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HomeMy WebLinkAboutResolution 96-1997 • � � RESOLLlrION N0. 96-97 RESQLUTION RELATING TO LEASE-PURCHASE OF CITY FACILITIES; AUTHORIZING THE EXECUTION AND DELNERY OF A GROUND LEASE AND EASEMENT AGREEMENT AND A 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 9-44 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 the Act and the city charter, the City has established the Brookings Municipal Utilities (the Utility) to provide such services. The goveriing body finds that it is necessary and appropriate to acquire and construcr the interests in land, improvements, and equipment(the Facilities) described in the Lease (as hereinafter defined). 1.02. The City has agreed with First National Bank in Brookings, Brookings, South Dakota(the Trustee) that the Trustee will, pursuant to a Ground Lease and Easement Agreement between the City and the Trustee (the Ground Lease), acquire certain interests in real property (the Land, including any Facilities now in existence, which are to be repaired or renovated) from the City, and the Trustee will lease its interest in the Land and lease and agree to sell the Facilities to be acquired,renovated,constructed and equipped thereon to the City pursuant to a Lease-Purchase Agreement between the Trustee and the City (the Lease). 1.03. The Trustee will execute and deliver a Declaration of Trust(the Trust Agreement),joined in by the City, pursuant to which the Trustee will (i) issue Certificates of Participation (the Certificates) in the lease payments to be made by the City under the Lease and (ii) receive, hold and invest the proceeds of the sale of the Certificates and disburse such proceeds for payment of Construction Costs and Costs of Issuance (as defined in the Lease). 1.04. Dougherty Summit Securities LLC (the Purchaser) is hereby retained by the City to underwrite the Certificates. 1.05. Forms of the following documents relating to the Facilities (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 Lease; (b) the Trust Agreement; (c) the Ground Lease; and(d) the Certificate Purchase Agreement described in Section 2. Section 2. Approvals. 2.01. Authorization and Ap�roval 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 Lease and the Certificates, in a principal amount not to exceed $17,000,000, plus a reserve fund, capitalized interest (not exceeding one year), the premium for qualified credit enhancement, if any, and costs of issuance (including under�vriter's discount not exceeding 2.50% of par), and plus any original issue discount (not exceeding 2.00% of par), the Certificates to bear interest at a rate or rates per annum resulting in an average interest rate not greater than 6.75% per annum and to mature over a period of not to exceed 20 yeazs. 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 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 aze 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 Certificates and the Mayor,Finance Officer and the City Attorney shall execute such other instruments as are necessary to the issuance of the Certificates. 2.02. Additional Utility Revenue Obli at�ions. This Commission acknowledges that the Lease contains provisions limiting the City's ability to issue or incur Additional Utility Revenue 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 Revenue Obligations unless the conditions set forth in the Lease for issuance of Additional Utility Revenue Obligations have been satisfied. Section 3. Modifications. Absence of Officers. The approval hereby giver. 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. Pavment of Lease Payments. The City will pay to the Trustee promptly when due, all of the Lease Payments (as defined in the 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 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 Lease Payments all collections of special assessments levied with respect to the 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 Arbitra�e Matters. 5.01. Covenant. The City covenants and agrees with the owners from time to time of the Certificates, that it will not take, or pernut to be taken by any of its officers, employees or agents, any action which would cause the interest component of the Lease Payment to become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code) and any -2- 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 Lease Payment 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 Certificates. The City represents and covenants that the City is the owner of the Facilities and uses them for its municipal functions. So long as the Certificates are outstanding, the City will not enter into any lease, use agreement or other contract or agreement respecting the Facilities which would cause the Certificates to be considered "private activity bonds" or"private loan bonds" pursuant to the provisions of Section 141 of the Code. 5.02. Arbitra�e Certification. The Mayor and Finance Officer being the officers of the City charged with the responsibility for issuing the 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 Certificates which make it reasonable to expect that the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be azbitrage bonds within the meaning of the Code and Treasury Regulations. . 5.03. Arbitra�e Rebate. The City acknowledges that the arbitrage rebate requirements of Section 148(�(4)(D) of the Code are applicable to the 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(fl(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 Certi�cates to the Purchaser. Section 6. Continuing Disclosure. The City acknowledges that the 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 Certificates and the securiry therefor and to pernut participating underwriters in the primary offering of the Certificates to comply with the Rule, which will enhance the marketability of the 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 ternunated in accordance with the provisions thereof, for the benefit of the registered owners or beneficial owners from time to time of the Outstanding Certificates as therein provided. Section 7. Amendment. This resolution may be amended from time to time, prior to the issuance of the Certificates, by an administrative resolution adopted by this Commission. Adopted this 14th day of October, 1997. Mayor -3- �y�E•BROpki,` v..,�paPORA��,o �+� � ��9 � 'o ��', ��fr��� Finance Of ic -4- 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 October 14, 1997. WTTNESS my hand officially as such Finance Officer and seal this,�aay of r , 1997. ��ROOKI�yGs Finance Offi er O �qoiurEn''� � :r`° 9 � s V; M"��,Tlio : ��7�4L��Q� ���•. � Z` ���K�NGS�CO.S�Jti -5- RESOLUTION RELATING TO LEASE-PURCHASE OF CITY - FACILITIES; CONCURRING IN THE ACTIONS OF THE CITY COMNIISSION; AGREEING TO CERTAIN COVENANTS AND RESTRICTIONS BE TT RESOLVED by the Utility Board of the Brookings Municipal Utilities, Brookings, South Dakota(the Utility), as follows: Section 1. Recitals. 1.01. The Ciry of Brookings (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) electriciry, gas or other light, heat and power, (u)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 the Act and the ciry charter, the Ciry has established the Utility to provide such services. The City Commission has found it necessary and appropriate to acquire and construct the interests in land, improvements, and equipment(the Facilities)described in the Lease (as hereinafter defined). 1.02. The City has agreed with First National Bank in Brookings,Brookings, South Dakota(the Trustee) that the Trustee will, pursuant to a Ground Lease and Easement Agreement between the City and the Trustee (the Ground Lease), acquire certain interests in real property (the Land, including any Facilities now in existence, which are to be repaired or renovated) from the City, and the Trustee will lease its interest in the Land and lease and agree to sell the Facilities to be acquired,renovated,constructed and equipped thereon to the Ciry pursuant to a Lease-Purchase Agreement between the Trustee and the City (the Lease). 1.03. The Trustee will execute and deliver a Declaration of Trust(the Trust Agreement),joined in by the City,pursuant to which the Trustee will (i) issue Certificates of Participation (the Certificates)in the lease payments to be made by the Ciry under the Lease and (ii) receive, hold and invest the proceeds of the sale of the Certificates and disburse such proceeds for payment of Construction Costs and Costs of Issuance (as defined in the Lease). 1.04. Forms of the following documents relating to the Facilities (the Documents) will be prepazed and submitted to the City: (a) the Lease; (b) the Trust Agreement; (c) the Ground Lease; and(d) a Certificate Purchase Agreement. Section 2. Authorization and Ap�roval of the Documents. The financing described above is found to be favorable and the execution and delivery of the Documents by the City and the issuance of the Certificates and the sale thereof in accordance with the Certificate Purchase Agreement are hereby approved. Section 3. Securitv Provisions. 3.01. Sufficiencv of Net Revenues. This Board reasonably anticipates that the gross revenues to be received from the operation of the Utiliry during the period for which the Lease will be in force and the Certificates will be outstanding will be more than sufficient to pay all costs of the operation and maintenance of the Utility and to provide net revenues adequate to pay the Lease Payments, when due, and to maintain the reserves required by the Lease and the Trust Agreement. The Board acknowledges that, while the Lease and the Certificates are not secured by any pledge of or security interest in the revenues of the Utility, and the City's obligation to make payments under the Lease is not limited to the revenues of the Utility, the City Commission anticipates that the Lease Payments will be made from the net revenues of the Utility. Prior to June - 15 in each yeaz in which the Lease is in force, the Board will make, or cause to be made, an estimate of revenues and expenses for the Utility for the next succeeding calendar year and,not later than June 15 in each such year shall submit a written report to the City Commission stating that the estimated net revenues of the Utiliry will be sufficient to pay the Lease Payments and any other amounts payable under the Lease for such next succeeding calendar year,or if the estimated net revenues will not be sufficient, stating the amount of the estimated shortfall. 3.02. Rates and Charges. The Board will maintain, revise, charge and collect rates and charges for service furnished and made available by the Utility, according to schedules such that the gross revenues derived therefrom will be sufficient, when combined with other available funds, to pay when due all expenses of the operation and maintenance of the Utility, and all Lease Payments and other amounts payable under the Lease, to provide for the establishment and maintenance of adequate reserves therefor, and to provide an allowance adequate for recurring renewals and replacements of the Utility, and to fulfill the terms of all other agreements with the Trustee and the owners of the Certificates. Such charges shall at all times be sufficient to produce Net Income Available for Debt Service(as defined in the Lease) for each fiscal year at least equal to 100% of the Lease Payments coming due in such fiscal year. Section 4. Additional Utilitv Revenue Obli at� ions. This Board acknowledges that the Lease contains provisions limiting the City's ability to issue or incur Additional Utility Revenue Obligations while the Lease is in force and any Certificates are Outstanding. The Board will not approve or participate in the issuance of any Additional Utiliry Revenue Obligations unless the conditions set forth in the Lease for issuance of Additional Utility Revenue Obligations have been satisfied. Section 5. Termination. The agreements of the Board in this Resolution are subject to the provisions for termination set forth in the Lease, which provides 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 fails to budget or appropriate money for the payment of the City's obligations under the Lease for the succeeding fiscal year. Section 6. Tax and Arbitrage Matters. The Board covenants and agrees with the owners from time to time of the Certificates, that it will not take, or pernut to be taken by any of its officers,employees or agents, any action which would cause the interest component of the Lease Payment 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 Lease Payment 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 Certificates. The Board represents and covenants that the City is the owner of the Facilities and uses them for its municipal functions. So long as the Certificates are outstanding, the Board will not enter into any lease,use agreement or other contract or agreement respecting the Facilities which would cause the Certificates to be considered "private activity bonds" or "private loan bonds" pursuant to the provisions of Section 141 of the Code. -2- � � , . Adopted this 13th day of October, 1997. - �/ Jf� �� S� Chair ATTEST: r Secretary -3- - 1 CERTIFICATE " The undersigned,being the duly qualified and acting Secretary of the Utility Board of the Brookings Municipal Udlities,hereby certifies that the above resolution is a true and correct copy of the resolution as adopted by the Utility Boazd on October 13, 1997. WTTNESS my hand officially as such Secretary this�day of . < Ol'1�, 1997. � � Secretary � -4- �