You are here: Home Government Board of Commissioners Agenda Board of Commissioners Meetings 1999 January 20, 1999 COUNTY ADMINISTRATOR

COUNTY ADMINISTRATOR

220 NORTH MAIN STREET

P.O. BOX 8645

ANN ARBOR, MICHIGAN 48107-8645

(734)996-3055

FAX (734)994-2592

Al Robinson, Chair

Robert E. Guenzel

Daniel R. Myers, P.E.

 

ACTION REQUESTED

Approval of the attached resolution amending a previous resolution to authorize the issuance of not to exceed $1,100,000 Washtenaw County Sewage Disposal System refunding bonds. Consideration of this resolution by the full Board of Commissioners is also requested on January 20.

BACKGROUND

In September of 1998 the Board of Commissioners approved a bond resolution to allow for the advanced refunding of bonds originally issued in 1978 to assist the City of Ypsilanti and the Township of Ypsilanti in the construction of improvements to their sewage disposal system.

The original bond resolution allowed for the reduction of the bond sale by up to $200,000. Because interest rates have continued to decline since the bond resolution was originally passed it may be necessary to reduce the bond sale by more than this amount.

 

DISCUSSION

This resolution will modify Section 4 of the original bond resolution authorizing the refunding of bonds. The modification allows for a $300,000 decrease in the originally anticipated bond sale of $1,100,000 rather than a $200,000 decrease. This change is required because interest rates have continued to decline since approval of the original resolution and a bond sale of approximately $880,000 is now anticipated. At current interest rates a savings of approximately $80,000 is estimated by proceeding with this advanced refunding bond sale.

It would be beneficial if the Board of Commissioners could consider this resolution at both the Ways and Means Committee and full Board of Commissioners meeting on January 20, 1999.

IMPACT ON PERSONNEL

There will be no impact on personnel.

IMPACT ON BUDGET

There will be no impact on the County's general fund budget. All costs associated with this bond sale, including County staff time, will be reimbursed.

IMPACT ON INDIRECT COSTS

There will be no impact on indirect costs.

IMPACT ON OTHER COUNTY DEPARTMENTS OR OUTSIDE AGENCIES

There will be no impacts on other County departments or outside agencies. The residents utilizing the YCUA treatment facility will have to pay less interest over the life of this bond issue.

CONFORMITY TO COUNTY POLICIES

This resolution has been prepared by the County's Bond Counsel, John Axe and has been reviewed by County Administration, Finance, Corporation Counsel and the Board of Public Works. This action is in conformance with County policies.

 

COUNTY OF WASHTENAW

BOARD OF COMMISSIONERS

 

At a __________ meeting of the Board of Commissioners of the County of Washtenaw held in the Washtenaw County Administration Building in the City of Ann Arbor, Michigan on the _____ day of __________ 1999, at __:__ _.m. Eastern Standard Time there were:

 

PRESENT: _______________________________________________________

_______________________________________________________

_______________________________________________________

ABSENT: _______________________________________________________

The following preamble and resolution were offered by Commissioner _______________ and supported by Commissioner _______________.

 

 

AMENDMENT TO RESOLUTION TO AUTHORIZE THE ISSUANCE

OF NOT TO EXCEED $1,100,000

WASHTENAW COUNTY SEWAGE DISPOSAL SYSTEM NO. 8

(YPSILANTI AREA) REFUNDING BONDS, SERIES II

 

WHEREAS, pursuant to the provisions of Act No. 185, Public Acts of Michigan, 1957, as amended, the Township of Ypsilanti (the "Township"), the City of Ypsilanti (the "City") and the County of Washtenaw (the "County") have entered into a contract governing the Washtenaw County Sewage Disposal System No. 8 pursuant to which the Washtenaw County Sewage Disposal System No. 8 (Ypsilanti Area) Bonds, Series II were issued dated as of November 1, 1978 (the "Prior Bonds"), in the original principal amount of $1,900,000 to defray the cost of acquiring and constructing part of the System; and

WHEREAS, the Prior Bonds remain outstanding in the aggregate principal amount of $950,000 maturing in various principal amounts on May 1 in the years 1999 through 2007 and bear interest at rates of 6.00% through 6.40%; and

WHEREAS, Chapter VI of Act No. 202, Public Acts of Michigan, 1943, as amended ("Act 202"), authorizes the County to refund all or any part of its funded indebtedness; and

WHEREAS, the County, the Township and the City have determined that a significant cost savings can be achieved by refunding the outstanding Prior Bonds maturing in the years 2000 through 2007; and

WHEREAS, the Board of Public Works and this Board of Commissioners of the County of Washtenaw have approved the refunding of the Prior Bonds maturing in the years 2000 through 2007; and

WHEREAS, it is necessary to amend Section 4 of the Resolution Authorizing the Issuance of the Refunding Bonds adopted by this Board of Commissioners on September 2, 1998 in order to allow for a greater decrease in the amount of refunding bonds to be issued.

 

NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:

A. Section 4 of the Resolution adopted by the Board of Commissioners on September 2, 1998 is amended to read as follows: "4. DECREASE IN AGGREGATE AMOUNT OF REFUNDING BONDS. In the event the amount necessary to refund the Prior Bonds shall be less than $1,100,000, the Director or Chairman shall decrease the principal amount of the Refunding Bonds by up to $300,000, to the extent required to avoid the issuance of more Refunding Bonds than will be required in light of the amount of Refunding Bonds to be issued and bids received, which decrease may be applied to any one or more of the maturities and the Notice of Sale attached as EXHIBIT B shall so provide or be changed accordingly. In the event the Township of the City determines to contribute additional amounts toward the refunding of the bonds, the bonds shall further be reduced by the amount of such contribution."

 B. All resolutions and parts of resolutions insofar as they may be in conflict herewith are hereby rescinded.

A vote on the foregoing resolution was taken and was as follows:

 

 

YEAS: _______________________________________________________

______________________________________________________

NAYS: _______________________________________________________

ABSENT: _______________________________________________________

 

RESOLUTION ADOPTED.

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STATE OF MICHIGAN)

) SS

COUNTY OF WASHTENAW)

 

 

The undersigned, being the duly qualified and acting Clerk of the County of Washtenaw, Michigan, hereby certifies that (1) the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the County at a _________ meeting held on _______________, 1999 at which meeting a quorum was present and remained throughout; (2) the original thereof is on file in the records of the proceedings of the County in my office; (3) the meeting was conducted, and public notice thereof was given, pursuant to and in full compliance with the Open Meetings Act (Act No. 267, Public Acts of Michigan, 1976, as amended); and (4) minutes of such meeting were kept and will be or have been made available as required thereby.

 

 

 

______________________________

County Clerk

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EXHIBIT B

  

OFFICIAL NOTICE OF SALE

$880,000*

WASHTENAW COUNTY SEWAGE DISPOSAL SYSTEM NO. 8 (YPSILANTI AREA) REFUNDING BONDS, SERIES II (UNLIMITED TAX)

County of Washtenaw, State of Michigan

*Subject to Change.

SEALED BIDS: Sealed bids for the purchase of the bonds described herein (the "Refunding Bonds") will be received by the undersigned for and on behalf of the County of Washtenaw, Michigan (the "County"), acting by and through its Board of Public Works at the Office of the Director of the Department of Public Works of the County of Washtenaw, 110 N. 4th Ave., 2nd Floor, Ann Arbor, Michigan 48107-8645, on January 19, 1999 until 11:00 a.m., Eastern Standard Time, at which time and place said bids will be publicly opened and read.

In the alternative, sealed bids will also be received on the same date and until the same time by an agent of the undersigned at the offices of Bendzinski & Co., Municipal Finance Advisors, One Kennedy Square, Suite 2130, Detroit, Michigan 48226-3333, where they will be publicly opened simultaneously. Bids received at Ann Arbor, Michigan will be read first, followed by the bids received at the alternate location. Bidders may choose either location to present bids and good faith checks, but not both locations. Any bidder may submit a bid in person to either bidding location. However, no bidder is authorized to submit a FAX bid to Ann Arbor, Michigan.

The Refunding Bonds will be awarded or all bids will be rejected by the Board of Public Works at a meeting to be held within twenty-four hours of the sale.

BOND DETAILS: The Refunding Bonds will be dated February 1, 1999 and will be known as the "Washtenaw County Sewage Disposal System No. 8 (Ypsilanti Area) Refunding Bonds, Series II (Unlimited Tax)". The Refunding Bonds will be fully registered Refunding Bonds in any one or more denominations of $5,000 or a multiple of $5,000, numbered from 1 upwards and will bear interest from their date payable November 1, 1999 and semi-annually thereafter until maturity. The Refunding Bonds will mature on the 1st day of May in each year as follows:

YEAR PRINCIPAL YEAR PRINCIPAL YEAR PRINCIPAL

2000 $80,000 2003 $ 80,000 2006 $150,000

2001 80,000 2004 100,000 2007 185,000

2002 80,000 2005 125,000

 

PRIOR REDEMPTION: The Refunding Bonds shall not be subject to redemption prior to maturity.

INTEREST RATE AND BIDDING DETAILS: The Refunding Bonds shall bear interest at a rate or rates not exceeding 6% per annum, to be fixed by the bids therefor, expressed in multiples of 1/8 or 1/20 of 1%, or both. The interest on any one bond shall be at one rate only. All bonds maturing in any one year must carry the same interest rate. The difference between the highest and lowest rates bid shall not exceed 1%. No proposal for the purchase of less than all of the Refunding Bonds, at a price less than 99% of their par value or at an interest rate or rates that will result in a net interest cost exceeding 6%, will be considered.

BOOK-ENTRY-ONLY: The Refunding Bonds will be issued in book-entry-only form as one fully-registered bond per maturity and will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the Refunding Bonds. Purchase of the Refunding Bonds will be made in book-entry-only form, in the denomination of $5,000 or any multiple thereof. Purchasers will not receive certificates representing their interest in Refunding Bonds purchased.

BOND REGISTRAR, PAYING AGENT AND DATE OF RECORD: Michigan National Bank, Farmington Hills, Michigan has been selected as paying agent and bond registrar (the "Bond Registrar") for the Refunding Bonds. The Bond Registrar will keep records of the registered holders of the Refunding Bonds, serve as transfer agent for the Refunding Bonds, authenticate the original and any re-issued refunding bonds and pay interest by check or draft mailed to the registered holders of the Refunding Bonds as shown on the registration books of the County kept by the Bond Registrar on the applicable date of record. The date of record for each interest payment shall be the 15th day of the month before such payment is due. The principal of and redemption premium, if any, on the Refunding Bonds will be paid when due upon presentation and surrender thereof to the Bond Registrar. As long as DTC, or its nominee Cede & Co., is the registered owner of the Refunding Bonds, payments will be made directly to such registered owner. Disbursement of such payments to DTC participants is the responsibility of DTC and disbursement of such payments to the beneficial owners of the Refunding Bonds is the responsibility of DTC participants and indirect participants. The County may from time to time as required designate a successor bond registrar and paying agent.

PURPOSE AND SECURITY: The Refunding Bonds are being issued pursuant to Act No. 202, Public Acts of Michigan, 1943, as amended ("Act 202"); and a Resolution adopted the County Board of Commissioners for the purpose of refunding a portion of the outstanding Washtenaw County Sewage Disposal System No. 8 (Ypsilanti Area) bonds, Series II, dated November 1, 1978, maturing in the years 2000 through 2007 (the "Refunded Bonds"). In addition, the Refunding Bonds are to be issued in anticipation of, and are primarily payable from, moneys to be received by the County from the Township of Ypsilanti (the "Township") and the City of Ypsilanti (the "City") pursuant to a contract between the County, the Township and the City dated as of September 12, 1978 (the "Contract"). The Township and the City have pledged their full faith and credit for the payment of their contractual obligations, and, to the extent necessary are obligated by law to levy ad valorem taxes for such purpose, without limitation as to rate or amount. The County has irrevocably pledged to the payment of said Refunding Bonds the total contractual payments, which payments are payable at such times and are established in such amounts as are required to pay the entire principal of and interest on the Refunding Bonds promptly when due. As additional security for the payment of the Refunding Bonds and the interest thereon, the County, as authorized by law, has pledged its full faith and credit for the prompt and timely payment thereof, and, to the extent necessary, is obligated by law to levy ad valorem taxes for such purpose, without limitation as to rate or amount.

ESCROW AGENT: Proceeds from the Refunding Bonds will be transferred to Michigan National Bank, Farmington Hills, Michigan as escrow agent (the "Escrow Agent") under an escrow agreement dated February 1, 1999 (the "Agreement"), who will use such proceeds to acquire investment obligations sufficient to pay principal of, premium, if any, and interest on the Refunded Bonds when due or upon the first permissible redemption date for the Refunded Bonds.

ADJUSTMENT IN PRINCIPAL AMOUNT: The aggregate principal amount of this issue has been determined as the amount necessary to retire the Refunded Bonds and pay a portion or all of the costs of issuance of the Refunding Bonds, assuming certain conditions and events exist on the date of sale. Following receipt of bids and prior to final award, the County reserves the right to increase or decrease the aggregate principal amount of the issue by an amount not to exceed $50,000. The increase or decrease will be in increments of $5,000 and may be made in any maturity or maturities. The purchase price will be adjusted proportionately to the reduction in issue size, but the interest rates specified by the successful bidder for all maturities will not change. The successful bidder may not withdraw the bid as a result of any changes made within these limits.

If no bid results in debt service savings acceptable to the County when the proceeds are used to provide for the refunding of the Refunded Bonds, the County may reject all bids and negotiate with one or more of the bidders for the sale of the Refunding Bonds on terms which will enable the County to achieve debt service savings acceptable to the County.

ADJUSTMENT IN DISCOUNT OR PREMIUM: In the event the principal amount of this issue is increased or decreased, the discount or premium bid, if any, will be adjusted so that it is the same percent as the discount or premium originally bid.

GOOD FAITH: A certified or cashier's check drawn upon an incorporated bank or trust company or a financial surety bond in an amount equal to 2% ($17,600) of the face amount of the Refunding Bonds, and payable to the order of the County Treasurer must accompany each bid as a guarantee of good faith on the part of the bidder, to be forfeited as liquidated damages if such bid be accepted and the bidder fails to take up and pay for the Refunding Bonds. If a check is used, it must accompany each bid. If a financial surety bond is used, it must be from an insurance company licensed to issue such a bond in the State of Michigan and such bond must be submitted to the County Treasurer prior to the opening of the bids. The financial surety bond must identify each bidder whose good faith deposit is guaranteed by such financial surety bond. If the Refunding Bonds are awarded to a bidder utilizing a financial surety bond, then that purchaser (the "Purchaser") is required to submit its good faith deposit to the County or its financial advisor in the form of a cashier's check (or wire transfer such amount as instructed by the County or its financial advisor) not later than noon, Eastern Standard Time, on the next business day following the award. If such good faith deposit is not received by that time, the financial surety bond may be drawn upon by the County to satisfy the good faith deposit requirement. The good faith deposit will be applied to the purchase price of the Refunding Bonds. No interest shall be allowed on the good faith checks, and checks of each unsuccessful bidder will be promptly returned to such bidder's representative or by registered mail. The good faith check of the successful bidder will be cashed immediately, in which event, payment of the balance of the purchase price of the Refunding Bonds shall be made at the closing.

AWARD OF BONDS: The Refunding Bonds will be awarded to the bidder whose bid produces the lowest true interest cost determined in the following manner. The lowest true interest cost will be the annual interest rate (compounded on May 1, 1999 and semiannually thereafter) necessary to discount the debt service payments from the payment dates to February 1, 1999 and to the price bid, including interest accrued to February 1, 1999. For the purpose of computing interest cost the Refunding Bonds shall be deemed to become due in the principal amount and at the times set forth above. Each bidder shall state in its bid the true interest cost to the County, computed in the manner above specified.

LEGAL OPINION: Bids shall be conditioned upon the approving opinion of John R. Axe and Associates, attorneys of Grosse Pointe Farms, Michigan (the "Bond Counsel") a copy of which opinion will be printed on the reverse side of each bond and the original of which will be furnished without expense to the purchaser of the Refunding Bonds at the delivery thereof. The fees of Bond Counsel for services rendered in connection with such approving opinion are expected to be paid from bond proceeds. Except to the extent necessary to issue such opinion, Bond Counsel has not been requested to examine or review and has not examined or reviewed any financial documents, statements or other materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Refunding Bonds, and therefore, has not expressed and will not express an opinion with respect to the accuracy or completeness of any such financial documents, statements or materials.

TAX MATTERS: In the opinion of Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Refunding Bonds is excluded from gross income for federal income tax purposes, such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, the Refunding Bonds and interest thereon are exempt from all taxation in the State of Michigan except estate taxes and taxes on gains realized from the sale, payment or other disposition thereof.

"NOT QUALIFIED TAX EXEMPT OBLIGATIONS": The Refunding Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986.

CERTIFICATE REGARDING "ISSUE PRICE": The successful bidder will be required to furnish, prior to the delivery of the Refunding Bonds, a certificate in a form acceptable to Bond Counsel, as to the "issue price" of the Refunding Bonds within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended.

DELIVERY OF BONDS: The County will furnish Refunding Bonds ready for execution at its expense. Refunding Bonds will be delivered without expense to the Purchaser. The usual closing documents, including a certificate that no litigation is pending affecting the issuance of the Refunding Bonds, will be delivered at the time of delivery of the Refunding Bonds. If the Refunding Bonds are not tendered for delivery by twelve o'clock noon, Eastern Standard Time, on the 45th day following the date of sale, or the first business day thereafter if said 45th day is not a business day, the successful bidder may on that day, or any time thereafter until delivery of the Refunding Bonds, withdraw its proposal by serving written notice of cancellation on the undersigned, in which event the County shall promptly return the good faith deposit. Payment for the Refunding Bonds shall be made in Federal Reserve Funds. Accrued interest to the date of delivery of the Refunding Bonds shall be paid by the Purchaser at the time of delivery. Unless the Purchaser furnishes the Bond Registrar with a list of names and denominations in which the Purchaser wishes to have the certificates issued at least ten (10) business days before delivery of the Refunding Bonds, the Refunding Bonds will be delivered in the form of a single certificate for each maturity, registered in the name of the Purchaser. The Refunding Bonds will be delivered on or about February 11, 1999.

OFFICIAL STATEMENT: No official statement on the Refunding Bonds will be prepared by the County or any other person or entity.

CUSIP NUMBERS: It is anticipated that CUSIP identification numbers will be printed on the Refunding Bonds, but neither the failure to print such numbers nor any improperly printed number shall constitute cause for the Purchaser to refuse to accept delivery of or to pay for the Refunding Bonds. All expenses for printing CUSIP numbers on the Refunding Bonds shall be paid for by the County, except that the CUSIP Service Bureau charge for the assignment of such numbers shall be the responsibility of and shall be paid for by the Purchaser.

FURTHER INFORMATION: Additional information may be obtained from Bendzinski & Co., Municipal Finance Advisors, One Kennedy Square, Suite 2130, Detroit, Michigan 48226-3333, telephone (313) 961-8222.

THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS.

ENVELOPES: Envelopes containing the bids should be plainly marked "Washtenaw County Sewage Disposal System No. 8 (Ypsilanti Area) Refunding Bonds, Series II (Unlimited Tax)."

 

DANIEL MYERS, Director

County of Washtenaw

Department of Public Works

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