96-1068 S �As�� ` V�'�� Council File # " �
°11���q� �1
Green Sheet # 3 1
RESOLUTION
CIT O SAINT P UL, MINN�SOTA
Presented By
Referred To Committee: Date
APPROVING THE EXECUTION AND DELIVERY OF A SUPPLEMENTAL TRUST
INDENTURE AND AUTHORIZING THE USE OF $300,000 OF 1996 TAX-EXEMPT BOND
ALLOCATION IN CONNECTION WITH THE AMENDMENT OF THE MINNEAPOLIS/SAINT
PAUL HOUSING FINANCE BOARD, SINGLE FAMILY MORTGAGE REVENUE BONDS
(MINNEAPOLIS/SAINT PAUL FAMILY HOUSING PROGRAM, PHASE X, FNMA AND GNMA
MORTGAGE-BACKED SECURITIES PROGRAM) SERIES 1994.
1 WHEREAS, on November 30, 1994, the Minneapolis/Saint Paul Housing Finance Board
2 (the "Board") issued its Single Family Mortgage Revenue Bonds (Minneapolis/Saint Paul Family
3 Housing Program, Phase X, FNMA and GNMA Mortgage-Backed Securities Program), Series
4 1994 in the aggregate principal amount of $20,000,000 (the "Bonds") pursuant to a Trust
5 Indenture, dated as of November 1, 1994(the "Indenture") between the Boazd and Norwest Bank
6 Minnesota, N.A. as trustee (the "Trustee"); and
7
8 WHEREAS, the Bonds were issued to fund the Board's program (the "Program") of �
9 providing below market interest rate mortgage loan financing primarily to persons of low or
10 moderate income purchasing single family homes to be used as their principal places of residence •
11 and which were located within the geographic limits of the City of Saint Paul (the "City") or the
12 City of Minneapolis; and
13
14 WHEREAS, because of a change in market conditions, the interest rate on mortgage loans
15 permitted to be originated under the Program is no longer competitive; and
16
17 WHEREAS, the Board therefore proposes to enter into a supplemental indenture, with
18 consent of certain bondholders as required by the Indenture, in order to reduce the interest rate
19 on certain of the Bonds, and accordingly to allow for mortgage loans bearing interest at a lower
20 rate to be originated under the Program; and
21
22 WHEREAS, in connection with such amendment, it is necessary and desirable for the
23 Board to cause the specific Bonds to be amended to be sold at a premium, which requires the use
24 of up to $300,000 of the Citv's entitlement allocation of tax-exempt bonding authority; and
25
26 WHEREAS, the Board will hold or cause to be held a public hearing re�arding the
27 issuance of Bonds usin� such allocation as required bv federal tax law; and
28
29 WHEREAS, for purposes of federal tax law, the amendment of the Indenture in the
30 manner contemplated will constitute a reissuance of a portion of the Bonds;
31
32 WHEREAS, the City Council on *'�° a�*° �°-°�� '��� Au�ust 28, 1996 held a public
33 hearing regarding such reissuance of the Bonds as required by federal tax law; and
. qb _ �v�
34 NOW, THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
35 SAINT PAUL:
36
37 1. The amendment of the Indenture in the manner described above, and specifically
38 in the form approved or to be approved by the Board, is hereby approved.
39 ,
40 2. Be it further resolved that there is hereby authorized and approved the use b�
41 Board in connection with the Bonds of up to $300.000 of the City's 1996 allocation of tax-
42 exempt bondin� authoritv.
43
44 3. Be it further resolved that the Mayor and City Clerk, and other officers of the City
45 are authorized and directed to prepare and furnish in connection with the amendment of the
46 Indenture and the use of such entitlement allocation, certified copies of all proceedings and
47 records of the City relating to the Bonds and such amendment, and such other �davits and
48 certificates (including but not limited to those required by bond counsel) as may be required to
49 show the facts relating to the legality, continuing tax exemption and marketability of the Bonds
50 as such facts appeaz from the books and records in said officer's custody and control or as
51 otherwise known to them; and all such certified copies, certificates and affidavits, including any
52 heretofore furnished, shall constitute representations of the City as to the truth of all statements
53 made on behalf of the City and contained therein. The Mayor and City Clerk and said officers
54 are further authorized to execute such additional documents as shall be determined to be
55 necessary and desirable to provide for the amendment of the Indenture, the use of the Citv's
56 entitlement allocation and the transactions related thereto. °
57
58 3 4. Be it further resolved that in the event any of the officers of the City authorized "
59 to execute documents on behalf of the City under this resolution shall for any reason be unable
60 to do so, any member of the City Council, or any other officer of the City, is hereby directed and
61 authorized to do so on behalf of the City, with the same effect as if executed by the officer
62 authorized to do so in this resolution.
� Navs Absent Requested by Department of:
uerin �
arris
e ar �r
t�.t ra �"
ettman �
une —T7�
a ev BY�
Adopted by Council: Date p p Form Approved by City Attorney
Adoption Certified by Council Secretary BY:
BY� - - Approved by Mayor for Submission to Council
Approved by Mayor: Date Ir
�-- BY: dr� (C
By: � -- -
�t�— tc���'
1. T . . V V V ��
/OFFICFJC�UNCIL DATE INITIATED
P.E.n. 8/13/96 GREEN S ET�_
CONTACT PERSON 6 PHONE �NITI — INITIAI/DATE
�DEPARTMENT DIRECTOR �CITY COUNCIL
Kat Lindblad, 266-6614 ASSIGN �CITYATfORNEY �CITYCLERK
MUST BE ON COUNCIL AGENDA BY(DATE) NUMBER FOR BUDaET DIRE �FIN.8 MGT.SERVICES DIR.
ROUTING
ORDER MAYOR(OR ASSISTANn
8/28/96 Public Hearin i
70TAL#OF SIGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATURE) 2 Tom Meyer�
ACt10N REQUESTED:
Approval of execution and delivery of a supplemental trust indenture to restructure
Phase X of the Minneapolis/Saint Paul Housing �ance Board First-Time Home Buyer Program.
RECOMMENDATIONS:Approve(A)or Reject(R) pER80NAl SERVICE CONTRACTS MUST ANSWER THE FOLLOWING GUESTIONB:
_PLANNINQ COMMISSION _ CIVIL SERVICE COMMISSION �• Hes this person/firm ever worked under a contract for this department?
_CIB COMMITrEE _ YES NO
2. Has this person/firm ever been a city employee?
_STAFF — YES NO
_DIS7RIC7 COURT _ 3. Does this person/firm possess a skill not normall
y possessed by any current cNy employee4
SUPPORTS WHICH COUNCIL OBJECTIVEI YES NO
Explaln ell yss answen on aeparats sh�et and ettach to yrs�n sheat
INITIATINO PROBLEM,ISSUE,OPPORTUNITY(Who,What,When,Where,Why):
In November 1994, the cities of Minneapolis and Saint Paul launched Phase X of their joint
first-time home buyer program with the issuance of $20 million in ta�c-exempt revenue bonds.
The initial 8.57 interest rate has become less attractive as private market rates have droppe .
The finance team is negotiating with the major existing bond holder to drop the rate on the
2027 term bond, enabling the program to offer an interest rate to first-time home buyers belo
7.57.
ADVANTA(iES IF APPROVED:
1. Provides attractive financing to first-time home buyers as an incentive for them to
purchase a home in Saint Paul.
2. Lower interest rate makes home ownership affordable to a broader range of incomes.
3. Valuable tax-exempt mortgage revenue bond resource preserved and used.
4. Lower cost alternative to refunding entire outstanding bond balance.
DISADVANTA�ES IF APPROVED:
REC���'��1 p„� �, c�
AUG 1� 1996 AUG 2 � 1�,��
�TTQRNE1f
DISADVANTAGES IF NOT APPROVED: "`"" '
1. Phase X will likely not originate all proceeds.
2. Future programs less attractive to bond investors due to unsuccessful originations in
Phase X.
TOTAL AMOUNT OF T ANSACTION COStS of issuance NTE COST/REVENUE BUDGETEO(CIRCLE ONE) YES NO
� 11zj�6�� $3}$�$� to be fundedfrom bond residuals
FUNDItaG SOURCE � Phase II bond residual s ACTIVITY NUMBER � � �'`O�d
FINANCIAL INFORWfAT10N:(EXPLAIN) .��.�
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Interdepartmental Memorandum
CiTY OF SAINT PAUL
��
TO: City Councilmembers
FROM: Katy Lindblad
DATE: September 5, 1996
SUBJECT: Substitute Resolution No. 96-1068
�
As you may recall, staff requested that item #86 on the August 28, 1996 City Council agenda be laid
over until September 11, 1996 (now scheduled as item # 45). The layover was requested because the
original restructuring proposed for Phase X of the joint Saint PauUMinneapolis First-Time Home
Buyer Program was rejected by the principal bondholder. The finance team has developed a new
financial restructuring, acceptable to this bondholder, that is explained in detail in the Springsted
Incorporated report attached to your September 11 HRA Board Report on this same item. The -�
attached substitute resolution is offered as a companion to this HRA action.
cc: Nancy Anderson
Mary Erickson
Tim Marx
� • �' � o�
, '�., Council File # b —
Green Sheet # 38677 �
RESOLUTION �
CITY F INT PAUL, MINNESOTA /1�
`T
Presented By
Referred To Committee: Date
APPROVING THE EXECUTION AND DELIVERY OF A SUPPLEMENTAL T ST
INDENTURE IN CONNECTION WITH THE NIINNEAPOLIS/SAINT PAUL HOU G
FINANCE BOARD, SINGLE FAMII.Y MORTGAGE REVENUE BONDS
(NIINNEAPOLIS/SAINT PAUL FAMII.Y HOUSING PROGRAM, PHASE X, AND
GNMA MORTGAGE-BACKED SECURITIES PROGRA1Vn SERIES 1994.
��
1 WHEREAS, on November 30, 1994, the Minneapolis/Saint Paul sing Finance Board (the
2 "Board") issued its Single Family Mortgage Revenue Bonds (Minneapo ' /Saint Paul Family Housing
3 Program, Phase X, FNMA and GNMA Mortgage-Backed Securities P gram), Series 1994 in the
4 aggregate principal amount of$20,000,000 (the "Bonds") pursuant a Trust Indenture, dated as of
5 November 1, 1994 (the "Indenture") between the Board and Norw st Bank Minnesota, N.A. as trustee
6 (the "Trustee"); and
7
8 WHEREAS, the Bonds were issued to fund the Boar s program (the "Program") of providing
9 below market interest rate mortgage loan financing prim ' y to persons of low or moderate income
10 purchasing single family homes to be used as their prin ' al places of residence and which were
11 located within the geographic limits of the City of Sa' Paul (the "City") or the City of Minneapolis;
12 and
13
14 WHEREAS, because of a change in mar t conditions, the interest rate on mortgage loans
15 permitted to be originated under the Program ' no longer competitive; and
16
17 WHEREAS, the Board therefore pr oses to enter into a supplemental indenture, with consent
18 of certain bondholders as required by th ndenture, in order to reduce the interest rate on certain of
19 the Bonds, and accordingly to allow fo mortgage loans bearing interest at a lower rate to be
20 originated under the Program; and
21
22 WHEREAS, for purposes f federal t� law, the amendment of the Indenture in the manner
23 contemplated will constitute a r issuance of a portion of the Bonds;
24
25 WHEREAS, the Ci Council on the date hereof has held a public hearing regarding such
26 reissuance of the Bonds required by federal tax law; and
27
28 NOW, 'THE ORE, BE IT RESOLVED BY TI� CITY COUNCIL OF THE CITY OF
29 SAINT PAUL:
30
31 l. e amendment of the Indenture in the manner described above, and specifically in the
32 form approve or to be approved by the Board, is hereby approved.
33
34 2. Be it further resolved that the Mayor and City Clerk, and other officers of the City are
35 authorized and directed to prepare and furnish in connection with the amendment of the Indenture,
� �� �' � RIGl �lAL �� - �o��
�
36 certified copies of all proceedings and records of the City relating to the Bonds and such amendment, �
37 and such other affidavits and certificates (including but not limited to those required by bond counsel)y� �
38 as may be required to show the facts relating to the legality, continuing tax exemption and
39 marketability of the Bonds as such facts appear from the books and records in said officer's custnr�y
40 and control or as otherwise known to them; and all such certified copies, certificates and affida�its,
41 including any heretofore furnished, shall constitute representations of the City as to the ttuth,,�i�f all
42 statements made on behalf of the City and contained therein. The Mayor and City Clerk��d said
43 officers are further authorized to execute such additional documents as shall be determiq�d to be
44 necessary and desirable to provide for the amendment of the Indenture and the transa�ions related
45 thereto. ��
46 �i;�,�
47 3. Be it further resolved that in the event any of the officers of tl�'City authorized to
48 execute documents on behalf of the City under this resolution shall for any r�ason be unable to do so,
49 any member of the City Council, or any other officer of the City, is hereb�G'directed and authorized to
50 do so on behalf of the City, with the same effect as if executed by the o�cer authorized to do so in
51 this resolution.
�
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Yeas Na Absent Requested by Department of:
uerin
arris
e ar Planni and Economic Development
ostrom
ettman
une By:
a ev
Form App d by Cit t rney
Adopted by Council: Date
Adoption Certifi by Council Secretary g�,:
BY� Approved by Mayor for Submission to
Council
Approved by Mayor: Date
By: �
By: