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HomeMy Public PortalAboutResolution 07-15 Issuance and sale of revenue anticipation notesBY THE COUNCIL: RESOLUTION NO. 07-15 A RESOLUTION OF THE CITY OF MCCALL, VALLEY COUNTY, IDAHO, AUTHORIZING THE ISSUANCE AND SALE OF REVENUE ANTICIPATION NOTES IN THE PRINCIPAL AMOUNT OF $696,373 FOR THE PURPOSE OF PROVIDING FUNDS IN ANTICIPATION OF THE RECEIPT OF CERTAIN TAXES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2008; DECLARING THE AMOUNT OF CERTAIN TAXES LEVIED AND REVENUES RECEIVED FOR THE CURRENT FISCAL YEAR; PROVIDING FOR THE MANNER OF ISSUANCE, SALE, REDEMPTION AND THE FORM OF SAID NOTES; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL AND INTEREST THEREON; REQUIRING THE DEPOSIT OF MONEY INTO A SPECIFIED REVENUE NOTE REDEMPTION FUND; AND PROVIDING TERMS, COVENANTS, CONDITIONS, AND OTHER MATTERS PROPERLY RELATING THERETO; AND PROVIDING AN EFFECTIVE DATE. THE CITY OF MCCALL, IDAHO TAX ANTICIPATION NOTES, SERIES 2007 BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF MCCALL, VALLEY COUNTY, IDAHO, as follows: WHEREAS, the City of McCall, Idaho (the "City") is a municipal corporation operating and existing under and by virtue of the laws of the State of Idaho; and WHEREAS, the City is authorized and empowered by Idaho Code Sections 63-3101 to 63-3108, inclusive, and Idaho Code Section 50-1006 to issue tax anticipation notes to provide funds in anticipation of the receipt of taxes during the fiscal year ending September 30, 2008 (the "2007- 2008 Fiscal Year"); and WHEREAS, the City, has, prior to September 30, 2007, by and through its City Council (the "Council'), adopted a budget, in the form and manner required by law, for the 2007-2008 Fiscal Year, and has certified an ad valorem tax levy for the 2007-2008 Fiscal Year by September 30, 2008, the receipt of which taxes will occur during the 2007-2008 Fiscal Year. WHEREAS, the Mayor and Council of the City has determined that there will exist, from time to time, a deficit in the City's tax and revenue collections during the 2007-2008 Fiscal Year due to the lack of funds to pay a judgments in Wausau v. St. Clair Contractors, et al by the U.S. District Court, District of Idaho Case No. CIV 1:01-629 (collectively, the "Judgment"); and WHEREAS, the City is desirous of issuing tax anticipation notes in order to provide funds to cover said deficit, NOW, THEREFORE, BE IT FURTHER RESOLVED, DETERMINED, AND ORDERED as follows: RESOLUTION 07-15 PAGE -1- SASkinner\MCCALL\Tax Ant Note\TAN Note Resolution Section 1. NOTES AUTHORIZED. For the purpose of providing funds to pay the City's current expenses, and in particular, the Judgment, in anticipation of the receipt of certain taxes (described further in Section 8 hereof) for the 2007-2008 Fiscal Year (exclusive of taxes required to pay outstanding bonded indebtedness of the City, if any), the City hereby authorizes tax anticipation notes, entitled "The City of McCall, Idaho, Tax Anticipation Notes, Series 2007" (the "Notes"), in the total principal amount of $696,373, to be issued, sold, and delivered in the manner provided by Idaho Code, Title 63, Chapter 31. Said amount does not exceed seventy-five percent (75%) of the ad valorem taxes levied for the Fiscal Year ending September 30, 2008 for purposes of Idaho Code Section 50-1006 ($696,373) and $235,000 of the City's general fund ad valorem taxes levied for the 2007-2008 Fiscal Year and to be received during the month of July during such Fiscal Year, exclusive of any taxes received to pay the outstanding bonded indebtedness of the City. At present there are no taxes required in order to pay the outstanding bonded indebtedness of the City. Section 2. PURPOSE. The Notes are being issued for the purpose of providing funds for the payment of a current expense of the City, specifically the Judgment, during the 2007-2008 Fiscal Year in anticipation of the receipt of ad valorem taxes ($696,373) levied for purposes of Idaho Code Section 50-1006 and $235,000 of the City's general fund ad valorem taxes levied for the 2007-2008 Fiscal Year and to be received during the month of July during such Fiscal Year. Section 3. DESCRIPTION AND EXECUTION OF NOTES. The Notes shall be dated their date of delivery, shall mature on August 1, 2008, shall be issued in certificated non -book entry form, and shall be substantially in the form set forth in Exhibit "A" which is annexed hereto and by reference made a part hereof. The Notes shall be numbered separately in a consecutive series in the manner and with any additional designation as the City Treasurer deems necessary. The Notes shall be payable on their date of maturity, shall be issued as a single denomination of $696,373, and shall not be subject to call or redemption prior to their stated maturity date. The Notes shall bear interest, payable at maturity of the Notes, at the rate of interest of 4.50% per annum, calculated on the basis of a 360-day year and twelve 30-day months. The Notes shall be executed by the manual or facsimile signature of the Mayor, countersigned by the manual signature of the City Treasurer, and attested by the manual or facsimile signature of the City Clerk, and shall have a facsimile of the Official Seal of the City imprinted thereof. After delivery, the Notes shall not be subject to exchange for different denominations or to reissue or to substitution, except at the sole option of the City and the sole expense of the party seeking the exchange. Section 4. FINANCIAL STATEMENTS. The City shall provide to the Note purchaser a copy of its annual financial statement within 270 days of the end of its fiscal year during the term of the Notes. Section 5. PAYMENT. The Notes shall be payable in lawful money of the United States of America, as to principal and interest, to the nominee of the Depository on the due date of the Notes. The Notes shall be negotiable instruments within the meaning of the Uniform Commercial Code. Section 6. SALE OF NOTES; The sale of the Notes to U.S. Bank, National Association, as purchaser in accordance with the terms and provisions set forth in the Note Purchase Agreement presented at the meeting where this resolution is being adopted, is hereby approved. Section 7. REDEMPTION FUND. There is hereby created and shall be maintained in the office of the City Treasurer a special fund and account separate and distinct from all other funds and RESOLUTION 07-15 PAGE -2- S:\Sldnner\MCCALL\Tax Ant Note\TAN Note Resolution accounts of the City, known as the "Tax Anticipation Note, Series 2007, Redemption Fund." The proceeds of all ad valorem taxes ($696,373) levied for purposes of Idaho Code Section 50-1006 as well as $235,000 of the City's general fund ad valorem taxes collected or received during the month of July for the 2007-2008 Fiscal Year shall be placed, immediately upon receipt, in said Fund until such time as the monies and the investment earnings accumulated therein, or reasonably anticipated to be earned thereon, shall be sufficient to pay all the Notes outstanding, together with the interest thereon, at maturity. All moneys in the Redemption Fund shall be invested in lawful investments of the City, so as to mature on or before the maturity date of the note. The moneys so accumulated in said Fund are hereby appropriated and set apart for the aforesaid purpose only. Nothing in this Section shall be construed to limit the payment of the principal of and interest on said Notes solely to the taxes and revenues in anticipation of which said Notes were issued, but such Notes shall be direct and general obligations of the City. The City hereby pledges its full faith, credit and resources to the payment of the Notes. Section 8. COVENANTS. The City hereby further covenants with the holders of the Notes as follows: A. Ad valorem taxes have been levied for the 2007-2008 Fiscal Year and are to be received during the 2007-2008 Fiscal Year. Ad valorem taxes levied for purposes of Section 50- 1006, Idaho Code, as amended by the City for the 2007-2008 Fiscal Year were $696,373 and at least $235,000 of the City's other general fund ad valorem taxes are to be received in the month of July during the 2007-2008 Fiscal Year. No part of said taxes are being levied for the purpose of paying outstanding bonded indebtedness of the City. B. The Council has prior to September 30, 2007 duly adopted a budget for the 2007- 2008 Fiscal Year and has certified the same in accordance with Section 63-624A, Idaho Code. C. The principal amount of the Notes issued pursuant to this Resolution will not exceed seventy-five percent (75%) of the ad valorem taxes levied and certified by the City for the 2007-2008 Fiscal Year for purposes of Section 50-1006 ($696,373), Idaho Code, as amended and $235,000 of the City's general fund ad valorem taxes for the current 2007-2008 Fiscal Year and to be and collected in the month of July during the 2007-2007 Fiscal Year. D. The proceeds of the sale of the Notes shall be used exclusively for the same purposes for which said taxes are being levied and such other revenues budgeted. E. None of the proceeds of the Notes will be used, directly or indirectly, (i) to make or finance loans to persons, or (ii) in any trade or business carried on by any person (other than use as a member of the general public), and the Notes will not be "private activity bonds" within the meaning of Section 141 of the Internal Revenue Code of 1986 (the "Code"). F. The City will comply with the provisions of the Code which are necessary for interest paid on the Notes to be excluded from gross income for federal income tax purposes (except in the case of certain minimum taxes on corporations) and will make no use of the proceeds of the Notes that would result in the interest on the Notes being includable in gross income within the meaning of Section 103(a) of the Code, and in particular will take no action which would cause the Notes to become arbitrage bonds within the meaning of Section 148 of the Code. A certificate that the Notes are not arbitrage bonds within the meaning of Section 148 of the Code will be RESOLUTION 07-15 PAGE -3- S:\SkinneciMCCALL\Tax Ant Note\TAN Note Resolution provided to the purchaser at the time of delivery of the Notes. G. The City will calculate its actual cumulative cash flow deficit (within the meaning of Code Section 148(f)(4)(B)(iii)(II) prior to the maturity of the Notes, and will keep accurate records of all investments of the proceeds of the Notes, including earnings on the proceeds of the Notes, and the expenditure thereof. If by a date which is not later than six months after the date on which the Notes are issued, the actual cumulative cash flow deficit has not equaled or exceeded ninety percent (90%) of the proceeds of the Notes (including investment earnings thereon), or if the proceeds of the Notes are not otherwise expended within the meaning of Section 148(f) of the Code and the applicable Treasury Regulations, then, unless the City provides an opinion of nationally recognized bond counsel that no rebate under Section 148(f) of the Code is required for the Notes, the City will pay to the United States the amount described in Section 148(f)(2) of the Code for the Notes. Such payment shall be made to the United States not later than 60 days after the Notes mature or are redeemed. The City represents that its said expected cumulative cash flow deficit exceeds ninety percent of the proceeds of the Notes. Section 9. ADDITIONAL LEVY. In the event taxes collected and other revenues received during the 2007-2008 Fiscal Year shall not be sufficient to pay the Notes herein authorized, the City shall, in providing for the levy of taxes in the succeeding fiscal year, include in such succeeding tax levy the amount necessary to cover any deficiency. Taxes levied in the next succeeding fiscal year shall be in an amount which, together with the amount of taxes then in the Tax Anticipation Note, Series 2007, Redemption Fund, shall be sufficient to provide for the payment of the principal of and interest on the Notes issued in anticipation of taxes payable out of such Fund. Section 10. FURTHER AUTHORITY. The Mayor, City Treasurer, and City Clerk are hereby authorized and directed to execute, on behalf of the City, all such additional documents, certificates, and instruments as may be necessary to carry out the intent of this Resolution. Section 11. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption and approval. ADOPTED by the Council of the City of McCall, Idaho, 8thday of November, 2007. APPROVED by the Mayor of the City of McCall, Idaho this 8th day of November, 2007. APPROVED: ATTEST: By: C (SEAL) THE CITY OF MCCALL RESOLUTION 07-15 PAGE -4- S:\Sldnner\MCCALL\Tax Ant Note\TAN Note Resolution By: MAYOR *************** I, the undersigned, the Clerk of the City of McCall, Idaho, do hereby certify that the foregoing Resolution is a full, true, and correct copy of a Resolution duly passed and adopted at a regular meeting of the City Council, duly held at the regular meeting place thereon on November 8, 2007, of which meeting all members of said City Council had due notice, and at which a majority thereof were present; and that at said meeting said Resolution was adopted by the following vote: AYES, City Council Members: NOES, City Council Members: ABSENT, City Council Members: ABSTAIN, City Council Members: D I further certify that I have carefully compared the same with the original Resolution on file and of record in my office; that said Resolution is a full, true, and correct copy of the Resolution adopted at said meeting, and that said Resolution has not been amended, modified, or rescinded since the date of its adoption, and is now in full force and effect. IN WITNESS WHEREOF, I have set my hand November 8, 2007. CITY CL RESOLUTION 07-15 PAGE -5- S:\Skinner\MCCALL\Tax Ant Note\TAN Note Resolution d affixed t e offic' :1 seal of the City on EXHIBIT "A" (Form of Tax Anticipation Note) No. R-1 $696,373 UNITED STATES OF AMERICA STATE OF IDAHO County of Valley THE CITY OF MCCALL, IDAHO TAX ANTICIPATION NOTE, SERIES 2007 THE CITY OF MCCALL, IDAHO acknowledges itself to owe, and for value received promises to pay to U.S. Bank National Association, as registered owner, on the 1st day of August, 2008, the principal sum of SIX HUNDRED NINETY SIX THOUSAND THREE HUNDRED SEVENTY THREE and NO/100THS DOLLARS ($696,373) together with interest thereon at the rate of four and fifty hundredths percent (4.50%) per annum payable at maturity, or until such principal sum shall have been paid or duly provided for, interest being calculated on the basis of a 360-day year, consisting of twelve 30-day months. Both principal of and interest on this Note are payable in lawful money of the United States of America at the offices of U.S. Bank National Association, Seattle, Washington. This Note is one of a series of all of like date, interest rate, tenor, and effect, except as to denomination and number, aggregating in all the principal amount of $696,373 (the "Notes"), issued by the City of McCall, Idaho (the "City"), in anticipation of the receipt of ad valorem taxes ($696,373) levied for purposes of Section 50-1006, Idaho Code, as amended, and together with $235,000 of the City's general fund ad valorem taxes to be collected in the month of July during the 2007-2008 City's Fiscal Year, (exclusive of taxes required to be raised to pay the outstanding bonded indebtedness of the City), as more fully set forth in the Resolution, adopted by the McCall City Council on November 8, 2007, (the "Note Resolution"). Said taxes are hereby irrevocably pledged to the payment of the principal of and interest on the Notes. To provide for the payment of the Notes, the Mayor and Council of the City of McCall has RESOLUTION 07-15 PAGE -6- S:\Skinner\MCCALL\Tax Ant Note\TAN Note Resolution created the Note Resolution, authorizing the issuance and sale of the Notes, a special fund of the City known as the "Tax Anticipation Note, Series 2007A, Redemption Fund" (the "Redemption Fund"), and has covenanted to deposit into the Redemption Fund, ad valorem taxes ($696,373) levied for purposes of Section 50-1006, Idaho Code, as amended and $235,000 of the City's general fund ad valorem taxes to be received in the month of July during the 2007-2008 Fiscal Year all taxes, the receipt of which has been anticipated by the issuance of the Notes, until such time as the monies and investment earnings accumulated therein, or reasonably anticipated to be earned thereon, shall be sufficient to pay the Notes, together with interest thereon, at maturity. The City has further covenanted that the funds so accumulated in the Redemption Fund, shall be appropriated and set apart for the payment of the Notes and shall be used for no other purpose; provided, however, that nothing herein shall be construed to limit the payment of the principal of and interest on the Notes solely to the taxes in anticipation of which these Notes are issued, but the Notes shall be direct and general obligations of the City. IT IS HEREBY CERTIFIED AND DECLARED that the indebtedness of the City hereby incurred is not in excess of seventy-five percent (75%) of the amount of the ad valorem taxes ($696,373) levied and certified by the City for the 2007-2008 Fiscal Year for purposes of Section 50-1006, Idaho Code, as amended, together with $235,000 of the City's general fund ad valorem taxes to be collected in the month of July during the 2007-2008 Fiscal Year, that the ad valorem tax levy for the current 2007-2008 Fiscal Year has been completed, that the indebtedness hereby incurred does not exceed any other limitation on the indebtedness of the City, and the indebtedness hereby incurred is contracted for the purposes for which taxes for the 2007-2008 Fiscal Year of the City are to be levied and said revenues are to be collected. IT IS HEREBY FURTHER CERTIFIED AND DECLARED that the full faith, credit, and resources of the City have been pledged for the payment of this Note according to its terms, that this Note is issued pursuant to and in strict compliance with the Constitution and laws of the State of Idaho and resolutions of the City, and that all acts, conditions, and things required to be done precedent to and in the issuance of this Note have happened, been done, and have been performed. RESOLUTION 07-15 PAGE -7- S:\Skinnei\MCCALL\Tax Ant Note\TAN Note Resolution IN WITNESS WHEREOF, THE CITY OF MCCALL has caused this Note to be executed and signed by the manual or facsimile signature of the Mayor of the City, to be attested by the Clerk of the City by her manual or facsimile signature, to be countersigned by the Treasurer of the City by his manual signature, and the corporate seal of the City to be imprinted herein, as of the day of November, 2007. By: CITY CLERK COUNTERSIGNED. By: CITY TREAgR THE CITY OF MCCALL By: MAYOR (Certificate Regarding Legal Opinion) I, the undersigned Clerk of the City of McCall, Idaho, DO HEREBY CERTIFY that on file in my office is a true and complete copy of the opinion of Skinner Fawcett, Attorneys at Law, of Boise, Idaho, which opinion was dated on the date of delivery of and payment for the Notes described therein, was delivered to me on said date, and is now part of the pern?.nent records of the City. CITY CLERK, of the City of McCall, Idaho RESOLUTION 07-15 PAGE -8- S:\Skinner\MCCALL\Tax Ant Note\TAN Note Resolution