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HomeMy WebLinkAboutResolution 92-36 RESOLUTION NO. 92-36- A RESOLUTION PROVIDING FOR THE EXECUTION AND DELIVERY OF A GUARANTEED ENERGY SAVINGS CONTRACT AND A LEASE-PURCHASE OPTION AGREEMENT WITH HONEYWELL, INC. BE IT RESOLVED by the City Council of the City of Columbia Heights, Minnesota (the "City"), as follows: Authority. The City is, by the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 465.71, as amended, authorized to enter into lease-purchase agreements to finance energy saving improvements and equiDment. Documents Presented. Honeywell, Inc. (the "Provider"), has proposed to this Board that the City enter into a guaranteed energy savings contract (the "Service Agreement") and a Lease-Purchase Option Agreement as described below. Forms of the following documents (each to be dated as of November 1, 1992 or such other date or dates as shall be mutually agreed upon) have been submitted to the City and are now on file: Service Agreement between the City and the Provider, whereby the Provider agrees to furnish certain energy saving improvemenst (the "Improvements") and guarantees that the energy or operating cost savings will meet or exceed the costs of the Improvements; and (b) Lease-Purchase Option Agreement (the "Lease"), whereby the Provider, as lessor, agrees to lease the Improvements to the City, as lessee, and grants the City an option to purchase the Improvements as provided therein, and the City agrees to pay payment ("Rental Payments") including principal and interest components in monthly installments during the term of the Lease; and (c) Escrow Agreement (the "Escrow Agreement") among the Provider, the City and First Trust National Association, Saint Paul, Minnesota, as Escrow Agent, authorizing the execution and delivery by the Escrow Agent of Certificates of Participation (the "Certificates"), evidencing proportional interests of the owners thereof in the Rental Payments to be made by the City under the Lease. o Findings. It is hereby found, determined and declared that: (a) The amount to be saved in energy and operation costs over seven years from the date of installations is likely to exceed the amount the City would spend on the energy conservation measures to be undertaken pursuant to the Service Agreement, and in the Service AGreement the Provider provides a written guarantee that the energy or operating cost savings will meet or exceed the costs of the Improvements. (b) There is no litigation pending or, to the best of its knowledge, threatened against the City relating to the Improvements, the Lease or the Certificates, or questioning the organization, powers or authority of the City. (c) o The execution, delivery and performance of the City's obligations under the Service AGreement, the Lease and the Escrow AGreement do not and will not violate any order of any court or other agency of Government of which the City is aware or in which the City is a party, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. Approval, Execution and Delivery of Service AGreement, Lease and Escrow Agreement. The City shall proceed forthwith to enter into the Service AGreement, the Lease and the Escrow Agreement, and the City hereby approves a purchase order (the "Purchase Order") between Honeywell, Inc. and Miller & Schroeder Financial, Inc. (the "Underwriter") providing for a purchase of all Certificates by the Underwriter which produces net proceeds (after payment of costs of issuance as provided in the Escrow Agreement) in an aggregate amount sufficient to provide not more than $639,823 of Improvements and not more than six months' capitalized interest at an effective cost to the City not to exceed 6.80% per annum. The Certificates shall mature and be subject to redemption at the times and in the amounts, bear interest at the rates, and contain such other terms, as set forth in the Escrow AGreement, which terms are for this purpose incorporated in this resolution and made a part hereof. ° Approval and Execution of Documents. The forms of Service Agreement, Lease and Escrow Agreement referred to in paragraph 2 are approved. The Assignment of Provider to Escrow Agent of all Provider's right, title and interest in and to the Lease and Rental Payments, for the benefit of owner of Certificates is also hereby approved. The Service AGreement, the Lease and the Escrow AGreement shall be executed in the name and on behalf of the City by the Mayor and City Manager, or other officers of the City, in substantially the form on file, but with all such completions and changes therein, not inconsistent with Minnesota Statutes, Section 465.71 or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all documents shall be delivered and filed as provided therein. o Offerinq Memorandum. In connection with the offer and sale of Certificates by the Undewriter, the City hereby approves the circulation by the Underwriter of an Offering Memorandum describing the certificates and related matters, provided the Offering Memorandum (including any preliminary Offering Memorandum) shall be in such form as the Mayor or City Manager, with the advice of legal counsel to the City, shall approve. The City shall cause to be provided to the Underwriter, no later than seven days after approval of the final Offering Memorandum, but in any event in sufficient time to accompany any confirmation sent by the Underwriter to any purchaser of the Certificates, sufficient copies of the Offering Memorandum to satisfy the Underwriter's obligations under Rule 15c2-12 of the Securities Exchange Act of 1934 with respect to the distribution of the Offering Memorandum. o Designation Under Internal Revenue Code Section 265(b). The City hereby designates the Lease as "qualified tax- exempt obligation" for purposes of Section 265(b) of the Internal Revenue Code of 1986, as amended (the "Code"). The reasonably anticipated amount of tax-exempt obligations which will be issued by the City in the current calendar year does not exceed.S10,000,000. Tax Matters. The City expects that the Lease will be exempt from the arbitrage rebate requirements of Section 148(f) of the Code, by reason of the exception provided in Section 148(f)(4)(B) (relating to obligations the gross proceeds of which are expended no later than six months after this date of issue) or (if applicable) the exception provided in Section ~148(f)(4)(D) (relating to obligations issued during the calendar year in which the issuer does not reasonably expect to issue more than $5 million of tax-exempt obligations). The City agrees, however, that it will comply with the requirements of Section 148(f) of the Code to the extent applicable, and it will not cause the proceeds of sale of the Certificates to be invested or used in such a manner as to cause the Lease to be deemed an "arbitrage bond" under Section 148 of the Code, a "private activity bond" under Section 141 of the Code, or an "advance refunding bond" under Section 149(d) of the Code. Certificates, etc.. The Mayor, the City Manager and other officers of the City are authorized and directed to Drepare and furnish to bond counsel, the Provider, the Escrow Agent and the Underwriter certified copies of all proceedings and records of the City relating to the Service Agreement, the Lease, the Offering Memorandum (including certification that the Offering Memorandum is deemed "final" as of its date for purposes of Rule 15c2- 12 promulgated under the Securities Exchange Act of 1934), and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise know to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained herein. Passed this 9th day of November, 1992. Offered by: Seconded by: Roll call: Ruettimann Peterson Clerkin, Ruettimann, Peterson, Murzyn - aye Nawrocki - nay --~nne St~uden{,~ouncil Mayor Donald J. l~'urz~{, Jr. Secretary