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2010C Water Revenue Capital Loan Notes State Revolving Fund Loan Copyrighted J uly 20, 2020 City of Dubuque Consent Items # 28. City Council Meeting ITEM TITLE: 2010C Water Revenue Capital Loan Notes State Revolving Fund Loan Rate Reset SUM MARY: City Manager recommending approval of an amendment to the City Water Revenue State Revolving Fund (SRF) loan agreement entered into as of February 12, 2010. RESOLUTION approving and authorizing Amendment to Loan and Disbursement Agreement by and between the City of Dubuque and the lowa Finance Authority and authorizing and providing for the reissuance of the Water Revenue Capital Loan Note, Series 2010C (Rate Reset). SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s) DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo Resolution Resolutions 8038G Supporting Documentation Supplemental Tax Exemption Certificate Supporting Documentation Revised Amortization Schedule Supporting Documentation Dubuque THE CI'TY OF � All•Aoerica Ciry DuB E ;,�� � , IIW Maste iece on the Misszssi i Z°°'"z°lz"z°13 rP pp zol�*�0�9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Proceedings to Amend the 2010C Water Revenue Capital Loan Notes (State Revolving Fund Loan) for a Rate Reset (Refinancing) — Water Meter Changeout Project DATE: July 9, 2020 Director of Finance and Budget Jennifer Larson recommends City Council approval of an amendment to the City Water Revenue State Revolving Fund (SRF) loan agreement entered into as of February 12, 2010. The original loan was for $7,676,000 and was used for the Water Meter Changeout Project, which included replacement of approximately 22,000 water meters and installation of hardware and software for fixed based remote read capabilities. The outstanding loan amount is currently $1,991,000 at 3% interest. This rate reset will reduce the interest rate to 1.75% for the remaining $1,991,000 and will generate interest savings of$157,237.50. I concur with the recommendation and respectfully request Mayor and City Council approval. �Jv�1 �Gv�r Michael C. Van Milligen MCVM:jml cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Teri Goodmann, Assistant City Manger Dubuque THE CI'TY OF � All•Aoerica Ciry DuB E ;,�� � , IIW Maste iece on the Misszssi i Z°°'"z°lz"z°13 rP pp zol�*�0�9 TO: Michael C. Van Milligen, City Manager FROM: Jennifer Larson, Director of Finance and Budget SUBJECT: Proceedings to Amend the 2010C Water Revenue Capital Loan Notes (State Revolving Fund Loan) for a Rate Reset (Refinancing) — Water Meter Changeout Project DATE: July 9, 2020 INTRODUCTION The purpose of this memorandum is to suggest proceedings and amend the City's Water Revenue State Revolving Fund (SRF) loan agreement entered into as of February 12, 2010 for the Water Meter Changeout Project. BACKGROUND The original loan was for $7,676,000 and was used for the Water Meter Changeout Project, which included replacement of approximately 22,000 water meters and installation of hardware and software for fixed based remote read capabilities. DISCUSSION This loan rate reset will reduce the interest rate from 3.00% to 1.75% for the remaining principal balance of$1,991,000 and will generate interest savings of$157,237.50. The resolution approves and authorizes an amendment to the loan and disbursement agreement between the City of Dubuque, lowa and the lowa Finance Authority (lender) and the lowa Department of Natural Resources and Wells Fargo Bank, N.A. (trustee). ACTION I respectfully recommend approval of resolution and the Supplemental Tax Certificate confirming no changes to the covenants and representations of the original tax certificate the City approved for the 2010 loan. Attachments cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Teri Goodmann, Assistant City Manger ITEMS TO INCLUDE ON AGENDA CITY OF DUBUQUE, IOWA $1,991,000 Water Revenue Capital Loan Note, Series 2020 (Rate Reset of 2010C SRF loan) • Resolution approving and authorizing Amendment to Loan and Disbursement Agreement by and between the City of Dubuque and the Iowa Finance Authority, and authorizing and providing for the reissuance of the Water Revenue Capital Loan Note, Series 2010C (Rate Reset). NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. July 20, 2020 The City Council of the City of Dubuque, State of Iowa, met in regular session, via electronic means, an in -person meeting being impossible or impractical due to the COVID-19 pandemic, at 6:30 P.M., on the above date. There were present Mayor Roy D. Buol in the chair, and the following named Council Members: Brad Cavanagh, Ric Jones, David Resnick, Laura Roussel', Danny Sprank Absent: Vacant: Ward 1 1 Council Member Resnick introduced the following Resolution entitled "A RESOLUTION APPROVING AND AUTHORIZING AN AMENDMENT TO LOAN AND DISBURSEMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE AND THE IOWA FINANCE AUTHORITY, AND AUTHORIZING AND PROVIDING FOR THE REISSUANCE OF THE WATER REVENUE CAPITAL LOAN NOTE, SERIES 2010C (RATE RESET), OF THE CITY", and moved its adoption. Council Member Jones seconded the motion to adopt. The roll was called and the vote was: AYES: Jones, Buol, Cavanagh, Sprank, Roussell, Resnick NAYS: Whereupon the Mayor declared the following Resolution duly adopted: 2 RESOLUTION NO: 222-20 A RESOLUTION APPROVING AND AUTHORIZING AN AMENDMENT TO LOAN AND DISBURSEMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE AND THE IOWA FINANCE AUTHORITY, AND AUTHORIZING AND PROVIDING FOR THE REISSUANCE OF THE WATER REVENUE CAPITAL LOAN NOTE, SERIES 2010C (RATE RESET), OF THE CITY WHEREAS, the City of Dubuque (hereinafter the "Issuer") previously issued its Water Revenue Capital Loan Note, Series 2010C, dated February 12, 2010, in the amount of $7,676,000 ($8,676,000 originally issued, with $1,000,000 in the form of a forgivable loan) (hereinafter the "Note") currently outstanding in the amount of $1,991,000, pursuant to a Loan and Disbursement Agreement between the Issuer and the Iowa Finance Authority, dated of like date (the "Agreement"), for the purpose of defraying the costs of the Project (as defined in the resolution authorizing issuance of the same (hereinafter the "Resolution")); and WHEREAS, the Iowa Finance Authority, as Original Purchaser and current holder of the Notes, has authorized a reduction in the interest rate on the Notes to 1.75%; and WHEREAS, an Amendment to the Loan and Disbursement Agreement (hereinafter the "Amendment") has been prepared to reflect said interest rate reduction, a copy of which is attached hereto as Exhibit A; and WHEREAS, pursuant to IRS regulations adoption of the Amendment constitutes a reissuance of the Notes. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IN THE COUNTY OF DUBUQUE, STATE OF IOWA: Section 1. Section 2. Section 3. That the Resolution is hereby amended to reflect the interest rate reduction to 1.75% per annum on the outstanding principal amount from and after June 1, 2020 for the remainder of the life of the Notes. That the Amendment in substantially in the form attached to this Resolution is hereby authorized to be executed and issued on behalf of the Issuer by the Mayor and attested by the City Clerk. That the Supplemental Tax Certificate regarding the uses of proceeds and the system is hereby approved. The Director of Finance & Budget is directed to execute the same. 3 Section 4. Except as amended herein, all of the other terms and conditions of the Resolution and Agreement are in all respects ratified, confirmed and approved and shall remain in full effect. PASSED AND APPROVED this 20th day of July 2020. ATTEST: Mayor -4 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the 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 pursuant to the local rules of the Council and the provisions of Chapter 21, 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 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 the 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 the Council hereto affixes this 21 st day of July 2020. City C -rk, City of Dubuque, State of Iowa EXHIBIT A AMENDMENT TO LOAN AND DISBURSEMENT AGREEMENT The Loan and Disbursement Agreement (Water Revenue) (the "Agreement") entered into as of February 12, 2010 by and between the City of Dubuque, Iowa (the "City" or "Issuer") and the Iowa Finance Authority, as lender (the "Lender") relating to a loan from the Lender to the City in the original amount of $7,676,000 ($8,676,000 originally issued, with $1,000,000 in the form of a forgivable loan), currently outstanding in the aggregate amount of $1,991,000, is hereby amended as follows: 1. The applicable interest rate for the Agreement shall be changed to 1.75%, effective as of June 1, 2020, and the Agreement shall thereafter be payable in accordance with the debt service schedule attached hereto and incorporated herein by this reference. 2. Except as amended herein, all of the other teiins and conditions of the Agreement are in all respects ratified, confirmed and approved and shall remain in full effect. IN WITNESS WHEREOF, we have hereunto affixed our signatures all as of the 20th day of July 2020. By: Cfty Clerk CITY OF DUBUQUE, IOWA IOWA FINANCE AUTHORITY By: 01739738-1\10422-000 Executive Director Form 8038-G (Rev. September 2018) Department of the Treasury Internal Revenue Service Part I Information Return for Tax -Exempt Governmental Bonds ► Under Internal Revenue Code section 149(e) 0-See separate instructions. Caution: If the issue price is under $100,000, use Form 8038-GC. ► Go to www.irs.gov/F8038G for instructions and the latest information. OMB No. 1545-0720 Reporting Authority If Amended Return, check here ► ❑ 1 Issuer's name City of Dubuque, Iowa 2 Issuer's employer identification number (EIN) 42-6004596 3a Name of person (other than issuer) with whom the IRS may communicate about this retum (see instructions) 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) 50 W. 13th Street Room/suite 5 Report number (For IRS Use Only) 3 1 I ., 6 City, town, or post office, state, and ZIP code Dubuque, Iowa 52001 7 Date of issue July 20, 2020 8 Name of issue Reissuance of Water Revenue Capital Loan Notes, Series 2010C 9 CUSIP number NONE 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see instructions) Jenny Larson, Director of Finance and Budget 10b Telephone number of officer or other employee shown on 10a 563-589-4100 Part II 11 12 Health and hospital 13 Transportation 14 Public safety 15 Environment (including sewage bonds) 16 Housing 17 Utilities 18 Other. Describe ► Reissuance due to interest rate reduction Type of Issue (enter the issue price). See the instructions and attach schedule. Education 19a If bonds are TANs or RANs, check only box 19a b If bonds are BANs, check only box 19b 20 If bonds are in the form of a lease or installment sale, check box Part III Description of Bonds. Complete for the entire issue for which this form is being filed. 11 12 13 14 15 16 17 18 1,991,000 21 (a) Final maturity date b () Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 06/01/2031 $ 1,991,000 $ 1,991,0000 6.318 years 1.7500 Part IV Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 23 Issue price of entire issue (enter amount from line 21, column (b)) 24 Proceeds used for bond issuance costs (including underwriters' discount) 25 Proceeds used for credit enhancement 26 Proceeds allocated to reasonably required reserve or replacement fund 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . . 28 Proceeds used to refund prior taxable bonds. Complete Part V . . . 29 Total (add lines 24 through 28) 30 24 -0- 22 -0- 23 1,991,000 00 25 -0- 26 -0- 27 1,991,000 00 28 -0- Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) Part V 29 1,991,000 00 30 -0- Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . . . ► 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . . . . ► 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) . . ► 34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) 02/12/2010 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S 6.318 years N/A years 06/01/2020 Form 8038-G (Rev. 9-2018) Form 8038-G (Rev. 9-2018) Page 2 Part VI Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC). See instructions b Enter the final maturity date of the GIC ► (MM/DD/YYYY) c Enter the name of the GIC provider ► 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► 0 and enter the following information: b Enter the date of the master pool bond ► (MM/DD/YYYY) unknown c Enter the EIN of the issuer of the master pool bond ► d Enter the name of the issuer of the master pool bond ► See attached schedule I 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ► 0 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ► ❑ 41a If the issuer has identified a hedge, check here ► ❑ and enter the following information: b Name of hedge provider c Type of hedge ► d Term of hedge ► 42 If the issuer has superintegrated the hedge, check box ► ❑ 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box ► 44 If the issuer has established written procedures to monitor the requirements of section 148, check box ► 0 45a If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount of reimbursement ► b Enter the date the official intent was adopted ► (MM/DD/YYYY) 35 -0- 36a -0- 37 -0- attached Signature and Consent Paid Preparer Use Only Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to process this return, to tie person that I have a zed above. of er's authorized reorLssentative r signature ,au Print/Type prarer's name Kristin Billingsley Cooper ' Jenny Larson, Director of Finance & Budget Date Type or print name and title Preparer's signature Firm's name ► Ahlers & Cooney, P.C. Date Check ❑ if self-employed Firm's EIN ► PTIN P02001942 42-1323559 Firm's address ► 100 Court Avenue, Suite 600, Des Moines, Iowa 50309 Phone no. 515-246-0330 Form 8038-G (Rev. 9-2018) SUPPLEMENTAL TAX CERTIFICATE OF DUBUQUE, IOWA The undersigned officer of the City of Dubuque, Iowa (the "City"), hereby certifies as follows: 1. The Council of the City of Dubuque ("Council"), acting at a meeting duly called and held on July 20, 2020, has authorized the execution and delivery of an Amendment to the Loan and Disbursement Agreement originally dated as of February 12, 2010 ("Agreement") by and between the Council and the Iowa Finance Authority ("Purchaser"), and approved a resolution ("Supplemental Resolution") amending the resolution approved by the Council on January 25, 2010 ("Original Bond Resolution"), which Original Bond Resolution authorized the issuance and delivery of a $7,676,000 Water Revenue Capital Loan Note, Series 2010C, dated February 12, 2010 ($8,676,000 originally issued, with $1,000,000 in the form of a forgivable loan) ("Original Note"). 2. The officer whose name, title and signature appears below was, on the date or dates of the execution of the instruments referred to in paragraph 1 hereof, and is on the date hereof, the duly elected and qualified incumbent of the office of the City, and the signature set opposite the name appearing below is the genuine signature of said officer. 3. We have reviewed the representations, covenants and warranties contained in the Tax Exemption Certificate dated February 12, 2010 ("Tax Certificate") executed on behalf of the City in connection with the issuance of the Original Note. A true and accurate copy of the Tax Exemption Certificate is attached hereto as Exhibit A. 4. The description of the Project set forth in Section II of the Tax Certificate accurately describes the Project as constructed and as it exists and is used as of the date hereof, and there has been no change in the use of the Project since the Original Note was issued. 5. The construction of the Project has been completed, and all of the proceeds of the Original Note were expended on the costs of the Project, in the amounts and as described Sections II and III of the Tax Certificate. 6. Not more than 10% of the proceeds of the Original Note or the facilities financed thereby, are to be used (directly or indirectly) or were used in a trade or business carried on by any person (other than a governmental unit), and not more 10% of the payment of the principal of or interest on the Original Note is (directly or indirectly): (i) secured by any interest in property used or to be used in such trade or business or payments in respect of such property; or (ii) derived from payments (whether or not to the City) in respect of property or borrowed money used or to be used in such a trade or business, all within the meaning of Section 141(a) of the Code. 1 7. During the term of the Original Note, and at all times prior to the date hereof, no private business use will be made or has been made of the Project, and no payments or security will be made or furnished or has been made or furnished that would cause the Original Note to be a "private activity bond" within the meaning of Section 141 of the Code and applicable regulations. 8. The reissuance of the Original Note involves outstanding obligations in the amount of $1,991,000 which were previously designated by the Issuer as "qualified tax exempt obligations" as defined in Section 265(b)(3) of the Tax Code. Pursuant to Subsection (D) of that Section, said amount retains the prior designation. 9. The covenants of the City contained in the Tax Certificate are hereby ratified, confirmed and approved and shall continue to be binding upon the City as if set forth fully herein. This certificate is intended and is being delivered in order to meet the requirements of Section 148 of the Internal Revenue Code of 1986, as amended, and Treasury Regulation 1- 148(2)(b). IN WITNESS WHEREOF, the undersigned has hereunto set my hand as of the 20th day of July, 2020. By: 01739557-1\10422-091 CITY OF DUBUQUE�, IOWA DiTtor of Finance & Budget 2 Loan ID Dated Date Loan Amount Interest Savings Date Dubuque *** Effective 6.1.20 *** DSG0129R 2/12/2010 $7,676,000.00 (Unused - $1,282,000) $157,237.50 Current Schedule Current Interest Servicing Principal 3.00% Fee 12/1/2020 6/1/2021 12/1/2021 6/1/2022 12/1/2022 6/1/2023 12/1/2023 6/1/2024 12/1/2024 6/1/2025 12/1/2025 6/1/2026 12/1/2026 6/1/2027 12/1/2027 6/1/2028 12/1/2028 6/1/2029 12/1/2029 6/1/2030 12/1/2030 6/1/2031 154,000.00 158,000.00 164,000.00 169,000.00 174,000.00 180,000.00 186,000.00 192,000.00 198,000.00 205,000.00 211,000.00 29, 865.00 29, 865.00 27,555.00 27,555.00 25,185.00 25,185.00 22,725.00 22,725.00 20,190.00 20,190.00 17,580.00 17,580.00 14,880.00 14,880.00 12,090.00 12,090.00 9,210.00 9,210.00 6,240.00 6,240.00 3,165.00 3,165.00 4,977.50 4,592.50 4,197.50 3,787.50 3,365.00 2,930.00 2,480.00 2,015.00 1,535.00 1,040.00 527.50 STATE rieJav a New Debt Schedule New Interest Servicing New Annual Principal 1.75% Fee Debt Service 154,000.00 158,000.00 164,000.00 169,000.00 174,000.00 180, 000.00 186, 000.00 192, 000.00 198, 000.00 205, 000.00 211,000.00 17,421.25 17,421.25 16,073.75 16,073.75 14,691.25 14,691.25 13,256.25 13,256.25 11,777.50 11,777.50 10,255.00 10,255.00 8,680.00 8,680.00 7,052.50 7,052.50 5,372.50 5,372.50 3,640.00 3,640.00 1,846.25 1,846.25 4,977.50 4,592.50 4,197.50 3,787.50 3,365.00 2,930.00 2,480.00 2,015.00 1,535.00 1,040.00 527.50 193, 820.00 194,740.00 197,580.00 199,300.00 200, 920.00 203,440.00 205, 840.00 208,120.00 210,280.00 213,320.00 215,220.00 1,991,000.00 377,370.00 31,447.50 1,991,000.00 220,132.50 31,447.50 2,242,580.00