HomeMy WebLinkAboutRESOLUTION NO. 2011-30
RESOLUTION NO. 2011-30
RESOLUTION AUTHORIZING THE ISSUANCE OF $540,000 GENERAL
OBLIGATION WATER IMPROVEMENT BONDS, SERIES 2011, AND
PROVIDING FOR THE LEVY OF TAXES TO PAY THE SAME
WHEREAS, the City of Fairfax (the “City”), in Linn County, State of Iowa, has
heretofore proposed to enter into a General Obligation Water Improvement Loan Agreement (the
“Loan Agreement”) in a principal amount not to exceed $550,000 pursuant to the provisions of
Section 384.24A of the Code of Iowa for the purpose of paying the costs, to that extent, of
constructing improvements to the Municipal Waterworks System, and has published notice of
the proposed action and has held a hearing thereon on March 8, 2011; and
WHEREAS, pursuant to advertisement of sale, bids for the purchase of $540,000 General
Obligation Water Improvement Bonds, Series 2011 (the “Bonds”) to be issued in evidence of the
City’s obligation under the Loan Agreement were received and canvassed on behalf of the City
and the bid of UMB Bank, n.a., Kansas City, Missouri (the “Purchaser”), was determined to be
the best, such bid proposing the lowest interest cost to the City; and
WHEREAS, it is now necessary to take final action for the issuance of the Bonds;
NOW, THEREFORE, Be It Resolved by the City Council of the City of Fairfax, Iowa, as
follows:
Section 1. The Bonds are hereby authorized to be issued in evidence of the obligation
of the City under the Loan Agreement, in the total aggregate principal amount of $540,000, to be
dated May 12, 2011, in the denomination of $5,000 each, or any integral multiple thereof,
maturing on June 1 in each of the years, in the respective principal amounts and bearing interest
at the respective rates, as follows:
Principal Interest Rate Principal Interest Rate
Year Amount Per Annum Year Amount Per Annum
2014 $100,000 1.35% 2020 $115,000 3.15%
2016 $100,000 2.05% 2022 $120,000 3.65%
2018 $105,000 2.65%
Section 2. Bankers Trust Company, Des Moines, Iowa, is hereby designated as the
Registrar and Paying Agent for the Bonds and may be hereinafter referred to as the “Registrar”
or the “Paying Agent.” The City shall enter into an agreement (the “Registrar/Paying Agent
Agreement”) with the Registrar, in substantially the form as has been placed on file with the
Council; the Mayor and City Clerk are hereby authorized and directed to sign the
Registrar/Paying Agent Agreement on behalf of the City, and the Registrar/Paying Agent
Agreement is hereby approved.
The City reserves the right to prepay part or all of the Bonds maturing in each of the
years 2020 and 2022, inclusive, prior to and in any order of maturity, on June 1, 2019, or on any
date thereafter upon terms of par and accrued interest. If less than all of the Bonds of any like
maturity are to be redeemed, the particular part of those Bonds to be redeemed shall be selected
by the Registrar by lot. The Bonds may be called in part in one or more units of $5,000.
Principal of the Bond maturing on June 1, 2014, is subject to mandatory redemption (by
lot, as selected by the Registrar) on June 1, 2013, at a redemption price of 100% of the principal
amount thereof to be redeemed, plus accrued interest thereon to the redemption date, in the
following principal amounts:
Principal
Year Amount
2013 $50,000
2014 $50,000 (Maturity)
Principal of the Bond maturing on June 1, 2016, is subject to mandatory redemption (by
lot, as selected by the Registrar) on June 1, 2015, at a redemption price of 100% of the principal
amount thereof to be redeemed, plus accrued interest thereon to the redemption date, in the
following principal amounts:
Principal
Year Amount
2015 $50,000
2016 $50,000 (Maturity)
Principal of the Bond maturing on June 1, 2018, is subject to mandatory redemption (by
lot, as selected by the Registrar) on June 1, 2017, at a redemption price of 100% of the principal
amount thereof to be redeemed, plus accrued interest thereon to the redemption date, in the
following principal amounts:
Principal
Year Amount
2017 $50,000
2018 $55,000 (Maturity)
Principal of the Bond maturing on June 1, 2020, is subject to mandatory redemption (by
lot, as selected by the Registrar) on June 1, 2019, at a redemption price of 100% of the principal
amount thereof to be redeemed, plus accrued interest thereon to the redemption date, in the
following principal amounts:
Principal
Year Amount
2019 $55,000
2020 $60,000 (Maturity)
Principal of the Bond maturing on June 1, 2022, is subject to mandatory redemption (by
lot, as selected by the Registrar) on June 1, 2021, at a redemption price of 100% of the principal
amount thereof to be redeemed, plus accrued interest thereon to the redemption date, in the
following principal amounts:
Principal
Year Amount
2021 $60,000
2022 $60,000 (Maturity)
If less than the entire principal amount of any Bond in a denomination of more than
$5,000 is to be redeemed, the Registrar will issue and deliver to the registered owner thereof,
upon surrender of such original Bond, a new Bond or Bonds, in any authorized denomination, in
a total aggregate principal amount equal to the unredeemed balance of the original Bond. Notice
of such redemption as aforesaid identifying the Bond or Bonds (or portion thereof) to be
redeemed shall be sent by electronic means or mailed by certified mail to the registered owners
thereof at the addresses shown on the City’s registration books not less than 30 days prior to such
redemption date. All of such Bonds as to which the City reserves and exercises the right of
redemption and as to which notice as aforesaid shall have been given and for the redemption of
which funds are duly provided, shall cease to bear interest on the redemption date.
Accrued interest on the Bonds shall be payable semiannually on the first day of June and
December in each year, commencing December 1, 2011. Interest shall be calculated on the basis
of a 360-day year comprised of twelve 30-day months. Payment of interest on the Bonds shall
be made to the registered owners appearing on the registration books of the City at the close of
business on the fifteenth day of the month next preceding the interest payment date and shall be
paid to the registered owners at the addresses shown on such registration books. Principal of the
Bonds shall be payable in lawful money of the United States of America to the registered owners
or their legal representatives upon presentation and surrender of the Bond or Bonds at the office
of the Paying Agent.
The Bonds shall be executed on behalf of the City with the official manual or facsimile
signature of the Mayor and attested with the official manual or facsimile signature of the City
Clerk, and shall be fully registered Bonds without interest coupons. In case any officer whose
signature or the facsimile of whose signature appears on the Bonds shall cease to be such officer
before the delivery of the Bonds, such signature or such facsimile signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery.
The Bonds shall not be valid or become obligatory for any purpose until the Certificate of
Authentication thereon shall have been signed by the Registrar.
The Bonds shall be fully registered as to principal and interest in the name of the owners
on the registration books of the City kept by the Registrar, and after such registration, payment of
the principal thereof and interest thereon shall be made only to the registered owners or their
legal representatives or assigns. Each Bond shall be transferable only upon the registration
books of the City upon presentation to the Registrar, together with either a written instrument of
transfer satisfactory to the Registrar or the assignment form thereon completed and duly
executed by the registered owner or the duly authorized attorney for such registered owner.
The record and identity of the owners of the Bonds shall be kept confidential as provided
by Section 22.7 of the Code of Iowa.
Section 3. Notwithstanding anything above to the contrary, the Bonds shall be issued
initially as Depository Bonds, with one fully registered Bond for each maturity date, in principal
amounts equal to the amount of principal maturing on each such date, and registered in the name
of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”).
On original issue, the Bonds shall be deposited with DTC for the purpose of maintaining a book-
entry system for recording the ownership interests of its participants and the transfer of those
interests among its participants (the “Participants”). In the event that DTC determines not to
continue to act as securities depository for the Bonds or the City determines not to continue the
book-entry system for recording ownership interests in the Bonds with DTC, the City will
discontinue the book-entry system with DTC. If the City does not select another qualified
securities depository to replace DTC (or a successor depository) in order to continue a book-
entry system, the City will register and deliver replacement Bonds in the form of fully registered
certificates, in authorized denominations of $5,000 or integral multiples of $5,000, in accordance
with instructions from Cede & Co., as nominee for DTC. In the event that the City identifies a
qualified securities depository to replace DTC, the City will register and deliver replacement
Bonds, fully registered in the name of such depository, or its nominee, in the denominations as
set forth above, as reduced from time to time prior to maturity in connection with redemptions or
retirements by call or payment, and in such event, such depository will then maintain the book-
entry system for recording ownership interests in the Bonds.
Ownership interests in the Bonds may be purchased by or through Participants. Such
Participants and the persons for whom they acquire interests in the Bonds as nominees will not
receive certificated Bonds, but each such Participant will receive a credit balance in the records
of DTC in the amount of such Participant’s interest in the Bonds, which will be confirmed in
accordance with DTC’s standard procedures. Each such person for which a Participant has an
interest in the Bonds, as nominee, may desire to make arrangements with such Participant to
have all notices of redemption or other communications of the City to DTC, which may affect
such person, forwarded in writing by such Participant and to have notification made of all
interest payments.
The City will have no responsibility or obligation to such Participants or the persons for
whom they act as nominees with respect to payment to or providing of notice for such
Participants or the persons for whom they act as nominees.
As used herein, the term “Beneficial Owner” shall hereinafter be deemed to include the
person for whom the Participant acquires an interest in the Bonds.
DTC will receive payments from the City, to be remitted by DTC to the Participants for
subsequent disbursement to the Beneficial Owners. The ownership interest of each Beneficial
Owner in the Bonds will be recorded on the records of the Participants whose ownership interest
will be recorded on a computerized book-entry system kept by DTC.
When reference is made to any action which is required or permitted to be taken by the
Beneficial Owners, such reference shall only relate to those permitted to act (by statute,
regulation or otherwise) on behalf of such Beneficial Owners for such purposes. When notices
are given, they shall be sent by the City to DTC, and DTC shall forward (or cause to be
forwarded) the notices to the Participants so that the Participants can forward the same to the
Beneficial Owners.
Beneficial Owners will receive written confirmations of their purchases from the
Participants acting on behalf of the Beneficial Owners detailing the terms of the Bonds acquired.
Transfers of ownership interests in the Bonds will be accomplished by book entries made by
DTC and the Participants who act on behalf of the Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interest in the Bonds, except as specifically
provided herein. Interest and principal will be paid when due by the City to DTC, then paid by
DTC to the Participants and thereafter paid by the Participants to the Beneficial Owners.
Section 4. The Bonds shall be in substantially the following form:
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF IOWA LINN COUNTY
CITY OF FAIRFAX
GENERAL OBLIGATION WATER IMPROVEMENT BOND, SERIES 2011
No. _____ $________
RATE MATURITY DATE DATE CUSIP
____% June 1, _____ May 12, 2011 303898 ___
The City of Fairfax (the “City”), in Linn County, State of Iowa, for value received,
promises to pay on the maturity date of this Bond to
Cede & Co.
New York, NY
or registered assigns, the principal sum of
THOUSAND DOLLARS
in lawful money of the United States of America upon presentation and surrender of this Bond at
the office of Bankers Trust Company, Des Moines, Iowa (hereinafter referred to as the
“Registrar” or the “Paying Agent”), with interest on said sum, until paid, at the rate per annum
specified above, from the date of this Bond, or from the most recent interest payment date on
which interest has been paid, on June 1 and December 1 of each year, commencing December 1,
2011, except as the provisions hereinafter set forth with respect to redemption prior to maturity
may be or become applicable hereto. Interest on this Bond is payable to the registered owner
appearing on the registration books of the City at the close of business on the fifteenth day of the
month next preceding the interest payment date, and shall be paid to the registered owner at the
address shown on such registration books. Interest shall be calculated on the basis of a 360-day
year comprised of twelve 30-day months.
This Bond shall not be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by the Registrar.
This Bond is one of a series of General Obligation Water Improvement Bonds, Series
2011 (the “Bonds”) issued by the City in the aggregate principal amount of $540,000, to
evidence its obligation under a certain loan agreement, dated as of May 12, 2011 (the “Loan
Agreement”), entered into by the City for the purpose of paying the cost, to that extent, of
constructing improvements to the Municipal Waterworks System.
The Bonds are issued pursuant to and in strict compliance with the provisions of
Chapters 76 and 384 of the Code of Iowa, 2011, and all other laws amendatory thereof and
supplemental thereto, and in conformity with a resolution of the City Council adopted and
approved on April 26, 2011, authorizing and approving the Loan Agreement and providing for
the issuance and securing the payment of the Bonds (the “Resolution”), and reference is hereby
made to the Resolution and the Loan Agreement for a more complete statement as to the source
of payment of the Bonds and the rights of the owners of the Bonds.
The City reserves the right to prepay part or all of the principal of the Bonds maturing in
each of the years 2020 and 2022, inclusive, prior to and in any order of maturity, on June 1,
2019, or on any date thereafter upon terms of par and accrued interest. Principal of the Bonds is
subject to mandatory redemption (by lot, as selected by the Registrar), in accordance with the
mandatory redemption schedules set forth in the Resolution, at a redemption price of 100% of
the principal amount thereof to be redeemed, plus accrued interest thereon to the redemption
date.
If less than all of the Bonds of any like maturity are to be redeemed, the particular part of
those Bonds to be redeemed shall be selected by the Registrar by lot. The Bonds may be called
in part in one or more units of $5,000. If less than the entire principal amount of any Bond in a
denomination of more than $5,000 is to be redeemed, the Registrar will issue and deliver to the
registered owner thereof, upon surrender of such original Bond, a new Bond or Bonds, in any
authorized denomination, in a total aggregate principal amount equal to the unredeemed balance
of the original Bond. Notice of such redemption as aforesaid identifying the Bond or Bonds (or
portion thereof) to be redeemed shall be sent by electronic means or mailed by certified mail to
the registered owners thereof at the addresses shown on the City’s registration books not less
than 30 days prior to such redemption date. All of such Bonds as to which the City reserves and
exercises the right of redemption and as to which notice as aforesaid shall have been given and
for the redemption of which funds are duly provided, shall cease to bear interest on the
redemption date.
This Bond is fully negotiable but shall be fully registered as to both principal and interest
in the name of the owner on the books of the City in the office of the Registrar, after which no
transfer shall be valid unless made on said books and then only upon presentation of this Bond to
the Registrar, together with either a written instrument of transfer satisfactory to the Registrar or
the assignment form hereon completed and duly executed by the registered owner or the duly
authorized attorney for such registered owner.
The City, the Registrar and the Paying Agent may deem and treat the registered owner
hereof as the absolute owner for the purpose of receiving payment of or on account of principal
hereof, premium, if any, and interest due hereon and for all other purposes, and the City, the
Registrar and the Paying Agent shall not be affected by any notice to the contrary.
And It Is Hereby Certified and Recited that all acts, conditions and things required by the
laws and Constitution of the State of Iowa, to exist, to be had, to be done or to be performed
precedent to and in the issue of this Bond were and have been properly existent, had, done and
performed in regular and due form and time; that provision has been made for the levy of a
sufficient continuing annual tax on all the taxable property within the City for the payment of the
principal of and interest on this Bond as the same will respectively become due; that the faith,
credit, revenues and resources and all the real and personal property of the City are irrevocably
pledged for the prompt payment hereof, both principal and interest; and that the total
indebtedness of the City, including this Bond, does not exceed any constitutional or statutory
limitations.
IN TESTIMONY WHEREOF, the City of Fairfax, Iowa, by its City Council, has caused
this Bond to be executed with the duly authorized facsimile signature of its Mayor and attested
with the duly authorized facsimile signature of its City Clerk, on May 12, 2011.
CITY OF FAIRFAX, IOWA
By (DO NOT SIGN)
Mayor
Attest:
(DO NOT SIGN)
City Clerk
Registration Date: (Registration Date)
REGISTRAR’S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within-mentioned Resolution.
BANKERS TRUST COMPANY
Des Moines, Iowa
Registrar
By (Authorized Signature)
ABBREVIATIONS
The following abbreviations, when used in this Bond, shall be construed as though they
were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common UTMA
TEN ENT - as tenants by the entireties
(Custodian)
JT TEN - as joint tenants with right of As Custodian for
survivorship and not as
(Minor)
tenants in common
under Uniform Transfers to Minors Act
(State)
Additional abbreviations may also be used though not in the list above.
ASSIGNMENT
For valuable consideration, receipt of which is hereby acknowledged, the undersigned
assigns this Bond to
(Please print or type name and address of Assignee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
and does hereby irrevocably appoint _______________________________, Attorney, to transfer
this Bond on the books kept for registration thereof with full power of substitution.
Dated:
Signature guaranteed:
(Signature guarantee must be provided in accordance
with the prevailing standards and procedures of the
Registrar and Transfer Agent. Such standards and
procedures may require signatures to be guaranteed by
certain eligible guarantor institutions that participate in
a recognized signature guarantee program.)
NOTICE: The signature to this Assignment must
correspond with the name of the registered owner as
it appears on this Bond in every particular, without
alteration or enlargement or any change whatever.
Section 5. The Bonds shall be executed as herein provided as soon after the adoption
of this resolution as may be possible, and thereupon they shall be delivered to the Registrar for
registration, authentication and delivery to or on behalf of the Purchaser, upon receipt of the loan
proceeds, and all action heretofore taken in connection with the Loan Agreement is hereby
ratified and confirmed in all respects.
Section 6. For the purpose of providing for the levy and collection of a direct annual
tax sufficient to pay the principal of and interest on the Bonds as the same become due, there is
hereby ordered levied on all the taxable property in the City in each of the years while the Bonds
are outstanding, a tax sufficient for that purpose, and in furtherance of this provision, but not in
limitation thereof, there is hereby levied on all the taxable property in the City the following
direct annual tax for collection in each of the following fiscal years, to-wit:
For collection in the fiscal year beginning July 1, 2012,
sufficient to produce the net annual sum of $64,185;
For collection in the fiscal year beginning July 1, 2013,
sufficient to produce the net annual sum of $63,510;
For collection in the fiscal year beginning July 1, 2014,
sufficient to produce the net annual sum of $62,835;
For collection in the fiscal year beginning July 1, 2015,
sufficient to produce the net annual sum of $61,810;
For collection in the fiscal year beginning July 1, 2016,
sufficient to produce the net annual sum of $60,785;
For collection in the fiscal year beginning July 1, 2017,
sufficient to produce the net annual sum of $64,460;
For collection in the fiscal year beginning July 1, 2018,
sufficient to produce the net annual sum of $63,003;
For collection in the fiscal year beginning July 1, 2019,
sufficient to produce the net annual sum of $66,270;
For collection in the fiscal year beginning July 1, 2020,
sufficient to produce the net annual sum of $64,380;
For collection in the fiscal year beginning July 1, 2021,
sufficient to produce the net annual sum of $62,190.
Section 7. A certified copy of this resolution shall be filed with the County Auditor
of Linn County, and the County Auditor is hereby instructed to enter for collection and assess the
tax hereby authorized. When annually entering such taxes for collection, the County Auditor
shall include the same as a part of the tax levy for Debt Service Fund purposes of the City and
when collected, the proceeds of the taxes shall be converted into the Debt Service Fund of the
City and set aside therein as a special account to be used solely and only for the payment of the
principal of and interest on the Bonds hereby authorized and for no other purpose whatsoever.
Any amount received by the City as accrued interest on the Bonds shall be deposited into such
special account and used to pay interest due on the Bonds on the first interest payment date.
Section 8. The interest or principal and both of them falling due in any year or years
shall, if necessary, be paid promptly from current funds on hand in advance of taxes levied and
when the taxes shall have been collected, reimbursement shall be made to such current funds in
the sum thus advanced.
The City hereby pledges the faith, credit, revenues and resources and all of the real and
personal property of the City for the full and prompt payment of the principal of and interest on
the Bonds.
Section 9. It is the intention of the City that interest on the Bonds be and remain
excluded from gross income for federal income tax purposes pursuant to the appropriate
provisions of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations in
effect with respect thereto (all of the foregoing herein referred to as the “Internal Revenue
Code”). In furtherance thereof, the City covenants to comply with the provisions of the Internal
Revenue Code as they may from time to time be in effect or amended and further covenants to
comply with the applicable future laws, regulations, published rulings and court decisions as may
be necessary to insure that the interest on the Bonds will remain excluded from gross income for
federal income tax purposes. Any and all of the officers of the City are hereby authorized and
directed to take any and all actions as may be necessary to comply with the covenants herein
contained.
The City hereby designates the Bonds as “Qualified Tax Exempt Obligations” as that
term is used in Section 265(b)(3)(B) of the Internal Revenue Code.
Section 10. The Securities and Exchange Commission (the “SEC”) has promulgated
certain amendments to Rule 15c2-12 under the Securities Exchange Act of 1934 (17 C.F.R.
§ 240.15c2-12) (the “Rule”) that make it unlawful for an underwriter to participate in the primary
offering of municipal securities in a principal amount of $1,000,000 or more unless, before
submitting a bid or entering into a purchase contract for the bonds, an underwriter has reasonably
determined that the issuer or an obligated person has undertaken in writing for the benefit of the
bondholders to provide certain disclosure information to prescribed information repositories on a
continuing basis or unless and to the extent the offering is exempt from the requirements of the
Rule.
The principal amount of the Bonds is less than $1,000,000. The City hereby represents
that it has not issued within the six months before the date of issuance of the Bonds, and that it
reasonably expects that it will not issue within six months after the date of issuance of the Bonds,
other securities of the City of substantially the same security and providing financing for the
same general purpose or purposes as the Bonds. Consequently, this Council hereby finds that the
Rule is inapplicable to the Bonds, because the aggregate principal amount of the Bonds and any
other securities required to be integrated with the Bonds under the Rule is less than $1,000,000.
Section 11. All resolutions or parts thereof in conflict herewith are hereby repealed to
the extent of such conflict.
Passed and approved April 26, 2011.
AYES: Beer, Frieden, Otto, Magers, and Wainwright
NAYS: None
Mayor Pro Tem, Marianne Wainwright
Attest:
City Clerk/Treasurer, Cynthia Stimson