WHEREAS, the Town Board (the “Governing Body”) hereby finds and determines that it is necessary, desirable and in the best interest of the Town of Thornapple, Rusk County, Wisconsin (the “Issuer”) to raise funds for the purpose of:
Renew non revolving line of credit (the “Borrowing Purpose”); and
WHEREAS, the Governing Body hereby finds and determines that the Borrowing Purpose is within the Issuer’s power to undertake and therefore serves a “public purpose” as that term is defined in Section 67.04(1)(b) of the Wisconsin Statutes; and
WHEREAS, the Issuer is authorized by the provisions of Section 67.12(12) of the Wisconsin Statutes to borrow money and issue general obligation promissory notes for such public purposes.
NOW, THEREFORE, BE IT RESOLVED by the Governing Body of the Issuer that:
SECTION 1. AUTHORIZATION OF THE NOTE. For the purpose of paying the cost of the Borrowing Purpose, there shall be borrowed pursuant to Section 67.12(12) of the Wisconsin Statutes, the principal sum of $500,000.00 from Forward Bank (the “Lender”) in accordance with the terms set forth herein.
SECTION 2. ISSUANCE OF THE NOTE. To evidence such indebtedness, the Chairperson and the Clerk are hereby authorized, empowered and directed to make, execute, issue and deliver to the Lender for, on behalf of and in the name of the Issuer, a general obligation promissory note aggregating the principal amount of $500,000.00 (the “Note”).
SECTION 3. TERMS OF THE NOTE. The Note shall be designated “General Obligation Promissory Note”; shall be dated the date of its issuance; shall bear interest at the rate of 3.820% per annum; and shall be payable as follows:
Borrower will pay this loan in one principal payment of $500,000.00 plus interest on July 3, 2020. This payment due on July 3, 2020, will be for al principal and all accrued interest not yet paid. In addition, Borrower will pay regular quarterly payments of all accrued unpaid interest due as of each payment date, beginning October 3, 2019, with all subsequent interest payments to be due on the same day of each quarter after that.
Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method.
SECTION 4. PREPAYMENT PROVISIONS. The Note shall not have prepayment privileges.
SECTION 5. FORM OF THE NOTE. The Note shall be issued in registered form and shall be attached hereto and incorporated herein by this reference.
SECTION 6. DIRECT ANNUAL IRREPEALABLE TAX LEVY. For the purpose of paying the principal of and interest on the Note as the same becomes due, the full faith, credit and resources of the Issuer are hereby irrevocably pledged, and a direct annual irrepealable tax is hereby levied upon all taxable property of the Issuer. Said direct annual irrepealable tax shall be levied in the years and amounts as follows:
| Levy Year 2020 | Amount $500,000.00 |
The aforesaid direct annual irrepealable tax hereby levied shall be collected in addition to all other taxes in the same manner and at the same time as other taxes of the Issuer levied in said years are collected. So long as any part of the principal of or interest on the Note remains unpaid, the tax herein above levied shall be and continues irrepealable except tha the amount of tax carried onto the tax roll may be reduced in any year by the amount of any surplus in the Debt Service Fund Account created herein. If at any time there shall be on hand insufficient funds from the aforesaid tax levy to meet principal and/or interest payments on the Note when due, the requisite amount shall be paid from other funds of the Issuer then available, which sums shall be replaced upon the collection of the taxes therein levied.In the event the Issuer exercises its prepayment privilege, if any, then no such direct annual tax shall be included on the tax rolls for the prepayments made and the amount of direct annual tax hereinabove levied shall be reduced accordingly for the year or years with respect to which said note was prepaid.
SECTION 7. DEBT SERVICE FUND ACCOUNT. There is hereby established in the Issuer’s treasury a fund account separate and distinct from every other Issuer fund or account designated “Debt Service Fund Account for $500,000.00 General Obligation Promissory Note.” Such fund shall be maintained in accordance with generally accepted accounting practices. There shall be deposited in said fund account any premium plus accrued interest paid on the Note at the time of delivery to the Lender, all money or funds raised by taxation pursuant to Section 6 hereof and all other sums as may be necessary to pay interest on the Note when the same shall become due and to retire the principal installments on the Note. Said fund account shall be used for the sole purpose of paying the principal of and interest on the Note and shall be maintained for cush purpose until such indebtedness is fully paid or otherwise extinguished. Sinking funds established for obligations previously issued b the Issuer may be considered as separate and distinct accounts within the Debt Service Fund Account.
SECTION 8. SEGREGATED BORROWED MONEY FUND. The proceeds of the Note (the “Note Proceeds”) (other than any premium and accrued interest which must be paid at the time of the delivery of the Note into the Debt Service Fund Account created above) shall be deposited into an account separate and distinct from all other funds and be disbursed solely for the purposes for which borrowed or for the payment for the principal of and the interest on the Note.
SECTION 9. ARBITRAGE COVENANT. The Issuer shall not take any action with respect to the Note Proceeds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken on the date of the delivery of and payment for the Note (the “Closing”), would cause the Note to be an “arbitrage bond” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the “Code”) and any income tax regulations promulgated thereunder (the “Regulations”).
The Note Proceeds may be temporarily invested in legal investments until needed, provided however, that the Issuer hereby covenants and agrees that so long as the Note remains outstanding, moneys on deposit in any fund or account created or maintained in connection with the Note, whether such moneys were derived from the Note Proceeds or from any other source, will not be used or invested in a manner which would cause the Note to be an “arbitrage bond” within the meaning of the Code or regulations.
The Clerk, or other officer of the Issuer charged with responsibility for issuing the Note, shall provide appropriate certifications of the Issuer, for inclusion in the transcript of proceedings, setting forth the reasonable expectations of the Issuer regarding the amount and use of the Note Proceeds and the facts and estimates on which such expectations are based, all as of the Closing.
SECTION 10. ADDITIONAL TAX COVENANTS: EXEMPTION FROM REBATE: QUALIFIED TAX-EXEMPT OBLIGATION STATUS. The Issuer hereby further covenants and agrees that it will take all necessary steps and perform all obligations required by the Code and Regulations (whether prior to or subsequent to the Issuance of the Note) to assure that the Note is an obligation described in Section 103(a) of the Code, the interest on which is excluded from gross income for federal income tax purposes, throughout its term. The Clerk or other officer of the Issuer charged with the responsibility of issuing the Note, shall provide appropriate certifications of the Issuer as of the Closing, for inclusion in the transcript of proceedings, certifying that it can and covenanting that it will comply with the provisions of the Code and Regulations.
Further, it is the intent of the Issuer to take all reasonable and lawful actions to comply with any new tax laws enacted so that the Note will continue to be an obligation described in Section 103(a) of the Code, the interest on which is excluded from gross income for federal income tax purposes.
For Note Proceeds allocable to a Borrowing Purpose for new projects or acquisitions, the Issuer reasonably expects to:
☒ qualify for the small issuer rebate exception because it (included any entities subordinate to the Issuer) will issue no more than $5,000,000 of tax-exempt obligations (including the Note(s)) during the current calendar year.
☐ qualify for the eighteen month rebate exception under Section 1.148(d) of the Regulations.
☐ qualify for the two-year rebate exception under Section 148(f)(4) of the Code.
☐ not qualify for an exception to rebate.
The Issuer hereby designates the Note to be a “qualifier tax-exempt obligation” pursuant to the provisions of Section 265(b)(3) of the Code and in support of such designation, the Clerk or other officer of the Issuer charged with the responsibility for issuing the Note, shall provide appropriate certifications of the Issuer, all as of the Closing.
SECTION 11. EXECUTION OF THE NOTE. The Note shall be prepared in typewritten form, executed on behalf of the Issuer by the manual or facsimile signatures of the Chairperson and Clerk, sealed with its official or corporate seal thereof, if any, and delivered to the Lender upon payment to the Issuer of the purchase price thereof, plus accrued interest to the date of delivery; provided that, if this is a refinancing, the refunding Note shall be immediately exchanged for the note being refinanced. In the event that either of the officers whose signatures appear on the Note shall cease to be such officers before the delivery of the Note, such signatures shall nevertheless be valid and sufficient for all purposes to the same extent as if they had remained in office until such delivery. The aforesaid officers are hereby authorized to do all acts and execute all documents as may be necessary and convenient for effectuating the Closing.
SECTION 12. PAYMENT OF THE NOTE. The principal of and interest on the Note shall be paid by the Clerk or Treasurer in lawful money of the United States.
SECTION 13. REGISTRATION AND TRANSFER OF NOTE. The Clerk shall keep records for the registration and for the transfer of the Note. The person in whose name the Note shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of either principal or interest on the Note shall be made only to the registered owner thereof. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums so paid. The Note may be transferred by the registered owner thereof by presentation of the Note at the office of the Clerk, duly endorsed for the transfer or accompanied by an assignment duly executed by the registered owner or his legal representative duly authorized in writing. Upon such presentation, the Note shall be transferred by appropriate entry in the registration records and a similar notation, including date of registration, name of new registered owner and signature of the Clerk, shall be made on such note.
SECTION 14. CONFLICTING RESOLUTIONS: SEVERABILITY: EFFECTIVE DATE. All prior resolutions, rules or other actions of the Issuer or any parts thereof in conflict with the provisions hereof shall be, and the same are, hereby rescinded insofar as the same may so conflict. In the event that any one or more provisions hereof shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions hereof. The foregoing shall take effect immediately upon adoption and approval in the manner provided by law.
SECTION 15. FINANCIAL REPORTS. Officials of the Issuer are hereby authorized and directed, so long as the Note is outstanding, to deliver to Lender any audit statement or other financial information Lender may reasonably request and to discuss its affairs and finances with Lender.
Adopted and recorded this 16th day of April, 2019.