HomeMy WebLinkAboutResolution 2005-074CITY OF LAKE ELMO
WASHINGTON COUNTY, MINNESOTA
RESOLUTION 2005 -074
RESOLUTION AUTHORIZING ISSUANCE; AWARDING THE SALE;
PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR.
THE PAYMENT OF $4,600,000 GENERAL OBLIGATION WATER
REVENUE BONDS, SERIES 2005A
BE IT RESOLVED by the City Council of the City of Lake Elmo, Minnesota (the
"City„), as follows:
SECTION 1. AUTHORIZATION AND SAYE OF BONDS.
1.01. Authorization. The City owns and operates a municipal water enterprise system,
(the "Utility "). This Council intends to construct public infrastructure improvements to the
Utility (collectively, the "Improvements "). This Council hereby determines that it is in the best
interests of the City to issue its $4,600,000 aggregate principal amount of General Obligation
Water Revenue Bonds, Series 2005A (the "Bonds ") to finance the cost of making the
Improvements pursuant to Minnesota Statutes, Section 444.075 and Chapter 475.
1.02. Sale. The City has retained Sound Capital Management, Inc. as independent
financial advisor in connection with the sale of the Bonds. Pursuant to Minnesota ,Statutes,
Section 475.60, subdivision 2, paragraph (9), the requirements as to public sale do not apply to
the issuance of the Bonds. The City has received an offer from Northland Securities, Inc., in
Minneapolis, Minnesota (the Purchaser) to purchase the Bonds at a price of $
plus accrued interest on all Bonds to the day of delivery and payment, on the further terms and
conditions hereinafter set forth. The offer is hereby accepted, and the Mayor and City
Administrator are hereby authorized and directed to execute a contract on the part of the City for
the sale of the Bonds with the Purchaser.
1.03. Performance of Requirements. The City is authorized by Minnesota Statutes,
Section 444.075, to issue and sell the Bonds to pay the costs of the Improvements, and to pledge
to the payment of the Bonds net revenues to be derived from charges for the service, use and
availability of the Utility. The City presently has outstanding obligations which constitute a lien
on the net revenues of the Utility and the pledge of net revenues of the Utility to pay the Bonds
should be on a parity with the pledge of net revenues of the Utility to pay such outstanding
bonds. All acts, conditions and things which are required by the Constitution and laws of the
State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the
valid issuance of the Bonds having been done, existing, having happened and having been
performed, it is now necessary for this Council to establish the form and terms of the Bonds, to
provide security therefor and to issue the Bonds forthwith.
CERTIFICATION OF MINUTES RELATING TO
$4,600,000 GENERAL OBLIGATION WATER
REVENUE BONDS, SERIES 2005A
Issuer: City of Lake Elmo, Minnesota
Governing Body: City Council
Kind, date, time and place of meeting: A regular meeting held on July 19, 2005, at 7:00 p.m.. at
the City Offices in Lake Elmo, Minnesota.
Members present: Mayor Johnston, Council Members Conlin DeLa
pp, Johnson, Smith
Members absent:
None
Documents Attached:
Minutes of said meeting (including):
RESOLUTION AUTHORIZING ISSUANCE; AWARDING- THE ,SALE;
PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR
THE PAYMENT OF $4,600,000 GENERAL OBLIGATION WATER
REVENUE BONDS, SERIES 2005A
I, the undersigned, being the duly qualified and acting recording officer of the public
corporation issuing the obligations referred to in the title of this certificate, certify that the
documents attached hereto, as described above, have been carefully compared with the original
records of the public corporation in my legal custody, from which they have been transcribed;
that the documents are a correct and complete transcript of the minutes of a meeting of the
governing body of the public corporation, and correct and complete copies of all resolutions and
other actions taken and of all documents approved by the governing body at the meeting, so far
as they relate to the obligations; and that the meeting was duly held by the governing body at the
time and place and was attended throughout by the members indicated above, pursuant to call
and notice of such meeting given as required by law.
WITNESS my hand officially as such recording officer on July 19, 2005.
SECTION 2. BONE} TERMS, EXECUTION AND DELIVERY.
2.01. Maturities Interest Rates Denominations and Pa ment. The Bonds shall be
originally dated as of August 1, 2005, shall be in the denomination of $5,000 each, or any
integral multiple thereof, of single .maturities, shall mature on December I in the years and
amounts stated below, and shall bear interest from date of issue until paid at the annual rates set
forth opposite such years and amounts, as follows:
Year
Amount Rate
Year
Amount Rate
2006
$175,000 %
2019
$175,000 %
2007
175,000
2020
175,000
2008
50,000
2021
175,000
2013
125,000
2022
250,000
20I4
150,000
2023
275,000
2015
150,000
2024
275,000
2016
150,000
2025
300,000
2017
150,000
2026
300,000
2018
175,000
2027
325,000
2028
350,000
[REVISE MATURITY SCHDULE
FOR ANY TERM BONDS]
For purposes of complying with the provisions of Minnesota Statutes, Section 475.54.
subdivision 1, the maturity schedule for the Bonds shall be combined with the maturity schedules
for the City's outstanding Bonds.
The Bonds shall be issuable only in fully registered form, of single maturities. The
interest thereon and, upon surrender of each Bond at the principal office of the Registrar
described herein, the principal amount thereof, shall be payable by check or draft issued by the
Registrar. Each Bond shall be dated by the Registrar as of the date of its authentication.
2.02. Interest Payment Dates. Interest on the Bonds shall be payable on .tune I and
December 1 in each year, commencing June 1, 2006, to the owners thereof as such appear of
record in the bond register as of the close of business on the fifteenth day of the immediately
preceding month, whether or not such day is a business day.
2.03. Registration. The City shall appoint, and shall maintain, a bond registrar, transfer
agent and paying agent (the Registrar). The effect of registration and the rights and duties of the
City and the Registrar with respect thereto shall be as follows:
(a) Re ister. The Registrar shall keep at its principal office a bond register in
which the Registrar shall provide for the registration of ownership of Bonds and the
registration of transfers and exchanges of Bonds entitled to be registered, transferred or
exchanged.
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(b) Transfer of Bonds. Upon surrender to the Registrar for transfer of any
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 shall 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 such interest payment date.
(c) Exchange of Bonds. Whenever any Bond is surrendered by the registered
owner for exchange, the Registrar shall authenticate and deliver one or more new Bonds
of a like aggregate principal amount, interest rate and maturity, as requested by the
registered owner or the owner's attorney duly authorized in writing.
(d) Cancellation. All Bonds surrendered upon any transfer or exchange shall
be promptly cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improver or Unauthorized Transfer. When any Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Bond or separate instrument of transfer is valid and genuine and
that the requested transfer is legally authorized. The Registrar shall incur no liability for
its 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 any Bond is at any time registered in the bond register as the absolute
owner of such Bond, whether such Bond shall be overdue or not, for the purpose of
receiving payment of, or on account of, the principal of and interest on such Bond and for
all other purposes, and all such payments so made to any such registered owner or upon
the owner's order shall be valid and effectual to satisfy and discharge the liability of the
City upon such Bond to the extent of the sum or sums so paid.
(g) Taxes Pees and Charges. For every transfer or exchange of Bonds
(except for an exchange upon a partial redemption of a Bond), the Registrar may impose
a charge upon the owner thereof 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 Bonds. In case any Bond shall
become mutilated or be lost, stolen or destroyed, the Registrar shall deliver a new Bond
of like amount, number, interest rate, maturity date and tenor in exchange and
substitution for and upon cancellation of any such mutilated Bond or in lieu of and in
substitution for any such Bond lost, stolen or destroyed, upon the payment of the
reasonable expenses and charges of the Registrar in connection therewith; and, in the case
of a Bond lost, stolen or destroyed, upon receipt by the Registrar of evidence satisfactory
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to it that such Bond was lost, stolen or destroyed, and of the ownership thereof, and upon
receipt by the Registrar of an appropriate bond or indemnity in form, substance and
amount satisfactory to it, in which both the City and the Registrar shall be named as
obligees. All Bonds so surrendered to the Registrar shall be cancelled by it and evidence
of such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed
Bond has already matured or been called for redemption in accordance with its terms, it
shall not be necessary to issue a new Bond prior to payment.
(i) Authenticating _Age nt. The Registrar is hereby designated authenticating
agent for the Bonds, within the meaning of Minnesota Statutes, Section 475.55,
Subdivision 1.
2.04_ Appointment of Initial Registrar. The City hereby appoints Northland Trust
Services, Inc., in Minneapolis, Minnesota, as the initial bond registrar, transfer agent and paying
agent (the Registrar). The Mayor and City Administrator are authorized to execute and deliver,
OD 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, such corporation shall be 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 any Registrar upon
thirty (30) days' notice and upon the appointment of a successor Registrar, in which event the
predecessor Registrar shall deliver all cash and Bonds in its possession to the successor
Registrar. On or before each principal or interest due date, without further order of this Council,
the City Administrator shall transmit to the Registrar from the 2005 Utility Bond Fund described
in Section 3 hereof, moneys sufficient for the payment of all principal and interest then due.
2.05. Redemption. Bonds maturing in 2014 and later years are each subject to
redemption, at the option of the City and in whole or in part, and if in part, in the maturities
selected by the City and, within any maturity, in $5,000 principal amounts selected by the
Registrar by lot, on or after December 1, 2013 and on any interest payment date thereafter, at a
redemption price equal to the principal amount thereof to be redeemed plus accrued interest to
the date of redemption. At least thirty days prior to the date set for redemption of any Bond, the
City shall cause notice of the call for redemption to be mailed to the Registrar and to the
registered owner of each Bond to be redeemed, but no defect in or failure to give such mailed
notice of redemption shall affect the validity of proceedings for the redemption of any Bond not
affected by such defect or failure. The notice of redemption shall specify the redemption date,
redemption price, the numbers, interest rates and CUSIP numbers of the Bonds to be redeemed
and the place at which the Bonds are to be surrendered for payment, which is the principal office
of the Registrar. Official notice of redemption having been given as aforesaid, the Bonds or
portions thereof so to be redeemed shall, on the redemption date, become due and payable at the
redemption price therein specified and from and after such date (unless the City shalt default in
the payment of the redemption price) such Bonds or portions thereof shall cease to bear interest.
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[Bonds maturing December 1, I and shall be subject to mandatory
redemption prior to maturity pursuant to the sinking fund requirements of this Section 2.05 at a
redemption price equal to the stated principal amount thereof plus interest accrued thereon to the
redemption date, without premium. The Registrar shall select for redemption, by lot or other
manner deemed fair, on December 1 in each of the following years the following stated principal
amounts of such Bonds:
Year Principal Amount
The remaining $ stated principal amount of such .Bonds shall be paid at maturity on
December 1,
Year Principal Amount
The remaining $ stated principal amount of such Bonds shall be paid at maturity on
December 1,
Notice of redemption shall be given as provided in the preceding paragraph.]
2.06. Preparation and Delivery. The Bonds shall be prepared under the direction of the
City Administrator and shall be executed on behalf of the City by the signatures of the Mayor
and the City Administrator, provided that said signatures may be printed, engraved, or
lithographed facsimiles thereof in case any officer whose signature, or a facsimile of whose
signature, shall appear on the Bonds shall cease to be such officer before the delivery of any
Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the
same as if such officer had remained in office until delivery. Notwithstanding such execution,
no Bond shall 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 such 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 shall be conclusive evidence that it has been
authenticated and delivered under this Resolution. When the Bonds have been so executed and
authenticated, they shall be delivered to DTC on behalf the Purchaser upon payment of the
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purchase price in accordance with the contract of sale heretofore made and executed, and the
Purchaser shall not be obligated to see to the application of the purchase price.
2.07. Securities Depository. (a) For purposes of this Section the following terms shall
have the following meanings:
"Beneficial Owner" shall mean, whenever used with respect to a Bond, the person in
whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the
records of such Participant, or such person's subrogee.
"Cede & Co." shall mean Cede & Co., the nominee of DTC, and any successor nominee
of DTC with respect to the Bonds.
"DTC" shall mean The Depository Trust Company of New York, New York.
"Participant" shall mean any broker- dealer, bank or other financial institution for which
DTC holds Bonds as securities depository.
"Representation Letter" shall mean the Representation Letter from the City to DTC.
(b) The, Bonds shall be initially issued as separately authenticated fully
registered bonds, and one Bond shall be issued in the principal amount of each stated
maturity of the Bonds. Upon initial issuance, the ownership of such Bonds shall be
registered in the bond register in the name of Cede & Co., as nominee of DTC. The
Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of
the Bonds registered in its name for the purposes of payment of the principal of or
interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any,
giving any notice permitted or required to be given to registered owners of Bonds under
this resolution, registering the transfer of Bonds, and for all other purposes whatsoever;
and neither the Registrar nor the City shall be affected by any notice to the contrary.
Neither the Registrar nor the City shall have any responsibility or obligation to any
Participant, any person claiming a beneficial ownership interest in the Bonds under or
through DTC or any Participant, or any other person which is not shown on the bond
register as being a registered owner of any Bonds, with respect to the accuracy of any
records maintained by DTC or any Participant, with respect to the payment by DTC or
any Participant of any amount with respect to the principal of or interest on the Bonds,
with respect to any notice which is permitted or required to be given to owners of Bonds
under this resolution, with respect to the selection by DTC or any Participant of any
person to receive payment in the event of a partial redemption of the Bonds, or with
respect to any consent given or other action taken by DTC as registered owner of the
Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of
DTC, the Registrar shall pay all principal of and interest on such Bond, and shall give all
notices with respect to such Bond, only to Cede & Co. in accordance with the
Representation Letter, and all such payments shall be valid and effective to fully satisfy
and discharge the City's obligations with respect to the principal of and interest on the
Bonds to the extent of the sum or sums so paid. No person other than DTC shall receive
an authenticated Bond for each separate stated maturity evidencing the obligation of the
City to make payments of principal and interest. Upon delivery by DTC to the Registrar
of written notice to the effect that DTC has determined to substitute a new nominee in
place of Cede & Co., the Bonds will be transferable to such new nominee in accordance
with paragraph (d) hereof.
(c) In the event the City determines that it is in the best interest of the
Beneficial Owners that they be able to obtain Bonds in the form of bond certificates, the
City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of
the availability through DTC of Bonds in the form of certificates. In such event, the
Bonds will be transferable in accordance with paragraph (d) hereof. DTC may determine
to discontinue providing its services with respect to the Bonds at any time by giving
notice to the City and the Registrar and discharging its responsibilities with respect
thereto under applicable law. In such event the Bonds will be transferable in accordance
with paragraph (d) hereof.
(d) In the event that any transfer or exchange of Bonds is permitted under
paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt
by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments
of transfer to the permitted transferee in accordance with the provisions of this resolution.
In the event Bonds in the form of certificates are issued to owners other than Cede & Co-
its successor as nominee for DTC as owner of all the Bonds, or another securities
depository as owner of all the Bonds, the provisions of this resolution_ shall also apply to
all matters relating thereto, including, without limitation, the printing of such Bonds in
the form of bond certificates and the method of payment of principal of and interest on
such Bonds in the form of bond certificates.
108. form of Bonds. The Bonds shall be prepared in substantially the following form:
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No. R-
UNITED STATES OF AMERICA
STATE OF MINNESOTA
CITY OF LAKE ELMO
GENERAL OBLIGATION WATER REVENUE BOND, SERIES 2005A
Date of
Interest Rate Maturi Original Issue CUSIP
December 1, August 1, 2005
REGISTERED OWNER:
PRINCIPAL AMOUNT: THOUSAND DOLLARS
THE CITY OF LAKE ELMO, Minnesota (the "City "), acknowledges itself to be
indebted and, for value received, hereby promises to pay to the registered owner named above, or
registered assigns, the principal amount specified above, on the maturity date specified above,
with interest thereon from the date of original issue specified above, or from the most recent
interest payment date to which interest has been paid or duly provided for, at the annual rate
specified above. Interest hereon is payable on June 1 and December I in each year, commencing
June I, 2006, 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, all subject to the
provisions referred to herein with respect to the redemption of the principal of this Bond before
maturity. The interest hereon and, upon presentation and surrender hereof, the principal hereof,
are payable in lawful money of the Llnited States of America by check or draft of Northland
Tryst Services, Inc., Minneapolis, Minnesota, as Bond Registrar, Transfer Agent and raying
Agent (the "Bond Registrar "), or its successor designated -under the Resolution described herein.
This Bond is one of an issue in the aggregate principal amount of $4,600,000 (the
"Bonds ") all of like date and tenor except as to serial number, interest rate, redemption privilege
and maturity date, issued pursuant to a resolution adopted by the City Council on July 19, 2005
(the "Resolution"), for the purpose of financing the costs of improvements to the water enterprise
system of the City, and is issued pursuant to and in full conformity with the provisions of the
Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota
Statutes, Sections 444.075 and Chapter 475. For the full and prompt payment of the principal
and interest on the Fonds as the same become due, the full faith, credit and taxing power of the
City have been and are hereby irrevocably pledged. The Bonds are issuable only as fully
registered bonds in denominations of $5,000 or any multiple thereof, of single maturities.
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Bonds maturing in 2014 and later years are each subject to redemption and prepayment,
at the option of the City and in whole or in part, and in the maturities selected by the City and by
lot, assigned in proportion to their principal amount, within any maturity, on December 1, 2013
and on any date thereafter, at a price equal to the principal amount thereof to be redeemed plus
accrued interest to the date of redemption. At least thirty days prior to the date set for
redemption of any Bond, notice of the call for redemption will be mailed to the Bond Registrar
and to the registered owner of each Bond to be redeemed at his address appearing in the Bond
Register, but no defect in or failure to give such mailed notice of redemption shall affect the
validity of the proceedings for the redemption of any Bond not affected by such defect or failure.
Official notice of redemption having been given as aforesaid, the Bonds or portions of the Bonds
so to be redeemed shall, on the redemption date, become due and payable at the redemption price
herein specified and from and after such date (unless the City shall default in the payment of the
redemption price) such Bond or portions of Bonds shall cease to bear interest. Upon the partial
redemption of any Bond, a new Bond or Bonds will be delivered to the registered owner without
charge, representing the remaining principal amount outstanding.
[Bonds maturing in the years and shall be subject to mandatory redemption,
at a redemption price equal to their principal amount plus interest accrued thereon to the
redemption date, without premium, on December 1 in each of the years shown below, in an
amount equal to the following principal amounts:
Term Bonds Maturing in 20
Sinking Fund aggregate
Payment Date Principal Amount
Term Bonds Maturing in 20
Sinking Flynd Aggregate
Payment Date Principal Amount
Notice of redemption shall be given as provided in the preceding paragraph.]
The Bonds have been designated by the City as `'qualified tax - exempt obligations"
pursuant to Section 265(b) of the Internal Revenue Code of 1986, as amended.
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 his attorney duly authorized in writing upon
surrender hereof together with a written instruinent of transfer satisfactory to the Bond Registrar,
duly executed by the registered owner or his 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.
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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 shall
be affected by any notice to the contrary.
Notwithstanding any other provisions of this Bond, so long as this Bond is registered in
the name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any
other nominee of The Depository Trust Company or other securities depository, the Registrar
shall pay all principal of and interest on this Bond, and shall give all notices with respect to this
Bond, only to Cede & Co. or other nominee in accordance with the operational arrangements of
The Depository Trust Company or other securities depository as agreed to by the City.
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 precedent to and in the issuance of this Bond in order to
make this Bond a valid and bidding general obligation of the City according to its terms, have
been done, do exist, have happened and have been performed in regular and due form as so
required; that in and by the Resolution, the City has pledged to the payment of the principal of
and interest on the Bonds net revenues of the water enterprise system of the City; that in and by
the Resolution, the City has covenanted and agreed with the owner of the Bonds that it will
impose and collect charges for the service, use and availability of its water enterprise system at
the time and in the amounts required to produce net revenues adequate to pay all principal of and
interest on the Bonds and on all other bonds payable from net revenues of the water enterprise
system as such principal and interest respectively become due; that if needed to pay the principal
and interest on this Bond, ad valorem taxes will be levied upon all taxable property in the City
without limitation as to rate or amount; and that the issuance of this Bond does not cause the
indebtedness of the City to exceed any constitutional or statutory limitation.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Resolution until the Certificate of Authentication hereon shall have
been executed by the Bond Registrar by the manual signature of a person authorized to sign on
its behalf.
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IN WITNESS WHEREOF, the City of Lake Elmo, Minnesota, by its City Council., has
caused this Bond to be executed by the signatures of the Mayor and the City Administrator.
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CITY OF LAKE ELMO,
MINNESOTA
Mayor --
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
Date of Authentication:
NORTHLAND TRUST SERVICES, INC.,
as Bond Registrar
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, shall
be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common UTMA ............as Custodian for ..............
(Cost) (Minor)
TEN ENT -- as tenants by entireties under Uniform Transfers to Minors Act .........
(State)
JT TEN -- as joint tenants with right of survivorship and not as tenants in common
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 hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books Dept for registration
thereof, 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 enlargement or any change whatsoever.
Signature Guaranteed:
Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements
of the Registrar, which requirements include membership or participation in STAMP or such
other "signature guaranty program" as may be deten-nined by the Registrar in addition to or in
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substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
[end of bond form]
SECTION 3. USE OF PROCEEDS- SECURITY PROVISIONS
3.01. Use of Proceeds. Bond proceeds in the amount set forth in Section 3.02 hereof
are appropriated to the Construction Fund created therein. Any amounts received from the
Purchaser remaining after such amounts have been appropriated are hereby appropriated to the
Bond Fund created in Section 3.03 hereof.
3.02. 2005 Utility Construction Fund. There is hereby created a special bookkeeping
fiord to be designated as the "2005 Utility Construction Fund" (the "Construction Fund "), to be
held and administered by the City Administrator separate and apart from all other funds of the
City. The City appropriates to the Construction Fund $4,520,000 of the proceeds of the sale of
the Bonds. The Construction Fund shall be used solely to defray expenses of the Improvements,
including but not limited to the transfer to the Bond Fund, created in Section 3.03 hereof of
amounts sufficient for the payment of interest due upon the Bonds prior to the completion of the
Improvements and the payment of the expenses incurred by the City in connection with the
issuance of the Bonds. Upon completion and payment of all costs of the Improvements, any
balance of the proceeds of Bonds remaining in the Construction Fund may be. used to pay the
cost, in whole or in part, of any other improvements to the Utility, as directed by the City
Council, but any balance of such proceeds not so used shall be credited and paid to the Bond
Fund,
3.03. 2005 Utility Bond Fund. So long as any of the Bonds are outstanding and any
principal of or interest thereon unpaid, the City Administrator shall maintain on its books and
records a separate and special bookkeeping fund designated "2005 Utility Bond Fund" (the
"Bond Fund ") to be used for no purpose other than the payment of the principal of and interest
on the Bonds and any additional obligations of the City payable therefrom pursuant to
Section 3.04 hereof. If the balance in the Bond Fund is ever insufficient to pay all principal and
interest then due on bonds payable therefrom, the City Administrator shall nevertheless provide
sufficient money from any other funds of the City which are available for that purpose, and such
other funds shall be reimbursed from subsequent receipts of net revenues of the Utility
appropriated to the Bond Fund and, if necessary, from the proceeds of the taxes levied for the
Bond Fund. The City hereby appropriates to the Bond Fund the amounts required by Section
3.02 to be credited to the Bond Fund. The City Administrator shall deposit in the Bond Fund the
proceeds of all taxes levied and all other money which may at any time be received for or
appropriated to the payment of such bonds and interest, including the net revenues of the Utility
herein pledged and appropriated to the Bond Fund, all collections of any ad valorem taxes levied
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for the payment of the Bonds, and all other moneys received for or appropriated to the payment
of the Bonds and interest thereon.
There are hereby established two accounts in the Bond Fund, designated as the "Debt
Service Account" and the "Surplus Account." All money appropriated or to be deposited in the
Bond Fund shall be deposited as received into the Debt Service Account. On each December 1,
the City Administrator shall determine the amount on hand in the Debt Service Account. If such
amount is in excess of one - twelfth of the debt service payable from the Bond Fund in the
immediately preceding 12 months, the City Administrator shall promptly transfer the amount in
excess to the Surplus Account. The City appropriates to the Surplus Account any amounts to be
transferred thereto from the Debt Service Account as herein provided and all income derived
from the investment of amounts on hand in the Surplus Account. If at any time the amount on
hand in the Debt Service Account is insufficient to meet the requirements of the Bond Fund, the
City Administrator shall transfer to the Debt Service Account amounts on hand in the Surplus
Account to the extent necessary to cure such deficiency.
3.04. Imposition of Charges, Additional Bonds. The City hereby covenants and agrees
with the holders from time to time of the Bonds that so long as any of the Bonds are outstanding,
the City will impose and collect reasonable charges for the service, use and availability of the
Utility to the City and its inhabitants according to schedules calculated to produce net revenues
which will be sufficient to pay all principal and interest when due on the Bonds and all other
obligations payable from the net revenues of the Utility. Net revenues of the Utility, to the
extent necessary, are hereby irrevocably pledged and appropriated to the payment of the
principal of the Bonds and interest thereon; provided that nothing herein shall preclude the City
from hereafter making further pledges and appropriations of net revenues of the Utility for the
payment of additional obligations of the City hereafter authorized if the City Council determines
before the authorization of such additional obligations that the estimated net revenues of the
Utility will be sufficient, together with any other sources pledged to or projected to be used, for
the payment of the principal of and interest on the Bonds and paid therefrom and such additional
obligations. Such further pledges and appropriations of said net revenues may be made superior
or subordinate to or on a parity with the pledge and appropriation herein made, as to the
application of net revenues received from time to time.
3.05. Full Faith and Credit Pledged. The full faith and credit of the City are irrevocably
pledged for the prompt and full payment of the principal of and the interest on the Bonds and any
other obligations payable from the Bond Fund, as such principal and interest comes due. If the
money on hand in the Bond Fund should at any time be insufficient for the payment of principal
and 'interest then due, the City shall pay the principal and interest out of any fund of the City, and
such other fund or funds shall be reimbursed therefor when sufficient money is available to the
Bond Fluid. If on December I in any year the sum of the balance in the Bond Fund plus the
available net revenues of the Utility on hand and estimated to be received or before the end of the
following calendar year is not sufficient with any ad valorem taxes heretofore levied in
accordance with the provisions of this resolution, to pay when due all principal and interest
become daze on all Bonds payable therefrom in said following calendar year, or the Bond Fund
has incurred a deficiency in the manner provided in this Section 3.05, a direct, irrepealable, ad
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valorem tax shall be levied on all taxable property within the corporate limits of the City for the
purpose of restoring such accumulated or anticipated deficiency in an amount at least 5% in
excess of amount needed to make good the deficiency.
SECTION 4. DEFEASANCE. When any Bond has been discharged as provided in this
Section 4, all pledges, covenants and other rights granted by this resolution to the holders of such
Bonds shall cease, and such Bonds shall no longer be deemed outstanding under this Resolution.
The City may discharge its obligations with respect to any Bond which is due on any date by
irrevocably depositing with the Registrar on or before that date a sum sufficient for the payment
thereof in full; or, if any Bond should not be paid when due, the City may nevertheless discharge
its obligations with respect thereto by depositing with the Registrar a sum sufficient for the
payment thereof in full with interest accrued to the date of such deposit. The City may also
discharge its obligations with respect to any prepayable Bond called for redemption on any date
when it is prepayable according to their terms, by depositing with the Registrar on or before that
date a sum sufficient for the payment thereof in full; provided that notice of the redemption
thereof has been duly given as provided in Section 2.05. The City may also at any time
discharge its obligations with respect to any Bonds, subject to the provisions of law now or
hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a
bank qualified by law as an escrow agent for this purpose, cash or securities which are
authorized by law to be so deposited, bearing interest payable at such times and at such rates and
maturing on such dates as shall be required, without reinvestment, to pay all principal and
interest to become due thereon to maturity or, if notice of redemption as herein required has been
duly provided for, to such earlier redemption date.
SECTION 5. COUNTY AUDITOR REGISTRATION CERTIFICATION OF PROCEEDINGS
ARBITRAGE QUALIFIED TAX EXEMPT OBLIGATIONS AND OFFICIAL STATEMENT.
5.01. County Auditor Registration.. The City Administrator is hereby authorized and
directed to file a certified copy of this Resolution with the County Auditor of Washington
County, together with such other information as the County Auditor shall require, and to obtain
from said County Auditor a certificate that the Bonds have been entered on the Auditor's bond
register and the taxes levied as required by law.
5.02. Certification of Proceedings. The officers of the City and the County Auditor of
Washington County are hereby authorized and directed to prepare and furnish to the Purchaser
and to Dorsey & Whitney LLP, Bond Counsel to the City, certified copies of all proceedings and
records of the City, and such other affidavits, certificates and information as may be required to
show the facts relating to the legality and marketability of the Bonds as the same appear from the
books and records under their custody and control or as otherwise known to them, and all such
certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed
representations of the City as to the facts recited therein.
5.03. Covenant. 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 includable in gross income
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for purposes of income taxation under the Internal Revenue Code of 1986, as amended (the
Code), and Regulations promulgated thereunder (the Regulations), and covenants to take any and
all actions within its powers to ensure that the interest on the Bonds will not become subject to
taxation under such Code and Regulations. The Improvements are public improvements
available for use by members of the general public on a substantially equal basis. The City will
not enter into any lease, use agreement or other contract respecting the Improvements which
would cause the Bonds to be considered "private activity bonds" or "private loan bonds"
pursuant to Section 141 of the Code.
5.04. Arbitrage Rebate Exemption. For purposes of complying with the requirements
of Section 148(f)(4)(C) of the Code relating to the exemption of certain small governmental units
from the rebate requirements of the Code, the City represents that:
(i) the City is a governmental unit with general taxing powers;
(ii) the Bonds are not "private activity bonds" as defined in Section 141 of the
Code (Private Activity Bonds);
(iii) ninety -five percent of the net proceeds of the Bonds are to be used for the
local governmental purposes of the City; and
(iv) the aggregate face amount of all tax - exempt bonds (other than Private
Activity Bonds) issued by the City in the calendar year in which the Bonds
are to be issued is not reasonably expected to exceed $5,000,000.
Therefore, pursuant to the provisions of Section 148(f)(4)(c) of the Code, the City shall not be
required to comply with the arbitrage rebate requirements of paragraphs (2) and (3) of
Section 148(f) of the Code.
If notwithstanding the provisions of the immediately preceding paragraph, the arbitrage
rebate provisions of Section 148(f) of the Code apply to the Bonds, the City hereby covenants
and agrees to make the determinations, retain records and rebate to the United States the amounts
at the times and in the manner required by said Section 148(f) and applicable Regulations.
5.05. Arbitrage Certification. The Mayor and the City Administrator, being the officers
of the City charged with the responsibility for issuing the Bonds pursuant to this resolution, are
authorized and directed to execute and deliver to the Purchaser a certification in accordance with
the provisions of Section 148 of the Code, and Section 1.148- 2(b)(2) of the Regulations, stating
the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds
which make it reasonable to expect that the proceeds of the Bonds will not be used in a manner
that would cause the Bonds to be arbitrage bonds within the meaning of the Code and
Regulations.
5.06. Qualified Tax-Exempt Obligations. The City hereby designates the Bonds as
"qualified tax - exempt obligations" for purpose of Section 265(b) of the Code relating to the
disallowance of interest expenses for financial institutions. The City represents that in calendar
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year 2005 it does not reasonably expect to issue tax - exempt obligations which are not private
activity bonds (not treating qualified 501(c)(3) bonds under Section 145 of the Code as private
activity bonds for purposes of this representation) in an amount in excess of $10,000,000.
5.07. Official Statement. The Official Statement relating to the Bonds, dated July ,
2005, prepared and distributed on behalf of the City by Northland Securities, Inc., is hereby
approved. The officers of the City are hereby authorized and directed to execute such certificates
as may be appropriate concerning the accuracy, completeness and sufficiency of the Official
Statement.
5.09. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public
availability of certain information relating to the Bonds and the security therefor and to permit
the Purchaser and other participating underwriters in the primary offering of the Bonds to
comply with amendments to Rule 15c2 -12 promulgated by the SEC under the Securities
Exchange Act of 1934 (17 C.F.R. § 240.15c2 -12), relating to continuing disclosure (as in effect
and interpreted from time to time, the Rule), which will enhance the marketability of the Bonds,
the City hereby makes the following covenants and agreements for the benefit of the Owners (as
hereinafter defined) from time to time of the Outstanding Bonds. The City is the only obligated
person in respect of the Bonds within the meaning of the Rule for purposes of identifying the
entities in respect of which continuing disclosure must be made. The City has complied in all
material respects with any undertaking previously entered into by it under the Rule. If the City
fails to comply with any provisions of this section, any person. aggrieved thereby, including the
Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear
necessary or appropriate to enforce performance and observance of any agreement or covenant
contained in this section, including an action for a writ of mandamus or specific performance.
Direct, indirect, consequential and punitive damages shall not be recoverable for any default
hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained
herein, in no event shall a default under this section constitute a default under the Bonds or under
any other provision of this resolution. As used in this section, Owner or Bondowner means, in
respect of a Bond, the registered owner or owners thereof appearing in the bond register
maintained by the Registrar or any Beneficial Owner (as hereinafter defined) thereof, if such
Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and
substance reasonably satisfactory to the Registrar. As used herein, Beneficial Owner means, in
respect of a Bond, any person or entity which (i) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, such Bond (including persons or entities
holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the
owner of the Bond for federal income tax purposes.
(b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection
(c) hereof, either directly or indirectly through an agent designated by the City, the following
information at the following times:
(1) on or before 365 days after the end of each fiscal year of the City, commencing with
the fiseaI year ending December 31, 2004, the following financial information and
operating data in respect of the City (the Disclosure Information):
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(Al the audited financial statements of the City for such fiscal year, containing
balance sheets as of the end of such fiscal year and a statement of operations,
changes in fund balances and cash flows for the fiscal year then ended, showing
in comparative form such figures for the'preceding fiscal year of the City,
prepared in accordance with generally accepted accounting principles
promulgated by the Financial Accounting Standards Board as modified in
accordance with the governmental accounting standards promulgated by the
Governmental Accounting Standards Board or as otherwise provided under
Minnesota law, as in effect from time to time, or, if and to the extent such
financial statements have not been prepared in accordance with such generally
accepted accounting principles for reasons beyond the reasonable control of the
City, noting the discrepancies therefrom and the effect thereof, and certified as
to accuracy and completeness in all material respects by the fiscal officer of the
City; and
(B) to the extent not included in the financial statements referred to in paragraph (A)
hereof, an update of the operating and financial data of the type of information
contained in the Official Statement under the captions ECONOMIC AND
FINANCIAL INFORMATION; SUMMARY OF DEBT AND DEBT
STATISTICS; GENERAL INFORMATION- "Major Employers" and
"Building Permits."
Notwithstanding the foregoing paragraph, if the audited financial statements are not available by
the date specified, the City shall provide on or before such date unaudited financial statements in
the format required for the audited financial statements as part of the Disclosure Information and,
within 10 days after the receipt thereof, the City shall provide the audited financial statements.
Any or all of the Disclosure information may be incorporated by reference, if it is updated as
required hereby, from other docurnents, including official statements, which have been submitted
to each of the repositories hereinafter referred to under subsection (c) or the SEC. If the
document incorporated by reference is a final official statement, it must be available from the
Municipal Securities R.ulemaking Board. The City shall clearly identify in the Disclosure
Information each document so incorporated by reference. If any part of the Disclosure
Information can no longer be generated because the operations of the City have materially
changed or been discontinued, such Disclosure Information need no longer be provided if the
City includes in the Disclosure Information a statement to such effect; provided, however, if such
operations have been replaced by other City operations in respect of which data is not included in
the Disclosure Information and the City determines that certain specified data regarding such
replacement operations would be a Material Fact (as defined in paragraph (2) hereof), then, from
and after such determination, the Disclosure Information shall include such additional specified
data regarding the replacement operations. If the Disclosure Information is changed or this
section is amended as permitted by this paragraph (b)(1) or subsection (d), then the City shall
include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an
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explanation of the reasons for the amendment and the effect of any change in the type of
financial information or operating data provided.
(2) In a timely manner, notice of the occurrence of any of the following events which is
a Material Fact (as hereinafter defined):
(A) Principal and interest payment delinquencies;
(B) Non - payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax - exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the securities;
and
(K) Rating changes.
As used herein, a Material Fact is a fact as to which a substantial likelihood exists that a
reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a
Bond or, if not disclosed, would significantly alter the total information otherwise available to an
investor from the Official Statement, information disclosed hereunder or information generally
available to the public. Notwithstanding the :foregoing sentence, a Material Fact is also an event
that would be deemed material for purposes of the purchase, holding or sale of a Bond within the
meaning of applicable federal securities laws, as interpreted at the time of discovery of the
occurrence of the event.
(3) In a timely manner, notice of the occurrence of any of the following events or
conditions.
(A) the failure of the City to provide the Disclosure Information required under
paragraph (b)(1) at the time specified thereunder;
(B) the amendment or supplementing of this section pursuant to subsection (d),
together with a copy of such amendment or supplement and any explanation
provided by the City under subsection (d)(2);
(C) the termination of the obligations of the City under this section pursuant to
subsection (d);
(D) any change in the accounting principles pursuant to which the financial
statements constituting a portion of the Disclosure Information are prepared;
and
(E) any change in the fiscal year of the City.
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(c) Manner of Disclosure. The City agrees to make available the information described in
subsection (b) to the following entities by teiecopy, overnight delivery, mail or other means, as
appropriate:
(1) the information described in paragraph (1) of subsection (b), to each then nationally
recognized municipal securities information repository under the Rule and to any
state information depository then designated or operated by the State of Minnesota
as contemplated by the Rule (the State Depository), if any;
(2) the information described in paragraphs (2) and (3) of subsection (b), to the
Municipal Securities Rulemaking Board and to the State Depository, if any; and
(3) the information described in subsection (b), to any rating agency then maintaining a
rating of the Bonds at the request of the City and, at the expense of such Bondowner,
to any Bondowner who requests in writing such information, at the time of
transmission under paragraphs (1) or (2) of this subsection (c), as the case may be,
or, if such information is transmitted with a subsequent time of release, at the time
such information is to be released.
(d) Term; Amendments; Interpretation.
(1) The covenants of the City in this section shall remain in effect so long as any Bonds
are Outstanding. Notwithstanding the preceding sentence, however, the obligations
of the City under this section shall terminate and be without further effect as of any
date on which the City delivers to the Registrar an opinion of Bond Counsel to the
effect that, because of legislative action or final judicial or administrative actions or
proceedings, the failure of the City to comply with the requirements of this section
will not cause participating underwriters in the primary offering of the Bonds to be
in violation of the Rule or other applicable requirements of the Securities Exchange
Act of 1934, as amended, or any statutes or laws successory thereto or amendatory
thereof.
(2) This section (and the form and requirements of the Disclosure Information) may be
amended or supplemented by the City from time to time, without notice to (except as
provided in paragraph (c)(3) hereof) or the consent of the Owners of any Bonds, by a
resolution of this Council filed in the office of the recording officer of the City
accompanied by an opinion of Bond Counsel, who may rely on certificates of the
City and others and the opinion may be subject to customary qualifications, to the
effect that: (i) such amendment or supplement (a) is made in connection with a
change in circumstances that arises from a change in law or regulation or a change in
the identity, nature or status of the City or the type of operations conducted by the
City, or (b) is required by, or better complies with, the provisions of paragraph (b)(5)
of the Rule; (ii) this section as so amended or supplemented would have complied
with the requirements of paragraph (b)(5) of the Rule at the time of the primary
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offering of the Bonds, giving effect to any change in circumstances applicable under
clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the
amendment or supplement was in effect at the time of the primary offering; and (iii)
such amendment or supplement does not materially impair the interests of the
Bondowners under the Rule.
If the Disclosure Information is so amended, the City agrees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the
reasons for the amendment and the effect, if any, of the change in the type of
financial information or operating data being provided hereunder.
(3) This section is entered into to comply with the continuing disclosure provisions of
the Rule and should be construed so as to satisfy the requirements of paragraph
(b)(5) of the Rule.
I.Tpon vote being taken thereon the following voted in favor thereof:
Mayor Dean Johnston Council Members; Conlin.
DeLapp
and the following voted against the same; Johnson
Smith
whereupon the resolution was declared duly passed and adopted.
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