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cp07-27-1982 c1JTCHINSON CITY CALENDAR ] '.JEEI< OF July 25 TO July 31 °L► � e VJEDNESDAY -28- I* SUNDAY -25- THURSDAY -29- MONDAY -26- Noon - Safety Council Meeting at Fire Hall 2:00 P.M. - Utilities Commissioi Meeting at Utilities Office FRIDAY -30- VACATIONS: Kenneth Merrill - July 28 - August 4 Dick Nagy - July 26 -30 TUESDAY -27- 4:00 P.M. - City Council Meet- ing with Clerical Workers at City Ha l 7:30 P.M. - City Council Mtg. SATURDAY -31- • • AGENDA REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, JULY 27, 1982 ✓ 1. Call Meeting to Order - 7:30 P.M. ,/2. Invocation - Reverend Robert Lounsbury 3. Consideration of Minutes - Bid Openings of July 8, 1982, July 13, 1982 and July 15, 1982; Special Meetings of July 9, 1982 and July 15, 1982; Regular Meeting of July 13, 1982 Action - Motion to approve - Motion to approve as amended 4. Public Hearin4 - 8:00 P.M. ,/(a) Consideration of Issuance of "On Sale" Intoxicating Liquor License to Jim McClure, Owner of LeBistro Cafe of Hutchinson, Inc. Action - Motion to close hearing - Motion to reject - Motion to approve application and issue license 5. Communications Requests and Petitions ✓(a) Consideration of Request for Reduced Trash and Refuse Rate by Mabel Rannow Action - Motion to approve - Motion to reject J(b) Consideration of Request by Hutchinson wrestling Association to Use Civic Arena on August 14, 1982 Action - Motion to approve - Motion to reject /(c) Consideration of Request for Additional Street Lighting at Lynn's Auto Sales by Lynn Gernand Action - Motion to reject - Motion to approve and refer to Hutchinson Utilities 6. Resolutions and Ordinances ,/(a) Ordinance No. 8/82 - An Ordinance Amending Parking Ordinance, Section 700: 169.34, Subd. 10 for Fire Station Action - Motion to reject - Motion to waive second reading and adopt COUNCIL AGENDA JULY 27, 1982 7. Reports of Officers, Boards and Commissions ,/(a) Monthly Financial Report - June 1982 Action - Order by Mayor received for filing ✓(b) Minutes of Planning Commission dated June 15, 1982 Action - Order by Mayor received for filing ✓(c) Minutes of Tree Board dated June 2, 1982 Action - Order by Mayor received for filing ✓(d) Minutes of Park and Recreation Board dated June 9, 1982 Action - Order by Mayor received for filing 8. Unfinished Business ✓(a) Consideration of Dental Group Insurance Policy Renewal / Action - Motion to reject - Motion to approve renewal p'(b) Consideration of First Avenue Southwest, Nemitz Property (DEFERRED 7- 13 -.82) Action - /(c) Consideration of Change Order No. 3 for Hutchinson Fire Station with recommendation of Fire Department: (DEFERRED JULY 13, 1982) 1. $250 Deletion of Wall Covering Mural 2. $252.09 Addition for Fire Sprinkler Light and Moving Telephone Action - Motion to approve - Motion to reject ✓(d) Consideration of Final Pay Requests on Fire Station Submitted by Korngiebel Architects (DEFERRED JULY 13, 1982) Action - Motion to approve - Motion to reject J(e) Discussion of the Sale and Development Agreement Between City of Hutchinson and Hutchinson S &L Rehab, Limited Partnership (Requested by Alderman Mlinar and Alderman Beatty) Action - -2- 0 0 COUNCIL AGENDA JULY 27, 1982 9. New Business ✓(a) Consideration of Application by Hutchinson Jaycees for "On Sale" Non - Intoxicating Malt Liquor License for Softball Tournament on July 31 and August 1, 1982 Action - Motion to reject - Motion to approve and issue license J(b) Consideration of Request for Variance submitted by Linda Peterson with unfavorable recommendation of Planning Commission Action - Motion to reject - Motion to approve J(c) Consideration of Request for Amendment to Zoning Ordinance No. 464 submitted by City Staff with favorable recommendation of Planning Commission Action - Motion to reject - Motion to approve amendment - Motion to waive first reading of Ordinance and set second reading for August 10, 1982 J(d) Consideration of Approval of Final Plat for Wright Estates with favorable recommendation of Planning Commission Action - Motion to approve - Motion to reject J(e) Consideration of Preliminary Plat for Prieve Estates with favorable recommendation of Planning Commission Action - Motion to approve - Motion to reject ,J(f) Consideration of Removal of Old Alley Entrance Action - Motion to approve - Motion to reject 4g) Consideration of Replacement of Line to Well No. 6 at Water Treatment Plant Action - Motion to reject - Motion to approve replacement Ah) Consideration of HAVTI Work Study Agreement for 1982 -83 School Year Action - Motion to reject - Motion to approve and enter into agreement k 11c-t , (i) Consideration of Cutting of Fence at 229 Fifth Avenue Northwest- Action - -3- COUNCIL AGENDA JULY 27, 1952 �,(,(j Review of Loan Agreement for S &L Project Action - (k) 'i)Review of Pledge Agreement for S &L Project Action - �/ 1 A ; (1�� Review of Construction Loan Agreement for S &L Project w Action - (m)3 Review of Combination Mortgage and Security Agreement and Fixture Financing Statement for S &L Project Action - i1 (n)ieview of Assignment of Rents and Leases Action - (o)O.d Review of Form of Resolution Action - Ap) Consideration of Cutting of Grass on McLeod County Fair Grounds Action - V(q) Consideration of Eheim Park Renovation Action - Motion to approve - Motion to reject J(r) Consideration of Purchase of Bleachers Action - Motion to approve - Motion to reject ,(s) Review of Proposed Layouts for Off- Street Parking at Hassan Street, Third Avenue Southeast and Main Street Surrounding the Famith Properties (Requested by Alderman Mlinar and Alderman Beatty, with Mr. Richard Smith present) Action - -4- COUNCIL AGENDA JULY 27, 1982 J(t) Review of the Status of the Proposed Options for Off- Street Parking Lots (Requested by Alderman Mlinar and Alderman Beatty) Action - ,(u) Review of the Status of the Off- Street Parking Fund by City Accountant Action - ,. (v) Discussion In Connection with Use of City Vehicles (Requested by Mayor) Action - f(w) Discussion of Parking Assessment Plan (Requested by Mayor) Action J(x) Consideration of Delinquent Water and Sewer Accounts Action - Motion to authorize extension of payment period - Motion to authorize discontinuation of service 10. Miscellaneous .f (a) Communications from City Administrator 11. Claims Appropriations and Contract Payments (a) Verified Claims Action - Motion to reject - Motion to approve and authorize payment 12. Adjournment 0 0 MINUTES BID OPENING THURSDAY, JULY 8, 1982 The bid opening was called to order by Vice -Mayor Gruenhagen at 2:05 P.M. Present were: Alderman John Mlinar, Alderman Mike Carls and Vice -Mayor Kenneth Gruenhagen, and City Administrator Gary D. Plotz. City Administrator Plotz presented background information on previous bids received on June 21, 1982 for the repair of the Old Armory Building. He then read a copy of the letter mailed to local contractors. The following bids were opened and read: Miller, Miller & Mac $149,500.00 Includes ramps but not ele- Hutchinson, MN vator or demolition of bal- cony; $25,000.00 additional cost for elevator. Quade's Inc. 4,935.00 Exit Lights, Emergency Lights, Hutchinson, MN and Outlets for Office only. Richard Larson (ESTIMATE) 201,760.00 Work to be done on time and Hutchinson, MN materials basis. Elevator or ramp to basement from main floor. There being no further business, the bids were referred to the Old Armory Committee for review and advisement. The meeting adjourned at 2:15 P.M. MINUTES SPECIAL MEETING - HUTCHINSON CITY COUNCIL FRIDAY, JULY 9, 1982 The special meeting was called to order by Mayor DeMeyer at 7:00 A.M. Present were: Alderman Mike Carls, Alderman John Mlinar, Alderman Ted Beatty, and Mayor James G. DeMeyer. Absent: Alderman Kenneth Gruenhagen. Also present: City Admin- istrator Gary D. Plotz. Mayor DeMeyer introduced the topic of whether or not to invite Attorney Jerry Ma- honey of the Dorsey law firm to attend the July 13, 1982 City Council meeting. The Mayor stated he was opposed to bringing out the Dorsey law frim on July 13. Alderman Mlinar stated that he felt it would be a good idea inasmuch as there might be some follow -up questions or clarification needed of past questions. City Administrator Plotz stated that Attorney Mahoney was contacted and informed him that the charge would be $500.00 for Mahoney attending the meeting on July 13, 19 82 . -- After much discussion, the motion was made by Alderman Carls, seconded by Alder- man Mlinar, to request Attorney Mahoney to attend the City Council meeting of July 13, 1982. Roll call vote was taken. Aldermen Carls, Mlinar and Beatty voted aye, and Mayor DeMeyer voted nay. The motion carried. Motion was made by Alderman Beatty, seconded by Alderman Carls, to adjourn the meeting at 8 :00 A.M. • • MINUTES BID OPENING TUESDAY, JULY 13, 1982 The bid opening was opened by Administrative Secretary Marilyn Swanson at 2:00 P.M. Present were: Administrative Secretary Marilyn Swanson and Recreation Supervisor John MCRaitb. Publication No. 2968, Advertisement for Bids, Ball Field Lighting (2 Fields), Fred Roberts Park, was read by Administrative Secretary Swanson. The following bids were then opened: Wagoner Electric Company, Inc. Litchfield, MN $21,385.00 Quade's, Inc. Hutchinson, MN A & B Electric Hutchinson, MN 22,745.00 24,893.00 There being no further business, the bids were referred to City staff for review and recommendation. The meeting adjourned at 2:03 P.M. ' MINUTES SPECIAL MEETING - HUTCHINSON CITY COUNCIL THURSDAY, JULY 15, 1982 Vice -Mayor Gruenhagen called the special meeting to order at 7:00 A.M., with the following present: Alderman Mike Carls, Alderman John Mlinar, Alderman Ted Beatty, and Vice -Mayor Gruenhagen. Absent: Mayor James G. DeMeyer. Also present: City Administrator Gary D. Plotz, and Developer Jim McClure, and City Atty. Jim Schaefer. The Vice -Mayor stated the purpose of the meeting was to review the proposed agree- ment between the City of Hutchinson and Hutchinson S &L Rehab, Limited Partnership. Vice -Mayor Gruenhagen had stated that he felt there should be an additional guar- antee to the City in the event the proposed building was not constructed pursuant to the contract. It was pointed out that the City would be receiving $70,000.00 from the Hutchinson S &L Rehab, Limited Partnership at the time of the closing. It was furthermore suggested that an additional $90,000.00 guarantee to the City may be advantageous; as an option agreement with Park Square Company, General Partnership of Ronald J. McGraw and Edward McCormick, is for a total of $160,000.00. A motion was made by Alderman Mlinar, seconded by Alderman Beatty, to give approval of the Sale and Development Agreement relating to Development District No. 4, City of Hutchinson, McLeod County, Minnesota by and between City of Hutchinson, Minnesota and Hutchinson S &L Rehab, Limited Partnership, A Minnesota Limited Partnership, con- tingent upon City Attorney Schaefer contacting the Dorsey law firm to determine the validity of the City of Hutchinson obtaining additional security for the difference ($90,000.00) between the purchase price of the property and the sale to Hutchinson S &L Rehab, Limited Partnership. After discussion, the motion unanimously approved. Motion was made by Alderman Beatty and seconded by Alderman Carls that final ap- proval.of Sale and Development Agreement not be made until receipt of a final ans- wer from the Dorsey law firm on the additional security for the difference between the purchase price of the property and the sale to Hutchinson S &L Rehab, Limited Partnership. After discussion, motion unanimously approved. Motion was made by Alderman Beatty, seconded by Alderman Mlinar, to enter into nego- tiations to extend the option contract between the City of Hutchinson and Park Square Company,for 90 days from the date of expiration of the existing agreement. Motion unanimously approved. City Administrator Plotz requested that the minutes relfect the acknowledgement of receipt of the Limited Partnership Agreement and Certificate of Limited Partnership of Hutchinson S &L Rehab, Limited Partnership that was delivered at the start of the regular City Council meeting on Tuesday, July 13, 1982. He stated that copies would be made upon request to the Mayor and City Council and the document is available for public inspection. Motion was made by Alderman Beatty, seconded by Alderman Mlinar and unanimously car- ried to adjourn at 8:45 A.M. MINUTES BID OPENING THURSDAY, JULY 15, 1982 The bid opening was opened by Administrative Secretary Marilyn Swanson at 2:00 P.M. Present were: Administrative Secretary Marilyn Swanson and Fire Marshal George Field. The letter mailed to contractors for estimates on the demolition of the Old Armory Building was reviewed by Mrs. Swanson. The following bids were then opened and read: Ed Rettman Jr. Excavating Darwin, MN Kennedy Excavating Co. Benson, MN Erickson & Templin Contracting Hutchinson, MN Juul Contracting Hutchinson, MN $26,564.00 - Base Bid 2,405.00 - Item No. 1 13,595.00 - Item No. 2 42,564.00 - Total 28,000.00 - Base Bid 4,900.00 - Item No. 1 8,500.00 - Item No. 2 41,400.00 - Total 30,000.00 - Base Bid 1,500.00 - Item No. 1 10,000.00 - Item No. 2 41,500.00 - Total 32,500.00 - Base Bid 2,000.00 - Item No. 1 12,500.00 - Item No. 2 47,000.00 - Total There being no further business, the bids were referred to the Old Armory Research Committee and City staff for review. The bid opening adjourned at 2:10 P.M. r] 6 MINUTES REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, JULY 13, 1982 1. CALL TO ORDER The meeting was called to order by Mayor DeMeyer at 7:30 P.M., with the follow- ing present: Alderman Mike Carls, Alderman John Mlinar, Alderman Kenneth Gruen - hagen, Alderman Ted Beatty, and Mayor James G. DeMeyer. Absent: None. Also present: City Administrator Gary D. Plotz, City Attorney James Schaefer and City Engineer Marlow V. Priebe. 2. INVOCATION The invocation was given by the Reverend Robert Lounsbury. 3. MINUTES The minutes of the Bid Openings of June 21, 1982, Regular Meeting of June 22, 1982, and Special Meetings of June 29, 1982 and July 7, 1982 were approved as presented on a motion by Alderman Ted Beatty, seconded by Alderman John Mlinar and unanimously carried. 4. PUBLIC HEARING - 8:00 P.M. (a) INDUSTRIAL REVENUE BOND /NOTE FOR REHABILITATION AND RENOVATION OF S &L PROJECT Mayor DeMeyer read Publication No. 2967, Notice of Public Hearing On A Proposed Project and the Issuance of Industrial Development Revenue Bonds Under the Municipal Industrial Development Act, Minnesota Statutes, Chap- ter 474, As Amended. There was no discussion, and the motion was made by Alderman Beatty to close the hearing at 8:01 P.M. Seconded by Alderman Mlinar, the motion carried unanimously. (b) ASSESSMENT ROLLS NO. 125 -151 FOR 1981 1. ROLL NO. 125 Mayor DeMeyer read Publication No. 2939, Notice of Hearing on Proposed Assessment, Assessment Roll No. 125, Project 82 -01. He then asked if there was anyone present wishing to be heard. No one responded. 2. ROLL NO. 126 Mayor DeMeyer read Publication No. 2940, Notice of Hearing on Proposed Assessment, Assessment Roll No. 126, Project 82 -03. There was no one present to be heard. 19 COUNCIL MINUTES JULY 13, 1982 3. ROLL NO. 127 Mayor DeMeyer read Publication No. 2941, Notice of Hearing on Proposed Assessment, Assessment Roll No. 127, Project No. 82 -04. No one was present wishing to be heard. 4. ROLL NO. 128 Mayor DeMeyer read Publication No. 2942, Notice of Hearing on Proposed Assessment, Assessment Roll No. 128, Project 82 -05. No one was present to be heard. 5. ROLL NO. 129 Mayor DeMeyer read Publication No. 2943, Notice of Hearing on Proposed Assessment, Assessment Roll No. 129, Project 82 -06. There was no one present to be heard. 6. ROLL NO. 130 Mayor DeMeyer read Publication No. 2944, Notice of Hearing on Proposed Assessment, Assessment Roll No. 130, Project 82 -07. No one was present wishing to be heard. 7. ROLL NO. 131 Mayor DeMeyer read Publication No. 2945, Notice of Hearing on Proposed Assessment, Assessment Roll No. 131, Project 82 -08. No one was present to be heard. 8. ROLL NO. 132 Mayor DeMeyer read Publication No. 2946, Notice of Hearing on Proposed Assessment, Assessment Roll No. 132, Project 82 -09. There was no one present to be heard. 9. ROLL NO. 133 Mayor DeMeyer read Publication No. 2947, Notice of Hearing on Proposed Assessment, Assessment Roll No. 133, Project 82 -10. No one was present wishing to be heard. 10. ROLL NO. 134 Mayor DeMeyer read Publication No. 2948, Notice of Hearing on Proposed Assessment, Assessment Roll No. 134, Project 82 -11. No one was present to be heard. -2- 0 0 COUNCIL MINUTES JULY 13, 1982 11. ROLL NO. 135 0 Mayor DeMeyer read Publication No. 2949, Notice of Hearing on Proposed Assessment, Assessment Roll No. 135, Project 82 -15. There was no one present to be heard. 12. ROLL NO. 136 Mayor DeMeyer read Publication No. 2950, Notice of Hearing on Proposed Assessment, Assessment Roll No . 136, Project 82 -16. No one was present to be heard. 13. ROLL NO. 137 Mayor DeMeyer read Publication No. 2951, Notice of Hearing on Proposed Assessment, Assessment Roll No. 137, Project 82 -17. No one was present wishing to be heard. 14.. ROLL NO. 138 Mayor DeMeyer read Publication No. 2952, Notice of Hearing on Proposed Assessment, Assessment Roll No. 138, Project 82 -19. There was no one present to be heard. 15. ROLL NO. 139 Mayor DeMeyer read Publication No. 2953, Notice of Hearing on Proposed Assessment, Assessment Roll No. 139, Project 82 -20. No one was present to be heard. 16. ROLL NO. 140 Mayor DeMeyer read Publication No. 2954, Notice of Hearing on Proposed Assessment, Assessment Roll No. 140, Project 82 -21. No one was present wishing to be heard. 17. ROLL NO. 141 Mayor DeMeyer read Publication No. 2955, Notice of Hearing on Proposed Assessment, Assessment Roll No. 141, Project 82 -22. There was no one present to be beard. 18. ROLL NO. 142 Mayor DeMeyer read Publication No. 2956, Notice of Hearing on Proposed Assessment, Assessment Roll No. 142, Project 82 -24. No one was present to be heard. -3- COUNCIL MINUTES JULY 13, 1982 19. ROLL NO. 143 Mayor DeMeyer read Publication No. 2957, Notice of Hearing on Proposed Assessment, Assessment Roll No. 143, Project 82 -25. No one was present wishing to be heard. 20. ROLL NO. 144 Mayor DeMeyer read Publication No. 2958, Notice of Hearing on Proposed Assessment, Assessment Roll No. 144, Project 82 -26. There was no one present to be heard. 21. ROLL NO. 145 Mayor DeMeyer read Publication No. 2959, Notice of Hearing on Proposed Assessment, Assessment Roll No. 145, Project 82 -27. No one was present to be heard. 22. ROLL NO. 146 Mayor DeMeyer read Publication No. Assessment, Assessment Roll No. 146, wishing to be heard. 23. ROLL NO. 147 2960, Notice of Hearing on Proposed Project 82 -28. No one was present Mayor DeMeyer read Publication No. 2961, Notice of Hearing on Proposed Assessment, Assessment Roll No. 147, Project 82 -32. Mr. Duane Dickey, President of DuMax, Inc., requested that the 13 lots known as Town & Country Estates be permitted to privately contract the bituminous street surfacing and appurtenances for improvement projects 82 -32 and 82 -33, Assessment Rolls No. 147 and 148. Further, DuMax, Inc. has provided a guarantee that the street improvements in Town & Coun- try Estates would be provided according to City requirements at no ad- ditional cost to the purchasers and has escrowed funds in a local bank for this purpose. It was requested these two projects be deleted from the assessment rolls. 24. ROLL NO. 148 Mayor DeMeyer read Publication No. 2962, Notice of Hearing on Proposed Assessment, Assessment Roll No. 148, Project 82 -33. It was requested this improvement project be deleted from the assess- ment rolls. (See above Roll No. 147.) -4- El COUNCIL MINUTES JULY 13, 1982 25. ROLL NO. 149 E Mayor DeMeyer read Publication No. 2963, Notice of Hearing on Proposed Assessment, Assessment Roll No. 149, Project 82 -37. There was no one present to be heard. 26. ROLL NO. 150 Mayor DeMeyer read Publication No. 2964, Notice of Hearing on Proposed Assessment, Assessment Roll No. 150, Project 82 -38. No one was present wishing to be heard. 27. ROLL NO. 151 Mayor DeMeyer read Publication No. 2965, Notice of Hearing on Proposed Assessment, Assessment Roll No. 151, Project 82 -47. No one was present to be heard. City Attorney Schaefer commented that inasmuch as the bonds for the 1982 improvement projects have not been sold, the interest rate on the assess- ment rolls is not a firm figure. Therefore, it was his recommendation to continue the hearings until such time as the data was available. Alderman Carls moved to adjourn the hearings until the next City Council meeting. Motion seconded by Alderman Mlinar. Alderman Carls then amended his motion to continue the public hearings until August 10, 1982, with the deletion of Projects 82 -32 and 82 -33 from Assessment Rolls No. 147 and 148. Alderman Mlinar seconded the motion, and it carried, with Alderman Gruen - hagen abstaining from voting. 5. COMMUNICATIONS, REQUESTS AND PETITIONS (a) CONSIDERATION OF REQUEST FOR USE OF CITY SIDEWALKS FOR CRAZY DAYS ON JULY 21, 1982 Following discussion, it was moved by Alderman Gruenhagen, seconded by Alderman Beatty, to authorize the use of City sidewalks for Crazy Days. Motion unanimously approved. (b) PRESENTATION ISE ED EAST HIGHLAND PARK REQUI EHUTTCHNONTTECHNOLOGYTOINSTALL AFENCEAND OR AEAT NORTH END OF EAST HIGHLAND PARK DRIVE It was reported that a meeting was held at Hutchinson Technology on July 12, 1982 between East Highland Park Drive residents and Hutchinson Tech- nology representatives to reach an agreement concerning East Highland Park Drive. Discussion was given to stopping through traffic on East Highland Park Drive while assuring future public access to Hutchinson Technology -5- COUNCIL MINUTES JULY 13, 1982 property should the company lose its lease to provide access now on West Highland Park Drive. An agreement was reached to put up a temporary bar- rier to meet the Fire Department requirements. Mr. Lyle Emme, representing the residents of East Highland Park Drive, stated their concern was in the wording "should we (Hutchinson Technology) lose the lease that provides access now on West Highland Park Drive." Mr. Bill Craig, Hutchinson Technology, stated the company had no control over the lease, but they have no intention to give up the lease. They would be agreeable to signing a letter of intent. An inquiry was made regarding the status of the street and if it would be extended through. In response, the City Engineer reported that East High- land Park Drive is a public street up to the north line of Hutchinson Cor- poration Second Addition, as well as in the Second Addition. The street, ends at the south line,and the property is undeveloped. In addition, Hack - berry Avenue was vacated with the Second Addition; south of Hackberry, East Highland Park Drive was not vacated. The company's plan was for a parking lot, at their expense. Mr. Craig stated Hutchinson Technology was putting in a parking lot at their expense. He further offered to pursue vacation of property if it would re- solve anything and volunteered to work with the City Engineer in finding answers to questions regarding the street. The Mayor directed City Engineer Priebe to prepare a copy of the platted map for any concerned resident. Alderman Gruenhagen commented the street was put in for future development, and therefore, he didn't think the City would want to vacate it. However, a temporary barrier would be a good idea. It was moved by Alderman Gruenhagen that Hutchinson Technology be authorized to put up a temporary barrier as stated just as soon as possible. Seconded by Alderman Mlinar, the motion carried unanimously. (c) CONSIDERATION OF REQUEST FOR MARK SCHNOBRICH TO ATTEND DNR LOG SCALING SCHOOL AUGUST 18 -20, 1982 Following discussion, Alderman Mlinar moved to authorize Mark Schnobrich to attend the DNR Log Scaling School. The motion was seconded by Alderman Carls and unanimously carried. 6. RESOLUTIONS AND ORDINANCES (a) ORDINANCE NO. 7/82 - AN ORDINANCE AMENDING ORDINANCE NO. 464 CONCERNING ZONING REGULATIONS IN THE CITY OF HUTCHINSON AND THE OFFICIAL ZONING MAP is -6 0 0 COUNCIL MINUTES JULY 13, 1982 0 After discussion, it was moved by Alderman Carls, seconded by Alderman Beatty and carried unanimously, to waive the second reading and adopt Or- dinance No. 647 entitled An Ordinance Amending Ordinance No. 464 Concerning Zoning Regulations In the City of Hutchinson and the Official Zoning Map. (b) RESOLUTION NO. 7199 - ,ACCEPTING $62,500 FROM THE HUTCHINSON UTILITIES COMMISSION Following discussion, Alderman Gruenhagen moved to waive reading and adopt Resolution No. 7199 entitled Accepting $62,500 from the Hutchinson Utilities Commission. Seconded by Alderman Beatty, the motion carried unanimously. (c) RESOLUTION NO. 7200 - RESOLUTION OF APPRECIATION - GRACE SANSTEAD After discussion and the reading of the Resolution, the motion was made by Alderman Carts to adopt Resolution No. 7200 entitled Resolution of Ap- preciation for Grace Sanstead. Motion seconded by Alderman Beatty and unanimously approved. (d) RESOLUTION NO. 7232 - TRANSFERRING $10,000 FROM LIQUOR STORE TO GENERAL FUND Following discussion, the motion was made by Alderman Gruenhagen, seconded by Alderman Beatty, to waive reading and adopt Resolution No. 7232 entitled Transferring $10,000 from Liquor Store to General Fund.. Motion unanimously carried. 7. REPORTS OF OFFICERS BOARDS AND COMMISSIONS (a) BUILDING OFFICIAL'S MONTHLY REPORT - JUNE 1982 There being no discussion, the report was ordered by the Mayor to be re- ceived for filing. (b) MINUTES OF NURSING HONE BOARD DATED MAY 20, 1982 There being no discussion, the minutes were ordered by the Mayor to be re- ceived for filing. (c) MINUTES OF HOSPITAL BOARD DATED MARCH 13, 1982; MARCH 16, 1982; APRIL 20, 1982; AND MAY 18, 1982 There being no discussion, the minutes were ordered by the Mayor to be re- ceived for filing. -7- COUNCIL MINUTES JULY 13, 1982 8. UNFINISHED BUSINESS (a) CONSIDERATION OF REQUEST FOR INCREASED RESIDENTIAL AND COMMERCIAL REFUSE RATES BY JULY 1, 1982 FROM JUNKER SANITATION (DEFERRED JUNE 22, 1982) Messrs. Jim, Rick and Neil Junket and Attorney Lee LaBore were present. Atty. LaBore represented Junket Sanitation. He stated that in 1980 the expired contract between the City and Junket Sanitation was renewed by the Council. It was requested that a 45fi per month increase for residential service and $1.00 per month per container on commercial accounts be grant- ed, with an effective date of July 1, 1982. It was pointed out there had been a 10% per cubic yard increase from the McLeod County Landfill, effec- tive May 1, 1982. This requested amount would represent a 6% increase. Mr. Lowell Baumetz stated he objected to the $5.75 token charge for a pick- up service he didn't want or need. He further pointed out the towns of Cokato, Dassel and Litchfield have unlimited refuse pickup at a charge of $4.00 per house. It was public opinion that this item should be open for a re -bid and should be looked into further. Mr. Gordon Hedlund, owner of the Country Club Terrace, commented he also objected to the charges for service. He felt he should have the right to do business with someone else. Alderman Beatty reported there were objections in 1980 when the Junker con- tract expired. It was put out for bids, and Junket Sanitation was the top bidder. Therefore, the contract was renewed with the company. The Board of Review was discussed, and Alderman Mlinar felt it should be made use of for people to air their complaints. City Administrator Plotz commented that the City has a policy not to bill citizens for retro- active costs. The new rates would have to be put into the computer, and the time frame when this could be done would become the effective date for the increase. Alderman Beatty moved to grant the residential increase of 45c and $1.00 increase per container on commercial accounts. Motion died for lack of a second. Motion by Alderman Gruenhagen to increase residential 25� per month and accept schedule of $1.00 per container for commercial accounts, effective at the earliest time possible. Seconded by Alderman Carls, with Aldermen Carls, Mlinar, Gruenhagen and Beatty voting aye and Mayor DeMeyer voting nay. Motion carried. The motion was made by Alderman Gruenhagen to have a review time set aside -8- 0 COUNCIL MINUTES JULY 13, 1982 0 for commercial accounts to negotiate with the hauler. Seconded by Alder- man Mlinar and carried unanimously. (b) CONSIDERATION OF FIRST AVENUE SOUTHWEST, NEMITZ PROPERTY (DEFERRED JUNE 22, 1982) City Engineer Priebe reported he had discussed the estimated repair costs for the Nemitz property with Mr. Art Benjamin Jr. A decision needs to be made regarding the sidewalk so it can be added to the improvement projects, if necessary. In the absence of Mr. Benjamin at the Council meeting, the motion was made by Alderman Carls to defer this item until the next Council meeting. Sec- onded by Alderman Mlinar and unanimously carried. (c) CONSIDERATION OF REQUEST FOR CONDITIONAL USE PERMIT SUBMITTED BY MR. HOVERSTEN /MR. CORNELL WITH FAVORABLE RECOMMENDATION OF PLANNING COMMISSION (DEFERRED JUNE 22, 1982) Mr. Jim Fahey, Fahey Sales Agency Inc., appeared on behalf of Mr. Duane Hoversten and Mr. Gerald Cornell. He reported the 1968 deferred assess- ments on the property at Third Avenue Northwest and Highway 7 amounted to $1,068.00, with $888.72 in interest, for a total of $1,956.72. The appli- cants were agreeable to deeding the street over to the City in return for a waiver of interest on the deferred assessments; they would pay the prin- cipal. City Engineer Priebe reported Third Avenue had been a county road, a state highway, and now a City street. He also pointed out the Planning Commis- sion had recommended three setback contingencies for the Conditional Use Permit. During discussion, it was the consensus of the Council that the City could not negotiate with the applicants, and they would have to pay the full amount due on deferred assessments. Alderman Carls moved to waive reading and adopt Resolution No. 7197 entitled Resolution Granting Conditional Use Permit Under Section 6.07, C.5 of Zon- ing Ordinance No. 464 to Allow Construction of Metal Type Building for Of- fice /Warehouse Use Located In IC -1 Zone, with three contingencies, and al- low six months for a response from the applicants. Seconded by Alderman Mlinar, the motion carried unanimously. (d) CONSIDERATION OF PARKING OPTION FOR FIRST STATE FEDERAL PROPERTY, PARCELS A & B COUNCIL MINUTES JULY 13, 1982 Alderman Carls moved to defer this item until later in the meeting. The motion was seconded by Alderman Beatty and unanimously carried. (e) CONSIDERATION OF AWARDING OF BIDS FOR LETTINGS NO. 1 -5, 1982 IMPROVEMENT PROJECTS (DEFERRED JUNE 21, 1982) City Engineer Priebe reported on the bids received for the 1982 improvement projects. He pointed out that the amount bid for Letting No. 3 would be reduced by $50,000.00 with the deletion of Projects 82 -32 and 82 -33. It was his recommendation to award the bids to the following: Letting No. 1 - Kuemper, Inc. $ 45,476.00 Letting No. 2 - Juul Contracting Co. 102,516.45 Letting No. 3 - Buffalo Bituminous, Inc. 98,222.50 Letting No. 4 - Juul Contracting Co. 22,785.50 Letting No. 5 - Juncewski Masonry 42,215.00 Following discussion, it was moved by Alderman Gruenhagen, seconded by Alderman Beatty, to award bids for Lettings No. 1 -5 for 1982 improvement projects to the above named. Motion unanimously approved. Alderman Mlinar made the motion to waive readings and adopt Resolutions No. 7227 through No. 7231 entitled Resolution Accepting Bid and Awarding Contract. Seconded by Alderman Beatty, the motion carried unanimously: (f) CONSIDERATION OF PARKING ORDINANCE, SECTION 700:169.34, SUBD. 10 FOR FIRE STATION The City Attorney explained that the Parking Ordinance for the fire station applied to the new location of the station. In checking the parking situa- tion, it was felt that perhaps there was too much space, and the area across from the fire station was not needed. It was, therefore, suggested to amend the Ordinance. After discussion, Alderman Beatty moved to waive first reading of Ordinance No. 8/82 entitled An Ordinance Amending Parking Ordinance, Section 700:169. 34, Subd. 10 for Fire Station, and set second reading for July 27, 1982. The motion was seconded by Alderman Mlinar and unanimously approved. (g) DISCUSSION OF QUESTIONS SUBMITTED TO DORSEY LAW FIRM ON JUNE 11, 1982 AND JUNE 28, 1982 (ATTORNEY MAHONEY OF DORSEY LAW FIRM WILL BE PRESENT AS AUTHORIZED BY THE CITY COUNCIL ON JULY 9, 1982) Attorneys Jerry Mahoney and Jerry Gilligan from the Dorsey law frim were present to discuss the questions submitted to them. -10- 0 • 0 0 COUNCIL MINUTES JULY 13, 1982 When asked how the Dorsey firm, without a conflict of interest, could act as bond counsel and tax increment bond counsel to the City of Hutchinson, Attorney Mahoney responded that the Dorsey firm was not a consultant to the City on tax increment. The company offered its opinion as to the valid- ity of bonds and prepared certain bondings in connection with the findings submitted, which were in compliance with the law. Also, they did not pre- pare the materials for Districts 1, 2, 3 or 4. Dorsey is hired by the City as a bond counsel to the City but not as an advisor to the City. During discussion of the "findings" related to the tax increment district, Attorneys Gilligan and Mahoney both agreed that it was not necessary for the City to redefine the findings or to determine the redevelopment dis- trict since it was done two years ago by the previous City Council. The District is not being enlarged, but rather changed. Attorney Robert Stoneburner, representing the Mayor, submitted among other written questions, a question regarding subjection of the City Council and its members to potential liability for acting in violation of the provisions of M.S.A. 273.74 (Subd. 3) (a), (3), and M.S.A. 273.73 (Subd. 10). The Dor- sey firm responded that liability for error would be the same as for any other error which might be made by a City Council and /or members. There would be no reasonable basis for the Council members to be held liable for decisions made as a body or individually. Attorney Mahoney asked the City Council their reason for re- examining the districts established by a prior City Council. Mayor DeMeyer stated he was involved with the project involving the Hutchin- son Mall. The prior Council tried to deny the bond issue to cause the project to fail.. The preceding Council rescinded actions of the previous Council and was involved in a lawsuit settled in court. The City lost the case to Developers Diversified. Then the Council took the opportunity of bare land that was being developed and brought it into a tax increment plan and cre- ated a single district. The Mayor commented he would not say the Council did not have the right to do this, but the community was displeased with taxes being used for tax increment district. This district has taken the taxes from the people and put it into a tax increment district. Attorney Mahoney responded that the series of questions raised concerned him that the present City Council would attempt to modify a contractual agreement with the bond holder. The Dorsey firm would have to disassociate from that. He could not say whether the previous action was wise or unwise as done by the Council. He pointed out the tax increment proceedings were amended to use surplus taxes for the purpose of parking in the downtown area. The City Council promised to pay taxes and principal on the bonds. The City has, in fact, established a tax increment district and taxes were pledged to certain bonds. Any attempt now to reduce the tax increment district -11- COUNCIL MINUTES JULY 13, 1982 would result in a reduction of the tax increments and a reduction might impair the security for the outstanding bonds. A contractual arrangement was made; now any attempt by the City to change it would raise legislative questions. A question was raised on deleting Area No. 4 from the parking plan and the effect it would have on the City's ability to sell bonds in the future. Mr. Bill Fahey, Bonding Consultant, stated that a City's rating analysis is based on performance, and experience is important. Any major transfer could create some problems. An increase in rating would be denied to the City, and it could affect the City's rating to drop a level. RECESS: A recess was taken at 10:07 P.M., with the Council reconvening at 10:20 P.M. In conclusion, the Mayor stated he did not object to he did object to the "findings." He would vote "no" that were wrong in his opinion. - 11 -1/2- 6 • the S &L project, but against the findings • 0 COUNCIL MINUTES JULY 13, 1982 (h) OPTION FOR PRESENTATION IN CONNECTION WITH WHAT FINDINGS REGARDING TAX INCREMENT FINANCING AS PROPOSED (REQUESTED BY MAYOR DEMEYER) This item was deleted from the Agenda. (i) CONSIDERATION OF STATUS OF UNSIGNED AMENDMENT TO THE TAX INCREMENT FINANCING PLAN FOR DEVELOPMENT DISTRICT N0. 4 (RESOLUTION NO. 7140) City Attorney Schaefer reported that the City Ordinance, Section 100:25, Subd. 2 states. Every ordinance and resolution passed by the Council shall be signed by the Mayor or by two other Council members, attested by the City Clerk, and filed by the Clerk in the ordinance or resolution book." Following discussion, it was moved by Alderman Beatty to authorize two City Council members, pursuant to City Charter, to sign and execute Reso- lution No. 7140 in the event the Mayor does not sign. Seconded by Alder- man Mlinar. Alderman Beatty amended the motion to add "within three days time." Seconded by Alderman Mlinar, the motion unanimously carried. Alderman Beatty moved to direct the City Administrator to sign the neces- sary documents. Alderman Mlinar seconded the motion, and it unanimously carried. (j) CONSIDERATION OF UTILITY COMMISSION CORRESPONDENCE REGARDING UTILITY COSTS FOR S &L BLOCK After discussion, it was the consensus of the Council that the City should not have to spend an additional $4,000.00 for utility work. The Council had already authorized $10,000.00 for burying the electric utilities in the S &L block. Developer Jim McClure stated that he would not drop the project because of an additional $4,000.00 expense. Discussion then followed regarding the location of the underground feeder wires. The motion was made by Alderman Gruenhagen that the City Council take a stand not to spend more than $10,000.00 for electric utilities relocation on the S &L project. Seconded by Alderman Carls, the motion unanimously ap- proved. (k) CONSIDERATION OF RESOLUTION AUTHORIZING THE SALE OF TAX INCREMENT BONDS IN THE AMOUNT OF $135,000 (PRESENTATION BY BILL FAHEY OF EHLERS & ASSOC.) Mr. Bill Fahey of Ehlers & Associates presented Resolution No. 7234 per- taining to the $135,000 General Obligation Tax Increment Bonds of 1982 and the sale of same. -12- 0 • COUNCIL MINUTES JULY 13, 1982 The motion was made by Alderman Beatty to dispense with the reading of Resolution No. 7234. Seconded by Alderman Gruenhagen, a roll call vote was taken. Aldermen Carls, Mlinar, Gruenhagen and Beatty voted aye, and Mayor DeMeyer voted nay. It was then moved by Alderman Gruenhagen, seconded by Alderman Beatty, to have Mr. Bill Fahey read through the Resolution. Motion unanimously ap- proved. Following discussion, Alderman Beatty moved to adopt Resolution No. 7234 entitled Resolution Relating to $135,000 General Obligation Tax Increment Bonds of 1982; Authorizing the Issuance and Providing for the Solicitation of Bids Therefor. Seconded by Alderman Carls, a roll call vote was taken. Aldermen Carls, Mlinar, Gruenhagen and Beatty voted aye and Mayor DeMeyer voted nay. Motion carried. Alderman Beatty moved to authorize two City Council members, pursuant to the City Charter, to sign and execute the Resolution within three days in the event the Mayor does not sign and direct the City Administrator to sign the necessary documents. Motion carried unanimously. (1) CONSIDERATION OF ISSUANCE OF INDUSTRIAL REVENUE BONDS /NOTE FOR REHABILITATION AND RENOVATION OF S &L PROJECT After discussion, it was moved by Alderman Carls to waive the reading of Resolution No. 7235. Seconded by Alderman Mlinar, the motion unanimously approved. It was moved by Alderman Beatty, seconded by Alderman Mlinar, to adopt Reso- lution No. 7235 entitled Resolution Giving Preliminary Approval To A Project Under the Municipal Industrial Development Act; Referring the Proposal To The Commissioner of Energy, Planning and Development for Approval; and Auth- orizing Preparation of Necessary Documents. Motion unanimously carried. Alderman Carls moved to authorize two City Council members, pursuant to City Charter, to sign and execute the necessary documents within three days in the event the Mayor does not sign and direct the City Administrator to sign the necessary documents. Alderman Mlinar seconded the motion and it carried unanimously. (m) CONSIDERATION OF EXECUTING SALE AND DEVELOPMENT AGREEMENT BETWEEN CITY OF HUTCHINSON AND HUTCHINSON S &L REHAB, LIMITED PARTNERSHIP It was the consensus of the Council that additional time was needed to re- view the Sale and Development Agreement. Therefore, a special City Council meeting was scheduled for Thursday, July 15, 1982 at 7:00 A.M. for this pur- pose. -13- COUNCIL MINUTES JULY 13, 1982 A motion was made by Alderman Mlinar to refer this item to the special City Council meeting scheduled for 7:00 A.M. on July 15, 1982, as well as Agenda Item No. 8 -n. Seconded by Alderman Beatty, the motion carried unanimously. (n) CONSIDERATION OF EXERCISING PURCHASE OPTION BETWEEN CITY OF HUTCHINSON AND PARK SQUARE COMPANY, A GENERAL PARTNERSHIP OF RONALD J. MCGRAW AND EDWARD MCCORMICK, WITH RESALE OF PROPERTY TO S &L REHAB, LIMITED PARTNERSHIP, WITH RESPECTIVE CLOSINGS ON OR BEFORE AUGUST 20, 1982 (BILL FAHEY AND JIM MCCLURE WILL BE PRESENT) This item was deferred to the special Council meeting on July 15, 1982_at 7:00 A.M. 9. NEW BUSINESS (a) CONSIDERATION OF ISSUING FINAL PAYMENT FOR SENIOR CENTER TO KRAUS - ANDERSON This item was withdrawn from the Agenda for action at this time. (b) CONSIDERATION OF PLAQUE FOR LITTLE CROW STATUE The unveiling of the new Little Crow statue will take place on September 16, 1982 in conjunction with the Arts and Crafts Festival. It was suggested that an appropriate plaque be placed on the pedestal near the plaque which marked the original statue in 1937. Following discussion, Alderman Mlinar moved to approve the purchase of a 12" x 16" bronze plaque at a cost of $224.00 for the Little Crow statue. Motion seconded by Alderman Gruenhagen and carried unanimously. (c) CONSIDERATION OF CITY APPRECIATION PICNIC After lengthy discussion of the City appreciation picnic, the motion was made by Alderman Beatty to continue the picnic policy as it has been for the past seven years. The motion was seconded by Alderman Mlinar and car- ried unanimously. (d) CONSIDERATION OF GROUP INSURANCE POLICY RENEWAL FOR: 1. HEALTH 2. DENTAL 3. LONG -TERM DISABILITY 4. LIFE/ACCIDENTAL DEATH AND DISMEMBERMENT -14- 0 • • COUNCIL MINUTES JULY 13, 1982 0 It was reported the group insurance renewal rates would be as follow: 1. Health: Blue Cross /Blue Shield Family - $148.75 /month Single - $51.27 /month 2. Dental: Not Available 3. Long -Term Disability: Equitable Life Assurance 570$100 Month Salary 4. Life /Accidental Death and Dismemberment: Minnesota Mutual 38¢/$1,000 Annual Salary Following discussion, it was moved by Alderman Gruenhagen, seconded by Alderman Mlinar, to approve the above - stated group insurance policy re- newals, with the deletion of dental. Motion unanimously approved. (e) CONSIDERATION OF CHANGE ORDER NO. 3 FOR HUTCHINSON FIRE STATION WITH RECOMMENDATION OF FIRE DEPARTMENT: 1. $250 DELETION OF WALL COVERING MURAL 2. ADDITION OF $252.09 FOR FIRE SPRINKLER LIGHT AND MOVING TELEPHONE After discussion, the motion was made by Alderman Gruenhagen to defer this Change Order to the next Council meeting for action. Seconded by Alder- man Beatty, the motion carried unanimously. (f) CONSIDERATION OF APPLICATION BY JIM MCCLURE FOR ON -SALE INTOXICATING LIQUOR LICENSE It was moved by Alderman Mlinar, seconded by Alderman Beatty, to set a public hearing for July 27, 1982 at 8:00 P.M. for the application for an On -Sale Intoxicating Liquor License for Jim McClure. Motion unanimously approved. (g) CONSIDERATION OF ESTABLISHING A NEGOTIATING COMMITTEE INCLUDING TWO CITY COUNCIL MEMBERS (REQUESTED BY ALDERMAN MIKE CARLS) The motion was made by Alderman Carls to bring Agenda Item 8 -d. back on the floor. Seconded by Alderman Gruenhagen, the motion carried unanimously. Following discussion, Alderman Beatty moved to appoint Alderman Kenneth Gruenhagen and Mayor James DeMeyer to the Negotiating Committee. The mo- tion was seconded by Alderman Mlinar and unanimously carried. It was moved by Alderman Carls to refer the parking option for First State Federal property, Parcels A & B, to the Negotiating Committee. Seconded by Alderman Beatty, the motion carried unanimously. -15- COUNCIL MINUTES JULY 13, 1982 (h) CONSIDERATION OF INSURANCE SERVICE OFFICE EVALUATION Fire Marshal Field reported that periodically the Insurance Service Office examines the City's Fire Department, Water Department and Dispatch or com- munications to establish a fire insurance premium rate per $1,000 value within the City. It was felt that an evaluation at this time could mean a change in rating from 116 to 115, which would result in a decrease in in- surance premium rates in certain situations. Following discussion, Alderman Beatty moved to approve the request for an evaluation at this time. Seconded by Alderman Mlinar, the motion carried unanimously. (i) CONSIDERATION OF AUTHORIZATION TO INITIATE PARK RANGER PROGRAM, WITH RECOMMENDATION OF PARKS & RECREATION BOARD The Parks:and Recreation Board has recommended the formation of a Park Ranger Program which would be based on a volunteer operation. Director Ericson explained how the program would function. After discussion, it was moved by Alderman Gruenhagen, seconded by Alder- man Beatty, to approve the Park Ranger Program. Motion unanimously approved. (j) CONSIDERATION OF $510,000 IMPROVEMENT BONDS OF 1982 AND $1,275,000 GENERAL OBLIGATION WATER REVENUE BONDS OF 1982 Bond Consultant Bill Fahey made a presentation regarding the 1982 Improve- ment Bonds and General Obligation Water Revenue Bonds. He pointed out that the amount of the 1982 Improvement Bonds had been decreased to $490,000.00 inasmuch as two projects were deleted from the project list this evening. It was recommended to advertise for bids to be opened on August 10, 1982 at 2:00 P.M. in City Hall Council Chambers. The motion was made by Alderman Carls, seconded by Alderman Mlinar and car- ried unanimously, to waive the reading of Resolution No. 7233. It was moved by Alderman Carls to approve the Resolution as amended and adopt Resolution No. 7233 entitled Resolution Relating to $490,000 Improve- ment Bonds of 1982 and $1,275,000 General Obligation Water Revenue Bonds of 1982; Calling for the Public Sale Thereof. Seconded by Alderman Mlinar, the motion carried unanimously. Alderman Beatty moved to advertise for bids to be opened August 10, 1982 at 2:00 P.M.. The motion was seconded by Alderman Gruenhagen and unani- mously carried. -16- 0 i 0 COUNCIL MINUTES JULY 13, 1982 U (k) CONSIDERATION OF APPLICATION FOR OFF -SALE NON - INTOXICATING MALT LIQUOR LICENSE BY MIKE COMKERFORD FOR: 1. MIKE'S MOBIL 2. SOUTHTOWN MOBIL Following discussion, the motion was made by Alderman Carls, seconded by Alderman Beatty, to approve the application and issue licenses to Mike Commerford. Motion unanimously approved. (1) CONSIDERATION OF FINAL PAY REQUESTS ON FIRE STATION SUBMITTED BY KORNGIEBEL ARCHITECTS Discussion was given to items not yet completed in the new Fire Station. The motion was made by Alderman Gruenhagen to defer action. Seconded by Alderman Carls, the motion carried unanimously. 10. MISCELLANEOUS (a) COMMUNICATIONS FROM CITY ADMINISTRATOR City Administrator Plotz reminded the Council members of the special meet- ing scheduled for July 15 at 7:00 A.M. He also called attention to some letters in the Council packet under "For Your Information." (b) COMMUNICATIONS FROM PARKS AND RECREATION DIRECTOR Director Ericson reported that three bids were received this afternoon for ball field lighting at Fred Roberts Park. It was his recommendation to award the contract to Wagoner Electric Company of Litchfield in the amount of $21,385.00. The funds are available through the LAWCON Phase II Grant money. Alderman Mlinar moved to approve the bid from Wagoner Electric for ball field lighting. Seconded by Alderman Carls, the motion unanimously carried. (c) COMMUNICATIONS FROM CITY ACCOUNTANT City Accountant Merrill requested a morning meeting with the Council to review the 1981 financial reports. (d) COMMUNICATIONS FROM CITY ATTORNEY Attorney Schaefer reported that the Judge had reached a decision on the lawsuit regarding the wastewater treatment plant, and the Gridor Construc- tion was awarded the bid. (e) COMMUNICATIONS FROM ALDERMAN CARLS -17- COUNCIL MINUTES JULY 13, 1982 Alderman Carls commented on previous discussion by the Council of placing a freeze on hiring or replacing certain positions. He requested this item be placed on the Agenda for the next Council meeting. It was moved by Alderman Carls to request the Directors to submit a report to the Council as to whether or not a part -time person should be replaced. Seconded by Alderman Beatty, the motion carried unanimously. 11. CLAIMS APPROPRIATIONS AND CONTRACT PAYMENTS (a) VERIFIED CLAIMS The verified claims were approved for payment from the appropriate funds on a motion by Alderman Carls, seconded by Alderman Gruenhagen, and unani- mously carried. 12. ADJOURNMENT There being no further business, the meeting adjourned at 1:12 A.M. upon motion by Alderman Beatty, seconded by Alderman Carls and carried unanimously. SQ 0 . 41 r, • • -r7jPLICr _IO.; 1�0. =971 'ru_Llcr L !N iriE FLITCH -INSON LEL.L_R ursda July 15, 198^ NOTICE OF PUBLIC HEARING TO WHOM IT MAY CONCERN Notice is hereby given that a public hearing will be held on Tuesday, July 27, 1982 at the hour of 8:00 P.M. in the Council Chamber of City Hall for the purpose of: considering the issuance of an "On -Sale" Intoxicating Liquor License to Jim McClure, owner of Le Bistro Cafe of Hutchinson, Inc. This hearing will be held by the City Council of the City of Hutchinson. At such hearing, all persons interested may be heard. a�9 Citj Clerk July 14, 1982 Dated // -6/,? , No. 263 — Application (or "ON SALE" License for Intoxicating Liquor. Miller -Davie Co.. Minrcn,.lia "ON SALE" Otate of l/innep ;ota, //! 4; l COUNTY OF 74! f __......_ ....._.1 .11UX1CIP.ILITP TO THE GOT'ERNIA'G BODY OF THE .IBOI'E .A'.1.)IED .1lf,.4'ICIP,4LITY: Pursuant to Chapter 46 of the laws of .Minnesota, Special Session of 1933 -4 Ce.B•sla6 . C.f E_.a // Sv.Jt rti 1 �' t- �? s 117idi�_//l1EC /urzE hereby app ?..for a license, for the term of...._ .. ....... _....... _........._.. ..........._ ..._.._......... .. __....... from the. ..... . _..._- ....__......._..day of.- .- ._..._ ........ ............_ .. ..... _..... 49- to sell intoxicating liquors as defined by /law at retail only for c/onsuumption "ON THE PREMISES" described as follows: L .J .. . f/ ... ... said municipality, on which premises._ ___ ._...he.._...._contro7_.s__.and operate a On- .Sale: Liquvx ... stab. lishment ....... _ _ ..... ... ...... ... _. ....... ...; and to that end hereby represent_ and state.... .... Thatsaid municipality is a......... ..... . _..._....._..... .._......_.. .._...__...... ....__.. _......_ ...._..._ .....__......... .......___. .__._ ...... .. .............. ..... ......._.. -. _.............. .......... ........._....._ _.....__..__._... which has a population of ..__ ................._._.................... .._........- ...- .__....__...... ...... __.../........ .... .... ..and which does not maintain an exclusive liquor store; That said.. .... . .S EI1.! .ii'C1i.T......_LeBistro Cafe is an establishMent having a, resident proprietor and manager and the following equipment and facilities. _._ __ ....._. __......... z That said applicant ..JS.. ... _4 .... ......._citi en._._..of the United States ,...... 11e._ .5........_............_over twenty -one years of age ...... he...is_.........._.of good moral character and repute,......... - _.._._._..not, since the enactment of the act above specified, been convicted of any wtl f violation of any law of the United States, or of the State of Altnnesota, or of any local ordinance, with regard to the manufacture, sale, distribution, or possession for distribution or sale, of intoxicating liquors, and that no license issued to.... said person- under said act has ever been revoked: That no manufacturer or wholesaler will own or control, or has any financial interest in, the business of selling intoxicating liquors at retail on said premises, nor power to exact or require, by con- tract, understanding or otherwise, said applicant....... ...to handle or sell only the products of such manu- facturer or wholesaler: That no other retailer's license has been issued, directly or indirectly,`to said applicant ............ or for said premises; that no license of a class other than hereby applied for has been issued to any person at said premises; and that said premises are neither ou•ned.or controlleit by any person to whom no license could be issued: That said premises are not within any area within which the sale of intoxicating liquors is pro- hibited by the laws of the State of .Minnesota, the provisions of any charter, ordinance or special law, or through zoning ordinances, proceedings or legal process regularly held for that purpose: That said applicant.... - ......hereby agree -- _._..that any license granted pursuant hereto shall be non- transferable without consent of -the aVthority issuing the same; that said license shall not be effective Until a permit shall be issued under the laws of the United States in case such permit is required under said laws; and th�t ... .person will keep said license posted in a conspicuous place in said premises: That this application is iaade pursuant and subject to all the laws of Minnesota, the laws of the United States, the ordinances and regulations of said mrrniripality, and the regulations of the Liquor Contro7 Commissioner of Minnesota, relating to thr sale and places of sale of intoxicating liquors, all of which are hereby made a part hereof, and which_ _ persons..._ hereby agree. ... to observe and obey 'I i i UP ................................................. . ... ........ ........... ....._....... _._....... .................. ... ............ ._... ........... ............. (Here state other requirements of local regulation, if any) e" 00fu/-4 /jV*P4""44r30rV DOES AT7- ZQ/OfCA•TE i4sV4l A45066W /Vdl- " Ir sso.4r Po4c4 446.407- As/c-4 Admay.;*.� -o j 4•c.a,,.r . ov-4 A-oml: a sr*o-Ar V Go e0q, GQ cvs Dated......:. _Z, . . ......... ............... 13?...Z r i ..f: r fi..a�l y � ........ '(r'✓ U—I( .... Mate of Anneotat COUNTP OF ........ 7! c" .Q4L .. ............. _..... }ss. .. J�.... Cri ...............being duly sworn, on oath say - .......that............ .._.._........ _....- - . - - ..... �..._ __.� _ .. - --- the within applicant _........; that .......... ..........ha.S ....... full and first hand knowledge of the facts stated in the within application and of the business of said applicant.......,..., the location thereof, and the contents of the within application; and that the statements made in said application are true of. ..... ha ................... own knowledge. It Subscribed and Sworn to Before ........... S?A�.._ Me w: this ...... ...do, of.... .... 10.. ,j ... ................ ..._ ..................... ...............1 s.x f......... ......... . Counk 1 r:` EEOM'V.1 :;F .Votary Publia.. ........!� ...�G� �, Minn Y �} / tU ,Y PU21P_ - .:-30TA M:y Commission Ez irea..s�L... % }o i McLECJ . ,ilY y p "'l .... ........ ... .. .... ..... .......... ♦,w\ MY C...I.I.. Upi'. S.Pt. M, 19M 3 i z z x u 0 i •� C� Cb i1 M Q O 04 C w .! bin P W y 00 Cr O N id 3 i z z x u 0 i 1 Trade Name APPLICATION FOR ON -SALE INTOXICATING LIQCiR IICERSE This form was prepared by the City of Hutchinson and the Minnesota Bureau of Criminal Apprehension, Department of Public Safety, pursuant to Minnesota Statutes, 1976, Section 340.13, for purposes of back- ground investigation. It does not supercede any laws, rules or regulations of the Division of Liquor Control regarding the issuance of liquor licenses. Failure to provide information requested may result in denial of the application. 2. Licensing Period 3. Type of Application: (� New Renewal 5. Name of Applibant Home Address 6. Citizenship: 7. :111 t / /rJs' Place of Birth 8. A,iI�YPCS llf ii11Sl TPCS 9. G 12- Daie of Application 1-1 U Transfer 5337 3a-� Phone 8/ s Zy9 Date/of Birth 10. List owners of building or premise /G /ttoo be licensed: — l • -7- Cyf �(iL(✓ 11. List all partners, officers or directors, if corporation: Name Address 12. Prior experience in this type of business: A1411 Z-- 13. Present ownership in any other liquor establishment: ,0140 Date of Birth Ll 2-4:511 76 14. Present ownership in any other restaurant or food business: Ale 15. Three Business References: / !-/ k?us /)a/UP- �(ii� /�A214,9 %S>L t A.�L 16 17. Partnership Address 18. If this is a transfer application give name, address, of persons, partnership or corporation holding license for the past year. 19. Who owns the bar /tavern fixtures? 20. Are you a Minnesota resident? If not, where resident? Yes ❑ No From To Dates of Residency 21. Residential Address during Past Five (5) Years: _I L!,rfue ° 22. Three Personal References: 23. Employment for the Past Five Years: 24. Any Convictions Other Than Minor Traffic: 25. This application must be accompanied by detailed statement of net worth and last year's tax return and statement of method of payment for business, fixtures and inventory. 26. Applicant, and his associates in this application, will strictly comply with all the Laws of the State of Minnesota governing the taxation and the sale of intoxicating liquor; rules and regulations promulgated by the Liquor Control Commissioner; and all ordinances of the municipality; and I hereby certify that I have read the fore- going questions and that the answers to said questions are true of my own knowledge. I further understand that an investigation fee not to exceed $500.00 shall be charged an applicant by the city or county if the investigation is conducted within the state, or the cost not to exceed $10,000.00 if the investigation is required outside the state. I further understand the ordinances of the City of Hutchinson regarding the operation of on -sale liquor licenses and agree to abide by theme Subscribed and sworn to before me this /1sc' J day of 19 _/f t•(...„.. �TELyDONNA A. ROEPKE M.y_ CbBii'iPiA'(,pU�L I E Leo. a�?� My Commbsipn E1Dile 9.p . i0, 19' 4 A1&011AVV_ S gnature of Appli ant 0 9 AFFIDAVIT EFFECTIVE JULY 1, 1980 AM OVER 65 YEARS OF AGE,. OR I AM ON DISABILITY AS DEFINED BY THE SOCIAL SECURITY ADMINISTRATION, AND MY INCOME IS LESS THAN $5,000 PER YEAR. THE STANDARD CHARGE OF $5.25 FOR TRASH AND REFUSE- SERVICE WOULD IMPOSE A FINANCIAL HARDSHIP ON ME AND I THEREFORE ASK REDUCTION OF THE CHARGE TO $1.50 SIGNATURE STREET ADDRESS FOR OFFICE USE ONLY TO: WATER DEPARTMENT Date Account Number Data Change TO: CITY COUNCIL Council Action: Approved DATE Disapproved n (612) 587 -5151 f1UTlH' CITY OF HU`r CHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 TO: Mayor & City Council FROM: Bruce Ericson, Parks & Recreation Director DATE: July 23, 1982 SUBJECT: Hutchinson Wrestling Association The Hutchinson Wrestling Association (HWA) has approched me about the use of the Arena Saturday evening, August 14th for a wrestling exhibition This would be a benefit for Tom Ruzicka who is now hospitalized due to a recent swimming accident. The HWA has agreed to a rental fee and will provide their own set -up and clean -up. They do not have any insurance, which we usually require, however, they would sign a release of liability for the event. kls (612) 587 -5151 e/rY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 - M E M O R A N D U M DATE: Q ?2 -4, �_:2�3- 0 ORDINANCE NO. 8/82 0 AN ORDINANCE AMENDING PARKING ORDINANCE, SECTION 700:169.34, SUBD. 10 FOR FIRE STATION THE CITY OF HUTCHINSON DOES ORDAIN: Section 1. Parking Ordinance, Section 700:169.34, Subd. 10, is hereby amended with the following deletion: Subd. 10: Within 20 feet of the driveway entrance to any fire station. ead- ea- tke- s €de- e €- the - sheet- ep pas ite- the- eat ranee- to -aay- €ire- statlan w €tk #a -7� -€ eat- e€- sa€ d- eat�aaee- �akea- p�epe� €y -s €ga- pasted. Section 2. This Ordinance shall take effect upon its publication. Adopted by the City Council this 27th day of July, 1982. James G. DeMeyer Mayor ATTEST: Gary D. Plotz City Clerk %. HUTCHINSC.N. "';1%)N. M E M O DATE: July 8, 1982 TO: Mayor and City Council FROM: George F. Field, Fire Marshal RE: Parking Ord. 700:169.34 Subd. 10 700:169.34 is as follows: No parking in the following places. Subd. 10. Within 20 feet of the driveway entrance to any fire station and on the side of the street opposite the entrance to any fire station within 75 feet of said entrance when properly sign - posted; 2 have talked to Lloyd Schlueter, Fire Chief, about the need to continue this Ordinance as it applies to the new fire station. We agree that parking across from the Fire Station will not create any problems in the new location. The appropriate change would be to delete the following portion: "and on the side of a street opposite the entrance to any fire station within 75 feet of said entrance when properly sign - posted; ". If you have any questions, please contact me. George F. %eld Fire Marshal GFF /pV cc: Lloyd Schlueter, Fire Chief REVENUE REPORT Description TAXES LICENSES PERMITS AND FEES fNANCING FEES INTER - GOVERNMENT REVENUE CEMETERY PERPETUAL CARE FUND CHARGES FOR SERVICES FINES AND FORFEITS SALE OF EQUIPMENT CERTIFICATES MISCELLANEOUS REVENUE CONTRIBUTIONS FROM OTHER FUNDS 4EVENUE FOR OTHER AGENCIES WATER $ SEWER FUND WATER 6 SEWER UTILITIES CITY OF HUTCHINSON FINANCIAL REPORT FOR June, 1982 CURRENT ADOPTED YEAR TO MONTH BUDGET DATE AMOUNT $07000,000.00 $0,000,000.00 $0,000,000.00 000 855,303.00 000 11,232.00 3,475.19 36,000.00 000 2,000.00 41,025.00 828,673.00 100.00 000 23,207.97 295,059.00 2,000.25 26,000.00 000 60,000.00 16,711.68 164,640.00 122,894.89 372,500.00 ( 366.26) 300.00 $ 209,048.72 $ 2,651,707,00 $ 130,913.13 $ 917,300.00 000 13,299.34 12,985.16 1,000.00 90,723.71 750.00 111,204.15 11,766.80 000 84,624.57 206,639.47 284.91 REMAINING . BALANCE $0,000,000.00 855,303.00 ( 2,067.34) 23,014.84 1,000.00 737,949.29 ( 750.00) 183,854.85 14,233.20 60,000.00 80,015.43 165,860.53 ( 15.09) $ 533,278.11 $2,118,428.89 $ 515,343.53 $ 401,956.47 PERCENTAGE USED 0 118.4% 36.1% 50.0% 10.9% 37.7% 45.3% 51.4% 55.5% 95.0% 20.1% 56.2% I P E RCEN' TAGE USED % 44.5% 45.9% 73.7 63.6% 49.9% 47.7% 57.9% 47.8% 41.0% 7.7% 62.6% 83.7% 44.9% 44.5% 49.7% L\'PENSE REPORT CONTINUED CURRENT ADOPTED YEAR TO REMAINING MONTH BUDGET DATE AMOUNT BALANCE 0,000,000.00 0,000,000.00 0,000,000.00 , 0,000.00 STREETS $ ALLEYS 11,300.65 288.652.00 128,454.22 160,197.78 STREFT MAINTENANCE ACCOUNT 3,846.76 64,635.00 29,678.63 34,956.37 CONSERVATION OF HEALTH 000 LIBRARY 12,211.22 52,537.00 38,704.27 13,832.73 SENIOR CITIZEN CENTER 737.76 10,268.00 6,534.88 3,733.12 • 11ARK /RECREATION ADMINISTRATION 2,398.37 55,668.00 27,766.62 27,901.38 RECREATION 7,398.57 57,852.00 27,577.15 30,274.85 CIVIC ARENA 2,105.85 89,093.00 51,544.50 37,548.50 PARK DEPARTMENT 24,295.16 254,646_00 121,668.13 132,977.87 CEMETERY 1,428.93 33,726..00 13,818.37 19,907.63 DOWNTOWN DEVELOPMENT 000 80.52 ( 80.52) LAWCON 2,507.20 110,430.00 8,462.25 101,967.75 DEBT SERVICE 000 55,668.00 34,848.66 20,819.34 AIRPORT 16,786.65 47,775.00 39,997.42 7,777.58 'TRANSIT 3,012.17 65,659.00 29,507.17 36,151.83 UNALLOCATED GENERAL EXPENSE 61,485.75 143,387.00 63,795.97 79,591.03 IIRA 1,847.42 000 25,477.10 25,477.10 $203,371.59 $2,655,400.00 $'1,319,542.70 $1,335,857.30 P E RCEN' TAGE USED % 44.5% 45.9% 73.7 63.6% 49.9% 47.7% 57.9% 47.8% 41.0% 7.7% 62.6% 83.7% 44.9% 44.5% 49.7% EXPENSE REPORT DECRIPTION GENERAL FUND MAYOR $ COUNCIL CITY ADM. /CITY CLERK ELECTIONS FINANCE MOTOR VEHICLE ASSESSING i' LEGAL PLANNING CITY HALL OLD ARMORY POLICE DEPARTMENT w �{ FIRE DEPARTMENT COMMUNITY SERVICE OFFICER PROTECTIVE INSPECTIONS CIVIL DEFENSE SAFETY COUNCIL FIRE MARSHALL ENGINEERING CITY OF HUTCHINSON FINANCIAL REPORT FOR June, 1982 CURRENT ADOPTED YEAR TO MONTH BUDGET DATE AMOUNT 0,000,000.00 0,000,000.00 0,000.000.00 REMAINGING BALANCE 0,0000000.00 PERCENTAGE USED % 1,368.93 32,157.00 15,414.05 16,742.95 47.9% 3,768.20 98,350.00 50,279.67 48,070.33 51.1% 000 8,678.00 50.20 8,627.80 .6% 8,058.45 140,545.00 79,481.42 61,063.58 S6.6% 2,070.37 50,737.00 26,709.81 24,027.19 52.6% 000 16,874.00 000 16,874.00 860.69 241233.00 17,997.54 6,235.46 74.3% 000- 1,425.00 679.06 745.94 47.7% 4,842.98 38,383.00 22,992.98 15,390.02 59.9% 631.84 20,913,00 12,182.03 8,730.97 58.3% 20,698.86 524,784.00 259,992.06 264,791.94 49.5% 1,341.01 129,255,00 71,188.21 58,066.79 55.1% 1,088.56 27,469,00 13,064.44 14,404.56 47.6% 1,299.56 40,074,00 19,078.43 20,995.57 47.6% 000 450..00 104.28 345.92 23.2% 000 150.00 000 150.00 1,109.84 33,112.00 15,724.98 17,387.02 47.S% 4,869.84 137,815. 00 64,945.32 72,869.68 47.1% EXPENSE REPORT CONTINUED DESCRIPTION WATER f, SEWER FUND WATER $ SEWER ADMINISTRATION •WATER PLANT OPERATIONS SEWER PLANT OPERATIONS • CITY OF HUTCHINSON FINANCIAL REPORT FOR June 1982 CURRENT ADOPTED YEAR TO REMAINING PERCENTAGE MONTH BUDGET DATE AMOUNT BALANCE USED 0,000,000.00 $0,000,000.00 $0,000,000.00 $0,000,000.00 % 34,699.55 822,026.00 11,267.91 1,305,825.00 16,066.46 135,750.00 $62,033.92 $2,263,601.00 358,592.55 463,433.45 43.6% 45,922.93 1,259,902.07 3.5% 80,272.44 55,477.56 59.1% $ 485,632.38 $ 1,777,968.62 21.5% L_ 1. CALL TO ORDER G MINUTES HUTCHINSON PLANNING COMMISSION TUESDAY, JUNE 15, 1982 The regular meeting of the Hutchinson Planning Commission was called to order by Chairman Don Erickson at 7:30 P.M. with the following members present: Ted Beatty, Larry Romo, Clint Tracy and Elsa Young in addition to Chr. Don Erickson. Absent: Jim Johnson and Roland Ebent. Also attending were City Administrator Gary Plotz, City Attorney Jim Schaefer and Director of Engineering Marlow Priebe. 2. MINUTES The minutes of the regular meeting dated May 18, 1982 were unanimously approved on motion by Larry Romo and seconded by Ted Beatty. 3. PUBLIC HEARINGS (a) CONSIDERATION OF REQUEST FOR CONDITIONAL USE PERMIT SUBMITTED BY MR. JACK KJOS The hearing was opened at 7:31 P.M. by Chairman Erickson with the reading of publication #2934 as published in the Hutchinson Leader on Thursday, June 3, 1982. No one was present voicing any objection to this request. It was explained to the Commission by Mr. Plotz that Mr. Kjos has requested to add on a 17' x 14' porch to the west side of his house. He will be in compliance with all the setbacks. The existing garage is non - conforming so therefore, a conditional use permit is necessary. The hearing was closed at 7:32 P.M. on motion by Ted Beatty. Sec- onded by Clint Tracy, the motion carried unanimously. Mr. Ted Beatty then made a motion to recommend approval to the City Council of the requested conditional use permit. Seconded by Elsa Young, the motion unanimously carried. (b) CONSIDERATION OF REQUEST FOR CONDITIONAL USE PERMIT SUBMITTED BY MR. HOVERSTEN /MR. CORNELL Chairman Erickson opened the hearing at 7:33 P.M. with the reading of publication #2395 as published in the Hutchinson Leader on Thursday, June 3, 1982. / If ill cn'nSon °'annlnC ?ss or, Piinutes - June 15, 1962 PaCE City Administrator Gary Plotz explained the letter in the packet containing staffs recom endation. It was requested in the letter that the building be moved for the road right of way. Mr. Hoversten commented they plan to expand at a later date and questioned if this would be possible should the building be moved. After discussion and a closer look at the plans, it was determined there would be room for expansion even if the building were moved. Staff also requested a warranty deed for the portion of Third Ave. connecting to Hwy. n 7. Mr. Hoversten stated that wouldn't be a problem. It was also noted that the property owner would then no longer need to pay taxes on the portion of property deeded to the city. On motion by Ted Beatty, the hearing was closed at 7:42 P.M. Seconded by Elsa Young, the motion carried unanimously. Mr. Clint Tracy then made the motion to recommend approval to the City Council of the requested conditional use permit with the stipulations listed in the letter from staff. Seconded by Ted Beatty, the motion unanimously carried. (c) CONSIDERATION OF REQUEST SUBMITTED BY STAFF FOR AMENDMENT TO ZONING ORDINANCE NO. 464 The hearing was opened at 7:43 P.M. by Chairman Erickson with the reading of publication II 2936 as published in the Hutchinson Leader on Thursday, June 3, 1982. Director of Engineering Marlow Priebe explained the added changes amending the zoning ordinance were establishing newly formed dist- ricts for mobile homes and mobile home parks. He went on to say the R -4 district regulations were similar to those of the R -2 district except that the setbacks were somewhat changed. The larger the mobile home, the greater the setback. Also two park- ing spaces are required for each mobile home. There were no comments from the audience. On motion by Ted Beatty, the hearing was closed at 7:52 P.M. Seconded by Larry Romo, the motion unanimously carried. Mr. Ted Beatty then made a motion to recommend approval of the amendment to the zoning ordinance to the city council and the deleting of section 7.14 Mobile Home Park Requirements. Second- ed by Clint Tracy, the motion carried unanimously. ti Hutchinson Planning Commission Minutes - June 15, 1982 4. OLD BUSINESS None 5. NEW BUSINESS 40 Page 3 (a) DISCUSSION ON STORAGE OF WOOD WITHIN THE CITY OF HUTCHINSON Building Official Homer Pittman explained that some cities have ordinances regulating the storage of wood. Discussion followed and it was questioned if there had been com- plaints. Mr. Plotz stated there were none that he knew of. Mr. Pittman stated his concern was that of rodents possibly making homes in the wood piles. It was the consensus of the Commission that this would be very difficult to enact. They also felt they did not want to discourage the burning of wood. Mr. Pittman was instructed to get more information from other cities pertaining to regulations on the storage of wood. (b) REQUEST FOR DISCUSSION ON POSSIBLY BUILDING A 4 -PLEX IN A PUD IN STONEY POINT THIRD ADDITION Mr. Hal Wehmann spoke stating he felt he was in error coming to the Commission at this time but rather felt he should talk to the staff first. They agreed to meet with them after the meeting. (c) COMMUNICATIONS FROM CITY ENGINEER Mr. Marlow Priebe pointed out an article in the Hutchinson Leader dated June 15, 1982 indicating that Witte's Appliance Service has moved to his home at 1004 Lewis Ave. S.W. It was questioned if this would be allowed under the present zoning. Discussion followed and some felt he may only be doing service work and special ordering. It was felt that staff should make him aware of what the possibilities are. 6. ADJOURNMENT There being no further business to come before the Commission, the meet- ing adjourned at 8:10 P.M. on motion by Ted Beatty and seconded by Larry Romo. Motion unanimously carried. I,:_NUTES • Tree Beard . June 2, 1982 Members Present: Ivan Larson, Mrs. Axel Jensen, Jerry Brown; Chairman, and Roy Johnsen. Also present were Mark Schnobrich; Forester, Karen Stafford; Secretary and guest, Bob Anderson. Tree Dump Bob Anderson, who lives near Hutch Wood Products, was inquiring about getting into the tree dump to by larger logs; after the major tree sales are over. Six Seventh Day Adventist have requested that the tree dump be open on a Sunday, since there were unable to attend the previous sales. Mark told the board that at this time there were approximately 30- 40 logs at the dump and the price for the wood be the same as before, $15 per pickup, and $20 for a pickup with sides. Ivan Larson made a motion that Mark open the tree dump one night at Mark's discretion til sun down. Mrs. Axel Jensen seconded the motion, and the board unanimously agreed. Fall Purchase of Trees $2,000 have been acquired for purchasing trees. The city's maxi- mum portion for boulevard trees will be $10. Ivan Larson suggest- ed that $1,000 be used in the fall that $1,000 be used in the fall that way $500 will be returned, and $1,500 will be available for spring planting. The board agreed that the best procedure to follow for planting would be-to: a. Buy the trees b. Advertise that trees are available c. Compile a temporary list of homeowners d. Check tree locations for best tree adaptability Dutch Elm Disease Removal Our city contractor will be Hutch Landscaping. Mark told the board that to encourage people to go with the contractor that perhaps there could be a charge to let people in the tree dump. A cost wasn't decided, therefore, a decision was not made. This year the time limit to to allow the homeowners time for or to do it themselves.. remove trees was extended to 14 days to make arrangements for a contrac- New Business Ivan Larson suggested that the regular meeting be scheduled for the third Tuesday of the month at 8:00 p.m. Roy Johnsen added that a reminder call sould be a good idea also. The board unanimously agreed. Adjournment Ivan Larson made a motion to adjourn at 9:30 p.m., Roy Johnsen seconded the motion. • MINUTES • Parks & gocreation Advisory Board .Tune 9, 1982 Members Present: Chairman, Dr. Chernausek, Rollie Jensen, Roy Johnsen, and Mike Carls. Also present were Bruce Ericson; Director of Parks & Recreation, John McRaith; Recreation Supervisor, Mary Haugen; Civic Arena Coordinator, Mark Schnobrich; For- ester, and Karen Stafford; Secretary. The Minutes The minutes dated May 5, 1982 were read and motion was made by Dr. Chernausek to approve them, and Don Falconer seconded the motion. Weed Notices A copy of the letter property owners with long grass or weeds will be receiving was passed out. Bruce explained that the owners will be receiving a notice one time only. If the lot needs mowing five days after the owner has received the notice, our contractor will receive a copy and the lot will be mowed, and the property owner charged. Registration and Program Info The adult program registration has gone well, there are 84 teams and each player was charged $4; Bruce mentioned that there has been some vandalism at Roberts Park, now there is a part -time person scheduled to work 3:00 p.m. to 10:00 p.m. Monday- Thursday. He will be opening and locking up the park along with doing field maintenance and showing people how to run the scoreboard. Park Ranger Program There have been some problems in thedifferent parks in town. Bruce told the board that people have notified the Parks & Recreation office or the Police Department, and he came up with the idea of having an organized group of con - cerned citizens voluntarily keeping an eye on the neighborhood parks, and notifying the police if something gets out of hand. The group could be indent - ified by a baseball hat or perhaps and arm band. Mike Carls brought up the fact that some people may get carried away with their authority and that something ought to be written up with -some guidelines for the rangers. Dr. Chernausek suggested that something be submitted to the newspaper. Junker Sanitation Bruce told the board that the Junker contract states that they are required to empty the park barrels at no extra charge. There are 150 barrels at this time and the park crew have been picking them up and dumping them; it takes four people half a day twice a week to get the job done. Mike Carls expressed con- cern that when the contract for Junker is rewritten the city could be hammered. Bruce then mentioned that he thought the present contract was for 10 years. Miscellaneous Mary Haugen told the board of the upcoming Juice Newton concert scheduled for the Civic Arena July 23rd at 7:00 p.m., and that it should do fairily well. The Jose' Coles Circus went well and Jose' told Mary that he will be back next year. Rollerskating is bringing the arena approximately $300- $400 a night. The num- ber of people attending skating has been pretty constant since May. t1_41_1 Parks S Recreation Board June 9, 1982 Page two John McRaith, Recreation Supervisor, told the board that the interest in Youth Softball is growing this year, and the interest in soccer is fading. John also told them that the adults are happy to be playing more double headers. Rollie Jensen mentioned that the only weakness he sees at Roberts Park is the parking lot. Bruce told the board that they hope to make it 20 feet wider to fit in another row of cars. The park will also be having some playground equip- ment installed and a boat landing added. Mark Schnobrich, Forester, said that the number of elm trees already tagged for 1982 is 64, most of them being carry over from last year. Hutch Landscaping got the contract for removing diseased elm in Hutchinson, for example they will remove an 18 inch tree for $110 or $10 less if the stump is debarked rather than ground out. With a contractor, the city is able to offer. the homeowner a better price for diseased elm removal. Mark also told the board he has received $2,500 for planting new boulevard trees. $1,000 was a donation from the Kiwanis Club in Huthinson. The city will pay up to $10 while the homeowner pays $10 for a tree to be placed on the city boulevards. Adjournment There being no futher business, Roy Johnsen made a motion to adjourn the meeting at 4:55 p.m., Rollie Jensen seconded the motion. r 'tor is required to :av to the City so much of the Tax rement rece'ved witnin the 0 year period ending December 31, as is needed to pay debt service on 3onds to be issued by the City fo pay the public development cost of the District. The City expects'to �v receive such Tax increment durine the term of this Ayreement`, and will appropriate and use the Tax Increment for 'such purposes as hereinafter provided. 1.06 Intention to Contract. The City is desirous of contracting with the Developer to purchase and —d $iop in accordance with the Development Program, as specified in this Agreement; and the Developer is desirous of contracting with the City for this purpose. 14. Aut?zcrity_ Each of the parties has authority to enter into this Agreement and to take all O� actions required of it hereby, and has taken all actions necessary to authorize the execution and delivery' of this agreement_ -- 1.0o. Developer. For purposes of this T 24nt5 �, IAcL -re TR JrrG Agreement, 'Developer" includes and any I person or entity to whom or any of her rights therein or hereunder are transferred or assigned, as hereinafter permitted. -4- jp RETAIL "OIL' SALE" • fitdtc Of fflillllc5Gta, Hutchinson__..._ COUNTYOF_ .___.....___._._..-- .- --- - - - - -- - - - -- Cit Hutchinson . To the.......... city.. council ... .......... .. ........._of the..... -..., y-.......................... of------- •-- ..............._............ State of Minnesota: Hutchinson Jaycees_ -- ---- - - - - -- - -- - -' - - -- - - -- - - - he,eby applies-far a Zirc 86 for the term of-- ---- ----- - y - -- -- - -- -- - ° - - -- from the. - -- 31st - - - -- - -- -- dab of -' - - Julp_ - -- -- ._ - - -- - -- -., JP -8 to sell At Retail Only, Non- biox-icating Malt Liquors, at the lama are defined by law, for conrumptwn `•O.A.•• those ccrta!n prxmitct in City of - - Hutchinson - — detoribed as foNo-xs, to -wit: Hutch Pentacular Softball Tournament at Fred Roberts Park at which place said appMc- anf ... .- operate- ....the business Of and fo that end represent.---- and state._..nt follows: That said applicant .- ---- --_ -is a ------- ----- _._.._._.n tixn_- -- -_of the Ilrii Td Sfa'ca; of Toad moral �harac er and repute; and has --------- atfained the aFe of J?1 years; that ......_... -------------------- _..----------------- -- ------- F OPncfaf- -of {he cstablithmcnt for which the Z.icense will be isru.r -d if this appZiea.tian is eran.tczL That no rnanu faaturer of rush 7on.int0xica6nf malt liquors has any oumerahip, in uhoIe ar in part, in said burin" of said applicant.__or any intereaL therein; j That said appZicant_....maka-- ...their application pursuant and Y bject fa all the Iawr of {he Stafa of dfinneaofa and the ordinances and rcpiLations of said ------ ------ -- ----- --------- -------- - - -.__ apple able thereto, which arc hereby made a part hereof, and hereby atree ...... to observe and obey the same; ._._.__— .- ___ -__.- —.— _. -__. of loll (Hen! LC.Ler ..ti �.a�.reLL .s'l. The Jaycees will check all I.D.'s plus watch all the spectators to insure no minors receive any beer. There will be no beer or alcoholic beverages brought into the ball park by team members or the spectators. There will be a Jaycee on the premises at all times who will contact the Police to report any group(s) drinking in the parking lot. Each applicant further states that he is not now the holder of, nor hat he made application for, nor doe he intend to make applirat" for a Federal Retail Dealor's Spacial tax stamp for the sale of l„to,xjca6np liquor. OVA. July 22 IP 82 HUTCHINSON JAYCEES �— &PPLwant- F; O. 9- a DATE July 22, 1982 POLICE DEPARTMENT MEMORANDUM TO: Mayor and Council FROM: Dean M. O'Borsky SUBJECT: Jaycee's Beer License Several weeks ago the Jaycees approached the Council requesting a "blanket" license that would allow them to sell beer at various functions at Fred Robert's Softball Park. They were also interested in selling beer at events at the Civic Arena. In my memo of May 5th 1 pointed out to the council that it is unlawful for the city of Hutchinson to license itself to sell beer at these events. This is effectively what was happening as the Jaycees were working with the Recreation Department on a profit sharing basis. The council re- jected the application. recently had discussions with the Jaycees and I believe we have come up with a solution to this particular problem which will meet the requirements of the law. 1 also feel that the Jaycees are cognizant of their responsibilities regarding what they must do to keep alcoholic beverages out of the hands of minors. The Jaycees will make applications for the sale of beer at softball tourna- ments on a case by case basis at which time we will be able to determine whether that license should be issued based on the compliance of the Jaycees and the success of previous tournaments. No fiduciary arrangement between the Recreation Department and the Jaycees should be made other than normal rental fees, etc. This does not reflect a change in my attitude or thinking, but only re- iterates what I have said all along regarding the legality of the situation. Based on the changes made in the discussions that I've had with the Jaycees, I see no reason why this license should not be approved. I still object to the sale of beer at the events at the Hutchinson Civic Arena and more particularly those events which are "family" events. I believe that we should deal with this problem separately. C� (612) 587 -5151 CITY OF AW CHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 M E M O R A N D U M DATE: July 21, 1982 --------- - - - - -- TO: Hutchinson City Council. -------------------------- - - - - -- FROM: Planning Commission - - T --------------------------- SUBJECT; Variance request submitted by Linda Peterson ------ T------------------- - - - - -- Pursuant to Section 6.05, B.3, of Zoning Ordinance No. 464, the Hutchinson Planning Commission is hereby submitting its finding of fact and recommend- ation with respect to the aforementioned request for variance. HISTORY On June 24th, 1982 an application was submitted by Linda Peterson request- ing a variance from the required six (6) foot side yard setback to.a three (3) foot side yard setback. The applicant wanted to build a 20' x 32, garage to be used for storage and a shop area and yet wanted to save a large shade tree. A public hearing was held at the regular meeting of the Commission on July 20, 1982 at which time a neighboring property owner, Mr. Elton Lueck of 94 5th Ave. N.W. stated he objected to the issuance of the variance. Discussion followed and it was determined the garage could either be made smaller or perhaps placed on the lot in a different manner. FINDINGS OF FACT 1. The required application was submitted and the appropriate fee paid. 2. Notices were mailed to the surrounding property owners as well as pub - lished in the Hutchinson Leader on Thursday, July 8, 1982. 3. It was the consensus of the Commission if the location or size were some- what altered it would be possible to build the garage without a variance, thus they felt there was no hardship. RECOMMENDATION It is the recommendation of the Planning Commission that the variance for the three (3) foot side yard setback be denied. / espectfu lly. milted t� "C Mr. Don rickson, Chairman Hutchinson Planning Commission 0t (612) 587 -5151 CITY OF I-IUYC141NSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 - M E M O R A N D U M DATE; _ _ _ _July 21, 1982 _ TO: ^ _ Hutchinson City Council_ _ FROM: Planning Commission SUBJECT: _ Amendment to Zoning Ordinance No. 464 submitted by City staff Pursuant to Section 6.06 C.1, of Zoning Ordinance No. 464, the Hutchinson Planning Commission is hereby submitting its finding of fact and recommend- ation with respect to the aforementioned request. HISTORY City Staff set a public hearing.for July 20, 1982 for the consideration of amending Section 8: Zoning Districts and Zoning Map, R -5 Mobile Home Park. The following sentence was inadvertently left out of the amendment to the zoning ordinance passed last month concerning mobile homes: All manufactured homes as defined by M.S. 327.31- 327 -35 shall be anchored in accordance with the MINNESOTA CODE OF A NC UL - - DIVISION - SEC I N M - to i izing ystem or o i e owes ". FINDINGS OF FACT 1. All procedural requirements for amendments to the zoning ordinance have been complied with. 2. Notice was published in the Hutchinson Leader on Thursday, July 8, 1982. 3. The proposal was deemed to be appropriate and in the best interest of the community. RECONMNDATION It is the recommendation of the Planning Commission that the above sentence be added to the Zoning Ordinance No. 464 under Section 8: Zoning Districts and Zoning Map, R -5 Mobile Home Park. Respectfull u itt—e Don E 'ckson, Chr. Hutchinson Planning Comm. I ORDINANCE NO. 9/82 AN ORDINANCE AMENDING ORDINANCE NO. 464, SECTION 8: ZONING DISTRICTS AND ZONING MAP, R -5 MOBILE HOME PARK THE CITY OF HUTCHINSON DOES ORDAIN: Section 1. Zoning Ordinance No. 464 is hereby amended by the addition of the following: Section 8: Zoning Districts and Zoning Map, R -5 Mobile Home Park All manufactured homes as defined by M.S. 327.31- 327.35 shall be anchored in accordance with the MINNESOTA CODE OF AGENCY RULES - BUILDING CO DE DIVISION - SECTION 2 MCAR - 1.904.50 "Stabilizing tem for Mobile homes. Section 2. This Ordinance shall take effect upon its publication. Adopted by the City Council this 10th day of August, 1982. G. DeMeyer Mayor ATTEST: Gary D. Plotz City Clerk ?- ep 0 *OR YOUR INFORMATION MINUTES HUTCHINSON PLANNING CO"MiISSION TUESDAY, JULY 20, 1982 1. CALL TO ORDER The regular meeting of the Hutchinson Planning Commission was called to order by Chairman Don Erickson at 7:30 P.M. with the following members present: Ted Beatty, Roland Ebent and Clint Tracy in addition to Chr. Erickson. Absent: Jim Johnson, Larry Rom and Elsa Young. Also attending was Mr. Marlow Priebe, Director of Engineering. 2. MINUTES The minutes of the regular meeting dated June 15, 1982 were unanimously approved on motion by Ted Beatty and seconded by Clint Tracy. 3. PUBLIC HEARINGS (a) CONSIDERATION OF REQUEST FOR VARIANCE SUBMITTED BY LINDA PETERSON The hearing was opened at 7:31 P.M. by Chairman Erickson with the reading of publication #2969 as published in the Hutchinson Leader on Thursday, July 8, 1982. Mr. Wayne Peterson, 483 James Street, explained he had a large shade tree in his back yard he wanted to save and yet build a garage large enough for a shop and a storage area. He also stated he didn't want to angle the driveway and move the garage over. Chairman Erickson questioned if the size of the garage couldn't be reduced or altered in some way. Mr. Peterson replied he wanted this size so he could separate the garage from the shop and then insulate the shop. Mr. Elton Lueck, 94 5th Ave. N.W., stated he felt the setback should remain at six (6) feet. It was the consensus of the Planning Commission that Mr. Peterson did not have a hardship inasmuch as their was sufficient room for a garage to be built if the size or location were altered somewhat. On motion by Ted Beatty, the hearing was closed at 7:49 P.M. Seconded by Clint Tracy, the motion carried unanimously. Mr. Ted Beatty then made a motion to recommend to the City Council • the request for a variance be denied. Seconded by Roland Ebent, the motion unanimously carried. Planning Come. Minutes 7 -20 -82 Page 2 (b) CONSIDERATION OF REQUEST SUBMITTED BY STAFF FOR AMENDMENT TO ZONING ORDINANCE NO. 464 The hearing was opened at 7:50 P.M. by Chairman Erickson with the reading of publication #2970 as published in the Hutchinson Leader on Thursday, July 8, 1982. Mr. Ted Beatty questioned if it would be a requirement for all mobile homes in the City. Mr. Priebe replied it would only be a requirement for mobile homes being be put up in the future. On motion by Clint Tracy, the hearing was closed at 7:51 P.M. Seconded by Ted Beatty, the motion carried unanimously. Mr. Ted Beatty then made a motion to recommend approval to the City Council of the amendment to the zoning ordinance requiring all mobile homes in R -5 districts to be anchored in accordance with the MINN. CODE OF AGENCY RULES - BLDG. CODE DIV. SECT. 2 WAR 1.904.50. Seconded by Clint Tracy, the motion unanimously carried. 4. OLD BUSINESS (a) CONSIDERATION OF FINAL PLAT FOR 'WRIGHT ESTATES' Director of Engineering, Marlow Priebe, explained the preliminary plat was approved somethime ago and now the county is asking for approval of the final plat. A brief discussion followed and it seems they have followed thru with the recommendations stated in the preliminary plat and made no changes to it was the consensus of the Commission approval was in order. Mr. Ted Beatty then made the motion to recommend approval of the final plat for Wright Estates. Seconded by Clint Tracy, the motion carried unanimously. 5. NEW BUSINESS (a) CONSIDERATION OF REQUEST FOR PRELIMINARY PLAT FOR 'PRIEVE ESTATES' Mr. Priebe explained that Priev Estates is located north of Wright Estates on the west side of Otter Lake. The road is already in. After brief discussion, Mr. Ted Beatty made the motion to recommend approval of the plat to the City Council and that they forward a recommendation to the county. Seconded by Roland Ebent, the motion carried unanimously. 6. ADJOURNMENT There being no further business to come before the Commission, the meeting adjourned at 8:00 P.M. on motion by Ted Beatty and seconded by Clint Tracy. Motion unanimously carried. (612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 M E M O DATE: July 22, 1982 TO: Mayor and City Council FROM: Director of Engineering RE: Removal of Old Alley Entrance To date, the City has not removed the alley entrance panel and replaced the curb on First Avenue S.E. between Jefferson Street and Adams Street subsequent to vacation of the North 132 feet of the alley. Attached is a drawing of the area and a cost estimate from Hanson Construction Co. for the work. This work should be done to clarify on the street parking and will restrict driving into the vacated alley area, which is used as open space by Evergreen Apartments. Marlow V. Priebe Director of Engineering MVP /pv attachments 9- f J,a4 sat-4- -"4 • • J. W. HANSON CONSTRUCTION CPPANY Sidewalks, Curbs & Gutters and Driveway Paving HUTCHINSON, MINNESOTA 55350 Phone (612) 587.2475 Paomutw MrtTEnm oA� %�/ /�� a J✓JSGS'1 ADDRESS PH E S'd'7 MTE OF RAMS lOB NAME nHD LOCATION i� aMCHITECf - lOB PHONE We hereby submit specifiratlons and esti mates, subject to all terms and mrddions as set forth on both sides. as follows: ctAY l (S C), dG _ ��J I 5 a, ✓t _ex)5), » -r c r, c�cr< wflJJroac // I G o, op D�cs Nu/ b /ce% of)Y� /A+cI cl� )". ef (Read Reverse Side) ire 11I0;1DSe hereby to furnish ma nal a labor — mmplete in a ordamoe with above speciflotiordl et H •. t- �� "T�dollaR far the sum Df: J A �T ($ - -) Note: This proposal may be withdrawn by us It Aulhmixetl not amepled within , � � �— tlays. Signs Llirirpte "A: The above prices, specifications and v mndRions are satislactory and are hereby accepted .You Signatum are authodaed to do the work as specified. Payment will ba made as outlined above_ Date Signature Evergreen Apts. Remove and Replace 30 L.F. Curb & Gutter - ---I 1 { 0 • (612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 M E M O DATE: July 22, 1982 TO: Mayor and City Council FROM: Director of Engineering RE: Water Treatment Plant The Water Department has had problems with the existing 1/2 inch line to Well No. 6 for sometime. Replacement has been delayed until work on the Treatment plant to enable it to be placed in a permanent location. Attached is a copy of the cost of said replacement by Gridor Construction, Inc. I recommend approval of same. It should not be considered a change order, inasmuch as, the work is not part of or necessitated by the plant expansion construction. Marlow V. Priebe Director of Engineering MVP /pv attachment CC: Ralph Neumann Dick Nagy Ken Merrill q_/ r GRIDOR CONSTR., INC. P.O. BOX 41246 1886 BERKSHIRE LANE PLYMOUTH, MINNESOTA 55441 July 12, 1982 Rieke Carroll Muller Associates, Inc. 1011 S. 1st Street - Box 130 Hopkinq, Minnesota 55343 Attn: Steve Flaten RE: Water Treatment Plant Hutchinson, MN Gentlemen: 611 -559 -3734 JUL 161982 Rieke -Carroll - muller kmdatas Inc. Box 130 Hopkins, Minn. 55343 As requested we propose to install a new 3/4" waterline to replace the existing pluged I" line from existing well No. 6 to the existing 12" watermain. We would start the new line at the existing location shown on the drawing and go approx. 20' West then turn and go North to the existing well building. This would keep the new line out of the way of the piping tie -ins and the new backwash and drain manhole. The additional costs for this work would be as follows: Backhoe 8 hr. @ $35.00 $280.00 3/4" Copper line, Fittings w/ Tax 150.00 Backhoe operator. 8 hr. @ 15.66 120.00 2 Laborers 16 hr. @ 13.50 216.00 Fringes, payroll tax and insur. 35% 118.00 Sub -Total $884.00 15% O'head & Manr. 133.00 Total $1,017.00 Please advise if we should proceed or if there are any questions. Sincere l , �'e�t A iJ �4�z~ . rt Meyer (612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 July 16, 1982 M E M O R A N D U M TO: MAYOR AND CITY COUNICL FROM: PERSONNEL COORDINATOR HAZEL SITZ 4's RE: WORK STUDY AGREEMENT FOR 1982 - 1983 SCHOOL YEAR Attached for approval is the Work -Study agreement which we enter into each school year with HAVTI. The City customarily employs ten or more students throuqh this program each school year, for varying terms of employment. Each student may work up to 10 to 15 hours per week, at $3.35 per hour. This year, our share of the cost will be 30 %, or $1.00 per hour per student. Our usual distribution of the students is as follows: Clerical (finance office and street garage) 2 Maintenance (police department, streets) 3 Recreation and Civic Arena 5 or more (some employment is for limited hours) q--k, HUTCHINSON AREA VOCA'IONAL TECHNICAL INSTITUTE WORK STUDY AGREEMENT This agreement is entered into between the Hutchinson Area Vocational Technical Institute, hereinafter known as the "Institution," and hereinafter known as the "Agency", a (public organization) (private non- profit organization) for the purpose of providing work to students eligible to participate in the College Work Study Program. Schedules to.be attached to this agreement from time to time, bearing the signature of an authorized official of the Institution and of the agency, will set forth brief descriptions of the work to be per- formed by students under this agrement. 1/ the total number of students to be employed, the hourly rates of pay, and the total number of hours . per week each student will be utilized. 2/ These schedules will state the total length of time the project is expected to run, the total percent, if any, of the cost of employers' payroll contributions to be borne by the Agency. Students will be made available to the Agency by the Institution for performance of specified work assignments. Students may be removed from work on a particular assignment or from the Agency by the Insti- tution, either on its own initiative or at the request of the Agency. The Agency agrees that no student will be denied work or subjected to different treatment under this agreement on the grounds of race, color, or national origin, and that it will comply with the provisions of the Civil Rights Act of 1964 (P.L. 88 -352; 78 Stat. 252) and the . Regulations of the Department of Health, Education and Welfare which, implement that Act. Transportation for students to and from their work assignements will not - be provided by either the Institution or the Agency. Footnote 1 /.In accordance with the requirements of the Federal program, work to be performed under this agreement must be work in the public interest, which (1) will not result in the displacement of employed workers or impair existing contracts for services .(2) will be governed by such conditions of employment, including compensation, as will be appropriate and reasonable in light of such factors as type of work performed, geographical region and proficiency of the employee, and (3) does not involve the construction, operation, or maintenance of so much of any facility as is used, or is to be used, for secrarian instruction or as a place for religious workshop. Further, no project may involve political activity or work for any political party. 2/ Under secion 125 (d) of the Regulation, no student may perform work on any project under the Work -Study Program for more than 15 hours in any week in which classes in which he is enrolled are in session, or for more than 40 hours in any other week. The Agency shall be deemed to be employer for purposes of this agreement. It has the right to control and direct the service of the students, not only as to the result to be accomplished, but also to the means by which the result is to be accomplished. The Institution shall be limited to determining that the students meet the eligibility requirements for employment under the College Work -Study Program, to assigning students to work for the agency, to determining that the students do perform their work in fact, and to disbursing the appropriate amounts to them. Compensation of students for work performed on a project under th,> agreement will be paid by the Institution,. All payments due as an employer's contribution under State or local workmen's compensation laws, or under other applicable laws, will be made by the Agency. All payments due as an employer's contribution under federal Social Security laws will be made by the Institution. Monthly the Agency will pay to the Institution an amount calculated to cover the Agency's share of the compensation of students employed under this Agree- ment. In addition, the Agency will pay monthly, by way of reimbursement to the Institution, or in advance, an amount equal to any and all payments required to be made by the Institution under Federal Social Security laws on behalf of students participation in projects under this agreement. July 1982 Date Date 0 gency Mayor, City of Hutchinson ns it ion 0 • 0 July 9,1982 Mr. Gary Plotz City Hall Hutchinson, Mn. 55350 Dear Mr. Plotz, I would like to be put on the agenda for City Council Meeting Tuesday July 27,1982, concerning the cutting of the fence at 229 - 5th Ave. N.W. Sincerely, RSC:rmc �� O July 20, 1982 LOAN AGREEMENT between CITY OF HUTCHINSON, MINNESOTA, and HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP Dated 1982 The City of Hutchinson, Minnesota, has granted a security interest in certain revenues to be received by the City of Hutchinson, Minnesota pursuant to this Loan Agreement to Citizens State Bank & Trust Co., pursuant to a Pledge Agreement dated , 1982, between the City of Hutchinson, Minnesota and Citizens State Bank & Trust Co. In TABLE OF CONTENTS 0 (Not a Part of This Loan Agreemeent) Page ARTICLE ONE - DEFINITIONS, EXHIBIT AND RULES; OF INTERPRETATION. . . . . . . . .. . . . . 1 -1 Section 1.01. Definitions . . .. . . . . 1 -1 Section 1.02. Rules of Interpretation. . . . . 1 -4 ARTICLE TWO - REPRESENTATIONS. . . . . . . 2 -1 Section 2.01. Representations by the C'aty 2 -1 Section 2.02. Representations by the Partnership . . . . _ . . . 2 -3 Section 2.03. Lender May Rely on Representations _ .. . . . 2 -5 ARTICLE THREE - THE LOAN . . . . . . . . . _ .. . . . 3 -1 Section 3.01. Source of Loan; Repaymemtt. . . . 3 -1 Section 3.02. Additional Payments . _ » . . . 3 -1 Section 3.03. Prepayment of Loan _ .. 3 -2 Section 3.04. Partnership's Obligations Unconditional . - .. . . . 3-2 Section 3.05. Partnership's Remedies _ 3 -2 Section 3.06. Completion of Project - 3 -2 Section 3.07. Overriding Provision ConYCerning Personal Liability, Limg_ttation of Liability of Partners hip. . . 3 -2 ARTICLE FOUR - PARTNERSHIP'S COVENANTS _ .. 4 -1 Section 4.01. Indemnity . . . _ . . . . 4 -1 Section 4.02. Notice of Default . . .. . . 4 -1 Section 4.03. Reports to Governmental Agencies 4 -1 Section 4.04. Mortgage of Facilities _ . . . . 4 -1 Section 4.05. Concerning the Project _ . . . . 4 -2 Section 4.06. Continuing Existence anti Qualification .. _ . 4 -2 Section 4.07. Financial Statements . 4 -2 Section 4.08. Assurance of Tax ExemptEon . . . 4 -2 Section 4.09. Assignment . . . . .. . . . . 4 -4 Section 4.10. Ownership and Liens . _ . . . . 4 -5 Section 4.11. Arbitrage . . . . . . . . . 4 -5 ARTICLE FIVE - EVENTS OF DEFAULT AND REMEDIES . . . 5 -1 Section 5.01. Events of Default . . _ . . . . 5 -1 Section 5.02. City's Remedies . .. . . . . 5 -2 Section 5.03. Disposition of Funds . _ . . . . 5 -2 Section 5.04. Manner of Exercise _ 5 -3 Section 5.05. Attorney's Fees and Expenses . . 5 -3 Section 5.06. Waiver of Events of Default . . 5 -3 Section 5.07. Effect of Waiver . . _ 5 -3 Section 5.08. Waiver of Stay or Extension Laws . . . . * ' * ' * * * - 5 -4 Section 5.09. Lender's Exercise f te Ct' Remedies . . . . . . . . . .. 5 -4 ARTICLE SIX - GENERAL . . . . . . . . . . . . . . . .. 6 -1 Section 6.01. Notices . . . . . . . . . . . _ 6 -1 Section 6.02. Binding Effect . . . . . . . . .. 6 -1 Section 6.03. Severability . . . . . . . . . _ .6 -1 Section 6.04. Amendments, Changes and Modifications _ 6 -1 Section 6.05. Execution Counterparts 6 -2 Section 6.06. Concerning the Note . . . . . ., 6 -2 Section 6.07. Limitation of City's Liability - 6 -2 SIGNATURES . . . . . . . . . . . . . . . . . . . . .. 6 -2 0 0 THIS LOAN AGREEMENT, dated , 1982, between the CITY OF HUTCHINSON, a municipal corporation and political subdivision in the State of Minnesota, called herein the City, and HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP, a Minnesota limited partnership, called herein the Partnership, WITNESSETH that the City and the Partnership each in consideration of the representations, covenants and agreements of the other as set forth herein, mutually represent, covenant and agree as follows: ARTICLE ONE DEFINITIONS, EXHIBIT AND RULES OF INTERPRETATION Section 1.01. Definitions. In this Agreement the following terms have the following respective meanings unless the context hereof clearly requires otherwise: Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Agreement: this Loan Agreement, including any amendment hereof or supplement hereto in accordance with the provisions hereof; Assignment: the Assignment of Rents and Leases, of even date herewith, given by the Partnership to the Lender, including any amendment thereof or supplement thereto in accordance with the provisions thereof; Building: the building, including the Fixtures, located on the Land, as it may at any time exist; City: the City of Hutchinson, Minnesota, its successors and assigns; Code: the Internal Revenue Code of 1954, as amended; Construction Costs: all and renovate and rehabilitate the not limited to the purchase price Building, site preparation costs, engineering fees, contractors' fe labor, material and services paid Partnership; 1 -1 costs paid to acquire Building, including but of the Land and architectural fees, es, and all costs of or incurred by the Construction Loan Agreement: the Construction Loan Agreement, of even date herewith, among the City, the Partnership and the Lender, including any amendment thereof or supplement thereto in accordance with the provisions thereof; Counsel: an attorney designated by or acceptable to the Lender, duly admitted to practice law before the highest court of any state; an attorney for the Partnership or City may be eligible for appointment as Counsel; Event of Default: any of the events described in Section 6.01 hereof; Facilities: The Land and the Building; Fixtures: those items defined as such in Section 1 -1 of the Mortgage; Holder: the registered owner of the Note; Land: the real estate described in Exhibit A to the Mortgage, together with all additions thereto and substitutions therefor; Lender: Citizens State Bank & Trust Co., Hutchinson, Minnesota, a Minnesota state bank, its successors and assigns; Loan: the Loan of the proceeds of the Note to be made by the City to the Partnership pursuant to the terms of Section 3.01 of this Agreement; Loan and Carrying Charges: all commitment fees to the Lender, brokerage fees, standby fees, interest charges, service fees, attorneys' fees (including attorneys for the City, Lender and bond counsel), funding fees, title insurance fees and charges, recording fees, registration taxes, real estate taxes, special assessments, insurance premiums and utility charges incurred by the Partnership in the renovation and rehabilitation of the Building and issuance of the Note; Mortgage: the Combination Mortgage and Security Agreement and Fixture Financing Statement between the Partnership, as Mortgagor, and the Lender, as Mortgagee, of even date herewith, including any amendment thereof or supplement thereto in accordance with the provisions thereof; 1 -2 0 0 Note: the Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project) to be issued by the City pursuant to the Resolution, to evidence the loan of up to $900,000 made.by the Lender to the City; Partnership: Hutchinson S & L Limited Partnership, a Minnesota limited partnership, its successors and assigns, which may assume its obligations in accordance with this Agreement; Permitted Encumbrances: the liens, charges and encumbrances listed as "Permitted Encumbrances" on Exhibit A to the Mortgage; Person: shall mean any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof; Plans and Specifications: the plans and specifications for the renovation and rehabilitation of the Building, which have been approved by the Lender and which are now on file in the offices of the Partnership and Lender, together with such modifications thereof and additions thereto as are reasonably determined by the Partnership to be necessary-or desirable for renovation and rehabilitation of the Building and are approved by the Lender; Pledge Agreement: the Pledge Agreement of even date herewith, executed by the City, including any amendment thereof or supplement thereto in accordance with the provisions thereof; Principal Balance the aggregate principal amount advanced on the Note from time to time pursuant to this Agreement and the Construction Loan Agreement, less the aggregate amount of installments thereof and any prepayments made in accordance with the terms of the Note which are attributable to payment of principal; Project: the acquisition of the Land and the Building and the renovation and rehabilitation of the Building; Project Costs: the total of all Construction Costs and Loan and Carrying Charges; 1 -3 Resolution: the Resolution of the City, adopted _, 1482, authorizing the issuance of the Note. Section 1.02. Rules of Interpretation. (1) This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota. (2) The words "herein" and "hereof" and words of similar import, without reference to any particular section or subdivision, refer to this Agreement as a whole rather than to any particular section or subdivision hereof. (3) References herein to any particular section or subdivision hereof are to the section or subdivision of this instrument as originally executed. (4) The Table of Contents and headings of articles and sections herein are for convenience only and are not a part of this Agreement. (5) Unless the context hereof clearly requires otherwise, the singular shall include the plural and vice versa, and the masculine shall include the feminine and vice versa. 1 -4 0 • • ARTICLE TWO REPRESENTATIONS 0 Section 2.01. Representations by the City. The City makes the following representations as the basis for its covenants herein: (1) The City is a municipal corporation and political subdivision duly organized and existing under its charter, the Constitution and laws of the State of Minnesota. (2) Based upon representations of the Partnership, the design and plan of the Project comprise real and personal properties useful in connection with the operation of a revenue - producing enterprise as contemplated by Section 474.02, Subdivision la, of the Act. (3) In authorizing the Project, the City's purpose is, and in its judgment the effect thereof will be, to promote the public welfare by the attraction, encouragement and development of economically sound industry and commerce so as to prevent the emergence of or to rehabilitate, so far as possible, blighted and marginal lands and areas of chronic unemployment; to retain industry's use of the available resources of the community in order to sustain the benefit of the community's existing investment in educational and public service facilities; to halt the movement of talented, educated personnel of mature age to suburban and other areas and thus to preserve the economic and human resources needed as a base for providing governmental services and facilities; and, by more intensive development of land available in the community, to provide a more adequate and better balanced tax base to finance the increase in the amount and cost of governmental services. (4) The financing of the Project, the issuance and sale of the Note, the execution and delivery of the Construction Loan Agreement, this Agreement and the Pledge Agreement, and the performance of all covenants and agreements of the City contained in the Note, the Construction Loan Agreement, this Agreement, the Pledge Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Construction Loan Agreement, this Agreement, the Pledge Agreement and the Note valid and binding obligations of the City enforceable in accordance with their terms have been duly authorized by resolutions of 2 -1 the governing body of the City adopted at meetings thereof duly called and held on , 1982, July 13, 1982 and , 1982, after a public hearing duly called, noticed and held on July 13, 1982. (5) The Facilities are located within the City limits at a site which is readily accessible to employees residing in the City and the surrounding communities, and the Project when completed will add to the tax base of the City and will accordingly be of direct benefit to the taxpayers of the City as well as those of the County and the school district in which the City is located. (6) The Project has been approved by the Commissioner of Energy, Planning and Development of the State of Minnesota as tending to further the purposes and policies of the Act. (7) To provide funds to be loaned to finance Project Costs, in anticipation of the repayment thereof, the City has duly authorized the Note in the principal amount of up to $900,000 to be issued upon the terms set forth in the Resolution, and under the provisions of the Pledge Agreement the City has assigned its interest in this Agreement and grant a security interest therein to the Lender as security for the payment of the principal of and interest and premium, if any, on the Note. (8) Pursuant to the Resolution, the City has authorized and directed the Lender to disburse the proceeds of the Note directly to the Partnership and such other parties as may be entitled to payment for Project Costs, upon receipt of such supporting documentation as the Lender may deem reasonably necessary, including compliance with all conditions set forth in the Construction Loan Agreement. (9) The execution and delivery of this Agreement, the Note, the Pledge Agreement and the Construction Loan Agreement will not conflict with or constitute on the part of the City a violation of any ixisting law or breach of, or a default under, any existing agreement, indenture, mortgage, lease, or other instrument to which the City is subject or is a party or by which it is bound. Section 2.02. Representations by the Partnership. The Partnership makes the following representations as the basis for its covenants herein: 2 -2 • 0 (1) The Partnership is a limited partnership duly organized and qualified to do business in the State of Minnesota, and has power to enter into and has authorized execution and delivery of this Agreement, the Mortgage, the Assignment and the Construction Loan Agreement. (2) The execution and delivery of this Agreement, the Mortgage, the Assignment and the Construction Loan Agreement, the consummation of the transactions contemplated hereby and the fulfillment of the terms and conditions hereof and thereof do not and will not conflict with or result in a breach of any of the terms or conditions of any mortgage, indenture, loan agreement or any instrument to which the Partnership is now a party or to which any of the property of the Partnership is subject and.do not and will not constitute a default under any of the foregoing or result in the creation or imposition of any lien, charge or encumbrance of any nature upon any of the property or assets of the Partnership contrary to the terms of any instrument or agreement. (3) The issuance of of this Agreement by the City substantial inducement to the Project within the City. the Note and the execution have been and are a Partnership to undertake the (4) The Partnership does not rely on any warranty of the City, either express or implied, that the Facilities upon completion of the Project will be suitable to the Partnership's needs and recognizes that under the Act the City is not authorized to operate the Facilities or to expend any funds thereon other than the revenues received by it therefrom or the proceeds of the Note or other funds granted to it for purposes contemplated in the Act. (5) There is not pending any suit, action or proceeding against or affecting the Partnership before or by any court, arbitrator, administrative agency or other governmental authority which materially and adversely affects the validity, as to the Partnership, of any of the transactions contemplated hereby or the ability of the Partnership to perform its obligations hereunder or as contemplated hereby. (b) The Project as designed meets, on the date hereof, all material requirements of law, including requirements of any federal, state, county, city or other governmental authority having jurisdiction over the Partnership, the Project or the Facilities. 2 -3 (7) The Partnership has caused or will cause to be recorded and filed in the office of the County Recorder of McLeod County, Minnesota, the Mortgage and the Assignment, and such other documents as Counsel has deemed necessary or desirable to perfect or protect the security interest and lien of the Lender in and to the Facilities. (8) The proceeds of the Note, together with any other funds contributed to the payment of Project Costs by the Partnership, will be sufficient to pay the cost of acquiring the Land and constructing and otherwise rendering the Facilities suitable for use as a multi- tenant commercial building and all costs and expenses incidental thereto. (9) The Partnership will cause the Building to be renovated and rehabilitated in accordance with the provisions of the Construction Loan Agreement. (10) Substantially all of the proceeds of the Note are to be used for the acquisition, construction, reconstruction or improvement of land or property of a character subject to the allowance for depreciation under current provisions of the Code. (11) Neither the Partnership nor any "related person," within the meaning of Section 103(b)(6)(E) of the Code is or has been a principal user of facilities within the City financed, in whole or in part, from proceeds of obligations of a political subdivision. (12) To the best of the Partnership's knowledge (i) no councilmember or other officer of the City is directly or indirectly financially interested in this Agreement or any contract, agreement or job hereby contemplated to be entered into or hereby undertaken, (ii) no official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, and (iii) the Partnership has not paid or given any official or employee of the City any money or other consideration for obtaining this Agreement. Section 2.03. Lender May Rely On Representations. The City and the Partnership agree that the representations contained in this Article Two are for the use and benefit of the Lender, and the Lender shall be entitled to rely thereon. 2 -4 • • 0 ARTICLE THREE THE LOAN Section 3.01. Source of Loan; Repayment. The City agrees to lend the Partnership, and the Partnership agrees to borrow from the City, upon the terms and conditions set forth herein and in the Construction Loan Agreement, the proceeds received from the sale of the Note and advanced to the City by the Lender under the Construction Loan Agreement. Subject to any rights of prepayment granted herein and in the Resolution and the Note, the Partnership agrees to repay the Loan in amounts sufficient to pay the principal of, premium, if any, and interest on the Note when due, at maturity or upon a call for redemption or upon an acceleration of maturity thereof. Tne obligation of the Partnership to repay the Loan hereunder shall commence as of the date of the Note. In the event that interest on the Note becomes subject to federal income tax pursuant to a "Determination of Taxability" as defined in Section 4.08(2) hereof, the interest rate of the Note shall be automatically increased as provided in the Note and in Section 4.08(3) hereof, and the payments required hereunder shall thereafter be computed using such increased rate. In addition to the automatic increase in interest rate, the Partnership shall pay the additional amounts - specified in Section 4.08(3). All payments are to be applied first to interest then due and then to the principal balance. In any event, the payments hereunder shall be sufficient to enable the City to pay all principal and interest due on the Note as such principal and interest become due, at maturity, upon redemption or otherwise. All payments hereunder shall be made directly to the Holder at its principal office for the account of the City. In the event the Partnership shall fail to make any of the Loan repayments required by this Section 3.01, the item so in default shall continue as an obligation of the Partnership until the amount in default shall have been fully paid, and, to the extent permitted by law, the Partnership agrees to pay interest thereon at the rate borne_by the Note. Section 3.02. Additional Payments. The Partnership agrees to pay the City as additional payments under this Agreement, all reasonable expenses incurred by the City in relation to the Project which are not 3 -1 otherwise required to be paid by the Partnership under the terms of this Agreement, provided that the Partnership shall have given written approval to the incurring of such expenses. The expenses referred to in this Section 3.02 shall not be construed to include any of the amounts payable by the Partnership under Section 3.01 hereof. Section 3.03. Prepayment of Loan. The Partnership may at any time transmit funds directly to the Holder, for the account of the City, in addition to amounts, if any, otherwise required to be paid at any time pursuant to this Agreement, and direct that said money be applied to the prepayment of the Principal Balance of the Note which is then or will be prepayable in accordance with the Note. Section 3.04. Partnership's Obligations Unconditional. All payments required of the Partnership ereunder shall be paid without notice or demand and without set -off, counterclaim, abatement, deduction or defense. The Partnership will not suspend or discontinue any payments and will perform and observe all of its other agreements in this Agreement and, except as expressly permitted herein, will not terminate this Agreement for any cause, including but not limited to any acts circumstances that may constitute failure of consideration, destruction or damage to the Project, eviction by paramount title, commercial frustration of purpose, bankruptcy or insolvency of the City or the Holder, change in the tax or other laws or administrative rulings or actions of the United States of America or of the State of Minnesota or any political subdivision thereof, or failure of the City to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement. Section 3.05. Partnership's Remedies. Nothing contained in this Article shall be construed to release the City from the performance of any of its agreements in this Agreement, and if the City should fail to perform any such agreement, the Partnership may institute such action against the City as the Partnership may deem necessary so long as such action shall not violate the Partnership's agreements in Section 3.04. Section 3.06 Completion of Project. The Partnership will pay all Project Costs and any and all other costs and expenses incidental thereto subject to the Partnership's right to receive reimbursement from the 3 -2 • • proceeds of the Note under the terms of tha? Construction Loan Agreement; provided, however, it is excpressly understood and agreed by the Partnership tihat it will cause the Project to be completed regardless of whether the proceeds of the Note are sufficient to pay the Project Costs and other incidental costs and expenses. Section 3.02. Overriding Provision Concer Liability. Limitation of Liabilitvw of Partnership. Notwithstanding anything apparently to the contrary herein contained, neither the_Partt.nership nor any of its partners, general or limited, shall. :have any personal liability for the performance of "he terms of this Loan Agreement, including without limmtation the repayment of the Loan hereunder, and the sma a right and recourse the City or the Holder may have uRp�on the occurrence of an Event of Default hereunder shall be to enforce the rights herein contained, and nedther the City nor the Lender shall have any right to sue„ bring action against or collect any personal judgments against the Partnership, or any of its partners, gener a3 or limited. 3 -3 ARTICLE FOUR PARTNERSHIP'S COVENANTS Section 4.01. Indemnity. The Partnership will pay and will protect, indemnify and save the City, its officers and employees harmless from and against all liabilities, losses, damages, costs, expenses (including reasonable attorneys' fees), causes of action, suits, claims, demands and judgments of any nature arising from: (1) any injury to or death of any person or damage to property in or upon the Facilities or growing out of or connected with the use, nonuse, condition or occupancy of the Project or a part thereof; (2) violation of any agreement or condition of this Agreement, except by the City; (3) violation of any contract, agreement or restriction by the Partnership relating to the Facilities; (4) violation of any law, ordinance or regulation affecting the Facilities or a part thereof or the ownership, occupancy or use thereof; (5) any statement or information relating to the expenditure of the proceeds of the Note contained: in the "Arbitrage Certificate" or similar document furnished by the Partnership to the City which, at the time made, is untrue or incorrect in any material respect; and (6) the issuance and the sale of the Note and the carrying out of the transactions contemplated herein. The provisions of this Section 4.01 shall survive the payment of the Note. Section 4.02. Notice of Default. The Partnership will give to the Holder and the City ,prompt notice of any condition or event that constitutes a default hereunder. Section 4.03. Reports to Governmental Agencies. The Partnership will furnish to agencies of the State of Minnesota, including but not limited to, the Commissioner of Energy, Planning and Development, such periodic reports or statements as they may reasonably require throughout the term of this Agreement. 4 -1 • • 0 0 Section 4.04. Mortgage of Facilities. As additional security for the Lender and to induce the City to issue and deliver the Note, the Partnership agrees to execute and deliver, or cause to be executed and delivered, the Mortgage, the Assignment and other agreements specified in the Construction Loan Agreement to the Lender, which documents shall remain in effect until all payments required hereunder have been made. Section 4.05. Concerning the Project; Insurance. The Partnership agrees to pay all expenses of the operation and maintenance of the Project, including, but not limited to, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof and all taxes and special assessments levied upon or with respect to the Project and payable during the term of this Agreement, subject to the right of the Partnership to contest these expenses under the provisions of the Mortgage. To this end the Partnership agrees to perform all the terms and covenants of Section 4 -4 of the Mortgage as fully as if such Section 4 -4 were set forth in full herein. Section 4.06. Continuing Existence and Qualification. The Partnership is and throughout the term of this Loan Agreement will maintain its existence as a general partnership organized under the laws of the State of Minnesota and will not wind up or sell or otherwise dispose of all or substantially all of the partnership assets, provided that the Partnership may sell or otherwise transfer to a partnership or corporation organized under the laws of one of the United States, or an individual, all or substantially all of its partnership assets as an entirety and thereafter wind up if (a) the transferee individual, corporation or partnership assumes in writing all of the obligations of the Partnership under this Loan Agreement and (b) written consent is obtained from the Holder. 4.07.- Financial Statements. The Partnership shall provide to the City within ninety (90) days after any request of the City therefor, copies of all financial statements or reports of the Partnership which are provided to the Lender under Section 4 -6 of the Mortgage. 4.08. Assurance of Tax Exemption. (1) The Partnership recognizes that the exemption from Federal income taxation of the interest to be paid on the Note is dependent upon qualification of the 4 -2 Note under the "small issue exemption" set forth in Section 103(b)(6)(A) of the Code. The Partnership represents to and covenants with the City and Lender: (a) that it will fulfill all conditions specified in Section 103(b)(6)(A) to qualify the Note as a small issue thereunder; (b) that the Partnership will not take or permit any action which would otherwise cause the interest on the Note to become subject to federal income taxation in the hands of Holder, unless such Holder is a substantial user of the Project or a related person, as those terms are defined in the Code; and (c) that the Partnership will comply with and fulfill all other requirements and conditions of the Code and regulations and rulings issued pursuant thereto relating to the acquisition and construction and operations of the Project to the end that the interest on the Note shall at all times be exempt from Federal income taxation. (2) For the purpose of this Section, a "Determination of Taxability" shall mean the issuance of a statutory notice of deficiency by the Internal Revenue Service, a ruling by the National Office of the Internal Revenue Service, or a final decision of a court of competent jurisdiction which holds in effect that the interest payable on the Note is includible in the gross income of the Holder for federal income tax purposes for any reason if the period, if any, for contest or appeal of such action, ruling or decision by the Partnership or Holder has expired without any such contest or appeal having been properly instituted by the Holder or the Partnership. The "Date of Taxability" shall mean that point in time, as specified in the determination, ruling, or decision, that the interest payable on the Note becomes includible in the gross income of the Holder for federal income tax purposes. (3) Upon a Determination of Taxability, the rate of interest on the Note is automatically increased, effective as of the Date of Taxability, to the rate of interest provided in the Note. In such case, the Partnership agrees also to pay immediately, directly to the Holder on behalf of the City, the aggregate difference between (i) the payments actually made from the Date of Taxability and (ii) the payments which would have been made during such periods if the increased rate had been in effect. 4 -3 0 0 (4) In the event an investigation or audit is commenced by the Internal Revenue Service questioning the federal income tax exemption of the interest payable on the Note or in the event the Holder chooses to contest any statutory notice of deficiency, ruling of the Internal Revenue Service or judgment of a court of competent jurisdiction, the Holder, at its election, may increase the rate of interest on the Note to the level set forth in subsection (3) above, and require that the Partnership make payments based upon such increased rate pending the final results of such investigation, audit or contest. The additional funds collected as a result of the rate increase shall be placed in escrow by the Holder and shall bear interest at the then existing passbook savings rate of the Lender. In the event the contest is finally resolved in favor of the Holder and the interest on the Note continues to be exempt from federal income taxation, the funds held in such escrow account shall be returned to the Partnership. If the contest is resolved against the Holder and interest payable on the Note is held to be subject to federal income taxation, the amount on hand in the escrow account shall be applied to the extent necessary to the additional payment then due pursuant to subsection (3) hereof, and the balance, if any, returned to the Partnership. (5) Notwithstanding anything to the contrary contained in this Agreement, the failure by the Partnership to observe and perform any covenant or agreement by it under subsection (1) shall not be considered a default or an Event of Default hereunder. Section 4.09. Assignment. So long as there is no default or Event of Default under this Agreement, the Partnership shall have the right to lease, sell, assign or convey all of its right, title and interest in the Project or any part thereof and assign all of its obligations under this Agreement to another Person provided: (a) such sale and assignment shall not subject the interest payable on the Note to United States income taxes or cause the Note to be deemed an "arbitrage bond" within the meaning of Section 103(c) of the Code and the regulations thereunder, (b) thirty (30) days prior to such sale and assignment (excluding any lease) the Partnership shall give the City and the Holder written notice thereof, (c) the prior written approval of the Holder shall have been obtained, and (d) the purchaser and assignee (excluding any lessee) shall assume in writing all of the obligations of the Partnership under this Agreement by instrument in form and substance satisfactory to the Holder. 4 -4 Section 4.10. Ownership and Liens. The Partnership covenants and warrants tnat it lawfully owns and is lawfully possessed of the Land and has a good and indefeasible estate therein in fee simple, subject only to Permitted Encumbrances. Section 4.11. Arbitrage. The Partnership covenants that no use will be made of the proceeds of the Note which will cause the Note to be classified as an arbitrage bond within the meaning of Section 103(c)(2) of the Code and the regulations promulgated thereunder. Pursuant to such covenant the Partnership will comply throughout the term of the issue of the Note with the requirements of Section 103(c) of the Code and the regulations promulgated thereunder. 4 -5 • • 9 0 ARTICLE FIVE EVENTS OF DEFAULT AND REMEDIES Section 5.01. Events of Default. Any mme or more of the following events is an Event of Default_ under this Agreement: (1) if the Partnership shall fail to ma-ke any payments required under this Agreement on or befor=e the date that the payment is due; (2) if the Partnership shall do any act* or thing in contravention of Sections 4.06 or 4.09 hereof"; (3) if the Partnership shall fail to observe and perform any other covenant, condition or agreemesmt on its part under this Agreement, other than the covenazmts contained in Section 4.08(1) or Section 4.11 hereof, for a period of thirty (30) days after written notice„ specifying such default and requesting that it be remedied, given to the Partnership by the City ors -the Holder, unless the Holder shall agree in writing! tD an extension of such time prior to its expiration or for such longer period as may be reasonably necessary to s6medy such default, provided that the Partnership is psgiceeding with reasonable diligence to remedy the same; (4) (a) if the Partnership shall file a petition for relief in bankruptcy or for an arrangement pursuant to any present or future federal bankruptcy act or under any similar federal or state law, or an order for relief of the Partnership shall be entered, or shall make am assignment for the benefit of its creditors, or small admit in writing its inability to pay its debts generally as they become due; or (b) if a petition or answer proposing the entry of an order for relief of the Partnership under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not b>e discharged or denied within thirty (30) days after the filing thereof; or (c) a receiver, trustee, custodian or liquidator of the Partnership or of all or substantially all of the assets of the Partnership or of the Facilities shall be appointed in any proceeding brought against the Partnership and shall not be discharged within thirty (30) days after such appointment, or the Partnership shall consent to or acquiesce in such appointment; or ((d) if the estate or interest of the Partnership in the Facilities or a part thereof shall be levied upon or attached in any 5 -1 proceeding and such process shall not be vacated or discharged within thirty (30) days after such levy or attachment; (5) if the Partnership shall default or fail to perform any covenant, condition or agreement on its part under the Mortgage, the Assignment or the Construction Loan Agreement or an Event of Default, as defined therein, occurs under any of said documents; or (6) if there is a determination that any representation or warranty made by the Partnership in this Agreement or by the Partnership in any certificate, document,or instrument furnished in connection with the issuance and sale of the Note or.under the terms of this Agreement is untrue in any material adverse respect; provided, that if the effect of such misrepresentation is to cause the interest on the Note to become subject to federal income taxation pursuant to a Determination of Taxability then such misrepresentation shall not be an Event of Default hereunder and the Holder shall be limited to the remedies provided in Section 4.08 hereof. Section 5.02. City's Remedies. Subject to the provisions of Section 3.07 hereof, whenever any Event of Default referred to in Section 5.01 shall have happened and be subsisting, any one or more of the following remedial steps may be taken by the City, but only with the prior written consent of the Holder: (1) The City may, at its option, declare all installments of the Loan payable under this Agreement (being an amount equal to that necessary to pay in full the Note assuming acceleration of the Note under the terms thereof and pay all other indebtedness thereunder) to be immediately due and payable, whereupon the same shall become immediately due and payable by the Partnership. (2) The City may take whatever action at law or in equity which may appear necessary or appropriate to collect the amounts then due and thereafter to become due or to enforce performance and observance of any obligation, agreement or covenant of the Partnership under this Agreement. 5-2 0 • 0 0 Section 5.03. Disposition of Funds. Any amounts collected pursuant to action taken under Section 5.02 shall be applied to the then outstanding principal balance of the Loan, and interest thereon, due hereunder and then applied by the Holder to the then outstanding balance of principal and interest due on the Note, such amounts being applied first to interest and then to principal. Section 5.04. Manner of Exercise. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the City to exercise any remedy reserved to it in this Article Five, it shall not be necessary to give any notice, other than such notice as may be herein expressly required,.but no remedy shall be exercised by the City without the prior written consent of the Holder. Section 5.05. Attorneys' Fees and Expenses. In the event the Partnership_ should default under any of the provisions of this Agreement and the City should employ attorneys or incur other expenses for the collection of amounts due hereunder or for the enforcement of performance of any obligation or agreement on the part of the Partnership, the Partnership will on demand pay to the City the reasonable fee of such attorneys and such other expenses so incurred. Section 5.06. Waiver of Events of Default. If, after any default shall have occurred which does not result in a nonpayment of repayments of the Loan, and prior to the commencement of the exercise of the remedy provided in Subsection 1 of Section 5.02 hereof, the Partnership shall have completely cured such default by depositing with the Holder sufficient moneys or by performing such other acts or things in respect of which it may have been in default under this Agreement as the Holder shall determine, then in every such case such default shall be waived, rescinded and annulled by the Holder by written notice given to the Partnership, but no such waiver, rescission and annulment shall extend to or affect any subsequent default or impair any right or remedy consequent thereon. 5 -3 Section 5.07. Effect of Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. Section 5.08. Waiver of Stay or Extension Laws. The Partnership covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead or in any manner whatsoever claim, or take the benefit or advantage of any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement, the Construction Loan Agreement or the Mortgage; the Partnership (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the City or the Lender but will suffer and permit the execution of every such power as though no such law had been enacted. Section 5.09. Lender's Exercise of the City's Remedies. Whenever any Event of Default shall have happened and be subsisting, the Lender may, but except as otherwise provided in the Mortgage shall not be obliged to, exercise any or all of the rights of the City under this Article Five, upon notice as required of the City unless the City has already given the required notice. 5 -4 0 • 0 0 ARTICLE SIX GENERAL Section 6.01. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by certified or registered mail, postage prepaid, with proper address as indicated below. The City, the Partnership and the Lender may, by written notice given by each to the others, designate any address or addresses to which notices, certificates or other communications to them shall be sent when required as contemplated by this Agreement. Until otherwise provided by the respective parties, all notices, certificates and communications to each of them shall be addressed as follows: To the City: City of Hutchinson City Hall Hutchinson, Minnesota 55350 Attn: City Administrator To the Partnership: Hutchinson S & L Rehab, Limited Partnership Hutchinson, Minnesota 55350 To the Lender Citizens State Bank & Trust Co. 102 Main Street South Hutchinson, Minnesota 55350 Attn: LeRoy M. Ash£eld, Vice President Section 6.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the City and the Partnership and their respective successors and - assigns. Section 6.03. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 6.04. Amendments, Changes and Modifications. Except as otherwise provided in this Agreement or in the Resolution, subsequent to the initial issuance of the Note and before the Note is satisfied and discharged in accordance with its terms, this Agreement may not be effectively amended, changed, modified, altered Cam! or terminated without the written consent of the Holder. The Partnership recognizes that the City's interest in, to and under this Agreement will be assigned to the Lender as security for the prompt payment of the principal, premium, if any, and interest on the Note and consents to such assignment. Section 6.05. Execution Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 6.06. Concerning the Note. The Partnership agrees to be bound by all of the terms and conditions set forth in the Note. Section 6.07. Limitation of City's Liability. It is understood and agreed by the Partnership and the Lender that no covenant of the City herein shall give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers. It is further understood and agreed by the Partnership and the Lender that the City shall incur no pecuniary liability hereunder and shall not be liable for any expenses related hereto, all of which the Partnership agrees to pay. If notwithstanding the provisions of the immediately preceding sentence, the City incurs any expense, or suffers any losses, claims or damages or incurs any liabilities, the Partnership will indemnify and hold harmless the City from the same and will reimburse the City for any legal or other expenses incurred by the City in relation thereto, and this covenant to indemnify, hold harmless and reimburse the City shall survive delivery of and payment for the Note. IN WITNESS WHEREOF, the City and the Partnership have caused this Agreement to be executed in their respective names as of the date first above written. [Seal] CITY OF HUTCHINSON, MINNESOTA By. Mayor Attest: City Clerk - Administrator Cam? • 0 i • HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP a a limited partner a a limited partner 6 -3 r' ;. 0 • PLEDGE AGREEMENT between CITY OF HUTCHINSON, MINNESOTA, and CITIZENS STATE BANK & TRUST CO. Dated , 1982 July 2U, 1`1pdz r M • PLEDGE AGREEMENT THIS PLEDGE AGREEMENT, dated , 1982, between the City of Hutchinson, a municipal corporation and political subdivision of the State of Minnesota (hereinafter referred to as the "City "), and Citizens State Bank & Trust Co., in Hutchinson, Minnesota, a Minnesota state bank (hereinafter referred to as the "Lender "); WITNESSETH: WHEREAS, the City has executed its Commercial Development Revenue Note ( Hutchinon S & L Rehab, Limited Partnership Project) (the Note), of even date herewith in favor of the Lender, which Note is in the principal amount of up to Nine Hundred Thousand Dollars ($900,000); and WHEREAS, the City has entered into a Loan Agreement (the "Agreement ") with Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership (the Partnership), of even date herewith, whereby the City will make available the proceeds of the Note to the Partnership and the Partnership will repay the loan upon the terms set forth therein; and WHEREAS, the City is desirous of further securing the Note issued to the Lender and of inducing the Lender to advance funds thereon to the Partnership on behalf of the City. NOW, THEREFORE, as an inducement to the Lender to advance funds on the Note and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the parties hereby agree as follows: 1. In order to secure the due and punctual payment of the Note, the City does hereby grant to the Lender a security interest in all of the City's right, title and interest in and to the Agreement, including, but not limited to, the City's right to receive loan repayments (except the City's right to indemnification under Sections 4.01 and 6.07 thereof, attorney's fees and expenses under Sections 3.02 and 5.05 thereof and the City's annual fee provided in Section 3.02 thereof). 2. The City hereby represents and warrants to the Lender that the City is the owner of the Agreement and all rights incident thereto, free and clear of any lien, security interest or other encumbrance other than the security interest arising hereunder. 3. The City hereby authorizes the Lender to exercise, whether or not an Event of Default has occurred under the Agreement, either in the City's name or the Lender's name, any and all rights or remedies available to the City under the Agreement. The City agrees, on request of the Lender to execute and deliver to the Lender such other documents or instruments as shall be deemed necessary or appropriate by the Lender at any time to confirm or perfect the security interest hereby granted. 4. The City will not: (a) exercise or attempt to exercise any remedies under the Agreement, (except in connection with the City's right to indemnification under Sections 4.01 and 6.07 thereof, attorney's fees and expenses under Sections 3.02 and 5.05 thereof and the City's annual fee provided in Section 3.02 thereof) or terminate, modify or accept a surrender of, or offer or agree to any termination, modification or surrender of the same or by affirmative act, consent to the creation or existence of any security interest or other lien in the Agreement to secure payment of any other indebtedness; or (b) receive or collect or permit the receipt or collection of any payments, receipts, rentals, profits or other moneys under the Agreement (other than any payments to be made by the partnership pursuant to the City's right of indemnification contained in Section 4.01 and 6.07 thereof, the City's right to attorney's fees and expenses under Sections 3.02 and 5.05 thereof and the City's right to the annual fee provided in Section 3.02 thereof) or assign, transfer or hypothecate (other than to the Lender hereunder) any of the same then due or to accrue in the future. 5. The City expressly covenants and agrees that the Lender shall be entitled to receive all payments under the Agreement, other than any payments to be made by the Partnership pursuant to the City's right of indemnification contained in Section 4.01 and 6.07 thereof, the the City's right to attorney's fees and expenses under Section 3.02 and 5.05 thereof and the City's right to the annual fee provided in Section 3.02 thereof. The Lender covenants and agrees that all -2- -1 payments received by the Lender shall be applied to the payment of principal and interest of the Note. 6. If an Event of Default (as defined in the Agreement) shall occur and be continuing, the Lender may exercise any one or more or all, and in any order, of the remedies set forth in the Agreement, it being.expressly understood that no remedy therein conferred is intended to be exclusive of any other remedy or remedies; but each and every remedy shall be cumulative and shall be in addition to every other remedy given herein or now or hereafter existing at law or in equity or by statute. 7. Whenever any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all the covenants, promises and agreements in this Pledge Agreement contained by or on behalf of the City or the Lender shall bind and inure to the benefit of the respective successors and assigns of such parties whether so expressed or not. 8. The unenforceability or invalidity of any provision or provisions of this Pledge Agreement shall not render any other provision or provisions herein contained unenforceable or invalid. 9. This Pledge Agreement shall in all respects be construed in accordance -with and governed by the laws of the State of Minnesota. This Pledge Agreement may not be amended or modified except in writing signed by the City and the Lender. 10. This Pledge Agreement may be executed, acknowledged and delivered in any number of counterparts and each of such counterparts shall constitute an original but all of which together shall constitute one agreement. 11. The terms used in this Pledge Agreement which are defined in the Agreement shall have the meanings specified therein unless the context of this Pledge Agreement otherwise requires, or unless such terms are otherwise defined herein. 12. The Lender recognizes and agrees to the limitation of the City's liability set forth in Section 6.07 of the Agreement. -3- IN WITNESS WHEREOF, the City and the Lender have caused this Pledge Agreement to be duly executed as of the day and year first above written. (SEAL) CITY OF HUTCHINSON, MINNESOTA 10 ayor Attest: City Clerk— Administrator CITIZENS STATE BANK & TRUST CO. By Its —4— • ,July cU, • • CONSTRUCTION LOAN AGREEMENT THIS CONSTRUCTION LOAN AGREEMENT, made and entered into this day of , 1982 (the 'Agreement'), by and among HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP, a Minnesota limited partnership ( "Borrower "), CITIZENS STATE BANK & TRUST CO., a Minnesota state bank ('Lender"), and the CITY OF HUTCHINSON, a Minnesota municipal corporation ( "City "); WITNESSETH THAT in consideration of the mutual covenants and agreements hereinafter contained the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS For purposes of this Agreement, the following terms shall have the following meanings: 1.1 'Collateral Documents" shall mean the following documents, each of which shall be in form and substance acceptable to Lender: (a) Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project) of the City (the "Note ") in the principal amount of up to $900,000 made payable to the Lender or assigns. �/ L (b) A Combination Mortgage and Security Agreement and Fixture Financing Statement (the "Mortgage "), from the Borrower to the Lender, securing the Note, and constituting a first and prior lien on the Project. (c) Uniform Commercial Code Financing Statements. (d) Loan Agreement (the "Loan Agreement ") between the City and the Borrower. (e) Pledge Agreement assigning City's interest in the Loan Agreement to Lender. (f) An Assignment of Rents and Leases (the "Assignment") from the Borrower to the Lender, constituting additional security for the Note. (g) A Commitment for a Mortgagee's Policy of Title Insurance issued by Title insuring the Mortgage to be a first and prior lien on the Project and insuring Lender against claims for mechanic's liens and against claims of usury. (h) Resolution of the City authorizing the execution and delivery of the Note and such other Collateral Documents as the City is required by the terms hereof to execute and deliver, and such other certificates, -2- • 0 documents and other evidence of compliance with the provisions of Minnesota Statutes, Chapter 474, as Lender or its counsel or bond counsel may require. (i) Leases (the "Leases ") satisfactory to Lender of space in the Project between Borrower and the tenants listed below: Tenant 1.2 "Completion Date ", except as hereinafter provided, shall mean the earlier of (i) , 198, or (ii) the date on which.a certificate of occupancy for the Improvements is issued by the City. 1.3 "Construction Costs" shall mean the cost of the Land and all costs paid to acquire the Land and renovate and rehabilitate the Project including, but not limited to, site preparation costs, architectural fees, engineering fees, and all costs of labor, material and services paid or incurred by Borrower. 1.4 "Construction Documents" shall mean the following documents, all of which shall be in form and substance acceptable to Lender: (a) Plans and Specifications described in paragraph 1.5 hereof. -3- (b) Certificates of Builders' Risk Non - Reporting Completed Value Form Insurance. (c) Certificates of Liability Insurance. (d) Survey prepared by a registered land surveyor describing and showing the Land, the location of all buildings and improvements, all easements and rights -of -way (by document number), encroachments and other encumbrances on the Land, all adjoining roads and streets, building restriction and set -back lines and other matters required by Lender. (e) Sworn construction and project cost statement certified to by Borrower stating in full the Total Project Costs and itemizing Total Project Costs as required by Lender. (f) Signed copy of the construction contract and architect contract executed by Borrower and the general contractor and architect contract, respectively, for the Project, and photocopies of all major subcontracts, such general construction contract and major subcontracts to provide that the contractor shall perform the agreement contained in -4- • 0 such contract for Lender should Lender desire to take over such contract after default by Borrower under this Agreement. (g) All building permits and such other evidence as Lender may require to establish that all necessary building, zoning, planned unit development, subdivision, platting, environmental protection and land use permits and approvals for the Project have been obtained, and that the Project as constructed will comply in all respects with all applicable building, zoning, planned unit development, subdivision, platting environmental protection and land use ordinances, laws, regulations and requirements, including, but not limited to, an opinion of counsel for the Borrower pertaining to such reasonable matters in form and substance acceptable to Lender, which opinion shall be updated as and when requested by Lender. (h) Soil tests of the Land. (i) M.A.I. Appraisal by , showing the Land and Improvements to have a value, if completed -5- pursuant to the Plans and Specifications, of not less than $ (j) Evidence of availability of utility services. 1.5 "Improvements" shall be the approximately square foot multi- tenant commercial building and other improvements to be renovated and rehabiltated on the Land by Borrower in accordance with the Plans and Specifications which are described on Exhibit B attached hereto and made a part hereof. 1.6 "inspector" shall mean or any licensed engineer or architect designated by Lender. 1.7 "Land" shall mean the real property located in the County of McLeod, State of Minnesota, legally described on Exhibit A attached hereto and made a part hereof. Trust Co. 1.8 'Lender" shall mean Citizens State Bank & 1.09 "Loan" shall mean the loan referred to in Article II hereof evidenced by the Note to the extent Lender is required to make advances under provisions of this Agreement. 1.10 'Loan and Carrying Charges" shall mean all commitment fees to Lender, brokerage fees or finder's fees, standby fees, interest charges, service fees, attorney fees (including attorneys for Lender, City, 0 0 0 Borrower and Bond Counsel), administrative fees, fiscal consultant's fees, contractors fees, developers fees, inspection fees (including those of Inspector) title insurance fees and charges, recording fees, registration taxes, and utility charges incurred by Borrower in the acquisition of the Project and the issuance of the Note. 1.11 'Organizational Documents" shall mean the following documents, each of which shall be in form and substance acceptable to Lender: (a) A copy of the Partnership Agreement of Borrower certified to by all of the general partners. (b) An opinion of counsel for Borrower stating that the Borrower has been duly organized under Minnesota law and that each of the Collateral Documents to which it is a party has been duly executed and delivered and is the legal and binding obligations of Borrower, enforceable in accordance with their respective terms, and is not usurious. 1.12 'Owner Equity' shall mean the total of all Project Costs less the amount of the Loan, which Lender shall require to be paid by Borrower. 1.13 'Project' shall mean the Land and Improvements as they may at any time exist. -7- 1.14 "Project Costs" shall mean all Construction Costs and Loan and Carrying Charges. 1.15 'Title" shall mean ARTICLE II THE LOAN 2.1 Lender agrees to purchase the Note and to loan to City, and City agrees to borrow from Lender, an amount up to but not greater than Nine Hundred Thousand Dollars ($900,000), by making advances thereof to the Borrower on behalf of the City, upon and pursuant to the teems and conditions set forth herein and in the Note and the Loan Agreement. The proceeds of the Note shall be advanced in stages by Lender to Title and disbursed by Title pursuant to the provisions of Article III. The City, in turn, agrees to lend the funds so advanced to it to the Borrower as set forth in the Loan Agreement. The parties hereto agree that all advances to be made by the City to the Borrower pursuant to the Loan Agreement may be made by the Lender advancing funds directly to the Borrower hereunder, and all funds so advanced shall constitute advances by Lender to the City evidenced by the Note and shall also constitute advances by the City to Borrower under the Loan Agreement. The City further 0 0 9 0 agrees that each advance to be made hereunder may be requested directly from the Lender by the Borrower. ARTICLE III ADVANCES AND DISBURSEMENTS 3.1 Upon written request by Borrower, made no more often than monthly, Lender shall advance to Title amounts certified to be currently payable by Borrower or reimbursable to Borrower for Project Costs paid or incurred pursuant to a Draw Request in form and substance acceptable to Lender and Title. All Construction Costs shall have been approved in writing by the Inspector. All Loan and Carrying Charges shall be approved by Lender and to the extent payable to Lender need not be disbursed to Title but may be immediately credited by Lender. Title shall disburse all funds advanced to it under this Agreement as Title, in its sole discretion, shall deem necessary to perform its obligations under this Agreement. Provided, however, if Title shall, in its opinion, be unable to perform its obligations hereunder, Title shall have the right to refuse to disburse said advance. In the event Title shall fail to disburse any advance within five (5) business days after the date of advance, Title shall return said advance to Lender and interest on such advance shall abate from and after the date of such return. Any amounts advanced to Title from cm the Construction Fund and returned by Title to Lender shall not be deemed to have been advanced under the Collateral Documents. 3.2 Title shall not disburse any advance hereunder unless it shall insure Lender against all claims for mechanic's liens against the Project. Within three (3) business days of the date of each disbursement, Title shall deliver to Lender such written documents, if any, as may be necessary to confirm Title's commitment to insure Lender against mechanic's liens and any changes in the status of title shown in the original Commitment or Binder of Title. 3.3 If interest has accrued on the Note and is unpaid or if fees are payable by Borrower hereunder, Lender shall be, and hereby is, authorized to advance to itself, the total amount of such accrued interest and /or fees, whether or not a Draw Request has been submitted by Borrower, and the same shall be deemed to be an advance of proceeds under this Agreement in the same manner and with the same effect as if advanced under the provisions of paragraph 3.1 hereof. Provided, however, that all interest with respect to the Note will be disbursed from the proceeds of the Note or investment income thereon in the Construction Fund. OTIM • 0 3.4 All sums advanced and disbursed hereunder shall be disbursed under and secured by the Collateral Documents. ARTICLE IV CONDITIONS PRECEDENT TO ADVANCES 4.1 The following events shall be conditions precedent to the first advance under this Agreement: (a) The Borrower shall deliver, without expense to Lender, copies of each of the Collateral Documents, Organizational Documents and Construction Documents, each to be duly executed to the extent required by Lender. The Documents required by Lender to be filed shall have been filed, without expense to Lender, and all filing fees, charges, expenses and taxes (including, but not limited to, mortgage registration tax) shall have been paid by Borrower. (b) Borrower shall have paid so much of the Owner Equity into the Project as Lender or Title shall have required to be paid before the first advance and Borrower shall deliver proof reasonably satisfactory to Lender of such payment and of Borrower's ability to -11- provide additional Owner Equity in an amount estimated by Lender to be necessary to cover cost overruns. (c) Dorsey & Whitney, bond counsel for the City, shall have delivered its opinion to Lender that the interest payable pursuant to the Note is presently exempt from Federal income taxation under the Internal Revenue Code of 1954, as amended. (d) Borrower shall have paid to Lender a Loan Fee of $ 4.2 The following events shall be conditions precedent to each subsequent advance under this Agreement: (a) There shall.be no default under the terms of this Agreement or any of the Collateral Documents. (b) As of the date immediately prior to any advance, the total amount of the unadvanced proceeds of the Note shall be sufficient, in Lender's and Title's opinion, to complete the Project. To the extent the total amount of the unadvanced proceeds of the Note shall be insufficient, in Lender's or Title's opinion, to complete the Project, the Borrower shall immediately deposit with -12- 0 agrees: 0 0 Lender, or with Title, an amount equal to such deficiency as additional Owner Equity and such additional Owner Equity shall be disbursed by Title prior to the disbursement of any further advance or advances under this Agreement. ARTICLE V COVENANTS, WARRANTIES, REPRESENTATIONS AND AGREEMENTS OF BORROWER Borrower covenants, warrants, represents and 5.1 That except as heretofore disclosed to and permitted by Lender, all advances under this Agreement shall be used solely to pay Project Costs; that "substantially all" of the proceeds of the Loan will be used for the acquisition, construction, reconstruction or improvement of property of a character subject to the allowance for depreciation within the meaning of Section 103(b)(6)(A) of the Internal Revenue Code; that all of the proceeds of the Note will be used in a fashion permitted by Minnesota Statutes, Chapter 474; that proceeds the Note shall be used from time to time only for the purpose of paying amounts due to contractors or others for Project Costs incurred on or after July 13, 1982, or the -13- reimbursement to the Borrower for payments made on or after July 13, 1982, by the Borrower for Project Costs incurred on or after July 13, 1982; that none of the advances of proceeds of the Note shall be used for any purpose other than the payment or reimbursement of Project Costs; that the Project does and shall comply with all applicable ordinances, regulations and laws of governmental departments and agencies having jurisdiction and does not and shall not violate any private restrictions or covenants or encroach upon or interfere with easements affecting the Land; and that Borrower will carry on continuously, diligently and with reasonable dispatch, the construction of the Project in accordance with the Plans and Specifications and free from all mechanics', laborers', and materialmen's liens and in a good and workmanlike manner, and complete the same on or before the Completion Date. 5.2 To keep, perform, enforce and maintain in full force and effect all of the terms, covenants, conditions and requirements of this Agreement, the Collateral Documents and Construction Documents; not to amend, cancel, change, terminate, supplement or waive any of the terms, covenants or conditions of the Collateral Documents or Construction Documents including, without limitation, the construction contracts referred to in -14- • • Section 1.4(f) hereof, which when considered together with all other previous amendments, cancellations, charges, terminations, supplements or waivers increase or decrease by more than 5% the Construction Costs without the prior written consent of Lender; and to execute such amendments and modifications of the Collateral Documents and Construction Documents as may be reasonably requested by Lender in connection with accomplishing the foregoing. 5.3 To set up and maintain accurate and complete books, accounts and records pertaining to this Project in a manner reasonably acceptable to Lender and Title. Lender, Title and Inspector, and their representatives, shall have the right at all reasonable times to inspect, examine and copy all books and records of Borrower relating to this Project, and to enter and have free access to the Project and to inspect all work done, labor performed and material furnished in or about the Project. Notwithstanding the foregoing, Borrower shall be responsible for making inspections of the Project during - the course 'of construction and shall determine to its own satisfaction that the work done or materials supplied by each contractor and all subcontractors have been properly supplied in accordance with the applicable contract. Borrower will hold Lender and City harmless and neither Lender nor City has or shall have any liability or -15- • • obligation of any kind to Borrower or creditors of Borrower, in connection with any defective, improper or inadequate workmanship or materials brought in or about, or materials supplied to the Improvements and the Land, or any mechanic's, supplier's or materialmen's liens arising as a result of such defective, improper or inadequate workmanship or materials. Upon Lender's request, Borrower shall replace or cause to be replaced any such work or materials. Any inspections made by Inspector are for the sole benefit of Lender and neither Borrower nor any creditor of Borrower shall be entitled to rely on such inspections. ARTICLE VI DEFAULT AND REMEDIES 6.1 The occurrence of any of the following events, herein called "an Event of Default," shall constitute a default under this Agreement: (a) Borrower abandons the Project or unreasonably delays or ceases work thereon for a period of fifteen (15) days, or delays construction or suffers construction to be delayed for any period of time for any reason whatsoever so that the completion of Improvements cannot be accomplished in the judgment of Lender on or before the Completion Date. -16- (b) Borrower or the City shall fail to keep, enforce, perform and maintain in full force and effect this Agreement or any of the Collateral Documents or Construction Documents. (c) Any representation or warranty made by Borrower herein, or to Lender, or in any certificate or document furnished pursuant hereto, proves untrue in any material respect in the reasonable opinion of Lender. (d) Borrower shall admit in writing an inability to pay its debts; or shall have made a general assignment for the benefit of creditors; or shall have been adjudicated bankrupt; or shall have filed a voluntary petition in bankruptcy or for reorganization or to effect a plan or other arrangement with creditors; or shall have filed an answer to a creditor's petition or other petition filed against it (admitting the material allegations thereof); or shall have applied for or permitted the appointment of a receiver or trustee or custodian for any of its property or assets; or such receiver, trustee or custodian shall have been -17- • 0 appointed for the Project; or any judgment, writ or warrant of attachment or other similar process shall be entered or filed against the Project. (e) Any involuntary petition in bankruptcy or for reorganization or to effect a plan or other arrangement with creditors, or any judgment, writ or warrant of attachment or any other similar process shall be entered or filed against Borrower or against the property or assets (other than the Project) of it, and shall remain unvacated, unbonded or unstayed for a period of sixty (60) days or more. (f) The Project is materially damaged or destroyed by fire or other casualty and the loss is not adequately covered by additional Owner Equity or insurance proceeds actually collected or in the process of collection. (g) At the time any advance is requested by Borrower the title to the Project is not reasonably satisfactory to Lender or Title, regardless of whether the lien, encumbrance or other question existed at the time of any prior advances. WHO 0 0 6.2 In the event of the occurrence of an Event of default, the Lender, at its option, in addition to any other remedies to which it might by law be entitled, shall have the right: (a) To refrain from making any advance under this Agreement, but Lender may make advances after the happening of any such event without thereby waiving the right to refrain from making other or further advances or to exercise any of the other rights Lender may have. (b) To enter into possession of the Project and perform any and all work and labor necessary to complete all or any part of the Improvements contemplated by this Agreement and to do all things necessary or incidental thereto. (c) To perform such other acts or deeds which may be necessary to cure any default existing under this Agreement or under the Collateral Documents or Construction Documents and, to this end, it is hereby agreed as follows: (i) All sums expended by Lender in effectuating its rights under this -19- 0 Agreement shall be deemed to have been paid to the City and the Borrower hereunder and shall become a part of the City's and the Borrower's indebtedness to the Lender under this Agreement and be secured by the Collateral Documents. (ii) Borrower hereby constitutes and appoints Lender its true and lawful attorney -in -fact with full power of substitution either in the name of Lender or in the name of Borrower: (1) to complete or cause to be completed, all or any part of the Project; to use the Plans and Specifications; to make such additions and changes and corrections in the Plans and Specifications which Lender shall deem necessary or desirable to complete all or any part of the Project; to collect and use any funds of Borrower, including any balance which may be held on deposit by Title; to use any funds which may remain unadvanced under this Agreement; to -20- employ such contractors, subcontractors, agents, architects and inspectors and enter into such contracts and arrangements as shall be required for such purposes; to pay, settle or compromise all existing bills and claims which may be liens against the Project or as may be necessary or reasonably desirable for the completion of the work or clearance of title; to examine and execute all applications and certificates in the name of Borrower in connection with the foregoing; to prosecute and defend all actions or proceedings in connection with the construction work on, or any other matter relating to, the Project, and to do any and every act which Borrower might do in its own behalf; (2) to enforce by any means that Lender then deems necessary or advisable, all of the terms, covenants and conditions of the Collateral Documents and Construction Documents; (3) to perform each of the terms, covenants and -21- i • conditions to be kept and performed by Borrower under the Collateral Documents and Construction Documents; (4) without limiting the foregoing, to perform each of the terms, covenants and conditions to be kept or performed by Borrower under this Agreement, and any of the Collateral Documents and Construction Documents; and (5) to do all things that Lender then deems necessary or advisable, including, without limitation, the execution of instruments in the name of Borrower or as attorney -in -fact for Borrower, for the purpose of carrying out the powers enumerated in (1), (2), (3) and (4) of this subsection (ii). (iii) The powers herein granted to Lender shall be deemed to be powers coupled with an interest and the same are irrevocable. (d) Cancel this Agreement. (e) Bring appropriate action to enforce such performance and the correction of such failure or default. -22- 0 0 (f) To declare the entire unpaid principal of the Note and all accrued interest thereon, together with all sums advanced hereunder or under any Collateral Documents, immediately due and payable without notice. (g) To foreclose the Mortgage or realize upon any other security now or hereafter securing the Note. (h) To advance to the Borrower by delivery to Title all or any part of the unadvanced proceeds of the Loan, to be disbursed by Title, subject to terms and conditions hereof for Project Costs paid or incurred in connection with the completion of the Project. 6.3 No right or remedy by this Agreement or by any document or instrument delivered by City pursuant hereto, conferred upon or shall be or is intended to be exclusive or remedy, and each and every right and cumulative and in addition to any other now or hereafter existing at law or in statute. Borrower or the reserved to Lender of any other right remedy shall be right or remedy equity or by 6.4 Except as Lender may hereafter otherwise agree in writing, no waiver by Lender of any breach by or -23- default of Borrower, of any of its obligations, agreements or covenants under this Agreement shall be deemed to be a waiver of any subsequent breach of the same, or any other obligation, agreement or covenant, nor shall any forbearance by Lender to seek a remedy for such breach be deemed a waiver of its rights and remedies with respect to such breach, nor shall Lender be deemed to have waived any of its rights and remedies unless it be in writing and executed with the same formality as this Agreement. Any waiver by Lender of any covenants, requirements, duties or conditions of this Agreement to be performed by any person or entity other than Lender included herein for the benefit of Lender shall be binding on Title and shall not relieve Title from any of its obligations to provide insurance and make disbursements as set forth herein. 6.5. Notwithstanding anything apparently to the contrary herein contained, neither the Borrower nor any of its partners, general or limited, shall have any personal liability for the performance of the terms of this Agreement, and the sole right and recourse the City or the Lender may have upon the occurrence of an Event of Default hereunder shall be to enforce the rights herein contained, and neither the City nor the Lender shall have any right to sue, bring action against or collect any personal judgments against the Borrower, or any of its partners, general or limited. -24- 0 9 ARTICLE VII MISCELLANEOUS 7.1 All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally or when deposited in the United States mail, registered or certified mail, postage prepaid, addressed as follows: If to Borrower at: Hutchinson S & L Rehab, Limited Partnership Hutchinson, Minnesota 55350 ' If to City at: City of Hutchinson 37 Washington Avenue West Hutchinson, Minnesota 55350 Attn: City Clerk - Administrator If to Lender at: Citizens State Bank & Trust Co. 102 Main Street South Hutchinson, Minnesota 55350 Attn: LeRoy M. Ashfeld, Vice President If to Title at: or addressed to any such party at such other address as such party shall hereafter furnish by notice to the other parties. 7.2 This Agreement shall be construed according to the laws of the State of Minnesota. 7.3 Lender shall have the right, subject to the ordinances of the City, to erect a sign of reasonable size -25- 0 in a prominent position on the Land at its own expense indicating to the general public that Lender is providing the financing for the Project. Borrower agrees that said sign may remain in place throughout the period of construction after which it will be removed by Lender. it is understood that the sign shall remain the property of Lender. 7.4 if any term, condition or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be held to be invalid or unenforceable, the remainder thereof and the application of such term, provision and condition to persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this Agreement and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and to be complied with to the full extent permitted by law. 7.5 Borrower and the City acknowledge that Lender may, and shall have participation interests in securities laws, if any. participants shall require and the City shall use all and deliver such items. the right to, sell the Loan subject to applicable In the event any of Lender's any additional items, Borrower reasonable efforts to obtain -26- 7.6 It is understood and agreed by the Borrower and Lender that the Note shall not be a general obligation of the City or give rise to a pecuniary liability of the City or a charge against its general credit, or taxing powers, but rather shall be a special obligation payable solely from revenues pledged and assigned to the payment thereof, secured by the Mortgage and other Collateral Documents. It is further understood and agreed by the Borrower and Lender that the City shall incur no pecuniary liability hereunder, and shall not be liable for any expenses related hereto, all of which Borrower agrees to pay. If, notwithstanding the provision of the immediately preceding sentence, the City incurs any liability hereunder, the Borrower will indemnify and hold harmless the City from the same, and will reimburse the City for any legal or other expenses incurred by the City in relation thereto, and this covenant to indemnify, hold harmless and reimburse the City shall survive delivery of the Note. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above written. HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP By -27- 0 (SEAL) By By CITY OF HUTCHINSON, MINNESOTA By Mayor Attest: City Clerk— Administrator CITIZENS STATE BANK & TRUST CO. By —28— -Its Vice President • • hereby agrees with Borrower and City and Lender mentioned and described in the foregoing Construction Loan Agreement: 1. To act in the disbursement of funds and in the insuring of the title to the Land and Improvements referred to in said Construction Loan Agreement all pursuant to and under the terms and conditions set out in the foregoing Construction Loan Agreement. 2. To be bound by and comply with all of the terms and conditions of the foregoing Construction Loan Agreement applicable to it, notwithstanding the waiver by Lender of any requirement, duty and covenant therein to be performed by any person or entity other than Lender. 3. To record, at the request of Lender, the Collateral Documents requested by Lender, at Borrower's expense. By Its -29- • 0 July 20, 1982 This Mortgage contains after - acquired property provisions and constitutes a fixture financing statement under Section 336.9 -313, Minnesota Statutes. COMBINATION MORTGAGE AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT between HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP, Mortgagor - and CITIZENS STATE BANK & TRUST CO., Mortgagee Dated Tax Statements for the real property described in this instrument should be sent to: Hutchinson S & L Rehab, Limited Partnership Hutchinson, Minnesota 55350 _, 1982 This instrument was drafted by: Dorsey & Whitney 2200 First Bank Place East Minneapolis, Minnesota 55402 ?_ 1)7bl' f TABLE OF CONTENTS (Not a Part of This Agreement) Page PARTIES. . . . . . . . . . . . . . . . . . . . . . iii RECITALS . . . . . . . . . . . . . . . . . . . . . iii GRANTING CLAUSES . . . . . . . . . . . . . . . . . iv ARTICLE ONE - DEFINITIONS, EXHIBIT AND GENERAL PROVISIONS . . . . . . . . . . . . . 1 -1 Section 1 -1. Definitions . . . . . . . . . . 1 -1 Section 1 -2. Exhibit . . . . . 1 -3 Section 1 -3. Rules of Interpretation . . . . 1 -3 ARTICLE TWO Section Section Section Section - GE 2 -1. 2 -2. 2 -3. 2 -4. NERAL COVENANTS . . . . . . . Title and Instruments of Further Assurance . . . . . . . . . Rights Under Loan Agreement Performance of Covenants . . . . Due on Sale . . . . . . . . . ARTICLE THREE - PARTIAL RELEASE OR SUBORDINATION OF MORTGAGED PROPERTY, ADDITIONS TO MORTGAGED PROPERTY . . . . . . Section 3 -1. Release of Mortgaged Property . Section 3 -2. Additions to Mortgaged Property. Section 3 -3. Installation of Equipment Under Leases . . . . . . . . . . ARTICLE FOUR - MAINTENANCE, OBLIGATIONS UNDER LEASES, TAXES AND LIENS, INSURANCE, AND FINANCIAL REPORTS . . . . . . . . . Section 4 -1. Maintenance . . . . . . . . . Section 4 -2. Lease obligations . . . . . . Section 4 -3. Taxes, Other Governmental Charges, Liens and Utility Charges . . . Section 4 -4. Insurance . . . . . . . . . . . Section 4 -5. Advances . . . . . Section 4 -6. Financial Reports . . . . . ARTICLE FIVE - DAMAGE, DESTRUCTION AND CONDEMNATION Section 5 -1. Application of Insurance Proceeds Section 5 -2. Application of Condemnation Award 2 -1 2 -1 2 -1 2 -1 2 -2 3 -1 3 -1 3 -1 3 -1 4 -1 4 -1 4 -1 4 -2 4 -2 4 -5 4 -5 5 -1 5 -1 5 -1 0 • • ARTICLE SIX - DEFAULT PROVISIONS AND REMEDIES OF MORTGAGEE . . . . . . . . . 6 -1 Section 6 -1. Events of Default . . . . . . . 6 -1 Section 6 -2. Acceleration . . . . . . . . 6 -1 Section 6 -3. Remedies of Mortgagee. . . . . . 6 -1 Section 6 -4. Appointment of Receiver . . . . 6 -3 Section 6 -5. Application of Money . . . . . . 6 -3 Section 6 -6. Termination of Proceedings . . . 6 -3 Section 6 -7. Waiver of Events of Default 6 -4 Section 6 -8. Applicability of Construction Loan Agreement . . . . . 6 -4 Section 6 -9. Waiver of Appraisement, Homestead, Marshalling 6 -4 Section 6 -10. Overriding Provision Concerning Personal Liability, Limitation of Liability of Partnership . . 6 -4 ARTICLE SEVEN - THE MORTGAGEE . . . . . . . 7 -1 Section 7 -1. Right of Inspection . . . . . 7 -1 Section 7 -2. Right of Mortgagee To Pay Taxes and Other Charges . . . 7 -1 Section 7 -3. Mortgagee Protected in Relying Upon Resolutions, Etc. . . . . . 7 -1 Section 7 -4. Reimbursement of Mortgagee 7 -1 ARTICLE EIGHT - MISCELLANEOUS . 8-1 Section 8 -1. Supplements or Amenentsto this dm Mortgage . . . . . . . . . . 8 -1 Section 8 -2. Severability 8 -1 Section 8 -3. Successors and Assigns . 8 -1 Section 8 -4. Notices . . . . . 8 -1 Section 8 -5. Execution Counterparts . . 8 -2 Section 8 -6. Limitation of City's Liability . 8 -2 Section 8 -7. Fixture Filing . . . . . . . . . 8 -3 SIGNATURES . . . . . . . . . . . . . . . . . . . . 8 -3 ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . 8 -4 EXHIBIT A THIS COMBINATION MORTGAGE AND SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT, dated , 1982, given by HUTCHINSON S & L REHAB, LIMITED PARTNERS_HIP, a Minnesota limited partnership, herein called the Mortgagor, to CITIZENS STATE BANK & TRUST CO., a Minnesota state bank, herein called the Mortgagee; W I T N E S S E T H WHEREAS, Mortgagor is the owner of certain real property located in the County of McLeod, State of Minnesota, legally described in Exhibit A attached hereto and made a part hereof (herein referred to as the Premises); and WHEREAS, located on the Premises is an office building which the Mortgagor has agreed to renovate and rehabilitate (herein referred to as the Project); and WHEREAS, to finance a portion of the cost of the acquisition of the Premises and the Project, Mortgagor has entered into a Loan Agreement (herein referred to as the Loan Agreement), of even date herewith, with the City of Hutchinson, Minnesota (herein referred to as the City), whereby the City will issue to the Mortgagee, pursuant to Minnesota Statutes, Chapter 474, its Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project) (herein referred to as the Note), of even date herewith, in the amount of up. to NINE HUNDRED THOUSAND DOLLARS ($900,000), and bearing interest at the rate provided therein and maturing finally (_) years from the first day of the month next following the Completion Date (as defined herein) occurs, and will loan the proceeds thereof to Mortgagor on the terms and conditions set forth in the Loan Agreement, and will assign the Loan Agreement to Mortgagee; and WHEREAS, the proceeds of the Note shall be disbursed pursuant to the terms of the Construction Loan Agreement, of even date herewith (herein referred to as the Construction Loan Agreement), by and among the City, the Mortgagor and the Mortgagee; and . WHEREAS, the City and Mortgagee have required, as a condition for the issuance of the Note by the City, that the Mortgagor secure the Note by this Mortgage; and NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS MORTGAGE WITNESSETH: • Mortgagor, to secure the payment of principal and interest on the Note and the performance and observance of all the covenants and agreements herein contained and contained in the Note, in the Construction Loan Agreement, in the Loan Agreement and in the Assignment of Rents and Leases (herein referred to as the Assignment of Rents and Leases) of even date herewith, given by Mortgagor to Mortgagee as additional security for the Note, Mortgagor does hereby grant, bargain, sell, convey, mortgage, grant a security interest in and pledge unto Mortgagee, its successors and assigns forever, the following: FIRST Mortgagor's entire estate and interest in the real estate described in Exhibit A attached hereto and made a part hereof, situated in the County of McLeod and State of Minnesota; SECOND Mortgagor's entire estate and interest in and to all buildings, structures, additions and improvements now or hereafter located on the real estate described in Exhibit A, and all tenements, hereditaments, appurtenances, rights, privileges and immunities thereunto belonging or appertaining;- 0461140f Mortgagor's entire estate and interest in and to any Fixtures, as herein defined, owned by Mortgagor now or hereafter attached to or installed within or used or usable in connection with the operations of the Mortgaged Property, as herein defined; FOURTH All proceeds from any property described in the Granting Clauses hereof, and any and all other property of every name and nature from time to time hereafter by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred, as and for additional security hereunder by Mortgagor or by anyone in its behalf or with its written consent to Mortgagee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof; FIFTH Any and all awards or compensation made by any governmental or other lawful authorities for the taking or damaging by eminent domain of the whole or any part of the Mortgaged Property, including any awards for a temporary taking, change of grade of streets, or taking of access. TO HAVE AND TO HOLD all the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended so to be to Mortgagee and its successors and assigns forever; SUBJECT TO Permitted Encumbrances as defined in Section 1 -1 hereof; PROVIDED, HOWEVER, that if Mortgagor, its successors or assigns shall well and truly pay, or cause to be paid, the principal of the Note and the interest due or to become due thereon, at the times and in the manner mentioned in the Note according to the true intent and meaning thereof, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Mortgage, the Loan Agreement, the Construction Loan Agreement and the Assignment of Rents and Leases to be kept, performed and observed by it, and shall pay to Mortgagee all -sums of money due or to become due to it in accordance with the terms and provisions hereof, then this Mortgage and the rights hereby granted shall cease, terminate and be void; otherwise, this Mortgage shall be and remain in full force and effect. MORTGAGOR and MORTGAGEE further agree as follows: 0 0 0 ARTICLE ONE r DEFINITIONS, EXHIBIT AND GENERAL PROVISIONS Section 1 -1. Definitions. In this Mortgage the following terms have the following respective meanings unless the context hereof clearly requires otherwise: Act: Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Assignment of Rents and Leases: the Assignment of Rents and Leases, of even date herewith, given by Mortgagor to Mortgagee, including any amendment thereof or supplement thereto in accordance with the provisions thereof; Building: the multi- tenant commercial building and related facilities and improvements, including the Fixtures, located on the Premises to be renovated and rehabilitated by the Mortgagor in accordance with the terms of the Construction Loan Agreement; City: the City of Hutchinson, Minnesota, its successors and assigns; Code: the Internal Revenue Code of 1954, as amended; Completion Date: the earlier of (i) , 198_ or (ii) the date on which a certificate of occupancy for the Building is issued by the City; Construction Loan Agreement: the Construction Loan Agreement, of even date herewith, among the City, Mortgagee and Mortgagor, including any amendment thereof or supplement thereto in accordance with the provisions thereof; Counsel: an attorney designated by or acceptable to Mortgagee, duly admitted to practice law before the highest court of any state; an attorney for Mortgagor or City may be eligible for appointment as Counsel; Default: any event which is, or after notice or lapse of time or both would become, an Event of Default under this Mortgage; Determination of Taxability: shall have the same definition as given to it in Section 4.08(2) of the Loan Agreement; 1 -1 Event of Default: any of the events referred to as such in Section 6 -1 hereof; Fixtures: any and all items of machinery, equipment, personal property and fixtures owned by Mortgagor now or hereafter attached to or installed within or used or useful in connection with the Premises and Building, including but not limited to any and all partitions, screens, awnings, motors, engines, boilers, furnaces, pipes, plumbing, elevators, cleaning, call and sprinkler systems, fire - extinguishing apparatus and equipment, water tanks, heating, ventilating, air- conditioning and air - cooling equipment, refrigeration equipment, and gas and electric machinery, appurtenances and equipment, whether or not permanently affixed to the real estate; Holder: the Lender or any Person to whom the Note has been assigned pursuant to Section 5.04 of the Resolution; Lease: any lease with respect to all or part of the Premises or the Building which may from time to time be entered into by the Mortgagor; Loan Agreement: the Loan Agreement, of even date herewith, between the City and Mortgagor, including any amendment thereof or supplement thereto, entered into in accordance with the provisions thereof; Mortgage: this Combination Mortgage and Security Agreement and Fixture Financing Statement, including any amendment hereof or supplement hereto entered into in accordance with the provisions hereof; Mortgagee: Citizens State Bank & Trust Co., a Minnesota state bank, its successors and assigns; Mortgaged Property: the property described in the Granting Clauses of this Mortgage; Mortgagor: Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership, its permitted successors and assigns which may assume its obligations in accordance with the provisions of the Loan Agreement; Note: the Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project) to be issued by the City pursuant to the Resolution, to 1 -2 0 evidence the loan of up to $900,000 made by Mortgagee to the City; Permitted Encumbrances: the liens, charges and encumbrances listed as "Permitted Encumbrances" on Exhibit A- attached hereto and made a part hereof; Person: any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof; Pledge Agreement: the Pledge Agreement of even date herewith executed by the City, including any amendment thereof or supplement thereto in accordance with the provisions thereof; Premises: the real estate described in Exhibit A, together with all additions thereto and substitutions therefor; Project: the acquisition of the Premises and the Building and the renovation and rehabilitation of the Building; Project Costs: those items of Project Cost defined in the Loan Agreement; and Resolution: the Resolution of the City Council of the City, adopted 1982, authorizing the issuance of the Note; Section 1 -2. Exhibit. Attached to and by reference made a part of this Mortgage is Exhibit A, a legal description of the Premises, and a list of Permitted Encumbrances. Section 1 -3. Rules of Interpretation. (1) This Mortgage shall be interpreted in accordance with and governed by the laws of the State of Minnesota. (2) The words "herein" and "hereof" and "hereunder" and words of similar import, without reference to any particular section or subdivision, refer to this Mortgage as a whole rather than to any particular section or subdivision hereof. 1 -3 (3) Any terms not defined herein but defined in the Loan Agreement shall have the same meaning herein unless the context hereof requires otherwise. (4) The Table of Contents and headings of articles and sections herein are for convenience only and are not a part of this Mortgage. (5) Unless the context hereof clearly requires otherwise, the singular shall include the plural and vice versa, and the masculine shall include the feminine and vice versa. 1 -4 • 0 0 ARTICLE TWO GENERAL COVENANTS Section 2 -1. Title and Instruments of Further Assurance. Mortgagor represents, warrants, covenants and agrees that it is the lawful owner of the Mortgaged Property and that it has good right and lawful authority to mortgage, assign and pledge the same as provided herein; that it has not made, done, executed or suffered, and will not make, do, execute or suffer, any act or thing whereby its estate or interest in and title to the Mortgaged Property or any part thereof shall or may be impaired or changed or encumbered in any manner whatsoever except by the Lease and by Permitted Encumbrances; that it does warrant and will defend the title to the Mortgaged Property against all claims and demands whatsoever not specifically excepted herein; that it will not convey all or any part of its estate or interest in and title to the Mortgaged Property to any person, except as expressly permitted in this Mortgage, without the consent of the Mortgagee; and that it will do, execute, acknowledge and deliver all and every further act, deed, conveyance, transfer and assurance necessary or proper for the carrying out more effectively of the purpose of this Mortgage and, without limiting the foregoing, for conveying, mortgaging, assigning and confirming unto Mortgagee all of the Mortgaged Property, or property intended so to be, whether now owned or hereafter acquired, including without limitation the preparation, execution and filing of any documents, such as financing statements and continuation statements, deemed advisable by Mortgagee for maintaining its lien on any property included in the Mortgaged Property. Section 2 -2. Rights Under Loan Agreement. The Loan Agreement sets forth the covenants and obligations of the City and Mortgagor, including a provision that the Loan Agreement may not be effectively amended, changed or modified without the written consent of Mortgagee, and reference is hereby made to the same for a detailed statement of said covenants and obligations. Section 2 -3. Performance of Covenants. Mortgagor covenants and warrants that the Note, Construction Loan Agreement, Loan Agreement, Pledge Agreement, Assignment of Rents and Leases and this Mortgage have been validly executed and delivered and are valid and enforceable obligations of the parties thereto in accordance with the terms thereof and hereof; 2 -1 that this Mortgage does not, nor do the Note, Construction Loan Agreement, Assignment of Rents and Leases or Loan Agreement, nor does the performance or observance by Mortgagor of any of the matters or things in this Mortgage, the Note, the Construction Loan Agreement, Assignment of Rents and Leases and Loan Agreement provided for, contravene any covenant in any indenture or agreement affecting Mortgagor; and that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions of it contained in the Note, Loan Agreement, Construction Loan Agreement, Assignment of Rents and Leases and Mortgage; and that it is duly authorized to grant a security interest in and mortgage on the Mortgaged Property. 2 -2 • 0 0 • ARTICLE THREE PARTIAL RELEASE OR SUBORDINATION OF MORTGAGED PROPERTY, ADDITIONS TO MORTGAGED PROPERTY Section 3 -1. Release of Mortgaged Property. Mortgagee shall have the right at any time, and from time to time, at its discretion, to release from the lien of this Mortgage all or any part of the Mortgaged Property without in any way prejudicing its rights with respect to all of the Mortgaged Property not so released. Section 3 -2. Additions to Mortgaged Property. In the event any additional improvements, fixtures, leases or property not herein specifically identified shall be or in the future become a part of the Mortgaged Property by location or installation on the Premises or otherwise, then this Mortgage shall immediately attach to and constitute a lien or security interest against such additional items without further act or deed of Mortgagor. Section 3 -3. Installation of Equipment Under Leases. Tenants under any Lease may at any time and from time to time, in their sole discretion and at their own expense, install items of furniture, movable machinery and equipment or other personal-property in or upon the Premises or the Building. All such items shall remain the sole property of the tenants, in which Mortgagor and Mortgagee shall have no interest, and may be modified or removed by the tenants at any time while it is not in default under their respective Lease, provided that the tenants shall repair and restore any and all damage to the Building resulting from the installation, modification or removal of any such items. 3 -1 ARTICLE FOUR MAINTENANCE, OBLIGATIONS UNDER LEASES, TAXES AND LIENS, INSURANCE, AND FINANCIAL REPORTS Section 4 -1. Maintenance. Mortgagor will cause the Mortgaged Property and every part thereof to be maintained, preserved and kept in safe and good repair, working order and condition, will abstain from and not permit the commission of waste in or about the Mortgaged Property, and will comply with all laws and regulations of any governmental authority with reference to the Mortgaged Property and the manner of using or operating the same, and with all restrictive covenants, if any, affecting the title to the Mortgaged Property, or any part thereof. Mortgagor also will from time to time make all necessary and proper repairs, renewals, replacements, additions and betterments thereto, so that the value and efficient use thereof shall be fully preserved and maintained and so that all laws and regulations as aforesaid shall be complied with. Mortgagor will not otherwise make any material modifications to the Premises, Building or Fixtures without the written consent of Mortgagee. Mortgagor agrees not to remove from the Premises or Building any of the Fixtures included in the Mortgaged Property unless immediately replaced with like property of at least equal value. Section 4 -2. Lease Obligations. Mortgagor agrees to fulfill or perform each and every covenant, obligation and agreement of the Lease so as to keep them at all times in full force and effect. Mortgagor also agrees not to anticipate or collect rents more than one month in advance nor to receive or collect security deposits under the Lease, to modify or in any way alter the terms of the Lease, to terminate the Lease or accept a surrender thereof unless required to do so by the terms of the Lease, or to waive, condone or in any manner release or discharge the tenants of or from the obligations, covenants, conditions and agreements to be performed under the Lease, including the obligation to pay the rent called for thereunder in the manner and at the time specified therein, without the prior written consent of Mortgagee. Mortgagor will promptly notify Mortgagee of any default under any of the Lease. Prior to Mortgagee's taking possession of any of the Lease, Mortgagee shall not be liable to Mortgagor for the performance of any of the terms, covenants and conditions of the Lease. 4 -1 • 0 0 9 Section 4 -3. Taxes, Other Governmental Charges, Liens and Utility Charges. Mortgagor shall, before any penalty attaches thereto, pay and discharge or cause to be paid and discharged all taxes, assessments, utility charges and other governmental charges imposed upon or against the Mortgaged Property or upon or against the Note and the indebtedness secured hereby, and will not suffer to exist any mechanic's, statutory or other lien on the Mortgaged Property or any part thereof. If Mortgagee is required by legislative enactment or judicial decision to pay any such tax, assessment or charge, -the Note and any accrued interest thereon together with any additions to the mortgage debt shall be and become due and payable at the election of Mortgagee six (6) months after notice of such election to Mortgagor and the City, provided, however, said election shall be unavailing and this Mortgage and the Note shall be and remain in effect as though said law had not been enacted or said decision had not been rendered if, notwithstanding such law or decision, Mortgagor lawfully pays such tax, assessment or charge to or for Mortgagee. Nothing in this section shall require the payment or discharge of any obligation imposed upon Mortgagor by this section so long as Mortgagor, upon first notifying Mortgagee of its intent to do so, shall in good faith and at its own expense contest the same or the validity thereof by appropriate legal proceeding, and shall furnish Mortgagee with a bond or other security satisfactory to Mortgagee securing the payment thereof, and Mortgagor may permit the items contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless Mortgagee shall notify Mortgagor that, in the opinion of Counsel, by nonpayment of any such items, the lien of the Mortgage as to any part of the Mortgaged Property will be materially endangered or the Mortgaged Property, or any part thereof, will be subject to loss or forfeiture, in which event such taxes, assessments or charges shall be paid promptly. Section 4 -4. Insurance. (1) Mortgagor shall procure and maintain continuously in effect with respect to the Mortgaged Property policies of insurance against such risks and in such amounts as are customary for a prudent owner of property comparable to those comprising the Mortgaged Property. Without limiting the generality of the foregoing provision, Mortgagor shall specifically maintain the following insurance: !ff (A) Direct damage insurance covering the following risks of loss: (a) Fire (b) Extended Coverage Perils (c) Vandalism and Malicious Mischief (d) Boiler Explosion (but only if steam boilers are present) on a replacement cost basis in an amount equal to the full insurable value thereof. ( "Full insurable value" shall include the actual replacement cost of the Building and contents therein, without deduction for depreciation, architectural, engineering, legal and administrative fees.) Coverage on any portion of the Project during construction thereof shall be maintained on a completed value basis during the course of construction. The policies required by this paragraph (A) shall be either subject to no co- insurance clause or contain an agreed amount clause and may include a deductibility provision not exceeding $ (B) In time of war, when the United States of America is a belligerent, such insurance as may be available from the United States of America or reputable insurance companies to the extent of the full insurable value. (C) General liability insurance against liability for injuries to or death of any person or damage to or loss of property arising out of or in any way relating to the condition of the Mortgaged Property or any part thereof, in amounts not less than $3,000,000 combined single limit coverage, provided that the requirements of this paragraph (C) with respect to the amount of insurance may be satisfied by an excess coverage policy. (D) During the construction of the Building, builder's risk insurance written on the so- called "Builder's Risk - Completed Value Basis ", in an amount equal to 1008 of the insurable value of the Building at the date of completion, and with coverage available on the so- called "all risk ", non - reporting form of policy. 4 -3 (E) Business interruption or loss of rental income insurance in an amount adequate to pay the installments of principal and interest due on the Note for a period of not less than six (6) months after the date of damage to or destruction of the Project. (F) If the Mortgaged Property is in a "flood plain area" as defined by the Federal Insurance Administration pursuant to the Federal Flood Disaster Protection Act of 1973 (P.L. 93 -234), Federal Flood Insurance in the maximum obtainable up to the principal amount of the Note. (G) Such other casualties and contingencies as Mortgagee may from time to time require, if such insurance against such other casualties and contingencies is available, all in such manner and for such amounts as may be reasonably satisfactory to Mortgagee. (2) All insurance provided for in Subsection (1) shall be effected under a valid and enforceable policy or policies issued by insurers of recognized responsibility approved by Mortgagee. (3) All policies of insurance required in Subsection (1) (A), (B), (D), (E) (F) and (G) shall be written in the names of Mortgagor and Mortgagee as their respective interests may appear. These policies shall provide that the proceeds of such insurance shall be payable to Mortgagee pursuant to a standard mortgagee payable clause to be attached to each such policy. The policies of insurance required under Subsection (1)(C) shall be endorsed to show the City and Mortgagee as additional insureds. (4) Mortgagor shall deposit with Mortgagee policies evidencing all such insurance, or a certificate or certificates of the respective insurers stating that such insurance is in force and effect. Ten (10) days prior to the date the premiums on each such policy shall become due and payable, Mortgagee shall be furnished with proof reasonably satisfactory to it of such payment. Each policy of insurance herein required shall contain a provision that the insurer shall not cancel, refuse to renew or materially modify it without giving written notice to Mortgagee at least ten (10) days before the cancellation, non - renewal or modification becomes effective. Before the expiration of any policy of insurance herein required, Mortgagor shall furnish 4 -4 Mortgagee with evidence satisfactory to Mortgagee that the policy has been renewed or replaced by another policy conforming to the provisions of this Article or that there is no necessity therefor under the terms hereof. In lieu of separate policies, Mortgagor may maintain blanket policies having the coverage required herein, in which event it shall deposit with Mortgagor a certificate or certificates of the respective insurance as to the amount of coverage in force on the Mortgaged Property. Section 4 -5. Advances. If Mortgagor shall fail to comply with any of the terms, covenants and conditions herein with respect to the procuring of insurance, the payment of taxes, assessments and other charges, the keeping of the Mortgaged Property in repair, or any other term, covenant or condition herein contained, Mortgagee may make advances to perform the same and, where necessary, enter the Mortgaged Property for the purpose of performing any such term, covenant or condition. Mortgagor agrees to repay all sums so advanced upon demand, with interest at a rate of % per annum, unless payment of interest at such rate would be contrary to applicable laws, in which event such comments shall bear interest at the highest rate permitted by applicable law. All sums so advanced, with interest, shall be secured hereby in priority to the indebtedness evidenced by the Notes, but no such advance shall be deemed to relieve Mortgagor from any default hereunder. Section 4 -6. Financial Reports. Mortgagor shall keep and maintain full, true and accurate books of accounts adequate to reflect correctly the results of the operation of the Mortgagor and the Mortgaged Property, in accordance with generally accepted accounting principles consistently applied, which books and the records relating thereto shall be open to inspection by Mortgagee or its representative during ordinary business hours. The Mortgagor shall furnish to the Mortgagee within ninety (90) days after the end of each fiscal year of the Mortgagor, a copy of the completed unaudited financial statements of the Mortgagor, in form and content acceptable to the Mortgagee, accompanied by a certificate of a partner of the Mortgagor stating that they accurately reflect the financial position of the Mortgagor. 4 -5 0 0 0 ARTICLE FIVE DAMAGE, DESTRUCTION AND CONDEMNATION Section 5 -1. Application of Insurance Proceeds. All proceeds of insurance maintained pursuant to Subsections (1)(A), (B), (D) and (E) of Section 4 -4 hereof shall be paid to the Mortgagee and shall be applied first to the payment of all costs and expenses incurred by Mortgagee in obtaining such proceeds and, second, at the option of Mortgagee, either (a) to the reduction of the indebtedness hereby secured or (b) to the restoration or repair of the Mortgaged Property without affecting the lien of this Mortgage or the obligations hereunder. Mortgagee is authorized at its option to compromise and settle all loss claims on said policies. If proceeds are applied to the reduction of indebtedness hereunder, such proceeds shall be applied against the Note as Mortgagee may elect. Any such application shall not reduce or postpone the monthly payments otherwise required pursuant to the Note. No interest shall be payable on the insurance proceeds while held by Mortgagee. Section 5 -2 Application of Condemnation Award. Should any of the Mortgaged Property be taken by exercise of the power of eminent domain, any award or consideration for the property so taken shall be paid over to Mortgagee and shall be applied first to the payment of all costs and expenses incurred by Mortgagee in obtaining such award or consideration and, second, at the option of Mortgagee, either (a) to the reduction of the indebtedness hereby secured or (b) to the restoration or repair of the Mortgaged Property, without affecting the lien of this Mortgage or the obligations hereunder. Mortgagee hereunder is authorized at its option to compromise and settle all awards or consideration for the property so taken. Any such award, if applied to the reduction of indebtedness, shE::_1 be applied against the Note as Mortgagee may elect. Any such application shall not reduce or postpone the monthly payments otherwise required pursuant to the Note. No interest shall be payable on any award while held by Mortgagee. 5 -1 ARTICLE SIX DEFAULT PROVISIONS AND REMEDIES OF MORTGAGEE Section 6 -1. Events of Default. If any of the following events occurs, it is hereby defined as and declared to be and to constitute an Event of Default: (A) Default in any payment of money required to be made by Mortgagor pursuant to the Agreement or the Note; or (B) If default shall be made in the due and punctual payment of any other moneys required to be paid to Mortgagee under the provisions hereof and such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default, shall have been given by Mortgagee to the City and Mortgagor; or (C) If default shall be made in the performance or observance of any other of the covenants, agreements or conditions on the part of Mortgagor or the City in this Mortgage or in the Note or in the Resolution, and such default shall have continued for a period of thirty (30) days after written notice thereof given in the manner provided in clause (B) above; or (D) If an Event of Default occurs under Section 5.01 of the Loan Agreement or under paragraph 6.1 of the Construction Loan Agreement or under the Assignment of Rents and Leases and is continuing. Section 6 -2. Acceleration. Upon the occurrence of an Event of Default, Mortgagee may, by notice in writing sent by registered mail addressed to Mortgagor and the City at their addresses as provided pursuant to Section 8 -4 hereof, declare the principal of and the accrued interest on the Note, and including all sums advanced hereunder with the interest, to be forthwith due and payable, and thereupon the Note, including both principal and all interest accrued thereon, and including all sums advanced hereunder and interest thereon, shall be and become immediately due and payable without presentment, demand or further notice of any kind. Section 6 -3. Remedies of Mortgagee. Upon the occurrence and continuance of an Event of Default entitling Mortgagee to accelerate the maturity thereof, or in case the principal of the Note shall have become due and payable, whether by lapse of time or by acceleration, 6 -1 0 10 0 then and in every such case Mortgagee may (1) proceed to protect and enforce its rights by a suit or suits in equity or at law, either for the specific performance of any covenant or agreement contained herein or in the Construction Loan Agreement, Assignment of Rents and Leases, Loan Agreement or the Note, or in aid of the execution of any power herein or therein granted, or for the foreclosure of this Mortgage, or for the enforcement of any other appropriate legal or equitable remedy or may (2) sell the Mortgaged Property at public auction and convey the same to the purchaser..-in fee simple in the manner provided by law. Further, Mortgagee, in exercising its rights hereunder, shall also have, without limitation, all of the rights and remedies provided by the Minnesota Uniform Commercial Code, including the right to proceed under the Uniform Commercial Code provisions governing default as to any Equipment or Fixtures which may be included in the Mortgaged Property separately from the real estate included therein, or to proceed as to all of the Mortgaged Property in accordance with its rights and remedies in respect of said real estate. If Mortgagee should elect to proceed separately as to such Equipment or Fixtures, Mortgagor agrees to make such Equipment or Fixtures available to Mortgagee at a place or places acceptable to Mortgagee, and if any notification of intended disposition of any of such Equipment or Fixtures is required by law, such notification shall be deemed reasonably and• properly given if mailed at least ten (10) days before such disposition in the manner below provided. In case of any sale of the Mortgaged Property pursuant to any judgment or decree of any court or otherwise in connection with the enforcement of any of the terms of this Mortgage, Mortgagee, its successors or assigns may become the purchaser, and for the purpose of making settlement for or payment of the purchase price, shall be entitled to turn in and use the Note and any claims for interest matured and unpaid thereon, together with additions to the mortgage debt, if any, accrued in order that there may be credited as paid on the purchase price the sum then due under the Note, including principal and interest thereof, and any accrued additions to the mortgage debt. Each and every power or remedy herein specifically given shall be in addition to every other power or remedy, existing or implied, given now or hereafter existing at law or in equity, and each and every power and remedy herein specifically given or otherwise so existing may be exercised from time to time and as often 6 -2 and in such order as may be deemed expedient by Mortgagee, and the exercise or the beginning of the exercise of one power or remedy shall not be deemed a waiver of the right to exercise at the same time or thereafter any other power or remedy. No delay or omission of Mortgagee in the exercise of any right or power accruing hereunder shall impair any such right or power or be construed to be a waiver of any default or acquiescence therein. Section 6 -4. Appointment of Receiver. After the happening of any Event of Default and during its continuance or upon the commencement of any proceedings to foreclose this Mortgage or to enforce the specific performance hereof or in aid thereof or upon the commencement of any other judicial proceeding to enforce any right of Mortgagee, Mortgagee shall be entitled, as a matter of right, if it shall so elect, without the giving of notice to any other party and without regard to the adequacy or inadequacy of any security for the mortgage indebtedness, forthwith either before or after declaring the unpaid principal of the Note to be due and payable, to the appointment of a receiver or receivers. Section 6 -5. Application of Money. The purchase money proceeds and avails of any sale of the Mortgaged Property or any part thereof, and the proceeds and avails of any other remedy hereunder, shall be paid to and applied as follows: (1) to the payment of costs and expenses of foreclosure and of such sale and of all proper expenses (including maximum attorneys' fees permitted by law), liability and advances incurred or made hereunder by Mortgagee; and (2) to the payment to Mortgagee of the amount then owing or unpaid under the Note and this Mortgage for principal and interest and in case any such proceeds shall be insufficient to pay the whole amount so due, then first to the payment of amounts then owing under the Mortgage, and then to the payment of the Note, and, with respect to the Note, first to the payment of interest and then to the payment of principal; and (3) to the payment of any excess to Mortgagor, its successors and assigns or to whomsoever may be lawfully entitled to receive the same. Section 6 -6. Termination of Proceedings. In case Mortgagee shall have proceeded to enforce any right 6 -3 • 0 under this Mortgage by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely, then and in every such case Mortgagor and Mortgagee shall be restored to their former positions and rights hereunder with respect to the property subject to the lien hereof. Section 6 -7. Waiver of Events of Default. Mortgagee may in its discretion waive any Event of Default hereunder and its consequences and rescind any declaration of acceleration of principal. Section 6 -8. Applicability of Construction Loan Agreement. This Mortgage secures an obligation incurred for the Construction of an improvement on land and is a "Construction Mortgage" as that term is used in the Uniform Commercial Code. This Mortgage is the Mortgage referred to in and is also given as security for the due and punctual performance, observance and payment by the Mortgagor of the obligations set forth in the Construction Loan Agreement. Section 6 -9. Waiver of Appraisement, Homestead, Marshallin . Mortgagor hereby waives to the full extent law ully allowed the benefit of any appraisement, homestead, moratorium, stay- and extension laws now or hereafter in force. Mortgagor hereby further waives any rights available with respect to marshalling of assets so as to require the separate sales of any portion of the Mortgaged Property, or as to require the Mortgagee to exhaust its remedies against a specific portion of the Mortgaged Property before proceeding against any other, and does hereby expressly consent to and authorize the sale of the Mortgaged Property as a single unit or parcel. Section 6 -10. Overriding Provision Concerning Personal Liability, Limitation of Liability of Partners ip. Notwithstanding anything apparently to the contrary herein contained, neither the Mortgagor nor any of its partners, general or limited, shall have any personal liability for the performance of this Mortgage or to pay any indebtedness or obligation secured by or created or arising under this Mortgage or the Loan Agreement, Construction Loan Agreement or Assignment, and the sole right and recourse of the Mortgagee may have upon the occurrence of an Event of Default hereunder shall be to enforce the rights herein contained, and in any action brought to enforce the rights herein contained the judgment or decree shall be enforceable against the M Mortgagor and the partners of the Mortgagor only to the extent of their interest in the Mortgaged Property or other property subject to any other security instrument securing the Note and such judgment shall not be subject to execution on or be a lien on, assets of such parties other than their interests in the Mortgaged Property or other property subject to any other security instrument securing the Note, and the Mortgagee shall not have the right to sue, bring action against or collect any personal judgments against the Mortgagor, or any of its partners, general or limited. 6 -5 0 0 • • ARTICLE SEVEN THE MORTGAGEE Section 7 -1. Right of Inspection. At any and all reasonable times, Mortgagee and its duly authorized agents, attorneys, experts, engineers, accountants and representatives shall have the right fully to inspect any and all of the property herein conveyed, including all books and records of Mortgagor pertaining to the Mortgaged Property and the Note, and to take such memoranda from and in regard thereto as may be desired. Section 7 -2. Right of Mortgagee to Pay Taxes and Other Charges. In case any tax, assessment or governmen- tal or other charge upon any part of the Project or any insurance premium with respect thereto is not paid, to the extent, if any, that the same is legally payable, Mortgagee may pay such tax, assessment, governmental charge or premium, without prejudice, however, to any rights of Mortgagee hereunder arising in consequence of such failure; and any amount at any time so paid under this Section, with interest thereon from the date of payment at the rate of interest per annum provided in Section 4 -5 hereof, shall be repaid to Mortgagee upon demand and shall become so much additional indebtedness secured by the Mortgage, and the same shall be given a preference in payment over principal of or interest on the Note, but Mortgagee shall be under no obligation to make any such payment. Section 7 -3. Resolutions, Etc. The opinions, certificates in this Mortgage may b conclusive evidence of therein. Mortgagee resolutio and other accepted the facts Protected in Relying Upon is, orders, requisitions, instruments provided for by Mortgagee as and conclusions stated Section 7 -4. Reimbursement of Mortgagee. If any action or proceeding be commenced (except an action to foreclose this Mortgage), to which action or proceeding the Mortgagee is made a party, or in which it becomes necessary, in Mortgagee's reasonable opinion, to defend or uphold the lien of this Mortgage, or to protect the Mortgaged Property or any part thereof, all reasonable sums paid by the Mortgagee to establish or defend the rights and lien of this Mortgage or to protect the Mortgaged Property or any part thereof (including reasonable attorneys' fees, and costs and allowances) and 7 -1 whether suit be brought or not, with interest thereon from the date of payment at the rate of interest per annum provided in Section 4 -5 hereof, shall be paid, upon demand, to Mortgagee by Mortgagor. Any such sum or sums and the interest thereon shall be secured hereby in priority to the indebtedness evidenced by the Note. 7 -2 • • • ARTICLE EIGST MISCELLANEOUS Section 8 -1. Supplements or Amendments to This Mortgage. This Mortgage may not be supplemented or amended without the written consent of the City, Mortgagee and Mortgagor. Section 8 -2. Sever�ability. If any provision of this Mortgage shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions, constitution, statute, rule or public policy or any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Mortgage contained shall not affect the remaining portions of this Mortgage or part thereof. Section 8 -3. Successors and Assigns. Whenever any of the parties hereto is referred to, such reference shall be deemed to include the heirs, representatives, successors and assigns of such party; and all the covenants, promises and agreements by or on behalf of Mortgagor in this Mortgage contained shall bind Mortgagor and also its successors and assigns and shall inure to the benefit of Mortgagee and its successors and assigns, whether so expressed or not. Section 8 -4. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by certified or registered mail, postage prepaid, with proper address as indicated below. The City, Mortgagor and Mortgagee may, by written notice given by each to the others, designate any other address or addresses to which notices, certificates or other communications to them shall be sent when required as contemplated by this Mortgage. Until otherwise provided by the respective parties, all notices, certificates and communications to each of them shall be addressed as follows: To the City: City of Hutchinson 37 Washington Avenue West Hutchinson, Minnesota 55350 Attn: City Clerk - Administrator To Mortgagor: Hutchinson S & L Rehab, Limited Partnership Hutchinson, Minnesota 55350 To Mortgagee: Citizens State Bank & Trust Co. 102 Main Street South Hutchinson, Minnesota 55350 Attn: LeRoy M. Ashfeld Vice President Section 8 -5. Execution Counterparts. This Mortgage may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 8 -6. Limitation of City's Liability. No agreements or provisions contained in this Mortgage nor any agreement, covenant or undertaking by the City contained in any document executed by the City in connection with the Mortgaged Property or the issuance, sale and delivery of the Note shall give rise to any pecuniary liability of the City or a charge against its general credit or taxing powers, or shall obligate the City financially in any way except with respect to the Mortgaged Property and the application of revenues therefrom and the proceeds of the Note. No failure of the City to comply with any term, condition, covenant or agreement herein shall subject the City to liability for any claim for damages, costs or other financial or pecuniary charge except to the extent that the same can be paid or recovered from the Mortgaged Property or revenues therefrom or proceeds of the Note. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City. Nothing herein shall preclude a proper party in interest from seeking and obtaining specific performance against the City for any failure to comply with any term, condition, covenant or agreement herein, provided that no costs, expenses or other monetary relief shall be recoverable from the City except as may be payable from the Mortgaged Property or its revenues. FW 9 • Section 8 -7. Fixture Filing. This instrument shall be deemed to be a Fixture Financing Statement within the meaning of the Minnesota Uniform Commercial Code, Minnesota Statutes, Section 336.9 -313, and for this purpose the following information is set forth: (1) Name and address Hutchinson S & L Rehab, of Debtor: Limited Partnership Hutchinson, Minnesota 55350 (2) Name and address: Citizens State Bank & Trust Co. 102 Main Street South Hutchinson, Minnesota 55350 Attn: LeRoy M. Ashfeld Vice Presideht (3) Description of the types (or items) or pro - perty covered by this Financing Statement: (4) Description of real estate to which collateral is attached or upon which it is located: See definition of Fixtures on page 1 -2 above. See Exhibit A hereto. Some of the above - described collateral are or are to become Fixtures upon the above- described real estate, and this Financing Statement is to be filed for record in the real estate records. IN WITNESS WHEREOF, the Mortgagor has caused this instrument to be duly executed as of the day and year first above written. HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP 8 -3 STATE OF MINNESOTA) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1982, by , a partner of Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership, on behalf of the Partnership. IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day of , 1982. Notary Public County, Minnesota My commission expires: STATE OF MINNESOTA) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of - , 1982, by a partner of Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership, on behalf of the Partnership. IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day of , 1982. Notary Public County, Minnesota My commission expires: 8 -4 0 0 Legal Description: Permitted Encumbrances: 1. EXHIBIT A FM • July 20, 1982 ASSIGNMENT OF RENTS AND LEASES between HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP and CITIZENS STATE BANK & TRUST CO. Dated _. 1982 This instrument was drafted by: DORSEY & WHITNEY 2200 First Bank Place East Minneapolis, Minnesota 55402 0 0 ASSIGNMENT OF RENTS AND LEASES THIS ASSIGNMENT OF RENTS AND LEASES, dated this day of 1982 (herein called the Assignment), is given by HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP, a Minnesota limited partnership (herein called the Partnership) to CITIZENS STATE BANK & TRUST CO., a Minnesota state bank, (herein called the Lender), its successors and assigns. W I T N E S S E T H: WHEREAS, the Partnership and the City of Hutchinson, Minnesota (herein called the Municipality), have agreed that the Municipality will issue its Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project), in the principal amount of up to NINE HUNDRED THOUSAND DOLLARS ($900,000) (herein called the Note), of even date herewith, and loan the proceeds thereof to the Partnership pursuant to a Loan Agreement between the Municipality and the Partnership, dated as of the date hereof (herein called the Loan Agreement), to finance the cost for the acquisition of the real property described in Exhibit A attached hereto in the Municipality and the building located thereon and the rehabilitation and renovation of the building (the real property and building are herein called the Project); WHEREAS, the Lender has agreed to purchase the Note, subject to certain conditions; WHEREAS, to secure payment of the Note, the Municipality has assigned its interest in the Loan Agreement to the Lender pursuant to a Pledge Agreement, of even date herewith, and the Partnership has executed and delivered to the Lender a Combination Mortgage and Security Agreement and Fixture Financing Statement, of even date herewith (herein called the Mortgage), covering inter alia real estate situated in the County of McLeod, State of Minnesota, described in Exhibit A attached hereto and hereby made a part hereof and the Project and certain fixtures, equipment and personal property owned by the Partnership now or hereafter located thereon (herein called the Mortgaged Premises); WHEREAS, the Partnership has and will, from time to time hereafter, during such time as the indebtedness secured hereby remains outstanding, enter into leases covering parts of the Mortgaged Premises with various parties; and WHEREAS, the Lender, as a condition to making advances pursuant to the Note, has required the execution of this Assignment. NOW, THEREFORE, in consideration of the premises and in further consideration of the sum of ONE DOLLAR ($1.00) paid by the Lender to the Partnership, the receipt of which is hereby acknowledged, the Partnership does hereby grant, transfer and assign to the Lender all of the Partnership's right, title and interest in and to all existing and any future leases or agreements covering all or any part of the Mortgaged Premises, together with any and all security deposits made thereunder and all extensions, modifications and renewals, if any, thereof and any guarantees of the lessees' obligations under any thereof (each of said leases now existing and subsequent leases hereafter executed, together with all such extensions, modifications, renewals and guarantees herein called the Leases). In addition to the foregoing, the Partnership does further hereby grant, transfer and assign to the Lender all of the rents, income, issues and profits (herein called the Rents), now or hereafter accruing or owing from the Leases or otherwise as a result of any use, possession or occupancy of the Mortgaged Premises or any part thereof, whether accruing before or after foreclosure of the Mortgage or during the period of redemption therefrom. All of said Leases and Rents are being hereby granted, transferred and assigned for the purpose of securing (collectively referred to as the Obligations Secured Hereby): (1) payment of all indebtedness evidenced by the Note (including any extensions or renewals thereof); (2) payment of all other sums, with interest thereon, becoming due and payable to the Lender pursuant to the covenants and agreements contained herein and in the Note, Loan Agreement and Mortgage and in that certain Construction Loan Agreement (herein called the Agreement), of even date herewith, among the Municipality, Partnership and Lender; and (3) performance and discharge of each and every obligation, covenant and agreement of the Partnership contained herein and in the Note, Agreement, Loan Agreement and Mortgage. -2- 0 0 A14O TO PROTECT THE SECURITY OF THIS ASSIGNMENT, PARTNERSHIP AGREES:. (1) Performance of Lease. To faithfully abide by, perform and discharge each and every obligation, covenant and agreement under any and all Leases to be performed by the lessor thereunder; to observe and comply w -ith all provisions of law applicable to the operation and ownership of the Mortgaged Premises, including but not limited to all applicable provisions of Section 504.20, Minnesota Statutes, with respect to any security deposits received by it, and all covenants and obligations required of it by the provisions of Section 504.18, Subdivision 1, Minnesota Statutes; not, in a significant way, to amend or modify the Leases without the Lender's prior consent; to enforce or secure the performance of each and every obligation, covenant, condition and agreement of said Leases by the Tenants thereunder to be performed; not to borrow against, pledge or assign any Rents, not to anticipate the Rents or reduce the amount of the Rents or other payments under the Leases, and not to waive, excuse, condone or in any manner release or discharge the Tenant of or from the obligations, covenants, conditions and agreements by said tenants to be performed, including the obligation to pay the rental called for under the Leases in the manner and at the place and time specified therein; and not to terminate the Leases or accept a surrender thereof except by reason of the expiration of the stated terms of the Leases. (2) Protect Security. At Partnership's sole cost and expense, to appear in and defend any action or proceeding arising under, growing out of or in any manner connected with the Lease or the obligations, duties or liabilities of Partnership and tenants thereunder, and to pay all costs and expenses of Lender, including attorneys' fees in a reasonable sum, in any such action or proceeding in which the Lender may appear. Partnership represents and warrants that it is now and will be the absolute owner of the Leases and Rents with full right and title to assign the Leases and the Rents; that there is no outstanding assignment or pledge of the Leases or of the Rents; that no Rents have been waived, anticipated, discounted, compromised or released, except as may be permitted by the Leases; and tnat the tenants has no defenses, set -offs or counterclaims against Partnership. Partnership agrees to use its best efforts to keep the Mortgaged Premises fully leased at rentals equivalent to or greater than rentals achieved from comparable properties. -3- (3) Present Assignment of Rents. This Assignment shall constitute an actual and present assignment, provided that the Partnership shall have the right to collect, but not prior to accrual, all of the Rents and to retain, use and enjoy the same unless and until a default shall occur in the payment or performance of the Obligations Secured Hereby. (4) Remedies. Upon or at any time after default by Partnership in the payment or performance of any Obligation Secured Hereby, the Lender may, at its option, without notice: (a) in the name, place and stead of the Partnership (i) enter upon, manage and operate the Mortgaged Premises or retain the services of an independent contractor to manage and operate the same, (ii) make, enforce, modify and accept surrender of the Lease, (iii) obtain or evict tenants, collect, sue for, fix or modify rentals and enforce all rights of the Partnership under the Leases, and (iv) perform any and all other acts that may be necessary or proper to protect the security of this Assignment; or (b) apply for, and the Partnership hereby consents to, the appointment of a receiver of the Mortgaged Premises, whether or not proceedings for the foreclosure of the Mortgage have been commenced, and if such proceedings have been commenced, whether or not a foreclosure sale has occurred. The exercise of any of the foregoing rights or remedies shall not cure or waive any default under the Mortgage, Note, Loan Agreement or Agreement or invalidate any act done by virtue of such default. (5) Application of Rents. All Rents collected by the Lender, or by a receiver, shall be held and applied in the following order: (a) to payment of all reasonable fees of the receiver, if any, approved by the court; (b) to the repayment when due of all tenant security deposits, with interest thereon, pursuant to the provisions of Section 504.20, Minnesota Statutes; (c) to payment of all delinquent or current real estate taxes and special assessments payable with respect to the Mortgaged Premises; -4- • • 0 9 (d) to payment of all premiums then due for the insurance required by the provisions of the Mortgage, or if the Mortgage requires periodic escrow payments for such premiums, to the escrow payments when due; (e) to payment of expenses incurred for normal maintenance of the Mortgaged Premises; and (f) to the Lender in payment of the Obligations Secured Hereby in such order of application as Lender may elect. The rights and powers of the Lender under this Assignment, and the application of the Rents pursuant to this paragraph (5), shall continue and remain in full force and effect both before and after commencement of any action or procedure to foreclose the Mortgage, after the foreclosure sale of the Mortgaged Premises in connection with the foreclosure of the Mortgage, and until expiration of the period of redemption from any such foreclosure sale, whether or not any deficiency from the unpaid balance of the Obligations Secured Hereby exists after such foreclosure sale. (6) No Liability for Lender. The Lender shall not be obligated to perform or discharge nor does it hereby undertake to perform or discharge any obligation, duty or liability under the Leases; this Assignment shall not operate to place responsibility.for the control, care, management or repair of the Mortgaged Premises upon the Lender nor for the carrying out of any of the terms and conditions of the Leases; and this Assignment shall not operate to make the Lender responsible or liable for any waste committed on the Mortgaged Premises by the Tenant or any other party, or for any dangerous or defective condition of the Mortgaged Premises, or for any negligence in the management, upkeep, repair or control of the Mortgaged Premises resulting in loss or injury or death to any tenant or any licensee, employee or stranger. (7) Partnership To Hold Lender Harmless. The Partnership shall and does hereby agree to indemnify and to hold Lender harmless of and from any and all liability, loss or damage which it may or might incur under the Leases or under or by reason of this Assignment and of and from any and all claims and demands whatsoever which may be asserted against it by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants or agreements contained in the Leases. Should the Lender incur any such -5- liability, loss or damage under any of the Leases or under or by reason of this Assignment, or in the defense of any such claims or demands, the amount thereof, including costs, expenses and reasonable attorneys' fees, shall be secured hereby and the Partnership shall reimburse the Lender therefor immediately upon demand, and upon the failure of the Partnership so to do, the Lender may declare all Obligations Secured Hereby immediately due and payaole. (8) Specific Assignment of Lease. The Partnership covenants and agrees promptly upon request of the Lender to transfer and assign to Lender any specific Lease of all or any part of the Mortgaged Premises upon the same terms and conditions as are herein contained. Further, at the request of the Lender, the Partnership agrees to deposit in escrow with the Lender any security deposits given by tenants, which shall be held by the Lender without interest, unless interest thereon is required by law to be paid to such tenants, and shall be applied in accordance with the terms of the respective Leases. (9) Remedies Not Exclusive. This Assignment shall in no way operate to prevent the Lender from pursuing any remedy which it now has or hereafter may have under the terms or conditions of the Mortgage, Agreement, Loan Agreement or Note or any other instrument securing the same, or by law. (10) Authorization to Tenant. Subject to paragraph 3 hereof, the tenants under each of the Leases are hereby irrevocably authorized and directed to recognize the claims of the Lender, or its assigns, hereunder without investigating the reason for any action taken by the Lender, or the validity or the amount of indebtedness owing to the Lender, or the existence of any default in the Note, Mortgage, Agreement, Loan Agreement or under or by reason of this Assignment, or the application of the Rents to be made by the Lender. The Partnership hereby irrevocably directs and authorizes each tenant to pay to the Lender all sums due under its Lease and consents and directs that said sums shall be paid to Lender without the necessity for a judicial determination that a default has occurred hereunder or under the Note, Mortgage, Agreement or Loan Agreement or that the Lender is entitled to exercise its rights hereunder. To the extent such sums are paid to the Lender, the Partnership agrees that the tenant shall have no further liability to the Partnership for the same. The sole signature of the IM • • r] • Lender shall be sufficient for the exercise of any rights under this Assignment, and the sole receipt of the Lender for any sums received shall be a full discharge and release therefor to any such tenant or occupant of the Mortgaged Premises. (11) Lender Attorney -in -Fact. The Partnership hereby irrevocably appoints the Lender and its successors and assigns as its agent and attorney -in -fact to execute and deliver during the term of this Assignment such further instruments as the Lender may deem necessary to make this Assignment and any further assignment effective. (12) Notices. All notices, demands or other communications which are required or permitted to be given or served by either party hereunder shall be deemed given when deposited in the United States mail, registered or certified mail, postage prepaid, addressed as follows: If to the Partnership: Hutchinson S & L Rehab, Limited Partnership Hutchinson, Minnesota 55350 If to the Lender: Citizens State Bank & Trust Co. 102 Main Street South Hutchinson, Minnesota 55350 Attn: LeRoy M. Ashfeld, Vice President Such addresses may be changed from time to time by either party by at least thirty (30) days' prior notice to the other party. (13) Successors and Assigns. This Assignment and each and every covenant, agreement and other provision hereof shall be binding upon the Partnership and its successors and assigns, including without limitation each and every from time to time record owner of the Mortgaged Premises or any other person having an interest therein, and shall inure to the benefit of the Lender, its successors and assigns. (14) Governing Law. This Assignment is made and executed in the State of Minnesota and shall be governed by the laws of such State with respect to procedures and remedies available to the Lender in the event of a default. It is the intention of the parties hereto that this Assignment shall confer upon the Lender the fullest rights, remedies and benefits available pursuant to Minnesota Statues, Sections 576.01 and 559.17. -7- (15) Severability. The unenforceability or invalidity of any provision hereof shall not render any other provision or provisions herein contained unenforceable or invalid. (16) No Mortgagee in Possession. Nothing herein contained, and no action taken pursuant to this Assignment, shall be construed as constituting the Lender as "Mortgagee in Possession." IN WITNESS WHEREOF, the Partnership caused this Assignment of Rents and Leases to be duly executed as of the date first above written. HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP fM 0 • .., . 0 • STATE OF MINNESOTA) )SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1982, by a general partner of Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership, on behalf of the Partnership. IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day of , 1982. Notary Public STATE OF MINNESOTA) )SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1982, by a general partner of Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership, on behalf of the Partnership. IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day of , 1982. Notary Public EXHIBIT A (Legal Description) —10— 0 0 July 20, 1982 Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION RELATING TO AN $900,000 COMMERCIAL DEVELOPMENT REVENUE NOTE (HUTCHINSON S & L REHAB, LIMITED PARTNERSHIP PROJECT); AUTHORIZING THE ISUANCE THEREOF PURSUANT TO MINNESOTA STATUTES, CHAPTER 474 BE IT RESOLVED by the City Council of the City of Hutchinson, Minnesota as follows: Section 1. Definitions 1.01. In this Resolution the following terms, when used with initial capital letters, have the following respective meanings unless the context hereof or use herein clearly requires otherwise: Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Assignment: the Assignment of Rents and Leases to be given by the Partnership in favor of the Lender; Building: the commercial building, including the Fixtures, located on the Land; City: the City of Hutchinson, Minnesota, its successors and assigns; Construction Loan Agreement: the Construction Loan Agreement to be executed by the City, the Partnership and Lender; Facilities: the Land and the Building; Financing Statement: the Uniform Commercial Code Financing Statement to be executed by the City with respect to the Pledge Agreement; Fixtures: those items defined as such in Section 1 -1 of the Mortgage; Holder: the registered owner of the Note; RX Land: the real estate described in Exhibit A to the Mortgage; Lender: Citizens State Bank & Trust Co., a Minnesota state bank, its successors and assigns; Loan Agreement: the Loan Agreement to be executed by the City and the Partnership; Mortgage: the Combination Mortgage and Security Agreement and Fixture Financing Statement, to be given by the Partnership in favor of the Lender; Note: the $900,000 Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project), authorized by the City pursuant to this Resolution; Partnership: Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership, its successors and assigns; Pledge Agreement: the Pledge Agreement to be executed by the City and the Lender; Project: the acquisition of the Land and the Building and the renovation and rehabilitation of the Building; Project Costs: those costs defined as such in Section 1.01 of the Loan Agreement; Resolution: this resolution of the City, adopted _, 1982, authorizing the issuance of the Note. Section 2. Findings. It is hereby found and declared that: (a) the real property and improvements described in the Loan Agreement and the Mortgage constitute a project authorized by the Act; (b) the purpose of the Project is, and the effect thereof will be to promote the public welfare by the attraction, encouragement and development of economically sound industry and commerce so as to prevent the emergence of or to rehabilitate, so far as possible, blighted and marginal lands and areas of chronic unemployment; the retention of industry to use -2- 0 0 the available resources of the community in order to retain the benefit of its existing investment in educational and public service facilities; halting the movement of talented, educated personnel of mature age to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; (c) The Project has been approved by the Commissioner of Energy, Planning and Development of the State of Minnesota as tending to further the purposes and policies of the Act; (d) the financing of the Project, the issuance and sale of the Note, the execution and delivery of the Loan Agreement, the Financing Statement, the Construction Loan Agreement and the Pledge Agreement and the performance of all covenants and agreements of the City contained in the Loan Agreement, the Pledge Agreement and the Construction Loan Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Note, the Loan Agreement, the Financing Statement, the Construction Loan Agreement and the Pledge Agreement valid and binding obligations of the City enforceable in accordance with their terms, are authorized by the Act; (e) it is desirable that the Note in the amount of up to $900,000 be issued by the City upon the terms set forth herein, and that the City assign its interest in the Loan Agreement and grant a security interest therein for the payment of the principal of, interest on and premium, if any, on the Note; (f) the loan payments contained in the Loan Agreement are fixed, and required to be revised from time to time as necessary, so as to produce income and revenue sufficient to provide for prompt payment of principal of, premium, if any, and interest on the Note issued under this Resolution when due, and the Loan Agreement also provides that the Partnership is required to pay all expenses of the operation and maintenance of the Facilities including, but without limitation, adequate insurance thereon and all taxes and special assessments levied upon or with respect to the Facilities payable during the term of the Loan Agreement; and -3- (g) under the provisions of Minnesota Statutes, Section 474.10, and as to be provided in the Note, the Note is not to be payable from nor charged upon any funds of the City other than the revenue under the Loan Agreement pledged to the payment thereof; the City is not subject to any liability thereon; no Holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest or premium or late charges, if any, thereon, nor enforce payment thereof against any property of the City except the revenue under the Loan Agreement pledged to the payment thereof and the Project should the City ever acquire title to it; the Note issued hereunder shall recite that the Note, including interest and premium, if any, thereon, is payable solely from the revenue under the Loan Agreement pledged to the payment thereof; and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; provided, however, that nothing contained in this paragraph (g) shall impair the rights of the Holder or Holders of the Note to enforce covenants made for the security thereof as provided in Minnesota Statutes, Section 474.11. Section 3. Authorization, Sale and Approvals 3.01. Authority. The City is authorized by the Act to issue revenue bonds, and loan the proceeds thereof to business enterprises to finance the acquisition and construction of "projects" as defined in the Act, and to make all contracts, execute all instruments and do all things necessary or convenient in the exercise of such authority. 3.02. Preliminary City Approval. The Council gave preliminary approval to the sale of its revenue bonds pursuant to the Act and the loan of the proceeds to the Partnership for the acquisition and improvement of the Project suitable for use as a professional office building and authorized the preparation of such documents as may be appropriate to the Project by the following actions: (a) _, 1982, adoption of Resolution No, calling for a public hearing; (b) 1982 publication in the Hutchinson Leader, theme cial newspaper of the City, of the Notice of Public Hearing; -4- 0 • 0 0 (c) 1982 publication in , a newspaper of general circulation of the City, of the Notice of Public Hearing; (d) July 13, 1982, public hearing held at the - City Hall; and (e) July 13, 1982, adoption of Resolution No. , giving preliminary approval to the Project. The preliminary approval of the Project and the determination to proceed with the Project and its financing contained in Resolution No. is hereby ratified, confirmed and affirmed as of the date hereof. 3.03. Authorization and Sale of Note. The City hereby authorizes the issuance of the Note in the principal amount of up to $900,000 in the form and upon the terms set forth in this Resolution. The Note is hereby sold to the Lender at the prices and upon the terms set forth in this Resolution and in the Construction Loan Agreement. 3.04. Approval of Documents. Pursuant to the above, there have been prepared and presented to this Council copies of the following documents, all of which are now, or shall be, placed on file in the office of the City Clerk- Administrator: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Mortgage; (d) the Construction Loan Agreement; {e) the Assignment; and (f) the Financing Statement. The forms of the documents listed in (a) through (f) above are approved, with such variations, insertions and additions as are deemed appropriate by the parties and approved by the Mayor and City Attorney. Section 4. Execution of Documents. Upon the completion of the Loan Agreement, the Construction Loan Agreement, the Financing Statement and the Pledge -5- Agreement, approved in Section 3.03 hereof, and execution of the Loan Agreement, the Construction Loan Agreement and Pledge Agreement by the Partnership and the Lender, as the case may be, the Mayor and the City Clerk- Administrator shall execute the same on behalf of the City and shall execute the Note in substantially the form as the Form of Note set forth following Section 5.01 hereof on behalf of the City, and shall execute such other certifications, documents or instruments as bond counsel or counsel for the Lender shall require, subject to the approval of the City Attorney, and all certifications, recitals and representations therein shall constitute the certificates, recitals and representations of the City. Execution of any instrument or document by one or more appropriate officers of the City shall constitute and be deemed the conclusive evidence of the approval and authorization by the City and the Council of the instrument or document so executed. In the absence or disability of the Mayor, any of the documents authorized by this resolution to be executed, shall be executed by the acting Mayor, and in the absence of the City Clerk- Administrator by the acting clerk or by such officer of the City who, in the opinion of the City Attorney, may execute such documents. Section 5. The Note. 5.01. Form and Authorized Amount. The Note shall be issued substantially in the form hereinafter set forth, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions of this Section, in the total principal amount of up to $900,000. 0 0 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF McLEOD CITY OF HUTCHINSON Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project) R -1 $900,000 The City of Hutchinson, Minnesota, a municipal corporation of the State of Minnesota (the "City "), for value received, hereby promises to pay to the order of CITIZENS STATE BANK & TRUST CO., or assigns (the "Holder "), at its office in Hutchinson, Minnesota, or at such other place as the Holder may designate in writing, from the source and in the manner, and with interest thereon ac hereinafter provided, the principal sum of up to NINE HUNDRED THOUSAND DOLLARS ($900,000), or so much thereof as has been advanced from time to time pursuant to the provisions of the Loan Agreement and Construction Loan Agreement described below, with interest on the unpaid principal amount, from the date hereof until this Note is fully paid, at the rate of percent ( 8) per annum. The principal of and interest on this Note are payable in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America. This Note is payable in installments due as follows: (a) From and after the date hereof until the first day of the month next following the Completion Date (the " Amorization Date") (the term "Completion Date" shall have the meaning given it in the Construction Loan Agreement, of even date herewith (the "Construction Loan Agreement "), by and between Citizens State Bank & Trust Co., a Minnesota state bank (the "Lender "), Hutchinson S & L Rehab, Limited Partnership, a Minnesota limited partnership (the "Partnership "), and the City), the City shall pay interest only on the principal amount of this Note. Interest shall accrue from and after the date of each and every advance so made by the Holder and shall be due and payable on the first day of the month following the delivery of the Note and on the first day of each month thereafter, with a final payment of interest only on the Amortization Date, in an amount equal to the interest accrued to that date on the principal amount of the Note. -7- (b) Commencing on the Amortization Date, and on the first day of each month thereafter, the principal balance of this Note, together with interest thereon shall be due and payable in _ consecutive monthly installments in the amount of Dollars ($ ), with a final payment of all principal and accrued interest on the first day of the month following the Amortization Date, all payments to be applied first to interest and then to principal. All interest hereon shall be computed on the assumptions that each month contains thirty (30) days and each year three hundred sixty (360) days, except that the payments required under (a) above shall be made on the basis of actual days elapsed in a three hundred sixty (360) day year. Notwithstanding the foregoing, in the event that the interest on this Note becomes subject to federal income taxation pursuant to a Determination of Taxability as defined in the Loan Agreement, of even date herewith (the "Loan Agreement "), between the City and the Partnership the interest rate on this Note shall be increased to a rate of percent (_%) per annum, and the City shall pay to the Holder of this Note and to any prior Holder the aggregate difference between (A) the amounts actually paid between the Date of Taxability, as defined in the Loan Agreement, and the date of such payment and (B) the amounts that would have been paid to the Holder and any prior Holder during such period at such increased interest rate. In the event the City shall fail to make when due any interest payments or principal and interest payments required under this Note, the interest payment or principal and interest payment so in default shall continue as an obligation of the City until the interest payment or principal and interest payment in default shall have been fully paid, and, the City agrees to pay interest thereon (including to the extent permitted by law, interest on overdue installments of interest) at the rate of interest per annum borne on this Note. The principal of this Note may be prepaid either in whole or in part, on any date upon payment of a price equal to the principal being so prepaid plus accrued interest to the date of prepayment. This Note constitutes an issue in the total authorized face amount of up to $900,000. This Note is am issued by the City pursuant to the authority granted by Minnesota Statutes, Chapter 474, as amended (the "Act"), for the purpose of providing funds for a Project, as defined in Minnesota Statutes, Section 474.02, Subdivision la, consisting of certain real estate and improvements thereon, and paying necessary expenses incidental thereto, such funds to be loaned by the City to the Partnership pursuant to a Resolution adopted by the City on , 1982 (the "Resolution"), the Loan Agreement and the Construction Loan Agreement, thereby assisting activities_in the public interest and for the public welfare of the City. This Note is secured by a Pledge Agreement, of even date herewith (the "Pledge Agreement "), between the City and the Lender, and a Combination Mortgage and Security Agreement and Fixture Financing Statement, of even date herewith (the "Mortgage "), given by the Partnership in favor of the Lender and by an Assignment of Rents and Leases, of even date herewith (the Assignment), given by the Partnership in favor of the Lender. The proceeds of the Note are to be disbursed pursuant to the terms of the Construction Loan Agreement. As provided in the Resolution, the City will cause to be kept at the office of the City Clerk a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration or transfer of ownership of this Note. This Note is transferable upon the books of the City at the office of the City Clerk- Administrator, by the Holder hereof in person or by its attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the Holder or its duly authorized attorney. Upon such transfer the City Clerk will note the date of registration and the name and address of the new Holder upon the books of the City and in the registration blank appearing below. Alternatively, the City will at the request of the Holder issue new notes in an aggregate principal amount equal to the unpaid principal balance of this Note, and of like tenor except as to number, principal amount and the amount of the monthly installments payable thereunder, and registered in the name of the registered Holder or such transferee as may be designated by the Holder. The City may deem and treat the person in whose name this Note is last registered upon the books of the City with such registration noted on the Note as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on account of the principal balance, redemption price or interest and for all other purposes, and all such payments so made to the Holder or upon its order shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Loan Agreement, the Construction Loan Agreement, the Mortgage, the Assignment and the Pledge Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. If the City should fail to make any monthly installment of interest or principal and interest when due, or if an Event of Default occurs under the Loan Agreement, the Construction Loan Agreement, the Assignment or the Mortgage, then the Holder may at its right and option, by written notice to the City and the Partnership, declare immediately due and payable the principal balance of this Note and interest accrued thereon to the date of declaration of such default, together with any attorney's fees incurred by the Holder in collecting or enforcing payment of interest or principal of this Note, without notice to or consent of any party. This Note shall not be payable from nor charged upon any funds of the City -other than the revenue under the Loan Agreement pledged to the payment thereof, nor shall the City be subject to any liability thereon. No Holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest thereon, nor to enforce payment thereof against any property of the City except revenue under the Loan Agreement pledged to the payment thereof. This Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the revenue under the Loan Agreement pledged to the payment thereof and the property subject to the Mortgage and the Assignment should the City ever acquire title to it. This Note, including interest thereon, is payable solely from the revenue under the Loan Agreement pledged to the payment thereon, other than to the extent payable out of the revenue bonds to be issued by the City pursuant to the Act and out of any proceeds received from the sale or other disposition of the property subject to the Mortgage and the Assignment. This Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. However, nothing contained in this paragraph shall impair the rights of the Holder of this Note to enforce covenants made for the -10- • • security thereof as provided under the provisions of Minnesota Statutes, Section 474.11. The Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the City has caused this Note to be duly executed by its duly authorized officers and its corporate seal affixed all as of the day of , 1982. CITY OF HUTCHINSON, MINNESOTA X (SEAL) mayor And: City Clerk- Administrator -11- PROVISIONS AS TO REGISTRATION The ownership of the unpaid princi this Note and the interest accruing thereon on the books of the City in the name of the holder last noted below. Date of Name and Address of Registration Registered Holder -12- • • pal balance of is registered registered Signature of City Clerk - Administrator 5.02. Note Terms. The Note shall be designated] Commercial Development Revenue Note (Hutchinson S & L Rehab, Limited Partnership Project), and shall: (a) be dated as of the date of delivery thereof: to the Lender; (b) be in the total principal amount of up to $900,000 or such lesser amount as may from time to time be advanced under the Loan Agreement and the Construction Loan Agreement; (c) bear interest at the rate or rates and be payable in installments of interest and principal and interest as provided in the Note; and (d) be subject to redemption and prepayment prior to maturity in whole or in part on any date upon payment of a price equal to the principal being so prepaid plus accrued interest to the date of prepayment. 5.03 Execution. The Note shall be executed on behalf of the City by the signatures of the Mayor and the City Clerk- Administrator, and shall be sealed with its corporate seal. In case any officer.whose signature shall appear on the Note shall cease to be such officer before the delivery thereof, such signature shall nevertheless be valid and sufficient for all purposes. 5.04. Mutilated, Lost and Destroyed Note. In case the Note shall become mutilated or be destroyed or lost, the City upon compliance by the Holder with any applicable provision of law shall cause to be executed and delivered a new Note of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Holder's paying the reasonable expenses and charges of the City in connection therewith, and in case the Note is destroyed or lost, its filing with the City evidence satisfactory to it and compliance with any applicable provisions of law. 5.05. Registration of Transfer. The City will cause to be kept at the office of the City Clerk- Administrator a `&ote Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration or transfer of ownership of the Note. The Note shall be transferable -13- upon the books of the City by the Holder thereof in person or by its attorney duly authorized in writing, upon surrender of the Note together with a written instrument of transfer satisfactory to the City Clerk- Administrator, duly executed by the Holder or its duly authorized attorney. Upon such transfer the City Clerk- Administrator shall note the date of registration and the name and address of the new Holder on the books of the City and in the registration blank appearing on the Note. Alternatively, the City shall, at the request and expense of the Holder, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount and the amount of the monthly installments payable thereunder, and registered in the name of the Holder or such transferee as may be designated by the Holder. The City may deem and treat the person in whose name each Note is last registered upon the books of the City with such registration noted on the Note as the absolute owner thereof, whether or not overdue, for the purpose of receiving payment of or on account of the principal balance, prepayment price or interest and for all other purposes, and all such payments so made to the Holder or upon its order shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. 5.06. Delivery and Use of Proceeds. Prior to delivery of the Note, the documents referred to below shall be completed and executed in form and substance as approved by the Mayor and City Attorney. The City shall execute and deliver to the Lender the Note in the total principal amount of up to $900,000, together with the following: (a) a duly certified copy of this Resolution; (b) original, executed counterparts of the Loan Agreement, the Construction Loan Agreement, the Financing Statement and the Pledge Agreement; and (c) such closing certificates, opinions and related documents as are required by bond counsel. Upon delivery of the Note and the above items to the Lender, the Lender shall, on behalf of the City, disburse to the Partnership the proceeds of the Note in reimbursement of Project Costs pursuant to the provisions of the Loan Agreement and the Construction Loan Agreement, -14- and the proceeds so disbursed shall be deemed to have been disbursed for the benefit of the City. The Lender and the Partnership shall provide the City with a full accounting of all funds disbursed for Project Costs. Section 6. Limitations of the City's Obligations. Notwithstanding anything contained in the Note, the Loan Agreement, the Construction Loan Agreement:, the Pledge Agreement, or any other documents referred to in Section 3.04 hereof, the Note shall not be payable frown nor charged upon any funds of the City other than the revenue under the Loan Agreement pledged to the payment thereof, nor shall the City be subject to any liability thereon. No Holder or Holders of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest or any premium or late charges thereon, nor to enforce payment thereof against any property of the City, other than the property subject to the Mortgage and the Assignment should the City ever acquire title to it. The Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon arny property of the City, other than the property subject to the Mortgage and the Assignment should the City ever acquire title to it. The Note, including interest and premium, if any, thereon, is payable solely from the revenue under the Loan Agreement pledged to the payment thereof, except to the extent payable out of any proceeds received from the sale or other disposition of the property subject to the Mortgage and the Assignment. The Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. However, nothing contained in this Section 6 shall impair the rights of the Holder or Holders of the Note to enforce covenants made for the security thereof as provided under the provisions of Minnesota Statutes, Section 474.11. Section 7. Registration and Certification of Proceedings. 7.01 Registration. The City Clerk- Administrator is hereby authorized and directed to file a certified copy of this resolution with the County Auditor of McLeod County, together with such other information as he shall require, and to obtain from the County Auditor a certificate that the Note has been entered-in his bond register as required by law. 7.02. Certification of Proceedings. The officers of the City and the County Auditor of McLeod County are directed to prepare and furnish to the Lender, -15- and to the attorneys rendering an opinion as to the legality of the issuance of the Note, certified copies of all proceedings and records of the City, and such other affidavits, certificates and information as may be required to show the facts relating to the legality of the Note as the same appears from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representatives of the City as to the facts stated therein. Adopted: , 1982. Mayor Attest: City Clerk- Administrator -16- 0 0 The motion for the adoption of the foregoing resolution was duly seconded by Member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon, said resolution was declared duly passed and adopted and was signed by the Mayor whose signature was attested by the City Clerk- Administrator. -17- f • 0 M E M O R A N D U M DATE: July -23, 1982 — TO: Mayor and City Council -- — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — FROM: _Gary D.— Plotz, City Administrator — --------- — — — — — — — — — — — — — — — — SUBJECT: Cutting of Grass on McLeod County Fair Grounds -- — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Use for Pee Wee Baseball Bruce Ericson informed me that since he has been Recreation Director there has been no Pee Wee Baseball at the Fair Grounds or any other program type of activity. Use for Snow Piling by City Ralph Neumann has informed me that he had terminated the use of the Fair Grounds for snow piling at the time he became Director of Maintenance Operations several years ago. He had previously discontinued the use of their building(s) for stor- age. /ms q- P-�, I \l' I_f• >OI) C;(1l' \'I'1 A(iRIGL'LrLAtAL I<)\ P. 0. BOX 142 1 -, __ . - �,- , HUTCHINSON, MINNESOTA 55350 :Plti 7`�.:.., � r.'-i'�tiFr?K lii$w an. ^ kk }c. r Cb ti JUL 1332 a tn � �r� ;� June 30,1982 C� By w Honorable James De Meyer Ned Mayor of Hutchinson Dear Jim: This letter is an answer to your request for ways in which e Fair Grounds are of benefit to the city and a means to bringi people to our community. Circus Furnishing tables and chairs for Chamber of Commerce (Arts & Craft Festival) Street Rods Show Agribition Building- (Cattle Shows, Implement Shows,AUctions, Car Shows, Garage Sales, etc) School Picnics and Drivers Education Dog Obedience Meetings Midwest Concerts (2) Horse Show Pee -Wee Baseball 3M Picnic, Over The Road Trailer Storage Grain Piling - (Corn and Beans) Senior Citizens Day State Plowing Contest 4H Hog and Cattle Demonstration, Group Meetings, etc. Pork Producers County Fair Excess Parking - Caravans, National Guard, etc. Snow Piling - 3M and City Serves as a compliment to the Park System There may be additional items but we hope this will give you at least a partial list of ways the Fair Grounds play a vital part in the life of Hutchinson. Respectfully submitted, 9uyi W.B. Brodd Secretary - W. Vorpahl,Directt R.W. Bergstrom, President- C. Popp, Direct. it 612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN, 55350 July 19, 1982 T0: Honorable James DeMeyer Hutchinson Councilmen a� +L�saz RF.Mvm BY- Re: Cutting of Grass on McLeod County Fair Grounds Dear Mayor and Councilmen: I am in receipt of Gary Plotz's letter to the Fair Board of June 24, 1982 and the Fair Board's response of June 30, 1982. It seems clear that the City may not provide goods or services which would benefit an individual or organization wihout receiving equitable compensation. This was the justif- ication for the City's discontinuing its policy of snow removal on private property. The City continued to provide services to the local National Guard Unit since the National Guard Unit provided the City compensation for those services through the use of the National Guard equipment. The question of whether the Fair Grounds grass may be continued to be cut by City employees would therefore, hinge upon whether the City received services or compensation in exchange for the work performed. The compensation must be in a form substantially different from mere public service, publicity, or goodwill, since many organizations could assert that they provide such indirect benefits to the City. Although, it may be argued that the Fair Grounds are used for many functions which draw visitors to the City of Hutchinson, this is an indirect benefit that would not qualify as compensation. In reviewing the June 30, 1982 letter from the McLeod County Agricultural Assoc., I find at least areas which may qualify as compensation. The letter indicates that the Fair Grounds have been used for Pee Wee Baseball and snow piling by 3M and the �Cit�. If the Park an Recreation Department uses the Fair Gr— o Hs as a place to hold or conduct baseball games sponsored under its recrea- erect ene its thereof. In addition, if the City uses the Fair Grounds as a place for piling snow removed from City streets or property, they are also receiving a benefit from the McLeod Mayor and Councilmen July 19, 1982 Page 2 County Agricultural Assoc. who could of course, discontinue the City's use of their facilities for such purposes. I would suggest that the City Council review the various uses the City makes of the Fair Grounds and determine whether or not these uses are sufficient to justify the continued practice of cutting of grass by City employees on Fair Ground property. If it is determined that the City receive sufficient benefit to continue the policy, I would suggest that a reciprocal agreement be entered into with the Fair Board specifying what services the City will perform and what benefits the City will receive in exchange for the per- formance of those services. Sincerel' ( y�yours, James H. Schaefer Hutchinson City Attorney JHS:ka . � 0 9 (612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 TO: Mayor & City Council FROM: Bruce Ericson, Parks & Recreation Director DATE: July 23, 1982 SUBJECT: Eheim Park Renovation As part of our Park Development program we would like to completely relandscape Eheim Park since the dam and the rock landscaping is one of the most distinctive areas in Hutchinson. I have been in contact with Milan Dummer and he has indicated that the monies would be available through a Community Action Benevolence Pro- gram. Through this program, funds may be used to support the efforts of volunteers. In this case, the funds will be used to purchase the necessary material, and volunteers will be provided through Grace Lutheran Church to do the work with supervision from our department. We will be doing the necessary work to get the park ready for the new materials. Mr. Dummer has made application with his home office, and if approved, I would like permission to complete this project. The project would be completed prior to the scheduled festivities for September 16th, when the new statue of Little Crow will be dedicated. On the reverse side is the proposal for materials presented to Mr. Dummer. kls q-1" EF_AUII FICA IION OF hHEIM PARK The purpose of this project is to provide landscaping at Eheim Park which will enhance the view of the dam, which is the main attraction in the park and also one othe landmarks for the city. Currently all the trees and shrubs are overgrown and some have even died. These trees and shrubs should not be allowed to grow to such a large size, they should be controlled by pruning, and kept at a smaller size so as not to "hide" any protion of the dam or the rock landscaping at the site. The only way this could be accomplished is to remove all existing trees and shrubs and replace them with new landscaping material. The following is a list of material needed and extimated costs: 8 Junipers (Ames or Iowa) 50 ea. 400 - replaces the five large trees to the north and the tree on the dam 8 Arborvitae (6 techny, 2 techny globe) 30 ea. 400 -four on each side of the steps Assorted Flowers 200 200 -north side of park 1 Clump river birch 100 100 -set between the Indian and the river 15 Taunton Yews 30 ea. 450 -along steps by Indian and the second tier on the west hill 18 Miscellaneous evergreen 50 ea. 900 -for the third tier on the west hill (seven late bloomers and 12 early bloomers) 50 Railroad ties (for landscaping the tiers 300 300 on the west hill) 250' Split rail fencing (a boarder to pro 300 300 tect the park for vehicles) Cement for three benches (we already own 100 100 the benches) TOTAL $3,290 (612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 T0: Mayor & City Council FROM: Bruce Ericson, Parks & Recreation Director DATE: July 23,1982 SUBJECT: Bleachers Due to the high demand for our portable bleachers, I am requesting additional monies to purchase four sets of five row bleachers. The Chamber of Commerce has requested additional seating at the Concert -in- the Park program, and we now move four sets of five row bleachers from Roberts Park to Library Square for these events. This leaves us short of seating at Roberts Park since we have approximately 16 - 18 teams participating at Roberts Park each night. The bleachers would be able to be used for many different activities since they are portable. We could also make use of the bleachers at special events at the Arena and set up a rental charge for independant groups to recover some of the costs. By adding these bleachers to Roberts Park, we would not be short of seating by moving a portion of the bleachers to another location as we do for the concert in the parks. The bleachers would be all aluminum for easy portability and would cost between $2,800- $3,000. There could be money available since we budgeted $7,500 for the High School Tennis Courts and our portion came to $4,425. kls ?- A�- (612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 M E M O R A N D U M DATE: July 23, 1982 TO: — — Moor F, Cit Council _ - - T --------------------- FROM: Mr. Ken Merrill SUBJECT: — — Parking Revenue Bonds— — — — As part of the Parking Program we took the parking meters out on a trial basis. The money from the meters went to retire the revenue bonds issued in 1970. We have made the payments on these bonds from the monies left in the off street parking fund. The next payment is due on August 1st but we are short in the off street fund by about $2,333. When the meters were removed, the payments were to be paid from Parking Bonds of 1981. I have previously reported to Jim Schaefer that we would have enough cash but find the above mentioned shortage. Per Jim Schaefer's letter of July 19, I have referred the matter to the Dorsey Law Firm for determination but have not had a response. I would request in the interim a transfer for the bond payment to be made from the parking bonds of 1981. �u J /// I'/l`(612) 587 -5151 CITY OF NU CAURISON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 July 19, 1982 Mr. Ken Merrill City of Hutchinson City Hall Hutchinson, MN 55350 RE: 1970 Parking Revenue Bonds Dear Ken: I have reviewed my letter to you of September 14, 1981, a copy of which is enclosed. It is my understanding that the 1970 Parking Revenue Bonds are still being paid from funds gen- erated from parking. After the current bond payments have been made it would appear as if there will be insufficient funds generated from parking fees and charges to pay the next bond installment. It will therefore, be necessary for the council to either prepay the outstanding bonds or to provide for sub- stitute sources of payment. If substitute sources of payment are to be made, it will be necessary to notify the bond holders stating the reason for the substitution giving the bond holders an opportunity to be heard. It may be appropriate at this time to contact the Dorsey Law Firm to determine proper procedure to utilize should the Council determine to amend the 1970 Resolution to authorize payment of the bonds from sources other than parking fees. Sincerely yours, C� I �f Jamer,,. Schaefer Hutchinson City Attorney JHS:ka (612) 587 -5151 CITY OF HU C IAISON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 September 14, 1981 Mr. Ken Merrill City of Hutchinson City Hall Hutchinson, MN 55350 RE: 1970 Parking Revenue Bonds Dear Ken: I have reviewed the parking revenue bonds issued on July 13, 1970 and the attached resolution. Based upon the 1970 resolution and the underlined 1968 resolution there is no requirement that you prepay any of the bonds other than as they mature. Since the bonds are to be prepaid or paid from renvenues generated by parking I would suggest that after the six (6) months probationary period outlined by the recent City Council action is over a resolution be introduced amending the method of paying the parking revenue bonds. I would point out Section 10 D of the 1968 resolution states "Said parking fees and charges may be adjusted from time to time, but no such adjustment shall reduce the total revenues from parking until reasonable notice shall be given to the bond purchasers, stating that reason for such reduc- tion, with an opportunity to be heard." Since the removal of the parking meter heads does reduce the total revenues from parking it may be wise to contact the bond holders and inform them of your action and the underlining reasons behind your taking this action. Sincerely yours, ames H. Schaef r Ass't City Attorney JHS:ka 16 (CITY VEHICLES TAKEN HOME BY CITY STAFF) NAME DEAN 040RSKY DICK WAAGE ROGER BAKKEN RALPH NEUMANN DOUG MEIER FINLEY MIX DICK NAGY MARLOW PRIEBE GEORGE FIELD CAL RICE HOMER PITTMAN %k BRUCE ERICKSON c' MARV HAUGEN •;* (ON MILEAGE ALLOWANCE) MOTOR POOL EQUIPMENT SEDANS 9 BUS 3 VANS 4 PICK UPS 14 TRUCKS (1 Ton & over) 18 GRADERS, TRACTORS ETC.29 77 ADDRESS TITLE VEHICLE REASON ROUTE 4 CHIEF OF POLICE 1980 Buick Automobile ON CALL ROUTE 1 DASSEL INVESTIGATOR 1978 Ford Automobile ON CALL 750 LYNN RD. C S 0 1981 Chev. Pick up ON CALL 1119 LEWIS DIRECTOR 1981 Chev. Pick up ON CALL 795 MILWAUKEE SUPERVISOR 1974 Ford Pick up ON CALL 600 DALE SEWAGE PLANT SUPT. 1979 G M C Pick up ON CALL 135 LYNN RD. WATER PLANT SUPT. 1977 Chev. Pick up ON CALL ROUTE T ENGINEER 19 76 CNev. Nova Automobile ON CALL 103 5th Ave NE FIRE MARSHALL 1972 Dodge Wagen ON CALL 566 4th Ave SW Asst. Engineer 1977 Chev. Van For Security Reasons 897 Lynn Rd. BUILDING OFFICIAL 1981 Pontiac Automobile For Security Reasons 456 SHADY RIDGE DIRECTOR (IN THE PAST OCCASIONAL USE) ON CALL ROUTE 1 ARENA MANAGER (IN THE PAST OCCASIONAL USE) ON CALL 71612587 -5151 1 ITY OF HUTCHINSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 M E M O R A N D U M DATE: July 27, 1982 — — — — TO: — Mir and Council - --------------------- FROM: — Water Billing Department — — — SUBJECT: Delinquent Water Accounts ---------------- ----- - - - - -- 02- 0125 -0 -00 Gingerbread House 209 Main St. S. $78.12 Promised to pay 07 -28 -82 02- 0140 -4 -00 David Terhaar *213 Main St. S. 2800 Cooper Ave. N. St. Cloud, MN 56301 $18.77 02- 0215 -0 -00 Mrs. Hazel Reynolds 441 Main St. S. $72.23 02- 0280 -1 -00 Alton Wicklund 605 Main St. S. $104.63 $ 54.63 Paid $ 50.00 Promised to pay 8 -04,82 02- 0645 -3 -00 Cameo Cleaners 34 Second Ave. S.W. $286.52 03- 0030 -2 -00 Wash Tub 235 Hassan St. S. $340.43 Promised to pay 08 -05 -82 03- 0340 -2 -00 Melvin Klockman *S42 Jefferson St. 545 Franklin St. S. $26.30 03- 0420 -2 -00 L. T. Vallacher 142 Third Ave. S.E. $78.87 03- 0500 -8 -00 Yolanda Ross *145 Second Ave. S.E. 315 Lang St. kC Salinas, CA 93901 $140.39 04- 0920 -1 -00 Mike Paulsen 215 Huron St. $13.58 FrAM DELINQUENT LIST CONTINUED 05- 0180 -0 -00 Christy's 18 Main St. N. $81.28 06- 0280 -1 -00 Melvin Klockman 545 Franklin St. S. $63.58 06- 0470 -1 -00 John Thorwardson 125 First Ave. S.W. $54.34 06- 0760 -2 -00 Scott Berquist 130 Third Ave. S.W. $55.65 07- 0590 -3 -00 . Arlene Otto 726 Brown St.- $48.73 Promised to pay 08 -02 -82 *Service Address 07- 0860 -0 -00 Melvin M. Klockman *239 Fifth Ave. S.W. 545 Franklin St. S. $8.80 07- 0910 -1 -00 Robert Orken 310 Fourth Ave. S.W. $58.05 14- 0105 -6 -00 Rick Weispfenning *S50 Linden Ave. 116 Fifth Ave. N.W. $58.01 42- 0070 -1 -00 Frontier House 1125 Plaza 15 $221.77 Promised to pay 07 -28 -82 Recommend that water service be discontinued at 12:00 Noon, Monday, August 2, 1982 unless otherwise noted. 0 CITY OF HUTCHINSON POLICE DEPARTiIk:NT INTRA - DEPARTMENTAL OMMDUM 0 DATE TO, Mayor and Council FROM: Dean 0'8 SUBJECT: Annual Criminal Justice w i'l: 7 -27 -82 I request that Sgt. Ronald Kirchoff attend the 11TH Criminal Justice Seminar. (See attached program) I will also be attending, but have a complimentary registration as I will be on the agenda as a speaker. We find this course to be valuable to us as a yearly update on changing laws in Minnesota. 17th Annual Crhninal Justice Course Name Name Occupation (circle) Attorney Prosecutor Judge Law Enforcement ) Address 31 Washington Avenue West City Hutchinson State MN yip 55350 Phone LAW ENFORCEMENT ID NUMBER (For POST Credit) Enrollment is limited. Early registration is recommended. /'0 — et . August 16, 17 and 18, 1982 Make check payable to: Minnesota CLE Radisson South 7800 Normandale Boulevard Total Enclosed: f Bloomington, Minnesota Course Tuition: 5125.00 (All registrants) Mail to: Minnesota CLE 40 North Milton St. Paul, Minnesota 55104 (612) 227 -8266 Name Name Occupation (circle) Attorney Prosecutor Judge Law Enforcement ) Address 31 Washington Avenue West City Hutchinson State MN yip 55350 Phone LAW ENFORCEMENT ID NUMBER (For POST Credit) Enrollment is limited. Early registration is recommended. /'0 — et . �r 5 C� [ ( r } E ` �, -�� I l., `t:� -�..� l � v ; � I F_ • Cr � 1 1 l : �yti,,. R� August 16, 17 and 18, 1982 Radisson South 7800 Normandale Boulevard Bloomington, Minnesota Sponsored by Minnesota Continuing Legal Education A Division of the Minnesota State Bar Association and Minnesota County Attorneys Association Office of the Minnesota Public Defender Bureau of Criminal Apprehension Office of Continuing Education for State Court Personnel — Supreme Court of Minnesota Office of the Attorney General Last year over 675 registrants attended Minnesota CLE's Annual Criminal Justice Institute. This two and one -half day seminar is designed to bring together those people who are responsible for administering Minnesota's criminal justice system and Is designed to meet the educational needs of judges, prosecutors, defense attorneys and law enforcement officers. This year's faculty is composed of over 30 criminal justice professionals. Topics included in the 17th Annual Criminal Justice Institute are: • Misdemeanor Issues • Latest Felony Decisions • New Minnesota DWI & implied Consent Law • Hearsay — Prosecutorial Misconduct — Premeditation • New Juvenile Rules for Minnesota • Sentencing Guideline Changes & Departure Decisions • Data Privacy Act Modifications • Law-Enforcement Personnel issues The Annual Criminal Justice Institute is a genuinely cooperative program composed of law enforcement officials, prosecutors, judges and defense attorneys, each working to ensure the fair administration of justice. The continuing popularity of this Institute is a tribute to the spirit of professional pride each of these groups possesses. This seminar is a must for anyone who comes into working contact with Minnesota's criminal justice system. It will provide them with not only a review of many important substantive areas of law, but also an update of the recent "and important cases and issues in the criminal law area. REGULAR COUNCIL MEETING WATER & SEWER FUND *State Treasurer *State Treasurer Dehns Four Seasons Murphy Warehouse Co. Blue Cross Blue Shield Equitable Life Ass. Soc. Floor Care Supply Jerabek Mcachine Shop VWR Scientific Inc. Mn. Mutual Life Ins. Central Garage Lillian Michaels GENERAL FUND *State Treasurer *State Treasurer *Mn. State Treasurer *State Treasurer *Wigen Chevrolet Co. *Commissioner of Revenue Bonds of 1976 Conklin Products Hutch Coop Oil Co. Hutch Schwinn Cyclery K Mart Lakeside Roller Rink Mn. Ice Arena Mgr. Assn. Mn. Toro Inc. Office Products of Mn. Inc Tele Terminals Viking Fire equipment Gene Gruett Lynette Jensen David McGraw Doreen Streich John Marvan Jeff Flom Wendell Mathews Les Linder Clint Gruett Amoco Oil Co. Allen Precision Equipment Albarecht Oil Co. Blue Cross Blue Shield Copy Systems Inc. Copy Equipment Inc. July 27, 1982 Soc. Sec. $ 390.92 PERA 311.79 boat registration fees 793.00 PUMP 117.46 freight charges 9918.96 aug. medical ins. 846.29 aug. long term ins. 60.51 supplies 17.90 shaft 90.94 supplies 31.65 aug. life ins. 48.64 repair jobs 8 labor 678.88 mileage 18.40 repair parts 3406.38 Soc. Sec. $ 5464.05 airport license renewal 5.00 boat registration fees 161.00 PERA 3989.57 1982 police car 9918.96 arena june sale tax 261.04 refund check from ST of Mn. 5966.42 cleaning supplies 11.70 LP gas 7.50 bike repairs 4.89 6 rain suits 83.82 40% skating receipts 345.60 membership fees 50.00 repair parts 302.34 discs & ribbons 101.50 ribbons 52.52 supplies 131.82 swimming refund 8.00 swimming refund 8.00 swimming refund 8.00 shelter refund 5.00 state fire school 75.00 % safety shoes 20.00 % safety shoes 10.00 bus transportation 992.18 state fire convention 249.35 gasoline 28.19 152.98 paint 50.90 gasoline aug. medical ins. 10,135.24 supplies 47.70 supplies 41.85 //' Q -2- Co. Treasurer Central Garage Condons Supply Earl F. Anderson $ Assoc. Equitable Life Ass. Soc. Farmers Elevator Assn. Felskas Auto Machine Floor Care Supply Great Plains Supply Co. Gambles Gopher Athletic G.F. Nemitz Sons Henrys Candy Co. Hutch Hosp. Auxiliary ICMA Retirement Corp Jerabek Machine Sholr Juul Contracting Kokesh League of Mn. Cities Logis Mn. Mutual Ins. Co. Mn. U C Fund Mason Pub. Co. Marilyn Swanson Kenneth Merrill Schramm Implement Sorensen Farm Supply United Bldg. Centers Xerox Hutchinson Landscaping 9 dl fees for co. repair jobs 4 labor arena supplies signs aug. disability ins. salt repairs cleaning supplies supplies supplies supplies- recreation repairs arena supplies council meeting employer share supplies 5% retainage -final payment supplies recreation league dues computer charges aug. life ins. unemployment payments law books cassette tapes 4 coffee logis meetings supplies parts supplies supplies maintenance agreement tree removal 75.50 13,931.81 61.89 230.25 627.32 12.40 42.60 23.16 165.72 18.71 62.67 14.35 133.25 76.55 146.00 1.30 1328.50 206.89 2872.00 1722.84 514.14 1376.04 29.50 18.97 32.66 113.51 37.44 101.32 183.29 6687.15 69,537.85 • • -3- ' OFF STREET PARKING Citizens Bank interest 1st National Bank principal & interest 1981 Parking Bonds Bennie Carlson July monthly payment Bennie Carlson Aug. monthly payment 1981 Fire Hall Bonds Gambles welder £, air compressor Popps Electrical electricial work G.F. Nemitz Sons paint thinner Bonds of 1981 Wm. Mueller $ Sons Inc. crushed rock Koch Asphalt Co. street materials Quickie Transport Co. freight chgs. on oil MUNICIPAL LIQUOR STORE Old Peoria Co. wine $ liquor Ed Phillips $ Sons wine $ liquor Griggs Cooper $ Co. wine $ liquor Twin City Wine Co. wine $ liquor Ed Phillips 4 Sons wine €, liquor Twin City Wine Co. wine $ liquor Griggs Cooper & Co. wine $ liquor Old Peoria Co. wine 8 liquor City of Hutchinson insurance and fund transfer Northland Beverage Inc. mix Totushek Trucking freight charges Coca Cola Bottling june ice and display cooler Stritesky Trucking compressor freight Kenneth Merrill mileage Old Peoria Co. wine $ liquor Griggs Cooper wine & liquor Ed Phillips & Sons wine $ liquor Twin City Wine Co. wine $ liquor 525.00 10,875.00 11,400.00 669.30 669.30 1338.60 705.00 286.78 21.80 1013.58 9000.00 5509.98 212.78 14,722.76 3616.03 1644.10 1235.37 903.91 2833.72 959.08 3635.10 2777.52 18,717.00 340.25 48.52 2215.50 15.00 32.20 2068.78 1305.88 2954.78 820.50 $ 43,123.24 The Mmnesola Department ci nerdy. Plannng & Developmenl Y July 20, 1982 Gary Plotz City Administrator 37 Washington Avenue West Hutchinson, MN 55350 • 11$`c�y0c�`�r$ JUL Q2 �Etv� er n. FOR YOUR INFORMATION RE: Completion of NR 290, West River Park Extension City of Hutchinson, McLeod County Dear Mr. Plotz: We are pleased to inform you that all necessary documents have been received and found acceptable for the above designated project. Based upon review of these documents, it appears that the project has been completed in accordance with the project agreement. Therefore we have closed out this project subject to final inspection and future audit. Sincer y, Han K. Inn, Project Officer/ Parks and Recreation Grants Section /cak goof Planning Division 100 Capitol Square, 550 Cedar Street, St. Paul, MN 55101 612- 296 -a°' (612) 587 -5151 CITY OF HUTCF1INSON 37 WASHINGTON AVENUE WEST HUTCHINSON, MINN. 55350 M E M o R .A N D U M FOR YOUR INFORMATION DA'L'E: July 21, -1982 TO: Mr. Eugene Birk — -------------=— — — — — — — — — — — — — — — — — FROM: Ralph Neumann - -------------------------------- SUBJECT: Sludge disposal in Hassan Valley Township - -------------------------- - - - - -- After discussing this with Marlow Priebe and Finley Mix, it is our concensus that you and Mr. Schmidtbauer meet with the Hassan Valley Town Board and review with them the procedure the City of Hutchinson has in disposing of its sewage sludge. The operation of our plant has changed drastically since the Town Board expressed their desire for no sludge in their Township. Our State Permits specifically spells out our obligations and requirements, therefore no offensive odors or dangerous runoffs are allowed. Also, our sludge is now in a solid state versus a liquid mixture at the time of their objection. I would be happy to attend any meeting you wish to make with the Town Board and would also be happy to make arrangements for them to take a personal tour of our Sewage Plant so they can observe what a fine organic fertilizer is available to our farmer friends. Copy: Marlow Priebe Finley Mix Gary Plotz Richard Schmidtbauer Si G Ra • J HUTCHINSON AREA CHAMBER OF COMMERCE Burlington Northern Task Force Tuesday, July 20, 1982 Central District Services Building I� r' F?a MEETING NOTES FOR YOUR Mr. Dennis McLeod stated to the users the findings and projections of BN from their survey results. Basically, BN had reclassified the Hutchinson branch line after reviewing past and projected revenue. When the revenue from the past five months was compared with actual business, the Hutchinson line did not meet projections and BN is now watching the line carefully to see if the traffic increases and thus warrant rehabilitation. The rehabilitation /abandonment map is reviewed each June and we have nine months to change the current statistics -. BN had determined to rehabilitate all the track to at least 100 -115 pound rail to facilitate heavy traffic in 1984. Now that our revenue is down they will review it again in the Spring to either go back into Category one (1) or be scheduled for rehabilitation. A discussion on the proposed connector track through the Industrial Park with the ability to facilitate Farmers Elevator and the north side of the river. This trackage would increase revenue by adding back at least five (5) major shippers. BN stated they would have figures on the connector track in three (3) weeks. Shippers present urged BN to consider: 1. That the survey was a five (5) year projection not a six (6) month survey. 2. The economy has been down everywhere and every shipper is staying close to inventory lines with less storage. 3. To evaluate Hutchinson usage with their other lines. Was our percentage of use down any further than other areas due to economy. 4. That in the past year after the red flagging of the bridge, we lost some of our major shippers. 5. Service has been very unreliable due to the condition of the track, connections, and long delays of shipments. That poor service has resulted in some shippers having to rely more heavily on trucks. BN stated it will cost $7,000,000.00 to rehabilitate line; that they would consider help from state or federal funds (803). In the end, it will be a business decision based on revenue exceeding expenses. The city of Hutchinson has some funds set aside to help construct the area for the connector track. Everyone concerned wants the assurance that if that money is spent for this facility, we will have continued and improved rail service to justify the expenditure. Another meeting will be called with BN in January 1983. We will report later on the determination of the connector track. Notes: Clarice Coston Burlington Northern Meeting Attendance List July 20, 1982 1. Rock Lindlan City of Mound 2. Joe Fogarty Farmers Co -op, Lester Prairie 3. Darrell C. Haugen Harris Pine Mills 4. Les Forman - Lester's 5. Jack L. Cauch Burlington Northern R.R. 6. Sheldon Vies 3 -M 7. Cathy Nevanen Hutch Leader 8. Larry Graf KDUZ 9. Dick Bowman Tonka Toys 10. Jon Sxhwichtenberg Lester's 11. Bill Valek Cenex 12. Julius Rainwater Pure Culture Products 13. Adolph Kvam State Representative 14. Marlow V. Priebe City Engineer, Hutchinson 15. Galen Houk Great Plains Supply 16. John Bernhagen Senate 17. Jon Ransau Hutchinson Mfg. & Sales 18. Ray Zimmerman Farmers Elevator, 19. Roger Stearns Stearnswood 20. Denny McLeod Burlington Northern 21. Gary Anderson " 22. Jean Arndt " 23. Rich Batie " • • DORSEY & WHITNEY A Partnership Including Professional Corporations • 2200 FIRST BANK PLACE EAST MINNEAPOLIS, MINNESOTA 55402 880 WEST -FIRST NATIONAL BANK BUILDING (612) 340 -2600 ST. PAUL, MINNESOTA 55101 (612) 227- 6017 TELEX: 29-0605 TELECOPIEF: (612) 340-2866 P. O. BOX 846 340 FIRST NATIONAL BANK BUILDING ROCHESTER, MINNESOTA 55903 (507) 288-3156 312 FIRST NATIONAL BANK BUILDING WAYZATA, MINNESOTA 55391 O (612) 475 -0373 July 22, 1982 7) LIP 11)01 Mr. James Schaefer - ir�q�1� (/l� c Keefe, Schantzen & Schaefer� I / Attri�� P.O. Box 232 /„ Hutchinson, Minnesota 55350 Dear Jim: FOR YOUR INFORMATION 201 DAVIDSON BUILDING 8 THIRD STREET NORTH GREAT FALLS MONTANA 59401 (406))27.3632 SUITE 675 NORTH 1800 M STREET N. W. WASHINGTON, D. C. 20036 (202)296 -2780 30 RUE IA BOETIE 75008 PARIS, FRANCE TEL: (1) 562 32 50 So m As we discussed earlier this week I have reviewed the proposed Sale and Development Agreement to be entered into be- tween the City of Hutchinson and Hutchinson S & L Rehab, Limited Partnership. My review of the Agreement was undertaken in our capacity as bond counsel to the City and was limited to matters which affect the validity of and tax exemption of the interest on any tax increment bond and industrial develop- ment revenue bonds to be issued by the City to finance the S & L Project. In order to avoid the tax increment bonds issued by the City for the S & L Project from being classified as indus- trial development bonds under Section 103(b) of the Internal Revenue Code of 1954, as amended, it is advisable that the guaranty of tax increment contained in Section 5.02 of the Agreement be revised to the extent necessary to ensure that at no point in time the Partnership shall have paid to the City pursuant to the guaranty an amount in excess of 258 of the principal that has come due on the tax increment bonds and 258 of the interest that has come due on the tax increment bonds. Accordingly, I would suggest that Section 5.02 of the Agreement be amended to read as follows: "15.02. Partial Bond. For purposes of this Agreement, "Developer's Bonds" means the Bonds issued by the City with respect to the Tax Increment Project. It is estimated that the principal of and interest on the Bonds will come due on the dates specified in the attached Exhibit D, and the Developer agrees to pay to the City at the times and subject to the limi- tations herein provided, the amount needed in addition to the Tax Increment to be derived from the District, DORSEY & WHITNEY Page -2- Mr. James Schaefer , July 22, 1982 and any interest earnings thereon available to the City, to pay the principal of and interest on the Developer's Bonds when due. The Developer agrees to pay such amount to the City immediately upon re- ceipt of a request therefor from the City; provided that (i) in no event shall the total amount paid to the City pursuant to any such request to pay principal on the Developer's Bonds exceed at any point in time 25% of the amount of principal that has become due and payable on the Developer's Bonds and (ii) in no event shall the total amount paid to the City pursuant to any such request to pay interest on the Developer's Bonds exceed at any point in time 25% of the interest that has become due and payable on the Developer's Bonds." It will also be necessary to amend Section 4.10 of the Agreement along these same lines. Should you have any questions or comments concerning the matters addressed in this letter, please give me a call. JPG:cmn cc: Vary Plotz James McClure Robert Beattie U Yours truly, erom P. Gill n • fY. DEPARTMENT OF ENERGY, PLANNING & DEVELOPMENT July 21, 1982 The Honorable James DeMeyer Mayor of Hutchinson 37 Washington Avenue W. Hutchinson, MN 55350 �1j11982 �"'� gECEIVED W sv.___-- el FOR YOUR INFORMATION Re: $900,000 Commercial Development Revenue Note (Hutchinson S &L Rehab, Limited Partnership Project) City of Hutchinson, MN Dear Mayor DeMeyer: The Department of Energy, Planning and Development has examined the application and exhibits submitted by you relating to the proposal to offer revenue bonds as authorized by the Municipal Industrial Development Act, M. S. Chapter 474. Based upon the information submitted by you, approval of the project is hereby granted by the Department of Energy, Planning and Development. Such approval shall not be deemed to be an approval by the Commissioner or the State of Minnesota for the feasibility of the project or the terms of the revenue agreement to be executed or the bonds to be issued therefor. Very truly yours, Kent E. Eklund Commissioner Enclosure cc: J. Gilligan, Dorsey & Whitney 101 Capitol Square Building 550 Cedar Street St. Paul, Minnesota 55101 C"- 00424 -C-1 s Appllca sioner in duplicate. r T t STATE OF MINNESOTA DEPA. 71"'E.'"T OF ENERGY, PLANNING AND DEVELOPMENT c:S_;JESS SERVICES Application For Approval of Municipal Industrial Revenue Bond Project Date July 13, 1982 1�. Minnesota Department of E nergy, Planning and Development Business Services 480 Cedar Street St. Paul, W1, 55101 The governing body of Hutchinson , County of McLeod Minnesota, hereby applies to the Comissioner of the State of Minnesota, Department of Energy, Planning and vevelopment, for approval of this community's proposed n:nicipal Industrial Revenue Bond Issue, as required by Section 1, Subdivision 7, Chapter 474, Minnesota Statutes. , We have entered into preliminary discussions with: Firm Hutchinson S & L Rehab, Limited Partnership ✓ Address Highgav 7 hest, P.O. Box 248 City Hutchinson State Minnesota State of Incorporation a Minnesota limited partnership Attorney W.B. Haas Address Tintnhi n--nn , Mi nnpgota Name of Project Hutchinson S & L Rehab,_ Limited Partnership This firm is engaged primarily in (nature of business): development and leasing of multi— tenant commercial building The funds received from the sale of the Industrial Revenue Bonds will be used to (General nature of project): Acquire rehabilitate and renovate the S & L Building located in the City. It will be located in Hutchinson, Minnesota The total bond issue will be approximately $ 900,000 to be applied toward payment of costs now estimated as follows: Cost Item Land Acquisition and Site Development Construction Contracts Equipment Acquisition and Installation Architectural and Engineering Fees Legal Fees Interest during Construction Initial Bond Reserve Contingencies Bond Discount Other $ 160,000 665,000 200,000 23,000 34,000 23,000 Amount It is rresently estimat that construction will begin �r about July 15 1982 , and will be comp ed on or about October 15 , 19.$2 When conpleted, there will be approximately 45 new jobs created by the project at an annual payroll of approximately S 600,000 based upon currently prevailing wages. The tentative term of the financing is 20 years, commencing August I , 1982 . The follav,-ing exhibits are furnished with this application and are incorporated herein by reference: 1. An opinion of bond counsel that the proposal constitutes a project under Minnesota Stat., Chapter 474.02. _ 2. A copy of the city council resolution giving preliminary approval for the issuance of its revenue bonds. 3. A comprehensive statement by the municipality indicating how the project satisfies the public purpose of Minnesota Stat., Chapter 474.01. 4. A letter of intent to purchase the bond issue or a letter confirming the ` easibility of the project from a financial standpoint. 5. A statement, signed by the principal representative of the issuing. authority, to the effect that upon entering into the revenue agreement, the information required by Minn. Stat., Ch. 474.01 Subd. 8 will be submitted to the Department of Energy, Planning and Development. 6. A statement, signed by the principa.l- representative of the issuing authority, that the project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 7. A statement, signed by the principal representative of the issuing authority, that a public hearing was conducted pursuant to Minn. Stat. 474.01 Subd. 7b. The statement shall include the date, time and place of the meeting and that all interested parties were afforded an opportunity to express their views. 8. A copy of the notice of publication of the public hearing. or appointed We, the undersigned, are duly elected /representatives of Hutchinson Minnes a, and solicit your approval of this project at your earliest convenience so that � may carry it toja—finaj conclusion. Sig d by: r�tipal ers or Representatives of Issuing Authority) I, .ay of v Cit3kylerk This approval shall not be deemed to be an approval by the Commissioner or the State of the feasibility of the project or the terms of the /ieassa to be executed or the bonds to be issued therefor. revenue agreement Date of Approval JUL 2 1 1982 Commissioner Minnesota Department of Energy. Planning and Development INSUANCE SERVICE OFFICE OF MINNESOTA 12 SO. SIXTH ST., ROOM 1229, MINNEAPOLIS, MINN. 55402-154Z i CE g O TEIFPHONE: (612) 338 -6200 C.S. WRIGHT. MANAGER FOR YOUR INFORMATION m JUC 1982 REC,EIVZD July 20, 1982 or Mr. James G. DeMeyer, Mayor Municipal Building 37 Washington Avenue East Hutchinson, MN 55350 Dear Mr. DeMeyer: We have received your request for a survey of your city. We will schedule Hutchinson for a survey as soon as personnel are available. As you may know, the public protection classification number is used by Insurance Services office as only one of several elements in developing some individual property fire insurance rates. Individual property fire rates are also dependent upon specific construction, occupancy, private protection and exposure from adjacent buildings. The purpose of the survey will be to gather information needed to determine a fire insurance classification which may be used to develop fire insurance rates. It will not be for property loss prevention or life safety purposes and no life safety or property loss recommendations will be made. Very truly yours, 7- C. &12' � T. G. Ryan Assistant Supervisor Pricing Services tgr:ah (612) 587 -5151 CITY OF HUTCHINSON 37 WASHINGTON AVENUE LVEST HUTCHINSON, MINN. 55350 July 15, 1982 O O M E M O R A N D U M �O TO: DIRECTORS, DEPARTMENT HEADS, SUPERVISORS AND /OR FOREMEN 9 FROM: GARY PLOTZ, CITY ADMINISTRATOR SUBJECT: PERFORMANCE REVIEW Although the City Council determined there were insufficient funds for merit increases at mid -year, the Council has requested a 1982 performance review for every employee, covering the past twelve months time frame. Each supervisor or foreman shall evaluate each employee that he is responsible for, directs, or oversees. Use the attached suggested form No. 1. You may want to review your findings with your director. Once the attached written form is completed, you are to meet with each of the respective employees and at that time present the employee with a copy of the report and review it. Again, if you need assistance you may choose to do this with your director and /or confer with Hazel Sitz, Personnel Coordinator. Directors are to review their department heads and foremen in the same manner, using form No. 2. Likewise, the City Administrator will review directors in a similar way. The City Council has requested a copy of each of the reports and will review with me. The City Council has directed that the process be done. Your written evaluation and personal meeting with each of the employees shall be completed by August 10. After this date, all reports are to be filed directly with Hazel Sitz, Personnel Coordinator. Thank you and Good Luck. i • 0 THE HUTCHINSON SAFETY COUNCIL FOR YOUR INFORMATION The Hutchinson Safety Council met June 28, 1982, 12 noon, at the Fire Hall. There were 14 members present The meeting was opened with a silent prayer by President Myron Johnson. The May minutes were approved as read. A bill of 12.50.from Myron Johnson for flowers for the new Fire Hall Open House was approved by motion. Old Business: Fair Booth: Go ahead and order films and booklet materials. Prizes eachday will be the responsibility of each days safety department. George Field stated that the damaged vehicle, due to fireworks, that was in the Hutchinson Water Carnival, came thru the courtesy of the State Fire Marshall. It was free of charge and it was also displayed at the shopping mall after the parade. Regarding the pump in the South Park, Orville Kuiken stated there were not; any chemicals in the water there. New Business: Sheriff Kopesky is running for re- election and asked permission to use the Hutchinson Safety Council name as an organization he belonged to in campaign leterature. The motion was made and seconded to allow any member to use the Safety Council name as being a, member when asked to what organization they belong when running for office. iVarren Kempfert stated he attened the Minnesots State Safety Confernee and it was a good meeting. He hopes to have one of the speakers come to the Hutchinson 3M Plant and speak. He.spoke on future safety regarding robot use and solar energy. Also announced the Fire Department had been awarded a plaque for Fire Education from the National Fire Council. A discussirm on OSHA rules, regulations and requirements as to what plant management of factories wants to do, as they have different alternatives. The next meeting will be July 26th, at the Fire Hall. Loretta I'i.shney will send a get well card to Joyce Rix. Guy Field announced we are invited to the city /farm breakfast tours. The meeting was adjourned by motion. Submitted by: Myron Johnson, President Loretta F. Pishney, Secr. Treas. Treasurer's Report: Balance on hand June 1, 1982 163.41 Deposits: none Disbursements:M. Johnson, flowers fire hall open house 12.50 Balance on hand June 30, 1982 150.91 _•` • INVESTIGATION REPORT FOR YOUR INFORMATION HUTCHINSON POLICE DEPARTMENT For All crimes, attempts. & Incidents Offense /Incident: Location of Occurrence: DAMAGE TO PROPERTY/2902/609.535 Clifton Heights (Garden Road) Person Reporting Incident: (Last, First, L• Middle) JAHNER, VINCENT LEL.AND (DOB) 1-9-44 Place of Employment: 3M Company •Business Phone: Home Phone: 587 -6044 Home Address: (Street) (City) (State) (Zip) 712 Hilltop Drive, Hutchinson, MN 55350 Local Address: (Street) (City) (State)(Zip) Victim /Complainant: (If firm, name of firm and name of Prop.) Address: Business Phone: Home Phone: Date Reported: 4 -17 -82 Time Reported: 1 08:45 Date Committed: 4 -17 -82 Time Committed: 100 00 to 0800 Reported To: Sgt. Schwartz Details of Offense: Above complainant states he got his 1976 Pontiac, license kAKY -958 stuck on Garden Road when attempting to go to work at 00:00 on 4- 17 -82. When he returned at 0800 he found the windshield to have been broken. Windshield appeared to have been struck with a circular object approximately 2" in diameter. Mr. Jahner has no suspects, desirous of prosecution. Loss: No. Items Brand Model Serial No. Size Color Identifiable Marks Value 1 windshield for 1976 Pontiac 9 336 00 Total * Loss: S 336 Do Officer's Signature Sgt. Schwartz Supervisor's Signature .1} PLAINTIFF rt DI ENDANT rI STATEMENT OF CLAIM SUMMONS NOTICE OF HEARING FAILURE TO APPEAR UCF -8B (12 -81) 1111jr DM Printing, Inc. P.O. Box 996 Statement of Claim and Summons Mankato, MN 56001 (507) 387 -0444 Cone. C(. R. 1.08; 1.09 State of Minnesota Conciliation Court Hutchinson, "innesota COUNTY OF " -cLeod NO. ')IFr NAME AND ADDRESS NAME AND ADDRESS Vincent Jahner PLAINTIFF 712 Hilltop Drive MY Hutchinson, MN 2,,55350 ZIP vs. vs. NAME AND ADDRESS NAME AND ADDRESS City cF Hutchinson DEFENDANT 37 Washington Ave West n Hutchinson, MN 55350 ZIP ZIP Name Vincent Jahner Title being duly sworn says that e is the plaintiff above named; that the defendant is at least 18 years old; that the defendant is not now in the Military Service; that the defendant is a resident of sSnl.and 'tolmty; and alleges that the defendant is indebted to the plaintiff in the amount of $ Li 5 11 1 plus $ a _ nn filing fee, totalling $ 471-11 plus disbursements, by reason of the following facts: for damages caused to automobile resulting from xxxidgial condition of street on Garden Road (4- 16 -82) j 1 {Y J i le NWARY STAMP OR CLERKS SW- SUBSCRIBED AND SWORN THE ABOVE STATEMENT OF CLAIM IS TRUE AND BEFORE MEON: CORRECT TO THE BEST FMYKN LED E. rR f D SIGNATURE I TELEPHONE BI IJATUR THE STATE OF MINNESOTA UXTIIE ABOVE NAMED DEFENDANT You are hereby summoned to appear at the hearing of the above entitled case at 9:00 a. m., on .July 6.,R82 at County Court City Ba77 Hntrhinann TIME GATE PLACE Clerk LIRV E. Linke Dated: Tlay 20, 1982 at Hutchinson Minnesota Deput IF YOU FAIL TO APPEAR AND ANSWER THIS CLAIM AT THE ABOVE TIME AND PLACE, JUDGMENT WILL BE ENTERED AGAINST YOU BY DEFAULT FOR THE AMOUNT CLAIMED. YELLOW — DEFENDANT'S COPY _... Read reverse Side for inmortant instructions NO. 2 z 0 PLAINTIFF 81 DEFENDANT «1 ORDER FOR JUDGMENT ON CLAIM AND COUNTER CLAIM JUDGMENT NOTICE OF JUDGMENT TRANSCRIPT DF JUDGWNT UCF -9B (12 -81) \j DM Printing, Inc. P.O. Box 9% 1 Judgment and Notice of Judgment t.-{ Mankato, MN 56001 (507) 387 -4444 N- /I Conc. Cr. R. 1.14 State of Minnesota Conciliation Court COUNTY OF = icLeod NO L`Sb NAME AND ADDRESS NAME AND ADDRESS Vincent Jahner PLAINTIFF -- -- — -- -- - - 712 Hilltop Drive #2 Hutchinson, 211,' ZIP 55312 ZIP vs. vs. NAME AND ADDRESS NAME AND ADDRESS City of Hutchinson DEFENDANT 37 Washington Ave W n Hutchinson, iii ZIP 55350 ZIP Appearances: [T- Plaintiff ® Defendant ❑ Neither Party 0 Contested ❑ Default Upon evidence received, IT IS HEREBY ORDERED That the plaintiff is entitled to judgmentagainst the defendant in the sum of $ 0 plus filing.fees of $ 0 and disbursements of $ 0 for a totall of $f00 Dated: July 12 1982 Judge: d n _ Pursuant to the Court's Order for Judgment herein, IT IS HEREBY ADJUDGELh.a yhe n1 a ibtif f have and receive from the de in the sum of plus filing fees of $ 0 and disbursements of $ for a total of $ 0 - - -- - - - -- - - - -- -Clerk Dated: July 12, 1982 The Parties are hereby notified that the Clerk has entered Judgment as indicated above, but the Judgment is stayed by statute until July 23, 1982 5:00 P.M. (to allow time for an appeal if desired). Date Time Clerk S.-lovd E. Li ke_ Dated: July 12, 1982 Deput; I certify that the above is a correct transcript of the Judgment rendered in this Court. Clerk Dated Deputy Am YELLOW – DEFENDANT'S COPY Read reverse side for important instructions 7_ C G�wl. l7' UR . NFOR AT10 - _ FOR Y0 lqrrl 6 t✓ �L - - -L� o Bc 9 G� ar a ` - -- u 1d �� /sit J/ ! 151 a i I A. I 41. ". fT a end Pot. J'1{ / ll d _. ss� 151 . -1 3 /4L� y� ;596 07 I I ? > / 7. s l7 /71 1L .A7, of /U21 79, JAI 19H� _! - .I - - a s � — -_ Ytd__ -.. I / 7 • 9l� � J ...- .. 9 411 `'IJ 1/ 4 33 m JAIJ 1�3 Alit f 70J ... 4x 37a _ 87,is Ij F Ot.. n A. :, -... _ 7,7fp— L. _J t7LI _ ._ __ - !� ...173 :, - A b a 1 - r. l 9 lfol I ! 4w . � to_ 7 3L -.! -.1 _—!'i _. _ oil_. .3 98i . .7. a •-� / _ — 3-1— — - _ J a I' rr a IL n �r� n I C) v- ]C n, ' __ -_ _-TT w iy'i.. lI u ,1, �[I{ llll 1111 IIIfI 1�1 _U league ,i, R July 7, 1982 �t r Mr. Gary Plotz City Administrator 37 Washington Ave W Hutchinson, MN 55350 Dear Gary: u of mJ�- pelota cities r I ` y N [tiw�i� aEl Hr °` �Irlr -om r-y JU11982 RECEiYED ey� FOR YOUR INFORMATI�i In response to your request of June 29, I am sending you a copy of M.S. 471.616, which governs the reduction of employee benefits by cities. Basically, the statute provides that the aggregate value of benefits may not be reduced, except with the approval of the employees. For union employees, this means approval by the certified bargaining unit. For non -union employees, the approval process is to hold an election among the covered employees. Neither the Court nor the Attorney General has ruled on the question whether this statute would prohibit passing through a premium increase to the employee. However, for a couple of reasons, it does not appear that the statute would be so construed. First, the term "benefits" has a fairly well- defined meaning in the insurance field, and generally wouldn't be used to refer to premiums. This is consistent with the use of the term elsewhere in the statute. See, for example, Chapter 62A and 62E. See also the statutory canons of construction, M.S. 645.08 (1). Second, the statute has not generally been construed to prohibit a pass through of premium increases. The statute prior to 1978 formerly flatly prohibited any benefit increase. The 1978 amendment, allowing decreases with employee approval, was supported by the unions, the reason being that many labor contracts call for a sharing of premium costs between the employer on either a percentage basis or on the basis of a flat dollar amount employer contribution. The complete prohibition of benefit reductions had the effect of preventing the union from negotiating for, say, higher deductibles in order to hold down the employees' premium costs. If the statute prohibited the passthrough of premium increases, there would have been no reason for the unions to support the amendment. 1 80 university avenue east, st. paul, minnesota 551 01 (612)227-5600 Mr. Gary Plotz Page 2 July 7, 1982 Third, if the statute were continued as prohibiting the passthrough of a premium increase, the provisions for employee approval of benefit reductions would seem to be pointless. If increased premiums could not be passed through, it is difficult to see why employees would ever approve a benefit reduction. Of course, in a particular situation, an existing contract might prohibit the city from passing through a premium increase, but this would be a local matter and not a statutory question. I hope this will be of some help you need further information. k Si ely, ete Tritz Research Director Enclosure PT:lw 4 � Please feel free to contact us again if 471.15 RIGIfTS. MOWERS, DUTIES; SEVERAL. FOLMCAL suBDIVISIONS 1494 CHAPTER 471 RIGHTS, POWERS, DUTIES; SEVERAL POLITICAL SUBDIVISIONS 471645 Firarcul rtatemrnt wnliotim: m kiW vl.15 RtvatintW fwilitie apuor aae. r71.571 Cmtsam Ia rovnmtian a 471735 Mcetinp d Wvtrninl{ Mdie: open n wt. .Ortr_ lie: noepi. 41: 616 G-1 insuru,.x: Wtvn ..1 units. 471.71 fiords w mire WAFAW 6debl l 4'617 W inauvKe d v 011 6 11, 6e It,. 471.15 RECRF_4'I "ZONAL FACILITIFS. Any hone rule charter or statutory city or anv town, county, school district, any incorporated post of the American Legion or any or any board thereof, or other incorporated veterans organization, may expend not to exceed $800 in any and may operate a program of one year, for the purchase of awards and tr nphies and maintain land, buildings, public recreation and playgrounds; acquire. equip, recreational facilities, including an outd3or or indoor swimming pool; or other and expend funds for the operation of such program pursuant to the provisions of town. county or school district may issue sections 471.15 to 471.19. The city, bonds to chapter 475 for the purpose of carrying out the powers granted 3 pursuant by this section. The city, town, county or school district may operate the program boards to operate all or and facilities directly or establish one or more recreation various parts of them. History: 1981 c 47 s 1 471.371 CONTRACTS FOR CONSTRUCTION OF TREATMENT WORKS. [For text of subds I and Z see M.S.19801 Subd. 3. limitations. The provisions'ef subdivision 2 shall not in any way the practice of architecture, limit the application and effect of laws governing or land surveying in this state, including sections 326.02 professional engineering, 1 to 326.15, and 541.051. [For text of subds 4 to 6, see M.S. 19801 History: ISp1981 c 4 art I s 35 471.616 GROUP INSURANCE; GOVERNMENTAL UNITS' Subdivision 1. Bidding required. No governmental subdivision, political or any other body corporate and politic authorized by law to purchase subdivision, insurance for its employees and providing or intending to provide group into group and benefits for 25 or more of its employees shall enter insurance protections a contract for or renew any group insurance policy or contract without calling for bidder by way of bids and awarding the contract to the lowest responsible similar to those for the provision of services and competitive bidding procedures under Minnesota Statutes 1971, Section 16.07, Subdivisions 1, 2, 4 and 5. supplies A political subdivision may provide in the bid specifications that self insured bidder means the health benefit plans will not be considered. Lowest responsible insurance if allowed by the bid insurer, service plan corporation, or self plan, specifications which offers the lowest cost, is authorized to do business in this i state, and is deemed by the governmental unit to be capable of satisfactorily the or contract in accordance with the bid r + performing the administration of policy "Cost' means in the case of an : nsurer, the premium rate; in the } _a specifications. a• 1495 RIGHTS, POWERS, DUTIES; SEVERAL POIXnCAI. SUBDIVISIONS 471.617 case of service plan corporation, the charge for expanses and risk taking; and in the case of self insurance plans, the sum of the cost of paid claims, including provision for estimated incurred but unpaid claims at the end of the term, administrative costs, and premium for excess coverage. The cost of changing plans may also be considered in determining the lowest cos[. The aggregate value of benefits provided by a contract entered into after July 1, 1973 shall not be less than those provided by the preexisting contract (a) unless a majority of the employees covered under the group insurance plan and voting on the question ^ agree to a reduction in the benefits, if the employees are not represented by an exclusive representative pursuant to section 179.67, or (b) unless the public employer and the exclusive representative of the employees of an appropriate bargaining unit, certified pursuant to section 179.67, agree to a reduction in the rict, benefits. The aggregate value of benefits of any former employee who has retired any shall not, in any event, be reduced pursuant to clause (a) or (b), unless he has any individually agreed to the reduction. n of No contract need be submitted to bid more frequently than once every 48 ags, months, unless for any reason whatsoever, a 50 percent or greater change in the .01; premium per covered employee under the policy comtractis provided, required or of indicated. If additional employees are added to an existing group pursuant to a sue joint powers agreement under section 471.59, new bids and award are not required. ted When an insurer proposes an increase in rates, it shall accompany its proposal am with an aggregate claims record for the appropriate period that explains the or proposed increase. When a contract is resubmitted for bids the aggregate claims record shall accompany the specifications for the contract. Cost comparisons are not required between insured and self - insurance alternatives, but apply to compar- isons between two or more insured proposals or comparisons between two or more KS. self insurance proposals. (For text of subd 2, see M.S.1980) way History: 1981 c 89 s l; ISpl981 c 4 art 1 s 44,46 tore, 16.02 471.617 SELF INSURANCE OF EMPLOYEE HEALTH BENEFITS. Subdivision 1. A statutory or home rule charter city or county or school district, or instrumentality thereof which has more than 100 employees, may by ordinance or resolution self insure for any employee health benefits except long term disability and life benefits. Any self insurance plan shall provide all benefits which are required by law to be provided by group health insurance policies. Self insurance plans shall be certified as provided by section 62E.05. Employee wage 'olitical deductions for the purpose of funding a self insured health benefit plan shall be urchase subject to the licensing provisions of section 60A.23, subdivision 7. group Subd. 2. Any two or more statutory or home rule charter cities or counties -ter into or school districts or instrumentalities thereof which together have more than 100 -ling for employees may jointly self insure for any employee health benefits except long way of es and term disability and life benefits, subject to the same requirements as an individual and 5. self insurer under subdivision 1. The commissioner of insurance is authorized to cured promulgate administrative rules, including emergency rules, pursuant to sections 15.0411 to 15.052, providing standards or guidelines for the operation and adminis - the tration of self insurance pools. bid bid hix Subd. 3. Any self insurance plan covering fewer than 1,000 employees shall rily include excess or stop -loss coverage, provided by a licensed insurance company or bid an insurance company approved pursuant to section 60A.20 or service plan U the corporation. This excess or stop -loss coverage shall cover all eligible claims Y: .� 471.617 RIA, POWERS, DUTIES; SEVERAL POLITIIOL SUBDIVISIONS 7630 not represented by an exclusive representative pursuant to section 179.67, or (b) unless the public employer and the exclusive representative of the employees of an appropriate bargaining unit, certified pursuant to section 179.67, agree to a reduction in the benefits. (c) The aggregate value of benefits of any former employee who has retired shall not, in any event, be reduced pursuant to clause (a) or (b), unless he has individually agreed to the reduction. No such contract need be submitted to bid more frequently than once every 48 months, unless for any reason whatsoever, a 50 percent or greater change in the premium under the policy contract is provided, required or indi- cated. When an insurer proposes an increase in rates, it shall accompany its pro- posal with an aggregate claims record for the appropriate period that explains the proposed increase. When a contract is resubmitted for bids the aggregate 'VI claims record shall accompany the specifications for the contract. ubd. 2. Insurance provisions; disclosure. Every governmental subdivision, A politicSal subdivision, or other body corporate and politic contracting for and pro- viding group insurance protection and benefits as provided in subdivision 1, shall file with the clerk or other comparable officer of the subdivision or other body within five months of the annual anniversary date of the contract, the particulars and details of such insurance plan or program in the same general manner and form as that required by the federal government for the disclosure and filing of group insurance information by employers not otherwise exempt. History: 1973 c 338 s 1; 1976 c 155 s 2; 1977 c 343 s 1; 1978 c 595 s 1; 1980 c 528 s 2 471.617 SELF INSURANCE OF EMPLOYEE HEALTH BENEFITS. Subdivision 1. A statutory or home rule charter city or county or school district, or instrumentality thereof which has more than 100 employees, may by ordinance or resolution self insure for any employee health benefits except long term disability and life benefits. Any self insurance plan shall provide all bene- fits which are required by law to be provided by group health insurance policies. Self insurance plans shall be certified as provided by section 62E.05. Employee wage deductions for the purpose of funding a self insured health benefit plan shall be subject to the licensing provisions of section 60A.23, subdivision 7. Solid. 2. Any two or more statutory or home rule charter cities or counties or school districts or instrumentalities thereof which together have more than 100 employees may jointly self insure for any employee health benefits except long term disability and life benefits, subject to the same requirements as an individual self insurer under subdivision 1. The commissioner of insurance is authorized to promulgate administrative rules, providing standards or guidelines for the operation and administration of self insurance pools. Subd. 3. Any self insurance plan covering fewer than 1,000 employees shall include excess or stop -loss coverage, provided by a licensed insurance company or service plan corporation. This excess or stop -loss coverage shall cover all eli- gible claims incurred during the term of the policy or contract, regardless of the time of payment of the claims, or the self insurance plan shall provide for reserving of an appropriate amount of funds to cover the estimated cost of claims incurred, but unpaid, during the term of the policy or contract. These funds shall be in addition to funds reserved to cover the claims paid during the term of the policy or contract. The excess or stop -loss coverage shall be pro- vided at levels in excess of self insured retention which is appropriate, taking into account the number of covered persons in the group. Solid. 4. No statutory or home rule charter city or county or school district or instrumentality thereof, shall adopt a self insured health benefit plan for any