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HomeMy WebLinkAboutCity Council Resolutions (R-05-2550)-06/07/2005 RESOLUTION NO. R-05-2550 A RESOLUTION by the City Council of the City of Colleyville, Texas, relating to the "Colleyville Economic Development Corporation Refunding and Improvement Sales Tax Subordinate Lien Revenue Bonds, Series 2005"; approving (i) the resolution of the Board of Directors of the Colleyville Economic Development Corporation authorizing the issuance of such Bonds and (ii) the execution, on behalf of the City, of the Financing/Use Agreement relating to such financing by the Colleyville Economic Development Corporation; resolving other matters incident and related to the issuance of such Bonds; and providing an effective date. WHEREAS, Colleyville Economic Development Corporation (the "Issuer") has been duly created and organized pursuant to the provisions of Section 4B of the Development Corporation Act of 1979, Article 5190.6, Vernon's Texas Civil Statutes, as amended (the "Act"); and WHEREAS, pursuant to the Act, the Issuer is empowered to issue bonds for the purpose of defraying the cost of any "project" defined as such by the Act; and WHEREAS, the Board of Directors of the Issuer has found and determined that the parks and park facilities, to wit: (i) improvements to McPherson Park, (ii) the acquisition of land and improvements thereto for additional parks, and (iii) constructing, acquiring, improving and/or equipping a senior citizens activity center, including land therefor (collectively, the "Projects"), constitute projects within the meaning of the Act and the costs of constructing and equipping such Projects should be financed from the proceeds of sale of "Colleyville Economic Development Corporation Refunding and Improvement Sales Tax Subordinate Lien Revenue Bonds, Series 2005" (the "Bonds"); and WHEREAS, the Issuer is also empowered by the Act to issue bonds for the purpose of refunding outstanding bonds issued on account of a "project" defined as such by the Act; and WHEREAS, the Colleyville Economic Development Corporation (the "Corporation"), a non-profit corporation duly organized and existing under the laws of the State of Texas, including Vernon's Ann.Civ.St., Section 4B of Article 5190.6, as amended, has heretofore issued, sold, and delivered, and there are currently outstanding, obligations totaling in original principal amount $7,072,722.45 (collectively, the "Refunded Obligations") more particularly described as follows: (1) Colleyville Economic Development Corporation Sales Tax Revenue Bonds, Series 1997, dated January 1, 1997, scheduled to mature on February 15 in each of the years 2007 through 2022, and aggregating in principal amount $5,145,000; and (2) Colleyville Economic Development Corporation Sales Tax Revenue Bonds, Series 2000, dated March 15, 2000, scheduled to mature on February 15 in each of the years 2010 through 2015, 2020 and 2024, and aggregating in original principal amount $1,927,722.45 and Maturity Amount of $1,815,000; 45594088.1/10503907 AND WHEREAS, Section 25(f) of the Act requires the City Council of the City approve the resolution of the Issuer providing for the issuance of the Bonds no more than sixty (60) days prior to the delivery of the Bonds; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITYOF COLLEYVILLE, TEXAS: Section 1. The Resolution authorizing the issuance of "Colleyville Economic Development Corporation Refunding and Improvement Sales Tax Subordinate Lien Revenue Bonds, Series 2005", adopted by the Issuer (the "Issuer Resolution") on June 7, 2005, and submitted to the City Council this day, is hereby approved in all respects. The Bonds are being issued to finance (i) the costs of the Projects (hereinafter referred to as the "New Money Portion of the Bonds"), which are located within the City of Colleyville; and (ii) the refunding of the Refunded Obligations (identified in the preamble hereof and hereinafter referred to as the "Refunding Portion of the Bonds") and the City agrees that upon receipt of the proceeds of sale of the New Money Portion of the Bonds from the Issuer, the City will construct the Projects and thereafter be responsible for the upkeep, maintenance and use of the Projects. The proceeds of sale of the Refunding Portion of the Bonds will be deposited into an escrow fund and disbursed to pay the Refunded Obligations in accordance with a Special Escrow Agreement by and between the Corporation and The Bank of New York Trust Company, N.A. Section 2. The approvals herein given are in accordance with Section 25(f) of the Act and the Bylaws of the Issuer, and the Bonds shall never be construed as an indebtedness or pledge of the City, or the State of Texas (the "State"), within the meaning of any constitutional or statutory provision, and the owner of the Bonds shall never be paid in whole or in part out of any funds raised or to be raised by taxation (other than sales tax proceeds as authorized pursuant to Section 4B of the Act) or any other revenues of the Issuer, the City, or the State, except those revenues assigned and pledged by the Issuer Resolution. Section 3. The City hereby agrees to promptly collect and remit to the Issuer the Gross Sales Tax Revenues (as defined in the Issuer Resolution) in accordance with the terms of the Issuer Resolution and the Act to provide for the prompt payment of the Bonds, and to assist and cooperate with the Issuer in the enforcement and collection of sales and use taxes imposed on behalf of the Issuer. Section 4. The Financing/Use Agreement by and between the City and the Issuer in relation to the Projects, attached hereto as Exhibit A and incorporated by reference as a part of this resolution for all purposes, with respect to the obligations of the City and Issuer during the time the Bonds are outstanding, is hereby approved as to form and substance, and the Mayor and the City Secretary are hereby authorized to execute and deliver such agreement for and on behalf of the City and as the act and deed of this City Council. Furthermore, the Mayor and the City Secretary and the other officers of the City are hereby authorized, jointly and severally, to execute and deliver such endorsements, instruments, certificates, documents, or papers necessary and advisable to carry out the intent and purposes of this Resolution. Section 5. In regard to the policies and procedures that may apply to the Board of Directors of the Issuer with respect to the passage and adoption of resolutions, the City ratifies, confirms and approves the Board's authority to waive any requirement that resolutions be read in their entirety before adoption by the Board, and the procedure followed by the Board of Directors in the adoption of the Issuer Resolution in reading the caption thereof prior to its passage is hereby approved, ratified and confirmed in all respects as being in conformity with the policies and procedures approved by this Council. 45594088.1/10503907 2 Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. Section 7. This Resolution shall be in force and effect from and after its passage on the date shown below. [remainder of page left blank intentionally] 45594088.1/10503907 3 PASSED AND ADOPTED, this June 7, 2005. ATTEST: (City Seal) 45594088.1/10503907 CITY OF COLLEYVILLE, TEXAS ~~ Mayor 4 FINANCING/USE AGREEMENT This Financing/Use Agreement (this "Agreement') is made to be effective as of the ih day of June, 2005, by and between the City of Colleyville, Texas, a duly incorporated and existing municipal corporation and political subdivision of the State of Texas (the "City") and the Colleyville Economic Development Corporation, a non-profit industrial development corporation organized and existing under the laws of the State of Texas, including Vernon's Ann. Civ. St., Section 4B of Article 5190.6, (the "Corporation") RECITALS WHEREAS, the Corporation on behalf of the City is to finance parks and park facilities, to wit: (i) improvements to McPherson Park, (ii) the acquisition of land and improvements thereto for additional parks, and (iii) constructing, acquiring, improving and/or equipping a senior citizens activity center, including land therefor (collectively, the "Projects"); and WHEREAS, such financing contemplates the issuance and sale of the Corporation's tax exempt bonds in the principal amount of $2,000,000, and the proceeds of sale are to be used by the City to design and construct the Projects; and WHEREAS, the City will have full responsibility for the design and construction of the Projects and the Corporation shall have no duties or responsibilities with respect to the Projects other than to provide for the financing of its costs; AGREEMENT 1. Financinq of Proiect: For and in consideration of the City's covenants and agreements herein contained and subject to the terms contained herein, the Corporation hereby agrees to issue a series of obligations to be known as "Colleyville Economic Development Corporation Refunding and Improvement Sales Tax Subordinate Lien Revenue Bonds, Series 2005", hereinafter called the "Bonds", and deposit a portion of the proceeds of sale of the Bonds (less amounts to pay costs of issuance) to the credit of a construction fund or account designated by the City, and the City hereby agrees and covenants that the proceeds of sale deposited to the credit of such construction account shall be used solely to pay the costs of the Projects. 2. Use of Proiects. Until all the Bonds have been fully paid, discharged and retired, the upkeep and maintenance of the Projects will be the responsibility of the City and the Corporation shall have no responsibility with respect to the operation, upkeep and maintenance of the Projects. 3. Recoqnition of Tax Exempt Financinq. The City hereby acknowledges and recognizes that the Bonds are being issued as "state or local bonds" under and pursuant to section 103(a) of the Internal Revenue Code of 1986, as amended, and the City hereby covenants and agrees with respect to the use of proceeds of sale of the Bonds and the use of the Projects as follows: (a) meanings: Definitions. When used in this Section, the following terms have the following 45615300.1 EXHIBIT A "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Reg u lations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1 (b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148- 5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Pavments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or 45615300.1 2 EXHffiIT A indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Hioher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federallv Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Payment of Rebatable Arbitraoe. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. 45615300.1 3 EXHIBIT A (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the use of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall remit to the Corporation for payment to the United States the amount described in paragraph (g)(2) above and the amount described in paragraph (g)(4) below, at the times, in the manner and accompanied by such forms or other information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraph (g)(2), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including the amount remitted to the Corporation for payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Reg u lations. (h) Bonds Not Hedqe Bonds. (1) At the time the original bonds refunded by the Bonds were issued, the Corporation reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued and (2) not more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. (i) Qualified Advance RefundinQ. The Bonds will be issued more than 90 days before the redemption of the Refunded Obligations. The City and the Corporation represent as follows: (1) The Bonds are first advance refunding of the Refunded Obligations, within the meaning of section 149(d)(3) of the Code. (2) The Refunded Obligations are being called for redemption, and will be redeemed not later than the earliest date on which such bonds may be redeemed. (3) The initial temporary period under section 148(c) of the Code will end: (i) with respect to the proceeds of the Bonds not later than 30 days after the date of issue of such Bonds; and (ii) with respect to proceeds of the Refunded Obligations on the Closing Date if not ended prior thereto. (4) On and after the date of issue of the Bonds, no proceeds of the Refunded Obligations will be invested in Nonpurpose Investments having a Yield in excess of the Yield on such Refunded Obligations. 45615300.1 4 EXHIBIT A (5) The Bonds are being issued for the purposes stated in the preamble of the resolution authorizing the issuance of the Bonds. There is a present value savings associated with the refunding. In the issuance of the Bonds the City nor the Corporation has neither: (i) overburdened the tax exempt bond market by issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than reasonably necessary to accomplish the governmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material financial advantage based on arbitrage, within the meaning of section 149(d)(4) of the Code, apart from savings attributable to lower interest rates and reduced debt service payments in early years. 4. Receipt and Transfer of Proceeds of Sales Tax. The City agrees, in cooperation with the Corporation, to take such actions as are required to cause the "Gross Sales Tax Revenues" (as such term is defined in the resolution authorizing the issuance of the Bonds) received from the Comptroller of Public Accounts of the State of Texas for and on behalf of the Corporation to be transferred and deposited immediately upon receipt by the City to the credit of the banking or monetary fund maintained at the depository designated by the Corporation and known on the books and records of the Corporation as the "Pledged Revenue Fund". 5. Modifications. This Agreement shall not be changed orally, and no executory agreement shall be effective to waive, change, modify or discharge this Agreement in whole or in part unless such executory agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought. 6. Entire Aqreement. This Agreement, including the Exhibits, contains the entire agreement between the parties pertaining to the subject matter hereof and fully supersedes all prior agreements and understandings between the parties pertaining to such subject matter. 7. Counterparts. This Agreement may be executed in several counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart in proving this Agreement. 8. Severabilitv. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect. 9. Applicable Law. This Agreement shall in all respects be governed by, and construed in accordance with, the substantive federal laws of the United States and the laws of the State of Texas. 10. Captions. The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof. 45615300.1 5 EXHIBIT A IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date and year first above written. ATTEST: ~~ (Corporate Seal) ATTEST: 45615300.1 COLLEYVILLE ECONOMIC DEVELOPMENT CORPORATION CITY OF COLLEYVILLE, TEXAS ~~/ Mayor . (5 6 EXHIBIT A