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2011 03 15 FA5 S CEhl OF ThI�'94. FINANCING AUTHORITY AGENDA CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting TUESDAY, MARCH 15, 2011 — 4:00 P.M. Beginning Resolution No. FA 2011-001 CALL TO ORDER Roll Call: Board Members: Evans, Franklin, Henderson, Sniff, and Chairman Adolph PUBLIC COMMENT At this time members of the public may address the Financing Authority on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1. APPROVAL OF MINUTES OF FEBRUARY 15. 2011 CONSENT CALENDAR NOTE: Consent Calendar items are considered to be routine in nature and will be approved by one motion. 1 . RECEIVE AND FILE TREASURER'S REPORT DATED JANUARY 31. 2011 Financing Authority Agenda 1 MARCH 15, 2011 2. RECEIVE AND FILE REVENUE & EXPENDITURES REPORT DATED JANUARY 31, 2011 3. ADOPTION OF A RESOLUTION AMENDING THE INVESTMENT POLICY OF THE CITY OF LA QUINTA FOR FISCAL YEAR 2010-2011 BUSINESS SESSION — NONE CHAIR AND BOARD MEMBERS' ITEMS — NONE PUBLIC HEARINGS For all Public Hearings on the agenda, a completed "request to speak" form must be filed with the City Clerk prior to consideration of that item. 1. JOINT PUBLIC HEARING AMONG THE CITY COUNCIL OF THE CITY OF LA QUINTA, THE LA QUINTA REDEVELOPMENT AGENCY AND THE LA QUINTA FINANCING AUTHORITY TO CONSIDER RESOLUTIONS REGARDING THE ISSUANCE OF REDEVELOPMENT PROJECT AREAS 1 AND 2 TAXABLE BONDS AND RELATED DOCUMENTS A. RESOLUTION ACTION ADJOURNMENT The next regular meeting of the Financing Authority will be held on April 19, 2011 at 4:00 p.m, in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Financing Authority meeting of March 15, 2011, was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 111, on M4.4,<kit boll DATED: 03 • Il � ZOI( 5 A41 N+ Xd l.04 4' VERONICA J. IMNTECINO, City Clerk City of La Quinta, California Financing Authority Agenda 2 MARCH 15, 2011 Public Notice Any writings or documents provided to a majority of the Financing Authority regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 75-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. Financing Authority Agenda 3 MARCH 15, 2011 a 04 u S io �FM OF'CKC9w COUNCIL/RDA MEETING DATE: March 15, 2011 ITEM TITLE: Receive and File Treasurer's Report as of January 31, 2011 RECOMMENDATION: It is recommended the La Quinta Financing Authority: Receive and file. AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA Wdtt 4 40 Quiftraj COUNCIL/RDA MEETING DATE: March 15, 2011 ITEM TITLE: Receive and File Revenue and Expenditure Report for January 31, 2011 RECOMMENDATION: Receive and File BACKGROUND AND OVERVIEW: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Receive and File the January 31, 2011 Statement of Revenue and Expenditures for the La Quinta Financing Authority. yResectfully submitted, M. Falconer, Finance Director Approved for Submission by: rllLs� Thomas P. Genovese, Executive Director Attachment: 1. Revenue and Expenditures Report, January 31, 2011 LA OUINTA FINANCING AUTHORITY REVENUE DETAIL 07/01/2010 - 0113112011 ADJUSTED BUDGET RECEIVED ATTACHMENT 1 REMAINING % BUDGET RECEIVED DEBT SERVICE REVENUE: Contractual Services Fees Non Allocated Interest Rental Income Transfer In TOTAL DEBT SERVICE CAPITAL IMPROVEMENT REVENUE: Pooled Cash Allocated Interest Non Allocated Interest TOTAL CIP REVENUE TOTAL FINANCING AUTHORITY 15,800.00 6,807.00 8,993.00 43.080% 0.00 0.00 0.00 0.000% 672,525.00 552,090.00 120,435.00 82.090% 5,915,131.00 3,844,965.63 2,070,165.37 65.000% 6,603,456.00 4,403,862.63 2,199,593.37 66.690% 0.00 0.00 0.00 0.000% 0.00 0.00 0.00 0.000% 0.00 0.00 0.00 0.000% 6,603,456.00 4,403,862.63 2,199,593.37 66.690% %PA LA DUINTA FINANCING AUTHORITY EXPENDITURE SUMMARY ADJUSTED 1 01/31/11 REMAINING BUDGET EXPENDITURES ENCUMBERED BUDGET DEBT SERVICE EXPENDITURES SERVICES BOND PRINCIPAL - 1996 BOND PRINCIPAL - 2004 BOND INTEREST - 1996 BOND INTEREST -20N TRANSFER OUT CAPITAL IMPROVEMENT EXPENDITURES BOND ISSUANCE COSTS TRANSFER OUT 12,800.00 8,557.00 0.00 4, 243.00 420,000A0 420,000.00 0.00 0.00 1,740,000.W 1,740,000.00 0.00 0.00 252,525.00 132,090.00 000 120,435A0 4,175,131.00 2.104,965,63 0 W 2,070,165.37 000 0.00 0,00 0,00 TOTAL DEBT SERVICE 6,600,456 00 4,42.194,843,3/ 0,00 0,00 000 0.00 0.00 0,00 0.00 000 TOTAL CAPITAL IMPROVEMENT TOTAL FINANCING AUTHORITY 3 ri� 2 a4 XP Qum rry .y OF TKf' COUNCIL/RDA MEETING DATE: March 15, 2011 ITEM TITLE: Adoption of a Resolution Amending the Investment Policy of the City of La Quinta for Fiscal Year 2010-201 1 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Adopt a Resolution of the City council amending the Investment Policy for the La Quinta Financing Authority for Fiscal Year 2010-2011. PLEASE SEE CONSENT CALENDAR ITEM ON CITY COUNCIL AGENDA RESOLUTION NO. FA 2011- A RESOLUTION OF THE LA QUINTA FINANCING AUTHORITY AMENDING THE CITY OF LA QUINTA INVESTMENT POLICY FOR FISCAL YEAR 2010-2011 WHEREAS, policies were adopted by the La Quinta Financing Authority in Resolution No. 2010-001 on June 15, 2010; and WHEREAS, the general purpose of the Investment Policy is to provide the rules and standards users must follow in investing funds of the City of La Quinta; and WHEREAS, the primary objectives, in order of priority, of the City of La Quinta's investment activity shall be: Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. The investment portfolio shall be designed with the objective of attaining a market rate of return or iy eld throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. WHEREAS, authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish and implement written procedures for the operation of the City's investment program consistent with the Investment Policy for Fiscal Year 2010-2011; and WHEREAS, the Investment Policy may be amended from time to time as considered necessary. NOW, THEREFORE, BE IT RESOLVED by the La Quinta Financing Authority to adopt the amendments to the Fiscal Year 2010-2011 Investment Policy (Exhibit A). Resolution No. FA 2011- Amendment to the Investment Policy Adopted: March 15, 2011 Page 2 of 3 PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta Financing Authority, held on this 15th day of March, 2011 by the following vote, to wit: AYES: NOES: ABSTAIN: ABSENT: DON ADOLPH, Chairman La Quinta Financing Authority ATTEST: VERONICA J. MONTECINO, CMC, Secretary La Quinta Financing Authority (SEAL) APPROVED AS TO FORM: M. KATHERINE JENSON, Authority Counsel La Quinta Financing Authority EXHIBIT A Amended Language — in Strike out and bold Section V Annually, the Treasurer shall project the amount of funds not expected to be disbursed within five ten years. For FY 2010/201 1, the amount of such funds is projected to be $4 $30 million. Funds up to that amount may be invested in U.S. Treasury bills, notes and bonds, Local Agency Obligations, and California Local Agency Obligations maturing between 3 and b 10 years. For all other funds, investments are limited to three years maximum maturity, with no more than 25% of surplus funds invested in maturities exceeding two years and less than three years Section X and Appendix A X PERMISSIBLE DEPOSITS AND INVESTMENTS California Local Agency Obligations as an Investment Permissible deposits and investments are summarized below. A more comprehensive list is included in Appendix A. Permissible Investments and Limitations Maximum Maximum Restrictions (See Appendix A for Additional Allocation Maturity Information) Checking & Savings Accounts FDIC Insured & Sweep o 85 /o Portfolio Current / Sweep Account: U.S. Treasuries Accounts On Demand and/or GSE's <= $250,000, Certificates of Deposit 60% Portfolio 3 Years including interest per institution U.S. Treasury Bills, Notes and Bonds, and 4-$4'0000;000 <=$30,0000,000 Government National Mortgage Association (GNMA) 100% Portfolio S 10Years maturing 3.610 Securities Yrs <40000,000 <=$30,0000,000 Local Agency Bonds/California Local Agency 30% Portfolio Wears maturing 3-6 10 Yrs Obligations Long termA, A A- or better Permissible Investments and Limitations Maximum Maximum Restrictions (See Appendix A for Additional Allocation Maturity Information) U.S. Government Agency Securities and Federal Government Securities (except collateralized mortgage obligations (CMO's) or structured notes which contain embedded rate options): - Federal National Mortgage Association (FNMA) $20,000,000 3 Years - Federal Home Loan Bank Notes & Bonds (FHLB) $25,000,000 3 Years - Federal Farm Credit Bank (FFCB) $30,000,000 3 Years - Federal Home Loan Mortgage Corporation (FHLMC) $20,000,000 3 years Prime Commercial Paper including Temporary Liquidity 15% Portfolio 90 Days $5,000,000 per Guarantee Program (TLGP) issuer maximum. Local Agency Investment Fund (LAIF) 30% Portfolio Current / On Demand $40 million per account. Money market mutual funds regulated by the SEC that Current / Maintain $1 per consist only of US Treasury Securities or GSE's and o 20 /o Portfolio On Demand share par value maintain a par value of $1 per share $5,000,000 max Corporate Notes 10% 3 Years per issuer AA rated or better Corporate Notes -Temporary Liquidity Guarantee n 20% 3 Years $10,000,000 max per issuer, AA Program (TLGP) rated or better. Requires Professionally Managed Account 10% 3 Years City Council - Approved RFP Long -Term Scale S&P AAA, AA +, AA, AA-, A +, A Moody's Aaa, Aa 1, Aa2, Aa3, A 1, A2 Fitch AAA, AA+, AA, AA-, A+, A Appendix A Unauthorized Investments The City Treasurer will not be permitted to invest in the following types of investments (see Footnote 2 and "State Code Permitted Deposits And Investments Not Authorized By The City's Investment Policy", below). - Repurchase Agreements - Bankers Acceptances - Negotiable Certificates of Deposit - Mutual Funds other than money market mutual funds - Preferred and Common Stock - State and lea: Government Indebtedness - Asset Backed Securities - Reverse Repurchase Agreements - Derivatives The above list of unauthorized deposits and investments is not meant to be all-inclusive. Only those deposits and investments listed in the "Permissible Deposits and Investments" section of the Policy are permissible. 3. U.S. Treasury Bills, Notes, and Bonds and Government National Mortgage Associations (GNMA) securities - The City may invest in U.S. Treasury bills, notes, and bonds, and GNMA securities directly issued and backed by the full faith and credit of the U.S. Government. The City's Investment Policy limits investments in U.S. Treasury issues and GNMA's to 100% of the portfolio. The City's Investment Policy does not allow investments in lesal and state indebtedness New Section 10. Local Agency Bonds and California Local Agency Obligations - The City may invest in California local agency obligations pursuant to 56301(a) and 53601 (e). 53601 (a) pertains to investing in bonds issued by a local agency, department, board, agency or authority of the local agency. 53601 (e) pertains to investing in bonds and other defined indebtedness of a local agency or department, board, agency or authority of the local agency within the State of California. The City's Investment Policy limits investments in Local Agency Bonds and California Local Agency obligations to 30% of the portfolio with up to a ten year maximum maturity. In addition, The Agency obligations must be invested in the long term rating of A, A2, A or better by S&P, Moody's or Fitch is met. In the case of an initial public offering, including refinancings, the Treasurer may purchase directly from the Bond Underwriter. If the case of secondary issues, the Treasurer will rely of the approved Broker/Dealers. F s D V - `C'y of tk+E COUNCIL/RDA MEETING DATE: March 15, 2011 ITEM TITLE: A Joint Public Hearing Among the City Council of the City of La Quinta, the La Quinta Redevelopment Agency and the La Quinta Financing Authority to Consider Resolutions Regarding the Issuance of Redevelopment Project Areas 1 and 2 Taxable Bonds and Related Documents RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: 1. Open the Joint Public Hearing of the City Council, Redevelopment Agency and the Financing Authority, receive a staff presentation, and public testimony both for and against, the approval of the recommended Resolutions; 2. Close the Joint Public Hearing after all testimony has been presented; and 3. Adopt the recommended Resolutions. FISCAL IMPLICATIONS: The Agency will receive approximately: $27,830,000 in Bond proceeds to use for non -housing projects in Project Area No. 1, net of bond reserve funds and issuance costs; $4,275,000 in Bond proceeds to use for non -housing projects in Project Area No. 2, net of bond reserve funds and issuance costs; $11,000,000 in Bond proceeds to use for low and moderate income housing in both Project Areas, net of bond reserves and issuance costs; and An additional $25,370,000 in Loan proceeds to use for low and moderate income housing in both Project Areas, net of bond reserves and issuance costs. CHARTER CITY IMPLICATIONS: None. BACKGROUND AND OVERVIEW: In order to fund its projects and programs, the Agency has issued tax allocation bonds from time to time secured by tax increment revenue of the La Quinta Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2. Because its ability to issue debt in the future may soon be limited or prohibited altogether by the State Legislature, the Agency proposes to access its available bonding capacity by issuing bonds at this time for economic development, low- and moderate -income housing and capital projects. The Bonds are proposed to be issued on a taxable basis. Although taxable interest rates are higher than traditional tax-exempt rates, there are very few restrictions on the types of expenditures that may be made with taxable bonds. In particular, unspent taxable bond proceeds may be used to pay future Supplemental Educational Revenue Augmentation Fund (SERAF) payments, pay for Agency administration costs and other non -capital expenditures. Staff and the other finance team members have discussed a Financial Plan for the Agency that demonstrates that there will be remaining revenue available after meeting all existing obligations to sufficiently pay debt service on the bonds to be issued. The Financial Plan assumes no additional SERAF payments after Fiscal Year 2010-2011, but there is a certain amount of available funds each year to deal with such an event, if it were to occur. Staff is recommending a negotiated sale of the bonds to one underwriter based on current market conditions. A negotiated sale allows the underwriter to pre -market the bonds to their investors, which reduces their risk of holding a large balance of inventory in the bonds. This allows the underwriter to offer lower rates for the Agency. Further, the market for taxable bonds is now mainly composed of investors who are new to the municipal market, have questions about the State budget, and need more time to analyze municipal credits, which reinforces the need to select one underwriter who can work with such investors and obtain the lowest interest rates possible. Based on current market conditions and the Agency's previous credit ratings, the underwriter expects the average interest rate on the taxable bonds to be 8.50%. Because the market expects a significant amount of tax allocation bonds to be sold in the next 60 days, (20 tax allocation financings sold in the past seven days) interest rates could increase between now and the sale date due to supply versus demand market issues. Staff expects ratings to be received and bonds to be sold in approximately three weeks. The all inclusive costs of issuing the bonds are not expected to exceed 1 '/2 %. The attached resolutions provide for the following: • Approves the issuance of a loan between the La Quinta Financing Authority and the La Quinta Redevelopment Agency; • Approves the Preliminary Official Statement for each of the four financings; • Approves the Bond Purchase Contract for each of the four financings; • Authorizes the Executive Director to establish the final terms of each of the four financings; • Appoints U.S. Bank National Association as trustee for each of the four financings; • Provides for a Continuing Disclosure Agreement for each of the four financings; • Pledges Project No. 1 and No. 2 tax increment revenue to service each financing's principal and interest costs; • Authorizes the officers of the Agency and members of the Governing Body to take such actions and execute documents necessary to facilitate each of the four financings; and • Finds that the financings will provide significant public benefit. Please note that due to the number and length of the documents involved in these bond issue financings these documents are available in the City Clerk's office for review. FINDINGS AND ALTERNATIVES: The alternatives available to the City Council, the La Quinta Redevelopment Agency and the La Quinta Finance Authority include: 1. Approve the followings resolutions, subject to final approval by the Executive Director, regarding the Issuance of Redevelopment Project Areas 1 and 2 Taxable Bonds and Related Documents listed as follows: City Resolutions • A Resolution of the City Council Of The City Of La Quinta, California Approving the Issuance by the La Quinta Redevelopment Agency of its La Quinta Redevelopment Project Area No. 1, Taxable Tax Allocation Bonds, Series 2011 and Making Certain Determinations Relating Thereto; • A Resolution of The City Council of The City Of La Quinta, California, Approving the Issuance By The La Quinta Redevelopment Agency of its La Quinta Redevelopment Project Area No. 2 Taxable Tax Allocation Bonds, Series 2011 and Making Certain Determinations Relating Thereto; and • A Resolution of the City Council of the City of La Quinta, California, Approving the Issuance by the La Quinta Redevelopment Agency of its La Quinta Redevelopment Project Areas, Taxable Tax Allocation Housing Bonds, Series 2011 and Making Certain Determinations Relating Thereto; and A Resolution of the City Council of the City of La Quinta, California, Approving a Loan between the La Quinta Redevelopment Agency and the La Quinta Financing Authority. Aoencv Resolutions • A Resolution of the Board Of Directors of the La Quinta Redevelopment Agency Authorizing the Issuance of Taxable Tax Allocation Bonds of Said Agency in a Principal Amount of not to exceed Thirty -Three Million Dollars ($33,000,000) to Finance a Portion of the Costs of a Redevelopment Project Known as the La Quinta Redevelopment Project Area No. 1 and Approving Certain Documents and Taking Certain Other Actions in Connection Therewith; A Resolution of the Board of Directors of the La Quinta Redevelopment Agency Authorizing the Issuance of Taxable Tax Allocation Bonds of Said Agency in a Principal Amount of not to exceed Six Million Dollars ($6,000,000) to Finance a Portion of the Costs of a Redevelopment Project Known as the La Quinta Redevelopment Project Area No. 2 and Approving Certain Documents and Taking Certain Other Actions in Connection Therewith; • A Resolution of the Board of Directors of the La Quinta Redevelopment Agency Authorizing the Issuance of Taxable Tax Allocation Housing Bonds of Said Agency in a Principal Amount of not to exceed Twelve Million Dollars ($12,500,000) to Finance a Portion of the Low And Moderate Housing Costs of Redevelopment Projects and Approving Certain Documents and Taking Certain Other Actions in Connection Therewith; and A Resolution of the La Quinta Redevelopment Agency of the City of La Quinta, California Approving its Second Supplemental Loan Agreement, Official Statement, Purchase Contract, Authorizing the Executive Director to Set the Final Terms of the Approval of the Agency Loan, Approving The Payment of Costs of Issuing the Agency Loan and Making Certain Determinations Relating Thereto. Authority Resolutions A Resolution of the La Quinta Financing Authority of the City of La Quinta, California Authorizing the Issuance of Local Agency Taxable Revenue Bonds, 2011 Series A, in an Aggregate Principal Amount not to exceed Twenty -Eight Million Eight Hundred and Fifty Thousand Dollars ($28,850,000) Approving the Execution of an Indenture of Trust, Second Supplemental Loan Agreement, Purchase Contract, Official Statement and Providing Other Matters Properly Related Thereto. 2. Do not approve the above listed resolutions regarding the Issuance of Redevelopment Project Areas 1 and 2 Taxable Bonds and Related Documents; or 3. Provide Staff with alternative direction. Respectfully submitted, John M. Falconer, Finance Director Approved for submission by: 6 Thomas P. Genovese, Executive Director RESOLUTION NO. FA 2011 - A RESOLUTION OF THE LA QUINTA FINANCING AUTHORITY OF THE CITY OF LA QUINTA, CALIFORNIA AUTHORIZING THE ISSUANCE OF LOCAL AGENCY TAXABLE REVENUE BONDS, 2011 SERIES A, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED TWENTY - EIGHT MILLION EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($28,850,000), APPROVING THE EXECUTION OF AN INDENTURE OF TRUST, SECOND SUPPLEMENTAL LOAN AGREEMENT, PURCHASE CONTRACT, OFFICIAL STATEMENT AND PROVIDING OTHER MATTERS PROPERLY RELATING THERETO WHEREAS, the City of La Quinta (the "City") and the La Quinta Redevelopment Agency (the "Agency") have heretofore entered into a Joint Exercise of Powers Agreement establishing the La Quinta Public Financing Authority (the "Authority") for the purpose of issuing its bonds to be used to provide financing for capital improvements of the City and the Agency, and any other member entities which may be approved by the City and the Agency as members of the Authority; and WHEREAS, the Authority proposes for such purpose to authorize issuance of bonds pursuant to an Indenture of Trust (the "Indenture"), dated as of March 1, 2011, by and between the Authority and U.S. Bank National Association, Los Angeles, California (the "Trustee") in the maximum principal amount not to exceed $28,850,000 Local Agency Taxable Revenue Bonds, 2011 Series A Bonds (the "Series A Bonds"); and WHEREAS, the Bonds are to be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985 (the "Act"), constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California; and WHEREAS, the Authority proposes to sell the Series A Bonds at a negotiated sale to Wedbush Securities, Inc. (the "Underwriter") pursuant to a Bond Purchase Agreement, (the "Purchase Contract"); and WHEREAS, the Underwriter has caused to be prepared Official Statement describing the Series A Bonds (the forms of which are on file with the Secretary); and WHEREAS, the Authority intends to use proceeds from the Series A Bonds to make a loan to the Agency (the "Loan") pursuant to a Loan Agreement (the "Loan Agreement") to finance certain low and moderate income housing projects 124/015610-0122 115300.02 a03/09/1I Resolution No. FA 2011, FA Authorizing the Issuance of Local Agency Taxable Revenue Bonds Adopted: March 15, 2011 Page 2 (the "Project"); and a Second Supplemental Loan Agreement (the "Supplemental Loan Agreement"); and WHEREAS, the Board of Directors of the Authority, with the aid of its Staff, has reviewed the form of the Indenture, dated as of March 1, 2011, the Loan Agreement, dated as of February 3, 2004, the Second Supplemental Loan Agreement, dated as of March 1, 2011, and the Continuing Disclosure Agreement, dated as of March 1, 2011 (collectively, the "Financing Documents"); NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the La Quinta Financing Authority of the City of La Quinta, California as follows: SECTION 1. Recitals True and Correct. Each of the recitals stated above is true and correct. SECTION 2. Findings and Determinations. Pursuant to the Act, the Board hereby finds and determines that the issuance of the Series A Bonds will result in savings in effective interest rates, bond underwriting and bond issuance costs, will result in significant employment benefits from timely completion of the Project, and will cause the more efficient delivery of local agency services to residential and commercial development and thereby results in significant public benefits to the City and the Agency within the contemplation of Sections 6586(a), (c), and (d) of the Act. SECTION 3. Issuance of Series A Bonds. The Board hereby authorizes the issuance of the Series A Bonds in the aggregate principal amounts not to exceed $28,850,000 under the authority of the Act and the Indenture, in substantially the form on file with the Secretary, together with any changes therein or additions thereto deemed advisable by the Executive Director or Assistant Executive Director or Treasurer, whose execution thereof shall be conclusive evidence of his consent to such changes or additions. SECTION 4. Execution of Series A Bonds. The Series A Bonds shall be executed on behalf of the Authority by the manual or facsimile signature of the Chairman or Executive Director or Assistant Executive Director or Treasurer of the Authority. SECTION 5. Official Statement. The Authority approves distribution of the Preliminary Official Statement by the Underwriter in connection with the sale of the Series A Bonds, and the Executive Director or Assistant Executive Director or Treasurer of the Authority are authorized to deem each of the Preliminary Official Statement "final," pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). The form of the final Official Statement shall include such 124/015610-0122 1153017.02 a03/09/11 Resolution No. FA 2011- FA Authorizing the Issuance of Local Agency Taxable Revenue Bonds Adopted: March 15, 2011 Page 3 information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule. The Board hereby approves and authorizes the distribution of the final Official Statement by the Underwriter. The Executive Director or Assistant Executive Director or Treasurer is hereby authorized and directed to approve any changes in or additions to the final forms of said Official Statement, whose execution thereof shall be conclusive evidence of approval of any such changes and additions. The final Official Statement shall be executed in the name and on behalf of the Authority by the Executive Director or Assistant Executive Director or Treasurer, who are hereby authorized and directed to execute the final Official Statement on behalf of the Authority. SECTION 6. Executive Director Authorized to Establish Final terms of the Sale of the Series A Bonds. The Executive Director, based on such advice of Staff as he may deem necessary, is hereby authorized and directed to act on behalf of the Authority to establish and determine (i) the final principal amount of the Series A Bonds, which shall not exceed $28,850,000 (ii) the final amounts of the various maturities and sinking fund payments of the Series A bonds, (iii) the final interest rates on the Series A Bonds, which rates shall not exceed ten percent (10%) per annum for any maturity of the Series A Bonds, (iv) the Underwriter's discount for the purchase of the Series A Bonds, which shall not exceed one percent (1 %) of the principal amount of the Series A Bonds. SECTION 7. Appointment of Trustee and Escrow Agent. U.S. Bank, National Association, Los Angeles, California, is hereby appointed as trustee for the Series A Bonds under the Indenture and Fiscal Agent pursuant to the Documents, as defined below. SECTION 8. Purchase Contract. The proposed form of Purchase Contract by and between the Authority and the Underwriter, on file with the Secretary of the Governing Board and incorporated into this Resolution by reference is hereby approved, provided however, (i) the principal amount of the Bonds does not exceed $28,850,000, preliminary, subject to market conditions; and (ii) the Underwriter's discount, exclusive of original issue discount, does not exceed 1 % preliminary, subject to market conditions, of the principal amount of the Bonds. The Chairman or Executive Director or Assistant Executive Director or Treasurer is hereby authorized and directed, for and in the name and on behalf of the Authority, to purchase the Bonds from the Authority and to accept the offer of the Underwriter to purchase Bonds from the Authority, subject to the terms and conditions of the Purchase Contract, and to execute and deliver the Purchase Contract in substantially said form, with such changes or additions thereto that may hereafter become necessary in the interests of the Authority and which are reviewed and 124/015610-0122 1153017 02 a03/09/11 Resolution No. FA 2011- FA Authorizing the Issuance of Local Agency Taxable Revenue Bonds Adopted: March 15, 2011 Page 4 approved by counsel to the Authority, any such additions or changes to be conclusively evidenced by the execution and delivery of said agreements. SECTION 9. Filing of CDAC Notice. The Authority hereby approves the filing by the Rutan & Tucker, LLP ("Bond Counsel") of a notice of the Authority's intent to sell the Bonds with the California Debt Advisory Commission pursuant to Section 8855 of the California Government Code. SECTION 10. Approval of Loans. The Authority hereby authorizes and approves the Loan to be made to the Authority by the Agency from the proceeds of the Bonds. The Loan shall be made pursuant to and in accordance with the terms of the Loan Agreement and the Second Supplemental Loan Agreement (collectively, the "Loan Documents"). The Authority hereby approves the Loan Documents in substantially the forms on file with the Secretary together with any additions thereto or changes therein (including but not limited to the principal amount of the Loan) deemed necessary or advisable by the Executive Director or Assistant Executive Director or Treasurer whose execution thereof shall be conclusive evidence of approval of any such additions and changes. The Chairperson or Executive Director or Assistant Executive Director or Treasurer is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest and affix the seal of the Agency to the final form of the Loan Documents or and in the name and on behalf of the Authority. The proceeds of the Loans shall be applied by the Agency for the purposes and in the amounts set forth in the Loan Documents. The Authority hereby authorizes the delivery and performance of the Loan Documents. SECTION 11. Approval of Financing Documents. The Financing Documents substantially in the form on file with the Secretary, with such additions thereto and changes therein as are recommended or approved by Bond Counsel and the officers executing the same, with such approval to be conclusively evidenced by their execution and delivery are hereby approved. The Chairperson, the Executive Director, the Assistant Executive Director, the Treasurer, the Secretary, or their designees are hereby authorized and directed to execute and deliver the Financing Documents. SECTION 12. Delivery of the Bonds. The Bonds shall be delivered to the Underwriter upon compliance with the terms and conditions set forth in the Purchase Contract. The Chairperson, the Executive Director, the Assistant Executive Director, the Treasurer, the Secretary and other proper officers of the Authority are hereby authorized and directed to deliver any and all documents and instruments, to authorize the payment of Costs of Issuance and to do and cause to 124/015610-0122 1153017.02 a03/09/11 Resolution No. FA 2011- FA Authorizing the Issuance of Local Agency Taxable Revenue Bonds Adopted: March 15, 2011 Page 5 be done any and all acts and things necessary or convenient for delivery of the Bonds to the Purchaser. SECTION 13. Official Action. The Chairman, the Vice Chairman, the Executive Director, the Assistant Executive Director, the Treasurer, the General Counsel 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 execution and delivery of any and all assignments, certificates, requisitions, including, without limitation, requisitions for the payment of costs of issuance of the Series A Bonds, agreements, notices, consents, bond insurance premiums or rating agency fees, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary by the Bond Counsel or advisable in order to consummate lawful issuance, sale and delivery of the Series A Bonds. Any action authorized by this resolution to be taken by a specific officer of the Authority may be taken on such officer's behalf by the written designee of such officer. SECTION 14. Bond Counsel. Rutan & Tucker, LLP is hereby appointed Bond Counsel for the Series A Bonds. SECTION 15. Effective Date. This resolution shall take effect from and after its passage and adoption. PASSED, ADOPTED and APPROVED at a regular meeting of the La Quinta Financing Authority held on this 15th day of March, 2011, by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: LINDA EVANS, Chairperson, La Quinta Financing Authority l24/015610-0122 1153017.02 a03/09/11 Resolution No. FA 2011- FA Authorizing the Issuance of Local Agency Taxable Revenue Bonds Adopted: March 15, 2011 Page 6 ATTEST: Veronica J. Montecino, Authority Secretary La Quinta Financing Authority (City Seal) APPROVED AS TO FORM: M. KATHERINE JENSON, Authority Counsel La Quinta Financing Authority 1241015610-0122 1153017.02 a03/09/11 M Resolution No. FA 2011- FA Authorizing the Issuance of Local Agency Taxable Revenue Bonds Adopted: March 15, 2011 Page 7 SECRETARY'S CERTIFICATE RE: ADOPTION OF RESOLUTION STATE OF CALIFORNIA 1 )ss. COUNTY OF RIVERSIDE I, Veronica J. Montecino, Secretary of the La Quinta Financing Authority, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted by said Agency at a regular meeting of said Agency held on the 15th day of March, 2011 . AYES: NOES: ABSENT: ABSTAIN: Veronica J. Montecino, Authority Secretary La Quinta Financing Authority (SEAL) STATE OF CALIFORNIA ) 1ss. COUNTY OF RIVERSIDE I, Veronica J. Montecino, Secretary of the La Quinta Financing Authority, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. RA of said Agency and that said Resolution was adopted at the time and by the vote stated on the above certificate, and has not been amended or repealed. Dated: , 2011 (SEAL) Veronica Montecino, Authority Secretary La Quinta Financing Authority 124/015610-0122 1153019.02 a03/09/11