HomeMy WebLinkAbout2002.08.05 RESO 2002-0038EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
HUGO, MINNESOTA
HELD: August 5, 2002
Pursuant to due call and notice thereof, a regular or special meeting of the City Council
of the City of Hugo, Washington County, Minnesota, was duly held at the City Hall on August 5,
2002, at 7:00 o'clock P.M., for the purpose, in part, of considering proposals for, and awarding
the competitive negotiated sale of $440,000 General Obligation Equipment Certificates, Series
2002A.
The following members were present:
and the following were absent: 1(a-x,r.
i
Membere-7,6 v er w introduced the following resolution and moved its
adoption:
The City Administrator presented proposals on $440,000 General Obligation
Equipment Certificates, Series 2002A of the City, for which proposals were to be received,
opened and tabulated by the City Administrator, or designee, this same day, in accordance with
the resolution adopted by the City Council on July 1, 2002.
The following proposals were received, opened and tabulated at 11:00 A.M.,
Central Time, at the offices of Springsted Incorporated, in the presence of the City
Administrator, or designee, on this same day:
Bidder Interest Rate True Interest Cost
(See Attached)
RESOLUTION ACCEPTING PROPOSAL ON THE COMPLrT1TIVE
NEGOTIATED SALE OF $440,000 GENERAL OBLIGATION EQUIPMENT
CERTIFICATES, SERIES 2002A, PROVIDING FOR THE ISSUANCE,
AND LEVYING A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City Council of the City of Hugo, Minnesota (the "City"), has
heretofore determined and declared that it is necessary and expedient to issue $440,000 General
Obligation Equipment Certificates, Series 2002A of the City (the "Certificates" or, individually,
a "Certificate"), pursuant to Minnesota Statutes, Chapter 475 and Minnesota Statutes, Section
412.301, to finance the acquisition of capital equipment for the City (the "Project"); and
iai
S
1 '
SS E. SEVENTH PLACE, SUITE 100
SAINT PAUL, MN SS101-2887
651.223.3000 FAX:6SI.223.3002
E-MAIL: a vimx a@gwhWpLed.00m
SPRINGSTED
Advises to Ae PuMk.Svaw
$"0.0
CITY OF HUGO, MINNESOTA
GENERAL OBLIGATION EQUIPMENT CERTIFICATES, SERIES 2002A
RBC DAIN RAUSCHER 2.00%
(BOOK ENTRY ONLY)
2.375%
AWARD:
'UNITED*BANKEW BANK
2005
SALE:
August 5, 2002.
Moody's Rating: A3
2007
U.S. BANCORP PIPER JAFFRAY INC. 2.25% .
2003-2004 $435,600.00 $42,418.75 3.1390%
Bidder
Interest
Rates Price
Net Interest Trus Interes
Cost Rate
UNITED BANKERS' BANK
1.50% 2003 $437,360.00
$34;817.50 2.5695%
1.75% 2004
2.20% 2005
2.50% 2006
2.75% 2007
CRONIN & COMPANY, INCORPORATED
3.00% 2003-2006 $445,116.60
$36,720.80 2.6801%
3.25% 2007
RBC DAIN RAUSCHER 2.00%
2003 $436,220.15 $41,547.35 3:0797%
2.375%
2004
2.75%
2005
2.80%
2006
3.10%.
2007
U.S. BANCORP PIPER JAFFRAY INC. 2.25% .
2003-2004 $435,600.00 $42,418.75 3.1390%
2:50%.
2005
3.00%
2006
3.125%
2007
(Continued)
These Certificates are being reoffered at Par.
. BBI: 5.00%
Average Maturity: 3.08 Years
CORPORATE OFFICE: SAINT PAUL.MN • Vi* ar w"te * www.spot8led.00m
-M MORD& IA • MII. MMM WI • MRRNWOM MN 9 OVM AM PARR. KS 9 VDtCM" 5EAM VA • WASHN61.ON. DC
B. WHEREAS, each item of equipment to be financed by the Certificates has an
expected useful life at least as long as the term of the Certificates; and
C. WHEREAS, the City has no outstanding Certificates of Indebtedness; and
D. WHEREAS, the principal amount of the Certificates does not exceed one-quarter
of one percent (0.25%) of the market value of the taxable property in the City ($491,614,700
times 0.25% is $1,229,036); and
E. WHEREAS, it is in the- best interests of the City that the Certificates be issued in
book -entry form as hereinafter provided; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hugo,
Minnesota, as follows:
1. AMWU= of Proper The proposal of United Bankers' Bank (the
"Purchaser"), to purchase the Certificates in accordance with the Terms of Proposal, at the rates
of interest hereinafter set forth, and to pay therefor the sum of $437,360.00, plus accrued interest
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 said proposal maker. The
City Administrator is directed to retain the deposit of said proposal maker and to forthwith return
to the unsuccessful proposal makers their good faith checks and drafts.
2. Certificate Terms.
Certificates shall be dated August 1, 2002, as the date of original issue and shall be issued
forthwith on or after such date as fully registered certificates. The Certificates 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 "Authorized Denominations"). The Certificates shall mature, without option
of prepayment, on August 1 in the years and amounts as follows:
Year Amount Year Amount
2003 $80,000 2006 $90,000
2004 85,000 2007 95,000
2005 90,000
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 foregoing
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 its
14290900
2
v
r ! ,
successors to its functions hereunder (the "Depository") will act as securities depository for the
Certificates, and to this end:
(i) The Certificates 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 Certificates; and for
purposes of complying with this requirement under paragraphs 5 and 10 Authorized
Denominations for any Certificate shall be deemed to be limited during the Book Entry
Only Period to the outstanding principal amount of that Certificate.
(h) Upon initial issuance, ownership of the Certificates 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 Certificates 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 Certificates as securities depository (the
"Participant") or the person for which a Participant holds an interest in the Certificates
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 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 Certificates, or (B) the delivery to any Participant, any Owner or any other person,
other than the Depository, of any notice with respect to the Certificates, including any
notice of redemption, or (C) the 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 Certificates, or (D) the consent given or other action
taken by the Depository as the Register Holder of any Certificates (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 Certificates 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 Certificates for the purpose of payment of the principal of and
premium, if any, and interest on the Certificates, for the purpose of giving notices of
redemption and other matters with respect to the Certificates, for the purpose of obtaining
any consent or other action to be taken by Holders for the purpose of registering transfers
with respect to the Certificates, and for all purpose whatsoever. The Registrar, as paying
agent hereunder, shall pay all principal of and premium, if any, and interest on the
Certificates only to or upon the Holder of the Holders of the Certificates as shown on the
bond 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 Certificates to the extent of the sum or sums so paid.
3
14290900
J „!
v
(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 hereof,
references to the Nominee hereunder shall refer to such new Nominee.
(vi) So long as any Certificate is registered in the name of a Nominee, all
payments with respect to the principal of and premium, if any, and interest on the
Certificate and all notices with respect to the Certificate 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 Certificates (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 Certificates, collectively hereinafter referred to as the
"Letter of Representations").
(vii) All transfers of beneficial ownership interests in each Certificate 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 the Certificates.
(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 the consent or other action as the record date for the consent
or other action; provided, that the City or the Registrar may establish a special record date
for the consent or other action. The City or the Registrar shall, to the extent possible,
give the Depository notice of the special record date not less than 15 calendar days in
advance of the 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/bond registrar agreement, shall agree to take any
actions necessary from time to time to comply with the requirements of the Letter of
Representations.
(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 Certificates 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 Certificate if it determines that the
Depository is no longer able to carry out its functions as securities depository or the
14290900
2
N
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 is willing to undertake the
functions of the Depository hereunder can be found which, in -the opinion of the City, is
willing and able to assume the functions 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
Certificate that the Beneficial Owners be able to obtain certificates for the Certificates,
the Certificates 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 Certificates shall designate at that time, in accordance with paragraph 10 hereof. To
the extent that the Beneficial Owners are designated as the transferee by the Holders, in
accordance with paragraph 10 hereof; the Certificates will be delivered to the Beneficial
Owners.
(iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of
paragraph 10 hereof.
(d) better of Representations. The provisions in the Letter of Representations are
incorporated herein by reference and made a part of the resolution, and 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. &Wm The Certificates shall provide funds to finance the Project, particularly
for the acquisition of capital equipment having a useful life at least as long as the Certificates
(the "Equipment"). The total cost of the Prcject,.which shall include all costs enumerated in
Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the
Certificates.
4.nI terest. The Certificates shall bear interest payable semiannually on February 1
and August 1 of each year (each, an "Interest Payment Date"), commencing August 1, 2003,
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:
177 .! " ( 7 M
2003
1.50%
2004
1.75%
2005
2.20%
2006
2.50%
2007
2.75%
5. No Redemption. The Certificates shall not be subject to redemption and
prepayment prior to their maturity.
5
14290900
14
,, c
., t
6. Rel. U.S. Bank National Association, in St. Paul, Minnesota, is appointed to
act as registrar and transfer agent with respect to the Certificates (the "Registrar"), and shall do
so unless and until a successor Registrar is duly appointed, all pursuant to any contract the City
and Registrar shall execute which is consistent herewith. The Registrar shall also serve as
paying agent unless and until a successor paying agent is duly appointed. Principal and interest
on the Certificates shall be paid to the registered holders (or record holders) of the Certificates in
the manner set forth in the form of Certificate and paragraph 12 of this resolution.
7. Form of Certificate. The Certificates, together with the Registrar's Certificate of
Authentication, the form of Assignment and the registration information thereon, shall be in
substantially the following form:
14290900
6
UNITED STATES OF AMERICA
STATE OF MINNESOTA
WASHINGTON COUNTY
CITY OF HUGO
GENERAL OBLIGATION EQUIPMENT
CERTIFICATE, SERIES 2002A
INTEREST MATURITY DATE OF
RATE DATE ORIGINAL ISSUE CUSIP
AUGUST 1, 2002
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, without option of prepayment, in the manner hereinafter set forth, the
principal amount specified above, on the maturity date specified above, and to pay interest
thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment
Date"), commencing August 1, 2003, 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 Certificate 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 Certificate are payable upon presentation
and surrender hereof at the principal office of U.S. Bank National Association, in St. Paul,
Minnesota (the "Registrar"), acting as paying agent, or any successor paying agent duly
appointed by the Issuer. Interest on this Certificate will be paid on each Interest Payment Date
by check or draft mailed to the person in whose name this Certificate is registered (the "Holder")
on the registration books of the Issuer maintained by the 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 Registrar whenever money becomes available for payment of the
defaulted interest. Notice of the Special Record Date shall be given to Holders not less than ten
days prior to the Special Record Date. The principal of and premium, if any, and interest on this
Certificate are payable in lawful money of the United States of America. [So long as this
Certificate is registered In the name of the Depository or its Nominee as provided in the
Resolution hereinafter described, and as those terms are defined therein, payment of
142909Ox1
N
principal of, premium, if any, and interest on this Certificate and notice with respect
thereto shall be made as provided in the Letter of Representations, as.defined in the
Resolution. Until termination of the book -entry only system pursuant to the Resohidon,
Certificates may only be registered in the name of the Depository or its Nominee.]'`
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
CERTIFICATE 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, laws of the State of Minnesota to be done, to happen and to be
performed, precedent to and in the issuance of this Certificate, have been done, have happened
and have been performed, in regular and due form, time and manner as required by law, and that
this Certificate, 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.
IN WITNESS WHEREOF, the City of Hugo, Washington County, Minnesota, by its City
Council has caused this Certificate to be executed on its behalf by the facsimile signatures of its
Mayor and its Administrator, the corporate seal of the Issuer having been intentionally omitted as
permitted by law.
Ltdude only uvA termination at the book -entry only qsl em mmder pwagmph 2 hereof.
14290900
8
Date of Registration:
REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Certificate is one
of the Certificates
described in the
Resolution mentioned
within.
U.S. BANK NATIONAL
ASSOCIATION,
St. Paul, Minnesota
Registrar
By
Authorized signature
14290900
Registrable by. U.S. BANK NATIONAL
ASSOCIATION
Payable at: U.S. BANK NATIONAL
ASSOCIATION
9
CITY OF HUGO,
WASHINGTON COUNTY,
MIlVNESOTA
Isf Eacsimile
Mayor
/s/ Facsimile
Administrator
ON REVERSE OF CERTIFICATE
No Redemption. The Certificates of this issue (the "Certificates") are not subject to
redemption and prepayment prior to their maturity.
Issuance: Purpose: General Obligation. This Certificate is one of an issue in the total
principal amount of $440,000, all of like date of original issue and tenor, except as to number,
maturity, interest rate and denomination, which Certificate has been 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 August 5, 2002 (the "Resolution"), for the purpose of providing
money to finance the purchase of various items of capital equipment for the Issuer. This
Certificate is payable out of the General Obligation Equipment Certificates, Series 2002A Fund
of the Issuer. This Certificate 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 Certificates are issuable in fully registered
form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully
registered Certificates of other Authorized Denominations in equal aggregate principal amounts
at the principal office of the 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 Registrar. Copies of the Resolution are on file in the principal office of
the Registrar.
Transfer. This Certificate is transferable by the Holder in person or by the Holder's
attorney duly authorized in writing at the principal office of the Registrar upon presentation and
surrender hereof to the 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
Registrar. Thereupon the Issuer shall execute and the Registrar shall authenticate and deliver, in
exchange for this Certificate, one or more new fully registered Certificates 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 Certificate, of the same maturity and bearing interest at the same rate.
Fees upon Transfer or Loss. The 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 Certificate and any legal or unusual costs regarding transfers and lost Certificates.
Treatment of Registered Owners. The Issuer and Registrar may treat the person in whose
name this Certificate 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 Certificate shall be overdue, and neither the Issuer nor the
Registrar shall be affected by notice to the contrary.
10
1429ONv1
Authentication. This Certificate 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 Registrar.
Qualified Tax ExemVt Qbli&inn. This Certificate has been designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended.
11
14290900
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Certificate, 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 under the
(Cust) (Minor) (State)
Uniform Transfers to Minors Act
Additional abbreviations may also be used though not in the above list.
For value received, the undersigned hereby sells, assigns and transfers unto the within
Certificate and does hereby irrevocably constitute and appoint attorney to transfer the
Certificate 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 Certificate 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 244.17 Ad -15(a)(2).
The Registrar will not effect transfer of this Certificate unless the information concerning the
transferee requested below is provided.
Name and Address:
(Include information for all joint owners if the Certificate is held by joint account.)
12
14290900
8. Execution: Tem ma Certificates. The Certificates shall be printed (or, at the
request of the Purchaser, typewritten) and shall be executed on behalf of the City by the
signatures of its Mayor and Administrator and be sealed with the seal of the City; provided,
however, that the seal of the City may be a printed (or, at the request of the Purchaser,
photocopied) facsimile; and provided fiuther that both of the signatures may be printed (or, at the
request of the Purchaser, photocopied) facsimiles and the corporate seal may be omitted on the
Certificates as permitted by law. In the event of disability or resignation or other absence of
either officer, the Certificates 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 Certificates shall cease to be such officer before
the delivery of the Certificates, 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. The
City may elect to deliver, in lieu of printed definitive certificates, one or more typewritten
temporary certificates in substantially the form set forth above, with such changes as may be
necessary to reflect more than one maturity in a single temporary certificate. Such temporary
certificates may be executed with photocopied facsimile signatures of the Mayor and
Administrator. Such temporary certificates shall, upon the printing of the definitive certificates
and the execution thereon be exchanged therefor and canceled.
9. Authentication, No Certificate 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
the Certificate, substantially in the form hereinabove set forth, shall have been duly executed by
an authorized representative of the Registrar. Certificates of Authentication on different
Certificates need not be signed by the same person. The Registrar shall authenticate the
signatures of officers of the City on each Certificate by execution of the Certificate of
Authentication on the Certificate and, by inserting as the date of registration in the space
provided, the date on which the Certificate is authenticated, except that for purposes of
delivering the original Certificates to the Purchaser, the Registrar shall insert as a date of
registration the date of original issue, which date is August 1, 2002. The Certificate of
Authentication so executed on each Certificate shall be conclusive evidence that A has been
authenticated and delivered under this resolution.
10. Registration: Transfer: Exchan¢e. The City will cause to be kept at the principal
office of the Registrar a certificate register in which, subject to such reasonable regulations as the
Registrar may prescribe, the Registrar shall provide for the registration of Certificates and the
registration of transfers of Certificates entitled to be registered or transferred as herein provided.
Upon surrender for transfer of any Certificate at the principal office of the Registrar, the
City shall execute (if necessary), and the Registrar shall authenticate, insert the date of
registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee
or transferees, one or more new Certificates 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 Certificate may be registered in blank or
in the name of "bearer" or similar designation.
13
14290900
At the option of the Holder, Certificates may be exchanged for Certificates of any
Authorized Denomination or Denominations of a like aggregate principal amount and stated
maturity, upon surrender of the Certificates to be exchanged at the principal office of the
Registrar. Whenever any Certificates are so surrendered for exchange, the City shall execute (if
necessary), and the Registrar shall authenticate, insert the date of registration of, and deliver the
Certificates which the Holder making the exchange is entitled to receive.
All Certificates surrendered upon any exchange or transfer provided for in this resolution
shall be promptly canceled by the Registrar and thereafter disposed of as directed by the City.
All Certificates delivered in exchange for or upon transfer of Certificates shall be valid
general obligations of the City evidencing the same debt, and entitled to the same benefits under
this resolution, as the Certificates surrendered for such exchange or transfer.
Every Certificate 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
Registrar, duly executed by the Holder thereof or the Holder's attorney duly authorized in
writing.
The 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 Certificate and
any legal or unusual costs regarding transfers and lost Certificates.
Transfers shall also be subject to reasonable regulations of the City contained in any
agreement with the Registrar, including regulations which permit the Registrar to close its
transfer books between record dates and payment dates. The Administrator is hereby authorized
to negotiate and execute the terms of said agreement.
11. Rights Upon Transfer or Exchange. Each Certificate delivered upon transfer of or
in exchange for or in lieu of any other Certificate shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Certificate.
12. Interest P4==: Record Date. Interest on any Certificate shall be paid on each
Interest Payment Date by check or drab mailed to the person in whose name the Certificate is
registered (the "Holder") on the registration books of the City maintained by the Registrar and at
the address appearing thereon at the close of business on the fifteenth (15th) 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 Registrar whenever money
becomes available for payment of the defaulted interest. Notice of the Special Record Date shall
be given by the Registrar to the Holders not less than ten (10) days prior to the Special Record
Date.
14
14290900
13. Treatment of ReW=Md Owner. The City and Registrar may treat the person in
whose name any Certificate is registered as the owner of the Certificate for the purpose of
receiving payment of principal of and premium, if any, and interest (subject to the payment
provisions in paragraph 12 above) on, such Certificate and for all other purposes whatsoever
whether or not the Certificate shall be overdue, and neither the City nor the Registrar shall be
affected by notice to the contrary.
14. Delivery AWQQatim of Proceeds. The Certificates when so prepared and
executed shall be.delivered by the 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.
15. Fund and Accounts. There is hereby created a special fund to be designated the
"General Obligation Equipment Certificates, Series 2002A Fund" (the "Fund") to be
administered and maintained by the Finance Director 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 in the manner herein specified until all of the Certificates and the interest thereon
have been fully paid. There shall be maintained in the Fund two (2) separate accounts, to be
designated the "Capital Account" and "Debt Service Account", respectively.
(a) CApital Account. To the Capital Account there shall be credited the proceeds of
the sale of the Certificates, less any amount paid for the Certificates in excess of $435,600 and
less accrued interest received thereon. From the Capital Account there shall be paid all costs and
expenses of the acquisition of the Equipment including all costs incurred and to be incurred of
the kind authorized in Minnesota Statutes, Section 475.65. The moneys in the Capital Account
shall be used for no other purpose except as otherwise provided by law; provided that the
proceeds of the Certificates may also be used to the extent necessary to pay interest on the
Certificates due prior to the anticipated date of commencement of the collection of taxes herein
levied.
(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 Certificates; (ii) any amount paid for the Certificates in excess of $435,600; (iii)
any collections of all taxes herein or hereafter levied for the payment of the Certificates and
interest thereon; (iv) all funds remaining in the Capital Account after the payment of all costs of
the Project; (v) all investment earnings on funds held in the Debt Service Account; and (vi) 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 of the Certificates and any other general obligation certificates 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 Certificates 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 Certificates were issued and (2) in addition to
the above in an amount not greater than the lesser of five percent (5%) of the proceeds of the
15
1429090x1
Certificates or $100,000. To this effect, any proceeds of the Certificates and any sums from time
to time held in the Capital Account or Debt Service Account (or any other City account which
will be used to pay principal or interest to become due on the certificates 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 Certificates to be "federally guaranteed" within
the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code").
16. Tax Levy: Coverage Test. To provide moneys for payment of the principal and
interest on the Certificates there is hereby levied upon all of the taxable property m 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
Year of Tax
Lev
collection
Amount
2002
2003
$94,006.50
2003
2004
$97,996.50
2004
2005
$101,684.63
2005
2006
$99,605.63
2006
2007
$102,493.13
The tax levies are such that if collected in full they, together with other revenues herein pledged
for the payment of the Certificates, will produce at least five percent (5%) in excess of the
amount needed to meet when due the principal and interest payments on the Certificates. The
tax levies shall be i repealable so long as any of the Certificates 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.
17. 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"),
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) to provide or cause to be provided, (i) (a) upon request to any person, or (b) upon
establishment of a state information depository ("SID"), to the SID, its audited financial
statements for the most recent fiscal year, and (ii) to each nationally recognized municipal
securities information repository ("NRMSW) or to the Municipal Securities Rulemaking Board
16
14290900
("MSRB") and the SID, if any, notice of the occurrence of certain material events with respect to
the Bonds in accordance with the Undertaking; and
(b) 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 Administrator 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 (i) consistent with the requirements under the
Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Officers.
18. Defeasance. When all Certificates have been discharged as provided in this
paragraph, all pledges, covenants and other rights granted by this resolution to the registered
holders of the Certificates shall cease. The City may discharge its obligations with respect to any
Certificates which are due on any date by irrevocably depositing with the Registrar on or before
that date a sum sufficient for the payment thereof in full; or if any Certificate should not be paid
when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for
the payment thereof in full with interest accrued to the date of such deposit. The City may also
at any time discharge its obligations with respect to any Certificates, 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, subject
to sale and/or reinvestment, to pay all amounts to become due thereon to maturity.
19. General Obligation Pledge. For the prompt and full payment of the principal and
interest on the Certificates, 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 Certificates
and any other certificates 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 or without interest from the Debt Service Account when a sufficient balance is
available therein.
20. Certificate of Rem The Administrator is hereby directed to file a certified
copy of this resolution with the County Auditor of Washington County, Minnesota, together with
such other information as the County Auditor shall require, and to obtain from the County
Auditor a certificate that the Certificates have been entered in the County Auditor's Register and
that the tax levy required by law has been made.
17
14290900
21. 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 Certificates, certified copies of all proceedings and records of the City relating to
the Certificates 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 Certificates 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.
22. CM&M with Reimbursement Bond Regulations. The provisions of this
paragraph are intended to establish and provide for the City's compliance with United States
Treasury Regulations Section 1.150-2 (the "Reimbursement Regulations") applicable to the
"reimbursement proceeds" of the Certificates, being those portions thereof which will be used by
the City to reimburse itself for any expenditure which the City paid or will have paid prior to the
Closing Date (a "Reimbursement Expenditure").
The City hereby certifies and/or covenants as follows:
(a) Not later than 60 days after the date of payment of a Reimbursement Expenditure,
the City (or person designated to do so on behalf of the City) has made or will have made a
written declaration of the City's official intent (a "Declaration") which effectively (i) states the
City's reasonable expectation to reimburse itself for the payment of the Reimbursement
Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional
description of the property, project or program to which the Declaration relates and for which the
Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the
general functional purpose thereof from which the Reimbursement Expenditure was to be paid
(collectively the "Project"); and (iii) states the maximum principal amount of debt expected to be
issued by the City for the purpose of financing the Project; provided, however, that no such
Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for
the Project, defined in the Reimbursement Regulations to include engineering or architectural,
surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not
exceed 20% of the "issue price" of the Certificates, and (ii) a de minims amount of
Reimbursement Expenditures not in excess of the lesser of $100,000 or 5% of the proceeds of
the Certificates.
(b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of
the Certificates or any of the other types of expenditures described in Section 1.150-2(d)(3) of
the Reimbursement Regulations.
(c) The "reimbursement allocation" described in the Reimbursement Regulations for
each Reimbursement Expenditure shall and will be made forthwith following (but not prior to)
the issuance of the Certificates and in all events within the period ending on the date which is the
later of three years after payment of the Reimbursement Expenditure or one year after the date on
which the Project to which the Reimbursement Expenditure relates is first placed in service.
18
14290900
(d) Each such reimbursement allocation will be made in a writing that evidences the
City's use of bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30
days after the Certificates are issued, shall be treated as made on the day the Certificates are
issued.
Provided, however, that the City may take action contrary to any of the foregoing covenants in
this paragraph 21 upon receipt of an opinion of its Bond Counsel for the Certificates stating in
effect that such action will not impair the tax-exempt status of the Certificates.
23. Negative Covenant as to Use of Certificate Proceeds and Egumment. The City
hereby covenants not to use the proceeds of the Certificates or the Equipment financed thereby,
or to cause or permit them to be used, or to enter into any deferred payment arrangements for the
cost of the Equipment, in such a manner as to cause the Certificates to be "private activity bonds"
within the meaning of Sections 103 and 141 through 150 of the Code.
24. T� t Status of the Certificates: 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 Certificates, 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 Certificates, and (3) the rebate of excess
investment earnings to the United States if the Certificates (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 fords, determines and
declares that (1) the Certificates are issued by a governmental unit with general taxing powers,
(2) no Certificate is a private activity bolsi, (3) ninety-five percent (95%) or more of the net
proceeds of the Certificates 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 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 Certificates 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.
25. DwIgnation of Qualified Tax Exempt Obligijim. In order to qualify the
Certificates 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 Certificates are issued after August 7,1986;
(b) the Certificates are not "private activity bonds" as defined in Section 141 of the
Code;
19
14290900
(c) the City hereby designates the Certificates 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 2002 will
not exceed $10,000,000; and
(e) not more than $10,000,000 of obligations issued by the City during this calendar
year 2002 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. SeverabilitX. 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
27. Headings. Headings in this resolution are included for convenience of reference
only and are not a part hereon and shall not limit or define the meaning of any provision hereot
motion fog the adoption of the foregoing resolution was duly seconded by Member
and, after a full discussion thereof and upon vote being taken
thereon, the follow' g voted in fayvsof thereof..,.--)
,
and the following voted agiinst the same:
Whereupon the resolution was declared duly passed and adopted
AA4
F on, Mayor
ATTEST:
Mary n Creager, City Wrk
1429090x1
STATE OF MINNESOTA
WASHINGTON COUNTY
CITY OF HUGO
I, the undersigned, being the duly qualified and acting Administrator 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 autbora ng the issuance and awarding the
sale of $440,000 General Obligation Equipment Certificates, Series 2002A.
WITNESS my hand this 5th day of August, 2002. F
AdialMstrator
21
14290900