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HomeMy WebLinkAbout2019-33Resolution 2019-33 RESOLUTION AUTHORIZING THE ISSUANCE OF A GENERAL OBLIGATION BOND OF THE TOWN OF PULASKI, IN A PRINCIPAL AMOUNT NOT TO EXCEED $420,000, AND PROVIDING FOR THE FORM, DETAILS AND PAYMENT OF THE BOND AND AUTHORIZING CERTAIN RELATED ACTIONS The Town Council (the "Council") of the Town of Pulaski, Virginia (the "Town") has determined it necessary and expedient to purchase a fire truck and make renovations to the Town's historic train station (collectively, the "Project") and to issue a general obligation bond of the Town to provide funds, together with other available funds, to finance the costs of those undertakings. On October 1, 2019, the Council held a public hearing on the proposed bond issue in accordance with Section 15.2-2606 of the Public Finance Act of 1991. BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF PULASKI, VIRGINIA: ARTICLE I AUTHORIZATION AND FORM OF BOND Section I.I. Authorization of Bond. It is determined to be advisable, necessary and expedient for the Town to borrow an amount not to exceed $420,000 to provide funds, together with other funds that may be available, to pay for the Project and the cost of issuing the bond for the Project. Pursuant to the Constitution of Virginia and the Public Finance Act of 1991, there is authorized to be issued and sold a general obligation bond of the Town in a principal amount not to exceed $420,000 (the "Bond"). 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 of the 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 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 bear 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. Section 1.3. Principal Amount, Payment Dates and Amounts. Each of the Mayor, Vice Mayor and Town Manager of the Town is authorized and directed to determine, before the issuance of the Bond, the principal amount of the Bond, the interest rate thereon, and the due dates and amounts of the installments of principal of and interest on the Bond; however: (a) the principal amount of the Bond shall not exceed $420,000; (b) the interest rate on the Bond shall not exceed 2.111%; and (c) the final maturity of the Bond shall not be later than 12 years after the date of issuance of the Bond. 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 to the extent stated in the Bond. Each of the Mayor, Vice Mayor and Town Manager of the Town is authorized and directed to determine, before issuance of the Bond, whether the Bond, at the option of the Town, shall be subject to redemption prior to maturity in whole or in part, at such time or times, and with or without penalty or premium. 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 1.5. Execution of Bond. The Bond shall bear the manual or facsimile signature of the Mayor, Vice Mayor or Town Manager 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 Council. 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 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 variations, insertions and omissions as shall be consistent with this resolution: [FORM OF BOND TO BE COMPLETED AT CLOSING] No. R-1 $[amount] UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA TOWN OF PULASKI General Obligation Bond, Series 2019 Dated Date [date] 2 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 U.S. Bancorp Government Leasing and Finance, Inc. or its registered assigns, the principal sum of $[amount] and to pay to the registered owner hereof, interest on this bond until payment in full at the rate per annum of [amount]%, all payable as follows: On April 15 and October 15 of each year, commencing April 15, 2020, the amount of interest accrued on this bond but unpaid shall be due and payable. Installments of principal on this bond shall be due and payable on October 15 in the years and amounts as follows: [insert payment table with date and installment amount] On [date], the entire indebtedness evidenced by this bond, including all accrued but unpaid interest and all outstanding principal, shall be due and payable in full. Payments on this bond will be made without presentation or surrender of this bond except that the installment of principal and interest on this bond shall be made only upon presentation and surrender of this bond at the office of the Town Manager of the Town, who has been appointed Registrar. Interest on this bond shall be computed based on a 360 -day year consisting of twelve 30 -day months. 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 of the United States of America to the registered owner, (a) by check or draft mailed to such registered owner at its address as it appears on the registration books kept for that purpose at the office of the Town Manager of the Town, who has been appointed Registrar, or at such other address furnished in writing by such registered owner to the Registrar, or (b) by electronic transfer to such registered owner upon written notice to the Registrar from such registered owner containing the electronic transfer instructions (which shall be in the continental United States). In case 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 of principal, 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 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) (the "Act") and a resolution adopted under the Act by the Council of the Town on October 15, 2019 (the "Resolution"). This bond is issued and to provide funds, together with other funds that may be available, to finance costs of purchasing a fire truck for the Town and making renovations to the Town's historic train station and to pay costs of issuing this bond. A copy of the Resolution is on file at the office of the Registrar. Reference is made to the Resolution 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, if any, 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, if any, 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, if any, and interest on, this bond. No notation is required to be made on this bond of the payment of any principal of this bond. THEREFORE, THE FACE AMOUNT OF THIS BOND MAY EXCEED THE PRINCIPAL SUM REMAINING OUTSTANDING AND DUE UNDER THIS BOND. NOTHING IN THIS BOND OR THE BOND RESOLUTION SHALL BE DEEMED TO CONSTITUTE A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA OR ANY OF ITS POLITICAL SUBDIVISIONS, OTHER THAN THE TOWN. THE ISSUANCE OF THE BOND SHALL NOT DIRECTLY, INDIRECTLY 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. This bond may not be prepaid before December 1, 2020. This bond is subject to optional redemption before maturity at the sole option of the Town from any available monies at any time, in whole and not in part, on any date after December 1, 2020, at a redemption price equal to 100% of the outstanding principal amount of this bond, plus interest accrued to the date fixed for prepayment, plus a prepayment indemnity ("Prepayment Fee") equal to the greater of zero, or that amount, calculated on the date of prepayment ("Prepayment Date"), which is derived by subtracting: (a) the outstanding principal amount of this bond on such Prepayment Date from (b) the Net Present Value of the outstanding principal amount of the bond on such Prepayment Date; provided, however, that the Prepayment Fee shall not in any event exceed 103% of the outstanding principal balance of this bond. 4 "Net Present Value" shall mean the amount which is derived by summing the present values of each prospective payment of principal (including mandatory sinking fund redemptions) and interest which, without such full prepayment, could otherwise have been received by the holder of this bond (the "Holder") over the then remaining term of this bond. The individual discount rate used to present value each prospective payment of interest and/or principal shall be the Money Market Rate At Prepayment for the maturity matching that of each specific payment of principal and/or interest. "Money Market Rate At Prepayment" shall mean that zero-coupon rate, calculated on the Prepayment Date, and determined solely by the Holder, as the rate at which the Holder would be able to borrow funds in Money Markets for the prepayment amount matching the maturity of a specific prospective bond payment, adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation. A separate Money Market Rate At Prepayment will be calculated for each prospective interest and/or principal payment date. "Money Markets" shall mean one or more wholesale funding markets available to and selected by the Holder, including negotiable certificates of deposit, commercial paper, Eurodollar deposits, bank notes, federal funds, interest rate swaps or others. In calculating the amount of such Prepayment Fee, the Holder is hereby authorized by the Town to make such assumptions regarding the source of funding, redeployment of funds and other related matters, as the Holder may deem appropriate. The Holder's internal records of applicable interest rates shall be determinative in the absence of manifest error. The Town hereby acknowledges to the Holder that the Town shall be required to pay the Prepayment Fee with respect to any portion of the principal balance paid before its scheduled due date, whether voluntarily, involuntarily, or otherwise, including without limitation any principal payment made following default, demand for payment, collection proceedings, bankruptcy or other insolvency proceedings, or otherwise. Such Prepayment Fee shall at all times be an obligation as well as an undertaking by the Town to the Holder whether arising out of a voluntary or mandated prepayment. This bond shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia. Upon the failure of the Town to pay any installment of principal and interest within thirty (30) days of its due date, the registered holder of this bond shall at its option be entitled by notice to the Town to declare the entire indebtedness evidenced by this bond, including all accrued but unpaid interest and all outstanding principal, to be immediately due and payable in full. 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 Mayor, Vice Mayor or Town Manager of the Town, its seal to be imprinted or impressed this bond 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] Clerk, Town of Pulaski [SPECIMEN - DO NOT SIGN] Mayor, Town of Pulaski Section 1.7. Re isg tray. The Town Manager of the Town is appointed Registrar for the Bond. Section 1.8. Registration, Transfer and Exchange. The Town shall cause books for the registration and transfer of the Bond to be kept at the principal office ofthe Registrar, and the Town hereby instructs the Registrar 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 the 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 Registrar may prescribe. The 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, in form 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 bearer. The new Bond delivered upon any transfer or exchange shall be a valid obligation of the Town, evidencing the same debt as the Bond surrendered, 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. Charges 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 governmental charge that may be imposed in relation thereto. Section 1.10. Sale and Award of Bond, Disposition of Proceeds. (a) The proposal of U.S. Bancorp Government Leasing and Finance, Inc. (the "Purchaser") to purchase the Bond for an amount equal to the principal amount ofthe Bond has been presented to Council at this meeting. Such proposal is determined, after mature consideration ofthe methods of sale of the Bond and current conditions of the municipal bond market, to be in the best interest ofthe Town, and the Bond is awarded to the Purchaser. Each of the Mayor, Vice Mayor and Town Manager of the Town is authorized and directed to take all proper steps to have the Bond prepared and executed in accordance with the terms of this resolution and to be delivered to the Purchaser upon payment of the purchase price of the Bond. (b) Proceeds derived from the sale of the Bond shall be paid to, or at the direction of, the Town Manager who shall promptly deposit the funds in an appropriate interest bearing account. Such proceeds shall be accounted for through a fund designated "2019 Bond Fund" to be applied to the costs of the Project and the costs of issuance of the Bond. Withdrawals shall be made from the 2019 Bond Fund only after the Town Manager or his designee has certified that the amount 7 being withdrawn is being used to pay bona fide costs of the Project or bona fide costs of issuing the Bond. (c) The Town Manager shall preserve at his office accurate records available at all times which show that the proceeds from the sale of the Bond and investment earnings thereon were used for the purposes set forth in this section. Barring unforeseen circumstances, any balance of the original proceeds of the Bond and investment earnings thereon remaining in the 2019 Bond Fund upon the earlier of substantial completion of the Project or three years after the issuance date of the Bond shall be used only for redemption of the Bond. (d) The Town has received and reviewed the Information Statement describing the State Non -Arbitrage Program ofthe Commonwealth of Virginia ("SNAP") and the Contract Creating the State Non -Arbitrage Program Pool (the "Contract"), and the Council has determined to authorize the Town Manager and the Finance Director of the Town, if and as desirable, to use SNAP in connection with the investment of any proceeds of the Bond. The Council acknowledges the Treasury Board of the Commonwealth of Virginia is not, and shall not be, in any way liable to the Town in connection with SNAP, except as otherwise provided in the Contract. ARTICLE H PARTICULAR COVENANTS Section 2.1. Payment 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 covenants and agrees that so long as any of the Bond is outstanding, to the extent other funds are 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 of Tax -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 of the foregoing, the Town shall comply with any provision of law that 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) Arbitrage/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 arbitrage 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 -arbitrage" certificate delivered at the time ofthe issuance of the Bond. (c) Tax Compliance Agreement. Each of the Mayor, Vice Mayor and Town Manager is 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 MISCELLANEOUS Section 3.1. Contract with Bondholder. 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 3.2. 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 3.3. 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 3.4. 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 3.5. 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 of the Code and regulations issued pursuant thereto, applicable to "arbitrage bonds." Such certificates may also contain certain elections with regard to Section 148 of the Code and such officers are hereby authorized to make such elections on behalf of the Town and the Council. Section 3.6. 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 3.7. 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 3.8. Filing of Resolution. The Clerk of the Council is authorized and directed to see to the immediate filing of a certified copy of this resolution with the Circuit Court of Pulaski County, Virginia, pursuant to Section 15.2-2607 of the Public Finance Act of 1991. This resolution is effective upon adoption and is hereby adopted this 15`x' day of October 2019 by the duly recorded vote of the Town Council of the Town of Pulaski, Virginia, as follows: Member Vote Lane R. Penn Aye Brooks R. Dawson Aye Gregory C. East Aye Joseph K. Goodman Aye G. Tyler Clontz Aye James A. Radcliffe Aye Attest: David N. Quesenberry Clerk of Council The Town o as c , Virginia 10 vid L. Clark, Mayor Oct 10, 2019 9:51 am Prepared by Davenport Public Finance (Finance 8.001 Town of Pulaski:2019 1 -FINAL) Page 4 BOND DEBT SERVICE Town of Pulaski, VA Series 2019 GO Bond Final Numbers Period Ending Principal Coupon Interest Debt Service 06/30/2020 4,211.45 4,211.45 06/30/2021 38,000 2.111% 8,465.11 46,465.11 06/30/2022 39,000 2.111% 7,652.38 46,652.38 06/30/2023 40,000 2.111% 6,818.54 46,818.54 06/30/2024 41,000 2.111% 5,963.58 46,963.58 06/30/2025 42,000 2.111% 5,087.51 47,087.51 06/30/2026 42,000 2.111% 4,200.89 46,200.89 06/30/2027 43,000 2.111% 3,303.72 46,303.72 06/30/2028 44,000 2.111% 2,385.44 46,385.44 06/30/2029 45,000 2.111% 1,446.04. 46,446.04 06/30/2030 46,000 2.111% 485.53 46,485.53 420,000 50,020.19 470,020.19 WwNpow & GmwANY SINC[ X869