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88-095 RES . . . RESOLUTION NO. 88-95 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS, AND PROVIDING FOR THE PAYMENT OF $60,100 GENERAL OBLIGATION TAX INCREMENT (TAXABLE) BONDS, SERIES 1988B 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 and improve 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) As originally adopted the TIF Plan contemplated costs of Two Hundred Ninety-nine Thousand Nine Hundred Dollars ($299,900) to be financed by means of the issuance of general obligation taxing increment bonds. Pursuant to Resolution No. 88-79 adopted by this council on September 12, 1988, General Obligation Tax Increment (Taxable) Bonds, Series 1988A, in the principal amount of Two Hundred Ninety-nine Thousand Nine Hundred Dollars ($299,900) were issued and sold to Bank of Elk River to provide financing pursuant to the TIF Plan. Subsequently, it has been determined that costs will be incurred in the amount of Sixty Thousand One Hundred Dollars ($60,100) in addition to the costs of Two Hundred Ninety-nine Thousand Nine Hundred Dollars ($299,900), contemplated in the TIF Plan as originally adopted. Accordingly, the TIF Plan has been amended to provide for financing of such additional costs out of tax increments from the TIF District. 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 and improvement 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 1988B in the principal amount of Sixty Thousand One Hundred Dollars ($60,100) (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 a 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. 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 (Sixty Thousand One Hundred Dollars ($60,100)) and upon the further terms and conditions hereinafter set forth. 2.4) The sale of the Bonds lS 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 1988B, shall be dated as of October 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 Sixty Thousand One Hundred Dollars ($60,100) 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 $ 500 October 1, 1991 8,600 October 1, 1992 8,000 October 1, 1993 8,000 October 1, 1994 8,750 October 1, 1995 8,750 October 1, 1996 8,750 October 1, 1997 8,750 Accrued interest on the Bonds shall be payable semi-annually on April 1 and October 1 in each year, commenclng 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. 2 . . . . 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. 3.4) The Bonds shall be prepared under the direction of the City Administrator and shall be executed on behalf of the 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 1988B Fund" (the Fund) is hereby established separate from other funds of the City. A separate account is hereby established within the Fund for purchasing and improving the Property, which shall be designated the "1988B 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; Pledqe. A separate account within the Fund is hereby established, designated the "Series 1988B Tax Increment (Taxable) Bonds Debt Service Account." Section 5 of Resolution No. 88-79 adopted by this council on September 12, 1988 appropriated and pledged all tax increments from the TIF District (the Tax Increments) to a debt service account authorized by that resolution to the extent necessary to pay principal of and interest on the General Obligation Tax Increment (Taxable) Bonds, Series 1988A in the principal amount of Two Hundred Ninety-nine Thousand Nine Hundred Dollars ($299,900). Section 5 of Resolution No. 88-79 is hereby amended so that a pro rata portion of the Tax Increments are irrevocably appropriated and pledged to the Series 1988A Tax Increment (Taxable) Bonds Debt Service Account to the extent necessary to pay principal of and interest on the General Obligation Tax Increment (Taxable) Bonds, Series 1988A and a pro rata portion of the Tax Increments are hereby irrevocably appropriated and pledged to the Series 1988B Tax increment (Taxable) Bonds Debt Service Account to the extent 3 . . . . necessary to pay principal of and interest on the General Obligation Tax Increment (Taxable) Bonds, Series 1988B. 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 $6500-.00 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 Pledge. 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. 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. Reqistration 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 4 . . . . 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 Do~el The following voted in favor of adoption of such resolution: Mayor Gunkle, CO"lJ_ncilmef1bers Docel, Schuldt, Tralle and Eolmgren and the following voted against the adoption of the proposed resolution: None Whereupon, such resolution was declared duly adopted. SBS:BT6 5. . . . 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 Sixty Thousand One Hundred Dollar ($60,100) General Obligation Tax Increment (Taxable) Bonds, Series 1988B of the City. WITNESS my hand and seal this 21st day of November, 1988. (SEAL) :Ddl?P~ City Clerk . . EXHIBIT A Legal Description Lots One (1), Two (2), Three (3) and Four (4), Block One (1), Elk River Industrial Park, Second Addition. SBS:BT6 . . . 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 1988B 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. B-1 . . . This Bond is one of an issue of a single Bond only, in the total principal amount of $60,100, issued pursuant to a resolution adopted by the council of the City on November 21, 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 is 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 B-2 . . . 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 October 1, 1988. Mayor (SEA:::") 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 is similarly noted in the registration blanks below. Date of Reqistration Name of Registered Holder Signature of City Administrator SBS:BT6 B-3