ORDINANCE 50-09

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Ordinance 50-09: Greenvale 9 financing revisited
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  CITYOF SOUTHEUCLID. OHIOOctober 26- 2OO9ORDINANCE NO. :50-09INTRODUCEDBY:RomeoREQUESTED BY: Ma-vorAN ORDTNANCEANORDTNANCE PROVIDINC FOR THE ISSUANCEAND SALE OFSI,SOO,OOOOTES.INANTICIPATION OF THE ISSUANCE OF BONDS.FOR THE PURPOSE OF PAYTNG COSTSOF ACQUIRING CERTAIN REAL PROPERTY ANDCLEARING AND OTHER\VISEIMPROVINC THE SITETHEREOFTO PROVIDEOR ASSIST TN PROVIDING HOUSTNC.AND DECLARING AN EMERGENCY.WHEREAS,theCityis authorized andemporvered byvirtueof the laws of the State of Ohio,including,withoutlimitation,Sectionl6of ArticleVIIIofthe Ohio Constirution and Section133.51of the Ohio RevisedCode.among otherthings,(a)to issue bondanticipationnotes andbondsforthepurposeofprovidingor assisting inprovidinghousing;(b)tosecuresuch notes andbonds by nontax revenues, asprovidedherein; and(c)to enact this Ordinance, upon tl-le ermsandconditionsprovidedherein;andWHEREAS,for thepurposeofprovidingor assisting inprovidinghousing, the City,pursuanttoOrdinance No. 8l-06passedonNovember 13,20O6purchased, pursuantto ArticleVtlI, Section16oF the Ohio Constirution, certain real estate and the buildings thereon, and clearedandotherwise improved the site thereof, in order, aspresentlyintendedbytheCity,to make it suitablefor sale or lease to a developer or developers for development of residential facilities,therebyenhancingthe availability of adequate housingin,and improving the econornic andgeneralwell-being of the residents ot-, theCity;andWHEREAS,pursuantto OrdinanceNo. 59-07passedNovember12,2OQ7a note inarrticipationof the issuance ofbondsinthearnount ofSl,8OO,OOO,ated Decernber 20,2OO7, was issuedforthatpurposeas stated n Section 2, tomatureon Decernber 18, 2OO8theOutstanding Note);andWHEREAS,this Council finds and detenninesthatthe Cityshould retire the Outstanding Notewitl'rtheproceedsof the notes describedinSection 3; andWHEREAS, the DirectorofFinance, as t-rscaloft-rcerofthis City, has certified to this Councilthatthe estimated life orperiodof usefulness of theprojectdescribed in Section 2is atleastfiveyears,the estimated maximum maturity of thebondsdescribedin Section 2 is at least twentyyears,andthe maximum marurity of the notesdescribed inSection3, to be issued in anticipationof thebonds, isDecernber27, 2Q26'.NOW, THEREFORE, BE IT ORDAINED by the Courncil of the Cityof SouthEr.rclid,County ofCuyahoga,Stateof Ohio, that:Section l: tn addition to thewordsand terms defined elsewherein thisOrdinance,unlessthecontext or use clearly indicates another meaning or intent: Holder means theOriginalPurchaser as the initial owner oftheNotes(asdefined inSection3)or, in the eventoftransfer thereof, any subsequentpersonwhois the ownerof the Notes. Nonta-\Revenues means all moneysofthe Citywhichare not moneys raisedbytaxation, to theextent availablefbr thepurposeofpayingNote service charges. including,but notlimited to thetbllowing:(a)proceedsfrom thesale orlease of all or aportionof the ProjectSite;(b) grantsfrorn the United States ofAmerica and theState;(c)t-rnes and forfeitureswhich aredepositedin the City's General Fund;(d)fees deposited in the City'sGeneral Fund for servicesprovidedand l}omproperlyimposed licenses andpermits;(e)inveshnentearningsonthe City'sGeneral Fund;(t)investment eamings on other funds of the Citythat are creditedtothe City'sCeneral Fund;(g)proceedsfrorn the sale ofassets rvhich are deposited in the City's GeneralFund:(l-r) giftsand donations;(i)all rentalpaymentswhich are deposited in the City'sCeneralFund; and()€rny moneys in the fundfor theProjectinto which theproceedsof theNotes aredeposited andwhichare not needed topaycosts ofthe Project. Noteservicecharges rneans, for anyperiodof time,theprincipalof andinte;estrequired to bepaidby the City on theNotes(asdefinedinSection 3)for such timeperiod. OriginalPurchaser means KeyBank National Association,orsuch otherentity orentitiesas may be designated by theDirector of Finance in the Certificate ofAward.  -2- . Proj_ect lrteansacquiring.clearingandotherwiseimproving the ProjectSite, fbrsaleor lease oa developeror developerstbr developmentof residentiat t-acitities.-*ProjectSite meansthatcertain realestate andthe buildings thereonas described inOrdinance No.8l-06passedbytl-reCouncil onNovernber13,20O6 authorizingthepurchasethereofpursuanttoArticle VIII.Sectionl6of the OhioConstirution.Anyreferenceherein totheCity. tothis Council, or to anyofficer ormember ofeither,irrcludesentitiesor ofticialssucceedingto their respectivefunctions,dr.rties orresponsibilitiespursuanttoor by operationof la',voi larvftrllyperfonningtheir functions.Anyret-erenceo a sectionorprovisionoftheConstitution of theState, or to asection,pro.visionor chapterof theOhio RevisedCode, includesthat section,provisionorchapteras atnended,modified,.Levised,sttpplementedor supersededfiorn tirne to tirne:provided,thainosuch amendmentrrnodif-rcation,evision.supplementorsuperseding section,provisionor chaptershall-b-epplica_bleolelyby reason ofthisprovisionif it constitutesin any wiyan irnpairmeniofthe rightsor obligationsofthe City orthe Holderof theNotes under thisOrdinance, the Notesoranyother instrumentor docurnententeredintoir-rconnection withanyof the foregoing,including,withoutlimitation,any alterationof theobligationtopaythe Note sbrvice chargesin the amountandmanner,at the timesand fromthesourcesprovidedin this Ordinance, exceptaspennittedherein.Secti.on2: ThisCouncildeterminesthat(i)the Projectis consistent withthepurposesof Sectionl6 ofArticleVIIIof the OhioConstitutionand(ii)ii is necessaryo issue bondsoTthisCityin the6 ofArticleVIIIof the OhioConstitutionand(ii)ii is necessaryo issueof thisCityin theaggregateprincipalamountofS,8O0,OOOtheBonds)for thepurposeofpayingcosts of acquiring ggregatepnnclpalamountot$I,800,000(theBonds)for thepurposeofpayingcosts of acquiringcertain. realpropenyandclearingand otherwiseirrrprovingtl'resite thereot--toprovideor assist inerraun- realpr()perlyanclcreanngarlo otnerwlse[nprovrngtheslte thereot toprovlcleor assrst rnprovidinghousing.The Bondsshallbe datedapproxirnatelyDecernber 1,2OO9,shallbearinterest at tlle now estimated,rateof8%oper year,payableon JuneIandDecember I ofeachyear.comtnencingJune l,20lO,untiltheprincipalamount ispaid,and are estirnated tomatuie in _ , -t Bondsin anvyeSrin which principalispayableissubstantially equal.The firstprincipalcomlrlenctngJune I,rutu, untllInepnnclpalamount lspalcl,and are estlmated tomature rntwenty.annual _principalinstallmentssuch thatthe totalprincipaland interestpa)mentson theBondsin any fiscalyearin whichprincipalisoavable is substantiallv eoual. The first nrirrcinalinstallment is estimatedto bemade on Decemberl,20 I O.Section3:It isnecessqyto issueand thisCouncildetermines that notesintheaggregateprincipalarlountof$I,8OO,OOOtheNotes)shall be issuedin anticipationof the issuance ot--theBondsand to retire theOutstandingNote.The Notesshall bear int-erest at arate or rates nottoexceed 89/oper year (cornputedonthebasisof a360-dayyearconsistingof twelve 30-daymonths),payableat maturityor at anydateofearlier prepaymentasprovidedfor inSection4anduntil, theprincipalamountispaidorpay'rnentisprovidedfor.lf requested by theOriginalPurchaser, tl'reNotesryayprovidethat, in theeventthe City does notpayor makeprovisiontbrpaymentatmaturity of thedebt chargeson theNotes, theprincipalamount of theNoies shall bearinterestat a differentrateor rates not to exceedl}-l /2o/operyearfrom thematurity dateuntiltheCitypaysor makesprovisiontopaythatprincipalamount. Therate or rates of interestontheNotesshall be determinedby the DirectorofFinance inthe certificate awardingthe Notes inaccordance withSection 6(theCertificateof Award).The Notesshall be designated HousingDevelopmentSpecialObligationNotes, Series2OO8 or such other designation asrnay be settbrth in theCertiticate of Award. TheNotesshallbe dated the dateofissuance andshali matureoneyearfrorn thedateofissuance, providedthat theDirectorofFinancernay, if it isdetenninedto be-necessaryor advisabletothe saleof the Notes,establish a maturitydate that is up tosevendays less thanoneyeartiomthedate of issuancebysettingforththat rnatrrritydbteintheCertificate of Award.Sgction4: The debtcharges on theNotesshall bepayablein lawful moneyof theUnited Statesof America, or in FederalReserve fundsof theUnited Statesof Arnerica as deterrninedbytheDirectorof Finance inthe CertificateofA' vard, andshall bepayable,withoutdeductioir forservices of theCity'spaylngagent, atthe mainoft-rce of KeyBankNational Association.Cleveland, Ohio,oratthe office ofa bank ortrust companydesignated by the Directorof Financein the Certit'icateof Award after detenniningthat thepaymentai that bank or trustcompanylvillnotendanger the fundsor securitiesof the Cityand thatproper proceduresand safeguardsareavailable fbr thatpurpose,or at theofficeoftheDirectorof Finance if agreed to by theDirector ofFinance and the Origjnal Purchaser(thePayingAgent). Ifagreed toby theOriginal Purchaser andset forth in theCertificate of Award,the Notesshallbeprepayablewithor-rtpenaltyorpremiumatthe option of theCity at any timepriorto maturityasprovidedin this Ordinance.Prepa5rmentpriorto maturityshall be made bydeposit rviththe PayingAgent of theprincipalarnoLlntof theNotes together withinterest accruedthereonto thedate ofprepa)Tlent. TheCity's right ofprepqrnentshatl be exercisedby mailir-rga noticeofprepayrnent,stating the date ofprepaynentand tl-re narneand addressofthePayingAgent,by certifiedorregistered mailto the OriginalPurchaseroftheNotes not lessthan sevendayspriorto the dateofthat deposit,unless that noticeiswaivedby theOriginal Purchaserof the Notes.If moneyforprepaymentis on deposit withthePaytng Agenton the specifiedprepaymentdate followingthegivingof thatnotice(unlesstherequ.irementofthatnotice isrvaivedas statedabove), interestontheprincipalamountprepaidshallceasetoaccrue on theprepaymentdate,and upon the requestof the Director of Finahce the  -3-OriginalP.urchaserof the Notesshallarrangefor thedeliveryof theNotes atthe designated officeofthe PayingAgent fbrprepaymenrandsurrenderandcancejlation.F-Eelienl:TheNotesshall be signedbythe MayorandtheDirector of Finance,inthename oftheCity and inrtreirottlcial capacities,providedlhat oneof thosesignatr-rresmay be a facsimile.TheNotes shallbe issuedin thedenominationsandnumbersaJ requestedby theOriginalPurchaser,andapprovedby the DirectorofFinance,providedthatno such denominationshaTl belessthanSt0O,0OOandprovicleifurther thattheentiieprincipalamountmay berepresented by asinglenote.The entireprincipalamountmayberepresentedby a single note.The Notesshall nothavecouponsattached,shall benumbered'asdet-erminedbythe D-irectorof Financeand shallexpressu.pon theirfaces-h_epfrpose,insummaryterrns,for-whichthey are issuedand that theyareissuedpLlrsuantothis Ordinance.Section6: TheNotesshall besold at notlessthanparatprivatesale bythe Directorof FinancetotheOriginal Purchaserin accordancewithlawandtheprovisionsofthis Ordinance.TheDirectorof Financeshall signthe CertificateofAwardreferredto inSection 3 evidencingthatsale,causethe Notes.tobeprepar-ed,andhave theNotessignedand delivered,together with i truetranscriptofproceejlilS.sryit!referencetothe issuanceof-the Notesif requestedby the OriginalPurchaser,tothe Original_Purcha.seruponpayrnentof thepurchaseprice.The Mayo{ theDirectorof Finance,theClerk ofCouncil andotherCitydfficials, asappropriate,aieeachauthorizedanddirected tosigl any transcriptcertificaies,financialst'aiernents and otherdocumentsand instrumentsandto takesuc[r actionsas are necessaryor appropriatetoconsumrrlatethe transactionscontemplatedby thisOrdinance.S,eclign 7:Theproceedsfromthe sale ofthe Notes,exceptanypremiurnand accruedinterest,shallbepaidintotheproperftrndor funds andthoseprocedasare appropriatedandshallbe rrseclfortl'r.eurposefor whichthe Notesarebeing issued.-Anyportionofthoseproceedsrepresentingpremiumandaccrued interestshallbepaidintothe BondRetirementFund.-Eection8':TheNotes.andanyBondsissuedto retirethe Notesshallbe special obligationsoftheCity, and theNoteservice chargesontheNotesand thedebt chargeson any Bondsissued toretiretheNotesshall bepayablesolely frornthe NontaxRevenues,and thepdymentof Note servicechargesissecured byapledgeof and lienon the NontaxRevenueson depoiitin theNoteFund, asdescribedbelow.The Notesand any Bondsissued toretire theNotes are not andshallnot besecuredby1nobligationorpledgeof'any moneyraisedby taxation.The Notes andany Bondsissuedto retire theNotes do notand shall notrepresentor constirutea debt orpledgeof ihe faittrandcreditor taxingpowerof the City, and theHolderor Holdersthereof have-andlhallhavenoright tohave taxeslevied bythe Cityforthepaynentof Noteservice chargeson the Notesor debtchargeson any Bondsissued to retirethe Notes.TheCity covenantsand agreesthatwhilethe Notes areoutstanding, it willappropriateandmaintainNontax Revenues atsuch timesarrd in suchamounts ai will besufficient,together withtheproceedsof any Bonds issuedto retirethe Notesor renewalnotesissledin anticipationofsuchBondsavailablefor thepurpose (collectively, renewalobligations ),topaythe Note service chargeson the Notes whendue and willso iestrict otherobligationspayablefromNontaxRevenues priorto or on aparitywiththe Noteservice charges ontheNotes as willensure the continuingavailabilityfor appropriationof sufficientN-ontaxRevenuestopayNoteservice charges whendue.Theparvalue tobe received frornthe sale of anyBonds issued to retirethe Notesorof anyrenewal notesand any excess funds resultingfrom theissuanceoftheNotes shall, totheeKtentnecessary,be used topaytheNote servicecharges atmarurity and arepledgedfor thatpurpose.Nothinginthis Ordinanceshallpreventthe Cityfi'om retiring allor anyportionoftheNotes withtheproceedsfrom thesale or lease of all oraportionof the Project Site,withotheravailable cash, withtheproceedsof bondanticipation notes,or with theproceedsof bonds orother obligationscontaining terrns differentthan those describedin this Ordinance.Thereis createdbytheCityaseparate fundor account designated asthe HousingDevelopmentSpecial Obligation Note RetirementFund (the NoteFund ) intowhichNontaxRevenuesshall be deposited on orpriortothe date ofmaturity of the Notes inan amountsufficient topayNote service charges.Nothingherein shall be constrLled as requiringthe City to useor applyto thepa)Tlentof Note service chargesonthe Notesany funds orrevenues fiorn anysource otherthanNontax Revenuesand theproceedsof any renewalobligations.Nothing herein, however, shallbedeernedtoprohibittheCity,of its orvnvolition,fromusing, to the extentthatitis authorizedby law to doso, any other resources tbr thefulfilhnent of any of the tenns,conditionsorobligations of thisOrdinance or of the Notes.Section9: In addition to otller representationsandwarrantiesoftheCity contained in thisOrdinance, theCity covenants and agrees that:(a)PavmentofNoteService Charees. TheCitywill,solely frorn the NontaxRevenueand thepr-oceedsof any renewal obligations,payor cause to bepaidthe Noteservice  chargeson thedates,at theplacesandin themannerprovidedherein and inthe Notes.Forthatpurpose,in eachyearlvhiletheNotes areoutstanding,this Council, after providingfor thepa)nentof debtc-harges payableon theCity'sgeneralobligation securities in thatyearfrornsourcesavailablefor thatpurpose,willappropriate NontaxRevenues andtheproceedsoF anyrenewalobligationsrequiredtopay,and forthepurposeofpaying,the Note service charges dueihthatye-ar..Furtl-rer,hisCouncil will giveeffect tosuch appropriationsin allordinancesitpassesthereafterinthatyearappropriatingmoneytbrexpenditui<i anhencurnbrarrce and limit theotherappropriationsofNontaxRevenuesin thatyearto thearnount availableafter dedr-rcting heamountrequ.iredfor. thepa)rrnentof debtihargespayableon theCity'sgeneraloblig-ationsecuritiesandtopaythoseNote service charges.Cb)9erfbnTranceof CovenantsandCitlz Actions. TireCitywillat all times faithfutlyobserve and perfbnnall agreements,covenants,undertakings,stipulationsandprovisionstob-eperformedon.its partunderthisOrdinanceand the Notesand-under allproieedingsof thisCouncilpertaining.thereto.TheCity representsthat(i)it is arnrrnicipai corporaiion.dulyorganizedand existingunderandbyvirnreof the lawsof the State;(ii)it is, and upbn deliveryofthe Notescovenantsthat it willbe, duly authorizedby theConstitution and lawsoithe State, anditsCharter, to issuetheNotesand any renewalobligaiionsand toprovidethe security forpaymentofthe Note sen'icechargesinthe Frannerand to theextentset forth herein and inthe Ncjte-s;iii)all actior rson itspartfortl re ssuanceof theNotes havebeen orwillbe takenduly and eftbctively;and(iv)the Notes willbevalidandenforceablespecialobligations of theCity according to theirlgrrns. Eq hobligationofthe Cityrequired tobe undertakenpursuanrto thqOrdinance and theNotesisbinding upon theCity.and uponeachofficer or employeeof the City as rnay from tirnetotimehave theauthorityunderlaw to takeany actionon behalfof the City ai may b-enecessarytoperformall or anypartofsuch obligation,asa duty of the Cityand of eich of tirose ot'ficers hndgmp.loygesesultingfroman office,trustor stationwitl'rinthe meaningof Section 273l.Ol,OhioRevisedCode,providingforenflorcementby'uvritof mandamus._c)lnspectionof Project Books.All booksand documents in theCity'spossessionrelatingto theProject anclhe NontaxRevenuesshall be open atall times during the,City's regularbusiness hoursto inspectionbysuch accountantsor other agentsof the Holder as the Holdermayfrorntime to time designate.Section I O: TheCity covenantsthat it willuse, and willrestrict the use andinvestnrent oi theproceedsoftl-reNotes insuch mannerand tosuch extent as maybe necessary so that(a)the Noteswillnot(i)constituteprivateactivity bonds,arbitragebonds or hedge bonds underSections l4l.148 or 149of the lntemalRevenueCode of1986, as amended(theCode) or(ii)be treated otherthanas bonds to whichSectionlO3(a)of the Codeapplies, and(b)theinrerest on the Noteswillnotbean itern oftaxprefbrenceunder Section57 of theCode.TheCity fr.rrthercovenants that(a)it willtake or cause to be takensuch actions thatlnaybe requiredof it for theinterest on theNotes tobe and remain excludedfromgrossincometbr t-ederalncome taxpurposes.and(b)it willnot takeorauthorizeto be taken any actions thatwouldadversely affectthat exclusion,and(c)it, orpersonsactingfor it,will,among other actsofcompliance,(i)applytheproceedsof the Notesto thegovernmentalpurposeof the borrowing,(ii)restrict the yieldon investrnent property, (iii)maketimely andadequatepaymentsto the f'ederalgovernrtent, (iv)maintainbooks and recordsand makecalculations and reports,and(v)refrainfrom certainuses of those proceeds,and.as applicable,ofpropertyfinanced withsuchproceeds,allin such mannerand to theextent necessaryo assure such exclusionof tl-rat nterestundertheCode.The City herebyrepresentshat the OutstandingNote(theRefirndedObligation)wasdesignatedor treated as a';qr-raiifiedtax-exemptobligatiorJpursuanttoSection 265(5)(3) of theCode. TheCity herebycovenants that it willredeern theRefi rnded Obligation liornproceedsof,and within90 claysafter issuanceof,theNotes,and representshat all other conditions are met Fortreatingthe arnountof theNotes equal tothe face amount thereofas qualifiedtax-exerrrptobligations and as notto be taken into accountunder subparagraph(D)ofSection 265(bX3) oftheCode,witl'routnecessityfor funherdesignation,byreasonof subparagraph(DXii)of Section265(bX3)of the Code.Further, theCityrepresentsandcovenants that, during any tirne or in anymanner asmightat-tbcthestatus of the Notesas qualified tax-exempt obligations , it has notformedorparticipatedin the fonnationof, or benefited frorrror availed itself oC any entity inorder to avoidthepurposesof subparagraph(C)or(D)of Section 265(bX3)of the Code,and willnot fonrl,participatein tl'retbrrnationot. or benefit ltom or avail itselfot-, any strch er-rtity. TheCity further representsthatthe Notes are notbeing issued aspartofadirect or indirect compositeissue that combinesissuesorlotsoFtax-exemptobligations of diff'erenr ssuers.The DirectorofFinance, as the fiscalofticer, or anyother officerof theCityhavingresponsibilityfor issuanceof theNotes is herebyauthorized(a)to make or effect any election,selection, designation,choice, consent,approval,orlvaiveron behalf of theCitywithrespect tothe Notes as theCity ispennittedto or requiredto make orgiveunderthefederalincome taxlalvs, fbr the purposeofassuring, enhancingorprotectingfavorabletax treahnent or status of theNotesorinterestthereonor assisting compliance withrequirements for thatpurpose,reducingtheburdenor expense of suchcompliance, reducingthe rebate amount orpaJmentsorpenalties,ormakingpa)mentsof special amountsin lieu ofmakingcomputationsto deter mine, orpaying,
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