10-10440rRESOLUTION NO. 10440
RESOLUTION PROVIDING FOR THE DEFEASANCE,
PREPAYMENT AND REDEMPTION OF CERTAIN
OUTSTANDING GENERAL OBLIGATION BONDS OF THE
CITY AND AUTHORIZING EXECUTION OF AN ESCROW
AGREEMENT
BE IT RESOLVED By the City Council of the City of Richfield, Minnesota (the "City"),
as follows:
Section 1. Background; Findings.
1.01. The City and the Housing and Redevelopment Authority of the City of Richfield
(the "Authority") have duly established the Richfield Rediscovered Tax Increment Financing
District (the "TIF District"), a scattered site tax increment district, pursuant to Minnesota
Statutes, Sections 469.174 through 469.1799 (the "TIF Act").
1.02. In order to finance improvements within the TIF District, the City issued its
Taxable Variable Rate Demand General Obligation Bonds (Richfield Rediscovered Project),
Series 1999 (the "Series 1999 Bonds"), dated November 18, 1999, in the original aggregate
principal amount of $1,570,000, pursuant to Section 469.178 of the TIF Act.
1.03. On December 5, 2002, the City issued its Taxable General Obligation Tax
Increment Refunding Bonds, Series 2002C (the "Series 2002C Bonds"), in the original
aggregate principal amount of $1,045,000, of which $570,000 in principal amount is currently
outstanding. The City applied the proceeds of the Series 2002C Bonds to the redemption
and prepayment of the outstanding Series 1999 Bonds, pursuant to Minnesota Statutes,
Chapter 475, as amended.
1.04. Pursuant to a Tax Increment Pledge Agreement, dated October 21, 2002 (the
"Pledge Agreement"), between the Authority and the City, tax increment revenues derived
from the TIF District and other tax increment districts are pledged to the payment of the
principal of and interest on the Series 2002C Bonds.
1.05. The Series 2002C Bonds maturing on February 1, 2013, and thereafter are
subject to redemption and prepayment on February 1, 2012, and on any date thereafter at a
price of par plus accrued interest.
1.06. The tax increment revenues collected by the City pursuant to the Pledge
Agreement for the payment of the principal of and interest on the Series 2002C Bonds is
sufficient to establish a defeasance escrow in order to pay at maturity or on February 1, 2012
(the "Redemption Date"), all of the outstanding Series 2002C Bonds.
1.05. The City finds it in the best interests of the City to establish a defeasance
escrow with funds on hand to redeem and prepay the Series 2002C Bonds at maturity or the
earliest redemption date of such bonds. Upon establishment of the defeasance escrow for
the Series 2002C Bonds, the Authority may decertify the TIF District earlier than required and
the City approves and consents to such actions.
Section 2. Redemption of Series 2002C Bonds.
2.01. Series 2002C Bonds maturing on February 1 in the years 2013 to and including
2017, comprising all of the Series 2002C Bonds subject to redemption, shall be prepaid and
redeemed on the Redemption Date, and those Series 2002C Bonds are hereby called for
redemption on the Redemption Date.
2.02. Wells Fargo Bank, National Association (formerly known as Wells Fargo Bank
Minnesota, N.A.), Minneapolis, Minnesota, is authorized and directed to mail a copy of the
notice of call for redemption of the Series 2002C Bonds in the form attached hereto as
EXHIBIT A to the registered owners of the Series 2002C Bonds.
1109 2002C Bond Refund
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
$1,045,000
CITY OF RICHFIELD, MINNESOTA
TAXABLE GENERAL OBLIGATION
TAX INCREMENT REFUNDING BONDS
SERIES 2002C
NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of
Richfield, Minnesota (the "City"), there have been called for redemption and prepayment
on
February 1, 2012
all outstanding bonds of the City designated as the Taxable General Obligation Tax
Increment Refunding Bonds, Series 200X, dated December 5, 2002, having stated
maturity dates of February 1 in the years 2012 through 2017, both inclusive, totaling
$500,000 in principal amount, and with the following CUSIP numbers:
Year of Maturity
Amount
CUSIP
2013 $150,000 763325 L21
2015 165,000 763325 L47
2017 185,000 763325 L62
The bonds are being called at a price of par plus accrued interest to February 1,
2012, on which date all interest on said bonds will cease to accrue. Holders of the bonds
hereby called for redemption are requested to present their bonds for payment at the main
office of Wells Fargo Bank, National Association (formerly known as Wells Fargo Bank
Minnesota, N.A.), in the City of Minneapolis, Minnesota, on or before February 1, 2012, at
the following address:
Wells Fargo Bank, National Association
Attention: Corporate Trust Operations
Sixth Street and Marquette Avenue
MAC 9303-121
Minneapolis, MN 55479
In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003,
the City is required to withhold a specified percentage of the principal amount of the
redemption price payable to the holder of any Bonds subject to redemption and prepayment
on the Redemption Date, unless the City is provided with the Social Security Number or
Federal Employer Identification Number of the holder, properly certified. Submission of a fully
executed Request for Taxpayer Identification Number and Certification, Form W-9 (Rev.
October 2007), will satisfy the requirements of this paragraph.
Dated:
2010.
BY ORDER OF THE CITY COUNCIL
By /s/ Steven Devich
City Manager
City of Richfield, Minnesota
Section 3. Escrow; Defeasance.
3.01. To accomplish defeasance of the Bonds there is established an Escrow
Account (the "Escrow Account") with Wells Fargo Bank, National Association (the "Escrow
Agent"), a suitable financial institution in the State of Minnesota whose deposits are insured
by the Federal Deposit Insurance Corporation and combined capital and surplus is not less
than $500,000. A form of escrow agreement (the "Escrow Agreement") has been presented
to and reviewed by this Council. The form of the Escrow Agreement is approved. The Mayor
and City Manager are authorized and directed to execute and deliver the Escrow Agreement
on behalf of the City.
3.02. As of the date of execution of the Escrow Agreement (the "Transfer Date")
there will be and are hereby transferred, pledged, and appropriated to the Escrow Account
the balance in the debt service fund for the Series 2002C Bonds needed, together with
interest earnings thereon, for payment of the principal and interest of the Series 2002C
Bonds on and prior to their maturity dates and on the Redemption Date, as the case may be.
It is estimated that such amount is adequate when invested as herein provided to pay the
principal of and interest on the Series 2002C Bonds on and prior to their maturity dates and
on the Redemption Date.
3.03. The funds deposited in the Escrow Account are to be invested in securities
maturing or callable at the option of the holder on such dates and bearing interest at such
rates as may be required to provide sufficient monies together with cash or other monies in
the Escrow Account to pay when due the principal amount of and interest on the Series
2002C Bonds on and prior to their maturity dates, and on the Redemption Date, as the case
may be. The securities to be purchased for the Escrow Account shall be limited to securities
specified in Minnesota Statutes, Section 475.67, subdivision 8, as provided in the Escrow
Agreement.
3.04. For the prompt and full payment of the principal and interest on the Series
2002C Bonds, as the same respectively become due, the full faith, credit and taxing powers
of the City have been and are irrevocably pledged. If the balance in the Escrow Account is
ever insufficient to pay all principal and interest then due on the bonds, the deficiency must
be promptly paid out of monies of the general fund or other funds of the City that are properly
available for such purpose, and such funds may be reimbursed with or without interest from
the Escrow Account when a sufficient balance is available therein.
3.05. When the Bonds and interest thereon have been discharged as provided in this
Resolution, all pledges, covenant and other rights granted by this Resolution to the holders of
the Series 2002C Bonds will cease, except that the pledge of the full faith and credit of the
City will remain in full force and effect.
Adopted by the City Council of the City of Richfield, innesota, this 9th day of
November, 2010.
Debbie Goettel, Mayor
Attest:
~~' ~ `~ ~r~~7
Nancy Gibbs, it Clerk