87-069 RES
.
.
.
.
. RESOLUTION NO. 87- 69
RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE,
PRESCRIBING THE FORM AND DETAILS, AND PROVIDING
FOR THE PAYMENT OF $140,000 GENERAL OBLIGATION
TAX INCREMENT (TAXABLE) BONDS, SERIES 1987A
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), Ta* Increment Financing District No.3
(the TIF District), adopted a Tax Increment Financing Plan (the
TIF Plan) for the TIF District, and modified the TIF Plan (the
MOdification), all pursuant to Minnesota Statutes,
Chapters 472A and 475, and Section 469.174 to 469.179
(previously Sections 273.71 to 273.78) (collectively, the Act).
1.2) The purpose_of the TIF Plan is to provide financing
for the public development costs of various public improvements
to be constructed in the District, including the improvements
detailed in the Schedule of Costs and Sources attached hereto
as Exhibit A (the Improvements).
1.3) The purpose of the Modification is to amend the TIF
Plan so that it reflects issuance of the Bonds as additional
debt to be repaid from tax increments generated by the
District.
1.4) It is necessary and desirable to the sound financial
managment of the City and its orderly economic development that
the City issue and sell bonds pursuant to the Act to provide
financing for the Improvements.
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 1987A
in the principal amount of One Hundred Forty Thousand Dollars
($140,000) (the Bonds) for the purpose of financing a portion
of the cost of the Improvements in the Elk River Industrial
Park (the Industrial Park) described in Exhibit A attached
hereto.
2.2) The sale and issuance of the Bonds is hereby
authorized pursuant to Minnesota Statutes, Section 475.52. The
Council hereby finds that the principal amount of the Bonds,
namely One Hundred Forty Thousand Dollars ($140,000), does not
exceed one percent (1%) of the assessed valuation of the City,
.
excluding money and credits; the assessed valuation being
Forty-seven Million Eight Hundred Ninety-two Thousand Dollars
($47,892,000); therefore publication of a notice of the sale is
not 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 (One Hundred Forty Thousand
Dollars ($140,000)) 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 1987A, shall be dated as of
December 1, 1987, 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-fourths percent (10 3/4%) per annum. A single
Bond shall be issued in the denomination of One Hundred Forty
Thousand Dollars ($140,000) providing for installments of
principal becoming payable annually on August 1 in each year,
commencing August 1, 1988, such installments to be paid at the
times, and in the amounts stated below:
. Date Amount
August 1, 1988 $28,000
August 1, 1989 $28,000
August 1, 1990 $28,000
August 1, 1991 $28,000
August 1, 1992 $28,000
Accrued interest on the Bond shall be payable semi-annually on
February 1 and August 1 in each year, commencing February 1,
1988. The principal of and interest on the Bond shall be
payable to the Bank of Elk River, or, as may otherwise be
directed by written instruction from time to time provided by
the offeror or other holder of the Bonds.
3.2) The Bonds and the principal installments due
hereunder are subject to redemption and prepayment at the
option of the City, in whole or in part, and if in part in
inverse order of due dates, at a price equal to the principal
amount thereof plus interest accrued to the date of redemption
or prepayment. Thirty (3D) days prior to the date cho~en for
redemption or prepayment, the City shall notify the Holder of
the Bond of such redemption or prepayment.
.
3.3) The Bond shall be In substantially the form attached
hereto as Exhibit B.
2 .
.
3.4) Execution and Delivery. The Bond shall be prepared
under the direction of the City Clerk-Administrator and shall
be executed on behalf of the City by the signatures of the
Mayor and City Clerk-Administrator and be sealed with the seal
of the City. When the Bond has been so executed it shall be
delivered by the City Clerk-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. construction Fund.
.
A special fund designated "The General Obligation Tax
Increment (Taxable) Bond, Series 1987A Fund" (the FUnd) is
hereby established separate from other funds of the City. A
separate account is hereby established within the Fund for a
project consisting of the construction of Improvements in the
Industrial Park in the City, which shall be called the "1987
Industrial Park Improvements Project Construction Account."
The proceeds of the sale of the Bonds shall be credited to the
1987 Industrial Park Improvements Project Construction Account.
From such account shall be paid all costs and expenses related
to the construction of the Improvements; provided, that the
moneys in such account may also be used to the extent necessary
to pay interest or principal due on the Bond prior to the
commencement of the collection of tax increments and taxes
levied or to be levied for the purpose of paying the costs of
the Improvements and the principal and interest due upon the
Bond. When the total cost of the Improvements has been paid,
such account shall be discontinued and any money remaining in
such account 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 1987A Tax Increment (Taxable) Bond Debt Service
Account." Excess Tax Increments (defined in Section 6) are
hereby irrevocably appropriated and pledged to the Series 1987A
Tax Increment (Taxable) Bond 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 accrued interest
received from the purchaser of the Bonds; and (b) all funds
remaining in the 1987 Industrial Park Improvements Project
Construction Account after completion of the Improvements and
payment of the cost thereof. Such separate account shall be
used to pay principal and interest on the Bonds. If moneys in
such separate 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
such separate account.
.
3 .
.
.
.
Section 6. Tax Pledqe.
6.1) No general tax levy 1S required at this time for
payment of the Bonds. The Bonds are payable from tax
increments generated by Tax Increment Financing District No. 3
in excess of such tax increments pledged to the extent
necessary to pay the principal of and interest on the City's
Eight Hundred Fifty Thousand Dollar ($850,000) General
Obligation Tax Increment Bonds, Series 1985A (the Excess Tax
Increments). The Excess Tax Increments and other funds herein
pledged for the payment of the Bonds will produce at least five
percent (5%) in excess of the amount needed to meet when due
the principal and interest payments on the Bonds, as shown in
the Increment Income Estimate attached hereto as Exhibit C.
6.2) The City recognizes and affirms the pledge of the
full faith and credit of the City to the payment of the Bond.
In the event that the Excess Tax Increments, and the other
funds pledged to the payment of the Bond do not prove
sufficient to pay principal and interest on the Bond, the City
will promptly levy additional taxes as necessary for such
payment without limitation as to rate or amount.
Section 7. Defeasance. The City may at any time discharge
its obligations with respect to the Bond, subject to the terms
of this Resolution and the provisions of law now or hereafter
authorizing and regulating such action. When all principal of
the Bond has been discharged as provided in this Resolution,
all pledges, covenants and other rights granted by this
Resolution to the holder of the Bond shall cease.
Section 8. County Auditor Reqistration. The City Clerk-
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 shall require, and to obtain from the County
Auditor a certification that the Bonds have been duly entered
upon his Bond Register.
Section 9. 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 Bond,
and to the attorneys approving the legality thereof, certified
copies of all proceedings and records relating to the Bond and
such other affidavits, certificates and information as may be
required to show the facts relating to the legality and
marketability of the Bond, 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.
4.
.
.
.
Section 10. Reqistration of Transfer. The City shall
cause to be kept at the office of the City Clerk 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 Bond. The Bond 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 together with a written instrument of
transfer satisfactory to the City Clerk, 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), the same aggregate principal amount,
bearing interest at the same rate and maturing on the same
date, and the City Clerk 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
an 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 Schuldt
The following voted in favor of adoption of such resolution:
Mayor Gunkel, Councilmembers Schuldt, Tralle and Holmgren
and the following voted against the adoption of the proposed
resolution: None
Whereupon, such resolution was declared duly adopted.
5 .
.
.
.
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK R1VER
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
One Hundred Forty Thousand Dollar ($140,000) Generai Obligation
Tax Increment (Taxable) Bonds, Series 1987A of the City.
WITNESS my hand and seal this 1st day of December, 1987.
(SEAL)
P~j)d~
City Clerk .
CAP:AS8
.
.
.
EXTRACT OF MINUTES OF MEETING OF THE
CITY COUNCIL OF THE CITY OF
ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular
meeting of the City Council of the City of Elk River,
Minnesota, was held at the City Hall in the City of Elk River
on the 30th day of November, 1987, at 7:30 p.m.
The following members were present: Mayor Gunkel, Councilmembers
Schuldt, Tralle and Holmgren
and the following members were absent: None
Councilmember
Tralle
introduced the following
resolution and moved its adoption: Resolution 87-69
and the following voted against the same:
None
CAP:AS8
.
.
.
EXHIBIT A
Schedule of Costs and Sources
Cost of the Industrial Park Improvements to be Financed:
Construction Costs
Street and Grading Improvements
Watermain Improvements
Sanitary Sewer Improvements
Storm Drainage Improvements
TOTAL
$149,348
48,647
36,555
117,097
$351,647
Engineering
67,951
Legal and Administrative
16,300
Contingency
1,493
TOTAL COSTS
$437,391
Sources of Funds:
State Aid Reimbursement
$177,391
Excess Water Tower Bond Proceeds
120,000
TOTAL SOURCES
$297,391
Amount of Bonded Indebtedness to be Incurred:
Cost of Industrial Park Improvements
437,391
Less: Funds From Other Sources
297,391
Net Bond Issue
$140,000
CAP:AS8
.
.
.
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 1987A
KNO~ ALL MEN BY THESE PRESENTS that the City of Elk River,
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 prlor payment, in installments as follows:
Date
Amount of Principal Payment
August 1, 1988
August 1, 1989
August 1, 1990
August 1, 1991
August 1, 1992
$28,000
$28,000
$28,000
$28,000
$28,000
together with interest from the date hereof at a rate of ten
and three~fourths 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 February 1 and August 1 in each year, commencing
February 1, 1988.
Both principal and interest are payable at 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.
This Bond is one of an issue of a single Bond only, in the
total principal amount of $140,000, issued pursuant to a
resolution adopted by the council of the City on November 30,
1987 (the Resolution), to provide funds to finance the public
development costs of a project in the District, and is issued
pursuant to and in full conformity with the Constitution and
laws of the State of Minnesota thereunto enabling, including
B-1
.
.
.
Sections 469.174 to 469.179 (formerly Sections 273.71 to
273.78) and Chapters 472A and 475.
This Bond and the principal installment due hereunder are
subject to redemption and prepayment at the option of the City,
in whole or in part, and if in part in inverse order of due
dates, at a price equal to the principal amount thereof plus
interest accrued to the date of redemption or prepayment.
Thirty (30) days prior to the date chosen for the redemption or
prepayment of the Bond or any principal installment, the City
will notify the Holder of the Bond of such redemption or
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 attorn~y 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) of the same aggregate
principal amount, bearing interest at the same rate! and
maturing on the same date 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, CONVENANTED 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 Bonds are payable from tax increments
resulting from increases in assessed valuation of real property
within Tax Increment Financing District No. 3 (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, additional ad valorem taxes may be levied upon all
taxable property within the corporate limits of the Issuer
without limitation as to rate or amount; and that the issuance
of this Bond does not cause the indebtedness of the Issuer to
exceed any constitutional or statutory limitation.
B-2
.
.
.
IN WITNESS WHEREOF, the City of Elk Riv~r, Minnesota, by
its City Council has caused this Bond to be executed on its
behalf by the signatures of the Mayor and City Clerk-
Administrator, and by affixing the corporate seal of the City
hereto, this 1st day o:fbecember , 1987.
(SEAL)
O~W c'" ~n
Mayor
c?~~~
PROVISIO~S 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
Reqistration
Name of
Registered
Holder
Signature of
City Clerk
CAP:AS8
B-3
.
EXHIBIT C
Increment Income Estimate
May 5, 1987
Levy Year/ Assessed
Collection Year Value
Original Captured
Assessed Value Assessed Value
Increme~t
Income
1986/87
1987/88
1988/89
1989/90
1990/91
1991/92
1992/93
1993/94
1994/95
$1,241,956
3,364,832
3,364,832
3,364,832
3,364,832
3,364,832
3,364,832
3,364,8322
1,578,836
$133,272
377,116
376,615
376,305
375,985
375,656
375,317
374,968
175,593
$83,066
85,558
89,917
92,614
95,393
98,255
101,202
104,238
51,938
$1,158,890
3,279,274
3,274,915
3,272,218
3,269,439
3,266,577
3,263,630
3,260,594
1,526,898
District's Cash Flow with Present Debt Service
1987A
Levy Payment Present Estimated Increment Annual Cumulative
Year Year Debt Service Debt Service Income Surplus Surplus
1986 1988 $ 97,333 $36,750 $ 133,272 $ (811) $ (811)
. 1987 1989 120,383 38,220 377,116 218,513 217,702
1988 1990 121,670 36,015 376,615 218,930 436,632
1989 1991 122,470 33,810 376,305 220,025 656,657
1990 1992 122,758 31,605 375,985 221,622 878,279
1991 1993 122,508 375,656 253,148 1,131,427
1992 1994 121,695 375,317 253,622 1,385,049
1993 1995 120,295 374,968 254,673 1,639,722
1994 1996 138,325 175,593 37,268 1,676,990
1995 1997 129,085 (129,085) 1,547,905
1996 1998 119,625 (119,625) 1,428,280
$1,336,147 $176,400 $2,940,827 $1,428,280
-------------------------
.
1
Commercial classification requlres 28% on first $60,000 of market
value and 43% on excess.
2
Assessed value drop reflects termination of TIF #1 with capture of
assessed value of TIF #3 only.
3
Mill rate: 115 mills.
CAP:AS8