2009-44 RESOLUTION NO. 2009-44
CITY COUNCIL
Of THE
CITY OF GgAND TERRACE`
A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT
AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE
SELLER'S PROPOSITION IA RECEIVABLE FROM THE STATE; AND
DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, pursuant to Section 25.5 of Article XIII of the California Constitution and
Chapter 14XXXX of the California Statutes )f 2009 (Assembly Bill No. 15), as amended (the
"Act"), certain local agencies within the State of California (the "State") are entitled to receive
certain payments to be made by the State on or before June 30, 2013, as reimbursement for
reductions in the percentage of the total amount of ad valorem property tax revenues allocated to
such local agencies during the State's 2009.10 fiscal year (the "Reimbursement Payments"),
which reductions have been authorized pursuant to Sections 100.05 and 100.06 of the California
Revenue and Taxation Code;
WHEREAS, the City of Grand Terrace, a local agency within the meaning of Section
6585(f) of the California Government Code (the "Seller"), is entitled to and has determined to
�- sell all right,title and interest of the Seller in End to its"Proposition 1 A receivable", as defined in
Section 6585(g) of the California Government Code (the "Proposition IA Receivable"), namely,
the right to payment of moneys due or to become due to the Seller pursuant to Section
25.5(a)(1)(B)(iii) of Article XIII of the California Constitution and Section 100.06 of the
California Revenue and Taxation Code, it order to obtain money to fund public capital
improvements or working capital;
WHEREAS, the Seller is authorized to sell or otherwise dispose of its property as the
interests of its residents require;
WHEREAS, the California Statewide Communities Development Authority, a joint
exercise of powers authority organized and existing under the laws of the State (the
"Purchaser"), has been authorized pursuant to Section 6588(x) of the California Government
Code to purchase the Proposition lA Receiva le;
WHEREAS, the Purchaser desires tc purchase the Proposition IA Receivable and the
Seller desires to sell the Proposition I Receivable pursuant to a purchase and sale agreement by
and between the Seller and the Purchaser in the form presented to this City Council (the "Sale
Agreement") for the purposes set forth herein;
WHEREAS, in order to finance the pL rchase price of the Proposition I Receivable from
the Seller and the purchase price of other Prcposition 1A Receivables from other local agencies,
the Purchaser will issue its bonds (the "Bends") pursuant to Section 6590 of the California
Government Code and an Indenture (the "Indenture"), by and between the Purchaser and Wells
(� Fargo Bank,National Association, as trustee ',the "Trustee"), which Bonds will be payable solely
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from the proceeds of the Seller's Proposition IA Receivable and other Proposition IA
Receivables sold to the Purchaser by local agencies in connection with the issuance of the
Bonds;
WHEREAS, the Seller acknowledges that (i) any transfer of its Proposition IA
Receivable to the Purchaser pursuant to the Sale Agreement shall be treated as an absolute sale
and transfer of the property so transferred anti not as a pledge or grant of a security interest by
City of Grand Terrace to secure a borrowing, (ii) any such sale of its Proposition IA Receivable
to the Purchaser shall automatically be perfected without the need for physical delivery,
recordation, filing or further act, (iii) the previsions of Division 9 (commencing with Section
9101) of the California Commercial Code ar.d Sections 954.5 to 955.1 of the California Civil
Code, inclusive, shall not apply to the sale of its Proposition 1A Receivable, and (iv) after such
transfer, the Seller shall have no right, title, or interest in or to the Proposition IA Receivable
sold to the Purchaser and the Proposition IA Receivable will thereafter be owned, received, held
and disbursed only by the Purchaser or a trustce or agent appointed by the Purchaser;
WHEREAS, the Seller acknowledges that the Purchaser will grant a security interest in
the Proposition IA Receivable to the Trustee and any credit enhancer to secure payment of the
Bonds;
WHEREAS, a portion of the proceeds of the Bonds will be used by the Purchaser to,
among other things,pay the purchase price of ihe Proposition IA Receivable;
WHEREAS, the Seller will use the proceeds received from the sale of the Proposition IA
Receivable for any lawful purpose as permitted under the applicable laws of the State;
NOW THEREFORE, the City Counc'1 of the City of Grand Terrace hereby resolves as
follows:
Section 1. All of the recitals ret forth above are true and correct, and this City
Council hereby so finds and determines.
Section 2. The Seller hereby authorizes the sale of the Proposition IA Receivable
to the Purchaser for a price equal to the amot nt certified as the Initial Amount (as defined in the
Sale Agreement) by the County auditor pu suant to the Act. The form of Sale Agreement
presented to the City Council is hereby a proved. An Authorized Officer (as set forth in
Appendix A of this Resolution, attached he-eto and by this reference incorporated herein) is
hereby authorized and directed to execute an deliver the Sale Agreement on behalf of the Seller,
which shall be in the form presented at this ineting.
Section 3. Any Authorized O ficer is hereby authorized and directed to send, or
to cause to be sent, an irrevocable written instruction to the State Controller (the "Irrevocable
Written Instruction") notifying the State of the sale of the Proposition IA Receivable and
instructing the disbursement pursuant to Section 6588.6(c) of California Government Code of the
Proposition IA Receivable to the Trustee, on behalf of the Purchaser, which Irrevocable Written
Instruction shall be in the form presented at tFis meeting.
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Section 4. The Authorized Officers and such other Seller officers, as appropriate,
are hereby authorized and directed,jointly and severally, to do any and all things and to execute
and deliver any and all documents, including but not limited to, if required, appropriate escrow
instructions relating to-the delivery into escrow of executed documents prior to the closing of the
Bonds, and such other documents mentioned in the Sale Agreement or the Indenture, which any
of them may deem necessary or desirable in order to implement the Sale Agreement and
otherwise to carry out, give effect to and comply with the terms and intent of this Resolution; and
all such actions heretofore taken by such office,-rs are hereby ratified, confirmed and approved.
Section 5. All consents, approvals, notices, orders, requests and other actions
permitted or required by any of the documen s authorized by this Resolution, whether before or
after the sale of the Proposition IA Receivable or the issuance of the Bonds, including without
limitation any of the foregoing that may be necessary or desirable in connection with any default
under or amendment of such documents, may be given or taken by an Authorized Officer
without further authorization by this City Council, and each Authorized Officer is hereby
authorized and directed to give any such consent, approval, notice, order or request, to execute
any necessary or appropriate documents or amendments, and to take any such action that such
Authorized Officer may deem necessary or desirable to further the purposes of this Resolution.
Section 6. The City Council acknowledges that, upon execution and delivery of
the Sale Agreement, the Seller is contractually obligated to sell the Proposition IA Receivable to
the Purchaser pursuant to the Sale Agreemen-; and the Seller shall not have any option to revoke
its approval of the Sale Agreement or to determine not to perform its obligations thereunder.
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Section 7. This Resolution shall take effect from and after its adoption and
approval.
PASSED AND ADOPTED b,i the City Council of the City of Grand Terrace,
State of California,this 27th day of Octob ar , 2009, by the following vote:
AYES: Councilmembers Cortes, Miller and Stanckiewitz; Mayor Pro.Tem Garciai-and
Mayor Ferre
NOES: None
ABSENT: None
r
Mayor
Attest:
City Clerk
Approved as to form
SELLER'S COUNSEL
By
Dated: 24 CI
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