Loading...
HomeMy WebLinkAbout2012-03-12 12-111 ORDERCOUNCIL ACTION Date: March 12, 2012 Item No. 12 111 Item/Subject: ORDER, AUTHORIZING THE ISSUANCE OF $2,800,000 AGGREGATE PRINCIPAL AMOUNT OF QUALIFIED SCHOOL CONSTRUCTION BONDS. Responsible Department: Finance commentary: This Order authorizes the issuance of up to $2,800,000 in Qualified School Construction Bonds to undertake improvement projects in the schools. In November 2011, the School Department was awarded up to $2,800,000 through a low interest loan program administered by State Department of Education for renovation of schools. The loan program is a Qualified School Construction Bond program (QSCB). The QSCB program is a federally sponsored/funded program with flexible repayment terms. Through this program the City is able to set its principal repayment schedule to have as minimal impact on the budget, ideally not increasing it above its current level. This funding was made available on a competitive basis throughout the State. The projects submitted by the School Department included replacement of roofs, bathroom and locker room renovations, electrical and water main upgrades, exterior wall repairs, improving some ADA accessibility issues, replacement of fire panels and detectors, as well as adding exterior security cameras at certain schools. This is the second QSCB opportunity the schools have qualified for. In late 2011, the City issued $5.5 million of QSCB bonds. The taxable rate of the bonds was 4.75%, and the market provided interest rate subsidy was 4.65%, resulting in net interest cost to the City of 0.10%. Department Head Manager's Comments: This item will require a public hearing on March 26, 2012. 'his �e..,� �„ tev��cx�c( �nr�2cckrv.rnQnc�ieQ9 City�nr (A,p orma Associated Information: -- �, rf" Q,_ C m: tfi�� �►'1 Budget Approval:_ Legal Approval: Introduced for Passage X First Reading Referral { W2940183.1) Finance Director /Zz�ffi City Solicitor Page _ of _ March 12, 2012 Assigned to Councilor - Sprague Of 4 CITY OF BANGOR M O ++ /ti 1, , (TITLE.) ORDER, AUTHORIZING THE ISSUANCE OF $2,800,000 AGGREGATE PRINCIPAL AMOUNT OF QUALIFIED SCHOOL CONSTRUCTION BONDS. BE IT ORDERED BY 7HE CITY COUNCIL OF THE CITYOFQANGOR THAT under and pursuant to sections 54A and 54F of the Internal Revenue Code of 1986, as amended (the "Code"), 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 Two Million Eight Hundred Thousand Dollars ($2,800,000) 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, and investment earnings thereon, shall be used and are hereby appropriated to pay a portion of the costs (as herein defined) to finance the rehabilitation, reconstruction, repair, upgrading and equipping of school facilities at the following schools (the "Project"): • Abraham Lincoln School • Bangor High School • Downeast School • Fairmount School • Fourteenth Street School • Fruit Street School • James F. Doughty Middle School • Mary Snow School • Vine Street School • William Cohen Middle School THAT the estimated weighted average period of utility for the property constituting the Project to be financed with the proceeds of said bonds is hereby determined to be not less than 15 years. 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 each issue of said bonds, including the timing and provision for their sale and award and the selection of an underwriter, shall be determined by the Finance Director with the approval of the Finance Committee, ,W2940461.1, 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, and 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 bonds may be divided into multiple series and issued in separate plans of financing, with the approval of the Finance Committee and the Chairman of the City Council. 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 and the Chairman of the City Council, is hereby authorized to issue 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 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 any notes issued in anticipation thereof be designated as a qualified school construction bond pursuant to Section 54F of the Code and that the Finance Director be and hereby is authorized to irrevocably elect to have Section 6431 of the Code apply to such bonds and notes in anticipation thereof. THAT any bonds or notes (including bonds or notes in renewal thereof) authorized to be issued under this Order may be issued in combination with bonds or notes (including bonds or notes in renewal thereof) authorized to be issued by the City Council at any time prior to the date of issuance of such bonds or notes. THAT the Finance Director be and hereby is authorized to select the registrar, paying agent, and transfer agent (the "Transfer Agent') for the bonds and notes and to execute and deliver such contracts and agreements as may be necessary or appropriate to secure their services. THAT the bonds and notes shall be transferable only on the registration books of the City kept by the Transfer Agent in minimum denominations approved by the Finance Director, 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 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 paragraph 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, ,W2940461.1, agreement or understanding necessary or, in his opinion, appropriate in order to qualify the bonds for and participate in the Depository Trust Company Book -Entry Only System; 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 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 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 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 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, ( W2940461.1) 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, if any, be and hereby are appropriated for the following purposes, such proceeds to be held and applied in the following order of priority: 1. To any costs of the Project in excess of the principal amount of the 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 or notes including, to the extent permitted thereunder, to the City's General Fund. 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 as may be necessary or desirable in order to effect the issuance, sale, and delivery of the bonds and notes as hereinbefore authorized. 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 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. { W244WI.,, IN CITY COUNCIL MARCH 12, 2012 FIRST READING r— I b. c UM CITY CL RK IN CITY COUNCIL March 26, 2012 Motion Made and Seconded to Open the Public Hearin 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 INTERIM CITY /CLE1JX ORDER (TITLE,) AUTHORIZING THE ISSUANCE OF $2,800.00 AGGREGATE PRINCIPAL AMOUNT OF QUALIFIED SCHOOL CONSTRUCTION BONDS Assigned to Councilor�,� Legal Notices CITY OF BANGOR, MAINE NOTICE OF PUBLIC HEARING Notice is hereby given that the Bangor City Council will hold a public hearing at 7:30 p.m., March 26, 2012 at City Hall, 73 Harlow Street, Bangor, Maine on the proposed is- suance of $2,800,000 of qualified school construction bonds to finance the rehabilitation, reconstruction, repair, upgrading and equipping of school facilities at the follow- ing schools (the "Project"): • Abraham Lincoln School Bangor High School Downeast School Fairmount School • Fourteenth Street School • Fruit Street School • James F. Doughty Middle School • Mary Snow School • Vine Street School • William Cohen Middle School All persons who desire to be heard on the proposed bor- rowing are invited to attend the public hearing. The City Council will consider action authorizing the bonds imme- diately following the public hearing. Copies of the proposed order will be on file and may be reviewed at the office of the City Clerk prior to said public hearing. Dianne Lovejoy, Interim city clerk March 12, 2012