Resolution - 2008 - 37 - Authorize The Issuance And Sale Of A Revenue Anticipation Note, Series 2008, In The Principal Amount Of $500,000 - 12/09/2008
RESOLUTION NO. 08-37
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EAGLE, IDAHO,
AUTHORIZING THE ISSUANCE AND SALE OF A REVENUE ANTICIPATION
NOTE, SERIES 2008, IN THE PRINCIPAL AMOUNT OF $500,000 FOR THE
PURPOSE OF PROVIDING FUNDS IN ANTICIPATION OF THE COLLECTION OF
TAXES AND THE RECEIPT OF OTHER REVENUES FOR THE 2008-2009 FISCAL
YEAR; PROVIDING FOR THE FORM, ISSUANCE, AND REDEMPTION OF THE
NOTE; CREATING A REVENUE ANTICIPATION NOTE REDEMPTION FUND AND
PROVIDING FOR THE DEPOSIT OF TAXES AND REVENUES INTO THE
REDEMPTION FUND FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST
ON THE NOTE; PROVIDING FOR RELATED TERMS AND COVENANTS; AND
PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of Eagle, Ada County, Idaho (the "City"),
is a municipal corporation duly created and operating under the
laws of the St~te of Idaho; and
WHEREAS, the City, by and through its City Council (the
"Council"), has duly adopted a budget and an annual
appropriations ordinance, in the manner provided by law, for the
2008-2009 Fiscal Year; and
WHEREAS, the Council has determined that there will exist,
during the 2008-2009 Fiscal Year, a deficit in the City's tax
and revenue collections, and the Council desires to issue a
revenue anticipation note of the City in order to provide funds
to meet such deficit pending the collection of ad valorem taxes
and the receipt of other revenues for the 2008-2009 Fiscal Year;
and
WHEREAS, the City is authorized, pursuant to Title 63,
Chapter 31, Idaho Code, to issue its revenue anticipation note
for the foregoing purposes and to sell such revenue anticipation
note at private sale; and
WHEREAS, the City has received an offer from Zions First
National Bank to purchase the revenue anticipation note of the
City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF EAGLE, IDAHO, as follows:
Section 1: For the purpose of providing funds to pay
current expenses in anticipation of the collection of ad valorem
taxes and the receipt of other revenues (collectively, the
"Revenues") for the 2008-2009 fiscal Year (the "Fiscal Year"),
the Council hereby authorizes the issuance and sale of a revenue
anticipation note, designated "City of Eagle Revenue
Anticipation Note, Series 2008" (the "Note"), in the aggregate
principal amount of $500,000, to be issued, sold, and delivered
in the manner provided by Title 63, Chapter 31, Idaho Code.
Page 1
Section 2: The Note is being issued for the purpose of
providing funds to the General Fund for the payment of current
expenses of the City in anticipation of the collection and
receipt of the Revenues for the Fiscal Year received after the
date of issue of the Note.
Section 3: The Note shall be substantially in the form
which is annexed hereto as Exhibit "A," shall be dated as of its
date of delivery, shall mature on September 30, 2009, shall bear
interest at the rate of 3.20% from its date until paid,
calculated on the basis of a 30/360 interest accrual method,
which interest shall be payable on the date of maturity of the
Note, and shall not be subject to call or redemption prior to
its stated maturity date.
Section 4: The Note shall be manually executed on
behalf of the City by the Mayor and attested by the City Clerk,
and the official seal of the City shall be affixed to the Note.
Section 5: The principal and interest on the Note shall
be payable in lawful money of the United States of America, at
Zions First National Bank, One South Main Street, Salt Lake
City, Utah, 84111. The Note shall be a negotiable instrument
within the meaning of the Uniform Commercial Code. Zions First
National Bank is hereby designated as the Paying Agent for the
Note.
Section 6: There is hereby created and shall be maintained
in the office of the City Clerk/Treasurer a fund and account,
separate and distinct from all other funds of the City,
designated as the "Revenue Anticipation Note, Series 2008,
Redemption Fund" (the "Redemption Fund"). The proceeds of all
Revenues collected and received by the City after the date of
issue of the Note, for the Fiscal Year, shall be placed,
immediately upon receipt, in the Redemption Fund until such time
as the moneys and investment earnings accumulated therein, or
reasonably anticipated to be earned thereon by the date of
maturi ty of the Note, shall be fully sufficient to pay the
principal of and the interest on the Note at maturity. All
moneys in the Redemption Fund shall be invested, in lawful
investments of the City, so as to mature on or before September
30, 2009. The moneys so accumulated in the Redemption Fund are
hereby irrevocably pledged, appropriated, and set apart for the
aforesaid purposes only. Nothing herein shall be construed to
limit the payment of the principal of and interest on the Note
solely to Revenues deposited in the Redemption Fund, but the
Note shall be a direct and general obligation of the City, for
the payment of which the full faith, credit, and resources of
the City are hereby pledged.
Section 7: The City further covenants with the purchaser
and any subsequent holders of the Note as follows:
Page 2
A. The principal amount of the Note issued pursuant to
this Resolution does not exceed seventy-five percent (75%) of
the Revenues duly budgeted by the Council for the Fiscal Year
and not yet collected or received by the City.
B. The proceeds of the Note will be used exclusively for
the same purposes for which the Revenues were budgeted and
appropriated.
C. None of the proceeds of the Note will be used,
directly or indirectly, (i) to make or finance loans to persons,
or (ii) in any trade or business carried on by any person (other
than use as a member of the general public), and the Note will
not be a "private activity bond" within the meaning of Section
141 of the Internal Revenue Code of 1986 (the "Code").
o. The City hereby designates the Note as a "qualified
tax-exempt obligation" within the meaning and for the purposes
of Section 265(b) (3) of the Code, and the City does not
reasonably anticipate that it will designate more than
$10,000,000, including the Note, as qualified tax-exempt
obligations during the 2008 calendar year.
E. The City will comply with the provisions of the Code
which are necessary for interest paid on the Note to be excluded
from gross income for purposes of federal income taxation
(except for certain minimum taxes on corporations), will make no
use of the proceeds of the Note that would result in the
interest on the Note being includable in gross income within the
meaning of Section 103 (a) of the Code, and in particular will
take no action which would cause the Note to become an arbitrage
bond within the meaning of Section 148 of the Code. A
certificate that the Note is not an arbitrage bond wi thin the
meaning of Section 148 of the Code will be provided to the
purchaser at the time of delivery of the Note.
F. The City has general taxing powers. The Note is not a
"private activity bond" within the meaning of Section 141 of the
Code. 95% or more of the net proceeds of the Note is to be used
for the local governmental activities of the City. The City has
no subordinate entities. The City has not issued, and does not
reasonably anticipate that it will issue, tax-exempt obligations
in the calendar year 2008 in a face amount which exceeds
$5,000,000. Accordingly, under Section 148 (f) (4) (0) of the
Code, the City is not required to pay rebates to the United
States under Section 148(f) of the Code.
G. None of the proceeds of the Note will be used to
reimburse the City for any capital expenditure made prior to the
date of delivery of the Note, unless the City shall have adopted
an official intent resolution as provided by Section 1.150-2 of
the Treasury Regulations.
Section 8:
The sale and deli very of the Note to Zions
Page 3
First National Bank, in accordance with the Note Purchase
Agreement substantially in the form annexed hereto as Exhibit
"B," is hereby authorized and approved.
Section 9: The Mayor and City Clerk, or anyone or more
of such officials as may be appropriate to the document being
executed, are hereby authorized to execute, on behalf of the
City, all such additional documents, certificates, and
instruments as may be necessary or appropriate to carry out the
intent of this Resolution.
Section 10: This Resolution shall take effect and be in
force immediately upon its passage and approval.
DATED the 9th day of December, 2008.
CITY OF EAGLE
Ada County, Idaho
ATTEST:
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UNITED STATES OF AMERICA
STATE OF IDAHO
COUNTY OF ADA
CITY OF EAGLE
REVENUE ANTICIPATION NOTE, SERIES 2008
THIS NOTE HAS BEEN DESIGNATED BY THE ISSUER FOR PURPOSES OF THE
EXCEPTION CONTAINED IN SECTION 265 (b) (3) OF THE INTERNAL
REVENUE CODE OF 1986 RELATING TO THE DEDUCTIBILITY OF A
FINANCIAL INSTITUTION'S INTEREST EXPENSE ALLOCABLE TO TAX-EXEMPT
INTEREST.
INTEREST
RATE:
MATURITY
DATE:
ORIGINAL
ISSUE
DATE:
3.20%
September 30, 2009
December 10, 2008
THE CITY OF EAGLE, Ada County, Idaho, a municipal
corporation and political subdivision of the State of Idaho (the
"City"), for value received, acknowledges itself to owe and
promises to pay to ZIONS FIRST NATIONAL BANK, or assigns, on
September 30, 2009, the principal sum of FIVE HUNDRED THOUSAND
DOLLARS ($500,000), together with interest thereon at the rate
of 3.20% per annum from the date hereof to the maturity date,
interest being calculated on the basis of a 30/360 interest
accrual method. This Note is not subject to call or redemption
prior to maturity.
Both principal of and interest on this Note are payable to
the registered owner hereof, or registered assigns, in lawful
money of the United States of America, at Zions First National
Bank.
This Note (the "Note") is issued by the City to fund its
current operations for its General Fund in anticipation of the
collection of ad valorem taxes and the receipt of other revenues
for the 2008-2009 Fiscal Year, as more fully set forth in
Resolution No. 08-37, adopted by the City Council of the City on
December 9, 2008 (the "Note Resolution"). Said taxes and other
revenues received by the City after December 10, 2008, are
pledged to the payment of the principal of and interest on the
Note.
To provide for the payment of the principal of and interest
on this Note, the City Council of the City has created, by the
Note Resolution, a special fund of the City known as the
"Revenue Anticipation Note, Series 2008, Redemption Fund" (the
Page 1 - Exhibit "A"
"Redemption Fund"), and has covenanted to deposit into the
Redemption Fund all ad valorem taxes and other revenues received
by the City for its General Fund after December 10, 2008, for
the 2008-2009 Fiscal Year, the receipt of which has been
anticipated by the issuance of the Note, until such time as the
funds accumulated therein shall be sufficient to pay the Note,
together with interest thereon, at maturity. The funds so
accumulated in the Redemption Fund will be set apart for the
payment of the Note and will be used for no other purpose.
Nothing herein shall be construed to limit the payment of the
principal of and interest on this Note solely to the taxes and
other revenues in anticipation of which this Note was issued,
but this Note is the direct and general obligation of the City.
IT IS HEREBY CERTIFIED AND DECLARED that the indebtedness
of the City hereby incurred does not exceed 75% of the taxes and
other revenues duly budgeted by the City and anticipated to be
received for the 2008-2009 Fiscal Year after the date of issue
of this Note, that the indebtedness incurred hereby does not
exceed any other limitation on the indebtedness of the City, and
that the indebtedness hereby incurred is contracted for the
purposes for which the taxes and other revenues have been
appropriated.
IT IS HEREBY FURTHER CERTIFIED AND DECLARED that the full
faith, credit, and resources of the City have been pledged for
the payment of this Note according to its terms, that this Note
is issued pursuant to and in full compliance with the
Constitution and laws of the State of Idaho and the resolutions
of the City, and that all acts, conditions, and things required
to be done precedent to and in the issuance of this Note have
happened, been done, and have been performed.
IN WITNESS WHEREOF, the City of Eagle, Idaho, has caused
this Note to be executed by its Mayor and attested by its Clerk,
and the official seal of the City to be impressed hereon, all as
of this 10th day of December, 2008.
CITY
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Page 2 - Exhibit "A"
December 9, 2008
City of Eagle
P.O. Box 1520
Eagle, Idaho 83616
TAX AND REVENUE ANTICIPATION NOTE PURCHASE CONTRACT
Zions First National Bank (the "Purchaser"), is pleased
to offer to purchase securities from the City of Eagle, Idaho
(the "Seller") its $500,000 principal amount Tax and Revenue
Anticipation Note, Series 2008 (the "Note"). This offer is
based credit approval and upon the terms and conditions set
forth below and in Exhibit A attached, which when accepted by
the Seller shall constitute the terms and conditions of our
Purchase Contract for the Note. Those terms and conditions
are as follows:
1. Prior to the date of deli very and payment for the
Note ("Closing") , the Seller shall adopt a
Resolution (the "Resolution") authorizing the sale
of the Note in a form and substance acceptable to
the Purchaser.
2. The Seller shall sell and deliver to the Purchaser,
and the Purchaser shall purchase at the interest
rate set forth in paragraph (A) of Exhibit A,
accept delivery of and pay for the entire principal
amount of the Note up to $500,000 or an amount to
be determined by the Seller in cooperation with the
Purchaser.
3. The Seller represents, warrants to and agrees with
the Purchaser as of the date and time of closing
that:
a. The Seller has and will have at closing full
legal right, power and authority to enter and
perform its obligations under this Purchase
Contract to adopt the Resolution and to sell
and deliver the Note to the Purchaser;
b. This Purchase Contract, the Resolution, and the
Note do not and will not conflict with or
create a breach of or default under any
existing law, regulation, judgment, order,
decree, or any agreement, lease, or instrument
to which the Seller is subj ect or by which it
is bound;
c. No governmental
Exhibit "8" - Page 1
consent,
approval,
or
authorization other than the Resolution is
required in connection with the purchase of the
Note by the Purchaser;
d. This Purchase Contract, the Resolution, and the
Note (when paid for) are, and shall be at the
time of Closing, legal, valid, and binding
obligations of the Seller enforceable in
accordance with their respective terms, subject
only to applicable bankruptcy, insolvency, or
other similar laws generally affecting
creditors' rights;
e. The Resolution shall have been duly authorized
by the Seller, shall be in full force and
effect, and shall not have been amended at the
time of closing;
4. As conditions
hereunder:
to
the
Purchaser's
obligation
a. At or prior to Closing, the Purchaser shall
have received the following:
1. The Note, in definitive or temporary form,
is duly executed and authenticated;
2. An unqualified approving opinion of a
recognized firm of lawyers (the "Note
Counsel"), satisfactory to the Purchaser
and dated as of Closing, to the effect that
the Seller has authority to adopt the
Resolution and to issue and sell the Note
to the Purchaser, that the Note is valid,
legal, and binding obligations of the
Seller except to the extent that such
enforcement may be limited by bankruptcy,
insolvency, or other laws affecting
creditors' rights and that interest on the
Note is exempt from federal income taxation
and,State of Idaho income taxation;
3. A certificate of authorized officers of the
Seller to the effect that no litigation is
pending, or to the knowledge of the Seller
threatened, against the Seller in any court
to restrain or enjoin the sale or delivery
by the Seller of the Note; to question the
authority of the Seller to issue, or the
issuance or validity of, the Note; to
question the constitutionality of any
statute, resolution, or the validity of any
proceedings, authorizing the issuance of
Exhibit "B" - Page 2
the Note; to question the validity or
enforceability of the Resolution; or to
question the titles of any officers of the
Seller to their respective offices or the
legal existence of the Seller under the
laws of the State of Idaho or which might
in any material respect adversely affect
the transaction; contemplated to be
undertaken by the Seller;
4. A certificate signed by authorized officers
of the Seller to the effect that the
officers of the Seller who signed or whose
facsimile signatures appear on the Note
were on the date of execution of the Note
the duly elected, qualified, and acting
officers of the Seller, and that their
signatures are genuine or accurate
facsimiles.
5. A certified copy of the Resolution;
6. A certificate signed by authorized officers
of the Seller stating that the Seller has
established a "Revenue Anticipation Note
Redemption Fund", into which shall be paid
revenues and taxes sufficient for the
retirement of the Note.
7. A certified copy of this Purchase Contract;
8. Such additional legal opinions,
certificates, instruments, and documents as
the Purchaser may reasonably request to
evidence the truth, accuracy, and
completeness, as of the date of Closing, of
the representations and warranties and due
performance by the Seller at or prior to
Closing of all agreements then to be
performed and all conditions then to be
satisfied by the Seller;
9. An opinion of the Attorney for the Seller
to the effect that the Seller has and will
have at Closing full legal right, power,
and authority to enter into and perform its
obligations under the Purchaser Agreement
and under the Resolution, to adopt the
Resolution, and to sell and deliver the
Note;
10. A certificate designating the Note as
"qualified tax-exempt obligations" pursuant
Exhibit "8" - Page 3
to the small issuer exception provided by
Section 265 (b) (3) of the Internal Revenue
Code of 1986, which affords the Purchaser
favorable treatment deduction of interest
expense.
5. Upon acceptance, this Purchase Contract shall be
binding upon the Seller and the Purchaser. This
Purchase Contract is intended to benefit only the
parties hereto. The Seller's representations and
warranties shall survive any investigation made by
or for the Purchaser, delivery and payment for the
Note, and the termination of this Purchase
Contract. Should the Seller fail to satisfy any of
the foregoing conditions, or Purchaser's
obligations are terminated for any reason permitted
under this Purchase Contract, then the Purchaser
shall have no further obligations under this
Purchase Contract.
Respectfully submitted,
ZIONS FIRST NATIONAL BANK
By:
Its:
Accepted by City Council of the City of Eagle, Idaho this 9th
day of December, 2008.
ATTEST:
Clerk
Mayor
Exhibit "B" - Page 4
EXHIBIT A
Description of Note
A. Interest Rate: 3.20%, calculated on the basis of a
30/360 interest accrual method
B. Dated Date: December 10, 2008.
D. Maturity Date: September 30, 2009.
E. Redemption: The Note is callable at par plus accrued
interest and an amortization of the servicing fees with
thirty days written notice.
F. Estimated Closing Date: December 10, 2008.
G. Note Counsel: All fees to be paid by the City. Note
Counsel's opinion is required for closing on December
10, 2008.
H.
Offer Expires: December 10, 2008,
Purchaser will extend this offer
conditions upon mutual agreement.
10:00 P.M.,
subject to
P.S.T.
market
I. Method of Payment: Federal funds draft or wire.
J. 8038-G: The City of Eagle shall make necessary filings
at closing.
K. Cost of Issuance: Bank fees of $875; 1% Underwriters
Discount; Bond Counsel Fees.
Exhibit "B" - Page 5