07-259CouncilFile# 07 /
Green Sheet # 3��� � �✓ 1
RESOLUTION �
OF SAINT PAUL, MINNESOTA
Presented By
Referred To � Committee: Date
AUTHORIZING THE EXECUTION OF A
SECOND AMENDMENT TO A LEASE-PURCHASE AGREEMENT
WHEREAS, the City of Saint Paul, Minnesota (the "City"), and Norwest Inveshnent
Services, Inc., now lrnown as Wells Fargo Brokerage Services, LLC (the "Lessor"), have entered
into a Governmental Lease-Purchase Master Agreement, dated July 30, 1998, and a Supplement
to Master Lease #0040-003, dated October 14, 1998 (the "Lease-Purchase Agreement"), the
balance ofwhich a8er the payment scheduled on April 1, 2007, is $2,l ll,968.22 and the
termination amount ofwhich is $2,146,656.90; and
9 WHEREAS, the City has requested that the Lessor reduce the interest rate and reduce the
10 semiannual payments on the Lease-Purchase Agreement, and the Lessor has agreed to refinance
11 the termination amount and bond counsel's fees and has prepared a Second Amendment to
12 Governmental Lease-Purchase Master Agreement (the "Second AmendmenY'); and
13 WHEREAS, the Lease-Purchase Agreement as amended by the Second Amendment (the
14 "Lease-Purchase Agreement as Amended") lowers the interest rate from 5.71% to 4.48% and
15 will lower the City's semiannual payments by $5,834.19 each April 1 and October 1
16 commencing October 1, 2007, and ending October 1, 2018; and
17 WHEREAS, the Proj ect financed by the Lease-Purchase Agreement as Amended is
18 improvements to the City Hall Annex; and
19 WHEREAS, in entering into the Second Amendment, the City is exercising powers under
20 its home rule charter and powers granted by Minnesota Statues, Section 465.71; and
21 WHEREAS, the Lease-Purchase Agreement as Amended is subject to annual non-
22 appropriation, and the City has the right to terminate the Lease-Purchase Agreement as Amended
23 at the end of any fiscal year during its term:
24 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul,
25 Minnesota as follows:
26 1. Second Amendment. The Second Amendment is hereby approved in
27 substanrially the forxn submitted, with such deletions, completions, and changes therein as aze
28 necessary and appropriate and approved by the City Attorney. The Mayor and Director of the
29 Office of Financial Services are hereby authorized and directed to execute the Second
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1 Amendment and such other documents as are contemplated thereby or necessary in connection
2 therewith.
3 2. Pur� ose. The Second Amendment shall reduce payments made by the City to the
4 Lessor.
5 3. Prepavment: Purchase. The Lease-Purchase Agreement as Amended shall be
6 subject to prepayment at the oprion of the City, with a premium. The City shall have the oprion
7 to purchase any equipment or other property acquired pursuant to the Lease-Purchase Agreement
8 for $1.00 at the end of its full term.
9 4. No General Obli�ation Pledge. The Lease-Purchase Agreement as Amended is
10 not a general obligation of the City but rather is payable from amounts to be annually
11 appropriated, and the fixll faith, credit and taxing powers of the City shall not be and aze not
12 pledged. Payment amounts and frequency on the Lease-Purchase Agreement as Amended are set
13 forth therein.
14 5. Records and Certificates. The officers of the City are hereby authorized and
15 directed to prepare and fiunish to the I,essor, and to the attorneys approving the legality of the
16 Second Amendment, certified copies of all proceedings and records of the City relating to the
17 Second Amendment, and to the financial condition and affairs of the City, and such other
18 affidavits, certificates and information as aze required to show the facts relating to the legality
19 and mazketability of the Lease-Purchase Agreement as Amended as the same appear from the
20 books and records under their custody and control or as otherwise known to them and all such
21 certified copies, certificates, and affidavits, including any heretofore furnished shall be deemed
22 representations of the City as to the facts recited therein.
23 6. NeQative Covenants as to Use of Proceeds. The City hereby covenants not to use
24 the proceeds of the Lease-Purchase Agreement as Amended or to cause or permit them to be
25 used, or to enter into any deferred payment arrangements in such a manner as to cause the Lease-
26 Purchase Agreement as Amended to be a"private activity bond" within the meaning of Sections
27 103 and 141 through 150 of the Code. The City reasonably expects that no acrions will be taken
28 over the term of the Lease Purchase Agreement as Amended that would cause it to be a private
29 activity bond, and the average term of the Lease-Purchase Agreement as Amended is not longer
30 than reasonably necessary for the governmental purpose of the Lease-Purchase Agreement as
31 Amended. The City hereby covenants not to use the proceeds of the Lease-Purchase Agreement
32 as Amended in such a manner as to cause the Lease-Purchase Agreement as Amended to be a
33 "hedge bond" within the meaning of Section 149 (g) of the Code.
34 7. Taac-Exempt Status of the Lease-Purchase A�reement as Amended: Rebate;
35 Elections. The City shall comply with the requirements necessary under the Code to establish
36 and maintain the exclusion from gross income under Section 103 of the Code of the interest on
37 the Lease-Purchase Agreement as Amended, including, without limitation, requirements relating
38 to temparary periods for investments, limitations on amounts invested at a yield greater than the
39 yield on the Lease-Purchase Agreement as Amended, and the rebate of excess investment
40 eamings to the United States.
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1 If any elections ue availabie now or hereafter with respect to arbitrage or rebate matters
2 relating to the Lease-Purchase Agreement as Amended, the Mayor, Clerk, Treasurer and Director
3 of the Office of Financial Services, or any of them, are hereby authorized and directed to make
4 such elections as they deem necessary, appropriate or desirable in connection with the Lease-
5 Purchase Agreement as Amended, and all such elections shall be, and shall be deemed and
6 treated as, elections of the City.
7 8. No Desi�ation as Oualified Tax-Exempt Obli�ation. The Lease-Purchase
8 Agreement as Amended, together with other obligations issued by the City in 2007, exceeds in
9 amount those which may be qualified as "qualified taY-exempt obligations" within the meaning
10 of Secrion 265(b)(3) of the Code, and hence is not designated for such purpose.
11 9. Severabilitv. If any section, paragraph or provision of this resolution shall be held
12 to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section,
13 paragraph, or provision shall not affect any of the remaining provisions of this resolution.
14 10. Headines. Headings in this resolution are included for convenience of reference
15 only and are not a part hereof, and shall not limit or define the meaning of any provision hereto.
Yeas Nays Absent
Benanav ✓
Bostrom ✓
Harris �
Helgen �
Lantry `
Montgomery ,�
Thune �
Requested by Department of:
�RF'T�.� o �TNAnlcTAG SERT71'c�S
.
By:
�
Adopted by Council: Date �/����7
Adoption Certified by Council Secretary
By: � i
Approved by a r: Date 3 2-�
By:
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� Green Sheet Green Sheef Green Sheet Green Sheet Green Sheet Green Sheet
�
FS — F»aalServices
Contact Person & Phone:
Ale�ndra O'Leary
266$832
rvwst ee on Council Agend
21-MAR-07
�oc•Type: RESOLUTION
E-Document Required: N
Document Contact:
Contact Phone:
72:MAR-07
y
Assign
Number
For
Routing
Order
Total # of Signature Pages,_ (Clip AII Locations for Signature)
1. Has this persoNfirm ever worked untler a contract for this department?
Yes No
2. Has this persoNfirtn ever been a city employee?
Yes No
3. Does this person/firm possess a skill not normally possessed by any
current city employee? ,
Yes No
Explain ail yes answers on separate sheet and attach to green sheet
Authorize the Execuflon of a Second Amendment to a Lease-Purchase Agreement.
Planning Commission
CIB Committee
Civil Service Commission
Initiating Problem, lssues, Opportunity (Who, What, When, Where, Why):
The interest rate for the Lease-Purchase Agreement can be reduced from 5.71% to 4.48% and wIll lower the Ciry's semiannual
payments by $5,834.19.
Advantages If Approved: �
The interest rate and payments will both be lowered.
Disadvantages If Approved:
None.
Green Sheet NO: 3037651
0 nanaal Services . -
1 nanualServices De ar�entI)irector
2 ' Attorne p Attome ✓
3 a or's Office Ma orlAssistant
4 uncil
5
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Disadvantages If�Jot Approved:
The interest rate and payment will stay the same and not be lowered.
Trensaction:
Funding Souroe:
Fnancial Information:
(F�cplain)
CosVRevenue Budgeted:
, Activiiy Num6er:
��"`'a F'? - e':�z-�?� �_
RECEIVED
MAYOR'S OFFICE
March 72, 2007 3:33 PM Page 1