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HomeMy WebLinkAboutA072 - Closing Certificate Anes/419370-44/Closing Cert&Ur CLOSING CERTIFICATE 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 $6,675,000 General Obligation Corporate Purpose Bonds, Series 2011B, dated November 15, 2011 (the "Bonds"), the officers respectively above indicated; and that in pursuance of Chapter 384 of the Code of Iowa, a resolution adopted by the City Council on November 1, 2011 (the "Resolution"), and a loan agreement dated as of November 15, 2011 (the "Loan Agreement"), by and between the City and FTN Financial Capital Markets, Memphis, Tennessee (the "Purchaser"), the Bonds have been heretofore lawfully authorized and this day by us lawfully issued and delivered to or upon the direction of the Purchaser and pursuant to the Loan Agreement, the City has received $6,660,049.90, receipt of which is hereby acknowledged, which amount represents the par amount of the Bonds ($6,675,000.00), plus Reoffering premium (12,884.65) and minus underwriter's discount ($27,834.75). The Bonds mature on June 1 in each of the years, in the respective principal amounts and bear interest payable semiannually, commencing June 1, 2012, as set forth in the Resolution_ Each of the Bonds has been executed with the facsimile signatures of the aforesaid officers, and the City has authorized and directed that the Bonds be authenticated by Bankers Trust Company, Des Moines, Iowa, as the Registrar and Paying Agent (the "Registrar"), and registered in the names of the owners on the City's registration records maintained by the Registrar. We further certify that the Bonds are being issued to evidence the City's obligation under the Loan Agreement entered into by the City for the purpose of paying the cost, to that extent, of constructing street improvements and making improvements to City Hall ( collectively the "Proj ect"). 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 enter into the Loan Agreement or 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. -1- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Anes/419370-44/Closing Cert&Ltr We further certify as follows: 1. The net sales proceeds of the Bonds are $6,687,884.65 (the "Net Sales Proceeds"), the same being the Issue Price (hereinafter defined) thereof. 2. The total costs of the Project, including engineering fees, (the "Total Project Costs") are estimated to be at least $6,687,884.65. 3. The estimated sources and uses of funds in connection with the Bonds are as follows: SOURCES Par amount of Bonds $6,675,000.00 Reoffering Premium $12,884.65 $6,687,884.65 USES Project Fund Deposit $6,605,249.90 Underwriter's Discount $27,834.75 Costs of Issuance $54,800.00 $6,687,884.65 a. $82,634.75 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. b. $6,605,249.90 of the Net Sales Proceeds will be used to pay the costs of the Project (the "Net Sales Proceeds"), and the Net Sales Proceeds will be expended and invested in accordance with Section 4 hereinafter set forth. 4. 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 into or, within six months of the date hereof, will enter into binding contracts for the Project with third parties (e.g. engineers or contractors); (i) which are not subject to contingencies directly or indirectly within the City's control; -2- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Anes/419370-44/Closing Cert&Ur (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 the 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 Project to completion and application of the Net Sales Proceeds to the payment of Total Project Costs 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 1 and December 1 and principal of the Bonds on each June 1 (the 12-month period ending on each June 1 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; provided, however, that the Capitalized Interest Proceeds shall be invested as provided in paragraph 3 hereof. 6. None of the Net Sales Proceeds will be used to reimburse the City for prior expenditures on the Project. 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 120% of the reasonably expected economic life of the Project. 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. 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 $6,687,884.65. -3- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Anes/419370-44/Closing Cert&Ltr 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 $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 Bonds, would exceed$10,000,000. 10. We further certify that the City expects to spend the Net Sales Proceeds (along with any investment earnings on such proceeds) by May 15, 2013. Accordingly, the City reasonably expects that the Net Sale Proceeds will be fully spent for costs of the Acquisition within the time periods set forth in the 18 Month Exception described below: 18 Month Exception: The Bonds qualify for the 18 Month Exception set forth in Section 1.148-7(d) of the United States Treasury Regulations (the "Regulations"). Accordingly, if all Net Sales Proceeds of the Bonds (other than those in the Debt Service Fund), are expended at least as quickly as 15% within 6 months from the date of issuance of the Bonds, 60% within 12 months and 100% within 18 months, then rebate will be required only with respect to a reasonably required reserve or replacement fund, if any. We further certify that the City will comply with the investment requirements of Section 148 of the Code and Regulations relating thereto with respect to the proceeds of the Bonds. The City acknowledges that if it fails to spend the proceeds of the Bonds (along with the investment earnings thereon) within the time periods set forth in the 18 Month Exception (or another applicable rebate exception), the City may have a rebate liability to the United States pursuant to Section 148 of the Code. We further certify that the City will comply with the investment requirements of Section 148 of the Code and the Regulations relating thereto with respect to the proceeds of the Bonds, including the requirement to invest the proceeds of the Bonds (and the investment earnings thereon) at fair market value, and, if appropriate, to comply with the bidding requirements for investment contracts. No later than June 1, 2016; June 1, 2021; and June 1, 2023 (or such earlier date on which the Bonds are paid in full) (each a "Calculation Date"), the City shall calculate the amount of rebate, if any, owed to the United States pursuant to Section 148 of the Code and shall pay such amount to the United States within 60 days of such Calculation Date. We further certify that the Net Sales Proceeds will be used solely for the governmental purposes of the City and not to finance or improve private property. -4- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Anes/419370-44/Closing Cert&Ltr 11. 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 November 15, 2011. CITY OF AMES, IOWA By C�ir1 Mayor Attest: City Clerk -5- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Page 1 of 1 2011 bond closing documents Josten.Robert to: dvoss 02/08/2012 04:42 PM Show Details Diane, I fell behind at the end of last year in terms of sending out documents to several clients, and I need to ask for your assistance. r Attached to this email is an Internal Revenue Service form 8038 that we need to file on behalf of your City with respect to the$6,67S,000 GO Bonds that were issued recently. Please sign and date a copy of the form under the heading"Signature and Consent," and return that original copy to me no later than Monday, February 13. Also attached is a Closing Certificate that sets out the final details of the transaction. Please have a copy of this document signed and returned to me as soon as possible. Thanks for your help, contact me if you have questions. Robert E.Josten \� Partner DORSEY & WHITNEY LLP 801 Grand Suite 3900 Des Moines, IA 50309-2790 P: 515.283.1000 F: 515.283.1060 C: 515.556.8186 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CONFIDENTIAL.COMMUNICATION C grails from this firm normally contain confidential and piivileged material and are for the sole use of the cipr'nt. Use or distribution by an unintended recipient is prohibited, and may be a violation of law. If you heliei e that you received this e-mail ir,error:please do not read this e-mail or any attached items. Please delete the e-mail and all attachments, inchrding any copies thereof, and inform the sender that you have doieted the e-mail, ail attachments and any copies thereof. Thank you. file://C:\D ocuments and Settings\diane.voss\Local Settings\Temp\notesElEF34\—web9373.... 2/9/2012