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062308 EDA AgPCITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, JUNE 23, 2008 TIME: 7:00 P.M. AGENDA 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING A. Roll Call President Lizee Bailey Turgeon Wellens Woodruff B. Review Agenda 2. APPROVAL OF MINUTES A. EDA Minutes of July 23, 2007 (Att.-#2A Minutes) 3. CONSENT A. Approval of the Verified Claims List (Att. -Claims List) 4. NEW BUSINESS A. Selection of Officers (Att.- Deputy Clerk's Memorandum) B. Report on Offering of Financing for City Hall Facilities - (Att. -Finance Director's memorandum, Proposed Schedule, Finance Plan Summary) C. Resolution Providing for the Issuance and Sale of Public Project Lease Revenue Bonds, Series 2008A (Att.- Resolution) 5. OTHER BUSINESS 6. ADJOURN CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, JULY 23, 2007 Immediately Following Regular Council Meeting MINUTES 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING President Lizee called the meeting to order at 8:55 P.M. A. Roll Call Present: President Lizee; Boardmembers Turgeon, Wellens, and Woodruff; Executive Director Dawson.; Assistant Executive Director Nielsen; Assistant Treasurer Burton; and Associate Attorney Mayeron Absent: Boardmember Callies B. Review Agenda Turgeon moved, Wellens seconded, Approving the agenda as presented. Motion passed 4.0. 2. APPROVAL OF MINUTES A. EDA Minutes of January 8, 2007 Turgeon moved, Wellens seconded, Approving the EDA Meeting Minutes of January 8, 2007, as presented. Motion passed 4/0. 3. CONSENT Turgeon moved, Wellens seconded, Approving the Motions Contained on the Consent Agenda. A. Treasurer's Report B. Approve Payment of Claims In response to a comment from Boardmember Woodruff, Assistant Treasurer Burton explained the EDA's fund balance did not change significantly from year to year. The EDA invoiced the South Lake Minnetonka Police Department anal the Excelsior Fire District, and when the invoices were received, the EDA immediately paid US Bank. Woodruff requested that he would like to have a report that reflected the fund balance before and after payments and disbursements. Motion passed 4/0. ;' . CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 23, 2007 Page 2 of 2 4. NEW BUSINESS A. Selection of Officers Boardmember Wellens recommended Boardmember Woodruff be appointed to the position of Treasurer. Turgeon moved, Wellens seconded, Approving appointments the same as those confirmed on January 8, 2007, with the exception that Richard Woodruff was confirmed as Treasurer. Motion passed 4/0. 5. OTHER BUSINESS No other business was presented. 6. ADJOURN Wellens moved, Turgeon seconded, Adjourning the Shorewood Economic Development Authority Meeting of July 23, 2007, at 9:00 P.M. Motion passed 4l0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Christine Lizee, President ATTEST: Lawrence A. Brown, Acting Executive Director Shorewood Economic Development Authority Check Approval List for 01/01/2008 - 06/09/2008 Check # Vendor Name Description Check Date Amount 1195 US BANK CORPORATE TRUST SVCS 2002A -WEST FIRE BONDS 01/29/2008 $237,573.75 1195 US BANK CORPORATE TRUST SVCS 20028-POLICE FACILITY BONDS 01/29/2008 $246,140.00 1195 US BANK CORPORATE TRUST SVCS 2002C-EAST FIRE BONDS 01/29/2008 $126,713.75 1195 US BANK CORPORATE TRUST SVCS 2003A-WEST FIRE BONDS 01/29/2008 $ 74,738.75 1195 US BANK CORPORATE TRUST SVCS 2003B-POLICE FACILITY BONDS 01/29/2008 $ 75,246.25 1197 US BANK CORPORATE TRUST SVCS EDA-2007A-W.FIRE FISCAL FEES 04/15/2008 $ 1,750.00 1197 US BANK CORPORATE TRUST SVCS EDA-20078-POLICE FISCAL FEES 04/15/2008 $ 1,750.00 1197 US BANK CORPORATE TRUST SVCS EDA-2007C-POLICE FISCAL FEES 04/15/2008 $ 1,750.00 1197 US BANK CORPORATE TRUST SVCS EDA-2003A-W.FIRE FISCAL FEE 04/15/2008 $ 1,100.00 1197 US BANK CORPORATE TRUST SVCS EDA-20038-POLICE FISCAL FEES 04/15/2008 $ 1,100.00 1197 US BANK CORPORATE TRUST SVCS EDA-2002A-W.FIRE FISCAL FEES 04/15/2008 $ 1,000.00 1197 US BANK CORPORATE TRUST SVCS EDA-20026-W.FIRE FISCAL FEES 04/15/2008 $ 1,000.00 1197 US BANK CORPORATE TRUST SVCS EDA-200X-W.FIRE FISCAL FEES 04/15!2008 $ 1,000.00 TOTAL FOR US BANK CORPORATE TRUST SVCS $770,862.50 TOTAL CHECKS $770,862.50 SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY 5755 Country Club Road Shorewood, MN 55331-8926 952-474-3236 FAX:952-474-0128 MEMORANDUM DATE: June 18, 2008 TO: EDA Board of Commissioners FROM: Jean Panchyshyn, Deputy Clerk, City of Shorewood ''~~ RE: Selection of Officers The Selection of Officers is made at the EDA's annual meeting in July. With the resignation of Paula Callies and Craig Dawson, the Board will need to fill the offices of President Pro-Tem, Secretary, and Executive Director. The EDA Bylaws state that the City Administrator shall serve as Secretary and Executive Director. Acting City Administrator Lawrence Brown will need to be appointed to these offices. If the Board wishes to continue the President Pro-Tem position, it will need to appoint any remaining Commissioner (other than Christine Lizee or Laura Turgeon) to serve in this office. The Officers include: President -Christine Lizee (The President shall be the Mayor of the City of Shorewood) Vice-President -Laura Turgeon (Presides in the absence of the President) President Pro-Tem -Appointed to serve in the absence of both the President and Vice-President Paula Callies served in this position. If the Board wishes to continue this position it will need to select someone for it. Treasurer -Richard Woodruff (The Treasurer shall receive and be responsible for Authority money, etc. Assistant Treasurer -Bonnie Burton (The Assistant Treasurer shall be the Director of Finance) Secretary -shall be the City Administrator. Lawrence Brown, Acting City Administrator shall be appointed as Secretary Executive Director -shall be the City Administrator. Lawrence Brown, Acting City Administrator, shall be appointed as Executive Director. Assistant Executive Director -Brad Nielsen (The Assistant Executive Director shall be the Director of Planning. Action Needed: The Board needs to appoint Acting City Administrator Lawrence Brown as Secretary and Executive Director. The Board may also decide whether to select a President Pro-Tem. ~~~ -, ~ ~~'_ ~ ~ ~~ ~~ ~;~_ 3: MEMORANDUM 5755 CC~Ui~T..Y CLUB RC}AD ~ S..CR~WOOU, MI~INES®TA 55331-8927 ®(952) 474-3236 f=AX (952} 474-Oi28 ®www.ci.shorewood.mn.us ~ cityhall@ci.shorewood.mn.us Date: June 18, 2008 To: Honorable Mayor and City Council Members Lawrence A. Brown, Acting City Administrator ,~ From: Bonnie Burton, Finance Director/Treasurer Re: Resolutions to Preauthorize Sale of Bonds for City Ha11Project The Council, in awork-session format, recently met with the City's bond consultant Paul Donna, Senior Vice President for Northland Securities, Inc. At this work-session, the Council learned about the debt financing options available for City Hall improvements. At that time, the Council directed Mr. Donna to prepare documents to authorize the City and the Shorewood EDA to move forward with the sale of lease revenue bonds by the EDA. Attached for your review is a Resolution Authorizing EDA to Sell Bonds for the City Hall Building Remodeling Project. Also attached is the Proposed Schedule of Events and the Finance Plan Summary prepared by Northland Securities. In terms of process and procedure, there are resolutions to be approved separately by the Shorewood EDA Board and also by the Shorewood City Council. Therefore, the Council will briefly recess the City Council meeting, and convene as the EDA in order to first adopt the Authorization Resolution to Sell Bonds for the City Hall Remodeling Project. After the EDA transacts its business, the EDA meeting will be adjourned and the City Council meeting reconvened. Then the City Council will be asked. to approve a similar resolution. The resolutions and the Finance Plan call for anot-to-exceed maximum amount of $1.4 million. The actual amount required will be refined after bids are opened and awarded (tentative date of July 14). Mr. Donna will be present at the June 23, 2008 meeting to answer questions and guide the City Council through this process. Please contact me if you have any questions prior to the meeting. ®~ ~° ~®~ PRINTED ON RECYCLED PAPER a d t_ ~.aa'° '"5S""a~'"a -~~ra-~ax~se-• ~.,~~-~a..r-a-ca~ ~ ~ r~ ~ ~ i-rxs~a~ €~a^~i ~ ~r~.T~OTA- _ ~ _. ~; ~~Shf~ Cf~1~O1aT~:k OF FNTS The following checklist of items denotes each milestone activity as well as the members of the finance team who will have the responsibility to complete it. Sun Mon Tue Wed . Thu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 June 13t'' Northland orders Ci Information for Official Statement Northland June 18t" Bond Counsel Distributes Trigger Resolutions to Authority and City Bond Counsel, Authority, City, Northland June 23=~ Authority and City adopt Trigger Resolution for Sale of the Bonds Authority and City June 23=j Ci Forwards Official Statement Information to Northland Ci July 9"' Construction Bids Received City, Authority, Northland Jul 13t'' Final Sizin of the Bonds Northland Jul 14t'' Draft Official Statement is Sent to Ci for Si n Off Northland Jul 15t'' Official Statement sent to Ratin A enc Northland July 23=~ Rating Received Northland, Authority, Ci Jul 23=atn Award Resolution sent to Authori and Ci for ackets Bond Counsel Jul 24"' Bond Pricin and Bond Contract Si led Northland, Authori July 28t''t'' Authority Awards the Bonds Northland, Authority, Ci August 21St Bond Closing, Proceeds Available Northland, Bond Counsel, Authorit Northland Securities Public Finance 5/29/2008 FINANCE PLAN SUMMARY FoR SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF SHOREWOOD, MINNESOTA $1,400,000' PUBLIC PROJECT LEASE REVENUE BONDS, SERIES 2008A (CITY OF SHOREWOOD, MINNESOTA LEASE OBLIGATION) * not to exceed maximum amount NO RTHL~ND~~!'; SECURITIES 45 South 7~'~ Street Suite 2500 Miru-teapolis, MN 55402 612-851-5900 800-851-2920 June 23, 2008 Financing Overview: The Public Project Lease Revenue Bonds, Series 2008A (the "Bonds") will be issued pursuant to Minnesota Statutes, Section 469, as amended, by the Shorewood Economic Development Authority, Minnesota ("EDA" or the "Authority) and will be an obligation of the City of Shorewood, Mizuzesota (the "City") pursuant to Minnesota Statutes, Section 465.71. Bond proceeds will be used to undertake major renovations to its existing City Hall building, including new additions of approximately 1,300 square feet; site work to remediate drainage and water infiltration; renovation of the building exterior; interior renovation of approximately 5,000 square feet to include new walls, doors, finishes, lighting; and mechanical, electrical and communications renovation. The City and EDA will be the lead organizations with respect to financing the Project. The EDA, as issuer of the bonds and owner of the Project, will lease the addition and improvements to the City. The City will covenant to make the lease payments from any revenues available to the City. The lease payments will be equal to the debt service payments on the Bonds. The City has the right to terminate the lease purchase agreement at the end of any fiscal year during its term. In order to carry out the transaction, several legal documents are required. These documents will be drafted by the City's bond attorney at Kemledy & Graven, Chartered and provided to the City and the EDA prior to the July 28t'` meeting when the final terms of the Bonds will be considered. We have provided a brief summary of each of these documents below. City Bond Resolution -The City will adopt their Resolution which authorizes the execution of the Lease Purchase Agreement (the "Lease"), the Ground Lease (the "Ground Lease"), authorizes the Pricing Committee, authorizes a continuing disclosure undertaking, and allocates small issuer rebate exception to the Authority EDA Bond Resolution -EDA will adopt the Bond Resolution which authorizes the issuance of the Bonds, describes the Bonds, authorizes the President of the Authority and the Assistant Treasurer as the Pricing Committee to sign the Bond contract and provides all details relating to the Bonds themselves. Page 2 * not to exceed maximum amount NORTIILAN~D - = SECURITIES Lease Purchase Agreement -This document is between EDA, as Lessor and the City, as Lessee and establishes the terms under which the City will lease the Project and the terms under which the City may purchase the Project. The Rental Payments from the City will be sufficient to pay the principal and interest, when due, on the Bonds. Ground Lease Agreement -This document is between EDA, as Lessor and the City, as Lessee and provides the terms tinder which the City will lease the Land on which the Project will be located Bond Issue Structure The Bonds are structured with a 20 year repayment schedule beginning on June 1, 2009 with level debt service payments through December 1, 2029 The City will make semi-amlual Lease payments to the Authority which will be sufficient to pay the principal and interest when due on the Bonds. The estimated debt service schedule assumes an average interest rate of 4.53% and is shown in Exhibit A. The total estimated sources and uses are as follows: Sources & Uses Dated 08/01/2008 ~ Delivered 08/01/2008 Sources Of Funds Par Amount of Bonds $1,400,000.00 Total Sources $1,400,000.00 Uses Of Funds Costs of Issuance including Underwriter Discount 58,300.00 Deposit to Project Construction Fund 1,337,950.00 Roundino Amount 3,750.00 Total Uses * not to exceed maximum amount $1,400,000.00 Page 3 NOR'THLAN'D -~ SECURI"PIES Summary of Recommended Terms: 1. Type of Bond Sale 2. Proposed Pricing 3. Council Consideration Negotiated Sale with Northland Securities Thursday, July 24, 2008. Monday, July 28, 2008 @ 7:00 P.M 4. Repayment Term The Bonds will mature annually each December 1, 2009 - 2028. Interest on the Bonds will be payable on June 1, 2009 and semiannually thereafter on each December 1 and June 1. 5. Security Lease payments received from the City will be pledged to the payment of the Bonds. 6. Prepayment Option The Bonds due December 1, 2016 and thereafter will be subject to prepayment on December 1, 2015 or any day thereafter at a price of par. 7. Tax Status Kemledy & Graven, Chartered, Miru~eapolis, Minnesota, 8. Credit Rating We believe a credit rating will be cost beneficial. The City's general obligation debt is currently rated Aa3 by Moody's Investors Service. Lease obligations are generally rated one notch lower than the GO rating if the facility being leased is considered an essential purpose. We would expect that these Bonds would be rated one notch lower at a A1. * not to exceed maximum amount Page 4 NORTHLAND -,, S~.CURITIES Related Considerations: • Bank Qualified -because total tax-exempt debt issued by the Authority in calendar year 2008 is expected to be less than $10.OM, the bonds will be designated as "bank qualified" obligations pursuant to Federal Tax Law. The impact of this designation may result in slightly lower interest rates since banking institutions will be interested in purchasing the bonds. We have adjusted the estimated interest rates accordn--gly. • Arbitrage Compliance - o Project /Construction Fund -All tax exempt issues are subject to federal rebate requirements which require all arbitrage earned to be rebated to the U.S. Treasury. A rebate exemption the Authority expects to qualify for is the "small issuer exemption' because the Authority expects to issue less than $5.OM of tax exempt bonds, including any 501 C 3 conduit financings, in calendar year 2008. o Debt Service Fund -The Authority must maintain a bona fide debt service fund for the bonds or be subject to yield restriction in the debt service fund. A bona fide debt service fund involves an equal matching of revenues to debt service expense with a balance forward permitted equal to the greater of the investment earnings in the fund during that year or 1/12 of the debt service of that year. The Authority and the City should become familiar with the various Arbitrage Compliance requirements for this bond issue. The Bond Resolution explains the requirements in greater detail. We are also available to assist the Authority and the City in meeting these requirements. • Book Entry -The Bonds will be global book entry with Northland Trust Services designated as tfae paying agent. As "paperless" bonds, you will avoid the cost of bond printing and annual registrar charges. The Paying Agent will invoice you for the interest semiannually and on an annual basis for the principal coming due. You will be charged only for paying agent/transfer agent services provided by the Northland Trust Services. The cost of these services, through the call date of December 1, 2015, has been capitalized into the bond issue. • Continuing Disclosure -Because this issue is greater than $1,000,000, and the City's outstanding debt exceeds $10.OM, it is subject to the Securities and Exchange Commission's continuing disclosure requirements. Northland Securities is prepared to assist the City in this capacity. Page 5 * not to exceed maximum amount NORTHLAND -=; S);CUR1TlES EXHIBIT A Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 08/01 /2008 - - - - - 06/01/2009 - - 49,937.50 49,937.50 - 12/01/2009 30,000.00 2.850% 29,962.50 59,962.50 109,900.00 06/01/2010 - - 29,535.00 29,535.00 - 12/01/2010 50,000.00 3.000% 29,535.00 79,535.00 109,070.00 06(01/2011 - - 28,785.00 28,785.00 - 12/01/2011 50,000.00 3.200% 28,785.00 78,785.00 107,570.00 06/01/2012 - - 27,985.00 27,985.00 - 12/01/2012 55,000.00 3.400% 27,985.00 82,985.00 110,970.00 06/01/2013 - - 27,050.00 27,050.00 - 12/01/2013 55,000.00 3.600% 27,050.00 82,050.00 109,100.00 06/01/2014 - - 26,060.00 26,060.00 - 12/01/2014 55,000.00 3.750% 26,060.00 81060.00 107,120.00 06/01/2015 - - 25,028.75 25,028.75 - 12/01/2015 60,000.00 3.900% 25,028.75 85,028.75 110,057.50 06/01/2016 - - 23,858.75 23,858.75 - 12/01/2016 60,000.00 4.000% 23,858.75 83,858.75 107,717.50 06/01/2017 - - 22,658.75 22,658.75 - 12/01/2017 65,000.00 4.100% 22,658.75 87,658.75 110,317.50 06/01/2018 - - 21,326.25 21,326.25 - 12/01/2018 65,000.00 4.200% 21,326.25 86,326.25 107,652.50 06/01/2019 - - 19,961.25 19,961.25 - 12/01/2019 70,000.00 4.300% 19,961.25 89,961.25 109,922.50 06/01/2020 - - 18,456.25 18,456.25 - 12/01/2020 70,000.00 4.400% 18,456 25 88,456.25 106,912.50 06/01/2021 - - 16,916.25 16,916.25 - 12/01/2021 75,000.00 4.500% 16,916.25 91,916.25 108,832.50 06/01/2022 - - 15,228.75 15,228.75 - 12/01/2022 80,000.00 4.600% 15,228.75 95,228.75 110,457.50 06/01/2023 - - 13,388.75 13,388.75 - 12/01/2023 85,000.00 4.650% 13,388.75 98,388.75 111,777.50 06/01 /2024 - - 11,412.50 11,412.50 - 12/01/2024 85,000.00 4.700% 11,412.50 96,412.50 107,825.00 06/01/2025 - - 9,415.00 9,415.00 - 12/01/2025 90,000.00 4.750% 9,415.00 99,415.00 108,830.00 06/01/2026 - - 7,277.50 7,277.50 - 12/01/2026 95,000.00 4.800% 7,277.50 102,277.50 109,555.00 06/01/2027 - - 4,997.50 4,997.50 - 12/01/2027 100,000.00 4.850% 4,997.50 104,997.50 109,995.00 06/01/2028 - - 2,572.50 2,572.50 - 12/01/2028 105,000.00 4.900% 2,572.50 107,572.50 110,145.00 Total $1,400,000.00 - $783,727.50 $2,183,727.50 - Page 6 * not to exceed maximum amount NOR"I'HLAND - SiCURI`1'IES Extract of Minutes of Meeting of the Shorewood Economic Development Authority Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the Board of Commissioners of the Shorewood Economic Development Authority was duly held in the City Hall of the City of Shorewood, Minnesota on June 23, 2008, commencing at o'clock P.M. The following members were present: and the following were absent: The following written resolution was presented by Commissioner ,the reading of which had been dispensed with by unanimous consent, who moved its adoption: RESOLUTION NO. RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF PUBLIC PROJECT LEASE REVENUE BONDS, SERIES 2008A (CITY OF SHOREWOOD, MINNESOTA LEASE OBLIGATION) BE IT RESOLVED By the Board of Commissioners (the "Board") of the Shorewood Economic Development Authority (the "Authority") as follows: 1. It is hereby determined that: (a) the Authority is authorized under Minnesota Statutes, Chapter 469 and Section 465.71 (collectively, the "Act") to sell its lease purchase revenue bonds for the purposes enumerated in the Act; (b) the Authority has determined to sell its lease-purchase revenue bonds to 335160v3 AJP SH230-41 finance the renovation of and additions to City Hall (the "Improvements); and (c) it is necessary and expedient to the sound financial management of the affairs of the Authority to issue its Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation), in the approximate amount of $1,400,000 (the "Bonds") pursuant to the Act to provide financing for the Improvements. 2. The President and the Assistant Treasurer of the Authority are authorized to accept a proposal by Northland Securities, Inc. to purchase the Bonds under terms that provide for a maximum principal amount of $1,400,000, with a final maturity on December 1, 2028, and a maximum true interest cost of 5.25%.; provided that by no later than the next regularly scheduled meeting of the Authority after such acceptance, this Board will consider a resolution approving all terms and conditions of the Bonds. 3. If no proposal is accepted in accordance with this Resolution by September 1, 2008, this Resolution is deemed terminated. Approved by the Board of Commissioners of the Shorewood Economic Development Authority this 23rd day of June, 2008. Christine Lizee, President Lawrence A. Brown, Acting Executive Director The motion for the adoption of the foregoing resolution was duly seconded by Commissioner ,and upon vote being taken thereon the following members voted in favor of the motion: and the following voted against: whereupon the resolution was declared duly passed and adopted. STATE OF MINNESOTA. ) COUNTY OF HENNEPIN ) I, the undersigned, being the duly qualified and Acting Executive Director of the Shorewood Economic Development Authority, hereby certify that I have carefillly compared the attached and foregoing extract of minutes of a regular meeting of the Board of Commissioners of the Authority held on June 23, 2008, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes, insofar as they relate to the issuance and sale of the Authority's Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation). WITNESS My hand as Acting Executive Director this day of , 2008. Lawrence A. Brown, Acting Executive Director Shorewood Economic Development Authority (SEAL)