01-0239R

RESOLUTION AUTHORIZING THE SPIRIT MOUNTAIN RECREATION AREA AUTHORITY TO ENTER INTO A PRIMARY LEASE AND LEASE-PURCHASE AGREEMENT FOR REFUNDING OF CITY'S GROSS REVENUE RECREATION FACILITY BONDS (SPIRIT MOUNTAIN RECREATION AREA), SERIES 1992.

BY COUNCILOR HOGG:

        BE IT RESOLVED by the city council (the "City Council") of the city of Duluth, St. Louis County, Minnesota (the "City"), as follows:

                Section 1. Under and pursuant to Minnesota Statutes, Sections 471.191 and Chapter 475, the City previously issued its $4,700,000 Gross Revenue Recreation Facility Bonds (Spirit Mountain Recreation Area), Series 1992, dated August 1, 1992 (the "1992 Bonds").

                Section 2. In order to reduce debt service costs to the City and the Spirit Mountain Recreation Area Authority, the Spirit Mountain Recreation Area Authority has previously requested that the City redeem the outstanding 1992 Bonds. The Authority has solicited proposals for the provision of refunding the 1992 Bonds through a Primary Lease and Lease-Purchase Agreement (the "Leases"), and an offer has been received from Wells Fargo Bank Minnesota, N.A. (the "Lessor") to enter into the Leases and provide such financing in the amount of $1,979,893.09 at an annual interest rate of 4.85% with installments on each February 1 and August 1, commencing February 1, 2002, through February 1, 2006.

                Section 3. Pursuant to the Recreation Area Act, Laws of Minnesota 1973, Chapter 327, as amended, City Council approval is required before the Authority enters into the Leases.

                Section 4. The form of the Leases between the Authority and the Lessor on file with the Clerk as Public Document No. ___________ are hereby approved and the Authority is authorized to proceed with such financing.

                Section 5. In connection with the issuance of the 1992 Bonds, the City, the Authority and First Trust National Association (now U.S. Bank Trust National Association) entered into a Use and Management Agreement and an Indenture of Trust. Upon redemption and prepayment of the 1992 Bonds, the mayor and the clerk shall execute and deliver instruments terminating such agreement and indenture.



STATEMENT OF PURPOSE:  This resolution Spirit Mountain Recreation Area Authority has solicited proposals to refund the City's $4,700,000 Gross Revenue Recreation Facility Bonds (Spirit Mountain Recreation Area), Series 1992, which is payable from Spirit Mountain Recreation Area revenues. The refunding will be accomplished through a lease/lease back financing arrangement which will provide present value debt service savings in the amount of $120,974 to the Authority. This resolution approves the lease/lease back financing and authorizes the Spirit Mountain Recreation Area Authority to enter into the leases.