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Capital Loan Notes_North Fork Catfish Creek SewerTHE CITY OF DUbUgU@ DUB E ~ - Masterpiece on the Mississippi 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Proceedings for Public Hearing on the Issuance of Not to Exceed $1,141,000 Sewer Revenue Capital Loan Notes (State of Iowa Revolving Fund Loan) DATE: June 11, 2008 Finance Director Ken TeKippe is recommending approval, after a public hearing, of a resolution entitled, "Resolution Instituting Proceedings to Take Additional Action for the Authorization of a Loan and Disbursement Agreement and the Issuance of not to exceed $1,141,000 Sewer Revenue Capital Loan Notes." This will permit the City to take advantage of the 3% fixed interest rate for 20 years with a .25% annual administration fee available from Sewer Revenue Capital Loan Notes from the Iowa Water Pollution Control Works Financing Program under the State of Iowa Revolving Loan Fund. I concur with the recommendation and respectfully request Mayor and City Council approval Michael C. Van I~lilligen MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Kenneth J. TeKippe, Finance Director THE CITY OF DUB E ~~ Memorandum TO: Michael C. Van Milligen, City Manager ~; _ FROM: Kenneth J. TeKippe, Finance Director ~~ SUBJECT: Proceedings for Public Hearing on the Issuance of Not to Exceed $1,141,000 Sewer Revenue Capital Loan Notes (State of Iowa Revolving Fund Loan) DATE: June 11, 2008 The purpose of this memorandum is to provide the suggested proceedings for the public hearing on the issuance of Sewer Revenue Capital Loan Notes from the Iowa Water Pollution Control Works Financing Program under the State of Iowa Revolving Fund Loan (SRF) program. The hearing called by the enclosed proceedings will permit the City to take advantage of the 3% fixed interest rate for 20 years with a .25% annual administrative fee associated with the borrowing. There is a one-time 1 % loan origination fee for the borrowing. The loan funds will be used for the reconstruction of North Fork Catfish Creek interceptor sanitary sewer. Reconstructing the sanitary sewer system will prevent inflow and infiltration of rain water during and following heavy rains. The proceedings have been prepared on the basis that no objections will be filed with the City Clerk. If there are objections, we will need to summarize them. The Mayor will then declare the hearing on the issuance of said Bonds to be closed. Immediately following, a resolution is to be introduced and adopted entitled "Resolution Instituting Proceedings to Take Additional Action for the Authorization of a Loan and Disbursement Agreement and the Issuance of not to exceed $1,141,000 Sewer Revenue Capital Loan Notes." In the event the Council decides to abandon the proposal to issue said loans, then the form of resolution included in said proceedings should not be adopted. In this event, a motion needs to be adopted to the effect that such loan proposal is abandoned. Section 384.8.3 of the Code of Iowa provides that any resident or property owner of the City may appeal the decision to take additional action to issue the loan, to the District Court of a county in which any part of the City is located, within 15 days after such additional action is taken, but that the additional action is final and conclusive unless the court finds that the Council exceeded its authority. The action steps for City Council are to hold the public hearing and approve the resolution. A letter from attorney William Noth detailing information on the bond hearing is enclosed. Future Council action to authorize issuance of the Notes will be requested once the City of Dubuque is ready to begin drawing down the loan proceeds to pay project costs. KT/jg Attachments cc: Barry Lindahl, City Attorney Jenny Larson, Budget Director Jeanne Schneider, City Clerk (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of Dubuque, Iowa. Date of Meeting: June 16th, 2008. Time of Meeting: 5 : 3 0 o'clock P .M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for said meeting is as follows: Not to exceed $1,141,000 Sewer Revenue Capital Loan Notes - Public. hearing on the authorization of a Loan and Disbursement Agreement and the issuance of Notes to evidence the obligation of the City thereunder. - Resolution instituting proceedings to take additional action. Such additional matters as are set forth on the additional 13 page(s) attached hereto. (number) This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of said governmental body. (qty Clerk, Dubuque, Iowa June 17 ,2008 The City Council of Dubuque, Iowa, met in R e q u 1 a r session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 5 = 30 o'clock P .M., on the above date. There were present Mayor _ Roy D . Buol, in the chair, and the following named Council Members: Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick, Dirk Voetberg None Absent: -2- The Mayor announced that this was the time and place for the public hearing and meeting on the matter of the authorization of a Loan and Disbursement Agreement by and between the City and the Iowa Finance Authority, and the issuance to the Iowa Finance Authority of not to exceed $1,141,000 Sewer Revenue Capital Loan Notes to evidence the obligations of the City under said Loan and Disbursement Agreement, in order to provide funds to pay costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated with construction of the North Fork Catfish Creek Stormwater and Sanitary Sewer Improvements, Phase I Sanitary Sewer Project,- and that notice of the proposed action by the Council to institute proceedings for the authorization of the Loan and Disbursement Agreement and the issuance of the Notes had been published pursuant to the provisions of Sections 384.24A and 384.82 of the City Code of Iowa, as amended. The Mayor then asked the City Clerk whether any written objections had been filed by any City resident or property owner to the proposal. The City Clerk advised the Mayor and the Council that no written objections had been filed. The Mayor then called for oral objections to the proposal and none were made. Whereupon, the Mayor declared the time for receiving oral and written objections to be closed. (Attach here a summary of objections received or made, if any) -3- The Council then considered the proposed action and the extent of objections thereto. Whereupon, Council Member Jones introduced and delivered to the Clerk the Resolution hereinafter set out entitled "RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE AUTHORIZATION OF A LOAN AND DISBURSEMENT AGREEMENT AND THE ISSUANCE OF NOT TO EXCEED $1,141,000 SEWER REVENUE CAPITAL LOAN NOTES ", and moved: - ~x that the Resolution be adopted. to ADJOURN and defer action on the Resolution and the proposal to institute proceedings to the meeting to be held at o'clock .M. on the day of , 2008, at this place. Council Member Lynch seconded the motion. The roll was called and the -vote was, AYES: Braig, Buol, Connors, Jones, Lynch, Resnick, Voetberg NAYS: None Whereupon, the Mayor declared the measure duly. adopted. . RESOLUTION NO. 204-08 RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE AUTHORIZATION OF A LOAN AND DISBURSEMENT AGREEMENT AND THE ISSUANCE OF NOT TO EXCEED .$1,141,000 SEWER REVENUE CAPITAL LOAN NOTES -4- WHEREAS, pursuant to notice published as required by law, this Council has held a public meeting and hearing upon the proposal to institute proceedings for the authorization of a Loan and Disbursement Agreement by and between the City and the Iowa Finance Authority, and the issuance to the Iowa Finance Authority of not to exceed $1,141,000 Sewer Revenue Capital Loan Notes to evidence the obligations of the City under said Loan and Disbursement Agreement,'for the purpose of paying costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated with construction of the North Fork Catfish Creek Stormwater and Sanitary Sewer Improvements, Phase I Sanitary Sewer Project, and has considered the extent of objections received from residents or property owners as to said proposal and, accordingly the following action is now considered to be in the best interests of the City and residents thereof: NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That this Council does hereby institute proceedings and takes additional action for the authorization of a Loan and Disbursement Agreement by and between the City and the Iowa Finance Authority, and the issuance to the Iowa Finance Authority in the manner required by law of not to exceed $1,141,000 Sewer Revenue Capital Loan Notes for the foregoing purpose. Section 2. That this Council does hereby consent to the terms and conditions of the SRF Loan Program, which terms and conditions and the disclosures provided with respect thereto are hereby acknowledged, accepted and approved. Section 3. That the City Clerk, with the assistance of the City Attorney and bond counsel, is hereby authorized and directed to proceed with the preparation of such documents and proceedings as shall be necessary to authorize the City's participation in the SRF Loan Program, to select a suitable date for final Council authorization of the required Loan and Disbursement Agreement and issuance of the Note to evidence the City's obligations thereunder, and to take such other actions as the Clerk shall deem necessary to permit the, completion of a loan on a basis favorable to the City and acceptable to this Council. Section 4. That this Resolution be and does hereby serve as a declaration of official intent under Treasury Regulation 1.150-2, because the City reasonably expects to reimburse with the proceeds of the Notes, all or a portion of original expenditures incurred in connection with the above purposes. -5- PASSED AND APPROVED this 16th day of June, 2008. Roy D. Buol Mayor ATTEST: Jeanne F. Schneider City Clerk -6- CIG-3 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE ) I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of said Municipality showing proceedings of the Council, and the same is a true and complete copy of the action taken by said Council with respect to said matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place. easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of said agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 2I, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by said law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective city offices as indicated therein, that no Council vacancy existed except as may be stated. in said proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of said Municipality hereto affixed this 17th day of June , 2008. SEAL DCORNELL\579564.1 \WP110422.082 1~~~~ ity Clerk, Dubuque, Iowa -7- IOWA WATER POLLUTION CONTROL WORKS FINANCING PROGRAM LOAN TERMS • Principal amount authorized Determined in accordance with City's application. • Interest rate .............. . Currently 3.0%. • Interest payment dates ........ Typically June 1 and December 1 of each year, unless outstanding parity bonds require otherwise. • Principal repayment dates ..... Typically June 1 of each year, commencing not later than one year after the completion of the project being funded with the SRF loan. • Term of loan ............... Typically twenty or thirty years from date of completion of project. • Optional redemption ........ . Principal of the loan may be called for redemption and paid before maturity on any date following receipt of written consent by the Iowa Finance Authority, from any funds regardless of source, in whole or from time to time in part, by giving thirty days' notice of redemption by certified or registered mail. The terms of redemption shall be par, plus accrued interest to date of call. The loan also is subject to optional redemption in the event all or substantially all of the Project is damaged or destroyed, at a price of par plus accrued interest. • Initiation fee .............. 1 % of the principal amount borrowed, which may be deducted from the loan proceeds at the time of closing. • Annual servicing fee ........ 0.25% of the outstanding principal balance, payable each year at the time principal is paid. Rate covenant .............. Sewer user charges must be established at a level which produces and maintains net revenues at a level not less than 110% of principal and interest falling due in the same year. Other covenants ............. No reserve fund or improvement fund is required for the SRF loan. SRF loan may be subordinate to outstanding sewer revenue obligations with consent of Iowa Finance Authority. • Disbursement schedule ....... Loan proceeds are disbursed following the receipt by the Iowa Finance Authority of a completed disbursement request form. • Source of loan funds ......... Iowa Finance Authority ("SRF Program Bonds") Iowa State Revolving Fund Revenue Bonds • SRF Program Trustee ........ Wells Fargo Bank, National Association (contact person: Kristie Boyce) (telephone: 515/245-8504) DCORNELL\30232\1 \ 17127001