HomeMy WebLinkAbout2012-05-14 12-170 ORDERCOUNCIL ACTION
Item No. 12 170
Date: 5/14/2012
Item/Subject: Order, Authorizing Issuance of the City's General Obligation Bonds and Notes in
Anticipation Thereof and a Tax Levy Therefore
Responsible Department: Finance
Commentary:
The attached order would authorize the issuance of $30,000,000 in general obligation
bonds and/or notes in anticipation of the final financing of the Arena project. The City
continues to work with its bond attorney, financial advisor and Global Spectrum to
determine what portion of the project cost will not be eligible for tax exempt financing as
well as the form of the final financing plan. City staff anticipates having the form of the
final financing plan available for Council consideration in late May to mid June, culminating
with a planned bond issue in July of 2012.
As construction of the facility began in August 2011, the City has incurred significant
expenses to date for this project. This order does authorize a portion of the permanent
financing, but it also allows the City to obtain short term financing to provide the necessary
cash flow for this project. The borrowing will be similar to a line of credit, where the City
will only access the funds it requires. The term will be such, so that if final financing must
be delayed beyond July 2012, the City will have access to an adequate amount of liquidity.
41&�
Department Head
Manager's Comments:
This item will require a Public Hearing on 5/30/12
City Manager
Associated Information: Order
Budget Approval:
Finance Director
Legal Approval:
Solicitor
Introduced for
Passage
x First Reading Page _ of _
X Referral — Finance Committee of 5/21/12
Assigned to Councilor Durgin
CITY OF BANGOR
12 170
May 14, 2012
(TITLE.) Order, Authorizing Issuance of the City's General Obligation Bonds and Notes in
Anticipation Thereof and a Tax Levy Therefore.
WHEREAS: on May 4, 2011, the voters of Bangor approved a project to replace the 55 -
year -old Bangor Civic Center with a state-of-the-art 5,800 -seat arena and adjoining convention
center (the "Arena Project"); and
WHEREAS: construction on the Arena Project began in August 2011; and
WHEREAS: by Resolve 11-254, adopted on July 25, 2011, the City Council passed a
Declaration of Official Intent to reimburse proposed expenditures on the Arena Project from
tax-exempt obligations;
WHEREAS: the City has incurred substantial costs for the Arena Project, which costs
were intended to be subject to the City's future financing of the Arena Project; and
WHEREAS: the City Council now desires to reimburse itself for a portion of those costs
from an issue of bond anticipation notes; and
WHEREAS: pursuant to Article VIII, Section 15 of the City Charter, the City may borrow
temporarily in anticipation of authorized issues of bonds and notes;
WHEREAS: the City Council now desires to authorize the issue of the City's Bond
Anticipation Notes and related General Obligation Bonds in the aggregate amount of
$30,000,000;
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, Sections 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 the issue and sale
at one time and from time to time up to Thirty Million Dollars ($30,000,000) 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, may be used and are hereby appropriated to pay a
portion of the costs of the Arena Project and issuance costs with respect thereto.
THAT the date, maturities (not to exceed the maximum term permitted by law, such
maximum term not to be shortened by the term of any notes issued in anticipation thereof),
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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
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 pursuant to 30 A M.R.S.A. §5772, Section 15 of Article VIII of the City Charter and
all other authority thereto enabling, the Finance Director, with approval of the Finance
Committee is hereby authorized to issue, at one time or from time to time, the City's temporary
notes in anticipation of the forgoing bond issue, said notes to 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 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 Chair 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 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 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 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
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May 14, 2012
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.
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 the term "cost" or "costs" as used herein and applied to the Arena 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 Arena Project; (2) the cost of construction, building, alteration,
enlargement, reconstruction, renovation, improvement, and equipping of the Arena 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 Arena 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 Arena
Project; (7) the cost of all utility extensions and site improvements and development; (8) the
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May 14, 2012
cost of planning, developing, preparation of specifications, surveys, engineering, feasibility
studies, legal and other professional services associated with the Arena Project; (9) the cost of
environmental studies and assessments; and (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.
THAT the investment earnings on the proceeds of the bonds or 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 Arena Project in excess of the principal amount of the bonds or
notes authorized hereunder;
2. If any 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
3. To pay interest on such bonds or notes; or
4. To the City's General Fund.
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, assignments, certificates, memoranda, 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 Arena Project, the issuance, execution, sale, and delivery by the City of the bonds and
notes and the execution and delivery of the documents, as may be necessary or desirable.
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 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 on
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May 14, 2012
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.
{ W3104477A }
FIRST READING
May 14, 2012
First Reading
CITY
IN CITY COUNCIL
May 30, 2012
Motion made and seconded for passage
Pago., Q�s
(yJ`/17r
CITY CLERK
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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., May
30, 2012 at City Hall, 73 Harlow Street, Bangor, Maine on the proposed issuance of $30,000,000
of bonds and notes in anticipation thereof to finance a portion of the costs of the Arena Project.
All persons who desire to be heard on the proposed borrowing are invited to attend the public
hearing. The City Council will consider action authorizing the bonds and notes immediately
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.
To be posted in two or more public places and published in a newspaper published in Bangor
not less than 10 days prior to final action by the City Council.
n-
n-
aTY OF BANGOR, MAINE
d
CEr-
PUBLICIHEARING
m
�f
Notice is hereby given that
the Bangor City Council will
hold a public hearing at
ly
7:30 p.m., May 30, 2012 at
is
City Hall, 73 Harlow Street,
.d
Bangor, Maine on the
li-proposed
issuance of
i30,000,000 of bonds and
e-
notes in anticipation thereof
to finance a portion of the
gs
costs of the Arena Project.
All persons who desire to
)m
be heard on the proposed
borrowing are invited to at-
tend' the public hearing.
The City Council will con-
sider action authorizing the
bonds and notes immedi-
ately following the public
d
hearing.
Copies of the proposed or -
15
der will be on file and may
�,.
be reviewed at the office of
the City Clerk prior to said
public hearing.
May 14, 2012
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