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HomeMy WebLinkAboutResolution 4451 . RESOLUTION NO. 4451 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION OF COMMITMENT BY THE CITY OF MOUNDS VIEW TO CONSTRUCT AND OPERATE A MUNICIPAL NINE HOLE GOLF COURSE AND PRACTICE RANGE WHEREAS, for over 10 years the City of Mounds View has considered the creation of a municipally-owned golf course in the City; and WHEREAS, the idea of such a course was taken from dream to reality in July, 1991 with the crease of a Land Use Study Task Force comprised of Pat Rickaby, Gary Quick, Ric Minetor, Samantha Orduno, Mary Saarion, E. Scott Dentz, Gary Stevenson) Len Burgers, Tom Fischer and Stephanie Shaner, who were charged with determining the feasibility of a golf course on City-owned land in the northeast quadrant of the City; and . WHEREAS, the feasibility of a golf course on the land was examined by professional consultants with findings which affirmed not only the feasibility, but the potential self sustaining profitability; and WHEREAS, the Land Use Task Force recommended to the Mounds View City Council that the concept of a municipally-owned golf course be pursued to determine if such a course could be a financially sound course venture for the City; and WHEREAS, in July, 1992, the City Council appointed a 10 member Golf Course Task Force comprised of Phyllis Blanchard, Mark Malone, Jerry Peterson, Gary Quick, Ron Schmidt, Phil Seipp, Tim Smith, Gary Stevenson, Mary Saarion and Samantha Orduno and charged the them with determining the financial viability of a municipally-owned course with the direction that any course developed must be constructed and operated from non-property tax sources; and WHEREAS, also in July of 1992, the City contracted with Decision Resources, Ltd. to conduct a random sample telephone survey to determine public opinion on development of a golf course in the City; and . WHEREAS, the results of the survey indicated that 62% favored a golf course in the City and 56% of those favoring such a course, desired that it be a municipal operation; and . RESOLUTION NO. 4451 PAGE TWO OF TWO WHEREAS, from July, 1992 to November, 1993, the Golf Course Task Force has conducted over 20 meetings to develop concept plans, revenue and expenditure projections, market analysis, construction and operation costs; and WHEREAS, the Task Force has made recommendations to the City council for approvals of funding for financial, architectural, engineering and marketing consultants to assist them in developing the proposal which would be a financially, environmentally, aesthetically, social and recreational investment opportunity for the City of Mounds View; and WHEREAS, the Golf Course Task Force has, through comprehensive research and analysis, determined the financial viability of a 9 hole golf course and driving range on land currently owned by the City and proposed additional land to be acquired to increase the success of the course; and WHEREAS, the Master Plan for the course, approved by the Council on November 8, 1993 represents a golf course and practice range that will be a challenging and enjoyable recreational experience expressly directed to a well-defined and research supported clientele and market base; and . WHEREAS, the Task Force has recommended that the construction of the golf course and practice range be funded by the sale of a Gross Revenue Bond; and WHEREAS, the Task Force further recommends that the first two full years of course operations be subsidized with an inter- fund loan from city enterprise funds; and WHEREAS, the Task Force has requested that the City Council accept all Task Force recommendations and take formal action to proceed with implementation of all recommendations. NOW, THEREFORE, BE IT RESOLVED that the City Council in and for the City of Mounds View accepts the recommendations of the Golf Course Task Force and does hereby make formal commitment to proceed with the construction and operation of a municipally- owned and operated nine hole golf course and driving range. ATTEST: November, 1993. . (SEAL) , ~ " '" . --- '. ~.. ; EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF MOUNDS VIEW, MINNESOTA Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Mounds View, Minnesota, was duly held in the Mounds View City Hall on December 13, 1993, commencing at 7:00 P.M., C.T., in part for the purpose of consideration of awarding the sale of the City's $3,090,000 Gross Revenue Golf Course Bonds, Series 1994A. The following Councilmembers were present: Jerome W. Linke, Phyllis Blanchard, Gary Quick, Julie Trude and Diane Wuori and the following were absent: None *** *** *** Quick introduced the fOllowing Resolution, the reading of which was dispensed with by unanimous consent of the Council, and moved its adoption: RESOLUTION NO. 4452 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $3,090,000 GROSS REVENUE GOLF COURSE BONDS, SERIES 1994A BE IT RESOLVED by the City Council (the "Council") of the City of Mounds View, Minnesota (the "City"), as follows: 1. Recitals. It is hereby determined: (a) Pursuant to Minnesota Statutes, Sections 471.15 to 471.19, the City owns and operates various 244882 ?' . e e public recreational facilities and, after studying the feasibility thereof, has determined to acquire, develop, equip, furnish, operate, and maintain a certain 9-hole municipal golf course, including a driving range, clubhouse, and related facilities (collectively, the "Golf Course"), and the costs of completing and financing the Golf Course are currently estimated as follows: Construction, Architectural, Engineering, and Contingency Land Equipment Capitalized Interest Debt Service Reserve Underwriter's Discount Costs of Issuance $1,780,212 561,109 170,000 169,583 309,000 60,588 3Q.508 $3,090,000 . Total (b) The City is authorized pursuant to Minnesota Statutes, Section 471.191, to acquire and complete the Golf Course and to finance the same through the issuance of the City's gross revenue golf course bonds, and the Council hereby finds that it is necessary and expedient to the sound financial management of the City that the City do so. 2. Acceotance of Offer. The offer of Piper Jaffray, Inc. (the "Purchaser"), to purchase the City's $3,090,000 Gross Revenue Golf Course Bonds, Series 1994A (the "Bonds"), at the rates of interest and upon the other terms set forth in this Resolution, and to pay therefor the sum of $ 3,029,412 plus interest accrued to settlement, is hereby accepted. 3. Title: Oriqinal Issue Date: Denominations: Maturities. The Bonds shall be titled "Gross Revenue Golf Course Bonds, Series 1994A," shall be dated January 1, 1994, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on January 1 in the years and amounts as follows: 244882 2 Years Amounts Years Amounts . 2000 $ 35,000 2005 $ 165,000 2001 60,000 2006 185,000 2002 85,000 2007 200,000 2003 120,000 2008 225,000 2004 140,000 2014 1,875,000 and the Bonds maturing on January 1, 2014, shall be subject to mandatory sinking fund redemption, at a redemption price of par plus accrued interest to date of redemption, on January 1 in the years and amounts as follows: Years Amounts 2009 $250,000 2010 275,000 2011 300,000 2012 325,000 2013 350,000 2014 375,000 (maturity) . Pursuant to Section 475.54, Subdivision 17, the Council hereby finds that the Bonds will be payable primarily from a source other than ad valorem taxes and the Council hereby estimates that said primary source of payment for the Bonds, being the "Gross Revenues" of the Golf Course as hereinafter defined, is and will be sufficient to pay, when due, the principal of and interest on the Bonds, and said primary source of payment of the Bonds is, as hereinafter provided, irrevocably appropriated for such purposes; accordingly, pursuant to said Subdivision 17 the Bonds may mature at any time or times within 30 years after the date of their issuance, and the foregoing maturity schedule is thereby excepted from compliance with the requirements of Minnesota Statutes, Section 475.54, Subdivision 1. 4. PurDose. The Bonds shall provide funds' to finance the Golf Course, the total cost of which is estimated to be at least equal to the amount of the Bonds. Work on the Golf Course shall proceed with due diligence to completion. 5. Interest. The Bonds shall bear interest payable semiannually on January 1 and July 1 of each year (each, an "Interest Payment Date"), commencing July 1, 1994, calculated on the basis of a 360-day year consisting of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years, as follows: 244882 e 3 . Maturity Interest Maturity Interest Year Rate Year Rate 2000 5.000 % 2005 5.700 % 2001 5.150 2006 5.750 2002 5.300 2007 5.800 2003 5.450 2008 5.900 2004 5.600 2014 6.125 . e 6. RedemDtion. All Bonds maturing after January 1, 2004, shall be subject to redemption and prepayment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. To effect a partial redemption of Bonds having a common maturity date, including both optional and mandatory sinking fund redemption thereof, the Bond Registrar, prior to giving notice of redemption, shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or by the registered owner's attorney, duly authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated 244882 4 . - e maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 7. Bond Reqistrar. American National Bank and Trust Company , in St. Paul, Minnesot~ is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. The principal of and interest on the Bonds shall be paid to the rl~g istered owners (or record owners) of the Bonds in the manner set forth in the form of Bond and paragraph 13 of this Resolution. 8. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: 244882 5 e e e UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF RAMSEY CITY OF MOUNDS VIEW R- $ GROSS REVENUE GOLF COURSE BOND, SERIES 1994A INTEREST RATE DATE OF ORIGINAL ISSUE MATURITY DATE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Mounds View, Ramsey County, Minnesota (the "City"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the registered owner specified above, or registered assigns, from the sources and in the manner hereinafter described, the principal amount specified above on the maturity date specified above, unless duly called for earlier redemption, and to pay interest thereon semiannually on January 1 and July 1 of each year (each, an "Interest Payment Date"), commencing July 1, 1994, at the rate per annum specified above (calculated on the basis of a 360-day year consisting of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , (the "Bond Registrar"), acting as paying agent, or at the principal office of any successor paying agent duly appointed by the City. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Registered Owner") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Registered Owner hereof as of the Regular Record Date, and shall be payable to the person who is the 244882 6 . - e Registered Owner hereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Registered Owners not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Home Rule Charter of the City to be done, to have happened and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed in regular and due form, time and manner as required by law, and that this Bond, together with all other indebtedness of the City outstanding on the date of original issue hereof and the date of its actual issuance and delivery to the original purchaser, does not exceed any constitutional, statutory, or Charter limitation of indebtedness. IN WITNESS WHEREOF, the City of Mounds View, Ramsey County, Minnesota, by its City council, has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its City Clerk-Administrator; has caused the corporate seal of the City to be intentionally omitted herefrom, as permitted by law; and has caused this Bond to be executed manually by the Bond Registrar, acting as the City's duly appointed authenticating agent for the Bonds. 2~2 7 e e e Date of Registration: Registrable by: Payable at: BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. CITY OF MOUNDS VIEW, RAMSEY COUNTY, MINNESOTA /s/ Facsimile Mayor /s/ Facsimile City Clerk-Administrator Bond Registrar By /s/ Manual Authorized Signature ON REVERSE OF BOND I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion executed by the above-named attorneys, except as to the dating thereof, which opinion has been handed to me for filing in my office prior to the time of delivery of the Bonds. (facsimile siqnaturel City Clerk-Administrator City of Mounds View, Minnesota 244882 8 . e RedemDtion. All Bonds of this issue maturing after January 1, 2004, are subject to redemption and prepayment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Such optional redemption may be in whole or in part of the Bonds subject to prepayment, and if in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepayment, the Bonds of that maturity to be prepaid shall be chosen by lot by the Bond Registrar. All Bonds maturing on January 1, 2014, shall be subject to mandatory sinking fund redemption, at a redemption price of par plus accrued interest to date of redemption, on January 1 in the years and amounts as follows: Years Amounts 2009 $250,000 2010 275,000 2011 300,000 2012 325,000 2013 350,000 2014 375,000 (maturity) Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. Selection of Bonds for Redemotion: Partial Redemption. To effect a partial redemption of Bonds having a common maturity date, including both optional and mandatory sinking fund redemption thereof, the Bond Registrar shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in ~ 244882 9 e _. . form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing), and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: Puroose: Soecial Obliqations. This Bond is one of an issue in the total principal amount of $3,090,000, all of like date of original issue and tenor, except as to registration number, maturity, interest rate, denomination, and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the state of Minnesota and the Home Rule Charter of the City and pursuant to a resolution adopted by the City Council on December 13 , 1993 (the "Resolution"), for the purpose of providing money to finance the acquisition and completion of a municipal golf course and related public recreational facilities to be owned and operated by the City (the "Project"). The Bonds and the interest thereon are payable solely and exclusively from the gross revenues of the Project (the "Gross Revenues") and from a certain Reserve Account, as provided by the Resolution. The Bonds are a first and prior lien upon the Gross Revenues, except that the City is authorized under certain conditions to issue additional revenue obligations on a parity of lien with the Bonds, all as provided in the Resolution. The City has covenanted to maintain such operating policies relating to the Project so as to produce Gross Revenues, together with any other funds which may be appropriated by the City from time to time for such purposes, sufficient to provide adequately for the operation and maintenance of the Project and to meet the annual principal and interest requirements of the Bonds; and the City is required to provide in its budget each year for any anticipated deficiency in the revenues available for the operation and maintenance of the project. Denominations: Exchanqe: Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the 244882 10 e Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Registered Owner in person or by the Registered Owner's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the City contained in any agreement with the Bond Registrar. Thereupon the City shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank. or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees UDon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. e Treatment of Reqistered Owners. The City and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Oualified Tax-ExemDt Obliqations. The Bonds have been designated by the City as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. ABBREVIATIONS 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: e 244882 11 e e e TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Minor) Uniform (CUst) under the (state) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 244882 12 e e . ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. as Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company, by a brokerage firm having a membership in one of the major stock exchanges or by any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15(a) (2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 244882 13 e e e 9. Execution: TemporarY Bonds. The Bonds shall be executed on behalf of the City by the signatures of its Mayor and City Clerk-Administrator and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed facsimile; and provided further that both of such signatures may be printed facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in substantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and cancelled. 10. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless a certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is January 1, 1994. The certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The City Clerk-Administrator shall obtain a copy of the proposed approving legal opinion of bond counsel, Briggs and Morgan, Professional Association, st. Paul, Minnesota, which shall be complete except as to dating thereof, shall cause such opinion to be filed in the offices of the City, and shall cause said opinion to be printed on each of the Bonds, together with a certificate to be signed by the facsimile signature of the City 244882 14 e Clerk-Administrator in substantially the form set forth in the foregoing form of the Bonds. 11. Reaistration: Transfer: Exchanae. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 10) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. e At the option of the registered owner thereof, Bonds may be exchanged for Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the registered owner making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this Resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the City. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid obligations of the City evidencing the same debt, and entitled to the same benefits under this Resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing. e 244882 15 e e e The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regula- tions of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 12. Riahts U90n Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carryall the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 13. Interest Payment: Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the registered owner thereof as of the Regular Record Date, and shall be payable to the person who is the registered owner thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the registered owners not less than ten (10) days prior to the Special Record Date. 14. Treatment of Reaistered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 13 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 15. Deliverv: ADDlication of Proceeds. The Bonds when so prepared and executed shall be delivered by the City Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 244882 16 e e e 16. Golf Course Fund: Accounts Therein. There is hereby established (and so long as any bonds payable from the Debt Service Account hereinafter established are "Outstanding" (as defined in subparagraph 16(c) below), the City Finance Director shall maintain or cause to be maintained) on the official books and records of the City a Golf Course Fund, together with those Accounts within the Golf Course Fund which are described in this paragraph 16. From and after the issuance of the Bonds, all Gross Revenues of the Golf Course shall be set aside and are hereby pledged and appropriated to, and shall be deposited in and withdrawn from the various Accounts of the Golf Course Fund, as provided in this paragraph 16. "Gross Revenues" means all income and revenue of any nature derived from the operation or use of the Golf Course or any part thereof, including all amounts received with respect to services provided or commodities furnished by the Golf Course. Gross Revenues shall not include bond proceeds; moneys appropriated by the . Council (from other available city sources) for the operation or maintenance of the Golf Course; investment income or moneys held in the Capital Expenditures Account or the Surplus Account; or condemnation, property insurance or sale proceeds. Deoosit and Investment of Funds. All bond proceeds and Gross Revenues on hand in the Golf Course Fund shall be deposited or invested in accordance with Minnesota Statutes, Section 475.66; provided that each investment held in the Reserve Account shall have a maturity date, or be redeemable at the option of the holder, within three years of the date of its purchase. All securities so purchased shall mature at or before the time when it is estimated that the proceeds thereof will be needed for the purposes of the Account from which funds are withdrawn for the purchase. All income, gain and loss on such investments shall be credited or charged, as the case may be, to the Account from which the investment was made. (a) Caoital Exoenditures Account. The Capital Expenditures Account of the Golf Course Fund shall be used to record the receipt and disbursement of bond proceeds and any other moneys appropriated for the payment of expenditures which, under generally accepted accounting principles, constitute capital costs of the acquisition or betterment of the Golf Course, including but not limited to the cost of land, easements, improvements to land, buildings, structures and capital equipment, and the cost of all architectural, engineering, legal and other professional services, costs of issuing any bonds and interest to accrue on bonds issued to finance such acquisition or betterment prior to the receipt of the revenues therefrom, and 244882 17 e tit e 244882 other costs reasonably necessary and incidental thereto. To the Capital Expenditures Account there shall be credited $ 2,720,412 of the proceeds of the Bonds, the proceeds of any other bonds issued to finance the acquisition or betterment of Golf Course facilities, and such other moneys as may from time to time be appropriated thereto to pay such capital expenditures of the Golf Course. Upon payment of all capital expenditures of the Golf Course, any moneys remaining in the Capital Expenditures Account shall be transferred to the Debt Service Account. (b) Gross Revenue Account. All Gross Revenues shall be credited as received to the Gross Revenue Account of the Golf Course Fund and shall be held and invested therein, transferred to other Accounts of the Golf Course Fund, and disbursed and expended as provided in this paragraph 16. (c) Debt Service Account. To the Debt Service Account of the Golf Course Fund there are hereby irrevocably pledged, and the same shall be appropriated and credited thereto, on or before the 10th day of each month, beginning the first month following the date of full operation of the Golf Course, the amount of Gross Revenues on hand in the Gross Revenue Account (net of any other amounts on hand in the Debt Service Account and available for such purposes) equal to one-sixth of the interest to become due in the next six months plus one-twelfth of the principal to become due in the next twelve months on bonds payable from the Debt Service Account. The Debt Service Account shall be used only to pay the principal of and interest on bonds made payable therefrom, including the Bonds, when due. The balance on hand in said Account on each such payment date shall be used first to pay pro rata the interest then due on all such bonds, and second to pay the principal of the matured bonds in order of their maturity dates, pro rata with respect to bonds maturing on the same date. With respect to all bonds payable from the Debt Service Account, "outstanding" means all bonds theretofore issued pursuant to and secured by this Resolution except: (i) bonds paid and cancelled by the City or delivered to the City for cancellation; and (ii) bonds which have been discharged as provided in paragraph 26. Any proceeds of the Bonds and any sums from time to time held in the capital Expenditures Account, the Reserve 18 . e e 244882 Account or the Debt Service Account in excess of amounts which under then-applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Golf Course Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United states or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds or any other bonds payable from the Debt Service Account to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"). (d) Reserve Account. The Reserve Account in the Golf Course Fund shall be maintained at the "Reserve Requirement" described in this subparagraph 16(d). At the time of issuance of the Bonds and any additional bonds payable from the Debt Service Account (collectively, the "Secured Bonds"), the City shall cause the Reserve Account to be funded in the amount equal to the smallest of the following: (i) The maximum of the unpaid annual debt service requirements of the Outstanding Secured Bonds (inClUding those then being issued); (ii) 125% of the average of the unpaid annual debt service requirements of the Outstanding Secured Bonds (including those then being issued); (iii) the maximum amount which would not cause the funding level of the Reserve Account to fail to be "reasonably required" or otherwise permissible under the provisions of the Code (as defined below in this subparagraph 16(d)); and (iv) an amount equal to the sum of the Reserve Requirement (if any) just prior to the issuance of additional Secured Bonds plus 10% of the "issue price" of said Secured Bonds at the time being issued (such issue price to be determined pursuant to Section 1273 of the Code, but without regard to accrued interest); provided, however, that pursuant to such instructions and opinions as the City may receive or request from its bond counsel, the Reserve 19 e e 244882 e Requirement, and the investment of funds in the Reserve Account, shall be subject to such restrictions and affirmative obligations as shall be necessary in order that none of the Secured Bonds shall (in the absence of compliance with any such restrictions or affirmative obligations) become generally subject to federal income taxation. In this subparagraph 16(d), references to prov~s~ons of the Code shall be to the then-applicable provisions of the Internal Revenue Code of 1986, as amended, supplemented or superseded, and to the regulations, rulings and decisions thereunder, relating to tax-exempt obligations. The City hereby appropriates to the Reserve Account from the proceeds of the Bonds the sum of $ 309,000 , being the Reserve Requirement calculated as described above for the Bonds. The Reserve Requirement shall be held as a reserve for the payment of the principal of and interest on all bonds payable from the Debt Service Account when due. Whenever and to the extent the balance in the Reserve Account is less than the Reserve Requirement, all earnings on monies invested in the Reserve Account shall be retained therein, monies on hand in the Surplus Account shall be transferred to the Reserve Account, and (if a deficiency still exists following the preceding steps) Gross Revenues from the Gross Revenue Account shall be transferred to the Reserve Account to the extent such Gross Revenues are not at the time needed in the Debt Service Account or Operating Account. Whenever the balance in the Reserve Account exceeds the Reserve Requirement, the excess shall be transferred to the extent of any deficiency in the Debt Service Account and the operating Account, in that order of priority, and then to the Surplus Account. Moneys on hand in the Reserve Account shall be used only to pay interest or principal actually due on bonds payable from the Debt Service Account when, if and to the extent that such interest or principal cannot be paid in full from the Debt Service Account; provided that the amount of the reserve allocable to any bond issue payable from the Debt Service Account may be used at any time to defease such bond issue (or applicable portion thereof) in accordance with paragraph 26, so long as the balance remaining on hand in the Reserve Account following such use is not less than the Reserve Requirement with respect to outstanding bonds which continue to be payable from the Debt Service Account. (e) Operatinq Account. To the Operating Account there shall be credited such amounts of the Gross 20 . e e Revenues remaining in the Gross Revenue Account, after the transfers required by subparagraphs 16(c) and (d) have been made, as are needed to pay, promptly when due, all expenses which under generally accepted accounting principles constitute current, reasonable and necessary costs of the operation, administration and maintenance of the Golf Course, exclusive of depreciation and interest costs, and said Gross Revenues shall be used to pay such costs. To the Operating Account shall also be credited, so far as needed, any additional funds other than Gross Revenues which are appropriated by the Council for payment of such expenses. The City covenants for the benefit of the registered owners of the Bonds and any other bonds payable from the Debt service Account that if there exists (or there is anticipated to arise) a deficiency in the Operating Account which cannot be restored forthwith from the Surplus Account or other available City funds appropriated by the Council for that purpose, the Council shall provide and include in its next annual budget, and shall appropriate to the Operating Account, an amount sufficient to restore such deficiency. (f) SurDlus Account. To the Surplus Account there may be transferred such amounts of the Gross Revenues on hand in the Gross Revenue Account as are from time to time not needed to meet the requirements of the Debt Service Account, the Reserve Account, and the Operating Account. Moneys on hand in the Surplus Account shall always be available and used first to restore any deficiency in the Debt Service Account, Reserve Account, and Operating Account, but moneys on hand in the Surplus Account which are not needed for those purposes may be expended for any other lawful purpose specified by the Council. 17. Additional Covenants. The City hereby covenants and agrees with the registered owners from time to time of all Outstanding bonds payable from the Debt Service Account that unless otherwise provided in the resolution authorizing their issuance, it will fully and promptly perform and do all acts and things provided for in this Resolution. (a) Rate Covenant. The City will establish, maintain, revise when necessary and collect charges, fees and rents for all services, products, uses, occupancy, commodities and benefits of whatsoever nature furnished and made available by the Golf Course 2~2 21 e e e 244882 to all individuals, organizations and others, in accordance with schedules such that the Gross Revenues derived therefrom in each "Fiscal Year" of the City (January 1 to December 31) will be sufficient (i) on an annual basis (first beginning with the 1996 Fiscal Year) to meet the requirements of the Debt Service Account, the Reserve Account, and the Operating Account; and (ii) so that in each year (first beginning with the 1998 Fiscal Year) the total of the Gross Revenues which remain on hand after deducting therefrom the debt service on all Secured Bonds and the operation and maintenance expenses for that year will not be less than 25% of such debt service requirements. The City will revise such rates, charges and rentals whenever necessary for these purposes. If the audited financial statement for any Fiscal Year indicates the City has not complied with the foregoing rate covenants (collectively, the "Rate Covenant"), then the Council shall promptly cause to be undertaken on its own behalf a review of the reasons for the failure to comply with the Rate Covenant and make such revisions to its rates, rentals and other charges or methods of operation as deemed necessary to comply with the Rate Covenant, and within 60 days after receipt of the audited financial statements the City Clerk-Administrator shall file with the Council recommendations for curing the Rate Covenant deficiencies, which report shall state that the revised schedule of rates, rentals and other charges, or changes in methods of operation is promulgated or projected to comply with the Rate Covenant. Furthermore, if the audited financial statements for any two successive Fiscal Years indicate that the City does not comply with the Rate Covenant, then the City shall, within 30 days following receipt of the audited financial statements for such Fiscal Years, employ an independent golf course consultant to review and analyze the financial status and the administration and operation of the Golf Course and to submit to the City within 60 days thereafter a written report including the action which the independent Golf Course consultant recommends should be taken by the City with respect to the revision of its rates, fees and charges and the alteration of its methods of operation or the taking of other action that is projected to result in producing the amount so required in the following twelve month period. 22 e e - 2~2 Promptly upon its receipt of such recommendations, the Council shall give due consideration to the recommendations and shall revise the rates, fees and charges respecting the Golf Course and shall alter the City's methods of Golf Course operation; said revisions or alterations need not comply exactly with the independent golf course consultant's recommendations but they shall be reasonably projected by the Council to bring the City into compliance with the Rate Covenant. (b) ComDletion of Facilities. The City shall cause all Golf Course facilities financed in whole or in part from the proceeds of the bonds payable from the Debt Service Account to be fully acquired, erected, furnished, equipped and paid for with the proceeds of the bonds and other moneys appropriated and legally available for that purpose; shall cause all such construction to be done under contracts awarded in accordance with applicable law and accompanied by completion bonds in sums equal to the full amounts of the respective contracts; and shall cause each contract to be performed under the direction of an architect or engineer designated by the City, who shall give continual supervision while the contract is being performed. (c) OwnershiD and Operation. The City shall continue to own and operate the Golf Course, shall cause the Golf Course to be maintained in good and efficient operating condition, free from all liens on the revenues or the physical properties thereof, and will not sell or otherwise dispose of any capital assets of the Golf Course except at their fair market value and shall use the proceeds of any such sale or disposition to procure other capital assets of equal usefulness for the purposes of the Golf Course, or to pay and redeem or defease bonds payable from the Debt Service Account. The City shall at all times after commencement of operation of the Golf Course employ a general manager for the operation of the Golf Course who has experience in operating golf facilities and who may, but need not be, a golf professional. (d) Books and Records. The City shall cause proper and adequate books of record and account to be maintained, reflecting all receipts and disbursements and all accrued claims and expenses in connection with the operation and maintenance of the Golf Course, and 23 e e e 2~2 the payment of obligations incurred therefor, and shall make such records available for inspection at all reasonable times by the registered owner of any bonds payable from the Debt Service Account or by the registered owner's agent or attorney, and said books and records shall be audited with respect to each Fiscal Year by a certified public accountant, and the City shall furnish the report of each such audit without cost to the initial purchaser of each series of bonds payable from the Debt Service Account issued under the provisions hereof and shall make the report available for inspection, upon request, by the registered owner of any such bond. (e) Insurance. The City shall procure and keep in force at all times insurance on all buildings, structures, improvements, and equipment constituting at any time a part of the Golf Course, exclusive of foundations and excavations, against all perils covered under "all risk" insurance and in such amounts as like properties are customarily insured for by prudent owners thereof, and shall maintain public liability insurance at all times in amounts not less than the amounts in excess of which the City is immune from tort liability under the laws of the State of Minnesota, for all acts and omissions of its officers and employees concerned with the operation and maintenance of the Golf Course, and shall procure and keep in force surety company bonds covering all officers and employees handling Golf Course funds, in amounts sufficient to cover at all times the funds in their hands. In the event of loss or damage compensated by any such insurance or bonds, or by a condemnation award, the proceeds thereof shall be used to repair and restore the damage compensated. Insurance proceeds or condemnation proceeds not needed for this purpose shall be used in the same manner as provided for sale proceeds under paragraph 17(c). (f) certain Acauisition Costs. In order to complete the Golf Course, the City will acquire a certain Lot 16 in Blaine's North Star Industrial Park Addition for a purchase price estimated at $204,500, and the City will not use proceeds of the Bonds to pay (or to reimburse the City for payment of) such acquisition costs unless, and then only to the extent that, the City shall have awarded bids for the construction and completion of the Golf Course and the proceeds of the Bonds available for such purposes are, 24 e based on those bids, sufficient to complete the Golf Course. To the extent that all or any portion of said acquisition costs will not, pursuant to the foregoing covenant, be paid or financed from the proceeds of the Bonds, whether on a temporary or permanent basis, the Council hereby finds that the City has other City funds which are available and sufficient, and which are hereby appropriated by the Council, for such purposes. 18. Additional Bonds. The City reserves the right to issue additional bonds payable from the Debt Service Account and secured by the covenants set forth in this Resolution on the terms and conditions specified in this paragraph. (a) PurDose of Bonds; Gross Revenues. Additional bonds may be issued only to finance the acquisition and betterment of improvements or additions to the Golf Course, including necessary maintenance equipment, or to refund bonds issued for such purposes. All revenues derived from any such improvements or additions shall be Gross Revenues of the Golf Course and subject to the provisions of paragraph 16. e (b) paritv Lien Bonds. Such additional bonds may be made payable from the Debt Service Account and the Gross Revenues pledged thereto on a parity as to both principal and interest with all other bonds payable therefrom only if: (1) in the last complete Fiscal Year of the City immediately preceding the issuance of the bonds, the amount of Gross Revenues deposited in the Gross Revenue Account was: (A) equal to not less than 125% of the total amount of principal and interest to become due in any future Fiscal Year on all outstanding bonds payable from the Debt Service Account and all additional bonds to be issued, but excluding any bonds to be refunded by such additional bonds; and (B) sufficient to pay when due all costs and expenses payable from the Operating Account in such last complete Fiscal Year; provided that for purposes of this paragraph the Gross Revenues for any Fiscal Year may be increased to reflect any increase in the rates and charges described in paragraph 17(a) which have been put into effect prior to the issuance of any additional bonds but were not in effect for all of such last complete Fiscal year; and e 244882 25 e (2) there is on hand in the Reserve Account an amount equal to the Reserve Requirement computed with respect to all outstanding bonds payable from the Debt Service Account and the additional bonds then to be issued; and e (3) the bonds mature on January 1 and are not made subject to redemption on a date prior to any outstanding bonds payable from the Debt Service Account or, if the bonds are refunding bonds, on a date prior to the one which the refunded bonds were subject to redemption; (4) in the case of refunding bonds, if an escrow fund is to be established, the City obtains a report of an independent certified public accountant that the moneys and securities on hand in the escrow account are sufficient to pay the applicable debt service obligations of the refunded bonds on their stated maturity dates and/or any date on which such obligations have been or are to be called for prior redemption and prepayment; and the City obtains an opinion of nationally recognized bond counsel stating that the issuance of the additional bonds will not cause the interest on any bonds payable from the Debt Service Account to be includible in gross income for federal tax purposes; and (5) the City is not in default under this Resolution or any other resolution authorizing the issuance of any outstanding bonds payable from the Debt Service Account. 19. Subordinate Lien Bonds. Except as provided in paragraph 18, all additional bonds shall be payable from the Surplus Account and from Gross Revenues transferred thereto after the requirements of paragraphs 16(b) through (e) are met, and such additional bonds described in this paragraph shall be subordinate to the pledge and appropriation of such Gross Revenues for the purposes of paragraphs 16 through 18. 20. Bondholder's Riqhts. No registered owner of any bond issued and secured under the provisions hereof will have the right to institute any proceeding, judicial or otherwise, for the enforcement of the covenants herein contained, without the written concurrence of the registered owners of not less than 25 percent in aggregate principal amount of the bonds which are at such time outstanding and payable from the Debt Service Account, 244882 e 26 ... e e e but the registered owners of said percentage of bonds may, either at law or in equity, by suit, action or other available proceed- ing, protect and enforce the rights of all registered owners of such bonds and compel the performance of any and all of the covenants required herein to be performed by the City and its officers and agents, including but not limited to the establish- ment and maintenance of charges and fees and the collection and proper segregation of revenues and the use thereof. The registered owners of a majority in principal amount of such outstanding bonds will have the right to direct the time, method and place of conducting any proceeding for any remedy available to such registered owners or the exercise of any power conferred upon them, and the right to waive a default in the performance of any such covenant, and its consequences, except a default in the payment of the principal of or interest on any such bonds when due. However, nothing herein will impair the absolute and unconditional right of the registered owner of each such bond .to receive payment of the principal thereof and interest thereon as such principal and interest respectively become due, from the revenues and other sources pledged and appropriated for the payment thereof, and to institute suit for the enforcement of any such payment. 21. Debt Service Coveraae. It is hereby determined and reasonably anticipated that the estimated collections of the revenues available to the Debt Service Account will produce at least 5% in excess of the amount needed to meet, when due, the principal of and interest on the Bonds. The City Clerk- Administrator is directed to file a certified copy of this Resolution with the Director of Property Taxation of Ramsey County and to obtain the certificate of said official required by Minnesota Statutes, Section 475.63. 22. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are 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. 23. Neaative Covenant as to Use of Improvements. The City hereby covenants not to use the Improvements or to cause or 244882 27 ~. e permit the Improvements to be used, or to enter into any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of sections 103 and 141 through 150 of the Code. e 24. Tax-Exemot Status of the Bonds: Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and (3) the rebate of excess investment earnings to the United States if the Bonds (together with other obligations reasonably expected to be issued and outstanding at one time in this calendar year) exceed the small-issuer exception amount of $5,000,000. For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City hereby finds, determines and declares that (1) the Bonds are issued by a governmental unit with general taxing powers, (2) no Bond is a private activity bond, (3) ninety-five percent (95%) or more of the net proceeds of the Bonds are to be used for local governmental activities of the City (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City), and (4) the aggregate face amount of all tax-exempt obligations (other than private activity bonds) issued by the City (and all entities subordinate to, or treated as one issuer with, the City) during the 1994 calendar year is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f) (4) (D) of the Code. 25. Oesianation of Oualified Tax-Exempt Obliaations. In order to qualify the Bonds as "qualified tax-exempt Obligations" within the meaning of Section 265(b) (3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (e) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating e 244882 28 ..- . e qualified 501(c) (3) bonds as not being private activity bonds) which will be issued by the City (and all entities subordinate to, or treated as one issuer with, the City) during calendar year 1994 will not exceed $10,000,000; and e (e) not more than $10,000,000 of obligations issued or to be issued by the City during calendar year 1994 have been designated for purposes of Section 265(b) (3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 26. Defeasance. When any obligation of a Bond has been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this Resolution to the registered owner of that Bond (with respect to the obligation thereof so defeased) shall, to the extent permitted by law, cease. The City may at any time discharge any or all of such obligation(s) with respect to any Bond, subject to the provisions of law now or hereafter authorizing or regulating such action, by depositing irrevocably in escrow, with a suitable institution qualified by law as an escrow agent for this purpose, cash or securities which are backed by the full faith and credit of the United States of America, bearing interest payable at such times and at such rates and maturing on such dates and in such amounts as shall be required and sufficient, subject to sale and/or reinvestment in like securities, to pay said obligation(s), which may include any interest payment on such Bond and/or principal amount due thereon at a stated maturity (or if irrevocable provision shall have been made for permitted prior redemption of such principal amount, at such earlier redemption date). 27. ComDliance with Reimbursement Bond Reaulations. With respect to the Golf Course, the City has complied and will continue to comply with the "Reimbursement Regulations" provided in United States Treasury Regulations section 1.103-18, and any successor regulations as may be applicable, including Section 1.150-2. In particular, except where the following may not be required by said Regulations (e.g., with respect to certain "preliminary expenditures"), to the extent that any of the proceeds of the Bonds will be used to reimburse the City for a cost of the Golf Course theretofore paid and temporarily financed by the City out of other City funds, prior to the initial payment thereof (or within applicable time limits thereafter) the City has made or will have made a duly qualifying statement of its official intent to bond for such costs; otherwise, the proceeds of the Bonds are to be used for initial payment, and not for such reimbursement, of costs of the Improvements. 244882 e 29 ,- , e e e 28. Severability. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Resolution. 29. Headinas. Headings in this Resolution are included for convenience of reference only and shall not limit or define the meaning of any provision hereof. Council. Adopted on December 13 , 1993, by the Mounds View City The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Blanchard and upon a vote being taken thereon, the following Councilmembers voted in favor thereof: Jerome W. Linke, Phyllis Blanchard, Gary Quick, Julie Trude and Diane Wuori and the following Councilmembers voted against the same: None Whereupon said resolution was declared duly passed and adopted. 244882 30 .- '., ~> . ,. 'e City Clerk-Administrator's Certificate I, the undersigned, being the duly qualified and acting City Clerk-Administrator of the City of Mounds view, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the City Council duly called and held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to awarding the sale of the City's $3,090,000 Gross Revenue Golf Course Bonds, Series 1994A. WITNESS my hand as such City Clerk-Administrator and the official seal of the City this ~ day of ~~~~ e 1993. ( SEAL) 244882 .