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City Council Minutes 11-18-1998 SpecialMINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL Wednesday, November 1$, 199$ - 7:30 p.m. 1 Members Present: Bill Fair, Clint Herbst, Brian Stumpf, Roger Carlson, Bruce Thielen Members Absent: None A special meeting of the City Council was held for the purpose of consideration of authorizing the execution and delivery of a ground lease and lease-purchase agreement, and approving and authorizing issuance of public project revenue bonds and execution of related documents. Mayor Fair and staff reported that at a special meeting on Monday, November 9, the HRA rejected bids for lease revenue bonds for the community center due to receipt of a letter from Councilmembers Stumpf and Herbst and Mayor-Elect Roger Belsaas indicating their intent to terminate financing for the community center project. Mayor Fair requested that Councilmembers indicate whether or not they would like to accept public comment at this meeting. The majority of City Council members stated that they did not want to take additional public comment at this point in the project. Mr. Rusty Fifield of Ehlers & Associates explained that based on action taken by the HRA and City Council on November 9, Ehlers & Associates has worked with bond counsel to prepare language to disclose the letter and its implications to potential investors, evaluate options for issuing bonds, and secure reasonable financing for the project. After researching financing alternatives, Temporary Public Project Revenue Bonds were proposed, which would avoid unnecessary high interest rates for taxpayers and would allow the City to enter into construction contracts. Permanent financing would occur only if and when the facility is built. Mr. Fifield noted that the bond issue was structured to protect the bondholders and the credit rating of the City from the potential of termination of the project. The underwriting proposal from R.J. Steichen & Carnpany to purchase the bonds at an interest rate of not greater than 4.50% and a price of not less than 99% of par was proposed subject to the following conditions: Prior to closing, the City will deposit with the Trustee sufficient funds to pay discount and al] costs of issuance. 2. '1"he budget for 1999 contains an irrevocable appropriation of funds to pay interest due on August 1, 1999, and February 1, 2000. f' ~: 3. No bond proceeds may be disbursed without a resolution of the City Council adopted after January 1, ] 999, that declares the Council's intent to: Complete construction of the community enter. Page 1 Special Council Minutes - 11/1$/9$ b. Appropriate funds in fiscal year 2000 to pay interest due on August 1, 2000, and February 1, 2001. c. Issue long-term bonds to refund the Temporary Bonds before February 1, 2001. 4. The Trustee shall not release any bond proceeds if the City Council takes action to: a. 'I"erminate contracts for the construction ofthe community center. b. Terminate the lease agreement with the Monticello Housing and Redevelopment Authority. Terminate the development agreement with the State Armory Building Commission. r Mr. Fifleld also explained that to accept the proposal by R.J. Steichen & Company, the following actions are needed: The 1-IRA and the City Council approve the finance plan and direct Ehlers & Associates and Kennedy & Graven to prepare revised legal documents to reflect the appropriate terms and conditions. The HRA schedules a special meeting on Monday, November 23, to take formal action on the bonds and execute related legal documents. The City Council places action on the bonds, the lease, and related legal documents on the agenda for November 23. AFTER DISCUSSION, A NIO'TION WAS MADE BY BRUCE THIELEN AND SECONDED BY BILL FAIR TO APPROVE THE FINANCING PLAN AS PRESENTED AND AUTHORIZE EHLERS & ASSOCIATES TU PREPARE THE REQUIRED DOCUMENTS FOR. APPROVAL BY COUNCIL AT THE NOVEMBER 23, 199$, MEETING. BILL FAIR TFIEN AMENDED THE MOTION TO ALSO INCLUDE EXECUTION OF THE CONTRAC"I" WITH THE CONTRACTOR AND AUTHORIZE CONSTRUCTION TO BEGIN ON THE COMMUNITY CENTER. THE AMENDMENT WAS SECONDED BY BRUCE THIELEN. Voting in favor: Bill Fair, Bruce 'C'hielen, Roger Carlson. Opposed: Clint h-Ierbst, Brian Stumpf. Motion carried. A MOTION WAS MADE BY ROGER CARLSON AND SECONDED BY BRUCE THIELEN TO ADJOURN THE MEETING. Motion carried unanimously. J Kare oty Deputy City Clerk Page 2