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HomeMy WebLinkAboutResolutions - 2018.05.17 - 23603MISCELLANEOUS RESOLUTION #18209 May 17, 2018 BY: Commissioner Thomas Middleton, Chairperson, Finance Committee IN RE: TREASURER'S OFFICE - RESOLUTION TO BORROW AGAINST DELINQUENT 2017 REAL PROPERTY TAXES To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS the Board of Commissioners of the County of Oakland (the "County") has heretofore adopted a resolution establishing the Oakland County Delinquent Tax Revolving Fund (the "Fund") pursuant to Section 87b of Act No. 206, Public Acts of Michigan, 1893, as amended ("Act 206"); and WHEREAS the purpose of the Fund is to allow the Oakland County Treasurer (the "County Treasurer") to pay from the Fund any or all delinquent real property taxes that are due and payable to the County, the State of Michigan and any school district, intermediate school district, community college district, city, township, special assessment district or other political unit for which delinquent tax payments are due; and WHEREAS it is hereby determined to be necessary for the County to borrow money and issue its notes for the purposes authorized by Act 206, particularly Sections 87c, 87d and 87g thereof; and WHEREAS the County has agreed in a Continuing Covenant Agreement dated as of September 27, 2013, between the County and Bank of America, N.A. to provide to Bank of America, N.A. certain information pursuant to Article VI, Section 6.05 (f) of the Continuing Covenant Agreement which relates to a final official statement or other offering or disclosure document prepared in connection with an offering of securities by the County; and WHEREAS it is estimated that the total amount of unpaid 2017 delinquent real property taxes (the "delinquent taxes") outstanding on March 1, 2018, will be approximately $63,150,000, exclusive of interest, fees and penalties. NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the County, as follows: 1. AUTHORIZING OF BORROWING. Pursuant to and in accordance with the provisions of Act 206, Public Acts of Michigan, 1893, as amended, and especially Sections 87c, 87d and 87g thereof, the County shall borrow the sum of not to exceed Twenty-Five Million Dollars ($25,000,000) and issue its notes (the "notes") therefor for the purpose of continuing the Fund for the 2017 tax year. The exact amount to be borrowed shall not exceed the amount of delinquent taxes outstanding on March 1, 2018, exclusive of interest, fees and penalties. The County Treasurer shall designate the exact amount to be borrowed after the amount of the 2017 delinquent taxes outstanding on March 1, 2018, or the portion of the 2017 delinquent taxes against which the County shall borrow, has been determined. 2. NOTE DETAILS. Pursuant to provisions of applicable law and an order of the County Treasurer, which order is hereby authorized, the notes may be issued in one or more series; shall be known as "General Obligation Limited Tax Notes, Series 2018 1' with a letter designation added thereto if the notes are issued in more than one series; shall be in fully registered form in denominations not exceeding the aggregate principal amounts for each maturity of the notes; shall be sold for not less than 98% of the face amount of the notes; shall bear interest at fixed or variable rates not to exceed the maximum interest rate permitted by applicable law; shall be dated, payable as to interest and in principal amounts, be subject to redemption in whole or in part prior to maturity, including any redemption premiums, and be subject to renewal, at such times and in such amounts, all as shall be designated in the order of the County Treasurer. Notes or portions of notes called for redemption shall not bear interest after the redemption date, provided funds are on hand with the note registrar and paying agent to redeem the same. Notice of redemption shall be given in the manner prescribed by the County Treasurer, including the number of days' notice of redemption and whether such notice shall be written or published, or both. If any notes of any series are to bear interest at a variable rate or rates, the County Treasurer is hereby further authorized to establish by order, and in accordance with law, a means by which interest on such notes may be set, reset or calculated prior to maturity, provided that such rate or rates shall at no time be in excess of the maximum interest rate permitted by applicable law. Such rates may be established by reference to the minimum rate that would be necessary to sell the notes at par; by a formula that is determined with respect to an index or indices of municipal obligations, reported prices or yields on obligations of the United States or the prime rate or rates of a bank or banks selected by the County Treasurer; or by any other method selected by the County Treasurer. FINANCE COMMITTEE VOTE: Motion carried unanimously on a roll call vote with Kowall and Quarles absent. 3. PAYMENT OF PRINCIPAL AND INTEREST. The principal of and interest on the notes shall be payable in lawful money of the United States from such funds and accounts as provided herein. Principal shall be payable upon presentation and surrender of the notes to the note registrar and paying agent when and as the same shall become due, whether at maturity or earlier redemption. Interest shall be paid to the owner shown as the registered owner on the registration books at the close of business on such date prior to the date such interest payment is due, as is provided in the order of the County Treasurer. Interest on the notes shall be paid when due by check or draft drawn upon and mailed by the note registrar and paying agent to the registered owner at the registered address, or by such other method as determined by the County Treasurer. 4. NOTE REGISTRAR AND PAYING AGENT. The County Treasurer shall designate, and may enter into an agreement with, a note registrar and paying agent for each series of notes that shall be a bank or trust company that is qualified to act in such capacity under the laws of the United States of America or the State of Michigan. The County Treasurer may from time to time designate a similarly qualified successor note registrar and paying agent. Alternatively, the County Treasurer may serve as note registrar and paying agent if so designated by written order of the County Treasurer. 5. DISPOSITION OF NOTE PROCEEDS. The proceeds of the sale of the notes shall be deposited into a separate account in the Fund and shall be used to continue the Fund. The County Treasurer shall pay therefrom and from unpledged funds in the Fund, uncommitted funds in the County General Fund and/or any other legally available funds, the full amount of the delinquent tax roll against which the County has borrowed, delivered as uncollected by any tax collector in the County and that is outstanding and unpaid on or after March 1, 2018, in accordance with the provisions of Act 206. If the notes are sold at a premium, the County Treasurer shall determine what portion of the premium, if any, shall be deposited in the 2018 Collection Account established in Section 6 hereof. 6. 2018 COLLECTION ACCOUNT. There is hereby established as part of the Fund an account (hereby designated the "2018 Collection Account") into which account the County Treasurer shall place delinquent taxes against which the County has borrowed, and interest thereon, collected on and after March 1, 2018, or such later date as determined by the County Treasurer, all County property tax administration fees on such delinquent taxes, after expenses of issuance of the notes have been paid, any premium as determined pursuant to Section 5 hereof, and any amounts received by the County Treasurer from the County, the State of Michigan and any taxing unit within the County, because of the uncollectibility of such delinquent taxes. The foregoing are hereby established as funds pledged to note repayment. The County Treasurer shall designate the delinquent taxes against which the County shall borrow for each series of notes. 7. NOTE RESERVE FUND. There is hereby authorized to be established by the County Treasurer a note reserve fund for the notes (the "2018 Note Reserve Fund") if the County Treasurer deems it to be reasonably required as a reserve and advisable in selling the notes at public or private sale. The County Treasurer is authorized to deposit in the 2018 Note Reserve Fund from proceeds of the sale of the notes, unpledged moneys in the Fund, uncommitted funds in the County General Fund and/or any other legally available funds, an amount not exceeding ten percent (10%) of the face amount of the notes. 8. SECURITY FOR PAYMENT OF NOTES. All of the moneys in the 2018 Collection Account and the 2018 Note Reserve Fund, if established, and all interest earned thereon, relating to a series of notes are hereby pledged equally and ratably as to such series to the payment of the principal of and interest on the notes and shall be used solely for that purpose until such principal and interest have been paid in full. When moneys in the 2018 Note Reserve Fund, if established, are sufficient to pay the outstanding principal of the notes and the interest accrued thereon such moneys may be used to retire the notes. If more than one series of notes is issued, the County Treasurer by order shall establish the priority of the funds pledged for payment of each such series. In such case the County Treasurer may establish sub-accounts in the various funds and accounts established pursuant to the terms of this resolution as may be necessary or appropriate. 9. ADDITIONAL SECURITY. Each series of notes, in addition, shall be a general obligation of the County, secured by its full faith and credit, which shall include the County's limited tax obligation, within applicable constitutional and statutory limits, and its general funds. The County budget shall provide that if the pledged delinquent taxes and any other pledged amounts are not collected in sufficient amounts to meet the payments of principal and interest due on each series of notes, the County, before paying any other budgeted amounts, will promptly advance from its general funds sufficient moneys to pay that principal and interest. The County shall not have the power to impose -2- taxes for payment of the notes in excess of constitutional or statutory limitations. If moneys in the 2018 Collection Account and the 2018 Note Reserve Fund, if established, are not sufficient to pay the principal of and interest on the notes, when due, the County shall pay the same in accordance with this Section, and may thereafter reimburse itself from the delinquent taxes collected. 10. RELEASE OF PLEDGE OF 2018 COLLECTION ACCOUNT. Upon the investment of moneys in the 2018 Collection Account in direct non-callable obligations of the United States of America in amounts and with maturities that are sufficient to pay in full the principal of and interest on the notes when due, any moneys in the 2018 Collection Account thereafter remaining may be released from such pledge created pursuant to Section 8 hereof and may be used to pay any or all delinquent real property taxes that are due the County, the State of Michigan and any school district, intermediate school district, community college district, city, township, special assessment district or other political unit to which delinquent tax payments are due for any year or for any other purpose permitted by law. 11. SALE OF NOTES. The County Treasurer is hereby authorized to offer the notes at public or private sale as determined by order of the County Treasurer and to do all things necessary to effectuate the sale, delivery, transfer and exchange of the notes in accordance with the provisions of this resolution. Notes of one series may be offered for sale and sold separately from notes of another series. If the notes are to be sold publicly, sealed proposals for the purchase of the notes shall be received by the County Treasurer for such public sale to be held at such time as shall be determined by the County Treasurer and notice thereof shall be published in accordance with law once in The Bond Buyer, which is hereby designated as being a publication printed in the English language and circulated in this State that carries as a part of its regular service, notices of sale of municipal bonds. Such notice shall be in the form prescribed by the County Treasurer. The County Treasurer is hereby authorized to cause the preparation of an official statement for the notes for the purpose of enabling compliance with SEC Rule 15c2-12 (the "Rule") and to do all other things necessary to enable compliance with the Rule. After the award of the notes, the County will provide copies of a final official statement (as defined in paragraph (e)(3) of the Rule) on a timely basis and in reasonable quantity as requested by the successful bidder or bidders to enable such successful bidder or bidders to comply with paragraphs (b)(3) and (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board. The County Treasurer is authorized to enter into such agreements as may be required to enable the successful bidder or bidders to comply with the Rule. 12. CONTINUING DISCLOSURE The County Treasurer is hereby authorized to execute and deliver in the name and on behalf of the County (i) a certificate of the County to comply with the requirements for a continuing disclosure undertaking of the County pursuant to paragraph (b)(5) or (d)(2) of the Rule, as applicable, and (ii) amendments to such certificate from time to time in accordance with the terms of such certificate (the certificate and any amendments thereto are collectively referred to herein as the "Continuing Disclosure Certificate"). The County hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. 13. EXECUTION AND DELIVERY OF NOTES. The County Treasurer is hereby authorized and directed to execute the notes for the County by manual or facsimile signature and the County Treasurer shall cause the County seal or a facsimile thereof to be impressed or imprinted on the notes. Unless the County Treasurer shall specify otherwise in writing, fully registered notes shall be authenticated by the manual signature of the note registrar and paying agent. After the notes have been executed and authenticated, if applicable, for delivery to the original purchaser thereof, the County Treasurer shall deliver the notes to the purchaser or purchasers thereof upon receipt of the purchase price. Additional notes bearing the manual or facsimile signature of the County Treasurer and upon which the seal of the County or a facsimile thereof is impressed or imprinted may be delivered to the note registrar and paying agent for authentication, if applicable, and delivery in connection with the exchange or transfer of fully registered notes. The note registrar and paying agent shall indicate on each note that it authenticates the date of its authentication. The notes shall be delivered with the approving legal opinion of Dickinson Wright PLLC. Robert W. Baird and Co is hereby retained to act as financial advisor to the County in connection with the sale and delivery of the notes. 14. EXCHANGE AND TRANSFER OF FULLY REGISTERED NOTES. Any fully registered note, upon surrender thereof to the note registrar and paying agent with a written instrument of transfer satisfactory to the note registrar and paying agent duly executed by the registered owner or his or her duly authorized attorney, at the option of the registered owner thereof, may be exchanged for -3- notes of any other authorized denominations of the same aggregate principal amount and maturity date and bearing the same rate of interest as the surrendered note. Each note shall be transferable only upon the books of the County, which shall be kept for that purpose by the note registrar and paying agent, upon surrender of such note together with a written instrument of transfer satisfactory to the note registrar and paying agent duly executed by the registered owner or his or her duly authorized attorney. Upon the exchange or transfer of any note, the note registrar and paying agent on behalf of the County shall cancel the surrendered note and shall authenticate, if applicable, and deliver to the transferee a new note or notes of any authorized denomination of the same aggregate principal amount and maturity date and bearing the same rate of interest as the surrendered note. If, at the time the note registrar and paying agent authenticates, if applicable, and delivers a new note pursuant to this Section, payment of interest on the notes is in default, the note registrar and paying agent shall endorse upon the new note the following: "Payment of interest on this note is in default. The last date to which interest has been paid is [place date]." The County and the note registrar and paying agent may deem and treat the person in whose name any note shall be registered upon the books of the County as the absolute owner of such note, whether such note shall be overdue or not, for the purpose of receiving payment of the principal of and interest on such note and for all other purposes, and all payments made to any such registered owner, or upon his or her order, in accordance with the provisions of Section 3 hereof shall be valid and effectual to satisfy and discharge the liability upon such note to the extent of the sum or sums so paid, and neither the County nor the note registrar and paying agent shall be affected by any notice to the contrary. The County agrees to indemnify and save the note registrar and paying agent harmless from and against any and all loss, cost, charge, expense, judgment or liability incurred by it, acting in good faith and without negligence hereunder, in so treating such registered owner. For every exchange or transfer of notes, the County or the note registrar and paying agent may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. The note registrar and paying agent shall not be required to transfer or exchange notes or portions of notes that have been selected for redemption. 15. BOOK ENTRY SYSTEM. At the option of the County Treasurer and notwithstanding any provisions of this resolution to the contrary, the County Treasurer is hereby authorized to enter into an agreement with a custodian or trustee for the purpose of establishing a "book entry" system for registration of notes to be fully registered. Pursuant to the provisions of such agreement, the notes may be registered in the name of the custodian or trustee for the benefit of other persons or entities. Such agreement shall provide for the keeping of accurate records and prompt transfer of funds by the custodian or trustee on behalf of such persons or entities. The agreement may provide for the issuance by the custodian or trustee of certificates evidencing beneficial ownership of the notes by such persons or entities. For the purpose of payment of the principal of and interest on the notes, the County may deem payment of such principal and interest, whether overdue or not, to the custodian or trustee as payment to the absolute owner of such note. Pursuant to provisions of such agreement, the book entry system for the notes may be used for registration of all or a portion of the notes and such system may be discontinued at any time by the County. The note registrar and paying agent for the notes may act as custodian or trustee for such purposes. 16. ISSUANCE EXPENSES. Expenses incurred in connection with the issuance of the notes, including without limitation any premiums for any insurance obtained for the notes, note rating agency fees, travel and printing expenses, fees for agreements for lines of credit, letters of credit, commitments to purchase the notes, remarketing agreements, reimbursement agreements, purchase or sales agreements or commitments, or agreements to provide security to assure timely payment of the notes, fees for the setting of interest rates on the notes and note counsel, financial advisor, paying agent and registrar fees, all of which are hereby authorized, shall be paid by the County Treasurer from County property tax administration fees on the delinquent taxes, from any other moneys in the Fund not pledged to the repayment of notes and general funds of the County that are hereby authorized to be expended for that purpose. 17. REPLACEMENT OF NOTES. Upon receipt by the County Treasurer of satisfactory evidence that any outstanding note has been mutilated, destroyed, lost or stolen, and of security or indemnity complying with applicable law and satisfactory to the County Treasurer, the County Treasurer may -4- execute or authorize the imprinting of the County Treasurers facsimile signature thereon and thereupon, and if applicable, a note registrar or paying agent shall authenticate and the County shall deliver a new note of like tenor as the note mutilated, destroyed, lost or stolen. Such new note shall be issued and delivered in exchange and substitution for, and upon surrender and cancellation of, the mutilated note or in lieu of and in substitution for the note so destroyed, lost or stolen in compliance with applicable law. For the replacement of authenticated notes, the note registrar and paying agent shall, for each new note authenticated and delivered as provided above, require the payment of expenses, including counsel fees, which may be incurred by the note registrar and paying agent and the County in the premises. Any note issued under the provisions of this Section in lieu of any note alleged to be destroyed, lost or stolen shall be on an equal basis with the note in substitution for which such note was issued. 18. CHARGEBACKS. For any principal payment date of the notes on or after January 1, 2021, the delinquent taxes on property foreclosed and sold pursuant to the provisions of Act 206 and against which the County has borrowed shall, if necessary to ensure full and timely payment of principal of and interest on the notes when due, be charged back to the taxing jurisdictions in such manner as determined by the County Treasurer. The proceeds of such chargebacks shall be deposited in the 2018 Collection Account as security for payment of the notes as described in Section 8 hereof. The provisions of this Section shall not limit the authority of the County Treasurer under the laws of the State of Michigan to charge back delinquent taxes under other circumstances or at other times. 19. PURCHASE OF NOTES BY COUNTY. All or any portion of the notes may be purchased or otherwise acquired by the County if the County Treasurer by order deems such purchase or acquisition to be in the best interest of the County. In such case, the County Treasurer is authorized to take such actions to effectuate the purchase or acquisition, including without limitation entering into an agreement to purchase or repurchase the notes. The purchase or other acquisition of notes by or on behalf of the County does not cancel, extinguish or otherwise affect the notes and the notes shall be treated as outstanding notes for all purposes of this resolution until paid in full. 20. ISSUANCE OF REFUNDING NOTES. The County shall refund all or part of the notes authorized hereunder and/or notes previously issued by the County to continue the Fund for prior tax years if and as authorized by order of the County Treasurer through the issuance of refunding notes (the "Refunding Notes") in an amount to be determined by order of the County Treasurer. Proceeds of the Refunding Notes may be used to redeem such notes and to pay issuance expenses of the Refunding Notes as authorized and described in Section 16 hereof. The County Treasurer shall have all the authority with respect to the Refunding Notes as is granted to the County Treasurer with respect to the notes by the other Sections hereof, including the authority to select a note registrar and paying agent, to apply to the Michigan Department of Treasury for approval to issue the Refunding Notes, if necessary, to cause the preparation of an official statement and to do all other things necessary to sell, execute and deliver the Refunding Notes. The Refunding Notes shall contain the provisions, shall be payable as to principal and interest and shall be secured as set forth herein and as further ordered by the County Treasurer. The Refunding Notes may be sold as a separate issue or may be combined in a single issue with other obligations of the County issued pursuant to the provisions of Act 206 as shall be determined by the County Treasurer. The County Treasurer is authorized to prescribe the form of Refunding Note and the form of notice of sale, if any, for the sale of Refunding Notes. 21. NOTICE OF ISSUANCE OF NOTES. Within thirty (30) days after the issuance of the notes, either (1) a copy of the final official statement or other offering or disclosure document prepared by the County in connection with the issuance of the notes or (2) notice that such information has been filed with the Electronic Municipal Market Access system of the Municipal Securities Rulemaking Board and is publicly available shall be furnished to Bank of America, N.A. at the following locations: Bank of America, N.A. Mail Code: IL4-135-07-28 135 South LaSalle Street Chicago, IL 60603 Attention: Thomas R. Denes Bank of America, N.A. Public Sector Banking Group Mail Code: MI8-900-02-70 2600 W. Big Beaver Road -5- ommissioner Thomas Middleton, District #4 Chairperson, Finance Committee Troy, MI 48084 Attention: Susan Pendygraft, Senior Credit Support Association In accordance with the Continuing Covenant Agreement, the notices provided for above shall be in writing and shall be transmitted by e-mail to the following addresses: ryan.denes@baml.com and susan.pendygraft@baml.com . 22. FORM OF NOTES. The notes shall be in the form approved by the County Treasurer, which approval shall be evidenced by the County Treasurer's execution thereof. Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing resolution. )t/4 Resolution #18209 May 17, 2018 Moved by Fleming supported by Quarles the resolutions (with fiscal notes attached) on the amended Consent Agenda be adopted (with accompanying reports being accepted). AYES: Crawford, Fleming, Gershenson, Gingell, Kochenderfer, KowaII, Long, McGillivray, Middleton, Quarles, Taub, Weipert, Woodward, Zack, Berman, Bowman. (16) NAYS: None. (0) A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the amended Consent Agenda were adopted (with accompanying reports being accepted). 1 HEARN APPOINE THIS hESOLUTION CHIEF DEPUTY COUNTY EXECUTIVE ACTING PURSUANT TO MCL 4$.559A (7) 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 May 17, 2018, 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 17th day of May 2018. Lisa Brown, Oakland County