HomeMy WebLinkAboutJune 12, 2017ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE SPECIALMEETING OF
JUNE 12, 2017
The meeting was called to order at 5:45 pm by President Szurek
Members Present: Williams, Murzyn,
Herringer, Schmitt, Novitsky, and Szurek
Members Absent: Buesgens
Staff Present: Joseph Kloiber, and Joseph Hogeboom
PLEDGE OF ALLEGIANCE- RECITED
BUSINESS ITEMS
1. CALL
FOR REDEMPTION OF PUBLIC FACILITIES LEASE REVENUE BONDS-RESOLUTION 2017-15
The City of Columbia Heights (the “City”) intends to refinance the Public Facilities Lease Revenue Bonds for
the Municipal Liquor Stores (the “Municipal Liquor Stores Bonds”) to achieve a lower interest rate and save money on its debt service payments. The City will issue its own bonds under
the authority of the City Charter (the “Refunding Bonds”), and will use the proceeds of the Refunding Bonds to pay off the outstanding principal and accrued interest on the Municipal
Liquor Stores Bonds. The City Charter requires a 30-day reverse referendum period after publication of a City ordinance authorizing the issuance of bonds. If the City receives a valid
petition within the 30-day period, it may not issue its bonds without an election. The City published its ordinance authorizing the Refunding Bonds on May 12, 2017, and thus the 30-day
petition period expires on Sunday, June 11. The City plans to award the sale of the Refunding Bonds on Monday, June 12, and will receive proceeds on Tuesday, July 6 (the “Closing Date”).
In
order for the Columbia Heights Economic Development Authority (the “EDA”) to prepay and redeem the Municipal Liquor Stores Bonds, the EDA is required to notify the bondholders at least
30 days before the date of redemption. Thus, the EDA must adopt a resolution authorizing notification of the bondholders and calling for the redemption of the Municipal Liquor Store
Bonds on August 1, 2017.
Staff recommends approval of Resolution 2017-15 as presented.
Questions from members:
Herringer asked what the regular term is for liquor bonds. Kloiber
told him it is 11 years.
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June 12, 2017
Williams said it is a good plan to sell the bonds as the rates will go up next year.
Motion by Williams, seconded by Schmitt, to waive the reading
of Resolution 2017-15, there being ample copies available to the public. All ayes. MOTION PASSED.
Motion by Williams, seconded by Novitsky, to adopt Resolution 2017-15, a resolution
consenting to the redemption and repayment of the Authority’s outstanding Public Facility Lease Revenue Bonds, series 2007B (Municipal Liquor Store Project). All ayes. MOTION PASSED.
COLUMBIA
HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2017-15
A RESOLUTION CONSENTING TO THE REDEMPTION AND PREPAYMENT OF THE AUTHORITY’S OUTSTANDING PUBLIC FACILITY LEASE REVENUE BONDS,
SERIES 2007B (MUNICIPAL LIQUOR STORES PROJECT)
BE IT RESOLVED By the Board of Commissioners of the Columbia Heights Economic Development Authority (the “Authority”), as follows:
Section
1. Recitals.
1.01. Pursuant to a Mortgage and Security Agreement and Trust Indenture, dated as of September 1, 2007 (the “Indenture”), between the Authority and U.S. Bank National Association,
as trustee (the “Trustee”), the Authority issued its Public Facility Lease Revenue Bonds, Series 2007B (Municipal Liquor Stores Project) (the “Authority Bonds”), dated September 19,
2007, in the original aggregate principal amount of $5,040,000. The proceeds of the Authority Bonds were used to provide financing for the construction of two new municipal liquor stores
(the “Improvements”) in the City of Columbia Heights, Minnesota (the “City”). The Authority acquired a leasehold interest in the real property on which the Improvements were constructed
(the “Site”) pursuant to a Ground Lease, dated as of September 1, 2007 (the “Ground Lease”), between the City, as lessor, and the Authority, as lessee. The Authority Bonds are secured
by lease payments (the “Lease Payments”) from the City to the Authority pursuant to a Lease Purchase Agreement, dated as of September 1, 2007 (the “Lease”), between the Authority, as
lessor, and the City, as lessee.
1.02. Section 8.1 of the Lease permits the City to purchase the Site and the Improvements at any time, in accordance with Article V of the Lease.
Pursuant to Section 5.5 of the Lease, the City may purchase all or a portion of the Site and the Improvements by depositing funds to the Trustee for deposit in the Bond Fund established
under the Indenture and applied to the payment of principal of and interest on the Authority Bonds.
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June 12, 2017
1.03. Pursuant to a resolution to be considered by the City Council of the City on the date hereof (the “City Resolution”), the City has determined
to exercise its option to prepay the Authority Bonds in order to acquire the Site and the Improvements. Section 8.2 of the Lease requires that the City give notice to the Authority
of its intention to exercise its option to prepay the Lease Payments and acquire the Site and the Improvements at least forty-five (45) days in advance of the date of prepayment and
purchase. The City Finance Director gave such notice at the Authority’s regular meeting on February 6, 2017. In order to prepay the Lease Payments and acquire the Site and the Improvements
from the Authority, the City will issue its General Obligation Refunding Bonds, Series 2017A (the “City Bonds”), in the aggregate principal amount of approximately $3,375,000. Proceeds
of the City Bonds will be used to redeem and prepay the outstanding Authority Bonds in an amount sufficient to prepay the Lease Payments.
1.04. The Authority Bonds are currently outstanding
in the aggregate principal amount of $3,700,000 and are callable on February 1, 2017, at a price of par plus accrued interest. Pursuant to the City Resolution, the City will request
that the Authority consent to and call the Authority Bonds for redemption on August 1, 2017 (the “Redemption Date”), in accordance with Section 8.2 of the Lease.
Section 2. Redemption
of Authority Bonds.
2.01. It is determined that it is in the best interests of the sound financial management of the Authority and the City that the principal amount of the Authority
Bonds coming due on February 1, 2018 and thereafter, comprising all of the Authority Bond subject to redemption, be prepaid and redeemed on the Redemption Date (or on the first date
thereafter for which the registrar for the Authority Bonds (the “Registrar”) can provide proper notice to the holders of the Authority Bonds), and the Authority Bonds are hereby called
for redemption on that date in the aggregate principal amount of $3,700,000, subject to adoption by the City of the City Resolution.
2.02. The Registrar is authorized and directed to
mail notice of call for redemption of the Authority Bonds in the form attached hereto as EXHIBIT A to the registered owner of the Authority Bonds to be redeemed at the address shown
on the registration books kept by the Registrar.
2.03. Officials of the Authority are authorized and directed to take all actions and execute any documents necessary to carry out redemption
of the Authority Bonds, the satisfaction of related documents, and the conveyance of fee title to the Site and the Improvements to the City as of the Redemption Date.
Adopted by the
Board of Commissioners of the Columbia Heights Economic Development Authority this 12th day of June, 2017.
By
Its President
Attest:
By
Its Executive Director
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June 12, 2017
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
$5,040,000
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
PUBLIC FACILITY LEASE REVENUE BONDS
SERIES 2007B
(MUNICIPAL
LIQUOR STORES PROJECT)
NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Columbia Heights Economic Development Authority (the “Authority”), there have been
called for redemption and prepayment on
August 1, 2017
all outstanding bonds of the Authority designated as Public Facility Lease Revenue Bonds, Series 2007B (Municipal Liquor Stores
Project), dated September 19, 2007, having stated maturity dates of February 1 in the years 2020 through 2030, both inclusive, totaling $3,700,000 in principal amount, and with the following
CUSIP numbers:
Year of Maturity
Amount
CUSIP
2020
$ 650,000
19768P AL0
2023
755,000
19768P AP1
2027
1,210,000
19768P AT3
2030
1,085,000
19768P
AW6
The bonds are being called at a price of par plus accrued interest to August 1, 2017, 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 the main office of U.S. Bank National Association, in the City of Saint Paul, Minnesota, on or before August
1, 2017:
U.S. Bank National Association
Corporate Trust Services
111 Fillmore Avenue East
St. Paul, MN 55107
Important Notice: In compliance with the Economic Growth
and Tax Relief Reconciliation Act of 2003, the paying agent is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any
bonds subject to redemption and prepayment on the redemption date, unless the paying agent is provided with the Social Security Number or Federal Employer Identification Number of the
holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W-9 (Rev. December 2011), will satisfy the requirements
of this paragraph.
Dated: ______________, 20___.
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June 12, 2017
BY ORDER OF THE BOARD OF COMMISSIONERS OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
By /s/ Walter R. Fehst
Executive Director
Columbia
Heights Economic Development Authority
OTHER BUSINESS:
Hogeboom also told members the next regular meeting would be July 10th at 6:30 pm.
The meeting was adjourned at 5:52 pm.
Respectfully
submitted,
Joseph Hogeboom
Acting Secretary