Title
Dept/ Agency: Finance
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Confirming Bond Sale
Amount to be Financed: $15,000,000.00
Source of Appropriation: Bonds/Notes
Purchaser: U.S. Bank National Association
Project Information:
(Description/ Project No./Amount Appropriated/Ordinance No.)
RESOLUTION OF THE CITY OF NEWARK, COUNTY OF ESSEX, STATE OF NEW JERSEY ACTING AS REDEVELOPMENT ENTITY AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SALE OF MASS TRANSIT ACCESS TAX REVENUE BONDS/PROJECT NOTES (MULBERRY PEDESTRIAN BRIDGE REDEVELOPMENT PROJECT) (CITY SECURED); PROVIDING FOR THE FORM AND OTHER DETAILS OF SAID BONDS/PROJECT NOTES; APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE FORMS OF A TRUST INDENTURE AND A PLEDGE AND ASSIGNMENT AGREEMENT; AND DELEGATING THE APPROVAL OF PURCHASE AGREEMENTS AND SUBSIDY AGREEMENTS, AS APPLICABLE.
Additional Information:
These Notes in the amount of $15 Million is part of the total project cost not to exceed $110 Million, as previously authorized.
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WHEREAS, the P.L. 2019, c. 289 specifically N.J.S.A. 40:48C-1.7, et seq., (the “Mass Transit Access Parking Tax Law”) authorized municipalities of a certain population to impose a 3.5% tax within such municipality (the “Mass Transit Access Tax”) and to use the proceeds therefrom for the exclusive purposes of financing and funding capital improvements for pedestrian access to mass transit stations, See N.J.S.A. 40:48C-1.7(b), (the “Eligible Project”); and
WHEREAS, pursuant to Ordinance 6PSF-e, adopted by the Municipal Council on March 24, 2020 (the “Mass Transit Access Tax Ordinance”), the City of Newark (the “City”) of the City has heretofore authorized the imposition of a 3.5% Mass Transit Access Tax on fees generated from the parking, garaging and storing of motor vehicles, subject to certain exemptions and exceptions; and
WHEREAS, pursuant to and in accordance with the provisions of the Mass Transit Access Parking Tax Law, specifically N.J.S.A. 40:48C-1.7(b), and the provisions of the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq., (the “Local Redevelopment and Housing Law” or the “LRHL”), specifically, N.J.S.A. 40A:12A-29, -30, -37 and -41, the City may fund or finance capital improvements for pedestrian access and, issue bonds and project notes for the purpose of financing the Eligible Project, which bonds and project notes shall be payable from and secured by, inter alia, Mass Transit Access Tax revenues and the Subsidy Ordinance as previously adopted by the City On October 20, 2021 (the “Subsidy Ordinance”), authorizing the execution and delivery of one or more Subsidy Agreements (collectively, the “Subsidy Agreement”); and
WHEREAS, the City is desirous of constructing the Mulberry Pedestrian Bridge Project which is an Eligible project pursuant to the Mass Transit Access Parking Tax Law and which is located in areas in need of redevelopment and rehabilitation within the City, including the Downtown Core Redevelopment Plan, as amended, and the Living Downtown Plan, as amended, as applicable, to provide commuter and pedestrian access from and to Penn Station to and from the Ironbound and Downtown areas within the City; and
WHEREAS, to fund the Eligible Project, the City acting as Redevelopment Entity intends to issue its Mass Transit Access Tax Revenue Bonds (Mulberry Pedestrian Bridge Redevelopment Project) (City Secured) (the “Bonds”) or Project Notes issued in anticipation of the issuance of such Bonds (the “Project Notes” together with the Bonds, the “Obligations”) in the aggregate principal amount not to exceed $110,000,000.00 at any one time outstanding to fund, (a) as to the Bonds: (1) the costs of constructing the Eligible Project; and (2) capitalized interest on the Bonds, if any; and (3) a debt service reserve fund on the Bonds which is equal to the debt service reserve fund requirement which shall not exceed the lesser of (a) 10% of the aggregate amount of the Bonds, (b) 125% of the average annual debt service on the Bonds, or (c) the maximum annual debt service on the Bonds; and (4) the refunding the principal of and interest on the Project Notes at maturity or earlier redemption, as applicable; and (5) the costs and expenses incurred in connection with issuing the Bonds; and to fund (b) as to the Project Notes (1) preliminary, design, planning, consulting and professional fees and soft costs related to the Eligible Project; and (6) the costs and expenses of issuing the Project Notes pursuant to the Local Redevelopment and Housing Law and to sell the Bonds and Project Notes at private sale pursuant to N.J.S.A. 40A:12A: 29(a)(3); and
WHEREAS, in accordance with Mass Transit Access Tax Ordinance, the Mass Transit Access Parking Tax Law, the Local Redevelopment and Housing Law,, the City now desires to authorize and approve the sale and issuance of the Obligations in the aggregate principal amount not to exceed $110,000,000.00 at any one time outstanding, pursuant to the Mass Transit Access Parking Tax Law, Mass Transit Access Tax Ordinance, this bond resolution and a Trust Indenture by and between the City and the Trustee thereunder, as may be amended and supplemented from time to time (collectively the “Trust Indenture”); and
WHEREAS, in connection with the sale and issuance of the Obligations, the City also desires to approve and authorize the forms of and the entering into of the Trust Indenture and the hereinafter defined Pledge and Assignment Agreement and the delegation of the approval of one or more Bond or Project Note Purchase Agreements (collectively, the “Purchase Agreement”) and Subsidy Agreement, as applicable.
NOW THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The City hereby authorizes the issuance and sale of the Obligations of the City, acting in the capacity of Redevelopment Entity, in the aggregate principal amount not to exceed $110,000,000.00 at any one time outstanding. The proceeds of the Bonds shall be applied for the purpose of: (i) paying the costs of planning, developing and constructing the Eligible Project, and (ii) funding capitalized interest on the Bonds, if any; and (iii) funding the debt service reserve fund requirement for the Bonds; and (iv) refunding the principal of and interest on the Project Notes at maturity or earlier redemption, as applicable; and (v) paying the costs of issuing the Bonds as shall be provided in the Trust Indenture.
2. The Bonds will be dated as of their date of delivery, will mature on and be subject to prior redemption on the date and in the years and in the amounts set forth in a Supplemental Trust Indenture adopted by the City or an award certificate executed by the City’s Director of the Department of Finance (the “Award Certificate”). The Bonds shall bear interest as provided in the Supplemental Trust Indenture or the Award Certificate. The Bonds shall be subject to optional, mandatory and sinking redemption at the times and the redemption prices as shall be provided in the Supplemental Trust Indenture or the Award Certificate.
3. The Bonds shall be issued as registered bonds in book entry only form and shall be executed by the City and authenticated by the Trustee as shall be provided in the Trust Indenture and Supplemental Indenture and Award Certificate and shall be issued for a term not to exceed forty (40) years.
4. The Bonds shall be secured by the pledge and assignment of 100% of the Mass Transit Access Tax revenues and the Subsidy Ordinance to the extent required to replenish any deficiencies in the debt service reserve fund in an amount that shall not exceed the debt service reserve requirement, as shall be provided in the Pledge and Assignment Agreement and the Trust Indenture, as supplemented, and the full faith and credit of the City shall not be pledged to the payment of the principal of and the interest on the Bonds, EXCEPT with respect to and limited by the Subsidy Ordinance and Subsidy Agreement with respect thereto. A debt service reserve fund for the payment of debt service on the Bonds shall be initially funded in an amount not to exceed the debt service reserve funds requirement from proceeds of the Bonds.
5. There is hereby authorized an initial Series of Project Notes, designated as Mass Transit Access Tax Revenue (Mulberry Pedestrian Bridge Redevelopment Project (City Secured), Series 2021 Project Notes. The Project Notes will be issued to pay: (i) preliminary design, planning, architectural, engineering, consulting and permitting and approval fees and expenses, and legal and other professional fees; and (ii) soft costs associated with the issuance of the Project Notes.
6. The Project Notes will be issued in an amount not to exceed $15,000,000.00, including renewals thereof, will be dated as of their date of delivery, and will mature on and be subject to prior redemption as set forth in the Trust Indenture and/or the Award Certificate. The Project Notes shall bear interest set forth in the Trust Indenture or the Award Certificate. It is expected that the Project Notes will be refunded with a portion of the proceeds of the Bonds.
7. The Project Notes shall be issued in registered book entry only form and shall be executed by the City and authenticated by the Trustee as shall be provided in the Trust Indenture.
8. The payment of the principal of and interest on the Project Notes when due and owing at maturity or earlier redemption, as applicable, shall be secured by: (i) the pledge and assignment of 100% of the Mass Transit Access Tax revenues; and (ii) Revenues; and (iii) the Subsidy Ordinance and Subsidy Agreement, to the extent payment is not otherwise provided by the City.
9. The Trust Indenture pertaining to the Obligations in substantially the form attached to this Resolution as Exhibit A and made a part hereof, is hereby approved and the Mayor of the City of the Newark and the City Clerk are each hereby authorized and directed to execute and deliver the Trust Indenture with such changes, revisions or alterations therefor as may be approved by the officer executing the same after consultation with the City’s Director of the Department of Finance, Corporation Counsel and the City’s Bond Counsel (“Bond Counsel”), such approval to be conclusively evidenced by the execution thereof U.S. Bank National Association is hereby appointed and designated as the initial trustee, registrar and paying agent with respect to the Obligations under the Trust Indenture (the “Trustee”).
10. The Pledge and Assignment Agreement from the City to the Trustee assigning the Mass Transit Access Tax revenues and other revenues and funds for the payment of the Obligations pursuant to the Subsidy Ordinance and Subsidy Agreement pledged as security for Obligations shall be substantially in the form attached to this Resolution as Exhibit B (the “Pledge and Assignment Agreement”) and made a part hereof, is hereby approved and the Mayor of the City of Newark and the City Clerk are each hereby authorized and directed to execute and deliver the Pledge and Assignment Agreement with such changes, revisions or alterations therefor as may be approved by the officer executing the same after consultation with the City’s Corporation Counsel and/or the City’s Bond Counsel, such approval to be conclusively evidenced by the execution thereof. The City Clerk of the City is hereby authorized and directed to attest to the signature of the Mayor of the City of Newark and to affix the seal of the City thereto.
11. There is hereby delegated to the Director of the Department of Finance/Chief Financial Officer the authority to approve one (1) or more Purchase Agreements by and between the City and the purchaser thereof with respect to the Obligations (collectively, the “Purchase Agreement”), and the Director of the Department of Finance/Chief Financial Officer is hereby authorized and directed to execute and deliver each such Purchase Agreement, as applicable, with such changes, revisions or alterations therefor as may be approved by the officer executing the same after consultation with the City’s Corporation Counsel and/or the City’s Bond Counsel, such approval to be conclusively evidenced by the execution thereof and no further approval of such Purchase Agreement in connection with the sale of the Obligations shall be required by the Municipal Council.
12. There is hereby delegated to the Director of the Department of Finance/Chief Financial Officer the authority to approve one (1) or more Subsidy Agreements by and between the City and the Trustee with respect to the Obligations (collectively, the “Subsidy Agreement”), and the Mayor of the City of Newark or the Director of the Department of Finance/Chief Financial Officer are each hereby authorized and directed to execute and deliver each Subsidy Agreement, as applicable, with such changes, revisions or alterations therefor as may be approved by the officer executing the same after consultation with the City’s Corporation Counsel and the City’s Bond Counsel, such approval to be conclusively evidenced by the execution thereof and no further approval of the Subsidy Agreement in connection with the sale of the Obligations shall be required by the Municipal Council. The City Clerk is hereby authorized to attest to the signature of the Mayor of the City of Newark or the Director of the Department of Finance on each Subsidy Agreement (as applicable) and to affix the seal of the City thereto.
13. The Mayor of the City of Newark, the Deputy Mayor/Director of the Department of Economic and Housing Development, the Director of the Department of Finance/Chief Financial Officer, the Business Administrator and the City Clerk (each an “Authorized Officer”) are each hereby designated, authorized and directed to determine or perform, as applicable, any other matters or details relating to the sale and issuance of the Obligations, to do or perform or cause to be done or performed any and all acts as such officers and the City’s Corporation Counsel and the City’s Bond Counsel may deem necessary or appropriate in order to effect the proper issuance, execution and delivery of the Obligations, and to execute and deliver, among other things, and any and all instruments, opinions, affidavits, certificates, resolutions, documents or other papers as may be deemed necessary.
14. The Obligations shall be special and limited obligations of the City, payable solely out of Mass Transit Access Tax revenues and other money derived under the Funds and Accounts held under the Trust Indenture and the Pledge and Assignment Agreement and pledged thereto. The payment of the principal of, premium, if any, and interest on the Obligations shall be secured by a pledge and assignment of monies and certain rights and obligations of the City under the Trust Indenture as provided in the Trust Indenture and the Subsidy Ordinance and Subsidy Agreement. Neither the members of the Municipal Council of the City nor any person executing the Obligations issued pursuant to this Bond Resolution and the Trust Indenture shall be liable personally on the Obligations by reason of the issuance thereof. The Obligations shall not in any way be a debt or liability of the State, or any political subdivision thereof, either legal, moral or otherwise, except the City as acting Redevelopment Entity and except with respect to the City to the extent provided in and limited by the Subsidy Ordinance and the Subsidy Agreement.
15. NW Capital Markets Inc., is hereby appointed as the underwriter for the Obligations (the “Underwriter”) with such compensation as shall be negotiated by the Director of Finance and the Underwriter. The Director of the Department of Finance is hereby authorized and directed to approve, execute and deliver the Purchase Agreement between the City and the Underwriter, with respect to the issuance and sale of such Obligations, with such insertions, deletions and changes therein and any supplements thereto as shall be negotiated with the Underwriter and as the City’s Bond Counsel may advise and the Director of the Department of Finance executing the same may approve, such approval to be evidenced by her execution thereof.
16. PFM (Public Financial Management LLC), municipal advisor to the City and DeCotiis, FitzPatrick, Cole & Giblin, LLP, the City’s Bond Counsel and NW Capital Markets, Inc., the Underwriter, and its counsel are each hereby authorized and directed to prepare and to distribute one (1) or more Preliminary Official Statement(s) on behalf of the City in connection with the sale of each of the Obligations. The form and content of each such Preliminary Official Statement shall, prior to the distribution thereof, be approved by the City’s Director of the Department of Finance on behalf of the City. Subsequent to obtaining such approval, the Preliminary Official Statement may be revised, if necessary, and may contain additional terms and information relating to the sale of the Obligations, which Preliminary Official Statement shall constitute the final Official Statement. The Preliminary Official Statement as so prepared and its use and distribution by the Underwriter in connection with the sale and issuance of the Obligations shall be approved by the City’s Director of the Department of Finance. The City’s Director of the Department of Finance is hereby authorized and directed to deem the Preliminary Official Statement “final” within the meaning of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 and to provide written evidence relating thereto in form acceptable to Bond Counsel. The City’s Director of the Department of Finance is hereby authorized and directed to execute the final Official Statement.
17. To the extent the Obligations are issued as a series of tax exempt obligations (which determination shall be made prior to sale of the Obligations), the City shall covenant in a Tax and Arbitrage Certificate that it will comply with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”) and that it will take no action or omit to take any action that would cause the interest on such series of Obligations to lose its tax exemption under the Code. The Director of the Department of Finance/Chief Finance Officer is hereby authorized and directed to execute and deliver the Tax and Arbitrage Certificate prepared by the City’s Bond Counsel in connection with the issuance of the Obligations.
18. The City may finance the Eligible Project with tax-exempt Obligations but may pay for certain costs of the Eligible Project (“Project Costs”) prior to the issuance of such Obligations with funds of the City which are not proceeds of tax-exempt obligations. The City desires to preserve its right to treat an allocation of proceeds of the Obligations to the reimbursement of Project Costs paid prior to the issuance of Obligations as an expenditure for such Project Costs to be reimbursed for purposes of Sections 103 and 141-150 of the Internal Revenue Code (the “Code”). The City reasonably expects to reimburse its expenditure of Project Costs paid prior to the issuance of the Obligations with proceeds of the Obligations. This section is intended to be and hereby is a declaration of the City's official intent to reimburse the expenditure of Project Costs paid prior to the issuance of the Obligations with the proceeds of a borrowing to be incurred by the City, in accordance with Treasury Regulations Section 150-2. The maximum principal amount of the Obligations expected to be issued to finance the Eligible Project is $110,000,000.00. The Project Costs to be reimbursed with the proceeds of the Obligations will be “capital expenditures” in accordance with the meaning of Section 150 of the Code. No reimbursement allocation will employ an “abusive arbitrage device” under Treasury Regulations Section 1.148-10 to avoid the arbitrage restrictions or to avoid the restrictions under Sections 142 through 147 of the Code. The proceeds of the Obligations used to reimburse the City for Project Costs, or funds corresponding to such amounts, will not be used in a manner that results in the creation of “replacement proceeds,” including “sinking funds”, “pledged funds,” or funds subject to a “negative pledge” (as such terms are defined in Treasury Regulations Section 1.148-1) of the Obligations or another issue of debt obligations of the City, other than amounts deposited into a “bona fide debt service fund” (as defined in Treasury Regulations Section 1.148-1). All reimbursement allocations will occur not later than 18 months after the later of: (i) the date the expenditure from a source other than the Obligations is paid, or (ii) the date the Eligible Project is placed in service or abandoned but in no event later than three (3) years after expenditure is paid.
19. There is hereby delegated to the Director of the Department of Finance/Chief Financial Officer the power and such Director of the Department of Finance/Chief Financial Officer is hereby authorized and directed to approve, execute and deliver one or more Continuing Disclosure Agreements between the City and the Trustee for the benefit of the purchasers of the Obligations in accordance with the provisions of the Securities and Exchange Commission Rule 15c2-12 (the “Rule”), including any revisions, changes and amendments which shall be approved by the Director of the Department of Finance/Chief Financial Officer, in consultation with the City’s Bond Counsel, such approval to be conclusively evidenced by her execution thereof.
20. This resolution shall take effect immediately upon adoption.
STATEMENT
This Resolution authorizes the issuance and sale by the City not to exceed $110,000,000.00 of the City’s Mass Transit Access Tax Revenue Bonds and Project Notes (Mulberry Pedestrian Bridge Redevelopment Project) (City Secured) at any one time outstanding, and approves the forms of the Trust Indenture and the Pledge and Assignment Agreement and delegates to and authorizes the Director of the Department of Finance/Chief Financial Officer to approve the terms of and execute one or more Subsidy Agreements, negotiate one or more Purchase Agreements with the Underwriter selected by the City in connection therewith, and to execute and deliver one or more Continuing Disclosure Certificates in connection with the issuance of the Obligations.