HomeMy WebLinkAboutResolutions - 1987.02.05 - 17969February 5, 1987
Miscellaneous Resolution #87002
BY: FINANCE COMMITTEE - G. William Caddell, D.C., Chairperson
RE: TREASURER'S OFFICE - AUTHORIZATION TO BORROW AGAINST
DELINQUENT 1986 TAXES
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS, the Board of Commissioners of the County did
on November 20, 1986, enact a series of resolutions #86325,
#86326, and #86327, (the "Resolutions") on behalf of the County
authorizing and governing the issuance of the County's 1987
General Obligation Limited Tax Notes (the "Notes") pursuant to
which the County is to borrow against 1986 property taxes returned
delinquent to the Treasurer of the County (the "Treasurer") on
March 1, 1987 (the "Delinquent Taxes"); and
WHEREAS, considerations of tax law and, in particular,
enactment of the Internal Revenue Code of 1986 (the "Code"),
place certain burdens upon the structure and marketing of the
Notes; and
WHEREAS, certain proposed amendments to the Resolutions
would alleviate, to the extent practicable under the Code, the
aforementioned burdens.
NOW THEREFORE BE IT RESOLVED that the Oakland County
Board of Commissioners as follows:
The Resolutions are hereby amended as specified below.
All provisions of the Resolutions which are not hereby specifically
amended shall remain in full force and effect.
Section 102 of the Resolutions is hereby amended to
state that the aggregate amount of Notes shall not exceed the
sum of (a) the estimated amount of the Delinquent Taxes, plus
(b) an amount determined by the Treasurer to be a reasonably
required reserve fund to assure the marketability of the Notes
but not in excess of 10% of the amount of the Notes. Section
102 is further amended to state that the amount of Delinquent
Taxes shall be estimated, and not determined, only if the Notes
are issued before the Treasurer has received certification from
the taxing units of the amount of the Delinquent Taxes.
Section 103 of the Resolutions is hereby amended to
state that the proceeds of the Notes shall be deposited into
the 1987 Delinquent Tax Project Account if and only 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 then only if such certification is not reasonably
anticipated to occur to allow distribution of the proceeds of
the Notes within 20 days after the date of issue.
Section 203 of the Resolutions is hereby amended in
that the first maturity of the Notes (i) shall be determined by
the Treasurer and (ii) shall be not later than one year after
the date of issuance. Section 203 is further amended to indi-
cate that the second maturity of the Notes shall be on the
first anniversary of the first maturity, that the third matur-
ity of the Notes shall be on the second anniversary of the
first maturity, that the principal amount of the Notes of the
first maturity shall be not less than 20% nor more than 70% of
the amount of estimated Delinquent Taxes, that the principal
amount of the Notes of the second maturity shall be not less
than 15% nor more than 55% of estimated Delinquent Taxes, and
that the principal amount of the Notes of the third maturity
shall be the balance of the total principal amount of the
Notes. Section. 203 shall not be construed to require that
Notes otherwise in compliance with the provisions of Article II
be structured with three, rather than one or two, maturities.
Section 204 of the Resolutions is hereby amended in
that the Notes shall bear interest payable semi-annually, with
the first interest payment to be payable (i) on the date of the
first maturity of the Notes or (ii) if the first maturity of
the Notes is after December 31, 1987, six months before the
first maturity of the Notes. Section 204 is further amended to
state that the date of record shall be not fewer than 14 nor
more than 17 days before the date of payment, as designated by
the Treasurer prior to the sale of the Notes.
The first two sentences of Section 209 of the Resolu-
tions are hereby repealed, the remainder of the first paragraph
of Section 209 is hereby designated as Subsection (d); and the
second paragraph of Section 209 is hereby designated as Subsec-
tion (e). Section 209 is further amended to include as the
first three paragraphs of that Section the following provisions:
"(a) Only Notes maturing on the last
maturity date of a particular series shall
be subject to redemption prior to maturity,
"(b) A portion of the Notes maturing on
the last maturity date of a particular•
series shall be redeemed on each maturity
date of the Notes of that series (other than
the last maturity date) to the extent, if
any, necessary to constitute and/or maintain
the Note Payment Account, established under
Section 604, as a bona fide debt service
fund for purposes of Section 148(f)(4)(B) of
the Internal Revenue Code of 1986. Redemp-
tion under this Subsection (b) shall apply
to only those Notes selected by lot, the
principal and accrued interest on which
shall not exceed, in the aggregate, the
amount, as certified by the Treasurer, which
is projected to be in the Note Payment
Account on the applicable maturity date
absent redemption under this Section (b).
Notes so 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%.
"(c) In addition, Notes maturing on the
last maturity date of a particular series
may be redeemed in whole or in part on any
date or dates on or after the maturity date
immediately preceeding the last maturity
date, in the discretion of the Treasurer.
Notes called for redemption under this
Subsection (c) 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
pursuant to this Subsection (c) may be made
by lot or pro rata, as shall be determined
by the Treasurer."
Subsection (d) of Section 309 of the Resolutions is
hereby amended to state that the maturities of the renewal
Notes shall be set by written order of the Treasuer, but shall
in no event be later than three years after the date of
issuance of the Notes.
Section 310 of the Resolutions is hereby amended in
that repayment shall be made not only in a manner sufficient to
assure continued maintenance of the tax exempt status of the
interest on the Notes, but also to assure continued maintenance
of the exemption from the rebate requirements set forth in
Section 148 of the Code.
The first sentence of Section 401 of the Resolutions
is hereby designated as Subsection (i), the second, third and
last sentence of Section 401, and paragraphs (a) through (d) of
Section 401, are hereby designated as Subsection (ii), and the
following provisions are hereby added to Section 401:
"(iii) If so ordered by the Treasurer,
all or any specified percentage of the Notes
issued pursuant to this Article IV shall
mature on a single date which shall be not
later than three years after the date of
issuance, which maturity date shall be
determined by the Treasurer,
_ "(iv) If so ordered by the Treasurer,
all or any specified portion of the Notes
issued pursuant to this Article IV shall be
subject to redemption on any date or dates
at par, plus (1) accrued interest to the
redemption date and (II) if so ordered by
the Treasurer, a premium not to exceed 1%,
which redemption shall be in a manner con-
sistent with Subsections (d) and (e) of
Section 209.
"(v) This Section 401 shall not be
construed to prohibit the issuance of
certain Notes in a series as variable rate
obligations, with the remainder of the
series bearing fixed rate interest."
Paragraph (i) of Subsection (c) of Section 502 of the
Resolutions is hereby amended to state that if two or more
series of Notes are issued at different times or if the various
series are structured with different maturity dates, then (i)
sums deposited in the 1987 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 502(b), to achieve a balance among
the sub-accounts proportionate to the percentage allocation
described in Paragraph 502(c)(i) and/or (ii) the 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.
Subsection (c) of Section 503 of the Resolutions is
hereby amended in that separate sub-accounts shall be estab-
lished in the Project Account if and only if the proceeds of
the Notes are to be deposited into the Project Account.
Subsection (f) of Section 503 of the Resolutions is
hereby repealed. Subsection (g) of Section 503 is hereby
redesignated as Subsection (f), and is hereby amended to state
that any amounts remaining in the sub-account, after payment of
the Notes, shall accrue to the County and shall no longer be
pledged toward payment of the Notes.
The first sentence of Section 601 of the Resolutions
is hereby amended to state that if the Notes are issued and
sold before the Treasurer has received certification from the
taxing units of the amount of the Delinquent Taxes (which
certification is not reasonably anticipated to occur to allow
distribution of the proceeds of the Notes within 20 days after
the date of issue), a 1987 Delinquent Tax Project Account shall
be established as a separate and distinct fund of the County
within its general fund. Section 601 is further amended, as
the seventh and last sentences of Section 601 are hereby
repealed and as the sixth sentence of that Section is hereby
amended to state that monies deposited in the 1987 Project
Account shall be expended only (i) for the purpose of funding
the 1987 Tax Payment Account established under Section 602 and
(ii) to the extent permitted by Act 206, for the purpose of
paying the expenses of the offering of the Notes.
The fourth sentence of Section 603 of the Resolutions
is hereby amended by deleting the word A"borrowed.'
Subsection (c) of Section 604 of the Resolutions is
hereby repealed and replaced with a new Subsection (c) and a
new Subsection (d), which shall read as follows:
"(c) Prior to the issuance of the Notes 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 addi-
tional moneys otherwise payable to the Note Payment
Account shall be discharged and such moneys shall not
be deposited into the Note Payment Account or other-
wise pledged toward payment of the Notes.
"(d) Prior to the issuance of the Notes the
Treasurer may by written order provide that in the
event Notes are issued pursuant to Article III,
Delinquent Taxes 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
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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."
Subsection (b) of Section 605 of the Resolutions is
hereby amended, as Paragraph (v) thereof is repealed and as no
security interest shall attach for the benefit of the holders
of the Notes unless the purported security pertains to amounts
held in the 1987 Project Account (until disbursed to the
County's delinquent tax revolving fund), amounts held in the
1987 Note Payment Account, amounts held in the 1987 Tax Payment
Account (until disbursed to the taxing units of the County), or
amounts earned from the investment of monies held in such
accounts.
Subsection (e) of Section 702 of the Resolutions is
hereby amended in that Revolving Credit Notes may in no event
mature later than three years from the date of issuance of the
Notes.
Section 801 of the Resolutions is hereby amended to
state that the expenses of the borrowing shall be paid not only
from the property tax administration fees collected on the
Delinauent Taxes, but also from any earnings on the proceeds of
the offering, to the extent such fees or earnings are not
pledged to the repayment of• the Notes or any other Notes issued
pursuant to Act 206.
Section 805 of the Resolutions is hereby amended to
state that 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 to pay all principal of and
interest on the Notes . when due, Delinquent Taxes not paid or
recovered at or prior to the latest tax sale transacted two or
more months before the final maturity of the Notes shall be
charged back to the local units in such fashion as the
Treasurer may determine, and that the proceeds of such charge-
backs shall, subject to Section 503, be deposited in the Note
Payment Account no later than two months prior to the final
maturity of the Notes.
Section 809 of the Resolutions is hereby amended to
include the following provision after the first, and before the
second, sentence of the Section:
"The County further so covenants that it
will undertake all actions as shall be
necessary to maintain the Notes as obliga-
tions the interest on which qualifies for
the tax exemption provided by Section 103(a)
of the Internal Revenue Code of 1986,
including, without limitation, filing all
required informational returns with the
Secretary of Treasury, keeping accurate
account of all moneys earned in any fund,
account or sub-account authorized by this
Resolution, and making timely payment to the
United States of America of any portion of
such earnings as may be required under
Section 148(f) of the Internal Revenue Code
of 1986."
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APPROVE THE FC77=GCT.::.!
aminty LA.
The form of Note set forth in Appendix A and Appendix
B, and the form of the Notice of Sale set forth in Resolution
3, of the Resolutions are each hereby revised to account for
and reflect each of the amendments set forth above.
Mr. Chairperson, on behalf of the Finance Committee,
I move the adoption of the foregoing resolution.
"RON "./
FINANCE COMMITTEE
46/a?
Discussion followed. A vote was thereupon taken
on the foregoing resolution and was as follows:
AYES: McDonald, A. McPherson, R. McPherson, Moffitt, Nelson, Perinoff,
Pernick, Rewold, Rowland, Skaritt, Aaron, Caddell, Calandro, Crake, Gosling, Hobart,
Jensen, R. Kuhn, S. Kuhn, Lanni, Law, Luxon. (22)
NAYS: None. (0)
ABSTAIN:
A sufficient majority having voted therefor, the
resolution appearing above was adopted.
STATE OF MICHIGAN
COUNTY OF OAKLAND
I certify that the foregoing is a true and accurate
copy of resolutions adopted by the Oakland County Board of
Commissioners at a regular meeting on the 5th day
of Feburary , 1987, and that notice of such meeting was
given as required by law.
Lyn* D. Allen, County Clerk