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HomeMy WebLinkAboutAuthorizing $5,000,000 Economic Development Revenue Bonds - Brethren Care of South Bend Inc ProjectORDINANCE No 6679 -79 Passed by the Common Council of the City of South Bend, Indiana Attest: vember 15 j1- 19 79 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Indiana City Clerk of Common Council November 16 19 79 IRENE K. GAMMON Approved and signed by me Clerk ORDINANCE NO. ( -1-'70 - 79 AN ORDINANCE authorizing and providing for the financing and equipping of an "economic development facility "; authorizing the issuance of not to exceed $5,000,000 Economic Development Revenue Bonds, 1979 Series B (Brethren Care of South Bend, Inc., Project) to finance the balance of the costs of the "economic development facility "; approving of and authorizing the terms of said bonds; authorizing the execution and delivery of a Security Agreement and a Trust Indenture securing said bonds; authorizing the assignment of a Promissory Note, 1979 Series B; approving the exe- cution and distribution of Preliminary and final Official Statements describing said bonds; approving the execution of a bond purchase agreement and confirming the sale of said bonds pursuant to the terms thereof; and approving other matters pertaining thereto. WHEREAS, the City of South Bend, Indiana, a municipal corporation of the State of Indiana (the "Issuer "), is authorized by the provisions of Title 18, Article 6, Chapter 4.5, Indiana Code of 1971, as supplemented and amended (the "Act "), to provide for the acquisition, construction and equipping of "economic development facilities" within or without the boundaries of the Issuer; and WHEREAS, the Issuer is authorized by the Act to issue economic development revenue bonds payable solely from the revenues and receipts derived from a "financing agreement" entered into in connection with the financing of "economic development facilities "; and WHEREAS, the purpose of the Act is to relieve conditions of insufficient employment opportunities, insufficient tax base and insufficient diversification of economic development facilities, all for the benefit of the health and welfare of the residents of the Issuer; and WHEREAS, the Issuer, by adoption of its Ordinance 6481 -78 on October 9, 1978 ( "Ordinance 6481 -78 "), has heretofore determined to finance a portion of the costs of acquiring, constructing and equipping an "economic development facility ", more specifically a health facility of the type licensed and regu- lated by the Indiana health facilities council under Title 16, Article 10, Chapter 2, Indiana Code of 1971, as supplemented and amended, consisting of a 254 -unit licensed apartment complex and an 80 -bed skilled and intermediate care facility to be located partially within the corporate limits of the Issuer and partially within the boundaries of the County of St. Joseph, outside the cor- porate limtis of the Issuer (the "Project "), for Brethren Care of South Bend, Inc., South Bend, Indiana, a not - for - profit corporation organized and existing under the laws of the State of Indiana (the "Corporation "), in order to promote the aforesaid purposes of the Act; and WHEREAS, pursuant to Ordinance 6481 -78 the Issuer has heretofore issued $8,000,000 principal amount of Economic Development Revenue Bonds, Series A (Brethren Care of South Bend, Inc., Project), as authorized and permitted by the Act, in order to finance a portion of the costs of the Project; and WHEREAS, it is proposed to finance the balance of the costs of the Project thorugh the issuance of economic development bonds by the Issuer pursuant to the provisions of the Act; and WHEREAS, the South Bend Economic Development Commission (the "Commission "), after holding a public hearing on the question of financing the balance of the costs of the Project, has, by resolution adopted November 2, 1979, recommended that the balance of the costs of the Project be financed by the Issuer by the issuance of its economic development revenue bonds in order to promote the pur- poses of the Act and has found that the financing will be of benefit to the health and welfare of the Issuer and in compliance with the purposes and provi- sions of the Act; and WHEREAS, the aggregate cost of financing the balance of the costs of the Project (including incidental expenses related thereto and to the issuance of said economic development revenue bonds) has been determined to be not more than $5,000,000; and WHEREAS, in order to finance the balance of the costs of acquiring, constructing and equipping the Project, the Issuer proposes to issue not more than $5,000,000 principal amount of Economic Development Revenue Bonds, 1979 Series B (Brethren Care of South Bend, Inc., Project) (the "1979 Series B Bonds "), as authorized and permitted by the Act and as hereinafter provided; and WHEREAS, the Issuer proposes to enter into a Security Agreement, which is a "financing agreement" within the meaning of the Act, dated as of December 1, 1979 (the "Security Agreement "), with the Corporation, specifying the terms and conditions of financing the balance of the costs of the Project and of completing the acquisition, construction and equipping of the Project, as aforesaid, and setting forth the terms of the Corporation's Promissory Note, 1979 Series B dated December 1, 1979 (the "1979 Series B Note "), which note shall be secured solely by a pledge of the Life Occupancy Fees (as defined in the Security Agreement) received by the Corporation in respect of the Project; and - 2 - WHEREAS, the Issuer proposes to issue and sell its 1979 Series B Bonds in order to finance the purchase of the 1979 Series B Note, the proceeds of which will be used by the Corpora- tion to finance the balance of the costs of the Project, as aforesaid, including necessary expenses incidental thereto and to the issuance of the 1979 Series B Bonds, and including capital- ized interest during the estimated period of construction of the Project; and WHEREAS, the 1979 Series B Bonds will be issued under the terms of a proposed Trust Indenture dated as of December 1, 1979 (the "Indenture "), from the Issuer to First Bank and Trust Company of South Bend, South Bend, Indiana, as Trustee (the "Trustee "), which Indenture constitutes an assignment to the Trustee of all of the Issuer's rights, title and interest in, under and to the Security Agreement and the 1979 Series B Note; and WHEREAS, the full and prompt payment of the principal of, premium, if any, and interest on the 1979 Series B Bonds will be secured by a pledge of the Life Occupancy Fees (as defined in the Security Agreement) received by the Corporation in respect of the Project, pursuant to the terms of the 1979 Series B Note and the Security Agreement; and WHEREAS, the Issuer has caused to be prepared and presented to this meeting the following instruments, which the Issuer proposes to enter into: 1. the form of Security Agreement between the Issuer and the Corporation; and - 3 - and 2. the form of.1979 Series B >Note to be executed by the Corporation, delivered to the Issuer and assigned by the Issuer to the Trustee concurrently with the issuance of the 1979 Series B Bonds; and 3. the form of Indenture from the Issuer to the Trustee, including the form of 1979 Series B Bond; and 4. the form of Bond Purchase Agreement (the "Bond Purchase Agreement "), by and between the Issuer and Stix & Co. Inc., St. Louis, Missouri (the "Original Purchaser "), and approved by the Corporation, pursuant to the terms of which the Issuer has agreed to sell, and the Original Pur- chaser has agreed to buy, the 1979 Series B Bonds; and 5. the draft form of Preliminary Official Statement (the "Preliminary Official Statement "), describing the Project, the financing of the Project and the source of payment of and security for the 1979 Series B Bonds; WHEREAS, it appears that each of the instruments above referred to and now before this meeting is in appropriate form and is an appropriate instrument to be executed and delivered by the Mayor and the City Clerk for the purposes intended: NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, ST. JOSEPH COUNTY, INDIANA, AS FOLLOWS: Section 1. Approval of the Project; Compliance with the Act. The financing of the balance of the costs of acquiring, constructing and equipping the Project through the issuance and sale of the 1979 Series B Bonds, as hereinafter provided, is hereby authorized and approved and determined to be of benefit to the health and welfare of the Issuer and its residents and in compliance with the purposes and provisions of the Act. Section 2. Approval of and Authorization of the Terms of the 1979 Series B Bonds. For the purpose of financing the balance of the costs of acquiring, constructing and equipping the Project, including necessary expenses incidental thereto and to the issuance of the 1979 Series B Bonds, and the capitalizing of interest during the estimated period of construction of the Project, the 1979 Series B Bonds are hereby authorized to be issued in the principal amount of not to exceed $5,000,000, which bonds shall be designated "Economic Development Revenue Bonds, 1979 Series B (Brethren Care of South Bend, Inc., Project)," shall be issued in coupon form registrable as to principal only in the denomination of $5000, and as fully registered bonds without coupons in the denomination of $5000 or any integral multiple thereof not in excess of any single maturity, or in any other denominations as shall be authorized pursuant to a resolution to be subsequently adopted by this Common Council, and shall be payable as to principal and interest in lawful money of the United States of America at the principal corporate trust office of the Trustee, except in the case of fully registered bonds which shall be payable as to interest by check or draft of the Trustee mailed to the registered owner thereof, under the provi- sions of the Indenture. The 1979 Series B Bonds shall be dated December 1, 1979, or as provided in the Indenture; shall be lettered and numbered from l upward in the case of coupon bonds and from R -1 upward in the case of fully registered bonds, or as provided in the Indenture. The 1979 Series B Bonds shall bear interest payable June 1, 1980, and semiannually thereafter on each December 1 and June 1 at such rates, shall.mature on December 1 in such years and principal amounts, and shall be subject to redemption prior to maturity at such times, in such manner and upon such terms, as shall be authorized pursuant to a resolution to be subsequently adopted by this Common Council. For the purpose of securing the payment of the 1979 Series B Bonds there are hereby authorized to be established and maintained with the Trustee pursuant to the terms of the Inden- ture the following funds: 5 (a) "Brethren Care of South Bend, Inc., Project Bond Fund," which shall be subdivided into an "Interest Account" and a "Principal Account "; (b) "Brethren Care of South Bend, Inc., Project Bond Redemption Fund" and (c) "Brethren Care of South Bend, Inc., Project Con- struction Fund." Section _3. 1979 Series B Bonds Limited Obligations of the Issuer. The 1979 Series B Bonds shall be payable solely from the payments to be made on the 1979 Series B Note,. and otherwise under the Security Agreement, to be executed and delivered by the Corporation pursuant to the Security Agreement and assigned by the Issuer to the Trustee for its payment in accordance with the Indenture and the 1979 Series B Note. The 1979 Series B Bonds shall not in any respect be a general obligation of the Issuer, nor shall they ever constitute or give rise to a charge against the general credit or taxing powers of the Issuer, and the 1979 Series B Bonds shall not constitute an indebtedness or a loan of credit of the Issuer within the meaning of any constitutional or statutory provision. Nothing in this ordinance, the Indenture, the 1979 Series B Bonds or the Security Agreement shall be construed as an obligation or commitment by the Issuer to expend any of its funds other than (i) the proceeds of the sale of the 1979 Series B Bonds, (ii) the payments to be made by the Corporation on the 1979 Series B Note, or otherwise under the Security Agreement and (iii) any moneys arising out of the investment or reinvestment of said proceeds or payments. Section 4. Issuance and Execution of the 1979 Series B Bonds. The 1979 Series B Bonds shall be issued in compliance with and under authority of the provisions of the Act, this ordinance, the resolution referred to in Section 2 hereof to be subsequently adopted by this Common Council and the Indenture. Each of the 1979 Series B Bonds and the coupons appertaining thereto shall be executed on behalf of the Issuer by its Mayor and attested by its City Clerk by their respective manual or facsimile signatures, shall have the seal of the Issuer impressed or reproduced thereon.and shall be authenticated by the endorse- ment of the Trustee. The facsimile signatures of said officers shall have the same force and effect as if said officers had manually signed each of the 1979 Series B Bonds and the coupons appertaining thereto. Section 5. Form of the 1979 Series B Bonds. The 1979 Series B Bonds and the coupons to be attached to the coupon 1979 Series B Bonds and the Trustee's certificate of authentication to appear on the 1979 Series B Bonds shall be in substantially the form set forth in the Indenture, with necessary or appropriate variations, omissions and insertions as permitted or required by the Indenture. Section 6. Payment of the 1979 Series B Bonds. It is hereby found, determined and declared by this Common Council that the payments to be made on the 1979 Series B Note are sufficient in each year to pay the principal of, premium, if any, and inter- est on the 1979 Series B Bonds, and that the obligations under- taken by the Corporation under the Security Agreement are suffi- cient to satisfy the obligations required by the Act to be under- taken by the "user" of an "economic development facility." No reserve funds or depreciation funds are deemed advisable to be established by the Issuer in connection with the retirement of the 1979 Series B Bonds. The.Security Agreement provides that the Corporation shall operate and maintain the Project and carry all proper insurance with respect thereto, and shall pay all costs of maintenance, repair, taxes, assessments, insurance premiums, Trustee's fees and any other expenses relating to the Project. Section 7. Approval of the Indenture. The form, terms and provisions of the proposed Indenture be, and they are hereby, - 7 - in all respects approved, and the Mayor and the City -Clerk be, and they are hereby, authorized, empowered and directed to exe- cute, acknowledge and deliver the Indenture in the name and on behalf of the Issuer, and thereupon to cause the Indenture to be executed, acknowledged and delivered by the Trustee, and the Indenture shall constitute an assignment, for the security of the 1979 Series B Bonds, of the 1979 Series B Note and the payments to be made thereon and of all of the Issuer's rights, title and interest in, under and to the Security Agreement. The Indenture, as executed and delivered, shall be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer execut- ing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Indenture now before this meeting; and from and after the execution and delivery of the Indenture, the officers, agents and employees of the Issuer are hereby autho- rized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Indenture as executed. Section 8. Approval of the 1979 Series B Note and the Security Agreement. The form, terms and provisions of the pro - posed 1979 Series B Note and the Security Agreement be, and they are hereby, in all respects approved, and the Mayor and the City Clerk be, and they are hereby authorized, empowered and directed to execute, acknowledge and deliver the Security Agreement in the name and on behalf of the Issuer, and thereupon to cause the Security Agreement to be executed, acknowledged and delivered by the Corporation, and to assign the 1979 Series B Note to the Trustee. The Security Agreement, as executed and delivered, and the 1979 Series B Note as assigned, shall be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Security Agreement and 1979 Series B Note now before this meeting; and from and after the J execution and delivery of the Security Agreement and the assign- ment of the 1979 Series B Note, the officers, agents and em- ployees of the Issuer are hereby authorized, empowered and dir- ected to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Security Agreement as executed and the 1979 Series B Note as assigned. Section 9. Approval of the Bond Purchase Agreement; Sale of the 1979 Series B Bonds. The form, terms and provisions of the proposed Bond Purchase Agreement be, and they hereby are, in all respects approved, and the Mayor and the City Clerk be, and they hereby are authorized, empowered and directed to exe- cute, acknowledge and deliver the Bond Purchase Agreement in the name and on behalf of the Issuer, and thereupon to cause the Bond Purchase Agreement to be approved and executed by the Corporation and delivered to and executed by the Original. Purchaser. The Bond Purchase Agreement, as executed and delivered, shall be in substantially the form now before this meeting and hereby ap- proved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution there- of to constitute conclusive evidence of the Issuer's approval of any and all changes or revisions therein from the form of Bond Purchase Agreement now before this meeting; and from and after the execution and delivery of the Bond Purchase Agreement, the officers, agents and employees of.the Issuer are hereby autho- rized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Bond Purchase Agreement as executed. The sale of the 1979 Series B Bonds to the Original - 9 - Purchaser at a price of not less than $4,800,000 plus accrued interest from the date of the 1979 Series B Bonds to the date of delivery, pursuant to the terms of the Bond Purchase Agreement be, and the same is hereby, approved and confirmed, and the Mayor and the City Clerk of the Issuer are hereby authorized and di- rected to execute and deliver.the 1979 Series B Bonds to the Original Purchaser as provided in the Indenture. Section 10. Approval of Official Statements. The draft form of Preliminary Official Statement which is before this meeting is hereby approved for distribution in connection with the sale.of the 1979 Series B Bonds, and the Mayor is hereby authorized and directed to execute and deliver the Preliminary Official Statement and the final Official Statement (collec- tively, the "Official Statements ") in the name and on behalf of the Issuer and to cause the Official Statements to be executed and delivered by the Corporation. The Official Statements, as executed, shall be in substantially the draft form of the Prelim - inary Official Statement now before this meeting and hereby approved, or with such changes therein as shall be approved by the officer of the Issuer executing the same, such officer's execution thereof to constitute conclusive evidence of the Is- suer's approval of any and all changes or revisions therein from the draft form of Preliminary. Official Statement now before this meeting. Section 11. Delegation. The Mayor and the City Clerk, for and on behalf of the Issuer, be, and they hereby are, autho- rized and directed to do any and all things necessary to effect the execution and delivery of the Security Agreement by the Corporation, the execution of the 1979,Series B Note by the Corporation and the assignment thereof by the Issuer to the Trustee, the execution and delivery of the Indenture and the acceptance thereof by the Trustee, the execution and delivery of the Official Statements by the Corporation, the approval of the Bond Purchase Agreement by the Corporation and the acceptance thereof by the Original Purchaser, the performance of all of the obligations of the Issuer under the Security Agreement and the Indenture, the execution and delivery of the 1979 Series B Bonds, and the performance of all other acts of whatever nature neces- sary to effect and carry out the authority conferred by the Act, this ordinance, the Security Agreement and the Indenture. The Mayor and the City Clerk be, and they hereby are, further autho- rized and directed, for and on behalf of the Issuer, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of the authority conferred by the Act, this ordinance, the Security Agreement and the Inden- ture, or to evidence said authority and its exercise. Section 12. Arbitrage. The Issuer hereby covenants that it will restrict the use of any moneys on deposit in any fund or account established in connection with the 1979 Series B Bonds, whether or not such moneys were derived from the proceeds of the sale of the 1979 Series B Bonds, in such manner and to such extent as may be necessary, in view of reasonable expecta- tions at the time of issuance of the 1979 Series B Bonds, so that the 1979 Series B Bonds will not constitute "arbitrage bonds" under Section 103(c) of the Internal Revenue Code of 1954, as amended, and regulations prescribed thereunder. The Mayor, the City Clerk, or any other officer of the Issuer having responsi- bility for the issuance of the 1979 Series B Bonds is hereby authorized and directed to give an appropriate certificate for inclusion in the transcript of the proceedings with respect to the 1979 Series B Bonds, upon receipt of appropriate assurances in writing from the Corporation, setting forth the facts, esti- mates and reasonable expectations pertinent under said section. Section 13. Ratification. All acts and doings of any officer or agent of the Issuer in furtherance of the purposes and intent of this ordinance are hereby ratified, confirmed and made the acts and deeds of this Common Council. -il- Section 14. Severability; Headings. The provisions of this ordinance are hereby declared to be severable, and if any section, phrase or provision shall for any reason be declared to be invalid, such declaration shall not affect.the validity of the remainder of the sections., phrases and provisions. The headings of the various sections of this ordinance are for convenience of reference only and shall not constitute a part of the ordinance. Section 15. Open Meetings._ This Common Council hereby finds and determines that all formal actions relative to the adoption of this ordinance were taken in an open meeting of this Common Council, and that all deliberations of this Common Council and of its committees, if any, which resulted in such formal actions, were taken in meetings open to the public, in full compliance with applicable legal requirements, including Title 5, Article 14, Chapters 1 and 1.5 of the Indiana Code of 1971, as supplemented and amended. Section 1`6. Repealer; Effective Date. All ordinances, resolutions and orders, or parts thereof, in conflict with the Provisions of this ordinance, are, to the extent of such con- flict, hereby repealed and this ordinance shall be in immediate effect from and after its adoption. The City Clerk is hereby directed to transmit this ordinance to the Commission. After a full and open public discussion thereof, Coun- cilman -moved and Councilman seconded the motion that this ordinance as presented and read be adopted. This Ordinance shall be in full force and effect from and after its passage by the Common Council this day of November, 1979 and due approval and attestation by the Mayor. n Council r � � ; �t•; ��, � ..,rte ist "EADIN s !1 f —/� J JC•' _ ° c�-;��.�',. �; � ' ��' PUBLIC HEARING 6 .f 2nd READING NOT APPROVED REFERRED PASSED `f °%S = % ����.a.•y� -s y;_ f 1 N s S - 12 -