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Resolution Authorizing the Issuance and Sale of $3,695,000 Taxable Note Anticipation Notes.
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WHEREAS, the Common Council hereby finds and determines that it is necessary, desirable and in the best interest of the City of West Allis, Milwaukee County, Wisconsin (the "City") to raise funds for the purpose of paying the cost of financing the City's unfunded prior service liability contributions under the Wisconsin Retirement System, more specifically, to reduce the City's unfunded pension liability by contributing amounts to the Public Employee Trust Fund in advance of the required payment dates, as permitted and authorized by Chapter 40 of the Wisconsin Statutes (the "Contributions"), and there are insufficient funds on hand to pay said costs;
WHEREAS, the Common Council hereby finds and determines that the Contributions are within the City's power to make and therefore serve a "public purpose" as that term is defined in Section 67.04(1)(b) of the Wisconsin Statutes;
WHEREAS, cities are authorized by the provisions of Section 67.12(12) of the Wisconsin Statutes to borrow money and to issue general obligation promissory notes for such public purpose;
WHEREAS, pursuant to this Resolution the Common Council will authorize and covenant to issue general obligation promissory notes (the "Securities") of the City to provide permanent financing for the Contributions;
WHEREAS, the Securities have not yet been issued or sold;
WHEREAS, cities are authorized by the provisions of Section 67.12(1)(b) of the Wisconsin Statutes to issue municipal obligations in anticipation of receiving proceeds from bonds or notes the city has authorized or covenanted to issue under Chapter 67 of the Wisconsin Statutes;
WHEREAS, it is the finding of the Common Council that it is necessary, desirable and in the best interest of the City to provide for the issuance and sale of note anticipation notes pursuant to Section 67.12(1)(b), Wisconsin Statutes, in anticipation of receiving the proceeds from the issuance and sale of the Securities, to finance the cost of the Contributions, and it is now necessary and desirable to authorize their issuance and sale; and
WHEREAS, due to certain provisions contained in the Internal Revenue Code of 1986, as amended, it is necessary to issue such note anticipation notes on a taxable rather than tax-exempt basis.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City that:
Section 1. General Obligation Promissory Notes. The City hereby declares its intention and covenants to issue and hereby authorizes the issuance of general obligation promissory notes pursuant to the provisions of Chapter 67 of the Wisconsin Statutes, in an amount sufficient to retire any outstanding note anticipation notes issued for the purpose of paying the cost of the Contributions (heretofore and hereinafter, such notes shall be referred to as the "Securities").
Section 2. Authorization of the Notes. For the purpose of paying the cost of the Contributions, there shall be issued in anticipation of the issuance of the Securities, note anticipation notes pursuant to Section 67.12(1)(b) of the Wisconsin Statutes, in the principal sum of THREE MILLION SIX HUNDRED NINETY-FIVE THOUSAND DOLLARS ($3,695,000). Such notes shall be designated "Taxable Note Anticipation Notes" (the "Notes"). The City has duly received bids for the Notes as described on the bid tabulation attached hereto as Exhibit A and incorporated herein by this reference. It has been determined that the best bid received was that submitted by the bidder (the "Purchaser") whose bid is attached hereto as Exhibit B and incorporated herein by this reference (the "Proposal").
Section 3. Sale of the Notes. The Mayor and City Clerk are hereby authorized, empowered and directed to make, execute, issue and sell to the Purchaser for, on behalf of and in the name of the City, note anticipation notes aggregating the principal amount of THREE MILLION SIX HUNDRED NINETY-FIVE THOUSAND DOLLARS ($3,695,000) for the sum set forth on the Proposal, plus accrued interest to the date of delivery.
Section 4. Terms of the Notes. The Notes shall be dated January 15, 2004; shall be in the denomination of $5,000 or any integral multiple thereof; shall be numbered 1 and upward; and shall mature on the dates and shall bear interest at the rates per annum set forth on the debt service schedule attached hereto as Exhibit C (the "Schedule"). Interest is payable on January 1 and July 1 of each year, commencing July 1, 2004.
Section 5. Redemption Provisions. The Notes maturing on July 1, 2006 and thereafter shall be subject to call and payment at the option of the City in whole or from time to time in part on January 1, 2006 or on any date thereafter at the price of par plus accrued interest to the date of redemption. The amounts and maturities of the Notes to be redeemed shall be selected by the City. If less than the entire principal amount of any maturity is to be redeemed, the Notes of that maturity which are to be redeemed shall be selected by lot.
Section 6. Form of the Notes. The Notes shall be issued in registered form and shall be executed and delivered in substantially the form attached hereto as Exhibit D and incorporated herein by this reference.
Section 7. Security. The Notes shall in no event be a general obligation of the City and do not constitute an indebtedness of the City nor a charge against its general credit or taxing power. No lien is created upon property of the City as a result of the issuance of the Notes. The Notes shall be payable from (a) any proceeds of the Notes set aside for payment of interest on the Notes as it becomes due, and (b) proceeds to be derived from the issuance and sale of the Securities, which proceeds are hereby declared to constitute a Special Trust Fund, hereby created and established, to be held by the City Clerk and expended solely for the payment of the principal of and interest on the Notes. The City hereby agrees that, in the event such monies are not sufficient to pay the principal of and interest on the Notes when due, if necessary, the City will pay such deficiency out of its tax levy or other available funds of the City including proceeds derived from the issuance of general obligation refunding bonds; provided, however, that such payment shall be subject to annual budgetary appropriations therefore; and provided further, that neither this Resolution nor any such payment shall be construed as constituting an obligation of the City to make any such appropriation or any further payment.
Section 8. Covenants of the City. The City hereby covenants with the holders of the Notes as follows:
(a) It shall issue and sell the Securities as soon as practicable;
(b) It shall segregate the proceeds derived from the sale of the Securities into a Special Trust Fund created above and constituted as a special trust fund and shall permit such Special Trust Fund to be used for no purpose other than the payment of principal of and interest on the Notes until paid; and,
(c) It shall maintain a debt limit capacity such that the combined outstanding principal amount of general obligation bonds or notes or certificates of indebtedness of the City and the $3,695,000 authorized for the issuance of the Securities shall at no time exceed the constitutional debt limit of the City.
Section 9. Segregated Debt Service Fund Account. There is hereby established in the City treasury a fund account separate and distinct from all other funds or accounts of the City designated "Debt Service Fund Account for City of West Allis Taxable Note Anticipation Notes, dated January 15, 2004", which fund account shall be used solely for the purpose of paying the principal of and interest on the Notes. There shall be deposited in said fund account (i) all accrued interest paid on the Notes at the time the Notes are delivered to the Purchaser; (ii) any proceeds of the Notes representing capitalized interest on the Notes and deposited in the Borrowed Money Fund (hereinafter created), as needed to pay the interest on the Notes when due; (iii) proceeds of the Securities (or other obligations of the City issued to pay principal of or interest on the Notes) to the extent necessary to pay principal of or interest on the Notes; (iv) such other sums, including tax monies, as may be necessary at any time to pay principal of and interest on the Notes when due and which are appropriated by the Common Council for that purpose; and (v) surplus monies in the Borrowed Money Fund as specified in Section 10 hereof. Said Fund shall be used for the sole purpose of paying the principal of and interest on the Notes and shall be maintained for such purpose until such indebtedness is fully paid or otherwise extinguished.
Section 10. Segregated Borrowed Money Fund. The proceeds of the Notes (the "Note Proceeds"), other than any premium and accrued interest which must be paid at the time of delivery of the Notes into the Debt Service Fund Account created above, shall be deposited into an account separate and distinct from all other funds and accounts and disbursed solely for the purposes for which borrowed or for the payment of the principal of and interest on the Notes. Said proceeds may be temporarily invested in legal investments in the manner set forth below.
Section 11. Execution of the Notes. The Notes shall be prepared in typewritten or printed form, executed on behalf of the City by the manual or facsimile signatures of the Mayor and City Clerk, authenticated, if required, by its fiscal agent, if any, sealed with its official or corporate seal, if any, or a facsimile thereof and delivered to the Purchaser upon payment to the City of the purchase price thereof, plus accrued interest to the date of delivery. In the event that either of the officers whose signatures appear on the Notes shall cease to be such officers before the delivery of the Notes, such signatures shall, nevertheless, be valid and sufficient for all purposes to the same extent as if they had remained in office until such delivery. The aforesaid officers are hereby authorized to do all acts and execute all documents as may be necessary and convenient to effectuate the Closing.
Section 12. Payment of the Notes. The principal of and interest on the Notes shall be paid in lawful money of the United States of America by the City Clerk or City Treasurer.
Section 13. Persons Treated as Owners; Transfer of Notes; Record Date. The City shall keep books for the registration and for the transfer of the Notes. The persons in whose name any Note shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of either principal or interest on any Note shall be made only to the registered owner thereof. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums so paid.
Any Note may be transferred by the registered owner thereof by surrender of the Note at the office of the City Clerk, duly endorsed for the transfer or accompanied by an assignment duly executed by the registered owner or his attorney duly authorized in writing. Upon such transfer, the Mayor and City Clerk shall execute and deliver in the name of the transferee or transferees a new Note or Notes of a like aggregate principal amount, series and maturity and the City Clerk shall record the name of each transferee in the registration book. No registration shall be made to bearer. The City Clerk shall cancel any Note surrendered for transfer.
The City shall cooperate in any such transfer, and the Mayor and City Clerk are authorized to execute any new Note or Notes necessary to effect any such transfer.
The fifteenth day of each calendar month next preceding each interest payment date shall be the record date for the Notes. Payment of interest on the Notes on any interest payment date shall be made to the registered owners of the Notes as they appear on the registration book of the City at the close of business on the corresponding record date.
Section 14. Utilization of The Depository Trust Company Book-Entry-Only System. In order to make the Notes eligible for the services provided by The Depository Trust Company, New York, New York ("DTC"), the City agrees to the applicable provisions set forth in the Blanket Issuer Letter of Representations previously executed on behalf of the City and on file in the City Clerk's office.
Section 15. Undertaking to Provide Continuing Disclosure. The City covenants and agrees, for the benefit of the holders of the Notes, to enter into a written undertaking (the "Undertaking") required by SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities and Exchange Act of 1934 (the "Rule") to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events in accordance with the Rule. The Undertaking shall be enforceable by the holders of the Notes or by the original purchaser(s) of the Notes on behalf of such holders (provided that the rights of the holders and the purchaser(s) to enforce the Undertaking shall be limited to a right to obtain specific performance of the obligations thereunder and any failure by the City to comply with the provisions of the Undertaking shall not be an event of default with respect to the Notes).
The City Clerk, or other officer of the City charged with the responsibility for issuing the Notes, shall provide a Continuing Disclosure Certificate for inclusion in the transcript of proceedings, setting forth the details and terms of the City's Undertaking.
Section 16. Bond Insurance. If the purchaser of the Notes determines to obtain municipal bond insurance with respect to the Notes, the officers of the City are authorized to take all actions necessary to obtain such municipal bond insurance. The Mayor and City Clerk are authorized to agree to such additional provisions as the bond insurer may reasonably request and which are acceptable to the Mayor and City Clerk including provisions regarding restrictions on investment of Note proceeds, the payment procedure under the municipal bond insurance policy, the rights of the bond insurer in the event of default and payment of the Notes by the bond insurer and notices to be given to the bond insurer. In addition, appropriate reference to the municipal bond insurance policy shall be made in the form of Note provided herein.
Section 17. Conflicting Resolutions; Severability; Effective Date. All prior resolutions, rules or other actions of the Common Council or any parts thereof in conflict with the provisions hereof shall be, and the same are, hereby rescinded insofar as the same may so conflict. In the event that any one or more provisions hereof shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions hereof. The foregoing shall take effect immediately upon adoption and approval in the manner provided by law.
Adopted, approved and recorded January 6, 2004.