HRA 05/09/1985 City of Fridley
AGENDA
HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, MAY 9, 1985 7 :00 P.M.
Location: Council Chambers (upper level )
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
Housing & Redevelopment Authority Minutes : March 14, 1985
ADOPTION OF AGENDA:
FINAL APPROVAL OF HOUSING & REDEVELOPMENT BOND CLOSING 1 - 1JJJ
APPROVAL OF AWARDS FOR FRIDLEY CITY CROSSING CONTEST FOR
INTERSECTION OF UNIVERSITY AND MISSISSIPPI STREET 2
RECEIVING A CONCEPT FOR CENTER CITY IMPROVEMENTS IN THE
AREA OF MISSISSIPPI STREET AND UNIVERSITY INTERSECTION
AND ROUGH COST ESTIMATES 3 - 3 B
APPROVAL OF FINAL ESTIMATE NO. 2 FOR DEMOLITION OF
STRUCTURE - MISSISSIPPI STREET AND UNIVERSITY AVENUE - 4 - 4 A
FINANCIAL STATEMENT 5
CHECK REGISTER 6
OTHER BUSINESS:
AJOURNMENT:
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CITY OF FRIDLEY
MEMORANDUM
TO: NASIM M. QORESHI, CITY MANAGER
FROM: SID INMAN, DIRECTOR OF CENTRAL SERVICES
SUBJECT: HRA BOND CLOSING
DATE: MAY 2, 1985
Attached are the resolutions and corresponding documents for final
approval by the HRA on Thursday, May 9, 1985.
Please be aware of the fact that the resolution may change depending
on which insurance company is awarded the bid and the other
documents will be changed to reflect the selling price of the bonds.
I will have the appropriate changes with me the night of the HRA
meeting for the their review.
If you have any questions, please let me know.
SCI:sh
3/0/2/10
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KER/fridley
Fridley Refunding
O'Connor i Hannan Draft
RESOLUTION
OF THE
HOUSING piA REDEVELOPMENT AUTHORITY
N AND FOR THE
CITY OF FRIDLEY
Approving sale and providing form, terms, pledge of
tax increments and findings, covenants and directions
relating to Tax Increment Revenue
Bonds of/1198 of the Housing and Redevelopment
Authority and for the City of Fridley;
and authorizing execution and delivery of a Bond Purchase
Agreement, Escrow Agreement and Amendments to
Cooperation Agreement
RESOLVED BY THE BOARD OF COyISSIONERS OF TEE HOUSING
AND REDEVELOPMENT AUTHORITY/L N AND FOR TEE CITY OF
FRIDLEY:
SECTION 1. AUTHORIZATION, FINDINGS AND DEFINITIONS
1.01. The Districts. By resolutions duly adopted, the
City of Fridley, Minnesota (the "City" k at the request of
the Housing and Redevelopment Authority/Ln and for the City
of Fridley (the "Authority" ) has pursuant to Minnesota
Statutes 462.422 through 462.716 and 273.71 through 273.86
created redevelopment projects known as the Redevelopment
Project No. 1, Moore Lake Redevelopment Project and North
Area Project, all of which have the same coterminous area
and are collectively referred to as the "Project" . Within
the Project are five (5) tax increment districts (the "Dis-
tricts" ) . Schedules of the real property comprising the
Districts from which Tax Increment, as defined in Section
1.03 hereof, is or may be derived are on file and of record
in the office of the Anoka County Auditor.
1. 02. Ou standing Bonds. To finance public redevelop-
ment costs o` edevelopment Project No. 1 the City has here-
tofore issue its general obligation bonds (the "Outstanding
Bonds" ) described as follows:
Description of Outstanding Bonds
$2,200,000 General Obligation Tax Increment Re-
development Bonds of 1981 , dated as of February 1 ,
1981 , $2,075 ,000 outstanding ( "1981 Bonds" ) .
1B
$625,000 General Obligation Tax Increment Redevel-
opment Bonds of 1982, dated as of August 1, 1982,
$620,000 outstanding ( "1982 Bonds") .
$600,000 General Obligation Tax Increment Redevel-
opment Bonds of 1982, Series II , dated as of Novem-
ber 1, 1982, 5595,000 outstanding ("1982 Bonds,
Series II") .
1.03. Additional Public Redevelopment Costs. The
Authority has determined that it is desirable to undertake
additional redevelopment in the Project and has incurred or,
based on reasonable estimates, expects to incur Public Rede-
velopment Costs, within the meaning of Minnesota Statutes,
Chapter 462 for the following purposes in the following
amounts, all which are to be financed by proceeds of the
Bonds:
Purpose Amount
Total
1.04. Tax Increment. At the time of creation of each
District, the City requested the Anoka County Auditor to
certify the assessed value of all taxable property in each
District as of the preceding January 2, which assessed value
as adjusted in accordance with law applicable to tax incre-
ment computation is hereinafter referred to as the "Original
Assessed Value" . The assessed value of all taxable property
in each District as determined for each year , after exclu-
sion of any fiscal disparity commercial-industrial assessed
valuation increase required under Minnesota Statutes, Sec-
tion 273.76, Subd. 3(b) , is hereinafter referred to as the
"Captured Assessed Value". The ad valorem taxes derived
from such property by applying to the Captured Assessed
Value the aggregate mill rate levied by all governmental
entities having authority to levy taxes on such property are
hereinafter referred to as the "Tax Increment" . Under ap-
plicable law and subject to the limitations thereof , the
Anoka County Auditor is required to pay to the Authority the
Tax Increment for each District in each year.
1.05. Cooperation Agreement. The Authority and the
City are parties to a certain Agreement of Coop ation dated
September 13, 1979 whereby the Tax Increment o er Dis-
tricts is authorized to be pledged to the payment of Out-
standing Bonds. There has been presented to the Board of
Commissioners of the Authority a form of Amended and Re-
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HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, MAY 9, 1985
7 :00 P.M.
1C
stated Agreement of Cooperation which will amend and restate
the original Agreement of Cooperation in order that the Tax
Increment of each such District will be pledged to the pay-
ment of the Bonds hereinafter described to the extent re-
quired hereby, subject to the prior existing pledges to the
Outstanding Bonds to be paid from the escrow established
under Section 4.01 hereof, but not subject to any pledge to
additional obligations issued for such Districts.
1.06. Authorization. Under Minnesota Statutes, Section
273.71 through 273 . 86, and in particular Section 273.77(c) ,
the Authority is authorized to issue and sell revenue bonds
to pay public redevelopment costs under Minnesota Statutes
Chapter 462 and to refund the principal of and interest on
the Outstanding Bonds. Under Minnesota Statutes Section
475.67, general obligations of the City may be refunded in
advance of their rAdemption or maturity for the purpose of
relieving the City/ f restrictions on the application of tax
increments or for other purposes authorized by law. It is
hereby found and determined that the application of Tax
Increment is restricted by the Outstanding Bonds and that it
is in the best interests of the City and the Authority to
effectively release the City and the Authority from such
restrictions through the issuance of the Bonds and execution
of the Escrow Agreement hereinafter described.
SECTION 2. TERMS AND FORM OF TEE BONDS.
2.01. Award. The Board of Commissioner of the Author-
ity hereby determines that the offer of Miller & Schroeder
Municipals, Inc. (the "Underwriter" ) to purchase the Bonds
at a price of $ plus accrued interest is a reason-
able offer and shall be and hereby is accepted. The form of
Bond Purchase Agreement proposed to be entered into between
the Underwriter and the Authority is hereby approved and
shall be executed by the Chairman and secretary in substant-
ially the form on file, with such changes therein not incon-
sistent with law as the officers executing the same may
approve, which approval shall be conclusively evidenced by
the execution thereof.
2.02. Bond Terms $ of Eousing and
Redevelopment Authority ' ^ f the City of Fridley Tax
Increment Revenue Bonds of 1985 dated , 1985 (the
"Bonds" ) , shall be issued in denominations of $5,000 or any
integral multiple thereof not exceeding the principal amount
maturing in any year, shall be numbered from R-1 upwards in
order of issuance or such other order as the Bond Registrar
hereinafter described may determine. The Bonds shall bear _
interest at the rates per annum according to years of matur-
ity, payable on August 1, 1985 and semiannually thereafter
on February 1 and August 1 of each year and shall mature or.
February 1 of each year in the years and amounts as follows :
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Interest Interest
Year Amount Rate Year Amount Rate
All Bonds maturing on or after February 1, , shall be
subject to redemption and prior payment in whole or in part
in inverse order of maturity and by lot within a maturity at
the option of the Authority on February 1, 19 , and any
interest payment date thereafter at par and accrued interest •
in accordance with Chapter 475, Minnesota Statutes. All
Bonds due on February 1, shall be redeemed in part by
lot on February 1, and on each February 1 thereafter to
and including February 1, at par plus accrued interest
in the principal amounts on each such mandatory redemption
date as follows:
Mandatory Redemption Date Principal Amount
February 1, $
February 1, $
February 1, $
February 1, $
Notice of any such redemption shall be given in accordance
with Chapter 475, Minnesota Statutes. In the event of re-
demption by lot of Bonds of like maturity, the Bond Regis-
trar shall assign to each Bond of such maturity then out-
standing a distinctive number for each $5,000 of the princi-
pal amount of such Bonds and shall select by lot in the
manner it determines the order of numbers, at $5, 000 for
each number, for all outstanding Bonds of like maturity.
The order of selection of Bonds to be redeemed shall be the
Bonds to which were assigned numbers so selected, but only
so much of the principal amount of each Bond of a denomina-
tion of more than $5, 000 shall be redeemed as shall equal
$5,000 for each number assigned to it and so selected. Upon
partial redemption of any Bond, the same shall be surren-
dered in exchange for one or more new Bonds in authorized
form for the unredeemed portion of principal.
2.03. Registrar and Paving Agent. The Bonds shall be
payable as to principal upon presentation at the main office
of , in Minneapolis,
Minnesota, as Bond Registrar and Paying Agent, or at the
offices of such other successor agents as the Authority may
hereafter designate upon 60 days mailed notice to the reg-
istered owners at their registered addresses . Interest
shall be paid by check or draft mailed to the registered
owners at their addresses shown on the registration booKs .
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2.04 . Bond Form. The Bonds shall be in substantially
the following form, which may be printed on the face or on
the back or partially on the face or back, with the neces-
sary variations as to number, CUSIP Number, denomination,
rate of interest and date of maturity, the blanks therein to
be properly filled in, to-wit:
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1F
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
HOpSING AND REDEVELOPMENT AUTHORITY
i \LN AND FOR THE CITY OF FRIDLEY
No. R- $
TAX INCREMENT REVENUE BOND OF 1985
Rate Maturity Date of Original Issue CUSIP
1, 1985
The Housing and Redevelopment Authority/in and for the.
City of Fridley Ithe "Authority" ) � in the City of Fridley,
(the "City" ) , in the County of Anoka and State of Minnesota,
for value received, hereby certifies that it is indebted and
hereby promises to pay, but solely from amounts on deposit
in its Tax Increment Revenue Bonds Debt Service Account
described below, to
or registered assigns, the principal
sum of Dollars
($ ) on the maturity date specified above, upon the
presentation and surrender hereof, and to pay solely from
such source to the registered owner hereof interest on such
principal sum at the interest rate specified above from
1, 1985, or the most recent interest payment date
to which interest has been paid or duly provided for as
specified below, on February 1 and August 1 of each year,
commencing August 1, 1985, until said principal sum is
paid. Principal and the redemption price is payable in
lawful money of the United States of America at the office
of in
Minneapolis, Minnesota, or at the offices of such successor
agents as the Authority may designate upon 60 days notice to -
the registered owners at their registered addresses Jtht
"Arad Registrar") , Interest shall be paid on each February
1 and August 1 interest payment date by check or draft
mailed to the person in whose name this Bond is registered
at the close of business on the preceding January 15 and
July 15 (whether or not a business day) at the registered
• owner ' s address set forth on the registration books main-
tained by the Bond Registrar. Any such interest not
punctually paid or provided for will cease to be payable to
the person in whose name this Bond is registered on such
regular record dates and such defaulted interest may be paid
to the person in whose name this Bond shalt be registered at
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the close of business on a special record date for the pay-
ment of such defaulted interest established by the Bond
Registrar.
has issued its
Insurance Policy No.
with respect to the payments due for principal of and inter-
est on this Bond to the Paying Agent.
Additional provisions of this Bond are contained on the
reverse side hereof and such provisions shall for all pur-
poses have the same effect as if set forth here.
The Bonds of this series maturing on or after February
1, , are subject to redemption at the option of the
Authority, in whole or in part in inverse order of maturity
and by lot within a maturity, on February 1, and any
interest payment date thereafter at par and accrued inter-
est.
The Bonds of this series maturing on February 1,
shall be redeemed in part by lot on February 1, and on
each February 1 thereafter to and including February 1,
at par plus accrued interest in the principal amounts on
each such mandatory redemption date as follows:
Mandatory Redemption Date Principal Amount
February 1, $
February 1, $
February 1, $
February 1, $
Thirty days ' prior notice of prior redemption will be given
by mail to the Paying Agent and to the registered owners,
and published notice or prior redemption will be given in
the manner provided by Chapter 475, Minnesota Statutes.
This Bond is one of a series of special obligation Bonds
in the aggregate principal amount of
Dollars (S ) , all of like date
and tenor except for number, interest rate, denomination,
date of maturity and redemption privilege, and is issued
pursuant to and in accordance with Minnesota Statutes Sec-
tions 273.77 and 475.67, for the purpose of providing funds
to (1) pay certain public redevelopment costs to be incurred
in redevelopment projects created under Minnesota Statutes
Sections 273.71 through 273.86 and 462.411 through 462 .716,
and ( 2) refund in advance of maturity certain of the City's
outstanding general obligation bonds heretofore issued for
the purpose of financing the public redevelopment costs of a
redevelopment project, relieving the City and the Authority
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of certain restrictions on the application of tax incre-
ments; all as set forth and described in Resolution No.
of the Board of Commissioners of the Authority
relating to the issuance of the Bonds of this series adopted
, 1985 (the "Bond Resolution") .
This Bond has been issued by the Authority/LLD- aid/L.
,,protects under Minnesota Statutes Sections 273.71 through
273.78. This Bond shall not be payable from nor charged
upon any funds other than the revenues and property pledged
to the payment hereof, nor shall either or both of the
Authority or the City be subject to any liability hereon or
have the powers to obligate itself or themselves to pay or
pay this Bond from funds other than the revenues and
properties pledged and no holder or holders of the Bonds of
this series shall ever have the right to compel any exercise
of . any taxing power of the Authority, the City or any other
public body, other than as is permitted or required by law =
and pledged therefor hereunder, to pay the principal of or
interest on the Bonds of this series, nor to enforce payment
thereof against any property of the Authority, City or any
other public body other than that expressly pledged for the
payment of the Bonds of this series.
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The Bonds of this series are payable solely from amounts
on deposit in the Tax Increment Revenue Bonds Debt Service
Account created by the Bond Resolution, into which the
Authority is required to deposit certain tax increments with
respect to the taxable real property within the boundaries
of certain Districts described in th Bond Resolution to be
received by the Authority. Refer ce is hereby made to
Minnesota Statutes, Sections 273.7 through 273.78 and to
the Bond Resolution and certain Amended Redevelopment Plans
of the Authority for a description of the Districts, the tax
increments from the Districts pledged to the Bonds, the
reserve required to be maintained in the Debt Service Ac-
count, the conditions under which the tax increments derived
from all or portions of certain Districts may be released
from the pledge of the Bond Resolution, the conditions under
which additional bonds may be issued on a parity with the
pledge of tax increments from particular Districts to the
Bonds of this series, certain rights of
[ INSURANCE COMPANY) and covenants of the Authority as to the
application of the proceeds of the Bonds of this series and
the moneys pledged to the payment of the Bonds and interest
thereon.
This Bond is transferable, as provided in the Bond Reso-
lution, only upon books of the Authority kept at the office --
of the Bond Registrar by the registered owner hereof in
person or by the registered owner ' s duly authorized attor-
ney, upon surrender of this Bond for transfer at the office
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of the Bond Registrar , duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the
Bond Registrar duly executed by the registered owner hereof
or the registered owner 's duly authorized attorney, and,
upon payment of any tax, fee or other governmental charge
required to be paid with respect to such transfer, one or
more fully registered Bonds of the series of the same prin-
cipal amount and interest rate will be issued to the desig-
nated transferee or transferees.
The Bonds of this series are issuable only as fully
registered bonds without coupons in denominations of $5,000
or any integral multiple thereof not exceeding the principal
amount maturing in any one year. As provided in the Bond
Resolution and subject to certain limitations therein set
forth, the Bonds of this series are exchangeable for a like
aggregate principal amount of Bonds of this series of dif-
ferent authorized denominations, as requested by the regis-
tered owner or the registered owner 's duly authorized attor-
ney, upon surrender thereof to the Bond Registrar.
It is Hereby Certified, Recited and Declared that the
Districts have been duly created as required by law and the
tax increments therefrom - r d • - • • - • , - • - in - . •
,pr inc.aal of, Premium.liium. if any, Aiad interest on the Bonds to
the extent and in the manner provided in the Bond Resolu-
tion; -'-that the proceeds of the Bonds of this series, other
than the portion thereof appropriated for issuance expenses
or deposited in the Debt Service Account jnd a vortion
•eoosited in a Prop * • -^ - . - 1 -
tion fol payment of public redevelopment costs. have been
deposited pursuant to an escrow agreement in an irrevocable
escrow account maintained with a qualified bank; that the
proceeds deposited in the escrow account have been held as
cash or invested in obligations of the United States of
America or agencies thereof sufficient for, and irrevocably
appropriated to, the payment when due of the principal of
and interest on the obligations being refunded by the Bonds
of this series; that all acts, conditions and things
required to exist, happen and be performed precedent to and
in the issuance of this Bond do exist, have happened and
have been performed in regular and due time, form and manner
as required by law; and that this Bond, and the series of
which it is a part, is within every applicable debt and
other limit prescribed by the Constitution and laws of the
State of Minnesota.
This Bond shall not be valid or become obligatory for
any purpose until the Authentication Certificate hereon
shall have been signed by the Bond Registrar.
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In Witness Whereof, the said Authority, acting by and
through its Board of Commissioners, has caused this Bond to
be executed with the facsimile signature of its Chairman,
and attested with the facsimile signature of the Secretary,
and a facsimile of the corporate seal of Authority to be
imprinted hereon, all as of the Date of Original Issue
specified above.
Dated:
BOUSINGA AND REDEVELOPMENT AU-
THORITV;N AND FOR THE CITY OF
FRIDLEY
By
(Facsimile) (Facsimile)
Secretary Chairman
(SEAL)
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Bond Registrar 's Authentication Certificate S •
This is one of the Bonds described in the within men-
tioned Bond Resolution.
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Bond Registrar
By
Authorized Signature
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, as-
signs and transfers unto
(Please Print or Typewrite Name and Address of Transferee)
the within Bond and all rights thereunder, and hereby ir-
revocably constitutes and appoints attorney
to transfer the within Bond on the books kept for registra-
tion thereof, with full power of substitution in the prem-
ises.
Dated:
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Please Insert Social Notice: The signature to this
Security Number or Other assignment must correspond with
Identifying Number of the name as it appears on the
Assignee face of this Bond in every par-
ticular, without alteration or
any change whatever.
Signature Guaranteed:
Signatures must be guaranteed
by a national bank or trust
company or by a brokerage firm
which is a member of a major
stock exchange.
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(Form of Certificate)
CERTIFICATE AS TO LEGAL OPINION
The undersi$ned, Secretary of the Housing and Redevelop-
ment Authority/Un and for the City of Fridley, Minnesota,
hereby certifies that except for the date line, the above is
a full, true and compared copy of the legal opinion of
O'Connor & Hannan, of Minneapolis, Minnesota, which was
delivered to me upon delivery of the Bonds and is now on
file in my office.
(Facsimile)
Housing nd Redevelopment Au-
thorityfn and for, the City of
Fridley, Minnesota
2.05. Registration. As long as any of the Bonds issued
hereunder shall remain outstanding, the Authority shall
maintain and keep at the offices of the Bond Registrar an
office or agency for the payment of the principal of and
interest on such Bonds, as in this Resolution provided, and
for the registration and transfer of such Bonds, and shall
also keep at said office of the Bond Registrar books for
such registration and transfer. Upon surrender for transfer
of any Bond at the office of a Bond Registrar with a written
instrument of transfer satisfactory to the Bond Registrar,
duly executed by the registered owner or the registered
owner 's duly authorized attorney, and upon payment of any
tax, fee or other governmental charge required to be paid
with respect to such transfer, the Authority shall execute
and the Bond Registrar shall authenticate and deliver, in
the name of the designated transferee or transferees, one or
more fully registered Bonds of the same series, of any au-
thorized denominations and of a like aggregate principal
amount, interest rate and maturity. Any Bonds, upon surren-
der thereof at the office of a Registrar may, at the option
of the registered owner thereof, be exchanged for an equal
aggregate principal amount of Bonds of the same maturity and
interest rate of any authorized denominations. In all cases
in which the privilege of exchanging Bonds or transferring
fully registered Bonds is exercised, the Authority shall
execute and the Bond Registrar shall deliver Bonds in
• accordance with the provisions of this Resolution. For
every such exchange or transfer of Bonds, whether temporary
or definitive, the Authority or the Bond Registrar may make
a charge sufficient to reimburse it for any tax, fee or
ether governmental charge required to be paid with respect
to such exchange or transfer, which sum or sums shall be
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paid by the person requesting such exchange or transfer as a
condition precedent to the exercise of the privilege of
making such exchange or transfer. Notwithstanding any other
provision of this Resolution, the cost of preparing each new
Bond upon each exchange or transfer, and any other expenses
of the Authority or the Bond Registrar incurred in connec-
tion therewith (except any applicable tax, fee or other
governmental charge) shall be paid by the Authority. The
Authority shall not be obligated to make any such exchange
or transfer of Bonds during the fifteen (15) days next pre-
ceding the date of the first publication or the mailing ( if
there is no publication) of notice of redemption in the case
of a proposed redemption of Bonds. The Authority and the
Bond Registrar shall not be required to make any transfer or
exchange of any Bonds called for red'emption.
2.06. Record Dates. Interest on any Bond which is
payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the person in whose
name that Bond (or one or more Bonds for which such bond was
exchanged) is registered at the close of business on the
preceding January 15 or July 15, as the case may be. Any
interest on any Bond which is payable, but is not punctually
paid or duly provided for, on any interest payment date
shall forthwith cease to be payable to the registered holder
on the relevant regular record date solely by virtue of such
holder having been such holder; and such defaulted interest
may be paid by the Authority in any lawful manner, if, after
notice given by the Authority to the Bond Registrar of the
proposed payment pursuant to this paragraph, such payment
shall be deemed practicable by the Bond Registrar. Such
payments shall then be made to the persons in whose names
the Bonds are registered at the close of business on a spe-
cial record date established by the Bond Registrar. Subject
to the foregoing provisions. of this paragraph, each Bond
delivered under this Resolution upon transfer of or in ex-
change for or in lieu of any other Bond shall carry all the
rights to interest accrued and unpaid, and to accrue, which
were carried by such other Bond and each such Bond shall
bear interest from such date that neither gain nor loss in
interest shall result from such transfer, exchange or sub-
stitution.
2.07. Owners. As to any Bond, the Authority and the
Bond Registrar and their respective successors, each in its
discretion, may deem and treat the person in whose name the
same for the time being shall be registered as the absolute
owner thereof for all purposes and neither the City nor the
Bond Registrar nor their respective successors shall be .
affected by any notice to the contrary. Payment of or on
account of the principal of any such Bond shall be made only
to or upon the order of the registered owner thereof, but
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such registration may be changed as above provided. All
such payments shall be valid and effectual to satisfy and
discharge the liability upon such Bond to the extent of the
sum or sums so paid.
SECTION 3. EXECUTION AND DELIVERY
• 3.01. Bonds. The Bonds shall be executed by the re-
spective facsimile signatures of the Chairman and Secretary
and facsimile of the corporate seal of the Authority as set
forth in the form of Bond. The text of the approving legal
opinion of O'Connor i Hannan, of Minneapolis, Minnesota, as
bond counsel, shall be printed on the reverse side of each
Bond and shall be certified by the facsimile signature of
the Secretary. When said Bonds shall have been duly exe-
cuted and authenticated by the Registrar in accordance with
this Resolution, the same shall be delivered to the Under-
writer in accordance with the terms of the Bond Purchase
Agreement upon payment of the purchase price, and the re-
ceipt of the to said purchasers thereof
shall be a full acquittance; and said purchasers shall not
be bound to see to the application of the purchase money.
The Bonds shall not be valid for any purpose until authenti-
cated by the Bond Registrar, which is hereby appointed au-
thenticating agent in accordance with Chapter 475, Minnesota
Statutes.
3.02. Official Statement. The Preliminary Official
Statement dated , 1985 relating to the Bonds, on
file with the Secretary and presented to this meeting, is
hereby approved, and the use thereof by the Underwriter is
hereby ratified and confirmed, insofar as the same relates
to the Bonds and the sale thereof. The Underwriter shall
prepare a final Official Statement incorporating the final
terms of the Bonds in substantially the same form as the
Preliminary Official Statement, with all such changes
therein as may be approved by the , and the
Underwriter is hereby authorized to distribute the same.
3.03. Certificates. If such officers find the same to
be accurate, the Chairman of the Authority and the Secretary
are authorized and directed to furnish to the purchasers at
the closing a certificate that, to the best of the knowledge
of such officers, the Official Statement does not, at the
date of closing, and did not, as of its date, contain any
untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they
were made, not misleading. Unless litigation shall have
been commenced and be pending questioning the Bonds, pro-
ceedincs for the Districts, Tax Increment pledged for pay-
ment of the Bonds, or the organization of the Authority or
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incumbency of its officers, at the closing, the Chairman
shall also execute and deliver to the successful bidder a
suitable certificate as to absence of material litigation,
and the shall also execute and deliver
his certificate as to payment for and delivery of the Bonds,
together with the arbitrage certificate referred to below
and the signed approving legal opinion of O'Connor i Hannan
as to the validity and enforceability of the Bonds and the
exemption of interest thereon from federal and Minnesota
income taxation (other than Minnesota corporate franchise
and bank excise taxes measured by income) under present laws
and rulings.
SECTION 4. REFUNDING OF OUTSTANDING BONDS;
APPROPRIATION OF FUNDS
4.01. Escrow Agreement. The form of Escrow Agreement
proposed to be made and entered into between the Authority,
the City and of Minneapolis,
Minnesota relating to the Outstanding Bonds is hereby ap-
proved and shall be executed by the Chairman and attested by
the Secretary in substantially the form on file with such
changes therein not inconsistent with law as the officers
executing the same may approve, which approval shall be
conclusively evidenced by the execution thereof. The Escrow
• Agreement is irrevocable and the Authority hereby covenants
to perform the terms and conditions thereof as long as the
Outstanding Bonds are outstanding. The Authority hereby
agrees to pay the reasonable charges of the escrow agent for
acting as such.
4.02. Appropriation of Funds. The proceeds of the
Bonds (which including accrued interest to the anticipated
date of delivery of the Bonds are currently estimated to be
$ ) , together with such additional sums as may
be required for the purpose (currently estimated to be
$ ) from amounts on deposit in a fund maintained
for the Outstanding Bonds and the Districts, are hereby
appropriated as follows: (a) An amount sufficient to fund
the Escrow Fund pursuant to the Escrow Agreement (currently
estimated to be $ ) shall be deposited in such
Escrow Fund and applied in accordance with the Escrow Agree-
ment; (b) the amount of $ shall be deposited in
the Debt Service Account established under Section 6.01
hereof; (c) the amount of $ shall be deposited in
the Project Account established under Section 5. 01 hereof,
and (d) an amount equal to the expenses of the transaction
and the insurance premium (currently estimated to be
$ ) shall be applied to the payment thereof. The
amount appropriated from sources other than Bond proceeds
shall be derived from the specified funds and accounts and
appropriated to either the Escrow Fund or Debt Service Ac-
- 15 -
1P
count in the following manner: (a) all amounts on deposit in
the sinking fund maintained for the Outstanding Bonds shall
be deposited in the Escrow Fund pursuant to the Escrow
Agreement, except that odd amounts of less than $1,000 shall
be deposited in the Debt Service Account.
4.03. Accountant 's Report. The firm of
• , independent public accountants and consult-
ing actuaries, is hereby authorized and directed to verify
that the deposits in the Escrow Fund for the Outstanding
Bonds will be sufficient to meet the requirements of Section
475.67, Minnesota Statutes, and to make such calculations as
may be necessary for the purpose of determining compliance
with Section 103(c) of the Internal Revenue Code and the
regulations thereunder.
4.04. Redemption of All Outstanding Bonds. All Out-
standing Bonds shall be called for redemption and prior pay-
ment on their earliest redemption dates set forth below at
par, plus accrued interest, all in the manner provided by
the Escrow Agreement:
Bonds Redemption Date
1981 Bonds August 1, 1990
1982 Bonds February 1, 1994
1982 Bonds, Series II February 1, 1994
SECTION 5. PROJECT ACCOUNT
5.01. Creation of Project Account . The Authority
hereby establishes and covenants to maintain as long as
funds are held therein a special account designated as the
1985 Tax Increment Revenue Bonds Project Account (the "Proj-
ect Account" ) . The Authority shall deposit $ of
the proceeds of the Bonds into the Project Account, any
other funds appropriated thereto and deposited therein, and
all income received from the investment of amounts in such
account.
5.02. Application of Project Account. Amounts in the
Project Account shall be applied only (a) for "public rede-
velopment costs" of the Project, including administrative
expenses of the Authority allocable to the Project, all
within the meaning of that term as used in Minnesota Stat-
utes Chapter 462, (b) any purpose permitted by Minnesota
Statutes Section 273.75, Subd. 4 or (c) as may be otherwise
permitted by law.
- 16 -
10
SECTION 6. TAX INCREMENT AND DEBT SERVICE ACCOUNTS A
6.01. Debt Service Account; Pledge of Tax Increment.
The Authority hereby establishes and covenants to maintain
as long as the Bonds are outstanding a special account de-
signated as the 1985 Tax Increment Revenue Bonds Debt Ser-
vice Account (the "Debt Service Account" ) which, together
with all Tax Increment received by the Authority to be de-
posited therein in accordance with this Resolution, is
hereby pledged to the payment of the principal of and inter-
est on the Bonds. The Authority shall deposit $
of the proceeds of the Bonds or other funds appropriated
under Section 4.02 hereof into the Debt Service Account as
the initial Basic Reserve Requirement defined below.
Promptly upon the receipt by the Authority of an installment
of Tax Increment from Anoka County which has been derived
from the Districts, other than Districts or portions thereof
released in accordance with Section 6.03 hereof, the
shall, subject to Section 6.04 hereof, de-
posit into the Debt Service Account such portion thereof as
shall be necessary to pay any due but unpaid principal or
interest on the Bonds and to restore or maintain a balance
therein equal to the Basic Reserve Requirement, as defined
below, plus (a) with respect to installments of Tax Incre-
ment received from February 2 through August 1 of each year,
that portion of the Tax Increment received as shall, to-
gether with amounts then on deposit in the Debt Service
Account in excess of the Basic Reserve Requirement, equal at
least one-half of the principal maturing or required to be
redeemed on the next February 1 principal payment or manda-
tory redemption date plus the amount of interest due on the
Bonds on the August 1 interest payment date falling on the
last day of such period, and (b) with respect to install-
ments of Tax Increment received from August 2 of any year
after 1984 through February 1 of the following year, that
portion of the Tax Increment received as shall, together
with amounts then on deposit in the Debt Service Account in
excess of the Basic Reserve Requirement, equal at least the
principal and interest due, whether at maturity or by manda-
tory redemption, on the February 1 principal and interest •
payment date falling on the last day of such period.
At the time of receipt of each installment of Tax Incre-
ment, the shall record the same in the
appropriate fund or account maintained for the receipt of
Tax Increment with respect to a District and simultaneously
shall debit each such account up to the amount of the Tax
Increment installment for such District then credited
thereto such that the aggregate amount charged to such ac-
counts for all Districts equals the amount then required to
be deocsited in the Debt Service Account. The remainder of
any Tax increment installment not required to be sc trans-
- 17 -
1R
ferred to the Debt Service Account shall not be deemed
pledged to the payment of principal of or interest on any
Bonds and may be retained in the funds or accounts main-
tained for the payment of public redevelopment costs of the
Project or applied to debt service on bonds or other obliga-
tions issued on account of the corresponding District, or,
if so directed by resolution of the Board of Commissioners,
the shall transfer the remaining funds to the
Anoka County Auditor for payment to other taxing jurisdic-
tions in accordance with law or apply the same to other
purposes authorized by law. The Board of Commissioners may
from time to time by resolution direct the
as to the relative portion of each Tax Increment installment
which is to be charged to each District, but in the absence
of such direction the determination shall be made by the
. In the event installments of Tax Increment from
Anoka County are at any time received in a manner which does
not combine the Tax Increment from all Districts in a single
installment or in a manner which results in multiple in-
stallments in any six month period, the Board of Commis-
sioners may direct the to make appropriate
bookkeeping transfers among the accounts maintained for each
District to accomplish the Authority's objective of specify-
ing the source of payments to the Debt Service Account. All
income received from the investment of amounts on deposit in
the Debt Service Account shall be credited to such Ac-
count. From amounts on deposit in the Debt Service Account
the shall cause to be paid the principal
of and interest on the Bonds. Money in the Debt Service
Account shall be used for no other purpose.
In addition to the foregoing deposits, the Authority
hereby covenants to maintain from amounts pledged hereunder,
so long as any of the Bonds are outstanding, funds and in-
vestments on deposit as a reserve in pe Debt Service Ac-
count in an amount at least equal to/I125% _of the average
annual principal and interest _payable on the Bonds and any
* . - . . _ r _., - t • -' i 6. 04 in
any succeeding one year period co mencina on February 2•
Lassu1 in9 mandatory redemption of principal in accordance '
with any sc;edule therefor set _forth in the resolution
-' * *.r4 4 -n - h ..nds or obliaa •n *h -
"Maximum Reserve. .gu.i.rement" 1 : ov_
; .ded, w
hoel that i
evrf
the aaaregate Tax Increment derived in the preceding calen-
4ar year from all Districts which remain pledced hereunder
- •1 „_ , in . ;o - -v- R- uirement such amount
may be, if less than the Maximum Reserve Requirement , the
maximum principal and interest due on the Bonds ar.d an,y,
.arit oblication • ' - • i - - • s . in
any succeeding one year period commencing on February 2
(assuring mandatory redemption of principal in accordance
with ila_ y schedule t':erecv set fcrth in the resolution
4uthcriz_nc issuance of such _bonds or cb__ca:_ons ) t :ne
— 18 —
is
"Minimum Reserve Requirement") . The/llesser of the Maximum
- • Recuirrer ent and tie _Minimum Reserve Requirement is
herei eferred to as the "Basic Reserve Requirement
ilL.-
6 .02. Investment of Funds. Any moneys held as a part
of the Debt Service Account shall be invested or reinvested
by the , to the extent then permitted by law,
in (a) direct obligations of ( including obligations issued
or held in book entry form on the books of the Department of
the Treasury of the United States of America) , or obliga-
tions the principal of and interest on which are uncondi-
tionally guaranteed by, the United States of America; (b)
bonds, debentures or notes or other evidence of indebtedness
payable in cash issued by any one or a combination of any of
the following federal agencies whose obligations represent
the full faith and credit of the United States of America:
Export Import Bank of the United States, Federal Financing
Bank, Farmer 's Home Administration, Federal Housing Admini-
stration, Maritime Administration, Public Housing Authority,
Government National Mortgage Association; (c) certificates
of deposit with commercial banks, savings and loans associa-
tions, and mutual savings banks properly secured at all
times by collateral security described in (a) and (b) above;
(d) the following investments fully insured by the Federal
Deposit Insurance Corporation or the Federal Savings and
Loan Insurance Corporation: (i) certificates of deposit,
(ii) savings accounts, (iii ) deposit accounts, or (iv) depo-
sitory receipts of commercial banks, savings and loan as-
sociations, and mutual savings banks; or (e) investment
agreements approved by
( "Qualified Investments" ) . All Qualified Investments in the
Debt Service Account, other than Qualified Investments com-
prising the Basic Reserve Requirement, shall mature on or
prior to the next February 1 or August 1 payment date.
Qualified Investments com.risin• the Basic Reserve Re uirment shall mature in twelve ( 12) months or less. Investment
of funds pursuant to this Section shall be limited as to
amount and yield of investment in such manner that no part
of the outstanding Bonds shall be deemed "arbitrage bonds"
under Section 103(c) of the Internal Revenue Code and regu-
lations thereunder.
6.03. Release. The Authority may by resolution of the
Board of Commissioners determine to release from the pledge
of Tax Increment provided by this Resolution any or all of
the Tax Increment derived from any District or Districts or
specified portions thereof, provided that (a) the Tax Incre-
ment derived in each of the two preceding calendar years
from the Districts or port4 ons thereof which remains pledged
hereunder equals at least 25% of the maximum principal and
interest on the Bonds (assuming mandatory redemption of
principal in accordance with the schedule set forth in Sec-
- 19 -
1T
tion 2.02 hereof) (and any outstanding parity obligations
permitted by Section 6.04 hereof) due in any succeeding
calendar year, after reducing the amount of principal and
interest due on the next interest payment date by any
amounts then on deposit in the Debt Service Account in ex-
cess of the Basic Reserve Requirement, and (b) the
shall have furnished the Board of Commis-
sioners a written estimate that the Tax Increment which will
be received by the Authority for the remaining period over
which Tax Increment may be received from remaining Districts
or portions thereof, based upon the most recent determina-
tion of Captured Assessed Valuation for the remaining Dis-
tricts or portions thereof and application of the most re-
cent mill rates for property taxes levied on such property,
will be sufficient to pay when duet of the principal of
and interest on the Bonds (and any prior or parity obliga-
tions permitted by Section 6.04 hereof) to their scheduled
maturity or mandatory redemption dates.
6 . 04. Parity Obligations. To the extent permitted by
Law, the Authority may by resolution of the Board of Commis-
sioners pledge or permit the pledge of the Tax Increment to
be derived from any District or Districts or specified por-
tions thereof to the, payment of principal of and interest on
any obligations of the City or the Authority issued on a
parity with the pledge of Tax Increment from such District
or Districts to the Bonds, provided that (a) the sum of (i )
the Tax Increment derived in the preceding calendar year
from the District or Districts or portions thereof which are
subject to a parity Tax Increment pledge less the maximum
annual debt service on such parity obligations, and ( ii ) the
Tax Increment derived in the preceding calendar year from
the Districts or portions thereof which are not ubject to a
parity Tax Increment pledge, equals at least of the
maximum principal and interest on the Bonds due in any suc-
ceeding calendar year (assuming mandatory redemption of
principal in accordance with the schedule set forth in Sec-
tion 2.02 hereof) , and (b) the shall have
furnished the Board of Commissioners a written estimate that
(i) the Tax Increment which will be received by the Author-
ity in each year for the remaining period over which Tax
Increment may be received from the Districts or portions
thereof which are not subject to a parity Tax Increment
pledge and ( ii) the Tax Increment which will be received by
the Authority in each year for the remaining period over
which Tax Increment may be received from the Districts or
portions thereof which are subject to a parity Tax Increment
pledge reduced by the annual debt service on such parity
obligations, computed on the basis of the most recent de-
termination of Captured Assessed Valuation for such Dis-
tricts or portions thereof and application of the most re-
cent mill razes for property taxes levied on such property,
- 20 -
lU
will be sufficient to pay when due 25! of the principal of •
and interest on the Bonds to their scheduled maturity dates
or mandatory redemption. The Authority or the City may
grant a pledge of or lien on the Tax Increment of any Dis-
trict or portion thereof which is subordinate to the pledge
to the Bonds under this Resolution. The Authority shall not
pledge or permit the pledge of any Tax Increment (other than
Tax Increment released pursuant to Section 6.03 hereof) 'from
a District or portion thereof which is prior to the pledge
to the Bonds hereunder.
6.05. Cooperation Agreement Amendments. The form of
Amended and Restated Cooperation Agreement proposed to be
entered into between the City and the Authority is hereby
approved. The Amended and Restated Cooperation Agreement,
with appropriate insertions and formal revisions as shall be
necessary or appropriate shall be executed by the Chairman
and attested by the Secretary in substantially the form on
file with such changes therein not inconsistent with law as
the officers executing the same may approve, which approval
shall be conclusively evidenced by the execution thereof.
The Amended and Restated Cooperation Agreement shall be
filed in the office of the Anoka County Auditor prior to the
issuance of the Bonds.
SECTION 7. TEE BOND INSURANCE.
7.01. Acceptance of Proposal. The proposal of
( "Insurer" ) to insure the payment ET—FIE:
nine
cipal of and interest on the Bonds under its standard form
of Policy (the "Bond
Insurance" ) is hereby 'ccepted and the Authority shall pay
the premium therefor as an expense of the issuance of the
Bonds.
7.02. Concerning the Bond Insurance Policy. As long as
the Bond Insurance shall be in full force and effect, the
Authority shall recognize the subrogation rights of Insurer
under the Bond Insurance Policy.
SECTION 8. MISCELLANEOUS.
8.01. Arbitrage. The Authority covenants and agrees
with the purchasers and holders of the Bonds that the in-
vestments of proceeds of the Bonds, including the investment
of any Tax Increment or other revenues pledged to the Bonds
which are considered proceeds under the applicable regula-
tions, and accumulated sinking funds , if any, shall be
limited as to amount and yield in such manner that the Bonds
shall not be arbitrage bonds within the meaning of Section
103(c) of the Internal Revenue Code of 1954 , as amended, and
:egu'_at_:.ns thereunder . On the basis of the existing facts ,
- 21 -
1V
estimates and circumstances, including the foregoing find-
ings and covenants, the Board of Commissioners of the Au-
thority hereby certifies that it is not expected that the
proceeds of the Bonds will be used in such manner as to
cause the Bonds to be arbitrage bonds under Section 103(c)
and regulations thereunder. The shall
furnish an arbitrage certificate to the purchaser embracing
or based on the foregoing certification at the time of de-
livery of the Bonds to the purchaser.
•
8.02. Registration. The is hereby au-
thorized and directed to certify a copy of this Resolution
and to cause the same to be filed with the Anoka County
Auditor, in accordance with Section 475.63, Minnesota Stat-
utes, and to obtain his certificate as to registration of
the Bonds.
8.03. Defeasance. When there shall have been deposited
at any time with a qualified bank or trust company in an
irrevocable escrow account for the purpose, cash or direct
obligations of or obligations fully guaranteed by the United
States of America described in Section 475.67, Minnesota
Statutes, the principal and interest on which shall be suf-
ficient to pay the principal of any Bonds (and premium, if
any) when the same becomes due, either at maturity or other-
wise, or at the date fixed for the redemption thereof and to
pay all interest with respect thereto at the due dates for
such interest or to the date fixed for redemption, for the
use and benefit of the holders thereof, then upon such de-
posit all such Bonds shall cease to be entitled to any lien,
benefit or security of this Resolution except the right to
receive the funds so deposited, and such Bonds shall be
deemed not to be outstanding hereunder; and it shall be the
duty of the escrow agent to hold the cash and securities so
deposited for the benefit of the holders of such Bonds and
from and after such date, redemption date or maturity, in-
terest on such Bonds thereof called for redemption shall
cease to accrue. In the event that the principal and re-
demption price, if applicable, and interest due on the Bonds
shall be paid by pursuant to a policy referred
to in Section 7.01 hereof, the pledge of the Tax Increment
and all covenants, agreements and other obligations of the
Authority to the holders of the Bonds shall continue to
exist and shall be subrogated to the rights of
such holders.
8.04. Certification. The Chairman, the Secretary and
other officers and employees of the Authority are hereby
authorized and directed to furnish to the attorneys approv-
ing the Bonds, on behalf of the purchasers of the Bonds ,
certified copies of all proceedings and certifications as to
facts as shown by the books and records of the Authority, to
- 22 -
1W
•
show the proceedings taken in connection with the Districts
and the Bonds, and the right and authority of the Authority
to issue the Bonds, and all such certified copies and cer-
tifications shall be deemed representations of fact on the
part of the Authority.
•
8.05. Effective Date. This resolution shall take ef-
fect and be in force from and after its approval.
•
- 23 -
lX
KER/fridleyl
Draft 4/30/85
ESCROW AGREEMENT
Three Series of General Obligation
Tax Increment Bonds
City of Fridley, Minnesota
THIS AGREEMENT made this day of May, 1985, by and
among ( "Escrow Agent" ) , the City of
Fridley, Minnesota (the "City" ) , and the Housing and Rede-
velopment Authority in and for the City of Fridley, Minne-
sota (the "Authority" ) .
RECITALS
A. The City has heretofore duly issued and has now
outstanding the following series of -its bonds (the "Out-
standing Refunded Bonds" ) :
$2, 200, 000 General Obligation Tax Increment
Redevelopment Bonds of 1981, dated as of February
1, 1981 ( "1981 Bonds" ) , $2,075,000 outstanding;
$625,000 General Obligation Tax Increment
Redevelopment Bonds of 1982, dated as of August 1,
1982 ( "1982 Bonds" ) , $620,000 outstanding; and
$600,000 General Obligation Tax Increment
Redevelopment Bonds of 1982, Series II, dated as of
November 1, 1982 ( "1982 Bonds, Series II" ) .
B. The Authority has pursuant to a resolution duly.
adopted on May , 1985 (the "Refunding Bond Resolution" )
called for redemption and prepayment all outstanding 1981
Bonds on August 1, 1990 , all outstanding 1982 Bonds on Feb-
ruary 1, 1984 and all outstanding 1982 Bonds, Series II on
February 1, 1994 .
- 1 -
lY
C. To provide for the refunding of the Outstanding
Refunded Bonds and the payment of certain public redevelop-
ment costs, pursuant to the Refunding Bond Resolution the
Authority has authorized the issuance of $ Tax In-
crement Revenue Refunding of 1985, dated as of May 1, 1985
(the "Refunding Bonds" ) . Pursuant to the Refunding Bond
Resolution $ of bond proceeds, and $ of addi-
tional City funds held in a sinking fund for the Outstanding
Refunded Bonds has been received by the Escrow Agent, and
such amount shall be irrevocably deposited in a special
trust account to be maintained by the Escrow Agent pursuant
to the terms of this Escrow Agreement for each issue of
Outstanding Refunded Bonds (collectively, such accounts
being the "Escrow Fund" ) for the refunding of the Out-
standing Refunded Bonds. Additionally, the Escrow Agent has
received $ of Bond proceeds, which shall be applied
toward the payment of expenses of issuance of the Refunding
Bonds as herein provided.
D. $ of the amount in the Escrow Fund has
simultaneously been invested in the obligations of the
United States of America or evidences thereof which are
described in Exhibit A ( the "Acquired Government Obliga-
• tions" ) . The remaining deposited in the Escrow
Fund shall be held as an initial cash balance.
E. The Acquired Government Obligations, together with
such cash balance allocated to each account in the Escrow
- 2 -
1z
Fund (collectively, the "Escrow Deposit" ) shall be used to
pay the principal of and interest on the respective Out-
standing Refunded Bonds as hereinafter provided.
F. The Escrow Agent is a banking corporation with
trust powers organized under the laws of the United States
whose deposits are insured by the Federal Deposit Insurance
Corporation, and whose combined capital and surplus is not
less than $500, 000.
AGREEMENT
NOW, THEREFORE, in consideration of the terms hereof,
the parties hereby agree as follows:
1. Deposit. The Authority and the City hereby irrevo-
cably deposit the Escrow Deposit with the Escrow Agent in
trust for the security of the holders and owners of the
Outstanding Refunded Bonds, the receipt of which the Escrow
Agent hereby acknowledges.
2. Collection and Payment. The Escrow Agent will
collect all interest payable on the Acquired Government
Obligations in each account in the Escrow Fund as and when
such interest becomes due and payable and shall cause such
Acquired Government Obligations to be presented for payment
and converted into cash on their respective maturity or due
dates in accordance with the schedule of cash payments set
forth in Exhibit B hereto to be received by the Escrow Agent
with respect to the Acquired Government Obligations . The
Escrow Agent shall, out of moneys from the applicable
- 3 -
1AA
account in the Escrow Fund remit to the paying agents for
the related Outstanding Refunded Bonds, and any successors
of such paying agents, amounts equal to the principal of and
interest on the applicable Outstanding Refunded Bonds when
due or called for prior redemption.
3. Sufficiency of Escrow Deposit. The City repre-
sents, and the Escrow Agent acknowledges and agrees in re-
liance upon the information furnished by , that said
amounts of the Escrow Deposit deposited in each account, if
the principal of and interest on the Acquired Government
Obligations are paid in accordance with their terms, is
sufficient to produce cash in amounts sufficient to enable
the Escrow Agent to make full and timely payments of princi-
pal of and interest on the applicable Outstanding Refunded
Bonds as provided in paragraph 2 hereof and comply with the
requirements of Section 475.67, Minnesota Statutes.
4 . Redemption of Certain Outstanding Bonds. The City
shall cause the Notices of Call for Redemption attached
hereto as Exhibit C-1, Exhibit C-2, and Exhibit C-3 to be
duly published in accordance with Section 475. 54, Subdivi-
sion 4, Minnesota Statutes, and mailed to the paying agents
for the Outstanding Refunded Bonds no later than June 15,
1985 . Prior to the respective redemption dates of the Out-
standing Refunded Bonds, the Escrow Agent shall take what-
ever actions are customary in the trade to notify the
holders of the Outstanding Refunded Bonds which are called
- 4 -
1BB
for redemption and payment prior to their maturity that such
Bonds have been called for redemption and prepayment as of
their respective redemption dates, and shall cause the
Notices of Call attached hereto as Exhibits C-1, C-2 and C-3
to be published in Commercial West or some other appropriate
periodical or newspaper not more than 90 days nor less than
45 days before said redemption date, but failure to give
such subsequent notice shall not affect the validity of the
call for redemption.
5. Irrevocable Agreement. The Authority will not
repeal, revoke or amend the Refunding Bond Resolution in any
manner which would materially and adversely affect the per-
formance of this Escrow Agreement or payment of the princi-
pal of and interest on the Outstanding Refunded Bonds when
due.
6. Fees. The Escrow Agent understands and agrees that
it shall be paid by the Authority an escrow fee in the
amount of $ for its entire services hereunder and
for payment of its fees and expenses. The initial fee of
the Escrow Agent shall be paid from the $ referred
to in Recital C, which is not part of the Escrow Fund. The
remainder of such amount shall be applied as set forth in
the list of issuance costs attached hereto as Exhibit D or
otherwise as directed by the of the
Authority.
- 5 -
'cc
7 . Paying Agent Fees. All reasonable fees and
expenses charged by Paying Agents for the Outstanding
Refunded Bonds, or their successors as such Paying Agents,
shall be paid directly by the City.
8. Excess Funds. All monies remaining in the Escrow
Fund after payment therefrom of all sums required to be paid
under this Agreement shall be promptly remitted to the
City.
9 . Reinvestment. The Escrow Agent will from time to
time reinvest all or any portion of any outstanding Acquired
Government Obligations only at the direction of the City and
upon receipt of a schedule of such reinvestments and the
opinion of bond counsel for the City that such reinvestment
is permitted under Minnesota law and without contravention
of the yield restrictions imposed by Section 103(c) of the
Internal Revenue Code and the applicable regulations and
administrative interpretations thereunder and the opinion of
a firm of independent public accountants that such reinvest-
ments will not affect the ability of the Escrow Agent to
meet the payments specified in paragraph 2 hereof from the
Escrow Fund. The Escrow Agent shall at the direction of the
City sell and reinvest all or any portion of any outstanding
Acquired Government Obligations and pay any surplus funds
resulting therefrom upon receipt of a schedule of sales and
reinvestments, an opinion of bond counsel for the City that
such sales and reinvestments are permitted under Minnesota
- 6 -
1DD
law and that the restructuring transaction wll not cause the
Refunding Bonds to become arbitrage bonds under Section
103(c) of the Internal Revenue Code and applicable regula-
tions and administrative interpretations thereunder and an
opinion of a firm of independent accountants that such sales
and reinvestments will not affect the ability of the Escrow
Agent to meet the payments specified in paragraph 2 hereof
from the Escrow Fund.
10 . Reports and Other Responsibilities of Escrow
Agent. For as long as any of the Outstanding Refunded Bonds
are outstanding, annually, on or before February 1 of each
year , the Escrow Agent shall prepare and send to the City
and the Authority a statement covering the status of the
Escrow Fund and the accounts therein as of the preceding
December 31, which statement shall set forth the cash and
Acquired Government Obligations held by the Escrow Agent,
any of such Acquired Government Obligations which have ma-
tured and the amounts received by the Escrow Agent by reason
of such maturity, the interest earned on any of such
Acquired Government Obligations and the interest and/or
principal derived therefrom, the amounts of cash paid for,
the principal of and interest on the Outstanding Refunded
Bonds as said payments shall become due and payable, and any
other transactions of the Escrow Agent pertaining to its
duties and obligations as set forth herein.
- 7 -
lEE
All Acquired Government Obligations, moneys and invest-
ment income deposited with or received by the Escrow Agent
pursuant to this Agreement shall be subject to the trust
created by this Agreement, and the Escrow Agent shall be
liable for the preservation and safekeeping thereof; pro-
vided, however, it shall not be responsible for any depre-
ciation in value of any of the Acquired Government Obliga-
tions or for the reinvestment of the same except as herein
provided. Such Acquired Government Obligations, moneys and
investment income held in the Escrow Fund shall be held in
special trust accounts of the Escrow Agent or any agent em-
ployed by the Escrow Agent meeting the description of Reci-
tal G hereof, neither the Escrow Agent nor its agent shall
have any right to set off any amounts or securities in the
Escrow Account against any amounts whatsoever which the City
or Authority may at any time owe the Escrow Agent or its
agent, including any additional fees which may be payable
under paragraph 6 hereof.
11 . Limited Obligation of Escrow Agent. The duties and
obligations of the Escrow Agent shall be as prescribed by
the provisions of this Agreement, the Escrow Agent shall not
be liable except for the performance of its duties and obli-
gations as specifically set forth herein and to act in good
faith in the performance thereof, and no implied duties or
obligations shall be incurred by the Escrow Agent other than
those specified herein.
- 8
1FF
12. Miscellaneous. This Agreement shall be binding
upon and shall inure to the benefit of the City, the Author-
ity and the Escrow Agent and their respective successors and
assigns. In addition, this Agreement shall constitute a
third party beneficiary contract for the benefit of the
holders at any time of the Outstanding Refunded Bonds or of
coupons appertaining thereto. Such third party beneficia-
ries shall be entitled to enforce performance and observance
of the City, the Authority and the Escrow Agent of the re-
spective agreements and covenants herein contained as fully
and completely as if such third party beneficiaries were
parties hereto. This Agreement shall be governed and con-
strued in accordance with the laws of Minnesota, uses cap-
tions only for reference and not interpretation, and may not
be amended or assigned except as may be herein provided.
IN WITNESS WHEREOF, the City, the Authority and the
Escrow Agent have caused this Agreement to be executed in
their respective names as of the day and year first above
written.
CITY OF FRIDLEY
By
Mayor
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF FRIDLEY
By
Chairman
- 9 -
1GG
By
Title
- 10 -
1HH
Exhibit A
Acquired Government Obligations
(TO COME)
A - 1
'II
Exhibit B
Escrow Fund Receipts
(TO COME)
B - 1
1JJ
Exhibit C-1
NOTICE OF CALL FOR REDEMPTION
$2,200,000
GENERAL OBLIGATION TAX INCREMENT
REDEVELOPMENT BONDS
CITY OF FRIDLEY, MINNESOTA
NOTICE IS HEREBY GIVEN that on August 1, 1990, the City
of Fridley, Minnesota, will redeem and pay prior to maturity
all of the then outstanding bonds of its issue of $2, 200, 000
General Obligation Tax Increment Redevelopment Bonds, dated
February 1, 1981, at par and accrued interest to such re-
demption date in accordance with the terms of such bonds and
as authorized by the resolution of the City Council provid-
ing for their issuance. Payment of the principal of and
accrued interest on such bonds will be made on the aforesaid
redemption date at the office of the paying agent for the
Bonds, First National Bank of Minneapolis, in Minneapolis,
Minnesota, or its successors, and interest on all bonds will
cease as of that date whether or not presented for payment.
Dated:
BY ORDER OF THE CITY COUNCIL
Nasim Quereshi
City Manager
City of Fridley, Minnesota
C - 1
1KK
Exhibit C-2
NOTICE OF CALL FOR REDEMPTION
$625,000
GENERAL OBLIGATION TAX INCREMENT REDEVELOPMENT BONDS
CITY OF FRIDLEY, MINNESOTA
NOTICE IS HEREBY GIVEN that on February 1, 1994, the
City of Fridley, Minnesota, will redeem and pay prior to
maturity all of the then outstanding bonds of its issue of
$625,000 General Obligation Tax Increment Redevelopment
Bonds, dated August 1, 1982, at par and accrued interest to
such redemption date in accordance with the terms of such
bonds and as authorized by the resolution of the City Coun-
cil providing for their issuance. Payment of the principal
of and accrued interest on such bonds will be made on the
aforesaid redemption date at the office of the paying agent
for the bonds, Northern Trust Company, in Chicago, Illinois,
or its successors, and interest on all bonds will cease as
of that date whether or not presented for payment.
Dated:
BY ORDER OF THE CITY COUNCIL
Nasim Quereshi
City Manager
City of Fridley, Minnesota
C - 2
ILL
Exhibit C-3
NOTICE OF CALL FOR REDEMPTION
$600,000
GENERAL OBLIGATION TAX INCREMENT
REDEVELOPMENT BONDS, SERIES II
CITY OF FRIDLEY, MINNESOTA
NOTICE IS HEREBY GIVEN that on February 1, 1994, the
City of Fridley, Minnesota, will redeem and pay prior to
maturity all of the then outstanding bonds of its issue of
$600, 000 General Obligation Tax Increment Redevelopment
Bonds, Series II, dated November 1, 1982, at par and accrued
interest to such redemption date in accordance with the
terms of such bonds and as authorized by the resolution of
the City Council providing for their issuance. Payment of
the principal of and accrued interest on such bonds will be
made on the aforesaid redemption date at the office of the
paying agent for the bonds, First Trust Company of St.
Paul, in St. Paul, Minnesota, or its successors, and
interest on all bonds will cease as of that date whether or
not presented for payment.
Dated:
BY ORDER OF THE CITY COUNCIL
Nasim Quereshi
City Manager
City of Fridley, Minnesota
C - 3
ltirl
EXHIBIT D
Issuance Costs
D - 1
1111)
KER/fridley2
Draft 4/30/85
ARBITRAGE CERTIFICATE
The undersigned, , of the Housing and
Redevelopment Authority in and for the City of Fridley,
Minnesota (the "Authority") hereby certifies as follows:
1. Responsible Officer . I am an officer of the
Authority charged with the responsibility for the issuance,
sale and delivery of the Authority' s $ Tax In-
crement Revenue Bonds of 1985 (the "Bonds" ) issued pursuant
to a Bond Resolution (Resolution No. ) adopted by
the Board of Commissioners of the Authority on May _, 1985
(the "Bond Resolution" ) .
2. Background and Purpose. A portion of the Bonds are
issued pursuant to Minnesota Statutes, Sections 273.71
through 273.86 (the "Tax Increment Act" ) for the purpose of
paying public redevelopment costs under Minnesota Statutes,
Chapter 462 (the "Redevelopment Act" ) with respect to pro-
jects created under the Tax Increment Act or Redevelopment
Act known as Redevelopment Project No. 1, Moore Lake Rede-
velopment Project and North Area Project, all such projects
having coterminous areas located in the City of Fridley,
Minnesota (collectively such projects being the "Pro-
ject" ) . Additionally, a portion of the Bonds are issued to
refund under the Tax Increment Act and Minnesota Statutes,
Sections 475.67 the following three series of general obli-
100
gation bonds (the "Refunded Bonds" ) of the City of Fridley,
Minnesota (the "City" ) :
$2,200,000 General Obligation Tax Incre-
ment Redevelopment Bonds of 1981, dated as of
February 1, 1981 ( "1981 Bonds" ) , $2,075,000
outstanding;
$625,000 General Obligation Tax Increment
Redevelopment Bonds of 1982, dated as of
August 1, 1982 ( "1982 Bonds" ) , $620,000 out-
standing; and
$600 ,000 General Obligation Tax Increment
Redevelopment Bonds of 1982, Series II, dated
as of November 1, 1982 ( "1982 Bonds, Series
II" ) .
The Refunded Bonds were issued for the purpose of providing
funds to pay public redevelopment costs in the Project. The
City and the Authority have entered into an Escrow Agreement
dated as of May _, 1985 (the "Escrow Agreement" ) establish-
ing an escrow fund (the "Escrow Fund" ) with
( "Escrow Agent" ) to provide for the payment of the principal
of and interest on the Refunded Bonds when due, and, to call
for early redemption on February 1, 1990 all then outstand-
ing 1981 Bonds and on February 1, 1994 all then outstanding
1982 Bonds and 1982 Bonds, Series II, at par plus accrued
interest. The City, which is the issuer of the Refunded
Bonds, is included within the Authority, which is the issuer
of the Bonds.
3. Original Proceeds. The net amount received by the
Authority as a result of the sale of the Bonds and treated
as original proceeds is computed as follows:
- 2 -
1PP
Purchase Price $
Accrued Interest
Less: Issuance Expenses $
(Not Including Bond
Insurance)
Original Proceeds
11
4. A. .lication of Proceeds; No Over Issuance. The
total proceeds from the sale of the Bonds are $
($ purchase price plus $ accrued
interest) , which will be applied as follows:
(a) $ will be used to acquire United
States Treasury Obligation -- State and Local Government
Series (the "SLGS" ) to be held by the Escrow Agent in
the Escrow Fund for the purpose of paying debt service
on the Refunded Bonds.
(b) $ will be deposited with the Escrow
Agent as a cash balance in the Escrow Fund for the pur-
pose of paying debt service on the Refunded Bonds.
will be applied to the payment of
expenses of the Authority and the City in connection
with the issuance and sale of the Bonds ($_____-
and
the purchase of insurance for the Bonds ($ ) •
(d) $ will be deposited in the 1985 Tax
Increment Revenue Bonds Debt Service Account established
by the Bond Resolution (the "Debt Service Account" )
for
accrued interest on the
Bonds ($ ) and
$ as the initial Basic Reserve Requirement (as
defined in the Bond Resolution) .
- 3 -
100
(e) $ will be deposited in the 1985
Tax Increment Revenue Bonds Project Account established
by the Bond Resolution (the "Project Account" ) for the
purpose of paying public redevelopment costs of the
Project.
Investment proceeds on Bond proceeds will be applied to
payment of public redevelopment costs ( in the case of Pro-
ject Account investments) , payment of debt service on the
Refunded Bonds (in the case of Escrow Fund investments) and
payment of debt service on the Bonds (in the case of Debt
Service Account investments) . Accordingly, all original
proceeds will be expended for the governmental purposes of
the issue and no over issuance of Bonds will occur .
The application of Bond proceeds to the purchase of the
SLGS and the cash balance for the Escrow Fund is set forth
in Exhibit hereto.
5. Multipurpose Issue. Pursuant to Treas. Reg.
51 .103-13(b) (9) , in the case of an issue of bonds, part of
the proceeds of which are used for a refunding to which
Treas. Reg . §1. 103-14 (e) applies, the portion of the pro-
ceeds to be used partly for refunding shall be treated as a
separate issue for purposes of determining the temporary
period requirements, the reasonably required reserve or
replacement fund, the application of the major portion test
and the application of Treas. Reg. 51.103-15 (relating to
excess proceeds) with respect to such separate issue.
$ of Bond proceeds will be applied to the refunding
- 4 -
1RR
(the "Refunding Portion" ) . Such amount consists of ( i )
$ for deposit in the Escrow Fund, (ii) $
of issuance costs associated solely with the refunding
(Escrow Agent Fee, fiscal fees, etc. ) , (iii) $
deposited as the Basic Reserve Requirement for Bonds issued
for the refunding and ( iv) $ of other issuance
costs and underwriter 's discount and $ of accrued
interest, allocated to the Refunding Portion. The remainder
of the Bonds, $ (the "New Money Portion" ) , is
composed of the following: (1) $ for deposit in the
Project Account for public redevelopment costs, ( 2)
$ for issuance costs associated solely with such
portion, ( 3) $ deposited as the Basic Reserve Re-
quirement for Bonds issued for public redevelopment costs
and (4) $ of other issuance costs and under-
writer ' s discount and $ of accrued interest allo-
cated to such portion. Deposits, discounts or costs
allocable to both the Refunding Portion and the New Money
Portion are pro rated as between the two on the basis of the
face amount of the Bonds allocable to each portion.
6. Separate Issue Treatment. The various series of
Refunding Bonds constitute separate issues of obligations
within the meaning of Treas. Reg. 51 .103-13(b) ( 10) . No two
series of the Refunded Bonds payable from the same tax in-
crements were issued within a period of sixty days of each
other or pursuant to a common plan of marketing. Accord-
ingly, since the Refunding Portion will refund three sepa-
- 5 -
1SS
rate series of prior bonds, pursuant to Treas. Reg. S1.103-
14 (e) ( 1) ( ii) , for matters related to transferred proceeds;
the major portion test, the reasonably required reserve
replacement fund and the adjusted maturity date, the portion
of the Refunding Portion used to refund each prior issue
will be treated as a separate refunding issue.
7. Construction Account Balance. The City maintains a
construction account (the "Construction Account" ) for the
purpose of paying development or redevelopment project costs
of the Project. Original proceeds and investment proceeds
of the Refunded Bonds totaling $ are the sole
funds in such account. Funds in the Construction Account
are not pledged to the payment of debt service on any Re-
funded Bonds and are not reasonably expected to be applied
for such purpose.
8. Application of Refunded Debt Service Account Bal-
ance, Sinking Funds, and Pledged Monies. The City maintains
a single account (the "Refunded Debt Service Account" ) for
the purpose of paying principal and interest on all Refunded
Bonds . The amounts presently on deposit in the Refunded
Debt Service Account ($ ) will be allocated to
each series of Refunded Bonds on the basis of their face
amounts pursuant to Treas. Reg. 51.103-13(g) (6) and as
allocated will be deposited in the Escrow Fund in sub-
accounts for the respective series. Amounts so deposited
will be invested as set forth in Exhibit _ attached
hereto. All amounts so deposited consist of tax increments
- 6 -
1TT
or earnings thereon and will not be subject to yield re-
strictions as they will constitute less than a major portion
of the proceeds of the applicable series of Refunded Bonds
(less than 15% of the face amount thereof where the original
proceeds, without regard to issuance costs, were at least
98% of the original face amount) . Such amounts as held in
the Refunded Debt Service Account were not expected to be
applied to the payment of debt service on the Refunded Bonds
because tax increments expected to have been collected and
deposited in the Refunded Debt-Service Account were reason-
ably expected to have been sufficient alone to fund all debt
service on the Refunded Bonds. Except for amounts in the
Refunded Debt Ser:ice Account and the Escrow Fund, there
were or are no other amounts pledged or reasonably expected
to be applied to the payment of debt service on the Refunded
Bonds or which constitute sinking funds or replaced funds
for such issue.
9 . Escrow Fund Investment Proceeds. The portion of
Bond proceeds to be deposited with the Escrow Agent set
forth in Section 4 hereof will be used to acquire certain
United States Treasury Obligations - SLGS which mature and
bear interest as set forth in Exhibit _. The total inter-
est income received from the SLGS will be $ . The
amounts received as principal of and interest on the SLGS
are expected to be applied in accordance with the Escrow
Agreement to payment of principal and interest on the Re-
funded Bonds and are not expected to be invested or rein-
- 7 -
1UU
vested. Amounts remaining in the Escrow Fund after payment
of principal and interest on the Refunded Bonds will be
$ and will be deposited in the Construction
Account. Bond proceeds for- payment of issuance costs and
issuance premium are expected to be paid on the date hereof
for such purposes without investment.
10. Escrow Fund Investments from Sources other than
Bond Proceeds; Minor Portions. The $ deposited in
the Escrow Fund from sources other than the proceeds of the
Bonds was derived from the Refunded Debt Service Account and
will be used to acquire the investments described in Exhibit
. All such amounts and earnings thereon at anytime in the
Escrow Fund which are allocated to a series of Refunded
Bonds will be less than 15% of the face amount of the appli-
cable series of Refunded Bonds and will be unrestricted as
to yield pursuant to Treas. Reg. §1.103-13 (b) (1) (ii) .
11. Project Account Investments. Bond proceeds de-
posited in the Project Account will be invested as unre-
stricted yield pursuant to the temporary period discussed in
section 17(a) . All earnings from such investing will be
applied to public redevelopment costs within such temporary
period.
12. Transferred Proceeds. All original proceeds and
investment proceeds of the Refunded Bonds have been spent
except for $ held in the Construction Fund. All
original and investment proceeds will be fully spent for
public redevelopment costs of the Project before February 1,
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1VV
1986, the next principal payment date for Refunded Bonds.
Accordingly, there will be no transferred proceeds within
the meaning of Treas. Reg. §1.103-14(e) .
13. Investment Proceeds. Investment proceeds for the
Bonds will be all earnings on proceeds of the Bonds. Based
on sections 9, 10, 11 and 12 hereof, it is not expected that
there will be any investment proceeds with respect to the
Bonds within the meaning of Treas. Reg. S1.103-13(b) ( 2) ( ii) ,
other than the $ referred to above in section 9,
and earnings on the proceeds of the Bonds deposited in the
Debt Service Account and the Project Account Fund.
14 . Yield Calculations. For purposes of this Certifi-
cate, yield is, and shall be, calculated in the manner pro-
vided by Treas. Reg. 51 . 103-13(c) and (d) , as modified by
State of Washington v. Commissioner , 692F. 2d 128 (D.C. Cir .
1982) . Thus, generally, yield means the percentage rate
which when used in computing the present value of all pay-
ments of principal of and interest on an obligation produces
an amount equal to the purchase price. For the purpose of
computing the yield on the Bonds, the purchase price is the
price paid by the purchasers of the Bonds to the Authority,
less the $ of reasonable administrative costs of
the City incurred in connection with the issuance of the
Bonds, as permitted by State of Washington v. Commissioner,
and less the $ for insurance on the Bonds paid on
the date hereof which is treated as interest paid on the
Bonds as permitted by Treas. Reg. §1.103-13(c) (8) . Accord-
- 9 -
•
ing to information provided by Miller & Schroeder Munici-
pals, Inc. , underwriters for the Bonds, the present value of
the debt service savings resulting from the purchase of the
bond insurance, discounted at the yield on the Bonds, is
$ , an amount greater than the $ premium.
In the calculation of yields stated in paragraphs 14 and 15
the present worth of all payments of the principal of and
interest on the Bonds and the SLGS, respectively, was com-
puted by the Canadian method of computing yield, a method
which is consistent with the principles of the actuarial
method of computing yield, as required by Treas . Reg.
§1.103-13(c) (1) . The yield on the Bonds and the SLGS was
calculated by use of the same frequency interval of com-
pounding interest, i .e. , interest was compounded semian-
nually using a 360-day year. The SLGS constitute the same
class of acquired obligations, since all of them are
acquired non-purpose obligations under Treas. Reg. S1.103-
13(b) (4) (iv) . Thus, the computation was made jointly for
such SLGS which comprise a single issue of acquired obliga-
tions as provided in Treas . Reg. S1.103-13(c) (2) . All SLGS
in the Escrow Account will be purchased directly from the
United States Treasury.
15. Yield on the Bonds. The yield produced by the
Bonds is % per annum. The Bonds were sold at
public sale for a reasonable price under customary standards
applicable in the market. The purchase price of the Bonds
and interest rates thereon are set forth in Exhibit _
hereto.
- 10 -
1XX
16. Yield on the SLGS in Escrow Account Purchased with
Bond Proceeds. The yield produced by the SLGS deposited in
the Escrow Fund which were purchased with the proceeds of
the Bonds is not more than % per annum. Such yield
is not materially higher than the yield produced by the
Bonds as set forth in paragraph 15 hereof. As permitted by
Treas. Reg. S1.103-13(b) ( 5) ( ii ) , a materially higher yield
is the yield which is higher then the yield on the Bonds
plus an amount equal to $25,000 multiplied by the yield on
the Bonds, divided by the original proceeds of the Bonds .
17. Temporary Periods for Unrestricted Yields.
(a) New Money Portion. Not later than six months
from the date hereof the Authority will incur a binding
obligation in an amount not less than $100,000 to com-
mence construction or acquisition of land or improve-
ments for the public redevelopment costs to be financed
with proceeds of the Bonds deposited in the Project
Account. After incurring such obligation, work on the
public redevelopment costs will proceed with due dili-
gence and all original proceeds deposited in the Project
Account will be expended on such public redevelopment
costs within three years from the date hereof. Accord-
ingly, pursuant to Treas. Reg. §1.103-14 (b) such
original proceeds and investment proceeds thereon, which
are required to be deposited in the Project Account may
be invested without yield restriction for a period end-
ing not later than three years from the date hereof .
- 11 -
1YY
(b) ing
Money Portion. The applicable tem-
•
porary period during which the Authority is permitted to
invest a major portion of the Refunding Portion at a
yield materially higher than the yield on the Bonds is
the 30-day period specified and permitted under Treas.
Reg. 51 .103-14(e) (3) (ii) (A) . $
of Bond pro- 11
ceeds deposited in the Debt Service Account was received
as accrued interest for a period of less than six
months. Such amount will be expended within the one
year temporary period permitted by
Treas. Reg. §1.103-
14(e) (3) (vii) and may for such period be invested at an
unrestricted yield.
The $ to be applied to
issuance expenses will be so expended within the one
year temporary period permitted by Treas. Reg . §1.103-
14 (e) ( 3) (viii) .
(c)
Bona Fide Debt Service Fund. A thirteen
month temporary period permitted by Treas. Reg. S1.103-
14(b) (10)
1.103-14(b) (10) applies to amounts contributed to the Debt
Service Account which are described in section 18(a)
hereof and for such period amounts comprising the bona
fide debt service account may be invested at an unre-
stricted yield.
18. Investment of Debt Service Account.
The Bonds are
payable solely
from amounts on deposit from time to time in
the Debt Service Account. Such amounts will consist solely
of (i) the $
initially deposited therein from the
proceeds of the Bonds and Parity Obligations as the Initial
- 12 -
1ZZ
Basic Reserve Requirement (as defined in the Bond Resolu-
tion) or, ( ii) tax increments from five tax increment dis-
tricts established under the Tax Increment Act which are
required under the Bond Resolution and expected to be de-
posited therein only to the extent necessary, with funds on
hand therein in excess of the balances described below, to
pay principal and interest on the Bonds and Parity Bonds (as
defined in the Bond Resolution) and (iii) investment earn-
ings on amounts on deposit therein. No other tax increments
or other funds of the City or the Authority are pledged to
the payment of the Bonds or reasonably expected to be used
therefor . $ of the initial deposit of Bond pro-
ceeds will be deemed held in a bona fide debt service
account and $ in a reasonably required reserve, as
discussed below.
(a) Bona Fide Debt Service Fund. That portion of
the Debt Service Account which exceeds the Basic Reserve
Requirement and Supplemental Reserve .described below is
a fund that will be used' primarily to achieve a proper
matching of revenues and debt service within each bond
year for the Bonds and Parity Obligations and will be
depleted at least once each year except for a reasonable
carryover amount not to exceed the greater of one year ' s
earnings on the fund or one-twelfth of annual debt ser-
vice. The Bond Resolution provides that amounts de-
posited therein from February 1 through February 1 of
the following year will equal 125% of the debt service
- 13 -
'AAA
of the Bonds and any Parity Obligations during such
period but funds in the Debt Service Account in excess
of the amounts held as the Basic Reserve Requirement,
the Supplemental Reserve and amounts necessary to pay
debt service during such period will be returned to the
Authority or held as part of the Supplemental Reserve.
Parity Obligations will have scheduled payments of prin-
cipal and interest only on the same days as the Bonds.
Pursuant to Treas. Reg. S1.103-13(b) (12) a bona fide
debt service fund may be established for' two or more
issues, provided that the total amount in the fund at no
time exceeds the amounts that could be held in bona fide
debt service funds established separately for each of
the issues. Therefore, the amount carried forward from
each February 1 is not reasonably expected to exceed one
year ' s interest on that portion of the Debt Service
Account in excess of the Basic Reserve Requirement and
Supplemental Reserve allocable to the Bonds or any
Parity Obligations and, accordingly such portion of the
Debt Service Reserve Account is a bona fide debt service
fund within the meaning of Treas. Reg. S103-13(b) (12) .
All amounts received as part of the bona fide debt ser-
vice fund are expected to be spent for debt service
within thirteen months of receipt. Accordingly, pursu-
ant to Treas. Reg. §1.1x3-14(b) (10) amounts in such bona
fide debt service fund may be invested as unrestricted
yields.
- 14 -
1BBB
(b) Basic Reserve Requirement. $ of
Bond proceeds will be deposited as the Initial Basic
Reserve Requirement, which does not exceed the lesser of
( i ) 15 percent of the original face amount of the issue
(the original proceeds determined without regard to
issuance expenses being not less than 98 percent of the
original face amount of the issue) , (ii) 125 percent of
the average annual debt service on the Bonds, and ( iii )
the maximum annual debt service on the Bonds . A similar
Initial Basic Reserve Requirement will be funded for any
issuance of Parity Obligations. Further , such reserves
are required by the bond insurer for the sale of the
Bonds. Accordingly, the initial deposit in the Debt
Service Account for the Basic Reserve Requirement con-
stitutes a reasonably required reserve fund within the
meaning of Treas. Reg. 51.103-14(d) . From Tax Incre-
ments deposited, the Authority is thereafter required to
deposit amounts to restore or maintain the Basic Reserve
Requirement which is equal to 125% of the maximum annual
debt service on the Bonds and Parity Obligations.
Absent the issuance of Parity Obligations, amounts held
as the Basic Reserve Requirement for the Bonds will not
exceed 15% of the original proceeds of the Bonds plus
issuance costs. As discussed under Section 5 hereof ,
for purposes of determining a reasonably required re-
serve and replacement fund and the major portion test,
the Bonds are deemed issued as two issues: $
- 15 -
1CCC
for the Refunding Portion and $ for the New
Money Portion. All amounts held as the Basic Reserve
Requirement will be allocated between the Refunding
Portion and New Money Portion in proportion to the
amounts of each portion. All amounts other than
original proceeds held as part of the Basic Reserve
Requirement will be allocated among the Bonds and Parity
Obligations on the basis of the face amount. With
respect to each of the New Money Portion or the
Refunding Portion, up to the lesser of (i) 15% of such
portion (less the portion of the underwriter ' s discount
allocated thereto) , ( ii) 125% of average annual debt
service for such portion and ( iii ) the maximum annual
debt service for such portion will be deemed a
reasonably required reserve and replacement fund for
such portion pursuant to Treas. Reg. §1.103-14(d) and
Rev. Ruling 84-26. The amount of the Basic Reserve
Requirement allocable from time to time to the New Money
Portion which constitutes a reasonably required reserve
may be invested at an unrestricted yield pursuant to
Treas. Reg. S1.103-14(d) . Up to 15% of the New Money
Portion (less the portion of the underwriter ' s discount
allocated thereto) , the amount of the Basic Reserve
Requirement allocable to such portion may be invested at
an unrestricted yield as being less than a major portion
of the New Money Portion pursuant to Treas. Reg. S1.103-
13(b) ( 5) . Any amount of the Basic Reserve Requirement
- 16 -
1DDD
in excess of the foregoing amounts which are allocated
to the New Money Portion shall not be invested at a
yield greater than the yield on the Bonds. In accor-
dance with Treas. Reg. §1.103-14 (e) ( 5) amounts of the
Basic Reserve Requirement allocated to the Refunding
Portion constituting a reasonably required reserve will
not be invested at a yield greater than the yield on the
Bonds before the "adjusted maturity date" of the
Refunded Bonds as such term is defined in Treas. Reg.
§1.103-14 (e) (6) . After each adjusted maturity date,
pursuant to Treas. Reg. SS1.103-14(e) ( 5) and 1.103-
14(e) ( 6) , a portion of original proceeds held as part of
the Basic Reserve Requirement (representing an amount
proportional to the principal of the Refunding Bonds
paid to the extent it constitutes part of a reasonably
required reserve) may be invested at a yield not
exceeding the yield stated in section 16. Any other
amounts held as part of the Basic Reserve Requirement
and allocated to the Refunding Portion will not be
invested at a yield greater than the yield determined by
Section 14 hereof. [Attached hereto as Exhibit is a
schedule showing the investments of amounts allocated to
the Basic Reserve Requirement and the yield thereon. ]
[CONFIRM]
(c) Supplemental Reserve. Amounts of Tax Incre-
ment deposited each year in excess of amounts for
restoration of the Basic Reserve Requirement and payment
- 17 -
IEEE
of debt service on the Bonds and Parity Obligations
will, if less than 25% of such debt service, be held as
part of a Supplemental Reserve for the purchase or
payment of debt service on the Bonds and Parity Obli-
gations. Amounts in the Supplemental Reserve will be so
held (or applied) until payment in full of all such
bonds or obligations or the earlier occurrence of Debt
Service Excess (as defined in the Bond Resolution) which
is at least 25% of debt service on the Bonds and Parity
Obligations during the applicable Computation Period (as
defined in the Bond Resolution) . Amounts so held will
constitute a sinking fund within the meaning of Treas.
Reg. §1.103-13 (g) and will be allocated between the
Bonds ( including among the New Money Portion and the
Refunding Portion) and Parity Obligations on the basis
of face amount. All amounts in the Supplemental Reserve
allocated to the New Money Portion which exceed the
amount of $ , (15% of the New Money Portion
less the underwriter ' s discount allocable thereto) ,
reduced by amounts held as part of the Basic Reserve
Requirement, shall not be invested at a yield greater
than the yield on the Bonds. All amounts in the
Supplemental Reserve allocated to the New Money Portion
shall not be invested at a yield greater than the yield
on the Bonds.
19 . Excess Proceeds . Excess proceeds are computed in
accordance with Treas. Reg. 51. 103-15(b) . For such purposes
the Refunding Portion is a separate issue pursuant to Treas. '
- 18 -
1FFF
Reg. 51 .103-13 (b) (9) . Subject to deductions and exceptions
hereinafter discussed, excess proceeds of the Refunding
Portion of Bonds include all proceeds of such portion, in-
cluding original proceeds, investment proceeds, transferred
proceeds and sinking fund proceeds. For purposes of Treas.
Reg. 51.103-15 "transferred proceeds" means all original
proceeds, investment proceeds and transferred proceeds of
the Refunded Bonds except for amounts spent before the Bonds
are issued.
(a) Original Proceeds. For the above purpose,
original proceeds of the Refunding Portion reflects the
face amount of such portion plus allocable accrued in-
terest $ (section 5 hereof) , less a pro rata
share of underwriter ' s discount $ , less issu-
ance costs incurred solely due to the Refunding Por-
tion, $ , and less issuance costs attributable
to the entire Bond issue and allocated pro rata to the
Refunding Portion , resulting in $
(b) Sinking Fund Proceeds. The only sinking fund
or replaced fund proceeds for the Bonds are those in the
Debt Service Account discussed above and pursuant to
Treas. Reg. 51.103-15(b) ( ix) amounts treated as proceeds
solely because they are accumulated in a sinking fund
for Refunded Bonds are excluded from computing excess
proceeds.
(c) Transferred Proceeds. For purposes of Treas.
Reg. §1. 103-15(b) , the only transferred proceeds of the
Refunding Portion are the original proceeds and invest-
- 19 -
1GGG
ment proceeds of the Refunded Bonds, and earnings
therein. All such amounts are held in the Construction
Account and total $ . Amounts in the Construc-
tion Account will be applied to the payment of public
redevelopment costs which is the purpose for which the
Refunded Bonds were issued. With respect to the Re-
funded Bonds there are no transferred proceeds (within
the meaning of section 1.103-14 (e) ) or other sinking
funds or replaced funds. Transferred proceeds for the
Refunding Portion, within the meaning of Treas. Reg.
S1 .103-15(b) , may be excluded from computing excess
proceeds pursuant to Treas. Reg. §1.103-15 (b) (vi) be-
cause all such proceeds will be applied to the purposes
of the Refunded Bonds.
(d) Investment Proceeds. Investment proceeds from
Bond proceeds deposited in the Escrow Fund will be
$ Investment proceeds on Bond proceeds de-
posited as the Basic Reserve Requirement (which is a
reasonably required reserve) allocable to the Refunding
Portion are excluded from computing excess proceeds
pursuant to Treas. Reg. 51.103-15 (b) (vii ) . Investment
proceeds from accrued interest deposited in the Debt
Service Account will be $
(e) Excess Proceeds Before Certain Deductions.
Before deductions set forth in subparagraph ( f) and
based on the foregoing, the maximum excess proceeds of
the Refunding Portion will be the sum of the following:
- 20 -
1HHH
1. original proceeds (paragraph $
(al))
2. investment proceeds (paragraph (after certain
(d) ) exclusions)
3. sinking fund proceeds [Excluded)
4. transferred proceeds [Excluded)
Total $
(f) Deductions. In computing excess proceeds for
the Bonds pursuant to Treas. Reg. $1.103-15(b) the fol-
lowing may be deducted from the total of (e) :
Total of (e) $
LESS
1. Proceeds that will be
used to pay principal
and interest on the
Refunded Bonds $
2 . Proceeds that will be used
to pay not more than six
months accrued interest on
the Bonds $
3. Proceeds that will be used
to pay capitalized interest
for the Bonds ( including
insurance premium and
investment 'of accrued
interest proceeds) $
4. Proceeds that will be used
as part of a reasonably
required reserve fund for
the Bonds $
5. Proceeds that will be used
to pay the administrative
costs for repaying Re-
funding Bonds, carrying
and repaying the Bonds,
or purchasing, carrying and
selling or redeeming
- 21 -
1III
obligations acquired with
Bond proceeds $ -0-
Total $
Accordingly, excess proceeds do not exceed one percent
of the original proceeds of the Refunding Portion.
20. Bond Covenants. In the Escrow Agreement, the
Authority covenanted and agreed that the Escrow Account will
not be reinvested contrary to the yield restrictions of
Section 103(c) of the Internal Revenue Code of 1954, as
amended, and regulations thereunder. Based on the foregoing
the Authority reasonably expects that except as otherwise
contemplated herein the yield on investment of such funds
will not exceed the yield on the Bonds. The Authority rea-
sonably expects the Bonds will not be arbitrage bonds.
21. Sinking Funds. Except for the Debt Service Account
referred to in the Bond Resolution, the Authority has not
created, and does not expect to create or establish, any
sinking fund, replaced funds or similar fund with respect to
the Bonds . The Authority recognizes that if amounts of tax
increments and other revenues collected and accumulated
exceed the amount of current debt service, other than accum-
ulations to which a temporary period applies, the Authority
will be required to observe the obligation of the Bond Reso-
lution to limit the yield on investment of the amounts in
the Debt Service Account.
- 22 -
1JJJ
22. Accountant ' s Report. The undersigned has read and
studied the report of independent public accountants, per-.
taining to the Bonds and the Escrow Fund.
23. Reasonable Expectations. To the best knowledge,
information and belief of the undersigned, the above expec-
tations are reasonable. All expectations are based on the
foregoing, existing facts, the accountant ' s reports, the
Bond resolution, plans and estimates for construction of
public improvements, the resolution pursuant to which the
Refunded Bonds were issued and existing provisions of the
Internal Revenue Code of 1954, as amended, and regulations
thereunder.
24 . Absence of IRS Listing. The Authority has not been
notified of any listing by the Internal Revenue Services of
an issuer that may not certify its bonds.
25. Purpose and Authority for Certificate. This cer-
tificate is being executed and delivered pursuant to Treas.
Reg. SS1.103-13, 1.103-14 and 1.103-15, and the undersigned
officer of the Authority is charged (by resolution of the
Board of Commissioners of the Authority) with the responsi-
bility of issuing the Bonds.
Dated: May _, 1985 Housing and Redevelopment
Authority in and for the City
of Fridley, Minnesota
- 23 -
EzAECTORATE
} OF ee
PUBLIC WORKS -1, - -
r
CITYOF MEMORANDUM �---
F R1 Dire _
��♦� 5/1/85 PW 85-118
r _0Io12lora,TPublic Works Direct !O •:t100 �w p
BOAC? # Nasim Qureshi, City Manager
University/Mississippi Intersection • 1
Completion _
At the joint meeting of the City Council and HRA, Monday, April 29, 1985,
the submittals received for the University and Mississippi Intersection
Competition were presented. It was a concensus of both groups to
identify the the Fourmes Transition Concept as the best submittal,
followed by the Light Columns and Cable Suspension.
The awardees are as follows:
First Place - $ 1,500.00 Andrew Leicester and Steve Baker
Second Place - $ 500.00 Jerry Allan & Georgiana Allan
Third Place - $ 200.00 Saunders Schultz & William Severson -
Assisted by Jerry Allan
Recommend the HRA authorize these awards.
JGF:jmo
rjor D RECYORATE
N OF
qr4:
RKSWPUBLIC O --
•
F�� MEMORANDUM
DATE 5/3/85 PW 85-120
FP04 M John FloraLPublic Works Director TO A:�i0 10410
$uRACT Nasim Qureshi, City Manager
Center City Construction
` 4 --- --_
As our concept development continues for the improvement of University/Mississippi
intersection area, the following items are summarized for you:
1. While we have submitted a proposal to the County for the improvement
of Mississippi Street at University providing for a right turn, left
turn and two through lanes on the east side of the intersection and
a right turn/left turn and through lanes on the west side of the
intersection, we have not received any formal direction from the HRA
to initiate this work.
2. A summary of expenditures for the intersection has not been finalized.
The following is provided:
a. Southeast Corner
1). Total costs identified are $228,200.00 which includes
$50,000.00 for the intersection monument, construction
• of a median island, curbing, and walkway lights.
b. Northwest Corner
The northwest corner, including Holly totals $357,757.50,
$127,000.00 of which is to, be assessed to the Holly Shopping
Center for landscaping, irrigation, walkway and parking lot
lights. Enclosed also is the extension of the median island
when the property to the southwest is eventually developed.
c. An additional $305,000.00 has been identified for the intersection
monuments and the $250,000.00 worth of improvements the Holly
Shopping Center is completing.
d. Southwest Corner
Southwest corner improvements total $173,000.00. This includes
complimentary landscaping, curbing, traffic signals and
underground relocation of the NSP power line.
e. Total improvements cost $1,064,000.00 with $382,000.00 identified
as Holly costs, $87,800.00 City costs and $78,200.00 Target
costs, leaving $514,300.00 an HRA requirement.
This information is provided as the best guesstimate of the work to be accomplished
and the costs identified at this time.
JGF:jmo
SA
CENTER CITY / HOLLY CENTER IMPROVEMENTS (MARK) DATE: APRIL 22, 1985
CONSTRUCTION ITEM PROJECT YEAR IMPROVEMENT COST HRA HOLLY CENTER CITY TARGET
SE CORNER
UNIV. AVE. E. SERVICE DRIVE ST. 1985-1 '85 43,100.00 43,100.00
INTERSECTION MONUMENTS HRA '85 50,000.00 50,000.00
MISSISSIPPI ST. EAST ISLAND COUNTY '86 '86 14,500.00 7,250.00 7,250.00
MISSISSIPPI BLVD. (UNIV. - 5th) MISC. '85 '85 29,100.00 29,100.00
MISSISSIPPI ST. CURBING (EAST SIDE) COUNTY '86 '86 6,000.00 6,000.00
IALKWAY LIGHTS (C.O. Required) MONETTE '85 10,500.00 10,500.00
4SP UNDERGROUND NSP '84 75,000.00 73,320.00
SE CORNER TOTAL 228,200.00 67,750.00 0.00 80,570.00 78,200.00
NW CORNER
ADUISITION OF PHILLIPS STATION HRA '85 90,000.00 90,000.00
RIGHT OF WAY AGUISITION (MISS.) HRA '85 38,697.50 38,697.50
REMOVAL OF PHILLIPS STATION DEMO '85 '85 4,560.00 4,560.00
PAVING SE CORNER OF LOT (+ CURBING) ST. 1985-1 '85 61,000.00 61,000.00
PAVING MAIN DRIVEWAY ST. 1985-1 '85 5,200.00 5,200.00
:ANDSCAPIN6 - HOLLY ENTRANCE - A ST. 1985-1 '85 3,100.00 3,100.00
- HOLLY ENTRANCE - B ST. 1985-1 '85 9,300.00 9,300.00
- HOLLY FRONT - C ST. 1985-1 '85 10,600.00 10,600.00
- ISLAND D ST. 1985-1 '85 900.00 900.00
- UNIV. BLVD. - E ST. 1985-1 '85 12,700.00 12,700.00
-MISSISSIPPI BLVD. - F ST. 1985-1 '85 20,600.00 20,600.00
-MISSISSIPPI BLVD. - 6 ST. 1985-1 '85 21,100.00 21,100.00
LANDSCAPE IRRIGATION '85 15,000.00 15,000.00
MISSISSIPPI ST. WEST ISLAND COUNTY '86 '86 9,500.00 4,750.00 4,750.00
MISSISSIPPI ST. WEST ISLAND (EXT.) 5,000.00 2,500.00 2,500.00
(ALKWAY LIGHTS '85 8,500.00 8,500.00
PARKING LOT LIGHTS HOLLY '85 42,000.00 42,000.00
SUBTOTAL $357,757.50 $223,507.50 $127,000.00 $7,250.00 $0.00
INTERSECTION MONUMENTS HRA '85 50,000.00 50,000.00
PURCHASE PARCEL B HOLLY '85 22,500.00 22,500.00
GOOF REPAIR & FACADE IMPROVEMENT HOLLY '85 200,000.00 200,000.00
PYLON SIGN HOLLY '85 24,400.00 24,400.00
MISCELLANEOUS COSTS HOLLY '85 8,100.00 8,100.00
SUBTOTAL $305,000.00 $50,000.00 $255,000.00 $0.00 $0.00
(W CORNER TOTAL $662,757.50 $273,507.50 $382,000.00 $7,250.00 $0.00
SW CORNER
.ANDSCAPIN6 - MISSISSIPPI BLVD. - H 70,000.00 70,000.00
JNDERSROUND NSP (TH 47 - 2nd ST) NSP '86 85,000.00 85,000.00
MISSISSIPPI ST. CURBING (SOUTH SIDE) '86 6,000.00 6,000.00
MISSISSIPPI ST. CURBING (FUTURE) 6,000.00 6,000.00
STATE TRAFFIC SIGNALS '86 6,000.00 6,000.00
SW CORNER TOTAL $173,000.00 $173,000.00 $0.00 $0.00
NE CORNER
•
4E CORNER TOTAL 0.00 0.00 0.00 0.00 ' 0.00
TOTAL $1,063,957.50 $514,257.50 $382,000.00 $87,620.00 $78,200.00
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4
CITY OF FRIDLEY
EN6INEERIN6 DEPARTMENT
6431 UNIVERSITY AVENUE N.E.
FRIDLEY, MINNESOTA 55432
TO: Housing and Redevelopment Authority RE: Est. No. 2 (Final )
City of Fridley FOR: Renollett Trucking
6431 University Avenue N.E. 927 Andover Blvd.
Fridley, Minnesota 55432 Anoka, Mn. 55304
DATE: April 2, 1985
DEMOLITION OF STRUCTURE - MISSISSIPPI STREET AND UNIVERSITY AVE
CONTRACT ESTIMATED UNIT UNIT QUANTITY QUANTITY AMOUNT
ITEM QUANTITY PRICE THIS EST. TO DATE TO DATE
Demolition of Structure 1 $4,560.00 L.S. 0. 10 1.00 $4,560.00
•
4A
ESTIMATE SUMMARY:
Original Contract Amount
$4,560.00
Contract Additions - Change Order No. ____
- Change Order No.
Contract Deductions- Change Order No. ____
- Change Order No. ____
Revised Contract Amount $4,560.00
Value Completed To Date $4,560.00
Amount Retained (0)
$0.00 -
Amount Paid To Date $4,104.00
AMOUNT DUE THIS ESTIMATE $456.00
CERTIFICATE OF THE CONTRACTOR
I hereby certify that the work performed and the materials supplied to date under
terms of the contract for the referenced project, and all authorized changes thereto,
have an actual value under the contract of the amounts shown on this estimate (and
the final quantities of the final estimate are correct) , and that this estimate is
just and correct and no part of the 'AMOUNT DUE THIS .ESTIMATE' has been recieved.
By -et12-f Date--- c f' PIES
Contractor s Authorized Representative (Title)
CERTIFICATE OF THE ENGINEER
I hereby certify that I have prepared or examined this estimate, and that the
contractor is entitled to payment of this estimate under the contract for referenced
project.
CITY OF FRIDLEY;? , SPECTOR ,p �-
By -- 6i'i ---- -- -- - Date J ---- ) - 0--;
Checked:
By Respectfully Submitted
dile/6. Flora, P.E.
lirector of Public Works
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY
MEETING
MARCH 14, 1985-
CALL TO ORDER:
Chairperson Commers called the March 14, 1985, Housing & Redevelopment Authority
meeting to order at 7:04 p.m.
ROLL CALL:
Members Present: Larry Coroners, Elmars Prieditis, Carolyn Svendsen,
Walter Rasmussen
Members Absent: Duane Prairie
Others Present: Nasim Qureshi, HRA Director
Sid Inman, City Finance Director
Dave Newman, City Attorney
Kent Richey, O'Connor & Hannan
Dick Graves, Miller & Schroeder
APPROVAL OF FEBRUARY 14, 1985, HOUSING &REDEVELOPMENT AUTHORITY MINUTES:
MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE THE FEB. 14, 1985,
HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN.
UPON A VOICE VOTE, ALL VOTING A5'E, .CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
1 . CONSIDERATION OF RESOLUTION NO. HRA 5-1985 AUTHORIZING THE DEVELOPMENT
F P NS R IMPROVEMENT AND CHANNELI'ATIOPi OF THE TRUNK HIGHWAY 65 AND
1JEST 11OORE LAKE DRIVE/CENTRAL'AVENUE INTERSECTION:
Mr. Qureshi stated that since the proposal for the 100 Twin Drive-in
proeprty about a year ago, there was some concern that this intersection
at West Moore Lake Drive/Highway 65/Old Central was already congested at
certain times; and if there was going to be some substantial development
on this property, what additional impact would this have on the intersec-
tion? At that time, the City Council authorized an initial preliminary
study of the intersection and what improvements could possibly be made to
alleviate potential future traffic problems. That study was completed,
presented to the City Council , the City Council held a public hearing noti-
fying the neighborhood for input, and met with the two major property owners,
the owner of the 100 Twin Drive-in and Mr. Jerry Johnson,for their input.
After the public hearing and meetings, the City Council decided on a plan
that the City should be working with Anoka County and the State Highway Dept.
to facilitate further development of the plans and the intersection.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 14, 1985 PAGE 2
Mr. Qureshi stated what was being brought to the HRA was essentially the
development plan the City Council has approved in this area in a concep-
tual way. After the HRA's approval , the City will go into more detailed
plans which would require them to work out plans regarding what kind of
right of way was needed, what kind of additional monies are going to be
needed to include the intersection, and how the contribution between,
Anoka County, the State, the HRA, and the City should be divided un.
Mr. Qureshi stated that at this time, he was requesting that the HRA
authorize the approval of the plans in concept and authorize the City to
enter into an agreement with the consultant to draw up the detailed plans.
Mr. Commers asked how much money had already been spent on the study.
Mr. Qureshi stated the study authorized by the City was $7,000, so the
City has already paid $7,000. The proposal before the HRA was for the HRA
to pay up to $30,760 for preparing the plans.
Mr. Coroners asked if there was any reason why the HRA could not negotiate
this cost with the City.
Mr. Qureshi stated there was no reason why the HRA could not, but the City
has already contributed a certain amount. Now the total impact of the
development is creating this potential traffic situation; and, as the HRA
knew, this was one of the reasons why the HRA created these districts. They
have not used any money up to now from the increments in this area. If
the HRA is going to continue to collect increments, they have to start spend-
ing money. That might be some justification for the need for this kind of
activity; and, if there is a need, the HRA should start spending money so
they can justify activity that retains their increment capability.
MOTION BY MS. SVENDSEN, SECONDED BY MR. RASMUSSEN, TO APPROVE RESOLUTION
NO. HRA 5-1985, "RESOLUTION AUTHORIZING THE DEVELOPMENT OF PLANS FOR THE
IMPROVEMENT AND CHANNELIZATION OF THE TRUNK HIGHWAY 65 AND WEST MOORE LAKE
DRIVE/CENTRAL AVENUE INTERSECTION".
Ms. Svendsen stated she would like to again request that the HRA receive
the minutes of the City Council when the City Council has a public hearing
or discusses an issue that the HRA will be dealing with in the future.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
2. CONSIDERATION OF RESOLUTION NO. HRA 6-1985. PROVIDING PRELIMINARY APPROVAL
OF THE ISSUANCE OF TAX INCREMENT.,REVENUE..REFUNDING BONDS OF 1984 OF THE
HOUSING AND REDEVELOPMENT AUTHORITY F'THE CITY OF FRIDLEY; AUTHORIZING
1 g . 11 1 1 I1 / , :1o1 .1 • e. , . r 1 •
Mr. Commers stated that, in addition to the information in the agenda, the
HRA members had received at the meeting a memo from Sid Inman to Mr. Qureshi
dated March 13, 1985, which apparently related to some correspondence ,and
discussions with Bob Ehlers relative to the appropriateness of the proposal .
HOUSING& REDEVELOPMENT AUTHORITY MEETING, MARCH 14, 1985 PAGE 3
Mr. Inman stated he would continue to recommend that the HRA pass the
Resolution because (1 ) It can be stopped within the next few days by the
City Councilpr Housing and Redevelopment Authority; and (2) He still
thought it was the appropriate methodology for the Housing and Redevelopment
Authority.
Mr. Inman stated the information was reviewed partially by Mr. Newman and
himself last evening. Mr. Richey of O'Connor & Hannan and Mr. Graves of
Miller & Schroeder had worked on it that day. As stated in his cover memo,
of three different proposals he has received, there was still a question of
the legality of the method in which Mr. Ehlers is asking the City to evaluate.
He had not had much opportunity to review the third or major proposal he
had received from Mr. Ehlers only that afternoon, but he did know there were
some definite mathematical errors in the proposal .
Mr. Graves stated there was certainly nothing that couldn't be stonped if
the HRA passed the resolution.
Mr. Richey stated he could only address the legal issue as he understood it;
he could not address the numbers or errors in the numbers. The legal issue
that was raised by Mr. Bob Ehlers was whether or not the tax increments
from Center City are locked up in the fund to pay off the bonds. It was
their position that they would not be willing to agree that you can take
those tax increments other than keeping them for existing bonds, which was
perceived by the City to be a waste of increments. That opinion was con-
curred by Dick Ehlers, who is the son of Bob Ehlers, and was associated with
Ehlers.& Associates. Dick Ehlers has left the firm and now Bob Ehlers has
taken over the HRA's account. Bob Ehlers has now reviewed the matter and
has come to a contrary conclusion from his son, Dick Ehlers. Bob Ehlers
views the issue as follows: The bond resolution says that tax increments,
including excess increments, shall be deposited in sinking fund which pays
the bonds. Bob Ehlers somehow believes that that language doesn't say
"tax Increment", meaning all increments, but only excess increments, and
that if it is excess increments, you can spend them all on something else
before they become excess.
Mr. Richey stated he found it difficult to follow Mr. Bob Ehlers' argument,
but he did disagree with Mr. Ehlers' conclusion. He stated that was the
legal issue being raised by Mr. Ehlers' memo which he had seen about an
hour before this meeting.
Mr. Richey stated the effect of Resolution No. HRA 6-1985 was to preliminarily
authorize the refunding bonds, authorize staff to work with the bond counsel
and underwriter to go forward, and to request the City to authorize staff
as well . That did not mean the bonds are sold. The bonds cannot be issued
without a final resolution from the HRA. At any time up until that point,
legally the HRA can prevent the bonds from being sold. If the HRA went
that far, however, and made no conditions on the resolution, there could be
an awkward situation for the HRA in that the underwriter could offer the bonds
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 14, 1985 PAGE 4
to the market as indication of interest so that everybody thought the
bonds were going to be issued, but when they came back for final
resolution, the HRA said they were not going to issue the bonds. However,
what the HRA could do was put a condition on the resolution that the bonds
cannot even be offered without the consent of the HRA.
Mr. Newman stated he also had some real problems with what Mr. Ehlers was
trying to do. He stated that proceeding with the resolution would not
hurt the HRA.
MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO AMEND RESOLUTION
NO. HRA 6-1985 TO ADD THE STATEMENT THAT THERE WILL BE NO OFFER OF BONDS
UNTIL FURTHER APPROVAL BY THE HOUSING & REDEVELOPMENT AUTHORITY.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE RESOLUTION
NO. HRA 6-1985 AS AMENDED.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
The HRA agreed to instruct Staff that once Staff has the information from
Miller & Schroeder and O'Connor & Hannan that they give Mr. Ehlers three
working days to respond. Once the response is received from Mr. Ehlers,
the HRA will call a special meeting. If Mr. Ehlers does not respond, the
HRA will still move forward.
3. CONSIDERATION OF RESOLUTION NO. HRA 7-1985 AUTHORIZING THE IMPROVEMENT OF
5TH STREET BETWEEN 61ST AND 63RD AVENUE:
Mr. Commers stated he did not understand one statement in Mr. Flora's memo
to Mr. Qureshi dated March 7, 1985: "Total cost of this improvement is
estimated at $145,300.00 and $27,500.00 is to be assessed to the adjoining
property owners."
Mr. Qureshi stated they feel the investment originally made by the property
owners, if properly protected, can be saved. The proposal is not to tear
up the existing street but to build on the existing road, widen it, and
provide concrete curbing. They feel this improvement will be beneficial
to the total area of the redevelopment.
Ms. Svendsen asked how much money would be assessed per property owner.
Mr. Qureshi stated the cost per property owner was approximately $750.
Ms. Svendsen stated she questioned whether it was necessary to assess the
property owners at all.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 14, 1985 PAGE 5
Mr. Qureshi stated they way they justify the assessment was that the
property owners were getting a high level of improvement. The Citv's
standard is now to provide asphalt paving and concrete curbing. This street
was improved before that standard was adopted so they would be bringing
this street up to that standard. They were merely charging the homeowner
the difference of the cost for the curbing alone. He stated the City
Council has already approved this assessment. Public hearings were held,
and the property owners had accepted this as a reasonable assessment.
Mr. Commers stated he was not sure there should be an assessment to the
property owners either.
Mr. Prieditis stated he did not quite understand where the need was for
this street improvement.
Mr. Qureshi stated the existing road is in a shape that if they do some
cosmetics and surfacing, they can save the existing base and matte. The
homeowners made an investment in their properties and the road. There is
a high level of use and activity on this road. It was prudent to save that
investment and build on it than to go back later and have to rebuild the
whole road.
Mr. Commers stated that 5th Street was a state aid road. Were there any
state aid funds available to help with this cost?
Mr. Qureshi stated they could certainly apply for state aid funds.
Mr. Commers stated he had a little bit of a problem in that all of a sudden
this comes up, and there has been no input, no decisions, no information
given to the HRA as to the priorities of the HRA's funds, where they should
be spent, how necessary this was, what the homeowners think, and now the
City is asking the HRA to fund it.
Mr. Qureshi stated they have talked all along about the improvement on
Mississippi St. and 5th St. and better traffic flow. They had a traffic
study done. They have gone through public input to make sure the public
was reasonable acceptable to bearing some cost. He did not think there was
any question as to whether the improvement should be done. If the question
was whether the HRA should pay or the City pay, that was negotiable.
Mr. Commers stated he was not saying this was not a good thing, and they
shouldn't do it; but he was just a little concerned about the manner in
which this has come up. He stated they discussed Mississippi St. and 5th
St. in front of the Center City development, and the HRA stands ready to
do what they have to there, but they have never discussed anything
about 5th St. farther down a couple of blocks. Now all of a sudden, the
HRA is being asked to pay the bill.
Ms. Svendsen stated she really had some trouble assessing the property
owners for this street improvement. A lot of people are not too appre-
ciative of the plaza and now they are being told their street is part of
the whole area and they have to pay $27,500.
HOUSING& REDEVELOPMENT AUTHORITY MEETING, MARCH 14, 1985 PAGE 6
Mr. Rasmussen stated maybe they could get some other kind of help to pay
the $27,500, rather than having the taxpayers pay that assessment. He
felt they should take the burden off the taxpayers.
Mr. Qureshi stated he did not have a problem with having State Aid pick
up that share of the cost.
MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE RESOLUTION
NO. HRA 7-1985 WITH THE AMENDMENT THAT THE HRA WILL PAY $145,300 OF THE
5TH STREET IMPROVEMENT COST, CONTINGENT UPON THE PLAN THAT STATE AID PAY
$27,500 SO THERE WILL BE NO ASSESSMENT TO THE PROPERTY OWNERS.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
4. APPROVAL OF AUDITOR FOR YEAR ENDING DECEMBER 31 , 1984:
It was the concensus of the HRA to approve the auditor, George M. Hansen
Co. , P.A. , for the year ending December 31 , 1984.
5. ESTIMATE - RENOLLET TRUCKING FOR THE DEMOLITION OF STRUCTURE AT
MISSISSIPPI ST. AND UNIVERSITY AVE.:
MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE THE PAYMENT
TO RENOLLET TRUCKING IN THE AMOUNT OF $4,104 FOR THE DEMOLITION OF
STRUCTURE AT MISSISSIPPI ST. AND UNIVERSITY AVE.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
6. CHECK REGISTER:
MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE THE CHECK
REGISTER DATED MARCH 8, 1985, AS PRESENTED.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
ADJOURNMENT:
MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENDSEN, TO ADJOURN THE MEETING.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MAR. 14, 1985,
HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 9:00 P.M.
Respectfully submitted,
n ' 4/L
Ly a Saba
Recording Secretary