“A GOVERNMENT BIG ENOUGH TO GIVE YOU EVERYTHING YOU WANT, IS BIG ENOUGH TO TAKE AWAY EVERYTHING YOU HAVE”
I want especially to draw your attention to certain items in Resolution 2021-10 so I have highlighted portions of the document along with definitions and my comments:
SECTION 1 – RECITALS, AUTHORIZATION AND SALES
1.01- Recitals and Authorization:
1.01 (e) – this Council hereby determines that it is in the best interests of the City to authorize the issuance and sale of its Sale Tax Revenue and Refunding Bonds, in one or more series (the “Series 2021 Bonds” together with the Series 2018 Bonds and any additional parity lien bonds authorized hereunder, the “Bonds”), in a principal amount not to exceed the sum of $640,000.00 for the purpose of (i) refunding the Series 2011 Bonds. (ii) funding costs of capital improvements as authorized by the Ordinance, including construction of a community center (the “Projects”), and (iii) paying the costs of issuances of the Series 2021 Bonds, including an underwriter’s discount not exceeding 2.00% of the principal amount of any series of the series 2021 Bonds, original issue discount not to exceed 2% of the principal amount of any series of the Series 2021 Bonds) and bond insurance premium, if any. The Series 2021 Bonds are issued on a parity (essentially using the same standards) with the Series 2018 Bonds.
1.03 – City Officers Authorized to Execute Documents. “The Mayor and Finance Officer are hereby authorized and directed to execute and deliver a Bond Purchase Agreement and the documents require thereunder (archaic expression meaning in agreement of the thing mentioned), the Official Statement, the Series 2021 Bonds and any other documents required to complete the financing contemplated hereby. Execution and delivery of such documents by the Mayor and Finance Officer shall constitute (give legal form) to evidence that such items are consistent with the terms of this Resolution and have been duly authorized, executed and delivered by the City and are enforceable against the City in accordance with their terms, subject to customary exceptions relating to bankruptcy, reorganization, insolvency and other laws affected creditors’ rights. The Mayor and Finance Officer are further authorized to take such other actions as may be required to effectuate (put into force) the terms and intent of this Resolution. In the event of the absence or disability of the Mayor or Finance Officer, the acting Mayor or the acting Finance Officer is hereby authorized to act in the place and stead of the Mayor or Finance Officer, respectively, and to tall all actions and execute all documents approved hereby (as a result of this document).”
1.04 – Official Statement. “If determined (who is determining?) necessary, the Mayor and Finance Officer are authorized, in cooperation with AMKO, to prepare one or more Official Statements to be distributed to prospective purchasers of the Series 2021 Bonds. The Mayor and the Finance Officer are hereby authorized and directed to approve, and , if requested, to execute a final Official Statement.”
SECTION 2 – BOND TERMS, EXECUTION AND DELIVERY
2.01 Execution, Authentication and Delivery. “The Series 2021 Bonds shall be prepared under the direction of the Finance Officer (in my opinion our FO cannot direct a garage band let alone competently prepare a legal ‘promise’ to pay a lender their principal and interest) and shall be executed and authenticated on behalf of the City by the signatures of the Mayor and the Finance Officer and countersigned by an attorney resident and licensed to practice in the State of South Dakota…”
2.04 – Redemption ” The Series 2021 Bonds may be subject to redemption prior to maturity, at the option of the City, in the years and at the redemption prices set for in an exhibit to a Bond Purchase Agreement…“ (Call Date – a credit enhancement feature which makes the Bond more attractive to the Bond purchaser such as a higher interest pay rate during the time when the outstanding amounts are at their highest. Call-able loans generally pay a higher interest rate than non-callable loans ie. the city will most likely pay a higher rate of interest for a call-dated Bond loan than a non-call dated Bond )
2.05 – Appointment of Initial Registrar “The City hereby appoints the City Finance Officer as bond registrar (city employee who maintains the Issuers list of the names, addresses, and other identifying information of Owners of Bonds 2021 Series), transfer agent (she will make sure the investors receive their dividends on time yeah ya really trust that one?), and paying agent (Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 that has been authorized by the Issuer to make payments to and distributions from the Collection Account, including payment of principal of or interest on behalf of the Issuer. ( the “Registrar”)”
2.06 – Registration “The effect of registration and the rights and duties of the City and the Registrar with respect thereto (to this or that) shall be as follows:
2.06(a) – The Registrar shall keep at its principal office a bond register in which the Registrar shall provide for the registration of ownership of Series 2021 Bonds and the registration of transfers and exchanges of Series 2021 Bonds entitled to be registered, transferred or exchanged. (Really? FOPat has trouble getting payroll out in a timely manner and you want to trust her to handle this?)
Folks these examples are all within the first four pages of the document titled “RESOLUTION NO. 2021-10”. The Resolution 2021-10 document has 12-14 pages depending how you count. I embedded the text of the Resolution 2021-10 document in the 07/26/2021 A Voice From the Gallery or you should be able to get a copy of the document from the city office (free) as well as the document must be published in the newspaper and on the Alcester City website.
One interesting item, City Attorney Sam Nelson was not at this meeting to advise the council members face-to-face before they voted. The council just had to take the word and expertise of the Mayor as they relate to the legal language of this document. In fact Mr. DeRaney made the statements with regard to his explanation of the Resolution 2021-10 Document, its language and its specifications (0:10:58.33)* and (0:11:02.10)* that “attorneys wrote the document and that he was not an attorney“ and we all know Mayor Haeder and Bookkeeper Jurrens are most assuredly not attorneys.
While I realize Resolution is not an easy read, I ask the Council members to please re-read the document, I ask the citizens of Alcester to please, please read the Resolution 2021-10 document and if you do not totally and completely understand and agree with what this document is allowing the Finance Officer and Mayor to do please take steps to stop it!
* These time stops can be found in the video published within the 07/26/2021 A Voice From the Gallery publication.
Interesting read, “Anatomy of a Bond issue: The Participants and the Steps” Donna Kreiser and David Unkovic public finance lawyers with McNees Wallace & Nurick, LLC., This article was published in the Winter 2014 edition of the Municipal Law Section Newsletter of the Pennsylvania Bar Association, March 12, 2014
Contact City Council
Mayor Dan Haeder 605-934-2287 605-770-7929
Councilman David Larsen 605-934-2434
Councilwoman Darla Reppe 605-934-2602
Councilwoman Linda Talbot 605-254-3074
Councilwoman Cyndi Peeples
Councilman Brian Johnson 605-214-0282
Councilman Curtis Keiser 605-214-7604
Patricia Jurrens 605-934-2517