HomeMy WebLinkAbout03-219 • Member Luick introduced the following resolution and moved its adoption, which motion was
seconded by Member Rieb:
RESOLUTION NO. 03-219
AUTHORIZING EXECUTION AND DELIVERY OF AN
AMENDMENT TO ESCROW AGREEMENT RELATING TO
GENERAL OBLIGATION PARK REFUNDING BONDS,
SERIES 2003B
BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the City), as
follows:
Section 1. By a resolution duly adopted on March 3, 2003, the City Council authorized
the issuance and sale of $3,225,000 General Obligation Park Refunding Bonds, Series 2003B,
dated as of March 15, 2003 (the Series 2003B Bonds) and authorized the City to enter into an
Escrow Agreement, dated as of March 26, 2003, with U.S. Bank National Association (the
Escrow Agent) establishing an escrow account for the investment of a portion of the proceeds of
the Series 2003B Bonds (the Escrow Account).
Section 2. Based upon information provided the Council by Springsted Incorporated, it
has been determined the City may realize savings by selling the securities in the Escrow Account
• and purchasing replacement securities at a lower cost. The Council believes it to be in the best
interests of the City to direct the Escrow Agent to sell the securities and purchase replacement
securities, and to amend the Escrow Agreement to allow the securities to be sold and the
replacement securities to be purchased.
Section 3. Dorsey & Whitney LLP, Bond Counsel, has prepared a form of Amendment
to Escrow Agreement, which is attached hereto and approved hereby. The execution by the
Mayor and City Clerk of the Amendment to Escrow Agreement, with such changes as are
deemed necessary and approved by the Mayor and City Clerk, is hereby approved and authorized
and such execution shall be conclusive evidence of such approval and shall be binding upon the
City. The provisions of the Escrow Agreement as so executed, including all Exhibits and
Appendices thereto, are incorporated herein by reference.
Section 4. The Mayor and City Clerk, at such time as Springsted Incorporated indicates
that the sale and purchase of the Escrow Account securities is economically advantageous, are
authorized and directed to give written. direction to the Escrow Agent for the sale and purchase of
securities.
Section 5. The City Clerk is authorized and directed to prepare and furnish certified
copies, as requested, of any other proceedings and records of the City relating to the
authorization of the Amendment to Escrow Agreement. All such certified copies,. certificates
and affidavits, including any heretofore furnished, shall be deemed representations of the City as
to the correctness of all statements contained therein.
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Upon vote being taken thereon, the following voted in favor thereof:
and the following voted against the same:
APPROVED AND ADOPTED this 17th day of November, 2003.
CITY OF LAKEVILLE, MINNESOTA
By:
Mayor
ATTEST:
City Clerk
i
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YIELD RECAPTURE TRANSACTION FOR LAKEVILLE, MINNESOTA
$3,225,000 GENERAL OBLIGATION PARK REFUNDING BONDS, SERIES 20038
MEMORANDUM OF UNDERSTANDING
This memorandum of understanding (the "MOU") between the City of Lakeville, Minnesota (the "City") and
Springsted, Incorporated ("Springsted") outlines the understanding between the City and Springsted
related to the restructuring of the $3,225,000 General Obligation Park Refunding Bonds, Series 20036
Escrow Account.
The City agrees to the concept of restructuring the Escrow Fund as set forth in the document titled "Bond
Defeasance Escrows and Escrow Restructuring Process" attached hereto.
Springsted will monitor the existing Escrow Fund held by the Escrow Agent, U.S. Bank. When market
conditions allow a restructuring as described in the attachment, Springsted will solicit and receive at least
three bids, on the City's behalf, to sell the. U.S. Treasury notes currently held in the Escrow Fund and
transmit the proceeds to the City's Escrow Agent for deposit into the Escrow Fund. Simultaneously,
Springsted will arrange for the subscription, on the City's behalf, of SLGS to fully fund the escrow
requirements. Cash remaining in the Escrow Fund after the cost of purchasing a replacement portfolio of
SLGS and paying fees as approximated below, and any initial required cash deposit, will be released to
the City for use as it sees fit. It is estimated that the benefit to the City, after fees are paid, will be about
$50,000; this figure is dependent on the size of intraday pricing changes in the U.S. Treasury market, and
on the length of time between the restructuring date and the escrow termination date.. The City
recognizes that as time passes, the potential to extract proceeds from the escrow diminishes.
Authority is hereby delegated to Springsted to monitor the Escrow Fund and to act as described above in
concert with the City, Bond Counsel, Escrow Agent and the Verification Agent. The following is a list of
the participants in the transaction and approximate fees:
Partici ants
Financial Advisor - S rin sted Incor orated $5,000
Bond Counsel - Dorse and Whitne ~ $3,000.
Verification A ent - rant Thornton $2,000
Escrow A ent - U.S. Bank $250
Total $10,250.
The Escrow Fund shall be restructured only. if a minimum of $ net of costs is .released from the
Escrow Fund and distributed to the City, unless specifically agreed to by the City.
This Memorandum of Understanding is entered into between the City and Springsted this day of
2003.
City of L ke ' I Minneso
BY:
ITS: Mayor ity Clerk
~pringst d, Incor ra d
C
Y' /
i ITS: T _l C ~