91-050
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RESOLUTION NO. 50-91
RBSOLUTION AWARDING THE SALE OF $920,000 TAX
INCREMENT REVENUE BONDS OF 1991; FIXING THEIR FORM AND
SPECIFICATIONSj DIRECTING THEIR EXECUTION AND
DELIVERY; AND PROVIDING POR THEIR PAYMENT.
WHEREAS, pursuant to the provisions of Minnesota Statutes,
Sections 469.124 through 469.134, inclusive (the "Development District
Act") and Minnesota statutes, Sections 469.174 through 469.179 , inclusive
(the "Tax Increment Financing Act"), the City Council (the .Council") of
the City of Shorewood (the "City"), by Resolution No. 36-90 adopted on April
23, 1990, designated and established Development District No.1;
established Tax Increment Financing Distr ict No. 1 (the WDistr lct If)
located within Development District No. 11 and approved and adopted the
Development District Program for Development District No. 1 Including Tax
Increment Financing Plan for Tax Increment Financing District No.1; and
WHEREAS, the Council approved and adopted certain modifications to
said Development District Program on March 4, 1991; and
WHEREAS, said Development District Program provides for the
issuance by the City of tax increment bonds to amortize the eligible costs
of public improvements (the "Improvements") included in the Tax Increment
Financing Plan for the District (the "Plan"); and
WHEREAS, the City Council, by Resolution No. 24-91 adopted on March
5, 1991, approved a Bond Purchase Agreement (the "Agreement") for the sale
of $920,000 of Tax Increment Revenue Bonds (the "Bonds"); and
WHEREAS, the Agreement was duly executed on March 6, 1991; and
WHEREAS, the City is authorized by Section 469.178 of the Tax
Increment Financing Act to issue revenue bonds of the City and, by
agreement, pledge tax increments and revenues received from the District
for the payment of principal of and interest on such bonds; and
Wl:tEREAS, the conditions in the Agreement, prerequisite to the sale
and purchase of the Bonds, have been met or waived.
BE IT RESOLVED, By the City Council of the City of Shorewood,
Minnesota, as follows:
1. The City of Shorewood finds, covenants and declares that the
District has been duly created as required by law, the Agreement is in full
force and effect, and the terms and conditions of the Agreement are
incorporated herein by reference.
2. The City of Shorewood shall forthwith issue and sell its Tax
Increment Revenue Bonds of 1991 (the "Bonds") in the principal amount of
$920,000, dated Ma.y 30, 1991. The pr inted, fully regia tered bonds, shall
be in the denomination of $5,000 each or: any higher multiple thereof, and
shall be numbered 1 upward in ascending order of authentication. The Bonds
shall mature on February 1, 2000, and shall bear interest at the rate of
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9.00% per annum, payable solely at matur i ty or upon redemption of the Bonds.
Interest shall be compounded on each February 1 and August 1, commencing
February 1, 1992 until paid, and shall be computed on the basis of a 360-day
year of twelve 30-day months. The Accretion Table attached hereto as
Exhibit A sets forth the accreted value of each $5,000 denomination as of
the dates therein specified. At maturity, unredeemed Bonds shall be
retired at a price equal to the lesser of the principal amount thereof plus
accrued interest or the available tax increments in the Tax Increment Bond
Sinking Fund, pledged under paragraph 15 of this Resolution. To the extent
that ta){ increment is from time to time available in the Tax Increment Bond
Sinking Fund in an amount suff icient to redeem one or more Bonds, the Bonds
will be subject to mandatory redemption and prepayment at any time upon 10
days wr i tten notice to the registered owners, in whole or in part, at a pr ice
equal to the pr incipal amount thereof to be redeemed plus accrued interest
to the date of redemption. Redemption shall be in ascending order of
serial numbers, beginning with Bond Number 1.
3. Both pr incipal of and interest on the Bonds shall be payable at
the City of Shorewood.
4. The Bonds shall be in substantially the following form:
(Face of the Bonds)
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COONTY OF HENNEPIN
CITY OF SBOREWOOD
TAX INCREMENT REVENUE BOND OF 1991
Rate
Maturity
February 1, 2000
Date of Original Issue
9.00%
May 30, 1991
KNOW ALL MEN BY THESE PRESENTS that the Ci ty of Shorewood, Hennepin
County, Minnesota, a municipal corporation, (the Ci ty), acknowledges
itself to be indebted and, for value received, hereby promises to pay, but
solely from the source described below, to
or registered assigns, the principal sum of FIVE THOUSAND DOLLARS, on the
maturity date specified above, with interest: thereon from the date hereof
at the annual rate specified above, payable at maturity. Interest is
compounded on each February 1 and August 1, commencing February l, 1992, and
is computed on the basis of a year with 12 months of 30 days. Upon
presentation and surrender hereof at the principal office of the Bond
Registrar hereinafter designated, the interest hereon and the principal
hereof are payable in lawful money of the Uni ted States of Amer ica by Check
or draft of the City of Shorewood, in ShorewoOd, Minnesota, as Bond
Registrar, Transfer Agent and Paying Agent {the Bond Registrar}, or its
successor designated under the Resolution described herein. The accreted
value for each $5,000 of pr incipal on each date of compounding is shown on
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the Accreted Value Table on the reverse side hereof. Notwithstanding the
foregoing, Bonds not redeemed prior to maturity shall be redeemable at
. maturity at a price equal to the lesser of the principal amount hereof plus
accrued interest or the available tax increments in the Tax Increment Bond
Sinking Fund pledged in the Resolution.
Additional provisions of this Bond are contained on the reverse
hereof and such provisions shall for all purposes have the same effect as
though fully set forth hereon.
This Bond shall not be valid or become obligatory for any purpose or
be entitled to any security or benefit under the Resolution until the
Certificate of Authentication hereon shall have been executed by the Bond
Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Shorewood, Hennepin County,
Minnesota I by its Ci ty Counci 1, has caused this Bond to be executed by the
facsimile signature of the Mayor and the manual signature of the City
Clerk/Administrator, and has caused this Bond to be dated as of the date set
forth below.
Dated
Ci ty- Clerk!AdinlfiIstr'ator- --
(Facsimile Signature)
Mayor
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CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution
mentioned within.
City of Shorewood
as Bond Registrar and
Paying Agent
By
Authorized Representative
(Reverse of the Bonds)
This Bond is one of an issue in the aggregate principal amount of
$920,000 (the Bonds) , all of like date and tenor except as to ser ial number
and denomination, issued pursuant to a resolution adopted by the City
Council on May 28, 1991, (the Resolution), to provide funds to defray the
expenses incurred and to be incurred in financing public improvement costs
of a Ta~ Increment Project, pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota
Statutes, Sections 469.174 through 469.179. This Bond is payable solely
from ta~ increments resulting from tax levies upon the increased value of
property within said District as pledged in the Resolution. Neither the
Ci ty nor any Council member, officer, employee or agent of the Ci ty, nor any
person executing the Bonds, shall be liable personally on the Bonds by
. reason of thei r issuance. The Bonds shall not be payable from nor charged
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upon any funds other than the revenues pledged to the payment thereof
pursuant to the Resolution, nor shall the City be subject to any liability
thereon or have the powers to obligate itself to pay the Bonds from funds
other than the revenues so pledged, and no owner or owners of the Bonds shall
ever have the right to compel any ekercise of any taxing power of the City or
any other public body, other than as pledged under the Resolution, to pay
the principal of or interest on the Bonds, nOr to enforce payment thereof
against any property of the City or any other public body not pledged
pursuant to the Resolution. The Bonds are issuable only as fully
registered bonds, in denominations of $5,000 or any multiple thereof, of
single rnatur i ties. To the extent tha t tax increment is from time to time
available in the Tak Increment Bond Sinking Fund to redeem one or more
Bonds, the Bonds are subject to mandatory call, in whole or 1n part, by the
City for prior redemption and prepayment at any time upon 10 days written
notice to the registered owners, at par plus accrued interest as provided in
the Resolution. Redemption shall be in ascending order of ser ial numbers,
beginning with Bond Number 1.
As provided in the Resolution and subject to certain limitations
set forth therein, this Bond is transferable upon the books of the City at
the pr incipal office of the Bond Registrar, by the registered owner hereof
1n person or by his attorney duly authorized in writing upon surrender
hereof together with a written instrument of transfer satisfactory to the
Bond Registrar, duly executed by the registered owner Or his attorney; and
may also be surrendered in exchange for Bonds of other authorized
denominations. Upon such transfer or exchange, the City will cause a new
Bond or Bonds to be issued in the name 'of the transferee Or registered owner,
of the same aggregate principal amount, bearing interest at the same rate
and maturing on the same date, subject to reimbursement foi: any tak, fee or
governmental charge required to be paid with respect to such transfer or
exchange.
Notwi thstanding the foregoing, this Bond shall not be transferable
unless accompanied by a disclosure statement signed by the registered owner
and the transferee, to be filed with the City, wherein the transferee
acknowledges having been fully informed as to the speculative nature of
this Bond, and the high risk of loss associated with ownership hereof,
including the possibility that no part of the interest hereon or principal
hereof will ever be paid.
The City and the Bond Registrar may deem and treat the person in
whose name this Bond is registered as the absolute o~ner hereof, whether
this Bond is overdue or not, for the purpose of receiving payment and for all
other purposes, and neither the City nor the Bond Registrar shall be
affected by any notice to the contrary.
TABLE OF ACCRETED VAIIUES
Date
Value
05/30/91
02/01/92
08/01/92
5,000.00
5,303.43
5,542.18
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02/01/93
08/01/93
02/01/94
08/01/94
02/01/95
08/01/95
02/01/96
08/01/96
02/01/97
08/01/97
02/01/98
08/01/98 .
02/01/99
08/01/99
02/01/2000
5,791.56
6,052.19
6,324.52
6,609.07
6,906.49
7,217.32
7,542.10
7,881.46
8,236.16
8,606.84
8,994.14
9,398.82
9,821.74
10,263.74
10,725.70
The following abbreviations, when used in the inscription on the
face of this Bond, shall be construed as though they were written out in full
according to the applicable laws or regulations:
TEN COM - as tenants
in common
ONIF TRANSFERS MIN ACT...Custodian....
(Cust) (Minor)
TEN ENT - as tenants
by the entireties
JT TEN - as joint tenants
with right of
survivorship and
not as tenants
in common
under Uniform Transfers to
Minors
Act . . . . .
. . . . . . .
(State)
list.
Additional abbreviations may also be used though not in the above
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and
transfers unto
the within Bond and all rights thereunder, and does hereby irrevocably
constitute and appoint
attorney to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
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Dated:___________________
Signature Guaranteed:
NOTICE-;--The - assignor's signature to
this assignment must correspond with
the name as it appears upon the face of
the within Bond in every particular,
without alteration or any change
whatever.
--- - - - - --.... - - ---
Signature (s) must be guaranteed by a national bank or trust company or by a
brokerage firm having a membership in one of the major stock exchanges.
The Bond Registrar will not effect transfer of this Bond unless the
information concerning the assignee requested below is provided;
Name and Address
- .... _.. _ ...._.a.-_~___._ _._,. _..____________.___._ _ ___
---.-----.---- - - - -... _.' -- ...--.-----.-----.--
(Include-information for-ail-joint owners
if the Bond is held by joint acc6unt.)
PLEASE INSERT SOCIAL SECURITY NUMBER OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
--~-----....- -.... -- --.--.---.-.--.- -..... -- ---
5. The Bonds shall be issuable only in fully registered form.
The interest and pr incipal amount thereof shall be payable by check or draft
issued by the Registrar described herein.
6. Interest Payment Dates. The interest on the Bonds shall be
payable solely at maturity or upon redemption.
7. Registration. The City shall appoint and shall maintain a
bond registrar, transfer agent, and paying agent (the Registrar). The
effect of registration and the rights and duties of the City and the
Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at
its pr incipal corporate trust office a bond register
in which the Registrar shall provide for the
registration of ownership of Bonds and the
registration of transfers and exchanges of Bonds
entitled to be registered, transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for
transfer of any Bond duly endorsed by the registered
o\Yner thereof or accompanied by a written instrument
of transfer, in form satisfactory to the Registrar,
duly executed by the registered owner in wr i ting, the
Registrar shall authenticate and deliver I in the name
of the designated transferee or transferees, one or
mOre new Bonds of a like aggregate principal amount
and maturity, as requested by the transferor. The
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Registrar may, however, close the books for
registration of any transfer after the fifteenth day
of the month preceding each interest payment date and
until such interest payment date.
Notwithstanding the foregoing, no Bond
shall be transferable unless accompanied by a
disclosure statement signed by the registered owner
and the transferee, to be filed with the City, wherein
the transferee acknowledges having been fully
informed as to the speculati ve na ture of the Bonds and
the high risk of loss associated with ownership
thereof, including the possibility that no part of the
interest thereon or principal thereof will ever be
paid.
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(e) Exchange of Bonds. Whenever any Bond
is sur rendered by the registered owner for exchange,
the Registrar shall authenticate and deliver one or
more new Bonds of a like aggregate principal amount
and matur i ty, as requested by the registered owner or
the owner's attorney duly authorized in writing.
(d) Cancellation. All Bonds sur rendered
upon any transfer. or exchange shall be promptly
cancelled by the Registrar and thereafter disposed of
as directed by the City.
(e) Improper or Unauthorized Transfer.
When any Bond is presented to the Registrar for
transfer; the Registrar may refuse to transfer the
same until it is satisfied that the endorsement on
such Bond or separate instrument of transfer is
legally authorized. The Registrar shall incur no
liability for its refusal, in good faith, to make
transfers which! t, in its judgment, deems improper or
unauthorized.
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(f) Persons Deemed Owners. The City and
the Registrar may treat the person in whose name any
Bond is at any time registered in the bond register as
the absolute owner of such Bond, whether such Bond
shall be overdue or not, for the purpose of receiving
payment of, or on account of, the principal of and
interest on such Bond and for all other purposes, and
all such payments so made to any such registered owner
or upon the owner's order shall be valid and effectual
to satisfy and discharge the liability of the City
upon such Bond to the extent of the sum or sums so paid.
(9) Taxes, Fees and Charges. For every
transfer or exchange of Bonds, the Registrar may
impose a charge upon the owner thereof sufficient to
reimburse the Registrar for any tax; fee or other
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governmental charge other than fees of the City,
required to be paid with respect to such transfer or
exchange.
(h) Mutilated, Lost, Stolen or Destroyed
Bonds. In case any Bond shall become mutilated or be
lost, stolen or destroyed, the Registrar shall
deliver a new Bond of like amount, number, maturity
date and tenor in exchange and substitution for and
upon cancellation of any such mutilated Bond or in
lieu of and in substitution for any such Bond lost,
stolen or destroyed, upon the payment of the
reasonable expenses and charges of the Registrar in
connection therewith; and, in the case of a Bond lost,
stolen or destroyed, upon filing with the Registrar of
evidence satisfactory to it that such Bond was lost,
stolen or destroyed, and of the ownership thereof, and
upon furnishing to the Registrar of an appropriate
bond or indemnity in form, substance and amount
satisfactory to it, in which bond the City and the
Registrar shall be named as obligees, all pursuant to
the provisions of Minnesota Statutes, Sections 475.69
and 475.70. All Bonds so surrendered to the
Regi~trar shall be cancelled by it and evidence of
such cancellation shall be gi ven to the Ci ty. If the
mutilated, lost, stolen or destroyed Bond has already
ruatured or been called for redemption in accordance
with its terms, it shall not be necessary to issue a
new Bond prior to payment.
8. Appointment of Initial Registrar. The City hereby appoints
itself as the initial Registrar. The City may, at any time, appoint a
successor Registrar in which case the Mayor and the City
Clerk/Administrator are authorized to execute and deliver, on behalf of the
City, a contract with such successor as Registrar. Upon merger or
consolidation of the Registrar with another corporation, if the resulting
corporation is a bank or trust company authorized by law to conduct such
business, such corporation shall be authorized to act as successor
Registrar. The Ci ty agrees to pay the reasonable and customary charges of
the Re9istrar for the services per formed. The Ci ty reserves the right to
remove any Registrar upon thirty (30) days' notice and upon the appointment
of a successor Regist(ar, in which event the predecessor Registrar shall
deliver all cash and Bonds in its possession to the successor Registrar and
shall deli ver the bond register to the successor Registrar. On or before
each principal or interest due date, without further order of this city, the
City Treasurer shall transmit to the Registrar, from the Tax Increment
Bonds Sinking Fund described in paragraph 15 hereof, monies sufficient for
the payment of all principal and interest then due.
9. Preparation and Delivery. The Bonds 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 the City
Clerk/Administrator, provided that the Mayor and Clerk/Administrator's
signatures may be facsimiles thereof. In case any officer whose
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signature, or a facsimile of whose signature, shall appear on the Bonds
shall cease to be such officer before the delivery of any Bond, such
signature or facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if such officer had remained in office until delivery.
Notwithstanding such execution, no Bond shall be valid or obligatory for
any purpose or entitled to any security or benefit under this resolution
unless and until a certificate of authentication on such Bond has been duly
executed by the manual signature of an authorized representative of the
Registrar. Certificates of authentication on different bonds need not be
signed by the same representative of the Registrar. The executed
certificate of authentication on each bond shall be conclusive evidence
that it has been authenticated and delivered under this resolution. When
the Bonds have been so executed and authenticated, they shall be delivered
by the Clerk/Administrator to the Purchaser upon payment of the purchase
price, and the Purchaser shall not be obligated to see to the application of
the purchase price.
10. The Clerk/Administrator shall cause the proceeds of the Bonds
to be applied solely for the financing of the Improvements descr ibed in the
Agreement. Upon completion of construction of the Improvements referred
to herein and in the Agreement and payment of all costs authorized under the
Agreement, excess Bond proceeds then remaining, if any, shall be used to
redeem and prepay the Bonds in the manner provided in this Resolution and in
the Agreement. If, for any reason, the City has not obtained Minnesota
Department of Transportation approval of the Improvements by December 31,
1991, the Bond proceeds shall be used to redeem and prepay the Bonds in the
manner provided in this Resolution, provided, however, tha t interest on the
Bonds redeemed shall not exceed interest earned by the City on the Bond
proceeds and also that the Ci ty shall be enti tIed to retain up to $150,000 of
the Bond proceeds to cover costs of administration, additional
administrative costs, engineering, bond issuance and contingency,
referred to in the Agreement, to the extent that said costs have been
incurred by the City. Any Bonds not so redeemed shall remain outstanding
and subject to payment and redemption as provided in this Resolution.
11. The Bonds will be payable solely from tax increments
collected from the Distr ict. The City Clerk is directed to file a
certified copy of this resolution with the County Auditor of Hennepin
County and obtain the certificate required by Minnesota statutes, Section
475.63.
12. When all of the Bonds have been discharged as provided in this
resolution, all pledges, covenants and other rights granted by this
resolution to the holders of the Bonds shall cease. The Ci ty may discharge
its obligations with respect to any Bonds which are due on any date by
irrevocably depositing with the Registrar on or before that date a sum
sufficient for the payment of principal and interest thereof in full; or, if
any Bond should not be paid when due, it may nevertheless be discharged by
depositing with the Registrar a sum sufficient for the payment thereof in
full wi th interest accrued to the date of such deposi t. The Ci ty may also
at any time discharge its obligations with respect to any Bonds, subject to
the provisions of law now or hereafter authorizing and regulating such
action, by depositing irrevocably in escrow, with a bank qualified by law as
an escrow agent for this purpose, cash or securities which are general
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general obligations of the United States or securities of United States
agencies which are authorized by law to be so deposited, bearin9 interest
payable at such time and at such rates and maturing on such dates as shall be
required, without reinvestment, to pay all principal and interest to become
due hereon to maturity.
13. The City covenants and agrees with the holders from time to
time of the 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 Bonds to become subject to taxation under the Internal Revenue Code of
1986, as amended (the Code), and the Treasury Regulations promulgated
thereunder (the Regulations), and covenants to take any and all actions
within its powers to ensure that the interest on the Bonds will not become
subject to taxation under the Code and the Regulations. The Bonds will be
designated by the Ci ty as nqualif ied tax-exempt obligations" for purposes
of the Tax Reform Act of 1986. It is also determined that the Bonds are not
arbitrage bonds and are not private activity bonds.
14. The Ci ty has agreed to furnish to the purchaser the approving
legal opinion of Messrs. Wurst, Pearson, Hamilton, Larson and Underwood, of
Minneapolis, Minnesota, and such opinion is hereby requested. The
Clerk/Adminisrator shall obtain a copy of sai.d approving legal opinion,
which shall be complete ekcept as to dating thereof, and shall cause said
opinion to be printed on each Bond, together with a certificate to be si9ned
by the facsimile signature of the Clerk/Administrator in substantially the
following form: .
I hereby certi fy that the foregoing is a full r
true and correct copy of the legal opinion executed by
the above named attorneys, except as to the dating
thereof, which opinion has been handed to me for
filing in my office pI ior to the time of bond deli very.
City Clerk/Administrator
City of Shorewood
At the time of delivery, the Clerk/Administrator shall prepare a similar
separate certificate, and the Clerk/Administrator is hereby authorized and
directed to execute such certificate in the name of the City upon receipt of
such opinion and to file the opinion in the City offices.
15. The 'Bonds issued hereunder shall be payable from the Tax
Increment Revenue Bonds of 1991 Fund (the RTak Increment Bonds Sinking
Fund") created by this resolution adopted May 28, 1991, and the City hereby
pledges to said fund all tax increments from the District, and covenants and
agrees with the holders from time to time of the Bonds that said tax
increments shall be used solely for such purposes until all of the Bonds are
redeemed or retired. Tax increments, if any, avai lable pr ior to matur i ty
shall be used to redeem and prepay the Bonds in the manner provided in this
Resolution.
16. The officers of the City are hereby authorized and directed to
prepare and furnish to the purchaser of the Bonds and to the attorneys
approving the same, certified copies of proceedings and records of the Ci ty
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relating to the Bonds and to the financial condition and affairs of the
City, and such other certificates, affidavits and transcripts as may be
required to show the facts wi thin 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 Bonds and such instruments, including any
heretofore furnished, shall be deemed representations of the City as to the
facts stated therein.
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Exhibit A
TABLE OF ACCRETED VALUES
Date
Value
05/30/91
02/01/92
08/01/92
02/01/93
08/01/93
02/01/94
08/01/94
02/01/95
08/01/95
02/01/96
08/01/96
02/01/97
08/01/97
02/01/98
08/01/98
02/01/99
08/01/99
02/01/2000
5,000.00
5,303.43
5,542.18
5,791.56
6,052.19
6,324.52
6,609.07
6,906.49
7,217.32
7,542.10
7,881.46
8,236.16
8,606.84
8,994.14
9,398.82
9,821.74
10,263.74
10,725.70
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Councilmember stover introduced the foregoing
resolution and moved its adoption.
The motion for the adoption was duly seconded by
Councilmember Gagne, and upon vote being taken thereon, the
following voted in favor thereof: Brancel, Gagne, and stover,
and the following voted against: Lewis and Daugherty
whereupon said resolution was declared duly passed and adopted.
Approved and signed this 28th day of May, 1991.
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Mayor