HomeMy WebLinkAbout2009-09-14 09-292 ORDERCOUNCIL ACTION
Item No. v g 292
Date: 9/14/2009
Item/Subject: Order, Authorizing Refinancing of Certain of the City of Bangor's Existing Bond
and Lease Obligations and the Issuance of the City's General Obligation Bonds
and a Tax Levy Therefor.
Responsible Department: Finance
Commentary:
The attached order would authorize the refunding of $4,375,000 in outstanding 1997 bonds,
$1,375,000 in outstanding 1998 bonds and approximately $5,985,000 in School Department
Honeywell lease obligations. As the short term municipal bond market remains favorable, the City
anticipates issuing a total of approximately $14,245,000 of 10 year debt in October. The rest of the
financing is contained in a separate bond order to finance current capital improvements.
Based on current market conditions, the City anticipates realizing significant savings over the
remaining life of the debt. The City's financial advisory has indicated that we can expect an interest
of approximately 3% on the new issue compared to the rates currently carried by the existing debt
of: 5.0% to 5.30% for the 1997 bonds, 4.05% to 4.60% for the 1998 bonds, and 5.19% for the
Honeywell lease.
Department Head
Manager's Comments:
This item will require a Public Hearing on 9/28/09
City Manager
Associated Information:
Budget Approval:
FiWance Director
Legal Approval:
City Solicitor
Introduced for
Passage
x First Reading Page _ of _
x Referral —Finance Committee of 9/21/09
9 292
Assigned to Councilor — Stone September 14, 2009
CITY OF BANGOR
(TITLE.) Order, Authorizing Refinancing of Certain of the City of Bangor's Existing Bond and
Lease Obligations and the Issuance of the City's General Obligation Bonds and a Tax
Levy Therefor.
WHEREAS, on or about September 1, 1997 and December 1, 1998, the City of Bangor issued
its general obligation bonds in the original stated principal amount of $8,500,000
and $3,394,000 respectively to finance the costs of certain capital improvement
and in furtherance of other municipal purposes (the "Prior Bonds); and
WHEREAS, on or about December 22, 2008, the City of Bangor entered into a lease purchase
agreements with Honeywell Global Finance LLC in the original stated principal
amount of $7,091,928 to provide funds to finance certain energy efficiency
improvements in various City School facilities (together with the Prior Bonds, the
"Prior Obligations); and
WHEREAS, due to the drop in available interest rates, the City desires to refund and refinance
a portion the Prior Obligations through issuance of its general obligation refunding
bonds, and in order to obtain interest rate savings on the Prior Obligations;
Now therefore, by the City Council of the City of Bangor be it hereby ORDERED.
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, there is hereby authorized the issue and sale
at one time and from time to time up to Eleven Million Seven Hundred Sixty -Five Thousand
Dollars ($11,765,000) aggregate principal amount of general obligation bonds of the City of
Bangor. The proceeds derived from the sale of said bonds, including premium, if any, shall be
used and are hereby appropriated to refund a portion of the Prior Obligations, to pay
redemption premium thereon, if any, interest accrued and unpaid to the redemption date and
issuance costs with respect thereto.
THAT the date, 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 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.
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THAT said bonds shall be signed by the Finance Director, countersigned by the
Chairman of the City Council, seated with the seal of the City, attested by its Clerk, and that
said bonds shall be in such form and contain such terms and provisions not inconsistent
herewith as they may approve, their approval to be conclusively evidenced by their execution
thereof. Any issue of bonds may be consolidated with and issued at the same time as any
other issue of bonds authorized prior to their issuance, and the bands may be divided into
multiple series and issued in separate plans of financing, with the approval of the Finance
Committee
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 seat of the City, attested by its Clerk, 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, 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
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 in lieu of physical certificates of the bonds and notes hereinbefore authorized, the
Finance Director be and hereby is authorized to undertake all acts necessary to provide for the
issuance and transfer of such bonds and 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 the Finance Director be and hereby is
authorized and empowered to enter into a Letter of Representation or any other contract,
agreement or understanding necessary or, in her opinion, appropriate in order to qualify the
bonds for and participate in the Depository Trust Company Book -Entry Only System.
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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, 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 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 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 incurred to refund the Prior Obligations;
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
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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 refunding of the Prior Obligations, 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 bonds
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 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, 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
September 14, 2009
First Reading & Referral to Finance
Committee of 9/21/09 at 5pm
CITY CLERK
IN CITY COUNCIL
September 30, 2009
Motion Made and Seconded for Passage
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 Passage
Passed
v
DEPUTY CITY CLE
09-292
(TITLE,) Authori�Bafinancing of Certain
Ofrt= C-1 of Baneor's Existing Bond and
Lease Ohlieati.ons and the Issuance of the
W r3c'G General Obligation Bonds and a Tag Levy
Therefor (First Reading & Referral to Finance
Committee of 9/21/09 at 5pm)
Assigned to Councilor "�