Loading...
HomeMy WebLinkAbout91-91 - ADMIN Resolution - City Council - 1991/05/06r - RESOLUTION NO. 91-91 RESOLUTION GIVING PRELIMINARY APPROVAL FOR THE ISSUANCE OF SINGLE FAMILY RESIDENTIAL MORTGAGE REVENUE REFUNDING BONDS (GNMA MORTGAGE-BACKED SECURITIES PROGRAM) SERIES 1991-A; AUTHORIZING THE CALL OF THE RESIDENTIAL MORTGAGE REVENUE BONDS, SERIES 1980; AUTHORIZING THE SALE OF CERTAIN SINGLE FAMILY RESIDENTIAL MORTGAGES; AND AUTHORIZING THE PREPARATION OF DOCUMENTS. WHEREAS, the City Council (the "Council") received a proposal requesting that the City of St. Louis Park, Minnesota (the "City") exercise those powers granted to it pursuant to the Municipal Housing Programs Act, Minnesota Statutes, Chapters 462C and 462A as amended (collectively, the "Act") to issue $5,865,000 of the City's Single Family Residential Mortgage Revenue Refunding Bonds (GNMA Mortgage -Backed Securities Program), Series 1991-A (the "Bonds") pursuant to a Trust Indenture (the "Indenture") for the purpose of refunding on June 1, 1991, the remaining $5,865,000 outstanding principal amount of the City's $20,200,000 original principal amount of Residential Mortgage Revenue Bonds, Series 1980, issued as of December 1, 1980 (the "Prior Bonds"), that it sell certain residential mortgages made from the proceeds of, and pledged to the payment of, the Prior Bonds (the "Outstanding Mortgages") and that it use the proceeds of the sale of the Outstanding Mortgages to provide funds to make new single family residential mortgages (the "New Mortgages"); and WHEREAS, a public hearing, duly noticed and held on May 6, 1991, in accordance with Section 147(f) of the Internal Revenue Code of 1986, as amended, was held on the proposal by the City to issue the Bonds to refund the Prior Bonds, and all parties who appeared at the hearing were provided with the opportunity to express their views with respect to the proposal to issue the Bonds to refund the Prior Bonds and interested persons were provided with the opportunity to submit written comments to the City Clerk prior to the time of the hearing; and WHEREAS, the City is required, pursuant to the Indenture of Trust dated as of December 1, 1980 (the "Prior Indenture") relating to the Prior Bonds, to give written notice to First Trust Company of St. Paul (n/k/a First Trust National Association), as trustee (the "Prior Trustee"), of its election to redeem the Prior Bonds as provided in the Prior Indenture, and the Prior Trustee is required to provide the notice of redemption as required by the Prior Indenture at least twenty (20) days prior to the proposed June 1, 1991 call date; and WHEREAS, the City intends to sell the Outstanding Mortgages. Upon the issuance of the Bonds, the proceeds thereof -1- 641:O8N0-3857-364 05-02-91 will be used to defease the Prior Bonds, which are to be redeemed on June 1, 1991 from the proceeds of the Bonds and other available funds. The proceeds of the sale of the Outstanding Mortgages and other available funds held by the Prior Trustee under the Prior Indenture will be used to purchase the New Mortgages, to pay the costs of the financing transaction, and to provide cash to the City. In the event, however, that final approval of the Bonds is for any reason not received, the proceeds of the sale of the Outstanding Mortgages and other available funds are to be used to redeem the Prior Bonds on June 1, 1991. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park as follows: (1) The City hereby finds and determines (a) the issuance of the Bonds will result in a reduction of debt service payments due to the bondholders as a result of lower interest rates on the Bonds versus the Prior Bonds; (b) The issuance of the Bonds and the use of the proceeds thereof to refund the Prior Bonds will allow the City to use the proceeds of the sale of the Outstanding Mortgages to purchase the New Mortgages creating an opportunity for "first time" home buyers to purchase single family housing within the City at a lower interest rate than is currently available to them; (c) Based on the representations of the underwriters for the proposed Bonds, potential buyers exist which would allow for favorable rates and terms on the Bonds; (d) The City has the authority to issue the Bonds based upon the Act. (2) It is desirable for the City to issue the Bonds in an aggregate principal amount not to exceed $5,865,000 in order to refund the Prior Bonds. (3) It is hereby determined to proceed towards the issuance of the Bonds and this Council hereby declares its intent to have the City issue the Bonds under the Act to refund the Prior Bonds. Notwithstanding the foregoing, the adoption of this resolution shall not be deemed to establish a legal obligation of the City or the Council to issue the Bonds and shall not obligate the City to enter into any contract for the sale of the Bonds or to pay any -2- 641•DBND-3857-364 05-02-91 to expenses or fees in connection with the proposed issuance of the Bonds. All details of the Bonds and the provisions for repayment thereof are subject to conditions as the City may specify. The Bonds, if issued, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues and property specifically pledged to the payment thereof, and each Bond, when, as and if issued, shall recite in substance that the Bond, including interest thereon, is payable solely from the revenues and property pledged specifically to the payment thereof, and shall not constitute a debt of the City within the meaning of any constitutional, statutory or Charter limitation. (4) The City Manager is hereby directed to give written notice to the Prior Trustee, pursuant to the terms of the Prior Indenture, of the City's election to redeem the Prior Bonds and to authorize and direct the Prior Trustee to give notice of such redemption of the remaining $5,865,000 outstanding principal amount of the Prior Bonds, which redemption shall occur on June 1, 1991. (5) The sale of the Outstanding Mortgages upon the terms and conditions set forth in Exhibit A hereto, is hereby authorized and approved. The Mayor and the City Manager are authorized to execute and deliver on behalf of the City, or to authorize and direct the Prior Trustee to execute and deliver, a purchase contract or commitment letter with substantially the terms and conditions set forth in Exhibit A hereto and such other terms and minor changes as they may approve, such approval to be conclusively deemed given upon the execution thereof. The Mayor and/or the City Manager are further hereby authorized to execute and deliver, or to authorize and direct the Prior Trustee to execute and deliver, such other documents or certificates, and to take all such actions, or to authorize the Prior Trustee to take all such actions as are necessary for the sale of the Outstanding Mortgages, the application of the proceeds thereof consistent with this resolution and the call of the Prior Bonds, but expressly excluding the authorization, issuance or sale of the Bonds. (6) The proceeds of the sale of the Outstanding Mortgages shall be deposited with the Prior Trustee in an amount at least sufficient, together with other funds held by the Prior Trustee and available therefor, to defease the Prior Bonds, and until such time, if any, -3- 641:D8ND-3857-364 05-02-91 the proceeds of the Bonds are available to refund the Prior Bonds. The proceeds of the sale of the Outstanding Mortgages in excess of the amount necessary to defease the Prior Bonds as described above and not deposited with the Prior Trustee shall be paid to the City. Such proceeds shall be used, to the extent necessary therefor, to pay the costs and expenses associated with the sale of the Outstanding Mortgages, the call and redemption of the Prior Bonds, the costs of issuance of the Bonds, if any, and other costs incurred in connection with the transactions contemplated by this resolution, and, second, to any other lawful purpose. (7) Upon the issuance of the Bonds, proceeds from the sale thereof in the amount of $5,865,000 shall be deposited with the Prior Trustee to be used to redeem the Prior Bonds on June 1, 1991. Upon the receipt of such Bond proceeds, the Prior Trustee shall, in the following order of priority and from amounts then on deposit pursuant to the Prior Indenture and any other funds then held by the Prior Trustee and available therefor, (i) retain such funds as may be required, in addition to the Bond proceeds received, to redeem the Prior Bonds on June 1, 1991, (ii) pay to the Trustee (as defined in the Indenture) pursuant to the Indenture the sum of $5,865,000 to be used to finance the purchase of qualifying single family residences as provided in the Indenture, and (iii) pay any remaining amounts to the City to pay the costs and expenses of issuing the Bonds and refunding the Prior Bonds and for any other lawful purpose. (8) In the event the Bonds are not issued on or prior to June 1, 1991, on such date, the Prior Trustee shall apply the amounts then held under the Prior Indenture (including the net proceeds of the mortgage loan - portfolio sale) and any other funds then held by the Prior Trustee and available therefor, (i) to redeem the Prior Bonds, (ii) to pay the costs and expenses of redeeming the Prior Bonds, and (iii) to pay any remaining amounts to the City for such purposes as the Council may hereafter specify. This resolution shall become effective immediately upon its passage and without publication. (9) -4- 641 DBND-3857-364 05-02-91 ti. (10) Popham, Haik, Schnobrich & Kaufman, Ltd., as Bond Counsel, is hereby authorized to proceed with the preparation of necessary or appropriate documents. Adopted this 6th day of May, 1991. Mayor Reviewed for Administration: Reviewed as to form and execution: City Manager ati5OvU- Pace City Attorney -5- 641.0BND-3857-364 05-02-91