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HomeMy WebLinkAboutO-1539ORDINANCE NO. 1539 AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY'S $1,780,000 PRINCIPAL AMOUNT OF UTILITIES REVENUE WARRANTS, SERIES 2015, DATED MAY 14, 2015 BE IT ORDAINED by the City Council (herein called the "Council") of the City of Fairhope (herein called the "City"), in the State of Alabama, as follows: Section 1. Findings. After investigation duly made by it and based upon the information obtained from such investigation, the Council hereby makes the following findings and declares the following statements to be true: (a) in order to achieve a savings in debt service payments, it is necessary and desirable to refund, on a current basis, the City's Utilities Revenue Warrants, Series 2005, dated March 1, 2005 (herein called the "2005 Warrants"), the proceeds of which were used to make improvements to its water works and sanitary sewer system (which system, together with the City's natural gas distribution system and its electric distribution system, are herein together called the "Systems") and to refund warrants issued for such purpose; and (b) to provide for the said refunding and to pay issuance expenses, it will be necessary that the Series 2015 Warrants be issued as authorized in this ordinance and pursuant to the applicable provisions contained in the Eighth Supplemental Indenture authorized in Section 6 of this ordinance. Section 2. Authorization of the Warrants. Pursuant to the applicable provisions of the constitution and laws of Alabama, including particularly Section 11-47-2, as amended, and for the purpose of providing funds for the purposes referred to in Section 1 of this ordinance, there are hereby authorized to be issued by the City $1,780,000 aggregate principal amount of its Utilities Revenue Warrants, Series 2015 (herein called the "Warrants"), under the terms, conditions and provisions set out in the Eighth Supplemental Indenture (herein called the "Eighth Supplemental Indenture") authorized in Section 6 of this ordinance. All of the provisions thereof respecting the Warrants are hereby adopted as a part of this ordinance. Section 3. Source of Payment of the Warrants and Pledge Therefor. The obligation evidenced and ordered paid by the Warrants shall be a limited obligation of the City payable solely out of the revenues from the operation of the Systems as specified in the Trust Indenture hereinafter referred to, and shall not constitute a general obligation of the City or be subject to any charge on or against its general funds, its taxing powers, or its constitutional debt limit. None of the agreements, representations or warranties made or implied in this ordinance, or in the issuance of the Warrants, shall ever impose any personal or pecuniary liability or charge upon the City, whether before or after any breach by the City of any such agreement, representation or warranty, except with the moneys herein provided. Nothing contained in this section, however, shall relieve the City from the performance of the several covenants and representations on its part herein contained. 1 Ordinance No. 1539 Page -2- Section 4. Series 2015 Warrants to Constitute Additional Warrants Issued Under the 1996 Indenture Coverin the he Systems. The Warrants shall be issued as additional warrants under the reserved power contained in Section 8.2 of that certain Trust Indenture between the City and Regions Bank, dated November 1, 1996, as supplemented from time to time (herein called the "1996 Indenture"), and shall be entitled to and shall have the pledges and other rights and privileges accorded to the obligations issued under that document and each supplement thereto, including specifically (but without limiting the generality thereof) the pledge made in the 1996 Indenture for payment of the principal of and interest on all obligations issued thereunder on a parity with all other obligations that may at any time be issued pursuant to its provisions. Section 5. Resolution Complying With the Requirements of Section 8.2(b) of the 1996 Indenture. In order to comply with the requirements of Section 8.2(b) of the 1996 Indenture preliminary to the issuance of the Warrants as additional warrants thereunder, the Council has adopted, at the same meeting at which this ordinance is adopted, a resolution containing the recitations required in Section 8.2(b) of the 1996 Indenture to be made by the City. Section 6. Authorization of Eighth, Supplemental Indenture. The Mayor is hereby authorized to execute and deliver, in the name and behalf of the City, the Eighth Supplemental Indenture in substantially the form presented to the meeting of the Council at which this ordinance is adopted (which form shall be included in the records of the City and which is made a part of this ordinance as if set out in full herein), and the City Clerk is hereby authorized and directed to affix thereto and attest thereon the corporate seal of the City. Upon full execution of the Eighth Supplemental Indenture, the Mayor is authorized and directed to deliver it to the trustee thereunder. All provisions of the Eighth Supplemental Indenture are hereby adopted as a part of this ordinance to the same extent as if they were set out in full herein. Section 7. Sale of the Warrants; Delivery Thereof and Use of Proceeds Therefrom. The Warrants are hereby sold to Compass Mortgage Corporation (herein called the "Purchaser"), at a purchase price equal to $1,780,000 (the par amount thereof), plus accrued interest thereon (if any) from their date to the date of payment therefor. The Mayor and the City Clerk are hereby directed to consummate the execution, sealing and attestation of the Warrants and to deliver them to the Purchaser upon payment to the City of the purchase price therefor. Simultaneously with such delivery, the City Treasurer is authorized and directed to pay the proceeds from the said sale to the Trustee who shall apply them in the manner and for the purposes set out in Section 2.5 of the Eighth Supplemental Indenture. Section 8. Compliance with Certain Requirements of the Code. The City will comply with all conditions to and requirements for the exemption from gross income for federal income taxation of the interest income on the Warrants imposed by Section 103 of the Internal Revenue Code of 1986, as amended (herein called the "Code"). Without limiting the generality of the foregoing, 4 Ordinance No. 1539 Page -3- (a) the City will not apply the proceeds from the Warrants in a manner that would cause any of the Warrants to be a "private activity bond" within the meaning of Section 141(a) of the Code, and (b) the City will comply with the requirements of Section 148 of the Code in order that the Warrants will not be "arbitrage bonds" within the meaning of said Section 148. Section 9. Payment at Par. All remittances of principal of and interest on the Warrants to the holders thereof shall be made at par without any deduction for exchange or other costs, fees or expenses. The bank or banks at which the Warrants shall at any time be payable shall be considered by acceptance of their duties hereunder to have agreed that they will make or cause to be made remittances of principal of and interest on the Warrants out of the moneys provided for that purpose, in bankable funds at par without any deduction for exchange or other costs, fees or expenses. The City will pay to such bank or banks all reasonable charges made and expenses incurred by them in making such remittances in bankable funds at par. Section 10. Call for Redemption. The Council hereby calls the Series 2005 Warrants for redemption on June 16, 2015, said redemption to be at and for a redemption price equal to 100% of the principal amount redeemed plus accrued interest thereon to the date fixed for redemption. The Mayor is hereby authorized to execute for and on behalf of the City an Escrow Trust Agreement providing for the said refunding and the City Clerk is hereby authorized and directed to affix the seal of the City thereto and to attest the same. Section 11. Constitutes Contract. The provisions of this ordinance shall constitute a contract between the City and each holder of the Warrants issued hereunder. Whenever all the Warrants and the interest thereon shall have been paid in full or provision made for the payment thereof as provided in the Trust Indenture, and all the agreements on the part of the City herein and therein contained with respect thereto shall have been performed, then upon the happening of such events, the obligations of the City hereunder shall thereupon cease. Section 12. Severability. The various provisions of this ordinance are hereby declared to be severable. In the event any provision hereof shall be held invalid by a court of competent jurisdiction, such invalidity shall not affect any other portion of this ordinance. Attest L. isa A. Hanks, MMC City Clerk ADOPTED THIS 1 I TH DAY OF MAY, 2015 f- M. w� 3 RESOLUTION NO.2359-15 A RESOLUTION COMPLYING WITH THE REQUIREMENTS OF SECTION 8.2(b) OF THE TRUST INDENTURE BETWEEN THE CITY OF FAIRHOPE, ALABAMA, AND REGIONS BANK DATED AS OF NOVEMBER 1, 1996, AS SUPPLEMENTED BE IT RESOLVED by the City Council (herein called the "Council") of the City of Fairhope (herein called the "City"), in the State of Alabama, as follows: In order to comply with the requirements of Section 8.2(b) of that certain Trust Indenture between the City and Regions Bank, dated as of November 1, 1996 (herein called the "1996 Indenture"), so that $1,780,000 aggregate principal amount of Utilities Revenue Warrants, Series 2015, dated May 14, 2015 (herein called the "Series 2015 Warrants"), of the City may be issued as additional warrants under the provisions of the 1996 Indenture, the Council does hereby adopt this resolution, request that Regions Bank, as trustee, authenticate and deliver the Series 2015 Warrants to the purchaser thereof, and make the following recitals preliminary to the issuance of the Series 2015 Warrants: (1) the City is not at this time in default under the 1996 Indenture and no such default is imminent; (2) the person to whom the Series 2015 Warrants have been sold and shall be delivered is Compass Mortgage Corporation; (3) the Series 2015 Warrants are to be issued by sale and none thereof is to be issued by exchange; (4) the sale price of the Series 2015 Warrants is the par amount thereof, $1,780,000; (5) no obligations have previously been issued by the City under the 1996 Indenture or under any indenture supplemental thereto other than $4,195,000 aggregate principal amount of Utilities Revenue Warrants, Series 1996, dated November 1, 1996, which were issued under the 1996 Indenture and which were refunded simultaneously with the issuance of the Series 2003 Warrants; $7,735,000 aggregate principal amount of Utilities Revenue Warrants, Series 1997, dated March 1, 1997, which were issued under the First Supplemental Indenture dated as of March 1, 1997, and which were refunded simultaneously with the issuance of the Series 2005 Warrants; $1,905,000 aggregate principal amount of Utilities Revenue Warrants, Series 1999, dated June 1, 1999, which were issued under the Second Supplemental Indenture dated as of June 1, 1999, and which were refunded simultaneously with the issuance of the Series 2009 Warrants; $6,720,000 aggregate principal amount of Utilities Revenue Warrants, Series 2002, dated September 1, 2002, which were issued under the Third Supplemental Indenture dated as of September 1, 2002, and none of which are now outstanding; $2,300,000 aggregate principal amount of Utilities Revenue Warrants, Series 2003, dated September 1, 2003, which were issued under the Fourth Supplemental Indenture dated as of September 1, 2003, and none of which are now outstanding; $8,455,000 aggregate principal amount of Utilities Revenue Warrants, Series 2005, which were issued under the Fifth Supplemental Indenture dated as of March 1, 2005, and which are now outstanding in the aggregate principal amount of $4,590,000; $1,250,000 aggregate principal amount of Utilities Revenue Warrants, Series 2009, dated April 2, 2009, which were issued under the Sixth Supplemental Indenture dated as of April 2, 2009, and which are now outstanding in the aggregate principal amount of $630,000; and $16,140,000 aggregate principal amount of Utilities Revenue Warrants, Series 2011, dated October 13, 2011, which were issued under the Seventh Supplemental Indenture dated October 13, 2011, and which are now outstanding in the aggregate principal amount of $14,370,000; and (6) the Series 2015 Warrants are to be issued for the purpose of (a) refunding (on a current basis) the said Series'2005 Warrants, and (b) paying the costs related to the issuance of the Series 2015 Warrants. Attest (:�iisa A Hanks, MC City C erk ADOPTED THIS 11 TH DAY OF MAY, 2015 2 OMK t, Mayor