88-079 RES
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RESOLUTION NO. 88- 7q
RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE,
PRESCRIBING THE FORM AND DETAILS, AND PROVIDING
FOR THE PAYMENT OF $299,900 GENERAL OBLIGATION
TAX INCREMENT (TAXABLE) BONDS, SERIES 1988A
BE IT RESOLVED by the City council of the City of Elk
River, Minnesota as follows:
Section 1. Findings: Costs.
1.1) The City has duly established Development District
No.1 (the District), Tax Increment Financing District No.5
(the TIF District), and adopted a Tax Increment Financing Plan
(the TIF Plan) for the TIF District, all pursuant to Chapter
469 of The Minnesota Statutes (the Act).
1.2) The purpose of the District is to acquire a
development site, described in Exhibit A attached hereto,
located within the District (the Property) to provide the
incentive necessary for Alltool Company to remain in and to
expand its operations in the City, resulting in increased
employment in the City and the preservation and enhancement of
the City's tax base.
1.3) It is necessary and desirable to the sound financial
management of the City and its orderly economic development
that the City issue and sell bonds pursuant to the Act to
provide financing for the purchase of the Property.
Section 2. Authorization of Bonds.
2.1) This Council hereby determines that it is necessary
and in the best interests of the City for the City to issue its
General Obligation Tax Increment (Taxable) Bonds, Series 1988A
in the principal amount of Two Hundred Ninety Nine Thousand
Nine Hundred Dollars ($299,900) (the Bonds) for the purpose of
financing the cost of purchasing the Property.
2.2) The sale and issuance of the Bonds is hereby
authorized pursuant to Minnesota Statutes, Section 469.178 and
Chapter 475. The Council has determined, based upon advice of
bond counsel, that interest on the Bonds cannot be excluded
from gross income for purposes of federal income taxation;
therefore publication of q notice of the sale is not required.
It is hereby determined that not less than twenty percent (20%)
of the cost of the Property, as hereinafter defined, is
estimated to be received from taxes levied upon the increased
value of property within the TIF District; so that, no election
under the provisions of section 475.58 of the Minnesota
Statutes is required.
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2.3) The City has received an offer to purchase the Bonds
from the Bank of Elk River located in the City at a price equal
to the par value of the Bonds (Two Hundred Ninety Nine Thousand
Nine Hundred Dollars ($299,900) and upon the further terms and
conditions hereinafter set forth.
2.4) The sale of the Bonds is hereby awarded to the Bank
of Elk River.
Section 3. Bond Terms, Execution and Delivery.
3.1) The Bonds shall be designated General obligation Tax
Increment (Taxable) Bonds, Series 1988A, shall be dated as of
September 1, 1988, and shall bear interest from the date on
which funds are advanced until paid, calculated from time to
time upon the amount of the unpaid principal balance, at a rate
of ten and three-quarters percent (10 3/4%) per annum. A
single Bond shall be issued in the denomination of Two Hundred
Ninety Nine Thousand Nine Hundred Dollars ($299,900) providing
for installments of principal becoming payable annually on
October 1 in each year, commencing October 1, 1990, such
installments to be paid at the times, and in the amounts stated
below:
Date Amount
October 1, 1990 $ 3,000
. October 1, 1991 40,000
October 1, 1992 45,000
October 1, 1993 45,000
October 1, 1994 45,000
October 1, 1995 45,000
October 1, 1996 40,000
October 1, 1997 36,900
Accrued interest on the Bonds shall be payable semi-annually on
April 1 and October 1 in each year, commencing April 1, 1989.
The principal of and interest on the Bonds shall be payable to
the Bank of Elk River, at its offices in Elk River, Minnesota,
or, as may otherwise be directed by written instruction from
time to time provided by the holder of the Bond.
3.2) The principal installments are subject to prepayment
at the option of the City, in whole or in part, and if in part
in inverse order of due dates. The City shall notify the
holder of the Bonds of the intention to make a prepayment at
least thirty (30) days prior to the date chosen for prepayment.
3.3) The Bonds shall be in substantially the form attached
hereto as Exhibit B and incorporated herein as reference.
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3.4) The Bonds shall be prepared under the direction of
the City Administrator and shall be executed on behalf of the
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City by the signatures of the Mayor and City Administrator and
be sealed with the seal of the City. When the Bonds have been
so executed, they shall be delivered by the City Administrator
to the purchaser thereof upon payment of the purchase price,
and the purchaser shall not be required to see to the
application of the purchase price.
Section 4. Separate Fund for Proceeds. A special fund
designated "The General Obligation Tax Increment (Taxable)
Bonds, Series 1988A Fund" (the Fund) is hereby established
separate from other funds of the City. A separate account is
hereby established within the Fund for purchasing the Property,
which shall be designated the "1988 Industrial Park Property
Acquisition Account" (the Acquisition Account). The proceeds
of the sale of the Bonds, less the portion instituting
capitalized interest, shall be credited to the Acquisition
Account which shall be used to pay the purchase price and other
and other expenses of acquiring the Property and expenses
incurred in connection with the issuance of the Bonds. When
such costs and expenses have been paid, the Acquisition Account
shall be discontinued and any moneys remaining therein shall be
transferred to the debt service account authorized in section 5
hereof.
Section 5. Debt Service Account; Pledge. A separate
account within the Fund is hereby established, designated the
"Series 1988A Tax Increment (Taxable) Bond Debt Service
Account" (the Debt Service Account). All tax increments from
the District (the Tax Increments) are hereby irrevocably
appropriated and pledged to the Debt Service Account to the
extent necessary to pay principal of and interest on the Bonds.
There is also pledged to such account (a) all taxes, if any,
which may at any time are levied for payment of the Bonds;
(b) all funds remaining in the Acquisition Account when it is
discontinued as provided in Section 4, above; and capitalized
interest in the amount of $ 32 500 . The Debt Service
Account shall be used to pay principal and interest on the
Bonds. If moneys in the Debt Service Account should at any
time be insufficient to pay principal and interest due on the
Bonds, such amount shall be paid from the general fund of the
City, which shall be reimbursed therefor when sufficient money
becomes available in the Debt Service Account.
Section 6. Tax Pledqe.
6.1) It is determined that the estimated collection of Tax
Increments are expected to produce sums at least five percent
(5%) in excess of the amount needed to meet when due the
principal and interest payments on the Bonds. The City
recognizes and affirms the pledge of the full faith and credit
of the City to the payment of the Bonds. In the event that the
Tax Increments do not prove sufficient to pay in full the
principal and interest on the Bonds, the City will promptly
levy ad valorem taxes as necessary for such payment without
limitation as to rate or amount.
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Section 7. County Auditor Registration. The City
Administrator is hereby authorized and directed to file a
certified copy of this Resolution with the County Auditor of
Sherburne County, together with such additional information as
the County Auditor may require, and to obtain from the County
Auditor a certification that the Bond has duly entered upon the
Auditor's Bond Register.
Section 8. Authentication of Transcript. The officers of
the City and the County Auditor are hereby authorized and
directed to prepare and furnish to the purchaser of the Bonds,
and to the attorneys approving the legality thereof, certified
copies of all proceedings and records relating to the Bonds and
such other affidavits, certificates and information as may be
required to show the facts relating to the legality and
marketability of the Bonds, as the same may appear from the
books and records in their custody and control or as otherwise
known to them, and all such certified copies, affidavits and
certificates, including any heretofore furnished, shall be
deemed representations of the City as to the correctness of all
statements contained therein.
Section 10. Registration of Transfer. The City shall
cause to be kept, at the office of the City Administrator, a
Bond Register in which, subject to such reasonable regulations
as it may prescribe, the City shall provide for the
registration of transfers of ownership of the Bonds. The Bonds
shall be transferable upon the Bond Register by the holder
thereof in person or by its attorney duly authorized in
writing, upon surrender of the bond to be transferred together
with a written instrument of transfer satisfactory to the City
Administrator, duly executed by the holder or its duly
authorized attorney. Upon such transfer, the City will cause a
new bond or bonds to be issued in the name of the
transferee(s), in the principal amount then remaining unpaid,
bearing interest at the same rate and maturing on the same
date, and the City Administrator shall note the date of
registration and the name and address of the new holder in the
Bond Register. The City may deem and treat the person in whose
name a bond is last registered in the Bond Register as the
absolute owner thereof, whether or not the principal balance or
any part thereof is overdue, for the purpose of receiving
payment of or on account of the principal balance or interest
and for all other purposes.
The motion for the adoption of the foregoing resolutions
was duly seconded by Councilmember 7ralle
The following voted in favor of adoption of such resolution:
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and the following voted against the adoption of the proposed
resolution: None
Whereupon, such resolution was declared duly adopted.
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STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
I, the undersigned, being the duly qualified and acting
Clerk of the City of Elk River, Minnesota, or an appropriate
official of the City authorized to execute this instrument on
behalf of the Clerk, DO HEREBY CERTIFY that I have compared the
attached and foregoing extract of minutes with the original
thereof on file in my office, and that the same is a full, true
and complete transcript of the minutes of a meeting of the City
Council of the City, duly called and held on the date therein
indicated, insofar as such minutes relate to the issuance of
Two Hundred Ninety Nine Thousand Nine Hundred Dollar ($299,900)
General Obligation Tax Increment (Taxable) Bonds, Series 1988A
of the City.
WITNESS my hand and seal this 12th day of September, 1988.
(SEAL)
p~fld~
City Clerk
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EXHIBIT A
Legal Description
Lots One (1), Two (2), Three (3) and Four (4), Block One (1),
Elk River Industrial Park, Second Addition.
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EXHIBIT B
FORM OF BOND
Registered No.
Registered Amount $
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
GENERAL OBLIGATION TAX INCREMENT (TAXABLE) BOND, SERIES 1988A
KNOW ALL MEN BY THESE PRESENTS that the City of Elk River,
(The City), a duly organized and existing municipal corporation
of the County of Sherburne, State of Minnesota, acknowledges
itself to be indebted and for value received promises to pay to
the order of , or
registered assigns (the Holder), the principal sum of
Dollars
($ ), payable, subject to an option of prior payment,
as hereinafter provided, in installments as follows:
Date
Amount of Principal Payment
October 1, 1990
October 1, 1991
October 1, 1992
October 1, 1993
October 1, 1994
October 1, 1995
October 1, 1996
October 1, 1997
together with interest from the date hereof at a rate of ten
and three-quarters percent (10 3/4%) per annum, calculated upon
the amount of the unpaid principal balance existing from time
to time. Installments of interest shall be payable semi-
annually on April 1 and October 1 in each year, commencing
April 1, 1989.
Both principal and interest are payable at the office of
the Bank of Elk River, Elk River, Minnesota, or, at such place
as may be designated from time to time by written notice given
to the City by the Holder of this Bond. For the prompt and
full payment of such principal and interest as the same
respectively become due, the full faith and credit and taxing
powers of the City have been and are hereby irrevocably
pledged.
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This Bond is one of an issue of a single Bond only, in the
total principal amount of $299,900, issued pursuant to a
resolution adopted by the council of the City on September 12,
1988 (the Resolution), to provide funds to finance the
purchase of certain property in Tax Increment Financing
District No.5 in the City, and is issued pursuant to and in
full conformity with the Constitution and laws of the State of
Minnesota thereunto enabling, including Sections 469.174 to
469.179 and Chapter 475 of the Minnesota Statutes.
The principal installments due hereunder are subject to
prepayment at the option of the City, in whole or in part, and
if in part in inverse order of due dates. The City will notify
the Holder of the Bond of such redemption or prepayment at
least thirty (30) days prior to the date chosen for the
prepayment.
This Bond lS transferable upon the books of the City at the
office of the City Clerk by the registered holder hereof in
person or by its attorney duly authorized in writing, upon
surrender of this Bond, together with a written instrument of
transfer satisfactory to the City Clerk duly executed by the
registered holder or its duly authorized attorney. Upon such
transfer, the City will cause a new Bond or Bonds to be issued
in the name of the transferee(s) in the principal amount then
remaining unpaid, bearing interest at the same rate, and
maturing on the same dates and the City Clerk will note the
date of registration and the name and address of the new
registered holder(s) upon the books of the City. The City may
deem and treat the person in whose name this Bond is last
registered upon the books of the City as the absolute owner of
this Bond, whether or not overdue, for the purpose of receiving
payment of the principal balance and interest and for all other
purposes, and all such payments so made to the registered
holder, or upon the order of the registered holder, shall be
valid and effectual to satisfy and discharge the liability on
this Bond to the extent of the sum or sums so paid, and the
City shall not be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that
all acts, conditions and things required by the Constitution
and laws of the State of Minnesota to be done, to exist, to
happen 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 in accordance with its terms, have been
done, do exist, have happened, and have been performed in
regular and due form, time, and manner as so required; that the
Bond is payable from tax increments resulting from increases in
assessed valuation of real property within Tax Increment
Financing District No. 5 (the District) in the City of Elk
River, Minnesota, appropriated to a separate debt service
account of the City; that, if necessary for payment of
principal of and interest on the bonds of this issue, ad
valorem taxes may be levied upon all taxable property within
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the corporate limits of the City 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 Elk River, Minnesota, by
its City Council has caused this Bond to be executed on its
behalf by the signatures of the Mayor and City Administrator,
and by affixing the corporate seal of the City hereto, as of
September 1, 1988.
Mayor
(SEAL)
City Administrator
PROVISIONS AS TO REGISTRATION
No transfer of this Bond shall be valid unless made on the
Bond Register of the City at the request of the Registered
Holder or its attorney duly authorized, and such transfer lS
similarly noted in the registration blanks below.
Date of
Registration
Name of
Registered
Holder
Signature of
City Administrator
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