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HomeMy WebLinkAbout2009-13• RESOLUTION 2009-13 RESOLUTION PROVIDING FOR THE FORM, DETAILS AND PAYMENT OF A GENERAL OBLIGATION PUBLIC IMPROVEMENT BOND, PREVIOUSLY AUTHORIZED, IN AN AMOUNT NOT TO EXCEED $330,000 OF THE TOWN OF PULASKI, TO BE SOLD TO WACHOVIA BANK, NATIONAL ASSOCIATION, AND AUTHORIZING CERTAIN RELATED ACTIONS By a resolution adopted December 20, 2005, the Council of the Town of Pulaski, Virginia (the "Council") previously authorized the Town of Pulaski, Virginia (the "Town") to issue general obligation bonds of the Town in an amount not to exceed $1,000,000 to provide funds, together with other available funds, to finance the costs of improvements to real estate (the "Project") and to issue a note in anticipation of the issuance of such bonds. Pursuant to the Public Finance Act of 1991(the "Act"), the Town has issued its bond anticipation note dated December 28, 2005, in the original principal amount of $800,000 (such note as amended, the "Note"), and has paid $323,157.77 of principal of the Note with current revenues, and therefore, pursuant to Section 15.2-2628 of the Act, the maximum amount of bonds authorized is reduced by that amount to $476,842.23. Now the Council desires to provide for the issuance of a bond (the "Bond") to provide the • long-term financing of the Project and the costs of issuing the Bond. BE IT RESOLVED BY THE COUNCIL OF THE TOWN OF PULASKI, VIRGINIA: Section I. Incorporation of Recitals. The forgoing recitals are found to be accurate and are hereby incorporated into this resolution and made a part hereof. Section 2. Details of the Bond. (a) The Bond shall be designated "General Obligation Public Improvement Bond," with an appropriate series designation. The Bond shall be issued as a fully registered bond without coupons and shall be in a principal amount not to exceed $330,000 (the "Maximum Amount"). (b) The Bond shall bear interest from its dated date at the per annum rate or rates determined in accordance with the provisions of (c) below. The principal of the Bond shall be payable on the dates and in the principal amounts, and the interest on the Bond shall be payable on the dates, all as determined in accordance with the provisions of (c) below. (c) Any of the Mayor or Vice Mayor of the Town is hereby authorized to determine and approve, all of the other final details of the Bond, including, but not limited to, its • dated date and original principal amount, interest rates and payment dates of interest, the payment dates of principal, the amount of each principal payment, the provisions, if any, for yield • maintenance if certain events occur, and the provisions for prepayment or redemption, provided that (a) the original principal amount of the Bond does not exceed the Maximum Amount, (b) the interest on the Bond does not exceed 6.00% per annum, and (c) the due date of the last installment of principal of the Bond is not later than 20 years after the date of the Bond. Such officer's determination and approval of the final details of the Bond shall be evidenced conclusively by such officer's execution and delivery of the Bond in accordance with Sections 3 and 7 hereof. Section 3. Execution of Bond. The Bond shall bear the manual signature of the Mayor or Vice Mayor of the Town and shall bear a manually impressed or imprinted facsimile of the seal of the Town, attested by the manual signature of the Clerk of the Town. In case any officer whose signature shall appear on the Bond shall cease to be such officer before the delivery of the Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. The Bond may be signed by such persons as at the actual time of the execution thereof shall be the proper officers to sign the Bond although at the date of the Bond such persons may not have been such officers. Section 4. Form of Bond. The Bond shall be in substantially the form attached hereto as Exhibit A, with such variations, insertions and omissions as shall be consistent herewith, the execution and delivery of the Bond constituting conclusive evidence that any variations, insertions and omissions are consistent herewith. Section 5. Bond Registrar. The Town Manager of the Town is hereby appointed Bond • Registrar for the Bond. Section 6. Regtistration Transfer and Exchange. The Town shall cause books for the registration and transfer of the Bond to be kept at the office of the Bond Registrar, and the Town hereby instructs the Bond Registrar to keep such books and to make such registrations and transfers under such reasonable regulations as the Town or the Bond Registrar may prescribe. Transfer of the Bond may be registered upon books maintained for that purpose at the office of the Bond Registrar. Prior to due presentment for registration of transfer the Bond Registrar shall treat the registered owner as the person exclusively entitled to payment of principal and interest and the exercise of all other rights and powers of the owner. Section 7. Preparation and Award of Bond. (a) The proposal of Wachovia Bank, National Association, to purchase the Bond, which proposal has been presented to Council at this meeting, is hereby determined, after mature consideration of the methods of sale of the Bond and current conditions of the municipal bond market, to be in the best interest of the Town, and the Mayor or Vice Mayor of the Town is hereby authorized to award the Bond to such bank on such terms and conditions as such officer may determine to be in the Town's best interest. Such officer's determination of the terms and conditions of the award of the Bond shall be evidenced conclusively by such officer's execution and delivery of the Bond in accordance with Section 4 and Section 7 (b) hereof. • (b) The Mayor and Vice Mayor and the Clerk of the Town are hereby authorized and directed to take all proper steps to have the Bond prepared, executed and delivered in accordance with the terms of this resolution. Section 8. Designation as Qualified Tax-Exempt Obligation. The Bond is not a private activity bond and is hereby designated by the Council as a Qualified Tax-Exempt Obligation, as defined in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The Council hereby represents and covenants as follows: (i) The Council will in no event designate more than $30,000,000 of obligations as qualified tax-exempt obligations in the calendar year in which the Bond is issued, for the purpose of Section 265(b)(3) of the Code; (ii) The Town, all its "subordinate entities," within the meaning of Section 265(b)(3) of the Code, and all entities which issue tax-exempt bonds on behalf of the Town and such subordinate entities have together not authorized to be issued more than $30,000,000 of tax-exempt obligations in the current calendar year (not including "private activity bonds," as defined in Section 141 of the Code), including the Bond; (iii) Barring circumstances unforeseen as of the date of delivery of the Bond, the Town will not issue tax-exempt obligations itself or approve the issuance of tax-exempt obligations of any of such other entities if the issuance of such tax-exempt obligations would, when aggregated with all other tax-exempt obligations theretofore issued by the Town and such other entities in the calendar year in which such Bond is issued, result in the Town and such other entities having issued a total of more than $30,000,000 of tax-exempt obligations in such year (not including private activity bonds), including such Bond; and (iv) The Council has no reason to believe that the Town and such other entities will issue in the calendar year in which the Bond is issued tax-exempt obligations in an aggregate amount that will exceed such $30,000,000 limit; provided however, that if the Town receives an opinion of nationally recognized bond counsel that compliance with any covenant set forth in (i) or (iii) above is not required for the Bond to be a qualified tax-exempt obligation, the Town need not comply with such restriction. Section 9. Authorization of Tax Documents and Other Matters. The Mayor, Vice Mayor and' the Town Manager are each authorized to execute a Nonarbitrage Certificate and Tax Compliance Agreement or any related document (the "Tax Documents") setting forth the expected use and investment of the proceeds of the Bond and containing such covenants as may be necessary in order to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including the provisions of Section 148 of the Code and applicable regulations related to • "arbitrage bonds." The Town covenants that the proceeds from the issuance and sale of the Bond will be invested and expended as set forth in the Tax Documents, to be delivered simultaneously with the issuance and delivery of the Bond and that the Town shall comply with the other covenants and representations contained therein. Any of the Mayor, Vice Mayor and the Town Manager of the Town is authorized to execute and deliver on behalf of the Town such other instruments, documents or certificates, and to do and perform such things and acts, as they shall deem necessary or appropriate to can•y out the transactions authorized by this resolution or contemplated by the Bond, and all of the foregoing, previously done or performed by such officers of the Town, are in all respects approved, ratified and confirmed. Section 10. Payment of the Bond and Other Amounts. The Town shall pay promptly, as provided herein, the principal of, premium, if any, and interest on the Bond, except to the extent such payment is made from the proceeds of the Bond. Nothing in the Bond or in this resolution shall be deemed to create or constitute an indebtedness of the Commonwealth of Virginia or any political subdivision thereof other than the Town, or a pledge of the full faith and credit of the Commonwealth of Virginia or of any political subdivision thereof other than the Town. Section 11. Pledge of Full Faith and Credit. For the prompt payment of the principal of and premium, if any, and the interest on the Bond as the same shall become due, the full faith and credit of the Town are hereby irrevocably pledged. In each year while the Bond shall be outstanding there shall be levied and collected in accordance with law an annual ad valorem tax upon all taxable property in the Town subject to local taxation sufficient in amount to provide for the payment of the principal of and premium, if any, and the interest on the Bond as such principal, premium, if any, and interest shall become due, which tax shall be without limitation as to rate or amount and in addition to all other taxes • authorized to be levied in the Town, to the extent other funds of the Town are not lawfully available and appropriated for such purpose. Section 12. Contract with Bondholder. The provisions of this resolution shall constitute a contract between the Town and the bondholder for so long as any principal of, premium, if any, or interest on the Bond are outstanding. This resolution shall be construed in accordance with and governed by the laws of the Commonwealth of Virginia. Any litigation between the Town and the bondholder concerning the Bond or this resolution, unless otherwise agreed in writing by them, shall be subject to the jurisdiction and venue of the Circuit Court for the County of Pulaski, Virginia, upon service of process made in accordance with the statutes of the Commonwealth of Virginia. Section 13. Authority of Officers and Agents. The officers and agents of the Town shall do all acts and things required by them of this resolution and the Bond for the complete and punctual performance of all the terms, covenants and agreements contained therein. The appropriate officers of the Town are further authorized and empowered to take such other action as they may consider necessary or desirable to carry out the intent and purpose of this resolution, and the issuance of the Bond. Section 14. Limitation of Liability of Officials of Town. No covenant, condition or agreement contained herein shall be deemed to be a covenant, agreement or obligation of an officer, employee or agent of the Town in his or her individual capacity, and no officer of the Town executing the Bond shall be liable personally on the Bond or be subject to any personal liability or • accountability by reason of the issuance thereof. No officer, employee or agent of the Town shall • incur any personal liability with respect to any other action taken by him or her pursuant to this resolution, provided he or she acts in good faith. Section 15. Conditions Precedent. Upon the issuance of the Bond, all acts, conditions and things required by the Constitution and statutes of the Commonwealth of Virginia or this resolution to have happened, exist and to have been performed precedent to or in the issuance of the Bond shall have happened, exist and have been performed. Section 16. Headings. Any headings in this resolution are solely for convenience of reference and shall not constitute a part of the resolution nor shall they affect its meaning, construction or effect. Section 17. Severability. If any court of competent jurisdiction shall hold any provision of this resolution to be invalid and unenforceable, such holding shall not invalidate any other provision hereof. Section 18. Effective Date. This resolution shall take effect immediately. Section 19. Filing of Resolution. The Clerk is hereby authorized and directed to see to the prompt filing of a certified copy of this resolution with the Circuit Court of Pulaski County, Virginia. • • • EXHIBIT A FORM OF BOND REGISTERED REGISTERED No. R-_ UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA TOWN OF PULASKI GENERAL OBLIGATION PUBLIC IMPROVEMENT BOND, SERIES DATED DATE REGISTERED OWNER: PRINCIPAL AMOUNT: The TOWN OF PULASKI, a political subdivision of the Commonwealth of Virginia (the "Town"), for value received, acknowledges itself indebted and promises to pay to the registered owner of this Bond (the "Bondholder"), or registered assigns or legal representative, the principal sum stated above, together with interest on the unpaid principal at the per annum rate of _%. Principal of and interest on this Bond are due and payable as follows: [Interest Rate and Payment Provisions] Principal, premium, if any, and interest on this Bond are payable in lawful money of the United States of America. Interest on this Bond accrues from the Dated Date stated above and is computed on the basis of a 365-day year over the actual number of days elapsed. The principal of and interest on this Bond, without the presentation or surrender hereof, are payable by check or draft mailed to the registered owner of this Bond at the address that appears on the 15th day of the month preceding each interest payment date on the registration books kept by the • Town Manager of the Town, as registrar (the "Registrar"). Upon final payment, this Bond shall be sun-endered to the Registrar for cancellation. This Bond has been authorized and issued under the Virginia Public Finance Act of 1991, Chapter 26, Title 15.2, Code of Virginia of 1950, as amended (the "Public Finance Act"), and a resolution adopted (the "Bond Resolution") by the Council of the Town under the Public Finance Act. The Town will use the proceeds of the issuance and sale of this Bond, along with other available Town funds, to finance the costs of improvements to the industrial park of the Town and the costs of issuing this Bond. The full faith and credit of the Town are irrevocably pledged for the payment of the principal of and the premium, if any, and interest on this Bond. The resolution adopted by the Council of the Town authorizing the issuance of this Bond provides, and Section 15.2-2624, Code of Virginia 1950, as amended, requires, that there shall be levied and collected an annual tax upon all taxable property in the Town subject to local taxation sufficient to provide for the payment of the principal, premium, if any, and interest on this Bond as the same shall become due, which tax shall be without limitation as to rate or amount and shall be in addition to all other taxes authorized to be levied in the Town, to the extent other funds of the Town are not lawfully available and appropriated for such purpose. NOTHING IN THIS BOND OR THE BOND RESOLUTION SHALL BE DEEMED TO CONSTITUTE A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIlZGINIA OR ANY OF ITS POLITICAL SUBDIVISIONS, OTHER THAN THE TOWN. THE • ISSUANCE OF THE BOND SHALL NOT DIRECTLY, INDIlZECTLY OR CONTINGENTLY OBLIGATE THE COMMONWEALTH OF VIRGINIA OR ANY OF ITS POLITICAL SUBDIVISIONS, OTHER THAN THE TOWN, TO PLEDGE ITS FAITH AND CREDIT OR LEVY ANY TAXES FOR THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, AND INTEREST ON THIS BOND OR OTHER COSTS INCIDENT TO IT OR MAKE ANY APPROPRIATION FOR ITS PAYMENT. Reference is made to the Bond Resolution for a description of the provisions, among others, with respect to the nature and extent of the security for the Bond, the Town's rights, duties and obligations, the rights of the registered owner of the Bond and the terms upon which the Bond is issued and secured. This Bond shall be subject to redemption or prepayment in accordance with the following provisions: [Redemption Provisions] If this Bond shall be called for partial redemption, upon its surrender a new Bond representing the unredeemed balance of the principa] amount will be issued to its registered owner. Each of the following shall be a "Rate Adjustment Event" for purposes of this Bond: • • (1) a change in the Internal Revenue Code of 1986, as amended (the "Code") or an administrative or judicial interpretation of the Code (collectively, a "Code Change"): (a) subjects any payment of interest or principal, or any amount in respect of or measured in whole or in part by reference to interest on or principal of this Bond or any amount of interest on indebtedness attributable or deemed to be attributable directly or indirectly to the purchase or carrying of this Bond, to: (i) a preference or alternative minimum tax (meaning a tax imposed by Section 55-59A of the Code, as amended from time to time, or any successor sections thereto or any similar provisions), (ii) an excess profits tax, or (iii) other federal tax that changes the basis of taxation of the payments of interest on or principal of this Bond, or interest on indebtedness attributable or deemed to be attributable directly or indirectly to the purchase or carrying of this Bond, to the Bondholder or affects any method used or calculation involved in determining any federal tax, or • (b) adversely affects the deductibility or other tax treatment of losses, reserves, interest expense or any other amounts attributable or deemed to be attributable directly or indirectly to the purchase or carrying of this Bond or otherwise relating or allocable to the tax-exempt interest received on this Bond, or (2) a Determination of Taxability (defined below) occurs. If a Rate Adjustment Event occurs, then the interest rate on this Bond, from and after the date (the "Rate Adjustment Date") as of which the payment or amount became subject to such preference, alternative minimum, excess profits or other federal tax, or such deductibility or other tax treatment was adversely affected, or of the Event of Taxability, will adjust to that rate (the "Tax Consequences Rate") as will result in the tax equivalent yield to the Bondholder on this Bond after the Rate Adjustment Event equaling the tax equivalent yield to the Bondholder on this Bond before the Rate Adjustment Event. Receipt by the Town from the holder hereof of a statement setting forth the Rate Adjustment Event, the Rate Adjustment Date, the Tax Consequences Rate, and the amount of additional interest, if any, then due and the basis for the determination of such additional interest, shall be conclusive and binding upon the Town absent manifest error. The provisions of this paragraph apply whether a Code Change occurs before or after maturity, redemption or other payment or prepayment of this Bond or any sale or other transfer of this Bond to any person, firm or corporation and whether such change has an effective date before or after the issuance of this Bond. n LJ • For purposes of this Bond: "Determination of Taxability" shall mean: (i) any determination, decision or decree made in regard to Section 103 of the Code by the Commissioner of the Internal Revenue Service or any officer of the Internal Revenue Service empowered to make such determinations, or by any court of competent jurisdiction, to the effect that the interest payable on this Bond is includable in the gross income of the Bondholder for federal income taxation purposes, or (ii) a determination by the Town that interest payable on the Bond is includable in gross income of the Bondholder for purposes of federal income taxation; provided, however, that the Town shall have no obligation to make such a determination and any such determination by the Town shall be confirmed in an opinion of nationally-recognized bond counsel. "Determination of Taxability" shall not include the direct or indirect inclusion of interest received on this Bond by the Bondholder in any calculation of income subject to any alternative minimum tax. "Event of Taxability" shall mean the date as of which the interest payable on this Bond becomes includable in the gross income of the Bondholder (for federal income taxation purposes) with respect to a Determination of Taxability. "Supplemental Interest" shall mean the increment of additional interest payable on this Bond as a result of a Rate Adjustment Event. • For Supplemental Interest caused by an Event of Taxability, the interest accruing before a Determination of Taxability shall be immediately due and payable on the date of the Determination of Taxability, and the interest accruing on and after a Determination of Taxability shall be payable on the last business day of each calendar quarter in addition to any regularly scheduled installments of principal and interest. Despite anything contained in this Bond to the contrary, the interest rate on this Bond shall in no event exceed 12°Io per annum. The Town shall pay all amounts, if any, that may be necessary to reimburse the Bondholder for any interest, penalties or other charges assessed by the Internal Revenue Service against such Bondholder by reason of the Bondholder's failure to include interest on this Bond in its federal gross income during the period following the Event of Taxability until such Bondholder shall be notified of a Determination of Taxability by the Internal Revenue Service or the Town (the "Unpaid Tax Penalties"). Unpaid Tax Penalties shall not include any amounts representing taxes which should have been paid to the Internal Revenue Service as a result of a Determination of Taxability, it being expressly intended that such taxes be paid from the Supplemental Interest. Unpaid Tax Penalties shall not include any penalties imposed as a result of a Bondholder's willful or fraudulent conduct. The Town shall make payments of Supplemental Interest and Unpaid Tax Penalties to each person who presents written proof satisfactory to the Town that on or after the Event of Taxability, such person was a Bondholder. It is expressly intended that to the extent interest received on this Bond may become subject to federal income taxation as a result of a Determination of Taxability, the • • Supplemental Interest and Unpaid Tax Penalties which would have been payable to the Bondholder but for the payment or authorized transfer of this Bond shall continue, notwithstanding the payment or transfer, as an obligation of the Town. The Bondholder by its acceptance of this Bond agrees, if requested by the Town, to have an attorney-in-fact, qualified to practice before the Internal Revenue Service, designated by the Town for the purpose of appealing a Determination of Taxability, provided the Town provides indemnity reasonably satisfactory to the Bondholder to indemnify it against any additional tax liability, penalties or interest that may result from any such appeal and agrees to pay legal fees and costs incurred in prosecuting such appeal. If a final non-appealable judgment or order is entered finding that no Event of Taxability has occurred, the Bondholder shall reimburse to the Town all Supplemental Interest which has been paid on this Bond, and no additional Supplemental Interest shall be payable unless and until an Event of Taxability shall subsequently occur. Despite anything in this Bond to the contrary, the right of the Town to challenge any Determination of Taxability shall terminate if no such final judgment or order shall have been entered within 90 days after the occurrence of the Determination of Taxability, unless the Town shall provide the Bondholder with security acceptable to such Bondholder, in which case the Town's right to challenge the Determination of Taxability will continue so long as such challenge is being pursued with due diligence and through appropriate proceedings. Upon surrender for transfer or exchange of this Bond at the office of the Registrar, the Town • shall execute and deliver in the name of the transferee or transferees a new Bond or Bonds in an aggregate principal amount equal to the Bond surrendered and having principal installments or maturities and bearing interest at rates corresponding to the maturities of and the interest rates on the installments of principal of this Bond then unpaid, subject in each case to such reasonable regulations as the Council of the Town or the Registrar may prescribe. If presented for transfer or exchange the Bond shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and substance reasonably satisfactory to the Registrar, duly executed by the registered owner or by his or her duly authorized attorney-in-fact or legal representative. No Bond may be registered to bearer. Any such exchange shall be at the Town's expense, except that the Registrar may charge the person requesting such exchange the amount of any tax or other governmental charge required to be paid with respect to it. The Town shall treat the registered owner of this Bond as the person exclusively entitled to payment of principal, premium, if any, and interest and the exercise of all other rights and powers of the owner. All acts, conditions and things required to happen, exist or be performed precedent to and in the issuance of this Bond have happened, exist and have been performed. IN WITNESS WHEREOF, the Town of Pulaski has caused this Bond to be signed by the manual signature of its Mayor, its seal to be impressed on it and attested by • • the manual signature of its Clerk, and this Bond to be dated the date stated above. (SEAL) TOWN OF PULASKI, VIRGINIA By: ATTEST: [FORM-NOT FOR SIGNATURE) Clerk, Town of Pulaski • [FORM-NOT FOR SIGNATURE] Mayor, Town of Pulaski • ~~ :7 The undersigned Clerk of the Council of the Town of Pulaski (the "Council"), hereby certifies that the foregoing constitutes a true and correct copy of a resolution adopted at a meeting of the Council held on June 16, 2009. I hereby further certify that such meeting was a regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present. I further certify that the minutes of such meeting reflect the attendance of the members and the voting on the foregoing resolution as follows: Member Attendance Vote Jeffre S. Worrell, Ma or Present N/A H. M. Kidd Present A e David L. Clark Present A e G. Clevin er, II Present A e Joel B. Burchett, Jr. Absent Absent Robert Bo Present A e Mor an Welker Present A e • WITNESS MY HAND and the seal of the Council of the Town of Pulaski, Virginia, this 25th day of June, 2009. (SEAL) ,/~ ~~-~--- Clerk • _t - • The undersigned Clerk of the Council of the Town of Pulaski (the "Council"), hereby certifies that the foregoing constitutes a true and correct copy of a resolution adopted at a meeting of the Council held on June 16, 2009. I hereby further certify that such meeting was a regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present. I further certify that the minutes of such meeting reflect the attendance of the members and the voting on the foregoing resolution as follows: Member Attendance Vote Jeffre S. Worrell, Ma or Present N/A H. M. Kidd Present A e David L. Clark Present A e L G. Clevin er, II Present A e Joel B. Burchett, Jr. Absent Absent Robert Bo Present A e Mor an Welker Present A e WITNESS MY HAND and the seal of the Council of the Town of Pulaski, Virginia, this 25th day of June, 2009. • (SEAL) ~' Clerk