88-77 A
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Extract of Minutes of Meeting of the
City Council of the City of
Chanhassen. Carver and Hennepin Counties, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City
Council of the City of Chanhassen, Minnesota, was duly held in the City
Hall in said City on Monday, July 25, 1988, at 7:30 o'clock p.m.
The following members were present: Mayor Hamilton, Councilmen Horn,
Johnson, Boyt, and Geving.
and the following were absent:
None
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Councilman Horn noved the adoption of the following resolution:
RESOLUTION NO. 88-77A
RESOLUTION PROVIDING FOR THE DEFEASANCE
AND PAYMENT OF CERTAIN OUTSTANDING
GENERAL OBLIGATION BONDS OF THE CITY.
BE IT RESOLVED By the City Council of the City of Chanhassen, Carver and
Hennepin Counties, Minnesota (City) as follows:
Section 1. Background: Findings.
1.01. The City has heretofore issued, sold and delivered the follow-
ing issues of general obligation bonds:
a) $1,960,000 Improvement Bonds of 1976, Series 2, dated November I,
1976, callable on February I, 1989, of which $535,000 in princi-
pal amount is outstanding (1976 Bonds);
b) $900,000 General Obligation Improvement Bonds of 1977, dated
December 1, 1977, callable on March I, 1990, of which $275,000 in
principal amount is now outstanding (1977 Bonds);
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c) $2,390,000 General Obligation Refunding Improvement Bonds of
1978, dated June 16, 1978, callable on February I, 1987, of which
$520,000 in principal amount is now outstanding; and
d)
$590,000 General Obligation Improvement Bonds of 1984, dated
October 1, 1984, callable on December 1, 1989, of which $450,000
in principal amount is now outstanding.
(The various issues defined above are referred to herein as "the Bonds".)
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1.02. The Council has investigated the facts with the assistance of
its financial advisers and hereby determines that there are presently in
the various debt service funds for the Bonds adequate funds for the
defeasance of the obligations represented by the Bonds, that is to say,
that if the balances in the various debt service funds are invested in
Securities authorized by Minnesota Statutes, Chapter 475 (Act) there will
be funds in the debt service funds at the times and in the amounts neces-
sary to provide for the prompt and full payment of the principal of and
interest on the Bonds as the same become due or at redemption and to meet
the requirements of the Act.
1.03. It is further determined that it is in the best interests of
the sound financial management of the City that the obligations represented
by the Bonds be defeased and paid.
1.04. The financial advisers to the City have presented a proposed
plan for the defeasance of the Bonds and bond counsel is of the opinion
that such defeasance is authorized by the Act.
1.05. It is further determined that it is the intent of the Council
that the defeasance of the Bonds is not to be construed as in any way
impairing or affecting the covenants with or pledges to the holders of the
Bonds contained in the various respective resolutions authorizing the
issuance of the Bonds.
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1.06. The City Manager has presented to the Council the form of an
Escrow Agreement (Agreement) between the City and Norwest Bank Minneapolis,
National Association, Minneapolis, Minnesota providing for the escrowing
and investment of the balances in the various debt service funds in
Securities in an Escrow Account. The form of the Agreement has been
reviewed by the Council and is now on file with the Manager.
Section 2. Approvals: Authorizations.
2.01. The form of the Agreement is approved. The Mayor and Manager
are authorized and directed to execute and deliver the Agreement in sub-
stantially the form now on file on behalf of the City.
2.02. The Mayor and Manager are authorized and directed to contract
for and purchase the necessary securities pursuant to the Agreement.
2.03. It is determined that upon the funding of the Escrow Account
that there will have been made and there is hereby made an irrevocable
appropriation to the respective debt service funds for the Bonds of an
amount equal to 100% of the principal and interest to become due on the
Bonds. The Manager is authorized and directed to notify the County Audi-
tors of Hennepin and Carver Counties of the defeasance of the Bonds and to
request the cancellation of any and all tax levies made by the resolutions
authorizing the issuance of the Bonds.
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2.04. Notwithstanding the provisions of this resolution the Council
hereby reaffirms and restates its pledge of the full faith, credit and
taxing powers of the City for the prompt and full payment of the principal
of and interest on the Bonds.
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2.05. The Mayor, Manager and other officers and agents of the City
are authorized and directed to execute and deliver such other instruments
and to take such other actions as are necessarv to CArrv out the provisions
of the resolution.
2.06. The following issues of the Bonds are hereby, and shall be in
accordance with the terms of the Agreement, called for redemption and
prepayment in according with their respective terms on the dates indicated:
a) The 1976 Bonds on February 1, 1989;
b) the 1977 Bonds on March 1, 1990;
c) the 1978 Bonds on February 1, 1989; and
d) the 1984 Bonds on December 1, 1989.
The motion for the adoption of the foregoing resolution was duly
seconded by Member Geving
, and upon vote being taken thereon,
the following voted in favor thereof:
Mayor Hamilton, Councilrren Horn,
Jolmson, Boyt, and Geving.
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and the following voted against the same: None
whereupon said resolution was declared duly passed and adopted.
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STATE OF MINNESOTA )
)
COUNTIES OF CARVER AND HENNEPIN) SS.
)
CITY OF CHANHASSEN )
I, the undersigned, being the duly qualified and acting Manager of the
City of Chanhassen, hereby certify that I have carefully compared the
attached and foregoing extract of minutes of a regular meeting of the City
Council held on Monday, July 25, 1988, with the original thereof on file in
my office, and the same is a full, true and correct copy therefrom insofar
as the same relates to the defeasance and payment of certain outstanding
General Obligation Bonds of the City.
WITNESS My hand officially as such City Manager and the corporate seal
of the City this 25 day of
July
, 1988.
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City Manager
City of Chanhassen, Minnesota
(SEAL)
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ESCROW AGREEMENT
VARIOUS GENERAL OBLIGATION BONDS
CITY OF CHANHASSEN, MINNESOTA
THIS AGREEMENT, made pursuant to Minnesota Statutes, Chapter 475 (Act)
and executed by and between the City of Chanhassen, Carver and Hennepin
Counties, Minnesota (City), and Norwest Bank Minneapolis, National Associa-
tion, Minneapolis, Minnesota, a banking corporation whose deposits are
insured by the Federal Deposit Insurance Corporation and whose capital and
surplus is not less than $500,000 (Agent):
WITNESSETH: That the parties hereto recite and, in consideration of
the mutual covenants contained herein, covenant and agree as follows:
1. The City, in accordance with Resolution No. 88-77Aadopted on July 25,
1988, entitled "Resolution Providing for the Defeasance and Payment of
Certain Outstanding General Obligation Bonds of the City" (Resolu-
tion), a certified copy of which has been supplied to Agent, has
provided for the defeasance of the following outstanding general
obligation bonds of the City:
a)
$1,960,000 Improvement Bonds of 1976, Series 2, dated November 1,
1976, callable on February 1, 1989, of which $535,000 in princi-
pal amount is outstanding (1976 Bonds);
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b)
$900,000 General Obligation Improvement Bonds of 1977, dated
December 1, 1977, callable on March 1, 1990, of which $275,000 in
principal amount as now outstanding (1977 Bonds);
c) $2,390,000 General Obligation Refunding Improvement Bonds of
1978, dated June 16, 1978, callable on February 1, 1987, of which
$520,000 in principal amount is now outstanding; and
d) $590,000 General Obligation Improvement Bonds of 1984, dated
October 1, 1984, callable December 1, 1989, of which $450,000 in
principal amount is now outstanding.
(The various issues defined above are referred to herein as "the
Bonds".)
2.
The City has also in accordance with the Resolution invested monies in
the debt service funds for the respective Bonds in securities (Securi-
ties) that are direct ot insured obligations of the United States of
America or agencies of the United States. The Securities are de-
scribed in Exhibit A attached to this Agreement and made a part
hereof. The City hereby irrevocably deposits the Securities with the
Agent on the date of this Agreement. It is understood and agreed that
the dates and amounts of payments of principal and interest on the
Securities are such as to provide the funds required to pay at maturi-
ty or on a Redemption Date (as herein defined) the principal amount of
the Bonds and to pay interest on the Bonds to maturity or Redemption
Date.
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3.
The Agent acknowledges receipt of the Securities and agrees that it
will hold the Securities in a special escrow account (Escrow Account)
created by the Resolution in the name of the City, and will collect
and receive on behalf of the City all payments of principal and
interest on the Securities and will remit from the Escrow Account (i)
to the respective Paying Agents for the Bonds the funds required from
time to time for the payment of principal and interest on the Bonds
and to the Paying Agent for the Bonds the principal amount needed for
the redemption and prepayment of those respective Bonds on the Redemp-
tion Dates as follows:
a) The 1976 Bonds on February 1, 1989;
b) the 1977 Bonds on March 1, 1990;
c) the 1978 Bonds on February 1, 1989; and
d) the 1984 Bonds on December 1, 1989.
Attached hereto as Exhibit B is a schedule of principal and interest
payment dates, Redemption Dates, and Paying Agents for the Bonds.
After provision for payment of the Bonds, the Agent will remit any
remaining funds in the Escrow Account to the City.
4.
In order to insure continuing compliance with the Internal Revenue
Code of 1986, and Internal Revenue Service Regulations promulgated
thereunder (collectively the Code), the Agent agrees that, it will not
reinvest any cash received in payment of the principal of and interest
on the federal securities held in the Escrow Account. This prohibi-
tion on reinvestment shall continue unless and until an opinion is
received by Agent from nationally recognized bond counsel that rein-
vestments, as specified in said opinion, may be made in a manner
consistent with the Code. Reinvestment, if any, of amounts in the
escrow account made pursuant to this paragraph may be made only in
direct obligations of the United States of America which mature prior
to the next date on which either principal or interest on the Bonds is
payable.
s. Agent expressly waives any lien upon or claim against the moneys and
investments in the Escrow Account.
6.
If at any time it shall appear to the Agent that the money in the
Escrow Account allocable for such use hereunder will not be sufficient
to make any payment described in paragraph 2, the Agent shall immedi-
ately notify the City. ~he City thereupon shall forthwith deposit in
Escrow Account from funds on hand and legally available to it such
additional funds as may be required to meet fully the amount to become
due and payable. Attached hereto as Exhibit C is a statement from
Voto, Tautges, Redpath lit Co., Ltd., Certified Public Accountants,
White Bear Lake, Minnesota, dated as of the date hereof, certifying
that the Securities are sufficient to make full and timely payments as
provided in paragraph 2 above.
7. The City will not repeal or amend the Resolution. The Agent shall
cause the Notices of Call for redemption attached hereto as Exhibits
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D-l through D-4 to be published in accordance with law not more than
90 days nor less than 45 days before the respective Redemption Dates;
but failure to eive ~u('h notice shall not affect the validitv of the
call for redemption.
8.
On or before March 1, 1989, and on or before March 1 of each year
thereafter until termination of the Escrow Account, the Agent shall
submit to the City a report covering all money it shall have received
and all payments it shall have made or caused to bOe made hereunder
during the preceding twelve months. Such report shall also list all
obligations held in the Escrow Account and the amount of money on hand
in the Escrow Account on January 1 of the year of the report.
9.
It is recognized and agreed that title to the Securities and cash, if
any, held in the Escrow Account from time to time shall remain vested
in the City but subject always to the prior charge and lien thereon of
this Agreement and the use thereof required to be made by this Agree-
ment. The Agent shall hold all such money and obligations in a
special trust fund and account separate and wholly segregated from all
other funds and securities of the Agent, and shall never conuning1e
such money or securities with other money or securities; provided,
however, that nothing herein contained shall be construed to require
the Agent to keep the identical monies, or any part thereof, received
for the Account, on hand, but moneys of an equal amount (except to the
extent such are represented by investments permitted under this
Agreement) shall always be maintained on hand as funds held by the
Agent as trustee, belonging to the City, and a special account shall
at all times be maintained on the books of the Agent, together with
such investments. In the event of the Agent's failure to account for
any money or obligations held by it in the Escrow Account, such money
and obligations shall be and remain the property of the City, and if
for any reason such money or obligations C::.lnnot be identified, all
other assets of the Agent shall be impressed with a trust for the
amount thereof, and the City shall be entitled to a preferred claim
upon such assets. It is understood and agreed that the responsibility
of the Agent under this Agreement is limited to the safekeeping and
segregation of the funds and securities deposited with it in the
Escrow Account, and the collection of and accounting for the principal
and interest payable with respect thereto.
10. This Agreement is made by the City for the benefit of the holders of
the Bonds, and is not revocable by the City, and the investments and
other funds deposited in the Escrow Account and all income therefrom
have been irrevocably appropriated for the payment of the Bonds and
interest thereon in accotdance with this Agreement.
11. This Agreement shall be binding upon and shall inure to the benefit of
the City and the Agent and their respective successors and assigns.
In addition, this Agreement shall constitute a third party beneficiary
contract for the benefit of the holders of the Bonds and said third
party beneficiaries shall be entitled to enforce performance and
observance by the City and the Agent of the respective agreements and
covenants herein contained as fully and completely as if said third
party beneficiaries were parties hereto. Any bank into which the
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Agent may be merged or with which it may be consolidated or any bank
resulting from any merger or consolidation to which it shall be a
party or any bank to which it may sell or trAnl';fer All or 1';11h!':t:mti 1'11-
ly all of its corporate trust business shall, if the City approves, be
the successor agent without the execution of any document or the
performance of any further act.
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12. The Agent may at any time resign and be discharged of its obligations
hereunder by giving to the Administrator of the City written notice of
such resignation not less than 60 days before the date when the same
is to take effect, and by publication of a copy of such notice in a
daily or weekly Minnesota newspaper published in a Minnesota City of
the first class, or its metropolitan area, which circulates throughout
the state and furnishes financial news as part of its service, not
less than 30 days prior to such date; provided that the full costs of
securing a successor shall be paid by the Agent; and provided further
that the successor shall also serve as the Agent without cost to the
City. Such resignation shall take effect upon the date specified in
the notice, or upon the appointment and qualification of a successor
prior to that date. In the event of such resignation, a successor
shall promptly be appointed by the City, and the Manager of the City
shall immediately give written notice thereof to the predecessor agent
and publish the same in the manner described in this paragraph 12.
If, in a proper case, no appointment of a successor agent is made
within 4S days after the receipt by the City of notice of such resig-
nation, the Agent or the holder of any Bond may apply to any court of
competent jurisdiction to appoint a successor agent, which appointment
may be made by the Court after such notice, if any, as the Court may
prescribe. Any successor agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor agent and to the City a
written acceptance of such appointment, and shall thereupon without
any further act, deed or conveyance become fully vested with all
moneys, properties, duties and obligations of its predecessor, but the
predecessor shall nevertheless pay over, transfer, assign and deliver
all moneys, securities or other property held by it to the successor
agent, shall execute, acknowledge and deliver such instrucments of
conveyance and do such other things as may reasonably be required to
vest and confirm more fully and certainly in the successor agent all
right, title and interest in and to any property held by it hereunder.
Any bank into which the Agent may be merged or with which it may be
consolidated or any bank resulting from any merger or consolidation to
which it shall be a party or any bank to which it may sell or transfer
all or substantially all of its corporate trust business shall, if the
City approves, be the successor agent without the execution of any
document or the performance of any further act.
13. The Agent acknowledges receipt of the sum of $
compensation for its services under this Agreement.
as its full
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14. Any notice, authorization, request or demand required or permitted to
be given in accordance with the terms of this Agreement shall be in
writing and sent by registered or certified mail addressed:
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be duly
each of
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If to the City:
City of Chanhassen
690 Coulter Drive
Chanhassen, Minnesota 55317
Attn: City Manager
If to the Agent:
Norwest Bank Minneapolis,
National Association
Attn: Corporate Trust Division
Norwest Center, 6th & Marquette
Minneapolis, Minnesota 55479-0069
WITNESS WHEREOF the parties hereto have caused this instrument to
executed by their duly authorized officers, in four counterparts,
which is deemed to be an original agreement, on this day of
, 1988. ----
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By
Its C~ty Manager
NORWEST BANK MINNEAPOLIS,
NATIONAL ASSOCIATION
By
Its
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EXHIBIT D-l
NOTICE OF CALL FOR REDEMPTION
$1,960,000 IMPROVEMENT BONDS OF 1976, SERIES 2
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
NOTICE IS HEREBY GIVEN, that by order of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, there have been
called for redemption and prepayment on
February 1, 1989
all outstanding bonds of the City designated as Improvement Bonds of 1976,
Series 2, dated November 1, 1976, having stated maturity dates of February
1 in the years, 1990 to 1993 both inclusive, totalling $410,000 in princi-
pal amount and bearing serial numbers 311 to 392, both inclusive. The
bonds are being called at a price of par plus accrued interest to February
1, 1989, on which date all interest on the bonds will cease to accrue.
Holders of the bonds hereby called for redemption are requested to present
their bonds for payment with coupons attached at the main office of First
Bank National Association (as Successor to Northwestern National Bank of
Minneapolis), in the City of Minneapolis, Minnesota, on or before February
1, 1989.
Dated: July 25, 1988.
BY ORDER OF THE CITY COUNCIL
By /s/ Donald Ashworth
City Manager
Further Information:
Mericor Financial Services, Inc.
3055 Old Highway 8
Minneapolis, Minnesota 55418
612/782-2520
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EXHIBIT D-2
NOTICE OF CALL FOR REDEMPTION
$900,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 1977
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
NOTICE IS HEREBY GIVEN, that by order of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, there have been
called for redemption and prepayment on
March 1, 1990
all outstanding bonds of the City designated as General Obligation Improve-
ment Bonds of 1977, dated December 1, 1977, having stated maturity dates of
March 1, in the years, 1991 to 1993 both inclusive, totalling $150,000 in
principal amount and bearing serial numbers 151 to 180, both inclusive.
The bonds are being called at a price of par plus accrued interest to March
1, 1990, on which date all interest on the bonds will cease to accrue.
Holders of the bonds hereby called for redemption are requested to present
their bonds for payment with coupons attached at the main office of First
Bank National Association (as successor to Northwestern National Bank of
Minneapolis), in the City of Minneapolis, Minnesota, on or before March 1,
1990.
Dated: July 25, 1988.
BY ORDER OF THE CITY COUNCIL
By /s/ Donald Ashworth
City Manager
Further Information:
Mericor Financial Services, Inc.
3055 Old Highway 8
Minneapolis, Minnesota 55418
612/782-2520 ~
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EXHIBIT D-3
NOTICE OF CALL FOR REDEMPTION
$2,390,000 GENERAL OBLIGATION REFUNDING IMPROVEMENT BONDS OF 1978
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
NOTICE IS HEREBY GIVEN, that by order of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, there have been
called for redemption and prepayment on
February 1, 1989
all outstanding bonds of the City designated as Improvement Bonds of 1979,
dated June 16, 1979, having stated maturity dates of February 1 in the
years, 1988 to 1992 both inclusive, totalling $520,000 in principal amount
and bearing serial numbers 375 to 478, both inclusive. The bonds are being
called at a price of par plus accrued interest to February 1, 1989, on
which date all interest on the bonds will cease to accrue. Holders of the
bonds hereby called for redemption are requested to present their bonds for
payment with coupons attached at the main office of First Bank National
Association (as Successor to Northwestern National Bank of Minneapolis), in
the City of Minneapolis, Minnesota, on or before February 1, 1989.
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Dated: July 25, 1988.
BY ORDER OF THE CITY COUNCIL
By /s/ Donald Ashworth
City Manager
Further Information:
Mericor Financial Services, Inc.
3055 Old Highway 8
Minneapolis, Minnesota 55418
612/782-2520
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EXHIBIT D-4
NOTICE OF CALL FOR REDEMPTION
$590,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 1984
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
NOTICE IS HEREBY GIVEN, that by order of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, there have been
called for redemption and prepayment on
December 1, 1989
all outstanding bonds of the City designated as General Obligation Improve-
ment Bonds of 1984, dated October 1, 1984, having stated maturity dates of
December 1 in the years, 1990 to 1993 both inclusive, totalling $300,000 in
principal amount. The bonds are being called at a price of par plus
accrued interest to December 1, 1989, on which date all interest on the
bonds will cease to accrue. Holders of the bonds hereby called for redemp-
tion are requested to present their bonds for payment at the main office of
Trust National Association (as Successor to First Trust Company of Saint
Paul), in the City of St. Paul, Minnesota, on or before December I, 1989.
Dated: July 25, 1988.
BY ORDER OF THE CITY COUNCIL
By /s/ Donald Ashworth
Ci ty Manager
Further Information:
Mericor Financial Services, Inc.
3055 Old Highway 8
Minneapolis, Minnesota 55418
612/782-2520
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NOTICE OF DEPOSIT AND DEFEASANCE
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
NOTICE IS HEREBY GIVEN that by Resolution of the City Council of the
City of Chanhassen, Minnesota, there has been deposited at Norwest Bank
Minneapolis, National Association, Minneapolis, Minnesota as Escrow Agent
direct obligation of the United States of America Securities in amounts and
maturities of such nature as to pay when due and at prior redemption
principal of and interest on the following general obligations of the City:
a) $1,960,000 Improvement Bonds of 1976, Series 2, dated November 1,
1976, available on February 1, 1989, of which $535,000 in princi-
pal amount is outstanding (1976 Bonds);
b) $900,000 General Obligation Improvement Bonds of 1977, dated
December 1, 1977, available on March 1, 1990, of which $275,000
in principal amount as now outstanding (1977 Bonds);
c) $2,390,000 General Obligation Refunding Improvement Bonds of
1978, dated June 16, 1978, available on February 1, 1987, of
which $520,000 in principal amount is now outstanding; and
d)
$590,000 General Obligation Improvement Bonds of 1984, dated
October 1, 1984, available December 1, 1989, of which $450,000 in
principal amount is now outstanding.
This notice is for informational purposes only and does ~ require
the surrender of exchange of any of the bonds of the above listed issues.
The Bonds will be called for redemption at their next redemption date, and
a separate notice of redemption for each issue will be published and bond
holders notified where appropriate.
Additional information may be obtained from Mericor Financial Servic-
es, Inc., 3055 Old Highway 8, Minneapolis, Minnesota 55418, 612/782-2520.
BY ORDER OF THE CITY COUNCIL OF
THE CITY OF CHANHASSEN, MINNESOTA
By /s/ Donald Ashworth
City Manager
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