Title
Resolution Authorizing General Obligation Bonds (Parking Facility Capital Improvement Bonds)
Memorandum
Recommended to Council is a Resolution approving the issuance by the City of Ann Arbor of its Parking Facility Capital Improvement Bonds (General Obligation Capital Improvement Bonds) in the maximum principal amount of $9,000,000 (the "Bonds"), for the purpose of financing a substantial portion of the costs of acquiring and constructing a multi-level public parking structure in the City in conjunction with the development project known as Village Green at First & Washington Streets. The Bonds are to be sold through competitive bidding.
The resolution is written to allow the City latitude in determining the specific form of bond (conventional tax-exempt bonds, conventional taxable bonds, Build America Bonds, Recovery Zone Economic Development Bonds and/or Recovery Zone Facility Bonds), based on the financing approaches that are legally available at the time of bond issuance, that will result in the lowest true interest cost to the City.
The Bonds will mature in the years 2013 through 2032. The principal maturity schedule and other terms of the Bonds have been prepared by the City's municipal financial advisors. Debt service on the Bonds is expected to be paid from revenues of the City's public parking system. See attached Resolution of the DDA Board. Under the Resolution the City pledges its limited tax full faith and credit for payment of the Bonds.
The Resolution authorizes the Mayor, City Clerk, City Treasurer and Chief Financial Officer to execute and deliver all required documentation in connection with the issuance, sale and delivery of the Bonds.
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: Stephen Postema, City Attorney
Approved by: Roger W. Fraser, City Administrator
Body
CITY OF ANN ARBOR
County of Washtenaw, State of Michigan
__________________________________
r-10-358
RESOLUTION AUTHORIZING GENERAL OBLIGATION BONDS
(Parking Facility Capital Improvement 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 4th day of October, 2010, at 7:00 o'clock p.m. Eastern Time.
PRESENT: Councilmembers Briere, Derezinski, Rapundalo, Taylor, Kunselman, Teall, Higgins, Hohnke, Anglin and Mayor Hieftje, 10;
ABSENT: Councilmember Smith, 1.
The following preamble and resolution were offered by Councilmember Derezinski and supported by Councilmember Rapundalo:
WHEREAS, the City of Ann Arbor, County of Washtenaw, State of Michigan (the "City") proposes to issue and sell general obligation capital improvement bonds (the "Bonds"), pursuant to the Revised Municipal Finance Act, Act 34, Public Acts of Michigan, 2001, as amended ("Act 34"), to finance a substantial portion of the cost of acquiring a multi-level, approximately 240 space, public parking structure in the City, to be located at the Southeast corner of First Street and Washington Street, and for related capital improvements (the "Project"); and
WHEREAS, the Project is to be developed in conjunction with the development of a multi-story apartment complex, being separate units of a condominium project, to be developed by Village Green Residential Properties, L.L.C. or an affiliate thereof (the "Developer") on property to be purchased by the Developer from the City; and
WHEREAS, the Project is to be constructed by the Developer and, upon substantial completion, acquired by the City, by the assignment to the City of the appropriate condominium unit, with the proceeds of the Bonds and moneys contributed by the City's Downtown Development Authority; and
WHEREAS, based upon the current schedule for the construction, completion and acquisition of the Project, it is anticipated that the Bonds will be issued in June 2012; and
WHEREAS, the Developer's equity and debt partners desire confirmation of the City's commitment to finance the acquisition of the Project through the issuance of the Bonds; and
WHEREAS, a notice of intent to issue the Bonds was published in accordance with Section 517 of Act 34, which stated that capital improvement bonds may be issued by the City in one or more series in an aggregate principal amount not to exceed $9,000,000 to finance the Project, without a vote of the electors of the City, unless the requisite petitions for an election on the question of the issuance of the Bonds is filed with the City Clerk within a period of 45 days from the date of publication, and no petitions were so filed; and
WHEREAS, it is proposed that the Bonds be general obligation bonds secured by a pledge of the City's full faith and credit, subject to constitutional, statutory and charter limitations; and
WHEREAS, as an alternative to issuing the Bonds as conventional tax exempt bonds, the City may, pursuant to the American Recovery and Reinvestment Act of 2009 signed into law on February 17, 2009 (the "Recovery Act"), and subject to the extension of the relevant provisions of the Recovery Act to bonds issued after the year 2010, designate the Bonds for purposes of the Recovery Act as Build America Bonds ("Build America Bonds") or as Recovery Zone Economic Development Bonds ("RZEDBs"), and receive credit payments from the United States Treasury equal to 35% or 45%, respectively (or such other credit payments as may be allowed under extensions of such Recovery Act provisions), of the interest payable on the Bonds, on or about each interest payment date; and
WHEREAS, the City has been advised by bond counsel that a portion of the Bonds issued to finance the Project must be issued as taxable bonds or, subject to the extension of the relevant sections of the Recovery Act to bonds issued after the year 2010 and eligibility under such sections, may be issued as tax-exempt Recovery Zone Facility Bonds ("RZFBs"); and
WHEREAS, the City Council wishes to approve the issuance of the Bonds within certain parameters, and to authorize the Chief Financial Officer and the Treasurer to determine whether to issue the Bonds in whole or part as conventional tax-exempt bonds, conventional taxable bonds, Build America Bonds, RZEDBs and/or RZFBs, based on the financing approaches that are legally available at the time of bond issuance, that will result in the lowest true interest cost to the City, and that are otherwise in the City's best interests, and to make all necessary elections and designations in connection therewith.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. The Project. The Project, the period of usefulness of the Project of 30 years or more, and the City's prior proceedings with respect to the Project are hereby approved and confirmed.
2. Bond Details. The City shall borrow not to exceed $9,000,000 and issue its bonds therefor (the "Bonds"), pursuant to Act 34 for the purpose of paying a substantial portion of the cost of the Project and the costs of issuing the Bonds. The Bonds shall be designated as "City of Ann Arbor Parking Facility Capital Improvement Bonds (Limited Tax General Obligation)," with appropriate designation of the year in which the Bonds are issued and appropriate references to distinguish multiple series of Bonds issued. The Bonds shall be fully registered Bonds, both as to principal and interest, registrable upon the books of the Bond Registrar (as hereinafter defined), and may be issued in any denomination which is $5,000, or any integral multiple thereof up to a single maturity, numbered from 1 upwards. The Bonds shall be issued to the extent permitted by applicable federal tax law as a series of obligations the interest on which is excludable from gross income of the holders thereof for federal income tax purposes, with the balance, if any, being issued as a series of taxable obligations. Bonds initially issued shall be dated the date of their original issuance and delivery, and shall bear interest payable semi-annually from that date or from the May 1 or November 1 through which interest has been paid. The Bonds shall mature serially on May 1 of each year in the period from 2013 through 2032, inclusive, in the following principal amounts (aggregating $8,105,000):
Year |
Amount |
2013 |
$ 300,000 |
2014 |
$ 300,000 |
2015 |
$ 305,000 |
2016 |
$ 315,000 |
2017 |
$ 320,000 |
2018 |
$ 330,000 |
2019 |
$ 345,000 |
2020 |
$ 350,000 |
2021 |
$ 365,000 |
2022 |
$ 375,000 |
2023 |
$ 390,000 |
2024 |
$ 410,000 |
2025 |
$ 425,000 |
2026 |
$ 445,000 |
2027 |
$ 465,000 |
2028 |
$ 490,000 |
2029 |
$ 510,000 |
2030 |
$ 535,000 |
2031 |
$ 560,000 |
2032 |
$ 570,000 |
|
|
The Chief Financial Officer or the Treasurer of the City may adjust such maturity schedule and principal amounts prior to sale of the Bonds as required by changes in costs of the Project, timing of bond issuance, or bond market conditions, and may provide as necessary for a taxable series of Bonds as described above, within the maximum aggregate principal amount of $9,000,000 and the final maturity date being not later than 25 years following the date of issuance of the Bonds.
The Chief Financial Officer and Treasurer, in consultation with Stauder, Barch & Associates, Inc. (the "Financial Consultant"), may determine whether and upon what terms the initial purchaser of the Bonds may designate any one or more maturities of the Bonds as term bonds and the consecutive maturities which may be aggregated in any such term bonds. Any such designation must be made within 24 hours of the bond sale. To the extent term bonds are so provided for, the amounts of the maturities which are aggregated in any such designated term bond shall be subject to mandatory redemption on May 1 of the years and in the amounts as set forth in the foregoing maturity schedule at a redemption price of par, plus accrued interest, to the date of mandatory redemption.
The Bonds shall be in substantially the form attached as Exhibit A, with such changes, additions or deletions as are not inconsistent with this resolution.
The Chief Financial Officer and Treasurer are hereby authorized and directed to determine, in consultation with the Financial Consultant and Dykema Gossett PLLC ("Bond Counsel"), whether to issue and sell all or multiple portions of the Bonds as conventional tax-exempt bonds, conventional taxable bonds, Build America Bonds, RZEDBs and/or RZFBs, based on the financing approaches that are legally available at the time of bond issuance, that will result in the lowest true interest cost to the City, and that are otherwise in the City's best interests, and to make all necessary elections and designations in connection therewith, all subject to the parameters contained in this Resolution. In the event all or a portion of the Bonds are to be issued in one or more series of Bonds other than conventional tax-exempt bonds, the Chief Financial Officer and Treasurer are authorized, in consultation with Bond Counsel, to make such revisions to the form of Bond as may be necessary and appropriate for the Bonds to be so issued.
3. Interest Payment and Date of Record; Underwriter's Spread. The Bonds shall bear interest payable November 1, 2012 and each May 1 and November 1 thereafter until maturity. The rate of interest on Bonds maturing in any one year (a) shall not exceed 7.0% as to series of Bonds issued as conventional tax-exempt bonds or RZFBs, or as Build America Bonds or RZEDBs (after application of any credit payments received from the United States Treasury), provided, that the true interest cost of the Bonds so issued (after giving effect to credit payments) shall not exceed 6.0%, and (b) shall not not exceed 9.0% as to a conventional taxable series of Bonds, as applicable. The rate of interest borne by any one maturity of a series of Bonds shall not be less than the interest rate borne by the preceding maturity, and shall not exceed the interest rate borne by any preceding maturity by more than 3.0%. Interest shall be paid by check or draft mailed by first class mail to the registered owner of each Bond as of the applicable date of record. The date of record shall be April 15 with respect to interest payments made on May 1 and October 15 with respect to interest payments made on November 1.
The underwriter's spread (original issue price to the public less underwriter's purchase price) shall not exceed $15.00 per thousand dollars (1.50%).
4. Prior Redemption. The Chief Financial Officer and Treasurer, in consultation with the Financial Consultant, shall determine whether and upon what terms the Bonds shall be subject to redemption prior to maturity, based upon market conditions at the time of issuance of the Bonds. The following provisions shall apply to any such prior redemption.
With respect to partial redemptions, any portion of a Bond outstanding in a denomination larger than the minimum authorized denomination may be redeemed provided such portion and the amount not being redeemed each constitutes an authorized denomination. In the event that less than the entire principal amount of a Bond is called for redemption, upon surrender of the Bond to the Bond Registrar, the Bond Registrar shall authenticate and deliver to the registered owner of the Bond a new Bond in the principal amount of the principal portion not redeemed.
Notice of redemption shall be sent to the registered holder of each Bond being redeemed by first class mail at least thirty (30) days prior to the date fixed for redemption, which notice shall fix the date of record with respect to the redemption if different than otherwise provided herein. Any defect in such notice shall not affect the validity of the redemption proceedings. Bonds so called for redemption shall not bear interest after the date fixed for redemption provided funds are on hand with the Bond Registrar to redeem the same.
5. Bond Registrar. A financial institution to serve as the paying agent and bond registrar for the Bonds (the "Bond Registrar") shall be appointed in the Sale Order (as defined below), and shall perform all payment, registration, transfer, exchange and other functions otherwise required by this resolution to be performed by the Bond Registrar.
6. Transfer or Exchange of Bonds. Any Bond shall be transferable on the bond register maintained by the Bond Registrar with respect to the Bonds at any time prior to the applicable date of record preceding an interest payment date upon the surrender of the Bond together with an assignment executed by the registered owner or his or her duly authorized attorney in form satisfactory to the Bond Registrar. Upon receipt of a properly assigned Bond, the Bond Registrar shall authenticate and deliver a new Bond or Bonds in equal aggregate principal amount and like interest rate and maturity to the designated transferee or transferees.
Bonds may likewise be exchanged at any time prior to the applicable date of record preceding an interest payment date for one or more other Bonds with the same interest rate and maturity in authorized denominations aggregating the same principal amount as the Bond or Bonds being exchanged. Such exchange shall be effected by surrender of the Bond to be exchanged to the Bond Registrar with written instructions signed by the registered owner of the Bond or his or her attorney in form satisfactory to the Bond Registrar. Upon receipt of a Bond with proper written instructions, the Bond Registrar shall authenticate and deliver a new Bond or Bonds to the registered owner of the Bond or his or her properly designated transferee or transferees or attorney.
The Bond Registrar shall not be required to honor any transfer or exchange of Bonds during the period from the applicable date of record preceding an interest payment date to such interest payment date. Any service charge made by the Bond Registrar for any such registration, transfer or exchange shall be paid by the City. The Bond Registrar may, however, require payment by a bondholder of a sum sufficient to cover any tax or other governmental charge payable in connection with any such registration, transfer or exchange.
7. Global Form; Securities Depository. (a) Except as otherwise provided in this Section, the Bonds shall initially be issued in the form of global Bonds, shall be registered in the name of the Securities Depository (as defined below) or its nominee and ownership thereof shall be maintained in book entry form by the Securities Depository for the account of the Agent Members (as defined below) thereof. Except as provided in subsection (c) of this Section, Bonds may be transferred, in whole but not in part, only to the Securities Depository or a nominee of the Securities Depository, or to a successor Securities Depository selected by the City, or to a nominee of such successor Securities Depository.
(b) The City and the Bond Registrar shall have no responsibility or obligation with respect to:
(i) the accuracy of the records of the Securities Depository or any Agent Member with respect to any beneficial ownership interest in the Bonds;
(ii) the delivery to any Agent Member, beneficial owner of the Bonds or other person, other than the Securities Depository, of any notice with respect to the Bonds;
(iii) the payment to any Agent Member, beneficial owner of the Bonds or other person, other than the Securities Depository, of any amount with respect to the principal of, premium, if any, or interest on, the Bonds;
(iv) any consent given by Cede & Co., as Bondholder of the Bonds or any successor nominee of a Securities Depository as Bondholder of such Bonds; or
(v) the selection by the Securities Depository or any Agent Member of any beneficial owners to receive payment if any Bonds are redeemed in part.
So long as the certificates for the Bonds are not issued pursuant to subsection (c) of this Section, the City and the Bond Registrar may treat the Securities Depository as, and deem the Securities Depository to be, the absolute owner of such Bonds for all purposes whatsoever, including without limitation:
(A) the payment of principal, premium, if any, and interest on such Bonds;
(B) giving notices of redemption and other matters with respect to such Bonds; and
(C) registering transfers with respect to such Bonds.
(c) If at any time the Securities Depository notifies the City or the Bond Registrar that it is unwilling or unable to continue as Securities Depository with respect to the Bonds or if at any time the Securities Depository shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor Securities Depository is not appointed by the City within 90 days after the City or the Bond Registrar receives notice or becomes aware of such condition, as the case may be, subsections (a) and (b) of this Section shall no longer be applicable and the City shall execute and the Bond Registrar shall authenticate and deliver certificates representing the Bonds as provided in subsection (d) below. In addition, the City may determine at any time that the Bonds shall no longer be represented by global certificates and that the provisions of subsections (a) and (b) above shall no longer apply to the Bonds. In any such event the City shall execute and the Bond Registrar shall authenticate and deliver certificates representing the Bonds as provided in subsection (d) below.
(d) Certificates for the Bonds issued in exchange for global certificates shall be registered in such names and authorized denominations as the Securities Depository, pursuant to instructions from the Agent Members or otherwise, shall instruct the City and the Bond Registrar. The Bond Registrar shall deliver such certificates representing the Bonds to the persons in whose names such Bonds are so registered as soon as possible.
As used in this Resolution, "Securities Depository" shall mean the Depository Trust Company, New York, New York ("DTC") and its successors and assigns if any or if (i) the then-Securities Depository resigns from its functions as depository of the Bonds or (ii) the City discontinues use of the then-Securities Depository pursuant to this Section 6, any other securities depository which agrees to follow the procedures required to be followed by a securities depository in connection with the Bonds and which is selected by the City.
As used in this Resolution, "Agent Member" shall mean a member of, or participant in, the Securities Depository.
The Authorized Officers (as defined herein) are hereby authorized and directed to execute the standard form of DTC Letter of Representations relating to the Bonds (or a DTC Blanket Issuer Letter of Representations).
Notwithstanding any other provision of this Resolution to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds shall be made and given, respectively, to DTC as provided in the Letter of Representations.
8. Execution and Delivery. The Mayor and the City Clerk are authorized and directed to execute the Bonds for and on behalf of the City by manually executing the Bonds, or by causing their facsimile signatures to be affixed to the Bonds, provided in the latter instance the Bonds are thereafter authenticated by the Bond Registrar. The Bonds shall be sealed with the seal of the City or a facsimile thereof. When so executed, the Bonds shall be delivered by the City Treasurer to the Bond Registrar for authentication, and thereafter to the purchaser upon receipt in full of the purchase price for the Bonds.
9. Bond Payment Fund. The City shall establish a separate depository account, to be designated "City of Ann Arbor Parking Facility Capital Improvement Bonds, Bond Payment Fund", with appropriate references to the year of issue and/or bond series designation (the "Bond Payment Fund"), and to the extent legally necessary accounts therein corresponding to separate series of the Bonds, into which shall be deposited the tax collections and other available funds to the extent provided in paragraph 11 below. Additionally, a portion of the proceeds of the Bonds designated for use as capitalized interest as described below, and all accrued interest and premium, if any, received from the purchaser of the Bonds, shall be deposited in the Bond Payment Fund. Any credit payments received from the United States Treasury shall be deposited into the Bond Payment Fund or into any escrow fund which may be established for defeasance of the Bonds.
Proceeds of the Bonds may be used to pay all or part of the interest due and payable on the Bonds within the two years following their issuance and delivery. The amount of capitalized interest, as determined by the City Treasurer, shall be deposited in the Bond Payment Fund from the proceeds of the Bonds.
Moneys in the Bond Payment Fund shall be used solely to pay principal of and premium, if any, and interest on the Bonds.
Moneys in the Bond Payment Fund may be continuously invested and reinvested in any legal investment for City funds, which shall mature, or which shall be subject to redemption by the holder thereof, not later than the dates when moneys in the Bond Payment Fund will be required to pay the principal of and interest on the Bonds. Obligations purchased as an investment of moneys of the Bond Payment Fund shall be deemed at all times to be a part of such fund, and the interest accruing thereon and any profit realized from such investment shall be credited to such fund.
10. Acquisition Fund. The City shall establish a separate depository account, to be designated "City of Ann Arbor Parking Facility Capital Improvement Bonds, Acquisition Fund", with appropriate references to the year of issue and/or bond series designation (the "Acquisition Fund"), and to the extent legally necessary accounts therein corresponding to separate series of the Bonds. Except for amounts required by this resolution to be deposited in the Bond Payment Fund, the proceeds from the sale of the Bonds shall be deposited in the Acquisition Fund, with the proceeds from separate series of the Bonds being deposited in the corresponding accounts established therein as described above.
Moneys at any time in the Acquisition Fund shall be used solely to pay costs of the Project, including the costs of issuance of the Bonds, except that upon payment (or provision for payment) in full of the costs of Project any remaining moneys in the Acquisition Fund shall be transferred to the Bond Payment Fund (if any Bonds are outstanding) or applied as required by law or the ordinances of the City.
Moneys in the Acquisition Fund may be continuously invested and reinvested in any legal investment for City funds, which shall mature, or which shall be subject to redemption by the holder thereof, not later than the estimated dates when moneys in the Acquisition Fund will be required to pay the costs of the Project. Obligations purchased as an investment of moneys of the Acquisition Fund shall be deemed at all times to be a part of such fund, and the interest accruing thereon and any profit realized from such investment shall be credited to such fund.
11. Limited Tax Pledge as Security for Payment of Bonds. The City hereby irrevocably pledges its full faith and credit for the payment of principal of and interest on the Bonds, and shall as a first budget obligation advance sufficient moneys from its general funds for such payments, including the collection of any ad valorem taxes which the City is authorized to levy, but any such levy shall be subject to applicable constitutional, charter and statutory tax rate limitations.
12. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any Bond is mutilated, lost, stolen or destroyed, the Mayor and the City Clerk may, on behalf of the City, execute and deliver, or order the Bond Registrar to authenticate and deliver, a new Bond having a number not then outstanding, of like date, maturity, interest rate and denomination as that mutilated, lost, stolen or destroyed Bond.
In the case of a mutilated Bond, a replacement Bond shall not be delivered unless and until such mutilated Bond is surrendered to the Bond Registrar. In the case of a lost, stolen or destroyed Bond a replacement Bond shall not be delivered unless and until the City and the Bond Registrar shall have received such proof of ownership and loss and indemnity as they determine to be sufficient, which shall consist at least of (i) a lost instrument bond for principal and interest remaining unpaid on the lost, stolen or destroyed Bond; (ii) an affidavit of the registered owner (or his or her attorney) setting forth ownership of the Bond lost, stolen or destroyed and the circumstances under which it was lost, stolen or destroyed; (iii) the agreement of the owner of the Bond (or his or her attorney) to fully indemnify the City and the Bond Registrar against loss due to the lost, stolen or destroyed Bond and the issuance of any replacement Bond in connection therewith; and (iv) the agreement of the owner of the Bond (or his or her attorney) to pay all expenses of the City and the Bond Registrar in connection with the replacement, including the transfer and exchange costs which otherwise would be paid by the City.
13. Arbitrage and Tax Covenants. Notwithstanding any other provision of this Resolution, with respect to Bonds issued as conventional tax-exempt Bonds, the City covenants that it will not at any time or times:
(a) Permit any proceeds of the Bonds or any other funds of the City or under its control to be used directly or indirectly (i) to acquire any securities or obligations, the acquisition of which would cause any Bond to be an "arbitrage bond" as defined in Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), or (ii) in a manner which would result in the exclusion of any Bond from the treatment afforded by Section 103(a) of the Code by reason of the classification of any Bond as a "private activity bond" within the meaning of Section 141(a) of the Code, as a "private loan bond" within the meaning of Section 141(a) of the Code or as an obligation guaranteed by the United States of America within the meaning of Section 149(b) of the Code; or
(b) Take any action, or fail to take any action (including failure to file any required information or other returns with the United States Internal Revenue Service or to rebate amounts to the United States, if required, at or before the time or times required), within its control which action or failure to act would (i) cause the interest on the Bonds to be includible in gross income for federal income tax purposes, cause the interest on the Bonds to be includible in computing any alternative minimum tax (other than the alternative minimum tax applicable to interest on all tax-exempt obligations generally) or cause the proceeds of the Bonds to be used directly or indirectly by an organization described in Section 501(c)(3) of the Code or (ii) adversely affect the exemption of the Bonds and the interest thereon from State of Michigan income taxation.
14. Qualified Tax-Exempt Obligations. The Bonds issued as tax-exempt bonds shall be designated as "qualified tax-exempt obligations" for purposes of deduction of interest expense by financial institutions under the provisions of Section 265(b)(3)(B) of the Code, in the event the Chief Financial Officer and Treasurer determine that when issued the Bonds qualify for such designation.
15. Defeasance or Redemption of Bonds. If at any time,
(a) the whole amount of the principal of and interest on all outstanding Bonds shall be paid, or
(b) (i) sufficient moneys, or Government Obligations (as defined in this Section) not callable prior to maturity, the principal of and interest on which when due and payable will provide sufficient moneys, to pay the whole amount of the principal of and premium, if any, and interest on all outstanding Bonds as and when due at maturity or upon redemption prior to maturity shall be deposited with and held by a trustee or an escrow agent for the purpose of paying the principal of and premium, if any, and interest on such Bonds as and when due, and (ii) in the case of redemption prior to maturity, all outstanding Bonds shall have been duly called for redemption (or irrevocable instructions to call such Bonds for redemption shall have been given), then, at the time of the payment referred to in clause (a) of this Section or of the deposit referred to in clause (b) of this Section, the City shall be released from all further obligations under this resolution, and any moneys or other assets then held or pledged pursuant to this resolution for the purpose of paying the principal of and interest on the Bonds (other than the moneys deposited with and held by a trustee or an escrow agent as provided in clause (b) of this Section) shall be released from the conditions of this resolution, paid over to the City and considered excess proceeds of the Bonds. In the event moneys or Government Obligations shall be so deposited and held, the trustee or escrow agent holding such moneys or Government Obligations shall, within thirty (30) days after such moneys or Government Obligations shall have been so deposited, cause a notice signed by it to be published once in a newspaper of general circulation in the City of Detroit, Michigan, setting forth (x) the date or dates, if any, designated for the redemption of the Bonds, (y) a description of the moneys or Government Obligations so held by it and (z) that the City has been released from its obligations under this resolution. All moneys and Government Obligations so deposited and held shall be held in trust and applied only to the payment of the principal of and premium, if any, and interest on the Bonds at maturity or upon redemption prior to maturity, as the case may be, as provided in this Section.
The trustee or escrow agent referred to in this Section shall (a) be a bank or trust company permitted by law to offer and offering the required services, (b) be appointed by an Authorized Officer (as defined herein) and (c) at the time of its appointment and so long as it is serving as such, have at least $25,000,000 of capital and unimpaired surplus. The same bank or trust company may serve as trustee or escrow agent under this Section and as Bond Registrar so long as it is otherwise eligible to serve in each such capacity.
As used in this Section, the term "Government Obligations" means direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America.
16. Discount and Premium. The Bonds may be purchased at a discount of no greater than 1.5% or with a premium of no greater than 1.0%.
17. Official Notice of Sale. The Bonds shall be advertised and sold, and sealed proposals for their purchase shall be received, at a time to be later determined by the Chief Financial Officer. Notice of the sale of the Bonds shall be published in accordance with the law in The Bond Buyer or such other publication approved for such purpose by the Local Audit & Finance Division of the Michigan Department of Treasury, which Notice shall be in substantially the form of Exhibit B attached hereto.
To the extent that all or a portion of the Bonds are to be issued and sold as Build America Bonds, RZEDBs, RZFBs and/or conventional taxable bonds, the Chief Financial Officer and Treasurer are hereby authorized and directed, in consultation with Bond Counsel, to make such revisions to the form of Notice of Sale as may be necessary and appropriate for those Bonds to be so issued.
The Chief Financial Officer and Treasurer are hereby authorized on behalf of the City to determine to conduct and pursue a negotiated sale of the Bonds if, in light of current market conditions and upon advice of the Financial Consultant, or if necessary to ensure compliance with provisions of the Internal Revenue Code relating to Build America Bonds, RZEDBs or RZFBs, a negotiated sale would present advantages and opportunities to select and adjust terms for the Bonds, to allow more flexibility in accessing the municipal bond market, and to price and sell the Bonds at the time that is expected to best achieve the most advantageous interest rates and costs to the City. In the event that a negotiated sale is pursued, the Chief Financial Officer and Treasurer are authorized to select an underwriter for the Bonds, to negotiate and execute a bond purchase agreement with such underwriter, and to take all other necessary actions required to effectuate the sale, issuance and delivery of the Bonds within the parameters authorized in this Resolution.
18. Sale Order. The Chief Financial Officer (or in his absence the Treasurer) is authorized to execute and deliver an order on behalf of the City awarding the Bonds to the bidder whose bid produces the lowest true interest cost as determined in the manner provided in the Notice of Sale (the "Sale Order").
19. Execution and Delivery of Required Documents. The Mayor, City Clerk, Treasurer and Chief Financial Officer (each an "Authorized Officer"), or any one of them, are authorized on behalf of the City to apply for such rulings, orders and approvals and file or submit appropriate elections or other documents to any federal, state or local governmental agency, and to make such designations as may be required for the Bonds to be validly issued and, as applicable, cause the interest thereon to be exempt from federal income taxation or to qualify the Bonds or series thereof as Build America Bonds, RZEDBs and/or RZFBs, as applicable, and to obtain the direct payment of the appropriate credits from the United States Treasury with respect to Build America Bonds and RZEDBs. Such Authorized Officers, or any one of them, are further authorized to execute and deliver such other certificates, documents, instruments and other papers as may be required or may be necessary or convenient to effectuate the valid sale and delivery of the Bonds as conventional tax-exempt bonds, conventional taxable bonds, Build America Bonds, RZEDBs and/or RZFBs, in accordance with the terms hereof. The Authorized Officers, or any one of them, are authorized and directed to approve the circulation of a preliminary and a final official statement describing the Bonds and providing information relative to the City, and to deem the preliminary official statement "final" for purposes of Securities and Exchange Commission Rule 15c2-12 (the "Rule"), subject to the applicability of an exemption from the Rule.
20. Filings with Local Audit & Finance Division. The Authorized Officers are, and each is, hereby authorized and directed to make all necessary filings with the Local Audit and Finance Division of the Michigan Department of Treasury with respect to the issuance and sale of the Bonds, including a post-issuance Security Report, and to pay all fees required in connection therewith.
21. Continuing Financial Disclosure. The City shall provide continuing financial disclosure in compliance with the Rule during the term of the Bonds, subject to applicable exemptions from the requirements of the Rule. The Chief Financial Officer is authorized and directed on behalf of the City to take all necessary action and to execute and deliver such documents as may be required to satisfy the City's obligations under the Rule.
22. Conflicting Resolutions. All resolutions and parts of resolutions in conflict with the foregoing are hereby rescinded.
A roll call vote on the foregoing resolution was taken, the result of which is as follows:
YES: Councilmembers Briere, Derezinski, Rapundalo, Taylor, Kunselman, Teall, Higgins, Hohnke, Anglin and Mayor Hieftje, 10;
NO: 0;
ABSTAIN:
ABSENT: Councilmember Smith, 1
THE RESOLUTION WAS THEREUPON DECLARED ADOPTED.
CERTIFICATION
I, the undersigned, the duly qualified and acting Clerk of the City of Ann Arbor, Michigan, do hereby certify that the foregoing is a true and complete copy of a resolution adopted by the City Council at a regular meeting held on October 4, 2010, the original of which is on file in my office, and that such meeting was conducted and public notice thereof was given pursuant to and in compliance with Act No. 267, Michigan Public Acts of 1976, as amended, and that minutes of such meeting were kept and are available as required by such Act.
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Jacqueline Beaudry |
City Clerk |
Dated: October ___, 2010
EXHIBIT A
[FORM OF BOND]
R-10-0915
[The Bonds shall bear the following legend
if registered in the name of The Depository Trust Company]
Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
UNITED STATES OF AMERICA
STATE OF MICHIGAN
COUNTY OF WASHTENAW, MICHIGAN
city of ann arbor
City of Ann Arbor PARKING FACILITY
capital improvement BONDS, series _____
(LIMITED TAX GENERAL OBLIGATION)
Registered Owner: CEDE & CO.
Principal Amount: ______________ THOUSAND AND NO DOLLARS ($________.00)
Rate |
|
Maturity Date |
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Date of Issuance |
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CUSIP |
___% |
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May 1, _____ |
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____________, _____ |
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035465 ___ |
FOR VALUE RECEIVED, the CITY OF ANN ARBOR, Washtenaw County, State of Michigan (the "City"), hereby acknowledges itself indebted and promises to pay on the Maturity Date specified above to the Registered Owner specified above, or registered assigns shown as the owner of record of this Bond upon the books of _______________________, ________, Michigan, as paying agent and bond registrar (the "Bond Registrar"), on the applicable date of record, the Principal Amount specified above upon presentation and surrender of this Bond at the principal corporate trust office of the Bond Registrar in _________, Michigan, together with interest thereon, from the Date of Issuance specified above or such later date to which interest has been paid, at the Rate per annum specified above on November 1, 2012 and thereafter semi-annually on the first day of May and November in each year. The date of record shall be April 15 with respect to payments made on May 1, and October 15 with respect to payments made on November 1.
This Bond is one of a series of Bonds of like date and tenor except as to date of maturity and rate of interest aggregating the principal sum of $_____________ (the "Bonds"), issued under and pursuant to the provisions of Act 34, Public Acts of Michigan, 2001, as amended, and a bond authorizing resolution approved by the City Council of the City on October 4, 2010 (the "Bond Resolution").
The Bonds are issued for the purpose of defraying a part of the costs of acquiring and constructing a multi-level, approximately 240 space, public parking structure in the City (the "Project"), as more fully described in the Bond Resolution.
The full faith and credit of the City is pledged for the payment of the principal of and interest on the Bonds, which are payable as a first budget obligation from its general funds, and the City is required if necessary to levy ad valorem taxes on all taxable property in the City for the payment thereof, provided that the City does not have the power to levy any tax for the payment of the Bonds in excess of its charter, statutory and constitutional limits.
[The Bonds have been designated by the City as "qualified tax-exempt obligations" for purposes of the deduction of interest expense by financial institutions under the provisions of Section 265 of the Internal Revenue Code of 1986, as amended.]
This Bond is transferable by the Registered Owner at any time. Registration of any transfer may be made in person or by an attorney duly authorized in writing at the principal corporate trust office of the Bond Registrar in _________, Michigan. The City and Bond Registrar may deem and treat the Registered Owner as the absolute owner hereof for the purpose of receiving payment of or on account of principal of and interest on this Bond and for all other purposes, and neither the City nor the Bond Registrar shall be affected by notice to the contrary.
Optional Redemption. The Bonds of this series maturing in the years ____ through ____, inclusive, shall not be subject to redemption prior to maturity. Bonds maturing on and after May 1, ____ shall be subject to redemption prior to maturity, at the option of the City, in any order, in whole or in part, on any date on and after May 1, ____, at par plus accrued interest to the date fixed for redemption, without premium.
[Annual Mandatory Redemption: The Bonds maturing May 1, ____ shall be subject to annual mandatory redemption at par plus accrued interest to the date of redemption on the dates and in the principal amounts as set forth below.
Redemption Dates |
Amounts |
May 1, 20____ |
$ |
May 1, 20____ |
$ |
May 1, 20____ |
$ |
May 1, 20____ |
$ |
May 1, 20____* |
$ |
*Maturity |
|
The principal amount of Bonds to be redeemed on the dates set forth above shall be reduced, in the order determined by the City, by the principal amount of Bonds which have been previously redeemed or called for redemption (otherwise than as a result of prior annual mandatory redemptions) or purchased or acquired by the City and delivered to the Bond Registrar for cancellation; provided, that each such Bond has not theretofore been so applied as a credit.]
With respect to partial redemptions, any portion of a Bond outstanding in a denomination larger than the minimum authorized denomination may be redeemed provided such portion and the amount not being redeemed each constitutes an authorized denomination. In the event that less than the entire principal amount of a Bond is called for redemption, upon surrender of the Bond to the Bond Registrar, the Bond Registrar shall authenticate and deliver to the registered owner of the Bond a new Bond in the principal amount of the principal portion not redeemed.
Notice of redemption shall be sent to the registered holder of each Bond being redeemed by first class mail at least thirty (30) days prior to the date fixed for redemption, which notice shall fix the date of record with respect to the redemption if different than otherwise provided herein. Any defect in such notice shall not affect the validity of the redemption proceedings. Bonds so called for redemption shall not bear interest after the date fixed for redemption provided funds are on hand with the Bond Registrar to redeem the same.
It is hereby certified, recited, and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in connection with the issuance of this series of Bonds, existed, have happened and have been performed in due time, form and manner, as required by the Constitution and statutes of the State of Michigan, and that the amount of this Bond together with all other indebtedness of the City does not exceed any charter, statutory or constitutional limitation.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit until the certificate of authentication hereon has been duly executed by the Bond Registrar, as authenticating agent.
IN WITNESS WHEREOF, the CITY OF ANN ARBOR, Washtenaw County, Michigan, by its City Council, has caused this Bond to be executed in its name with the manual or facsimile signatures of its Mayor and its City Clerk, and has caused its corporate seal or a facsimile thereof to be impressed or imprinted hereon, all as of the Date of Issuance.
COUNTERSIGNED: |
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CITY OF ANN ARBOR, WASHTENAW COUNTY, MICHIGAN |
By: |
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By: |
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City Clerk |
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Mayor |
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|
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|
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SEAL
[FORM OF CERTIFICATE OF AUTHENTICATION]
This Bond is one of the series of Bonds described herein.
____________________________________, |
as Bond Registrar and Authenticating Agent |
By: |
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Authorized Signatory |
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Date of Authentication:
[FORM OF ASSIGNMENT]
For value received, the undersigned sells, assigns and transfers unto this Bond and all rights hereunder and hereby irrevocably appoints attorney to transfer this Bond on the books kept for registration thereof with full power of substitution in the premises.
NOTICE: Signature must correspond with the name as it appears upon the face of this bond in every particular.
Signature Guaranteed
Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guarantee program.
The Bond Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided:
Name and Address:
Soc. Sec. No. or other Tax ID. No.:
(include information for all joint owners if the Bond is held by joint account)
EXHIBIT B
OFFICIAL NOTICE OF SALE
$____________
CITY OF ANN ARBOR
WASHTENAW COUNTY, MICHIGAN
PARKING FACILITY CAPITAL IMPROVEMENT BONDS, SERIES ____
(LIMITED TAX GENERAL OBLIGATION)
SEALED, FAX OR ELECTRONIC BIDS: Sealed bids for the purchase of the issue of bonds described below of the aggregate par value of $_____________ to be issued by the City of Ann Arbor, Washtenaw County, Michigan ("City"), will be received by the undersigned at the office of the Chief Financial Officer, at 100 N. Fifth Ave. Ann Arbor, Michigan 48107, until ____ o'clock, P.M., Eastern Time, on _______, the ___ day of _________, ____, at which time and place such bids will be publicly opened and read.
In the alternative, sealed bids will also be received on the same date and until the same time by an agent of the undersigned at the office of the Municipal Advisory Council of Michigan ("MAC"), Buhl Building, 535 Griswold, Suite 1850, Detroit, Michigan 48226, where they will be publicly opened and read. Bids opened at Ann Arbor, Michigan will be read first, followed by those opened at the alternate location. Bidders may choose either location to present bids and good faith checks, but not both locations.
The Chief Financial Officer or other authorized officer of the City will consider and determine the award or rejection of bids prior to 5:00 o'clock, P.M., Eastern Time, on that date.
Signed bids may be submitted by fax by MAC members to the MAC at fax number (313) 963-0943 and by other bidders to the City at fax number (734) 994-2777, Attention: Treasurer; provided that faxed bids must arrive before the time of sale and the bidder bears all risks of transmission failure and the GOOD FAITH DEPOSIT MUST BE MADE AND RECEIVED as described in the section captioned "Good Faith Deposit" below.
Electronic bids will also be received on the same date and until the same time by Bidcomp/Parity as agent of the undersigned. Further information about Bidcomp/Parity, including any fee charged, may be obtained from Bidcomp/Parity, Eric Washington or Client Services, 1359 Broadway, Second Floor, New York, New York 10018, (212) 849-5021. ELECTRONIC BIDS WILL BE ACCEPTED PROVIDED THE BIDDER COMPLIES WITH THE GOOD FAITH DEPOSIT REQUIREMENT DESCRIBED IN THE SECTION CAPTIONED "GOOD FAITH" BELOW. IF ANY PROVISIONS OF THIS NOTICE OF SALE SHALL CONFLICT WITH INFORMATION PROVIDED BY BIDCOMP/PARITY, AS THE APPROVED PROVIDER OF ELECTRONIC BIDDING SERVICES, THIS NOTICE OF SALE SHALL CONTROL.
DTC BOOK-ENTRY ONLY: The bonds are being initially offered as registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New York, New York ("DTC") under DTC's Book-Entry-Only system of registration. Purchasers of interests in the Bonds (the "Beneficial Owners") will not receive physical delivery of bond certificates and ownership by the Beneficial Owners of the bonds will be evidenced by book-entry-only. As long as Cede & Co. is the registered owner of the bonds as nominee of DTC, payments of principal and interest will be made directly to such registered owner which will in turn remit such payments to the DTC participants for subsequent disbursement to the Beneficial Owners.
BOND DETAILS: The bonds shall be known as "Parking Facility Capital Improvement Bonds, Series ____ (Limited Tax General Obligation)" and shall aggregate the principal sum of $___________. The bonds will be fully registered bonds in any denomination of $5,000 or multiples thereof up to the amount of a single maturity, dated the date of their delivery, numbered from 1 upwards, and will bear interest from their date payable on November 1, 2012, and semi-annually thereafter. The bonds shall mature on May 1, in the years and principal amounts as follows:
Year |
Amount |
2013 |
$ 300,000 |
2014 |
$ 300,000 |
2015 |
$ 305,000 |
2016 |
$ 315,000 |
2017 |
$ 320,000 |
2018 |
$ 330,000 |
2019 |
$ 345,000 |
2020 |
$ 350,000 |
2021 |
$ 365,000 |
2022 |
$ 375,000 |
2023 |
$ 390,000 |
2024 |
$ 410,000 |
2025 |
$ 425,000 |
2026 |
$ 445,000 |
2027 |
$ 465,000 |
2028 |
$ 490,000 |
2029 |
$ 510,000 |
2030 |
$ 535,000 |
2031 |
$ 560,000 |
2032 |
$ 570,000 |
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TERM BOND OPTION: The initial purchaser of the bonds may designate any one or more maturities from May 1, ____ through May 1, ____, inclusive, as term bonds and the consecutive maturities which shall be aggregated in any such term bonds. Any such designation must be made within 24 hours of the bond sale. The amounts of the maturities which are aggregated in any such designated term bond shall be subject to mandatory redemption on May 1 of the years and in the amounts as set forth in the foregoing maturity schedule at a redemption price of par, plus accrued interest, to the date of mandatory redemption.
OPTIONAL REDEMPTION: The bonds maturing in the years ____ through ____ inclusive, shall not be subject to optional redemption prior to maturity. Bonds maturing on and after May 1, ____ shall be subject to redemption prior to maturity, at the option of the City, in any order, in whole or in part, on any date on and after May 1, ____, at par plus accrued interest to the date fixed for redemption, without premium or penalty.
With respect to partial redemptions, any portion of a bond outstanding in a denomination larger than the minimum authorized denomination may be redeemed provided such portion and the amount not being redeemed each constitutes an authorized denomination. In the event that less than the entire principal amount of a bond is called for redemption, upon surrender of the bond to the Bond Registrar, the Bond Registrar shall authenticate and deliver to the registered owner of the bond a new bond in the principal amount of the principal portion not redeemed.
Notice of redemption shall be sent to the registered holder of each bond being redeemed by first class mail at least thirty (30) days prior to the date fixed for redemption, which notice shall fix the date of record with respect to the redemption if different than otherwise provided herein. Any defect in such notice shall not affect the validity of the redemption proceedings. Bonds so called for redemption shall not bear interest after the date fixed for redemption provided funds are on hand with the Bond Registrar to redeem the same.
INTEREST RATE AND BIDDING DETAILS: Bonds will bear interest at a rate or rates not exceeding 7.0% per annum [9.0% per annum as to the taxable series of Bonds, if applicable], to be fixed by the bids therefor, expressed in multiples of 1/8 or 1/20 of 1%, or both. THE RATE OF INTEREST BORNE BY ANY ONE MATURITY OF BONDS SHALL NOT BE LESS THAN THE INTEREST RATE BORNE BY THE PRECEDING MATURITY, AND SHALL NOT EXCEED THE INTEREST RATE BORNE BY ANY PRECEDING MATURITY BY MORE THAN 3.0%. The interest on any one bond shall be at one rate only, and all bonds maturing in any one year must carry the same interest rate. No proposal for the purchase of less than all of the bonds or at a price less than 98.5% of their par value nor more than 101.00% of their par value will be considered.
TRANSFER AGENT AND REGISTRATION: Principal and interest shall be payable at the principal corporate trust office of _________________________, _________, Michigan, or such other transfer agent as the City may thereafter designate by notice mailed to the registered owner not less than 60 days prior to any change in transfer agent and which shall be qualified to serve as such in Michigan. Interest shall be paid when due by check or draft mailed to the owner as shown by the registration books of the City as of the 15th day of the month prior to any interest payment date. The Bonds will be transferable only upon the registration books of the City kept by the transfer agent. See "DTC Book-Entry Only" above.
PURPOSE AND SECURITY: The bonds are issued for the purposes of paying a portion of the costs of acquiring and constructing a multi-level, approximately 240 space, public parking structure in the City, and for related capital improvements. The City has pledged its limited tax full faith and credit as additional security for payment of principal and interest. Pursuant to such pledge, the City shall be obligated to pay the principal of and interest on the bonds as a first budget obligation from its general funds, including the collection of any ad valorem taxes which the City is authorized to levy, but any such levy shall be subject to applicable constitutional, charter and statutory tax rate limitations.
GOOD FAITH DEPOSIT: A deposit in the amount of $________ [2.0%] is required as a guarantee of good faith on the part of the bidder, to be delivered to the Treasurer of the City in the form of a cashier's check (or wire transfer of such amount as instructed by the City or its financial advisor) by Noon Eastern Time of the next business day following the sale, to be forfeited as liquidated damages if such bid be accepted and the bidder fails to take up and pay for the bonds. The good faith deposit will be applied to the purchase price of the bonds. In the event the Purchaser fails to honor its accepted bid, the good faith deposit will be retained by the City. No interest shall be allowed on the good faith check and checks of the unsuccessful bidders will be returned to each bidder's representative or by overnight courier service. The good faith check of the successful bidder will be cashed and payment for the balance of the purchase price of the bonds shall be made at the closing.
AWARD OF BONDS: The bonds will be awarded to the bidder whose bid produces the lowest true interest cost determined in the following manner: the lowest true interest cost will be the single interest rate (compounded on November 1, 2012 and semi-annually thereafter) necessary to discount the debt service payments from their respective payment dates to _________ 1, 2012 in an amount equal to the price bid, excluding accrued interest.
LEGAL OPINION: Bids shall be conditioned upon the unqualified approving opinion of Dykema Gossett PLLC, attorneys of Bloomfield Hills, Michigan, and the original of which will be furnished without expense to the purchaser of the bonds at the delivery thereof. The fees of Dykema Gossett PLLC for services rendered in connection with such approving opinion are expected to be paid from bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the bonds, Dykema Gossett PLLC has not examined or reviewed any financial information, statements or material contained in any financial documents, statements or material that have been or may be furnished in connection with the authorization, issuance or marketing of the bonds, and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial information, statements or materials.
CUSIP NUMBERS: CUSIP numbers will be imprinted on the bonds at the City's expense. The printing of incorrect CUSIP numbers or the failure to print CUSIP numbers on the bonds shall not constitute cause for the purchaser to refuse delivery of or to pay for the bonds. The purchaser shall be responsible for requesting assignment of numbers and for the payment of any charges for the assignment of numbers.
DELIVERY OF BONDS: The City will furnish bonds ready for execution at its expense. Bonds will be delivered at the principal office of the Bond Registrar, or any other place mutually agreeable, at the expense of the City. The usual closing documents, including a certificate that no litigation is pending affecting the issuance of the bonds, will be delivered at the time of delivery of the bonds. If the bonds are not tendered for delivery by twelve o'clock noon, Eastern Time, on the 45th day following the date of sale, or the first business day thereafter if said 45th day is not a business day, the successful bidder may on that day, or any time thereafter until delivery of the bonds, withdraw its proposal by serving written notice of cancellation on the undersigned, in which event the City shall promptly return the good faith deposit. Payment for the bonds shall be made in Federal Reserve Funds. Accrued interest to the date of delivery of the bonds shall be paid by the purchaser at the time of delivery. Unless the purchaser furnishes the transfer agent with a list giving the denominations and names in which it wishes to have the certificates issued at least 10 business days prior to delivery of the bonds, the bonds will be delivered in the form of a single certificate for each maturity registered in the name of the purchaser. The successful bidder will be required to furnish, prior to and as a condition to the delivery of the bonds, in forms to be prepared by bond counsel: (i) a certificate as to the "issue price" of the bonds within the meaning of section 1273 of the Internal Revenue Code of 1986, as amended, and (ii) if the successful bidder obtains a municipal bond insurance policy or other credit enhancement for the bonds in connection with their original issuance, a certificate that the premium therefor will be less than the present value of the interest expected to be saved as a result of such insurance or other credit enhancement.
TAX MATTERS: The approving opinion of bond counsel will include an opinion to the effect that, under existing law, assuming compliance by the City with certain covenants, (i) interest on the bonds is excluded from gross income for federal income tax purposes and (ii) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations (provided that certain corporations must take into account interest on the bonds in determining adjusted current earnings for the purpose of computing such alternative minimum tax). Such opinion will further state that under existing law the bonds and the interest thereon are exempt from all taxation provided by the laws of the State of Michigan, except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof.
[QUALIFIED TAX EXEMPT OBLIGATIONS: The bonds have been designated as "qualified tax exempt obligations" for purposes of the deduction of interest expense by financial institutions.]
OFFICIAL STATEMENT: A copy of the Official Statement may be obtained by contacting Stauder, BARCH & ASSOCIATES, Inc., Financial Consultant to the City, 3989 Research Park Drive, Ann Arbor, Michigan 48108, telephone 734-668-6688.
The Official Statement is in a form deemed final as of its date by the City for purposes of SEC Rule 15c2-12(b)(1), but is subject to revision, amendment and completion of a final Official Statement. The successful bidder shall supply to the City, within 24 hours after the award of the bonds, all pricing information and any underwriter identification determined by the City to be necessary to complete the Official Statement.
The City will furnish to the successful bidder, at no cost, a reasonable number of copies of the final Official Statement within seven (7) business days after the award of the bonds. Additional copies will be supplied at the bidder's request and upon the bidder's agreement to pay the cost of the City for those additional copies. Requests for additional copies should be made to the City's Financial Consultant listed below within 24 hours after the award.
The City shall deliver, at closing, an executed certificate to the effect that as of the date of delivery, the information contained in the Official Statement, including revisions, amendments and completions as necessary, relating to the City and the bonds is true and correct in all material respects, and that such Official Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
CONTINUING DISCLOSURE: The City has undertaken to provide continuing financial disclosure (annual financial information and operating data, including audited financial statements for the preceding fiscal year consistent with the information presented in the Official Statement), and to provide timely notice of the occurrence of certain material events with respect to the bonds, all in accordance with the requirements of SEC Rule 15c2-12.
BOND INSURANCE AT PURCHASER'S OPTION: If the bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the bidder/purchaser, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the bonds. Any increased costs of issuance of the bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the bonds from a rating agency, the City will pay the fee for the requested rating. Any other rating agency fees shall be the responsibility of the purchaser. FAILURE OF THE MUNICIPAL BOND INSURER TO ISSUE THE POLICY AFTER THE BONDS HAVE BEEN AWARDED TO THE PURCHASER SHALL NOT CONSTITUTE CAUSE FOR FAILURE OR REFUSAL BY THE PURCHASER TO ACCEPT DELIVERY OF THE BONDS FROM THE CITY.
ADDITIONAL INFORMATION: Further information may be obtained from the City's Financial Consultant, Stauder, BARCH & ASSOCIATES, Inc., at the address stated above.
THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS
ENVELOPES: Envelopes containing the bids should be plainly marked "Proposal for City of Ann Arbor Parking Facility Capital Improvement Bonds".
|
Jacqueline Beaudry |
City Clerk |
City of Ann Arbor, Michigan |