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HomeMy WebLinkAboutA011 - Certification of City OfficersAmes/419370-19/FDC & Ur 419370-19 FDC -Refunding Bonds We, the undersigned, Mayor, City Clerk and City Treasurer, of the City of Ames, in Story County, Iowa (the "City"), do hereby certify that we are now and were at the time of the execution of the City's $3,205,000 General Obligation Refunding Bonds, Series 1998B, dated December 1, 1998 (the "Series 1998E Bonds") the officers respectively above indicated; and that in pursuance of Chapter 384 of the Code of Iowa, and a resolution adopted by the City Council on November 10, 1998 (the "Resolution"), the Series 1998E Bonds have been heretofore lawfully authorized and this day by us lawfully issued, sold and delivered to the purchaser thereof (the "Purchaser"), and the Purchaser has paid the City $3,203,060.94, receipt of which is hereby acknowledged, which amount represents the principal amount of the Series 1998B Bonds ($3,205,000), plus accrued interest thereon ($2,547.94), minus underwriter's discount ($4,487). The Series 1998E Bonds mature on June I in each of the years, in the respective principal amounts and bear interest payable semiannually, commencing June 1, 1999, at the respective rates, as follows: Principal Interest Rate Principal Interest Rate Year Amount Per Annum Year Amount Per Annum 2000 $665,000 3.45% 2003 $630,000 3.65% 2001 $655,000 3.50% 2004 $615,000 3.70% 2002 $640,000 3.60% Each of the Series 1998E Bonds has been executed with the duly authorized facsimile signatures of the aforesaid Mayor and City Clerk, and the City has authorized and directed that the Series 1998B Bonds be authenticated by Bankers Trust Company, Des Moines, Iowa (the "Bank"), as the Registrar and Paying Agent, and registered in the names of the owners on the City's registration records maintained by the Bank. We further certify that the Series 1998B Bonds are being issued for the purpose of providing funds to pay the cost of refunding the City's General Obligation Corporate Purpose Bonds, dated June 1, 1992 (the "Series 1992 Bonds") which are scheduled to mature on and after June 1, 2000 (the "Optional Series 1992 Bonds"), on June 1, 1999 (the "Redemption Date"). We further certify that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the titles of the aforesaid officers to their respective positions or the proceedings incident to the authorization of the Series 1998B Bonds or in any way concerning the validity of the Series 1998E Bonds or the power and duty of the City to provide and apply adequate taxes to the full and prompt payment of the principal of and interest on the Series 1998E Bonds and that none of the proceedings incident to the authorization and issuance of the Series 1998B Bonds has been repealed or rescinded. We further certify that no petition of protest or objections of any kind have been filed or made objecting to the issuance of the Series 1998E Bonds or to the levy of taxes to pay the principal thereof or interest thereon and that no appeal of the decision of the City to issue the Series 1998B Bonds or to levy such taxes has been taken to the District Court. DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Ames/419370-19/FDC & lAr We further certify pursuant to Section 148 of the Internal Revenue Code of 1986 (the "Code") and applicable income tax regulations issued pursuant thereto (the "Regulations") as follows: I. The Optional Series 1992 Bonds are being called for redemption on their first permissible redemption date next occurring and the refunding of the Optional Series 1992 Bonds is the first advance refunding thereof. The estimated sources and uses of funds in connection with the issuance of the Series 1998B Bonds are as follows: Sources of Funds Refunding Bond Proceeds - Par Value Underwriter's Discount Accrued Interest Total Refunding Bond Proceeds Uses of Funds Cash deposit to establish cash balance in Escrow Account U.S. Treasury Certificate of Indebtedness - State and Local Government Series (SLGS) for Escrow Account (purchase price) Costs of Issuance Deposit to Debt Service Fund for Series 1998E Bonds (Accrued Interest and Excess Proceeds) Total $3,205,000.00 ($ 4,487.00) $ 2,547.94 $3,203,060.94 0.61 $3,160,167.00 $ 40,000.00 $ 2,893.33 $3,203,060.94 2. "SLGS" means the United States Treasury Certificate of Indebtedness - State and Local Government Series (shown on Exhibit A -I of the Verification Report attached hereto). 3. All of the original and investment proceeds of the Optional Series 1992 Bonds have been expended as of the date hereof for the purposes for which the Series 1992 Bonds were issued. Consequently, upon retirement of the Optional Series 1992 Bonds on the Redemption Date, no original or investment proceeds of the Optional Series 1992 Bonds will become transferred proceeds of the Series 1998B Bonds within the meaning of Section 1.148-9 of the Regulations. 4. The proceeds of the Series 1998B Bonds will not exceed the amounts needed to accomplish the refunding of the Optional Series 1992 Bonds. To the extent that proceeds of the Series 1998E Bonds constitute "excess proceeds" within the meaning of Section 1. 148- 10(c)(2) of the Regulations, such excess proceeds will not exceed one percent of the sale proceeds of the Series 1998B Bonds. Any amounts presently on hand, and hereafter deposited, into the Debt Service Fund for the Series 1992 Bonds will be needed and used to pay principal of and interest on the unrefunded Series 1992 Bonds as such becomes due. -2- DORSEY & WHrrNEY LLP, ATTORNEYS, DES MOINES, IOWA #" Ames/419370-19/FDC & LAr 5. The Series 1998B Bonds were sold at public sale at a discount equal to $4,487, resulting in a purchase price of $3,200,513 The City has been advised by its financial advisor, that such price is fair and reasonable under customary standards applicable to the market. The Purchaser has informed the City that the initial offering price of the Series 1998B Bonds to the public was $3,205,000 (par). The yield on the Series 1998E Bonds is 3.61316187% (the "Bond Yield"), as shown by Exhibit B, of the Verification Report attached hereto setting out the calculation of such yield. 6. From the sale proceeds of the Series 1998B Bonds, $3,160,167 has been deposited and set aside into an escrow account (the "Escrow Account") with the Bank, as escrow agent, pursuant to an Escrow Agreement between the City and the Bank and invested by the purchase of the SLGS maturing at such times and in such principal and interest amounts as will be sufficient, with the cash balance in the Escrow Account, to pay the interest when due on the Optional Series 1992 Bonds and to prepay the principal of the Optional Series 1992 Bonds on the Redemption Date, all as provided in the Escrow Agreement. The yield on the SLGS, computed in accordance with Section 1. 148-5 of the Regulations, is 3.61237023 % per annum, as shown on Exhibit A- 1 of the Verification Report attached hereto, which yield is less than the Bond Yield. 7. From the sale proceeds of the Series 1998B Bonds, $0.61 has been deposited and set aside into the Escrow Account to provide for a cash balance in the Escrow Account. 8. From the sale proceeds of the Series 1998B Bonds, $40,000 has been deposited with the Bank and immediately upon receipt thereof and in no event later than 30 days after the date hereof, will be disbursed to pay the issuance costs related to the Series 1998B Bonds. Until such time, the aforementioned amount may be invested without restriction as to yield pursuant to Section 1. 148-9(d)(2)(iv) of the Regulations. 9. From the sale proceeds of the Series 1998B Bonds, $2,893.33 (Accrued Interest) and $345.39 (Excess Proceeds) have been deposited into the City's Debt Service Fund and will be applied to the payment of the interest on the Series 1998B Bonds due on June 1, 1999, and until such time may be invested without restriction as to yield. The amount of Excess Proceeds does not exceed more than 1% of the original sale proceeds of the Series 1998B Bonds. 10. The City will accumulate amounts to be used to pay debt service on the Series 1998B Bonds in the City's Debt Service Fund. The amounts to be accumulated are estimated to be sufficient to pay principal and interest on the Series 1998B Bonds as such becomes due and it is not expected that the Series 1998B Bonds will be paid from any other fund, nor is any other fund pledged as security for the Series 1998E Bonds. The amounts appropriated and on hand from time to time in the Debt Service Fund are not expected to exceed an amount equal to principal and interest due on the Series 1998E Bonds through the next following June I plus a reasonable carryover, as permitted for a "bona fide debt service fund" in Section 1. 148-1 (b) of the Regulations. If amounts in the Debt Service Fund at any time exceed the foregoing sum by an amount in excess of the "minor portion" permitted the Series 1998B Bonds by Section 1. 148-2(g) of the Regulations, such excess shall be invested at a yield not exceeding the Bond Yield as set forth in Section 5 above, unless an opinion is obtained from bond counsel indicating that investment yield restriction is not required -3- DORSEY & WHrrNEY LLP, ATTORNEYS, DES MOINES, IOWA Arnes/419370-19/R)C & IAr 11. The weighted average maturity of the Series 1998E Bonds does not exceed 120% of the remaining reasonably expected economic life of the facilities originally financed by the Series 1992 Bonds. 12. The Series 1998E Bonds are not "hedge bonds" as defined in Section 148(g) of the Code because the City reasonably expected to expend all of the net sale proceeds of the Series 1992 Bonds on the projects for which the Series 1992 Bonds were issued within 3 years of the date of issuance thereof and none of the proceeds of the Series 1992 Bonds were invested in nonpurpose investments with a substantially guaranteed yield of 4 years or more. 13. There are no other governmental obligations of the City: (i) sold at substantially the same time as the Series 1998E Bonds, (ii) sold pursuant to the same plan of financing with the Series 1998E Bonds, and (iii) reasonably expected to be paid from substantially the same source of funds as will be used to pay the Series 1998B Bonds. 14. The City has not received notice that its certifications may not be relied upon with respect to its own issues, nor has it been advised that the Commissioner of Internal Revenue is contemplating listing the City as a governmental unit whose certifications may not be relied upon with respect to its issues of governmental obligations. 15. This certification is made in compliance with Section 1.148-2(b)(2) of the Regulations and is delivered as part of the transcript of proceedings and accompanying certificates with respect to the Series 1998E Bonds. 16. On the basis of the foregoing, it is not expected that the proceeds of the Series 1998B Bonds will be used in a manner that would cause the Series 1998E Bonds to be "arbitrage bonds", under Section 148 of the Code and the Regulations. To the best of our knowledge and belief, there are no other facts, estimates and circumstances that would materially change the foregoing conclusions. We further certify that due provision has been made for the collection of taxes sufficient to pay the principal of and interest on the Series 1998E Bonds when due. All payments coming due before the collection of any such taxes will be paid promptly when due from legally available funds. We further certify that all meetings held in connection with the Series 1998E Bonds were open to the public at a place reasonably accessible to the public and that notice was given at least 24 hours prior to the commencement of all meetings by advising the news media who requested notice of the time, date, place and the tentative agenda and by posting such notice and agenda at the administrative offices of the City or other principal office of the City on a bulletin board or other prominent place which is easily accessible to the public and is the place designated for the purpose of posting notices of meetings. -4- DORSEY & WHUNEY LLP, ATTORNEYS, DES MOINES, IOWA Aiytes/419370-19/FDC & Ur We further certify that the City does not currently have outstanding tax exempt obligations issued during the current calendar year, including the Series 1998E Bonds, equal to or in excess of $10,000,000, nor will the City issue additional tax exempt obligations during the current calendar year which, when added to the City's current tax exempt obligations issued during the current calendar year, including the Series 1998B Bonds, would be equal to or in excess of $10,000,000. IN WITNESS WHEREOF, we have hereunto affixed our respective official signatures as of December 9, 1998. (Seal) CITY OF ES, IOWA By,,�Zo 25 Mayor \ - ByQ City Clerk B I- X)11 M1, City Treasurer -5- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA