Title
Dept/ Agency: Finance
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Approving Form of Sale of City-Secured Bonds
Amount to be Financed: $30,100,000.00
Source of Appropriation: Bonds/Notes
Purchaser: Open Market
Project Information:
(Description/ Project No./ Amount Appropriated/Ordinance No.)
RESOLUTION OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY (THE “CITY”) AUTHORIZING AND APPROVING (A) THE SALE AND ISSUANCE OF REFUNDING NOTES, SERIES 2026B (STATE LOAN REPAYMENT) (FEDERALLY TAXABLE) OF THE CITY, (B) THE PREPARATION AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND FINAL OFFICIAL STATEMENT IN CONNECTION THEREWITH, (C) THE ENTERING INTO AND EXECUTION OF A CONTINUING DISCLOSURE CERTIFICATE IN CONNECTION THEREWITH, AND (D) CITY OFFICIALS TO UNDERTAKE OTHER ACTIONS IN CONNECTION THEREWITH
Additional Information:
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WHEREAS, due to an increase in taxes payable to the County of Essex, New Jersey (the “County”), the City of Newark, in the County of Essex, State of New Jersey (the “City”) faced a serious fiscal emergency for its Fiscal Year 2025 budget and requested Fiscal Year 2025 Transitional Aid to Localities (“Transitional Aid”) administered by the Division of Local Government Services within the Department of Community Affairs of the State of New Jersey (the “Division”); and
WHEREAS, the Division determined to lend the City $30,000,000.00 in Transitional Aid (the “State Loan”) to balance the City’s Fiscal Year 2025 budget pursuant to an Amended Loan Agreement between the Division and the City, dated August 11, 2025 (the “Agreement”); and
WHEREAS, pursuant to the terms of the Agreement, the State Loan is due and payable in full to the Division no later than March 3, 2026; and
WHEREAS, the Municipal Council of the City adopted a resolution providing for a $30,000,000.00 emergency temporary appropriation (the “Emergency Temporary Appropriation”) pursuant to the provisions of the Local Budget Law of the State of New Jersey, N.J.S.A. 40A:4-1 et seq., as amended and supplemented (the “Local Budget Law”), specifically N.J.S.A. 40A:4-20, to repay the State Loan; and
WHEREAS, the payment of such Emergency Temporary Appropriation is a purpose for which an appropriation may lawfully be made for the period between the beginning of the 2026 fiscal year and the date of the adoption of the 2026 annual budget of the City; and
WHEREAS, the amount of the Emergency Temporary Appropriation will be included under the appropriate heading in the City’s 2026 annual budget as adopted, except, to the extent, if any, said Emergency Temporary Appropriation is paid or funded through the authorization of bonds or notes as an appropriation authorized by law 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
WHEREAS, the Emergency Temporary Appropriation was made to meet a pressing need for public expenditure to protect or promote the public health, safety, morals or welfare of the citizens of the City; and
WHEREAS, pursuant to Section 51 of the Local Bond Law, the City has determined to provide for the payment of such Emergency Temporary Appropriation through the issuance of refunding bonds and/or refunding notes in an aggregate principal amount not to exceed $30,100,000.00 (the “Refunding Obligations”), and has authorized the issuance of such Refunding Obligations in refunding bond ordinance number 6PSF-a finally adopted by the Municipal Council of the City on February 18, 2026, approved by the Mayor, and published as required by law (the “Refunding Bond Ordinance”); and
WHEREAS, the City desires to sell and issue not to exceed $30,100,000.00 Refunding Notes, Series 2026B (State Loan Repayment) (Federally Taxable) (the “Taxable Refunding Notes”) to (i) fund the Emergency Temporary Appropriation to repay the State Loan, and (ii) pay certain costs and expenses incidental to the issuance and delivery of the Taxable Refunding Notes, all pursuant to the provisions of the Local Bond Law, specifically N.J.S.A. 40A:2-51, the Refunding Bond Ordinance, and this resolution (the “Resolution”); and
WHEREAS, the City now wishes to authorize, approve, effectuate, and implement the issuance of the Taxable Refunding Notes and any and all actions related thereto via the adoption of this Resolution; and
WHEREAS, pursuant to, and in accordance with, (i) the Local Bond Law and (ii) the Refunding Bond Ordinance, the City is seeking to authorize the sale, issuance, execution and delivery of the Taxable Refunding Notes; and
WHEREAS, the City, in order to issue the Taxable Refunding Notes at competitive market rates, seeks to, among other things, authorize the preparation, execution and distribution, as applicable, of a Preliminary Official Statement (as hereinafter defined) and an Official Statement (as hereinafter defined); and
WHEREAS, the City, also seeks to, among other things, authorize the preparation, execution and delivery of, as applicable, the Taxable Refunding Notes, a Continuing Disclosure Certificate (as hereinafter defined), and any other agreements or documents required for the authorization, sale, issuance, execution and delivery of the Taxable Refunding Notes.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEYTHAT:
1. The recitals set forth above are incorporated herein as if fully set forth herein.
2. Authorization of Taxable Refunding Notes. The City is hereby authorized to issue not to exceed $30,100,000.00 Taxable Refunding Notes.
Pursuant to the provisions of the Local Bond Law and the Refunding Bond Ordinance, the Acting Director of Finance and Interim Chief Financial Officer is hereby authorized and directed to sell, issue, execute and deliver the Taxable Refunding Notes. The Taxable Refunding Notes will be dated their date of delivery and shall mature not later than one (1) year from their date as shall be determined by the Acting Director of Finance and Interim Chief Financial Officer. The Taxable Refunding Notes may be renewed from time to time in accordance with the provisions of the Local Bond Law. The Taxable Refunding Notes shall not be subject to redemption prior to maturity.
3. Sale of the Taxable Refunding Notes. The Acting Director of Finance and Interim Chief Financial Officer is hereby authorized, in accordance with the Refunding Bond Ordinance, to sell the Taxable Refunding Notes on a competitive basis and to award the Taxable Refunding Notes to the bidder based upon the submission by such bidder of a conforming bid of the lowest net interest cost or true interest cost as may be determined by the Acting Director of Finance and Interim Chief Financial Officer. The Acting Director of Finance and Interim Chief Financial Officer is also authorized, at his or her discretion, and based upon the advice of Wilentz, Goldman & Spitzer, P.A., bond counsel to the City (“Bond Counsel”), and NW Financial Group, LLC, the municipal advisor to the City (the “Municipal Advisor”), in accordance with the applicable provisions of the Refunding Bond Ordinance, to offer and sell the Taxable Refunding Notes on a negotiated basis or via private sale.
4. Authorization for Official Statement. The preparation by the City and the Municipal Advisor of a Preliminary Official Statement (the “Preliminary Official Statement”) relating to the Taxable Refunding Notes is hereby authorized. The distribution by the City of the Preliminary Official Statement, in substantially the form attached hereto as Exhibit A, to be used in connection with the marketing and sale of the Taxable Refunding Notes, is hereby authorized and approved, with such insertions, deletions and changes therein and any supplements thereto as Bond Counsel and the Municipal Advisor to the City may advise and recommend and an Authorized Officer of the City (as hereinafter defined) may approve. The Mayor, Business Administrator, and Acting Director of Finance and Interim Chief Financial Officer of the City (each an “Authorized Officer(s)”) are each hereby authorized and directed, on behalf of the City, to execute and deliver a certificate that “deems final” the Preliminary Official Statement in accordance with the Rule (as hereinafter defined).
After the sale of the Taxable Refunding Notes, the Preliminary Official Statement shall be modified to reflect the effect of the sale of the Taxable Refunding Notes and any other revisions not inconsistent with the substance thereof; and said Preliminary Official Statement, deemed “final” by an Authorized Officer in accordance with the Rule, as so modified, shall constitute the final Official Statement (the “Official Statement”). The Authorized Officers are each hereby authorized and directed on behalf of the City to execute and deliver said Official Statement.
5. Authorization for Notice of Sale. The Acting Director of Finance and Interim Chief Financial Officer of the City is hereby delegated, authorized and directed, on behalf of the City, to sell and award the Taxable Refunding Notes to the successful bidder therefor pursuant to the terms and conditions of a Notice of Sale for the Taxable Refunding Notes (the “Notice of Sale”). The form of the Notice of Sale, in substantially the form attached hereto as Exhibit B, is hereby approved, and the execution of a Notice of Sale by the Acting Director of Finance and Interim Chief Financial Officer of the City is hereby authorized with such changes as may be approved by the Acting Director of Finance and Interim Chief Financial Officer, in consultation with Bond Counsel and/or the Municipal Advisor. The Municipal Advisor and Bond Counsel are each hereby authorized to distribute the Notice of Sale in connection with the offering, marketing, and sale of the Taxable Refunding Notes.
6. Prior Actions and Execution of Taxable Refunding Notes. All actions taken to date by the Authorized Officers, employees, professionals and agents of the City, including Bond Counsel, the Municipal Advisor, and the Auditor (as hereinafter defined), with respect to the authorization, sale, issuance, execution and delivery of the Taxable Refunding Notes, including, but not limited to, submissions and applications to rating agencies and the distribution and dissemination of the Preliminary Official Statement and the Notice of Sale, as applicable, are hereby approved, ratified, adopted and confirmed, and each Authorized Officer is hereby authorized and directed to execute and deliver the Taxable Refunding Notes and any such agreements, documents or submissions required for the authorization, sale, issuance, execution and delivery of the Taxable Refunding Notes, and the City Clerk or Deputy Clerk is hereby authorized and directed to attest to the signatures of the Authorized Officers and to affix, imprint or reproduce the seal of the City on such Taxable Refunding Notes and, as applicable, on any such agreements, documents or submissions related to the authorization, sale, issuance, execution and delivery of the Taxable Refunding Notes. All Taxable Refunding Notes issued pursuant to this Resolution shall be executed by the Acting Director of Finance and Interim Chief Financial Officer and the Mayor of the City, under the seal of the City and attested by the City Clerk or Deputy Clerk. The Authorized Officers are each hereby authorized and directed to execute and deliver all documents, certificates, agreements, and instruments necessary or convenient in connection with the authorization, sale, issuance, execution and delivery of the Taxable Refunding Notes.
7. All other details or requirements of, as applicable, the Refunding Bond Ordinance and the Local Bond Law shall be determined and approved by an Authorized Officer of the City, upon consultation with Bond Counsel, the Municipal Advisor, and Samuel Klein and Company, CPAs, Auditor to the City (the “Auditor”), and such approvals are to be conclusively evidenced by his or her execution of the Taxable Refunding Notes as provided herein or on any other document, certificate, agreement or instrument related to the authorization, sale, issuance, execution and delivery of the Taxable Refunding Notes.
8. Continuing Disclosure. The City hereby covenants and agrees to comply with the secondary market disclosure requirements of Rule 15c2-12, as amended (the “Rule”), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, and agrees to covenant to such compliance, as required, in a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”), in substantially the form attached hereto as Exhibit C. In connection therewith, an Authorized Officer of the City, in consultation with Bond Counsel, the Municipal Advisor, and the Auditor to the City, is hereby authorized and directed to enter into and execute the Continuing Disclosure Certificate, evidencing the contractual undertaking of the City to comply with the requirements of the Rule and to deliver the Continuing Disclosure Certificate in connection with the offer and sale of the Taxable Refunding Notes. Notwithstanding the foregoing, failure of the City to comply with the covenants set forth in the Continuing Disclosure Certificate shall not be considered a default on the Taxable Refunding Notes; however, any Taxable Refunding Noteholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance, to cause the City to comply with its obligations hereunder and thereunder. The Authorized Officers, and any professionals or agents of the City acting on its behalf, are each hereby authorized and directed to execute and deliver all certificates, documents and agreements in connection therewith and, if necessary, to file budgetary, financial and operating data on an annual basis and notices of certain enumerated events as required to comply with, and in accordance with, the provisions of the Rule.
9. Rating. The Acting Director of Finance and Interim Chief Financial Officer is hereby authorized and directed, upon consultation with Bond Counsel, the Municipal Advisor, and the Auditor to the City, to, if applicable, submit information and financial data on the City to ratings agencies to obtain a rating on the Taxable Refunding Notes.
10. The Acting Director of Finance and Interim Chief Financial Officer of the City is hereby authorized and directed to determine all matters and terms in connection with the sale and issuance of the Taxable Refunding Notes, as applicable (including adjusting the principal amount of the Taxable Refunding Notes (not in excess of the amount authorized in Section 2 hereof)), the terms set forth in the Notice of Sale for Taxable Refunding Notes, and/or any matters set forth in this Resolution that are deemed necessary and advisable to change by the Acting Director of Finance and Interim Chief Financial Officer of the City in consultation with Bond Counsel, the Municipal Advisor, and the Auditor, prior to the sale or closing of the Taxable Refunding Notes, as applicable.
11. Further Action. The sale and issuance of the Taxable Refunding Notes is hereby authorized and approved. The terms and provisions of the Taxable Refunding Notes (including, without limitation, registered or book-entry form, the aggregate principal amount, the maturity date, interest rate and redemption provisions) shall be determined by the Acting Director of Finance and Interim Chief Financial Officer of the City as authorized by the Local Bond Law and the Refunding Bond Ordinance heretofore adopted by the Municipal Council, and this Resolution. The Authorized Officers are each hereby authorized and directed to take all actions which are necessary or convenient to effectuate the terms of this Resolution and the issuance, sale and delivery of the Taxable Refunding Notes, including, but not limited to, the execution and delivery of the Continuing Disclosure Certificate, the Tax Certificate (only if necessary as and to the extent the Taxable Refunding Notes are issued on a tax-exempt basis), and closing certificates, documents, agreements, instruments, and opinions in connection therewith, in consultation with, and upon the advice of, Bond Counsel, the Municipal Advisor, and the Auditor. The Authorized Officers are hereby authorized and directed to execute and deliver all documents necessary or convenient in connection with the issuance, sale and delivery of the Taxable Refunding Notes. All such actions heretofore or hereafter taken by the Authorized Officers and professionals of the City are hereby ratified, approved, and confirmed.
12. Pledge of the City. The full faith and credit of the City are hereby pledged to the punctual payment of the principal of and the interest on the Taxable Refunding Notes authorized by this Resolution. The Taxable Refunding Notes shall be direct, unlimited obligations of the City. The City shall have the power and shall be obligated to levy ad valorem taxes upon all taxable property within the City for the payment of such Taxable Refunding Notes and interest thereon, without limitation as to rate or amount.
13. Effective Date. This Resolution shall take effect immediately upon adoption.
STATEMENT
Resolution authorizing and approving the sale and issuance of refunding notes, Series 2026B, the preparation and distribution of a preliminary official statement and final official statement, entering into and execution of a continuing disclosure certificate and to undertake other actions in connection therewith.