City of Erie, PA
Erie County
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Table of Contents
Table of Contents
CROSS REFERENCES
State law provisions — See 53 P.S. § 6780-1 et seq.
[Ord. 103-1979 § 1, passed 12-19-1979]
All debt incurred by the City shall be subject to the substantive and procedural provisions set forth in the Local Government Unit Debt Act, Act No. 1978-52. The provisions of this article are intended to supplement the Local Government Unit Debt Act, and in the event of any inconsistency between the two, the provisions of the Act shall apply.
[Ord. 103-1979 § 2, passed 12-19-1979]
(a) 
Prior to the initial authorization of bonds or notes or the issuance of any guaranty to finance any project involving construction or acquisition, the City shall obtain a realistic cost estimate for the project through actual bids, option agreements or professional estimates from registered architects, professional engineers or other persons qualified by experience.
(b) 
The Mayor and Council shall review the realistic cost estimates and Council shall tentatively approve the project by resolution before the City incurs additional expense in connection with the initial authorization of bonds or notes or the issuance of any guaranty to finance the project.
(c) 
The cost of preliminary estimates, if initially paid by the City, may be reimbursed out of the net proceeds of the issue of bonds or notes as a cost of the project.
[Ord. 103-1979 § 3, passed 12-19-1979]
(a) 
The Mayor, with the advice of the City Solicitor, shall retain a special bond counsel to assist in the preparation of the offering, which bond counsel shall be an attorney duly admitted to practice law in the Commonwealth of Pennsylvania who is knowledgeable in the area of Pennsylvania municipal bond offerings and who has a record of marketable opinions in previous municipal bond offerings.
(b) 
The duties of the bond counsel shall include, but not be limited to, drafting or approving the bond resolutions and ordinances and matters related thereto; reviewing the prospectus, official notice of sale and other materials related to the offering; and rendering a final legal opinion regarding the offering.
(c) 
The fee of the bond counsel, if initially paid by the City, may be reimbursed out of the net proceeds of the issue of bonds or notes as a cost of the project.
[Ord. 103-1979 § 4, passed 12-19-1979]
(a) 
The Mayor may retain an independent financial advisor, who is qualified by experience in municipal bond offerings, to provide expert advise and assist the City in connection with managing and incurring debt.
(b) 
The duties of the financial advisor shall include, but not be limited to, reviewing the present status of the City debt; reviewing the feasibility of incurring additional debt for the intended purpose of the issue and issuing a written report to the Mayor and Council as to that feasibility; assisting in the preparation of the prospectus and official notice of sale; and reviewing the sealed bids in the case of public sale or the proposals in the case of private sale.
(c) 
The financial advisor shall give his total loyalty to the City with respect to the proposed issue of bonds or notes and shall have no financial interest in such issue other than his fee for serving as financial advisor.
(d) 
The fee of the financial advisor, if initially paid by the City, may be reimbursed out of the net proceeds of the issue of bonds or notes as cost of the project.
[Ord. 103-1979 § 5, passed 12-19-1979]
(a) 
The Mayor shall select a sinking fund depositary which also shall serve as paying agent for the bonds or notes.
(b) 
The depositary and agent shall be a bank or bank and trust company authorized to do business in the Commonwealth of Pennsylvania and located in the City.
(c) 
The depositary and agent shall be responsible for receiving from the City an amount of funds sufficient for the payment of the principal and the interest on the notes or bonds as well as paying the principal and interest on such notes or bonds to the holders thereof as such principal and interest becomes due.
(d) 
Unless the depositary and agent is also serving as trustee for the bondholders or noteholders, the Mayor shall select the depositary and agent from that bank or bank and trust company which is set forth on a separate approved list compiled by the Director of Accounts, Finance and Budget and which submits the lowest responsible sealed bid pursuant to the sealed bid procedure set forth in this section. The lowest responsible bidder shall be the one who, having complied with the terms of the request for bids, offers to serve as the depositary and agent at the lowest cost to the City.
(e) 
The Director shall include on the approved list any bank or bank and trust company which has expressed an interest in serving as depositary and agent and which qualifies under Subsection (b) hereof. The Director shall update this approved list for each issue of bonds or notes under consideration.
(f) 
The Director shall solicit bids for depositary and agent by sending a request for bids, by certified mail return receipt requested, to each bank or bank and trust company on the approved list not less than 10 nor more than 30 days prior to the date fixed for opening bids.
(g) 
All bids for depositary and agent shall be received by the City Controller in sealed envelopes sufficiently labeled to indicate that they are bids for depositary and agent for the bonds or notes being sold. The bids shall be in writing, properly executed, and shall be on a bid form provided by the Director which shall contain a statement that the bid was prepared independently and without collusion with any other bidder.
(h) 
The sealed bids shall be publicly opened by the City Controller, or his authorized delegate, and publicly read aloud at the time and place fixed in the request for bids, unless the Mayor determines to return all bids unopened.
(i) 
In the event that there are two or more bids which qualify as the lowest responsible bids on identical terms conforming to the request for bids, the depositary and agent shall be selected by lot in any manner deemed fair by the Mayor.
[Ord. 103-1979 § 6, passed 12-19-1979]
(a) 
The Mayor shall appoint a trustee for the bondholders or noteholders if the ordinance authorizing the issuance of the bonds or notes provides for the execution of a trust indenture appointing a trustee.
(b) 
The trustee shall be a bank or bank and trust company with fiduciary powers, authorized to do business in the Commonwealth of Pennsylvania and located in Erie County.
(c) 
The trustee shall be responsible for complying with the terms of the deed of trust, trust indenture or other agreement with the City for the protection of the bondholders or noteholders. If a trustee is appointed under this section, the trustee also shall act as the sinking fund depositary and paying agent.
(d) 
The Director of Accounts, Finance and Budget shall include on a separate approved list any bank or bank and trust company with fiduciary powers which has expressed an interest in serving as trustee, depositary and agent and which qualifies under Subsection (b) hereof. The Director shall update this approved list for each issue of bonds or notes under consideration.
(e) 
The trustee shall be appointed from the approved list compiled by the Director, after consideration of factors such as previous experience as trustee, depositary and/or agent for municipal bond issues; capability to serve the City as trustee, depositary and agent; past record of earnings with respect to municipal bond issues; and the amount of the fee to be charged for serving as trustee, depositary and agent.
(f) 
The Director shall solicit proposals for serving as trustee, depositary and agent by sending a request for proposals, by certified mail return receipt requested to each bank or bank and trust company on the approved list not less than 10 nor more than 30 days prior to the date fixed for selection.
(g) 
Proposals for serving as trustee, depositary and agent shall be submitted in writing to the City Controller in a sealed envelope sufficiently labeled to indicate that they are proposals for trustee, depositary and agent for the bonds or notes being sold. The proposals shall contain information as to the factors set forth in Section 123.05(e), a statement that the proposal was prepared independently and without collusion with any other bank or bank and trust company and any additional information which the bank or bank and trust company deemed relevant to the selection.
(h) 
The proposals shall be opened in public by the City Controller, or his authorized delegate, and publicly read aloud at the time and place fixed in the request for proposals, unless the Mayor determines to return all proposals unopened.
(i) 
The Mayor shall have the right to reject all proposals, which right shall be set forth in the request for proposals sent to each bank or bank and trust company on the approved list.
[Ord. 103-1979 § 7, passed 12-19-1979]
(a) 
Council shall determine by resolution whether the bonds or notes shall be sold at public or private sale and shall state publicly the reasons for that determination.
(b) 
A decision to proceed by public or private sale shall be made by Council only after a public hearing following publication of notice of such hearing in at least one and not more than two newspapers of general circulation in Erie County not less than seven days prior to such hearing.
[Ord. 103-1979 § 8, passed 12-19-1979]
(a) 
If sold at public sale, the bonds or notes shall be sold to the highest responsible bidder or bidders, after advertising for bids. The highest responsible bidder shall be the one who, having complied with the terms of the official notice of sale, offers to take all of the bonds or notes, or any separate lot thereof on which separate bids may be made, at the lowest net interest rate to the City as computed under either the street method or the present worth method set forth at Section 709 of the Local Government Unit Debt Act, Act No. 1978-52.
(b) 
The Director of Accounts, Finance and Budget shall advertise the sale of bonds or notes by one public notice of either the official notice of sale, or of the availability of the official notice of sale, in at least one and not more than two newspapers of general circulation in Erie County and in at least one financial journal circulated among the underwriters of securities. Advertisements shall be published not less than 10 nor more than 30 days prior to the date fixed for opening bids. The content of the advertisement of the availability of the official notice of sale shall be that set forth in Section 702(a) of the Local Government Unit Debt Act, Act No. 1978-52. The content of the official notice of sale shall be that set forth in Section 702(b) of the Local Government Unit Debt Act, Act No. 1978-52.
(c) 
All bids shall be received by the City Controller in sealed envelopes sufficiently labeled to indicate that they are bids for the purchase of the bonds or notes being sold. The bids shall be in writing, properly executed, and shall be on bid forms provided by the Director which shall contain a statement that the bid was prepared independently and without collusion with any other bidder.
(d) 
Each bidder shall give bid security by submitting cash or a certified check or official bank check payable to the City in the amount of 2% of the principal amount of the bonds or notes to be purchased. The bid security of the unsuccessful bidder or bidders shall be returned to each unsuccessful bidder, without interest, in accordance with the written instructions of the bidder conforming to the official notice of sale, promptly upon an award of the bonds or notes or upon the rejection of all bids. The bid security of the successful bidder shall be retained by the Director and shall be applied on the purchase price when the bonds or notes are actually delivered or paid for, retained as liquidated damages if the bidder defaults or returned to the bidder with interest at the judgment rate if, after an acceptance of the proposal, the bonds or notes are not issued for any reason not constituting a default by the bidder.
(e) 
The sealed bids shall be publicly opened by the City Controller, or his authorized delegate, and publicly read aloud at the time and place fixed in the official notice of sale, unless Council determines to return all bids unopened.
(f) 
In the event that there are two or more bids which qualify as the highest and the best bids on identical terms conforming to the offering, the bonds or notes shall, with the consent of the bidders, be awarded to them jointly or absent such consent, may be awarded to any one of such bidders selected by lot in any manner deemed fair by Council.
(g) 
Council shall have the right to reject all bids, which right shall be set forth in the official notice of sale of the bonds or notes.
[Ord. 103-1979 § 9, passed 12-19-1979]
(a) 
If the bonds or notes are to be sold at private sale, Council shall invite written proposals from underwriting firms by means of an advertisement for proposals in at least one and not more than two newspapers of general circulation in Erie County and in at least one financial journal circulated among underwriters of securities not less than 10 nor more than 30 days prior to the date fixed for selection of the underwriter. In addition, Council shall also invite written proposals by sending a request for proposals, by certified mail return receipt requested, to an underwriting firm which has expressed interest in serving as an underwriter of bonds and notes issued by the City.
(b) 
Proposals to act as underwriter shall be submitted in writing to the City Controller and shall set forth sufficient information to permit Council to determine the approximate net interest cost of the offering in question, a statement that the proposal was prepared independently and without collusion with any other underwriting firm, and any additional information which the underwriter deems relevant.
(c) 
The proposals shall be opened by the City Controller in the presence of Council, or its authorized delegates, at the time and place fixed in the request for proposals, unless Council determines to return all proposals unopened.
(d) 
Council, or its authorized delegates, may request a meeting with each underwriter which submits a proposal to discuss each proposal in more detail.
(e) 
Prior to selection of the underwriter who shall purchase the bonds or notes at private sale, any person with any knowledge of the contents of any proposal shall not discuss those contents with any other underwriter and shall not take any other action to make those contents known to any other underwriter.
(f) 
In making the selection of the underwriting firm to purchase the bonds or notes, Council shall state publicly the reasons why the particular selection was made.
(g) 
Council shall have the right to reject all proposals, which right shall be set forth in the request for proposals.
[Ord. 49-2006, passed 9-20-2006]
If any Municipal authority seeks the guarantee of payment by the City for bonds, notes or other transactions, in the event of default by the authority, the City shall provide such guarantee in accordance with the fee schedule provided herein:
(a) 
For original issues.
Up to $5,000,000
$25,000
$5,000,001 to $10,000,000
$45,000
$10,000,001 to $25,000,000
$100,000
$25,000,001 to $50,000,000
$175,000
$50,000,001 and up
$250,000
(b) 
For debt restructuring. Same as schedule a.
(c) 
For refunding issues. The issuer is entitled to first 2% if the par amount of the refunded issue, the first 25% of the savings in excess of the above 2% is payable to the City.
(d) 
Nothing in this article shall be construed to relieve the City from any other requirements imposed under the Local Government Unit Debt Act or general law pertaining to debt guarantees.