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HomeMy WebLinkAboutResolution 2808 MMIA bonds for Workers Compensation ----.--..-.".. II · c 't CERTIFICATE OF MINUTES RELATING TO RESOLUTION NO. 2808 Issuer: Ci ty of (Town of) Bozeman (the Municipali ty) Governing Body: City Commission Kind, date, time and place of meeting: a regular meeting, held Auqust 13, 1990, at 3:30 o'clock _.m., in the Commission Room, Municipal Bldg., Bozeman , Montana. Members present: !1ayor Hawks, Commissioner Goehrung, Commissioner Frost, Commissioner Swanson and Commissioner Knann Members absent: None Documents attached: Minutes of said meeting (pages): ___ through___, including RESOLUTION NO. 2808 A RESOLUTION RELATING TO PARTICIPATION IN THE WORKERS' COMPENSATION SELF-INSURANCE PROGRAM OF THE MONTANA MUNICIPAL INSURANCE AUTHORITY; APPROVING THE INDENTURE OF TRUST AUTHORIZING THE ISSUANCE OF BONDS BY THE AUTHORITY ON BEHALF OF THE MUNICIPALITY AND OTHER PARTICIPANTS; APPROVING THE DISTRIBUTION OF AN OFFICIAL STATEMENT RELATING THERETO; AUTHORIZING AND APPROVING THE EXECUTION AND DELIVERY OF A NOTE EVIDENCING THE MUNICIPALITY'S PROPORTIONATE SHARE OF PRINCIPAL OF AND INTEREST ON THE BONDS I, the undersigned, being the duly qualified and acting recording officer of the political subdivision issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of the corporation in my legal custody, from which they have been transcribed; that the documents are a correct and complete transcript of the minutes of a meeting of the governing body of the political subdivision, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at the meeting, insofar as they relate to the obligations; and that the meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice given as required by law. WITNESS my hand officially as such recording officer and the seal of the City t.hiS 13t~f August ,1990. &~ -r, c ",/:: '-/ ~ (SEAL) Clerk f - . ~ Member Swanson moved the adoption of the following resolution. RESOLUTION NO. 2808 A RESOLUTION RELATING TO PARTICIPATION IN THE WORKERS' COMPENSATION SELF-INSURANCE PROGRAM OF THE MONTANA MUNICIPAL INSURANCE AUTHORITY; APPROVING THE INDENTURE OF TRUST AUTHORIZING THE ISSUANCE OF BONDS BY THE AUTHORITY ON BEHALF OF THE MUNICIPALITY AND OTHER PARTICIPANTS; APPROVING THE DISTRIBUTION OF AN OFFICIAL STATEMENT RELATING THERETO; AUTHORIZING AND APPROVING THE EXECUTION AND DELIVERY OF A NOTE EVIDENCING THE MUNICIPALITY'S PROPORTIONATE SHARE OF PRINCIPAL OF AND INTEREST ON THE BONDS Be It Resolved by the Governing Body of the City of Bozeman (the Municipality) as follows: Section 1. Authorization and Recitals. 1.01. The Municipality is authorized by Montana Code Annotated, Section 39-71-403 to self-insure for workers' compensation separately or jointly with other public corporations. 1.02. The Municipality is a member of the Montana Municipal Insurance Authority (the MMIA) , a joint exercise of power authority created pursuant to an Interlocal Agreement (the Interlocal Agreement). The MMIA currently provides Workers Compensation coverage for its participating members (the Participants) through its Workers Compensation Risk Retention Program (the Current Program). The Municipality has executed the Interlocal Agreement and the Workers Compensation Risk Retention Program Agreement (the Program Agreement) and is a Participant in the Current Program. 1.03. Section 39-71-403, M.C.A., (the Law) authorizes municipalities, separately or jointly with other public corporations, or an entity acting on their behalf, to issue bonds and notes for the purpose of establishing, in whole or in part, a self-insurance workers' compensation fund. The MMIA has determined that the funding of an excess claims payment fund through the issuance of tax exempt bonds will enable it to provide workers' compensation coverage on terms more advantageous to the Participants. -1- -..---.-. --_._---,,- . , 1.04. Pursuant to a Revised Program Agreement to be entered into between the MMIA and some or all of the Participants in the Current Program, the Current Program will be modified (as so modified, the Revised Program) to include the establishment and capitalization of an Excess Claims Payment Fund to 'pay "specific excess claims" and to pay "aggregate excess claims" over Attachment Points to be determined periodically by the Board of the MMIA, which will obviate the need to purchase from commercial carriers Aggregate Excess Stop Loss Coverage and to fund a projected future loss fund to pay claims incurred and incurred-but-not-reported prior to October I, 1990 by establishing a Supplemental Program Fund. 1.05. To implement the Revised Program the MMIA will, pursuant to this Resolution, the Revised Program Agreement, and the Indenture of Trust (as hereinafter defined), issue and sell its bonds (the Bonds) on behalf of the Participants in the Revised Program in order to fund the Excess Claims Payment Fund at a level that is estimated to be actuarially sound by the MMIA's actuarial consultant for a period of twenty years, to fund the Supplemental Program Fund at the required level as determined by the MMIA"s actuarial consultant, to establish a reserve for the Bonds and to pay the costs associated with the sale and issuance of the Bonds. Each such Participant will execute and deliver to the MMIA a promissory note (the Note) in a principal amount equal to its Proportionate Share of the principal of the Bonds. The total principal amount of all Notes will be at least equal equal to the aggregate principal amount of the Bonds. The respective Notes, this Resolution, the corresponding resolution adopted by each of the other Participants and the Revised Program Agreements will obligate each such Participant to pay the principal of and interest on its respective Note in order to participate in the Revised Program. In addition, each Participant will be obligated to pay its proportionate share of other costs of the Revised Program as determined and allocated periodically by the MMIA for participation in the Revised Program as set forth in the Revised Program Agreement. 1.06. Draft forms of the following documents relating to the Revised Program, the Bonds and the Note have been prepared and submitted to this Governing Body, and are hereby directed to be filed with the Municipal Clerk: (a) the Revised and Restated Workers Compensation Program Agreement (the Revised Program -2- ---..-......-...-- ---- ----.. , Agreement), to be entered into between the MMIA and the Municipality; (b) the Indenture of Trust, between the MMIA and a Trustee, pursuant to which the Bonds will be issued (the Bond Resolution); and (c) the Note, which is a part of this Resolution, to be executed by the Municipality and delivered to the MMIA evidencing the Municipality's obligation to pay its proportionate share of principal of and interest on the Bonds. Section 2. Findinqs. It is hereby found, determined and declared that: (a) The Revised Program provides the following advantages: (1) immediate capitalization of an excess claims payment fund (the "Excess Claims Payment Fund") from the proceeds of the sale of the Bonds for the purpose of providing protection from large claims losses at a more advantageous cost than purchasing commercial insurance; (2) relief from the imposition of a surcharge to fund [the unfunded liability of the Current Program] projected future losses; (3) reduction or avoidance of premiums to commercial insurers; (4) relief from the commercial insurers' rights under excess liability policies to force claim settlements which are payable primarily in each case from the MMIA's self-insurance funds; (5) access to the commercial reinsurance market in future years when commercial reinsurance is available at rates deemed favorable by the MMIA; and (6) premium payments calculated to provide amounts in each year necessary to maintain the Revised Program at an actuarially sound level and therefore sufficient to reserve against the incurred losses of the Municipality and other Participants. (b) In reaffirming the Municipality's membership in the MMIA and participation in the Revised Program, and authorizing the execution and delivery of the Revised Program -3- ..u._____n --- ,- Agreement and the Note, the Municipality's purpose is, and in its judgment the effect thereof will be, to protect the health, safety, welfare and economic well-being of the citizens of the Municipality and its employees by making certain that the Municipality is insured against losses and claims arising from injury to workers' and meeting the obligations imposed on it by the State and Workers Compensation Division as an employer in the State of Montana. (c) The obligation of the Municipality to pay the principal of and interest on its Note when due shall constitute an obligation of the Municipality to be funded by a levy of an ad valorem tax on all taxable property within the Municipality without regard to any maximum mill levy limitation set by statute. (d) The terms and conditions for membership in the MMIA as set forth in the Interlocal Agreement and the terms and conditions for participation in the Revised Program as set forth in the Revised Program Agreement and the provisions and covenants of the Note are necessary, desirable and proper to achieve the goals of the Revised Program and the representations, covenants and recitals made therein and herein by the Municipality are valid and accurate. (e) The coverage provided to the Municipality by the Revised Program as evidenced by the Revised Program Agreement is adequate consideration for the Municipality's agreement to pay any Premium required thereunder and to issue this Note. (f) It is desirable that the Note be issued upon the terms and for the reasons set forth in this Resolution and the Municipality covenants and agrees to levy an annual ad valorem tax, if necessary, on all property within its jurisdiction in an amount sufficient to pay principal of and interest on the Note when due. Section 3. Authorization and Approval of the Revised Proaram Aareement. the Note. the Issuance of Bonds by the MMIA and the Distribution of the Official Statement. The Municipality hereby ratifies its membership in the MMIA and its participation in the Revised Program. The Municipality approves the execution of the Revised Program Agreements and participation in the Revised Program in accordance with the terms and conditions set forth in this Resolution and the Revised Program Agreement. The MMIA is hereby authorized to issue the Bonds on behalf of the Municipality and to apply the proceeds thereof as provided in the Indenture of Trust. The Municipality hereby authorizes the -4- . ", Note to be issued, subject to the terms and conditions set forth in Section 4 hereof, to evidence its obligation for its Proportionate Share of the principal of and interest on the Bonds. The forms of the Revised Program Agreement, the Indenture of Trust and the Note are approved, subject to such modifications and revisions as are deemed appropriate and approved by the Executive Officer and Municipal Attorney, which approval shall be conclusively evidenced by execution of the Note and the delivery of the opinion of the Municipal Attorney. The Revised Program Agreement is authorized to be executed by the Executive Officer and attested by the Municipal Clerk, and the Note is authorized to be executed by the Executive Officer and the City Treasurer, and attested by the Municipal Clerk and delivered to the MMIA as appropriate. The Municipality hereby directs the Chief Executive Officer and the Municipal Clerk to review the Preliminary Official Statement relating to the issuance of the Bonds to be distributed by the MMIA and if accurate with respect to the Municipality to consent on behalf of the Municipality to all references therein to the Municipality and authorize the distribution thereof, which approval and consent shall be evidenced by execution and delivery by the Chief Executive Officer and the Municipal Clerk of a certificate to that effect. Copies of all the documents in final form shall be delivered, filed and recorded as provided therein. If for any reason the Mayor, Executive Officer, City Treasurer or Municipal Clerk, or other officer of the Municipality, is unable or not available to sign any document herein specified or contemplated to be signed by such officer, such document may be signed, in the name of the Municipality, by such other officer of the Municipality as in the opinion of the Municipal Attorney is an appropriate officer to sign such document. Section 4. The Note. The Note shall be issued to evidence the Municipality's obligation to pay its proportionate share of the principal of and interest on the Bonds. The principal amount of the Note shall be based on the Municipality's annual Payroll for the fiscal year ending June 30, 1990 in proportion to the total annual Payroll of all Participants in the Revised Program as of the same period. Provided, however, that in no event shall the principal amount of the Note exceed, at the time such Note is issued, 3% of the taxable valuation of the real and personal property located within the Municipality as of the date of issuance. The principal of the Note shall bear interest at the rate or rates corresponding to the interest rates on the Bonds not to exceed 8% per annum. The Note shall be issued in sUbstantially the following form: -5- --..-.., ....---------- ---- ....-.--.. ..---..-..---..-- ... .- ...------....... , PROMISSORY NOTE UNITED STATES OF AMERICA STATE OF MONTANA NO. R-l DATE: 1, 1990 The City (Town) of (the Issuer) for value received acknowledges itself to be indebted and promises to pay to the Montana Municipal Insurance Authority (the Authori ty) , its successors or assigns, at the principal office of First Trust Company of Montana, in Billings, Montana (the Trustee) , the principal sum of Dollars ($ ), and to pay interest thereon from , 1990, until such principal sum is paid, such principal and interest being payable on the dates and in the installments, and, as to interest, at the rates, set forth in Exhibit A hereto. All such payments shall be made in coin or currency of the United States of America which at the time of payment is legal tender for the paYment of public or private debts. 1. As used herein with initial capital letters, the following terms have the following meanings: "Authoritv" means the Montana Municipal Insurance Authority, a joint powers entity created pursuant to the Interlocal Agreement for the purpose of providing workers' compensation self-insurance coverage to Montana municipalities on a pooled basis. "Bonds" means the Montana Municipal Insurance Authority Workers Compensation Program Series 1990 Bonds issued by the MMIA pursuant to the Indenture. "Executive Officer" means the mayor, city manager or chief executive officer of the Issuer, duly authorized by the laws of Montana and the home rule charter or ordinance of the Issuer to act on behalf of the Issuer. "Indenture" means the Indenture of Trust to be dated as of September 1, 1990 between the MMIA and the Trustee pursuant to which the Bonds are issued. -6- . . "Interlocal Aareement" means the Interlocal Agreement establishing the Authority. "Notes" means, in the aggregate, the Note and all similar obligations issued by the Other Participants. "Other Participants" means all Participants other than the Issuer. "Participants" means the municipalities participating in the Revised Program, including the Issuer and the Other Participants. "Payroll" means the total moneys paid to Issuer's employees, full and part-time, calculated in accordance with Section 39-7-123, M.C.A. "Policy Year" means each fiscal year or portion thereof for which a Participant has paid Premium. "Proportionate Share" means the ratio of the outstanding principal of this Note to the outstanding principal of all Notes on the date the determination is made. "Revised Proaram Aareement" means the Revised Workers' Compensation Risk Retention Program Agreement between the Issuer, the MMIA and Other Participants setting forth the terms and conditions of the Revised Program. "Revised Proaram" shall mean the Revised Workers' Compensation Insurance Coverage Program provided by the MMIA pursuant to the Revised Program Agreement. 2 . This Note is issued pursuant to and in full compliance with the Constitution and laws of the State of Montana and pursuant to a resolution duly adopted by the governing body of the Issuer (the "Note Resolution"). This Note is issued to evidence the Issuer's obligation for the Proportionate Share, not exceeding 3% of the taxable value of all taxable property within the boundaries of the Issuer, of the principal amount of the Bonds. The Issuer is obligated to levy an ad valorem tax on all taxable property within its boundaries to make the payments required under the Note without regard to any maximum mill levy limitation established by statute. 3 . If Bonds of any maturity are optionally redeemed or purchased and cancelled by the MMIA prior to -7- ---....---....-------. ._.___. ._. _n..___. ._... . .. maturity as provided in the Indenture, or if the principal of or interest on the Bonds is paid as provided in the Indenture from sources other than payments of principal of and interest on the Notes, a portion of the corresponding installment of principal and interest due under this Note shall be deemed paid according to the Proportionate Share of the Issuer. 4 . As provided in the Revised Program Agreement and the Indenture, the Issuer may on any date secure the payment of its unpaid obligations under this Note, by depositing in an irrevocable escrow account with the Trustee as escrow agent, cash or Government Obligations which are authorized by law to be so deposited and which are not subject to redemption at the option of the issuer thereof, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without reinvestment, to provide funds sufficient, in the opinion of an independent certified public accountant, net of any amounts which may be required to satisfy the Rebate Requirement, to pay 100% of the unpaid principal of the Note, plus any accrued interest thereon to the next date on which Bonds may be redeemed. 5. If the Bonds are declared immediately due and payable because of an "Event of Default" under the Indenture, then the principal of this Note shall automatically become due and payable on the same date, together with interest thereon to the date of payment of such principal. IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that all conditions, acts and things required by the Constitution and laws of the State of Montana to be done, to exist, to happen and to be performed precedent to and in the issuance of this Note, in order to make it a valid and binding obligation of the Issuer in accordance with its terms, have been done, do exist, have happened and have been performed in regular and due time, form and manner so required; that an annual ad valorem tax will be levied on all taxable property within the jurisdiction of the Issuer sufficient to pay the principal of and interest hereon when due, if necessary; and that the issuance of this Note does not cause the indebtedness of the Issuer to exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the Issuer, by its Governing Body, has caused this Note to be executed by the Executive Officer and City Treasurer (Finance Director), and -8- ---------- t . . . attested by the [City or Town] Clerk, and has caused the seal of the [City or Town] to be affixed hereto and has caused this Note to be dated as of the 1st day of , 1990. City (Town) of Executive Officer By Its City Treasurer (Finance Director) Attest: Clerk (SEAL) -9- .. , . . w Section 5. The Municipality represents that it has designated $ -Q- of its Bonds as qualified tax exempt obligations under Section 265(b)(3) of the Code in 1990. The Municipality hereby represents that it does not anticipate that the Municipality and all "subordinate entities" of the Municipality will issue in 1990 obligations bearing interest exempt from federal income taxation under Section 103 of the Code (including "qualified 501(c)(3) bonds" but excluding other "private activity bonds," as defined in Sections 141(a) and 145(a) of the Code and including the principal amount of the Note) in an amount greater than $10,000,000. The Municipality determines that the principal amount of its Note determined in accordance with Section 4 is the portion of the Bonds to be allocated to the Municipality and that such allocation bears a reasonable relationship to the benefit received by the City from the proceeds of the Bonds. Section 6. Effective Date. This Resolution shall become effective immediately J upon its passage and approval. 01 Passed and Approved by the Governing Body of the City (Town) of Rnzeman , Montana this 3th day of Auqust , 1990. ROBERT L. HAWKS, Mayor Attest: (]J:- Z J!.I~ Clerk of the Commission Member Knapp seconded the motion and the following voted in favor thereof: Commissioner Swanson, Commissioner Knapp, Commissioner Goehrung, Commissioner Frost and Mayor Hawks , and the following voted against the same: None . Absent: None ~ ~ -10- _..__ _. __._n__".________