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HomeMy Public PortalAbout1988-097Extract of Minutes of Meeting of the City Council of the City of Medina, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Medina, Minnesota was duly held at City Hall in said City of Medina, on the 20th day of December, 1988, at 8:00 o'clock P.M. The following Council members were present; and the following were absent: * * * Council member Mitchell then introduced the following written resolution and moved the adoption thereof: A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS PURSUANT TO MINNESOTA STATUTES, SECTIONS 469.152 TO 469.165, TO PROVIDE FUNDS FOR INDUSTRIAL DEVELOPMENT PROJECT ON BEHALF OF HIGHWAY 18 & 55 PROPERTIES The motion for the adoption of the foregoing resolution was duly seconded by Council member Schmit and upon vote being taken thereon the following voted in favor thereof: Schmit, Mitchell, Theis, Scherer and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. absent: Anderson 2318f RESOLUTION NO. A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS PURSUANT TO MINNESOTA STATUTES, SECTIONS 469.152 to 469.165, TO PROVIDE FUNDS FOR INDUSTRIAL DEVELOPMENT PROJECT ON BEHALF OF HIGHWAY 18 & 55 PROPERTIES BE IT RESOLVED by the City Council of the City of Medina, Minnesota (the "City"), as follows: 1. Authority. The City is, by the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.152 to 469.165, as amended (the "Act"), authorized to issue and sell its revenue bonds for the purpose of financing the cost of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. Authorization of Project: Documents Presented. The Borrower described below has proposed to this Council that the City issue and sell its $2,450,000 City of Medina Industrial Development Revenue Bonds (Highway 18 & 55 Properties Project), Series 1988, in substantially the form set forth in the hereinafter -mentioned Indenture of Trust (the "Bonds") pursuant to the Act and loan the proceeds thereof to Highway 18 & 55 Properties, a limited partnership organized and existing under the laws of Minnesota (the "Borrower"), to finance the costs of acquiring, constructing and equipping a manufacturing facility in the City, to be located in the southwest quadrant of the intersection of Highway 55 and Willow Drive in the City, together with necessary site improvements (the "Project"), to be owned by the Borrower and leased by the Borrower to DeVac, Inc., a Minnesota corporation (the "Lessee"). Forms of the following documents relating to the Bonds and the Project have been submitted to the City Council and are now on file in the office of the City Clerk -Treasurer: (a) Loan Agreement (the "Loan Agreement") dated as of December 1, 1988, between the City and the Borrower, whereby the City agrees to make a loan to the Borrower of the gross proceeds of sale of the Bonds and the Borrower agrees to complete the Project and to pay amounts in repayment of the loan sufficient to provide for the full and prompt payment of the principal of, premium, if any, and interest on the Bonds; and (b) Indenture of Trust (the "Indenture") dated as of December 1, 1988, between the City and First Trust National Association, as Trustee, pledging revenues, including those to be derived from the Loan Agreement, as security for the Bonds, and setting forth proposed recitals, covenants and agreements relating thereto; and (c) Letter of Credit (the "Letter of Credit") to be issued by First Bank National Association (the "Bank") to the Trustee, supporting payment of the principal of and interest on the Bonds (this document not to be executed by the City); and (d) Reimbursement Agreement (the "Reimbursement Agreement") dated as of December 1, 1988, between the Borrower and the Bank, pursuant to which the Borrower agrees to reimburse the Bank for amounts drawn under the Letter of Credit and makes certain covenants (this document not to be executed by the City); and (e) Private Placement Agreement (the "Placement Agreement"), between FBS Capital Markets Group (the "Placement Agent"), the Borrower and the City, providing for the placement of the Bonds by the Placement Agent and setting the terms and conditions thereof; and (f) Remarketing Agreement (the "Remarketing Agreement") dated as of December 1, 1988, between the Borrower and the Placement Agent, as Remarketing Agent, providing for the remarketing of the Bonds from time to time, as provided for in the Indenture, as further provided therein (this document not to be executed by the City); and (g) Private Placement Memorandum (the "Private Placement Memorandum"), describing the private placement of the Bonds, and certain terms and provisions of the foregoing documents. 3. Findings. It is hereby found, determined and declared that: (a) The Project, based upon information furnished by the Borrower, constitutes a project authorized by and described in Section 469.153, Subdivision 2a, of the Act. (b) The Project furthers the purposes set forth in the Act in that the purpose of the Project is and the effect thereof will be to promote the public welfare by the active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental action for the purpose of preventing the emergence of blighted and marginal lands and areas of chronic unemployment; by increasing employment opportunities in the City; and by the more intensive development of land available in the area to provide a more adequate tax base to finance the costs of governmental services in the Municipality, county and school district where the Project is located. (c) The Project has been approved by the Department of Trade and Economic Development of the State of Minnesota as tending to further the purposes and policies of the Act. (d) There is no litigation pending or, to the best of its knowledge, threatened against the City relating to the Project or to the Bonds, the Loan Agreement, the Private Placement Agreement or the Indenture or questioning the organization, powers or authority of the City. (e) The execution, delivery and performance of the City's obligations under the Bonds, the Indenture, the Private Placement Agreement and the Loan Agreement do not and will not violate any charter provision or any order of any court or other agency of government of which the City is aware or in which the City is a party, or any indenture, agreement or other instrument to which the City is a party or by which it or -any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. (f) It is desirable that the Bonds be issued by the City upon the terms set forth in the Indenture, under the provisions of which the City's interest in the Loan Agreement will be pledged to the Trustee as security for the payment of principal of, premium, if any, and interest on the Bonds. (g) The Loan Agreement provides for payments by the Borrower to the Trustee for the account of the City of such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. The Loan Agreement obligates the Borrower to provide for the payment of operation and maintenance expenses, including adequate insurance, taxes and special assessments. No reserve fund has been deemed necessary to be established in connection with the issuance of the Bonds. (h) Under the provisions of the Act, and as provided in the Loan Agreement and Indenture, the Bonds are not to be payable from nor charged upon any funds other than amounts payable pursuant to the Loan Agreement and moneys in the funds and accounts held by the Trustee which are 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 the 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; and each Bond issued under the Indenture shall recite that the Bond, including interest thereon, shall not constitute or give rise to a charge against the general credit or taxing powers of the City. 4. Approval and Execution of Documents. The forms of Loan Agreement, Indenture, Letter of Credit, Reimbursement Agreement, Private Placement Agreement, and Remarketing Agreement, referred to in paragraph 2, are approved. The Loan Agreement and Trust Indenture shall be executed in the name and on behalf of the City by the Mayor or Acting Mayor and the City Clerk -Treasurer, or other officers of the City, in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof, and then sall be delivered to the Trustee. The Private Placement Agreement shall be executed by one or more officers of the City in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officer or officers executing the same, which approval shall be conclusively evidenced by the execution thereof. The forms of Remarketing Agreement, Letter of Credit and Reimbursement Agreement now on file may be modified after the date hereof as determined to be necessary or desirable by the Bank, the Borrower, the Placement Agent or Bond Counsel. 5. Approval, Execution and Delivery of Bonds. The City shall proceed forthwith to issue the Bonds, to be dated the date of initial delivery thereof, in the aggregate principal amount of $2,450,000 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 Placement Agent has agreed pursuant to the provisions of the Private Placement Agreement to privately place the Bonds at the purchase price set forth in the Private Placement Agreement, and said purchase price is hereby found to be favorable and is hereby accepted. The Mayor, Acting Mayor and City Clerk -Treasurer are authorized and directed to prepare and -4- execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee, together with a certified copy of this Resolution and the other documents required by the Indenture, for authentication, registration and delivery to the Placement Agent. As provided in the Indenture, each Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 6. Private Placement Memorandum. The City hereby consents to the use by the Placement Agent of the Private Placement Memorandum in privately placing the Bonds; provided, however, that the City has not participated in the preparation of the Private Placement Memorandum or independently verified the information in the Private Placement Memorandum and takes no responsibility for, and makes no representations or warranties as to, the accuracy or completeness of such information. 7. $10 Million Election. The City hereby elects that the $10 million election with respect to the Bonds and certain capital expenditures for the Project, as provided under Section 144(a) of the Internal Revenue Code of 1986, as amended, shall apply to the Bonds and the Project. 8. Certificates, etc. The Mayor, Acting Mayor, City Clerk -Treasurer, and other officers of the City are authorized and directed to prepare and furnish to bond counsel and the Placement Agent, 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 appearing 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 represesntations of the City as to the truth of all statements contained therein. 9. Authorization. The City Clerk -Treasurer is authorized and directed to deliver a certified copy of this Bond Resolution to the County Auditor, together with such other information as such County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Bonds on his bond register as required by the Act and Section 475.63, Minnesota Statutes.