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HomeMy WebLinkAbout97-60 - ADMIN Resolution - City Council - 1997/04/28RESOLUTION 97-60 PROVIDING FOR THE ISSUANCE AND SALE OF $13,000,000 GENERAL OBLIGATION VARIABLE RATE DEMAND TAX INCREMENT BONDS, SERIES 1997B , WHEREAS, by resolutions duly adopted, the City of St. Louis Park, Minnesota (the "City") has created the following project areas and tax increment districts pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (or their predecessor statutes): (i) Excelsior Boulevard Redevelopment Project, approved February 7, 1977 ("Excelsior Boulevard"); (ii) Oak Park Village Redevelopment Project, approved November 6, 1972 ("Oak Park Village"); and Highway 7 Development Program approved April 15, 1985 ("Highway 7") (Excelsior Boulevard, Oak Park Village and Highway 7 are collectively referred to herein as the "Districts"). The control, authority and operation of the Districts were transferred to St. Louis Park Economic Development Authority (the "EDA") by Resolution No. 88-134 of the City. WHEREAS, by Resolution No. 90-4 of EDA adopted March 19, 1990 and Resolution No. 90-29 of the City adopted on March 19, 1990, the geographical areas of the project areas of the Districts have been expanded and are coterminous (such expanded coterminous area is referred to herein as the "Project Area"). WHEREAS, the City has outstanding with respect to the Districts the following obligations (collectively, the "Prior Bonds"): District Description of Remaining Bonds Excelsior Boulevard $6,205,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985 (the "Series 1985 Bonds") $9,570,000 General Obligation Tax Increment Bonds, Series 1996 (the "Series 1996 Bonds") $7,000,000 General Obligation Tax Increment Bonds, Series 1997A (the "Series 1997A Bonds") Oak Park Village and Highway 7 The Senes 1997A Bonds and the EDA has outstanding with respect to the Districts the following obligations: District Description of Bonds Excelsior Boulevard $7,195,000 Tax Increment Revenue Refunding Bonds of 1994 786149.2 2 423/97 and Oak Park Village (the "Series 1994 Bonds") Highway 7 None WHEREAS, under the law applicable to each District at the time of its creation, the City requested the Hennepin County auditor to certify the assessed value, of all taxable property in each District as of the preceding January 2, which assessed value, now referred to as tax capacity, as adjusted in accordance with law applicable to tax increment computation for such District, is hereinafter referred to as the "Original Tax Capacity". The tax capacity of all taxable property in each District as determined for each year, less the Original Tax Capacity, is hereinafter referred to as the "Captured Tax Capacity." The ad valorem taxes derived from such property by applying to the Captured Tax Capacity the aggregate tax capacity rate levied by all governmental entities having authority to levy taxes on such property is hereinafter referred to as the "Tax Increment." Under applicable law and subject to the limitations thereof, the Hennepin County Auditor is required to pay to EDA in each year the Tax Increment for each District described in Section 1.01 hereof as now established in such year; WHEREAS, the Tax Increment available from the Districts in each year after payment or provision for payment from Excelsior Boulevard of the principal, interest and any redemption price due on the Series 1985 Bonds and the Series 1996 in such year, and after payment or provision of payment, from the Districts, of the principal, interest and any redemption price due in such year on the Series 1994 Bonds and the Series 1996 Bonds shall be referred to in the aggregate as the "Available Tax Increment;" WHEREAS, the City's Home Rule Charter (the "Charter") provides that in addition to the power to borrow and issue bonds granted in the Charter, the City shall have the powers granted to cities of its same class by the laws of the State of Minnesota; WHEREAS, the City's Charter provides that the City may issue bonds to provide funds for any public purpose not prohibited by law; WHEREAS, Minnesota Statutes, Section 469.178, Subd. 2 authorizes the City to issue general obligation bonds to finance any expenditure by the municipality or an authority the jurisdiction of which is wholly or partially within that municipality pursuant to Minnesota Statutes Section 469.176, Subd. 4 in the same manner and subject only to the same conditions as those provided in Minnesota Statutes Chapter 475 for bonds financing improvement costs reimbursable from special assessments and authorizes the City to pledge tax increment revenues for the payment of the principal of and interest on general obligation bonds issued pursuant to such Minnesota Statutes Section 469.178, Subd. 2; WHEREAS, the Authonty is located wholly within the City; 786149.2 3 423/97 1 WHEREAS, the City desires to finance street scape, road and bridge improvements, infrastructure redevelopment, site improvements and soil and site remediations in the Districts (the "Project"); WHEREAS, the expenditure of funds for the Project complies with the requirements of Minnesota Statutes Section 469.176, Subd. 4; WHEREAS, the City will use proceeds of the Bonds to be issued to this resolution (the "Bonds") to finance a project within the meaning of Minnesota Statutes and a public purpose not prohibited by law within the meaning of its Charter; WHEREAS, Minnesota Statutes, Section 475.60 authorizes the City to negotiate the sale of the Bonds if it has retained an independent financial advisor; WHEREAS, the City Council (the "Council") has found and determined and hereby finds and determines that (1) it is necessary and in the best interests of the City to undertake and finance the Project from the proceeds of the Bonds; (2) the issuance of the Bonds is a public purpose not prohibited by law within the meaning of the City's Charter; and (3) Ehlers and Associates, Inc. is serving as financial advisor to the City in connection with the proposed authorization, issuance and sale of the Bonds and is an independent financial advisor pursuant to Minnesota Statutes, Section 475.60, Subdivision 2, paragraph 9; WHEREAS, on March 3, 1997, the Council adopted a resolution which provided for the solicitation of competitive proposals for the negotiated sale of the Bonds; WHEREAS, the City has heretofore incurred substantial costs associated with the printing and issuance of registered obligations in certificated form, and substantial continuing transaction costs relating to their payment, transfer and exchange; WHEREAS, the City has determined that significant savings in transaction costs will result from issuing bonds in "global book -entry form"; NOW, THEREFORE, BE IT RESOLVED by the Council of the City of St. Louis Park, as follows: 1. Acceptance of Offer: Bond Purchase Agreement. The offer of FBS Investment Services, Inc. (the "Purchaser"), to purchase the Bonds, in accordance with and pursuant to that certain Bond Purchase Agreement proposed for execution by the City and the Purchaser (the "Bond Purchase Agreement"), at the initial rate of interest determined as set forth in the Indenture, and to pay for the Bonds the sum of $12,948,000, is hereby accepted. The Mayor and City Manager are authorized to execute and deliver the Bond Purchase Agreement in substantially the form submitted to the City, with such changes, modifications, additions and deletions thereto as shall be necessary or appropriate, as evidenced by their execution and delivery thereof. 786149.2 4 4/23/97 2. Approval of Agreements; Execution; Changes in Forms Approved. The forms of the Indenture of Trust (the "Indenture"), Standby Bond Purchase Agreement and Remarketing Agreement relating to the Bonds which have been submitted to the City are hereby approved in substantially the form submitted, and said agreements are hereby authorized for execution in the name and on behalf of the City by the Mayor and City Manager with such changes, modifications, additions and deletions as shall be necessary or appropriate, as evidenced by their execution and delivery thereof. Any other documents and certificates necessary to the issuance of the Bonds may be executed by the appropriate City officers. The approval hereby given to the various documents referred to above includes approval of such additional details therein or other changes thereto as may be deemed necessary or appropriate, as evidenced by the City's execution and delivery thereof. In the absence of the Mayor or City Manager, any of the documents authorized by this resolution to be executed may be executed by the Acting Mayor, the City Finance Director or by any other officer of the City deemed appropriate. 3. Title; Original Issue Date; Denominations; Maturities. The Bonds shall be titled "General Obligation Variable Rate Demand Tax Increment Bonds, Senes 1997B", shall be dated as provided in the Indenture, and shall be issued forthwith as fully registered bonds. The Bonds shall be numbered, shall be in denominations, and shall mature on the dates and in the amounts set forth in the Indenture. 4. Purpose. The Bonds shall provide funds to assist in financing the Project, and the proceeds thereof are not in excess of the reasonable net unfunded requirements of the Project. The proceeds of the Bonds shall be deposited and used as provided in paragraph 12 of this resolution. The total remaining cost of the Project, which shall include all costs permitted by the Act and enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal .to the amount of the Bonds.' Work on the Project shall proceed with due diligence to completion. The City has sized the Bonds with due consideration for the reasonably anticipated amounts of Tax Increments and expects during the completion of the Project to need all of the proceeds of the Bonds and all of the Tax Increments expected hereafter to be paid to the City for such Project purposes and to pay debt service on the Bonds. 5. Interest. The Bonds shall bear interest which varies and is paid on the dates provided in the Indenture. The City has fixed and determined the interest rates borne by the Bonds by setting the standards for the interest rates in the Indenture and by appointing the Remarketing Agent. 6. Redemption; Purchase of Bonds. The Bonds shall be subject to redemption and prepayment prior to their maturity as provided in the Indenture. When under the terms of the Indenture and the terms of the Bonds the City is directly responsible for the payment 786149.2 5 423/97 of the Purchase Price of Bonds, the full faith and credit, taxing powers and other available assets and revenues of the City are hereby pledged for such purpose. 7. Trustee. Firstar Bank of Minnesota, N.A. as Trustee under the Indenture (the "Trustee") is appointed to act as bond registrar and transfer agent, paying agent and tender agent with respect to the Bonds, as provided in the Indenture. 8. Form of Bond. The Bonds shall be in the form set forth in the Indenture. 9. Execution. The Bonds shall be executed on behalf of the City as provided in the Indenture. 10. Authentication. The Bonds shall be authenticated as provided in the Indenture. 11. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Trustee to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 12. Application of Proceeds, Establishment of Funds, Appropriation. A. The proceeds of the Bonds are revocably appropriated for the purposes set forth herein for the costs of the Project located within the Districts. The City Finance Officer is hereby authorized and directed, simultaneously with the delivery of the Bonds, to create a separate fund designated the "Capital Fund" and, if any interest on the Bonds is funded from Bond proceeds, a separate fund designated "Capitalized Interest Fund" and to deposit the amounts specified in Exhibit A hereto from the proceeds of the Bonds into the Capital Fund, the Capitalized Interest Fund and the Debt Service Fund created in paragraph B below, and shall invest the funds so deposited in securities authorized for such purpose by Minnesota Statutes, Section 475.66. The City Finance Officer is also hereby authorized and directed to pay directly, upon the issuance of the Bonds and invoice therefor, costs of issuance in the amount set forth in Exhibit A hereto. Amounts not so disbursed shall be deposited to the Capital Fund. On May 1, 2002, amounts remaining on deposit under the Capital Fund and the Capitalized Interest Fund, if any, shall be transferred to the Fund established pursuant to paragraph B below unless the City determines that there are unpaid costs of the Project. All amounts on deposit from time to time in the Capital Fund and the Capitalized Interest Fund may be deposited with Bank (as defined in the Standby Bond Purchase Agreement) in a custodial account pending disbursement and pledged to secure the City's obligations under the Standby Bond Purchase Agreement. The Mayor, City Manager or such other appropriate officers of the City are hereby authorized to execute and deliver such custodial and pledge agreements as may be requested by the Bank. 786149.2 6 423/97 B. There is hereby established a special fund to be designated the "General Obligation Variable Rate Demand Tax Increment Bonds, Series 1997B Debt Service Fund" (the "Fund"). The Fund shall be maintained in the manner herein specified until all of the Bonds and interest thereon have been fully paid. The Clerk of the City and all officials and employees concerned therewith shall establish and maintain financial records of the receipts and disbursements in accordance with this Resolution. C. , There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Fund: (a) all Available Tax Increment from the Districts subject to the Parity Pledge (as defined below); (b) the taxes, if any, levied for the payment of principal and interest on the Bonds, (c) all investment earnings on funds held In . the Capital Fund, the Capitalized Interest Fund and the Fund; (d) all collections of taxes which may hereinafter be levied for the payment of the Bonds and (e) any and all other moneys properly available and appropriated in the future by the governing body of the City to the Fund, which may include moneys in the City's General Obligation Debt Service Fund. The Fund shall be used solely to pay the principal and interest and any premiums for redemption of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. The Capitalized Interest Fund shall be used solely to pay interest on the Bonds and the Construction Fund shall be used solely to pay the costs of the Project, including costs of issuing the Bonds, until amounts, if any, in such funds are transferred to the Fund as provided herein. Notwithstanding anything to the contrary set forth in this Resolution, the City Finance Officer may direct all investment earnings on the Construction Fund and the Capitalized Interest fund to be credited to the Construction Fund (so long as the - balance of the Construction Fund has not been transferred to the Fund as set forth in A. above) and used to pay costs of the Project and other issuance costs of the Bonds. D. The City does hereby pledge the full faith and credit and taxing power of the City for the payment of the principal and interest on the Bonds, and does further agree to all the provisions of Minnesota Statutes, Section 469.178, Subd. 2 and Section 6.15 of the Home Rule Charter under which authority and pursuant to which provisions the Bonds are being issued. E. The City does hereby pledge Available Tax Increment from the Districts to the payment of pnncipal of and interest on the Bonds subject to the Parity Pledge (as defined below). F. In connection with the issuance of the Series 1997A Bonds, the City pledged Available Tax Increment to the payment of the Senes 1997A Bonds, but expressly provided that the pledge of Available Tax Increment to the Bonds would be on a panty with the pledge to the Series 1997A Bonds. The pledge of Available Tax Increment herein to the Bonds is hereby expressly made on a parity basis to the 786149.2 7 4,23/97 1 1 1 1 pledge of such Available Tax Increment to the Series 1997A Bonds to the extent permitted by the resolution authorizing the Series 1997A Bonds (hereinafter defined as the "Parity Pledge"). 13. Securities. Securities purchased from moneys in the Fund, the Capital Fund and the Capitalized Interest Fund shall be limited to securities set forth in Minnesota Statutes, Section 475.67, Subdivision 8, and any amendments or supplements thereto. 14. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged. If the monies appropriated and pledged to the payment of principal and interest on the Bonds, together with other funds irrevocably appropriated to the Fund herein established, shall at any time be insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount an ad valorem tax upon all taxable property in the city sufficient to pay such principal and interest as it becomes due. If the balance in the Fund is ever insufficient to pay all principal and interest then due on the Bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, including the General Obligation Debt Service Fund or the general fund of the City, and such other funds may be reimbursed with or without interest from the Fund when a sufficient balance is available therein. 15. Available Tax Increment Pledge. The City hereby pledges Available Tax Increment from the Districts, subject to the Parity Pledge after Series 1997A Bonds, for the prompt and full payment of the principal of and interest on the Bonds, .as the same respectively become due. Promptly upon the receipt from the EDA of an installment of Available Tax Increment from Hennepin County which has been derived from the Districts, the City shall cause such amounts to be deposited into the Funds as follows: (i) with respect to installments of Available Tax Increment received from each August 1 through the next succeeding January 31, as the case may be, there shall be deposited to the Fund that portion of Available Tax Increment received, subject to the Parity Pledge, as shall, together with amounts then on deposit in the fund, equal at least the interest due on the next February 1 and one-half of the principal amount of the Bonds due on the next February 1; and (ii) with respect to installments of Available Tax Increment received from each February 1 to the next succeeding July 30, there shall be deposited to the Fund that portion of the Available Tax Increment received, subject to the Parity Pledge, as shall, together with amounts then on deposit in the Fund, equal at least the interest due on the next February 1 and the principal amount of the Bonds payable on the next February 1. 16. Debt Service Coverage. It is hereby determined that the Available Tax Increments will be in an amount of at least five percent m excess of the amount needed to meet, when due, the regularly scheduled payment of principal of and interest on the Bonds and the Series 1997A Bonds and that no tax levy is needed at this time. 786149.2 8 4/23/97 17. Certificate of Registration. The Clerk is hereby directed to file a certified copy of this Resolution with the Director of Property Taxation of Hennepin County, together with such other information as the County Auditor shall require, and to obtain the County Auditor's certificate that the Bonds have been entered in the County Auditor's Bond Register as required by Minnesota Statutes, Section 475.63. 18. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. • 19. Defeasance. When all Bonds have been discharged as provided in the Indenture, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. 20. Tax Status of the Bonds. The interest on the Bonds is includeable in the gross income of the owner thereof for federal income tax purposes and State of Minnesota taxation under current law. 21. Letter of Representations. The approval and execution of the Letter of Representations to the Depository Trust Company is hereby ratified and confirmed by the Mayor, the City Manager or any member of the City Council are hereby authorized to execute any further assurance in connection therewith requested by the Depository Trust Company with such provisions, changes, modifications, additions and deletions as shall be necessary and appropriate and approved by Bond Counsel. Execution by such officers of such further assurance shall be conclusive evidence as to the necessity and propriety of changes and their approval by Bond Counsel. So long as The Depository Trust Company is the Depository or it or its nominee is the Holder of any Global Certificate, the City shall comply with the provisions of the Letter of Representations, as it may be amended or supplemented by the City from time to time with the agreement or consent of The Depository Trust Company. 22. Official Statement. The Mayor, City Manager and City Clerk are hereby authorized and directed to certify that they have examined the official statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief said statement is a complete and accurate representation of the facts and representations made therein as of the date of said official statement or prospectus as it relates to the City. The use by the Purchaser of the Official Statement in connection with the initial sale of the Bonds is hereby approved and ratified. 786149 2 9 4/23/97 1 1 r r 23. Continuing Disclosure. In order to comply with the provisions of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), the Mayor, City Manager and City Clerk, or in their absence any member of the City Council, are hereby authorized and directed to execute and deliver a continuing disclosure certificate, undertaking or agreement for the benefit of the beneficial holders of the Bonds and the participating underwriters wherein the City covenants and agrees to provide the annual information and the event notices required by the Rule. The undertaking will be executed and delivered by the City at the time the Bonds are delivered and may be executed and shall be valid and binding upon the execution by one of the above- mentioned officers of the City. 24. Project Costs. The City has previously adopted and subsequently modified a development program for the Highway 7 District and redevelopment plans for the Oak Park Village and Excelsior Boulevard Districts which previously identified the expenditures constituting the Project as a part of such program and plans. The City hereby represents that set forth in Exhibit B hereto is a more detailed statement of such proposed expenditures as they are currently known, which proposed expenditures were previously identified by the program or plans for the Districts and constitute permissible expenditures for tax increment and the proceeds of the Bonds pursuant to law and the program and plans. Exhibit B being provided as a more particular statement of costs previously identified, which costs are subject to change or replacement and the inclusion of Exhibit B shall not limit the use of the proceeds of the Bonds or constitute a modification to any plan or program. 25. Covenant to Fix Interest Rate. The City hereby covenants that upon the expenditure of funds in the Capital Fund for costs of the Project in an amount at least equal to $3,000,000 (for which Bonds have not been prepaid as set forth in this paragraph), the City will prepay such amount from the proceeds of a borrowing which bears interest at a fixed rate or rates within a reasonable period of time following the expenditure of such amount; provided that the City can legally incur such additional debt and such debt is at commercially reasonable rates with commercially reasonable terms. Failure by the City to obtain fixed rate debt as set forth in this paragraph shall not constitute a default with respect to the Bonds, the Indenture or any related document. 26. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 27. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. 28. Effective Date. This resolution shall become effective immediately upon adoption. 786149.2 10 4/23/97 Attest: Reviewed for Administration: 4..../7,.,w/,‘,_ City Manager Adopted by the City Council April 28, 1997 786149.2 i2 4(23/97 EXHIBIT A Deposits of Bond Proceeds: To the Capital Fund: $12,948,000 To the Capitalized Interest Fund: $ -0- To the Fund: $ -0- Payment of Costs of Issuance $ 53,500 786149.2 A-1 4/23/97 EXHIBIT B PROJECT COSTS 786149.2 B-1 4/23/97 Project Detail S7,000,000 C.O. Tax Increment Bonds, Series 1997A Sutnmary The information provided below attempts to specify projects, provide a description of project related activities and associated costs that are anticipated to commence in St. Lou:a Park in the next 1-3 years. Of the 525.000,000 estimated total costs of the projects, at least 57,000,000 is resonably expected to be expended in the 1-3 years (ubich soma projects may be conducted in phases) Tho tax-exempt band proceeds are intended to pay a portion of the project costs which qualify for use of such proceeds. To the extent that additional funduig exceeding the S7,000,000 bond issue is needed, the City of St. Louis Park vsrll uulize other available financing sources. Project Varna Excelsior Boulevard stroaacape unprovezaenta Excelsior/HWY. 100 Bridge Infrastructure Redevelopment Soil and Site Reutecraticn. ESTIalATED TOTAL COST c:/edoffioelprojbond doc pescripuon Phase 3 (1997), Phase 4 (2000) Includes sidewalks, landscaping, lighting, boulevard and median (re)cooatrucaton, and utility (re)construction Iikpansion and improvement of 13ndgo to facilitate continued traffic growth and commercial redevelopment achwaies (2003-2001) Street and utility improvements, relocation cc replacement and upgrading of infrastructure, and improvements to Wolfe Park Sod replacements and clean-up of contaminated or hazardous sites to mitigate blighting or unsafe environmental conditions Location et. Cost phtrcl�sl/Projoct(r) Excelsior Boulevard 56,000,000 Excelsior Boulevard from France Avenue to Quentin Avenue Intersection of S3,000,000 Excelsior Boulevard Excelsior Bot.levard and Highway 100 NE quadrant of Hwy_100 53,000,000 Excelsior Boulevard and E xoelsior Boulevard Oak Park Village and Monterey Dnve and T.l{ 7 Hwy 7/Lows ana area Highway 7/Lcaustana 513,000.000 Hwy. 7 Redevelopmeni Wolfe Park Excelsior Boulevard 325,000,000