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12/29/2008 Special City Council MeetingCITY OF MONROE SPECIAL CITY COUNCIL MEETING 300 WEST CROWELL STREET MONROE, NC 28112 DECEMBER 29, 2008 - 8:30 A.M. AGENDA www.monroenc.org 1. Discussion of Natural Gas Pipeline Project t ' Special City Council Meeting December 29, 2008 Page 123 SPECIAL CITY COUNCIL MEETING CITY HALL ~' 300 W. CROWELL STREET MONROE, NORTH CAROLINA, 28112 DECEMBER 29, 2008 - 8:30 A.M. MINUTES www.monroenc.org The City Council of the City of Monroe, North Carolina, met in Special Session at City Hall, 300 W. Crowell Street, Monroe, North Carolina, at 8:30 a.m. on December 29, 2008 with Mayor Bobby G. Kilgore presiding. Present: Mayor Bobby G. Kilgore, Mayor Pro Tem P.E. Bazemore, Council Members John Ashcraft, Billy Jordan, Dottie Nash, City Manager F. Craig Meadows, City Attorney Terry Sholar, and City Clerk Bridgette H. Robinson. Absent: Council Members Lynn Keziah and Robert J. Smith Visitors: Jim Fatland, Wayne Herron, and Pete Hovanec. Mayor Kilgore called the Special City Council Meeting of December 29, 2008 to order at 8:30 a.m. A quorum was present. Item No. 1. Discussion of Natural Gas Pipeline Project. Finance and Administration Director Jim Fatland advised that on December 19, 2008 bids were received for the contracts to install the pipe for the 43 mile natural gas transmission line. Mr. Fatland advised that Council previously adopted Resolution R-2008-98 on October 21, 2008 for an amount not to exceed $42 million. In order to take into account the present financial market conditions, staff requested that Council consider adopting a Resolution for the installment financing which reduces the amount not to exceed $36 million, reflecting the $6 million participation by PSNC, including the approval and authorization of the execution and delivery of the proposed installment fmancing agreement and certain related documents and instruments under which the City would obtain financing pursuant to Section 160A-20 of the North Carolina General Statutes, as amended, for the acquisition, construction and installation of (i) an approximately 43 mile, 12" diameter steel gas transmission line and rela#ed equipment in Southeast Iredell County through the western part of Cabarrus County and to north central Union County to a delivery point for the City's natural gas distribution system, (ii) a 2 inch polyethylene fiber optic conduit to be installed in the same rights of way as the pipeline and (iii) ~ polyethylene gas distribution mains to be installed in the same easements and rights of way as t the pipeline in some locations in Union County (the "Project"). Special City Council Meeting December 29, 2008 Page 124 Mr. Fatland advised that the Local Government Commission will consider approval of the City's application to finance the project with Certificates of Participation at their regularly scheduled meeting on January 6, 2009. Council Member Ashcraft moved to adopt Resolution R-2008-108: RESOLUTION APPROVING AN INSTALLMENT FINANCING OF A NATURAL GAS LINE PROJECT AND THE SALE OF NOT MORE THAN $36,000,000 CERTIFICATES OF PARTICIPATION, SERIES 2009 AND' AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS IN CONNECTION THEREWITH R-2008-108 ~' WHEREAS, there have been available at this meeting substantially final drafts of the following: 1. A form of the Installment Financing Agreement to be dated January 1, 2009 (the "Agreement") between the City of Monroe, North Carolina (the "City") and the Monroe Public Financing Corporation (the "Corporation"); 2. A form of the Security Agreement to be dated January 1, 2009 (the "Security Agreement"), made by the City to the Corporation; 3. A form of the Trust Agreement to be dated January 1, 2009 (the "Trust Agreement") between the Corporation and Wells Fargo Bank, N.A., as trustee (the "Trustee"); 4. A form of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the Certificates of Participation, Series 2009 (the "Certificates"); and 5. A form of the Certificate Purchase Agreement to be dated on or about January 14, 2009 (the "Purchase Agreement") among Bank of America Securities LLC, on behalf of itself and on behalf of another underwriter to be named (the "Underwriters"), the City and the Corporation. WHEREAS, the City Council conducted a public hearing on October 7, 2008, regarding the { ~ Agreement to finance the acquisition, construction. and installation of the Project and the creation of a `` I security interest in a portion of the Project described in a notice for said public hearing, and the City Council received evidence supporting the need for such financing; and WHEREAS, the City Council desires to approve the proposed installment financing of the Project and the execution, sale and delivery of the Certificates and to authorize other actions in connection therewith. NOW, THEREFORE, BE IT RESOLVED by the City Council as follows: 1. All actions heretofore taken by the City Manager, the Finance Director and the City Attorney effectuating the proposed installment financing of the Project are hereby approved, ratified and authorized pursuant to and in accordance with the transactions contemplated by the documents referred to above. Special City Council Meeting December 29, 2008 Page 125 2. The City Council hereby finds and determines in connection. with the Agreement and the transactions contemplated thereby that (a) such Agreement is necessary or expedient to ~''~ the City, (b) such proposed Agreement, under current circumstances, is preferable to a bond issue of the City for the same purpose, (c) the sums estimated to fall due under such Agreement are adequate and not excessive for its proposed purpose, (d) the City's debt management procedures and policies aze good and its debt will continue to be managed in strict compliance with the law, (e) any increase in taxes necessary to meet the sums estimated to fall. due under the Agreement will not be excessive and (f) the City is not in default regazding any of its debt service obligations. 3. Each of the Agreement, the Security Agreement and the Purchase Agreement, in the form submitted to this meeting, is hereby approved, in substantially such form and the Mayor or Mayor Pro Tem of the City, the City Manager, the Finance Director, the City Attorney and the City Clerk are each hereby authorized and directed to execute and deliver each of those documents on behalf of the City, with such changes, insertions or omissions as they may approve with the advice of counsel. 4. The Trust Agreement, in the form submitted to this meeting, is hereby approved with such changes, insertions or omissions as they may approve with the advice of counsel, including provisions (if applicable) that relate to a municipal bond or financial guarantee insurance policy procured by the City, capitalized interest or the use of a debt service reserve fund. 5. Each of the Preliminary Official Statement and the f nal Official Statement in the form of the Preliminary Official Statement submitted to this meeting is hereby approved, in substantially such form, with such changes,. insertions and omissions as appropriate, and the use thereof in connection with the public offering and sale of the Certificates is hereby authorized. The Mayor or Mayor Pro Tem of the City and the City Manager, Finance Director and City Attorney aze hereby authorized and directed to execute and effectuate the distribution, on behalf of the City, the final Official Statement in substantially such form, with such changes, insertions and omissions as they may approve with the advice of counsel. 6. Subject to the parameters and limitations set forth herein, the City Manager is hereby authorized to approve the terms of the Certificates, including but not limited to, the aggregate principal amount and the dates and amounts of maturities thereof, the redemption provisions thereof, the interest rates thereon and the discount below or premium above the principal amount of the Certificates at which the Certificates are sold to the Underwriters; provided that: (i) the principal amount of the Certificates shall not exceed $36,000,000; (ii) the final maturity date of the Certificates shall be no later than March 1, 2039; and (iii) the effective interest rate of the Certificates shall not exceed 8.50%; it being understood that the parameters and limitations set forth in this Section 6 shall amend and replace where applicable the parameters and limitations set forth in Section 1 of the City Council's Resolution R-2008-90 dated September 16, 2008, which authorized, among other things, the negotiation of the Agreement. 7. The Mayor, the City Manager, the Finance Director, the City Clerk and the City Attorney aze hereby authorized to take any and all such further action and to execute and deliver such other documents as may be necessary or advisable to carry out the intent of this Resolution and to effect the installment financing pursuant to the Agreement and the Purchase Agreement, including, without limitation, procuring a municipal bond or financial guarantee insurance policy and entering into tax compliance certificates and agreements. Execution of the Agreement and the Purchase Agreement by the Mayor or Special City Council Meeting December 29, 2008 Page 126 the City Manager and Finance Director shall conclusively evidence approval of all such ~-y details of the financing. ` 8. Due ,to present volatile financial. market conditions and the City's present need of fundi'rig, the Mayor, the City Manager, the Finance Director, the City Clerk and the City Attorney ,are hereby authorized to use a short term financing agreement to provide interim fiiiiding and retain the options for a more advantageous permanent financing when hie markets stabilize. The permanent financing may be structured as currently presented. or may be structured very differently in order to recognize fundamental changes in the market. When and if decided upon, the terms of the interim financing will be addressed for approval by the LGC. On motion of Council Member Ashcraft, the foregoing Resolution entitled "Resolution Approving an Installment Financing of a Natural Gas Line Project and the Sale of Not More Than. $36,000,000 Certificates of Participation, Series 2009 and Authorizing the Execution and Delivery of Documents in Connection Therewith" was duly adopted by the following vote: AYES: Council Members Ashcraft, Jordan, Nash, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None This Resolution shall become effective immediately upon its adoption. Adopted this 29"' day of December, 2008. Mayor Pro Tem Bazemore seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Nash, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Mayor Kilgore adjourned the Special City Council Meeting of December 29, 2008 at 8:40 a.m. Attest: D Bri gette H. Robinson, ity Clerk obby 'lgore, ayor ~~~ , v~0~ 8 m 44 ?~, . Special City Council Meeting December 29, 2008 Page 127