04/12/2011 Ordinances 9292Ordinance No. 9292
AN ORDINANCE AUTHORIZING EXECUTION AND DELIVERY OF A SECOND
ADDENDUM TO LEASE PURCHASE AGREEMENT WITH GRAND ISLAND FACILITIES
CORPORATION, AMENDING AND CONFIRMING THE TERMS OF A LEASE PURCHASE
AGREEMENT AND AN ADDENDUM TO LEASE PURCHASE AGREEMENT PREVIOUSLY
ENTERED INTO, RELATING TO THE ACQUISITION OF A LIBRARY ADDITION FOR USE
BY THE CITY; APPROVING THE EXECUTION OF DOCUMENTS WITH RESPECT TO
SAID SECOND ADDENDUM; APPROVING THE TERMS OF A TRUST INDENTURE AND
SECURITY AGREEMENT; MAKING CERTAIN DETERMINATIONS WITH RESPECT TO
BONDS TO BE ISSUED UNDER SUCH INDENTURE; PROVIDING FOR THE REFUNDING
OF CERTAIN OUTSTANDING BONDS; APPROVING THE TERMS OF A BOND
PURCHASE AGREEMENT; AND PROVIDING FOR THE PUBLISHING OF THIS
ORDINANCE.
BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF GRAND
ISLAND, NEBRASKA (the "City ") as follows:
Section 1. The Mayor and Council hereby find and determine: that the City has previously
approved the execution and delivery of that Lease Purchase Agreement dated as of July 12, 2005
(the "Original Lease Purchase Agreement ") by and between the City and Grand Island Facilities
Corporation (the "Corporation "), a Nebraska nonprofit corporation, as amended and supplemented
by that First Addendum to Lease Purchase Agreement dated as of October 1, 2005 (the "First
Addendum ") also by and between the City and the Corporation; that the Corporation has been
formed under the Nebraska nonprofit corporation laws exclusively for purposes permitted by
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code "); that the
Corporation has issued and outstanding its Building Bonds (Library Project), Series 2005, date of
original issue — November 2, 2005 (the "Building Bonds ") which were issued for the purpose of
providing funds for the acquisition of an addition to the City's existing library facilities to serve the
City and its inhabitants (the "Project "); that since the Building Bonds were issued, the rates of
interest available in the market have so declined that by issuing its refunding bonds to provide for
the payment and redemption of the Building Bonds, a substantial savings in the amount of yearly
running interest will be made, thereby reducing the amount of payments required of the City under
the Original Lease Purchase Agreement and the First Addendum; that the Original Lease Purchase
Agreement, as supplemented and amended by the First Addendum, provides for the construction
and acquisition of the Project pursuant to the provisions of Section 19 -2421, R.R.S. Neb. 2007 and
provides for payments required to be made by the City for the purchase of the Project in amounts
related to the debt service on the Building Bonds; that it is necessary and advisable for the terms of
the Original Lease Purchase Agreement, as supplemented and amended by the First Addendum, to
be further supplemented and amended to set forth modified payments required to be made by the
City for the purchase of the Project and relating to the refunding of the Building Bonds; that the
documents necessary for such purposes have been prepared and said documents should be approved
and their execution authorized.
Section 2. The City of Grand Island shall enter into the Second Addendum to Lease
Purchase Agreement to be dated as of May 1, 2011, with the Corporation, modifying the terms of
Approved as to Form a "�
April 11, 2011 0 City Attorney
ORDINANCE NO. 9292 (Cont.)
the Original Lease Purchase Agreement as previously supplemented and amended by the First
Addendum (the "Second Addendum" and together with the Original Lease Purchase Agreement
and the First Addendum, the "Agreement ") and whereby the Corporation will lease the Project to
the City and with a set schedule of payments relating to the acquisition of the Project. The Second
Addendum in the form presented at this meeting is hereby approved.
Section 3. The Mayor and City Clerk of the City be and they are hereby authorized and
directed to execute and deliver on behalf of the City the Second Addendum, including any
necessary counterparts, in substantially the form and content as presented to this meeting, but with
such changes or modifications therein as to them seem necessary, desirable or appropriate on behalf
of the City; and said Mayor and City Clerk are further authorized and directed to execute and
deliver any other documents or certificates and to do all other things necessary or appropriate in
connection with the Agreement.
Section 4. The Mayor and Council hereby ratify and confirm their approval of the
formation of the Corporation, including the Articles of Incorporation and Bylaws thereof and the
five directors thereof, and further approve the Trust Indenture and Security Agreement, dated as of
May 1, 2011, (the "Indenture ") from the Corporation in favor of Wells Fargo Bank, National
Association, under which Refunding Building Bonds (Library Project), Series 2011, in the
aggregate principal amount of $3,795,000 (the "Refunding Bonds ") are to be issued to refund the
Building Bonds, and the City hereby approves the issuance of the Refunding Bonds, in such
principal amount and bearing interest as set forth in the Indenture; and the sale of said bonds to
Ameritas Investment Corp. (the "Underwriter ") in accordance with the terms of a Bond Purchase
Agreement dated April 12, 2011 (the "Bond Purchase Agreement "), at the price of $3,757,050
(which price takes into consideration Underwriter's discount in the amount of $37,950), is hereby
approved. The Mayor is hereby further authorized to sign the approval form on the Bond Purchase
Agreement on behalf of the City and to approve at the time of closing of the purchase of the
Refunding Bonds the final form of the Indenture.
Section 5. In connection with the execution and delivery of the Second Addendum and the
issuance by the Corporation of the Refunding Bonds, the following determinations and approvals
are hereby made by the Mayor and Council:
(a) The City hereby confirms its declaration, as provided in the Agreement,
that it will take title to the Project (including additions) when the Refunding Bonds
are discharged.
(b) The City hereby approves the Direction to Give Notice of Redemption
of the Building Bonds in the form presented herewith and authorizes and directs the
Corporation to execute and deliver such Direction for Call, with any changes
deemed necessary and appropriate by the Corporation, to the Trustee. The City
further authorizes the Mayor, City Clerk and City Treasurer (Finance Director) to
2
ORDINANCE NO. 9292 (Cont.)
take any and all actions necessary and appropriate to effect the redemption of the
Building Bonds.
Section 6. The Mayor and Council hereby state that it is the intention of the City that
interest on the Refunding Bonds issued by The Corporation shall be excludable from gross income
under the federal income tax by virtue of Section 103 of the Code and Revenue Ruling 63 -20 and
Revenue Procedure 82 -26 of the Internal Revenue Service and the Mayor and Council hereby
authorize the Mayor, the City Clerk and the City Treasurer (Finance Director) (or any one of more
of them) to take all actions necessary or appropriate to carry out said intention and for obtaining
such interest exclusion. The City hereby covenants with The Corporation for the benefit of the
purchasers and holders of the Refunding Bonds that it will make no use of the proceeds of said
issue, including monies held in any sinking fund for the payments set forth in the Second
Addendum or principal and interest on the Refunding Bonds, which would cause the Refunding
Bonds to be arbitrage bonds within the meaning of Section 103 and 148 and other related sections
of the Code and further covenants to comply with said Sections 103 and 148 and related sections
and all applicable regulations thereunder throughout the term of said issue, including all
requirements with respect to reporting and payment of rebates, if applicable. The Refunding Bonds,
as issued on behalf of the City are hereby designated by the City as "qualified tax - exempt
obligations" under Section 265(b)(3)(13)(i)(III) of the Code and the City in connection with entering
into the Agreement hereby covenants and warrants that it does not anticipate issuance directly by it
or on its behalf of tax - exempt bonds or other tax - exempt interest bearing obligations in an amount
exceeding $10,000,000 in calendar 2011 (taking into consideration the exception for current
refunding issues) provided that the amount of the Refunding Bonds hereby designated shall be
reduced as and to the extent that a portion of the Refunding Bonds may be determined to be
"deemed designated" in accordance with the provisions of Section 265(b)(3)(D) of the Code.
Section 7. The Mayor and Council hereby approve the Preliminary Official Statement dated
April 1, 2011 with respect to the Refunding Bonds and hereby authorize the Mayor to approve the
final Official Statement for the Refunding Bonds with appropriate changes to reflect the final terms
for the Refunding Bonds as sold pursuant to the Bond Purchase Agreement.
Section 8. This Ordinance shall be in force and take effect from and after its publication as
provided by law.
Passed and approved this 12th day of April, 2011.
RaNae Edwards, City Clerk
Jay/WVrfcek, Mayor
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