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HomeMy WebLinkAboutResolution - 78-42 - Authorizing, Selling and Establishing the Terms and Making Provision for Payment of $6,150,000 General Obligation Water and Sewer Refunding Bonds - Member Bye introduced the following resolu- tion and moved its adoption: RESOLUTION NO. 78-42 RESOLUTION AUTHORIZING, SELLING AND ESTABLISHING THE TERMS AND MAKING PROVISION FOR PAYMENT OF $"6 ,150,000 GENERAL OBLIGATION WATER AND SEWER REFUNDING BONDS BE IT RESOLVED by the City Council of the City of Eden Prairie, " Minnesota, as follows: Section 1. Authorization -and Sale 1.01. This Council by resolution adopted on February 21, 1978, authorized the issuance and sale of $6 ,150,000 General Obli- gation Water and Sewer Refunding Bonds (the Bonds) of the City to be dated March' l, 1978, to refund in advance of their maturity all outstanding bonds of the issues of Water and Sewer Bonds of the City dated November 1, 1971, April 1, 1975, and December 1, 1975 (the Refunded Bonds) , for the purpose of reducing the interest cost to the City on the outstanding Refunded Bonds. 1.02. Notice of sale of the Bonds has been duly published and the Council has publicly received, opened and considered all • sealed bids presented in conformity with the notice, and has accepted the bid of Continental Illinois National Bank & Trust Company, Chicago,Ill. and associates, to purchase the Bonds upon the terms and conditions set forth in this resolution. It is hereby determined that by accep- tance of said bid, and the refunding of the Refunded Bonds in accor- dance with the procedures set forth in Minnesota Statutes, 475. 67 , the interest cost to the City can be substantially reduced from a net effective rate of 6.419% for the outstanding Refunded Bonds to 5. 32 % for the -Bonds now to be sold and issued. Section 2 . Form of Bonds and Coupons 2. 01. The Bonds "shall be printed in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA • COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE GENERAL OBLIGATION WATER AND SEWER REFUNDING BOND No. $5,000 . KNOW ALL MEN BY THESE PRESENTS, that the City of Eden Prairie, a duly organized and existing municipal corporation of Hennepin County, Minnesota, hereby acknowledges itself to be indebted and for value received promises to pay to bearer upon presentation and surrender hereof the sum of FIVE -THOUSAND DOLLARS on the 1st- day of January, 19 , or if this Bond is redeemable as stated below, on an earlier date on which it shall have been duly called for redemption, and to pay interest thereon from the date hereof until said principal sum is paid or until this Bond, if .redeemable, has been duly called for redmeption, at the rate of percent ( %) per annum, payable semiannually on each January 1 and July 1, commencing January 1, • 1979 , in accordance with and upon presentation and surrender of the interest coupons appurtenant hereto. Both principal and inter- est are payable at the main office of the Northwestern National Rank, in Minneapolis -, Minnesota or its successor, in any - coin or currency of the United States of America which on the respec- tive dates of payment is legal tender for public and private debts. For the prompt and full payment of such principal and interest as the same become due, the full faith, credit and. taxing powers of the City are hereby irrevocably pledged. This Bond is one of an issue in the aggregate principal amount of $6,150,000 , all of like date and tenor except as to serial number, interest rate, redemption privilege and maturity date, issued for the purpose of refunding in advance of their maturity all outstanding bonds of the issues of Water and Sewer Bonds dated November 1, 1971, April 1, 1975, and December 1, 1975 (the Refunded Bonds) of the City, pursuant to and in full conformity with the constitution and laws of the State of Minnesota and an authorizing resolution of the City Council adopted on March 14 , 1978. The Bonds of this issue are each subject to redemption and prepayment at the option of the City on January 1, 1990, and any- interest payment date thereafter, in inverse order of their serial numbers, at a price equal to the principal amount thereof plus accrued interest, and upon notice published in a financial periodical published in a Minnesota city of the first class or its metropolitan area, and mailed to the bank at which principal and interest are then payable, not less than thirty days before the redemption date. IT IS HEREBY CERTIFIED AND RECITED that all acts, `condi- tions and things required by the Constitution and laws of the State of Minnesota to be done, to happen, to exist and to be performed ,precedent to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City according to tis terms, have been done, have happened do exist and have been per- formed in regular and due form, time and manner as so required; that each and all of the Refunded Bonds mature or have been duly called for redemption and prepayment on or prior to December 1, 1985, and the City has appropriated the proceeds of the Bonds of this issue, together with such other legally available funds of the City as may be required, and has invested such moneys in securities issued by the United States or certain agencies thereof, in such amount, maturing on such dates, and bearing interest at such rates as are required to provide funds sufficient to pay all principal and inter- est and redemption premiums due on the Refunded Bonds on or before December 1, 1985, and has irrevocably placed such funds and securities in escrow for this purpose; that in the authorizing resolution the City has made and entered into covenants with the holders of the Refunded Bonds and the Bonds of this issue which will be fully and • promptly performed by the City and all of its officers and employees, including' a covenant that the City will establish and maintain charges, fees and rentals for all service and commodities of what- soever nature furnished and made available by the municipal water and sewer utility to all persons, in accordance with schedules such that the gross revenues therefrom will at all times be sufficient to meet all payments of current costs of operation,. administration and maintenance of the municipal water and sewer utility, to main- tain a reasonable working capital and reserves for recurring expenses, and, from the net revenues in excess of these requirements, to meet all payments or principal and interest due on the Bonds of this issue; that, prior to the issuance hereof, a direct, annual irrepealable, ad valorem tax has been levied on all of the taxable property in the City in amounts and for the years sufficient to pay the interest hereon when it falls due and also to pay and discharge the principal of this Bond at maturity, and additional taxes, if needed for such purpose will be levied upon all such property, without limitation as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or - statutory limitation. IN WITNESS WHEREOF, the City of Eden Prairie, Hennepin - County, Minnesota, by its City Council has caused this Bond and the interest coupons appurtenant hereto and the certificate on the reverse r J side hereof to be executed and authenticated by the signatures of the Mayor, City Manager and Finance Director/Clerk, and sealed • with its corporate seal, all such signatures and the corporate seal being authentic printed, engraved or lithographed facsimiles except for the manual signature of one of said officers on the face of this Bond, and has dated this Bond as of March 1, 1978. May 4CiManager Attest: nanckZirector Clerk (SEAL) • 2.02. A copy of the text of the legal opinion of bond counsel shall be printed on the reverse side of each Bond and identified by a certificate in the following form: - We certify that the above is a full, true and correct copy of the legal opinion rendered by bond counsel on the issue of Bonds of the City of Eden Prairie which includes the within Bond, dated as of the date of delivery of and payment for the Bonds. (Facsimile signature) (Facsimile signature) (Facsimile signature) Finance Director/Clerk City Manager Mayor 2.03. Interest on each Bond to maturity shall be represented by a consecutively numbered set of interest coupons printed in sub- stantially the following form: No. $ Unless this Bond- is subject to and is .called for earlier redemption., on the 1st day of January (July) , 19 , the City of Eden Prairie, Hennepin County, Minnesota, will pay to bearer, at the Northwestern National Bank , in Mi.nneapoli4; Minnesota, the amount shown hereon in" lawful money of the United States of America for interest then due on its General Obligation Water and Sewer Refunding Bond, dated March 1, 1978, No. • (Facsimile signature) (Facsimile signature) (Facsimile signature) Finance Director/Clerk City Manager Mayor Section 3. Bond Terms, Execution and Delivery 3. 01. The Bonds shall be titled General Obligation Water- and Sewer Refunding Bonds, dated March 1, 1978, shall be issued in the denomination of $5,000 each, numbered serially from 1 to 1,230, inclusive, shall mature serially on March 1 in the respective years and amounts stated below, and shall bear interest from date of issue until paid or duly called for redemption at the respective annual rates stated opposite such maturity years and amounts: Year Amount Rate Year Amount Rate 1992 $350 ,000 5..20% 1998 $650,000 5.25% 1993 400 ,000 5.20% 1999 650,000 5.25% 1994 450,000 5. 25% 2000 650,000 5.25% 1995 500,000 5.25% . 2001 650,000 5.25% 1996 550,000 5.25% 2002 300,000 5.25% 1997 600,000 5.25% 3. 02. Interest on the Bonds shall be payable semiannually on • January 1 and July 1 in each year, commencing January 1, 1979. The principal of and interest on the Bonds shall be payable at the Northwestern National Bank of Minneapolis , in Minneapolis, Minnesota, which is designated as paying agent, -or- in the event of its resigna- tion, removal or incapability of acting as paying agent, at the office of such successor paying agent as may be appointed by the Council, and the City agrees to pay the reasonable and customary charges of the paying agent for this service. 3. 03. The Bonds shall be each subject to redemption "and pre- payment at the option of the City in inverse order of their serial numbers on January l,' 1990 and any interest payment date thereafter, at a price equal to the principal amount thereof plus accrued interest, upon notice published in a financial -periodical published in a Minne- sota city of the first class or its metropolitan area and mailed to the bank at which principal and interest are then payable not less than thirty days before the redemption date. 3. 04. The Bonds and the interest coupons and the certificate on the reverse side of each Bond shall be executed and authenticated in behalf of the City by the signatures of the Mayor, the City Manager and the Finance Director/Clerk, and sealed with the corporate seal of the City. All such signatures and the corporate seal shall be printed, engraved or lithographed facsimiles except for the manual signature of one of these officers on the face of each Bond. The • Bonds shall then be delivered by the Finance Director/Clerk to the purchasers on receipt of the cash purchase price stated in Section 1. 02. The purchasers shall not be required to see to the application of the proceeds ' of the Bonds. Section 4 . Use of Bond Proceeds and Accrued Interest The proceeds of the Bonds, including accrued interest, are irrevocably appropriated, together with such additional sum as may be required from funds now on hand, for the payment and redemption of the outstanding Refunded Bonds at their respective maturities or at the earlier date hereinafter specified for the redemption thereof, and for the -payment of interest and redemption premiums to become due on the Refunded Bonds on or before the respective dates on which they are to be paid and redeemed. The Finance Director/Clerk is hereby authorized and directed, simultane- ously with the delivery of the Bonds, to deposit the proceeds thereof, including accrued interest, and any additional sum which may be required, in escrow with the Northwestern National Bank of Minneapolis , in Minneapolis -1 Minnesota , a. banking institution whose deposits are insured by the Federal Deposit Insurance Corporation and whose combined capital and surplus is not less than $500,000 , and shall invest the funds so deposited in securities authorized for such purpose by Section 475. 67 , sub- division 8 , as amended, maturing on such dates and bearing interest at such rates as will provide moneys sufficient to pay the interest . to accrue on the Refunded Bonds being refunded to their respective maturity dates or the date hereinafter designated for their earlier redemption and prepayment, and to pay the principal amount of each of the Refunded Bonds at maturity or at the date hereinafter desig- nated for the redemption and prepayment thereof, and the redemption premiums due on the Refunded Bonds being called for redemption and prepayment in advance of their maturity. The Mayor and City Manager are hereby authorized to enter into an escrow agreement with said Bank establishing the terms and conditions for the escrow account in accordance with. Minnesota Statutes, Section 475.67. Section 5. Water and Sewer System General Obligation Revenue Bond Fund; Pledge of Water and Sewer Net Revenues; and Tax Levies 5. 01. The Refunded Bonds, including interest thereon, will be payable primarily from the escrow account established as of the day of delivery of the Bonds, and the cash and securities to be deposited therein are irrevocably pledged to that purpose; there- fore, so long as the escrow account is maintained as provided in the escrow agreement, the taxes originally levied for payment of all of the Refunded Bonds and interest thereon,. pursuant to resolu= tions of this Council adopted September 28,1971, April 9, 1975 . and November 4, 1975 will not be required for said purpose. The Finance Director/Clerk is hereby directed to • annually, on or before October 10 of each year, commencing in 1978, request the cancellation by the County Auditor of all taxes hereto- fore levied for such years for payment of the Refunded Bonds and not needed as a result of the establishment of the escrow account. 5. 02. The Bonds shall be payable from the Water and Sewer System General Obligation Revenue Bond Fund of the City heretofore created which shall be maintained by the Finance Director/Clerk separate and apart from all other funds of the City so long as any of the Bonds are outstanding and unpaid. If any payment- of prin- cipal or interest on the Bonds shall become due when there is not sufficient money in the Water and Sewer System General Obligation Revenue Bond Fund to make such payment the Finance Director/Clerk shall advance the amount required from the general fund of the City and the general fund shall be reimbursed for such advances out of the proceeds of the taxes levied to make good such deficiency. Into the Water and Sewer System General Obligation Revenue Bond Fund shall be credited the receipts of all the net revenues of the muni- cipal water and sewer utility and all collections of special assess- ments levied on account of the improvements financed by the Refunded Bonds, all collections of ad valorem taxes levied herein, and all other moneys received for or appropriated to the payment of the Bonds and interest thereon. 5. 03. The City hereby covenants and agrees with the holders from time to time of the Bonds that so long as any of the Bonds • are outstanding, the City will establish and maintain charges, fees and rentals for all services and commodities of whatsoever nature furnished and made available by the municipal water and sewer utility including any improvement thereof or addition thereto, to all persons, in accordance with schedules such that the gross revenues therefrom will at all times be sufficient to meet all payments of current costs of operation, administration and maintenance of the municipal water • and sewer utility, to maintain a reasonable working capital and reserves for recurring expenses, and, from the net revenues in excess of these requirements; to meet all payments of principal and interest due on the Bonds (to the extent that such principal and interest -is not paid from special assessments levied on account of the improve- ments financed by the Refunded Bonds) , and said net revenues are hereby pledged and appropriated to the payment of the Bonds and _ interest thereon. . 5. 04. For the prompt and full payment of the principal of and interest on the Bonds as the same respectively become due, the full faith, credit and taxing powers of. the City shall be and are hereby irrevocably pledged. To provide moneys for the payment thereof, in the event and to the extent that the net revenues and special assess- ments hereinabove pledged to the payment of the Bonds are insufficient for that purpose in any year, there is hereby levied upon all of the taxable property in the City a direct, general, ad valorem tax which shall be spread upon the tax rolls and collected in the years and in the amounts as follows, together with and as a part of other general taxes of the City: (Funds on hand of $268, 755.40 will be used to pay interest due January 1, 1979) Collection Collection Year Tax Year Tax 1979 $354,800 1991 $739, 800 • 1980 354, 800 1992 774,800 1981 354,800 1993 806,900 1982 354, 800 1994 835, 900 1983 354, 800 1995 862,000 1984 354, 800 1996 885,300 1985 354, 800 1997 905, 600 1986 354, 800 1998 868,100 1987 354, 800 1999 830,500 1988 354, 800 2000 793,000 1989 354, 800 2001 810,500 1990 354, 800 Said tax shall be irrepealable as long as any of the Bonds are out- standing and unpaid; provided that in accordance with the provisions of Section 475. 61, Minnesota Statutes, the Finance Director/Clerk shall annually, on or before October 10 of each year as long as any of the Bonds are outstanding, report to the Council the amount on hand in the Water and Sewer System General Obligation Revenue Bond Fund, and the Council may thereupon reduce the tax hereinabove _levied for that year by an amount equal to the amount then on hand in the Water and Sewer System General Obligation Revenue Bond Fund allocated to the payment of the Bonds, and shall direct the Finance Director/ Clerk to certify such reduction to the Hennepin County Director of Finance and Records, so that only the balance of the tax levied for that year will be collected. . 5. 05. Nothing in this resolution shall prevent the City from pledging and appropriating net revenues of the municipal water utility for the payment and security of obligations other than the bonds herein authorized, issued in accordance with law for proper corporation purposes, as a charge on said net revenues prior to or on a parity • with the payment of principal and interest due from time to time on the Bonds issued hereunder, provided that charges for the service of said water and sewer utility are at all times established and, when necessary, revised, and that the net revenues derived there- from are handled and accounted for, in accordance with the provisions of this resolution. Section 6. Redemption of Refunded Bonds The Finance Director/Clerk is hereby authorized and directed forthwith to call for redemption and prepayment on February 1, 1982, those bonds of the issue dated November 1, 1971, which have stated maturities in the years 1983 through 1990 , on April 1, 1985, those bonds of the issue dated April 1, 1975, which have stated maturities in the years 1986 through 1994, and on December 1, 1985, those bonds of the issue dated December 1, 1975, which have stated maturity dates in the years 1986 through 1991. Notice of the redemption of the Refunded Bonds shall be mailed and published in accordance with the terms of the resolutions authorizing their issuance. Section 7. Defeasance .7 .01. When the Bonds and all coupons appertaining thereto have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of such Bonds shall cease. 7 . 02 . The City may discharge its obligations with respect to the Bonds and the coupons appurtenant thereto which are due on any date by depositing with the paying agent or agents for such Bonds on or before .that date a sum sufficient for the-payment' thereof' in full; or if any Bond or coupons shall not be paid when due, it may nevertheless be discharged by depositing with the paying agent a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 7 .03. The City may also discharge its obligations with respect to any prepayable Bond which is called for redemption on any date in accordance with its terms, by depositing with the paying agent on or before that date an amount equal to the principal interest and redemption premium, if any, which is then due thereon, provided that notice of such redemption has been duly given as provided in this resolution. 7 . 04, The City may also at any time dischrage this issue of Bond.s in its entirety, subject to the provisions- of law now or hereafter authorizing and regulating such action, by calling all prepayable Bonds for redemption on the next date when they may be prepaid in accordance with their terms, by giving the notice re- quired for such redemption, and by depositing irrevocably in escrow, • with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be. so deposited, bearing interest payable at such times and at such rates and matur- ing or redeemable at the option of the holder on such dates as shall Y be required to provide funds sufficient to pay all principal, interest and redemption premiums to become due on all Bonds of this issue on • and before the maturity dates of the Bonds or their earlier redemption date. Section 8. Registration of Bonds and Authentication of Transcript 8. 01. The City Finance Director/Clerk is authorized and directed to cause a copy of this resolution to be filed with the County Director of Finance and Records of Hennepin County, and to obtain from the County Director of Finance and Records a certificate stating that the tax required by law for the payment of the Bonds has been duly levied and that the Bonds have been duly entered upon his bond register. 8. 02. The City Finance Director/Clerk and other officers of the City and County are also authorized and directed to prepare and fur- nish to the purchaser of the Bonds and to the attorneys approving the legality thereof, certified copies of this resolution and of all other resolutions, proceedings and records of the City relating to the authorization and issuance of the Bonds, and all other proceedings and records reasonably required to show the validity or marketability of the Bonds; and all statements contained in such documents shall be deemed representations and recitals by the City of Eden Prairie. Section 9. Arbitrage; Certificate of Mayor and Finance Director/Clerk The Mayor, City Manager and Finance Director/Clerk being the officers of the City charged with the responsibility for issuing the obligations pursuant to this resolution, are authorized and directed to execute and deliver to the purchaser a certification in order to satisfy the provisions of Section 103 (c) of the Internal Revenue Code and the regulations adopted thereunder. Such certi- fication shall state that on the basis of the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds as therein set forth, it is not expected that the proceeds of the Bonds will be used in such a manner that would cause the Bonds to be arbitrage bonds, and the certification shall further state that to the best of the knowledge and belief of the certifying officers there are not other facts, estimates or circumstances that would materially change such expectation. f ayo Attest: in Director/Clerk •