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REFUNDING BOND ORDINANCE OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY PROVIDING FOR THE REFUNDING OF ALL OR A PORTION OF ITS OUTSTANDING GENERAL OBLIGATION BONDS CONSISTING OF (A) QUALIFIED GENERAL IMPROVEMENT BONDS, SERIES 2015A AND (B) QUALIFIED SCHOOL BONDS, SERIES 2015B AND AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $31,000,000.00 AGGREGATE PRINCIPAL AMOUNT OF QUALIFIED GENERAL OBLIGATION REFUNDING BONDS, CONSISTING OF (A) NOT TO EXCEED $29,000,000.00 QUALIFIED GENERAL IMPROVEMENT REFUNDING BONDS AND (B) NOT TO EXCEED $2,000,000.00 QUALIFIED SCHOOL REFUNDING BONDS OF THE CITY PURSUANT TO THE PROVISIONS OF THE MUNICIPAL QUALIFIED BOND ACT TO EFFECT SUCH REFUNDING AND APPROPRIATING THE PROCEEDS THEREFOR AND FINANCING THE COST THEREOF.
Deferred 6PSF-i 120424
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WHEREAS, pursuant to the provisions of the Local Bond Law of the State of New Jersey, N.J.S.A. 40A:2-1 et seq., as amended and supplemented (the “Local Bond Law”), and in the case of the hereinafter defined 2015B Bonds, the provisions of Title 18A, Education, of the New Jersey Statutes (the “School Law”), including, specifically N.J.S.A. 18A:7A-46.3 and N.J.S.A. 18A:7A-46.4, the City of Newark, in the County of Essex, State of New Jersey (the “City”), previously issued $56,673,000.00 General Obligation Bonds on June 23, 2015, consisting of (i) $51,553,000.00 Qualified General Improvement Bonds, Series 2015A (qualified under the Municipal Qualified Bond Act) (the “2015A Bonds”) and (ii) $5,120,000.00 Qualified School Bonds, Series 2015B (qualified under the Municipal Qualified Bond Act; additionally secured under the New Jersey School Bond Reserve Act) (the “2015B Bonds” and together with the 2015A Bonds, the “Original Bonds”); and
WHEREAS, a (i) $27,678,000.00 outstanding principal portion of the 2015A Bonds maturing on July 15 in the years 2026 through 2029, inclusive (collectively, the “2015A Refunded Bonds”) are subject to redemption prior to their respective maturity dates, on or after July 15, 2025, at the option of the City, either in whole or in part by lot within a single series and maturity from maturities selected by the City, on any date, at a redemption price equal to 100% of the principal amount thereof and (ii) $1,650,000.00 outstanding principal portion of the 2015B Bonds maturing on July 15, in the years 2026 through 2029, inclusive (collectively, the “2015B Refunded Bonds” and together with the 2015A Refunded Bonds, the “Refunded Bonds”) are subject to redemption prior to their respective maturity dates, on or after July 15, 2025, at the option of the City, either in whole or in part by lot within a single series and maturity from maturities selected by the City, on any date, at a redemption price equal to 100% of the principal amount thereof; and
WHEREAS, the Municipal Council of the City (the “Municipal Council”) has an opportunity to refund all or a portion of the Refunded Bonds through the issuance of General Obligation Refunding Bonds in an aggregate principal amount not to exceed $31,000,000.00, consisting of (i) not to exceed $29,000,000.00 Qualified General Improvement Refunding Bonds, Series 2025A (the “2025A Refunding Bonds”) and (ii) not to exceed $2,000,000.00 Qualified School Refunding Bonds, Series 2025B (additionally secured under the New Jersey School Bond Reserve Act) (the “2025B Refunding Bonds” and together with the 2025A Refunding Bonds, the “Refunding Bonds”), to provide for net debt service savings; and
WHEREAS, the City desires to issue the Refunding Bonds authorized herein as “Qualified Bonds” pursuant to the Municipal Qualified Bond Act of the State of New Jersey, N.J.S.A. 40A:3-1 et seq. (the “Municipal Qualified Bond Act”), which Refunding Bonds, if so issued, shall contain a recital that they are issued pursuant to Title 40A of the New Jersey Statutes and are entitled to the benefits of the provisions of the Municipal Qualified Bond Act; and
WHEREAS, the Municipal Council now desires to adopt this Refunding Bond Ordinance (the “Refunding Bond Ordinance”) authorizing the issuance of Refunding Bonds in an aggregate principal amount not exceeding $31,000,000.00, a portion of the sale proceeds of which shall be used to refund the Refunded Bonds.
NOW, THEREFORE, BE IT ORDAINED AND ENACTED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY, THAT:
SECTION 1. The recitals are fully incorporated herein by this reference as if fully set forth herein.
SECTION 2. The refunding of all or a portion of the Refunded Bonds is hereby authorized.
SECTION 3. In order to refund the Refunded Bonds and to pay all related costs associated therewith, the City is hereby authorized to issue the Refunding Bonds in an aggregate principal amount not to exceed $31,000,000.00, consisting of (i) not to exceed $29,000,000.00 aggregate principal amount of 2025A Refunding Bonds and (ii) not to exceed $2,000,000.00 aggregate principal amount of 2025B Refunding Bonds, all in accordance with the requirements of N.J.S.A. 40A:2-51 et seq., and appropriate the proceeds of such Refunding Bonds to such purpose described in Section 4 hereof. Such 2025A Refunding Bonds shall be designated as “Qualified General Improvement Refunding Bonds” and such 2025B Refunding Bonds shall be designated as “Qualified School Refunding Bonds”, each with such series designation and other designation as may be necessary to identify such bonds at the time of issuance thereof.
SECTION 4. The purpose of the issuance of the Refunding Bonds is to achieve debt service savings by refunding all or a portion of the Refunded Bonds.
SECTION 5. An aggregate amount not exceeding $700,000.00, may be allocated from the aggregate principal amount of the Refunding Bonds to pay for items of expense listed and permitted under N.J.S.A. 40A:2-51(b), including, but not limited to, the aggregate allocated costs of issuance thereof, including underwriting, printing, credit enhancement or other insurance, advertising, accounting, financial, municipal advisory, legal and other expenses in connection therewith. Such amount is included in the maximum authorized aggregate principal amount set forth in Section 3 hereof.
SECTION 6. A portion of the proceeds from the sale of the Refunding Bonds shall be deposited in trust to provide for the payment of the Refunded Bonds. Any moneys in trust may be invested as provided in N.J.S.A. 40A:2-60, and any moneys in excess of the amounts required for such purpose may be used for any lawful purpose of the City.
SECTION 7. Any further provisions as to terms of sale, deposit, security, regulation, investment, reinvestment, disposition or application of the proceeds of the Refunding Bonds, and matters in connection therewith, shall be determined by resolution of the City adopted prior to the issuance of the Refunding Bonds.
SECTION 8. The Municipal Council hereby delegates to the Director of Finance and Chief Financial Officer (the “Chief Financial Officer”) or the Assistant Director of Finance and Chief Financial Officer (the “Assistant Chief Financial Officer”) of the City the power to sell the Refunding Bonds at a private sale or a public sale, to determine the terms of the Refunding Bonds and to perform such other actions and make such other determinations, subject to the limitations to be set forth in a subsequent resolution of the City.
SECTION 9. All other matters relating to the Refunding Bonds shall be performed or determined by subsequent resolution of the Municipal Council of the City, or the performance or determination thereof shall be delegated by resolution of the Municipal Council of the City to a financial officer of the City.
SECTION 10. The purpose of the issuance of the Refunding Bonds is to realize net present value interest cost savings for property taxpayers residing in the City (“net” meaning savings after payment of all costs of issuance of the Refunding Bonds). Applicable State requirements mandate that such net present value interest cost savings equal at least 3% of the principal amount of the Refunded Bonds. In addition, unless the Local Finance Board within the Division of Local Government Services, New Jersey Department of Community Affairs (the “Local Finance Board”) approves otherwise, the issuance of the Refunding Bonds shall comply with the provisions of N.J.A.C. 5:30-2.5, including that within ten (10) days of the date of the closing on the Refunding Bonds, the City Clerk shall file a report with the Local Finance Board setting forth (a) a comparison of the Refunding Bonds’ debt service and the Refunded Bonds’ debt service, which comparison shall set forth the present value savings achieved by the issuance of the Refunding Bonds; (b) a summary of the issuance of the Refunding Bonds; (c) an itemized accounting of all costs of issuance in connection with the issuance of the Refunding Bonds, and (d) a certification of the City Clerk that (i) all of the conditions of Section (b) of N.J.A.C. 5:30- 2.5 have been met and (ii) a resolution authorizing the issuance of the Refunding Bonds, adopted pursuant N.J.S.A. 40A:2-51(c), was approved by a two-thirds vote of the full membership of the Municipal Council.]
SECTION 11. The supplemental debt statement required by the Local Bond Law has been duly made and filed in the Office of the City Clerk and a complete executed duplicate thereof has been filed in the Office of the Director of the Division of Local Government Services, in the New Jersey Department of Community Affairs, and such statement shows that the gross debt of the City as defined in the Local Bond Law (i) is increased by the authorization of the bonds and notes provided for in this Refunding Bond Ordinance and the said bonds and notes authorized by this Refunding Bond Ordinance will be within all debt limitations prescribed by the Local Bond Law, and (ii) will be decreased by the amount of the Refunded Bonds.
SECTION 12. The full faith and credit of the City are hereby pledged to the punctual payment of the principal of and the interest on the Refunding Bonds authorized by this Refunding Bond Ordinance. The Refunding Bonds shall be direct, unlimited obligations of the City, and, unless paid from other sources, the City shall be obligated to levy ad valorem taxes upon all the taxable property within the City for the payment of the Refunding Bonds and the interest thereon, without limitation as to rate or amount.
SECTION 13. A certified copy of this Refunding Bond Ordinance, as introduced and adopted upon first reading, shall be filed with the Director of the Division of Local Government Services in the Department of Community Affairs of the State of New Jersey prior to final adoption hereof, together with the statement signed by the Chief Financial Officer of the City required by N.J.S.A. §40A:2-55.
SECTION 14. After passage upon first reading of this Refunding Bond Ordinance, the City Clerk is hereby authorized and directed to publish a summary of this Refunding Bond Ordinance, contained within the “NOTICE OF PENDING BOND ORDINANCE AND SUMMARY” (with appropriate completions, insertions and corrections), at least once in a newspaper qualified under N.J.S.A. §40A:2-19, at least seven (7) days prior to the date set for public hearing and further consideration for final passage (which date shall be at least ten (10) days after introduction and first reading). The City Clerk is further directed to comply with all provisions of N.J.S.A. §40A:2-17(b) regarding postings, publications, and the provision of copies of this refunding bond ordinance. The City Clerk is hereby authorized and directed to set the date of the public hearing for December 18, 2024.
SECTION 15. After final adoption of this Refunding Bond Ordinance by the Municipal Council, the City Clerk is hereby directed to publish a summary of this Refunding Bond Ordinance, as finally adopted, contained within the “NOTICE OF BOND ORDINANCE ADOPTION AND SUMMARY” (with appropriate completions, insertions and corrections), at least once in a newspaper qualified under N.J.S.A. §40A:2-19.
SECTION 16. In the event that the Refunding Bonds are issued on a tax-exempt basis, the Municipal Council hereby covenants on behalf of the City to take any actions necessary or refrain from taking such actions in order to preserve the tax-exempt status of the Refunding Bonds authorized hereunder as is or may be required under the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated thereunder, including compliance with the Code with regard to the use, expenditure, investment, timely reporting and rebate of investment earnings as may be required thereunder.
SECTION 17. The Refunding Bonds authorized herein shall be designated as “Qualified Bonds” pursuant to the Municipal Qualified Bond Act of the State of New Jersey, N.J.S.A. 40A:3-1 et seq. (the “Municipal Qualified Bond Act”), and shall contain a recital that they are issued pursuant to Title 40A of the New Jersey Statutes and are entitled to the benefits of the provisions of the Municipal Qualified Bond Act. The City shall certify to the State Treasurer the name and address of the paying agent, the maturity schedule, the interest rate and the dates of payment of debt service on such Qualified Bonds within ten (10) days after the date of issuance of such Qualified Bonds.
SECTION 18. This Refunding Bond Ordinance shall take effect twenty (20) days after the first publication of this refunding bond ordinance after final adoption and approval by the Mayor, as provided by the Local Bond Law, but not prior to the time that the consent of the Local Finance Board has been endorsed upon a certified copy of this Refunding Bond Ordinance as finally adopted, as provided by N.J.S.A. 40A:2-55.
STATEMENT
Ordinance providing for the refunding of all or a portion of its outstanding general obligation bonds consisting of (a) Qualified General Improvement Bonds, Series 2015A and (b) Qualified School Bonds, Series 2015B and authorizing the issuance of not to exceed $31,000,000.00 aggregate principle amount of Qualified General Obligation Refunding Bonds, consisting of (a) not to exceed $29,000,000.00 Qualified General Obligation Refunding Bonds and (b) not to exceed $2,000,000.00 Qualified School Refunding Bonds of the City pursuant to the provisions of the Municipal Qualified Bond Act to effect such refunding and appropriating the proceeds therefore and financing costs thereof.