R-2696-1-08RESOLUTION NO. 2696-1-08(R)
A RESOLUTION by the City Council of the City of Allen, Texas, relating to the
"Allen Economic Development Corporation Sales Tax Revenue Bonds,
Series 2006"; approving the resolution of the Board of Directors of the
Corporation authorizing the issuance of such Bonds; resolving other
matters incident and related to the issuance of such Bonds; and providing
an effective date.
WHEREAS, Allen Economic Development Corporation (the "Issuer) has been duly
created and organized pursuant to the provisions of Section 4A of the Development Corporation
Act of 1979, Article 5190.6, Vernon's Texas Civil Statutes, as amended (the "Act"); and
WHEREAS, pursuant to the Act, the Issuer is empowered to issue bonds for the purpose
of defraying the cost of any "project" defined as such by the Act; and
WHEREAS, the Board of Directors of the Issuer has found and determined that
infrastructure for the promotion and development of new and expanded business enterprises, to
wit: drainage improvements and street and road improvements, including utility line relocations
and signalization related thereto (the "Projects") for the promotion and development of new and
expanded business enterprises (the 'Projects"), constitutes projects within the meaning of the
Act and the costs of constru "gig and iquippin., such Projects should be financed from the
proceeds of sale of $15,490,000 "Allen Economic Development Corporation Sales Tax Revenue
Bonds, Series 2008" (the "Bonds"); and
' WHEREAS, Section 25(f) of the Act requires the City Council of the City approve the
resolution of the Issuer providing for the issuance of the Bonds no more than sixty (60) days
prior to the delivery of the Bonds; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS:
SECTION 1: The Resolution authorizing the issuance of the Bonds adopted by the
Issuer on October 17, 2007, as amended on January 16, 2008, and the Pricing Certificate
executed pursuant to such resolution executed as of January 22, 2008 (collectively, the "Issuer
Resolution") and submitted to the City Council this day, is hereby approved in all respects. The
Bonds are being issued to finance the costs of acquiring and purchasing the Projects, which are
located within the City of Allen, and the City agrees that upon receipt of the proceeds of sale of
the Bonds from the Issuer, the City will acquire and purchase the Projects and thereafter be
responsible for the upkeep, maintenance and use of the Projects.
SECTION 2: The approvals herein given are in accordance with Section 25(f) of the
Act and the Bylaws of the Issuer, and the Bonds shall never be construed as an indebtedness
or pledge of the City, or the State of Texas (the "State"), within the meaning of any constitutional
or statutory provision, and the owner of the Bonds shall never be paid in whole or in part out of
any funds raised or to be raised by taxation (other than sales tax proceeds as authorized
pursuant to Section 4A of the Act) or any other revenues of the Issuer, the City, or the State,
except those revenues assigned and pledged by the Issuer Resolution.
' SECTION 3: The City hereby agrees to promptly collect and remit to the Issuer the
Gross Sales Tax Revenues (as defined in the Issuer Resolution) in accordance with the terms
of the Issuer Resolution and the Act to provide for the prompt payment of the Bonds, and to
70044043.1110711015
' assist and cooperate with the Issuer in the enforcement and collection of sales and use taxes
imposed on behalf of the Issuer.
SECTION 4: The Mayor, the City Secretary, the City Manager, the Finance Director
and the Assistant Finance Director of the City are hereby authorized, jointly and severally, to
execute and deliver such endorsements, instruments, certificates, documents, or other papers
necessary and advisable to carry out the intent and purposes of the Resolution.
SECTION 5: The City hereby acknowledges and recognizes that the Bonds are being
issued as tax exempt obligations under and pursuant to section 103(a) of the Code (as defined
below) and the proceeds of sale of such Bonds are to be deposited with the City following their
receipt by the Issuer and the City shall have full control and responsibility for the acquisition and
purchase of the Projects and the investment and disbursement of the proceeds of sale of the
Bonds. Therefore, as a result of the foregoing, the City hereby makes the following
representations and warranties to the Issuer:
(a) Definitions. When used in this Section, the following terms have the following
meanings:
"Closing Date" means the date on which the Bonds are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
' "Computation Date" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of
the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations.
`Nonpurpose Investment" means any investment property, as defined in section
148(b) of the Code, in which Gross Proceeds of the Bonds are invested and
which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations
issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of
the Internal Revenue Code of 1954, which are applicable to the Bonds. Any
reference to any specific Regulation shall also mean, as appropriate, any
proposed, temporary or final Income Tax Regulation designed to supplement,
amend or replace the specific Regulation referenced.
' "Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4 of
the Regulations.
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' (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
Of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use or permit the use of
such Gross Proceeds (including all contractual arrangements with terms different
than those applicable to the general public) or any property acquired, constructed
or improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United Statcc or any agency, department and instrumentality - -
thereof) other than a state or local government, unless such use is solely as a -- -
member of the general public; and
' (2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds, other
than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be 'loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
' final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the
Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money
replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
roouwarHgrrmrs Resolution No. 2696-1-08(R), Page 3
' (f) Not Federally Guaranteed. Except to the extent permitted by section 149(1) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would rause the Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
(g) Payment of Rebatable Arbitraoe. Except to the extent otherwise provided in
section 148(0 of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all
receipts, expenditures and investments thereof) on its books of account
separately and apart from all other funds (and receipts, expenditures and
investments thereof) and shall retain all records of accounting for at least six
years after the day on which the last Outstanding Bond is discharged. However,
to the extent permitted by law, the City may commingle Gross Proceeds of the
Bonds with other money of the City, provided that the City separately accounts
for each receipt and expenditure of Gross Proceeds and the obligations acquired
therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
- --
'Such calculations with its official transcript of proceedings relating totheicsuance----
of the Bonds until six years after the final Computation Date.
' (3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall remit to the Issuer for payment to the United States
the amount described in paragraph (3) above and the amount described in
paragraph (4) below, at the times, in the manner and accompanied by such
forms or other information as is or may be required by Section 148(f) of the Code
and the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no
errors are made in the calculations and payments required by paragraph (2), and
if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including the amount remitted to the
Issuer for payment to the United States of any additional Rebate Amount owed to
it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the
Regulations.
SECTION 6: It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and
subject matter of the public business to be considered at such meeting, including this
Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
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' SECTION 7: This Resolution shall be in force and effect from and after its passage on
the date shown below.
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70044 a3.1h0711015 Resolution No. 2696-1-08(R), Page 5
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PASSED AND ADOPTED, this January 22, 2008,
CITY OF ALLEN, TEXAS
TEP N TERRELL, Malyor
ATTEST:
-
SHELLEY B. GE GE, City Secre
(City Seal)
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