HomeMy WebLinkAbout06-18-2020 iBank - Parity Bonds Certificate - IBank Loan
4133-9336-7076
CERTIFICATE OF THE CITY REGARDING PARITY OBLIGATIONS
The undersigned, Derek Johnson, as City Manager of the City of San Luis Obispo (the
“City”), in connection with the execution and delivery of an Installment Sale Agreement (the
“2020 Obligation”), dated as of ______________, 2020, between the City and the California
Infrastructure and Economic Development Bank, which 2020 Obligation is being issued as a
parity obligation to the City’s outstanding 2012 Water Revenue Refunding Bonds (the “2012
Bonds”) and the City’s outstanding Water Revenue Refunding Bonds, Series 2018 (the “2018
Bonds” and, together with the 2012 Bonds, the “Parity Obligations”), hereby certifies as follows:
1. No Event of Default (or no event with respect to which notice has been given and
which, on ce all notice of grace periods have passed, would constitute an Event of Default) has
occurred and is continuing;
2. With respect to the 2012 Bonds, on the basis of calculations made as of the date
hereof, which calculations are set forth in Exhibit A attached hereto, the amount of Net Revenues
(excluding Development Impact Fees) as shown by the books of the City for the most recent
completed Fiscal Year for which audited financial statements of the City are available, which are
the audited financial statements of the City for the fiscal year ended June 30, 2019, are at least
equal to 125% of the amount of Maximum Annual Debt Service;
3. With respect to the 2018 Bonds, on the basis of calculations made as of the date
hereof, which calculations are set forth in Exhibit A attached hereto, the Adjusted Net Revenues
for the most recent Fiscal Year for which audited financial statements are available, which are
the audited financial statements of the City for the fiscal year ended June 30, 2019, were at least
equal to 125% of the Debt Service for all Outstanding Bonds and Parity Obligations, including
the Average Annual Debt Service for the 2020 Obligation, and were at least equal to 100% of the
Debt Service for all obligations, including the Average Annual Debt Service for the 2020
Obligation of the City payable from Net Revenues during such fiscal year.
4. Interest on the 2020 Obligation is payable only on June 1 and December 1, and
principal thereof is payable only on June 1 in any year in which principal is payable;
5. The issuance of the 2020 Obligation complies with all conditions to the issuance
thereof as set forth in the applicable provisions of the Parity Obligation Documents; and
6. The City has delivered this Certificate to U.S. Bank National Association, as
trustee for the Parity Obligations (the “Trustee”), and an opinion of Bond Counsel stating that the
conditions precedent to the issuance of the 2020 Obligation set forth in the Indenture of Trust,
dated as of January 1, 2012, between the City and the Trustee, relating to the 2012 Bonds, have
been satisfied.
All capitalized terms used herein which are not otherwise defined herein shall have the
same meanings as set forth in the Indenture of Trust, dated as of January 1, 2012, between the
City and the Trustee, relating to the 2012 Bonds or, if not defined therein, in the Indenture, dated
as of July 1, 2018, between the City and the Trustee, relating to the 2018 Bonds.
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Certificate of the City Regarding Parity Obligations
City of San Luis Obispo, California 2020 IBank Loan
4133-9336-7076
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on ____________.
CITY OF SAN LUIS OBISPO, CALIFORNIA
By
Derek Johnson, City Manager
A-1
4133-9336-7076
EXHIBIT A
PARITY OBLIGATIONS TEST
2012 Bonds
FY 2018-19 Revenues(1) $21,195,416
FY 2018-19 Maintenance and Operations Costs(2) $15,995,459
FY 2018-19 Net Revenues (3) $5,199,957
FY 2018-19 Subsidy Payments(4) $0
FY 2018-19 Adjusted Net Revenues (4) $5,199,957
Maximum Annual Debt Service (“MADS”) (5) $2,653,378
MADS Coverage Ratio (5) 196%
FY 2018-19 Actual Debt Service (6) $2,019,641.69
2020 Obligations Average Annual Debt Service (6) $932,061.50
Coverage Ratio (Parity Obligations) (6) 176%
Coverage Ratio (all obligations) (6) 176%
(1) Source: City of San Luis Obispo fiscal year 2018-19 audited financial statements. Equals
operating revenues, less development impact fees, plus other revenues.
(2) Source: City of San Luis Obispo fiscal year 2018-19 audited financial statements. Does not
include depreciation and amortization.
(3) Revenues less Maintenance and Operations Costs.
(4) As defined in 2012 Indenture.
(5) Calculated in accordance with the 2012 Indenture.
(6) Calculated in accordance with the 2018 Indenture.