Transportation sales and use tax

You can read more about this tax on the Hennepin County transit improvements page.

RESOLUTION 17-0372

The following resolution was moved by Commissioner Peter McLaughlin and seconded by Commissioner Mike Opat:

WHEREAS, Hennepin County, Minnesota (the “County”) is authorized by Minnesota Statutes, Sections 473.75 through 473.763 (the “Act”), to impose a sales and use tax (the “Sales Tax”) to pay for certain costs associated with the acquisition, construction, financing and long-term use of a ballpark primarily as a venue for major league baseball and to make expenditures and grants for youth activities and amateur sports and extension of library hours in the County.

WHEREAS, the County has heretofore imposed the Sales Tax pursuant to Section 473.757, subdivision 10, of the Act and Ordinance No. 26 (the “Ordinance”) of the County, duly adopted by the Board of Commissioners on August 29, 2006. WHEREAS, the Ordinance imposes upon all sales made on or after January 1, 2007, the Sales Tax in the amount of 0.15% of the gross receipts from the sales at retail and the storage, use, distribution or consumption of goods or services that are taxable pursuant to Minnesota Statutes, Chapter 297A, that occur within the County.

WHEREAS, pursuant to authority granted by Minnesota Statutes, Section 473.757, subdivision 9 of the Act, the County has previously issued its Second Lien Sales Tax Revenue Bonds (Ballpark Project), Series 2008B in the original principal amount of $116,775,000 (the “Series 2008B Bonds”). The Series 2008B Bonds were issued to to finance costs or to make grants to pay or reimburse costs associated with the acquisition, construction, financing and long-term use of a ballpark primarily as a venue for major league baseball and related infrastructure, and to pay costs of issuance of the Series 2008B Bonds.

WHEREAS, the Series 2008B Bonds are special, limited obligations of the County, payable solely from a sales and use tax, less administrative and collection fees of the Minnesota Department of Revenue, plus other moneys pledged therefore authorized by Minnesota Statutes, 473.75 through 473.763, and particularly Section 473.757, subdivision 10, of the Act and the Ordinance.

WHEREAS, the Board of Commissioners deems it necessary and expedient to issue its Third Lien Sales Tax Revenue Refunding Notes (Ballpark Project – Direct Purchase), Series 2017D (the “Refunding Notes”), in an amount of up to $78,000,000, plus costs of issuance and other costs incidental and necessary to further the purposes of the Act, including reserve funds, pursuant to an Indenture of Trust, dated as of May 1, 2007 (the “Original Indenture”), between the County and U.S. Bank National Association, as trustee (the “Trustee”), as amended and supplemented by a First Supplemental Indenture of Trust, dated as of April 1, 2008 (the “First Supplemental Indenture”), between the County and the Trustee; a Second Supplemental Indenture of Trust, dated as of June 1, 2008 (the “Second Supplemental Indenture”), between the County and the Trustee; a Third Supplemental Indenture of Trust, dated as of October 1, 2009 (the “Third Supplemental Indenture”), between the County and the Trustee; a Fourth Supplemental Indenture of Trust, dated as of January 1, 2017 (the “Fourth Supplemental Indenture”), between the County and the Trustee, and a Fifth Supplemental Indenture of Trust which is to be entered into by the County and the Trustee upon the issuance of the Refunding Notes (the “Fifth Supplemental Indenture” and together with the Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “Indenture”), for the purpose of refunding the outstanding Series 2008B Bonds contingent upon favorable market conditions, as determined by the Hennepin County Director of Budget and Finance (the “Director of Budget and Finance”) or the Hennepin County Administrator (the “County Administrator”), as further described below.

BE IT RESOLVED, by the Board of Commissioners of Hennepin County, Minnesota (the “Board”), as follows:

1. Authorization of Refunding Notes. The Board has made all necessary investigation and finds and determines as follows:

(a) The issuance of the Refunding Notes is hereby authorized in accordance with the provisions of the Act, the Indenture, and this resolution.

(b) The Refunding Notes shall be issued in such form, mature on a date or dates, and on such terms, consistent with this resolution, as shall be provided in the Fifth Supplemental Indenture, provided, however, the total principal amount of the Refunding Notes shall not exceed $78,000,000, plus costs of issuance and other costs incidental and necessary to further the purposes of the Act, subject to adjustment for a premium sale price as permitted pursuant to Minnesota Statutes, Section 475.60, and the final maturity of the Refunding Notes shall be not later than December 15, 2027. The County, through the Director of Budget and Finance or the County Administrator, reserves the right to issue the Refunding Notes based on applicable market conditions. (b) Provisions describing the manner in which the variable interest rates on the Refunding Notes shall be determined, the provisions for optional and mandatory tender of the Refunding Notes, the proposed form of the Refunding Notes, provisions relating to registration and transfer of the Refunding Notes, and certain other matters will be set out in the Fifth Supplemental Indenture. The Refunding Notes shall be dated the date of issuance.

(c) The Director of Budget and Finance may permit the Purchaser (as hereinafter defined) to designate any portion of the principal of the Refunding Notes to be combined within one or more term bonds subject to mandatory sinking fund redemption. The Refunding Notes shall be subject to redemption and prior payment at the option of the County as provided in the Fifth Supplemental Indenture, as applicable. Mailed notice of any such redemption shall be given to the registered owners of the Refunding Notes as provided in the Indenture.

(d) The Refunding Notes shall be special, limited obligations of the County, payable solely from the Sales Tax, less administrative and collection fees of the Minnesota Department of Revenue, plus other moneys pledged therefore. The Refunding Notes shall not be payable from any general or other fund of the County, and the Refunding Notes shall not constitute general obligations of the County.

2. Pledge of Sales Tax. The Sales Tax collections authorized by the Ordinance shall be pledged and appropriated to the payment of the Refunding Notes as set forth in the Indenture. The Refunding Notes will be payable and secured (i) ratably and equally and on a parity with any Additional Third Lien Bonds (as defined in the Indenture) issued pursuant to the Indenture and (ii) subordinate to the First Lien Sales Tax Revenue Refunding Bonds (Ballpark Project), Series 2017A, issued pursuant to the Fourth Supplemental Indenture and any Additional First Lien Bonds or Additional Second Lien Bonds (as such terms are defined in the Indenture) issued pursuant to the Indenture, whether issued heretofore and hereafter.

3. Bond Sale. County staff, in consultation with PFM Financial Advisors LLC, Minneapolis, Minnesota (“PFM”), an independent municipal advisor retained by the County, pursuant to Minnesota Statutes, Section 475.60, subdivision 2, paragraph (9), has solicited proposals with respect to the refinancing of the Series 2008B Bonds. The proposal of Wells Fargo Bank, National Association, or one of its affiliates (the “Purchaser”) to purchase the Refunding Notes pursuant to a Continuing Covenant Agreement (the “Continuing Covenant Agreement”) proposed to be entered into with the County is hereby approved.

As authorized by Minnesota Statutes, Section 475.60, this Board hereby delegates to the County Administrator or the Director of Budget and Finance authority to approve the final terms of the Continuing Covenant Agreement, the Fifth Supplemental Indenture, the Escrow Agreement (as hereinafter defined) and any related documents, in consultation with PFM and Dorsey & Whitney LLP, as bond counsel to the County.

5. Bond Counsel. The County has retained the firm of Dorsey & Whitney LLP, Minneapolis, Minnesota, to act as bond counsel to the County with respect to the Refunding Notes.

6. Trustee, Registrar, and Paying Agent. The County hereby retains U.S. Bank National Association, St. Paul, Minnesota, as Trustee under the Fifth Supplemental Indenture and as registrar and paying agent for the Refunding Notes.

7. Use of Proceeds. The proceeds of the sale of the Refunding Notes herein authorized shall be used by the County as follows:

(a) The County will apply proceeds of the Refunding Notes and other available funds, if any, to redeem the outstanding principal amount of the Series 2008B Bonds on the Redemption Date, at par, and to pay any interest due on the Series 2008B Bonds to and including the Redemption Date (as such term is defined in the notice of redemption with respect to the Series 2008B Bonds).

(b) On the date of delivery of the Refunding Notes, any accrued interest received from the purchaser of such Refunding Notes shall be deposited in the Debt Service Fund of that series, to be used to pay interest on the Refunding Notes coming due.

(c) Any remaining proceeds of the Refunding Notes will be used to pay costs of issuance of the Refunding Notes.

8. Redemption of Series 2008B Bonds. The proceeds of the Refunding Notes and such additional sums as may be necessary to accomplish the purposes thereof are hereby appropriated to the purposes specified herein. If the Refunding Notes are issued to refund the Series 2008B Bonds as determined by the Director of Budget and Finance, the Series 2008B Bonds shall be called for prior redemption on the Redemption Date. Notice of such redemption shall be given as provided in the Indenture, and such notice may be given conditionally. If securities are purchased for the redemption of the Series 2008B Bonds, such securities shall be limited to securities specified in Minnesota Statutes, Section 475.67, subdivision 8. Any such securities shall be purchased simultaneously with the delivery of and payment for the Refunding Notes. If any such securities are purchased, the computations evidencing compliance with the arbitrage requirements of Section 148 of the Code and sufficiency of such securities to defease the Series 2008B Bonds shall be verified by certified public accountants selected by the Director of Budget and Finance.

9. Authorization of Documents. In connection with the authorization, issuance and delivery of the Refunding Notes, the officers of the County designated below shall enter into, execute and deliver the following documents, agreements and instruments:

(a) the Fifth Supplemental Indenture, in such form as shall be approved by the officials executing such Fifth Supplemental Indenture, to provide for the issuance of the Refunding Notes and setting forth the terms thereof, by the Chair and the County Administrator;

(b) the Continuing Covenant Agreement in such form as shall be approved by the officials executing such Continuing Covenant Agreement, by the Chair and the County Administrator;

(c) an Escrow Agreement, between the County and U.S. Bank National Association (the “Escrow Agreement”), if determined by the Director of Budget and Finance that an Escrow Agreement would be necessary or desirable, in such form as shall be approved by the officials executing such Escrow Agreement, by the Chair and the County Administrator;

(d) such other documents, agreements or instruments as may be necessary to make covenants and recite facts required to demonstrate the validity and enforceability of the Refunding Notes under the laws of the State of Minnesota and to assure the exclusion of the interest thereon from the gross income of the owners of the Refunding Notes under the Code and to effectuate the terms and intent of this resolution, by the Chair, County Administrator or Director of Budget and Finance.

The execution and delivery of such documents, agreements and instruments is hereby authorized and directed, the documents, agreements and instruments to be in such form and to contain such terms, consistent with this resolution, as the officers of the County designated herein shall determine to be necessary and desirable.

10. Direction to County Officers. The County Administrator is hereby authorized and directed to execute and deliver the Refunding Notes, and the County officers designated in Section 9 above are hereby authorized and directed to execute and deliver the documents as provided in such section. Execution and delivery of such items by the Chair, County Administrator or Director of Budget and Finance shall constitute evidence that such items are consistent with the terms of this resolution and have been duly authorized, executed and delivered by the County and are enforceable against the County in accordance with their terms, subject to customary exceptions relating to bankruptcy, reorganization, insolvency and other laws affecting creditors’ rights. The Chair, County Administrator and Director of Budget and Finance are each further authorized to take such other actions as may be required to effectuate the terms and intent of this resolution, and to prepare and furnish to the purchaser, and to the attorneys approving the Refunding Notes, certified copies of all proceedings and records relating to the issuance of the Refunding Notes and to the right, power and authority of the County and its officers to issue the same, and said certified copies and certificates shall be deemed to be representations of the County as to all matters stated therein.

11. Direction to Controller. The Controller is hereby authorized to transfer and disburse funds as necessary to carry out the intent of this Resolution, and to adjust the debt service budget to reflect the refunding of bonds. The question was on the adoption of the resolution and there were 6 YEAS and 0 NAYS, as follows:

County of Hennepin Board of County Commissioners YEAS: Mike Opat, Linda Higgins, Peter McLaughlin, Debbie Goettel, Jan Callison, Jeff Johnson

ABSENT: Marion Greene

RESOLUTION ADOPTED ON 10/10/2017

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