06-03CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO. 2006-03
RESOLUTION AUTHORIZING CITY STAFF TO ACT ON LETTER OF
CREDIT(S) FOR THAT PLAT KNOWN AS RIVERWOOD NATIONAL
LOCATED IN OTSEGO,MINNESOTA
WHEREAS, in 2004 Otsego City Council approved a PUD known as
RIVERWOOD NATIONAL and entered into a Development Agreement for said
plat with Bulow, Inc. ("Developer"); and
WHEREAS, said Development Agreement requires that Developer is to construct a
wastewater treatment plant ("WWTP") and to establish its operations and to dedicate
the plant to the City for ownership, operation, and maintenance; and
WHEREAS, the Developer and City subsequently entered into an Addendum to
the original Developer's Agreement dated January 25, 2005 extending the time for
performance in construction of the wastewater treatment facility until December
31, 2005; and
WHEREAS, pursuant to that Addendum, Developer was required to post security
in the form of a Letter of Credit to assure construction of the WWTP in the
amount of $1,500,000.00; and
WHEREAS, Developer posted such security in the form of a Letter of Credit and
has posted other Letters of Credit; and
WHEREAS, Developer has not commenced construction of the WWTP; and
WHEREAS, the City has reasonable health safety and welfare concerns for
homes within the subdivision based upon Developer's failure to comply with the
terms and conditions of the original Developer's Agreement as well as the
Addendum; and
WHEREAS, the Letter of Credit currently posted for construction of the
wastewater treatment facility will terminate on January 25, 2006.
NOW, THEREFORE, the City Council of the City of Otsego, Wright County, Minnesota,
hereby resolves:
1. That Developer is in default of its obligations under the Development Agreement for
RIVERWOOD NATIONAL and the Addendum to that Agreement.
2. The City Clerk and City Administrator are hereby authorized, at their discretion, to
exercise any and all rights granted to the City under the applicable Letter of Credit
(or any other available security) up to or above the amount of $1,500,000.00 so that
the City has adequate funds in place to insure that permanent wastewater treatment
facilities are constructed to serve RIVERWOOD NATIONAL.
Motion for adoption of resolution by CM Vem IL�, seconded by
CM Jessica S t o c kamp at the meeting of the Otsego City Council on the 9th day of
January, 2006.
INFAVOR: Mayor Fournier; Councilmembers: Vern Heidner, Dan
Scharber, Jessica Stockamp and Mark Thorsted
OPPOSED: None
2
CITY OF OTSEGO
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