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HomeMy WebLinkAbout[05c] Termination of City Maint Facility Lease AgreementCrT1' 1)F ~T. JI l~F:l'H EDA Agenda Item MEETING DATE: August 26, 2009 AGENDA ITEM: Bond Refinancing - 2003 Maintenance Facility SUBMITTED By: Administration BOARD/COMMISSION/COMMITTEE RECOMMENDATION: PREVIOUS EDA ACTION: The EDA issued Public Project Revenue Bonds in 2003 for the construction of a Maintenance Facility. The process of issuing bonds including executing a lease with the City for the facility between the EDA and City of St. Joseph. BACKGROUND INFORMATION: The EDA was asked to finance the facility because at that time the City could not issue bonds for a facility without a vote of the residents. This same process was used for the City Hall facility. In 2008 the bond statutes were changed so that City's could issue General Obligation Capital Improvement Bonds. The City Bond Counsel, Monte Eastvold provided the City with an opportunity to refinance the bond saving future debt payments of approximately $ 20,000. The refinancing included issuing GO Capital Improvement Bonds for the remaining life of the bond. GO Capital Improvement Bonds carry a slightly lower interest rate then Public Project Revenue Bonds, so by changing the type of bond and lower interest rates the City could save money. The City Council on August 6, 2009 issued the GO Capital Improvement Bonds and as part of that process the EDA must terminate the lease and execute a quit claim deed and call prior bonds. The City will be closing on the bonds on September 3, 2009. BUDGET/FISCAL IMPACT: The EDA will no longer be financially responsible for the maintenance facility and the City will save approximately $ 20,000 in debt payments. ATTACHMENTS: Extract of the Resolution Authorizing Termination of lease, Execution of a Quit Claim Deed and Calling Prior Bonds; Exhibit A, Notice of call for redemption. REQUESTED EDA ACTION: Authorize execution of the Resolution authorizing termination of lease, execution of a Quit Claim Deed and calling Prior Bonds. EXTRACT OF MINUTES OF A MEETING OF THE BOARD OF COMMISSIONERS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ST. JOSEPH, MINNESOTA HELD: August 26, 2009 Pursuant to due call, a regular meeting of the Board of Commissioners of the Economic Development Authority of the City of Si. Joseph, Minnesota, was duly held at the City Hall on August 26, 2009, at P.M.. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING TERMINATION OF LEASE, EXECUTION OF A QUIT CLAIM DEED AND CALLING PRIOR BONDS WHEREAS, the City of St. Joseph, Minnesota (the "City") proposes to issue its $500,000 General Obligation Capital Improvement Plan Refunding Bonds, Series 2009B (the "Bonds") to finance the acquisition of a public works facility (the "Facility") from the Economic Development Authority of the City of St. Joseph, Minnesota (the "Authority") ;and WHEREAS, the proposed purchase price for the Facility is an amount equal to the outstanding principal and interest on the Authority's Public Project Revenue Bonds of 2003 (City of St. Joseph, Minnesota Lease with Option to Purchase Project), dated April 1, 2003 (the "Prior Bonds"). NOW, THEREFORE, BE IT RESOLVED by the Boazd of Commissioners of the Economic Development Authority of the City of St. Joseph, Minnesota, as follows: 1. The Prior Bonds which mature on and after December 1, 2010, shall be redeemed and prepaid on December 1, 2009 (the "Ca]] Date"), in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached as Exhibit A hereto, which terms and. conditions are hereby approved and incorporated herein by reference. 2. As provided in Section 10.4 of the Lease With Option to Purchase Agreement between the City and the Authority, dated as of April 1, 2003 (the "Lease"), the Authority hereby determines and declares that upon the issuance of the Bonds and the funding of the Payment Account as provided in the City's Bond Resolution adopted on August 6, 2009, the Lease shall be terminated and the Authority shall have no further right, title and/or interest in and to the Facility. The President and Secretary are hereby authorized to execute a Quit Claim Deed to convey the property covered by the Lease back to the City. 2381569v1 following voted in favor thereof: and the following voted against the same: whereupon the resolution was declared duly passed and adopted. The motion for the adoption of the foregoing resolution was duly seconded by member and, after a full discussion thereof and upon a vote being taken thereon, the 2381569v1 2 STATE OF MINNESOTA ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ST. JOSEPH 1, the undersigned, being the duly qualified and acting Secretary of the Economic Development Authority of the City of St. Joseph, Minnesota, DO HEREBY CERTIFY that 1 have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the Board of Commissioners, duly called and held on the date therein indicated insofar as such minutes relate to the Resolution Authorizing Termination of Lease, Execution of a Quit Claim Deed and Calling Prior Bonds. WITNESS my hand on August 26, 2009. Secretary 2381569v1 EXHIBIT A NOTICE OF CALL FOR REDEMPTION $700,000 PUBLIC PROJECT REVENUE BONDS OF 2003 (CITY OF ST. JOSEPH, MINNESOTA LEASE WITH OPTION TO PURCHASE PROJECT) ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ST. JOSEPH, MINNESOTA STEARNS COUNTY, MINNESOTA NOTICE lS HEREBY GIVEN that by order of the Board of Commissioners of the Economic Development Authority of the City of St. Joseph, Stearns County, Minnesota (the "EDA"), there have been called for redemption and prepayment on December 1, 2009 those outstanding bonds of the EDA designated $700,000 Public Project Revenue Bonds of 2003 (City of St. Joseph, Minnesota Lease with Option to Purchase Project), dated as of April 1, 2003, having stated maturity dates in the years 2010 through 2018, inclusive, and totaling $480,000 in principal amount and having CUSIP numbers listed below: Year CUSIP Number* 2010 2011 2012 2013 2014 2915 2016 2017 2018 The bonds are being called at a price of par plus accrued interest to December 1, 2009, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at U.S. Bank National Association, Attention: Paying Agent Services, 60 Livingston Avenue, St. Paul, Minnesota 55107. Dated: August 26, 2009 BY ORDER OF THE BOARD OF COMMISSIONERS, ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ST. JOSEPH, MINNESOTA *The EDA shall not be responsible for the selection of or use of the CUSIP numbers, nor is any representation made as to their correctness indicated in the notice. They are included solely for the convenience of the holders. 2381569v1 A-1