HomeMy WebLinkAboutA032 - Letter to Dorsey & Whitney dated October 8, 2010I
Going People 'I
Qu-lity A-gra—
F=,ptionalSemwe
October 8, 201.0
Dorsey & Whitney LLP
801 Grand, Suite 3900
Des Moines, Iowa 50309
Attention Robert E. Josten
515 Clark Avenue, P. 0. Box 811
Anises, 1A 50010
Phone: 515-239-5105
Fax: 515-239-5142
RE: Ames, Iowa
$6,690,000 General Obligation Corporate Purpose Bonds, Series 201 OA
Your File No. 419370-43
Dear Bob:
Enclosed please find a fully executed copy of the Closing Certificate and a signed and dated IRS
8038-G form,
Thank you for your assistance.
Sincerely,
Diane R. Voss
City Clerk
/dry
Enclosures
Ames /.4119370-43/ Closing Cert
Please Return To:
CLOSING CERTIFICATE DORSEY & WHITNEY
ATTORNEYS AT LAW
801 Grand, Suite 3900
Des Moines, Iowa 50309
We, the undersigned Mayor and City Clerk, of the City of Ames (the "City"), in Story
County, Iowa, do hereby certify that we are now and were at the time of the execution of the
City's $6,690,000 General Obligation Corporate Purpose Bonds, Series 2010A, dated September
30, 2010 (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 14,
2010 (the "Resolution"), the Bonds have been lawfully authorized and this day by us lawfully
issued and delivered to or upon the direction of the original purchaser thereof (the "Purchaser"),
and the City has received $6,749,030.40, receipt of which is hereby acknowledged, which
amount represents the par amount of the Bonds ($6,690,000.00), plus reoffering premium.
($113,093.30), minus original issue discount ($20,174.15), minus underwriter's discount
($33,888.75). The Bonds mature on June 1 in each of the years, in the respective principal
amounts and bear interest payable semiannually, commencing June 1, 2011, as set forth in the
Resolution.
Each of the Bonds has been executed with the facsimile signatures of the aforesaid
officers, with a facsimile of the official seal of the City imprinted thereon; and the Bonds have
been fully registered as to principal and interest in the names of the owners on the registration
books of the City maintained by the City Treasurer, as the Registrar and Paying Agent (the
"Registrar").
We further certify that the Bonds are being issued for the purposes of paying the cost, to
that extent, of constructing improvements to streets, bridges and the City Hall and for the
acquisition of fire equipment (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
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;
Ames 1 937(-43/Closing Cert
1. The net sales proceeds of the Bonds are $6,782,919.15 (the "Net Sales
Proceeds"), the same being the Issue Price (hereinafter defined) thereof.
2. The total costs of the Projects are estimated to exceed $6,782,919.15.
3. The estimated sources and uses of funds in connection with the Bonds are as
follows:
Par - - ---------- ar amou---nt Bonds
of
F---"---------
$6,690,000.00
Original Issue Discount
($20,174.15)
Reoffering Premium
$113,093.30
$6,782,919.15�
USES
Jnderwriter's Discount
$33,888.75�
✓osts of Issuance
001
j rou
ect Fund Deposit
705,030.40
F-----"- —$6,782,9 19.15 �
$77,888.75 of the Net Sales Proceeds will be used to pay costs of issuance, including the
underwriter's discount, within 45 days of the date hereof, and until so applied, will be
invested by the City without restriction as to yield.
4. The remaining Net Sales Proceeds ($6,705,030.40), along with 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 into 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 costs of the Projects within the Three Year Temporary
Period; and
-2-
DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA
Ames 4 1 9370-43/Closing Cert
(c) Due Diligence Test: Acquisition and construction of the Projects
to completion and application of the Net Sales Proceeds to the payment of costs of
the Projects will proceed with due diligence,
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 adopted a resolution declaring its official intent to acquire and
construct the Projects and finance the same with Bonds or other obligations (the "Intent
Resolution"); none of the costs of the Projects to be paid for from the Net Sales Proceeds are for
expenditures made more than 60 days prior to the date of the adoption of the Intent Resolution,
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 3 years after the
later of (i) the date any such expenditurewas originally paid or (ii) the date the Project is placed
in service (or abandoned); 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 non -purpose
investments (as defined in Section 148(f)(6)(A) of the Internal Revenue Code of 1986, as
amended (the "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. 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 & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA
Ames 4,193X 43/Closing Cert
We further certify that the Purchaser has advised the City that the reasonably expected
reoffering price (the "Issue Price") of the Bonds to the public is $6,782,919.15.
We further certify that the City does not currently have outstanding tax exempt
obligations issued during the current calendar year, including the Bonds, in excess of
$30,000,000, 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 Bonds, would exceed $30,000,000.
The issuance of the Bonds qualifies as a "construction issue" as defined in Section
148(f)(4)(c)(vi) of the Code and Section 1.148-7(f) of the Regulations because at least 75% of
the "available construction proceeds" of the Bonds as defined in Section 148(f)(4)(c)(vi) of the
Code will be allocated to capital expenditures that are allocable to the cost of land,
improvements, buildings, permanent structures or constructed personal property. The costs of
acquisition of land are not "available construction proceeds." The City reasonably expects to
spend the proceeds of the Bonds allocated to the Projects ($6,705,030.40) (the "Project Net Sales
Proceeds") to pay capital costs within the following time periods (the "Two -Year Exception"):
(a) At least 10% will be spent within 6 months of the date hereof;
(b) At least 45% will be spent within 12 months of the date hereof;
(c) At least 75% will be spent within 18 months of the date hereof; and
(d) All of the proceeds will be spent within 24 months of the date hereof.
If the Project Net Sales Proceeds are spent in accordance with these provisions, the
Project Net Sales Proceeds may be invested by the City without restriction as to yield and rebate
payments to the United States will not be required; however, if the Project Net Sales Proceeds
are not spent within the foregoing timeframes, rebate payments to the United States may be
required to be made by the City.
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. All payments coming due before the
collection of any such taxes will be paid promptly when due from legally available funds.
IN WITNESS WHEREOF, we have hereunto affixed our hands, as of September 30,
2010.
es
City Clerk
CITY • AMES, IOWA
J#
ZAf
"0001�
-4-
DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA
419370-4
1,3 v ,
Form8038-G Information Return for Tax -Exempt Governmental Obligations
'r 00- Under Internal Revenue Code section 149(e)
May 20 (Rev. �U 10) See► separate instructions, OMB No. 1545-0720
Department f the Treasury
Internal
'm 0 Internal Revenue Service Caution: If the issue price is under $100,000, use Form 8038-GC.
Re ortin Authority IfArnPneiP.rIRPtiirn r-.hpr,.khara io. r
I Issuer's name
2 Issuer's employer identification number (EIN)
City of Ames, Iowa
: 6004218
-42
3 Number and street (or P.O. box if mail is not delivered to street address) Room/suite
4 Report number (For IRS Use Only)
515 Clark Avenue
5 City, town, or post office, state, and ZIP code
6 Date of issue
__Ames, Iowa.. 50010-0811
September 30, 2010
7 Name of issue
8 CUSIP number
General Obligation Corporate Purpose Bonds, Series 2010A
030807 H 20
9 Name and title of officer of the issuer or other person whom the IRS may call for more information
10 Telephone number of officer or other person
Robert E. Josten I Dorsey, & Whitney ILLP Bond Counsel
515 283-1000
411V issue price) bee instructions and attach schedule
11 Education . . . . . . . . . . . . . . . . . . .
11
. .
12 Health and hospital . . . . . . . . . . . . . . . .
12
13 Transportation . . . . . . .
13
14 Public safety . . . . . . . . . . . . .
14
15 Environment (including sewage bonds), . . . . . . . . . .
15
. . .
16 Housing . . . . . . . . .
16
17 Utilities . . . . . . . . . . .
17
. . . . .
18 Other. Describe Ili- Improvements to streets, bridges, City Hall; acquisition of fire equip
19 If obligations are TANS or RANs, check only box 19a . . . . 10.
If obligations are BANs, check only box 19b . . . . . . . . . . . . . . . Po. F-1
20 If obligations are in the form of a lease or installment sale, check box lo, 0
18
filed.
6,782,919
15
L sC 'P
e �ri ti�onof 0�blmtiions. Com late for the entire issue for which this form is being
(a) Final maturity date
(b) �Issue price
(c) Stated redemption
price at maturity
(d) Weighted
average maturity
(e) Yield
21
Junel, 2022
$ 6,'782,919
- -- 6,690,000
6.5138 years
1.9738 %
M-Uses
of Proceeds of Bond Issue (including underwriters' discount
22 Proceeds used for accrued interest. . . . . . . . . . . . . . . . . .
23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . . .
24 Proceeds used for bond issuance costs (including underwriters' discount) 24 77,88*8 75 77,888 7)
5
22
231
67782,919
15
26 Proceeds used for credit enhancement . . . . 25
26 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 . . . . . . . . 28
29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . .
din . . . .
30 Nonrefun 2 proceeds of the issue (subtract line 29 from line 23 and enter amount here
Dscription of Refunded Bonds lete this art onl for refundin bonds.
29 77,888
75
30 6,705,030
4
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . ► years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . 0, years
33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) . . . .
34 Enter the date(s) the refunded bonds were issued IN- (MWDD/YYYY)
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038-G (Rev. 5-2010)
Form 8038-G (Rev. 5-2010)
Page 2
LirjAjW__T!TisCeilianeous
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 M
(GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . 36a
Oo.
b Enter the final maturity date of the GIC
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 00- and the date of the issue 00
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(Ill) (small issuer exception), check box ►
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . ► El
40 If the issuer has identified a hedge, check box . . . . . . . . . . . . . . . . . . . . . . . oo
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge
Signature and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary
and to process thi return, to t1D&-Qerson that I have authorized above.
Consent Diane R. Voss, City Clerk
Signature of ss�uthorized representative Date 5 Type or print name and title
Paid %e -rer's Date �Ws SSN or PTIN
signature
Check if
Preparerfs seI f-emn P01075995
Use Only Firm a na e (or rsey Whitney LLP EIN 41 :0223337
Yours if a If-empf ed),
address, Z cod Rn Grand, Suite 3900, Des Moines, IA50309 Phone no. (515) 283-1000
Form 8038-G (Rev. 5-2010)
0ORSEY"
October 5, 2010
Diane R. Voss
City Clerk/City Hall
PO Box 811
515 Clark Avenue
Ames, Iowa 50010-0811
... iJ
L
7 20107
Y 'LERK
3, ITAIA
Re: $6,690,000 General Obligation Corporate Purpose Bonds, Series 2010A
Our File No. 419370-43
Dear Diane:
We have prepared and enclose the following documents related to the closing of the
City's General Obligation Corporate Purpose Bond issue:
1. Closing Certificate. Please review the facts contained in the certificate, advise us
of any inaccuracies, have this certificate signed as indicated and return one fully executed copy
to our office.
2. IRS 8038-G filing form. This is a new format for the IRS 8038-G farm, which
now includes a space under which I have signed as the "Paid Preparer," and a space for you to
sign under "Signature and Consent." Please sign the original of this form, date it as of the date
you sign it and return it to us so that we can file it with the Internal Revenue Service in order to
preserve the tax-exempt status of the interest earnings on the Bonds. The extra copy enclosed is
for the City's records.
If you have any questions, please contact me.
Enclosures
cc by email:
Steven Schainker
Duane Pitcher
Doug Marek
Roger Wisecup
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Subject City ofAmes, Iowa/bond counsel opinion
Attached to this email is an electronic copy of our approving opinion for the City of Ames, Iowa,
$O.GQ0.08OGOCorporate Purpose Bond issue that ieclosing today. The original ofour opinion was sent
by R.W. Baird yesterday by Federal Express.
Please contact mmifthere are questions.
Robert E. Josten
Partner
.......... I... . . ... I ...........�����
DORSEY&WHITNEY LLP
801Grand Suite 3QOO
Des Moines, |A5O30g'27QO
...... . . ... .........................
CONFIDENTIAL COMMUNICATION
E-mails from this firm normally contain confidential andprivileged material, and are for the sole. use of the intended recipient.
Use or distribution by an unintended recipient is prohibited, and may be a violation of law, If you believe that you received
this e-mail inerror, please donot read this e-mail o/any attached items. Please delete the e-mail and all attachments,
including any copies thereof, and inform the sender that you have deleted the e-mail, all attachments and any copies thereof
Thank you. 44ES LETTER&OP|N|ON 41937043.pdf
DORSEY & WHITNEY LLP
September 29, 2010
Vicky Ossoinik
Robert W. Baird & Co.
777 East Wisconsin Ave, 9h Floor
Milwaukee, WI 53202
Re: City of Ames, Iowa
$6,690,000 General Obligation Corporate Purpose Bonds, Series 2010A
Our File No. 419370-43
Dear Vicky:
We have prepared and enclose our bond counsel opinion covering the September 30'h
closing of the issuance by the City of Ames of $6,690,000 General Obligation Corporate Purpose
Bonds, Series 2010A,
Also enclosed are three original copies of the Loan Agreement for execution on behalf of
Robert W. Baird & Co. Please return two (ally -executed originals to us for Our file and for the
City's records.
A copy of the transcript will be sent to you by email.
Enclosures
cc by email: Diane Voss
Duane Pitcher
Roger Wisecup
Tionna Reed Pooler
DORSEY& WHITNEY LLP -ATTORNEYS AT LAW - WWW,DORSEY.COM - T 515.283.1000
F 515.283.1060 - 801 GRAND - SUITE 3900 - DES MOINES, IOWA 50309-2790
USA CANADA CUROPE ASIA-PACIPIC
DORSEY & WHITNEY LLP
September 30, 2010
City of Ames Robert W. Baird & Co.
Ames, Iowa Milwaukee, Wisconsin
We hereby certify that we have examined certified copies of the proceedings (the
"Proceedings") of the City Council of the City of Ames (the "Issuer"), in Story County, Iowa,
passed preliminary to the issue by the Issuer of its General Obligation Corporate Purpose Bonds,
Series 2010A (the "Bonds") in the amount of $6,690,000, dated September 30, 2010, in the
denomination of $5,000 each, or any integral multiple thereof, in evidence of the Issuer's
obligation under a certain loan agreement (the "Loan Agreement"), dated as of September 30,
2010. The Bonds mature on June I in each of the respective years and in the principal amounts
and bear interest payable semiannually, commencing June 1, 2011, at the respective rates as
follows:
Principal
Interest Rate
Principal
Interest Rate
Year
Amount
Per Annum
Year
Amount
Per Annurn
2011
$380,000
2.000%
2017
$565,000
2.000%
2012
$515,000
2.000%
2018
$580,000
2.000%
2013
$520,000
2.000%
2019
$595,000
2.250%
2014
$530,000
2.000%
2020
$615,000
2.250%
2015
$540,000
2.000%
2021
$640,000
2.375%
2016
$550,000
2.000%
2022
$660,000
2.500%
but the Bonds maturing in each of the years 2018 to 2022, inclusive, are subject to redemption
prior to maturity on June 1, 2017, or any date thereafter, upon terms of par and accrued interest.
Based upon our examination, we are of the opinion, as of the date hereof, that:
The Proceedings show lawful authority for such issue tinder the laws of the State
of Iowa.
2. The Bonds and the Loan Agreement are valid and binding general obligations of
the Issuer.
3. All taxable property within the corporate boundaries of the Issuer is subject to the
levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory
limitation as to rate or amount.
DORSEY & WHITNEY LLP • ATTORNEYS AT LAW • WWW,DORSEY,COM • T 515.283.1000
F 515,283,1060 - 801 GRAND • SUITE 3900 - DES MOINES, IOWA 50309-2790
USA CANADA EUROPE ASIA-PACIFIC
Page 2
4. The interest on the Bonds (including any original issue discount properly
allocable to an owner thereof) is excluded from gross income for federal income tax purposes.
Interest payable on the Bonds will not be treated as a preference item in calculating the
alternative minimum tax imposed under the Internal Revenue Code of .1986 (the "Code") with
respect to individuals and corporations and will not be included in the calculation of adjusted
current earnings for purposes of calculating the federal alternative minimum tax imposed on
corporations. The opinions set forth in the preceding sentence are subject to the condition that
the Issuer comply with all requirements of the Code that must be satisfied subsequent to the
issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross
income for federal income tax purposes. The Issuer has covenanted to comply with each such
requirement. Failure to comply with certain of such requirements may cause the inclusion of
interest on the Bonds in gross income for federal income tax purposes to be retroactive to the
date of issuance of the Bonds.
5. The Bonds are "qualified tax-exempt obligations" within the meaning of
Section 265(b)(3) of the Code. The opinion set forth in the preceding sentence is subject to the
condition that the Issuer comply with all requirements of the Code that must be satisfied
subsequent to the issuance of the Bonds in order that the Bonds be, or continue to be, qualified
tax-exempt obligations. The Issuer has covenanted to comply with each such requirement.
We express no opinion regarding other federal tax consequences arising with respect to
the Bonds.
The rights of the owners of the Bonds and the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally applicable, and their
enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
nDQ'CX7 & WHITNEY T T D
OORSEY & WHITNEY LLP
RogmWisecup/COA
To Diane
cc
bcc
Subject Fw: Bond Closing Statement
I reviewed the closing statement and it is ready for you and the mayor to sign.
Roger VVisecup.CPA
|nvestmentDfficenTnyaaurer
City ofAmes
Phone 515239-G119
Fax 51523Q-532U
Email mvisecup@ciLy.amee.io.us
----- Forwarded byRoger VVimacup/COAon10/\5/2O1O12:43PM---
A0DuoneRPhcher/CUA
1015/201012:43PIVI To RogerVViseoupKCDA@COA
uo Diane RVoaa8COA@COA
U Subject Bond Closing Statement
Roger,
I received a phone message from Diane asking about the closing statement for our bond sale. | know you
reviewed and | recall that everything was OK. Please verify with Diane amshe can have the Mayor sign.
Thonks,
Duane
Duane Pitcher, CPA, CPFO
Director of Finance
City ofAmes
515Clark Avenue
P.0.Box 811
Ames, Iowa 50010
Phone (515)23Q-5|14
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