HomeMy WebLinkAboutA037 - Closing Certificate dated May 30, 2013 .R
Ames/41937048/Closing Cert&Letter Please Return TO:
Or�N
DORSEYI& WHITNEY
AT i EYS LAW
CLOSING CERTIFICATE 1 GrETCI, Suit- 4100
50309
We, the undersigned Mayor and City Clerk, of the City of Ames (the "City"), in Story
County, Iowa, do hereby certify, as of May 30, 2013, that we were at the time of the execution
of the City's $22,540,000 General Obligation Corporate Purpose and Refunding Bonds, Series
2013, dated May 30, 2013 (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 May
14, 2013 (the "Resolution"), and a loan agreement dated as of May 30, 2013 (the "Loan
Agreement"), by and between the City and J.P. Morgan Securities LLC, New York, New York
(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 $23,120,607.54 receipt of which is hereby acknowledged,
which amount represents the par amount of the Bonds ($22,540,000), plus reoffering premium
($737,593.20), minus underwriter's discount ($156,985.66). The Bonds mature on June 1 in
each of the years, in the respective principal amounts and bear interest payable semiannually,
commencing December 1, 2013, as set forth in the Resolution.
Each of the Bonds has been executed with the facsimile signatures of these officers; 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.
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 costs, to that extent,
of(1) constructing improvements to streets and solid waste disposal facilities; and (2) expanding
the Ames Public Library (the purposes set forth in (1) and (2) of this paragraph are collectively
hereinafter referred to as the "Projects"); and (3) current refunding the outstanding balances of
the City's General Obligation Corporate Purpose Bonds, Series 2004, and General Obligation
Corporate Purpose and Refunding Bonds, Series 2005A (collectively, the "Refunded
Obligations").
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.
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-48/Closing Cert&Letter
We further certify as follows:
1. The net sales proceeds of the Bonds are $23,277,593.20 (the "Net Sales
Proceeds"), the same being the Issue Price (hereinafter defined)thereof.
2. The estimated sources and uses of funds in connection with the Bonds are as
follows:
SOURCES
_......................._..................__._......._................._..._......_...._............__..._...--..............__._......__...__ _...............- .._..._...._.......... .
Par amount of Bonds $22,540,000.00
Reoffering Premium $737,593.20
$23,277,593.20
IUSES
1
S
,Deposit to Project Construction Fund $20,905,370.00
. ............._..........................._.-...._._.................... - -_._....__._....._.__..._._._._.....__.._........._._........_....._...._............_.. ....._.............__._...__..._....._...-............................._.._...
jRedemption of Refunded Obligations $2,132,656.97 1
. . ..
.................
...... ..............................._....._............_.__........_.__....._............_....._.............._........._._......_._..._....._......._...._...--------
............
...
Underwriter's Discount $156,985.66
........................_. .........................................................._.........._......
ICosts of Issuance 82,300.00
€€Additional Proceeds
I. .
$23,277,593.20
a. $239,285.66 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. $2,132,656.97 of the Net Sales Proceeds will be used for the redemption
of the Refunded Obligations on June 14, 2013, and until so applied, will be invested by
the City without restriction as to yield.
C. $20,905,370 of the Net Sales Proceeds will be used to pay the costs of the
Projects (the "Project Net Sales Proceeds"), and the Project Net Sales Proceeds will be
expended and invested in accordance with Section 3 hereinafter set forth.
d. The amount of Net Sales Proceeds received as Additional Proceeds
($280.57) will be used for any lawful purpose of the City.
3. The Project 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 Projects with third parties
(e.g. engineers or contractors);
(i) which are not subject to contingencies directly or
indirectly within the City's control;
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-48/Closing Cert&Letter
(ii) which provide for the payment by the City to such
third parties of an amount equal to at least 5% of the Project Net
Sales Proceeds;
(b) Expenditure Test: At least 85% of the Project Net Sales Proceeds
will be applied to the payment of costs of the Projects within the Three Year
Temporary Period; and
(c) Due Diligence Test: Acquisition and construction of the Projects
to completion and application of the Project Net Sales Proceeds to the payment of
costs of the Projects will proceed with due diligence.
4. All of the original and investment proceeds of the Refunded Obligations have
been expended for the purposes for which they were issued.
5. None of the Net Sales Proceeds will be used to reimburse the City for prior
expenditures on the Projects.
6. 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 "Bonds Year"); the
Debt Service Fund is used primarily to achieve a proper matching of taxes with principal and
interest payments within each Bonds Year; the Debt Service Fund will be depleted at least once
each Bonds Year except for a reasonable carryover amount not to exceed the greater of(i)the
earnings on the fund for the immediately preceding Bonds Year; or (ii) 1/12 of the principal and
interest payments on the Bonds for the immediately preceding Bonds 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.
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 (a) the
reasonably expected economic life of the Projects or (b)the remaining reasonably expected
economic life of the facilities originally financed by the Refunded Obligations.
9. To our best knowledge and belief, there are no facts, estimates or circumstances
which would materially change the foregoing conclusions.
10. To the extent of the principal amount of the Project Net Sales Proceeds, 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 Project Net Sales
Proceeds to pay capital costs (including capitalized interest) within the following time periods
(the "Two-Year Exception"):
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOMS,IOWA
Ames/419370-48/Closing Cert&Letter
(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 to yield and rebate
payments to the United State 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 the Project Net Sales Proceeds will be used solely for the
governmental purposes of the City and not to finance or improve private property except to the
extent necessary for the construction of public infrastructure.
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 an issuer whose arbitrage certifications
may not be relied upon.
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 May 30, 2013.
CITY OF AMES, IOW�A� CBy cam • 0444.,
Mayor
City Clerk
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA