HomeMy WebLinkAboutResolutions - 2011.03.24 - 16679MISCELLANEOUS RESOLUTION #11057 March 24, 2011
BY: Finance Committee, Thomas Middleton, Chairperson
IN RE: TREASURER'S OFFICE - AUTHORIZATION TO BORROW AGAINST
DELINQUENT 2010 REAL PROPERTY TAXES
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS, the Board of Commissioners of the County of Oakland (the "County") has
heretofore adopted a resolution establishing the Oakland County Delinquent Tax Revolving
Fund (the "Fund") pursuant to Section 87b of Act No. 206, Public Acts of Michigan, 1893, as
amended ("Act 206"); and
WHEREAS, the purpose of the Fund is to allow the Oakland County Treasurer (the "County
Treasurer") to pay from the Fund any or all delinquent real property taxes that are due and
payable to the County and any school district, intermediate school district, community college
district, city, township, special assessment district, the State of Michigan or any other political
unit for which delinquent tax payments are due; and
WHEREAS, it is hereby determined to be necessary for the County to borrow money and issue
its notes for the purposes authorized by Act 206, particularly Sections 87c, 87d and 87g thereof;
and
WHEREAS, it is estimated that the total amount of unpaid 2010 delinquent real property taxes
(the "delinquent taxes") outstanding on March 1, 2011, will be approximately $160,000,000,
exclusive of interest, fees and penalties.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the County of
Oakland, State of Michigan, as follows:
Authorization of Borrowing
1. Pursuant to and in accordance with the provisions of Act 206, Public Acts of
Michigan, 1893, as amended, and especially Sections 87c, 87d and 87g thereof, the County
shall borrow the sum of not to exceed fifty million dollars ($50,000,000) and issue its notes (the
"notes") therefor for the purpose of continuing the Fund for the 2010 tax year. The exact
amount to be borrowed shall not exceed the amount of delinquent taxes outstanding on
March 1, 2011, exclusive of interest, fees and penalties. The County Treasurer shall designate
the exact amount to be borrowed after the amount of the 2010 delinquent taxes outstanding on
March 1, 2011, or the portion of the 2010 delinquent taxes against which the County shall
borrow, has been determined.
FINANCE COMMITTEE
Motion carried unanimously on a roll call vote with Quarles absent.
Note Details
2. Pursuant to provisions of applicable law and an order of the County Treasurer,
which order is hereby authorized, the notes may be issued in one or more series; shall be
known as "General Obligation Limited Tax Notes, Series 2011" with a letter designation added
thereto if the notes are issued in more than one series; shall be in fully registered form in
denominations not exceeding the aggregate principal amounts for each maturity of the notes;
shall be sold for not less than 98% of the face amount of the notes; shall bear interest at fixed or
variable rates not to exceed the maximum interest rate permitted by applicable law; shall be
dated, payable as to interest and in principal amounts, be subject to redemption in whole or in
part prior to maturity, including any redemption premiums, and be subject to renewal, at such
times and in such amounts, all as shall be designated in the order of the County Treasurer.
Notes or portions of notes called for redemption shall not bear interest after the redemption
date, provided funds are on hand with the note registrar and paying agent to redeem the same.
Notice of redemption shall be given in the manner prescribed by the County Treasurer, including
the number of days' notice of redemption and whether such notice shall be written or published,
or both. If any notes of any series are to bear interest at a variable rate or rates, the County
Treasurer is hereby further authorized to establish by order, and in accordance with law, a
means by which interest on such notes may be set, reset or calculated prior to maturity,
provided that such rate or rates shall at no time be in excess of the maximum interest rate
permitted by applicable law. Such rates may be established by reference to the minimum rate
that would be necessary to sell the notes at par; by a formula that is determined with respect to
an index or indices of municipal obligations, reported prices or yields on obligations of the
United States or the prime rate or rates of a bank or banks selected by the County Treasurer; or
by any other method selected by the County Treasurer.
Payment of Principal and Interest
3. The principal of and interest on the notes shall be payable in lawful money of the
United States from such funds and accounts as provided herein. Principal shall be payable
upon presentation and surrender of the notes to the note registrar and paying agent when and
as the same shall become due, whether at maturity or earlier redemption. Interest shall be paid
to the owner shown as the registered owner on the registration books at the close of business
on such date prior to the date such interest payment is due, as is provided in the order of the
County Treasurer. Interest on the notes shall be paid when due by check or draft drawn upon
and mailed by the note registrar and paying agent to the registered owner at the registered
address, or by such other method as determined by the County Treasurer.
Note Registrar and Paying Agent
4. The County Treasurer shall designate, and may enter into an agreement with, a
note registrar and paying agent for each series of notes that shall be the County Treasurer or a
bank or trust company that is qualified to act in such capacity under the laws of the United
States of America or the State of Michigan. The County Treasurer may from time to time
designate a similarly qualified successor note registrar and paying agent. Alternatively, the
County Treasurer may serve as note registrar and paying agent if so designated by written
order of the County Treasurer.
Disposition of Note Proceeds
5. The proceeds of the sale of the notes shall be deposited into a separate account
in the Fund (the "2011 Account") and shall be used to continue the Fund. The County
Treasurer shall pay therefrom and from unpledged funds in the Fund, uncommitted funds in the
County General Fund and/or any other legally available funds, if the notes are sold at a
discount, the full amount of the delinquent tax roll against which the County has borrowed,
delivered as uncollected by any tax collector in the County and that is outstanding and unpaid
on or after March 1, 2011, in accordance with the provisions of Act 206. If the notes are sold at
a premium, the County Treasurer shall determine what portion of the premium, if any, shall be
deposited in the 2011 Collection Account established in Section 6 hereof.
2011 Collection Account
6. There is hereby established as part of the Fund an account (hereby designated
the "2011 Collection Account") into which account the County Treasurer shall place delinquent
taxes against which the County has borrowed, and interest thereon, collected on and after
March 1, 2011, all County property tax administration fees on such delinquent taxes, after
expenses of issuance of the notes have been paid, any premium as determined pursuant to
Section 5 hereof, and any amounts received by the County Treasurer from the County, the
State of Michigan and any taxing unit within the County, because of the uncollectibility of such
delinquent taxes. The foregoing are hereby established as funds pledged to note repayment.
The County Treasurer shall designate the delinquent taxes against which the County shall
borrow for each series of notes.
Note Reserve Fund
7. There is hereby authorized to be established by the County Treasurer a note
reserve fund for the notes (the "2011 Note Reserve Fund") if the County Treasurer deems it to
be reasonably required as a reserve and advisable in selling the notes at public or private sale.
The County Treasurer is authorized to deposit in the 2011 Note Reserve Fund from proceeds of
the sale of the notes, unpledged moneys in the Fund, uncommitted funds in the County General
Fund and/or any other legally available funds, an amount not exceeding ten percent (10%) of
the face amount of the notes.
Security for Payment of Notes
8. All of the moneys in the 2011 Collection Account and the 2011 Note Reserve
Fund, if established, and all interest earned thereon, relating to a series of notes are hereby
pledged equally and ratably as to such series to the payment of the principal of and interest on
the notes and shall be used solely for that purpose until such principal and interest have been
paid in full. When moneys in the 2011 Note Reserve Fund, if established, are sufficient to pay
the outstanding principal of the notes and the interest accrued thereon such moneys may be
used to retire the notes. If more than one series of notes is issued, the County Treasurer by
order shall establish the priority of the funds pledged for payment of each such series. In such
case the County Treasurer may establish sub-accounts in the various funds and accounts
established pursuant to the terms of this resolution as may be necessary or appropriate.
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Additional Security
9. Each series of notes, in addition, shall be a general obligation of the County,
secured by its full faith and credit, which shall include the County's limited tax obligation, within
applicable constitutional and statutory 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 principal and interest due on each series of notes,
the County, before paying any other budgeted amounts, will promptly advance from its general
funds sufficient moneys to pay that principal and interest. The County shall not have the power
to impose taxes for payment of the notes in excess of constitutional or statutory limitations. If
moneys in the 2011 Collection Account and the 2011 Note Reserve Fund, if established, are not
sufficient to pay the principal of and interest on the notes, when due, the County shall pay the
same in accordance with this section, and may thereafter reimburse itself from the delinquent
taxes collected.
Release of Pledge of 2011 Collection Account
10. Upon the investment of moneys in the 2011 Collection Account in direct non-
callable obligations of the United States of America in amounts and with maturities that are
sufficient to pay in full the principal of and interest on the notes when due, any moneys in the
2011 Collection Account thereafter remaining may be released from such pledge created
pursuant to Section 8 hereof and may be used to pay any or all delinquent real property taxes
that are due the County and any school district, intermediate school district, community college
district, city, township, special assessment district, the State of Michigan or any other political
unit to which delinquent tax payments are due for any year or for any other purpose permitted
by law.
Sale of Notes
11. The County Treasurer is hereby authorized to offer the notes at public or private
sale as determined by order of the County Treasurer and to do all things necessary to effectuate
the sale, delivery, transfer and exchange of the notes in accordance with the provisions of this
resolution. Notes of one series may be offered for sale and sold separately from notes of
another series. If the notes are to be sold publicly, sealed proposals for the purchase of the
notes shall be received by the County Treasurer for such public sale to be held at such time as
shall be determined by the County Treasurer and notice thereof shall be published in
accordance with law, once in The Bond Buyer or the Detroit Legal News, both of which are
hereby designated as being a publication printed in the English language and circulated in this
State that carries as a part of its regular service, notices of sale of municipal bonds. Such
notice shall be in the form prescribed by the County Treasurer.
The County Treasurer is hereby authorized to cause the preparation of an official
statement for the notes for the purpose of enabling compliance with SEC Rule 15c2-12 (the
"Rule") and to do all other things necessary to enable compliance with the Rule. After the
award of the notes, the County will provide copies of a final official statement (as defined in
paragraph (e)(3) of the Rule) on a timely basis and in reasonable quantity as requested by the
successful bidder or bidders to enable such successful bidder or bidders to comply with
paragraph (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board,
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Continuing Disclosure
12. The County Treasurer is hereby authorized to execute and deliver in the name
and on behalf of the County (i) a certificate of the County to comply with the requirements for a
continuing disclosure undertaking of the County pursuant to subsection (b)(5) or (d)(2) of the
Rule, as applicable, and (ii) amendments to such certificate from time to time in accordance with
the terms of such certificate (the certificate and any amendments thereto are collectively
referred to herein as the "Continuing Disclosure Certificate"). The County hereby covenants
and agrees that it will comply with and carry out all of the provisions of the Continuing
Disclosure Certificate. The remedies for any failure of the County to comply with and carry out
the provisions of the Continuing Disclosure Certificate shall be as set forth therein.
Execution and Delivery of Notes
13. The County Treasurer is hereby authorized and directed to execute the notes for
the County by manual or facsimile signature and the County Treasurer shall cause the County
seal or a facsimile thereof to be impressed or imprinted on the notes. Unless the County
Treasurer shall specify otherwise in writing, fully registered notes shall be authenticated by the
manual signature of the note registrar and paying agent. After the notes have been executed
and authenticated, if applicable, for delivery to the original purchaser thereof, the County
Treasurer shall deliver the notes to the purchaser or purchasers thereof upon receipt of the
purchase price. Additional notes bearing the manual or facsimile signature of the County
Treasurer and upon which the seal of the County or a facsimile thereof is impressed or
imprinted may be delivered to the note registrar and paying agent for authentication, if
applicable, and delivery in connection with the exchange or transfer of fully registered notes.
The note registrar and paying agent shall indicate on each note that it authenticates the date of
its authentication. The notes shall be delivered with the approving legal opinion of Dickinson
Wright PLLC, attorneys of Detroit, Michigan. Municipal Financial Consultants Incorporated,
Grosse Pointe Farms, Michigan, is hereby retained to act as financial consultant and advisor to
the County in connection with the sale and delivery of the Notes.
Exchange and Transfer of Fully Registered Notes
14. Any fully registered note, upon surrender thereof to the note registrar and paying
agent with a written instrument of transfer satisfactory to the note registrar and paying agent
duly executed by the registered owner or his or her duly authorized attorney, at the option of the
registered owner thereof, may be exchanged for notes of any other authorized denominations of
the same aggregate principal amount and maturity date and bearing the same rate of interest as
the surrendered note.
Each note shall be transferable only upon the books of the County, which shall be kept
for that purpose by the note registrar and paying agent, upon surrender of such note together
with a written instrument of transfer satisfactory to the note registrar and paying agent duly
executed by the registered owner or his or her duly authorized attorney.
Upon the exchange or transfer of any note, the note registrar and paying agent on behalf
of the County shall cancel the surrendered note and shall authenticate, if applicable, and deliver
to the transferee a new note or notes of any authorized denomination of the same aggregate
principal amount and maturity date and bearing the same rate of interest as the surrendered
note. If, at the time the note registrar and paying agent authenticates, if applicable, and delivers
a new note pursuant to this section, payment of interest on the notes is in default, the note
registrar and paying agent shall endorse upon the new note the following: "Payment of interest
on this note is in default. The last date to which interest has been paid is [place date]."
The County and the note registrar and paying agent may deem and treat the person in
whose name any note shall be registered upon the books of the County as the absolute owner
of such note, whether such note shall be overdue or not, for the purpose of receiving payment of
the principal of and interest on such note and for all other purposes, and all payments made to
any such registered owner, or upon his or her order, in accordance with the provisions of
Section 3 hereof shall be valid and effectual to satisfy and discharge the liability upon such note
to the extent of the sum or sums so paid, and neither the County nor the note registrar and
paying agent shall be affected by any notice to the contrary. The County agrees to indemnify
and save the note registrar and paying agent harmless from and against any and all loss, cost,
charge, expense, judgment or liability incurred by it, acting in good faith and without negligence
hereunder, in so treating such registered owner.
For every exchange or transfer of notes, the County or the note registrar and paying
agent may make a charge sufficient to reimburse it for any tax, fee or other governmental
charge required to be paid with respect to such exchange or transfer, which sum or sums shall
be paid by the person requesting such exchange or transfer as a condition precedent to the
exercise of the privilege of making such exchange or transfer.
The note registrar and paying agent shall not be required to transfer or exchange notes
or portions of notes that have been selected for redemption.
Book Entry System
15. At the option of the County Treasurer and notwithstanding any provisions of this
resolution to the contrary, the County Treasurer is hereby authorized to enter into an agreement
with a custodian or trustee for the purpose of establishing a "book entry" system for registration
of notes to be fully registered. Pursuant to the provisions of such agreement, the notes may be
registered in the name of the custodian or trustee for the benefit of other persons or entities.
Such agreement shall provide for the keeping of accurate records and prompt transfer of funds
by the custodian or trustee on behalf of such persons or entities. The agreement may provide
for the issuance by the custodian or trustee of certificates evidencing beneficial ownership of the
notes by such persons or entities. For the purpose of payment of the principal of and interest on
the notes, the County may deem payment of such principal and interest, whether overdue or
not, to the custodian or trustee as payment to the absolute owner of such note. Pursuant to
provisions of such agreement, the book entry system for the notes may be used for registration
of all or a portion of the notes and such system may be discontinued at any time by the County.
The note registrar and paying agent for the notes may act as custodian or trustee for such
purposes.
Issuance Expenses
16. Expenses incurred in connection with the issuance of the notes, including without
limitation any premiums for any insurance obtained for the notes, note rating agency fees, travel
and printing expenses, fees for agreements for lines of credit, letters of credit, commitments to
purchase the notes, remarketing agreements, reimbursement agreements, purchase or sales
agreements or commitments, or agreements to provide security to assure timely payment of the
notes, fees for the setting of interest rates on the notes and bond counsel, financial advisor,
paying agent and registrar fees, all of which are hereby authorized, shall be paid by the County
Treasurer from County property tax administration fees on the delinquent taxes, from any other
moneys in the Fund not pledged to the repayment of notes and general funds of the County that
are hereby authorized to be expended for that purpose.
Replacement of Notes
17. Upon receipt by the County Treasurer of satisfactory evidence that any
outstanding note has been mutilated, destroyed, lost or stolen, and of security or indemnity
complying with applicable law and satisfactory to the County Treasurer, the County Treasurer
may execute or authorize the imprinting of the County Treasurer's facsimile signature thereon
and thereupon, and if applicable, a note registrar or paying agent shall authenticate and the
County shall deliver a new note of like tenor as the note mutilated, destroyed, lost or stolen.
Such new note shall be issued and delivered in exchange and substitution for, and upon
surrender and cancellation of, the mutilated note or in lieu of and in substitution for the note so
destroyed, lost or stolen in compliance with applicable law. For the replacement of
authenticated notes, the note registrar and paying agent shall, for each new note authenticated
and delivered as provided above, require the payment of expenses, including counsel fees,
which may be incurred by the note registrar and paying agent and the County in the premises.
Any note issued under the provisions of this Section in lieu of any note alleged to be destroyed,
lost or stolen shall be on an equal basis with the note in substitution for which such note was
issued.
Chargebacks
18. For any principal payment date of the notes on or after January 1, 2014, the
delinquent taxes on property foreclosed and sold pursuant to the provisions of Act 206 and
against which the County has borrowed shall, if necessary to ensure full and timely payment of
principal of and interest on the notes when due, be charged back to the taxing jurisdictions in
such manner as determined by the County Treasurer. The proceeds of such chargebacks shall
be deposited in the 2011 Collection Account as security for payment of the notes as described
in Section 8 hereof. The provisions of this section shall not limit the authority of the County
Treasurer under the laws of the State of Michigan to charge back delinquent taxes under other
circumstances or at other times.
Purchase of Notes by County
19. All or any portion of the notes may be purchased or otherwise acquired by the
County if the County Treasurer by order deems such purchase or acquisition to be in the best
interest of the County. In such case, the County Treasurer is authorized to take such actions to
effectuate the purchase or acquisition, including without limitation entering into an agreement to
purchase or repurchase the notes. The purchase or other acquisition of notes by or on behalf of
the County does not cancel, extinguish or otherwise affect the notes and the notes shall be
treated as outstanding notes for all purposes of this resolution until paid in full.
Issuance of Refunding Notes
20. The County shall refund all or part of the notes authorized hereunder and/or
notes previously issued by the County to continue the Fund for prior tax years if and as
authorized by order of the County Treasurer through the issuance of refunding notes (the
"Refunding Notes") in an amount to be determined by order of the County Treasurer. Proceeds
of the Refunding Notes may be used to redeem such notes and to pay issuance expenses of
the Refunding Notes as authorized and described in Section 16 hereof. The County Treasurer
shall have all the authority with respect to the Refunding Notes as is granted to the County
Treasurer with respect to the notes by the other Sections hereof, including the authority to select
a note registrar and paying agent, to apply to the Michigan Department of Treasury for approval
to issue the Refunding Notes, if necessary, to cause the preparation of an official statement and
to do all other things necessary to sell, execute and deliver the Refunding Notes. The Refunding
Notes shall contain the provisions, shall be payable as to principal and interest and shall be
secured as set forth herein and as further ordered by the County Treasurer. The Refunding
Notes may be sold as a separate issue or may be combined in a single issue with other
obligations of the County issued pursuant to the provisions of Act 206 as shall be determined by
the County Treasurer. The County Treasurer is authorized to prescribe the form of Refunding
Note and the form of notice of sale, if any, for the sale of Refunding Notes.
Form of Notes
21. The notes shall be in the form approved by the County Treasurer, which approval
shall be evidenced by the County Treasurer's execution thereof.
Chairperson, on behalf of the Finance Committee, I move adoption of the foregoing
resolution.
FINANCE COMMITTEE
Resolution #11057 March 24, 2011
Moved by Quarles supported by McGillivray the resolutions (with fiscal notes attached) on the Consent
Agenda be adopted (with accompanying reports being accepted).
AYES: Dwyer, Gershenson, Gingell, Gosselin, Greimel, Hatchett, Hoffman, Jackson, Long,
McGillivray, Middleton, Nash, Nuccio, Potts, Quarles, Runestad, Scott, Taub, Weipert,
Woodward, Bosnic, Covey, Crawford. (23)
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).
"M FOEr E • OING RESOLUTION li r PURSUANT TO 1973 PA 139
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Bill Bullard Jr., 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 24,
2011, 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 Oakland at
Pontiac, Michigan this 24th day of March, 2011.
Pj-e-E e L12-12-et-z-,
Bill Bullard Jr., Oakland County