HomeMy WebLinkAboutResolution 2006-015resolution 2006-015
Municipality: The City of Lake Elmo, Minnesota
Governing Body: City Council
Meeting: A meeting of the City Council of the City of Lake Elmo was held
on the 7th day of February, 2006, at 7:00 p.m. at the City offices,
3800 Laverne Ave. N., Lake Elmo, Minnesota.
Members present:
Members absent:
Documents: Resolution No. 06 - Authorizing Issuance, Awarding sale,
Prescribing the Form and Details and Providing for the Payment of
$443,000 General Obligation Equipment Certificates of
Indebtedness, Series 2006A
Certification:
1, MARTIN J. RAFFERT City Administrator of the City of Lake Elmo, Minnesota, do
hereby certify the following:
Attached hereto is a true and correct copy of a resolution on file and of record it the
offices of the City of Lake Elmo, Minnesota, which resolution was adopted by the Lake Elmo
City Council, at the meeting referred to above. Said meeting was a regular meeting of the Lake
Elmo City Council, was open to the public, and was held at the time at which meetings of the
City Council are regularly held.. Member DeLapp moved the adoption of the attached
resolution. The motion for adoption of the attached resolution was seconded by Member
Conlin . A vote being taken on the motion, the following voted in favor of the resolution:
Mayor Johnston, Council Members:Conlin, DeLapp, Johnson, Smith
and the following voted against the resolution:
None
'Whereupon said resolution was declared duly passed and adopted by at least two - thirds
of the members of the City Council. The attached resolution is in full force and effect and no
action has been taken by the City Council of the City of Lake Elmo, Minnesota which would in
any way alter or amend the attached resolution.
Witness my hand officially as the City Administrator o
Minnesota this 7th day of February, 2006.
CITY OF LAKE ELMO
WASH? -'7GTON COUNTY, MINNESOTA
RESOLUTION NO. 2006 -015
AUTHORIZING ISSUANCE, AWARD SALE FOR G.O. EQUIPMENT CERTIFICATE
RESOLUTION AUTHORI7 -17 ISSUANCE, AWARDING SALE, PRESCRIBING THE
FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $443,000 GENERAL
OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2006A
BE IT RESOLVED by the City Council, City of Lake Elmo, Minnesota (the City), as
follows:
Section 1. Authorization and Sale.
1.01. Authorization. This Council hereby determines that it is in the best
interests of the City to issue its $443,000 General Obligation Equipment Certificates of
Indebtedness, Series 2006A (the Obligations) to finance the costs of acquiring items of capital
equipment (the Project). Said items of capital equipment have a useful life not less than the term
of the Obligations. The principal amount of the Obligations does not exceed .25 percent of the
market value of taxable property in the City.
1.02. Sale. Pursuant to Minnesota Statutes, Section 475.60, subdivision. 2,
paragraph (2), the requirements as to public sale do not apply to the issuance of the Obligations.
A proposal for the purchase of the Obligations was received at or before the time specified for
receipt of proposals. Northland Securities, Inc. (the Purchaser) has proposed to purchase the
Obligations at a price of $ plus accrued interest on all Obligations to the
day of issuance and delivery, on the further terms and conditions hereinafter set forth.
1.03. Award. The sale of the Obligations is hereby awarded to the Purchaser and
the Mayor and City .Manager are hereby authorized and directed to execute a contract on behalf
of the City for the sale of the Obligations in accordance with the terms of the proposal.
Section 2. Obligation Terms; Registration; Execution and Delivery.
2.01. Issuance of Obligations. 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 Obligations having been done, now
existing, having happened and having been performed, it is now necessary for the City Council
to establish the form and terms of the Obligations, to provide security therefor and to issue the
Obligations forthwith.
2.02. Maturities; Interest Rates; Denominations and Payment. The Obligations
shall be originally dated March 8, 2006, shall mature on December I in the years and amounts
stated below and shall bear interest from the date of issue until paid or duly called for redemption
at the annual rates set forth opposite such years and amounts, as follows:.
Year
Amount Interest Rate
2008
$119,000 %
2011
128,000
2015
196,000
2
The Obligations shall be issuable only in fully registered form. The interest thereon and, upon
surrender of each Obligation. at the principal office of the Registrar "described herein, the.
principal amount thereof, shall be payable by check or draft issued by the Registrar described
herein. Upon the initial delivery of the Obligations pursuant to Section 2.07, and upon any
subsequent transfer or exchange pursuant to Section 2.06, the date of authentication shall be
noted on each Obligation so delivered, exchanged or transferred.
2.03. Bates and Interest Payment Dates. Interest on the Obligations shall be
payable on each Tune 1 and December 1, commencing December 1, 2006, to the owners of
record thereof as of the close of business on the fifteenth day of the immediately preceding
month, whether or not such day is a business day. interest shall be computed on the basis of a
360 -day year composed of twelve thirty -day months.
2.04. Redemption. Obligations maturing in 2015 shall be subject to redemption
and prepayment at the option of the City, in whole or in part, in such order of maturity dates as
the City may select and, within a maturity, by lot as selected by the Registrar on December 1,
2013, and on any date thereafter, at a price equal to the principal amount thereof and accrued
interest to the date of redemption. The City Manager shall cause notice of the call for
redemption thereof to be published if and as required by law, and at least thirty (30) and not
more than sixty (60) days prior to the designated redemption date, shall cause notice of call for
redemption to be mailed, by first class mail, to the registered holders of any Obligations to be
redeemed at their addresses as they appear on the bond register described in Section 2.06 hereof,
but no defect in or failure to give such mailed notice of redemption shall affect the validity of
proceedings for the redemption of any Obligation not affected by such defect or failure. Official
notice of redemption having been given as aforesaid, the Obligations or portions of Obligations
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 shall default in the payment of the
redemption price) such Obligations or portions of Obligations shall cease to bear interest. Upon
partial redemption of any Obligation, a new Obligation or Obligations will be delivered to the
owner without charge, representing the remaining principal amount. outstanding.
Obligations maturing on December 1 in the years 2008, 2011 and 2015 (the Term
Obligations) shall be subject to mandatory redemption prior to maturity pursuant to the sinking
fund requirements of this Section 2.04 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 I in each of the
following years the following stated principal amounts of such Obligations:
Term Obligations Maturing December 1. 2008
Year
Princinal Amount
2006
$40,000
2007
39,000
The remaining $40,000 stated principal amount of such Obligations shall be paid at maturity on
December 1, 2008.
Term Obligations Maturing December 1. 2011
Year
Principal Amount
2009
$41,000
2010
43,000
The remaining $44,000 stated principal amount of such Obligations shall be paid at maturity on
December 1, 2011.
Term Obligations Maturing December 1. 2015
Year
Principal Amount
2012
$46,000
2013
48,000
2014
50,000
The remaining $52,000 stated principal amount of such Obligations shall be paid at maturity on
December 1, 2015.
Notice of redemption shall be given as provided in the preceding paragraph.
2.05. Appointment of Initial Registrar. The City hereby appoints the City
Finance Director as the initial bond registrar, transfer agent and paying agent (the Registrar) for
the Obligations. The City reserves the right to remove the Registrar, effective upon thirty days'
notice and upon the appointment of and acceptance by a successor Registrar, in which event the
predecessor Registrar shall deliver all. cash and Obligations in its possession to the successor
Registrar and shall deliver the bond register to the successor Registrar.
2.06. Registration. The effect of registration and the rights and duties of the City
and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its principal office a bond register in
which the Registrar shall provide for the registration of ownership of Obligations and the
registration of transfers and exchanges of Obligations entitled to be registered, transferred
or exchanged.
(b) Transfer of Obligations. Upon surrender for transfer of any Obligation 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 Obligations 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.
in
(c) Exchange of Obl.i�ations. 'Whenever any Obligations are surrendered by the
registered owner for exchange the Registrar shall authenticate and deliver one or more
new Obligations of a like aggregate principal amount and maturity, as requested by the
registered owner or the owner's attorney in writing.
(d) Cancellation. All Obligations surrendered upon any transfer or exchange
shall be promptly canceled by the Registrar and thereafter disposed of as directed by the
City.
(e) Improper or Unauthorized Transfer, When any Obligation is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Obligation or separate instrument of transfer is valid and
genuine and that the requested transfer is legally authorized. The Registrar shall 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 any Obligation is at any time registered in the bond register as the absolute
owner of the Obligation, whether the Obligation shall be overdue or not, for the purpose
of receiving payment. of or on account of, the principal of and interest on the Obligation
and for all other purposes; and all payments made to any registered owner or upon the
owner's order shall be valid and effectual to satisfy and discharge the liability upon
Obligation to the extent of the sum or sums so paid.
(g) Taxes. Fees and Charges. For every transfer or exchange of Obligations
(except for an exchange upon a partial rederription of an Obligation.), the Registrar r::ay
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 Obligations. In case any Obligation
shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new
Obligation of like amount, number, maturity date and tenor in exchange and substitution
for and upon cancellation of any such mutilated Obligation or in lieu of and in
substitution for any Obligation destroyed, stolen or lost, upon the payment of the
reasonable expenses and charges of the Registrar in connection therewith; and, in the case
of an Obligation destroyed, stolen or lost, upon filing with the Registrar of evidence
satisfactory to it that the Obligation was destroyed, stolen or lost, and of the ownership
thereof, and upon furnishing to 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 Obligations so surrendered to the Registrar shall be canceled by it
and evidence of such cancellation shall be given to the City. If the mutilated, destroyed,
stolen or lost Obligation has already matured or been called for redemption in accordance
with its ten-as it shall not be necessary to issue a new Obligation prior to payment.
(i) Authenticating Agent. The Registrar is hereby designated authenticating
agent for the Obligations, within the meaning of Minnesota Statutes, Section 475.55,
Subdivision 1, as amended.
6) Valid Obligations. All Obligations issued upon any transfer or exchange of
Obligations shall be the valid obligations of the City, evidencing the same debt, and
entitled to the same benefits under this Resolution as the Obligations surrendered upon
such transfer or exchange.
2.07. Execution, Authentication and Delivery. The Obligations shall be prepared
under the direction of the City Manager and shall be executed on behalf of the City by the
signatures of the Mayor and the City Manager, provided that the signatures may be printed,
engraved or lithographed facsimiles of the originals. In case any officer whose signature or a
facsimile of whose signature shall appear on the Obligations shall cease to be such officer before
the delivery of any Obligation, 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 Obligation 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 the Obligation has been duly executed by the manual signature of an
authorized representative of the Registrar. Certificates of authentication on different Obligations
need not be signed by the same representative. The executed certificate of authentication on
each Obligation shall be conclusive evidence that it has been authenticated and delivered under
this Resolution. When the Obligations have been prepared, executed and authenticated, the City
Manager shall deliver them to the Purchaser upon payment of the purchase price in accordance
with the contract of sale heretofore executed, and the Purchaser shall not be obligated to see to
the application of the purchase price.
2.08. Form of Obligations. The Obligations shall be prepared in substantially the
following form:
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WASHINGTON
CITY OF LAKE ELMO
GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF INDEBTEDNESS,
SERIES 2006A
Interest Rate Maturity Date Date of Original Issue
% December 1, 20� March 8, 2006
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 specified above,
or registered assigns, the principal sum specified above on the maturity date specified above,
with interest thereon from the date of original issue specified above or froze the most recent
Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided
for, at the annual rate specified above, payable on June I and December I in each year,
commencing December 1, 2006 (each such date, an Interest Payment Date), all subject to the
provisions referred to herein with respect to the redemption of the principal of this Obligation
before maturity. The interest so payable on any Interest Payment Date shall be paid to the person
in whose narne this Obligation is registered at the close of business on the fifteenth day (whether
or not a business day) of the immediately preceding month. Interest hereon shall be computed
on the basis of a 360 -day year composed of twelve 30 -day months. 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 or other agreed means of payment by the City
Finance Director as Registrar and Paying Agent (the Registrar), 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, credit and taxing powers of the City have
been and are hereby irrevocably pledged.
This Obligation is one of an issue in the aggregate principal amount of $443,000 issued
pursuant to a resolution adopted by the City Council on February 7, 2006 (the Resolution), to
finance the costs of acquisition of capital equipment, and is issued pursuant to and in full.
conformity with the Constitution and laws of the State of Minnesota thereunto enabling,
including Minnesota Statutes, Section 412.30I and Chapter 475. The Obligations are issuable
only in fully registered form of single maturities.
Obligations maturing in 2015 are subject tb redemption and prepayment at the option of
the City, in whole or in part, in such order of maturity dates as the City may select and, within a
maturity, by lot as selected by the Registrar on December 1, 2013, and on any date thereafter, at
a price equal to the principal amount thereof phis interest accrued to the date of redemption. The
City will cause notice of the call for redemption to be published if and as required by law and, at
least thirty (30) days prior to the designated redemption date, will cause notice of the call thereof
to be mailed by first class mail to the registered owner of any Obligation to be redeemed at the
owner's address as it appears on the bond register maintained by the Registrar, but no defect in or
failure to give such mailed notice of redemption shall affect the validity of proceedings for the
redemption of any Obligation not affected by such defect or failure. Official notice of
redemption having been given as aforesaid, the Obligations or portions of Obligations 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 shall default in the payment of the
redemption price) such Obligations or portions of Obligations shall cease to bear interest. Upon
partial redemption of any Obligation, a new Obligation or Obligations will be delivered to the
registered owner without charge, representing the remaining principal amount outstanding.
Bonds maturing in the year 2008, 2011 and 2015 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:
7
Term Bonds Maturing in 2008
Sinking Fund Aggregate
Payment Date Principal Amount
12/1/06 $40,000
12/1/07 39,000
12JI108 (maturity) 40,000
Terra Bonds Maturing in 2015
Sinking fund Aggregate
Payment Date Principal
Amount
12/1/12
$46,000
12/1/13
48,000
12/1/14
50,000
12/1/15 (maturity)
52,000
Term Bonds Maturing in 201.1.
Sinking Fund Aggregate
Payment Date Principal Amount
12/1/09 $41,000
12/1/10 43,00€1
12/1/11 (maturity) 44,000
Notice of redemption shall be given as provided in the preceding paragraph.
As provided in the Resolution and subject to certain limitations set forth therein, this
Obligation 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 at 0miney duly authorized in -xwiting 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 Obligations of other authorized denominations. Upon such transfer or exchange
the City will cause a new Obligation or Obligations to be issued in the name of the transferee or
registered owner, of the same aggregate principal amount, bearurg 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 Obligations have been designated as "qualified tax - exempt obligations" pursuant to
Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
The City and the Registrar may deem and treat the person in whose name this Obligation
is registered as the absolute owner hereof, whether this Obligation is overdue or not, for the
purpose of receiving payment and for all other purposes, and neither the City nor the Registrar
shall 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 Obligation 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; that, prior to
the issuance hereof, the City Council has levied ad valorem taxes on all taxable property in the
City, which taxes are estimated to be receivable in the years and in amounts sufficient to produce
sums not less than five percent in excess of the principal of and interest on the Obligations when
due, and has appropriated such taxes to its General Obligation Equipment Certificates of
Indebtedness, Series 2006A Sinking Fund for the payment of such principal and interest; that if
necessary for payment of such principal and interest when due, additional ad valorem taxes are
required to be levied upon all taxable property in the City, without limitation as to rate or amount
and that the issuance of this Obligation, together with all other indebtedness of the City
outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause
the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness.
This Obligation 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 Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Lake Elmo, Minnesota, by its City Council, has
caused this Obligation to be executed on its behalf by the facsimile signatures of the Mayor and
City Manager and has caused this Obligation to be dated as of the date set forth below.
Date of Authentication:
CITY OF LAKE EL O,M ES I T
OF AUTHENTICATION
This is one of the Obligations delivered pursuant to the Resolution mentioned within.
CITY FINANCE DIRECTOR, as Registrar
By
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Obligation,
shall be construed as though they were written out in full according to the applicable laws or
regulations:
TEN COM - as tenants in common UTMA ................... as Custodian for .....................
(Cost) (Minor)
TEN ENT - as tenants by the entireties under Uniform Transfers to Minors Act..... - .... .—
(State)
3T TEN -- as joint tenants with right of survivorship and not as tenants in common
0
Additional abbreviations may also be used.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Obligation and all rights thereunder, and. does hereby irrevocably constitute and
appoint attorney to transfer the said Obligation on the books kept for registration
of the within Obligation, with full. power of substitution in the premises.
Dated:
NOTICE: The assignor's signature to this assignment
roust correspond with the name as it appears upon the face
of the within Obligation 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 determined by the Registrar in addition to or in
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. General Obligation Equipment Certificates of Indebtedness. Series
2006A Sinking Fund. So long as any of the Obligations are outstanding and any principal of or
interest thereon unpaid, the City Finance Director shall maintain a separate debt service fund on
the official books and records of the City to be known as the General Obligation Equipment
Certificates of Indebtedness, Series 2006A Sinking Fund (the Sinking Fund), and the principal of
and interest on the Obligations shall be payable from the Sinking Fund. The City irrevocably
appropriates to the Sinking Fund (a) any amount in excess of $ received from the
Purchaser (including amounts representing capitalized interest); (b) all taxes levied. and collected
in accordance with this Resolution; and (c) all other moneys as shall be appropriated by .the City
Council to the Sinking Fund from time to time. If the balance in the Sinking Fund is at any time
insufficient to pay all interest and principal then due on all Obligations payable therefrom, the
payment shall be made from any fund of the City which is available for that purpose, subject to
reimbursement from the Sinking Fund when the balance therein is sufficient, and the City
Council covenants and agrees that it will each year levy a sufficient amount of ad valorem taxes
to take care of any accumulated or anticipated deficiency, which levy is not subject to any
constitutional or statutory limitation.
10
Section 4. Pledge of Taxing Powers. For the prompt and full payment of the
principal of and interest on the Obligations as such payments respectively become due, the full
faith, credit and unlimited taxing powers of the City shall be and are hereby irrevocably pledged..
In order to produce aggregate amounts not less than 5% in excess of the amount needed to meet
when due the principal. and interest payments on the Obligations, ad valorem taxes are hereby
levied on all taxable property in the City. The taxes are to be levied and collected in the
following years and amounts:
Levy Years Collection Years Amount
See attached Levy Computation
The taxes shall be irrepealable as long as any of the Obligations are outstanding and unpaid,
provided that the City reserves the right and power to reduce the tax Ievies in accordance with
the provisions of Minnesota Statutes, Section 475.51.
Section 5. Defeasance. When all of the Obligations have been discharged as
provided in this section, all pledges, covenants and other rights granted by this Resolution to the
registered owners of the Obligations shall cease. The City may discharge its obligations with
respect to any Obligations which are due on any date by depositing with the Registrar on or
before that date a sum sufficient for the payment thereof in full; or, if any Obligation should not
be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum
sufficient for the payment thereof in full with interest accrued from the due date to the date of
such deposit. The City may also at any time discharge its obligations with respect to any
Obligations, subject to the provisions of law now or hereafter authorizing and regulating such _
action, by depositing it evocably in escrow, with a bank qualified by to act as an escrow
agent for this purpose, cash or securities which are authorized by law to be so deposited, bearing
interest payable at such time and at such rates and maturing or callable at the holder's option on
such dates as shall be required to pay all principal and interest to become due thereon to maturity
or, if notice of redemption as herein required has been irrevocably provided for, to an earlier
designated redemption date.
Section 6. Certification of Proceedings.
6.01. Registration of Obligations and Levy of Taxes. The City Manager is
hereby authorized and directed to file a certified copy of this resolution with the County Auditor
of Washington County and obtain a certificate that the Obligations have been duly entered upon
the Auditor's bond register and the tax required by law has been levied.
6.02. Authentication of Transcript. The officers of the City and the County
Auditor are hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey
& Whitney LLP, Bond Counsel, certified copies of all proceedings and records relating to the
Obligations and such other affidavits, certificates and information as may be required to show
the facts relating to the legality and marketability of the Obligations, as the same appear from the
books and records in their custody and control or as otherwise known to them, and all such
certified copies, affidavits and certificates, including any heretofore furnished, shall be deemed
representations of the City as to the correctness of all statements contained therein.
II
Section 7. Tax Covenants, Arbitrage Matters, Reimbursement and Continuin
Disclosure.
7.01. General Tax. Covenant. The City covenants and agrees with the registered
owners from time to time of the Obligations that it will not take, or permit to be taken by any of
its officers, employees or agents, any actions that would cause interest on the Obligations to
become includable in gross income of the recipient under the Internal Revenue Code of 1986, as
amended (the Code) and applicable Treasury Regulations (the Regulations), and covenants to
take any and all actions within its powers to ensure that the interest on the Obligations will not
become includable in gross income of the recipient under the Code and the Regulations. In
particular, the City covenants and agrees that all proceeds of the Obligations will be expended
solely for the payment of the costs of acquisition and installation of capital equipment to be
owned and maintained by the City and used in the City's general governmental operations. The
City shall not enter into any lease, use or other agreement with any non - governmental person
relating to the use of the equipment or security for the payment of the Obligations which might
cause the Obligations to be considered "private activity bonds" or "private loan bonds" pursuant
to Section 141 of the Code.
7.02. Certification. The Mayor and City Manager being the officers of the City
charged with the responsibility for issuing the Obligations pursuant to this Resolution, are
authorized and directed to execute and deliver to the Purchaser a certificate in accordance with
the provisions of Section 148 of the Code and applicable Regulations, stating the facts, estimates
and circumstances in existence on the date of issue and delivery of the Obligations which make it
reasonable to expect that the proceeds of the Obligations will not be used in a manner that would
cause the Obligations to be "arbitrage bonds" within the meaning of the Code and Regulations.
7.03. Axbitrage Rebate. It is hereby found that the City has general taxing
powers, that no Bond is a "private activity bond" within the meaning of Section 141 of the Code,
that 95% or more of the net proceeds of the Bonds are to be used for local governmental
activities of the City, and that the aggregate face amount of all tax - exempt obligations (other than
private activity bonds) issued by the City and all subordinate entities thereof during the year
2006 is not reasonably expected to exceed $5,000,000. Therefore, pursuant to the provisions of
Section 148(f)(4)(D) 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.
7.04. Reimbursement. The City certifies that the proceeds of the Obligations will
not be used by the City to reimburse itself for any expenditure with respect to the equipment
which the City paid or will have paid more than 60 days prior to the issuance of the Obligations
unless, with respect to such prior expenditures, the City shall have made a declaration of official
intent which complies with the provisions of Section 1.150 -2 of the Regulations; provided that
this certification shall not apply (i) with respect to certain de minimis expenditures, if any, with
respect to the equipment meeting the requirements of Section 1.150-2(f)(1) of the Regulations, or
(ii) with respect to "preliminary expenditures" for the equipment as defined in Section 1.150 -
2(f)(2) of the Regulations which in the aggregate do not exceed 20% of the "issue price" of the
Obligations.
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7.05. Qualified Tax - Exempt Obligations. The City Council hereby designates the
Obligations as "qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Code
relating to the disallowance of interest expense for financial institutions, and hereby finds that
the reasonably anticipated. amount of 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 the purpose of this representation) and are not excluded from this calculation by Section
265(b)(3)(C)(ii) of the Code which have been and will be issued by the City and all subordinate
entities during calendar year 2006 does not exceed $10,000,000.
7.06. Continuing Disclosure. Rule 15c2 -12 under the Securities Exchange Act of
1934 (17 C.F.R. § 240.15c2 -12) (the Rule) that make it unlawful for an underwriter to participate
in the primary offering of municipal securities in a principal amount of $1,000,000 or more
unless, before submitting a bid or entering into a purchase contract for the Obligations, it has
reasonably determined that the issuer or an obligated person has undertaken in writing for the
benefit of the bondholders to provide certain disclosure information to prescribed information
repositories on a continuing basis or unless and to the extent the offering is exempt. from the
requirements of the Rule. The principal amount of the Obligations is less than $1,000,000. The
City hereby represents that it has not issued within the six months before the date of issuance of
the Obligations, and that it reasonably expects that it will not issue within six months after the
date of issuance of the Obligations, other securities of the City of substantially the same security
and providing financing for the same general purpose or purposes as the Obligations.
Consequently, this City Council hereby finds that the Rule is inapplicable to the Obligations,
because the aggregate principal amount of the Obligations and any other securities required to be
integrated with the Obligations thereunder is less than $1,000,000. Therefore, the City is not
required to enter into any undertaking to provide continuing disclosure with respect to the
Obligations.
7.07. This resolution shall be in full force and effect from and after its passage.
PASSED AND APPROVED this 7th day of February, 2006.
THE CITY OF LAKE ELMO,
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Dean Johnston,
PROJECTED LEVIES
Date Lev
I:1a m
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