City of Burlington, Vermont
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PRELIMINARY OFFICIAL STATEMENT DATED MARCH 9, 2016 NEW ISSUE: FULL BOOK-ENTRY ONLY Ratings: Moody’s “A3” In the opinion of Burak Anderson & Melloni, PLC, Bond Counsel, based upon an analysis of existing laws, regulations and rulings, and assuming, among other matters, the accuracy of certain representations of the City and the compliance with certain covenants, interest on the Series 2016A Bonds will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”), and will not be an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations; however, such interest will be included in determining the adjusted current earnings for purposes of calculating the federal alternative minimum tax imposed on certain corporations. Bond Counsel is further of the opinion that, under existing law, the interest on the Series 2016A Bonds is not subject to the Vermont personal income tax or the Vermont corporate income tax. See “Tax Exemption” and “Appendix B – Form of Proposed Legal Opinion” herein. OFFICIAL STATEMENT $16,930,000* CITY OF BURLINGTON, VERMONT General Obligation Refunding Bonds, Series 2016A Dated: Date of Delivery Due: November 1, as shown on the inside cover The $16,930,000* General Obligation Refunding Bonds, Series 2016A (the “Series 2016A Bonds” or “Bonds”) are general obligations of the City of Burlington, Vermont (the “City”), within which all taxable real property is subject to the levy of ad valorem taxes to pay the Series 2016A Bonds and interest thereon. The proceeds of the Series 2016A Bonds shall be used for the purposes of: (i) refunding certain outstanding debt of the City and (ii) paying certain costs of issuance of the Series 2016A Bonds. The Series 2016A Bonds are being issued pursuant to (i) Sections 59 and 60 of the Charter of the City and (ii) resolutions of the City Council. The Series 2016A Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). DTC will act as securities depository of the Series 2016A Bonds. Individual purchases may be made in book-entry form only, in the principal amount of $5,000 or integral multiples thereof. Purchasers will not receive certificates representing their interest in the Series 2016A Bonds purchased. Principal of the Series 2016A Bonds, payable annually on each November 1, commencing November 1, 2016, and interest on the Series 2016A Bonds, payable on each May 1 and November 1, commencing November 1, 2016, will be paid to DTC which will in turn remit such principal and interest to its participants for subsequent dispersal to the beneficial owners of the Series 2016A Bonds as described herein. (See “Book-Entry Only System” herein.) The Series 2016A Bonds are subject to optional and mandatory redemption prior to maturity as described herein. The Series 2016A Bonds are issued when, as and if issued and received by the Underwriter and subject to the receipt of the legal opinion of Burak Anderson & Melloni, PLC of Burlington, Vermont, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the Underwriter by its counsel, Primmer Piper Eggleston & Cramer PC, Montpelier, Vermont. It is expected that delivery of the Series 2016A Bonds will be made on or about April __, 2016 through the facilities of DTC. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed decision. Wells Fargo Securities This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final in prior be accepted buy delivered is Statement Official time the the to to offers may nor sold be not securities These may This Preliminary amendment. or completion subject to are herein contained information the and Statement Official would solicitation or sale sale of these securities jurisdictionbuy nor shall there be any in any in which such offer, to Under no circumstances shall this Preliminary to sell or the solicitation of an offer Official Statement constitute an offer form. such jurisdiction. prior of any or qualification under the securities to registration be unlawful laws * Preliminary, subject to change. MATURITY SCHEDULES $16,930,000* Series 2016A Bonds Serial Bonds Maturity Principal Interest Price November 1* Amount* Rate or Yield CUSIP** 2016 $ 300,000 % % 2017 865,000 2018 1,025,000 2019 1,435,000 2020 1,500,000 2021 1,560,000 2022 1,655,000 2023 1,670,000 2024 1,415,000 2025 1,495,000 2026 1,385,000 2027 965,000 2028 805,000 2029 855,000 The Series 2016A Bonds are subject to optional and mandatory redemption prior to maturity as described herein. + Priced to the call date of November 1, 2026. * Preliminary, subject to change. **The CUSIP (Committee on Uniform Securities Identification Procedures) numbers appearing in this Official Statement have been assigned by an organization not affiliated with the City or the Underwriter, and neither the City nor the Underwriter is responsible for the selection or use of CUSIP numbers. The CUSIP numbers appearing in this Official Statement are included solely for the convenience of holders of the Bonds and no representation is made as to the correctness of any CUSIP number appearing in this Official Statement. Any CUSIP number assigned to any of the Bonds may be changed during the term of the Bonds based on a number of factors including without limitation the refunding or defeasance of such issue or the use of secondary market financial products. Neither the City nor the Underwriter has agreed to, nor does either of such parties have any duty or obligation to, update this Official Statement to reflect any change or correction in any CUSIP number included in this Official Statement. No dealer, broker, salesman or other person has been authorized by the City of Burlington, Vermont (the “City”) to give any information or to make any representations, other than those contained in this Official Statement and if given or made, such information or representations must not be relied upon as having been authorized. This Official Statement does not constitute an offer to sell or solicitation of an offer to buy any of the Series 2016A Bonds in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The information, estimates and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The Underwriter has provided the following sentence and paragraph for inclusion in this Official Statement: “The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of its responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.” IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. The order and placement of materials in this Official Statement, including the Appendices, are not to be deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the Appendices, must be considered in its entirety. IN MAKING ANY INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Other than as to matters expressly set forth in “Appendix A – Audited Financial Statements for FY 2015” herein, the Independent Auditors of the City are not passing on and do not assume any responsibility for the accuracy or adequacy of the statements made in this Official Statement and make no representation that they have independently verified the same. The City deems this Official Statement to be “final” for purposes of Securities and Exchange Commission (“SEC”) Rule 15c2-12(b)(1) (“Rule”), but this Official Statement is subject to revision or amendment to the extent provided for by the Rule. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan”, “expect”, “anticipate”, “estimate”, “budget”, “forecast”, or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The City does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based, occur.