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HomeMy WebLinkAbout2012-05RESOLUTION 2012-OS RESOLUTION AUTHORIZING THE ISSUANCE OF A GENERAL OBLIGATION REFUNDING BOND, OF THE TOWN OF PULASHI, IN A PRINCIPAL AMOUNT NOT TO EXCEED $3,950,000, AND PROVIDING FOR THE FORM, DETAILS AND PAYMENT THEREOF AND THE REFUNDING OF CERTAIN PRIOR INDEBTEDNESS OF THE TOWN AND AUTHORIZING CERTAIN RELATED ACTIONS The Council of the Town of Pulaski, Virginia (the "Council") has determined that it is in the best interest of the Town of Pulaski (the "Town") to borrow an amount not to exceed $3,950,000 to refinance existing indebtedness of the Town consisting of the following bonds (the "Prior Bonds"): $574,600 General Obligation Sewer Bond, Series of 1995; $572,800 General Obligation Water Bond, Series of 1995; $698,200 General Obligation Sewer Bond, Series of 2001; $401,600 General Obligation Water Bond, Series of 2002; $3,000,000 General Obligation Public Improvement Bonds, Series of 2002 (with respect to those bonds issued as a part thereof having a maturity after July 1, 2012); and $821,000 General Obligation Public Improvement Bond, Series 2011 The indebtedness will be evidenced by a general obligation bond of the Town, as authorized by this resolution. Davenport & Company, as the Town's financial advisor, has recommended that the Town sell its refunding bond to National Bank of Blacksburg pursuant to the terms of its proposal set forth in its letter dated March 9, 2012. The Council desires to provide for the issuance of its refunding bond, the proceeds of which will be used to refund the Prior Bonds and pay the costs of issuing the refunding bond, to provide for the form, details and payment of the refunding bond and the refunding of the Prior Bonds, and to authorize certain related actions. BE IT RESOLVED BY THE COUNCIL OF THE TOWN OF PULASICI, VIRGINIA: Section 1.1. Authorization of Bond. It is hereby determined to be advisable, necessary and expedient for the Town to borrow an amount not to exceed $3,950,000 to provide funds, together with other funds that may be available, to refund the Prior Bonds and to pay the costs of issuing the bond authorized by this resolution. Pursuant to the Constitution of Virginia and the Public Finance Act of 1991, there is hereby authorized to be issued and sold a general obligation bond of the Town in an aggregate principal amount not to exceed $3,950,000 (the "Bond"). The Bond shall be designated the "Town of Pulaski, Virginia, General Obligation Refunding Bond, Series 2012." The Bond shall be a general obligation of the Town, the principal of, premium, if any, and interest on which are payable from ad valorem taxes to be levied without limitation as to rate or amount on all property in the Town subject to taxation, to the extent other funds ofthe Town are not available and appropriated for such purpose, and a pledge of the full faith and credit of the Town. To the extent permitted by Section 15.2-2601 of the Public Finance Act of 1991 (Chapter 26, Title 15.2, Code of Virginia of 1950, as amended) (the "Act"), the Council hereby elects to issue the Bond under the provisions of the Act without regard to the requirements, restrictions or other provisions contained in any charter or local or special act. Section 1.2. Details of Bond. The Bond shall be issued as a fully registered bond without coupons, dated the date of its delivery. The Bond shall be in the principal amount and shall beaz interest at the rate or rates, and the principal thereof and interest thereon shall be repayable in the amounts, all as established in accordance with Section 1.3 of this resolution. Interest shall be computed on the basis of a 360-day yeaz consisting of 30-day months. Section 1.3. Principal Amount; Payment Dates and Other Details ofthe Bond. Each ofthe Mayor and Vice Mayor of the Town is hereby authorized and directed to determine, before the issuance of the Bond, the principal amount of the Bond (provided such amount does not exceed $3,950,000), the interest rate or rates thereon or the means for determining such rate or rates (provided that no such rate shall exceed 3.85% per annum), and the due dates and amounts ofthe installments of principal of and interest on the Bond (provided that the final maturity of the Bond shall not exceed twenty-five (25) years from the date of the Bond), and the provisions, if any, for optional redemption of the Bond, and the execution of the Bond as described in Section 1.5 of this resolution shall conclusively evidence the same as having been so determined as authorized by this resolution. Section 1.4. Optional Redemption. The Bond shall be subject to redemption prior to maturity at the option of the Town upon the terms stated in the Bond. Section 1.5. Execution of Bond. The Bond shall bear the manual or facsimile signatures of the Mayor or V ice Mayor of the Town and shall bear a manually impressed or imprinted facsimile of the seal of the Town, attested by the manual or facsimile signature of the Clerk of the Town. In case any officer whose signature shall appeaz on any 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. Any Bond may be signed by such persons as at the actual time of the execution thereof shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. Section 1.6. Form of Bond. The Bond shall be in substantially the following form, with such appropriate variations, insertions and omissions as shall be consistent herewith: No. R- UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA TOWN OF PULASIQ General Obligation Refunding Bond Series 2012 Dated Date Registered Owner: Principal Amount: DOLLARS The Town of Pulaski, a political subdivision ofthe Commonwealth of Virginia (the "Town"), for value received, hereby acknowledges itself indebted and promises to pay to the registered owner named above, or registered assigns, the principal sum shown above and to pay to the registered owner hereof, interest hereon until payment in full at the rate or rates per annum determined as provided below, payable as follows: [to be completed at closing] [The amount of interest accrued on this bond shall be due and payable on August 1, 2012, and on February 1 and August 1 of each year thereafter. Principal of this bond shall be payable annually on each August 1 commencing August 1, 2012 in the amounts and on the dates as follows: Interest on this bond shall be computed based on a 360-day yeaz consisting of twelve 30-day months. From the date of this bond until August 1, 2027 (the "Reset Date"), this bond shall beaz interest at the per annum rate of 2.85%. On and after the Reset Date, this bond shall beaz interest at a per annum rate equal to the lesser of (i) 3.85% or (ii) .] Any payment on this bond shall be applied first to interest accrued to such payment date and then to principal. Principal, premium, if any, and interest shall be payable in lawful money ofthe United States of America to the registered owner, at its address as it appeazs on the registration books kept for that purpose at the principal office of the Clerk of the Town, who has been appointed Registrar. Incase the date of maturity of the principal of this bond or the date fixed for the redemption of this bond shall be a date on which banking institutions are authorized or obligated by law to close at the place where the principal office of the Registrar is located, then payment ofprincipal, premium, if any, and interest need not be made on such date, but may be made on the next succeeding date which is not such a date at the place where the principal office of the Registrar is located, and if made on such next succeeding date no additional interest shall accrue for the period after such date of maturity or date fixed for redemption. This bond has been authorized by a resolution duly adopted by the Council of the Town on April 3, 2012 (the "Resolution"), and is issued pursuant to the Constitution and applicable statutes of the Commonwealth of Virginia, including the Public Finance Act of 1991 (Chapter 26, Title 15.2, Code of Virginia of 1950, as amended) to provide funds, together with other funds that may be available, to refund certain bonds of the Town, and to pay the cost of issuing this bond. Copies of the Resolution are on file at the office of the Registrar. Reference is hereby made to the Resolution and any amendments thereto for the provisions, among others, describing the pledge of the full faith and credit of the Town and covenants securing this bond, the nature and extent of the security, the terms and conditions upon which this bond is issued, the rights and obligations of the Town and the rights of the holder of this bond. This bond and the premium, ifany, and interest thereon are payable from ad valorem taxes to be levied without limitation as to rate or amount on all property in the Town subject to taxation to the extent other funds of the Town are not available and appropriated for such purpose, and a pledge of the full faith and credit of the Town. This bond and the premium, ifany, and interest hereon shall not be deemed to constitute a pledge of the faith and credit of the Commonwealth of Virginia or any political subdivision thereof, except the Town. Neither the faith and credit nor the taxing power of the Commonwealth of Virginia or any political subdivision thereof, except the Town, is pledged to the payment of the principal of, or premium, ifany, and interest on, this bond. The principal of this bond is subject to prepayment in whole or in part at anytime at the option of the Town without penalty or premium. Prepayments of installments of principal shall not affect the obligation of the Town to pay the remaining installments payable as provided above. This bond shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia. All acts, conditions and things required by the Constitution and statutes of the Commonwealth of Virginia to happen, exist or be performed precedent to and in the issuance ofthis bond have happened, exist and have been performed, and this bond, together with all other indebtedness of the Town, is within every debt and other limit prescribed by the Constitution and statutes of the Commonwealth of Virginia. IN WITNESS WHEREOF, the Town has caused this bond to bear the manual or facsimile signature of the [Vice] Mayor of the Council of the Town, its seal to be imprinted or impressed hereon and attested by the manual or facsimile signature of the Clerk of the Council of the Town, and this bond to be dated the dated date shown above. SEAL Attest: [SPECIMEN - DO NOT SIGN] [SPECIMEN - DO NOT SIGN] Clerk, Town of Pulaski Mayor, Town of Pulaski Section 1.7. Re istraz. The Clerk of the Town is hereby appointed Registraz for the Bond. Section 1.8. Re¢istration. Transfer and Exchan~. The Town shall cause books for the registration and transfer of the Bond to be kept at the principal office of the Registrar, and the Town hereby instructs the Registraz to keep such books and to make such registrations and transfers under such reasonable regulations as the Town or the Registrar may prescribe. Transfer of the Bond may be registered upon books maintained for this purpose at the office of the Registrar. Prior to due presentment for registration of transfer the Registrar shall treat the registered owner 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. Upon surrender for transfer or exchange of any Bond at such office, the Town shall execute and deliver in the name of the transferee or transferee a new Bond for the aggregate principal amount which the registered owner is entitled to receive, subject in each case to such reasonable regulations as the Town or the Registraz may prescribe. Any Bond presented for transfer, exchange, or payment, (if so required by the Town or the Registrar) shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, inform and substance reasonably satisfactory to the Town and the Registrar, duly executed by the registered owner or by his duly authorized attorney-in-fact or legal representative. No Bond may be registered to beazer. The new Bond delivered upon any transfer or exchange shall be a valid obligation of the Town, evidencing the same debt as the Bond sunrendered, shall be secured by this Resolution and entitled to all of the security and benefits hereof to the same extent as the Bond surrendered. Section 1.9. Chazees for Exchange or Transfer. No service charge shall be made for any exchange or transfer of the Bond, but the Town may require payment of a sum sufficient to cover any tax or other govenunental charge that may be imposed in relation thereto. Section 1.10. Prenazation, Awazd, and Sale of Bond. The proposal by National Bank of Blacksburg dated Mazch 9, 2012 to purchase the Bond has been presented to Council with the recommendation of Davenport & Company, the Town's financial advisor. The Council hereby determines that it will be in the best interests of the Town and the Commonwealth of Virginia to sell the Bond to National Bank of Blacksburg, at a purchase price of paz. The Mayor, Vice Mayor and the Clerk of the Town aze hereby authorized and directed to take all proper steps to have the Bond prepared and executed in accordance with the terms ofNational Bank of Blacksburg's proposal and this resolution. Section 1.11. Anplication of Proceeds of Bond. The proceeds derived from the sale of the Bond shall be paid as follows: (a) a portion of such proceeds shall be paid to the holders of the Prior Bonds to refund the Prior Bonds in full on the eazliest such date or dates as permitted therefor; and (b) the balance of such proceeds shall be paid to the payment of the expenses reasonably incurred in issuing the Bond. The proceeds may be paid initially to the Town for deposit in the Town's general fund and then applied as described above. Each of the Treasurer and the Town Manager of the Town is authorized and directed to receipt for such proceeds and to provide that the proceeds described in subclauses (a) and (b) above are applied as required by this resolution. ARTICLE II PARTICULAR COVENANTS Section 2.1. Pavment of Bond. The Town shall pay promptly, as provided herein, the principal of, premium, if any, and interest on 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 2.2. Tax Rate Covenant. The Council hereby covenants and agrees that so long as any of the Bond is outstanding, to the extent other fends aze not lawfully available and appropriated for timely payment of the Bond, the Council will levy and collect annually over and above all other taxes authorized or limited by law, an ad valorem tax, without limitation as to rate or amount, on all the taxable property in the Town in an amount sufficient to pay principal of, premium, if any, and interest on the Bond as the same become due and payable . Section 2.3. Maintenance ofTax-Exempt Status. (a) No Adverse Action: The Town shall not take any action that would adversely affect the exemption of interest on the Bond from Federal income taxation. The Town shall, to the extent permitted by Virginia law, take all actions necessary to maintain the tax-exempt status of interest on the Bond under Federal or Virginia law, including all actions necessary to comply with Section 103 or Sections 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code") or the regulations promulgated by the Treasury Department with respect thereto. Without limiting the generality ofthe foregoing, the Town shall comply with any provision of law which may require the Town at any time to rebate to the United States any part of the earnings derived from the investment of the gross proceeds of the Bond, unless the Town receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent interest on the Bond from being includable in the gross income for Federal income tax purposes of the registered owners thereof under existing law. (b) Arbitraee/Investment: The Town shall not take or approve any action, investment or use of the proceeds of the Bond which would cause the Bond to be "an azbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder. The Town, barring unforeseen circumstances, shall not request or approve the use of the proceeds of the Bond other than in accordance with the Town's "non-azbitrage"certificate delivered at the time of the issuance of the Bond. (c) Tax Compliance Agreement. Each of the Mayor, Vice Mayor and Town Manager is hereby authorized and directed to execute and deliver a tax compliance agreement regarding any matters described in Section 2.3(a) and (b) and any other matters reasonably required by the initial purchaser of the Bond, which agreement shall be in such form and content as may be required by bond counsel to the Town. ARTICLE III QUALIFIED TAX EXEMPT OBLIGATION Section 3.1 Designation as Oualified 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(6)(3) of the Code. The Town hereby represents and covenants as follows: (i) The Council will in no event designate more than $10,000,000 of obligations as qualified tax-exempt obligations in the current calendaz year, including the Bond, for the purpose of Section 265(6)(3) of the Code; (ii) The Town, all its "subordinate entities," within the meaning of Section 265(6)(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 $10,000,000 oftax-exempt obligations in the current calendar year (not including "private activity bonds," as defined in Section 141 of the Code, other than "qualified 501(c)(3) bonds," as defined in Section 145 of the Code), including the Bond; (iii) Barring circumstances unforeseen as of the date ofdelivery 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 current calendar year, result in the Town and such other entities having issued a total ofmore than $10,000,000 of tax-exempt obligations in such year (not including private activity bonds, other than qualified 501(c)(3) bonds), including the Bond; and (iv) The Council has no reason to believe that the Town and such other entities will issue in the current calendar year tax-exempt obligations in an aggregate amount that will exceed such $10,000,000 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. ARTICLE IV MISCELLANEOUS Section 4.1. Contract with Bondholders. The provisions of this resolution shall constitute a contract between the Town and the holder of the Bond for so long as the Bond is outstanding. Section 4.2. Authority of Officers and Aeents. 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 4.3. 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 4.4. Conditions Precedent. Upon the issuance ofthe 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 4.5. Non-Arbitrage and Other Certificates. The Mayor and Vice Mayor and such other officers as may be requested are hereby authorized to sign appropriate certificates setting forth, among other things, the expected use and investment of the proceeds of the Bond in order to show that such expected use and investment will not violate the provisions of Section 148 ofthe Code and regulations issued pursuant thereto, applicable to "arbitrage bonds." Such certificates may also contain certain elections with regazd to Section 148 of the Code and such officers aze hereby authorized to make such elections on behalf of the Town and the Council. Section 4.6. Headines. 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 4.7. Severabiliri. 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 4.8. Effective Date. This resolution shall take effect immediately. All ordinances, resolutions or parts thereof in conflict herewith are hereby repealed. Section 4.9. Filin of Resolution. The Clerk of the Council is hereby authorized and directed to see to the immediate filing of a certified copy of this resolution with the Clerk of the Circuit Court of Pulaski County, Virginia, pursuant to Section 15.2-2607 of the Public Finance Act of 1991. RESOLUTION 2012-OS The undersigned Clerk of the Council of the Town of Pulaski, Virginia, hereby certifies that the foregoing constitutes a true and correct copy of Resolution 2012-05, adopted at a meeting of the Council of the Town of Pulaski, held on April 3, 2012. I hereby further certify that such a meeting was a regulaz meeting, duly called and held, and that during the consideration of the foregoing resolution, a quorum was present. I hereby further certify that the minutes of such meeting reflect how each member of Council voted with respect to the adoption of the foregoing resolution as follows: Member Attendance Vote Jeffre S. Worrell, Ma or Present N/A David L. Clazk Present A e H. M. Kidd Present A e Mor an P. Welker Present A e Robert A. Bo Present A e Gre o C. East Present A e Jose h K. Goodman Present A e SEAL /~C....l /tC A, ~~. Clerk, Town of Pulaski ssaao77~z 015298.0007