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EDA Res 15-003SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 15 -003 RESOLUTION RATIFYING THE SALE OF PUBLIC SAFETY POLICE FACILITY LEASE REVENUE REFUNDING BONDS, SERIES 2016B (CITY OF SHOREWOOD, MINNESOTA LEASE OBLIGATION); AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY 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 "Police Facilities "), to the City pursuant to a Lease Purchase Agreement (West Side Police Facilities), dated as of September 1, 2002 (the "Original Lease "), as amended by a First Amendment to Lease Purchase Agreement (West Side Police Facilities), dated as of April 15, 2003 (the "First Amendment to Lease "), and a Second Amendment to Lease Purchase Agreement (West Side Police 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 Police Facilities), dated as of September I, 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 Police Facility Lease Crossover Refunding Revenue Bonds, Series 2007B (City of Shorewood, Minnesota Lease Obligation) (the "Series 2007B Bonds "), in the original aggregate principal amount of $4,285,000. Proceeds of the Series 2007B Bonds were used to achieve the advance crossover refunding of the Authority's (i) Public Safety Police Facility Lease Revenue Bonds, Series 2002B (City of Shorewood, Minnesota Lease Obligation) (the "Series 2002B Bonds "), issued in the original aggregate principal amount of $4,025,000; and (ii) Public Safety Police Facility Lease Revenue Bonds, Series 2003B (City of Shorewood, Minnesota Lease Obligation) Error! Unknown document property name. (the "Series 2003B Bonds "), issued in the original aggregate principal amount of $1,220,000. Proceeds of the Series 2002B Bonds and the Series 2003B Bonds financed a portion of the cost of the acquisition, construction, and equipping of the Police Facilities. (e) The Authority has determined to redeem and prepay the outstanding Series 2007B Bonds through the issuance of its Public Safety Police Facility Lease Revenue Refunding Bonds, Series 2016E (City of Shorewood, Mimnesota Lease Obligation) (the "Series 2016B Bonds "), in the original aggregate principal amount of $2,565,000 (f) The Series 2016B 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 2016B 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 Police 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 Assignment, 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 2016B Bonds. G) 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 2016B Bonds, subject to ratification by the Board. Section 2. Sale of Series 2016B Bonds. 2.01. Award to the Purchaser and Interest Rates. The proposal of Northland Securities, Inc., Minneapolis, Minnesota (the "Purchaser "), to purchase the Series 2016B 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 2016B Error! Unknown document property name. 4 Bonds at a price of $2,589,513.70 (par amount of $2,565,000.00, plus original issue premium of $42,212.20, less underwriter's discount of $17,698.50), plus accrued interest to date of delivery, if any, for Series 2016B 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 2016B Bonds. The Authority will forthwith issue and sell the Series 2016B Bonds in the total principal amount of $2,565,000, 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 $340,000 2021 $370,000 2018 350,000 2022 385,000 2019 360,000 2023 390,000 2020 370,000 2.03. Redemption. (a) Optional Redemption. The Series 2016B Bonds are not subject to optional redemption prior to maturity. (b) Extraordinary Redemption. The Series 2016B 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 Police Facilities or change of law rendering the Lease unenforceable or impossible of performance, as more fully described in the hndenture and the Lease. 2.04. Execution, Authentication and. Delivery. The Series 2016B 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 2016B 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 2016B Bond has been duly executed by the manual signature of an authorized representative of the Trustee. When the Series 2016B Bonds have been so prepared, executed and authenticated, the Authority will deliver the same to The Depository 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. Error! Unknown document property name. 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 2016B 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 2016E Bonds. Section 5. Refunding; Findings; Redemption of Series 2007B 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 2016B Bonds is necessary and desirable for the reduction of debt service cost to the Authority, the City, and the District. 5.03. Redemption of Series 2007B Bonds. The Series 2007B Bonds maturing on February 1, 2017 and thereafter will be redeemed and prepaid on February 15, 2016. The Series 2007B 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 2007B Bonds, is authorized and directed to send a copy of the Notice of Call for Redemption to each registered holder of the Series 2007B 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 2016B Bonds, certified copies of proceedings and records of the Authority relating to the Series 2016B 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 2016E 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 2016B Bonds and that to the best of then 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 2016B Bonds or the Error? Unknown document property name. 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 2016B 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 2016B 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 2016B 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 2016B 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 2016B 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 2016B Bonds. 7.03. Not Private Activity Bonds. The Authority further covenants not to use the proceeds of the Series 2016B Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Series 2016B 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 2016B 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 2016B Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the Authority hereby designates the Series 2016B 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. Error! Unknown document: property name. 7 Approved by the Board of Commissioners of the Shorewood Economic Development Authority this 14th day of December, 2015. Presid ATTEST: Se ret ry Error! Unknown document property name. EXHIBIT A kIL611ralme 0. to] ill I $4,285,000 SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY PUBLIC SAFETY POLICE FACILITY LEASE REVENUE CROSSOVER REFUNDING BONDS SERIES 20076 (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 Police Facility Lease Revenue Crossover Refunding Bonds, Series 2007B (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 $2,485,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP 2017 $315,000 82522R BA4 2018 325,000 82522R BB2 2019 340,000 82522R BCO 2020 355,000 82522R BD8 2022 750,000 82522R BF3 2023 400,000 82522R BG1 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: If by mail: U.S. Bank National Association Corporate Trust Operations, 3`d Floor P.O. Box 64111 St. Paul, MN 55164 -0111 Error! Unknown document property name. If by hand or overnight: U.S. Bank National Association 60 Livingston Avenue EP -M N -WS3C Bond Drop Window, 1" 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 Joynes Executive Director Shorewood Economic Development Authority Error! Unknown document property name. 2