California Enterprise Development Authority REGULAR MEETING ***TELECONFERENCE MEETING NOTICE and AGENDA*** LOCATIONS LISTED BELOW 3:00 PM Wednesday, October 13, 2010 Teleconference Phone Information (308) 344-6400 - Conference Code: 305911# Call to Order and Roll Call Chair and Executive Director Reports 1. Approval Of Minutes Approve the Regular Meeting Minutes of September 29, 2010 Action Items 2. Adopt Resolution 10-30 Authorizing the Issuance and Sale of California Enterprise Development Authority Taxable Recovery Zone Facility Revenue Bonds (GreenHunter Mesquite Lake, LLC Project), Series 2010B and Remarketing of Tax-Exempt Recovery Zone Facility Bonds (GreenHunter Mesquite Lake, LLC Project), Series 2010A, for the Purpose of Financing Facilities for the Benefit of GreenHunter Mesquite Lake, LLC and/or a Related or Successor Entity; Providing the Terms and Conditions for the Sale, Issuance and Remarketing of Said Bonds and Other Matters Relating Thereto and Authorizing the Execution of Certain Documents Herein Specified Other Business Public Comment Adjournment Members of CEDA and members of the public may access this meeting at the following locations: California Association for Local Economic Development 550 Bercut Drive, Suite G Sacramento, CA 95811 City of San Jose 200 E. Santa Clara St., 17 th Floor San Jose, CA 95113 City of Santa Rosa City Hall 100 Santa Rosa Avenue Santa Rosa, CA 95404 City of Eureka City Hall 531 K Street Eureka, CA 95501 The Valley Economic Alliance 5121 Van Nuys Blvd.#200 Sherman Oaks, CA 91403 5598 Gold Creek Drive Castro Valley, CA 94552 City of Palmdale 38250 N Sierra Highway Palmdale, CA 93550 Economic Development Collaboration of Ventura County 1601 Carmen Dr., Ste 215 Camarillo, CA 93010 This agenda can be obtained at www.caled.org/edfinancing. The California Enterprise Development Authority complies with the Americans with Disabilities Act (ADA) by ensuring that the facilities are accessible to persons with disabilities and by providing this notice and information in alternative formats when requested. If you need further assistance, you may contact us no later than 72 hours before the meeting at (916) 448-8252, ext. 16. 550 Bercut Drive, Suite G, Sacramento, CA 95814! (916) 448-8252, ext. 12
California Enterprise Development Authority Teleconference Locations MINUTES Regular Meeting ***TELECONFERENCE MEETING *** CEDA BOARD OF DIRECTORS Wednesday, September 29, 2010 California Association for Local Economic Development 550 Bercut Drive, Suite G Sacramento, CA 95811 City of San Jose 200 E. Santa Clara St., 17 th Floor San Jose, CA 95113 City of Clovis City Hall 1033 Fifth Street Clovis, CA 93612 City of Eureka City Hall 531 K Street Eureka, CA 95501 The Valley Economic Alliance 5121 Van Nuys Blvd.#200 Sherman Oaks, CA 91403 5598 Gold Creek Drive Castro Valley, Ca 94552 City of Palmdale 38250 N Sierra Highway Palmdale, CA 93550 Economic Development Collaboration of Ventura County 1601 Carmen Dr., Ste 215 Camarillo, CA 93010 Siskiyou County EDC 1512 South Oregon Street Yreka, CA 96097 Call to Order Kathy Millison, Acting Chair of the California Enterprise Development Authority, called the meeting to order at 3:45 pm. Roll Call Members Present: Bruce Kern Kathy Millison Cindy Trobitz-Thomas CEDA Staff Present: Mona Dmitrenko Michelle Stephens Executive Director Report Executive Director Mona Dmitrenko updated the board on current CEDA activity and gave a report on all CEDA activity to date for the fiscal year 2010-2011. This included $135,350,000 in bonds issued and 1,496 jobs created or retained. A large portion of the CEDA projects since July 1, 2010 have been bank qualified loans which are part of the ARRA legislation which is slated to sunset at the end of this calendar year. In light of that, Board Secretary Bruce Kern said it is necessary to market CEDA s abilities to our members and to push in order to keep deals coming in the upcoming calendar year. Action Items 1. Approve the Regular Meeting Minutes from September 22, 2010. Discussion: Board Secretary Bruce Kern noted that the minutes inaccurately reflected the past conversation regarding CEDA liability. The notes for Action Item 3 state that Resolution 10-28 should be amended to include Section 2, which says that CEDA and its Board are required to repay the bonds. This should read that CEDA and its Board and NOT required to repay bonds. 2
Motion: Board Secretary Bruce Kern made the motion to approve the Regular Meeting Minutes from September 22, 2010 with the aforementioned change. Board Member, Cindy Trobitz-Thomas seconded the motion on the floor. The motion passed on the following roll call vote: Bruce Kern Kathy Millison Cindy Trobitz-Thomas 2. Adopt Resolution 10-29 Approving Associate Membership by the City of Oxnard in the California Enterprise Development Authority and the Execution of an Associate Membership Agreement Relating to Associate Membership of the City of Oxnard in the California Enterprise Development Authority Discussion: Executive Director Mona Dmitrenko explained that the City of Oxnard is becoming a member because of a $9.6MM RZFB project for Quattro-Del Norte, LLC, which is a part of Volkswagon of America. The project will involve the company relocating within Ventura County. Ms. Dmitrenko noted that she had already contacted CEDA Board Member and President/CEO of the Economic Development Collaborative of Ventura County; Bruce Stenslie to make sure this move would not be objectionable to the community. He assured her that they are happy to keep the company within the county and that he had no problem with CEDA moving forward on this project. Motion: Board Secretary Bruce Kern made the motion to approve Resolution 10-29 Approving Associate Membership by the City of Oxnard in the California Enterprise Development Authority and the Execution of an Associate Membership Agreement Relating to Associate Membership of the City of Oxnard in the California Enterprise Development Authority. Board Member Cindy Trobitz-Thomas seconded the motion on the floor. The motion passed on the following roll call vote: Bruce Kern Kathy Millison Cindy Trobitz-Thomas Other Business Public Comment There was no public comment made. Adjournment Motion: Board Member, Cindy Trobitz-Thomas moved to adjourn the meeting. Board Secretary, Bruce Kern seconded the motion. The motion passed unanimously. Acting Board Chair, Kathy Millison adjourned the meeting at 3:58 pm. 3
Action Requested Borrower(s) Borrower Description Public Benefits TEFRA Hearing Eligibility and Policy Review Staff Report Adopt Resolution 10-30 Authorizing the Issuance and Sale of California Enterprise Development Authority Taxable Recovery Zone Facility Revenue Bonds (GreenHunter Mesquite Lake, LLC Project), Series 2010B and Remarketing of Tax-Exempt Recovery Zone Facility Bonds (GreenHunter Mesquite Lake, LLC Project), Series 2010A, for the Purpose of Financing Facilities for the Benefit of GreenHunter Mesquite Lake, LLC and/or a Related or Successor Entity; Providing the Terms and Conditions for the Sale, Issuance and Remarketing of Said Bonds and Other Matters Relating Thereto and Authorizing the Execution of Certain Documents Herein Specified GreenHunter Mesquite Lake, LLC Project GreenHunter Mesquite Lake, LLC, a Delaware limited liability company is in the process of refurbishing a biomass waste-to-energy facility located on a 40 acre site in Brawley, Imperial County, California. The facility is expected to process approximately 623 tons per day of wood and agricultural waste. The facility s new power purchase agreement (PPA) with Imperial Irrigation District is for Renewable Power, to meet the needs of California s Renewable Power Standard. The facility was built in 1989 at the cost of approximately $68 million to process cow manure into power and was in operation until 1994. It has been dormant since 1994 because it was uneconomical to refurbish and operate the facility. The refinancing of the borrower s acquisition, renovation, furnishing and equipping costs will significantly reduce the borrower s interest costs. Approval of this request will result in significant cost savings by lowering the borrower s overall debt service payments and provide them with the funds needed for improvements of its facilities. This action affords GreenHunter Mesquite Lake, LLC Project the opportunity to improve cash flow, enhance its facilities, and allow them to potentially increase their net income. The County of Imperial held a Tax Equity and Fiscal Responsibility Act TEFRA hearing on March 16, 2010, following a public notice published in a newspaper of general circulation. CEDA staff has reviewed the project. The proposed financing is eligible pursuant to state and federal law and addresses the objectives contained in CEDA s Bond Issuance Polices and Procedures " The Borrower is capable of meeting the obligations incurred under the financing documents; " The Payments to be made are adequate to pay the expenses of CEDA in connection with the financing and to pay debt service; " Proposed financing is appropriate for the project. Recommendation Staff recommends approval of Resolution 10-30, which authorizes and approves the issuance and sale of bonds for GreenHunter Mesquite Lake, LLC Project. 4
RESOLUTION NO. 10-30 CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY TAXABLE RECOVERY ZONE FACILITY REVENUE BONDS (GREENHUNTER MESQUITE LAKE, LLC PROJECT), SERIES 2010B AND REMARKETING OF TAX-EXEMPT RECOVERY ZONE FACILTY BONDS (GREENHUNTER MESQUITE LAKE, LLC PROJECT), SERIES 2010A, FOR THE PURPOSE OF FINANCING FACILITIES FOR THE BENEFIT OF GREENHUNTER MESQUITE LAKE, LLC AND/OR A RELATED OR SUCCESSOR ENTITY; PROVIDING THE TERMS AND CONDITIONS FOR THE SALE, ISSUANCE AND REMARKETING OF SAID BONDS AND OTHER MATTERS RELATING THERETO AND AUTHORIZING THE EXECUTION OF CERTAIN DOCUMENTS HEREIN SPECIFIED WHEREAS, pursuant to the provisions of the Joint Powers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California (the Act ), the cities of Eureka, Lancaster and Selma entered into a joint exercise of powers agreement (the Agreement ) pursuant to which the California Enterprise Development Authority (the Authority ) was organized; and WHEREAS, the Authority is authorized by the Agreement and the Act to issue bonds, notes or other evidences of indebtedness, or certificates of participation in leases or other agreements, or to enter into loan agreements in order to promote economic development; and WHEREAS, pursuant to the provisions of the Act and the Agreement, the public agencies which are the contracting parties comprising the membership of the Authority are authorized to jointly exercise any power common to such contracting parties, including, without limitation, the power to acquire and dispose of property, both real and personal; and WHEREAS, the County of Imperial (the County ) is an associate member of the Authority and is authorized to acquire and dispose of property, both real and personal; and WHEREAS, the Authority, on September 30, 2010, issued its Tax-Exempt Recovery Zone Facility Revenue Bonds (GreenHunter Mesquite Lake, LLC Project), Series 2010A in an aggregate principal amount of $29,930,000 (the Series 2010A Bonds ) pursuant to the Act for the benefit of the Borrower to finance the cost of, or reimburse the Borrower for, (1) the construction, refurbishment, installation and equipping of an approximately 240,000 square foot biomass waste-to-energy power plant located on a 40-acre site at 3559 Highway 111, Imperial County, California 92251 (collectively, the Facilities ), and (2) paying certain costs of issuance in connection with the financing (collectively, the Series 2010A Project ), pursuant to an Indenture of Trust, dated as of September 1, 2010 (the Original Indenture ) by and between the Authority and Deutsche Bank National Trust Company, as trustee (the Trustee ); and WHEREAS, the proceeds of the Series 2010A Bonds were loaned to the Borrower to finance the cost of the Project pursuant to the Loan Agreement, dated as of September 1, 2010, by and between the Authority and the Borrower (the Original Loan Agreement ); and 5
WHEREAS, the Borrower has requested that the Authority issue an additional series its Taxable Recovery Zone Facility Revenue Bonds (GreenHunter Mesquite Lake, LLC Project), Series 2010B, in an aggregate principal amount not to exceed $25,000,000 (the Series 2010B Bonds and, together with the Series 2010A Bonds, the Bonds ) pursuant to the Original Indenture pursuant to the Act for the benefit of the Borrower to finance, or reimburse the Borrower for, additional costs of the acquisition, construction, refurbishment, installation and equipping of the Facilities and additional costs of issuance in connection with the Bonds (the Series 2010B Project and, together with the Series 2010A Project, the Project ); and and WHEREAS, the Series 2010B Bonds will be issued on parity with the Series 2010A Bonds; WHEREAS, the Authority will loan the proceeds of the Series 2010B Bonds to the Borrower and the Borrower will agree to repay the loan pursuant to the terms of the Amended and Restated Loan Agreement (as hereinafter defined); and WHEREAS, in connection with the execution and delivery of the Series 2010 B Bonds and the remarketing of the Series 2010A Bonds, certain amendments are required to be made to the Original Indenture and the Original Loan Agreement; and WHEREAS, pursuant to Section 11.02 of the Original Indenture, the Authority and the Trustee may modify or supplement the Original Indenture with the consent of holders of not less than a majority in aggregate principal amount of the outstanding Bonds, and pursuant to Section 12.02 of the Original Loan Agreement, the Original Loan Agreement may be modified or amended with the written consent of the Trustee and holders of not less than a majority in aggregate principal amount of the outstanding Bonds (such consents, collectively, the Required Consents ); and WHEREAS, the Series 2010A Bonds will be remarketed and the Series 2010B Bonds will be offered for sale to Approved Institutional Buyers (as defined in the Amended and Restated Indenture, hereinafter defined) through a limited offering memorandum; and WHEREAS, there have been filed with the Secretary of the Authority the following documents: (a) (b) (c) (d) the proposed form of the Amended and Restated Indenture of Trust (the Amended and Restated Indenture ), including the form of the Series 2010B Bonds as an exhibit thereto, pursuant to which the Series 2010B Bonds will be issued and secured; the proposed form of the Amended and Restated Loan Agreement (the Amended and Restated Loan Agreement ); the proposed form of the Bond Placement and Remarketing Agreement (the Bond Placement and Remarketing Agreement ), by and between Piper Jaffray & Co., as placement and remarketing agent, or another agent selected by the parties (the Placement and Remarketing Agent ), and the Authority and approved by the Borrower; and the proposed form of Limited Offering Memorandum (the Limited Offering Memorandum ) to be used by the Placement and Remarketing Agent in connection with the remarketing, placement and sale of the Bonds; and 6
WHEREAS, the Facilities are expected to provide significant benefits to the residents of the County and surrounding communities through the creation of employment opportunities for residents of the County and surrounding communities over the long term; and WHEREAS, the financing for the Borrower through the Authority will result in a more economical and efficient funding process because of the Authority s expertise in conduit financings; and NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the California Enterprise Development Authority, as follows: Section l. financing the Project. The Authority finds that it is in the public interest to assist the Borrower in Section 2. (a) Subject to subsection (b) and subject to receipt by the Authority of the Required Consents: the Authority hereby authorizes and approves (i) the issuance of the Series 2010B Bonds on a taxable basis pursuant to and in accordance with the provisions of the Amended and Restated Loan Agreement and the Amended and Restated Indenture, in an aggregate principal amount not to exceed $25,000,000, (ii) the remarketing and sale of the Bonds in accordance with the terms of the Bond Placement and Remarketing Agreement to the Placement and Remarketing Agent, and (iii) the loan of the proceeds thereof to the Borrower pursuant to the provisions of the Amended and Restated Loan Agreement. (b) The Bonds and the interest thereon shall be special, limited obligations of the Authority, and payment of the principal of, redemption premium, if any, and interest on, the Bonds shall be made solely from loan payments made by the Borrower under the Loan Agreement and certain moneys held under the Indenture, and the Bonds shall not be deemed to constitute a general obligation of the Authority or of any member of the Authority or an obligation or commitment by the Authority to expend any of its funds other than from certain funds received under the Loan Agreement. Section 3. Subject to receipt by the Authority of the Required Consents, the proposed form of the Amended and Restated Loan Agreement relating to the Bonds, between the Authority and the Borrower, on file with the Secretary of the Authority, is hereby approved. The Chair or the Vice Chair of the Board of Directors, or the Executive Director of the Authority (individually, an Authorized Signatory and, collectively, the Authorized Signatories ), acting alone, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Amended and Restated Loan Agreement in substantially the form filed with the Authority prior to this meeting, with such changes and insertions therein consistent with the stated terms of this Resolution as the Authorized Signatory executing the same, with the advice of the Authority Counsel, may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 4. Subject to receipt by the Authority of the Required Consents, the proposed form of the Amended and Restated Indenture relating to the Bonds, between the Authority and the Trustee, on file with the Secretary of the Authority, is hereby approved. Any Authorized Signatory, acting alone, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver to the Trustee the Indenture in substantially the form filed with the Authority prior to this meeting, with such changes and insertions therein consistent with the stated terms of this 7
Resolution as the Authorized Signatory executing the same, with the advice of the Authority Counsel, may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The dates, maturity dates, interest rates, interest payment dates, denominations, forms, registration privileges or requirements, place or places of payment, terms of redemption and other terms of the Bonds shall be as provided in the Amended and Restated Indenture, as finally executed. Section 5. The proposed form of the Bond Placement and Remarketing Agreement relating to the Bonds, between the Placement and Remarketing Agent and the Authority and approved by the Borrower, on file with the Secretary of the Authority, is hereby approved. Any Authorized Signatory, acting alone, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Bond Placement and Remarketing Agreement in substantially the form filed with the Authority prior to this meeting, with such changes and insertions therein consistent with the stated terms of this Resolution as such Authorized Signatory executing the same, with the advice of the Authority Counsel, may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 6. The proposed form of Limited Offering Memorandum, as presented to this meeting, is hereby approved. Any Authorized Signatory is hereby authorized and directed, for and on behalf of the Authority, to execute the Limited Offering Memorandum, in substantially said form, with such changes and insertions therein as such Authorized Signatory executing the same, with the advice of the Authority Counsel, may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 7. The Placement and Remarketing Agent is hereby authorized to distribute the Limited Offering Memorandum in preliminary form, to persons who may be interested in the purchase of the Bonds and to deliver the Limited Offering Memorandum in final form to the purchasers of the Bonds, in each case with such changes as may be approved as aforesaid. Section 8. The Series 2010B Bonds shall be executed by the manual or facsimile signature of the Chair or the Vice Chair of the Board of Directors or the Executive Director of the Authority and attested by the manual or facsimile signature of the Secretary or Assistant Secretary of the Authority in the form set forth in and otherwise in accordance with the Indenture. Section 9. The Bonds, when so executed, shall be delivered to the Trustee for authentication by the Trustee. The Trustee is hereby requested and directed to authenticate the Bonds by executing the Trustee's Certificate of Authentication appearing thereon and to deliver the Bonds, when duly executed and authenticated, to the Placement and Remarketing Agent, in accordance with written instructions executed on behalf of the Authority by any Authorized Signatory, which instructions said Authorized Signatory is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver to the Trustee. Such instructions shall provide for the delivery of the Bonds to the Placement and Remarketing Agent in accordance with the Bond Placement and Remarketing Agreement, upon payment of the purchase price thereof. Section 10. Each Authorized Signatory and other appropriate officers and agents of the Authority is each hereby authorized and directed to take any and all actions necessary or appropriate, not inconsistent with the terms of this Resolution and of the Indenture to effect the execution, authentication and delivery of the Bonds to the Placement and Remarketing Agent, including, without limitation: giving the written order of the Authority for the authentication and delivery of the Bonds by the Trustee, furnishing of a tax regulatory agreement or certificate and other 8
appropriate certificates, closing documents and other documents contemplated by this Resolution, the Amended and Restated Indenture, the Amended and Restated Loan Agreement and the Bond Placement and Remarketing Agreement. The Secretary or Assistant Secretary of the Authority is authorized to attest the execution of the documents and certificates contemplated by this Resolution. Section 11. All approvals, consents, directions, notices, orders, requests and other actions permitted or required by any of the documents authorized by this Resolution, including, without limitation, any of the foregoing which may be necessary or desirable in connection with any amendment of such documents, or any redemption, purchase or defeasance of the Bonds, may be given or taken by any Authorized Signatory, without further authorization by the Board of Directors of the Authority, and each Authorized Signatory is hereby authorized and directed to give any such approval, consent, direction, notice, order or request and to take any such action which such Authorized Signatory, with the advice of bond counsel and legal counsel to the Authority, may deem necessary or desirable to further the purposes of this Resolution. Section 12. All actions of the officers, directors, employees and agents of the Authority in conformity with the purpose and intent of this Resolution and in furtherance of the issuance and sale of the Bonds, as contemplated by this Resolution and the documents referred to herein, whether heretofore or hereafter taken, shall be and are hereby ratified, confirmed and approved. Section 13. The provisions of this Resolution are hereby declared to be separable, and if any action, phrase or provision is for any reason declared to be invalid, such declaration does not affect the validity of the remainder of the sections, phrases and provisions. Section 14. This Resolution shall take effect from and after its adoption. The provisions of this Resolution are hereby declared to be separable, and if any action, phrase or provision is for any reason declared to be invalid, such declaration does not affect the validity of the remainder of the sections, phrases and provisions. 9
PASSED AND ADOPTED this 13 th day of October, 2010. CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY By: Wayne Schell, Chair ATTEST: Gurbax Sahota, Assistant Secretary 10
I, the undersigned, the duly appointed and qualified Assistant Secretary of the California Enterprise Development Authority, do hereby certify that the foregoing resolution was duly adopted by the Board of Directors of said Authority at a duly called meeting of the Board of Directors of said Authority held in accordance with law on October 13, 2010. Gurbax Sahota, Assistant Secretary 11