11-13-2018 Council Meeting Packet

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539895v2 JAE LN140-118 7 3.02. Approving Legal Opinion. The City Administrator is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, and cause the opinion to be printed on or accompany each Bond. Section 4. Payment; Security; Funds; Pledges; and Covenants. 4.01. Debt Service Fund. The Bonds will be payable from the General Obligation Bonds, Series 2018A Debt Service Fund (the “Debt Service Fund”) hereby created. The Debt Service Fund shall be administered by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The City will maintain the following accounts in the Debt Service Fund: the “Street Reconstruction Account” and the “Utility Improvements Account.” Amounts in the Street Reconstruction Account are irrevocably pledged to the Street Reconstruction Bonds and amounts in the Utility Improvements Account are irrevocably pledged to the Utility Revenue Bonds. (a) Street Reconstruction Account. Ad valorem taxes (the “Taxes”) herein levied for the Street Reconstruction are hereby pledged to the Street Reconstruction Account of the Debt Service Fund. There is appropriated to the Street Reconstruction Account a pro rata portion of (i) capitalized interest financed from Bond proceeds, if any; and (ii) amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof. (b) Utility Improvements Account. The City will continue to maintain and operate its Water Fund and Sanitary Sewer Fund to which will be credited all gross revenues of the water system and sanitary sewer system, respectively, and out of which will be paid all normal and reasonable expenses of current operations of such systems. Any balances therein are deemed net revenues (the “Net Revenues”) and will be transferred, from time to time, to the Utility Improvements Account of the Debt Service Fund, which Utility Improvements Account will be used only to pay principal of and interest on the Utility Revenue Bonds and any other bonds similarly authorized. There will always be retained in the Utility Improvements Account a sufficient amount to pay principal of and interest on all the Utility Revenue Bonds, and the Finance Director must report any current or anticipated deficiency in the Utility Improvements Account to the City Council. There is appropriated to the Utility Improvements Account a pro rata portion of (i) capitalized interest financed with the proceeds of the Bonds, if any; and (ii) amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof. 4.02. Construction Fund. The City hereby creates the General Obligation Bonds, Series 2018A Project Fund (the “Construction Fund”). The City will maintain the following accounts in the Construction Fund: the “Street Reconstruction Account” and the “Utility Improvements Account.” Amounts in the Street Reconstruction Account are irrevocably pledged to the Street Reconstruction Bonds, and amounts in the Utility Improvements Account are irrevocably pledged to the Utility Revenue Bonds. (a) Street Reconstruction Account. Proceeds of the Street Reconstruction Bonds, less the appropriations made in Section 4.01(a) hereof, together with any other funds appropriated for the Street Reconstruction and Taxes collected during the construction of the Street Reconstruction, will be deposited in the Street Reconstruction Account of the Construction Fund to be used solely to defray expenses of the Street Reconstruction. When the Street Reconstruction is completed and the cost thereof paid, the Street Reconstruction Account of the Construction Fund is to be closed and subsequent collections of Taxes for the Street Reconstruction are to be deposited in the Street Reconstruction Account of the Debt Service Fund.