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HomeMy WebLinkAbout9470-03 Authorizing the Mayor and or Controller of South Bend to make temporary loansORDINANCE No. Passed by the Common Council of the City of South Bend, Indiana November 24, 03 20 Attest: Attest: Presented by me to the Mayor of the City of South Bend, Indiana November 25, 03 20 City Clerk President of Common Cor~ncil City Clerk Approved and signed by me November 26, 20 03 Mayor ORDINANCE NO. I ~ ~ ~ " ~~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE MAYOR AND OR CONTROLLER OF THE CITY OF SOUTH BEND TO MAKE TEMPORARY LOANS TO PAY OFF PREVIOUSLY ISSUED TEMPORARY LOAN TAX ANTICIPATION WARRANTS; AND TO ISSUE NEW TEMPORARY LOAN TAX ANTICIPATION TIME WARRANTS TO EVIDENCE SUCH LOANS AND APPROPRIATING AND PLEDGING TAXES TO BE RECEIVED IN SUCH FUNDS TO THE PAYMENT OF THE NEW WARRANTS INCLUDING THE INTEREST THEREON STATEMENT OF PURPOSE AND INTENT On May 12, 2003, due to property tax reassessment and the anticipated delays in the timing of the City of South Bend's receipt of tax revenues for the fiscal year ending December 31, 2003, this Council in Ordinance No. 9417-03 authorized the Mayor and or the Controller to make temporary loans to meet current operating expenses of various funds of the City in anticipation of and not in excess of current taxes levied in the year 2002 and collectible in the year 2003. Ordinance Number 9417-03 further authorized the issuance of temporary loan Tax Anticipation Time Warrants to evidence such loans and the sale of such warrants. The City hopes and expects that by December 31, 2003 it will receive property tax revenues for 2003 based upon the timing of tax reassessment bills to South Bend residents and the collection of tax revenues. Nonetheless, due to the complication caused by property tax reassessment and the method of property valuation, a possibility exists that the City will not receive its 2003 property tax revenues by December 31, 2003 which will render it unable to pay off the tax anticipation time warrants issued pursuant to Ordinance Number 9417-03 which tax warrants mature and are payable in full and with interest on December 31, 2003. This Ordinance will authorize the City of South Bend's Mayor and/or Controller to make such temporary loans as may be necessary in order to pay off the outstanding tax anticipation warrants authorized by Ordinance Number 9417-03 and to issue new temporary loan tax anticipation time warrants to evidence the loans for payoff of the prior warrants, in a sum not to exceed taxes levied in the year 2002 and collectible in 2003. The new tax warrants shall be subject to the terms and conditions set forth at Indiana Code 36-4-6. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA: Section I. As declared in this Council's prior Ordinance 9417-03 an emergency exists for the borrowing of money and the City by its Mayor is hereby authorized to make temporary loans to pay off and retire the previously issued temporary loan tax anticipation time warrants which were authorized by prior Ordinance 9417-03 and which tax anticipation warrants expire December 31, -1- 2003. The Mayor is further authorized to issue new temporary loan tax anticipation time warrants to evidence the loans required to redeem and retire the temporary loan tax anticipation time warrants issued pursuant to Ordinance No. 9417-03. The issuance of new temporary loan tax anticipation time warrants shall conform to the requirements of Indiana Code 36-4-6. Section II. All temporary loan tax anticipation time warrants issued pursuant to this Ordinance (" the new Warrants") shall be dated as of the date of delivery. For accounting purposes a separate new Warrant or Warrants shall be issued with respect to each prior warrant which is paid off with loan(s) authorized by this Ordinance. The amount of the new Warrant(s) shall correspond to the City operating funds for which the previously issued warrants were connected, and the new Warrants shall mature and be payable on February 27, 2004 in the following principal amounts: Principal Amount: $41,319,967 Maturing December 31, 2003 Fund: General Fund (# 101) Not to Exceed: $41,319,967 Principal Amount: $6,979,850 Maturing December 31, 2003 Fund: Parks 7 Recreation (#201-1100) Not to Exceed: $6,979,850 Principal Amount: $925,710 Principal Amount: $1,299,696 Maturing December 31, 2003 Maturing December 31, 2003 Fund: Cumulative Capital Development (#406} Fund: Fire Pension (#701) Not to Exceed: $925,710 Not to Exceed: $1,299,696 Principal Amount:$1,166,394 Principal Amount: $606096 Maturing December 31, 2003 Maturing December 31, 2003 Fund: Police Pension (#702) Fund: Studebaker Bond (#310) Not to Exceed: $1,166,394 Not to Exceed: $606,096 Principal Amount: $1,301,840 Maturing December 31, 2003 Fund: Hall of Fame Bond (#313) Not to Exceed: $1,301,840 The new Warrants authorized herein shall bear interest prior to maturity at a rate or rates per annum not to exceed a maximum of eight percent (8.00%). The exact rate or rates of interest are to be determined under the terms of a Warrant Purchase Agreement, as hereinafter defined. Warrants not timely paid will bear interest at a rate or rates after maturity asset forth in the Warrant Purchase Agreement. Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. It is understood that principal shall not be payable and interest shall not accrue on any Warrant or Warrants issued pursuant to this Ordinance until such principal amount has been advanced pursuant to requests made by the City to the Purchaser. In the event that the total principal amount of the Warrants is not advanced to the City, the principal amount of such Warrant shall be reduced to effect such reduction. The maximum principal amount of the Warrants as set forth herein shall be reduced as necessary to comply with the Internal Revenue Code of 1986, as amended (the "Code"). -2- Section III. With respect to each Fund and each new Warrant maturity date, the appropriate officers of the City are authorized to deliver a principal amount of new Warrants up to or less than the maximum amount established for any such Fund or maturity date in Section I hereof in order to comply with all applicable laws. The new Warrants shall be subject to redemption as provided in an Issuer's Certificate to be executed by the mayor of the City (the "mayor") and the City Controller. All new Warrants will be delivered at the time of payment with respect to any Fund or otherwise as appropriate and in accordance with the terms of the new Warrant Purchase Agreement. Section IV. The principal of and interest on the new Warrants, together with all necessary costs incurred in connection with the issuance and sale of the Warrants, shall be payable from tax revenues to be received in the respective Fund upon which such new Warrant is issued. There is hereby appropriated and pledged to the payment of all new Warrants issued with respect to each Fund, including interest and all necessary costs incurred in connection with the issuance and sale of the new Warrants, a sufficient amount of the tax revenues, levied in 2002, and actually received in 2004, for such Fund and in anticipation of which the Warrants have been issued, for the punctual payment of the principal of and interest on the new Warrants evidencing such temporary loans, together with such issuance costs, if any. Section V. The City Controller, on behalf of the City, is authorized to sell the new Warrants via negotiated sale at a price not less than the par value thereof to a purchaser or purchasers (the "Purchaser") in the denomination of One Hundred Thousand Dollars ($100,000), and any integral multiple of One Dollar ($1.00) in excess of One Hundred Thousand dollars ($100,000) of single maturities. The new Warrants shall be sold to the Purchaser pursuant to the purchase agreement (the "new Warrant 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 new Warrant Purchase Agreement to set forth the definitive terms and conditions of such sale, including the interest rate or rates on the new Warrants, which shall not exceed the maximum authorized rate of interest for the new Warrants issued pursuant to this Ordinance. The new Warrants sold to the Purchaser shall be accompanied by all documentation required pursuant to the provisions of Indiana law and the new Warrant Purchase Agreement, including without limitation an approving opinion of nationally recognized bond counsel, certification and guarantee of signatures and certification as to no litigation pending, as of the date of delivery of the new Warrants to the purchaser, challenging the validity or issuance of the new Warrants and certification from the Purchaser that it is a "sophisticated investor". The entry by the City into the new Warrant Purchase Agreement and the execution of the new Warrant Purchase Agreement on behalf of the City by the City Controller, in accordance with the Ordinance, are hereby authorized, approved and ratified. Section VI. The new Warrants issued hereunder with respect to the Funds shall be executed in the name of the City by the manual or facsimile signature of the Mayor of the City, countersigned by the manual or facsimile signature ofthe City Controller, and the corporate seal ofthe City affixed thereto, and attested by the manual or facsimile signature of the Clerk of the City (the "Clerk"), provided, however, that at least one such signature on the new Warrants shall be manual. All new Warrants shall be payable in lawful money of the United States of America at the office of the City Controller as Paying Agent. -3- Section VII. The Warrants with respect to each Fund shall be issued in substantially the following form (all blanks, including the appropriate amounts, dates, and other information to be properly completed prior to the execution and delivery thereof [Form of Warrant} UNITED STATES OF AMERICA STATE OF INDIANA Due Date: February 27, 2004 COUNTY OF ST. JOSEPH CITY OF SOUTH BEND, INDIANA TEMPORARY LOAN TAX ANTICIPATION TIME WARRANT ( FUND) FOR VALUE RECEIVED, on or before February 27, 2004, the City of South Bend, Indiana (the "City). shall pay to the amount of $ (or so much thereof as maybe advanced from time to time and be outstanding as evidenced by the records of the registered owner making payment for this Warrant, or its assigns) pursuant to a certain Warrant Purchase Agreement between the Bond Bank and the City, dated as of (the "Agreement") In addition, the City of The Due Date hereof shall pay to the bearer hereof interest at the rate of _ per annum on the outstanding principal amount, with such interest to be calculated on the basis of a 360-day year comprised of twelve 30-day months. Both principal of and interest of this warrant are payable in lawful money of the United States of America of the Officer of the Controller of the City, as Paying Agent, or any appointed successor Paying Agent upon presentation on or after their maturity date. This Warrant evidences a temporary loan to provide funds to retire certain previously issued tax warrants which expired December 31, 2003 the proceeds of which were used to meet current expenses of the Fund, and this Warrant has been authorized by an ordinance passed and adopted by the common Council of the City of South Bend, Indiana, on , 2003, in accordance with Indiana Code, Title 36, Article 4, Chapter 6, and all other acts amendatory thereof or supplemental thereto. This Warrant is issued in anticipation of the tax levy which has been made for the Fund in the year 2003, which tax levy is now in the course of collection, and which may not be received unti12004. There has been irrevocably appropriated and pledged to the payment in full of the principal of and interest on this Warrant a sufficient amount of the revenues to be derived from the Fund tax levy. It is further hereby certified, recited, and declared that all acts, conditions, and things required by law precedent to the issuance and execution of this Warrant have been properly done, have happened, and have been performed in the manner required by the constitution and statutes of the State of Indiana relating thereto; that the _ Fund tax levy from which (together with other amounts in the Fund) this Warrant is payable, is a valid and legal levy; and the City will reserve a sufficient amount of the proceeds of the Fund tax levy currently in the course of collection for the timely payment of the principal of and interest on this Warrant in accordance with its terms. IN WITNESS WHEREOF, the City of South Bend, in the County of St. Joseph, State of Indiana, has caused this Warrant to be executed in its corporate name by the Mayor of the City of South Bend, Indiana, countersigned by the City Controller of the City of South Bend, Indiana, and its corporate seal to be hereunto affixed and attested by the City Clerk of the City of South Bend, Indiana, all as of the day of , 2003. -4- CITY OF SOUTH BEND, INDIANA BY: Stephen J. Luecke, Mayor COUNTERSIGNED: Frederick B. Ollett, III, Controller (SEAL) ATTEST: Loretta J. Duda [End of form of Warrant] Section VIII. The City Controller is hereby authorized and directed to have the new Warrants prepared, and the Mayor, the City Controller, and the City Clerk are hereby authorized and directed to execute all new Warrants in the manner and substantially the form provided in this Ordinance. Section IX. The City Controller is hereby authorized to deliver the new Warrants to the Purchaser, upon receipt from the Purchaser of payment in accordance with the terms of the new Warrant Purchase Agreement. Section X. 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 documents and instruments, and otherwise take such actions as are necessary or appropriate to carry out the terms and conditions of this Ordinance and the actions authorized hereby and thereby. Section XI. The City hereby covenants that the City and its officers shall not take any action of fail to take any action with respect to the proceeds of any of the new Warrants or any investment earnings thereon which would result in constitution any of the Warrants as "arbitrage bonds" under the Code and any and all final or proposed regulations or rulings applicable thereto, or which would otherwise cause the interest on any of the new 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, filings, and certifications as may be necessary or appropriate to evidence, establish, or ensure such continuing exclusion of the interest on the new Warrants. Section XII. All resolutions and ordinances in conflict herewith are, to extent of such -5- conflict, hereby repealed. Section XIII. This Ordinance shall be in full force and effect from and after the time it has been adopted by the Common Council, approved by the Mayor, and otherwise executed and delivered in accordance with any and all laws pertaining thereto. Member, South Bend Commo Council 1 st READING ~ ~' ~ 0" 0 3 PUBLIC HEARWG ~ ~-2~'~ 3 3 rd READING ~'_ Z`~-43 NOT APPROVED REFERRED PASSED l ~~2y 4 3 -6- ~'it~~ to ~ier~'~ ~fftc~ ~z ~~l - 3 ~~~~ do~srra a. tw~r 678YCt.ERtit~ ~ D'~~, taw TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 90-03 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE MAYOR AND OR CONTROLLER OF THE CITY OF SOUTH BEND TO MAKE TEMPORARY LOANS TO PAY OFF PREVIOUSLY ISSUED TEMPORARY LOAN TAX ANTICIPATION WARRANTS; AND TO ISSUE NEW TEMPORARY LOAN TAX ANTICIPATION TIME WARRANTS TO EVIDENCE SUCH LOANS AND APPROPRIATING AND PLEDGING TAXES TO BE RECEIVED IN SUCH FUNDS TO THE PAYMENT OF THE NEW WARRANTS INCLUDING THE INTEREST THEREON Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Karl King Chairman COUNTY-CrCY BU[LDiNG SouTlt BEND, INDUNA 46601-1830 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR PHONE 574/235-9216 FAx 574/235-9928 TDD 574/ 235-5567 DEPARTMENT OF ADMINISTRATION AND FINANCE FREDERICK B. OLLETT, III CONTROLLER November 5, 2003 Ms. Karen White, President South Bend Common Council 4"' Floor, County-City Building South Bend, IN 46601 Re: Ordinance to Make Loans for Repayment of Temporary Loan Anticipated Tax Warrants and for Issuance of New Warrants Dear Ms. White: As the Common Council is aware, this is an unusual year in terms of tax revenue receipts due to reassessment and the revised formula for property valuation. Consequently the Common Council adopted Ordinance 9417-03 on May 12, 2003 which provided for the Mayor and or Controller to make temporary loans to meet current operating expenses of various funds throughout the City and to issue temporary loan tax anticipation time warrants to evidence such loans and the sale of such warrants. The tax anticipation time warrants issued pursuant to Ordinance 9417-03 expire on December 31, 2003. Although the City Controller's office has been assured by the St. Joseph County Treasurer that the City's portion of tax revenues levied in 2002 and collected in 2003 will be paid to the City on December 31, 2003, it is possible that this will not occur due to delays in the issuance of citizen's tax bills. The attached Ordinance is intended to cover such a contingency. It provides for the Mayor and or Controller to make new loans to pay off the outstanding temporary loan anticipation tax warrants issued pursuant to prior Ordinance 9417-03, and to issue and sell new temporary loan tax anticipation time warrants to be paid from property tax revenues payable to the City for Fiscal Year 2003 but which may not be actually received until Fiscal Year 2004. The new temporary loan tax anticipation time warrants to be issued pursuant to the attached ordinance will mature February 27, 2004, and it is understood that these tax warrants would not exceed the tax revenue anticipated for Fiscal Year 2002 payable 2003 (but which might be received after December 31, 2003). The tax levy which will produce the revenue to pay these new tax warrants is estimated to produce in the aggregate an amount equal to or in excess of the principal and interest cost of making temporary loans to retire the previously issued tax warrants. I will be available to answer any questions you have about this Ordinance in your Committee meeting, and will make the presentation to the full Council at its public hearing. Thank you 'L'8Ti5ithration of this-Ordu ~~ed t~8 Csf~''`.'-~ ~fic~ ~ " "''" ,~ ®ti3tti~~6. ~~~H Sincerely, ~~ / ~ Frederick B. Ollett, III ~~ CATHERINE A. HUBBARD-$HEAD LIZ ROWS THOMAS $KARBEK SUSAN WALLACE DIRECTOR DIRECTOR DIRECTOR MANAGER HUMAN RESOURCES CITY FINANCE BUDGET'[NG A' FINANCLSL REPORTING BENEFITS