04-0737R

REPLACEMENT

RESOLUTION PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF $1,040,000 GROSS REVENUE RECREATION FACILITY REFUNDING BONDS (MUNICIPAL GOLF COURSES), SERIES 2004; ESTABLISHING THE TERMS AND FORM THEREOF; AND CREATING A DEBT SERVICE FUND THEREFOR.


BY VICE PRESIDENT NESS:

     BE IT RESOLVED, by the City Council of the City of Duluth, Minnesota (the “City”), as follows:

     Section 1. Authorization of Bonds.

     1.01.Pursuant to Minnesota Statutes, Section 471.15 through 471.191, the City operates a program of public recreation, of which the Lester Park Golf Course and Enger Park Golf Course (the “Golf Courses”) are a part.

     1.02.Under and pursuant to Minnesota Statutes, Section 471.191, and Chapter 475 (collectively, the “Act”), the City previously issued its $3,315,000 Gross Revenue Recreation Facility Refunding Bonds (Municipal Golf Courses), Series 1995, dated November 1, 1995 (the “1995 Bonds”), pursuant to an Indenture of Trust dated as of November 1, 1995 (the “1995 Indenture”), between the City and Norwest Bank Minnesota, National Association (now known as Wells Fargo Bank, National Association), as trustee, to refund certificates of participation which were issued by the City to finance improvements to and equipment for the Golf Courses. Under the terms of the 1995 Indenture, the City has the option to refund the 1995 Bonds maturing on and after December 1, 2005, on or any date after December 1, 2004.

     1.03.The City has determined that it is necessary and desirable that the City refund the 1995 Bonds maturing on and after December 1, 2005, of which $1,215,000 of principal amount is outstanding (the "Refunded Bonds"), call for the redemption and prepayment of the Refunded Bonds on December 10, 2004 (the “Redemption Date”), and issue Gross Revenue Recreation Facility Refunding Bonds (Municipal Golf Courses), Series 2004 (the “Bonds”), in the amount of $1,040,000, pursuant to an Indenture of Trust between the City and Wells Fargo Bank, National Association (the “Trustee”).

     1.04.The form of the Indenture of Trust (the “Indenture”) proposed to be made and entered into between the City and the Trustee (Public Document No. 04-_________) relating to the financing has been prepared and submitted to the City Council.

     Section 2. The City has retained Public Financial Management, Inc. (“PFM”), an independent financial advisor, in connection with the sale of the Bonds. PFM has solicited proposals for purchasing the Bonds from firms PFM has determined to be prospective purchasers of the Bonds. Based on such solicitation and the nature of the revenue obligations, PFM has recommended that the sale of the Bonds should be through private negotiations. The Council hereby determines and ratifies the administration’s recommendation to negotiate the sale of the Bonds with Dougherty & Company LLC of Minneapolis, Minnesota (the “Purchaser”). All actions of the mayor, the clerk, the finance director and Public Financial Management, Inc. taken with regard to the sale of the Bonds are hereby ratified and approved. Pursuant to such solicitation for the sale of the Bonds, the City Council has received and considered the proposal by the Purchaser to purchase the Bonds at a cash price of $1,022,320, plus accrued interest, if any, on the total principal amount from December 1, 2004, to the date of delivery of the Bonds and upon condition that the Bonds bear interest at the annual rates as indicated below and shall mature on December 1 in the following respective years and amounts:

Maturity Year

Amount

Interest

Rate

Maturity Year

Amount

Interest

Rate

2005

$120,000

2.00%

2009

$130,000

3.25%

2006

120,000

2.30%

2010

135,000

3.40%

2007

125,000

2.60%

2011

140,000

3.65%

2008

125,000

3.00%

2012

145,000

3.80%

The City, after due consideration, finds such offer reasonable and proper and the offer of the Purchaser is hereby accepted. The mayor and the city clerk are authorized and directed to execute on the part of the City a contract for the sale of the Bonds in accordance with the Purchaser’s proposal.

     Section 3. The Bonds shall not be general obligations but shall be special limited obligations of the City, payable solely out of Gross Revenues (as defined in the Indenture) of the Golf Course Facilities (other than to the extent payable out of proceeds of the Bonds or the net proceeds out of insurance claims or condemnation awards). The Bonds shall be secured by the Indenture. The City has agreed to segregate the Gross Revenues derived from the Golf Course Facilities on its official books and records and to remit such Gross Revenues pursuant to the Indenture. The mayor and the city clerk are hereby authorized and directed to execute the Bonds in accordance with the Indenture.

     Section 4. The Indenture is hereby approved. The mayor and the city clerk are hereby authorized and directed to execute and deliver the Indenture, substantially in the form now on file with the city clerk, with such necessary and appropriate omissions, modifications, insertions and additions as do not materially affect the substance of the transaction, consistent with the Act, as the mayor in his discretion shall determine. The execution of the Indenture by the mayor, with the advice of the City Attorney, shall be conclusive evidence of such determination. All of the provisions of the Indenture, when executed and delivered as authorized herein, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated herein and shall be in full force and effect from the date of execution and delivery thereof.

     Section 5. The mayor, the city clerk and other city officials are hereby authorized to execute and deliver, on behalf of the City, such other documents as are necessary or appropriate in connection with the issuance, sale and delivery of the Bonds. The city clerk is authorized and directed to give notice of redemption of the Refunded Bonds in accordance with the requirements of this resolution, the resolution authorizing the 1995 Bonds and the 1995 Indenture.

     Section 6. All covenants, stipulations, obligations and agreements of the City contained in this Resolution and the Indenture shall be deemed to be the covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the City upon execution and delivery of such documents. Except as otherwise provided in this Resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the City or its officers by the provisions of this Resolution or of the aforementioned documents to be executed and delivered by the City shall be executed or performed by the City or by such officers of the City, or such board, body, authority or agency thereof as may be required by law to exercise such powers and to perform such duties.

     Section 7. Except as herein otherwise expressly provided, nothing in this Resolution or the Indenture, expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City, the Trustee, the Purchaser, or any holder of the Bonds issued under the provisions of this Resolution, any right, remedy or claim, legal or equitable, under and by reason of this Resolution or any provision hereof, that the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City, the Trustee, the Purchaser, and any holder from time to time of the Bonds issued under the provisions of this Resolution.

     Section 8. The officers and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this Resolution, the Indenture and the Bonds for the full, punctual and complete performance of all the terms, covenants and agreements contained in the Bonds, the aforementioned documents including the prepayment and redemption of the Refunded Bonds and this Resolution.

     Section 9. In the event any of the officers of the City Authorized to execute the documents on behalf of the City under this Resolution shall for any reason be unable to do so, any other officer of the City authorized to act for such designated officer is hereby directed and authorized to do so on behalf of the City with the same effect as if executed by the officer authorized to do so in this Resolution.

     Section 10. All actions of the members, officers, employees and staff of the City heretofore taken and in furtherance of this financing are hereby approved, ratified and confirmed.

     Section 11. The mayor, the city clerk and other officers of the City are authorized and directed to prepare and furnish, with regard to the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and such other affidavits, certificates and opinions as may be required to show the facts relating to the legality, tax exemption and marketability of the Bonds as such facts appear from the books and records in the officers’ custody and control or as otherwise known to them; that all such certified copies, certificates, affidavits and opinions, including and heretofore furnished, shall constitute representations of the City as to the truth of all statements made by the City and contained herein.

     Section 12. The Trustee is hereby appointed authenticating agent and paying agent with respect to the Bonds.

     Section 13. The City hereby authorizes the circulation of the Official Statement in connection with the sale and delivery of the Bonds.

     Section 14. Refunding; Findings; Redemption of Refunded Bonds.

     14.01. A. The City Council hereby finds that the refunding and prepayment of the Refunding Bonds is consistent with the 1995 Indenture and the covenants made with the holders of the 1995 Bonds; that it is necessary and desirable for the extension and adjustment of the maturities in relation to the revenues of the Golf Course Facilities available for the payment of the 1995 Bonds and for reduction of interest rates on such financing.

            B.   It is hereby found and determined that the proceeds of the Bonds in the amount of $885,341.69, together with the funds available in the 1995 Indenture debt service fund and reserve fund will be sufficient to pay the principal and interest due on the Refunded Bonds through the Redemption Date.

     14.02. A. The Refunded Bonds shall be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption, as set forth in Section 14.03, which terms and conditions are approved. The clerk or the designee thereof is hereby authorized and directed to send written notice of call for redemption to the 1995 Trustee in accordance with the terms of the 1995 Indenture.

     14.03. The Notice of Call for Redemption for the Refunded Bonds shall be in substantially the following form:

NOTICE OF CALL FOR REDEMPTION

$3,315,000 GROSS REVENUE RECREATION FACILITY REFUNDING BONDS

(MUNICIPAL GOLF COURSES), SERIES 1995

OF THE CITY OF DULUTH, MINNESOTA


 

NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Duluth, Minnesota (the “City”), there have been called for redemption and prepayment on


December 10, 2004,

 

all outstanding Bonds of the City designated as Gross Revenue Recreation Facility Refunding Bonds (Municipal Golf Courses), Series 1995, dated November 1, 1995, having stated maturity dates of December 1 in the years 2005, 2006 and 2007, totaling $1,215,000 in outstanding principal amount, and with the following CUSIP numbers:


Number

Maturity

Principal

Amount*

Interest

Rate

CUSIP Number**

R-10

2005

$295,000

6.00%

26444M BH2

R-11

2006

305,000

6.05%

26444M BJ8

R-12

2007

615,000

6.10%

26444M BK5

 

The Bonds are being called at a price of par plus accrued interest to December 10, 2004, 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 office of Wells Fargo Bank, National Association (formerly known as Norwest Bank Minnesota, National Association), Corporate Trust Operations, Sixth & Marquette, Minneapolis, Minnesota 55479, on or before December 10, 2004. It is recommended that you mail your bond registered or certified mail to guard against loss.

 

Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2001, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time of payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W-9 Form, which may be obtained at a bank or other financial institution.

 

* Indicates full call of stated maturity.

 

** Neither the City nor the trustee shall be responsible for the selection of or use of the CUSIP number, and no representation is made as to its correctness indicated in the Notice of Call for Redemption. CUSIP numbers are included solely for the convenience of the Holders.

 

BY ORDER OF THE CITY OF DULUTH, MINNESOTA


     Section 15. Tax Covenants. The City’s representations, covenants and agreements set forth in Section 7.04 of the Indenture are true and correct as of the date hereof.

     Section 16.  Continuing Disclosure. The City acknowledges that the Bonds are subject to the continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12) (the “Rule”). The Rule governs the obligations of certain underwriters to require that issuers of municipal bonds enter into agreements for the benefit of the bondholders to provide continuing disclosure with respect to the Bonds. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit underwriters of the Bonds to comply with the Rule, which will enhance the marketability of the Bonds, the mayor and the clerk are hereby authorized and directed to execute a continuing disclosure certificate substantially in the form of the certificate currently on file in the office of the city clerk as public document No. 04-0219-02.


STATEMENT OF PURPOSE:  The purpose of this resolution is to award the sale of the $1,040,000 Gross Revenue Recreation Facility Refunding Bonds (Municipal Golf Courses), Series 2004, and authorizes an Indenture of Trust for the refunding of the 1995 golf course financing.