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CR2002-156 St Therese Bond CITY OF . - ~ September 24, 2002 Council Report 2002-156 hOPK1NS . PUBLIC HEARING, SALE OF REVENUE BONDS ST, THERESE SOUTHWEST ASSISTED LIVING PROJECT Proposed Action Staff recommends approval of the following motion: adopt Resolution 2002-87, authorizing the issuance, sale, and delivery of muIti- family housing revenue bonds (GNMA Collateralized Mortgage Loan~St. Therese Southwest Assisted Living Proiect), Series 2002, describing the form of and authorizing the execution of related documents, authorizing the use of an official statement. and providing for the security, rights. and remedies of the holders of said revenue bonds. subi ect to staff conditions as detailed in Council Report 2002-156. Overview 81. Therese is proposing to construct an 86-unit assisted living housing project adjacent to their existing facility. They received conditional use permit approval for this project last year. They are now asking City Council approval to facilitate the project by the issuance of multi- family housing revenue bonds to provide funding for construction. The principal amount of the issue will be approximately $11,500,000. . The Council has given preliminary approval to this issuance. Prior to issuance of the bonds, there needs to be a resolution approved at a public hearing. Primary Issues To Consider . What is the purpose of the financing? . Does the project meet the requirements of the City's policy regarding taxable/tax exempt fmancing? . What are the implications to the City as relates to this action? . Has legal counsel reviewed this matter? . What are the staff conditions? Supporting Documents . Application by 81. Therese . Resolution 87 e Financial Impact: $ 0 N/A _ Budgeted: Y IN _ Source: Related Documents (CIP, ERP, etc.): I Notes: I ~ City Council Report 2002-156, September 24, 2002- Page 2 . Primary Issues To Consider . What is the purpose of the financing? Local units of government are authorized to issue tax-exempt bonds to facilitate projects that are felt to be beneficial to the community. To utilize this type of financing tool the applicant must meet very specific federal requirements. The bond financing is, for the most part, for certain types of industrial and housing projects. Financing through this method provides a lower interest rate than could be secured from a private lending institution. . Does the project meet the requirements of the City's policy regarding taxable/tax exempt financing? The City adopted a policy relating to revenue bond financing in 1991. The policy allows the City to consider financing for an existing business/multi-family project within the City that is proposing to expand, relocate, or rebuild in an existing building. . 'Vhat are the implications to the City as relates to this action? . Revenue bonds are secured by the pledge of repayment strictly from the proposed project. The City is not liable to make any payment should there be a default. St. Therese presently has outstanding revenue bonds that have been previously approved by the City. Staff has not been infonned that the owner of the subject property is in default on any existing bonds. If the subject action were approved, the City would be issuing over 10 mil in bonds for 2002. Ehlers has stated this could potentially increase the interest rate slightly on the City TIF/PIR bonds that are scheduled to be sold (Ehlers has estimated this to be approximately $18,000, present value). Due to this situation, staff is reconnnending as a condition ofthe proposed action that the applicant make a payment to the City to reflect this additional cost. . Has legal counsel reviewed this matter? The City Attorney has reviewed the document related to this transaction. Furthermore, Stefanie Galey of Faegre & Benson has represented the City as bond counsel. . What are the staff conditions? The staff recommendation is based on the following condition: The applicant pays an additional payment over and above the required revenue bond issuance fee to reimburse the City for the additional interest cost of the . City's 2002 TIF/PIR bonds. r City Council Report 2002-156, September 24, 2002- Page 3 . Alternatives The City Council has the following alternatives regarding this action: 1) Approve the action as recommended by staff. 2) Deny the proposed action. With this action, St. Therese will need to secure private financing to proceed with this project. 3) Continue the item for additional information. . . FROM FAEGRE ~ENSON SEP. 8. 1 ( 11 -::>t:IHI't nvr~~~. .:..:......___ (WED) 8.21'02 12:11/ST 12:10/NO. '1862015115 P " 2 ~_._, 1 CIT\! OF HOPKINS 1010 FIRST STREET SOU'l'H HOPKINS, MN 5~343 ) OFFICE USE ONLY: pate Received: RQcaived by~ _ Type of Raqu.est; Taxable Bond Issue TaK~~~t Bond Issue F: ncfundinq of Previous Bond Issue APPL:ICA'l'rOIll TOll TAXABLE/TAX RXEHP'1' BOB>> FI.AHCI~ OR BOND REFUNDING (Complete as approprtate) APPLICANT I1WOB.MATt~ 1- Applicant/husiness naJIle:~V' '1":/1/'1 (J-('LfJ ~1v~{1'.LJ LLVV~j LU Contact person: "!fl1 tLt\?\E (. ()~6 tr{ . -0{X) ~ ~ -( ~- Addr.ss : -~ I.- city: -1~r\ statet Zip: SS -+6&_ . Telephone: (work) 1wJ- ~r"'f)~L&JD (home) ClS-d- -l-jLf-( - S~ L (r ) Fax: \,IVl Pif\-{;, M €J ~;M'flAbiA-'/"~ I thl'Y\ Int~rllst. in property: /1/ ' ,. ~..,' iI ~. ;. t/r'\.t 2. APFlicant 1 SI le.9al oounsQ] ,S~/ C(/nl~~ ~~. F1rm.:/(i t-- . . /' -) . 0v-v I:' Ac1drns. ,~) \r,}~Q fA J:1Lulu (I.e~, 5\'10J.--.110 \ Ci ty: Vt'\ i;V\liI'-L..i.L~Ml.<) State: llt'1.V"- Zip: Telephone: (wark) IJJl~ 7(ill~(d.c:( (home) Fax: far e~~ 'lte G:: - l u 60 3. Applioant's architect: ~UOVt l~Jt1J1L~/t~. adn&L:! Addresa: ~)\ l+OL\-'~ 0) '1\ ,}; ~J~--- u- city. -1L!t'i<:l"V'n_\,rt., <I . _ Sta~e: Ji!4ILL Z;p' _ '5S'lf-Q '~ Te.lephone: (work (Yt.}-11J -~JJ (home) . Fax: {Vl,}. - ~f7,~- 5'f :>os- ) FRoM FAEGRE ~ 8ENSON SEP. 8.1 97 t1:~1 nur~.1.J'-=>> .....J. ~ I 1"'"-"- [WEDI S. 21' 02 12 II/ST. 12:10/NO 4862015115 P 3 .' 0...---> C~'. 2 4. Applicantrs contractor: (If selected): 'tI'U A'\(L +--~'\") t h.{c./ . Firm: -I d ' '-.,":;:> . - ' AddrQ~s: {;" -0- ~OIYO Au t: \. S~ City: ~41 vV'\.-<-1 _, " :_tat~: --L11kL Zip: 5<:;- 3 L_~~ Telephone: (wQrJtJ q ~ /:)., -q ~J ~ ~hOl\le) -- - FaiC: ,qS-& -- C13S- - ?;to'-f4 5. Property owner(s) of reoord: ~ 'ihlJ y-tu .-.... L\ v' I_~!I \ &/t-1 (7t.J.f~,~ vi i .<LC.1, , j Addrlt.sse. : FC~i 1(1_ ~c~Jt City:. stato: Nln L Zip: S\ 1Lf5 Telephone: work) C1.<)a. ~ Cl''"f7~7))t (hOlI\li~) Pax: C1~J-/ C's ~1l0 l.::>jl~ v 6. Applicant.s business tOrft (corporation, partnership, sole . proprietorship, etc.) and state of incorporation or organization: ~ I vYr\&O ~ ~(~'~ " ~ . - L4 /'l tv ~,U'i '(l/';"'(j Ie . D l, .. 7. tr the applicant is a co~poration. list the officers, directors and stockholders hold1nq more than 5% of the stock of the cQrporation. State thei~ name, address, telephone and relationship to the applican~_ (If a corpoxqtion is not fcr~ed, list ~he poten~ial off\cers. dir'otoL~ and stockholders): I r1 . n~.~ e~~i~/ ~~ l4 vt'Cl,,( ,{. J ' G , ~. ~~ 8~~JJ .~;) ~t- 1 I . . FROM ~EGRE ~BENS'ON . 8.1 ( 11 ~ :>':lt1I'J "....,. r'\-....I1o-l ........... .,..__ (WED) 8.21'02 12.11/ST 12:10/NO. 4862015115 P 4 3 a. If the applicant i6 a partnership, list thQ qenQral partne~s . and any limited partners with more than 5t intere5t. (If the partnership is not farmed, giva lUil muoh data as p09Gibl~ eoneQrninq the potential partners) ~ ) - Il- ,4 . 9. List any oities to which you have previously applied for taxable/tax exempt bond financing within the last five years. 111&.. . 10. Has the applicant aver Dean in bankruptcy? It yes, please flXPlain: ) .~ ':1t,/Jl?dJ ~ )~\,J't.,~f l'1\.~ Vti('1\~f-- ~rtil10~~[r:JtLA.~ L'-f(~L~ 4h.L- -.-J/l k- ,:11:l S ~~'?4 [ (~ 1, ':rJ... t TWIlL{ t tl ~4( ,,/i.W:t\{) I t.-v v~ LLs:!.- J\Cl_4. tr'l"0rr J 8 . 0 l' OV~ (...L '1 tc<. '. "~t <t! L-1/\ 11. Has the applieant Qver defaulted on any bQnd or mortqgg& commitm4nt? If yes, pl.ase explain: . .1 FROM FAEGRE & BENSON SEP,8,1997 11:S9R'1 HUt'I<..lI'f::l....~11 ~ (WED) 8.21'0212:12/ST.12:10/NO.4862015115 P 5 4 PROJRCf lNFORMATXON · 1. Proje"~ name' j'lli 1d-LlCtdf.<1 ~~Q I (Jv~( LL(1- 2. Leqal description of thQ site: ~)~L- ~t~~ ffl: ' & " '\ J {c . L(J~ ,\ 3. Briet description or thQ nature of the bus principal services or produots, etc.: ,. I, ~ /d XJt 4_ Amount of bond issue requested: $ 5. Who is lend1n9 interim finanoing, and in what a~ount: . <::JAI>US i"',f:C (I,.f ~ .. ("1't'lH-<;pt. t'" a1"-~ "Q I BUBXNBSS I~O~1IOH 1. Number of e~ployees in Hopkins? Full Time Part Time A. Before this !;J:t"oject i ~I if ----112-- a. After this pro)Qct: '~ S-~1\J'oi:> 2. Projected annual sales: $ \::J .\ "1 (,' I DO ~; l { 3. proj ected ~nnui;l;l payroll: $ 5 '1 S~ GO 0 4. !s t~e projeec aS5ooi~tad with an existing Hopkins business? A. yes---tL B. No - .,' FROM FAEGRE & BENSON , SEP. 8.1997 l1:Sl3f.:t'1 1-<<..It-'K..l1'I::J '-~ " n............. (WED) 8.21' 02 12:12/ST. 12:10/N0. 4862015115 P 6 5 5. If thi6 project is associated with an ~xi5ting Hopkins . business, which or the following apply: A. RGlocation 1 } B. Expans ion ~ >< =- C. Rehabilita ion 6. Will you occupy this projeet after oompletion? A. 'leG: $- B. No 7. If no, state name of future lesseee and status of oommitments or lease agreements: (/1 r4t ,. B. Estimated date ot oonstruction: ~mpletion.~~ ()~ . 9. Will any public off~oial ae the C!ty, direotlY or indjrectlYI to the best of your knowledqe, benefit by the issuance of the ) City's tax-exampt financing for this ~rojeot aeeordinq to Minnesota statutes, s~ption 412.871 If so, please explain:': . nc - '-ILING REOUIUHENTS You must provide all of the following items with you~ applioation, unless the Director of Planning & Eeonomie Devslopment waives a requirli!1I1ent ~ 1. If the project requires approval by the Zoninq and Planning Commission, you must apply for these approvals prior to or with this application. If zonin9 or Planning Co~mission approval is not required, you must 6ubm~t a list of property owners and their addresses, for ycu~ property and for all properties . within 3!30 feet. An~~abstract company must certify this list, Abstract companies are listed in the yellow pages. FROM FAEGRE ~ENSON . SEP. 8,1 lC::W4"1 M~"".L(1.J r.....L. I 1".....-. (WED) 8,21' 02 12:12/8T, 12:10/NO. 4862015115 P 7 6 .. 2. A written opinion, with supporting justification, from an expert 8cceptabl~ to the Director ot Planning & Economic Dsvelopment, to dooument t~at the dQVQ10pment will not adversely effect similar, eKisting devalopmQnts. This requirement may be waived if there are no si~ilar devaloprnents in the ar~a ot your project. J. A public hearinq notice and reBol~tion at preliminary approval. You must have thQs~ items prQparQQ by the Cityls bond oounsel. 4. An applioacion tee of $5,000. Make your check out to the City of Hopkins. ThiQ feQ is not refundable and ia soparatQ from the Bond Counsels'. city Attorneysl, or closing tees. P{tO~EDttRB J.. Return this application to the community Development Department:. 2. The City council will hold a pu~11c hearin9 and daoide whe~her to ~pprave your applioation. city staff'~ill notify you of the meeting. e: RBQUIRBI4:elWS :rOR. TAX-SXE!U''l'I'lAXA!lloB BON!) I'I~CIJrG Your application must meet the following requirements for approval of taxable/tax-exempt hond finanoing: J.. The prDjec~ shall not require a significant amount of public money for city improvements if thg city council d~termine5 that the site is premature for development. :2 . The notes or bgnd& shall be for an is~ue not less than $250,000. .3 . Construction must begin within one year of preliminary approval. ~he city Council may grant a time extension if just oause is shown. 4. contraetors doing work on projeots funded in whole or ~n part by tax-exempt financing~ . a. Shall not discriminate in tho hiring and firing of e) e~ploYQQS on the basis or race, color, ~reed, religion, national origin, sexl marital status, age, disability or the nee a for public assistance. , --- .- FRoM FAEGRE & BENSON . SEP. 8.1997 lZ:[D-'M HU-'" II 't:) 1...1. I I rln'o..'- (WED) 8/1' 02 12:12/ST, 12:10/NO. 4862015115 P 8 7 . b. Shall pay employees as provided under the Unite~ States Code, Section 276AI as amen~.d thrQugh June 23/ 19861 and .) under Minnesota Statutes 1985, sections 177.41 - 177.44. c. Shall Qm~loy Minnesota residents in at least BO% of thQ jobs created by the projQct. In addition, at least Got ot these em1loyeBB shall be residents of the seven-county matropol tan area. Residential status sh~ll be determined a3 of the date of the projectts approval by the city Counoil. Howaver, if the contractor can ~how that these quotas are not pogsible because of a &hortage of qualified p*rsonnel in speoifio SkillS, the contractor may request D rQ!eaae from the city Counoil of the two resid~ncy requirements. These re~irementB shall continue for the 1~n9th of the construction project. d. Shall ba aotive participants in a StatQ of Minnesota apprentice program, approved by t~~ OepartmQnt of Labor and Industry. e. The above requirements shall apply to all subcontractors working on the project. 5. You uust USQ the City'S Bond Counsel. 6. The project must involve an ~xisting business that the city . Wish~& to Qxpand or a n$W business wnich the city wishes to attract. A business is the manufacturing, di5tri~ut1on, sale, storaqe or making of any merehandise, real estate, produce fooo, housing or se~vicas which will produe~ income tor one or mo~e individuals. An existing business is a commercial project that has operated for at least one year in the City. A new business is a co~ercial project which does not qualify as an aKisting bUsiness. a. e~istin9 businGss criteria: The city will consider any expanaion, relocation or rehabilitation of an existin~ business for &pp~oval. b. New business oriteria: The city will only consider a new business for approval if it: ( l) Offers at least 400 hours per week of new, year-around employment, or (2 ) Involves the rehabilitation of a vacant or scheduled to be vacated struoture, or (3) Is within a de$ignat.d d~v~lopm~nt or rQdevalopment target area, and (4) Has a low potential for creatinq pollution. . 7. The project must exce~d minimum ceda requirements by including at least five of the fallow~nq featur~~ into the project: FROM FAEGRE ~BENSON SEP. 8.1 { 1<:::; "HM'I nvrf'\...Lll..JI '-".L I ~ I ~__ (WED) 8.21' 02 12:13/ST l2:10/NO. 4862015115 P 9 . e . a. Brick b. B~ildinq design should be a distinotive, nonHqQnQria style. o. A noticeable incr.a.. in the s!~. and quantity ot landscape plantinqs over what the City normally requires. d. UndBrqround irriqation of all landscaping_ e. open space, other ~hmn required setbacks. f. At least 10* more parking than oode requires. 9. Walkway along street front~~es. h. All parking stall widths at least ten feet. 1. All signs sh~11 be at least 20% smaller or fewer than allowed by CClde. a. city staff shall review co.pli~nce with the appropriate request for refunding of previous bond issue~. 9. You must pay an administrative fee to the Cit~ ot one half percent of the hond iSSUQ. The C~ty will cred~t the applioation fee aqainst the administrative fee. . AGRB'BJIBR'r I, by siqninq this application, aqre6 to ~e followinq: 1. I have read and will abide by all the requirements Of the City for taxable/tax-exempt financing. I will also commit all contraotors, subcontractors and any other major eon~~ibueQr$ to tha project to all segments applicable to them. I am awa.re that failure to comply by mysel:r or any of the above can result in cancellation of th~ resolution. :2 . ~he above information is true and correct. 3. :I agree to pay all costs involve!:! in the. leg-al and fiscal k"Bview of this proj Bct. These coats inolud.e the Bend cQunsel and city A~torn.y, and all ccs~s involved in tbe issuanoeof the bonds tc finance the project. 4. ~ understand that the City ~eserves the right to deny fin~l appr,val, req&rdless of prel~ihary approval o~ the deqree of c t ion eo~~let~d. . %.-,,- (~\- O~ Date .. financap . CITY OF HOPKINS Hennepin County RESOLUTION NO. 2002-87 A RESOLUTION AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF MUL TIF AMIL Y HOUSING REVENUE BONDS (GNMA COLLATERALIZED MORTGAGE LOAN - ST. THERESE SOUTHWEST ASSISTED LIVING PROJECT), SERIES 2002; PRESCRIBING THE FORM OF AND AUTHORIZING THE EXECUTION OF RELATED DOCUMENTS; AUTHORIZING THE USE OF AN OFFICIAL STATEMENT; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES OF THE HOLDERS OF SAID REVENUE BONDS. WHEREAS, the City of Hopkins, Minnesota (the "Issuer" or the "City") is a municipal corporation and political subdivision duly organized and existing under the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to the Constitution and laws of the State of Minnesota, . particularly Minnesota Statutes, Chapter 462C, as amended (the "Act"), the Issuer is authorized to carry out the public Purp9ses described therein and contemplated thereby in the financing of housing within its jurisdiction, by issuing revenue bonds to defray, in whole or in part, the development costs of a rental housing development, and by entering into any agreements made in connection therewith and by pledging any such agreements as security for the payment of the principal of and interest on any such revenue bonds; and WHEREAS, The Terraces Assisted Living, LLC (the "Borrower") has submitted an application to the City requesting revenue bond financing for a project (the "Project") generally described as the acquisition and construction of an 86 unit assisted living multifamily housing facillty for elderly persons, to be constructed adjacent to the St. Therese Southwest independent living facility at 1011 Feltl Court in the City of Hopkins; and WHEREAS, the Issuer has adopted Resolution No. 2002-78 giving preliminary approval to the issuance of revenue bonds to finance the Project; and WHEREAS, the Issuer has on this date conducted a public hearing on a housing program (the "Program") for the issuance of revenue bonds to finance the Project, after due publication of notice thereof in a newspaper of general circulation in the City; and WHEREAS, as required by the Act, the Program has been submitted to the . Metropolitan Council for its review and comment, and the Metropolitan Council has commented favorably; and . WHEREAS, the bonds shall be payable solely from amounts pledged therefore under the Indenture hereinafter referred to, and neither the Issuer (except to the extent of the trust estate pledged in the Indenture), Hennepin County (the "County") nor the State of Minnesota nor any political subdivision thereof shall be liable on the Bonds, and the Bonds shall not be a debt of the Issuer (except to the extent of the trust estate pledged in the Indenture), the County or the State of Minnesota or any political subdivision thereof, and in any event shall not give rise to a charge against the credit or taxing power of the Issuer, the County, the State of Minnesota, or any political subdivision thereof; NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF HOPKINS, MINNESOTA THAT: Section 1. The Issuer acknowledges, finds, determines, and declares that the preservation of the quality of life in the City is dependent upon the maintenance, provision, and preservation of an adequate housing stock, which is affordable to elderly persons and families of low or moderate income, and that accomplishin.g this is a public purpose, and the Program is hereby adopted. Section 2. For the purpose of financing a portion of the costs of acquisition, construction and equipping of the Project, but subject to the provisions of Section 15 of this Resolution, there is hereby authorized the issuance of Multifamily Housing Revenue Bonds (GNMA Collateralized Mortgage Loan - S1. Therese Southwest Assisted Living Project) Series 2002 (the "Bonds") the Bonds, in an aggregate principal amount not to exceed . $11,500,000. The Bonds shall bear interest at such rates, not to exceed 6.75% per annum, shall be in such denominations, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other details and provisions as are prescribed by the Indenture described herein. The final principal amount and interest rate shall be determined by the Mayor, in his discretion; provided that the execution thereof by the Mayor shall be conclusive evidence of such determination. Section 3_ The Bonds shall be special obligations of the Issuer payable solely from the revenues of the Project, in the maMer provided in the Indenture. The Bonds do not constitute indebtedness, liability, general or moral obligation (except to the extent of the trust estate pledged under the Indenture) or a pledge of the faith and credit or any taxing power of the Issuer, the County, the State of Minnesota, or any political subdivision thereof. The Issuer hereby authorizes and directs the Mayor of the Issuer (the " Mayor") and the City Manager of the Issuer (the "City Manager") to execute the Indenture of Trust (the "Indenture") between the Issuer and U.S. Bank National Association (the "Trustee"), and hereby authorizes and directs the execution of the Bonds in accordance with the Indenture, and hereby provides that the Indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the bondholders, the Issuer, and the Trustee as set forth therein. All of the provisions of the Indenture, when executed as authorized herein, shall be in full force and effect from the date of execution and delivery thereof. The Indenture shall be . substantially in the form on file with the Issuer on the date hereof, and is hereby approved, with such necessary and appropriate variations, omissions, and insertions as are not materially inconsistent with such form and as the Mayor, in his discretion, shall determine; _0-" . provided that the execution thereof by the Mayor shall be conclusive evidence of such determination. Section 4. The Mayor and the City Manager are hereby designated as the representatives of the Issuer with respect to the issuance of the Bonds and the transactions related thereto and are hereby authorized and directed to accept and execute the Bond Purchase Agreement (the "Bond Purchase Agreement") from U.S. Bancorp Piper Jaffray Inc. (the "Underwriter"). All of the provisions of the Bond Purchase Agreement, when executed and delivered as authorized herein, shall be in full force and effect from the date of execution and delivery thereof. The Bond Purchase Agreement shall be substantially in the form on file with the Issuer on the date hereof, and is hereby approved, with such necessary and appropriate variations, omissions, and insertions as are not materially inconsistent with such form as the Mayor, in his discretion, shall detennine; provided that the execution thereof by the Mayor shall be conclusive evidence of such determination. Section 5. The Mayor and the City Manager are hereby authorized and directed to execute the Financing Agreement, among the Issuer, the Trustee, the Lender (as defined therein) and the Borrower (the "Financing Agreement"), and when executed and delivered as authorized herein, the Financing Agreement shall be in full force and effect from the date of execution and delivery thereof. The Financing Agreement shall be substantially in the form on file with the Issuer on the date hereof, which is hereby approved, with such necessary variations, omissions, and insertions as are not materially inconsistent with such form and as the Mayor, in his discretion, shall detennine; provided that the execution thereof by the . Mayor shall be conclusive evidence of such determination. Section 6. The Mayor and the City Manager are hereby authorized and directed to accept and execute the Tax Regulatory Agreement (the "Tax Regulatory Agreement") with the Borrower and the Trustee and, when executed and delivered as authorized herein, the Tax Regulatory Agreement and shall be in full force and effect from the date of execution and delivery thereof. The Tax Regulatory Agreement shall be substantially in the form on file with the Issuer on the date hereof, which are hereby approved, with such necessary variations, omissions, and insertions as are not materially inconsistent with such form and as the Mayor, in his discretion, shall determine; provided that the execution thereof by the Mayor shall be conclusive evidence of such detennination. Section 7. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred, and duties and liabilities imposed, upon the Issuer by the provisions of this resolution or of the Indenture or other documents authorized hereby shall be exercised or performed by the Issuer, or by such officers, board, body, or agency as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation, representation, or agreement herein contained or contained in the Indenture or other documents authorized hereby shan be deemed to be a covenant, stipulation, obligation, representation, or agreement of any officer, agent, or employee of the Issuer in that person's individual capacity, and neither the members of this City Council nor any officer or employee executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. . ---- - - -- . Section 8. Except as herein otherwise expressly provided, nothing in this resolution or in the Indenture, expressed or implied, is intended or shall be construed to confer upon any person, finn, or corporation other than the Issuer, and the Trustee, as fiduciary for owners of the Bonds, any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision hereof or of the Indenture or any provision thereof; this resolution, the Indenture and all of their provisions being intended to be and being for the sole and exclusive benefit of the Issuer and the Trustee as fiduciary for owners of the Bonds issued under the provisions of this resolution and the Indenture, and the Borrower to the extent expressly provided in the Indenture. Section 9. In case anyone or more of the provisions of this resolution or of the Indenture or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, stich illegality or invalidity shall not affect any other provision of this resolution or of the Indenture or of the Bonds, but this resolution, the Indenture, and the Bonds shall be construed as if such illegal or invalid provision had not been contained therein. The terms and conditions set forth in the Indenture, the pledge of revenues derived from the Project referred to in the Indenture, the pledge of collateral derived from the Project referred to in the Indenture, the creation of the funds provided for in the Indenture, the provisions relating to the application of the proceeds derived from the sale of the Bonds pursuant to and under the Indenture, and the application of said revenues, collateral, and other monies are all commitments, obligations, and agreements on the part of the Issuer contained in the Indenture, and the invalidity of the Indenture shall not affect the commitments, obligations, . and agreements on the part of the Issuer to create such funds and to apply said revenues, other monies, and proceeds of the Bonds for the purposes, in the manner, and according to the terms and conditions fixed in the Indenture, it being the intention hereof that such commitments on the part of the Issuer are as binding as if contained in this resolution separate and apart from the Indenture. Section 10. The Mayor and City Manager of the Issuer, officers of the Issuer, and attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required by them by or in connection with this resolution and the Indenture and the other documents referred to above for the full, punctual, and complete performance of all the tem1s, covenants, and agreements contained in the Bonds, the Indenture and the other documents referred to above, and this resolution. Section 11. The Issuer hereby authorizes the use by the Underwriter in connection with the sale of the Bonds, of a preliminary and final Official Statement, in substantially the form of the Preliminary Official Statement on file with the Issuer as of the date hereof. The Official Statement is the sole material authorized by the Issuer for use in connection with the offer and sale of the Bonds, The Issuer has not made any independent investigation of the information contained in the Official Statement, makes no representations or warranties as to the information contained therein and shall have no liability in connection with the contents of or use of such offering materials. Section 12. The Mayor and the City Manager are hereby designated and authorized to take such administrative action as is permitted or required in connection with the issuance . of the Bonds by the terms of the Indenture, the Financing Agreement, the Tax Regulatory Agreement and the Bond Purchase Agreement. -- --- --- - --- . . Section 13. The Mayor and the City Manager of the Issuer are authorized and directed to execute and deliver any and all certificates, agreements or other documents which are required by the Indenture, the Financing Agreement, the Bond Purchase Agreement, the Tax Regulatory Agreement, or any other agreements, certificates or documents which are deemed necessary or appropriate by bond counsel to evidence the validity or enforceability of the Bonds, the Indenture or the other documents referred to in this Resolution, and all such agreements or representations when made shall be deemed to be agreements or representations, as the case may be, of the Issuer. Section 14. If for any reason the Mayor or City Manager of the Issuer is unable to execute and deliver those documents referred to in this Resolution, any member of the City Council of the Issuer may execute and deliver such documents with the same force and effect as if such documents were executed by the Mayor or the City Manager. Section 15. Not later than November 1, 2002, the Borrower shall advise the Development Director of the City if it intends to request the issuance of the Bonds in calendar year 2002. In such event, the Borrower shall deposit $18,000 with the Issuer within ten days of the date of such notification, to be applied towards any additional interest cost incurred by the Issuer with respect to its bonds as a result of unavailability of designation as bank qualified obligations. The Borrower shall pay to the Issuer any additional interest cost in excess of $18,000 upon detemrination of the actual amount, which detennination shall be made as of the date of sale of Issuer bonds othelWise eligible for designation as bank qualified obligations, and the Issuer shall refund to the Borrower the amount, if any, by . which the Issuer's additional interest cost as so determined is less than $18,000. If the Borrower does not make any of the payments required by this Section 15, the Issuer will not issue the Bonds approved hereby until January 1,2003, or thereafter. Section 16. This resolution shall be in full force and effect from and after its passage. PASSED AND APPROVED this day of October 2002. THE CITY OF HOPKINS, MINNESOT A Mayor ATTEST: City Clerk Ml:918259.03 .