Number
250252
Version
SUBSTITUTE 1
Reference
Sponsor
THE CHAIR
Title
Substitute resolution authorizing the issuance of up to $275,000,000 of school revenue anticipation notes, and a purpose for Direct Loan Notes, for the purpose of financing the operating budget of the Milwaukee Public Schools on an interim basis.
Sections
Analysis
This resolution authorizes the issuance by the City of Milwaukee (the “City”) of its school revenue anticipation notes up to the aggregate amount of $275,000,000 (the “RANs”) under Section 67.12(1), Wisconsin Statutes, for the purpose of financing the operating budget of the Milwaukee Public Schools (“MPS”) on an interim basis. This resolution pledges revenues payable to the School Operations Fund during the fiscal year to the payment of debt service on the RANs. This resolution authorizes and directs the proper City officers to segregate state general school aid revenues payable under Section 121.15, Wisconsin Statutes, to the School Operations Fund in June of the Fiscal Year (as defined herein) to secure payment of the principal of, and interest on, the RANs when due. Finally, this resolution authorizes the proper City officers to deposit with the City’s fiscal agent an amount sufficient together with earnings thereon to pay, when due, the principal of and interest on the RANs.
Body
Whereas, Milwaukee Board of School Directors (the “Board”) has determined that MPS is temporarily in need of funds in the amount not to exceed $275,000,000 to meet the immediate expenses of operating and maintaining the public instruction in MPS during its fiscal year commencing July 1, 2025 and ending June 30, 2026 (the “Fiscal Year”);
Whereas, the City deems it necessary and in the best interest of the City and MPS that funds be borrowed and RANs be issued pursuant to the provision of Section 67.12(1)(a), Wisconsin Statutes, to borrow money in anticipation of revenues for school purposes;
Whereas, the Commissioners of the City’s Public Debt Commission (the “PDC”) are authorized and directed by the City to determine and approve the final terms of the RANs;
Whereas, the City may use general obligation debt to temporarily provide revenue anticipation financing, and the City desires to refinance that general obligation debt with revenue anticipation debt; and
Whereas, resolutions 180864, 210940, and 221095 collectively authorize up to $400,000,000 of Direct Loans outstanding from time to time (the “Direct Loan Notes”);
Now, Therefore, be it:
Resolved, that up to $150,000,000 of Direct Loan Notes may be issued, within the program limitations previously authorized, at the discretion of the City’s Comptroller to provide temporary financing pending the issuance of the RANs. No approval of the Commissioners of the PDC is required for the issuance of the temporary financing. The amount issued to refund temporary financing for RAN purposes shall not count against the amount of RANs authorized to be issued. For budgetary purposes, the amount of RANs issued to refund the temporary financing shall be considered “refunding purposes”; and, be it
Further Resolved, the RANs shall be issued pursuant to the provisions of Section 67.12(1), Wisconsin Statutes, and the attached MPS Revenue Anticipation Note Resolution as follows:
1. It is hereby delegated to the Commissioners of the PDC the power with respect to the RANs to determine, approve, and carry out the final terms of the RANs, subject to the parameters set forth below.
2. The RANs shall be issued on or before March 1, 2026.
3. The RANs shall be sold at a price of not less than par and accrued interest thereon and shall bear interest payable semi-annually or at maturity and shall bear coupon rates not to exceed 7% per annum (on an aggregate basis), with an issue true interest cost not to exceed 5% per annum (on an aggregate basis).
4. The Commissioners of the PDC shall establish the due date(s) no later than December 31, 2026 and may establish call dates at par, for the RANs.
5. In accordance with authorization from the Board, that the Governing Body hereby declares that it irrevocably pledges as security for the repayment of the RANs and interest thereon, revenues of the School Operations Fund attributable to the Fiscal Year which are due MPS, in the Fiscal Year, and not yet paid as of the date of delivery of the RANs, and which are not otherwise pledged and/or applied.
6. The City shall covenant (on its behalf and on behalf of MPS) with the holders from time to time of tax-exempt RANs that it will comply with the provisions of Sections 103 and 141 through 150 of Internal Revenue Code of 1986, as amended (the “Code”), and the applicable regulations of the Internal Revenue Service adopted thereunder, that must be satisfied in order that interest on said RANs shall be and continue to be excluded from gross income for federal income tax purposes under Section 103 of the Code.
Requestor
Comptroller
Drafter
Comptroller
Joshua Benson
PD-8712bW.rtf