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HomeMy Public PortalAboutr 17-175Y Of the .trough L if & rferc l l �q_ �4- 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 Chapter 67 of the Pamphlet Laws of 1950, codified at N.J.S.A. 55:14A -I et sue., repealed and replaced by the Local Redevelopment and Housing Law, under Chapter 79 of the Pamphlet Laws of 1992, as amended and supplemented, and codified at N.J.S.A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