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97-1760 r - � Presented By Referred To RFSnI l ITl(�N WHEREAS: 1. The Port Authority of the City of Saint Paui (the "Authority") has given its approval (meeting to be held on February 25, �997) to the issuance of its 52,295,000 Variable Rate Demand Industrial Development Revenue Bonds, Series �997 (the "BOnds") to finance the costs to be incurred by Northern Iron Corporation in connection with the acquisition and installation of certain manufacturing equipment to be located at the Northern Iron Corporation facility in the City of Saint Paul, Minnesota (the "Project"); and 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(fl of the Internal Revenue code of 1986, as amended; and 4. To meet the requirements of both state and federai law, the Port Authority has requested that the City Council gives it requisite approvai to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. Council File ��_ Green Sheet # �/ � ❑ t ! i ! T NOW, THEREFoRE, BE 1T RESOLVED by the Council of the City of Saint Paui that, in accordance with the requirements of Section 147(fl of the Internal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port AuChority for tne purposes described in the Port Authority resolution adopted February 25, 1997, the exact detaiis of which, including but not iimited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refund►ng bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bonds are issued. Adoption Cedified by Council Secretary �Y� a - Approved by Mayor: Date _`� 3� 7� By: — ` L� ,/�.�, Requested by Department o£ Approved by M�yor for 9u�ission to Council By: �-�� .�/ c�� AdoptedbyCouncil: Date �. �� Form Ap�proved by City Attorney gY��/ �-"� �� °-- lo�� j _ . . _ ____ __ . �� 97 /�� c�t�coun�� z�iZ�97 GREEN SHEE N° 36443 ' INfTIAVDATE INff1AVDATE ` CANTACT PERSpN & PHONE � DEPARTMENr DIflE � CRV COUNCIL Dave Thune 266-8620 ��N O CRYATfORNEY O CRYCLERK MUST BE ON COUNqL AGENDA BY i�MTE) NUYBEfi FOR O gUW ET OIqECTOq O flN. & MGL SERVICES DIR pOVfING ONOEB � MpVOF IOP ASSISTANf) O �� TOTAL # OF SIGtiATURE PAGES � (CUP ALL LOCATIONS FOR SIGNATUHE) - AC[l�ti REpIJE$TED: Approval of the issuance of $2,295,000 Variable Rate Demand Industrial Development Revenue Bonds to finance the costs to be incurred by Northern Iron Corporation. RECOMMENDA7iONS: Approva (A) a Rejeet (R) pERSONAL SEfiVICE CONTRACTS �IUST ANSWER TXE FOLLOWING �UESTIONS: _ PLANNING COMMISSION _ CIVIL SEHVICE COMMISSION �� Has this persoMirtn ever worketl under a contreCt for Mis tlepartment? - _ CIB COMMRTEE YES 'NO � _ S7AFF 2. Has ihis personRrm ever been a ciry employee? — YES NO _ DIS7AICf cqURi _ - 3. Ooes Mis personlFrm po5sess a skill 1wt no(malf y possessetl by any curtent city empbyee? � SUPPORiS WHICH COUNCII O&IECTIVE? YES NO Explain all yes answers on aeperate sheet antl attach t0 green sheet INRIATING PHOBLEM, ISSUE. OPPORTUNIN (Wlro, Whet, When, Where. Why): Port Authority has approved this action, on February 25, 1997. " ADVANTAGESIFAPPROVED: ' Bonds will be issued, , DISADVANTAGESIFAPPROVED: None. � DISADVANTAGESIFNOTAPPROVED: Bonds will be unable to be issued. � k �, �Ea � 3 �9y7 TOTAL AMOUNT OF TFiANSACTION $ � COST/HEVENUE BUDGE7ED (CIpCLE ONE) YES NO FUNDIfdG SOURCE ACTIVITV NUMBEH FINANCIAL INFOqMATION: (EXPLAIN) q� i�� tITY OF iHE CITY Of SAtNS PAUL � FAX (612) 223-5198 TOIL FREE (8�) 328-8417 ...,., ., ....,,.,ARK TOWERS • 345 ST. PEiER STREEf • ST. PAUL MN 55102-1661 • PHONE (612) 224-5686 February 12, 1997 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hall Annex 25 West Fourth Street St. Paul, Minnesota 55102 RE: $2,295,000 TAX-EXEMPT CONDUIT BOND ISSUE NORTHERN lRON CORPORATION (A Subsidiary of Versa Companies) Dear Ms. Wheelock: We sutrmit for your review and refeRal to the office of the Mayor, City Council, and City Attomey's o�ce, details pertaining to the issuance of a tax-exempt conduit bond issue in ths amount of $2,295,000 backed by a Firstar Bank Milwaukee N.A. Letter of Credit to finance the acquisition and installation of an in-line molding and handling production line at Northern Iron Corporation's existing manufacturing Iocation at 867 Forest Street, Saint Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Smail Issue Pool, as the project is manufacturing. The City of Saint Paui's entitlement allocation will not be affected by this application. The closing deadline, because of the allocation, is May 6, 1997. In addition to the staff memorandum, we are attaching a draft copy of the proposed Gity Council Resolution and a copy of the Resoiution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $2,295,000 that will be conside�ed by the Port Authority's Board on Febnsary 25, 1997. City Council action wi0 be required after the Port Authority's Board meeting of February 25, 1997, Your expeditious handling of this matter will be appreciated. Sincerely, �� ' KRJ:ak Attachment cc: Mayor Coleman s��aw�r�-aw aa Kenneth R. Johnson President � � a�-,��, , . . ... DEPAFTMENTfOFFIGFICAUNGII DATE INITIATED N -�� O O 3aint Paul Port Authority 2-11-97 GREEN SHE � CANTACipERSON&PHONE INITIAUDA INRIAVDATE � DEPARTMENT OIRECTOFL � CRY COUNGL Gregory W. Drehmel ��N �CT'ATTOFNEV �CITYCLERK MUST BE ON COUNCIL AGENDA BY (DATE) �� F � R � BODGET DIRECTOF � FIN. & MGT. SERVICES OIR. fl011TING Februarp 26 , 1997 oROea � MAYOR (OR ASSI5TANT) � ` -- - TOTAL # QF SIGNATURE PAGES (CLIP AlL LOCATIONS FOR SlGNATURE) ACTION qEpUESTED: APproval of the issuance of an approximate $2,295,000 tax-exempt conduit bond issue for the aequisition and installation of manufaeturing equipment for Northern Iron Corporation, a subsidiary of Versa Companies. . RECAMMENOA71oNS: Appmve (A) or Rejeci (R) PERSONAL SERYICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: _ PLANNMG COMMISSION _ CIVIL SERVICE CqMMIS510N �� Has this personlfirm ever worked under a coMract for this depaAmenY? _ CIB OpMMfTTEE A. Port Authorit VES NO __ STAFF B Cl. OP CORl. 2- Has this persoNfirm ever been a ciry employee? — YES NO ....._ DiS7RICi COUrtT _ 3. Does this personHirm possess a skill not normally possessed by any current ciry employee? SUPPORTS WHICH COUNCII O&IECTIYE? YES NQ Explain all yes answers on seperate sheet and ettach to green sheet INITIATING Pqpg�EM, ISSUE, OPPORTUNffY (Who. What, When, Where. Why): The issuance of a tax-exempt conduit bond issue will allow the acquisition and installation of an in-line molding and handling produetion line at Northern Iron Corporation's existing manufacturing location at 867 Forest Street, Saint Paul, Minnesota. ADVANTAGES IF ApPROVEO: It is anticipated that. up to 2� new jobs will be created during the initial two years of the operation of the financed equipment, with an annual additional payroll of approximately $551,852. DISADVANTAGES IF APPROVE�' None DISADVANTAGES IF NOTAPPROVED� The new jobs created by the addition of the financed equipment may not be ereated. TOTAL AMOUNT OF iRANSACTION $ 2 295 � OOO COS7/REVENUE BUDGE7ED (CIRCLE ONE) YES NO Port Authority Tax-Exempt FUNDING SOURCE Conduit Bond Issue ACiIVI7Y NUMBER FINANCIAL MFOqMATION� (EXPLAIN) : SAINT PAUL PORT AUTHORITY � .•� . � TO: �toM: CREDtT COMMtTTEE Gregory W. Drehmel Kenneth R. Johnson DATE: February 7,1997 SLTBJECf: NORTHERN IRON CORPORATION (a subsidiary of Versa Companies) Authorization for Approximate $2,295,000 Tax-Exempt Conduit Bond Issue • � . Approval of final resolution authorizing the issuance of an approximate $2,295,000 tax- exempt conduit bond issue to Northem Iron Corporation (a subsidiary of Versa Companies). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer. Borrower: Trustee: Letter af Credft Bank: Underwriters: Remarketing Agent: Company's Counsel: Underwriter's Counsel: Letter of Credit Bank Counsef: Bond Counsel: $2,295 Variable Rate Demand Industriai Deveiopment Revenue Bonds 15-Year Fully Amortizing Port Authority of the City of Saint Paul Northem fron Corporation First Trust National Association Firstar Bank Milwaukee, N.A. Piper Jaffray inc. Miller & Schroeder Financia{, Inc. Piper Jaffray Inc. Oppenheimer, Wolff 8� Donnelly Kennedy & Graven Rider Bennett Egan & Arundel Leonard, Street 8� Deinard, P.A. 9'7 /�,� � � � 4 Northem iron Corporation Credit Committee Memo February 7, 1997 Page 2 97 /�/� � - , • . The Borrower. Northem Iron Corporation (the �Borrower") is an iron foundry which produces precision iron castings that are sold primarily to the agriculture, heavy equipment and transportation industries. The castings are made of ductile and gray iron. The Borrower markefis and selis its products through an in-house sales force and through manufacturers' representatives, lts primary market is east of the Rocky Mountains of the United States. The Borrower and its predecessors have been in business at its current location for more than 75 years. The current organization of the Borrower was incorporated under the laws of the State of Minnesota in 1987. The Borrower is a wholly-owned subsidiary of Versa Companies, a Minnesota corporation, which acquired the Borrower in 1984. Versa also owns all of the outstanding common stock of the following Minnesota corporations: Northem Machine Corporation, Saint Paul, Minnesota; Versa Die Cast, Inc., New Hope, Minnesota; and Precision Electric Mfg. � Co., Plymouth, Minnesota (which does business under the name Versa Electronics). The Borrower and Northem Machine Corporation produce, market and sell their products under the trade name of Versa tron and Machine. The Bonds: The Bonds wiif be issued in the approximate principal amount ofi $2,295,000 and will bear interest at a variable rate established weekly by the Remarketing Agent. The maximum interest rate is 12%. Bondholders will have the rigfit to tender their Bonds for repurchase on seven days notice. Such Bonds will be purchased from remarketing p�oceeds, or if the Remarketing Agent is unable to remarket, from a draw on the Letter of Credit. The Proiect: The proceeds of the Bonds wiil be loaned to the Borrower, and used to acquire and install an in-fine molding and handling line at the Borrowers existing 150,000 sq.ft. manufacturing faci{ity located at 887 Forest Street, Saint Paul, Minnesota 55106. No substantial modfication to the building is contemplated. The availabiliry of tax- exempt financing wilt enable Versa Companies and its subsidiary, Northem Iron Corporation, to expand its present production facility and increase its revenue base by an estimated $3,000,000 annually when fully operational. As a result, new jobs will also be created to support the revenue and production increases. . Northem Iron Corporation Credit Committee Memo February 7, 1997 Page 3 Various pieces of equipment are used in the production of iron castings, one of which is an in-line molding and handling line. This equipment provides for the automation of the preparation of molds, up to 30 inches by 30 inches in size, into which molten iron is poured to produce an iron casting. The entire in-line molding and handling system is self-contained, as it provides for the preparation of the mold, transportation of the mold to the pouring area, and retum of the frames used for the molds to the beginning of the process for reuse. Em�loyment Imnact: - Versa Companies, through its subsidiary, Northem fron Corporation, is working with the Port Authority's customized training program. Success by 17 is a special project created under the umbrella of the customized training program that provides intemships to East Side youth in manufacturing companies. �a Success by 17, Northem Iron Corporation has agreed to provide one East Side youth an intemship at the pay rate of $7.00 per hour. The duties will include some finishing work, janftorial, and machine operations. During the intemship, the employer will identify specfic skills needed for success in the company and work with the Port to ensure that the youth also receives some technical training from an accredited institution such as the Saint Paul Technical College. Northem Iron Corporation is one of five East Side companies currently working with the Port on "Success by 17". Versa Companies believes it will create 20 new jobs as a result of the acquisition of this new manufiacturing equipment with an estimated annual payroll increase of over $550,000 per year when fully operational. For purposes of complying with the Minnesota's public assistance to business; wage and job requiremenYs law, Versa Companies and its subsidiaries have agreed to create on average 12 new jobs during the next two years wdh minimum wages ranging between $9.00 to $10.00 per hour. The Letter of Credit Bank: The fnitial Letter of Credit will be provided by Firstar Bank Milwaukee, N.A., the principal banking office of which is located in Milwaukee, Wisconsin. The bank is a national banking association organized under the laws of the United States of America and a subsidiary of Firstar Corporation, a registered bank holding company organized under the Bank Holding Company Act of 1956, as amended, and whose principal office is located in Milwaukee, Wisconsin. 9�� /�� • C �J i Northem Iron Corporation Credit Committee Memo February 7, 1997 Page 4 �� . - . - . . Sources of Funds: Bond Proceeds Estimated Borrower Funds Total Sou�ces of Funds Uses of Funds: Equipment Purchase Instaifation Costs Estimated Costs of Issuance Total Uses of Funds $2,295,000 55.000 $2,350,000 $1,882,426 367,574 100.000 $2,350 SECURITY FOR TfiE BONDS: ��ecial Limited Obligations• The Bonds wiil be special, limfted obiigations of the Authority and will not constitute or give rise to a pecuniary liability of the Authority, the City of Saint Paul or the State of Mi�nesota or a charge against their genera! credit or taxing powers. No bondholder wil4 have the right to demand payment of the principal of, purchase price of, or interest on, the Bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the Bonds pursuant to the Indenture, which includes the amounts drawn on the Letter of Credit and amounts payable by the BoROwer under the Loan Agreement Loan Agreement: Under the Indenture, the Authority has pledged its interest in the Loan Agreement (including the payments payable thereunder to the Authority by the Borrower, but excluding certain rights to payment of fees, expenses and indemnification) to the Trustee to secure the Bonds. Payments made under the Loan Agreement will be paid directly to the Trustee and will be sufficient, if paid promptly and in full, to pay al4 Qrincipal of and interest on the Bonds as the same becomes due, at maturity, upon purchase or redemption and prepayment, or othervvise. As long as the Letter of Credit is in effect, however, payments of principal of and interest on the Bonds required to be made under the Loan Agreement will be made directly to the Bank, to be applied to the Borrower's obligation to reimburse the Bank for amounts drawn under the Letter of Credi� The Trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the Borrower under the Loan 1�greement. � � Northem Iron Corporation Credft Committee Memo February 7, 1997 Page 5 Letter of Credit: Payment of the principal amount and purchase price of the Bonds, and up to approximately 52 days interest thereon (measured at the 12% maximum rate) wiil be secured initially by ihe initial Letter of Credit or, under certain circumstances a Substitute Letter of Credit. The Trustee is required to present a draft under the Letter of Credit to pay principal and interest when due on the Bonds. The Sonds are offered primarily on the basis of the financiat strength of the Bank and not on the basis of the financial strength of the Borrower. The Letter of Credit will have an initial term of three years, and will be automatically renewed in one-year increments thereafter, unless the Bank provides at least six months notice that it will not renew. If #he Letter of Credit is not renewed or replaced, the Bonds will be subject to mandatory redemption, and the Trustee is instructed to draw on the Letter of Credit, before it expires, to pay principal and interest then due. �COMMENDATION: Staff recommends approval of the issuance of the approximate $2,295,000 tax-exempt conduit bond issue on behalf of Northem Iron Corporation (a subsidiary of Versa Gompanies). GWD:ak a�� 97 /7� � � CJ 97 �� Resolution No. RESOLUTION OF 'I� � PORT AUTHORiTY OF THE CITY OF SAINT PAUL 1�.ii:1�1T�►F.�i It has been proposed that the Port Authority of the City of Saint Paui (the "Port Authority") issue its Variable Rate Demand Industrial Development Revenue Bonds (Northern Iron Corporation Project) Series 1997 (the "Boncis") in the approximate principal amount of $2,295,000, and tUat the pmceeds of such Bonds be loaned to Northern Iron Corporation, a Minnesota corporation (the "Borrower") to Snance the acquisition and installation of manufacturing equipment (the "Project") at a facility owned by the Borrower in the City of Saint Paul, Minnesota (the "City"). On December 17, 1996 the Port Authority adopted its Resolution No. 3608 indicating its preliminary approval of the Project on behalf of Versa Compazues, the pazent corQoration of the Borrower. The Bonds will be issued and secured by the terms of an Indenture of Tnut (the "Indenture") between the Port Authority and First Tnist National Association in Saint Paul, Minnesota (the "Trustee") and will be payable primarily from draws made on an irrevocable letter � of credit issued by Firstar Bank Milwaukee, N.A. (the "Credit Enhancer") pursuant to a Letter of Credit Reimbursement Agreement to be dated as of Mazch 1, 1997 between the Borrower, the Credit Enhancer and Signal Bank, Inc. (the "Letter of Credit Agreement"). The Boaower and the Port Authority will also entez into a Loan Agreement (the "Loan Agr�menP') in which the Borrower will agree to maintain the Letter of Credit and make all payments due either to the Credit Enhancer or on account of the Bonds. The Bonds and the interest on said Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shaii the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a charge against theu general credit or taxing powers and shall not constitute a chazge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than their interest in said Project. It is intended that interest on the Bonds be excluded from gross income of the holders thereof for federal income tax purposes. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the • 1993656 q�� public hearing, a public hearing has been held on the issuance of the Bonds, at wtuch public hearing all persons were given an opportunity to speak. • NOW, Tf�REFORE, BE IT RESOLVED BY Tf� BOARD OF COMMISSIONERS OF TF� PORT AUTHORITY OF THE CITY aF SAINT PAUL, AS FOLLOWS: The findings and conclusions previousiy made by the Port Authority in its Resolution No. 3608 are hereby reaffumed in their entirety. For the purpose of financing the Project, and paying certain costs of issuance and other expenses in coffiection with the iss�ance of the Bonds, the Port Authority hereby authorizes the issuance, sale and delivery of the Bonds in a principal amount ug to $2,295,000. The Bonds shall be in such principal amounts, shall bear interest at rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on &le with the Port Authority Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Bonds or interest thereon. Forms of the foilowing documents have been submitted to the Port Authority for review • and/or approval in connection with the sale, issuance and delivery of the Bonds: the Bond Purchase Agreement to be entered into between the Port Authority, the Borrower and Piper Ja�ay Inc. and Miller & Schroeder Financial, Inc. (collectively, the "Original Purchaser") (the "Bond Purchase AgreemenP'); the Indenture; the Loan Agreement dated March 1, 1997 to be entered into between the Port Authority and the Borrower; the Bonds; the Preliminary Official Statement to be used in mazketing the Bonds (the "Official StatemenP�; the Remarketing Agreement dated Mazch 1, 1997 to be entered into by and between Piper Jaf&ay Ina (the "Remazketing Agent"), the Borrower and the Trustee (the "Remazketing Agreement"); and C� 1493656 ��-i�� the Letter of Credit Agreement, including a form of the Letter of Credit (collectively, the "Doc�ents"). � It is hereby found, dete�ined and declazed that: The issuance and sale of the Bonds, the e�cecution and delivery by the Port Authority of the Documents and the perFormance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.152 through 469165, as amended (the "Act")• � It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a charge upon any funds other tban the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any properry of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the � Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they aze issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely &om the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority within the meaning of any constitutional or statutory limitation. The forms of the Documents and e�ibits thereto aze approved substantially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by pazagraph 8. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to execute the Documents (to the extent the Port Authority is a party thereto) in substantially the forms submitted, as modified pursuant to paragaph 8, and any other documents and certificates which in the opinion of Port Authority staff and Bond Counsel are necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution thereof the authorized officers of the Port Authority shail bind the � 1493656 9'7�� Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or oflices prior to the authentication and delivery of the Bonds. Copies of a!1 of the documenu � necessazy to the transaction described shall be delivered, filed and recorded as pmvided herein and in the Indentiue. The President and othet officers of the Port Authority are authorized and directed to prepaze and fiunisb to the Original Purchaser and Bond Counse2 certified copies of proceedings and records of the Port Authority relating to the issvance of the Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legality of ihe Bonds and the other transacrions herein contemplated as such facts appeaz from the books and records in the officers' custody and control or as otherwise known io ihem; and all such certified copies, certificates and affdavits, including any heretofore furaished, shall constitute representations of tfie Port Authority as to the truth of aii statements contained therein. The approvai hereby given to the various Documents refened to above inciudes approval of such additional details therein as may be necessazy and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer, and includes approval of, among other things: establislvnenf of the final principal amount of the Bonds and the interest nte to be borne thereby for the initial period, pravided that the maximum interest rate on the Bonds � shall not exceed 12.00% per annum; the establishment of the maturity schedule and catl provisions to be applicable to the Bonds; and such retated instruments as may be required to satisfy the conditions of any purchaser of the Bonds from the Original Purch�.cer. The Part Authority hereby consents to the distribution of the Official Statement, as such Official Statement is finalized with the participation of Port Authority staff and $ond Counsel. The proposal of the Originai Purchaser fo purchase the Bonds upon the tenns and conditions set forth in the Bond Purchase Ageement is hereby fovnd and determined to be reasonable and is hereby accepted. The authority to approve, execute and deliver future amendments to financing docwnents entered into by the Port Authority in connection with the issuance of the Bonds and the other transactions fierein contemplated, is hereby delegated to the President of the Port Anthority, provided that; (a) such amendments do not require the consent of the holders of tha Bonds; (b} such amendments do not materiaily adversely affect the interests of the Port Authority as the Port Authority of the Bonds; (c} such amendments do not contravene ot violate any poIicy of the Port Authority; and (d) such aznendments aze acceptable in form and substance to Bond Counsei. The � 1493fi56 � �� execution of any instrumettt by the President of Yhe Port Awhority shail be conclusive evidence of the approval of such instruments in accordaace with the terms hereof. � No covenant, stipulation, obligation or agreement contained herein or in the Documents shaI2 be deemed to be a coveaant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or emplayee of the Port Authority in that persons individual capacity, and neither the Board of Commissianers nor any officer executing the Bonds shail be Iiable personally on the Bonds or be subject to any personai iiability or accountability by reason of the issuance thereof. � . .. - . �. s_. ., .. PORT AUTHORITY OF TI� CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary � 149365fi 0 r - � Presented By Referred To RFSnI l ITl(�N WHEREAS: 1. The Port Authority of the City of Saint Paui (the "Authority") has given its approval (meeting to be held on February 25, �997) to the issuance of its 52,295,000 Variable Rate Demand Industrial Development Revenue Bonds, Series �997 (the "BOnds") to finance the costs to be incurred by Northern Iron Corporation in connection with the acquisition and installation of certain manufacturing equipment to be located at the Northern Iron Corporation facility in the City of Saint Paul, Minnesota (the "Project"); and 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(fl of the Internal Revenue code of 1986, as amended; and 4. To meet the requirements of both state and federai law, the Port Authority has requested that the City Council gives it requisite approvai to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. Council File ��_ Green Sheet # �/ � ❑ t ! i ! T NOW, THEREFoRE, BE 1T RESOLVED by the Council of the City of Saint Paui that, in accordance with the requirements of Section 147(fl of the Internal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port AuChority for tne purposes described in the Port Authority resolution adopted February 25, 1997, the exact detaiis of which, including but not iimited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refund►ng bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bonds are issued. Adoption Cedified by Council Secretary �Y� a - Approved by Mayor: Date _`� 3� 7� By: — ` L� ,/�.�, Requested by Department o£ Approved by M�yor for 9u�ission to Council By: �-�� .�/ c�� AdoptedbyCouncil: Date �. �� Form Ap�proved by City Attorney gY��/ �-"� �� °-- lo�� j _ . . _ ____ __ . �� 97 /�� c�t�coun�� z�iZ�97 GREEN SHEE N° 36443 ' INfTIAVDATE INff1AVDATE ` CANTACT PERSpN & PHONE � DEPARTMENr DIflE � CRV COUNCIL Dave Thune 266-8620 ��N O CRYATfORNEY O CRYCLERK MUST BE ON COUNqL AGENDA BY i�MTE) NUYBEfi FOR O gUW ET OIqECTOq O flN. & MGL SERVICES DIR pOVfING ONOEB � MpVOF IOP ASSISTANf) O �� TOTAL # OF SIGtiATURE PAGES � (CUP ALL LOCATIONS FOR SIGNATUHE) - AC[l�ti REpIJE$TED: Approval of the issuance of $2,295,000 Variable Rate Demand Industrial Development Revenue Bonds to finance the costs to be incurred by Northern Iron Corporation. RECOMMENDA7iONS: Approva (A) a Rejeet (R) pERSONAL SEfiVICE CONTRACTS �IUST ANSWER TXE FOLLOWING �UESTIONS: _ PLANNING COMMISSION _ CIVIL SEHVICE COMMISSION �� Has this persoMirtn ever worketl under a contreCt for Mis tlepartment? - _ CIB COMMRTEE YES 'NO � _ S7AFF 2. Has ihis personRrm ever been a ciry employee? — YES NO _ DIS7AICf cqURi _ - 3. Ooes Mis personlFrm po5sess a skill 1wt no(malf y possessetl by any curtent city empbyee? � SUPPORiS WHICH COUNCII O&IECTIVE? YES NO Explain all yes answers on aeperate sheet antl attach t0 green sheet INRIATING PHOBLEM, ISSUE. OPPORTUNIN (Wlro, Whet, When, Where. Why): Port Authority has approved this action, on February 25, 1997. " ADVANTAGESIFAPPROVED: ' Bonds will be issued, , DISADVANTAGESIFAPPROVED: None. � DISADVANTAGESIFNOTAPPROVED: Bonds will be unable to be issued. � k �, �Ea � 3 �9y7 TOTAL AMOUNT OF TFiANSACTION $ � COST/HEVENUE BUDGE7ED (CIpCLE ONE) YES NO FUNDIfdG SOURCE ACTIVITV NUMBEH FINANCIAL INFOqMATION: (EXPLAIN) q� i�� tITY OF iHE CITY Of SAtNS PAUL � FAX (612) 223-5198 TOIL FREE (8�) 328-8417 ...,., ., ....,,.,ARK TOWERS • 345 ST. PEiER STREEf • ST. PAUL MN 55102-1661 • PHONE (612) 224-5686 February 12, 1997 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hall Annex 25 West Fourth Street St. Paul, Minnesota 55102 RE: $2,295,000 TAX-EXEMPT CONDUIT BOND ISSUE NORTHERN lRON CORPORATION (A Subsidiary of Versa Companies) Dear Ms. Wheelock: We sutrmit for your review and refeRal to the office of the Mayor, City Council, and City Attomey's o�ce, details pertaining to the issuance of a tax-exempt conduit bond issue in ths amount of $2,295,000 backed by a Firstar Bank Milwaukee N.A. Letter of Credit to finance the acquisition and installation of an in-line molding and handling production line at Northern Iron Corporation's existing manufacturing Iocation at 867 Forest Street, Saint Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Smail Issue Pool, as the project is manufacturing. The City of Saint Paui's entitlement allocation will not be affected by this application. The closing deadline, because of the allocation, is May 6, 1997. In addition to the staff memorandum, we are attaching a draft copy of the proposed Gity Council Resolution and a copy of the Resoiution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $2,295,000 that will be conside�ed by the Port Authority's Board on Febnsary 25, 1997. City Council action wi0 be required after the Port Authority's Board meeting of February 25, 1997, Your expeditious handling of this matter will be appreciated. Sincerely, �� ' KRJ:ak Attachment cc: Mayor Coleman s��aw�r�-aw aa Kenneth R. Johnson President � � a�-,��, , . . ... DEPAFTMENTfOFFIGFICAUNGII DATE INITIATED N -�� O O 3aint Paul Port Authority 2-11-97 GREEN SHE � CANTACipERSON&PHONE INITIAUDA INRIAVDATE � DEPARTMENT OIRECTOFL � CRY COUNGL Gregory W. Drehmel ��N �CT'ATTOFNEV �CITYCLERK MUST BE ON COUNCIL AGENDA BY (DATE) �� F � R � BODGET DIRECTOF � FIN. & MGT. SERVICES OIR. fl011TING Februarp 26 , 1997 oROea � MAYOR (OR ASSI5TANT) � ` -- - TOTAL # QF SIGNATURE PAGES (CLIP AlL LOCATIONS FOR SlGNATURE) ACTION qEpUESTED: APproval of the issuance of an approximate $2,295,000 tax-exempt conduit bond issue for the aequisition and installation of manufaeturing equipment for Northern Iron Corporation, a subsidiary of Versa Companies. . RECAMMENOA71oNS: Appmve (A) or Rejeci (R) PERSONAL SERYICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: _ PLANNMG COMMISSION _ CIVIL SERVICE CqMMIS510N �� Has this personlfirm ever worked under a coMract for this depaAmenY? _ CIB OpMMfTTEE A. Port Authorit VES NO __ STAFF B Cl. OP CORl. 2- Has this persoNfirm ever been a ciry employee? — YES NO ....._ DiS7RICi COUrtT _ 3. Does this personHirm possess a skill not normally possessed by any current ciry employee? SUPPORTS WHICH COUNCII O&IECTIYE? YES NQ Explain all yes answers on seperate sheet and ettach to green sheet INITIATING Pqpg�EM, ISSUE, OPPORTUNffY (Who. What, When, Where. Why): The issuance of a tax-exempt conduit bond issue will allow the acquisition and installation of an in-line molding and handling produetion line at Northern Iron Corporation's existing manufacturing location at 867 Forest Street, Saint Paul, Minnesota. ADVANTAGES IF ApPROVEO: It is anticipated that. up to 2� new jobs will be created during the initial two years of the operation of the financed equipment, with an annual additional payroll of approximately $551,852. DISADVANTAGES IF APPROVE�' None DISADVANTAGES IF NOTAPPROVED� The new jobs created by the addition of the financed equipment may not be ereated. TOTAL AMOUNT OF iRANSACTION $ 2 295 � OOO COS7/REVENUE BUDGE7ED (CIRCLE ONE) YES NO Port Authority Tax-Exempt FUNDING SOURCE Conduit Bond Issue ACiIVI7Y NUMBER FINANCIAL MFOqMATION� (EXPLAIN) : SAINT PAUL PORT AUTHORITY � .•� . � TO: �toM: CREDtT COMMtTTEE Gregory W. Drehmel Kenneth R. Johnson DATE: February 7,1997 SLTBJECf: NORTHERN IRON CORPORATION (a subsidiary of Versa Companies) Authorization for Approximate $2,295,000 Tax-Exempt Conduit Bond Issue • � . Approval of final resolution authorizing the issuance of an approximate $2,295,000 tax- exempt conduit bond issue to Northem Iron Corporation (a subsidiary of Versa Companies). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer. Borrower: Trustee: Letter af Credft Bank: Underwriters: Remarketing Agent: Company's Counsel: Underwriter's Counsel: Letter of Credit Bank Counsef: Bond Counsel: $2,295 Variable Rate Demand Industriai Deveiopment Revenue Bonds 15-Year Fully Amortizing Port Authority of the City of Saint Paul Northem fron Corporation First Trust National Association Firstar Bank Milwaukee, N.A. Piper Jaffray inc. Miller & Schroeder Financia{, Inc. Piper Jaffray Inc. Oppenheimer, Wolff 8� Donnelly Kennedy & Graven Rider Bennett Egan & Arundel Leonard, Street 8� Deinard, P.A. 9'7 /�,� � � � 4 Northem iron Corporation Credit Committee Memo February 7, 1997 Page 2 97 /�/� � - , • . The Borrower. Northem Iron Corporation (the �Borrower") is an iron foundry which produces precision iron castings that are sold primarily to the agriculture, heavy equipment and transportation industries. The castings are made of ductile and gray iron. The Borrower markefis and selis its products through an in-house sales force and through manufacturers' representatives, lts primary market is east of the Rocky Mountains of the United States. The Borrower and its predecessors have been in business at its current location for more than 75 years. The current organization of the Borrower was incorporated under the laws of the State of Minnesota in 1987. The Borrower is a wholly-owned subsidiary of Versa Companies, a Minnesota corporation, which acquired the Borrower in 1984. Versa also owns all of the outstanding common stock of the following Minnesota corporations: Northem Machine Corporation, Saint Paul, Minnesota; Versa Die Cast, Inc., New Hope, Minnesota; and Precision Electric Mfg. � Co., Plymouth, Minnesota (which does business under the name Versa Electronics). The Borrower and Northem Machine Corporation produce, market and sell their products under the trade name of Versa tron and Machine. The Bonds: The Bonds wiif be issued in the approximate principal amount ofi $2,295,000 and will bear interest at a variable rate established weekly by the Remarketing Agent. The maximum interest rate is 12%. Bondholders will have the rigfit to tender their Bonds for repurchase on seven days notice. Such Bonds will be purchased from remarketing p�oceeds, or if the Remarketing Agent is unable to remarket, from a draw on the Letter of Credit. The Proiect: The proceeds of the Bonds wiil be loaned to the Borrower, and used to acquire and install an in-fine molding and handling line at the Borrowers existing 150,000 sq.ft. manufacturing faci{ity located at 887 Forest Street, Saint Paul, Minnesota 55106. No substantial modfication to the building is contemplated. The availabiliry of tax- exempt financing wilt enable Versa Companies and its subsidiary, Northem Iron Corporation, to expand its present production facility and increase its revenue base by an estimated $3,000,000 annually when fully operational. As a result, new jobs will also be created to support the revenue and production increases. . Northem Iron Corporation Credit Committee Memo February 7, 1997 Page 3 Various pieces of equipment are used in the production of iron castings, one of which is an in-line molding and handling line. This equipment provides for the automation of the preparation of molds, up to 30 inches by 30 inches in size, into which molten iron is poured to produce an iron casting. The entire in-line molding and handling system is self-contained, as it provides for the preparation of the mold, transportation of the mold to the pouring area, and retum of the frames used for the molds to the beginning of the process for reuse. Em�loyment Imnact: - Versa Companies, through its subsidiary, Northem fron Corporation, is working with the Port Authority's customized training program. Success by 17 is a special project created under the umbrella of the customized training program that provides intemships to East Side youth in manufacturing companies. �a Success by 17, Northem Iron Corporation has agreed to provide one East Side youth an intemship at the pay rate of $7.00 per hour. The duties will include some finishing work, janftorial, and machine operations. During the intemship, the employer will identify specfic skills needed for success in the company and work with the Port to ensure that the youth also receives some technical training from an accredited institution such as the Saint Paul Technical College. Northem Iron Corporation is one of five East Side companies currently working with the Port on "Success by 17". Versa Companies believes it will create 20 new jobs as a result of the acquisition of this new manufiacturing equipment with an estimated annual payroll increase of over $550,000 per year when fully operational. For purposes of complying with the Minnesota's public assistance to business; wage and job requiremenYs law, Versa Companies and its subsidiaries have agreed to create on average 12 new jobs during the next two years wdh minimum wages ranging between $9.00 to $10.00 per hour. The Letter of Credit Bank: The fnitial Letter of Credit will be provided by Firstar Bank Milwaukee, N.A., the principal banking office of which is located in Milwaukee, Wisconsin. The bank is a national banking association organized under the laws of the United States of America and a subsidiary of Firstar Corporation, a registered bank holding company organized under the Bank Holding Company Act of 1956, as amended, and whose principal office is located in Milwaukee, Wisconsin. 9�� /�� • C �J i Northem Iron Corporation Credit Committee Memo February 7, 1997 Page 4 �� . - . - . . Sources of Funds: Bond Proceeds Estimated Borrower Funds Total Sou�ces of Funds Uses of Funds: Equipment Purchase Instaifation Costs Estimated Costs of Issuance Total Uses of Funds $2,295,000 55.000 $2,350,000 $1,882,426 367,574 100.000 $2,350 SECURITY FOR TfiE BONDS: ��ecial Limited Obligations• The Bonds wiil be special, limfted obiigations of the Authority and will not constitute or give rise to a pecuniary liability of the Authority, the City of Saint Paul or the State of Mi�nesota or a charge against their genera! credit or taxing powers. No bondholder wil4 have the right to demand payment of the principal of, purchase price of, or interest on, the Bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the Bonds pursuant to the Indenture, which includes the amounts drawn on the Letter of Credit and amounts payable by the BoROwer under the Loan Agreement Loan Agreement: Under the Indenture, the Authority has pledged its interest in the Loan Agreement (including the payments payable thereunder to the Authority by the Borrower, but excluding certain rights to payment of fees, expenses and indemnification) to the Trustee to secure the Bonds. Payments made under the Loan Agreement will be paid directly to the Trustee and will be sufficient, if paid promptly and in full, to pay al4 Qrincipal of and interest on the Bonds as the same becomes due, at maturity, upon purchase or redemption and prepayment, or othervvise. As long as the Letter of Credit is in effect, however, payments of principal of and interest on the Bonds required to be made under the Loan Agreement will be made directly to the Bank, to be applied to the Borrower's obligation to reimburse the Bank for amounts drawn under the Letter of Credi� The Trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the Borrower under the Loan 1�greement. � � Northem Iron Corporation Credft Committee Memo February 7, 1997 Page 5 Letter of Credit: Payment of the principal amount and purchase price of the Bonds, and up to approximately 52 days interest thereon (measured at the 12% maximum rate) wiil be secured initially by ihe initial Letter of Credit or, under certain circumstances a Substitute Letter of Credit. The Trustee is required to present a draft under the Letter of Credit to pay principal and interest when due on the Bonds. The Sonds are offered primarily on the basis of the financiat strength of the Bank and not on the basis of the financial strength of the Borrower. The Letter of Credit will have an initial term of three years, and will be automatically renewed in one-year increments thereafter, unless the Bank provides at least six months notice that it will not renew. If #he Letter of Credit is not renewed or replaced, the Bonds will be subject to mandatory redemption, and the Trustee is instructed to draw on the Letter of Credit, before it expires, to pay principal and interest then due. �COMMENDATION: Staff recommends approval of the issuance of the approximate $2,295,000 tax-exempt conduit bond issue on behalf of Northem Iron Corporation (a subsidiary of Versa Gompanies). GWD:ak a�� 97 /7� � � CJ 97 �� Resolution No. RESOLUTION OF 'I� � PORT AUTHORiTY OF THE CITY OF SAINT PAUL 1�.ii:1�1T�►F.�i It has been proposed that the Port Authority of the City of Saint Paui (the "Port Authority") issue its Variable Rate Demand Industrial Development Revenue Bonds (Northern Iron Corporation Project) Series 1997 (the "Boncis") in the approximate principal amount of $2,295,000, and tUat the pmceeds of such Bonds be loaned to Northern Iron Corporation, a Minnesota corporation (the "Borrower") to Snance the acquisition and installation of manufacturing equipment (the "Project") at a facility owned by the Borrower in the City of Saint Paul, Minnesota (the "City"). On December 17, 1996 the Port Authority adopted its Resolution No. 3608 indicating its preliminary approval of the Project on behalf of Versa Compazues, the pazent corQoration of the Borrower. The Bonds will be issued and secured by the terms of an Indenture of Tnut (the "Indenture") between the Port Authority and First Tnist National Association in Saint Paul, Minnesota (the "Trustee") and will be payable primarily from draws made on an irrevocable letter � of credit issued by Firstar Bank Milwaukee, N.A. (the "Credit Enhancer") pursuant to a Letter of Credit Reimbursement Agreement to be dated as of Mazch 1, 1997 between the Borrower, the Credit Enhancer and Signal Bank, Inc. (the "Letter of Credit Agreement"). The Boaower and the Port Authority will also entez into a Loan Agreement (the "Loan Agr�menP') in which the Borrower will agree to maintain the Letter of Credit and make all payments due either to the Credit Enhancer or on account of the Bonds. The Bonds and the interest on said Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shaii the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a charge against theu general credit or taxing powers and shall not constitute a chazge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than their interest in said Project. It is intended that interest on the Bonds be excluded from gross income of the holders thereof for federal income tax purposes. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the • 1993656 q�� public hearing, a public hearing has been held on the issuance of the Bonds, at wtuch public hearing all persons were given an opportunity to speak. • NOW, Tf�REFORE, BE IT RESOLVED BY Tf� BOARD OF COMMISSIONERS OF TF� PORT AUTHORITY OF THE CITY aF SAINT PAUL, AS FOLLOWS: The findings and conclusions previousiy made by the Port Authority in its Resolution No. 3608 are hereby reaffumed in their entirety. For the purpose of financing the Project, and paying certain costs of issuance and other expenses in coffiection with the iss�ance of the Bonds, the Port Authority hereby authorizes the issuance, sale and delivery of the Bonds in a principal amount ug to $2,295,000. The Bonds shall be in such principal amounts, shall bear interest at rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on &le with the Port Authority Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Bonds or interest thereon. Forms of the foilowing documents have been submitted to the Port Authority for review • and/or approval in connection with the sale, issuance and delivery of the Bonds: the Bond Purchase Agreement to be entered into between the Port Authority, the Borrower and Piper Ja�ay Inc. and Miller & Schroeder Financial, Inc. (collectively, the "Original Purchaser") (the "Bond Purchase AgreemenP'); the Indenture; the Loan Agreement dated March 1, 1997 to be entered into between the Port Authority and the Borrower; the Bonds; the Preliminary Official Statement to be used in mazketing the Bonds (the "Official StatemenP�; the Remarketing Agreement dated Mazch 1, 1997 to be entered into by and between Piper Jaf&ay Ina (the "Remazketing Agent"), the Borrower and the Trustee (the "Remazketing Agreement"); and C� 1493656 ��-i�� the Letter of Credit Agreement, including a form of the Letter of Credit (collectively, the "Doc�ents"). � It is hereby found, dete�ined and declazed that: The issuance and sale of the Bonds, the e�cecution and delivery by the Port Authority of the Documents and the perFormance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.152 through 469165, as amended (the "Act")• � It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a charge upon any funds other tban the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any properry of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the � Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they aze issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely &om the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority within the meaning of any constitutional or statutory limitation. The forms of the Documents and e�ibits thereto aze approved substantially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by pazagraph 8. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to execute the Documents (to the extent the Port Authority is a party thereto) in substantially the forms submitted, as modified pursuant to paragaph 8, and any other documents and certificates which in the opinion of Port Authority staff and Bond Counsel are necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution thereof the authorized officers of the Port Authority shail bind the � 1493656 9'7�� Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or oflices prior to the authentication and delivery of the Bonds. Copies of a!1 of the documenu � necessazy to the transaction described shall be delivered, filed and recorded as pmvided herein and in the Indentiue. The President and othet officers of the Port Authority are authorized and directed to prepaze and fiunisb to the Original Purchaser and Bond Counse2 certified copies of proceedings and records of the Port Authority relating to the issvance of the Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legality of ihe Bonds and the other transacrions herein contemplated as such facts appeaz from the books and records in the officers' custody and control or as otherwise known io ihem; and all such certified copies, certificates and affdavits, including any heretofore furaished, shall constitute representations of tfie Port Authority as to the truth of aii statements contained therein. The approvai hereby given to the various Documents refened to above inciudes approval of such additional details therein as may be necessazy and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer, and includes approval of, among other things: establislvnenf of the final principal amount of the Bonds and the interest nte to be borne thereby for the initial period, pravided that the maximum interest rate on the Bonds � shall not exceed 12.00% per annum; the establishment of the maturity schedule and catl provisions to be applicable to the Bonds; and such retated instruments as may be required to satisfy the conditions of any purchaser of the Bonds from the Original Purch�.cer. The Part Authority hereby consents to the distribution of the Official Statement, as such Official Statement is finalized with the participation of Port Authority staff and $ond Counsel. The proposal of the Originai Purchaser fo purchase the Bonds upon the tenns and conditions set forth in the Bond Purchase Ageement is hereby fovnd and determined to be reasonable and is hereby accepted. The authority to approve, execute and deliver future amendments to financing docwnents entered into by the Port Authority in connection with the issuance of the Bonds and the other transactions fierein contemplated, is hereby delegated to the President of the Port Anthority, provided that; (a) such amendments do not require the consent of the holders of tha Bonds; (b} such amendments do not materiaily adversely affect the interests of the Port Authority as the Port Authority of the Bonds; (c} such amendments do not contravene ot violate any poIicy of the Port Authority; and (d) such aznendments aze acceptable in form and substance to Bond Counsei. The � 1493fi56 � �� execution of any instrumettt by the President of Yhe Port Awhority shail be conclusive evidence of the approval of such instruments in accordaace with the terms hereof. � No covenant, stipulation, obligation or agreement contained herein or in the Documents shaI2 be deemed to be a coveaant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or emplayee of the Port Authority in that persons individual capacity, and neither the Board of Commissianers nor any officer executing the Bonds shail be Iiable personally on the Bonds or be subject to any personai iiability or accountability by reason of the issuance thereof. � . .. - . �. s_. ., .. PORT AUTHORITY OF TI� CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary � 149365fi 0 r - � Presented By Referred To RFSnI l ITl(�N WHEREAS: 1. The Port Authority of the City of Saint Paui (the "Authority") has given its approval (meeting to be held on February 25, �997) to the issuance of its 52,295,000 Variable Rate Demand Industrial Development Revenue Bonds, Series �997 (the "BOnds") to finance the costs to be incurred by Northern Iron Corporation in connection with the acquisition and installation of certain manufacturing equipment to be located at the Northern Iron Corporation facility in the City of Saint Paul, Minnesota (the "Project"); and 2. Laws of Minnesota 1976, Chapter 234, provides that any issue of revenue bonds authorized by the Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted in accordance with law; and 3. Approval of the issuance of the proposed Bonds by the City Council is also required by Section 147(fl of the Internal Revenue code of 1986, as amended; and 4. To meet the requirements of both state and federai law, the Port Authority has requested that the City Council gives it requisite approvai to the issuance of the proposed Bonds by the Port Authority, subject to final approval of the details of said Bonds by the Port Authority. Council File ��_ Green Sheet # �/ � ❑ t ! i ! T NOW, THEREFoRE, BE 1T RESOLVED by the Council of the City of Saint Paui that, in accordance with the requirements of Section 147(fl of the Internal Revenue Code of 1986, as amended, and in accordance with Laws of Minnesota 1976, Chapter 234, the City Council hereby approves the issuance of the aforesaid Bonds by the Port AuChority for tne purposes described in the Port Authority resolution adopted February 25, 1997, the exact detaiis of which, including but not iimited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional bonds are to be determined by the Port Authority, and the City Council hereby authorizes the issuance of any additional bonds (including refund►ng bonds) by the Port Authority found by the Port Authority to be necessary for carrying out the purposes for which the aforedescribed Bonds are issued. Adoption Cedified by Council Secretary �Y� a - Approved by Mayor: Date _`� 3� 7� By: — ` L� ,/�.�, Requested by Department o£ Approved by M�yor for 9u�ission to Council By: �-�� .�/ c�� AdoptedbyCouncil: Date �. �� Form Ap�proved by City Attorney gY��/ �-"� �� °-- lo�� j _ . . _ ____ __ . �� 97 /�� c�t�coun�� z�iZ�97 GREEN SHEE N° 36443 ' INfTIAVDATE INff1AVDATE ` CANTACT PERSpN & PHONE � DEPARTMENr DIflE � CRV COUNCIL Dave Thune 266-8620 ��N O CRYATfORNEY O CRYCLERK MUST BE ON COUNqL AGENDA BY i�MTE) NUYBEfi FOR O gUW ET OIqECTOq O flN. & MGL SERVICES DIR pOVfING ONOEB � MpVOF IOP ASSISTANf) O �� TOTAL # OF SIGtiATURE PAGES � (CUP ALL LOCATIONS FOR SIGNATUHE) - AC[l�ti REpIJE$TED: Approval of the issuance of $2,295,000 Variable Rate Demand Industrial Development Revenue Bonds to finance the costs to be incurred by Northern Iron Corporation. RECOMMENDA7iONS: Approva (A) a Rejeet (R) pERSONAL SEfiVICE CONTRACTS �IUST ANSWER TXE FOLLOWING �UESTIONS: _ PLANNING COMMISSION _ CIVIL SEHVICE COMMISSION �� Has this persoMirtn ever worketl under a contreCt for Mis tlepartment? - _ CIB COMMRTEE YES 'NO � _ S7AFF 2. Has ihis personRrm ever been a ciry employee? — YES NO _ DIS7AICf cqURi _ - 3. Ooes Mis personlFrm po5sess a skill 1wt no(malf y possessetl by any curtent city empbyee? � SUPPORiS WHICH COUNCII O&IECTIVE? YES NO Explain all yes answers on aeperate sheet antl attach t0 green sheet INRIATING PHOBLEM, ISSUE. OPPORTUNIN (Wlro, Whet, When, Where. Why): Port Authority has approved this action, on February 25, 1997. " ADVANTAGESIFAPPROVED: ' Bonds will be issued, , DISADVANTAGESIFAPPROVED: None. � DISADVANTAGESIFNOTAPPROVED: Bonds will be unable to be issued. � k �, �Ea � 3 �9y7 TOTAL AMOUNT OF TFiANSACTION $ � COST/HEVENUE BUDGE7ED (CIpCLE ONE) YES NO FUNDIfdG SOURCE ACTIVITV NUMBEH FINANCIAL INFOqMATION: (EXPLAIN) q� i�� tITY OF iHE CITY Of SAtNS PAUL � FAX (612) 223-5198 TOIL FREE (8�) 328-8417 ...,., ., ....,,.,ARK TOWERS • 345 ST. PEiER STREEf • ST. PAUL MN 55102-1661 • PHONE (612) 224-5686 February 12, 1997 Ms. Pam Wheelock, Director Planning & Economic Development Department 1300 City Hall Annex 25 West Fourth Street St. Paul, Minnesota 55102 RE: $2,295,000 TAX-EXEMPT CONDUIT BOND ISSUE NORTHERN lRON CORPORATION (A Subsidiary of Versa Companies) Dear Ms. Wheelock: We sutrmit for your review and refeRal to the office of the Mayor, City Council, and City Attomey's o�ce, details pertaining to the issuance of a tax-exempt conduit bond issue in ths amount of $2,295,000 backed by a Firstar Bank Milwaukee N.A. Letter of Credit to finance the acquisition and installation of an in-line molding and handling production line at Northern Iron Corporation's existing manufacturing Iocation at 867 Forest Street, Saint Paul, Minnesota. The Port Authority has received an industrial revenue bond allocation from the State of Minnesota Smail Issue Pool, as the project is manufacturing. The City of Saint Paui's entitlement allocation will not be affected by this application. The closing deadline, because of the allocation, is May 6, 1997. In addition to the staff memorandum, we are attaching a draft copy of the proposed Gity Council Resolution and a copy of the Resoiution conducting the required public hearing and authorizing the sale of the revenue bond issue in the amount of $2,295,000 that will be conside�ed by the Port Authority's Board on Febnsary 25, 1997. City Council action wi0 be required after the Port Authority's Board meeting of February 25, 1997, Your expeditious handling of this matter will be appreciated. Sincerely, �� ' KRJ:ak Attachment cc: Mayor Coleman s��aw�r�-aw aa Kenneth R. Johnson President � � a�-,��, , . . ... DEPAFTMENTfOFFIGFICAUNGII DATE INITIATED N -�� O O 3aint Paul Port Authority 2-11-97 GREEN SHE � CANTACipERSON&PHONE INITIAUDA INRIAVDATE � DEPARTMENT OIRECTOFL � CRY COUNGL Gregory W. Drehmel ��N �CT'ATTOFNEV �CITYCLERK MUST BE ON COUNCIL AGENDA BY (DATE) �� F � R � BODGET DIRECTOF � FIN. & MGT. SERVICES OIR. fl011TING Februarp 26 , 1997 oROea � MAYOR (OR ASSI5TANT) � ` -- - TOTAL # QF SIGNATURE PAGES (CLIP AlL LOCATIONS FOR SlGNATURE) ACTION qEpUESTED: APproval of the issuance of an approximate $2,295,000 tax-exempt conduit bond issue for the aequisition and installation of manufaeturing equipment for Northern Iron Corporation, a subsidiary of Versa Companies. . RECAMMENOA71oNS: Appmve (A) or Rejeci (R) PERSONAL SERYICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS: _ PLANNMG COMMISSION _ CIVIL SERVICE CqMMIS510N �� Has this personlfirm ever worked under a coMract for this depaAmenY? _ CIB OpMMfTTEE A. Port Authorit VES NO __ STAFF B Cl. OP CORl. 2- Has this persoNfirm ever been a ciry employee? — YES NO ....._ DiS7RICi COUrtT _ 3. Does this personHirm possess a skill not normally possessed by any current ciry employee? SUPPORTS WHICH COUNCII O&IECTIYE? YES NQ Explain all yes answers on seperate sheet and ettach to green sheet INITIATING Pqpg�EM, ISSUE, OPPORTUNffY (Who. What, When, Where. Why): The issuance of a tax-exempt conduit bond issue will allow the acquisition and installation of an in-line molding and handling produetion line at Northern Iron Corporation's existing manufacturing location at 867 Forest Street, Saint Paul, Minnesota. ADVANTAGES IF ApPROVEO: It is anticipated that. up to 2� new jobs will be created during the initial two years of the operation of the financed equipment, with an annual additional payroll of approximately $551,852. DISADVANTAGES IF APPROVE�' None DISADVANTAGES IF NOTAPPROVED� The new jobs created by the addition of the financed equipment may not be ereated. TOTAL AMOUNT OF iRANSACTION $ 2 295 � OOO COS7/REVENUE BUDGE7ED (CIRCLE ONE) YES NO Port Authority Tax-Exempt FUNDING SOURCE Conduit Bond Issue ACiIVI7Y NUMBER FINANCIAL MFOqMATION� (EXPLAIN) : SAINT PAUL PORT AUTHORITY � .•� . � TO: �toM: CREDtT COMMtTTEE Gregory W. Drehmel Kenneth R. Johnson DATE: February 7,1997 SLTBJECf: NORTHERN IRON CORPORATION (a subsidiary of Versa Companies) Authorization for Approximate $2,295,000 Tax-Exempt Conduit Bond Issue • � . Approval of final resolution authorizing the issuance of an approximate $2,295,000 tax- exempt conduit bond issue to Northem Iron Corporation (a subsidiary of Versa Companies). PROJECT SUMMARY: Estimated Amount: Type: Term: Issuer. Borrower: Trustee: Letter af Credft Bank: Underwriters: Remarketing Agent: Company's Counsel: Underwriter's Counsel: Letter of Credit Bank Counsef: Bond Counsel: $2,295 Variable Rate Demand Industriai Deveiopment Revenue Bonds 15-Year Fully Amortizing Port Authority of the City of Saint Paul Northem fron Corporation First Trust National Association Firstar Bank Milwaukee, N.A. Piper Jaffray inc. Miller & Schroeder Financia{, Inc. Piper Jaffray Inc. Oppenheimer, Wolff 8� Donnelly Kennedy & Graven Rider Bennett Egan & Arundel Leonard, Street 8� Deinard, P.A. 9'7 /�,� � � � 4 Northem iron Corporation Credit Committee Memo February 7, 1997 Page 2 97 /�/� � - , • . The Borrower. Northem Iron Corporation (the �Borrower") is an iron foundry which produces precision iron castings that are sold primarily to the agriculture, heavy equipment and transportation industries. The castings are made of ductile and gray iron. The Borrower markefis and selis its products through an in-house sales force and through manufacturers' representatives, lts primary market is east of the Rocky Mountains of the United States. The Borrower and its predecessors have been in business at its current location for more than 75 years. The current organization of the Borrower was incorporated under the laws of the State of Minnesota in 1987. The Borrower is a wholly-owned subsidiary of Versa Companies, a Minnesota corporation, which acquired the Borrower in 1984. Versa also owns all of the outstanding common stock of the following Minnesota corporations: Northem Machine Corporation, Saint Paul, Minnesota; Versa Die Cast, Inc., New Hope, Minnesota; and Precision Electric Mfg. � Co., Plymouth, Minnesota (which does business under the name Versa Electronics). The Borrower and Northem Machine Corporation produce, market and sell their products under the trade name of Versa tron and Machine. The Bonds: The Bonds wiif be issued in the approximate principal amount ofi $2,295,000 and will bear interest at a variable rate established weekly by the Remarketing Agent. The maximum interest rate is 12%. Bondholders will have the rigfit to tender their Bonds for repurchase on seven days notice. Such Bonds will be purchased from remarketing p�oceeds, or if the Remarketing Agent is unable to remarket, from a draw on the Letter of Credit. The Proiect: The proceeds of the Bonds wiil be loaned to the Borrower, and used to acquire and install an in-fine molding and handling line at the Borrowers existing 150,000 sq.ft. manufacturing faci{ity located at 887 Forest Street, Saint Paul, Minnesota 55106. No substantial modfication to the building is contemplated. The availabiliry of tax- exempt financing wilt enable Versa Companies and its subsidiary, Northem Iron Corporation, to expand its present production facility and increase its revenue base by an estimated $3,000,000 annually when fully operational. As a result, new jobs will also be created to support the revenue and production increases. . Northem Iron Corporation Credit Committee Memo February 7, 1997 Page 3 Various pieces of equipment are used in the production of iron castings, one of which is an in-line molding and handling line. This equipment provides for the automation of the preparation of molds, up to 30 inches by 30 inches in size, into which molten iron is poured to produce an iron casting. The entire in-line molding and handling system is self-contained, as it provides for the preparation of the mold, transportation of the mold to the pouring area, and retum of the frames used for the molds to the beginning of the process for reuse. Em�loyment Imnact: - Versa Companies, through its subsidiary, Northem fron Corporation, is working with the Port Authority's customized training program. Success by 17 is a special project created under the umbrella of the customized training program that provides intemships to East Side youth in manufacturing companies. �a Success by 17, Northem Iron Corporation has agreed to provide one East Side youth an intemship at the pay rate of $7.00 per hour. The duties will include some finishing work, janftorial, and machine operations. During the intemship, the employer will identify specfic skills needed for success in the company and work with the Port to ensure that the youth also receives some technical training from an accredited institution such as the Saint Paul Technical College. Northem Iron Corporation is one of five East Side companies currently working with the Port on "Success by 17". Versa Companies believes it will create 20 new jobs as a result of the acquisition of this new manufiacturing equipment with an estimated annual payroll increase of over $550,000 per year when fully operational. For purposes of complying with the Minnesota's public assistance to business; wage and job requiremenYs law, Versa Companies and its subsidiaries have agreed to create on average 12 new jobs during the next two years wdh minimum wages ranging between $9.00 to $10.00 per hour. The Letter of Credit Bank: The fnitial Letter of Credit will be provided by Firstar Bank Milwaukee, N.A., the principal banking office of which is located in Milwaukee, Wisconsin. The bank is a national banking association organized under the laws of the United States of America and a subsidiary of Firstar Corporation, a registered bank holding company organized under the Bank Holding Company Act of 1956, as amended, and whose principal office is located in Milwaukee, Wisconsin. 9�� /�� • C �J i Northem Iron Corporation Credit Committee Memo February 7, 1997 Page 4 �� . - . - . . Sources of Funds: Bond Proceeds Estimated Borrower Funds Total Sou�ces of Funds Uses of Funds: Equipment Purchase Instaifation Costs Estimated Costs of Issuance Total Uses of Funds $2,295,000 55.000 $2,350,000 $1,882,426 367,574 100.000 $2,350 SECURITY FOR TfiE BONDS: ��ecial Limited Obligations• The Bonds wiil be special, limfted obiigations of the Authority and will not constitute or give rise to a pecuniary liability of the Authority, the City of Saint Paul or the State of Mi�nesota or a charge against their genera! credit or taxing powers. No bondholder wil4 have the right to demand payment of the principal of, purchase price of, or interest on, the Bonds out of any funds to be raised from taxation or from any revenue sources other than those expressly pledged to payment of the Bonds pursuant to the Indenture, which includes the amounts drawn on the Letter of Credit and amounts payable by the BoROwer under the Loan Agreement Loan Agreement: Under the Indenture, the Authority has pledged its interest in the Loan Agreement (including the payments payable thereunder to the Authority by the Borrower, but excluding certain rights to payment of fees, expenses and indemnification) to the Trustee to secure the Bonds. Payments made under the Loan Agreement will be paid directly to the Trustee and will be sufficient, if paid promptly and in full, to pay al4 Qrincipal of and interest on the Bonds as the same becomes due, at maturity, upon purchase or redemption and prepayment, or othervvise. As long as the Letter of Credit is in effect, however, payments of principal of and interest on the Bonds required to be made under the Loan Agreement will be made directly to the Bank, to be applied to the Borrower's obligation to reimburse the Bank for amounts drawn under the Letter of Credi� The Trustee is authorized to exercise the rights of the Authority and to enforce the obligations of the Borrower under the Loan 1�greement. � � Northem Iron Corporation Credft Committee Memo February 7, 1997 Page 5 Letter of Credit: Payment of the principal amount and purchase price of the Bonds, and up to approximately 52 days interest thereon (measured at the 12% maximum rate) wiil be secured initially by ihe initial Letter of Credit or, under certain circumstances a Substitute Letter of Credit. The Trustee is required to present a draft under the Letter of Credit to pay principal and interest when due on the Bonds. The Sonds are offered primarily on the basis of the financiat strength of the Bank and not on the basis of the financial strength of the Borrower. The Letter of Credit will have an initial term of three years, and will be automatically renewed in one-year increments thereafter, unless the Bank provides at least six months notice that it will not renew. If #he Letter of Credit is not renewed or replaced, the Bonds will be subject to mandatory redemption, and the Trustee is instructed to draw on the Letter of Credit, before it expires, to pay principal and interest then due. �COMMENDATION: Staff recommends approval of the issuance of the approximate $2,295,000 tax-exempt conduit bond issue on behalf of Northem Iron Corporation (a subsidiary of Versa Gompanies). GWD:ak a�� 97 /7� � � CJ 97 �� Resolution No. RESOLUTION OF 'I� � PORT AUTHORiTY OF THE CITY OF SAINT PAUL 1�.ii:1�1T�►F.�i It has been proposed that the Port Authority of the City of Saint Paui (the "Port Authority") issue its Variable Rate Demand Industrial Development Revenue Bonds (Northern Iron Corporation Project) Series 1997 (the "Boncis") in the approximate principal amount of $2,295,000, and tUat the pmceeds of such Bonds be loaned to Northern Iron Corporation, a Minnesota corporation (the "Borrower") to Snance the acquisition and installation of manufacturing equipment (the "Project") at a facility owned by the Borrower in the City of Saint Paul, Minnesota (the "City"). On December 17, 1996 the Port Authority adopted its Resolution No. 3608 indicating its preliminary approval of the Project on behalf of Versa Compazues, the pazent corQoration of the Borrower. The Bonds will be issued and secured by the terms of an Indenture of Tnut (the "Indenture") between the Port Authority and First Tnist National Association in Saint Paul, Minnesota (the "Trustee") and will be payable primarily from draws made on an irrevocable letter � of credit issued by Firstar Bank Milwaukee, N.A. (the "Credit Enhancer") pursuant to a Letter of Credit Reimbursement Agreement to be dated as of Mazch 1, 1997 between the Borrower, the Credit Enhancer and Signal Bank, Inc. (the "Letter of Credit Agreement"). The Boaower and the Port Authority will also entez into a Loan Agreement (the "Loan Agr�menP') in which the Borrower will agree to maintain the Letter of Credit and make all payments due either to the Credit Enhancer or on account of the Bonds. The Bonds and the interest on said Bonds shall be payable solely from the revenue pledged therefor and the Bonds shall not constitute a debt of the Port Authority within the meaning of any constitutional or statutory limitation of indebtedness, nor shaii the Bonds constitute nor give rise to a pecuniary liability of the Port Authority or the City or a charge against theu general credit or taxing powers and shall not constitute a chazge, lien or encumbrance, legal or equitable, upon any property of the Port Authority or the City other than their interest in said Project. It is intended that interest on the Bonds be excluded from gross income of the holders thereof for federal income tax purposes. Pursuant to the requirements of Section 147(fl of the Intemal Revenue Code of 1986, as amended, and pursuant to a notice published by the Port Authority not less than 15 days prior to the • 1993656 q�� public hearing, a public hearing has been held on the issuance of the Bonds, at wtuch public hearing all persons were given an opportunity to speak. • NOW, Tf�REFORE, BE IT RESOLVED BY Tf� BOARD OF COMMISSIONERS OF TF� PORT AUTHORITY OF THE CITY aF SAINT PAUL, AS FOLLOWS: The findings and conclusions previousiy made by the Port Authority in its Resolution No. 3608 are hereby reaffumed in their entirety. For the purpose of financing the Project, and paying certain costs of issuance and other expenses in coffiection with the iss�ance of the Bonds, the Port Authority hereby authorizes the issuance, sale and delivery of the Bonds in a principal amount ug to $2,295,000. The Bonds shall be in such principal amounts, shall bear interest at rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the Indenture, substantially in the form now on &le with the Port Authority Neither the Bonds, nor the interest thereon, shall constitute an indebtedness of the Port Authority or the City within the meaning of any constitutional or statutory debt limitation; nor shall they constitute or give rise to a pecuniary liability of the City, the Port Authority or a chazge against their general taxing powers and neither the full faith and credit nor the general taxing powers of the City or the Port Authority is pledged to the payment of the Bonds or interest thereon. Forms of the foilowing documents have been submitted to the Port Authority for review • and/or approval in connection with the sale, issuance and delivery of the Bonds: the Bond Purchase Agreement to be entered into between the Port Authority, the Borrower and Piper Ja�ay Inc. and Miller & Schroeder Financial, Inc. (collectively, the "Original Purchaser") (the "Bond Purchase AgreemenP'); the Indenture; the Loan Agreement dated March 1, 1997 to be entered into between the Port Authority and the Borrower; the Bonds; the Preliminary Official Statement to be used in mazketing the Bonds (the "Official StatemenP�; the Remarketing Agreement dated Mazch 1, 1997 to be entered into by and between Piper Jaf&ay Ina (the "Remazketing Agent"), the Borrower and the Trustee (the "Remazketing Agreement"); and C� 1493656 ��-i�� the Letter of Credit Agreement, including a form of the Letter of Credit (collectively, the "Doc�ents"). � It is hereby found, dete�ined and declazed that: The issuance and sale of the Bonds, the e�cecution and delivery by the Port Authority of the Documents and the perFormance of all covenants and agreements of the Port Authority contained in the Documents, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Documents and the Bonds valid and binding obligations of the Port Authority in accordance with their terms, aze authorized by Minnesota Statutes, Sections 469.152 through 469165, as amended (the "Act")• � It is desirable that the Bonds be issued by the Port Authority upon the general terms set forth in the Documents, as applicable; Under the provisions of and as provided in the Documents, the Bonds are not to be payable from or a charge upon any funds other tban the revenues pledged to the payment thereof; no holder of the Bonds shall ever have the right to compel any exercise by the City or the Port Authority of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any properry of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the � Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City or the Port Authority except the interests of the Port Authority and the City which have been pledged to the Trustee under the Indenture; the Bonds shall each recite that they aze issued without moral obligation on the part of the State or its political subdivisions, and that the Bonds, including interest thereon, are payable solely &om the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City or the Port Authority within the meaning of any constitutional or statutory limitation. The forms of the Documents and e�ibits thereto aze approved substantially in the forms submitted and on file in the offices of Port Authority, with such subsequent changes as may be approved by Port Authority staff and Bond Counsel as contemplated by pazagraph 8. The Chair and Secretary of the Port Authority, or such other officer as may be appropriate in the absence of either the Chair or Secretary, are hereby authorized and directed to execute the Documents (to the extent the Port Authority is a party thereto) in substantially the forms submitted, as modified pursuant to paragaph 8, and any other documents and certificates which in the opinion of Port Authority staff and Bond Counsel are necessary to the transaction herein described The execution of any instrument by the appropriate officer or officers of the Port Authority herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. The execution of any documents necessary for the transaction herein described by individuals who were at the time of execution thereof the authorized officers of the Port Authority shail bind the � 1493656 9'7�� Port Authority, notwithstanding that such individuals or any of them has ceased to hold such office or oflices prior to the authentication and delivery of the Bonds. Copies of a!1 of the documenu � necessazy to the transaction described shall be delivered, filed and recorded as pmvided herein and in the Indentiue. The President and othet officers of the Port Authority are authorized and directed to prepaze and fiunisb to the Original Purchaser and Bond Counse2 certified copies of proceedings and records of the Port Authority relating to the issvance of the Bonds and other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legality of ihe Bonds and the other transacrions herein contemplated as such facts appeaz from the books and records in the officers' custody and control or as otherwise known io ihem; and all such certified copies, certificates and affdavits, including any heretofore furaished, shall constitute representations of tfie Port Authority as to the truth of aii statements contained therein. The approvai hereby given to the various Documents refened to above inciudes approval of such additional details therein as may be necessazy and appropriate, and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Port Authority's President and Chief Financial Officer, and includes approval of, among other things: establislvnenf of the final principal amount of the Bonds and the interest nte to be borne thereby for the initial period, pravided that the maximum interest rate on the Bonds � shall not exceed 12.00% per annum; the establishment of the maturity schedule and catl provisions to be applicable to the Bonds; and such retated instruments as may be required to satisfy the conditions of any purchaser of the Bonds from the Original Purch�.cer. The Part Authority hereby consents to the distribution of the Official Statement, as such Official Statement is finalized with the participation of Port Authority staff and $ond Counsel. The proposal of the Originai Purchaser fo purchase the Bonds upon the tenns and conditions set forth in the Bond Purchase Ageement is hereby fovnd and determined to be reasonable and is hereby accepted. The authority to approve, execute and deliver future amendments to financing docwnents entered into by the Port Authority in connection with the issuance of the Bonds and the other transactions fierein contemplated, is hereby delegated to the President of the Port Anthority, provided that; (a) such amendments do not require the consent of the holders of tha Bonds; (b} such amendments do not materiaily adversely affect the interests of the Port Authority as the Port Authority of the Bonds; (c} such amendments do not contravene ot violate any poIicy of the Port Authority; and (d) such aznendments aze acceptable in form and substance to Bond Counsei. The � 1493fi56 � �� execution of any instrumettt by the President of Yhe Port Awhority shail be conclusive evidence of the approval of such instruments in accordaace with the terms hereof. � No covenant, stipulation, obligation or agreement contained herein or in the Documents shaI2 be deemed to be a coveaant, stipulation, obligation or agreement of any member of the Boazd of Commissioners of the Port Authority, or any officer, agent or emplayee of the Port Authority in that persons individual capacity, and neither the Board of Commissianers nor any officer executing the Bonds shail be Iiable personally on the Bonds or be subject to any personai iiability or accountability by reason of the issuance thereof. � . .. - . �. s_. ., .. PORT AUTHORITY OF TI� CITY OF SAINT PAUL By Its Chair ATTEST: By Its Secretary � 149365fi