Ordinance No. 11-23
Introduced: October 13, 2011
Public Hearing: November 14, 2011
Bond ordinance providing for the restructuring of a portion of the cost of acquisition of capacity at the sanitary sewage treatment plant of the Sussex County Municipal Utilities Authority by the Township of Vernon, in the County of Sussex, New Jersey, appropriating $2,800,000 therefor and authorizing the issuance of $2,666,000 bonds or notes of the township for financing such appropriation
WHEREAS, the Township of Vernon, in the County of Sussex, New Jersey (the “Township”), and The Sussex County Municipal Utilities Authority (“SCMUA”) entered into a service contract dated as of November 2, 2005, and entitled: “2005 Service Contract Between The Sussex County Municipal Utilities Authority and The Township of Vernon in the County of Sussex” (the “Service Contract”) relating to the treatment by SCMUA of sanitary sewage collected and transmitted by the Township to SCMUA; and
WHEREAS, pursuant to the provisions of the Service Contract, SCMUA has agreed to accept and treat from the Township sewage of a volume up to 265,000 gallons per day (monthly average) (the “Reserved Township Treatment Capacity”) which includes wastewater from the Vernon Town Center Collection System and the Mountain Creek Development not including the Black Creek Sanctuary Development nor the Appalachian Hotel all as further described in the Service Contract; and
WHEREAS, pursuant to the provisions of the Service Contract, the Township has agreed to make a payment annually to the Authority (referred to herein and in the Service Contract as the “Annual Charge”) for or with respect to the facilities made available to the Township under the Service Contract by the Authority regarding the conveyance, treatment and disposal of sewage; and
WHEREAS, the Annual Charge consists of an Operating Charge and a General Charge (each as defined and described in the Service Contract); and
WHEREAS, the General Charge payable by the Township to SCMUA on an annual basis includes, among other things, an amount sufficient to pay the principal of and interest on any bonds of SCMUA issued to finance the Reserved Township Treatment Capacity; and
WHEREAS, on September 15, 2008, SCMUA issued $27,498,738.20 of bonds, consisting of $4,095,000 Wastewater Facilities Revenue Bonds, Series 2008A, and $23,403,738.20 Wastewater Facilities Revenue Bonds, Series 2008B (Capital Appreciation Bonds) (collectively, the “SCMUA Expansion Bonds”) for purposes of financing an expansion to the wastewater treatment plant of SCMUA to provide for the Reserved Township Treatment Capacity; and
WHEREAS, the SCMUA Expansion Bonds mature in the years 2010 to 2039, both inclusive; and
WHEREAS, the General Charge payable by the Township to SCMUA as part of the Annual Charge includes an amount equal to the debt service on the SCMUA Expansion Bonds (the “SCMUA Reserved Capacity Capital Charge”); and
WHEREAS, the Township has not received and does not expect to receive sewer charges from users of its sanitary sewerage collection and transmission facilities in an amount sufficient to pay the Annual Charge due to SCMUA until the year 2017; and
WHEREAS, the annual SCMUA Reserved Capacity Capital Charges payable by the Township to SCMUA in the years 2012 to 2016, both inclusive, total $2,635,754 and are $355,156, $407,343, $509,343, $656,156 and $707,756, respectively; and
WHEREAS, the Township is desirous of restructuring a portion of the cost of acquisition of the Reserved Township Treatment Capacity so that sewer charges expected to be received from users of its sanitary sewerage collection and transmission facilities will be sufficient to pay the annual SCMUA Reserved Capacity Capital Charges, together with the balance of the Annual Charge payable to SCMUA; and
WHEREAS, in order to accomplish the foregoing the Township is desirous of issuing bonds (or bond anticipation notes in anticipation thereof) to provide monies to pay the annual SCMUA Reserved Capacity Capital Charges in the years 2012 to 2016, both inclusive, and any costs associated therewith; and
WHEREAS, the Township expects to initially issue temporary bond anticipation notes for such purpose and to convert such bond anticipation notes to long-term bonds at a time and in a manner such that the sewer charges expected to be received from users of its sanitary sewerage collection and transmission facilities will be sufficient to pay the principal of and interest on such bonds, together with the Annual Charges then and thereafter payable to SCMUA;
NOW, THEREFORE, BE IT ORDAINED by the Township Council of the Township of Vernon, in the County of Sussex, New Jersey (not less than two-thirds of all the members thereof affirmatively concurring), as follows:
Section 1. The improvement described in Section 3 of this bond ordinance is hereby authorized as a general improvement to be made or acquired by The Township of Vernon, in the County of Sussex, New Jersey (the “Township”). For the said improvement or purpose stated in said Section 3, there is hereby appropriated the sum of $2,800,000, said sum being inclusive of all appropriations heretofore made therefor and including the sum of $134,000 as the down payment for said improvement or purpose required by law and now available therefor by virtue of provision in a previously adopted budget or budgets of the Township for down payment or for capital improvement purposes.
Section 2. For the financing of said improvement or purpose and to meet the part of said $2,800,000 appropriation not provided for by application hereunder of said down payment, negotiable bonds of the Township are hereby authorized to be issued in the principal amount of $2,666,000 pursuant to the Local Bond Law of New Jersey. In anticipation of the issuance of said bonds and to temporarily finance said improvement or purpose, negotiable notes of the Township in a principal amount not exceeding $2,666,000 are hereby authorized to be issued pursuant to and within the limitations prescribed by said Local Bond Law.
- The improvement hereby authorized and purpose for the financing of which said obligations are to be issued is the restructuring of a portion of the cost of acquisition of 265,000 gallons per day of reserved sewage treatment capacity at the sanitary sewage treatment plant of The Sussex County Municipal Utilities Authority (“SCMUA”) and being the portion of such cost payable by the Township to SCMUA in the years 2012 to 2016, both inclusive, and being attributable to the cost of construction incurred by SCMUA in connection with an expansion of said sewage treatment plant for such reserved capacity, all as more fully described in the preambles to this bond ordinance.
- The estimated maximum amount of bonds or notes to be issued for said purpose is $2,666,000.
- The estimated cost of said purpose is $2,800,000, the excess thereof over the said estimated maximum amount of bonds or notes to be issued therefor being the amount of the said $134,000 down payment for said purpose.
Section 4. The following additional matters are hereby determined, declared, recited and stated:
- The said purpose described in Section 3 of this bond ordinance is not a current expense and is a property or improvement which the Township may lawfully acquire or make as a general improvement, and no part of the cost thereof has been or shall be specially assessed on property specially benefited thereby.
- The period of usefulness of said purpose within the limitations of said Local Bond Law, according to the reasonable life thereof computed from the date of the said bonds authorized by this bond ordinance, is forty (40) years.
- The supplemental debt statement required by said Local Bond Law has been duly made and filed in the office of the Township Clerk and a complete executed duplicate thereof has been filed in the office of the Director of the Division of Local Government Services in the Department of Community Affairs of the State of New Jersey, and such statement shows that the gross debt of the Township as defined in said Local Bond Law is increased by the authorization of the bonds and notes provided for in this bond ordinance by $2,666,000, and the said obligations authorized by this bond ordinance will be within all debt limitations prescribed by said Local Bond Law.
- An aggregate amount not exceeding $164,246 for interest on said obligations, costs of issuing said obligations and other items of expense listed in and permitted under section 40A:2-20 of said Local Bond Law may be included as part of the cost of said improvement and is included in the foregoing estimate thereof.
Section 5. All bond anticipation notes issued hereunder shall mature at such times as may be determined by the Chief Financial Officer, provided that no note shall mature later than one year from its date. The notes shall bear interest at such rate or rates and be in such form as may be determined by the Chief Financial Officer. The Chief Financial Officer shall determine all matters in connection with the notes issued pursuant to this bond ordinance, and the Chief Financial Officer’s signature upon the notes shall be conclusive evidence as to all such determinations. All notes issued hereunder may be renewed from time to time subject to the provisions of N.J.S.A. §40A:2-8. The Chief Financial Officer is hereby authorized to sell part or all of the notes from time to time at public or private sale and to deliver them to the purchasers thereof upon receipt of payment of the purchase price plus accrued interest from their dates to the dates of delivery thereof. The Chief Financial Officer is directed to report in writing to the governing body of the Township at the meeting next succeeding the date when any sale or delivery of the notes pursuant to this bond ordinance is made. Such report must include the principal amount, interest rate and maturities of the notes sold, the price obtained and the name of the purchaser.
Section 6. The full faith and credit of the Township are hereby pledged to the punctual payment of the principal of and interest on the said obligations authorized by this bond ordinance. Said obligations shall be direct, unlimited obligations of the Township, and, unless paid from revenues of the sanitary sewerage system of the Township, the Township shall be obligated to levy ad valorem taxes upon all the taxable property within the Township for the payment of said obligations and interest thereon without limitation of rate or amount.
Section 7. The capital budget or temporary capital budget of the Township is hereby amended to conform with the provisions of this ordinance to the extent of any inconsistency herewith and the resolutions promulgated by the Local Finance Board showing all detail of the amended capital budget or temporary capital budget and capital program as approved by the Director, Division of Local Government Services, are on file with the Township Clerk and are available for public inspection.
Section 8. This bond ordinance shall take effect twenty (20) days after the first publication thereof after final adoption, as provided by said Local Bond Law.