06-003 EDA
SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 06-003
A RESOLUTION AWARDING THE SALE OF PUBLIC
SAFETY FIRE FACILITY LEASE REVENUE CROSSOVER
REFUNDING BONDS, SERIES 2007B (CITY OF
SHOREWOOD, MINNESOTA LEASE OBLIGATION)
BE IT RESOLVED By the board of commissioners of the Shorewood Economic
Development Authority (the "Authority"), as follows:
Section 1.
Recitals.
1.01. The City of Shorewood, Mim1esota (the "City") is authorized by Minnesota
Statutes, Section 465.71, as amended, to acquire real and personal property under lease-purchase
agreements.
1.02. The Authority has agreed with the Excelsior Fire District ("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 "Ground Lease"), as amended by a First
Amendment to Ground Lease 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, and the Authority will lease such property, together with the buildings,
structures or improvements now or hereafter located thereon, to the City pursuant to a Lease
Purchase Agreement (West Side Police Facilities) dated as of September 1, 2002 (the "Lease"),
as amended by a First Amendment to Lease-Purchase Agreement dated as of April 15, 2003 (the
"First Amendment to Lease"), as further amended by a Second Amendment to Lease-Purchase
Agreement dated as of January 1,2007 (the "Second Amendment to Lease"). Hereafter the term
"Lease" includes the Amendment to Lease and the Second Amendment to Lease, unless the
context requires otherwise.
1.03. With the Authority's consent, the City has entered into a Sublease Agreement
(West Side Police Facilities) with the Department dated as of September 1, 2002 (the "Sublease
Agreement"), under which the Department undertakes the City's obligations under the Lease.
1.04. Pursuant to the Trust Indenture dated as of September 1, 2002 (the "Indenture")
between the Authority and U.S. Bank National Association, as trustee (the "Trustee"), as
modified by a First Supplemental Trust Indenture dated as of April 15, 2003 (the "First
Supplemental Indenture"), as further modified by a Second Supplemental Trust Indenture dated
as of January 1,2007 (the "Second Supplemental Indenture"), between the Authority and the
Trustee, the Authority will issue its Public Safety Fire Facility Lease Crossover Refunding
Revenue Bonds, Series 2007B (City of Shorewood, Minnesota Lease Obligation) (the "Bonds")
in an aggregate principal amount of $4,285,000. Hereafter the term "Indenture" includes the
Supplemental Indenture and the Second Supplemental Indenture unless the context requires
otherwise.
1.05 (a) Pursuant to the original Indenture, the Authority has previously issued its
$4,025,000 Public Safety Police Facility Lease Revenue Bonds, Series 2002B (City of
Shorewood, Minnesota Lease Obligation) (the "Series 2002B Bonds") in order to pay a portion
of the cost of acquisition, construction and equipping of the Facilities described in the Lease.
(b) Pursuant to the First Supplemental Indenture, the Authority has previously issued its
$1,220,000 Public Safety Police Facility Lease Revenue Bonds, Series 2003B (City of
Shorewood, Minnesota Lease Obligation) (the "Series 2003B Bonds") in order to pay a portion
of the cost of acquisition, construction and equipping of the Facilities described in the Lease.
1.06. The Bonds are being issued under the Indenture as Additional Bonds for the
purpose of refunding in advance of maturity the outstanding Series 2002B Bonds and
Series 2003B Bonds. The Series 2002B Bonds and the Series 2003B Bonds are collectively
referred to herein as the "Refunded Bonds."
1.07. Pursuant to an Assignment and Security Agreement dated as of
September I, 2002 (the "Assignment) as modified by a First Supplemental Assignment and
Security Agreement dated as of April 15, 2003 (the "First Supplemental Assignment") and a
Second Supplemental Assignment and Security Agreement dated as of January I, 2007 (the
"Second Supplemental Assignment"), the Authority assigned 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 thereunder (other than certain rights to indemnification and payment of
expenses) as security for the Series 2007B Bonds.
1.08. Proceeds of the Series 2007B Bonds will be used to pay costs of issuance of the
Bonds and to fund the escrow account established to effectuate refunding of the Refunded
Bonds, all pursuant to the Escrow Agreement (Series 2007B) between the Authority and the
Trustee, as escrow agent, dated January I, 2007 (the "Series 2007B Escrow Agreement").
1.09. Forms of the Second Amendment to Ground Lease, the Second Amendment to
Lease, the Second Supplemental Indenture, Second Supplemental Assignment, the Series 2007B
Escrow Agreement and the Official Statement for the Bonds have been prepared and submitted
to the Authority and are on file with the Authority.
Section 2.
Sale of Bonds.
2.01. The proposal of Northland Securities, Inc. (the "Purchaser") to purchase the
Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the
proposal being to purchase the Bonds at a price of $4,282,102.35 plus accrued interest to date of
delivery, for Bonds bearing interest as follows:
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Year of Interest Year of Interest
Maturity Rate Maturity Rate
2010 3.75% 2016 5.00%
2011 3.75 2017 3.85
2012 4.00 2018 3/0-
2013 4.50 2019 4.00
2014 4.50 2020 4.00
2105 4.50 2023 4.15
Term Bonds due February 1,2022 at 4.10%.
2.02. The Authority will forthwith issue and sell the Bonds in the total principal amount
of $4,285,000 originally dated January 1,2007, in the denomination of $5,000 each or any
integral multiple thereof, numbered No. R-l, upward, bearing interest as above set forth, and
which mature serially on February 1, in the years and amounts as follows (subject to redemption
and prior payment as set forth in the Indenture):
Year
Amount
Year
Amount
2010
2011
2012
2013
2014
2105
$ 180,000
240,000
255,000
260,000
275,000
290,000
2016
2017
2018
2019
2020
2023
$ 300,000
315,000
315000
340,000
355,000
400,000
Term Bonds due February 1,2022 at $750,000/
Term Bonds due February 1, 2022 are subject to Mandatory Sinking Fund Redemption
on February 1 in the years and amounts described in the Second Supplemental Trust Indenture.
2.03. Execution, Authentication and Delivery. The 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 one other officer of the
Authority, provided that all signatures may be printed, engraved or lithographed facsimiles of the
originals. Notwithstanding such execution, a 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 Bond has been duly executed by the manual signature
of an authorized representative of the Trustee. When the 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.
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Section 3. Approval and Execution of Documents. The Second Amendment to
Ground Lease, the Second Amendment to Lease, the Second Supplemental Indenture, the
Second Supplemental Assignment, and the Series 2007B Escrow Agreement described in
Section 1 are hereby approved. The President and one other officer of the Authority are
authorized and directed to execute and deliver the Second Amendment to Ground Lease, the
Second Amendment to Lease, the Second Supplemental Indenture the Second Supplemental
Assignment and the Series 2007B Escrow Agreement on behalf of the Authority, substantially in
the forms 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 other officers of the Authority 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 Bonds are payable prior
to the respective redemption dates for the Refunded Bonds solely from the funds on deposit
under the Series 2007B Escrow Agreement, and from and after such redemption dates solely
from the Lease Payments to be made by the City under the Lease and by the Department under
the Sublease Agreement 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 Bonds.
Section 5.
Refunding; Findings; Redemption of Refunded Bonds.
5.01. Reduction of Debt Service Cost. It is hereby found and determined that based
upon information presently available from the Authority's financial advisers, the issuance of the
Bonds is necessary and desirable for the reduction of debt service cost to the Authority, City and
Department.
5.03. Redemption of Refunded Bonds. The Series 2002B Bonds maturing on
February 1, 2011 and thereafter will be redeemed and prepaid on February 1, 2009. The
Series 2003A Bonds maturing on February 1, 2011 and thereafter will be redeemed and prepaid
on February 1,2010. The Refunded Bonds will be redeemed and prepaid in accordance with
their terms and in accordance with the terms and conditions set forth in the Series 2007B Escrow
Agreement. The Trustee for each of the Refunded Bonds is authorized and directed to send a
copy of the Notice of Redemption to each registered holder of each of the Refunded Bonds.
Section 6.
Authentication of Transcript; Issuance Costs.
6.01. The officers ofthe Authority are authorized and directed to prepare and furnish to
the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and
records of the Authority relating to the 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 Bonds and such instruments, including any heretofore furnished, may be deemed
representations of the Authority as to the facts stated therein.
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6.02. The preparation and distribution of the Official Statement prepared and circulated
in connection with the issuance and sale of the Bonds is hereby approved.
Section 7.
Tax Covenants.
7.01. The Authority 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, 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 Bonds.
7.02. In order to qualify the 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 Bonds are not "private activity bonds" as defined in Section 141 of the
Code;
(b) the Authority hereby designates the 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 2007 will not
exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the Authority during
calendar year 2007 have been designated for purposes of Section 265(b )(3) of the Code.
7.03. 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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Approved by the Board of Commissioners of the Shorewood Economic Development
Authority this ~ day of December, 2006
ATTEST:
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President
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