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HomeMy WebLinkAbout9764-07 Authorizing the Mayor and Controller to Issue Temporary Loans 2006 - 2007ORDINANCE No. 9764-07 Passed by the Common Council of the City of South Bend, Indiana June 11, 20 07 Attest: Attest: Presented by me to the Mayor of the City of Soutlt Bend, Indiana June 12, 07 20 City Clerk President of Common Council City Clerk Approved and signed by me June 13 , 20 0 7 Mayor ORDINANCE NO. ~ ~ ~O ~- ~ 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, INDIANA, 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 2006, AND COLLECTABLE IN THE YEAR 2007, AUTHORIZING THE ISSUANCE OF TEMPORARY LOAN TAX ANTICIPATION TIME WARRANTS TO EVIDENCE SUCH LOANS AND THE SALE OF SUCH WARRANTS AND APPROPRIATING AND PLEDGING THE TAXES TO BE RECEIVED IN SUCH FUNDS TO THE PAYMENT OF SUCH WARRANTS INCLUDING THE INTEREST THEREON STATEMENT OF PURPOSE AND INTENT The City Controller (the "City Controller") of the City of South Bend, Indiana (the "City"), has represented and the Common Council of the City (the "Common Council") now finds that there will be insufficient amounts of moneys for the following funds of the City: General Fund (101), Parks & Recreation Fund (201-1100), Fire Pension Fund (701), Police Pension Fund (702), and Hall of Fame Bond Fund (313) (collectively, the "Funds") to meet the current running expenses of the City payable from each of such Funds during the fiscal year ending December 31, 2007, and prior to the respective June and December settlement and distribution of taxes levied for each such Fund, in particular given that there will not be a full distribution of taxes in June. The Common Council now finds that temporary loans for the Funds for such purposes should be made and that temporary loan tax anticipation time warrants evidencing such loans should be issued and sold, subject to the terms and conditions set forth herein and in accordance with the provisions of Indiana law. The levy proposed for collection for each of the Funds in the year 2007 is estimated to produce in the aggregate, with respect to each such Fund, an amount equal to or in excess of the principal and interest cost of making temporary loans for such Fund. A necessity exists for the making of temporary loans evidenced by temporary loan tax anticipation time warrants for each of the Funds in anticipation of the receipt of current revenues for each such Fund levied and in the course of collection for the year 2007 and the Common Council hereby authorizes the making of temporary loans to procure the amounts BDDBOI 4765573v 1 necessary, in combination with other available amounts, to meet such current running expenses for each Fund and to pay necessary costs incurred in connection with the issuance and sale of temporary loan tax anticipation time warrants to evidence such temporary loans. The City has not previously issued temporary loan tax anticipation time warrants payable from 2007 tax revenues with respect to any of the Funds and the Common Council seeks to authorize the issuance of such temporary loan tax anticipation time warrants with respect to each Fund and the sale of such warrants pursuant to the provisions of Indiana Code 36-4-6, subject to and dependent upon the terms and conditions hereinafter set forth. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA: Section I. It is hereby found and declared that an emergency exists for the borrowing of money and therefore the City by its Mayor is hereby authorized to make temporary loans to meet current running expenses pursuant to the provisions of Indiana Code 36-4-6 for the use and benefit of each of the Funds of the City in anticipation of current tax revenues actually levied and in the course of collection for the respective Funds for the year 2007, which loans shall be evidenced by temporary loan tax anticipation time warrants of the City (the "Warrants"). All Warrants shall be dated as of the date of delivery. A separate Warrant or Warrants shall be issued with respect to each Fund for each maturity date. The City is authorized to issue Warrants maturing and payable on December 28, 2007, in amounts not to exceed the following: Principal Amount: $15,000,000 Maturing December 28, 2007 Fund: General Fund (#101) Principal Amount: $530,000 Maturing December 28, 2007 Fund: Police Pension (#702) Principal Amount: $4,000,000 Maturing December 28, 2007 Fund: Parks & Recreation (#201-1100) Principal Amount: $190,000 Maturing December 28, 2007 Fund: Fire Pension (#701) Principal Amount: $1,250,000 Maturing December 28, 2007 Fund: Hall of Fame Bond (#313) The Warrants authorized herein shall bear interest prior to maturity at a rate or rates per annum not to exceed a maximum of eight percent (5.00%). 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 as set 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 BDDBOI 4765573v1 - 2 - 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"). Section II. With respect to each Fund and each maturity date, the appropriate officers of the City are authorized to deliver a principal amount of Warrants up to or less than the maximum amount established for any such Fund or maturity date in Section 1 hereof in order to comply with all applicable laws. All 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 Warrant Purchase Agreement. Section III. The principal of and interest on the 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 Warrant is issued. There is hereby appropriated and pledged to the payment of all Warrants issued with respect to each Fund, including interest and all necessary costs incurred in connection with the issuance and sale of the Warrants, a sufficient amount of the tax revenues, levied in 2006, and payable in 2007, 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 Warrants evidencing such temporary loans, together with such issuance costs, if any. Section IV. The City Controller, on behalf of the City, is authorized to sell the 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 Warrants shall be sold to the Purchaser pursuant to the purchase agreement (the "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 Warrant Purchase Agreement to set forth the definitive terms and conditions of 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 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 Warrants to the Purchaser, challenging the validity or issuance of the Warrants and certification from the Purchaser that it is a "sophisticated investor". The entry by the City into the Warrant Purchase Agreement and the execution of the Warrant Purchase Agreement on behalf of the City by the City Controller, in accordance with the Ordinance, are hereby authorized, approved and ratified. Section V. The Warrants may be prepaid on any date prior to their maturity, in whole or in part, upon at least seven (7) days' written notice to the holder of the Warrant or Warrants to be prepaid, at a prepayment price equal to one hundred percent (100%) of the principal amount of the Warrants to be prepaid, plus accrued interest thereon to the date of BDDBOI 4765573v1 - 3 - prepayment, and without premium. Written notice of any prepayment shall include (i) the date of prepayment; (ii) the prepayment price; (iii) in the case of partial prepayment, the identification and the respective principal amounts of the Warrants to be prepaid; (iv) that on the date of prepayment, the prepayment price will become due and payable upon each such Warrant or portion thereof called for prepayment, and that interest thereon shall cease to accrue from and after said date; and (v) the place where such Warrants are to be surrendered for payment of the prepayment price, which place of payment shall be the place provided for the payment of the principal of the Warrants. Section VI. The 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 of the City Controller, and the corporate seal of the 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 Warrants shall be manual. All Warrants shall be payable in lawful money of the United States of America at the office of the City Controller as Paying Agent. 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 COUNTY OF ST. JOSEPH Due Date: December 28, 2007 $ CITY OF SOUTH BEND, INDIANA TEMPORARY LOAN TAX ANTICIPATION TIME WARRANT ( FUND) FOR VALUE RECEIVED, on or before December 28, 2007, the City of South Bend, Indiana (the "City"), shall pay to the amount of $ (or so much thereof as may be 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 on the Due Date hereof shall pay to the bearer hereof interest at the rate of °Io 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 Office 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 meet current expenses of the _ Fund, and has been authorized by an ordinance passed and adopted by the Common Council of BDDBOI 4765573v1 - 4 - the City of South Bend, Indiana, on 2007, 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 2006, which tax levy is now in the course of collection. 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. This Warrant is prepayable on any date at the option of the City, in whole or in part, upon seven day's written notice to the holder hereof to be paid at a price equal to one hundred percent (100%) of the principal amount to be prepaid plus accrued interest thereon to the date of prepayment, and without premium. 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 that 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. 1N 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 , 2007. CITY OF SOUTH BEND, INDIANA By: Mayor COUNTERSIGNED: City Controller (SEAL} ATTEST: City Clerk [End of Form of Warrant] Section VIII. 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 Warrants in the manner and substantially the form provided in this Ordinance. BDDBOI 4765573v1 - 5 - Section IX. The City Controller is hereby authorized to deliver the Warrants to the Purchaser, upon receipt from the Purchaser of payment in accordance with the terms of the 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 or fail to take any action with respect to the proceeds of any of the Warrants or any investment earnings thereon which would result in constituting 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 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 Warrants. Section XII. All resolutions and ordinances in conflict herewith are, to extent of such 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. ***~* BDDBOI 4765573v1 - 6 - ~r Member of the C m on Council ATTEST: Presented by me to the Mayor of the City of South Bend, Indiana, on the ~ L-1 day of ~~~ r~ , 2007, at l2~'•`t.r o'clock _~.m. ~~~~ City Cl I ~~~._-~ Approved and signed by me on the ~ day of , 2007, at o'clock ~.m. 1 st READING S "Z~ " o l PUBLIC HEARING ~ 'l l-o~ '3 rd READING (a -(~_-p`~ MOT APPROVED REFERRED PASSED ~o-~`-~1 BDDBOI 4765573v1 /~ Mayor, City of South Bend, Indiana -7- Filed to Cf~rra'~. ~~~€~~ t'~iY ~ 3 2007 JQHN VCDIt3E CPfYCLE~K, SG. BEh~, tN. TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 34-07 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, INDIANA, 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 2006, AND COLLECTABLE IN THE YEAR 2007, AUTHORIZING THE ISSUANCE OF TEMPORARY LOAN TAX ANTICIPATION TIME WARRANTS TO EVIDENCE SUCH LOANS AND THE SALE OF SUCH WARRANTS AND APPROPRIATING AND PLEDGING THE TAXES TO BE RECEIVED IN SUCH FUNDS TO THE PAYMENT OF SUCH 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. Ann Puzzello Acting Chairperson C.OUNI'Y-CPIY BUILDING 227 W JEFFERSON BLVD. $OVI'H BEND, INDIANA 46601-1830 PHONE 574/ 235-9216 FAx 574!235-9928 TDD 574/ 235-5567 CITY OF SOUTH BEND STEPHEN J. LUECI{E, MAYOR DEPARTMENT OF ADMINISTRATION AND FINANCE M. CATHERINE FANELLO CONTROLLER May 23, 2007 Mr. Timothy Rouse President, South Bend Common Council 4`'' Floor, County-City Building South Bend, IN 46601 Re: Ordinance for Temporary Loans to Meet City Expenses and Issuance of Tax Anticipation Time Warrants Dear Mr. Rouse: The City administration has learned that due to delays in billing, the 2006 tax revenues usually payable by June 2007 will be delayed. Therefore, City accounts will be insufficient to meet budgeted and necessary expenses. Under these circumstances, which the City similarly experienced in the past four fiscal years, Indiana Code Section 36-4-6-1 et seQ. authorizes the City to borrow funds evidenced by temporary tax anticipation time warrants to meet ongoing expenses. The attached ordinance seeks Common Council approval of such a loan and the issuance of temporary tax anticipation time warrants. I will present this Ordinance to the Common Council at its Personnel and Finance Committee meeting and also at its public hearing. Thank you for your consideration. y Catherine Fanello ~,,.,.,.,,t I o.. ~- JANICE 1.. HALL L.IZ ROVVE THOMAS SKARBEK SUSAN WALLACE DIRECTOR DIRECTOR DIRECTOR MANAGER HUMAN RESOURCES CITY FINANCE BUDGETING & FINANCIAL REPORTING BENEFITS Filw~ ~~ ~:~~~;E~~v'~ C~~~i~~ t.1AY 2 3 2007 J0;'.P~ VOOrI~E CITY CLFFY., S0. GE?1D, !N. Amy C~ ROBERT ALLEN DIRECTOR INFORMATION TECHNOLOGY