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55-09 OrdinanceRECORD OF ORDINANCES Dayton Legal Blank, Inc Ordinance No. 55 -09 Passed 20 AN ORDINANCE PROVIDING FOR THE ISSUANCE AND SALE OF BONDS IN THE MAXIMUM PRINCIPAL AMOUNT OF $2,035,000 FOR THE PURPOSE OF PAYING THE COSTS OF IMPROVING THE MUNICIPAL WATERWORKS SYSTEM BY CONSTRUCTING THE DARREE FIELD WATER STORAGE TANK AND RELATED FACILITIES, TOGETHER WITH ALL INCIDENTAL WORK AND RELATED APPURTENANCES THERETO, AND DECLARING AN EMERGENCY. WHEREAS, the Director of Finance, as fiscal officer of this City, has certified to this Council that the estimated life or period of usefulness of the Improvement (as defined in Section 2) is at least five (5) years and that the maximum maturity of the Bonds described in Section 2 is forty (40) years; and NOS, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, State of Ohio, _[ /_ of the elected members concurring, that: Section 1. Definitions and Interpretation In addition to the words and terms elsewhere defined in this Ordinance, unless the context or use clearly indicates another or different meaning or intent: "Annual Information" means the annual financial information and operating data of the type to be specified in the Continuing Disclosure Certificate in accordance with the Rule. "Authorized Denominations" means the denomination of $5,000 or any integral multiple in excess thereof. "BABs" means, collectively, Direct Payment BABs and Tax Credit BABs, which are Build America Bonds within the meaning of Section 54AA(d) of the Code. "Bond proceedings" means, collectively, this Ordinance, the Certificate of Award, the Continuing Disclosure Certificate and such other proceedings of the City, including the Bonds, that provide collectively for, among other things, the rights of holders and beneficial owners of the Bonds. "Bond Register" means all books and records necessary for the registration, exchange and transfer of Bonds as provided in Section 5. "Bond Registrar" means a bank or trust company authorized to do business in the State of Ohio and designated by the Director of Finance in the Certificate of Award pursuant to Section 4 as the initial authenticating agent, bond registrar, transfer agent and paying agent for the Bonds under the Registrar Agreement and until a successor Bond Registrar shall have become such pursuant to the provisions of the Registrar Agreement and, thereafter, "Bond Registrar" shall mean the successor Bond Registrar. "Bonds" means, collectively, the Serial Bonds and the Tenn Bonds, each as is designated as such in the Certificate of Award. "Book entry form" or "book entry system" means a form or system under which (a) the ownership of book entry interests in Bonds and the principal of and interest on the Bonds may be transferred only through a book entry, and (b) physical Bond certificates in fully registered form are issued by the City only to a Depository or its nominee as registered owner, with the Bonds "immobilized" in the custody of the Depository or its designated agent. The book entry maintained by others than the City is the record that identifies the owners of book entry interests in those Bonds and that principal and interest. "Certificate of Award' means the certificate authorized by Section 6, to be executed by the Director of Finance, setting forth and determining those terms or other matters pertaining to the Bonds and their issuance, sale and delivery as this Ordinance requires or authorizes to be set forth or determined therein. "Closing Date" means the date of physical delivery of, and payment of the purchase price for, the Bonds. RECORD OF ORDINANCES Ordinance No. 55 -09 Passed Page 2 of 13 20 "Code" means the Internal Revenue Code of 1986, the Regulations (whether temporary or final) under that Code or the statutory predecessor of that Code, and any amendments of, or successor provisions to, the foregoing and any official rulings, announcements, notices, procedures and judicial determinations regarding any of the foregoing, all as and to the extent applicable. Unless otherwise indicated, reference to a Section of the Code includes any applicable successor section or provision and such applicable Regulations, rulings, announcements, notices, procedures and determinations pertinent to that Section. "Continuing Disclosure Certificate" means the certificate authorized by Section 9(c), to be substantially in the form on file with the Clerk of Council, and which, together with the agreements of the City set forth in that Section 9(c), shall constitute the continuing disclosure agreement (the "Continuing Disclosure Agreement ") made by the City for the benefit of the holders and beneficial owners of the Bonds in accordance with the Rule. "Depository" means any securities depository that is a clearing agency under federal law operating and maintaining, with its Participants or otherwise, a book entry system to record ownership of book entry interests in Bonds or the principal of and interest on or Tax Credits relating to Bonds, and to effect transfers of Bonds, in book entry form, and includes and means initially The Depository Trust Company (a limited purpose trust company), New York, New York. "Direct Payment" means a credit payment allowed pursuant to Section 54AA(g) of the Code with respect to Direct Payment BABs that is payable to the City by the United States Treasury as provided in Section 6431 of the Code. "Direct Payment BABs" means Bonds that are Build America Bonds within the meaning of Section 54AA(d) of the Code and that are qualified bonds within the meaning of Section 54AA(g), the interest on which is includible in gross income for federal income tax purposes and with respect to which the City shall have made an irrevocable election to receive one or more Direct Payments. "Interest Payment Dates" means June 1 and December 1 of each year that the Bonds are outstanding, commencing on the date specified in the Certificate of Award. "MSRB" means the Municipal Securities Rulemaking Board established by the SEC. Award. "Original Purchaser" means the purchaser of the Bonds specified in the Certificate of "Participant" means any participant contracting with a Depository under a book entry system and includes securities brokers and dealers, banks and trust companies, and clearing corporations. "Principal Payment Dates" means December 1 in each of the years from and including 2010 to and including 2029; provided that the first Principal Payment Date may be advanced up to one year and the last Principal Payment Date may be advanced up to six years or deferred up to five years, and further provided that in no case shall the final Principal Payment Date of the Bonds exceed the maximum maturity limitation referred to in the preambles hereto, all of which determinations shall be made by the Director of Finance in the Certificate of Award in such manner as to be in the best interest of and financially advantageous to the City. "Purchase Agreement" means the Bond Purchase Agreement between the City and the Original Purchaser, as it may be modified from the form on file with the Clerk of Council and executed by the Director of Finance in accordance with Section 6. "Registrar Agreement' ' means the Bond Registrar Agreement between the City and the Bond Registrar, as it may be modified from the form on file with the Clerk of Council and executed by the Director of Finance in accordance with Section 4. "Regulations" means Treasury Regulations issued pursuant to the Code or to the statutory predecessor of the Code. "Rule" means Rule 15c2 -12 prescribed by the SEC pursuant to the Securities Exchange Act of 1934. RECORD OF ORDINANCES Ordinance No. 55 -09 passed P age 3 of 13 20 "SEC" means the Securities and Exchange Commission. "Serial Bonds" means those Bonds designated as such and maturing on the dates set forth in the Certificate of Award, bearing interest payable on each Interest Payment Date and not subject to mandatory sinking fund redemption. "Specified Events" means the occurrence of any of the following events, within the meaning of the Rule, with respect to the Bonds, as applicable: principal and interest payment delinquencies; non - payment related defaults; unscheduled draws on debt service reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax- exempt status of the Bonds; modifications to rights of holders or beneficial owners of the Bonds; Bond calls; defeasances; release, substitution, or sale of property securing repayment of the Bonds; and rating changes. The repayment of the Bonds is not secured by a lien on any property capable of release or sale or for which other property may be substituted. "Tax Credit' means a credit against federal income tax that is allowed under Section 54AA(a) of the Code to a taxpayer holding a Tax Credit BAB on one or more Interest Payment Dates. "Tax Credit BABs" means Bonds that are issued and sold as obligations to which Section 54AA(a) of the Code applies, the interest on which is includible in gross income for federal income tax purposes and with respect to which one or more Tax Credits is allowed under the Code. "Tax- Exempt Bonds" means Bonds that are issued and sold as obligations to which Section 103 of the Code applies, the interest on which is excluded from gross income for federal income tax purposes. "Tax Status" means the status of Bonds as Tax- Exempt Bonds, Direct Payment BABs or Tax Credit BABs. "Term Bonds" means those Bonds designated as such and maturing on the date or dates set forth in the Certificate of Award, bearing interest payable on each Interest Payment Date and subject to mandatory sinking fund redemption. The captions and headings in this Ordinance are solely for convenience of reference and in no way define, limit or describe the scope or intent of any Sections, subsections, paragraphs, subparagraphs or clauses hereof. Reference to a Section means a section of this Ordinance unless otherwise indicated. Section 2 Authorized Principal Amount and Purpose; Application of Proceeds This Council determines that it is necessary and in the best interest of the City to issue bonds of this City in the maximum principal amount of $2,035,000 (the "Bonds ") for the purpose of paying the costs of improving the municipal waterworks system by constructing the Darree Field water storage tank and related facilities, together with all incidental work and related appurtenances thereto (the "Improvement "). The Bonds shall be issued pursuant to Chapter 133 of the Ohio Revised Code, the Charter of the City, this Ordinance and the Certificate of Award. The aggregate principal amount of Bonds to be issued shall not exceed the maximum principal amount specified in this Section 2 and shall be an amount determined by the Director of Finance in the Certificate of Award to be the aggregate principal amount of Bonds that is required to be issued at this time for the purpose stated in this Section 2, taking into account the costs of the Improvement, the estimated financing costs and the interest rates on the Bonds. The proceeds from the sale of the Bonds received by the City (or withheld by the Original Purchaser on behalf of the City as described below) shall be paid into the proper fund or funds, and those proceeds are appropriated and shall be used for the purpose for which the Bonds are being issued. The Certificate of Award and the Purchase Agreement may authorize the Original Purchaser to withhold certain proceeds from the purchase price of the Bonds to provide for the payment of certain financing costs on behalf of the City. Any portion of those proceeds received by the City (after payment of those financing costs) representing premium or accrued interest shall be paid into the Bond Retirement Fund. RECORD OF ORDINANCES Ordinance No. 55 -09 Page 4 of 13 Passed . 20 Section 3. Denominations Dating; Principal and Interest Payment and Redemption Provisions The Bonds shall be issued in one lot and only as fully registered bonds, in the Authorized Denominations, but in no case as to a particular maturity date exceeding the principal amount maturing on that date. The Bonds shall be dated as provided in the Certificate of Award; provided that their dated date shall not be more than sixty (60) days prior to the Closing Date. (a) Interest Rates and Payment Dates The Bonds shall bear the rate or rates of interest per year (computed on the basis of a 360 -day year consisting of twelve 30 -day months) as shall be determined by the Director of Finance, subject to subsection (c) of this Section, in the Certificate of Award. Interest on the Bonds shall be payable at such rate or rates on the Interest Payment Dates until the principal amount has been paid or provided for. The Bonds shall bear interest from the most recent date to which interest has been paid or provided for or, if no interest has been paid or provided for, from their date. (b) Principal Payment Schedule The Bonds shall mature or be payable pursuant to Mandatory Sinking Fund Redemption Requirements (as hereinafter defined and described) on the Principal Payment Dates in principal amounts as shall be determined by the Director of Finance, subject to subsection (c) of this Section, in the Certificate of Award, which determination shall be in the best interest of and financially advantageous to the City. Consistent with the foregoing and in accordance with the determination of the best interest of and financial advantages to the City, the Director of Finance shall specify in the Certificate of Award (i) the aggregate principal amount of Bonds to be issued as Serial Bonds, the Principal Payment Date or Dates on which those Bonds shall be stated to mature and the principal amount thereof that shall be stated to mature on each such Principal Payment Date, and (ii) the aggregate principal amount of Bonds to be issued as Term Bonds, the Principal Payment Date or Dates on which those Bonds shall be stated to mature, the principal amount thereof that shall be stated to mature on each such Principal Payment Date, the Principal Payment Date or Dates on which Term Bonds shall be subject to mandatory sinking fund redemption (each a "Mandatory Redemption Date ") and the principal amount thereof that shall be payable pursuant to Mandatory Sinking Fund Redemption Requirements (as defined below) on each Mandatory Redemption Date. (c) Conditions for Establishment of Interest Rates and Principal Payment Dates and Amounts The rate or rates of interest per year to be borne by the Bonds, and the principal amount of Bonds maturing or payable pursuant to Mandatory Sinking Fund Redemption Requirements (as defined below) on each Principal Payment Date, shall be such that the total principal and interest payments on the Bonds in any fiscal year in which principal is payable is not more than three times the amount of those payments in any other fiscal year. The net interest rate per year for the Bonds determined by taking into account the respective principal amounts of the Bonds and terms to maturity or mandatory sinking fund redemption of those principal amounts of Bonds shall not exceed 10.00% per year. (d) Payment of Debt Charges The debt charges on the Bonds shall be payable in lawful money of the United States of America without deduction for the services of the Bond Registrar as paying agent. Principal of and any premium on the Bonds shall be payable when due upon presentation and surrender of the Bonds at the designated corporate trust office of the Bond Registrar. Interest on a Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond was registered, and to that person's address appearing, on the Bond Register at the close of business on the 15th day of the calendar month next preceding that Interest Payment Date. Notwithstanding the foregoing, if and so long as the Bonds are issued in a book entry system, principal of and interest and any premium on the Bonds shall be payable in the manner provided in any agreement entered into by the Director of Finance, in the name and on behalf of the City, in connection with the book entry system. (e) Redemption Provisions The Bonds shall be subject to redemption prior to stated maturity as follows: redemption requirements, at a redemption price of 100% of the principal amount redeemed, plus accrued interest to the redemption date, on the applicable Mandatory Redemption Dates and in the principal amounts payable on those Dates, for which (i) Mandatory Sinking Fund Redemption of Term Bonds If any of the Bonds are issued as Term Bonds, the Term Bonds shall be subject to mandatory redemption in part by lot and be redeemed pursuant to mandatory sinking fund RECORD OF ORDINANCES Ordinance No. 55 -09 Page 5 of 13 Passed Page provision is made in the Certificate of Award (such Dates and amounts being referred to as the "Mandatory Sinking Fund Redemption Requirements'). The aggregate of the moneys to be deposited with the Bond Registrar for payment of principal of and interest on any Term Bonds on each Mandatory Redemption Date shall include an amount sufficient to redeem on that Date the principal amount of Term Bonds payable on that Date pursuant to the Mandatory Sinking Fund Redemption Requirements (less the amount of any credit as hereinafter provided). The City shall have the option to deliver to the Bond Registrar for cancellation Term Bonds in any aggregate principal amount and to receive a credit against the then current or any subsequent Mandatory Sinking Fund Redemption Requirement (and corresponding mandatory redemption obligation) of the City, as specified by the Director of Finance, for Term Bonds stated to mature on the same Principal Payment Date and bearing interest at the same rate and having the same Tax Status as the Term Bonds so delivered. That option shall be exercised by the City on or before the 45th day preceding any Mandatory Redemption Date with respect to which the City wishes to obtain a credit, by furnishing the Bond Registrar a certificate, signed by the Director of Finance, setting forth the extent of the credit to be applied with respect to the then current or any subsequent Mandatory Sinking Fund Redemption Requirement for Term Bonds stated to mature on the same Principal Payment Date and bearing interest at the same rate and having the same Tax Status as the Term Bonds so delivered. If the certificate is not timely furnished to the Bond Registrar, the current Mandatory Sinking Fund Redemption Requirement (and corresponding mandatory redemption obligation) shall not be reduced. A credit against the then current or any subsequent Mandatory Sinking Fund Redemption Requirement (and corresponding mandatory redemption obligation), as specified by the Director of Finance, also shall be received by the City for any Term Bonds which prior thereto have been redeemed (other than through the operation of the applicable Mandatory Sinking Fund Redemption Requirements) or purchased for cancellation and canceled by the Bond Registrar, to the extent not applied theretofore as a credit against any Mandatory Sinking Fund Redemption Requirement, for Term Bonds stated to mature on the same Principal Payment Date and bearing interest at the same rate and having the same Tax Status as the Term Bonds so delivered, redeemed or purchased and canceled. Each Term Bond so delivered, or previously redeemed, or purchased and canceled, shall be credited by the Bond Registrar at 100% of the principal amount thereof against the then current or subsequent Mandatory Sinking Fund Redemption Requirements (and corresponding mandatory redemption obligations), as specified by the Director of Finance, for Term Bonds stated to mature on the same Principal Payment Date and bearing interest at the same rate and having the same Tax Status as the Term Bonds so delivered, redeemed or purchased and canceled. (ii) Optional Redemption The Bonds (if any) of the Tax Status, interest rates and maturities specified in the Certificate of Award shall be subject to optional redemption by and at the sole option of the City, in whole or in part in integral multiples of $5,000, on the dates and at the redemption prices (expressed as a percentage of the principal amount to be redeemed), plus accrued interest to the redemption date, to be determined by the Director of Finance in the Certificate of Award; provided that the earliest optional redemption date shall not be later than December 1, 2020, and the redemption price for any optional redemption date shall not be greater than 103 %. Bonds to be redeemed pursuant to this paragraph shall be redeemed only upon written notice from the Director of Finance to the Bond Registrar, given upon the direction of this Council by adoption of a resolution or passage of an ordinance. That notice shall specify the redemption date and the principal amount of each maturity (and Tax Status and/or interest rate within a maturity if applicable) of Bonds to be redeemed, and shall be given at least 45 days prior to the redemption date or such shorter period as shall be acceptable to the Bond Registrar. (iii) Extraordinary Optional Redemption Relating to BABs If any of the Bonds are designated in the Certificate of Award as BABs, the Director of Finance is hereby authorized to determine in the Certificate of Award, which determination shall be made if it is in the best interest of and financially advantageous to the City, whether any of such Bonds shall be subject to extraordinary optional redemption in accordance with this paragraph. Any such Bonds identified in the Certificate of Award as being subject to RECORD OF ORDINANCES Ordinance No. 55 -09 Page 6 of 13 Passed 20_ this paragraph shall be subject to extraordinary optional redemption prior to maturity, by and at the sole option of the City, in whole or in part in integral multiples of $5,000, at a price (plus accrued interest to the redemption date) and on such date or dates to be determined by the Director of Finance in the Certificate of Award, in the event that the government of the United States of America evidences, in the sole judgment of the Director of Finance, by action or failure to act that it will not provide for direct payments to be made to the City in an amount equal to or greater than thirty-five percent (35 1 /o) of the interest payable on those Bonds on any Interest Payment Date. Bonds to be redeemed pursuant to this paragraph shall be redeemed only upon written notice from the Director of Finance to the Bond Registrar, given upon the direction of this Council by adoption of a resolution or passage of an ordinance. That notice shall specify the redemption date and the principal amount of each maturity (and interest rate within a maturity) of Bonds to be redeemed, and shall be given at least 45 days prior to the redemption date or such shorter period as shall be acceptable to the Bond Registrar. (iv) Partial Redempti on . If fewer than all of the outstanding Bonds are called for optional or extraordinary optional redemption at one time and Bonds of more than one maturity (or Tax Status and/or interest rate within a maturity if applicable) are then outstanding, the Bonds that are called shall be Bonds of the maturity or maturities, and Tax Status or Statuses and interest rate or rates selected by the City. If optional or extraordinary optional redemption of Term Bonds at a redemption price exceeding 100 % of the principal amount to be redeemed is to take place as of any Mandatory Redemption Date applicable to those Term Bonds, the Term Bonds, or portions thereof, to be redeemed optionally shall be selected by lot prior to the selection by lot of the Term Bonds of the same maturity (and interest rate within a maturity if applicable) to be redeemed on the same date by operation of the Mandatory Sinldng Fund Redemption Requirements. If fewer than all of the Bonds of a single maturity (or Tax Status and/or interest rate within a maturity if applicable) are to be redeemed, the selection of Bonds of that maturity (or Tax Status and/or interest rate within a maturity if applicable) to be redeemed, or portions thereof in amounts of $5,000 or any integral multiple thereof, shall be made by the Bond Registrar by lot in a manner determined by the Bond Registrar. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than $5,000 are then outstanding, each $5,000 unit of principal thereof shall be treated as if it were a separate Bond of the denomination of $5,000. If it is determined that one or more, but not all, of the $5,000 units of principal amount represented by a Bond are to be called for redemption, then, upon notice of redemption of a $5,000 unit or units, the registered owner of that Bond shall surrender the Bond to the Bond Registrar (A) for payment of the redemption price of the $5,000 unit or units of principal amount called for redemption (including, without limitation, the interest accrued to the date fixed for redemption and any premium), and (B) for issuance, without charge to the registered owner, of a new Bond or Bonds of any Authorized Denomination or Denominations in an aggregate principal amount equal to the urnmatured and unredeemed portion of, and bearing interest at the same rate, having the same Tax Status and maturing on the same date as, the Bond surrendered. (v) Notice of Redemption The notice of the call for redemption of Bonds shall identify (A) by designation, letters, numbers or other distinguishing marks, the Bonds or portions thereof to be redeemed, (B) the redemption price to be paid, (C) the date fixed for redemption, and (D) the place or places where the amounts due upon redemption are payable. The notice shall be given by the Bond Registrar on behalf of the City by mailing a copy of the redemption notice by first-class mail, postage prepaid, at least 30 days prior to the date fixed for redemption, to the registered owner of each Bond subject to redemption in whole or in part at the registered owner's address shown on the Bond Register maintained by the Bond Registrar at the close of business on the 15th day preceding that mailing. Failure to receive notice by mail or any defect in that notice regarding any Bond, however, shall not affect the validity of the proceedings for the redemption of any Bond. (vi) Payment of Redeemed Bonds In the event that notice of redemption shall have been given by the Bond Registrar to the registered owners as provided above, there shall be deposited with the Bond Registrar on or prior to the redemption date, moneys that, in addition to any other moneys available therefor and held by the Bond Registrar, will be sufficient to redeem at the redemption price thereof, plus accrued interest to the redemption date, all of the redeemable Bonds for which notice of redemption has been given. Notice having been mailed in the manner provided in the RECORD OF ORDINANCES Dayton Legal Blank. Inc. Ordinance No. 55 -09 Page 7 of 13 Passed 20 preceding paragraph hereof, the Bonds and portions thereof called for redemption shall become due and payable on the redemption date, and, subject to the provisions of Sections 3(d) and 5, upon presentation and surrender thereof at the place or places specified in that notice, shall be paid at the redemption price, plus accrued interest to the redemption date. If moneys for the redemption of all of the Bonds and portions thereof to be redeemed, together with accrued interest thereon to the redemption date, are held by the Bond Registrar on the redemption date, so as to be available therefor on that date and, if notice of redemption has been deposited in the mail as aforesaid, then from and after the redemption date those Bonds and portions thereof called for redemption shall cease to bear interest and no longer shall be considered to be outstanding. If those moneys shall not be so available on the redemption date, or that notice shall not have been deposited in the mail as aforesaid, those Bonds and portions thereof shall continue to bear interest, until they are paid, at the same rate as they would have borne had they not been called for redemption. All moneys held by the Bond Registrar for the redemption of particular Bonds shall be held in trust for the account of the registered owners thereof and shall be paid to them, respectively, upon presentation and surrender of those Bonds; provided that any interest earned on the moneys so held by the Bond Registrar shall be for the account of and paid to the City to the extent not required for the payment of the Bonds called for redemption. (f) Tax Status and Related Series Designations The respective principal amounts of the Bonds to be issued as Tax- Exempt Bonds, Direct Payment BABs and Tax Credit BABs shall be determined by the D of Finance in the Certificate of Award, having due regard to the best interest of and financial advantages to the City. To the extent the Director of Finance determines that it would be in the best interest of and financially advantageous to the City and to facilitate the sale of the Bonds, a separate series designation may be assigned to the respective principal amounts of the Bonds to be issued as Tax- Exempt Bonds, Direct Payment BABs and Tax Credit BABs in the Certificate of Award; provided that all of such Bonds shall be treated as a single issue for purposes of this Ordinance. Section 4. Execution and Authentication of Bonds; Appointment of Bond Regi strar The Bonds shall be signed by the City Manager and the Director of Finance, in the name of the City and in their official capacities; provided that either or both of those signatures may be a facsimile. The Bonds shall be issued in the Authorized Denominations and numbers as requested by the Original Purchaser and approved by the Director of Finance, shall be numbered as determined by the Director of Finance in order to distinguish each Bond from any other Bond, and shall express upon their faces the purpose, in summary terms, for which they are issued and that they are issued pursuant to this Ordinance. The Director of Finance is hereby authorized to designate in the Certificate of Award a bank or trust company authorized to do business in the State of Ohio to act as the initial Bond Registrar. The Director of Finance shall sign and deliver, in the name and on behalf of the City, the Registrar Agreement between the City and the Bond Registrar, in substantially the form as is now on file with the Clerk of Council. The Registrar Agreement is approved, together with any changes or amendments that are not inconsistent with this Ordinance and not substantially adverse to the City and that are approved by the Director of Finance on behalf of the City, all of which shall be conclusively evidenced by the signing of the Registrar Agreement or amendments thereto. The Director of Finance shall provide for the payment of the services rendered and for reimbursement of expenses incurred pursuant to the Registrar Agreement, except to the extent paid or reimbursed by the Original Purchaser in accordance with the Certificate of Award and the Purchase Agreement, from the proceeds of the Bonds to the extent available and then from other money lawfully available and appropriated or to be appropriated for that purpose. No Bond shall be valid or obligatory for any purpose or shall be entitled to any security or benefit under the Bond proceedings unless and until the certificate of authentication printed on the Bond is signed by the Bond Registrar as authenticating agent. Authentication by the Bond Registrar shall be conclusive evidence that the Bond so authenticated has been duly issued, signed and delivered under, and is entitled to the security and benefit of the Bond proceedings. The certificate of authentication may be signed by any authorized officer or employee of the Bond Registrar or by any other person acting as an agent of the Bond Registrar and approved by the Director of Finance on behalf of the City. The same person need not sign the certificate of authentication on all of the Bonds. RECORD OF ORDINANCES 55 -09 Page 8 of 13 Ordinance No. Passed . 20 Section 5 Registration; Transfer and Exchange; Book Entry System (a) Bond Register So long as any of the Bonds remain outstanding, the City will cause the Bond Registrar to maintain and keep the Bond Register at its designated corporate trust office. Subject to the provisions of Sections 3(d) and 9(c), the person in whose name a Bond is registered on the Bond Register shall be regarded as the absolute owner of that Bond for all purposes of the Bond proceedings. Payment of or on account of the debt charges on any Bond shall be made only to or upon the order of that person; neither the City nor the Bond Registrar shall be affected by any notice to the contrary, but the registration may be changed as provided in this Section. All such payments shall be valid and effectual to satisfy and discharge the City's liability upon the Bond, including interest, to the extent of the amount or amounts so paid. (b) Transfer and Exchange Any Bond may be exchanged for Bonds of any Authorized Denomination upon presentation and surrender at the designated corporate trust office of the Bond Registrar, together with a request for exchange signed by the registered owner or by a person legally empowered to do so in a form satisfactory to the Bond Registrar. A Bond may be transferred only on the Bond Register upon presentation and surrender of the Bond at the designated corporate trust office of the Bond Registrar together with an assignment signed by the registered owner or by a person legally empowered to do so in a form satisfactory to the Bond Registrar. Upon exchange or transfer the Bond Registrar shall complete, authenticate and deliver a new Bond or Bonds of any Authorized Denomination or Denominations requested by the owner equal in the aggregate to the unmatured principal amount of the Bond surrendered and bearing interest at the same rate and maturing on the same date. If manual signatures on behalf of the City are required, the Bond Registrar shall undertake the exchange or transfer of Bonds only after the new Bonds are signed by the authorized officers of the City. In all cases of Bonds exchanged or transferred, the City shall sign and the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond proceedings. The exchange or transfer shall be without charge to the owner, except that the City and Bond Registrar may make a charge sufficient to reimburse them for any tax or other governmental charge required to be paid with respect to the exchange or transfer. The City or the Bond Registrar may require that those charges, if any, be paid before the procedure is begun for the exchange or transfer. All Bonds issued and authenticated upon any exchange or transfer shall be valid obligations of the City, evidencing the same debt, and entitled to the same security and benefit under the Bond proceedings as the Bonds surrendered upon that exchange or transfer. Neither the City nor the Bond Registrar shall be required to make any exchange or transfer of (i) Bonds then subject to call for redemption between the 15th day preceding the mailing of notice of Bonds to be redeemed and the date of that mailing, or (ii) any Bond selected for redemption, in whole or in part. (c) Book Ent y System Notwithstanding any other provisions of this Ordinance, if the Director of Finance determines in the Certificate of Award that it is in the best interest of and financially advantageous to the City, the Bonds may be issued in book entry form in accordance with the following provisions of this Section. The Bonds may be issued to a Depository for use in a book entry system and, if and so long as a book entry system is utilized, (i) the Bonds may be issued in the form of a single, fully registered Bond representing each maturity and if applicable, each interest rate within a maturity, and registered in the name of the Depository or its nominee, as registered owner, and immobilized in the custody of the Depository or its designated agent, which may be the Bond Registrar; (ii) the book entry interest owners of Bonds in book entry form shall not have any right to receive Bonds in the form of physical securities or certificates; (iii) ownership of book entry interests in Bonds in book entry form shall be shown by book entry on the system maintained and operated by the Depository and its Participants, and transfers of the ownership of book entry interests shall be made only by book entry by the Depository and its Participants; and (iv) the Bonds as such shall not be transferable or exchangeable, except for transfer to another Depository or to another nominee of a Depository, without further action by the City. If any Depository determines not to continue to act as a Depository for the Bonds for use in a book entry system, the Director of Finance may attempt to establish a securities depository/book entry relationship with another qualified Depository. If the Director of Finance does not or is unable to do so, the Director of Finance, after making provision for notification of the book entry interest owners by the then Depository and any other arrangements deemed necessary, shall permit withdrawal of the Bonds from the Depository, and shall cause Bond certificates in registered form and Authorized Denominations to be authenticated by the Bond RECORD OF ORDINANCES MIN Ordinance No. Page 9 of 13 Passed 20 Registrar and delivered to the assigns of the Depository or its nominee, all at the cost and expense (including any costs of printing), if the event is not the result of City action or inaction, of those persons requesting such issuance. The Director of Finance is hereby authorized and directed, to the extent necessary or required, to enter into any agreements, in the name and on behalf of the City, that the Director of Finance determines to be necessary in connection with a book entry system for the Bonds. Section 6. Sale of the Bonds to the Original Purchaser The Director of Finance is authorized to sell the Bonds at private sale to the Original Purchaser at a purchase price, not less than 97% of the aggregate principal amount thereof, as shall be determined by the Director of Finance in the Certificate of Award, plus accrued interest (if any) on the Bonds from their date to the Closing Date, and shall be awarded by the Director of Finance with and upon such other terms as are required or authorized by this Ordinance to be specified in the Certificate of Award, in accordance with law, the provisions of this Ordinance and the Purchase Agreement. The Director of Finance is authorized, if it is determined to be in the best interest of the City, to combine the issue of Bonds with one or more other bond issues of the City into a consolidated bond issue pursuant to Section 133.30(B) of the Ohio Revised Code in which case a single Certificate of Award may be utilized for the consolidated bond issue if appropriate and consistent with the terms of this Ordinance. The Director of Finance shall sign and deliver the Certificate of Award and shall cause the Bonds to be prepared and signed and delivered, together with a true transcript of proceedings with reference to the issuance of the Bonds, to the Original Purchaser upon payment of the purchase price. The Director of Finance shall sign and deliver, in the name and on behalf of the City, the Purchase Agreement between the City and the Original Purchaser, in substantially the form as is now on file with the Clerk of Council, providing for the sale to, and the purchase by, the Original Purchaser of the Bonds. The Purchase Agreement is approved, together with any changes or amendments that are not inconsistent with this Ordinance and not substantially adverse to the City and that are approved by the Director of Finance on behalf of the City, all of which shall be conclusively evidenced by the signing of the Purchase Agreement or amendments thereto. The Mayor, the City Manager, the Director of Finance, the Director of Law, the Clerk of Council and other City officials, as appropriate, each are authorized and directed to sign any transcript certificates, financial statements and other documents and instruments and to take such actions as are necessary or appropriate to consummate the transactions contemplated by this Ordinance. Section 7. Provisions for Tax Levy There shall be levied on all the taxable property in the City, in addition to all other taxes, a direct tax annually during the period the Bonds are outstanding in an amount sufficient to pay the debt charges on the Bonds when due, which tax shall not be less than the interest and sinking fund tax required by Section 11 of Article XII of the Ohio Constitution. The tar shall be within the ten -mill limitation imposed by law, shall be and is ordered computed, certified, levied and extended upon the tax duplicate and collected by the same officers, in the same manner and at the same time that taxes for general purposes for each of those years are certified, levied, extended and collected, and shall be placed before and in preference to all other items and for the full amount thereof. The proceeds of the tax levy shall be placed in the Bond Retirement Fund, which is irrevocably pledged for the payment of the debt charges on the Bonds when and as the same fall due. In each year, to the extent net revenues from the City's waterworks system are available for the payment of the debt charges on the Bonds and are appropriated for that purpose, the tax shall be reduced by the amount of such net revenues so available and appropriated. In each year to the extent money from the municipal income tax is available for the payment of the debt charges on the Bonds and is appropriated for that purpose, and to the extent not paid from net revenues of the City's waterworks system, the amount of the tax shall be reduced by the amount of such money so available and appropriated with the covenant hereinafter set forth. To the extent necessary, the debt charges on the Bonds shall be paid from municipal income taxes lawfully available therefor under the Constitution, the laws of the State of Ohio and the Charter of the City; and the City hereby covenants, subject and pursuant to such authority, including particularly Section 133.05(B)(7) of the Ohio Revised Code, to appropriate annually from such municipal income taxes such amount as is necessary to meet such annual debt charges. RECORD OF ORDINANCES Ordinance No. 55 -09 Page 10 of 13 Passed 20 Nothing in the two preceding paragraphs in any way diminishes the irrevocable pledge of the full faith and credit and general property taxing power of the City to the prompt payment of the debt charges on the Bonds. Section 8. Federal Tax Considerations (a) Tax - Exempt Bonds The representations and covenants in this subsection (a) apply only to Bonds of a series issued and sold as Tax- Exempt Bonds. The City covenants that it will use, and will restrict the use and investment of, the proceeds of the Bonds in such manner and to such extent as may be necessary so that (i) the Bonds will not (A) constitute private activity bonds or arbitrage bonds under Sections 141 or 148 of the Code or (B) be treated other than as bonds the interest on which is excluded from gross income under Section 103 of the Code, and (ii) the interest on the Bonds will not be an item of tax preference under Section 57 of the Code. The City further covenants that (i) it will take or cause to be taken such actions that may be required of it for the interest on the Bonds to be and remain Tax- Exempt Bonds, (ii) it will not take or authorize to be taken any actions that would adversely affect that Tax Status, and (iii) it, or persons acting for it, will, among other acts of compliance, (A) apply the proceeds of the Bonds to the governmental purpose of the borrowing, (B) restrict the yield on investment property, (C) make timely and adequate payments to the federal government, (D) maintain books and records and make calculations and reports and (E) refrain from certain uses of those proceeds, and, as applicable, of property financed with such proceeds, all in such manner and to the extent necessary to assure such exclusion of that interest under the Code. (b) BABs The representations and covenants in this subsection (b) apply only to Bonds of a series issued and sold as Direct Payment BABs or Tax Credit BABs. The City covenants that it will use, and will restrict the use and investment of, the proceeds of the Bonds in such manner and to such extent as may be necessary so that the Bonds will qualify as Direct Payment BABs or Tax Credit BABs, as applicable, under the applicable provisions of Section 54AA of the Code. The City further covenants that (i) it will take or cause to be taken such actions that may be required of it for the Bonds to qualify and remain qualified as Direct Payment BABs or Tax Credit BABs, as applicable, including, but not limited to, making an irrevocable election for the Bonds to be Direct Payment BABs or Tax Credit BABs, as applicable, (ii) it will not take or authorize to be taken any actions that would adversely affect that Tax Status, including, but not limited to, allowing the sale of a Bond with more than a de minimus amount (determined under rules similar to those of Section 1273(a)(3) of the Code) of premium over the stated principal amount of the Bonds, and (iii) it, or persons acting for it, will, among other acts of compliance, (A) apply the proceeds of the Bonds to the governmental purpose of the borrowing, (B) restrict the yield on investment property, (C) make timely and adequate payments to the federal government, (D) maintain books and records and make calculations and reports and (E) refrain from certain uses of those proceeds, and, as applicable, of property financed with such proceeds, all in such manner and to the extent necessary to assure such Tax Status under Section 54AA of the Code. (c) Further Actions The Director of Finance or any other officer of the City having responsibility for issuance of the Bonds is hereby authorized (i) to make or effect any election, selection, designation, choice, consent, approval, or waiver on behalf of the City with respect to the Bonds as the City is permitted to or required to make or give under the federal income tax laws, including, without limitation thereto, the election to issue a portion of the Bonds as Direct Payment BABs or Tax Credit BABs, as applicable, and any of the elections provided for in Section 54AA, 148(f)(4)(C), 14000 -1 or 14000 -2 of the Code or available under Section 148 of the Code, for the purpose of assuring, enhancing or protecting favorable tax treatment or Tax Status of the Bonds or interest thereon or an entitlement to Tax Credits or Direct Payments relating thereto, or assisting compliance with requirements for that purpose, reducing the burden or expense of such compliance, reducing the rebate amount or payments or penalties with respect to Tax- Exempt Bonds, or making payments of special amounts in lieu of making computations to determine, or paying, excess earnings as rebate, or obviating those amounts or payments with respect to Tax- Exempt Bonds, which action shall be in writing and signed by the officer, (ii) to take any and all other actions, make or obtain calculations, make payments, and make or give RECORD OF ORDINANCES Ordinance No. 55 -09 Page 11 of 13 Passed 20 reports, covenants and certifications of and on behalf of the City, as may be appropriate to assure the intended Tax Status of the Bonds or the City's entitlement to receive one or more Direct Payments, and (iii) to give one or more appropriate certificates of the City, for inclusion in the transcript of proceedings for the Bonds, setting forth the reasonable expectations of the City regarding the amount and use of all the proceeds of the Bonds, the facts, circumstances and estimates on which they are based, and other facts and circumstances relevant to the tax treatment of the interest on and Direct Payments or Tax Credits relating to the Bonds and the Tax Status of the Bonds. The Director of Finance or any other officer of the City having responsibility for issuance of the Bonds is specifically authorized to designate Tax- Exempt Bonds as "qualified tax - exempt obligations" if such designation is applicable and desirable, and to make any related necessary representations and covenants. Section 9. Official Statement, Rating, Bond Insurance and Continuing Disclosure (a) Primary Offering Disclosure -- Official Statement The City Manager and the Director of Finance are each authorized and directed, on behalf of the City and in their official capacities, to (i) prepare or cause to be prepared, and make or authorize modifications, completions or changes of or supplements to, a disclosure document in the form of an official statement relating to the original issuance of the Bonds, (ii) determine, and to certify or otherwise represent, when the official statement is to be "deemed final" (except for permitted omissions) by the City as of its date or is a final official statement for purposes of paragraph (b) of the Rule, (iii) use and distribute, or authorize the use and distribution of those official statements and any supplements thereto in connection with the original issuance of the Bonds, and (iv) complete and sign those official statements and any supplements thereto as so approved, together with such certificates, statements or other documents in connection with the finality, accuracy and completeness of those official statements and any supplements, as they may deem necessary or appropriate. (b) Application for Raring or Bond Insurance If, in the judgment of the Director of Finance, the filing of an application for (i) a rating on the Bonds by one or more nationally - recognized rating agencies, or (ii) a policy of insurance from a company or companies to better assure the payment of principal of and interest on the Bonds, is in the best interest of and financially advantageous to this City, the Director of Finance is authorized to prepare and submit those applications, to provide to each such agency or company such information as may be required for the purpose, and to provide further for the payment of the cost of obtaining each such rating or policy, except to the extent otherwise paid in accordance with the Purchase Agreement, from the proceeds of the Bonds to the extent available and otherwise from any other funds lawfully available and that are appropriated or shall be appropriated for that purpose. The Director of Finance is hereby authorized, to the extent necessary or required, to enter into any agreements, in the name of and on behalf of the City, that the Director of Finance determines to be necessary in connection with the obtaining of that bond insurance. (c) Agreement to Provide Continuing Disclosure For the benefit of the holders and beneficial owners from time to time of the Bonds, the City agrees, as the only obligated person with respect to the Bonds under the Rule, to provide or cause to be provided such financial information and operating data, audited financial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5)(i) of the Rule. The City further agrees, in particular, to provide or cause to be provided: (i) to the MSRB (A) Annual Information for each City fiscal year ending hereafter, not later than the 270th day following the end of the fiscal year, and (B) when and if available, audited City financial statements for each such fiscal year; and (ii) to the MSRB, in a timely manner, notice of (A) any Specified Event if that Event is material, (B) the City's failure to provide the Annual Information within the time specified above, and (C) any change in the accounting principles applied in the preparation of its annual financial statements, any change in its fiscal year, its failure to appropriate funds to meet costs to be incurred to perform the Continuing Disclosure Agreement, and of the termination of the Continuing Disclosure Agreement. The City further agrees that all documents provided to the MSRB shall be in the form and accompanied by identifying information as prescribed by the MSRB. RECORD OF ORDINANCES 55 -09 Ordinance No. Page 12 of 13 Passed Page In order to further describe and specify certain terms of the City's Continuing Disclosure Agreement made for purposes of the Rule in and pursuant to this Ordinance and to be formed, collectively, by this subsection (c) and the Continuing Disclosure Certificate, the Director of Finance is authorized and directed to complete, sign and deliver the Continuing Disclosure Certificate, in the name and on behalf of the City, to specify in reasonable detail the Annual Information to be provided (which may be provided by specific reference to other documents previously filed and available in accordance with the Rule), whether the City has obtained any credit enhancement or provider for the Bonds and the City's expectations as to whether audited financial statements will be prepared, the accounting principles to be applied in their preparation, and whether they will be available together with, or separately from, Annual Information. The Director of Finance is further authorized and directed to establish procedures in order to ensure compliance by the City with its Continuing Disclosure Agreement, including timely provision of information and notices as described above. Prior to making any filing in accordance with clause (ii) above or providing notice of the occurrence of any other events, the Director of Finance shall consult with and obtain legal advice from, as appropriate, the Director of Law and bond or other qualified independent special counsel selected by the City. The Director of Finance, acting in the name and on behalf of the City, shall be entitled to rely upon any such legal advice in determining whether a filing should be made. The City reserves the right to amend its Continuing Disclosure Agreement, and to obtain the waiver of noncompliance with any provision of the Continuing Disclosure Agreement, as may be necessary or appropriate to achieve its compliance with any applicable federal securities law or rule, to cure any ambiguity, inconsistency or formal defect or omission, and to address any change in circumstances arising from a change in legal requirements, change in law, or change in the identity, nature, or status of the City, or type of business conducted by the City. Any such amendment or waiver will not be effective unless the Continuing Disclosure Agreement (as amended or taking into account such waiver) would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any applicable amendments to or official interpretations of the Rule, as well as any change in circumstances, and until the City shall have received: either (i) a written opinion of bond or other qualified independent special counsel selected by the City that the amendment or waiver would not materially impair the interests of holders or beneficial owners of the Bonds or (ii) the written consent to the amendment or waiver of the holders of at least a majority of the principal amount of the Bonds then outstanding. Annual Information containing any revised operating data or financial information shall explain, in narrative form, the reasons for any such amendment or waiver and the impact of the change on the type of operating data or financial information being provided. The City's Continuing Disclosure Agreement shall be solely for the benefit of the holders and beneficial owners from time to time of the Bonds. The exclusive remedy for any breach of the Continuing Disclosure Agreement by the City shall be limited, to the extent permitted by law, to a right of holders and beneficial owners to institute and maintain, or to cause to be instituted and maintained, such proceedings as may be authorized at law or in equity to obtain the specific performance by the City of its obligations under the Continuing Disclosure Agreement. Any individual holder or beneficial owner may institute and maintain, or cause to be instituted and maintained, such proceedings to require the City to provide or cause to be provided a pertinent filing if such a filing is due and has not been made. Any such proceedings to require the City to perform any other obligation under the Continuing Disclosure Agreement (including any proceedings that contest the sufficiency of any pertinent filing) shall be instituted and maintained only by a trustee appointed by the holders and beneficial owners of not less than 25% in principal amount of the Bonds then outstanding or by holders and beneficial owners of not less than 10% in principal amount of the Bonds then outstanding in accordance with Section 133.25(B)(4)(b) or (C)(1) of the Ohio Revised Code, as applicable (or any like or comparable successor provisions). The performance by the City of its Continuing Disclosure Agreement shall be subject to the annual appropriation of any funds that may be necessary to perform it. The City's Continuing Disclosure Agreement shall remain in effect only for such period that the Bonds are outstanding in accordance with their terms and the City remains an obligated person with respect to the Bonds within the meaning of the Rule. The obligation of the City to provide the Annual Information and notices of the events described above shall terminate, if and when the City no longer remains such an obligated person. RECORD OF ORDINANCES 55 -09 Page 13 of 13 Ordinance No. Passed . 20 Section 10 . Bond Counsel The legal services of the law fuze of Squire, Sanders & Dempsey L.L.P. are hereby retained. Those legal services shall be in the nature of legal advice and recommendations as to the documents and the proceedings in connection with the authorization, sale and issuance of the Bonds and rendering at delivery related legal opinions. In providing those legal services, as an independent contractor and in an attorney - client relationship, that firm shall not exercise any administrative discretion on behalf of this City in the formulation of public policy, expenditure of public funds, enforcement of laws, rules and regulations of the State, any county or municipal corporation or of this City, or the execution of public trusts. For those legal services that firm shall be paid just and reasonable compensation and shall be reimbursed for actual out -of- pocket expenses incurred in providing those legal services. The Director of Finance is authorized and directed to make appropriate certification as to the availability of funds for those fees and any reimbursement and to issue an appropriate order for their timely payment as written statements are submitted by that firm. Section 11. Certification and Delivery of Ordinance and Certificate of Award The Clerk of Council is directed to promptly deliver a certified copy of this Ordinance and an executed copy of the Certificate of Award to the County Auditors of Delaware County, Ohio, Franklin County, Ohio, and Union County, Ohio. Section 12. Satisfaction of Conditions for Bond Issuance This Council determines that all acts and conditions necessary to be performed by the City or to have been met precedent to and in the issuing of the Bonds in order to make them legal, valid and binding general obligations of the City have been performed and have been met, or will at the time of delivery of the Bonds have been performed and have been met, in regular and due form as required by law; that the full faith and credit and general property taxing power (as described in Section 7) of the City are pledged for the timely payment of the debt charges on the Bonds; and that no statutory or constitutional limitation of indebtedness or taxation will have been exceeded in the issuance of the Bonds. Section 13. Compliance with Open Meeting Requirements This Council finds and determines that all formal actions of this Council and any of its committees concerning and relating to the passage of this Ordinance were taken in an open meeting of this Council or its committees and that all deliberations of this Council and of any committees that resulted in those formal actions were in meetings open to the public, all in compliance with the law, including Section 121.22 of the Ohio Revised Code. Section 14. Effective Date This Ordinance is declared to be an emergency measure necessary for the immediate preservation of the public peace, health, safety, and welfare of the City, and for the further reason that this Ordinance is required to be immediately effective in order to issue and sell the Bonds, which is necessary to enable the City to timely enter into contracts for the construction of the Improvement; wherefore, this Ordinance shall be in full force and effect immediately upon its passage. Signed: Mayor - Presiding Officer Attest: Clerk of Council Passed: 2009 Effective: p P,Y , 2009 CITY OF DUBLIN_ Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 -1090 Phone: 614 - 410 -4400 • Fax: 614410 -4490 To: Members of Dublin City Council From: Terry Foegler, City Manager - rr / Date: October 15, 2009 d Initiated By: Marsha Grigsby, Deputy City Manager /Director of Finance Bryan Thurman, Deputy Director of Finance Memo Re: Ordinances 53 -09 through 57 -09, Providing for the Issuance and Sale of Bonds and Refinancing of Existing Debt Summary Ordinances 53 -09 through 55 -09 authorize the issuance of bonds to provide revenue to fund current projects, and Ordinances 56 -09 and 57 -09 provide for the refinancing of existing debt to reduce the City's future interest costs by an estimate of approximately $2 million through 2020. At the October 5, 2009 Council meeting, staff indicated that an evaluation was taking place of the refinancing of the existing 2001 bond issue, and that staff may present additional legislation on October 19 to authorize the issuance and sale of bonds to refund that issue. Ordinance 61 -09 has been prepared to provide for the refunding of the 2001 bond issue and is included on Council's October 19, 2009 meeting agenda. On the afternoon of October 5, 2009, rating agency conference calls were completed with both Moody's Investors Service and Fitch Ratings. Staff has received a preliminary report from both Moody's and Fitch confirming the City's Aaa and AAA ratings, respectively, and anticipates receiving the final reports prior to the October 19 Council meeting. As Council is aware, Moody's Aaa rating and Fitch's AAA rating are the highest ratings available from both agencies and will allow the City to obtain the lowest interest rates on the debt issued. As highlighted at the October 5, 2009 Council meeting, a Request for Proposal was sent to five firms that provide underwriting services. Their proposals have been evaluated by staff and Matt Stuczynski, the City's financial advisor, and the selection of the firms has been completed. We have designated Stifel Nicolaus as the Senior Manager and NatCity Investments,Inc./PNC Capital Markets LLC and Robert W. Baird & Co. as Co- Managers. The new money issues, Ordinance 53 -09 through 55 -09, allow for Build America Bonds (BABs) to be issued. As highlighted previously, this program was included in the American Recovery and Reinvestment Act and provides an additional option to the tax- exempt bonds traditionally issued by the City. We will evaluate the option of issuing BABs, taking into account the interest costs of tax - exempt bonds as compared to the net interest cost of BABs -- the interest costs less the 35% subsidy to be received from the Federal government. In addition to the interest costs comparisons, Ordinances 53 -09 through 57 -09 - Providing for Issuance and Sale of Bonds, Refinancing of Existing Debt October 15, 2009 Page 2 of 2 consideration will be given to the added complexities of dealing with the Federal government and the potential of the program being modified during the life of the bonds. Based on the low interest rate environment and the potential uncertainties of the BABs, current discussions have focused on the issuance of traditional tax- exempt bonds. Staff will continue discussions with our bond counsel, financial advisor and underwriters and make the final determination once the interest rates for both the tax- exempt bonds and the BABs have been negotiated. In instances where BABs have been issued, it has been, for the most part, in combination with tax- exempt interest bonds. The tax- exempt interest rates have remained more favorable in the early years of the bond issues, with the BABs being more favorable in the later years of the issues. All of the underwriting proposals received recommended that BABs be evaluated based on the potential to receive a lower net interest cost. Staff is currently planning to price the bonds sometime between October 21 and the end of the month. We will be working with our financial advisor, bond counsel and underwriters to determine the actual pricing date. We plan to close on the bond issues in early November. Recommendation Staff recommends that Ordinances 53 -09 through 57 -09 be passed as emergency legislation at the second reading/public hearing on October 19, 2009 permitting the prompt issuance and sale of the bonds to take advantage of the favorable interest rates. Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 -1090 CITY OF DUBLIN_ Phone: 614 - 410 -4400 • Fax: 614 - 410 -4490 Memo To: Members of Dublin City Council From: Terry Foegler, City Manager m / Date: October 1, 2009 Initiated By: Marsha Grigsby, Deputy City Manager/Director of Finance Bryan Thurman, Deputy Director of Finance Re: Ordinances 53 -09 through 57 -09 -Providing for the Issuance and Sale of Bonds Summary Ordinances 53 -09 through 55 -09 authorize the issuance of bonds to provide revenue to fund current projects, and Ordinances 56 -09 and 57 -09 provide for the refinancing of existing debt to reduce the City's future interest costs by an estimate of approximately $2 million through 2020. As discussed during the recent City Council workshops for the 2010 -2014 Capital Improvements Program (CIP), proceeds from debt were programmed as the revenue source to fund a portion of several current capital projects. The bond proceeds authorized by Ordinances 53 -09 through 55 -09 will be utilized for the following projects: Ordinance 53 -09 will provide funding up to $11.75 million to reimburse the General Fund for advances previously made to the COIC Improvement Fund for the acquisition of rights - of -way and easements and for construction costs associated with the relocation of Industrial Parkway, the improvement of S.R. 161 from the exit ramp on the west side of the U.S. 33 /S.R. 161 /Post Road interchange to just east of Cosgray Road, and the relocation of Liggett Road. Of the $9 million advanced from the General Fund to the COIC Improvement Fund in December 2008 for acquisition of rights -of -way and easements, $5.9 million was for the above- referenced projects, and that portion of the advance will be repaid when the bonds authorized by this legislation are issued. The remaining outstanding advance of $3.1 million was utilized for acquisitions related directly to the interchange project and will be repaid in 2010 and 2011 as programmed in the 2010 -2014 CIP. The remaining bond proceeds of up to $5.85 million will be utilized for construction costs for the relocation of Industrial Parkway and the improvements to S.R. 161. The difference between the total construction costs and the bond proceeds will be funded from grants and the existing balance in the COIC Improvement Fund. The grant funding includes: $1 million from the American Recovery and Reinvestment Act (ARRA); $200,000 from a 629 Roadway grant awarded to Union County for this project; and $297,600 in Job Ready Sites grant funding for the improvements to S.R. 161. Memo re. Ordinances 53 -09 through 57 -09 October 1, 2009 Page 2 of 3 • Ordinance 54 -09 will provide funding to reimburse the Sewer Fund for the advance made in April 2009 for the project to line sanitary sewer lines. The debt proceeds will provide sufficient funds to complete the sanitary sewer lines identified to be completed in 2009, 2010 and for the City's share of the 36" Dublin Road trunk line that will be lined as a result of being awarded ARRA funding for the project. The issuance of debt allows the City to accelerate the lining project and to retire the debt over a period of 20 years. The lining will extend the life of the lines by 30 to 50 years. • Ordinance 55 -09 will provide funding to reimburse the Water Fund for the advance made in December 2008 for the construction of the Darree Fields storage tank. The bonds authorized by Ordinances 53 -09 through 55 -09 will be issued for a 20 -year period and are currently estimated to have a net interest cost of 3.29 %. The Ordinances also provide authorization for the City to issue Build America Bonds (BABs). This program was included in the American Recovery and Reinvestment Act and provides for municipalities to issue taxable bonds and receive a Federal government subsidy equal to 35% of the interest costs. Traditionally, municipalities issue tax - exempt bonds that pay a lower rate of interest because the interest income paid to the buyer is exempt from federal and state taxes. BABs provide for government entities to issue bonds that pay interest rates that are competitive with rates paid by corporations. The BABs are attractive to entities that pay no U.S. income taxes (pension plans and foreign investors) as well as to investors seeking high rates of interest income. Staff will evaluate the option of issuing BABs, taking into account the interest costs of tax - exempt bonds as compared to the net interest cost of BABs -- the interest costs less the 35% subsidy to be received from the Federal government. hi addition to the interest costs comparisons, consideration will be given to the added complexities of dealing with the Federal government and the potential of the program being modified during the life of the bonds. As part of the debt administration function, staff continually evaluates opportunities to refinance existing outstanding bonds. Based on the current market interest rates and the opportunity to consolidate a refinancing with a new money issue, Ordinances 56 -09 and 57 -09 provide for the refinancing of the 1998 bond issues and the 2019 and 2020 term bonds from the 2000 bond issues. Ordinance 56 -09 provides authority for the refinancing of the unvoted portion of both previous issues, and Ordinance 57 -09 provides for the refinancing of the voted portion of both bond issues. There are two advantages to refinancing: 1) to reduce interest costs as a result of the interest rates available in the market; and 2) to restructure the issue, usually undertaken to remove burdensome or restrictive covenants imposed by the terms of the bond issue. Based on the current favorable interest rates, the refundings authorized by Ordinances 56 -09 and 57 -09 will reduce the City's interest costs over the remaining life of the bonds. In determining whether or not to proceed with a refunding of outstanding bonds, the present value savings of the bonds being refunded or refinanced are estimated. The general "rule of thumb" is that the present value savings should be at least 3 to 5 percent. Based on interest rate assumptions Memo re. Ordinances 53 -09 through 57 -09 October 1, 2009 Page 3 of 3 as of September 23, 2009, the percentage of savings for the bonds being refunded by Ordinance 56- 09 is estimated at approximately 7.9 %; for the bonds being refunded by Ordinance 57 -09, the percentage is estimated at approximately 9.6 %. The actual savings for both refundings is estimated to be in excess of $2 million. This information is subject to change based on the actual interest rates received. Staff is currently scheduling discussions with the rating agencies, Moody's Investors Service and Fitch Ratings for early October, pricing the week of October 19 and closing in early November. A hard copy of the most current Preliminary Official Statement, a document investors use to review and evaluate the City and it creditworthiness, is available in the Clerk of Council's office and the Council Planning Room. The Official Statement will be finalized once staff has received the bond rating from the rating agencies. Recommendation Staff is recommending that Ordinances 53 -09 through 57 -09 be passed as emergency legislation at the second reading /public hearing on October 19, 2009. FISCAL OFFICER'S CERTIFICATE To the City Council of the City of Dublin, Ohio: As fiscal officer of the City of Dublin, Ohio, I certify in connection with your proposed issue of bonds in the maximum principal amount of $2,035,000 (the "Bonds "), to be issued for the purpose of paying the costs of improving the municipal waterworks system by constructing the Darree Field water storage tank and related facilities, together with all incidental work and related appurtenances thereto (collectively, the "Improvement"), that: I . The estimated life or period of usefulness of the Improvement is at least five years. 2. The maximum maturity of the Bonds, calculated in accordance with Section 133.20 of the Ohio Revised Code, is forty (40) years. Dated: October 1 2009 Director of Finance City of Dublin, Ohio