07-1171coancil Fiie # D?'//7 /
Green Sheet # 3047055
RESOLUTION
OF SAII�L�RAUL. M1i�ESOTA
Presented
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1 Wf�REAS, the Charter of the City of Saint Paul requires that any entity using city property or the
2 City's right-of-way, or which maintains permanent or semi-permanent fixtures therein for purposes of
3 operating a utility, have a franchise from the city; and
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5 WI�EREAS, the Charter vests the Council the power and authority to grant and regulate franchises;
6 and
S WHEREAS, District Energy St. Paul, Inc. f/k/a District Heating Development Company
9("Company"), was granted a 30-year franchise by the City in 1982, located in Appendix F of the Saint Paul
10 City Code; and
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12 WHEREAS, District Cooling St. Paul, Inc. was granted a 20-year franchise by the City in 1991,
13 located in Appendix K of the Saint Paul City Code; and
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15 WHEREAS, the Company and the City previously entered into the following agreements ("Prior
16 Agreements"):
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(a) City Loan Agreement, dated as of December 1, 1982, between the City and the Company,
as amended from time to time, including the Amendments dated as of December 1, 1985,
August 5, 1988 and July 1, 1997 ("City Loan A�eemenY');
(b) a City Mortgage, Fixture Financing Statement and Security Agreement dated as of
December 1, 1982 and recorded in the Office of the County Recorder of the County of
Ramsey on December 21, 1982 as Document No. 2164537, as amended from time to time,
including by a document recorded in the Office of the County Recorder of the County of
Ramsey on January 8, 1986 as Document No. 2296843, and a Subordination Letter recorded
in the Office of the County Recorder of the County of Ramsey on September 25, 1990 as
Document No. 2564398 (the "City Mortgage");
(c) a Payment and Priority Agreement relating to the Housing and Redevelopment Authority of
the City of Saint Pau1, Minnesota $30,500,000 Floating Rate Monthly Demand District
Heating Revenue Bonds, Series A, dated as of December l, 1982 and as amended from time
to time, including the First Amendment to Payment and Priority Agreement dated as of
April 15, 1985 (the "Payment Agreement"); and
(d) a Subordination Agreement, dated as of September 1, 2006, among the City, the Company,
U.S. Bank National Association, and Dexia Credit Local (New York Branch); and
WHEREAS, in connection with the execution of the documents described above, Company
previously executed and delivered to the City a non-interest-bearing CDBG Loan Note (the "CDBG Loan
Note"), and issued by the Company in fauor of the City in the principal amount of $5,500,000; and
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43 WHEREAS, the City and Company at that time agreed to defer (without interest) the payment and
44 collection of franchise fees in the amount of $7,164,996.85 payable by the Company to the City prior to
45 1995 (the "Franchise Fees"); and
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47 WHEREAS, recenfly Dishict Energy St. Paul and District Cooling St. Paul (collectively, "DE")
48 each submitted to the City a New Franchise Applicarion, dated August 29, 2007, and pursuant to the
49 procedure set forth in [Sec] .24, Appendix K, provided statements of material facts, opiruons and evidence
50 supporting the application, and requested 20-year terms for each new franchise; and
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52 WfIEREAS, the City and DE have engaged in negotiations and haue reached agreement on the
53 terms of each of the new franchise agreements; and
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WHEREAS, a factor that led the parties to reach agreement on the terms of the new franchise
agreements was DE's agreement to enter into two new notes ("2007 Notes") to replace, in their enrirety,
the Company's obligations to the City under the CDBCs Loan Note, and witt� respect to the Franchise Fees
(collectively, the "Prior Obligations"); and
WHEREAS, the City wishes to accept the 2007 Notes as well as to gant DE new franchise
agreements via separate ordinances, C.F. #07-1108 and C.F. #1109.
NOW, THEREFORE, be it resolved:
1. The City shall accept the 2007 Notes in replacement and satisfaction of the Company's
obligations to the City under the Prior Obligations. The Prior A�eements shall secure the payment of the
2007 Notes to the same extent and subject to the same terms and conditions as such Prior Agreements
secured the payment of the Prior Obligations. To the extent that anything in the Pzior Agreements is
inconsistent with said understanding and agreement, such provisions shail be null and void, and sha11 be
deemed to be amended and/or replaced (and, at the election of the City or the Company, shall be actually
amended andJor replaced), as necessary to give full effect to the replacement and modification intended by
the issuance and acceptance of the 2007 Notes. Performance by DE under the 2007 Notes shall be deemed
to satisfy all obligarions of the Company under the Prior Agreements and with respect to the Prior
Obligations.
2. Except as modified hereby in order to reflect the issuance and acceptance of the 2007 Notes
in replacement and satisfaction of the Prior Obligations, all provisions of the City Prior Agreements shall
remain in full farce and effect.
81 follows:
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Appropriate officials and staff of the City are hereby authorized to accept the 2007 Notes as
(a) the Capital Loan Note dated December _, 2007, and executed by the Company in
favor of the City in the principal amount of $8,050,000; and
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86 (b) the Franchise Fee Note dated December � 2007, and executed by the Company in
87 favor of the City in the principal amount of $5,765,274.46;
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89 and aze hereby further authorized to execute such additional documents as may be necessary to complete
90 the closing of the 2007 Notes.
Benanav
Bostrom
Thune
Yeas Nays Absent Requ by Department of:
� v"CdiC2 G� 1 i NG4e,ecl SPY'ti�S ���
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✓
`� BY:
✓
✓
AdoptedbyCouncil: Date ��
Form Approved by Cit�y �A
BY� t � / ��GL 1`!J - ��
Adoption Ceriified by Co cil Secretazy Form Appzp�e� by ayor fo i ssion tp� ouncil
B y' ' � BY� ( � � �/l
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Approved a o : Z / ,
By: _
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Shee� �
D"��!/� l
Department/officekouncil: Date inifiated:
Fs -F���,Se1.,;� 04-DEG07 Green Sheet NO: 3047055
Contact Person 8 Phone:
Bob Geurs
266-8837
musc �se on
12-DEC-07
Doc. Type: RESOLUTION W/$ TRANSAC
E-Document Required: N
Documenf Contact:
Contact Phone:
�
Assign
Number
For
Routing
Order
0 ' ancia7 Services
1 ' ancialServices De arlmentA'uector
2 i Attorne Ci Attome
3 +'Iayor' Otfice - Mavor/Assishant �
4 onnc� Council
5 i Clerk Ci Clerk
Total # of Signature Pages �(Clip All Locations for Signature)
Action Requested:
Approval by City Council of execution of rivo new District Energy Notes. Total amount of $13,815,274.46
datlons: Approve �A) or tte�eci �x�: rersona� ae����r..m�.�o�.� W���....��.._� •��_ � �••�^•••n �°��°°•��-
Planniny Commission 1. Has this person/firm ever worked under a contract for this department?
CIB Committee Yes No
Civii Service Commission 2. Has this person/frm ever been a city employee?
Yes No
3. Does this person/firm possess a skill �ot normally possessed by any
current city employee?
Yes No
Explain ail yes answers on separete sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (VJho, What, When, Where, Why):
Opportunity to accelerate payments due from Disisict Energy �
Advantages It Approved:
New repayment schedule pay back starts in 2008 rather than 2014.
DisadvanWges If Approved:
None.
Disadvantages If Not Approved:
The repayment will remain the same.
�� Trensaction: $13,815,274.46
Funding Source:
Pi nancial Information:
(Explain)
CosURevenue Budgeted:
Activity Number:
� J
December 5, 2007 1:55 PM Page 1