RES 1977-28 - 00007093RESOLUTION NO. 28 -1977 49
RESOLUTION AUTHORIZING THE SALE AND ISSUANCE OF INDUSTRIAL DEVELOPMENT
REVENUE BONDS UNDER THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT
TO FINANCE A PROJECT THEREUNDER, SECURED BY PAYMENTS TO BE RECEIVED
PURSUANT TO A LEASE AND A MORTGAGE OF THE PROJECT AND A PLEDGE AND
ASSIGNMENT OF THE CITY'S INTEREST IN THE LEASE AND PAYMENTS THEREUNDER
TO A TRUSTEE, AND DESIGNATING THE CITY REPRESENTATIVE FOR THE PROJECT
BE IT RESOLVED by the City Council of the City of Fridley, Minnesota, as
follows:
1. It has been proposed that the City issue its Industrial Development
Revenue Bonds (Safetran Systems Corporation Project) (the "Bonds "), in the principal
amount of $1,500,000, and use the proceeds to acquire certain land, and to construct
and equip one or more buildings and other improvements thereon and acquisition and
installation of items of equipment (the "Project ") to be used as an addition to
Safetran Systems Corporation's existing manufacturing plant which is used to
manufacture and distribute electro - mcchanical products, primarily for use by the
railroad industry, the Project to be leased to Safetran Systems Corporation, a
Minnesota corporation (the "Corporation "). The Council gave preliminary approval
to the proposal by resolution duly adopted December 6, 1976, and that approval is
hereby confirmed and ratified, and pursuant to that resolution, the following
documents relating to the Project have been submitted to the Council and are now,
or shall be placed, on file in the office of the City Clerk.
(a) Lease, dated as of February 1, 1977, proposed to be made and entered
into between the City and the Corporation;
(b) Mortgage and Indenture of Trust (hereinafter, the "Indenture "), dated
as of February 1, 1977, proposed to be made and entered into between the
City and the First National Bank of Minneapolis, as trustee (the "Trustee ");
(c) Bond Purchase Agreement, dated March 21, 1977, between and among the
City, the Corporation, Northwestern National Life Insurance Company and
North Atlantic Life Insurance Company of America; and
' (d) Guaranty Agreement, dated as of February 1, 1977, from the Company
to the Trustee.
2. It is hereby found, determined and declared that:
(a) the real property, improvements and personal property described in
the Lease and Indenture constitute a Project authorized by the Municipal
Industrial Development Act;
(b) the purpose of the Project is and the effect thereof will be to promote
the public welfare by the attraction, encouragement, retention and development
of economically sound industry and commerce so as to prevent, so far as
possible, the emergence of blighted and marginal lands and areas of chronic
unemployment; the development and retention of industry to use the available
resources of the community in order to retain the benefit of its existing
investment in educational and public service facilities, by halting the
movement of talented, educated personnel of mature age to other areas and
thus preserving the economic and human resources needed as a base for
providing governmental services and facilities;
(c) the Project is to be located within the City limits, at a site which
is easily accessible to employees residing within the City and the surrounding
community, and to means of transportation of materials and products by rail
and highway;
(d) the Project has been approved by the Commissioner of Economic Development
of the State of Minnesota as tending to further the purposes and policies
of the Industrial Development Act;
(e) the financing of the Project, the issuance and sale of the Bonds, the
execution and delivery of the Lease and the Indenture, and the performance
of all covenants and agreements of the City contained in the Lease and
Indenture and of all other acts and things required under the Constitution
and laws of the State of Minnesota to make the Lease, Indenture and Bonds
valid and binding obligations of the City in accordance with their terms, are
authorized by the Municipal Industrial Development Act;
(f) it is desirable that a series of Industrial Development Revenue Bonds
in the amount of $1,500,000 be issued by the City upon the terms set forth
in the Indenture, under the provisions of which the City's interest in the
Project, the Lease and the payments thereunder will be mortgaged and pledged
to the Trustee as security for the payment of principal and interest on the Bonds;
50 RESOLUTION NO. 28 -1977 (Con't.)
(g) the rental payments contained in the Lease are fixed, and required to
be revised from time to time as necessary, so as to produce income and
revenue sufficient to provide for prompt payment of principal of and interest
on all Bonds issued under the Indenture when due, and the Lease also provides
that the Corporation is required to pay all expenses of the operation and
maintenance of the Project including, but without limitation, adequate
insurance thereon and all taxes and special assessments levied upon or
with respect to the Project site and payable during the terms of the Lease; and
(h) under the provisions of Minnesota Statutes, Section 474.10, and as
provided in the Lease and Indenture, the Bonds are not to be payable from
nor charged upon any funds of the City other than the revenue pledged
to the payment thereof; the City is not subject to any liability thereon,
no holders of the Bonds shall ever have the right to compel any exercise
of the taxing power of the City to pay any of the Bonds or the interest
thereon, nor to enforce payment thereof against any property of the City;
the Bonds shall not constitute a charge, lien or encumbrance, legal or
equitable, upon any property of the City; each Bond issued under the Indenture
shall recite that the Bond, including interest thereon, is payable solely
from the revenue pledged to the payment thereof; and no Bond shall
constitute a debt of the City within the meaing of any constitutional
or statutory limitation.
3. The forms of Lease, Indenture, Guaranty and Bond Purchase Agreement
referred to in paragraph 1 are approved. The Lease, with such variations, insertions
and additions as the City Attorney may hereafter deem appropriate, is directed to
be executed in the name and on behalf of the City by the Mayor and City Manager,
upon execution thereof by the officers of the Corporation. The Indenture, with
such variations, insertions and additions as the City Attorney may hereafter deem
appropriate, is directed to be executed in the name and on behalf of the City by
the Mayor and City Manager and delivered to the Trustee. Copies of all of the
documents shall be delivered, filed and recorded as provided therein. The terms
and conditions of the Bond Purchase Agreement are found to be reasonable and
advantageous to the City, and the Mayor is authorized and directed to execute the
same in the name and on behalf of the City.
4. In anticipation of the collection of payments under the Lease, the City
shall proceed forthwith to issue its Industrial Development Revenue Bonds (Safetran
Systems Corporation Project), dated as of February 1, 1977, in the principal amount
of $1,500,000, in the form and upon the terms set forth in the Indenture, which
terms are for this purpose incorporated in this resolution and made a part hereof.
The proposal of Northwestern National Life Insurance Company and North Atlantic
Life Insurance Company of America, to purchase such Bonds at a price of par plus
accrued interest, upon the terms and conditions set forth in the Bond Purchase
Agreement is hereby found and determined to be reasonable and is hereby accepted.
The Mayor and Manager are authorized and directed to prepare and execute the Bonds
as prescribed in the Indenture and to deliver them to the Trustee, together with a
certified copy of this resolution and other documents required by the Indenture,
for authentication and delivery to the purchaser.
5. The Mayor and City Manager and other officers of the City are authorized
and directed to prepare and furnish to the purchasers of the Bonds, when issued,
certified copies of all proceedings and records of the City relating to the Bonds,
and such other affidavits and certificates as may be required to show the facts
relating to the legality and marketability of the Bonds as such facts appear from
the books and records in the officers' custody and control or as otherwise known to
them; and all such certified copies, certificates and affidavits, including any
heretofore furnished, shall constitute representations of the City as to the truth
of all statements contained therein.
6. The approval hereby given to the various documents referred to above
includes an approval of such additional details therein as may be necessary and
appropriate and such modifications thereto, deletions therefrom and additions thereto
as may be necessary and appropriate and not to the prejudice of the interest of the
City, and approved by the City Attorney prior to the execution of the documents.
The execution of any instrument by the appropriate officer or officers of the City
herein authorized shall be conclusive evidence of the approval of such documents
in accordance with the terms hereof. In the absence of the Mayor or City Manager,
any of the documents authorized by this resolution to be executed, may be executed
by the acting Mayor or acting City Manager, respectively.
RESOLUTION NO. 28 -1977 (Con't.) 5
7. The City Manager is hereby designated as City Representative, and the
Mayor as alternate City Representative, for all purposes of the Lease and Indenture,
with full authority to do, in behalf of the City, all those things required or
authorized in the Lease and Indenture by action or upon certification of the City
Representative.
8. The Mayor and City Manager are authorized and directed to execute
and file with the Internal Revenue Service a statement of the City's election to
issue industrial development bonds in an amount in excess of $1,000,000 but not
more than $5,000,000, in such form as may be approved by the City Attorney, in
order to satisfy the Bonds as an "exempt small issue" under Section 103(b) (6)
(D) of the United States Internal Revenue Code of 1954, as amended, and Treasury
'Regulations 1.103 -10(b) (2) (i).
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 21ST DAY
OF MARCH, 1977.
MAYOR - WILLIAM J. NEE
ATTEST:
CITY CLERK - MARVIN C. BRUNSELL