Number
031675
Version
Substitute 2
Reference
Sponsor
THE CHAIR
Title
Substitute resolution authorizing the issuance and sale of tax and revenue anticipation notes under sec. 67.12(1), Stats. for the purpose of financing the operating budget on an interim basis in the amount not to exceed $125,000,000. (Comptroller)
Analysis
Resolution authorizing short-term notes under s. 67.12(1)(a), for the purpose of financing the City's operating budget on an interim basis.
Body
Whereas, S. 67.12(1)(a), Stats., authorizes any municipality entitled to receive state aids, taxes levied or other deferred payments to issue municipal obligations, in the same fiscal year such payments are due, in anticipation of receiving such payments in an amount not to exceed 60% of the total and actual and anticipated receipts in the fiscal year so long as such municipal obligations are repaid no later than 18 months after the first day of that fiscal year; and
Whereas, The City of Milwaukee's actual and anticipated general fund receipts for its fiscal year commencing on January 1, 2004 and ending on December 31, 2004 (the "2004 Fiscal Year") are $552,934,028 (the "Anticipated Receipts"); and
Whereas, The City of Milwaukee (the "City") is anticipating receipt of shared revenue payments of $41,032,200 and $232,515,800 from the State in the months of July and November, respectively, of the 2004 Fiscal Year pursuant to s. 79.02, Stats. (the "State Aid Payments"); and
Whereas, The City has levied property taxes for the general fund in the amount of $132,541,966 for, and due in, the 2004 Fiscal Year (the "Property Tax Levy"); and
Whereas, A portion of the Property Tax Levy is paid late and after the end of the 2004 Fiscal Year; and
Whereas, The City must pay its operating expenses as they become due throughout the 2004 Fiscal Year; and
Whereas, To meet the immediate needs of financing the operating expenses of the City, the City deems it necessary and in the best interest of the City to finance its operating expenses on an interim basis by borrowing money and issuing tax and revenue anticipation notes of the City pursuant to the provisions of s. 67.12(1)(a), Stats., which borrowing shall be in an amount not to exceed $125,000,000, which is less than 60% of the Anticipated Receipts for the 2004 Fiscal Year, and which borrowing shall not extend beyond June 30 of the next fiscal year; and
Whereas, The City shall pledge portions of the State Aid Payments and the Property Tax Levy as security for the repayment of the tax and revenue anticipation notes; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee, that it hereby and herewith authorizes and declares its purpose to issue tax and revenue anticipation notes (the "Notes") pursuant to the provisions of s. 67.12(1)(a), Stats., in an amount not to exceed $125,000,000 for the purpose of financing the operating budget on an interim basis pending receipt of the State Aid Payments and the Property Tax Levy; and, be it
Further Resolved, That the portion of the Notes issued pending receipt of the Property Tax Levy shall not exceed $10,000,000; and, be it
Further Resolved, That the Notes be sold by the Commissioners of the Public Debt at public competitive sale; or to the Public Debt Amortization Fund for the purpose of investment; or to the Public Debt Amortization Fund for immediate cancellation; and, be it
Further Resolved, That the Notes shall be issued on or before December 31, 2004, and may be issued as one or more series, at one or more times, as determined by the Commissioners of the Public Debt; and, be it
Further Resolved, That the Notes shall be sold at a price of not less par and accrued interest thereon; and, be it
Further Resolved, That the Notes shall be dated the date of initial delivery of the Notes, shall have a maturity not to exceed thirteen (13) months, but in no event later than eighteen (18) months from the first day of the 2004 Fiscal Year, shall not be subject to optional redemption prior to maturity, and shall be registered in the name CEDE & CO., as nominee of The Depository Trust Company, New York, New York; provided however, that should any promissory notes be owned by the Public Debt Amortization Fund, such note may be registered in the name of the Public Debt Amortization Fund; and, be it
Further Resolved, That the Notes shall be designated, and bear interest, payable semi-annually or at maturity, at coupon rates not to exceed 7.5%, with an issue True Interest Cost Rate not to exceed 5.00%, as determined by the Commissioners of the Public Debt; and, be it
Further Resolved, That the Continuing Disclosure Certificate, in substantially the form of the Supplemental Certificate authorized by File Number 031384 adopted on February 10, 2004, is authorized to be executed and delivered by the Comptroller for the Notes; and, be it
Further Resolved, That the City authorizes and directs the appropriate officers and employees of the City to take all action necessary or appropriate to comply with and carry out all of the provisions of the Continuing Disclosure Certificate as amended from time to time. Notwithstanding any other provision of the resolution, failure of the City to perform in accordance with the Continuing Disclosure Certificate shall not constitute a default under the resolution and the Continuing Disclosure Certificate may be enforced only as provided therein; and, be it
Further Resolved, That the Common Council hereby declares that as security for the repayment of the Notes with interest thereon, the City hereby pledges and agrees to irrevocably segregate, in a special fund, the State Aid Payments and the Property Tax Levy, in an amount sufficient to pay the principal of and interest on the Notes as the same becomes due; and, be it
Further Resolved, That as additional security for the repayment of the Notes and interest thereon, the City hereby declares that it will irrevocably pledge all other Anticipated Receipts not yet paid as of the date of delivery of the Notes, and which are not otherwise pledged or assigned. This specifically includes Anticipated Receipts attributable to the 2004 Fiscal Year which are not received prior to the end of the 2004 Fiscal Year; and, be it
Further Resolved, That if the Notes mature after December 31, 2004, the proper City officers be and hereby are authorized and directed to irrevocably deposit with the City's fiscal agent, on or before December 31, 2004, segregated State Aid Payments and other available revenues, in an amount sufficient, with interest thereon, to pay, when due, the principal of and interest on the portion of the Notes issued in anticipation of the State Aid Payments; and, be it
Further Resolved, That with respect to the issuance of the Notes, the City covenants with the holders from time to time of the Notes that (i) throughout the term of the Notes and (ii) through the date that the final rebate, if any, must be made to the United States in accordance with Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") it will comply with the provisions of Sections 103 and 141 through 150 of the Code, and the applicable regulations of the Internal Revenue Service adopted thereunder, that must be satisfied in order that interest on the Notes shall be and continue to be excluded from gross income for federal income tax purposes under said Section 103.
Requestor
Comptroller
Drafter
RSL
3/22/2004
PD-6762a2W.doc