CC RESOLUTION 5246RESOLUTION NO. 6246
RESOLUTION OF THE CITY OF EL SEGUNDO, CALIFORNIA PROVIDING
FOR THE ISSUANCE OF ONE OR MORE SERIES OF CITY OF EL SEGUNDO
TAXABLE PENSION OBLIGATION BONDS AND AUTHORIZING
A TRUST AGREEMENT, A VALIDATION ACTION AND
OTHER MATTERS RELATING THERETO
SECTION 1: Pursuant to Sections 20000 et seq. of the California Government Code (the
"Retirement Law"), the City of El Segundo (the "City") has established three pension plans, a
Miscellaneous Plan, a Safety Police First Tier Plan, and a Safety Fire Plan, with the California
Public Employees' Retirement System ("CaIPERS"); and
SECTION 2: The Retirement Law obligates the City (a) to make annual payments to CaIPERS
to fund pension benefits for City employees who are CaIPERS members, and (b) to make annual
payments to CaIPERS to amortize the unfunded accrued actuarial liability with respect to such
pension benefits over a period not exceeding 30 years; and
SECTION 3: The obligation of the City to make such payments is evidenced by a contract
between the City and CaIPERS (collectively, as heretofore and hereafter amended, the "CaIPERS
Contract"); and
SECTION : As of June 30, 2019, based upon the actuarial reports of pension liability as
calculated by CaIPERS with respect to the Miscellaneous Plan, the Safety Police First Tier Plan,
and the Safety Fire Plan of the City (together, the "Actuarial Reports"), the City had an obligation
in the amount of $151,299,753 (consisting of $34,576,384 for the Miscellaneous Plan,
$61,384,985 for the Police First Tier Plan, and $55,338,384 for the Safety Fire Plan) pursuant to
the Retirement Law as an unfunded accrued actuarial liability, based on the market value of
assets; and
SECTION 5: In order to refund a portion of the CaIPERS Contract by paying all or portion of such
unfunded accrued actuarial liability, the City desires to issue taxable pension obligation bonds to
be designated the "City of El Segundo Taxable Pension Obligation Bonds," with such series and
other designations as may be approved as herein provided, in one or more series (collectively,
the "Initial Series of Bonds"), in an aggregate principal amount not to exceed the sum of (a) the
City's unfunded accrued actuarial liability under the CaIPERS Contract pursuant to the Retirement
Law as of the date of issuance of the Initial Series of Bonds ($151,299,753 as of June 30, 2019,
as set forth in the Actuarial Reports), (b) the costs of issuance of the Initial Series of Bonds
(including underwriters' discount), and (c) any original issue discount on the Initial Series of
Bonds; and
SECTION 6: The City desires to authorize the issuance of additional bonds (the "Additional
Bonds"), in one or more series and on one or more sales dates, payable on a parity with the Initial
Series of Bonds (the Initial Series of Bonds and any such Additional Bonds being collectively
referred to herein as the "Bonds"), for the purpose of refunding additional obligations under the
CaIPERS Contract (as of the date of issuance of such Additional Bonds) to pay to CaIPERS, to
the extent consistent with the City's then existing local debt policy, the City's annual contribution
to CaIPERS to fund pension benefits for its members and their beneficiaries and the City's
unfunded accrued actuarial liability pursuant to the Retirement Law; and
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SECTION 7: In order to provide for the authentication and delivery of the Initial Series of Bonds
and to establish and declare the terms and conditions upon which the Initial Series of Bonds and
Additional Bonds are to be issued and secured, the City proposes to enter into a Trust Agreement
with U.S. Bank National Association, as trustee (such Trust Agreement, in the form presented to
this meeting, with such changes, insertions and omissions as are made pursuant to this
Resolution, being referred to herein as the "Trust Agreement"); and
SECTION 8: There has been prepared and submitted to this meeting a form of the Trust
Agreement; and
SECTION 9: On November 3, 2020, the City adopted a Debt Management and Disclosure Policy
(the "Debt Management Policy") that complies with Government Code Section 8855(i), and the
City's issuance of the Initial Series of Bonds as contemplated by this Resolution is in compliance
with the Debt Management Policy; and
SECTION 10: California Government Code Section 5852.1 requires that the City Council obtain
from an underwriter, financial advisor or private lender and disclose, prior to authorization of the
issuance of bonds with a term of greater than 13 months, good faith estimates of the following
information in a meeting open to the public: (a) the true interest cost of the bonds, (b) the sum of
all fees and charges paid to third parties with respect to the bonds, (c) the amount of proceeds of
the bonds expected to be received net of the fees and charges paid to third parties 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
SECTION 11: In compliance with Government Code Section 5852.1, the City Council has
obtained from KNN Public Finance, A Limited Liability Company, as Municipal Advisor to the City,
the required good faith estimates with respect to the Initial Series of Bonds and such estimates
are disclosed and set forth on Exhibit A attached hereto;
Now, therefore, be it resolved by the City Council of the City of El Segundo, as follows:
SECTION 12: All of the recitals herein contained are true and correct and the City Council of the
City (the "City Council") so finds.
SECTION 13: The City Council hereby finds and declares that the issuance of the Initial Series
of Bonds and the Additional Bonds and the other actions contemplated hereby are in the best
interests of the City and are expected, based on investment and other assumptions, to result in
significant savings to the taxpayers of the City.
SECTION 14: The issuance of the Initial Series of Bonds, on the terms and conditions set forth
in, and subject to the limitations specified in, the Trust Agreement, is hereby authorized and
approved. The Initial Series of Bonds, in substantially the form set forth in the Trust Agreement
submitted to this meeting and made a part hereof as though set forth herein, be and the same are
hereby approved. The Initial Series of Bonds may be issued as fixed rate, current interest bonds,
may have applicable call features, authorized denominations, payment dates and other variable
items related thereto, and may have series and other designations as appropriate; provided,
however, that (a) the aggregate principal amount of the Initial Series of Bonds shall not exceed
the City's unfunded accrued actuarial liability under the CalPERS Contract pursuant to the
Retirement Law as of the date of issuance of the Initial Series of Bonds ($151,299,753 as of
June 30, 2019, as set forth in the Actuarial Reports), as determined by CalPERS, plus the
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underwriters' discount on the Initial Series of Bonds, plus any original issue discount on the Initial
Series of Bonds, plus the costs of issuance of the Initial Series of Bonds, (b) the true interest cost
to the City on the Initial Series of Bonds shall not exceed 4.00%, and (c) the Initial Series of Bonds
shall mature not later July 1, 2040 (which date is prior to the current CalPERS final amortization
of the City's unfunded accrued actuarial liability as set forth in the Actuarial Reports). The Mayor,
the City Manager, the Deputy City Manager, the Director of Finance and the City Treasurer, and
such other officers of the City as the City Manager may designate in writing (collectively, the
"Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the
name of the City, to execute and deliver the Initial Series of Bonds in the form attached to the
Trust Agreement, with such changes, insertions and omissions as the Authorized Officer
executing the same may require or approve, such requirement or approval to be conclusively
evidenced by the execution of the Initial Series of Bonds by such Authorized Officer. The Initial
Series of 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 City not limited as to payment
from any special source of funds; provided, however, that the Initial Series of Bonds shall not
constitute an obligation of the City for which the City is obligated to levy or pledge any form of
taxation or for which the City has levied or pledged or will levy or pledge any form of taxation.
SECTION 15: The Trust Agreement, in substantially the form submitted to this meeting and made
a part hereof as though set forth herein, be and the same is hereby approved. The Authorized
Officers are, and each of them is, hereby authorized and directed, for and in the name of the City,
to execute and deliver the Trust Agreement, with such changes, insertions and omissions as the
Authorized Officer executing the same may require or approve, such requirement or approval to
be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer;
provided, however, that any such changes, insertions and omissions shall be consistent with the
authority, and limitations thereon, granted to the Authorized Officers in Section 14 hereof.
SECTION 16: The issuance of the Additional Bonds, on the terms and conditions set forth in, and
subject to the limitations specified in, the Trust Agreement, is hereby authorized and approved.
The Additional Bonds, in substantially the form of the Initial Series of Bonds set forth in the Trust
Agreement submitted to this meeting and made a part hereof as though set forth herein, be and
the same are hereby approved. The Additional Bonds may be issued in one or more series and
on one or more sales dates, and may be issued as fixed rate, current interest bonds, may have
applicable call features, authorized denominations, payment dates and other variable items
related thereto, and may have series and other designations as appropriate; provided, however,
that (a) the aggregate principal amount of each issuance of Additional Bonds shall not exceed, to
the extent consistent with the City's then existing local debt policy, the sum of the unpaid amount
of the City's obligation to make an annual contribution to CalPERS to fund pension benefits for its
members and their beneficiaries in the fiscal year such Additional Bonds are issued plus the
estimated unfunded accrued actuarial liability of the City to CalPERS pursuant to the Retirement
Law as of the date of issuance of such Additional Bonds, as determined by CaIPERS, plus the
underwriters' discount on such issue of Additional Bonds, plus any original issue discount on such
issue of Additional Bonds, plus the costs of issuance of such series of Additional Bonds, (b) the
true interest cost to the City on such series of Additional Bonds shall not exceed the true interest
cost of the interest rate established by CalPERS on the unfunded accrued actuarial liability of the
City, and (c) the Additional Bonds of each series shall mature not later than 30 years from the
date of issuance thereof. The Authorized Officers are, and each of them is, hereby authorized
and directed, for and in the name of the City, to execute and deliver the Additional Bonds in
substantially the form of the Initial Series of Bonds set forth in the Trust Agreement, with such
changes, insertions and omissions as the Authorized Officer executing the same may require or
approve, such requirement or approval to be conclusively evidenced by the execution of the
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Additional Bonds by such Authorized Officer. The Additional 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 City not limited as to payment from any special source of funds; provided,
however, that the Additional Bonds shall not constitute an obligation of the City for which the City
is obligated to levy or pledge any form of taxation or for which the City has levied or pledged or
will levy or pledge any form of taxation.
SECTION 1 The Authorized Officers are, and each of them is, authorized and directed, for and
in the name of the City, to do any and all things, including bringing a validation action under
Section 860 of the California Code of Civil Procedure, and to execute and deliver any and all
documents which they or any of them deem necessary or advisable in order to consummate the
transactions contemplated by this Resolution and otherwise to carry out, give effect to and comply
with the terms and intent of this Resolution.
SECTION' 18: With the passage of this Resolution, the City Council hereby certifies that the Debt
Management Policy complies with Government Code Section 8855(i) and that the Initial Series of
Bonds authorized to be issued pursuant to this Resolution is consistent with such policy, and
instructs Orrick, Herrington & Sutcliffe LLP, as Bond Counsel, on behalf of the City, with respect
to the Initial Series of Bonds to be issued pursuant to this Resolution and the Trust Agreement,
(a) to cause notices of the proposed sale and final sale of the Initial Series of Bonds to be filed in
a timely manner with the California Debt and Investment Advisory Commission pursuant to
Government Code Section 8855, and (b) to check, on behalf of the City, the "Yes" box relating to
such certifications in the notice of proposed sale filed pursuant to Government Code Section
8855.
SECTION 1 �: The Authorized Officers are, and each of them is, authorized to apply for a
Municipal Bond Insurance Policy for the Initial Series of Bonds and for any Additional Bonds and
to obtain such insurance if the present value cost of such insurance is less than the present value,
respectively, of the estimated interest savings with respect to the Initial Series of Bonds and such
Additional Bonds.
SECTION 20: The appointment of KNN Public Finance, A Limited Liability Company, as
Municipal Advisor to the City for the Initial Series of Bonds, Orrick, Herrington & Sutcliffe LLP, as
Bond Counsel to the City for the Initial Series of Bonds, Stradling Yocca Carlson & Rauth, a
Professional Corporation, as Disclosure Counsel to the City for the Initial Series of Bonds, J.P.
Morgan Securities LLC and Stifel, Nicolaus & Company, Incorporated, as Underwriters for the
Initial Series of Bonds, and U.S. Bank National Association, as Trustee under the Trust
Agreement, is hereby approved.
SECTION 21: All actions heretofore taken by the officers, employees and agents of the City with
respect to the financings set forth above are hereby approved, confirmed and ratified.
SECTION 22: The City Council hereby approves the execution and delivery of any and all
agreements, documents, certificates and instruments referred to herein with electronic signatures
as may be permitted under the California Uniform Electronic Transactions Act and digital
signatures as may be permitted under Section 16.5 of the Government Code using DocuSign.
SECTION 28: The City Clerk is directed to certify the adoption of this Resolution; record this
Resolution in the book of the City's original resolutions, and make a minute of this adoption of the
Resolution in the City Council's records and minutes of this meeting.
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SECTION 24: This Resolution will become effective immediately upon adoption.
PASSED AND ADOPTED RESOLUTION No. 5246 on this 19th day of January, 2021.
Drew Boyles, Mayor
ATTEST:
Tr y WeaV9r, City/Clerk
APPROVED AS TO FORM:
Qn �l or
Mark D. Hensley, City k6aney
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CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS
CITY OF EL SEGUNDO )
I, Tracy Weaver, City Clerk of the City of El Segundo, California, do hereby certify that the whole
number of members of the City Council of said City is five; that the foregoing Resolution No. 5246
was duly passed, approved and adopted by said City Council, approved and signed by the Mayor
of said City, and attested to by the City Clerk of said City, all at a regular meeting of said Council
held on the 19th day of January, 2021, and the same was so passed and adopted by the following
roll call vote:
AYES: Mayor Boyles, Mayor Pro Tern Pimentel, Council Member Pirsztuk, Council
Member Nicol and Council Member Giroux
NOES: None
ABSENT: None
ABSTAIN: None
NOT PARTICIPATING: None
WITNESS MY HAND THE OFFICIAL SEAL OF SAID CITY this day of February, 2021.
~racy U"eavr, City Clerk
_� of_th City of El Segundo,
California
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EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Initial Series of
Bonds in compliance with Section 5852.1 of the California Government Code. Such good faith
estimates have been provided to the City by KNN Public Finance, A Limited Liability Company,
the City's financial advisor and municipal advisor under Section 15B of the Securities Exchange
Act of 1934 (the "Municipal Advisor").
Principal Amount. The Municipal Advisor has informed the City that, based on the City's
financing plan and based on market conditions prevailing at the time of preparation of such
estimate, its good faith estimate of the aggregate principal amount of the Initial Series of Bonds
to be sold in a public offering is $152,280,000 (the "Estimated Principal Amount").
True Interest Cost of the Initial Series of Bonds. The Municipal Advisor has informed
the City that, assuming that the Estimated Principal Amount of the Initial Series of Bonds is sold,
and based on market conditions prevailing at the time of preparation of such estimate, its good
faith estimate of the true interest cost of the Initial Series of 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 Initial Series of Bonds, is 2.73%.
Finance Charge of the Initial Series of Bonds. The Municipal Advisor has informed the
City that, assuming that the Estimated Principal Amount of the Initial Series of Bonds is sold, and
based on market conditions prevailing at the time of preparation of such estimate, its good faith
estimate of the finance charge for the Initial Series of Bonds, which means the sum of all fees and
charges paid to third parties (or costs associated with the Initial Series of Bonds), is $616,752.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that,
assuming that the Estimated Principal Amount of the Initial Series of Bonds is sold, and based on
market conditions prevailing at the time of preparation of such estimate, its good faith estimate of
the amount of proceeds expected to be received by the City for sale of the Initial Series of Bonds,
less the finance charge of the Initial Series of Bonds, as estimated above, and any reserves or
capitalized interest paid or funded with proceeds of the Initial Series of Bonds, is $151,663,248.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming
that the Estimated Principal Amount of the Initial Series of Bonds is sold, and based on market
conditions 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 City will make to pay debt service
on the Initial Series of Bonds, plus the estimated finance charge for the Initial Series of Bonds, as
described above, not paid with the proceeds of the Initial Series of Bonds, calculated to the final
maturity of the Initial Series of Bonds, is $196,361,689.
The foregoing estimates constitute good faith estimates only and are based on market
conditions prevailing at the time of preparation of such estimates. The actual principal amount of
the Initial Series of 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 for a variety of reasons, including, without
limitation, due to (a) the market conditions prevailing on the actual date of the sale of the Initial
Series of Bonds being different than the market conditions prevailing at the time of preparation of
the estimates contained herein, (b) the actual principal amount of Initial Series of Bonds sold
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being different from the Estimated Principal Amount, (c) the actual amortization of the Initial Series
of Bonds being different than the amortization assumed for purposes preparing the estimates
contained herein, (d) the actual interest rates at which the Initial Series of Bonds are sold being
different than those estimated for purposes of preparing the estimates contained herein, (e) other
market conditions, or (f) alterations in the City's financing plan or changes to the City's unfunded
accrued actuarial liability under the CalPERS Contract, or a combination of such factors. The
actual date of sale of the Initial Series of Bonds and the actual principal amount of Initial Series
of Bonds sold will be determined by the City based on various factors. The actual interest rates
borne by the Initial Series of Bonds will depend on market conditions at the time of sale thereof.
The actual amortization of the Initial Series of Bonds will also depend, in part, on market conditions
at the time of sale thereof. Market conditions, including, without limitation, interest rates are
affected by economic and other factors beyond the control of the City and the Municipal Advisor.
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