Montgomery Drain Drainage District
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PRELIMINARY OFFICIAL STATEMENT DATED: AUGUST 14, 2020 New Issue Rating: S&P Global Ratings:† AA Book-Entry-Only In the opinion of Dickinson Wright PLLC, Bond Counsel, subject to compliance with certain covenants, under existing law, (1) the interest on the Bonds is excluded from gross income for federal income tax purposes except as described under “TAX MATTERS” herein, and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax and (2) the Bonds and the interest thereon are exempt from all taxation by the State of Michigan or a political subdivision thereof, except estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. $29,395,000* MONTGOMERY DRAIN DRAINAGE DISTRICT County of Ingham, State of Michigan Drain Bonds, Series 2020A (General Obligation Limited Tax) Date of Sale: Tuesday, August 25, 2020 Time: 1:30 PM, ET PURPOSE AND SECURITY: The Bonds, are to be issued pursuant to the provisions of Act 40, Public Acts of Michigan, 1956, as amended, a resolution adopted by the Drainage Board for the Drainage District (the “Resolution”), and an Order of the Ingham County Drain Commissioner to defray, together with one or more additional series of bonds (the “Additional Bonds”), part of the cost of constructing the Montgomery Drain Maintenance and Improvement Project (the “Project”). The Bonds and Additional Bonds are to be issued in anticipation of, and the principal and interest thereon are primarily payable from, collections of special assessments assessed against the City of Lansing, the City of East Lansing, the Charter Township of Lansing, the County of Ingham and the State of Michigan and a supplemental special assessment for the City’s legal and financial costs in connection with the Bonds levied against the City of Lansing (the “Special Assessments”). The Bonds and the Additional Bonds shall be of equal standing and priority with respect to the Special Assessments. The principal amount of the Bonds and the Additional Bonds will not exceed the amount of the Special Assessments and the installments of the Special Assessments and the interest thereon will be sufficient to pay the principal of and interest on the Bonds when due. Certain other supplemental special assessments which have been or may be levied against the City of Lansing or the State of Michigan for certain supplemental aspects of the Project not financed with the proceeds of the Bonds are not pledged to the payment of the Bonds. The full faith and credit of the Drainage District have been pledged for the prompt payment of the Bonds and the interest thereon as the same become due. FULL FAITH AND CREDIT: Pursuant to a resolution adopted by its Board of Commissioners, the County of Ingham (the “County”) has pledged its full faith and credit as additional security for the payment of the principal of and interest on the Bonds. In the event and to the extent that moneys required to pay such principal and interest are not collected from the aforementioned special assessments, the County is obligated to advance from its general fund moneys sufficient to pay such principal and interest. The County’s ability to raise such funds is subject to constitutional and statutory limitations on the taxing power of the County. BOOK-ENTRY-ONLY: The Bonds are issuable only as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as Bondholder and nominee of The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book- entry-only form, in the denominations of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their beneficial interest in the Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. “THE BONDS - Book-Entry-Only System” herein. PAYMENT OF BONDS: Interest on the Bonds will be payable semiannually on August 1 and February 1 of each year commencing on February 1, 2021. The Bonds will be registered bonds, of the denomination of $5,000 or multiples thereof not exceeding for each maturity the principal amount of such maturity. The principal and interest shall be paid by The Huntington National Bank, Grand Rapids, Michigan (the “Paying Agent”) or such other Paying Agent as the County may hereafter designate by notice mailed to the registered owner. Interest shall be paid when due by check mailed to the registered owner as shown by the registration books as of the fifteenth day of the month preceding the payment date for each interest payment. Payment of principal and interest to Beneficial Owners shall be made as described in “THE BONDS - Book-Entry Only System” herein. Dated/Delivery: To Be Determined (Estimated to be September 8, 2020) Principal Due: August 1 Purchase Price: Not less than 99% or more than 102% of par value Maximum Interest Rate: 5.00% Multiples: 1/8th or 1/100th of 1% or both Maximum Interest Spread: 3.00% The Bonds will mature on August 1 in the years and amounts as follows: CUSIP§ Interest CUSIP§ Interest Numbers Year Amount* Rate Yield Numbers Year Amount* Rate Yield 2021 $645,000 2036 $950,000 2022 605,000 2037 980,000 2023 625,000 2038 1,010,000 2024 645,000 2039 1,050,000 2025 660,000 2040 1,085,000 2026 690,000 2041 1,115,000 2027 715,000 2042 1,160,000 2028 735,000 2043 1,200,000 2029 755,000 2044 1,245,000 2030 785,000 2045 1,285,000 2031 810,000 2046 1,335,000 2032 835,000 2047 1,380,000 2033 865,000 2048 1,425,000 2034 890,000 2049 1,475,000 2035 915,000 2050 1,525,000 INTEREST RATE RESTRICTION: Bonds maturing in any one year shall not bear an interest rate lower than the preceding year. ADJUSTMENT IN PRINCIPAL AMOUNT: Following receipt of bids and prior to final award, the Drainage District reserves the right to increase or decrease the principal amount of the Bonds. Such adjustment, if necessary, will be made in increments of $5,000, and may be made in one or more maturities. See “ADJUSTMENT IN PRINCIPAL AMOUNT” herein and in Appendix L, Draft Notice of Sale. ADJUSTMENT TO PURCHASE PRICE: The purchase price of the Bonds will be adjusted proportionately to the adjustment in principal amount of the Bonds and in such manner as to maintain as comparable an underwriter spread as possible to the winning bid. See “ADJUSTMENT IN PRINCIPAL AMOUNT” herein and in Appendix L, Draft Notice of Sale. TERM BOND OPTION: Bidders shall have the option of designating bonds as serial bonds or term bonds, or both as described herein. Any such designation must be made within 24 hours of the sale. PRIOR REDEMPTION: Bonds maturing on or prior to August 1, 2027, are not subject to redemption prior to maturity. Bonds maturing on and after August 1, 2028, are subject to redemption prior to maturity, at the option of the Drainage District as described herein. BOND COUNSEL: The Bonds will be offered when, as and if issued by the Drainage District subject to the approving legal opinion of Dickinson Wright PLLC, Grand Rapids, Michigan, Bond Counsel. This cover page contains information for a quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Additional information relative to this Bond issue may be obtained from: PFM Financial Advisors LLC 555 Briarwood Circle, Suite 333 Ann Arbor, MI 48108 734-994-9700 The date of this Official Statement is: August __, 2020. † For an explanation of ratings, see “RATING” herein. * Preliminary, subject to change. § Copyright 2020, American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed on behalf of the American Bankers Association by S&P Global Marketing Intelligence. The This Preliminary Official Statement and the information contained herein is subject to completion and amendment. These securities may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. Under no form. in final buy be accepted prior to the time Official Statement is delivered to an offer not be sold nor may These securities may This Preliminary contained herein is subject to completion and amendment. Official Statement and the information prior or qualification to registration would be unlawful solicitation or sale jurisdiction in any in which such offer, sale of the Bonds, nor shall there be any buy, to circumstances shall this Preliminary to sell or the solicitation of an offer Official Statement constitute an offer permitted for the information by SEC Rule 15c2-12(b)(1). to be omitted for purposes except Drainage District by the of SEC Rule 15c2-12(b)(1) this Preliminary “deemed final” As of its date, Official Statement has been such jurisdiction. of any under the securities laws Drainage District shall not be responsible for the selection of CUSIP numbers, nor any representation made as to their correctness on the Bonds or as indicated above. COUNTY OF INGHAM Ingham County Courthouse 341 South Jefferson Street Mason, Michigan 48854 Phone: (517) 676-7220 Fax: (517) 676-7242 COUNTY BOARD OF COMMISSIONERS VICE VICE CHAIRPERSON CHAIRPERSON CHAIRPERSON PRO-TEM Bryan Crenshaw Carol Koenig Robin Naeyaert MEMBERS Victor Celentino Randy Maiville Thomas Morgan Ryan Sebolt Chris Trubac Emily Stivers Derrell Slaughter Mark Grebner Mark Polsdofer Todd Tennis Randy Schafer TREASURER Eric A.