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HomeMy WebLinkAboutRes1987-113 . . . Sponsored By: Garzini CITY OF SEWARD, AlASKA RESOLUTION NO. 87-113 A RESOLUTION OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE SALE TO THE ALASKA MUNICIPAL BOND BANK OF $2,550,000 OF GENERAL OBLIGATION BONDS, SERIES 1987, AUTHORIZED BY RESOLUTION NO. 87-109; AUTHORIZING THE MAYOR OR CITY MANAGER TO EXECUTE A LOAN AGREEMENT WITH THE AlASKA MUNICIPAL BOND BANK FOR THE PURCHASE AND SALE OF SUCH BONDS; AND PROVIDING FOR RELATED MATTERS. WHEREAS, on November 23, 1987 the City Council of the City of Seward, Alaska (the "City"), adopted Resolution No. 87-109 (the "Resolution") authorizing, interalia, the issuance and the sale of not to exceed $2,550,000 principal amount of the general obligation bonds of the City referred to in Proposition 1 and Proposition 2 passed and approved at an election held on October 6, 1987 for the purpose of acquiring property for, planning, designing, equipping and constructing capital improvements; and WHEREAS, it is hereby found to be in tbe best interest of the City that the Mayor or City Manager of the City execute a Loan Agreement (the "Loan Agreement") which provides for the sale, issuance and delivery by the City and the purchase by the Alaska Municipal Bond Bank (the "Bond Bank") of the $2,550,000 of said bonds authorized by the Resolution; and, WHEREAS, it appears that the Loan Agreement, which is now before the City Council, is in appropriate form and is an appropriate instrument for the purpose intended; and, WHEREAS, it is hereby found to be in the best interest of the City that the Loan Agreement be approved and executed and that certain matters relating to such bonds and the use of the proceeds of such sale be established; and, WHEREAS, the Resolution provides that the City Council shall by resolution establish the total amount of bonds to be issued pursuant to the Resolution, the date of such bonds, denominations, numbers, interest rates, interest payment dates, maturities, redemption provisions, and any other details of said bonds. . . . Resolution 87-113 Page 2 NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, as follows: Section 1. Definitions. Capitalized terms used in this resolution which are not otherwise defined herein, shall have the same meaning as.in the Resolution. In addition, the following terms shall have the following meanings: (a) "Bonds" means the General Obligation Bonds, Series 1987, of the City authorized and approved herein. (b) "Bond Year" means the one-year period beginning on the date of issue of the Bonds and ending on the date prior to the first anniversary thereof, and each subsequent one-year period. (c) "Computation Period" means the period from the date of issue of the Bonds through the date as of which the Rebate Amount is determined pursuant to Section 8 of this resolution. (d) "Excess Earnings Account" means the special account authorized to be created pursuant to Section 8 of this resolution and designated as the "General Obligation Bonds, Series 1987, Excess Earnings Account." (e) "Paying Agent" or "Bond Registrar" means Rainier National Bank, Seattle, Washington, or its successor, if any. (f) "Rebate Amount" means the amount determined pursuant to Section 8 of this Resolution that is to be rebated to the United States of America under the circumstances set forth therein. Section 2. Sale by Negotiation. The Bonds shall be sold at negotiated sale at the earliest time practicable to provide funds for the purposes authorized by the Resolution and further enumerated herein. Section 3. Bond Sale. Loan Agreement and Terms of the Bonds. The sale of $2,550,000 principal amount of the Bonds which have been previously authorized by the Resolution is hereby authorized and approved and the Mayor or City manager of the City are hereby authorized, empowered and directed to execute and deliver the Loan Agreement for and on behalf of the City, including necessary counterparts, in substantially the form and content now before this meeting but with such changes, modifications, additions or deletions therein as shall to them seem necessary, desirable or appropriate, their execution thereof to constitute conclusive evidence of their approval of any and all changes, modifications, additions or deletions therein from the form and content of the Loan Agreement now before this meeting, and, from and after the execution and delivery of the Loan Agreement, the Mayor or City Manager are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Loan Agreement as executed. Section 4. Date. Maturities. Payment Dates and Terms of Redemption of the Bonds. The Bonds shall be dated December 1, 1987 and shall bear interest payable on June 1, 1988 and semi-annually thereafter on the first days of each June and December. The Bonds shall mature on December 1 of the years, and each maturity of the Bonds shall bear interest at the rate per annum, as follows: . . . Resolution 87-113 Page 3 Maturity Date Principal Amount Interest Rate 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 $ 70,000 70,000 75,000 80,000 85,000 90,000 100,000 105,000 115,000 120,000 130,000 140,000 150,000 165,000 180,000 195,000 210,000 225,000 245,000 5.75% 6.00 6.20 6.40 6.60 6.80 7.00 7.20 7.40 7.50 7.60 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 The Bonds which mature on and after December 1, 1998 shall be subject to redemption at the option of the City, subject to the provisions of the Loan Agreement, on and after December 1, 1997, in whole on any date, or in part on any interest payment date, at a price of par plus accrued interest to the date of redemption. Section 5. Delivery of the Bonds. The proper officials of the City are authorized and directed to execute all documents and to do everything necessary for the preparation and delivery of a transcript of proceedings pertaining to the Bonds and the printing, authentication and delivery of the Bonds in definitive form to the Bond Bank. Section 6. Application of Bond Proceeds. $450,000 of proceeds of sale of the Bonds shall be deposited in the "Senior Center Construction Fund" which is hereby created, and shall be used and applied to pay Costs of the Project which is identified in Proposition 1. $2,100,000 of proceeds of sale of the Bonds shall be deposited in the "North Bulkhead Dock Construction Fund" which is hereby created, and shall be used and applied to pay costs of the Project which is identified in Proposition 2. Section 7. Ratification. All actions taken by the Mayor and City manager of the City relative to the sale of the Bonds are hereby in all respects ratified and confirmed. The appropriate officers of the City have been authorized and directed pursuant to Section 3 hereof to execute the Loan Agreement and are hereby authorized and directed to all such other things necessary for the proper execution, issuance and delivery of the Bonds and for the proper application and use of the Bond proceeds. Section 8. Rebate Requirement. The City covenants and agrees to calculate the Rebate Amount and to pay the Rebate Amount to the United States of America in the manner and at the times required in this Section 8; provided, however, that any of the following provisions established by this Section 8 may be added to, modified or deleted upon written advice of bond counsel to the City to the effect that such additions, modifications or deletions will not adversely affect the tax-exempt status of interest on the Bonds. . . . Resolution 87-113 Page 4 (a) There is hereby authorized to be created a "General Obligation Bonds, Series 1987, Excess Earnings Account" (the "Excess Earnings Account") to be held separate from other accounts of the City. The City shall make deposits into and withdrawals and payments from the Excess Earnings Account at such times and in such manner as provided herein. (b) The City shall calculate the Rebate Amount for each Bond Year and shall deposit the Rebate Amount in the Excess Earnings Account in the next succeeding Bond Year, less the amounts, if any, previously paid to the United States of America as provided herein. The Rebate Amount shall be calculated as follows: (1) The aggregate amount earned on the amounts allocable to the Bonds, if any, deposited In the Senior Center Construction Fund and the North Bulkhead Dock Construction Fund for the Computation Period, minus (2) The aggregate amount that would have been earned on the amounts allocable to the Bonds, if any, deposited in the Senior Center Construction Fund and the North Bulkhead Dock Construction Fund for the Computation Period if such amounts had been invested at a yield equal to the actuarial yield on the Bonds for the Computation Period, plus (3) Any income (whether or not that income exceeds such yield on the Bonds) attributable to the excess of the amount computed under subparagraph (a) above over the amount computed under subparagraph (b) above. Any earnings on amounts deposited in the Senior Center Construction Fund must be retained in such Fund and used to pay Costs of the Project described in Proposition 1 or transferred to the Excess Earnings Account. Any earnings on amounts deposited in the North Bulkhead Dock Construction Fund must be retained in such Fund and used to pay costs of the Project described in Proposition 2 or transferred to the Excess Earnings Account. Any adjustments in the foregoing shall be made solely upon written instructions from the City's bond counsel. ( c) The City shall make deposits into the Excess Earnings Account to maintain it at the Rebate Amount, less the amounts, if any, previously paid to the United States of America as provided herein. Such deposits may be made from any available moneys of the City. Any amounts that are withdrawn from the Excess Earnings Account as a result of a decrease in the Rebate Amount may be deposited in any account of the City. Earnings on amounts in the Excess Earnings Account must remain therein and may not be taken into account in determining a decrease in the Rebate Amount. (d) The City shall make installment payments from the Excess Earnings Account to the United States of America. The first payment shall be made not later than thirty (30) days after the end of the fifth Bond Year (unless the City is hereafter advised in writing by its bond counsel that another date has been established for such payment). Each subsequent installment payment shall be made not later than five (5) years after the next preceding payment was due (unless the City is hereafter advised in writing by its bond counsel that another date has been established for such payment). Each installment payment shall be such that at least ninety percent (90%) of the Rebate Amount for the Computation Period ending immediately prior to such installment payment will have been paid to the United States of America. Not later than sixty (60) days after retirement of the last obligation of the Bonds, the final installment payment shall be made such that one hundred percent (100%) of the Rebate Amount for the final Computation Period is paid to the United States of America. . . . Resolution 87-113 Pal:e 5 (e) The Rebate Amount shall be calculated within thirty (30) days of the end of the first Bond Year, within thirty (30) days of the end of each subsequent Bond Year, and within sixty (60) days of the retirement of the last obligation of the Bonds. Any required deposits into tbe Excess Earnings Account shall be made within the foregoing required calculation periods, respectively. (f) If, during any Computation Period, the Rebate Amount is less than the amounts previously paid to the United States of America, such a deficit may not be recovered from amounts previously paid to the United States of America. (g) The aggregate amount earned must include all income realized under Federal income tax accountin~ principles (whether or not the entity earning the income is subject to Federal income taxatIOn) with respect to any obligation and with respect to the reinvestment of investment receipts from such obligations. Transaction costs incurred in acquiring, carrying, selling or redeeming such obligations may not be offset in determining the aggregate amount earned. If any investments are retained after retirement of the last obligation of the Bonds, any unrealized gain or loss as of such retirement date must be taken into account in determining aggregate earnings. Gain or loss must be computed with reference to the fair market value of an obligation or security on the date on which it is deposited into any fund or account created hereunder. (h) The City covenants and agrees to make payments of the Rebate Amount to the United States of America as described in this Section 8 or in such other manner necessary to comply with the then applicable Federal tax law. Section 9. Effective Date. This Resolution shall take effect immediately. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th day of December 1987. THE CITY OF SEWARD, ALASKA ~fG~OR AYES: DUNHAM, GIESELER, HILTON, MEEHAN, O'BRIEN, NOLL & SIMUTIS NOES: NONE ABSENT: NONE ABSTAIN: NONE ATTEST: APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, POWELL & BRUNDIN, Attorneys for the City of Seward, Alaska h 11/~ Fred ~dson City Attorney (City Seal) . . . LOAN AGREEMENT AGREEMENT, dated as of the 1st day of December 1987, between the Alaska Municipal Bond Bank (the "Bank"), a body corporate and politic constituted as an instrumentality of the State of Alaska (the "State") exercising public and essential governmental functions, created pursuant to the provisions of Chapter 85, Title 44, Alaska Statutes, as amended (the "Act"), having its principal place of business at Anchorage, Alaska, and the City of Seward, Alaska, a duly constituted home rule city of the State (the "City"): WIT N E SSE T H: WHEREAS, pursuant to the Act, the Bank is authorized to make loans of money (the "Loan" or "Loans") to governmental units; and WHEREAS, the City is a Governmental Unit as defined in the General Bond Resolution of the Bank hereinafter mentioned and pursuant to the Act is authorized to accept a Loan from the Bank to be evidenced by its municipal bonds purchased by the Bank; and WHEREAS, the City is desirous of borrowing money from the Bank in the amount of $2,550,000 and has submitted an application to the Bank for a Loan in such amount and the City has duly authorized the issuance of its fully registered bonds in the aggregate principal amount of $2,550,000, (the "Municipal Bonds") which bonds are to be purchased by the Bank as evidence of the Loan in accordance with this Agreement; and WHEREAS, the application of the City contains the information required by the Bank; and WHEREAS, to provide for the issuance of bonds of the Bank in order to obtain from time to time monies with which to make Loans, the Bank has adopted the General Bond Resolution on May 27,1976, as amended (the "Bond Resolution"), LOAN AGREEMENT Page 1. A8499FMO authorizing the making of such Loan to the City and the purchase of the Municipal Bonds; NOW, THEREFORE, the parties agree: 1. The Bank hereby makes the Loan and the City accepts the Loan in the amount of $2,550,000. As evidence of the Loan made to the City and such money borrowed from the Bank by the City, the City hereby sells to the Bank the Municipal Bonds in the principal amounts, with the maturities, and bearing interest from their date at the rate or rates per annum, stated in Exhibit "A" appended hereto. For purposes of this Loan Agreement the interest on the Municipal Bonds will be computed without regard to Sections 3 and 4 hereof which require that the City make funds available to the Trustee acting under the Bond Resolution for the payment of principal and interest at least seven business days prior to each respective principal and interest payment date. 2. The City represents that it has duly adopted or will adopt all necessary ordinances or resolutions and has taken or will take all proceedings required by law to enable it to enter into this Loan Agreement and issue its binding obligations to the Bank. 3. Subject to any applicable legal limitations, the amount to be paid by the City pursuant to this Loan Agreement representing interest due on its Municipal Bonds (the "Municipal Bonds Interest Payments") shall be computed at the same rate or rates of interest borne by the corresponding maturities of the bonds sold by the Bank in order to obtain the monies with which to make the Loan and to purchase the Municipal Bonds (the "Bank Bonds") and shall be paid by the City in such manner and at such times as set forth in Exhibit "A" as to provide funds sufficient to pay interest as the same becomes due on the Bank Bonds, and the City shall make such funds available to the Trustee acting under the Bond Resolution at least seven business days prior to each interest payment date. 4. The amount to be paid by the City pursuant to this Loan Agreement representing principal due on its Municipal Bonds (the "Municipal Bonds Principal LOAN AGREEMENT Page 2. A8499FMO . . . Payments") shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay the principal of the Bank Bonds as the same matures (based upon the maturity schedule stated in Exhibit "A"), and the City shall make such funds available to the Trustee acting under the Bond Resolution at least seven business days prior to each principal payment date. 5. In the event the amounts referred to in Sections 3 and 4 hereof to be paid by the City pursuant to this Loan Agreement are not made available at any time specified therein, the City agrees that any money payable to it by any department or agency of the State may be withheld from it and paid over directly to the Trustee acting under the Bond Resolution, and this Loan Agreement shall be full warrant, authority and direction to make such payment upon notice to such department or agency by the Bank as provided in the Act. 6. In the event Bank Bonds have been refunded and the interest rate the Bank is required to pay on its refunding bonds in any year is less than the interest rate payable by the City on the Municipal Bonds for the corresponding year pursuant to Section 1 hereof, then both the Municipal Bonds Interest Payments and the Municipal Bonds Principal Payments will be adjusted in such a manner that (i) the interest rate paid by the City in any year is equal to the interest rate paid by the Bank on the Bank's refunding bonds for such corresponding year and (ii) on a present value basis the resulting sum of the adjusted Municipal Bonds Interest Payments and Municipal Bonds Principal Payments is equal to or less than the sum of the Municipal Bonds Interest Payments and Municipal Bonds Principal Payments due over the remaining term of the Municipal Bonds as initially established under this Loan Agreement. In the event of such a refunding of the Bank Bonds, the Bank shall present to the City for the City's approval, a revised schedule of Municipal Bonds Interest Payments and Municipal Bonds Principal Payments. If approved by the City the revised LOAN AGREEMENT Page 3. A8499FMO schedule shall be attached hereto as Exhibit "A" and incorporated herein in replacement of the previous Exhibit "A" detailing said interest and principal payments. 7. The City is obligated to pay to the Bank Fees and Charges as defined in the Bond Resolution. Such Fees and Charges actually collected from the City shall be in an amount sufficient, together with the City's Allocable Proportion of other monies available therefor under the provisions of the Bond Resolution, and other monies available therefor, including any specific grants made by the United States of America or any agency or instrumentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to paragraph (3) of Section 603 of the Bond Resolution: (a) to pay, as the same become due, the City's Allocable Proportion of the Administrative Expenses (as defined in the Bond Resolution) of the Bank; and (b) to pay, as the same become due, the City's Allocable Proportion of the fees and expenses of the Trustee and paying agent for the Bank Bonds. The City's Allocable Proportion as used herein shall mean the proportionate amount of the total requirement in respect to which the term is used determined by the ratio that the principal amount of Municipal Bonds outstanding bears to the total of all Loans then outstanding to all Governmental Units under the Bond Resolution, as certified by the Bank. The waiver by the Bank of any fees payable pursuant to this Section 7 shall not constitute a subsequent waiver thereof. 8. The City is obligated to make the Municipal Bonds Principal Payments scheduled by the Bank. The first such Municipal Bonds Principal Payment is due on December 1, 1989, and thereafter on each December 1. The City is obligated to make the Municipal Bonds Interest Payments scheduled by the Bank and to pay any Fees and Charges imposed by the Bank on a semi-annual basis. 9. The Bank shall not sell and the City shall not redeem prior to maturity any of the Municipal Bonds with respect to which the Loan is made in an amount greater LOAN AGREEMENT Page 4. A8499FMO . . . than the Bank Bonds which are then outstanding and which are then redeemable, and in the event of any such sale or redemption, the same shall be in an amount not less than the aggregate of (i) the principal amount of the Municipal Bonds (or portion thereof) so to be redeemed, (ii) the interest to accrue on the Municipal Bonds (or portion thereof) so to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Municipal Bonds (or portion thereof) so to be redeemed, and (iv) the cost and expenses of the Bank in effecting the redemption of the Municipal Bonds (or portion thereof) so to be redeemed. The City shall give the Bank at least fifty (50) days notice of intention to redeem its Municipal Bonds. In the event the Bank Bonds with respect to which the sale or redemption prior to maturity of such Municipal Bonds is being made have been refunded and the refunding bonds of the Bank issued for the purpose of refunding such Bank Bonds were issued in a principal amount in excess of or less than the Municipal Bonds remaining unpaid at the date of issuance of such refunding bonds, the amount which the City shall be obligated to payor the Bank shall receive under item (i) above shall be the principal amount of such refunding bonds outstanding. In the event the Bank Bonds have been refunded and the interest the Bank is required to pay on the refunding bonds is less than the interest the Bank was required to pay on the Bank Bonds, the amount which the City shall be obligated to payor the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such refunding bonds outstanding. In the event the Bank Bonds have been refunded, the amount which the City shall be obligated to payor the Bank shall receive under item (iii) above, when the refunded Bank Bonds are to be redeemed, shall be the applicable premium, if any, on the said Bank Bonds to be redeemed. LOAN AGREEMENT Page 5. A8499FMO Nothing in this Section shall be construed as preventing the City from refunding the Municipal Bonds in exchange for new Municipal Bonds in conjunction with a refunding of the Bank Bonds. 10. Simultaneously with the delivery of the Municipal Bonds to the Bank, the City shall furnish to the Bank evidence satisfactory to the Bank which shall set forth among other things, that said Bonds will constitute valid general obligations of the City. 11. The City shall be obligated to inform in writing the Bank and the corporate trust office of the Trustee under the Bond Resolution at least thirty (30) days prior to each interest payment date on the Municipal Bonds of the name of the official to whom invoices for the payment of interest and principal should be addressed. 12. Notwithstanding Paragraph 17 hereof, prior to payment of the amount of the Loan or any portion thereof, and the delivery of the Municipal Bonds to the Bank or its designee, the Bank shall have the right to cancel all or any part of its obligations hereunder if: (a) Any representation, warranty or other statement made by the City to the Bank in connection with its application to the Bank for a Loan shall be incorrect or incomplete in any material respect. (b) The City has violated commitments made by it in its application and supporting documents or has violated any of the terms of this Loan Agreement. (c) The financial position of the City has, in the opinion of the Bank, suffered a materially adverse change between the date of this Loan Agreement and the scheduled time of delivery of the Municipal Bonds to the Bank. 13. The obligation of the Bank under this Loan Agreement is contingent upon delivery of its 1987 Series A General Obligation Bonds and receipt of the proceeds thereof. 14. The City shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on any Municipal Bond to LOAN AGREEMENT Page 6. A8499FMO . . . become subject to Federal income taxes in addition to Federal income taxes to which interest on such Municipal Bond is subject on the date of original issuance thereof. The City shall not permit any of the proceeds of the Municipal Bonds, or any facilities financed with such proceeds, to be used in any manner that would cause any Municipal Bond to constitute a "private activity bond" within the meaning of Section 141 of the Internal Revenue Code of 1986 (the "Code"). The City shall make no use or investment of the proceeds of the Municipal Bonds which will cause the Municipal Bonds to be "arbitrage bonds" subject to taxation by reason of Section 148 of the Code. So long as any of the Municipal Bonds are outstanding, the City, with respect to the proceeds of the Municipal Bonds, shall comply with all requirements of said Section 148 and of all regulations of the United States Department of Treasury issued thereunder, to the extent that such requirements are, at the time, applicable and in effect. The City shall indemnify and hold harmless the Bank from any obligation of the City to make rebate payments to the United States under said Section 148 arising from the City's use or investment of the proceeds of the Municipal Bonds. 15. If any provision of this Loan Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this Loan Agreement and this Loan Agreement shall be construed and enforced as if such invalid or unenforceable provision had not been contained herein. 16. This Loan Agreement may be executed in one or more counterparts, any of which shall be regarded for all purposes as an original and all of which constitute but one and the same instrument. Each party agrees that it will execute any and all documents or other instruments, and take such other actions as are necessary, to give effect to the terms of this Loan Agreement. LOAN AGREEMENT Page 7. A8499FMO 17. No waiver by either party of any term or condition of this Loan Agreement shall be deemed or construed as a waiver of any other term or condition hereof, nor shall a waiver of any breach of this Loan Agreement be deemed to constitute a waiver of any subsequent breach, whether of the same or of a different section, subsection, paragraph, clause, phrase, or other provision of this Loan Agreement. 18. This Loan Agreement merges and supersedes all prior negotiations, representations, and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire agreement between the parties hereto in respect thereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ALASKA MUNICIPAL BOND BANK (S E A L) ATTEST: By Executive Director CITY OF SEWARD, ALASKA (SEAL) By Title: ATTEST: LOAN AGREEMENT Page 8. A8499FMO . EXHmIT "A" TO LOAN AGREEMENT BETWEEN THE CITY OF SEWARD, ALASKA, AND THE ALASKA MUNICIPAL BOND BANK City of Seward General Obligation Bonds, Series 1987 Principal Interest Years Amounts Rates 1989 $ 70,000 5.75% 1990 70,000 6.00 1991 75,000 6.20 1992 80,000 6.40 1993 85,000 6.60 1994 90,000 6.80 1995 100,000 7.00 1996 105,000 7.20 . 1997 115,000 7.40 1998 120,000 7.50 1999 130,000 7.60 2000 140,000 8.25 2001 150,000 8.25 2002 165,000 8.25 2003 180,000 8.25 2004 195,000 8.25 2005 210,000 8.25 2006 225,000 8.25 2007 245,000 8.25 . LOAN AGREEMENT Page 9. A8499FMO