RESOLUTION NO. 6890
RESOLUTION DETERMINING THE INTENT OF THE CITY OF LAWRENCE, KANSAS, TO ISSUE ITS INDUSTRIAL REVENUE BONDS IN THE AMOUNT OF APPROXIMATELY $19,000,000 TO FINANCE THE COSTS OF ACQUIRING, CONSTRUCTING AND EQUIPPING AN INDUSTRIAL FACILITY FOR THE BENEFIT OF THE BOWERSOCK MILLS & POWER COMPANY.
WHEREAS, the City of Lawrence, Kansas (the “City”), desires to promote, stimulate and develop the general welfare and economic prosperity of the City and its inhabitants and thereby to further promote, stimulate and develop the general welfare and economic prosperity of the State of Kansas; and
WHEREAS, the City is authorized and empowered under the provisions of K.S.A. 12‑1740 to 12‑1749d, inclusive (the “Act”), to issue industrial revenue bonds to pay the cost of certain facilities (as defined in the Act) for the purposes set forth in the Act and to lease such facilities to private persons, firms or corporations; and
WHEREAS, Bowersock Mills & Power Company, a Kansas corporation (the “Company”), has submitted to the City an Application for the Issuance of Industrial Revenue Bonds requesting that the City finance the cost of acquiring, constructing and equipping an industrial facility as more fully described in the Application (the “Project”) through the issuance of industrial revenue bonds in one or more series in the amount of approximately $19,000,000, and to lease the Project to the Company or its successors and assigns in accordance with the Act; and
WHEREAS, it is hereby found and determined to be advisable and in the interest and for the welfare of the City and its inhabitants that the City finance the costs of the Project by the issuance of industrial revenue bonds under the Act in a principal amount of approximately $19,000,000, said bonds to be payable solely out of rentals, revenues and receipts derived from the lease of the Project by the City to the Company.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF LAWRENCE, KANSAS, AS FOLLOWS:
Section 1. Approval of Project. The Governing Body of the City hereby finds and determines that the acquiring, constructing and equipping of the Project will promote the general welfare and economic prosperity of the City, and the issuance of industrial revenue bonds to pay such costs will be in furtherance of the public purposes set forth in the Act.
Section 2. Intent to Issue Bonds. The Governing Body of the City hereby determines and declares the intent of the City to acquire, construct and equip the Project out of the proceeds of industrial revenue bonds of the City in a principal amount of approximately $19,000,000 to be issued pursuant to the Act.
Section 3. Provision for the Bonds. Subject to the conditions of this Resolution, the City will (i) issue industrial revenue bonds to pay the costs of acquiring, constructing, rehabilitating and equipping the Project, with such maturities, interest rates, redemption terms and other provisions as may be determined by ordinance of the City; (ii) provide for the lease (with an option to purchase) of the Project to the Company; and (iii) to effect the foregoing, adopt such resolutions and ordinances and authorize the execution and delivery of such instruments and the taking of such action as may be necessary or advisable for the authorization and issuance of said bonds and take or cause to be taken such other action as may be required to implement the aforesaid.
Section 4. Conditions to Issuance. The issuance of said bonds and the execution and delivery of any documents related to the Bonds are subject to (i) obtaining any necessary governmental approvals; (ii) agreement by the City, the Company and the purchaser of the bonds upon (a) mutually acceptable terms for the bonds and for the sale and delivery thereof and (b) mutually acceptable terms and conditions of any documents related to the issuance of the bonds and the Project; (iii) the Company’s compliance with the City’s policies relating to the issuance of industrial revenue bonds; and (v) payment to the City of the applicable bond origination fee at closing.
Section 5. Sale of the Bonds. The sale of the bonds and all issuance costs shall be the responsibility of the Company.
Section 6. Recovery Zone Facility Bonds and Qualified Energy Conservation Bonds. The City will take all reasonable actions to assist the Company in applying for and obtaining an allocation of Recovery Zone Facility Bonds and/or Qualified Energy Conservation Bonds from the State of Kansas.
Section 7. Limited Obligations of the City. The bonds and the interest thereon shall be special, limited obligations of the City payable solely out of the amounts derived by the City under the Lease Agreement and as provided herein and are secured by a transfer, pledge and assignment of and a grant of a security interest in the Trust Estate to the Trustee and in favor of the Owners of the bonds, as provided in the Indenture. The Bonds shall not constitute a general obligation of the City, the State or of any other political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the full faith and credit of the City, the State or of any other political subdivision thereof and shall not be payable in any manner by taxation, but shall be payable solely from the funds provided for as provided in the Indenture. The issuance of the bonds shall not, directly, indirectly or contingently, obligate the City, the State or any other political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment.
Section 8. Required Disclosure. Any disclosure document prepared in connection with the offering of the bonds shall contain the following disclaimer:
NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT, OTHER THAN WITH RESPECT TO INFORMATION CONCERNING THE CITY CONTAINED UNDER THE CAPTIONS “THE CITY” AND “LITIGATION -- THE CITY” HEREIN, HAS BEEN SUPPLIED OR VERIFIED BY THE CITY, AND THE CITY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.
Section 9. Reimbursement of Expenditures. The Company has made certain expenditures in connection with the purchase, construction and equipping of the Project, and expects to make additional similar expenditures after the date of this resolution and before the issuance of the Bonds, and the City desires and intends to reimburse the Company, solely from the proceeds of the Bonds, for such Project expenditures paid not earlier than 60 days before the date of this Resolution, except to the extent otherwise permitted by applicable Federal tax law. The Company is only entitled to reimbursement of such expenditures if and to the extent Bonds are issued by the City.
Section 10. Public Hearing and Approval. The City Clerk is hereby authorized to conduct a public hearing with respect to the issuance of the Bonds to finance the Project and to cause notice of such hearing to be published in accordance with the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended. The obligation of the City to proceed with the final issuance of the Bonds shall be subject to receipt of public approval for such issuance as required under said Section 147(f).
Section 11. Further Action. Counsel to the City and Gilmore & Bell, P.C., Bond Counsel for the City, together with the officers and employees of the City, are hereby authorized to work with the purchaser of the bonds, the Company, their respective counsel and others, to prepare for submission to and final action by the City all documents necessary to effect the authorization, issuance and sale of the bonds and other actions contemplated hereunder.
Section 12. Effective Date. This Resolution shall take effect and be in full force immediately after its adoption by the Governing Body of the City.
ADOPTED BY THE COMMISSION OF THE CITY OF LAWRENCE, KANSAS THIS 6TH DAY OF JULY, 2010.
Mike Amyx, Mayor
Jonathan Douglass, City Clerk