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HomeMy WebLinkAbout2018-105Extract of Minutes of Meeting of the City Council of the City of Lake Elmo Washington County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Lake Elmo, Minnesota, was duly held in the City Hall in the City on Tuesday, September 18, 2018, commencing at 7:00 o'clock P.M. The following members were present: T' A Meelm�r,� MD-41 ()Vws oA � i A [N-er, RAO, Lun4ye/Yj aAld, 0950a, and the following were absent: Nby-,& The Mayor announced that the next order of business was consideration of a proposal for the purchase of a $940,000 General Obligation Equipment Certificate of Indebtedness, Series 2018A of the City. The City Administrator presented the offer from Lake Elmo Bank to purchase the Certificate that had been submitted to the City pursuant to Council direction. 0 After due consideration of the proposal, Catinei4i*ember NWC PUW*bvffitroduccd I the following resolution, and moved its adoption: 536168e2 JSB LA515-53 RESOLUTION NO. 2018-105 A RESOLUTION AWARDING THE SALE OF A GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF INDEBTEDNESS, SERIES 2018A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $940,000; FIXING ITS FORM AND SPECIFICATIONS; DIRECTING ITS EXECUTION AND DELIVERY; AND PROVIDING FOR ITS PAYMENT NOW THEREFORE BE IT RESOLVED By the City Council of the City of Lake Elmo, Washington County, Minnesota (the "City") as follows: Section 1. Sale of Certificate. 1,01. Authorization. (a) The City 'is authorized by Minnesota Statutes, Minnesota Statutes, Sections 412,301 (the "Act") to issue its general obligation equipment certificates of indebtedness on such terms and in such manner as the City determines to finance the acquisition of certain items of capital equipment, which is expected to include a fire engine and a dump truck (the "Equipment"), subject to certain limitations contained in the Act. (b) It is necessary and expedient to the sound financial management of the affairs of the City to issue a $940,000 General Obligation Equipment Certificate of Indebtedness, Series 2018A (the "Certificate") pursuant to the Act to provide financing for the acquisition of the Equipment. (c) As required by the Act, (i) the expected useful life of the Equipment is or will be at least as long as the term of the Certificate; and (ii) the principal amount of the Certificate will not exceed 0.25 percent of the estimated market value of taxable property in the City for taxes payable in 2018, which is the market value as last finally equalized. (d) The City is authorized to negotiate the sale of the Certificate pursuant to an exception under Minnesota Statutes, Section 475.60, subdivision 2(a) for up to $1 200,000 of obligations in a 12-month period, which the City has determined it will not exceed. The actions of the City staff and financial advisers in negotiating the sale of the Certificate are ratified and confirmed in all aspects. Section 2. Details of Certificate, 2.01. Purchase of Certificate. The offer of Lake Elmo Bank (the "Purchaser") to purchase the Certificate is found to be a reasonable offer and is accepted, the proposal being to purchase the Certificate at a price of $940,000, plus accrued interest to date of delivery, for a Certificate bearing interest at the rate of 2.700% per annum. 536168v2 JSB LA515-53 2 2.02, Terms and Principal Amount of the Certificate. The City will forthwith issue and sell the Certificate pursuant to the Act to the Purchaser in the total principal amount of $940,000. The Certificate will be originally dated the date of delivery, in the denomination of the entire principal amount thereof, and maturing serially on February 1, in the years and amounts as follows: Year Amount Year Amount 2020 $90,000 2026 $110,000 2021 $95,000 2027 $115,000 2022 $100,000 2028 $115,000 2023 $100,000 2024 $1051000 2025 $110,000 Notwithstanding the foregoing, if the Certificates bear interest at more than one interest rate, a separate Certificate will be issued for each maturity. 2.03. Optional Redemption. The City may elect on any date to prepay the principal amount of the Certificate or any portion thereof. 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 will determine. Prepayments will be at a price of par plus accrued interest. Section 3. Registrations. 3.01. Registered Form. The Certificate will be issued as a single typewritten certificate, numbered R-1, only in fully registered form. The interest thereon and, upon surrender of each Certificate, the principal amount thereof, will be payable by check or draft issued by the Registrar described herein. 3.02. Dates-, Interest Payment Dates. The Certificate will be dated as of the last interest payment date preceding the date of authentication to which interest on the Certificate 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 Certificate 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 Certificate will be dated as of the date of original issue. The interest on the Certificate will be payable on February I and August I of each year, commencing August 1, 2019 to the registered owner of record as of the close of business on the 15th day of the immediately preceding month, whether or not that day is a business day. 3.03. Registration. The City appoints the City Clerk as 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 will be as follows: 536168v2 JSB LAS 15-53 3 (a) Re_.gister, The Registrar will keep a register in which the Registrar will provide for the registration of ownership of the Certificate and the registration of transfers and exchanges of the Certificate entitled to be registered, transferred or exchanged. (b) Transfer of Certificate. Upon surrender for transfer of the Certificate 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 deliver, in the name of the designated transferee or transferees, one or more new Certificates 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 Certificate. Whenever the Certificate is surrendered by the registered owner for exchange the Registrar will deliver one or more new Certificates of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Upon transfer or exchange the Certificate will be surrendered and promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) hnprgper or Unauthorized Transfer. When the Certificate is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Certificate 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 the Certificate is at any time registered in the register as the absolute owner of the Certificate, whether the Certificate will be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Certificate and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Certificate 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 every transfer or exchange of the Certificate sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Certificate. In case the Certificate becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new 536168v2 JSIB IA515-53 4 Certificate of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of such mutilated Certificate or in lieu of and in substitution for any such Certificate 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 Certificate destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to the Registrar that such Certificate was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate certificate or indemnity in form, substance and amount satisfactory to the Registrar, in which both the City and the Registrar will be named as obligees. Upon surrender to the Registrar, the Certificate will be cancelled by the Registrar and evidence of such cancellation will be given to the City. If the mutilated, destroyed, stolen or lost Certificate has already matured or been called for redemption in accordance with its terms it will not be necessary to issue a new Certificate prior to payment. (i) Redgmptio . In the event any installment of principal on the Certificate is called for redemption, notice will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) not more than 60 and not less than 30 days prior to the date fixed for redemption to the registered owner of the Certificate at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of installment of principal of the Certificate. Upon redemption, the installment of principal on the Certificate so redeemed will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 3.04. Execution and Delivery. The Certificate will be prepared under the direction of the City Clerk and will be executed on behalf of the City by the signatures of the Mayor and the City Clerk. In case any officer whose signature appears on the Certificate will cease to be such officer before the delivery of the Certificate, such signature will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. When the Certificate have been so prepared, executed, the City Clerk will deliver the same to the Purchaser thereof upon payment of the purchase price and the Purchaser will not be obligated to see to the application of the purchase price. Section 4. 4.01. Form of Certificate. The Certificate will be printed or typewritten in substantially the form attached hereto as Exhibit A. 4.02. Approving Legal Opinion. The City Clerk is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which will be complete except as to dating thereof and to cause the opinion to be printed on or accompany the Certificate. Section 5. PaMcnt: Security. 536168v2 JSB LA515-53 5 5.01. CavitalFund. There is hereby created a Capital Fund to which the proceeds of the Certificate shall be credited less any amounts credited to the Debt Service Fund. From the Capital Fund, there shall be paid all costs of issuing the Certificate and all costs and expenses of the acquisition of the Equipment, including all costs incniTed and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65; and the moneys in said account shall be used for no other purpose except as otherwise provided by law. 5.02 Debt Service Fund. The Certificate is payable from the General Obligation Equipment Certificate of Indebtedness, Series 2018A Debt Service Fund (the "Debt Service Fund") hereby created, and the proceeds of the ad valorem taxes hereinafter levied described in Section 5.03 are pledged to the Debt Service Fund. If a payment of principal or interest on the Certificate becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the City Finance Director will pay such principal or interest from the general fund of the City, and the general fund may be reimbursed for those advances out of the proceeds of the taxes levied by this resolution, when collected. 5.03. Pledge of Taxes. For the purpose of paying the principal of and interest on the Certificate, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City (the "Taxes"). Such Taxes will be credited to the Debt Service Fund above provided and will be in the years and amounts set forth in Exhibit B. 5.04. Certification to County Auditor as to Debt Service Fund Amount. It is determined that the estimated collection of the foregoing Taxes will produce at least 5% in excess of the amount needed to meet when due, the principal and interest payments on the Certificate. The tax levy herein provided is irrepealable until the Certificate is paid, provided that at the time the City makes its annual tax levies, the City Finance Director may certify to the County Auditor of Washington County the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the County Auditor will thereupon reduce the levy collectible during such year by the amount so certified. 5.05. Count y Auditor's Certificate as to Registratio . The City Clerk is authorized and directed to file a certified copy of this resolution with the County Auditor of Washington County and to obtain the certificate required by Minnesota Statutes, Section 475.63. 536168v2 JSB LAS 15-53 6 Section 6. Tax Covenants. 6.01. General Tax Exemption Covenant. The City covenants and agrees with the holder from time to time of the Certificate 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 Certificate 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 Certificate, 6.02. Rebate. (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 Certificate 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 Certificate, and the rebate of excess investment earnings to the United States, if the Certificates (together with other obligations reasonably expected to be issued in calendar year 2018) 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 Certificate is issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section .148(f)(4)(D) of the Code. 6.03. Private Activity Bond Status. The City further covenants not to use the proceeds of the Certificate or the Equipment or to cause or permit them to be used, in such a manner as to cause the Certificate to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code, 6.04. Qualified Tax -Exempt Obligations. In order to qualify the Certificate as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Certificate is not a "private activity bonds" as defined in Section 141 of the Code; (b) the City hereby designates the Certificate as a "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (e) 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 2018 will not exceed $10,000,000; and 536168v2 JSB LA515-53 7 (d) not more than $10,000,000 of obligations issued by the City during calendar year 2018 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. Procedural Requirements. 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 7. Authentication ofTranscript. 7.01. Transcript. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Certificate, certified copies of proceedings and records of the City relating to the Certificate 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 Certificate and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein, 7.02. Certification as to No Official Statement. It is determined that no comprehensive Official Statement or offering material has been prepared or circulated by the City in connection with the sale of the Certificate and that the City is relying on the investment representation of the Purchaser in an investment letter of even date now on file with the City Clerk. Section 8. No Continuing Disclosure. Because the Certificate is in a principal amount less than $1,000,000, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Certificate. Section 9. Defeasance. When the Certificate and all interest thereon, has been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holder of the Certificate will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Certificate will remain in full force and effect. The City may discharge the Certificate which is due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If the Certificate should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sung sufficient for the payment thereof in fall with interest accrued to the date of such deposit. The motion for adoption was duly seconded by-Getn''-=Tubei P4&5 Y1 , and, upon vote being taken thereon, the following members voted in favor: and the following voted against: whereupon said resolution was declared duly passed and adopted. 536168v2 JSB ILA515-53 8 STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF LAKE ELMO 1, the undersigned, being the duly qualified and acting Clerk of the City of Lake Elmo, Washington County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a special meeting of the City Council held on Thursday, September 18, 2018, 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 a $940,000 General Obligation Equipment Certificate of Indebtedness, Series 2018A of the City, WITNESS My hand of the City this .%4`dayof St �A% 2018, -LW I Citerk Lake Elmo, Minnesota 536168v2 JSB LA515-53 No. R-1 $940,000 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF LAKE ELMO GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF INDEBTEDNESS, SERIES 2018A Interest MaturityDate of CUSIP RateOriginal Issue 2.70% February 1, 2028 October 15, 2018 Registered Owner: Lake Elmo Bank The City of Lake Elmo, Minnesota, a duly organized and existing municipal corporation in Washington County, Minnesota (the "City"), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner, or registered assigns, the principal sum of $940,000 on February 1 in the years and installment amounts as follows: Year Amount Year Amount 2020 $90,000 2026 $110,000 2021 $95,000 2027 $115,000 2022 $10%000 2028 $115,000 2023 $100,000 2024 $105,000 2025 $110,000 with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable February 1 and August l in each year, commencing August 1, 2019, to the person in whose name this Bond is registered at the close of business on the 15th day (whether or not a business day) of the immediately preceding month. The interest hereon and the principal installments hereof are payable in lawful money of the United States of America by check or draft by the City Clerk, as .Registrar, Authenticating Agent and Paying Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on any date to prepay all or a. portion of the principal amount of this Certificate. Redemption may be in whole or in part and if in part, at the option of the City and in A-1 such manner as the City will determine. Prepayments will be at a price of par plus accrued interest. This Certificate is in the aggregate principal amount of $940,000 issued pursuant to a resolution adopted by the City Council on September t8,20t8 (the "Resolution"), for the purpose of providing money to finance various items of capital equipment, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 475 and Section 412.301, and the principal hereof and interest hereon are payable from ad valorem taxes, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The fall faith and credit of the City are irrevocably pledged for payment of this Certificate and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property, which taxes may be levied without limitation as to rate or amount. As provided in the Resolution and subject to certain limitations set forth therein, this Certificate is transferable upon the books of the City at the principal office of the 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 Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for a Certificate of another authorized denomination. Upon such transfer or exchange the City will cause a new Certificate or Certificates 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 Council has designated this Certificate a "qualified tax exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), The City and the Registrar may deem and treat the person in whose name this Certificate is registered as the absolute owner hereof, whether this Certificate is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by 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 Certificate 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 Certificate does not cause the indebtedness of the City to exceed any constitutional, or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Lake Elmo, Washington County, Minnesota, by its City Council, has caused this Certificate to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Clerk and has caused this Certificate to be dated as of the date set forth below. A-2 Wated: , 201* (do not sign (do not sign City Clerk Mayor REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Certificate is registered in the register of the City Clerk, in the name of the person last listed below. Signature of Date of Registration ftgistered Owner city Clerk Lake Elmo Bank 2018 Federal ID: # A-3 1 *114 IV I I YEAR * TAX LEVY 2019 0 2020 128,995.65 2021 123,847.50 2022 126,404.25 2023 123,569.25 2024 125,984.25 2025 128,257.50 2026 125,139,00 2027 127,270.50 2028 124,010.25 * Year tax levy collected, w COUNTY AUDITOR'S CERTIFICATE AS TO TAX LEVY AND REGISTRATION L the undersigned County Auditor of Washington County, Minnesota, hereby certify that a resolution adopted by the City Council of the City of Lake Elmo, Minnesota, on September 18, 2018, levying taxes for the payment of a General Obligation Equipment Certificate of Indebtedness, Series 2018A, in the amount of $940,000, dated October 15, 2018, has been filed in my office and said obligation has been registered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this (SEAL) day of , 2018. County Auditor Washington County, Minnesota Deputy