03-002 EDA
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SHOREWOOD ECONOMIC DEVELOPMENT AlITHORlTJ: ~ f Y
Hennepin County, Minnesota
RESOLUTION NO. 03-002
A RESOLUTION A WARDING THE SALE OF PUBLIC SAFETY FIRE FACILITY
LEASE REVENUE BONDS, SERIES 2003A
(CITY OF SHOREWOOD, MINNESOTA LEASE OBLIGA nON)
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, Minnesota (the "City") is authorized by Minnesota
Statutes, Section 465.71, as amended, to acquire real and pers~:mal 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 "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 Fire
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 "Amendment to Lease"). Hereafter
the term "Lease" includes the Anlendment to Lease unless the context requires otherwise.
1.03. With the Authority's consent, the City has entered into a Sublease Agreement
(West Side Fire Facilities) with the District dated as of September 1, 2002 (the "Sublease
Agreement"), under which the District 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 "Supplemental
Indenture"), between the Authority and the Trustee, the Authority will issue its Public Safety
Fire Facility Lease Revenue Bonds, Series 2003A (City of Shorewood, Minnesota Lease
Obligation) (the "Bonds") in an aggregate principal amount of $1,195,000. Hereafter the term
"Indenture" includes the Supplemental Indenture unless the context requires otherwise.
1.05. Pursuant to the Indenture, the Authority has previously issued its $3,865,000 ,
Public Safety Fire Facility Lease Revenue Bonds, Series 2002A (City of Shorewood, Minnesota
Lease Obligation) (the "Series 2002A Bonds") in order to pay a portion of the cost of
acquisition, construction and equipping of the Facilities described in the Lease.
1.06. Under the Indenture, proceeds of the=Bonds and the Series 2002A Bonds will be
used to pay additional=costs of acquisition, construction and equipping of the Facilities described
in the Lease. The Bonds are issued under the Indenture as Additional Bonds on a parity basis
with the Series 2002A Bonds.
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1.07. Pursuant to an Assignment and Security Agreement dated as of September 1,
2002 (the "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 2002A Bonds.
1.08. Pursuant to a First Supplement Assignment and Security Agreement dated as of
April 15, 2003 (the "Supplemental Assignment"), the Authority will assign to the Trustee all of
the Authority's right, title and interest in and to the Amendment to Ground- Lease, the
Amendment to Lease, and the additional Lease Payment to be made by the City thereunder
(other than certain rights to indemnification and payment of expenses) as security for the Bonds.
Hereafter the term "Assignment" includes the Supplemental Assignment unless the context
requires otherwise.
1.09. Forms 'of the Amendment to Ground Lease, the Amendment to Lease, the
Supplemental Indenture, the Supplemental Assignment 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 $1,169,905.00 plus accrued interest to date of
delivery, for Bonds bearing interest as follows:
Year of Interest Year of Interest
Maturity Rate Maturity Rate
2005 2.00% 2012 4.00%
2006 2.35 2013 4.10
2007 2.85 2014 4.30
2008 3.00 2015 4.50
2009 3.35 2016 4.70
2010 3.60 2017 4.80
2011 3.75 2018 4.90
Term Bonds due February 1,2020 at 5.00%;
Term Bonds due February 1,2023 at 5.10%.
2.02. The Authority will forthwith issue and sell the Bonds in the total principal amount
of $1,195,000 originally dated April 15, 2003, in the denomination of $5,000 each or any integral
multiple thereof, numbered No. R-1, 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):
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Year Amount Year Amount
2005 $ 5,000 2012 $ 55,000
2006 45,000 2013 60,000
2007 50,000 2014 60,000
2008 50,000 2015 65,000
2009 50,000 2016 70,000
2010 55,000 2017 70,000
2011 55,000 2018 75,000
Term Bonds due February 1,2020 in the aggregate principal amount of $160,000.
Term Bonds due February 1,2023 in the aggregate principal amount of $270,000.
Term Bonds due February 1, 2020 and 2023 are subject to Mandatory Sinking Fund
Redemption on February 1 in the years and amounts described in the First Supplemental Trust
Indenture.
2.03. Execution, Authentication and Deliverv. 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.
Section 3. Approval and Execution of Documents. The Amendment to Ground
Lease, the Amendment to Lease, the Supplemental Indenture and the Supplemental Assignment
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 Amendment to Ground Lease, the
Amendment to Lease, the Supplemental'Indenture and the Supplemental Assignment 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 solely
from the Lease Payments to be made by _the City under the Lease and by the District 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. .
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Section 5.
Authentication of Transcript: Issuance Costs.
5.01. The officers of the 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.
5.02. 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 6..
Tax Covenants.
6.01. 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.
6.02. 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 2003 will not
exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the Authority during
calendar year 2003 have been designated for purposes of Section 265(b)(3) of the Code.
6.03. 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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Dated: April ~ 2003.
SHOREWOODECONOMITC
:~~ORITY
President
By
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