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HomeMy WebLinkAboutCOUNCIL MINUTES 1986-12-04 22988 MINUTES OF THE ONE HUNDRED AND NINETY-NINETH SPECIAL MEETING OF THE COUNCIL OF THE CITY OF LIVONIA Pursuant to the provisions of Section 8, Chapter 14 of the City Charter, the above meeting was held December 4, 1986 at the City Hall , 33000 Civic Center Drive, Livonia, Michigan and was called to order by the President of the Council at approximately 7:06 P.M. Roll was called with the following result: Present: Robert R. Bishop, Fernon P. Feenstra, Robert E. McCann, Gerald Taylor, Robert D. Bennett and Ron Ochala. Absent: Joan McCotter*. Elected and appointed officials present: Robert F. Nash, City Clerk; Harry Tatigian, City Attorney and Jack Dodge, Director of Finance. *Councilwoman McCotter entered the meeting at 7.10 P.M. On a motion by Councilman Ochala seconded by Council man Feenstra, Lit was #1132-86 WHEREAS, general ad valorem real and personal property taxes are imposed and levied on property located in the City of Livonia (the "City" ) by various units of government for which the City is the collecting unit, pursuant to Act 206 of the Public Acts of Michigan of 1893, A D. , as amended, MCL 211 1 et seq ( "Act 206" ) , including the County of Wayne, Livonia Public Schools School District, Clarenceville School District, Schoolcraft Community College District, and Wayne County Intermediate School District (collectively, the "Units" ) on December 1 of each year, and 229SS imWHEREAS, the City acts as the local property tax collecting unit for the Units, and WHEREAS, in order to significantly improve the cash flow of the Units and to allow the Units to exercise better fiscal control , it is necessary and desirable fcr the City to issue consolidated tax anticipation notes in anticipation of part of the real and personal property taxes of the Units levied on December 1, 1986 on real and personal property located within the boundaries of the City (the "Notes" ) in accordance with the provisions of Section 3b of Chapter IV of Act No 202, Public Acts of Michigan, 1943, as amended, (the "Act" ) , and WHEREAS, each of the Units has consented to and has requested the City to issue the Notes by separate resolutions and each has authorized a separate Tax Zevy Agreement with the City with respect to the issuance of the Notes on behalf of the Units and the collection and dsposition of taxes levied on December 1, 1986 (the "Agreements" ) ; and WHEREAS, the Act authorizes the Cit-, to issue the Notes after consenting to and being requeste:: to do so by the Units, and 22390 im WHEREAS, under the authority of the Act, the City proposes to issue the Notes and to distribute proceeds therefrom to each of the Units consenter.; to and requesting the issue all in amounts equal to a portion of the December 1, 1986 tax levy set forth in Exhibit A hereto, and WHEREAS, it has been estimated that the amount necessary for distribution to the Units will require the issuance, sale and delivery of the Notes in the aggrec:_e principal amount of $37, 600, 000, as hereinafter provided, and WHEREAS, no other notes have been issued in anticipation of the taxes in anticipation of which the Notes are being issued; NOW, THEREFORE, BE IT RESOLVED BY SHE CITY COUNCIL OF THE CITY OF LIVONIA 1 AUTHORIZATION OF NOTES The Nc=es aggregating the principal sum of Thirty-Seven Million Six Hundred Thousand Dollars ($37, 600, 000) , shall be issued and sold pursuant to the provisions of the Act and other applicable statutory provisions The principal sum is ca:=ulated to produce proceeds of the Notes equal to a percentage of the total of the tax levies anticipated in each case by each of the Units as set forth on Exhibit A hereto. 22991 2 . NOTE DETAILS The Notes Ball be designated "Consolidated Tax Anticipation Notes, Series 1986-B" ; shall be dated as of December 8, 1986, shall be numbered consecutively in order of authenticatior , shall be payable to bearer, shall be in the denomination of $25,000 each or any integral multiple thereof at the opt:on of the purchaser thereof; shall mature December 8, 19E7 and shall bear interest at a rate of interest of 4 45,, per annum payable at maturity Interest shall be computed on the basis of a 365 day year. 3 PAYMENT OF PRINCIPAL AND INTEREST The principal Imo of and interest on the notes shall be parable in lawful money of the United States, in immediately a"ailable funds, upon presentation and surrender of the Notes to the paying agent at maturity 4 NOTE PAYING AGENT. State Street Bank and Trust Company, N.A , New York, New York is hereby designated as the paying agent for the Notes (the "Paying Agent" ) . The Finance Director may from time to time as required designate a successor Paying Agent In addition to the other responsibilities assigned to it pursuant to this resolution, the Paying Agent shall take all steps necessary to pay the principal of and interest on the Notes when due. 22992 5 E'. ECUTION, r.UTHENT:C-TIO% OF Nc.=s The Notes shall be executed in the nar=_ of the City by the facsimile signatures of the Mayor, ::ty Clerk and City Treasurer and authenticated by the man_al signature of an authorized representative of the Paying =gent and a facsimile of the seal of the City shall be imp:_nted on the Notes After the Notes have been executed and authenticated for delivery to the original purchaser thereof, they shall be delivered by the Finance Director tc the purchaser upon receipt of the purchase price 6 OWNERSHIP OF NOTES The City and the Paying Agent may deem and treat the bearer of eacY `.ote as the absolute owner of such Note, whether such Note shall be overdue or tonot, for the purpose of receiving paymer: of the principal of and interest on such Note and for all :cher purposes All payments made to any such bearer, or upon his order, in accordance with the provisions of Section 3 of this resolution shall be valid and effec=:_al to satisfy and discharge the liability upon such Note :o the extent of the sum or sums so paid and neither the Cit nor the Paying Agent shall be affected by any notice to the contrary The City, to the extent permitted by law, will indemnify and save the Paying Agent harmless from and against any and all loss, cost, charge, expense, judgment or liat:lity incurred by it, acting in good faith and without negligence hereunder, in so treating such bearer 22993 7 FORM OF NOTES The Notes shales be in substantially imsthe following form 22994 UNITED STATES OF A!,EFI:A L STATE OF MICHIGAN COUNTY OF WAYNE CIT OF LIVONIA CONSOLIDATED TAX ANTICIPATION NOTE SERIES 1986 B INTEREST RATE MATURITY DATE OF OFIGINAL ISSUE CUSIP December 8, 1987 December 8, 1986 Principal Amount The City of Livonia, County of Wayne, State of Michigan ( the "City" ) , acknowledges itself indebted to, and for value received, hereby promises to pay to t:e bearer hereof the Principal Amount set forth above and interest thereon at the Interest Rate specified above on the macurity date specified above, upon presentation and surrender cf this note at the principal office of State Street Bank and Trust Company, N A , New York, New York, paying agent, or at such successor L successor note paying agent as may be designated pursuant to the Resolution Principal and interest are payable in lawful money of the United States of Amer_ca in immediately available funds Interest on the notes shall be computed on the basis of a 365 day year and the a:cual number of days elapsed This note is one of a series of nztes aggregating the principal sum of Thirty-Seven Million Six Hundred Thousand Dollars ( $37, 600, 000) issued by the Cit.! under and pursuant to and in full conformity with the Consc:tution and Statutes of Michigan (especially Section 3b of Chapter IV of Act No 202, Public Acts of 1943 , as cc:ended) and a note authorizing resolution adopted by the City Council of the City (the "Resolution" ) The proceeds of the notes are to be used to make payments to various tax:ng units levying ad valorem taxes on taxable property located within the boundaries of the City in amounts equa: to their respective shares of the proceeds of the notes as set forth in the Resolution For the payment of the principal of and interest on this note, and the series of notes of which this is one, the City has pledged all amounts in its 1986-B N:te Payment Fund ( as defined in the Resolution) In additlon, the City has pledged its limited tax full faith and credit therefor Should the funds pledged for payment of the principal of and 22995 interest on the notes of this ser-es be insufficient im therefor, the City shall pay such princ:pal and interest as a first budget obligation from its general funds, including the proceeds of the levy of ad valorem taxes on all taxable property in the City, subject to applicable charter, statutory and constitutional limitations The City does not have the authority to levy taxes for parent of the principal of and interest on the notes in excess of applicable charter, statutory or constitutional limitations This note is not subject to redemption prior to maturity It is hereby certified, recited ant declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the notes of this series, existed, have happened and have been performed in due time, form and manner as required by the Constitution and laws of the State of Michigan This note shall not be valid unless the Certificate of Authentication has been manually executed by an authorized representative of the paying agent IN WITNESS WHEREOF, the City of Livonia, County of im Wayne, State of Michigan, has caused this note to be executed in its name by the facsimile signatures of its Mayor, City Clerk and City Treasurer and a facsim:le of its corporate seal to be imprinted hereon ir 22996 CITY OF LIVONIA 1110 (SEAL) By By City Clerk jor By City Treas_:er CERTIFICATE OF AUTHENTIC;7ION This note is one of the notes des::ibed in the within mentioned Resolution State Street Bank and Trust Company, Boston, Massachusetts By: Authorized Representative AUTHENTICATION DATE imo 22997 8 NOTE PAYMENT FUND There is hereby established imwith a bank or savings institution to be selected by the City Treasurer an account designated the 198E-3 Note Payment Fund into which the City Treasurer shall de;:sit as received all December 1 , 1986 taxes collected on behalf of the Units on and after December 1 , 1986 (except am:-nts, not to exceed $2 , 814, 800, collected on or prior to December 15, 1986, which will be distributed to the Units pursuant to the Agreements) up to the amount of each Unit' s share cf the Note proceeds plus all interest and penalties applicable thereto and any interest earnings thereon in accordance with the Agreements The City Treasurer also shall deposit in the 1986-B Note Payment Fund all other amounts received ty the City pursuant to the Agreements and by the Act, the deposit required by Section 10 of this Resolution and all in -estment earnings on all moneys deposited in the 1986-B Nc:e Payment Fund The City hereby pledges all moneys and funds deposited in the 1986-B Note Payment Fund for the payment of the principal of and interest on the Notes as the same shall become due and payable. The principal of and interest cm the Notes shall be paid at maturity using any moneys in the 1986-B Note Payment Fund Until the principal of and interest on the Notes have been paid in full, the 1986-B Note Payment Fund shall be used for no other purpose. All amounts rena:ning in the 1986-B Note Payment Fund after the principal of and interest on the Notes and all expenses incurred in connection with the 22998 issuance of the Notes have been paid in full , shall be iw transferred to the general fund of the City 9 FULL FAITH AND CREDIT OF CITY The Notes shall be limited tax general obligations of the City and the full faith and credit of the City is hereby pledged for the payment of the principal of and interest on the Notes . The City covenants that if the amounts on deposit in the 1986-B Note Payment Fund are not sufficient to pay the principal of and interest on the Notes when due at maturity, the City will promptly pay from its general fund moneys as a first budget obligation, including the proceeds of a tax levied therefor on all taxable property within the boLndaries of the City within applicable constitutional, statutory and charter limitations, an amount which, when added to the amount on deposit in the 1986-B Note Payment F-nd, will enable the payment of such principal and interest on the Notes The City shall not have the power to levy taxes for the payment of the principal of and interest on the Notes in excess of applicable constitutional, statutory or charter limitations Nothing in this resolution shall be construed as prohibiting the City from issuing or incurring additional limited or unlimited tax obligations for any purposes permitted by law 10 NOTE PROCEEDS FUND There is hereby established with a bank or savings institution to be selected by the City Treasurer an account designated the 1986-B Note Proceeds Fund tre into which the City Treasurer shall deposit the proceeds of 22999 the Notes The City Treasurer shall pai to the Units their Lrespective shares of the proceeds of the Notes in accordance with the Agreements Any amounts remaining in the 1986-B Note Proceeds Fund after the Units have been paid their respective shares of the proceeds of the Notes and after payment of all costs of issuance of the Notes shall be transferred to the 1986-B Note Payment Fund The City Finance Director shall determine each Unit' s share of the proceeds of the Notes in accordance with the Agreements 11 . INVESTMENT OF MONEYS. The City Treasurer is hereby authorized and directed to invest all moneys in the 1986-B Note Payment Fund and the 1986-B Note Proceeds Fund in investments which are authorized as lawful investments for cities in accordance with applicable state law subject to the provisions of any agreements applicable to the investment of such moneys The Treasurer is hereby al..- orized to negotiate investment agreements with financial institutions and/or securities dealers to provide for the investment of moneys in said funds. The Mayor, City Clerk and City Treasurer (or Deputy City Treasurer) are hereby authorized to execute and deliver each of said agreements on behalf of the City with such changes as they deem appropriate and not adverse to the City. 12 APPROVAL OF AGREEMENTS There have been presented to this Council the forms of Agreements between the City and Imp the Units The Mayor, Finance Director and/or City Clerk are 23000 each hereby authorized to execute and de .:ver such Agreements on behalf of the City and are further a.thorized to approve any changes, corrections, additions, deletions or other revisions to said Agreements as in the:r judgment shall be appropriate or necessary to effect the issuance of the Notes and which do not adversely affect the City Execution of any Agreement shall be deemed to constitute the approval of any such change, correction, addition, deletion or other revision Copies of the Agreements which have been presented to this Council shall be identified as such and placed on file with the City Clerk The City herebi pledges all of its right, title and interest in, to and under the Agreements to the payment of the Notes irm13 PAYMENT OF EXPENSES. The Finance Director is hereby authorized and directed to pay a._ of the expenses of the issuance of the Notes, including bu: not limited to the fees and charges of the underwriter, from investment earnings on the proceeds of the Notes after the payments to the Units but before the transfer thereof to the 1986-B Note Payment Fund or from the general funds of the City. The amount of the expenses paid from the general funds of the City, if any, shall be reimbursed from the 1986-B Note Payment Fund after the principal of and interest on the Notes has been paid in full 14 APPROVAL OF DEPARTMENT OF TREASURY. The issuance and sale of the Notes shall be subject to permission (or an 23001 exception therefrom) being granted therefor by the Department im of Treasury of the State of Michigan 7he applications made by the Finance Director to the Departme:t of Treasury for a waiver of the requirement for the public sale thereof, a good faith deposit and credit enhancement are hereby approved and ratified 15 OFFICIAL STATEMENT The f:rms of official statement and preliminary official statezent for the Notes on file with the City Clerk are hereby approved The Finance Director is hereby authorized to execl.:e on behalf of the City the off. cial statement with respect to the Notes and the use by Morgan Stanley & Co Incorporated (the "Underwriter" ) of the official statement and a preliminary official statement in connection with the market:ng, offering and sale of the Notes is hereby approved 16 NOTE PURCHASE AGREEMENT note purchase agreement (the "Note Purchase Agreement" ) with the Underwriter, providing for sale of the Notes to the Underwriters at rate of interest of 1C: 143% at a price of $37, 653, 768 on file with the City Cler? is hereby approved and the Mayor, Finance Director and/or City Clerk are each authorized and directed to execute and deliver the same on behalf of the City and sale of the Notes to the Underwriter as provided in the Note Purchase Agreement, is hereby approved 23002 17 SALE, ISSUANCE AND DELIVERY OF !.:TES The Finance Director and all other officers and ager:s of the City are authorized to do all things necessary or c:nvenient to effect the sale, issuance and delivery of the L:tes in accordance with the provisions of this resolution an to implement the provisions of any agreements with respect to the issuance of the Notes or the security for the payment cf the principal of and interest on the Notes to which the City is a party including the execution and delivery cf all documents, instruments and agreements necessary therefor and are hereby authorized to consent to such additions or changes in any of the agreements approved by this resolL:ion as they deem appropriate and not to the detriment of the City ir18 MUTILATED, LOST, STOLEN OR DESTF:YED NOTES In the event any Note is mutilated, lost, stole: or destroyed, the Finance Director may, on behalf of the Cit.. , order the Paying Agent to authenticate and deliver a new h:te having a number not then outstanding, of like date, matLrlty, interest rate and denomination as that mutilated, lost, stolen or destroyed. In the case of a mutilated Note, a replacement Note shall not be delivered unless and until such mutilated Note is surrendered to the Paying Agent. In the case of a lost, stolen or destroyed Note, a replacement Note shall not be delivered unless and until the Finance Director and the 1ft Paying Agent shall have received such prc:f of ownership and '4 23003 loss and indemnity as they determine to be sufficient, which shall consist at least of ( i ) a lost instrument bond for principal and interest remaining unpaid on the lost, stolen or destroyed Note, ( ii ) an affidavit of the owner (or his or her attorney) setting forth ownership of the Note lost, stolen or destroyed and the circumstances under which it was lost, stolen or destroyed, (iii ) the agreement of the owner of the Note (or his or her attorney) to fully indemnify the City and the Paying Agent against loss due to the lost, stolen or destroyed note and the issuance of any replacement Note in connection with it, and (iv) the agreement of the owner of the Note (or his or her attorney) to pay all expenses of the City and Paying Agent in connection with the imreplacement. 19 RESOLUTION IRREVOCABLE Except as provided in Sections 20 and 21 hereof, upon delivery of the Notes, this resolution shall be irrevocable until such date as all principal of and interest on the Notes shall have been paid in full 20. AMENDMENTS NOT REQUIRING CONSENT OF OWNERS OF NOTES The City may, without the consent of or notice to any of the owners of the Notes, but with notice to Moody' s Investors Service, Inc . , if the Notes are rated by it, adopt one or more supplements to or amendments of this resolution for one or more of the following purposes, to (i ) cure any low formal defect, omission, inconsistency or ambiguity in this 23004 resolution, ( ii ) add to the covenants and agreements of the 110 City in this resolution or other covenarts or agreements, or to surrender any right or power reserved or conferred upon the City, and which shall not adversely affect the interests of the owners of the Notes, or (iii ) confirm, as further assurance, any pledge of or lien on any moneys, securities or funds securing the Notes Before any supplemental or amendatory resolution is entered into, there shall have been delivered to the the City an opinion of nationally-recognized bond counsel stating that such supplemental or amendatory resolution is authorized or permitted by the resolution and the laws of the State of Michigan, complies with their respective terms, will, upon I= upon its execution and delivery, be valid and binding on the City in accordance with its terms and will not adversely affect the exemption from federal income taxation of interest on the Notes. 21 AMENDMENTS REQUIRING CONSENT OF OWNERS OF NOTES. Supplements to or amendments of this resolution other than those described above may be made only by a supplemental or amendatory resolution consented to in writing by the owners of not less than 51% of the aggregate prinzipal amount of the Notes outstanding; provided, however, that no supplemental or amendatory resolution will be permitted which would (a) extend the stated maturity of or time for paying interest ir on any Note or reduce the principal am:unt of or rate of 23005 interest payable on any Note without the consent of the owner Im of such Note; (b) prefer or give a priory to any Note over and other Note, (c) create a claim or 1:en upon or a pledge of the security for the Notes ranking prior to or on a parity with the claim, lien or pledge in favor of the owners of the the Notes except as permitted by this Resolution; (d) reduce the percentage of the aggregate principal amount of Notes then outstanding the consent of the owners of which is required to authorize such supplement or amendment without in each case the written consent of the owners of all notes then outstanding 22 AMENDMENT OF AGREEMENTS. The Agreements between the City and the Units may, following delivery of the Notes, only be amended or supplemented for the p-_:rposes set forth in Sections 20 and 21 above in accordance with the same standards and procedures and with the approvals of the same parties set forth in such Sections . 23 . TAX COVENANT. The City hereby covenants, to the extent permitted by law, to take all actions within its control necessary to maintain the exemption of the interest on the Notes from general federal income taxation (as opposed to alternative minimum income or other indirect taxation) under federal tax law existing as of the date of delivery of the Notes 24. NON-ARBITRAGE COVENANT. Notwithstanding any other provision of this resolution or other resolutions previously 23006 adopted, the City covenants with the p_-chaser of the Notes, that the City will make no use of the proceeds of the Notes (within the meaning of Sections 1 . ::3-13 , 1 . 103-14 and 1 103-15 of the Income Tax Regulatio:s prescribed by the Commissioner of Internal Revenue) whi:a, would cause the Notes to be "arbitrage bonds. " 25 . NOTICES. For purposes of not::es to be given under this resolution, the following addresses shall be in effect, unless and until changed by notice from the appropriate party to all others listed below The City City of Livonia 33000 Civic Center Drive Livonia, Michigan 48154 Attention City Finance Director The Underwriter Morgan Stanley & Co. Incorporated 1251 Avenue of the Americas New York, New York 10020 Attention: Dennis Santos The Paying Agent State Street Bank and Trust Cc pany, N.A. 61 Broadway New York, New York 10004 26 PRIOR RESOLUTIONS All resolti.::ons and parts of resolutions insofar as they conflict with the provisions of this Resolution are hereby rescinded 23C07 EY.EIBIT A ALLOCAT::% OF DECEIBER 1 LE ': Amount of Mount of Anticipated Anticipated Levy Paid Amount Amount Levy Paid from of of Levy (%) of from Note Collections lnit Levy Anticipated Total Levy Proceeds December 1-15 Livonia 529, 186,404 $26,729,485 (91 58%) 52.6,972 , 196 $1 ,757,293 Public Schools School District Schoolcraft 1 ,997,540 1 ,829,387 (91 58%) 1 ,709 , 116 120,271 Community College District Wayne County 1,845,397 1 ,690,05: (91 58%) 1 ,578,941 111,110 Inter- mediate School District Clarenceville 1 ,952,060 1 ,787 ,733 (91 58%) 1 ,670,203 117 ,532 School District Charter 11,768,841 8,378,13E (71 19 .)* 7,669,544 708,594 County of Wayne $46,750,242 $40,414,80: 537,600,000 $2,814,800 *Reduced to reflect issuance of tax anticipation notes authorized by the County and expected to be delivered in early December, 1986 A roll call vote was taken on the foregoing resolution with t^e following result: AYES. McCotter, Feenstra, McCann, Taylor, 5ennett, Ochala, Bishop. NAYS None. 23008 On a motion by Councilman Bennett, seconded by Councilwoman McCotter, and unanimously adopted, this 199th Special Meeting of the Council of the City of Livonia was duly adjourned at 7:25 P.M. , December 4, 1986 xstd-t Robert F Nash, City Clerk