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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), {w3104477.1 12 170 May 14, 2012 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 (W3104477 1) 12 170 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 (W3104477 11 12 170 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 (W3 10"77 1) 12 170 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 aoliouno3 o; pou6is9b Cmiu) - k `1,o 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 >BR, Can wad .._._ V== frAS [W3104709.1)