Loading...
HomeMy WebLinkAboutResolutions - 1983.03.16 - 11607March 17 , 1983 • RESOLUTION No. 83050 RE: AUTHORIZATION TO BORROW AGAINST DELINQUENT 1982 TAXES BY: FINANCE COMMITTEE TO: THE OAKLAND COUNTY BOARD OF COMMISSIONERS MR. CHAIRMAN, LADIES AND GENTLEMEN: WHEREAS, the Board of Commissioners of the County has adopted a resolution establishing the Oakland County Delinquent Tax Revolving Fund, pursuant to Section 87b of Act No. 206 of the Public Acts of 1893, as amended ("Act 206"): and WHEREAS, this fund has been designated as the 100% Tax Pay- ment Fund by the Oakland County Treasurer (the "Treasurer" or "County Treasurer"), and it appears desirable to borrow to pro- vide money for part or all of this fund for the 1982 delinquent real property taxes; and WHEREAS, the purpose of this fund is to allow the County Treasurer to pay from the fund any or all delinquent real prop- erty taxes which are due the County, any school district, inter- mediate school district, community college district, city, town- ship, special assessment or drainage district, or any other poli- tical unit or county agency for which delinquent tax payments are due on settlement day with the County Treasurer or any city or township treasurer, and the County Treasurer has been directed to make such payments by the Board of Commissioners of this County; and WHEREAS, it is hereby determined that it is necessary that the County borrow a sum not to exceed (a) the amount of the 1982 delinquent real property taxes which become delinquent on or before March 1, 1983, (the "delinquent taxes" or "1982 delinquent taxes") and (b) a reserve to assure prompt payment of the notes, and deposit the proceeds in the 1983 Account (as defined below) and the 1983 Note Reserve Fund (established below) respectively; and WHEREAS, such borrowing is authorized by Sections 87c, 87d and 89 of Act No. 206; and WHEREAS, the total amount of unpaid delinquent taxes out- standing on March 1, 1983, is estimated to be $70,000,000, excluding interest, fees and penalties. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OY THE COUNTY AS FOLLOWS: GENERAL OBLIGATION LIMITED TAX NOTES, SERIES 1983 101. Issuance of Notes. The County shall borrow Eighty Million Dollars ($80,000,000) or such part thereof as will represent an amount not to exceed (a) the exact amount of the delinquent taxes outstanding on March 1, 1983, excluding interest, fees and penalties, and (b) an amount not to exceed fifteen percent (15%) of the amount borrowed in order to constitute a reserve (the "1983 Note Reserve Fund"), and issue its "General Obligation Limited Tax Notes. Series 1983" (the "notes"), payable from the delinquent taxes outstanding on March 1, 1983, and the other sources specified below. The proceeds of the notes shall be placed in and used as the whole or part of the Fund Account No. 61683 of the County (the "1983 Account") and the 1983 Note Reserve Fund, to be used as provided in Act 206. The exact borrowing amount will be designated by the County Treasurer after the amount of the 1982 delinquent taxes are determined by the Treasurer, which designation will specify the amount to be allocated to the 1983 Note Reserve Fund. 102. Note Details. The notes shall bear interest payable November. 1, 1983, and each May 1 and November 1 thereafter, until maturity, which interest is not to exceed the maximum rate of interest as may be permitted by law on the date the notes are offered for sale. The notes shall be coupon notes issued in denominations of $5,000 each, or such other denominations as the Treasurer shall authorize, and shall be numbered from 1 upwards, beginning with their earliest maturities in the direct order of their maturities. The notes may. at the Treasurers option, be issued at a discount of not to exceed 2% of the face amount of the notes. The notes shall be dated March 1, 1983, and shall be due and payable as follows: $21,000.000 on May 1, 1984: $19,000.000 on May 1, 1985; and not more than $40,000,000 on May 1, 1986. 103. Bearer ing Agent. The notes of each maturity shall be payable to the bearer in lawful money of the United States of America at such bank or trust company in the. State of Michigan as shall be designated either prior to sale by the Treasurer (or, if the Treasurer so permits, by the original pur- chaser or purchasers), and the notes and coupons shall be sub- stantially in the form attached as Appendix A. Co-paying agents located either in Michigan or elsewhere in the United States of America may also be designated. 104. Redemption. Notes maturing in the years 1984 and 1985 shall not be subject to redemption prior to maturity. The notes maturing on May 1, 1986. may be redeemed on any interest payment date on or after May 1, 1985, at the option of the County Treas- urer. Notes so called for redemption shall be redeemed at the n••• 3 par value thereof and accrued interest plus, at the option of the County Treasurer, a premium of 1% on each note, computed as a percentage of the face amount thereof, if redeemed on or after May 1, 1985, but prior to maturity. Notice of redemption shall be given as provided in the form of official notice of sale attached to Resolution , provided that if the Treasurer elects to offer such 1% premium on the notes the official notice of sale and the note form shall be changed accordingly. 105. Public or Private Sale. The Treasurer may, at the Treasurer's option, conduct a public sale of the notes (after publication of the notice of sale attached to, and as provided in. Resolution 3), provided such notes shall not be sold at a discount exceeding 2% of the face amount of the notes, after which sale the Treasurer shall award the notes to the lowest bidder. The conditions of sale shall be as specified in the notice of sale, and the Treasurer shall be empowered to make any change in the notice of sale as may in the Treasurer's discretion be necessary or appropriate. The Treasurer may alternatively, at the Treasurer's option, negotiate a private sale of the notes naming such paying agent or agents as the Treasurer may choose. 106. Execution and Delivery. The County Treasurer is hereby authorized and directed to execute any coupon notes for the County or to execute the same by causing a facsimile of the Treasurer's signature to be affixed, provided in the latter instance, the notes are thereafter authenticated by an authenti- cating agent named by the Treasurer. The notes shall be sealed with the County seal or a facsimile of such seal. The coupons shall be executed with the facsimile signature of the County Treasurer and shall contain substantially the following nota- tion: "This coupon is payable only from the following sources: certain delinquent real property taxes, the interest thereon, a part of the administration fees thereon, moneys on deposit in a certain 1983 Note Reserve Fund and other amounts, all as des- cribed in the note to which this coupon pertains." The Treasurer is thereafter authorized and directed to deliver the notes to the purchaser upon receipt of the purchase price, which delivery may be made in the discretion of the Treas- urer at one time or in parts at various times, provided that all of the notes with the earliest maturities shall be delivered prior to any notes with later maturities. The notes will be delivered at the expense of the County in such city or cities designated by the Treasurer in the notice of sale or otherwise. 107. Renewal, Refunding or Advance Refunding Notes. If at any time it appears to be in the best interests of the County, the Treasurer may by order authorize the issuance of renewal, refunding or advance refunding notes, which notes need not be approved by prior order of the Municipal Finance Commission or any successor authority. 4 108. Registered Notes. If the notes must be issued in fully registered form both as to principal and interest to be exempt from federal income taxation under Section 103 of the Internal Revenue Code of 1954, as amended, the notes shall be so issued and shall be substantially in the form attached as Appendix B. Such fully registered notes shall be registrable upon the books of a trustee or note registrar to be named by the Treasurer. The trustee or note registrar so named may be any bank or trust company offering the necessary services pertaining to the registration and transfer of the notes. Fully registered notes may be authenticated by the trustee or note registrar if so ordered by the Treasurer. II. TWO SERIES OPTIONAL 201. Issuance of Two Series. At the option of the Treas- urer, exercisable by order of the Treasurer, the notes may be issued in two series called General Obligation Limited Tax Notes, Series 1983-1 and General Obligation Limited Tax Notes, Series 1983-11. The notes of each such series shall be issued according to the provisions of this Resolution in all respects (and the word "notes" chall be deemed to include both series of notes throughout this Resolution) except that: a. The notes of Series 1983-1 shall be issued in an aggregate amount not to exceed $40,000,000, $10,500,000 of which shall mature on May 1, 1984, $9,500,000 of which shall mature on May 1, 1985, and not more than $20,000,000 of which shall mature on May 1, 1986; and b. The notes of Series 1983-11 shall be issued in an aggregate amount not to exceed $40,000,000, $10,500,000 of which shall mature on May 1, 1984, $9,500,000 of which shall mature on May 1, 1985; and not more than $20,000,000 of which shall mature on May 1, 1986. The exact amount of each series will be designated by the Treas- urer after the amount of the 1982 delinquent taxes are determined by the Treasurer, which designation will specify the amount of each series which will be allocated to the 1983 Note Reserve Fund, 202. Notes Secured Peri Passu. If the notes are sold in two series pursuant to this Article II, each series of notes shall be secured pan i passu with the other by the security described in and the amounts pledged by Article III of this Resolution. 203. Note Form and Notice of Sale. If the notes are sold in two series pursuant to this Article II, the Treasurer is hereby authorized and directed to make such changes to the form of the notes approved by this Resolution and the form of notice of sale approved by Resolution below, as may, in the Treasurer's 5 discretion, be necessary to reflect the issuance of the notes in two series with common security. JII FUNDS AND SECURITY 301. There is hereby established the 1983 100% Tax Payment Fund (the "Fund"), of which the funds and accounts set forth below are a part. 302. 1983 Account. The County Treasurer shall use the original proceeds of the borrowing (except that part to be used for the 1983 Note Reserve Fund) to establish Fund Account No. 61683 of the County (the "1983 Account") and shall pay therefrom the full amount of the delinquent taxes on the roll delivered as uncollected by any tax collector in the County which is out- standing and unpaid on or after March 1, 1983, as required by Act 206. 303. 1983 Note Reserve Fund. There is hereby established the "1983 Note Reserve Fund", into which the Treasurer shall deposit all of the proceeds of the sale which are borrowed for the purpose of establishing the 1983 Note Reserve Fund. All money in the 1983 Note Reserve Fund, except as provided below, shall be added to the Funds Pledged to Note Repayment (as defined below) and shall be used solely for payment of principal. premium, if any, and interest on the notes for which the Fund was established. Money in the 1983 No -_e Reserve Fund shall be withdrawn first for payment of principal, premium, if any, and interest on the notes before other County general funds are used to make the payments. All income or interest earned by, or increment to, the 1983 Note Reserve Fund, due to its investment or reinvestment, shall be deposited in such fund, When the 1983 Note Reserve Fund is sufficient to retire the notes and accrued interest thereon, it may be used to purchase the notes on the market, or, if the notes are not available, to retire the notes when due. 304. Collection Fledged to Note There is hereby established the Fund Collection Account No.61683 of the County (the "Collection Account"), effective as of March 1, 1983, into which account the Treasurer is directed to place on the books and records all of the following payments received on account of the delinquent taxes: a. All of the delinquent taxes collected on and after March 1, 1983, and all interest on such taxes: b. All of the property tax administration fees on the delinquent taxes once the expenses of this borrowing have been paid, and c. Any amounts which are receivedi by the Treasurer from the taxing units within the County because of the uncollectability of the delinquent taxes. The amounts specified in this paragraph are hereby designated as the "Funds Pledged to Note Repayment." 305. Pledge. The following are hereby pledged to the repayment of the notes and shall be used solely for repayment of the notes until the notes and all premium, if any, and interest on the notes are paid in full: a. All of the Funds Pledged to Note Repayment; b. All of the 1983 Note ReserVe Fund; and C. Any interest earned on any money from either the Funds Pledged to Note Repayment or the 1983 Note Reserve Fund. 306. Limited Tax General Obligation, In addition, this note issue shall be a general obligation of the County, secured by its full faith and credit which shall include the limited tax obli- gation of the County, within applicable constitutional and statu- tory limits, and its general funds. The County budget shall provide that if the pledged delinquent taxes and any other pledged amounts are not collected in sufficient amounts to meet the payments of the principal and interest due on these notes, the County, before paying any other budgeted amounts, will promptly advance from its general funds sufficient money to pay that principal and interest. If the proceeds of the delinquent taxes, pledged interest and administration fees and the 1983 Note Reserve Fund are not suf- ficient to pay the principal and interest when due, the County shall pay the same, as provided in this paragraph, and may there- after reimburse itself from the delinquent taxes collected. The County shall not have the power to levy any tax for the payment of the notes in excess of its constitutional or statutory limits. 307. Security for Renewal, Refunding or .Advance Refunding Notes. Renewal, refunding or advance refunding notes shall be secured by the same security securing the notes being renewed, refunded or advance refunded. The moneys pledged in Section 305 for the repayment of the notes are hereby re-pledged for repay- ment of the principal of and interest on any renewal, refunding or advance refunding notes issued pursuant to this Resolution. Furthermore, such renewal, refunding or advance refunding notes shall be a general obligation of the County, secured by its full faith and credit which shall include the limited tax obligation of the County, within applicable constitutional and statutory limits, all as more fully provided in Section 306 above. MOP 7 IV MISCELLANEOUS PROVISIONS 401. Expenses. The expenses of borrowing in connection with this issuance of notes shall be paid from the administration fees collected on the 1982 delinquent taxes, from any funds in the Fund not pledged to the repayment of these notes or from any funds in the 100% Tax Payment Fund not pledged to the repayment of any other notes. 402. Use of Delinquent Taxes After Sufficient Collection. After a sufficient sum has been set aside for the purposes set forth above, including the repayment of the notes and the interest and premium, if any, on the notes: (a) any further col- lection of the delinquent taxes may be used to pay any or all delinquent taxes for a year other than 1982 which are due and payable to the County, any school district, intermediate school district, community college district, city, township, special assessment or drainage district, or any other political unit for which delinquent tax payments are due on settlement day with the County Treasurer or any city or township treasurer, and (b) all income or interest earned by, or increment to, the 1983 Note Reserve Fund due to its investment or reinvestment shall be deposited in the Fund. 403. Application to MFC; Exemption. The County Treasurer is hereby authorized, if necessary, to make application to the Municipal Finance Commission on behalf of the County for an order permitting this County to make this borrowing and issue its General Obligation Limited Tax Notes, Series 1983, or, if possible, to obtain an exemption from such approval from the Michigan Department of Treasury. 404. Bond Counsel. The notes (and any renewal, refunding or advance refunding notes) shall be delivered with the unqualified opinion of bond counsel chosen by the Treasurer, approving the legality of the notes, which selection may, at the option of the Treasurer, be for one or more years. The cost of this legal opinion and the printing of the notes will be at the expense of the County, but the expenses will be paid, as provided in this Resolution, from the County's 100% Tax Payment Fund. 405. Complete Records. The County shall keep fulf aria com- plete records of all deposits to and withdrawals from each of the funds and accounts in the Fund and of all other transactions relating to, all investments of moneys in, and the interest and gain derived from such funds and accounts. 406. Chargebacks. Delinquent taxes not paid or recovered at or prior to the May 1985 tax sale shall be charged back to the local units in.such fashion as the Treasurer may determine, and the proceeds of such chargebacks shall be deposited into the Col- lection Account no later than September 1, 1985. 407. Investments. The County Treasurer is authorized to invest all moneys in the Delinquent Tax Revolving Fund in any one or more of the investments authorized as lawful investments for counties under Act No. 20 of the Michigan Public Acts of 1943, as amended. 408. Arbitrage Covenant. Notwithstanding any other provi- sion of this resolution or other resolutions adopted heretofore. the County hereby covenants with the purchaser (within the meaning of Sections 1.103-13, 1.103-14 and 1.103-15 of the Income Tax Regulations prescribed by the Commissioner of Internal Revenue) of the General Obligation Limited Tax Notes, Series 1983. that the County will make no use of the proceeds of the notes, which if such use had been reasonably expected on the date of issuance of the notes, would have caused the notes to be "arbitrage bonds." as defined in Section 103(c) of the Internal Revenue Code of 1954, as amended, and all rules and regulations relating thereto. 9 (Form of Coupon Note) APPENDIX A UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTY OF GENERAL OBLIGATION LIMITED TAX NOTE, SERIES 1983 Number KNOW ALL MEN BY THESE PRESENTS, that the County of Michigan ("County"), hereby acknowledges itself indebted and for value received, promises to pay to the bearer hereof the sum of DOLLARS on the first day of May, A.D., 19 , together with interest thereon from the date hereof until paid, at the rate of per centum ( %) per annum, payable on November 1, 1983, and thereafter semi-annually on the first days of May and November in each year. Both principal and interest are payable in lawful money of the United States of America at , upon presentation and surrender of this note and the coupons attached hereto as they severally mature. This note is one of a series of notes of like date and tenor, except as to maturity . numbered consecutively in the direct order of their maturities from 1 to • both inclu- sive, aggregating the principal sum of ($, ), issued under and pursuant to and in full conformity with the Constitution and Statutes of the State of Michigan and especially Act No. 206 of the Michigan Public Acts of 1893, as amended. The proceeds of this series of notes will be used to make payments to all taxing units in the County for the 1982 real property taxes returned to the County Treasurer as delinquent on or before March 1. 1983 and for the purpose of establishing a 1983 Note Reserve Fund in an amount of $ For the payment of the principal and interest on these notes. the following amounts are hereby pledged: (1) all of the col- lections of the 1982 real property taxes due and payable to taxing units in the County, including the County, which were out- standing and uncollected on March 1. 1983, together with all interest thereon; (2) all of the property tax administration fees on such delinquent taxes, once the expenses of borrowing have been paid; and (3) any amounts which are received by the County from the taxing units within the County because of the uncol- lectability of such delinquent taxes. In the event the foregoing amounts are insufficient for any reason to meet the prompt pay- ment of the principal and interest on these notes when due, the moneys in the 1983 Note Reserve Fund shall be used to make such payment. - In addition, this note is a general obligation of the County secured by its full faith and credit which shall include the lim- ited tax obligation of the County, within applicable constitu- tional and statutory limits, and its general funds. The County, however, does not have the power to levy any tax for the payment of these notes in excess of its constitutional or statutory limits. Notes maturing in the years of 1984 and 1985 shall not be subject to redemption prior to maturity. Notes maturing on May 1, 1986, may be redeemed on any interest payment date on or after May 1, 1985. at the option of the County Treasurer at par plus accrued interest to the redemption date. Notice of redemption shall be given at least thirty (30) days prior to the date fixed for redemption by publication in a paper circulated in the State of Michigan, which carries, as a part of its regular service, notices of sale of municipal bonds. Any defect in any notice shall not affect the validity of the redemp- tion proceedings. Notes so called for redemption shall not bear interest after the date fixed for redemption provided funds are on hand with a paying agent to redeem the same. It is hereby certified, recited and declared that all aats, conditions and things required to exist, happen and be performed precedent to and in the issuance of the notes of this series, exist, existed, have happened and have been performed in due time, form and manner as required by the Constitution arid Statutes of. the State of Michigan. IN WITNESS WHEREOF, the County of , Michigan, has caused this note to be signed in its name by its Treasurer and its corporate seal to be affixed hereto, and has caused the annexed interest coupons to be executed with the facsimile signa- ture of its Treasurer, all as of the first day of March, 1983. COUNTY OF By: Treasurer (SEAL) - 1 0 - (COUPON) Number On the first day of , A.D.. 19 , the County of , Michigan, will pay to the bearer hereof the sum shown hereon in lawful money of the United States of America at the • the same being the interest due on that day on its General Obligation Limited Tax Note, Series 1983 3 bearing the number, shown hereon. This coupon is payable only from the following sources: certain delinquent real property taxes, the interest thereon, a part of the property tax administration fees thereon, moneys on deposit in a certain Note Reserve Fund, and other amounts all as des- cribed in the Note to which this coupon pertains. This coupon is subject to the redemption provisions set forth in the Note to which this coupon pertains. (Facsimile) County Treasurer (Form of Fully Registered Note) APPENDIX B UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTY OF GENERAL OBLIGATION LIMITED TAX NOTE, SERIES 1983 Rate Maturity Date of Original Issue KNOW ALL MEN BY THESE PRESENTS, that the County of Michigan (the nCountyn), hereby acknowledges itself indebted, and for value received, promises to pay on the date specified above to or its registered assigns shown as the owner of record of this note on the applicable date of record the principal sum of Dollars, together with interest thereon at the rate per annum specified above payable on November 1, 1983, and semi-annually thereafter on the first day of May and November in each year. The date of record shall be October 1 with, respect to payments made on November 1, and April 1 with respect to payments made On May 1. This note is one of a series of notes of like date and tenor, except as to maturity numbered from 1 upwards, aggregating the principal sum of Dollars ($ ), issued under and pursuant to and in full conformity with the Constitution and Statutes of the State of Michigan and especially Act No. 206 of the Michigan Public Acts of 1893, as amended. The proceeds of this series of notes will be used to make payments to all taxing units in the County for the 1982 real property taxes returned to the County Treasurer as delinquent on or before March 1, 1983 and for the purpose of establishing a 1983 Note Reserve Fund in an amount of $ For the payment of the principal and interest on these notes, the following amounts are hereby pledged: (1) all of the col- lections of the 1982 real property taxes due and payable to taxing units in the County, including the County, which were out- standing and uncollected on March 1, 1983, together with all interest thereon; (2) all of the property tax administration fees on such delinquent taxes, once the expenses of borrowing have been paid; and (3) any amounts which are received by the County from the taxing units within the County because of the uncol- lectability of such delinquent taxes. In the event the foregoing amounts are insufficient for any reason to meet the prompt pay- ment of the principal and interest on these notes when due, the moneys in the 1983 Note Reserve Fund shall be used to make such payment. - 11 - In addition, this note is a general obligation of the County secured by its full faith and credit which shall include the lim- ited tax obligation of the County, within applicable constitu- tional and statutory limits, and its general funds. The County, however, does not have the power to levy any tax for the payment of these notes in excess of its constitutional or statutory limits. Notes maturing in the years of 1984 and 1985 shall not be subject to redemption prior to maturity. Notes maturing on May 1, 1986, may be redeemed on any interest payment date on or after May 1, 1985, at the option of the County Treasurer at par plus accrued interest to the redemption date. Notice of redemption shall be sent to the registered holder of each note being redeemed by first class mail at least thirty (30) days prior to the date fixed for redemption. Any defect in any notice shall not affect the validity of the redemption pro- ceedings. Notes so called for redemption shall not bear interest after the date fixed for redemption provided funds are on hand with a paying agent to redeem the same. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the notes of this series, exist, existed, have happened and have been performed in due time, form and manner as required by the Constitution and Statutes of the State of Michigan. IN WITNESS WHEREOF, the County of , Michigan, has caused this note to be executed in its name with the facsi- mile signature of its Treasurer and has caused a facsimile of its corporate seal to be affixed hereto, and has caused this note to be authenticated by the Note Registrar, as the County's authenti- cating agent, all as of the date set forth below. DATE: COUNTY OF By: rfacsimi1e1 Treasurer - 12 - NOTE REGISTRAR'S CERTIFICATE OF AUTHENTICATION This note is one of the series of notes designated " County General Obligation Limited Tax Notes, Series 1983." as Note Registrar and Authenticating Agent By Authorized Signature ASSIGNMENT For value received, the undersigned sells, assigns and transfers unto this note and all rights hereunder and hereby irrevocably appoints attorney to transfer this note on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of this note in every particular. - 13 - Mr. Chairperson, Ladies & Gentlemen: The resolutions I am offering are for the County of Oakland to borrow an amount not to exceed $80,000,000. to issue its delinquent tax notes. The notes are three year notes secured and paid for by the payment of the delin- quent real property taxes. The money borrowed is used to pay the schools, cities, townships and county immediately rather than waiting for the delinquent taxes to dribble in and be paid off over an extended period of time It is a beneficial service to the schools, cities and townships. This is the 11th year the county has borrowed and issued delinquent tax notes. Mr. Chairperson, on behalf of the Finance Committee, I move adoption of the resolutions.