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01-9076r 8 RESOLUTION NO. 9076 RESOLUTION ACCEPTING THE OFFER OF THE MINNESOTA PUBLIC FACILITIES AUTHORITY TO PURCHASE A $6,700,000 GENERAL OBLIGATION IMPROVEMENT NOTE OF 2001 PROVIDING FOR ITS ISSUANCE, AND AUTHORIZING EXECUTION OF A PROJECT LOAN AGREEMENT WHEREAS, the City Council of the City of Richfield, Hennepin County, Minnesota (the "City"), has applied for a transportation revolving fund loan ("TRLF Loan") from the Minnesota Public Facilities Authority (the "PFA") to provide financing for funding eligible project costs, specifically to replace the bridge over Interstate Highway 494 at Penn Avenue South (the "Project"); and WHEREAS, the PFA has committed to make a loan to the City in the principal amount of $6,700,000, to be disbursed and repaid in accordance with the terms of a Public Facilities Authority Project Loan and General Obligation Bond Purchase Agreement (the "Project Loan Agreement") executed by the PFA and City, a copy of which is before this meeting and on file with the City Clerk; the Project Loan Agreement, as executed, is incorporated by reference; and WHEREAS, the City is authorized by Minnesota Statutes, chapter 429 to issue and sell its general obligation (the "Note" as defined below) to finance the Project; and WHEREAS, the Note of the City is intended to bear interest that is exempt from federal and state income taxes; and WHEREAS, in accordance with Minnesota Statutes, section 475.60, subdivision 2(4), the City is authorized to issue and sell obligations to a board, department or agency of the State of Minnesota by negotiation and without advertisement for bids and the PFA is, and has represented that it is, a board, department or agency of the State of Minnesota; and WHEREAS, a contract or contracts for the Project have been made by the City with the approval of the PFA and all other state and federal agencies whose approval is required: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Hennepin County, Minnesota, as follows: 1. Acceptance of Offer: Payment. The offer of the PFA to purchase a $6,700,000 General Obligation Improvement Note of 2001 of the City (the "Note"), at the rate of interest hereinafter set forth, and to pay therefor the par amount of the Note as provided below, is accepted, and the sale of the Note is awarded to the PFA. Payments for the Note are to be disbursed in installments as eligible costs of the Project are reimbursed or paid, all as provided in the Project Loan Agreement. 2. Title: Date: Denomination: Interest Rates: Maturities. The Note will be a fully registered negotiable obligation, titled the "General Obligation Improvement Note of 2001 ", dated as of the date of delivery and issued forthwith. The Note is in the principal amount of $6,700,000 or so much thereof as is disbursed pursuant to the Project Loan Agreement, bearing interest on so much of the principal amount of the Note as (i) may be disbursed from time to time as provided in the Project Loan Agreement and (ii) remains unpaid, until the principal amount of the Note has been paid or has been provided for, at the rate of 2.00% per annum (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Note is payable semi-annually on February 20 and August 20, commencing February 20, 2002. Principal of the Note matures on February 20 of the years and in the installments as follows: Year Amount 2004 2005 2006 2007 $ 10,000 10,000 4,680,000 2,000,000 Interest will accrue only on the aggregate principal amount of the Note that has been disbursed and is unpaid under the Project Loan Agreement. The principal installments are to be paid in the amounts scheduled above even if at the time of payment the full principal amount of the Note has not been disbursed; provided that if the full principal amount of the Note is never disbursed, the amount of the principal not disbursed is to be applied to reduce each unpaid principal installment in the proportion that such installment bears to the total of all unpaid principal installments (i. e., the remaining principal payment schedule will be reamortized to provide similarly level annual installments of total debt service payments). Principal, interest and any premium due under the Note will be paid on each payment date by wire payment, or by check or draft mailed at least five business days prior to the payment date to the person in whose name the Note is registered, in any coin or currency of the United States which at the time of payment is legal tender for public and private debts. Interest on the Note includes amounts treated by the PFA as service fees. 3. Purpose: Cost. The proceeds of the Note are intended to provide funds to finance construction of the Project. The total cost of the construction of the Project, including legal and other professional charges, publication and printing costs, interest accruing on money borrowed for the Project before the collection of revenues pledged and appropriated therefor, and all other costs necessarily incurred and to be incurred from the inception to the completion of the Project, is estimated to be at least equal to the amount of the Note. The City covenants that it will do all things and perform all acts required of it to assure that work on the Project proceeds with due diligence to completion and that any and all permits and studies required under law for the Project are obtained. 4. Redemption. The Note is subject to redemption and prepayment in whole or in part (i) at the option of the City or (ii) mandatorily, as provided in the Project Loan Agreement. If redemption is in part, installments of principal payable last under the Note must be prepaid first, unless the City and the holder of the Note agree to a different manner of payment. 5. Reqistration of Note. At the time of issuance and delivery of the Note, the City Clerk (the "Clerk") must register the Note in the'name of the payee in a note register maintained for the purpose of registering the ownership of the Note. The Note is to be prepared for execution with an appropriate text and spaces for notation of registration. The force and effect of such registration is as stated in the form of Note. Payment of principal installments and interest, whether upon redemption or otherwise, made with respect to the Note, may be made to the registered holder thereof without presentation or surrender of the Note. 6. Form of Note. The Note, together with the Certificate of Registration attached thereto, will be in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA CITY OF RICHFIELD HENNEPIN COUNTY $6,700,000 GENERAL OBLIGATION IMPROVEMENT NOTE OF 2001 KNOW EVERYONE BY THESE PRESENTS that the City of Richfield, a municipal corporation in Hennepin County, Minnesota (the "City"), acknowledges that it is indebted and for value received promises to pay to the Minnesota Public Facilities Authority or the registered assigns, the principal sum of $6,700,000, or so much thereof as may have been disbursed, on February 20 of the years and in the installments as follows: Year Amount 2004 2005 2006 2007 $ 10,000 10,000 4,680,000 2,000,000 and to pay interest on so much of the principal amount of the debt as (i) may be disbursed from time to time as provided in the Project Loan Agreement (as defined below) and (ii) remains unpaid until the principal amount hereof is paid or has been provided for, at the rate of 2.00% per annum (calculated on the basis of a 360-day year of twelve 30-day months). Interest on this Note is payable semiannually on each February 20 and August 20, commencing, February 20,2002. Principal and Interest Payments. Interest accrues only on the aggregate amount of this Note that has been disbursed under the Public Facilities Authority Project Loan and General Obligation Bond Purchase Agreement dated as of August 21, 2001, by and between the City and the Minnesota Public Facilities Authority (the "Project Loan Agreement"). The principal installments that will be paid in the amounts scheduled above even if at the time of payment the full principal amount of this Note has not been disbursed; provided that if the full principal amount of this Note is never disbursed, the amount of the principal not disbursed is to be applied to reduce each unpaid principal installment in the proportion that such installment bears to the total of all unpaid principal installments (i. e., the remaining principal payment schedule is to be reamortized to provide similarly level annual installments of total debt service payments). Interest on this Note includes amounts treated by the Minnesota Public Facilities Authority as service fees. Principal, interest and any premium due under this Note will be paid on each payment date by wire payment, or by check or draft mailed at least three business days prior to the payment date to the person in whose name this Note is registered, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts. Redemption. This Note is subject to redemption and prepayment in whole or in part (i) at the option of the City and (ii) mandatorily, as provided in the Project Loan Agreement. If redemption is in part, installments of principal payable last under this Note must be prepaid first, unless the City and the holder of this Note agree to a different manner of payment. Purpose: General Obligation. This Note has been issued pursuant to and in full conformity with the charter of the City and the constitution and law of the State of Minnesota for the purpose of providing money to finance eligible project costs of a highway improvement project (Project), specifically to construct a replacement bridge over Interstate Highway 494 at Penn Avenue South in the City, and is payable out of a special PFA Debt Service Account of the City to which account have been pledged by the Project. This Note has been issued pursuant to and in full conformity with Minnesota Statutes, chapter 429, and the principal of and interest hereon are payable primarily from special assessments against benefited property as set forth in a resolution of the City Council adopted on September 10, 2001 to which reference is made for a full statement of rights and powers thereby conferred. The full faith, credit and taxing powers of the City are irrevocably pledged for payment of this Note and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in special assessments which additional taxes may be levied without limitation as to rate or amount. Reqistration: Transfer. This Note must be registered in the name of the payee on the books of the City by presenting this Note for registration to the City's Finance Manager, who will endorse the Finance Manager's name and note the date of registration opposite the name of the payee in the certificate of registration attached hereto. Thereafter this Note may be transferred to a bona fide purchaser only by delivery with an assignment duly executed by the registered owner or owner's legal representative, and the City may treat the registered owner as the person exclusively entitled to exercise all the rights and powers of an owner until this Note is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the City Finance Manager. Fees Upon Transfer or Loss. The Finance Manager may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer of this Note and any legal or unusual costs regarding transfers and lost notes. Proiect Loan AQreement. The terms and conditions of the Project Loan Agreement are incorporated herein by referE;nce and made. a part hereof. The Project Loan Agreement may be attached to this'Note and mustbe\attached to this Note if the holder of this Note is any person other than the Minnesota Public Facilities Authority. Tax-Exempt Obligation. The City intends that the interest to be paid on this Note will be excluded from gross income for United States income tax purposes or from both gross income and taxable net income for State of Minnesota income tax purposes. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Note, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; and that the issuance of this Note does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. IN WITNESS WHEREOF, the City of Richfield, Hennepin County, Minnesota, by its City Council has caused this Note to be executed on its behalf by the signatures of its Mayor and City Manager, all as of , 2001. OTA City Manager General Obligation Improvement Note of 2001 CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount of the attached Note may be made only by the registered owner or by the owner's legal representative last noted below. DATE OF REGISTRATION REGISTERED OWNER SIGNATURE OF FINANCE MANAGER Minnesota Public Facilities Authority Saint Paul, Minnesota Federal Employer Identi- fication NO.4 1-6007162 7. Execution. The Note is to be executed on behalf of the City by the signatures of its Mayor and its City Manager. In the event of disability or resignation or other absence of either such officer, the Note may be signed by the manual signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature will appear on the Note ceases to be such officer before the delivery of the Note, that signature will nevertheless be valid and sufficient for all purposes, the same as if that officer had remained in office until delivery. 8. Delivery; Application of Proceeds. The Note when so prepared and executed will be delivered by the Finance Manager to the purchaser thereof prior to disbursements pursuant to the Project Loan Agreement, and the purchaser is not obligated to see to the proper application those disbursements. 9. Payment Security; Pledges and Covenants. (a) The Note is payable from the Improvement Note of 2001 Debt Service Fund (PFA Debt Service Fund) hereby created, and the proceeds of special assessments (Assessments) levied or to be levied for the Project are hereby pledged to the PFA Debt Service Fund. If a payment of principal or interest on the Note becomes due when there is not sufficient money in the PFA Debt Service Fund to pay the same, the City Finance Manager is directed to pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for the advances out of the proceeds of Assessments when collected. (b) The proceeds of the Note, together with any other funds appropriated for the Project, and Assessments collected during the construction of the Project will be deposited in a separate construction fund (the PFA Construction Fund) to be used solely to defray expenses of the Project and the payment of principal and interest on the Note prior to the completion and payment of all costs of the Project. Any balance remaining in the PFA Construction Fund after completion of the Project may be used to pay the cost in whole or in part of any other improvement instituted under Minnesota Statutes, Chapter 429. When the Project is completed and the cost thereof paid, the construction account is to be closed and subsequent collections of Assessments for the Project are to be deposited in the PFA Debt Service Fund. (c) It is hereby determined that the Project will directly and indirectly benefit abutting property, and the City hereby covenants with the holders from time to time of the Note as follows: (i) The City has caused or will cause the Assessments for the Project to be promptly levied and will take all steps necessary to assure prompt collection, and the levy of the Assessments is hereby authorized. The City Council will cause to be taken with due diligence all further actions that are required for the construction of each Project financed wholly or partly from the proceeds of the Note, and will take all further actions necessary for the final and valid levy of the Assessments and the appropriation of any other funds needed to pay the Note and interest thereon when due. (ii) In the event of any current or anticipated deficiency in Assessments the City Council will levy ad valorem taxes in the amount of the current or anticipated deficiency. (iii) The City will keep complete and accurate books and records showing: receipts and disbursements in connection with the Project, Assessments levied therefor and other funds appropriated for their payment, collections thereof and disbursements therefrom, monies on hand and, the balance of unpaid Assessments. (iv) The City will cause its books and records to be audited at least annually and will furnish copies of such audit reports to PFA on request. (d) It is hereby determined that the estimated collections of Assessments and interest thereon for payment of principal and interest on the Note will produce at least five percent in excess of the amount needed to meet when due, the principal and interest payments on the Notes and that no tax levy is needed at this time. (e) The City Clerk is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager of Hennepin County and to obtain the certificate required by Minnesota Statutes, section 475.63. 10. Proiect Loan Aqreement. The Project Loan Agreement is approved in substantially the form heretofore presented to the City Council, and in the form executed is hereby incorporated by reference and made a part of this resolution. Each and all of the provisions of this resolution relating to the Note are intended to be consistent with the provisions of the Project Loan Agreement, and to the extent that any provision in the Project Loan Agreement is in conflict with this resolution as it relates to the Note, that provision controls and this resolution is deemed accordingly modified. The Mayor and City Manager are hereby authorized and directed to execute the Project Loan Agreement. The execution of the Project Loan Agreement by the appropriate officers is conclusive evidence of the approval of the Project Loan Agreement in accordance with the terms hereof. The Project Loan Agreement may be attached to the Note, and must be attached to the Note if the holder of the Note is any person other than the PFA. 11. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the PFA, and to the attorneys approving the legality of the issuance of the Note, certified copies of all proceedings and records of the City relating to the Note and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, are to be deemed representations of the City as to the facts recited therein. 12. Neqative Covenants as to Use of Proceeds and Proiect. The City hereby covenants not to use the proceeds of the Note or to use the Project, or to cause or permit either of them to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such a manner as to cause the Note to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Note that would cause it to be a "private activity bond", and the average term of the Note is not longer than reasonably necessary for governmental purpose. The City covenants not to use the proceeds of the Note in such a manner as to cause the Note to be a "hedge bond" within the meaning of Section 149(g) of the Code. 13. Tax-Exempt Status of the Note: Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income on the Note under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Note. 14. Severabilitv. If any section, paragraph or provision of this resolution is held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision will not affect any of the remaining provisions of this resolution. 15. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof and do not limit or define the meaning of any provision hereof. Adopted by the City Council of the City of Richfield, Minnesota this 10th day of September, 2001. 7~&4;;Jri JLu Martin J. Kirs6tlj--M"ayor ATTEST: