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HomeMy WebLinkAboutA008 - Bond Documents from Dorsey & Whitney dated October 27, 2015 Ames/419370-52/SetHrng20150ectricRev LA P SET DATE FOR HEARING ON ELECTRIC REVENUE LOAN AGREEMENT 419370-52 Ames, Iowa October 27, 2015 The City Council of the City of Ames, Iowa, met on October 27, 2015, at 7:00 o'clock p.m., at the City Hall Council Chambers. The Mayor presided and the roll was called showing the following members of the City Council present and absent: Present: Betcher, Corrieri, Gartin, Goodman, Nelson, Orazem Absent: None. Council Member Corrieri introduced the resolution hereinafter next set out, setting a date for hearing on an electric revenue loan agreement in a principal amount not to exceed $10,950,000, and moved its adoption, seconded by Council Member Gartin; and after due consideration thereof by the City Council, the Mayor put the question upon the adoption of the said resolution and the roll being called, the following named Council Members voted: Ayes: Betcher, Corrieri, Gartin, Goodman, Nelson, Orazem Nays: None. Whereupon, the Mayor declared the resolution duly adopted as hereinafter set out. -1- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/419370-52/SetHrng2015ElectricRev LA RESOLUTION NO. 15-645 Resolution to fix a date for a public hearing on an electric revenue loan agreement in a principal amount not to exceed $10,950,000 WHEREAS, the City of Ames (the "City"), in Story County, State of Iowa, has established a municipal electric light and power plant and system (the "Utility"); and WHEREAS, the management and control of the Utility are vested in the City Council and no board of trustees exists for that purpose; and WHEREAS, the City proposes to enter into an Electric Revenue Loan Agreement (the "Loan Agreement") in a principal amount not to exceed $10,950,000, pursuant to the provisions of Section 384.24A of the Code of Iowa, for the purpose of financing construction of improvements to the Utility; and WHEREAS, it is necessary to fix a date of meeting of the City Council at which it is proposed to hold a hearing on the proposal to enter into the Loan Agreement and to give notice thereof as required by such law; NOW, THEREFORE, Be It Resolved by the City Council of the City of Ames, Iowa, as follows: Section 1. The City Council shall meet on the 10t" day of November, 2015, at the City Hall Council Chambers, Ames, Iowa, at 7:00 o'clock p.m., at which time and place a hearing will be held on the proposal to enter into the Loan Agreement as set out in the preamble hereof. Section 2. The City Clerk is hereby directed to give notice of the proposed hearing, setting forth the amount and purpose thereof, the time when and place where the hearing will be held, by publication at least once and not less than 4 nor more than 20 days before the date of the hearing, in a legal newspaper which has a general circulation in the City. The notice shall be in substantially the following form: -2- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/419370-52/SetHrng20I5E1ectricRev LA NOTICE OF HEARING ON ELECTRIC REVENUE LOAN AGREEMENT IN A PRINCIPAL AMOUNT NOT TO EXCEED $10,950,000 The City Council of the City of Ames, Iowa, will meet on the 10th day of November, 2015, at the City Hall Council Chambers, Ames, Iowa, at 6:00 o'clock p.m., for the purpose of holding a public hearing on a proposal to enter into a loan agreement (the "Loan Agreement") in a principal amount not to exceed $10,950,000, for the purpose of paying the cost, to that extent, of constructing improvements to the municipal electric light and power plant and system. The Loan Agreement is proposed to be entered into pursuant to authority contained in Section 384.24A of the Code of Iowa. The Loan Agreement will not constitute a general obligation of the City, but will be paid solely and only from the net revenues of the municipal electric light and power plant and system. At that time and place, oral or written objections may be filed or made to the proposal to enter into the Loan Agreement. After receiving objections, the City may determine to enter into the Loan Agreement, in which case, the decision will be final unless appealed to the District Court within fifteen (15) days thereafter. By order of the City Council of the City of Ames, Iowa. Diane Voss City Clerk -3- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/419370-52/SetHmg2015EIectricRev LA Section I All resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of such conflict. Passed and approved October 27, 2015. Mayor Attest: City Clerk -4- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/419370-52/SetHrng2015E1ectricRev LA It was reported that, in order to preserve the City's potential eligibility to issue federally tax exempt bonds for the construction of the electric system improvements, it would be necessary for the Council to adopt a resolution declaring the Council's intent to spend cash and later reimburse those expenses from the proceeds of a bond issue. Council Member Corrieri introduced the resolution next hereinafter set out, related to financing a project, and moved its adoption, seconded by Council Member Gartin. After due consideration and discussion, the Mayor put the question upon the adoption of said resolution, and the roll being called, the following Council Members voted: Ayes: Betcher, Corrieri, Gartin, Goodman,Nelson, Orazem Nays: None. Whereupon, the Mayor declared the resolution duly adopted as hereinafter set out. -5- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/4 1 93 70-52/SetHrng2015E1ectricRev LA RESOLUTION NO. 15-645a Resolution relating to financing of projects to be undertaken by the City of Ames, Iowa; establishing compliance with reimbursement bond regulations under the Internal Revenue Code BE IT RESOLVED by the City Council (the "Council") of the City of Ames, Iowa (the "City"), as follows: Section 1. Recitals. (a) The Internal Revenue Service has issued Section 1.150-2 of the Income Tax Regulations (the "Regulations") dealing with the issuance of bonds, all or a portion of the proceeds of which are to be used to reimburse the City for project expenditures made by the City prior to the date of issuance. (b) The Regulations generally require that the City make a prior declaration of its official intent to reimburse itself for such prior expenditures out of the proceeds of a subsequently issued borrowing and that the borrowing occur and the reimbursement allocation be made from the proceeds of such borrowing within a certain period after the payment of the expenditure or the date the project is placed in service; and (c) The City desires to comply with requirements of the Regulations with respect to projects hereinafter identified. (d) The City has established the Municipal Electric Light and Power Plant and System (the "Utility") and has determined to construct and finance certain public improvements to such System. Section 2. Official Intent Declaration. (a) The City proposes to construct improvements to the Utility and to make original expenditures with respect thereto prior to the issuance of bonds, notes or other obligations (the "Bonds") and reasonably expects to issue Bonds for such projects in the maximum principal amount shown below: Maximum Amount of Bonds Projects Expected to be Issued for Projects Fuel Conversion for Units #7 and#8 and cooling tower repairs in Municipal Electric Light and Power Plant and System $10,175,000 Other than (i) expenditures to be paid or reimbursed from sources other than the Bonds or (ii) expenditures made not earlier than sixty days prior to the date of this Resolution or (iii) expenditures amounting to the lesser of$100,000 or 5% of the proceeds of the Bonds or -6- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/419370-52/SetHrng2015ElectricRev LA (iv) expenditures constituting preliminary expenditures as defined in Section 1.1 50-2(f)(2) of the Regulations, no expenditures for the project have heretofore been made by the City for which the City will seek reimbursement from the proceeds of the Bonds. (b) This declaration is a declaration of official intent adopted pursuant to Section 1.150-2 of the Regulations. Section 3. Budgetary Matters. As of the date hereof, there are no City funds reserved, allocated on a long term basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long term basis or otherwise set aside) to provide permanent financing for the expenditures related to the projects, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the City's budgetary and financial circumstances as they exist or are reasonably foreseeable on the date hereof, all within the meaning and content of the Regulations. Section 4. Reimbursement Allocations. The City Finance Director shall be responsible for making the "reimbursement allocations" described in the Regulations, being generally the transfer of the appropriate amount of proceeds of the Bonds to reimburse the source of temporary financing used by the City to make payment of the prior costs of the projects. Each allocation shall be evidenced by an entry on the official books and records of the City maintained for the Bonds, shall specifically identify the actual prior expenditure being reimbursed or, in the case of reimbursement of a fund or account, the fund or account from which the expenditure was paid, and shall be effective to relieve the proceeds of the Bonds from any restriction under the bond resolution or other relevant legal documents for the Bonds, and under any applicable state statute, which would apply to the unspent proceeds of the Bonds. Section 5. Repealer. All resolutions, parts of resolutions, or actions of the Council in conflict herewith are hereby repealed, to the extent of such conflict. Passed and approved October 27, 2015. YL-+ cJe'• C�yw Mayor 14 Attest: City Clerk -7- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/419370-52/SetHrng2015EIectricRev LA At the conclusion of the meeting, and upon motion and vote, the City Council adjourned. Mayor Attest: City Clerk -8- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Ames/419370-52/SetHrng2015ElectricRev LA STATE OF IOWA COUNTY OF STORY SS: CITY OF AMES I, the undersigned, City Clerk of the City of Ames, do hereby certify that attached hereto is a true and correct copy of the proceedings of the City Council relating to fixing a date for a hearing on the City Council's proposal to take action in connection with a loan agreement, as referred to therein. WITNESS MY HAND this 27 day of November, 2015. City Clerk -9- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA