AN ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF GENERAL OBLIGATION BONDS OF THE CITY OF DULUTH IN AN AMOUNT NOT TO EXCEED $3,000,000 UPON TERMS AND CONDITIONS TO BE PROVIDED BY RESOLUTIONS OF THE CITY COUNCIL AND LEVYING TAXES FOR THE PAYMENT THEREOF.
BY COUNCILOR HOGG:
The city of Duluth does ordain:
Section 1. Bond purpose and authorization.
1.01 The city council has determined it to be necessary and expedient and in the public interest that the city participate in the development of an airplane manufacturing industry incubator project (the project) at the Duluth International Airport. The project consists of renovation of existing facilities and constructing an approximately 63,000 square foot manufacturing facility which will be leased to Cirrus Industries, Inc. (the lease). The city has applied for and accepted a federal grant of $3,450,600 (the grant) from the U.S. department of commerce, economic development administration, to pay a portion of the estimated $5,751,000 cost of the project. The city is required by such grant to provide its local share to match the grant funds.
1.02 Under the provisions of Minnesota Laws 1974, Chapter 130, the city council may by ordinance provide for the issuance of general obligation bonds to provide the funds necessary to match state, private or federal grant funds for projects within the city's boundaries, which bonds are to be supported by the full faith and credit of the city and are to be issued subject to the provisions of Minnesota Statutes, Chapter 475, except that they may exceed the limitations in Minnesota Statutes, Section 475.53, by an amount not to exceed $2,000,000, and they may not be issued if the city's contribution to the project, including the proceeds of the bonds, exceeds 60 percent of the total project cost where such contribution is used to match state or federal grants, or 70 percent where it is used to match government and private grants, or 80 percent where it is used to match private grants alone. The project is of the nature contemplated by said law. Based on the grant, the amount of the city's contribution for the project from the proceeds of bonds, as further described in Section 1.03 below, or otherwise, will not exceed the limitations set forth in said law.
1.03 Pursuant to the authority herein recited, the city council authorizes and directs the issuance and sale of general obligation bonds of the city to finance a portion of the construction costs of the project, capitalized interest and costs of issuance of the bonds in an amount not to exceed $3,000,000, and pledges the full faith and credit and taxing powers of the city irrevocably for the payment of the principal and interest when due on such bonds.
Section 2. Terms of bonds.
2.01 The city council shall by resolution or resolutions provide for the issuance and sale of such bonds in one or more series and shall fix the precise maturities, interest rates, redemption provisions and other terms and conditions of such bonds, and prescribe the form thereof, and sell such bonds, in such a manner and at such time or times as shall be deemed in the public interest, all in accordance with the provisions of Minnesota Statutes, Chapter 475 and of Minnesota Laws 1974, Chapter 130, and of other applicable laws.
Section 3. Revenues and accounts.
3.01 All or a portion of the proceeds of the bonds, as provided by council resolution, shall be credited to a separate account within Capital Improvement Fund No. 430 (Cirrus expansion project fund), together with any additional funds which may be available and are appropriated for the project or which may be advanced to such account on condition that such amounts be reimbursed from bond proceeds.
3.02 The city council shall, by resolution or resolutions, establish such further funds or accounts and credit monies from the proceeds of the bonds herein authorized to funds or accounts, all in accordance with Section 54 of the City Charter and Chapter 475 of Minnesota Statutes.
Section 4. Tax levy.
4.01 There shall be and is hereby levied a direct, annual, ad valorem tax upon all taxable property within the city of Duluth, which shall be extended upon the tax rolls for the years and in amounts sufficient to produce sums not less than five percent in excess of the amounts of principal and interest on such bonds as such principal and interest respectively become due. Until the bonds to be issued hereunder are fully paid or duly called for redemption, the city will also maintain a separate account in the debt service fund created by Section 54 of the City Charter, to be used solely for the payment of the interest and the principal as such principal and interest become due and payable, on the bonds issued hereunder and on any other bonds which have been or may be issued and made payable from said fund. If the balance in such separate account of the debt service fund is ever insufficient to pay all principal and interest then due on the bonds issued hereunder, the treasurer shall nevertheless provide sufficient money from any other funds of the city which are available for that purpose, and such other funds shall be reimbursed from the debt service fund when the balance therein is sufficient. All proceeds of said taxes are hereby appropriated and shall be paid when collected into such accounts. Said taxes shall be irrepealable until the bonds and interest are fully paid, except that if the city council in any year shall make an irrevocable appropriation to said accounts of monies actually on hand, the city clerk shall certify to the county auditor of St. Louis County the fact and amount thereof, and the county auditor shall reduce by the amount so certified the amount otherwise to be included in the rolls next thereafter prepared. Rental payments under the lease shall be used, as established by resolution of the council, and any other pledges of revenue shall be for payment of principal and interest on the bonds issued pursuant to this ordinance. After this ordinance has been published and becomes effective, the city council shall by resolution fix the precise amounts of such tax levies to be placed upon the tax rolls for each of the respective years required to comply with the provisions of this ordinance.
Section 5. Certificate of proceedings.
5.01 The city clerk is directed to file with the county auditor of St. Louis County, a certified copy of this ordinance, and such other information as the county may require, and to obtain from the county auditor a certificate stating that the bonds herein authorized have been duly entered on his register.
5.02 The office of the city clerk is authorized and directed to prepare and furnish to the purchasers of the bonds, and to bond counsel, certified copies of all proceedings and records of the city relating to the authorization and issuance of the bonds and such other affidavits and certificates as may reasonably be required to show the facts relating to the legality and marketability of the bonds as such acts appear from the official books and records in the officer's custody or are otherwise known to him. All such certified copies, certificates and affidavits, including any heretofore furnished, constitute representations of the city as to the correctness of the facts recited therein and the action stated therein to have been taken.
Section 6. Effective date.
6.01 This ordinance shall take effect and be in force 30 days from and after its passage and publication.