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HomeMy WebLinkAbout2016-03-14 16-106 ORDERCOUNCIL ACTION Item No. 16=106_ Date: March 14, 2016 Item/Subject: Order, Authorizing Refinancing of Certain of the City of Bangor's Existing Bond Obligations (Series 2007) and the Issuance of the City's General Obligation Refunding Bonds and a Tax Levy Therefor Responsible Department: Finance Commentary: The attached Order would authorize the issuance of $1,555,000 in general obligation bonds to refinance outstanding bonds from 2007. The City's general obligation bonds typically include a call feature 10 years into their life. The City will issue bonds in April to "call" $1,555,000 in outstanding 2007 bonds with an interest rate of 4%. The anticipated interest rate for the new debt will be approximately 2%. The City will maintain the final maturity date of September 2026, but overall interest costs will decrease by an estimated $169,000 over the next 10 years. This Order will require a Public Hearing at the March 28th City Council Meeting Department Head Manager's Comments: City Manager Associated Information: Order Budget Approval: Finance Director Legal Approval: ity olicitor Introduced for Passage x First Reading Page _ of x Referral — Finance Committee of 3/21/16 Assigned to Councilor Nealley CI'T'Y OF BANGOR 16-106 MARCH 14, 2016 (TITLE.) Order, Authorizing Refinancing of Certain of the City of Bangor's Existing Bond Obligations (Series 2007) and the Issuance of the City's General Obligation Refunding Bonds and a Tax Levy Therefor. WHEREAS: the City of Bangor previously issued its Series 2007 general obligation bonds to finance the costs of certain capital improvement and in furtherance of other municipal purposes (the "Prior Bonds'); and WHEREAS: due to the drop in available interest rates, the City desires to advance refund and refinance a portion of the Prior Bonds through issuance of its general obligation refunding bonds; 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(f) 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, 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 One Million Five Hundred Fifty-five Thousand Dollars ($1,555,000). 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 refund a portion of the Prior Bonds, 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. THAT said bonds 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, 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 (WW5782.I ) IN CITY COUNCIL MARCH 14, 2016 FIRST READING AND REFERRAL TO FINANCE COMMITTEE MEETING OF MARCH 21, 2016 CITY CLERK IN CITY COUNCIL MARCH 28, 2016 MOTION MADE AND SECONDED TO OPEN PUBLIC HEARING PUBLIC HEARING OPENDED MOTION MADE AND SECONDED TO CLOSE PUBLIC HEARING PUBLIC HEARING CLOSED MOTION MADE AND SECONDED FOR PASSAGE PASSED CITY CLERK 16-106 MARCH 14, 2016 authorized prior to their issuance, and the bonds 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 the bonds 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 shall execute such bonds as may be required to provide for exchanges or transfers of bonds as heretofore authorized, all such bonds to bear the original signature of the Finance Director and Chair 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, 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 upon exchanges or transfers thereof shall be paid by the person requesting the same. THAT in lieu of physical certificates of the bonds 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 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. THAT the officers executing such bonds 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 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 to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code'l. THAT the officers executing such bonds be and hereby are individually authorized to covenant and agree, on behalf of the City, for the benefit of the holders of such bonds, that the City will file any required reports and take any other action that may be necessary to ensure that interest on the bonds will remain exempt from federal income taxation and that the City will refrain from any action that would cause interest on the bonds to be subject to federal income taxation. (W5405782. t ) Ifs -106 MARCH 14, 2016 THAT the Finance Director be and hereby is authorized and empowered to take all such action as may be necessary to designate the bonds 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 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 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, 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 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 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, if any, and the excess proceeds of the bonds (including premium), if any, be and hereby are appropriated for the following purposes: 1. To any costs incurred to refund the Prior Bonds; 2. In accordance with applicable terms and provisions of the Arbitrage and Use of Proceeds Certificate delivered in connection with the sale of the bonds including, to the extent permitted thereunder, to the City's General Fund; 3. To pay debt service on the bonds. THAT if the actual cost of any Project differs from the estimated cost set forth herein, the Finance Director is authorized, in her discretion to reallocate proceeds of the Bonds to any other listed Project. { W5405782.I ) 16-106 MARCH 14, 2016 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 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 Project, the issuance, execution, sale, and delivery by the City of the bonds 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 any of the officers or officials of the City who have signed or sealed the bonds hereinbefore authorized shall cease to be such officers or officials before the bonds so signed and sealed shall have been actually authenticated or delivered by the City, such bonds 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 had not ceased to be such officer or official; and also any such bonds may be signed and sealed on behalf of the City by those persons who, at the actual date of the execution of such bonds, shall be the proper officers and officials of the City, although at the nominal date of such bonds any such person shall not have been such officer or official. THAT if the Finance Director, Chair 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 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 on either a current or advance refunding basis, 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 Chair of the City Council, sealed with the seal of the City, attested by its Clerk. (W5405782.1 )