10-20CITY OF OTSEGO
WRIGHT COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2010-20
RESOLUTION AUTHORIZING DRAW ON LETTER OF CREDIT ISSUED BY
RIVERVIEW COMMUNITY BANK (NOW CENTRAL BANK) ON BEHALF OF
BRUNSWICK OTSEGO LLC REGARDING THE PLAT OF FRIENDSHIP
ADDITION, CITY OF OTSEGO
WHEREAS, Riverview Community Bank has issued a Letter of Credit in the current
amount of $ 183,598.23 to secure obligations of Brunswick Otsego, LLC
(BRUNSWICK)) relevant to the Developers Agreement and addendums between
BRUNSWICK and the City of Otsego (CITY) for that development known as
FRIENDSHIP ADDITION; and
WHEREAS, said Letter of Credit is due to expire on August 24, 2010; and
WHEREAS, certain assessments for public improvements installed by CITY pursuant to
the Developer's Agreement between the CITY and BRUNSWICK have not been timely
paid; and
WHEREAS, CITY has determined that it is crucial that these items be paid for at this
time since the CITY has bonded for said improvements and owes for debt service
payments on the underlying bonds; and
WHEREAS, the Developers Agreement requires that a Letter of Credit remain in place
at all times to cover payment of assessments as they become due ; and
WHEREAS, the obligations of BRUNSWICK are currently being undertaken by a Court
appointed receiver; and
WHEREAS, the City has completed all public improvements including sanitary sewer,
water, storm sewer and road within the Plat substantially and has issued bonds for said
public improvements; and
WHEREAS, the bonds are to be repaid based upon assessments against the property as
agreed upon by BRUNSWICK and which have been certified against the property by the
CITY; and
WHEREAS, the CITY currently has payments due on the bonds and has received no
payments of the special assessments from the property; and
WHEREAS, the Letter of Credit was issued by Riverview Community Bank which has
since been taken over by Central Bank, which inherits the obligations of Riverview
Community Bank under the Letter of Credit; and
WHEREAS, the CITY needs to draw the available funds at this time in order to proceed
to make payments on debt service..
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Otsego,
Wright County, Minnesota as follows:
1. City staff are hereby directed to immediately draw the full amount of the Letter of
Credit ($183,598.23) issued by Riverview Community Bank which was
subsequently taken over by Central Bank.
2. The money received from the draw will be used to pay off debt service for bonds
issued to fund public improvements within Friendship Addition completed by
CITY and petitioned for by BRUNSWICK.
ADOPTED this 12th day of July, 2010 by the Otsego City Council.
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OPPOSED: NONE
0
CITY OF OTSEGO
Tami Loff, C Clerk