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HomeMy WebLinkAboutCOUNCIL MINUTES 1986-06-23 SPECIAL 22582 lbw MINUTES OF THE ONE HUNDRED AND NINETY-SIXTH 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 June 23, 1986 at the City Hall , 33000 Civic Center Drive, Livonia, Michigan, and was called to order by the President of the Council at approximately 7:30 P.M. Roll was called with the following result. Present: Robert R. Bishop, Joan McCotter, Fernon P. Feenstra, Robert E. McCann, Gerald Taylor and Robert D. Bennett. Absent: Ron Ochala. Elected and appointed officials present: Robert F Nash, City Clerk, Cathryn Kerby White, Assistant City Attorney and Jack Dodge, Director of Finance On a motion by Councilman Bennett, seconded by Councilman Feenstra, and unanimously adopted, it was 1581-86 WHEREAS, general ad valorem real and personal property taxes are imposed and levied on property located in the City of Livonia (the "City") by the City and by other 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 Livonia Public Schools School District, Clarenceville School District, the Schoolcraft Community College District, and the Oakland County Intermediate School District (collectively, the "Units") on July 1 of each year; and WHEREAS, 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 for the City to issue consolidated tax anticipation notes in anticipation of part of the real and personal property taxes of the Units levied on July 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 impWHEREAS, each of the Units has consented to and has requested the City to issue the Notes by separate resolutions and each has authroized a separate Tax Levy Agreement with the City with respect 22K3 imw to the issuance of the Notes on behalf of the Units and the collection and disposition of taxes levied on July 1 , 1986 (the "Agreements"), and WHEREAS, the Act authorizes the City to issue the Notes after consenting to and being requested to do so by the Units, and WHEREAS, under the authority of the Act, the City proposes to issue the Notes and to distribute proceeds therefrom to each of the Units consenting to and requesting the issue all in amounts equal to a portion of the July 1 , 1986 tax levy, 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 aggregate principal amount of $31 ,000,000, 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 THE CITY COUNCIL OF THE CITY OF LIVONIA 1 AUTHORIZATION OF NOTES. The Notes aggregating the principal sum of Thirty-One Million Dollars ($31 ,000,000), shall be issued and sold pursuant to the provisions of the Act and other applicable statutory provisions. The principal sum is calculated to produce proceeds of the Notes equal to 93 2964% of the total of the tax levies anticipated by each of the Units as set forth on Exhibit A hereto 2. NOTE DETAILS The Notes shall be designated "Consolidated Tax Anticipation Notes, Series 1986", shall be dated as of the date of their delivery to the purchasers thereof, shall be numbered from 1 upward, shall be fully registered, shall be in the denomination of $5,000 each or any integral multiple thereof at the option of the purchaser thereof, shall mature June 30, 1987 and shall bear interest at a rate of interest of 4.6% per annum payable at maturity Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed 3. PAYMENT OF PRINCIPAL AND INTEREST The principal of and interest on the notes shall be payable in lawful money of the United States, in immediately available funds, upon presentation and surrender of the notes to the note registrar and paying agent at maturity. 4 NOTE REGISTRAR AND PAYING AGENT State Street Bank & im. Trust Company, N A , New York, New York is hereby designated as the paying agent for the Notes (the "Paying Agent"). State Street Bank and Trust Company, Boston, Massachusetts is hereby designated % 22584 as the registrar for the Notes (the "Registrar") The Finance Director may from time to time as required designate a successor Paying Agent or Registrar 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 5. EXECUTION, AUTHENTICATION AND DELIVERY OF NOTES. The Notes shall be executed in the name of the City by the facsimile signatures of the Mayor, City Clerk and City Treasurer and authenticated by the manual signature of an authorized representative of the Registrar and a facsimile of the seal of the City shall be imprinted 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 to the purchaser upon receipt of the purchase price Additional Notes bearing the facsimile signatures of the Mayor, the City Clerk and City Treasurer and upon which a facsimile of the seal of the City is imprinted may be delivered to the Registrar for authentication and delivery in connection with the exchange or transfer of Notes The Registrar shall indicate on each Note the date of its authentication 6 EXCHANGE AND TRANSFER OF NOTES Any Note, upon surrender thereof to the Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner 160 or his or her duly authorized attorney, may, at the option of the registered owner thereof, be exchanged for Notes of any other authorized denomination Each Note shall be transferable only upon the books of the City, which shall be kept for that purpose by the Registrar, upon surrender of such Note together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney Upon the exchange or transfer of any Note, the Registrar on behalf of the City shall cancel the surrendered Note and shall authenticate and deliver to the transferee a new Note or Notes of any authorized denomination of the same maturity date, interest rate and aggregate principal amount as the surrendered note. The City, the Registrar and the Paying Agent may deem and treat the person in whose name any Note shall be registered upon the bocks of the City as the absolute owner of such Note, whether such Note shall be overdue or not, for the purpose of receiving payment of the principal of and interest on such Note and for all other purposes All payments made to any such registered owner, or upon his order, in accordance with the provisions of Section 3 of this resolution shall be valid and effectual to satisfy and lip discharge the liability upon such Note to the extent of the sum or sums so paid and neither the City, the Registrar nor the Paying Agent shall be affected by any notice to the contrary. The City, 22585 to the extent permitted by law, will indemnify and save the Registrar and the Paying Agent harmless from and against any and all loss, cost, charge, expense, judgment or liability incLrred by it, acting in good faith and without negligence hereunder, in so treating such registered owner For every exchange or transfer of Notes, the City or the Registrar may take a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. 7. FORM OF NOTES. The Notes shall be in substantially the following form UNITED STATE OF AMERICA STATE OF MICHIGAN COUNTY OF WAYNE CITY OF LIVONIA CONSOLIDATED TAX ANTICIPATION NOTE, SERIES 1986 INTEREST RATE MATURITY DATE OF ORIGINAL ISSUE CUSIP 4.60% June 30, 1987 June 26, 1986 Registered owner 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 the Registered Owner identified above, or registered assigns, the Principal Amount set forth above and interest thereon at the Interest Rate specified above on the maturity date specified above, upon presentation and surrender of this note at the principal office of State Street Bank and Trust Company, N.A. , New York, New York, as paying agent, or at such successor note paying agent as may be designated pursuant to the Resolution. Principal and interest are payable in lawful money of the United State of America in immediately available funds Interest on the notes shall be computed on the basis of a 365 day year and the actual number of days elapsed iwoThis note is one of a series of notes aggregating the principal sum of Thirty-One Million Dollars ($31 ,OCO,000) issued by the City under and pursuant to and in full conformity with the Constitution 22586 and Statutes of Michigan (especially Section 3b of Chapter IV of Act No. 202, Public Acts of 1943, as amended) 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 taxing units levying ad valorem taxes on taxable property located within the boundaries of the City in amounts equal 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 Note Payment Fund (as defined in the Resolution). In addition, the City has pledged its limited tax full faith and credit therefor Should the funds pledged for payment of the principal of and interest on the notes of this series be insufficient therefor, the City shall pay such principal 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 payment of the principal of and interest on the notes in excess of applicable charter, statutory or constitutional limitations. This note is transferable, as provided in the Resolution, only upon the bocks of the City kept for that purpose by State Street Bank and Trust Company, Boston, Massachusetts, as note registrar, upon the surrender of this note together with a written instrument of transfer satisfactory to the note registrar and paying agent duly execLted by the registered owner or his or her attorney duly authorized in writing Upon the exchange or transfer of this note a new note or notes of any authorized denomination, in the same a9gregate principal amount, shall be authenticated and delivered to the transferee in exchange therefor as provided in the Resolution, and upon payment of the charges, if any, therein provided. Notes so authenticated and delivered shall be in the denomination of $5000 or any integral multiple thereof This note is not subject to redemption prior to maturity. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happer and be performed precedent to and in the issuarce of the notes of this series, existed, have Fappered and have been performed in due time, form and manner as required by the Constitution and laws of the State of Michigan. IN WITNESS WHEREOF, the City of Livonia, County of Wayne, State of Michigan, has caused this note to be execLted in its name by the facsimile signatures of its Mayor, City Clerk and City Treasurer and a facsimile of its corporate seal to be imprinted hereon This note shall not be valid unless the Certificate of 22587 L Authentication has been manually executed by an authorized representative of the note registrar and paying agent CITY OF LIVONIA (SEAL) By By: City Clerk Mayor By City Treasurer CERTIFICATE OF AUTHENTICATION This note is one of the notes described in the within mentioned Resolution. State Street Bank and Trust Company, Boston, Massachusetts By Authorized Representative AUTHENTICATION DATE: ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (please print or type name, address and taxpayer identification number of transferee) the within note and all rights thereunder and does hereby irrevocably constitute and appoint attorney to transfer the within note on the books kept for registration thereof, with full power of substitution in the premises. Dated Notice The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever. When assignment is made by a guardian, trustee, executor or administrator, an officer Iwo of a corporation, or anyone in a representative capacity, proof of his authority to act must accompany the Note. 22588 Imp Signature Guaranteed The signature must be guaranteed by a commercial bank, a trust company or a brokerage firm which is a member of a major stock exchange 8 NOTE PAYMENT FUND. There is hereby established with a bank or savings institution to be selected by the City Treasurer an account designated the 1986 Note Payment Fund into which the City Treasurer shall deposit as received all July 1 , 1986 taxes collected on behalf of the Units on and after July 1 , 1986 (except amounts, not to exceed $50,000, collected on or prior to July 15, 1986, which will be distributed to the Units pursuant to the Agreements) up to the amount of each Unit's share of 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 Note Payment Fund all other amounts received by the City pursuant to the Agreements and by the Act, the deposit required by Section 10 of this Resolution and all investment earnings on all moneys deposited in the 1986 Note Payment Fund. The City hereby pledges all moneys and funds deposited in the 1986 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 on the Notes shall be paid at maturity using any moneys in the 1986 Note Payment Fund. Until the principal of and interest on the Notes have been paid in full , the 1986 Note Payment Fund shall be used for no other purpose All amounts remaining in the 1986 Note Payment Fund after the principal of and interest on the Notes and all expenses incurred in connection with the issuance of the Notes have been paid in full , shall be 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 yard 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 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 boundaries of the City within applicable constitutional , statutory and charter limitations, an amount which, when added to the amount on deposit in the 1986 Note Payment Fund, 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 section shall be construed as iwe prohibiting the City from issuing or incurring additional limited or unlimited tax obligations for any purposes permitted by law 22589 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 Note Proceeds FLrd into which the City Treasurer shall deposit the proceeds of the Notes. The City Treasurer shall pay to the Units their respective shares of the proceeds of the Notes in accordance with the Agreerents. Any amounts remaining in the 1986 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 stall be transferred to the 1986 Note Payment Fund The City Finarce 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 Note Payment Fund and the 1986 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 form of investment agreements with Standard Federal Bank, Troy, Michigan, First Federal of Michigan, Detroit, Michigan and Michigan National Bank of Detroit, Detroit, Michigan to provide for the investment of moneys in said funds each on file with the City Clerk are each hereby approved and the Mayor, City Clerk and City Treasurer (or Deputy City Treasurer) are hereby authorized to execute ant 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 the Units. The Mayor and City Clerk are hereby authorized to execute and deliver such Agreements on behalf of the City and are further authorized to approve any changes, corrections, additions, deletions or other revisions to said Agreements as in their 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 hereby pledges all of its right, title ard interest in, to and under the Agreements to the payment of the Notes 13. PAYMENT OF EXPENSES. The Finance Director is hereby authorized and directed to pay all of the expenses of the issuance of the Notes, including but 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 Note Payment Fund or from the general funds of the City. The amount of the expenses paid from the general funds of the City shall be reimbursed from the 1986 Note Payment Fund after the principal of and interest on the Notes has been paid in full . 22590 Imp14 APPROVAL OF DEPARTMENT OF TREASURY The issuance and sale of the Notes shall be subject to permission (or an exception therefrom) being granted therefor by the Department of Treasury of the State of Michigan The applications made by the Finance Director to the Department of Treasury for a waiver of the requirement for the public sale thereof and a good faith deposit and for waiver of the requirement for credit enhancement is hereby approved and ratified 15. OFFICIAL STATEMENT The forms of official statement and preliminary official statement for the Notes on file with the City Clerk is hereby approved The Finance Director is hereby authorized to execute on behalf of the City the official 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 marketing, offering and sale of the Notes is hereby approved 16. NOTE PURCHASE AGREEMENT The note purchase agreement (the "Note Purchase Agreement") with the Underwriter, providing for sale of the Notes to the Underwriters at rate of interest of 4.6% at price of $30,965,875 on file with the City Clerk is hereby approved and the Mayor and City Clerk are hereby authorized and directed to execute and deliver the same on behalf of the Notes to the Underwriters as provided in the Note Purchase Agreement 11, is hereby approved 17. SALE, ISSUANCE AND DELIVERY OF NOTES The City Finance Director and all other officers and agents of the City are authorized to do all things necessary or convenient to effect the sale, issuance and delivery of the Notes in accordance with the provisions of this resolution and to implement the provisions of any agreements with respect to the issuance of the Notes or the security for the payment of the principal of and interest on the Notes to which the City is a party including the execution and delivery of 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 resolution as they deem appropriate and not to the detriment of the City 18. MULTILATED, LOST, STOLEN OR DESTROYED NOTES In the event any Note is mutilated, lost, stolen or destroyed, the Finance Director may, on behalf of the City, order the Registrar to authenticate and deliver a new Note having a number not then outstanding, of like date, maturity, 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 Registrar In the case of a lost, stolen or destroyed Note, a replacement Note shall not be delivered unless and until the 22591 Finance Director and the Registrar shall have received such proof of ownership and 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 registered 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, the Registrar 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, the Registrar and Paying Agent in connection with the replacement, including the transfer and exchange costs which otherwise would be paid by the City. 19. RESOLUTION IRREVOCABLE Except as provided in Sections 24 and 25 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 , 161 if the Notes are rates 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 formal defect, omission, inconsistency or ambiguity in this resolution, (ii ) add to the covenants and agreements of the City in this resolution or other covenants 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 Registrar, and 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 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 principal amount of the Notes outstanding, provided, however, that no supplemental or amendatory resolution 22592 will be permitted which would (a) extend the stated maturity of or time for paying interest on any Note or reduce the principal amount of or rate of interest payable on any Note without the consent of the owner of such Note, (b) prefer or give a priority to any Note over any other Note, (c) create a claim or lien 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 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 purposes 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 PENDING TAX LEGISLATION The City hereby covenants to use its best efforts, to the extent permitted by law, to comply with the requirements of the Internal Revenue Code of 1954, as currently amended, and the requirements of H R 3838, the Tax Reform Act of 1985 (the "Bill "), to preserve the tax exemption of the interest on the Notes, unless, in the opinion of Note counsel , failure to comply with the requirements of the Bill would not impair the exemption of interest on the Notes from federal income or State of Michigan income taxation. 24 NON-ARBITRAGE COVENANT. Notwithstanding any other provisions of this resolution or other resolutions previously adopted, the City covenants with the purchaser of the Notes, that the City will make no use of the proceeds of the Notes (within the meaning of Sections 1 .103-13, 1 103-14 and 1 .103-15 of the Income Tax Regulations prescribed by the Commissioner of Internal Revenue) which, would cause the Notes to be "arbitrage bonds," as defined in Section 103(c) of the Internal Revenue Code of 1954, as amended, and all rules and regulations relating to such Sections. 25. NOTICES. For purposes of notices to be given under this resolution, the folowing 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 22593 im• The Underwriter Morgan Stanley & Co Incorporated 1251 Avenue of the Americas New York, New York 10020 The Paying Agent State Street Bank and Trust Company 61 Broadway New York, New York 10004 Registrar State Street Bank and Trust Company Corporate Trust Department 225 Franklin Street Boston, Massachusetts 02110 26 PRIOR RESOLUTIONS All resolutions and parts of resolutions insofar as they conflict with the provisions of this Resolution are hereby rescinded. 22594 im Exhibit A ALLOCATION OF JULY 1 LEVY Amount of Amount of Anticipated Amount Amount Anticipated Levy Paid of of Levy Levy Paid From Unit Levy Anticipated From Note Collections Proceeds July 1-11 Livonia $29, 159, 732 $27,248 , 869 $27, 175,041 .67 $43,880 Public Schools School District to Schoolcraft 1, 995, 845 1, 865,057 1, 860,002 . 20 3,005 Community College District Oakland 119, 346 111, 526 111, 223 .43 180 Inter- Mediate School District Clarenceville 1, 952 , 500 1,824 , 548 1, 819,607 . 70 2,935 School District i,n a motion by Councilman Taylor, seconced by Councilwoman t!cCotter, and unanimously adopted, this lS!Gth Special Meeting of the Council of the City of Livonia was duly adjourned at $:00 P.M. , June 23, 1S0C. Ro ert F. Nash, City Clerk