Loading...
HomeMy WebLinkAbout2022-11-14 23-009 OrderCITY COUNCIL ACTION Council Meeting Date: 11/14/2022 Item No: 23-009 Responsible Dept: School Department Requested Action: Order Map/Lot: N/A Title, Order Authorizing Issuance of $2,600,000 of the City's General Obligations Bonds and a Tax Levy Therefor Summary This Order would authorize the issuance of $2,600,000 of the City's general obligation bonds to replace the heating system at Fruit Street School. In 2018, the School Department hired Oak Point Associates and Carpenter Associates to complete a system wide study of all school facilities. The report identified significant deficiencies with the Fruit Street School heating system. Specifically, the report found instances of scaling within the interior and exterior of the steam piping, corroded hangers which compromise the piping system, and leaking water into trenches that could foster an unhealthy environment. The City's Charter requires that bonds issued for a single capital expenditure over a proscribed amount are subject to voter referendum, unless the City Council finds, determines and declares that an emergency exists. As described in the Oak Point report, the heating system deficiency creates an unacceptable risk to the health and safety of the residents of the City and the users of Fruit Street School. Therefore, the City Council finds, determines, and declares that the capital expenditures constitute an emergency and shall be excepted from the referendum approval requirements of Article VIII, Section 19(a)(1) of the City Charter. Committee Action Committee: Finance Committee Meeting Date: 10/17/2022 Action: Recommend for passage For: Against: Staff Comments & Approvals This item will require a public hearing on November 28, 2022 City Manager Introduced for: First Reading /"a= City Solicitor Finance Director CITY OF BANGOR ORDER Date: 11/14/2022 Item No: 23-009 Assigned to Councilor: Sprague Authorizing Issuance of $2,600,000 of the City's General Obligations Bonds and a Tax Levy Therefor WHEREAS, the City of Bangor desires to finance improvements to Fruit Street School (the "Project" as further defined below), with estimated project cost of approximately $2,600,000; and WHEREAS, the current estimated cost of the Project, and the amount of bonds the City expects to authorize and issue to finance the Project exceed the current referendum threshold established under Article VIII, Section 19(a) of the City Charter; and WHEREAS, as determined by the City Council, the Project is necessary for the preservation of public health or safety of the residents of the City of Bangor, which circumstances constitute an emergency under Article VIII, Section 19(b)(vi) of the City Charter; and NOW THEREFORE, following a public hearing held upon due notice posted and published pursuant to Article VIII, Section 13 of the City Charter, Be it Ordered by the City Council of the City of Bangor that, pursuant to 30 A M.R.S.A. §5772, Section 13 of Article VIII of the City Charter (Private and Special Laws of 1931, Chapter 54 and all amendments thereof and acts additional thereto), and all other authority thereto enabling, there is hereby authorized and approved the issue and sale of the City's general obligation bonds in an amount not to exceed the aggregate principal amount of Two Million Six Hundred Thousand Dollars ($2,600,000). The proceeds derived from the sale of said bonds, including premium, if any, and any investment earnings thereon shall be used and are hereby appropriated to pay a portion of the costs (as herein defined) of the following Projects. Description Fruit Street School Heating System Amount Estimated Life $2,600,000 25 years THAT the estimated weighted period of utility for the property constituting the Projects to be financed with the proceeds of the bonds is hereby determined to be the period of time indicated above for said Projects. THAT the Finance Director, with the approval of the Finance Committee, be and hereby is authorized to prepare, issue, and sell such bonds in the name of and on behalf of the City, at one time, or from time to time, as one or more separate bond issues, and to determine the date(s), maturities (not to exceed the maximum term permitted by law), denominations, interest rate or rates, place of payment, and other details of said bonds, including the timing and provision for their sale and award, such approval to be conclusively evidenced by the execution thereof. 23-009 11/14/2022 BE IT FURTHER ORDERED. - THAT the City Council finds, determines and declares with respect to the Project that an emergency exists within the meaning of Article VIII, Section 19(b)(vi) of the Charter as follows: • Fruit Street School was constructed in.19S4 and the industry standard useful life of stream piping. is 40-50 years, • used on a report of Oak Point Associates and Carpenter Associates presented to the City Council, the piping has far surpassed the recommended useful life and is showing signs of corrosion, Ileaks, and is causing further damage to the other utility trench piping and conduits;; These ciircumstances create an unacceptable risk to the health and safety of the residents of the City ands the users of Fruit Street School; There its therefore a substantijal public exigency to speedily acquire, install, replace and improve the Fruit Street School heating system in order to meet the needs of the residents of the City and the users of Fruit Street School; 0ecause there was and is an urgent and unavoidable need; for the Project to commence, proceed and be completed in an expeditious manner, the City Council funds, determ,iines ands declares that the above circumstances constitute emergency circumstances under Article VIII, Section I,9(b)(vil) of the City Charter, and that the authoriizatijon and approval of the general) obligation bonds to be issued for the Project are and shall be excepted from the referendum approval requirements of Article VIII, Section 19(a)(1) of the City Charter. THAT in each of the years during which any of the bonds authorized hereby are outstanding, there shall be levied a tax in an amount that, with other revenues, if any, available for such purpose, shall be sufficient to pay the interest on said bonds, payable in such years, and the principal of such bonds maturing or redeemed in such years. THAT pursuant to 30 A M.R.S.A. §5772, Section 15 of Article VIII of the City Charter and any other authority thereto enabling, the Finance Director, with the approval of the Finance Committee, is hereby authorized and empowered, in the name of and on behalf of the City, to issue temporary notes of the City in anticipation of the bonds authorized hereby. THAT the bonds and temporary notes authorized hereby shall be signed, in the name and on behalf of the City, by the Finance Director, countersigned by the Chair of the City Council, sealed with the seal of the City, attested by its Clerk. THAT the Finance Director, with the approval of the Finance Committee, be and hereby is authorized and empowered, in the name of and on behalf of the City, to establish, determine and approve the date(s), maturity(ies) (not to exceed the maximum term permitted by law), denomination (s), interest rate(s), place(s) of payment, and other details of the bonds and temporary notes authorized hereby, including the timing and provision for their sale and award, and to provide that any of such bonds may be made subject to call for redemption, with or without a premium, before the maturity date(s) of such bonds, as provided in 30 A M.R.S.A. §5772(6), as amended. THAT the Finance Director be and hereby is authorized and empowered, in the name of and on behalf of the City, to execute and deliver all such contracts, agreements, investment agreements, tax compliance agreements or arbitrage certificates, certificates, instruments and other documents as may be necessary or advisable, with the advice of counsel for the City, in connection with the financing of the Project and the sale, 23-009 11/14/2022 execution, issuance, and delivery by the City of the bonds and temporary notes authorized hereby, and the investment of the proceeds thereof (the "Bond Documents"), which Bond Documents shall be in such form and contain such terms and provisions including, without limitation, the waiving of the City's sovereign or governmental immunity with respect to the enforceability of any of the forgoing, which waiver is hereby authorized, confirmed and approved, and such other details as he shall approve, his approval to be conclusively evidenced by his execution thereof. THAT the Finance Director be and hereby is authorized and empowered, in the name of and on behalf of the City, to select the underwriter, registrar, paying agent and transfer agent, municipal or financial advisor, and bond counsel for the bonds or temporary notes authorized hereby and to execute and deliver any contracts or agreements as may be necessary or appropriate in connection therewith. THAT the Finance Director be and hereby is authorized and empowered, in the name of and on behalf of the City, to prepare, or cause to be prepared, a Preliminary Official Statement and an Official Statement for use in the offering and sale of the bonds or temporary notes authorized hereby, such Preliminary Official Statement and Official Statement to be in such form and contain such information as may be approved by the Finance Director, and that the use and distribution of the Preliminary Official Statement and the Official Statement in the name of and on behalf of the City in connection with any offering of the bonds or temporary notes for sale be and hereby is approved. THAT the bonds authorized hereby shall be transferable only on the registration books of the City kept by the transfer agent, and said principal amount of the bonds of the same maturity (but not of other maturity), upon surrender thereof at the principal office of the transfer agent, with a written instrument of transfer satisfactory to the transfer agent duly executed by the registered owner or his or her attorney duly authorized in writing. THAT the Finance Director and Chair of the City Council from time to time, in the name and on behalf of the City, shall execute such bonds as may be required to provide for exchanges or transfers of bonds as heretofore authorized, and in case any officer of the City whose signature appears on any bond or note shall cease to be such officer before the delivery of said bond or note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery thereof. THAT upon each exchange or transfer of the bonds authorized hereby, the City and transfer agent may make a charge sufficient to cover any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange, and subsequent to the first exchange or transfer, the cost of which shall be borne by the City, the cost of preparing new bonds upon exchanges or transfers thereof shall be paid by the person requesting the same. THAT in lieu of physical certificates of the bonds and temporary notes authorized hereby, the Finance Director be and hereby is authorized and empowered, in the name of and on behalf of the City, to undertake all acts necessary to provide for the issuance and transfer of such bonds and temporary notes in book -entry form pursuant to the Depository Trust Company Book -Entry Only System, as an alternative to the provisions of the foregoing paragraphs regarding physical transfer of bonds, and to enter into a Letter of Representation or any other contract, agreement or understanding necessary or, in his opinion, appropriate in order to qualify the bonds and temporary notes for and participate in the Depository Trust Company Book -Entry Only System. THAT the bonds and temporary notes authorized hereby may be issued an either a taxable or a tax- exempt basis, or a combination thereof, as determined by the Finance Director, with the approval of the Finance Committee. 23-009 11/14/2022 THAT, if the bonds and temporary notes authorized hereby, or any part of them, are issued on a tax exempt basis, the Finance Director be and hereby is authorized and empowered, in the name of and on behalf of the City, to covenant and certify that no part of the proceeds of the issue and sale of the bonds or temporary notes authorized to be issued hereunder and no part of the Project shall be used directly or indirectly in any manner that would cause such bonds or temporary notes to be "private activity bonds" or "arbitrage bonds" within the meaning of Sections 141 and 148 of the Internal Revenue Code of 1986, as amended (the "Code'). THAT, if the bonds and temporary notes authorized hereby, or any part of them, are issued on a tax exempt basis, the Finance Director be and hereby authorized and empowered, in the name of and on behalf of the City, to covenant and agree, for the benefit of the holders of such bonds or temporary notes, that the City will file any required reports and take any other action that may be necessary to ensure that interest on the bonds or temporary notes will remain exempt from federal income taxation and that the City will refrain from any action that would cause interest on the bonds or temporary notes to be subject to federal income taxation. THAT, if the bonds and temporary notes authorized hereby, or any part of them, are issued on a tax exempt basis, the Finance Director be and hereby is authorized and empowered, in the name of and on behalf of the City, to take all such action as may be necessary to designate the bonds or temporary notes as qualified tax-exempt obligations for purposes of Section 265(b) of the Code, it being the City Council's intention that, to the extent permitted under the Code, the bonds or temporary notes be Section 265(b) designated and that the Finance Director, with the advice of bond counsel, make the required Section 265(b) election with respect to such bonds or temporary notes to the extent that the election may be available and advisable as determined by the Finance Director. THAT the Finance Director be and hereby is authorized and empowered, in the name of and on behalf of the City, to covenant, certify, and agree, for the benefit of the holders of such bonds or temporary notes, that the City will file any required reports, make any annual financial or material event disclosure, and take any other action that may be necessary to ensure that the disclosure requirements imposed by Rule 15c2-12 of the Securities and Exchange Commission, if applicable, are met. THAT the term "cost" or "costs" as used herein and applied to the Project, or any portion thereof, includes, but is not limited to: (1) the cost to design, construct, renovate, refurbish, improve, acquire, replace, furnish and equip the Project; (2) the cost of land, easements and other real property interests, landscaping and site preparation, utility extensions, all appurtenances and other fixtures, facilities, buildings and structures either on, above, or under the ground which are used or usable in connection with the Project; (3) the cost of feasibility studies, surveys, environmental studies and assessments, engineering, plans and specifications, legal and other professional services associated with the Project; (4) issuance costs, including premiums for insurance, capitalized interest and other financing charges, fees and expenses relating to the financing transaction. THAT the investment earnings on the proceeds of the bonds and temporary notes authorized hereby, if any, and the excess sale proceeds of such bonds and temporary notes (including premium), if any, be and hereby are appropriated for the following purposes: • To any costs of the Project in excess of the principal amount of the bonds or temporary notes authorized hereby; • If the bonds or temporary notes are issued on a tax exempt basis, in accordance with applicable terms and provisions of the Arbitrage and Use of Proceeds Certificate delivered in connection 23-009 11/14/2022 with the sale of such bonds or temporary notes including, to the extent permitted thereunder, to the City's General Fund; • To pay debt service on such bonds. THAT if the actual cost of the Project differs from the estimated cost set forth herein, whether due to completion, delay or abandonment of the Project or for any other reason, the Finance Director is authorized and empowered, in his discretion and in the name and on behalf of the City, to reallocate proceeds of the bonds to any other project or improvement that the City Council has approved or may in the future approve as part of the City's annual capital improvement plan. THAT the Finance Director, Chair of the City Council, Clerk, and other proper officials of the City be, and hereby are, authorized and empowered in the name of and on behalf of the City to do or cause to be done all such acts and things as may be necessary or advisable, with the advice of counsel for the City, in order to effect the sale, issuance, execution, and delivery by the City of the bonds and temporary notes authorized hereby. THAT if the Finance Director, Chair of the City Council, or Clerk are for any reason unavailable to approve and execute the bonds or temporary notes authorized hereby, or any related Bond Documents, the person or persons then acting in such capacity, whether as an assistant, a deputy, on an interim basis or otherwise, is authorized to act for such official, and to approve and execute such bonds or temporary notes, or any related financing documents, with the same force and effect as if such official had himself or herself performed such act. THAT if any of the officers or officials of the City who have signed or sealed the bonds or temporary notes authorized hereby shall cease to be such officers or officials before such bonds or temporary notes so signed and sealed shall have been actually authenticated or delivered by the City, such bonds and temporary notes nevertheless may be authenticated, issued, and delivered with the same force and effect as though the person or persons who signed or sealed such bonds or temporary notes had not ceased to be such officer or official; and also any such bonds or temporary notes may be signed and sealed on behalf of the City by those persons who, at the actual date of the execution of such bonds or temporary notes, shall be the proper officers and officials of the City, although at the nominal date of such bonds or temporary notes, any such person shall not have been such officer or official. THAT the bonds authorized hereby may be consolidated with and issued at the same time as any other issue of bonds authorized by the City Council, and the bonds authorized hereby may be divided into multiple series and issued in separate plans of financing, with the approval of the Finance Committee THAT during the term any of the bonds are outstanding, the Finance Director be and hereby is authorized and empowered, in the name and on behalf of the City, to issue and deliver refunding bonds on either a current or advance refunding basis, to refund some or all of the bonds then outstanding, and to establish, determine and approve, in the name and on behalf of the City, the date(s), maturity(ies) (not to exceed 30 years from the date of issuance of the original bonds), and all other details of such refunding bonds including the form and manner of their sale and award, and to provide that any of such refunding bonds may be made subject to call for redemption, with or without a premium, before the prior to their stated date(s) of maturity, as provided in 30 A M.R.S.A. §5772(6), as amended, and that each such refunding bond shall be signed by the Finance Director, countersigned by the Chair of the City Council, sealed with the seal of the City, attested by its Clerk. THAT the City Council hereby declares its official intent pursuant to Section 1.150-2(e) of the Income Tax Regulations that the City reasonably expects to use the proceeds of the bonds or temporary notes 23-009 11/14/2022 authorized hereby and issued on a tax-exempt basis to reimburse certain original expenditures paid by the City within 60 days prior to adoption of these resolutions or that are to be paid after adoption of this Order, which original expenditures have been or will be incurred in connection with the Project, and that the City Council reasonably expects that the maximum principal amount of tax-exempt obligations to be issued by the City to finance the Project and related legal expenses will not exceed $2,600,000; and that this declaration of official intent shall be kept in the permanent records of the City and shall be reasonably available for public inspection. IN CITY COUNCIL NOVEMBER 14, 2022 COrd 23-009 Motion made and seconded for First Reading Vote: 9 – 0 Councilors Voting Yes: Davitt, Hawes, Leonard, Pelletier, Schaefer, Sprague, Tremble, Yacoubagha, Fournier Councilors Voting No: None Passed CITY CLERK IN CITY COUNCIL NOVEMBER 28, 2022 COrd 23-009 Motion made and seconded to Open Public Hearing Public Hearing Opened Motion made and seconded to Close Public Hearing Public Hearing Closed Motion made and seconded for Passage Passed CITY CLERK