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HomeMy WebLinkAbout99-1041 10-26-1999RESOLUTION NO. 99-1041 A RESOLUTION by the City Council of the City of Euless, Texas, relating to the "Euless Development Corporation Sales Tax Revenue Bonds, Series 1999"; 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, Construction, and 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 park improvements at The Parks At Texas Star, including irrigation, landscaping, and the construction of an entry way and parking facilities (the "Project"), constitutes a project within the meaning of the Act and the costs of such Project should be financed from the proceeds of sale of $1,000,000 "Euless Development Corporation Sales Tax Revenue Bonds, Series 1999" (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: Section 1: The Resolution authorizing the issuance of $1,000,000 "Euless Development Corporation Sales Tax Revenue Bonds, Series 1999 ", adopted by the Issuer (the "Issuer Resolution ") on October 26, 1999, and submitted to the City Council this day, is hereby approved in all respects. The Bonds are being issued to finance the costs of the Project, which is located within the City of Euless, and the City agrees that upon construction of the Project by the Corporation, the City shall 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 as 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 799957 (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, Construction, and 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 that the City shall be responsible for the upkeep, maintenance and use of the Project. 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: 799957 "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. -2- "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. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use 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: 799957 (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 -3- 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) No Rebate Required. Pursuant to Section 148(f)(4)(D)(iv) of the Code and for the calendar year 1999, the City has irrevocably allocated to the Corporation $1,000,000 of its $5,000,000 limitation under Section 148(f)(4)(D)(i)(IV) and declared the $1,000,000 so allocated to the Corporation to bear a reasonable relationship to the benefits received by the City from the Bonds. Therefore, the City and the Corporation warrant and represent that they satisfy the requirements of paragraph (2) and (3) of section 148(0 of the Code with respect to the Bonds without making the payments for the United States described in such section. Specifically, the City and the Corporation warrants and represents that: (1) the City is a governmental unit with general taxing powers, the Corporation is a subordinate entity of the City and for the calendar year 1999, the City has irrevocably allocated $1,000,000 of its $5,000,000 limitation to the Corporation; (2) at least 95% of the net proceeds of the Bonds will be used for the local governmental activities of the City; (3) the aggregate face amount of all tax - exempt obligations issued or expected to be issued by the City (and all subordinate entities thereof) in the calendar year 1999 is not reasonably expected to exceed $5,000,000. PROVIDED, HOWEVER, should additional tax exempt obligations be issued or incurred, including lease purchase financings, in the 1999 calendar year which would cause the total face amount of tax exempt obligations issued and incurred by the City and the Corporation in such calendar year to exceed $5,000,000, the City agrees and covenants that it will maintain complete records regarding the investments of the proceeds of sale of the Bonds and remit to the Corporation any "arbitrage profits" to be rebated to the United States as required by Section 148(0 of the Code. 799957 -4- 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. 799957 (The Remainder of Page Intentionally Left Blank] -5- PASSED AND ADOPTED, this October 26, 1999. CITY OF EULESS, TEXAS L7 La, Mayor ATTEST: (City Seal) FINANCING, CONSTRUCTION, AND USE AGREEMENT This Financing, Construction, and Use Agreement (this "Agreement') is made to be effective as of the 26th day of October, 1999, 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 "). RECITALS WHEREAS, the Corporation on behalf of the City is to finance park improvements at The Parks At Texas Star, including irrigation, landscaping, and the construction of an entry way and parking facilities (the "Project ");and, WHEREAS, such financing contemplates the issuance and sale of the Corporation's tax exempt bonds in the principal amount of $1,000,000, and the proceeds of sale are to be used by the Corporation to design and construct the Project; and WHEREAS, the Corporation, subject to the plans and specifications approved by the City, will have full responsibility for the design, construction, and financing of the Project; AGREEMENT 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 sell a series of obligations to be known as "Euless Development Corporation Sales Tax Revenue Bonds, Series 1999 ", hereinafter called the "Bonds ", and expend the proceeds of sale of the Bonds to construct the Project. 2. Location of Project. The City and the Corporation acknowledge and agree that the Project is to be constructed on property owned by the City (the "Property"). 3. Construction of Proiect. In accordance with the plans and specifications approved by the City, the Corporation shall (subject to delays caused by force majeure) commence construction within a reasonable time after the date of the receipt of proceeds from the sale of the Bonds. The Corporation and City agree, that any Corporation representative, any architect, and any contractor or subcontractor selected by the Corporation shall have the right of access to the Property at all reasonable times to permit the Corporation to carry out its obligations under this Agreement to design and construct the Project. 4. Use. 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 . 799959 LIMIT A m 5. Ownership of the Proiect. Upon completion of the construction of the Project by the Corporation, ownership of the Project, by operation of law, shall become vested in the City, as fee simple owner of the improvements. 6. 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 the Project as follows: (a) Definitions. When used in this Section, the following terms have the following meanings: 799959 "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 govemmental 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. -2- (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use 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 govemment, 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 eamed 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 govemment. 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) No Rebate Reouired. Pursuant to Section 148(f)(4)(D)(iv) of the Code and for the calendar year 1999, the City has irrevocably allocated to the Corporation $1,000,000 of its $5,000,000 limitation under Section 148(f)(4)(D)(i)(IV) and declared the $1,000,000 so allocated to 799959 -3- the Corporation to bear a reasonable relationship to the benefits received by the City from the Bonds. Therefore, the City and the Corporation warrant and represent that they satisfy the requirements of paragraph (2) and (3) of section 148(0 of the Code with respect to the Bonds without making the payments for the United States described in such section. Specifically, the City and the Corporation warrants and represents that: (1) the City is a governmental unit with general taxing powers, the Corporation is a subordinate entity of the City and for the calendar year 1999, the City has irrevocably allocated $1,000,000 of its $5,000,000 limitation to the Corporation; (2) at least 95% of the net proceeds of the Bonds will be used for the local govemmental activities of the City; (3) the aggregate face amount of all tax - exempt obligations issued or expected to be issued by the City (and all subordinate entities thereof) in the calendar year 1999 is not reasonably expected to exceed $5,000,000. PROVIDED, HOWEVER, should additional tax exempt obligations be issued or incurred, including lease purchase financings, in the 1999 calendar year which would cause the total face amount of tax exempt obligations issued and incurred by the City and the Corporation in such calendar year to exceed $5,000,000, the City agrees and covenants that it will maintain complete records regarding the investments of the proceeds of sale of the Bonds and remit to the Corporation any "arbitrage profits" to be rebated to the United States as required by Section 148(0 of the Code. 7. 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 ". 8. 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. 9. 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. 10. 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. 11. 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. 12. 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. 13. Applicable Law. This Agreement shall in all respects be govemed by, and construed in accordance with, the substantive federal laws of the United States and the laws of the State of Texas. 799969 [Remainder of Page Intentionally Left Blank] -5- 14. 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. ATTEST: Secretary (Corporation Seal) ATTEST: City Secretary (City Seal) 799969 EULESS DEVELOPMENT CORPORATION President CITY OF EULESS, TEXAS Mayor -6- CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS COUNTY OF TARRANT CITY OF EULESS I, the undersigned, City Secretary of the City of Euless, Texas, DO HEREBY CERTIFY as follows: 1. On the 26th day of October, 1999, 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 CHARLES MILLER BOBBY BAKER CARL TYSON LEON HOGG GLENN PORTERFIELD KATIE EDWARDS MAYOR MAYOR PRO TEM COUNCILMEMBERS and all of said councilmembers were present at said meeting, except the following: Bobby Baker 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 1999 "; 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, Construction, and 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. 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 Hogg and seconded by Councilmember tvt; 1 1 Pr , the resolution was duly passed and adopted by the Council to be effective immediately by the following vote: 6 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. 802828 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 26th day of October, 1999. CI ecretary, ty of Euless, Texas (City Seal) -...?Al..//9"---