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IP #845 Loan AgreementMINNESOTA PUBLIC FACILITIES AUTHORITY BOND PURCHASE AND PROJECT LOAN AGREEMENT DRINKING WATER REVOLVING FUND MPFA -09- 0050- R -FY10 THIS BOND PURCHASE AND PROJECT LOAN AGREEMENT (the "Agreement "), is made February 16, 2010 between the Minnesota Public Facilities Authority (the "Authority ") and the City of New Hope (the "Borrower "). Any amendments to this Agreement shall be in writing and shall be executed by the Borrower by the same officials who signed the Agreement, or their successors. ARTICLE I - LOAN TERMS AND CONDITIONS Section 1.1. Terms. The Authority hereby commits, subject to the conditions hereinafter set forth, to lend FOUR HUNDRED EIGHTEEN THOUSAND SIX HUNDRED FORTY FOUR DOLLARS ($418,644) from the Drinking Water Revolving Fund (the "Loan ") to the Borrower for the purpose of funding eligible project costs of the drinking water project described as follows: replacing water main along Winnetka Avenue (the "Project ") as identified in the loan application. The final maturity date of the Loan shall be August 20, 2029, at an interest rate or rates as set forth in Section 1.4 below and Exhibit A. Repayment of the Loan by the Borrower to the Authority shall be at such times, and in such amounts as set forth in Exhibit A. The Authority's commitment to lend is subject to the availability of funds. Section 1.2. Disbursements (a) The Loan will be disbursed on a cost reimbursement basis, consistent with the budget presented in the Borrower's loan application, incorporated by reference, but not in violation of any provisions of applicable federal and state regulations. All Borrower disbursement requests shall be reviewed by the Authority and subject to the approval of the Authority in accordance with Minnesota Rules 7380.0250 to 7380.0297, as amended or supplemented from time to time. The Authority may withhold or disallow all or part of the amount requested pursuant to Minnesota Rules 7380.0295, Subpart 3, if the Authority determines the Borrower's disbursement request is not in compliance with program statutes, rules, or terms and conditions of this Agreement. (b) Disbursements shall be made by the Authority to the Borrower within 30 days of a request therefor made by the Borrower in the form, and at the times, determined by the Authority, unless the Authority determines to withhold disbursement in accordance with the provisions of this Agreement. (c) The Authority will reimburse the Borrower for costs incurred prior to the execution of this Agreement only to the extent approved in connection with the approval of the loan application. The Authority reserves the right to reimburse the Borrower for costs incurred prior to the execution of this Agreement by making loan disbursements over a two -year period in eight equal quarterly payments. No funds shall be disbursed by the Authority to the Borrower until such time as the Borrower delivers its general obligation note to the Authority for the full amount of the Loan as set forth in Section 1.3 below. (d) If, as a result of action by the Borrower or the Authority, the entire principal amount specified in Section 1.1 above is not to be disbursed for Project cost reimbursement, or if the entire principal amount is not fully disbursed within three years from the date of this Agreement, unless an extension is requested in writing by the Borrower and granted by the Authority, the balance of the amount not disbursed shall be applied to the principal repayments on the Loan and payments set forth in Exhibit A will be re- amortized by the Authority. dwrf - con -db Page 1 of 9 City of New Hope (rev. 12/09) February 16, 2010 Section 1.3. Security. (a) The Borrower shall issue to the Authority its General Obligation Revenue Note (the "Note "), evidencing its obligation to repay the Loan. It is a condition of any disbursements hereunder that the Borrower shall deliver to the Authority an executed copy of the Note, a certified copy of resolutions or other authority by the appropriate governing body or bodies as shall legally authorize the execution and performance of this Agreement and the Note, and such opinions, certificates and documents as requested by and in a form acceptable to the Authority. (b) The Borrower hereby acknowledges and specifically agrees that the Note constitutes a general obligation bond of the Borrower notwithstanding the existence of this Agreement and shall be shown as such on its financial statements and shall be treated in all respects as a general obligation bond of the Borrower. For purposes of permitting issuance of the Note, the Authority represents that it is a "board, department or agency" of the State of Minnesota within the meaning of Minnesota Statutes, Section 475.60, subdivision 2, clause (4), as amended or supplemented from time to time. (c) The obligations of the Borrower under the Note shall be deemed to be amounts payable under the Loan. Each payment made pursuant to the Note shall be deemed to be a credit against the corresponding obligation of the Borrower under the Loan and any such payment shall fulfill the Borrower's obligation to pay such amount hereunder. Section 1.4. Mandatory Payments (a) The principal amount of the Loan will be repaid in the amounts and on the dates set forth in the schedule in Exhibit A hereto (notwithstanding the rate of disbursement of the proceeds of the Loan), subject to adjustment as set forth in Section 1.5 below, together with interest and service fees collectively at the rate 1.703% per annum for the period starting on the date of this Agreement through the date on which no principal remains unpaid, provided, however, that interest and service fees shall accrue only on the aggregate amount of the Loan disbursed and outstanding; and provided further that the Authority shall be entitled to retain for its own purposes any interest earnings on funds that are not disbursed and shall not be obligated to credit against any required repayment of principal or payment of interest and service fees any such interest earnings on funds that are not disbursed. Any payment of principal or interest received by the Authority in excess of the amounts set forth in Exhibit A, as then in effect, which is not a mandatory payment as designated in paragraph (b), or not expressly designated by the Borrower to be treated as an optional prepayment may, in the sole option and discretion of the Authority, be (i) held without interest payable by the Authority and applied to a future payment due on the Loan in a manner determined by the Authority, (ii) treated as a prepayment of principal on the Loan, or (iii) returned to the Borrower as an overpayment. (b) In the event that special assessments and /or connection charges from another municipality are pledged to the repayment of the Loan and the Borrower receives prepayments or lump sum payments of such special assessments and /or connection charges, the Borrower is hereby required, and hereby agrees, to immediately notify the Authority and transmit the funds within ten days to the Authority for payment on the Loan, unless the Authority, in its sole option and discretion, directs the Borrower to use the funds for the payment of eligible construction costs, or transmit the funds at a later date to the Authority for payment on the Loan. Any such payment received by the Authority may be applied to reduce each unpaid annual principal installment required with respect to the Loan in the proportion that such installment bears to the total of all unpaid principal installments, or, in the sole option and discretion of the Authority, may be applied to a future principal payment on the loan in a manner determined by the Authority. dwrf - con -db Page 2 of 9 City of New Hope (rev. 12/09) February 16, 2010 Section 1.5. Optional Prepayments (a) Upon 45 days prior written notice to the Authority and subject to approval by the Authority in its sole option and discretion, the Borrower may prepay the Loan and the Note, in whole or in part, on any February 20 or August 20 at a price equal to 100% of the principal amount to be prepaid, together with accrued interest thereon to the redemption date. The Borrower shall also pay to the Authority on any such redemption date all fees and expenses of the Authority, if any, paid or incurred in connection with the prepayment as determined by the Authority in its sole discretion. (b) The Authority may require an opinion from a law firm, selected by the Authority, having a national reputation in the field of municipal law whose legal opinions are generally accepted by purchasers of municipal bonds ('Bond Counsel ") to the effect that such prepayment will not cause the interest on the Note to be included in the gross income of the recipient thereof for federal income tax purposes. (c) The principal amount of a partial prepayment may, in the sole option and discretion of the Authority, (i) be applied to a future principal payment on the Loan in a manner determined by the Authority, or (ii) be applied to reduce each unpaid annual principal installment required with respect to the Loan in the proportion that such installment bears to the total of all unpaid principal installments (i.e., the remaining principal payment schedule shall be re- amortized to provide proportionately reduced principal payments in each year). Section 1.6. Authority Source of Funds The Borrower acknowledges that the Authority may provide funds for the Loan from the proceeds of one or more specified series of its Drinking Water Revenue Bonds (the "Bonds "), federal capitalization grants or other funds of the Authority and that the Authority may, at any time, pledge the Loan as security for its Bonds. The Authority in its sole option and discretion may reallocate the Loan to another source or refund the Bonds from which the Loan was funded or deemed to be funded. ARTICLE II - THE PROJECT Section 2.1. Borrower Responsibilities With respect to the Project, the Borrower agrees to the following: (a) The Borrower acknowledges its responsibility to complete the Project regardless of the availability of additional loans or grants from the Authority. (b) The Borrower shall not enter into a sale, lease or transfer of any part of the Project, or change the use of the Project, without the prior written approval of the Authority if such sale, lease, transfer, or change in use would (i) violate the covenants set forth in Section 3.1, or (ii) violate the conditions under which any capitalization grants were furnished by the United States Environmental Protection Agency, or (iii) otherwise violate any terms or conditions of the Agreement. (c) The Borrower shall maintain adequate property insurance coverage for the Project in such amounts with such limits as it determines in good faith to be reasonable or in such amounts and with such limits as may be required by the Authority from time to time. (d) The Borrower agrees that it shall complete the Project for which financial assistance has been awarded under this Agreement in accordance with all applicable Minnesota Department of Health (the "MDH ") statutes, rules, regulations, reporting requirements, approvals, and certifications governing the design, construction and operation of the Project. (e) The Borrower agrees to exert all reasonable efforts to investigate claims which the Borrower may have against third parties with respect to the construction of the Project and, in appropriate circumstances, take whatever action, including legal action, the Borrower reasonably determines to be appropriate. dwrf - con -db Page 3 of 9 City of New Hope (rev. 12/09) February 16, 2010 Section 2.2. Construction Compliance (a) The Borrower will comply and require contractors and subcontractors to comply with the provisions of State wage requirements given in Minnesota Statutes, Sections 177.41 to 177.44, as amended or supplemented from time to time; and (b) In addition to the prevailing wage requirements under subsection (a), the Borrower will comply and require that all laborers and mechanics employed by contractors and subcontractors on the Project be paid wages at rates not less than those prevailing on projects of a similar character in the locality as determined by the Secretary of Labor in accordance with the Davis -Bacon Act (46 Stat. 1494; 40 U.S.C., sec. 276a through 276a -5); and (c) If requested, the Borrower will submit to the Authority, within 20 days of the end of the semi- annual reporting period, EPA Form 5700 -52A to report on the award of prime contracts or subcontracts to any certified Minority and Women Business Enterprise (MBE /WBE) firms until the Project is complete, and (d) The Borrower will make a good faith effort to prepare and implement an affirmative action plan for the employment of minority persons, women, and disabled and submit the plan to the Commissioner of Human Rights, and (e) The Borrower will comply with Minnesota Statutes, Section 290.9705, as amended or supplemented from time to time by withholding eight percent (8 %) of payments made to all out -of -state contractors once cumulative payments made to the contractor for work done in Minnesota exceed $50,000 in a calendar year, unless an exemption is granted by the Department of Revenue. Withheld amounts are required to be deposited with the Minnesota Department of Revenue. ARTICLE III - TAX EXEMPTION Section 3.1. Covenants The Borrower acknowledges that this Loan constitutes the proceeds of the Note of the Borrower which is intended to bear interest which is excluded from gross income of the owner thereof for federal and State of Minnesota income tax purposes (a "Tax- exempt Note ") and may be funded by the Authority from the proceeds of the Authority's Bonds which were intended to bear interest which is excluded from gross income of the owner thereof for federal and State of Minnesota income tax purposes ("Tax - exempt Bonds "). The Borrower also acknowledges that, regardless of the source of funding, the Authority may pledge this Loan and the related Note as security for, and as a source of, the payment of debt service on any or all of its Tax - exempt Bonds. In consideration of these facts, the Borrower covenants and agrees with the Authority, whether or not strict compliance with such agreements is required to maintain the Note as a Tax- exempt Note or the Authority's Bonds as Tax - exempt Bonds, as follows: (a) The Borrower, with respect to the Note, will not take, or to the extent under its control, permit, any action which would cause the Note not to be a Tax - exempt Note or any Authority Bonds not to be Tax - exempt Bonds and will not omit from taking, or cause to be taken, any action required to maintain the note as a Tax - exempt Note or the Authority's Bonds as Tax - exempt Bonds. (b) The Borrower will take all actions with respect to the Note, necessary to comply with all instructions and requests of the Authority relating to maintaining the Authority's Bonds as Tax - exempt Bonds and the Note as a Tax - exempt Note or compliance with the agreements set forth in this section or in any Tax Compliance Certificate (hereinafter defined). (c) The Borrower agrees to comply with all requirements of any certificate or agreement ( "Tax Compliance Certificate ") executed and delivered in connection with the issuance of the Note. dwrf - con -db Page 4 of 9 City of New Hope (rev. 12/09) February 16, 2010 (d) The Borrower will promptly notify the Executive Director of the Authority in writing of any action or event which adversely affects the status of the Note as a Tax - exempt Note or any of the Authority's Bonds as Tax - exempt Bonds. (e) None of the proceeds of the Loan may be used to pay the costs of any facility used for any private business use or to make a private loan within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the "Code "), except as specifically permitted in writing by the Authority. (f) No Loan repayments may be made from, or secured by, property used or to be used for a private business use or payments in respect of such property within the meaning of Section 141 of the Code, except as specifically permitted in writing by the Authority. (g) The Borrower will not establish any fund or account, other than a bona fide debt service fund, securing the payment of the Tax - exempt Note or Tax - exempt Bonds or from which the Borrower reasonably expects to pay debt service on this Loan, or in any other respect create "gross proceeds," within the meaning of the Code, of the Tax - exempt Note or Tax - exempt Bonds, except as specifically permitted in writing by the Authority. (h) The Borrower will not invest any moneys constituting "gross proceeds" of the Tax- exempt Note or Tax - exempt Bonds at a yield, within the meaning of the Code, in excess of the lesser of the yield on the Tax - exempt Note or the Tax - exempt Bonds applicable to this Loan and shall disburse all Loan proceeds within five (5) days of the receipt thereof by the Borrower consistent with the terms of the Borrower's disbursement request. (i) Except as permitted under Treasury Regulations, Section 1.150 -2, the Borrower will not use Loan proceeds to reimburse itself for any payments of project costs which the Borrower made from other funds, if the original payment was made prior to the earlier of the issuance of the Authority Bonds used to fund this Loan or the execution and delivery of this Agreement and the Note or if the original payment was made from the proceeds of other debt of the Borrower. 0) The Borrower agrees that the allocation of Loan proceeds to specific sources of funds, including different series of Tax - exempt Bonds, shall be at the sole discretion of the Authority and such allocation shall be binding on the Borrower. (k) With respect to any gross proceeds of the Tax - exempt Bonds created by the Borrower, the Borrower shall be liable to the Authority for the amount required to be rebated as excess investment earnings to the United States. (1) The Authority may, in its sole option and discretion and only upon receipt of an opinion of counsel to the Authority, waive any of the agreements set forth in this Article III. ARTICLE IV - FINANCIAL RECORDS AND AUDITS Section 4.1. Financial Recordkeeping For all expenditures of funds made pursuant to this Agreement, the Borrower shall keep financial accounts and records in accordance with Generally Accepted Accounting Principles (GAAP) including invoices, contracts, receipts, vouchers and other documents sufficient to evidence in proper detail the nature and propriety of the expenditures. Such accounts and records shall be accessible and available for a minimum of six years for examination by authorized representatives of. the Authority, the Department of Employment and Economic Development, the Legislative Auditor, and Office of the State Auditor. dwrf - con -db Page 5 of 9 City of New Hope (rev. 12/09) February 16, 2010 Section 4.2. Annual Audit Requirements (a) The Borrower shall provide the Authority with acceptable reports of independent annual audits for the term of the Loan. All audit reports must be submitted within 30 days after the completion of the audit but no later than one year after the end of the audit period. The audits must be conducted in accordance with generally accepted government auditing standards and in compliance with the single audit act requirements of the federal Office of Management and Budget, circular A -133. (b) The Borrower shall list the Note issued by the Borrower to the Authority to effect this Loan under General Obligation Debt of the Borrower in its official records and statements. The Borrower specifically agrees that the Note issued to the Authority shall be listed under General Obligation Debt of the Borrower in its annual audits for the term of the Loan. ARTICLE V - DISCLOSURE Section 5.1. Official Statement (a) The Borrower agrees to provide to the Authority such information with respect to the Borrower, its duties, operations and functions as may be reasonably requested by the Authority, and hereby consents to its inclusion in the Authority's official statement(s) used in connection with issuance and sale or the re- marketing of other Authority Bonds, whether or not all or a portion of the proceeds of which will be loaned to the Borrower. (b) At the request of the Authority, the Borrower will certify and represent that such information with respect to the Borrower in such official statements does not contain any untrue statements of a material fact or omit to state a material fact necessary to make such information, in light of the circumstances under which it was given, not misleading; provided, however, that in no event shall the Borrower be required to make any representation about any other information in such official statements or as to any such official statements in their entirety. If for any reason the Borrower determines that it shall not be able to make such certification and representation, it will provide such information as is necessary for inclusion in such official statements so as to enable it to make such certification and representation. (c) If at any time during the period ending 90 days after the date of an Authority official statement any event occurs which the Borrower believes would cause the information with respect to the Borrower in such official statement to omit a material fact or make the statements therein misleading, the Borrower shall promptly notify the Authority in writing of such information and consent to its inclusion in the official statement, an amendment thereof or a supplement thereto. At the request of the Authority, the Borrower will also provide the certification and representation required in (b) above with respect to such official statement as then amended or supplemented. (d) The Borrower will furnish such information, execute such instruments and take such other action in cooperation with the underwriters of the Authority's Bonds as such underwriters may from time to time reasonably request in order (i) to qualify, and maintain the qualification of, any such Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as such underwriters may designate, and (ii) to determine the eligibility of such for investment under the laws of such states and other jurisdictions. (e) The Borrower will provide such information as may be reasonably requested by any rating agency in connection with rating the Bonds of the Authority. dwrf - con -db Page 6 of 9 City of New Hope (rev. 12109) February 16, 2010 Section 5.2. Continuing Disclosure If the Authority, in its sole discretion, determines, at any time prior to the termination of the term of the loan, (i) that the Borrower is a material "obligated person," as the term "obligated person" is defined in Rule 15c2 -12 promulgated pursuant to the Securities Exchange Act of 1934, as amended or supplemented, including any successor regulation or statute thereto ( "Rule 15c2 -12 ") or (ii) that a material event has occurred with respect to the Borrower or the Loan, as that term is defined in Rule 15c2 -12, or that any other action of the Borrower has occurred which the Authority determines in its sole discretion is material to an investor in the Bonds of the Authority, with materiality in either case being determined by the Authority pursuant to criteria established, from time to time, by the Authority in its sole discretion and set forth in a resolution or official statement of the Authority, the Borrower hereby covenants that it will authorize and provide to the Authority, for inclusion in any preliminary official statement or official statement of the Authority, all statements and information relating to the Borrower deemed material by the Authority for the purpose of satisfying Rule 15c2 -12 as well as Rule IOb -5 promulgated pursuant to the Securities Exchange Act of 1934, as amended or supplemented, including any successor regulation or statute thereto ( "Rule lOb -5 "), including certificates and written representations of the Borrower evidencing its compliance with Rule 15c2 -12 and Rule lOb -5; and the Borrower hereby further covenants that the Borrower (if determined to be an obligated person) shall execute and deliver a continuing disclosure agreement, in such form as the Authority shall determine to be necessary, desirable or convenient, in its sole discretion, for the purpose of satisfying Rule 15c2 -12, and pursuant to the terms and provisions of such continuing disclosure agreement, the Borrower shall thereafter provide ongoing disclosure with respect to all annual and event information and financial statements relating to the Borrower required by Rule 15c -12 and pursuant to the terms and provisions of such continuing disclosure agreement, and the Borrower further agrees that the Authority shall have the right to disclose any information about the Borrower or the Loan, whether or not received from the Borrower, determined by the Authority in its sole discretion, to be material with respect to any of its Bonds. ARTICLE VI - COMPLIANCE Section 6.1. Minnesota Rule 7380.0296 If the Borrower has failed to fully comply with the loan conditions provided in Minnesota Rules 7380.0245 to 7380.0297, the Authority shall notify the Borrower in writing of the Authority's determination. The Borrower has three months from the date of notification to return to compliance or provide a written plan, acceptable to the Authority, for returning to compliance. Upon submission of a plan by the Borrower, the Authority shall either accept or reject the plan. If an accepted plan has a longer time period for returning to compliance, the time period for compliance shall be the period specified in the accepted plan. If after three months the Borrower fails to return to compliance or provide an acceptable plan, or fails to return to compliance within the time period specified in an accepted plan, the interest rate on the unpaid loan principal shall increase from and after the date of required compliance to the quarterly set rate in effect when the Borrower's loan application was received, with no further discounts as provided in Minnesota Rules 7380.0270. If the Borrower subsequently returns to compliance, the Borrower may request the Authority to reinstate the original interest rate. If the Authority determines, upon written request of the Borrower, that the Borrower has returned to compliance, the interest rate on the unpaid loan principal shall revert back to the original interest rate as of the date of the determination by the Authority. dwrf - con -db page 7 of 9 City of New Hope (rev. 12/09) February 16, 2010 Section 6.2. Minnesota Statutes 16A.695 This Loan may be funded in whole or in part with State match funds derived from State General Obligation Bond proceeds. In order to comply with Minnesota Statutes Section 16A.695, as amended or supplemented from time to time, and the order of the Commissioner of Finance (the "Commissioner ") of the Department of Finance of the State of Minnesota (the "Order ") promulgated in connection with Section 16A.695 on July 14, 1994, if this Loan is funded with State match proceeds derived from State General Obligation Bonds, the Borrower agrees that: (i) any lease or management contract entered into by the Borrower with respect to property constituting all or a part of the Project shall be for the express purpose of carrying out of a governmental program established or authorized by law and established by official action of the Borrower and the Borrower shall obtain the prior written consent of the Commissioner; (ii) any such lease or management contract, including any renewals that are solely at the option of the lessee or manager, must be for a term substantially less than the useful life of the property subject to such lease or management contract, but may allow renewal beyond that term upon determination by the Borrower that the use continues to carry out the governmental program; (iii) any such lease or management contract will be terminable by the Borrower if the other contracting party defaults under the contract, or if the governmental program is terminated or changed; and will provide for program oversight by the Borrower; (iv) the Borrower will not sell any property constituting all or a part of the Project unless the Borrower determines by official action that such property is no longer usable or needed by the Borrower to carry out the governmental program for which it was acquired or constructed; and (v) any such sale must be made as authorized by law for fair market value as defined in Section 16A.695 and the Borrower shall obtain the prior written consent of the Commissioner. The Authority may waive the requirements of this paragraph at any time upon determination by the Authority that this Loan has not been and will not be funded from proceeds of State General Obligation Bonds. Section 6.3. General Upon notification from the MDH to the Authority that there has been a violation by the Borrower of MDH statutes, rules, regulations, reporting requirement, approvals, certifications, or permit requirements, as amended or supplemented from time to time; or if the Authority determines that the Borrower is in default with any section of the Agreement, the Authority may exercise any remedies available at law or in equity. ARTICLE VII - ADMINISTRATION Section 7.1. Fee. The Borrower acknowledges that the Authority may apply up to 2% of any loan repayment to payment of administrative costs and that such application shall not increase the amount of any repayments or extend the period of repayment. Section 7.2 Notices In addition to any notice required under applicable law to be given in another manner, any notices required hereunder must be in writing, and shall be sufficient if personally served or sent by prepaid, registered, or certified mail (return receipt requested), to the address of the party to whom it is directed. Such address shall be that address specified below or such different address as may hereafter be specified, by either party by written notice to the other: In the case of the Authority: In the case of the Borrower: Minnesota Public Facilities Authority City of New Hope Attention: Executive Director Attention: Mayor 332 Minnesota Street, Suite E200 4401 Xylon Avenue North St. Paul, MN 55101 -1351 New Hope, MN 55428 -4843 Section 7.3. Termination of Loan The obligations of the Borrower under this Agreement (except the obligations set forth in Section 2.1 and Section 6.2 hereof) shall terminate when the Loan is fully paid and retired. dwrf- con -db Page 8 of 9 City of New Hope (rev. 12109) February 16, 2010 Project Number: MPFA -09- 0050- R -FY10 Borrower Name: City of New Hope The Authority and the Borrower acknowledge their assent to this agreement and agree to be bound by its terms through their signatures entered below. Statutory Cities must execute this Agreement as provided in Minnesota Statute 412.201, as amended or supplemented. Home Rule Charter Cities must execute this Agreement as provided in Minnesota Statute, Chapter 410, as amended or supplemented. BORROWER: We have read and we agree to all of the above provisions of this agreement. Kathi Hemken Title Mayor Date 3 STATE OF MINNESOTA by and through the Public Facilities Authority. By bqn-Dk Title Chair Date ` t By Kirk McDonald Title City Manager Date 3� l ENCUMBERED: Department of Employment and Economic Development By Date Encumbered B24 -169 2/23/2010 (Individual signing certified that funds have been encumbered as required by Minnesota Statute 16A) dwrf - con -db Page 9 of 9 City of New Hope (rev. 12/09) February 16, 2010 MPFA Financial Management 02/23/10 dw_NewHope.xls Exhibit A MN Public Facilities Authority Loan Amortization Schedule Drinking Water Revolving Fund New Hope, City of funding dates / amounts: 418,644.00 MPFA -09- 0050 -R -FY 10 Loan date: Accrual date: immediate Rate: 1.703% final loan amount: 418,644.00 Date Effective Source Disbursement Repayment Interest Principal Loan Balance Annual D.S. projected 03/24/10 418,644.00 418,644.00 08/20/10 10,535.41 2,891.41 7,644.00 411,000.00 10,535.41 02/20/11 3,499.67 3,499.67 411,000.00 08/20/11 22,499.67 3,499.67 19,000.00 392,000.00 25,999.34 02/20/12 3,337.88 3,337.88 392,000.00 08/20/12 22,337.88 3,337.88 19,000.00 373,000.00 25,675.76 02/20/13 3,176.10 3,176.10 373,000.00 08/20/13 22,176.10 3,176.10 19,000.00 354,000.00 25,352.20 02/20/14 3,014.31 3,014.31 354,000.00 08/20/14 22,014.31 3,014.31 19,000.00 335,000.00 25,028.62 02/20/15 2,852.53 2,852.53 335,000.00 08/20/15 22,852.53 2,852.53 20,000.00 315,000.00 25,705.06 02/20/16 2,682.23 2,682.23 315,000.00 08/20/16 22,682.23 2,682.23 20,000.00 295,000.00 25,364.46 02/20/17 2,511.93 2,511.93 295,000.00 08/20/17 22,511.93 2,511.93 20,000.00 275,000.00 25,023.86 02/20/18 2,341.63 2,341.63 275,000.00 08/20/18 23,341.63 2,341.63 21,000.00 254,000.00 25,683.26 02/20/19 2,162.81 2,162.81 254,000.00 08/20/19 23,162.81 2,162.81 21,000.00 233,000.00 25,325.62 02/20/20 1,984.00 1,984.00 233,000.00 08/20/20 23,984.00 1,984.00 22,000.00 211,000.00 25,968.00 02/20/21 1,796.67 1,796.67 211,000.00 08/20/21 23,796.67 1,796.67 22,000.00 189,000.00 25,593.34 02/20/22 1,609.34 1,609.34 189,000.00 08/20/22 23,609.34 1,609.34 22,000.00 167,000.00 25,218.68 02/20/23 1,422.01 1,422.01 167,000.00 08/20/23 24,422.01 1,422.01 23,000.00 144,000.00 25,844.02 02/20/24 1,226.16 1,226.16 144,000.00 08/20/24 24,226.16 1,226.16 23,000.00 121,000.00 25,452.32 02/20/25 1,030.32 1,030.32 121,000.00 08/20/25 24,030.32 1,030.32 23,000.00 98,000.00 25,060.64 02/20/26 834.47 834.47 98,000.00 08/20/26 24,834.47 834.47 24,000.00 74,000.00 25,668.94 02/20/27 630.11 630.11 74,000.00 08/20/27 24,630.11 630.11 24,000.00 50,000.00 25,260.22 02/20/28 425.75 425.75 50,000.00 08/20/28 25,425.75 425.75 25,000.00 25,000.00 25,851.50 02/20/29 212.88 212.88 25,000.00 08/20/29 25,212.88 212.88 25,000.00 - 25,425.76 totals 418,644.00 495,037.01 76,393.01 418,644.00 495,037.01 Weighted avg maturity (assuming issue date of 03/24/10): 10.72 years Estimated interest savings: $67,270 MPFA Financial Management 02/23/10 dw_NewHope.xls COUNCIL Request for Action Originating Department Approved for Agenda Agenda Section Public Works March 22, 2010 Development & Plannin Item No. By: Guy Johnson By: Kirk McDonald, City Manager 8.2 Resolution relating to $418,644 general obligation water bond, series 2010; authorizing issuance and sale, fixing the form and details thereof, and providing the security thereof (improvement project no. 845) Requested Action Staff recommends that Council approve a resolution that has been prepared by the city's Bond Counsel, authorizing issuance of the note and execution of the loan agreement with the Minnesota Public Facilities Authority (PFA). The funds are from the PFA's low interest "Drinking Water Revolving Fund" loan program. The funds can only be used for installation of new water main along Winnetka Avenue, between Bass Lake Road and 62nd Avenue North, for the Winnetka Avenue infrastructure improvement project. Policy /Past Practice The City Council routinely considers public infrastructure improvement projects to extend the useful life of the infrastructure and /or improve the level of service. The city's street infrastructure management plan has identified this area for maintenance activities. Background Improvements to Winnetka Avenue, between Bass Lake Road and 62nd Avenue, were included in the city's pavement management plan for the 2006 infrastructure project. Because of utility funding restrictions for the proposed replacement of the water main, the infrastructure improvements along Winnetka Avenue were removed from the 2006 infrastructure project. The proposed project was submitted to the Minnesota Department of Transportation to be considered for the federal government's economic stimulus package. The federal government referred to the submitted projects as "ready to go" projects that could be bid out in 90 to 120 days. On January 26, 2008, Council authorized the preparation of a feasibility report for the proposed infrastructure improvements for Winnetka Avenue. Motion by Second by t t6 I: \RFA \PUBWORKS \2010 \845 Winnetka Ave. PFA Loan.doc Request for Action March 22, 2010 Page 2 On March 9, 2009, the city engineer presented the feasibility report for the proposed Winnetka Avenue infrastructure improvement project. Council reviewed the report and authorized preparation of plans and specifications for the project. Council approved plans and specifications and ordered advertisement for bids at the April 27 Council meeting. A public informational meeting concerning this project was held on Tuesday, June 30. Council awarded a contract for construction of the Winnetka Avenue infrastructure project on October 26, to S. R. Weidema Inc., in the amount of $1,186,460.15. The proposed Winnetka Avenue improvements will involve street and utility infrastructure work. The infrastructure improvements include replacement of the asphalt street, spot curb and sanitary sewer replacement, storm water improvements, and replacement of the existing cast iron water main. Funding The water main replacement portion of the project requires the issuance of debt. Staff formally submitted a request to have the water main portion of the project be put on a list for funding from the PFA's "Drinking Water Revolving Fund" loan program. The project was accepted as eligible and placed on the state's 2010 list. On January 11, 2010, Council authorized the submittal of an "Application Clean Water Revolving Fund/Drinking Water Revolving Fund" low interest loan. The city's application was accepted by the PFA and the agreement was mailed to the city on February 26. This is another federal government economic stimulus package that is in the form of a low interest loan. The loan will be in the amount of $418,644, for a term of 20 years at an interest rate of 1.703 %. Besides the low interest loan from the PFA for water main replacement, the city has also been awarded funds from a federal government economic stimulus package grant program for the street and storm water portion of the improvement project. The stimulus funds are in an amount up to $834,000. The Minnesota Department of Transportation will administrate these funds. Reimbursement of the project's street related costs would only be after review and approval of the city's expenditure submittals by the Minnesota Department of Transportation. Attachment The resolution, the agreement, Bond Council's letter, and the engineer's memorandum are attached. 1: \RFA \PUBWORKS \2010 \ 845 Winnetka Ave. PFA Loan.doc