HomeMy WebLinkAboutCity Council Resolution 1979-680Member Spaeth introduced the following
resolution and moved its adoption:
RESOLUTION NO. 79-680
RESOLUTION AUTHORIZING THE SALE AND ISSUANCE OF
INDUSTRIAL DEVELOPMENT REVENUE BONDS UNDER. THE MINNESOTA
MUNICIPAL INDUSTRIAL DEVELOPME14T ACT TO FINANCE A PROJECT
THEREUNDER, SECURED BY PAYMENTS TO BE RECEIVED PURSUANT TO
A LOAN AGREEMENT AND A PLEDGE AND ASSIGCPwENT OF THE
MUNICIPALITY'S INTEREST IN THE LOAN AGREEMENT AND PAYMENTS
THEREUNDER TO A TRUSTEE, AND AUTHORIZING THE EXECUTION OF
DOCUMENTS
BE IT RESOLVED by the City Council of the City of
Plymouth, Minnesota (the Municipality), as follows:
Section 1. Authorization and Recitals.
1.01 General Authority. The Municipality is
authorized by Minnesota Statutes, Chapter 474, as amended
(the Act), to issue its revenue bonds and to make secured
or unsecured loans to finance the acquisition of real
property and the acquisition or construction of buildings
and improvements on such real property and the
installation of machinery and equipment of any and all
kinds and any other personal properties deemed necessary
in connection with a project, as defined in the Act.
1.02 Proposed Project and Bonds. Representatives of
Juran s Moody, Inc. (the Underwriter), and Versatile Parts
Inc. (the Company), a North Dakota corporation, have
proposed that the Municipality acting under and pursuant
to the Act, issue and sell to the Underwriter, its
$675,000 Industrial Development Revenue Bonds (Versatile
Parts, Inc. Project) Series 1979 (the Bonds) for the
purpose of defraying the costs of constructing and
equipping a warehouse and office building (the Project).
Pursuant to the proposal the proceeds of the Bonds will be
loaned by the Municipality to the Company and the Company
agrees to make payments sufficient to pay the principal of
and interest on the Bonds and will secure payment pursuant
to a Mortgage Agreement (as hereinafter defined).
Versatile Cornat Corporation (the Guarantor) will
guarantee the full and prompt payment of the principal,
premium, if any, and interest on the Bonds pursuant to a
Guaranty Agreement (as hereinafter defined). The
Municipality will assign its interest in the Loan
Agreement (as hereinafter defined) to the Trustee (as
hereinafter defined).
1.03 Prior Approval. On August 6, 1979, this Council
adopted a resolution giving preliminary approval to the
Project and authorizing preparation of necessary documents.
1.04 Project Cost. The Company and the Underwriter
have advised this Council and this Council hereby finds
that the estimated costs of the Project at the present
time are approximately as follows:
Construction costs $ 562,000
Racking and Bins 70,000
Legal, Underwriting and
Miscellaneous 43,000
TOTAL COST $ 675,000
All costs of the Project in excess of the proceeds of the
Bonds available therefor are required to be paid by the
Company.
1.05 Documentation Forms of the following documents
relating to the Project ,:ave been prepared and submitted
to this Council and are hereby directed to be filed with
the City Clerk.
(a) a Loan Agreement (the Loan Agreement), to be
dated as of October 1, 1979, proposed to be.-nade and
entered into between the Municipality and the Company
pursuant to which the Municipality loans the proceeds
of the Bonds to the Company;
(b) an Indenture of Trust (the Indenture), to be
dated as of October 1, 1979, proposed to be made and
entered into between the Munici;,Ai.ty and First Trust
Company of Saint Paul, as trustee (the Trustee),
creating and authorizing the issuance of and
establishing the terms and conditions of the Bonds;
(c) a Mortgage Agreement (the Mortgage), to be
dated as of October 1, 1979, proposed to be executed
by the Company as Mortgagor, and the Trustee, as
Mortgagee, pursuant to which the Company secures
payment of the Bonds;
of the principal, premium, if any, and interest on the
Bonds;
(e) a Bond Purchase Agreement (the Bond Purcnase
Agreement) proposed to be executed by the Company, the
Guarantor, the Municipality and the Underwriter,
pursuant to which the Underwriter agrees to purchase
the Bonds; and
(f) an Official Statement (the Official
Statement) proposed to be used by the Underwriter in
offering the Bonds for sale.
Section 2. Findings.
It is hereby found, determined and declared that:
(a) the Project, as defined herein and in the
Loan Agreement, constitutes a project authorized by
Section 474.02, Subdivision la of the Act;
(b) the purpose of the Project is and the effect
thereof will be to promote the public welfare by
encouraging retaining the location, retention and
developemnt of economically sound industry and commerce
within the Municipality so as to prevent, so far as
possible, the emergence of blighted and marginal lands and
areas of chronic unemployment; by promoting the use of
available resources of the community thereby retaining the
benefit of its existing investment in educational and
public service facilities; by discouraging the movement of
talented, educated personnel of mature age to other areas,
thus preserving the economic and human resources needed as
a base for providing governmental services and facilities;
and by encouraging more intensive development of land
available in the Municipality to provide an adequate and
better balanced tax base to finance the increase in the
amount and cost of governmental services;
(c) the Project is to be located within the
Municipality, at a site which is readily accessible to
employees residing within the Municipality and the
surrounding areas;
(d) the Project when completed will add to the
tax base of the Municipality and overlapping taxing
jurisdictions;
(f) the financing of the Project, the issuance
and sale of the bonds in the principal amount of $675,000
and the execution and delivery of the Loan Agreement, the
Indenture and the Bond Purchase Agreement, and the
performance of all covenants and agreements of the
Municipality contained in the Loan Agreement, the
Indenture and the Bond Purchase Agreement and of all other
acts and things required under the Constitution and laws
of the State of Minnesota to make the Loan Agreement, the
Indenture, the Bond Purchase Agreement and the bonds valid
and binding obligations in accordance with their terms,
are authorized by the Act;
(g) it is desirable that a series of Industrial
Development Revenue Bonds in the amount of $675,000 be
issued by the Municipality upon the terms set forth in the
Indenture, under the provision of which the Municipality's
interest in the Loan Agreement and the payment thereunder
will be pledged to the Trustee as security for the payment
of the principal, premium, if any, and interest on the
Bonds;
(h) the loan payments contained in the Loan
Agreement are fixed, and are required to be revised from
time to time as necessary, so as to produce income and
revenue sufficient to provide for prompt payment of
principal of and interest on all Bonds issued under the
Indenture when due; and the Loan Agreement also provides
that the Company is required to pay all expenses of the
operation and maintenance of the Project, including, but
without limitation, adequate insurance thereon and
insurance against all liability for injury to persons or
property arising from the operation thereof, and all taxes
and special assessments levied upon or with respect to the
Project Site and payable during the term of the Loan
Agreement and pursuant to the Mortgage the Company has
mortgaged and granted a security interest in certain
described facilities comprising the Project, as defined in
the Mortgage;
(i) under the provisions of Section 474.10 of
the Act and as provided in the Loan Agreement and
Indenture, the Bonds are not to be payable from nor
charged upon any funds of the Municipality other than the
revenue pledged to the payment thereof; the Municipality
is not subject to any liability thereon and no holders of
the Bonds shall every have the right to compel any
exercise of the taxing powers of the Municipality to pay
any of the Bonds or the interest thereon nor to enforce
payment thereof against any property of the Municipality;
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the Bonds shall not constitute a charge, lien or
encumbrance, legal or equitable, upon any property of the
Municipality except its interest in the Loan Acreement;
each Bond issued under the Indenture shall recite that the
Bonds, includinc interest thereon, are pavable solely from
the revenues pledged to the payment thereof; and no Bond
shall constitute a debt of the Municipality within the
meaning of any constitutional or statutory limitation.
Section 3. Authorization and Approval of the
Project, Loan Agreement, Indenture, Mortgage and Guaranty.
The Municipality is hereby authorized to provide
for the construction and equipping of the Project and
pledge and assign the revenues therefrom and its interest
in the Loan Agreement, all as provided in the Loan
Agreement and the Indenture. The forms of Loan Agreement,
Indenture, Mortgage, Guaranty and Bond Purchase Agreement
referred to in Section 1.05 are approved subject to such
modifications as are deemed appropriate and approved by
the City Attorney and the Mayor, which approval shall be
conclusively evidenced by execution of the Loan Agreement,
the Bond Purchase Agreement, the Indenture and the Bonds
by the Mayor and City Manager. The Mayor and City Manager
are directed to execute the Loan Agreement upon execution
thereof by the Company, the Bond Purchase Agreement upon
execution thereof by the Company, the Guarantor and the
Underwriter, and the Indenture upon execution thereof by
the Trustee. Copies of all the documents shall be
delivered, filed and recorded as provided therein. The
Mayor and City Manager are also authorized and directed to
execute such other instruments as may be required to give
effect to the transaction herein contemplated.
Section 4. Official Statement.
The Underwriter proposes to offer the Bonds for
sale by means of an Official Statement (the Official
Statement) dated October 1, 1979, which has been prepared
and presented to this Council, has been reviewed and is
hereby approved. The Council hereby consents to the use
of the Official Statement by the Underwriter in the offer
and sale of the Bonds, if necessary.
Section 5. The Bonds; Terms, Sale and Execution.
5.01 Authorization and Sale. In anticipation of the
collection of revenues of the Project, the Municipality
shall proceed forthwith to issue its Bonds dated as of
October 1, 1979, in the form and upon the terms set forth
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in the Indenture and this resolution. It is hereby
determined that the offer of the Underwriter to purchase
the Bonds at a price of $675,000 plus accrued interest,
and upon the further terms and conditions set forth in the
Bond Purchase Agreement is reasonable and is hereby
accepted.
5.02 Terms. The bonds shall be in the denomination
of $5,000 each and shall be numbered consecutively from 1
to 135, inclusive. The Bonds shall mature, bear interest
and be subject to redemption as provided in the Indenture
and approved pursuant to 5.01 hereof.
5.03 Execution. The Mayor and City Manager are
hereby aut orifi z and directed to execute the Bonds as
prescribed herein and in the Indenture and to deliver them
to the Trustee, together with a certified copy of this
resolution, the other documents required in the Indenture,
and such other certificates, documents and instruments as
may be appropriate to effect the transactions herein
contemplated.
Mayor
Attest:
City Clerk
(SEAL)
The motion for the adoption of the foregoing
resolution was duly seconded by Member Hoyt;. upon vote
being taken thereon, the following voted in favor thereof:
aHunCouncilmembrsTavenortHotNeilsMaohe and Spaeth
n tfo owing ,
voted against the same:
None
whereupon said resolution was declared duly passed and
adopted.
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