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