BY COUNCILOR HOGG:00-0771R
RESOLUTION AUTHORIZING THE EXECUTION OF AN ASSUMPTION AGREEMENT AND TERMINATION OF A JOINT POWERS AGREEMENT WITH RESPECT TO A $225,000 GENERAL OBLIGATION REVENUE NOTE, SERIES 2000.
BE IT RESOLVED, by the city council (the "council") of the city of Duluth, Minnesota (the "city"), as follows:
Section 1. Recitals.
1.01. The city, the town of Duluth and the town of Lakewood, Minnesota (the "towns") (the city and the towns are herein referred to collectively as the "municipalities") worked cooperatively through a joint powers board referred to as the North Shore wastewater board created pursuant to Minnesota Statutes, Section 471.59, to plan, design and construct a wastewater collection system for the North Shore planning area (the "wastewater collection system").Section 2. Finding. It is hereby found and determined to be necessary and in the best interest of the city to terminate its obligations under the note and loan agreement through the approval and execution of the assumption agreement and to release the towns from their obligations under the joint powers agreement.
1.02. The municipalities submitted a petition to the Minnesota pollution control agency for the creation of the Duluth/North Shore Sanitary District (the "district") to own and operate the wastewater collection system pursuant to Minnesota Statutes, Sections 115.18 through 115.37.
1.03. Local funds contributed by the municipalities were used to produce a wastewater facilities plan in 1998, but additional funds were needed to complete planning and design of the wastewater collection system in advance of creation of the district.
1.04. In order to secure funds needed to complete planning and design of the wastewater collection system in advance of creation of the district, the city applied to the Minnesota public facilities authority (the "lender") on behalf of the municipalities, for financial assistance in the amount of $225,000 to be used for the reimbursement or payment of design, engineering and legal costs incurred in anticipation of construction of the wastewater collection system (the "project") and creation of the district.
1.05. Pursuant to a joint powers agreement dated as of February 8, 2000, among the municipalities (the "joint powers agreement") and a public facilities authority project loan agreement and general obligation revenue bond purchase agreement dated December 16, 1999 (the "loan agreement"), between the lender and the city, the city agreed to borrow the sum of $225,000 from the lender in order to pay the cost of the project through the issuance of its general obligation revenue note, Series 2000, in the original principal amount of $225,000 and dated February 8, 2000 (the "note"). At the time of approval of the joint powers agreement, the loan agreement and the note, it was anticipated that the district would assume the city's obligations to the lender upon its creation.
1.06. Pursuant to the joint powers agreement, the town of Duluth agreed to pay its proportionate share of the debt service on the Note in the event the district was not created. Saint Louis County made an appropriation of funds to pay the town of Lakewood's proportionate share of the debt service on the note in the event the district was not created.
1.07. The district was created on March 1, 2000, and now desires to assume the obligations of the city with respect to the payment of principal and interest on the note and the city's obligations under the loan agreement.
1.08. An assumption agreement among the city, the district and the lender (the "assumption agreement"), pursuant to which the district assumes the obligations of the city under the loan agreement and agrees to issue its $225,000 general obligation revenue note, Series 2000A (the "Series 2000A note") to the lender in replacement of the note, has been presented to the council.
Section 3. Approval, execution and delivery of assumption agreement.3.01. The assumption of the city's rights and obligations under the loan agreement and the note by the district is approved and the city assigns its rights and obligations under the loan agreement to the district.Section 4. Termination of joint powers agreement; release of towns; termination of accounts and covenants.
3.02. The assumption agreement is hereby approved in substantially the form presented to the council and on file with the clerk.
3.03. The assumption agreement will be prepared for execution in accordance with the approved form and signed by the manual signature of the mayor and the manual signature of the clerk. If any officer whose signature appears on the assumption agreement ceases to be an officer before delivery of the assumption agreement, such signature will nevertheless be valid and sufficient for all purposes, as if such officer had remained in office until delivery.
3.04. The officers of the city are authorized and directed to furnish to the lender and bond counsel for the district certified copies of proceedings and information in their official records relevant to the authorization, execution and delivery of the assumption agreement, and all such certified copies, certificates and affidavits, including any heretofore furnished, constitute representations and recitals of the city as to the correctness of all facts stated therein and the completion of all proceedings stated therein to have been taken.
3.05. In the event of the absence or disability of the mayor or the clerk, such officers or members of the council as in the opinion of the city's attorney, may act in their behalf, must without further act or authorization, execute and deliver the assumption agreement, and do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers.4.01. Subject to the approval, execution and delivery of the assumption agreement by the city and the district and acceptance thereof by the lender, the 2000 state public facilities authority note construction fund and the 2000 state public facilities authority note debt service fund within the city's sewer utility operating account within the public service sewer utility fund are terminated.
4.02. Subject to the approval, execution and delivery of the assumption agreement by the city, the district and acceptance thereof by the lender, the pledge of the city's full faith and credit for payment of the note is terminated.
4.03. Subject to the approval, execution and delivery of the assumption agreement by the city, the district and acceptance thereof by the lender, the joint powers agreement is terminated and the towns are released from their obligations thereunder.