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HomeMy WebLinkAbout2009-04-13 09-126 ORDERCOUNCIL ACTION Item No._ 0 9 126 Date: 4-13-2009 Item/Subject: Order, Authorizing a Loan in the Amount of $2,837,000 from the Maine Municipal Bond Bank State Revolving Fund, and the Issuance of the City's General Obligation Bonds and a Tax Levy Therefor Responsible Department: Finance Commentary: As you are aware, the City was recently notified of funding that will become available under the American Recovery and Reinvestment Act of 2009 to fund a variety of nonpoint source storm water improvements. This funding is made available through the Maine Municipal Bond Bank State Revolving Fund program. As such, the City will be required issue general obligations bonds through the program. Of the $2,837,000 in bonds to be issued, $1,434,555 (or 50.6%) will have the principal forgiven and $1,402,445 (or 49.4%) will be a no interest loan. This financing plan was reviewed with the Finance Committee at its March 16, 2009 meeting. The attached order would authorize the issuance of the debt through the Maine Municipal Bond Bank in the form described above for the purpose of funding projects within the Birch and Penjajawoc Stream watersheds as well as to purchase a street sweeper and in -stream monitoring equipment. aZ 2 u ` � DeVartment Head Manager's Comments: Recommend approval. Associated Information: This item will require a Public Hearing Budget Approval: Legal Approval: Introduced for Passage X First Reading Referral / I ` 'moiCity Manager Page _ of Finance Director `wtity Solicitor 09 126 Assigned to Councilor stone April 13, 2009 CITY OF BANGOR (TrTLE.) Order, Authorizing a Loan in the Amount of $2,837,000 from the Maine Municipal Bond Bank State Revolving Fund and the Issuance of the City's General Obligation Bonds and a Tax Levy Therefor. By the City Council of the City of Bangor. ORDERED, THAT the Finance Director is hereby authorized, in the name of and on behalf of the City, to borrow an amount not to exceed $2,837,000 at any one time outstanding (of which approximately 50.6% is anticipated to be forgiven) from the Maine Municipal Bond Bank (the "*Bond Bank') pursuant to its Revolving Loan Fund program, the proceeds of which loan are hereby appropriated to pay a portion of the costs (as herein defined) of the following Projects: Estimated DescrtRb�on Life Proposed Non Point Source storm water improvements in the Birch and Penjajawoc stream 40 Years watersheds Proposed Non Point Source storm water 10 Years improvements in Penjajawoc stream watershed (porous pavement) Street sweeper 10 Years In -stream monitoring equipment 5 Years THAT in furtherance of said loan, the Finance Director be and hereby is authorized and empowered, in the name and on behalf of the City, to execute and deliver, under the seal of the City attested by its Clerk and countersigned by the Chairman of the City Council, a Loan Agreement between the City and the Bond Bank, said Loan Agreement to contain such usual and customary terms and provisions, not contrary to the general tenor hereof, as the Bond Bank may require in connection with the State Revolving Loan Fund, and as the Finance Director may approve, her approval to be conclusively evidenced by the execution thereof. THAT pursuant to 30-A M.R.S.A. §5772, Section 13 of Article VI 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, and to evidence such loan, there is hereby authorized the issue and sale at one time and from time to time the City's general obligation bonds in like amount to the above authorized loan, not to exceed the aggregate principal amount of Two Million Eight Hundred Thirty-seven Dollars ($2,837,000). The proceeds derived from the sale of said bonds, including premium, if any, and any investment earnings thereon 39 128 shall be used and are hereby appropriated to pay a portion of the costs (as herein defined) of the Projects. THAT the estimated weighted period of utility for the property constituting the Projects to be financed with the proceeds of said loan and bonds is hereby determined to be the period of time indicated above for said Projects. THAT the date, maturities (not to exceed the maximum term permitted by law), denominations, interest rate or rates (not to exceed 5.00% per annum), place of payment, and other details of each issue of said bonds, including the timing and provision for their sale and award shall be determined by the Finance Director with the approval of the Finance Committee. THAT the bonds hereby authorized may be made subject to call for redemption, with or without a premium, before the date fixed for final payment of the bonds, as provided in 30-A M.R.S.A. §5772(6), as amended, as shall be determined by the Finance Director with the approval of the Finance Committee. THAT said bonds shall be signed by the Finance Director, countersigned by the Chairman of the City Council, sealed with the seal of the City, attested by its Clerk. THAT in each of the years during which any of the bonds are outstanding, there shall be levied a tax in an amount that, with other revenues, if any, available for that purpose, shall be sufficient to pay the interest on said bonds, payable in such years, and the principal of such bonds maturing in such years. THAT pursuant to 30-A M.R.S.A. §5772, Section 15 of Article VI of the City Charter and any other authority thereto enabling, the Finance Director, with approval of the Finance Committee is hereby authorized to issue temporary notes of the City in anticipation of the forgoing bond issue, said notes to be signed by the Finance Director, countersigned by the Chairman of the City Council, sealed with the seal of the City, attested by its Cleric, and otherwise to be in such form and contain such terms and provisions including, without limitation, maturities (not to exceed 3 years from the issue date), denominations, interest rate or rates (not to exceed 5.00% per annum), place of payment, and other details as they shall approve, their approval to be conclusively evidenced by their execution thereof. THAT the bonds and notes shall be transferable only on the registration books of the City kept by the transfer agent, and said principal amount of the bonds and notes 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 Chairman of the City Council from time to time shall execute such bonds or notes as may be required to provide for exchanges or transfers of bonds or notes as heretofore authorized, all such bonds or notes to bear the original signature of the Finance Director and Chairman of the City Council, and in case any officer of the City whose signature appears on any bond or note shall cease to be such officer before the deliver 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 bonds or notes, the City and transfer agent shall 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 39 1126 transfer, the cost of which shall be borne by the City, the cost of preparing new bonds or notes upon exchanges or transfers thereof shall be paid by the person requesting the same. THAT the bonds and notes issued in anticipation thereof 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. THAT, if the bonds or notes, or any part of them are issued on a tax exempt basis, the officers executing such bonds or notes be and hereby are individually authorized and directed to covenant and certify on behalf of the City that no part of the proceeds of the issue and sale of the bonds or notes authorized to be issued hereunder shall be used directly or indirectly to acquire any securities or obligations, the acquisition of which would cause such bonds or notes to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code'). THAT, if the bonds or notes, or any part of them, are issued on a tax exempt basis, the officers executing such bonds or notes be and hereby are individually authorized to covenant and agree, on behalf of the City, for the benefit of the holders of such bonds or 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 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 notes to be subject to federal income taxation. THAT the officers executing the bonds or notes be and hereby are individually authorized to covenant, certify, and agree, on behalf of the City, for the benefit of the holders of such bonds or 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, if the bonds or notes, or any part of them, are issued on a tax exempt basis, the Finance Director be and hereby is authorized and empowered to take all such action as may be necessary to designate the bonds or 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 notes be Section 265(b) designated and that the Finance Director with advice of bond counsel, make the required Section 265(b) election with respect to such bonds to the extent that the election may be available and advisable as determined by the Finance Director. 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 purchase price or acquisition cost of all or any portion of the Project; (2) the cost of construction, building, alteration, enlargement, reconstruction, renovation, improvement, and equipping of the Project; (3) the cost of all appurtenances and other facilities either on, above, or under the ground which are used or usable in connection with the Project; (4) the cost of landscaping, site preparation, and remodeling of any improvements or facilities; (5) the cost of all labor, materials, building systems, machinery and equipment; (6) the cost of land, structures, real property interests, rights, easements, and franchises acquired in connection with the Project; (7) the cost of all utility extensions and site improvements and development; (8) the cost of planning, developing, preparation of specifications, surveys, engineering, feasibility studies, legal and other professional services associated with the Project; (9) the cost of environmental studies and assessments; (10) the cost of financing charges and issuance costs, including premiums for I ,39 :126 insurance, interest prior to and during construction and, following completion of construction, for a period not to exceed 3 years from the issue date thereof, underwriters' fees and costs, legal and accounting fees and costs, application fees, and other fees and expenses relating to the financing transaction; and (11) the cost of all other financing authorized hereunder, whether related or unrelated to the foregoing. THAT the investment earnings on the proceeds of the bonds and notes, if any, and the excess proceeds of the bonds or notes (including premium), if any, be and hereby are appropriated for the following purposes: 1. To any costs of the Projects in excess of the principal amount of the bonds or notes authorized hereunder; 2. If the bonds or 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 with the sale of the bonds or notes including, to the extent permitted thereunder, to the City's General Fund; 3. To pay debt service on the Bonds. THAT the Finance Director, Chairman of the City Council, Clerk, and other proper officials of the City be, and hereby are, authorized and empowered in its name and on its behalf to do or cause to be done all such acts and things, and to execute, deliver, file, approve, and record all such financing documents, contracts, agreements, deeds, assignments, certificates, memoranda, abstracts, and other documents as may be necessary or advisable, with the advice of counsel for the City, to carry out the provisions of the resolutions heretofore adopted at this meeting in connection with the Projects, the issuance, execution, sale, and delivery by the City of the bonds and notes and the execution and delivery of the documents, including the entering into of a Loan Agreement with the Bond Bank, as may be necessary or desirable. THAT if the Finance Director, Chairman of the City Council, or Clerk are for any reason unavailable to approve and execute the bonds or any related financing documents, the person or persons then acting in any such capacity, whether as an assistant, a deputy, or otherwise, is authorized to act for such official 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 bunds and notes hereinbefore authorized shall cease to be such officers or officials before the bonds or notes so signed and sealed shall have been actually authenticated or delivered by the City, such bonds or 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 notes had not ceased to be such officer or official; and also any such bonds or 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 notes, shall be the proper officers and officials of the City, although at the nominal date of such bonds or notes any such person shall not have been such officer or official. THAT the following resolutions required by Section C(4)(e) of the State of Maine Revolving Loan Fund Rules, Chapter 595, Department of Environmental Protection and Maine Municipal Bond Bank (the "SRF Regulations'), and governing the loan to be made to the City under the State Revolving Loan Fund Program be and hereby are adopted: 3A A. (1) That a Project Account shall be created for the Projects which shall be separate from all other accounts of the City. If operating revenues are to be used to retire the debt, a sub -account will be established. (2) That the Project Account shall be maintained in accordance with standards set forth by the Maine Municipal Bond Hank and in accordance with generally accepted government account standards. (3) That a final accounting shall be made to the Bank of the total cost of the Projects upon completion of the Projects performance certification as set out in Section G(3) of the SRF Regulations and the City acknowledges that the Bank reserves the right at its sole discretion to be provided with a cost certification of the Projects as built. (4) That an annual audit of the City, prepared by a certified public accountant or licensed public accountant be provided to the Bank for the term of the loan. (5) That the City shall maintain insurance coverage on the Project in an amount adequate to protect the Bank's interest for the term of the loan with the Bank named as loss payee. (6) That the City will comply with any special conditions specified by the Department of Environmental Protection's environmental determination until all financial obligations to the State have been discharged. (7) That the City certify to the Bank that it has secured all permits, licenses and approvals necessary and that it has a dedicated source of revenue for repayment. (8) That the City establish a rate, charge or assessment schedule in order to pay principal and interest. Such rate change or schedule shall provide total operations and debt service coverage at a level at which the coverage for the Bank is sufficient. (9) That the City must demonstrate the ability to pay reasonably anticipated costs of operating and maintaining the financed Projects. (10) That the City abide by the SRF Regulations, as revised and amended and relevant State statutes of the State of Maine. THAT during the term any of the Bonds are outstanding, the Finance Director is hereby authorized, in the name and on behalf of the City, to issue and deliver refunding bonds to refund some or all of the bonds then outstanding, and to determine the date, form, interest rate (not to exceed 5.00% per annum), maturities (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. The Finance Director is hereby further authorized to provide that any of such refunding bonds hereinbefore authorized be made callable, with or without premium, prior to their stated date(s) of maturity, and each refunding bond issued hereunder shall be signed by the Finance Director, countersigned by the Chairman of the City Council, sealed with the seal of the City, attested by its Clerk. IN CITY COUNCIL April 13, 2009 Fir Reading CITY CLERK IN CITY COUNCIL April 27, 2009 (Motion Made and Seconded to Open the Public Hearing (Public Hearing Opened No one from the Public Came forward Motion Made and Seconded to Close the Public Hearing Public Hearing Closed Motion Made and Seconded for P ssage Pas ITY CLERK (TITLE)Authorizine a Loan in the Amount of $2,837,000 from the Maine Municipal Bond Bank State Revolving Fund and the Issuance of the City's General Obligation Bonds and a Tax T.evy Therefor Assigned to Councilor,