Adoption of Resolution No. 2018-99 – City of Saline 5/7/18





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CITY OF SALINE
(Washtenaw County, Michigan) Resolution No. 2018-99
RESOLUTION TO AUTHORIZE ISSUANCE OF
2018 SANITARY SEWER SYSTEM JUNIOR LIEN REVENUE BONDS

Minutes of a regular meeting of the City Council of the City of Saline, Washtenaw County, Michigan, held in the City Hall, 100 N. Harris Street, Saline, Michigan, on May 7, 2018, at 7:30 p.m., local time.
PRESENT: Ceo, Dillon, Girbach, McClelland, Mitchell, TerHaar, Marl
ABSENT:

The following Resolution was offered by Member Mitchell and supported by Member TerHaar:
WHEREAS, pursuant to Act 94, Public Acts of Michigan, 1933, as amended (the “Act”) the City Council of the City Saline (the “City”) has determined to make improvements to the City’s sanitary sewer system; and



WHEREAS, the improvements will enable the City to provide more efficient and better quality public services to the users of the sanitary sewer system; and

WHEREAS, the improvements shall be financed in part by the issuance of revenue bonds or other evidences of indebtedness in accordance with the Act in the sum of not to exceed
$4,500,000 for a period of not to exceed thirty (30) years; and

WHEREAS, the Act permits the City to authorize, within limitations that shall be contained in the authorization resolution, an officer to sell, deliver and receive payment for obligations, and to approve interest rates or methods for fixing interest rates, prices, discounts, maturities, principal amounts, denominations, dates of issuance, interest payment dates, optional or mandatory redemption rights or tender rights, obligations to be exercised by the City or the holder of the bonds, place of delivery and payment, and other matters and procedures necessary to complete an authorized transaction.

NOW, THEREFORE, BE IT RESOLVED as follows:

Section 1. DEFINITIONS. Except as provided in this Resolution, the definitions contained in the Prior Resolution (defined below) shall apply to the terms in this Resolution. In addition, whenever used in this Resolution except when otherwise indicated by context, the following definitions shall apply to the terms in this Resolution:

(a) “Authorized Officer” means the Mayor, the City Manager, and the Treasurer of the City, or any one or more of them.
(b) “Bonds” as defined in the Prior Resolution shall include the Series 2018 Bonds that are being issued as Additional Junior Lien Bonds under Section 22 of the Prior Resolution.
(c) “Authority” means the Michigan Finance Authority created by Executive Order 2010-2, which, among other things, transferred to the Michigan Finance Authority the powers, duties and functions of the Michigan Municipal Bond Authority, created and established pursuant to Act 227, Public Acts of Michigan, 1985, as amended.
(d) “Construction Fund” shall mean the 2018 Sanitary Sewer System Junior Lien Revenue Bonds Construction Fund created pursuant to Section 13.
(e) “Contract Documents” means the Purchase Contract between the City and the Authority, the Supplemental Agreement by and among the City, the Authority and the State of Michigan acting through the Department of Environmental Quality, and the Issuer’s Certificate for the Series 2018 Bonds or such other closing documents required by the Authority for the issuance of the Series 2018 Bonds.
(f) “Improvements” means the design, acquisition and construction of improvements to the System, including but not limited to improvements to the wastewater treatment plant and related facilities and appurtenances, including but not limited to odor control improvements, a flood pump station, and a pump station generator, as well as all work necessary or incidental to these improvements.
(g) “Prior Resolution” means Resolution 2015-2.

(h) “Resolution” means this Resolution and all amendments hereto.

(i) “Series 2018 Bonds” means the City’s 2018 Sanitary Sewer System Junior Lien Revenue Bonds issued pursuant to this Resolution.
Section 2. NECESSITY. PUBLIC PURPOSE: It is hereby determined to be necessary for the public health, safety, and welfare of the City to acquire and construct the Improvements to the System in accordance with the maps, plans and specifications therefore.

Section 3. ESTIMATED COST; PERIOD OF USEFULNESS : The cost of the Improvements has been estimated by the engineers to be approximately $4,175,000 including the payment of legal, engineering, financial and other expenses, which estimate of cost is approved and confirmed, and the period of usefulness of the Improvements is estimated to be greater than thirty (30) years.
Section 4. ISSUANCE OF BONDS. To pay a portion of the cost of acquiring and constructing the Improvements and to pay the legal and financial expenses and all other expenses incidental to the issuance of the Series 2018 Bonds, the City shall borrow the sum of not to exceed
$4,500,000 and issue its revenue bonds pursuant to the provisions of the Act. The Series 2018 Bonds shall be issued in the aggregate principal sum of not to exceed $4,500,000, as finally determined by the Authorized Officer at the time of sale, or such lesser amount thereof as shall have been advanced to the City pursuant to the Contract Documents.
During the time funds are being drawn down by the City under the Series 2018 Bonds, the Authority will periodically provide the City a statement showing the amount of principal that has been advanced and the date of each advance, which statement shall constitute prima facie evidence of the reported information; provided that no failure on the part of the Authority to provide such a statement or to reflect a disbursement or the correct amount of a disbursement shall relieve the City of its obligation to repay the outstanding principal amount actually advanced, all accrued interest thereon , and any other amount payable with respect thereto in accordance with the terms of the Series 2018 Bonds.
Section 5. SERIES 2018 BOND TERMS. The Series 2018 Bonds shall be issued as one fully registered manuscript bond, shall be sold and delivered to the Authority in any denomination. The Series 2018 Bonds shall be dated the date of delivery to the Authority, or such other date approved by the Authorized Officer, and shall be payable on the dates determined by the Authorized Officer at the time of sale provided the final maturity shall be no later than thirty years after the date of issuance. The Series 2018 Bonds shall bear interest at a rate as provided in the Contract Documents, payable semiannually on the dates determined by the Authorized Officer at the time of sale.

Notwithstanding the above, the final amount of any maturity and terms of the Series 2018 Bonds shall be as provided in the Contract Documents and will be finally determined by the Authorized Officer.
Section 6. PAYMENT OF BONDS; PLEDGE OF NET REVENUES . As provided in Section 6 of the Prior Resolution, the principal of and interest on the Series 2018 Bonds, as Additional Junior Lien Bonds, shall be payable from the Net Revenues derived from the operation of the System, including future improvements, enlargements and extensions thereof, after provision has been made for the payment of expenses of administration, operation and maintenance thereof and the Net Revenues of the System, including future enlargements, improvements, and extensions thereto, are hereby pledged to the payment of the principal of and interest on the Series 2018 Bonds. To secure the payment of the principal of and interest on the Series 2018 Bonds, a statutory lien is created pursuant to the Act to and in favor of the Bondholders of the Series 2018 Bonds upon the Net Revenues of the System, including future enlargements, improvements, and extensions thereof, which is a junior lien of equal standing and priority with respect to the Net Revenues of the System securing other outstanding Junior Lien Bonds, but subordinate to the first lien on the Net Revenues of the System securing any First Lien Bonds that may be issued. The Net Revenues so pledged shall be and remain subject to such lien until the payment in full of the principal of and interest on the Series 2018 Bonds or until Bonds are defeased as provided in the Prior Resolution.
The Series 2018 Bonds, including both principal and interest thereon, shall not be a general obligation of the City and shall not constitute an indebtedness of the City for the purpose of any debt limitations imposed by any constitutional, statutory or charter provisions.
Section 7. PRIOR REDEMPTION: The Series 2018 Bonds issued and sold to the Authority shall be subject to redemption prior to maturity by the City only with the prior written consent of the Authority and on such terms as may be required by the Authority.
Section 8. PAYING AGENT AND REGISTRATION.

(a) Appointment of Paying Agent. The initial Paying Agent for the Series 2018 Bonds shall be the City Treasurer.

(b) Authority’s Depository. Notwithstanding any other provision of this Resolution, so long as the Authority is the owner of the Series 2018 Bonds, (a) the Series 2018 Bonds are payable as to principal, premium, if any, and interest in lawful money of the United States of America at The Bank of New York Mellon Trust Company, N. A., or at such other place as shall be designated in writing to the City by the Authority (the “Authority’s Depository”); (b) the City agrees that it will deposit with the Authority’s Depository payments of the principal of, premium, if any, and interest on the Series 2018 Bonds in immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is due whether by maturity, redemption or otherwise; in the event that the Authority’s Depository has not received the City’s deposit by 12:00 noon on the scheduled day, the City shall immediately pay to the Authority as invoiced by the Authority an amount to recover the Authority’s administrative costs and lost investment earnings attributable to that late payment; and (c) written notice of any redemption of the Series 2018 Bonds shall be given by the City and received by the Authority’s Depository at least 40 days prior to the date on which such redemption is to be made.
Section 9. SALE OF BONDS. The Series 2018 Bonds shall be sold to the Authority. The City determines that a negotiated sale to the Authority is in the best interest of the City because the terms offered by the Authority are more favorable than those available from other sources of funding.
Section 10. BOND FORM: The Series 2018 Bonds shall be substantially in the form attached hereto as Exhibit A, and incorporated herein, with such completions, changes and additions as may be required by the Authority or as recommended by the City ‘s Bond Counsel and approved by the officers of the City signing the Series 2018 Bonds.
Section 11. AUTHORIZED OFFICER: The Authorized Officer is hereby designated, for and on behalf of the City, to do all acts and to take all necessary steps required to effectuate the sale, issuance and delivery of the Series 2018 Bonds to the Authority. The Authorized Officer is hereby authorized to execute and deliver the Contract Documents in substantially the form on file with the Clerk, with such changes, additions and completions as are approved by the Authorized Officer. The City hereby approves the Contract Documents in the form on file with the Clerk with such changes as are approved by the Authorized Officer. Notwithstanding any other provision of this Resolution, the Authorized Officer is authorized within the limitations of

this Resolution to determine the specific interest rate or rates to be borne by the bonds, not exceeding the maximum rate allowed by law, the principal amount, interest payment dates, dates of maturities, and amount of maturities, redemption rights, the title of the Series 2018 Bonds, date of issuance, and other terms and conditions relating to the Series 2018 Bonds and the sale thereof provided, however, the last annual principal installment shall not be more than thirty years from the date of issuance of the Series 2018 Bonds. The Authorized Officer’s approval of the terms shall be evidenced by his or her signature on the document or agreement stating such terms. The Authorized Officer is hereby authorized for and on behalf of the City, without further City Council approval, to do all acts and take all necessary steps required to effectuate the sale, issuance, and delivery of the Series 2018 Bonds. The Authorized Officer, together with the Clerk, or any one or more of them, are authorized to execute any orders, receipts, agreements, pledge agreements, documents or certificates necessary to complete the transaction, including, but not limited to, any issuers certificate, any certificates relating to federal or state securities laws, rules or regulations, any applications to the Michigan Department of Treasury, and any revenue sharing pledge agreement. The City hereby approves the Revenue Sharing Pledge Agreement in the form on file with the Clerk, with such changes as are approved by the Authorized Officer, and authorizes the Authorized Officer to execute and deliver the Revenue Sharing Pledge Agreement if it is required by the Authority.
Section 12. EXECUTION OF BONDS: The Mayor or the Mayor Pro Tern and the Clerk or the Deputy Clerk of the City are hereby authorized and directed to sign the Series 2018 Bonds, either manually or by facsimile signature, on behalf of the City. Upon execution, the Series 2018 Bonds shall be delivered to the purchaser thereof.
Section 13. CONSTRUCTION FUND. The proceeds of the Series 2018 Bonds shall be deposited in the Construction Fund. Such moneys shall be used solely for the purpose for which the Series 2018 Bonds were issued. Any unexpected balance in the Construction Fund remaining after completion of the Improvements may be used for such purposes as allowed by law. After completion of the Improvements and disposition of remaining Series 2018 Bond proceeds, if any, pursuant to the provisions of this Section, the Construction Fund shall be closed.
Section 14. CONTRACT WITH BONDHOLDERS: The provisions of this Resolution shall constitute a contract between the City and the Bondholders from time to time, and after the

issuance of any of such Series 2018 Bonds, no change, variation or alteration of the provisions of this Resolution may be made that would lessen the security for the Series 2018 Bonds. The provisions of this Resolution shall be enforceable by appropriate proceedings taken by such Bondholder, either at law or in equity.
Section 15. TAX COVENANT. The City covenants to comply with all requirements of the Code necessary to assure that the interest on the bonds will be and will remain excludable from gross income for federal income tax purposes. The Authorized Officer and other appropriate officials of the City are authorized to do all things necessary (including the making of such covenants of the City as shall be appropriate) to assure that the interest on the Bonds will be and will remain excludable from gross income for federal income tax purposes.
Section 16. PUBLICATION AND RECORDATION. This Resolution shall be published once in full in a newspaper of general circulation in the City qualified under state law to publish legal notices, and the same shall be recorded in the records of the City and such recording authenticated by the signature of the City Clerk.
Section 17. RESOLUTION SUBJECT TO MICHIGAN LAW . The provisions of this Resolution are subject to the laws of the State of Michigan.
Section 18. SECTION HEADINGS. The section headings in this Resolution are furnished for convenience of reference only and shall not be considered to be a part of this Resolution.
Section 19. SEVERABILITY: If any section, paragraph, clause or provision of this Resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Resolution.
Section 20. CONFLICT: Except as provided above, all Resolutions and Resolutions or parts thereof, insofar as the same may be in conflict herewith, are hereby repealed to the extent of the conflict; provided, that the foregoing shall not operate to repeal any provision thereof, the repeal of which would impair the obligation on the Bonds or the Prior Bonds.
Section 21. EFFECTIVE DATE OF RESOLUTION: Pursuant to Section 6 of the Act, this Resolution shall be approved on the date of first reading and this Resolution shall be effective immediately upon its adoption.

YEAS: Ceo, Dillon, Girbach, McClelland, Mitchell, TerHaar, Marl
NAYS:

EXHIBIT A

UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTY OF WASHTENAW CITY OF SALINE

2018 SANITARY SEWER SYSTEM JUNIOR LIEN REVENUE BONDS

Interest Rate

Maturitv Date

Date of Original Issue

% See Schedule I

_ _ _

_ _ ,2018

Registered Owner: Michigan Finance Authority

Principal Amount:

_ _ _

_ _ _ _ _

_ _ _ _ _

_ _ _

_ Dollars ($_ _ _ _

The City of Saline, Washtenaw County, Michigan (the “Issuer”), acknowledges itself indebted and, for value received, hereby promises to pay to the Registered Owner specified above, or registered assigns, out of the net revenues of the Sanitary Sewer System of the Issuer (the “System”), including all appurtenances, additions, extensions and improvements thereto after provision has been made for reasonable and necessary expenses of operation, maintenance and administration of the System (the “Net Revenues”), the amounts and on the Dates of Maturity set forth on Schedule I hereto, together with interest thereon from the dates of receipt of such funds, or such later date to which interest has been paid, at the Interest Rate per annum specified above, first payable on 1, 20_, and semiannually thereafter on the first day of April and October of each year, except as the provisions hereinafter set forth with respect to redemption of this Bond prior to maturity may become applicable hereto.

The Issuer promises to pay to the Michigan Finance Authority (the “Authority”) the principal amount of this Bond or so much thereof as shall have been advanced to the Issuer pursuant to a Purchase Contract between the Issuer and the Authority and a Supplemental Agreement by and among the Issuer, the Authority and the State of Michigan acting through the Department of Environmental Quality.

During the time funds are being drawn down by the Issuer under this Bond, the Authority will periodically provide the Issuer a statement showing the amount of principal that has been advanced and the date of each advance, which statement shall constitute prima facie evidence of

the reported information; provided that no failure on the part of the Authority to provide such a statement or to reflect a disbursement or the correct amount of a disbursement shall relieve the Issuer of its obligation to repay the outstanding principal amount actually advanced, all accrued interest thereon, and any other amount payable with respect thereto in accordance with the terms of this Bond.

Notwithstanding any other provision of this Bond, so long as the Authority is the owner of this Bond, (a) this Bond is payable as to principal, premium, if any, and interest at The Bank of New York Mellon Trust Company, N. A., or at such other place as shall be designated in writing to the Issuer by the Authority (the “Authority’s Depository”); (b) the Issuer agrees that it will deposit with the Authority’s Depository payments of the principal of, premium, if any, and interest on this Bond in immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is due whether by maturity, redemption or otherwise; in the event that the Authority’s Depository has not received the Issuer’s deposit by 12:00 noon on the scheduled day, the Issuer shall immediately pay to the Authority as invoiced by the Authority an amount to recover the Authority’s administrative costs and lost investment earnings attributable to that late payment; and (c) written notice of any redemption of this Bond shall be given by the Issuer and received by the Authority’s Depository at least 40 days prior to the date on which such redemption is to be made.

This Bond, being one fully registered manuscript bond, is issued in accordance with the provisions of Act 94, Public Acts of Michigan, 1933, as amended and a resolution adopted by the City Council of the Issuer May 18, 2015, and May_, 2018 (the “Resolution”), for the purpose of paying the cost of acquiring and constructing improvements to the System. This Bond is a self­ liquidating Bond, and is not a general obligation of the Issuer within any constitutional, statutory or charter limitation, but is payable, both as to principal and interest, solely from the Net Revenues of the System. The principal of and interest on this Bond are secured by a statutory lien on the Net Revenues.

The Issuer hereby covenants and agrees to fix, and maintain at all times while any of the Bonds shall be outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest upon all such Bonds as and when the same become due and payable, to maintain a bond and interest Redemption Account and to provide for the payment of expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Resolution. The statutory liens securing the Issuer’s First Lien Bonds (as defined in the Resolution) are first liens that shall be superior to the lien on the Net Revenues securing this Bond. The Bonds of this series shall have equal standing with the Issuer’s Junior Lien Bonds (as defined in the Resolution), and any Additional Junior Lien Bonds (as defined in the Resolution) that may be issued pursuant to the Resolution. Additional bonds of superior standing to the bonds of this series may be issued pursuant to the Resolution. For a complete statement of the revenues from which, and the conditions under which, this Bond is payable, a statement of the conditions under which additional bonds of equal or superior standing may hereafter be issued, and the general covenants and provisions pursuant to which this Bond is issued, reference is made to the Resolution.

Bonds of this series may be subject to redemption prior to maturity by the Issuer only with the prior written consent of the Authority and on such terms as may be required by the Authority.

In the event of a default in the payment of principal or interest hereon when due, whether at maturity, by redemption or otherwise, the amount of such default shall bear interest (the “additional interest”) at a rate equal to the rate of interest that is two percent above the Authority’s cost of providing funds (as determined by the Authority) to make payment on the bonds of the Authority issued to provide funds to purchase this Bond but in no event in excess of the maximum rate of interest permitted by law. The additional interest shall continue to accrue until the Authority has been fully reimbursed for all costs incurred by the Authority (as determined by the Authority) as a consequence of the Issuer’s default. Such additional interest shall be payable on the interest payment date following demand of the Authority. In the event that (for reasons other than the default in the payment of any municipal obligation purchased by the Authority) the investment of amounts in the reserve account established by the Authority for the bonds of the Authority issued to provided funds to purchase this Bond fails to provide sufficient available funds (together with any other funds that may be made available for such purpose) to pay the interest on outstanding bonds of the Authority issued to fund such account, the Issuer shall and hereby agrees to pay on demand only the Issuer’s pro rata share (as determined by the Authority) of such deficiency as additional interest on this Bond.

It is hereby certified and recited that all acts, conditions and things required by law, precedent to and in the issuance of this Bond, exist and have been done and performed in regular and due time and form as required by law and that the total indebtedness of the Issuer including this Bond, does not exceed any charter, constitutional or statutory limitation .

IN WITNESS WHEREOF, the City of Saline, Washtenaw County, Michigan, by its City Council, has caused this Bond to be signed, by the manual or facsimile signatures of its Mayor and

City Clerk, all as of the day of ,2018.

Brian Marl, Mayor

Terri Royal, Clerk

TRANSFER

For value received, the undersigned hereby sells, assigns and transfers unto

(Tax Identification or Social Security No. _,the within Bond and all rights thereunder, and hereby constitutes and appoints attorney, to transfer the within Bond on the books kept for registration thereof by the Paying Agent, with full power of substitution in the premises.

Dated: ————————-
Notice: The signature to this assignment must correspond with the name as it appears on the registration books every particular, without alteration or enlargement or any change whatever.

Name of lssuer CITY OF SALINE
DEQ Project No:

DEQ Approved Amount:

$ _

SCHEDULE I
Based on the schedule provided below, unless revised as provided in this paragraph, repayment of principal of the Bond shall be made until the full amount advanced to the Issuer is repaid. In the event the Order of Approval issued by the Department of Environmental Quality (the “Order”) approves a principal amount of assistance less than the amount of the Bond delivered to the Authority, the Authority shall only disburse principal up to the amount stated in the Order. In the event (I) that the payment schedule approved by the Issuer and described below provides for payment of a total principal amount greater than the amount of assistance approved by the Order or (2) that less than the principal amount of assistance approved by the Order is disbursed to the Issuer by the Authority, the Authority shall prepare a new payment schedule, which shall be effective upon receipt by the Issuer.

Due Date Amount of Principal Installment Due

Interest on the Bond shall accrue on that portion of principal disbursed by the Authority to the Issuer pursuant

to the Order from the date such portion is disbursed, until paid, at the rate of
1, 20_, and semiannually thereafter.

% per annum, payable

The Issuer agrees that it will deposit with The Bank ofNew York Mellon Trust Company, N. A., or at such other place as shall be designated in writing to the Issuer by the Authority (the “Authority’s Depository”) payments of the principal of, premium, if any, and interest on this Bond in immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is due whether by maturity, redemption or otherwise. In the event that the Authority’s Depository has not received the Issuer’s deposit by 12:00 noon on the scheduled day, the Issuer shall immediately pay to the Authority as invoiced by the Authority an amount to recover the Bond Authority’s administrative costs and lost investment earnings attributable to that late payment.
*Not to exceed amount. Loan reductions at close out will result in a proportional decrease.

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Seth Kinker

Reporter/Digital Media for The Sun Times News

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