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HomeMy WebLinkAbout87-33 - ADMIN Resolution - City Council - 1987/03/16. RESOLUTION NO. 87-33 RESOLUTION AWARDING THE SALE OF $600,000 GENERAL OBLIGATION BUILDING BONDS, SERIES 1987-C; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT. The City of St. Louis Park, Minnesota (the "City") does ordain: 1. Recitals and Findings. (a) The City will undertake certain improvements (the "Improvements") to its public works building, the estimated cost of which is approximately $600,000. The reasonable life expectancy of the Improvements is at least fifteen (15) years. (b) The Council hereby finds and determines that, for the purpose of financing the Improvements, it is necessary for the City to issue its $600,000 General Obligation Building Bonds, Series 1987-C (the "Bonds"), in accordance with the provisions of its home rule charter and, since (i) the Bonds shall, unless and until converted to fixed rate obligations pursuant to the terms of the Indenture (hereinafter defined), bear interest at a rate varying periodically, (ii) the City has a population of more than 10,000, and (iii) the Bonds will at issuance be rated A or better by a nationally recognized securities rating agency, the City is authorized to negotiate the sale of the Bonds without public sale or competitive bidding pursuant to the provisions of Minnesota Statutes, Section 475.60, Subdivision 2(5). (c) In connection with the issuance of the Bonds, there have been presented to the City and placed on file in the City offices copies of certain agreements, all dated as of March 1, 1987, and including particularly a Trust Indenture (the "Indenture") between the City and First Trust Company, Inc., St. Paul, Minnesota (the "Trustee"); a Standby Bond Purchase Agreement (the "Liquidity Agreement") between the City and Bayerische Vereinsbank AG (Union Bank of Bavaria), acting through its Chicago Branch (the "Bank"); a Remarketing Agreement (the "Remarketing Agreement") between the City and Miller & Schroeder Financial, Inc., Minneapolis, Minnesota (the "Remarketing Agent"); a Tender Agent Agreement (the "Tender Agent Agreement") between the City and the Trustee, as Tender Agent (the "Tender Agent"). (d) Any capitalized but undefined term used in this Resolution shall have the same meaning given to such term in the Indenture. (e) The mandatory sinking fund redemptions of the Bonds, as set forth in Section 3.02 of the Indenture, are hereby combined with the maturities of all the other outstanding general obligation debt of the City, and the Council hereby finds that such combined maturity schedule conforms to the requirements of Minnesota Statutes, Section 475.54, Subdivision 1. 1 2. Authorization of Issuance of Bonds. The City shall issue and sell the Bonds, which shall be dated, shall mature, shall be subject to optional redemption and mandatory sinking fund redemption, shall bear interest at such rates, and shall be subject to the additional terms and conditions provided in the Indenture and in the forms of variable rate (including Bonds in the Variable Rate Mode, Index Mode, and Unit Pricing Mode) and fixed rate Bonds attached as Exhibits A and B, respectively, to the Indenture. 3. Acceptance of Offer to Purchase Bonds. The offer of Miller & Schroeder Financial, Inc. (the "Purchaser") to purchase the Bonds is hereby accepted, such bid being to purchase the Bonds at a price of $594,000 plus accrued interest, if any, to date of delivery, the Bonds to bear interest, to mature in the years and amounts, and to be subject to such other terms and conditions as provided in this Resolution and in the Indenture. 4. Form of Bonds. The Bonds shall be in substantially the form provided in Exhibit A of the Indenture, except that upon conversion to a Fixed Interest Rate, the Bonds shall be in substantially the form provided in Exhibit B of the Indenture. 5. Bond Counsel Opinion. The City Clerk shall obtain a copy of the proposed approving legal opinion of bond counsel, Holmes & Graven, Chartered, of Minneapolis, Minnesota, which shall be complete except as to dating thereof, shall cause such opinion to be filed in the offices of the City, and shall cause said opinion to appear on each of the Bonds, together with a certificate to be signed by the facsimile signature of the City Clerk in substantially the following form: I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion executed by the above-named attorneys, except as to the dating thereof, which opinion has been handed to me for filing in my office prior to the time of delivery of the Bonds. (facsimile signature) City Clerk City of St. Louis Park, Minnesota 6. Execution and Delivery of Bonds. As provided in the Indenture, the Bonds shall be executed on behalf of the City by the facsimile or manual signatures of the Mayor and the City Manager and shall be duly authenticated by the manual signature of an authorized representative of the Trustee (or in the case of Tendered Bonds, of the Tender Agent), as provided in the Indenture. The Bonds, when fully executed, shall be delivered to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obligated to see to the proper application thereof. 7. Debt Service and Project Accounts. (a) Debt Service Account. There is hereby created on the official books and records of the City an account designated as $600,000 General Obligation Building Bonds, Series 1987-C, Debt Service Account (the "Debt Service Account"), which shall be held in trust by the City for the benefit of the Owners from time to time of the Bonds, as hereinafter provided. Until the principal of, interest, and premium, if any, on all of the Bonds are paid, or until all of the Bonds are otherwise discharged as hereinafter provided, 2 there shall be credited to and maintained in the Debt Service Account (1) first, accrued interest, if any, received upon initial sale of the Bonds; and (2) second, the proceeds of any general ad valorem taxes hereafter levied by the City for the purpose of paying the principal of, interest, and premium, if any, on the Bonds. The aforesaid funds in the Debt Service Account shall be used only and exclusively for, and are hereby pledged to, the payment of the Bonds in accordance with their terms, and the payment of fees of the Bank, the Trustee and the Remarketing Agent, except that upon discharge of the Bonds, the City may use any remaining funds as permitted by law. (b) Project Account. All proceeds of the Bonds other than accrued interest, if any, shall be deposited and maintained in a project account or accounts to be used to finance the making of the Improvements (the "Project Accounts"). (c) Payments to Trustee. The City shall timely pay or cause to be timely paid to the Trustee all required payments to the Owners of the Bonds, and the Bank, the Trustee, and the Remarketing Agent, from funds on deposit in the Debt Service Account or from other available funds of the City. (d) Junior Pledge to Liquidity Agreement. The monies in the Debt Service Account shall not be used and are not hereby pledged to make any purchase of a Tendered Bond pursuant to Sections 2.02, 2.04 and 4.01 of the Indenture or to make a mandatory purchase of Bonds on the Conversion Date .or upon the Liquidity Facility Termination Date (except, in each case, for payment of accrued interest on such tender); provided that when all Bonds have been discharged as provided in paragraph 16 of this Resolution and Article X of the Indenture, all pledges made to the Owners of the Bonds in this Resolution with respect to the payment thereof shall to the same extent then secure the payment of all obligations of the City to the Bank arising pursuant to the Liquidity Agreement and such pledge shall continue until such obligations are discharged by the City in full. 9. Bonds are General Obligations. The full faith and credit and taxing powers of the City are hereby pledged to the payment of the principal of, interest, and premium, if any, on the Bonds, and in the event of any current or anticipated deficiency of funds pledged to such purposes pursuant to the Indenture and this Resolution and needed to make any such payment, when due, the City Council shall levy ad valorem taxes on all taxable property in the City in the amount of such deficiency. 10. Execution of Documents Authorized. The Council hereby authorizes the Mayor and City Manager to execute and deliver on behalf of the City the Indenture, the Liquidity Agreement, the Remarketing Agreement and the Tender Agent Agreement all substantially in the respective forms thereof as have been presented to the Council and placed on file in the offices of the City, with, however, such amendments, deletions, and insertions thereto as may be desirable and necessary, upon the recommendation and approval of Bond Counsel (as evidenced by Bond Counsel's issuance of a legal approving opinion on the Bonds), and as evidenced by said City officials' execution of such agreements. 3 11. Liquidity Agreement a General Obligation. Pursuant to Minnesota Statutes, Section 475.54, Subdivision 5a, the City hereby pledges to the payment of the City's obligations which arise and may arise under the Liquidity Agreement the same security as the City has hereby pledged to the payment of the Bonds, provided, however, that with respect to such pledge, the Bank's interest in and right to such pledged assets shall be junior to the rights and interest therein of the Owners of the Bonds; but provided further, however, that to the payment of the City's obligations to the Bank under the Liquidity Agreement, the City hereby specifically pledges its full faith and credit, including its ad valorem taxing powers, and in the event that the funds otherwise pledged hereby to the payment of the City's obligations under the Liquidity Agreement are ever insufficient for such purposes, if necessary, the City hereby agrees to levy ad valorem taxes for such purposes. 12. Debt Service Levy. To provide moneys for the payment of principal and interest on the Bonds there is hereby levied upon all of the taxable property in the Issuer a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of, other general property taxes in said Issuer for the years and in the amounts as follows: Levy Year Collection Year Amount Levied See Exhibit A attached hereto. Said tax levies are such that if collected in full they will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds (except for any interest payable from funds which shall be on hand and irrevocably deposited to the Debt Service Account as of the date of delivery of and payment for the Bonds). For purposes of this levy, the City has determined and estimated an assumed maximum interest rate of 9% per annum, in accordance with Minnesota Statutes, Section 475.55, subdivision 7. Said tax levies shall be irrevocable so long as any of the Bonds are outstanding and unpaid, provided that the Issuer reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, subdivision 3. 13. City Proceedings and Records. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, the Bank and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and to furnish such other certificates, affidavits, and transcripts as may be required to show facts within their knowledge or as shown by the books and records in their custody and under their control relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, shall be deemed representations of the City as to the facts stated therein. 14. Certification of Official Statement. The Mayor, the City Manager, the City Finance Director, and/or the City Clerk are hereby authorized to certify that they have examined the official statement or prospectus prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief said official statement is a complete and 4 EXHIBIT A $600,000 General Obligation Building Bonds Series 1987C Levy Collection Amount Year Year Levied 1987 1988 $ 131,250 1988 1989 102,113 1989 1990 97,388 1990 1991 67,594 1991 1992 65,231 1992 1993 87,938 1993 1994 83,213 1994 1995 78,488 1995 1996 73,763 1996 1997 43,969 1997 1998 41,606 1998 1999 64,313 1999 2000 59,588 2000 2001 54,863 accurate representation of the facts and representations made therein as they relate to the City. 15. General Tax Covenant. The City covenants and agrees with the Purchaser and holders of the Bonds that the investments of proceeds of the Bonds, including the investment of any revenues pledged to the Bonds which are considered proceeds under the applicable regulations, and accumulated sinking funds, if any, shall be limited as to amount and yield in such manner that the Bonds shall not be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and any regulations thereunder. In this regard, the City hereby finds that the aggregate face amount of all tax- exempt bonds (other than private activity bonds within the meaning of Section 141 of the Code) to be issued by the City (including its subordinate entities) during calendar year 1987 is not reasonably expected to exceed $5,000,000. On the basis of the existing facts, estimates and circumstances, including the foregoing findings and covenants, the City hereby certifies that it is not expected that the proceeds of the Bonds will be used in such manner as to cause the Bonds to be arbitrage bonds under Section 148 of the Code and any regulations thereunder. The Mayor and City Manager shall furnish an arbitrage certificate to the Purchaser embracing or based on the foregoing certification at the time of delivery of the Bonds to the Purchaser. The proceeds of the Bonds will likewise be used in such manner that the Bonds are not Private Activity Bonds under Section 103(b) of the Code. 16. Discharge. When any Bond has been discharged as provided in Article X of the Indenture, all pledges, covenants, and other rights granted by this Resolution to the Owner(s) of such Bond shall cease, and such Bond shall no longer be deemed to be outstanding under this Resolution. 17. Information Reporting. The City Clerk is hereby authorized and directed to certify a copy of this Resolution and to cause the same to be filed in the office of the Director of Property Taxation of Hennepin County, together with such other information as the Director of Property Taxation of Hennepin County may require, and to obtain from the Director of Property Taxation of Hennepin County a certificate that the Bonds have been entered upon his bond register. The City covenants that it will file with the Internal Revenue Service the information required under Section 149(e) of the Code. 18. Designation for Bank Eligibility. The City hereby designates the Bonds as "Qualified Tax -Exempt Obligations" within the meaning of Section 265(b)(2)(B) of the Code. With respect to such designation, the City covenants that it does not reasonably anticipate issuing qualified tax-exempt obligations in an aggregate amount greater than $10,000,000 in calendar year 1987. 5 Adopted•by the St. Louis Park City Council on March 16 , 1987. ATTEST: City Clerk Reviewed for Administration: 5iJWLLL Ol . il.VYbL-Y� City anager 6 /ee 1U‘ " Mayor Approved a • to Form and rep: ty Attorney