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HomeMy WebLinkAboutCC-09-25-85 Advance Refund ProgRESOLUTION NO. WHEREAS, the City of Carmel has outstanding various sewer revenue bonds; and WHEREAS, as a result of the development of innovative financing techniques since the date of the original financings, it is possible to refund these outstanding bonds~ thereby restructuring the City's debt service costs and effecting other significant benefits; and wHEREAS, the current Department of Treasury and Internal Revenue Service Rules and Regulations make it possible to refund, in advance of their state of maturity, all of said sewer revenue bonds; and WHEPd~AS, a proposal has been submitted by Stern Brothers and Company and Merrill Lynch Capital Markets for said advance refunding program, which proposal is now submitted to the Common Council of the City of Carmel; THEREFORE, BE IT RESOLVED~ that the proposal of Stern Brothers and Company and Merrill Lynch Capital Markets, submitted to the Common Council of the City of Carmel, Indiana, pursued by the Mayor to determine the feasibility of Refunding Program. BE IT FURTHER RESOLVED, that to sign the acceptance should be the Advance the Mayor is hereby authorized of this proposal on behalf of the City of Carmel. Approved Indiana, on by the Common Council of the City of Carmel, the 25th day of September, 1985. COMMON COUNCIL FOR THE CITY OF CARMEL, INDIANA ATTEST: Clerk-Treasurer AP P ROVE D: Mayor-' S ei' r' Broe & Co. INVESTMENT BANKERS II00 Main Street. City Center Square. Suite 2200, P.O. Box 13486. Kansas City. Missouri 64199, Phone 816-471-6460 Honorable Mayor and City Council Carmel, Indiana Re: Sewer Revenue Bonds - Advance Refunding Program Members of the Council: The City of Carmel has outstanding various sewer Revenue Bonds. As a result of the development of an innovative financing technique since the date of the original financings, it is possible to refund these outstanding Bonds, thereby restructuring the City's debt service costs and effecting other significant benefits. Current Department of Treasury and Internal Revenue Service rules and regulations make it possible to refund in advance of their stated maturity all of the above Bonds. Such a refunding may be accomplished by the issuance of Refunding Bonds, the proceeds of such bonds being used to purchase United States Government obligations which are deposited in an irrevocable trust escrow account i~n such amounts, maturities and interest rates so as to provide a sum sufficient!to pay the principal of and interest on the presently outstanding bonds as and when they mature. The new issue of Refunding Bonds then becomes an obligation of the City. Stern Brothers & Co. and Merrill Lynch White Weld Capital Markets hereby submit this proposal to assist you in evaluating the financial and other considerations of refunding. Under this proposal we agree to do the following: 1. Proceed immediately, utilizing computer technology, with an investigation and study for the purpose of determining the feasibility of refunding a portion or all of the above-referenced bonds. Considerations of feasibility shall include, without limiting, (a) public purpose benefits, (b) marketability, (c) legality, (d) future financing requirements. Any plan proposed shall contain a description and examples of any debt reduction, restructured debt amortization, savings or other benefits to be derived by such plan. 2. Consult with the City and/or their appointed representatives for the purpose of evaluating the benefits of any refunding plan consistent with long range financial planning goals. 3. At such time as you shall decide to proceed with the necessary legal proceedings, and bond attorneys are retained to perform the legal aspects of the program, we will assemble and transmit to the bond attorneys such data as may be required for their preparation of the necessary orders, resolution, notices and certificates; and upon preparation thereof, will submit such documents to the Board for appropriate action. 4. Advise you of bond market conditions, proposed bond issuances by other issuers, and other information and economic data available to us which might normally be expected to influence interest rates so that a sale date for the bonds may be selected providing the most favorable market conditions under the existing circumstances. 5. Assist you and bond counsel in preparing the contents of an Official Statement, containing financial data and other information of the nature and to the extent ordinarily required to comply with disclosure requirements established by the Municipal Securities Rulemaking Board. 6. Consult and advise on municipal bond ratings and municipal bond insurance. If determined to be necessary, assist you in making a complete well-structured presentation of the financial plan and security of the bonds to bond rating and credit agencies to obtain the highest feasible rating. 7. Act as Managers of a group of investment bankers formed to underwrite and market the City's bonds at such rates as approved by the City. 8 Execute a Bond Purchase Agreement whereby we, as Investment Bankers, agree to purchase from the City its bonds on such terms and conditions as mutually agreed to between the City and the Investment Bankers. g. Assist the City in acquiring and investing U. S. Goverment securities needed to fund the escrow. It is understood and agreed that you and the City officials will cooperate with us and bond counsel in the passage of all necessary ordinances, resolutions, and certificates required in the issuance and delivery of the bonds. This agreement shall terminate at the time of delivery of the bonds covered hereby, or the elapse of eighteen months from date of your acceptance hereof, whichever shall first occur; however, if the bonds are in the progress of issuance for delivery beyond eighteen months, this agreement shall be extended to the date of delivery. If at any time it is determined that the financing is no longer feasible, this contract shall be dissolved and the City shall be under no obligation to reimburse the Investment Bankers for any expenses incurred prior to such determination. Two copies of this proposal are submitted to you for execution. When accepted by you, it will constitute the entire agreement between your City and the undersigned for the purpose and consideration herein specified. Respectfully submitted, STERN BROTHERS & CO. Senior Vice President MERRILL LYNCH CAPITAL MARKETS Steve Kahl Institutional Financial Consultant ACCEPTED pursuant to _~ Indiana, on the d~.. day of ~ ATTEST: adopted by the City Council of Carmel, , 1985.