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Resolution RS2020-316 (as amended)

A Resolution authorizing the issuance of not to exceed seventeen million dollars ($17,000,000) in aggregate principal amount of tax anticipation notes of the Metropolitan Government of Nashville and Davidson County, Tennessee.

WHEREAS, by Sections 9 21 101 et seq., Tennessee Code Annotated, local governments in Tennessee are authorized through their respective governing bodies to issue and sell tax anticipation notes of said governments for the purpose of meeting appropriations made for the current fiscal year in anticipation of the collection of taxes and revenues; and,

WHEREAS, by Sections 9 13 201 et seq., Tennessee Code Annotated, the maturity date of such tax anticipation notes may, with the approval of the comptroller, be established beyond the end of the current fiscal year in the case of economic distress due to natural disaster certified by the Federal Emergency Management Agency (FEMA) or such other conditions as may be identified by the comptroller; and,

WHEREAS, on April 2, 2020, President Donald J. Trump declared a major disaster which was certified by FEMA as Tennessee COVID-19 Pandemic (DR-4514); and,

WHEREAS, the Coronavirus Pandemic has forced the Metropolitan Government of Nashville and Davidson County, Tennessee (the “Metropolitan Government”)and the state to implement safer at home orders and mandating that all non-essential businesses cease operations, thus resulting in an unanticipated deficiency in revenues straining the current year operating budget; and,

WHEREAS, the Metropolitan Government has heretofore determined that it is necessary and advisable to issue up to $17,000,000 in an aggregate principal amount of tax anticipation notes, in one or more series, for the purpose of meeting appropriations made for the current fiscal year from its Schools Debt Service Fund (the "Schools Debt Fund"), from its Urban Services District Debt Service Fund (the "USD Debt Fund"), and from its General Fund (the “General Fund”) and together with the Schools Debt Fund and the USD Debt Fund, (the “Borrowing Funds”); and,

WHEREAS, it is the intention of the Metropolitan County Council to adopt this resolution for the purpose of authorizing the issuance of up to $17,000,000 in an aggregate principal amount of said notes, providing for the issuance, sale, and payment of said notes, establishing the terms thereof and the disposition of the proceeds therefrom.

NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN COUNTY COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, TENNESSEE AS FOLLOWS:

Section 1. Authority. The notes authorized by this resolution will be issued pursuant to Sections 9 13 201 et seq. and 9 21 101 et seq., Tennessee Code Annotated, and other applicable provisions of law.

Section 2. Definitions. The following terms shall have the following meanings in this resolution unless the text expressly or by necessary implication requires otherwise:

(a) "Code" means the Internal Revenue Code of 1986, as amended;

(b) "Governing Body" means the Metropolitan County Council of the Metropolitan Government of Nashville and Davidson County; and,

(c) “Lending Fund” means the fund of the Metropolitan Government designated as the General Fund 4% Reserve Fund; and,

(d) "Metropolitan Government" means The Metropolitan Government of Nashville and Davidson County (Tennessee); and,

(e) "Notes" means the not to exceed $17,000,000 in aggregate principal amount of Tax Anticipation Notes, Series 2020 of the Metropolitan Government, authorized to be issued in one or more series by this resolution; and,

(f) "Registration Agent" means the Finance Director of the Metropolitan Government or such other person or entity as may be appointed by the Metropolitan Mayor to act as registration and paying agent for the Notes.

Section 3. Authorization and Terms of the Notes. For the purpose of providing funds to meet appropriations in the current fiscal year from the Borrowing Funds and to pay costs incident to the issuance and sale of the Notes as more fully set forth in Section 7 hereof, there are hereby authorized to be issued tax anticipation notes of the Metropolitan Government in the aggregate principal amount of not to exceed $17,000,000. The Notes may be issued in one or more series, shall be issued in fully registered form, without coupons, shall be designated as "Tax Anticipation Notes, Series 2020", and shall be dated the date of their issuance. The Notes shall bear interest at a rate or rates not to exceed the maximum rate permitted by applicable law, payable with such frequency, not more often than monthly, as is agreed upon with the purchaser of the Notes, and the Notes shall mature on such date as is agreed upon with the purchaser thereof but not later June 30, 2023. Subject to Section 7 hereto, the Notes may be prepaid at any time. In no event shall the principal amount of the Notes issued for the benefit a Borrowing Fund and any other tax anticipation notes payable from such Borrowing Fund exceed 60 percent of the appropriations to be made from such Borrowing Fund in the fiscal year during which the Notes are issued. Notwithstanding anything herein to the contrary, each series of Notes issued hereunder shall be for the benefit of a single Borrowing Fund.

The Registration Agent is hereby authorized and directed to maintain a note registration record with respect to the Notes, to authenticate and deliver the Notes as provided herein, either at original issuance, upon transfer, or as otherwise directed by the Metropolitan Government, to effect transfers of the Notes, to give all notices of redemption as required herein, to make all payments of principal and interest with respect to the Notes as provided herein and to cancel and destroy Notes which have been paid at maturity or upon earlier redemption or submitted for exchange or transfer.

The Notes shall be payable, principal, premium, if any, and interest, in lawful money of the United States of America at the offices of the Registration Agent. The Registration Agent shall make all interest payments with respect to the Notes on each interest payment date directly to the registered owners as shown on the Note registration records maintained by the Registration Agent as of the close of business on the fifteenth day of the month next preceding the interest payment date (the "Regular Record Date") by check or draft mailed to such owners at their addresses shown on said Note registration records or by such other means as may be approved by the Finance Director, without, except for final payment, the presentation or surrender of such registered Notes, and all such payments shall discharge the obligations of the Metropolitan Government in respect of such Notes to the extent of the payments so made. Payment of principal of the Notes shall be made upon presentation and surrender of such Notes to the Registration Agent as the same shall become due and payable.

Any interest on any Note which is payable but is not punctually paid or duly provided for on any interest payment date (hereinafter "Defaulted Interest") shall forthwith cease to be payable to the registered owner on the relevant Regular Record Date; and, in lieu thereof, such Defaulted Interest shall be paid by the Metropolitan Government to the persons in whose names the Notes are registered at the close of business on a date (the "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Metropolitan Government shall notify the Registration Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Metropolitan Government shall deposit with the Registration Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Registration Agent for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this Section provided. Thereupon, not less than ten (10) days after the receipt by the Registration Agent of the notice of the proposed payment, the Registration Agent shall fix a Special Record Date for the payment of such Defaulted Interest which Date shall be not more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment to the registered owners. The Registration Agent shall promptly notify the Metropolitan Government of such Special Record Date and, in the name and at the expense of the Metropolitan Government, not less than ten (10) days prior to such Special Record Date, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each registered owner at the address thereof as it appears in the Note registration records maintained by the Registration Agent as of the date of such notice. Nothing contained in this Section or in the Notes shall impair any statutory or other rights in law or in equity of any registered owner arising as a result of the failure of the Metropolitan Government to punctually pay or duly provide for the payment of principal of, premium, if any, and interest on the Notes when due.

The Notes are transferable only by presentation to the Registration Agent by the registered owner, or his legal representative duly authorized in writing, of the registered Note(s) to be transferred with the form of assignment on the reverse side thereof completed in full and signed with the name of the registered owner as it appears upon the face of the Note(s) accompanied by appropriate documentation necessary to prove the legal capacity of any legal representative of the registered owner. Upon receipt of the Note(s) in such form and with such documentation, if any, the Registration Agent shall issue a new Note or Notes to the assignee(s) in $100,000 denominations, or integral multiples of $1,000 in excess thereof, as requested by the registered owner requesting transfer. The Registration Agent shall not be required to transfer or exchange any Note during the period commencing on a Regular or Special Record Date and ending on the corresponding interest payment date of such Note, nor to transfer or exchange any Note after the notice calling such Note for redemption has been given, nor to transfer or exchange any Note during the period following the receipt of instructions from the Metropolitan Government to call such Note for redemption; provided, the Registration Agent, at its option, may make transfers after any of said dates. No charge shall be made to any registered owner for the privilege of transferring any Note, provided that any transfer tax relating to such transaction shall be paid by the registered owner requesting transfer. The person in whose name any Note shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and neither the Metropolitan Government nor the Registration Agent shall be affected by any notice to the contrary whether or not any payments due on the Notes shall be overdue. Notes, upon surrender to the Registration Agent, may, at the option of the registered owner, be exchanged for an equal aggregate principal amount of Notes of the same maturity in any authorized denomination or denominations.

The Notes shall be signed by the Metropolitan Mayor and attested by the Metropolitan Clerk by their respective signatures.

The Registration Agent is hereby authorized to authenticate and deliver the Notes to the original purchaser thereof upon receipt by the Metropolitan Government of the proceeds of the sale thereof and to authenticate and deliver Notes in exchange for Notes of the same principal amount delivered for transfer upon receipt of the Note(s) to be transferred in proper form with proper documentation as hereinabove described. The Notes shall not be valid for any purpose unless authenticated by the Registration Agent by the manual signature of an officer thereof on the certificate set forth herein on the Note form.

In case any Note shall become mutilated, or be lost, stolen or destroyed, the Metropolitan Government, in its discretion, shall issue, and the Registration Agent, upon written direction from the Metropolitan Government shall authenticate and deliver, a new Note of like tenor, amount, maturity and date, in exchange and substitution for, and upon the cancellation of, the mutilated Note, or in lieu of and substitution for such lost, stolen or destroyed Note, or if any such Note shall have matured or shall be about to mature, instead of issuing a substituted Note the Metropolitan Government may pay or authorize payment of such Note without surrender thereof. In every case the applicant shall furnish evidence satisfactory to the Metropolitan Government and the Registration Agent of the destruction, theft or loss of such Note, and indemnity satisfactory to the County and the Registration Agent; and the Metropolitan Government may charge the applicant for the issue of such new Note an amount sufficient to reimburse the Metropolitan Government for the expense incurred by it in the issue thereof.

Section 4. Source of Payment. The Notes shall be payable from the receipt of taxes and revenues in the applicable Borrowing Fund during the term of the Notes. If the Metropolitan Government overestimates the amount of taxes and revenue collected during the term of the Notes and it becomes impossible to retire the Notes prior to the maturity date thereof, then the Metropolitan Government shall apply to the Comptroller of Treasury within ten (10) days prior to such maturity date for permission to issue funding bonds to cover the unpaid Notes in the manner provided by Title 9, Chapter 11 of Tennessee Code Annotated or as otherwise provided for in a manner approved by the Comptroller of Treasury.

Section 5. Form of Notes. The Notes shall be in substantially the following form, the omissions to be appropriately completed when the Notes are prepared and delivered:

(Form of Face of Note)

REGISTERED REGISTERED
Number ______ $__________

UNITED STATES OF AMERICA
STATE OF TENNESSEE
THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY
TAX ANTICIPATION NOTES, SERIES 2020[ ]


Interest Rate: Maturity Date: Date of Note: CUSIP No.:


Registered Owner:

Principal Amount:

KNOW ALL MEN BY THESE PRESENTS: That the Metropolitan Government of Nashville and Davidson County, Tennessee (the "Metropolitan Government"), for value received hereby promises to pay to the registered owner hereof, hereinabove named, or registered assigns, in the manner hereinafter provided, the principal amount hereinabove set forth on the maturity date hereinabove set forth or upon earlier redemption as set forth herein, and to pay interest (computed on the basis of a 360 day year of twelve 30 day months) on said principal amount at the annual rate of interest hereinabove set forth from the date hereof until said maturity date or redemption date, said interest being payable on ________, 20___, and upon the maturity of the Note. Both principal hereof and interest hereon are payable in lawful money of the United States of America by check or draft at the office of the Finance Director, as registration agent and paying agent (the "Registration Agent"). The Registration Agent shall make all interest payments with respect to this Note on each interest payment date directly to the registered owner hereof shown on the note registration records maintained by the Registration Agent as of the close of business on the fifteenth day of the month next preceding the interest payment date (the "Regular Record Date") by check or draft mailed to such owner at such owner's address shown on said note registration records, without, except for final payment, the presentation or surrender of this Note, and all such payments shall discharge the obligations of the Metropolitan Government to the extent of the payments so made. Any such interest not so punctually paid or duly provided for on any interest payment date shall forthwith cease to be payable to the registered owner on the relevant Regular Record Date; and, in lieu thereof, such defaulted interest shall be payable to the person in whose name this Note is registered at the close of business on the date (the "Special Record Date") for payment of such defaulted interest to be fixed by the Registration Agent, notice of which shall be given to the owners of the Notes of the issue of which this Note is one not less than ten (10) days prior to such Special Record Date. Payment of principal of and premium, if any, on this Note shall be made when due upon presentation and surrender of this Note to the Registration Agent.

This Note is transferable by the registered owner hereof in person or by such owner's attorney duly authorized in writing at the office of the Registration Agent, but only in the manner, subject to limitations and upon payment of the charges provided in the Resolution, as hereafter defined, and upon surrender and cancellation of this Note. Upon such transfer a new Note of the same maturity and interest rate for the same aggregate principal amount will be issued to the transferee in exchange therefor. The person in whose name this Note is registered shall be deemed and regarded as the absolute owner thereof for all purposes and neither the Metropolitan Government nor the Registration Agent shall be affected by any notice to the contrary whether or not any payments due on the Note shall be overdue. Notes, upon surrender to the Registration Agent, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of the Notes of the same maturity in authorized denomination or denominations, upon the terms set forth in the Resolution. The Registration Agent shall not be required to transfer or exchange any Note during the period commencing on a Regular Record Date or Special Record Date and ending on the corresponding interest payment date of such Note, nor to transfer or exchange any Note after the notice calling such Note for redemption has been made, nor during a period following the receipt of instructions from the Metropolitan Government to call such Note for redemption.

This Note is one of a total authorized issue aggregating $17,000,000 and issued by the Metropolitan Government for the purpose of meeting appropriations made for the current fiscal year from its _______________ Fund, under and in full compliance with the constitution and statutes of the State of Tennessee, including Sections 9 21 101 et seq., Tennessee Code Annotated, and pursuant to a resolution duly adopted by the Metropolitan County Council of the Metropolitan Government on the ____ day of _______________, 2020 (the "Resolution").

This Note is payable from the receipt of taxes and revenues in the ___________________ Fund during the term of the note. For a more complete statement of the general covenants and provisions pursuant to which this Note is issued, reference is hereby made to said Resolution.

This Note and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) Tennessee excise taxes on interest on the Note during the period the Note is held or beneficially owned by a corporation, bank, savings and loan association or any other business entity described in Section 67-4-806, Tennessee Code Annotated, and (b) Tennessee franchise taxes by reason of the inclusion of the book value of the Note in the Tennessee franchise tax base of any corporation, bank, savings and loan association or other business entity described in Section 67 4 903, Tennessee Code Annotated.

It is hereby certified, recited, and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this Note exist, have happened and have been performed in due time, form and manner as required by law, and that the amount of this Note, together with all other indebtedness of the County, does not exceed any limitation prescribed by the constitution and statutes of the State of Tennessee.

IN WITNESS WHEREOF, the County has caused this Note to be signed by its Metropolitan Mayor and attested by its Metropolitan Clerk as of the date hereinabove set forth.

THE METROPOLITAN GOVERNMENT OF
NASHVILLE AND DAVIDSON COUNTY,
TENNESSEE


By:
Metropolitan Mayor

ATTESTED:



Metropolitan Clerk

APPROVED AS TO FORM
AND LEGALITY:


______________________________
Director of Law


Transferable and payable at the
office of: Metropolitan Government Finance Director
Nashville, Tennessee

Date of Registration: __________________________

This Note is one of the issue of Notes issued pursuant to the Resolution hereinabove described.


By: __________________________________
Metropolitan Government Finance Director,
Registration Agent




(FORM OF ASSIGNMENT)

FOR VALUE RECEIVED, the undersigned sells, assigns, and transfers unto __________________________, whose address is _______________________________________ (Please insert Federal Identification or Social Security Number of Assignee _______________), the within note of the Metropolitan Government of Nashville and Davidson County, Tennessee, and does hereby irrevocably constitute and appoint ___________________, or its successor as note registration agent, to transfer the said note on the records kept for registration thereof with full power of substitution in the premises.

Dated: ____________
_____________________________
NOTICE: The signature to this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within
Note in every particular, without
alteration or enlargement or any
change whatsoever.


Section 6. Remedies. The holder(s) of the Notes shall have all remedies provided by law in the event of a default under the Notes, including all remedies specified in Section 9-21-407 of the Tennessee Code Annotated, as amended. Without limiting the foregoing, the holder(s) of the Notes may by mandamus require the Metropolitan Government to assess, levy and collect taxes sufficient to provide for the payment of the Notes.

Section 7. Sale of Notes. Except as set forth in the following sentence, the Metropolitan Mayor is hereby authorized to sell the Notes on an interfund basis and issue said Notes in one or more series to the Lending Fund in an aggregate principal amount not to exceed $17,000,000. If the Metropolitan Mayor determines that the issuance of the Notes on an interfund basis is not in the best interest of the Metropolitan Government, then he is hereby authorized to sell the Notes by negotiated sale, in one or more series, to one or more financial institutions as he may select, including to a financial institution or other entity designated by the Federal Reserve pursuant to the Municipal Liquidity Facility established by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to the extent the Metropolitan Government of Nashville and Davidson County is deemed eligible therefore, with a true interest cost not to exceed 3% (three percent) per annum unless the Metropolitan Council approves a resolution authorizing a higher interest cost.

In either event, the Metropolitan Mayor is authorized to change the dated date of the Notes, to sell fewer than all the Notes authorized herein, to change the designation of the Notes, to approve the interest payment rates and dates and maturity date therefor, to agree to a redemption premium relating to the prepayment of the Notes in an amount not to exceed what is permitted by law, and to agree that the Notes can be issued as draw-down Notes under which the Metropolitan Government can draw down funds as needed. If any of the changes described above are made, the Note form set forth in Section 5 hereof shall be adjusted accordingly to reflect any changes made pursuant to this Section. The Metropolitan Mayor and Metropolitan Clerk, or either of them, are authorized to cause the Notes to be authenticated and delivered by the Registration Agent to the purchaser thereof and to execute, publish, and deliver all certificates, documents and supplemental agreements as they shall deem necessary in connection with the sale and delivery of the Notes, including without limitation any documentation required by the CARES Act. In no event shall any Notes be sold hereunder without first obtaining the approval of the State Director of Local Finance.

Section 8. Disposition of Note Proceeds. The proceeds of the sale of the Notes shall be paid to the Metropolitan Government in the manner agreed upon with the purchaser thereof and deposited and invested as required by applicable law.

Section 9. Federal Tax Exemption. If interest on the Notes is determined by nationally recognized bond counsel to be excludable from gross income for purposes of federal income taxation under laws in force on the date of delivery of the Notes, then the Metropolitan Government agrees that it shall take no action which may cause the interest on any of said Notes to be included in gross income for federal income taxation. The Metropolitan Mayor is authorized and directed to make such certifications in this regard in connection with the sale of the Notes as he shall deem appropriate, and such certifications shall constitute a representation and certification of the Metropolitan Government.

Section 10. Resolution a Contract. The provisions of this resolution shall constitute a contract between the Metropolitan Government and the registered owners of the Notes, and after the issuance of the Notes, no change, variation or alteration of any kind in the provisions of this resolution shall be made in any manner until such time as the Notes and interest due thereon shall have been paid in full.

Section 11. Separability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution.

Section 12. Repeal of Conflicting Resolutions and Effective Date. All other resolutions and orders, or parts thereof, in conflict with the provisions of this resolution, are, to the extent of such conflict, hereby repealed and this resolution shall be in immediate effect from and after its adoption.

Sponsor(s)

Bob Mendes

Legislative History

Referred toBudget and Finance Committee

IntroducedMay 19, 2020

AmendedMay 19, 2020

AdoptedMay 19, 2020

ApprovedMay 20, 2019

ByMayor Cooper's signature

Requests for ADA accommodation should be directed to the Metropolitan Clerk at 615-862-6770.

Last Modified: 05/25/2020 4:37 PM