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HomeMy WebLinkAboutResolution - 2022-12 - Relating to Financing of Fire Fighting Equipment; Authorizing the Execution and Delivery of a Lease-Purchase Agreement and Related Documents - 01/04/2022CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA RESOLUTION NO. 2022-12 RESOLUTION RELATING TO THE FINANCING OF FIREFIGHTING EQUIPMENT; AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE-PURCHASE AGREEMENT AND RELATED DOCUMENTS BE IT RESOLVED by the City Council (the "Council") of the City of Eden Prairie, Minnesota (the "City" or the "Lessee"), as follows: Section 1. Authority; Purpose. The City is authorized by Minnesota Statutes, Section 465. 71 to enter into lease-purchase agreements for the purpose of financing real and personal property. The City has heretofore determined to acquire certain firefighting equipment (the "Equipment"). Section 2. Documentation. In order to finance the costs of the Equipment, there has been prepared and presented to this Council a copy of a Master Tax-Exempt Lease/Purchase Agreement (the "Lease"), dated January 12, 2022, with U.S. Bancorp Government Leasing and Finance, Inc., in Portland, Oregon (the "Lessor"), together with such other documents as the Lessor and Dorsey & Whitney, LLP, as bond counsel to the City ("Bond Counsel"), require for financing the Equipment, including an Escrow Agreement dated January 12, 2022, by and among the Lessor, the Lessee, and U.S. Bank National Association, as escrow agent ("Escrow Agent") (such Escrow Agreement together with the Lease, the "Documents"). The City's payment obligations under the Lease total $408,067.65 and shall be payable in five equal installments of $81,613.53 commencing on January 12, 2023 and on each January 12 thereafter ending on January 12, 2027 (the "Lease Payments"). This Council hereby finds, determines and declares that it is necessary and desirable and in the best interests of the City to enter into the Lease with the Lessor to finance the Equipment. Section 3. Execution. The Mayor and City Manager, or other designated signatories acting on their behalf, are hereby authorized to execute and deliver the Documents on behalf of the City. The Mayor and City Manager are hereby further authorized to execute, on behalf of the City, such other contracts, certifications, documents or instruments as Bond Counsel shall require, and all certifications, recitals, warranties and representations therein and in the Documents shall constitute the certifications, recitals, warranties and representations of the City. Execution of any contract, certification, document or instrument by one or more appropriate officers of the City will constitute and be deemed conclusive evidence of the approval and authorization by the City and the Council of the contract, certification, document or instrument so executed. Without limiting the generality of the foregoing, in the absence or other unavailability of the Mayor, any document authorized in this resolution to be executed by the Mayor may be executed by the acting Mayor or a person designated by the Mayor and, in the absence or other unavailability of the City Manager, 4862-8904-2951 \4 any document authorized in this resolution to be executed by the City Manager may be executed by the acting City Manager or a person designated by the City Manager. Section 4. Payment of Rental Payments; No General Obligation; Capital Expenditure Levy. Subject to the provisions of the Lease, the City shall pay promptly when due, all of the Lease Payments and any other amounts required by the Lease. The Lease and the obligations of the City thereunder will be special, limited obligations of the City payable in each fiscal year solely from funds of the City legally appropriated for such purpose in the annual budget of the City; provided, however, that the City shall not be obligated to make any such appropriation. The full faith and credit and ability of the City to levy ad valorem taxes without limitation as to rate or amount are not pledged to the payment of the Lease or any obligation of the City thereunder. Section 5. Tax Covenants and Arbitrage Matters. (a) Covenant. The City covenants and agrees with the Lessor that it will not take, or permit to be taken by any of its officers, employees or agents, any action which would cause the interest component of the Lease Payments payable under the Lease to become subject to taxation under the Internal Revenue Code of 1986 (the "Code") and any regulations issued thereunder (the "Regulations"), in effect at the time of such action, and that it will take, or it will cause its officers, employees or agents to take, all affirmative actions within their powers which may be necessary to ensure that the interest component of the Lease Payments payable under the Lease will not become subject to taxation under the Code and the Regulations, as presently existing or as hereafter amended and made applicable to the Lease. So long as the Lease is outstanding, the City will not enter into any lease, use agreement or other contract or agreement respecting the Equipment which would cause the Lease to be considered a "private activity bond" or "private loan bond" pursuant to the provisions of Section 141 of the Code. (b) Tax Certificate. The Mayor and City Manager, or their respective authorized designees, being the officers of the City charged with the responsibility for issuing the Lease pursuant to this resolution, are authorized and, if counsel deems the representations in the Documents to be insufficient, hereby directed to execute and deliver a certificate (the "Tax Certificate") in accordance with the provisions of Section 148 of the Code, and Section l .148-2(b) of the Regulations, stating, among other things, the facts, estimates and circumstances in existence on the date of issue and delivery of the Lease which make it reasonable to expect that the proceeds of the Lease will not be used in a manner that would cause the Lease to be an arbitrage bond within the meaning of the Code and the Regulations. ( c) Arbitrage Rebate. The City acknowledges that the Lease is subject to the rebate requirements of Section 148(£) of the Code. The City covenants and agrees to retain such records, make such determinations, file such reports and documents and pay such amounts at such times as are required under Section 148(£) and applicable Regulations to preserve the exclusion of interest on the Lease from gross income for federal income tax purposes, unless the Lease qualifies for an exception from the rebate requirement pursuant to one of the exceptions set forth in the Code and the Regulations. 4862-8904-2951 \4 2 (d) Not Qualified Tax-Exempt Obligation. The Lease is not designated as a "qualified tax-exempt obligation" for purposes of Section 265(b )(3) of the Code. ( e) Reimbursement. The City certifies that the proceeds of the Lease will not be used by the City to reimburse itself for any expenditure with respect to the Equipment which the City paid or will have paid more than 60 days prior to the issuance of the date hereof unless, with respect to such prior expenditures, the City has made a declaration of official intent which complies with the provisions of Section 1.150-2 of the Regulations; provided, however, that this certification shall not apply (i) with respect to certain de minimis expenditures, if any, with respect to the Equipment meeting the requirements of Section 1.150-2(£)(1) of the Regulations, or (ii) with respect to "preliminary expenditures" for the Equipment as defined in Section 1.150-2(£)(2) of the Regulations, including engineering or architectural expenses and similar preparatory expenses, which in the aggregate do not exceed 20% of the "issue price" of the Lease. ADOPTED by the City Council of the City of Eden Prairie this 4111 day of January, 2022. Ronald A. Case, Mayor ATTEST: ~~ Nicole Tingle~ 4862-8904-2951 \4 3