Sales Tax Increment Revenue Bonds $7M (Unlimited Property Tax Supported) Copyright 2014
City of Dubuque Consent Items # 9.
ITEM TITLE: Sales Tax Increment Revenue Bonds (Unlimited Property Tax Supported),
Second Lien Series 2014 Resolution Amendment
SUMMARY: City Manager recommending approval of an amendment to Section 8.3 of
the Master Bond Resolution relating to the initial series of Sales Tax
Increment Revenue Bonds issued by the City under the Flood Mitigation
Program.
RESOLUTION Amending Resolution No. 159-14 approved on May 19,
2014, relating to the issuance of Sales Tax Increment Revenue Bonds by
the City under the provisions of Chapter 418 of the Code of Iowa, and
authorizing the issuance of$7,190,000 Sales Tax Increment Revenue
Bonds (Unlimited Property Tax Supported), Second Lien Series 2014
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s)
ATTACHMENTS:
Description Type
❑ MVM Memo City Manager Memo
❑ Staff Memo Staff Memo
❑ Bond Counsel Letter Supporting Documentation
❑ Resolution Resolutions
THE CITY OF Dubuque
UBE I
erica .i
Masterpiece on the Mississippi 2007-2012-2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Resolution Amending Resolution No 159-14 Approved on May 19, 2014,
Relating to the Issuance of Sales Tax Increment Revenue Bonds by the
City under the Provisions of Chapter 418 of the Code of Iowa, and
Authorizing the Issuance of$7,190,000 Sales Tax Increment Revenue
Bonds (Unlimited Property Tax Supported), Second Lien Series 2014A
DATE: April 28, 2015
Budget Director Jennifer Larson is recommending City Council approval of an
amendment to section 8.3 of the Master Bond Resolution relating to the initial series of
Sales Tax Increment Revenue Bonds issued by the City under the Flood Mitigation
Program. The amendment to the Master Bond Resolution clarifies that such a right of
non-appropriation is not to be taken into account in determining whether a series of
senior bonds is secured by a stand-by levy of debt service taxes for purposes of section
8.3 of the Master Bond Resolution.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
lelj�
Michael C. Van Milligen
MCVM/jml
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Jennifer Larson, Budget Director
THE CITY OF Dubuque
UBE I
erica .i
Masterpiece on the Mississippi 2007-2012-2013
TO: Michael C. Van Milligen, City Manager
FROM: Jennifer Larson, Budget Director
SUBJECT: Resolution Amending Resolution No 159-14 approved on May 19, 2014, Relating
to the Issuance of Sales Tax Increment Revenue Bonds by the City under the
Provisions of Chapter 418 of the Code of Iowa, and Authorizing the Issuance of
$7,190,000 Sales Tax Increment Revenue Bonds (Unlimited Property Tax
Supported), Second Lien Series 2014A
DATE: April 28, 2015
INTRODUCTION
The purpose of this memorandum is to provide the suggested proceedings to amend Resolution
No. 159-14 approved on May 19, 2014 (the "Master Bond Resolution"), relating to the initial
series of Sales Tax Increment Revenue Bonds issued by the City under the Flood Mitigation
Program. This resolution would amend Section 8.3 to eliminate an ambiguity concerning the
application of the "additional bonds test" set forth in that section. A letter from attorney Bill Noth
detailing information on the amendment is enclosed.
BACKGROUND
Section 8.3 of the Master Bond Resolution sets forth the requirement that must be met before
additional sales tax increment senior bonds may be issued. Some of those requirements do not
apply in those instances where the proposed senior bonds are secured by a stand-by levy of
debt service taxes. The City is in the process of issuing an additional series of Senior Sales Tax
Increment Revenue Bonds that will be secured by a stand-by levy of debt service taxes, subject
to non-appropriation in any fiscal year. The right of non-appropriation is not referenced in
Section 8.3(b) as it is currently written.
DISCUSSION
This amendment to the Master Bond Resolution will clarify that such a right of non-appropriation
is not to be taken into account in determining whether a series of senior bonds is secured by a
stand-by levy of debt service taxes for purposes of section 8.3 of the Master Bond Resolution.
Section 11.1 of the Master Bond Resolution authorizes the City Council to amend the same
without the consent of or notice to any of the holders of the outstanding bonds, in order to cure
any ambiguity or inconsistent provision, so long as the action does not materially adversely
affect the interest of the holders of the outstanding bonds. There is only one series of bonds
outstanding which are the Sales Tax Increment Revenue Bonds, Series 2014A, and those
bonds are secured by an unlimited debt service levy. For that reason, it cannot be reasonable
suggested that the interest of those bondholders would be materially adversely affected by the
clarifying amendment.
RECOMMENDATION
I respectfully recommend the adoption of the enclosed resolution to amend Resolution No. 159-
14.
JML
Attachments
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
2
AHLERS COONEY, P.C.
100 COURT AVENUE,SUITE 600
DES MOINES,IOWA 50309-2231
PHONE;515-243-7611
FAX:515-243-2149
WWW.AHLERSLAW.COM
William J.Noth Direct Dial:
wnoth@ahlerstaw.com (515)246-0332
April 27, 2015
Ms. Jenny Larson
Budget Director
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001
RE: Sales Tax Increment Revenue Bonds (Annual Appropriation Property Tax
Supported), Senior Bond Series 2015A
Dear Ms. Larson:
With this letter I am enclosing a suggested form of Council resolution amending
Resolution No. 159-14 approved on May 19, 2014 (the "Master Bond Resolution"),
relating to the initial series of Sales Tax Increment Revenue Bonds issued by the City
under the Flood Mitigation Program. This resolution would amend Section 8.3 to
eliminate an ambiguity concerning the application of the "additional bonds test" set forth
in that Section.
As the preambles to the enclosed resolution describe, Section 8.3 of the Master
Bond Resolution sets forth the requirements that must be met before additional Senior
Bonds may be issued. Certain of those requirements do not apply in those instances
where the proposed Senior Bonds are secured by a stand-by levy of Debt Service Taxes.
As you know, the City now proposes to issue an additional series of Senior Bonds that
will be secured by a stand-by levy of Debt Service Taxes, subject to non-appropriation in
any fiscal year. That right of non-appropriation is not referenced in Section 8.3(b) as it is
currently written. The amendment would clarify that such a right of non-appropriation is
not to be taken into account in determining whether a series of Senior Bonds is secured
by a stand-by levy of Debt Service Taxes for purposes of Section 8.3.
April 27, 2015
Page 2
Section 11.1 of the Master Bond Resolution authorizes the City Council to amend
the same without the consent of or notice to any of the holders of the outstanding Bonds,
in order to cure any ambiguity or inconsistent provision thereof, so long as the action
does not materially adversely affect the interest of the holders of the outstanding Bonds.
As you know, there is only one series of Bonds outstanding (the Second Lien Series
2014), and those Bonds are secured by an unlimited debt service levy. For that reason, it
cannot be reasonably suggested that the interest of those Bondholders would be
materially adversely affected by the clarifying amendment.
An extra copy of the proceedings is enclosed to be completed as the original and
returned to us for our transcript of the action taken. If you have any questions relating to
the proceedings enclosed or this letter, please don't hesitate to contact us.
Very truly yours,
William J. Noth
WJN:dc
Encl.
cc: Barry Lindahl (w/encl.)
Ken TeKippe (w/encl.)
Tionna Pooler (w/encl.)
01105991-1\10422-162
(This Notice to be posted)
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body: The City Council of Dubuque, Iowa.
Date of Meeting: May 4 2015
Time of Meeting: 6 : 30 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 the
meeting is as follows:
• Resolution amending Resolution No. 159-14 approved on May 19, 2014,
relating to the issuance of Sales Tax Increment Revenue Bonds by the City
under the provisions of Chapter 418 of the Code of Iowa, and authorizing
the issuance of $7,190,000 Sales Tax Increment Revenue Bonds (Unlimited
Property Tax Supported), Second Lien Series 2014
Such additional matters as are set forth on the additional 4 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 the governmental body.
City Cler , City of Dubuquowa
May 4,2015
The City Council of Dubuque, Iowa, met in regular session, in the
Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 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, Lynn Sutton
Absent:
Council Member Lynch introduced the following Resolution
entitled "RESOLUTION AMENDING RESOLUTION NO. 159-14 APPROVED ON
MAY 19, 2014, RELATING TO THE ISSUANCE OF SALES TAX INCREMENT
REVENUE BONDS BY THE CITY UNDER THE PROVISIONS OF CHAPTER 418
OF THE CODE OF IOWA, AND AUTHORIZING THE ISSUANCE OF $7,190,000
SALES TAX INCREMENT REVENUE BONDS (UNLIMITED PROPERTY TAX
SUPPORTED), SECOND LIEN SERIES 2014" and moved that it be adopted. Council
Member Jones seconded the motion to adopt, and the roll being called
thereon, the vote was as follows:
AYES: Jones, Braig, Lynch, Sutton
Resnick, Buol, Connors
cul
NAYS:
Whereupon, the Mayor declared said Resolution duly adopted as follows:
RESOLUTION NO. 145-15
RESOLUTION AMENDING RESOLUTION NO. 159-14 APPROVED ON MAY
19, 2014, RELATING TO THE ISSUANCE OF SALES TAX INCREMENT
REVENUE BONDS BY THE CITY UNDER THE PROVISIONS OF CHAPTER
418 OF THE CODE OF IOWA, AND AUTHORIZING THE ISSUANCE OF
$7,190,000 SALES TAX INCREMENT REVENUE BONDS (UNLIMITED
PROPERTY TAX SUPPORTED), SECOND LIEN SERIES 2014
WHEREAS, pursuant to Resolution No. 159-14 approved on May 19, 2014 (the
"Master Bond Resolution"), the City of Dubuque, Iowa ("City") provided for the issuance
of Sales Tax Increment Revenue Bonds by the City under Chapter 418 of the Code of
Iowa, and authorized the issuance of Sales Tax Increment Revenue Bonds (Unlimited
Property Tax Supported), Second Lien Series 2014, dated June 16, 2014, to the extent of
$7,190,000; and
WHEREAS, Section 8.3 of the Master Bond Resolution sets forth the requirements
that must be met before additional Senior Bonds may be issued, certain of which
requirements do not apply in those instances where the proposed Senior Bonds are
secured by a stand-by levy of Debt Service Taxes; and
WHEREAS, the City proposes to issue an additional series of Senior Bonds that
will be secured by a stand-by levy of Debt Service Taxes, subject to non -appropriation in
any fiscal year, and it is considered necessary and appropriate to amend Section 8.3 to
clarify that such a right of non -appropriation is not to be taken into account in
determining whether a series of Senior Bonds is secured by a stand-by levy of Debt
Service Taxes for purposes of Section 8.3; and
WHEREAS, Section 11A of the Master Bond Resolution authorizes the City
Council to amend the Master Bond Resolution without the consent of or notice to any of
the holders of the outstanding Bonds, in order to cure any ambiguity or inconsistent
provision thereof, provided such action does not materially adversely affect the interests
of the holders of the bonds issued under the Master Bond Resolution; and
WHEREAS, it has been determined that the holders of the outstanding Sales Tax
Increment Revenue Bonds (Unlimited Property Tax Supported), Second Lien Series 2014,
as the only series of Bonds outstanding, would not be so affected.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA, AS FOLLOWS:
Section 1. That Section 8.3(b) of the Master Bond Resolution be and is hereby
amended to read as follows:
(b) If the proposed Senior Bonds will not be secured by a stand-by levy of Debt
Service Taxes (disregarding for this purpose any right of non -appropriation that
may apply to the stand-by levy securing such Senior Bonds), (i) the Sales Tax
Increment Revenues collected by the Issuer during the most recently completed
Fiscal Year prior to the issuance of the proposed Senior Bonds were at least equal
to 100% of the annual Debt Service Requirement for such Fiscal Year on all Bonds
then Outstanding, subject, however, to adjustment as described in clause (d), and
(ii) the Issuer shall have received a projection meeting the requirements in clause (
c) below, which projects that the future collections of Sales Tax Increment
Revenues will be at least equal to 100% of the projected Debt Service
Requirements on all Bonds, taking into account all Outstanding Bonds and the
Senior Bonds proposed to be issued.
(new language underscored)
Section 2. All other provisions of the Master Bond Resolution are hereby
ratified, confirmed and approved.
PASSED AND APPROVED this 4th day of May , 2015.
ATTEST:
AcA,
Mayor u-
CERTIFICATE
STATE OF IOWA
) SS
COUNTY OF DUBUQUE
I, the undersigned City Clerk of the City of Dubuque, Iowa, do hereby certify that
attached is a true and complete copy of the portion of the corporate records of the City
showing proceedings of the City 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 (a copy of the face sheet of the agenda being
attached hereto) 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 City hereto affixed this 4th day of
May , 2015.
(SEAL)
01103527-1110422-162
City C rk, Dubuque,Iow