SPECIAL EMERGENCY COUNCIL MEETING
A Special Emergency Meeting of Council was called to order by Mayor Carroll at 4:45 p.m. on November 15, 1985. Council members present were Messrs. Boaman, Christiansen, Witt and Shevock. Councilmen Richter, Ambruso, Weyandt and Bulley were absent.
Mayor Carroll declared the hearing open, advising that the Special Emergency Council Meeting was called to consider refunding the existing Electric Revenue Bonds. Due to the lack of a quorum, Mayor Carroll recessed the meeting until 7:00 p.m.
Council reconvened at 7:00 p.m. with Mayor Carroll presiding and Messrs. Richter, Ambruso, Boaman, Christiansen, Witt and Shevock present. Mr. Bulley and Mr. Weyandt were absent.
LEGISLATIVE AND FINANCE COMMITTEE REPORT
The Legislative and Finance Committee met on November 12, 1985 at 4:00 p.m. with Mr. Shevock presiding.
Refunding Electric Revenue Bonds
Mr. Shevock stated that the Legislative and Finance Committee recommended the adoption of a resolution that would show the intent of the City of Dover to issue advanced refunding bonds for 1965 Electric Refund Bonds, 1973 Electric Improvement Bonds, and 1973 Electric Revenue Refunding Bonds.
The Legislative and Finance Committee also recommended to dispense with the services of Government Finance Associates, Inc., noting that the services offered by the company would be taken care of during procedures preparatory for issuing the new bonds.
The committee also discussed the pros and cons of having co-managers, those being Drexel Burnham & Lambert and Merrill Lynch to perform the underwriting of the new bonds. It was the committee's recommendation that Merrill Lynch be appointed as underwriter for the Electric Refunding Bonds.
Mr. Shevock noted the absence of Chair-man Boaman during the meeting and a report from Mr. Karia who stated a conversation with Mr. Boaman revealed his opinion that underwriting of the Electric Refunding Bonds should be on a co-management basis between Merrill Lynch and Drexel Burnham & Lambert.
Mr. Witt moved to accept the Legislative and Finance Committee Report, noting that his motion for acceptance did not pertain to acceptance of the report's content. The motion was seconded by Mr. Boaman and unanimously carried.
RESOLUTION - IMPROVEMENT FUND FOR ELECTRIC SYSTEM
The City Clerk read into the record the resolution providing for the City's requirements to deposit, on a monthly basis, 25% of the net revenues of the electric system after providing for certain expenses and other fund balance requirements.
By motion of Mr. Shevock, seconded by Mr. Witt, Council by unanimous roll call vote (Mr. Bulley and Mr. Weyandt absent), adopted the following resolution:
RESOLUTION CONCERNING IMPROVEMENT FUND FOR ELECTRIC SYSTEM:
WHEREAS, under the authority of Chapter 111, Volume 52, Laws of Delaware, the City adopted a Resolution on July 26, 1965 (the "Resolution") pursuant to which the City has issued certain Revenue Bonds to finance and refinance improvements to the City's Electric System;
WHEREAS, under the Resolution the City has established an Improvement and Extension Fund (the "Improvement Fund") to which it is required by Section 507(c) of the Resolution to deposit certain funds to be available for the payment of certain maintenance, repairs, renewals, replacements, extensions, additions and other improvements to the Electric System;
WHEREAS, under Section 507(c) of the Resolution, the City is required, on a monthly basis, to deposit 25% of the net revenues of the Electric System (after providing for certain expenses and other fund balance requirements as described in Section 507 of the Resolution) either W to the Redemption Account created under the Resolution (to be used to purchase or redeem bonds issued under the Resolution) or (ii) to the Improvement Fund;
WHEREAS, there are currently outstanding certain bonds which have been issued under the Resolution the final maturity of which is February 15, 2008 (the "Outstanding Bonds1l) ;
WHEREAS, since the issuance of the Outstanding Bonds, the Council has always elected under Section 507(f) to deposit the 25% of net revenues as described therein to the Improvement Fund and it has never elected to deposit said funds in the Redemption Account;
WHEREAS, after considering the future capital needs of the Electric System for repairs, renewals, replacements, extensions, additions and other improvements to the Electric System, the Council has determined that it is desirable to continue funding the Improvement Fund at least to the extent of the 25% of net revenues as described in Section 507(f) of the Resolution at least until the final maturity of the Outstanding Bonds;
BE IT RESOLVED BY THIS COUNCIL OF THE CITY OF DOVER, DELAWARE:
Section 1. It shall be the policy of the City to fund the Improvement Fund for the Electric System as described in the Resolution at least to the extend of the 25% of net revenues described in Section 507(f) of the Resolution at least until the final maturity of the Outstanding Bonds and the City Treasurer is hereby directed to deposit said funds in the Improvement Fund on a monthly basis as described in Section 507 of the Resolution.
Section 2. This Resolution shall be effective immediately upon its passage and approval by the Mayor.
PASSED AND ADOPTED ON THIS 15TH DAY OF NOVEMBER, 1985.
Approved:
Mayor
Attest:
City Clerk
RESOLUTION - INTENT TO AMEND RESOLUTION OF JULY 26, 1965 PERTAINING TO ISSUANCE OF BONDS WITH RESPECT TO THE CITY'S ELECTRIC SYSTEM
Mr. Richter moved to dispense with the reading of the Resolution, seconded by Mr. Christiansen and unanimously carried.
By motion of Mr. Shevock, seconded by Mr. Richter, Council by unanimous roll call vote, (Mr. Bulley and Mr. Weyandt absent) adopted the following Resolution:
RESOLUTION OF INTENT TO AMEND RESOLUTION OF JULY 26, 1965 PERTAINING TO ISSUANCE OF BONDS WITH RESPECT TO THE CITY'S ELECTRIC SYSTEM:
WHEREAS, under the authority of Chapter 111, Volume 52, Laws of Delaware, the City adopted a Resolution on July 26, 1965, subsequently amended by resolution on January 8, 1973 (said resolution as so amended hereinafter called the "Resolution") providing for the City to issue its revenue bonds to finance or refinance improvements to its electric system;
WHEREAS, pursuant to the Resolution the City has issued and there remain outstanding certain of its Electric Revenue Refunding Bonds issued in 1965 and 1973 and certain of its Electric Revenue Bonds issued in 1973 (all hereafter referred to as the "Prior Bonds");
WHEREAS, the City anticipates the issuance of additional Electric Revenue Bonds ("Additional Bonds") to finance certain modifications and improvements to its electric system;
WHEREAS, in order to make these certain amendments to the Resolution, it is necessary to provide for the payment of, and to defease the Resolution with respect to the Prior Bonds;
WHEREAS, Section 515 of the Resolution provides for all funds held under the Resolution to be released to the City "(a)fter provision shall be made for the payment of all bonds secured hereby and the interest thereon and all expenses and charges herein required to be paid" but said Section 515 does not specify how such provision for payment must be made;
WHEREAS, Section 1001 of the Resolution permits the City, with the approval of the Trustee, upon 30 days' notice to each principal underwriter and registered bondholders but without the consent of any bondholders, to amend the Resolution by a supplemental resolution in such manner as "shall not be inconsistent with the terms and provisions of the Resolution and shall not adversely affect the interests of the bondholders," in order to, among other things, "cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution;"
WHEREAS, Sections 306 and 1112 of the Resolution contain defeasance provisions with respect to the optional redemptions described therein; to wit, when sufficient moneys or Government Obligations are deposited with the Trustee for the payment of the redemption price plus any accrued interest to the redemption date of such bonds, such bonds will no longer be considered outstanding and shall cease to be entitled to any benefit or security under the Resolution;
WHEREAS, the City has determined that the amendment to the Resolution set out as Exhibit A hereto is not inconsistent with the terms and provisions of the Resolution and will not adversely affect the interests of the bondholders;
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF DOVER, DELAWARE:
1. Council intends to adopt the Supplemental Resolution in substantially the form of Exhibit A hereto after 30 days notice thereof to each principal underwriter and to registered bondholders as provided in Section 1001 of the Resolution.
2. Council hereby requests Delaware Trust Company, Trustee, to give written notice of the proposed adoption of the Supplemental Resolution as provided in Section 1001 of the Resolution in substantially the form of Exhibit B hereto.
3. This resolution shall take effect upon its passage and approval by the Mayor.
PASSED AND ADOPTED ON THIS 15TH DAY OF NOVEMBER, 1986.
Approved:
Mayor
Attest:
City Clerk
EXHIBIT A - SUPPLEMENTAL RESOLUTION
WHEREAS, pursuant to a Bond Resolution adopted on July 26, 1965 as subsequently amended on January 8, 1973 (the "Resolution"), the City has issued and there remain outstanding certain of its Electric Revenue Refunding Bonds issued in 1965 and 1973 and certain of its Electric Revenue Bonds issued in 1973 (all hereinafter referred to as the "Prior Bonds");
WHEREAS, the City anticipates the issuance of additional Electric Revenue Bonds ("Additional Bonds") to finance certain modifications and improvements to its Electric System;
WHEREAS, the City desires to amend certain provisions of the Resolution to facilitate the issuance of, improve the marketability of and reduce the debt service and funding requirements associated with, Additional Bonds;
WHEREAS, in order to make these certain amendments to the Resolution, it is necessary to provide for the payment of, and to defease the Resolution with respect to the Prior Bonds;
WHEREAS, Section 515 of the Resolution provides for all funds held under the Indenture to be released to the City "Wfter provision shall be made for the payment of all bonds secured hereby and the interest thereon and all expenses and charges herein required to be paid" but said Section 515 does not specify how such provision for payment must be made;
WHEREAS, Section 1001 of the Resolution permits the City, with the approval of the Trustee, upon 30 days' notice to each principal underwriter and registered bondholders but without the consent of any bondholders, to amend the Resolution by a supplemental resolution in such manner as "shall not be inconsistent with the terms and provisions of the Resolution and shall not adversely affect the interests of the bondholders," in order to, among other things, "cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution;"
WHEREAS, Sections 306 and 1112 of the Resolution contain defeasance provisions with respect to the optional redemptions described therein; to wit, when sufficient moneys or Government Obligations are deposited with the Trustee for the payment of the redemption price plus any accrued interest to the redemption date of such bonds, such bonds will no longer be considered outstanding and shall cease to be entitled to any benefit or security under the Resolution;
WHEREAS, the City has determined that the amendment to the Resolution hereinafter set out is not inconsistent with the terms and provisions of the Resolution and will not adversely affect the interests of the bondholders and the City has requested that the Trustee approve such amendment and enter into this Supplemental Resolution;
WHEREAS, Council on November 15, 1985 resolved its intent to adopt the amendment hereinafter set out and the Trustee has given 30 days' notice thereof as provided in Section 1001 of the Resolution.
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF DOVER, DELAWARE:
1. Section 515 of the Resolution is hereby amended in its entirety to read as follows:
"Section 515. In the event that the City shall deposit with the Trustee moneys or Government Obligations in such amounts, bearing interest at such rates and maturing (without option of prior payment) at such dates that the proceeds thereof and the earnings thereon will be sufficient for the payment of the redemption price of bonds for which the City has given the Trustee irrevocable instructions to call for redemption and the payment of the principal amount of bonds to be paid at maturity together with the interest coming due on all such bonds to such redemption or maturity date, such bonds shall not thereafter be deemed to be outstanding under this Resolution and shall cease to be entitled to any benefit or security under this Resolution other than the right to receive payment from such moneys or Government Obligations. Any such funds shall be held in trust by the Trustee for such bondholders. After provisions shall be made as thereon and all expenses and charges herein required to be paid, the Trustee shall pay any balance in the Interest and Sinking Fund and any balance in any other fund then held by it to the City."
Section 2. The City hereby requests the Trustee to approve this Supplemental Resolution and in consideration therefor hereby agrees to hold the Trustee harmless and indemnify it against any loss or expense incurred in connection with or resulting from carrying out this request of the City and approving this Supplemental Resolution.
Section 3. This resolution shall take effect upon its passage and approval by the Mayor subject to approval by the Trustee.
PASSED AND ADOPTED ON THIS 15TH DAY OF NOVEMBER, 1985.
Approved:
Mayor
Attest:
City Clerk
The foregoing resolution is hereby approved by Delaware Trust Company as Trustee under the Resolution.
Delaware Trust Company as Trustee
under the Resolution
By
Title
EXHIBIT B - NOTICE TO REGISTERED BONDHOLDERS AND PRINCIPAL UNDERWRITER
Re:The City of Dover, Delaware
$10,245,000 Electric Revenue Refunding Bonds (Series 1965)
$13,995,000 Electric Revenue Refunding Bonds (Series 1973)
$10,000,000 Electric Revenue Bonds (Series 1973)
Notice is hereby given that the City of Dover has resolved its intent to amend its Resolution of July 26, 1965, as amended January 8, 1973, (the "Resolution") which provided for the issuance of the above referenced bonds.
Section 515 of the Resolution provides for all funds held under the Resolution by the Trustee to be released to the City "(a)fter provision shall be made for the payment of all bonds secured hereby and the interest thereon and all expenses and charges herein required to be paid." The City proposes to amend Section 515 to require the City to deposit with the Trustee monies or direct obligations of the United States Treasury which together with the earnings thereon will be sufficient to pay all principal and interest on the bonds when due either at maturity or upon earlier redemption of Section 515. The proposed amendment also provides that, upon the deposit of such monies or obligations, the bonds covered thereby will thereafter no longer be considered outstanding under the Resolution, they will no longer be entitled to the benefit of the lien of the Indenture and they will thereafter look only to such deposited monies and obligations for payment thereon.
The proposed amendment will be made in accordance with Section 1001 of the Resolution which permits amendments, with the approval of the Trustee, upon 30 days' notice to each principal underwriter (as defined in the Resolution) -and to registered bondholders but without the consent of any bondholders, which "shall not be inconsistent with the terms and provisions of the Resolution and shall not adversely affect the interests of the bondholders" in order to, among other things, "cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution."
The Trustee has received the advice of the City's Financial Advisor, Government Finance Associates, Inc., that the proposed amendment will not adversely affect the interests of bondholders and it has received the opinion of the City's Bond Counsel, Potter Anderson & Corroon, that the proposed amendment will not be inconsistent with the terms and provisions of the Resolution and is otherwise permitted under Section 1001 as aforesaid.
The proposed amendment provides that the City will agree to hold the Trustee harmless and indemnify it against any loss or expense incurred in connection with or resulting from entering into the amendment.
The Trustee intends to approve the proposed amendment after the 30 day notice period has elapsed. Any bondholder wishing to comment on the Trustee's proposed action must contact the Trustee prior to December 18, 1985.
Copies of the proposed amendment to the Resolution are available at the principal corporate trust office at the Trustee, 9th and Market Streets, Wilmington, Delaware, Attention: Richard N. Smith (302-421-7339).
DELAWARE TRUST COMPANY
TRUSTEE
Dated: November 18, 1985
RESOLUTION - AUTHORIZING THE ISSUANCE OF UP TO $16,000,000 - ELECTRIC REVENUE REFUNDING BONDS (SERIES 1985) OF THE CITY OF DOVER, DELAWARE PURSUANT TO THE PROVISIONS OF 52 DELAWARE LAWS CHAPTER 111
Mr. Boaman moved to dispense with the reading of the resolution, seconded by Mr. Witt and unanimously carried.
By motion of Mr. Shevock, seconded by Mr. Witt, Council unanimously adopted the following Resolution, with Mr. Bulley and Mr. Weyandt absent:
RESOLUTION AUTHORIZING THE ISSUANCE OF UP TO $16,000,000 ELECTRIC REVENUE REFUNDING BONDS (SERIES 1985) OF THE CITY OF DOVER, DELAWARE PURSUANT TO THE PROVISIONS OF 52 DELAWARE LAWS CHAPTER 111.
WHEREAS, under the authority of Chapter 111, Volume 52, Laws of Delaware, as amended by Chapter 340, Volume 57, Laws of Delaware, (hereinafter collectively called the "Enabling Act"), the Council of the City of Dover (the "Council") duly adopted on July 26, 1965 a resolution, as amended by a resolution adopted on January 8, 1973, (said resolution as so amended being hereinafter called the "Resolution") pursuant to which Resolution the City duly issued Electric Revenue Refunding Bonds (the "Series 1965 Bonds") in the aggregate principal amount of $10,245,000, dated August 15, 1965, stated to mature in annual installments, on February 15 in the years 1966 to 1988, inclusive, for the purpose of providing funds for refunding certain outstanding indebtedness of the City payable from revenues of the then existing electric system, and $1,255,000 of said bonds are now outstanding and unpaid; and
WHEREAS, pursuant to the Resolution, the City duly issued Electric Revenue Refunding Bonds and Electric Revenue Bonds (collectively, the "Series 1973 Bonds") in the aggregate principal amount of $23,995,000, dated February 15, 1973, stated to mature in annual installments on February 15 in the years 1974 to 2008, inclusive, for the purpose of providing funds for refunding certain outstanding indebtedness of the City with respect to its electric system as well as to provide funds for certain additional improvements to the electric system and $19,110,000 of said bonds are now outstanding and unpaid;
WHEREAS, the City desires to issue its Electric Revenue Refunding Bonds in an aggregate principal amount up to $16,000,000 for the purpose of advance refunding the Series 1965 Bonds and the Series 1973 Bonds and to reduce the total annual debt service payable with respect to indebtedness secured by the revenues of the electric system.
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF DOVER, DELAWARE;
Section 1. For the purpose of providing funds for advance refunding the outstanding Series 1965 Bonds and the outstanding Series 1973 Bonds together with the interest to accrue on said bonds to the date of maturity or earlier redemption thereof including any premium thereon there shall be issued under the authority of the Enabling Act, bonds of the City (the "Series 1985 Refunding Bonds") in the aggregate principal amount up to Sixteen Million Dollars ($16,000,000) which shall be secured solely by a pledge of the revenues of the electric system. The Series 1985 Refunding Bonds shall not be secured by a pledge of the full faith and credit of the City.
Section 2. The bonds authorized by this resolution shall bear such designation, such date, shall be in such denominations, shall bear interest, shall mature and shall be in such total principal amount as Council shall determine by a subsequent resolution.
Section 3. The bonds shall be sold in a negotiated transaction with such underwriter or underwriters and upon such terms as Council shall determine by subsequent resolutions.
Section 4. In connection with the Series 1985 Refunding Bonds, Delaware Trust Company is hereby appointed to serve as Trustee and Potter Anderson & Corroon is hereby appointed as Bond Counsel.
Section 5. The City Clerk shall forthwith cause to be published once, in a newspaper published in the City, a notice in substantially the following form:
"NOTICE
NOTICE IS HEREBY GIVEN THAT A RESOLUTION ENTITLED AS FOLLOWS:
A RESOLUTION AUTHORIZING THE ISSUANCE OF UP TO $16,000,000 ELECTRIC REVENUE REFUNDING BONDS (SERIES 1985) OF THE CITY OF DOVER, DELAWARE PURSUANT TO THE PROVISIONS OF 52 DELAWARE LAWS CHAPTER 11
was duly adopted by the City Council of The City of Dover, Delaware, on November 15, 1985. The purpose of the issuance of said bonds is to provide funds for refunding the Electric Revenue Refunding Bonds (Series 1965), the Electric Revenue Refunding Bonds (Series 1973) and the Electric Revenue Bonds (Series 1973) issued to refund certain outstanding indebtedness of the City with respect to its electric system and to provide funds for certain improvements to its electric system.
Any action or proceeding to contest the validity of said resolution or any of its provisions must be commenced within thirty (30) days after the publication of this notice. After the expiration of such period of limitation, no right of action or defense founded upon the invalidity of said resolution or any of its provisions shall be asserted, nor shall the validity of said resolution or any of its provisions be open to question in any court upon any ground whatever, except in an action or proceeding commenced within such period.
By order of the City Council of The City of Dover, Delaware.
City Clerk
Section 6. This resolution shall take effect immediately upon its passage and approval by the Mayor.
PASSED AND ADOPTED ON TRIS 15TH DAY OF NOVEMBER, 1985.
Approved:
Mayor
Attest:
City Clerk
UNDERWRITERS - 1985 SERIES REFUNDING BONDS
Mr. Shevock noted that during the meeting of the Legislative and Finance Committee executive session on November 12, 1985, the committee recommended that Merrill Lynch be appointed as underwriter for the Electric Refunding Bonds.
Mr. Shevock moved for the recommendation of the committee. The motion failed for lack of a second.
Mr. Boaman moved that the 1985 Series Electric Revenue Refunding Bonds incorporate dual senior managers, those being Drexel Burnham & Lambert and Merrill Lynch, with Merrill Lynch running the books. The motion was seconded by Mr. Christiansen.
By a unanimous roll call vote, (Mr. Bulley and Mr. Weyandt absent) the motion for the appointment of the underwriters was carried.
Meeting Adjourned at 7:15 P.M.
WILLIAM H. WILLIS
CITY CLERK
All orders, ordinances and resolutions adopted by City Council during their meeting of November 15, 1985, are hereby approved.
CRAWFORD J. CARROLL
MAYOR
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