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HomeMy WebLinkAboutResolution 2889 Refunding MMIA liability insurance -.----"..". .....-.-. . . . ;, Member Frost moved the adoption of the following . resolution. RESOLUTION NO. 2RRq A RESOLUTION RELATING TO P ARTICIP ATION IN POOLED SELF- INSURANCE PROGRAM; APPROVING AND AUTHORIZING THE MONTANA MUNICIPAL INSURANCE AUTHORITY TO ISSUE BONDS ON BEHALF OF THE MUNICIPALITY, TO REFUND THE OUTSTANDING LIABILITY INSURANCE BONDS ISSUED BY THE AUTHORITY ON BEHALF OF THE MUNICIPALITY, APPROVING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT RELATING THERETO AND AUTHORIZING THE ISSUANCE AND COMMITTING TO EXECUTE AND DELNER TO THE MONTANA MUNICIPALITY INSURANCE AUTHORITY A GENERAL OBLIGATION NOTE EVIDENCING THE MUNICIPALITY'S PROPORTIONATE SHARE OF PRINCIPAL OF AND INTEREST ON THE REFUNDING BONDS AND THE EXECUTION AND DELIVERY OF RELATED DOCUMENTS. BE IT RESOLVED by the governing body (the Governing Body) of the City of Boz~m~n (the Municipality) as follows: . Section 1. Recitals. 1.01. The Montana Municipal Insurance Authority (the Authority) was created as a joint exercise of powers entity pursuant to the Interlocal Agreement creating the Montana Municipal Insurance Authority, (the Interlocal Agreement) and Title 7, Chapter 11-, Part 1, M.C.A. (the Interlocal Cooperation Act) and as authorized under the provisions of Section 2-9-211 and 2-9-212, M.C.A. for the purpose of providing insurance and reinsurance programs to Montana municipalities and jointly issuing obligations to fund self-insurance funds. 1.02. Pursuant to that authority, the Authority established its Liability Insurance Program (Program) and made it available to all Montana municipalities executing the Interlocal Agreement and the Liability Insurance Coverage Program Agreement (the Insurance Agreement), The Authority issued and sold its Liability Insurance Coverage Program Bonds, Series 1986 (the Outstanding Bonds) in the aggregate principal amount of $6,265,000, of which $5,455,000 in principal amount are now outstanding on behalf of the municipalities (the Participating Members) adopting a Resolution authorizing the Authority to do so, and executing and delivering to the Authority a general obligation note (the Outstanding Note) in a principal amount equal to their proportionate share of the principal of and interest on the Bonds (the Debt Service Premium) as defined in the Indenture of Trust dated . -1- . . " as of August 15, 1986 between the Authority and First Trust Company of Montana, . National Association, as trustee and successor to First Trust Company of Montana (the Indenture). Under the terms of the Outstanding Notes and the Agreement, each Participating Member is obligated to pay its Debt Service Premium in order to participate in the Program. In addition to the Debt Service Premium, each Participating Member is obligated to pay Risk Premium, Supplemental Debt Service Premium and any Risk Premium Adjustments or Deferred Risk Premium Adjustments. 1.03. The Outstanding Bonds bear interest at a net effective interest rate of (7.172%). The Board of Directors of the Authority (the Board) has determined that it may be advantageous to the Program and the Participating Members, now or in the future, to advance refund or refund the Series 1986 Bonds and thereby achieve a reduction in annual debt service on the Outstanding Bonds. 1.04. In order for the Board to refund the Series 1986 Bonds it must have authorization from the Participating Members to issue on behalf of the Participating Members bonds (the Refunding Bonds) to refund the Outstanding Bonds, and the Authority has requested that the Municipality adopt a resolution granting such authorization. Section 2. Authorization. . 2.01. The Governing Body hereby authorizes the Authority to issue Refunding Bonds on its behalf as provided herein, and declares its intention to issue a Refunding Note that shall be a general obligation of the Municipality and shall represent its proportionate share of the Refunding Bonds, as determined under the Indenture and to execute and deliver the Refunding Note and such other documents to the Authority as may be required to effectuate the issuance of the Refunding Bonds; provided that the interest rates to be borne by the Refunding Bonds will result in present value savings to the Authority of not less than one and one half percent (1 1/2 %) of the principal amount of the Outstanding Bonds, using the interest rate on the Refunding Bonds as a discount factor over the term of the Refunding Bonds, which savings sha~l be net of the costs of issuing the Refunding Bond. 2.02. The Authority is hereby authorized to rely on this Resolution and the Municipality hereby authorizes the Authority to proceed with the issuance of the Refunding Bonds on behalf of the Municipality in an amount sufficient, among other things, to defease the Outstanding Bonds and pay all costs associated with the issuance of the Refunding Bonds and defeasance of the Outstanding Bonds. 2.03. The Governing Body hereby preliminarily authorizes the issuance of its Refunding Note in a principal amount not to exceed 120% of the . -2- n...__.____ . . . . . principal of the Outstanding Notes, in substantially the form of the Note previously issued to refund the Outstanding Notes. The Mayor and City Clerk are hereby authorized and directed to execute and deliver the Refunding Notes to the Authority within 15 days of the date of the receipt of written notice from the Authority to do so; provided that: 1) the interest rates savings described in Section 2.01 can be achieved; 2) the principal amount of the Refunding Note does not exceed 3% of the taxable value of the Municipality, as of the date of the last completed assessment for state and local taxes; and 3) the Board has determined that the issuance of the Refunding Bonds is in the best interest of the Program and the Participating Member and the Refunding Bonds will be issued in the principal amount necessary, but not greater than the principal amount necessary, to provide funds, with other available funds in the Debt Service Fund to the Authority allocable to the Outstanding Bonds, to establish the escrow account to defease the Outstanding Bonds, and to pay the costs of issuance of the Refunding Bonds and the costs of refunding the Outstanding Bonds. The term of the Refunding Note shall not exceed the term on the Outstanding Note. Section 3. Effective Date. This resolution shall become effective thirty days after passage. PASSED AND ADOPTED this 19th day of October, 1992. . . ~ . MOTHY SW N, Mayor A TrEST: ~,fh~ ROBIN L. SULLIVAN Clerk of the Commission WITNESS my hand officially as such recording officer and the seal of the City of Bozeman this 19th day of October, 1992. (S E A L) ~J~ R L. SULLIV AN Clerk of the Commission -3- "\ , . . ." . Member Vincent seconded the motion and the following voted in favor thereof: Commissioner Frost. Commi~~innpr Vinrpnr, Commissioner Knapp and Mayor Swanson , and the following voted against the same: None Absen t: Commissioner Stiff . . State of Montana ) County of Gallatin ) . City of Bozeman ) . I, Robin L. Sullivan, Clerk of the Commission of the City of Bozeman, Montana, do hereby certify that the foregoing Commission Resolution No. 2889 was published by title and number in the Bozeman Daily Chronicle, a newspaper of general circulation printed and published in said City, in the issue dated the 22nd day of October 1992, and due proof of such publication is on file in my office. IN WITNESS WHEREOF I hereunto set my hand and affix the corporate seal of my office. VLz ~a~J ROBIN L. SULLIVAN Clerk of the Commission . .