HomeMy Public PortalAbout082-2007 - Authorizes Temporary Loan EngagementORDINANCE NO. 82-2007
WHEREAS, the Common Council of the City of Richmond ("City") hereby finds that an
emergency existed for the borrowing of money with which to meet the expenses of said City that
will be incurred in 2008 to be paid from the City General, Motor Vehicle Highway, Park Bond
Sinking, Parks and Recreation, Cumulative Capital Development, Police Pension and Fire
Pension Funds of said City, which expenses must be met prior to the receipt of the final
settlement and distribution of taxes for the year 2006, collectible in the year 2007 and thereafter,
and
WHEREAS, the Controller has presented to the Common Council a recommendation that
the City issue a temporary loan, subject to the terms hereinafter set forth:
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED by the Common
Council of the City of Richmond, Indiana ("City"), that the City issue a temporary loan for and
on behalf of the City in the aggregate amount of $10,000,000. The loans shall be used for
meeting expenses of the City included in the regular budget and appropriations adopted for the
year 2007, which expenses must be met prior to the receipt of the final settlement and
distribution of taxes for the year 2007.
Such temporary loan shall be evidenced by warrants of the City dated as of the date of
delivery thereof, bearing interest at a rate not to exceed 6% per annum (the exact rate to be
determined by negotiation conducted by the Controller), which interest shall be payable at the
time of the final payment of the principal of said warrants and said warrants shall mature and be
payable as follows:
FUND
General
Motor Vehicle Highway
Park Bond Sinking
Parks and Recreation
Cumulative Capital
Development
Police Pension
Fire Pension
TOTAL
$6,183,558
$1,462,916
$ 135,274
$1,788,078
MATURING
December 31, 2007
December 31, 2007
December 31, 2007
December 31, 2007
$ 142,547
December 31, 2007
$ 190,851
December 31, 2007
$ 96,776
December 31, 2007
Interest shall be calculated on a 365 day basis. A sufficient amount of the revenues of the City to
be derived from the City General, Motor Vehicle Highway, Park Bond Sinking, Parks and
Recreation, Cumulative Capital Development, Police Pension and Fire Pension Fund levies is
hereby appropriated and pledged for the payment of the principal amount of said warrants to be
issued at maturity on account of the taxes for the year 2007, collectible in the year 2008 and
thereafter, and a sufficient amount of the revenues of the City to be derived from such Funds is
hereby appropriated and pledged for the payment of interest on said warrants at maturity. The
Clerk -Treasurer of said City is hereby authorized and directed to pay the principal amount of the
warrant of the tax revenues of each fund and the interest on the warrants from the designated
Fund upon the presentation thereof at or after maturity. The warrants will be delivered on or
about December 5, 2007.
Said warrants shall be signed by the Mayor and the seal of the City shall be affixed
thereto and attested by the signature of the Controller of the City.
Said warrants shall be payable at the office of Controller of the City. Said warrants shall,
on the face thereof, indicate that it is issued for the City General, Motor Vehicle Highway, Park
Bond Sinking, Parks and Recreation, Cumulative Capital Development, Police Pension and Fire
Pension Funds and payable out of the respective Fund's revenues.
Said warrants shall be issued in substantially the following form, all blanks to be properly
filled in prior to delivery, to -wit:
No.
UNITED STATES OFAMERICA
STATE OF INDIANA COUNTY OF WAYNE
CITY OF RICHMOND, INDIANA
TEMPORARY LOAN WARRANT
FUND
FOR VALUE RECEIVED, The City of Richmond, Indiana, will pay to
at the office of the Controller, Wayne County, Indiana, on December 31,
2007, to the extent drawn hereunder the maximum sum of Dollars
($ ) with interest thereon, at the rate of % per annum, computed from the
date of each draw to the date of repayment, calculated on a 365-day basis. Draws upon this
warrant shall be made upon five days' written notice and shall be noted upon this warrant.
Multiple draws and repayments may be made under this warrant provided that the outstanding
principal balance may at no time exceed $
This warrant evidences a temporary loan aggregating Ten Million Dollars ($10, 000, 000)
authorized by Ordinance passed and adopted by the Common Council of Richmond, Indiana on
November 19, 2007, and in accordance with Indiana Code, Title 36, Article 4, Chapter 6, and all
other acts amendatory thereof or supplemental thereto, for the purpose of procuring a temporary
loan for the Fund of said City.
This temporary loan warrant has been designated as a qualified obligation pursuant to
Section 265(b)(3) of the Internal Revenue Code.
This warrant is issued in anticipation of the tax levy made for the Fund
in the year 2006, collectible in the year 2007 and thereafter, which tax levy is now in the course
of collection and to the payment of the principal amount and the interest thereon, of the revenues
to be derived from the Fund levy, a sufficient amount of the revenues to be derived
from the Fund levy has been and is hereby appropriated and pledged.
It is hereby certified that in the execution of this warrant, all provisions of the
Constitution and the Statutes of the State of Indiana relating thereto have been complied with,
that the Fund tax levy from the proceeds from which the principal amount of and
interest thereon this warrant is payable, together with other revenues in that Fund, are valid and
legal levies; and that said City will reserve a sufficient amount in the Fund for
the payment of the principal of and interest on these warrants.
IN WITNESS WHEREOF, the City of Richmond, Indiana, has caused this warrant to be
signed in its name by the Mayor and attested by the Controller as of the day of December,
2007.
CITY OF RICHMOND, INDIANA
Mayor
City of Richmond, Indiana
Attest:
Controller
City of Richmond, Indiana
Date Amount Drawn or Repaid Outstanding Balance
The Controller of the City is hereby authorized and directed to have said warrants
prepared in the form herein provided and the Controller is hereby directed to negotiate the
delivery of the warrants. The Controller is hereby authorized and directed to negotiate the sale
and the delivery of the warrants with a financial institution pursuant to the terms of this
ordinance in the manner the Controller determines. Upon the letting of the loan by the
Controller, the Mayor, Controller and Clerk are hereby authorized and directed to execute said
warrants in the form herein provided, and the Controller is hereby authorized and directed to
deliver said warrants when so executed on or about December 5, 2007, to the respective
purchaser or purchasers thereof, upon payment by said purchaser or purchasers of the purchase
price for such warrants, together with the interest, if any, accruing from the date of said warrants
to the date of delivery. In the event that the property tax distributions from which these warrants
are payable are not received in a timely manner for the repayment of the warrants, the Controller
is authorized to negotiate an extension of the maturity of the warrants to a date not later than the
earlier of June 30, 2008, or a date which is five business days after the receipt of the property tax
distributions allocable to 2007.
In order to preserve the exclusion of interest on any tax exempt series of warrants from
gross income for Federal income tax purposes and as an inducement to purchasers of the
warrants, the City represents, covenants and agrees that:
a. No person or entity, other than the City or another governmental unit, will use
proceeds of the warrants or property financed by the warrant proceeds other than the City or
another governmental unit will own property financed by warrant proceeds or will have actual or
beneficial use of such property pursuant to a lease, a management or incentive payment contract
or to any other type or arrangement that differentiates that person's or entity's use of such
property from the use by the public at large.
b. No warrant proceeds will be loaned to any entity or person. No warrant proceeds will
be transferred, directly or indirectly, or deemed transferred to a nongovernmental person in any
manner that would in substance constitute a loan of the warrant proceeds.
c. The City will, to the extent necessary to preserve the exclusion of interest on the tax-
exempt warrants from gross income for federal income tax purposes, rebate all required arbitrage
profits on warrant proceeds or other monies treated as warrant proceeds to the federal
government as provided in Section 148 of the Internal Revenue Code of 1986, and will set aside
such monies in a Rebate Account to be held by the Clerk -Treasurer in trust for such purpose.
d. The City will file an information report with the Internal Revenue Service as required
by Section 149 of the Internal Revenue Code of 1986.
e. The City will not take any action nor fail to take any action with respect to the
warrants that would result in the loss of the exclusion from gross income for federal income tax
purposes of interest on the tax-exempt warrants pursuant to Section 103 of the Internal Revenue
Code of 1986, as existing on the date of issuance of the warrants, nor will the City act in any
other manner which would adversely affect such exclusion.
The City represents that tax-exempt obligations issued by or on behalf of it and any entity
subordinate to it in the calendar year 2007 will not exceed $10,000,000 and that there are no
entities to which it is subordinate. The City hereby designates the warrants as qualified
obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, relating to
the disallowance of 100% of the deduction for interest expense allocable to tax-exempt
obligations acquired after August 7, 1986.
Passed and adopted this 19th day of November 2007, by the Common Council of the City of Richmond,
Indiana.
S/S Diana Pappin President
(Diana Pappin)
ATTEST: S/S Karen Chasteen City Clerk
(Karen Chasteen)
PRESENTED to the Mayor of the City of Richmond, Indiana, this 20th day of November, 2007, at 9:00
a.m.
S/S Karen Chasteen City Clerk
(Karen Chasteen)
APPROVED by me, Sarah L. Hutton, Mayor of the City of Richmond, Indiana, this 20th day of
November, 2007, at 9:05 a.m.
S/S Sarah L. Hutton Mayor
(Sarah L. Hutton)
ATTEST: _S/S Karen Chasteen City Clerk
(Karen Chasteen)