REGULAR COUNCIL MEETING
The Regular Council Meeting was held on June 14, 1993 at 7:30 p.m. with Council President Christiansen presiding. Members present were Councilmen Lambert, Tudor, Leary, Pitts, Malone, Hutchison, Salters and Hare.
Council staff members present were Chief Smith, Ms. Swain, Fire Chief Baker, Mr. Petit de Mange, Mrs. Boaman and Mr. Rodriguez.
The invocation was given by Elder W.R. Dixon. In honor of Flag Day, Council was led in the Pledge of Allegiance by Mr. Richard Reynolds and Mr. Robert Owens of the Dover Elks Lodge B.P.O.E. #1903.
AGENDA ADDITIONS/DELETIONS
The agenda was approved by motion of Mr. Hutchison, seconded by Mr. Leary and unanimously carried.
ADOPTION OF MINUTES - REGULAR COUNCIL MEETING OF MAY 24, 1993
The Minutes of the Regular Council Meeting of May 24, 1993 were unanimously approved by motion of Mr. Lambert, seconded by Mr. Hutchison and bore the written approval of Mayor Knopf.
AUTHORIZING RESOLUTION - GENERAL OBLIGATION BOND ISSUE - SERIES 1993
The City Council has approved the concept of a General Obligation bond issue for the refunding of outstanding 1987 and 1988 General Obligation bonds and for the street, tar ditch, road and handicap ramp projects. The 1987 and 1988 General Obligation bonds to be refunded total $2,365,000 and the new money bond issue totals $910,000.
Mr. Salters moved for approval of the following Resolution, seconded by Mr. Lambert and carried by a unanimous roll call vote:
RESOLUTION AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY OF DOVER FOR THE PURPOSES OF ADVANCE REFUNDING EXISTING DEBT OF THE CITY AND OF MAKING IMPROVEMENTS OR REPAIRS TO OR CONSTRUCTING PUBLIC STORM SEWERS, STREETS AND APPURTENANCES LOCATED IN THE CITY OF DOVER:
WHEREAS, the Mayor and Council of The City of Dover (the "City") have issued and there remains outstanding certain indebtedness which was incurred for certain public purposes, in accordance with the provisions of the City Charter, as more particularly described in Exhibit A hereto (the "Outstanding Bonds"); and
WHEREAS, Section 50(c)(ii) provides that the City can refund its previously issued general obligation bonds without a referendum provided that the City can show that there is a present value savings resulting from the refunding; and
WHEREAS, the Mayor and the Council of The City of Dover (the "City") have determined that there is a need for certain improvements or repairs to or construction of public storm sewers, streets and appurtenances throughout the City as identified in Exhibit B hereto for the management and maintenance of the City including all legal and financing costs related thereto at an estimated cost of $910,000 (the "Projects"); and
WHEREAS, Section 50(c)(I) of the City Charter provides that bonds can be authorized to finance public storm sewers, streets and appurtenances in an amount not to exceed $1,000,000 without a referendum; and
WHEREAS, bonds authorized pursuant to Section 50(c)(I) cannot in the aggregate outstanding at any one time exceed a total of one (1) percent of the total taxable assessment for a general tax; and
WHEREAS, Section 50(b) of the City Charter provides that the amount of the bonded indebtedness of the City, secured by the full faith and credit of the City, may not at any time exceed a sum equal to 25% of the total assessed value of real property situate within the bounds of the City; and
WHEREAS, the refunding of the Outstanding Bonds and the issuance of $910,000 of additional general obligation bonds to fund the Projects will not cause the bonded indebtedness of the City, secured by the full faith and credit of the City, to exceed the aforesaid limitations on bonded indebtedness.
NOW, THEREFORE, BE IT RESOLVED by the Council of The City of Dover as follows (three quarters of all members thereof concurring therein):
1. The Council hereby finds that:
(a)the improvements or repairs to or construction of public storm sewers, streets and appurtenances identified in Exhibit B would be for the health, safety, convenience, comfort and well being, and would otherwise be for the general benefit, of the citizens of the City and would serve to preserve public and private property, and
(b)the principal amount of bonds to be issued for such purposes shall not exceed $1,000,000.
2. The City shall issue its negotiable bonds in the maximum aggregate principal amount of $910,000 (the "New Money Bonds") pursuant to and in accordance with Section 50(c)(I) of the City Charter, to finance in whole or in part the costs of the Projects. The City shall issue its negotiable bonds in the maximum aggregate principal amount of up to $2,855,000 (the "Refunding Bonds") pursuant to and in accordance with Section 50(c)(ii) of the City Charter to refund a portion or all of the Outstanding Bonds, including the costs of issuance. The New Money Bonds and the Refunding Bonds shall be issued as a single composite issue of bonds (the "Bonds"). The full faith and credit of The City of Dover is pledged to the payment of the Bonds and the interest, and premium, if any, thereon. The Bonds shall be dated, shall mature in such installments (not extending beyond 25 years), shall be subject to redemption prior to maturity, with or without premium, and shall otherwise contain such terms and provisions as shall be determined by the Mayor and the Treasurer to be in the best interest of the City provided that:
(I) the aggregate principal amount of the New Money Bonds shall not exceed $910,000 and the aggregate principal amount of the Refunding Bonds shall not exceed $2,855,000;
(ii) the present value of the aggregate principal and interest payments on the Refunding Bonds shall not be greater than the present value of the aggregate principal and interest payments on the bonds to be refunded determined by discounting at the effective interest rate on the Refunding Bonds, calculated based on the internal rate of return;
(iii) in connection with making such determination, the Mayor and Treasurer shall select which portion or all of the Outstanding Bonds are to be refunded (the "Refunded Bonds") and shall provide for appropriate notices of redemption to be given;
(iv) at the time of issuance of the Refunding Bonds there shall be deposited in escrow, pledged to secure the Refunded Bonds, sufficient monies and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States government, which, without regard to any reinvestment earnings, will be sufficient to pay when due all interest, principal and redemption price on the Refunded Bonds at maturity or upon earlier call for redemption;
(v) the aggregate principal amount of the Bonds shall not cause the debt limits of Section 50 of the City Charter to be exceeded; and
(vi) for the purposes of this Resolution, bonded indebtedness, principal amount of bonds and bonds outstanding shall be determined without regard to original issue discount.
3. The proceeds of the Refunding Bonds, after payment of the charges and expenses connected with the preparation, sale and issuance thereof, shall be deposited with an Escrow Agent under an Escrow Deposit Agreement to pay the principal of and interest on the Refunded Bonds when due or upon earlier call for redemption, as specified in the Escrow Agreement. The proceeds of the New Money Bonds, after the payment of the charges and expenses connected with the preparation, sale and issuance thereof, shall be deposited in the appropriate funds for payment of certain capital expenditures as set forth in Exhibit B hereto.
4. In the event that there are any excess proceeds of the Bonds remaining after the required deposit to the Escrow Fund and the completion of the Projects to the extent determined by the Mayor and Council, any such funds may be applied for any other authorized projects for public storm sewers, streets and appurtenances as determined by the Mayor and Council or for the payment of debt service on the Bonds.
5. The Bonds shall bear the designation "General Obligation Bond, Series 1993". The Bonds shall be in denominations of $5,000 and any integral multiples thereof and shall be numbered consecutively.
6. The Bonds shall bear interest from their date at a rate or rates not exceeding a true interest cost of 5.25 percent per annum when calculated for all the Bonds in the aggregate. Such interest shall be payable semi-annually on the dates determined by the Mayor and Treasurer with the first semi-annual payment to occur on or prior to June 1, 1994. True interest ("Canadian") cost shall be determined by doubling the semi-annual interest rate, compounded semiannually, necessary to discount the debt service payments from the payment dates to the date of the Bonds and to the price bid, excluding interest accrued to the date of delivery.
7. The Bonds may be issued in book-entry form registered in the name of a securities depository (the "Depository") and immobilized in the custody of the Depository subject to such terms and conditions as may be determined by the Mayor and Treasurer in which case the Mayor or Treasurer may execute and deliver on behalf of the City a letter of representations in such form as they may determine to be in the best interest of the City. In the event that the Bonds are immobilized in the custody of a Depository, the City shall not be liable for the failure of the Depository or of any participant of the Depository to perform any obligation to any participant or beneficial owner of any such Bond.
8. Principal and interest payments on the Bonds are to be made to the owner of record as of the fifteenth day of the calendar month preceding the month in which the applicable interest or principal payment date occurs. So long as the Bonds are registered in the name of the Depository, the Depository shall be considered the owner of record.
9. Each of the Bonds shall contain a recital that it has been authorized and issued pursuant to the terms and conditions of Section 50 of the City Charter. Each of the Bonds shall be signed by the manual or facsimile signatures of the Mayor and the Treasurer. The official corporate seal of the City or a facsimile thereof shall be imprinted or impressed upon each of the Bonds.
10. In the event any of the Bonds are called for redemption prior to maturity, notice thereof identifying said Bonds to be redeemed shall be given by mailing by first class mail, postage prepaid, to the registered owner or owners thereof at the address shown on the registration books not more than sixty (60) days nor less than thirty (30) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing or any defect therein to the registered owner of any said Bond designated for redemption shall not affect the validity of the proceedings for the redemption of any other said Bond. All of said Bonds so called for redemption will cease to bear interest on the specified redemption date provided funds for their redemption are on deposit at the place of payment at that time.
11. Each of said Bonds and the provisions for the registration of the Bonds to be endorsed thereon, shall be in substantially the form hereinafter set forth in Exhibit C as completed as the Mayor and Treasurer may deem advisable, and the Mayor and the Treasurer of the City are hereby authorized and directed to cause said Bonds to be prepared when they shall have been sold and to execute said Bonds in accordance with their terms.
12. The Bonds shall be sold by the City for not less than ninety eight percent (98%) of par plus accrued interest at a public or privately negotiated sale to be held at such time as the Mayor and the Treasurer shall determine shall be in the best interest of the City. In connection with such sale, the City Treasurer is hereby authorized and directed to cause a Notice of Sale completed as the Mayor and Treasurer, shall deem advisable, in substantially the form hereinafter set forth in Exhibit D, to be distributed to potential purchasers.
13. The Mayor and City Treasurer are authorized to prepare a Preliminary Official Statement with respect to the sale and issuance of the Bonds, to "deem" such Preliminary Official Statement "final" for the purposes of Rule 15c2-12 of the Securities and Exchange Commission, to provide for distribution thereof to prospective purchasers of the Bonds and to finalize and provide for distribution of the final Official Statement.
14. The moneys raised by the issuance of the Bonds, after the payment of charges and expenses connected with the preparation, sale and issuance thereof, shall be expended only for the purposes authorized in this Resolution, including reimbursement of City funds for authorized advances made prior to the sale of the Bonds.
15. The Mayor and Council are authorized and directed to take all appropriate action to maintain the exclusion from gross income of interest on the Bonds for federal income tax purposes including the payment of any arbitrage rebate to the United States, if required, and the establishment of special accounts in connection therewith.
16. The power to prescribe the final terms, form and contents of the Bonds, the Notice of Sale, the Preliminary Official Statement and the Official Statement and the power to sell, issue and deliver said Bonds subject to the provisions of this Resolution, is hereby delegated to the Mayor and City Treasurer. Upon awarding the sale of the Bonds to the winning bidder, the City Treasurer shall promptly notify the City Council in writing of such award. The power to execute any documents, and the power to take any further action and do all things necessary, with respect to the sale, issuance and delivery of the Bonds is hereby delegated to the Mayor and City Treasurer, subject to the provisions of this Resolution.
17. At any time when the Mayor is unable to perform any of the acts or duties described herein, the Vice-Mayor may take the appropriate action necessary for the same.
ADOPTED: June 14, 1993 ______________________________
EXHIBIT A
Outstanding Bonds
Outstanding
Series Maturity Dates Principal Amount
1987 July 1, 1993 - 2002 $ 755,000
1988 July 1, 1993 - 2003 1,610,000
EXHIBIT B
Project Description Estimated Cost
Tax Ditch Improvements $ 318,000
(Storm Sewers)
Streets, Alley and Sidewalk 529,000
Program
Costs of Issuance 63,000
Total $ 910,000
EXHIBIT C
R-________ DOLLARS $__________
UNITED STATES OF AMERICA
STATE OF DELAWARE
THE CITY OF DOVER
GENERAL OBLIGATION BOND
Series 1993
Interest Rate Maturity Date Dated Date CUSIP
June 15, 1993
Registered Owner:
Principal Sum:
THE CITY OF DOVER (hereinafter referred to as the "City"), in the County of Kent, a political subdivision of The State of Delaware, for value received, hereby acknowledges itself indebted and promises to pay to the registered owner named above, or registered assigns or legal representative, the principal sum stated above, on the maturity date stated above, upon presentation and surrender hereof, and to pay interest to the registered owner hereof on the applicable record date at the interest rate per annum stated above, payable on January 1, 1994; and semi-annually thereafter on each July 1 and January 1, until payment of such Principal Sum shall have been made. Both the principal of and interest on this Bond are payable in lawful money of the United States of America. Interest on this Bond shall be paid by check or draft mailed to the registered owner as shown on the bond register maintained by the City. The principal amount shall be payable upon presentation and surrender of this Bond by the registered owner at the office of the City Treasurer, City Hall, Dover, Delaware.
In the event this Bond is held by or registered in the name of a securities depository or other agent or nominee of a beneficial owner, by purchase of a bond, the Bondholder agrees that the City shall have no responsibility or liability for any action or inaction by the depository or other agent or nominee in connection with the Bond.
[Bonds maturing on or after ________ 1, ____ are subject to redemption at the option of the City prior to maturity, as a whole or in part at any time on or after _______ 1, ______ selected by the City (if less than all of said Bonds outstanding of a single maturity shall be called for redemption, such Bonds to be so redeemed shall be selected by the City by lot) at the redemption prices expressed as percentages of their principal amounts plus accrued interest to the redemption date as set forth in the table below:
Redemption Period (Dates Inclusive) Redemption Price
________ 1, _____ through ________ 30, ____ %
________ 1, _____ through ________ 30, ____
________ 1, _____ and thereafter]
[In the event that this Bond is called for redemption prior to maturity as aforesaid, notice thereof shall be given by first class mail, postage prepaid to the registered owner shown on the registration books not more than sixty (60) days nor less than thirty (30) days prior to the date fixed for redemption. If this Bond is called for redemption as aforesaid, it will cease to bear interest on the specified redemption date provided funds for its redemption are on deposit at the place of payment at that time.]
This Bond is one of an issue of bonds (the "Bonds") of like date and tenor, except as to maturity and rate of interest, and has been duly authorized, and is issued pursuant to Section 50, Chapter 158, Volume 36, Laws of Delaware, (the "City Charter"), as amended, and by a Resolution adopted June 14, 1993 (the "Resolution") by the Mayor and City Council of the City to finance, in whole or in part, certain projects of the City described therein and to provide for the refunding of certain outstanding indebtedness.
It is hereby certified and recited that all conditions, acts and things required by the Constitution or statutes of The State of Delaware to exist, be performed or happen, precedent to or in the issuance of this Bond, exist, have been performed and have happened, and that the amount of this Bond, together with all other indebtedness of the City, is within every debt and other limit prescribed by said Constitution or statutes. The full faith and credit of the City are hereby pledged to the punctual payment of the principal of and interest on this Bond according to its terms.
The Bonds are issuable in the form of registered bonds without coupons in the denomination of $5,000 or any multiple thereof. The owner of any registered Bond or Bonds may surrender the same (together with a written instrument of transfer satisfactory to the City duly executed by the registered owner or his duly authorized attorney) at the office of the City Treasurer, in exchange for an equal aggregate principal amount of registered Bonds, of the same maturity and of any other authorized denominations.
Any transfer of this Bond must be registered, as provided in the Resolution, upon the Bond Register kept for that purpose at the office of the City Treasurer by the registered owner hereof in person, or by his attorney duly authorized in writing, upon surrender of this Bond together with a written instrument of transfer satisfactory to the City duly executed by the registered owner or his attorney duly authorized in writing and thereupon a new registered Bond or Bonds, of the same series and security and in the same aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in the Resolution free of charge except for any applicable transfer tax or other governmental charge. The City may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes, as provided in the Resolution.
IN WITNESS WHEREOF, the City has caused this Bond to be signed by the Mayor of The City of Dover by his manual signature or a facsimile thereof and by the Treasurer of The City of Dover by his manual signature or a facsimile thereof to be imprinted or impressed hereon and this Bond to be dated as of the date set forth above and the official corporate seal of said City or a facsimile thereof to be imprinted or impressed hereon.
(SEAL)
Mayor, The City of Dover
Treasurer, The City of Dover
EXHIBIT D
NOTICE OF SALE
THE CITY OF DOVER
$____________ *GENERAL OBLIGATION BONDS - SERIES 1993
Notice is hereby given that The City of Dover will receive sealed proposals for the purchase of the bonds referred to above (the "Bonds") of THE CITY OF DOVER (the "City") at the offices of Potter Anderson & Corroon, 350 Delaware Trust Building, 9th and Market Streets, Wilmington, Delaware, until 11:00 a.m. on June 16, 1993 (or on such later date as the City shall announce to interested bidders) at which time and place all proposals received will be publicly opened. Bids may be telecopied to (302) 658-1192. The bidder bears the risk of any delay in receipt of any telecopied bid.
Description of the Bonds
The Bonds will be dated June 15, 1993 with interest payable from the date of the Bonds commencing January 1, 1994 and thereafter semi-annually on each January 1 and July 1 on the outstanding principal amount thereof and will mature in amounts and on dates as follows:
Principal Principal
July 1 Amount* July 1 Amount*
1994 $ 2002 $
1995 2003
1996 2004
1997 2005
1998 2006
1999 2007
2000 2008
2001
No Optional Redemption
The Bonds shall not be subject to optional redemption by the City prior to their stated maturities.
Form of Bids and Basis of Award
Bids must be submitted on Official Bid Forms, without modification or change. Bidders are invited to name the rate or rates of interest which the Bonds are to bear. Each rate named must be a multiple of one-eighth or one-twentieth of one per centum per annum. Each proposal should be enclosed in a sealed envelope marked "Proposal for Bonds" and should be addressed to the undersigned as Treasurer, The City of Dover. The Bonds will bear interest at the rate or rates per annum named in the proposal accepted. No proposal for less than all of the Bonds and no proposal offering to pay less than 98% of par, plus accrued interest on the Bonds, will be considered. The proposal may name one rate for part of the Bonds and another rate or rates for the balance of the Bonds. The difference between the lowest and highest rates named in the proposal shall not exceed four per centum, such rates to be in ascending order. Any rate must be for an entire maturity in any one year.
The Bonds will be awarded to the bidder who offers to buy the Bonds at the lowest true interest cost, expressed in dollars, to the City. The lowest true interest cost will be determined by doubling the semiannual interest rate necessary to discount the semiannual debt service payments from the payment dates to the date of the Bonds (June 15, 1993) and to the price bid, excluding interest accrued to the date of delivery. The City reserves the right to waive any irregularity or informality in any proposal and to reject any and all proposals. All proposals shall remain firm for four (4) hours after the time specified for the opening of the proposals, and an award of the Bonds or rejection of the proposals will be made by the City within such period of time.
* The Bonds are being issued for the purposes of (I) funding certain capital projects and (ii) advance refunding certain outstanding debt of the City. The City will establish the tentative principal amounts of each maturity of the Bonds and will notify potential bidders, not later than 10:00 a.m., New York time, on June 16, 1993, (or such later date that the City determines to request bids) either that there is no change in the numbers as set forth above or the extent to which such amounts are modified. The City reserves the right to adjust the principal amount of and maturity schedule for the Bonds, if, after computation of the bids, the City determines, in its sole discretion, that the funds necessary to accomplish the refunding is either more or less than the proceeds of sale of the Bonds in the principal amounts tentatively determined. The City may either increase or decrease, to the extent necessary (up to 10% per maturity), the principal amount of each maturity (all calculations to be rounded to the nearest $5,000).
Book Entry
The Bonds will be issued in book-entry form with no physical distribution of Bond certificates made to the public. One Bond certificate for each maturity will be issued in the name of DTC or its nominee and immobilized in its custody. A book-entry system is expected to be employed showing ownership of the bonds in principal amounts of $1,000, or integral multiples thereof, with transfers of beneficial ownership effected on the records of DTC (and its participants) pursuant to rules and procedures established by DTC. The winning bidder, as a condition to delivery of the Bonds, will be required to deposit the Bond certificates with DTC, registered in the name of Cede & Co. a nominee of DTC. The City does not presently intend to apply for listing of the Bonds on the New York Stock Exchange.
It is anticipated that CUSIP identification numbers will be assigned to each maturity of the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of or pay for the Bonds in accordance with the terms of the purchase contract.
Interest on Bonds
Interest on the Bonds is payable by wire transfer to DTC or its nominee. Principal on the Bonds will be payable to DTC in exchange for the applicable Bonds. Principal and interest are payable in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts.
Delivery of Bonds
The Bonds are expected to be delivered on or about June 29, 1993 through the facilities of DTC, in New York, New York. The City will make available to the purchaser, without cost to the purchaser, at the time the Bonds are paid for, the opinions and certificates referred to under the caption "Opinions and Certificates Available on Delivery of Bonds" in the Preliminary Official Statement dated June 11, 1993 prepared and distributed by the City in connection with the offering for sale of the Bonds.
Certification of Issue Price
In order to provide the City with information required to enable it to comply with certain requirements of the Internal Revenue Code of 1986 relating to the exclusion of interest on the Bonds from gross income for Federal income tax purposes, the successful bidder will be required to execute and deliver to the City at the time of the delivery of the Bonds a certificate as to the "issue price" in substantially the form available from the City. In the event a successful bidder will not offer the Bonds for sale or is unable to sell a substantial amount of the Bonds by the date of delivery, such certificate may be modified in a manner approved by the City. Each bidder, by submitting its bid, agrees to execute and deliver such a certificate by the date of delivery of the Bonds, if its bid is accepted by the City. It will be the responsibility of the successful bidder to institute such syndicate reporting requirements, to make such investigation, or otherwise to ascertain the facts necessary to enable it to make such certification with reasonable certainty.
Additional Information
Information concerning Bond ratings, the scheduling of the receipt and opening of the bids for the Bonds or any other information in connection with the offer and sale of the bonds will be given to prospective bidders by telecopy or other written or verbal communication as the City may determine to be reasonable, and any such supplemental information shall be deemed a part of this Notice of Sale.
M.C. Karia
Treasurer
City of Dover, Delaware
Dated: June 11, 1993
THE CITY OF DOVER, DELAWARE
$________ *GENERAL OBLIGATION BONDS - SERIES 1993