HomeMy WebLinkAbout2010.07.19 RESO 2010-0029EXTRACT OF MINUTES OF A MEETING
OF THE CITY COUNCIL
CITY OF HUGO, MINNESOTA
HELD: July 19, 2010
Pursuant to due call, a regular meeting of the City Council of the City of Hugo,
Minnesota, was duly held at the City Hall on July 19, 2010, at 7:00 P.M., for the purpose in part
of considering proposals and awarding the sale of $1,340,000 General Obligation Capital
Improvement Plan Bonds, Series 2010A.
The following members were present: Haas, Klein, Petryk, Weidt, and Miron
and the following were absent: None
Member Haas introduced the following resolution and moved its adoption:
RESOLUTION NO. 2010-29
RESOLUTION ACCEPTING PROPOSAL ON THE SALE OF
$1,340,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT
PLAN BONDS, SERIES 2010A, PROVIDING FOR THEIR ISSUANCE
AND LEVYING A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City of Hugo, Minnesota (the "City"), after publication of the
notice of public hearing, on June 7, 2010, held a public hearing on the proposed issuance of
General Obligation Capital Improvement Plan Bonds pursuant to Minnesota Statutes, Section
475.521, Subd. 2 and on the proposed capital improvement plan, and adopted the Capital
Improvement Plan Amendment for the City (the "Plan") in accordance with the provisions of
Minnesota Statutes, Section 475.521, Subd. 3, which provided, in part, for the issuance of bonds
to acquire the (i) public safety facility and (ii) City Hall (together, the "Facility") which the City
is leasing from the Economic Development Authority of the City of Hugo, Minnesota (the
"EDA") and refund the outstanding EDA's (i) Public Project Revenue Bonds, Series 1998 (City
of Hugo, Lease With Option to Project) dated September 1, 1998 (the "Prior 1998 Bonds") and
(ii) Public Facility Lease Revenue Bonds, Series 2001 (City of Hugo, Minnesota Lease
Obligation) (the Prior 2001 Bonds") which financed the Facility; and
B. WHEREAS, no petition signed by voters equal to five percent of the votes cast in
the City in the last general election requesting a vote on the issuance of the capital improvement
plan bonds has been filed with the City Clerk within thirty days after the public hearing on the
issuance of the Bonds; and
C. WHEREAS, the City Council has heretofore determined that it is necessary and
expedient to issue $1,340,000 General Obligation Capital Improvement Plan Bonds, Series
2010A (the "Bonds" or individually, a "Bond") pursuant to Minnesota Statutes, Section 475.521
and Chapter 475 to provide funds to acquire the Facility pursuant to a current refunding of the
Prior 1998 Bonds and an advance refunding of the Prior 2001 Bonds; and
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D. WHEREAS, the City has heretofore determined, in accordance with Minnesota
Statutes, Section 475.521, Subd. 4, that the maximum amount of principal and interest to become
due in any year on the Bonds, and any other outstanding bonds issued under Minnesota Statutes,
Section 475.521, is less than 0.16 percent of the taxable market value of property of the City; and
E. WHEREAS, $390,000 aggregate principal amount of the Prior 1998 Bonds which
mature on and after February 1, 2011 (the "Refunded 1998 Bonds"), are callable on October 1,
2010 (the "Call Date"), as provided in the Revenue Bond Resolution adopted on August 17, 1998
(the "Prior 1998 Resolution"), and the refunding of the callable Prior 1998 Bonds is consistent
with covenants made with the holders thereof, and is necessary and desirable for the reduction of
debt service cost to the City; and
F. WHEREAS, $1,015,000 principal amount of the Prior 2001 Bonds which matures
on and after February 1, 2012 (the "Refunded 2001 Bonds" and together with the Refunded 1998
Bonds, the "Refunded Bonds"), is callable on February 1, 2011 at a price of par plus accrued
interest, as provided in the Mortgage and Security Agreement and Indenture of Trust of the
EDA, dated September 1, 2001 (the "Prior 2001 Resolution"); and
G. WHEREAS, the City has retained Springsted Incorporated, in St. Paul, Minnesota
("Springsted"), as its independent financial advisor for the sale of the Bonds and was therefore
authorized to sell the Bonds by private negotiation in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(9) and proposals to purchase the Bonds have been solicited by
Springsted; and
H. WHEREAS, the proposals set forth on Exhibit A attached hereto were received
by the Clerk, or designee, at the offices of Springsted at 11:00 a.m. this same day pursuant to the
Terms of Proposal established for the Bonds; and
1. WHEREAS, it is in the best interests of the City that the Bonds be issued in book -
entry form as hereafter provided.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hugo,
Minnesota, as follows:
1. Acceptance of Proposal. The proposal of Robert W. Baird & Company,
Incorporated in Red Bank, New Jersey (the "Purchaser"), to purchase the Bonds in accordance
with the Terms of Proposal established for the Bonds, at the rates of interest hereinafter set forth,
and to pay therefor the sum of $1,359,382.35, plus interest accrued to settlement, is hereby
found, determined and declared to be the most favorable proposal received and is hereby
accepted, and the Bonds are hereby awarded to the Purchaser. The Clerk is directed to retain the
deposit of the Purchaser and to forthwith return to the unsuccessful bidders their good faith
checks or drafts.
2. Bond Terms.
(a) Original Issue Date, Denominations, Maturities: and Term Bond Option. The
Bonds shall be dated August 1, 2010, as the date of original issue and shall be issued forthwith
on or after such date in fully registered form. The Bonds shall be numbered from R-1 upward in
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the denomination of $5,000 each or in any integral multiple thereof of a single maturity (the
"Authorized Denominations"). The Bonds shall mature on February 1 in the years and amounts
as follows:
Year Amount
2011
$185,000
2012
210,000
2013
215,000
2014
210,000
2015
125,000
2016
130,000
2017
130,000
2018
135,000
As may be requested by the Purchaser, one or more term Bonds may be issued having
mandatory sinking fund redemption and final maturity amounts conforming to the forgoing
principal repayment schedule, and corresponding additions may be made to the provisions of the
applicable Bond(s).
(b) Book Entry Only System. The Depository Trust Company, a limited purpose
trust company organized under the laws of the State of New York or any of its successors or
successors to its functions hereunder (the "Depository") will act as securities depository for the
Bonds, and to this end:
(i) The Bonds shall be initially issued and, so long as they remain in book entry
form only (the 'Book Entry Only Period"), shall at all times be in the form of a separate
single fully registered certificate for each maturity of the Bonds; and for purposes of
complying with this requirement under paragraphs 5 and 10 Authorized Denominations
for any Bond shall be deemed to be limited during the Book Entry Only Period to the
outstanding principal amount of that Bond.
(ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond
register maintained by the Registrar (as hereinafter defined) in the name of CEDE & CO.,
as the nominee (it or any nominee of the existing or a successor Depository, the
"Nominee").
(iii) With respect to the Bonds neither the City nor the Registrar shall have any
responsibility or obligation to any broker, dealer, bank, or any other financial institution
for which the Depository holds Bonds as securities depository (the "Participant") or the
person for which a Participant holds an interest in the Bonds shown on the books and
records of the Participant (the "Beneficial Owner"). Without limiting the immediately
preceding sentence, neither the City, nor the Registrar, shall have any such responsibility
or obligation with respect to (A) the accuracy of the records of the Depository, the
Nominee or any Participant with respect to any ownership interest in the Bonds, or (B)
the delivery to any Participant, any Owner or any other person, other than the Depository,
of any notice with respect to the Bonds, including any notice of redemption, or (C) the
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payment to any Participant, any Beneficial Owner or any other person, other than the
Depository, of any amount with respect to the principal of or premium, if any, or interest
on the Bonds, or (D) the consent given or other action taken by the Depository as the
Registered Holder of any Bonds (the "Holder"). For purposes of securing the vote or
consent of any Holder under this Resolution, the City may, however, rely upon an
omnibus proxy under which the Depository assigns its consenting or voting rights to
certain Participants to whose accounts the Bonds are credited on the record date
identified in a listing attached to the omnibus proxy.
(iv) The City and the Registrar may treat as and deem the Depository to be the
absolute owner of the Bonds for the purpose of payment of the principal of and premium,
if any, and interest on the Bonds, for the purpose of giving notices of redemption and
other matters with respect to the Bonds, for the purpose of obtaining any consent or other
action to be taken by Holders for the purpose of registering transfers with respect to such
Bonds, and for all purpose whatsoever. The Registrar, as paying agent hereunder, shall
pay all principal of and premium, if any, and interest on the Bonds only to or upon the
Holder of the Holders of the Bonds as shown on the register, and all such payments shall
be valid and effective to fully satisfy and discharge the City's obligations with respect to
the principal of and premium, if any, and interest on the Bonds to the extent of the sum or
sums so paid.
(v) Upon delivery by the Depository to the Registrar of written notice to the
effect that the Depository has determined to substitute a new Nominee in place of the
existing Nominee, and subject to the transfer provisions in paragraph 10, references to the
Nominee hereunder shall refer to such new Nominee.
(vi) So long as any Bond is registered in the name of a Nominee, all payments
with respect to the principal of and premium, if any, and interest on such Bond and all
notices with respect to such Bond shall be made and given, respectively, by the Registrar
or City, as the case may be, to the Depository as provided in the Letter of Representations
to the Depository required by the Depository as a condition to its acting as book -entry
Depository for the Bonds (said Letter of Representations, together with any replacement
thereof or amendment or substitute thereto, including any standard procedures or policies
referenced therein or applicable thereto respecting the procedures and other matters
relating to the Depository's role as book -entry Depository for the Bonds, collectively
hereinafter referred to as the "Letter of Representations").
(vii) All transfers of beneficial ownership interests in each Bond issued in book -
entry form shall be limited in principal amount to Authorized Denominations and shall be
effected by procedures by the Depository with the Participants for recording and
transferring the ownership of beneficial interests in such Bonds.
(viii) In connection with any notice or other communication to be provided to the
Holders pursuant to this Resolution by the City or Registrar with respect to any consent
or other action to be taken by Holders, the Depository shall consider the date of receipt of
notice requesting such consent or other action as the record date for such consent or other
action; provided, that the City or the Registrar may establish a special record date for
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such consent or other action. The City or the Registrar shall, to the extent possible, give
the Depository notice of such special record date not less than 15 calendar days in
advance of such special record date to the extent possible.
(ix) Any successor Registrar in its written acceptance of its duties under this
Resolution and any paying agency registrar agreement, shall agree to take any actions
necessary from time to time to comply with the requirements of the Letter of
Representations.
(x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of
surrendering the Bonds for a Bond of a lesser denomination as provided in paragraph 5,
make a notation of the reduction in principal amount on the panel provided on the Bond
stating the amount so redeemed.
(c) Termination of Book -Entry Only System. Discontinuance of a particular
Depository's services and termination of the book -entry only system may be effected as follows:
(i) The Depository may determine to discontinue providing its services with
respect to the Bonds at any time by giving written notice to the City and discharging its
responsibilities with respect thereto under applicable law. The City may terminate the
services of the Depository with respect to the Bonds if it determines that the Depository
is no longer able to carry out its functions as securities depository or the continuation of
the system of book -entry transfers through the Depository is not in the best interests of
the City or the Beneficial Owners.
(ii) Upon termination of the services of the Depository as provided in the
preceding paragraph, and if no substitute securities depository can be found which, in the
opinion of the City, is willing and able to assume the functions of the Depository
hereunder upon reasonable or customary terms, or if the City determines that it is in the
best interests of the City or the Beneficial Owners of the Bonds that the Beneficial
Owners be able to obtain certificates for the Bonds, the Bonds shall no longer be
registered as being registered in the bond register in the name of the Nominee, but may
be registered in whatever name or names the Holder of the Bonds shall designate at that
time, in accordance with paragraph 12. To the extent that the Beneficial Owners are
designated as the transferee by the Holders, in accordance with paragraph 12, the Bonds
will be delivered to the Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of
paragraph 12.
(d) Letter of Representations. The provisions in the Letter of Representations are
incorporated herein by reference and made a part hereof. If and to the extent any such provisions
are inconsistent with the other provisions of this resolution, the provisions in the Letter of
Representations shall control.
3. Allocation of Bonds to Prior 1998 Bonds, and Prior 2001 Bonds, Allocation of
Prepayments to Portions of Debt Service. The aggregate principal amount of $395,000 maturing
in each of the years and amounts hereinafter set forth are issued to refund the Prior 1998 Bonds
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(the "Current Refunding Portion"). The aggregate principal amount of $945,000 maturing in
each of the years and amounts hereinafter set forth are issued to refund the Prior 2001 Bonds (the
"Advance Refunding Portion"):
Year Current Refunding
Portion
2011
$ 90,000
2012
95,000
2013
105,000
2014
105,000
2015
2.00
2016
2.00
2017
2.25
2018
2.50
Advance Refunding
Portion
$ 95,000
115,000
110,000
105,000
125,000
130,000
130,000
135,000
4. Purpose; RefundingFindings. inding_s. The Bonds shall provide funds to acquire the
Facility as set forth in the Plan (the "Project"), pursuant to a current refunding of the Refunded
1998 Bonds and an advance refunding of the Refunded 2001 Bonds (together, the "Refunding").
It is hereby found and determined that the Refunding is pursuant to Minnesota Statutes, Section
475.67 and shall result in a reduction of debt service cost to the City.
5. Interest The Bonds shall bear interest payable semiannually on February 1 and
August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 2011,
calculated on the basis of a 360 -day year of twelve 30 -day months, at the respective rates per
annum set forth opposite the maturity years as follows:
Maturity a Interest Rate
2011
2.00%
2012
2.00
2013
2.00
2014
2.00
2015
2.00
2016
2.00
2017
2.25
2018
2.50
6. No Redemption. The Bonds shall not be subject to redemption and prepayment
prior to their stated maturity dates.
7. Bond Registrar. U.S. Bank National Association in St. Paul, Minnesota, 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
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duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or
record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 12.
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:
R -
UNITED STATES OF AMERICA
STATE OF MINNESOTA
WASHINGTON COUNTY
CITY OF HUGO
GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND, SERIES 2010A
Interest Rate Maturity Date Date of Original Issue CUSIP
February 1, _ August 1, 2010
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The City of Hugo, Washington County, Minnesota (the "Issuer"), certifies that it is
indebted and for value received promises to pay to the registered owner specified above, or
registered assigns, in the manner hereinafter set forth, the principal amount specified above, on
the maturity date specified above, without option of prior payment, and to pay interest thereon
semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"),
commencing February 1, 2011, at the rate per annum specified above (calculated on the basis of
a 360 -day year 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 U.S. Bank National Association, in St. Paul, Minnesota (the "Bond
Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer.
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 "Holder" or "Bondholder") on the registration
books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the
close of business on the fifteenth day of the calendar month next 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 Holder hereof as of the Regular Record Date, and shall be
payable to the person who is the Holder 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 Bondholders 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. So long as
this Bond is registered in the name of the Depository or its Nominee as provided in the
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Resolution hereinafter described, and as those terms are defined therein, payment of principal of,
premium, if any, and interest on this Bond and notice with respect thereto shall be made as
provided in the Letter of Representations, as defined in the Resolution, and surrender of this
Bond shall not be required for payment of the redemption price upon a partial redemption of this
Bond. Until termination of the book -entry only system pursuant to the Resolution, Bonds may
only be registered in the name of the Depository or its Nominee.
No Redemption. The Bonds of this issue (the "Bonds") are not subject to redemption and
prepayment prior to their stated maturity dates.
Issuance, Purpose: General Obli ag tion. This Bond is one of an issue in the total principal
amount of $1,340,000, all of like date of original issue and tenor, except as to number, maturity,
interest rate and denomination, issued pursuant to and in full conformity with the Constitution
and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council on
July 19, 2010 (the "Resolution"), for the purpose of providing funds to finance the acquisition of
the Facility described in the Issuer's Capital Improvement Plan pursuant to a (i) current refunding
of the outstanding Public Project Revenue Bonds, Series 1998 (City of Hugo Lease With Option
to Purchase Project) of the Economic Development Authority of the City of Hugo, Minnesota,
dated September 1, 1998 and (ii) an advance refunding of the outstanding Public Facility Lease
Revenue Bonds, Series 2001 (City of Hugo, Minnesota Lease Obligation), pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota, including Minnesota
Statutes, Chapter 475. This Bond is payable out of the Escrow Account and General Obligation
Capital Improvement Plan Bonds, Series 2010A Fund of the Issuer. This Bond constitutes a
general obligation of the Issuer, and to provide moneys for the prompt and full payment of its
principal, premium, if any, and interest when the same become due, the full faith and credit and
taxing powers of the Issuer have been and are hereby irrevocably pledged.
Denominations, Exchange, Resolution. The Bonds are issuable solely in fully registered
form in Authorized Denominations (as defined in the Resolution) 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 Resolution are on file in the principal
office of the Bond Registrar.
Transfer. This Bond is transferable by the Holder in person or by the Holder'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 Issuer contained in any agreement with the Bond
Registrar. Thereupon the Issuer 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.
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Fees upon 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.
Treatment of Registered Owners. The Issuer 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 herein with respect to the Record Date) and for all
other purposes, whether or not this Bond shall be overdue, and neither the Issuer 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.
Qualified Tax -Exempt Obligations. This Bond has been designated by the Issuer as a
"qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things
required by the Constitution and laws of the State of Minnesota to be done, to happen 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 debts of the Issuer outstanding on the date of original issue hereof
and the date of its issuance and delivery to the original purchaser, does not exceed any
constitutional or statutory limitation of indebtedness.
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IN WITNESS WHEREOF, the City of Hugo, Minnesota, by its City Council has caused
this Bond to be executed on its behalf by the facsimile signatures of the Mayor and the Clerk, the
seal of the Issuer having been intentionally omitted as permitted by law.
Date of Registration:
BOND REGISTRAR'S CERTIFICATE
OF AUTHENTICATION
This Bond is one of the Bonds described
in the Resolution mentioned within.
U.S. BANK NATIONAL
ASSOCIATION
St. Paul, Minnesota,
Bond Registrar
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Authorized Signature
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Registrable by: U.S. BANK NATIONAL
ASSOCIATION
Payable at: U.S. BANK NATIONAL
ASSOCIATION
CITY OF HUGO,
WASHINGTON COUNTY, MINNESOTA
/s/ Facsimile
Mayor
/s/ Facsimile
Clerk
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:
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
(Cust) (Minor)
under the Uniform Transfers to Minors Act
(State)
Additional abbreviations may also be used though not in the above list
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto the
within Bond and 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.
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 or by a brokerage firm
having a membership in one of the major stock exchanges or 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.)
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9. Execution; Temporary Bonds. The Bonds shall be in typewritten form, shall be
executed on behalf of the City by the signatures of its Mayor and Clerk and be sealed with the
seal of the City; provided, as permitted by law, both signatures may be photocopied facsimiles
and the corporate seal has been omitted. In the event of disability or resignation or other absence
of either officer, the Bonds may be signed by the manual or facsimile signature of the officer
who may act on behalf of the absent or disabled officer. In case either 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, the signature or facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if the officer had remained in office until delivery.
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 the
Bond Registrar. 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 of August 1, 2010. The Certificate of
Authentication so executed on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
11. Registration, Transfer, Exchange. 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 9 with respect to authentication) 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.
At the option of the Holder, 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
holder 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.
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All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general
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 holder thereof or the Holder's attorney duly authorized in writing.
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 regulations 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. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in
exchange for or in lieu of any other Bond shall carry all 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 (the "Holder") 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 next 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 Holder thereof as of
the Regular Record Date, and shall be payable to the person who is the Holder 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 Holders not less than ten days prior to the
Special Record Date.
14. Treatment of Registered 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 12 with respect to interest payment and record date) 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. Delivery; Application of Proceeds. The Bonds when so prepared and executed
shall be delivered by the Clerk to the Purchaser upon receipt of the purchase price, and the
Purchaser shall not be obliged to see to the proper application thereof.
16. Fund and Accounts. There is hereby created a special fund to be designated the
"General Obligation Capital Improvement Plan Bonds, Series 2010A Fund" (the "Fund") to be
administered and maintained by the Clerk as a bookkeeping account separate and apart from all
other funds maintained in the official financial records of the City. The Fund shall be maintained
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2582oo9v1
in the manner herein specified until all of the Bonds and the interest thereon have been fully
paid. There shall be maintained in the Fund the following separate accounts.
(a) Escrow Account. The Escrow Account is established for the Refunded 1998
Bonds and Refunded 2001 Bonds and shall be maintained as an escrow account with U.S. Bank
National Association (the "Escrow Agent"), in St. Paul, Minnesota, which is a suitable financial
institution within or without the State whose deposits are insured by the Federal Deposit
Insurance Corporation and whose combined capital and surplus is not less than $500,000. The
moneys in the Escrow Account shall be used solely for the purposes herein set forth and for no
other purpose, except that any surplus in the Escrow Account may be remitted to the City, all in
accordance with an agreement (the "Escrow Agreement") by and between the City and Escrow
Agent, a form of which agreement is on file in the office of the Clerk. Any moneys remitted to
the City upon termination of the Escrow Agreement shall be deposited in the Debt Service
Account. There shall be maintained the following separate subaccounts in the Escrow Account
to be designated the "Refunded 1998 Bonds Subaccount and the "Refunded 2001 Bonds
Subaccount." $1,359,085.08 of the proceeds of the sale of the Bonds and $225,150.74 in
available City funds shall be deposited with the Escrow Agent and applied to pay costs of issuing
the Bonds. There are hereby irrevocably appropriated and pledged to, and there shall be credited
to the separate subaccounts of the Escrow Account:
(i) Refunded 1998 Bonds Subaccount. $403,512.03 of the proceeds of the sale of
the Current Refunding Portion of the Bonds, together with all investment earnings
thereon, shall be deposited with the Escrow Agent in, and are hereby irrevocably pledged
and appropriated to, the Refunded 1998 Bonds Subaccount. The Refunded 1998 Bonds
Subaccount shall be invested in securities maturing or callable at the option of the holder
on such dates and bearing interest at such rates as shall be required to provide sufficient
funds, together with any cash or other funds retained in the Refunded 1998 Bonds
Subaccount, to pay when called for redemption on October 1, 2010, the principal amount
of, and accrued interest on, the Refunded 1998 Bonds.
(ii) Refunded 2001 Bonds Subaccount. $955,573.05 of the proceeds of the sale
of the Refunded Advance Refunding Portion of the Bonds, together with all investment
earnings thereon, shall be deposited with the Escrow Agent in, and are hereby irrevocably
pledged and appropriated to, the Refunded 2001 Bonds Subaccount. The Refunded 2001
Bonds Subaccount shall be invested in securities maturing or callable at the option of the
holder on such dates and bearing interest at such rates as shall be required to provide
sufficient funds, together with any cash or other funds retained in the Refunded 2001
Bonds Subaccount to pay when due the accrued interest, the principal amount of
outstanding Prior 2001 Bonds to the date called for redemption and to pay any premium
required for redemption.
(b) Debt Service Account. There are hereby irrevocably appropriated and pledged to,
and there shall be credited to, the Debt Service Account: (i) all accrued interest received upon
delivery of the Bonds; (ii) all funds paid for the Bonds in excess of the minimum bid; (iii) any
collections of all taxes herein or hereafter levied for the payment of the Bonds and interest
thereon; (iv) on and after the Call Date, any unexpended moneys in the Series 1998 Public
Project Revenue Bond Fund created by the Prior 1998 Resolution; (v) after February 1, 2011,
14
2582009vl
any balance remaining in the Series 2001 Public Facility Lease Revenue Bond Fund created for
the Prior 2001 Bonds; and (vi) all investment earnings on funds held in the Debt Service
Account; and (vii) any and all other moneys which are properly available and are appropriated
by the governing body of the City to the Debt Service Account. The Debt Service Account shall
be used solely to pay the principal and interest and any premiums for redemption of the Bonds
and any other general obligation bonds of the City hereafter issued by the City and made payable
from said account as provided by law.
No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire
higher yielding investments or to replace funds which were used directly or indirectly to acquire
higher yielding investments, except (1) for a reasonable temporary period until such proceeds are
needed for the purpose for which the Bonds were issued and (2) in addition to the above in an
amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To
this effect, any proceeds of the Bonds and any sums from time to time held in the Debt Service
Account (or any other City account which will be used to pay principal or interest to become due
on the bonds payable therefrom) 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 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 to be
"federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of
1986, as amended (the "Code").
17. Tax Levy, Coverage Test To provide moneys for payment of the principal and
interest on the Bonds there is hereby levied upon all of the taxable property in the City a direct
annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of
other general property taxes in the City for the years and in the amounts as follows:
Year of Tax Levy Year of Tax Collection Amount
2009-2016 2010-2017 $1,515,648.75
The tax levies are such that if collected in full they, together with other revenues herein
pledged for the payment of the Bonds, will produce at least five percent in excess of the amount
needed to meet when due the principal and interest payments on the Bonds. The tax levies shall
be irrepealable so long as any of the Bonds are outstanding and unpaid, provided that the City
reserves the right and power to reduce the levies in the manner and to the extent permitted by
Minnesota Statutes, Section 475.61, Subdivision 3.
18. General Obligation Pledge. For the prompt and full payment of the principal and
interest on the Bonds, as the same respectively become due, the full faith, credit and taxing
powers of the City shall be and are hereby irrevocably pledged. If the balance in the Debt
Service Account is ever insufficient to pay all principal and interest then due on the Bonds and
any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds
of the City which are available for such purpose, and such other funds may be reimbursed with
15
2582009v1
or without interest from the Escrow Account or Debt Service Account when a sufficient balance
is available therein.
19. Securities; Escrow Agent. Securities purchased from moneys in the Escrow
Account shall be limited to securities set forth in Minnesota Statutes, Section 475.67,
Subdivision 8, and any amendments or supplements thereto. Securities purchased from the
Escrow Account shall be purchased simultaneously with the delivery of the Bonds. The City
Council has investigated the facts and hereby finds and determines that the Escrow Agent is a
suitable financial institution to act as escrow agent.
20. Escrow Agreement. On or prior to the delivery of the Bonds the Mayor and Clerk
shall, and are hereby authorized and directed to, execute on behalf of the City an Escrow
Agreement. The Escrow Agreement is hereby approved and adopted and made a part of this
resolution, and the City covenants that it will promptly enforce all provisions thereof in the event
of default thereunder by the Escrow Agent.
21. Purchase of SLGS or Open Market Securities. The Purchaser, as agent for the
City, is hereby authorized and directed to purchase on behalf of the City and in its name the
appropriate United States Treasury Securities, State and Local Government Series and/or open
market securities as provided in paragraph 19, from the proceeds of the Advance Refunding
Portion of the Bonds and, to the extent necessary, other available funds, all in accordance with
the provisions of this resolution and the Escrow Agreement and to execute all such documents
(including the appropriate subscription form) required to effect such purchase in accordance with
the applicable U.S. Treasury Regulations.
22. Supplemental Resolution. The Prior Resolutions authorizing the issuance of the
Prior Bonds are hereby supplemented to the extent necessary to give effect to the provisions
hereof.
23. Defeasance. When all Bonds have been discharged as provided in this paragraph,
all pledges, covenants and other rights granted by this resolution to the registered Holders of the
Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with
respect to any Bonds which are due on any date by irrevocably depositing with the Bond
Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond
should not be paid when due, it may nevertheless be discharged by depositing with the Bond
Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such
deposit. The City may also at any time discharge its obligations with respect to any Bonds,
subject to the provisions of law now or hereafter authorizing and regulating such action, by
depositing irrevocably in escrow, with a suitable banking institution qualified by law as an
escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67,
Subdivision 8, bearing interest payable at such times and at such rates and maturing on such
dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to
become due thereon to maturity or, if notice of redemption as herein required has been duly
provided for, to such earlier redemption date.
24. Continuing Disclosure. The City is the sole obligated person with respect to the
Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"),
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2ss2oo9vi
promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described:
(a) Provide or cause to be provided to each nationally recognized municipal securities
information repository ("NRMSIR") and to the appropriate state information depository ("SID"),
if any, for the State of Minnesota, and to the Electronic Municipal Market Access system at
www.emma.msrb.org ("EMMA"), in each case as designated by the Commission in accordance
with the Rule, certain annual financial information and operating data in accordance with the
Undertaking. The City reserves the right to modify from time to time the terms of the
Undertaking as provided therein.
(b) Provide or cause to be provided, in a timely manner, (i) to each NRMSIR or to the
Municipal Securities Rulemaking Board ("MSRB") and any SID, and (ii) thereafter to EMMA,
notice of the occurrence of certain material events with respect to the Bonds in accordance with
the Undertaking.
(c) Provide or cause to be provided, in a timely manner, (i) through and including
June 30, 2010 to each NRMSIR or to the MSRB and any SID, and (ii) thereafter to EMMA,
notice of a failure by the City to provide the annual financial information with respect to the City
described in the Undertaking.
(d) The City agrees that its covenants pursuant to the Rule set forth in this paragraph
and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be
enforceable on behalf of such Holders; provided that the right to enforce the provisions of these
covenants shall be limited to a right to obtain specific enforcement of the City's obligations under
the covenants.
The Mayor and Clerk of the City, or any other officer of the City authorized to act in their
place (the "Officers") are hereby authorized and directed to execute on behalf of the City the
Undertaking in substantially the form presented to the City Council subject to such modifications
thereof or additions thereto as are (a) consistent with the requirements under the Rule, (b)
required by the Purchaser of the Bonds, and (c) acceptable to the Officers.
25. Certificate of Registration. A certified copy of this resolution shall be filed in the
office of the County Auditor of Washington County, Minnesota, together with such other
information as the County Auditor shall require and the County Auditor shall issue a certificate
that the Bonds have been entered in the County Auditor's Bond Register and that the tax levy
required by law has been filed and levied.
26. 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
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25820o9v1
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.
27. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby
covenants not to use the proceeds of the Bonds or to use the Project, or to cause or permit it to be
used, or to enter into any deferred payment arrangements for the cost of the Project, 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.
28. Tax -Exempt 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
(a) requirements relating to temporary periods for investments, (b) limitations on amounts
invested at a yield greater than the yield on the Bonds, and (c) 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 exception to the federal arbitrage rebate requirements
for governmental units issuing $5,000,000 or less of bonds, the City hereby finds, determines and
declares that:
(a) the Bonds are issued by a governmental unit with general taxing powers;
(b) no Bond is a private activity bond;
(c) ninety five percent 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);
(d) the aggregate face amount of all tax exempt bonds (other than private activity
bonds) issued by the City (and all subordinate entities thereof, and all entities treated as one
issuer with the City) during the calendar year in which the Bonds are issued and outstanding at
one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section
148(f)(4)(D) of the Code.
(e) with respect to the Bonds there shall not be taken into account for purposes of
said $5,000,000 limit the Current Refunding Portion of the Bonds to the extent the amount of the
current refunding bond does not exceed the outstanding amount of the refunded bond;
(f) the aggregate face amount of the Bonds does not exceed $5,000,000;
(g) each of the Refunded 1998 Bonds and the Refunded 2001 Bonds was issued as
part of an issue which was treated as meeting the rebate requirements by reason of the exception
for governmental units issuing $5,000,000 or less of bonds;
(h) the average maturity of the Current Refunding Portion of the Bonds does not
exceed the average maturity of the Refunded 1998 Bonds;
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2582oo9v1
(i) the average maturity of the Advance Refunding Portion of the Bonds does not
exceed the average maturity of the Refunded 2001 Bonds;
0) no part of the Current Refunding Portion of the Bonds has a maturity date which
is later than the date which is thirty years after the date the Refunded 1998 Bonds were issued;
and
(k) no part of the Advance Refunding Portion of the Bonds has a maturity date which
is later than the date which is thirty years after the date the Refunded 2001 Bonds were issued.
29. Designation of Qualified Tax -Exempt Obligations. 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;
(c) 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 qualified 501(c)(3) bonds as not being private activity bonds) which will
be issued by the City (and all entities treated as one issuer with the City, and all subordinate
entities whose obligations are treated as issued by the City) during this calendar year 2009 will
not exceed $30,000,000;
(e) not more than $30,000,000 of obligations issued by the City during this calendar
year 2009 have been designated for purposes of Section 265(b)(3) of the Code;
(f) the aggregate face amount of the Bonds does not exceed $30,000,000;
Furthermore, with respect to the Current Refunding Portion of the Bonds:
(g) each of the Refunded 1998 Bonds was designated as a "qualified tax exempt
obligation" for purposes of Section 265(b)(3) of the Code;
(h) the average maturity of the Current Refunding Portion of the Bonds does not
exceed the remaining average maturity of the Refunded 1998 Bonds;
(i) no part of the Current Refunding Portion of the Bonds has a maturity date which
is later than the date which is thirty years after the date the Refunded 1998 Bonds were issued;
and
0) the Current Refunding Portion of the Bonds is issued to refund, and not to
"advance refund" the Prior 1998 Bonds within the meaning of Section 149(d)(5) of the Code, and
shall not be taken into account under the $30,000,000 issuance limit to the extent the Current
Refunding Portion of the Bonds do not exceed the outstanding amount of the Prior 1998 Bonds.
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2582oo9v1
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.
30. Termination of Lease. The City hereby elects to exercise its option under Section
10.4 of the Lease with Option to Purchase Agreement between the City and the EDA, dated as of
September 1, 1998 (the "Lease") to prepay its Rental Payments (as defined in the Lease) through
the Call Date and deposit funds sufficient to refund the outstanding Prior 1998 Bonds on the Call
Date. As provided in the Lease, the City hereby determines and declares that upon the issuance
of the Bonds, the Lease shall be terminated and the EDA shall have no further right, title and/or
interest in and to the public safety facility. The City hereby elects to exercise its option under
Section 10.4 of the Lease with Option to Purchase Agreement between the City and the EDA,
dated as of September 1, 2001 (the "Lease") to prepay its Rental Payments (as defined in the
Lease) through February 1, 2011 and deposit funds sufficient to refund the outstanding Prior
2001 Bonds on February 1, 2011. As provided in the Lease, the City hereby determines and
declares that upon the issuance of the Bonds, the Lease shall be terminated and the EDA shall
have no further right, title and/or interest in and to the City Hall.
31. 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.
32. Headings. Headings in this resolution are included for convenience of reference
only and are not a part hereof, and shall not limit or define the meaning of any provision hereof.
The motion for the adoption of the foregoing resolution was duly seconded by member
Petryk and, after a full discussion thereof and upon a vote being taken thereon, the following
voted in favor thereof Haas, Petryk, Weidt, Klein, and Miron
and the following voted against the same: None
whereupon the resolution was declared duly passed and adopted.
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2582009v1
STATE OF MINNESOTA
I, the undersigned, being the duly qualified and acting Clerk of the City of Hugo,
Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that the same is a full, true and
complete transcript of the minutes of a meeting of the City Council, duly called and held on the
date therein indicated, insofar as the minutes relate to considering proposals and awarding the
sale of $1,340,000 General Obligation Capital Improvement Plan Bonds, Series 2010A.
WITNESS my hand on July 19, 2010.
Clerk
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2582oo9vvl
EXHIBIT A
Proposals
2582009v1
Post sale
1,340,000
City of Hugo, Minnesota
General Obligation Capital Improvment Plan Bonds, Series 2010A
Current and Full Advance Refunding of Series 1998 and 2001
Post -Sale Tax Levies
Pay Year
Principal
Coupon
Interest
Total P+I
105% Ovedevy
Levy Amount
Levy/Collect
Years
02/01/2011
185,000.00
2.000%
13,900.00
198,900.00
208,845.00
208,845.00
2009/2010
02/01/2012
210,000.00
2.000%
24,100.00
234,100.00
245,805.00
245,805.00
2010/2011
02/01/2013
215,000.00
2.000%
19,900.00
234,900.00
246,645.00
246,645.00
2011/2012
02/01/2014
210,000.00
2.000%
15,600.00
225,600.00
236,880.00
236,880.00
2012/2013
02/01/2015
125.000.00
2.000%
11,400.00
136,400.00
143,220.00
143,220.00
2013/2014
02/01/2016
130,000.00
2.000%
8,900.00
138,900.00
145,845.00
145,845.00
2014/2015
02/01/2017
130,000.00
2.250%
6,300.00
136,300.00
143,115.00
143,115.00
2015/2016
02/01/2018
135,000.00
2.500%
3,375.00
138,375.00
145,293.75
145,293.75
2016/2017
Total
$1,340,000.00
-
$103,475.00
$1,443,475.00
$1,515,648.75
$1,515,648.75
.*Tis AV/JA RA ;'All. /a / Aean .wmmrry / 7'1!11 IO / //;49,IAI
j Springsted
2582009v1