2024-01 Financing of Revenue Bonds NE Corner of Highway 101 and La Costa AvenueRESOLUTION NO. FA-2024-01
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
ENCINITAS PUBLIC FINANCING AUTHORITY
AUTHORIZING THE ISSUANCE OF ITS REVENUE BONDS
IN THE ORIGINAL PRINCIPAL AMOUNT OF NOT TO
EXCEED $6,000,000 IN CONNECTION WITH THE
FINANCING OF THE ACQUISITION OF THE CERTAIN
REAL PROPERTY AUTHORIZING AND DIRECTING
EXECUTION OF AN INDENTURE OF TRUST, A LEASE
AGREEMENT, AN AGENCY AGREEMENT, A BOND
PURCHASE AGREEMENT AND AUTHORIZING AN
OFFICIAL STATEMENT AND OTHER OFFICIAL
ACTIONS AND EXECUTION OF RELATED DOCUMENTS
WHEREAS, the Encinitas Public Financing Authority (the “Authority”) has been formed
pursuant to a Joint Exercise of Powers Agreement by and among the City of Encinitas (the “City”),
Cardiff Sanitation District, Encinitas Fire Protection District, Encinitas Sanitation District and the
San Dieguito Water District and is authorized under said Agreement and under the laws of the
State of California to finance the acquisition and construction of public capital improvements for
the City; and
WHEREAS, the City has requested the Authority to issue its bonds for the purpose of
providing funds to enable the City to finance certain improvements of benefit to the City,
specifically the costs of acquisition of certain real property within the City, known as Assessor’s
Parcel Numbers 216-042-01-00 and 216-042-05-00 (the “Project”); and
WHEREAS, to provide such financing for the Project, the Authority proposes to issue its
lease revenue bonds in an aggregate principal amount of not to exceed $6,000,000 under the
provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of
the Government Code of the State of California (the “Act”), such Bonds may be issued in one or
more series in such amounts as may be determined by the Authority as stated herein, and which
are proposed to be payable from the revenues to be derived by the Authority from lease payments
to be made by the City for the lease of certain facilities pursuant to that certain Lease Agreement
relating to the financing of the Project (the “Lease Agreement”), and the lease and sublease of the
Leased Premises (as defined below); and
WHEREAS, the City Council has determined that the Project property should be the
leased assets under the Lease Agreement (the “Leased Premises”); and
WHEREAS, a portion of the proceeds of the Bonds will be deposited in the Acquisition
and Construction Fund to be established pursuant to the Indenture of Trust which is hereinafter
approved, and will be applied by the Authority and the City to the acquisition, construction and
installation of the Project pursuant to an Agency Agreement between the Authority and the City;
and
26353.00023\42039402.4
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WHEREAS, Hilltop Securities Inc. (the “Underwriter”) has proposed to purchase and
underwrite the Bonds and has presented to the Authority a form of Bond Purchase Agreement for
the Bonds, to be entered into by and among the Authority, the City, and the Underwriter (the “Bond
Purchase Agreement”) and there is also presented the Authority with a proposed form of Official
Statement describing the Bonds, to be used in connection with the marketing thereof by the
Underwriter; and
WHEREAS, Section 5852.1 of the California Government Code (“Section 5852.1”)
provides that the Authority shall obtain from an underwriter, financial advisor, or private lender
and disclose, in a meeting open to the public prior to authorization of the issuance of the Bonds,
good faith estimates of (a) the true interest cost of the Bonds, (b) the finance charge of the Bonds,
meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the
Bonds received less the finance charge described above and any reserves or capitalized interest
paid or funded with proceeds of the Bonds, and (d) the sum total of all debt service payments on
the Bonds calculated to the final maturity of the Bonds plus the fees and charges paid to third
parties not paid with the proceeds of the Bonds; and
WHEREAS, in accordance with Section 5852.1, the Authority has obtained such good
faith estimates from Urban Futures, Inc., the Authority’s and City’s municipal advisor (the
“Municipal Advisor”), and such estimates are disclosed in Exhibit A attached hereto; and
WHEREAS, the Board of Directors of the Authority (the “Board”) has duly considered
such transactions and has determined that it approves said transactions in the public interests of
the City and the Authority.
NOW THEREFORE, BE IT RESOLVED by the Board of the Encinitas Public
Financing Authority as follows:
Section 1. Findings and Determinations.
A. Pursuant to the Act, the Board hereby finds and determines that the issuance of the
Bonds will provide a more efficient delivery of governmental services within the
City and will result in significant public benefits within the contemplation of
Section 6586 of the Act.
B. The Board finds and determines that the above recitals are true and correct and that
the fair rental value of Leased Premises exceeds the present value of Lease
Payments to be made under the Lease Agreement.
C. The Board finds that a negotiated sale with the Underwriter will result in time
savings and sale effectiveness for the Bonds.
Section 2. Issuance of Bonds. The Board hereby authorizes the issuance of the Bonds
for the purpose of funding the Project under and pursuant to the Act, in the maximum original
principal amount not to exceed $6,000,000. The Bonds may be issued in one or more series.
Section 3. Approval of Financing Documents. The Board hereby approves each of the
following documents in substantially the respective forms on file with the Secretary, together with
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such additions thereto and changes therein as Bond Counsel shall deem necessary, desirable, or
appropriate, the execution of which by the Chairperson, the Vice Chairperson, the Executive
Director, or the Treasurer (each an “Authorized Officer”) shall be conclusive evidence of the
approval of any such additions and changes:
A. that certain Indenture of Trust, by and between the Authority and U.S. Bank Trust
Company, National Association, as trustee (the “Trustee”), establishing the terms
and conditions pertaining to the issuance, sale, and administration of the Bonds (the
“Indenture of Trust”);
B. the Lease Agreement, by and between the Authority and the City relating to the
lease and sublease of the Leased Premises;
C. the preliminary official statement describing the City, the Authority, and the Bonds
(the “Preliminary Official Statement”);
D. the Agency Agreement, by and between the Authority and the City;
E. The Continuing Disclosure Certificate relating to the Bonds;
F. The Assignment Agreement, by and between the Authority and the Trustee; and
G. the Bond Purchase Agreement, by and among the Authority, the Community
Facilities District and the Underwriter (the “Bond Purchase Agreement”), relating
to the purchase of the 2024 Authority Bonds by the Underwriter and the purchase
of the Special Tax Refunding Bonds by the Authority.
The Authorized Officers are each, acting alone, hereby authorized and directed to execute,
and the Secretary is hereby authorized and directed to attest and affix the seal of the Authority to,
the final form of each of the foregoing documents and agreements for and in the name and on
behalf of the Authority, with such addition and changes thereto as deemed necessary, desirable or
appropriate by Bond Counsel. The Board hereby authorizes the delivery and performance of each
of the foregoing documents and agreements.
Section 4. Sale of Bonds. The Board hereby approves the sale of the Bonds by the
Authority by negotiated sale with the Underwriter, pursuant to the Bond Purchase Agreement in
substantially the form on file with the Secretary, together with such additions thereto and changes
therein as Bond Counsel shall deem necessary, desirable, or appropriate, the execution of which
by an Authorized Officer shall be conclusive evidence of the approval of any such additions and
changes. The Authorized Officers are hereby each, acting alone, authorized and directed to
execute the final form of the Bond Purchase Agreement for and in the name and on behalf of the
Authority upon the submission of an offer by the Underwriter to purchase the Bonds, which offer
is consistent with the requirements of this Resolution. The amount of Underwriter’s discount for
the Bonds shall be not more than 0.80% of the aggregate principal amount thereof, and the true
interest cost of the Bonds shall not exceed four and seventy-five hundredths percent (4.75%).
Section 5. Official Statement; Continuing Disclosure. The Board hereby approves the
preparation of, and hereby authorizes the Executive Director or the Treasurer to deem final within
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the meaning of Rule 15c2-12 of the Securities and Exchange Commission except for permitted
omissions, a preliminary form of Official Statement of the Bonds. The Executive Director and the
Treasurer are each, acting alone, hereby authorized to execute the final Official Statement in the
name and on behalf of the Authority, including any modifications resulting from additions thereto
and changes therein as Bond Counsel shall deem necessary, desirable, or appropriate, with the
execution of the final Official Statement by an Authorized Officer to be conclusive evidence of
the approval of any such additions and changes. The Executive Director or the Treasurer are each,
acting alone, further authorized to sign on behalf of the Authority the Continuing Disclosure
Certificate with respect to the financing, in such form as may be approved by Bond Counsel.
Section 6. Bond Purchase Agreement. The Authorized Officer are each, acting alone,
hereby authorized and directed to negotiate and evidence the Authority’s acceptance of the offer
made by a Bond Purchase Agreement by executing and delivering such Bond Purchase Agreement
in substantially the form on file with the Secretary, together with such additions or changes thereto
as deemed necessary, beneficial, or desirable by Bond Counsel, such approval to be conclusively
evidenced by the execution and delivery thereof.
Section 7. Appointment of Professionals.
(a) Underwriter. Hilltop Securities Inc. is hereby selected as the Underwriter for the
Bonds.
(b) Municipal Advisor. Urban Futures, Inc. is hereby appointed to serve as the
municipal advisor to the Authority in connection with the issuance of the Bonds.
(c) Bond and Disclosure Counsel. Best Best & Krieger LLP is hereby appointed to
serve as Bond and Disclosure Counsel to the Authority in connection with the
issuance of the Bonds.
(d) Trustee. U.S. Bank Trust Company, National Association is hereby selected as the
Trustee under the Indenture of Trust.
Section 8. Official Actions. The Authorized Officers, the Secretary, and any and all
other officers of the Authority are hereby authorized and directed, for and in the name and on
behalf of the Authority, to do any and all things and take any and all actions, including obtaining
title insurance for the Leased Premises, obtaining a rating on the Bonds, and including execution
and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents,
instruments of conveyance, warrants and other documents, which they, or any of them, may deem
necessary or advisable in connection with the issuance and sale of the Bonds.
Section 9. Effective Date. This Resolution shall take effect from and after the date of
its passage and adoption.
NOW THEREFORE, BE IT FURTHER RESOLVED that this action is exempt from
the provisions of the California Environmental Quality Act (CEQA) pursuant to Section
15378(b)(5) of the CEQA Guidelines, as an organizational or administrative activity of
government that will not result in a direct or indirect physical change in the environment.
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PASSED, APPROVED AND ADOPTED this 17th day of April, 2024 by the Board of
Directors of the Encinitas Public Financing Authority, City of Encinitas, State of California.
Tony Kranz, Chair
ATTEST:
Kathy Hollywood, Board Secretary
APPROVED AS TO FORM:
Tarquin Preziosi, Board Attorney
CERTIFICATION: I, Kathy Hollywood, Board Secretary of the Encinitas Public Financing
Authority, do hereby certify under penalty of perjury that the foregoing Resolution was duly
adopted at a regular meeting of the Board of Directors of the Encinitas Public Financing
Authority on the 17th day of April, 2024, by the following vote:
AYES: Blackwell, Ehlers, Hinze, Kranz, Lyndes
NOES: None
ABSENT: None
ABSTAIN: None
Kathy Hollywood, Board Secretary
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EXHIBIT A
Good Faith Estimates
The good faith estimates set forth herein are provided with respect to the Bonds in
accordance with California Government Code Section 5852.1. Such good faith estimates have
been provided to the Authority by the Municipal Advisor in consultation with the Underwriter.
Principal Amount. The Municipal Advisor has informed the Authority that, based on the
financing plan and current market conditions, its good faith estimate of the aggregate principal
amount of the Bonds to be sold is $5,715,000 (the “Estimated Principal Amount”).
True Interest Cost of the Bonds. The Municipal Advisor has informed the Authority that,
assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest
rates prevailing at the time of preparation of such estimate, its good faith estimate of the true
interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the
respective principal and interest payment dates to the purchase price received for the Bonds, is
4.43%.
Finance Charge of the Bonds. The Municipal Advisor has informed the Authority that,
assuming that the Estimated Principal Amount of Bonds is sold, and based on market interest rates
prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge
for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated
with the Bonds), is $195,720.
Amount of Proceeds to be Received. The Municipal Advisor has informed the Authority
that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market
interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the
amount of proceeds expected to be received by the Authority for the sale of the Bonds, less the
finance charge of the Bonds, as estimated above, and any reserve fund paid or funded with
proceeds of the Bonds $5,726,029.
Total Payment Amount. The Municipal Advisor has informed the Authority that, assuming
that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates
prevailing at the time of preparation of such estimate, its good faith estimate of the total payment
amount, which means the sum total of all payments the Authority will make to pay debt service
on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds
of the Bonds, calculated to the final maturity of the Bonds, is $10,754,497.
The foregoing estimates constitute good faith estimates only. The actual principal amount
of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount
of proceeds received therefrom and total payment amount with respect thereto may differ from such
good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date
assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being
different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being
different than the amortization assumed for purposes of such estimates, (d) the actual market
interest rates at the time of sale of the Bonds being different than those estimated for purposes of
such estimates, (e) other market conditions, or alterations in the financing plan or finance charges,
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or a combination of such factors. The actual date of sale of the Bonds and the actual principal
amount of Bonds sold will be determined by the Authority based on the timing of the need for
proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend
on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also
depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected
by economic and other factors beyond the control of the Authority.
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