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08/09/2011 Ordinances 9311Ordinance No. 9311 AN ORDINANCE PROVIDING FOR THE PURCHASE AND LEASING OF AN AGRICULTURAL EXPOSITION AND EVENTS CENTER FOR THE CITY OF GRAND ISLAND; AUTHORIZING EXECUTION AND DELIVERY OF A THIRD ADDENDUM TO LEASE PURCHASE AGREEMENT WITH FONNER PARK EXPOSITION AND EVENTS CENTER, INC., AMENDING AND CONFIRMING THE TERMS OF A LEASE PURCHASE AGREEMENT PREVIOUSLY ENTERED INTO, RELATING TO THE CONSTRUCTION AND ACQUISITION OF SAID EVENTS CENTER FOR USE BY THE CITY OF GRAND ISLAND, NEBRASKA; APPROVING THE EXECUTION OF DOCUMENTS WITH RESPECT TO SAID THIRD ADDENDUM; PROVIDING FOR CONFIRMATION OF THE ACCEPTANCE OF TITLE; APPROVING THE TERMS OF A TRUST INDENTURE AND SECURITY AGREEMENT; MAKING CERTAIN DETERMINATIONS WITH RESPECT TO REFUNDING BONDS TO BE ISSUED UNDER SUCH INDENTURE; APPROVING THE TERMS OF A BOND PURCHASE AGREEMENT; PROVIDING FOR THE CALLING AND REDEMPTION OF BUILDING BONDS PREVIOUSLY ISSUED; PROVIDING FOR CERTAIN MATTERS WITH RESPECT TO THE EXEMPTION OF INTEREST ON THE REFUNDING BONDS 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 October 9, 2001 (the "Original Lease Purchase Agreement ") by and between the City and Former Park Exposition and Events Center, Inc., ( "Heartland "), a Nebraska nonprofit corporation, which agreement has been supplemented and amended by that Addendum to Lease Purchase Agreement dated August 26, 2003 (the "First Addendum") and further supplemented and amended by that Second Addendum to Lease Purchase Agreement dated as of December 1, 2004 (the "Second Addendum" and together with the Original Lease Purchase Agreement and the First Addendum, the "Existing Agreement "); that pursuant to the Second Addendum, Heartland issued Building Bonds (Heartland Events Center Project), Series 2004, (the `Building Bonds "), which Building Bonds were issued to pay the costs of the acquisition of a new agricultural exposition and events center to serve the City and its inhabitants (the "Project ") and which Building Bonds remain outstanding and unpaid in the principal amount of $5,950,000; that since the Building Bonds were issued, the rates of interest available in the market have so declined that by Heartland 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 Existing Agreement; that Heartland 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 it is necessary and advisable to further supplement and amend the terms of the Existing Agreement in order to provide for the refunding of the Building Bonds and a reduction in the payments required of the City under the Existing Agreement, as allowed by the terms of the Existing Agreement; that the documents necessary for such purposes have been prepared and said documents should be approved and their execution authorized. Approved as to Form August 8, 2011 a City Attorney ORDINANCE NO. 9311 (Cont.) Section 2. The City of Grand Island shall enter into the Third Addendum to Lease Purchase Agreement to be dated as of September 1, 2011, with Heartland, modifying the terms of the Existing Agreement (the "Third Addendum" and together with the Existing Agreement, the "Agreement ") and whereby Heartland has constructed and acquired the Project in accordance with specifications approved by the City and with a set schedule of payments relating to the acquisition of the Project and that the Third Addendum in the form presented at this meeting, providing for the resetting of the amount of installment purchase payments is hereby approved. Section 3. The Mayor (or in the Mayor's absence, the President of the Council) and City Clerk of the City be and they are hereby authorized and directed to execute and deliver on behalf of the City the Third Addendum, including any necessary counterparts, in substantially the form and content as presented to this meeting, but with such changes or modifications therein (specifically including the determination of the final amounts of the installment purchase payments) 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 confirm the approval by the City of the formation of Heartland, including the Articles of Incorporation and Bylaws thereof and the five currently serving directors thereof; and further approve the Trust Indenture and Security Agreement, dated as of September 1, 2011, (the "Indenture ") from Heartland in favor of Wells Fargo Bank, National Association, under which Refunding Building Bonds (Heartland Events Center Project), Series 2011, in the aggregate principal amount of not to exceed $5,900,000 (the "Refunding Bonds ") are to be issued, and the City hereby approves the issuance of the Refunding Bonds, in such principal amount (or any lesser principal amount) and bearing interest at rates as shall be set forth in the Indenture resulting in a net present value savings to the City of not less than $300,000 and the sale of said bonds to Ameritas Investment Corp. (the "Underwriter ") in accordance with the terms of a Bond Purchase Agreement in the form presented (the "Bond Purchase Agreement "), at an underwriter's discount (not including any original issue discount) from the stated principal amounts not to exceed 1.3% 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 Third Addendum and the issuance by Heartland of the Refunding Bonds, the following determinations and approvals are hereby made by the Mayor and Council: (a) The City hereby declares, as provided in the Agreement, that it will take title to the Project (including additions) when the Refunding Bonds are discharged. 2 ORDINANCE NO. 9311 (Cont.) (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 Heartland to execute and deliver such Direction for Call, with any changes deemed necessary and appropriate by Heartland, to the Trustee. The City further authorizes the Mayor, City Clerk and City Treasurer (Finance Director) to take any and all actions necessary and appropriate to effect the redemption of the Building Bonds. (c) The Addendum to Escrow Agreement and the Addendum to Management Contract, each relating to original documents delivered in connection with the issuance of the Building Bonds and each in the form presented, are hereby approved and the Mayor (or in the Mayor's absence, the President of the Council) is hereby authorized to execute and deliver such documents on behalf of the City in substantially the form and content as presented to this meeting, but with such changes or modifications therein as to such executing officers may seem necessary, desirable or appropriate on behalf of the City. Section 6. The Mayor and Council hereby state that it is the intention of the City that interest on the Refunding Bonds issued by Heartland 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 Heartland 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 Agreement 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 City hereby designates the Refunding Bonds (as issued on behalf of the City) as the City's "qualified tax - exempt obligations" pursuant to Section 265(b)(3)(B)(i)(111) of the Code and covenants and warrants that it does not reasonably expect to issue or have issued on its behalf tax - exempt bonds or other tax - exempt interest bearing obligations aggregating in principal amount more than $10,000,000 during calendar year 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 all or 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. The officers of the City (or any one of them) are hereby authorized to make allocations of the Refunding Bonds (as to principal maturities) and of the proceeds of the Refunding Bonds and debt service funds (related to payments due under the Agreement) of the City as may be deemed appropriate under the federal tax laws and regulations, specifically including any allocations relating to the determination of 3 ORDINANCE NO. 9311 (Cont.) all or a portion of the Refunding Bonds as "deemed designated ". Any such allocations made and determinations set forth in a certificate by an officer of the City (which may be in cooperation with any certification provided by the Corporation) shall be and constitute authorized determinations made on behalf of the City with the same force and effect as if set forth in this Ordinance. Section 7. The Mayor and Council hereby approve the Preliminary Official Statement in the draft form presented with respect to the Refunding Bonds and hereby authorize the Mayor to approve and deem final on behalf of the City the final form of the Preliminary Official Statement and 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 9th day of August. 2011. City Clerk F.