RESOLUTION NO 115-09

 

WEST MIFFLIN SANITARY SEWER MUNICIPAL AUTHORITY

RESOLUTION AMENDING AND RESTATING THE RESOLUTION

ADOPTED ON OCTOBER 9, 2008

APPROVING AN AMENDMENT TO THE

INTEREST RATE MANAGEMENT PLAN

AND AUTHORIZING AN AMENDMENT TO THE

QUALIFIED INTEREST RATE MANAGEMENT AGREEMENT PURSUANT THERETO

ADOPTED JANUARY 8, 2009.

 

APPROVING AN AMENDMENT TO THE INTEREST RATE MANAGEMENT PLAN; AUTHORIZING AN AMENDMENT TO THE INTEREST RATE MANAGEMENT AGREEMENT RELATING TO ITS SEWER REVENUE BONDS, SERIES OF 1998; RATIFYING THE AUTHORIZATION OF THE PROPER OFFICERS OF THE AUTHORITY TO EXECUTE AND DELIVER THE AMENDED INTEREST RATE MANAGEMENT AGREEMENT; COVENANTING TO PAY THE PERIODIC SCHEDULED PAYMENTS DUE FROM THE AUTHORITY UNDER THE AMENDED INTEREST RATE MANAGEMENT AGREEMENT; RETAINING AN INDEPENDENT FINANCIAL ADVISOR; AND RATIFYING THE AUTHORIZATION OF THE EXECUTION AND DELIVERY OF OTHER NECESSARY DOCUMENTS AND THE TAKING OF OTHER NECESSARY ACTIONS IN CONNECTION WITH THE FOREGOING.

 

            WHEREAS, the Authority previously appointed Municipal Government Investors Corporation (“mGIC”) as its independent financial advisor (the “Financial Advisor”); said Financial Advisor has prepared an Interest Rate Management Plan (the “Plan”) in order to better manage the Authority’s interest costs relating to the $28,470,000 portion of the $28,935,000 outstanding principal amount of its Sewer Revenue Bonds, Series of 1998, (the “Bonds”); and

 

            WHEREAS, the Plan sets forth an analysis of the risks associated with entering into a Swap Agreement, as hereinafter described, as well as criteria for the selection of a Counterparty and the Authority has been advised that it is in its best financial interest to enter into the Swap Agreement that meets the parameters set forth in the Plan; and

 

WHEREAS, on April 26, 2005, the Authority adopted a Resolution which approved the Authority to enter into a qualified interest rate management agreement with Wachovia Bank, National Association (“Wachovia”) and Schedule thereto dated as of May 12, 2005 (the “Master Agreement”), as supplemented by a Swap Transaction Confirmation executed by Wachovia and the Authority dated May 12, 2005 (the “2005 Confirmation” and together with the Master Agreement, the “Original Swap Agreement”); and

 

            WHEREAS, on September 28, 2006, the Authority adopted a Resolution which approved the execution by the Authority of an Amended and Restated Swap Transaction Confirmation which amended and restated the 2005 Confirmation  with Wachovia, dated September 29, 2006 (the “2006 Confirmation”); and

 

            WHEREAS, on September 6, 2007, the Authority adopted a Resolution which approved the execution by the Authority of an Amended and Restated Swap Transaction Confirmation which amended and restated the 2006 Confirmation with Wachovia dated September 11, 2007 (the “2007 Confirmation”); and

 

            WHEREAS, the amended Plan (the “Amended Interest Rate Management Plan”) proposes that the Authority enter into, and the Authority has entered into, an Amended and Restated Swap Transaction Confirmation, which amended and restated the 2007 Confirmation, dated October 10, 2008 (the “2008 Confirmation”) relating to the Original Swap Agreement and the Authority has been advised by the Financial Advisor that it is in its best financial interest to enter into the 2008 Confirmation with Wachovia, a financial institution with a credit rating in one of the two highest rating categories of Moody's Investors Service or Standard & Poor's, without regard to qualifiers, numerical or otherwise (the “Counterparty”) that meets the parameters set forth in the Plan with respect to the Bonds, which Original Swap Agreement, as amended and supplemented by the 2008 Confirmation, constitutes a Qualified Interest Rate Management Agreement; and

 

            WHEREAS, the Original Swap Agreement as previously amended and supplemented and as amended and supplemented by the 2008 Confirmation shall be referred to herein as the “Swap Agreement”.

 

            WHEREAS, the Authority hereby ratifies the Amended Interest Rate Management Plan, which is attached hereto and made a part hereof as Appendix I, ratifies the authorization of the execution and delivery of the 2008 Confirmation and such other documents as shall be necessary or appropriate in connection therewith in order to change the effective date of the Original Swap Agreement  as amended and supplemented by the 2007 Confirmation from October 1, 2008 until October 1, 2009, pursuant to the terms of the 2008 Confirmation.

 

            NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE WEST MIFFLIN SANITARY SEWER MUNICIPAL AUTHORITY AS FOLLOWS:

 

            1.         Appointment of Financial Advisor; Adoption of the Interest Rate Management Plan.  The Authority hereby reappoints mGIC as its Financial Advisor and hereby adopts and approves the Amended Interest Rate Management Plan prepared and recommended by the Financial Advisor, subject to such modifications from time to time as the General Manager, Chairman of the Board of Directors, the Financial Advisor, Bond Counsel and Solicitor to the Authority shall approve.  The Financial Advisor is hereby determined to be independent of the other parties to any transaction that may occur pursuant to the Amended Interest Rate Management Plan.  The Authority further reappoints HT Capital Markets A Division of Northeast Securities, Inc. as its Swap Structuring Agent.

 

*          2.         Selection of the Counterparty.  The Authority had previously awarded the Original Swap Agreement to the Counterparty for the basis swap transaction, effective May 12, 2005, pursuant to the terms and conditions of the 2005 Confirmation, which was further amended and restated to enter into the constant maturity swap transaction on September 29, 2006, pursuant to the 2006 Confirmation, which was to be to be effective on October 1, 2007.  The Financial Advisor was then authorized and directed to negotiate with the Counterparty, in order to amend the Original Swap Agreement, as amended and supplemented by the 2006 Confirmation, to be effective on October 1, 2008, pursuant to the terms and conditions of the 2007 Confirmation.  The Financial Advisor is now authorized and directed to negotiate with the Counterparty, in order to amend the Original Swap Agreement, as amended and supplemented by the 2007 Confirmation, to be effective on October 1, 2009, pursuant to the terms and conditions of the 2008 Confirmation.

 

            3.         Ratification of the Swap Agreement and 2008 Confirmation.  In order to manage interest rate risks or costs to the Authority relative to the Bonds, the proper officers of the Authority, as set forth in paragraph 4 below, hereby ratifies the authorization provided by the Authority’s Resolution of October 9, 2008 to execute and deliver the 2008 Confirmation.  The Swap Agreement is hereby ratified and approved:  (i) the notional amount subject to the Swap Agreement shall not exceed the outstanding principal amount of the Bonds to which it relates; (ii) the term of the Swap Agreement shall take effect on October 1, 2009 and end in August 1, 2028; (iii) the net effect of the Original Swap Agreement, as previously amended and supplemented, pursuant to the terms and conditions of the 2008 Confirmation, will be that the Counterparty shall be obligated to pay an amount equal to a percentage of the 5 year London Inter-Bank Offered Rate (“LIBOR”) Index of 59.91%, multiplied by the notional amount of the Swap Agreement, as reflected by the outstanding principal amount of the Bonds, at the time in question, as set forth in the Amended Interest Rate Management Plan, at the times and in the manner set forth in the Swap Agreement; (iv) the net effect of the Original Swap Agreement, as previously amended and supplemented, pursuant to the terms and conditions of the 2008 Confirmation, shall obligate the Authority to pay an amount equal to the average monthly Securities Industry and Financial Markets (“SIFMA”) Index multiplied by the respective notional amount of the Bonds at the times and in the manner set forth in the Swap Agreement; and (v) both parties may be required to make certain additional payments to the extent required under the Swap Agreement, however, periodic scheduled payments payable by the Authority pursuant to the Swap Agreement shall be senior in right and priority of payment to termination payments which may become due under the Swap Agreement.

 

            The Authority hereby determines that the Swap Agreement is in the Authority's best financial interest and that it contains financial terms and conditions which the Authority has been advised by the Financial Advisor are fair and reasonable.

 

            In order to manage interest rate risks or costs to the Authority relative to the Bonds and to provide for the provisions that are required to be in the Swap Agreement, the Authority hereby ratifies the approval of the 2008 Confirmation which is attached hereto and made a part hereof as Appendix II, which extends the effective date of the Swap Agreement, pursuant to the terms of the 2008 Confirmation from October 1, 2008 to October 1, 2009 and reduces the amount that the Counterparty shall be obligated to pay to an amount equal to a percentage of the 5 year London Inter-Bank Offered Rate (“LIBOR”) Index to 59.91%, multiplied by the notional amount provided for in the Swap Agreement, as reflected by the outstanding principal amount of the Bonds.

 

            4.         Execution and Delivery of Documents.   The actions of the Chairman, Vice Chairman or Treasurer of the Authority are hereby ratified and they were and are authorized to execute and deliver, in the name of the Authority and on its behalf, the following documents and to approve the final form and substance thereof, and any amendments or supplements thereto, and to approve the exact notional amount, term and interest rates under the Swap Agreement (subject to Paragraph 3 above), such approvals are hereby ratified and are conclusively evidenced by the execution thereof (including such amendments as may be required to assure compliance with the law), and the actions of the Secretary or Assistant Secretary/Treasurer are ratified and they are  hereby authorized to affix to all of the following documents the seal of the Authority and to attest to the same, as necessary:

 

            (a)        The 2008 Confirmation; and

 

            (b)        such other documents, agreements, instruments and certifications, as the executing officers determine to be reasonable and appropriate to provide for the amendment to the Swap Agreement, including the 2008 Confirmation as authorized by this Resolution.

 

            Copies of the foregoing documents, together with the other documents relating to the transactions authorized hereby, in final form as executed and delivered by the parties thereof, shall be filed in the official records of the Authority.

 

            The actions of the General Manager of the Authority are hereby ratified and the General Manager of the Authority was authorized to accept the final pricing of the Amended Swap Agreement subject to the requirements of Paragraph 3 which are that the Counterparty shall be obligated to pay an amount equal to a percentage of the 5 year London Inter-Bank Offered Rate (“LIBOR”) Index of 59.91%, multiplied by the notional amount provided for in the Swap Agreement, as reflected by the outstanding principal amount of the Bonds, and the actions of the General Manager are ratified and the General Manager of the Authority was further authorized to execute any documents evidencing such acceptance.

 

            5.         Payments Under the Swap Agreement

            Payment obligations (except any termination payments) of the Authority under the Swap Agreement will be general obligations of the Authority.  The Authority hereby covenants that it shall include the amount of scheduled payments (except any termination payments) due thereunder for each fiscal year in which such sums are payable in its budget for that year; shall appropriate such amounts from its general revenues to the payment of such scheduled payments; and shall duly and punctually pay or cause to be paid the scheduled payments (except any termination payments) on the dates and places and in the manner stated in the Swap Agreement according to the true intent and meaning thereof, and for such proper budgeting, appropriation and payment, the general unsecured, unenhanced obligation of the Authority is hereby irrevocably pledged.

 

            The Authority hereby covenants that it shall include any termination payment due under the Swap Agreement, for which revenues are not otherwise available in the fiscal year in which such termination payment is due, in its budget to be adopted for the fiscal year immediately following the fiscal year in which such termination payment is due, and that it shall appropriate and pay such termination payment from its general revenues promptly, when first available.  Nonetheless, to the extent revenues are available for the payment, in whole or part, of a termination payment in the fiscal year in which such termination payment is due, the Authority shall pay such termination payment promptly from its general revenues.

 

            The Authority covenants with the Counterparty, and proper officers of the Authority are hereby authorized and directed, to withdraw from the General Fund (or from the Sinking Fund hereinafter authorized) and pay to the Counterparty on or before the appropriate payment dates set forth in the Swap Agreement (or as and when otherwise due by its terms and in order to provide same-day, available funds for timely payment), amounts required to pay the periodic scheduled payments and any other amounts due and owing under the Swap Agreement.

 

            In the event the Authority determines the same to be necessary or beneficial, and with the consent of the Counterparty, the Authority hereby authorizes to be established, a Sinking Fund for the payment of the periodic scheduled payments and any other amounts due and owing under the Swap Agreement, with a paying agent, to be named, and further covenants to maintain such Sinking Fund until such obligations are paid in full.  Proper officers of the Authority are hereby authorized and directed to contract with any such paying agent for its services in such capacity.

 

            Exhibit 6A to Appendix I hereto sets forth the estimated periodic scheduled payments to be paid and received by the Authority pursuant to the Swap Agreement.  Exhibit 7A to Appendix I hereto sets forth the maximum periodic scheduled payments to be paid by the Authority pursuant to the Swap Agreement followed by Exhibit 7B entitled ”Maximum Aggregate Net Debt Service” in Appendix I listing the maximum combined obligations of the Authority taking into account the periodic scheduled payments, not including any termination payments, due under the Swap Agreement together with the interest portion of the Bonds, assuming that the maximum interest rate on such Bonds is in effect.

 

            6.         Binding Effect to Covenants and Agreement.  All covenants, obligations and agreements of the Authority set forth in this Resolution, the Resolution adopted on October 9, 2008 and in the documents authorized hereby shall be deemed to be the covenants, obligations and agreements of the Authority to the fullest extent authorized or permitted by law, and all such covenants, obligations and agreements shall be binding upon the Authority and its successors from time to time and upon any board or body to which any powers or duties affecting the same shall be transferred by or in accordance with law.  Except as otherwise provided in this Resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the Authority or the members thereof by the provisions of this Resolution or the documents authorized hereby shall be ratified, exercised or performed by such members, officers or other representatives of the Authority as may be required or permitted by law to exercise or perform the same.  No covenant, obligation or agreement herein contained in any documents authorized hereby shall be deemed to be a covenant, obligation or agreement of any member, officer, agent or employee of the Authority in his or her individual capacity and neither the members of the Authority nor any officer executing the 2008 Confirmation or any other document authorized by this Resolution shall be liable personally thereunder or be subject to any personal liability or accountability by reason of the execution and delivery thereof.

 

            7.         Counsel.  Wayne D. Gerhold, Esq. is hereby appointed Bond Counsel with respect to the matters set forth in this Resolution and Adams & Foley, LLC and is hereby directed to represent the Authority’s interests in these matters.

 

            8.         Further Action.  Any member of the Authority is hereby authorized and directed to execute such further documents and do such further things as may be necessary or proper to carry out the intent and purpose of this Resolution or any document herein authorized.

 

            9.         Repeal of Inconsistent Resolutions.  All prior resolutions or parts thereof inconsistent herewith are hereby repealed to the extent of such inconsistency.

 

            10.        Resolution A Contract.  This Resolution shall constitute a contract with the Counterparty.

 

            11.        Statutory References.  All references to specific provisions of statutory law herein contained may be read and interpreted by reference to amended, successor or replacement laws, but only to the extent consistent with the intent and clear meaning of this Resolution.  All inconsistencies shall be resolved with recognition of, and in favor of, the rights of the Counterparty whose rights shall not be impaired.

 

            12.        Benefited Parties.  Nothing in this Resolution, expressed or implied, is intended or shall be construed to confer upon, or to give to, any person or corporation, other than the Authority, the Paying Agent for the Bonds, if any, and the Counterparty, any right, remedy or claim under or by reason of this Resolution or any covenant, condition or stipulation hereof; and all of the covenants, stipulations, promises and agreements in this Resolution contained by and on behalf of the Authority shall be for the sole and exclusive benefit of such persons.

 

            13.        Severability.  If any one or more of the covenants or agreements provided in this Resolution on the part of the Authority to be performed shall for any reason be held to be illegal or invalid or otherwise contrary to law, then such covenant or covenants or agreement or agreements shall be null and void and shall be deemed separable from the remaining covenants and agreements, but shall in no way otherwise affect the validity of this Resolution.

 

            14.        Counterparts.  This Resolution may be executed in multiple counterparts, each of which shall be regarded for all purposes as an original; but such counterparts shall constitute but one and the same instrument.

 

            15.        Effective Date.  This Resolution shall take effect immediately.

 

           

Adopted:  January 8, 2009

 

 

WEST MIFFLIN SANITARY SEWER MUNICIPAL AUTHORITY:  Rich Babjak, Chairman

 

ATTEST:   Glenn Labosco, Secretary