ADOPTED - AUGUST 23, 2005

Agenda Item No. 21

 

Introduced by the Finance Committee of the:

 

INGHAM COUNTY BOARD OF COMMISSIONERS

At a regular meeting of the Board of Commissioners of the County of Ingham, Michigan, held on the _____ day of ________, 2005, at _____ __.m., in Mason, Michigan, there were:

PRESENT:

Commissioners             ____________________________________________________________

                                    ____________________________________________________________

ABSENT:

Commissioners             ____________________________________________________________

The following preambles and resolution were offered by ______________ and seconded by ________________:

RESOLUTION TO APPROVE REFUNDING AGREEMENT

RESOLUTION #05-212

WHEREAS, the County of Ingham, State of Michigan (the "County") desires that the Ingham County Building Authority take the necessary steps under the provisions of Act 31 and Act 34, to issue the Authority's refunding bonds (the "Refunding Bonds") to refund certain outstanding Ingham County Building Authority and Building Authority Refunding Bonds, Series 1996 (the "1996 Prior Bonds") and 1998 Building Authority and Building Authority Refunding Bonds (the "1998 Prior Bonds") (the 1996 Prior Bonds and the 1998 Prior Bonds, together, the "Prior Bonds"), which bonds were previously issued by the Authority in the original principal amounts of $21,665,000 and $12,700,000, respectively, to acquire, construct, improve, furnish and equip certain facilities within and for the benefit if the County and to refund other outstanding bonds of the Authority; and

WHEREAS, the specific maturities of the Prior Bonds that are to be refunded shall be those maturities which are designated as the Bonds To be Refunded by the Authority; and

WHEREAS, the Authority and the County have negotiated a refunding agreement, providing for such refunding, a draft of which is attached as Appendix I and incorporated in this Resolution by reference (the "Refunding Agreement"), and by the terms of such Refunding Agreement, the County will be obligated to pay the debt service on the Refunding Bonds to the Authority as provided in the Refunding Agreement; and

WHEREAS, the refunding is desirable and necessary to protect and preserve the public health and general welfare by reducing the cost of obligations of the County to pay certain cash rentals (the "Cash Rentals") incurred under the original Contracts of Lease, dated September 15, 1987, January 12, 1990 and March 1, 1995, between the County and the Authority related to the 1996 Prior Bonds (collectively, the "1996 Lease") and under the original Lease Contracts dated February 1, 1998 and April 1, 1998, between the County and the Authority related to the 1998 Prior Bonds (together, the "1998 Lease"); and

 

WHEREAS, in accordance with the provisions of Act 31, the Authority may issue its Refunding Bonds based upon the requirements set forth in Act 31 and Act 34;

NOW, THEREFORE, be it resolved by the Board of Commissioners of the County of Ingham, Michigan, as follows:

1.                  The Refunding Agreement between the Authority and the County providing for the refunding of the Bonds To Be Refunded as set forth in Exhibit A is approved.  The Refunding Bonds shall be issued in an amount not to exceed $12,500,000 and shall mature not later than November 1, 2018.

2.                  The Chairperson of the Board of Commissioners and the County Clerk are authorized and directed to execute the Refunding Agreement for and on behalf of the County, with such additions to, deletions from or modifications to the Refunding Agreement as the Chairperson and County Clerk, with the advice of Bond Counsel, shall approve, which approval shall be evidenced by their execution of the same.

3.                  The County ratifies and confirms its covenants in the 1996 Lease and the 1998 Lease to levy ad valorem taxes against all taxable property in the County to the extent necessary to meet the obligations of the County under the 1996 Lease, the 1998 Lease and under the Refunding Agreement, and does further indicate its purpose and intent to make such a levy annually as necessary to meet the County's obligations under the 1996 Lease, the 1998 Lease and the Refunding Agreement, subject to applicable constitutional and statutory restrictions.

4.                  The County covenants to take all actions within its control necessary to maintain the exclusion of the interest on the Bonds and the Refunding Bonds from adjusted gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended, including but not limited to, actions relating to the rebate of arbitrage earnings, if applicable, and the expenditure and investment of bond proceeds, cash rentals and moneys deemed to be bond proceeds.

5.                  The County Treasurer, the Chairperson of the County Board of Commissioners, the County Clerk and the County Controller, or any one of them, are authorized to take any and all actions as may be necessary and appropriate in connection with the execution and delivery of the Refunding Agreement and the Refunding Bonds and the transactions contemplated therein, including, if necessary, making any filing with the Michigan Department of Treasury.

 

 

 

A ROLL CALL VOTE WAS TAKEN AS FOLLOWS:

YEAS:                         ____________________________________________________________

                                    ____________________________________________________________

NAYS:                         ____________________________________________________________

ABSTAINING:            ____________________________________________________________

THE RESOLUTION WAS DECLARED ADOPTED.

 

 

STATE OF MICHIGAN         )

                                                ) SS.

COUNTY OF INGHAM        )

The undersigned, being the duly qualified and acting County Clerk of Ingham County, Michigan, certifies that the foregoing is a true and complete copy of a resolution duly adopted by the Ingham County Board of Commissioners, at which meeting a quorum was present and remained throughout and that an original thereof is on file in the records of the County.  The undersigned further certifies that the meeting was conducted, and public notice of the meeting was given, pursuant to and in full compliance with Act No. 267, Michigan Public Acts of 1976, as amended, and that minutes were kept and will be or have been made available as required thereby.

                                                                                    ____________________________________

                                                                                    Mike Bryanton

                                                                                    Ingham County Clerk

Dated:  ___________, 2005

 

FINANCE:  Yeas:  Dedden, Swope, Hertel, Schor, Thomas, Dougan

          Nays:  None                 Absent:  None               Approved 8/17/05


APPENDIX I

 

 

REFUNDING AGREEMENT

 

            THIS REFUNDING AGREEMENT, is made and entered into as of the ___ day of _________, 2005, by and between the INGHAM COUNTY BUILDING AUTHORITY (the "Authority"), a building authority organized and existing under and pursuant to the provisions of Act No. 31, Public Acts of Michigan, 1948 (First Extra Session), as amended ("Act 31"), and the COUNTY OF INGHAM, a County in the State of Michigan (the "County").

 

WITNESSETH:

 

            WHEREAS, the Authority has been previously established by and pursuant to the provisions of Act 31;

 

            WHEREAS, the Authority and the County did, under Act 31, enter into a certain Contracts of Lease, dated September 15, 1987, January 12, 1990 and March 1, 1995 (collectively, the "1996 Lease"), for the purpose of constructing, acquiring, furnishing, equipping, owning, improving, enlarging, operating and maintaining certain facilities (the "1996 Facilities") within the County and for use by the County;

 

            WHEREAS, the Authority and the County did, under Act 31, enter into certain Lease Contracts, dated February 1, 1998 and April 1, 1998 (together, the "1998 Lease"), for the purpose of constructing, acquiring, furnishing, equipping, owning, improving, enlarging, operating and maintaining certain facilities (the "1998 Facilities" and, together with the 1996 Facilities, the "Facilities") within the County and for use by the County;

 

            WHEREAS, bonds were issued by the Authority in connection with the 1996 Lease, and in connection with a refunding of other outstanding Authority bonds, and the bonds were designated Ingham County Building Authority and Building Authority Refunding Bonds, Series 1996 (the "1996 Prior Bonds") in the original aggregate principal amount of $21,665,000;

 

            WHEREAS, bonds were issued by the Authority in connection with the 1998 Lease, and in connection with a refunding of other outstanding Authority bonds, and the bonds were designated 1998 Building Authority and Building Authority Refunding Bonds (the "1998 Prior Bonds") in the original aggregate principal amount of $12,700,000;

 

            WHEREAS, the County and the Authority have been advised that conditions in the bond market have now improved to the point that the maturities of the Prior Bonds identified in Exhibits A and B to this Agreement (respectively, the "1996 Bonds To Be Refunded" and the "1998 Bonds To Be Refunded" and, together, the "Bonds To Be Refunded") could be refunded at a savings;

 

            WHEREAS, it is the determination and judgment of the County and the Authority that the Bonds To Be Refunded should be refunded to secure for the County interest rate savings and to permit, as a result of such savings, the amortization of costs and operations of the Facilities in a more economical fashion for the benefit of the taxpayers of the County; and

 

            WHEREAS, the execution of this agreement (the "Refunding Agreement") is necessary in order to implement a refunding program;

 

            NOW THEREFORE, in consideration of the premises and the covenants of each other, the parties agree as follows:

 

1.      Approval of Refunding.  The County and the Authority approve and confirm the refunding of the Bonds To Be Refunded pursuant to and under the provisions of Act 31 and Act No. 34, Public Acts of Michigan, 2001, as amended ("Act 34"), in the manner provided by and pursuant to this Refunding Agreement.

 

2.      Issuance of Refunding Bonds.  The Authority will issue refunding bonds in the total principal amount of $___________ ($___________ for refunding the 1996 Bonds To Be Refunded and $__________ for refunding the 1998 Bonds To Be Refunded) in order to pay the costs of refunding the Bonds To Be Refunded (the "Refunding Bonds").  All costs of retiring the Bonds To Be Refunded and of issuing the Refunding Bonds, including payment of the principal of and interest on the Bonds To Be Refunded, call premiums, if any, underwriting discount, bond and other printing, administrative, legal expenses, original issue discount, credit enhancement costs, rating fees, trustee, paying agent/registrar and escrow agent fees and all related expenses shall be paid from the proceeds of the sale of the Refunding Bonds or from cash amounts to be made available to pay such costs. 

 

3.      Actions by County and Authority.  To carry out and accomplish the refunding in accordance with the provisions of Michigan law, the County and the Authority have taken or shall take the following steps:

 

    1. The Authority has entered into a purchase contract to sell the Refunding Bonds to ____________________, as underwriter.

 

    1. The Authority has adopted a resolution providing for the issuance of the Refunding Bonds (the "Bond Resolution").  The Bonds shall mature, as authorized by law, and will be issued in anticipation of the lease installment payments (the "Cash Rentals") required to be made by the County as provided in the 1996 Lease and 1998 Lease, as applicable, as amended and supplemented by this Refunding Agreement, and will be secured primarily by the contractual obligations of the County to pay the Cash Rentals when due, and the County's full faith and credit pledge for the prompt and timely payment of the Cash Rentals, subject to applicable constitutional and statutory restrictions.  After due adoption of the Bond Resolution, the Authority will take all legal procedures and steps necessary to effectuate the sale and delivery of the Refunding Bonds.

 

 

 

    1. The Authority, upon receipt of proceeds of the sale of the Refunding Bonds, will comply with all provisions and requirements of law, the Bond Resolution and this Refunding Agreement relative to the disposition and use of the proceeds of sale of the Refunding Bonds.

 

    1. The Authority and the County shall not make any investments of proceeds of the Refunding Bonds or take any other actions which would cause the Refunding Bonds to constitute arbitrage bonds pursuant to any applicable federal statutes or regulations, or cause the interest on the Refunding Bonds to be subject to direct federal taxation.  The Authority and the County will comply with all requirements of the non-arbitrage and tax compliance certificate to be issued in connection with the Bonds.

 

4.      Payment of Cash Rentals.  The full principal amount of the Refunding Bonds shall be paid by the County to the Authority in annual principal installments corresponding to the Cash Rentals, together with interest and other expenses as provided in this Refunding Agreement.  It is understood and agreed that the Refunding Bonds of the Authority will be issued in anticipation of such payments of Cash Rentals by the County. It is further understood and agreed that those Prior Bonds not refunded with the proceeds of the Bonds, if any (the "Non-Refunded Bonds"), will continue to be payable from the Cash Rentals to be paid by the County pursuant to the 1996 Lease or the 1998 Lease, as applicable, all as set forth in Exhibits C and D.

 

It is agreed that the County shall pay to the Authority, on or before each principal or interest payment date, or redemption date, with respect to the Refunding Bonds and the Non-Refunded Bonds, an amount sufficient to pay the principal or interest due on the Refunding Bonds and the Non-Refunded Bonds on any such date at a time sufficient to allow for such payment.  From time to time as the Authority is billed by the registrar/transfer agent/paying agent for the Bonds for their services, and as other costs and expenses accrue to the Authority from handling of the payments made by the County or from other action taken in connection with the Bonds, the Authority shall notify the County of the amount of such fees, costs and expenses, and the County shall promptly remit to the Authority sufficient funds to pay such amounts when due.

 

If any installment payment as provided in this Refunding Agreement is not paid when due, the amount not paid shall be subject to a penalty of 1% of the amount not paid for each month or fraction of a month that the same remains unpaid after the due date.

 

5.      Full Faith and Credit Pledge.  The County, pursuant to authorization of Act 31, has irrevocably pledged its full faith and credit for the prompt and timely payment of the Cash Rentals pledged for payment of the Refunding Bonds and the Non-Refunded bonds, as expressed in this Refunding Agreement.  Pursuant to such pledge, if other funds are not available, the County shall be required to pay such amounts from any of its general funds as a first budget obligation and shall each year levy an ad valorem tax on all taxable property in the County in an amount which, taking into consideration estimated delinquencies in tax collections, will be sufficient to pay such obligations under the 1996 Lease, the 1998 Lease and this Refunding Agreement becoming due before the time of the following year's tax collections.  Such commitments of the County are expressly recognized as being for the purpose of providing funds to meet the Cash Rentals of the County in anticipation of which the Refunding Bonds are being issued and of which the Non-Refunded Bonds were issued.  Nothing in the 1996 Lease, the 1998 Lease and this Refunding Agreement shall be construed to prevent the County from using any, or any combination of, the means and methods provided in Section 11 of Act 31 for the purpose of providing funds to meet its obligations to pay the Cash Rentals under the 1996 Lease, the 1998 Lease and this Refunding Agreement, and if at the time of making the annual tax levy there shall be other funds on hand earmarked and set aside for the payment of the Cash Rentals due prior to the next tax collection period, then such annual tax levy may be reduced by such amount.  The obligation of the County to make such Cash Rental payments shall not be subject to any set-off by the County nor shall be any abatement of the Cash Rental payments for any reason, including, but not limited to, casualty that results in the Facilities being untenantable.

 

6.      Prepayments.  Additional moneys, over and above any of the Cash Rentals specified in this Refunding Agreement, may be prepaid to the extent not prohibited in the 1996 Lease or the 1998 Lease. 

 

7.      Validity of the 1996 Lease and 1998 Lease.  All provisions of the 1996 Lease and 1998 Lease not inconsistent with this Refunding Agreement, and particularly all covenants relative to the payment of and security for the Prior Bonds made by the County in the 1996 Lease and 1998 Lease, shall remain in full force and effect and shall apply with equal effect to the Non-Refunded Bonds and the Refunding Bonds authorized by this Refunding Agreement, it being understood that upon issuance of the Bonds, the Bonds To Be Refunded will be defeased and the Refunding Bonds shall be substituted for the Bonds To Be Refunded and be payable from the Cash Rentals under the 1996 Lease and the 1998 Lease, as applicable, and shall be outstanding in their place and stead.

 

8.      Additional Financing.  Nothing contained in this Refunding Agreement shall in any way be construed to prevent additional financing under the provisions of Act 31 or any other law for the purpose of constructing additional allowed facilities as may be permitted pursuant to Act 31.

 

9.      Conditional Obligations.  The obligations and undertakings of each of the parties to this Refunding Agreement shall be conditioned upon the successful accomplishment of the proposed refunding, and, therefore, if for any reason whatsoever the Refunding Bonds are not issued, then this Refunding Agreement shall be considered void and of no force and effect; provided, however, that in such event, all costs and expenses shall be paid by the County in accordance with existing commitments to the Authority, and the Authority shall not be obligated for such costs and expenses.

 

10.   Rights of Bondholders.  The Authority and the County each recognize that the holders from time to time of the Refunding Bonds will have rights in this Refunding Agreement, and it is therefore covenanted and agreed by each of them that so long as any of the Refunding Bonds shall remain outstanding and unpaid, the provisions of this Refunding Agreement shall not be subject to any alteration or revision which would in any manner materially affect either the security of the Refunding Bonds or the prompt payment of principal of or interest on the Refunding Bonds or the Non-Refunded Bonds.  The County and the Authority further covenant and agree that they will each comply with their respective duties and obligations under the terms of this Refunding Agreement promptly at all times and in the manner set forth in this Refunding Agreement, and will not suffer to be done any act which would in any way impair the Refunding Bonds or the Non-Refunded Bonds, the security for the Refunding Bonds or the Non-Refunded Bonds, or the prompt payment of principal of and interest on the Refunding Bonds or the Non-Refunded Bonds.  It is declared that the terms of this Refunding Agreement insofar as they pertain to the security of the Refunding Bonds and the Non-Refunded Bonds shall be deemed to be for the benefit of the holders of the Refunding Bonds and the Non-Refunded Bonds.

 

11.   Term of Refunding Agreement.  This Refunding Agreement shall remain in full force and effect until ________ 1, 2018, or until such earlier or later time as the Refunding Bonds and Non-Refunded Bonds issued by the Authority are paid, at which time this Refunding Agreement shall be terminated, and the provisions of the 1996 Lease and 1998 Lease, as applicable, relative to disposition of the Facilities shall be carried out.  In any event, the obligations of the County to make the payments required under this Refunding Agreement shall be terminated at such time as all of the Refunding Bonds and the Non-Refunded Bonds are paid in full by the County, together with all interest and penalties and other obligations under this Refunding Agreement.

 

12.   Successors and Assigns.  This Refunding Agreement shall inure to the benefit of and be binding upon the respective parties to it, their successors and assigns.

 

13.   Effective Date.  This Refunding Agreement shall become effective upon approval by the County and the Authority, and when duly executed by the Chairperson of the County Board of Commissioners and the County Clerk, on behalf of the County, and by the Chairperson and Secretary of the Authority, on behalf of the Authority.  This Refunding Agreement may be executed in several counterparts.

 

IN WITNESS WHEREOF, the parties have caused this Refunding Agreement to be executed as of the date first above written.

 

COUNTY OF INGHAM                                           INGHAM COUNTY BUILDING AUTHORITY

 

 

By: _____________________________                    By: _____________________________

           

Its:        Chairperson, Board of                          Its:        Chairperson

            Commissioners

 

 

 

By: _____________________________                    By: _____________________________

           

Its:        County Clerk                                                    Its:        Secretary

 

 


 

 

EXHIBIT A

 

THE 1996 BONDS TO BE REFUNDED

 

 

            For purposes of the attached Refunding Agreement the 1996 Bonds To Be Refunded consist of the following maturities of the Authority's Ingham County Building Authority and Building Authority Refunding Bonds, Series 1996 dated January 1, 1996:

 

       Date

(November 1)

Amount[*]

Interest Rate

2006

$670,000

4.80%

2007

700,000

4.90

2008

740,000

5.00

2009

610,000

5.10

2010

635,000

5.125

2016

2,140,000

5.00

 

            All of such Bonds shall be called for early redemption on November 1, 2005 at a price of 101% of par.

 


EXHIBIT B

 

THE 1998 BONDS TO BE REFUNDED

 

 

            For purposes of the attached Refunding Agreement the 1998 Bonds To Be Refunded consist of the following maturities of the Authority's 1998 Building Authority and Building Authority Refunding Bonds dated August 1, 1998:

 

       Date

(July 1)

 

Amount*

 

Interest Rate

2009

$795,000

4.55%

2010

835,000

4.65

2011

925,000

4.75

2012

560,000

4.85

2014

1,200,000

5.00

2016

1,310,000

5.00

2018

1,440,000

5.00

 

            All of such Bonds shall be called for early redemption on July 1, 2008 at a price of 100% of par.


EXHIBIT C

 

Debt Service Under 1996 Lease and

Refunding Agreement for 1996 Non-Refunded

Bonds and 2005 Refunding Bonds (1996 Portion)

 

 

 

Date

 

1996

Non-Refunded Bonds

 

2005 Refunding Bonds

           (1996 Portion)

 

 

Total

 

 

Principal

Interest

Total

 

Principal

Interest

Total

 

Principal

Interest

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

           


EXHIBIT D

 

Debt Service Under 1998 Lease and

Refunding Agreement for 1998 Non-Refunded

Bonds and 2005 Refunding Bonds (1998 Portion)

 

 

 

Date

 

1998

Non-Refunded Bonds

 

2005 Refunding Bonds

           (1998 Portion)

 

 

Total

 

 

Principal

Interest

Total

 

Principal

Interest

Total

 

Principal

Interest

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



[*] All or a portion of such maturities may be refunded as determined when the Refunding Bonds are offered for sale.

* All or a portion of such maturities may be refunded as determined when the Refunding Bonds are offered for sale.