title
Authorizing the issuance and negotiated sales of Tax-Exempt Sales Tax Revenue and Refunding Bonds and approving certain documents in connection with the issuance of such sales tax revenue obligations.
body
WHEREAS, the City of Saint Paul, a home rule city, municipal corporation, and political subdivision of the State of Minnesota (the “City”) is authorized to impose an additional sales tax of up to one-half of one percent (0.5%) on sales transactions in the City taxable under Minnesota Statutes, Chapter 297A, as amended, and a use tax at the same rate for the use, storage, distribution, or consumption in the City of personal property purchased without payment of the City sales tax (the City sales tax and use tax are hereinafter referred to as the "0.5% Sales Tax"); and
WHEREAS, the 0.5% Sales Tax is authorized by Laws of Minnesota 1993, Chapter 375, Article 9, Section 46, as amended by: (i) Laws of Minnesota 1997, Chapter 231, Article 7, Section 40; (ii) Laws of Minnesota 1998, Chapter 389, Article 8, Sections 30-32 and 36-37; (iii) Laws of Minnesota 2002, Chapter 377, Article 3, Section 21; (iv) Laws of Minnesota 2003, First Special Session, Chapter 21, Article 8, Section 13; (v) Laws of Minnesota 2005, First Special Session, Chapter 3, Article 5, Sections 26 and 27; (vi) Laws of Minnesota 2009, Chapter 88, Article 4, Sections 15, 16, and 18; (vii) Laws of Minnesota 2013, Chapter 143, Article 8, Sections 44 and 45; and (viii) Laws of Minnesota 2023, Chapter 64, Article 10, Sections 2-5 (collectively, the "Sales Tax Act"); and
WHEREAS, the 2023 amendments to the Sales Tax Act authorized the City to hold an election whereby the voters in the City could approve the institution of a separate and distinct One Cent Sales and Use Tax (the “1% Sales Tax”) dedicated solely to fund parks and recreation projects and road improvements in the City and pay related costs of borrowing; and
WHEREAS, the 1% Sales Tax was approved by a majority of the voters voting at an election held on November 7, 2023 in the City, and collection of the 1% Sales Tax began in April 2024; and
WHEREAS, the 1% Sales Tax is separate and distinct from the 0.5% Sales Tax and is not pledged or available for the payment of the Series 2019A Bonds, the Series 2019C Bonds, or the Series 2024C Bonds (each defined below); and
WHEREAS, in accordance with the provisions of the Sales Tax Act, the City Council of the City: (i) adopted resolutions approving such special laws comprising the Sales Tax Act that required local approval under Minnesota Statutes, Section 645.021; (ii) adopted resolutions declaring its intent to exercise the taxing authority under the Sales Tax Act and approving imposition of the 0.5% Sales Tax and the 1% Sales Tax; and (iii) timely filed a certificate as to each approval of a special law comprising the Sales Tax Act, together with the resolution approving such special law, with the Minnesota Secretary of State; and
WHEREAS, under the terms of Subdivision 2 of the Sales Tax Act, the City is authorized to use the net revenues derived from imposition of the 0.5% Sales Tax to pay for economic and neighborhood projects in addition to the construction and equipping of an arena on the Civic Center site; and
WHEREAS, the economic and neighborhood projects for 2024 are being accomplished by the City in order to further residential, cultural, commercial, and economic development in both downtown Saint Paul and the Saint Paul neighborhoods which include the following projects: (i) financing the design, acquisition, construction, improvement and equipping of a new North End Community Center and Fire House Station #7, (ii) financing the acquisition of an electric fire truck, and (iii) financing capital improvements to Pedro Park in downtown Saint Paul (collectively, the “Series 2024C Projects”); and
WHEREAS, under the terms of Subdivision 3 of the Sales Tax Act, the City is authorized to issue special revenue bonds in one or more series in the manner provided in Minnesota Statutes, Chapter 475, as amended (the "Municipal Debt Act"), to finance all or a portion of the cost for projects authorized in Subdivision 2 of the Sales Tax Act and such special revenue bonds may be paid from or secured by any funds available to the City, including the revenues derived from imposition of the 0.5% Sales Tax, any revenues derived from the projects, and tax increments from the tax increment districts that include the projects; and
WHEREAS, the City is proposing to issue its sales tax revenue and refunding bonds in one or more series (“the Series 2024C Bonds”) in an amount necessary to, along with other available funds to (a) fund the 2024C Projects; (ii) refund the City’s outstanding Tax-Exempt Sales Tax Revenue Bonds, Series 2014G (the "Series 2014G Bonds"), in the original aggregate principal amount of $28,195,000 and currently outstanding in the aggregate principal amount of $27,110,000, maturing November 1, 2026 through November 1, 2033; (iii) fund a deposit to the Series 2024C Account of the Reserve Fund; and (iv) pay costs of issuance of the Series 2024C Bonds; and
WHEREAS, the Series 2024C Bonds will be issued in accordance with the provisions of an Amended and Restated Indenture of Trust, dated as of April 1, 2019 (the “Restated Indenture”), between the City and Computershare Trust Company, N.A., as successor trustee to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by a First Supplemental Indenture of Trust, dated on or after August 1, 2024 (the “Supplemental Indenture” and, together with the Restated Indenture, the “Indenture”), the Charter of the City, the Sales Tax Act, and Minnesota Statutes, Chapter 475, as amended; and
WHEREAS, the Series 2024C Bonds will be secured on a parity basis (with respect to 0.5% Sales Tax proceeds) with the debt service on the City’s outstanding (i) Taxable Sales Tax Revenue Refunding Bonds (RiverCentre Arena Project), Series 2019A (the “Series 2019A Bonds”), originally issued in the original principal amount of $48,900,000 and currently outstanding in the principal amount of $39,705,000; and (ii) Tax-Exempt Sales Tax Revenue Refunding Bonds, Series 2019C (the “Series 2019C Bonds” and, together with the Series 2019A Bonds, the “Series 2019 Bonds”), originally issued in the original principal amount of $12,475,000 and currently outstanding in the principal amount of $9,780,000; and
WHEREAS, the Series 2024C Bonds will not constitute general or moral obligations of the City and will not be secured by a pledge of the full faith and credit or taxing powers of the City, but will be secured by and payable solely from the revenues pledged to the Series 2024C Bonds under the terms of the Indenture; and
WHEREAS, by RES 22-1268, adopted on August 17, 2022 and RES PH 23-372 adopted on April 5, 2023 (together, the "Preliminary Resolutions"), this Council took the following actions with respect to the Series 2024C Bonds: (i) authorized and directed the Director, Office of Financial Services, the City Treasurer, and other appropriate officials and staff of the City to proceed with any and all actions as are deemed to be necessary or appropriate to provide for the issuance, sale, and delivery of the Series 2024C Bonds; (ii) designated Baker Tilly Municipal Advisors, LLC ("Baker Tilly") as municipal advisor to the City with respect to the Series 2024C Bonds; designated Piper Sandler & Co. as the underwriter (the "Underwriter") with respect to the Series 2024C Bonds; and designated Ballard Spahr LLP as bond counsel to the City ("Bond Counsel") with respect to the Series 2024C Bonds; and
WHEREAS, the Office of Financial Services of the City has presented a proposal to delegate to a pricing committee (the "Pricing Committee") the negotiations with the Underwriter with respect to the public offer, pricing, and sale of the Series 2024C Bonds; and
WHEREAS, the Pricing Committee is proposed to consist of the Director, Office of Financial Services or the Director's designee, the City Treasurer or the City Treasurer's designee, and a representative of Baker Tilly;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows:
Section 1. Sale and Issuance of Series 2024C Bonds.
1.01. Issuance of Series 2024C Bonds. There are hereby authorized to be issued, sold, and delivered the Series 2024C Bonds to be designated as Tax-Exempt Sales Tax Revenue and Refunding Bonds (Neighborhood and Economic Development Projects), Series 2024C (the "Series 2024C Bonds") are authorized to be issued in an aggregate principal amount not to exceed $65,000,000 to the City to: (i) fund the Series 2024C Projects; (ii) refund the City’s outstanding Series 2014G Bonds, maturing November 1, 2026 through November 1, 2033; (iii) fund a deposit to the Series 2024C Account of the Reserve Fund; and (iv) pay costs of issuance of the Series 2024C Bond (including the compensation of the Underwriter). The Series 2024C Bonds shall be issued as special, limited obligations of the City and shall be payable solely from the revenues and funds pledged therefor under the terms of the Indenture. The Series 2024C Bonds shall be issued as fixed-rate obligations. The Series 2024C Bonds shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the Indenture (substantially in the form now on file with the City). The Series 2024C Bonds are hereby authorized to be issued as "tax-exempt bonds" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. The Series 2024C Bonds are hereby authorized to be issued in accordance with the provisions of the Sales Tax Act and the Municipal Debt Act and under the terms of this resolution (the "Resolution") and the Indenture.
1.02. Sale of Series 2024C Bonds. It is hereby found and determined to be in the best interests of the City to issue and sell the Series 2024C Bonds to the Underwriter subject to the approval of the Pricing Committee and compliance with the parameters set forth below. The Pricing Committee may approve the sale of the Series 2024C Bonds to the Underwriter on terms and at a purchase price within the following limitations: (i) the total original aggregate principal amount of the Series 2024C Bonds shall not exceed $65,000,000; (ii) the maximum true interest cost of the Series 2024C Bonds shall not exceed 4.75% percent; and (iii) no maturity of the Series 2024C Bonds shall mature later than November 1, 2042.
1.03. Revenue Obligations - The Series 2024C Bonds do not constitute general or moral obligations of the City. Neither the Series 2024C Bonds, nor the interest thereon, shall constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation; nor shall the Series 2024C Bonds constitute or give rise to a pecuniary liability of the City, except from the revenues and funds expressly pledged to payment of the debt service on the Series 2024C Bonds under the terms of this Resolution and the Indenture. The Series 2024C Bonds shall not constitute a charge against any taxing powers of the City (except the power to impose the 0.5% Sales Tax and apply the Sales Tax Proceeds to the payment of the debt service on the Series 2024C Bonds to the payment of the debt service on the Series 2024C Bonds) and the full faith and credit of the City are not pledged to the payment of the Series 2024C Bonds or the interest thereon.
1.04. Form of Series 2024C Bonds; Execution and Delivery. All of the provisions of the Series 2024C Bonds, when executed as authorized herein, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Series 2024C Bonds shall be substantially in the form or forms set forth in the Indenture and, specifically, in the forms now on file with the City, which forms are hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the names of each series of the Series 2024C Bonds, the aggregate principal amount of each series of the Series 2024C Bonds, the stated maturities of each series of the Series 2024C Bonds and the maturity dates of each series of the Series 2024C Bonds, and the terms of optional and mandatory redemption of each series of the Series 2024C Bonds) as the Director, Office of Financial Services, in the Director's discretion, shall determine. The execution of the Series 2024C Bonds with the manual or facsimile signatures of the Mayor or the Mayor's designee, the City Clerk or the City Clerk's designee, and the Director, Office of Financial Services, or the Director's designee (collectively, the "City Officials"), and the delivery of the Series 2024C Bonds by the City shall be conclusive evidence of such determination.
Section 2. Principal Documents.
2.01. Indenture. The City Officials are hereby authorized to execute and deliver the Indenture. All of the provisions of the Indenture, when executed as authorized herein, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Indenture shall be substantially in the form on file with the City, which is hereby approved, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Director, Office of Financial Services, in the Director's discretion, shall determine, and the execution and delivery thereof by the City Officials shall be conclusive evidence of such determination.
2.02. Pricing Committee Certificate. On the pricing date on which the Series 2024C Bonds are offered for sale to the public and the terms of the Series 2024C Bonds are proposed to be definitively established, the Pricing Committee is hereby authorized to complete and execute a Pricing Committee Certificate, dated as of the pricing date, establishing the basic terms of the Series 2024C Bonds within the parameters established by this Resolution.
2.03. Bond Purchase Agreement. The City Officials are hereby authorized and directed to execute and deliver a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase Agreement") in connection with the sale of the Series 2024C Bonds to the Underwriter, if such execution and delivery is deemed necessary and appropriate by the Director, Office of Financial Services, the City Attorney, and Bond Counsel.
All of the provisions of the Bond Purchase Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Bond Purchase Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Director, Office of Financial Services, in the Director's discretion, shall determine, and the execution thereof by the City Officials shall be conclusive evidence of such determination.
2.04. City Documents. The City Officials are hereby authorized and directed to execute and deliver any documents by the City, if necessary or appropriate, to the Trustee to memorialize a pledge of the Tax Increments to the Series 2024CBonds and to provide for the collection, pledge, and application of such Tax Increments to the Series 2024C Bonds.
The City may execute documents, certificates, and instruments relating to the issuance of the Series 2024A Bonds by electronic signature. For purposes hereof: (i) “electronic signature” means a manually signed original signature that is then transmitted by electronic means; and (ii) “transmitted by electronic means” means sent in the form of a facsimile or sent via the internet as a portable document format (“pdf”) or other replicating image attached to an electronic mail or internet message; or (iii) a digital signature of an authorized representative of any party provided by AdobeSign or DocuSign (or such other digital signature provider as specified by such party).
2.05 Execution and Delivery of Documents. It is hereby found, determined, and declared that: (i) the issuance and sale of the Series 2024C Bonds, the execution and delivery by the City of the Indenture, and the Bond Purchase Agreement (collectively, the "Documents"), and the performance of all covenants and agreements of the City 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 Series 2024C Bonds valid and binding obligations of the City in accordance with their terms, are authorized by the Sales Tax Act and the Municipal Debt Act; and (ii) it is desirable that the Series 2024C Bonds be issued by the City and that the Documents be prepared and executed to facilitate that issuance of the Series 2024C Bonds in accordance with the provisions of this Resolution. The Trustee is hereby authorized and directed to execute and deliver the Documents to which it is a party and the Trustee is hereby authorized to take all actions permitted or required of the Trustee by the terms of the Documents.
2.06 Closing Documents. The City Officials are authorized and directed to prepare and furnish to the Underwriter and Bond Counsel certified copies of proceedings and records of the City relating to the issuance of the Series 2024C Bonds and the other transactions herein contemplated, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Series 2024C Bonds and the other transactions herein contemplated as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein.
2.07. Additional Documents. The approval hereby given includes authorization for the City Officials to negotiate and finalize the Documents and includes approval of, among other things, such related instruments, contracts, and other documents as may be required to satisfy the conditions of the Underwriter, the parties to the Documents, and the City Attorney and Bond Counsel.
2.08. Partial Prepayment and Redemption of Series 209C Bonds. City finance staff has identified certain eligible funds that may be used to optionally redeem and prepay a portion of the outstanding Series 2019C Bonds. The Series 2019C Bonds have a first optional redemption date of November 1, 2024 at a price of par plus accrued interest to the date of redemption, without a premium. City finance staff is authorized to take the necessary action to optionally redeem and prepay the amount of Series 2019C Bonds deemed appropriate on November 1, 2024 or such later date as determined by City finance staff advantageous to the City.
Section 3. Disclosure Documents. The City Officials, with the assistance of the Office of Financial Services, Baker Tilly, the Underwriter, the City Attorney, and Bond Counsel, are hereby authorized to prepare or provide for the preparation of an Official Statement (including a Preliminary Official Statement), or another form of disclosure document or documents (collectively, the "Disclosure Documents") to be distributed in connection with the offer and sale of the Series 2024C Bonds. The preparation and distribution of any Disclosure Document prior to the date hereof are hereby ratified and approved. The Disclosure Documents are hereby authorized to be distributed with such modifications thereto, deletions therefrom, and additions thereto as may be necessary and appropriate and approved by the Director, Office of Financial Services, the City Attorney, and Bond Counsel. If requested by the Underwriter, and if deemed appropriate by the Director, Office of Financial Services, the City Officials are hereby authorized to execute any Disclosure Document.
The City Officials are authorized and directed to certify that they have examined the Disclosure Documents and that, to the knowledge and belief of such City Officials, the Disclosure Documents constitute a complete and accurate representation of all material facts with respect to the Series 2024C Bonds and that the Disclosure Documents do not, at the date of closing, and did not, as of their respective dates, contain any untrue state of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
In order to permit the Underwriter to satisfy the requirements of Rule 15c2-12(b)(5) promulgated by the Securities Exchange Commission under the Securities Exchange Act of 1934, as amended, the City Officials are hereby authorized and directed to execute and deliver a continuing disclosure undertaking substantially in the form of the Continuing Disclosure Certificate set forth in an appendix to the Disclosure Documents (the "Continuing Disclosure Certificate"). The Continuing Disclosure Certificate is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Director, Office of Financial Services, in the Director's discretion, shall determine, and the execution thereof by the City Officials shall be conclusive evidence of such determination. The Director, Office of Financial Services (and any successor Director, Office of Financial Services) is authorized to select one or more dissemination agents to assist the City in satisfying its obligations under the Continuing Disclosure Certificate and, in the discretion of the Director, Office of Financial Services, or of any successor Director, Office of Financial Services, to replace any dissemination agent with a substituted dissemination agent.