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HomeMy WebLinkAbout2003-052 Council ResolutionRESOLUTION NO. 03-52 REGARDING AMENDMENT OF THE AMENDED JOINT AND COOPERATIVE AGREEMENT FOR THE ADMINISTRATION OF A CABLE COMMUNICATIONS SYSTEM TO PERMIT THE ISSUANCE OF BONDS, OBLIGATIONS AND OTHER FORMS OF INDEBTEDNESS AND TO MODIFY THE PROCESS FOR WITHDRAWING FROM THE NORTH METRO TELECOMMUNICATIONS COMMISSION WHEREAS, The City of Lino Lakes, Minnesota (the "City") is a member of the North Metro Telecommunications Commission (the "Commission "), a municipal joint powers board organized pursuant to a Joint and Cooperative Agreement, as amended ( "Agreement "), adopted by the Cities of Blaine, Centerville, Circle Pines, Ham Lake, Lexington, Lino Lakes and Spring Lake Park, Minnesota (the "Member Cities ") pursuant to Minn. Stat. § 471.59; and WHEREAS, the Commission wishes to purchase a parcel of land in one of the Member Cities and to improve such parcel by completing a new operations/studio facility on that land (the "Project "), in order to exercise its powers and carry out its duties under Article VIII of the Agreement; and WHEREAS, Article VIII, § 2 of the Agreement states that the Commission may not contract for the purchase of real estate without the prior authorization of the Member Cities; and WHEREAS, the Commission voted on October 16, 2002, to authorize staff to pursue options for purchasing an appropriate parcel of land and to retain an architect to draft necessary architectural diagrams for the new studio facility; and WHEREAS, the Commission proposes to issue revenue bonds or similar obligations in a principal amount not to exceed $2,500,000 (the "Bonds ") in order to finance the Project; and WHEREAS, Minn. Stat. § 471.59, subd. 11 states that the governing bodies of the Member Cities must expressly authorize the Commission to issue bonds, obligations and other forms of indebtedness; and WHEREAS, the Agreement, as currently written, does not expressly authorize the Commission to issue bonds, obligations and other forms of indebtedness; and WHEREAS, it is necessary to amend the Agreement to permit the issuance of the Bonds and to ensure that each of the Member Cities remains responsible for its share of that indebtedness. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes, Minnesota as follows: 1. That Article II of the Agreement shall be amended to read as follows: The general purpose of this agreement is to establish an organization to monitor the operation and activities of cable communications, and in particular, the Cable Communications System (System) of the parties; to provide coordination of administration and enforcement of the franchises of parties for their respective System; to produce, edit and transmit video programming for the parties of this agreement; to make video production, editing and studio facilities and equipment available to the citizens of the parties to this agreement through the operation of a Community Media Center; to promote the development of locally produced cable television programming; to ensure public access to emerging telecommunications technologies; and to conduct such other activities authorized herein as may be necessary to insure equitable and reasonable rates and service levels for the citizens of the Members to this agreement. 2. That Article IV, Section 3 of the Agreement shall be amended to read as follows: Section 3. "Community Media Center" means the public access center formerly run by the cable company, and any other public access center and studio facility that may be subsequently constructed by the Commission, along with all related equipment and staff. 3. That Article VIII of the Agreement shall be amended by adding a new Section 13 that reads as follows: Section 13. The Commission is given express authority to issue bonds, obligations and other forms of indebtedness, in a principal amount not to exceed $2,500,000 (the "Bonds "), to finance the Commission's purchase of real property and its construction and acquisition on that property of a public access center and an operations /studio facility, to include the Community Media Center and the offices of the Commission (the "Project "). The term `Bonds shall also include bonds issued to refund and refinance the Bonds, or any portion thereof. Refunding Bonds shall not count against the $2,500,000 limit except to the extent that the amount of the refunding Bonds exceeds the amount of the Bonds being refunded thereby, but that limit shall not apply to any issue of refunding Bonds which produces an overall savings in debt service cost. As provided in Minn. Stat. § 471.59, subd. 11, the Bonds shall be obligations of the Commission which are issued on behalf of the Members, and shall be issued subject to the conditions and limitations set forth in Minn. Stat. § 471.59, subd. 11. The Bonds shall be payable solely from the Member's franchise fees, as hereinafter provided. The Commission may not pledge to the payment of the Bonds the full faith and credit or taxing power of the Members. No bonds, obligations or other forms of indebtedness other than the Bonds may be issued by the Commission without the prior consent of the Members. 4. That Article VIII, Section 13 of the Agreement shall be renumbered as Section 17. 5. That Article XI, Section 3 of the Agreement shall be amended to read as follows: 2 The financial contributions of the Members in support of the Commission shall be of two types: (1) each Member shall be responsible for its share of the debt service payments on the Commission's Bonds (but only from the Member's franchise fees), which share shall be in the same proportion as the Member's franchise fees for the immediately preceding calendar year were to the total franchise fees receivable by the Commission for that calendar year (the "Debt Service Share "); and (2) each member shall be responsible for its share of the operating and capital costs of the Commission (not including any part of the debt service on the Commission's Bonds), which share shall be in direct proportion to the percent of annual subscriber revenues of each Member to the total annual revenues of the system multiplied by the Commission's annual budget (the "Operating Cost Share "). The annual budget shall establish the contribution of each Member for its Operating Cost Share for the ensuing year. Each Member shall cause its franchise fees to be paid directly to the Commission, and the Commission shall deduct from each Member's quarterly payment of franchise fees, before application to any other purpose, one - fourth of the Member's Debt Service Share for that calendar year. If any Member's quarterly payment of franchise fees is not sufficient to pay its quarterly Debt Service Share, the deficiency will continue to be an obligation of the Member and will be deducted from the next payment or payments of the Member's franchise fees until the deficiency has been restored. After provision is made for payment of the Debt Service Share, the remaining franchise fees shall be applied as a credit against each Member's Operating Cost Share owed the Commission, with any excess being remitted to the Member by the Commission and any shortfall being payable to the Commission by the Member. The remainder of any franchise fee remitted back to the Member by the Commission shall be used for cable - related expenses. Each Member acknowledges that its Debt Service Share of the franchise fee collections will be irrevocably pledged by the Commission as security for the Commission's Bonds. 6. That Article XI, Section 5 of the Agreement shall be amended to read as follows: Section 5. A proposed budget for the operation of the Commission, including the Community Media Center, for each calendar year shall be formulated by the Executive Director under the direction of the Operations Committee and submitted to the Commission on or before July 1 of each year. The Commission shall submit the proposed budget to the Members on or before August 1 of each year. Such budget shall be deemed approved by a Member unless, prior to October 15 preceding the effective date of the proposed budget, the Member gives notice in writing to the Commission that it is withdrawing from the Commission, subject to Article XII, Section 2 of this agreement. Final action adopting a budget for the ensuing calendar year shall be taken by the Commission on or before November 1 of each year. 7. That Article XII, Section 2 of the Agreement shall be amended to read as follows: Section 2. In order to prevent obligation for its Operating Cost Share for the 3 ensuing calendar year, a Member must withdraw from the Commission by filing a written notice with the secretary by October 15 of any year giving notice of withdrawal effective at the end of the calendar year; and membership shall continue until the effective date of the withdrawal. A notice of withdrawal may be rescinded by a Member at any time prior to the effective date of withdrawal. If a Member withdraws before the dissolution of the Commission, the Member shall have no claim against the assets of the Commission, including the right to receive an allocation of franchise fees, except as provided herein. A Member withdrawing after October 15 shall be obligated to pay its entire Operating Cost Share (including any shortfalls) for the ensuing year as outlined in the budget of the Commission for the ensuing year. A withdrawn Member will continue to be responsible for its Debt Service Share (payable only from the withdrawn Member's franchise fees) notwithstanding its withdrawal from the Commission, and shall continue to have its franchise fees paid directly to the Commission until all Bonds have been paid. Any excess of the withdrawn Member's franchise fees over the withdrawn Member's Debt Service Share (and any required Operating Cost Share, if the Member gave notice of withdrawal after October 15 of the preceding calendar year) shall be remitted by the Commission to the withdrawn Member. A Member that has withdrawn from the Commission may, if no Bonds are outstanding, upon request, recover an amount of any equity that exists, as of the withdrawal date, in real property and buildings purchased or constructed with any Bonds, up to (but not exceeding) the Member's individual percentage of total franchise fees paid to all the Members (or their designee) and the withdrawn Member for the calendar year preceding withdrawal. The Commission may, if no Bonds are outstanding, at any time after the withdrawal of a Member as provided for herein, initiate a buy -out of the proportionate equity interest of the withdrawn Member, which interest is to be the withdrawn Member's individual percentage of total franchise fees paid to the Members (or their designee) and the withdrawn Member for the calendar year preceding the buy -out, pursuant to terms and conditions agreed upon by the parties. The amount of any equity distributed to a withdrawn Member will be paid, without interest, on a payment schedule established by the Commission, provided, however, the term of such payment schedule shall not exceed five (5) years. When calculating an equity repayment schedule, the Commission may deduct the withdrawn Member's proportionate share of outstanding indebtedness from the amount of any equity due to the withdrawn Member. Notwithstanding anything to the contrary, a withdrawing Member shall have no claim to the franchise fee the Grantee collected on its behalf for the year in which its withdrawal is effective, except for the reimbursement of cable - related expenses for that year. If no Bonds are outstanding, for the calendar year following withdrawal, and for all subsequent years, the entire franchise fee calculated upon gross revenues attributable to the system within the withdrawn Member shall be paid by Grantee to the withdrawn Member in accordance with the Franchise. 8. That Article XII, Section 1 of the Agreement shall be amended to read as follows: The Commission shall continue for an indefinite term unless the number of 4 Members becomes less than five, and the Commission may also be terminated by mutual agreement of all of the Members at any time; provided that the Commission shall continue to exist as long as any Bonds described in Article VIII, Section 13 of this agreement remain outstanding. • 9. The City understands and agrees that, pursuant to the foregoing amendments of the Agreement, (a) the Commission would be authorized to acquire the land and issue the Bonds for the Project and to proceed with its completion and (b) the City would be obligated to pay its share of the debt service on the Bonds from franchise fees and to continue to do so even if the City might elect to withdraw from the Commission. 10. This paragraph is solely to allow the Bonds initially issued pursuant to Article VIII, Section 13 of the Agreement to be designated as "qualified tax - exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code (the "Code ") in the hope and expectation of achieving thereby certain lower interest rates on the Bonds. For this purpose, it is assumed that the full $2,500,000 of Bonds would be issued in 2003, although the actual amount of Bonds issued may be less, and that each Member City of the Commission would have an allocation of that total bond issue, based on the percentage shares of the members for 2002, as follows: Percentage Allocated Member Share Bond Amount Blaine 52.347% $1,308,675 Centerville 3.567 89,175 Circle Pines 5.001 125,025 Ham Lake 11.696 292,400 Lexington 2.551 63,775 Lino Lakes 16.391 409,775 Spring Lake Park 8.447 211,175 100.00% $2,500,000 This City's allocated bond amount (as provided above) is hereinafter referred to as the City's Bonds, and the City hereby makes the following factual statements and representations: (a) the City hereby designates the City's Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code; (b) the sum of the City's Bonds plus the reasonably anticipated amount of all other tax - exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities subordinate to, or treated as one issuer with, the City) during calendar year 2003 is not expected to exceed $10,000,000; and (c) pursuant to Section 265(b)(3)(C)(iii) of the Code, the City states that it is receiving the benefits from the issuance of the City's Bonds and the City hereby irrevocably agrees (solely for purposes of said Section 265(b)(3) of the Code) with the other Member Cities of the Commission to the foregoing respective allocations of the principal amount of the Bonds and further agrees and finds that said allocation bears a reasonable relationship to the respective benefits received. Nothing in this paragraph is intended or shall be interpreted to limit or alter the respective percentage shares of the Member Cities or their respective allocations of debt service obligations on the Bonds, as those may be determined in accordance with the Agreement for 2003 or any subsequent year. 11. This Resolution, and the amendments made to the Agreement, shall be construed to authorize the Commission to contract for and purchase real estate, as part of the Project. 12. The City officers are authorized to take such actions as may be necessary or desirable to implement the approvals given in this Resolution, including the execution on behalf of the City of an amendment to or an amendment and restatement of the Agreement and, upon request, providing to the Commission or bond counsel for the Bonds certifications of this Resolution or certifications of facts and circumstances of the City as may be pertinent in connection with the issuance of the Bonds. This Resolution shall be effective immediately. Passed and adopted this )1/ f^ day of ATTEST: C,1) C v , 2003. CITY OF LINO LAKES, MINNESOTA By: Its: C,,,c, I wt c M S ev Z a & 1 moved the adoption of the foregoing Resolution, and Councilmember 8e r s u,,._. duly seconded that motion. Upon a vote being taken thereon the following mebers of the Council voted in favor thereof: Ua�1) 8ZDOCS01e 1Z.tinev �\ and the following voted against the same: ANAL• Whereupon said Resolution was declared duly passed and adopted. C4,1S6l.. D ' Ub t' a /f • 6 I, the undersigned, being the duly qualified and acting City Clerk of the City of Lino Lakes, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the City Council duly called and held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a resolution of the Council consenting to the amendment of the joint powers agreement for the North Metro Telecommunications Commission. WITNESS my hand as such City official and the official seal of the City this /5 day of A fr 2003. ajCity Clerk l�-� (SEAL) COUNCIL MINUTES APRIL 14, 2003 City of Lino Lakes al 19 Consider Resolution No. 03 -52 Amending Joint Powers Agreement for Cable Commission, 20 Linda Waite -Smith — City Administrator Waite Smith summarized the staff report. 221 222 Councilmember Dahl moved to Adopt Resolution No. 03 -52 amending the Joint Powers Agreement 223 for North Metro Communications Commission. Mayor Bergeson seconded the motion. 224 225 Motion carried unanimously. 226 227 Resolution No. 03 -52 can be found in the City Clerk's office. 228 229 Consider Resolution No. 03 -51 Calling on the Minnesota Legislature to preserve local 230 government control, Linda Waite -Smith — City Administrator Waite -Smith summarized the staff 231 report. 232 233 Councilmember Dahl asked if this was in regards to the item Andover sent to Lino Lakes. City 234 Administrator Waite -Smith indicated Andover worked with other organizations to develop a 235 resolution to be able to send to the legislature. 236 237 Councilmember Dahl asked if that was what they were voting on tonight. City Administrator Waite - 238 Smith stated they were voting on letting local government maintain control. 239 IF40 Councilmember Dahl expressed concern that this could backfire on them when the State budget is 41 back in sync, at which time the State could say since they wanted to be on their own, they can be. She 242 asked for another example of decisions that would be reversed. City Administrator Waite -Smith 243 stated any decisions regarding budget, if they impose the tax levy restrictions. She explained that 244 what State Legislature is proposing to do is tie their hands so they could not recoup money, and would 245 eventually have to lay off staff to balance the budget. 246 247 Councilmember Reinert asked if the point of what was going on with the levy's being imposed and 248 salary caps was that some cities get a higher percent of their budget from the state, and the intent was 249 that cities would not increase taxes to recoup the loss of funds. 250 251 City Administrator Waite -Smith stated this was sent to the City Council two weeks ago to see if they 252 wanted to approve. It only says Lino Lakes would prefer that decisions that affect local government 253 be left to local government to make. She indicated her example showed an unintended result that 254 would occur by imposing this on all cities. 255 256 Councilmember Reinert stated this was kind of a non -issue for Lino Lakes, since only 2% of their 257 budget came from state funds. City Administrator Waite -Smith disagreed, stating when Target came 258 in, a tax abatement agreement was made, which says Lino Lakes could have a special tax levy to gain 259 the $103,000 per year in tax revenue. That would be lost if the State has their way. 260 261 Councilmember Reinert stated he was all for retaining local government control. 062 6