City Council Resolution 1987-02RESOLUTION NO. 1987 - 2
RESOLUTION GIVING PRELIMINARY APPROVAL TO THE ISSUANCE OF
COMMERCIAL DEVELOPMENT CURRENT REFUNDING BONDS UNDER THE
MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT AND AUTHORIZING
PREPARATION OF THE NECESSARY DOCUMENTS IN CONNECTION WITH THE
ISSUANCE OF THE BONDS.
BE IT RESOLVED by the City Council (this Council) of the
City of Monticello, Minnesota (the City), as follows:
SECTION 1.
RECITALS AND FINDINGS
1.1) On April 27, 1981, the City held a public hearing on
a proposal presented to it that the City undertake and finance
a project pursuant to the Municipal Industrial Development. Act,
Minnesota Statutes, Chapter 474, as amended (the Act)
consisting of the acquisition of fifty thousand (50,000) square
feet of land located in the City and the construction thereon
and equipping of a twenty thousand (20,000) square foot medical
clinic building and related facilities (the Project). The
street address of the Project is 1107 Hart Boulevard in the
City. The public hearing was duly called, noticed, and held,
and all interested parties were afforded an opportunity to be
heard.
1.2) The Commissioner of Securities and Real Estate of the
State of Minnesota (predecessor to the Commissioner of the
Minnesota Department of Energy and Economic Development},
approved the Project pursuant to a letter addressed to the
Mayor of the City, dated May 12, 1981.
1.3) On December 14, 1981, the City adopted Resolution
No. 1981-34, which authorized the sale and issuance of the
$1,300,000 City of Monticello, Minnesota, Commercial
Development Revenue Bonds (Medical Facilities Company Project)
Series 1981 (the Original Bonds) to aid in financing the cost
of acquiring and constructing the Project. The Original Bonds
were issued by the City on December 16, 1981.
1.4) The Project has now been completed substantially as
contemplated in the documents authorizing the issuance of the
Original Bonds. The proceeds of the Original Bonds have been
expended for costs of the Project, with the exception of
$150,000 held in the Reserve Fund created by the Original
Indenture (as hereinafter defined).
1.5) The Indenture of Trust executed with respect to the
Original Bonds, dated as of December 1, 1981, between the City
and First Trust Company of Saint Paul, as trustee (the Original
Indenture) provides for optional redemption of the Original
Bonds, at the direction of the Company, on each June 1 and
December 1 beginning June 1, 1987, and ending on December 1,
2005.
1.6) The Project is owned by Medical Facilities Company, a
Minnesota partnership (the Company). The Company was the
developer of the Project and is the entity responsible for
repaying the principal, premium, and interest on the Original
Bonds. The Company has determined to exercise its option to
redeem the Original Bonds in order to reduce the outstanding
amount of bonds issued to assist in financing the ProjBCt and
to realize savings on debt service due to lower interest rates
now available, and to provide for the payment of the rede~pto~'`
price of said Original Bonds by requesting that the City issue
and sell its commercial development current refunding revenue
bonds (the Bonds), the proceeds of which will be used to pay
and refund the Original Bonds and to pay part of the costs of
issuance of the Bonds. The proceeds of the Bonds will be
loaned by the City to the Company, and the Company will agree
to make payments sufficient to pay the principal, premium (if
any), and interest on the Bonds, all pursuant to the terms of a
Mortgage Loan Agreement (the Loan Agreement) to be executed
between the City and the Company.
1.7) At a public hearing duly called, noticed, and held on
January 26, 1987, in accordance with the provisions of the Act
and Section 147(f) of the Internal Revenue Code of 1986 (the
Code), all parties desiring to appear were afforded an
opportunity to be heard. Based on such public hearing, and on
such other facts and circumstances as this Council deems
relevant and on information provided to this Council by
representatives of the Company, this Council hereby finds,
determines, and declares as follows:
(Ol) Issuance of the Bonds by the City will result in a
reduction of the amount of outstanding bonds issued to
assist in financing the Project and will result in a
reduction of the debt service due to lower interest rates
now available;
(02) The Reserve Fund of the Original Bonds will be used
to redeem a portion of the Original Bonds and no reserve
fund will be required for the Bonds; and
(03) The City is authorized by Section 474.03, Subd. 12,
of the Act to issue revenue bonds to refund, in whole or in
part, bonds previously issued by the City.
1.8) The Bonds will be issued and sold in accordance with
the Act and will provide that the Bonds are payable solely from
2.
amounts received by the City pursuant to the Loan Agreement and
other property pledged to their payment. The Bonds will not be
a general obligation of the City or be payable from any other
property or funds of the City.
1.9) Neither the State of Minnesota nor any political
subdivision thereof (other than the City, and then only to the
extent of the trust estate pledged in the Indenture of Trust
executed with respect to the Bonds) shall be liable on the
Bonds, and the Bonds shall not be a debt of the State of
Minnesota or any political subdivision thereof (other than the
City, and then only to the extent of the trust estate pledged
in the Indenture of Trust executed with respect to the Bonds),
and in any event, shall not give rise to a charge against the
credit or taxing power of the City, the State of Minnesota, or
any political subdivision thereof.
SECTION 2.
PRELIMINARY APPROVAL OF THE BONDS; DEED APPROVAL
2.1) This Council hereby ratifies and approves the calling
of the public hearing on the proposal held on January 26, 1987,
at 7:30 o'clock P.M. at the City Hall, and the publication of
the notice of the public hearing in the Monticello Times, the
official newspaper of and a newspaper of general circulation
in, the City, at least once not less than fifteen (15) nor more
than thirty (30) days prior to the date fixed for the public
hearing.
2.2) On the basis of information provided to this Council,
it appears that it would be in the best interest of the City to
issue the Bonds in accordance with the Act in an amount not to
exceed One Million One Hundred Twenty-five Thousand Dollars
($1,125,000), in order to pay and refund the Original Bonds and
to pay a portion of the costs of issuance of the Bonds.
2.3) The Bonds shall not constitute a charge, lien, or
encumbrance, legal or equitable, upon any property or funds of
the City, except the Project and the revenue and proceeds
pledged to the payment thereof, nor shall the City be subject
to any liability thereon. No holder of the Bonds shall have
the right to compel any exercise of the taxing power of the
City to pay the outstanding principal of or interest on the
Bonds, or to enforce payment thereof against any property of
the City except the Project. Each Bond shall recite on its
face that the principal of and interest on such Bond is payable
solely from the revenue and proceeds pledged to the payment
thereof. The Bonds shall not constitute a debt of the City
within the meaning of any constitutional or statutory
limitation.
2.4) Larkin, Hoffman, Daly & Lindgren, Ltd., acting as
bond counsel, is authorized to assist in the preparation and
3.
review of all documents relating to the Bonds; to consult with
the City Attorney, the Company, and the purchasers of the Bonds
as to the maturity, interest rate, and other terms and
provisions of the Bonds and as to the covenants and other
provisions of the operative documents; and to submit such
documents to this Council for final approval.
2.5) The City shall have the right, in its sale
discretion, to withdraw from participation, and accordingly not
issue the Bonds, should the City at any time prior to the
issuance thereof determine that it is in the best interest of
the City not to issue the Bonds or should the parties to the
transaction be unable to reach agreement as to the terms and
conditions of any of the documents required for the
transaction. The decision of this Council with respect to any
of the aforementioned matters shall be incontestable.
2.6) This Resolution shall be in full force and effect
from and after its passage.
Adopted by the City Council January 26, 1987.
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ATT T:
Mayor
9~A1.~•
City Adminls rator
Action on the above Resolution:
Motion for Adoption: Bill Fair
Seconded by : warren Smith
VOted .ln Favor: Fran Fair, Bill Fair, Warren Smith, Arve Grimsmo, Dan Blonigen
Voted Against : None
Abstained : None
Absent : None
Resolution adopted.
4.
SOK:DC8
STATE OF MINNESOTA
COUNTY OF WRIGHT
CITY OF MONTICELLO
I, the undersigned, being the duly-qualified and acting.
City Administrator of the City of Monticello,-Minnesota, or an
appropriate official of said City authorized to execute
documents on behalf of said City Administrator, DO HEREBY
CERTIFY that I have compared the attached and foregoing extract
of minutes with the original thereof on file in my office, and
that the same is a full, true, and complete transcript of the
minutes of a meeting of the City Council of said City duly
called and held and the date therein indicated insofar as such
minutes relate to the preliminary authorization of the issuance
of the City's commercial development current refunding revenue-
bonds issued to pay and refund the City's $1,300,000 Commercial:
Development Revenue Bonds (Medical Facilities Company Project)
Series 1981.
WITNESS my hand and seal this 26th da f January, 1987.
.!~
1~)
(Seal) ~-
City Administrator
SOK:DC8