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HomeMy WebLinkAbout2005-02-14-Resolutions 05-28_Bonds - Golf Course Revenue Note - IssuanceRESOLUTION NO.05-28 Resolution authorizing and approving a Loan Agreement and authorizing the sale and issuance and securing the payment of a $925,000 Golf Course Revenue Note WHEREAS,pursuant to Section 384.24A of the Code of Iowa,the City has heretofore proposed to contract indebtedness and enter into a loan agreement (the "Loan Agreement")to provide funds to pay a portion of the cost of acquiring the privately- owned Sugar Creek Golf Course (the "Golf Course")to be operated as a City enterprise, and has published notice of such proposal and has held a hearing thereon;and WHEREAS,it is necessary at this time to authorize and approve the Loan Agreement and to make provision for the issuance of a Golf Course Revenue Note in the principal amount of $925,000 (the "Note")in evidence of the obligation of the City under the Loan Agreement; NOW,THEREFORE,Be It Resolved by the City Council of the City of Waukee, Iowa,as follows: Section 1.It is hereby determined that the City shall enter into the Loan Agreement with Charter Bauk and Waukee State Bank as lender (the "Lender")in substantially the form attached hereto providing for a loan to the City in the amount of $925,000,for the purpose or purposes set forth in the preamble hereof. The Mayor and City Clerk are authorized and directed to sign the Loan Agreement on behalf of the City,and the Loan Agreement is hereby approved. Section 2.The Note is hereby authorized to be issued in the principal amount of $925,000,and shall be dated as of the date of its delivery to the Lender and shall be payable as to both principal and interest in the manner hereinafter specified. The City Clerk is hereby designated as the Registrar and Paying Agent for the Note and may be hereinafter referred to as the "Registrar"or the "Paying Agent". Principal of the Note shall bear interest at the rate of 4.45%per armum. Thereafter,both principal of and interest on the Note shall be payable in equal semiarmual instalhnents in the amount of $35,162.51 each,due on the first day of June and December each year,commencing December 1,2005,and continuing through and including December 1,2009,with one fmal instalhnent of all remaining principal and interest due thereon at maturity on June 1,2010.All payments shall be applied first to the payment of interest due and next to the reduction of principal.Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. Payment of both principal of and interest on the Note shall be made to the registered owner appearing on the registration books of the City at the close of business on the fifteenth day of the month next preceding the payment date and shall be paid by check or draft mailed to the registered owner at the address shown on such registration books;provided,however,that the final installment of principal and interest shall be payable only upon presentation and surrender of the Note to the Paying Agent. The City reserves the right to prepay principal of the Note in whole or in part at any time prior to and in any order of maturity on tenus of par and accrued interest.All principal so prepaid shall cease to bear interest on the prepayment date. The Note shall be executed on behalf of the City with the official manual or facsimile signature of the Mayor and attested with the official manual or facsimile signature of the City Clerk and shall have the City's seal impressed or printed thereon, and shall be a fully registered Note without interest coupons.The issuance of the Note shall be recorded in the office of the City Treasurer,and the certificate on the back of the Note shall be executed with the official manual or facsimile signature of the City Treasurer.In case any officer whose signature or the facsimile of whose signature appears on the Note shall cease to be such officer before the delivery of the Note,such signature or such facsimile signature shall nevertheless be valid and sufficient for all purposes,the same as if such officer had remained in office until delivery. The Note and the interest thereon,together with any additional obligations as may be hereafter issued and outstanding from time to time ranking on a parity therewith under the conditions set forth herein (which additional obligations are hereinafter referred to as "Parity Obligations"),will be payable solely and only from the future Net Revenues (hereinafter defined)of the Golf Course,which are hereby pledged to the payment of the Note.The Note shall be a valid claim of the owners thereof only against the Net Revenues.Neither the Note nor the Loan Agreement shall be a general obligation of the City,nor payable in any manner by taxation,and under no circumstances shall the City be in any manner liable by reason of the failure of the Net Revenues to be sufficient for the payment in whole or in part of the Note and the interest thereon. The Note shall be fully registered as to principal and interest in the name of the owner on the registration books of the City kept by the Registrar,and after such registration,payment of the principal and interest thereof shall be made only to the registered owner,its legal representatives or assigns.The Note shall be transferable only upon the registration books of the City upon presentation to the Registrar,together with either a written instrument of transfer satisfactory to the Registrar or the assignment form thereon completed and dnly executed by the registered owner or the duly authorized attorney for such registered owner. The record and identity of any owners of the Note shall be kept confidential as provided by Section 22.7 of the Code ofIowa. Section 3.The Note shall be in substantially the following form: (Form of Note) UNITED STATES OF AMERICA STATE OF IOWA COUNTY OF DALLAS CITY OF WAUKEE GOLF COURSE REVENUE NOTE No.1 $925,000 RATE MATURITY DATE NOTE DATE 4.45%June 1,2010 (Closing Date) The City of Waukee (the "City"),in the County of Dallas,State ofIowa,for value received,promises to pay in the manner hereinafter provided to Charter Bank or registered assigns,the principal sum of NINE HUNDRED TWENTY-FNE THOUSAND DOLLARS,together with interest on the outstanding principal hereof, from the date of this Note,or from the most recent payment date on which interest has been paid,except as the provisions hereinafter set forth with respect to prepayment prior to maturity may be or become applicable hereto. Principal of tins Note bears interest at tile rate of 4.45%per annum.Both principal of and interest on this Note are payable in equal semiannual installments in the amount of $35,162.51 each,due on the first day of June and December each year, commencing December 1,2005,and continuing through and including December 1, 2009,with one final installment of all remaining principal and interest due thereon at maturity on June 1,2010.All payments will be applied first to the payment of interest due and next to the reduction of principal.Interest will be calculated on the basis of a 360-day year comprised of twelve 30-day months. Both principal of and interest on this Note are payable to the registered owner appearing on the registration books of the City maintained by the City Clerk (hereinafter referred to as the "Registrar"or the "Paying Agent")at the close of business on the fifteenth day of the month next preceding the payment date in lawful money of the United States of America by check or draft mailed to the registered owner at the address shown on such registration books;provided,however,that the final installment of principal and interest shall be payable only upon presentation and surrender of this Note to the Paying Agent. The City reserves the right to prepay principal of this Note in whole or in part at any time prior to and in inverse order of maturity on terms of par and accrued interest. All principal so prepaid shall cease to bear interest on the prepayment date. This Note is issued by the City to evidence its obligation under a certain Loan Agreement,dated the date hereof (the "Loan Agreement"),entered into by the City for the purpose of paying a portion of the cost of acquiring a golf course (the "Golf Course") to be operated as a City enterprise. This Note is issued pursuant to and in strict compliance with the provisions of Chapter 384 of the Code of Iowa,2005,and all other laws amendatory thereof and supplemental thereto,and in conformity with a resolution of the City Council authorizing and approving the Loan Agreement and providing for the issuance and securing the payment of this Note (the "Resolution"),and reference is hereby made to the Resolution and the Loan Agreement for a more complete statement as to the source of payment of this Note and the rights of the owners of this Note.1 TIns Note is not a general obligation of the City but,together with any additional obligations as may be hereafter issued and outstanding from time to time ranking on a parity therewith,is payable solely and only out of the future Net Revenues of the Golf Course,which have been pledged for such purpose. This Note is fully negotiable but shall be fully registered as to both principal and interest in the name of the owner on the books of the City in the office of the Registrar, after which no transfer shall be valid unless made on said books and then only upon presentation of tins Note to the Registrar,together with either a written instrument of transfer satisfactory to the Registrar or the assignment form hereon completed and duly executed by the registered owner or the duly authorized attorney for such registered owner. The City,the Registrar and the Paying Agent may deem and treat the registered owner hereof as the absolute owner for the purpose of receiving payment of or on account of principal hereof,premium,if any,and interest due hereon and for all other purposes,and the City,the Registrar and the Paying Agent shall not be affected by any notice to the contrary. And It Is Hereby Certified,Recited and Declared that all acts,conditions and things required to exist,happen and be performed precedent to and in the issuance of this 1 Note have existed,have happened and have been performed in due time,form and manner,as required by law,and that the issuance of this Note does not exceed or violate any constitutional or statutory limitation or provision. IN TESTIMONY WHEREOF,the City of Waukee,Iowa,by its City Council,has caused this Note to be sealed with its official seal,to be executed by its Mayor and attested by its City Clerk,all on (Closing Date).I CITY OF WAUKEE,IOWA By (DO NOT SIGN) Mayor Attest: (DO NOT SIGN) City Clerk (Seal) STATE OF IOWA CITY OF WAUKEE CERTIFICATE COUNTY OF DALLAS SS:CITY TREASURER'S The original issuance of this Note was duly and properly recorded in my office on (Closing Date).1 (DO NOT SIGN) City Treasurer ABBREVIATIONS The following abbreviations,when used in this Note,shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM TENENT TEN -as tenants in common -as tenants by the entireties as joint tenants with right of survivorship and not as tenants in common UTMA ---:-:----:0--------- As Custodian for (Minor) under Uniform Transfers to Minors Act (State) Additional abbreviations may also be used though not in the list above.I ASSIGNMENT For valuable consideration,receipt of which IS hereby acknowledged,the undersigned assigns this Note to (Please print or type name and address of Assignee) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE and does hereby irrevocably appoint ,Attorney,to transfer this Note on the books kept for registration thereof with full power of substitution. Dated: Signature guaranteed: NOTICE:The signature to this Assignment must correspond with the name of the registered owner as it appears on this Note in every particular,without alteration or enlargement or any change whatever. Section 4.The Note shall be executed as herein provided as soon after the adoption of this resolution as may be possible and thereupon it shall be delivered to the Registrar for registration and delivery to the Lender,upon receipt of the loan proceeds (the "Loan Proceeds"),and all action heretofore taken in connection with the Loan Agreement is hereby ratified and confirmed in all respects. I Section 5.So long as the Note or any Parity Obligations are outstanding,the City shall maintain the Golf Course in good condition,and the Golf Course shall be operated in an efficient manner and at a reasonable cost as a revenue producing undertaking.The City shall establish,impose,adjust and provide for the collection of rates to be charged to customers of the Golf Course to produce gross revenues (the "Gross Revenues")at least sufficient to pay the expenses of operation and maintenance of the Golf Course (the "Operating Expenses"),which shall include salaries,wages,cost of maintenance and operation,materials,supplies,insurance and all other items normally included under recognized accounting practices (but does not include allowances for depreciation in the valuation of physical property)and to leave a balance of Net Revenues at least sufficient to pay the principal of and interest on the Note and any Parity Obligations outstanding from time to time,as the same become due,except that the City shall not be required to increase rates sufficient to pay the final installment of principal of and interest on the Note due on June 1,2010,and to maintain a reasonable reserve for the payment of such principal and interest,as hereinafter provided. Section 6.From and after the issuance of the Note,the Gross Revenues ofthe Golf Course shall be set aside into a separate and special fund which is hereby established,to be known and hereinafter referred to as the "Golf Course Revenue Fund". The Golf Course Revenue Fund shall be used in maintaining and operating the Golf Course,and after payment of the Operating Expenses shall,to the extent hereinafter provided,be used to pay the principal of and interest on the Note and any Parity Obligations,and to create and maintain the funds hereinafter established. I Section 7.There shall be and there is hereby created,and there shall be maintained,an account to be known as the "Golf Course Revenue Sinking Fund"(herein referred to as the "Sinking Fund"),into which there shall be set aside from the future Net Revenues of the Golf Course such portion thereof as will be sufficient to pay the interest upon and principal of the Note as the same become due,and it is hereby determined that the minimum amount to be so set aside into the Sinlcing Fund from the Net Revenues during each month of each year shall be not less than as follows: Commencing on June 1,2005,and continuing thereafter,a sum equal to one-sixth (1/6)of the principal and interest installment payment amount due on the next succeeding payment date; provided,however,that no further payments need to be made into the Sinking Fund when and so long as the amount therein is sufficient to retire the Note and any Parity Obligations then outstanding which are payable from the Sinking Fund and to pay all ] interest to become due thereon prior to such retirement,or if provision for such payment has been made. Whenever Parity Obligations are issued,provisions shall be made for additional payments to be made into the Sinking Fund for the purpose of paying the interest on and principal of such Parity Obligations. Such payments into the Sinking Fund shall be made in equal monthly installments on the first day of each month,except that when the first day of any month shall be a Sunday or legal holiday,then such payments sball be made on the next succeeding secular day.The Sinking Fund and that portion of the Net Revenues contained therein shall be used solely and only and are hereby pledged for the purpose of paying the interest on and the principal of the Note and any Parity Obligations. If at any time there be a failure to pay into the Sinking Fund the full amount above stipulated,then an amount equivalent to the deficiency shall be paid into the Sinking Fund from the Net Revenues of the Golf Course as soon as available,and the same shall be in addition to the amount otherwise required to be so set apart and paid into the Sinking Fund. Section 8.There is hereby created a special fund to be known and designated as the Principal and Interest Reserve Fund (hereinafter referred to as the "Reserve Fund"),into which there shall be set apart and paid each year from the balance of the Net Revenues remaining after first making the required payments into the Sinking Fund,the sum of $1,000 on the first day of each month of each calendar year,corrunencing July 1, 2005,until the sum of $50,000 has been accumulated in the Reserve Fund (the "Required Reserve Fund Balance"),and whenever the sum on deposit in the Reserve Fund has been reduced to less than Required Reserve Fund Balance,by the expenditure of all or a portion of the said funds for any of the purposes specified herein,the sum of $1,000 shall again be paid into the Reserve Fund on the first day of each month in each year until the sum on deposit in the Reserve Fund has been restored to the Required Reserve Fund Balance.The money on deposit in the Reserve Fund shall be transferred and credited to the Sinking Fund whenever necessary to prevent or remedy a deficiency in the Sinking Fund. Any balance of the Net Revenues remaining after making the aforesaid payments into the Sinking Fund and the Reserve Fund,and after the Reserve Fund contains the Required Reserve Fund Balance,shall be maintained in the Golf Course Revenue Fund and may be used for any purpose consistent with state law. Section 9.All money held in any fund or account created or to be maintained under the terms of this resolution shall be deposited in lawful depositories of the City or invested in accordance with Chapters 12B and 12C of the Code of Iowa and continuously held and secured as provided by the laws of the State of Iowa relating to the depositing, securing,holding and investing of public funds.All interest received by the City as a result of investments under this section shall be considered to constitute Gross Revenues of the Golf Course and shall be deposited in or transferred to the Golf Course Revenue Fund and used solely and only for the purposes specified herein for such fund ISection10.The City hereby covenants and agrees with the owner or owners of the Note and any Parity Obligations which from time to time may be outstanding,that it will faithfully and punctually perform all duties with reference to.the Golf Course required and provided by the Constitution and laws of the State of Iowa,that it will segregate the Gross Revenues of the Golf Course and make application thereof in accordance with the provisions of this resolution and that it will not sell,lease or in any manner dispose of the Golf Course or any part thereof,including any and all extensions and additions that may be made thereto,until the Note and any Parity Obligations have been paid in full,both principal and interest,or unless and until provisions have been made for the payment of the Note and any Parity Obligations and interest thereon in full; provided,however,upon receiving written approval from the holder or holders of the Note,the City may dispose of any property which in the judgment of the Council,or such duly constituted body as may then be charged with the operation of the Golf Course,is no longer useful or profitable in the operation of the Golf Course nor essential to the continued operation thereof and when the sale thereof will not operate to reduce the revenues to be derived from the operation of the Golf Course. Section 11.Upon a breach or default of a term of the Note or Parity Obligations and this resolution,a proceeding may be brought in law or in equity by suit, action or mandamus to enforce and compel performance of the duties required under the terms of this resolution and Division V of Chapter 384 of the Code ofIowa or an action may be brought to obtain the appointment of a receiver to take possession of and operate the Golf Course and to perform the duties required by this resolution and Division V of Chapter 384 of the Code ofIowa. J Section 12.Neither the Note nor any Parity Obligations shall be entitled to priority or preference one over the other in the application of the Net Revenues of the Golf Course,regardless of the time or times of the issuance of the Note or any Parity Obligations,it being the intention that there shall be no priority between the Note and any Parity Obligations,regardless of the fact that they may have been actually issued and delivered at different times.The City hereby reserves the right and privilege of issuing Parity Obligations from time to time payable from the Net Revenues of the Golf Course and ranking on a parity with the Note,subject to the approval of the Lender. Section 13.The City agrees that so long as the Note or any Parity Obligations remain outstanding,it will maintain insurance for the benefit of the owners of the Note and any Parity Obligations on the insurable portions of the Golf Course of a kind and in an amount which usually would be carried by private companies or municipalities engaged in a similar type of business.The City will keep proper books of record and account,separate from all other records and accounts,showing the complete and correct entries of all transactions relating to the Golf Course,and the owners of the Note and any Parity Obligations shall have the right at all reasonable times to inspect the Golf Course and all records,accounts and data of the City relating thereto.1 Section 14.The provisions of this resolution shall constitute a contract between the City and the owners of the Note,and after the issuance of the Note,no change,variation or alteration of any kind of the provisions of this resolution shall be made which will adversely affect any owners of the Note until the Note and the interest thereon shall have been paid in fulL Section 15.It is the intention of the City that interest on the Note be and remain excluded from gross income for federal income tax purposes pursuant to the appropriate provisions of the Internal Revenue Code of 1986,as amended,and the Treasury Regulations in effect with respect thereto (all of the foregoing herein referred to as the "Internal Revenue Code").In furtherance thereof,the City covenants to comply with the provisions of the Internal Revenue Code as they may from time to time be in effect or amended and further covenants to comply with the applicable future laws, regulations,published rulings and court decisions as may be necessary to insure that the interest on the Note will remain excluded from gross income for federal income tax purposes.Any and all of the officers of the City are hereby authorized and directed to take any and all actions as may be necessary to comply with the covenants herein contained. The City hereby designates the Note as a "Qualified Tax Exempt Obligation"as that term is used in Section 265(b)(3)(B)of the Internal Revenue Code. Section 16.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 remaining provisions of this resolution. Section 17.All resolutions and orders or parts thereof in conflict with the provisions of this resolution are,to the extent of such conflict,hereby repealed. Section 18.This resolution shall be in full force and effect innnediately upon its adoption and approval,as provided by law. Passed and approved February 14,2005. Attest: ROLL CALL VOTE AYE NAY ABSENT Nicholas C.Gruber X r IDonaldL.Bailey,Jr.X Bill Peard X Jeff Mertz X Darlene Stanton X I