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RES 1985-111 - 00005310lE.SOLUTICN NO. 111 - 1985 RESOLUTION AWARDING THE SALE OF $3,100,000 VARIABLE RATE DEMAND GENERAL OBLIGATION Il4PW&M1T BONDS, SERIES 1985; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AMID IELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESCLVEu by the City Council (the "Council ") of the City of Fridley, Minnesota (the "City "), as foilaws: A. The City has undertaren or will undertare the following public improvements (the "Improvements ") pursuant to and in full conformity with Minnesota Statutes, Cnapter 429: Construction Costs X2,100,000 Capitalized Interest 4/4,y36 Debr Service Reserve 4b5,u00 Discount 31,000 Costs or Issuance 23,250 Contingency 5,814 Total Bond Issue $3,100,000 B. The Council herery finds and determines that, for the purpose of financing the Improvements, it is necessary for the City to issue its $3,100,000 variable Rate Demand General Obligation Improvement Bonds, Series 1985 (the "Bonds ") , and, since (i) the Bonds shall, unless and until converted to fixee rate obligations pursuant to the terms of the Indenture (hereinafter derined), bear interest at a rate varying periodically, (ii) the City has a popu�ation or more than 101000, and (iii) the Bonds will at issuance be rateu A or better by Fitch Investor Service, Inc., a nationally reoognizea securities rating agency located in New York, New York, the City is authorized to negotiate the sale of the Bonds without public sale or competitive biad.rng pursuant to the provisions of Minnesota Statutes, Section 4'/5.b0, Subdivision 2 (5). C. In connection with the issuance or the Bonds, there have been presented to the City and placed on file in the City orfiLes copies of certain agreements, all dated as or December 11 1985, and including particularly a Trust Indenture (the "Indenture ") between the City and First Trust Company, Inc., St. Paul, Minnesota (the "Trustee ); a Reimbursement Agreement (the "Credit Agreement ) between the City and National Australia Bank Limited, New York Branch (the "Bank ") ; a Custody, Pleage and Security Agreement (the "Pledge Agreement ) between the City and the Bank; a Remarketing Agreement (the "Remarketing Agreement,-) between the City and Miller & Schroeder Financial, Inc., Minneapoiis, Minnesota, and the First National Bank of Saint Paul, St. Paul, Minnesota (collectively, the "Remarketing Agent ); a Tender Agent Agreement tthe "Tender Agent Agreement ") between the City, the Trustee, and J. Henry Schroeder Bank & Trust Company of New York, New York, New York (the "Tender Agent "); and an Investment Agreement (the "Investment Agreement ) between the City, the Trustee, and Manufacturers Hanover Trust Company, New York, New York (the "Investment Agent "). P u Page 2 - lesolution Nu. 111 - 1985 D. Pursuant to the Credit Agreenent, the Bank agrees to issue its letter of credit (the "Letter of Credit ") to secure certain payments which may be made on the Bonds (hereinafter defined) pursuant to the Indenture. Pursuant to the Credit Agreement and the Pledge Agreement, the City would agree to compensate the Bank for providing the Letter or Credit and for the making of any draws thereon. Prior to the Release Date, as defined in the Indenture, the proceeds or the Bonds, net or the costs or issuance thereof, would be invested by the Investment Agent pursuant to the Investment Agreement. Pursuant to the Tender Agent Agreement, the Tender Agent would agree to serve in sucn capacity pursuant to the applicable terms of the Indenture, and the Trustee, pursuant to the Indenture, would agree to act as Trustee thereunder. Under the Remarketing Agreement, the Remarketing Agent would agree to use its best efforts to remarket Bonds which had been tendered for purchase in accordance with their terms. E. Any capitalized but undefined term used in this Resolution shall have the same meaning given to sucn term in the Indenture. F. Tne mandatory sinking fund redemptions or the Bonds, as set f orth in Section s.U7 of the Indenture, are hereby combined with the maturities of ail the other outstanding general obligation debt or the City (including the Tax Increment Bonds authorized on this date to be issued) , and the Council hereby finds that such combined maturity schedule conforms to the reyuirenents or Minnesota Statutes, Section 475.54, Subdivision 1. 2. Authorization of Tssu= of Bonds. The City shall issue and sell the Bonds, which shall be dated, shall mature, shall be subject to optional redemption and mandatory sinking fund redemption, shall bear interest at sucn variable rates (or, following the Conversation Date, upon the prior election of the City, at the Fixed Interest Rate), and shall be subject to the additional terms and conditions provided in the Indenture and in the forms of variable rate and fixed rate Bonds attached as Exhibits A and B, respectively, to the Indenture. J. Acoertance of Offer to Purchase Bonds. The orfer or Miller & Scnroeder Financial, Inc., and the First National Bank of Saint Paul (the "Purcnaser ) to purchase the Bonds is hereby accepted, sucn bid being to purchase the Bonds at a price or $3,069,000 plus accrued interest, if any, to date or delivery, the Bonds to bear interest, to mature in the years and amounts, and to be subject to such other terms and conditions as provided in this Resolution and in the Indenture. 4. Form of Bonds. The Bonds shall be in substantially the form provided in Exhibit A or the Indenture, except that upon conversion to a Fixed interest Rate, the Bonds shall be in substantially the form provided in Exhibit B or the Indenture. 5. Bond Cnu_�Gel Obinon. The City Clerk shall obtain a copy of the proposea approving legal opinion or bond counsel, O'Connor & Hannan, of Minneapolis, Minnesota, wni.cn shall be complete except as to dating thereon, shall cause sucn opinion to be filed in the offices or the City, and shall cause said opinion to appear on each of the Bonds, together with a certificate to be signed by the facsimile signature of the City Clerk in substantially the foiluding form: Page 3 - Resolution No. 111 - 1985 I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion e )mcutea by the above -named attorneys, except as to the dating thereor, which opinion has been handed to me for filing in my office prior to the time or delivery of the Bonds. (facsimile signature) City CLerK City of Fridley, Minnesota 6. Execution and Delivery of Bonds. As proviced in the Indenture, the Bonds shall be executed on behalf or the City by the manual or facsimile signatures of the Mayor and the City Manager and shall be duly authenticated by the manual signature or an authorizea representative or the Trustee (or in the case of Tendered Bonds, or the Tender Agent) , as provided in the Indenture. The Bonds, when fully executes, snall be delivered to the Purchaser upon receipt or the purchase price, and the Purchaser shall not be obligated to see to the proper application thereor. A. Debt Service Account. There is hereby created on the official books and recoras or the City an account designated as $3,100,000 variable Rate Demand General Obligation improvement Bonds, Series 1985, Debt Service Account (the "Debt Service Account "), which shall be held in trust by the City for the benefit or the Owners from time to time of the Bonds, as hereinafter proviaea. Until the principal of, interest, and premium, if any (the "Debt Service ") , on all of the Bonds are paid, or until all of the Bonds are otherwise discharged as hereinafter provided, there shall be creuitea to and maintained in the Debt Service Account (1) first, those special assessments (the "Special Assessments ") levied or to be levied for the improvements, in amounts, but only in such amounts, which will be sufficient to play, when due, the Debt Service on the Bonds and, to the extent that the Letter or Credit is unavailable or the Bank has dishonored a drawing thereon for any reason, the Purchase Price of Bonds; and (2) second, the proceeds or any general ad valorem taxes hereafter levied by the City for the purpose of paying the Debt Service on the Bonds. The aforesaid funds in the Debt Service Account shall be used only and exclusively for, and are here.,y pledged to, the payment of the Bonds in accordance with their terms. Ir any sucn payment shall become due when there are not sufficient funds in the Debt Service Account or the Reserve Account to pay the same, the City Finance Director shall pay such amounts fran the general fund or other available fund of the City, and such fund shall (but only if at the time there are no deficiencies in the Debt Service Account or the Reserve Account) be reimbursed for such advances fran the proceeds or the Special Assessments or of any general ad valorem tayes hereafter levied for such purposes, when collected. B. Reserve Account. There is hereby created on the off icial books and records or the City an account designated as $3,100,000 variable Rate Demand General Obligation improvement Bonds, Series 1985, Debt Service Reserve Account (the "Reserve Account "), which shall be held in trust by the City for the benefit of the Owners fran time to time of the Bonds, as hereinafter providea. Fran the proceeds of the Bonds, on the Release Date there snail be credited to the Reserve Account the sum of x4651000 as hereinafter provided. The City covenants and agrees that it will maintain in the Reserve Account from time to time on and after the Release Date the lesser or (1) $465,u00 and (2) 15% of the Outstanding principal amount of the Bonds (the "Minimum Reserve Level "); further, the City pledges to use :?F1 Page 4 - Resolution No. 111 - 1985 any amount in excess or the Minimum Reserve Level, except earnings on said funds, either to effect a permitted optional prepayment of the Bonds or to pay the Debt Service thereon, at the City•s option. Moneys up to the Minimum Reserve Level in the Reserve Account snall be used exclusively for, and are hereby pledged to, the payment or the Bonds in accordance with their terms, when due. Ir, at any time, the funds maintained in the ' Debt Service Account are insurf icient to pay the Bonds in accordance with their terms, to the extent the Letter or Credit shall be unavailable to compensate for such deficiency or shall have been dishonored, the City shall pay to the Trustee from the Reserve Account for such purposes the amount or such deficiency. Ail earnings derived from the investment of funds held in the Reserve Account snail, when and as received and credited to the Reserve Account, be applied as follows: (i) for deposit into the Debt Service Account to the extent or (A) any current deficiency in said Account or (B) any anticipated deficiency in said Account coming due in the year following the date or receipt or such earnings; (ii) to the extent not applied as provided in (i) above, such earnings snail be retained in the Reserve Account to the extent that at the time such earnings are received, the balance in the Reserve Account is less than the Minimum Reserve Level; (iii) to the extent succi earnings are not needed for the purposes enumerated in (i) and (ii) above, the same snail be transferred to the Project Account; provided, however, that upon the occurrence and during the continuation or an Event of Default, as defined in the Credit Agreement, no earnings on the Reserve Account snail be transrerred to the Project Account pursuant to this paragraph 7 (13) (iii) . C. Project Account. Ail proceeds or the Bonds not deposited in the Reserve Account as hereinabove provided snail be maintained in a project account or accounts to be used to finance the making or the Improvements (the "Project Account ") , all in accordance with the applicable provisions of Minnesota Statutes, Chapter 429. D. Payments to Trustee. The City shall timely pay or cause to be tii paid to the Trustee all required payments to the Owners of the Bonds, out of drawings on the Letter of Credit in accordance with its terms, the Debt Service Account, the Reserve Account (if applicable) or from other available funds of the City. E. Junior _Pledge to Credit Agreement. When all Bonds have been discharged as provided in paragraph 16 of this Resolution and Article VII of the Indenture, all pledges made to the Owners of the Bonds in this Resolution with respect to the payment thereof shall to the same extent then secure the payment of all obligations of the City to the Bank arising pursuant to the Credit Agreement and such pledge shall continue until such obligations are discharged by the City in full. 8. Bonds are General Obligations. The full faith and credit and taxing powers of the City are hereby pledged to the payment of the Debt Service on the Bonds and in the event of any current or anticipated deficiency of funds pledged to such purposes pursuant to the Indenture and this Resolution and needed to make any such payment, when due, the City Council shall levy ad valorem taxes on all taxable property in the City in the amount of such def iciency. 2F3 Page 5 — Fesolution No. 111 — 1985 9. Execution of Documents Authorized. The Council hereby authorizes the Mayor and City Manager to execute and deliver on behalf of the City the Indenture, the Credit Agreement, the Pledge Agreement, the Remarketing Agreement, the Tender Agent Agreement, and the Investment Agreement, all substantially in the respective forms thereof as have been presented to the Council and placed on file in the offices of the City, with, however, such amendments, deletions, and insertions thereto as may be desirable and necessary, upon the recamendation and approval of Bond Counsel (as evidenced by Bond Counsel's issuance of a legal approving opinion on the Bonds) , and as evidenced by said City officials' execution of such agreements. 10. Credit Agreement A General Obligation. Pursuant to Minnesota Statutes, Section 475.54, Subdivision 5a, the City hereby pledges to the payment of the City's obligations which arise and may arise under the Credit Agreement the same security as the City has hereby pledged to the payment of the Bonds, provided, however, that with respect to such pledge, the Bank's interest in and right to such pledged assets shall be junior to the rights and interest therein of the Owners of the Bonds; but provided further, however, that to the payment of the City's obligations to the Bank under the Credit Agreement, the City hereby specifically pledges its full faith and credit, including its ad valorem taxing powers, and in the event that the funds otherwise pledged hereby to the payment of the City's obligations under the Credit Agreement are ever insufficient for such purposes, if necessary, the City hereby agrees to levy ad valorem taxes for such purposes and, prior to the receipt of such taxes, agrees to use any other available funds of the City to satisfy said obligations. To the extent that the City satisfies its obligations under the Credit Agreement from other funds of the City, the City shall reimburse said funds from the proceeds of any ad valorem taxes levied for such purposes, when collected. 11. Debt Service Coveraae. It is hereby determined that the Special Assessments will be in the principal amount of at least 208 of the cost of the Improvements, that the estimated collections of Special Assessments and the funds anticipated to be available in the Reserve Account will produce at least 58 in excess of the amount needed to meet, when due, the principal of (at maturity and upon mandatory sinking fund redemption thereof) and interest on (at the Maximum Interest Rate, being 118 per annum) the Bonds, and that no tax levy is needed at this time. The City Clerk is directed to file a certified copy of this Resolution with the County Auditor of Anoka County, and to obtain said official's certificate of filing the same, as required by Minnesota Statutes, Section 475.63. 12. City Proceedings and Records. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, the Bank and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and to furnish such other certificates, affidavits, and transcripts as may be required to show facts within their knowledge or as shown by the books and records in their custody and under their control relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, shall be deemed representations of the City as to the facts stated therein. 13. Certification of Official Statement. The Mayor, the City Manager, the City Finance Director, and/or the City Clerk are hereby authorized to certify that they have examined the official statement or prospectus prepared and ' circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief said official statement is a complete and accurate representation of the facts and representations made therein as Page b — Resolution No. 111 — 1985 they relate to the City. 14. General Tax Covenant. The City covenants and agrees with the Owners from time to time of the Bonds that the City will not take or permit to be taken by any of its officers, employees, or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1954, as amended, and regulations issued thereunder, as now existing or as hereafter amended or proposed and in effect at the time of such action. 15. Discharge., when any Bond has been discharged as provided in Article VII of the Indenture, all pledges, convenants, and other rights granted by this Resolution to the Owner(s) of such Bond shall cease, and such Bond shall no longer be deemed to be outstanding under this Resolution. 16. Covenants R=_spect" Special Assessments It is hereby determined that the improvements to be financed by the Bonds will directly and indirectly benefit the abutting or other property, and the City hereby covenants with the Owners f rpm time to time of the Bonds as follows: A. The City has duly ordered the making of the Improvements as contemplated in Minnesota Statutes, Section 429.031, will cause the assessments for the Improvements to be pranptly levied so that the first installment will be collectible not later than 1987, and will take all steps necessary to assure prompt collection. The City Council shall with due diligence take or cause to be taken all further actions which may be necessary for the making, constructing, and financing of the Improvements financed by the Bonds, for the final and valid levy of special assessments against property benefited by the improvements, and for the appropriation of any other funds needed to pay the Bonds and interest thereon when due. B. 'Ihe City will keep complete and accurate books and records relating to the Improvements showing all receipts and disbursements of grants, pledged finds, taxes, assessments, other funds appropriated for payment of the Bonds, and the balance of unpaid assessments. PASSED AND ADOPTED BY THE CITY ODUNCIL OF THE CITY OF FRMLEY THIS 1678 DAY OF DECEMBER, 1985 ATTEST: Ka .MAV M . • 1• , •