6.2 Ordinance No. 22-11131 2nd Reading SFC GlobalCITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
09/26/2022 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL:
NO: 6 BY:
ITEM City Clerk's Office FINAL APPROVAL:
NO: 2 ��
Page 1 BY: JoVonna A. Rutherford, City Clerk BY:
ITEM: Ordinance No. 22-111:31
Second reading of Ordinance No. 22-11131, authorizing the issuance of $270,000,000 Taxable
Industrial Revenue Bonds Series 2022 (SFC Global Supply Chain Project).
BACKGROUND:
Ordinance No. 22-11131 was passed on first reading on September 19, 2022. No comments have
been received since that time.
FISCAL NOTE:
The city is not responsible for any of the financial costs for the issuance of and payments on these
bonds. These bonds also do not get included in the calucaiton of the city's legal debt limit. Future
financial affect on the issuance of these IRBs is the abatement of property tax on the proerpty for a
period of up to ten years.
COMMISSION ACTION OR RECOMMENDED ACTION:
Staff has identified the following options for the City Commission's consideration:
1.) Approve Ordinance No. 22-11131 on second reading.
2.) Approve Ordinance No. 22-11131 on second reading with amendments as the City
Commission deems appropriate.
3.) Postpone consideration of Ordinance No. 22-11131 on second reading to a specified date and
time and provide staff direction regarding additional information or amendments the City
Commission would like to request for their further consideration.
4.) Vote to deny Ordinance No. 22-11131 on second reading if it is not in the public's interest to
authorize issuance of the Taxable Industrial Revenue Bonds.
Staff recommends Option #1
Attachments:
CC: Ordinance No. 22-11131
ORDINANCE NO. 22-11131
OF THE
CITY OF SALINA, KANSAS
AUTHORIZING THE ISSUANCE OF
$270,000,000
TAXABLE INDUSTRIAL REVENUE BONDS
SERIES 2022
(SFC GLOBAL SUPPLY CHAIN PROJECT)
v.2
GILMORE & BELL, P.C.
SEPTEMBER 14, 2022
(Summary Published in The Salina Journal, September 30, 2022)
ORDINANCE NO. 22-11131
AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS TO ISSUE
ITS TAXABLE INDUSTRIAL REVENUE BONDS, SERIES 2022 (SFC GLOBAL
SUPPLY CHAIN PROJECT) FOR THE PURPOSE OF THE ACQUISITION,
CONSTRUCTION AND EQUIPPING OF ADDITIONS TO AN EXISTING
COMMERCIAL FACILITY; AND AUTHORIZING OTHER RELATED
DOCUMENTS AND ACTIONS.
THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HAS FOUND AND
DETERMINED:
A. The City of Salina, Kansas (the "Issuer") is authorized by K.S.A. 12-1740 et seq., as
amended (the "Act"), to acquire, construct, improve and equip facilities (as defined in the Act) for
commercial, industrial and manufacturing purposes, to enter into leases and lease -purchase agreements with
any person, firm or corporation for the facilities.
B. The Issuer's governing body has determined that it is desirable in order to promote,
stimulate and develop the general economic welfare and prosperity of the Issuer and the State of Kansas that
the Issuer issue its Taxable Industrial Revenue Bonds, Series 2022 (SFC Global Supply Chain Project) in
the aggregate principal amount of $270,000,000 (the "Series 2022 Bonds"), for the purpose of paying the
costs of the acquisition, construction and equipping of additions to a commercial facility (the "Project") as
more fully described in the Indenture and in the Lease authorized in this Ordinance, for lease to SFC Global
Supply Chain, Inc., a Minnesota Corporation (the "Tenant").
C. The Issuer's governing body finds that it is necessary and desirable in connection with the
issuance of the Series 2022 Bonds to execute and deliver the following documents (collectively, the "Bond
Documents"):
(i) a Trust Indenture (the "Indenture"), with Security Bank of Kansas City, Kansas City, Kansas, as
Trustee (the "Trustee"), prescribing the terms and conditions of issuing and securing the Series 2022
Bonds;
(ii) a Site Lease (the "Site Lease") with the Tenant under which the Tenant will lease an interest in
the Real Property to the Issuer;
(iii) a Project Lease (the "Project Lease") with the Tenant, under which the Issuer will acquire,
construct and equip the Project and lease it to the Tenant in consideration of Basic Rent and other
payments; and
(iv) a Bond Purchase Agreement (the "Bond Purchase Agreement") providing for the sale of the
Series 2022 Bonds by the Issuer to SFC Global Supply Chain, Inc., Salina, Kansas (the
"Purchaser").
D. The Issuer's governing body has found that under the provisions of K.S.A. 79-201a Twenty -
Fourth, the Project purchased or constructed with the proceeds of the Series 2022 Bonds is eligible for
exemption from ad valorem property taxes for up to ten (10) years, commencing in the calendar year
following the calendar year in which the Bonds are issued, if proper application is made, provided no
exemption may be granted from the ad valorem property tax levied by a school district pursuant to the
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provisions of K.S.A. 72-53,113, and amendments thereto. The Issuer's governing body has further found
that the Project should be exempt from ad valorem property taxes for a period of ten (10) years. Prior to
making this determination, the governing body of the Issuer has conducted the public hearing and reviewed
the analysis of costs and benefits of the exemption required by K.S.A. 12-1749d.
NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY
OF SALINA, KANSAS:
Section 1. Definition of Terms. All terms and phrases not otherwise defined in this Ordinance
will have the meanings set forth in the Indenture and the Project Lease.
Section 2. Authority to Cause the Project to Be Purchased and Constructed. The Issuer is
authorized to lease the Real Property and cause the Project to be acquired, constructed and equipped in the
manner described in the Indenture, the Site Lease and the Project Lease.
Section 3. Authorization of and Security for the Bonds. The Issuer is authorized and directed to
issue the Series 2022 Bonds, to be designated "City of Salina, Kansas Taxable Industrial Revenue Bonds,
Series 2022 (SFC Global Supply Chain Project)" in the aggregate principal amount of $270,000,000, for the
purpose of providing funds to pay the costs of the acquisition, construction and equipping of the Project.
The Series 2022 Bonds will be dated and bear interest, will mature and be payable at the times, will be in the
forms, will be subject to redemption and payment prior to maturity, and will be issued according to the
provisions, covenants and agreements in the Indenture. The Series 2022 Bonds will be special limited
obligations of the Issuer payable solely from the Trust Estate under the Indenture, including revenues
derived from the Project Lease. The Series 2022 Bonds will not be general obligations of the Issuer, nor
constitute a pledge of the faith and credit of the Issuer, and will not be payable in any manner by taxation.
Section 4. Authorization of Indenture. The Issuer is authorized to enter into the Indenture with
the Trustee in the form approved in this Ordinance. The Issuer will pledge the Trust Estate described in the
Indenture to the Trustee for the benefit of the owners of the Series 2022 Bonds on the terms and conditions
in the Indenture.
Section 5. Lease of the Project. The Issuer will lease an interest in the Real Property and acquire,
construct and equip the Project and lease it to the Tenant according to the provisions of the Site Lease and
Project Lease in the form approved in this Ordinance.
Section 6. Authorization of Bond Purchase Agreement. The Issuer is authorized to sell the
Series 2022 Bonds to the Purchaser, according to the terms and provisions of the Bond Purchase Agreement,
in the form approved in this Ordinance.
Section 7. Execution of Bonds and Bond Documents. The Mayor of the Issuer is authorized and
directed to execute the Series 2022 Bonds and deliver them to the Trustee for authentication on behalf of the
Issuer in the manner provided by the Act and in the Indenture. The Mayor, or member of the Issuer's
governing body authorized by law to exercise the powers and duties of the Mayor in the Mayor's absence, is
further authorized and directed to execute and deliver the Bond Documents on behalf of the Issuer in
substantially the forms presented for review prior to final passage of this Ordinance, with the corrections or
amendments as the Mayor or other person lawfully acting in the absence of the Mayor may approve, which
approval shall be evidenced by his or her signature. The authorized signatory may sign and deliver all other
documents, certificates or instruments as may be necessary or desirable to carry out the purposes and intent
of this Ordinance and the Bond Documents. The City Clerk or the Deputy City Clerk of the Issuer is hereby
authorized and directed to attest the execution of the Series 2022 Bonds, the Bond Documents and the other
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documents, certificates and instruments as may be necessary or desirable to carry out the intent of this
Ordinance under the Issuer's corporate seal.
Section 8. Pledge of the Project and Net Lease Rentals. The Issuer hereby pledges the Project
and the net rentals generated under the Project Lease to the payment of the Series 2022 Bonds in accordance
with K.S.A. 12-1744. The lien created by the pledge will be discharged when all of the Series 2022 Bonds
are paid or deemed to have been paid under the Indenture.
Section 9. Authority To Correct Errors and Omissions. The Mayor or member of the
Issuer's governing body authorized to exercise the powers and duties of the Mayor in the Mayor's absence,
the City Clerk and any Deputy City Clerk are hereby authorized and directed to make any alterations,
changes or additions in the instruments herein approved, authorized and confirmed which may be
necessary to correct errors or omissions therein or to conform the same to the other provisions of the
instruments or to the provisions of this Ordinance.
Section 10. Further Authority. The officials, officers, agents and employees of the Issuer are
authorized and directed to take whatever action and execute whatever other documents or certificates as may
be necessary or desirable to carry out the provisions of this Ordinance and to carry out and perform the
duties of the Issuer with respect to the Series 2022 Bonds and the Bond Documents.
Section 11. Effective Date. This Ordinance shall take effect after its final passage by the
governing body of the Issuer, signature by the Mayor and publication of a summary thereof once in the
Issuer's official newspaper.
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PASSED by the governing body of the Issuer on Ordinance and SIGNED by the Mayor.
(SEAL)
ATTEST:
Mayor
City Clerk
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(Signature Page to Bond (<F_OrdinanceResolution_»)