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HomeMy WebLinkAboutResolutions - 2013.03.06 - 20709MISCELLANEOUS RESOLUTION #13031 March 6, 2013 BY: Finance Committee, Thomas Middleton, Chairperson IN RE: RESOLUTION TO AUTHORIZE REFUNDING OF THE OAKLAND COUNTY BUILDING AUTHORITY $8,160,000 BUILDING AUTHORITY REFUNDING BONDS, SERIES 2006 TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: WHEREAS, pursuant to the provisions of Act No. 31, Public Acts of Michigan, 1948, 1 st Extra Session, as amended ("Act 31"), the County of Oakland (the "County")at the request of the City of Pontiac (the "City") caused the Oakland County Building Authority (the "County Building Authority") to enter into a contract (the "Lease Contract") with the County under which, the County Building Authority caused the refunding of the City of Pontiac General Building Authority Bonds, Series 2002 (the "City Building Authority Bonds") pursuant to which, the Oakland County Building Authority Refunding Bonds, Series 2006 dated March 1, 2006 (the "Prior Bonds") were issued in the original principal amount of $8,160,000 to defray the cost of refunding the City Building Authority Bonds which Prior Bonds remain outstanding as listed in APPENDIX A; and WHEREAS, in order to secure the Prior Bonds, the County and the County Building Authority entered into a lease contract (the "2006 Lease Contract") made as of December 1, 2005 under which, the County Building Authority issued both the Prior Bonds and the Oakland County Building Authority Bonds, Series 2006A (the "2006A Bonds"); and WHEREAS, On August 23, 2012, the City of Pontiac caused the 2006A Bonds to be defeased by depositing sufficient funds in an escrow to call all of the 2006A Bonds when callable on June 1, 2013, leaving only the Prior Bonds outstanding; and WHEREAS, the Prior Bonds remain outstanding in the aggregate principal amount of $8,160,000 maturing in various principal amounts on June 1 in the years 2014 through 2027 and bear interest at rates of 3.80% to 5.00%; and WHEREAS, the County and the Emergency Financial Manager of the City have been advised that conditions in the bond market have now improved from the conditions which prevailed at the time the Prior Bonds were sold and that the Prior Bonds could be refunded at a considerable savings to the City; and WHEREAS, the Emergency Financial Manager of the City has requested the County to cause refunding bonds to be issued by the County Building Authority by a letter which is attached hereto as APPENDIX B; and FINANCE COMMITTEE VOTE: Motion carried unanimously on a roll call vote. 1 FINANCE CONWETTEE WHEREAS, the County has determined that a significant cost savings can be achieved by refunding outstanding Bonds in whole or in part; and WHEREAS, after the sale of the refunding bonds, the City and the County must enter into an Amended Sublease, a copy of which is attached hereto as APPENDIX C; and WHEREAS, in order to provide for the Refunding Bonds and to comply with federal securities regulations, it is necessary to approve an amendment to the Lease Contract between the County and the Authority (the "Amendment to Lease Contract") attached as Appendix D in order to approve the undertaking to provide continuing disclosure. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COUNTY OF OAKLAND as follows: 1. The County Building Authority is authorized to proceed to refund any or all of the Prior Bonds described in Appendix B in whole or in part, on such terms and conditions as will result in a lower total indebtedness on such issue. 2. The Amended Sublease attached hereto as APPENDIX C is hereby approved. 3. The Amendment to Lease Contract attached hereto as Appendix D is hereby approved. 4. The County Officials set forth on the Amended Sublease and the Amendment to Lease Contract are authorized to execute and deliver the Amendment to Lease Contract on behalf of the County. ;. After any refunding bonds areissued, the Authority shall report to the County on the new debt service schedule and the savings in total principal and interest. 6. The County Executive, if necessary, is authorized to file for approval to issue the bonds from the State of Michigan, Department of Treasury ("Treasury"), to pay the related fee, and to execute and deliver such other documents as may be requested by the Treasury. 7. All activities involved in the refunding of the Bonds under this resolution shall comply with the standing rules of the Board of Commissioners. BE IT FURTHER RESOLVED that the Chairperson of the Board of Commissioners is authorized fill in the blanks in APPENDIX C and APPENDIX D prior to executing and filing these documents with the Oakland County Clerk. Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing resolution. 2 APPENDIX A The Oakland County Building Authority $8,160,000 Building Authority Refunding Bonds, Series 2006, dated March 1, 2006 Jra.rl-oak249 3 APPENDIX B [TO BE INSERTED] Jra.rl-oak249 APPENDIX C AMENDED SUBLEASE This Amended Sublease made as of May 1, 2013 by and between the COUNTY OF OAKLAND (the "County"), a State of Michigan Constitutional and Municipal Corporation and the CITY OF PONTIAC (the "City"), a Municipal Corporation located in the County of Oakland, State of Michigan, organized and existing under the Home Rule City Act, and the CITY OF PONTIAC TAX INCREMENT FINANCE AUTHORITY (the TIFA") an authority organized and existing under and pursuant to the provisions of Act no. 450, Public Acts of Michigan, 1980, as amended ("Act 450"). WHEREAS, the Oakland County Building Authority (the "Authority") has been incorporated by the County pursuant to Act 31 for the purpose of acquiring, furnishing, equipping, owning, improving enlarging, operating and maintaining a building or buildings, automobile parking lots or structures, recreational facilities and stadiums, and the necessary site or sites therefor, for the use of the County; and WHEREAS, it is proposed that the Authority refinance the outstanding Oakland County Building Authority Refunding Bonds, Series 2006, dated March 1, 2006 (the "2006 Bonds") issued by the Authority pursuant to the Full Faith and Credit General Obligation Lease Contract made as of December 1, 2005 (the "2005 Lease Contract") and Act 31; and WHEREAS, on February 1, 2006, the County and the City entered into a Sublease governing the Project by the 2006 Bonds (the "Sublease"); and WHEREAS, on June 30, 2012, the CITY OF PONTIAC GENERAL BUILDING AUTHORITY was eliminated. The CITY OF PONTIAC GENERAL BUILDING AUTHORITY was a party to the Sublease. WHEREAS, in order to reflect the issuance of the refunding bonds and to reflect changes in circumstances, including the r'TMV (-VG' flfl1T77 77\c", r=1,1=7\T "DTITTn -1-1,7r, Tilrnr -rmw L-11 L viz Evni.itev.... LaiLiNLLI .OU_LLIJ_LF0.7 is necessary for the parties to enter into this Amended Sublease. THEREFORE, IN CONSIDERATION OF THE MUTUAL UNDERTAKINGS AND AGREEMENTS SET FORTH BELOW, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES TO AMEND THIS SUBLEASEAS FOLLOWS: A. Paragraph 1 and Subparagraph 6(b) of the Sublease are entirely deleted and replaced with the following paragraphs: 1. Issuance of Refunding Bonds. The County has caused. the Authority to issue its building authority refunding bonds in the aggregate principal amount of $ (the "Bonds") for the purpose of defraying part or all of the cost of refunding the Oakland County Building Authority Refunding Bonds, Series 2006. The Refunded Bonds are dated May 1, 2013 and bear interest. Interest shall be payable semi- annually until maturity of the Bonds in accordance With the Debt Retirement Schedule set forth on EXHIBIT A to this Amended Sublease. 6(b). Agreement of the City. 6(b)(1). Amount of Payment and Timing of Payment. During the term of this Sublease or any extension thereof, in the event that the TIFA fails, for any reason, to make the full payment to the County pursuant to Subparagraph 6(a), then the City shall pay to the County, as cash rental for the Project, such amount as shall be sufficient, together with the required TIFA payments under Subparagraph 6(a), to enable the County to meet its payment obligation to the Authority on the Project, which payment obligation to the Authority is the principal of and interest on the Bonds as such principal and interest shall become due, whether at maturity or by redemption. During the term of the Sublease or any extensions thereof, the City's payment obligation under this Subparagraph shall be paid to the County at least 30 days before each Bond Payment Date. 6(b)(2). Payment from General Fund or other Funds and No Set-Off. The City shall pay the amount set forth in Subparagraph 6(b) (I) from its general fund or from such other fund(s) as the City may designate and in the time frame set forth in Subparagraph 6(b)...(1). The obligation of the City to make such payments in Subparagraph 6(b)(1) shall not be subject to any set-off by the City nor shall there be any abatement of the cash rental payments for any cause, including, but not limited to, casualty that results in the Project being untenantable. B. Paragraph 8 of the Sublease is entirely deleted and replaced with the following paragraph: 8. Maintenance and Repairs for the Project. 8(a). At its sole expense, the City/TIFA shall, as required by law and as required by the County (in its sole discretion), operate and maintain the Project and keep the Project in good repair and in a safe condition. 8(b). The City's obligation to operate and maintain the Project in good repair and in a safe condition shall include, but not be limited to, providing and paying all of the following: (1) the provision of all operational and maintenance personnel, whether such personnel are employees of the City/TIFA or are third-party contractors; (2) the provision of all utilities (electricity, gas, water, sewerage, drainage, etc.); (3) the provision of all equipment, supplies and other property needed for operation and maintenance; (4) payment of all premiums for insurance 2 required under this Sublease; (5) all taxes levied upon any Party to this Sublease on the account of ownership or use of the Project; and (6)any and all other services or property which are necessary for the efficient, expedient, and lawful operation and maintenance of the Project ("Operational and Maintenance Expenses"). 8(c). All Operational and Maintenance Expenses shall be deemed operational and maintenance expenses for the Project and shall be paid to the appropriate entities and persons when due. The City's obligation to pay Operational Maintenance Expenses shall be deemed a general obligation of the City. 8(d). If the City/TIFA, for any reason, fails to provide and pay for the Operational and Maintenance Expenses, as set forth in this Paragraph, then the County shall give the City/TIFA ten (10) business days written notice of such failure. If the City/TIFA does not provide and/or pay for the Operational and Maintenance Expenses, set forth in the written notice, within the ten (10) business day period or commence action to provide (not pay) for such Operational and Maintenance Expenses within the ten (10) business day period, then the County may, in its sole discretion, provide and pay for such Operational and Maintenance Expenses; provided, however, that the City/TIFR shall reimburse the County for all costs and expenses . associated with providing and paying for the Operational and Maintenance Expenses. The City/TIFA shall pay the County for the Operational and Maintenance Expenses within ten (10) business day of receiving an itemized invoice for the Operational and Maintenance Expenses, detailing the costs and expenses incurred by the County. If the City/TIFA does not pay the invoice within the ten (10) business day period, then the County shall collect the amount of the invoice pursuant to Paragraph 23. 8(e). If the City/TIFA, for any reason, fails to keep the Project in good condition and in a safe condition, as required by law or as required by the County (in its sole discretion), then the County shall give the City/TIFA ten (10) business days written notice of such failures, the conditions causing the failures, and what corrections shall be made to the Project. If the City/TIFA does not correct or commence corrections of the failures/conditions, set forth in the written notice, within the ten (10) business day period, then the County may, in its sole discretion, provide for and pay for corrections of such failures/conditions (which may include demolishing the Project); provided, however, that the City/TIFA shall reimburse the County for all costs and expenses associated with providing for and paying for the correction of the failures/conditions. The City/TIFA shall pay the County within ten (10) business days of receiving an itemized 3 invoice for the costs and expenses associated with correcting the failures/conditions, such invoice shall detail the costs and expenses incurred by the County. If the City/TIFA does not pay the invoice within the ten (10) business day period, then the County shall collect the amount of the invoice pursuant to Paragraph 23. C. Subparagraph 10(b)(5) of the Sublease is entirely deleted and replaced with the following paragraph: 10(b) (5). The City shall provide Real Property Insurance to insure the Project for One Hundred Percent (100%) replacement cost value of the Project. Coverage shall be on a special form, agreed amount, replacement cost basis and be subject to a maximum per occurrence deductible of $35,000.00. Flood and Earthquake coverages shall also be carried for $1,000,000.00 per occurrence, per coverage with a maximum deductible not to exceed $50,000.00 per occurrence, per coverage. In the event any loss is not covered by the City's insurance, then the County shall have the right to enter the Project and cause it to be rendered safe, it the County sole and exclusive discretion, so that there is no danger from the Project to any adjacent property or the public. All costs and expenses associated with rendering the Project safe shall, in the County's sole discretion, be charged/billed to the City or paid by the County and then reimbursed to the County by the City. All costs and expenses associated with "rendering the Project safe and paid by the County, shall be reimbursed to the County within ten (10) business days of receiving an itemized invoice, detailing the costs and expenses. If the City does not pay this invoice within ten (10) business days, then County may collect such amount pursuant to Paragraph 23. D. The following Paragraph 23 is added to the Sublease: 23. Right of the County to Set-Off or Retain City Funds. 23(a). If the City fails, for any reason, to pay the County any monies when and as due under this Sublease, the City agrees, unless expressly prohibited by law, that the County or the County Treasurer, at their sole option, shall be entitled to set-off the amount due to the County from any other City funds in the County's possession. These funds include, but are not limited to, the Delinquent Tax Revolving Fund ("DTRF"). Any set-off or retention of funds by the County shall be deemed a voluntary assignment of the amount due to the County from the City under this Sublease. The City waives any claims against the County for any acts related specifically to the County's off-setting or retaining such amounts. This Paragraph shall not limit the City's legal right to dispute whether the underlying amount 4 setoff or retained by the County was actually due under this Sublease. 23(b). If the County chooses not to exercise its right to setoff or if any setoff is insufficient to fully pay the County any amounts due and owing under this Sublease, then the County shall have the right to charge up to the then- maximum legal interest on any unpaid amount. Interest charges shall be in addition to any other amounts due to the County under this Sublease. Interest charges shall be calculated using the daily unpaid balance method and accumulate until all outstanding amounts and accumulated interest are fully paid to the County. 23.(o). Nothing in this Paragraph shall operate to limit the County's right to pursue or exercise any other legal rights or remedies under this Sublease or law against the City to secure reimbursement of amounts due the County under this Agreement. The remedies in this Section shall be available to the County on an ongoing and successive basis if the City at any time becomes delinquent in its payments under this Sublease. Notwithstanding any other term and condition in this Sublease, if the County pursues any legal action in any court to secure its payments under this Sublease, the City shall pay all costs and expenses, including attorney's fees and court costs, incurred by the County in the collection of any amount owed by the City. E. The CITY OF PONTIAC GENERAL. BUILDING AUTHORITY was eliminated on June 30, 2012, F. Effective Date of Amended Sublease. This Amended Sublease shall become effective on the date of execution by all Parties. IN WITNESS WHEREOF, the CITY OF PONTIAC as authorized by its Emergency Manager, the CITY OF PONTIAC TAX INCREMENT FINANCE AUTHORITY, and the COUNTY OF OAKLAND, by its Board of Commissioners, have caused this Sublease to be signed by their duly authorized officers, and their seals to be affixed hereto, all as of the day and year first above written. 5 WITNESS: CITY OF PONTIAC By: Mayor and By: City Clerk CITY OF PONTIAC TAX INCREMENT FINANCE AUTHORITY By: and By: WITNESS: COUNTY OF OAKLAND By: Chairperon, Board of Commissioners and By: County Clerk 6 STATE OF MICHIGAN SS. COUNTY OF OAKLAND) On this day of , the foregoing instrument was acknowledged before me by and , who are the Mayor and the Clerk of the City of Pontiac. Notary Public, State of Michigan, Oakland County My Commission expires: Acting in the County of Oakland STATE OF MICHIGAN ) SS. COUNTY OF OAKLAND) On this day of , the foregoing instrument was acknowledged before me by and , who are the and of the City of Pontiac Tax Increment Financing Authority. Notary Public, State of Michigan, Oakland County My Commission expires: Acting in the County of Oakland STATE OF MICHIGAN )SS. COUNTY OF OAKLAND) On this day of , the foregoing instrument was acknowledged before me by and , who are the Chairperson of the Board of Commissioners and the County Clerk of the County of Oakland, on behalf of the County. 7 Notary Public, State of Michigan, Oakland County My Commission expires: Acting in the County of Oakland 8 Principal Annual Rate Interest Total EXHIBIT A Period Ending 12/1/13 12/1/14 12/1/15 12/1/16 12/1/17 12/1/18 12/1/19 12/1/20 12/1/21 12/1/22 12/1/23 12/1/24 12/1/25 12/1/26 12/1/27 Jra.r1-oak249 APPENDIX D AMENDMENT TO LEASE CONTRACT THIS AMENDMENT TO FULL FAITH AND CREDIT GENERAL OBLIGATION LEASE CONTRACT ("Amendment to Lease Contract") made as of June 1, 2013, by and between the OAKLAND COUNTY BUILDING AUTHORITY (the "Authority"), 'a building authority organized and existing under and pursuant to the provisions of Act No. 31, Public Acts of Michigan, 1948 (First Extra Session), as amended ("Act 31"), and the COUNTY OF OAKLAND, a County of the State of Michigan (the "County"), WITNESSET H: WHEREAS, the Authority has been incorporated by the County pursuant to Act 31 for the purpose of acquiring, furnishing, equipping, owning, improving, enlarging, operating and maintaining a building or buildings, automobile parking lots or structures, recreational facilities and stadiums, and the necessary site or sites therefor, for the use of the County; and WHEREAS, it is proposed that the Authority refinance the outstanding Oakland County Building Authority Refunding Bonds, Series 2006, dated March 1, 2006 (the "2006 Bonds") issued bv- the Authority pursuant to the Full Faith and Credit General Obligation Lease Contract made as of December 1, 2005 (the "2005 Lease Contract") and Act 31; and WHEREAS, the 2005 Lease Contract is hereinafter sometimes referred to as (the "Lease Contract"); and WHEREAS, in order to make possible the issuance of refunding bonds it is necessary for the parties to enter into this Amendment to Lease Contract. THEREFORE, IN CONSIDERATION OF THE MUTUAL UNDERTAKINGS AND AGREEMENTS SET FORTH BELOW, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES TO THIS AMENDMENT TO LEASE CONTRACT AS FOLLOWS: A. The following paragraphs 24 and 25 are added to the Lease Contract to read as follows: 24. Authorization and Issuance of Refunding Bonds. As soon as practicable after the effective date of the Amendment to Lease Contract, the Authority shall proceed to issue its building authority refunding bonds in the aggregate principal amount of not to exceed $7,750,000 (the "Refunding Bonds"), pursuant to and in accordance with the provisions of Act 31, for the purpose of refunding the Building Authority Refunding Bonds, Series 2006, dated as of March 1, 2006 maturing in the years 2013 through 2027. The Authority shall pledge for the payment of the principal of and interest on the Refunding Bonds the cash rental payments described and required to be paid by the County pursuant to the Lease Contract and this Amendment to Lease Contract. The Refunding Bonds shall be dated May 1, 2013 or such earlier or later date as to be determined. The Refunding Bonds shall bear interest at a rate or rates that will produce a savings true interest cost and shall mature in accordance with the Debt Retirement Schedule set forth on Exhibit A to this Amendment to Lease Contract. Each date on which any payment of principal of and/or interest on any Refunding Bonds is due is referred to herein as a "Bond Payment Date". The County and the Authority recognize and acknowledge that (a) such Debt Retirement Schedule is based upon an assumed interest rate and date of issuance of the Refunding Bonds and assumed Bond Payment Date, all as set forth in Exhibit A, (b) the Bond Payment Dates will be specified in the Award Resolution and (c) the rental payments due under this Amendment to Lease Contract will be determined when the Award Resolution is adopted by the Authority and the Refunding Bonds are sold, by application of the rate or rates of interest actually borne by the Refunding Bonds. 25. Undertaking to Provide Continuing Disclosure for Refunding Bonds. The County and the Authority hereby covenant and agree, for the benefit of the beneficial owners of the Refunding Bonds, to enter into a, written undertaking (the "Undertaking") required by SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities and Exchange Act of 1934 (the "Rule") to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events in accordance with the Rule. This Undertaking shall be enforceable by the beneficial owners of the Refunding Bonds or by the Purchaser(s) on behalf of such holders (provided that the Purchaser(s) right to enforce the provisions of this Undertaking shall be limited to a right to obtain specific enforcement of the obligations hereunder and any failure by the County and the Authority to comply with the provisions of this Undertaking shall not be an event of default with respect to the Refunding Bonds). The County Treasurer and the Chairperson or Treasurer of the Authority, or other officer of the County or Authority charged with the responsibility for issuing the Refunding Bonds, shall provide a Continuing Disclosure Certificate for inclusion in the transcript of proceedings, setting forth the details and terms of the County's and Authority's Undertaking." IN WITNESS WHEREOF, the OAKLAND COUNTY BUILDING AUTHORITY, by its Commission, and the COUNTY OF OAKLAND, by its Board of Commissioners, have caused this Amendment to Lease Contract to be signed by their duly authorized officers, and their seals to be affixed hereto, all as of the day and year first above written. 2 WITNESSES TO SIGNATURES OAKLAND COUNTY BUILDING AUTHORITY OF AUTHORITY OFFICERS: By: Chairperson of its Commission By: Secretary of its Commission WITNESSES TO SIGNATURES COUNTY OF OAKLAND OF COUNTY OFFICERS: By: Chairperson, Board of Commissioners By: County Clerk Jra.rl-oak249 3 STATE OF MICHIGAN) )ss. COUNTY OF OAKLAND) On this day of lbefore me appeared and , to me personally known, who being by me duly sworn, did each say that they are, respectively, the Chairperson and the Secretary of the Commission of the OAKLAND COUNTY BUILDING AUTHORITY and that the foregoing Amendment to Lease Contract was signed and sealed by them on behalf of the Authority by authority of its Commission, and that such persons acknowledged such instrument to be the free act and deed of the Authority. Notary Public, Oakland County Michigan My Commission Expires: (Seal) STATE OF MICHIGAN) )ss. COUNTY OF OAKLAND) On this day of , before me appeared and , to me personally known, who being by me duly sworn, did each say that they are, respectively, the Chairperson of the Board of Commissioners and the County Clerk of the COUNTY OF OAKLAND and that the foregoing Amendment to Lease Contract was signed and sealed by them on behalf of the County by authority of its Board of Commissioners, and that such persons acknowledged such instrument to be the free act and deed of the County. Notary Public, Oakland County, Michigan My Commission Expires: (Seal) Jra.rl-oak249 EXHIBIT A Period Ending Principal Annual Rate Interest Total 12/1/13 96 12/1/14 12/1/15 12/1/16 12/1/17 12/1/18 12/1/19 12/1/20 12/1/21 12/1/22 12/1/23 12/1/24 12/1/25 12/1/26 12/1/27 Jra.r1-oak249 1 Resolution #13031 March 6, 2013 Moved by Bosnic supported by Quarles the resolutions (with fiscal notes attached) on the Consent Agenda be adopted (with accompanying reports being accepted). AYES: Dwyer, Gershenson, Gosselin, Hatchett, Hoffman, Jackson, Long, Matis, McGillivray, Middleton, Quarles, Scott, Spisz, Weipert, Woodward, Zack. (18) 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). ....Y PPROV • •TI CHE: DEPUTY C' A 7TING PURSUANT TO MCL '77 3 STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Lisa Brown, 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 6, 2013, 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 6th day of March, 2013. Lisa Brown, Oakland County