City Council Resolution 2005-122THE CITY OF MONTICELLO, MINNESOTA
RESOLUTION NO. 2005-122
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MONTICELLO,
MINNESOTA (THE "CITY") AUTHORIZING THE ISSUANCE, SALE, AND
DELIVERY OF THE CITY'S REVENUE NOTE (ICE ARENA PROJECT)
SERIES 2006A AND REVENUE NOTE (ICE ARENA PROJECT) SERIES 2006B,
WHICH NOTES AND THE INTEREST AND ANY PREMIUM THEREON
SHALL BE PAYABLE SOLELY FROM REVENUES PLEDGED THERETO;
APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND
DELIVERY OF A LOAN AGREEMENT AND AN ASSIGNMENT OF LOAN
AGREEMENT, AND CONSENT TO A MORTGAGE AND SECURITY
AGREEMENT; AND APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION AND DELIVERY OF THE NOTES
WHEREAS, the City of Monticello, Minnesota (the "City") is a statutory city duly organized and
existing under the Constitution and laws of the State of Minnesota; and
WHEREAS, pursuant to the Constitution and laws of the State of Minnesota, particularly
Minnesota Statutes, Sections 469.152-469.1651, as amended (the "Act"), the City is authorized to carry
out the public purposes described therein and contemplated thereby by issuing its Notes to finance or
refinance the cost of the acquisition, renovation, construction, improving and equipping of certain revenue
producing facilities to be located within its corporate boundaries, and is authorized to enter into revenue
agreements made in connection therewith and pledge those agreements as security for the payment of the
principal of and interest on any such Notes; and
WHEREAS, Monticello Youth Hockey Program, Inc., a Minnesota nonprofit corporation (the
"Borrower") has proposed that the City issue its Revenue Note (Ice Arena Project), Series 2006A (the
"Series 2006A Note) and its Revenue Note (Ice Arena Project), Series 2006B (the "Series 2006B Note,"
and collectively with the Series 2006A Note, the "Notes") in an original principal amount not to exceed
$1,870,000 and loan the proceeds derived from the sale of the Notes to the Borrower to finance the costs
of construction, acquisition and equipping of a 425 -seat ice arena facility, located at 302 Washington
Street in the City (the "Project"); and
WHEREAS, the Notes are proposed to be purchased by First National Bank of Elk River (the
"Lender") and the proceeds derived from the sale of the Notes will be loaned to the Borrower pursuant to
the terms of a Loan Agreement, dated on or after January 1, 2006 (the "Loan Agreement") between the City
and the Borrower; and
WHEREAS, the payment of the principal of, premium, if any, and interest on the Notes will be
secured by: (i) the revenues derived from the Loan Agreement to be assigned to the Lender pursuant to the
terms of the Assignment of Loan Agreement, dated on or after January 1, 2006 (the "Assignment"), from
the City to the Lender; (ii) the Mortgage and Security Agreement, dated on or after January 1, 2006 (the
"Mortgage"), executed by the Borrower to convey its leasehold interests in the Project to the Lender and
consented to by the School District and the City; and (iii) certain other security granted by the Borrower;
and
WHEREAS, the principal and interest on said Notes shall be payable solely from the revenues
pledged therefor and the Notes shall not constitute a general or moral obligation or a debt of the City
within the meaning of any constitutional or statutory limitation or constitute or give rise to a pecuniary
liability of the City or a charge against its general credit or taxing powers and shall not constitute a
charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's
interest in the Project; and
WHEREAS, the City has been requested to authorize the execution of a consent to the Mortgage
(the "Consent to Mortgage") in order to permit the Borrower to deliver the Leasehold Mortgage as
security for the Borrower's obligations pursuant to the Loan Agreement and the Notes; and
WHEREAS, pursuant to Section 469.154, subdivision 4, of the Act, prior to submitting an
application to the Minnesota Department of Employment and Economic Development for approval of the
Project, the City Council of the City (the "City Council") must conduct a public hearing on the proposal
to undertake and finance the Project and notice of the time and place of the hearing, stating the general
nature of the Project and an estimate of the principal amount of the Notes to be issued to finance the
Project must be published at least once not less than fourteen (14) days, nor more than thirty (30) days
prior to the date fixed for the hearing in the official newspaper and a newspaper of general circulation of
the City; and
WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and
regulations promulgated thereunder, requires that prior to the issuance of the Notes, this City Council
approve the Notes after conducting a public hearing thereon preceded by publication of a notice of public
hearing (in the form required by Section 147(f) of the Code and applicable regulations) in a newspaper of
general circulation at least fourteen (14) days prior to the public hearing date; and
WHEREAS, pursuant to the Act and the Code, a notice of public hearing was published in the
Monticello Times on Thursday, November 10, 2005; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
MONTICELLO, MINNESOTA, AS FOLLOWS:
1. For the purposes set forth above, there are hereby authorized the issuance, sale, and
delivery of the Notes in a principal amount of $1,870,000. The Notes shall be numbered, shall be dated,
shall bear interest, shall mature, shall be subject to redemption prior to maturity, shall be in such form,
and shall have such other details and provisions as are prescribed as are prescribed in the form of the
Notes now on file with the City and in the form of the Loan Agreement now on file with the City (or as
amended in accordance with the terms of this Resolution).
2. The Notes shall be special obligations of the City payable solely from the revenues
provided pursuant to the Loan Agreement and other funds and revenues pledged pursuant to the Loan
Agreement. The City Council of the City hereby authorizes the Mayor and the City Administrator of the
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City (together, the "Officials") in their discretion, at such time (if any) as they may deem appropriate, to
execute and deliver the Notes, the Loan Agreement, and the Assignment of Loan Agreement. The Notes,
the Loan Agreement, and the Assignment of Loan Agreement shall be substantially in the form on file
with the City, with such variations, omissions and insertions thereto as the Officials, in their discretion,
may determine, as evidenced by their execution thereof.
3. The Officials are hereby authorized to execute and deliver the Consent to Mortgage. The
Consent to Mortgage shall be substantially in the form on file with the City, with such omissions and
insertions as do not materially change the substance thereof, or as the Officials, in their discretion, shall
determine, and the execution thereof by the Officials shall be conclusive evidence of such determination.
4. The Notes shall be special limited obligations of the City payable by the City solely from
the revenues derived by the City from the Loan Agreement, assigned to the Lender pursuant to the
Assignment, and the Mortgage.
5. The Officials are hereby authorized to execute and deliver, on behalf of the City, such
other documents, instruments, and certificates as are necessary or appropriate in connection with the
issuance, sale, and delivery of the Notes, including the City's Certificate, the City's Tax Certificate, the
Information Return for Tax -Exempt Private Activity Bond Issues, and all other documents, instruments,
and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of
the Notes. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel, of the City, to
prepare, execute, and deliver its approving legal opinion with respect to the Notes.
6. All covenants, stipulations, obligations, and agreements of the City contained in this
resolution and the aforementioned documents shall be deemed to be the covenants, stipulations,
obligations, and agreements of the City to the full extent authorized or permitted by law, and all such
covenants, stipulations, obligations, and agreements shall be binding upon the City. Except as otherwise
provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed
upon the City or the City Council by the provisions of this resolution or of the aforementioned documents
shall be exercised or performed by the City or by such members of the City Council, or such officers,
board, body or agency thereof as may be required or authorized by law to exercise such powers and to
perforin such duties.
No covenant, stipulation, obligation or agreement herein contained or contained in the
aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any
member of the City Council, or any officer, agent or employee of the City in that person's individual
capacity, and neither the City Council nor any officer or employee executing the Notes shall be liable
personally on the Notes or be subject to any personal liability or accountability by reason of the issuance
thereof.
No provision, covenant or agreement contained in the aforementioned documents, the Notes or in
any other document relating to the Notes, and no obligation therein or herein imposed upon the City or the
breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its
general credit or taxing powers. In making the agreements, provisions, covenants and representations set
forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than
funds and revenues derived from the Loan Agreement and Mortgage which are to be applied to the payment
of the Notes, as provided therein and in the Loan Agreement.
7. The Notes, when executed and delivered, shall contain a recital that they are issued
pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Notes and the
regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State
of Minnesota relating to the adoption of this resolution, to the issuance of the Notes, and to the execution
of the aforementioned documents to happen, exist and be performed precedent to the execution of the
aforementioned documents have happened, exist and have been performed as so required by law.
8. In the event that for any reason the Mayor of the City is unable to carry out the execution
of any of the documents or other acts provided herein, any other member of the City Council of the City
shall be authorized to act in his capacity and undertake such execution or acts on behalf of the City with
full force and effect, which executions or acts shall be valid and binding on the City. If for any reason the
City Administrator of the City is unable to execute and deliver the documents referred to in this
Resolution, such documents may be executed by a member of the City Council or the City Clerk with the
same force and effect as if such documents were executed and delivered by the City Administrator of the
City.
9. As requested by the Borrower, the City hereby designates the Notes as "qualified tax-
exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"), and makes the following factual statements and representations: (i) the
reasonably anticipated amount of tax-exempt obligations (other than any private activity bonds that are
not qualified 501(c)(3) Bonds) that will be issued by the City (and all subordinate entities of the City)
during calendar year 2006 will not exceed $10,000,000; and (ii) not more than $10,000,000 of obligations
issued by the City during calendar year 2006 have been designated for purposes of Section 265(b)(3) of
the Code.
10. The Lender is hereby appointed as Paying Agent and Bond Registrar for the Notes.
11. The Borrower will pay the administrative fees of the City and pay, or upon demand,
reimburse the City for payment of, any and all costs incurred by the City (including reasonable attorney's
fees) in connection with the Project and the issuance of the Notes, whether or not the Notes are issued.
12. This resolution shall be effective from and after the date of adoption by the City Council
of the City.
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ADOPTED by the City Council of the City of Monticello, Minnesota, this 28th day of November,
2005
THE CITY OF MONTICELLO, MINNESOTA
C,�f J- I-velJl
Clint Herbst, Mayor
Attest:
Rick Wolfsteller, City dministrator
MN 190-112 (JAE)
260892 v