General Obligation Bonds_Noth Cover LetterAHLERS GOONEY, P.C.
ATTORNEYS AT LAW
100 COURT AVENUE • SUITE 600
DES MOINES, IOWA 50309-2231
PHONE 515-243-7611
FAX: 515-243-2149
WWW.AHLERSLAW.COM
WILLIAM J. NOTH
WNOTH@AHLERSLAW.COM
October 8, 2009
By Overnight Delivery
Mr. Ken TeKippe
Finance Officer
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001-4864
Direct Dial:
(515)246-0332
RE: $2,935,000 General Obligation Bonds, Series 2009A
$11,175,000 General Obligation Urban Renewal Bonds, Series 2009B
$8,885,000 General Obligation Refunding Bonds, Series 2009C
Dear Mr. TeKippe:
With this letter I am enclosing suggested proceedings for action by the City
Council at its meeting on October 19, 2009, authorizing the issuance of the above three
series of Bonds in accordance with the terms of sale approved by the City Council. The
various blank spaces included in the form of Bond approved in the proceedings need not
be completed, since various amounts and dates will be inserted in the individual Bonds.
The proceedings must be approved by an affirmative vote equal to a majority of the full
Council membership.
Also enclosed are resolutions to appoint the Registrar and Paying Agent for each
series.
The forms of Tax Certificate and Tax Exemption Certificate (together, the "Tax
Certificates") for the Series 2009A Bonds, the Series 2009B Bonds and the Series 2009C
Bonds, respectively, and the forms of Continuing Disclosure Certificate for each of the
series are approved in these proceedings. Preliminary copies of these Certificates are
enclosed for your review. Final execution copies of these items will be provided to you
under separate cover, along with the other closing certificates and the original Bonds.
October 8, 2009
Page 2
The Tax Certificates are important documents. (There are several blank spaces
that will be filled in once the purchaser has certified to the issue prices and reoffering
yields). The completed version will contain important information concerning the
calculated yield on the Bonds and will contain a number of covenants and obligations on
the part of the City. In each case, the final form of this Certificate should be retained as a
part of your permanent records. I will not attempt to summarize all of the matters which
are included in this Certificate but I do want to point out some important ones.
Tax exemption and eligibility for the Build America Bond subsidy payments is
based in part upon the fact that the use of the facilities to be acquired by the City with the
proceeds will be for the benefit of the public and will not be used in the private trade or
business of any business or non-tax-exempt entity. The properties acquired with the
proceeds of the Series 2009A, the 2009B and the Series 2009C Bonds must not be sold or
diverted to any private or nonpublic use unless the significance of that action is reviewed
by bond counsel.
Proceeds of the Series 2009A and 2009B Bonds can only be used to pay costs
of issuance (up to a 2% maximum amount) and "capital expenditures." A separate
letter on that subject is included with the enclosed proceedings.
In addition, the Tax Certificates will set forth the best knowledge and belief which
you have as of today concerning the timely expenditure of the proceeds of the Series
2009A, the 2009B and the 2009C Bonds as you reasonably expect expenditures to occur.
If for any reason you find you will be prevented from expending the proceeds fully
within three years, that matter should be referred to us.
The Series 2009A, the 2009B and the 2009C Bonds are being issued under the
expectation that the City will be exempt from the requirement to rebate arbitrage earnings
to the United States Government. The applicable rebate exemptions are described in
Section 3.3 of this Certificate.
There are a number of other general promises and commitments by the City to
take or refrain from action, which are necessary to maintain the tax exemption and Build
American Bond status of these Bonds. You should recognize that these promises and
commitments are required of the City on an ongoing basis and that the possibility of
soiree additional future action does exist.
October 8, 2009
Page 3
The Continuing Disclosure Certificates are required under the 1995 amendments
to SEC Rule 15c2-12, generally prohibiting the underwriting and recommendation to the
public of municipal securities for which adequate secondary market information is not
available. The applicable covenants and duties of the City to provide continuing
disclosure to the marketplace while each series of the Bonds are outstanding are outlined
in the Continuing Disclosure Certificate for each Series of Bonds.
In each case, the Continuing Disclosure Certificate obligates the City to provide
annual financial information and operating data to the Municipal Securities Rulemaking
Board ("MSRB") so long as the applicable series of Bonds is outstanding, and also to
provide notice to the MSRB if certain material events occur which could impact the
ability to pay principal and interest on the Bonds. The information to be provided
annually is for the most part the same sort of data which is included in the Official
Statement. The eleven (11) material events which must be reported are detailed in the
appropriate certificate, but the occurrence of other events which would be of concern to
the rating agencies or bondholders also should be considered for disclosure under the
anti-fraud provisions of the federal securities laws.
These disclosure requirements are ongoing and it will be important to designate an
appropriate contact person who will have a primary responsibility for preparing and
coordinating the filing of the annual financial information, operating data and any event
notices.
The penalties for violation of the rule fall ultimately on the issuer of the bonds,
because underwriters may be precluded from agreeing to underwrite or bid on bonds of
issuers who have not complied with their disclosure obligations. Failure to comply
therefore may result in fewer bids and ultimately no bids or the inability to secure an
underwriter for an issue.
Closing_Matters
As you know, the closing has been scheduled for November 10, 2009. The Bonds
are being issued as "book-entry-only" securities, with one original Bond being prepared
for each annual maturity, and registered in the nominee (CEDE & CO) of The Depository
Trust Company.
Extra copies of the proceedings are enclosed to be completed as the originals and
returned to us for our transcript of the action taken.
October 8, 2009
Page 4
If you have any questions concerning the enclosed proceedings, or any other
aspect of this financing, please don't hesitate to contact us.
Yours very truly,
William J. Noth
WJN:dc
encl.
cc: Jenny Larson (w/encl.)
Barry Lindahl (w/encl.)
Tionna Pooler (w/encl.)
DCORNELL 633498.1 /MSWord\10422.092