (“2001F
Bonds”) and Taxable Lease Revenue Bonds, Series 2001G (“2001G Bonds”)
(Convention Center Refunding Project) (collectively, “2001 Refunding Bonds”) in
the not-to-exceed aggregate principal amount of $205,000,000 to be sold at a
competitive sale; and
(2) Approving in substantially final form
and authorizing the execution of certain financing documents, including the
Trust Agreement, the Site and Facility Lease, Project Lease, and other related
documents and directing certain related actions in connection with the
financing for the 2001 Refunding Bonds; and
(3) Approving in substantially final form
the Official Notice Inviting Bids and the Preliminary Official Statement in
connection with the competitive sale of the 2001 Refunding Bonds, and other
related actions; and
(4) Authorizing the City Manager to
negotiate and execute an agreement with Public Resources Advisory Group for financial
advisory services in an amount not to exceed $125,000.
(b) Adoption of a resolution by the City
Council approving in substantially final form and authorizing the execution of
the Project Lease, the Site and Facility Lease, the Second Amended and Restated
Reimbursement Agreement, and other related documents, and directing certain
related actions in connection with the financing for the 2001 Refunding Bonds.
(c) Adoption
of a resolution by the Redevelopment Agency approving in substantially final form
and authorizing the execution of the Second Amended and Restated Reimbursement
Agreement.
(Finance/Redevelopment
Agency)
[Finance and
Infrastructure Committee referral 6/13/01 – Item 3.3(c)]
Documents Filed: (1) Supplemental Memorandum from Director of Finance Scott P. Johnson, and Director of Redevelopment Agency Finance & Administration David Baum, dated June 12, 2001, attaching a copy of the draft Preliminary Official Statement. (2) Memorandum from Director of Finance Scott P. Johnson, and Director of Redevelopment Agency Finance & Administration, David Baum, dated May 29, 2001, recommending the adoption of said resolutions. (3) Memorandum from Director of Finance, Scott P. Johnson, dated June 12, 2001, attaching Convention Center Refunding Project documents for filing in the public packet for the June 19, 2001 City Council meeting.
Discussion/Action:
Director of Finance Scott P. Johnson and Director of Redevelopment Agency
Finance & Administration David Baum, summarized the financing proposal,
which included a slide presentation on the refunding structure for the 2001G
Bonds using a General Fund lease secured by the Convention Center, expected
debt service savings as of June 6, 2001 averaging an expected interest rate of
5.2%, and the expected sources and uses of funds with respect to the Bonds.
Directors Johnson and Baum discussed the plan of finance, identified the bond
financing documents, acknowledged the financing team participants, and reviewed
the financing schedule. Pointing out key dates that are targeted until the
closing of the bonds – June 19, 2001, June 28, 2001, July 10, 2001 and Bond
Closing on July 25, 2001 – they stated the City could obtain, under current
market conditions, significant debt service savings by issuing refunding bonds prior
to September 1, 2001, with a notice of intent to the Trustee of the City’s
desire to exercise the optional redemption of the 1993 Bonds at least 30 days
ahead of the call date and by closing the financing no later than August 1,
2001, thereby maximizing savings without incurring interest rate risk. As a
point of clarification, Director Johnson stated the aggregate amount for the
issuance of the 2001F Bonds and the 2001G Bonds of the principal is greater
than some of the figures detailed in the financing documents, therefore, to
successfully complete the refunding, it is necessary that the City and the
Agency have the flexibility to issue additional bonds, up to the requested
maximum amount, to all for changing market conditions and/or investor preferences.
Directors Johnson and Baum recommended Council/Agency approve the staff’s
recommendation to proceed with the issuance of the bonds. Upon motion by
Authority Board Member Dando, seconded by Authority Board Member Cortesé and
unanimously carried, the Finance and Infrastructure Committee Report and
actions of June 13, 2001 (Partial) for the Convention Center Refunding were
accepted; Resolution No. SJFA-51, entitled: “Resolution of the City of San José
Financing Authority Authorizing the Issuance of Lease Revenue Bonds in the
Initial Aggregate Principal Amount of Not to Exceed $200,000,000 in Connection
With the Refinancing of the Convention Center, Authorizing and Directing
Execution of a Trust Agreement and Certain Financing Documents, Authorizing the
Competitive Sale of Bonds, Approving an Official Statement, and Authorizing
Other Related Actions”; Resolution No. 70449, entitled: “Resolution of the
Council of the City of San José Approving, Authorizing, and Directing Execution
of Certain Financing Documents and Directing Certain Related Actions in
Connection With the Refinancing of the Convention Center Project”; and
Redevelopment Agency Board Resolution No. 5189 approving in substantially final
form and authorizing the execution of the Second Amended and Restated
Reimbursement Agreement, were adopted.
Vote: 11-0-0-0.
The Financing Authority of the City of San José adjourned at 3:40 p.m.
RON GONZALES, MAYOR
ATTEST:
PATRICIA L. O’HEARN,
CITY CLERK