Title
Dept/ Agency: Finance
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Confirming Bond Sale
Amount to be Financed: $7,775,000.00
Source of Appropriation: Bond Anticipation Notes
Purchaser:
Project Information:
(Description/ Project No./Amount Appropriated/Ordinance No.)
RESOLUTION DETERMINING CERTAIN MATTERS IN CONNECTION WITH THE SALE AND ISSUANCE NOT TO EXCEED $7,775,000.00 AGGREGATE PRINCIPAL AMOUNT OF GENERAL OBLIGATION BOND ANTICIPATION NOTES, SERIES 2022, OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY.
Additional Information:
These Bond Anticipation Notes are being sold to pay the notes that mature on February 22, 2022.
There will be a principal pay-down of $100,000.00.
body
WHEREAS, the Municipal Council of the City of Newark, in the County of Essex, New Jersey (the "City"), adopted bond ordinance number 6PSF-a(S) on November 27, 2018, and Resolution 7R4-b adopted by the City on February 6, 2019, which authorized the original issuance of bonds or notes of the City to finance the acquisition of sixteen (16) properties (land, buildings and improvements) from the Essex County Improvement Authority (the "ECIA Ordinance"); and
WHEREAS, in February 2019, the City issued its General Capital Improvement Bond Anticipation Notes (ECIA Property Acquisition), Series 2019 in an aggregate principal amount not to exceed $5,500,000.00 (the “2019 Notes”), under the ECIA Ordinance for the purpose of providing for a portion of the costs of acquiring the ECIA Properties as described in the ECIA Ordinance, and paying costs of issuance with respect thereto; and
WHEREAS, the City renewed such 2019 Notes on February 26, 2020 and again on February 23, 2021 the “Series 2021A Notes; and
WHEREAS, such Series 2021A Notes issued on February 23, 2021 mature on February 22, 2022; and
WHEREAS, the City desires to renew the Series 2021A Notes on February 18, 2022 in the amount of $5,400,000.00 because such renewal requires a legally required pay down in the amount of $100,000.00; and
WHEREAS, the City adopted Bond Ordinance 6PSF-b on November 5, 2020, which authorized improvements to the Green Street/Liner Street Building and the issuance not to exceed $2,375,000.00 in bond or notes to finance part of the costs of such improvements (the “Green Street Ordinance” and together with the ECIA Ordinance, the “Ordinances”); and
WHEREAS, the City has determined to renew the Series 2021A Notes for an additional one (1) year period in the amount of $5,400,000.00 and to authorize the renewal of the Series 2021B Notes in the amount of $2,375,000.00 to refund $2,375,000.00 bond anticipation notes maturing February 22, 2022 that were originally issued February 23, 2021 to fund the Green Street Ordinance through the issuance of $7,775,000.00 aggregate principal amount of General Obligation Notes, Series 2022 (the “Series 2022 Notes”) by negotiated sale pursuant to the terms and conditions of the attached Note Purchase Agreement (the “Purchase Contract”) described herein; and
WHEREAS, in connection with the offering and sale of the Series 2022 Notes, the City determines to authorize the distribution of a Preliminary Official Statement and final Official Statement with respect to the Series 2022 Notes, and to authorize the execution and delivery of a Continuing Disclosure Certificate.
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, STATE OF NEW JERSEY THAT:
Section 1. Confirmation of Intention to Issue General Obligation Notes. Pursuant to the provisions of the Ordinances and the within Resolution, the Director of the Department of Finance/Chief Financial Officer is hereby authorized and directed to sell, issue, execute and deliver the $7,775,000.00 principal amount of General Obligation Notes, Series 2022 Notes (the “Series 2022 Notes”) consisting of the following: $5,400,000.00 principal amount of General Capital Improvement Bond Anticipation Notes (ECIA Property Acquisition) (Federally Taxable), Series 2022A (the “Series 2022A Notes”) and $2,375,000.00 principal amount of General Capital Improvement Bond Anticipation Notes (Green Street Building Improvements), Series 2022B (the “Series 2022B Notes”) in accordance with this Resolution. The Series 2022 Notes will be dated and shall mature within one (1) year as shall be determined by the Director of the Department of Finance/Chief Financial Officer. The Series 2022 Notes may be additionally renewed from time to time by the Chief Financial Officer in accordance with the provisions of the Local Bond Law (N.J.S.A. 40A:2-8.1) (the “Local Bond Law”). The Series 2022 Notes shall not be subject to redemption prior to maturity.
Section 2. Sale and Award Delegation. It is hereby delegated to and the Director of the Department of Finance/Chief Financial Officer is hereby authorized and directed to sell and award the purchase of the Series 2022 Notes to the Underwriter (as hereinafter defined) pursuant to the terms and conditions of the Note Purchase Contract, dated the date of sale, by and between the City and the Underwriter (the “Purchase Contract”). The Purchase Contract in substantially the form attached hereto as Exhibit A is hereby approved, and the execution of a Note Purchase Contract by the Director of the Department of Finance/Chief Financial Officer of the City is hereby authorized with such changes as may be approved by the Director of the Department of Finance/Chief Financial Officer, upon the advice of the City’s bond counsel (the “Bond Counsel”) and the City's municipal advisor (the “Municipal Advisor”). Oppenheimer and Co., Inc., is hereby appointed underwriter (the “Underwriter”), for the Series 2022 Notes on such terms and with such compensation as may be determined and approved by the Chief Financial Officer of the City. The execution and delivery of the Purchase Contract by the Director of the Department of Finance/Chief Financial Officer shall be conclusive evidence of the approval thereof and no further action or approval by the Municipal Council shall be required.
Section 3. Authorization for Official Statement. The distribution by the City of a Preliminary Official Statement in connection with the sale of the Series 2022 Notes is hereby authorized. There is hereby delegated to the Chief Financial Officer the authority to approve the Preliminary Official Statement with such insertions, deletions and changes therein and any supplements thereto as Bond Counsel may advise. The Business Administrator or Director of the Department of Finance/Chief Financial Officer is hereby authorized and directed to deem the Preliminary Official Statement "final" within the meaning of Rule 15c2-12 of the Securities and Exchange Commission and to execute and deliver a certificate to the Underwriter to that effect. The Business Administrator and the Director of the Department of Finance/Chief Financial Officer are each hereby authorized and directed to approve the contents and terms of the final Official Statement with respect of the sale of the aforementioned Series 2022 Notes in substantially the form of the Preliminary Official Statement. The Business Administrator and the Director of the Department of Finance/Chief Financial Officer are each hereby authorized and directed to execute such Official Statement on behalf of the City, in substantially such form, with such insertions, deletions and changes therein and any supplements thereto as Bond Counsel may advise, including revisions to reflect the terms of the sale of the Series 2022 Notes, including purchase price, interest rate and yield, and the City officer executing the same may approve, such approval to be conclusively evidenced by such City officer's execution thereof. The distribution of the Preliminary Official Statement and Official Statement by the Underwriter on behalf of the City in connection with the offering and sale of the Series 2022 Notes is hereby authorized and approved.
Section 4. Continuing Disclosure. The form of the Continuing Disclosure Certificate in substantially the form attached hereto as Exhibit B is hereby approved, and the execution of such Continuing Disclosure Certificate by the Director of the Department of Finance/Chief Financial Officer of the City is hereby authorized. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate executed by the City and dated the date of issuance and delivery of the Series 2022 Notes, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered a default on the Series 2022 Notes; however, any holder may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the City to comply with its obligations under this Section.
Section 5. Forms of Note Certificates. The forms of the Note certificates substantially in the forms attached hereto as Exhibit C-1 and C-2 are each hereby approved. The Note certificates shall be executed in the name of the City by the Mayor of the City of Newark, the Chief Financial Officer and attested to by the City Clerk and the seal of the City affixed thereto. The executed Notes are hereby authorized to be delivered to the Underwriter upon receipt of payment of the purchase price for the Series 2022 Notes.
Section 6. Further Action. Any matter relating to the award, sale or execution of the Series 2022 Notes which has been delegated by the Ordinances to the Director of the Department of Finance/Chief Financial Officer may be performed, and any document authorized by this Resolution may be executed by the Mayor of the City of Newark, the City Clerk, the Business Administrator and or the Director of the Department of Finance/Chief Financial Officer in accordance with the Local Bond Law (collectively, the “Authorized Officers”). On behalf of the City, the Authorized Officers of the City are each authorized and directed to take all steps which are necessary or convenient to effectuate the terms of this Resolution with respect to the issuance, sale, execution and delivery of the Series 2022 Notes, including, but not limited to, the execution of any and all other closing documentation. All such actions heretofore or hereafter taken are hereby ratified, approved and confirmed.
Section 7. Tax Consequences. Interest on the $5,400,000.00 General Capital Improvement Bond Anticipation Notes (ECIA Property Acquisition) (Federally Taxable), Series 2022A shall be includable in gross income for federal income tax purposes. Interest on the $2,375,000.00 General Capital Improvement Bond Anticipation Notes (Green Street Building Improvements), Series 2022B is not includable in gross income for federal income tax purposes. Interest on the Series 2022B Notes and any gain in the sale thereof are not includable as gross income under the New Jersey Income Tax Act.
The City hereby covenants to comply with the continuing requirements of the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder (the “Code”) in order for the interest on the Series 2022B Notes to be and remain excludable from gross income for federal income tax purposes.
STATEMENT
This Resolution authorizes the renewal, issuance and sale of the Series 2022 Notes, the distribution of a Preliminary Official Statement and Final Official Statement, approval of the form of a Purchase Contract and the distribution thereof containing the terms for the offering and sale of the Series 2022 Notes, approval of the Forms of the Note certificates and approval of the form of the Continuing Disclosure Certificate regarding the sale of the City's Series 2022 Notes, in an aggregate amount not exceeding $7,775,000.00.