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HomeMy WebLinkAboutResolution 14-1999 RESOLUTION NO. 14-99 RESOLUTION RELATING TO LEASE-PURCHASE OF CITY FACILITIES; AUTHORIZING THE EXECUTION AND DELIVERY OF A FIRST SUPPLEMENTAL LEASE-PURCHASE AGREEMENT AND APPROVING AND AUTHORIZING EXECUTION OF RELATED DOCUMENTS BE IT RESOLVED by the City Commission of the City of Brookings, South Dakota(the City), as follows: Section 1. Recitals. 1.01. The City is authorized by South Dakota Codified Laws, Chapters 9-40 and 9-41, as amended (together,the Act), and the city charter,to acquire land and acquire and construct improvements and equipment comprising a system for the purpose of providing (i) electricity, gas or other light, heat and power, (ii) water and water supply for municipal, industrial and domestic purposes, (iii) collection, treatment and disposal of sewage and other domestic, commercial and industrial wastes, and (iv) a telephone system and related services. Pursuant to South Dakota Codified Laws, Section 9-39-6 and the city charter,the City has, by voter approval, established the Brookings Municipal Utilities (the Utility)to manage and control such services. 1.02. Pursuant to a Ground Lease and Easement Agreement, dated as of December 1, 1998 (the Original Ground Lease),the City has granted the First National Bank in Brookings (the Trustee) a leasehold interest in certain real estate (the Original Land) and improvements thereon and the Trustee has caused certain improvements to be acquired, constructed and installed (the Original Facilities) and has leased its interest in the Original Land and leased and agreed to sell the Original Facilities to the City pursuant to a Lease-Purchase Agreement, dated as of December 1, 1998 (the Original Lease). 1.03. Pursuant to a Declaration of Trust, dated as of December 1, 1998 (the Original Trust Agreement), by the Trustee and joined in by the City, the Trustee has issued Certificates of Participation(the Series 1998 Certificates) in the Original Lease and the payments thereunder. 1.04. The Utility and the City have found it necessary and appropriate to acquire additional interests in real estate (the 1999 Land; together with the Original Land,the Land) and to acquire, construct and install additional buildings, improvements and equipment on the Land (the 1999 Facilities). Toward this end, the City and the Trustee have agreed to enter into a First Amendment to Ground Lease and Easement Agreement (the First Amendment to Ground Lease; the Original Ground Lease as amended by the First Amendment to Ground Lease is referred to as the Ground Lease)and a First Amendment to Lease-Purchase Agreement, (the First Amendment to Lease; the Original Lease as amended by the First Amendment to Lease is referred to as the Lease) and the Trustee will execute and deliver a First Supplemental Declaration of Trust (the First -1- Supplemental Trust Agreement; the Original Trust Agreement as supplemented by the First Supplemental Trust Agreement is referred to as the Trust Agreement),to be joined in by the City, pursuant to which the Trustee will (i) issue Certificates of Participation (the Series 1999 Certificates) in the additional lease payments to be made by the City ' under the First Amendment to Lease and (ii)receive the proceeds of the sale of the Series 1999 Certificates and disburse such proceeds for the payment of costs of acquiring and constructing the 1999 Facilities, and for payment of costs of issuance of the Series 1999 Certificates. 1.05. Dougherty Summit Securities LLC (the Purchaser) is hereby retained by the City to underwrite the Series 1999 Certificates. 1.06. Forms of the following documents relating to the 1999 Facilities and related financing(the Documents) will be prepared and submitted to the City and, when received, are hereby directed to be filed with the Finance Officer: (a) the First Amendment to Ground Lease; (b)the First Amendment to Lease; (c)the First Supplemental Trust Agreement; and(d) the Certificate Purchase Agreement described in Section 2. Section 2. Apnrovals. 2.01. Authorization and Approval of the Documents. The financing described above is found to be favorable and is hereby approved. The Mayor and Finance Officer are authorized to approve the execution and delivery of the First Amendment to Lease and the Series 1999 Certificates, in a principal amount not to exceed $11,000,000, which includes, without limitation, amounts to pay the premium for qualified credit enhancement, if any, and costs of issuance (including underwriter's discount not exceeding 2.50% of par), and any allowance for original issue discount, the Certificates to bear interest at a rate or rates per annum resulting in an average interest rate not greater than 7.00%per annum and to mature over a period of not to exceed 20 years. The Mayor and Finance Officer are directed to enter into a Certificate Purchase Agreement with the Purchaser whereby the Purchaser will agree to purchase the Series 1999 Certificates; the execution of the Certificate Purchase Agreement by the Mayor and Finance Officer shall be conclusive evidence of their approval of the principal amount, purchase price, interest rates and other terms set forth therein. The Mayor, Finance Officer and City Attorney are authorized to approve the final forms of Documents and the Mayor and Finance Officer are directed to execute the Documents. Copies of all Documents shall be delivered, filed and recorded as provided therein. The Mayor, Finance Officer and City Attorney are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. The City will cooperate in the issuance of the Series 1999 Certificates and the Mayor, Finance Officer and the City Attorney shall execute such other instruments as are necessary to the issuance of the Series 1999 Certificates. 2.02. Additional Utility Obli atg ions. This Commission acknowledges that the Lease contains provisions limiting the City's ability to issue or incur Additional Utility -2- Obligations while the Lease is in force and any Certificates are Outstanding. The Commission will not approve or participate in the issuance of any Additional Utility Obligations unless the conditions set forth in the Lease for issuance of Additional Utility Obligations have been satisfied. Section 3. Modifications, Absence of Officers. The approval hereby given to the Documents includes an approval of such additional details therein as may be necessary and appropriate and such modifications thereto, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney prior to the execution of the Documents. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the absence of the Mayor or the Finance Officer, any of the Documents authorized by this resolution to be executed may be executed by such officers as, in the opinion of the City Attorney, may execute documents in their stead. Section 4. Payment of Lease Pavments. The City will pay to the Trustee promptly when due, all of the 1999 Lease Payments (as defined in the First Amendment to Lease) and other amounts required by the Lease. To provide moneys to make such payments, the City will include in its annual budget, for each fiscal year during the term of the Lease, moneys sufficient to pay and for the purpose of paying all Lease Payments, including the 1999 Lease Payments, and other amounts payable under the Lease, and will take all other actions necessary to provide moneys for the payment of the obligations of the City under the Lease from sources of the City lawfully available for this purpose. The City agrees that it will appropriate to the payment of the 1999 Lease Payments all collections of special assessments levied with respect to the 1999 Facilities. The agreements of the City in this section are subject to the provisions for termination set forth in the Lease, which shall provide that the Lease will be subject to termination by the City, without penalty, at the end of any fiscal year of the City, if the City Commission notifies the Trustee, not later than July 1 of that fiscal year that it will not budget or appropriate money for the payment of the City's obligations under the Lease for the succeeding fiscal year. Section 5. Tax and Arbitrage Matters. 5.01. Covenant. The City covenants and agrees with the owners from time to time of the Series 1999 Certificates, that it will not take, or permit to be taken by any of its officers, employees or agents, any action which would cause the interest component of the 1999 Lease Payments to become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code) and any regulations issued thereunder(the Treasury Regulations), in effect at the time of such action, and that it will take, or it will cause its officers, employees or agents to take, all affirmative actions within its powers which may be necessary to insure that the interest component of the 1999 Lease Payments will not become subject to taxation under the Code and the Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Series 1999 Certificates. The -3- City represents and covenants that the City is the owner of the 1999 Facilities and uses them for its municipal functions. So long as the Series 1999 Certificates aze outstanding, , the City will not enter into any lease, use agreement or other contract or agreement respecting the 1999 Facilities which would cause the Series 1998 Certificates or the Series 1999 Certificates to be considered "private activity bonds" or "private loan bonds" pursuant to the provisions of Section 141 of the Code. 5.02. Arbitrage Certification. The Mayor and Finance Officer being the officers of the City charged with the responsibility for issuing the Series 1999 Certificates pursuant to this resolution, are authorized and directed to execute and deliver to the Purchaser a certificate in accordance with the provisions of Section 148 of the Code, and Section 1.148-2(b) of the Treasury Regulations, stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Series 1999 Certificates which make it reasonable to expect that the proceeds of the Series 1999 Certificates will not be used in a manner that would cause the Series 1999 Certificates to be arbitrage bonds within the meaning of the Code and Treasury Regulations. 5.03. Arbitrage Rebate. The City acknowledges that the arbitrage rebate requirements of Section 148(�(4)(D) of the Code are applicable to the Series 1999 Certificates,the City hereby covenants and agrees to make computations, retain records and pay amounts to the United States at the times and in the manner required by said Section 148(�(4)(D) of the Code, and as set forth in the tax compliance agreement or similar document executed in connection with the delivery of the Series 1999 Certificates to the Purchaser. Section 6. Continuing Disclosure. The City acknowledges that the Series 1999 Certificates are subject to the continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12) (as in effect and interpreted from time to time, the "Rule"). The Rule governs the obligations of certain underwriters to require that issuers of municipal obligations enter into agreements for the benefit of the holders of the obligations to provide continuing disclosure with respect to the obligations. To provide for the public availability of certain information relating to the Series 1999 Certificates and the security therefor and to permit participating underwriters in the primary offering of the Series 1999 Certificates to comply with the Rule, which will enhance the marketability of the Series 1999 Certificates,the Mayor and the Finance Officer are hereby authorized and directed to execute an Agreement Concerning Continuing Disclosure, by which the City agrees to provide such information, either directly or through a disclosure agent, and the City hereby covenants and agrees to observe and perform the covenants and agreements contained therein, unless amended or terminated in accordance with the provisions thereof, for the benefit of the registered owners or beneficial owners from time to time of the Outstanding Series 1999 Certificates as therein provided. -4- Section 7. Amendment. This resolution may be amended from time to time, prior to the issuance of the Series 1999 Certificates,by an administrative resolution adopted by this Commission. Passes and approved this 23`d day of February, 1999. �eFocK,N � / ,�.a° Rcoai'r'� cs Mayo ���`T��� M^ i� ;o m'• �Q� 'r/�''O Sp0 s Finance Officer -5- CERTIFICATE The undersigned, being the duly qualified and acting Finance Officer of the City of Brookings, South Dakota, hereby certifies that the above resolution is a true and correct copy of the resolution as adopted by the City Commission on the 23`d day of February, 1999. WITNESS my hand officially as such Finance Officer and seal this 23�a day of February, 1999. � ot�FO�'t".+, Finance Of i e ,�.•`��pPPORAIEp•�CS MAR.9 ' 1883 �� :o �`�o,rf�EAL�,1•'0� /��S C0.SOVS� -6- DORSEY & WHITNEY LLP . MINNEAPOLIS PILLSBURY CENTER SOUTH tdEw vORK WASHINGTON,D.C. ZLO SOUTH SIXTH S7�REET DENVER LONDON MINNEAPOLIS,M�t.ttveso'rn 55402-1498 SEATTLE ERUSSELS TELEPHONE: �C�I2� 34O-ZGOO FARGO HONG KONG Fnx: (612) 340-2868 I BILLINGS DES MOtNES � ROCHES"I'ER MISSOULA VERLANE L.ENDORF COSTA MESA (612)340-2651 GREAT FALLS Fax(612)340-2644 endorf.lynn @ dorseylaw.com February 17, 1999 Mr. Theodore Kryger City of Brookings P. O. Box 270 311 Third Avenue Brookings, SD 57006-0270 Mr. Craig Osvog Brookings 1Vlunicipal Utility P.O. Box 588 525 Western Avenue Brookings, SD 57006-0588 Re: Lease Certificates of Participation, Series 1999 City of Brookings, South Dakota Dear Ted and Craig: Enclosed is a revised City Comm.ission Resolution with the "bank qualified" section deleted. If you have any questions, please feel free to call. Very truly yours, C� �''��� l er anr�ndor VLE/pmh � Enclosure cc: Walter Parkins (w/encl) Ray Woodsend (w/encl)