05/10/2010 Council Packet - Laserfiche WebLink

Home Search

SECURITY AND FINANCING The Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties to repay the Improvement Portion of the Bonds and net revenues of the City's water utility (the "Net Revenues ") to repay the Revenue Portion of the Bonds. Pursuant to Minnesota Statutes, Chapter 444 and the resolution awarding the Revenue Portion of the Bonds, the City will covenant to maintain user rates sufficient to collect revenues adequate to support the operation of the water utility and to pay debt service on the Revenue Portion of the Bonds. The City is required to annually review its budget for the utilities to determine if current rates and charges are sufficient and to adjust such rates and charges as necessary. Special assessments and Net Revenues previously collected and pledged to the Series 2004A Bonds will be used to make the February 1, 2011 interest payment. Thereafter, each year's collections of special assessments and net revenues, if collected in full, will be sufficient to pay 105% of the interest due on August 1 of the collection year and the principal and interest due February 1 of the following year. The City does not anticipate the need to levy taxes for repayment of the Bonds. FUTURE FINANCING The City does not anticipate any additional borrowing within the next 90 days. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. LEGALITY The Bonds are subject to approval as to certain matters by Kennedy & Graven, Chartered, of Minneapolis, Minnesota as Bond Counsel. Kennedy & Graven also serves as City Attorney. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify, any of the financial or statistical statements, or data contained in this Official Statement and will express no opinion with respect thereto. A legal opinion in substantially the form set out as Appendix I to this Official Statement will be delivered at closing. TAX EXEMPTION in the opinion of Bond Counsel, under existing statutes, regulations, rulings and decisions, interest on the Bonds is not includable in the gross income of the owners thereof for purposes of federal income taxation and is not includable in net taxable income of individuals, estates or trusts for purposes of State of Minnesota income taxation, but is subject to State of Minnesota franchise taxes measured by income that are imposed upon corporations and financial institutions. 5