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RES 97-3 EXTRACT OF MINUTES OF A MEETING OF THE !IIBOARD OF COMMISSIONERS OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY Pursuant to due call and notice thereof, a regular or special meeting of the Board of Commissioners of the Elk River Economic Development Authority, located in the City of Elk River, Minnesota, was duly called and held at the Elk River City Hall on November 10, 1997, commencing at 6 : 00 P.M. , C.T. The following Commissioners were present : President Dwyer Commissioners Farber, Thompson, Duitsman, Bender, and Holmgren and the following were absent : Commissioner Gongoll Commissioner Duitsman introduced the following resolution and moved its adoption: RESOLUTION 97-3 RESOLUTION AUTHORIZING THE ISSUANCE OF THE EDA' S CITY HALL AND LAW ENFORCEMENT FACILITY REVENUE REFUNDING BONDS, SERIES 1997 (CITY OF ELK RIVER • LEASE PURCHASE OBLIGATION) AND THE EXECUTION AND DELIVERY OF A SUPPLEMENT TO LEASE PURCHASE AGREEMENT AND A SUPPLEMENT TO TRUST INDENTURE IN CONNECTION THEREWITH WHEREAS, pursuant to a certain Trust Indenture, dated as of November 1, 1991 (as amended and supplemented by the Inden- ture Supplement hereinafter described, the "Indenture" ) , the Authority issued its $2, 740, 000 City Hall and Law Enforcement Facility Revenue Bonds (City of Elk River Lease Purchase Obligation) , Series 1991, dated November 1, 1991 (the "Series 1991 Bonds") ; WHEREAS, pursuant to a certain Lease Purchase Agreement, dated as of November 1, 1991 (as amended and supple- mented by the Lease Supplement hereinafter described, the "Lease" ) , which was executed and delivered in connection with the issuance of the Series 1991 Bonds, the Authority leased to the City certain land and certain buildings constructed and located thereon (collectively, the "Project") , which the City now occupies and uses for City Hall and law enforcement purposes, and the City agreed to pay to the Authority certain Basic Rent (as defined in the Lease) ; 368962.1 WHEREAS, the City and Authority desire to reduce debt • service costs under the Series 1991 Bonds by the Authority issu- ing its City Hall and Law Enforcement Facility Revenue Refunding Bonds, Series 1997 (City of Elk River Lease Purchase Obligation) , dated December 1, 1997 (the "Bonds") , proceeds of which will be used on February 1, 2000, pursuant to the Escrow Agreement here- inafter defined to effect a crossover refunding of the Series 1991 Bonds; WHEREAS, in order to issue the Bonds in accordance with the provisions of the Indenture, it is necessary to execute cer- tain supplements to the Indenture and the Lease, more specific- ally, a certain Supplement to Lease Purchase Agreement, dated as of December 1, 1997 (the "Lease Supplement") , between the City and the Authority, and a certain Supplement to Trust Indenture, dated as of December 1, 1997 (the "Indenture Supplement") , between the Authority and the Trustee under the Indenture; and WHEREAS, there has been presented to the Authority the form of a certain Escrow Agreement, dated as of December 1, 1997 (the "Escrow Agreement") , which is to be executed and delivered by and between the Authority and the Escrow Agent thereunder in connection with the issuance of the Bonds and which provides for the deposit and investment of the proceeds of the Bonds within the Escrow Account thereunder for subsequent disbursement by the Escrow Agent to pay the interest due on the Bonds on or before February 1, 2000, and to pay the principal of the 2001 through 411 2011 maturities of the Series 1991 Bonds to be optionally prepaid on said date: NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Elk River Economic Development Authority (the "Authority") as follows : 1 . Findings . The Authority acknowledges, finds, determines and declares that the Project and its refinancing will promote the welfare of the City and satisfies the purposes stated in the Act (as defined in the Indenture) . 2 . Authorization of Financing. Pursuant to the Lease Supplement and the Indenture Supplement, and pursuant to the Lease and the Indenture, as respectively amended and supplemented thereby, the refinancing by the Authority of the acquisition, construction and installation of the Project and the issuance of the Bonds are hereby authorized and approved. 3 . Acceptance of Purchase. The offer of (the "Purchaser") , to purchase the Authority' s $ City Hall and Law Enforcement Facility Revenue Refunding Bonds, Series 1997 (City of Elk River Lease Purchase Obligation) , dated as of December 1, 1997 (the "Bonds" , or individually a "Bond") , in accordance with the terms . and at the rates of interest set forth in the Indenture, and to 368962.1 2 pay therefor the sum of $ plus interest 111 accrued to settlement, is hereby accepted. The Bonds shall bear interest at the rates, shall be in such denominations, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form and shall have such other details and provisions as are prescribed by the Indenture. 4 . Special Obligations; Security; Authorization to Execute and Deliver Indenture and Bonds . The Bonds shall be special obligations of the Authority payable solely from the revenues derived by the Authority from the Project and as may otherwise be available for such purposes pursuant to the Indenture and the Mortgage (as defined in the Indenture) . The execution, issuance and delivery of the Bonds are hereby authorized and approved. 5 . Authorization to Execute and Deliver Escrow Agreement, Lease Supplement and Indenture Supplement . The President and the Secretary are hereby authorized to execute, attest and deliver the Escrow Agreement, the Indenture Supplement and the Lease Supplement (collectively, together with the full provisions of the Lease and the Indenture, the "Bond Documents") , in substan- tially the forms on file with the Secretary. All of the provisions of the Bond Documents, when executed and delivered as authorized herein, shall be deemed to be part of this resolution as fully and to the same extent as if incorporated herein and shall be in full force and effect according to the terms thereof • from the date of execution and delivery thereof . The Authority hereby ratifies and approves the prior execution of the Lease, the Indenture and the Mortgage. 6 . Binding Obligations; No Personal Liability. All covenants, stipulations, obligations and agreements of the Authority contained in this resolution and in the Bond Documents shall be deemed to be the covenants, stipulations, obligations and agreements of the Authority to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the Authority. No covenant, stipulation, obligation or agreement herein contained or contained in the Bond Documents shall be deemed to be a covenant, stipulation, obligation or agreement of any Commissioner, or any officer, agent or employee of the Authority in that person' s individual capacity, and neither the Commissioners of the Authority 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 . 7 . Performance. The officers, attorneys and other agents or employees of the Authority are hereby authorized to do all acts and things required of them by or in connection with this resolution and the Bond Documents for the full, punctual and 368962.1 3 complete performance of all the terms, covenants and agreements • contained in the Bonds, the Bond Documents and this resolution. 8 . Furnishing of Certificates and Proceedings. The President and the Secretary and other officers of the Authority are authorized to prepare and furnish to the Purchaser and to bond counsel for the Bonds certified copies of all proceedings and records of the Authority relating to the Bonds, and such other affidavits and certificates as may be required to show the facts relating to 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 Authority as to the truth of all state- ments contained therein. 9 . Negative Covenant as to Use of Project. The Authority hereby covenants not to use the Project or to cause or permit the Project to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such a manner as (or to take any action or permit any other circumstance to exist or any action to be taken, the effect to which would be) to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. In particular, but without limitation, the Authority covenants to forebear the implementation, effectuation or enforcement of any and all contracts or other agreements respecting the Project or any 111 property benefitted thereby or assessed with respect thereto, which it may now or in the future have with developers, contractors, owners or any other person or parties to the extent that such implementation, effectuation or enforcement would (individually or in the aggregate) cause the Bonds to become such "private activity bonds, " and to said limited extent the Authority would and hereby does (solely for the benefit of the owners of the Bonds) disavow any and all such provisions, entitlements and enforcements which would or could become so offending. 10 . Arbitrage Rebate . The Authority shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and (3) the rebate of excess investment earnings to the United States if and to the extent applicable to the Bonds . While the Authority does not expect that the Bonds will qualify for the $5, 000, 000 small issuer exception, the Authority may avail itself of such other arbitrage rebate exceptions as may apply to the Bonds in whole or in part. 11 . Bonds Are "Bank-Qualified" . The Authority hereby designates the Bonds as a "qualified tax-exempt obligations" 368962.1 4 within the meaning of Section 265 (b) (3) of the Code and hereby • determines that: (a) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501 (c) (3) bonds as not being private activity bonds) which will be issued by the Authority (and all entities subordinate to, or treated as one issuer with, the Authority) during calendar year 1997 will not exceed $10, 000, 000; and (b) not more than $10, 000, 000 of obligations issued or to be issued by the Authority during calendar year 1997 have been designated for purposes of Section 265 (b) (3) of the Code. The Authority shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 12 . Modifications to Documents . 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 officials authorized herein to execute said documents prior to their execution; and said Authority officials are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the appropriate • officer or officers of the Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof . In the absence of the President or Secretary any of the documents authorized by this resolution to be executed by the Acting President or the Acting Secretary, respectively. Adopted on November 10, 1997, by the Board of Commissioners of the Elk River Economic Development Authority. The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Bender , and upon vote being taken thereon the following Commissioner voted in favor thereof : President Dwyer Commissioners Farber, Thompson, Duitsman, Bender, and Holmgren and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. • 368962.1 5 Secretary' s Certificate 111 I, the undersigned, being the duly qualified and acting Secretary of the Elk River Economic Development Authority (the "EDA" ) , hereby certify that I have carefully compared and attached the foregoing extract of minutes of a duly called and held meeting of the Board of Commissioners of the EDA held November 10, 1997, a quorum being present and acting throughout, with the original thereof on file and of record in my office and the same is a full, true and complete transcript therefrom insofar as the same relates to the issuance of certain bonds to provide refinancing of the City' s City Hall and law enforcement facilities . WITNESS my hand this 10th day of November , 1997 . el• S:creta 11 El Riv- EPA • 368962.1