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RESOLUTION PROVIDING FOR THE ISSUANCE OF UP TO $4,570,000 GENERAL OBLIGATION TOURISM TAX REVENUE BONDS, IN ONE OR MORE SERIES.
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CITY PROPOSAL:
BE IT RESOLVED, by the City Council of the city of Duluth, Minnesota (the “City”), as follows:
Section 1. Bond Purpose and Authorization.
1.01 (a) Under the provisions of Minnesota Laws 2014, Chapter 308, Article 3, Sections 21 and 22 (the “2014 Act”), the City Council was authorized to issue and sell up to $18,000,000 of general obligation bonds under Minnesota Statutes, Chapter 475, plus additional amounts to pay for costs of issuance and discount, which bonds were to be supported by the full faith and credit of the City and are to be issued subject to the provisions of Minnesota Statutes, Section 475, except no election shall be required unless required by the City Charter and except that the bonds shall not be included in the City’s net debt. The proceeds of such general obligation bonds were used to finance capital improvements to public facilities that support tourism and recreational activities in the portion of the City west of 34th Avenue West, and the area south of and including Skyline Parkway (the “2014 Law Projects”) and shall be payable primarily from the 0.5% Tourism Tax, as hereinafter defined.
(b) The City has previously issued pursuant to the authority of the 2014 Act (i) its $2,330,000 Taxable General Obligation Tourism Tax Revenue Bonds, Series 2014C, dated October 30, 2014 (the “2014C Bonds”); (ii) its $2,150,000 General Obligation Tourism Tax Revenue Bonds, Series 2014D, dated October 30, 2014 (the “2014D Bonds”); and (iii) its $13,800,000 Taxable General Obligation Tourism Tax Revenue Bonds, Series 2015E (the “2015E Bonds”). Proceeds of the 2014C Bonds in the amount of $2,300,000 financed costs of an eligible 2014 Law Project and the balance of the proceeds of the 2014C Bonds financed costs of issuance and discount for the 2014C Bonds. Proceeds of the 2014D Bonds in the amount of $2,100,000 financed costs of an eligible 2014 Law Project and the balance of the proceeds of the 2014D Bonds financed costs of issuance and discount for the 2014D Bonds. Proceeds of the 2015E Bonds in the amount of $13,600,000 financed costs of an eligible 2014 Law Project and the balance of the proceeds of the 2015E Bonds financed costs of issuance and discount. The 2014C Bonds, the 2014D Bonds, and the 2015E Bond financed projects under the 2014 Act (the “Tourist Tax Projects”), the City has not issued any other obligations pursuant to the authority under the 2014 Act or the 2023 Act; consequently, the City has the authority to issue additional general obligation tourism tax revenue bonds pursuant to the 2014 Act and the 2023 Amendment to finance an additional $36,000,000 for project costs for Tourism Tax Projects, as amended by the 2023 Amendment (collectively the “Tourism Tax Act”), plus additional amounts to pay for costs of issuance and discount for such additional bonds.
(c) Pursuant to Minnesota Laws 2023, Chapter 64, Article II, Section 1 and Section 2, (the “2023 Amendment”) the 2014 Act was amended and the City was authorized to issue an additional $36,000,000 of bonds pursuant to the 2014 Act, as amended by the 2023 Amendment (together, the “0.5% Additional Tourist Tax Act”).
(d) As of the date hereof, the City has not issued any of the additional $36,000,000 of bonding authority authorized by the 2023 Amendment.
1.02 Pursuant to the authority herein recited, the City authorizes and directs the issuance and sale of approximately $4,570,000 General Obligation Tourism Tax Revenue Bonds in two series, to be dated the date of delivery, as the date of original issue (the “Bonds”) to provide funds in the approximate amount of $4,570,000 for eligible Tourism Tax Project, and for costs of issuance and discount for the Bonds. Net proceeds of the Bonds to be issued by the City in an amount of $4,450,000 are allocated to pay a portion of the costs of Tourism Tax Projects. The balance of the funds are allocated to issuance and discount costs of the Bonds.
1.03 Ehlers & Associates, Inc. (“Ehlers”) municipal advisor to the City, shall give notification to at least five firms determined by Ehlers to be prospective bidders on the Bonds at least two days (omitting Saturdays, Sundays and legal holidays) before the date set for receipt of bids on the Bonds. All actions of the mayor, the clerk and Ehlers taken with regard to the sale of the Bonds are hereby ratified and approved.
1.04 This resolution constitutes a declaration of official intent under Treasury Regulations Section 1.150-2. The City reasonably expects to acquire or construct all or a portion of the capital improvements prior to the issuance of the capital improvement bonds and to reimburse expenditures incurred with respect to such capital improvement program with the proceeds of the capital improvement bonds.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution declares the City’s intent to issue general obligation tourism tax revenue bonds (the “2025 Tourist Tax Bonds”) in an amount not to exceed $4,570,000 for certain capital improvements to public facilities that support tourism and recreational activities. The estimated costs of the improvements to be financed by the 2025 Tourism Tax Bonds are $4,450,000 plus underwriter discount and costs of issuance.
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