To: Martin L. Cousineau, Finance Committee Chairperson
From: John F. O’Brien Deputy Drain Commissioner
title
RE: Kearsley Creek Interceptor Project
recommendation
BOARD ACTION REQUESTED:
To approve Financing Contract and approve Issuance of Bonds.
BACKGROUND:
Local municipality are joining together to finance and construct the Kearsley Creek Interceptor. County Agency is supporting the project.
DISCUSSION:
Find enclosed a resolution approving the KCI financing Contract and Authorization of Issuance of Genesee County Sewage Disposal Bonds. The Kearsley Creek Interceptor project is a multiple-entity project to provide sanitary sewer service to the southeast portion of Genesee County and future service to northeast Oakland County. The contracting parties are Grand Blanc Township at 55.32%, Davison Township at 36.83% Atlas Township at 5.73%, and Village of Goodrich at 2.12%. Each community has executed the financing contract and pledged Limited tax General Obligations (LTGO) pledge to secure their debt obligations to the County. The local community bond is up to 36,400,000 million dollars with a 30-year payback period. The Financing Contract and Bond Resolution were prepared by County Agency Board Counsel Miller Canfield and reviewed by our financial advisor’s PFM. We are requesting this Bond Resolution and financing contract to be presented to the finance committee on June 5, 2024. Should you have any questions or need further comment do not hesitate to contact this office.
IMPACT ON HUMAN RESOURCES:
NONE
IMPACT ON BUDGET:
NONE
IMPACT ON FACILITIES:
NONE
IMPACT ON TECHNOLOGY:
NONE
CONFORMITY TO COUNTY PRIORITIES:
County Agency is supporting a regional plan to provide sanitary sewer to south east portion of the County.
resolution
TO THE HONORABLE CHAIRPERSON AND MEMBERS OF THE GENESEE COUNTY BOARD OF COMMISSIONERS, GENESEE COUNTY, MICHIGAN
LADIES AND GENTLEMEN:
RES-2024-_____
TO THE HONORABLE CHAIRPERSON AND MEMBERS OF THE GENESEE COUNTY BOARD OF COMMISSIONERS, GENESEE COUNTY, MICHIGAN
LADIES AND GENTLEMEN:
At a regular meeting of the Board of Commissioners of the County of Genesee, Michigan, held on _____________, 2024.
PRESENT:
absent:
The following Resolution was offered by and supported by __________:
RESOLUTION APPROVING FINANCING CONTRACT
AND AUTHORIZING ISSUANCE OF
GENESEE COUNTY SEWAGE DIsPOSAL SYSTEM bonds
(KEARSLEY CREEK INTERCEPTOR PROJECT),
SERIES 2024 (Limited tax general obligation)
WHEREAS, the County of Genesee (the “County”) has authorized and directed the establishment of systems of sewer and sewage disposal improvements and services known as the Genesee County Sewage Disposal System (Interceptors and Treatment Facilities) (the “System”) to provide sewers and sewage disposal improvements and services to certain municipalities in the County; and
WHEREAS, pursuant to Act 342, Public Acts of Michigan, 1939, as amended (“Act 342”), the Board of Commissioners of the County has designated the Genesee County Drain Commissioner as the county agency of the County (the “County Agency”) under the provisions of Act 342 in connection with the establishment of the System and as the person to have supervision and control of the management and operation of the System; and
WHEREAS, the County, by and through the County Agency, and the Charter Township of Grand Blanc, the Township of Davison, the Village of Goodrich and the Township of Atlas (the Charter Township of Grand Blanc, the Township of Davison, the Village of Goodrich and the Township of Atlas, each a “Local Unit,” and collectively, the “Local Units”), have determined that it is necessary to acquire and construct certain extensions to the System to serve the Local Units to be known as “Genesee County - Kearsley Creek Interceptor Phase I” (the “Phase I Project”); and
WHEREAS, the County, by and through the County Agency, and the Charter Township of Grand Blanc, have determined that it is necessary to acquire and construct sanitary sewers to serve the Charter Township of Grand Blanch to be known as “Kearsley Creek Interceptor - Phase II” (the “Phase II Project”); and
WHEREAS, the County, by and through the County Agency, and the Township of Davison, have determined that it is necessary to acquire and construct sanitary sewers to serve the Township of Davison to be known as “Kearsley Creek Interceptor - Phase III” (the “Phase III Project”); and
WHEREAS, the Local Units desire to have the County acquire and construct the Phase I Project, the Phase II Project, and the Phase III Project (collectively, the “Projects”), and the Local Units have requested that the County undertake the acquisition, construction and financing of the Projects under and in accordance with the provisions of Act 342; and
WHEREAS, there has been prepared a Financing Contract, dated as of March 1, 2024 (the “Financing Contract”), by and among the County, acting through the County Agency, and the Local Units; and
WHEREAS, the Financing Contract provides, among other things, for the financing of the Local Units’ share of the cost of the Projects by the issuance of bonds of the County in accordance with the provisions of Act 342; and
WHEREAS, under the provisions of the Financing Contract, each Local Unit has obligated itself to pay its proportionate share of the total costs of the Projects to be financed by the issuance of bonds of the County by paying the principal installments plus interest thereon, as specified in the Financing Contract, and has further obligated itself to levy taxes annually to the extent necessary for the purpose of meeting said installments plus interest thereon, subject, however, to applicable constitutional, statutory and charter tax rate limitations, all as provided in the Financing Contract; and
WHEREAS, the County now proposes to issue its bonds, as authorized by Section 5c of Act 342, in anticipation of and secured primarily by the contractual obligations of each of the Local Units to provide the necessary funds to pay the cost of acquiring, constructing and financing the Local Units’ share of the total costs of the Projects; and
WHEREAS, the Projects qualify for the State of Michigan Clean Water State Revolving Fund financing program being administered by the Michigan Department of Environment, Great Lakes, and Energy (“EGLE”) and the Michigan Finance Authority (“MFA”); and
WHEREAS, pursuant to the authority granted by Act 342, the County desires to issue and sell the necessary bonds to the MFA to pay the Local Units’ share of the total costs of the Projects as provided in the Financing Contract.
THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COUNTY OF GENESEE, MICHIGAN, AS FOLLOWS:
Section 1. Definitions. Capitalized terms used in this resolution and defined in the recitals to this resolution have the meanings assigned to such terms in the recitals. In addition to the terms defined elsewhere in this resolution (including in the recitals to this resolution), the following capitalized terms as used in this resolution have the following meanings.
(a) “Act 34” means Act 34, Public Acts of Michigan, 2001, as amended.
(b) “Authorized Officer” means each of the County Agency and the Chief Financial Officer of the County.
(c) “Bonds” means the bonds of the County described herein and, specifically, in Section 5 hereof.
(d) “Code” means the Internal Revenue Code of 1986, as amended, and the rulings and regulations (including temporary and proposed) promulgated thereunder.
(e) “Contractual Payments” means the debt service installment payments required to be made by each of the Local Units to the County pursuant to the provisions of Section 14 of the Financing Contract and pledged to the payment of the principal of and interest on the Bonds authorized by the provisions of this resolution.
(f) “Transfer Agent” means the person or entity appointed from time to time to act as paying agent, registrar and transfer agent for the Bonds as provided in Section 6 of this resolution.
Section 2. Approval of Projects; Execution of Financing Contract. The plans, specifications and estimates of cost for the Projects secured by the County Agency are hereby accepted and approved. It is hereby determined to be advisable and necessary for the public health of the County that the Projects be acquired and constructed, under the supervision of the County Agency, under the provisions of Act 342 and as provided in said plans and specifications.
The Financing Contract is hereby approved and confirmed in substantially the form attached hereto as Exhibit A, subject to such completions, additions and revisions as shall be necessary to conform the Financing Contract to the final terms and specifications of the Bonds authorized herein and approved by the County Agency. The County Agency is hereby authorized and directed to execute and deliver the Financing Contract for and on behalf the County when it is in final form.
Section 3. Estimated Cost; Useful Life of Project. The total estimated cost of the Local Units’ share of the Phase I Project (excluding financing costs) in the amount of $17,860,000 is hereby approved and confirmed. The total estimated cost of the Phase II Project, to be charged to and paid for by the Charter Township of Grand Blanc, in the amount (excluding financing costs) of $3,429,450, is hereby approved and confirmed. The total estimated cost of the Phase III Project, to be charged to and paid for by the Township of Davison, in the amount (excluding financing costs) of $8,962,786, is hereby approved and confirmed. The estimated period of usefulness of the Projects is determined to be not less than forty (40) years.
Section 4. Authorization of Bonds. For the purpose of defraying the Local Units’ share of the total costs of the Projects, including payment of engineering, legal and financing expenses, and other expenses incident thereto and incident to the issuance of the Bonds, the County shall borrow the sum of not to exceed Thirty-Six Million Four Hundred Thousand Dollars ($36,400,000) and issue the Bonds therefor pursuant to the provisions of Act 342.
Section 5. Details of Bonds. The Bonds of the County, to be designated “SEWAGE DISPOSAL SYSTEM BONDS (KEARSLEY CREEK INTERCEPTOR PROJECT), SERIES 2024 (LIMITED TAX GENERAL OBLIGATION),” are authorized to be issued in the aggregate principal amount of not to exceed Thirty-Six Million Four Hundred Thousand Dollars ($36,400,000). The principal of and interest on the Bonds shall be payable primarily out of the Contractual Payments required to be paid by the Local Units pursuant to the Financing Contract.
The Bonds shall be in the form of a single, fully-registered, nonconvertible bond of the denomination of the full principal amount thereof, dated as of the date of delivery thereof, payable serially in principal installments as finally determined by order of EGLE at the time of sale of the Bonds and approved by the MFA and an Authorized Officer. Final determination of the principal amount of the Bonds, the payment dates and amounts of principal installments of the Bonds and the dates for payment of interest on the Bonds shall be evidenced by execution of a Purchase Contract to be entered into between the County and the MFA providing for the purchase by the MFA of the Bonds (the “Purchase Contract”), and each Authorized Officer is hereby individually authorized and directed to execute and deliver the Purchase Contract when it is in final form and to make the determinations set forth above; provided, however, that the final principal installment of the Bonds shall be due not later than forty (40) years from the date of issuance of the Bonds.
The Bonds shall bear interest at an interest rate per annum on the par value thereof as determined by the MFA and evidenced by execution of the Purchase Contract, but in any event not to exceed three percent (3.00%) per annum.
The principal amount of the Bonds is expected to be drawn down by the County periodically, and interest on the principal amount shall accrue from the date such principal amount is drawn down by the County.
The Bonds shall not be convertible or exchangeable into more than one fully-registered bond. Principal of and interest on the Bonds shall be payable as provided in the form of the Bond set forth in Section 10 of this resolution.
The Bonds or principal installments thereof shall be subject to redemption prior to maturity at the option of the County only with the prior written consent of the MFA and on such terms as may be required by the MFA.
The County Treasurer, Chief Financial Officer or County Agency shall record on the registration books payment by the County of each installment of principal or interest or both when made and the cancelled checks or other records evidencing such payments shall be returned to and retained by the County Treasurer, Chief Financial Officer or County Agency.
The Bonds shall be executed in the name of the County with the manual or facsimile signatures of the Chairperson of the Board of Commissioners and the County Clerk and shall have the seal of the County or a facsimile thereof impressed or printed thereon. Bonds bearing the manual or facsimile signature of the Chairperson of the Board of Commissioners and the County Clerk shall require no further authentication. The County Treasurer, Chief Financial Officer or County Agency shall deliver the Bonds in accordance with the delivery instructions of the MFA.
Upon payment by the County of all outstanding principal of and interest on the Bonds, the MFA shall deliver the Bonds to the County for cancellation.
Section 6. Transfer Agent; Registration and Transfer. The County Treasurer is hereby appointed to act as Transfer Agent with respect to the Bonds; provided, however, that the County Treasurer may designate in writing another person to act as Transfer Agent. If and at such time as the Bonds are transferred to or held by any registered owner other than the MFA, the County Treasurer may appoint a bank or trust company qualified under Michigan law to act as Transfer Agent for the Bonds.
The Bonds may be transferred upon the books required to be kept pursuant to this Section by the person in whose name it is registered, in person or by the registered owner’s duly authorized attorney, upon surrender of the Bonds for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Transfer Agent. Whenever the Bonds shall be surrendered for transfer, the County shall execute and the Transfer Agent shall authenticate and deliver a new Bond, for like aggregate principal amount. The Transfer Agent shall require payment by the bondholder requesting the transfer of any tax or other governmental charge required to be paid with respect to the transfer.
The Transfer Agent shall keep or cause to be kept, at its principal office, sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the County; and, upon presentation for such purpose, the Transfer Agent shall, under such reasonable regulations as it may prescribe, transfer or cause to be transferred, on said books, the Bonds as hereinbefore provided.
If the Bonds shall become mutilated, the County, at the expense of the holder, shall execute, and the Transfer Agent shall authenticate and deliver, a new Bond of like tenor in exchange and substitution for the mutilated Bond, upon surrender to the Transfer Agent of the mutilated Bond. If the Bonds shall be lost, destroyed or stolen, evidence of the ownership of the Bonds and of the loss, destruction or theft may be submitted to the Transfer Agent and, if this evidence is satisfactory to the County and the Transfer Agent and indemnity satisfactory to the County and the Transfer Agent shall be given, and if all requirements of any applicable law, including Act 354, Public Acts of Michigan, 1972, as amended (“Act 354”), have been met, the County, at the expense of the registered owner, shall execute, and the Transfer Agent shall thereupon authenticate and deliver, a new Bond of like tenor and bearing the statement required by Act 354, or any applicable law hereafter enacted, in lieu of and in substitution for the Bonds so lost, destroyed or stolen. If the Bonds shall have matured or shall be about to mature, instead of issuing a substitute Bond, the Transfer Agent may pay the same without surrender thereof.
Section 7. Source of Payment; Pledge of Contractual Payments. The Bonds and the interest thereon shall be payable primarily from the Contractual Payments received by the County pursuant to the Financing Contract, for the payment of which each Local Unit has, in the Financing Contract, pledged its limited tax full faith and credit pursuant to the provisions of Act 342, in the amounts set forth in the Financing Contract. Under the Financing Contract, each Local Unit has covenanted and agreed to provide annually general or special funds in amounts sufficient to meet when due its Contractual Payments in anticipation of which the Bonds are issued, or, if necessary, to levy ad valorem taxes on all taxable property within its boundaries for such purpose, subject to applicable constitutional, statutory and charter tax rate limitations. All of such Contractual Payments are hereby pledged solely and only for the payment of principal of and interest on the Bonds.
Section 8. Limited Tax Full Faith and Credit Pledge of County. As additional security for the payment of the principal of and interest on the Bonds, the County, pursuant to the provisions of Section 5c of Act 342, hereby irrevocably pledges its full faith and credit for the prompt payment of the principal of and interest on the Bonds. If for any reason there are not sufficient funds on hand from the Contractual Payments to pay the principal of and interest on the Bonds when due, the County Treasurer shall promptly advance the amount of such deficiency out of general funds of the County and promptly deposit the amount of any and all such advances to the Debt Retirement Fund (as hereinafter defined). If it becomes necessary for the County to so advance any such moneys, it shall be entitled to reimbursement from any surplus from time to time existing in the Debt Retirement Fund for the Bonds, or from any other legally available source. The County recognizes and covenants that its full faith and credit pledge hereunder is a first budget obligation, and, to the extent necessary to provide funds to meet such pledge as herein provided, it is obligated to levy ad valorem taxes against the taxable property in the County, which taxes, however, shall be subject to applicable constitutional and statutory tax rate limitations.
Section 9. Establishment of Debt Retirement Fund. The County Treasurer, Chief Financial Officer or County Agency shall, after the adoption of this resolution, open a special depository account with a depository bank or trust company to be designated “DEBT RETIREMENT FUND - SEWAGE DISPOSAL SYSTEM BONDS (KEARSLEY CREEK INTERCEPTOR PROJECT), SERIES 2024” (the “Debt Retirement Fund”), into which account the County shall deposit all Contractual Payments, as received from the Local Units, and any advances made by the County pursuant to Section 8 of the resolution. The moneys from time to time on hand in the Debt Retirement Fund shall be used solely and only for the payment of the principal of and interest on the Bonds, or, to the extent of any surplus, to reimburse the County for any advances made pursuant to Section 8 hereof.
Section 10. Bond Form. The Bonds shall be in substantially the following form, with such changes or completions as are necessary or appropriate to give effect to the intent of this resolution and as may be required by the MFA and approved by bond counsel to the County:
UNITED STATES OF AMERICA
STATE OF MICHIGAN
COUNTY OF GENESEE
SEWAGE DISPOSAL SYSTEM BOND
(KEARSLEY CREEK INTERCEPTOR PROJECT), SERIES 2024
(LIMITED TAX GENERAL OBLIGATION)
REGISTERED OWNER: Michigan Finance Authority
PRINCIPAL AMOUNT:
DATE OF ORIGINAL ISSUE:
The County of Genesee, State of Michigan (the “Issuer”), acknowledges itself to owe and for value received hereby promises to pay, but solely from the sources hereinafter provided, to the Michigan Finance Authority (the “Authority”), or registered assigns, the Principal Amount shown above, or such portion thereof as shall have been advanced to the Issuer pursuant to a Purchase Contract between the Issuer and the Authority and a Supplemental Agreement by and among the Issuer, the Authority and the State of Michigan acting through the Department of Environment, Great Lakes, and Energy, in lawful money of the United States of America, unless prepaid or reduced prior thereto as hereinafter provided.
During the time the Principal Amount is being drawn down by the Issuer under this Bond, the Authority will periodically provide to the Issuer a statement showing the amount of principal that has been advanced and the date of each advance, which statement shall constitute prima facie evidence of the reported information; provided that no failure on the part of the Authority to provide such a statement or to reflect a disbursement or the correct amount of a disbursement shall relieve the Issuer of its obligation to repay the outstanding Principal Amount actually advanced, all accrued interest thereon, and any other amount payable with respect thereto in accordance with the terms of this Bond.
The Principal Amount shall be payable on the dates and in the annual principal installment amounts set forth in Schedule A attached hereto and made a part hereof, as such Schedule A may be adjusted if less than $_________ is disbursed to the Issuer or if a portion of the Principal Amount is prepaid as provided below, with interest on said principal installments from the date each said installment is delivered to the holder hereof until paid at the rate of ______ percent (_____%) per annum. Interest is first payable on _______ 1, 20____, and semiannually thereafter, and principal is payable on the first day of _____, commencing ______ 1, _____ (as identified in the Purchase Contract) and annually thereafter.
Principal installments of this Bond are subject to redemption prior to maturity at the option of the Issuer only with the prior written consent of the Authority and on such terms as may be required by the Authority.
Notwithstanding any other provision of this Bond, as long as the Authority is the owner of this Bond, (a) this Bond is payable as to principal, premium, if any, and interest at the designated office of U.S. Bank Trust Company, National Association, or at such other place as shall be designated in writing to the Issuer by the Authority (the “Authority’s Depository”); (b) the Issuer agrees that it will deposit with the Authority’s Depository payments of the principal of, premium, if any, and interest on this Bond in immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is due whether by maturity, redemption or otherwise; in the event that the Authority’s Depository has not received the Issuer’s deposit by 12:00 noon on the scheduled day, the Issuer shall immediately pay to the Authority as invoiced by the Authority an amount to recover the Authority’s administrative costs and lost investment earnings attributable to that late payment; and (c) written notice of any redemption of this Bond shall be given by the Issuer and received by the Authority’s Depository at least 40 days prior to the date on which such redemption is to be made.
Additional Interest
In the event of a default in the payment of principal or interest hereon when due, whether at maturity, by redemption or otherwise, the amount of such default shall bear interest (the “additional interest”) at a rate equal to the rate of interest which is two percent above the Authority’s cost of providing funds (as determined by the Authority) to make payment on the bonds of the Authority issued to provide funds to purchase this Bond but in no event in excess of the maximum rate of interest permitted by law. The additional interest shall continue to accrue until the Authority has been fully reimbursed for all costs incurred by the Authority (as determined by the Authority) as a consequence of the Issuer’s default. Such additional interest shall be payable on the interest payment date following demand of the Authority. In the event that (for reasons other than the default in the payment of any municipal obligation purchased by the Authority) the investment of amounts in the reserve account established by the Authority for the bonds of the Authority issued to provide funds to purchase this Bond fails to provide sufficient available funds (together with any other funds which may be made available for such purpose) to pay the interest on outstanding bonds of the Authority issued to fund such account, the Issuer shall and hereby agrees to pay on demand only the Issuer’s pro rata share (as determined by the Authority) of such deficiency as additional interest on this Bond.
This Bond is a single, fully-registered, non-convertible bond in the principal sum of $____________, issued under and in pursuance of a resolution duly adopted by the Board of Commissioners of the Issuer on ___________, 2024 (the “Resolution”) under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 342, Public Acts of Michigan, 1939, as amended (“Act 342”), for the purpose of paying the cost of constructing extensions to the System (as hereinafter defined).
This bond is payable primarily from the proceeds of contractual payments to be paid by the Charter Township of Grand Blanc, the Township of Davison, the Village of Goodrich, and the Township of Atlas, each located in the County of Genesee, State of Michigan (each, a “Local Unit,” and collectively, the “Local Units”) to the Issuer pursuant to a certain Financing Contract, dated as of March 1, 2024 (the “Contract”), by and among the Issuer, acting by and through its Drain Commissioner, as county agency under Act 342, and the Local Units, whereby the Issuer is to assist in the financing of a portion of the cost of acquiring and constructing extensions to the Genesee County Sewage Disposal System (Interceptors and Treatment Facilities) (the “System”) to serve the Local Units. By the provisions of the Contract and pursuant to the authorization provided by law, each Local Unit has pledged its limited tax full faith and credit for the payment of its contractual payments. The Issuer has irrevocably pledged to the payment of this Bond the total contractual payments, which said total payments are established in the amount required to pay the principal of and interest on this Bond when due. As additional security for the payment of the principal of and interest on this Bond, the Issuer, pursuant to the provisions of Act 342 and the Resolution, has pledged its limited tax full faith and credit for the prompt payment of the principal of and interest on this Bond. The full faith and credit pledges of the Local Units and of the Issuer are limited tax general obligations of each severally, and each is required to pay its respective debt service commitments on this Bond as a first budget obligation from its general funds, including the collection of any ad valorem taxes which each is authorized to levy. However, the ability of each to levy such taxes is subject to applicable constitutional, statutory and charter tax rate limitations.
For a complete statement of the funds from which and the conditions under which this Bond is payable and the general covenants and provisions pursuant to which this Bond is issued, reference is made to the Contract and the Resolution.
This Bond is transferable only upon the books of the Issuer by the registered owner in person or the registered owner’s attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the transfer agent, duly executed by the registered owner or the registered owner’s attorney duly authorized in writing, and thereupon a new registered bond in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in the Resolution, and upon payment of the charges, if any, therein prescribed.
It is hereby certified and recited that all acts, conditions and things required to be done, exist and happen, precedent to and in the issuance of this Bond, in order to make it a valid and binding obligation of the Issuer, have been done, exist and have happened in regular and due form and time as provided by law, and that the total indebtedness of the Issuer does not exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the County of Genesee, State of Michigan, has caused this Bond to be signed in the name of said Issuer by the manual or facsimile signature of the Chairperson of its Board of Commissioners and to be countersigned by the manual or facsimile signature of the County Clerk and its corporate seal to be imprinted hereon, all as of the Date of Original Issue.
COUNTY OF GENESEE
By:
Chairperson, Board of Commissioners
Countersigned:
By:
County Clerk
EGLE Project No.:
EGLE Approved Amount*:
SCHEDULE A
Based on the schedule provided below unless revised as provided in this paragraph, repayment of principal of the Bond shall be made until the full amount advanced to the Issuer is repaid. In the event the Order of Approval issued by the Department of Environment, Great Lakes, and Energy (the “Order”) approves a principal amount of assistance less than the amount of the Bond delivered to the Authority, the Authority shall only disburse principal up to the amount stated in the Order. In the event (1) that the payment schedule approved by the Issuer and described below provides for payment of a total principal amount greater than the amount of assistance approved by the Order, or (2) that less than the principal amount of assistance approved by the Order is disbursed to the Issuer by the Authority, the Authority shall prepare a new payment schedule which shall be effective upon receipt by the Issuer.
|
Principal Installment Due on |
Amount of Principal Installment |
Interest on the Bond shall accrue on that portion of principal disbursed by the Authority to the Issuer pursuant to the Order from the date such portion is disbursed, until paid, at the rate of _____% per annum, payable ________ 1, _____, and semi-annually thereafter.
The Issuer agrees that it will deposit with the Authority’s Depository, or at such other place as shall be designated in writing to the Issuer by the Authority, payments of the principal of, premium, if any, and interest on this Bond in immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is due whether by maturity, redemption or otherwise. In the event that the Authority’s Depository has not received the Issuer’s deposit by 12:00 noon on the scheduled day, the Issuer shall immediately pay to the Authority as invoiced by the Authority an amount to recover the Authority’s administrative costs and lost investment earnings attributable to that late payment.
*Not to exceed amount. Loan reduction at close out will result in a proportional decrease.
Section 11. Additional Bonds. Nothing contained in this resolution or the Financing Contract shall be construed to prevent the County from issuing additional bonds under the provisions of Act 342 for any of the purposes authorized by Act 342, but any such additional bonds shall in no way have any lien on or be payable out of the Contractual Payments pledged to the payment of the Bonds.
Section 12. Construction Fund. The County Treasurer, Chief Financial Officer or County Agency shall, after the adoption of this resolution, open a special depository account with a depository bank or trust company to be designated “CONSTRUCTION ACCOUNT - SEWAGE DISPOSAL SYSTEM BONDS (KEARSLEY CREEK INTERCEPTOR PROJECT), SERIES 2024” (the “Construction Account”). The proceeds from the sale of the Bonds shall be deposited in the Construction Account and shall be used solely and only to pay costs of the Projects, including payment of engineering, legal and financing expenses, and other expenses incident thereto and incident to the issuance of the Bonds. Any unexpended balance remaining in the Construction Account after completion of the Projects shall be applied in accordance with Section 21 of the Financing Contract.
Section 13. Resolution and Contract. The provisions of this resolution, together with the Financing Contract, the terms of which are incorporated herein by this reference, shall constitute a contract between the County and the holder or holders from time to time of the Bonds, and after the issuance of the Bonds, no alteration or revision of the provisions of this resolution or the Financing Contract may be made which would in any manner materially affect either the security for the Bonds or the prompt payment of principal or interest thereon.
Section 14. Covenants with Bondholders. The County covenants and agrees with the successive holders of the Bonds, so long as any of the Bonds remain outstanding and unpaid as to either principal or interest, as follows:
(a) The County will punctually perform all of its obligations and duties under this resolution and the Financing Contract, including the collection, segregation and application of the Contractual Payments in the manner required by the provisions of this resolution.
(b) The County will apply and use the proceeds of sale of the Bonds for the purposes and in the manner required by the Financing Contract and this resolution.
(c) The County shall, to the extent permitted by law, take all actions within its control necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes under the Code, including, but not limited to, actions relating to any required rebate of arbitrage earnings and the expenditure and investment of proceeds of the Bonds and moneys deemed to be proceeds of the Bonds, and to prevent the Bonds from being or becoming “private activity bonds” as that term is used in Section 141 of the Code.
Section 15. Negotiated Sale; Execution of Documents. The County has considered the option of selling the Bonds through a competitive sale and a negotiated sale and, pursuant to the requirements of Act 34, determines that it is in the best interests of the County and the Local Units to negotiate the sale of the Bonds to the MFA because the Clean Water State Revolving Fund financing program provides significant interest cost savings to the County and the Local Units in comparison to a competitive sale in the municipal bond market. Each Authorized Officer is hereby individually authorized to make application to the MFA and to EGLE for placement of the Bonds with the MFA. Each Authorized Officer is individually authorized to execute and deliver such contracts, documents and certificates as may be required by the MFA or EGLE or as may be otherwise necessary to effectuate the sale and delivery of the Bonds to the MFA, including the Purchase Contract and a Supplemental Agreement by and among the County, the MFA and EGLE. Each Authorized Officer is individually authorized to execute and deliver the Issuer’s Certificate required by the MFA.
Section 16. Approval of Details of Bonds. Each Authorized Officer is hereby individually authorized to adjust the final details of the Bonds set forth herein to the extent necessary or convenient to complete the transactions authorized herein, and in pursuance of the foregoing is authorized to exercise the authority and make the determinations authorized pursuant to Section 315(1)(d) of Act 34, including, but not limited to, determinations regarding interest rates, prices, discounts, serial and term maturities, principal amounts, denominations, dates of issuance, interest payment dates, redemption rights, the place of delivery and payment, and other matters necessary to effectuate the sale and issuance of the Bonds authorized herein, within the parameters established by this resolution.
Section 17. Authorization of Other Actions. The County Agency, Chairperson of the Board of Commissioners, Chief Financial Officer and County Clerk are each hereby individually authorized to complete, execute and file any and all applications or requests for waivers with the Michigan Department of Treasury necessary to effectuate the sale and delivery of the Bonds as contemplated by this resolution, including an Application for State Treasurer’s Approval to Issue Long-Term Securities, in such form as shall be approved by any of such officers. The County Agency and County Treasurer are further authorized to disburse funds for, and to pay, any necessary fees in connection with any such applications or waivers. The County Agency, Chairperson of the Board of Commissioners, Chief Financial Officer and County Clerk are each hereby individually authorized and directed to execute and deliver all other documents and certificates and to take all other actions and to make such other filings with any parties necessary or advisable to enable the sale and delivery of the Bonds as contemplated herein.
Section 18. Bond Counsel. The appointment of the law firm of Miller, Canfield, Paddock and Stone, P.L.C. to serve as bond counsel to the County in connection with the issuance of the Bonds is hereby approved and confirmed.
Section 19. Section Headings. The section headings in this resolution are for convenience of reference only and do not constitute a part of this resolution.
Section 20. Repealer. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution be and the same hereby are repealed.
Section 21. Effective Date. This resolution shall become effective immediately upon its adoption.
AYES: ___________________________________________________________
___________________________________________________________
NAYS: ___________________________________________________________
ABSENT: ___________________________________________________________
RESOLUTION DECLARED ADOPTED.
I hereby certify that the foregoing is a true and complete copy of a resolution adopted by the Board of Commissioners of the County of Genesee, State of Michigan, at a regular meeting held on ___________, 2024, and that said meeting was conducted and public notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, as amended, and that the minutes of said meeting were kept and will be or have been made available as required by said Act. I further certify that notice of said meeting was posted pursuant to the requirements of Section 308 of Act 34, Public Acts of Michigan, 2001, as amended, in the form attached to this resolution as Exhibit B.
____________________________________
Domonique D. Clemens
County Clerk
County of Genesee
EXHIBIT A
[See Attached Financing Contract]
EXHIBIT B
MEETING NOTICE
board of commissioners
County of genesee, State of Michigan
At the regular meeting of the Board of Commissioners of the County of Genesee, Michigan (the “County”) to be held on __________, 2024 at _____ p.m. prevailing Eastern Time, at the Genesee County Juvenile Justice Center located at 4287 Pasadena Avenue, Flint, MI 48504 the Board of Commissioners of the County will consider the adoption of a resolution (the “Resolution”) authorizing the issuance by the County of its Sewage Disposal System Bonds (Kearsley Creek Interceptor Project), Series 2024 (Limited Tax General Obligation) in the aggregate principal amount of not to exceed $36,400,000 (the “Bonds”).
The Bonds will be payable primarily from the proceeds of contractual payments to be paid by the Charter Township of Grand Blanc, the Township of Davison, the Village of Goodrich, and the Township of Atlas (each, a “Local Unit,” and collectively, the “Local Units”) to the County pursuant to a certain Financing Contract, dated as of March 1, 2024, by and among the County, acting by and through its Drain Commissioner, as county agency, and the Local Units.
As additional security for the payment of the principal of and interest on the Bonds, the Resolution provides that the County will pledge its limited tax full faith and credit for the prompt payment of the principal of and interest on the Bonds.
THIS NOTICE is given pursuant to the requirements of Section 308 of Act 34, Public Acts of Michigan, 2001, as amended.
Domonique D. Clemens
County Clerk
ENESEE COUNTY SEWAGE DISPOSAL SYSTEM
(INTERCEPTORS AND TREATMENT FACILITIES)
KEARSLEY CREEK INTERCEPTOR PROJECT
FINANCING CONTRACT
THIS FINANCING CONTRACT (this “Contract”) is made and entered into as of this 1st day of March, 2024, by and among the COUNTY OF GENESEE, a Michigan county corporation (the “County”), acting by and through its Drain Commissioner, in his capacity as the duly appointed and acting COUNTY AGENCY under Act 342, Public Acts of Michigan, 1939, as amended, and the CHARTER TOWNSHIP OF GRAND BLANC (“Grand Blanc”), the TOWNSHIP OF DAVISON (“Davison”), the VILLAGE OF GOODRICH (“Goodrich”) and the TOWNSHIP OF ATLAS (“Atlas”), each a municipal corporation located in the County of Genesee, Michigan (Grand Blanc, Davison, Goodrich and Atlas is each referred to herein as a “Local Unit,” and collectively, the “Local Units”).
WITNESSETH:
WHEREAS, Act 342, Public Acts of Michigan, 1939, as amended (“Act 342”), authorizes the county board of commissioners of a county to authorize and direct the establishment of a system or systems of sewer and sewage disposal improvements and services within or between cities, villages, townships, charter townships, or any duly authorized and established combinations thereof within or without the county; and
WHEREAS, the Board of Commissioners of the County has authorized and directed the establishment, pursuant to Act 342, of systems of sewer and sewage disposal improvements and services known as the Genesee County Sewage Disposal System (Interceptors and Treatment Facilities) (the “System”) to provide sewers and sewage disposal improvements and services to the Local Units and other units of government (as defined in Act 342) as approved from time to time by the Board of Commissioners; and
WHEREAS, pursuant to Act 342, the Board of Commissioners of the County has designated the Genesee County Drain Commissioner as the “county agency” of the County (the “County Agency”) under the provisions of Act 342 in connection with the establishment of the System and as the person to have supervision and control of the management and operation of the System; and
WHEREAS, the duly qualified and acting County Agency has been established with all the rights, powers and duties as specified in Act 342; and
WHEREAS, the County and each of the Local Units have entered into that certain Kearsley Creek Interceptor Phase I Genesee County Municipal Agreement, dated as of August 8, 2023, as amended by a First Addendum to Kearsley Creek Interceptor Phase I Genesee County Municipal Agreement (as amended, the “Phase I Contract”), pursuant to which the County will acquire, construct, own and operate an extension to the System to serve the Local Units to be known as “Genesee County - Kearsley Creek Interceptor Phase I” as more particularly described in the Phase I Contract (the “Phase I Project”); and
WHEREAS, the County and Grand Blanc have entered into or will enter into that certain Kearsley Creek Interceptor - Phase II Grand Blanc Township Sewer System Agreement (the “Phase II Contract”), pursuant to which the County will acquire and construct sanitary sewers to serve Grand Blanc to be known as Kearsley Creek Interceptor - Phase II,” as more particularly described in the Phase II Contract (the “Phase II Project”); and
WHEREAS, the Phase II Project will be owned, operated and maintained by Grand Blanc and will connect to the Phase I Project; and
WHEREAS, the County and Davison have entered into or will enter into that certain Kearsley Creek Interceptor - Phase III Davison Township Sewer System Agreement (the “Phase III Contract”), pursuant to which the County will acquire and construct sanitary sewers to serve Davison to be known as Kearsley Creek Interceptor - Phase III,” as more particularly described in the Phase III Contract (the “Phase III Project”); and
WHEREAS, the Phase III Project will be owned, operated and maintained by Davison and will connect to the Phase I Project; and
WHEREAS, it is immediately necessary and imperative for the public health and welfare of the present and future residents of the Local Units that the Phase I Project, the Phase II Project and the Phase III Project (each, a “Project,” and collectively, the “Projects”) be acquired and constructed to service the Local Units; and
WHEREAS, by the terms of Act 342, the County and the Local Units are authorized to enter into a contract for the acquisition, construction and financing of sewer and sewage disposal system improvements and facilities and for the payment of the Local Units’ share of the costs thereof, with interest, over a period of not exceeding forty (40) years, and the County is then authorized, pursuant to appropriate action of its Board of Commissioners, to issue bonds of the County to provide the funds therefor, secured by the contractual obligations of the Local Units as set forth herein; and
WHEREAS, in order to issue bonds, it is necessary for the County and the Local Units to enter into this Contract as provided in Act 342; and
WHEREAS, the Local Units have or will shortly publish the requisite notice informing their electors of their referendum rights with respect to this Contract.
NOW, THEREFORE, in consideration of the premises and the covenants of each other, the parties hereto agree as follows:
1. The County and each of the Local Units approve the construction of the Phase I Project as part of the existing System established by the County under the provisions of Act 342. The Phase I Project shall consist generally of those improvements to the System as set forth in the Phase I Contract, all as more fully described in plans and specifications secured and to be secured by the County Agency. The specific service area of the various improvements to be constructed as a part of the Phase I Project shall be as set out in the plans and specifications for the Project secured by the County Agency.
2. The County and Grand Blanc approve the construction of the Phase II Project in accordance with the plans and specifications secured and to be secured by the County Agency, as set forth in the Phase II Contract. The Phase II Project shall be owned, operated and maintained by Grand Blanc.
3. The County and Davison approve the construction of the Phase III Project in accordance with the plans and specifications secured and to be secured by the County Agency, as set forth in the Phase III Contract. The Phase III Project shall be owned, operated and maintained by Grand Blanc.
4. Each of the Local Units hereby consent to the use by the County of the public streets, alleys, lands and rights-of-way in the Local Units for the purpose of constructing, operating and/or maintaining, as applicable, the Projects and any improvements, enlargements and extensions thereto.
5. The Projects are designed to service certain areas in the Local Units in need of improved sanitary sewer service and are immediately necessary to protect and preserve the public health.
6. Each of the Local Units hereby approves and confirms the preliminary plans for the Phase I Project which have been filed with the Genesee County Board of Commissioners. The County Agency and each of the Local Units hereby approve and confirm the total estimated cost of the Phase I Project (excluding financing costs) to be charged to and paid by the Local Units in the amount $17,860,000. Each Local Unit shall pay its proportionate share of the total cost of the Phase I Project to be charged to and paid for by the Local Units, which cost shall be allocated among and charged to the Local Units as shown below (expressed as a percentage of the total cost of the Phase I Project to be charged to and paid for by the Local Units):
Charter Township of Grand Blanc 74.5%
Village of Goodrich 3.6%
Township of Davison 12.2%
Township of Atlas 9.7%
7. Grand Blanc hereby approves and confirms the preliminary plans for the Phase II Project which have been filed with the Genesee County Board of Commissioners. The County Agency and Grand Blanc hereby approve and confirm the total estimated cost of the Phase II Project (excluding financing costs) to be charged to and paid by Grand Blanc in the amount $3,429,450. Grand Blanc shall pay 100% of the total cost of the Phase II Project.
8. Davison hereby approves and confirms the preliminary plans for the Phase III Project which have been filed with the Genesee County Board of Commissioners. The County Agency and Davison hereby approve and confirm the total estimated cost of the Phase III Project (excluding financing costs) to be charged to and paid by Davison in the amount $8,962,786. Davison shall pay 100% of the cost of the Phase III Project.
9. The estimate of cost of each of the Projects described in Sections 6, 7, and 8 of this Contract include all surveys, plans, specifications, acquisition of property for rights-of-way, physical construction necessary to acquire and construct each of the respective Projects, the acquisition of all materials, machinery and necessary equipment, contingency allowance, and engineering, engineering supervision, administrative and legal expenses necessary in connection with the acquisition and construction of each of the respective Projects.
10. The County Agency will acquire and construct each of the Projects and for that purpose will take bids for the acquisition and construction thereof in accordance with the provisions of the Phase I Contract, the Phase II Contract and the Phase III Contract (collectively, the “Project Contracts”), as applicable. The County Agency shall not enter into any final contract or contracts for the acquisition and construction of any Project if such contract price or prices will be such as to cause the total cost of such Project to exceed by more than ten percent (10%) the estimated total cost of such Project as approved in Section 6, 7 or 8 of this Contract, as applicable, unless the applicable Local Units, by resolution of their respective legislative bodies, approve said increased cost and agree to pay the excess over the estimated cost.
11. The Projects shall be acquired and constructed by the County Agency substantially in accordance with the preliminary plans that have been secured by the County Agency and in accordance with the final plans and specifications to be secured by the County Agency, but variations therefrom that do not materially change the location, capacity, or overall design of a Project may be made by the County Agency without the approval of the applicable Local Units. All matters relating to engineering plans and specifications, together with the making and letting of final construction contracts for the Projects, the approval of work and materials thereunder, and construction supervision, shall be in the exclusive control of the County Agency. All acquisition of rights-of-way shall be done by the Local Units, but the County Agency may reimburse the Local Units for the cost of such acquisition from the proceeds of sale of the Bonds (as hereinafter defined).
12. The Local Units covenant that should it appear, upon notice from the County Agency, that additional funds will be needed to pay the expenses of operation, maintenance and administration of the Phase I Project and/or debt service on the Bonds when due, the Local Units will cooperate with the County and cause to be increased rates and charges for the use of all sewage disposal system improvements and facilities of the Local Units, or take such other actions, so that sufficient revenues will be available for such purposes. The County shall have the right to examine the books and records of the Local Units relative to the System and the Projects.
13. To provide for the acquisition and construction of the Projects and for the financing of the Local Units’ share of the cost of the Projects in accordance with the provisions of Act 342 and of this Contract, the County Agency shall take the following steps:
(a) The County Agency will submit to the Board of Commissioners of the County a resolution (the “Bond Resolution”) providing for the issuance of bonds, in one or more series, in the aggregate principal amount of not to exceed Thirty-Six Million Four Hundred Thousand Dollars ($36,400,000) (the “Bonds”), to finance all or a portion of the Local Units’ share of the costs of the Projects. The Bonds shall mature serially or by mandatory sinking fund redemption as hereinafter provided and shall be secured primarily by the contractual obligations of the Local Units to pay its installments due, plus interest, as hereinafter provided in this Contract, and secondarily, if approved by a majority of the members-elect of the Board of Commissioners, by the full faith and credit of the County. After due adoption of the Bond Resolution, the County Agency will take all necessary legal procedures and steps necessary to effectuate the sale and delivery of said Bonds.
(b) The County Agency shall take all steps necessary to take bids for and enter into and execute final construction contracts for the acquisition and construction of the Projects as specified and approved in the Project Contracts, in accordance with the plans and specifications therefor based on the plans as approved by the Project Contracts.
(c) The County Agency will require and procure from the contractor or contractors undertaking the actual construction and acquisition of the Projects all necessary and proper bonds to guarantee the performance of the contract or contracts, and such labor and material bonds as may be required by law, in such amount and such forms as may be approved by the County Agency.
(d) The County Agency, upon receipt of the proceeds of sale of the Bonds, will comply with all provisions and requirements provided for in the Bond Resolution and this Contract relative to the disposition and use of the proceeds of sale of the Bonds.
(e) The County may temporarily invest any Bond proceeds as permitted by law, and investment income shall accrue to and follow the funds producing such income. Neither the County nor the Local Units shall invest, reinvest, or accumulate any moneys deemed to be proceeds of the Bonds pursuant to applicable federal law and regulations, in such a manner as to cause the Bonds to be “arbitrage bonds” within the meaning of said law and regulations, nor shall any party hereto take any action which would cause the interest on the Bonds to be included in gross income for federal income taxation purposes.
14. The total costs of the Projects to be financed by the issuance of the Bonds shall be charged to and paid by the Local Units to the County in the manner and at the times herein set forth. The principal amount of the Bonds shall be paid to the County by the Local Units in annual principal installments in amounts equal to the annual principal installments on the Bonds as established by the County in the Bond Resolution or as may be approved by the County Agency at the time of sale of the Bonds, plus interest and other expenses as hereinafter provided, on a business day that is not less five (5) business days preceding the date each year on which principal installments on the Bonds are due as established by the County in the Bond Resolution or as may be approved by the County Agency at the time of sale of the Bonds.
Each Local Unit covenants and agrees to pay its Proportionate Bond Share (hereinafter defined) of each principal installment of the Bonds required to be made by the Local Units to the County Agency pursuant to this Section 14. “Proportionate Bond Share” means, for each Local Unit, such Local Unit’s percentage share of each payment required to be made by the Local Units pursuant to this Contract as specified in Appendix A to this Contract.
In addition to said principal installments, each Local Unit covenants and agrees to pay to the County on a business day that is not less than five (5) business days preceding each semi-annual date on which interest on the Bonds is due and payable, its Proportionate Bond Share of the amount required to pay all interest due and payable on Bonds from time to time outstanding on the next succeeding interest payment date for the Bonds, as established by the County in the Bond Resolution or as may be approved by the County Agency at the time of sale of the Bonds.
The sum of the charges to be paid by the Local Units pursuant to this Section 14 shall in all cases be sufficient to ensure that the County shall have on hand, not less than five (5) business days preceding the dates each year on which interest or principal of and interest on the Bonds is due and payable, an amount sufficient to pay the interest or the principal of and interest on the Bonds coming due on the next interest payment date or principal and interest payment date.
It is understood and agreed that the Bonds of the County will be issued in anticipation of, and secured by, the contractual obligations of the Local Units as set forth in this Section 14. From time to time as the County is billed by the paying agent for the Bonds for its services as paying agent, or registering Bonds, and as other costs and expenses accrue to the County from handling of the payments made by the Local Units, or from other actions taken in connection with the payment, accounting and administration of the Bonds, the County shall promptly notify the Local Units of the amount of such paying agent fees and other costs and expenses, and each Local Unit shall promptly remit to the County its Proportionate Bond Share of the funds necessary to meet such fees and other costs and expenses.
The County Agency shall, within thirty (30) days after the delivery of the Bonds, furnish the Local Units with a complete schedule of maturities of principal and interest thereon and a calculation of each Local Unit’s Proportionate Bond Share thereof, which calculation shall be conclusive and binding on the Local Units. In addition, the County Agency shall also, at least thirty (30) days prior to each principal and/or interest installment due date, advise the Local Units, in writing, of the exact amount of principal and/or interest due on the Bonds on the next succeeding bond principal and/or interest due date, and payable by the Local Units on the fifth business day preceding the payment date, as hereinbefore provided. Failure of the County Agency to notify the Local Units of any such payment shall not relieve the Local Units of the obligation to make such payment.
If any payment required to be made by a Local Unit pursuant to this Section 14 is not paid when due, the amount not so paid shall be subject to a penalty, in addition to interest, of one percent (1%) thereof for each month or fraction thereof that the same remains unpaid after the due date.
Should cash payments be required from the Local Units in addition to the amounts specified in the preceding paragraphs of this Section 14 to meet costs of constructing any of the Projects, the applicable Local Units shall, upon written request by the County Agency, furnish to the County Agency written evidence of its agreement and ability to make such additional cash payments, and the County Agency may elect not to proceed with the acquisition or financing of the Projects until such written evidence satisfactory to the County Agency has been received by it. The applicable Local Units shall pay to the County Agency such additional cash payments within thirty (30) days after written request for such payment has been delivered by the County Agency to the Local Units.
15. Each Local Unit, pursuant to specific authorization of Section 5a of Act 342, hereby irrevocably pledges its full faith and credit for the prompt and timely payment of its obligations pledged for payment of the principal of and interest on the Bonds as set forth in Section 14 of this Contract. Pursuant to such pledge, if other funds are not available, each Local Unit shall be required to pay such amounts from any of its general funds as a first budget obligation, and shall each year levy an ad valorem tax on all the taxable property in the Local Unit in an amount which, taking into consideration estimated delinquencies in tax collections, will be sufficient to pay such obligations under this Contract becoming due before the time of the following year’s tax collections, such annual levy, however, to be subject to applicable constitutional, statutory and charter tax limitations. The foregoing commitments of the Local Units are expressly recognized as being for the purpose of providing funds to meet their respective contractual obligations in anticipation of which the Bonds are to are issued. Nothing herein contained shall be construed to prevent the Local Units from using any, or any combination of, the means and methods provided in Act 342, for the purpose of providing funds to meet their obligations under this Contract, and if at the time of making the annual tax levy there shall be other funds on hand earmarked and set aside for the payment of the contractual obligations due prior to the next tax collection period, then such annual tax levy may be reduced by such amount.
16. Each Local Unit may pay in advance any of its payments required to be made by this Contract, in which event the County Agency shall credit such Local Unit with such advance payment on future-due payments to the extent of such advance payment.
17. If the Bonds are subject to optional redemption prior to maturity, a Local Unit may pay additional moneys over and above any of the payments specified in this Contract, with the written request that said additional funds be used to call Bonds for redemption prior to maturity, in which event the County shall be obligated to apply and use said moneys for such purpose to the fullest extent possible. Such moneys shall not then be credited as advance payments under the provisions of Section 16 of this Contract.
18. In the event that a Local Unit shall fail for any reason to pay to the County at the times specified the amounts required to be paid by the provisions of this Contract, the County Agency may immediately give notice of such default and the amount thereof, in writing, to the Treasurer of such Local Unit, the County Treasurer, the Treasurer of the State of Michigan, and such other official charged with the disbursement to the Local Unit of funds returned by the State and now or hereafter under Act 342 available for pledge, as provided in this Section, and if such default is not corrected within ten (10) days after such notification, such official charged with disbursement to such Local Unit of the aforesaid funds, is by these presents, specifically authorized by such Local Unit to withhold from the aforesaid funds the maximum amount permitted by law necessary to cure said deficiency, and to pay said sums so withheld to the County Agency, to apply on the obligations of such Local Unit as herein set forth. Any such moneys so withheld and paid shall be considered to have been paid to such Local Unit within the meaning of the Michigan Constitution of 1963, the purpose of this provision being solely to voluntarily authorize and pledge the use of said funds in such amounts as may be permitted by law owing to the Local Unit to meet any past-due obligations of the Local Unit due under the provisions of this Contract. In addition to the foregoing, the County shall have all other rights and remedies provided by law to enforce the obligations of the Local Units to make payment in the manner and at the times required by this Contract, including the right of the County to direct the Local Units to make a tax levy or rate increase to reimburse the County for any funds advanced. The Local Units will not take any action to reduce the right of the County to receive the aforesaid state-returned moneys in the event of default.
19. It is specifically recognized by the Local Units that the debt service payments required to be made by it pursuant to the terms of Section 14 of this Contract are to be pledged for and used to pay the principal of and interest on the Bonds, as provided by this Contract and authorized by law, and each Local Unit covenants and agrees that it will make all required payments to the County promptly and at the times herein specified without regard to whether any of the Projects is actually completed or placed in operation.
20. If, after construction bids for the Projects are received, it is determined by the County Agency that the costs of any one or more of the Projects is less than the estimated cost thereof as set forth in Section 6, 7 or 8 of this Contract, as applicable, and that the full principal amount of the Bonds authorized pursuant to this Contract may be reduced as a result thereof, then the County Agency shall be automatically authorized to reduce the amount of the Bonds to be sold. In such event, the Proportionate Bond Share of each Local Unit as specified in Section 14 of this Contract shall be adjusted by the County Agency, if necessary, to account for the reduction in the cost of one or more of the Projects based on the allocation of the total cost of each of the Projects to the Local Units as specified in Sections 6, 7 and 8 of the Contract. If any adjustments to the Proportionate Bond Share of the Local Units is made by the County Agency in accordance with this Section 20, the County Agency shall be automatically authorized to amend Appendix A to this Contract to reflect such adjustments and shall provide a copy of such amendment to the Local Units in the manner provided in Section 14 of this Contract. Any reduction in the principal amount of Bonds issued and of any corresponding adjustments to the Proportionate Bond Share of the Local Units as set forth in Appendix A to this Contract, in each case as determined by the County Agency, shall be conclusive and binding on the Local Units.
21. After completion of the Projects and payment of all costs thereof, any surplus remaining from the proceeds of sale of the Bonds shall be used by the County Agency for either of the following purposes, at the option of and upon request made by resolutions of the Local Units, to wit: (a) for additional sewer or sewage disposal system improvements, subject to approval of the County Agency, or (b) for credit by the County toward the next payments due to the County by the Local Units for payment of principal of and/or interest on the Bonds.
22. The obligations and undertakings of each of the parties to this Contract shall be conditioned on the successful issuance and sale of the Bonds pursuant to Act 342, and if for any reason whatsoever, the Bonds are not issued and sold within two (2) years from the date of this Contract, then this Contract, except for payment of preliminary expenses and ownership of engineering data, shall be considered void and of no force and effect. In the event that the Bonds are not issued and sold, all preliminary legal and engineering costs with respect to each of the Projects shall be paid by the Local Units in proportion to the allocation of the total cost of each of the Projects to the Local Units as set forth in Sections 6, 7 and 8 of this Contract.
23. The County Agency and each Local Unit recognizes that the holders from time to time of the Bonds will have contractual rights in this Contract, and it is therefore covenanted and agreed by each of them that so long as any of the Bonds shall remain outstanding and unpaid, the provisions of this Contract shall not be subject to any alteration or revision which would in any manner materially affect either the security for the Bonds or the prompt payment of principal or interest thereon. Each Local Unit and the County Agency further covenants and agrees that they will each comply with their respective duties and obligations under the terms of this Contract promptly at the times and in the manner herein set forth, and will not suffer to be done any act which would in any way impair the Bonds, the security therefor, or the prompt payment of principal and interest thereon. It is hereby declared that the terms of this Contract, insofar as they pertain to the security of the Bonds, shall be deemed to be for the benefit of the holders of the Bonds.
24. This Contract shall remain in full force and effect for a period of forty (40) years from the effective date of this Contract as provided in Section 27 hereof; provided that the obligation of each Local Unit to pay its Proportionate Bond Share of each payment required to be made by the Local Units pursuant to Section 14 of this Contract shall terminate at such time as the Bonds are paid in full, together with any deficiency or penalty thereon.
25. The parties hereto agree that the costs (i.e., attorney fees, settlement amounts, payment of judgments, etc.) of any court or administrative proceedings, and/or alternative dispute resolution methods, which arise directly or indirectly out of this Contract or the construction or financing of the Projects hereunder, and which costs are not otherwise covered by insurance and/or bonds of any of the parties or required by the County Agency of its respective engineers and contractors, shall be charged to, and paid by, the Local Units.
26. This Contract shall inure to the benefit of and be binding upon the respective parties hereto and their successors and assigns.
27. This Contract shall become effective upon the latest of the following: (a) approval of this Contract by the legislative bodies of each of the Local Units, by the County Agency and by the Board of Commissioners of the County; (b) execution of this Contract by the duly authorized officers of each of the Local Units and by the County Agency for and on behalf of the County; and (c) the expiration of 45 days after the date of publication by each of the Local Units of a notice of intent to enter into this Contract as provided in Section 5b of Act 342 unless the effectiveness of this Contract is stayed by reason of the filing of a petition for referendum thereon, in which case upon approval by a majority of the electors of such Local Unit voting thereupon at an election called and held for that purpose.
28. In the event that any one or more of the provisions of this Contract shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, but this Contract shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
29. To the extent of any conflict between the provisions of this Contract and the provisions of any other contract by and among the parties hereto, including the Project Contracts, the provisions of this Contract shall control.
30. This Contract may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original and shall constitute and be but one and the same instrument.
[Signatures appear on the following page.]
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed and delivered by the undersigned, being duly authorized by the respective governing bodies of such parties, all as of the day and year first above written.
CHARTER TOWNSHIP OF GRAND BLANC
By
Its: Supervisor
By
Its: Clerk
TOWNSHIP OF DAVISON
By
Its: Supervisor
By
Its: Clerk
VILLAGE OF GOODRICH
By
Its: President
By
Its: Clerk
TOWNSHIP OF ATLAS
By
Its: Supervisor
By
Its: Clerk
[Signatures continue on the following page.]
COUNTY OF GENESEE,
by and through its County Agency
By
Jeffrey Wright
Its: Genesee County Drain Commissioner
APPENDIX A
PROPORTIONATE BOND SHARE
“Proportionate Bond Share,” as used in this Contract, means, for each Local Unit, such Local Unit’s percentage share of each payment required to be made by the Local Units pursuant to this Contract as set forth below:
Charter Township of Grand Blanc 55.32%*
Village of Goodrich 2.12%*
Township of Davison 36.83%*
Township of Atlas 5.73%*
*Subject to adjustment in accordance with Section 20 of this Contract.