Title
RESOLUTION EXPRESSING THE INTENT OF THE CITY OF DULUTH TO ISSUE TAX-EXEMPT GENERAL OBLIGATION STEAM UTILITY REVENUE BONDS
Body
CITY PROPOSAL:
BE IT RESOLVED by the City Council (the "Council") of the City of Duluth (the "City"):
Section 1. Statement of Facts. Fryberger, Buchanan, Smith & Frederick, P.A. ("Bond Counsel") has informed the City that:
(a) Under and pursuant to the provisions of Chapter VIII, Section 55 of the City Charter, Minnesota Laws, 1979, Chapter 113 and Chapter 475 of Minnesota Statutes and other pertinent provisions of said Charter and statutes (collectively, the "Act"), the City is authorized to issue its general obligation revenue bonds (the "Bonds") to provide funds for the improvement of the municipal steam plant, which Bonds shall be a specific lien upon such plant and may be payable primarily from net revenues to be derived from service charges pledged for their payment; and
(b) Certain provisions of the Internal Revenue Code of 1986, as amended (the "Code") limit the types of expenditures that may be financed by the Bonds on a tax-exempt basis; and
(c) The Bonds, if and when issued, will be general obligations of the City payable primarily from the net revenues of the City's Municipal Steam Utility, as defined below;
(d) The Municipal Steam Utility is operated under a management agreement with Ever-Green Energy, Inc., a Minnesota corporation (the "Corporation"), such management agreement does not constitute a "Qualified Management Agreement" under 26 CFR ? 1.141-3(4);
(e) Rates and charges for use of the Municipal Steam Utility are not charged in a generally applicable and uniform manner as required by 26 CFR ? 1.141-3(c)(2), instead rates are charged on a negotiated contract bases, with different rates applying to each user; and
(f) The interest on which Bonds is intended to be excluded from gross income for federal income tax purposes pursuant to Section 142(a)(9) and (g) o...
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