HomeMy WebLinkAboutResolutions - 2007.06.14 - 284516
MISCELLANEOUS RESOLUTION #07152 June 14, 2007
BY: Planning and Building Committee, Sue Ann Douglas, Chairperson
IN RE: BUILDING AUTHORITY - RESOLUTION APPROVING SUBLEASE IN
CONNECTION WITH THE OAKLAND COUNTY COMMUNITY MENTAL HEALTH
AUTHORITY HOUSING PROJECT LOCATED IN OAKLAND COUNTY, MICHIGAN
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
WHEREAS, the Oakland County Building Authority (the
"Authority") has entered into a contract with the County of
Oakland (the "County") to acquire various facilities (the
"Project") which will be subleased by the Oakland County
Community Mental Health Authority of the County of Oakland,
Michigan ("CMHA"); and
WHEREAS, a sublease (the "Sublease") has been prepared for
that purpose, a copy of which is attached as Appendix 1.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF
COMMISSIONERS OF THE COUNTY OF OAKLAND, MICHIGAN, as follows:
1. The Sublease attached as Appendix 1 is approved and
the officers of the County designated thereon are authorized to
execute and deliver the same on behalf of the County.
2. All resolutions and parts of resolutions, insofar as
they conflict with the foregoing resolution are hereby
rescinded.
Chairperson, on behalf of the Planning and Building
Committee, I move the adoption of the foregoing resolution.
PLANNING AND BUILDING COMMITTEE
PLANNING & BUILDING COMMITTEE VOTE:
Motion carried on a roll call vote with Gershenson absent.
APPENDIX 1
SUBLEASE
THIS SUBLEASE ("Sublease") made and entered into this first
day of , 2007, by and between the COUNTY OF OAKLAND, a
Michigan municipal and constitutional corporation (the
"County"), and the OAKLAND COUNTY COMMUNITY MENTAL HEALTH
AUTHORITY ("CMHA"), a Mental Health Authority organized and
existing under and pursuant to the provisions of Public Act
No. 258 of the Public Acts of Michigan of 1974, as amended by
Public Act No. 290 of the Public Acts of Michigan of 1995 (the
"Act"), and
RECITALS
1. The Oakland County Building Authority (the "Authority") has
been incorporated by the County 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 therefore, for the
use of the County.
2. The County desires to undertake a Project consisting of
assisting CMHA relative to the provision of group homes to
service its consumers, as more fully described in EXHIBIT A
to this Sublease (the "Project"), and it is proposed that the
Authority undertake the Project as more fully described in a
certain Full Faith and Credit General Obligation Lease
Contract (the "County Lease") pursuant to which the Project
is being acquired by the Authority for the County.
3. Once the Authority has acquired the Project and it has been
leased to the County, the County wishes to sublease it to
CMHA pursuant to the terms of this Sublease.
THEREFORE, IN CONSIDERATION OF THE MUTUAL UNDERTAKINGS AND
AGREEMENTS CONTAINED HEREIN, IT IS HEREBY AGREED BY AND BETWEEN
THE PARTIES TO THIS SUBLEASE AS FOLLOWS:
1. Authorization and Issuance of Bonds. The County intends to
cause the Authority to issue its building authority bonds in the
aggregate principal amount of not to exceed $5,500,000 (the
"Bonds") for the purpose of defraying part or all of the cost of
the Project. The Bonds are to be dated the first day of the
month issued in 2007, and shall bear interest at a rate that
will result in a net interest cost of not to exceed four and
seventy-five hundredths percent (4.75%) per annum. Interest
shall be payable semi-annually on and shall begin as specified
in the Bond Resolution, until maturity of the Bonds in
accordance with the Debt Retirement Schedule set forth on
EXHIBIT B-1 to this Sublease. Each date on which any payment of
principal of and/or interest on any Bond is due is referred to
at
herein as a "Bond Payment Date." The Bonds may be payable on
the first day of a different month if necessary to match rental
income paid to the County.
The County and CMHA recognize and acknowledge that:
a. The Estimated Debt Retirement Schedule is based upon
an estimated interest rate and date of issuance of the Bonds,
and assumed Bond Payment Dates, all as set forth in EXHIBIT B-1.
The actual Debt Retirement Schedule as set forth in blank in
EXHIBIT B-2 will be completed after the Bonds are sold.
b. The Bonds shall be sold subject to redemption prior to
maturity at the option of the Authority and at the direction of
CMHA, with the redemption premiums and terms as are set forth in
EXHIBIT C, attached hereto. The Authority agrees that upon
request of CMHA it shall redeem the Bonds, provided that CMHA
has deposited or will deposit sufficient money to permit such
redemption with the Authority prior to calling the Bonds.
c. In the event that, for any reason after the date upon
which this Sublease is executed, but before the Bonds have been
issued, it appears to the County and CMHA that the part of the
Project to be paid by Bond proceeds can be accomplished for less
than $5,500,000, the County shall cause the Authority to reduce
the amount of Bonds to be issued in multiples of Five Thousand
($5,000.00) Dollars, and reduce the annual maturities or the
years of maturities as the County shall direct and as approved
by the Board and as executed by the Executive Director of CMHA.
2. Acquisition of Project. The Authority will acquire the
Project.
3. Maximum Project Cost. The acquisition of the Project shall
occur after issuance of the Bonds. The maximum cost of the
Project shall not exceed $5,500,000. The maximum cost of the
Project will include the cost of all appraisals, environmental
assessments, attorney fees or charges, surveys, titles
insurance, and closing costs.
4. Structural Alteration, Maintenance and Repair, and
Insurance Requirements. In the event any work is done on the
Project, the County shall cause CMHA to require any contractor
or contractors for the Project to procure and maintain insurance
with the following as minimum limits and coverage's.
4.1 INSURANCE REQUIREMENTS
The contractor shall, at its sole cost and expense,
maintain the following insurance coverage(s) on an
occurrence basis in the minimum amounts indicated for the
entire duration of this Sublease. All coverage's shall be
with insurance carriers licensed to do business in Michigan
and acceptable to the Authority. At its sole discretion,
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the Authority, with prior written permission, may allow
alternate insurance carriers.
4.1.1. All Necessary Bonds guaranteeing Performance
4.1.2. All Labor and Material Bonds
4.1.3. Commercial General Liability Insurance: The
Contractor shall procure and maintain during the life of
this Sublease, Commercial General Liability Insurance on an
"Occurrence Basis" with limits of Liability not less than
$3,000,000.00 per occurrence and/or aggregate combined
single limit, Personal Injury, Bodily Injury and Property
Damage. Coverage shall include the following extensions:
(A) Contractual Liability; (B) Products and Completed
Operations; (C) Independent Contractors Coverage; (D) Broad
Form General Liability Extensions or equivalent; (E)
Deletion of all Explosion, Collapse and Underground (XCU)
Exclusions, if applicable; (F) Per contract aggregate.
4.1.4. Professional Liability: The Contractor shall
maintain Professional Liability Insurance, covering the
Contractor, its employees, volunteers and any Contractors
working on behalf of the Contractor, with the minimum
limits of liability of $1,000,000.00 per occurrence or
claim, and $2,000,000.00 annual aggregate for those
employees and contractors providing professional services.
4.1.5. Workers' Compensation Insurance: The Contractor
shall procure and maintain during the life of this Sublease
Workers' Compensation Insurance, including Employers'
Liability Coverage, in accordance with all applicable
statutes of the State of Michigan.
4.1.6. Motor Vehicle Liability: If the Contractor, or
its employees, as defined herein, owns, leases, or uses
vehicles in the transportation of persons served or the
provision of other services and supports funded through
this Sublease, the Contractor shall maintain Motor Vehicle
Liability Insurance in the minimum amount of $1,000,000 per
occurrence combined single limit, including coverage for
hired and leased vehicles, and owned and non-owned autos,
with No-Fault coverage as required by law. If no vehicles
are owned or leased by the Contractor, non-owned and hired
vehicle coverage will be required in lieu of auto fleet
coverage.
4.1.7. Property Insurance Coverage: If the Contractor
has furnishings or equipment provided to them by either the
Authority, the State and/or purchased with Authority,
and/or State funds, the Contractor shall procure and
maintain Property Insurance coverage with replacement-cost
endorsement for furnishings and equipment, and where
applicable, such coverage shall also include coverage for
all personal property of consumers under Contractor's care
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and supervision. The certificates shall maintain limits,
at minimum, equal to the value of the above properties.
4.2 The contractor is solely responsible for any insurance
claims made either during or following the term of this
Sublease for occurrences arising during the term of this
Sublease. The Contractor shall notify the Authority
immediately of all material insurance claims made against
any of the policies set forth above.
4.3 The Parties agree that under Commercial General Liability,
Professional Liability and Motor Vehicle Liability, the
following shall be Additional Insureds: The Oakland County
Community Mental Health Authority including all elected and
appointed officials, all employees and volunteers, all
boards, commissions and /or authorities and their board
members, employees and volunteers, the Oakland County
Building Authority, the County of Oakland including all
elected and appointed officials.
4.4 Cancellation Notice: Workers' Compensation Insurance,
Commercial General Liability Insurance, Professional
Liability Insurance and Motor Vehicle Liability Insurance,
as described above, shall include an endorsement stating
that following: "Thirty (30) days Advance Written Notice of
Cancellation, Non-Renewal and/or Limits Reductions shall be
sent to: Oakland County Community Mental Health Authority
- Purchase Management, 2011 Executive Hills Blvd, Auburn
Hills, MI 48326.
4.5 Proof of Insurance Coverage: The Contractor shall provide
the Authority at the time the contracts are returned for
execution, certificates and policies as listed below:
4.5.1 One (1) copy of the Certificate of Insurance for
Workers' Compensation Insurance;
4.5.2 One (1) copy of the Certificate of Insurance for
Commercial General Liability Insurance;
4.5.3 One (I) copy of the Certificate of Insurance for
Vehicle Liability Insurance;
4.5.4 One (1) copy of the Certificate of Insurance for
Professional Liability Insurance;
4.5.5 If so requested, Certified Copies of all policies
will be furnished.
4.6 Continuation of Coverage: If any of the above coverage
expires during the term of this Sublease, the Contractor
shall deliver renewal certificates and/or policies to CMHA
prior to or on the expiration date.
4.7 If any policy of insurance required herein is written on a
"claims made" basis, each policy shall have a retroactive
date, which is not later than the Sublease Commencement
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Date. Contractor will extend "claims made" coverage from
the Sublease Expiration Date or termination date of this
Sublease, for a minimum period of three years, plus the
statute of limitations for bringing any claim in the State
of Michigan.
5. Sublease Term; Possession.
(a) The County does hereby sublease the Project to CMHA
for a term commencing on the effective date of this Sublease
(determined as provided in Paragraph 30) for a period of twenty-
one (21) years after acquisition of the Project. Possession of
the Project shall vest in CMHA upon the execution of this
Sublease. CMHA agrees to use the Project solely for the
provision of services to mentally ill or developmentally
disabled adults or children.
(b) Upon retirement of the Bonds, the County shall cause
the Authority to convey title in the Project to the County, and
the County agrees to convey title to the Project via Quit Claim
Deed to CMHA, without additional consideration from CMHA,
provided CMHA is not in default of this Sublease.
If CMHA is in default of this Sublease, the County will
have sole discretion as to whether to convey title in the
Project to CMHA, except that if the County can cure the default
by withholding a portion of its statutory payment to CMHA (as
provided for in Section 7), then title shall be conveyed.
(c) Upon termination of this Sublease in the manner
provided for above, County shall promptly pay over to CMHA any
and all funds held by County pertaining to the Bonds or in any
other manner relating to the Project, provided CMHA is not in
Default of this Sublease or does not owe County any other costs
directly related to the Project. If CMHA is in Default for
failure to make any payments required under this Sublease or
owes Direct Costs related to the Project to County, and the
Default or the Direct Costs can be satisfied by County
withholding the necessary sums from the unused funds of the
Project, then County can withhold from the unused funds the
amount necessary to cure the Default and/or satisfy the Direct
Costs. County shall provide CMHA a complete accounting of any
such funds withheld. "Direct Costs" include but are not limited
to the cost to acquire the homes, appraisals, inspections,
closing costs, bond issuance costs including the cost of bond
counsel, financial advisor fees, bond defeasance fees, and other
costs paid by the Building Authority to accomplish the purchase
of the Project.
(d) CMHA shall not sublet or transfer any right, title or
interest in the Project or any part of the Project to any third
party, including a licensed group home provider. If CMHA
licenses or uses a group home provider to operate any part of
the Project, such provider must at all times maintain its
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license(s) to provide services for group homes, or to operate
group homes, or both, with the appropriate state, federal, and
local licensing agency(s). No home shall be operated by an
unlicensed provider.
(e) Subject to the above, CMHA may not assign this
Sublease except to a successor agency that is by statute a part
of the government of the State of Michigan. If CMHA is required
by statute to assign its leases to a successor agency, such
assignment shall be considered to occur by operation of law and
not be a violation of this Sublease.
6. Cash Rental. During the term of this Sublease, CMHA shall
pay to the County as cash rental for the Project such periodic
payments as shall be sufficient to enable the County to meet its
payment obligation to the Authority on the Project to pay the
principal and interest on the Bonds as such principal and
interest shall become due, whether at maturity or by redemption.
(EXHIBIT B-1) During the term of the Sublease or any extensions
thereof, CMHA shall pay to the County, at least fifteen (15)
days before each Bond Payment Date, an amount sufficient to pay
the principal and/or interest due on the Bonds on such Bond
Payment Date.
CMHA hereby agrees to pay the cash rental payments when
due. The obligation of CMHA to make such cash rental payments
shall not be subject to any set-off by CMHA 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.
7. Default. During the term of this Sublease, and while any
amounts remain due and owing on the Bonds issued to fund the
Project, if, for any reason including curtailment of funding by
the State of Michigan or any other source, CMHA realizes that it
will not be able to make a rent payment to the County so as to
enable the County to make its required payment to the Authority
for the payment of principal and interest on the Bonds, CMHA
shall notify the County at least thirty (30)days in advance of
the date that the payment is due to the County. In the event of
such a default CMHA hereby assigns to the County its right to
its statutory payment (paid monthly) from the County to the
extent necessary for the County to recover the rent payment owed
by CMHA, including interest to the County at the prevailing rate
for the period between when the rent payment was due and the
date the County recovered funds equivalent to the amount
advanced by County for payment on the Bonds. It shall be a
material breach of this Sublease for CMHA to fail to notify the
County as set forth above. If CMHA, by reason of funding
cutbacks, or for any other reason, is unable on a continuing
basis to make scheduled rent payments, the County may continue
to hold the statutory payment to the extent necessary for the
County to meet payment on the Bonds. In the event payments on
the Bonds are being made by the statutory payments from the
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County, the option to purchase cannot be exercised by CMHA until
all Bond payments have been made and all other outstanding
Direct Costs relating to this Project paid by the County on
behalf of CMHA have been paid and the Bonds have been retired.
This assignment remedy shall be in addition to any other
remedies the County may have under this Sublease, law, equity,
or P.A. 1948 No. 31.
8. Expenses of Issuing and Payment of Bonds. The County shall
cause the Authority to pay from the proceeds of the sale of the
Bonds the expenses incurred with respect to the issuance of the
Bonds, which has been estimated to be less than $200,000 not
including the bond discount.
9. Maintenance and Repairs. CMHA shall, at its own expense,
operate and maintain the Project and shall keep the same in good
condition and repair. If CMHA decides not to operate the
Project for any period of time, it will still keep the Project
in good repair so as not to endanger any other properties or the
general public. Operation and maintenance shall include (but
not be limited to) CMHA and/or its contractors providing all
required insurance, personnel, equipment and facilities, light,
power, heat, water, sewerage, drainage and other utilities, and
all properties and services of whatever nature, as shall be
necessary or expedient in the efficient and lawful operation and
maintenance of the Project. Premiums for insurance required to
be carried upon or with respect to the Project or the use
thereof and taxes levied on account of the ownership or use of
the Project, or on account of rentals or income from the
Project, shall likewise be deemed operation and maintenance
expenses. The County acknowledges that, pursuant to past
procedure and contract, maintenance and repair may be performed
by contractors retained by CMHA. Any delegation of its duties
under this Paragraph shall not relieve CMHA of its obligations
hereunder.
10. Insurance Proceeds. All insurance proceeds shall be
payable to CMHA, the Authority, and the County as their
interests may appear. In the event of the partial or total
destruction of the Project, or if the Project is for any reason
made unusable, the cash rental payments shall continue unabated.
CMHA shall have the option to use the proceeds of insurance, in
the event of loss or damage to the Project, for the repair or
restoration of the Project. If CMHA shall determine not to use
the proceeds of insurance for the repair or restoration of the
Project, the amount of such insurance proceeds shall be paid to
the County; and by it paid to the Authority which shall deposit
the same in the Bond and Interest Redemption Fund, and CMHA
shall receive that amount as credit on future cash rental
payments due under this Sublease. CMHA's obligation for the
payments provided in Section 6 shall continue until the
obligation is satisfied, and shall not be extinguished or
compromised by paying over any insurance proceeds unless the
insurance proceeds pay off the entire debt. Any insurance
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proceeds in excess of the amount necessary to retire the Bonds
in full and pay any outstanding Direct Costs shall be retained
by CMHA.
11. Insurance Requirements.
(a) Insurance:
CMHA shall procure and maintain, at their own expense,
during the term of this Sublease, all insurances as set
forth below, protecting CMHA, the County and the Authority
against loss on account of damage or injury to persons or
property, imposed by reason of the ownership, possession,
use, operation, leasing, maintenance or repair of the
Project. Such insurance shall be maintained in full force
and effect during the term of this Sublease. Such insurance
shall be made effective from the date of acquisition of the
Project.
(b) Coverage Required:
(1) Commercial General Liability Occurrence Form
Insurance, with a minimum limit of Five Million
($5,000,000) Dollars each occurrence. Coverage shall
include: (i) premises and operations, (ii) products and
completed operations, (iii) personal injury, (iv)
independent contractors as automatically covered under
general liability, (v) broad form contractual liability
including liability assumed under this Sublease, (vi) broad
form property damage, and (vii) liability assumed under an
insured/covered contract, and deletion of all Explosion,
Collapse and Underground (XCU) Exclusions, if applicable.
(2) Motor Vehicle Liability Insurance. If CMHA, or its
employees, owns, leases, or uses vehicles in the ownership,
use, operation of the Project and/or transportation of
persons served, CMHA, shall maintain Motor Vehicle
Liability Insurance (including Michigan No-Fault) in the
minimum amount of Three Million ($3,000,000) Dollars per
occurrence combined single limit. Coverage shall include
hired and leased vehicles, and owned and non-owned autos.
If no vehicles are owned or leased by CMHA, non-owned and
hired automobile liability coverage will be required in
lieu of auto fleet liability coverage.
(3) Workers Compensation Insurance, Coverage A, with
limits statutorily required by any applicable Federal or
State law and Employers Liability Insurance, Coverage B,
with minimum limit of $1,000,000 each accident, disease
each employee, and disease policy limit.
(4) Professional Liability. CMHA shall maintain
Professional Liability Insurance covering CMHA, its
employees, and volunteers working on behalf of CMHA, with
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the minimum limits of liability of One Million ($1,000,000)
Dollars per occurrence or claim. If coverage is written on
a claim made basis, the policy shall contain a Two Million
($2,000,000) Dollars annual aggregate and tail coverage
must be maintained for a period of two (2) years following
the termination of this sublease.
(5) Public Officials Liability. CMHA shall maintain Public
Officials Liability coverage, with minimum limits of One
Million ($1,000,000) Dollars per occurrence or claim. If
coverage is written on a claims-made basis, the policy
shall contain a Two Million ($2,000,000) Dollars annual
aggregate and tail coverage must be maintained for a period
of two (2) years following the termination of this
sublease.
(6) Property Insurance Coverage. CMHA shall provide
Property Insurance to insure the Project for the full One
Hundred Percent (100%) replacement cost value. Coverage
shall be on a special agreed amount or equivalent form, and
be subject to a maximum per occurrence deductible of $1,000
and a self-insured retention of no more than 10% of the
remainder of the loss. Flood and Earthquake coverage's
shall also be carried for all premises with a blanket limit
of One Million ($1,000,000) Dollars per occurrence, per
coverage subject to a maximum per occurrence, per coverage
deductible of Five Thousand ($5,000) Dollars. The insurance
policy shall be endorsed to include the County and
Authority as Loss Payee/Mortgagee. In event of any loss not
covered by CMHA's insurance, the County shall have the
right to enter the Project and cause it to be rendered safe
so that there is no danger from the Project to any adjacent
property or the general public and to charge CMHA as
additional rent of the actual cost of the repair only, and
recover it, if necessary, in accordance with its rights to
affect amounts due to CMHA under Paragraph 6 of this
Sublease.
(c) General:
(1) Insurance policies shall be issued by companies
licensed or approved to do business within the State of
Michigan.
(2) Insurers shall possess a minimum A.M. Best rating of
A6 (or) any Insurer or Municipal Pool as deemed acceptable
by the Oakland County Risk Manager.
(3) The CHMA agrees that under the Commercial General
Liability, Professional Liability, Motor Vehicle Liability,
and Public Officials Liability, policies shall be endorsed
to name as Additional Insureds/Members: The County of
Oakland, and The Oakland County Building Authority,
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including all elected and appointed officials with respect
to all liability solely arising out of this Project.
(4) The County acknowledges that CMHA is currently self-
insured through the Michigan Municipal Risk Management
Authority (MMRMA), and hereby agrees that the coverage
provided through that self-insurance program is acceptable
and meets the insurance requirements contained herein. It
is further understood and agreed CMHA will immediately
notify the County if coverage through the Michigan
Municipal Risk Management Authority is cancelled, non-
renewed or materially changed.
(5) All policies required in this Sublease shall provide a
written thirty (30) days notice to the County and the
Authority of cancellation, non-renewal, or material change.
Renewal certificates of insurance must be provided at least
fifteen (15) days prior to the expiration of all policies.
(6) All insurance policies shall be endorsed to contain a
written waiver of subrogation in favor of the County and
Authority. It is understood and agreed this provision is
waived for specific coverage's written through MMRMA and
only while coverage remains with MMRMA.
(7) All policies of insurance must be on a primary basis,
non-contributory with any other insurance and/or self-
insurance carried by the County and/or the Authority with
respects to any liability and/or physical loss as respect
to the Project.
(8) If CMHA changes its insurance carrier from MMRMA to
any other carrier, or changes its current insurance
coverage with MMRMA, the County and the Authority reserve
the right to require CMHA to amend its insurance coverage's
so as to provide the coverage's required under this
Sublease.
(9) The insurance requirements in this Section 11 shall be
reviewed every five (5) years for adequacy. If it is
determined that the coverage's in effect at the time of
review are inadequate, then CMHA will be required to
increase the coverage's to reflect the litigation awards
and the insurance climate as it exists at that time.
(10) All Certificates of Insurance must provide evidence
that all insurance policies have been endorsed to include
the required provisions and/or notices contained in this
Sublease.
(11) Any and all deductibles or self -insured retentions
contained in any policy of insurance or self-insurance
shall be the sole responsibility of CMHA.
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(d) Indemnification:
(1) To the extent allowed by law CMHA shall indemnify and
hold the County and/or the Authority harmless from any and
all Claims which are incurred by or asserted against the
County and/or the Authority by any person or entity,
alleged to have been caused or found to arise, from the
acts, performances, errors, or omissions of CMHA or CMHA's
Employees, including, without limitation, all Claims
relating to injury or death of any person or damage to any
property caused by CMHA or CMHA Employees.
(2) The indemnification rights contained in this Sublease
are in excess and over and above any valid and collectible
insurance rights/policies. During the term of this
Sublease, if the validity or collectability of the CMHA'S
insurance is disputed by the insurance company, the CMHA
shall indemnify the County and/or the Authority for all
Claims asserted against the County and/or the Authority and
if the insurance company prevails, the CMHA shall indemnify
the County and/or the Authority for uncollectible accounts.
(3) CMHA shall have no rights against the County and/or
the Authority for any indemnification (e.g., contractual,
equitable, or by implication), contribution, subrogation,
and/or any other right to be reimbursed by the County and
/or the Authority except as expressly provided herein.
(4) CMHA waives and releases all actions, liabilities,
loss and damage (including any subrogated rights) it may
have against the County and/or the Authority based upon any
Claim brought against the County and/or the Authority by a
CMHA Employee.
(5) For the purposes of this section on Indemnification
the following defined terms apply:
(a.) "CMHA Employee" means without limitation,
any employees, officers, directors, members, managers,
trustees, volunteers, attorneys, and representatives of
CMHA, and also includes any CMHA licensees,
concessionaires, contractors, subcontractors, independent
contractors, contractor's suppliers, subsidiaries, joint
ventures or partners, and/or any such persons, successors
or predecessors, employees, (whether such persons act or
acted in their personal, representative or official
capacities), and/or any and all persons acting by, through,
under, or in concert with any of the above. "CMHA
Employee" shall also include any person who was a CMHA
Employee at anytime during the term of this Sublease but,
for any reason, is no longer employed, appointed, or
elected in that capacity.
(b.) "Claims" means any alleged losses, claims,
complaints, demands for relief or damages, suits, causes of
action, proceedings, judgments, deficiencies, liability,
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penalties, litigation, costs, and expenses, including, but
not limited to, reimbursement for reasonable attorney fees,
witness fees, court costs, investigation expenses,
litigation expenses, amounts paid in settlement, and/or
other amounts or liabilities of any kind which are imposed
on, incurred by, or asserted against the county, or for
which the county may become legally and/or contractually
obligated to pay or defend against, whether direct,
indirect or consequential, whether based upon any alleged
violation of the federal or the state constitution, any
federal or state statute, rule, regulation, or any alleged
violation of federal or state common law, whether any such
claims are brought in law or equity, tort, contract, or
otherwise, and/or whether commenced or threatened.
(c.) "County Agent" means all elected and appointed
officials, directors, board members, Authority members,
council members, commissioners, employees, volunteers, or
representatives of the County, and/or any such persons'
successors (whether such person act or acted in their
personal representative or official capacities), and/or any
persons acting by, through, under, or in concert with any
of them. "County Agent" shall also include any person who
was a "County Agent" anytime during the term of this
Sublease but, for any reason, is no longer employed,
appointed, or elected and serving as an Agent.
12. No Unlawful Use Permitted. The Project shall be used for
those purposes permitted by P.A. 1948, No 31, Public Acts of
Michigan (First Extra Session), as amended, (and limited by
Paragraph 5(b) of this Sublease), and shall not be used or
permitted to be used in any unlawful manner. To the extent
permitted by law, CMHA shall hold the County and Authority
harmless and keep it fully indemnified at all times against any
loss, injury or liability to any persons or property by reason
of the acts or negligence of CMHA in the use, misuse or non-use
of the Project or from any act or omission in, on or about the
Project. CMHA shall, at its own expense, make any changes or
alterations in, on or about the Project which may be required by
any applicable statute, charter or governmental regulation or
order and shall hold the County and the Authority harmless and
free from all costs or damages with respect thereto.
13. Alterations to the Project. CMHA may make any alterations
to the Project that enhance the value of the Project and advance
the purposes of the Project as stated in Section 5 herein. Prior
to CMHA beginning any such alteration, the plans for the
alteration must be submitted to County for its approval, which
approval will not unreasonably be withheld. Alterations do not
include routine maintenance and repairs, or minor structural
modifications for the benefit of the residents.
14. Agreement as to use of the Project. CMHA agrees that in
order to assure the County and the Authority that the bonds
issued to finance the Project are exempt from federal income
12
taxes that it will execute and deliver, prior to the delivery of
the Bonds, an Arbitrage Certificate in the form attached hereto
as EXHIBIT D. CMHA further agrees that during the term of this
Sublease, it will cause all use of the Project to comply with
its representations made in the Arbitrage Certificate attached
as EXHIBIT D.
15. Failure to Comply with Paragraph 14. CMHA agrees that if
for any reason it cannot continue to comply with Paragraph 14,
it will before this occurs immediately proceed to refinance the
Project through conventional financing and thereafter acquire
the Project from the County under the same terms and conditions
as are set forth in its Option to Purchase set forth in
Paragraph 21. (Arbitrage Certificate)
16. Right of Inspection. County Agents or the Authority may
enter upon the Project during the term of this Sublease for the
purpose of inspecting the Project and determining whether CMHA
is complying with the terms of this Sublease.
If the County determines that any necessary or mandatory
repairs, upgrades, or maintenance have not been performed, the
County may, at its option, enter the Project, or any part of the
Project to perform such necessary or mandatory repairs,
upgrades, or maintenance. If the County so acts, it will bill
CMHA for such necessary or mandatory repairs, upgrades, or
maintenance, and CMHA will promptly reimburse the County. In the
event CMHA fails to reimburse the County within sixty (60) days,
the County may recover the amounts owing in accordance with
Section 7.
The County and Authority shall provide a minimum of seventy-two
hours written notice to CMHA of its intent to enter the Project
to either inspect or make any repairs. The CMHA shall have the
right to be present and accompany any such County Agent or the
Authority during any such inspection or repairs.
The County, to the extent required by law, shall be responsible
for the acts of it Agents during any such inspections or
repairs, however, nothing in this paragraph shall be construed
as modifying or affecting the immunity granted by law to the
County and/or the Authority or creating any CMHA right to be
indemnified (either legally, equitably or constructively) by the
County in any such matter.
17. Contractual Rights of Bondholders. Inasmuch as this
Sublease provides the security for payment of the principal and
interest on the Bonds, it is hereby declared that this Sublease
is made for the benefit of the holders from time to time of the
Bonds, as well as for the benefit of the parties, that such
holders shall have contractual rights under this Sublease. In
the event of any default under this Sublease on the part of
CMHA, the County and the Authority and the holders of the Bonds
shall have all rights and remedies provided by law. The parties
13
further agree that they will not do, or permit to be done, any
act, and that this Sublease will not be amended in any manner,
which would impair the security of the Bonds or the rights of
the holders of the Bonds. An amendment of this Sublease to
authorize the issuance of additional Bonds and providing the
payment of additional cash rentals for the payment of such Bonds
shall not be deemed to impair the security of the Bonds or the
rights of the holders of the Bonds.
18. Appurtenant Facilities. The Project locations may include
roadways, walks, drives, parking areas and landscaping that are
of benefit to and necessary to the full use and enjoyment of the
Project. CHMA will maintain these appurtenant facilities in good
repair and condition for the use and enjoyment of the users and
occupants of the Project.
19. Signs. The parties agree that CMHA may post signs on the
Leased Premises indicating its presence on the Leased Premises.
Any such signs shall comply with local signage ordinances and
CMHA shall apply for and receive any approval(s) required by
such ordinances.
20. Quiet Possession. Upon CMHA's performance of the
covenants, conditions and provisions under this Sublease, CMHA
shall have quiet possession of the Leased Premises for the
entire period of the Sublease.
21. Option to Purchase. CMHA shall have an option to purchase
the Leased Premises from the County during the term of this
Sublease so long as CMHA is not in default of any provision of
this Sublease. If CMHA is in default of any provision of this
Sublease the County will have sole discretion as to whether to
allow CMHA to exercise the option under this Paragraph. The
option shall be exercisable on six (6) months notice to the
County, which notice shall be addressed to the Oakland County
Clerk, County Service Center, Building #12 East, 1200 N.
Telegraph Road, Pontiac, Michigan 48341 and with a copy to the
Oakland County Executive at County Service Center, Building #34
East, 1200 N. Telegraph Road, Pontiac, Michigan 48341. The
conveyance of the Leased Premises shall be contingent upon
payment to the County of: (a) all outstanding principal and
interest due on the Bonds to be issued pursuant to the Building
Authority Lease together with all call premiums, and all
expenses of establishing an Escrow to Defease Bonds which can
not be called for redemption on the date the Leased Premises are
to be conveyed to CMHA, and (b) payment of all other expenses of
the County related to transferring title to CMHA under this
option.
22. Entire Agreement. This Sublease memorializes all the
prior discussions, understandings and agreements involved in
negotiating this Sublease. No provision of this Sublease may be
amended or added to except by written agreement signed by both
parties.
14
23. Severability. Any provision of this Sublease which is
found by a court of competent jurisdiction to be invalid, void
or illegal shall in no way affect, impair or invalidate any
other provisions contained in this Sublease and such other
provisions shall remain in full force and effect.
24. Choice of Law. This Sublease shall be governed by Michigan
law. The language of all parts of this Sublease is intended to
and under all circumstances shall be construed as a whole
according to its fair meaning and not strictly construed for or
against any party.
25. Successors and Assigns. This Sublease shall inure to the
benefit of, and be binding upon, the respective parties hereto
and their successors and assigns, provided, however, that no
assignment shall be made in violation of the terms of this
Sublease nor shall any assignment be made by CMHA without the
approval of the County or which would impair the security of the
Bonds or the rights of the holders of the Bonds.
26. Abandonment of Project. In the event none of the Bonds to
finance the Project are issued by the Authority on or before
December 1, 2008, the Project shall be abandoned and none of the
parties shall have any further obligations under this sublease,
except that CMHA shall pay all Direct Costs of the Authority or
County incurred to the date of abandonment that relate to this
Project. The County will provide a complete accounting of the
Direct Costs.
In the event none of the Bonds to finance the Project are
issued by the Authority on or before December 1, 2008, the
Project shall be abandoned and none of the parties shall have
any further obligations under this sublease, except that CMHA
shall pay from available funds its share of all Direct Costs of
the Authority or County incurred to the date of abandonment of
this Project. The County will provide an itemized bill for
Direct Costs.
27. Consents, Notices, Etc. The right to give any consent,
agreement or notice required or permitted in this Sublease shall
be vested, in the case of the County, in its Board of
Commissioners, and in the case of CMHA, in its Board. Any
notice required or permitted to be given under this Sublease
shall be given by delivering the same, in the case of the
County, to the County Clerk, and in the case of CMHA, to its
Executive Director.
28. Changes in Law or Corporate Status. In the event there
shall occur changes in the Constitution or statutes of the State
of Michigan which shall affect the organization, territory,
powers or corporate status of CMHA or the County, the terms and
provisions of this Sublease shall be unaffected thereby insofar
as the obligation of CMHA to make the cash rental payments is
15
concerned. In the event of a change in the Constitution or
statutes of the State of Michigan which has the effect of
dissolving CMHA at any point in time prior to retirement of the
bond issue, then CMHA agrees that the Project, or any portion of
the Project, may be sold to satisfy the obligation on the Bonds.
Further, CMHA agrees that any deficiency between the net sale
price available to be applied to retire the Bonds and the amount
needed to retire the Bonds will be paid to the Authority by
CMHA, and be applied to retire the Bonds. CMHA further agrees to
make no claim for any equity it has in the Project until the
Bonds are paid off and retired. The proceeds of any sale or
other liquidation of any interest of CMHA in the Project are
hereby impressed with a first and prior lien for payment of any
outstanding Bonds or other obligations of the Authority incurred
by reason of the Project or any additions or improvements
thereto.
29. Remedies. The County shall have available to it any and all
remedies allowed under this Sublease, law, equity or P.A. 1948
No. 31, to enforce the terms and conditions of this Sublease.
30. Effective Date of Sublease. This Sublease shall become
effective on the date of execution.
IN WITNESS WHEREOF, for an in consideration of the mutual
assurances, promises, acknowledgements, and representations set
forth in this Sublease, the OAKLAND COUNTY COMMUNITY MENTAL
HEALTH AUTHORITY, by ITS Board, 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.
WITNESS: OAKLAND COUNTY COMMUNITY MENTAL
HEALTH AUTHORITY
By:
and
By:
COUNTY OF OAKLAND
By:
Chairman, Board of Commissioners
By:
County Clerk
Las.r4-oak174
16
EXHIBIT A TO THE SUBLEASE
Project Description:
The Project will consist of the acquisition of various
facilities located throughout the County of Oakland to be used
by the Oakland County Community Mental Health Authority.
Legal Descriptions
Parcel 1
Legal Description: T3N, R7E, SEC 31 PART OF SE BEG AT PT DIST
S 00-18-45 W 306.76 FT & N 89-38-26 W 290.25 FT FROM E COR, TH
N 89-38-26 W 290.24 FT, TH S 00-18-45 W 242.08 FT, TX S 89-22-35
E 290.25 FT, TH N 00-18-45 E 243.45 PT TO BEG 1.62 A
Parcel 2
Legal Description: Lot 51 & North 30 ft of Lot 52, Meadowbrook
Lake Subdivision
Assessor's Parcel No. 22-26-403-011
Neighborhood or Project Name: Meadowbrook Subdivision
Map Reference: SMSA 2160
Census Track: 1360
Parcel 3
Legal Description: SEC 31 PART OF SW BEG AT PT 01ST N 64-02-53
E 65.38 FT FROM SW SEC COR, TX N 64-02-53 E 215.30 FT, ALG CENT
LINE OF INDIAN LAKE RD, TH N 02-33-07 W 463.52 FT, TH S 87-26-53
W 197.60 FT, TH S 02-33-07 E 549.03 FT TO BEG 2.30 A
Parcel 4
Legal Description: Town 4 North, Range 8 East, Section 10, part
of the SW beginning at point distant S 66 degrees 12 minutes
00 seconds E 236.86 feet from SW corner of E of SW 1/4 ;
thence S 55 degrees 06 minutes 00 seconds E 150 feet; thence S
09 degrees 50 minutes 26 seconds W 474.27 feet; thence N 66
degrees 12 minutes 00 seconds W 100 feet to beginning
Parcel 5
Legal Description: T2N, R9E, SECTION 14, PINE LAKE ESTATES NO.
4, LOT 243 COMMONLY KNOWN AS 4112 DAWN LANE, WEST BLOOMFIELD, MI
48033
Parcel 6
Legal Description: Lot 16 Apple Hill Farms
Assessor's Parcel No: 03-19-302-005
Neighborhood or Project Name: Apple Hill Farms
Map Reference: SMSA 2160
Census Track: 1227
Parcel 7
Legal Description: PARCEL A BEG AT A POINT IN THE CENTERLINE OF
GRANGE HALL RD WHICH BEARS N 0-25-00 W 1633.14 FT N 79-08-30 E
388.84 FT FROM THE SOUTH R COR OF SEC 29; THENCE ALONG THE
CENTERLINE OF GRANGE HALL RD N 79-08-30 E 129.57 FT THENCE S 0-
58-40 E 406.43 FT THENCE S 88-45-10 W 129.43 FT THENCE N 0-42-45
W 384.81 FT TO THE POINT OF THE BEG
Parcel 8
Legal Description: Lot 3, Brandon Beautiful
Assessor's Parcel No: 03-16-351-005
Neighborhood or Project Name: Brandon Beautiful
Map Reference: SMSA 2160
Census Track: 1227
Parcel 9
Legal Description: T5N R7E, SEC 7 PART OF SE 1 1 OF SE BEG AT
PT, DIST N 88-22-20 W 560 FT FROM SE SEC COR TH N 00-39-20 E 280
FT, THE N 88-22-20 W 254.89 FT, TB S 44-53-20 W 384.43 FT, TH S
88-22-20 E 523.10 FT TO BEG 2.50 A
Assessor's Parcel No: 01-70-476-011
Neighborhood or Project Name: N/A
Map Reference: SMSH 2160
Census Track: 1240
Parcel 10
Legal Description: LOT 22, MEADOWBROOK MANOR NO 1 T1N R8E
SECTION 36 COMMONLY KNOWN AS 41386 LLEWELYN, NOVI, MI 48050
Parcel 11
Legal Description: PARCEL 4, BEG NW COR OF SEC 27; TH ALONG THE
LINE OF SAID SEC 27 N 88-53-15 E 520.15 FT TB S 275.00 FT TH S
88-53-15 W 520.15 FT TO THE W LINE OF SEC 27 TH ALONG SAID W
LINE OF SEC 27 N 275.00 FT TO THE POINT OF BEG
Parcel 12
Legal Description: BEGINNING AT THE POINT DIST S 89-30-47 W
1325.69 FT N 00-02-10 E 44.58 FT FROM THE E 14 COR TH N 47-37-10
W 421.64 FT TH N 00-11-10 W 217.73 FT TB N 89-13-26 E 312.52 FT
TH S 00-02-10 W 506.17 FT TO THE POINT OF THE BEGINNING
TOGETHER WITH AND SUBJECT TO THE RIGHTS OF INGRESS AND EGRESS
OVER A 66 FOOT PRIVATE ROADWAY AND PUBLIC UTILITIES EASEMENT
WHOSE CENTER LINE IS DESCRIBED AS BEG AT A POINT DISTANT DUE S
33 FT FROM THE E 141 COR; TH S 89-22-45 W 1238.82 FT N 47-37-10 W
539.41 FT N 00-11-10 W 620.66 FT TO THE CENTER OF 60 FT CUL-DE-
SAC
Parcel 13
Legal Description: SEC 31 PART OF SN FRAC % BEG AT PT DIST S 02-
03-30 E 948.30 FT & N 89-26-00 E 2446.65 FT FROM W % COR, TH N
89-26-00 E 165 FT, TH N 12-12-00 W 673.84 FT, TH S 89-26-00 W
165 FT, TH S 12-12-00 E 673.84 FT TO THE BEG 2.50
Parcel 14
Legal Description: SEC 5 PART OF SE 141 BEG AT PT DIST S 88-20-19
W 906.66 FT FROM SE SEC COR, TB S 88-20-19 W 453.35 FT, TH N 01-
2
12-26 W 613.03 FT, TH N 88-32-07 E 452.43 FT, TH S 01-17-32 E
611.47 FT TO BEG 6.37 A
Parcel 15
Legal Description: PART OF W OF NE BEG AT PT DIST E 1085.57
FT FROM N 1,1 COR, TB E 345.50 FT, TB S 00-51-44 E 622.05 FT, TH W
354.86 FT, TH N 621.98 FT TO BEG 5 AP169A-1
Parcel 16
Legal Description: SEC 14 DALGLEISH FARMS PART OF LOT 10 BEG AT
SE LOT COR, TH N 02-37-22 W 555.84 FT, TH S 87-55-30 W 207.35
FT, TH S 02-37-22 E 465.64 FT, TB N 87-58-49 E 45.35 FT, TH S
02-37-22 E 90 FT, TH N 87-58-49 E 162 FT TO BEG
Parcel 17
Legal Description: PART OF SE 1K4 SEC OF 27, TOWN 5 N, RANGE 11 E:
BEG AT A POINT DISTANT N 89-48-10 W 372.48 FT FROM SE SEC COR TH
N 89-48-10 W 200 FT TH N 00-18-00 W 281.31 FT TH S 89-48-10 E
200 FT TH S 00-18-00 E 281.31 FT TO BEG
Parcel 18
Legal Description: SEC 14 PART OF SW IK4 OF SW R BEG AT PT DIST N
367.34 FT FROM SW SEC COR, TB N 214.05 FT, TB S 88-49-00 E 200
FT, TB S 214.05 FT, TB N 88-49-00 W 500 FT TO BEG 2.46 A
Parcel 19
Legal Description: T3N, R7E, SEC & PART OF SW BEG AT PT DIST N
00-29-32 E 1024 FT & S 89-30-29 E 750.29 FT FROM SW SEC COR, TH
S 89-30-29 E 320 FT, TB S 00-29-32 W 609.98 FT, TH S 89-44-40 W
320.03 FT, TB N 00-29-32 E 614.16 FT TO BEG 4.50 A
Parcel 20
LOT 15, SUPERVISORS PLAT, RIVERWOOD ESTS.
Preliminary Project Cost Estimate:
Costs of Financing (including bond discount) $ 172,525.00
Acquisition Costs (including additional houses) 5,327,475.00
Total Costs $5,500,000.00
Las.r4-oak174
3
EXHIBIT B-1
[GO TO LAS.LOTUS.20-0AK174-DEBT]
EXHIBIT B-2
[TO BE INSERTED AFTER BONDS ARE SOLD]
2
EXHIBIT C
REDEMPTION PROVISIONS
Bonds maturing prior to March 1, 2015, shall not be subject
to redemption prior to maturity. Bonds maturing on and after
March 1, 2015 shall be subject to redemption in whole or in part
on any interest payment date on and after March 1, 2014, and in
any order, at the option of the Authority, at par, plus accrued
interest to the date fixed for redemption.
With respect to partial redemptions, any portion of a bond
outstanding in a denomination larger than the minimum authorized
denomination may be redeemed provided such portion and the
amount not being redeemed each constitutes an authorized
denomination. In the event that less than the entire principal
amount of a bond is called for redemption, upon surrender of the
Bond to the bond registrar, the bond registrar shall
authenticate and deliver to the registered owner of the Bond a
new bond in the principal amount of the principal portion not
redeemed.
Notice of redemption shall be sent to the registered holder
of each Bond being redeemed by first class mail at least thirty
(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 the resolution authorizing
the issuance of the Bonds. Any defect in such notice shall not
affect the validity of the redemption proceedings. Bonds so
called for redemption shall not bear interest after the date
fixed for redemption provided funds are on hand with the bond
registrar to redeem the same.
Las.r4-oak174
EXHIBIT D
[CMHA'S ARBITRAGE CERTIFICATE]
[GO TO LAS.R6-0AK174]
2
11111111111111114 1111 1.111
EXHIBIT B-1
$5,500,000
OAKLAND COUNTY BUILDING AUTHORITY
BUILDING AUTHORITY BONDS, SERIES 2007
(CMH PROJECT)
DEBT SERVICE SCHEDULE
Total
Date Principal Coupon Interest Debt Service Annual Total
09/01/07 $37,122.92 $37,122.92
03/01/08 $175,000.00 3.55% 111,368.75 286,368.75 $323,491.67
09/01/08 108,262.50 108,262.50
03/01/09 200,000.00 3.60% 108,262.50 308,262.50 416,525.00
09/01/09 104,662.50 104,662.50
03/01/10 200,000.00 3.65% 104,662.50 304,662.50 409,325.00
09/01/10 101,012.50 101,012.50
03/01/11 225,000.00 3.65% 101,012.50 326,012.50 427,025.00
09/01/11 96,906.25 96,906.25
03/01/12 225,000.00 3.70% 96,906.25 321,906.25 418,812.50
09/01/12 92,743.75 92,743.75
03/01/13 225,000.00 3.70% 92,743.75 317,743.75 410,487.50
09/01/13 88,581.25 88,581.25
03/01/14 250,000.00 3.75% 88,581.25 338,581.25 427,162.50
09/01/14 83,893.75 83,893.75
03/01/15 250,000.00 3.85% 83,893.75 333,893.75 417,787.50
09/01/15 79,081.25 79,081.25
03/01/16 250,000.00 3.95% 79,081.25 329,081.25 408,162.50
09/01/16 74,143.75 74,143.75
03/01/17 250,000.00 4.00% 74,143.75 324,143.75 398,287.50
09/01/17 69,143.75 69,143.75
03/01/18 275,000.00 4.00% 69,143.75 344,143.75 413,287.50
09/01/18 63,643.75 63,643.75
03/01/19 275,000.00 4.10% 63,643.75 338,643.75 402,287.50
09/01/19 58,006.25 58,006.25
03/01/20 300,000.00 4.15% 58,006.25 358,006.25 416,012.50
09/01/20 51,781.25 51,781.25
03/01/21 300,000.00 4.15% 51,781.25 351,781.25 403,562.50
09/01/21 45,556.25 45,556.25
03/01/22 325,000.00 4.20% 45,556.25 370,556.25 416,112.50
09/01/22 38,731.25 38,731.25
03/01/23 325,000.00 4.25% 38,731.25 363,731.25 402,462.50
09/01/23 31,825.00 31,825.00
03/01/24 350,000.00 4.30% 31,825.00 381,825.00 413,650.00
09/01/24 24,300.00 24,300.00
03/01/25 350,000.00 4.35% 24,300.00 374,300.00 398,600.00
09/01/25 16,687.50 16,687.50
03/01/26 375,000.00 4.40% 16,687.50 391,687.50 408,375.00
09/01/26 8,437.50 8,437.50
03/01/27 375,000.00 4.50% 8,437.50 383,437.50 391,875.00
$5,500,000.00 $2,623,291.67 $8,123,291.67 $8,123,291.67
Interest Start Date (Dated Date): 07/01/07
las\lotus\estimated debt CMHA debt schedule 20-oak174-debt.xls 5/23/2007
EXHIBIT D
$5,500,000
OAKLAND COUNTY BUILDING AUTHORITY
Oakland County, Michigan
OAKLAND COUNTY BUILDING AUTHORITY
BUILDING AUTHORITY BONDS, SERIES 2007
TAX CERTIFICATE OF
OAKLAND COUNTY COMMUNITY MENTAL HEALTH AUTHORITY
RELATING TO ARBITRAGE LIMITATIONS,
PRIVATE ACTIVITY BOND REQUIREMENTS, AND
MISCELLANEOUS RESTRICTIONS
ISSUED: ,2007
$5,500,000
OAKLAND COUNTY BUILDING AUTHORITY
Oakland County, Michigan
OAKLAND COUNTY BUILDING AUTHORITY
BUILDING AUTHORITY BONDS, SERIES 2007
TAX CERTIFICATE OF
OAKLAND COUNTY COMMUNITY MENTAL HEALTH AUTHORITY
RELATING TO ARBITRAGE LIMITATIONS,
PRIVATE ACTIVITY BOND REQUIREMENTS AND
MISCELLANEOUS RESTRICTIONS
TABLE OF CONTENTS
Page
PURPOSE OF CERTIFICATE 1
I. Good Faith Certification 1
2. Incorporation of Underwriter's Certificate and Bond Insurer's Certificate 1
3. Reliance by Bond Counsel 1
PART I. IDENTIFICATION OF STATUS OF ISSUER, OF BONDS AND OF MATTERS
CONCERNING ARBITRAGE LIMITATIONS
INTRODUCTION 2
4. Certificate Required by Regulations 2
STATUS OF ISSUER 2
5. Issuer a Political Subdivision 2
PURPOSE 2
6. Issuance and Purpose of Bonds 2
7. Description of Project 2
BOND TERMS, DATES AND PRICES 2
8. Terms of the Bonds in General 2
9. Sale Date; Purchase Price 3
10. Issue Price; Plain Par Bonds 3
11. Identification of Issue 3
12. Identification of Issue Date 4
13. Actual and Constructive Receipts 4
YIELD 4
14. Fixed Yield Issue 4
15. Redemption Prior to Maturity 4
16. Qualified Guarantee 4
17. No Hedges 5
18. Yield of the Bonds 5
PROCEEDS AND DEPOSITS 5
19. Identification of Sale Proceeds 5
20. Deposit of Sale Proceeds 5
(i)
21. Identification and Deposit of Investment Proceeds 5
22. Other Amounts 6
SINGLE PURPOSE ISSUE 6
23, Single Purpose 6
PROCEEDS ELIGIBLE FOR TEMPORARY PERIOD INVESTMENT 6
24. Use of Acquisition and Renovation Fund 6
25. Sale Proceeds for Reimbursement 6
26. Qualification for Temporary Period Investment 6
REASONABLY REQUIRED RESERVE FUNDS 7
27. No Reserve Fund 7
MINOR PORTION 7
28. No Minor Portion 7
CERTAIN REPLACEMENT PROCEEDS: DEBT SERVICE FUNDS 7
29. Security and Payment of Bonds 7
30. Bona Fide Debt Service Fund 8
31. Investment of Principal and Interest Fund 8
32. No Other Debt Service or Pledged Funds 8
33. No Negative Pledges 8
OTHER REPLACEMENT PROCEEDS 8
34. No Other Funds For Purposes 8
35. Term Not Longer Than Necessary 8
COMPLIANCE WITH REBATE REQUIREMENT 9
36. Covenant of the Issuer 9
37. 6 Months Expenditure Exception 10
PART II. PRIVATE ACTIVITY BOND REQUIREMENTS
38. Identification of Users 10
39. Qualified General Public Use 10
40. No Management Contract or Operating Contract 10
41. No Other Special Entitlements 10
42. No Private Business Use 10
RESTRICTIONS APPLICABLE TO ALL PRIVATE ACTIVITY BONDS
43. Substantial User Limit 11
44. Maturity Limit 11
SPECIAL RULES FOR OUTPUT FACILITIES 11
45. Safe Harbor for Leases and Other Use Agreement 11
PRIVATE LOAN FINANCING TEST 11
46. No Loans 11
47. Prohibited Facilities 11
48. Public Hearing and Approval 11
49. Costs of Issue Limit; Credit Enhancement Limit 11
DEFEASANCE REMEDIAL ACTION LIMITATION 12
(ii)
50. Compliance with Limitation on Regulatory Defeasance Remedial Action 12
PART III. MISCELLANEOUS RESTRICTIONS
GENERAL LIMITATIONS 12
51. Registered Bonds 12
52. No Federal Guarantee 12
53. No Advance Refunding 12
54. Information Reporting Requirement 12
55. Pooled Financing Bond Limitation 12
56. Hedge Bond Restriction 13
GENERAL ACCOUNTING CONCEPTS; RECORDKEEPING
57. Adoption of Accounting Concepts 13
58. Allocation Methods 13
59. Reservation of Right to Modify 13
60. Recordkeeping 13
(iii)
$5,500,000
OAKLAND COUNTY BUILDING AUTHORITY
Oakland County, Michigan
OAKLAND COUNTY BUILDING AUTHORITY
BUILDING AUTHORITY BONDS, SERIES 2007
TAX CERTIFICATE OF
OAKLAND COUNTY COMMUNITY MENTAL HEALTH AUTHORITY
RELATING TO ARBITRAGE LIMITATIONS,
PRIVATE ACTIVITY BOND REQUIREMENTS AND
MISCELLANEOUS RESTRICTIONS
PURPOSE OF CERTIFICATE
1. Good Faith Certification. I, the undersigned officer of the Oakland County
Community Mental Health Authority (the "CMHA"), a community mental health
organization which operates in Oakland county pursuant to Act No. 258 of the Public
Acts of Michigan of 1954, as amended, which is obligated under a sublease dated April 1,
2007 between CMHA and the County of Oakland, Michigan (the "County"). The County
has caused the Oakland County Building Authority (the "Authority" or "Issuer") to issue
its $5,500,000 principal amount of Oakland County Building Authority Building
Authority Bonds, Series 2007 (the "Bonds"), and I hereby certify in good faith that, with
respect to the issuance of the Bonds, the use and investment of the proceeds of the Bonds
and related matters, this certificate sets forth the reasonable expectations of the Issuer.
I also certify that this certificate states the facts and estimates that form the basis
for the Issuer's expectations and acknowledge that this certificate is evidence of the
Issuer's expectations, but does not establish any conclusions of law or any presumptions
regarding the Issuer's actual expectations or their reasonableness.
I also certify that I am knowledgeable with respect to the facts and estimates set
forth in this certificate and that the facts and estimates set forth in this certificate are true
and correct as of the date hereof.
2. Incorporation of Underwriter's Certificate. Significant portions of this
certificate are based on information provided by , as underwriter of the
Bonds (the "Underwriter"), in the Certificate of the Underwriter (the "Underwriter's
Certificate") included elsewhere in the transcript for the Bonds. The Underwriter's
Certificate is incorporated in this certificate by this reference. I have no contrary
information and believe I am prudent in relying on such information.
3. Reliance by Bond Counsel. I understand and agree that the facts and estimates
in this certificate and in the Underwriter's Certificate will be relied upon by Axe &
Ecklund, P.C., bond counsel, in expressing its opinion that the interest on the Bonds is
excludable from gross income for Federal income tax purposes.
PART I. IDENTIFICATION OF STATUS OF CMHA AND OF MATTERS
CONCERNING ARBITRAGE LIMITATIONS
INTRODUCTION
4. Certificate Required by Regulations. For matters relating to Section 148 of the
Internal Revenue Code of 1986 (the "Code"), this certificate is made pursuant to Income
Tax Regulations (the "Regulations") Section 1.148-2(b)(2)(i) requiring the certification
of an issuer's expectations pertaining to arbitrage matters as of the issue date of bonds. I
confirm that I understand CMHA has a responsibility to set forth in this certificate,
directly or by reference to incorporated certificates, all facts and matters relevant to the
determination of whether the Bonds are "arbitrage bonds."
STATUS OF CMHA
5. CMHA incorporated by Political Subdivisions. CMHA has been formed as a
corporate body by the county of Oakland, Michigan as a community mental health
organization which operates in Oakland County pursuant to Act No. 258 of the Public
Acts of Michigan of 1954, as amended.
PURPOSE
6. Issuance and Purpose of Bonds. The Bonds are being issued pursuant to the
Issuer's Resolution Authorizing the Issuance of Bonds, adopted on , 2007 (the
"Authorizing Resolutions"), for the purpose of providing for the payment of costs of
acquiring real estate, renovation of the real estate and constructing a parking lot (the
"Project") more particularly described below.
7. Description of Project. The Project consists of the purchase of real estate
described in Appendix .
BOND TERMS, DATES AND PRICES
8. Terms of the Bonds in General. The Bonds will be issued in a single series in
the principal amount of $5,500,000, will be dated 1,2007, and will bear interest from
their date, payable semiannually on March 1 and September 1, beginning September 1,
2007. The Bonds will mature on March 1 in the years and the amounts, will bear interest
at the rates, and will have the initial offering prices, set forth below:
Year Principal Interest Offering Price
(March 1) Amount Rate (% of Par)
2008 $175,000
2009 200,000
2010 200,000
2011 225,000
2012 225,000
2013 225,000
2014 250,000
2015 250,000
2016 250,000
2017 250,000
2018 275,000
(2)
2019 275,000
2020 300,000
2021 300,000
2022 325,000
2023 325,000
2024 350,000
2025 350,000
2026 375,000
2027 375,000
Total $5,500,000
9. Sale Date; Purchase Price. The Bonds were sold, pursuant to public
solicitation, on , 2007 (the "Sale Date"), by the Issuer to the Underwriter at a
price of $5,500,000. This price (the "Purchase Price") represents the principal amount of
the Bonds of $ , less Underwriter's discount of $ , plus accrued interest
of $ --.
10. Issue Price; Plain Par Bonds
(a) In the Underwriter's Certificate, the Underwriter has certified that, on
the Sale Date, the Bonds were to be sold to the public at the initial offering prices
set forth in paragraph 8, resulting in an aggregate initial offering price of
, representing the principal amount of the Bonds of $5,500,000, plus
accrued interest of $ . This price represents the issue price of the Bonds
(the "Issue Price").
(b) There is original issue premium or original issue discount for
maturities of the Bonds and each maturity of the Bonds is issued for a price
that does not include accrued interest other than pre-issuance accrued interest.
Each maturity of the Bonds bears interest at a single, stated, fixed rate. Each
maturity of the Bonds has a lowest stated redemption price (the amount payable at
maturity) that is not less than its outstanding principal amount. By reason of the
statements in this subparagraph, the Bonds are "plain par bonds" under
Regulations Section 1.148-1(b).
11. Identification of Issue. All of the maturities of the Bonds were sold on the
same date, namely the Sale Date, pursuant to the same plan of financing, and will be paid
from substantially the same source of funds. As a result, all of the maturities of the Bonds
are part of a single issue of obligations of the Issuer. No other bonds of the Issuer sold on
the Sale Date or within 15 days of the Sale Date are reasonably expected to be paid from
substantially the same source of funds as the Bonds
12. Identification of Issue Date. The Bonds are being delivered by the Issuer to
the Underwriter on the date hereof in exchange for the Purchase Price. The interest on the
Bonds begins to accrue as of the dated date of the Bonds (namely, 1, 2007) and
therefore the date hereof is not earlier than the first day on which interest on the Bonds
begins to accrue. By reason of the facts set forth in this paragraph, the Bonds are being
issued on the date hereof ( ,2007) and, therefore, the date hereof is the issue date
of the Bonds (the "Issue Date").
13. Actual and Constructive Receipts. The actual receipts derived from the sale of
the Bonds will be the Purchase Price. The constructive receipts from the sale of the
(3)
Bonds will be the Issue Price. The difference between the Purchase Price and the Issue
Price ($ ) is being retained by the Underwriter as compensation.
YIELD
14. Fixed Yield Issue. The principal and interest on the Bonds is fixed,
determinable and unconditionally payable. By reason of these facts, the Bonds are a fixed
yield issue.
15. Redemption Prior to Maturity.
(a) The Bonds maturing on and after March 1, 2015, are subject to
optional redemption on or after March 1, 2014, at par without redemption
premium.
(b) None of the Bonds are subject to mandatory sinking fund redemption.
(c) None of the Bonds are subject to contingent early redemption under
circumstances where the contingency is reasonably expected to occur.
16. No Hedges. CMHA has not entered into, and does not reasonably expect to
enter into, a contract such as an interest rate swap, an interest rate cap, a futures contract,
a forward contract or an option or any other hedge contract in connection with the Bonds.
17. Yield of the Bonds. Based on the principal and interest payments and the issue
prices of the maturities of the Bonds, as well as the facts set forth in paragraphs 14
through 16, the yield of the Bonds is %, determined on the basis of discounting the
principal and interest payments on the Bonds to the Issue Price of the Bonds as of the
Issue Date, less the premium for the Policy.
PROCEEDS AND DEPOSITS
18. Identification of Sale Proceeds. Of the Issue Price of the Bonds, the amount of
$ represents interest that accrued on the Bonds for the period from their dated date
1, 2007) to the Issue Date, which is a period of less than one year. The accrued
interest will be deposited in the Bond and Interest Principal and Interest Fund (the
"Principal and Interest Fund") and used for the payment of interest on the Bonds on the
first interest payment date for the Bonds (September 1, 2007), which date is within one
year of the Issue Date. By reason of the facts set forth in this paragraph, the accrued
interest does not represent sale proceeds of the Bonds under Regulations Section 1.148-
1(b). The remaining portion of the Issue Price of $ (representing the Issue Price of $-
$ , minus the accrued interest of $ ) represents sale proceeds of the Bonds.
19. Deposit of Sale Proceeds. Of the sale proceeds, $ (being the
difference between the Issue Price and the Purchase Price) represents sale proceeds spent
on the Issue Date for the Underwriter's compensation and $ , of that amount
represents the premium for the Policy spent on the Issue Date by transfer to the Bond
Insurer. These sale proceeds will not be deposited or invested. The accrued interest and
the remaining sale proceeds will be spent or deposited as follows:
(a) $ (representing accrued interest) will be deposited in the
Principal and Interest Fund; and
(4)
(b) $ will be deposited in the Acquisition and Renovation Fund
of the amount deposited in this fund not more than $ will be used to pay cost
of issuance.
20. Identification and Deposit of Investment Proceeds. The investment proceeds
of the Bonds consist of interest earnings and gains derived from the sale proceeds of the
Bonds. The investment proceeds will be deposited as follows:
(a) Earnings and gains derived from investment of sale proceeds deposited
in the Acquisition and Renovation Fund will be retained in that Fund until
expenditure of sale proceeds in the Acquisition and Renovation Fund for the
Project and, thereafter, amounts, if any, remaining in the Acquisition and
Renovation Fund will be transferred to the Principal and Interest Fund to be used
for the payment of debt service on the Bonds.
(b) Earnings and gains derived from the investment of accrued interest
deposited in the Principal and Interest Fund and amounts, if any, transferred to the
Principal and Interest Fund from the Acquisition and Renovation Fund will be
retained in the Principal and Interest Fund to be used for debt service on the
Bonds.
21. Other Amounts. The Issuer will pay costs of issuance of the Bonds (other than
the Underwriter's compensation) and costs of the Project in excess of sale proceeds and
investment proceeds deposited in the Acquisition and Renovation Fund from its general
funds. Except as referenced in this paragraph and except for sale proceeds and investment
proceeds of the Bonds, there are no amounts that are or will be available for the
governmental purposes of the Bonds, namely, the payment of costs of the Project.
SINGLE PURPOSE ISSUE
22. Single Purpose. The components of the Project are functionally related capital
projects that qualify for the same initial temporary period (see paragraph 24) and the
Bonds, therefore, are being treated as having a single governmental purpose.
PROCEEDS ELIGIBLE FOR TEMPORARY PERIOD INVESTMENT
23. Use of Acquisition and Renovation Fund. Amounts deposited in the
Acquisition and Renovation Fund will be spent for payment of costs of the Project. The
Project is expected to be completed and placed in service by 200 . , _
24. Sale Proceeds for Reimbursement. The Issuer expects that sale proceeds will
be spent for expenditures to be made for the Project in accordance with the following:
(a) The Issuer declared its intent to reimburse original expenditures with
the proceeds of its obligations, by the adoption by the Authorizing Resolutions on
, 2007 describing the Project and stating the maximum amount of
obligations to be issued for the Project;
(b) The amounts reimbursed will be for the following:
(i) Reimbursement for capital expenditures made no more than 3
years after the original expenditure was paid and thus assuming that all
reimbursement is made by 1, 200_, there will be no reimbursement
for expenditures made after 1, 200_; or
(5)
(ii) Capital expenditures not in excess of $ ; Or
(iii) Capital expenditures not in excess of $ (being 20
percent of the Issue Price, excluding accrued interest) for architectural,
engineering, surveying, soil testing or similar costs (excluding land
acquisition and site preparation and similar costs incident to
commencement of construction) incurred prior to the commencement of
acquisition or construction.
25. Qualification for Temporary Period Investment.
(a) In excess of $ of the sale proceeds will be used in part for
purchase of real estate within six months of the Issue Date (as referenced in
paragraphs 24 and 37).
(b) The Issuer entered into a contract with , dated
, 20 , which contract was a substantial binding obligation to a
third party to spend at least 5 percent of the sale proceeds of the Bonds.
(c) Based on (a) and (b) above, at least 85% of the sale proceeds
) will be spent for the Project within 3 years of the Issue Date.
(d) The Issuer will proceeded with due diligence to complete the Project
and will proceed to spend the sale proceeds of the Bond for reimbursement as
referenced in paragraph 24.
(e) By reason of the facts set forth in (a) through (c) above, the sale
proceeds and the investment proceeds of the Bonds deposited in the Acquisition
and Renovation Fund qualify for a 3-year temporary period beginning on the
Issue Date under Regulations Section 1.148-2(i) and will be invested without
yield restrictions during that period. Following the end of the 3-year temporary
period, proceeds, if any, remaining in the Acquisition and Renovation Fund will
be invested at a yield not in excess of the yield of the Bonds (as set forth in
paragraph 18) or yield reduction payments will be made to the federal government
in accordance with Regulations Section 1.148-5(c).
REASONABLY REQUIRED RESERVE FUNDS
26. No Reserve Fund. A invested reserve for debt service on the Bonds is not
being established with the proceeds of the Bonds or otherwise.
MINOR PORTION
27. No Minor Portion. All sale proceeds and investment proceeds will be
invested, if at all, only as described in the above paragraphs. A minor portion is not
expected to be required for investment of those amounts.
CERTAIN REPLACEMENT PROCEEDS: PRINCIPAL AND INTEREST
FUND
28. Security and Payment of Bonds. The Issuer will pay the principal of, and
interest on, the Bonds from lease rentals made by the County as herein described and any
other lawful source. The bond payments will not be in excess of the cash rentals
(6)
payments pledged to the payment of principal of and interest on the Refunded Bonds
pursuant to the terms of the Full Faith and Credit General Obligation Lease Contract,
dated as of December 1, 2006, between the Issuer and the County (the "Lease"). The
County has pledged its full faith and credit for the payment of the Lease when due and
agrees that it will levy each year such ad valorem taxes as shall be necessary for payment
of the Lease, subject to applicable constitutional and statutory limitation on the taxing
powers of the County, which tax levy shall be reduced by amounts set aside for payment
of the Bonds. Pursuant to the Sublease, dated as of April 1, 2007, by and between the
County and CMHA, the County is subleasing the Project to CMHA and the County
intends to use the payments from CMHA to satisfy the lease payments owing to the
Issuer..
29. Bona Fide Debt Service Fund. The Principal and Interest Fund will be used
primarily to achieve a proper matching of net revenues and debt service on the Bonds
within each bond year. The Principal and Interest Fund will be depleted at least once each
bond year except for a reasonable carryover amount not exceeding the greater of one
year's earnings on the Principal and Interest Fund or 1112 th of principal and interest
payments on the Bonds for the immediately preceding bond year. Accordingly, the
Principal and Interest Fund is a "bona fide debt service fund" within the meaning of the
Regulations Section 1.148-1(b).
30. Investment of Principal and Interest Fund. Amounts deposited in the Principal
and Interest Fund will be invested without yield restriction pursuant to Regulations
Section 1.148-2(e)(5)(ii) (establishing a temporary period of 13 months for amounts in a
bona fide debt service fund). Earnings on the Principal and Interest Fund will be retained
in that Fund and applied as a credit against debt service due on the Bonds.
31. No Other Debt Service or Pledged Funds. CMHA will establish no funds or
accounts for the purpose of paying debt service on the Bonds other than as referenced
above, and there are no funds (other than the Principal and Interest Fund) or other
amounts not described herein that are intended or expected to be used to pay principal or
interest on the Bonds or that will be pledged as security therefor.
32. No Negative Pledges. There is no agreement not already discussed in this
certificate that requires CMHA to maintain an amount at a particular level for the direct
or indirect benefit of the holders of the Bonds.
OTHER REPLACEMENT PROCEEDS
33. No Other Funds for Purposes. The purpose of the Bonds is to enable the Issuer
to pay the costs of the Project. There are no other funds that have a sufficiently direct
nexus to the Bonds or the Project to conclude that the amounts would have been used for
the Project if the proceeds of the Bonds were not to be used for the Project (excluding
amounts which are merely available or preliminarily earmarked for the Project).
34. Term Not Longer Than Necessary.
(a) The Bonds will not be outstanding longer than necessary for the
purposes for which the Bonds are being issued and no replacement proceeds will
therefore arise by reason of a longer term of the Bonds than reasonably necessary
because the weighted average maturity of the Bonds does not exceed 120 percent
of the weighted average reasonably expected economic life of the Project.
(b) The weighted average maturity of the Bonds is 11.88234 years.
(7)
(c) The reasonably expected weighted average economic life of the
Project is 30 years, based on the experience of the Issuer.
(d) The maximum permitted weighted average maturity of the Bonds is 36
years (being 120% of 30 years).
ABUSIVE DEVICES
35. No Abusive Devices. Because all gross proceeds of the Bonds are entitled to
be invested during temporary periods, there is no investment to exploit the difference
between tax-exempt and taxable interest rates. In addition, because the Bonds will not be
issued for a term whose weighted average maturity exceeds 120 percent of the reasonably
expected economic life of the capital facilities being financed (as set forth in paragraph
34), and because the principal amount of the Bonds is not greater than required to provide
for the purpose of the Bonds, the Bonds will not remain outstanding longer, or be issued
in an amount larger, than is otherwise reasonably necessary to accomplish the
governmental purposes of the Bonds and thus will not overburden the tax-exempt market.
COMPLIANCE WITH REBATE REQUIREMENT
36. Covenant of CMHA. CMHA hereby covenants that it shall take all action, and
refrain from taking any action, that is necessary, including paying any rebates to the
United States government that may be required by the Internal Revenue Code of 1986, as
amended, so as not to impair the exclusion of the interest on the Bonds from gross
income for federal income tax purposes. CMHA acknowledges that by this covenant
CMHA is covenanting to take all actions necessary to assure compliance with Section
148(f) of the Code and applicable Regulations requiring the rebate of excess investment
earnings, if any, to the United States (the "Rebate Requirement"). CMHA acknowledges
that the first required payment of rebate, if any, to the federal government is due by no
later than 60 days after , 20 (being the last day of the fifth bond year for the
Bonds.)
PART II. PRIVATE ACTIVITY BOND REQUIREMENTS
37. Identification of Users. The users of the Project consist only of the Issuer, the
County, the CMHA, other local governmental units, agencies and agents of the Issuer and
other local governmental units, and members of the general public and the non-profit
corporations and other users set forth in Exhibit A.
38. Qualified General Public Use. Use of the Project by members of the general
public in furtherance of their trade or business use qualifies as general public use of the
Project rather than private business use because the Project are intended to be available,
and in fact will be reasonably available, for use on the same basis by natural persons not
engaged in a trade or business as those engaged in a trade or business, because no
members of the public will be provided preference or priority in use of the Project over
other users of the Project, and because no contracts or other arrangements for use will be
entered into with those users.
(8)
39. No Management Contract or Operating Contract. CMHA has not entered into
or expects to enter into any agreement for operation or management of the Project, except
for the Sublease and the contracts described in Appendix ..
40. No Other Special Entitlements. There are no other ownership arrangements,
leases, service contracts, operating contracts, management contracts, arrangements that
convey exclusive or priority use, or any other special entitlement for beneficial use of the
Project.
41. No Private Business Use. Based upon the above paragraphs and paragraph 42,
there will be no private business use of the Project for purposes of Code Section 141
except as set forth in paragraph 37.
RESTRICTIONS APPLICABLE TO ALL PRIVATE ACTIVITY BONDS
42. Substantial User Limit. CMHA acknowledges that interest on the Bonds will
not excluded from gross income for federal income tax purposes while the Bonds are held
by any user of more than five percent of the Project, or by any related person (including
any partner in a partnership and any member of the same controlled group of
corporations).
43. Maturity Limit. The Bonds satisfy restrictions relating to the limitation on
maturity of certain private activity bonds because the weighted average maturity of the
Bonds does not exceed 120 percent of the reasonably expected economic life of the
Project.
SPECIAL RULES FOR OUTPUT FACILITIES
44. No Output Facilities or Output Contracts. No portion of the Project constitutes
facilities for water collection, storage or distribution or electric or gas generation,
transmission, distribution or related facilities.
PRIVATE LOAN FINANCING TEST
45. No Loans. No portion of the proceeds of the Bonds was used, directly or
indirectly, to make or finance loans to nongovernmental person and no portion of the
proceeds of the Bonds will be used, directly or indirectly, to make or finance loans to
non-governmental persons.
46. Prohibited Facilities. No portion of the proceeds of the Bonds will be used to
provide any airplane, skybox or other private luxury box, health club facility, facility
primarily used for gambling, or store the principal business of which is the sale of
alcoholic beverages for consumption off premises.
(9)
DEFEASANCE REMEDIAL ACTION LIMITATION
47. Compliance with Limitation on Regulatory Defeasance Remedial Action. The
first date on which the Bonds are subject to optional redemption is March 1, 2014, which
date is not more than 10 1/2 years after the Issue Date.
PART III. MISCELLANEOUS RESTRICTIONS
GENERAL LIMITATIONS
48. Registered Bonds. The Bonds will be issued in registered form pursuant to the
requirements of the Authorizing Resolutions.
49. No Federal Guarantee. The Bonds are not federally guaranteed because the
payment of principal or interest on the Bonds is not guaranteed in whole or in part by the
United States or any agency or instrumentality thereof, because no portion of the
proceeds of the Bonds will be used to make loans guaranteed by the United States or any
agency or instrumentality thereof, because the proceeds of the Bonds will not be invested
(directly or indirectly) in federally insured deposits or accounts, and because the payment
of principal or interest on the Bonds is not otherwise indirectly guaranteed in whole or in
part by the United States or an agency or instrumentality thereof, excluding for purposes
of the statements made by the Issuer in this paragraph, amounts deposited in the Principal
and Interest Fund, proceeds invested for an initial temporary period until needed for the
governmental purposes of the Bonds, investments in obligations issued by the United
States Treasury.
50. No Advance Refunding. No portion of the proceeds of the Bonds will be used
for the advance refunding of any bonds or other obligations of the Issuer or a related
person to the Issuer.
51. Information Reporting Requirement. CMHA understands the Issuer will file a
properly completed and executed Form 8038-G (Information Report) pertaining to the
Bonds with the Treasury Department no later than the 15 th day of the ri calendar month
after the close of the calendar quarter of the Issue Date, namely by no later than
200_ and CMHA will fully cooperate with the Issuer to obtain and provide any
information for the Issuer to permit it to do so.
52. Pooled Financing Bond Limitation. The Bonds will not be pooled financing
bonds because no proceeds of the Bonds will be used, directly or indirectly, to make or
finance two or more loans to governmental or nongovernmental borrowers.
53. Hedge Bonds Restriction. The Issuer reasonably expects to spend 85 percent
of the proceeds of the Bonds within 3 years of the Issue Date, and no more than 50
percent of the proceeds of the Bonds (if any) will be invested in investments having a
substantially guaranteed yield for four or more years. Based upon the statements in this
paragraph, the Bonds will not be hedge bonds.
GENERAL ACCOUNTING AND ALLOCATION CONCEPTS; RECORDKEEPING
54. Adoption of Accounting Concepts. For purposes of accounting for amounts
relating to the Bonds, the Issuer hereby adopts the following concepts as applicable:
(a) All amounts in the Acquisition and Renovation Fund will be treated as
allocated to expenditures on a first-in-first-out basis ("FIFO").
(10)
g
(b) All amounts in the Principal and Interest Fund (including accrued
interest, amounts, if any transferred from the Acquisition and Renovation Fund
and deposits for debt service made by the Issuer) to be used to pay principal and
interest on the Bonds will be treated as allocated to expenditures on a FIFO basis,
with interest on the Bonds being treated as paid before principal.
(c) All amounts will be treated as allocated to expenditures on the date of
a cash outlay and on the basis of expenditure of sale proceeds and investment
proceeds before other available amounts (if any).
(d) Valuations of obligations and investments will be (i) consistent on
each date made and (ii) made on the basis of fair market value except when the
Regulations require a different method of valuation or permit other valuations to
be used for certain obligations or investments.
(e) Yield calculations on investments will be made using the same
compounding interval and financial conventions used to compute yield on the
Bonds.
55. Allocation Methods. CMHA acknowledges that, under Section 1.148-6(a)(3),
the Issuer is permitted to establish the accounting method for the Bonds and for the
allocation of the proceeds of the Bonds and that the Issuer has, by this tax certificate,
established the methods referenced in paragraph 54(a) and (b). The Issuer will account
for the allocation of proceeds of the Bonds to expenditures in accordance with the above
methodology not later than 18 months after the date the expenditure is paid, but in no
event later than 60 days after , 20_ (being the due date of any required rebate
payment to the federal government).
56. Reservation of Right to Modify. CMHA understands the Issuer reserves the
right to change the accounting and allocation methods referenced in paragraphs 54 and 55
to the date 18 months after the date the expenditures are paid or 60 days after
20 , if earlier.
57. Recordkeeping. CMHA acknowledges that the Internal Revenue Service
requires that records and accounts relating to tax-exempt obligations are to be retained
until the date three years after the earlier of the date of payment of the obligations in full
or the date of the last maturity of the obligations, and the Issuer expects to comply with
this requirement. The Secretary and Treasurer have been designated as the officers of
CMHA responsible for (i) maintenance and retention of records relating to expenditure
and investment of proceeds of the Bonds, and (ii) maintenance of correspondence,
contracts and other records relating to the construction and use of the Project for the term
of the Bonds.
WITNESS my signature this day of , 2007.
OAKLAND COUNTY
COMMUNITY MENTAL
HEALTH AUTHORITY
By:
Las.r6-oak174 Its:
(11)
FISCAL NOTE (MISC. #07152) June 14, 2007
BY: Finance Committee, Mike Rogers, Chairperson
IN RE: RESOLUTION APPROVING SUBLEASE IN CONNECTION WITH THE
OAKLAND COUNTY COMMUNITY MENTAL HEALTH AUTHORITY HOUSING PROJECT
LOCATED IN OAKLAND COUNTY
To: The Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
Pursuant to Rule XII-C of this Board, the Finance Committee
has reviewed the above referenced resolution and finds that since
the Community Mental health Authority will cover all applicable
debt service payments, there is no fiscal impact on Oakland County.
FINANCE COMMITTEE
mFINANCE COMMITTEE
Motion carried unanimously on a roll call vote.
Tr-- Ruth o nson, County Clerk
Resolution #07152 June 14, 2007
Moved by Douglas supported by Zack the resolution (with fiscal note attached) be adopted.
AYES: Greimel, Hatchett, Jacobsen, KowaII, Long, Middleton, Nash, Potter, Potts, Rogers, Scott,
Spector, Suarez, Woodward, Zack, Bullard, Burns, Coulter, Crawford, Douglas, Gershenson,
Gingell, Gosselin, Gregory. (24)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolution (with fiscal note attached) be adopted.
I HEREBY APPROVE THE FOREGOING RESOLUTION
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Ruth Johnson, 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 June 14, 2007, 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 14th day of June, 2007.