ADOPTED - SEPTEMBER 28, 2010
Agenda Item No. 24
Introduced by the County Services and Finance Committees of the:
INGHAM COUNTY BOARD OF COMMISSIONERS
RESOLUTION
AUTHORIZING ISSUANCE
AND SALE OF REFUNDING BONDS
RESOLUTION #10-299
A RESOLUTION TO APPROVE:
·
Issuance of up to $7,750,000 of Bonds to refund the 2002
Building Authority Bonds
if there are net present value savings;
· Competitive or Negotiated Sale without further action by Board.
WHEREAS, the County of Ingham (the “County”) established the Ingham County Building Authority (the “Authority”) pursuant to the provisions of Act 31, Public Acts of Michigan, 1948 (First Extra Session), as amended; and
WHEREAS, the Authority leases the Grady Porter Building to the County under a Full Faith and Credit General Obligation Lease Contract dated as of October 1, 2001 (the “Lease”), wherein the County pays Cash Rentals to the Authority (the “Cash Rentals”) to provide for payment of the Authority’s 2002 Building Authority Bonds (the “Prior Bonds”), and the County has pledged its limited tax full faith and credit for the payment of the Cash Rentals; and
WHEREAS, the County published a Notice of Intention to enter into the Lease stating that the County would pledge its full faith and credit and taxing power to the payment of the Cash Rentals under the Lease; and
WHEREAS, Stauder Barch & Associates, Inc. (the “Financial Consultant”) has advised the County that it may be able to accomplish a net savings of debt service costs by refunding all or a portion of the Prior Bonds through the issuance of the County’s refunding bonds; and
WHEREAS, the Lease is an outstanding security of the County under the provisions of the Revised Municipal Finance Act, Act 34, Public Acts of Michigan, 2001, as amended (“Act 34”), and Part VI of Act 34 authorizes the County to refund all or any part of its outstanding securities by issuing refunding securities, and to secure the refunding securities by its limited tax full faith and credit pledge; and
WHEREAS, the Board of Commissioners determines that if the County is able to accomplish a net savings of debt service costs, then it is in the best interest of the County to issue the County’s refunding bonds in order to refund all or a portion of the County’s Cash Rental obligations under the Lease and enable the Authority to defease and call for early redemption all or a portion of the outstanding Prior Bonds; and
WHEREAS, the Board of Commissioners wishes to delegate sale and delivery of the refunding bonds to either the Controller/Administrator or the Director of Financial Services (each, severally, an “Authorized Officer”) without the necessity of the Board of Commissioners taking further action.
THEREFORE BE IT RESOLVED,
1. Issuance of Refunding Bonds. If, upon the advice of the Financial Consultant, refunding all or a portion of the Prior Bonds would accomplish a net savings of debt service costs, then bonds designated as the 2010 REFUNDING BONDS (LIMITED TAX GENERAL OBLIGATION) (the “Bonds”) shall be issued in the aggregate principal amount of not to exceed $7,750,000 for the purposes of refunding all or a portion of the County’s Cash Rental obligations under the Lease and enabling the Authority to defease and call for early redemption all or a portion of the outstanding Prior Bonds, and paying the costs incidental to the issuance, sale and delivery of the Bonds. If the Bonds are sold or delivered after December 31, 2010 the Authorized Officer may change the word “2010” in the designated name of the Bonds to the year in which the Bonds will be sold or delivered.
The County expressly and irrevocably pledges its full faith and credit for the prompt and timely payment of the principal of and interest on the Bonds. The Bonds will be payable from all lawfully available monies of the County, and the County shall levy annually ad valorem taxes on all the taxable property in the County which, taking into consideration estimated delinquencies in tax collections, shall be fully sufficient to pay the principal and interest on the Bonds provided, however, that if at the time of making any such tax levy there shall be other legally available funds for the payment of principal of and interest on the Bonds, then credit therefor may be taken against the levy for payment of the Bonds. The levy shall be subject to constitutional and statutory tax rate limitations
2. Bond Details. The Bonds shall be registered as to principal and interest and shall be in the denomination of $5,000 or integral multiples of $5,000 not exceeding for each maturity the maximum principal amount of such maturity, dated as of the date of delivery thereof or such other date as may be determined by the Authorized Officer at the time of sale of the Bonds, and numbered as determined by the bank or trust company to be designated as registrar and transfer agent for the Bonds (the “Transfer Agent”) by the Authorized Officer. The Bonds may be issued in book-entry-only form through The Depository Trust Company in New York, New York (“DTC”).
The Bonds shall mature as serial bonds or term bonds on the dates and in the amounts as shall be determined by the Authorized Officer at the time of sale of the Bonds. The principal of the Bonds shall be payable at the designated office of the Transfer Agent. The Bonds shall bear interest at a rate or rates to be determined by the Authorized Officer at the time of sale of the Bonds, payable on April 1, 2011 or such other initial interest payment date as shall be determined by the Authorized Officer at the time of sale of the Bonds, and semi‑annually thereafter on October 1st and April 1st of each year, by check drawn on the Transfer Agent mailed to the registered owner at the registered address, as shown on the registration books of the County maintained by the Transfer Agent. Interest shall be payable to the registered owner of record as of the 15th day of the month prior to the payment date for each interest payment. The date of determination of the registered owner for purposes of payment of interest as provided in this paragraph may be changed by the County to conform to market practice in the future. The principal of the Bonds shall be payable at the designated office of the Transfer Agent upon presentation and surrender of the appropriate bond. The Authorized Officer is authorized to execute an agreement with the Transfer Agent on behalf of the County. The County may designate a new Transfer Agent by notice mailed to the registered owner of each of the Bonds at such time outstanding not less than 60 days prior to an interest payment date.
Notwithstanding the foregoing, if the Bonds are held in book-entry form by DTC, payment shall be made in the manner prescribed by DTC. The Authorized Officer is authorized to execute such custodial or other agreement with DTC as may be necessary to accomplish the issuance of the Bonds in book-entry-only form.
The Bonds shall be subject to mandatory or optional redemption prior to maturity as determined by the Authorized Officer at the time of sale of the Bonds. Unless waived by any registered owner of bonds to be redeemed, official notice of redemption shall be given by the Transfer Agent on behalf of the County and shall conform to the requirements set forth in the form of Bond. Such notice shall be dated and shall contain at a minimum the following information: original issue date; maturity dates; interest rates; CUSIP numbers, if any; certificate numbers (and in the case of partial redemption) the called amounts of each certificate; the redemption date; the redemption price or premium; the place where bonds called for redemption are to be surrendered for payment; and that interest on bonds or portions thereof called for redemption shall cease to accrue from and after the redemption date.
In addition, further notice shall be given by the Transfer Agent in such manner as may be required or suggested by regulations or market practice at the applicable time, but no defect in such further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed herein.
The Bonds shall be executed in the name of the County by the manual or facsimile signatures of the Chairperson of the Board of Commissioners and Clerk of the County, and the corporate seal of the County shall be manually impressed or a facsimile thereof shall be printed on the Bonds. No Bond authorized under this resolution shall be valid until authenticated by an authorized representative of the Transfer Agent. The Bonds shall be delivered to the Transfer Agent for authentication and be delivered by the Transfer Agent to the purchaser in accordance with instructions from the Authorized Officer or her designee upon payment of the purchase price for the Bonds in accordance with the Bond Purchase Agreement for the Bonds. Executed blank bonds for registration and issuance to transferees shall simultaneously, and from time to time thereafter as necessary, be delivered to the Transfer Agent for safekeeping.
3. Bond Form. The Bonds shall be substantially in the following form with such changes as may be necessary to conform the Bonds to the final terms of sale:
United States of America
State of Michigan
COUNTY OF INGHAM
2010 REFUNDING BOND
(LIMITED TAX GENERAL OBLIGATION)
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Interest Rate |
Date of Maturity |
Date of Original Issue |
CUSIP |
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[insert rate] |
October 1, [insert date] |
[insert date] |
[insert CUSIP] |
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Registered Owner: Cede & Co. |
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Principal Amount: [insert amount] Dollars ($[insert amount]) |
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The COUNTY OF INGHAM, State of Michigan (the “County”), acknowledges itself to owe and for value received hereby promises to pay to the Registered Owner specified above, or registered assigns, the Principal Amount specified above, in lawful money of the United States of America on the Maturity Date specified above, [unless prepaid prior thereto as hereinafter provided,] with interest thereon (computed on the basis of a 360-day year consisting of twelve 30-day months) the Date of Original Issue specified above or such later date to which interest has been paid, until paid, at the Interest Rate per annum specified above, first payable on [insert date] and semiannually thereafter. Principal of this bond is payable at the [insert transfer agent and location] or such other transfer agent as the County may hereafter designate by notice mailed to the registered owner not less than sixty (60) days prior to any interest payment date (the “Transfer Agent”). Interest on this bond is payable to the registered owner of record as of the fifteenth (15th) day of the month preceding the interest payment date as shown on the registration books of the County kept by the Transfer Agent by check or draft mailed by the Transfer Agent to the registered owner of record at the registered address. For prompt payment of this bond, both principal and interest, the full faith, credit and resources of the County are hereby irrevocably pledged.
This bond is one of a series of bonds of even Date of Original Issue aggregating the principal sum of $[insert amount], issued for the purpose of refunding certain outstanding obligations of the County. This bond was issued under and in pursuance of the provisions of Act 34, Public Acts of Michigan, 2001, as amended, and a resolution of the County Board of Commissioners adopted on _______.
Bonds of this issue are not subject to optional redemption prior to maturity.
[MANDATORY REDEMPTION]
[The bonds maturing October 1, [insert date] (the “Term Bonds”) are subject to mandatory sinking fund redemption by lot prior to maturity on October 1, in the years and amounts set forth below, at a price equal to 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption.
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Term Bonds due October 1, [insert date] |
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Redemption Dates |
Principal Amounts |
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October 1, [insert date] |
[insert amount] |
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October 1, [insert date] |
[insert amount] |
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October 1, [insert date] (maturity) |
[insert amount] |
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The principal amount of Term Bonds to be redeemed on the dates set forth above shall be reduced, in the order determined by the County, by the principal amount of Term Bonds of the same maturity which have been previously redeemed (other than as a result of a previous mandatory redemption requirement), or purchased or acquired by the County and delivered to the Transfer Agent for cancellation; provided, that each such Term Bond has not previously been applied as a credit against any mandatory redemption obligation.]
In case less than the full amount of an outstanding bond is called for redemption, the Transfer Agent upon presentation of the bond called in part for redemption shall register, authenticate and deliver to the registered owner a new bond in the principal amount of the portion of the original bond not called for redemption.
Notice of redemption shall be given to each registered owner of bonds or portions thereof to be redeemed by mailing such notice not less than thirty (30) days [and not more than sixty (60) days] prior to the date fixed for redemption to the registered owner at the address of the registered owner as shown on the registration books of the County. Bonds shall be called for redemption in multiples of $5,000, and bonds of denominations of more than $5,000 shall be treated as representing the number of bonds obtained by dividing the denomination of the bonds by $5,000, and such bonds may be redeemed in part. The notice of redemption for bonds redeemed in part shall state that, upon surrender of the bond to be redeemed, a new bond or bonds in the same aggregate principal amount equal to the unredeemed portion of the bonds surrendered shall be issued to the registered owner thereof with the same interest rate and maturity. No further interest on bonds or portions of bonds called for redemption shall accrue after the date fixed for redemption, whether the bonds have been presented for redemption or not, provided funds are on hand with the Transfer Agent to redeem the bonds or portion thereof.
Any bond may be transferred by the person in whose name it is registered, in person or by the Registered Owner’s duly authorized attorney or legal representative, upon surrender of the bond to the Transfer Agent for cancellation, together with a duly executed written instrument of transfer in a form approved by the Transfer Agent. Whenever any bond is surrendered for transfer, the Transfer Agent shall authenticate and deliver a new bond or bonds, in like aggregate principal amount, interest rate and maturity. The Transfer Agent shall require the bondholder requesting the transfer to pay any tax or other governmental charge required to be paid with respect to the transfer. The Transfer Agent shall not be required to issue, register the transfer of, or exchange any bond during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice of redemption of bonds selected for redemption and ending at the close of business on the day of that mailing.
This bond is payable out of the County’s Debt Retirement Fund for this issue and in order to make such payment, the County is required each year to levy taxes on all taxable property within the boundaries of the County for such payment, subject to applicable constitutional and statutory limitations.
It is hereby certified and recited that all acts, conditions and things required to be done, exist and happen, precedent to and in the issuance of this bond and the series of bonds of which this is one, in order to make them valid and binding obligations of the County have been done, exist and have happened in regular and due form and time as provided by law, and that the total indebtedness of the County, including this bond and the series of bonds of which this is one, does not exceed any constitutional or statutory debt limitation.
This bond is not valid or obligatory for any purpose until the Transfer Agent’s Certificate of Authentication on this bond has been executed by the Transfer Agent.
IN WITNESS WHEREOF, the County, by its Board of Commissioners, has caused this bond to be signed in the name of the County with the facsimile signatures of the Chairman of its Board of Commissioners and its County Clerk and a facsimile of its corporate seal to be printed hereon, all as of the Date of Original Issue shown on the face of this bond.
COUNTY OF INGHAM
State of Michigan
By [Bond to be signed by Chairperson ]
Chairperson, Board of Commissioners
[SEAL]
Countersigned:
By [Bond to be signed by County Clerk ]
County Clerk
Date of Authentication: [insert date]
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within-mentioned resolution.
[insert transfer agent]
[insert transfer agent location], Michigan, Transfer Agent
By [Bond to be signed by Transfer Agent ]
Authorized Signatory
[Form of Assignment to be inserted]
4. Escrow Fund. The Authorized Officer is hereby directed to notify the Authority that the County intends to issue the Bonds and refund all or a portion of the County’s Cash Rental obligations under the Lease. The Authority is hereby requested to defease and call for early redemption the outstanding Prior Bonds as designated by the County, and to execute an Escrow Agreement (the “Escrow Agreement”) in order to secure payment of the Prior Bonds being refunded. The Authorized Officer shall designate a bank or trust company to serve as escrow trustee (the “Escrow Agent”) with the consent of the Authority. The Escrow Agreement shall provide for the creation of an Escrow Fund (the “Escrow Fund”) and shall irrevocably direct the Escrow Agent to hold the Escrow Fund in trust for the payment of the principal of and interest on Prior Bonds being refunded, and to take all necessary steps to call for redemption any Prior Bonds being refunded as specified by the Authorized Officer, including mailing of redemption notices. The Authorized Officer is hereby authorized to execute and deliver the Escrow Agreement and to purchase, or cause to be purchased, escrow securities, including, but not limited to, United States Treasury Obligations – State and Local Government Series (SLGS), in an amount sufficient to fund the Escrow Fund.
The Authorized Officer or the Treasurer of the County is hereby authorized to transfer monies from the Cash Rentals set aside to pay debt retirement on the Prior Bonds to the Escrow Fund created under the Escrow Agreement, to be invested as provided in the Escrow Agreement and to be used to pay principal and interest on the Prior Bonds. The amount to be transferred under this section shall be an amount which will enable the interest on the Bonds and the Prior Bonds to be, or continue to be, excluded from gross income for federal income tax purposes as determined by bond counsel.
5. Debt Retirement Fund. The Authorized Officer or the Treasurer of the County is hereby authorized to open a special depositary account with a bank to be designated as the 2010 REFUNDING BONDS DEBT RETIREMENT FUND (the “Debt Retirement Fund”), the moneys to be deposited into the Debt Retirement Fund to be specifically earmarked and used solely for the purpose of paying principal of and interest on the Bonds as they mature. All proceeds from taxes levied for the Debt Retirement Fund shall be deposited into the Debt Retirement Fund as collected. Commencing with the year 2010 (or 2011 if the Bonds are issued after the 2010 tax levy), there shall be levied upon the tax rolls of the County for the purpose of the Debt Retirement Fund each year, in the manner required by the provisions of Act 34 an amount sufficient so that the estimated collection therefrom will be sufficient to promptly pay, when due, the principal of and interest on the Bonds becoming due prior to the next annual tax levy; provided, however, that if at the time of making any such annual tax levy there shall be surplus moneys on hand in the Debt Retirement Fund for the payment of principal of and interest on the Bonds, then credit therefor may be taken against such annual levy for the Debt Retirement Fund. Such tax levy shall be subject to applicable statutory and constitutional limitations. The moneys deposited in the Debt Retirement Fund shall be used solely for the purpose of paying the principal of, interest on and redemption premiums, if any, for the Bonds and, as may be necessary to rebate arbitrage earnings, if any, to the United States Department of Treasury as requested by the Internal Revenue Act of 1986, as amended (the “Internal Revenue Code”). The Authorized Officer may change the word “2010” in the designated name of the Debt Retirement Fund to the year in which the Bonds will be sold or delivered.
In the event cash, or direct obligations of the United States, or obligations the principal of an interest on which are guaranteed by the United States, or a combination thereof, the principal of and interest on which, without reinvestment, come due at times and in amounts sufficient to pay at maturity or irrevocable call for earlier optional or mandatory redemption, the principal of, premium, if any, and interest on the Bonds, shall be deposited in trust, this resolution shall be defeased and the owners of the Bonds shall have no further rights under this resolution except to receive payment of the principal of, premium, if any, and interest of the Bonds from the cash or securities deposited in trust and the interest and gains thereon and to transfer and exchange Bonds as provided herein.
The Debt Retirement Fund may be pooled or combined with other debt retirement funds for issues of bonds of like character as provided by Act 34 or other state law.
Next there shall be deposited to the Escrow Fund from Bond proceeds monies which may be invested as described in the Escrow Agreement and which shall be used by the Escrow Agent solely to pay the principal, interest and redemption premiums on the Prior Bonds being refunded. The amount in the Escrow Fund and the investment proceeds to be received thereon will be sufficient, without reinvestment, to pay the principal, interest and redemption premiums on the Prior Bonds being refunded as they become due pursuant to maturity or the call for redemption.
The remaining proceeds of the Bonds shall be used to pay the costs of issuance of the Bonds. At the option of the Authorized Officer, the costs of the issuance of the Bonds may be paid from a fund established for that purpose in the Escrow Agreement. Any monies remaining after payment of costs of issuance and costs of refunding the Prior Bonds shall be transferred to the Debt Retirement Fund.
7. Tax Covenant. The County shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Bonds pursuant to the Internal Revenue Code in such a manner as to cause the Bonds or the Prior Bonds to be “arbitrage bonds” within the meaning of the Internal Revenue Code. The County hereby covenants that, to the extent permitted by law, it will take all actions within its control and that it shall not fail to take any action as may be necessary to maintain the exemption of interest on the Bonds, and the Prior Bonds from gross income for federal income tax purposes, including but not limited to, actions relating to the rebate of arbitrage earnings, if applicable, and the expenditure and investment of Bond proceeds and moneys deemed to be Bond proceeds, all as more fully set forth in the Non-Arbitrage and Tax Compliance Certificate to be delivered by the County on the date of delivery of the Bonds.
8. Qualified Tax-Exempt Obligations. The County designates the Bonds as “qualified tax-exempt obligations” for purposes of deduction of interest expense by financial institutions, if the Authorized Officer determines that the County does not intend to issue, or to authorize to be issued on its behalf, tax-exempt obligations within the calendar year in which the Bonds are issued in excess of the amount permitted for the County to designate the Bonds as “qualified tax-exempt obligations.” Any such designation shall be evidenced by execution of the Non-Arbitrage and Tax Compliance Certificate or other certificate to be delivered by the County with the Bonds.
9. Financial Consultant. The County hereby appoints Stauder Barch & Associates, Inc. as Financial Consultant for the Bonds.
10. Bond Counsel. The County hereby appoints Miller, Canfield, Paddock and Stone, P.L.C. (“Bond Counsel”) as bond counsel for the Bonds notwithstanding representation by Miller, Canfield, in matters unrelated to the Bonds, of potential underwriters for the Bonds or co‑managers or selling group members, or financial institutions which might act as Transfer Agent for the Bonds or Escrow Agent. The Board of Commissioners of the County acknowledges that Miller, Canfield, Paddock and Stone, P.L.C., represents many municipal bond underwriters, banks, and financial institutions in connection with matters unrelated to issuance of the Bonds by the County.
11. Verification Agent. The Authorized Officer is hereby authorized to select an independent certified public accountant to serve as verification agent to verify that the securities and cash to be deposited to the Escrow Fund will be sufficient to provide, at the times and in the amounts required, sufficient moneys to pay the principal of and interest on the Prior Bonds being refunded as they become due or upon call for redemption, and to verify the calculation of the yield on the Bonds, the Prior Bonds, and/or the Escrow Fund, if required by Bond Counsel.
12. Municipal Bond Ratings. The Authorized Officer is hereby authorized to apply for bond ratings from such municipal bond rating agencies as deemed appropriate, in consultation with the Financial Consultant.
13. Municipal Bond Insurance. If the Financial Consultant recommends that the County consider purchase of municipal bond insurance, then the Authorized Officer is hereby authorized and directed to negotiate with insurers regarding acquisition of municipal bond insurance, and, in consultation with the Financial Consultant, to select an insurer and determine which Bonds, if any, shall be insured.
14. Preliminary Official Statement. The Authorized Officer is authorized to approve circulation of a Preliminary Official Statement describing the Bonds and to deem such Preliminary Official Statement “final” for purposes of compliance with Securities and Exchange Commission Rule 15c2-12 (“Rule 15c2-12”).
15. Competitive Sale of Bonds. The Authorized Officer is hereby authorized to fix a date for sale of the Bonds in consultation with the Financial Consultant, and to arrange for publication of the Notice of Sale in The Bond Buyer, New York, New York, in substantially the form shown on the following pages (the “Notice of Sale”) with such revisions as may be recommended by the Financial Consultant and Bond Counsel.
OFFICIAL NOTICE OF SALE
$[insert amount]*
*(Subject to adjustment as described below)
COUNTY OF INGHAM
State of Michigan
2010
REFUNDING BONDS
(LIMITED TAX GENERAL OBLIGATION)
SEALED BIDS for the purchase of the above bonds will be received by the undersigned at the Ingham County Controller’s Office, Mason, Michigan, 48854, on [insert date], until [insert time], o’clock a.m./p.m., prevailing Eastern Time, at which time and place said bids will be publicly opened and read. Sealed bids will also be received on the same date and until the same time by an agent of the undersigned at the office of the Municipal Advisory Council of Michigan (“MAC”), Buhl Building, 535 Griswold, Suite 1850, Detroit, Michigan 48226, when, simultaneously, the bids will be opened and read. The County will award or reject bids on that date.
FAXED BIDS, signed by the bidder, may be submitted by members of the Municipal Advisory Council of Michigan to MAC at fax number (313) 963-0943 or by any bidder to the County at fax (517) 676-7306 Attention: Mary Lannoye; provided that faxed bids must arrive before the time of sale and the bidder bears all risks of transmission failure.
ELECTRONIC BIDS: Electronic bids will also be received on the same date and until the same time by Bidcomp/Parity as agent of the undersigned. Further information about Bidcomp/Parity, including any fee charged, may be obtained from Bidcomp/Parity, Anthony Leyden or Client Services, 1359 Broadway, Second Floor, New York, New York 10018, (212) 849-5021. If any provision of this Notice of Sale shall conflict with information provided by Bidcomp/Parity, as the approved provider of electronic bidding services, this Notice of Sale shall control. No change of the dated date will be allowed for the computation of the winning bid.
Bidders may choose any means or location to present bids but a bidder may not present a bid in more than one location or by more than one means.
BOND DETAILS: The bonds will be registered bonds of the denomination of $5,000 or integral multiples thereof not exceeding for each maturity the maximum principal amount of that maturity, dated as of the date of delivery thereof (anticipated to be [insert date]), and will bear interest from their date payable on April 1, 2011, and semiannually thereafter.
The bonds will mature on October 1 of each year, as follows:
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Principal |
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Principal |
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Principal |
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2011 |
[insert amount] |
2015 |
[insert amount] |
2019 |
[insert amount] |
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2012 |
[insert amount] |
2016 |
[insert amount] |
2020 |
[insert amount] |
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2013 |
[insert amount] |
2017 |
[insert amount] |
2021 |
[insert amount] |
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2014 |
[insert amount] |
2018 |
[insert amount] |
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MATURITY AND PURCHASE PRICE ADJUSTMENT: The aggregate principal amount of this issue as shown in this Notice of Sale is believed to be the amount necessary to provide adequate funds to refund a prior issue of bonds and to pay transactional costs assuming certain conditions existing at the date of sale. Following receipt of bids and prior to final award, the County reserves the right to increase or decrease the aggregate principal amount of the bonds by not more than $150,000 after receipt of the bids and prior to final award. Such adjustment, if necessary, will be made in increments of $5,000, will not exceed $25,000 per maturity, and may be made in any maturity. The purchase price will be adjusted proportionately to the increase or decrease in issue size and in such manner as to maintain as comparable an underwriter spread measured as a percentage of par to the extent possible, but the interest rates specified by the successful bidder for all maturities will not change. The successful bidder may not withdraw its bid as a result of any changes made within these limits.
If no bid results in present value debt service savings acceptable to the County, the County may reject all bids.
INTEREST RATE AND BIDDING DETAILS: The bonds shall bear interest at a rate or rates not exceeding 5.00% per annum, to be fixed by the bids therefor, expressed in multiples of 1/8 or 1/20 of 1%, or both. The interest on any one bond shall be at one rate only and all bonds maturing in any one year must carry the same interest rate. The difference between the highest and lowest interest rate on the bonds shall not exceed 3.00% per annum. THE INTEREST RATE BORNE BY BONDS MATURING IN ANY YEAR SHALL NOT BE LESS THAN THE INTEREST RATE BORNE BY BONDS MATURING IN THE PRECEDING YEAR. No proposal for the purchase of less than all of the bonds or at a price less than 98.5% or more than 101% of their par value will be considered. In submitting a bid for the bonds, the bidder agrees to the representation of the County by Miller, Canfield, Paddock and Stone, P.L.C. as bond counsel.
NO OPTIONAL REDEMPTION: The bonds are not subject to optional redemption prior to maturity.
TERM BOND OPTION: Bidders shall have the option of designating the bonds as serial bonds or term bonds or both. If a bidder designates bonds as term bonds, the principal requirements shown above for the designated years (as adjusted if necessary as described under the section captioned “MATURITY AND PURCHASE PRICE ADJUSTMENT”) shall represent a mandatory redemption requirement for a term bond or a term bond maturity as designated by the bidder. In any event, the above principal amounts (as adjusted) shall be represented by either serial bond maturities or mandatory redemption requirements or a combination of both. If the winning bidder does not designate bonds as term bonds, then all maturities shall be serial maturities. Any such designation must be made within 24 hours of the opening of bids for the bonds.
If the term bond option is selected, then the principal amount of the term bonds of a maturity to be redeemed on the dates set forth above may be reduced by the principal amount of the term bonds of the same maturity which have been previously redeemed or called for redemption (other than as a result of a mandatory redemption) or purchased or acquired by the County and delivered to the transfer agent. The County may satisfy mandatory redemption requirements by the purchase and surrender of term bonds in lieu of the calling of such term bonds for redemption.
Notice of redemption of any bond or portion thereof shall be given by the transfer agent at least 30 days prior to the date fixed for redemption by mail to the registered owner at the registered address shown on the registration books kept by the transfer agent. No further interest on a bond or portion thereof called for redemption shall accrue after the date fixed for redemption, whether presented for redemption or not, provided funds are on hand with the transfer agent to redeem the bond or portion thereof. In case less than the full amount of an outstanding bond is called for redemption, the transfer agent, upon presentation of the bond called for redemption, shall register, authenticate and deliver to the registered owner of record a new bond in the principal amount of the portion of the original bond not called for redemption.
AWARD OF BONDS - TRUE INTEREST COST: The bonds will be awarded to the bidder whose bid produces the lowest true interest cost determined in the following manner: the lowest true interest cost will be the single interest rate (compounded on [insert date] and semi-annually thereafter) necessary to discount the debt service payments from their respective payment date to [insert date] in an amount equal to the price bid. [insert date] is the anticipated date of delivery of the bonds.
BOOK-ENTRY ONLY: The bonds will be issued in book-entry only form as one fully registered bond per maturity and will be registered in the name of Cede & Co., as bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York. An authorized agent of DTC will act as securities depository for the bonds. Purchase of the bonds will be made in book-entry only form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interest in bonds purchased. The book-entry only system is described further in the preliminary Official Statement for the bonds. It will be the responsibility of the purchaser to obtain DTC eligibility. Failure of the purchaser to obtain DTC eligibility shall not constitute cause for a failure or refusal by the purchaser to accept delivery of and pay for the bonds.
TRANSFER AGENT AND REGISTRATION: Principal shall be payable at the corporate trust office of [insert transfer agent and location] Michigan, or other designated office, or such other transfer agent as the County may hereafter designate by notice mailed to the registered owner of record not less than 60 days prior to any interest payment date. As long as The Depository Trust Company or its nominee, Cede & Co., is the bondholder, payments will be made directly to DTC. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the beneficial owners of the bonds is the responsibility of the DTC Participants and Indirect Participants as described in the preliminary Official Statement for the bonds. Interest shall be paid by check or draft mailed to the registered owner of record as shown on the registration books kept by the transfer agent as of the 15th day of the month prior to an interest payment date. The bonds will be transferred only upon the registration books of the County kept by the transfer agent.
PURPOSE AND SECURITY: The bonds are to be issued pursuant to the authorization contained in Act 34, Public Acts of Michigan, 2001, as amended, and a resolution of the County Board of Commissioners, for the purpose of refunding the County’s lease obligations relating to bonds previously issued by the Ingham County Building Authority, thereby refunding such bonds. The County will pledge its full faith and credit for payment of the principal and interest on the bonds, and the bonds will be payable from all lawfully available monies of the County, including ad valorem taxes, which may be levied against all taxable property in the County, subject to applicable constitutional and statutory tax rate limitations. The rights or remedies of bondholders may be affected by bankruptcy, insolvency, fraudulent conveyance or other laws affecting creditors’ rights generally, now existing or hereafter enacted, and by the application of general principles of equity, including those relating to equitable subordination.
GOOD FAITH: A good faith deposit in the form of a certified or cashier’s check drawn upon an incorporated bank or trust company, or wire transfer, in the amount of $[insert 2% of par amount] payable to the order of the County Treasurer, will be required of the successful bidder. The successful bidder is required to submit its good faith deposit to the County as instructed by the County not later than 12:00 Noon, prevailing Eastern Time, on the next business day following the sale. The good faith deposit will be applied to the purchase price of the bonds. In the event the purchaser fails to honor its accepted bid, the good faith deposit will be retained by the County. No interest shall be allowed on the good faith check. The good faith check of the successful bidder will be cashed and payment for the balance of the purchase price of the bonds shall be made at the closing.
TAX MATTERS: In the opinion of Miller, Canfield, Paddock and Stone, P.L.C., bond counsel, under existing law, assuming compliance with certain covenants, interest on the bonds is excludable from gross income for federal income tax purposes as described in the opinion, and the bonds and interest thereon are exempt from all taxation by the State of Michigan or by any taxing authority within the State of Michigan except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof.
ISSUE PRICE CERTIFICATE: The successful bidder will be required to furnish, prior to the delivery of the bonds, a certificate in a form acceptable to bond counsel as to the “issue price” of the bonds within the meaning of Section 1273 of the Internal Revenue Code of 1986. Such certificate will include (i) for those maturities where 10% of each such maturity of the bonds has been sold to members of the general public (excluding underwriters, brokers and dealers) prior to delivery of the bonds, the price at which the first 10% of each such maturity was sold to members of the general public, and (ii) for those maturities where 10% of such maturity has not been sold to members of the general public (excluding underwriters, brokers and dealers) prior to delivery of the bonds, an agreement by the successful bidder to provide bond counsel with the prices at which the first 10% of each such maturity is ultimately sold to members of the general public.
BANK QUALIFIED: The County has designated the bonds as “qualified tax exempt obligations” for purposes of deduction of interest expense by financial institutions pursuant to the Internal Revenue Code.
LEGAL OPINION: Bids shall be conditioned upon the approving opinion of Miller, Canfield, Paddock and Stone, P.L.C., attorneys of Lansing and Detroit, Michigan. The opinion will be furnished without expense to the purchaser of the bonds at the delivery thereof. The fees of Miller, Canfield, Paddock and Stone, P.L.C., for services rendered in connection with such approving opinion are expected to be paid from bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the above bonds, Miller, Canfield, Paddock and Stone, P.L.C. has not been requested to examine or review and has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the bonds, and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial documents, statements or materials.
DELIVERY OF BONDS: The County will furnish executed bonds at its expense. Bonds will be delivered to an authorized agent of DTC on behalf of the purchaser at the expense of the County. The usual closing documents, including a certificate that no litigation is pending affecting the issuance of the bonds, will be delivered at the time of delivery of the bonds. If the bonds are not tendered for delivery by 12:00 noon, prevailing Eastern Time, on the 45th day following the date of sale, or the first business day thereafter if said 45th day is not a business day, the successful bidder may on that day, or any time thereafter until delivery of the bonds, withdraw its proposal by serving notice of cancellation, in writing, on the undersigned in which event the County shall promptly return the good faith deposit. Payment for the bonds shall be made in federal reserve funds.
BOND INSURANCE AT PURCHASER’S OPTION: If the bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the bidder/purchaser, the purchase of any such insurance policy or the issuance of any such commitment shall be at the option and expense of the purchaser of the bonds. Any increased costs of issuance of the bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the County has requested and received a rating on the bonds from a rating agency, the County will pay for the requested rating. Any other rating agency fees shall be the responsibility of the purchaser of the insurance. FAILURE OF THE MUNICIPAL BOND INSURER TO ISSUE THE POLICY AFTER THE BONDS HAVE BEEN AWARDED TO THE PURCHASER SHALL NOT CONSTITUTE CAUSE FOR FAILURE OR REFUSAL BY THE PURCHASER TO ACCEPT DELIVERY OF THE BONDS FROM THE COUNTY.
CUSIP NUMBERS: It is anticipated that CUSIP identification numbers will be printed on the bonds, but neither the failure to print such numbers on any bonds nor any error with respect thereto shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the bonds. The CUSIP Service Bureau charge for the assignment of such numbers shall be the responsibility of and shall be paid for by the purchaser of the Bonds.
OFFICIAL STATEMENTS: A preliminary Official Statement that the County deems to be final as of its date, except for the omission of information permitted to be omitted by Rule 15c2-12 of the Securities and Exchange Commission, will be prepared and may be obtained from Stauder, Barch & Associates, Inc., financial advisors to the County, at the address and telephone listed under FURTHER INFORMATION below. Stauder, Barch & Associates, Inc. will provide the winning bidder with a reasonable number of final Official Statements within seven business days from the date of sale to permit the purchaser to comply with Securities and Exchange Commission Rule 15c2-12. Additional copies of the Official Statement will be supplied by Stauder, Barch & Associates, Inc. upon request and agreement by the purchaser to pay the cost of additional copies. Request for additional copies should be made to Stauder, Barch & Associates, Inc. within 24 hours of the time of sale.
CONTINUING DISCLOSURE: As described more fully in the Official Statement, the County will execute and deliver prior to delivery of the bonds a written continuing disclosure undertaking in order to enable the underwriters of the bonds to comply with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission.
FURTHER INFORMATION: Further information regarding the bonds may be obtained from Stauder, Barch & Associates, Inc., 3989 Research Park Drive, Ann Arbor, Michigan 48108. Phone: (734) 668-6688.
THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS.
ENVELOPES containing the bids should be plainly marked “Proposal for Refunding Bonds.”
Mary A. Lannoye, Controller/Administrator
Ingham County, Michigan
16. Parameters of Sale. The Bonds shall bear interest at a rate or rates not exceeding 5.00% per annum. The purchase price for the Bonds, exclusive of any original issue discount or premium, shall not be less than 98.5% or more than 101% of the principal amount thereof. In making such determinations the Authorized Officer is authorized to rely upon data and computer runs provided by the Municipal Advisory Council or the Financial Consultant.
The authorization to the Authorized Officer to sell the Bonds includes, but is not limited to, determination of original principal amount of the Bonds; the prices at which the Bonds are sold; the date of the Bonds; the schedule of principal maturities and whether the Bonds shall mature serially or as term bonds; the provisions for mandatory redemption of term bonds, if any; and the interest rates and payment dates of the Bonds. Approval of the matters delegated to the Authorized Officer under this Resolution may be evidenced by execution of a certificate of award of sale of the Bonds or the final Official Statement.
17. Award of Sale of Bonds. The Authorized Officer is hereby authorized, on behalf of the County, subject to the provisions and limitations of this Resolution, to award sale of the Bonds to the bidder whose bid produces the lowest interest cost computed in compliance with the terms of the Notice of Sale, which bid shall comply with the requirements for bids specified in the Notice of Sale and shall be within the limitations contained in this Resolution. The Authorized Officer shall return checks received from the unsuccessful bidders to each bidder’s representative or by mail or overnight courier service.
18. Negotiated Sale of Bonds. The Authorized Officer is hereby authorized on behalf of the County to determine, based on the advice of the Financial Consultant, to conduct and pursue a negotiated sale of the Bonds if, in light of current market conditions a negotiated sale would present advantages and opportunities to select and adjust terms for the Bonds, to allow more flexibility in accessing the municipal bond market, and to price and sell the Bonds at the time that is expected to best achieve the most advantageous interest rates and costs to the County and the most favorable price for purchase of securities to be escrowed for payment of the Prior Bonds to be refunded. In the event that a negotiated sale is pursued, then the Authorized Officer is authorized to select an underwriter for the Bonds, negotiate and execute a bond purchase agreement with the underwriter, and take all other necessary actions required to effectuate the sale, issuance and delivery of the Bonds within the parameters authorized in this Resolution. Approval of the matters delegated to the Authorized Officer under this section may be evidenced by execution of a bond purchase agreement or the final Official Statement.
19. Official Statement. After sale of the Bonds, the Authorized Officer is authorized to prepare, execute and deliver a final Official Statement describing the Bonds.
20. Continuing Disclosure Undertaking. The County hereby agrees to enter into a Continuing Disclosure Undertaking Agreement in order to enable the underwriters of the Bonds to comply with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission. The Authorized Officer is authorized to execute and deliver the Continuing Disclosure Undertaking Agreement on behalf of the County in substantially the form which she shall, in consultation with Bond Counsel, determine to be appropriate.
21. Other Actions. In the event that neither of the Authorized Officers is available at the time that it becomes necessary to take actions directed or authorized under this resolution, then another County official designated by one of the Authorized Officers, is authorized to take the actions delegated to the Authorized Officer by this Resolution. The officers, administrators, agents and attorneys of the County are authorized and directed to take all other actions necessary and convenient to facilitate issuance, sale, and delivery of the Bonds and expenditure of Bond proceeds, and to execute and deliver all other agreements, documents and certificates and to take all other actions necessary or convenient to complete the issuance, sale, and delivery of the Bonds and expenditure of Bond proceeds in accordance with this Resolution, including appropriation and transfer of Bond proceeds as appropriate, and payment of costs of issuance including but not limited to escrow agent fees, verification agent fees, bond counsel fees, financial consultant fees, rating agency fees, costs of printing the Bonds and the preliminary and final official statements, publication of the Notice of Sale, and any other costs necessary to accomplish sale and delivery of the Bonds.
22. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded.
I hereby certify that the foregoing is a true and complete copy of a resolution adopted by the Board of Commissioners of County of Ingham, State of Michigan, at a Regular Meeting on September 28, 2010 and that public notice of the meeting was given pursuant to and in full compliance with Act No. 267, Public Acts of Michigan, 1976, and that minutes of the meeting were kept and will be or have been made available as required by Act 267.
I further certify that the following Members were present at the meeting: ___________ ____________________________________________________________________________________________________________________ and that the following Members were absent: _____________________________________________.
I further certify that Member _________________ moved for adoption of the resolution and that Member _________________ supported the motion.
I further certify that the following Members voted for adoption of the resolution: ______ ___________________________________________________________________________________________________________ and that the following Members voted against adoption of the resolution: ________________________________________________.
__________________________________________
County Clerk
County of Ingham
18,342,149.1\042952-00006
COUNTY SERVICES: Yeas: Copedge, Celentino, Grebner, McGrain, Vickers
Nays: None Absent: Schor Approved 9/21/10
FINANCE: Yeas: Grebner, Tennis, Holman, Dougan
Nays: None Absent: Schor, Bahar-Cook Approved 9/22/10