ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF GENERAL
OBLIGATION AIRPARK IMPROVEMENT BONDS OF THE CITY OF DULUTH IN AN
AMOUNT NOT TO EXCEED $1,000,000 UPON TERMS AND CONDITIONS TO BE
PROVIDED BY RESOLUTIONS OF THE CITY COUNCIL AND LEVYING TAXES FOR
THE PAYMENT THEREOF.
city of Duluth does ordain:
BOND PURPOSE AND AUTHORIZATION.
The city and
the Seaway Port authority of Duluth (SPAD) have undertaken the construction
of streets and utilities in the Airpark Phase II development (the project).
SPAD and the city have received a grant from the economic development
administration for approximately 60 percent of the anticipated cost of
the project, and SPAD has requested that the city provide the remaining
funds needed to construct the project.
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. The city has received a grant
agreement for a private donation in aid of the project, and it is estimated
that such funds, together with funds contributed by the city and the proceeds
of bonds issued by the city in an amount not to exceed $1,000,000, will
be sufficient to pay the project costs, and that the amount of the city's
contribution, from the proceeds of the bonds or otherwise, will not exceed
the limitations set forth in said law.
the authority herein recited, the city council authorizes and directs
the issuance and sale of general obligation Airpark improvement bonds
of the city in an amount not to exceed $1,000,000, 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.
TERMS OF BONDS.
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 Laws 1974, Chapter 130, and of other applicable
REVENUES AND ACCOUNTS.
The city has created a separate construction account titled "Airpark improvement
construction account" within the capital improvements fund to which there
shall be credited all or a portion of the proceeds of the bonds, as provided
by council resolution, together with the proceeds of such grant received
by the city for the project, and 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.
The city council shall, by resolution or resolutions, establish such further
accounts and credit monies from the proceeds of the bonds herein authorized
to accounts, all in accordance with Section 54 of the City Charter and
Chapter 475 of Minnesota Statutes.
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 funds. 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.
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.
CERTIFICATE OF PROCEEDINGS.
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
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
shall take effect and be in force 30 days from and after its passage and
OF PURPOSE: This ordinance authorizes the issuance of $1,000,000
general obligation bonds to provide funds to construct streets and utilities
in the Airpark Phase II development. SPAD and the city have received a
grant from the EDA to pay for approximately 60 percent of the anticipated
cost of the project. The borrowing authorized by this ordinance provides
authority to pay the remaining portion of the project cost. It is anticipated
that special assessments from the benefitted property will be used to
cancel the tax levy and pay the principal of and interest on the bonds.