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HomeMy WebLinkAbout2020-11Resolution 2020-11 RESOLUTION AUTHORIZING THE ISSUANCE OF A GENERAL OBLIGATION BOND OF THE TOWN OF PULASKI, IN A PRINCIPAL AMOUNT NOT TO EXCEED $290,000, AND PROVIDING FOR THE FORM, DETAILS AND PAYMENT OF THE BOND AND AUTHORIZING CERTAIN RELATED ACTIONS WHEREAS, the Council of the Town of Pulaski, Virginia (the "Council") has determined it necessary and expedient to make certain repairs to the water treatment plant (the "Project") of the Town of Pulaski, Virginia (the "Town") and to issue a general obligation bond of the Town in an amount not to exceed $290,000 to provide funds, together with other available funds, to finance the costs of the Project. WHEREAS, pursuant to the Public Finance Act of 1991, the Town is authorized to issue its bonds to pay for the Project and the cost of issuing the bonds. WHEREAS, on February 4, 2020, 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. NOW, THEREFORE be it RESOLVED by the Town Council of the Town of Pulaski, Virginia sitting in regular session this 6t' day of May 2020 that the Town Council approves issuance of a general obligation bond by the Town of Pulaski, Virginia in a principal amount not to exceed $290,000 under the terms and conditions as set forth below: Section 1.1. Authorization of Bond. It is determined to be advisable, necessary and expedient for the Town to borrow an amount not to exceed $290,000 to provide funds, together with other funds that may be available, to pay for the Project and the cost of issuing bond therefor. 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 $290,000 (the "Bond"). The Bond will be designated the "Town of Pulaski, Virginia, General Obligation Bond, Series 2020." The Bond will 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. Interest shall be computed on the basis of a 360 -day year consisting of 30 -day months. Section 1.3. Principal Amount; Payment Dates and Amounts. Each of the Mayor, Vice Mayor and Town Manager of the Town (each, an "Authorized Officer") is authorized and directed to determine, before the issuance of the Bond, the principal amount of the Bond (as long as such amount does not exceed $290,000), the interest rate or rates thereon (as long as no such rate exceeds 6.0% per annum), and the due dates and amounts of the installments of principal of and interest on the Bond (as long as the final maturity of the Bond does not exceed twenty years from the date 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, at the option of the Town, shall be subject to redemption prior to maturity in whole or in part, at any time without penalty or premium. Section 1.5. Execution of Bond. The Bond shall bear the manual or facsimile signature of an Authorized Officer 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 appear 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 execution are 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: [FORM OF BOND TO BE COMPLETED AT CLOSING] No. R-1 $290,000.00 UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA TOWN OF PULASKI General Obligation Bond, Series 2020 Dated Date [date] The Town of Pulaski, apolitical subdivision of the Commonwealth of Virginia (the "Town"), for value received, acknowledges itself indebted and promises to pay to National Bank of Blacksburg 2 or its registered assigns, the principal sum of $290,000.00 and to pay to the registered owner hereof, interest on this bond until payment in full at the rates per annum as provided below. From the date of this Bond until [date], 2025, this Bond shall bear interest at the per annum rate of 3.93%. On [date], 2025 and [date], 2030 (each, a "Reset Date"), interest rate on this Bond will adjust to a per annum rate (the "Reset Rate") equal to 1.00% above the "U.S. Securities Rate," as defined below; however, no Reset Rate shall be more than 1 % above the interest rate in effect the day before the Reset Date. For purposes of this Bond, "U.S. Securities Rate" means, as of a Reset Date, the rate of interest equal to the weekly average yield on U.S. Treasury Securities, adjusted to a constant maturity of five (5) years, as published in Federal Reserve Board Statistical Release H.15 (519) (or, if such source is not available, such alternate source as determined by the Bank) on the Business Day next preceding the Reset Date. "Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on which commercial banking institutions generally are open for business in Virginia. Interest on this bond shall be computed based on a 360 -day year consisting of twelve 30 -day months. Commencing on [date], 2020, and continuing on the same day of each month thereafter, an installment of principal of and interest on this bond will be due. From the date of this bond to and including the first Reset Date, the amount of the monthly installment will be $2,134.94. After each Reset Date, the amount of the monthly installment will be adjusted to equal the amount necessary to amortize the principal amount outstanding as of the Reset Date over the then remaining term of this bond at the interest rate in effect on the Reset Date. On [date], 2035, the entire indebtedness evidenced by this bond, including all accrued but unpaid interest and all outstanding principal, shall be due and payable in full. 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, at its address as it appears on the registration books kept for that purpose at the principal office of the Town Manager of the Town, who has been appointed Registrar. 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 has been authorized by a resolution duly adopted by the Council of the Town on May 6, 2020 (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 finance the cost of repairs to the Town's water treatment plant. A copy of the Resolution is on file at the office of the Registrar. Reference is hereby 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. 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 be prepaid in part or in full at any time and without penalty. 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. Upon the failure of the Town to pay any installment of principal and interest within thirty (3 0) 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. E 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 of this 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 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. Registrar. 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 of the Registrar, and the Town 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 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 Registrar 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, 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 dated March 12, 2020, of National Bank of Blacksburg (the "Bank") to purchase the Bond, which proposal has been presented to Council at this meeting, for an amount equal to the principal amount of the Bond is 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 Bond is awarded to the Bank. Each of the Authorized Officers 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 Bank 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 "Water Treatment Plant Repair Fund" to be applied to the costs of the Project and the costs of issuance of the Bond. Withdrawals shall be made from the Fund only after the Town Manager or his designee has certified that the amount 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 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. ARTICLE II 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. C 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. Reimbursement of Expenditures. The Town has made and may make expenditures for the Project before the Bond is issued, and the Council reasonably expects to reimburse those expenditures with proceeds of the Bond. To the extent required under applicable law, the Town will make a reimbursement allocation, which is a written allocation that evidences the use of proceeds of the Bond to reimburse an expenditure, no later than 18 months after the latter of (a) the date on which the expenditure is paid or (b) the Project is placed in service or abandoned, but in no event more than three (3) years after the date on which the expenditure is paid. It is recognized that exceptions are available for certain "preliminary expenditures," costs of issuance, certain de minimis amounts, expenditures by "small issuers" and expenditures for construction projects of at least five years. This resolution is intended to constitute the "official intent" of the Council under Section 1.150-2 of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the "Code"). Section 2.4. 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 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 of the issuance of the Bond. (c) Tax Compliance Agreement. Each of the Authorized Officers is authorized and directed to execute and deliver a tax compliance agreement regarding any matters described in Section 2.4(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. 7 ARTICLE III QUALIFIED TAX EXEMPT OBLIGATION Section 3.1. Designation as Qualified Tax -Exempt Obligation. The Bond is not a private activity bond and is designated by the Council as a Qualified Tax -Exempt Obligation, as defined in Section 265(b)(3) of the Code. The Town 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 calendar year, including the Bond, 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 $10,000,000 of tax-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 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 current calendar year, result in the Town and such other entities having issued a total of more 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; however, 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 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 4.2. 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 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 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 4.5. Non -Arbitrage and Other Certificates. The Authorized Officers 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 authorized to make such elections on behalf of the Town and the Council. Section 4.6. 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 4.7. 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 4.8. Effective Date. This resolution shall take effect immediately. Section 4.9. 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 Clerk of the Circuit Court of Pulaski County, Virginia, pursuant to Section 15.2-2607 of the Public Finance Act of 1991. FURTHER RESOLVED, that the undersigned Clerk of the Town of Pulaski, Virginia, certifies that: (a) The foregoing is a true, complete and correct copy of a resolution adopted by the Council of the Town at a meeting of the Council held on May 6, 2020; (b) The meeting was a duly called, noticed and held regular meeting; (c) During the consideration of the foregoing resolution, a quorum was present; and (d) The name of each member of Council voting on the adoption of the foregoing resolution and his or her vote were recorded at the meeting as follows: This resolution is effective upon adoption and is here by adopted this 6th day of May 2020 by the duly recorded vote of the Town Council of the Town of Pulaski, Virginia as set forth below: Member Attendance Vote Lane R. Penn Present Aye Brooks R. Dawson Present Aye Gregory C. East Present Aye Joseph K. Goodman Present Aye G. Tyler Clontz Present Aye James A. Radcliffe Present Aye THE TOWN OF PULASKI, VIRG By: bwtid�ark, Mayor 10 Ay'm w4e4itl� avid N. Quesenberry Clerk, Town of Pulaski