EDA Res 15-002ITAYS1111 mail
BE IT RESOLVED By the Board of Commissioners (the "Board ") of the Shorewood
Economic Development Authority (the "Authority ") as follows:
Section 1. Background, Authorization.
(a) The City of Shorewood, Minnesota (the "City ") is authorized by
Minnesota Statutes, Section 465.71, as amended, to acquire real and personal property
under lease - purchase agreements.
(b) The Authority has agreed with the Excelsior Fire District (the "District ")
and the South Lake Minnetonka Police Department (the "Department ") that pursuant to
the Ground Lease (West Side), dated as of September 1, 2002 (the "Original Ground
Lease "), as amended by a First Amendment to Ground Lease (West Side), dated as of
April 15, 2003 (the "First Amendment to Ground Lease "), and a. Second. Amendment to
Ground Lease, dated as of January 1, 2007 (the "Second Amendment to Ground Lease "),
the Authority will acquire certain property from the District and the Department. The
Authority will lease such property, together with certain buildings, structures or
improvements now or hereafter located thereon (the "Fire Facilities "), to the City
pursuant to a Lease Purchase Agreement (West Side Fire Facilities), dated as of
September 1, 2002 (the "Original Lease "), as amended by a First Amendment to Lease
Purchase Agreement (West Side Fire Facilities), dated as of April 15, 2003 (the "First
Amendment to Lease "), and a Second Amendment to Lease Purchase Agreement (West
Side Fire Facilities), dated as of January 1, 2007 (the "Second Amendment to Lease ").
(c) With the Authority's consent, the City has entered into a Sublease
Purchase Agreement (West Side Fire Facilities), dated as of September 1, 2002 (the
"Sublease"), with the District, pursuant to which the District undertakes the City's
obligations under the Lease (hereinafter defined).
(d) Pursuant to a Trust Indenture, dated as of September 1, 2002 (the
"Original Indenture "), between the Authority and U.S. Bank National Association, as
trustee (the "Trustee "), as supplemented by a First Supplemental Trust Indenture, dated
as of April 15, 2003 (the "First Supplemental Indenture "), and a Second Supplemental
Trust Indenture, dated as of January 1, 2007 (the "Second Supplemental Indenture "), the
.Authority issued its Public Safety Fire Facility Lease Crossover Refunding Revenue
Bonds, Series 2007A (City of Shorewood, Minnesota Lease Obligation) (the "Series
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2007A Bonds "), in the original aggregate principal amount of $4,130,000. Proceeds of
the Series 2007A Bonds were used to achieve the advance crossover refunding of the
Authority's (i) Public Safety Fire Facility Lease Revenue Bonds, Series 2002A (City of
Shorewood, Minnesota Lease Obligation) (the "Series 2002A Bonds "), issued in the
original aggregate principal amount of $3,865,000; and (ii) Public Safety Fire Facility
Lease Revenue Bonds, Series 2003A (City of Shorewood, Minnesota Lease Obligation)
(the "Series 2003A Bonds "), issued in the original aggregate principal amount of
$1,195,000. Proceeds of the Series 2002A Bonds and the Series 2003A Bonds financed a
portion of the cost of the acquisition, construction, and equipping of the Fire Facilities.
(e) The Authority has detennined to redeem and prepay the outstanding
Series 2007A Bonds through the issuance of its Public Safety Fire Facility Lease
Revenue Refunding Bonds, Series 2016A (City of Shorewood, Minnesota Lease
Obligation) (the "Series 2016A Bonds "), in the original aggregate principal amount of
$2,470,000.
(f) The Series 2016A Bonds will be issued under the terms of a Third
Supplemental Trust Indenture, dated as of January 1, 2016 (the "Third Supplemental
Indenture," and collectively with the Original Indenture, the First Supplemental
Indenture, and the Second Supplemental Indenture, the "Indenture "), between the
Authority and the Trustee, as Additional Bonds pursuant to the Indenture.
(g) In connection with the issuance of the Series 2016A Bonds, the Authority
will (i) enter into a Third Amendment to Ground Lease (West Side), dated as of January
1, 2016 (the "Third Amendment to Ground Lease," and collectively with the Original
Ground Lease, the First Amendment to Ground Lease, and the Second Amendment to
Ground Lease, the "Ground Lease "), with the District and the Department; and (ii) enter
into a Third Amendment to Lease Purchase Agreement (West Side Fire Facilities), dated
as of January 1, 2016 (the "Third Amendment to Lease," and collectively with the
Original Lease, the First Amendment to Lease, and the Second Amendment to Lease, the
"Lease "), with the City.
(h) Pursuant to an Assignment and Security Agreement, dated as of
September 1, 2002 (the "Original Assignment "), between the Authority and the Trustee,
as modified by a First Supplemental Assignment and Security Agreement, dated as of
April 15, 2003 (the "First Supplemental Assignment "), a Second Supplemental
Assignment and Security Agreement, dated as of January 1, 2007 (the "Second.
Supplemental Assignment "), and a Third Supplemental Assignment and Security
Agreement, dated as of January 1, 2016 (the "Third Supplemental Assignment," and
collectively with the Original Assignment, the First Supplemental Assignment, and the
Second Supplemental Assigmment, the "Assignment "), the Authority will assign to the
Trustee all of the Authority's right, title and interest in and to the Ground Lease, the
Lease, and the Lease Payments to be made by the City under the Lease (the "Lease
Payments "), other than certain rights to indemnification and payment of expenses, as
security for the Series 2016A Bonds.
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(i) Forms of the Third Amendment to Ground Lease, the Third Amendment to
Lease, the Third Supplemental Indenture, and the Third Supplemental Assignment have
been prepared and submitted to the Authority and are on file with the Authority.
0) On October 26, 2015, the Board authorized Authority staff and consultants
to negotiate the sale of the Series 2016A Bonds, subject to ratification by the Board.
Section 2. Sale of Series 2016A Bonds.
2.01. Award to the Purchaser and Interest Rates. The proposal of Northland Securities,
Inc., Minneapolis, Minnesota (the "Purchaser "), to purchase the Series 2016A Bonds is hereby
found and determined to be a reasonable offer, and the Board hereby ratifies the actions of
Authority staff and consultants in accepting the Purchaser's proposal, said proposal being to
purchase the Series 2016A Bonds at a price of $2,493,634.00 (par amount of $2,470,000.00, plus
original issue premium of $40,677.00, less underwriter's discount of $17,043.00), plus accrued
interest to date of delivery, if any, for Series 2016A Bonds bearing interest as follows:
Year
Interest Rate
Year
Interest Rate
2017
2.000%
2021
2.000%
2018
2.000
2022
2.000
2019
2.000
2023
2.000
2020
2.000
2.02. Purchase Contract. The actions of the President and the Executive Director to
execute a contract with the Purchaser on behalf of the Authority are hereby ratified and approved.
2.02. Terms and Principal Amounts of the Series 2016A Bonds. The Authority will
forthwith issue and sell the Series 2016A Bonds in the total principal amount of $2,470,000,
originally dated January 7, 2016, in the denomination of $5,000 each or any integral multiple
thereof, numbered No. R -1, upward, bearing interest as above set forth, and maturing serially on
February 1, in the years and amounts as follows:
Year
Amount
Year
Amount
2017
$325,000 2021 $360,000
2018
340,000 2022 370,000
2019
350,000 2023 375,000
2020
350,000
2.03. Redemption.
(a) Optional Redemption. The Series 2016A Bonds are not subject to
optional redemption prior to maturity.
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(b) Extraordinary Redemption. The Series 2016A Bonds are subject to
extraordinary redemption, at the option of the Authority, on any business day, in whole or
in part, at a redemption price equal to par plus accrued interest to the redemption date,
upon the happening of certain events of damage to or destruction or condemnation of the
Site or the Fire Facilities or change of law rendering the Lease unenforceable or
impossible of performance, as more fully described in the Indenture and the Lease.
2.04. Execution, Authentication and Delivery. The Series 2016A Bonds, substantially
in the form provided in the Indenture, will be prepared under the direction of the Authority staff
and executed on behalf of the Authority by the signatures of the President and the Executive
Director, provided that all signatures may be printed, engraved or lithographed facsimiles of the
originals. Notwithstanding such execution, a Series 2016A Bond will not be valid or obligatory
for any purpose or entitled to any security or benefit under this resolution or the Indenture unless
and until a certificate of authentication on the Series 2016A Bond has been duly executed by the
manual signature of an authorized representative of the Trustee. When the Series 2016A Bonds
have been so prepared, executed and authenticated, the Authority will deliver the same to The
Depositary Trust Company, New York, New York, on behalf of the Purchaser, upon payment of
the purchase price, and the Purchaser is not, obligated to see to the application of the purchase
price.
Section 3. Approval and Execution of Documents. The Third Amendment to Ground
Lease, the Third Amendment to Lease, the Third Supplemental Indenture, and the Third
Supplemental Assignment are hereby approved. The President and the Executive Director are
authorized and directed to execute and deliver the Third Amendment to Ground Lease, the Third
Amendment to Lease, the Third Supplemental Indenture, and the Third Supplemental
Assignment on behalf of the Authority, substantially in the forms now on file, but with all such
changes therein as shall be approved by the officers executing the same, which approval shall be
conclusively evidenced by the execution thereof. Copies of all of the transaction documents
shall be delivered, filed and recorded as provided therein. The President and the Executive
Director are also authorized and directed to execute such other instruments as may be required to
give effect to the transactions herein contemplated.
Section 4. Payment; Security; Pledges and Covenants. The Series 2016A Bonds are
payable solely from the Lease Payments to be made by the City under the Lease and by the
District under the Sublease and from other moneys realized by the Trustee after default or
termination of the Lease by the City as provided therein. No property or funds of the Authority,
other than the property pledged pursuant to the Indenture and assigned to the Trustee pursuant to
the Assignment, is pledged to the payment of the Series 2016A Bonds.
Section 5. Refunding Findings; Redemption of Series 2007A Bonds.
5.01. Reduction of Debt Service Cost. It is hereby found and determined that based
upon information presently available from the Authority's municipal advisor, the issuance of the
Series 2016A Bonds is necessary and desirable for the reduction of debt service cost to the
Authority, the City, and the District.
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5.03. Redemption of Series 2007A Bonds. The Series 2007A Bonds maturing on.
February 1, 2017 and thereafter will be redeemed and prepaid on February 15, 2016. The Series
2007A Bonds will be redeemed and prepaid in accordance with their terms and in accordance
with. the terms and conditions set forth in EXHIBIT A attached hereto. The Trustee, as trustee for
the Series 2007A Bonds, is authorized and directed to send a copy of the Notice of Call for
Redemption to each registered holder of the Series 2007A Bonds.
Section 6. Authentication of Transcript; Issuance Costs.
6.01. Authority Proceedings and Records. The officers of the Authority are authorized
and directed to prepare and furnish to the Purchaser and to the attorneys approving the Series
2016A Bonds, certified copies of proceedings and records of the Authority relating to the Series
2016A Bonds and such other certificates, affidavits and transcripts as may be required to show
the facts within their knowledge or as shown by the books and records in their custody and under
their control, relating to the validity and marketability of the Series 2016A Bonds and such
instruments, including any heretofore furnished, may be deemed representations of the Authority
as to the facts stated therein.
6.02. Certification as to Official Statement. The President and the Executive Director are
authorized and directed to certify that they have examined the Official Statement prepared and
circulated in connection with the issuance and sale of the Series 2016A Bonds and that to the best of
their knowledge and belief the Official Statement is a complete and accurate representation of the
facts and representations made therein as of the date of the Official Statement.
6.03. Other Certificates. The President and the Executive Director are hereby
authorized and directed to furnish to the Purchaser at the closing such certificates as are required
as a condition of sale. Unless litigation shall have been commenced and. be pending questioning
the Series 2016A Bonds or the organization of the Authority or incumbency of its officers, at the
closing the President and the Executive Director shall also execute and deliver to the Purchaser a
suitable certificate as to absence of material litigation, and the Executive Director shall also
execute and deliver a certificate as to payment for and delivery of the Series 2016A Bonds.
Section 7. Tax Covenants.
7.01. Tax- Exempt Bonds. The Authority covenants and agrees with the holders from
time to time of the Series 2016A Bonds that it will not take or permit to be taken by any of its
officers, employees or agents any action which would cause the interest on the Series 2016A
Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the
"Code "), and the Treasury Regulations promulgated thereunder, in effect at the time of such
actions, and that it will take or cause its officers, employees or agents to take, all affirmative
action within its power that may be necessary to ensure that such interest will not become subject
to taxation under the Code and applicable Treasury Regulations, as presently existing or as
hereafter amended and made applicable to the Series 2016A Bonds,
7.02. Rebate. The Authority will comply with requirements necessary under the Code
to establish and maintain the exclusion from gross income of the interest on the Series 2016A
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Bonds 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 Series 2016A Bonds.
7.03. Not Private Activity Bonds. The Authority further covenants not to use the
proceeds of the Series 2016A Bonds or to cause or permit them or any of them to be used, in
such a manner as to cause the Series 2016A Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code.
7.04. Qualified Tax - Exempt Obligations. In order to qualify the Series 2016A Bonds
as "qualified tax- exempt obligations" within the meaning of Section 265(b)(3) of the Code, the
Authority makes the following factual statements and representations:
(a) the Series 2016A Bonds are not "private activity bonds" as defined in
Section 141 of the Code;
(b) the Authority hereby designates the Series 2016A Bonds as "qualified
tax - exempt obligations" for purposes of Section 265(b)(3) of the Code;
(c) the reasonably anticipated amount of tax - exempt obligations (other than
any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by
the Authority (and all subordinate entities of the City) during calendar year 2016 will. not
exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the Authority during
calendar year 2016 have been designated for purposes of Section 265(b)(3) of the Code.
7.05. Procedural Requirements. The Authority will use its best efforts to comply with
any federal procedural requirements which may apply in order to effectuate the designations
made by this section.
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$4,130,000
SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY
PUBLIC SAFETY FIRE FACILITY LEASE REVENUE
CROSSOVER REFUNDING BONDS
SERIES 2007A
(CITY OF SHOREWOOD, MINNESOTA LEASE OBLIGATION)
NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Shorewood
Economic Development Authority (the "Authority "), there have been called for redemption and
prepayment on
February 15, 2016
all outstanding bonds of the Authority designated as the Public Safety Fire Facility Lease Revenue
Crossover Refunding Bonds, Series 2007A (City of Shorewood, Minnesota Lease Obligation) (the
"Bonds "), dated as of January 1, 2007, having stated maturity dates of February 1 in the years 2017
through 2023, both inclusive, totaling $2,395,000 in principal amount, and with the following CUSIP
numbers:
Year of Maturity
Amount
2017
$300,000
825228
DI-19
2018
315,000
825228
DJ5
2019
330,000
825228
DK2
2020
340,000
825228
DLO
2022
725,000
825228
DN6
2023
385,000
825228
DPI
The Bonds are being called at a price of par plus accrued interest to February 15, 2016, 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 the Trustee in the City of Saint
Paul, Minnesota, at the following address, on or before February 15, 2016:
U.S. Bank National Association
Corporate Trust Operations, 3rd Floor
P.O. Box 64111
St. Paul, MN 55164 -0111
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If by hand or overnight:
U.S. Bank National Association
60 Livingston Avenue
EP- MN -WS3C
Bond Drop Window, 1St Floor
St. Paul, MN 55107
Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of
2009, the Trustee 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 Trustee 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. December 2011), will satisfy the
requirements of this paragraph.
Dated:
BY ORDER OF THE BOARD OF COMMISSIONERS
OF THE SHOREWOOD ECONOMIC
DEVELOPMENT AUTHORITY
By /s/ Bill Jaynes
Executive Director
Shorewood Economic Development
Authority
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