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Resolution authorizing the issuance, sale and payment of federally taxable general obligation refunding bonds in an approximate principal amount of $61,000,000; and providing for the levy of ad valorem taxes for the payment of debt service on the bonds
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WHEREAS, the Metropolitan Government is authorized under the Act and the Charter (as such terms are hereafter defined) to issue its general obligation bonds for the purpose of refunding its outstanding general obligation bonds; and
WHEREAS, the Metropolitan Council hereby finds that it is in the best interest of the citizens of the Metropolitan Government to refund the Metropolitan Government’s General Obligation Improvement Bonds, Series 2015C, dated July 30, 2015, maturing July 1, 2026, through July 1, 2028 (the “Series 2015C Bonds”); and
WHEREAS, the refunding of the Series 2015C Bonds is intended to provide the Metropolitan Government with greater flexibility regarding the use of the projects financed thereby and may also result in debt service savings to the Metropolitan Government; and
WHEREAS, the plan of refunding for the Series 2015C Bonds, as required by Section 9-21-903, Tennessee Code Annotated, as amended, has been submitted to the State Director of Local Government Finance (the "State Director"), and she has acknowledged receipt thereof and submitted her report thereon to the Metropolitan Government; and
WHEREAS, for the purpose of refunding the Series 2015C Bonds, the Metropolitan Council hereby finds it to be in the best interest of the citizens of the Metropolitan Government to issue its general obligation refunding bonds in one or more series upon the terms provided herein.
NOW THEREFORE, BE IT RESOLVED BY THE METROPOLITAN COUNTY COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY AS FOLLOWS:
ARTICLE I.
DEFINITIONS
Section 1.1. Definition of Terms. The following words and terms as used herein, whether or not the words have initial capitals, shall have the following meanings, unless the context or use indicates another or different meaning or intent, and such definitions shall be equally applicable to both the singular and plural forms of any of the words and terms herein defined:
"Act" means Title 9, Chapter 21, Tennessee Code Annotated, as amended.
"Authorized Officer of the Metropolitan Government" means the Metropolitan Mayor, the Vice Mayor, the Director of Finance, the Metropolitan Treasurer, or, in the case of any act to be performed or duty to be discharged, any other member, officer, or employee of the Metropolitan Government then authorized to perform such act or discharge such duty.
"Bonds" means each series of general obligation refunding bonds authorized by this Bond Resolution.
"Bond Resolution" means this resolution, as it may be amended from time to time.
"Bondholder", "holder" and "registered owner" means the registered owner of a Bond.
"Charter" means the Charter of The Metropolitan Government of Nashville and Davidson County authorized in referendum on June 28, 1962, as amended.
"Closing Date" means the date of delivery and payment of the Bonds (or any temporary Bonds as authorized by Section 3.6 hereof).
"Debt Management Policy" means the debt management policy of the Metropolitan Government adopted by Metropolitan Council Ordinance No. BL2023-1872, as may hereafter be amended.
"Defeasance Obligations" means direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States.
"Director of Finance" means the Director of Finance of the Metropolitan Government appointed pursuant to the provisions of the Charter or, in the absence of such appointment or in the event the person so appointed is unable or incapable of acting in such capacity, the person appointed by the Metropolitan Mayor to perform the duties otherwise performed by the Director of Finance, or his or her designee.
"Director of Law" means the Director of Law of the Metropolitan Government appointed pursuant to the provisions of the Charter or, in the absence of such appointment or in the event the person so appointed is unable or incapable of acting in such capacity, the person appointed by the Metropolitan Mayor to undertake the duties otherwise performed by the Director of Law, or his or her designee.
"Federally Taxable Bonds" means Bonds, the interest on which is includable in gross income of the holders thereof for federal income tax purposes.
"Financing Agreement" means an agreement or agreements providing for the purchase and sale of the Bonds, by and between the Purchaser and the Metropolitan Government, with such terms as may be required by the Purchaser and approved by the Metropolitan Mayor, in consultation with the Director of Finance, the Director of Law and the Municipal Advisor, and within the parameters provided herein.
"General Services District" means the General Services District of the Metropolitan Government as defined and specified in the Charter.
"Metropolitan Clerk" means the Metropolitan Clerk of the Metropolitan Government appointed pursuant to the provisions of the Charter or his or her designee acting on his or her behalf pursuant to the Charter.
"Metropolitan Council" means the Metropolitan County Council of the Metropolitan Government elected pursuant to the provisions of the Charter.
"Metropolitan Government" means The Metropolitan Government of Nashville and Davidson County.
"Metropolitan Mayor" means the Metropolitan Mayor of the Metropolitan Government elected pursuant to the provisions of the Charter or his or her designee acting on his or her behalf pursuant to the Charter.
"Metropolitan Treasurer" means the Metropolitan Treasurer of the Metropolitan Government appointed pursuant to the provisions of the Charter, or his or her designee acting on his or her behalf pursuant to the Charter.
"Municipal Advisor" means Hilltop Securities Inc.
"Outstanding" means, as of a particular date all Bonds issued and delivered under this Bond Resolution except: (1) any Bond paid or redeemed or otherwise canceled by the Metropolitan Government at or before such date; (2) any Bond for the payment of which cash, equal to the principal amount thereof with interest to date of maturity, shall have theretofore been deposited prior to maturity by the Metropolitan Government for the benefit of the Owner thereof; (3) any Bond for the redemption of which cash, equal to the redemption price thereof with interest to the redemption date, shall have theretofore been deposited with the Registration Agent and for which notice of redemption shall have been mailed in accordance with this Bond Resolution; (4) any Bond in lieu of or in substitution for which another Bond shall have been delivered pursuant to this Bond Resolution, unless proof satisfactory to the Metropolitan Government is presented that any Bond, for which a Bond in lieu of or in substitution therefor shall have been delivered, is held by a bona fide purchaser, as that term is defined in Article 8 of the Uniform Commercial Code of the State, as amended, in which case both the Bond in lieu of or in substitution for which a new bond has been delivered and such new Bond so delivered therefor shall be deemed Outstanding; and (5) any Bond deemed paid under the provisions of Article VI of this Bond Resolution, except that any such Bond shall be considered Outstanding until the maturity or redemption date thereof only for the purposes of being exchanged, transferred, or registered.
"Registration Agent" means U.S. Bank Trust Company, National Association, acting as registration and paying agent appointed in the manner provided in Article V hereof, or its successor or successors; provided that, if determined by the Metropolitan Mayor to be in the best interests of the Metropolitan Government, the Registration Agent may be an Authorized Officer of the Metropolitan Government.
"Purchaser" means any purchaser or purchasers of the Bonds from the Metropolitan Government, as selected by the Metropolitan Mayor, in consultation with the Director of Finance and the Municipal Advisor.
"Series 2015C Bonds" shall have the meaning ascribed in the preamble.
"Urban Services District" means the Urban Services District of the Metropolitan Government as defined and specified in the Charter.
"Vice Mayor" means the Vice Mayor elected pursuant to the provisions of the Charter or his or her designee acting on his or her behalf pursuant to the Charter.
ARTICLE II.
AUTHORITY, PLEDGE, AND LEVY
Section 2.1. Authority. For the purposes of (i) refunding the Series 2015C Bonds and (ii) paying costs incident to the sale and issuance of the Bonds, there shall be issued pursuant to, and in accordance with, the provisions of the Act, the Charter and other applicable provisions of law, general obligation refunding bonds of the Metropolitan Government in one or more series. The Metropolitan Government is hereby authorized to issue the Bonds as Federally Taxable Bonds, upon the terms provided in this Bond Resolution.
Section 2.2. Pledge. Debt service on the Bonds shall be payable from ad valorem taxes to be levied for such purpose on all taxable property in the Metropolitan Government without limit as to time, rate, or amount. Said Bonds shall be direct general obligations of the Metropolitan Government, and the full faith and credit of the Metropolitan Government, together with the taxing power of the Metropolitan Government as to all taxable property in the Metropolitan Government, are hereby irrevocably pledged. Without limiting the foregoing, the debt service on the Bonds is intended to be paid from (i) the debt service fund of the General Services District for debt service attributable to Bonds the proceeds of which shall refund Series 2015C Bonds that financed or refinanced projects in the General Services District, (ii) the debt service fund of the Urban Services District for debt service attributable to Bonds the proceeds of which shall refund Series 2015C Bonds that financed or refinanced projects in the Urban Services District, and (iii) the school debt service fund for debt service attributable to Bonds the proceeds of which shall refund Series 2015C Bonds that financed or refinanced school projects.
Section 2.3. Levy of Ad Valorem Taxes. For the purpose of providing for the payment of debt service on the Bonds, there shall be levied in each year in which such Bonds shall be outstanding a direct tax on all taxable property in the Metropolitan Government, fully sufficient to pay all such debt service falling due prior to the time of collection of the next succeeding tax levy in the following manner: (a) General Services District ad valorem taxes shall be levied in an amount sufficient to pay that portion of such debt service attributable to Bonds issued to refund Series 2015C Bonds that financed or refinanced school projects and projects in the General Services District; and (b) Urban Services District ad valorem taxes shall be levied in an amount sufficient to pay that portion of such debt service attributable to Bonds issued to refund Series 2015C Bonds that financed or refinanced projects in the Urban Services District. Notwithstanding the foregoing, the Metropolitan Government shall be unconditionally and irrevocably obligated to levy and collect ad valorem taxes without limit as to rate or amount on all taxable property within the boundaries of the Metropolitan Government to the full extent necessary to pay all debt service on the Bonds, and the full faith and credit of Metropolitan Government shall be pledged to the payment thereof. Said ad valorem tax shall be assessed, collected, and paid at the time, and in the same manner, as the other taxes of the Metropolitan Government, shall be in addition to all other taxes, and shall be without limitation as to time, rate, or amount; provided, however, the tax may be reduced to the extent of any appropriations to the payment of debt service on the Bonds from other funds, taxes and revenues of the Metropolitan Government. Principal, premium, if any, and interest, on any of the Bonds, falling due at any time when there shall be insufficient funds on hand from such ad valorem tax levy for the payment thereof shall be paid from current funds of the Metropolitan Government, and reimbursement therefor may be made from the taxes herein provided when the same shall have been collected.
ARTICLE III.
FORM, TERMS, EXECUTION, AND TRANSFER OF BONDS
Section 3.1. Authorized Bonds and Findings of the Metropolitan Government. No Bonds may be issued under the provisions of this Bond Resolution except in accordance with the provisions of this Article. The aggregate principal amount of Bonds that may be issued under the Bond Resolution shall not exceed the amount necessary to refund the Series 2015C Bonds and pay related costs, as permitted by Section 9-21-904, Tennessee Code Annotated, as amended. The Metropolitan Government hereby finds that the refunding of the Series 2015C Bonds is advantageous and necessary to the Metropolitan Government for the purposes hereinabove set forth.
Section 3.2. Form of Bonds; Execution.
(a) The Bonds are issuable only as fully registered bonds, without coupons, and may be issued in a single denomination equal to the initial principal amount thereof or in such other denomination(s), or any integral multiple thereof, as requested by the Purchaser. All Bonds issued under this Bond Resolution shall be substantially in the form set forth in Exhibit A attached hereto, with such appropriate variations, omissions, and insertions as are permitted or required by this Bond Resolution, the blanks therein to be appropriately completed when the Bonds are prepared, and may have endorsed thereon such legends or text as may be necessary or appropriate to conform to any applicable rules and regulations of any governmental authority or any usage or requirement of law with respect thereto or as otherwise desired by the Metropolitan Government.
(b) The Bonds shall be executed in such manner as may be prescribed by applicable law in the name, and on behalf of, the Metropolitan Government with the manual or facsimile signature of the Metropolitan Mayor, and with the official seal, or a facsimile thereof, of the Metropolitan Government impressed or imprinted thereon, attested by the manual or facsimile signature of the Metropolitan Clerk, and approved as to form and legality by the Director of Law by his or her manual or facsimile signature.
(c) In the event any officer whose manual or facsimile signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such manual or such facsimile signature shall nevertheless be valid and sufficient for all purposes as if he or she had remained in office until such delivery. Any Bond may bear the facsimile signature of, or may be manually signed by, such individuals who, at the actual time of the execution of such Bond, were the proper officers of the Metropolitan Government to sign such Bond, although on the date of the adoption by the Metropolitan Government of this Bond Resolution, such individuals may not have been such officers.
Section 3.3. Maturities, Interest Rates, and Certain Other Provisions of Bonds.
(a) The Bonds shall be designated "General Obligation Refunding Bonds, Series 2025 (Federally Taxable)" or such other designation as shall be determined pursuant to Section 7.1 hereof. The Bonds shall be dated the Closing Date or such other date as shall be established pursuant to Section 7.1 hereof. Subject to adjustments permitted in Section 7.1 hereof, the Bonds shall bear interest from the date thereof at a rate or rates not exceeding 6.00%, such interest being payable semi-annually on the first day of January and July of each year, commencing on January 1, 2026. Subject to adjustments permitted in Section 7.1 hereof, the Bonds shall mature either serially or through mandatory redemption, commencing on July 1, 2026, through July 1, 2028, in such amounts as shall be determined by the Metropolitan Mayor, in consultation with the Director of Finance and Municipal Advisor.
(b) The Bonds shall be payable, including principal, premium, if any, and interest, in lawful money of the United States of America at the principal corporate trust office of the Registration Agent. The Registration Agent shall make all interest payments with respect to the Bonds on each interest payment date directly to the registered owners as shown on the Bond registration records maintained by the Registration Agent as of the close of business on the fifteenth day of the month next preceding the interest payment date (the "Regular Record Date") by check or draft mailed to such owners at their addresses shown on said Bond registration records, without, except for final payment, the presentation or surrender of such registered Bonds, and all such payments shall discharge the obligations of the Metropolitan Government in respect of such Bonds to the extent of the payments so made. Payment of principal of and premium, if any, on the Bonds shall be made as the same shall become due and payable. All rates of interest specified herein shall be computed on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each. If requested by the owner of at least $1,000,000 in aggregate principal amount of the Bonds, payment of interest on such Bonds shall be paid by wire transfer to a bank within the continental United States or deposited to a designated account if such account is maintained with the Registration Agent and written notice of any such election and designated account is given to the Registration Agent prior to the record date.
(c) Any interest on any Bond which is payable but is not punctually paid or duly provided for on any interest payment date (hereinafter "Defaulted Interest") shall forthwith cease to be payable to the registered owner on the relevant Regular Record Date; and, in lieu thereof, such Defaulted Interest shall be paid by the Metropolitan Government to the persons in whose names the Bonds are registered at the close of business on a date (the "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Metropolitan Government shall notify the Registration Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment, and at the same time the Metropolitan Government shall deposit with the Registration Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Registration Agent for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this Section provided. Thereupon, not less than ten (10) days after the receipt by the Registration Agent of the notice of the proposed payment, the Registration Agent shall fix a Special Record Date for the payment of such Defaulted Interest which Date shall be not more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment to the registered owners. The Registration Agent shall promptly notify the Metropolitan Government of such Special Record Date and, in the name and at the expense of the Metropolitan Government, not less than ten (10) days prior to such Special Record Date, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each registered owner at the address thereof as it appears in the Bond registration records maintained by the Registration Agent as of the date of such notice. Nothing contained in this Section or in the Bonds shall impair any statutory or other rights in law or in equity of any registered owner arising as a result of the failure of the Metropolitan Government to punctually pay or duly provide for the payment of principal of, premium, if any, and interest on the Bonds when due.
Section 3.4. Negotiability of Bonds. All Bonds issued under this Bond Resolution shall be negotiable, subject to the provisions for registration and transfer contained in this Bond Resolution and in the Bonds.
Section 3.5. Registration, Transfer and Exchange of Bonds.
(a) The Bonds are transferable only by presentation to the Registration Agent by the registered owner, or his or her legal representative duly authorized in writing, of the registered Bond(s) to be transferred with the form of assignment on the reverse side thereof completed in full and signed with the name of the registered owner as it appears upon the face of the Bond(s) accompanied by appropriate documentation necessary to prove the legal capacity of any legal representative of the registered owner. Upon receipt of the Bond(s) in such form and with such documentation, if any, the Registration Agent shall issue a new Bond or Bonds to the assignee(s) in the same denomination(s). The Registration Agent shall not be required to transfer or exchange any Bond during the period commencing on a Regular or Special Record Date and ending on the corresponding interest payment date of such Bond, nor to transfer or exchange any Bond after the publication of notice calling such Bond for redemption has been made, nor to transfer or exchange any Bond during the period following the receipt of instructions from the Metropolitan Government to call such Bond for redemption; provided, the Registration Agent, at its option, may make transfers after any of said dates. No charge shall be made to any registered owner for the privilege of transferring any Bond, provided that any transfer tax relating to such transaction shall be paid by the registered owner requesting transfer. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and neither the Metropolitan Government nor the Registration Agent shall be affected by any notice to the contrary whether or not any payments due on the Bonds shall be overdue. Bonds, upon surrender to the Registration Agent, may, at the option of the registered owner, be exchanged for an equal aggregate principal amount of Bonds of the same maturity in any authorized denomination or denominations.
Section 3.6. Authorization and Preparation of Temporary Bonds.
(a) Without unreasonable delay after the sale thereof, the Metropolitan Government shall cause definitive Bonds to be prepared, executed, and delivered to the purchaser or purchasers thereof, which Bonds shall be fully engraved (as that term is customarily used) or lithographed or printed on steel engraved borders, or, if acceptable to the purchaser or purchasers of such Bonds (such acceptance to be conclusively evidenced by the acceptance of such Bonds by such purchaser or purchasers), such definitive Bonds may be typewritten, printed, photocopied, or any combination of the foregoing. Until such definitive Bonds are ready for delivery, there may be executed by the Metropolitan Government, and upon request by an Authorized Officer of the Metropolitan Government, the Registration Agent shall also authenticate and deliver, in lieu of definitive Bonds and subject to the same limitations and conditions, temporary typewritten, printed, engraved, lithographed, or photocopied Bonds, or Bonds having any combination of the foregoing, as prepared and executed by the Metropolitan Government, which temporary Bonds shall be substantially of the tenor of such definitive Bonds but with such appropriate omissions, insertions, and variations as may be required.
(b) Until definitive Bonds are ready for delivery, any temporary Bond may be exchanged at the principal corporate trust office of the Registration Agent, without charge to the Bondholder, for an equal aggregate principal amount of temporary Bonds of like tenor, of the same maturity and bearing interest at the same rate.
(c) When and after definitive Bonds are ready for delivery, the Registration Agent, upon surrender to the Registration Agent at the principal corporate trust office of the Registration Agent of a temporary Bond or Bonds, shall cancel such temporary Bond or Bonds and authenticate and deliver in exchange therefor, without charge to such Bondholder, a definitive Bond or Bonds in an equal aggregate principal amount, and having the same maturity or maturities, interest rate or rates, and registration and redemption provisions as the temporary Bond or Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security of the Bond Resolution as the definitive Bonds to be issued under such Bond Resolution.
(d) Interest on temporary Bonds, when due and payable, if the definitive Bonds shall not be ready for exchange, shall be paid on presentation of such temporary Bonds and notation of such payment shall be endorsed thereon.
(e) All temporary Bonds surrendered in exchange for a definitive Bond or Bonds shall forthwith be canceled.
Section 3.7. Mutilated, Lost, Stolen, or Destroyed Bonds.
(a) In the event any Bond is mutilated, lost, stolen, or destroyed, the Metropolitan Government may execute, and upon the request of an Authorized Officer of the Metropolitan Government the Registration Agent shall authenticate and deliver, a new Bond of like maturity, interest rate, and principal amount, and bearing the same number (but with appropriate designation indicating that such new Bond is a replacement Bond) as the mutilated, destroyed, lost, or stolen Bond, in exchange for the mutilated Bond or in substitution for the Bond so destroyed, lost, or stolen. In every case of exchange or substitution, the Bondholder shall furnish to the Metropolitan Government and the Registration Agent: (1) such security or indemnity as may be required by them to save each of them harmless from all risks, however remote; and, (2) evidence to their satisfaction of the mutilation, destruction, loss, or theft of the subject Bond and the ownership thereof. Upon the issuance of any Bond upon such exchange or substitution, the Metropolitan Government and the Registration Agent may require the owner thereof to pay a sum sufficient to defray any tax or other governmental charge that may be imposed in relation thereto and any other expenses, including printing costs and counsel fees, of the Metropolitan Government and the Registration Agent. In the event any Bond which has matured or is about to mature shall become mutilated or be destroyed, lost, or stolen, the Metropolitan Government may, instead of issuing a Bond in exchange or substitution therefor, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Bond) if the owner thereof shall pay all costs and expenses, including attorneys' fees, incurred by the Metropolitan Government and the Registration Agent in connection herewith, as well as a sum sufficient to defray any tax or other governmental charge that may be imposed in relation thereto and shall furnish to the Metropolitan Government and the Registration Agent such security or indemnity as they may require to save them harmless and evidence to the satisfaction of the Metropolitan Government and the Registration Agent the mutilation, destruction, loss, or theft of such Bond and of the ownership thereof.
(b) Every Bond issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Metropolitan Government (whether or not the destroyed, lost, or stolen Bond shall be found at any time to be enforceable) and shall be entitled to all the benefits of this Bond Resolution equally and proportionately with any and all other bonds duly issued under this Bond Resolution.
(c) All Bonds shall be held and owned upon the express condition that the provisions of this Section are exclusive, with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Bonds, and, to the maximum extent legally permissible, shall preclude all other rights or remedies, notwithstanding any law or statute now existing or hereafter enacted to the contrary.
Section 3.8. Authentication. The Registration Agent is hereby authorized to authenticate and deliver the Bonds to the Purchaser or as it may designate upon receipt by the Metropolitan Government of the proceeds of the sale thereof, to authenticate and deliver Bonds in exchange for Bonds of the same principal amount delivered for transfer upon receipt of the Bond(s) to be transferred in proper form with proper documentation as hereinabove described. The Bonds shall not be valid for any purpose unless authenticated by the Registration Agent by the manual signature of an officer thereof on the certificate set forth herein on the Bond form.
ARTICLE IV.
REDEMPTION OF BONDS PRIOR TO MATURITY
Section 4.1. Redemption Dates and Prices.
(a) Subject to the adjustments permitted pursuant to Section 7.1 hereof, the Bonds shall not be subject to redemption prior to maturity at the option of the Metropolitan Government.
(b) Pursuant to Section 7.1 hereof, the Metropolitan Mayor and Director of Finance, or either of them, are authorized to sell the Bonds, or any maturities thereof, as term bonds ("Term Bonds") with mandatory redemption requirements as determined by the Metropolitan Mayor, in consultation with the Director of Finance and the Municipal Advisor, and approved by the Purchaser. In the event any or all the Bonds are sold as Term Bonds, the Metropolitan Government shall redeem Term Bonds on redemption dates corresponding to the maturity dates set forth herein, in aggregate principal amounts determined by the Metropolitan Mayor at a price of par plus accrued interest thereon to the date of redemption. The Term Bonds to be so redeemed shall be selected by the Registration Agent by lot or such other random manner as the Registration Agent in its discretion shall select.
ARTICLE V.
REGISTRATION AGENT
Section 5.1. Appointment and Acceptance of Duties. The Metropolitan Government hereby appoints the Registration Agent with respect to the Bonds and authorizes and directs the Registration Agent to maintain Bond registration records with respect to the Bonds, to authenticate and deliver the Bonds as provided herein, either at original issuance, upon transfer, or as otherwise directed by the Metropolitan Government, to effect transfers of the Bonds, to give all notices as required herein, to make all payments of principal and interest with respect to the Bonds as provided herein, to cancel and destroy Bonds which have been paid at maturity or upon earlier redemption or submitted for exchange or transfer, to furnish the Metropolitan Government at least annually a certificate of destruction with respect to Bonds canceled and destroyed, and to furnish the Metropolitan Government at least annually an audit confirmation of Bonds paid, Bonds Outstanding and payments made with respect to interest on the Bonds. The Metropolitan Mayor and the Director of Finance, or either of them is hereby authorized to execute and the Metropolitan Clerk is hereby authorized to attest any such written agreement between the Metropolitan Government and the Registration Agent as they shall deem necessary or proper with respect to the obligations, duties and rights of the Registration Agent. The payment of all reasonable fees and expenses of the Registration Agent for the discharge of its duties and obligations hereunder or under any such agreement is hereby authorized and directed.
Section 5.2. Permitted Acts and Functions. The Registration Agent may become the owner of any Bonds, with the same rights as it would have if it were not a Registration Agent. The Registration Agent may act as a purchaser or fiscal agent in connection with the sale of the Bonds or of any other indebtedness offered or issued by the Metropolitan Government.
Section 5.3. Resignation or Removal of the Registration Agent and Appointment of Successors.
(a) The Registration Agent may at any time resign and be discharged of the duties and obligations created by the Bond Resolution by giving at least sixty (60) calendar days' written notice to the Director of Finance. The Registration Agent may be removed at any time by the Director of Finance, provided that such removal does not constitute a breach of any contractual agreement with any such Registration Agent, by filing written notice of such removal with such Registration Agent. Any successor Registration Agent shall be appointed by the Director of Finance and shall be a trust company or a bank having the powers of a trust company, having a combined capital, surplus, and undivided profits aggregating at least Two Billion Dollars ($2,000,000,000), willing to accept the office of Registration Agent on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by the Bond Resolution.
(b) In the event of the resignation or removal of the Registration Agent, such Registration Agent shall pay over, assign and deliver any monies and securities held by it as Registration Agent, and all books and records and other properties held by it as Registration Agent, to its successor, or if there be no successor then appointed, to the Director of Finance until such successor be appointed.
Section 5.4. Merger or Consolidation of Registration Agent. Any corporation or association into which the Registration Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole, or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation, or transfer to which it is a party shall be and become successor Registration Agent hereunder and shall be vested with all the trusts, powers, discretion, immunities, privileges, and other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed, or conveyance on the part of any of the parties hereto, anything herein contained to the contrary notwithstanding. Upon any such conversion, merger, consolidation, sale or transfer, the Director of Finance shall have the right and option, upon notice to such converted, merged, consolidated or acquiring entity, to remove such entity and appoint a successor thereto pursuant to the procedures and requirements set forth in Section 5.3 hereof.
ARTICLE VI.
DEFEASANCE OF BONDS
Section 6.1. Defeasance of Bonds. If the Metropolitan Government shall pay and discharge the indebtedness evidenced by any of the Bonds in any one or more of the following ways, to wit:
(a) By paying or causing to be paid, by deposit of sufficient funds as and when required with the Registration Agent, the principal of and interest on such Bonds as and when the same become due and payable;
(b) By depositing or causing to be deposited with any trust company or financial institution whose deposits are insured by the Federal Deposit Insurance Corporation or similar federal agency and which has trust powers (an "Agent"; which Agent may be the Registration Agent) in trust or escrow, on or before the date of maturity or redemption, sufficient money or Defeasance Obligations, as hereafter defined, the principal of and interest on which, when due and payable, will provide sufficient moneys to pay or redeem such Bonds and to pay premium, if any, and interest thereon when due until the maturity or redemption date (provided, if such Bonds are to be redeemed prior to maturity thereof, proper notice of such redemption shall have been given or adequate provision shall have been made for the giving of such notice); or
(c) By delivering such Bonds to the Registration Agent, for cancellation by it;
and if the Metropolitan Government shall also pay or cause to be paid all other sums payable hereunder by the Metropolitan Government with respect to such Bonds, or make adequate provision therefor, and by resolution of the Metropolitan Council instruct any such Agent to pay amounts when and as required to the Registration Agent for the payment of principal of and interest and redemption premiums, if any, on such Bonds when due, then and in that case the indebtedness evidenced by such Bonds shall be discharged and satisfied and all covenants, agreements and obligations of the Metropolitan Government to the holders of such Bonds shall be fully discharged and satisfied and shall thereupon cease, terminate and become void.
If the Metropolitan Government shall pay and discharge the indebtedness evidenced by any of the Bonds in the manner provided in either clause (a) or clause (b) above, then the registered owners thereof shall thereafter be entitled only to payment out of the money or Defeasance Obligations deposited as aforesaid.
Except as otherwise provided in this Section, neither Defeasance Obligations nor moneys deposited with the Registration Agent pursuant to this Section nor principal or interest payments on any such Defeasance Obligations shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal and premium, if any, and interest on said Bonds; provided that any cash received from such principal or interest payments on such Defeasance Obligations deposited with the Registration Agent, (A) to the extent such cash will not be required at any time for such purpose, shall be paid over to the Metropolitan Government as received by the Registration Agent and (B) to the extent such cash will be required for such purpose at a later date, shall, to the extent practicable, be reinvested in Defeasance Obligations maturing at times and in amounts sufficient to pay when due the principal and premium, if any, and interest to become due on said Bonds on or prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestments shall be paid over to the Metropolitan Government, as received by the Registration Agent.
ARTICLE VII.
SALE OF BONDS AND DEPOSIT OF PROCEEDS
Section 7.1. Sale of Bonds. (a) The Bonds shall be sold by the Metropolitan Mayor, via an informal bid process, to the Purchaser, in such manner as is consistent with the provisions of the Act and this Bond Resolution. The Purchaser shall be the bidder(s) whose bid is in the best interests of the Metropolitan Government, as shall be determined by the Metropolitan Mayor, in consultation with the Director of Finance and Municipal Advisor. If and as required by the Purchaser in connection with the sale of the Bonds, the Metropolitan Mayor is hereby authorized and directed to execute and the Metropolitan Clerk to attest a Financing Agreement with the Purchaser, providing the details of the terms of sale. Notwithstanding anything herein to the contrary, the Bonds may be sold in multiple series with each series sold to a different Purchaser, and the Metropolitan Government may enter into a Financing Agreement with each such Purchaser, which terms in any Financing Agreement may be different from the terms of any other Financing Agreement, as agreed to by the Metropolitan Government and each such Purchaser; provided the Financing Agreement(s) shall be approved as to form and legality by the Director of Law. The sale of any series of the Bonds to the Purchaser(s) shall be binding on the Metropolitan Government, and no further action of the Metropolitan Council with respect thereto shall be required.
(b) The Metropolitan Mayor and the Director of Finance are authorized to sell the Bonds in one or more series and to make any corresponding adjustments to the maturity schedule of each such series, so long as the total aggregate principal amount of all series issued does not exceed the total aggregate principal amount of Bonds permitted to be issued as provided in Section 3.1 hereof.
(c) The Metropolitan Mayor and Director of Finance, or either of them, are further authorized with respect to each series of Bonds to:
(1) change the dated date to a date other than the date of issuance;
(2) specify the series designation;
(3) change the first interest payment date to a date other than January 1, 2026, provided that such date is not later than twelve months from the dated date of such series of Bonds;
(4) adjust the principal and interest payment dates and determine maturity or mandatory redemption amounts of the Bonds, provided that (A) the total principal amount of the Bonds does not exceed the total amount of Bonds authorized herein, and (B) the final maturity date of the Bonds shall be not later than the final maturity date of the Series 2015C Bonds;
(5) add optional redemption provisions for the Bonds;
(6) sell the Bonds, or any series thereof, or any maturities thereof as Term Bonds with mandatory redemption requirements as determined by the Metropolitan Mayor or Director of Finance and as deemed most advantageous to the Metropolitan Government; and
(7) cause all or a portion of the Bonds to be insured by a bond insurance policy issued by a nationally recognized bond insurance company to achieve the purposes set forth herein and to serve the best interests of the Metropolitan Government and to enter into agreements with such insurance company to the extent not inconsistent with this Bond Resolution;
(d) The Metropolitan Mayor is authorized to sell the Bonds, or any series thereof, simultaneously with any other bonds or notes authorized by resolution or resolutions of the Metropolitan Council. The Metropolitan Mayor is further authorized to sell the Bonds, or any series thereof, as a single issue of bonds with any other bonds with substantially similar terms authorized by resolution or resolutions of the Metropolitan Council, in one or more series as he shall deem to be advantageous to the Metropolitan Government and in doing so, the Metropolitan Mayor is authorized to change the designations of the Bonds; provided, however, that the total aggregate principal amount of combined bonds to be sold does not exceed the total aggregate principal amount of Bonds authorized by this resolution or bonds authorized by any other resolution or resolutions adopted by the Metropolitan Council.
(e) The form of the Bonds set forth in Exhibit A hereto shall be conformed to reflect any changes made pursuant to this Section 7.1 hereof.
(f) The Metropolitan Mayor and the Metropolitan Clerk are authorized to cause the Bonds to be authenticated and delivered by the Registration Agent to the Purchaser, and the Metropolitan Mayor, the Director of Finance, the Metropolitan Clerk and Director of Law are authorized to execute, publish, and deliver all certificates and documents, as they shall deem necessary in connection with the sale and delivery of the Bonds.
Section 7.2. Disposition of Bond Proceeds. The proceeds of the sale of the Bonds shall be disbursed as follows:
(a) An amount sufficient, together with such other funds of the Metropolitan Government as may be identified by the Metropolitan Mayor and, if applicable, investment earnings on the foregoing, to refund the Series 2015C Bonds shall be applied to the refunding thereof by paying such funds directly to the holders or paying agent for the holders of the Series 2015C Bonds or, if determined by the Metropolitan Mayor to be in the best interests of the Metropolitan Government, in consultation with the Director of Finance and the Municipal Advisor, by depositing such funds with an escrow agent pursuant to the terms of a refunding escrow agreement.
(b) The remaining proceeds of the sale of the Bonds shall be used to pay the costs of issuance and sale of the Bonds, including necessary legal, accounting and fiscal expenses, printing, engraving, advertising and similar expenses, administrative and clerical costs, rating agency fees, Registration Agent fees, and other necessary miscellaneous expenses incurred in connection with the issuance and sale of the Bonds. Any funds remaining after payment of said expenses shall be used to pay interest on the Bonds on the first interest payment date following delivery of the Bonds.
ARTICLE VIII.
REDEMPTION MATTERS
Section 8.1. Notice of Redemption. The Director of Finance or Metropolitan Treasurer is hereby authorized to give notice of redemption of the Series 2015C Bonds or to authorize delivery of notice(s) of redemption of the Series 2015C Bonds in accordance with the resolution authorizing the Series 2015C Bonds.
Section 8.2. Miscellaneous Acts. For the purpose of refunding the Series 2015C Bonds in the manner contemplated herein, Authorized Officers of the Metropolitan Government are hereby authorized and directed to take such actions and execute and deliver such certificates or other documents, including but not limited to a refunding escrow agreement, as may be deemed necessary or advisable to refund the Series 2015C Bonds, as determined by the Metropolitan Mayor, in consultation with the Director of Finance and Municipal Advisor.
ARTICLE IX.
MISCELLANEOUS
Section 9.1. Failure to Present Bonds.
(a) Subject to the provisions of Section 3.7 hereof, in the event any Bond shall not be presented for payment, if and as required by the Metropolitan Government, when the principal or redemption price hereof becomes due, either at maturity or at the date fixed for prior redemption thereof or otherwise, and in the event monies sufficient to pay such Bond shall be held by the Registration Agent for the benefit of the owner thereof, all liability of the Metropolitan Government to such owner for the payment of such Bond shall forthwith cease, determine, and be completely discharged. Whereupon, the Registration Agent shall hold such monies, without liability for interest thereon, for the benefit of the owner of such Bond who shall thereafter be restricted exclusively to such monies for any claim under the Bond Resolution or on, or with respect to, said Bond.
(b) If any Bond shall not be presented for payment within a period of five years following the date when such Bond becomes due, whether by maturity or otherwise, the Registration Agent shall, subject to the provisions of any applicable escheat or other similar law, pay to the Metropolitan Government any monies then held by the Registration Agent for the payment of such Bond and such Bond shall (subject to the defense of any applicable statute of limitation) thereafter constitute an unsecured obligation of the Metropolitan Government.
Section 9.2. Payments Due on Saturdays, Sundays, and Holidays. In any case where the date of maturity or interest on or principal of any Bond, or the date fixed for redemption of any Bond, shall be a Saturday or Sunday or shall be, at the place designated for payment, a legal holiday or a day on which banking institutions in the State of Tennessee are authorized by law to close, then the payment of the interest on, or the principal, or the redemption price of, such Bond need not be made on such date but must be made on the next succeeding day not a Saturday, Sunday, or a legal holiday or a day upon which banking institutions in the State of Tennessee are authorized by law to close, with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date.
Section 9.3. Miscellaneous Acts. The appropriate officers of the Metropolitan Government are hereby authorized, empowered, and directed to do any and all such acts and things, and to execute, acknowledge, deliver, and, if applicable, file or record, or cause to be filed or recorded, in any appropriate public offices, all such documents, instruments, and certifications, in addition to those acts, things, documents, instruments, and certifications hereinbefore authorized and approved, as may, in their discretion, be necessary or desirable to implement or comply with the intent of this Bond Resolution, or any of the documents herein authorized and approved, or for the authorization, issuance, and delivery by the Metropolitan Government of the Bonds.
Section 9.4. Amendment. The Metropolitan Council is hereby authorized to make such amendments to this Bond Resolution as will not impair the rights of the Bondholders.
Section 9.5. No Recourse Under Bond Resolution or on Bonds. All stipulations, promises, agreements, and obligations of the Metropolitan Government contained in this Bond Resolution shall be deemed to be the stipulations, promises, agreements, and obligations of the Metropolitan Government and not of any officer, director, or employee of the Metropolitan Government in his or her individual capacity, and no recourse shall be had for the payment of the principal of or premium, if any, or interest on the Bonds or for any claim based thereon or on this Bond Resolution against any officer, director, or employee of the Metropolitan Government or against any official or individual executing the Bonds.
Section 9.6. Partial Invalidity. If any one or more of the provisions of this Bond Resolution, or of any exhibit or attachment thereto, shall be held invalid, illegal, or unenforceable in any respect, by final decree of any court of lawful jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, or of any exhibit or attachment thereto, but this Bond Resolution, and the exhibits and attachments thereto, shall be construed the same as if such invalid, illegal, or unenforceable provision had never been contained herein, or therein, as the case may be.
Section 9.7. Debt Management Policy. In conformance with the directive of the State Funding Board of the State of Tennessee, the Metropolitan Government has heretofore adopted its Debt Management Policy. The Metropolitan Council hereby finds that the issuance and sale of the Bonds, as proposed herein, is consistent with the Metropolitan Government’s Debt Management Policy. Specifically, the Metropolitan Council hereby finds that a negotiated sale of the Bonds is in the best interest of the Metropolitan Government because of the flexibility it affords in a fluctuating market environment.
Section 9.8. Conflicting Resolutions Repealed. All resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby repealed.
Section 9.9. Effective Date. This Bond Resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government requiring it.
Agenda Analysis
Analysis
This resolution authorizes the issuance, sale, and payment of federally taxable general obligation improvement bonds in a principal amount not to exceed $61 million and providing for the levy of ad valorem taxes for the payment of debt service on the bonds. The proceeds from the sale of the bonds would refund the Metropolitan Government’s General Obligation Improvement Bonds, Series 2015C, which are dated July 30, 2015, and maturing July 1, 2026, through July 1, 2028.
The resolution provides that Metro pledges to levy ad valorem property taxes on all taxable property in the General Services and Urban Service Districts each year in an amount sufficient to pay the debt service on the bonds as required by state law. Metro will further pledge the full faith and credit of the Metropolitan Government to the payment of the bonds. These bonds would be sold through a public bidding process to the financial institution whose bid results in the lowest true interest cost to Metro.
Metro would begin making debt service payments on the bonds on January 1, 2026, and would mature either serially or through mandatory redemption beginning on July 1, 2026, through July 1, 2028.
State law does not limit the amount of general obligations bonds that may be issued by the Metropolitan Government, nor does it require the issuance of general obligation bonds to be approved by the voters. State law does require that the Metropolitan Government adopt a debt management policy - Metro’s Debt Management Policy was originally adopted by Council approval of Resolution No. RS2011-94 and was subsequently amended by Ordinance No. BL2023-1872.