Loading...
HomeMy WebLinkAbout9.a. SKB Trust Agreement Amendment ROSEMOUNTEXECUTIVE SUMMARY CITY COUNCIL City Council Regular Meeting: January 21, 2014 AGENDA ITEM: SKB Trust Agreement Amendment AGENDA SECTION: New Business PREPARED BY: Dwight Johnson, City Administrator AGENDA NO. �. •ATTACHMENTS: Resolution; SKB Trust Fund Minutes; APPROVED BY: Trust Agreement L)AJ RECOMMENDED ACTION: Motion to approve the attached resolution relating to the amendment of the SKB Environmental Trust Agreement BACKGROUND: During 2013 discussions with SKB Environmental regarding the five year extension and expansion of the landfill operation in Rosemount, discussions were also held about the status of the SKB Trust Fund. In 2008, the Trust Fund was capped at$1.5 million with any excess distributed to the City. During the 2013 discussions,it was agreed in principle to liquidate the balance of the Trust Fund with proceeds going to the City for one or more community-wide projects. This action requires approval of SKB Environmental, the SKB Trust Board, and the City. On December 16,2013, the City was informed that the SKB Trust Board had taken the required action. DISCUSSION: Before the SKB Trust Fund can be liquidated, there are accounting, tax and investment actions to be taken. This may require several months. When the proceeds of approximately$1.5 million are received,it is intended that the amount be deposited in the City's Building Capital Improvement Fund account. Ultimately, the proceeds will help develop one or more major community-wide projects such as a new YMCA facility in Rosemount that will provide benefits to Rosemount residents for decades to come. RECOMMENDATION: It is recommended that the City Council approve the attached resolution providing for the amendment to the SKB Environmental Trust Fund Agreement to allow the orderly liquidation of the balance of the Trust Fund to the City for a future major community project. CITY OF ROSEMOUNT DAKOTA COUNTY,MINNESOTA RESOLUTION NO.2000-14- A RESOLUTION APPROVING AMENDMENT TO THE SKB ENVIRONMENTAL TRUST AGREEMENT WHEREAS, the City of Rosemount SKB Environmental Trust Fund ("Trust") was created for the following purposes: (a) To provide for the construction and maintenance of facilities for public recreation; (b) To further community, industrial, governmental and physical planning for the City of Rosemount and all other lawful public purposes of the City; (c) To improve living and working conditions within the City of Rosemount for the general welfare of the citizens of Rosemount; (d) To further public educational opportunities, whether by establishing programs or facilities devoted to educational purposes, or the furnishing of education scholarships; and (e) To provide for the charitable needs of the citizens of Rosemount and the City of Rosemount, within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, and amendments supplementary thereto; and WHEREAS, the Trustees of the Trust have approved an amendment to the Trust Agreement for the Trust entitled FIRST AMENDMENT TO THE CITY OF ROSEMOUNT-SKB ENVIRONMENTAL, INC. RESTATED TRUST AGREEMENT DATED OCTOBER 7, 2008 (the "Amendment"), which amendment provides that distributions from the Trust Fund shall be made to the City of Rosemount; and WHEREAS, the Trust Agreement requires that all amendments to the Trust Agreement be approved by the City of Rosemount; and WHEREAS, the City Council has determined that the proposed amendment is in the best interests of the public. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Rosemount,Minnesota,as follows: 1. The amendment to the Trust Agreement is hereby approved. 2. The Mayor and City Clerk are authorized and directed to execute the amendment to the 1 436799v1 RS220-36 Trust Agreement indicating the approval of the City Council of the City of Rosemount. ADOPTED by the City Council of the City of Rosemount, Minnesota, this day of January,2014. William H. Droste,Mayor ATTEST: Amy Domeier, City Clerk 2 436799v1 RS220-36 CITY OF ROSEMOUNT—SKB ENVIRONMENTAL TRUST FUND Trust Board Meeting 12-16-2013 Present: Heather Nosan, Bill Olson, Bruno DiNella,John Domke, Don Chapdelaine. Matt Kearney attended the Treasurer's report portion of the meeting by phone conference. Minutes: Domke moved; Chapdelaine seconded motion to approve the minutes of the September 18, 2013 meeting,. Motion passed. Treasurer's Report: Domke moved; Nosan seconded motion approving the Treasurer's report (which showed a fund balance of$1,815,402.86 as of November 30. 2013) and directed Matt Kearney to close the Heartland and Inter Bank accounts and transfer funds to Rosemount State Bank and Sterling State bank using authorized Board members signatures to expedite the transfers if necessary. Motion passed. Olson moved; DiNella seconded motion to approve the following grant amounts: RHS Girls Hockey Blue Line Club $1000.00 Salvation Army 933.00 Motion passed. Chapdelaine moved; Olson seconded motion to retain the services of Larsen. Larsen to provide accounting services for the year 2014. Motion passed. Olson moved; Nosan seconded motion to retain the services of Larsen, Larsen to file all necessary reports to the State and Federal Governments including the 990 report for the CITY OF ROSEMOUNT– SKB ENVIRONMENTAL TRUST FUND for the year 2013. Motion passed. Chapdelaine moved; Domke seconded motion to approve $85.00 payment to Larsen, Larsen for 3`d Quarter 2013 Financial Statement. Motion passed. Olson moved; Domke seconded motion to approve payment of$78.00 to the Rosemount US Post office for P 0 Box rental for 2014. motion passed Whereas the Trust Fund agreement with the City of Rosemount requires that as of 2011 all funds in excess of($1,525,000 on December 31" 2013 by January 315` 2013 be paid to the City of Rosemount; Olson moved; Domke seconded motion that the Treasurer be authorized to make payment to the City of Rosemount in the amount equal to any excess of the fund values over One Million Five Hundred Twenty five Thousand Dollars ($1,525,000) on December 315t 2013 by January 31, 2013. Motion passed. . Nosan moved; Olson seconded motion approving the First Amendment to the City of Rosemount—SKB Environmental Inc. Restated Trust Agreement, Dated October 7`", 2008. (see attached Resolution, First Amendment and Trust Fund agreement of October 2008). Motion passed unanimously. Domke moved; DiNella seconded motion to reconvene the meeting to January 13th 2014 at Gopher Resources at 4:30 PM. Motion passed. Respectfully submitted Bill Olson, Secretary CITY OF ROSEMOUNT—SKB ENVIRONMENTAL TRUST FUND This Restated Trust Agreement made this T'' day of October, 2008, by and between SKB ENVIRONMENTAL, INC., a corporation organized under the laws of the State of Minnesota (hereinafter referred to as "Donor"), and City of Rosemount (hereinafter collectively referred to as "Trustees"). 1. Purpose of Trust. This trust is created and shall be operated exclusively for the benefit of the citizens of Rosemount and the City of Rosemount,including, but not limited to, the following purposes: (a) To provide for the construction and maintenance of facilities for public recreation; (b) To further community,industrial,governmental and physical planning for the City of Rosemount and all other lawful public purposes of the City; (c) To improve living and working conditions within the City of Rosemount for the general welfare of the citizens of Rosemount; (d) To further public educational opportunities,whether by establishing programs or facilities devoted to educational purposes, or the furnishing of educational scholarships; and (e) To provide for the charitable needs of the citizens of Rosemount and the City of Rosemount, within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, and amendments supplementary thereto. This trust is formed for and shall be operated exclusively for such purposes and in such a manner as shall make this trust tax exempt and the donations to it deductible from taxable income to the extent allowed by the provisions of the Internal Revenue Code of 1986 and such other applicable legislation and regulations as they now exist or as they may be amended. No part of the trust fund shall insure to the benefit of any private shareholder or individual, and no part of the activities of this trust shall consist of carrying on propaganda, or otherwise attempting, to influence legislation, or of participating in, or intervening in (including the publication or distribution of statements), any political campaign on behalf of any candidate for public office. Notwithstanding any other provisions, this trust shall not conduct or carry on any activities not permitted to be conducted or carried on by any organization which is tax exempt or by an organization to which donations are deductible from taxable income to the extent allowed by the provisions of the Internal Revenue Code and other applicable legislation and regulations as they now exist or may hereafter be amended. 2. Name of Trust. The name of this trust shall be the City of Rosemount - SKI3 Environmental Trust Fund, and so far as practicable, the Trustees shall conduct the activities of the trust in that name, 1 3. Trust Fund. The Trustees shall accept only donations made in cash from the Donor pursuant to the terms and provisions of that certain Interim Use Permit dated November 10, 1992 (originally issued by the City of Rosemount to USPCI, Inc.), as amended from time to time. 1111 donations so received, together with the income derived therefrom, herein referred to as the trust fund, shall be held,managed,administered and paid out by the Trustees pursuant to the terms of this Trust Agreement. 4. Use of the Trust. The Trustees shall apply the trust fund, at such times, in such manner,and in such amounts as they may determine, to the uses and purposes set forth in paragraph 1, or they may make distributions to the City of Rosemount or to other charitable organizations to be used within the City of Rosemount, for the uses and purposes set forth in paragraph 1. For this purpose, the term "charitable organizations" shall mean a corporation, trust or community chest, fund or foundation, created or organized in the United States or under the law of the United States or any state, organized and operated exclusively for charitable and educational purposes, no part of the net earnings of which insures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office. Subject to the foregoing limitations: (a) During calendar year 2009, the'Irustees shall distribute trust funds in an amount equal to fifty percent (50%) of the donations received from the Donor during 2008 to the City of Rosemount to be used by the City of Rosemount for any lawful public purpose, which trust funds shall be distributed no later than January 31, 2009. Total distributions from the Trust during 2009 shall not exceed One Hundred Thousand Dollars ($100,000), excluding the amount distributed to the City; (b) During calendar year 2010, total distributions from the Trust shall not exceed Eighty Thousand Dollars ($80,000). Any part of such distributions may be, but is not required to be, made to the City; (c) Trustees will endeavor to so manage the Trust assets as to maintain a Trust value, in assets invested as the Board deems prudent and meets the objective of the Fund, of at least One Million Five Hundred Thousand Dollars ($1,500,000) as of December 31, 2010, and at all times thereafter. Each year, commencing on Decemb er 31, 2010, the Trustees will determine the value of the Trust assets as of December 31" of that year. (cl) Distributions for each calendar year commencing in 2011 and thereafter shall be made as follows: (i) If the value of the Trust assets at any time is equal to or less than One Million Five Hundred Thousand Dollars ($1,500,000), no distributions will be made until the value increases to such amount. (ii) If the value of the Trust assets exceed One Million Five Hundred Thousand Dollars ($1,500,000), the Trustees shall make distributions as follows: 2 • Up to Sixty-Two Thousand Dollars ($62,000) may be distributed during the calendar year in accordance with this instrument to parties or entities other than the City. • Any distribution in excess of Sixty-Two Thousand Dollars ($62,000) in any calendar year shall be made to the City. An amount equal to any excess of the fund value over One Million Five Hundred Twenty-Five Thousand Dollars ($1,525,000) on any December 31' shall be paid to the City by the following January 31". In no event shall the Trustees be required after January 31, 2009, to distribute sums that will reduce the value of the Trust assets to an amount less than One Million Five Hundred Thousand Dollars ($1,500,000). Any other provisions of this Trust Agreement notwithstanding, the Trustees shall distribute the trust income for each taxable year at such time and in such manner as not to become subject to the tax on undistributed income imposed by Section 4942 of the Internal Revenue Code of 1986, or corresponding provisions of any subsequent federal tax laws. 5, Action of Trustees, The Trustees shall meet at least three (3) times during each calendar year at such times and places as they may from time to time designate. Thirty (30) days written notice of all meetings of the Trustees shall be given to each Trustee, except where the meeting is an adjourned meeting and the date, time and place of the meeting are decided at the time of adjournment. Written notice shall contain the time and place of the meeting and shall be signed by at least two (2) trustees. Three (3) Trustees must be present at a duly noticed meeting to constitute a quorum for the transaction of trust business. All actions of the Trustees shall be taken by resolution at a duly noticed meeting or by a written record without a meeting with the unanimous consent of all Trustees. The Trustees shall appoint from among themselves a secretary,who shall keep a record of all actions of the Trustees. All actions of the Trustees, including, but not limited to distribution of income, shall require the affirmative vote of a majority of the Trustees then in office. Any instrument required to be executed by this trust shall be valid if executed in the name of this trust by three (3) of the Trustees. A copy of any resolution or action taken by the Trustees, certified by any three (3) of the Trustees, may be relied upon by any person dealing with this trust. No person shall be required to see to the application of any money, securities or other property paid or delivered to the Trustees, or to inquire into any action, decision or authority of the Trustees. 6, Trustees' Powers. In the administration of this trust and of the trust fund, the Trustees shall have all powers and authority necessary or available to carry out the purposes of this trust and,without limited the generality of the foregoing, shall have the following powers and authority, all subject, however, to the condition that no power or authority shall be exercised by the Trustees in any manner or for any purpose which may not be exercised by an organization which is tax exempt or by an organization to which donations are deductible from 3 { taxable income to the extent allowed by the provisions of the Internal Revenue Code and other applicable legislation and regulations as they now exist or may hereafter be amended: (a) To receive the income, profits,rents and proceeds of the trust fund; (b) To purchase, subscribe for, retain, invest and reinvest in securities or other property wherever situated, and whether or not productive or of a wasting nature, and without any requirement for diversification as to kind or amount. The words "securities or other property" as used in this agreement shall be deemed to include real or personal property, corporate shares, common or preferred, or any other interest in any corporation, association,investment trust or investment company, bonds, notes, debentures or other evidences of indebtedness or ownership, secured or unsecured, even though the same may not be legal investments for a trustee under the applicable laws; but securities and other property shall not be deemed to include shares or indebtedness of the Donor unless the same is donated to this trust; (c) To sell for cash or on credit, convert,redeem, exchange for other securities or other property, or otherwise dispose of any securities or other property at any time held by them; (d) To alter, repair, improve, erect buildings upon, demolish, manage, lpartition, mortgage, lease exchange, grant options to lease or to buy, sell or dispose , - g , b , l 5, , 1 of, at public or private sale, and upon such conditions and such terms as to cash and credit as they may deem advisable,real property; (e) To pay all administration expenses of this trust and any taxes imposed upon it, and to settle, compromise or submit to arbitration, any claims,-mortgages, debts or damages, due or owing to or from this trust, to commence or defend suits or legal proceedings, and to represent this trust in all suits or legal proceedings; (f) To exercise any conversion privilege or subscription right available in connection with any securities or other property; to consent to the reorganization, consolidation, merger or readjustment of the finances of any corporation, company or association or to the sale, mortgage, pledge or lease of the property of any corporation, company or association any of the securities of which may at any time be held by them and to do any act, including the exercise of options, the making of agreements or subscriptions, and the payment of expenses, assessments or subscriptions which may be deemed necessary or advisable, and to hold and retain any securities or other property which they may so acquire; (g) To vote personally, or by general or limited proxy, any shares of stock, and similarly to exercise personally, or by general or by limited power of attorney, any right appurtenant to any securities or other property; (h) To borrow money in such amounts and upon such terms and conditions as shall be deemed advisable or proper to carry out the purpose of this trust and to pledge any securities or other property for the repayment of any such loan; (i) To hold part or all of the trust fund uninvested; (j) To employ suitable accountants, agents, counsel and custodians and to pay their reasonable expenses and compensation; (k) To register any securities held by them in their own name, or, to the extent permitted by law, in the name of a nominee with or without the addition of words indicating that such securities are held in a fiduciary capacity and to hold any securities unregistered or in bearer form; (1) To make, execute and deliver all instruments necessary or proper for the accomplishment of the purpose of this trust or of any of the foregoing powers,including deeds, bills of sale, transfers, leases, mortgages, security agreements,assignments, conveyances, contracts, purchase agreements,waivers,releases and settlements; (m) To exercise any and all powers granted to Trustees under Minnesota Statutes §501B.81, as it exists at the date of execution of this Restated Trust Agreement; and (n) Any other provisions of this agreement notwithstanding, the Trustees shall not engage in any act of self-dealing as defined in Section 4941(d) of the Internal Revenue Code of 1986, or corresponding provisions of any subsequent federal tax laws; nor retain any excess business holdings as defined in Section 4943(c) of the Internal Revenue Code of 1986, or corresponding provisions of any subsequent federal tax laws; nor make any investments in such manner as to incur tax liability under Section 4944 of the Internal Revenue Code of 1986, or corresponding provisions of any subsequent federal tax laws; nor make any taxable expenditures as defined in Section 4945(d) of the Internal Revenue Code of 1986, or corresponding provisions of any subsequent federal tax laws. 7. Trustees Designation and Succession. The trust shall be managed and administered by five (5) Trustees. Class I Trustees,shall be nominated and appointed by the Mayor of the City of Rosemount,with the approval of the City Council of Rosemount at the first City Council meeting in January of each year. Class I Trustees shall consist of three (3) Trustees who are residents of the City of Rosemount, selected for their knowledge of the needs of the Citizens of Rosemount and the City of Rosemount. No more than one Class I Trustee may be either a member of the Rosemount City Council or an employee of the City of Rosemount. Class I Trustees shall serve three (3) year terms and may not serve for more than two (2) consecutive three (3) year terms. Upon the initial appointment and designation of Class I Trustees, the Mayor shall designate and stagger the terms of the initial Trustees such that in January of each year a Trustee must be designated and appointed by the Mayor of the City of Rosemount, with the approval of the City Council of Rosemount. Class II Trustees, consisting of two (2) Trustees, shall be designated and appointed by the Donor. Class I1 Trustees shall serve at the pleasure of the Donor, Any Trustee may resign his office at any time without leave of Court by written notice to all Trustees then in office. The resignation shall be effective as of the time set forth in said notice of resignation. Vacancies existing in the office of Class I Trustees, for whatevea cause, 5 shall be filled by appointment by the Mayor of the City of Rosemount, subject to approval by the City Council of Rosemount. Vacancies existing in the office of Class II Trustees, for whatever cause, shall be filled by the Donor. The Trustees may act notwithstanding the existence of any vacancies so long as there shall continue to be at least three (3)Trustees in office, The appointment of Trustees and successor Trustees shall be made by an instrument in writing. In the case of Class I Trustees, the writing shall contain a certified copy of the resolution of the City Council of Rosemount appointing the Trustee or successor Trustee. In the case of Class II Trustees, the writing shall be signed by an executive officer of the Donor !� and appoint the Trustee or successor Trustee. Trustees shall assume office imrnediately upon their appointment, unless the notice of appointment provides otherwise. Every successor Trustee shall have the same powers and duties as those conferred upon the Trustees named in this Trust Agreement. 8. Bond and Compensation. No Trustee shall be required to furnish any bond or surety. Each Trustee shall serve without compensation for services, but all expenses of this trust or of any Trustee shall be paid by the Trustees from the trust fund. 9. Accounting by Trustees, The Trustees shall render accounts of their transactions to the Donor and the City of Rosemount at least annually, and the Donor and the City of Rosemount shall approve such accounts by an instrument in writing delivered to the Trustees. In the absence of the filing in writing with the Trustees by the Donor or the City of Rosemount of exceptions or objections to any such account within sixty (60) clays, the Donor and the City of Rosemount shall be deemed to have approved such account; and in such case or upon the written approval of the Donor and the City of Rosemount of any such account, the Trustees shall be released with respect to all matters and things set forth in such account as though such account had been settled by the decree of a court of competent jurisdiction. In the event either the Donor or the City of Rosemount do not approve such account, both the Donor and the City of Rosemount shall have such rights as are granted by law to the beneficiaries and Trustees of the trust to require an accounting. No persons other than the Donor and the City of Rosemount may require an accounting or bring any action against the"Trustees with respect to this trust. The Trustees may at any time initiate legal action or proceedings for the settlement of their accounts and, except as otherwise required by law, the only necessary parties defendant to such action or proceeding shall be the Donor and the City of Rosemount. 10, Liability of Trustees, No Trustee shall be answerable for loss in investments made in good faith. No Trustee shall be liable for the acts or omissions of any other Trustee, or of any accountant, agent, counsel or custodian selected with reasonable care. Each Trustee shall be fully protected in acting upon any instrument, certificate or paper, believed by him to be genuine and to be signed or presented by the proper person or persons, and no Trustee shall be under any duty to make any investigation or inquiry as to any statement contained in any such writing but may accept the same as conclusive evidence of the truth and accuracy of the statements. 11. Amendment. This'frost Agreement may be amended or modified from time to time by the unanimous consent of the Trustees, together with the approval of the City of Rosemount and the Donor, whenever necessary or advisable for the more convenient or 6 efficient administration of this trust or to enable the Trustees to carry out the purpose of this trust more effectively, but no such amendment or modification shall alter the intention of the Donor that this trust be operated exclusively for the purposes set forth in Section 1 hereof, and in a manner which shall make this trust tax exempt and the donations to it deductible from taxable income to the extent allowed by the provisions of the Internal Revenue Cock of 1986 and other applicable legislation and regulations as they now exist or as they may be amended. Every amendment or modification of this agreement shall be made in writing, and shall be signed by the City of Rosemount, by two (2) officers of the Donor pursuant to authority of its Board of Directors, and by all Trustees, and shall be delivered to each of the Trustees then in office. { 12. Irrevocability and Termination. This trust shall be irrevocable, but may be terminated at any time by unanimous action of the Trustees, with the approval of the City of Rosemount and the Donor. Upon any such termination, the Trustees shall promptly distribute the entire trust fund to qualified recipients under the terms of this trust. 13. Sites. This Agreement is executed and delivered in the State of Minnesota, the situs of the trust shall be in the State of Minnesota,and all terms and provisions of this trust shall be governed by the laws of the State of Minnesota. 14. Acceptance of Trust. The Trustees accept this trust, and hold, manage and administer the trust fund in accordance with the terms of this agreement. IN WITNESS WHEREOF, this agreement has been executed by SKB Environmental, Inc. and by each of the named Trustees. SKB ENVIRONMENTAL, INC. �►GERALYN M. NEELEY Q q NOTARY r"UaUC•MINNESOTA B A /1 /_ My CoTiriss�an&Dices Jan.31,2010. a ` 1 7 /31 /20 , 0 7 i t IS { CITY OF ROSEMOUNT-SKB ' "A"'''""'''''''`'''" ENVIRONMENTAL TRUST FUND ---'- 0A) '*' JAMES G.THO�AlY1ES s • .` "' NOTARYPU3UC-1?NNESdTA MIYCOMMLSSIO1EXPIRES1.31-20101 / f� 1 ^-31 "LOI ° 13 . 5' T istee I w � JAMES 0.ThOMMES / a -- tf'aE'? NOTARY P1/8i1G•Ai�tdtJESOTA /�A k t _y x Q t 4� l` 2 ION M mulaOM QPIREi i•31-2010 B�. J04, \, _ Ati arli r I r'.t -- r' Trustee 1 JAME SG.TNOMPriFS tr, IVOTARYPUBLiC•t.1�TNESOTA `'j� i ...' MY COMMISS1011 EXPIRES 131,2010 i By � ,'f t"3 t ^1'"`v „�,, ,,, ��t Trustee ti J7 i �'!'�iE„. JAME$C;.?HOMMES 'r;r`�`� [f�+ /C �. -C�-GI G f_ 1, ,(-----......„)JYrY' NOTARYPU6IJC-hlSN'ESOTA I3y' r7-. t..---LP 0 INCOMMISSONOPIRES141-2010 Trustee d ✓cA.-- - JAMES G.THOMME3 By f • •, �, _�1,11 J_ I uJ NOTARYPUBUC$1lNNESOTA Trustee 1 "3 MY COhth't6610N EXPIRES 1,31-2010 ' s [NOTARY BLOCKS] i i 1 I l i 1 i 8 i