07-77Suspension-�- 1/24/07
Council File # ��-��
Green Sheet # ��D �����
Presented By
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RESOLUTION
PAUL, MINNESOTA
Referred
Committee: Date
AUTHORIZING THE EXECUTION OF A
FIRST AMENDMENT TO A LEASE-PURCHASE AGREEMENT
3 WHEREAS, the City of Saint Paul, Minnesota (the "City"), and Norwest Investment
4 Services, Inc., now known as Wells Fargo Brokerage Services, LLC (the "Lessor"), have entered
5 into a Governmental Lease-Purchase Master Agreement, and a Supplement to Master Lease
6 #0040-002, each dated July 30, 1998 (the "Lease-Purchase AgreemenY'), the balance of which
7 after the payment scheduled on February 1, 2007, is $1,249,874.44 and the termination amount
8 ofwhichis$1,262,854.93;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 First Amendment to
12 Govemmental Lease-Purchase Master Agreement (the "First Amendment"); and
13 WHEREAS, the Lease-Purchase Agreement as amended by the First Amendment (the
14 "Lease-Purchase Agreement as Amended") lowers the interest rate from 5.52% to 4.45% and
15 will lower.the City's semiannual payments by $2,486.83 each February 1 and August 1
16 commencing August 1, 2007, and ending August 1, 2013; and
17 WHEREAS, the Project financed by the Lease-Purchase Agreement as Amended is
18 operating equipment for the RiverCentre, and the RiverCentre Convention and Visitors Authority
19 will provide moneys for making the payments on the Lease-Purchase Agreement as amended;
20 and
21 WHEREAS, in entering into the First Amendment, the City is exercising powers under
22 its home rule charter and powers granted by Minnesota Statues, Section 465.71; and
23 WHEREAS, the Lease-Purchase Agreement as Amended is subject to annual non-
24 appropriation, and the City has the right to terminate the Lease-Purchase Agreement as Amended
25 at the end of any fiscal year during its term:
26 NOW, THEREFORE, BE IT RESOLVED by the Council of the Ciry of Saint Paul,
27 Minnesota as follows:
28 1. First Amendment. The First Amendment is hereby approved in substantially the
29 form submitted, with such deletions, compietions, and changes therein as are necessary and
30 appropriate and approved by the City Attorney. The Mayor, the Director of the Office of
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1 Financial Services and the President of the RiverCentre Convenrion and Visitors Authority aze
2 hereby authorized and directed to execute the First Amendment and such other documents as are
3 contemplated thereby or necessary in connection therewith.
4 2. Pumose. The First Amendment shall reduce payments made by the City to the
5 Lessor.
6 3. Prepavment; Purchase. The Lease-Purchase Agreement as Amended shall be
7 subject to prepayment at the option of the City, with a premium. The City shall have the option
8 to purchase any equipment acquired pursuant to the Lease-Purchase Agreement for $1.00 at the
9 end of its full term.
10 4. No General Obligation Pled�e: Inirial Appropriation. The Lease-Purchase
11 Agreement as Amended is not a general obligation of the City but rather is payable from
12 amounts to be annually appropriated, and the full faith, credit and tasing powers of the City shali
13 not be and are not pledged. Payment amounts and frequency on the Lease-Pwchase Agreement
14 as Amended are set forth therein.
15 5. Records and Certificates. The officers of the City are hereby authorized and
16 directed to prepare and furnish to the Lessor, and to the attomeys approving the legality of the
17 First Amendment, certified copies of all proceedings and records of the City relating to the First
18 Amendment, and to the financial condirion and affairs of the City, and such other affidavits,
19 certificates and information as are required to show the facts relating to the legality and
20 marketability of the Lease-Purchase Agreement as Amended as the same appeaz from the books
21 and records under their custody and control or as otherwise known to them and all such certified
22 copies, certificates, and affidavits, inciuding any heretofore furnished shall be deemed
23 representations of the City as to the facts recited therein.
24 6. Negative Covenants as to Use of Proceeds. The City hereby covenants not to use
25 the proceeds of the Lease-Purchase Agreement as Amended or to cause ar permit them to be
26 used, or to enter into any deferred payment arrangements in such a manner as to cause the Lease-
27 Purchase Agreement as Amended to be a"private activity bond" within the meaning of Sections
28 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken
29 over the term of the Lease Purchase Agreement as Amended that would cause it to be a private
30 activity bond, and the average term of the Lease-Purchase Agreement as Amended is not longer
31 than reasonably necessary for the governmental purpose of the Lease-Purchase Agreement as
32 Amended. The City hereby covenants not to use the proceeds of the Lease-Purchase Agreement
33 as Amended in such a manner as to cause the Lease-Purchase Agreement as Amended to be a
34 "hedge bond" within the meaning of Section 149 (g) of the Code.
35 7. Taac-Exempt Status of the Lease-Purchase Agreement as Amended; Rebate;
36 Elections. The City shall comply with the requirements necessary under the Code to establish
37 and maintain the exclusion from gross income under Section 103 of the Code of the interest on
38 the Lease-Purchase Agreement as Amended, including, without limitation, requirements relating
39 to temporary periods for investments, limitations on amounts invested at a yield greater tl�an the
40 yield on the Lease-Purchase Agreement as Amended, and the rebate of excess investment
41 earnings to the United States.
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1 ff any elections aze available 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 L,ease-
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�nation as Oualified Taac-Exemnt 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 tax-exempt obligations" within the meaning
10 of Section 265 (b)(3) of the Code, and hence is not designated for such purpose.
11 9. RiverCentre Convention and Visitors Authoritv. The RiverCentre Convention
12 and Visitors Authority shall ratify the First Amendment after its execution.
13 10. Severabilitv. If any section, paragraph or provision of this resolution shall be held
14 to be invalid or uneforceable for any reason, the invalidity or unenforceability of such section,
15 pazagraph, or provision shall not affect any of the remaining provisions of this resolution.
16 11. Headin�s. Headings in this resolution are included for convenience of reference
17 only and are not a part hereof, and shall not limit or define the meaning of any provision hereto.
Yeas Nays Absent Requested by De artment of: ,
Benanav � 'e l �rV!
Bostrom � BY� �
Harris �
Helgen �
Lantry �
Montgomery ,/
Thune J
Adopted by Council: Date
Adoption Certified by Council Secretary
By: O�i
Approved by Ma f te �
By: ��it,[i .Q�,� �� d'
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� Green Sheet Green Sheet
Depar�menVoffice/council: Date Initia
FS — F�� Secvices 22-JAN-07
Contact Person & Phone:�
Todd P. Hurley
6-8837
Must 6e on Council Agend:
25-JAN-07
Doc.Type: RESOLUTION
E-DOCUment Required: N
Documeni Contact:
Contact Phone:
o�—��
Green Sheet Green Sheet Green Sheet Green Sheet
Green Sheet NO: 3036371
� ucymuuem oem iareian
0 ' ancialServices
A55ign 1 in9ncialServices De artmentD'uector
Number y � Attorne
For
Routing 3 a ois�ce Ma or/ASSistant
Order 4 uncii
5 ' Clerk Ci Clerk
Total # of Signature Pages _(Clip All Locations for Signature)
Approve attached Resoluflon authorizing the Execuflon of a First Amendment to a Lease-Purchase Agreement.
�aanons: approve �w7 or hi
Planning Commission
CIB Committee
Civil Service Commission
t. Has this persoNfirm ever worked under a contract for this department?
Yes No
2. Has this person/firm ever been a city employee?
Yes No
3. Does this persoNfirm possess a skill not normaliy possessed by any
current city employee?
Yes No
Explain ali yes answers on separete sheet and attach to green sheet
�
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
The City has reques[ed that the intecest rate and semiannual payments be lowered on the I.ease-Purchase Agreement, and the Lessor
has agreed to refmance the temunafion amount of which is $1,262,854.93.
Advantages If Approved:
The interest rate and semiannual payments will be lowered.
Disadvantages If Approvetl;
DisadvanWges If Not Approved:
The interest rate and semiannual payments will not be lowered.
Transaction:
Funding Source:
Financial Information:
(EXplain)
Cost/Revenue Budgeted:
Activity Number:
January 22, 2007 12:57 PM Page 1