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HomeMy WebLinkAboutD-2384-17 Carmel Redvelopment Authoirty Lease Rental Bonds for $29,500,000Sponsors: Councilors Finkam Carter, Rider ORDINANCE D-2384-17 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA, APPROVING ONE OR MORE SERIES OF CARMEL REDEVELOPMENT AUTHORITY LEASE RENTAL REFUNDING BONDS, APPROVING AN AMENDMENT TO LEASE, PLEDGING LOCAL INCOME TAX REVENUES OF THE CITY TO PAY CERTAIN OBLIGATIONS AND TAKING OTHER ACTIONS RELATED THERETO Synopsis: This ordinance approves the issuance of Carmel Redevelopment Authority lease rental refunding bonds in the maximum principal amount of $29,500, 000 for the purpose of refinancing the Authority's Lease Rental Revenue Bonds of 2010 in order to achieve debt service savings, and approves documents and matters related thereto. WHEREAS, the City of Carmel Redevelopment Authority (the "Authority") has been created pursuant to Indiana Code 36-7-14.5 as a separate body corporate and politic, and as an instrumentality of the City of Carmel, Indiana (the "City") to finance local public improvements for lease to the City of Carmel Redevelopment Commission (the "Commission"); and WHEREAS, the Authority, as lessor, and the Commission, as lessee, entered into a Lease Agreement, dated as of December 9, 2009, as amended by an Addendum to Lease, dated as of January 13, 2010 (collectively, the "Original Lease"); and WHEREAS, the Authority previously issued its County Option Income Tax Lease Rental Revenue Bonds of 2010, dated January 28, 2010 (the "2010 Bonds"), in the original aggregate principal amount of Twenty -Five Million Six Hundred Seventy -Five Thousand Dollars ($25,675,000), pursuant to a Trust Indenture, dated as of January 1, 2010 (the "Original Indenture"), between the Lessor and U.S. Bank National Association (successor to UMB Bank, N.A. by assignment), as trustee (the "Trustee"), for the purpose of procuring funds to finance the costs of certain road improvements and other infrastructure projects in the City, pay capitalized interest on the 2010 Bonds, fund a debt service reserve fund, and pay costs incurred on the account of the issuance and sale of the 2010 Bonds; and WHEREAS, the 2010 Bonds are currently outstanding in the aggregate principal amount of approximately Twenty -Four Million Two Hundred Twenty -Five Thousand Dollars ($24,225,000); and WHEREAS, Indiana Code 36-7-14.5 authorizes the refunding of bonds issued by the Authority; and WHEREAS, due to favorable market conditions, the Authority desires to refund all or a portion of the outstanding 2010 Bonds (collectively, the "Refunded Bonds") in order to effect a savings in the interest costs on the Refunded Bonds; and WHEREAS, the Authority has adopted, or is expected to adopt, a resolution authorizing the issuance of one or more series of refunding bonds designated as the "City of Carmel Redevelopment Authority Local Income Tax Lease Rental Revenue Refunding Bonds, Series 2017 (with such additional or different series designation as may be determined to be necessary or appropriate)," in the aggregate principal amount not to exceed Twenty -Nine Million Five Hundred Thousand Dollars ($29,500,000) (the "2017 Bonds"), pursuant to the Original Indenture, as supplemented and amended by the First Supplemental Trust Indenture between the Authority and the Trustee (the "Supplemental Indenture"), for the purpose of providing funds to (a) effect a refunding of all or a portion of the Refunded Bonds, (b) if necessary, fund one or more debt service reserve funds or pay the premiums for one or more debt service reserve fund surety policies, and (c) pay the costs incurred on the account of the issuance and sale of the 2017 Bonds, including any premiums for a municipal bond insurance policy or other form of credit enhancement for the 2017 Bonds; and WHEREAS, pursuant to the Original Lease, as consideration for the Leased Premises, the Commission has agreed to pay the Authority fixed annual rental payments, for each six-month period ending on each June 15 or December 15 (each a "Semi -Annual Period"), an amount equal to the multiple of $1,000 next higher than the sum of principal and interest due on the 2010 Bonds in such Semi -Annual Period, plus an additional $5,000 each Semi -Annual Period to cover the certain administrative costs and expenses related to the 2010 Bonds, all payable in advance in semi-annual installments on June 15 and December 15 of each year; and WHEREAS, the Authority and the Commission have adopted, or are expected to adopt, resolutions approving an amendment to the Original Lease, in substantially the form presented at this meeting (the "Lease Amendment"), for the purpose of reducing the semi-annual lease rental payments due under the Original Lease to correspond with the reduced debt service owed with respect to the 2017 Bonds, plus certain annual administrative costs and expenses related to the 2017 Bonds, thereby realizing a portion of the savings achieved by refunding the Refunded Bonds; and WHEREAS, the annual rentals payable by the Commission under the Original Lease, as amended by the Lease Amendment (collectively, the "Lease") will be pledged by the Authority to pay debt service on the 2017 Bonds and any unrefanded 2010 Bonds; and WHEREAS, the Hamilton County Income Tax Council has imposed a county option income tax pursuant to IC 6-3.5-6 (repealed) on the adjusted gross income of Hamilton County, Indiana (the "County") taxpayers, which now has been codified at IC 6-3.6 and reclassified as the certified shares component of additional revenue derived from the expenditure rate tax under IC 6-3.6 (referred to herein as the "LIT"); and WHEREAS, IC 6-3.6-9, as amended, provides that revenue derived from the imposition of the LIT shall be distributed to the County monthly on the first day of each month (the City's share of each such monthly distribution, a "Monthly Distribution"); and WHEREAS, pursuant to IC 36-7-14-25.5, the City is authorized to pledge its Monthly Distributions of LIT revenues to pay bonds issued under IC 36-7-14-25.1 or to pay lease rental payments on leases entered into under IC 36-7-14-25.2; and 0) WHEREAS, on July 7, 1997, the Common Council of the City (the "Common Council") adopted its Ordinance No. D-1302-97 (the "LIT Ordinance"), pursuant to which the Common Council, on behalf of the City, pledged and assigned the City's Monthly Distributions of LIT revenues for the payment of any bond, note, warrant or other evidence of indebtedness, any lease or any other obligation (any bond, note, warrant or other evidence of indebtedness, any lease or any other obligation, individually, an "Obligation" and, collectively, the "Obligations") identified by ordinance of the Common Council as an obligation secured by the LIT Ordinance (any Obligation so identified as an obligation secured by the LIT Ordinance, individually, a "Secured Obligation" and, collectively, the "Secured Obligations"), if certain conditions are satisfied, and such conditions have been satisfied; and WHEREAS, the Common Council now desires to approve the Lease Amendment pursuant to Indiana Code 36-7-14-25.2, which provides that any lease approved by a resolution of the Commission must be approved by an ordinance or resolution of the fiscal body of the unit; NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA, as follows: Section 1. Approval of Lease Amendment, 2017 Bonds and Supplemental Indenture. The Common Council hereby approves the issuance of the 2017 Bonds by the Authority, pursuant to Indiana Code 36-7-14.5-19, and the execution and delivery of the Lease Amendment, as approved by the Commission, pursuant to Indiana Code 36-7-14-25.2, the execution and delivery of the Supplemental Indenture securing the 2017 Bonds, and the pledge of the lease rentals thereunder to the payment of the 2017 Bonds, pursuant to IC 36-7-14.5-21, all subject to the following conditions: (a) the maximum aggregate original principal amount of the 2017 Bonds shall not exceed $29,500,000; (b) any series of the 2017 Bonds shall have a final maturity date no later than January 1, 2031; (c) the maximum annual lease rental payment during the term of the Original Lease, as amended by the Lease Amendment, shall not exceed $3,118,000; (d) the maximum interest rate on the 2017 Bonds shall not exceed five percent (5.00%) per annum; (e) the 2017 Bonds may be subject to redemption prior to maturity on any date not earlier than five (5) years following the date of issuance of the 2017 Bonds, with such specific dates and redemption terms determined at the time of the sale of the 2017 Bonds and approved by the Authority in the purchase agreement for the 2017 Bonds, all upon the advice of the municipal advisor to the Authority; (f) the maximum term of the Original Lease, as amended by the Lease Amendment, shall be no later than the term specified in the Original Lease; and (g) no capitalized interest shall be funded with the proceeds of the 2017 Bonds. Section 2. Pledge of LIT Revenues. Pursuant to IC 36-7-14-25.5 and IC 6-3.6-6-18, the Common Council, on behalf of the City, hereby pledges and assigns the City's Monthly Distributions of LIT revenues for the payment of the Secured Obligations, including the Lease. The Common Council hereby identifies the Lease as an obligation secured by the LIT Ordinance. 3 Section 3. Creation of Contract; Amendment of Ordinance. (a) The provisions of this Ordinance shall constitute a contract by and between the City and the obligees of the Secured Obligations, including the Lease. After the issuance of any Secured Obligations, the Common Council shall not, except as specifically provided in Section 3(b) or 3(c) hereof, repeal, modify or amend this Ordinance. (b) The Common Council may, from time to time and at any time, without the consent of or notice to any obligees under any Secured Obligations, adopt a supplemental ordinance to modify or amend this Ordinance for any one or more of the following purposes: (i) To cure any ambiguity or formal defect or omission in this Ordinance or in any supplemental ordinance; (ii) To grant to or confer upon any obligees under any Secured Obligations any additional benefits, rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon such obligees under such Secured Obligations; (iii) To modify or amend this Ordinance to permit the qualification of any Secured Obligations for sale under the securities laws of the United States of America or any of the states of the United States of America; (iv) To provide for the current refunding or advance refunding of any Secured Obligations; (v) To procure a rating on any Secured Obligations from a nationally recognized securities rating agency, designated in such supplemental ordinance, if such supplemental ordinance will not materially adversely affect the interests of any obligees under any Secured Obligations; (vi) To make changes to reflect the identification of any Obligation as an obligation secured by the LIT Ordinance in accordance with* Section 3 thereof; or (vii) Any other purpose which, in the judgment of the Common Council, does not materially adversely affect the interests of any obligees under any Secured Obligations. (c) This Ordinance, and the rights and obligations of the City and any obligees under any Secured Obligations, may be modified or amended from time to time at any time by a supplemental ordinance adopted by the Common Council with the consent of the obligees under the Secured Obligations affected by such modification or amendment, holding at least a majority in aggregate principal amount of such Secured Obligations then outstanding (exclusive of Secured Obligations, if any, owned by the City); provided, however, that no such modification or amendment shall, without the express consent of all of the obligees under the Secured Obligations affected by such modification or amendment, permit a privilege or priority of any of 4 such Secured Obligations over any other of such Secured Obligations, or create a lien securing any of such Secured Obligations other than a lien ratably securing all of such Secured Obligations, nor shall any such modification or amendment reduce the percentage of consent required for amendment or modification of this Ordinance. Any act done pursuant to a modification or amendment so consented to shall be binding upon all the obligees under the Secured Obligations and shall not be deemed an infringement of any of the provisions of this Ordinance, and may be done and performed as fully and freely as if expressly permitted by the terms of this Ordinance, and, after such consent relating to such specified matters has been given, no obligees under the Secured Obligations shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the City or any officer thereof from taking any action pursuant thereto. If the City shall desire to obtain any such consent to any modification or amendment of this Ordinance, it shall mail or cause to be mailed a notice, postage prepaid, to the respective obligees under the Secured Obligations affected by such modification or amendment. Such notice shall briefly set forth the nature of the proposed supplemental ordinance and shall state that a copy thereof is on file for inspection by all obligees under such Secured Obligations. The City shall not, however, be subject to any liability to any obligees under any Secured Obligations by reason of its failure to mail the notice described in this Section 3, and any such failure shall not affect the validity of such supplemental ordinance when consented to and approved as provided in this Section 3. Whenever, at any time within one year after the date of the mailing of such notice, the City shall receive an instrument or instruments purporting to be executed by the obligees under such Secured Obligations of not less than a majority in aggregate principal amount of such Secured Obligations then outstanding (exclusive of Secured Obligations, if any, owned by the City), which instrument or instruments shall refer to the proposed supplemental ordinance described in such notice, and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice as on file, thereupon, but not otherwise, the Common Council may adopt such supplemental ordinance in substantially such form, without liability or responsibility to any obligees under the Secured Obligations, whether or not such obligee shall have consented thereto. (d) Upon the adoption of any supplemental ordinance pursuant to the provisions of this Section 3, this Ordinance shall be, and is deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Ordinance shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. Section 4. Authorization of Other Actions. Each of the Mayor, any member of the Common Council and the Clerk -Treasurer, and any other officer, employee or agent of the City is hereby authorized and directed, for and on behalf of the City, to execute and deliver any contract, deed, agreement, certificate, instrument or other document and to take any action as such person determines to be necessary or appropriate to accomplish the purposes of this Ordinance, such determination to be conclusively evidenced by such person's execution of such 5 contract, deed, agreement, certificate, instrument or other document or such person's taking of such action. Section 5. Severability. If any part of this Ordinance shall be adjudged to be invalid by a court of proper jurisdiction, it shall be conclusively presumed that the Common Council would have passed the remainder of this Ordinance without such invalid part. Section 6. Repeal of Conflicting Ordinances. All ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this Ordinance, are, to the extent of such conflict, hereby repealed. Section 7. Effectiveness. This Ordinance shall be in full force and effect from and after its adoption by the Common Council and upon compliance with the procedures required by law. The LIT Ordinance shall remain in full force and effect and shall apply to the Lease. PASSED by the Common Coun ' of the City of Carmel, this day of . P41 2017, by a vote of _� ayes and nays. COMMON COUNCIL OF THE CITY OF CARMEVINDIANA S mk , President Kevin D. Rider, Vice President V Bruce Kimball Laura Campbell Jef W e R ald E. Carter Pauley, Clerk-Treasurbf of the City . Indiana Presented by me to the Mayor of the City of Carmel, di althis eh y o�, 2017, at & 6- M. Stine Pau o, Clerk -Treasure T Approved by me, Mayor of the City of Carmel, Indiana, this day of 2017, at M. ames Brainard, Mayor ATTE i Christine Pauley, Clerk -Treasurer v Prepared by: Bruce D. Donaldson Barnes & Thornburg LLP 11 South Meridian Street Indianapolis, IN 46204 DMS 10811971v2 7