Board Approved on July 28, 2009
LANSING BOARD OF WATER AND LIGHT
_________________________
Tuesday, June 9, 2009
_________________________
The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing, Michigan.
Present: Commissioners Margaret Bossenbery, Robert Cochran, Tony DeLuca, Peter Kramer, Tracy Thomas and Sandra Zerkle.
Absent: Commissioners Semone James-Howes and Frank Lain.
The Secretary declared a quorum present.
Acting Chairperson Zerkle called the meeting to order at 5:30 p.m.
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
Lansing Board of Water and Light
City of Lansing, Michigan
RESOLUTION AUTHORIZING SALE OF REFUNDING BONDS
WHEREAS, on August 12, 2008 the Lansing Board of Water and Light (the “Board”) authorized sale of water supply, steam, chilled water and electric utility system subordinate lien revenue refunding bonds in order to refund all or a portion of the Water Supply, Steam and Electric Utility System Subordinate Lien Revenue Bonds, Series 1999B (Federally Taxable) (the “Series 1999B Bonds”) and reduce the Board’s aggregate debt service; and
WHEREAS, the Board has received an offer from Bank of America Public Capital Corporation (the “Bond Purchaser”) to purchase the bonds authorized by the resolution of August 12, 2008 to be designated as the Water Supply, Steam, Chilled Water and Electric Utility System Subordinate Lien Revenue Refunding Bonds, Series 2009A (Federally Taxable) (the “Series 2009A Bonds”); and
WHEREAS, if the Board refunds the Series 1999B Bonds through sale of the Series 2009A Bonds to the Bond Purchaser as described in the offer to purchase, then after giving effect to the refunding, the maximum amount of Aggregate Debt Service in each future fiscal year shall be less than the Aggregate Debt Service in each future fiscal year prior to giving effect to the refunding; and
WHEREAS, various provisions of the Authorizing Resolution must be updated to reflect the private placement of the Series 2009A Bonds to the Bond Purchaser instead of sale to an underwriter.
NOW, THEREFORE, BE IT RESOLVED THAT:
Section 1. Supplemental Resolution. The Fourth Supplemental Revenue Bond Resolution and the Resolution of August 12, 2008 are hereby amended and supplemented by this Resolution Authorizing Sale of Refunding Bonds in accordance with Section 20(b) of the Fourth Supplemental Revenue Bond Resolution and Section 23(a)(i) of the amended and restated Bond Resolution.
Section 2. Negotiated Sale. The Board hereby determines to sell the Series 2009A Bonds at a negotiated sale to the Bond Purchaser instead of a competitive sale for the reason that a negotiated sale will permit the Board to obtain a lower rate of interest on the Series 2009A Bonds. The action taken by the Chief Financial Officer to accept the proposal of the Bond Purchaser is hereby ratified and confirmed. By adoption of this Resolution the Board assumes no obligations or liability to the Bond Purchaser for any loss or damage that may result to the Bond Purchaser from the adoption of this Resolution, and all costs and expenses incurred by the Bond Purchaser in preparing for sale of the Series 2009A Bonds shall be paid from the proceeds of the Series 2009A Bonds, if the Series 2009A Bonds are issued.
The Board hereby retains Citigroup Global Markets Inc. as Placement Agent to assist the Board in arranging the sale of the Series 2009A Bonds.
Section 3. Changes to Bond Details. The Series 2009A Bonds shall be issued in the amount not-to-exceed Forty-Eight Million Dollars ($48,000,000), as finally determined upon the sale thereof, and shall be designated as the Water Supply, Steam, Chilled Water And Electric Utility System Subordinate Lien Revenue Refunding Bonds, Series 2009A (Federally Taxable) or such other designation as shall reflect the date of sale. All references in the Resolution of August 12, 2008 to the Series 2008B Bonds shall be understood to refer to the Series 2009A Bonds.
The Series 2009A Bonds may, at the request of the Bond Purchaser, be issued as a single fully registered, nonconvertible bond of the denomination of the full principal amount thereof payable in principal installments as shown in the bond. If any Series 2009A Bond is signed by the manual signature of either the Chairperson or the Corporate Secretary of the Board then it shall be valid without authentication. If the Bond Purchaser does not require that the registrar and transfer agent for the Series 2009A Bonds be a bank or trust company, then the Chief Financial Officer of the Board, or her or his designee, is hereby designated as registrar and transfer agent for the Series 2009A Bonds.
The Chief Financial Officer is authorized to determine final bond details including, but is not limited to, designation of the portion of the Series 1999B Bonds to be refunded and called for redemption prior to maturity; determination of original principal amount of the Series 2009A Bonds; the date of the Series 2009A Bonds; the schedule of principal maturities; provisions for early redemption; the interest rates and payment dates of the Series 2009A Bonds; application of the proceeds of the Series 2009A Bonds; transfer of balances, if any, from the Junior Lien Bond and Interest Redemption Fund to the Series 1999B Escrow Fund; and purchase of securities, if any, for the Series 1999B Escrow Fund. The Chief Financial Officer is authorized to change the series designation of the Series 2008B Junior Lien Bond Reserve Account to “Series 2009A” or such other designation as shall reflect the date of sale. Approval of the matters delegated to the Chief Financial Officer under this Resolution may be evidenced by execution of a certificate or the Series 1999B Escrow Agreement.
Section 4. Modification of Provisions for Additional Junior Lien Bonds. Section 11 of the Resolution of August 12, 2008 and Section 20(b) of the Fourth Supplemental Revenue Bond Resolution are hereby modified to permit issuance of Additional Junior Lien Bonds only as follows.
The right is reserved, in accordance with the provisions of Act 94, to issue additional bonds payable from the Net Revenues of the System which shall be of equal standing and priority of lien on the Net Revenues of the System with any Series 1999B Bonds which might remain outstanding and the Series 2009A Bonds (which lien is subordinate in priority of lien on the Net Revenues of the System pledged to secure payment of the Senior Lien Bonds), but only for the following purposes and under the following terms and conditions:
(a) For repairs, extensions, enlargements and improvements to the System or for the purpose of refunding a portion of any Outstanding Bonds and paying costs of issuing such Additional Junior Lien Bonds, including deposits which may be required to be made to a junior lien bond reserve account. Junior Lien Bonds for such purposes shall not be issued pursuant to this subparagraph (a) unless the actual or augmented Net Revenues of the System for the fiscal year of the System ending not more than 15 months prior to the sale of Additional Junior Lien Bonds shall be equal to at least one hundred twenty-five (125%) percent of the maximum Aggregate Debt Service Requirement in any current or future fiscal year on the Outstanding Senior Lien Bonds, the Outstanding Junior Lien Bonds, and on the Additional Junior Lien Bonds then being issued. If the Additional Junior Lien Bonds are to be issued in whole or in part for refunding Outstanding Bonds, the maximum Aggregate Debt Service shall be determined by deducting from the principal and interest requirements for each operating year the annual Aggregate Debt Service Requirement of any Bonds to be refunded from the proceeds of the Additional Junior Lien Bonds.
Net Revenues may be augmented as follows for the purposes of this subsection (a):
(1) If the System rates, fees or charges shall be increased at or prior to the time of authorizing the Additional Junior Lien Bonds, the Net Revenues may be augmented by an amount which in the opinion of the Board’s financial advisor will reflect the effect of the increase had the System’s billings during such time been at the increased rates.
(2) The actual Net Revenues may be augmented by the estimated increase in Net Revenues which in the opinion of the Board’s financial advisor will accrue as a result of new customers which have not been serviced during the fiscal year described in paragraph (a) above or as a result of the acquisition of the repairs, extensions, enlargements and improvements to the System which have been made during or subsequent to the fiscal year described in paragraph (a) above or which will be acquired in whole or in part from the proceeds of the Additional Junior Lien Bonds to be issued.
No Additional Junior Lien Bonds of equal standing as to the Net Revenues of the System with the Outstanding Junior Lien Bonds shall be issued pursuant to the authorization contained in subparagraphs (a) or (c) if the City shall then be in default in making its required payments to the Operation and Maintenance Fund, the Redemption Fund established for payment of the Senior Lien Bonds, or the Junior Lien Bond and Interest Redemption Fund.
(b) For refunding all of the Outstanding Junior Lien Bonds and paying costs of issuing such Additional Junior Lien Bonds.
(c) Additional Junior Lien Bonds may be issued without meeting any of the conditions and tests set forth in subsection (a) above for any one or more of the following purposes: ( 1) to pay the cost of acquisition and construction of any repairs, replacements, betterments, improvements, major renewals or corrections of any damage or loss to the System necessary, in the opinion of the Consulting Engineer, to keep the System in good operating condition or to prevent a loss of Revenues therefrom or (ii) to pay the cost of decommissioning, disposal or termination of the System.
Determination by the Board as to existence of conditions permitting the issuance of Additional Junior Lien Bonds shall be conclusive.
Section 5. Other Actions. In the event that the Chief Financial Officer is not available at the time that it becomes necessary to take actions directed or authorized under this resolution, then either the Manager of Finance and Planning or another person designated by the Chief Financial Officer or the General Manager of the Board or a person designated by him is authorized to take the actions delegated to the Chief Financial Officer by this Resolution. The officers, administrators, agents and attorneys of the Board are authorized and directed to take all other actions necessary and convenient to facilitate issuance and sale of the Series 2009A Bonds and the refunding of Series 1999B Bonds and the call of the refunded bonds prior to maturity, and to execute and deliver all other agreements, documents and certificates and to take all other actions necessary or convenient in accordance with this Resolution, and to pay costs of issuance including but not limited to a Board Administrative Fee, placement agent fees, financial advisor fees, bond counsel fees, verification agent fees, auditor fees, fees of counsel to the Bond Purchaser, and any other costs necessary to accomplish the refunding of Series 1999B Bonds and the call of the refunded bonds prior to maturity and the sale and delivery of the Series 2009A Bonds.
Section 6. Applicability of the Outstanding Bond Resolutions. Except to the extent amended, supplemented or otherwise provided in this Resolution, all of the provisions and covenants provided in Bond Resolution shall apply to the Series 2009A Bonds issued pursuant to provisions of this Resolution, such provisions of said Resolution being made applicable to the Series 2009A Bonds herein authorized.
Section 7. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded.
Section 8. Severability and Paragraph Headings. If any section, paragraph, clause or provision of this Resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Resolution. The paragraph headings in this Resolution are furnished for convenience of reference only and shall not be considered to be part of this Resolution.
Section 9. Publication and Recordation. In accordance with the provisions of Section 6 of Act 94, this Resolution shall be published once in full in either the Lansing State Journal or The City Pulse, which are newspapers of general circulation in the City qualified under State law to publish legal notices, promptly after its adoption, and this Resolution shall be recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairperson and Corporate Secretary of the Board.
Section 10. Effective Date. This Resolution is hereby determined to be immediately necessary for the preservation of the public peace, property, health and safety of the City. In accordance with the provisions of Section 6 of Act 94, this Resolution shall become effective immediately upon its adoption.
We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Lansing Board of Water and Light of the City of Lansing, State of Michigan, at a Special meeting held on Tuesday, June 9, 2009 at __:___ __.m., prevailing Eastern Time, and that said meeting was conducted and public notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, and that the minutes of said meeting were kept and will be or have been made available as required by said Act 267.
We further certify that notice of said Special meeting was given to each member of the Board in accordance with the rules of procedure of the Board.
We further certify that the following Commissioners were present at said meeting: ___________________________________________________________________________________________________________________________ and that the following Commissioners were absent ____________________________________________________.
We further certify that Commissioner __________________ moved adoption of said Resolution, and that said motion was supported by Commissioner __________________.
We further certify that the following Commissioners voted for adoption of said Resolution: ____________________________________________________________________ _______________________________________________________________________ and that the following Commissioners voted against adoption of said Resolution: ___________________ __________________________.
I further certify that said Resolution has been recorded in the Resolution Book and that such recording has been authenticated by the signature of the Chairperson and Corporate Secretary of the Board.
_____________________________ __________________________________
Chairperson Corporate Secretary
Motion by Commissioner Cochran, seconded by Commissioner Thomas to approve the resolution entitled, “Resolution Authorizing Sale of Refunding Bonds”.
Action: Carried unanimously.
NEW BUSINESS
None.
MANAGER’S REMARKS
Delta Township. General Manager J. Peter Lark announced that the Lansing Board of Water and Light (BWL) and Delta Township signed a new water contract. Congratulations were extended to Executive Director George Stojic and staff with respect to negotiating and signing the new agreement.
BWL Chili Cook-off. General Manager Lark advised that approximately 13,000 people attended the 14th Annual BWL Chili Cook-off. A significant portion of the cost was covered by sponsorships and it is possible that the event may come as no expense to the BWL. Congratulations were extended to Director Calvin Jones, Public Relations Manager Cheval Breggins, LEPFA President and Chief Executive Officer Eric Hart and many other volunteers.
COMMISSIONERS’ REMARKS
Commissioner Cochran acknowledged that this maybe his last board meeting as a Board Commissioner, as he is not seeking reappointment at this time. He also commented that differences in opinion are healthy for a board of this level. In addition, Commissioner Cochran advised of an upcoming article written by Gretchen Cochran with respect to efficiency posts.
Commissioner Zerkle noted that she was sad to see Commissioner Cochran leave the Board of Commissioners. She also thanked him for his assistance, as he was the first Commissioner to offer aid when she was initially appointed to the board.
General Manager Lark thanked Commissioner Cochran for his support and time served on the Board of Commissioners.
Commissioner Kramer expressed gratitude for Commissioner Cochran’s service to the Board of Commissioners and appreciation for the difference of opinion shared with fellow board members.
Commissioner Thomas noted his appreciation for Commissioner Cochran’s service and congratulated staff on receiving the Return on Environment Partnership Award.
Commissioner Bossenbery thanked staff for their hard work and efforts with respect to the Annual Chili Cook-off.
EXCUSED ABSENCE
On motion by Commissioner Thomas, seconded by Commissioner DeLuca, to excuse the absence of Commissioners Semone James-Howes and Frank Lain.
Action: Carried unanimously.
PUBLIC COMMENTS
There were no public comments.
ADJOURNMENT
On motion by Commissioner Cochran, seconded by Commissioner Kramer, the meeting adjourned at 5:46 p.m.
/s/ Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
June 16, 2009