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HomeMy WebLinkAboutResolution 127-2011Resolution No. 127 -1 1 A Resolution authorizing the issuance of Electric Revenue Bonds; Pledging certain revenues of the City to the payment of said Bonds; authorizing officers of the City to approve, execute and deliver certain agreements and documents relating to the Bonds Be It Resolved by the City Council of the City of Brookings, South Dakota (the City), as follows: Section 1. Recitals, Authorization and Findings. 1.1. Recitals. The City is a political subdivision of the State of South Dakota and a body corporate and politic. Under the laws of the State of South Dakota and the City's charter, the City is possessed of all powers which are necessary, requisite or proper for the government and administration of its local and municipal matters, and all rights and powers that now or hereafter may be granted to municipalities by the laws of the State of South Dakota. The City, operating through the Brookings Municipal Utilities (BMU), currently operates a municipal electric utility (the Utility), consisting of a system or part of a system for the purpose of providing electricity for municipal, industrial and domestic purposes. 1.2. Authorization. The City is authorized to borrow money and issue its revenue bonds under South Dakota Codified Laws, Chapter 9 -40 (the Act), in order to finance all or a portion of the cost of acquiring and constructing improvements to the electrical facilities of the Utility, consisting of the construction of a 1 15 kV transmission line, reconstruction of three substations, and installation of four 115/12.5 kV transformers and related improvements (the Improvements). The City is authorized to make the Improvements, to issue electric revenue bonds in order to defray the cost thereof and to make all pledges, covenants and agreements authorized by law for the protection of the owners of the revenue bonds, including, without limitation, those covenants set forth in Sections 9 -40 -16 and 9 -40 -17 of the Act. The City, acting through BMU, shall impose a separate surcharge for the availability, benefit and use of the Improvements as a part of the Utility and shall aggregate the gross revenues derived from such surcharge and the Improvements, together with the expenses of operation and maintenance of the Improvements. All gross revenues derived from the operation of the Improvements are irrevocably set aside, pledged and appropriated to a special fund within the Utility as received. The Bonds, together with any other electric revenue bonds issued by the City to finance other portions of the Improvements, are payable solely from the revenue or income derived from the operation of the Improvements and shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory provisions or limitations. 1.3. Findings. It is hereby found, determined and declared to be in the best interest of the City to issue its electric revenue bonds, in one or more series (collectively, the Series 2011 Bonds), in accordance with the Act and under the terms and conditions of this resolution and an Indenture of Trust (the Indenture) to be entered into between the City and First Bank & Trust, Brookings, South Dakota, as trustee (the Trustee). The Series 201 1 Bonds, together with any other electric revenue bonds issued under the Indenture to finance portions of the Improvements, and made payable from the surcharge, are referred to herein as the Bonds. Section 2. Sale, Bond Purchase Agreement, Official Statement. Indenture of Trust, Approval and Execution of Documents. 2.1. Sale. The Series 2011 Bonds authorized by this Resolution shall be sold to Dougherty & Company LLC, of Minneapolis, Minnesota, as underwriter (the Underwriter) in an aggregate principal amount not to exceed $6,500,000, which includes construction costs, the amounts necessary to fund a debt service reserve fund, pay capitalized interest not to exceed 24 months on the Series 2011 Bonds, and pay costs of issuance (including an underwriter's discount not exceeding 3% of the principal amount of the Series 201 1 Bonds). The Series 201 1 Bonds shall be issued in such form, mature at the time or times and on such terms, consistent with this Resolution, as shall be provided in the Indenture and other agreements whose execution and delivery is authorized by Section 2.5 of this Resolution, provided the Series 201 1 Bonds shall not mature later than December 31, 2031, and shall bear interest at the rate or rates per annum provided in the Indenture, but at an average interest rate not to exceed 6.00% per annum. The City Manager and the General Manager of BMU are hereby authorized and directed to agree with the Underwriter upon the exact purchase price, principal amount, maturities, interest rate or rates, payment dates and redemption provisions for the Series 201 1 Bonds, within the parameters set forth in this Section. 2.2. Bond Purchase Agreement. The execution of a Bond Purchase Agreement setting forth such final terms by the Mayor and City Clerk is hereby approved and authorized and such execution shall be conclusive evidence of such agreement and shall be binding upon the City. The provisions of the Bond Purchase Agreement as so executed, including all Exhibits and Appendices thereto, are incorporated herein by reference. The law firm of Dorsey & Whitney LLP, in Minneapolis, Minnesota, is hereby appointed as bond counsel for purposes of this issue of the Series 201 1 Bonds. 2.3. Official Statement. The Series 201 1 Bonds will be offered for sale by means of an Official Statement. The Mayor, the City Attorney, and the City Manager are authorized, in cooperation with BMU, the Underwriter, Underwriter's Counsel and Bond Counsel, to prepare an Official Statement to be distributed to prospective purchasers of the Series 2011 Bonds. The Mayor and the City Clerk are hereby authorized and directed to approve, and, if requested, to execute the final Official Statement. The City hereby consents to the distribution of the Official Statement to prospective purchasers of the Series 201 1 Bonds. 2.4. Indenture of Trust. To provide security for the Bonds and to set forth the terms and other matters relating to the Bonds, the City shall enter into the Indenture with the Trustee. The terms of the Bonds shall be set forth in the Indenture, and the City shall pledge the revenue or income derived from the operation of the Improvements to secure the Bonds. The Mayor and City Clerk are authorized and directed to approve and execute the Indenture on behalf of the City. The Indenture shall also provide the forms and other matters of other series of Bonds issued at substantially the same time as the Series 201 1 Bonds; other series of Bonds shall be issued pursuant to supplements to the Indenture. 2.5. Approval and Execution of Documents. Upon the determination of the terms of the Series 201 1 Bonds (within the limits set forth herein), the Indenture and the Bond Purchase Agreement, and such other documents, agreements or instruments as may be necessary to make covenants and recite facts required to demonstrate the validity and enforceability of Series 201 1 Bonds under the laws of the State of South Dakota and to assure the exclusion of the interest thereon from the gross income of the owners of the Series 201 1 Bonds under the Internal Revenue Code of 1986, as amended (the Code) and to effectuate the terms and intent of this Resolution, as may be approved by the City Attorney, shall be executed in the name and on behalf of the City by the Mayor and the City Clerk in substantially the form to be filed with the City Clerk, but with such changes therein, not inconsistent with this Resolution, the Bond Purchase Agreement or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Section 3. City Officers. The Mayor and City Clerk are hereby authorized and directed to execute and deliver the Indenture, agreements and documents authorized by Section 2 hereof. Execution and delivery of such items by the Mayor and City Clerk shall constitute evidence that such items are consistent with the terms of this Resolution and the Indenture and have been duly authorized, executed and delivered by the City and are enforceable against the City in accordance with their terms, subject to customary exceptions relating to bankruptcy, reorganization, insolvency and other laws affecting creditors' rights. The Mayor, City Clerk and City Attorney are further authorized to take such other actions as may be required to effectuate the terms and intent of this Resolution. In the event of the absence or disability of the Mayor, City Clerk or City Attorney, the acting Mayor, the acting City Clerk or the acting City Attorney are hereby authorized to act in the place and stead of the Mayor, City Clerk and City Attorney, and to take all actions and execute all documents approved hereby. Section 4. Continuing Disclosure Certificate. The City acknowledges that the Series 201 1 Bonds 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 Bonds and the security therefor and to permit participating underwriters in the primary offering of the Bonds to comply with the Rule, which will enhance the marketability of the Bonds, the Mayor and City Clerk are hereby authorized and directed to execute a Certificate of Continuing Disclosure (the Certificate), by which the City agrees to provide such information, either directly or through a disclosure agent. The City hereby covenants and agrees to observe and perform the covenants and agreements contained in the Certificate, 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 Bonds as provided in the Certificate. Section 5. Qualified Tax - Exempt Obligation. This Council hereby designates the Bonds as "qualified tax exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the disallowance of interest expense for financial institutions, and hereby finds that the reasonably anticipated amount of qualified tax- exempt obligations (within the meaning of Section 265(b)(3) of the Code) which will be issued by the City and all subordinate entities thereof during calendar year 201 1 does not exceed $10,000,000. Section 6. Amendment. This Resolution may be amended at any time prior to the issuance of the Series 201 1 Bonds by adoption of a subsequent resolution amending this Resolution. Upon vote being taken thereon, the following voted in favor thereof: Mayor Reed, Council Members Kubal, Bezdichek, Niemeyer, Corbett, McClemans and Thorpe. and the following voted against the same: None Whereupon the resolution was declared duly passed and adopted and was approved and signed by the Mayor and attested by the City Clerk. ornes, City Clerk Adopted: Published: Effective Date: October 25, 2011 October 28, 2011 November 16, 2011 CITY OF BROOKINGS (C/IL Tim Reed, Mayor CERTIFICATE The undersigned, being the duly qualified and acting City Clerk 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 Council on October 25, 201 1. WITNESS my hand officially as such City Clerk an - is 256 da of October, 2011. hornes, City Clerk