ORDINANCE Ordinance Page 1 of 10 Prepared by Bond Attorney; Edited by City Clerk

Transcription

1 ORDINANCE AN ORDINANCE OF THE CITY OF HOPKINSVILLE, KENTUCKY (THE CITY ) RELATING TO THE ISSUANCE OF TAXABLE INDUSTRIAL BUILDING REVENUE BONDS, SERIES 2017 (COMMONWEALTH AGRI- ENERGY, LLC PROJECT), IN AN AMOUNT OF UP TO $18,000,000 (THE BONDS ), ISSUED AT THE REQUEST OF COMMONWEALTH AGRI- ENERGY, LLC, A KENTUCKY LIMITED LIABILITY COMPANY (THE COMPANY ), FOR THE PURPOSE OF FINANCING THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF AN ADDITIONAL FACILITY FOR THE PRODUCTION OF ETHANOL FROM AGRICULTURAL PRODUCTS (THE 2017 PROJECT ) ON CERTAIN REAL PROPERTY LOCATED AT 4895 PEMBROKE ROAD, HOPKINSVILLE, KENTUCKY (THE REAL PROPERTY ); AND APPROVING, AUTHORIZING AND ACKNOWLEDGING THE ISSUANCE OF THE BONDS AND THE EXECUTION AND DELIVERY OF (1) A LEASE AGREEMENT WITH RESPECT TO THE BONDS BETWEEN THE CITY AND THE COMPANY; (2) A BOND AGREEMENT WITH RESPECT TO THE BONDS AMONG THE CITY, THE COMPANY, AND HOPKINSVILLE ELEVATOR CO., INC. AS PURCHASER OF THE BONDS (THE PURCHASER ); (3) A DEED RELEASING AN UNNEEDED PORTION OF THE REAL PROPERTY BACK TO THE COMPANY AND (4) ANY AND ALL OTHER DOCUMENTS NECESSARY TO BE DELIVERED IN CONNECTION WITH THE ISSUANCE OF THE BONDS. WHEREAS, the City of Hopkinsville, Kentucky (the City ), a municipal and political subdivision of the Commonwealth of Kentucky, is authorized and empowered by the Industrial Building Revenue Bond Act (Section et seq.) of the Kentucky Revised Statutes, hereinafter referred to as the Act ), to issue bonds to defray the costs of an industrial building as defined in the Act; and WHEREAS, Commonwealth Agri-Energy, LLC, a Kentucky limited liability company, doing business in the Commonwealth of Kentucky (the Company ), in 2003 offered to the City an industrial building project on a site located at 4895 Pembroke Road, Hopkinsville, Kentucky (the Real Property ), if the City agreed to issue industrial building revenue bonds pursuant to the Act, such industrial building project to be leased, used and occupied by the Company as a facility for the production of ethanol from agricultural products; and WHEREAS, the City did issue its taxable industrial building revenue bonds, Series 2003A in the aggregate amount of up to $15,275,000 (the Series 2003 Bonds ), the proceeds of which were used to construct an industrial building project which has been leased, used and occupied by the Company as a facility for the production of ethanol from agricultural products (the 2003 Project ), resulting in the employment of a number of workers and promoting the economic development of the area; and Page 1 of 10

2 WHEREAS, the Series 2003 Bond was purchased by and is currently held by CoBank ACB ( CoBank ) and the outstanding principal amount of the Series 2003 Bond is $380,000; and WHEREAS, the Company now wishes to build an additional facility for the production of ethanol from agricultural products at the Real Property (the 2017 Project ) and has requested that the City agree to issue taxable industrial building revenue bonds in the aggregate amount of up to $18,000,000 (the Series 2017 Bonds ) pursuant to the Act, such industrial building project to be leased, used and occupied by the Company as an additional and expanded facility for the production of ethanol from agricultural products; and WHEREAS, under the terms of a proposed Lease Agreement (the Lease Agreement ) between the City and the Company, the City will receive payments from the Company sufficient to pay the principal and interest requirements of the Series 2017 Bonds, and which payments shall be pledged, together with the Lease Agreement itself, as security for the payment of the principal of and interest on the Series 2017 Bonds; and WHEREAS, the City has found and determined that the operation of the proposed 2017 Project will tend to relieve existing conditions of unemployment in the area and will otherwise promote the general welfare and economic development of the City and all its citizens; and WHEREAS, the Company additionally has requested that the City release back to the Company a portion of the Real Property which is not needed for either the operation of the 2003 Project or the 2017 Project; and WHEREAS, the City has found that the requested release of a portion of the Real Property which is not needed for the operation of the 2003 Project or the 2017 Project will not adversely affect the operations of the Company. NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF HOPKINSVILLE, KENTUCKY, AS FOLLOWS: 1. AUTHORIZATION OF SERIES 2017 BONDS. For the purpose of paying the costs, not otherwise provided, of the 2017 Project, the City hereby authorizes and approves the issuance of the City of Hopkinsville, Kentucky Taxable Industrial Building Revenue Bonds, Series 2017 (Commonwealth Agri- Energy, LLC. Project) (the Series 2017 Bonds ) dated as of the date of delivery of the Series 2017 Bonds, in the principal amount of up to Eighteen Million Dollars ($18,000,000) (the Series 2017 Bonds ), as more fully provided for in the Bond Agreement hereinafter approved. The Series 2017 Bonds shall mature not later than July 31, 2037, and shall bear interest from the date of delivery to the purchaser(s) thereof as provided in the Bond Agreement, with a maximum rate of interest of 12%. The principal and interest requirements of the Series 2017 Bonds are specified in the Bond Agreement. Page 2 of 10

3 2. APPROVAL AND AUTHORIZATION OF EXECUTION OF VARIOUS DOCUMENTS; LEASE AGREEMENT; AND BOND AGREEMENT. The following documents in the respective forms attached to this Ordinance are hereby approved, subject to such minor changes, insertions or omissions as may be approved by the Mayor, such approval to be conclusively evidenced by his execution of said documents, in order to effectuate the purposes of this Ordinance; and the Mayor is hereby authorized to execute and acknowledge the same for and on behalf of the City; and the Clerk/Treasurer is authorized to attest same and to affix thereto the corporate seal of the City. Said documents are hereby ordered to be filed in the office of the Clerk/Treasurer, labeled respectively, Exhibits A, B and C, as identified below, and each of said documents is ordered to be recorded with this Ordinance in the official records of the City: (a) The Lease Agreement (the Lease Agreement ) between the City and the Company with respect to the Series 2017 Bonds (Exhibit A). (b) The Bond Agreement among the City, the Company and Hopkinsville Elevator Co., Inc., as the Purchaser, with respect to the Series 2017 Bonds providing for the sale of the Series 2017 Bonds at the aggregate price of 100% of par and upon the respective terms and conditions set forth in the Bond Agreement (Exhibit B). The approval of said Bond Agreement by the Company and a separate attached letter from the Company to the City will evidence the request of the Company that the Series 2017 Bonds be sold at private sale upon a negotiated basis as authorized by KRS (c) The form of the specimen Series 2017 Bond (Exhibit C). 3. THE SERIES 2017 BONDS SHALL NOT BE A GENERAL OBLIGATION OF THE CITY BUT A LIMITED OBLIGATION PAYABLE SOLELY FROM THE AMOUNTS PAYABLE UNDER THE LEASE AGREEMENT AND OTHER REVENUES OF THE PROJECT. NEITHER THE CITY, THE COMMONWEALTH OF KENTUCKY NOR ANY OTHER POLITICAL SUBDIVISION OF THE COMMONWEALTH SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR INTEREST ON SUCH SERIES 2017 BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES OF THE PROJECT PLEDGED THEREFOR. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION OF THE COMMONWEALTH IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2017 BONDS OR OTHER COSTS INCIDENT THERETO. 4. DISBURSEMENT OF PROCEEDS OF SERIES 2017 BONDS. The Company and the City are authorized to carry out the procedure specified in the Bond Agreement for the supervision of the acquisition and construction of the 2017 Project and for the payment from time to time of the costs of such acquisition and construction and related expenses as same progresses. Page 3 of 10

4 5. REVENUES OF THE 2017 PROJECT. The revenues and other payments to be received by the City under the terms of the Lease Agreement are determined to be sufficient to pay the principal of and interest on the Series 2017 Bonds as the same become due and payable and all said payments and other payments received under the Lease Agreement and all other revenues arising out of or in connection with the Lease Agreement are hereby pledged to secure such payments and revenues, and in addition, for such other purposes as are more fully specified in the Bond Agreement. 6. EXECUTION OF SERIES 2017 BONDS. Each Series 2017 Bond shall be executed by the City in the manner provided in the Bond Agreement and shall be delivered to the Bondholder. 7. APPROVAL OF RELEASE OF PORTION OF THE REAL PROPERTY TO THE COMPANY. Under the lease agreement with respect to the Series 2003 Bonds (the 2003 Lease Agreement ), the Company has the right to cause the City to convey the Real Property back to it and to terminate the 2003 Lease Agreement, with the consent of CoBank the holder of the Series 2003 Bonds. The Company has requested that approximately 36 acres (the Released Property ) of the 55-acre Real Property be released to the Company. The Company has represented that the Released Property is not necessary to the operation of the 2003 Project or the 2017 Project and that CoBank, Series 2003 Bonds, will consent to the release. The City hereby approves the release and transfer to the Company of the Released Property, contingent upon the execution of an appropriate consent instrument by CoBank. The City hereby approves the execution and delivery of a deed from the City to the Company with respect to the Released Property. The City further approves the execution and delivery of an amendment to the lease agreement with respect to the 2003 Project to reflect the release and transfer of the Release Property from that lease agreement. 8. AUTHORIZATION OF APPLICATION TO KENTUCKY ECONOMIC DEVELOPMENT FINANCE AUTHORITY. To the extent the Company requests the City s assistance in applying to the Kentucky Economic Development Finance Authority ( KEDFA ) for a reduction in state ad valorem taxes on the 2017 Project under KRS , the City agrees to submit a joint application to KEDFA for such reduction and to otherwise assist the Company in pursuing such benefits for the 2017 Project. 9. MAYOR AND OTHER OFFICIALS OF CITY TO TAKE ANY OTHER NECESSARY ACTION. Pursuant to the Constitution and laws of the Commonwealth of Kentucky, the Mayor, the Clerk/Treasurer and all other appropriate officials of the City are hereby authorized and directed to take any and all further action and to execute and deliver all other documents as may be necessary to effect the issuance and delivery of the Series Page 4 of 10

5 2017 Bonds, the Lease Agreement, the Bond Agreement, the application to KEDFA for a reduction in state ad valorem taxes on the 2017 Project under KRS and the transfer of the Released Property to the Company. 10. SEVERABILITY CLAUSE. If any section, paragraph, clause or provision of this Ordinance shall be ruled by any court of competent jurisdiction to be invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the remaining provisions hereof. 11. CAPTIONS OF CLAUSE. The captions of this Ordinance are for convenience only and are not to be construed as part of this Ordinance nor as defining or limiting in any way the scope or intent of the provisions hereof. To the extent any resolution, ordinance or part thereof is in conflict, the provisions of this Ordinance shall prevail. 12. EFFECTIVE DATE OF ORDINANCE. This Ordinance shall take effect from and after its adoption, approval and publication of Notice of Passage hereof, including the title of this Ordinance, which publication is hereby approved by the Clerk/Treasurer pursuant to KRS 83A.060(9) and KRS ORDINANCE COMMONWEALTH AGRI-ENERGY BOND 2017 PROJECT PUBLICLY READ AND PASSED FIRST TIME: PUBLICLY READ AND PASSED SECOND TIME: APPROVED: Carter M. Hendricks Mayor ATTEST: Christine F. Upton, MMC City Clerk (Seal of Issuer) Page 5 of 10

6 I, Christine F. Upton, hereby certify that I am the duly appointed and qualified City Clerk of the City of Hopkinsville, Kentucky, that the foregoing is a true copy of an Ordinance duly enacted by the City Council of said Issuer, signed by the Mayor of said Issuer, and attested under seal by me as City Clerk, at a properly convened term and session of said City Council, held on, 2017, as shown by official records in my custody and under my control, that Notice of Passage of said Ordinance has been ordered to be published as required by law (KRS 83A.060(9) and KRS ), that said Ordinance appears as a matter of public record in the City Clerk s Office that attached hereto are true copies of the documents approved therein, and that copies of such documents have also been duly filed and recorded in the official records of the City. IN WITNESS WHEREOF, I have hereto set my hand as City Clerk and the Seal of the Issuer this day of, Christine F. Upton, MMC City Clerk (Seal of Issuer) Page 6 of 10

7 CERTIFICATION I, Christine F. Upton, City Clerk of the City of Hopkinsville, Kentucky, do hereby certify that the foregoing is a true, correct copy of Ordinance No , relating to the issuance of the City of Hopkinsville, Kentucky Industrial Building Revenue Bonds, Series 2017 (Commonwealth Agri-Energy, LLC Project), enacted by the City Council of the City of Hopkinsville at its meeting held on, 2017, and is in full force and effect. Witness my hand this day of, Christine F. Upton, MMC City Clerk Page 7 of 10

8 EXHIBIT A FORM OF LEASE AGREEMENT Page 8 of 10

9 EXHIBIT B FORM OF BOND AGREEMENT Page 9 of 10

10 EXHIBIT C SPECIMEN BOND v4 Page 10 of 10