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HomeMy WebLinkAbout2010-09-01 PACKET 06.A.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # A q DATE 8/11/10 PREPARED BY Finance Robin Roland ORIGINATING DEPARTMENT DEPARTMENT HEAD COUNCIL ACTION REQUEST To adopt a resolution setting a Public Hearing for September 1, 2010 on the intention to issue GO Capital Improvement Plan Bonds for the construction of a Public Safety /City Hall building. STAFF RECOMMENDATION To adopt a resolution setting a Public Hearing for September 1, 2010 on the intention to issue GO Capital Improvement Plan Bonds for the construction of a Public Safety /City Hall building. BUDGET IMPLICATION BUDGETED AMOUNT ADVISORY COMMISSION ACTION DATE ❑ PLANNING ❑ PUBLIC SAFETY ❑ PUBLIC WORKS ❑ PARKS AND RECREATION ❑ HUMAN SERVICES /RIGHTS ❑ ECONOMIC DEV. AUTHORITY SUPPORTING DOCUMENTS ® MEMO /LETTER: ® RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ❑ OTHER: REVIEWED El El El ACTUAL AMOUNT APPROVED DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ t ADMINISTRATORS COMMENTS y \l 5R5�. �e,. p f A E , / v �tl Y ✓ ^� d � t \ i 1 1 `,M �CityAdministrator Date City of • •- Grove Finance Department Memo TO: Honorable Mayor and City Council Ryan Schroeder, City Administrator CA FROM: Robin Roland, Finance Director DATE: August 4, 2010 RE: Adopt Resolution calling for a Public Hearing to issue GO Capital Improvement Plan Bonds Introduction Funding for the construction of a new Public Safety /City Hall facility is anticipated to come from the issuance of General Obligation Capital Improvement Plan bonds. Statutes require a public hearing take place prior to debt issuance. Discussion Cities may finance construction of Public Facilities using General Obligation (GO) Capital Improvement Plan bonds. This debt instrument was available to Counties for many years prior to 2003 when it became available to Cities. Minnesota State Statute Chapter 475 allows for GO Capital Improvement Plan debt to be used to finance construction of City Hall, Public Safety, Public works or Library facilities. The statute requires that a public hearing be held to review a five year capital improvement plan which includes the project to be bonded for. After the hearing, a thirty day reverse referendum period allows for any potential challenge from taxpayers. Once the 30 day period expires without a challenge, the debt may be issued at any time. As previously presented, staff estimates the cost of the Public Safety /City Hall facility to be $17 million with approximately $5.3 million in cash available for project costs. The amount of debt issuance anticipated would be $11.7 million and the bond sale is anticipated to take place in 2011 when construction bids on the project are received. Debt service payments on these bonds would come from the City's tax levy. City Council approval of the attached resolution calling a public hearing for September 1, 2010 on the intention to issue GO Capital Improvement Plan bonds. RESOLUTION NO. RESOLUTION CALLING PUBLIC HEARING ON THE INTENTION TO ISSUE GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS AND THE PROPOSAL TO ADOPT A CAPITAL IMPROVEMENT PLAN WHEREAS, pursuant to Minnesota Statutes, Section 475.521 the City of Cottage Grove Minnesota (the "City ") may issue bonds to finance capital expenditures under its capital improvement plan (the "Plan ") without an election provided that, among other things, prior to issuing the bonds the City adopts the Plan after a public hearing thereon and publishes a notice of its intention to issue the bonds and the date and time of a hearing to obtain public comment on the matter, and WHEREAS, the City Council will hold a public hearing on its intention to issue general obligation capital improvement plan bonds and to adopt the Plan therefore pursuant thereto on September 1, 2010. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Cottage Grove, Minnesota, that the City Council hereby calls for a public hearing on its intent to issue the Bonds and to adopt the Plan therefore, such hearing to be held on the date and time set forth in Exhibit A attached hereto. The City Council is hereby directed to cause the notice to be published at least 14 but not more than 28 days before the hearing in the official newspaper of the City. Adopted by the City Council of the City of Cottage Grove this _ day of 2010. Myron Bailey, Mayor Attest: Caron M. Stransky, City Clerk 1 I01A1131rL1 CITY OF COTTAGE GROVE, MINNESOTA NOTICE OF PUBLIC HEARING ON INTENTION TO ISSUE GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS AND PROPOSAL TO ADOPT A CAPITAL IMPROVEMENT PLAN THEREFOR NOTICE IS HEREBY GIVEN, that the City Council of the City of Cottage Grove, Minnesota will meet on September 1, 2010 at 7:30 pm at the City Hall, 7516 80 Street South, Cottage Grove, Minnesota for the purpose of conducting a public hearing on (a) the intention to issue general obligation capital improvement plan bonds in an amount not to exceed $11,700,000 and (b) the proposal to adopt a capital improvement plan therefor. The proceeds of the bonds will be used to construct a new Public Safety /City Hall Facility pursuant to Minnesota Statutes, Section 475.521. All persons interested may appear and be heard at the time and place set forth above. If a petition requesting a vote on the issuance of the bonds is signed by voters equal to 5 percent of the votes cast in the last general election and is filed with the City within 30 days after the public hearing, the bonds may only be issued upon obtaining the approval of the majority of the voters voting on the question of issuing the bonds. Individuals unable to attend the public hearing can make written comment by writing to the City Clerk, City Hall, 7516 80 Street South, Cottage Grove, Minnesota, 55016. Written comments must be received prior to the public hearing. BY ORDER OF THE CITY COUNCIL City Clerk 2 REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 9/1 /10 PREPARED BY Finance Robin Roland ORIGINATING DEPARTMENT DEPARTMENT HEAD COUNCIL ACTION REQUEST 1. Hold required public hearing for the issuance of Capital Improvement Plan bonds to fund construction of a new Public Safety /City Hall facility. 2. Adopt resolution giving preliminary approval for the issuance of the City's General obligation Capital Improvement Plan bonds in an amount not to exceed $11,700,000 and adopting the City of Cottage Grove MN Capital Improvement Plan of 2011 through 2015. STAFF RECOMMENDATION Adopt the City of Cottage Grove MN Capital Improvement Plan of 2011 through 2015, including the resolution giving preliminary approval for the issuance of GO Capital Improvement Plan bonds in an amount not to exceed $11,700,000. BUDGET IMPLICATION BUDGETED AMOUNT ACTUAL AMOUNT ADVISORY COMMISSION ACTION DATE REVIEWED APPROVED DENIED ❑ PLANNING El El ❑ PUBLIC SAFETY ❑ PUBLIC WORKS F El ❑ PARKS AND RECREATION ❑ HUMAN SERVICES /RIGHTS ❑ ECONOMIC DEV. AUTHORITY ❑ ❑ 0 ❑ ❑ ❑ ❑ SUPPORTING DOCUMENTS ® MEMO /LETTER: Roland 8/27/10 ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ❑ OTHER: CIP packet w } City of Cottage Grove Finance Department • TO: FROM: DATE: RE: Introduction Honorable Mayor and City Council Ryan Schroeder, City Administrator Robin Roland, Finance Director August 27, 2010 Public Hearing — General Obligation Capital Improvement Plan Bonds Funding for the construction of a new Public Safety /City Hall facility is anticipated to come from the issuance of General Obligation Capital Improvement Plan bonds. Minnesota State Statutes require a public hearing take place as part of the issuance process. The City Council called for this public hearing at their August 11, 2010 meeting. Discussion Cities may finance construction of Public Facilities using General Obligation (GO) Capital Improvement Plan bonds. This debt instrument was available to Counties for many years prior to 2003 when it became available to Cities. Minnesota State Statute Chapter 475 allows for GO Capital Improvement Plan debt to be used to finance construction of City Hall, Public Safety, Public works or Library facilities. The statute requires that a public hearing be held to review a five year Capital Improvement Plan which includes the project to be bonded for. After the hearing, a thirty day reverse referendum period allows for any potential challenge from taxpayers. Once the 30 day period expires without a challenge, the debt may be issued at any time. As previously presented, staff estimates the cost of the Public Safety /City Hall facility to be $17 million with approximately $5.3 million in cash available for project costs. The amount of debt issuance anticipated would be $11.7 million (plus issuance costs) and the bond sale is anticipated to take place in August/September 2011, at the approximate time construction bids on the project are received. Debt service payments on these bonds would come from the City's tax levy. Hold the required public hearing. Subsequent to the hearing, adopt the attached Capital Improvement Plan 2011 -2015 including the resolution giving preliminary approval for the issuance of the City's General Obligation Capital Improvement Plan Bonds. This action requires approval of at least three fifths of the members. 2011 through 2015 Five-Year Capital Improvement Plan for the City of Cottage Grove, Minnesota September 1, 2010 Prepared by: Ehlers & Associates, Inc. 3060 Centre Pointe Drive Roseville, MN 55113 Sam 'EHLERS & ASS 0 C I A r L S t N C Table of Contents I. INTRODUCTION ......................................... ..............................3 II. PURPOSE ............................................................. ............................... 4 III. THE CAPITAL IMPROVEMENT PLANNING PROCESS ............. 5 IV. PROJECT SUMMARY ........................................ ............................... 6 V. FINANCING THE CAPITAL IMPROVEMENT PLAN ................... 9 PROJECT COSTS ..... ............................... .......................APPENDIX A PROPOSED CIP BOND ISSUES ............ .......................APPENDIX B PRE -SALE SCHEDULE .......................... .......................APPENDIX C RESOLUTIONS/NOTICE OF PUBLIC HEARING...... APPENDIX D Ehlers & Associates, Inc. Page 2 City of Cottage Grove, Minnesota Five -Year Capital Improvement Plan 2011 through 2015 f � MGM 11t�7i1r1�11i c��►i In 2003, the Minnesota State Legislature adopted a statute that generally exempts municipal bonds issued under a capital improvement program from the referendum requirements usually required for city halls, public works, and public safety facilities. The 2005 Legislature added towns to the meaning of a municipality and town halls and libraries to the meaning of a capital improvement. Ehlers & Associates, Inc. Page 3 A capital 'improvement is a major expenditure of municipal funds for the acquisition or betterment to public lands, buildings, or other improvements used as a city hall, town hall, library, public safety, or public works facility, which has a useful life of 5 years or more. For the purposes of Minnesota Statutes, Section 475.521, capital improvements do not include light rail transit or related activities, parks, road/bridges, administrative buildings other than city or town hall, or land for those facilities. However, this plan includes certain additional capital improvements beyond the scope of that statute. A Capital Improvement Plan (CIP) is a document designed to anticipate Capital Improvement expenditures and schedule them over a five - year period so that they may be purchased in the most efficient and cost effective method possible. A CIP allows the matching of expenditures with anticipated income. As potential expenditures are reviewed, the municipality considers the benefits, costs, alternatives and impact on operating expenditures. The City of Cottage Grove, Minnesota (the "City ") believes the capital improvement process is an important element of responsible fiscal management. Major capital expenditures can be anticipated and coordinated so as to minimize potentially adverse financial impacts caused by the timing and magnitude of capital outlays. This coordination of capital expenditures is important to the City in achieving its goals of adequate physical assets and sound fiscal management. In these financially difficult times good planning is essential for the wise use of limited financial resources. The Capital Improvement Plan is designed to be updated on an annual basis. In this manner, it becomes an ongoing fiscal planning tool that continually anticipated future capital expenditures and funding sources. Ehlers & Associates, Inc. Page 4 III. THE CAPITAL IMPROVEMENT PLANNING PROCESS The capital improvement planning process is as follows; the City Council authorizes the preparation of the Capital Improvement Plan (CIP). The City staff is instructed to assemble the capital expenditures to be undertaken within the next five years. The City Council then reviews the expenditures according to their priority, fiscal impact, and available funding. From this information, a preliminary capital improvement plan is prepared. A public hearing is held to solicit input from citizens and other governmental units. Changes are made based on that input, and a final project list is established. The City Council then prepares a plan based on the available funding sources. If general obligation bonding is necessary, the City works with its financial advisor to prepare a bond sale and repayment schedule. Over the life of the CIP, once the funding, including proceeds from the bond sales becomes available, the individual capital expenditures can be made. In subsequent years, the process is repeated as expenditures are completed and as new needs arise. Capital improvement planning looks five years into the future. For a municipality to use its authority to finance expenditures under Section 475.521, it must meet the requirements provided therein. Specifically, the governing body must approve the sale of capital improvement bonds by a 3 /5ths majority of its membership. In addition, it must hold a public hearing for public input. Notice of such hearing must be published in the official newspaper of the municipality at least 14, but not more than 28 days prior to the date of the public hearing. In addition, the notice may be posted on the City's official web site. The governing body approves the CIP following the public hearing. Although a referendum is not required, a reverse referendum is allowable. If a petition bearing the signatures of at least 5 percent of the votes cast in the last general election requesting a vote on the issuance of bonds is received by the municipal clerk within 30 days after the public hearing, a referendum vote on the issuance of the bonds shall be called. Ehlers & Associates, Inc. Page 5 The expenditures to be undertaken with this Capital Improvement Plan (CIP) are limited to those listed below. All other foreseeable capital expenditures within the municipal government will come through other means. The following expenditures have been submitted for inclusion in this CIP: 20II Expenditures • Public Safety /CityHall $17,000,000 2012 Expenditures • None 2013 Expenditures • None 2014 Expenditures M►�.' 2013 Expenditures ® None Ehlers & Associates, Inc. Page 6 The statute has established certain criteria that must be met. Under these criteria, the City has considered the following eight points: 1. Condition of the City's infrastructure and need for the project 2. Demand for the improvement 3. Cost of the improvement 4. Availability of public resources 5. Level of overlapping debt 6. Cost /benefits of alternative uses of funds 7. Operating costs of the proposed improvements 8. Options for shared facilities with other cities or local governments The CIP is composed of projects that will preserve land located within the City for Public Safety /City Hall and other uses, provide safer roads, and allow the City's Public Safety and City Hall more space in a new area. The City has analyzed the eight points required per statute for each project on an individual basis and as a whole. Their findings are as follows: Conditions of City Infrastructure and Need for the Projects Due to City growth and the resulting increased demand for services, a new Public Safety/City Hall facility is necessary. The current facility was built in 1968 and expanded in 1973 and 1985 (adding the Public Safety Garage) and remodeled in 1995. At the time of the 1985 expansion, the City population was 20,800; currently the City population is 34,000 and is anticipated to grow to 53,000 in the next 20 years. In a 2006 space needs study it was determined that by 2010 we would need 34,674 square feet for our police and fire departments compared to the current 14,856 square feet. The study also identified that general government space was also deficient with a need for 14,881 square feet compared to 9,292 square feet currently. Long term, our general government space needs are not anticipated to grow further, but our public safety needs would increase to 42,959 square feet by 2040. Significant deficiencies exist in the current facility, most particularly in the Public Safety portion of the building. These deficiencies exist in detention spaces and interview areas, office and conference spaces, along with secure facilities for evidence retention and transfer /detention of prisoners. Ehlers & Associates, Inc. Page 7 Demand for Projects See above. Estimated Cost of the Projects See Project Summary for details of all project costs. Availability of Public Resources The City currently has cash in its "Municipal Building Capital Projects Fund" totaling $4,300,000 which is dedicated to the construction of a new facility. In addition, the General Fund has over $1,000,000 cash available to this construction project. Bond sale proceeds will complete the funding scenario for this project. Level of Overlapping Debt Taxing District 2009/10 City's Taxable Net % In Total Proportionate Tax Capacity City G.O. Debt Share County $289,098,586 11.9537% $113,525,000 $13,570,468 I.S.D. No. 200 34,335,332 1.7769% 54,220,000 96.,422 I.S.D. No. 833 104,221,535 32.5729% 295,095,000 96,120,944 Metropolitan 3,553,445,7250 0.9725 % 167,600,000 1,629,947 Council Relative Costs and Benefits of Alternative Uses of the Funds Since 2001, the City has annually put aside funding for the eventual expansion of the Public Safety /City Hall facility. Since funds have been set aside specifically for these purposes, alternative uses of the funds are not relevant. + The annual cost of operating the new Public Safety /City Hall facility is anticipated to be $340,000 or one and a half times the current annual Ehlers & Associates, Inc. Page 8 building budget of $230,000. Improvements in operational costs due to energy efficiency and other building upgrades are possible and may reduce this forecasted amount. Options for Shared Facilities with Other Cities or Local Government The new Public Safety /City Hall facility site is part of a larger "campus" site (known colloquially as the East Ravine site) which currently houses the South Washington County Service Center. Future plans for this site potentially include a County Library and/or a Community Center facility. Opportunities for shared building spaces will be examined during the design phase for the Public Safety /City Hall project. The new Public Safety /City Hall facility will house additional meeting space for civic and non - profit groups which the current facility lacks. V. FINANCING THE CAPITAL IMPROVEMENT PLAN The total amount of requested expenditures under the Capital Improvement Plan is $17,000,000. If these expenditures are to be funded, that amount of money is anticipated to be generated through the tax levy and the sale of $11,700,000 in bonds over the five -year period. In the financing of the Capital Improvement Plan, two statutory limitations apply. Under Chapter 475, with few exceptions, municipalities cannot incur debt in excess of 3% of the assessor's taxable market value for the municipality. In the City the TMV is $2,924,191,800. Therefore, the total amount of outstanding debt cannot exceed $87,725,754. As of August 27, 2010 the City had $6,110,000 subject to the legal debt limit. Another limitation on bonding under the Capital Improvement Plan Statute (475.521) is that without referendum, the total amount that can be used for principal and interest in any one year for CIP debt cannot exceed 0.16% of the TMV for the municipality. In the City, that amount is $4,678,707 ($2,924,191,800 x.0061). The principal and interest payments are estimated to average less than $850,000 annually from 2012 through 2029. Under the Capital Improvement Plan, the City will secure $11,700,000 in general obligation bonds in the year 2011 . to finance the Public Safety /City Ehlers & Associates, Inc. Page 9 Hall project. This general obligation bond issue will be repaid over a twenty -year period. The par amount of each issue is based on the amounts listed in Appendix A plus estimated issuance costs. The proposed general obligation capital improvement bonds (including issuance costs) are shown in Appendix B. Continuation of the Capital Improvement Plan This Capital Improvement Plan should be reviewed annually by the City Council using the process outlined in this Plan. It should review proposed expenditures, make priority decisions, and seek funding for those expenditures it deems necessary for the City. If deemed appropriate, the Council should prepare an update to this Plan. The future road work described in this Plan might constitute "reconstruction" under Minnesota Statutes, Section 475.58, Subdivision 3a, which would allow the issuance of bonds without an election even if there are not planned special assessments for that work. However, this Capital Improvement Plan would not meet the requirements for a five -year "street reconstruction plan." If the City later plans to issue reconstruction bonds, the City would need to prepare a separate reconstruction plan, or an amendment to this Plan that specifically describes the streets to be reconstructed. Ehlers & Associates, Inc. Page 10 " 1\i !. . (Capital Expenditures to be funded with Bond Proceeds) The 2011 capital expenditure of $17,000,000 for a new 58,000 square foot Public Safety /City Hall building will be funded with $5,300,000 cash reserves and $11,700,000 bond proceeds. The new Public Safety /City Hall facility will replace the existing City Hall/Police Department facility which was built in 1968. It will house office and meeting spaces for the City Council, Administration, Fiance, Information Technology, Planning, Building inspections and Community Development departments. It will also house office and meeting spaces for the Police administration, Investigations, Fire and EMS administration departments in addition to roll -call, office facilities, and secure parking, evidence storage, sally -port, and detention facilities for Police Patrol officers. Ehlers & Associates, Inc. Page 11 #: Y. , :. 2011: $11,700,000 CIP Bonds Ehlers & Associates, Inc. Page 12 Pre -Sale Schedule dated September 1, 2010 5 -Year City Capital Improvement Plan Bond Issuance City of Cottage Grove, Minnesota The City Council must take the following actions before Bonds can be issued: • City Council directs preparation of a 5 -Year Capital Improvement Plan. • City Council conducts a Public Hearing on issuance of Bonds and Capital Improvement Plan. • City Council approves Bonds and Capital Improvement Plan by at least a 3 /5ths vote of the governing body membership. The table below lists the steps in the issuing process: 08/11/10 City Council adopts Resolution calling for Public Hearing on issuance of Bonds and on Capital Annual Levy Limit Improvement Plan. 08/12/10 Close date to get Notice of Public Hearing on issuance of Bonds and on Capital Improvement Plan to Assessor's Taxable Market Value official newspaper for publication. 08/18/10 Publish Notice of Public Hearing on issuance of Bonds and on Capital Improvement Plan (publication Multiply by .16% no more than 28 days and no less than 14 days prior to hearing date). Additionally, notice may be Statutory Debt Limit p osted on the City's official web site, if any. 09/01/10@7:30 City Council holds Public Hearing on Bonds and on Capital Improvement Plan and adopts Resolution Less: Debt Paid Solely from Taxes giving preliminary approval for their issuance and approving Capital Improvement Plan by at least a Less: Annual Levy under CIP 3 /5ths vote of the governing body membership. i 09/01/10 City Council provides for sale of Bonds. 10/01/10 Reverse referendum period ends (within 30 days of the public hearing). 08/11 City Council accepts offer for Bonds and adopts Resolution- Approving sale of Bonds. !09/11 Tentative closing /receipt of funds. Net Debt Limit Annual Levy Limit Assessor's Taxable Market Value 2,924,191,800 Assessor's Taxable Market Value 2,924,191,800 Multiply by 3% 0.03 Multiply by .16% 0.0016 Statutory Debt Limit 87,725,754 Statutory Levy Limit 4,678,707 Less: Debt Paid Solely from Taxes (6,110,000) Less: Annual Levy under CIP (900,000) Unused Debt Limit 81,615,754 Unused Levy Limit 3,778,707 Ehlers & Associates, Inc. Page 13 RESOLUTION NO. RESOLUTION CALLING PUBLIC HEARING ON THE INTENTION TO ISSUE GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS AND THE PROPOSAL TO ADOPT A CAPITAL IMPROVEMENT PLAN WHEREAS, pursuant to Minnesota Statutes, Section 475.521 the City of Cottage Grove Minnesota (the "City ") may issue bonds to finance capital expenditures under its capital improvement plan (the "Plan ") without an election provided that, among other things, prior to issuing the bonds the City adopts the Plan after a public hearing thereon and publishes a notice of its intention to issue the bonds and the date and time of a hearing to obtain public comment on the matter, and WHEREAS, the City Council will hold a public hearing on its intention to issue general obligation capital improvement plan bonds and to adopt the Plan therefore pursuant thereto on September 1, 2010. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Cottage Grove, Minnesota, that the City Council hereby calls for a public hearing on its intent to issue the Bonds and to adopt the Plan therefore, such hearing to be held on the date and time set forth in Exhibit A attached hereto. The City Council is hereby directed to cause the notice to be published at least 14 but not more than 28 days before the hearing in the official newspaper of the City. Adopted by the City Council of the City of Cottage Grove this _ day of 2010. Myron Bailey, Mayor Attest: Caron M. Stransky, City Clerk Ehlers & Associates, Inc. Page 14 ARM RO. W. CITY OF COTTAGE GROVE, MINNESOTA NOTICE OF PUBLIC HEARING ON INTENTION TO ISSUE GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS AND PROPOSAL TO ADOPT A CAPITAL IMPROVEMENT PLAN THEREFOR NOTICE IS HEREBY GIVEN, that the City Council of the City of Cottage Grove, Minnesota will meet on September 1, 2010 at 7:30 pm at the City Hall, 7516 80 Street South, Cottage Grove, Minnesota for the purpose of conducting a public hearing on (a) the intention to issue general obligation capital improvement plan bonds in an amount not to exceed $11,700,000 and (b) the proposal to adopt a capital improvement plan therefor. The proceeds of the bonds will be used to construct a new Public Safety /City Hall Facility pursuant to Minnesota Statutes, Section 475.521. All persons interested may appear and be heard at the time and place set forth above. If a petition requesting a vote on the issuance of the bonds is signed by voters equal to 5 percent of the votes cast in the last general election and is filed with the City within 30 days after the public hearing, the bonds may only be issued upon obtaining the approval of the majority of the voters voting on the question of issuing the bonds. Individuals unable to attend the public hearing can make written comment by writing to the City Clerk, City Hall, 7516 80 Street South, Cottage Grove, Minnesota, 55016. Written comments must be received prior to the public hearing. BY ORDER OF THE CITY COUNCIL City Clerk Ehlers & Associates, Inc. Page 15 STATE OF MINNESOTA COUNTY OF CITY OF I, the undersigned, being duly qualified and acting Clerk of the City of , 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 of said City, duly called and held on the date therein indicated, insofar as such minutes relate to the City Council calling a public bearing on the intension to issue general obligation capital improvement plan bonds and proposal to adopt a capital improvement plan therefor. WITNESS my hand on this day of 20. City Clerk Ehlers & Associates, Inc. Page 16 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF COTTAGE GROVE , MINNESOTA HELD: SEPTEMBER 1, 2010 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Cottage Grove, Minnesota, was duly called and held at the City Hall in Cottage Grove Minnesota on Wednesday the I" day of September, 2010 at 7:30 PM for the purpose, in part, of giving preliminary approval for the issuance of the City's general obligation capital improvement plan bonds and adopting the City's capital improvement plan. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION GIVING PRELIMINARY APPROVAL FOR THE ISSUANCE OF THE CITY'S GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS IN AN AMOUNT NOT TO EXCEED $11,700,000 AND ADOPTING THE CITY OF COTTAGE GROVE, MINNESOTA CAPITAL IMPROVEMENT PLAN OF 2011 . THROUGH 2015 THEREFOR A. WHEREAS, the City Council of the City of Cottage Grove, Minnesota (the "City") proposes to issue its general obligation capital improvement plan bonds (the "Bonds ") and adopt the City of Cottage Grove, Minnesota Capital Improvement Plan of 2011 through 2015 therefor (the "Plan"); and B. WHEREAS, the City has caused notice of the public hearing on the intention to issue the Bonds and on the proposed adoption of the Plan to be published pursuant to and in accordance with Minnesota Statutes, Section 475.521; and C. WHEREAS, a public hearing on the intention to issue the Bonds and on the proposed Plan has been held on this date, following published notice of the hearing as required by law; and D. WHEREAS, in approving the Plan, the City Council considered for each project and for the overall Plan: The condition of the City's existing infrastructure, including the projected need for repair and replacement; The likely demand for the improvement; The estimated cost of the improvement; The available public resources; Ehlers & Associates, Inc. Page 17 5. The level of overlapping debt in the City; 6. The relative benefits and costs of alternative uses of the funds; 7. Operating costs of the proposed improvements; and 8. Alternatives for providing services more efficiently through shared facilities with other local government units, and NOW, THEREFOR, BE IT RESOLVED by the City Council of the City of Cottage Grove, Minnesota, that the City hereby gives preliminary approval for the issuance of up to $11,700,000 aggregate principal amount of the Bonds. The Plan is hereby adopted, the same being before the City Council and made a part of these proceedings by reference. The City declares its official intent to reimburse itself for the costs of the Plan from the proceeds of the Bonds. The motion for the adoption of the foregoing resolution was duly seconded by Member and, after full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. Ehlers & Associates, Inc. Page 18 STATE OF MINNESOTA COUNTY OF CITY OF I, the undersigned, being duly qualified and acting Clerk of the City of Cottage Grove, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the City Council of said City, duly called and held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a resolution giving preliminary approval for the issuance of the City's general obligation capital improvement plan bonds and adopting the City's capital improvement plan therefor. WITNESS my hand this day of 20 City Clerk [Bonds must be approved by at least three -fifths of the members.] [Issuance of Bonds is subject to a 30 -day reverse referendum after the public hearing.] Ehlers & Associates, Inc. Page 19