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HomeMy WebLinkAboutAuthorizing Tax Anticipation Time Warrents for 1992 • ORDINANCE N08238-92 Passed by the Common Council of the City of South Bend, Indiana_ January 27, 92 19 Attest: `e-`,---` i 9jK..®-,Lr City Clerk IRENE K. GAMMON Attest: AMIN•••�� -=! President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana— January 28, 92 19 42,.-a-'-..e City Clerk IRENE K. GAMMON Approved and signed by men L a °1 ig 9c -` - Mayor ORDINANCE NO. J2a 3 -9a AN ORDINANCE AUTHORIZING TAX ANTICIPATION TIME WARRANTS FOR 1992 STATEMENT OF PURPOSE AND INTENT The following is an ordinance approving temporary tax anticipation borrowing; authorizing the City of South. Bend, Indiana (the "City") to make a temporary loan to meet current expenses for the use of the City' s General Fund during the perod of. January 1, 1992 to December 31, 1992, in anticipation of and not in excess of current taxes levied in the year 1991 and collectible in the year 1992; authorizing the issuance of tax anticipation time warrants to evidence such loans; appropriating and pledging the taxes to be received in such Funds to the punctual payment of such tax anticipation time warrants including the interest thereon; and fixing a time when this Ordinance shall take effect. A necessity exists for the making of temporary loans evidenced by tax anticipation time warrants for the City' s General Fund in anticipation of the receipt of current revenues for such Fund. actually levied and in the course of collection for the year 1992. The Controller has represented and the Common Council now finds that there will be insufficient funds in the General Fund to meet the. current expenses of the City payable form such Fund prior to the. distribution of taxes levied for such Fund on or before December 31, 1992, and hereby authorizes the making of a temporary loan to procure the funds necessary, in combination with other available funds, to meet such current expenses for such Fund for such period and to pay the necessary costs in connection with the issuance and sale of tax anticipation time warrants to evidence such temporary loan. The Common Council now finds that a temporary loan for the General Fund for such purposes should be made and that such tax anticipation time warrants shnnlrl hP i ccnatl anr9 cnlri c„l,icn+ The levy proposed for collection in the year 1992 is estimated to produce at least $25,253 ,984.00 in the City' s General. Fund on or before. December 31, 1992, which amount will equal or exceed the principal and interest cost of making a temporary loan for the General Fund.. For the above-stated reasons, and subject to and dependent upon the terms and conditions hereinafter set forth, the Common Council. seeks to authorize the issuance of such tax anticipation time warrants. with respect to City's General Fund and the sale of such. warrants pursuant to the provisions of I .C. 36-4-6. NOW, THEREFORE, BE IT ORDAINED BY THE SOUTH BEND COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AS FOLLOWS: Section 1. The City is hereby authorized, to make a temporary loan to meet current expenses pursuant to the provisions of I .C. 36-4-6 for the use and benefit of the General Fund of the City in an aggregate principal amount not to exceed Five Million Five Hundred. Thousand Dollars ( $5,500,000.00) in anticipation of current tax revenues actually levied. and in the course of collection for such Fund for the year 1992, which loan shall be evidenced by tax. anticipation time warrants of the City bearing interest at a rate or rates per annum not to exceed a maximum rate of eight percent ( 8%) , the exact rate or rates of interest to be determined by private sale as permitted. by law. Such warrants shall be dated as of the date or dates of delivery of such warrants. The warrants shall mature and be payable on December. 31, 1992. Warrants will bear interest at a rate or rates not to exceed eight percent ( 8%) per annum on any amounts not paid at maturity. Such warrants, including interest and all necessary costs incurred in connection with the issuance and sale of such warrants, shall be payable from the General Fund and there is hereby appropriated and pledged to the payment of such warrants, including interest and all necessary costs incurred in connection with the issuance and sale of such warrants, a sufficient amount of such warrants evidencing such temporary loan, together with such. issuance costs, with the amount of interest on such warrants computed. from the date or dates of such warrants to the date of maturity, at the interest rate or rates agreed to by the authorized purchaser or purchasers of such warrants. Section 2. The tax anticipation time warrants issued hereunder with respect to the General Fund are referred to herein collectively as the "Warrants" . All Warrants shall be executed in the name of the City by the original or facsimile signature of the Mayor of the City, countersigned by the City Controller, and the corporate seal of the City or a facsimile thereof shall be affixed thereto or printed thereon and attested by the original or facsimile signature of the City Clerk. All Warrants shall be payable at the office of Valley American Bank, 101 N. Main, South. Bend, Indiana., as Paying Agent, or any appointed successor Paying Agent upon presentation on or after their maturity date. Section 3 . All Warrants shall be issued in substantially the following form (all blanks, including the appropriate Fund, amounts, dates, statutory citations and other information, to be properly completed prior to the execution and delivery thereof) ; UNITED STATES OF AMERICA STATE OF INDIANA CITY OF SOUTH BEND No. $ CITY OF SOUTH BEND TAX ANTICIPATION TIME. WARRANT FOR VALUE RECEIVED, the City of South Bend, in the State of Indiana, promises to pay to the bearer hereof the sum of Dollars ( $ ) on the 31st day of December, 1992, with interest thereon at the rate of ( %) per annum from the date hereof to the date of payment, which interest is payable on the maturity date hereof. This Warrant will bear interest at the rate of ( %) per annum on any amounts not paid at maturity. Both principal of and interest on this Warrant are payable in lawful money of the United. States of America at the Office. of _ Smith RE?nd _ Tnai ana _ ac DaNri nrr and in strict conformity with I.C. 36-4-6 and all statutes pertaining or supplemental thereto, in order to provide funds for and to evidence a temporary loan to meet current expenses of the City of South Bend, Indiana Fund. This Warrant is issued. in anticipation of and is payable out of taxes levied and in the. course of collection of such Fund during the year 1992. It is hereby certified that all acts, conditions, and things to be done precedent to and in the execution, issuance and delivery of this Warrant have been done and performed in regular and due form, as provided by law, and this Warrant is within every limit indebtedness prescribed by the constitution and laws of the. State of. Indiana. Sufficient amounts of revenues from taxation for the City of South Bend, Indiana Fund, from levies now in the process of collection for the year 1992, are hereby irrevocably appropriated and pledged to the punctual payment of the principal and interest of this Warrant according to its terms. The consideration for this Warrant is a loan made to the City of South Bend, Indiana, in anticipation of. such taxes. IN WITNESS WHEREOF, the City of South Bend, Indiana, has caused this Warrant to be issued and signed in its name by the original or facsimile signature of its duly elected, qualified and acting Mayor, attested by the original or facsimile signature of its duly elected, qualified and acting Clerk, and countersigned by its duly appointed, qualified and. acting Controller of said City, and the seal of said. City to be hereto affixed or a facsimile therof to be printed hereon. Dated this day of , 1992. CITY OF SOUTH BEND, INDIANA By: Joseph E. Kernan, Mayor City of South Bend, Indiana ATTEST: Irene Gammon, City Clerk City of South Bend, Indiana COUNTERSIGNED: Katherine Humphreys, City Controller City of South Bend, Indiana Section 4. The City Controller is hereby authorized and directed to have the. Warrants prepared and the Mayor, the City Controller and the City Clerk are hereby authorized and directed to execute all such Warrants in the manner and substantially in the form provided in the Ordinance. Section 5. The City Controller, on behalf of the City, is. authorized to sell the Warrants at a price not less than the par value thereof to a purchaser or purchasers (the "Purchaser" ) in the multiples thereof, as the City Controller may designate, or as a. single Warrant for the total amount of the loan to such Fund evidenced by such Warrants. The Warrants shall be sold to the. Purchaser pursuant to the purchase agreement. (the "Purchase Agreement" ) between the City and the Purchaser, hereby authorized to be entered into and executed by the City Controller, on behalf of the City, subsequent to the date of the adoption of this Ordinance in accordance with the terms and conditions of this Ordinance, and with such Purchase Agreement to set forth the definitive terms and. conditions for such sale, including the interest rate or rates on the. Warrants, which shall not exceed the maximum authorized rate of interest for the Warrants issued pursuant to this Ordinance. The. Warrants sold to the Purchaser shall be accompanied by all. documentation required pursuant to the provisions of Indiana law and the Purchase Agreement, including without limitation on approving opinion of nationally recognized bond counsel, certification and guarantee of signatures and certification as too no litigation pending, as of the date of delivery of the Warrants to the Purchaser, challenging the validity or issuance of the Warrants. The entry by the City into the Purchase Agreement and the execution of the Purchase Agreement on behalf of the City by the City Controller, in. accordance with the Ordinance, are hereby authorized, approved and. ratified. Section 6. The proper officers of the City are hereby authorized. to deliver the. Warrants to the. Purchaser thereof upon receipt from such Purchaser of the agreed purchase price, pursuant to the Purchase Agreement. The Warrants of each purchase of each issue will be delivered as a single parcel at one time or pursuant to any agreement or understanding with respect to said delivery by and between the City Controller and the Purchaser of the Warrants. Section 7. The City Controller and other appropriate officers of the City are hereby authorized and directed to make such filings and requests, deliver such certifications, execute and deliver such Section 8. All resolutions and ordinances in conflict herewith are, to extent of such conflict, hereby repealed. Section 9. The City hereby covenants that the City and its officers shall not take any action or fail to take any action with respect to the proceeds of any of the Warrants or any investment earnings thereon which would cause the Warrant or any of the Warrants. to be "arbitrage bonds" under the Internal. Revenue of 198.6, as. amended, (the "Code" ) , or would otherwise cause the interest: on the Warrant or any of the Warrants to cease to be excludable from gross. income for purposes of Federal income taxation; and the City Controller and all other appropriate officers are hereby authorized and directed to take any and all actions and to make and deliver any and all reports, filing and certifications as may be necessary or appropriate to evidence., establish or ensure such continuing exclusion of the interest on the Warrants. The City shall comply with the arbitrage rebate requirements under Section 148 of the Code to the extent applicable.. Section 10. This Ordinance shall be in full force and effect. from and after the time it has been passed by the City Common. Council, signed by the President of the. City Common Council, approved by the Mayor, and otherwise executed and delivered, in accordance with any and all laws pertaining hereto. AF Member of I' a "Common Council REQUEST TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA TO MAKE A TEMPORARY LOAN FOR THE PURPOSES OF MEETING THE CURRENT EXPENSES OF THE GENERAL. FUND I, Katherine Humphreys, the duly appointed and acting Controller of the City of South Bend, Indiana (the "City" ) , in my capacity as chief fiscal officer of the City, do hereby certify as follows: 1. During the period from January 1, 1992 through December 31, 1992, there will not be sufficient funds in the City's General Fund to meet current and accruing expenses chargeable against such Fund prior to the distribution of tax funds to such Fund on or before December 31, 1992. 2. Temporary loans in an aggregate amount not less than the following amount, made in anticipation of current tax revenues of the City that have been levied and are in the. course of collection for such Fund for. the 1992 fiscal year, are required pursuant to the provisions of I.C. 36-4-6-20 in order to meet the current and accruing expenses chargeable. against such Fund.: General Fund -- $5,500,000.00 3 . As chief fiscal officer responsible for administering the City' s General. Fund, I hereby agree and covenant, with. respect to the proceeds of temporary loans made to or for the benefit of such Fund, not to take any action or to fail to take any action with respect to such proceeds or the interest earnings thereon that would result in constituting the warrants evidencing such loans as "arbitrage bonds" under the Internal. Revenue Code of 1986, as amended, or would otherwise cause the interest on the warrants to cease to be excludable from gross income for purposes of Federal. income taxation. IN WITNESS WHEREOF, I have executed this Request to the Common Council of the City of South Bend as o : the 8th day of January, 1992. Ka erine Hum p' .,eys Co troller, City of South Bend C:REQ-LOAN goUT ��` ,1 04/\hl' , :d II /Ai:t` : /,;.„\II/ Vii,": ,\ //�!,z City of South Bend 114,-k,:<--.7,-:-5�«4 Joseph E. Kernan, Mayor Department of Administration and Finance Katherine Humphreys, Director January 8, 1992 Steve Luecke President Common Council 400 County-City Bldg. South Bend, Indiana 46601 Dear President Luecke: Attached is an Ordinance requesting authorization to borrow Tax Anticipation Warrants for the General Fund. We will again be borrowing for the 1992 calendar year and will be repaying these loans with our December tax settlement. As you may recall from prior years, we decided to borrow for the full year in order to fully realize the arbitrage profits as well as to reduce the administrative expenses associated with this borrowing. I look forward to discussing this further with the Council. In the meantime, I will be happy to answer any questions you or any other Council member may have. Since ely, Rat ,erine Humphreys Director of Administration and Finance attachment C:L-SteveL, Pg. 8 County-City Building • South Bend, Indiana 46601 • 219/284-9742 Fax 219/284-9892 Catherine A. Hubbard John D. Leisenring c. J. Cowsert Personnel Director Chief Deputy Controller Safety & Risk Manager 284-9124 284-9483 284-9482 QQommtttn Report tIIn tac Comm Council of tlyr Mtn of l3outll Your Committee of the Whole to whom was referred BILL NO. 6-92 A BILL AUTHORIZING TAX ANTICIPATION TIME WARRANTS FOR 1992. Respectfully report that they have examined the matter and that in their opinion This bill should be recommended to the Council favorable. Ann Puzzello Chairman