City Council Resolution 1998-53RESOLUTION NO. 98-53
RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE
AND ALEASE-PURCHASE AGREEMENT, AND APPROVING AND AUTHORIIZINNG
ISSUANCE OF TEMPORARY PUBLIC PROJECT REVENUE BONDS AND EXECUTION OF
RELATED DOCUMENTS
BE IT RESOLVED by the City Council of the City of Monticello, Minnesota, as follows:
Section 1. Recitals.
1.01. The City is authorized by Minnesota Statutes, Section 465.71, as amended, to
acquire real and personal property under lease-purchase agreements.
1.02. The City has agreed with the Housing and Redevelopment Authority in and for the
City of Monticello, Minnesota (the "Authority") that pursuant to a Ground Lease dated as of
December 1, 1998 (the "Ground Lease"), the Authority will acquire certain property from the City,
and the Authority will lease such property, together with the buildings, structures or improvements
now or hereafter located thereon, to the Ciry pursuant to aLease-Purchase Agreement dated as of
December 1, 1998 (the "Lease").
1.03. Pursuant to a Trust Indenture dated as of December 1, 1998 (the "Indenture")
between the Authority and Firstar Bank of Minnesota, N.A., Saint Paul, Minnesota, as trustee (the
"Trustee"), the Authority will issue its Temporary Public Project Revenue Bonds, Series 1998 (the
"Series 1998 Bonds") in an aggregate principal amount of $7,385,000.
1.04. Under the Indenture, proceeds of the Series 1998 Bonds will be used to pay ccsts of
acquisition, construction and equipping of the Facilities described in the Lease.
1.05. Pursuant to an Assignment and Security Agreement dated as of December 1, 1998
(the "Assignment"), the Authority will assign to the Trustee all of the Authority's right, title and
interest in and to the Ground Lease, the Lease and the Lease Payments to be made by the City
thereunder (other than certain rights to indemnification and payment of expenses) as security for the
Series 1998 Bonds.
1.06. Forms of the Ground Lease, the Lease, the Indenture, the Assignment, the Official
Statement for the Series 1998 Bonds and a Continuing Disclosure Agreement of the City dated as
of December 1, 1998, have been prepared and submitted to this Council and are on file with the
City.
Section 2. Findings. On the basis of information given the Ciry to date, it is hereby
found, determined and declared that:
(a) it is desirable and in the best interest of the City to enter into the Ground
Lease, the Lease and the Continuing Disclosure Agreement.
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(b) the terms of the Ground Lease, the Lease, the Indenture, the Assignment and
the Continuing Disclosure Agreement are found to be advantageous to the Ciry and the form
and terms thereof are hereby approved.
(c) The Site and the Facilities described in the Lease constitute essential
government property, and the City presently intends to appropriate all Lease Payments
under the Lease for the term of the Lease; however, the obligations of the City under the
Lease are not to be payable from nor charged upon any funds of the City other than the
funds appropriated annually to the payment thereof, and the Lease shall not constitute a
charge, lien or encumbrance, legal or equitable, upon any property of the City except its
interest in the Lease and in the Site and the Facilities under the Lease.
Section 3. Authorization of Documents. The Mayor and the City Administrator are
authorized and directed to execute and deliver the Ground Lease, the Lease and the Continuing
Disclosure Agreement on behalf of the City, substantially in the forms on file, but with all such
changes therein as shall be approved by the officers executing the same, which approval shall be
conclusively evidenced by the execution thereof. Copies of all of the transaction documents shall
be delivered, filed and recorded as provided therein. The Mayor, the City Administrator and other
City officers are also authorized and directed to execute such other instruments as may be required
to give effect to the transactions herein contemplated.
The Official Statement, as completed and supplemented, and its distribution to potential
purchasers of the Series 1998 Bonds, are hereby approved. The City, as an "obligated person" with
respect to the Series 1998 Bonds, will comply with the requirements of Rule 15c2-12(b)(5} of the
Securities and Exchange Commission, as set forth in the Continuing Disclosure Agreement.
Section 4. _Ayproval of Issuance and Sale of Series 1998 Bonds; Use of Proceeds;
Payment of Issuance Costs. The issuance and sale by the Authority of the Series 1998 Bonds as
described in the Official Statement is hereby approved in all respects, provided that the Series 1998
Bonds shall bear interest at the rate of 4.50 percent per annum. The City will pay, from sources
other than the proceeds of the Series 1998 Bonds, the costs of issuance of the Series 1998 Bonds,
including the Purchaser's compensation in the amount of $73,850, and shall forward sufficient
funds to the Trustee on or before the closing date for distribution to those entitled thereto. The
proceeds of the Series 1998 Bonds shall be deposited, held, invested and disbursed as provided in
the Indenture. The proceeds of the Series 1998 Bonds (other than accrued interest deposited in the
Bond Fund under the Indenture) shall not be disbursed for any purpose other than the payment or
redemption of the Series 1998 Bonds at maturity or on such earlier date as required by the
Indenture, unless the City Council adopts a resolution after January 1, 1999 that declares the
Council's intent to:
(a) complete construction of the Community Center project;
(b) appropriate funds for fiscal year 2000 to pay the interest due on the Series
1998 Bonds (or any bonds issued to refund the Series 1998 Bonds) on August 1, 2000 and
February 1, 2001; and
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(c) refund the Series 1998 Bonds with along-term financing on or before
February 1, 2001.
Section 5. Payment of Lease Payments. The City will pay to the Trustee, promptly
when due, all of the Lease Payments and other amounts required by the Lease. To provide moneys
to make such payments, the City will include in its annual budget, for each Fiscal Year during the
term of the Lease, commencing with the Fiscal Year ending on December 31, 1999, moneys
sufficient to pay and for the purpose of paying all Lease Payments, a reasonable estimate of
Additional Lease Payments, and other amounts payable under the Lease. The agreement of the City
in this Section is subject to the City's right to terminate the Lease at the end of any Fiscal Year, as
set forth in Section 5.6 of the Lease.
Section 6. Miscellaneous.
6.01. The City covenants and agrees with the Owners from time to time of the Series
1998 Bonds that the investment of proceeds of the Series 1998 Bonds, including the investment of
any revenues pledged to the Lease Payments which are considered proceeds under applicable
regulations, and accumulated sinking funds, if any, shall be limited as to amount and yield in such
manner that the Series 1998 Bonds shall not be "arbitrage bonds" within the meaning of Section
148 of the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder, and
that the City shall comply with all other applicable requirements of Section 148. 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 Series 1998 Bonds will be used
in such manner as to cause the Series 1998 Bonds to be "arbitrage bonds" under Section 148 and
any regulations thereunder. The Site, the Facilities and the proceeds of the Series 1998 Bonds will
likewise be used in such manner that the Series 1998 Bonds will not be "private activity bonds"
under Section 141 of the Internal Revenue Code of 1986, as amended, and applicable regulations.
6.02. The officers of the City are authorized and directed to prepare and furnish to the
original purchaser of the Series 1998 Bonds, and to the attorneys approving the Series 1998 Bonds,
certified copies of all proceedings and records of the City relating to the power and authority of the
City to enter into the Ground Lease and the Lease within their knowledge or as shown by the books
and records in their custody and control, and such certified copies and certificates shall be deemed
representations of the City as to the facts stated therein.
6.03. The City covenants that it will file (or cause the Authority to file) with the Internal
Revenue Service the information required under Section 149(e) of the Internal Revenue Code of
1986.
6.04. Capitalized terms used herein and defined in the Lease or the Indenture have the
meanings given in the Lease or the Indenture.
Section 7. Effective Date. This resolution shall be effective immediately upon its final
adoption.
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foregoing resolution was introduced by Member Thielen
r.a r i G ~., .The following voted in favor of the resolution:
and seconded by Member
Mayor Bill Fair, Council Members Roger Carlson and Bruce Thielen
The following voted against: Council Members Clint Herbst and Brian Stumpf
Whereupon the resolution was adopted.
ADOPTED: November 23, 1998.
City Administrat
y
/ ~/ V ~/
Mayor
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FREERS
& ASSOCIATES I N C
fer 25, 1998
Doty
~,tty ~, 1vIonticello
P.O. Box 1147
Monticello, MN 55362-9245
Re: City of Monticello HRA; $7,385,000 Temporary Public Project Revenue Bonds, Series 1998
Enclosed are six copies of the Resolution Authorizing the Execution and Delivery of a Ground Lease
and aLease-Purchase Agreement and Approving and Authorizing the Issuance of the above Bonds which
was adopted by the City Council on November 23, 1998. Please fill in the resolution number at the top
of Page 2 and have all copies signed by the City Administrator and the Mayor, keep one copy for your
records, and return the remaining copies to me in the enclosed prepaid envelope. We will distribute
copies as required to the Wright County Auditor for bond registration purposes (if necessary), to the
Bond Attorney, Trustee, etc.
Sincerely,
FREERS & ASSOCIATES, INC.
a
Nancy DeMarais
Encl.
N:Uvlinns ota WIONTICEL~AN ALYS'I~B FAFS LE
L E A D E R S I N P U B L I C F I N A N C E
3060 Centre Pointe Drive, Roseville, MN 55113-1105 651.697.8500
A`,
I Equal Opportunity Employer
'. Charter Member of the National Association
of Independent Public Finance Advisors
fax 651.697.8555 www.ehlers-inc.com