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Home My WebLink About2016-01-18-J03 Golf Course Revenue Refunding CLN_Accept ProposalNO Waukee `}a,P THE KEY TO GOOD LIVING AGENDA ITEM; CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: January 18, 2016 AGENDA ITEM: Consideration of approval of a resolution directing the acceptance of a proposal to purchase $572,339 Golf Course Revenue Refunding Capital Loan Notes, Series 2016 FORMAT: Resolution SYNOPSIS INCLUDING PRO & CON: Acceptance of the attached proposal, is the next step to completing the refunding of the Golf Course Revenue Bonds started in June of 2015. The action was delayed till January to ensure the bonds are refunded with Bank Qualified (BQ) status. Charter Bank's proposal provides an interest rate reduction of .95%. The new loan will have one final balloon refunding in June 2021. FISCAL IMPACT INCLUDING COSTBENEFIT ANALYSIS: COMMISSIONBOARDfCOMMITTEE COMMENT: STAFF REVIEW AND COMMENT: Staff recommends approval of the $572,339 Golf Course Revenue Refunding Capital Loan Note, Series 2016 RECOMMENDATION: Approve the resolution. ATTACHMENTS: I. Proposed Resolution II. Charter Bank Proposal PREPARED BY: Linda Burkhart a �j REVIEWED BY: ✓` RESOLUTION 16- RESOLUTION DIRECTING THE ACCEPTANCE OF A PROPOSAL TO PURCHASE $572,339 GOLF COURSE REVENUE REFUNDING CAPITAL LOAN NOTES, SERIES 2016 WHEREAS, the City of Waukee, sometimes hereinafter referred to as the City, is a municipal corporation duly incorporated, organized and existing under and by virtue of the Constitution and laws of the State of Iowa; and WHEREAS, it is deemed necessary that the City should enter into a Loan Agreement and borrow the amount of $572,339 as authorized by Sections 384.24A and 384.93, Code of Iowa as amended; and WHEREAS, a proposal has been received from Charter Bank of Waukee, Iowa; and WHEREAS, it is the intention of this City Council to enter into a Loan Agreement in accordance with said proposal dated January 8, 2016. NOW THEREFORE, BE IT RESOLVED, BY THE CITY COUNCIL OF THE CITY OF WAUKEE, STATE OF IOWA: Section 1. That this City Council does hereby accept the attached proposal of Charter Bank of Waukee, Iowa, and takes additional action to permit the entering into of a Loan Agreement. Section 2. The Mayor and City Clerk are authorized and directed to proceed on behalf of the City to enter into such Loan Agreement, to negotiate the final terms of a Loan Agreement to take all action necessary to permit the entering into of a Loan Agreement on a basis favorable to the City and acceptable to the Purchaser, and to proceed to meet the conditions of this accepted proposal. PASSED AND APPROVED this 18`h day of January, 2016. Mayor ATTEST: City Clerk (Attach Copy of Terms of Proposal) ROLL CALL VOTE AYE NAY ABSENT ABSTAIN Shane Blanchard Brian Harrison Shelly Hughes Larry R. Lyon Rick Peterson CHARTER i January 8, 2016 City of Waukee Mr. Tim Moerman, City Manager 230 W Hickman Road Waukee, IA 50263 Dear Mr. Moerman: Thank you for your continued banking relationship with Charter Bank. As you know, we modified the GO and Revenue notes on the golf course in 2015 to extend both notes for 2 years and reduce the interest rates by 0.25%. At the time of modification, the anticipation for both notes were to revisit the continued tax exempt status in 2016 based on the amount of bank qualified debt issued by the City. Based on our understanding that we can extend the loans out for a longer period of time and keep the tar exempt status, we agree to reduce the interest rates down further to the agreed upon amount from our meeting in 2015. The general terms and conditions are as follows: TERM NOTE # 1: Revenue Bond Original Loan Amount: $925,000.00 Current Principal Balance: $572,339.13 Accrued Interest thru 2/19/16: $4,807.65 Maturity Date: June 1, 2017 Current Payment Schedule: Semi-annual installments of $36,937.51 due on June 1" and December I" beginning 12/1/2015 with final payment of all remaining principal and interest due on 6/1/2017. Payments based upon a 10 year amortization with a 2 year balloon. New Interest Rate: 3.50% tax-exempt rate Collateral: Rights against the revenue profits generated by Sugar Creek Golf Course operations and cash reserve account held at Charter Bank. Prepayment Penalty: None Extended Maturity Date: December 1.2020 Extended Payment Schedule: Semi-annual installments of $35,399.28 due on June I" and December I" beginning 6/1/2016 with final payment of all remaining principal and interest due on 12/I/2020. Payments based upon a remaining 9.5 year amortization with a 5 year balloon. TERM NOTE # 2: General Obligation Note Original Loan Amount: Current Principal Balance: Accrued Interest thru 2/19/16: Maturity Date: Current Payment Schedule: $700,000.00 S279,989.64 $1,959.93 June 1, 2017 Semi-annual installments of $33,925.18 due on June 1" and December 1"beginning 12/1/2015 with final payment of all remaining principal and interest due on 6/1 /2017. Payments based upon a 5 year amortization with a 2 year balloon. 5526 N.W. 86TH STREET 150 S.E. GATEWAY DRIvE 455 - 6TH STREET, P.O. Box 550 JOHNSTON, IOWA 50131 GRIMES, 10WA 50111 W.AUKEE, IOWA 50263 (515) 331.2265 (515) 986.2000 (515) 987-1000 FAQ.331,3311 FAX:986.5963 FAX:987-1909 New Interest Rate: Collateral: Prepayment Penalty: Extended Maturity Date: Extended Payment Schedule: Conditions of the Commitment: 2.75% tax-exempt rate None None June 1, 2020 Semi-annual installments of S33,089.55 due on June 1 r' and December 1" beginning 6/1/2016 with final payment of all remaining principal and interest due on 6110-020. Payments based upon a remaining 4.5 year amortization. The Bank shall have received such other instruments, documents, and opinions as Bank shall reasonably require to evidence and secure the loan and to comply with the provisions hereof and the requirements of regulatory authorities to which the bank is subject. Included in other documents: 1. Copy of the Waukee City Council Meeting minutes showing the approval and acceptance of said financing terms. 2. Corporate resolution designating who has the authority to sign the promissory notes and/or note modifications to bind the City of Waukee. 3. In order to qualify for the tax exempt note, Charter Bank requires an opinion letter from the City Attorney stating said loan will qualify as a tax-exempt loan asset for the bank in accordance with the internal revenue service code. 4. Subject to the receipt and review of copies of the General Obligation Note and Revenue Note by Charter Bank legal counsel prior to execution. The intent of this letter is to communicate the general terms and conditions of the refinancing of existing notes to the City of Waukee. Additional loan covenants, agreements, and conditions considered to be standard for a loan to a municipality will be required as part of the final loan documentation and closing. This summarizes our financing proposal for you. Please let me know of any questions or comments that you might have regarding this proposal. Once the proposal is acceptable to you, we ask that you indicate by signing below and retuning the original copy of this letter to us. Sincerely, Greg Grote Vice President Accepted on this day of. 2016 Em am )ate: 0110812016 Charter Bank Page 1 'unding Date: 02/19/2016 Compounding: U.S. Rule Principal: 572,339.13 'first Payment Date: 06/O1/2016 Period: 30/360 Initial Interest Rate: 0.000% Pmt Schedule: Semi -Annually Interest Rate: 3.500% Pmt Amount: 35,399.28 'ayment Payment Payment Interest Principal Outstanding Equity dumber Date Amount Amount Reduction Balance Built 1 06/01/2016 $35,399.28 5,620.05 29,779.23 542,559.90 $29,779.23 2 12/O1/2016 $35,39928 9,494.80 25,904.48 516,655.42 $55,683.71 3 06/O1/2017 $35,39928 9,041.47 26,357.81 490,297.61 $82,041.52 4 12/O1/2017 $35,399.28 8,58021 26,819.07 463,478.54 $108,860.59 5 06/01/2018 $35,399.28 8,110.87 27,288.41 436,190.13 $136,149.00 6 12/01/2018 $35,399.28 7,633.33 27,765.95 408,424.18 $163,914.95 7 06/01/2019 $35,399.28 7,147.42 28,251.86 380,172.32 $192,166.81 8 12/01/2019 $35,399.28 6,653.02 28,746.26 351,426.06 $220,913.07 9 06/O1/2020 $35,399.28 6,149.96 29,249.32 322,176.74 $250,162.39 10 12/01/2020 $327,814.83 5,638.09 322,176.74 .00 $572,339.13 2020 Totals: 646,408.35 74,069.22 572,339.13 Grand Totals: 646,408.35 74,069.22 572,339.13 Ws amortization schedule is provided to you for your convenience The amortization may include estimates based upon information provided by you. Actual terms of ,edit offered by us may varyfrom this amortization schedule 771e outstanding balance shown above will varyfrom your actual oustanding balance owed to the Bank aaause of the timing of payments. Page 1 of 1 CHARTER BANK 5526 NW 86TH ST JOHNSTON, IOWA 50131 CITY OF WAUKEE 230 W HICKMAN RD WAUKEE IA 50263-5004 Loan Payoff Statement Loan Payoff for: Loan Number: 4000500862 CITY OF WAUKEE Date Quoted: Jan 08, 2016 230 W HICKMAN RD Payoff Good To: Feb 19,2016 WAUKEE IA 50263-5004 Method: 6/2 Collateral:REFI GOLF COURSE REVENUE NOTE #-441816 Principal: Interest To Feb 19, 2016: Net Amount Due: $572,339.13 $4,807.65 $977,146.78 Additional Information One Day's Interest: $66.77 https://mwranay.fmwrde.com/CLC—CLCl 151/CLC 1151.aspx?&Action=PAYOFFSTATE... 1 /8/2016