Explanation
Background: This ordinance provides consent to the issuance of refunding bonds by the Franklin County Convention Facilities Authority (FCCFA) and authorizes the Mayor, City Auditor, or Director of Finance and Management to negotiate, execute, and deliver any documents necessary to evidence Council's consent and to effectuate the issuance of the refunding bonds by the FCCFA and restructuring of reserve funds by the FCCFA. The FCCFA is contemplating a current refunding of a portion of its Tax and Lease Revenue Anticipation Refunding Bonds, Series 2014 and a redemption by tender of a portion of its Tax and Lease Revenue Anticipation Refunding Bonds, Series 2020 (Federally Taxable). The FCCFA currently anticipates that the transaction will result in debt service savings.
Section 9.04 of the Lease and Section 9.03 of the Sub-Lease in connection with the outstanding bonds of the FCCFA require the City and the County to consent to the issuance of “Additional Bonds” so long as the Lease and Sub-Lease are in effect.
Emergency Justification: Emergency action is requested to allow the issuance of the refunding bonds to proceed as quickly as possible to allow the FCCFA to take advantage of favorable market conditions, resulting in debt service savings.
Fiscal Impact: No funding is required for this legislation.
Title
To provide consent to the issuance of tax and lease revenue anticipation refunding bonds by the Franklin County Convention Facilities Authority (FCCFA); to authorize the negotiation, execution, and delivery of documents of the City relating to the issuance of tax and lease revenue anticipation refunding bonds by the FCCFA; and to declare an emergency.
Body
WHEREAS, the City Council (the “Council”) of the City of Columbus, Ohio (the “City”) has heretofore found and hereby confirms that it is in the best interest of the residents of the City, and a proper public purpose of the government of the City, to promote and publicize the City as a desirable location for conventions, trade shows and similar events; and
WHEREAS, the Franklin County Convention Facilities Authority (the “FCCFA”) has been established by the Board of County Commissioners of the County of Franklin, Ohio (the “County”) pursuant to Chapter 351 of the Ohio Revised Code (the “Act”) as a body corporate and politic performing essential governmental functions, to, among other things, (a) acquire, purchase, construct, furnish, equip, lease or rent, and operate, “facilities”, as defined in the Act, within the County; and (b) issue obligations, from time to time, anticipating “revenues”, as defined in the Act, in such principal amounts as are necessary to pay any part of the “cost” of such facilities, as defined in the Act; and
WHEREAS, pursuant to Ordinance 1188-90 passed by this Council on May 7, 1990, the City has entered into a Lease Agreement dated as of June 1, 1990 (as the same has been amended and supplemented from time to time, the “Lease”) from the FCCFA, as lessor, to the County and the City, as lessees and tenants in common, with respect to the convention facility known as “The Greater Columbus Convention Center” (the “Facility”); and
WHEREAS, pursuant to Ordinance 1189-90 passed by this Council on May 7, 1990, the City has entered into a Sub-Lease Agreement dated as of June 1, 1990 (as the same has been amended and supplemented from time to time, the “Sub-Lease”) from the City and the County, as lessors, to the FCCFA, as lessee, with respect to the Facility, providing for rental payments from the FCCFA which are to be used as a source for the City’s “Lessees Rent” payments under the Lease; and
WHEREAS, the Facility was financed and refinanced in part with the proceeds of tax and lease revenue anticipation bonds of the FCCFA issued from time to time, including its $160,140,000 Tax and Lease Revenue Anticipation and Refunding Bonds, Series 2014 dated December 1, 2014 (the “Series 2014 Bonds”), which are secured by a Trust Agreement dated as of June 1, 1990, as amended and supplemented to date (the “Indenture”), which Indenture includes a pledge of any “Lessees Rent” paid by the County and the City pursuant to the Lease; and
WHEREAS, the Series 2014 Bonds were partially refunded through the issuance by the FCCFA of its $196,005,000 Tax and Lease Revenue Anticipation Refunding Bonds, Series 2020B - Taxable (Federally Taxable) dated September 22, 2020 (the “Series 2020 Bonds”), the proceeds of which were also used to refund a portion of each of the Tax and Lease Revenue Anticipation Refunding Bonds, Series 2015 dated October 15, 2015, and Tax and Lease Revenue Anticipation Refunding Bonds, Series 2017 dated October 15, 2017, which Series 2020 Bonds are secured by the Indenture; and
WHEREAS, certain of the Series 2014 Bonds and certain of the Series 2020 Bonds are currently subject to optional redemption by the FCCFA and/or redemption by the FCCFA by soliciting bondholders to tender their Series 2020 Bonds back to FCCFA for purchase and cancellation; and
WHEREAS, the FCCFA is proposing to issue its Tax and Lease Revenue Anticipation Refunding Bonds, Series 2024 as federally taxable bonds, tax-exempt bonds or a combination thereof, in one or more series, and in a principal amount not to exceed $228,000,000 (the “Refunding Bonds”), as “Additional Bonds” pursuant to the Indenture for the purpose of (i) refunding and redeeming all or a portion of the outstanding Series 2014 Bonds, (ii) refunding and redeeming and/or paying the tender price of all or a portion of the Series 2020 Bonds, (iii) combining and restructuring the existing Rental Reserve Fund and existing Debt Service Reserve Fund into a single, new reserve fund (the “New Reserve”), and funding such New Reserve, or any existing reserve funds, as necessary, and (iv) paying costs of issuance in connection therewith; and
WHEREAS, the issuance of the Refunding Bonds will achieve interest cost savings which will benefit the FCCFA, the City, the County and their respective citizens and taxpayers; and
WHEREAS, Section 9.04 of the Lease and Section 9.03 of the Sub-Lease require the City and the County to consent to the issuance of “Additional Bonds” so long as the Lease and Sub-Lease are in effect, and this Council desires to authorize such consent with respect to the Refunding Bonds and creation of the New Reserve, on the condition that any additional documentation needed and executed in connection therewith will be subject to the City’s review and consent; and
WHEREAS, an emergency exists in the offices of the City Auditor and Department of Finance and Management in that the timely issuance of the Refunding Bonds will allow the FCCFA to take advantage of favorable market conditions in issuing the Refunding Bonds, which will result in savings that inure to the benefit of the City, its taxpayers and its citizens and therefore, the passage of this ordinance is necessary for the immediate preservation of the public peace, property, health or safety; Now, Therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS, OHIO:
SECTION 1. The Council hereby gives its consent, as required by Section 9.04 of the Lease and Section 9.03 of the Sub-Lease, to the issuance of the Refunding Bonds as proposed herein. The Mayor, City Auditor and Director of Finance and Management, or any of them acting singly, are hereby authorized to negotiate, execute and deliver such documents as are necessary to evidence Council’s consent and effectuate the issuance of the Refunding Bonds and the creation of the New Reserve, as the same shall be approved by the City Attorney to conclusively evidence such approval.
SECTION 2. In order to comply with Rule 15c2-12 of the Securities and Exchange Commission, the Director of Finance and Management and the City Auditor, or either of them individually, are hereby authorized to execute and deliver, for the benefit of the bondholders, a continuing disclosure agreement (the “Continuing Disclosure Agreement”) in connection with the issuance of the Refunding Bonds in such form as is approved by the officer executing such certificate, as necessary to assist the purchaser of the Additional Bonds in complying with Rule 15c2-12(b)(5) adopted by the Securities Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. The approval of such Continuing Disclosure Certificate shall be conclusively evidenced by the execution of such certificate by the City Auditor or Director of Finance and Management. This Council hereby covenants that the City will comply with the provisions of the Continuing Disclosure Agreement, provided that failure to comply shall not constitute a default on the Refunding Bonds. Any holder of the Refunding Bonds may take such action as may be necessary and appropriate, including seeking specific performance, to cause the City to comply with its obligations under this section and the Continuing Disclosure Agreement.
SECTION 3. It is hereby found and determined that all formal actions of this Council concerning and relating to the passage of this ordinance were passed in an open meeting of this Council, and that all deliberations of this Council and of any of its committees that resulted in such formal action, were in meetings open to the public, in compliance with the law, including Section 121.22 of the Ohio Revised Code.
SECTION 4. In accordance with Section 22 of the Charter of the City of Columbus, Ohio, and for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and immediately after its passage and approval by the Mayor, or ten (10) days after passage if the Mayor neither approves nor vetoes the same.