Sponsor
Alderman Spangenberg
Title
RESOLUTION AUTHORIZING THE BORROWING OF $2,000,000; PROVIDING FOR THE ISSUANCE AND SALE OF Taxable General Obligation Refunding Bonds THEREFOR; AND LEVYING A TAX IN CONNECTION THEREWITH
WHEREAS, the Common Council of the City of Racine, Racine County, Wisconsin (the "City") hereby finds and determines that it is necessary, desirable and in the best interest of the City to raise funds for the purpose of paying the cost of refunding certain outstanding obligations of the City, to wit: $2,000,000 Taxable Note Anticipation Notes, Series 2005B, dated June 30, 2005 (the "2005 Notes") (hereinafter the refinancing of the City's 2005 Notes shall be referred to as the "Refunding"), and there are insufficient funds on hand to pay said costs; and
WHEREAS, the Common Council deems it to be necessary, desirable and in the best interest of the City to refund the 2005 Notes for the purpose of providing permanent financing for the projects financed by the 2005 Notes; and
WHEREAS, cities are authorized by the provisions of Chapter 67 of the Wisconsin Statutes to borrow money and to issue general obligation refunding bonds to refinance their outstanding obligations; and
WHEREAS, due to certain provisions contained in the Internal Revenue Code of 1986, as amended, it is necessary to issue such general obligation refunding bonds on a taxable rather than tax-exempt basis; and
WHEREAS, the Common Council now deems it to be necessary, desirable and in the best interest of the City to authorize the issuance of and to award the sale of its taxable general obligation refunding bonds to Robert W. Baird & Co. Incorporated, Milwaukee, Wisconsin.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City that:
Section 1. Authorization of the Bonds. For the purpose of paying the cost of the Refunding, there shall be borrowed pursuant to Chapter 67 of the Wisconsin Statutes, the principal sum of TWO MILLION DOLLARS ($2,000,000) from Robert W. Baird & Co. Incorporated, Milwaukee, Wisconsin (the "Purchaser") in accordance with the terms and conditions of its bond purchase proposal (the "Proposal") attached hereto as Exhibit A and incorporated herein by this reference.
Section 1A. Sale of the Bonds. To evidence such indebtedness, the Mayor and City Clerk are hereby authorized, empowered and directed to make, execute, issue and sell to the Purchaser for, on behalf of and in the name of the City, Taxable General Obligation Refunding Bonds aggregating the principal amount of TWO MILLION DOLLARS ($2,000,000) (the "Bonds") for the sum set forth on the Proposal, plus accrued interest to the date of delivery.
Section 2. Terms of the Bonds. The Bonds shall be designated "Taxable General Obligation Refunding Bonds"; shall be dated June 26, 2006; shall be in the denomination of $5,000 or any integral multiple thereof; shall be numbered 1 and upward; shall bear interest at the rates and shall mature on December 1 of each year, in the years and principal amounts as set forth on the schedule prepared by the Purchaser and attached hereto as Exhibit B (the "Schedule"). Interest is payable semi-annually on June 1 and December 1 of each year commencing on December 1, 2006.
Section 3. Redemption Provisions. At the option of the City, the Bonds maturing on December 1, 2018 and thereafter shall be subject to redemption prior to maturity on December 1, 2016 or on any date thereafter. Said Bonds shall be redeemable as a whole or in part, and if in part, from maturities selected by the City and within each maturity by lot, at the principal amount thereof, plus accrued interest to the date of redemption. Additionally, the Bonds are subject to mandatory redemption. The terms of such mandatory redemption are set forth on Exhibit MRP (the "Mandatory Redemption Provisions") attached hereto and incorporated herein by this reference.
Section 4. Form of the Bonds. The Bonds shall be issued in registered form and shall be executed and delivered in substantially the form attached hereto as Exhibit C and incorporated herein by this reference.
Section 5. Direct Annual Irrepealable Tax Levy. For the purpose of paying the principal of and interest on the Bonds as the same becomes due, the full faith, credit and resources of the City are hereby irrevocably pledged, and there is hereby levied upon all of the taxable property of the City a direct annual irrepealable tax in the years 2006 through 2024 for the payments due in the years 2006 through 2025 in the amounts set forth on the Schedule. The amount of tax levied for the year 2006 shall be the total amount of debt service due on the Bonds in the years 2006 and 2007; provided that the amount of such tax carried onto the tax rolls shall be abated by any amounts appropriated pursuant to the paragraph below which are applied to payment of principal of or interest on the Bonds in the year 2006.
The direct annual irrepealable tax hereby levied shall be carried onto the tax roll and collected in addition to all other taxes and in the same manner and at the same time as other taxes of the City for said years are collected. So long as any part of the principal of or interest on the Bonds remains unpaid, the tax hereinabove levied shall be and continues irrepealable except that the amount of tax carried onto the tax roll may be reduced in any year by the amount of any surplus in the Debt Service Fund Account for the Bonds created below.
There be and there hereby is appropriated from funds of the City on hand a sum sufficient to be deposited in the Debt Service Fund Account to meet payments with respect to debt service due on December 1, 2006.
Section 6. Segregated Debt Service Fund Account. There is hereby established in the City treasury a fund account separate and distinct from all other funds or accounts of the City designated "Debt Service Fund Account for $2,000,000 City of Racine Taxable General Obligation Refunding Bonds, dated June 26, 2006", which fund account shall be used solely for the purpose of paying the principal of and interest on the Bonds. There shall be deposited in said fund account all accrued interest paid on the Bonds at the time the Bonds are delivered to the Purchaser, any premium, all money raised by taxation pursuant to Section 5 hereof, and all other sums as may be necessary to pay principal of and interest on the Bonds as the same become due. Said fund account shall be used for the sole purpose of paying the principal of and interest on the Bonds, shall be maintained for such purpose until such indebtedness is fully paid or otherwise extinguished, and shall at all times be invested in a manner that conforms with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and any applicable income tax regulations (the "Regulations").
Section 7. Borrowed Money Fund. The proceeds of the Bonds (the "Bond Proceeds") (other than any accrued interest which must be paid at the time of the delivery of the Bonds into the Debt Service Fund Account created above) shall be deposited into an account separate and distinct from all other funds and disbursed solely for the purposes for which borrowed or for the payment for the principal of and the interest on the Bonds.
Section 8. Execution of the Bonds. The Bonds shall be prepared in typewritten or printed form, executed on behalf of the City by the manual or facsimile signatures of the Mayor and City Clerk, authenticated, if required, by its fiscal agent, if any, sealed with its official or corporate seal, if any, or a facsimile thereof and delivered to the Purchaser upon payment to the City of the purchase price thereof, plus accrued interest to the date of delivery. In the event that either of the officers whose signatures appear on the Bonds shall cease to be such officers before the delivery of the Bonds, such signatures shall, nevertheless, be valid and sufficient for all purposes to the same extent as if they had remained in office until such delivery. The aforesaid officers are hereby authorized to do all acts and execute all documents as may be necessary and convenient for effectuating the Closing.
Section 9. Payment of the Bonds; Fiscal Agent. The principal of and interest on the Bonds shall be paid by Associated Trust Company, National Association, Green Bay, Wisconsin, which is hereby appointed as the City's registrar and fiscal agent pursuant to the provisions of Section 67.10(2), Wisconsin Statutes (the "Fiscal Agent"). The Fiscal Agency Agreement between the City and the Fiscal Agent shall be substantially in the form attached hereto as Exhibit D and incorporated herein by this reference.
Section 10. Utilization of The Depository Trust Company Book-Entry-Only System. In order to make the Bonds eligible for the services provided by The Depository Trust Company, New York, New York ("DTC"), the City agrees to the applicable provisions set forth in the Blanket Issuer Letter of Representations previously executed on behalf of the City and on file in the City Clerk's office.
Section 11. Undertaking to Provide Continuing Disclosure. The City hereby covenants and agrees, for the benefit of the holders of the Bonds, to enter into a written undertaking (the "Undertaking") required by SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities and Exchange Act of 1934 (the "Rule") to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events in accordance with the Rule. The Undertaking shall be enforceable by the holders of the Bonds or by the Purchaser on behalf of such holders (provided that the rights of the holders and the Purchaser to enforce the Undertaking shall be limited to a right to obtain specific performance of the obligations thereunder and any failure by the City to comply with the provisions of the Undertaking shall not be an event of default with respect to the Bonds).
The City Clerk, or other officer of the City charged with the responsibility for issuing the Bonds, shall provide a Continuing Disclosure Certificate for inclusion in the transcript of proceedings, setting forth the details and terms of the City's Undertaking.
Section 12. Bond Insurance. The Mayor and City Clerk are authorized to agree to such additional provisions as any municipal bond insurer which makes a commitment accepted by the City to insure the Bonds may reasonably request and which are acceptable to the Mayor and City Clerk, including provisions regarding restrictions on investment of Bond Proceeds, the payment procedure under the municipal bond insurance policy, the rights of the bond insurer in the event of default and payment of the Bonds by the bond insurer and notices to be given to the bond insurer. In addition, appropriate reference to the municipal bond insurance policy shall be made in the form of Bond provided herein.
Section 13. Payment of the 2005 Notes. The Bonds are being issued to refund the 2005 Notes on their June 30, 2006 maturity date.
Section 14. Conflicting Resolutions; Severability; Effective Date. All prior resolutions, rules or other actions of the Common Council or any parts thereof in conflict with the provisions hereof shall be, and the same are, hereby rescinded insofar as the same may so conflict. In the event that any one or more provisions hereof shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions hereof. The foregoing shall take effect immediately upon adoption and approval in the manner provided by law.
FISCAL NOTE: The amount for refunding is not to exceed $2,000,000 for TIF No. 11.