HomeMy WebLinkAboutResolutions - 1988.02.25 - 17415February 25 MISCELLANEOUS RESOLUTION 4 83031 , 198U
BY: FINANCE COMMITTEE
RE: TREASURER'S OFFICE -
AUTHORIZATION TO BORROW AGAINST DELINQUENT 1987 TAXES
TO: THE OAKLAND COUNTY BOARD OF COMMISSIONERS
MR. CHAIRMAN, LADIES AND GENTLEMEN:
1988 BORROWING RESOLUTION
(1987 DELINQUENT TAXES)
WHEREAS, ad valorem real property taxes are imposed by
the County and the local taxing units within the County on July
1 and/or December 1 of each year; and
WHEREAS, a certain portion of these taxes remain
unpaid and uncollected on March 1 of the year following
assessment, at which time they are returned delinquent to the
County's Treasurer (the "Treasurer") who is to collect all
delinquent taxes, interest and property tax administration fees
which would otherwise be payable to the local taxing units
within the County; and
WHEREAS, the statutes of the State of Michigan
authorize the County to establish a fund, in whole or in part
from borrowed proceeds, to pay local taxing units within the
County their respective shares of delinquent ad valorem real
property taxes, in anticipation of the collection of those
taxes by the Treasurer; and
WHEREAS, the Board of Commissioners of the County (the
"Board") has adopted a resolution establishing the County's
Delinquent Tax Revolving Fund, pursuant to Section 87b of Act
No. 206, Michigan Public Acts of 1893, as amended ("Act 206");
and
WHEREAS, Revolving Fund has been established to
provide a source of monies from which the Treasurer may pay any
or all delinquent ad valorem real property taxes which are due
the County, and any city, township, school district,
intermediate school district, community college district,
special assessment district, drainage district, or other
political unit within the geographical boundaries of the County
participating in the County's Revolving Fund program pursuant
to Act 206 ("local units"); and
WHEREAS, the Treasurer is authorized under Act 206,
and has been directed by the Board, to make such payments with
respect to delinquent ad valorem real property taxes (including
the property tax administration fees assessed under subsection
(6) of Section 44 of Act 206) owed in 1987 to the County and
the local units (collectively, the "taxing units") which will
have remained unpaid on March 1, 1988 (the "Delinquent Taxes");
and
WHEREAS, the Board of has determined that in order to
raise sufficient monies to adequately fund the Revolving Fund
the County must issue its 1988 General Obligation Limited Tax
Notes, in one or more series, in accordance with Sections 87c,
87d, 87e, 87f, 87g and 89 of Act 206 and on the terms conditions
set forth below; and
THEREFORE, IT IS RESOLVED BY THE BOARD AS FOLLOwS:
GENERAL PROVISIONS
101. Establishment of 1988 Revolving Fund. In antici-
pation of the program addressed in this Resolution and in
accordance with Act 206, the County hereby establishes a 1988
Delinquent Tax Revolving Fund (the "Revolving Fund"), as a
separate and segregated fund within the existing Delinquent Tax
Revolving Fund of the County previously established by the
Board of Commissioners pursuant to Section 87b of Act 206.
102. Issuance of Notes. The County shall issue its
1988 General Obligation Limited Tax Notes in one or more series
(the "Notes"), in accordance with this Resolution and Sections
87c, 87d, 87e, 87f, 87g and 89 of Act 206, payable in whole or
in part from the Delinquent Taxes and/or from the other sources
specified below.
103. Aggregate Amount of Notes. (a) The Notes shall
be issued in an aggregate amount to be determined by the
Treasurer in accordance with this Section,
(b) The aggregate amount of the Notes shall not be
less than the amount by which the actual or estimated
Delinquent Taxes .exceeds (i) the County's participating share
of Delinquent Taxes and (ii) any sums otherwise available to
fund the Tax Payment Account established under Section 702
(including any monies held in respect of Section 704(c)).
(c) The aggregate amount of the Notes shall not be
greater than the sum of (i) the actual or estimated amount of
the Delinquent Taxes pledged to the payment of debt service on
the Notes, plus (ii) the amount determined by the Treasurer to
be be allocated to a reserve fund not to exceed the lesser of
(A) the amount reasonably required for the Notes secured by the
reserve fund, (B) 10% of the amount of such Notes, (C) the
maximum amount of annual debt service on such Notes, or (D)
125% of average annual debt service on such Notes.
(d) The aggregate amount of the Notes shall be
designated by the Treasurer by written order after (i) the
amount of the Delinquent Taxes, or the amount of Delinquent
Taxes to be funded by the issuance of the Notes, has been
estimated or determined, and (ii) the amount of the reasonably
required reserve fund has been calculated. Delinquent Taxes
shall be estimated based on delinquencies experienced during
the past three fiscal years and on demographic and economic
data relevant to the current tax year, and shall be determined
based on certification from each of the taxing units. The
amount of the reasonably required reserve fund shall be
calculated pursuant to such analyses and certificates as the
Treasurer may request.
104. Proceeds. If the Notes are issued and sold
before the Treasurer has received certification from the taxing
units of the amount of the Delinquent Taxes and if such
certification is not reasonably anticipated to occur to allow
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distribution of the proceeds of the Notes within 20 days after
the date of issue, the proceeds of the Notes shall be deposited
in the County's 1988 Delinquent Tax Project Account and
thereafter used to fund the whole or a part of the County's
1988 Tax Payment Account, 1988 Note Reserve Account and/or 1988
Note Payment Account, subject to and in accordance with Article
VII. If the Notes are issued and sold on or after such time,
the proceeds of the Notes shall be de7psits ,d directly into the
County's 1988 Tax Payment Account, 1988 Note Reserve Account
and/or 1988 Note Payment Account, as provided in Article VII.
II
FIXED MATURITY NOTES
201. At the option of the Treasurer, exercisable by
written order, Notes may be issued in accordance with this
Article II. All reference to "Notes" in Article II refers only
to Notes issued pursuant to Article II, unless otherwise
specified,
202. Date. The Notes shall be dated as of the date
of issue or as of such earlier date specified by written order
of the Treasurer.
203. Maturity and Amounts. The first maturity of the
Notes shall be determined by the Treasurer pursuant to written
order, but shall not be later than one year after the date of
issuance. Later maturities of the Notes shall be on the first
anniversary of the preceeding maturity or on such earlier date
as the Treasurer may specify by written order. The Notes shall
be structured with the number of maturities determined by the
Treasurer to be necessary or appropriate, and the last maturity
shall be scheduled for no later than the fourth anniversary of
the date of issue. The amount of each maturity shall be set by
the Treasurer when the amount of estimated Delinquent Taxes is
determined by the Treasurer or when a reliable estimate of the
Delinquent Taxes is available to the Treasurer. In determining
the exact amount of each maturity the Treasurer shall consider
the schedule of delinquent tax collections prepared for the tax
years 1984, 1985, 1986 and 1987, and the corollary schedule
setting forth the anticipated rate of collection of those
Delinquent Taxes which are pledged to the repayment of the
Notes. The amount of each maturity and the scheduled maturity
dates of the Notes shall be established to take into account
the dates on which the Treasurer reasonably anticipates the
collection of such Delinquent Taxes and shall allow for no more
than a 10% variance between the debt service payable on each
maturity date and the anticipated amount of pledged monies
available on such maturity date to make payment of such debt
service.
204. Interest and Date of Record. (a) Except as
otherwise provided in this subsection (a), Notes shall bear
interest payable semi—annually, with the first interest payment
to be payable (i) on the first date, after issuance,
corresponding to the day and month on which the maturity of
such Notes falls or (ii) if the Treasurer so orders, six months
before such date. In the event (i) any maturity of the Notes
arises either less than six months before the suceeding
maturity date or less than six months after the preceeding
maturity date and (ii) the Treasurer so orders in writing,
interest on the Notes shall be payable on such succeeding or
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preceeding maturity date. If the Notes are sold with a
variable rate feature as provided in Article IV below, the
Notes may, pursuant to written order of the Treasurer, bear
interest weekly, monthly, quarterly or on any put date, or any
combination of the foregoing, as provided by written order of
the Treasurer.
(b) Interest shall not exceed the maximum rate
permitted by law.
(c) Interest shall be mailed by first class mail to
the registered owner of each Note as of the applicable date of
record, provided, however, that the Treasurer may agree with
the Registrar (as defined below) on a different method of
payment.
(d) The date of record shall be not fewer than 14 nor
more than 31 days before the date of payment, as designated by
the Treasurer prior to the sale of the Notes.
205. Note Form. The form of Note shall be consistent
with the prescriptions of this Resolution and shall reflect all
material terms of the Notes. Unless the Treasurer shall by
written order specify the contrary, the Notes shall be issued
in fully registered form both as to principal and interest,
registrable upon the books of a note registrar (the
"Registrar") to be named by the Treasurer. If the Notes are
issued in bearer form the Treasurer shall appoint a paying
agent (the "Paying Agent"). (The Registrar or Paying Agent so
named may be any bank or trust company or other entity,
including the County, offering the necessary services
pertaining to the registration and transfer of negotiable
securities.)
206. Denominations and Numbers. The Notes shall be
issued in one or more denomination or denominations of $5,000
each or any integral multiple of $5,000 not in excess of any
maturity, as determined by the Treasurer, and shall be numbered
from one upwards, regardless of maturity, in such order as the
Registrar shall determine.
207. Transfer or Exchange of Notes. (a) Notes issued
in registered form shall be transferable on a note register
maintained with respect to the Notes upon surrender of the
transferred Note, together with an assignment executed by the
registered owner or his or her duly authorized attorney -in-fact
in form satisfactory to the Registrar. Upon receipt of a
properly assigned Note the Registrar shall authenticate and
deliver a new Note or Notes in equal aggregate principal amount
and like interest rate and maturity to the designated
transferee or transferees.
(b) Notes may likewise be exchanged for one or more
other Notes with the same interest rate and maturity in
authorized denominations aggregating the same principal amount
as the Note or Notes being exchanged, upon surrender of the
Note or Notes and the submission of written instructions to the
Registrar or, in the case of bearer Notes, to the Paying Agent,
Upon receipt of a Note with proper written instructions the
Registrar or Paying Agent shall authenticate and deliver a new
Note or Notes to the owner thereof or to owner's attorney-in-
fact.
(c) Any service charge made by the Registrar or
Paying Agent for any such registration, transfer or exchange
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shall be paid for by the County as an expense of borrowing,
unless otherwise agreed by the Treasurer and the Registrar or
Paying Agent. The Registrar or Paying Agent may, however,
require payment by a noteholder of a sum sufficient to cover
any tax or other governmental charge payable in connection with
any such registration, transfer or exchange.
208. Book Entry Depository Trust. At the option of
the Treasurer and notwithstanding any contrary provision of
Section 212, the Notes may be deposited, in whole or in part,
with a depository trustee designated by the Treasurer who shall
transfer ownership of interests in the Notes by book entry and
who shall issue depository trust receipts or acknowledgments to
owners of interests in the Notes, Such book entry depository
trust arrangement, and the form of depository trust receipts or
acknowledgments, shall be as determined by the Treasurer after
consultation with the depository trustee. The Treasurer is
authorized to enter into any depository trust agreement on
behalf of the County upon such terms and conditions as the
Treasurer shall deem appropriate and not otherwise prohibited
by the terms of this Resolution. The depository trustee may be
the same as the Registrar otherwise named by the Treasurer, and
the Notes may be transferred in part by depository trust and in
part by transfer of physical certificates as the Treasurer may
determine.
209. Redemption. (a) Subject to the authority
granted the Treasurer pursuant to subsections (c) and (d), the
Notes or any maturity or maturities of the Notes shall be
subject to redemption prior to maturity on the terms set forth
in subsection (b) below.
(b) Notes scheduled to mature after the first
anniversary of the date of issue shall be subject to redemption
on or after the first interest payment date after such
anniversary.
(c) If the Treasurer shall determine that in order to
enhance the marketability of the Notes or to reduce the
interest rate to be offered by perspective purchasers on any
maturity of the Notes, the Treasurer may, by written order
prior to the issuance of such Notes, (i) designate some or all
of the Notes as non-callable, regardless of their maturity
date, and/or (ii) delay the first date on which the redemption
of callable Notes would otherwise be authorized under
subsection (b) above.
(d) In the case of any Notes subject to Section 602
and notwithstanding any contrary provision of subsections (b)
or (c) above, the Treasurer is directed to structure the
redemption provisions of the Notes in a manner necessary to
assure the availability under applicable law of (i) a temporary
period for the investment of Note proceeds or (ii) any
available exemption from arbitrage rebate rules with respect to
any of the gross proceeds of the Notes.
(e) Notes of any maturity subject to redemption may
be redeemed before their scheduled maturity date, in whole or
in part, on any permitted redemption date or dates, subject to
the written order of the Treasurer. Notes called for
redemption shall be redeemed at par, plus accrued interest to
the redemption date, plus, if the Treasurer so orders, a
premium of not more than 1%. Redemption may be made by lot or
pro rata, as shall be determined by the Treasurer.
(f) With respect to partial redemptions, any portion
of a Note outstanding in a denomination larger than the minimum
authorized denomination may be redeemed, provided such portion
as well as the amount not being redeemed constitute authorized
denominations. In the event less than the entire principal
amount of a Note is called for redemption, the Registrar or
Paying Agent shall, upon surrender olE the Note by the owner
thereof, authenticate and deliver to the owner a new Note in
the principal amount of the principal portion not redeemed.
(g) Notice of redemption shall be by first class mail
30 days prior to the date fixed for redemption, which notice
shall fix the date of record with respect to the redemption if
different than otherwise provided in this Resolution. Any
defect in any notice shall not affect the validity of the
redemption 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.
210, Discount, At the option of the Treasurer, the
Notes may be offered for sale at a discount not to exceed 2%.
211. Public or Private Sale. The Treasurer may, at
the Treasurer's option, conduct a public sale of the Notes
after which sale the Treasurer shall either award the Notes to
the lowest bidder or reject all bids. The conditions of sale
shall be as specified in a published Notice of Sale prepared by
the Treasurer announcing the principal terms of the Notes and
the offering. Alternatively, the Treasurer may, at the
Treasurer's option, negotiate a private sale of the Notes as
provided in Act 206. If required by law or if otherwise
determined by the Treasurer to be in the best interest of the
County, (a) the Notes shall be rated by a national rating
agency selected by the Treasurer, (b) a good faith deposit
shall be required of the winning bidder, and/or (c) CUSIP
numbers shall be assigned to the Notes. If a public sale is
conducted or if otherwise required by law or the purchaser of
the Notes, the Treasurer shall prepare or cause to be prepared
and disseminated an offering memorandum or official statement
containing all material terms of the offer and sale of the
Notes.
212. Execution and Delivery. The Treasurer is
authorized and directed to execute the Notes on behalf of the
County by manual or facsimile signature, provided that if the
facsimile signature is used the Notes shall be authenticated by
the Registrar or Tender Agent. The Notes shall be sealed with
the County seal or, if permitted by law, imprinted with a
facsimile of such seal. The Treasurer is authorized and
directed to then deliver the Notes to the purchaser thereof
upon receipt of the purchase price, which delivery shall be
made in the discretion of the Treasurer at one time or in parts
at various times. The Notes shall be delivered at the expense
of the County in such city or cities as may be designated by
the Treasurer.
213. Renewal, Refunding or Advance Refunding Notes,
If at any time it appears to be in the best interests of the
County, the Treasurer, by written order, may authorize the
issuance of renewal, refunding or advance refunding Notes. The
terms of such Notes, and the procedures incidental to their
issuance, shall be set subject to Section 309,
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III
SHORT TERM RENEWABLE NOTES
301. At the option of the Treasurer, exercisable by
written order, Notes may be issued in accordance with this
Article III, All references to "Notes" in Article III refer
only to Notes issued pursuant to Article III, unless otherwise
specified,
302. Date and Maturity. The Notes shall be dated as
of their date of issuance or any prior date selected by the
Treasurer and shall mature on such date or dates not exceeding
one year from the date of their issuance as may be specified by
written order of the Treasurer.
303. Interest and Date of Record. The Notes shall
bear interest payable at maturity at such rate or rates as may
be determined by the Treasurer not exceeding the maximum rate
of interest permitted by law on the date the Notes are issued.
The date of record shall be not fewer than two nor more than 31
days before the date of payment, as designated by the Treasurer
prior to the sale of the Notes.
304. Note Form, The form of Note shall be consistent
with the prescriptions of this Resolution and shall reflect all
material terms of the Notes. The Notes shall, in the discretion
of the Treasurer and consistent with Section 205, either be
payable to bearer or be issued in registered form. If issued
in registered form, the Notes may be constituted as book-entry
securities consistent with Section 208, notwithstanding any
contrary provision of Section 308.
305. Denomination and Numbers. The Notes shall be
issued in one or more denomination or denominations, as
determined by the Treasurer. The Notes shall be numbered from
one upwards, in such order as the Treasurer determines.
306. Redemption. The Notes shall not be subject to
redemption prior to maturity,
307. Sale of Notes. The authority and obligations of
the Treasurer set forth in Sections 210 and 211 respecting
Fixed Maturity Notes shall apply also to Notes issued under
Article III.
308. Execution and Delivery, The authority and
obligations of the Treasurer set forth in Section 212
respecting Fixed Maturity Notes shall also apply to Notes
issued under Article III.
309. Renewal or Refunding Notes. (a) The Treasurer
may by written order authorize the issuance of renewal or
refunding Notes (collectively, "Renewal Notes"). Renewal Notes
shall be sold and the proceeds applied to the payment of the
principal of the Notes to be renewed. The maturities and
repayment terms of the Renewal Notes shall be set by written
order of the Treasurer.
(b) In the order authorizing Renewal Notes, the
Treasurer shall specify whether the Notes shall be issued in
accordance with this Article III, in which event the provisions
of Article III shall govern the issuance of the Notes, or
whether the Notes shall be issued in accordance with Article
II, in which event the provisions of Article II shall govern
the issuance of the Notes, prcvided that, if Renewal Notes are
to be issued in accordance with Article II, the order must
provide for and shall govern with respect to:
(i) the aggregate amount of the Notes;
(ii) the date of the Notes;
(iii) the denomination of the Notes;
(iv) interest payment dates, provided that
interest shall be payable in accordance with Section 204 or
Section 303; and
(v) whether some or all of the Notes shall be
subject to redemption and, if so, the terms thereof.
(c) Renewal Notes need not be approved by prior order
of the Department of Treasury unless so required by such
Department as provided by law.
IV
VARIABLE INTEREST RATE
401. Variable Rate Option. At the option of the
Treasurer, exercisable by written order, the Notes, whether
issued pursuant to Article II or Article III, may be issued
with a variable interest rate, provided that the rate shall not
exceed the maximum rate of interest permitted by law.
402. Determination of Rate, The order of the
Treasurer shall provide how often the variable interest rate
shall be subject to recalculation, the formula or procedure for
determining the variable interest rate, and whether and on what
terms a fixed rate of interest may be converted to or from a
variable rate of interest. Such formula or procedure shall be
as determined by the Treasurer but shall be based upon any one
or more of the following indices:
(i) Publicly reported prices or yields
obligations of the United States of America;
(ii) An index of municipal obligations periodically
reported by a nationally recognized source;
(iii) The prime lending rate from time to time set
by any bank or trust company in the United States with
unimpaired capital and surplus exceeding $40,000,000;
(iv) Any other rate or index that may be designated
by order of the Treasurer provided such rate or index is set or
reported by a source which is independent of and not controlled
by the Treasurer or the County.
The procedure for determining the variable rate may involve one
or more of the above indices as alternatives or may involve the
setting of the rate by a municipal bond specialist provided
such rate shall be within a stated percentage range of one or
more of the indices set forth above.
8
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(a) The Treasurer may by written order establish sepa-
rate sub-accounts in the County's 1988 Note Reserve Account for
each series of Notes, into which shall be deposited the amount
borrowed for the Note Reserve Account for each such series.
(b) The Treasurer may by written order establish
separate sub-accounts in the County's 1988 Note Payment Account
for each series of Notes, and all amounts deposited in the Note
Payment Account shall be allocated to the sub-accounts.
(c)(i) In the event separate sub-accounts are
established pursuant to subsection (b) above, and subject to
Paragraph (ii) below, the percentage of deposits to the
County's 1988 Note Payment Account allocated to each
sub-account may be set equal to the percentage that Notes
issued in the corresponding series bears to all Notes issued
under this Resolution or to any other percentage designated by
the Treasurer pursuant to written order; provided that if the
various series are issued at different times or if the various
series are structured with different maturity dates, (I) sums
deposited in the Note Payment Account prior to the issuance of
one or more series may upon the issuance of each such series be
reallocated among the various sub-accounts established under
Subsection (b) above, to achieve a balance among the
sub-accounts proportionate to the designated percentage
allocation and/or (II) deposits to the Note Payment Account may
be allocated among the sub-accounts according to the total
amount of debt service that will actually be paid from the
respective sub-accounts.
(ii) Alternatively, the Treasurer may, by written
order, rank the sub-accounts established under Subsection (b)
above in order of priority, and specify that each such sub-
account shall receive deposits only after all sub-accounts
having a higher priority have received deposits sufficient to
discharge all (or any specified percentage of) Notes whose
series corresponds to any of the sub-accounts having priority.
(d) In the absence of a written order of the
Treasurer to the contrary, the amounts in each sub -account
established pursuant to this Section 502 shall secure only the
Notes issued in the series for which such sub-account was
established, until such Notes and interest on such Notes are
paid in full, after which the amounts in such sub-account may,
pursuant to written order of the Treasurer, be added pro rata
to the amounts in the other sub-accounts and thereafter used as
part of such other sub-accounts to secure all Notes and
interest on such Notes for which such other sub-accounts were
created, until paid in full. Alternatively, amounts held in
two or more sub-accounts within either the Note Reserve Account
or the Note Payment Account may be commingled, and if
commingled shall be held pan i passu for the benefit of the
holders of each series of Notes pertaining to the relevant
sub-accounts.
503. Series Independently Secured. If the Notes are
issued in multiple series pursuant to this Article V. each
series of Notes may, by written order of the Treasurer, be
independently secured in accordance with this Section 503.
(a) Each series of Notes shall pertain to one or more
taxing units, as designated by the Treasurer pursuant to
written order, and no two series of Notes shall pertain to the
1 0
same taxing unit. A school district, intermediate school
district or community college district extending beyond the
boundaries of a city in which it is located may, pursuant to
written order of the Treasurer, be subdivided along the
boundaries of one or more cities and each such subdivision
shall be deemed a taxing unit for purposes of this Section 503.
(b) Separate sub-accounts shall be established in the
County's 1988 Tax Payment Account. Each sub -account shall
receive the proceeds of one and only one series of Notes, and
amounts shall be disbursed from the sub-account to only those
taxing units designated as being in that series.
(c) In the event Notes are issued for deposit into
the Project Account established under Section 701, separate
sub-accounts shall be established in the Project Account. Each
sub-account shall receive the proceeds of one and only one
series of Notes, and amounts shall be disbursed from the
sub-account only to accounts, sub-accounts and/or taxing units
designated as being in the series corresponding to the
sub-account from which disbursement is being made.
(d) A separate sub-account shall be established in
the County's 1988 Note Reserve Account for each series of
Notes, into which shall be deposited the amount determined by
the Treasurer under Section 103 or Section 703 with respect to
the series. Each sub-account shall secure one and only one
series.
(e) A separate sub-account shall be established in
the County's 1988 Note Payment Account for each series of
Notes. Each sub-account shall be allocated only those amounts
described in Section 704 which pertain to the taxing units
included in the series corresponding to the sub-account.
Chargebacks received from a taxing unit pursuant to Section 905
shall be deposited in the sub-account corresponding to the
series in which the taxing unit is included. Amounts held in
each sub-account shall secure the debt represented by only
those Notes included in the series corresponding to the
sub-account, and disbursements from each sub-account may be
applied toward the payment of only those Notes included in the
series corresponding to the sub-account.
(f) The amounts in each sub-account established
pursuant to this Section 503 shall secure only the Notes issued
in the series for which such sub-account was established, until
such Notes and interest on such Notes are paid in full, after
which any amounts remaining in such sub-account shall accrue to
the County and shall no longer be pledged toward payment of the
Notes.
VI
TAXABILITY OF INTEREST
601. Tax Exemption. Subject to Section 603, the
terms of the indebtedness evidenced by the Notes shall be those
of a tax-exempt borrowing, and the Notes shall be constituted
as obligations the interest on which is excluded from gross
income for purposes of both Federal and State of Michigan
income tax ("Exempt Notes").
602. Nonarbitrage Covenant and Tax Law Compliance.
(a) With regard to all Exempt Notes, and in accordance with
11
Treasury Regulations 1.103-13, 1.103-14 and 1.103-15, the
County covenants with the purchaser of the Exempt Notes that:
(i) the County will make no use of the proceeds of
the Exempt Notes and will undertake no other intentional act
with respect to the Exempt Notes which, if such use or act had
been reasonably expected on the date of issuance of the Exempt
Notes or if such use or act were intentionally made or under-
taken after the date of issuance of the Exempt Notes, would
cause the Exempt Notes to be "arbitrage bonds," as defined in
Section 148 of the Internal Revenue Code of 1986, as amended
(the "Code"), in the Regulations promulgated under Sections 103
and 148 of the Code or in any successor or supplementary
provision of law hereinafter promulgated,
(ii) the County will undertake all actions as shall be
necessary to maintain the Exempt Notes as obligations the
interest on which qualifies for the tax exemption provided by
Section 103(a) of the Code, including, without limitation,
filing all required informational returns with the Secretary of
Treasury, keeping accurate account of all monies earned in any
fund, account or sub-account authorized by this Resolution,
certifying cumulative cash flow deficits of the County and the
local units, and investing any required portion of the proceeds
of the Notes, whether on behalf of the County or the local
units, in tax-exempt obligations or State and Local Government
Series obligations, and
(iii) the County will make timely payment to the
United States of any investment earnings, realized by the
County on the gross proceeds of the Notes, as may be subject to
rebate under Section 148(f) of the Code, and, to the extent
required under applicable law or deemed by the Treasurer to be
in the best interest of the County pursuant to written order,
the County's obligation to make such payment to the United
States shall also account for excess investment earnings
realized by local units on all or a portion of the gross
proceeds distributed to, and held by, the local units pursuant
to Section 702.
(b) The Treasurer is authorized and directed to take
such actions and to enter into such agreements and certifica-
tions, on behalf of the County, as the Treasurer shall deem
necessary or appropriate to comply with the foregoing covenant.
603. Exceptions to Tax Exemtion. (a) If the
Treasurer shall determine that all of the Notes or all of any
series of Notes must be issued as taxable obligations to ensure
(i) the legality of the issuance of any Notes, (ii) the
tax-exempt status of one or more anticipated series of Notes,
(iii) the availability of an exemption from the arbitrage
rebate requirements of the Code for one or more anticipated
series of Notes where an exemption would result in substantial
net savings to the County and/or the local units, (iv) the
eligibility of one or more anticipated series of Exempt Notes
to be purchased by financial institutions where eligibility is
critical to the achievement of a favorable interest rate, (v)
the marketability of any of the Notes or (vi) the effectuation
of the borrowing authorized by this Resolution due to any
existing or future tax laws which, in the judgment of the
Treasurer and under the circumstances of Act 206, are unduly
burdensome to the County, then in such event the Treasurer
shall so certify by written order.
12
(b) In the event the County shall issue one or more
taxable and one or more tax-exempt series of Notes, the various
series shall be structured in a manner designed to prevent
their integration for purposes of the Code and to ensure their
compliance with any applicable Regulations or Internal Revenue
Service announcements or rulings as may hereinafter be
published governing the coterminous issuance of taxable and
tax-exempt obligations. Such regulations or rulings shall
control any contrary provision of Article V. and compliance
with the foregoing sentence shall not be hindered by otherwise
controlling limitations set forth in Article V.
604. Qualification of Notes. The Exempt Notes are
designated as qualified tax-exempt obligations for purposes of
Section 265(b) of the Code ("Section 265"). The foregoing
designation is declared pursuant to the County's determination,
hereby made, that the reasonably anticipated amount of
tax-exempt obligations, other than private activity bonds,
which will be issued by the County and all subordinate entities
of the County during the calendar year in which the Notes are
issued will not, for purposes of Section 265, total more than
$10,000,000. This determination is based on the Board's review
of the consummated and anticipated borrowings qualifying under
the foregoing standard and upon the Board's expectation that
the total amount of tax-exempt borrowing under this Resolution
will not exceed $10,000,000. Prior to the issuance of the
Exempt Notes the Treasurer shall independently re-evaluate the
County's determination under this Section 603. In the event
the Treasurer shall confirm the County's determination, the
Treasurer shall so certify in writing to the Board of
Commissioners and shall take all actions necessary or
appropriate for and on behalf of the County pursuant to the
authority conferred by Act 206 and this Resolution to
constitute the Exempt Notes as obligations qualifying under
Paragraph (3) (A) of Section 265. Alternatively, if the
Treasurer shall fail to confirm the reasonableness of the
County's determination as to any of the Exempt Notes the
Treasurer shall so certify in writing to the Board, and such
Notes shall no longer be designated as qualified tax-exempt
obligations, unless and until the Board shall by further
resolution reaffirm the designation made hereby.
VII
FUNDS AND SECURITY
701. Delinquent Tax Project Account. If the Notes
are issued and sold before the Treasurer has received
certification from the taxing units of the amount of the
Delinquent Taxes and if such certification is not reasonably
anticipated in time to allow distribution of the proceeds of
the Notes within 20 days after the date of issue, a 1988
Delinquent Tax Project Account (the "Project Account") shall be
established by the Treasurer as a separate and distinct fund of
the County within its general fund, The Project Account shall
receive all proceeds from the sale of the Notes, including any
premium or accrued interest received at the time of sale. The
Project Account shall be held in trust by an escrow agent,
until the monies therein are disbursed in accordance with this
Article VII. The escrow agent shall be a commercial bank,
shall be located in Michigan, shall have authority to exercise
trust powers, and shall have a net worth in excess of
13
$25,000,000. The form and content of the agreement between the
County and the escrow agent shall be approved by the
Treasurer. Subject to the following sentence, monies deposited
in the Project Account shall be expended only (1) for the
purpose of funding the Tax Payment Account established under
Section 702 and (ii) to the extent permitted by Act 206, for
the purpose of paying the expenses of the offering of the
Notes. In the event the Treasurer by written order so directs,
additional funding of the Project Account may be undertaken,
and any surplus proceeds remaining in the Project Account after
the Treasurer has completed the funding of the Tax Payment
Account may be transferred to either the 1988 Note Reserve
Account created under Section 703 or the 1988 Note Payment
Account created under Section 704. Monies in the Project
Account may be disbursed by the escrow agent to the County's
1988 Tax payment Account at any time and from time to time,
upon receipt of a written requisition form signed by the
Treasurer.
702. 1988 Tax Payment Account. The County's 1988 Tax
Payment Account (the "Tax Payment Account") is hereby
established as a distinct account within the Revolving Fund.
The Treasurer shall designate all or a portion of the proceeds
of the Notes, not to exceed the estimated amount of Delinquent
Taxes, for deposit in the Tax Payment Account. If, however,
the proceeds of the Notes are initially deposited in the
Project Account pursuant to Section 701, the Treasurer is
instead authorized and directed to transfer monies included in
the Project Account to the Tax Payment Account in accordance
with the procedures set forth in Section 701. The County shall
apply the monies in the Tax Payment Account to the payment of
the Delinquent Taxes or expenses of the borrowing in accordance
with Act 206. The allocation of monies from the Tax Payment
Account may be made pursuant to a single, comprehensive
disbursement or may instead be made from time to time, within
the time constraints of Act 206, to particular taxing units as
monies are paid into the Tax Payment Account, such that the
source of the monies (whether from the County's own funds, from
the proceeds of a tax exempt borrowing or from the proceeds of
a taxable borrowing) may be traced to the particular taxing
unit receiving the funds. Moreover, and regardless of whether
multiple series of Notes are issued, the Tax Payment Account
may be divided into separate sub-accounts in order to allow the
Treasurer to designate which taxing units shall receive
borrowed funds and which shall receive funds otherwise
contributed by the County.
703. 1988 Note Reserve Account. In the event funding
is provided as described in this Section 703, the Treasurer
shall establish a 1988 Note Reserve Account (the "Note Reserve
Account") as a distinct account within the Revolving Fund.
After depositing all of the monies to fund the Tax Payment
Account pursuant to Section 702, the Treasurer shall next
transfer to the Note Reserve Account, either from the Project
Account or directly from the proceeds of Notes, any proceeds
remaining from the initial issuance of the Notes. In addition,
the Treasurer may transfer unpledged monies from the Revolving
Fund or from other County sources to the Note Reserve Account
in an amount which, when added to any other amounts to be
deposited in the Note Reserve Account, does not exceed the
amount permitted under clause (c)(ii) of Section 103. Except
as provided below, all monies in the Note Reserve Account shall
be used solely for payment of principal of, premium, if any,
and interest on the Notes to the extent that monies required
14
for such payment are not available in the County's 1988 Note
Payment Account, Monies in the Note Reserve Account shall be
withdrawn first for payment of principal of, premium, if any,
and interest on the Notes before County general funds are used
to make the payments. All income or interest earned by, or
increment to, the Note Reserve Account due to its investment or
reinvestment shall be deposited in the Note Reserve Account,
provided, however, that any amounts in the Note Reserve Account
in excess of the amount permitted under clause (c)(ii) of
Section 103 shall be transferred on receipt to the County's
1988 Note Payment Account and used to pay the principal of,
premium, if any, and interest on the Notes next due. When the
Note Reserve Account is sufficient to retire the Notes and
accrued interest thereon, the Treasurer may order that the Note
Reserve Account be used to purchase the Notes on the market,
or, if the Notes are not available, to retire the Notes when
due. If so ordered by the Treasurer, all or any specified
portion of the Note Reserve Account may be applied toward the
redemption of any Notes designated for redemption in accordance
with Section 209,
704. 1988 Note Payment Account. (a) The County's
1988 Note Payment Account is hereby established as a distinct
account within the Revolving Fund. (The County's 1988 Note
Payment Account, as supplemented by monies held in any interim
account that are designated for transfer to the 1988 Note
Payment Account, is herein referred to as the "Note Payment
Account".) The Treasurer is directed to deposit into the Note
Payment Account, promptly on receipt, those amounts described
below in Paragraphs (i), (ii), (iv) and (v) which are not
excluded pursuant to Subsection (c) below. Furthermore, the
Treasurer may, by written order, deposit into the Note Payment
Account all or any portion of the amounts described below in
Paragraph (iii).
(i) All Delinquent Taxes.
(ii) All statutory interest on the Delinquent Taxes.
(iii) All property tax administration fees on the
Delinquent Taxes, net of any amounts applied toward the
expenses of this borrowing.
(iv) Any amounts which are received by the
Treasurer from the taxing units within the County because of
the uncollectability of the Delinquent Taxes.
(v) Any amounts remaining in the Project Account
after the transfers to the Tax Payment Account and Note Reserve
Account have been made as specified in Sections 702 and 703.
(b) Monies in the Note Payment Account shall be used
by the County to pay principal of, premium (if any) and
interest on the Notes as the same become due and payable.
(c)(i) The Treasurer may by written order provide
that only a portion of the sums described above in Subsection
(a) shall be deposited into the Note Payment Account and
applied toward the payment of debt service on the Notes, in
which event those sums which are withheld from the Note Payment
Account shall be deposited into the Tax Payment Account or,
pursuant to further order of the Treasurer, applied toward any
other purpose consistent with Act 206. The portion of any sums
described in Subsection (a) which are withheld from the Note
15
Payment Account pursuant to this Subsection shall be determined
in accordance with the following Paragra,-oh.
(ii) Prior to the issuance of the Notes, the
Treasurer may by written order specify a cut-off date not
earlier than March 1, 1988, and only those sums received by the
County after the cut-off date shall be applied to the Note
Payment Account.
(d) The Treasurer may by written order provide that
at such time as sufficient funds shall have been deposited into
the Note Payment Account to pay all remaining amounts owed
under the Notes the pledge on any additional monies otherwise
payable to the Note Payment Account shall be discharged and
such monies shall not be deposited into the Note Payment
Account or otherwise pledged toward payment of the Notes.
(e) The Treasurer may by written order provide that
in the event Notes are issued pursuant to Article III, amounts
which are deposited or otherwise included in the Note Reserve
Account or sub-account for a particular series of Notes or
which otherwise secure the obligations evidenced by such series
shall not include any amounts received by the County prior to
the latest maturity date of any series of Notes previously
issued under Article II and/or Article III.
705. Limited Tax General Obligation and Pledge. (a)
The Notes shall be the general obligation of the County, backed
by the County's full faith and credit, the County's tax
obligation (within applicable constitutional and statutory
limits) and the County's general funds. The County budget
shall provide that if the pledged monies are not collected in
sufficient amounts to meet the payments of the principal and
interest due on the Notes, the County, before paying any other
budgeted amounts, shall promptly advance from its general funds
sufficient monies to pay such principal and interest.
(b) In addition, the monies listed below are pledged
to the repayment of the Notes and, subject to Section 901,
shall be used solely for repayment of the Notes until the
principal of, premium (if any) and interest on the Notes are
paid in full:
(i) All amounts held in the Project Account,
until disbursed in accordance with Section
701;
(ii) All amounts held in the Note Payment Account;
(iii) All amounts held in the Note Reserve Account;
and
(iv) All amounts earned from the investment of
monies held in the Note Payment Account or
the Note Reserve Account.
(c) If the Notes shall be issued in various series
pursuant to Article V, this pledge shall in the case of any
independently secured series extend only to monies in accounts
or sub-accounts pertaining to the particular series.
(d) If the amounts so pledged are not sufficient to
pay the principal and interest when due, the County shall pay
the same from its general funds or other available sources,
16
Subject to Section 602 and pursuant to written order of the
Treasurer, the County may later reimburse itself for such
payments from the Delinquent Taxes collected.
706. Security. for Renewal, Refunding or Advance
Refunding Notes. Renewal, refunding or avance refunding Notes
shall be secured by all or any portion of the same security
securing the Notes being renewed, refunded or advance
refunded. The monies pledged in Section 705 for the repayment
of the Notes are also pledged for repayment of the principal
of, and premium, if any, and interest on any renewal, refunding
or advance refunding Notes issued pursuant to this Resolution,
and any such renewal, refunding or advance refunding Notes
shall be the general obligation of the County, backed by its
full faith and credit, which shall include the tax obligation
of the County, within applicable constitutional and statutory
limits.
707. Use of Funds After Full Payment or Provision for
Payment. After all principal of, premium, if any, and interest
on the Notes have been paid in full or provision therefor by
investments of pledged amounts in direct noncallable obliga-
tions of the United States of America in amounts and with
maturities sufficient to pay all such principal, premium, if
any, and interest when due, any further collection of
Delinquent Taxes and all excess monies in any fund or account
of the Revolving Fund, and any interest or income on any such
amounts, may, pursuant to written order of the Treasurer and
subject to Article V, be used for any proper purpose within the
Revolving Fund.
VIII
SUPPLEMENTAL AGREEMENTS
801. Supplemental Agreements and Documents. The
Treasurer, on behalf of the County, is authorized to enter into
any or all of the following agreements or commitments as may,
in the Treasurer's discretion, be necessary, desirable or
beneficial in connection with the issuance of Notes, upon such
terms and conditions as the Treasurer may determine appropriate:
(a) A letter of credit, line of credit, repurchase
agreement, note insurance, or similar instrument, providing
backup liquidity and/or credit support for the Notes;
(b) A reimbursement agreement, revolving credit
agreement, revolving credit note, or similar instrument,
setting forth repayments of and security for amounts drawn
under the letter of credit, line of credit, repurchase
agreement or similar instrument;
(c) A marketing, remarketing, placement, paying or
tender agent agreement or dealer agreement designating a
marketing, remarketing, paying, tender or placement agent or
dealer and prescribing the duties of such person or persons
with respect to the sale of the Notes; and
(d) A put agreement or provision allowing the
purchaser of the Notes to require the County to repurchase the
Notes upon demand at such times as may be provided in such put
agreement or provision_
17
802. Revolving Credit Notes. If the Treasurer enters
into a revolving credit agreement (the "Agreement") pursuant to
Section 801 above, the Agreement may call for the issuance of
one or more revolving credit notes (the "Revolving Credit
Notes") for the purpose of renewing all or part of maturing
Notes or Notes that have been put pursuant to a put agreement
or provision. Such Revolving Credit Notes shall he issued
pursuant to Article II or III, as appropriate, and in
accordance with the following provisions:
(a) Interest on the Revolving Credit Notes may be
payable on maturity, on prior redemption, monthly, quarterly,
or as otherwise provided in the Agreement.
(b) The Revolving Credit Notes may mature on one or
more date or dates not later than the final maturity date of
the Notes, as provided in the Agreement.
(c) The Treasurer may, at the time of the original
issuance of Notes, execute and deliver one Revolving Credit
Note in a maximum principal amount not exceeding the lending
commitment under the Agreement from time to time in force (and
may substitute one such Note in a lesser principal amount for
another in the event the lending commitment is reduced),
provided that a schedule shall be attached to such Note on
which loans and repayments of principal and interest are
evidenced and further provided that the making of a loan and
the evidencing of such loan on the schedule of any such Note
shall constitute the issuance of a renewal Note for purposes of
this Resolution.
IX
MISCELLANEOUS PROVISIONS
901. Expenses. Expenses incurred in connection with
the Notes shall be paid from the property tax administration
fees collected on the Delinquent Taxes and, if so ordered by
the Treasurer, from any earnings on the proceeds of the
offering or from other monies available to the County.
902. Application to Department of Treasury. The
Treasurer is authorized to make application to the Department
of Treasury on behalf of the County for an order permitting the
County to make this borrowing and issue the Notes If the
Treasurer deems it appropriate, the Treasurer is alternatively
authorized to apply to the Department of Treasury for an
exception to prior approval.
903. 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,
which selection may, at the option of the Treasurer, be for one
or more years.
904. Complete Records. The Treasurer shall keep full
and complete records of all deposits to and withdrawals from
each of the funds and accounts in the Revolving Fund and any
account or sub-account created pursuant to this Resolution and
of all other transactions relating to such funds, accounts and
sub-accounts, including investments of money in, and gain
derived from, such funds and accounts.
18
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I 11E7
905. Charcrebacks. If by the date which is three
months prior to the final maturity date of the Notes sufficient
monies are not on deposit in the Note Payment Account and the
Note Reserve Account to pay all principal of and interest on
the Notes when due, Delinquent Taxes not then paid or recovered
at or prior to the latest tax sale transacted two or more
months before the final maturity of the Notes shall, if
necessary to ensure full and timely pavment on the date of
final maturity, be charged back to the local units in such
fashion as the Treasurer may determine, and, subject to Article
V, the proceeds of such chargebacks shall be deposited into the
County's 1988 Note Payment Account no later than five weeks
prior to the final maturity of the Notes. This Section 905
shall not be construed to limit the authority of the Treasurer
under State law to charge back under other circumstances or at
other times.
906. Investments. The Treasurer is authorized to
invest all monies in the Project Account, in the Revolving Fund
or in any account or sub-account therein which is established
pursuant to this Resolution in any one or more of the
investments authorized as lawful investments for counties under
Act No. 20, Public Acts of 1943, as amended, The Treasurer is
further authorized to enter into a contract on behalf of the
County under the Surplus Funds Investment Pool Act, Act No.
367, Michigan Public Acts of 1982, as amended, and to invest in
any investment pool created thereby monies held in the Project
Account, in the Revolving Fund, or in any account or sub-account
therein which is established pursuant to this Resolution.
907. Mutilated, Lost, Stolen or Destroyed Notes. In
the event any Note is mutilated, lost, stolen or destroyed, the
Treasurer may, on behalf of the County, execute and deliver, or
order the Registrar or Paying Agent to authenticate and
deliver, a new Note having a number not then outstanding, of
like date, maturity and denomination as that mutilated, lost,
stolen or destroyed. In the case of a mutilated Note, a
replacement Note shall not be delivered unless and until such
mutilated Note is surrendered to the Treasurer or the Registrar
or Paying Agent. In the case of a lost, stolen or destroyed
Note, a replacement Note shall not be delivered unless and
until the Treasurer and the Registrar or Paying Agent shall
have received such proof of ownership and loss and indemnity as
they determine to be sufficient.
Mr. Chairperson, on behalf of the Finance Committee, I move the
adoption of the foregoing resolution.
FINANCE COMMITTEE
19
Moved by supported by
that Resolution # be adopted.
AYES:
NAYS:
A sufficient majority having voted thereof, Resolution
be adopted.
STATE OF MICHIGAN )
) SS.
COUNTY OF OAKLAND )
I, Lynn D. Allen, Clerk of the County of Oakland and having a
seal, do hereby certify that I have compared the annexed copy of
Miscellaneous Resolution adopted by the Oakland County Board of
Commissioners at their meeting held on 1988 with
the original record thereof now remaining in my office, and that it
is a true and correct transcript therefrom, and of the
whole thereof.
In Testimony Whereof, I have hereunto set my hand and affixed
the seal of said County of Pontiac, Michigan, this day
of , 1988.
LYNN D. ALLEN
County Clerk/Register of Deeds
20
this 25th
February 25, 1988
RESOLUTION NO. 88031
Moved by Caddell supported by Law the resolution be adopted.
AYES: S. Kuhn, Lanni, Law, Luxon, McConnell, McDonald, A. McPherson,
R. McPherson, Moffitt, Oaks, Pernick, Price, Rewold, Rowland, Skarritt, Wilcox,
Caddell, Calandro, Crake, Doyon, Gosling, Hobart, Jensen, R. Kuhn. (24)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland and having a seal,
do hereby certify that I have compared the annexed copy of
this Miscellaneous Resolution adopted by the Oakland County Board of Commissioners
at their meeting held on February 25, 1988
with the orginial record thereof now remaining in my office, and
that it is a true and correct transcript therefrom, and of the
whole thereof.
In Testimony Whereof, I have hereunto set my hand and affixed the
seal of said County at Pontiac, Michigan