2002-105
CITY OF HOPKINS, MINNESOTA
RESOLUTION NO. 2002-105
RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE
AND A LEASE-PURCHASE AGREEMENT, AND APPROVING AND AUTHORIZING
ISSUANCE OF LEASE REVENUE BONDS AND EXECUTION OF RELATED DOCUMENTS
BE IT RESOLVED by the City Council of the City of Hopkins, Minnesota, as follows:
Section 1.
Recitals.
1.01. The City is authorized by Minnesota Statutes, Section 465.7l, as mnended, to
acquire real and personal property under lease-purchase agreements.
1.02. The City has agreed with the Housing and Redevelopment Authority in aIld for the
City of Hopkins (the "Authority") that pursuant to a Grolmd Lease dated as of December 1, 2002
(the "Ground Lease"), the Authority will acquire certain property (the "Site") from the City, aIld the
Authority will lease such property, together with the buildings, structures or improvements now or
hereafter located thereon (the "Facilities"), to the City pursuant to a Lease-Purchase Agreement
dated as of December 1,2002 (the "Lease").
1.03. Pursuant to a Mortgage and Secmity Agreement aIld Trust Indenture dated as of
December 1, 2002 (the "Indenture") between the Authority aIld Bankers Trust Company, Des
Moines, Iowa, as trustee (the "Trustee"), the Authority will issue its Public Facility Lease Revenue
Bonds, Series 2002A (public Works and Fire Station Facility) (the "Series 2002A Bonds") in all
aggregate principal mnOlmt of$1O,760,000.
1.04. Under the Indenture, proceeds of the Series 2002A Bonds will be used to establish a
Debt Service Reserve Fund to secure the Series 2002A Bonds aIld to pay costs of acquisition,
construction aIld equipping of the Facilities desclibed in the Lease, purSUaIlt to a Disbursing
Agreement dated as of December 1, 2002 (the "Disbursing Agreement"), among the AuthOlity, the
City, the Trustee aIld Commercial PaIiners.
1.05. Pursuant to the Indenture, the Authority will assign and mOligage to the Trustee all
of the Authority's right, title and interest in and to the Site, the Facilities, the Grolmd Lease, the
Lease and the Lease Payments to be made by the City thereunder (other thaIl certain lights to
indemnification aIld payment of expenses) as security for the Sel1es 2002A Bonds.
1.06. Under the Indenture, the Authority will cause MBIA Insurance Corporation (the
"Insurer") to issue a Debt Service Reserve Surety Bond (the "Surety Bond") in satisfaction of the
Reserve Requirement as defined in tlle Indenture.
1.07. In connection with the Surety Bond, the Authority will enter into a FinaIlcial
GUaI"anty Agreement dated as of December 1, 2002 between the Authority aIld the hlsurer (the
"FinaIlcial GUaI"anty Agreement"), setting forth the respective rights and obligations of the
Authority and the Insurer under the Surety Bond.
1.08. Fonns of the Ground Lease, the Lease, the Indenture, the Disbursing Agreement, the
Financial GuaraIlty Agreement, the Official Statement for the Series 2002A Bonds and a
Continuing Disclosure Certificate ofthe City dated as of December 1, 2002, have been prepared and
submitted to tins Council and are on file with the City.
Section 2. Findings. On the basis of information given the City to date, it is hereby
found, detelmined aIld declared that:
(a) it is desirable and in the best interest of the City to enter into the Ground
Lease, the Lease, the Disbursing Agreement and the Continuing Disclosure Certificate.
(b) the telIDS of the Grolmd Lease, the Lease, the Disbursing Agreement, the
hldenture, aIld the Continuing Disclosure Certificate are fOlmd to be advantageous to the
City aIld the form and terms thereof are hereby approved.
(c) The Site aIld the Facilities described in the Lease constitute essential
govemment property, and the City presently intends to appropriate all Lease Payments
under the Lease for the term of the Lease; however, the obligations of the City under the
Lease are not to be payable from nor chaI"ged upon aI1Y funds of the City other than the
nmds appropriated aImually to the payment thereof, and the Lease shall not constihlte a
charge, lien or enCmnbraI1Ce, legal or equitable, upon any property of the City except its
interest in the Lease and in the Site and the Facilities Imder the Lease.
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authorized and directed to execute aIld deliver the GrOlmd Lease, the Lease, the Disbursing
Agreement aIld the Continuing Disclosure Celiificate on behalf of the City, substantially in the
fOlms on file, but with all such ChaIlges therein as shall be approved by the officers executing the
SaIne, wlnch approval shall be conclusively evidenced by the execution thereof. Copies of all of the
transaction documents shall be delivered, filed aIld recorded as provided therein. The Mayor and
the City Manager and other City officers are also authorized and directed to execute such other
instruments as maybe required to give effect to the transactions herein contemplated.
The Official Statement, as completed and supplemented, and its distribution to potential
purchasers of the Series 2002A Bonds, are hereby approved. The City, as an "obligated person"
with respect to tile Series 2002A Bonds, will comply with the requirements of Rule 15c2-l2(b)(5)
of the Securities aIld Exchange Commission, as set forth in the Continuing Disclosure Celiificate.
Section 4. Approval of Issuance and Sale of Selies 2002A Bonds. The issuance and
sale by the AuthOlity of the Series 2002A Bonds as described in the Official Statement is hereby
approved in all respects. The City will pay, from proceeds ofthe Selies 2002A Bonds or from other
City nmds, the costs of issuance of the Series 2002ABonds.
Section 5. Payment of Lease Pavments. The City will pay to the Trustee, promptly
when due, all of the Lease Payments aIld other aInOlmts required by the Lease. To provide moneys
to make such payments, the City will include in its annual budget, for each Fiscal Year dUling the
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term of the Lease, commencing with the Fiscal Year ending on December 3l, 2003, moneys
sufficient to pay and for the purpose of paying all Lease Payments, a reasonable estimate of
Additional Lease Payments, and other mnounts payable under the Lease. The agreement of the City
in this Section is subject to the City's right to tenninate the Lease at the end of any Fiscal Year, as
set forth in Section 5.6 of the Lease.
Section 6.
Miscellaneous.
6.01. The City covenants aIld agrees with the Owners from time to time of the Series
2002A Bonds that the investment of proceeds of the Series 2002A Bonds, including the investment
of any revenues pledged to the Lease Payments which are considered proceeds under applicable
regulations, and accmnulated sinking funds, if any, shall be limited as to mnOlmt and yield in such
maImer that the Series 2002A Bonds shall not be "arbitrage bonds" within the meaning of Section
148 of the Intemal Revenue Code of 1986, as mnended, and applicable regulations thereunder, aI1d
that the City shall comply with all other applicable requirements of Section 148. On the basis of the
existing facts, estimates and circmnstances, including the foregoing findings and covenants, the City
hereby certifies that it is not expected that the proceeds of the Series 2002A Bonds will be used in
such manner as to cause the Series 2002A Bonds to be "arbitrage bonds" lmder Section 148 aIld any
regulations therelmder. The Site, the Facilities and the proceeds of the Series 2002A Bonds will
likewise be used in such maImer that the Series 2002A Bonds will not be "private activity bonds"
lmder Section 141 ofthe Intemal Revenue Code of 1986, as aInended, aI1d applicable regulations.
6.02. The officers of the City aI'e authorized aI1d directed to prepare and fumish to the
Oliginal purchaser of the Series 2002A Bonds, and to the attomeys approving the Series 2002A
Bonds, certified copies of all proceedings and records of the City relating to the power aIld authority
of the City to enter into the Grolmd Lease aIld the Lease within their knowledge or as shown by the
books aI1d records in their custody aI1d control, aIld such celiified copies aIld celiificates shall be
deemed representations of the City as to the facts stated therein.
6.03. The City covenants that it will file (or cause the AuthOlity to file) with the Intemal
Revenue Service the information required lmder Section 149(e) of the Intemal Revenue Code of
1986.
6.04. Capitalized tenns used herein aI1d defined in the Lease or the Indenture have the
meanings given in the Lease or the Indenture.
Section 7.
adopti,on.
Effective Date. This resolution shall be effective inmlediately upon its fmal
ADOPTED: / / - / r ' 2002.
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