HomeMy WebLinkAboutA022 - Letter to Dorsey & Whitney dated September - Fully executed closing certificate and IRS 8038-G filing form r-7y 0
Ames-
Smart Choice
September 18, 2018
Dorsey & Whitney LLP
801 Grand, Suite 4100
Des Moines, Iowa 50309
Attention Robert E. Josten
RE: Your File No. 419370-61
General Obligation Corporate Purpose
Series 2018A
Dear Mr. Josten:
Enclosed please find the fully executed:
1. Closing Certificate
2. IRS 8038-G filing Form
If you have any questions, please call. Thank you for your assistance.
Sincerely,
Diane R. Voss
City Clerk
/dry
Enclosures
City Clerk's Office 515.239.5105 main 515 Clark Ave.,P.O.Box 811
515.239.5142 fax Ames,IA 50010
www.CityofAmes.or9
Please Return To:
Ames/419370-61 /Closing Cert&Ur DORSEY & WHITNEY
ATTORNEYS AT LAW
801 Grand, Suite 4100
CLOSING CERTIFICATE 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 $7,490,000 General Obligation Corporate Purpose Bonds, Series 2018A, dated September
10, 2018 (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 August 28, 2018
(the "Resolution"), and a loan agreement dated as of September 10, 2018 (the "Loan
Agreement"), by and between the City and Janney Montgomery Scott LLC, Philadelphia,
Pennsylvania (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 $8,055,195.46 which amount represents the par amount
of the Bonds ($7,490,000), plus reoffering premium ($610,151.60) minus underwriter's discount
($44,956.14). The Bonds mature on June 1 in each of the years, in the respective principal
amounts and bear interest payable semiannually on each June 1 and December 1, commencing
June 1, 2019, 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 constructing improvements to streets, acquiring emergency services communication
equipment and making improvements at the City's Fire Station #1 (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 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.
DORSEY & WHITNEY LLP,ATTORNEYS, DES MOINES, IOWA
Ames/419370-61/Closing Cert&Ltr
We further certify as follows:
1. The net sales proceeds of the Bonds are $8,100,151.60 (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 $7,490,000.00
Reoffering Premium ? $610,151.60
$8,100,151.60
'USES
Deposit to Project Fund $7,997,000.00
;Underwriter's Discount $44,956.14 j
Costs of Issuance $54,800.00
.Additional Proceeds $3,395.46
$8,100,151.601:
a. $99,756.14 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. $7,997,000 of the Net Sales Proceeds will be used to pay the costs of the
Projects (the "Net Sales Proceeds"), and the Net Sales Proceeds will be expended and
invested in accordance with Section 3 hereinafter set forth.
C. The amount received as Additional Proceeds (.$3,395.46) will be used for
any lawful purpose of the City.
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 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 & WHITNEV LLP,ATTORNEYS,DES MOINES,IOWA
W, Ames/419370-61/Closing Cert&Ltr
(11) 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 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 Net Sales Proceeds to the payment of costs of
the Projects will proceed with due diligence.
4. The City Council adopted a resolution on February 13, 2018 declaring its official
intent to acquire and construct the Projects and finance the same with bonds or other obligations
(the "Intent Resolution").
The City certifies that 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 adoption of the Intent
Resolution, except for (1) 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 Net Sales Proceeds 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 expenditure was originally paid or (ii)the
date the Projects are placed in service (or abandoned); and such allocations will be made by the
City in writing.
The City will seek reimbursement of prior expenditures already paid by the City from the
proceeds of the Bonds in the amount of$10,323.
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.
6. 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).
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DORSEY & WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-61/Closing Cert&Ltr
7. The weighted average maturity of the Bonds, does not exceed 120% of the
reasonably expected economic life of the Projects.
8. The City intends that it will be the sole owner of the Projects financed by the
Bonds and agrees that it will not use, or suffer or permit to be used by any natural person, firm,
joint venture, association, partnership, business trust, corporation, public body, agency or
political subdivision thereof or any other similar entity ("Person") by lease or other use
agreement, any of the Projects by any Person who is not a "governmental person" as defined in
Section 1.141-1 of the Regulations, or if such Person is a not a "governmental person" such use
meets the requirements set out in Section 1.141-3 of the Regulations, Internal Revenue Service
Revenue Procedure 97-13 and Internal Revenue Service Revenue Procedure 2001-39 (or any
applicable successor procedures, rulings or regulations) or is allowable private activity pursuant
to Section 1.141 of the Regulations and Section 141 of the Code (or any applicable successor
procedures, rulings or regulations). The City agrees that it will not allow any other user to use or
occupy the Projects for any purposes which would cause interest on the Bonds to be includable
in gross income under Section 103 of the Code.
9. To the extent of the principal amount of the 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 Net Sales Proceeds to pay
capital costs (including capitalized interest) 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 Net Sales Proceeds are spent in accordance with these provisions, the 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 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.
10. 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.
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DORSEY S WHITNEY LLP,ATTORNEYS, DES MOINES,IOWA
Ames/419370-61 /Closing Cert&Ltr
11. We further certify that the City does not currently have outstanding tax exempt
obligations issued during the current calendar year, including the Note, 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 Note, would exceed $10,000,000.
12. 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.
13. To our best knowledge and belief, there are no facts, estimates or circumstances
which would materially change the foregoing conclusions
IN WITNESS WHEREOF, we have hereunto affixed our hands, as of September 10,
2018.
CITY F A ES, 10 'A
B
Mayor
At t, w;,
City Clerk
-s-
DORSEY & WHITNEY LLP,ATTORNEYS, DES MOINES,IOWA
Ames/419370-61
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev.September 2011) ►Under Internal Revenue Code section 149(e) OMB No.1545-0720
►See separate instructions.
Department of the Treasury Internal Revenue Service Caution:It the issue price is under$100,000,use Form 8038-GC.
Reporting Authority If Amended Return,check here ► ❑
1 Issuer's name 2 Issuer's employer identification number(EIN)
City of Ames,Iowa 42-6004218
3a Name of person(other than issuer)with whom the IRS may communicate about this return(see instructions) 3b Telephone number of other person shown on 3a
4 Number and street(or P.O.box if mail is not delivered to street address) Room/suite 5 Report number(For IRS Use Only)
PO Box 811 13
6 City,town,or post office,state,and ZIP code 7 Date of issue
Ames,Iowa 50010-0811 September 10,2018
8 Name of issue 9 CUSIP number
General Obligation Corporate Purpose Bonds,Series 2018A 030807 Z38
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information(see 10b Telephone number of officer or other
instructions) employee shown on 10a
Diane R.Voss,City Clerk 515.239-5105
Type of Issue (enter the issue price).See the 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 ► street and fire station improvements&emergency services communication equipment acquisition 18 8,100,151 60
19 If obligations are TANs or RANs, check only box 19a . . . . . . . . . . . . . ► ❑
If obligations are BANS,check only box 19b . . . . . . . . . . . . . . . . ► ❑
20 If obligations are in the form of a lease or installment sale,check box . . . . . . . . ► ❑
Description of Obligations. Complete for the entire issue for which this form is being filed.
(a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted price at maturity average maturity (e)Yield
21 06101/2030 8,100,151.60 7,490,000 6.6099 years 2.4310
Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22
23 Issue price of entire issue(enter amount from line 21,column(b)) . . . . . 23 8,100,151 60
24 Proceeds used for bond issuance costs(including underwriters'discount). . 24 99,756 14
25 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) . . . . . . . . . . . . . . . . . . . . �8,000,395
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 . . . . ► years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► 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►(MM/DD/YYYY)
For Paperwork Reduction Act Notice,see separate instructions. Cat.No.63773S Form 8038-G(Rev.9-2011)
Form 8038-G(Rev.9-2011) Page 2
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
(GIC)(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a
b Enter the final maturity date of the GIC►
c Enter the name of the GIC provider►
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units . . . . . . . . . . . . . . . . . . . . . . . 37
38a If this issue is a loan made from the proceeds of another tax-exempt issue,check box► ❑and enter the following information:
b Enter the date of the master pool obligation►
c Enter the EIN of the issuer of the master pool obligation►
d Enter the name of the issuer of the master pool obligation►
39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III)(small issuer exception),check box . . . . ► ❑✓
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑
41a If the issuer has identified a hedge,check here► ❑ and enter the following information:
b Name of hedge provider►
c Type of hedge►
d Term of hedge►
42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ► ❑
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations(see instructions),check box . . . . . . . . ► ❑✓
44 If the issuer has established written procedures to monitor the requirements of section 148,check box . . . . . ►
45a If some portion of the proceeds was used to reimburse expenditures,check here► ❑✓ and enter the amount
of reimbursement . . . . . . . . . ► $10,323
b Enter the date the official intent was adopted► February 13,2018
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 a true,correct,and complete.I furt r declare that I consent to the IRS's disclosure the issuer's r i format n,as nece sary to
and process is n,to the pers h I ve author' above. �qW- �.
Consent ' Diane R.Voss,City Clerk C,—f 7 n
Sign.ure of issuer's a rized epresentative ate Type or print name and title
Print/Type preparer's name Prpp�rpr's signaturie Date Check ❑ if PTIN
Paid
Preparer
Robert E.Josten / �' — self-employed P01075995
Use Only Firm's name No- Dorsey&Whitney LLP' _,0 Firm's EIN ► 41.0223337
Firm's address ► 801 Grand Ave.,Suite 416Q,Des Moines,Iowa 50309-8002 Phone no. 515-283-1000
Form 8038-G(Rev.9-2011)