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HomeMy WebLinkAboutA018 - Letter to Dorsey & Whitney dated October 5, 2006 - Final Delivery CertificateCaring People Iq Quality Programs Exceptional Se -ice October 5, 2006 Dorsey & Whitney UP 801 Grand, Suite 3900 Des Moines, Iowa 50309 Attention Robert E. Josten 515 Clark Avenue, P. 0. Box 8 t I Ames, IA 50010 Phone: 515-239-5105 Fax: 515-239-5142 RE: Ames, Iowa $5,285,000 General Obligation Corporate Purpose Bonds, Series 2006A Your File No. 419370-34 107401 Me$ Enclosed please find two fully executed originals of the Final Delivery Certificate covering the above -named Bonds scheduled for closing on October 10. Also enclosed is an executed IRS 8038 form for your filing with the Internal Revenue Service. Thank you for your assistance. Sincerely, Diane R. Voss City Clerk /dry Enclosures Ames/419370-34/FDC & Ur I 419370-34 FDC - G.O. 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 $5,285,000 General Obligation Corporate Purpose Bonds, Series 2006A, dated October 1, 2006 (the "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 September 12, 2006 (the "Resolution"), the Bonds have been heretofore lawfully authorized and this day by us lawfully sold, issued and delivered to the original purchaser thereof (the "Purchaser"), and paid for at a total price of $5,345,964.55, receipt of which is hereby acknowledged, which amount represents the purchase price of the Bonds ($5,340,679.55), plus accrued interest ($5,285). The Bonds mature on June I in each of the years, in the respective principal amounts and bear interest payable semiannually, commencing June 1, 2007, at the respective rates, as follows: Principal Interest Rate Principal Interest Rate Year Amount Per Annum Year Amount Per Annum 2007 $275,000 4.00% 2013 $450,000 4.00% 2008 $365,000 4.00% 2014 $470,000 4.00% 2009 $380,000 4.00% 2015 $490,000 4.00% 2010 $400,000 4.00% 2016 $515,000 4.00% 2011 $415,000 4.00% 2017 $535,000 4.00% 2012 $430,000 4.00% 2018 $560,000 4.00% Each of the Bonds has been executed with the facsimile signatures of the aforesaid Mayor and City Clerk, with a facsimile of the official seal of the City imprinted thereon; and the Bonds have been fully authenticated by the aforesaid City Treasurer as Bond Registrar and Paying Agent and registered as to principal and interest in the names of the owners on the registration books of the City. We further certify that the Bonds are being issued for the purpose of paying the cost, to that extent, of various street and storm sewer improvements (collectively, the "Projects"). 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 validity of the Bonds, or the power and duty of the City to provide and apply adequate taxes for the full and prompt payment of the principal of and interest on the Bonds, and that none of the proceedings incident to the authorization and issuance of the Bonds has been repealed or rescinded. We further certify that no appeal of the decision of the City Council to issue the Bonds has been taken to the district court. We further certify that all meetings held in connection with the Bonds were open to the public at a place reasonably accessible to the public and that notice was given at least 24 hours -I- DORSEY & WHITNEY LLP, ATTORNEYS, DES MINES, IOWA Ames/419370-34/FDC & Ltr 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 City Hall or 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. We further certify as follows: 1. The total costs of the Projects (the "Total Project Costs") are estimated to exceed $5,363,372. 2. The net sales proceeds of the Bonds are $5,358,086.30 (the "Net Sales Proceeds"), the same being the Issue Price (hereinafter defined) thereof. 3. The Net Sales Proceeds, including investment earnings thereon, will be invested by the City without restriction as to yield for a period not to exceed three years from the date hereof (the "Three Year Temporary Period"), the following three tests being reasonably expected to be satisfied by the City: a. Time Test: The City has entered or, within six months of the date hereof, will enter into binding contracts for the Projects with third parties (e.g. engineers or contractors); i. which are not subject to contingencies directly or indirectly within the City's control; ii. which provide for the payment by the City to such third parties of an amount equal to at least 5% of the Net Sales Proceeds; b. Expenditure Test: At least 85% of Net Sales Proceeds will be applied to the payment of Total Project Costs within the Three Year Temporary Period; and c. Due Diligence Test: Acquisition and construction of the Projects to completion and application of the Net Sales Proceeds to the payment of Total Project Costs will proceed with due diligence. 4. (i) at least 75% of the Net Sales Proceeds (along with any investment earnings thereon), will be spent on the construction of the Projects (not including the costs of acquisition of equipment or other personal property), and the City will be the owner of the Projects; and (ii) the City expects to spend the Net Sales Proceeds (along with any investment earnings thereon) in accordance with the following schedule: at least 10% within six months; at least 45 % within one year; at least 75% within 18 months; and 100% within two years. The City acknowledges that if it fails to spend the Net Sales Proceeds (along with the investment earnings thereon) in accordance with the foregoing schedule, the City may have a rebate liability to the United States pursuant to Section 148 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code")). -2- DORSEY & WHITNEY LIT, ATTORNFINS, DES MINES, IOWA Ames/419370-34/FDC & Ltr 5. The Bonds are payable from ad valorem taxes levied against all taxable property within the City which will be collected in a Debt Service Fund and applied to the payment of interest on the Bonds on each June I and December I and principal of the Bonds on each June I (the 12-month period ending on each June I being herein referred to as a "Bond Year"); the Debt Service Fund is used primarily to achieve a proper matching of taxes with principal and interest payments within each Bond Year; the Debt Service Fund will be depleted at least once each Bond Year except for a reasonable carryover amount not to exceed the greater of (i) the earnings on the fund for the immediately preceding Bond Year; or (ii) 1/12 of the principal and interest payments on the Bonds for the immediately preceding Bond Year; amounts on deposit in the Debt Service Fund will be invested by the City without restriction as to yield for a period of 13 months after their date of deposit. 6. The City Council has adopted resolutions declaring its official intent to acquire and construct the Projects and finance the same with the Bonds (the "Intent Resolutions"); none of the Total Project Costs to be paid for from the Net Sales Proceeds are for expenditures made for a Project more than 60 days prior to the date of adoption of the Intent Resolution with respect to that Project, except for (i) costs of issuance of the Bonds; (ii) costs aggregating an amount not in excess of the lesser of $100,000 or 5% of the Net Sales Proceeds; (iii) costs for preliminary expenditures (including architectural, engineering, surveying, soil testing, and similar costs incurred prior to commencement of acquisition or construction of the Projects, other than land acquisition, site preparation and similar costs) not in excess of 20% of the Issue Price of the Bonds; the City will allocate Net Sales Proceeds to reimbursement of such expenditures no later than 18 months after the later of (i) the date any such expenditure was originally paid or (ii) the date the Project is placed in service, but in no event more than 3 years after such expenditure was originally paid; and such allocations will be made by the City in writing. 7. Not more than 50% of the Net Sales Proceeds will be invested in nonpurpose investments (as defined in Section 148(f)(6)(A) of the Internal Revenue Code) having a substantially guaranteed yield for four years or more (e.g., a four-year guaranteed investment contract or a Treasury Obligation that does not mature for four years). 8. The weighted average maturity of the Bonds does not exceed the reasonably expected economic life of the Projects, 9. The amount received as accrued interest will be set aside and deposited into the City's Debt Service Fund as provided in the Resolution and used to pay interest on the Bonds due on the first interest payment date. 10. To our best knowledge and belief, there are no facts, estimates or circumstances which would materially change the foregoing conclusions. On the basis of the foregoing, it is not expected that the Net Sales Proceeds will be used in a manner that would cause the Bonds to be "arbitrage bonds" under Section 148 of the Code and the regulations prescribed under that section. The City has not been notified of any listing or proposed listing of it by the Internal Revenue Service as a bond issuer whose arbitrage certifications may not be relied upon. -3- DORSEY & wif i,rNEY LLP, ATTORNEYS, DES MOINES, IOWA Ames/419370-34/FDC & Ltr The Bonds were sold to the Purchaser at public sale at a purchase price of $5,340,679.55. 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 (the "Issue Price") of the Bonds to the public was $5,358,086.30, resulting in an original issue premium of $73,086.30. We further certify that due provision has been made for the collection of taxes sufficient to pay the principal of and interest on the Bonds when due, commencing with the levy of taxes for collection in the fiscal year which begins July 1, 2007 (provisions having been previously made, and funds being on hand and pledged to pay the interest on and principal of the Bonds coming due on June 1, 2007). IN WITNESS WHEREOF, we have hereunto affixed our hands and the seal of the aforementioned City, as of October 10, 2006. (Seal) CITY OF AMES, IOWA Mayor City Clerk City Treasurer -4- DORSEY & WHITNEY UP, ATTORNEYS, DES MOINES, IOWA 419370-34 GO Corp Purp Bonds Form 8038-G Information Return for Tax -Exempt Governmental Obligations ► Under Internal Revenue Code section 149(e) (Rev. November 2000) ► See separate Instructions. Department of the Treasury Internal Revenue Service Caution: If the issue price is under $ 100,000, use Form 8038-GC. Dannrtinn Aiithnritv OMB No. 1545-0720 If Amended Return, check note r Li 1 Issuer's name 2 Issuer's employer identification number City of Ames 42i 6004218 3 Number and street (or P.O, box if mail is not delivered to street address) Room/suite 4 Report number 515 Clark Avenue 2006-1 5 City, town, or post office, state, and ZIP code 6 Date of issue Ames, Iowa 50010 10/10/06 7 Name of issue 8 CUSIP number General Obligation Corporate Purpose Bonds, Series 2006A 030807 A6 8 9 Name and title of officer or legal representative whom the IRS may call for minformation Telephone number of officer or legal representativemore- 0- Dorsey & Whitney LLP, Des Moines, Iowa Bond Counsel 1 ( 515 ) 283-1000 OTITI-Twe of Issue (check applicable box(es) and enter the issue price) See instructions and attach schedule 11 El Education . . . . . . . . . . . . . . . 12 El Health and hospital . . . . . . . . . . . . . 13 El Transportation . . . . . . . . . . . . . . . . . . . . . . . . 14 El Public safety. . . . . . . . . . . . . . . . . . . . . . . . 15 0 Environment (including sewage bonds) . . . . . . . . . . . . . . . . 16 El Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 El Utilities . . . . . . . . . . . . . . . . . . . . 18 F0 Other. Describe 0-street and storm sewer improvements - 19 If obligations are TANS or RANs, check box ► F If obligations are BANS, check box ► El 20 If obligations are in the form of a lease or installment sale, check box . . . . . . Do- El 11 12 13 14 15 16 17 18 5,35j8,08j6 IT PRWM _rtncnronfI^n of (*1hIinntvnnc (nmnlntn fr)r thin rntirp i-,ci ire fnr which this form is bpina filed. (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 21 06/01/18 $ 5,358,086 $ 5,285,000 6.7384 years 3.7513 % WMiTA Uses of Proceeds of Bond Issue (including underwriters, aiscouny 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . 22 5,285 5,358,086 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . . . . . . . 23 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 50,742 25 Proceeds used for credit enhancement . . . . . 25 26 2J742 Proceeds allocated to reasonably required reserve or replacement fund 26 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 28 Proceeds used to advance refund prior issues . . . . . . I . . 28 50,742 29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . 29 30 5,307,344 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . . Description of Refunded Bonds (Complete this part only for refunding bonds.) 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . 00, years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded 01* years 33 Enter the last date on which the refunded bonds will be called . . . . . . . . . . 11" 34 Enter the dates) the refunded bonds were issued 00, [= Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a b Enter the final maturity date of the guaranteed investment contract 01, 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► El and enter the name of the issuer Illo- and the date of the issue 01* 38 If the issuer has designated the issue under section 265(b)(3)(13)(i)(111) (small issuer exception), check box . . . 0'. 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . 10. ❑ 40 If the issuer has identified a hedge, check box . . . . . . . . . . . . . . . . . . . . . . . ► El Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge they are true, correct, and complete. Sign -771 ­t /I Here ;belief, V)� . 10/10/06 Diane R. Voss, City Clerk Signature of issuer's authorized representative Date Type or print name and title For Paperwork Reduction Act Notice, see page 2 of the Instructions. Cat. No. 63773S Form 8038-G (Rev, 11-2000)