NOTE: We do not normally publish Public Notices in the Opinion Section of GrenadaStar.com, but we feel this one deserves some special attention as it obligates taxpayers to pay back a great deal of money. If you run a standard amortization table for a $6 million loan at 11% for 19 years, the total payback will be $14,329,306, including $8,329,306 in interest. A bond financial table may not total quite the same as our figures, but no matter the exact figures, the cost will be high.
For your convenience, we have marked some of the more interesting items in color.
(See related Editorials.)
NOTICE OF BOND SALE
$6,000,000 GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS, SERIES 2019
CITY OF GRENADA, MISSISSIPPI
NOTICE IS HEREBY GIVEN that the Mayor and City Council of the City of Grenada, Mississippi (the “Governing Body” of the “Municipality”) will receive sealed bids for the purchase in its entirety, at not less than par and accrued interest to the date of delivery thereof, of an issue of Six Million Dollars ($6,000,000) General Obligation Public Improvement Bonds, Series 2019, of the Municipality (the “Bonds”) on August 12, 2019, until the hour of 4:00 p.m., and such bids should be delivered to the City Clerk at her office in the City Hall of the Municipality located 108 South Main Street in the Municipality. The City Clerk will act on behalf of the Governing Body to receive bids at the aforesaid date, time, and place. Immediately following said time on said date, said bids will be publicly opened and read, for consideration by the Governing Body at their regular meeting at 6:00 p.m. on said date. All bids will be remain firm for four (4) hours after the time specified for the opening of bids, and an award of the Bonds, or rejection of bids, will be made by the Governing Body within said period of time.
THE BONDS: The Bonds will be registered as to both principal and interest; will be dated and bear interest from September 1, 2019; will be delivered in definitive form as registered bonds; will be issued in the denomination of Five Thousand Dollars ($5,000) each, or integral multiples thereof up to the amount of a single maturity; will be numbered from one (1) upward in the order of issuance; will be payable as to principal at a bank or trust company to be named by the Governing Body in the manner hereinafter provided; and will bear interest from the date thereof, payable on March 1, 2020, and semiannually thereafter on March 1 and September 1 of each year, at the rate or rates offered by the successful bidder in its bid in accordance with this Notice of Bond Sale (the “Notice”).
MATURITIES: The Bonds will mature serially, with option of prior payment, on March 1 in each of the years and amounts as follows:
REDEMPTION: Bonds maturing after March 1, 2029, are subject to redemption prior to their respective maturities at the election of the Municipality on and after March 1, 2028, either in whole or in part on any date, with the maturities and principal amounts thereof to be determined by the Municipality, at the principal amount thereof together with accrued interest to the date fixed for redemption. Notice of each such redemption shall be mailed, postage prepaid, not less than thirty (30) days prior to the redemption date, to all Registered Owners of the Bonds to be redeemed at their addresses as they appear on the registration books of the Municipality kept by the Paying Agent.
AUTHORITY AND SECURITY: The Bonds will be issued pursuant to the provisions of Sections 21-33-301 et seq., Mississippi Code of 1972, as amended (the “Act”), and the resolution authorizing and directing the issuance of the Bonds adopted by the Governing Body of the Municipality on May 13, 2019 (the “Bond Resolution”), and will be general obligations of the Municipality payable as to principal and interest out of and secured by an irrevocable pledge of the avails of a direct and continuing tax to be levied annually without limitation as to rate or amount upon the taxable property within the geographical limits of the Municipality. To the extent other moneys are not available, the Municipality will levy annually a direct and continuing tax upon all taxable property within the geographical limits of the Municipality, which tax, together with any other moneys available for such purpose, will be adequate and sufficient to provide for the payment of the principal of and the interest on the Bonds as the same falls due.
PURPOSE: The Bonds are being issued to provide funds for the purpose of erecting municipal buildings, armories, auditoriums, community centers, gymnasiums and athletic stadiums, preparing and equipping athletic fields, and purchasing buildings or land therefor, and for repairing, improving, adorning and equipping the same, and for erecting, equipping and furnishing of buildings to be used as a municipal or civic art center; erecting or purchasing waterworks, gas, electric and other public utility plants or distribution systems or franchises, and repairing, improving and extending the same; establishing sanitary, storm, drainage or sewerage systems, and repairing, improving and extending the same; protecting the municipality, its streets and sidewalks from overflow, caving banks and other like dangers; constructing, improving or paving streets, sidewalks, driveways, parkways, walkways or public parking facilities, and purchasing land therefor; purchasing land for parks, cemeteries and public playgrounds, and improving, equipping and adorning the same, including the constructing, repairing and equipping of other recreational facilities; constructing bridges and culverts; altering or changing the channels of streams and water courses to control, deflect or guide the current thereof; purchasing machinery and equipment which have an expected useful life in excess of ten (10) years (the “Authorized Purpose”).
FORM OF BIDS: Bids should be addressed to the Mayor and City Council of the Municipality and should be plainly marked “Bid for General Obligation Public Improvement Bonds, Series 2019, of the City of Grenada, Mississippi,” and should be filed with the City Clerk of the Municipality on or prior to 4:00 pm on August 12, 2019, in the City Hall of the Municipality located at 108 South Main Street in the Municipality. All bids should be submitted substantially in the form prepared by the Municipality. A copy of the Preliminary Official Statement and the Official Bid Form may be obtained from the Municipality.
INTEREST RATE AND BID RESTRICTIONS: The Bonds will not bear a greater overall maximum interest rate to maturity than eleven percent (11%) per annum, nor will the interest rate for any one maturity exceed eleven percent (11%) per annum. No Bond will bear more than one (1) rate of interest; each Bond will bear interest from its date to its stated maturity date at the interest rate specified in the bid; all Bonds of the same maturity will bear the same rate of interest from date to maturity; and the lowest interest rate specified will not be less than seventy percent (70%) of the highest interest rate specified. Each interest rate specified in any bid must be a multiple of one-eighth of one percent (1/8th of 1%) or one-tenth of one percent (1/10th of 1%) and a zero percent (0%) rate of interest cannot be named.
GOOD FAITH DEPOSIT: Each bid must be accompanied by a cashier’s check, certified check, or exchange, issued or certified by a bank located in the State of Mississippi, payable to the “Mayor and City Council of the City of Grenada, Mississippi,” in the amount of One Hundred Twenty Thousand Dollars ($120,000) as a guaranty that the bidder will carry out its contract and purchase the Bonds if its bid be accepted. All checks of unsuccessful bidders will be returned immediately on award of the Bonds. If the successful bidder fails to purchase the Bonds pursuant to its bid and contract, then the amount of such good faith check will be retained by the Municipality as liquidated damages for such failure. No interest will be allowed on the amount of the good faith deposit.
DTC BOOK-ENTRY: Unless specifically declined by the purchaser, the Bonds are being initially offered as registered in the name of Cede & Co., as Registered Owner and nominee for The Depository Trust Company, New York, New York (“DTC”) under DTC’s Book-entry system of registration. Purchasers of interests in the Bonds (the “Beneficial Owners”) will not receive physical delivery of bond certificates and ownership by the Beneficial Owners of the Bonds will be evidenced by book-entry. As long as Cede & Co. is the Registered Owner of the Bonds as nominee of DTC, payments of principal and interest will be made directly to such Registered Owner which will in turn remit such payments to the DTC participants for subsequent disbursement to the Beneficial Owners.
AWARD OF BONDS: The award, if any, will be made to the bidder complying with the terms of sale and offering to purchase the Bonds at the lowest net interest cost to the Municipality, which will be determined by computing the aggregate interest on the Bonds over the life of the issue at the rate or rates of interest specified by the bidder, less premium offered, if any. It is requested that each bid be accompanied by a statement of the net interest cost (computed to six (6) decimal places), but such statement will not be considered a part of the bid. All bids will remain firm for four (4) hours after the time specified for the opening of bids, and an award of the Bonds, or rejection of bids, will be made by the Governing Body within said period of time.
RIGHT OF REJECTION, CANCELLATION: The Governing Body reserves the right to reject any or all bids submitted, as well as to waive any irregularity or informality in any bid. The successful bidder will have the right, at its option, to cancel its agreement to purchase the Bonds if the Bonds are not tendered for delivery within sixty (60) days from the date of sale thereof, and in such event the Governing Body will return to said bidder its good faith deposit. The Governing Body will have the right, at its option, to cancel its agreement to sell the Bonds if within five (5) days after the tender of the Bonds for delivery the successful bidder will not have accepted delivery of and paid for the Bonds, and in such event the Governing Body will retain the successful bidder’s good faith deposit as liquidated damages as hereinabove provided.
PAYING AGENT, TRANSFER AGENT, AND REGISTRAR: The successful bidder may designate a bank or trust company located within the State of Mississippi to serve as paying agent (the “Paying Agent”) for the Bonds within forty-eight (48) hours of the date of sale of the Bonds, subject to the approval of the Governing Body. The Governing Body’s approval of the Paying Agent shall be contingent on a determination as to the willingness and ability of the Paying Agent to perform the duties of registrar and transfer agent and on the satisfactory negotiation of service fees. The Paying Agent shall be subject to change by order of the Governing Body under the conditions and in the manner provided in the Bond Resolution under which the Bonds are issued. Both principal of and interest on the Bonds will be payable by check or draft mailed to Registered Owners of the Bonds as of the fifteenth (15th) day of the month preceding the maturity date for such principal or interest payment at the addresses appearing in the registration records of the Municipality maintained by the Paying Agent. The Bonds will be transferable only upon the books of the Paying Agent, and payment of principal at maturity shall be conditioned on the proper presentation and surrender of the Bonds to the Paying Agent.
DELIVERY: The successful bidder must designate within thirty (30) days of the date of sale, or at such other later date as may be designated by the Governing Body, the names and addresses of the Registered Owners of the Bonds and the denominations in which the Bonds of each maturity are to be issued. If the successful bidder fails to submit such information within the required time, one Bond may be issued for each maturity in the full amount maturing on that date registered in the name of the successful bidder. The Bonds will be delivered at a place to be designated by the purchaser and without cost to the purchaser, and payment therefor will be made in immediately available funds.
CUSIP NUMBERS: Unless specifically declined by the purchaser, it is anticipated that CUSIP identification numbers will be printed on the Bonds, but neither the failure to print such number on any bond nor any error with respect thereto will constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds in accordance with the terms of the purchase contract. All expenses in relation to the printing of CUSIP numbers on the Bonds will be paid by the Municipality; the CUSIP Service Bureau charge for the assignment of said numbers will be the responsibility of and will be paid for by the purchaser.
LEGAL OPINION; CLOSING DOCUMENTS: The Bonds are offered subject to the unqualified approval of the legality thereof by Jones Walker LLP, Jackson, Mississippi (“Bond Counsel”). In the opinion of Bond Counsel, interest on the Bonds is exempt from federal and Mississippi income taxes under existing laws, regulations, rulings, and judicial decisions with such exceptions as will be described in the Official Statement for the Bonds. A copy of the opinion of Bond Counsel, together with the usual closing papers, including a no-litigation certificate dated the date of delivery of the Bonds, evidencing that no litigation is pending in any way affecting the legality of the Bonds or the taxes to be levied for the payment of the principal thereof and interest thereon, and a transcript of the proceedings relating to the Bonds will be delivered to the successful bidder without charge. The Municipality will pay for all legal fees and will pay for the printing and validation of the Bonds.
BONDS AS QUALIFIED TAX-EXEMPT OBLIGATIONS: The Municipality has designated the Bonds as qualified tax-exempt obligations within the meaning and for purposes of Section 265(b)(3) of the Code.
INFORMATION FROM PURCHASER: The winning bidder shall assist the Municipality in establishing the issue price of the Bonds and shall execute and deliver to the Municipality at closing an “issue price” or similar certificate setting forth the reasonably expected initial offer price to the public or the sales price or prices of the Bonds, together with the supporting prices wires or equivalent communications.
FURTHER INFORMATION: The Municipality has prepared a Preliminary Official Statement which it deems, for purposes of S.E.C. Rule 15c2-12, to be final and complete as of its date, except for the omission of the offering prices, interest rates, and any other terms of the Bonds depending on such matters, and the identity of the purchasers, subject to revision, amendment, and completion in a final Official Statement. By submission of its bid, the successful bidder will be deemed to have certified that it has obtained and reviewed the Preliminary Official Statement. Upon the award of the Bonds, the Municipality will publish an Official Statement in substantially the same form as the Preliminary Official Statement subject to minor additions, deletions, and revisions as required to complete the Preliminary Official Statement. The Municipality will furnish a satisfactory number of copies of the Official Statement to the successful bidder of the Bonds without charge within seven (7) business days after the award of the bid. The successful bidder must notify the Municipality in writing within five (5) business days of the award if the bidder requires additional copies of the Official Statement to comply with applicable regulations. The cost for such additional copies will be paid by the successful bidder requesting such copies. By submission of its bid, the successful bidder will be deemed to have agreed to supply to the Municipality all necessary pricing information and any purchaser identification determined by the Municipality to be necessary for the Official Statement within 24 hours after the award of the Bonds.
CONTINUING DISCLOSURE: In order to assist bidders in complying with S.E.C. Rule 15(c)2-12(b)(5), the Municipality will undertake, pursuant to the Bond Resolution and a Continuing Disclosure Agreement, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement. Failure of the Municipality to deliver the Continuing Disclosure Agreement at the time of issuance and delivery of the Bonds will relieve the successful bidder from its obligation to purchase the Bonds.
MUNICIPAL BOND INSURANCE: Pursuant to the Bond Resolution, the Governing Body has authorized prospective bidders to obtain, at their expense, municipal bond insurance to guarantee the payments of the principal of and interest on the Bonds, at the sole expense of the prospective bidder.
By order of the Mayor and City Council of the City of Grenada, Mississippi, on May 13, 2019.
/s/ Lois Freelon
July 30, 2019, and August 6, 2019