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HomeMy WebLinkAboutORD 86-87 ORDINANCE NO. �- 17 ENTITLED AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF BEAUMONT (THE "CITY" ) AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE PURCHASE AGREEMENT; LEVYING A CONTINUING DIRECT ANNUAL AD VALOREM TAX, WITHIN THE LIMITATIONS PRESCRIBED BY LAW, FOR THE PAYMENT OF LEASE PAYMENTS THEREUNDER; PLEDGING CERTAIN FUNDS, REVENUES AND TAXES TO THE PAYMENT OF THE LEASE OBLIGATIONS; APPROVING THE ASSIGNMENT OF SUCH LEASE PURCHASE AGREEMENT AND THE ISSUANCE OF CERTIFICATES OF PARTICIPATION OR OTHER EVIDENCE OF OWNERSHIP THEREIN THROUGH A TRUST ESTABLISHED BY THE LESSOR OR OTHERWISE; AND RESOLVING OTHER MATTERS INCIDENT AND RELATED THERETO; PROVIDING FOR SEVE RABILITY AND PROVIDING FOR REPEAL. WHEREAS, the City Council of the City of Beaumont ( the "City Council") has determined that it is necessary to provide for the use, acquisition and purchase of certain personal property on behalf of the City; and, WHEREAS, in order to facilitate the acquisition of such property by a corporation, as lessor (the "Lessor" ) and to lease such property, with an option to purchase such property during and at the end of the lease term for each item of property, at a cost that is advantageous to the City, the City Council has determined that it is desirable to enter into a Lease Purchase Agreement to provide for the financing and refinancing of such property and approve the assignment of such Lease Purchase Agreement and the issuance of Certificates of Participation or other evidence of ownership therein (the "Certificates" ) through a trust established by the Lessor or otherwise as further described below; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT : Section 1 . Findings . That it is hereby found and determined that: (a) all of the property to be acquired under the Lease is personal property and during the term of the Lease is to remain personal property; (b) the Lease, including its form as a lease purchase obligation, and the terms and conditions thereof, are deemed to be appropriate by this City Council; (c) the contractual obligation of the Lease and the Certificates should be made payable from revenues, funds, and taxes available to the City for its public purposes, as permitted by Section 4(a) of the Public Property Finance Act, Article 2368a.2, V.A.T. C .S . ( the "Act" ) . Section 2 . Execution and Delivery of Lease. (a) the duly authorized officer of the City listed in paragraph (b) hereof is hereby authorized to execute and deliver the Lease Purchase Agreement substantially in the form attached hereto as Exhibit "A" , to be dated as of August 1 , 1986, in order to facilitate the use, acquisition, and purchase of the equipment described in Exhibit "B" hereto, and certain other property to be specified during the term of the Lease, all as authorized pursuant to the Act; (b) the officer authorized to perform the duties described in paragraph ( a) hereof is: Name Title (i) Albert E. Haines City Manager Section 3 . Consent to Assignment; Creation of Trust; Issuance of Certificates. The City Council hereby consents to the assignment by the Lessor of its rights under the Lease to a trustee ( the "Trustee" ) under terms of a trust agreement ( the "Trust Agreement" ) and the creation of a trust and the issuance of the Certificates in the aggregate principal amount necessary to provide for the purchase of 2 - the equipment described in Exhibit "B" hereto and to provide for a reasonable reserve fund and costs of issuance. Proceeds of the Certificates shall be deposited in the acquisition fund (the "Acquisition Fund") created pursuant to such Trust Agreement and invested for and on behalf of the City by the Trustee until applied to purchase equipment pursuant to the Lease. Section 4 . Limited Obligations. Notwithstanding any other provision of this resolution, Lease Payments under the Lease and payments on the Certificates shall be special, limited obligations of the City, payable solely from (i) moneys deposited from proceeds of the Certificates in the Acquisition Fund established and maintained by the Trustee, and earnings thereon, if any , and ( ii) the obligation of the City to make other Lease Payments under the Lease, which obligations shall be incurred only after and to the extent that moneys have been disbursed from the Acquisition Fund to purchase equipment, as defined in the Lease. Section 5 . Levy of Taxes. To provide for the payment of the Lease Payments under and as defined in the Lease, there is hereby levied, out of the tax legally available for the lease/purchase, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property within the boundaries of the City, within the limitations prescribed by law, and such tax shall be and is hereby levied on each one hundred dollars ($100) valuation of taxable property within the boundaries of the City at a rate from year to year as will be ample and sufficient to provide funds each year to pay the Lease Payments as the same become due during the term of the Lease, full allowance being made for delinquencies and cost of collection. Separate accounts and tax records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Lease shall be kept and maintained by the City at all times during the term of the Lease, and the taxes collected for the payment of the Lease Payments shall be deposited to the credit of a "Special 1986 Lease Account" maintained on the records of the City, and deposited in a special fund maintained at an official depository of the City' s funds; and such tax hereby levied, and to be assessed and collected annually is hereby pledged to the payment of the Lease Payments. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Trustee or paying agent 3 - for the Certificates appointed by the Lessor, from funds on deposit in the Special 1986 Lease Account, amounts sufficient to fully pay and discharge promptly the Lease Payments as the same become due and payable; such transfers of funds to be made in such manner as will- cause collected funds to be deposited with the Trustee on or before each Lease Payment Date for the Certificates, as provided in the Lease. The amount of taxes to be provided annually for the payment of the Lease Payments with respect to the Base Rent ( as defined in the Lease) including the principal component and interest component thereof ( "Debt Service Requirements" ) shall be determined and accomplished in the following manner: (a) prior to the date this City Council establishes the annual tax rate and passes an ordinance levying ad valorem taxes each year, the City Council shall determine: (1 ) The amount on deposit under the Trust Agreement to pay principal and interest components of the Certificates after ( a) deducting therefrom the total amount of Debt Service Requirements to become due as Base Rent prior to the date annual ad valorem taxes levied by the City become delinquent ( the "Collection Date" ) and (b) adding thereto the amount of the other revenue and funds appropriated and allocated to pay such Debt Service Requirements prior to the Collection Date for the ad- valorem taxes to be levied. (2 ) The amount of other revenue and funds appropriated and to be set aside for the payment of the Debt Service Requirements between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (3 ) The amount of Debt Service Requirements to become due and payable between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (b) The amount of taxes to .be levied annually each year to pay the Debt Service Requirements shall be the amount established in paragraph ( 3 ) above less the sum total of the amounts established in paragraphs ( 1 ) and (2 ) , after taking into consideration delinquencies and costs of collecting such annual taxes. With respect to the amount due as Additional Rent (as defined in the Lease) , the amount budgeted for such purposes shall be the amount anticipated to become due during the Fiscal Year following, plus any amount of Lease Payments remaining unpaid from the previous year. 4 - The City covenants that, in accordance with the provisions of the Property Tax Code, Section 26.04(g) , any amounts budgeted to pay the Lease Payments which are due more than one year from the date of the Lease will be set aside in the tax levy for the payment of such Lease Payments. Section 6 . Pledge. The City hereby covenants and agrees that all the funds and revenues which are legally available for the purpose, with the exception of those in excess of the amounts required to be deposited to the Special 1986 Lease Account, are hereby irrevocably pledged to the payment of the Lease Payments, and the pledge of such funds and revenues herein made for the payment of the Lease Payments shall constitute a lien on such funds and revenues in accordance with the terms and provisions hereof and be valid and binding without any physical delivery thereof or further act by the City. Section 7 . Lease and Purchase of Equipment. On the date hereof, the City reasonably expects to proceed with due diligence to lease/purchase the Equipment described on Exhibit "B" hereto within three (3 ) years of the date hereof and to lease/purchase other equipment to be identified during the term of the lease. However, it is expressly understood that the City shall not be required to apply for the disbursement of moneys from the Acquisition Fund for the lease and purchase of equipment unless and until : ( i) the interest rate component of the Base Rent shall have been determined and shall be acceptable to the City; (ii) the City shall have received approval of the Credit provider, as defined in the Lease; ( iii) the amount of Costs of Issuance to be included in the equipment Costs (as defined in the Lease) shall be acceptable to the City; (iv) the need for the Equipment by the City exists at the time of such disbursement; (v) the equipment is available at a reasonable cost and, of applicable, acceptable bids for the sale and purchase of the equipment are received; and 5 - ( vi) the City Council approves the purchase of the equipment and the execution and delivery of documents required in connection with the lease and purchase thereof. Section 8 . Delivery of Certificates. The duly authorized officer of the City is hereby authorized to execute and deliver the Lease and other instruments and certificates as may be reasonably required in connection with the sale and purchase of the Certificates and to consent to such changes in the terms of the Lease as may be reasonably necessary in connection with such delivery; execution and delivery of the Lease with any such changes by officer of the City shall constitute evidence of the approval by the City Council thereof. Section 9 . Open Meeting. It is hereby found and determined that advance notice of the time, place and purpose of the meeting was given to each member of the City Council; and that said meeting, and deliberation of the aforesaid public business, was open to the public, and written notice of said meeting, including the subject of the entitled resolution, was posted and given in advance thereof in compliance with the provisions of Article 6252-17, Section 3A, V.A.T. C.S. Section 10. Effective Date. This resolution shall be in force and effect from and after its passage on the date shown below. PASSED BY THE CITY COUNCIL of the City of Beaumont this the _Z,2,&&1 day of ,. 1986. Mayor - 6 - Q �e,2