DISCLAIMER

 

05-0803R


RESOLUTION PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF $12,525,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 2005G; ESTABLISHING THE TERMS AND FORM THEREOF; CREATING A BOND FUND THEREFOR; AND AWARDING THE SALE THEREOF.

BY COUNCILOR STAUBER:

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

     Section 1. Bond Purpose and Authorization.

     1.01 (a) The Duluth Economic Development Authority (“DEDA”), the City and St. Mary’s/Duluth Clinic Health System have agreed to cooperate in developing the parking ramp to be constructed in connection with the St. Mary’s/Duluth Clinic Health Systems Digestive Disease/Cancer Center Project. DEDA established a Development Program and a Plan for Development District No. 17 and has created Tax Increment Financing District No. 22 located in Development District No. 17 (“TIF District No. 22”). Such Development Plan and the Tax Increment Financing Plan for TIF District No. 22 provides for the use of tax increment from TIF District No. 22 for public development costs associated with the construction and improvement of City parking facilities. The City intends to finance a portion of the public development costs associated with the parking ramp to be constructed by the City within TIF District No. 22 (the “Parking Ramp”), and related project facilities costs for rock removal (collectively, the “Project”), with taxable general obligation tax increment bonds in the amount of $12,525,000.

           (b)  Pursuant to Minnesota Statutes Section 469.178 (the “Act”), the City is authorized to issue its general obligation bonds for the purpose of financing public development costs associated within TIF District No. 22 and Development District No. 17, and the City hereby authorizes the issuance of $12,525,000 Taxable General Obligation Tax Increment Bonds, Series 2005G (the “Bonds”), for the purpose of providing funds to pay the public development costs for the Project pursuant to Section 4.01(a) hereof. Pursuant to the Act and Sections 4.02, 4.03 and 4.04 hereof, the City will pledge certain tax increment, net revenues of the Parking Ramp and annual ad valorem real estate taxes for payment of the principal and interest on the Bonds.

     1.02 Public Financial Management, Inc., financial consultant to the City, has given notification by mail, facsimile or electronic data transmission to at least five firms determined by Public Financial Management, Inc. to be prospective bidders on the Bonds at least two days (omitting Saturdays, Sundays and legal holidays) before the date set for receipt of bids on the Bonds. All actions of the mayor, the clerk and Public Financial Management, Inc. taken with regard to the sale of the Bonds are hereby ratified and approved.

     1.03 Pursuant to such solicitation for bids for the sale of the Bonds, the city council has received and considered all bids presented pursuant to the official terms of offering and has determined that the most favorable bid is that of ______________________________________________ of ____________________________ (the “Purchaser”), to purchase the Bonds at a cash price of $_____________, upon condition that the Bonds mature and bear interest at the times and annual rates set forth in Section 2. 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 bid. The city treasurer is directed to deposit the good faith check of the successful bidder.

     Section 2. Terms of Bonds.

     2.01 (a) The Bonds to be issued hereunder shall be dated as of the date of delivery, as the date of original issue, shall be issued in the denomination of $5,000, or any integral multiple thereof, and shall be lettered and numbered R-1 and upward. The Bonds shall mature on February 1 in the amounts and years stated and shall bear interest at the annual rates as set forth below:

Year

Amount

Interest Rate

Year

Amount

Interest Rate

2008

$390,000

 

2018

$ 660,000

 

2009

410,000

 

2019

700,000

 

2010

435,000

 

2020

740,000

 

2011

455,000

 

2021

780,000

 

2012

480,000

 

2022

825,000

 

2013

505,000

 

2023

875,000

 

2014

535,000

 

2024

925,000

 

2015

565,000

 

2025

980,000

 

2016

595,000

 

2026

1,040,000

 

2017

630,000

 

 

           (b)  The Bonds maturing on February 1 in the years ____ and ____ shall be subject to mandatory redemption prior to maturity pursuant to the requirements of this Section 2.01(b) at a redemption price equal to the stated principal amount, as hereinafter provided, plus interest accrued thereon to the redemption date, without premium. The Bond Registrar, as designated below, shall select for redemption, by lot or other manner deemed fair, on February 1 in each of the following years, the following stated principal amounts:

     (1)  For Bonds maturing on February 1, ____ (the “____ Term Bonds”):

Year

Principal Amount

 

 

     The remaining $______ stated principal amount of the ____ Term Bonds shall be paid at maturity on February 1, ____.

     (2)  For Bonds maturing on February 1, ____ (the “____ Term Bonds”):

Year

Principal Amount

 

 

     The remaining $______ stated principal amount of the ____ Term Bonds shall be paid at maturity on February 1, ____.

     If less than such amount of the Term Bonds is outstanding on such payment date, the City shall pay the remaining balance of the Term Bonds then outstanding. The Bond Registrar shall select and call for redemption, in accordance with Section 2.02 hereof, from the Term Bonds the amounts specified above and the Term Bond selected by the Bond Registrar shall become due and payable on such date.

     2.02 (a) The Bonds maturing in the years 2008 through 2014 shall not be subject to optional redemption and prepayment before maturity, but those maturing or subject to mandatory redemption pursuant to Section 2.01(b), in the year 2015 and in subsequent years shall each be subject to redemption and prepayment at the option of the City on February 1, 2014, and on any date thereafter, in whole or in part, and if in part, in such order of maturities as selected by the City and by lot as to the Bonds maturing in the same year, at a price equal to the principal amount thereof plus accrued interest to the redemption date.

           (b)  In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Bond Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) at least 30 days but not more than 60 days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Bond Registrar; provided however, that so long as the Bonds are registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), notice of redemption shall be given in accordance with the terms of the Representation Letter hereinafter described. Failure to give notice by mail to any registered owner, or any defect therein, will not affect the validity of any proceeding for the redemption of Bonds not affected by such defect or failure. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time.

           (c)  If less than all the Bonds of a maturity are called for redemption while the Bonds are registered in the name of Cede & Co., the City or the Bond Registrar designated below will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. If less than all the Bonds of a maturity are called for redemption and the Bonds are not registered in the name of Cede & Co., the Bond Registrar will determine by lot or other manner deemed fair, the amount of each maturity to be redeemed. All prepayments shall be at a price equal to the principal amount thereof plus accrued interest.

     2.03 Interest on the Bonds shall be payable semiannually on February 1 and August 1 in each year (each referred to herein as an “Interest Payment Date”) commencing August 1, 2006. Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to the rules of the Municipal Securities Rulemaking Board. The Bond Registrar designated below shall make all interest payments with respect to the Bonds by check or draft mailed to the registered owners of the Bonds shown on the bond registration records maintained by the Bond Registrar designated below at the close of business on the 15th day (whether or not a business day) of the month next preceding the Interest Payment Date at such owners’ addresses shown on such bond registration records.

     2.04 (a) The Bonds shall be prepared for execution in accordance with the approved form and shall be signed by the manual or facsimile signature of the mayor and attested by the manual or facsimile signature of the city clerk. In case any officer whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be an officer before delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, as if he or she had remained in office until delivery.

           (b)  The city clerk is authorized and directed to obtain a copy of the proposed approving legal opinion of Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota, which is to be complete and cause the opinion to be attached to each Bond, together with a certificate to be signed by the manual signature of the city clerk in substantially the form set forth in Section 3.01, but only if the opinion is not manually executed. The city clerk is authorized and directed to execute the certificate in the name of the City upon receipt of the opinion, if required by the preceding sentence, and to file the opinion in the City offices.

     2.05 The City hereby appoints Wells Fargo Bank, National Association, in Minneapolis, Minnesota, as registrar, authenticating agent, paying agent and transfer agent for the Bonds (such bank or its successor is herein referred to as the “Bond Registrar”). To provide for the Bond Registrar services, the mayor and the clerk are authorized and directed to execute a bond registrar/paying agent agreement substantially in the form of the agreement currently on file in the office of the city clerk as public document No. 04-0219-02. No Bond shall be valid or obligatory for any purpose until the Bond Registrar’s authentication certificate on such Bond, substantially set forth in Section 3.01 hereof, shall have been duly executed by an authorized representative of the Bond Registrar. Authentication certificates on different Bonds need not be signed by the same representative. The manual signature of one officer of the City or the executed authentication certificate on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution.

     2.06 (a) In order to make the Bonds eligible for the services provided by DTC, the City has previously agreed to the applicable provisions set forth in the blanket issuer letter of representations which has been executed by the City and DTC (the “Representation Letter”).

           (b)  All of the Bonds shall be registered in the name of Cede & Co., as nominee for DTC. Payment of interest on and principal of any Bond registered in the name of Cede & Co. shall be made by wire transfer or New York Clearing House or equivalent same day funds by 10:00 a.m. CT or as soon as possible thereafter following the Bond Registrar’s receipt of funds from the City on each Interest Payment Date to the account of Cede & Co. on each Interest Payment Date at the address indicated in or pursuant to the Representation Letter.

           (c)  Additional matters with respect to, among other things, notices, consents and approvals by bond holders and payments on the Bonds are set forth in the Representation Letter.

     2.07 The City shall cause to be kept by the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the City shall provide for the registration of the Bonds and the registration of transfers of the Bonds entitled to be registered or transferred as herein provided. In the event of the resignation or removal of the Bond Registrar or its incapability of acting as such, the bond registration records shall be maintained at the office of the successor Bond Registrar as may be appointed by the city council. Upon surrender for transfer of any Bond at the principal corporate office of the Bond Registrar, the City shall execute and the Bond Registrar shall authenticate, if required by law or this resolution, and deliver, in the name(s) of the designated transferee or transferees, one or more new Bonds of the like aggregate principal amount, as requested by the transferor.

     2.08 Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all of the rights to interest, accrued and unpaid and to accrue, which are carried by such other Bond. Each Bond shall be dated by the Bond Registrar as of the date of its authentication. The City and the Bond Registrar shall not be required to make any transfer or exchange of any Bonds called for redemption or to make any such exchange or transfer of the Bonds during the 15 days next preceding the date of the mailing of the notice of redemption in the case of a proposed redemption of the Bonds.

     2.09 The City and the Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and interest on such Bond and for all other purposes whatsoever, whether or not such Bond be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary.

     2.10 The principal of and interest on the Bonds shall be payable by the Bond Registrar, as paying agent, in such funds as are legal tender for the payment of debts due the United States of America. The City shall pay the reasonable and customary charges of the Bond Registrar for the disbursement of principal and interest.

     Section 3. Form of the Bonds.

     3.01 The Bonds shall be printed or typewritten in substantially the following form:

UNITED STATES OF AMERICA

STATE OF MINNESOTA

COUNTY OF ST. LOUIS

 

R-____                                                $__________

 

CITY OF DULUTH

TAXABLE GENERAL OBLIGATION TAX INCREMENT BOND, SERIES 2005G

 

Interest Rate

Maturity Date

Date of Original Issue

CUSIP

 

February 1, ____

December __, 2005

 

 

REGISTERED OWNER:CEDE & CO.

 

PRINCIPAL AMOUNT:                                         DOLLARS

 

     The City of Duluth, St. Louis County, Minnesota (the “City”), for value received, promises to pay to the registered owner specified above, or registered assigns, the principal amount specified above, on the maturity date specified above, and to pay interest on said principal amount to the registered owner hereof from the Date of Original Issue, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, said interest being at the rate per annum specified above. Interest is payable semiannually on February 1 and August 1 of each year (each referred to herein as an “Interest Payment Date”) commencing on August 1, 2006. Both principal hereof and interest hereon are payable in lawful money of the United States of America by check or draft by Wells Fargo Bank, National Association, of Minneapolis, Minnesota, as bond registrar, paying agent, transfer agent and authenticating agent (the “Bond Registrar”), or at the office of such successor Bond Registrar as may be designated by the City Council. The Bond Registrar shall make all interest payments with respect to this Bond directly to the registered owner hereof shown on the bond registration records maintained on behalf of the City by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the Interest Payment Date at such owner’s address shown on said bond registration records, without, except for payment of principal on the Bond, the presentation or surrender of this Bond, and all such payments shall discharge the obligations of the City to the extent of the payments so made. Payment of principal shall be made upon presentation and surrender of this Bond to the Bond Registrar when due. For the prompt and full payment of such principal and interest as they become due, the full faith and credit of the City are irrevocably pledged.

 

     This Bond is one of a series issued by the City in the aggregate amount of $12,525,000, all of like date and tenor, except for number, denomination, maturity date and interest rate, pursuant to the authority contained in Minnesota Statutes, Chapter 475, Section 469.178, and all other laws and home rule charter provisions of the City thereunto enabling, and pursuant to a resolution adopted by the governing body of the City on December 1, 2005 (the “Resolution”), for the purpose of financing the public development costs associated with construction of a parking ramp to be constructed by the City within Tax Increment Financing District No. 22 (the “Parking Ramp”), and related project facilities (the “Project”), to be constructed in connection with the St. Mary’s/Duluth Clinic Health Systems Digestive Disease/Cancer Center Project, and for payment of part of the interest cost of said bond issue. The principal hereof and interest hereon are payable in part from tax increment revenue from Tax Increment Financing District No. 22, in part from net revenues of the Parking Ramp, and in part from annual ad valorem real estate taxes, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred.

 

     The Bonds maturing in the years ____ and ____ shall be subject to mandatory redemption and redeemed in installments as provided in the Resolution, at par plus accrued interest to the date of redemption.

 

     The Bonds of this series maturing in the years 2008 through 2014 are not subject to redemption before maturity, but those maturing, or subject to mandatory redemption, in the year 2015 and in subsequent years are each subject to redemption and prepayment at the option of the City on February 1, 2014, and on any date thereafter, in whole or in part, in such order of maturities as selected by the City and by lot as to Bonds maturing in the same year, at a price equal to the principal amount plus accrued interest to the redemption date.

 

     Not less than 30 days nor more than 60 days prior to the date fixed for redemption and prepayment of any Bonds, notice of redemption shall be mailed to each registered owner of a Bond to be redeemed; however, that so long as the Bonds are registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), notice of redemption shall be given in accordance with the terms of the Blanket Issuer Letter of Representations executed by the City and DTC.

 

     If less than all the Bonds of a maturity are called for redemption while the Bonds are registered in the name of Cede & Co., the City or the Bond Registrar designated below will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. If less than all the Bonds of a maturity are called for redemption and the Bonds are not registered in the name of Cede & Co., the Bond Registrar will determine by lot or other manner deemed fair, the amount of each maturity to be redeemed. All prepayments shall be at a price equal to the principal amount thereof plus accrued interest. If any Bond is redeemed in part, upon surrender of the Bond being redeemed, the City shall deliver or cause to be delivered to the registered owner of such Bond, a bond in like form in the principal amount equal to that portion of the Bond so surrendered not being redeemed.

 

     The Bonds of this series are issued as fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof. Subject to limitations set forth in the Resolution, this Bond is transferable by the registered owner hereof upon surrender of this Bond for transfer at the principal corporate office of the Bond Registrar, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Bond Registrar and executed by the registered owner hereof or the owner’s attorney duly authorized in writing. Thereupon the City shall execute and the Bond Registrar shall authenticate, if required by law and the Resolution, and deliver, in exchange for this Bond, one or more new fully registered bonds in the name of the transferee, of an authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of this Bond, of the same maturity and bearing interest at the same rate.

 

     IT IS CERTIFIED AND RECITED that all acts and conditions required by the Charter of the City and by the laws and the Constitution of the State of Minnesota to be done and to exist precedent to and in the issuance of this Bond, in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done and do exist in form, time and manner as so required; that all taxable property within the corporate limits of the City is subject to the levy of ad valorem taxes to the extent needed to pay the principal hereof and the interest hereon when due, without limitation as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation.

 

     This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Bond Registrar’s Authentication Certificate hereon shall have been executed by the Bond Registrar by one of its authorized representatives.

 

     IN WITNESS WHEREOF, the City of Duluth, Minnesota, by its city council, has caused this Bond to be executed in its name by the facsimile signatures of the Mayor and the City Clerk.

 

ATTEST:

 

_______________________________    ______________________________

City Clerk                         Mayor

 

Date of Authentication: _____________________

 

BOND REGISTRAR’S AUTHENTICATION CERTIFICATE

 

     The Bond Registrar confirms that the books reflect the ownership of a Bond registered in the name of the owner named above, in the principal amount stated above, and this Bond is one of the Bonds of the series issued pursuant to the Resolution hereinabove described.

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

Bond Registrar

 

By____________________________

  Authorized Representative

 

REGISTRATION CERTIFICATE

 

     This Bond must be registered as to both principal and interest in the name of the owner on the books to be kept by Wells Fargo Bank, National Association, of Minneapolis, Minnesota, as Bond Registrar. No transfer of this Bond shall be valid unless made on said books by the registered owner or the owner’s attorney thereunto duly authorized and similarly noted on the registration books. The ownership of the unpaid principal balance of this Bond and the interest accruing thereon is registered on the books of Wells Fargo Bank, National Association, as Bond Registrar, in the name of the registered owner last noted below.

Date

Registered Owner

Signature of Bond Registrar

12/__/05

Cede & Co.

c/o The Depository Trust Company

55 Water Street

New York, NY 10041

Federal Taxpayer I.D. No.: 13-2555119

______________

 

ASSIGNMENT

 

     FOR VALUE RECEIVED, the undersigned sells, assigns, and transfers unto ___________________________________________________

__________________________________________________________________

(Name and Address of Assignee)

 

________________________     Social Security or Other

________________________     Identifying Number of Assignee

 

the within Bond and all rights thereunder and does hereby irrevocably constitute and appoint _______________________________

attorney to transfer the said Bond on the books kept for registration thereof with full power of substitution in the premises.

 

Dated: ________________________.

 

____________________________________

 

____________________________________

NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever.

 

Signature Guaranteed:

 

_______________________________

(Bank, Trust Company, member of

National Securities Exchange)

 

     Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”) , to the City or its agent for registration of transfer, exchange, or payment, and any bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

BOND COUNSEL OPINION

 

     I certify that attached hereto is a full, true, and correct copy of the legal opinion rendered by bond counsel on the issuance of the Bonds, dated as of the original date of delivery of and payment for the Bond.

 

                                   ______________________________

                                   City Clerk


     Section 4. Revenues, Accounts and Covenants.

     4.01 The City has created a separate bond proceeds construction account in Fund 435, the Medical District Expansion Fund, to which there shall be credited $___________ of the proceeds of the Bonds. The funds from this account shall be used solely to pay public development costs of the Project, as set out in this Resolution and in accordance with the Tax Increment Plan for TIF District No. 22, and the costs of issuance of the Bonds; and the money in said account shall be used for no other purpose except as otherwise provided by law.

     4.02 Until the Bonds are fully paid or duly called for redemption or otherwise discharged, the City will also maintain a separate debt service account (the “Debt Service Fund”) in the City’s debt service fund created by Section 54(a) of the City Charter, to be used solely for the payment of the interest and the principal, respectively, as such principal and interest become due and payable on the Bonds.

           (a)  There is hereby pledged to the Debt Service Fund certain tax increments from TIF District No. 22 received by the City pursuant to the Tax Increment Pledge Agreement dated as of December 19, 2005, between the City and DEDA (the “Pledge Agreement”), which pledge is hereby accepted by the City, and the City officers are hereby authorized to execute the Pledge Agreement. Based on the estimated market value and current tax rates of property within TIF District No. 22 and the obligations under the Pledge Agreement, the City covenants and agrees that not less than 20% of the costs of the Project financed with the Bonds will be paid from tax increment. The treasurer shall credit the amount paid under the Pledge Agreement as received to the Debt Service Fund.

           (b)  The treasurer shall transfer prior to each Interest Payment Date from the Medical Facility Parking Ramp Operating Account in the General Fund to the Debt Service Fund net revenues from the Parking Ramp then available and needed to pay the principal of the Bonds and interest thereon due on such Interest Payment Date. Such transfers shall be made at the times determined by the treasurer, in accordance with policies established by resolutions of the city council.

           (c)  The treasurer shall credit to the Debt Service Fund $______________ for capitalized interest, $____________ for the rounding amount, plus the amount of accrued interest paid by the Purchaser, all tax increment payable pursuant to the Pledge Agreement, the net revenues pledged from the Parking Ramp pursuant to Section 4.02(b) and the annual ad valorem real estate taxes levied pursuant to Section 4.04 hereof.

     4.03 The city council covenants and agrees to segregate and account for the revenues of the Parking Ramp as provided in this Section. The City will place all such charges and revenues from the Parking Ramp, when collected, and all money received from the sale of any facilities or equipment of the Parking Ramp in a separate Medical Facility Parking Ramp Operating Account within the General Fund maintained by the City. Except as provided in this Section, this account shall be used only to pay claims duly approved and allowed for payment of expenses which, under generally accepted accounting principles, constitute normal, reasonable and current expenses of operating and maintaining the Parking Ramp, and to maintain such reasonable reserves for such expenses as the Director of Finance shall determine to be necessary from time to time in accordance with policies established by the city council. Sums from time to time on hand in this account, in excess of sums required to make such payments and maintain such reserves, constitute the net revenues of the Parking Ramp which are herein pledged and appropriated first to pay the principal of and interest on the Bonds when due.

     Surplus revenues from time to time for the Parking Ramp, in excess of payments due from and reserves required to be maintained in the Medical Facility Parking Ramp Operating Account, may be used for necessary capital expenditures for improvement to the Parking Ramp, for the prepayment and redemption of the Bonds, and thereafter for any other proper municipal purpose.

     4.04 (a)  The full faith and credit and taxing power of the City are hereby irrevocably pledged for the prompt and full payment of the principal of and interest on the Bonds, as such principal and interest respectively become due. To provide monies for the payment of the principal and interest on the Bonds, there is hereby levied a direct, annual ad valorem tax upon all taxable property within the City which shall be extended upon the tax rolls and collected with and part of the other general property taxes of the City for the years and in the amounts as follows:

Levy Year

Collection Year

Gross Tax Levy

Estimated Tax Increment

Estimated Net Revenues

Net Tax Levy

2005

2006

 

$ 0

$ 0

*

2006

2007

 

220,361

315,000

 

2007

2008

 

220,361

315,000

 

2008

2009

 

220,361

315,000

 

2009

2010

 

220,361

315,000

 

2010

2011

 

220,361

315,000

 

2011

2012

 

220,361

315,000

 

2012

2013

 

220,361

315,000

 

2013

2014

 

220,361

315,000

 

2014

2015

 

220,361

315,000

 

2015

2016

 

220,361

315,000

 

2016

2017

 

220,361

315,000

 

2017

2018

 

220,361

315,000

 

2018

2019

 

220,361

315,000

 

2019

2020

 

220,361

315,000

 

2020

2021

 

220,361

315,000

 

2021

2022

 

220,361

315,000

 

2022

2023

 

220,361

315,000

 

2023

2024

 

220,361

315,000

 

2024

2025

 

220,361

315,000

 


*To be paid from capitalized interest deposited in Debt Service Fund

Said levies are such that if collected in full they, together with the estimated tax increment and estimated net revenues pledged for payment of the principal and interest on the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest on the Bonds.

     Such tax levies shall be irrevocable as long as any of the Bonds issued hereunder are outstanding and unpaid; provided, however, that in each year while any Bonds issued hereunder remain outstanding, the city council may reduce or cancel the above levies (i) to the extent of funds expected to be received from tax increment from TIF District No. 22 pursuant to the Pledge Agreement exceeds the estimated amounts of tax increment set forth above, (ii) to the extent the funds expected to be received from net revenues from the Parking Ramp exceeds the estimated amounts of net revenues set forth above, and (iii) to the extent of an irrevocable appropriation to the Debt Service Fund of monies actually on hand for payment of the portion of such principal and interest payable from ad valorem taxes (and not tax increment and net revenues expected to be available as described above), and may direct the county auditor to reduce the levy for such calendar year by that amount.

           (b)  All proceeds of said taxes are hereby appropriated and shall be paid when collected into the Debt Service Fund. If the balances in the Debt Service Fund are ever insufficient to pay all principal and interest then due on the Bonds, 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 balances therein are sufficient.

     Section 5. 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.

     Section 6. Certificate of Proceedings.

     6.01 The city clerk is directed to file with the county auditor a certified copy of this resolution and such other information as the county auditor may require, and to obtain from the county auditor a certificate stating that the Bonds herein authorized have been duly entered on his register.

     6.02 The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to bond counsel certified copies of all proceedings and records of the City relating to the authorization and issuance of the Bonds and other affidavits and certificates as may reasonably be requested to show the facts relating to the legality and marketability of the Bonds as such facts appear from the official books and records of the officers’ custody or otherwise known to them. All of such certified copies, certificates and affidavits, including any heretofore furnished, constitute representations of the City as to the correctness of facts recited therein and the actions stated therein to have been taken.

     6.03 The officers of the City are hereby authorized and directed to certify that they have examined the official statement prepared and circulated in connection with the sale of the Bonds and that to the best of their knowledge and belief the official statement is a complete and accurate representation of the facts and representations made therein as of the date of the official statement.

     6.04 In the event of the absence or disability of the mayor or the city clerk, such officers as in the opinion of the City attorney, may act in their behalf, shall without further act or authorization, execute and deliver the Bonds, and do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers.


STATEMENT OF PURPOSE:  This resolution establishes the terms and form and awards the sale of $12,525,000 Taxable General Obligation Tax Increment Bonds, Series 2005G, to _______________________________ at a true interest cost of ________ percent. The proceeds of the Bonds will be used to pay the public development costs associated with the parking ramp, and related project facilities, to be constructed in connection with the St. Mary’s/Duluth Clinic Health Systems Digestive Disease Cancer Center Project, located in Tax Increment Financing District No. 22, payable in part from tax increment, parking revenues from the ramp and in part from ad valorem taxes.