VILLAGE OF LEONARD
County of Oakland, State of Michigan
Bond Authorizing Resolution 2011 Michigan Transportation Fund Bonds
(Limited Tax General Obligation)
At a Regular Meeting of the Village Council of the Village of Leonard, County of Oakland, State of Michigan (the ‘Village?) held on January 10, 2011 at 7:00 P.M.
PRESENT: President McDonald, Mrs. Sutherby, Mrs. Blanka, Mr. Birr, Mr. Hoffman, Mr. Noaker, Mr. Almeranti
ABSENT: None
The following preamble and resolution were offered by Member Hoffman and supported by Member Sutherby:
WHEREAS, the Village Council of the Village of Leonard does hereby determine that it is necessary to acquire and construct major street improvements in the Village consisting of the reconstruction of Forest Street, a major street in the Village (the ‘Improvements?); and
WHEREAS, the cost of the Improvements is estimated to be not less than Six Hundred Fifty Thousand Dollars ($650,000) before grants; and
WHEREAS, the Village has grants in the approximate amount of Five Hundred Thousand Dollars ($500,000); and
WHEREAS, the Improvements are in accordance with the purposes enumerated in Act 51, Public Acts of Michigan, 1951, as amended (‘Act 51?); and
WHEREAS, to pay the Village’s after-grant cost of the Improvements, the Village Council deems it necessary to borrow the sum of not to exceed One Hundred Fifty Thousand Dollars ($150,000) and issue bonds therefor as authorized by the provisions of Act 175, Public Acts of Michigan, 1952, as amended (‘Act 175?) with the remainder of the cost of the Improvements, if any, to be paid from other lawfully available funds; and
WHEREAS, the revenues received by the Village from the Michigan Transportation Fund pursuant to Act 51 in the year preceding this contemplated borrowing are more than sufficient to comply with all statutory requirements specified in Section 4 of Act 175.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. Cost Estimates; Useful Life. The estimates of cost of the Improvements are hereby approved. The estimated period of usefulness of the Improvements is not less than sixteen (16) years.
2. Bonds Authorized. The Village Council hereby determines it is necessary to borrow the sum of not to exceed One Hundred Fifty Thousand Dollars ($150,000), and issue one or more series of bonds of the Village therefor pursuant to the provisions of Act 175 (the ‘Bonds?), for the purpose of providing funds to pay the Village’s after-grant share of the costs of the Improvements, including the costs of issuance of the Bonds, related financial and legal costs, associated costs of planning, design, property acquisition, engineering, inspection and like costs which are properly capitalizable to the Improvements.
3. Bonds; Designation; Specifications. The Bonds shall be designated 2011 Michigan TRANSPORTATION FUND BONDS (LIMITED TAX GENERAL OBLIGATION), and shall consist of bonds fully registered as to principal and interest of the denominations of any multiple of $5,000 not exceeding for each maturity the maximum principal amount of the Bonds of that maturity and numbered consecutively in order of registration. The Bonds will be dated as of the Date of Delivery or such other date as shall be determined at the time of sale, and be payable on October 1, 2011 through October 1, 2025 as follows:
Year Amount Year Amount
2011 $5,000.00 2019 $10,000.00
2012 $5,000.00 2020 $10,000.00
2013 $5,000.00 2021 $10,000.00
2014 $10,000.00 2022 $10,000.00
2015 $10,000.00 2023 $15,000.00
2016 $10,000.00 2024 $15,000.00
2017 $10,000.00 2025 $15,000.00
2018 $10,000.00
The Bonds shall bear interest at a rate to be determined at the time of sale but not to exceed six percent 6% per annum, payable on October 1, 2011 and semiannually thereafter on April 1 and October 1, or such other dates as may be determined at the time of sale within the parameters of this resolution and law, by check or draft mailed by the transfer agent to the person or entity which is, as of the 15th day of the month preceding the interest payment date, the registered owner at the registered address as shown on the registration books maintained by the transfer agent. The date of determination of registered owner for purposes of payment of interest as provided in this paragraph may be changed by the Village to conform to market practice in the future. The Bonds shall be sold at not less than 97.5% of their par value. The Bonds will be subject to prior redemption, designated as term bonds, and payable all as determined at the time of sale.
4. Bonds; Redemption. Notice of redemption of bonds made subject to redemption prior to maturity shall be given to the registered owner of any bond or portion thereof called for redemption by mailing of such notice not less than thirty (30) days prior to the date fixed for redemption to the registered address of the registered owner of record. A bond or portion thereof so called for redemption shall not bear interest after the date fixed for redemption provided funds are on hand with the Transfer Agent to redeem the bond or portion thereof.
In case less than the full amount of an outstanding bond is called for redemption, the Transfer Agent, upon presentation of the bond called in part for redemption, shall register, authenticate and deliver to the registered owner of record a new bond in the principal amount of the portion of the original bond not called for redemption.
5. Bonds; Execution; Authentication; Replacement. The Bonds shall be executed in the name of the Village with the manual or facsimile signatures of the Village President and the Village Clerk and shall bear the actual or a facsimile of the Village seal. No Bond of this series shall be valid until authenticated by an authorized signature of the transfer agent. The Bonds shall be delivered to the transfer agent for authentication and be delivered by the transfer agent to the purchaser in accordance with instructions from an Authorized Officer (as hereinafter defined) upon payment of the purchase price for the Bonds. Executed blank bonds for registration and issuance to transferees shall simultaneously, and from time to time thereafter as necessary, be delivered to the transfer agent for safekeeping. The principal of the Bonds shall be payable at The Huntington National Bank, Grand Rapids, Michigan (the ‘Transfer Agent?). The Village may designate a new transfer agent by notice mailed to the registered owner of each of the Bonds at such time outstanding not less than sixty (60) days prior to any interest payment date.
6. Bonds; Book-Entry Form. The Bonds shall be issued in book-entry only form as one fully registered bond per maturity and shall be registered in the name of Cede & Co., as bondholder and nominee for The Depository Trust Company (‘DTC?), New York, New York. DTC will act as securities depository for the Bonds, and purchasers will not receive certificates representing their interest in bonds purchased. So long as the Bonds are in book-entry-only form, the Transfer Agent shall comply with the terms of a Letter of Representations to be entered into among the Village, the Transfer Agent and DTC, which provisions shall govern registration, notices and payment, among other things, and which provisions are incorporated herein with the same effect as if fully set forth herein. The Village President and the Village Treasurer, or either of them, is hereby authorized to enter into the Letter of Representations with DTC in such form as determined by the Village President, in consultation with bond counsel, to be necessary and appropriate. The Transfer Agent is hereby authorized and directed to also enter into the Letter of Representations with DTC as agent for the Village.
In the event the Village determines that the continuation of the system of book-entry-only transfers through DTC (or a successor securities depository) is not in the best interest of the DTC participants, beneficial owners of the Bonds, or the Village, the Village will notify the Transfer Agent, whereupon the Transfer Agent will notify DTC of the availability through DTC of Bond certificates. In such event, the Village shall issue and the Transfer Agent shall transfer and exchange Bonds as requested by DTC of like principal amount, series and maturity, in authorized denominations, to the identifiable beneficial owners in replacement of the beneficial interests of such beneficial owners in the Bonds, as provided herein.
So long as the book-entry-only system remains in effect, in the event of a partial redemption, the Transfer Agent will give notice to Cede & Co., as nominee of DTC, only, and only Cede & Co. will be deemed to be a holder of the Bonds. DTC is expected to reduce the credit balances of the applicable DTC participants in respect of the Bonds and in turn the DTC participants are expected to select those beneficial owners whose ownership interests are to be extinguished or reduced by such partial redemptions, each by such method as DTC or such DTC participants, as the case may be, deems fair and appropriate in its sole discretion.
7. Bonds; Transfer. In the event the Bonds are no longer in book-entry-only form, the following provisions would apply to the Bonds:
Any Bond may be transferred upon the books required to be kept pursuant to this section by the person in whose name it is registered, in person or by the registered owner’s duly authorized attorney, upon surrender of the Bond for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Transfer Agent. Whenever any Bond or Bonds shall be surrendered for transfer, the Village shall execute and the Transfer Agent shall authenticate and deliver a new Bond or Bonds, in like aggregate principal amount. The Transfer Agent shall require the payment by the bondholder requesting the transfer of any tax or other governmental charge required to be paid with respect to the transfer. The date of determination of the registered owner for purposes of payment of interest as provided in this resolution may be changed by the Village to conform to market practice in the future.
The Transfer Agent shall keep or cause to be kept, at its principal office, sufficient books for the registration and transfer of the Bonds, which books shall at all times during normal business hours be open to inspection by the City; and upon presentation for such purpose, the Transfer Agent shall, under such reasonable regulations as it may prescribe, transfer or cause to be transferred on said books, Bonds as herein provided.
8. Bonds; Security. To provide moneys to pay the principal of and interest on the Bonds and in accordance with the provisions of Act 175, there is hereby made an irrevocable appropriation of the amount necessary to pay the principal of and interest on the Bonds from the moneys to be derived from State-collected taxes returned to the Village for highway purposes, pursuant to law. The Village reserves the right to issue additional bonds of equal standing and priority of lien as to said State-collected taxes with the Bonds within the limitations prescribed by law.
9. Bonds; Additional Security. Pursuant to Act 175, and as additional security for the prompt payment of the principal of and interest on the Bonds, there is hereby irrevocably pledged the limited tax full faith and credit of the Village, and in the event of insufficiency of funds primarily pledged to the payment thereof, the Village covenants and agrees to provide for such insufficiency from such resources as are lawfully available to it, including the levy of ad valorem taxes, subject to applicable constitutional, statutory and charter tax rate limitations.
10. Bonds; Debt Retirement Account. The Treasurer of the Village is directed, each year that any of the principal of and interest on the Bonds remains unpaid, to set aside in a separate account, to be designated 2011 Michigan TRANSPORTATION FUND BONDS DEBT RETIREMENT ACCOUNT (the ‘Debt Retirement Account?), sufficient moneys from revenues received during such year from the Michigan Transportation Fund (‘MTF?) pursuant to law to pay the principal of and interest on the Bonds next maturing. The Treasurer of the Village is further authorized and directed, each year that any of the principal of and interest on the Bonds remains unpaid, to set aside in the Debt Retirement Account, moneys which may be transferred to the Village or available to the Village from other lawful sources to pay the debt service on the Bonds. The amount of the annual deposit into the Debt Retirement Account from the MTF may be reduced from year to year to the extent that other lawfully available moneys are on deposit in the Debt Retirement Account to pay the principal of and interest on the Bonds next maturing.
11. Bonds; Use of Proceeds; Construction Account. The proceeds of the Bonds shall be used to pay the costs of issuance of the Bonds and to pay the cost of the Improvements. Upon receipt of the proceeds of sale of the Bonds, the accrued interest, if any, shall be deposited in the Debt Retirement Account for the Bonds. From the proceeds of the Bonds there shall next be set aside a sum sufficient to pay the costs of issuance of the Bonds. The Village Treasurer is hereby directed to open a separate depository account to be designated 2011 Michigan TRANSPORTATION FUND BONDS CONSTRUCTION ACCOUNT (the ‘Construction Account?) into which account a sufficient amount of the proceeds of the Bonds to fund the cost of the Improvements shall be placed. The Construction Account shall be used to pay the Village’s share of the cost of constructing the Improvements, including associated costs of planning, design, property acquisition, engineering, inspection and like costs which are properly capitalizable to the Improvements.
12. Bond Form. The Bonds shall be in substantially the following form subject to such changes as may be determined necessary by Bond Counsel to the Village:
UNITED STATES OF AMERICA
STATE OF MICHIGAN
COUNTY OF OAKLAND
VILLAGE OF LEONARD
2011 Michigan
TRANSPORTATION FUND BOND
(LIMITED TAX GENERAL OBLIGATION)
Maturity Date of
Interest Rate Date Original Issue CUSIP
Registered Owner:
Principal Amount: Dollars
The Village of Leonard, County of Oakland, State of Michigan (the ‘Village?), for value received, hereby promises to pay to the Registered Owner specified above, or registered assigns, the Principal Amount specified above, in lawful money of the United States of America, on the Maturity Date specified above, unless prepaid prior thereto as hereinafter provided, with interest thereon (computed on the basis of a 360-day year consisting of twelve 30-day months) from the Date of Original Issue specified above or such later date to which interest has been paid, until paid, at the Interest Rate per annum specified above, first payable on April 1, 2011, and semiannually thereafter. Principal of this bond is payable at the corporate trust office of The Huntington National Bank, Grand Rapids, Michigan or such other transfer agent as the Village may hereafter designate by notice mailed to the registered owner hereof not less than sixty (60) days prior to any interest payment date (the ‘Transfer Agent?). Interest on this bond is payable to the registered owner of record as of the fifteenth (15th) day of the month preceding the payment date as shown on the registration books of the Village maintained by the Transfer Agent, by check or draft mailed to the registered owner at the registered address.
This bond is one of a series of bonds of even original issue date, aggregating the principal sum of $150,000, issued for the purpose of defraying the costs of major street improvements consisting of the reconstruction of Forest Street in the Village (the ‘Improvements?), including costs of issuance of the bonds, related financial and legal costs, associated costs of planning, design, property acquisition, engineering, inspection and like costs which are properly capitalizable to the Improvements in accordance with a resolution duly and adopted by the Village Council of the Village at a regularly scheduled Council meeting on January 10, 2011, and pursuant to the provisions of Act 175, Public Acts of Michigan, 1952, as amended and Act 34, Public Acts of Michigan, 2001, as amended.
Bonds of this issue maturing in the years _____ to _____, inclusive, shall not be subject to redemption prior to maturity. Bonds or portions of bonds in multiples of $5,000 maturing in the year _____ and thereafter shall be subject to redemption prior to maturity, at the option of the Village, in any order of maturity and by lot within any maturity, on any date on or after October 1, _____, at par and accrued interest to the date fixed for redemption.
[insert term bond provision, if applicable]
In case less than the full amount of an outstanding bond is called for redemption, the Transfer Agent, upon presentation of the bond called in part for redemption, shall register, authenticate and deliver to the registered owner of record a new bond in the principal amount of the portion of the original bond not called for redemption.
Notice of redemption shall be given to the registered owner of any bond or portion thereof called for redemption by mailing of such notice not less than thirty (30) days prior to the date fixed for redemption to the registered address of the registered owner of record. A bond or portion thereof so called for redemption shall not bear interest after the date fixed for redemption provided funds are on hand with the Transfer Agent to redeem the bond or portion thereof.
This bond and the interest thereon are payable from the proceeds of State-collected taxes returned to the Village for highway purposes pursuant to law, or in case of insufficiency of said funds, out of the general funds of the Village, including collections of ad valorem taxes on taxable property which the Village may be authorized to levy, subject to applicable constitutional, statutory and charter tax rate limitations, and the resolution authorizing the issue of bonds of which this is one contains an irrevocable appropriation of the amount necessary to pay the principal of and interest on the bonds of this issue from moneys derived from such State-collected taxes so returned to the Village for highway purposes which have not been theretofore specifically allocated and pledged for the payment of indebtedness. The Village has reserved the right to issue additional bonds of equal standing and priority of lien as to said State-collected taxes with the bonds of this issue within the limitations prescribed by law.
This bond is not a general obligation of the State of Michigan.
This bond is registered as to principal and interest and is transferable only upon the books of the Village kept for that purpose at the office of the Transfer Agent by the registered owner hereof in person, or by the registered owner’s attorney duly authorized in writing, upon the surrender of this bond together with a written instrument of transfer satisfactory to the Transfer Agent duly executed by the registered owner or the registered owner’s attorney duly authorized in writing. Upon surrender of a bond for transfer, a new registered bond or bonds in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in the resolution authorizing the bonds of this issue, and upon the payment of the charges, if any, therein prescribed.
This bond is not valid or obligatory for any purpose until the Transfer Agent’s Certificate of Authentication on this bond has been executed by the Transfer Agent.
It is hereby certified and recited that all acts, conditions and things required to be done, exist and happen, precedent to and in the issuance of said series of bonds, of which this is one, in order to make them valid and binding obligations of the Village, have been done, exist and have happened in regular and due form and time as required by law, and that the total indebtedness of the Village, including the issue of bonds of which this is one, does not exceed any constitutional, statutory or charter limitation.
IN WITNESS WHEREOF, the Village of Leonard, County of Oakland, State of Michigan, by its Village Council, has caused this bond to be signed in the name of said Village with the facsimile signatures of its President and its Village Clerk and a facsimile of the Village seal to be imprinted hereon, all as of the Date of Original Issue.
VILLAGE OF LEONARD
By: Michael McDonald, President
And:
By: Cindy Grosskopf, Village Clerk
[FORM OF TRANSFER
AGENT’S CERTIFICATE OF AUTHENTICATION]
Date of Registration:
Certificate of Authentication
This bond is one of the bonds described in the within-mentioned resolution.
The Huntington National Bank
Grand Rapids, Michigan
Transfer Agent
By: Authorized Representative
13. Publication. A copy of this resolution shall be published in full in a daily or weekly newspaper of general circulation in the Village once before this resolution becomes effective.
14. Negotiated Sale. The Village Council has considered the option of selling the Bonds through a competitive sale and a negotiated sale and, pursuant to the requirements of Act 34, determines that a negotiated sale of the Bonds will result in the most efficient and expeditious means of selling the Bonds and will result in the lowest interest cost to the Village.
15. Authorization of Officers; Delegation. Subject to approval by the Village Council, the Village President and the Village Treasurer (each an ‘Authorized Officer?), or either of them, are hereby authorized to negotiate a bond purchase agreement establishing the final terms of the Bonds, to adjust the final bond details set forth herein to the extent necessary or convenient to complete the transaction authorized herein, and, pursuant to Section 315(1)(d), to exercise the authority and make the determinations regarding interest rates, prices, discounts, maturities, principal amounts, denominations, dates of issuance, interest payment dates, redemption rights, the place of delivery and payment, designation of series, and other matters within the limitations established by this resolution.
16. Qualified Tax Exempt Obligations. The Village designates the Bonds as ‘qualified tax exempt obligations? for purposes of deduction of interest expense by financial institutions pursuant to Section 265 of the Internal Revenue Code of 1986, as amended (the ‘Code?). The Village hereby pledges not to issue more than $10,000,000 in qualified tax exempt obligations during calendar year 2011. Furthermore, the Village does not reasonably anticipate issuing more than $10,000,000 in tax exempt obligations in 2011, and hereby pledges to not issue more than $10,000,000 in tax exempt obligations during calendar year 2011, absent an emergency financial situation currently unforeseen.
17. Tax Covenant. The Village shall, to the extent permitted by law, take all actions within its control necessary to maintain the exemption of the interest on the Bonds from gross income for federal tax purposes under the Code, including, but not limited to, actions relating to any required rebate of arbitrage earnings and the expenditure and investment of Bond proceeds and moneys deemed to be Bond proceeds.
18. Sale of Bonds; Related Actions. The Authorized Officers are hereby authorized and directed (a) to make application to the Michigan Department of Treasury for and on behalf of the Village for Qualified Status with respect to issuing municipal securities, including the Bonds, or to apply for full approval of the Bonds if Qualified Status is not obtained, as well as for any waivers deemed necessary or appropriate in respect of the issuance and delivery of the Bonds, and in each case to pay the related fees pursuant to the requirements of Act 34; and (b) to take all other actions necessary or advisable, and make such other filings with other parties, to enable the sale and delivery of the Bonds as contemplated herein.
19. Municipal Advisor and Bond Counsel. Bendzinski & Co. of Detroit, Michigan is hereby retained to act as municipal advisor to the Village for the Bonds. Shifman & Carlson, P.C. of Farmington Hills, Michigan is hereby retained to act as bond counsel for the Village for the Bonds.
20. Repealer. All resolutions and parts of resolutions insofar as they expressly conflict with the provisions of this resolution be and the same hereby are rescinded to the extent of such conflict.
AYES: Mrs. Sutherby, Mrs. Blanka, Mr. Birr, Mr. Hoffman, President McDonald, Mr. Almeranti, Mr. Noaker
NAYS: None
RESOLUTION DECLARED ADOPTED.
Cindy Grosskopf, Village Clerk
I hereby certify that the foregoing is a true and complete copy of a resolution adopted by the Village Council of the Village of Leonard, County of Oakland, State of Michigan, at a Regular Meeting held on January 10, 2011, and that said meeting was conducted and public notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, and that the minutes of said meeting were kept and will be or have been made available as required by said Act.
Cindy Grosskopf, Village Clerk
