02-28-2007 Council Agenda - Laserfiche WebLink

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SECURITY The Bonds are general obligations of the City for which its full faith, credit and taxing powers are pledged without limitation as to rate or amount. It is the intent of the City to pay the entire amount of principal and interest from revenues of the City's Permanent Improvement Revolving Fund established under Minnesota Statutes, Section 429.091. The City anticipates that all of the debt service will be paid by special assessments levied against properties benefitted by improvements financed by the Bonds. All revenues from the special assessments shall be paid into the PIR Fund which will then be used to pay debt service as needed. Receipt of special assessments and collection of ad valorem taxes, if necessary, will be sufficient to provide not less than 105% of principal and interest on the Bonds as required by Minnesota law. RATING General obligation debt of the City is currently rated "A2" by Moody's Investors Service. The City has requested a rating on this issue from Moody's Investors Service, and bidders will be notified as to the assigned rating prior to the sale. Such a rating, if and when received, will reflect only the view of the rating agency and any explanation of the significance of such rating may only be obtained from Moody's Investors Service. There is no assurance that such rating, if and when received, will continue for any period of time or that it will not be revised or withdrawn. Any revision or withdrawal of the rating may have an effect on the market price of the Bonds. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2 -12 (the "Rule "), pursuant to the Award Resolution and a Continuing Disclosure Undertaking, the City has and will covenant (the "Undertaking ") for the benefit of holders of the Bonds to provide certain financial information and operating data relating to the City to any state information depository annually or upon request, and to provide notices of the occurrence of certain events enumerated in the Rule to certain information repositories or the Municipal Securities Rulemaking Board and to any state information depository. The specific nature of the Undertaking, as well as the information to be contained in the annual report or the notices of material events is set forth in the Continuing Disclosure Undertaking in substantially the form attached hereto as Appendix D. The City has never failed to comply in all material respects with any previous undertakings under the Rule to provide annual reports or notices of material events A failure by the City to comply with the Undertaking will not constitute an event of default on the Bonds (although holders will have an enforceable right to specific performance). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. LEGAL OPINION An opinion as to the validity of the Bonds and the exemption from taxation of the interest thereon will be furnished by Briggs and Morgan, Professional Association, St. Paul, Minnesota, bond counsel to the City, and will accompany the Bonds. The legal opinion will state that the Bonds are valid and binding general obligations of the City enforceable in accordance with their terms, except to the extent to which enforceability may be limited by Minnesota or United States laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally. 3