HomeMy Public PortalAbout1998-047115
Member Johnson introduced the following resolution and moved its adoption
CITY OF MEDINA
RESOLUTION 98-47
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $3,120,000
INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS, SERIES 1998
(TEMROC METALS, INC. PROJECT) TO REFINANCE A PROJECT
BE IT RESOLVED by the City Council of the City of Medina (the "Issuer"), as follows:
1. The City Council has received a proposal from Temroc Metals, Inc., a Minnesota
corporation (the "Company"), that the Issuer refund the outstanding principal balance of its
$3,500,00 Industrial Development Refunding Revenue Bonds (Temroc Metals, Inc. Project)
Series 1992 which were issued October 1, 1992 (the "1992 Bonds") which were issued to
refinance a certain Project as herein described, pursuant to Minnesota Statutes, Sections 469.152
through 469.165 (the "Act"), through issuance by the Issuer of its $3,120,000 Industrial
Development Revenue Refunding Bonds, Series 1998 (Temroc Metals, Inc. Project) (the
"Bonds"). The Issuer held a public hearing with respect to the Project on March 3, 1987 and the
Minnesota Department of Energy and Economic Development gave approval to the Project in
1987.
2. It is proposed that, pursuant to a Loan Agreement dated as of August 1, 1998,
between the Issuer and the Company (the "Loan Agreement"), the Issuer loan the proceeds of the
Bonds to the Company by redeeming and refunding the outstanding principal balance of the
1992 Bonds which were issued to refund certain of the Issuer's tax-exempt industrial
development revenue bonds issued in 1987 to finance the acquisition, construction and equipping
of an approximately 143,000 gross square foot aluminum extrusion manufacturing facility
located at 4375 Willow Drive in the City of Medina (the "Project"). The basic payments to be
made by the Company under the Loan Agreement are fixed so as to produce revenue sufficient to
pay the principal of, premium, if any, and interest on the Bonds when due. It is further proposed
that the Issuer assign its rights to the basic payments and certain other rights under the Loan
Agreement to U.S. Bank Trust National Association in St. Paul, Minnesota (the "Trustee"), as
security for payment of the Bonds under an Indenture of Trust dated as of August 1, 1998 (the
"Indenture"). Payment of the Bonds will be secured by a Mortgage, Security Agreement and
Fixture Financing Statement from the Company to the Issuer (the "Mortgage") which Mortgage
will be assigned to the Trustee pursuant to an Assignment of Mortgage dated as of August 1,
1998 (the "Mortgage Assignment"). The Bonds will be purchased by Piper Jaffray Inc. (the
"Purchaser") pursuant to an Official Statement (the "Official Statement") and in accordance with
a Bond Purchase Agreement among the Issuer, the Company and the Purchaser (the "Purchase
Agreement").
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3. Forms of the following documents (the "Bond Documents") have been submitted
to the City Council for approval:
(a) The Loan Agreement,
(b) The Indenture,
(c) The Purchase Agreement,
(d) The Mortgage,
(e) The Mortgage Assignment,
(0 The Preliminary Official Statement used by the Purchaser to market the
Bonds
4. It is hereby found, determined and declared that:
(a) it is desirable that the Bonds be issued by the Issuer upon the terms set
forth in the Indenture;
(b) the basic payments under the Loan Agreement are fixed to produce
revenue sufficient to provide for the prompt payment of principal of, premium, if any,
and interest on the Bonds issued under the Indenture when due, and the Loan Agreement,
Mortgage and Indenture also provide that the Company is required to pay all expenses of
the operation and maintenance of the Project, including, but without limitation, adequate
insurance thereon and insurance against all liability for injury to persons or property
arising from the operation thereof, and all taxes and special assessments levied upon or
with respect to the Project Premises and payable during the term of the Loan Agreement
and Indenture; and
(c) under the provisions of Minnesota Statutes, Section 469.155, and as
provided in the Loan Agreement and Indenture, the Bonds are not to be payable from or
charged upon any funds other than the revenue pledged to the payment thereof; the Issuer
is not subject to any liability thereon; no holder of any Bonds shall ever have the right to
compel any exercise by the Issuer of its taxing powers to pay any of the Bonds or the
interest or premium thereon, or to enforce payment thereof against any property of the
Issuer except the interests of the Issuer in the Loan Agreement which have been assigned
to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or
encumbrance, legal or equitable upon any property of the Issuer except the interests of the
Issuer in the Loan Agreement which have been assigned to the Trustee under the
Indenture; the Bonds shall recite that the Bonds, including interest thereon, are payable
solely from the revenues pledged to the payment thereof; and, the Bonds shall not
constitute a debt of the Issuer within the meaning of any constitutional or statutory
limitation.
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5. The forms of the Bond Documents and exhibits thereto shall be subject to the
review and approval of the City Attorney and are otherwise approved substantially in the form
submitted. The Loan Agreement, Indenture, Mortgage Assignment and Purchase Agreement are
directed to be executed in the name and on behalf of the Issuer by the Mayor and the Clerk -
Treasurer. Any other documents and certificates necessary to the transaction described above
shall be executed and delivered by the appropriate officers of the Issuer. Copies of all of the
documents necessary to the transaction herein described shall be delivered, filed and recorded as
provided herein and in the Loan Agreement, Indenture and Purchase Agreement.
6. The Issuer has not prepared nor made any independent investigation of the
information contained in the Preliminary or final Official Statement used by the Purchaser to sell
the Bonds and the Issuer takes no responsibility for any information contained in the Preliminary
or final Official Statement.
7. The Issuer shall proceed forthwith to issue its Bonds, in the form and upon the
terms set forth in the Indenture. The offer of the Purchaser to purchase the Bonds at par plus
accrued interest to the date of delivery at the interest rate or rates specified in the Indenture (not
exceeding 8% per annum) as of the date of issuance of the Bonds, is hereby accepted. The
Mayor and the Clerk -Treasurer are authorized and directed to confirm the interest rate or rates
and prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the
Trustee for authentication and delivery to the Purchaser.
8. The Mayor and the Clerk -Treasurer and other officers of the Issuer are authorized
and directed to prepare and furnish to the Purchaser certified copies of all proceedings and
records of the Issuer relating to the Bonds, and such other affidavits and certificates as may be
required to show the facts relating to the legality 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 Issuer as to the truth of all statements contained therein.
9. The approval hereby given to the various documents referred to above includes
approval of such additional details therein as may be necessary and appropriate and such
modifications thereof, deletions therefrom and additions thereto as may be necessary and
appropriate and approved by the City Attorney and the Issuer officials authorized herein to
execute said documents prior to their execution; and said Issuer officials are hereby authorized to
approve said changes on behalf of the Issuer. The execution of any instrument by the appropriate
officer or officers of the Issuer 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 the Clerk -
Treasurer, any of the documents authorized by this resolution to be executed may be executed by
an acting or duly designated official.
Dated: August 18,1998
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Paul Robinson, Clerk -Treasurer
The motion for the adoption of the foregoing resolution was duly seconded by member Thies upon
vote being taken thereon, the following voted in favor thereof: Ferris, Hamilton, Johnson, Thies,
and Zietlow and the following voted against same:
Whereupon said resolution was declared duly passed and adopted.
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