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HomeMy WebLinkAbout2016-116 Council Resolution\ RESOLUTION NO. 16-116 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF GENERAL OBLIGATION WATER UTILITY REVENUE BONDS, SERIES 2016A, IN THE AGGREGATE PROPOSED PRINCIPAL AMOUNT OF $1,420,000 BE IT RESOLVED By the City Council of the City of Lino Lakes, Anoka County, Minnesota (the "City") as follows: 1. Authorization. (a) The City engineer has recommended the construction of various improvements to the City's water system (the "Project"), pursuant to Minnesota Statutes, Chapters 444 and 475, as amended (collectively, the "Act"). (b) It is necessary and expedient to the sound financial management of the affairs of the City to issue General Obligation Water Utility Revenue Bonds, Series 2016A (the "Bonds"), in the proposed aggregate principal amount of $1,420,000, pursuant to Act, to provide financing for the Project. (c) The City is authorized by Section 475.60, subdivision 2(9) of the Act to negotiate the sale of the Bonds, it being determined that the City has retained an independent financial advisor in connection with such sale. The actions of the City staff and the City's municipal advisor in negotiating the sale of the Bonds are ratified and confirmed in all respects. 2. Sale of Bonds. To provide financing for the Project under the Act, the City will therefore issue and sell the Bonds in the proposed aggregate principal amount of $1,420,000, which amount is subject to adjustment in accordance with the official terms of Proposal attached hereto as EXHIBIT A (the "Terms of Proposal"). The Bonds will be issued, sold, and delivered in accordance with the Terms of Proposal. 3. Authority of Municipal Advisor. Springsted Incorporated is authorized and directed to negotiate the Bonds on behalf of the City in accordance with the Terms of Proposal. The City Council will meet at 6:30 P.M. on Monday, October 24, 2016, to consider proposals on the Bonds and take any other appropriate action with respect to the Bonds. 4. Authority of Bond Counsel. The law firm of Kennedy & Graven, Chartered, as bond counsel for the City, is authorized to act as bond counsel and to assist in the preparation and review of necessary documents, certificates and instruments relating to the Bonds. The officers, employees and agents of the City are hereby authorized to assist Kennedy & Graven, Chartered in the preparation of such documents, certificates, and instruments. 5. Covenants. In the resolution awarding the sale of the Bonds the City Council will set forth the covenants and undertakings required by the Act. 6. Official Statement. In connection with the sale of the Bonds, the officers or employees of the City are authorized and directed to cooperate with Springsted Incorporated and participate in the 486695v1 JAE LN140-117 2 preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. (The remainder of this page is intentionally left blank.) 3 486695v1 JAE LN140-117 Adopted by the Council of the City of Lino Lakes this 266 day of Sept , 2016. The motion for the adoption of the foregoing resolution was introduced by Council Member Kinstprman and was duly seconded by Council Member Manthey and upon vote being taken thereon, the following voted in favor thereof: Kusterman, Manthey, Maher, Rafferty, Reinert The following voted against same: no Jeff Reinert, ATTEST: u ian e Bartell, City 4 lerk 4 486437v1 JAE LN140-117 CITY COUNCIL �,.,.. AGENDA ITEM 2A STAFF ORIGINATOR: Sarah Cotton MEETING DATE: September 26, 2016 TOPIC: Recommendations for Issuance of Bonds VOTE REQUIRED: 3/5 BACKGROUND At the August 8, 2016, City Council meeting, the City Council approved the plans and specifications and authorized the advertisement for bids related to the 2016 Aqua Lane to Black Duck Drive Trunk Water Main Project. The project will create a looped water system that will provide residents with high quality water supply and adequate pressure for fire demand. The project includes trunk water main improvements along Aqua Lane, through the Anoka County Regional Park, along Sand Piper Drive and West Shadow Lake Drive, and connecting the existing water main on the north end of Black Duck Drive. In order to finance this project the City will need to issue General Obligation Water Utility Revenue bonds. Our financial advisor, Springsted, Inc. has issued their recommendation for the issuance of $1,420,000 General Obligation Water Utility Revenue Bonds, Series 2016A for consideration by the City Council. Resolution No. 16- 116 would provide for the issuance and sale of this issue. If approved, bids would be received on October 24, 2016, with consideration for award of sale by the City Council at its meeting the same day. The Series 2016A issue will be repaid over a 10 year period utilizing revenues from the City's Area and Unit Trunk fund. Minnesota Statutes Section 475.67, subdivision 3 authorizes the issuance and sale of refunding obligations during the six month period prior to the date on which the obligations to be refunded may be called for redemption. Our financial advisor, Springsted, Inc. has issued their recommendation for the issuance of $1,980,000 Taxable G.O. Refunding Improvement Bonds, Series 2016B and $1,600,000 G.O. Tax Abatement Refunding Bonds, Series 2016C. These issues would refinance the outstanding portion of the Taxable G.O. Improvement Bonds, Series 2005A and the G.O. Tax Abatement Bonds, Series 2006C, respectively. With the assistance of Springsted, Inc., staff continually monitors the market for opportunities to refinance existing debt issues at lower interest rates, thereby saving the city money on financing costs. By refinancing the outstanding balance of our Taxable G.O. Improvement Bonds 2005A, it is estimated that the city can achieve net present value savings of approximately $130,682 over the term of the issue, a 6.20% savings. In addition, by refinancing the outstanding balance of our G.O. Tax Abatement Bonds, Series 2006C, it is estimated that the city can achieve net present value savings of approximately $133,833 over the term of the issue, a 7.73% savings. If approved, the bids for the refunding issues would be received on October 24, 2016, with consideration for award of sale by the City Council at its meeting the same day. The Series 2016B issue has been structured with a term matching that of the 2005A bonds and would be repaid through previously adopted special assessments, TIF, and other miscellaneous revenues. The Series 2016C issue has been structured with a term matching that of the 2006C bonds and would be repaid from tax abatement revenues. RECOMMENDATION Staff recommendation is for the City Council to approve Resolution No. 16-116, Resolution No. 16-125, and Resolution No. 16-126 providing for the issuance and sale of bonds. ATTACHMENTS Springsted's Recommendations for the Issuance of Bonds Resolution No. 16-116 Resolution No. 16-125 Resolution No. 16-126 City of Lino Lakes, Minnesota Recommendations for Issuance of Bonds $1,420,000 General Obligation Water Utility Revenue Bonds, Series 2016A $1,980,000 Taxable General Obligation Refunding Improvement Bonds, Series 2016B $1,600,000 General Obligation Tax Abatement Refunding Bonds, Series 2016C The Council has under consideration the issuance of three series of bonds: (i) the 2016A Bonds will finance water system improvements within the City; (ii) the 2016B Bonds is a current refunding of the Series 2005A Bonds; and (iii) the 2016C Bonds is a current refunding of the Series 2006C Bonds. This document provides information relative to the proposed issuance. KEY EVENTS: The following summary schedule includes the timing of some of the key events that will occur relative to the bond issuance. September 26, 2016 Week of October 10, 2016 October 24, 2016, 11:00 a.m. October 24, 2016, 6:00 p.m. November 23, 2016 February 1, 2017 Council sets sale date and terms Rating conference is conducted Competitive proposals are received Council considers award of the Bonds Proceeds are received Redeem the 2005A and 2006C Bonds RATING: An application will be made to S&P Global Ratings (S&P) for a rating on the Bonds. The City's general obligation debt is currently rated "AA" by S&P. THE MARKET: Performance of the tax-exempt market is often measured by the Bond Buyer's Index ("BBI") which measures the yield of high grade municipal bonds in the 20th year for general obligation bonds (the BBI 20 Bond Index) and the 30th year for revenue bonds (the BBI 25 Bond Index). The following chart illustrates these two indices over the past five years. BBI 25 -bond (Revenue) and 20 -bond (G.O.) Rates for 5 Years Ending 9/15/2016 N CO VN Sprin 6.0% 5.0% 4.0% 3.0% 2.0% 41, �.y �.ti `b .y �..5 .S �5 Na �a ^b NI* 4) 4) �h ^h 46 4) 46 Kyo ,yo Kyo Kyo Kyo pyo ,zo19 Kyo Kyo ,yo Kyo Kyo Kyo pyo Kyo Kyo Kyo ,yo Kyo Kyo Kyo sted Dates ----BBI 25 Bond —BBI 20 Bond Prepared by Springsted Incorporated 9/15/2016 25 bond: 3.10% 20 bond: 2.96% 6.- V t . \ , • \ /1 1 ,, M 1142 " 1 r sted Dates ----BBI 25 Bond —BBI 20 Bond Prepared by Springsted Incorporated POST ISSUANCE The issuance of the Bonds will result in post -issuance compliance responsibilities. The COMPLIANCE: responsibilities are in two primary areas: i) compliance with federal arbitrage requirements and ii) compliance with secondary disclosure requirements. SUPPLEMENTAL INFORMATION AND BOND RECORD: Note: taxable issues, such as the 2016B Bonds are not subject to the federal arbitrage requirements. Federal arbitrage requirements include a wide range of implications that have been taken into account as your issue has been structured. Post -issuance compliance responsibilities for your tax-exempt issue include both rebate and yield restriction provisions of the IRS Code. In general terms the arbitrage requirements control the earnings on unexpended bond proceeds, including investment earnings, moneys held for debt service payments (which are considered to be proceeds under the IRS regulations), and/or reserves. Under certain circumstances any "excess earnings" will need to be paid to the IRS to maintain the tax-exempt status of the Bonds. Any interest earnings on gross bond proceeds or debt service funds should not be spent until it has been determined based on actual facts that they are not "excess earnings" as defined by the IRS Code. The arbitrage rules provide for spend -down exceptions for proceeds that are spent within either a 6 -month, 18 -month or 24 -month period in accordance with certain spending criteria. Proceeds that qualify for an exception will be exempt from rebate. These exceptions are based on actual expenditures and not based on reasonable expectations; and expenditures, including any investment proceeds, will have to meet the spending criteria to qualify for the exclusion. The current expectations related to the 2016A and 2016C Bonds are as follows: • 2016A Bonds - the City expects to meet the 18 -month spending exception • 2016C Bonds — the City expects to meet the 6 -month spending exception Regardless of whether the issue qualifies for an exemption from the rebate provisions, yield restriction provisions will apply to the debt service fund and any project proceeds unspent after three years and the funds should be monitored on an ongoing basis. Secondary disclosure requirements result from an SEC requirement that underwriters provide ongoing disclosure information to investors. To meet this requirement, any prospective underwriter will require the City to commit to providing the information needed to comply under a continuing disclosure agreement. Springsted and the City have entered into an Agreement for Municipal Advisor Services under which Springsted will provide Arbitrage and continuing disclosure services for the City. Supplementary information will be available to staff including detailed terms and conditions of sale, comprehensive structuring schedules and information to assist in meeting post - issuance compliance responsibilities. Upon completion of the financings, a bond record will be provided that contains pertinent documents and final debt service calculations for the transaction. Springsted Page 2 $1,420,000 General Obligation Water Utility Revenue Bonds, Series 2016A Description of Issue PURPOSE: Proceeds of the 2016A Bonds will be used as to finance the 2016 Aqua Lane to Black Duck Drive Trunk Water Main project. The proposed project will create a looped water system that will provide residents with high quality water supply and adequate pressure for demand. The proposed project includes trunk water main improvements along Aqua Lane, through the Anoka County Regional park, along Sand Piper Drive and West Shadow Lake Drive, and connecting to the existing water main on the north end of Black Duck Drive. AUTHORITY: Statutory Authority: The 2016A Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475. SECURITY AND SOURCE OF PAYMENT: Statutory Requirements: Pursuant to Minnesota Statutes, Chapter 444 and the resolution awarding the 2016A Bonds, the City will covenant to maintain water rates in an amount sufficient to generate revenues to support the operation of the water utility and to pay debt service. The City is required to annually review the budget of the water fund to determine whether current rates and charges are sufficient and to adjust them as necessary. The City currently has three outstanding bond issues for which the net revenues of the water fund are also pledged. The maximum annual calendar year debt service payment, including the 2016A Bonds, is projected to be $360,770. The table below shows the calculation of net revenues available to pay debt service of the City's water fund for the fiscal year ending December 31, 2015. An aggregate debt service schedule showing the City's outstanding debt payable from the City's water fund and projected debt service on the 2016A Bonds is shown on page 10. Water Fund - Net Revenues as of December 31, 2015 Operating Revenues $ 1,014,836 Operating Expenses (1,394,897) Operating Income (380,061) Add: Depreciation 836,772 Interest Earnings 33,166 Net Revenues Available for Debt Service $ 489,877 Projected Max DS on All Water Debt $ 360,770 Remaining Capacity for Annula DS $ 129,107 The 2016A Bonds are a general obligation of the City, secured by its full faith and credit and taxing power. In addition, the City will pledge net revenues of its water fund. Springsted Page 3 STRUCTURING SUMMARY: SCHEDULES ATTACHED: RISKS/SPECIAL CONSIDERATIONS: SALE TERMS AND MARKETING: In consultation with the City, the 2016A Bonds have been structured over a term of ten years with approximately level annual payments of debt service. Schedules attached for the 2016A Bonds include sources and uses, debt service schedule based on the current interest rate environment and an aggregate debt service schedule for the City's existing and projected debt payable from the water fund. The outcome of this financing will rely on the market conditions at the time of the sale. Any projections included herein are estimates based on current market conditions. Variability of Issue Size: A specific provision in the sale terms permits modifications to the issue size and/or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: Bonds maturing on or after February 1, 2026 may be prepaid at a price of par plus accrued interest on or after February 1, 2025. Bank Qualification: The City does not expect to issue more than $10 million in tax-exempt obligations that count against the $10 million limit for this calendar year; therefore, the 2016A Bonds are designated as bank qualified. $1,980,000 Taxable General Obligation Improvement Refunding Bonds, Series 2016B Description of Issue PURPOSE: SERIES 2005A BONDS: Springs Proceeds of the 2016B Bonds will be used to refund the February 1, 2018 through 2021 maturities of the City's Taxable General Obligation Improvement Bonds, Series 2005A, dated November 1, 2005 (the "2005A Bonds"). The aggregate principal amount of the maturities being refunded is $1,935,000. This refunding transaction is being conducted as a current refunding in which the proceeds of the 2016B Bonds will be used within 90 days to redeem the 2005A Bonds and is being done to provide interest cost savings to the City. The Series 2005A Bonds were originally issued to finance various improvement projects related to the Legacy at Woods Edge development within the City. The 2005A Bonds were issued as taxable bonds as in the opinion of bond counsel, the City Charter provision applicable to the Legacy at Woods Edge area did not meet the requirements of Federal Tax Law. Federal regulations permit cities to issue tax exempt bonds secured by special assessments only if the assessment procedures meet certain criteria. One of those criteria is that owners of business and non -business property must be required to pay assessments on an equal basis. The City Charter provision that applies in this area permits owners of certain residential property to "opt out" of being assessed, which does not meet the "equal basis" requirement. Even if there are no residential properties that happen to be affected by the specific improvements financed by the proposed bond issue, the assessment procedure in this area remains questionable without a ruling on this point from the Internal Revenue Service. ed Page 4 �.. AUTHORITY: The 2016B Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475. SECURITY AND SOURCE OF PAYMENT: STRUCTURING SUMMARY: SCHEDULES ATTACHED: RISKS/SPECIAL CONSIDERATIONS: SALE TERMS AND MARKETING: The 2016B Bonds are a general obligation of the City, secured by its full faith and credit and taxing power. In addition, the City will pledge special assessments against benefited properties as previously pledged to the 2005A Bonds. The City will provide the estimated future assessment collections prior to the sale of the 2016B Bonds. The City expects that assessments will be sufficient to pay 105% of the debt service on the 2016B Bonds and does not anticipate the need to levy general ad valorem tax levies. On February 1, 2017, the call date of the 2005A Bonds, the City will (i) make their regularly scheduled principal and interest payment due on the 2005A Bonds in the amount of $470,117.50 with previously collected assessments and (ii) use proceeds to of the 2016B Bonds to redeem the remaining maturities of the 2005A Bonds. Each year's collection of assessments will be used to make the interest payment due on August 1 in the collection year and the principal and interest payment due on February 1 in the following year. In consultation with the City the 2016B Bonds have been structured with a term matching that of the 2005A Bonds to achieve approximately level annual savings. Based on current interest rate estimates, the refunding transaction is projected to result in savings averaging approximately $32,925 per year. This results in future value savings of approximately $135,138 with a net present value benefit to the City of $130,682. These estimates are net of the costs associated with the refunding. Schedules attached for the 2016B Bonds include a refunding summary, debt service schedule given the current interest rate environment, debt service comparison and debt service to call and to maturity. The outcome of this financing will rely on the market conditions at the time of the sale. Any projections included herein are estimates based on current market conditions. Variability of Issue Size: A specific provision in the sale terms permits modifications to the issue size and/or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: Based on the short duration of the 2016B Bonds, and to avoid possible negative pricing impacts, the 2016B Bonds will not be subject to redemption prior to their stated maturities. Bank Qualification: Does not apply to taxable issues. Springsted Page 5 $1,600,000 General Obligation Tax Abatement Refunding Bonds, Series 2016C Description of Issue PURPOSE: Proceeds of the 2016C Bonds will be used to refund the February 1, 2018 through 2023 maturities of the City's General Obligation Tax Abatement Bonds, Series 2006C, dated August 15, 2006 (the "20060 Bonds"). The aggregate principal amount of the maturities being refunded is $1,565,000. This refunding transaction is being conducted as a current refunding in which the proceeds of the 2016C Bonds will be used within 90 days to redeem the 2006C Bonds and is being done to provide interest cost savings to the City. Because the original financing is a joint project between the City and the YMCA, a Minnesota non-profit organization, the 2016C Bonds are a 501(c)(3) qualified private activity bond. A 501(c)(3) is a type of private activity bond that can be issued as tax- exempt and are subject to general rules applicable to all tax-exempt bonds. SERIES 2006C The 2006C Bonds were originally issued to finance a joint project between the City and the BONDS: YMCA of Greater St. Paul ("YMCA"), as per a Development Agreement dated March 13, 2006. The project consisted of the construction of a YMCA facility within the City. The YMCA facility is approximately 50,000 square feet and includes a teen center, gym, indoor pool, cardiovascular/strength training area, aerobic studio, family program space and Kids Stuff. AUTHORITY: The 2016C Bonds are being issued pursuant to Minnesota Statutes, Chapters 469 and 475. SECURITY AND The 2016C Bonds are a general obligation of the City, secured by its full faith and credit SOURCE OF and taxing power. In addition, the City will pledge tax abatement revenues against PAYMENT: identified properties as previously pledged to the 20060 Bonds. On February 1, 2017, the call date of the 2006C Bonds, the City will (i) make their regularly scheduled principal and interest payment due on the 2006C Bonds in the amount of $227,447.50 with previously collected tax abatement revenue and (ii) use proceeds of the 2016C Bonds to redeem the remaining maturities of the 2006C Bonds. Debt service on the 2016C Bonds will be repaid from the City levy portion of tax abatements derived from specified properties within the Tax Abatement District in Legacy at Woods Edge as stated in the Resolution approving the property tax abatements (the "Tax Abatement Parcels") for the Project. Taxes may be abated within the Tax Abatement Parcels for a period of 15 years, commencing in levy year 2007 payable 2008. The City anticipates that the tax abatement revenue will be sufficient to pay 105% of the debt service on the 2016C Bonds and does not anticipate the need to levy general ad valorem tax levies. Each year's collection of tax abatement revenue will be used to make the interest payment due on August 1 in the collection year and the principal and interest payment due on February 1 in the following year. Springsted Page 6 STRUCTURING In consultation with the City, the 20160 Bonds have been structured with a term matching SUMMARY: that of the 2006C Bonds to achieve approximately level annual savings. Based on current interest rate estimates, the refunding transaction is projected to result in savings averaging approximately $22,779 per year. This results in future value savings of approximately $139,673 with a net present value benefit to the City of $133,833. These estimates are net of the costs associated with the refunding. SCHEDULES Schedules attached for the 2016C Bonds include a refunding summary, debt service ATTACHED: schedule given the current interest rate environment, debt service comparison and debt service to call and to maturity. RISKS/SPECIAL The outcome of this financing will rely on the market conditions at the time of the sale. Any CONSIDERATIONS: projections included herein are estimates based on current market conditions. For a qualified 501(c)(3) issue, there is a 2% limit on the amount of bond proceeds that can be used to pay costs of issuance, including underwriter's discount. SALE TERMS AND MARKETING: Variability of Issue Size: A specific provision in the sale terms permits modifications to the issue size and/or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: Optional Redemption: Based on the short duration of the 2016C Bonds, and to avoid possible negative pricing impacts, the 20160 Bonds will not be subject to optional redemption prior to their stated maturities. Extraordinary Redemption: The 20160 Bonds will be subject to extraordinary redemption. Bank Qualification: The City does not expect to issue more than $10 million in tax-exempt obligations that count against the $10 million limit for this calendar year; therefore, the 2016C Bonds are designated as bank qualified. Springsted Page 7 $1,420,000 City of Lino Lakes, Minnesota General Obligation Water Utility Revenue Bonds, Series 2016A Water Utility Revenue Bonds Sources & Uses Dated 11/23/2016 I Delivered 11/23/2016 Sources Of Funds Par Amount of Bonds $1,420,000.00 Total Sources $1,420,000.00 Uses Of Funds Deposit to Project Construction Fund 1,379,880.00 Costs of Issuance 23,365.00 Total Underwriter's Discount (0.850%) 12,070.00 Rounding Amount 4,685.00 Total Uses $1,420,000.00 2016A GO Bonds 9.20.16 1 Water Utility Revenue Bon 1 9/20/2016 1 1120 AM Springsted Page 8 $1,420,000 City of Lino Lakes, Minnesota General Obligation Water Utility Revenue Bonds, Series 2016A Water Utility Revenue Bonds DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I 105% Levy 02/01/2017- - - - - 02/01 /2018 130,000.00 0.900% 22,220.33 152,220.33 159,831.35 02/01/2019 135,000.00 0.950% 17,520.00 152,520.00 160,146.00 02/01/2020 140,000.00 1.050% 16,237.50 156,237.50 164,049.38 02/01/2021 140,000.00 1.150% 14,767.50 154,767.50 162,505.88 02/01/2022 140,000.00 1.250% 13,157.50 153,157.50 160,815.38 02/01/2023 145,000.00 1.350% 11,407.50 156,407.50 164,227.88 02/01/2024 145,000.00 1.450% 9,450.00 154,450.00 162,172.50 02/01/2025 145, 000.00 1.550% 7,347.50 152, 347.50 159, 964.88 02/01/2026 150,000.00 1.650% 5,100.00 155,100.00 162,855.00 02/01/2027 150,000.00 1.750% 2,625.00 152,625.00 160,256.25 Total $1,420,000.00 $119,832.83 $1,539,832.83 $1,616,824.47 SIGNIFICANT DATES Dated 11/23/2016 Delivery Date 11/23/2016 First Coupon Date . . . 8/01/2017 Yield Statistics Bond Year Dollars $8,243.22 Average Life 5.805 Years Average Coupon 1.4537134% Net Interest Cost (NIC) 1.6001368% True Interest Cost (TIC) 1.6043670% Bond Yield for Arbitrage Purposes 1.4492304% All Inclusive Cost (AIC) 1.9098832% IRS Form 8038 Net Interest Cost 1.4537134% Weighted Average Maturity 5.805 Years 2016A GO Bonds 9.20.16 1 Water Utility Revenue Bon 9/20/2016 1 10:20 AM Springsted Page 9 City of Lino Lakes, Minnesota Outstanding Water Revenue Debt Aggregate Debt Service Calendar 2006D GO 2010A GO 2014A GO 2016A GO Year Util R Imp & Bonds Bonds * TOTAL 2016 72,716.44 60,532.50 126,811.13 260,060.06 2017 75,025.13 64,128.75 131,494.13 13,470.27 284,118.27 2018 - 62,396.25 130,685.63 155,439.38 348,521.25 2019 60,663.75 129,617.25 159,401.81 349,682.81 2020 - 69,273.75 128,289.00 163,206.75 360,769.50 2021 - - 131,881.31 161,589.75 293,471.06 2022 129,888.94 159,825.75 289,714.69 2023 - 127,655.06 157,914.75 285,569.81 2024 130,373.25 161,068.69 291,441.94 2025 - 132,759.38 158,784.94 291,544.31 2026 - - 161, 555.63 161, 555.63 2027 158,878.13 158,878.13 $147,741.56 $316,995.00 $1,299,455.06 $1,611,135.83 $3,375,327.46 Debt service is shown at 105%. * Estimate Outstanding Principal 2006D GO Util Rev Bonds - PS 135,000.00 2010A GO In'p & Util Rev Ref Bo 525,000.00 2014A GO Bonds - PS 2,645,000.00 2016A GO Bonds - PS 1,415,000.00 TOTAL 4,720,000.00 Aggregate 9.19/2016 9:11 AM Springsted Page 10 i.► $1,980,000 City of Lino Lakes, Minnesota Taxable General Obligation Improvement Refunding Bonds, Series 2016B Current Refunding of Series 2005A Refunding Summary Dated 11/23/2016 I Delivered 11/23/2016 Sources Of Funds Par Amount of Bonds $1,980,000.00 Total Sources $1,980,000.00 Uses Of Funds Deposit to Current Refunding Fund 1,935,000.00 Costs of Issuance 27,700.00 Total Underwriter's Discount (0.700%) 13,860.00 Rounding Amount 3,440.00 Total Uses $1,980,000.00 ISSUES REFUNDED AND CALL INFORMATION Prior Issue Call Price 100.000% Prior Issue Call Date 2/01/2017 SAVINGS INFORMATION Net Future Value Benefit $135,138.00 Net Resent Value Benefit $130,682.35 Net IN Benefit / $2,107,242.35 IN Refunded Debt Service 6.202% BOND STATISTICS Average Life 2.714 Years Average Coupon 1.4624023% Net Interest Cost (NIC) 1.7203108% True Interest Cost (TIC) 1.7263874% 2016B Ref 2005A TAX (Cum ', SLVGLE PURPOSE 1 9 12 2016 10.43 AM Springsted Page 11 $1,980,000 City of Lino Lakes, Minnesota Taxable General Obligation Improvement Refunding Bonds, Series 2016B Current Refunding of Series 2005A Debt Service Schedule Date Principal Coupon Interest Total P+I 02/01/2017 - - - - 02/01/2018 480,000.00 1.100% 32,474.50 512,474.50 02/01/2019 490,000.00 1.300% 22,035.00 512,035.00 02/01/2020 500,000.00 1.450% 15,665.00 515,665.00 02/01/2021 510, 000.00 1.650% 8,415.00 518,415.00 Total $1,980,000.00 $78,589.50 $2,058,589.50 Yield Statistics Bond Year Dollars $5,374.00 Average Life 2.714 Years Average Coupon 1.4624023% Net Interest Cost (NIC) 1.7203108% True Interest Cost (TIC) 1.7263874% Bond Yield for Arbitrage Purposes 1.4605800% All Inclusive Cost (AIC) 2.2653742% IRS Form 8038 Net Interest Cost 1.4624023% Weighted Average Maturity 2.714 Years 2016B Ref 2005A TAX (Curr I SINGLE PURPOSE 9%12/2016 10,43 .131 Springsted Page 12 ' $1,980,000 City of Lino Lakes, Minnesota Taxable General Obligation Improvement Refunding Bonds, Series 2016B Current Refunding of Series 2005A Debt Service Comparison Date Total P+I Existing D/S Net New D/S Old Net D/S Savings 02/01/2017 02/01/2018 512,474.50 02/01/2019 512,035.00 02/01/2020 515,665.00 02/01/2021 518,415.00 485,117.50 485,117.50 512,474.50 512, 035.00 515, 665.00 518,415.00 485,117.50 543,985.00 546,735.00 547, 530.00 552, 037.50 31, 510.50 34,700.00 31, 865.00 33,622.50 Total $2,058,589.50 $485,117.50 $2,543,707.00 $2,675,405.00 $131,698.00 PV Analysis Summary (Net to Net) Net FV Cashflow Savings 131,698.00 Gross PV Debt Service Savings 127,242.35 Net PV Cashflow Savings @ 1.461%(Bond Yield) 127,242.35 Contingency or Rounding Amount 3,440.00 Net Future Value Benefit $135,138.00 Net Resent Value Benefit $130,682.35 Net PV Benefit / $248,105.43 PV Refunded Interest 52.672% Net PV Benefit / $2,107,242.35 PV Refunded Debt Service 6.202% Net PV Benefit / $1,935,000 Refunded Principal 6.754% ,,. Refunding Bond Information Refunding Dated Date 11/23/2016 Refunding Delivery Date 11/23/2016 20168 Ref 2005,1 7811 (Curr I SINGLE PURPOSE 9/12,'2016 110:43AM Springsted Page 13 `s.• $5,550,000 City of Lino Lakes, Minnesota Taxable General Obligation Improvement Bonds, Series 2005A Debt Service To Call And To Maturity Date Refunded DIS To Call Principal Coupon Interest Refunded Bonds D/S 11/23/2016 02/01/2017 1,935, 000.00 1, 935, 000.00 08/01/2017 02/01/2018 - - 08/01/2018 - - 02/01/2019 08/01/2019 02/01/2020 - 08/01/2020 02/01/2021 445,000.00 470,000.00 495,000.00 525,000.00 5.000% 49,492.50 49,492.50 5.000% 49,492.50 494,492.50 38,367.50 38,367.50 5.150% 38,367.50 508,367.50 26,265.00 26,265.00 5.150% 26,265.00 521,265.00 13,518.75 13,518.75 5.150% 13,518.75 538,518.75 Total $1,935,000.00 $1,935,000.00 $1,935,000.00 - $255,287.50 $2,190,287.50 Yield Statistics Base date for Avg. Life & Avg. Coupon Calculation 11/23/2016 Average Life 2.757 Years Average Coupon 4.7846968% Weighted Average Maturity (Par Basis) 2.757 Years Weighted Average Maturity (Original Rice Basis) 2.757 Years Refunding Bond Information Refunding Dated Date 11/23/2016 Refunding Delivery Date 11/23/2016 Series 2005A TAX SINGLE PURPOSE 9/12/2016 1043.1 I Springsted Page 14 $1,600,000 City of Lino Lakes, Minnesota General Obligation Tax Abatement Refunding Bonds, Series 2016C Current Refunding of 2006C Bonds Refunding Summary Dated 11/23/2016 I Delivered 11/23/2016 Sources Of Funds Par Amount of Bonds $1,600,000.00 Total Sources $1,600,000.00 Uses Of Funds Deposit to Current Refunding Fund 1,565,000.00 Costs of Issuance 22,400.00 Total Underwriter's Discount (0.600%) 9,600.00 Rounding Amount 3,000.00 Total Uses $1,600,000.00 Flow of Funds Detail State and Local Government Series (SLGS) rates for Date of OMP Candidates Current Refunding Escrow Solution Method Gross Funded Total Cost of Investments $1,565,000.00 Total Draws $1,565,000.00 Issues Refunded And Call Dates Series 2006C 2/01/2017 PV Analysis Summary (Net to Net) Net PV Cashflow Savings @ 1.292%(Bond Yield) 130,833.20 Contingency or Rounding Amount 3,000.00 Net Present Value Benefit $133,833.20 Net PV Benefit / $1,565,000 Refunded Principal 8.552% Net PV Benefit / $1,600,000 Refunding Principal 8.365% Bond Statistics Average Life 3.861 Years Average Coupon 1.2938641% Net Interest Cost (NIC) 1.4492737% Bond Yield for Arbitrage Purposes 1.2922540% True Interest Cost (11C) 1.4532749% All Inclusive Cost (AIC) 1.8341100% 2016C GO Tax Abatement Re 1 Current Refunding of 2006 1 9/22/2016 1 9:42 AM Springsted Page 15 ,.. $1,600,000 City of Lino Lakes, Minnesota General Obligation Tax Abatement Refunding Bonds, Series 2016C Current Refunding of 2006C Bonds Debt Service Comparison Date Total P+I Existing DVS Net New DIS Old Net DIS Savings 02/01/2017 - 227,447.50 227,447.50 227,447.50 02/01/2018 248,287.36 248,287.36 271,820.00 23,532.64 02/01/2019 262,337.50 - 262,337.50 283,107.50 20,770.00 02/01/2020 274,765.00 274,765.00 298,545.00 23,780.00 02/01/2021 286,775.00 286,775.00 307,920.00 21,145.00 02/01/2022 298,337.50 298,337.50 321,445.00 23,107.50 02/01/2023 309,422.50 - 309,422.50 333,760.00 24,337.50 Total $1,679,924.86 $227,447.50 $1,907,372.36 $2,044,045.00 $136,672.64 PV Analysis Summary (Netto Net) ' 22,778.77 Net FV Cashflow Savings 136,672.64 Gross FV Debt Service Savings 130,833.20 Net R/ Cashflow Savings @ 1.292%(Bond Yield) 130,833.20 Contingency or Rounding Amount 3,000.00 Net Future Value Benefit $139,672.64 Net Present Value Benefit $133,833.20 Net FV Benefit / $243,039.63 PJ Refunded Interest 55.066% Net R/ Benefit / $1,730,833.20 IN Refunded Debt Service 7.732% Net FV Benefit / $1,565,000 Refunded Principal 8.552% Net R/ Benefit/ $1,600,000 Refunding Rincipal 8.365% Refunding Bond Information Refunding Dated Date 11/23/2016 Refunding Delivery Date 11/23/2016 2016C GO Tax Abatement Re 1 Curren Refunding of 2006 1 9/22/2016 1 9:43 AM Springsted Page 16 �.. ' $1,600,000 City of Lino Lakes, Minnesota General Obligation Tax Abatement Refunding Bonds, Series 2016C Current Refunding of 2006C Bonds Debt Service Schedule Date Principal Coupon Interest Total P+I 02/01/2017 - - - 02/01/2018 225,000.00 1.000% 23,287.36 248,287.36 02/01/2019 245,000.00 1.050% 17,337.50 262,337.50 02/01/2020 260,000.00 1,150% 14,765.00 274,765.00 02/01/2021 275,000.00 1.250% 11,775.00 286,775.00 02/01/2022 290, 000.00 1.350% 8,337.50 298,337.50 02/01/2023 305, 000.00 1.450% 4,422.50 309,422.50 Total $1,600,000.00 $79,924.86 $1,679,924.86 Yield Statistics Bond Year Dollars $6,177.22 Average Life 3.861 Years Average Coupon 1.2938641% Net Interest Cost (NIC) 1.4492737% True Interest Cost (TIC) 1.4532749% Bond Yield for Arbitrage Purposes 1.2922540% All Inclusive Cost (AIC) 1.9412599% IRS Form 8038 Net Interest Cost 1.2938641% Weighted Average Maturity 3.861 Years 2016C GO Tax Abatement Re I Current Refunding of 2006 1 9/20/2016 1 3:55PM Springsted Page 17 $2,460,000 City of Lino Lakes, Minnesota General Obligation Tax Abatement Bonds, Series 2006C Debt Service To Maturity And To Call Date Refunded DIS To Call Principal Coupon Interest Refunded Bonds D/S 02/01/2017 1,565,000.00 1,565,000.00 - 4.250% - 02/01/2018 205,000.00 4.250% 66,820.00 271,820.00 02/01/2019 225,000.00 4.250% 58,107.50 283,107.50 02/01/2020 250,000.00 4.250% 48,545.00 298,545.00 02/01/2021 - - 270,000.00 4.250% 37,920.00 307,920.00 02/01/2022 295,000.00 4.300% 26,445.00 321,445.00 02/01/2023 320,000.00 4.300% 13,760.00 333,760.00 Total $1,565,000.00 $1,565,000.00 $1,565,000.00 $251,597.50 $1,816,597.50 Yield Statistics Base date for Avg. Life & Avg. Coupon Calculation 11/23/2016 Average Life 3.946 Years Average Coupon 4.0740503% Weighted Average Maturity (Par Basis) 3.946 Years Weighted Average Maturity (Original Rice Basis) 3.946 Years Refunding Bond Information Refunding Dated Date Refunding Delivery Date 11/23/2016 11/23/2016 Series 2006C 1 SINGLE PURPOSE 1 9/20/2016 1 3.-55PM Springsted Page 18 Extract of Minutes of Meeting of the City Council of the City of Lino Lakes, Anoka County, Minnesota Pursuant to due call and notice thereof a regular meeting of the City Council of the City of Lino Lakes, Anoka County, Minnesota, was held at the City Hall in the City on Monday, September 26, 2016, commencing at 6:30 P.M. The following members of the Council were present: and the following were absent: Member introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 486695v1 JAE LN140-117 r EXHIBIT A TERMS OF PROPOSAL A-1 486695v1 JAE LN140-117 THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,420,000* CITY OF LLNO LAKES, 1MINNESOTA GENERAL OBLIGATION WATER UTILITY REVENUE BONDS, SERIES 2016A (BOOK ENTRY ONLY) Proposals for the Series 2016A Bonds will be received on Monday. October 24, 2016. until 11:00 A.M.. Central Time. at the offices of Springsted Incorporated 380 Jackson Street. Suite 300. Saint Paul. Minnesota. after which time proposals will be opened and tabulated. Consideration for award of the Series 2016A Bonds will be by the City Council at 6:00 P.M.. Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Series 2016A Bonds regardless of the manner in which the proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651)223-3046 to Springsted. Signed proposals, without final price or coupons. may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final proposal price and coupons. by telephone (651) 223-3000 or fax (651) 223-3046 for inclusion in the submitted proposal. OR (b) Electronic Bidding Notice is hereby given that electronic proposals will be received via PARITY®. For purposes of the electronic bidding process. the time as maintained by PARITY® shall constitute the official time with respect to all proposals submitted to PARITY®. Each bidder shall be solely responsible for rnaking necessan• arrangements to access PARITrt for proposes of submitting its electronic proposal in a timely manner and in compliance frith the requirements of the Terms of Proposal. Neither the City, its agents nor PARITY® shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder. and neither the City. its agents nor PARITY® shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY®. The City is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Series 2016A Bonds, and PARITY® is not an agent of the City. If any provisions of this Terms of Proposal conflict with information provided by PARITY®. this Terns of Proposal shall control. Further information about PARITY®. including any fee charged. may be obtained from: PARITY®, 1359 Broadway, 2nd Floor, New York. New York 10018 Customer Support: (212) 849-5000 • Preliminary; subject to change. -1- A-2 486695v1 JAE LN140-117 DETAILS OF THE SERIES 2016A BONDS The Series 2016A Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and August 1 of each year. commencing August 1, 2017. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Series 2016A Bonds will mature February 1 in the years and amounts* as follows: 2018 $130.000 2019 $135.000 * 2020 $140.000 2021 $140.000 2022 $140.000 2023 $145.000 2024 $145.000 2025 $145.000 2026 $150.000 2027 $150.000 The Cit- reserves the right, after proposals are opened and prior to mrard, to increase or reduce the principal amount of the Series 2016.4 Bonds or the amount of arm maturity in multiples of $5,000. In the event the amount of any mahnity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per SI,000 of Series 2016.4 Bonds as that of the original proposal. Gross spread is the differential bet Peen the price paid to the Cit' for the nor issue and the prices at which the securities are initially offered to the investing public. Proposals for the Series 2016A Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All tern bonds shall be subject to mandatory sinking find redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the manuity schedule set forth above. In order to designate term bonds. the proposal must specify "Years of Tenn Manuities" in the spaces provided on the proposal form. BOOK ENTRY SYSTEM The Series 2016A Bonds will be issued by means of a book entry system with no physical distribution of Series 2016A Bonds made to the public. The Series 2016A Bonds will be issued in fully registered form and one Series 2016A Bond. representing the aggregate principal amount of the Series 2016A Bonds manuring in each year. will be registered in the name of Cede & Co. as nominee of The Depository Trust Company (DTC"). New York, New York, which will act as securities depository of the Series 2016A Bonds. Individual purchases of the Series 2016A Bonds may be made in the principal amount of $5.000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Series 2016A Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC: transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Series 2016A Bonds. will be required to deposit the Series 2016A Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1. 2025. and on any day thereafter. to prepay Series 2016A Bonds due on or after February 1. 2026. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all Series 2016A Bonds of a maturity are called for redemption. the City will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. -n- A-3 486695v1 JAE LN140-117 SECURITY AND PURPOSE The Series 2016A Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition. the City will pledge net revenues of the City's water utility. The proceeds will be used to finance improvements to the City's water system. BIDDING PARAMETERS Proposals shall be for not less than $1.407,930 plus accrued interest. if any, on the total principal amount of the Series 2016A Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Series 2016A Bonds is adjourned. recessed, or continued to another date without award of the Series 2016A Bonds having been made. Rates shall be in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity must be 98.0% or greater. Series 2016A Bonds of the same maturity shall bear a single rate from the date of the Series 2016A Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT To have its proposal considered for award. the lowest bidder is required to submit a good faith deposit to the City in the amount of $14.200 (the "Deposit") no later than 2:00 P.M.. Central Time on the day of sale. The Deposit may be delivered as described herein in the form of either (i) a certified or cashier's check payable to the City: or (ii) a wire transfer. The lowest bidder shall be solely responsible for the timely delivery of their Deposit whether by check or wire transfer. Neither the City nor Springsted Incorporated have any liability for delays in the receipt of the Deposit. If the Deposit is not received by the specified time. the City may. at its sole discretion. reject the proposal of the lowest bidder. direct the second lowest bidder to submit a Deposit. and thereafter award the sale to such bidder. Certified or Cashier's Check. A Deposit made by certified or cashier's check will be considered timely delivered to the City if it is made payable to the City and delivered to Springsted Incorporated. 380 Jackson Street. Suite 300. St. Paul. Minnesota 55101 by the specified time. Wire Transfer. A Deposit made by wire will be considered timely delivered to the City upon submission of a federal wire reference number by the specified time. Wire transfer instructions will be available from Springsted Incorporated following the receipt and tabulation of proposals. The successful bidder must send an e-mail including the following information: (i) the federal reference number and time released: (ii) the amount of the wire transfer: and (iii) the issue to which it applies. Once an award has been made. the Deposit received from the lowest bidder (the "purchaser") will be retained by the City and no interest will accrue to the purchaser. The amount of the Deposit will be deducted at settlement from the purchase price. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Series 2016A Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City. The City's computation of the interest rate of each proposal. in accordance with customary practice. will be controlling. The City will reserve the right to: (i) waive non -substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Series 2016A Bonds. (ii) reject all proposals without cause. and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. A-4 486695v1 JAE LN140-117 BOND INSURANCE AT PURCHASERS OPTION Tlie City has not applied for or pre -approved a commitment for any policy of municipal bond insurance with respect to the Series 2016A Bonds. If the Series 2016A Bonds qualify for municipal bond insurance and a bidder desires to purchase a policy, such indication, the magnifies to be insured. and the name of the desired insurer must be set forth on the bidder's proposal. The City specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the City. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Series 2016A Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Series 2016A Bonds. CUSIP NUMBERS If the Series 2016A Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Series 2016A Bonds. but neither the failure to print such numbers on any Series 2016A Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Series 2016A Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SE 11 LEMENT On or about November 23. 2016. the Series 2016A Bonds will be delivered without cost to the purchaser through DTC in New York, New York. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven. Chartered of Minneapolis. Minnesota. and of customary closing papers, including a no -litigation certificate. On the date of settlement, payment for the Series 2016A Bonds shall be made in federal. or equivalent. finds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Series 2016A Bonds has been made impossible by action of the City. or its agents. the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non-compliance with said terms for payment. CONTINUING DISCLOSLTRE In accordance with SEC Rule 15c2 -12(b)(5). the City will undertake. pursuant to the resolution awarding sale of the Series 2016A Bonds. to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The purchaser's obligation to purchase the Series 2016A Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Series 2016A Bonds. O11.ICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Series 2016A Bonds. and said Preliminary Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Preliminary Official Statement or for any additional information prior to sale. any prospective purchaser is referred to the Municipal Advisor to the City. Springsted Incorporated. 380 Jackson Street. Suite 300. Saint Paul. Minnesota 55101. telephone (651) 223-3000. A Final Official Statement (as that term is defined in Rule 15c2-12) will be prepared. specifying the maturity dates. principal amounts and interest rates of the Series 2016A Bonds. together with any other information required by law. By awarding the Series 2016A Bonds to an underwriter or underwriting syndicate, the City agrees that. no more than seven business days after the date of such award. it shall provide without cost to the sole underwriter or to the senior managing underwriter of the syndicate (the "Underwriter" for purposes of this paragraph) to which the Series 2016A Bonds are awarded up to -iv- A-5 486695v1 JAE LN140-117 25 copies of the Final Official Statement. The City designates the Underwriter of the syndicate to which the Series 2016A Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Undenvriter. Such Underwriter agrees that if its proposal is accepted by the City, (i) it shall accept designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Series 2016A Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated September 26. 2016 BY ORDER OF THE CITY COUNCIL A-6 486695v1 JAE LN140-117 /s/ Julie Bartell City Clerk STATE OF MINNESOTA COUNTY OF ANOKA CITY OF LINO LAKES I, the undersigned, being the duly qualified and acting City Clerk of the City of Lino Lakes, Minnesota (the "City"), hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on Monday, September 26, 2016, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes, insofar as they relate to the issuance and sale of the City's General Obligation Water Utility Revenue Bonds, Series 2016A, in the proposed aggregate principal amount of $1,420,000. WITNESS My hand as City Clerk and the corporate seal of the City this day of , 2016. City Clerk City of Lino Lakes, Minnesota (SEAL) 486695v1 JAE LN140-117 L Extract of Minutes of Meeting of the City Council of the City of Lino Lakes, Anoka County, Minnesota Pursuant to due call and notice thereof a regular meeting of the City Council of the City of Lino Lakes, Anoka County, Minnesota, was held at the City Hall in the City on Monday, September 26, 2016, commencing at 6:30 P.M. The following members of the Council were present: and the following were absent: *** Member introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 486437v1 JAE LN140-117