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Resolution of the County of Allegheny authorizing the issuance of tax and revenue anticipation notes in the aggregate principal amount of $45,000,000; providing for the date, interest rate, maturity date and place of payment in respect of the notes; accepting a proposal for the purchase of the notes; providing for the security of the notes; authorizing the proper officers to execute and deliver the notes; authorizing and directing the preparation, certification and filing of the proceedings with the Department of Community and Economic Development; appointing a paying agent and registrar; approving a form of note; and repealing inconsistent resolutions.
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Whereas, the County of Allegheny, Pennsylvania (the "Issuer"), has determined to incur temporary indebtedness in anticipation of the receipt of taxes and other current revenues in accordance with the provisions of the Pennsylvania Local Government Unit Debt Act, as amended (53 Pa. C.S. §8001, et seq.) (the "Act"), such indebtedness to be evidenced by its Tax and Revenue Anticipation Notes, Series of 2008 (the "Notes") in the principal amount of $45,000,000 (the "Approved Principal Amount"); and
Whereas, a proposal (the "Proposal") dated December ___, 2007, has been submitted by ______________________________ (the "Purchaser"), for the purchase of the Notes in the Approved Principal Amount at a purchase price equal to the principal amount thereof and such Notes to bear interest at a rate not to exceed 6.0% per annum (the "Approved Interest Rate"), computed on the basis of a 360-day year, and to mature on December 31, 2008; and
Whereas, the Approved Principal Amount is not greater than the amount by which working capital expenditures will exceed available amounts for those expenditures (determined without regard to the proceeds of the Notes) during the period in which the Notes are outstanding, all as determined under the Treasury Regulations promulgated under the United States Internal Revenue Code of 1986, as amended (the "Code"); and
Whereas, as required by Section 8126 of the Act, the authorized officers of the Issuer have made an estimate of the moneys to be received during the period when the Notes will be outstanding from taxes then levied and assessed and revenues to be received and, by their execution of a certificate with respect thereto, dated the date of adoption of this Resolution (the "Section 8126 Certificate"), have certified the said estimate.
The Council of the County of Allegheny hereby resolves as follows:
Section 1. Incorporation of Preamble.
The provisions set forth in the preamble to this Resolution are incorporated by reference in their entity herein.
Section 2. Authorization for Sale and Issuance of Notes
The incurrence of temporary indebtedness in the Approved Principal Amount, and the sale and issuance of the Notes evidencing such indebtedness, pursuant to the Act, is hereby approved, and is authorized and directed to be undertaken and done.
Section 3. Proposal.
The Proposal is hereby approved and accepted, and the actions of a majority of the governing board of the Issuer in approving the Proposal and, pursuant thereto, awarding the Notes to the Purchaser, at the purchase price named therein, subject in all respects to compliance by the Purchaser with all the terms and conditions set forth in the Proposal, are hereby ratified and confirmed. The Notes shall be issued in the Approved Principal Amount, shall be in book-entry only with the registered owner of all of the Notes being The Depository Trust Company ("DTC"), shall be registered in the name of Cede & Co., as nominee for DTC, shall be in denominations of $100,000 or integral multiples thereof, shall be dated as of such date, shall bear interest at the Approved Interest Rate and shall mature on December 31, 2008, all as set forth in the form of the Notes attached hereto as Exhibit "A", and otherwise shall be in accordance with the Proposal, the terms of which are incorporated herein. A copy of the Proposal shall be placed in the records of the Issuer. The obligations of the Issuer set forth in the Proposal shall survive settlement on the Notes and shall continue and be binding upon the Issuer until payment of the Notes in full.
Section 4. Paying Agent
The Bank of New York Trust Company, N.A. of Pittsburgh, Pennsylvania (the "Paying Agent"), is hereby appointed as registrar and Paying Agent for the Notes.
Section 5. Revenue Receipts
The Notes shall be payable from and are equally and ratably secured by the pledge of, security interest in, and lien and charge upon, the taxes and other revenues or both of the Issuer to be received during the period in which the Notes are outstanding, as set forth in the Section 8126 Certificate (the "Revenue Receipts"). The Issuer shall cause financing statements to be filed, registered and recorded in such manner and at such places as may be required by law fully to protect the security interests of the owners of the Notes and from time to time shall perform or shall cause to be performed any other act as provided by law, and shall execute and shall cause to be executed any and all further instruments as may be required by law, for such protection or preservation of the security interests of the owners of the Notes. This Resolution and the Act shall constitute a security agreement between the Issuer and the owners from time to time of the Notes. The Notes are not subject to redemption prior to maturity.
Section 6. “Sinking Fund”
There is hereby established a separate sinking fund for the Issuer to be known as "Sinking Fund - Tax and Revenue Anticipation Notes, Series of 2008" (the "Fund") and into said Fund there shall be paid by the Issuer the Revenue Receipts necessary to pay the debt service on the Notes. Such moneys shall be paid into the Fund in the amount necessary to pay the principal of and interest on the Notes and in such form as will provide available funds at or prior to 10:00 A.M., prevailing time, on the maturity date of the Notes. The Paying Agent, without further authorization, shall withdraw moneys from the Sinking Fund and apply the same exclusively to payment of the principal of and interest on the Notes as the same shall become due. Moneys, if any, which may be deposited from time to time in the Fund, and which are not immediately needed for payment of the principal of and interest on the Notes, shall be invested at the order of the Issuer as permitted by law. Such investments shall mature or shall be subject to redemption without penalty, and such deposits shall be subject to withdrawal, on or before the date upon which the moneys so invested or deposited are needed to pay the principal of and the interest on the Notes. As provided in the Act, if the Notes are not paid within the fiscal year in which the same are issued, the Notes shall be deemed to be nonelectoral debt enforceable in the manner of a general obligation, and the amount thereof shall be included in the budget of the Issuer for the ensuing fiscal year and shall be payable from the taxes and revenues of such ensuing year.
Section 7. Execution of Notes
The Notes shall be executed by the manual or facsimile signature of the Chief Executive of the Issuer and shall have the corporate seal of the Issuer or a facsimile thereof affixed thereto, duly attested by the manual or facsimile signature of the County Manager and shall be countersigned by the manual or facsimile signature of the County Controller. Any duly authorized official of the Issuer is authorized and directed to deliver or cause to be delivered the Notes to DTC against receipt of the full balance of the purchase price therefor.
Section 8. Form of Notes
The Notes shall be in substantially the form as set forth in Exhibit "A" attached hereto and made a part hereof, and may be executed and delivered in substantially such form with such appropriate changes as may be approved by the officer or officers of the Issuer executing the same; and such execution shall constitute approval of such changes by such officer or officers on behalf of the governing body of the Issuer.
Upon original issuance, the Notes will be issued in the form of a single Note and will be delivered to DTC. The Notes will be registered on the registration books kept by the registrar and Paying Agent, in the name of DTC or, at the option of DTC, in the name of Cede & Co., the DTC nominee, and no beneficial owners thereof will receive certificates representing their respective interest in the Notes. All payments of principal of, and interest on, the Notes shall be paid to the DTC, or its nominee in accordance with a blanket letter of representations (the "Representation Letter") of the Issuer to be executed and filed with DTC, and such payments shall satisfy the Issuer's obligations to the extent of such payments. The execution and delivery by the Issuer of the Representation Letter shall not in any way create, expand or limit any undertaking or arrangement contemplated or provided for herein, in respect of the DTC or the book-entry registration, payment and notification system or in any other way impose upon the Issuer any obligation whatsoever with respect to beneficial owners having interests in the Notes. The appropriate officers of the Issuer shall take all action necessary for all representations of the Issuer in the Representation Letter to be complied with at all times.
In the event that book-entry-only certificates through DTC or another securities depository are discontinued, Note certificates in fully registered form will be delivered to, and registered in the names of, the beneficial owners, in authorized denominations. The ownership of the Notes so delivered (and any Notes thereafter delivered upon a transfer or exchange thereof) shall be registered on the registration books to be kept by the registrar and Paying Agent at its designated corporate trust office. The Issuer and the Paying Agent shall be entitled to treat the registered owners of such Notes, as their names appear in such registration books as of the appropriate dates, as the owners thereof for all purposes described herein.
Section 9. Use of the Proceeds
The Issuer hereby covenants with the holders of the Notes that it will make no investment or other use of any part of the proceeds of the Notes or money treated as such proceeds under applicable Federal law or regulations, and will not take any other action or omit to take any action, which would cause the Notes to be "arbitrage bonds" under the Code or any other rule or regulation promulgated thereunder or which for any other reason would cause the Notes to become obligations the interest on which is not excludable from gross income for Federal income tax purposes.
Section 10. Representations
The Issuer represents that:
(i) the actual cumulative cash flow deficit equal to the excess of the Issuer's "expenditures" over the Issuer's "available amounts" will exceed 90% of the proceeds of the Notes during the six-month "deficit period"; or
(ii) the actual cumulative cash flow deficit equal to the excess of the Issuer's "expenditures" over the Issuer's "available amounts," determined by excluding from "available amounts" the lesser of (A) the "preceding year's average monthly balance" or (B) a "reasonable working capital reserve," will equal or exceed the proceeds of the Notes during the "deficit period."
For purposes of this Section 10, the following definitions will apply: (i) "expenditures" means any current operating expenses or any capital expenditures payable only from available amounts or from the proceeds of the Notes, (ii) "available amounts" means any amounts, other than proceeds of the Notes, that are available to the Issuer for expenditures, including amounts held in accounts by the Issuer that can be expended without legislative or judicial action and which are not subject to any legislative, judicial or contractual requirement that they be replaced, (iii) "preceding year's average monthly balance" means the average of the Issuer's ending monthly balances (net of unexpended gross proceeds of any bond issue) during the one-year period preceding the issue date of the Notes, (iv) "reasonable working capital reserve" means an amount equal to 5.00% of the Issuer's actual expenditures from current revenues during the preceding fiscal year, and (v) "deficit period" means the period beginning on the date of issue of the Notes and ending on the earlier of the date of computation of the highest cumulative excess or the date six months after the date of issuance of the Notes.
Section 11. Authorization of Officers
The proper officers of the Issuer are hereby authorized and directed to take such additional action in accordance with the Act and the terms of the Proposal, as may be incidental to the issuance of, and necessary for the validity of, the Notes, including the filing of a certified copy of this Resolution, the Section 8126 Certificate and a copy of the Proposal with the Pennsylvania Department of Community and Economic Development, all as required by the Act, and the execution and filing of IRS Form 8038-G, as required by the Code.
Section 12. Full Force and Effect
This Resolution shall be of full force and effect only upon the filing with the Pennsylvania Department of Community and Economic Development of the documents set forth in Section 11 hereof; provided, however, with respect to the Purchaser of the Notes, that this Resolution shall be effective and enforceable as of the date of acceptance of the Proposal by the Issuer.
Section 13. Preliminary Official Statement
The Preliminary Official Statement prepared with respect to the Notes is hereby approved. The proper officers of the Issuer are hereby authorized to execute and approve a Final Official Statement relating to the Notes in the form approved by the County Solicitor. The distribution of the Preliminary Official Statement is hereby ratified and the Purchaser is authorized to use the Final Official Statement in connection with any reoffering of the Notes. The Issuer shall take and all such action as the Purchaser reasonably requests in order for the Purchaser to comply with the provisions of SEC Rule 15c2-12.
Section 14. Note Counsel
The Issuer hereby reaffirms the appointment of Grogan Graffam, P.C., Pittsburgh, Pennsylvania as Note Counsel with respect to the Notes.
Section 15. Severability.
If any provision of this Resolution shall be determined to be unlawful, invalid, void or unenforceable, then that provision shall be considered severable from the remaining provisions of this Resolution which shall be in full force and effect.
Section 16. Repealer.
Any resolution or ordinance or part thereof conflicting with the provisions of this Resolution is hereby repealed so far as the same affects this Resolution.
SUMMARY OF LEGISLATION
This Resolution will allow the County to issue tax and revenue anticipation notes in the aggregate principal amount of $45,000,000 to obtain cash in advance of real estate tax collections to cover expenditures during January and February. The notes will be paid by the end of 2008.