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HomeMy WebLinkAboutResolution No. 120-07 • CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION NO. IZ6-07 RESOLUTION ACCEPTING OFFER ON SALE OF GENERAL OBLIGATION VARIABLE RATE DEMAND WASTE WATER REVENUE BONDS, SERIES 2007B AND PROVIDING FOR THEIR ISSUANCE A. WHEREAS, the Common Council of the City of Rochester, Minnesota (the "City") has heretofore determined that it is necessary and expedient to issue $19,500,000 General Obligation Variable Rate Demand Waste Water Revenue Bonds, Series 2007B of the City, pursuant to Minnesota Statutes, Chapters 444 and 475, and Section 115.46 to finance improvements to the waste water utility system in the City; B. WHEREAS, the Bonds shall be issued pursuant to this resolution and pursuant to an Indenture of Trust, dated as of April 1, 2007 (the "Indenture"), between the City and a national bank to be selected by the Finance Director (the "Trustee"), as variable rate demand bonds, and the owners of the Bonds may on seven days' notice cause the Bonds to be • purchased by, or on behalf of, the City pursuant to the Indenture; C. WHEREAS, such obligation to purchase the Bonds will be secured by a Standby Bond Purchase Agreement (the "Standby Bond Purchase Agreement") between the City and DEPFA BANK plc (the "Liquidity Provider"), and the resale of the Bonds after such purchase (and in certain other circumstances) would occur pursuant to a Remarketing Agreement, dated as of April 1, 2007 (the "Remarketing Agreement"), by and between the City and RBC Capital Markets (the "Remarketing Agent"); D. WHEREAS, the City has retained Springsted Incorporated, in Saint Paul, Minnesota, as its independent financial advisor for the Bonds and is therefore authorized to sell the Bonds by a competitive negotiated sale in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9). E. WHEREAS, each capitalized term which is used but not otherwise defined in this resolution shall have the meaning given to that term in the Indenture. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota, as follows: 1. Acceptance of Offer. The offer of RBC Dain Rauscher Inc. (the "Purchaser") to purchase $19,500,000 General Obligation Variable Rate Demand Waste Water Revenue Bonds, Series 2007B of the City (hereinafter referred to as the "Bonds" or individually • as a "Bond"), in accordance with the Bond Purchase Agreement by and between the Purchaser 19938190 • and the City, a copy of which is on file with the City Clerk at the rates of interest hereinafter set forth, and to pay therefore 99.8% of their principal amount is hereby accepted. The Mayor and City Clerk are authorized to execute and deliver the Bond Purchase Agreement in substantially.the form submitted to the City, with such changes, modifications, additions and deletions thereto as shall be deemed necessary or appropriate, as evidenced by their execution and delivery thereof. 2. Approval of Agreements; Execution; Changes in Forms Approved. The forms of the Indenture, Standby Bond Purchase Agreement and Remarketing Agreement which have been submitted to the City are hereby approved, and said agreements are hereby authorized for execution in the name and on behalf of the City by the Mayor and City Clerk. Any other documents and certificates necessary to the issuance of the Bonds may be executed by the appropriate City officers. The approval hereby given to the various documents referred to the above includes approval of such additional details therein or other changes thereto as may be deemed necessary or appropriate, as evidenced by the City's execution and delivery thereof. In the absence of the Mayor or City Clerk, any of the documents authorized by this resolution to be executed may be executing the Acting Mayor, the City Finance Director or the City Administrator, or by an other officer of the City deemed appropriate. • 3. Title; Original Issue Date; Denominations; Maturities. The Bonds shall be titled "General Obligation Variable Rate Demand Waste Water Revenue Bonds, Series 2007B", shall be dated as of the date of issuance, and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered and mature on the dates and in the amounts set forth in the Exhibit. For the purpose of complying with Minnesota Statutes, Section 475.54, Subdivision 1, the maturity schedule for the Bonds has been combined with the maturity schedule for General Obligation Waste Water Revenue Bonds, Series 2004A and General Obligation Waste Water Revenue Bonds, Series 2007A, as permitted by Minnesota Statutes, Section 475.54, Subdivision 2. 4. Purpose. The Bonds shall provide funds to finance improvements to the waste water system in the City (the "Project") and aid in financing part of a sewage disposal system pursuant to Minnesota Statutes, Section 115.46. The total cost of the Project, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Project shall proceed with due diligence to completion. 5. Interest. The Bonds shall bear interest which varies and is paid on the dates as provided in the Indenture. The City has fixed and determined the interest rates borne in the Bonds by setting the standards for the interest rates in the Indenture and by appointing the Remarketing Agent. 19938190 2 • 6. Redemption. The Bonds shall be subject to redemption and prepayment prior to their maturity as provided in the Indenture. When under the terms of the Indenture and the terms of the Bonds the City is directly responsible for the payment of the Purchase Price of Bonds,the full faith and credit, taxing powers and other available assets and revenues of the City are hereby pledged for such purpose. 7. Trustee. The Trustee is appointed to act as bond registrar and transfer agent,paying agent and tender agent with respect to the Bonds, as provided in the Indenture. 8. Forms of Bond: Execution and Authentication. The Bonds shall be in the form set forth in the Indenture and shall be executed and authenticated on behalf of the City as provided in the Indenture. 9. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Trustee to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see the proper application thereof. 10. Fund and Accounts. There has heretofore been created a special fund designated the "Sewer Revenue Fund" (the "Fund") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Bonds hereinafter issued have been fully paid. There shall be established and maintained in the Fund the following three (3) separate accounts, to which shall • be credited and debited all income and disbursements of the Fund as hereinafter set forth. The Finance Director and all municipal officials and employees concerned therewith shall establish and maintain financial records of the receipts and disbursements of the municipal waste water utility system in accordance with this resolution. In such records there shall be established and maintained accounts of the Fund for the purposes and in the amounts as follows: (i) Construction Account. To the Construction Account there shall be credited the proceeds of the sale of the Bonds, and less capitalized interest in the amount of $2,060,902.98 (together with interest earnings thereon and subject to such other adjustments as are appropriate to provide sufficient funds to pay interest due on the Bonds on or before December 1, 2009). From the Construction Account shall be paid all costs and expenses of the Project, including the cost of construction contracts heretofore let or to be let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Any balance remaining in the fund after completion of the costs shall be transferred to the Debt Service Account. (ii) Operation and Maintenance Account. To the Operation and Maintenance Account there shall be credited all gross revenues and earnings derived from the operation of the municipal waste water system, including all charges for service, use and availability of and connection to said system, when collected, and all moneys received from the sale of any facilities or equipment of said system or any by-products thereof. From this account there shall be paid all the normal, reasonable and current costs of operating and maintaining the system. Current expenses shall include the reasonable and • necessary costs of operating, maintaining and insuring the system, salaries, wages, costs 19938190 3 • of materials and supplies, necessary legal, engineering and auditing services, and all other items which, by sound accounting practices, constitute normal, reasonable and current costs of operation and maintenance, but excluding any allowance for depreciation, extraordinary repairs and payments into the Debt Service Account. All moneys remaining in the Operation and Maintenance Account after paying or providing for the foregoing items shall constitute, and are referred to in this resolution as, "Net Revenues". (iii) Debt Service Account. There is hereby pledged and there shall be credited to the Debt Service Account: (a) the Net Revenues of the waste water utility in an amount, together with other funds which may herein or hereafter from time to time be irrevocably appropriated to the account sufficient to meet the requirements of Minnesota Statutes, Section 475.61 for the payment of the principal and interest of this issue; (b) all accrued interest received upon delivery of the Bonds; (c) all collections of taxes which may hereafter be levied in the event that net revenues and other funds herein pledged to the payment of the principal and interest of the Bonds of this issue are insufficient therefore; (d) capitalized interest in the amount of$2,060,902.98 (together with interest earnings thereon and subject to such other adjustments as are appropriate to provide sufficient funds to pay interest due on the Bonds on or before December 1, 2009); (e) all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (f) all investment earnings on funds held in the Debt Service Account; and (g) any and all other moneys, which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The Debt • Service Account shall be used solely to pay the principal and interest and any premiums for redemption of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. The Debt Service Account described in this resolution is an Account to be maintained by the City (as opposed to the Trustee) and is distinguished from the Account of the same name under the Indenture, which is intended and shall be used as a flow-through facility to allow the Trustee, as paying agent for the Bonds to make debt service payments thereon, when due. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except(1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Construction Account, Operation and Maintenance Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or • instrumentality thereof if and to the extent that such investment would cause the Bonds to be 19938190 4 . "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). 11. Sufficiency of Net Revenues. It is hereby found, determined and declared that the Net Revenues of the waste water utility system are sufficient in amount to pay when due the principal of and interest on the Bonds herein authorized and all the other general obligations heretofore issued by the City and made payable from the Net Revenues (the"Parity Bonds"), and the Net Revenues of the waste water utility system are hereby pledged for the payment of the Bonds and the Parity Bonds and shall be applied for that purpose, but solely to the extent required to meet the principal and interest requirements of this issue as the same become due. Excess Net Revenues may be used for any proper purpose. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the Net Revenues of the waste water utility system for the payment of other or additional obligations of the City, provided that it has first been determined by the Common Council that the estimated Net Revenues of the waste water utility system will be sufficient in addition to all other sources, for the payment of the Bonds and the Parity Bonds heretofore authorized and made payable from such Net Revenues, and such additional obligations and any such pledge and appropriation of the Net Revenues may be made superior or subordinate to, or on a parity with the pledge and appropriation herein. The Bonds are issued pursuant to Minnesota Statutes, Section 115.46, and nothing herein shall preclude the City from levying taxes for the payment of the Bonds. 12. Excess Net Revenues. Net Revenues in excess of those required for the foregoing may be used for any proper purpose. • 13. Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes, Section 444.075, the City hereby covenants and agrees with the holders of the Bonds that it will impose and collect charges for the service, use, availability and connection to the waste water utility system at the times and in the amounts required to produce Net Revenues adequate to pay all principal and interest when due on the Bonds and the Parity Bonds. Nothing herein shall preclude the City from levying taxes for the payment of the Bonds as permitted by Minnesota Statutes, Section 115.46. 14. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are irrevocably pledged. If the Net Revenues of the waste water utility system appropriated and pledged to the payment of principal and interest on the Bonds, together with other funds irrevocably appropriated to the Debt Service Account herein established, shall at any time be insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount an ad valorem tax upon all taxable property in the City sufficient to pay such principal and interest as it becomes due. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds payable therefrom, the deficiency shall be promptly paid out of any other accounts of the City which are available for such purpose, and such other funds may be reimbursed without interest from the Debt Service Account when a sufficient balance is available therein. • 19938190 5 • 15. Coverage Test. The Net Revenues are such that if collected in full they, together with all other funds herein pledged for the payment of the Bonds and the Parity Bonds, will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds and the Parity Bonds. 16. Certificate of Registration. The Administrator is hereby directed to file a certified copy of this resolution with the County Auditor of Olmsted County, Minnesota, together with such other information as he or she shall require, and to obtain the Auditor's certificate that the Bonds have been entered in the Auditor's Bond Register. 17. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 18. Investment Limitations; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and (3) the rebate of excess investment earnings to the United States. 19. Compliance with Reimbursement Bond Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1.150-2 (the "Reimbursement Regulations") applicable to the "reimbursement proceeds" of the Bonds, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure"). The City hereby certifies and/or covenants as follows: (a) Not later than 60 days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration") which effectively(i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the general functional purpose thereof from which the Reimbursement Expenditure was to be paid (collectively the "Project"); and (iii) states the maximum principal amount of debt expected to be issued by the City for the • purpose of financing the Project; provided, however, that no such Declaration 19938190 6 shall necessarily have been made with respect to: (i) "preliminary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed 20% of the "issue price" of the Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of$100,000 or 5% of the proceeds of the Bonds. (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Bonds or any of the other types of expenditures described in Section 1.150- 2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Bonds and in all events within the period ending on the date which is the later of three years after payment of the Reimbursement Expenditure or one year after the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30 days after the Bonds are issued, shall be treated as made on the day the Bonds are issued. Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph 19 upon receipt of an opinion of its Bond Counsel for the Bonds stating in effect that such action will not impair the tax-exempt status of the Bonds. 20. Continuing Disclosure. (a) The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking")hereinafter described to: (1) provide or cause to be provided to each nationally recognized municipal securities information repository ("NRMSIR") and to the appropriate state information depository ("SID"), if any, for the State of Minnesota, in each case as designated by the Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. (2) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the Municipal Securities Rulemaking Board("MSRB") and (ii)the SID, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking. • (3) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of a failure by the Issuer to 19938190 7 provide the annual financial information with respect to the Issuer described in the Undertaking. (4) The City agrees that its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking are intended to be for the benefit of the holders and any other beneficial owners of the Bonds and shall be enforceable on behalf of such holders and beneficial owners; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. (b) The Mayor and Clerk of the City, or any other officer of the City authorized to act in their place, (the "Officers") are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the Common Council, subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the purchaser of the Bonds and(iii) acceptable to the Officers. 21. No Designation of Qualified Tax-Exempt Obligations. The Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. 22. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such • section,paragraph or provision shall not affect any of the remaining provisions of this resolution. 23. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. 19938190 8 • PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS 19TH D F MARCH, PRE IDENT OF SAID COMMON COUNCIL ATTEST: CITY CL Approved this 191h day of March, 2007 MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) • 19938190 9 CERTIFICATION I, the undersigned City Clerk of the City of Rochester, Minnesota, do hereby certify the following: The foregoing is true and correct copy of a Resolution on file and of record in the offices of the City, which Resolution relates to the issuance by the City of its General Obligation Variable Rate Demand Waste Water Revenue Bonds, Series 2007B. Said Resolution was duly adopted by the Rochester Common Council at a regular or special meeting of the Council held on March 19, 2007. Said meeting was duly called and regularly held and was open to the public and was held at the place at which meetings of the Council are regularly held, a quorum of the Council being present and acting throughout. Councilmember Marcoux moved the adoption of the Resolution, which motion was seconded by Councilmember Nowi cki . A vote being taken on the motion, the following members of the Council voted in favor of the Resolution: President Dennis Hanson, Counci 1 members Pat Carr, Ed Hruska, Marcia Marcoux, Sandra Means, Bob Nowicki , Bruce Snyder and the following voted against the same: None Whereupon said Resolution was declared duly passed and adopted. The Resolution is in full force and effect and no action has been taken by the Council which would in any way alter or amend the Resolution. WITNESS MY HAND officially as the City Clerk of the City of Rochester, Minnesota, this 21st day of March , 2007. City Clerk City of Rochester, Minnesota (SEAL) 19938190 10