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HomeMy WebLinkAbout1999-061 Council ResolutionExtract 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 \tog laspfspecialS(meeting of the City Council of the City of Lino Lakes, Minnesota, was duly held in the City Hall in said City on Tuesday, August 24, 1999, commencing at 4:05 o'clock P.M. The following members were present: Kimberly Sullivan, John Bergeson and Caroline Dahl and the following were absent: Christopher Lyden and Wesley Neal *** The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's $ 1,725,000 General Obligation Improvement Refunding Bonds, Series 1999A. The City Clerk -Treasurer presented a tabulation of the proposals which had been received in the manner specified in the Official Terms of Proposal for the Bonds. The proposals were as follows: BMB-167650 LN 140-68 AWARD: SALE: 85 E. SEVENTH PLACE, SUITE 100 SAINT PAUL, MN 55101-2887 651-223-3000 FAX: 651-223-3002 SPRINGSTED Public Finance Advisors $1,725,000* CITY OF LINO LAKES, MINNESOTA GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1999A (BOOK ENTRY ONLY) DOUGHERTY SUMMIT SECURITIES LLC August 24, 1999 Moody's Rating: A3 Bidder Interest Rates Price Net Interest True Interest Cost Rate DOUGHERTY SUMMIT SECURITIES LLC PAINEWEBBER INCORPORATED MORGAN STANLEY DEAN WITTER CIBC OPPENHEIMER CORPORATION EVEREN SECURITIES, INC. JOHN G. KINNARD & COMPANY U.S. BANCORP PIPER JAFFRAY INC. MILLER, JOHNSON & KUEHN, INC. 1ALOMON SMITH BARNEY ORONIN & COMPANY, INCORPORATED 4.25% 2002 4.375% 2003 4.50% 2004 4.60% 2005 4.70% 2006 4.45% 2002-2004 4.50% 2005 4.625% 2006 4.25% 2002 4.35% 2003 4.45% 2004 4.60% 2005 4.70% 2006 4.50% 2002-2005 4.60% 2006 4.50% 2002 4.60% 2003-2005 4.70% 2006 4.40% 2002 4.50% 2003-2004 4.60% 2005 4.70% 2006 $1,715,137.80 $360,374.80 4.6714% $1,713,075.90 $360,383.37 4.6774% $1,713,011.25 $361,442.29 4.6886% $1,713,086.90 $361,534.77 4.6932% $1,717,237.50 $364,329.58 4.7216% $1,712,925.00 $365,178.33 4.7388% (Continued) SAINT PAUL, MN • MINNEAPOLIS, MN • MILWAUKEE, WI • OVERLAND PARK, KS • WASHINGTON, DC • DES MOINES, IA Bidder Interest Rates Price Net Interest Cost True Interest Rate GRIFFIN, KUBIK, STEPHENS & THOMPSON, INC. NORWEST INVESTMENT SERVICES, INC. 4.50% 2002 4.60% 2003-2004 4.70% 2005 4.80% 2006 4.30% 2002 4.50% 2003 4.60% 2004 4.70% 2005 4.80% 2006 $1,719,531 75 $366,290 33 $1,713,270 00 $369,860 83 4.7417°/ 4.7972% REOFFERING SCHEDULE OF THE PURCHASER Rate 4.25% 4.375% 4.50% 4.60% 4.70% Subsequent to bid opening, the issue size was not changed. Year 2002 2003 2004 2005 2006 Yield 4.20% 4.30% 4.45% Par Par BBI: 5.65% Average Maturity: 4.47 Years After due consideration of the proposals, Member Dahl then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: In accordance with the official Terms of Proposal, the following adjustments were made: None Principal Amount: Maturities: Minimum Purchase Price: RESOLUTION NO. 99-61 A RESOLUTION AWARDING THE SALE OF $1, 725,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1999A; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY. BE IT RESOLVED By the City Council of the City of Lino Lakes, Anoka County, Minnesota (the "City"), as follows: Section 1. Sale of Bonds. 1.01. The proposal of Dougherty Summit Securities Inc. (the "Purchaser") to purchase $ 1,725,000 General Obligation Improvement Refunding Bonds, Series 1999A (the "Bonds") of the City described in the Official Terms of Proposal therefor is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $ 1,715,137.80plus accrued interest to date of delivery, for Bonds bearing interest as follows: Year of Interest Year of Interest Maturity Rate Maturity Rate 2002 4.25 % 2005 4.60% 2003 4.375 2006 4.70 2004 4.50 BMB-167650 LN 140-68 True interest cost: 4.6714 1.02. The sum of $ 2,212.80 , being the amount proposed by the Purchaser in excess of $1, 712 , 925 , is credited to the Escrow Account or the debt service account hereinafter created, or designated to pay costs of issuance of the Bonds, as the case may be. The City Clerk - Treasurer is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers forthwith. The Mayor and City Clerk -Treasurer are directed to execute a contract with the Purchaser on behalf of the City. 1.03. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Chapter 475 (the "Act") in the total principal amount of $1,725 , 000 , originally dated September 1, 1999, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially, without option of prior payment, on February 1 in the years and amounts as follows: Year Amount Year Amount 2002 $320,000 2005 $365,000 2003 335,000 2006 355,000 2004 350,000 Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of September 1, 1999. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2000, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: BMB-167650 LN 140-68 (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. BMB-167650 LN 140-68 (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank Trust National Association, Saint Paul, Minnesota, as the initial Registrar. The Mayor and the City Clerk - Treasurer are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Clerk -Treasurer and executed on behalf of the City by the signatures of the Mayor and the City Clerk -Treasurer; provided, that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on each Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City will deliver the same to the order of the Purchaser upon payment of the purchase price in accordance BMB-167650 LN 140-68 with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. The Bonds will be printed or typewritten in substantially the following form: [Face of the Bond] No. R - UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA CITY OF LINO LAKES GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND, SERIES 1999A Rate Maturity Original Issue CUSIP February 1 September 1, 1999 Registered Owner: Cede & Co. The City of Lino Lakes, Minnesota, a duly organized and existing municipal corporation in Anoka County, Minnesota (the "City"), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns the Principal Amount set forth above on the Maturity Date specified above, without option of prior payment, and to pay interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing August 1, 2000, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank Trust National Association, Saint Paul, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same BMB-167650 LN 140-68 respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. This Bond is one of an issue in the aggregate principal amount of $ , all of like original issue date and tenor, except as to number, maturity date and interest rate, all issued pursuant to a resolution adopted by the City Council on August 24, 1999 (the "Resolution"), for the purpose of providing money to refund in advance of maturity of the outstanding principal amount of certain general obligation bonds of the City, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 475.67, Subdivisions 4 through 12. The interest hereon to and including February 1, 2001 is payable from the Escrow Account described in the Resolution, and thereafter, the principal hereof and interest hereon are payable primarily from special assessments against property specially benefitted by local improvements, as set forth in the Resolution, to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in special assessments pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. BMB-167650 LN 140-68 IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Lino Lakes, Anoka County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Clerk -Treasurer and has caused this Bond to be dated as of the date set forth below. DATED: CITY OF LINO LAKES, MINNESOTA Lfacsimile) Lfacsimile) City Clerk -Treasurer Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK TRUST NATIONAL ASSOCIATION By Authorized Representative BMB-167650 LN 140-68 The following abbreviations, when used in the inscription of the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants UNIF GIFT MIN ACT in common TEN ENT -- as tenants by entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common Custodian (Cust) (Minor) under Uniform Gifts or Transfers to Minors Act (State) Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a member of the Medallion Signature Program. The Bond Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. BMB-167650 LN 140-68 Name and Address: (Include information for all joint owners if this Bond is held by joint account) Please insert social security or other identifying number of assignee: PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Officer of Registrar Cede & Co. Federal ID #13-2555119 Section 4. Payment; Security; Pledges and Covenants. 4.01. (a) Interest on the Bonds to and including February 1, 2001 is payable from the Escrow Account established pursuant to the Escrow Agreement described herein. Thereafter, the Bonds are payable from the General Obligation Improvement Refunding Bonds, Series 1999A Debt Service Fund (the "Debt Service Fund") hereby created, and the proceeds of special assessments (the "Assessments") levied for the improvements described in the resolution authorizing the issuance of the Refunded Bonds are hereby pledged to the Debt Service Fund. (b) The debt service fund (but not the construction fund), if any, heretofore established for the Refunded Bonds is terminated, and all monies therein are hereby transferred to the Debt Service Fund herein created; provided, however, that the City Clerk -Treasurer is hereby authorized and directed to transfer from said Debt Service Fund those amounts determined by actuarial calculation at the time of delivery of the Bonds to be necessary to properly fund the Escrow Account established by Section 5 of this resolution. If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, BMB-167650 LN 140-68 the City will pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for those advances out of the proceeds of the Taxes levied pursuant to this resolution and Assessments when collected. 4.02. It is determined that estimated collection of Assessments and interest thereon for the payment of principal and interest on the Bonds will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds and that no tax levy is needed at this time. 4.03. The City Clerk -Treasurer is directed to file a certified copy of this resolution with the County Auditor of Anoka County and to obtain the certificate required by Section 475.63 of the Act. 4.04. It is hereby determined that the Improvements financed by the Bonds will directly and indirectly benefit the abutting property, and the City hereby covenants with the holders from time to time of the Bonds as follows: (a) The City has levied Assessments for the improvements and has taken all steps necessary to assure prompt collection thereof. The City Council has caused all actions and proceedings relative to the making and financing of the Improvements financed hereby to have been taken with due diligence that were required for the construction of each Improvement financed wholly or partly from the proceeds of the Bonds, and for the final and valid levy of the Assessments and the appropriation of any other funds needed to pay the Bonds and interest thereon when due. (b) In the event of any current or anticipated deficiency in the Assessments, the City Council will levy ad valorem taxes in the amount of said current or anticipated deficiency. (c) The City will keep complete and accurate books and records showing all receipts and disbursements in connection with the Improvements; Assessments levied therefor and other funds appropriated for their payment; all collections thereof and disbursements therefrom; moneys on hand; and the balance of unpaid Assessments. (d) The City will cause its books and records to be audited at least annually and will furnish copies of such audit reports to any interested person upon request. 4.05. Prior Resolution Pledges. The pledges and covenants of the City made by the resolution awarding the sale of the Refunded Bonds (the "Prior Resolution") relating to the levy and collection of Special Assessments against property specially benefitted by the Improvements financed by the Bonds and the Refunded Bonds are restated and confirmed in all respects. The BMB-167650 LN 140-68 provisions of the Prior Resolution are hereby supplemented to the extent necessary to give full effect to the provisions of this resolution. Section 5. Refunding; Findings; Redemption of Refunded Bonds. 5.01. It is hereby found and determined that based upon information presently available from the City's financial advisers, the issuance of the Bonds will result in a reduction of debt service or interest cost to the City on the Refunded Bonds as follows: Net Effective Refunded Refunding Interest Rate Bonds Bonds 6.507% 4.668% The dollar value of such debt service or interest cost savings (the "Reduction") is $59,452.48 , and the present value of the Reduction is $ 50,232.79 . The dollar amount of the Reduction is 3.244 % of the debt service [inti tynostd on the Refunded Bonds. The Reduction, after the inclusion of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is adequate to authorize the issuance of the Bonds as provided by Minnesota Statutes, Section 475.67, Subdivision 12. 5.02. It is necessary to purchase from Bond proceeds investment securities required to fund the Escrow Account pursuant to this Resolution. Springsted Incorporated, as agent for the City is hereby authorized and directed to purchase (or to cause the Escrow Agent to purchase) for and on behalf of the City and in its name, appropriate securities to fund the Escrow Account. Upon the issuance and delivery of the Bonds, the securities so purchased will be deposited with the Escrow Agent and held pursuant to the terms of the Escrow Agreement and this Resolution. As of the date of delivery of and payment for the Bonds the proceeds of the Bonds (the "Proceeds"), in the amount of $ 1, 719, 872.77 together with other funds (the "Funds") in the amount of $ -0- are hereby appropriated for such purpose as will be necessary to pay the principal of, interest on and redemption premium (if any) on the Refunded Bonds to their maturity or the date on which they are called for redemption, whichever date is earlier, less necessary expenses of the issuance of the Bonds and less any amount of Proceeds in excess of $ 1,712,925 required to be deposited in the Debt Service Fund, are hereby pledged and appropriated and will be deposited in an escrow account (the "Escrow Account") with U.S. Bank Trust National Association, Saint Paul, Minnesota, a suitable financial institution within the state, whose deposits are insured by the Federal Deposit Insurance Corporation, whose combined capital and surplus is not less than BMB-167650 LN 140-68 $500,000 and said financial institution is hereby designated escrow agent (the "Escrow Agent") for such Proceeds and Funds. The Proceeds and Funds will be invested in securities maturing or callable at the option of the holder on such dates and bearing interest at such rates as will be required to provide sufficient funds, together with any cash or other funds retained in the Escrow Account, to pay when due the interest to accrue on each of the Refunded Bonds at maturity or on the date on which it is called as herein provided and to pay the principal amount of each such obligation at maturity or on the date on which it has been called for redemption and to pay any premium required for redemption on such date. The monies in the Escrow Account will be used solely for the purposes herein set forth and for no other purpose, except that if any surplus will remain in the Escrow Account after all of the Refunded Bonds and interest (and any premium) thereon are paid, then such balance will be transferred to the City. 5.03. No portion of the proceeds of the Bonds will be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (ii) in addition to the above, in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Debt Service Fund (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield will not be invested at a yield in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any applicable temporary periods or minor portion made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and money in the Fund will not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds to be federally guaranteed within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"). 5.04. It is hereby found and determined that the Proceeds and Funds available and appropriated to the Escrow Account will be sufficient, together with the permitted earnings on the investment of the Escrow Account, to pay interest on the Bonds to and including February 1, 2001 and to pay on February 1, 2001, all of the principal of, interest on and redemption premium (if any) on the Refunded Bonds. 5.05. Securities purchased from the monies in the Escrow Account will be limited to securities specified in Section 475.67, Subdivision 8 of the Act. Springsted Incorporated, as agent for the City is hereby authorized and directed to purchase (or to cause the Escrow Agent to purchase) for and on behalf of the City and in its name, appropriate securities to fund the Escrow Account. Upon the issuance and delivery of the Bonds, the securities so purchased will be deposited with the Escrow Agent and held pursuant to the terms of the Escrow Agreement and the Resolution. BMB-167650 LN140-68 5.06. The Refunded Bonds maturing on February 1, 2002 and thereafter will be redeemed and prepaid on February 1, 2001. The Refunded Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the forms of Notice of Call for Redemption attached to the Escrow Agreement, which terms and conditions are hereby approved and incorporated herein by reference. The City Clerk -Treasurer is hereby authorized and directed to forthwith publish the Notice of Call for Redemption in a publication qualified under Section 475.54 of the Act and to send written notices of call to the paying agent for the Refunded Bonds, provided that published notice alone will be effective. 5.07. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will be and are hereby irrevocably pledged. If the balance in the Escrow Account or Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Escrow Account or Debt Service Account when a sufficient balance is available therein. 5.08. Escrow Agreement. On or prior to the delivery of the Refunding Bonds, the Mayor and the City Clerk -Treasurer are hereby authorized and directed to execute on behalf of the City an escrow agreement (the "Escrow Agreement") with the Escrow Agent in substantially the form now on file with the City. All essential terms and conditions of the Escrow Agreement, including payment by the City of reasonable charges for the services of the Escrow Agent, are hereby approved and adopted and made a part of this resolution, and the City covenants that it will promptly enforce all provisions thereof in the event of default thereunder by the Escrow Agent. Section 6. Authentication of Transcript. 6.01. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 6.02. The Mayor and City Clerk -Treasurer are hereby authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. BMB-167650 LN140-68 Section 7. Tax Covenants. 7.01. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 7.02. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States if the Bonds (together with other obligations reasonably expected to be issued in calendar year 1999) exceed the small -issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(C) of the Code, and further finds, determines and declares that the aggregate amount of all tax-exempt bonds (other than private activity bonds) issued by the City in 1992 (the year the Refunded Bonds were issued) did not exceed $5,000,000, and that the average maturity date of the Bonds is not later than the average maturity date of the Refunded Bonds. 7.03. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 7.04. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; BMB-167650 LN 140-68 (b) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 1999 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 1999 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 8. Book -Entry System; Limited Obligation of City. 8.01. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Bond Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Bond Registrar in the name of Cede & Co., as nominee of DTC. 8.02. With respect to Bonds registered in the registration books kept by the Bond Registrar in the name of Cede & Co., as nominee of DTC, the City, the Bond Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (Participants) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Bond Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Bond Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Bond Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Bond Registrar, and all such payments will BMB-167650 LN 140-68 be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Bond Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon receipt of such a notice, the City will promptly deliver a copy of the same to the Bond Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter"), which will govern payment of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Bond Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Bond Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Bond Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 9. Continuing Disclosure. 9.01. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. BMB-167650 LN 140-68 9.02. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Clerk -Treasurer and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. BMB-167650 LN 140-68 The motion for the adoption of the foregoing resolution was duly seconded by Member Bergeson , and upon vote being taken thereon, the following voted in favor thereof Kimberly Sullivan, John Bergeson and Caroline Dahl and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. BMB-167650 LN 140-68 STATE OF MINNESOTA COUNTY OF ANOKA CITY OF LINO LAKES ) SS. I, the undersigned, being the duly qualified and acting City Clerk -Treasurer of the City of Lino Lakes, Anoka County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of affmkt.imi [special] meeting of the City Council of the City held on August 24, 1999, 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 $1, 725,000 General Obligation Improvement Refunding Bonds, Series 1999A, of the City. WITNESS My hand officially as such City Clerk -Treasurer this `--7 day of August, 1999. BMB-167650 LN 140-68 •- -.• • se (0114, '9 . at6i_6,14(;7:._ City Clerk -Treasurer City of Lino Lakes, Minnesota