HomeMy WebLinkAboutResolutions - 2010.03.03 - 10195Miscellaneous Resolution 110034 March 3, 2010
BY: FINANCE COMMITTEE, THOMAS MIDDLETON, CHAIRPERSON
IN RE: TREASURER'S OFFICE / WATER RESOURCES COMMISSIONER - RESOLUTION
TO AUTHORIZE REDEMPTION OF OAKLAND COUNTY ROCHF_:STER HILLS WATER
SUPPLY AND SEWAGE DISPOSAL SYSTEM BONDS, SERIES 2005
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS, pursuant to the provisions of Act No. 342, Public Acts of Michigan, 1939,
as amended ("Act 342"), the County of Oakland (the "County") has issued its Oakland County
Rochester Hills Water Supply and Sewage Disposal System Bonds, Series 2005, dated
December 1, 2005 (the "Prior Bonds"), in the original principal amount of $3,800,000. The Prior
Bonds were issued by the County to defray the cost of acquiring and constructing water supply
system and sewage disposal system improvements pursuant to the Oakland County Water Supply
and Sewage Disposal Systems for Rochester Hills — Extension No. 5A Project Contract, dated
May 1, 2005 between the County and the City of Rochester Hills, (the "Municipality"); and
WhEREAS, the Prior Bonds remain outstanding in the aggregate principal amount of
$3,250,000, mature in various principal amounts in the years 2010 through 2025 and bear
interest at rates per annum which vary from 4.00% to 4,50%; and
WHEREAS, the County received a request from the Municipality to redeem part of the
outstanding Prior Bonds in inverse order of maturity with surplus proceeds of the Prior Bonds
and investment earnings thereon; and
WHEREAS, it is in the best interests of the County and the Municipality that part of the
Prior Bonds he redeemed as requested.
NOW. THEREFORE, BE IT RESOLVED:
1. The County is hereby authorized to use surplus proceeds of the Prior Bonds and
investment earnings thereon (the "Surplus Proceeds"), presently determined to be $894,568.29,
for the purpose of redeeming part of the outstanding Prior Bonds (as shall be determined by the
County Water Resources Commissioner as County Agency) in inverse order of maturity.
2. The Surplus Proceeds, shall be used to redeem part of the Prior Bonds as
determined by the County Agency. The Surplus Proceeds shall be used to establish an escrow
fund (the "E:erow Fund") consisting of cash and investments in direct obligations of, or
obligations the principal of and interest on which are unconditionally guaranteed by the United
States of America or other obligations the principal of and interest on which are fully secured by
the foregoing und used to redeem part of the Prior Bonds. The Escrow Fund shall be held by an
escrow agent (the "Escrow Agent") in trust pursuant to an escrow agreement (the "Escrow
Agreement") that irrevocably shall direct the Escrow Agent to take all necessary steps to redeem
part of the Prior Bonds as shall be determined by the County Agency, The County Treasurer
shall select the Escrow Agent and enter into the Escrow Agreement with the Escrow Agent on
behalf of the County. The amounts held in the Escrow Fund shall be such that the cash and the
investments and the income received thereon will be sufficient without reinvestment to pay the
principal of and interest on the Prior Bonds to be redeemed and to redeem such Prior Bonds as
required by the Escrow Agreement. The County's costs and expenses related to the redemption
of the Prior B( Inds and the Escrow Agreement shall be paid from the Surplus Proceeds.
FINANCE COMMITTEE
Motion carried unanimously on a roll call vote with Greimel, Potter and
Woodward absent.
The County Agency, the County Treasurer, the County Clerk and other County
officials and employees are hereby authorized to do all other things necessary to redeem part of
the Prior Bonds in accordance with the provisions of this Resolution.
4. All resolutions and parts or resolutions insofar as they may be in conflict herewith
are hereby rescinded.
Mr, Chairperson_ on behalf of the Finance Committee, 1 move adoption of tpc foregoing
resolution.
FINANCE COMMITTEE ANCE
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April 2, 2010
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Rodney B. Weeks, Vice President
Corporate Trust Department
The Huntington National Bank
6705 Orchard Lake Road, (MI-9197)
West Bloomfield, MI 48322
Re: Redemption of Oakland County Rochester Hills Water Supply and
Sewage Disposal System Bonds. Series 2005. dated December 1, 2005
Dear Rod:
A signed escrow agreement relating to the referenced matter is enclosed.
Very truly yours,
Paul M. Wyzgoski
PMW/dml
Enclosure
cc: Kevin Larsen
Andrew Meisner
Joseph Colaianne
Dale Deis
FiLOON•HELD 940)7 337 t.'..-158:50
Counselors At Law
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ANN ARBOR L NNSINit, C.RANU AVID
ESCROW AGREEMENT
COUNTY OF OAKLAND
THIS ESCROW AGREEMENT (the "Agreement") dated as of April 7, 2010, made by
and between the County of Oakland, State of Michigan and Huntington National Bank, Grand
Rapids, Michigan.
WITNESSETH:
WHEREAS, there are presently outstanding $3,100,000 in principal amount of Oakland
County Rochester Hills Water Supply and Sewage Disposal System Bonds, Series 2005, dated
December 1, 2005 (the "Prior Bonds"), which bonds mature serially in such years and such
amounts and bear interest at such rates as set forth on Exhibit A attached hereto and made a part
hereof; and
WlIEREAS. the Issuer (hereinafter defined) has adopted a resolution authorizing the use
of Surplus Proceeds (hereinafter defined) for the purpose of providing amounts sufficient to
provide for the payment of the principal of and interest on the Prior Bonds to be Redeemed
(hereinafter defined) on the dates and in the amounts shown on Exhibit B attached hereto; and
WHEREAS, the Issuer desires to provide for the deposit of cash and securities with the
Escrow Agent (hereinafter defined) to provide for such payment of the principal of and interest
on the Prior Bonds to be Redeemed; and
WHEREAS, the Issuer desires to enter into an escrow agreement with the Escrow Agent
to provide for the safekeeping, investment, reinvestment, administration and disposition of such
deposit upon the terms and conditions herein set forth; and
WHEREAS, the Issuer desires that the Surplus Proceeds shall be applied to purchase
certain direct obligations of or obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, or other obligations the principal of
and interest on which are fully secured by the foregoing, for deposit to the credit of the Escrow
Fund (hereinafter defined) created pursuant to the terms of this Agreement and to establish a
beginning cash balance in the Escrow Fund; and
WHEREAS, the Escrowed Securities (hereinafter defined) shall mature arid the interest
thereon shall be payable at such times and in such amounts so as to provide moneys which,
together with cash balances from time to time on deposit in the Escrow Fund, will be sufficient
to pay the principal of and interest on the Prior Bonds to be Redeemed; and
WHEREAS, by resolution adopted on March 3, 2010 (the "Redemption Resolution"), the
Board of Commissioners of the Issuer duly authorized the execution of this Agreement, a
certified copy of which resolution has been filed with the Escrow Agent.
NOW, THEREFORE, in consideration of the mutual undertakings, promises and
agreements herein contained, the sufficiency of which hereby are acknowledged, and to secure
the full and timely payment of the principal of and interest on the Prior Bonds to be Redeemed,
the Issuer and the Escrow Agent mutually undertake, promise, and agree for themselves and their
respective representatives and successors, as fellows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. Unless the context clearly indicates otherwise, th.e following
terms shall have the meanings assigned to them below when they are used in this Agreement:
"Code" means the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder.
"Escrow Agent" means The Huntington National Bank, Grand Rapids, Michigan, and its
successors as Escrow Agent under this Agreement.
"Escrow Fund" means the Oakland County Rochester Hills Water Supply and Sewage
Disposal System Bonds, Series 2005 Escrow Fund created and described in Section 3.01 of this
Agreement.
"Escrowed Securities" means those securities described on Exhibit C attached to this
Agreement.
"Issuer" means County of Oakland. State of Michigan.
"Prior Bonds' means Oakland County Rochester Hills Water Supply and Sewage
Disposal System Bonds, Series 2005, dated December 1, 2005, which are more fully described
on Exhibit A.
"Prior Bonds to be Redeemed" means $50,000 of the Prior Bonds maturing in the year
2022 and all of the Prior Bonds maturing in the years 2023 through 2025.
"Prior Bonds Paying Agent" means Huntington National Bank, Columbus, Ohio.
"Prior Bonds Resolution" means, collectively, the resolution duly adopted by the Board
of Commissioners of the Issuer on October 27, 2005, and the Orders of the Water Resources
Commissioner executed on October 28, 2005, and November 10, 2005, authorizing the issuance,
sale and delivery of the Prior Bonds.
"Surplus Proceeds" means the surplus bond proceeds and investment earnings thereon in
the aggregate principal amount of 5893,683.55 to be used for the purpose of redeeming the Prior
Bonds to be Redeemed.
Section 1.02. Interpretations. The titles and headings of the articles and sections of this
Agreement have been inserted for convenience and reference only and are not to be considered a
part hereof and shall not in any way modify or restrict the terms hereof This Agreement and all
of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth
herein and to achieve the intended purpose of providing for the defeasance of the Prior Bonds to
be Redeemed in accordance with applicable law.
ARTICLE II
DEPOSIT OF FUNDS AND ESCROWED SECURITIES
Section 2.01. Deposits in the Escrow Fund. The Issuer has deposited. or caused to be
deposited. in the Escrow Fund the following money and securities:
(a) $0.55 as the beginning cash balance for the Escrow Fund; and
(b) the Escrowed Securities described on Exhibit C attached hereto.
ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
Section 3.01. Escrow Fund. The Escrow Agent has created on its books a special and
irrevocable escrow fund to be known as the Oakland County Rochester I tills Water Supply and
Sewage Disposal System Bonds, Series 2005 Escrow Fund. The Escrow Agent hereby
acknowledges that there has been deposited to the credit of such Escrow Fund the beginning cash
balance and the Escrowed Securities as described in Section 2.01. The Escrowed Securities and
all proceeds therefrom, including assets acquired with such proceeds. shall be the property of the
Escrow Fund and shall be applied only in strict conformity with the terms and conditions of this
Agreement. All of the Escrowed Securities, all proceeds therefrom, including assets acquired
with such proceeds, and all cash balances from time to time on deposit in the Escrow Fund
hereby are pledged irrevocably to the payment of the principal of and interest on the Prior Bonds
to be Redeemed, which payment shall be made by timely transfers to the Prior Bonds Paying
Agent in such amounts and at such times as are provided for in Section 3.02 hereof When the
final transfers have been made to the Prior Bonds Paying Agent for the payment of the principal
of and interest on the Prior Bonds to be Redeemed in accordance with Exhibit B. any balance
then remaining in the Escrow Fund shall be transferred to the Issuer, and the Escrow Agent
thereupon shall be discharged from any further duties hereunder.
Section 3.02. Payment of Principal and Interest. The Escrow Agent is hereby
irrevocably instructed to transfer to the Prior Bonds Paying Agent from the cash balances from
time to time on deposit in the Escrow Fund the amounts required to pay the principal of and
interest on the Prior Bonds to he Redeemed in the amounts and at the times shown on Exhibit B
attached hereto.
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Section 103. Sufficiency of Escrow Fund. The Issuer represents that the successive
receipts of the principal of and interest on the Escrowed Securities will assure that the cash
balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide
moneys for transfer to the Prior Bonds Paying Agent at the times and in the amounts required to
pay the principal of and interest on the Prior Bonds to be Redeemed, all as more fully set forth on
Exhibit B attached hereto. If for any reason, at any time, the cash balances on deposit or
scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the amounts
required by the Prior Bonds Paying Agent to make the payments set forth in Section 3.02 hereof,
the Issuer shall deposit in the Escrow Fund, from lawfully available funds, additional funds in
the amounts required to make such payments when due. Notice of any such insufficiency shall
be given promptly as hereinafter provided, but the Escrow Agent shall not in any manner be
responsible for any insufficiency of funds in the Escrow Fund or the Issuer's failure to make
additional deposits thereto.
Section 3.04. Escrow Fund. The Escrow Agent at all times shall hold the Escrow Fund,
the Escrowed Securities and all other assets of the Escrow Fund as special trust funds but need
not segregate such funds and securities except to the extent required by law; and it shall hold and
dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and
other assets of the Escrow Fund always shall be maintained by the Escrow Agent as escrow
funds for the benefit of the holders of the Prior Bonds to be Redeemed, and a special account
thereof at all times shall be maintained on the books of the Escrow Agent. The holders of the
Prior Bonds to be Redeemed shall be entitled to a preferred claim and first lien upon the
Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund. The amounts
received by the Escrow Agent under this Agreement shall not be considered as a banking deposit
by the Issuer, and the Escrow Agent shall have no right to title with respect thereto except in its
capacity as Escrow Agent under the terms of this Agreement. The amounts received by the
Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks drawn by
the Issuer or by the Prior Bonds Paying Agent.
Section 3.05. Security for Cash Balances. Cash balances from time to time on deposit in
the Escrow Fund, to the extent not insured by the Federal Deposit Insurance Corporation or its
successor, shall be secured continuously by a pledge of direct obligations of, or obligations
unconditionally guaranteed by, the United States of America, having a market value at /east
equal to such cash balances.
ARTICLE IV
REDEMPTION OF PRIOR BONDS
Section 4.01. Duties of Escrow Agent in Connection with Redemption of Prior Bonds.
The Escrow Agent shall take all steps required by the Prior Bonds Resolution (copies of which
resolution and orders have been furnished to the Escrow Agent) to cause the Prior Bonds to be
Redeemed to be redeemed on April 1, 2012. The Escrow Agent is hereby authorized by the
Issuer to take all action on its behalf legally required to effect the call of such Prior Bonds on
such date and in connection therewith, the Escrow Agent shall notify the Prior Bonds Paying
Agent not later than February 1, 2012, to take all steps required by the Prior Bonds Resolution to
redeem the Prior Bonds to be Redeemed on April 1, 2012. Such notification shall include
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instructions to the Prior Bonds Paying Agent to mail by first-class mail not later than March 1,
2012, a notice of redemption to the registered holders of each of the outstanding Prior Bonds at
the registered addresses as shown on the registration books of the Issuer kept by the Prior Bonds
Paying Agent on the day that such notice is mailed.
ARTICLE V
LIMITATION ON INVESTMENTS
Section 5.01. General Prohibition. Moneys in the Escrow Fund and the proceeds of the
Escrowed Securities shall not be invested or reinvested by the Escrow Agent.
ARTICLE VI
RECORDS AND REPORTS
Section 6.01. Records. The Escrow Agent will keep books of record and account in
which complete and correct entries shall be made of all transactions relating to the receipts,
disbursements. allocations and application of the money and Escrowed Securities deposited in
the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at
reasonable hours and under reasonable conditions by the Issuer and the holders of the Prior
Bonds to be Redeemed.
Section 6.02. Reports. For the period beginning on the date hereof and ending on
October 30. 2010, and for each six (6) month period thereafter while this Agreement remains in
effect, the Escrow Agent shall prepare and send to the Issuer within thirty (30) days following
the end of such period a written report summarizing all transactions relating to the Escrow Fund
during such period, including, without limitation, credits to the Escrow Fund as a result of
interest payments on or maturities of the Escrowed Securities and transfers from the Escrow
Fund to the Prior Bonds Paying Agent for payments on the Prior Bonds to be Redeemed or
otherwise, together with a detailed statement of all Escrowed Securities, and the cash balance on
deposit in the Escrow Fund as of the end of such period.
ARTICLE VII
CONCERNING THE ESCROW AGENT
Section 7.01. Representations. The Escrow Agent hereby represents that it has all
necessary power and authority to enter into this Agreement and undertake the obligations and
responsibilities imposed upon it herein and that it will carry out all of its obligations hereunder.
Section 7.02. Limitation on Liability. The liability of the Escrow Agent to transfer
funds to the Prior Bonds Paying Agent for the payment of the principal of and interest on the
Prior Bonds to be Redeemed shall be limited to the proceeds of the Escrowed Securities and the
cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision
contained herein to the contrary, the Escrow Agent shall not have any liability whatsoever for the
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insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the
Escrowed Securities to make timely payment thereon, except for the obligation to notify the
Issuer promptly of any such occurrence.
The recitals herein and in the proceedings authorizing the Surplus Proceeds to be used to
redeem the Prior Bonds shall be taken as the statements of the Issuer and shall not be considered
as made by, or imposing any obligation or liability upon, the Escrow Agent. The Escrow Agent
is not a party to the Redemption Resolution and is not responsible for nor bound by any of the
provisions thereof. In its capacity as Escrow Agent it is agreed that the Escrow Agent need look
only to the terms and provisions of this Agreement.
The Escrow Agent makes no representations as to the value, conditions or sufficiency of
the Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security
afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in
respect to any of such matters.
It is the intention of the parties hereto that the Escrow Agent shall never be required to
use or advance its own funds or otherwise incur personal financial liability in the performance of
any of its duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in
good faith in the exercise of reasonable care and believed by it to be within the discretion or
power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the
consequences of any error ofjudgment; and the Escrow Agent shall not be answerable except for
its own action. gross negligence or willful default, nor for any loss unless the same shall have
been through its gross negligence or willful misconduct.
Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of the Issuer with respect to arrangements or contracts
with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to
dispose of and deliver the same in accordance with this Agreement and to take all action
necessary to effect the call of the Prior Bonds to be Redeemed for redemption as provided in
Article IV of this Agreement. If however, the Escrow Agent is called upon by the terms of this
Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be
obligated, in making such determination, only to exercise reasonable care and diligence, and in
event of error in making such determination the Escrow Agent shall be liable only for its own
willful misconduct or gross negligence. In determining the occurrence of any such event or
contingency the Escrow Agent may request from the Issuer or any other person such reasonable
additional evidence as the Escrow Agent in its discretion may deem necessary to determine any
fact relating to the occurrence of such event or contingency, and in this connection may make
inquiries of, and consult with, among others, the Issuer at any time.
Section 7.03. Compensation, The Issuer has caused to be paid to the Escrow Agent. as a
fee for performing the services hereunder and for all expenses incurred or to be incurred by the
Escrow Agent in the administration of this Agreement, the sum of Eight Hundred Dollars ($800)
the receipt and sufficiency of which are hereby acknowledged by the Escrow Agent. In the event
that the Escrow Agent is requested to perform any extraordinary services hereunder, the Issuer
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hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services, and
the Escrow Agent hereby agrees to look only to the Issuer for the payment of such fees and
reimbursement of such expenses. The Escrow Agent hereby agrees that in no event shall it ever
assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or
extraordinary, as Escrow Agent or in any other capacity, or for reimbursement for any of its
expenses.
Section 7.04. Successor Escrow Agents. If at any time the Escrow Agent or its legal
successor or successors should become unable, through operation of law or otherwise, to act as
Escrow Agent hereunder, or if its property and affairs shall be taken under the control of any
state or federal court or administrative body because of insolvency or bankruptcy or for any other
reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event
the Issuer, by appropriate resolution, shall promptly appoint an Escrow Agent to fill such
vacancy. If no successor Escrow Agent shall have been appointed by the Issuer within 60 days,
a successor may be appointed by the holders of a majority in principal amount of the Prior Bonds
to he Redeemed then outstanding by an instrument or instruments in writing filed with the Issuer,
signed by such holders or by their duly authorized attorneys-in-fact. If, in a proper case, no
appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of
this section within three months after a vacancy shall have occurred, the holder of any Prior
Bond to be Redeemed may apply to any court of competent jurisdiction to appoint a successor
Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper,
prescribe and appoint a successor Escrow Agent.
Any successor Escrow Agent shall be a corporation or association organized and doing
business under the laws of the United States or the State of Michigan, authorized under such
laws to exercise corporate trust powers, having its principal office and place of business in the
State of Michigan, having a combined capital and surplus of at least $25,000,000 and subject to
the supervision or examination by federal or state authority.
Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and the
Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall
execute and deliver an instrument transferring to such successor Escrow Agent, subject to the
terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder, Upon
the request of any such successor Escrow Agent, the Issuer shall execute any and all instruments
in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent
all such rights, powers and duties. The Escrow Agent shall pay over to its successor Escrow
Agent a proportional part of the Escrow Agent's fee hereunder.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notice. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid, addressed as follows:
To the Issuer:
Oakland County Treasurer
1200 North Telegraph Road
Pontiac, MI 48341
To the Escrow Agent:
Huntington National Bank
6705 Orchard Lake Road (MI-9197)
West Bloomfield, Michigan 48322
Attention: Corporate Trust Department
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may
change the address to which notices are to be delivered by giving to the other party not less than
ten (10) days prior notice thereof.
Section 8.02. Termination of Responsibilities. Upon the taking of all the actions as
described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or
responsibilities hereunder to the Issuer, the holders of the Prior Bonds to be Redeemed or any
other person or persons in connection with this Agreement.
Section 8.03. Binding Agreement; Counterparts. This Agreement shall be binding upon
the Issuer and the Escrow Agent and their respective successors and legal representatives and
shall inure solely to the benefit of the holders of the Prior Bonds to be Redeemed, the Issuer, the
Escrow Agent and their respective successors and legal representatives. This Agreement may be
executed in several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 8.04. Severability. In ease any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Agreement, but this Agreement snail be construed as if such invalid or illegal or unenforceable
provision had never been contained herein.
Section 8.05. Michigan Law Governs, This Agreement shall be governed exclusively
by the provisions hereof and by the applicable laws of the State of Michigan.
Section 8.06. Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Agent by this Agreement.
Section 8.07. Rights of Holders of Prior Bonds to be Redeemed. This Agreement shall
not be terminated nor amended in any manner that would affect adversely the rights of the
holders of the Prior Bonds to be Redeemed and may be amended only to correct errors, clarify
ambiguities or increase the rights of the holders of the Prior Bonds to be Redeemed.
EXECUTED as of the date first written above.
COUNTY OF OAKLAND, MICHIGAN
e
ANDREW E. MEISNER
Its: Treasurer
HUNTINGTON NATIONAL BANK
By:
Its:
By:
EXECUTED as of the date first written above.
COUNTY OF OAKLAND, MICHIGAN
By:
ANDREW E. MEISNER
Its: Treasurer
HUNTINGTON NATIONAL BANK
Its: VICE PRESIDENT
By:
Rodney B. Weeks
EXHIBIT A
Oakland County Rochester Hills
Water Supply and Sewage Disposal
System Bonds, Series 2005
(the Prior Bonds)
PRINCIPAL MATURITY
DUE APRIL 1 PRINCIPAL AMOUNT INTEREST RATE
2011 $150,000 4.00%
2012 173,000 4,00%
2013 175,000 4.00%
2014 175,000 4.00%
2015 175,000 4,00%
2016 200,000 4,10%
2017 200,000 4.15%
2018 200,000 4.20%
2019 200,000 4.30%
2020 225,000 4.35%
2021 225,000 4.375%
2022 225,000 4.40%
203 250,000 4.45%
2024 250,000 4,50%
2025 275,000 4,50%
Paying Agent: Huntington National Bank
EXHIBIT B
Escrow Fund Requirements
Principal and Interest
on the Prior Bonds to be Redeemed to be Paid from the Escrow Fund
DATE INTEREST
10/01/10 518,475,00
04/01/11 $18,475.00
10/01/11 518,475.00
04/01/12 518,475.00
PRINCIPAL
$825,000.00
TOTAL
$ 18,475.00
$ 18,475.00
$ 18,475.00
$843,475.00
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EXHIBIT C
Escrowed Securities
TYPE OF SECURITY MATURITY DATE PAR AMOUNT COUPON RATE
SLGS 10/01/10 $ 14,889.00
SLGS 04101/11 $ 14,727.00
SLGS 10/01111 $ 14,782.00
SLGS 04/01/12 $839,819.00
0.190%
0.380%
0.550%
0.870%
BLOONIFLID 9007-38f 10j-191i
4
$3,800,000
Oakland County - Rochester Hills Water Supply
and Sewage Disposal System Bonds, Series 2005
(Preliminary Defeasance Analysis)
Sources:
NET SOURCES AND USES
Closing Date: 04/07/10
Funds Available $894,568.29
$894.5f1,29
Uses:
Escrow Fund
Escrow Agent Fee
Legal Fees St Costs
Financial Advisor Fees &Costs
CUSIP Fee
Verification Report
Contingency Amount
$894.56139
$884,054.32
1,500.00 *
2,500.00 *
3,500.00
150.00 *
2.500.00
363.97
Defeasance Gross Savings:
Less Cash Deposit
and Defeasanse Cost:
$1,339,150.00
894,568.29
Defeasance Net Savings: $444,581.71
* Estimated.
ded1refundlOakland - Rochester HiiIs 2005 WS & SD System - Defeasance 1)612010 17
EAMPE
Ergarcir
$3,800,000
Oakland County - Rochester Hills Water Supply
and Sewage Disposal System Bonds, Series 2005
REMAINING DEBT SERVICE PRIOR TO BOND DEFEASANCL
Total Fiscal
Date Principal Coupon Interest Debt Service Total
10/01110 $65,860.63 $65,890.63
04/01/11 S150,000.00 4.000% 65,890,63 215,890.63 5281.781.25
10101/11 62,890.63 62.590.63
04/0112 175,000.00 4.000% 62,890.63 237.890.63 300,781,25
10101112 59,390.63 59,390.63
04,V1/13 175,000.00 4.000% 59,390.63 234,390.63 293,781.25
10/01113 55,890.63 55,990-63
04101114 115,000.00 4.000% 56,890.63 230,890.63 286,781.25
10101114 52,390.63 52,390.63
04/0105 175,000.00 4.000% 52,390 63 227,390.63 279,781,25
10/01/15 48,890,63 48,890.83
04/01116 200.000.00 4.100% 48.890.63 248,890.63 297,78125
10/01116 44,790.63 44.190.63
04/01/17 200,000.00 4.150% 44,790.63 244,790,63 289. 581.25
10101117 40,640.63 40,640 63
04/01/18 230,000.00 4.200% 40640.63 240,640.63 251,281.25
10/01/18 30,440.63 36,440,63
04/01/19 200,000.00 4,303% 36,440.63 236,440.83 272.551.25
10/01/19 32,140.63 32,140.63
04/01/20 225.00000 4.350% 32,140.63 257,140.83 289.281.25
10/01(20 27,246-68 27,246.88
04101/21 225,000.00 4.375% 27,246.88 252,246.88 279,493.75
10101/21 22,325.00 22,325 00
04/01/22 225,000.00 4.400% 22,325.00 247,32509 269,650.0
10101122 /7,375.00 17,375.00
04/01/23 250,000.00 4.450% 17,375.00 257,375.00 284,750.00
10/01123 11,81150 11,912.50
04/01/24 250,000.00 4.500% 11,812.50 261,812.50 273,625.00
10101124 6,167-50 6,187.50
04101/25 275000.00 4.500% 6,187.50 281,187.50 287,375.00
83.100.000„00 Si .168.606.2j 4.268.606.25 54.268.606 25
deritrefund1Oakiand - Rochester Hills 2005 WS 8, SD System - Defeeeance 1/612010
Principal Coupon interest
Total Fiscal
Debt Service Total
$3,800,000
Oakland County - Rochester Hills Water Supply
and Sewage Disposal System Bonds, Series 2005
BOND DEBT SERVICE TO BE DEFEASED
Date
10/01/10
04/01/11
10/01/11
04/01/12
10/01/12
041011'13
10(01/13
04/01/14
10/01/14
04/01/15
10101/15
04/01/16
10/01/16
04/01117
10/01/17
04/01118
10101118
04/01/19
10/01/19
04/01/20
10/01/20
04/01/21
10101/21
04/01/22
10/01/22
04/01/23
10/01/23
04/01/24
10/01/24
04/01/25
$50,000.00
250,000.00
250 000.00
276,000.00
$5254)00. 00
$18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18,475-00
18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18.475.00
18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18,475.00
18.475.00
4.400% 18,475.00
17,375.00
4.450% 17,375.00
11,812.50
4.500% 11,812.50
6,187.50
4.500% 5,187.50
$18,475.00
18,475.00
18,475 00
18,475.00
18,475.00
18,475.00
18,475,00
18,47.5.00
18,475.00
15,475,00
15,475,00
18,475.00
18,475.00
18,475.00
18,475,00
'18,475.00
18,475.00
18,475,00
18,475.00
18,475.00
18,475,00
18,475.00
18,475.00
58,475.00
17,375 00
267,375.00
11,812.50
261,812.50
6,187.50
281,187.50
$36,950.00
36,950.00
35,950.00
36,950.00
36,950.00
36,950.00
36,950.00
36,950.00
36.950.00
38,950.00
36,950.00
86,950.00
284.750.00
273,625.00
287.375.00
,S1.33.9.15.0,40 514 150.20 ;1 339.1§L00
ded1refund1Oakland - Rochester Hills 2005 WS & SD System Defeasance 116/2010 19
ER /11 111
• =
$3,800,000
Oakland County - Rochester Hills Water Supply
and Sewage Disposal System Bonds, Series 2005
NEW DEBT SERVICE SCHEDULE AFTER BOND DEFEASANCE
Total Fiscal
Date Principal Coupon Interest Debt Service Total
10/01/10 547,415.63 $47,415.63
04/01111 5150,000.00 4.000% 47,415.63 197,415.63 $244,831.25
10/01/11 44,415.63 44,415.63
04/01/12 175,000.00 4.000% 44,415.63 219,415.63 263.831.25
10/01/12 40,915.63 40,915.63
04/01/13 175,000.00 4.000% 40,915.63 215,916.63 256,831.25
10/01/13 37,415.63 37,415.63
04/01/14 175,000.00 4.000% 37,415.63 212.416.63 249.831.25
10/01/14 33,915.63 33.915.63
04101115 175,000.00 4.000% 33,915.63 208.915.63 242,831.25
10/01/15 30,415.63 30.416.63
04101/16 200,000.00 4.100% 30,415.63 230,415.63 260,831.25
10/01/16 26,315.63 26,315.63
04101/17 200,000.00 4.150% 26,315.63 228.315.63 252,631.25
10/01/17 22,165,63 22,165.63
04/01/18 200,000.00 4.200% 22.165.63 222,165.63 244,331.25
10/01/18 17,965.63 17,965.63
04/01119 200,000.00 4.300% 17,965.63 217,965.63 235,931,25
10/01/19 13,665,63 13,665.63
04/01/20 225,000.00 4.350% 13,665,63 238,565.63 252,331.25
10/01120 8,771.88 8,771.88
04/01/21 225,000.00 4.375% 8,771.88 233,771.88 242,543.75
10/01/21 3,850.00 3,850.00
04/01/22 176,000.00 4.400% 3,850.00 178,850.00 182,700.00
2.27_5.000.00 1A-54.456.25 12.929.456_25 12 929 456
ded\refundlOakland - Rochester Hills 2005 WS & SD System - Defeasence 1/6/2010 20
$3,800,000
Oakland County - Rochester Hills Water Supply
and Sewage Disposal System Bonds, Series 2005
DEFEASANCE SAVINGS ANALYSIS
Debt Service Debt Service
Prior to After Fiscal
Date Defeasance Defeasance Savingsf(Lossi Savingsnosel
10/01/14 $65,890.63 647,415.63 $18,475.00
04/01/11 215,890.63 197,415.63 18,475.00 536,950.00
10/01/11 62,890.63 44,415.63 18,475.00
04/01, /12 237,890.63 219,415.63 18,475.00 36,950.00
10/01/12 59,390.63 40,915.63 18,475.00
44/41/13 234,390.63 215,915.63 18,475.00 36,950.00
10/01/13 55,890.63 37,415.63 18,475,00
04/01/14 230.890.63 212,415.63 18,475.00 36,950,00
10/01114 52,390.63 33,915.63 18,475,00
04101115 227,390.63 208,915.63 18,475 00 36,950.00
10101115 48,890,63 30,415.63 18,475,00
04101116 24-8,890 63 234,415.63 18,475 00 36,950 00
1010116 44,790,63 26,315.63 18,475,00
44/01117 244,790 63 220,316.63 18,475,40 36,950 00
10/01117 40,640,63 22,165,53 18.475 00
04101118 240,640.63 222,165.63 18,475 00 36,954.00
10101118 36,440 63 17,965.63 18,475,00
04/01119 236.440.63 217,965.63 18,475 00 36,950.00
10/01/19 32,140.63 13,665.63 18,475.00
04/01/20 267,140.63 238,665.63 18,475.00 36,950.40
10101/24 27.246.88 8,771.88 18,475.00
04/01/21 252,246.88 233,771.88 18,475.04 36,950.00
14/01/21 22,325.00 3,850.00 18,475.00
04/41/22 247,325.00 178,854.00 68,475,00 86,950.00
10/01/22 17.375,00 17,375.00
04/01/23 267.375.04 267,375.00 284,750.00
10/01/23 11,812.50 11,812.50
44/01/24 261,812.5D 281.812.50 273,625.00
10/01/24 6,187.50 6,187.53
04/01125 281 187.50 281,187,50 287,375.04
IA2,0,60625
$2.929.456.25 Lith339..1,52,22 St 339.150...QD
Less Cost of Defeasance: 894 568.29
Defeasance Net Savings: 5444.58131
1/6/2010 21 dedlrefundlOaklanci - Rochester Hills 2005 WS & SD System - Defease nce
plaMlagg
$3,800,000
Oakland County - Rochester Hills Water Supply
and Sewage Disposal System Bonds, Series 2005
REDEMPTION SCHEDULE
Redemption Premium: 0.00%
Redeemed Redemption Total Fiscal
Data Principal Interest Principal Premium Debt Service Total
10101/10 $18475.00 $18.475.00
04/01/11 18,475.00 18,475.00 $36,950.00
10/01/11 18,475.00 18,475.00
04/01/12 18,475.00 $82500000 Um 843,475.00 861,950.00
1.12 ;73.900.00 $825.000.00 Egg 89.11900.00 p98.900.00•
v6/2010 22 dethrefundlOakland - Rochester Hills 2005 WS & SD System - Defeasance
04107/10 $0.32
10101110 0.32
04/01/11 0.47
10/01/11 094
04101112 0.97
$14,852.00 0.120%
14,885.00 0.370%
14,738.00 0.570%
839.7791)0 0.880%
$884 054 00
$0.15
0.47
0.03
-0.97
$0.32
0.47
0.94
0.97
0.00
MFCI
$3,800,000
Oakland County - Rochester Hills Water Supply
and Sewage Disposal System Bonds. Series 2005
DEFEASANCE ESCROW CASH FLOW ANALYSIS
04/07110 Beginning Cash Balance: $0.32
Beginning
Cash SLGS
Date Balance Principal
SLGS Rates SLGS Debt Service
Rate Available* Interest Total Defeasance
Ending
Net Cash
Cash Flow Balance Present Value
0.86862%
Arbitrage Yield: 4.3035817%
0,120% $3,623.15 $18,475.15 $18,475.00
0.370% 3,790.47 18,475.47 18,475.00
0.570% 3,737.03 18,475.03 18,475.00
0.880% 3,695.03 843,474.03 843,475.00
$14.645.6g 898.899.6 $898.900.0Q
Total Cost of Escrow Securities:
$18.397.92
18,318.67
18,239.03
829,098,38
884.054.0Q
$884.054.32
* January 6 2010 SLGS Rate Table.
ded\refundlOakland - Rochester Hills 2005 WS & SD System - Defeasance 1/6/2010
Form DC-001
OAKLAND COUNTY
WATER RESOURCES COMMISSIONER MEMORANDUM
TO: Thomas Middleton, Chairperson
Finance Committee
FROM: Joseph W. Colaianne
Attorney & Insurance Administrator
Cc: Lynn Sonkiss, Fiscal Services
SUBJECT: WATER RESOURCES COMMISSIONER - RESOLUTION TO AUTHORIZE
REDEMPTION OF OAKLAND COUNTY ROCHESTER HILLS WATER SUPPLY AND
SEWAGE DISPOSAL SYSTEM BONDS, SERIES 2005
DATE: February 16, 2010
Background: In accordance with Act No. 342, Public Acts of Michigan, 1939, as amended ("Act 342), the
County of Oakland (the "County") issued its Oakland County Rochester Hills Water Supply and Sewage
Disposal System Bonds, Series 2005, dated December 1, 2005 (the "Prior Bonds"), in the original principal
amount of S3,800,000. The Prior Bonds were issued by the County to defray the cost of acquiring and
constructing water supply system and sewage disposal system improvements pursuant to the Oakland County
Water Supply and Sewage Disposal Systems for Rochester Hills — Extension No. 5A Project Contract, dated
May 1, 2005 between the County and the City of Rochester Hills. The Prior Bonds remain outstanding in the
aggregate principal amount of $3,250,000, mature in various principal amounts in the years 2010 through 2025
and bear interest at rates per annum which vary from 4.00% to 4.50%.
Following the construction of the Extension 5A Project, there were surplus bond proceeds which have earned
investment interest. The City of Rochester Hills would like to utilize the surplus bond proceeds and investment
earnings to redeem part of the outstanding Prior Bonds in inverse order of maturity with surplus proceeds. This
action has been reviewed by the County's bond counsel (Dickinson Wright) and it is in the best interests of the
County and Rochester Hills that part of the Prior Bonds be redeemed as requested.
Attached is a resolution prepared by bond counsel, which proposes among other things, to authorize the
County to use surplus bond proceeds and investment earnings for the purpose of redeeming part of the
outstanding Prior Bonds (as shall be determined by the County Water Resources Commissioner as County
Agency) in inverse order of maturity. At this time, the amount of the bond proceeds and investment earnings
are presently determined to be $894,568.29. The resolution also authorizes the process for the redemption of
the bonds, which includes authorizing the County Treasurer to enter into an escrow agreement with an escrow
agent who will be responsible for redeeming the bonds.
The Water Resources Commissioner, in his capacity as the County Agency of this project is requesting that the
attached resolution be placed on the Finance Committee February 25, 2010 agenda for approval.
JOHN P. McCULLOCH
OAKLAND COUNTY WATER RESOURCES COMMISSIONER
Page 1 of 1 Rev.: 11/05/08
24
Resolution #10034 March 3, 2010
Moved by Long supported by Coleman the resolutions (with fiscal notes attached) on the Consent
Agenda be adopted (with accompanying reports being duLepted).
AYES: Burns, Capello, Coleman, Coulter, Douglas, Gershenson, Gingell, Gosselin, Greimel,
Hatchett, Jackson, Jacobsen, Long, McGillivray, Middleton, Nash, Potter, Potts, Runestad,
Schwartz, Scott, Taub, Woodward, Zack. Bullard. (25)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the Consent
Agenda were adopted (with accompanying reports being accepted).
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I. Ruth Johnson, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true
and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on March 3,
2010, with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakiand at
Pontiac, Michigan this 3rd day of March, 2010.
Gat
Ruth Johnson, County Clerk