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HomeMy WebLinkAboutResolution - HRA 2002-01 - Lease Revenue Bonds 2002A City Hall and Community Center - 02/05/2002 CITY OF EDEN PRAIRIE HENNEPIN COUNTY,NIINNESOTA H.R.A.RESOLUTION NO.2002-01 RESOLUTION RELATING TO$8,030,000 LEASE REVENUE REFUNDING BONDS (CITY HALL AND COMMUNITY CENTER PROJECTS), SERIES 2002A; AUTHORIZING THE ISSUANCE, AWARDING THE SALE AND PRESCRIBING THE FORM THEREOF AND AUTHORIZING THE EXECUTION OF A TRUST INDENTURE,AN ESCROW AGREEMENT AND A LEASE-PURCHASE AGREEMENT WHEREAS,the Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota(the"Authority")is authorized by Minnesota Statutes, Sections 469 (the "Act"),to issue bonds to finance or refinance a redevelopment project and the principal and interest on the bonds may be payable exclusively from its income and revenues of the project financed or refinanced with the proceeds of the Bonds; and WHEREAS,the Act further authorized the Authority to make any of its land in a redevelopment project available for use by public agencies by sale, lease or otherwise; and WHEREAS,the Authority has undertaken a project(the"Community Center Project") consisting of the construction of improvements to a community center facility located on land in the City of Eden Prairie,Minnesota(the"City") as an authorized project under the Act, and has financed the cost thereof by the issuance of its revenue bonds denominated L-case Revenue Bonds(Community Center Project), Series 1992A(the Series 1992A Bonds), and has leased the Community Center Project to the City pursuant to and in accordance with a Lease- Purchase Agreement, dated as of August 1, 1992,between the Authority and the City; and WHEREAS,the Authority has undertaken a project(the"City Hall Project," together with the Community Center Project,the"Project") consisting of the acquisition of certain real property in the City and the acquisition and rehabilitation of an existing building located thereon, a portion of which was for use as a city hall and city offices(the"Governmental Space"), as an authorized project under the Act, and has financed the cost thereof by the issuance of its revenue bonds denominated Lease Revenue Bonds(City Hall Project), Series 1992B (the Series 1992B Bonds)and its Lease Revenue Bonds(City Hall Project), Series 1993A(the Series 1993A Bonds) and leased with an agreement to sell to the City pursuant to a Series B Lease Agreement, dated as of August 1, 1992, and amended by a First Amendment to Series B Lease Agreement, dated as of May 1, 1993,between the Authority and the City, and WHEREAS, it is proposed that the Authority issue its lease revenue refunding bonds pursuant to the Act,to be denominated Lease Revenue Refunding Bonds(City Hall and Community Center Projects), Series 2002A(the"Bonds") for the purpose of refunding in advance of maturity$1,735,000 of principal amount of the outstanding Series 1992A Bonds and $6,080,000 of principal amount of the outstanding Series 1992B Bonds, aggregating$7,815,000 • in principal amount(collectively,the"Refunded Bonds")in a"crossover refunding" as defined in Minnesota Statutes, Section 475.67, subd. 13, and to pay certain costs of the issuance of the Bonds and of the refunding of the Refunded Bonds; and • WHEREAS,the Bonds will be issued pursuant to a Trust Indenture, dated as of February 1,2002(the"Indenture7%between the Authority and U.S_Bank National Association, as trustee(the"Trustee"); and WHEREAS,the Bonds issued under the Indenture will be secured by a pledge and assignment of the Lease-Purchase Agreement, dated as offebruary 1, 2002(the"Lease"), between the Authority and the City, and of the revenues derived by the Authority from the Project, and the bonds and interest thereon shall be payable solely from the revenues pledged thereto and no bonds shall constitute a debt of the Authority within the meaning of any constitutional or statutory limitation nor shall the full faith, credit and taxing powers of the Authority be pledged thereto; and WHEREAS, under the Lease,the City is to pay to the Authority sufficient money each year to pay the principal of, premium, if any, and interest on the bonds issued to refinance the Project, and the City is to provide the cost of maintaining the Project in good repair,the cost of keeping the Project properly insured, and any payments required for taxes and any expenses incurred by the Authority in connection with the Project, and WHEREAS, forms of the Lease, the Escrow Agreement,the Indenture and the Preliminary Official Statement, dated January 29, 2002 (together with the Addendum thereto to be prepared and distributed prior to delivery of the Bonds,the"Official Statement")have been presented to this Board and are hereby ordered to be placed on file in the office of the Secretary; • and WHEREAS,the Authority's financial consultant, Juran&Moody, a division of Miller Johnson Steichen Kinnard, as an independent financial advisor pursuant to Minnesota Statutes, Section 475.60, subdivision 2, paragraph(9), has solicited bids for the Bonds on behalf of the City, and, pursuant to the Official Statement, a bid for the purchase of the Bonds has been received, opened, read and considered, and the purchase price, interest rates,net interest cost and true interest cost under the terms of such bid are found to be as set forth in Exhibit A attached hereto. NOW, THEREFORE,BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Eden Prairie, as follows: Section 1. This Board acknowledges, finds, determines and declares that it is in the best interests of the Authority to refinance the Project. It is hereby determined that: (a) by the issuance of the Bonds the Issuer will realize a substantial interest rate reduction, a gross savings of approximately$750,129.40 and a present value savings (using the yield on the Bonds, computed in accordance with Section 148 of the Internal Revenue Code of 1986, as amended(the Code), as the discount factor)of approximately $661,290.21 ; and (b) as of August 1,2002 and February 1, 2003 (the Crossover Dates),the sum of • (i)the present value of the debt service on the Bonds, computed to their stated maturity dates, after deducting any premium, using the yield of the Bonds as the discount raze,plus (ii)any expenses of the refunding payable from a source other than the proceeds of the -2- Bonds or investment earnings thereon, is lower by 7.60%(not less than 3%)than the present value of the debt service on the Refunded Bonds, computed to their stated maturity dates,using the yield of the Bonds as the discount rate. Section 2. For the purpose of paying certain of the costs of the refunding,there is hereby authorized the issuance of Lease Revenue Refunding Bonds, Series 2002A of the Authority in the approximate principal amount of$8,030,000, subject to adjustment according to the Official Notice of Sale. The Bonds shall be issued in fully registered form, shall be in such denominations, shall be payable on the dates and in the principal amounts and shall be payable from the sources and in the manner provided in the Indenture. The Bonds shall bear interest at the rates set forth in Section 6. This Board hereby authorizes and directs the Chair to execute and the Secretary to attest under the corporate seal of the Authority the Trust Indenture(the Indenture)in the name and on behalf of the Authority and to deliver to the Trustee the Indenture, and does hereby authorize and direct the execution of the Bonds in accordance with the provisions of the Indenture. This Board hereby authorizes and directs the Chair to execute and the Secretary to attest under the corporate seal of the Authority the Escrow Agreement in the name and on behalf of the Authority. All of the provisions of the Indenture and the Escrow Agreement,when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated herein. The Indenture and the Escrow Agreement shall be substantially in the form on file in the office of the Secretary with such necessary and appropriate variations, • omissions and insertions as the Chair shall determine to be necessary or appropriate, and the execution thereof by the Chair shall be conclusive evidence of such determination. Section 3. The Chair and the Secretary are hereby authorized and directed to execute and deliver the Lease in the name and on behalf of the Authority. All of the provisions of the Lease,when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated herein. The Lease shall be substantially in the form on file in the office of the Secretary,with such necessary and appropriate variations, omissions and insertions as the Chair shall determine to be necessary or appropriate, and the execution thereof by the Chair shall be conclusive evidence of such determination. Section 4. No covenant, stipulation, obligation or agreement herein contained or contained in the Indenture,the Bonds or the Lease shall be deemed to be a covenant, stipulation, obligation or agreement of any member of this Board or any officer, agent or employee of the Authority in that person's individual capacity, and neither this Board nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Section 5. The officers of the Authority are hereby authorized to do all acts and things required of them by or in connection with this resolution,the Indenture,the Lease and the Escrow Agreement for the full, punctual and complete performance of all the terms, covenants • and agreements contained in the Bonds,the Lease,the Indenture,the Escrow Agreement and this resolution, including the execution and delivery of such closing certificates, arbitrage -3- • certifications and similar documents as may be required by bond counsel in connection with the issuance and delivery ofthe Bonds. Section 6. It is hereby found and determined that the most favorable bid received for the purchase of the Bonds is that submitted by U S Bancorp Piper Jaffray.Inc. , of Minneapolis,Minnesota, and associates(the'Purchases"),to purchase the Bonds at a price of $7,988108.39, plus accrued interest to the date of closing,the Bonds maturing in the following years to mature in the principal amounts and to bear interest at the designated rates set forth below opposite such years, respectively: Principal Interest Principal Interest hfimty Amounts Rate Maturity Amounts Rate 2004 $665,000 3.75% 2009 $925,000 3.95% 2005 725,000 3.75 2010 975,000 4.00 2006 775,000 3.75 2011 1,050,000 4.00 2007 825,000 3.75 2012 1,215,000 4.00 2008 875,000 3.75 Said offer is hereby accepted and the Chair and the Secretary are hereby authorized and directed to execute a contract on the part of the Authority for the sale of the Bonds to the Purchaser. Section 7. Official Statement. The Preliminary Official Statement prepared and distributed on behalf of the Authority by Juran&Moody, a division of Miller Johnson Steichen Kinnard is hereby approved. The officers of the Authority are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency of the Official Statement and to deliver to the Purchaser within seven business days after the date of adoption of this resolution copies of the Official Statement in accordance with the Official Notice of Sale, supplemented so as to contain the terms of the Bonds as set forth in this resolution and the reoffering and other information provided by the Purchaser for inclusion in the Official Statement. Section 8. Arbitrage Rebate. The Authority acknowledges that the Bonds are subject to the rebate requirements of Section 148(f) of the Code. The Authority 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 said Section 148(f)and applicable Regulations to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes, unless the Bonds qualify for an exception from the rebate requirement pursuant to one of the spending exceptions set forth in Section 1.148-7 of the Regulations and no"gross proceeds"of the Bonds(other than amounts constituting a"bona fide debt service fund")arise during or after the expenditure of the original proceeds thereof. Section 9. Continuing Disclosure. Because the City is the only"obligated • person"in respect ofthe Bonds within the meaning of Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934(17 C.F.R. §240.15c2-12), relating to continuing disclosure(as in effect and interpreted from time to time,the Rule)for purposes of identifying -4- • the entities in respect of which continuing disclosure must be made, and the City, in its authorizing resolution, has covenanted to comply with the Rule,the Issuer will undertake no responsibility for continuing disclosure with respect to the Bonds. Section 10. Qualified Tax-Exempt Obligations. In order to enhance the marketability of the Bonds, and since the Authority and all subordinate entities do not reasonably expect to issue in excess of$10,000,000 of governmental and qualified 501(c)(3)bonds during calendar year 2002,the Bonds are hereby designated by the Authority as"qualified tax-exempt obligations" for the purposes of Section 265(b) of the Code. Section 11. Escrow,Redemption of Refunded Bonds and Certificate of Proceedings. (a)The proceeds of the Bonds in the amount of$7,937,984.69 are irrevocably appropriated for the payment of interest to become due on the Bonds to and including the Crossover Dates, and for the payment and redemption of the principal amount of the Refunded Bonds on the Crossover Dates. The Trustee is authorized and directed, simultaneously with the delivery of the Bonds,to deposit the proceeds thereof,to the extent described above, in escrow with U.S.Bank National Association, St.Paul, Minnesota, and shall invest the funds so deposited in securities authorized for such purpose by Minnesota Statutes, Section 475.67, subdivision 13, maturing on such dates and bearing interest at such rates as are required to provide funds sufficient, with cash . retained in the escrow account,to make the above-described payments. The Authority is 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. (b) The Secretary is directed to call the Refunded Bonds for redemption and prepayment at their earliest permissible redemption dates(August 1,2002 in the case of the Series 1992A Bonds and February 1, 2003 in the case of the Series 1992B Bonds) and to give notice of redemption in accordance with the resolutions authorizing the issuance of the Refunded Bonds. (c) The officers of the Authority are authorized and directed to prepare and furnish to the Purchaser, and to Dorsey&Whitney LLP,the attorneys rendering an opinion as to the legality thereof, certified copies of all proceedings and records of the Authority relating to the authorization and issuance of the Bonds and such other affidavits and certificates as may reasonably be required to show the facts relating to the legality and the marketability of the Bonds as such facts appear from the officer's books and records or are otherwise known to them. All such certified copies, certificates and affidavits, including any heretofore fiunished, shall be deemed representations of the Authority as to the correctness of all statements contained therein. Section 12. Refunding of Series 1993A Bonds; Subordination to Refunded Bonds. The City and the Authority have agreed that, at such time as the Series 1993A Bonds can be refunded • in a"current refunding" for federal tax purposes,the Authority will issue lease revenue refunding bonds as additional bonds under the Indenture to refund the Series 1993A Bonds, and -5- • the City and the Authority will enter into amendments of or supplements to the Indenture and the Lease in connection therewith- Until such time as the Series 1992A, 1992B and 1993A Bonds have been redeemed and paid,the Bonds,the Indenture and the Lease will be subordinate to the Series 1992A, 1992B and 1993A Bonds, and to the documents securing those Bonds. Section 13. This resolution shall be in full force and effect from and after its passage. • • -6- Adopted by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Eden Prairie,Minnesota,this 5th day of February,2002. Ronald Case, Acting Chairperson Attest: Carl I JullVtF#ecutive Director • -7- • Commissioner introduced RR-A-Resolution 2002-01 and moved is adoption. The motion for the adoption of the foregoing resolution was duly seconded by Commissioner 3Lc/CAA, ,- and,upon vote being taken thereon,the following Commissioners voted in favor thereof- Uer )asmgo and the following voted against the same: whereupon the resolution was declared duly passed and adopted. •