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HomeMy WebLinkAboutRES 98-07RESOLUTION NO. 98-07 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE, A CITY LEASE,A LETTER OF REPRESENTATION TO BOND PURCHASE CONTRACT AND A CONTINUING DISCLOSURE UNDERTAKING;APPROVING THE EXECUTION AND DELIVERY BY CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION OF A GROUND LEASE, A CITY LEASE,A TRUST INDENTURE,AN ESCROW TRUST AGREEMENT,A GUARANTY AGREEMENT AND A BOND PURCHASE CONTRACT;APPROVING AN OFFICIAL STATEMENT;APPROVING THE ISSUANCE OF $9,965,000 AGGREGATE PRINCIPAL AMOUNT OF CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORA- TION MUNICIPAL FACILITIES REVENUE BONDS, SERIES 1998;PROVIDING FOR THE TRANSFER OF CERTAIN MONEYS FOR THE PAYMENT THEREOF AND OF THE CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE BONDS,SERIES 1992 AND MAKING CERTAIN COVE- NANTS AND AGREEMENTS WITH RESPECT THERETO; AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY T O THE CONSUMMATION OF THE TRANSAC- TIONS CONTEMPLATED BY THIS RESOLUTION AND DECLARING AN EMERGENCY WHEREAS, the City of Apache Junction Municipal Property Corporation,a nonprofit corporation incorporated and existing pursuant to the laws of the State of Arizona (the "Corporation"), was formed to transact any or all lawful business for which non- profit corporations may be incorporated under the laws of the State of Arizona, including, without limiting the generality of the fore- going, any civic or charitable purpose such as financing the cost of acquiring, constructing, reconstructing or improving buildings, equipment or other real and personal properties suitable for use by and for leasing to the City of Apache Junction, Arizona (the "City"), or its agencies or instrumentalities; and WHEREAS, the City heretofore determined that it was bene- ficial to its citizens (i) to design, acquire, construct and equip a new police facility for the City,(ii) to improve and develop certain recreation facilities of the City,(iii) to expand the library of the City and (iv) to provide for the payment of the remaining amounts due pursuant to a Lease -Purchase Agreement, dated as of January 1, 1992, by and between the City and PHSG Holdings, Inc.(collectively, with the foregoing purposes, the "Prior Proj- ect"); and WHEREAS, the Corporation assisted the City in financing the Prior Project; and WHEREAS, in order to finance the costs of the Prior Proj- ect,the Corporation issued its $4,640,000 aggregate principal amount of City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1992, dated as of Sep- tember 1, 1992 (the "Series 1992 Bonds"); and WHEREAS, the City has determined that it will be benefi- cial to its citizens (i) to refinance the Series 1992 Bonds (pres- ently outstanding in the aggregate principal amount of $4,120,000) and (ii) to finance the costs of certain road and related improve- ments (such improvements, collectively the "Project"); and WHEREAS, the Corporation desires to assist the City in refinancing the Series 1992 Bonds and in financing the Project; and WHEREAS, in order to refinance the Series 1992 Bonds and to finance the costs of the Project, the Corporation and the City deem it necessary and desirable for the Corporation to issue its $9,965,000 City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1998, to be dated as of March 1, 1998 (the "Bonds"); and WHEREAS, in connection with the issuance of the Bonds, the Corporation shall enter into (i) a Ground Lease, to be dated as of March 1, 1998 (the "Ground Lease"), with the City pursuant to which the City will lease the Real Property described therein (the "Real Property") to the Corporation, (ii) a City Lease, to be dated as of March 1, 1998 (the "City Lease"), pursuant to which (A) the Corporation shall lease the Real Property and the improvements which are part of the Prior Project (the "Improvements") to the City and (B) the City shall (I) lease from the Corporation the Real Property and the Improvements and (II) as agent for the Corpora- tion, shall agree to provide for the Project, (iii) an Escrow Trust Agreement,to be dated as of March 1,1998 (the "Escrow Trust Agreement"), with Norwest Bank Arizona, N.A., as escrow trustee, pursuant to which payment of the Series 1992 Bonds will be provided and (iv) a Guaranty Agreement, to be dated as of March 1, 1998 (the "Guaranty Agreement"), with Ambac Assurance Corporation, with re- spect to provision of a surety bond in lieu of a reserve fund with respect to the Bonds; and WHEREAS, the Corporation has not made and does not intend to make any profit by reason of any business or venture in which it may engage or by reason of the assistance it renders the City in refinancing the Series 1992 Bonds and financing the Project, and no part of the net earnings of the Corporation, if any, shall ever inure to the benefit of any person, firm or corporation except the City; and 2 WHEREAS,the Bonds and any additional obligations on a parity therewith shall be secured. by a Trust Indenture, dated as of March 1,1998 (the "Indenture"), from the Corporation to Norwest Bank Arizona, N.A.,as trustee; and WHEREAS, there have been placed on file with the Clerk of the City and presented at the meeting at which this Resolution was adopted (1) the proposed form of the Indenture,(2) the proposed form of the Ground Lease,(3) the proposed form of the City Lease, (4) the proposed form of the Escrow Trust Agreement, (5) the pro- posed form of the Guaranty Agreement,(6) the proposed form of a Continuing Disclosure Undertaking, to be dated the date of delivery of the Bonds (the "undertaking"), of the City necessary for pur- poses of Securities and Exchange Commission Rule 15c2-12, (7) the form of Bond Purchase Contract, dated the date of adoption hereof (the "Purchase Contract"),by and between the Corporation and Hutchinson, Shockey, Erley & Co. (the "Purchaser") for the purchase of the Bonds, including the Letter of Representations, dated the date of adoption hereof (the "Letter of Representations"), from the City and (8) the Preliminary Official Statement, dated February 3, 1998 (the "Preliminary Official Statement"), relating to the Bonds, which, with certain additions thereto, shall constitute the Offi- cial Statement, dated the date of adoption hereof (the "Official Statement"), relating to the Bonds; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THAT: Section 1.The Mayor and Council of the City hereby find and determine that the refinancing of the Series 1992 Bonds, the financing of the Project and the issuance of the Bonds pursuant to the terms of the Ground Lease, the City Lease, the Escrow Trust Agreement and the Indenture is in furtherance of the purposes of the City and in the public interest. Section 2.The forms, terms and provisions of the Ground Lease, the City Lease, the Undertaking and the Letter of Represen- tations,in the form of such documents (including the exhibits thereto)presented at the meeting at which this Resolution was adopted are hereby approved, with such insertions, omissions and changes as shall be approved by the Mayor of the City, the execu- tion of such documents being conclusive evidence of such approval, and the Mayor and Clerk of the City are hereby authorized and directed,for and on behalf of the City, to sign and attest the Ground Lease, the City Lease, the Undertaking and the Letter of Representations as well as any other documents necessary in connection therewith to provide for the issuance of the Bonds. Section 3.The forms,terms and provisions of the Indenture, the Escrow Trust Agreement, the Guaranty Agreement and the Purchase Contract in the form of such documents (including exhibits thereto) presented at the meeting at which this Resolution 3 was adopted are also hereby approved, with such insertions, omis- sions and changes as shall be approved by the President or Vice President of the Corporation, the execution of such documents (as well as of the Ground Lease and the City Lease) being conclusive evidence of such approval, and the President or Vice President and Secretary of the Corporation are hereby authorized and directed, for and on behalf of the Corporation, to sign and attest the Ground Lease, the City Lease, the Indenture, the Escrow Trust Agreement, the Guaranty Agreement and the Purchase Contract as well as any other documents necessary in connection therewith to provide for the issuance of the Bonds. Section 4.(A)The Official Statement is hereby approved and confirmed, and the use of the Official Statement in connection with the sale of the Bonds is hereby approved and of the Preliminary Official is hereby ratified.The President or Vice President of the Corporation is hereby authorized and directed, for and on behalf of the Corporation, to sign the Official Statement. (B)(i)The City shall comply with and carry out all the provisions of the Undertaking. (ii)This Section shall constitute a contract between the City and certain owners of the Bonds as described in the Undertaking. (iii)In the event of a failure of the City to comply with the provisions of this Section, such owners of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the City to comply with its obligations under this Sec- tion.A default under this Section shall not be deemed an event of default for other purposes of this Resolution or the City Lease, and the sole remedy under this Section in the event of any failure of the City to comply with this Section shall be an action to compel performance. Section 5.The City hereby requests the Corporation to take any and all action necessary in connection with the issuance and sale of the Bonds and covenants that it shall do all things necessary to assist the Corporation therein, including particular- ly, but not by way of limitation, providing the amount necessary, in addition to the proceeds of the sale of the Bonds to be provided for such purpose, to acquire the "Securities" as such term is de- fined in, and as required pursuant to, the Escrow Trust Agreement. Section 6.(A)The City hereby approves the issuance and delivery of the Bonds, as hereinafter described, by the Corpo- ration.The Bonds shall be designated "City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1998"; shall be issued in an aggregate principal amount of $9,965,000; shall be in the denomination of $5,000 of principal 4 amount or any integral multiple thereof; shall be dated March 1, 1998; shall bear interest from such date payable on January 1 and July 1 of each year,commencing July 1,1998;shall be fully registered bonds without coupons as.provided in the Indenture and shall bear interest at the rates per annum and mature on July 1 in the years and principal amounts as follows: Year Principal Interest Amount Rate 1999 $790,000 4.2096 2000 825,000 4.20 2001 860,000 4.20 2002 900,000 4.00 2003 940,000 4.20 2004 980,000 4.25 2005 1,025,000 4.30 2006 1,075,000 5.00 2007 1,125,000 5.00 2008 260,000 4.50 2009 275,000 4.60 2010 290,000 4.50 2011 300,000 4.50 2012 320,000 4.50 (B)The form, terms and provisions of the Bonds and the provisions for the signatures,authentication, payment, regis- tration, transfer,exchange,redemption and number shall be as set forth i n the Indenture and are hereby approved. Section 7.The City hereby requests the Corporation to sell the Bonds to the Purchaser in accordance with the terms of the Purchase Contract and at the price specified therein. Section 8.(A)For the payment of the principal of and premium, if any, and int e re s t on the Bonds, the City shall pay and transfer to the Trustee the rental payments provided for in Article I of the City Lease and the other amounts required to be paid by the City pursuant to the provisions of the City Lease. (B)T o secure the payment of the rental payments provided for in Article I of the City Lease and the other amounts required to be paid by the City pursuant to the provisions of the City Lease, the City hereby pledges for the payment of the rental payments thereunder s a l e s and transaction privilege taxes, shared revenues,license and other fees and fines and forfeitures which the City now collects, which the City may collect in the future or which are allocated o r apportioned to the City by the State of Arizona,any political subdivision thereof or any other govern- mental unit or agency,EXCEPT the share of the City of any taxes which by State of Arizona law, rule or regulation must be expended for other purposes,such as the motor vehicle fuel tax (collec- 5 tively, the "Excise Taxes").The City intends that this pledge shall be a first lien upon such amounts of the Excise Taxes as will be sufficient to make the rental and other payments pursuant there- to each month, and the City shall make such rental payments from such amounts except to the extent that it chooses to make such pay- ments from other funds pursuant to Section 3.02 of the City Lease. The Excise Taxes shall be retained and maintained so that the amount received from such sources plus the other amounts allocated to the City by any other governmental unit, all within and for the next preceding fiscal year,shall be equal to at least two (2) times the total of rental payments payable thereunder in any current fiscal year.If such amounts for any such preceding fiscal year shall not equal two (2) times the rental payment requirements of any current fiscal year or if at any time it appears that the current amounts will not be sufficient to meet the rental payment requirements, the City shall either impose new excise and franchise taxes or shall increase the rates for the Excise Taxes currently imposed in order that (i) the current amounts will be sufficient to meet all current rental payment requirements thereunder and (ii) the current year's amounts will be reasonably calculated to attain the level as required above for the succeeding fiscal year's rental payment requirements pursuant to the City Lease. (C)So long as any of the Series 1997 Bonds remain outstanding and the principal and interest thereon shall be unpaid or unprovided for, the City shall not further encumber the Excise Taxes pledged under Article III of the City Lease on a basis equal to the first lien pledge unless the Excise Taxes collected in the next preceding fiscal year shall have amounted to at least two (2) times the highest combined interest and principal requirements for any succeeding twelve (12) months' period for all the Series 1997 Bonds then outstanding and any parity bonds or other obligations so proposed to be secured by a pledge of the Excise Taxes pursuant to the Indenture. (D)The obligation of the City to make the rental payments provided for in Article I of the City Lease and to make other payments due under the City Lease is limited to payment from the Excise Taxes pledged therefor, and the obligations of the City under the City Lease shall not constitute nor give rise to a gene- ral obligation of the City or any claim against its ad valorem tax- ing powers, or constitute an indebtedness within the meaning of any statutory or constitutional debt limitation applicable to the City. Section 9.(A)In consideration of the purchase and acceptance of the Bonds by the registered owners and holders there- of from time to time, and in consideration of retaining the exemp- tion from federal income taxes of the interest income on the Bonds, the City covenants, and the appropriate officials of the City are hereby directed, to take all action required, or to refrain from taking any action prohibited, by the Internal Revenue Code of 1986, as amended and as supplemented by all applicable Treasury Regula- 6 tions promulgated in connection with any applicable section thereof (hereinafter referred to as, collectively the "Code"), which would adversely affect in any respect such exclusion, including, particu- larly, but not by way of limitation, (i) to cause the Bonds to not be "private activity" bonds within the meaning of the Code (Section 141(a) of the Code),(ii) to cause the Bonds to not be "arbitrage bonds" within the meaning of the Code (Section 148(a) of the Code) or to be valid "reimbursement bonds" for purposes of the Code if any proceeds of the s a l e of the Series 1997 Bonds are being used to reimburse prior expenditures (Section 1.150-2 of the Treasury Regu- lations),(iii) to comply with the provisions of the Code relating to rebate (Section 148 (f)of the Code) with respect to the Bonds, (iv) to cause the Bonds not to be "federally guaranteed" within the meaning of the Code (Section 149(b) of the Code), (v) to make the required information f i l i n g pursuant to the Code (Section 149(e) of the Code)with respect to the Bonds and (vi) to make all required expenditures so that the Bonds shall not be deemed "hedge bonds" within the meaning of the Code (Section 149(g) of the Code). (B)The City hereby designates the Bonds as "quali- fied tax-exempt obligations"within the meaning and pursuant to the provisions of Section 265 (b) of the Code, and the City represents and warrants that the reasonably anticipated amount of qualified tax-exempt obligations (other than "private activity bonds") which will b e issued by or on behalf of the City during the calendar year 1998 sha ll not exceed $10,000,000. (C)The Mayor and Council of the City further authorize the employment of such experts and consultants to make, as necessary,any calculations in respect of rebates to be made to the United States of America in accordance with Section 148(f) of the Code with respect to the Bonds. Section 10.After any of the Bonds are delivered by the Trustee to the Purchaser thereof upon receipt of payment therefor, this Resolution shall be and remain irrepealable until the Bonds and the interest thereon shall have been fully paid, cancelled and discharged. Section 11.If any section, paragraph, clause or provi- sion o f this Resolution shall for any reason be held to be invalid or unenforceable,the invalidity or unenforceability of such sec- tion,paragraph,clause or provision shall not affect any of the remaining provisions o f this Resolution. Section 12.All orders and resolutions or parts thereof, inconsistent herewith,are hereby waived to the extent only of such inconsistency.This waiver shall not be construed as reviving any order o r resolution o r any part thereof. Section 13.The immediate operation of this Resolution is necessary for the refinancing of the Series 1992 Bonds and the 7 financing of the Project on the most attractive terms available to the City and the preservation of the public health and welfare; an emergency is hereby declared to exist; this Resolution shall be in full force and effect from and after its passage and approval by the Mayor and Council of the City of Apache Junction, Arizona, as required by law and this Resolution is hereby exempt from the referendum provisions of the constitution and laws of the State of Arizona. 8 APPROVED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS 17TH DAY OF FEBRUARY, 1998. SIGNED AND ATTESTED THIS 17TH DAY OF FEBRUARY, 1998. ATTEST: Kathleen Connelly, Cle(ek, City of Apache Junction, Arizona APPROVED AS TO FORM: 225-4 Richard Joel Stern, Esq. , City Attorney, City of Apache Junction, Arizona PSS I BC8D/021998 \ a ) i 1 1-1 Douglas foleman, Mayor, City of Apache Junction, Arizona 9