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HomeMy WebLinkAbout1996-43 Tax Improvement BondRESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASHLAND AUTHORIZING THE ISSUANCE AND SALE OF A LIMITED TAX IMPROVEMENT BOND. THE CITY OF ASHLAND RESOLVES AS FOLLOWS: SECTION 1. Findings. 1.1. The City is authorized pursuant to the Constitution and laws of the State of Oregon, including Oregon Revised Statutes Chapter 288 and Sections 223.205 to 223.295 and the City Charter, to construct publicly owned and operated local improvements which specially benefit properties, to assess the specially benefited properties for the costs of local improvements, and to issue limited tax bonds to finance the costs of those improvements. 1.2. Article XI, Section llb of the Oregon Constitution states that assessments for local improvements will not be "taxes" which are subject to that section's limitations if the local improvement is a capital construction project undertaken by the City: (a) which provides a special benefit only to specific properties or rectifies a problem caused by specific properties; (13) the costs of which are assessed against those properties in a single assessment upon the completion of the project; (c) for which the payment of the assessment plus appropriate interest may be spread over a period of at least ten years; and, (d) for which the total of all assessments do not exceed the actual costs incurred by the City in designing, constructing and financing the project. 1.3. The City has completed construction of certain local improvement district projects (which are described below in the definition of "Projects"), and has assessed their costs against benefited properties in compliance with Article XI, Section 1 lb. The assessments are not "taxes" which are subject to that section's limitations. 1.4. Oregon Revised Statutes Section 223.235(2) limits the principal mount of limited tax bonds to the unpaid balm of all contracts for installment payment of final assessments for the Projects, pins the amount necessary to pay any financing costs. The unpaid balance of contracts for installment payment of final assessments for the Projects, pins financing costs, equal or exceed $605,000. 1.5. The City adopts this resolution to establish the terms under which it will issue its Limited Tax Improvement Bond, Series 1996 pursuant to Oregon Revised Statutes Chapter 288 and Sections 223.205 to 223.295. 1.6. The City's financial advisor has solicited proposals from potential purchasers of the Bond. Page 1 - Resolution 1.7. The City 's financial advisor has analyzed the proposal of Bank of America National Trust and Savings Association and finds the rates, terms and conditions offered by the proposal to be beneficial to the City. SECTION 2. Definitions. Unless the context clearly requires otherwise, the following terms shall have the following meanings: "Assessment Payments" means all mounts required to be paid to the City under all contracts for installment payment of final assessments for the Projects, and the net proceeds of foreclosing any such assessments. "Available General Funds" means all taxes and other legally available general funds of the City. "Bancroft Bond Fund" means a fund or account, which the City accounts for separately, but which may be cornmingled with other funds or accounts for investment purposes, into which the City shall deposit all Assessment Payments. "Bank" means Bank of America Nationel Trust and Savings Association. "Bond" means the City's Ijmited Tax Improvement Bond, Series 1996 which is authorized by this Resolution. "City Official" means the City Administrator or Finance Director, or the person designated in writing by the City Administrator to act on behalf of the City pursuant to this Resolution. "Cede" means the Internal Revenue Cede of 1986, as mended. "Government Obligations" means direct noncallable obligations of the United States, or obligations the principal of and interest on which are fully and unconditionally guaranteed by the United States. "Projects" means the following local improvement projects of the City: Loft Lane Street, Peachey/Paradise Sewer, Tolman Creek Street, Railroad Park, Tolman Creek Signal, Mountain Avenue Sewer, Strawberry Sewer, Railroad Village and Oak Knoll Parking Lot. "Proposal" means the proposal of the Bank to purchase the Bond which is attached to this Resolution as Exhibit B, with such changes as may be approved by the City Official. "Qualified Consultant" means an independent auditor, an independent financial advisor, or similar independent professional consultant of which the City determines has experience and expertise in the area for which the consultant is retained by the City to provide services under this Resolution. Page 2 - Resolution "Resolution" means this Resolution authorizing the Bond. SECTION 3. Authorization of Bond. For the above purposes, the City shall issue its Ijmited Tax Improvement Bond, Series 1996, in an amount of not to exceed Six Hundred Five Thousand Dollars ($605,000). The Bond shall be sold to the Bank, or one of its afffiiates, in accordance with the Proposal. The City Official is hereby authorized to execute any documents, make any agreements, or take any action which the City Official reasonably determines is desirable to issue, sell and deliver the Bond in accordance with this Resolution and the Proposal. SECTION 4. Bond Form. The Bond shall be initially issued in the form of a single, typewritten, installment bond, substantially as shown in Exhibit A, with such changes as the City Official may approve. The Bond shall be executed with the manual signatures of the Mayor and a City Official. SECTION 5. Optional Redemption. The City reserves the fight to redeem all or any portion of the Bond as authorized in the Proposal. SECTION 6. Notice of Redemption of Bond. The City shall notify the registered owner of the Bond of any early redemption not less than 30 days prior to the date fuced for redemption. SECTION 7. Payment. The City shall make Bond principal and interest payments directly to the Bank. SECTION 8. Security. 8.1. The Bond shall be payable primarily from the Assessment Payments. The City hereby pledges all Assessmere Payments to pay the Bonds. Pursuant to ORS 223.235(5)(c), the lien on the Assessment Payments shall be valid, binding and fully perfected from the date of issuance of the Bonds. The Assessmere Payments shall be immediately subject to the lien without the physical delivery thereof, the ~ing of any notice or any further act. The lien shall be valid, binding and fully perfected against all persons having claims of any kind against the City or the property assessed whether in tort, contract or otherwise, and irrespective of whether such persons have notice of the lien. 8.2. The Bond shall be a limited tax bond of the City, and, to the extent that the Assessment Payments (and any Available General Funds the City may elect to provide) are not sufficient to pay the Bond, the City is authorized to levy a tax on all taxable property within its boundaries as authorized by ORS 223.235(4), subject to the limitations of Page 3 - Resolution Article XI, Section 11b(1) of the Oregon Constitution. The City hereby covenants with the Bank to levy such a tax annually, during each year that any portion of the Bond is outstanding. 8.3. The City hereby pledges its full faith and credit to pay the Bond. The Bond is a limited tax improvement bond of the City, and the City shall pay the Bond from Available General Funds to the extent that Assessment Payments and any taxes described in Section 8.2 are not sufficient to pay the Bonds. 8.4. The City shah deposit all Assessment Payments into the Bancroft Bond Fund. So long as the Bond is outstanding, the City shall use mounts deposited in the Bancroft Bond Fund only to pay Bond principal, interest and any redemption premium. SECTION 9. Maintenance of Tax-Exempt Status. 9.1. The City covenants for the benefit of the owners of the Bond to comply with all provisions of the Code which are required for Bond interest to be excluded from gross income for purposes of federal income taxation under Section 103(a) of the Code. In determining whether how an action or omission affects the exclusion of Bond interest from gross income, the City may rely on an opinion of nationally recognized bond counsel. The City makes the following specific covenants with respect to the Code: 9.1.1. The City shall not take any action or omit any action, if it would cause the Bond to become an "arbitrage bond" under Section 148 of the Code and shall pay any rebates to the United States which are required by Section 148(f) of the Code. 9.1.2. The City shall operate the facilities financed with the Bond so that the Bond is not a "private activity bond" within the meaning of Section 141 of the Code. 9.2. The covenants contained in this section and any covenants in the closing documents for the Bond shall constitute contracts with the owners of the Bond, and shall be enforceable by them. SECTION 10. Designation of Bond as a Qualified Tax-Exempt Obligation. The City designates the Bond as a qualified tax-exempt obligation pursuant to Section 265(b)(3) of the Code. The City covenants not to so designate tax-exempt obligations in the current calendar year in an aggregate mount of more than $10,000,000. The City (and all subordinate entities thereof, if any) does not reasonably expect to issue more than $10,000,000 of m-exempt obligations during the current calendar year. SECTION 11. Rebate. The City (and all subordinate entities thereof, if any) do not reasonably expect to issue m-exempt obligations in calendar year 1996 which have an aggregate face mount of more than $5,000,000. Accordingly, the Bond will be exempt from the rebate requirement of Section 148(t) of the Code. Page 4 - Resolution SECTION 12. Defeasance. The City may defease all or any portion of the principal installments of the Bond by setting aside, with a duly appointed escrow agent, in a special escrow account irrevocably pledged to the payment of the principal installments to be clefeased, cash or Government Obligations in an amount which, in the opinion of a Qualified Consultant satisfacwry to the escrow agent, without reinvesmaent, is at least equal to the principal installments of the Bond to be clefeased, plus interest which wffi accrue thereon unffi maturity or any earlier date for which the issuer has given irrevocable instructiota for redemption. Such principal installments shall be paid hereunder, and shall cease to be en~~ed to any lien, benefit or security under this Bond Resolution except the right to receive payment from such special escrow account; such principal installments of the Bond shall not for any purpose of this Bond Resolution be deemed outstanding. SECTION 13. SEC Compliance. The City Official is hereby authorized to take any action and enter into any agreements or undertakings which may be required to comply with Securities and Exchange Commission Rule 15c2-12. SECTION 14. Contract with Bondowners. The covenants, representations, and warranties contained in this Resolution and the Bond and any covenants, representations and warranties in the closing documents relating to the Bond shall constitute contracts with the Bondowner, and shall be enforceable by them. This resolution was read by title only in accordance with Ashland Municipal Code §2.04.090 duly PASSED and ADOPTED this/~ day of October, 1996. Barbara Christensen, City Recorder SIGNED AND APPROVED this ~, day of October, 1996. Catherine Golden, Mayor Reviewed as to form: Paul Nolte, City Attorney Page 5 - Resolution No. R-1 United States of America City of Ashland, Oregon Limited Tax Improvement Bond Series 1996 $605,000 City of Ashland, Oregon (the "City"), for value received, acknowledges itself indebted and hereby promises to pay to Bank of America National Trust and Savings Association the aggregate principal amount of $605,000, in the following installments, together with interest on those installments at the rates indicated below. P~nc~alInstallment Pdndpal Payment D~e InterestRate $50,000 May 1,1997 4.51% $80,000 May 1, 1998 4.71% $80,000 May 1, 1999 4.91% $80,000 May I, 2000 5.11% $75,000 May 1, 2001 5.31% $75,000 May 1, 2002 5.41% $55,000 May 1, 2003 5.51% $35,000 May 1, 2004 5.61% $15,000 May 1, 2005 5.71% $60,000 May 1,2006 5.82% Interest is payable semiannually on May 1 and November 1 of each year, commencing May 1, 1997, and shall be computed on the basis of a 360-day year of twelve 30-day months. This bond is issued in the aggregate principal amount of $605,000 and is designated as the City's Limited Tax Improvement Bond, Series 1996 (the '~ond"). The Bond is issued to finance local improvement projects in the City of Ashland. This Bond is issued under and pursuant to City Resolution No. 9643 adopted on October 15, 1996 (the '~.esolution"), and in full and strict accordance and compliance with all of the provisions of the Constitution and Statutes of the State of Oregon and the Charter of the City. This Bond is a valid and legally binding obligation of the City. This Bond is payable primarily from the Assessment Payments, as defined in the Resolution. The full faith and credit of City are also pledged to pay the principal and interest on this Bond when due. In addition, the City has covertanted to levy annually, as provided by law, a direct ad valorera tax upon all of the taxable property within the City, subject to the limitations of Article XI, Section 1 lb of the Oregon Constitution, to pay this Bond promptly as it matures, and the City has covenanted with the Owner of the Bond to levy such a tax annually during each year that any portion of the Bond is outstanding. The City reserves the right, to redeem all or any portion of the principal City of Ashland Limited Tax Improvement Bond, Series 1996, Bond No. R-l, Page 1 installments of this Bond which mature after May 1, 2002, on May 1, 2002, and on any date thereafter, at par plus accrued interest to the date fixed for redemption, upon notice given to the Bondowner not less than thirty days prior to the redemption date. Principal installments of this Bond rnamring on May 1, 2006, may be redeemed by the City on May I, 1997, and on any interest payment date thereafter. Any transfer of this Bond must be registered with the City. This Bond may be registered only by surrendering it, together with a writtan instrument of transfer which is satisfactory to the City and which is executed by the registered owner or his duly authorized attorney. Upon registration, a new registered Bond shall be issued to the transferee. The City may treat the person in whose name this Bond is registered on the bond register as its absolute owner for all purposes, as provided in the Resolution. IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things required to exist, to happen, and to be performed precedent to and in the issuance of this bond have existed, have happened, and have been performed in due time, form, and manner as required by the Constitution and Statutes of the State of Oregon; that the issue of which this bond is a part, and all other obligations of the City, are within every debt limitation and other limit prescribed by such Constitution and Statutes. IN WITNESS WHEREOF, the City Council of City of Ashland, Oregon, has caused this bond to be signed by signature of its Mayor and attested by signature of its City Official, as of the ]~ day of October, 1996. City of Ashland, Oregon Mayor City of Ashiand Limited Tax Improvement Bond, Series 1996, Bond No. R-l, Page 2 A,ignm~nt FOR VALUE RECEIVED, the undersigned sells, assignz mad transfers unto Please insert social security or other identifying number of assignee this bond and do~ hereby hrevocably constitute sad appoint as attorney to Ir~n.,~er this bond on the books kept for regisfration thereof with the full power of substitution in the V,r~]ises. Dated: NOTICE: The signature to this assi~n~nt must correspond with the name of the registered owner as it appears upon the face of this bond in evay psrficuhr, without alteration or enlsrgement or any change whatever. Signature Crasrsnteed (Bank, Trust Compsny or Brokerage Firm) Authorized The following abbreviations, when used in the inscription on the face of this bond, nh~fil be co~rued as thougja they wore written out in full acco~ng to q~plicable laws or regulations. TEN COM -- tenants in ce~mnon TENENT--sste~antsbytheonfireties rf TEN - as joint ternrots with right of s~-vivorship and not as tenants in common OREGON CUSTODIANS ~se the foliorAng CUST UL OREG ~ as custodian for (name d minor) OR UNIF TRANS MIN ACT under the Oregon Uniform Transfer to Minors Act Additional abbreviations may also be used though not in the list above. City of Ashland Limited Tax Improvement Bond, Series 1996, Bond No. R-l, Page 3