1977-067 Execution of Arbitrage Certificate Sewer/WaterRESOLUTION 67 .4 6 9
A RESOLUTION AUTHORIZTtdG THE EXECUTION BY THE MAYOR, CITY CLERK AND CITY TREASURER
OF THE CITY OF MERIDIAN, IDAHO, OF AN ARBITRAGE CERTIFICATE IN CONNECTION WITH THE
USE AND INVESTMENT OF THE PROCEIDS OF THE $2,040,000 WATER AND SEWER REVENUE
REN'UNDING BONDS OF THE CITY OF MERIDIAN, IDAHO.
WHEREAS, the City of Meridian, Idaho ("City") has authorized the issuance and sale
of $2,040,000 Water and Sewer Revenue Refunding Bonds of the City dated
September 1, 1877, and it is now desired to authorize the execution by the Mayor,
City Clerk and City Treasurer of an Arbitrage Certificate in order to make the
certifications and representations required pursuant to Section 103(c) of the
Internal Revenue Code of 1954, as amended;
NOW, THEREFORE, Be it resolved by the Mayor and Council of the City of Meridian,
Ada County, Idaho, as follows:
Section 1. The Mayor, City Clerk and City Treasurer of the City are hereby
authorized and directed to execute and deliver an Arbitrage Certificate with respect
to the $2,040,000 Water and Sewer Revenue Refunding Bonds of the City dated
September 1, 1877, authorized to be issued pursuant to Ordinance No. X06 , adopted
on Autust 1, lg7?, such Certificate to be in substantially the following form:
ARBITRAGE CERTIFICATE
We, the undersigned, the duly qualified and acting Mayor, City Clerk and
City Treasurer, respectively of the City of Meridian, Ada County, Idaho (the "issuer")
do hereby certify with respect to $2,040,000 Water and Sewer Revenue Refunding Bonds
of the Issuer, dated September 1, 1977 (the "Bonds") presently being delivered by
the Issuer, that the proceeds of the sale of the Bonds shall be devoted to and used
with due diligence for the completion of the refunding for which the Bonds are
authorized by ordinance adopted by the City Council of the Issuer, as the governing
body of the Issuer, on August 1, 1977 (the "Bond Ordinance"). We further certify
and represent that $2,O~j0,000.00 proceeds of the Bonds plus $56,948.21 other money
(derived fs~om sources other than the proceeds of the Bonds or any other borrowing
of the Issuer) has been paid over to The Idaho First National Bank of Boise, Idaho
(the "Bank"), to be held, invested and applied to the payment of $2,040,000 Water
and Sewer Revenue Bonds of the Issuer, dated October 1, 1975, numbered 58 to 465,
inclusive (the "1975 Bonds"), plus-applicable redemption premium on October~l, 1985,
pursuant to call for redemption, under the Bond Ordinance in accordance with that
certain Escrow Agreement, dated as of September 1, 197?, between the Issuer and the
Bank; and that all accrued interest from the date of the Bonds to the date of
delivery thereof received from the purchasers of the Bonds has been deposited in
the Escrow Fund in the Bank pursuant to the Escrow Agreement.
We further certify that:
(1) The Issuer has heretofore incurred, substantial binding obligations
with respect to the improvements and extentiorus to the combined municipal
water and sewer system of the Issuer to pay a portion of the cost of which
the 1975 Bonds were originally issued (the "Project"), said binding
obligations comprising Construction Contract with Chicago Bridge and Iron
for $339,200.00; and Construction Contract with Idaho Construction Company
for $566,325.00 in the amount of not less than $100,000.
(2) It is expected that over 85~ of the spendable proceeds of the 1975
Bonds (including investment proceeds) deposited in the Construction Account
established in Section 5.02 of Ordinance No. 283 of the Issuer will be
expended on or before November 20, 1978, for the purpose of paying the cost
of the Project, said date being within three years following the date of
issue of the 1875 Bonds.
(3) Work on the Project is expected to proceed with due diligence to
completion.
(4) The Project has not been or is not expected to be sold or otherwise
disposed of in whole or in material part prior to the last maturity of the
Bonds. "Material part" means (i) land, and (ii) any building, and (iii}
personal property or fixtures in excess of that which is expected to be sold,
traded in or discarded upon wearing out or becoming obsolete.
(5) All of the principal proceeds of the Bonds are needed for the pur-
poses stated in the form of Bond prescribed by the Bond Ordinance, including
expenses c~ncidental to such purposes and to the issuance of the Bonds.
(6) The purpose of t~~e refunding to be accomplished with Bond proceeds
is to save debt service on the obligation represented by the Bonds; the amount
of such savings will be $670,640.78 in the aggregate, the present value of
which is $94,779.06.
(7) Section 1.103-14(e) (3)(ii)(A) of the Proposed Regulations of the
United States Treasury Department under Section 103 of the Internal Revenue
Code of 1954, as amended, applies to the issue of the Bonds. The aforementioned
investment of $2,040,000.00 of the proceeds of the Bonds will be made within.
the 30 days period prescribed by said Section 1.103-14(e)(3)(ii)(A).
(8) The yield on the Bonds is computed to be 6,258 per '(6/258°jo) per annum
470
RESOLUTION C7
and the yield on the obligations to be acquired with the aforementioned
$2,040,000.00 of the proceeds of the Bonds is computed to be 6,250 per cent
(6.250) per annum.
(9) In computing the yield both on the Bonds and on the investments
to be acquired with the Bond proceeds: (a) there has been determined that
yield which, when used in computing the present worth of all payments of
principal and interest to be paid on the obligations involved,_produces an
amount equal to the purchase price; and (b) the yield both on the Bonds and
on the investments has been calculated by the use of semiannual compounding
of interest.
(10) In computing the yield of the Bonds and the yield of the investments
being acquired with Bond proceeds, the following administrative costs,
which have actually been incurred and have been or will be paid with the
Insurer's money, are allocated as follows: Am
nt
o
u Allocated
Amount ose Amount Allocated ~
~
_
__
oS n3--~ e
to Bonds Proceeds Bond Proceed
-0- Fiscal Advisory Fee -0- -0- -0-
and Expenses
Printing costs:
-0- Official Statement -0- -0- -0-
-0- Bond Printing -0- -0- -0-
-0- Bond Counsel Fees
and Expenses -0- -0- -0-
-0- Other Counsel Fees -0- -0- -0-
and Expenses
-0- Rating ,Agency Fees -0- -0- -0-
-0- Escrow Agent Fees -0- -0- -0-
(present value)
-0 Trustee's Fees -0- -0- -0-
(present value)
$1,800 P~ying Agent Fees $1,800.00 -0- -0-
present value)
-0- Custodial Fees -0- -0- -0-
-0- Accounting Fees -0- -0- -0-
-0- Actuary Fees -0- -0- -0-
TOTAL $1,800.00 -0- -0-
(11) In computing the administrative costs set forth in paragraph (10)
above, all costs to be paid more than six months after delivery of the Bonds
have been computed at present value by discounting such costs, based on current
prices without regard to any inflation adjustment, at a yield of 6.25 ~ per
annum, compounded semiannually, which yield is not less than the yield of the
Bonds (determined without regard to such administrative costs).
(12) Administrative costs are allocated between the Bonds and the invest-
ments in paragraph (10) above on the following basis: (a) costs which would
be incurred in the same amount regardless of the investment of Bond proceeds
are allocated to the Bonds; (b) costs which would not have been incurred but
for the investment of Bond proceeds are allocated to the investments; (c) as
to costs which would have been incurred in a'ny event but which are increased
because of the investment of Bond proceeds, the amount of such increased
cost is allocated to investments and the remainder to the Bonds; and (d)
costs allocated to investments are further allocated between investments
acquired with Bond proceeds and investments acquired with other money accord-
ing to that proportion borne by the amount paid for investments acquired with
Bond proceeds to the amount paid for investments made with other money.
(13) In computing the yield on the investments as set forth in paragraph
(8) above, as to each investment acquired, as part of the Escrow Fund pursuant
to the Escrow Agreement, in part with the proceeds of the Bonds and in part
with other funds, an amount of each receipt of principal and interest to be
received from each such investment has been allocated do the proceeds of the
Bonds in the same proportion as the amount of the Bond proceeds used to acquire
such investment bears to the purchase price of such investment.
(14) The Bonds are being purchased by the purchasers thereof at the price
of $2,040,000, plus accrued interest to the date of delivery, which price is
reasonable under customary standards applicable in the market.
(15 $1,839,963.00 of the proceeds of the 1975 Bonds have been spent for
the purpose for which the 1975 Bonds were issued and $485,037.00 of the
.proceeds of the 1975 Bonds remains in the Construction Account established in
Section 5.02 of Ordinance No. 283 of the Issuer and will be used within
RESOLUTION 67
4'71
THREE years after delivery of the 1975 Bonds to complete the Pro3ect for
which the 1975 Bonds were issued.
(16) All accrued interest on the Bonds will be applied to the payment
of interest falling due on the Bonds on March 1, 1978, which date is within
the one year period beginning on the date of issue of the Bonds; to the
extent that such accrued interest is for a period exceeding six months, such
accrued interest will not be invested at a yield higher than the yield borne
by the Bonds.
(17) All the investments being acquired with Bond proceeds are being
paid for at the market price thereof and are being acquired directly directly
from the United States Treasury.
(18) The "excess proceeds" of the Bonds (as defined in Section 1.103-15(c)
of the currently proposed regulations of the United States Treasury Department
pertaining to arbitrage bonds) are not expected to exceed one percent of the
"original proceeds" of the Bonds. Said "excess proceeds" are calculated as
follows:
(a) Original Principal Proceeds of the Bonds
(and premium, if any): $2,040,000.00
(b) Accrued Interest on the Bonds: $ -0-
(c) Anticipated return on investments made with
Bond proceeds (including reinvestments, if any): $1,020,000.00
(d) Indirect Proceeds expected from acquired purpose
obligations and from sale or other disposition
of asserts financed with the 1975 Bonds: $ -0-
(e) Transferred Proceeds (including any unspent
construction fund money, capitalized interest
and reserve derived from proceeds of the
1975 Bonds: $ -0-
(f) Investment Proceeds derived from the investment
of a Reserve Fund or interest capitalized with
the Bond proceeds: $ -0-
Total Proceeds: $3,O~e~•~
Deductions
(~;) "Proceeds" of the Bond to be used to pay
principal on the 1975 Bonds: $2,040,000.00
(ii) Proceeds of the Bond to be used to pay
(not more than six months) accrued
interest on the Bonds: $ -0-
(iii) Proceeds of the Bond to be used to pay
capitalized interest on the Bonds: $ -0-
(iv) Proceeds of the Bonds to be used as part of
reasonably required reserve or replacement
fund for the Bonds: $ -0-
(v) Proceeds of the Bonds to be used to pay
administrative costs: $ -0-
(vi) Transferred Proceeds to be used for
purpose of the 1975 Bonds:
(vii) Investment Proceeds derived
from the investment of a reasonably
required reserve or replacement fund:
Total Deductions:
Excess Proceeds:
$ Not Applicable
$ -0-
$2,040,000.00
$1,020,000.00
4'72
RESOLUTION'~7
(19) At least 99% of the "excess proceeds" of the Bonds
will be used to pay interest that accrues on the 1975 Bonds
on and prior to October 1, 1985 before the 1975 Bonds are
retired; no proceeds of the Bonds will be used to pay interest
on the 1975 Bonds or to replace funds that are used directly
or indirectly to pay interest on the 1975 Bonds.
(20) To the best of our knowledge and belief there
are no facts, estimates or circumstances that would materially
change the conclusions and representations set out in this
certificate.
(21) The Issuer has not been notified of any listing
or proposed listing of it by the Internal Revenue Service as a
bond issuer whose arbitrage certifications may not be relied upon.
IN WITNESS WHEREOF, Ede have hereunder subscribed our official
signatures and caused the official seal of the City of Meridian,
Idaho to be impressed hereon, this ~ day of v us ~, 197?.
~v ~ ~'?" Sin ~°~~
Mayor, City of Meridian, Idaho
ity Clerk, City Me dian, Idaho
*If all Transferred Proceeds are to
be used for purpose of the prior issue,
write "not applicable" here.