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N 17 -175
Date of Adoptio �toL�r 5 , 2017
RESOLUTION OF THE BOROUGH OF CARTERET, IN THE
COUNTY OF MIDDLESEX, NEW JERSEY, WITH RESPECT TO
THE ISSUANCE AND SALE BY THE BOROUGH OF CARTERET
HOUSING AUTHORITY OF ONE SERIES OF HOUSING
REVENUE BONDS (RENTAL ASSISTANCE DEMONSTRATION
PROJECT), SERIES 2017
WHEREAS, the Borough of Carteret Housing Authority (the "Authority" or the
"Housing Authority ") is a public body corporate and politic, constituting an
instrumentality of the State of New Jersey (the - State"). created by the Borough of
Carteret (the "Borough') pursuant to the provisions of the Housing Authorities Law.
Chapter 67 of the Pamphlet Laws of 1950, codified at N.J.S.A. 55:14A -I et sue., repealed
and replaced by the Local Redevelopment and Housing Law, under Chapter 79 of the
Pamphlet Laws of 1992, as amended and supplemented, and codified at N.J.S.A
40A:12A -1 et sect. (the "Act "); and
WHEREAS, the Authority owns and operates 228 residential allordable housing rental
public housing units for which it has received approval from the United States
Department of Housing and Urban Development ("HUD ") to convert such housing units
(the "Housing Units ") to the Rental Assistance Demonstration Program, P.L. 112 -55
(2012) ( "RAD ") administered by HUD; and
WHEREAS, the Act authorizes the Authority to issue bonds, notes or other obligations
to fulfill its purposes ( N.J.S.A . 40A:12A -16(5) and -29); and
WHEREAS, in furtherance of the purposes of the Act, the Authority proposes to issue a
series of bonds in an aggregate principal amount not to exceed $2,300,000 (the "Bonds ").
upon substantially the terms and conditions contained in the Commitment (as hereinafter
defined) attached hereto as Exhibit A and to apply the proceeds of the Bonds to, inter
alia, finance capital improvements to fund rehabilitation reserves for the Housing Units
that will be subject to the RAD program. to defease existing debt of the Authority and to
pay costs in connection therewith; and
WHEREAS. the Bonds, when issued, will be special and limited obligations of the
Authority, and neither the Borough nor the County of Middlesex (the "County"), nor any
political subdivision thereof (other than the Authority, but solely to the extent of the trust
estate as defined in the Bond Resolution ( as defined below), will be obligated to pay the
principal or redemption price of or interest on, the Bonds, and neither the faith and credit
nor the taxing power of the Borough. the County or any political subdivision thereof will
be pledged to the payment of the principal or redemption price of or interest on, the
Bonds; and
No. 17 -175
PAGE 2
WHEREAS, the Bonds will be issued pursuant to the terms of the Act, other applicable
law and agreements and a resolution to be adopted by the Authority prior to the issuance
of the Bonds authorizing the issuance of the Bonds (collectively. together with any
amendments or supplements, the "Bond Resolution"); and
WHEREAS, N.J.S.A 40A:12A -29(d) requires that the governing body which created a
housing authority and which housing authority is financing a housing project determine
that the rate of interest on any such financing undertaken by a housing authority be in the
best interest of the municipality.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE
BOROUGH OF CARTERET, a majority of the membership thereof affirmatively
concurring, as follows:
Section 1. The Borough acknowledges that the Housing Authority proposes
to issue a series of Bonds in an aggregate principal amount not to exceed $2,300,000 to
(i) finance capital improvements to and fund rehabilitation reserves for the Housing Units
that are subject to the RAD program, (ii) defease outstanding indebtedness of the
Authority with respect to the Housing Units and (iii) pay costs in connection therewith.
The terms and conditions for the issuance of the Bonds shall be as provided in the
Commitment dated September 11, 2017 (the "Commitment'). The Bonds shall be dated.
shall bear interest at such rate of interest, and shall be payable as to principal, interest and
premium, if any, all as specified in the Revised Commitment from the Bank (the "Bank ")
to the Authority.
The interest rate shall be fixed for the first ten (10) years of the Bond term at the
initial rate of 3.50% (the "Initial Interest Rate "). The Initial Interest Rate of 3.50% will
be held for 60 days from the date of the Commitment. The Initial Interest Rate is subject
to change after the 60 days has expired. On the tenth anniversary of the closing of the
Bonds (the "Change Date "), the Initial Interest Rate will reset to the Bank's tax exempt
equivalent of 2.50% in excess of the then prevailing Federal Home Loan Bank of New
York 10/20 Year Amortizing Advance Rate (the "Change Date Index"'). rounded up to
the next highest one - eighth of one percent (0.125 %). At no time during the term of the
Bonds, shall the interest rate be less than the initial rate at closing (current indicative
interest rate floor as of the date of the Term Sheet is equal to 3.50 %). The interest rate
adjustment shall be limited to an increase of up to 3.50% over the prior interest rate.
If the Index is no longer available, the Bank will substitute the comparable
Federal Reserve Bank interest rate as the Index.
The term of the Bonds shall be 20 years based upon a 30 }ear amortization
schedule.
Payments will be made in 240 equal monthly installments of principal and interest
with a balloon payment at maturity.
NO. 17 -175
PAGE 3
The Authority may, from time to time, prepay. in whole or in part, the outstanding
principal amount due on the Bonds, upon thirty (30) days prior written notice to the
Bank, with and without redemption premium, plus accrued interest thereon, as provided
in the Commitment.
Neither the faith and credit nor the taxing power of the Borough nor any political
subdivision thereof will be pledged to the payment of the principal or redemption price
of, or interest on, the Bonds. Nothing in the Bonds or the Bond Resolution Xvill assign
or pledge therefor any other ftmds or assets of the Authority, the County or the
Borough.
Section 1. Subject to satisfaction of the conditions set forth below, the
Borough hereby finds and determines, in accordance with the provisions of N.J.S.A.
40A: 12A-29(d), that the rate of interest, as described above. is in the best interest of the
Borough. The Authority shall establish. to the satisfaction of the Borough at or before
the issuance of the Bonds, that the Authority has either performed, or covenanted to
perform, each of the following conditions:
A. The proceeds of the Bonds shall be applied to: (i) finance capital
improvements to and fund replacement reserves for the Authority's Project that is subject
to the RAD program: (ii) to defease outstanding indebtedness of the Authority issued by
the New Jersey Housing and Mortgage Finance Agency and (iii) pay costs in connection
therewith. The proceeds of the Bonds shall not be used for any other purpose other than
as described above.
B. The Authority shall provide a copy of the closing transcript with respect to
the Bonds to the Borough.
C. The Mayor, Clerk and Chief Financial Officer of the Borough of Carteret are
each hereby authorized and directed to execute and deliver such certificates, agreements and
documents, and to take such other actions as may be necessary or appropriate in order to
consummate the transactions contemplated hereby.
D. Certified copies of this Resolution shall be filed with the Clerk of the
Borough of Carteret and the Housing Authority. This Resolution shall take effect
immediately upon the adoption hereof.
Adopted this 5th day of Cctober, 2017
and certified as a true copy of the
original on C--tober 6, 2017.
KATHI-EEN M. BAR , MT
M.micipal Clerk
RECORD OF COUNCIL VOTE
COUNCILMAN
YES
NO
NV
A.B.
COUNCILMAN
YES
NO
NV
A.B.
BaLRD
X
JC R4L
X
DTAZ
X
11RM
X
DE4*ao
X
t` quP s
X
X - Indicate Vote AB - Absent NV - Not Voting XOR - Indicates Vote to Overrule Veto
Adopted at a meeting of the Municipal Council
0--tcber 5 n7
CLERK
EXHIBIT A
COMMITMENT