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HomeMy WebLinkAbout96-956 08-27-1996RESOLUTION NO. 96 -956 A RESOLUTION by the City Council of the City of Euless, Texas, relating to the "Euless Development Corporation Sales Tax Revenue Bonds, Series 1996 "; approving (i) the resolution of the Board of Directors of the Euless Development Corporation authorizing the issuance of such Bonds and (ii) the execution, on behalf of the City, of the Financing /Use Agreement relating to such financing by the Euless Development Corporation; resolving other matters incident and related to the issuance of such Bonds; and providing an effective date. WHEREAS, Euless Development Corporation (the "Issuer ") has been duly created and organized pursuant to the provisions of Section 4B of the Development Corporation Act of 1979, Article 5190.6, Vernon's Texas Civil Statutes, as amended (the "Act "); and WHEREAS, pursuant to the Act, the Issuer is empowered to issue bonds for the purpose of defraying the cost of any "project" defined as such by the Act; and WHEREAS, the Act defines "project" to include land, buildings, equipment, facilities, and improvements found by the Board of Directors of the Issuer to be required or suitable for use for amateur (including children's) sports, athletic, entertainment and public park purposes and events or promote or develop new and expanded business enterprises; and WHEREAS, the Board of Directors of the Issuer has found and determined that the construction and equipment of a project to be owned and operated by the City of Euless, Texas, known as The Parks At Texas Star and involving the development of approximately 300 acres of land into a recreation complex, including, but not limited to, baseball fields, soccer fields, sand volleyball court, a driving range, fishing pier, walking trails, an amphitheater and a clubhouse (the "Project "), constitutes a project within the meaning of the Act and the costs of constructing and equipping such Project should be financed from the proceeds of sale of $1,485,000 "Euless Development Corporation Sales Tax Revenue Bonds, Series 1996" (the "Bonds "); and WHEREAS, Section 25(f) of the Act requires the City Council of the City approve the resolution of the Issuer providing for the issuance of the Bonds no more than sixty (60) days prior to the delivery of the Bonds; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EULESS, TEXAS: 0358372 Section 1: The Resolution authorizing the issuance of $1,485,000 "Euless Development Corporation Sales Tax Revenue Bonds, Series 1996 ", adopted by the Issuer (the "Issuer Resolution ") on August 27, 1996, and submitted to the City Council this day, is hereby approved in all respects. The Bonds are being issued to finance the costs of constructing and equipping the Project, which is located within the City of Euless, and the City agrees that upon receipt of the proceeds of sale of the Bonds from the Issuer, the City will construct the Project and thereafter be responsible for the upkeep, maintenance and use of the Project. Section 2: The approvals herein given are in accordance with Section 25(f) of the Act, and the Bonds shall never be construed an indebtedness or pledge of the City, or the State of Texas (the "State "), within the meaning of any constitutional or statutory provision, and the owner of the Bonds shall never be paid in whole or in part out of any funds raised or to be raised by taxation (other than sales tax proceeds as authorized pursuant to Section 4B of the Act) or any other revenues of the Issuer, the City, or the State, except those revenues assigned and pledged by the Issuer Resolution. Section 3: The City hereby agrees to promptly collect and remit to the Issuer the Gross Sales Tax Revenues (as defined in the Issuer Resolution) in accordance with the terms of the Issuer Resolution and the Act to provide for the prompt payment of the Bonds, and to assist and cooperate with the Issuer in the enforcement and collection of sales and use taxes imposed on behalf of the Issuer. Section 4: The Financing /Use Agreement by and between the City and the Issuer in relation to the Projects, attached hereto as Exhibit A and incorporated by reference as a part of this resolution for all purposes, with respect to the obligations of the City and Issuer during the time the Bonds are outstanding, is hereby approved as to form and substance and the Mayor and the City Secretary are hereby authorized to execute and deliver such agreement for and on behalf of the City and as the act and deed of this City Council. Furthermore, the Mayor and the City Secretary and the other officers of the City are hereby authorized, jointly and severally, to execute and deliver such endorsements, instruments, certificates, documents, or papers necessary and advisable to carry out the intent and purposes of this Resolution. Section 5: The City hereby acknowledges and recognizes that the Bonds are being issued as tax exempt obligations under and pursuant to section 103(a) of the Code (as defined below) and the proceeds of sale of such Bonds are to be deposited with the City following their receipt by the Issuer and the City shall have full control and responsibility with respect to the construction of the 0358372 -2- Projects and the investment and disbursement of the proceeds of sale of the Bonds. Therefore, as a result of the foregoing, the City hereby makes the following representations and warranties to the Issuer: (a) Definitions. When used in this Section, the following terms have the following meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. 0358372 "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148 -1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148 -1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148 -5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148 -4 of the Regulations. -3- (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such 0358372 -4- Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Payment of Rebatable Arbitrage. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The 0358372 -5- City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall remit to the Issuer for payment to the United States the amount described in paragraph (3) above and the amount described in paragraph (4) below, at the times, in the manner and accompanied by such forms or other information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraph (2), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including the amount remitted to the Issuer for payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148 -3(h) of the Regulations. Section 6: It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. Section 7: This Resolution shall be in force and effect from and after its passage on the date shown below. PASSED AND ADOPTED, this August 27, 1996. ATTEST: Of Secr ary .y (City Seal) CITY OF EULESS, TEXAS -elitrfA;t0111-e-t-OG Mayor :EXHIBIT A ■ FINANCING /USE AGREEMENT This Financing /Use Agreement (this "Agreement') is made to be effective as of the 27th day of August, 1996, by and between the City of Euless, Texas, a duly incorporated and existing municipal corporation and political subdivision of the State of Texas (the "City ") and the Euless Development Corporation, a non - profit industrial development corporation organized and existing under the laws of the State of Texas, including Vernon's Ann. Civ. St., Section 4B of Article 5190.6, (the "Corporation ") R E C I T A L S WHEREAS, the Corporation on behalf of the City is to finance the construction and equipment of a project to be owned and operated by the City of Euless, Texas, known as The Parks At Texas Star, that involves the development of approximately 300 acres of land into a recreation complex, including, but not limited to, baseball fields, soccer fields, sand volleyball court, a driving range, fishing pier, walking trails, an amphitheater and a clubhouse (the "Project "); and WHEREAS, such financing contemplates the issuance and sale of the Corporation's tax exempt bonds in the principal amount of $1,485,000, and the proceeds of sale are to be used by the City to design and construct the Project; and WHEREAS, the City will have full responsibility for the design, construction and operation of the Project and the Corporation's only undertaking with respect to the Project pertains to financing a portion of the costs of constructing and equipping the same and paying a portion of its maintenance and operating costs as permitted by law; A G R E E M E N T 1. Financing of Project: For and in consideration of the City's covenants and agreements herein contained and subject to the terms contained herein, the Corporation hereby agrees to issue and sale a series of obligations to be known as "Euless Development Corporation Sales Tax Revenue Bonds, Series 1996 ", hereinafter called the "Bonds ", and deposit the proceeds of sale of the Bonds to a construction fund or account to be designated by the City and the City hereby agrees and covenants that all proceeds of sale deposited to the credit of such construction account shall be used solely to pay the costs of the Project. 03M393 2. Use of Project. Until all the Bonds have been fully paid, discharged and retired, the upkeep and maintenance of the Project will be the responsibility of the City, and except to provide funds budgeted by the Corporation for the payment of its maintenance and operating costs while the Project is owned and maintained by the City, the Corporation shall have no responsibility with respect to the operation, upkeep and maintenance of the Project . 3. Recognition of Tax Exempt Financing. The City hereby acknowledges and recognizes that the Bonds are being issued as "state or local bonds" under and pursuant to section 103(a) of the Internal Revenue Code of 1986, as amended, and the City hereby covenants and agrees with respect to the use of proceeds of sale of the Bonds and the use of the Project as follows: (a) Definitions. When used in this Section, the following terms have the following meanings: 0358393 "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148 -1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148 -1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount" has the meaning set forth in Section 1.148 -1(b) of the Regulations. EXHIBIT A -2- "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148 -5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148 -4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: 0358393 (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and GXH6tA I -3- (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. 0358393 EXHIBIT k • -4- (g) Payment of Rebatable Arbitrage. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: 0958393 (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the use of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall remit to the Corporation for payment to the United States the amount described in paragraph (g)(2) above and the amount described in paragraph (g)(4) below, at the times, in the manner and accompanied by such forms or other information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraph (g)(2), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including the amount remitted to the Corporation for payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148 -3(h) of the Regulations. EXHIBIT A -5- 4. Receipt and Transfer of Proceeds of Sales Tax. The City agrees, in cooperation with the Corporation, to take such actions as are required to cause the "Gross Sales Tax Revenues" (as such term is defined in the resolution authorizing the issuance of the Bonds) received from the Comptroller of Public Accounts of the State of Texas for and on behalf of the Corporation to be transferred and deposited immediately upon receipt by the City to the credit of the banking or monetary fund maintained at the depository designated by the Corporation and known on the books and records of the Corporation as the "Pledged Revenue Fund ". 5. Compliance with SEC Rule 15c2 -12. In consideration for financing the Project, the City agrees to assist and file on behalf of the Corporation updated financial information and operating data pertaining the Corporation and otherwise comply with the undertaking of the Corporation described in the Official Statement pertaining to the issuance of the Bonds and in Section 43 of the Resolution authorizing the issuance of the Bonds. 6. Modifications. This Agreement shall not be changed orally, and no executory agreement shall be effective to waive, change, modify or discharge this Agreement in whole or in part unless such executory agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought. 7. Entire Agreement. This Agreement, including the Exhibits, contains the entire agreement between the parties pertaining to the subject matter hereof and fully supersedes all prior agreements and understandings between the parties pertaining to such subject matter. 8. Counterparts. This Agreement may be executed in several counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart in proving this Agreement. 9. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect. 10. Applicable Law. This Agreement shall in all respects be governed by, and construed in accordance with, the substantive federal laws of the United States and the laws of the State of Texas. 0358393 EXHIBIT A -6- 11. Captions. The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date and year first above written. EULE8S DEVELOPMENT CORPORATION ATTEST: President Secretary (Corporation Seal) CITY OF EULESS, TEXAS ATTEST: Mayor City Secretary (City Seal) EXHIBIT A -7- THE STATE OF TEXAS COUNTY OF TARRANT CITY OF EULESS CERTIFICATE OF CITY SECRETARY s I, the undersigned, City Secretary of the City of Euless, Texas, DO HEREBY CERTIFY as follows: 1. On the 27th day of August, 1996, a regular meeting of the City Council of the City of Euless, Texas was held at the City Hall; the duly constituted members of the Council being as follows: MARY LIB SALEH MAYOR BOBBY BAKER CARL TYSON LEON HOGG CHARLES MILLER GLENN WALKER KATIE EDWARDS MAYOR PRO TEM COUNCILMEMBERS and all of said councilmembers were present at said meeting, except the following: none . Among other business considered at said meeting, the attached resolution entitled: "A RESOLUTION by the City Council of the City of Euless, Texas, relating to the 'Euless Development Corporation Sales Tax Revenue Bonds, Series 1996'; approving (i) the resolution of the Board of Directors of the Euless Development Corporation authorizing the issuance of such Bonds and (ii) the execution, on behalf of the City, of the Financing /Use Agreement relating to such financing by the Euless Development Corporation; resolving other matters incident and related to the issuance, sale and delivery of such Bonds; and providing an effective date." was introduced and submitted to the Council for passage and adoption. After presentation and due consideration of the resolution and, upon a motion made by Councilmember Bobby Baker and seconded by Councilmember Leon Hogg , the resolution was duly passed and adopted by the Council to be effective immediately by the following vote: 7 voted "For" 0 voted "Against" 0 abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 2. The attached resolution is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meeting are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of the meeting was given to each member of the Council; and that said meeting, and the deliberation of the aforesaid public business, was open to the public and written notice of said meeting, including the subject of the above entitled resolution, was posted and given in advance thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551, as amended. IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 27th day of August, 1996. I4, C ' Secreta , City o' Euless, Texas (City Seal)