Title
Resolution Authorizing Publication of Notice of Intent to Issue Revenue Bonds (Sewage Disposal System Revenue Bonds not to Exceed $120,000,000.00)
Memorandum
Recommended for Council is the publication of a notice of intent ("Notice") to issue sewage disposal system revenue bonds in the maximum principal amount of $120,000,000, for the purpose of financing the costs of acquiring, constructing and installing renovations and improvements to the waste water treatment facilities of the City's Sewage Disposal System.
The first series of Bonds to be issued pursuant to the Notice is expected to be sold directly to the Michigan Finance Authority ("Bond Bank") as part of the State of Michigan's Water Pollution Control Revolving Fund program, with such Bonds to bear interest at a rate substantially lower than market rates (currently 2.50%). The Bonds will be secured by and payable solely from revenues of the City's Sewage Disposal System.
Council has been aware of this project through previous Capital Improvement Plans (CIPs), but staff was planning to refresh Council with status and details of this project at the January 17 Working Session. Staff originally anticipated having this NOI resolution be considered at the following Council meeting on January 23rd, but the State is awarding the bond on March 12 so this resolution needs to be considered by Council on January 9 in order to meet appropriate timing requirements.
It's important to note that approval of this resolution starts a 45 notice period to the public about the City's intent to issue the bond. The bond cannot be actually issued without 1. Council's authorization to issue the bond - anticipated March 5th meeting and 2. Expiration of the 45 notice period without a successful petition from residents requesting that the matter be brought to a vote of the electors.
The Resolution authorizes the City Clerk to publish the Notice. The City's bond counsel, Dykema Gossett, prepared the Resolution with further review by the City Attorney.
Staff
Prepared by: Tom Crawford, Chief Financial Officer
Reviewed by: Mary Joan Fales, Senior Assistant City Attorney
Approved by: Steven D. Powers, City Administrator
Body
CITY OF ANN ARBOR
County of Washtenaw, State of Michigan
__________________________________
RESOLUTION AUTHORIZING PUBLICATION OF NOTICE
OF INTENT TO ISSUE REVENUE BONDS
(Sewage Disposal System Revenue Bonds)
Minutes of a regular meeting of the City Council of the City of Ann Arbor, County of Washtenaw, State of Michigan held on the 9th day of January, 2012, at 7:30 o'clock p.m. Eastern Time.
PRESENT: Councilmembers Smith, Derezinski, Lumm, Taylor, Kunselman, Teall, Hohnke, Anglin and Mayor Hieftje, (9);
ABSENT: Councilmembers Higgins, Briere, (2).
The following preamble and resolution were offered by Councilmember Teall and supported by Councilmember Derezinski:
WHEREAS, the City of Ann Arbor, County of Washtenaw, State of Michigan (the "City") intends to issue and sell revenue bonds, pursuant to Act 94, Public Acts of Michigan, 1933, as amended ("Act 94"), in one or more series in an aggregate principal amount not to exceed One Hundred and Twenty Million Dollars ($120,000,000) for the purpose of paying part of the costs of acquiring, constructing and installing renovations and improvements to the waste water treatment facilities of the City's sewage disposal system; and,
WHEREAS, a notice of intent to issue bonds must be published at least 45 days before the issuance of the aforesaid bonds in order to comply with the requirements of Section 33 of Act 94.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. The City Clerk is hereby authorized and directed to publish a notice of intent to issue bonds in The Washtenaw County Legal News, a newspaper of general circulation in the City.
2. Said notice of intent shall be published as a one-quarter (1/4) page display advertisement in substantially the following form:
NOTICE TO TAXPAYERS AND ELECTORS OF THE
CITY OF ANN ARBOR AND TO USERS OF SAID CITY'S
SEWAGE DISPOSAL SYSTEM OF INTENT TO ISSUE
BONDS AND THE
RIGHT OF REFERENDUM RELATING THERETO
PLEASE TAKE NOTICE that the City Council of the City of Ann Arbor, Washtenaw County, Michigan (the "City"), intends to issue and sell Revenue Bonds, pursuant to Act 94, Public Acts of Michigan, 1933, as amended, in one or more series in an aggregate principal amount not to exceed One Hundred and Twenty Million Dollars ($120,000,000), for the purpose of paying part of the costs of acquiring, constructing and installing renovations and improvements to the waste water treatment facilities of the City's sewage disposal system.
SOURCE OF PAYMENT OF
REVENUE BONDS
THE PRINCIPAL OF AND INTEREST ON SAID REVENUE BONDS SHALL BE PAYABLE solely from the revenues received by the City from the operations of said sewage disposal system. Said revenues will consist of rates and charges billed to the users of the system, a schedule of which is presently on file in the office of the City Clerk. Said rates and charges may from time to time be revised to provide sufficient revenues to provide for the expenses of operating and maintaining the system, to pay the principal of and interest on said bonds and to pay other obligations of the system.
BOND DETAILS
SAID BONDS will be payable in annual installments not to exceed thirty (30) in number and will bear interest at the rate or rates to be determined at public or private sale but in no event to exceed eight percent (8%) per annum on the balance of the bonds from time to time remaining unpaid.
RIGHT OF REFERENDUM
THE REVENUE BONDS WILL BE ISSUED WITHOUT A VOTE OF THE ELECTORS UNLESS A PETITION REQUESTING SUCH A VOTE SIGNED BY NOT LESS THAN 10% OF THE REGISTERED ELECTORS OF THE CITY IS FILED WITH THE CITY CLERK WITHIN FORTY-FIVE (45) DAYS AFTER PUBLICATION OF THIS NOTICE. IF SUCH PETITION IS FILED, THE BONDS MAY NOT BE ISSUED WITHOUT AN APPROVING VOTE OF A MAJORITY OF THE QUALIFIED ELECTORS OF THE CITY VOTING THEREON.
THIS NOTICE is given pursuant to the requirements of Section 33, Act 94, Public Acts of Michigan, 1933, as amended.
Jacqueline Beaudry
City Clerk, City of Ann Arbor
3. The City Council does hereby determine that the foregoing form of Notice of Intent to Issue Bonds and the manner of publication directed is the method best calculated to give notice to the sewage disposal system's users and the City's taxpayers and electors of the City's intent to issue the bonds, the purpose of the bonds, the security for payment of the bonds, and the right of referendum relating thereto, and the newspaper named for publication is hereby determined to reach the largest number of persons to whom the notice is directed.
4. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution be and the same hereby are rescinded.
AYES: Councilmembers Smith, Derezinski, Lumm, Taylor, Kunselman, Teall, Hohnke, Anglin and Mayor Hieftje, (9);
NAYS: (0)
RESOLUTION DECLARED ADOPTED.
________________________
Jacqueline Beaudry, City Clerk
I hereby certify that the foregoing is a true and complete copy of a resolution adopted by the City Council of the City of Ann Arbor, County of Washtenaw, State of Michigan, at a regular meeting held on January 9, 2012, and that said meeting was conducted and public notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, and that the minutes of said meeting were kept and will be or have been made available as required by said Act.
__________________________
Jacqueline Beaudry, City Clerk
March 27, 2012