Title
Ordinance of the Council of the Lexington-Fayette Urban County Government (1) Authorizing and approving the execution and delivery of a Second Supplemental Lease Agreement between the Lexington-Fayette Urban County Airport Board as the Lessor and the Lexington-Fayette Urban County Government as the Lessee relating to the issuance and sale of an amount not to exceed $25,000,000 in aggregate principal amount of (a) Lexington-Fayette Urban County Airport Board General Airport Revenue Refunding Bonds, 2012 Series A (Lexington-Fayette Urban County Government General Obligation) (AMT); and (b) Lexington-Fayette Urban County Airport Board General Airport Revenue Refunding Bonds, 2012 Series B (Lexington-Fayette Urban County Government General Obligation) (Non-AMT), all for the purpose of refunding (i) All of the Board's outstanding $26,235,000 Variable Rate General Airport Revenue and Revenue Refunding Bonds, 2008 Series B (Lexington-Fayette Urban County Government General Obligation) (Non-AMT) and (ii) A portion of the Board's outstanding $16,420,000 Variable Rate General Airport Revenue Refunding Bonds, 2009 Series B (Lexington-Fayette Urban County Government General Obligation) (Non-AMT), at the Blue Grass Airport in Fayette County, Ky. [Dept. of Finance, Driskell]
Summary
Authorization to approve the execution and delivery of a second supplemental lease agreement with the Lexington-Fayette Urban County Airport Board relating to the issuance and sale of Airport Revenue Refunding Bonds, Series 2012. (L1005-12) (Driskell)
This is a request to approve the execution and delivery of a second supplemental lease agreement with the Lexington-Fayette Urban County Airport Board relating to the issuance and sale of Airport Revenue Refunding Bonds, Series 2012, of an amount not to exceed $25,000,000. There is no budgetary impact.
Budgetary Implications: NO
Advance Document Review: Law/Risk Management
Fully Budgeted:
Account Number:
This Fiscal Year Impact: $
Annual Impact: $
Project:
Activity:
Budget Reference:
Current Balance:
Body
WHEREAS, the Lexington-Fayette Urban County Airport Board (the "Board") has previously issued its (i) $46,395,000 Variable Rate General Airport Revenue and Revenue Refunding Bonds, 2008 Series A (Lexington-Fayette Urban County Government General Obligation) (AMT) (the "2008 Series A Bonds," which are no longer outstanding), (ii) $26,235,000 Variable Rate General Airport Revenue and Revenue Refunding Bonds, 2008 Series B (Lexington-Fayette Urban County Government General Obligation) (non-AMT) (the "2008 Series B Bonds"), and (iii) $4,445,000 Variable Rate General Airport Taxable Revenue Refunding Bonds, 2008 Series C (Lexington-Fayette Urban County Government General Obligation) (Taxable) (the "2008 Series C Bonds" which 2008 Series C Bonds are no longer outstanding) and collectively with the 2008 Series A Bonds and the 2008 Series B Bonds, the "2008 Bonds"); and
WHEREAS, the Lexington-Fayette Urban County Airport Board has previously issued its (i) $31,880,000 General Airport Revenue Refunding Bonds, 2009 Series A (Lexington-Fayette Urban County Government General Obligation) (non-AMT) (the "2009 Series A Bonds"); and (ii) $16,235,000 Variable Rate General Airport Revenue Refunding Bonds, 2009 Series B (Lexington-Fayette Urban County Government General Obligation) (non-AMT) (the "2009 Series B Bonds" and collectively with the 2009 Series A Bonds, the "2009 Bonds");and
WHEREAS, the 2008 Bonds were issued by the Board for the purpose of providing funds to: (i) refund certain outstanding First Mortgage Revenue Bonds issued by the Lexington-Fayette Urban County Airport Corporation, (ii) finance improvements to the Blue Grass Airport (the "Airport") consisting of certain airfield, terminal, parking and sanitary sewer improvements (the "2008 Project"); (iii) fund a Debt Service Reserve Fund; and (iv) pay the costs of issuance of the 2008 Bonds; and
WHEREAS, the 2009 Bonds were issued by the Board for the purpose of providing funds to: (i) currently the refund the 2008 Series A Bonds and a portion of the outstanding 2008 Series B Bonds, (ii) fund a Debt Service Reserve Fund; and (iii) pay the costs of issuance of the 2008 Bonds; and
WHEREAS, the Board seeks to refund all of the remaining outstanding 2008 Series B Bonds (i) to alleviate potential interest rate risks and (ii) to obtain debt service savings, if any; and
WHEREAS, the Board seeks to refund a portion of the outstanding 2009 Series B Bonds (the "Refunded 2009 Series B Bonds") (i) to alleviate potential interest rate risks and (ii) to obtain debt service savings, if any; and
WHEREAS, the 2009 Series A Bonds and a portion of the 2009 Series B Bonds (the "Remaining 2009 Series B Bonds") will remain outstanding under the Trust Indenture, dated as of November 1, 2008, as supplemented by the Second Supplemental Trust Indenture, dated as of November 1, 2009 (the "Second Supplement"), with respect to the 2009 Series A Bonds and the Third Supplemental Trust Indenture, dated as of November 1, 2009 (the "Third Supplement"), with respect to the Remaining 2009 Series B Bonds, each by and between the Board and the Trustee; and
WHEREAS, in connection with the anticipated issuance by the Board of its (i) Lexington-Fayette Urban County Airport Board General Airport Revenue Refunding Bonds, 2012 Series A (Lexington-Fayette Urban County Government General Obligation) (AMT) (the "2012 Series A Bonds"); and (ii) Lexington-Fayette Urban County Airport Board General Airport Revenue Refunding Bonds, 2012 Series B (Lexington-Fayette Urban County Government General Obligation) (non-AMT) (the "2012 Series B Bonds" and together with the 2012 Series A Bonds, the "Series 2012 Bonds"), under the Trust Indenture, dated as of November 1, 2008, as supplemented by the Fourth Supplemental Trust Indenture, dated as of November 1, 2012 (the "Fourth Supplement"), in an aggregate principal amount not to exceed $25,000,000, a portion of the proceeds of which will be applied to the refunding of the entire outstanding principal amount of the 2008 Series B Bonds and the Refunded 2009 Series B Bonds (together the "Prior Bonds"), it is necessary that all actions of the Board and all documents necessary to be executed and delivered by the Board be specifically approved by the Urban County Council of the Lexington-Fayette Urban County Government; and
WHEREAS, the documents identified herein have been prepared and tendered to the Board and this Urban County Council.
NOW, THEREFORE, BE IT ORDAINED BY THE LEXINGTON-FAYETTE URBAN COUNTY GOVERNMENT AS FOLLOWS:
SECTION 1. Approval of Issuance of Series 2012 Bonds.
The Lexington-Fayette Urban County Government (the "Urban County Government") specifically acknowledges the issuance by the Board of not to exceed $25,000,000 aggregate principal amount of (i) Lexington-Fayette Urban County Airport Board General Airport Revenue Refunding Bonds, 2012 Series A (Lexington-Fayette Urban County Government General Obligation) (AMT); and (ii) Lexington-Fayette Urban County Airport Board General Airport Revenue Refunding Bonds, 2012 Series B (Lexington-Fayette Urban County Government General Obligation) (non-AMT), in accordance with the terms of the 2012 Series Bond Resolution adopted by the Board on September 26, 2012 (the "2012 Series Bond Resolution"), authorizing the issuance of such Series 2012 Bonds, bearing interest at a fixed rate, a copy of which 2012 Series Bond Resolution is attached hereto as Exhibit A.
SECTION 2. Authorization of Second Supplemental Lease.
The Urban County Government hereby approves the Second Supplemental Lease Agreement, dated as of November 1, 2012 (the "Second Supplemental Lease"), by and between the Board, as lessor, and the Urban County Government, as lessee, in substantially the form attached hereto as Exhibit B, supplementing and amending the Lease (as defined in the Trust Indenture, as amended and supplemented by the Second Supplement, the Third Supplement and the Fourth Supplement (collectively, the "Trust Indenture")), in accordance with the requirements of the Trust Indenture and the Lease. It is hereby found and determined that the refunding of the Prior Bonds is appropriate. It is further determined that it is necessary and desirable and in the best interests of the Urban County Government to enter into the Second Supplemental Lease for the purposes therein specified, and the execution and delivery of the Second Supplemental Lease and all representations, certifications and other matters with respect to the Second Supplemental Lease, or as may be required by Peck, Shaffer & Williams LLP, as Bond Counsel, prior to delivery of the Second Supplemental Lease, are hereby approved, ratified and confirmed. In connection with said proposed plan of financing, the Mayor (with the Council Clerk attesting to the Mayor's signature) is hereby authorized and directed to execute the Second Supplemental Lease, with such changes in the Second Supplemental Lease not inconsistent with this Ordinance and not substantially adverse to the Urban County Government as may be approved by the officials executing the same on behalf of the Urban County Government. The approval of such changes by said officials, and that such are not substantially adverse to the Urban County Government, shall be conclusively evidenced by the execution of the Second Supplemental Lease by such officials.
The Urban County Government affirms the Board's right to receive Lease Rental Payments (as defined in the Lease, the First Supplemental Lease and Second Supplemental Lease) from the Urban County Government under the Lease, the First Supplemental Lease and Second Supplemental Lease and further ratifies and approves the Board's assignment of such right to the Trustee (as defined in the Lease, originally The Bank of New York Mellon Trust Company, N.A., Louisville, Kentucky) under the Trust Indenture, for the benefit of bondholders.
Upon the issuance of the Series 2012 Bonds, the Lease shall be modified and amended by the Second Supplemental Lease.
SECTION 3. General Obligation Pledge.
Pursuant to the Constitution of the Commonwealth and the Kentucky Revised Statutes, the obligation of the Urban County Government created by the Lease shall be a full general obligation of the Urban County Government and, for the payment of the Lease Rental Payments, as defined therein, the full faith, credit and revenue of the Urban County Government is hereby pledged for the prompt payment thereof. During the period the Lease is outstanding, there shall be and there hereby is levied on all the taxable property in the Fayette County, in addition to all other taxes, but within applicable limitations, a direct tax annually in an amount sufficient to pay the Lease Rental Payments when and as due. Said tax shall be and is hereby ordered computed, certified, levied and extended upon the tax duplicate and collected by the same officers in the same manner and at the same time that taxes for general purposes for each of said years are certified, extended and collected. Said tax shall be placed before and in preference to all other items and for the full amount thereof provided, however, that in each year to the extent that the other taxes of the Urban County Government are available for the payment of the Lease Rental Payments and are appropriated for such purpose, the amount of such direct tax upon all of the taxable property in the Fayette County shall be reduced by the amount of such other taxes so available and appropriated.
There is hereby established with the Urban County Government a sinking fund (the "Sinking Fund"). The funds derived from said tax levy hereby required or other available taxes shall be placed in the Sinking Fund and, together with interest collected on the same, are irrevocably pledged for the payment of all bonds issued under KRS Chapter 66 and Tax Supported Leases, as defined in KRS Chapter 66, including the Lease, when and as the same fall due.
SECTION 4. Mayor Authorized to Sign Other Documents.
The Mayor (with the Council Clerk attesting to the Mayor's signature) is hereby authorized and directed to execute any further instruments and documents reasonably necessary in carrying out the plan of financing represented by said Lease, including, without limitation, the public approval of such Series 2012 Bonds as required by Section 147(f) of the Internal Revenue Code of 1986.
SECTION 5. Effective Immediately upon Enactment and Approval.
This Ordinance shall be effective immediately upon enactment and approval as required by law, and a Notice of Enactment and Summary of the provisions of this Ordinance shall be published by the Urban County Council Clerk as required by law.
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INTRODUCED AND GIVEN FIRST READING at a duly convened meeting of the Urban County Council of the Lexington-Fayette Urban County Government on the ____ day of October, 2012.
GIVEN SECOND READING, ENACTED AND ADOPTED at a duly convened meeting of the Urban County Council of the Lexington-Fayette Urban County Government on the ____ day of _______________, 2012.
LEXINGTON-FAYETTE COUNTY GOVERNMENT
Approved:
Attest:
Urban County Council Clerk |