COUNTY. September 22,2009

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1 AGENDA October 13, 2009 COUNTY ADMINISTRATOR SUSAN 5. MURANISHI COUNTY ADMINISTRATOR September 22,2009 DONNA LINTON ASSISTANT COUNTY ADMINISTRATOR Industrial Development Authority of Alameda County Administration Building Oakland, CA Dear Authority Members: SUBJECT: APPROVE AN INDUSTRIAL DEVELOPMENT BOND INDUCEMENT RESOLUTION FOR SANTINI FOODS, INC. (THE "APPLICANT") FOR THE PURPOSE OF MAKING A LOAN TO SANTINI FOODS, INC. OR ANOTHER ENTITY TO BE FORMED BY THE APPLICANT FOR THE PURPOSES OF THE PROPOSED FINANCING (THE "BORROWER"), AND ITS SUCCESSORS AND ASSIGNS RECOMMENDATION: It is recommended that your Authority approve the resolution and preliminary agreement expressing the intent to proceed with a not to exceed amount of $3,000,000 Industrial Development Bond (IDB), for Santini Foods, Inc. and its successors and assigns (the "Applicant") to finance the acquisition of machinery and equipment. DISCUSSION/SUMMARY: Santini Foods, Inc. is applying for up to $3,000,000 to finance the acquisition of machinery and equipment to be used in an existing facility located at Worthley Drive, San, Lorenzo, California owned and operated by the Applicant for the manufacture of milk and syrup products including sweetened condensed milk, evaporated milk and coffee syrups. lidb financing will enable the business, which currently employs 70 people, to investment in new equipment lines to modernize, diversify, increase production and thus accommodate the future growth of the business, including the expected creation of 20 additional jobs over the next two years OAK STREET. SUITE 555. OAKLAND, CALIFORNIA (510) FAX (510)

2 Industrial Development Authority 2 September 22, 2009 Since the Applicant will pay all County costs and the project will retain and add jobs, my office is recommending that your Authority approve the Inducement Resolution and Preliminary Agreement. FINANCING: The project will retain jobs, create employment and increase the property tax base at no cost to the County. Very truly yours, Susan S. Muranishi County Administrator SSM:BK:ks v :\ED\KS\IDB\BOSIDA\INDUCE\Sunlini Equipmenllnducemem Letter.doc Attachment cc: County Counsel Auditor-Controller Treasurer-Tax Collector Chris Bazar, Director, Community Development Agency William M. Lofton, Lofton & Jennings Tyler Abbott, Director o(finance, Santini Foods, Inc. Walter Vennemeyer, Progressive Capital

3 INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF ALAMEDA RESOLUTION NO. ~~ A RESOLUTION MAKING DETERMINATIONS WITH RESPECT TO THE FINANCING OF A PROJECT FOR SANTINI FOODS, INC. WHEREAS, Santini Foods, Inc. and its successors and assigns (the "Applicant") desires to finance the acquisition of machinery and equipment (the "Project") to be used in an existing facility located at Worthley Drive, San Lorenzo, California owned and operated by the Applicant for the manufacture of food products, including syrups, milks and olive oils; WHEREAS, the Applicant is willing to acquire and install the Project within the jurisdiction of the Industrial Development Authority of the County of Alameda (the "Authority") if the Authority will issue industrial development revenue bonds to finance a portion of the costs of the Project pursuant to the California Industrial Development Financing Act, being Title 10 of the California Government Code, as supplemented and amended (the "Act"); WHEREAS, the Applicant has submitted, and this Board of Directors of the Industrial Development Authority of the County of Alameda (this "Board of Directors") has accepted, an application of the Applicant requesting financing of the Project; WHEREAS, the Applicant has requested that the Authority issue approximately $3,000,000 aggregate principal amount of bonds, the interest on which would be not indudable in gross income of the holders thereof (the "Bonds"); WHEREAS, the Authority may not issue the Bonds to finance the Project until this Board of Directors makes certain determinations with respect to the public benefits and qualification of the Project as required by the Act; WHEREAS, the Board of Directors has carefully considered and discussed the information contained in such application and other information necessary to make such determinations; WHEREAS, this Board of Directors desires to induce the Applicant to commence acquisition, construction and installation of the Project at the earliest possible time so as to produce the public benefits set forth herein; WHEREAS, the Authority expects that the Applicant will pay certain expenditures (the "Reimbursement Expenditures") in connection with the Project prior to the issuance of indebtedness for the purpose of financing costs associated with the Project on a long-term basis; WHEREAS, the Authority reasonably expects that certain of the proceeds of the Bonds will be used to reimburse the Reimbursement Expenditures; 09035\inilial-res

4 WHEREAS, Sections (a)(5) and of the treasury regulations promulgated under the Internal, Revenue Code of 1986, as amended (the "Treasury Regulations") require an issuer of taxexempt obligations to declare its reasonable official intent to reimburse, from proceeds of such obligations, expenditures made prior to the issuance of such obligations; and NOW, THEREFORE, this Board of Directors of the Industrial Development Authority of the County of Alameda does resolve as follows: Section 1. correct. Section 2. This Board of Directors finds and declares that the foregoing recitals are true and This Board ofdirectors hereby finds and detennines that: (a) the activities and uses of the Project as equipment for the manufacture of food products are in accord with Section of the Act; (b) the use of the Project is likely to produce (i) employment benefits (within the meaning of Section (b)( 1) of the Act) by securing or increasing the number of employees of the Applicant and any direct users of the Project or the compensation for such employment; and (ii) consumer benefits (within the meaning of Section (b)(3) of the Act) by improving the quantity or quality or reducing the price of products, energy or related services or facilities, and by producing new or improved products or related services or facilities; (c) the issuance of industrial development revenue bonds by the Authority in an amount sufficient to finance certain costs of the Project is likely to be a substantial factor in the accrual of one or more of the public benefits from the use of the Project as proposed in the Applicant's application; and (d) of the Act. the proposed financing is otherwise in accord with the purposes and requirements Section 3. The Authority hereby declares its official intent to use proceeds of indebtedness expected to be issued in an amount not to exceed $3,000,000 of Bonds to make a loan to the Applicant, a portion of which will reimburse the Applicant for Reimbursement Expenditures. Section 4. The declaration of this Board of Directors in Section 3 is made solely for purposes of establishing compliance wlth the requirements of Section (a)(5) and Section of the Treasury Regulations. This declaration does not bind the Authority to make any expenditure, incur any indebtedness, or proceed with the financing of the Project. Section 5. The Secretary or Deputy Secretary is hereby authorized and directed, as soon as possible, to certify and file with the Board of Supervisors of the County of Alameda, a copy of the application from the Applicant accepted by this Board of Directors. Section 6. The Secretary has caused to be published one time in a newspaper of general circulation in the County of Alameda a notice of filing of the applrcation by the Applicant as required by Government Code Section 91530(e) \lnitjal-res 2

5 . Section 7. This Resolution shall lake effect immediately upon its passage. '" '" '" '" '" Approved as to Form RICHARD E. WINNIE, County Counsel By: CC2eA k'<i< [>?)~-- Deputy 09035\inilial-res 3

6 The foregoing resolution was passed and adopted by the Industrial Development Authority of the County of Alameda on October 13,2009, by the following vote: AYES: NOES: ABSTENTIONS: EXCUSED: ATTEST: President Secretary \ini tial-res 4

7 STATE OF CALIFORNIA ) COUNTY OF ALAMEDA ) CERTTFICATE I, Crystal Hishida Graff, the duly appointed, qualified and acting Secretary of the Industrial Development Authority of the County of Alameda, do hereby certify that attached hereto is a true, complete and correct copy of Resolution R ' adopted at a duly called meeting of the Board of Directors of said Authority held in accordance with law on October 13,2009, at which meeting a quorum was present and acting throughout, all as appears in the records of the Board of Directors of said Authority in my custody as the Secretary of the Authority IN WITNESS WHEREOF, I have hereunto subscribed my name this day of _ CRYSTAL mshida GRAFF, Secretary Industrial Development Authority of the County of Alameda 09035\ioitial-res 5