- Oxford School District
- Proclamations & Resolutions
MSBA Cash Flow
RESOLUTION OF THE BOARD OF TRUSTEES OF THE OXFORD SCHOOL DISTRICT AUTHORIZING AND AWARDING THE SALE OF THE OXFORD SCHOOL DISTRICT TAX AND REVENUE ANTICIPATION NOTE IN THE PRINCIPAL AMOUNT OF $5,283,676 ISSUED IN CONNECTION WITH THE MISSISSIPPI SCHOOL BOARDS ASSOCIATION CASH FLOW MANAGEMENT PROGRAM; FIXING THE FORM AND TERMS THEREOF; AND ENACTING OTHER PROVISIONS RELATING THERETO
WHEREAS, the Oxford School District (the “District”) anticipates a cash flow deficit in the District’s general maintenance fund during the 2017-2018 school year; and
WHEREAS, the Board of Trustees (the “Board”) of the District deems it necessary and in the best interests of the District that funds be borrowed pursuant to Section 37-59-37, Mississippi Code of 1972, as amended (the “Act”), to offset the anticipated cash flow deficit; and
WHEREAS, the District’s Superintendent has certified, or will certify on behalf of the District at or prior to closing, that the amount to be borrowed does not exceed the estimated amount of taxes and other revenues to be collected by or on behalf of the District during the 2017-2018 fiscal year; and
WHEREAS, there has been proposed the Mississippi School Boards Association Cash Flow Management Program (the “Program”) whereby participating school districts, by simultaneously issuing their tax and revenue anticipation notes and otherwise coordinating the determination of interest rate and purchase price, and other related actions, may be able to reduce their debt service and issuance costs below what could be achieved if they were issued separately; and
WHEREAS, the Program contemplates that each participating school district will enter into a Purchase Contract (the “Purchase Contract”) with Whitney Bank d/b/a Hancock Bank, Gulfport, Mississippi, as purchaser (the “Purchaser”), in substantially the form attached hereto as Exhibit “A”;
NOW, THEREFORE, be it resolved, adjudicated and determined, as follows:
Section 1.1. The Board deems it necessary and in the best interest of the District to participate in the Program and to issue its Tax and Revenue Anticipation Note (the “Note”) in the aggregate principal amount of $5,283,676. The Note shall at all times be registered in the name of the Purchaser or its assignee. The Note may be marketed and sold simultaneously with notes of any other school districts participating in the Program (collectively, the “Notes”).
Section 1.2. The Board hereby approves the form of the Purchase Contract in substantially the form attached hereto as Exhibit “A”. The Purchase Contract shall be executed in the name and on behalf of the District by the Superintendent with all such changes therein, not inconsistent with law, as may be approved by the Superintendent, which approval shall be conclusively evidenced by the execution thereof. The Superintendent is authorized to finalize and execute the Purchase Contract at any time that the Superintendent determines to be in the District’s best interest, prior to December 31, 2017. The District’s obligation to sell the Note to the Purchaser shall not be final and binding until the Superintendent executes the Purchase Contract. The terms of the Note shall be as set forth herein and in the executed Purchase Contract.
Section 2.1. Subject to the provisions of Section 1.2, the District contemplates that the Note Purchaser will enter into a Purchase Contract with the District pursuant to which the Purchaser will agree to purchase the District’s Note. The Purchase Contract will require the Purchaser to purchase the Note at a purchase price equal to 100% of the principal amount thereof and, except as otherwise set forth herein, the Note will bear interest from the date of issuance at a rate not to exceed 4.00% per annum, with the final rate to be approved by the District’s Superintendent of Schools in the executed Purchase Contract, payable at maturity or prepayment, and calculated on a 360-day year, consisting of twelve 30-day months. The Purchase Contract shall provide for the issuance of the Note on or about November 28, 2017, or such other date agreed to by the parties thereto. The Note shall at all times be registered in the name of the Purchaser or its assignee.
Section 2.2. Subject to the Superintendent’s authority to adjust the principal amount as provided below, the Note shall be in the aggregate principal amount of $5,283,676, shall be dated its date of issuance and shall mature on May 1, 2018. The Note shall be in registered form and may be issued in any denomination. The Superintendent is authorized to approve an adjustment to the principal amount of the Note prior to its delivery as long as such adjustment does not preclude the rendering of an approving legal opinion of bond counsel as to the legality thereof and the tax exempt status of interest thereon.
The principal amount of the Note, as finally determined, shall not exceed $5,283,676, but will also take into account the maximum permissible borrowing under the Act, the Internal Revenue Code of 1986, as amended, and IRS regulations thereunder, as well as costs of issuance.
In the event the District shall fail to pay the principal amount of its Note at maturity, the District’s Note shall remain outstanding in an amount equal to the amount not paid and shall bear interest from the maturity date on such unpaid portion, including all accrued and unpaid interest, until fully paid at a rate equal to the Whitney Bank d/b/a Hancock Bank published Prime Lending Rate plus two percent (2%) per annum, calculated on the basis of a 360-day year, consisting of twelve 30-day months, provided, however, that in no event will the interest exceed the maximum legally permitted interest rate.
If interest on the Note is determined not to be excludable from gross income for purposes of Section 103 and related provisions of the Internal Revenue Code of 1986, as amended, the Note shall bear interest from the date of such determination until maturity at the rate equal to the Whitney Bank d/b/a Hancock Bank published Prime Lending Rate plus two percent (2%) per annum.
If the Note is determined not to be a “bank qualified” obligation for purposes of Section 265(b) of the Internal Revenue Code of 1986, the Note shall bear interest from the date of such determination until maturity at the rate equal to the Whitney Bank d/b/a Hancock Bank published Prime Lending Rate plus two percent (2%) per annum.
The Note shall be subject to prepayment in whole or in part on any date at par plus accrued interest until the date of redemption.
Section 2.3. To the extent permitted by the Act, the taxes and other revenues collected by or on behalf of the District for the fiscal year July 1, 2017, to June 30, 2018, are hereby pledged to the full and prompt payment of the principal of and interest on the Note.
To the extent permitted under the Act, the Note is issued in anticipation of, and is primarily payable out of, the proceeds of taxes and other revenues collected by or on behalf of the District. The principal amount of the Note shall not exceed the estimated amount of taxes and other revenues to be collected by or on behalf of the District during the 2017-2018 fiscal year.
Section 2.4. The Board hereby authorizes and directs the issuance of the Note in substantially the form attached hereto as Exhibit “B” with changes therein not inconsistent with law, as may be approved by the Superintendent, which approval shall be conclusively evidenced by the execution thereof.
Section 2.5. Both the principal of and any interest on the Note shall be payable as the same shall fall due upon presentation and surrender at the main office of the District (the “Note Registrar”); provided, however, that no interest shall be payable for any period after maturity during which the owner of a Note fails to properly present such Note for payment.
Section 2.6. The Note shall be prepared under the direction of the Superintendent of the District, and when so prepared shall be executed on behalf of the District by the manual or facsimile signatures of the President of the Board and Superintendent of the District, or their designee. The Note shall originally be registered in the name of the Purchaser and prepared in typewritten form. When the Note shall have been so prepared and executed, it shall be delivered to the Purchaser in exchange for the purchase price and upon receipt of the signed legal opinion of Adams and Reese LLP, bond counsel. The Purchaser shall not be required to see to the proper application of the proceeds.
Section 2.7. As long as the Note issued hereunder shall remain outstanding, the District shall cause the Note registrar to keep at its principal corporate trust office a Register in which, subject to reasonable regulations as it may prescribe, the Note Registrar shall provide for the registration and transfer of the Note in accordance with this Note Resolution.
Section 3.1. The Superintendent and Board officers of the District are hereby authorized and directed to prepare and furnish to the Purchaser of the Note and to the attorneys approving the same, certified copies of all proceedings and records of the District relating to the power and authority of the District to issue said Note, and to execute and deliver the Purchase Contract and the other certifications as to matters within their knowledge or as shown by the books and records under their custody and control. Such certified copies and certificates shall be deemed representations of the District as to the facts stated therein. The officers of the District are further authorized to take all action and to sign all documents necessary to complete the issuance of the Note. The Superintendent is further authorized to approve in the Purchase Contract the payment of costs of issuing the Note in an amount not to exceed $4.75 per $1,000 in principal amount of the Note actually issued. The Purchaser is authorized to transmit the costs of issuance amount directly to the Mississippi School Boards Association, or its designee, for disbursement to pay issuance costs.
Section 3.2. The officers of the District are hereby authorized and directed to prepare and submit to the Secretary of the Treasury a statement meeting the information reporting requirements of Section 149(e) of the Code by the 15th day of the second calendar month after the close of the calendar quarter in which the Note is issued.
Section 3.3. The Note is hereby designated as a portion of the maximum of $10,000,000 of qualified tax-exempt obligations to be issued by the District during calendar year 2017, within the meaning and for the purposes of Section 265(b)(3) of the Code.
Section 3.4. The District hereby covenants that it will restrict the use of the proceeds of the Note in such manner and to such extent, if any, as may be necessary so that the Note will not constitute an arbitrage bond under Section 148 of the Code. The District further covenants that it (a) will take or cause to be taken all actions as may be required of it for the interest on the Note to be and remain excludable from gross income for federal income tax purposes, and (b) will not take or permit to be taken any actions which would adversely affect that exclusion, and that it, or any person acting for it, will, among other acts of compliance, (i) apply the Note proceeds to the governmental purpose of the borrowing, (ii) make timely rebate payments to the federal government if required, (iii) maintain books and records and make calculations and reports, and (iv) refrain from certain uses of Note proceeds, all in such manner and to the extent necessary to assure such exclusion of that interest under the Code. The Superintendent of the District and other appropriate officers are hereby authorized and directed to take any and all actions, make calculations and rebate payments, and make or give reports and certifications, as may be appropriate to assure such exclusion of that interest.
Approved on the 13th day of November, 2017.
GRAY EDMONDSON, BOARD PRESIDENT
BRIAN D. HARVEY, SUPERINTENDENT