HomeMy WebLinkAbout1998-05-20 PACKET 07.A.REQUEST OF C�TY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM # /�
DATE 5/20/98 � �t� .
PREPARED BY Finance Liz Johnson
C7RIGINATING DEPARTMENT STAFF AUTHOR
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COUfVCIL ACTION REQUEST
Consider bid awards for bond sale:
1. Adopt resolution accepting proposal on sale of $3,940,000 General Obligation Series
1998A bonds and providing for their issuance and
2. Adopt resolution accepting praposal on sale of $1,060,000 General Obligation Series 19988
bonds and providing for their issuance
BUDGET IMPLICATION: $ $
BUDGETED AMOUNT ACTUAL AMOUNT FUNDING SOURCE
ADVISORY COMMISSION ACTION
DATE
REVIEWED
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APPROVED
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DENIED
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❑ PLANNING
❑ PUBLIC SAFETY
❑ PUBLIC WORKS
❑ PARKS AND RECREATION
❑ FiUMAtJ SERVICES(RIGHTS
❑ ECdNOMIC DEV. AUTHORITY
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SUPPORTING DOCUMENTS
❑ MEMO/LETTER:
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOiVIMENDATION:
❑ LEGAL RECOMMENDATION:
❑ C7THER:
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Date
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cc�vr�ci� ,ac �aK��: ❑ APP�ov�� ❑ ���i�a ❑ o-re-i�R
To: Honorable Mayor and City Council
CC: Ryan Schroeder, City Administrator
From: Elizabeth Johnson, Acting Pinance Director�'
Date: OS/14/98
Re: Bids for bond sale
Tl�e bids for the bond sale will be opened on May 20, 1998 and will be ready for Council
review on that date. The bids will be for two issues; $3,940,000 General Obligation Series
1998A and $1,060,000 General Obligation Series 1998B.
The series 1998A bonds are being issued to provide funding for 1998 Pavement
Management and 80' Street Improvements. The Series 1998$ bonds will provide funding
for West Draw Meadows and Pine Forest 3`
The Counci] approved the sale of the bonds at the meeting of May 6`�.
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
COTTAGE GROVE, MINNESOTA
HELD: May 20, 1998
Pursuant to due call and notice thereof, a regular
meeting of the City Council of the City of Cottage Grove,
Washington County, Minnesota, was duly held at the City Ha11 in
said City on Wednesday, the 20th day of May, 1998, at 7:30 P.M.
for the purpose, in part, of considering proposals for, and
awarding the sale of, $3,940,000 General Obligation Improvement
Bonds, Series 1998A of the City.
The following members were present:
and the following were absent:
Member introduced the
following resolution and moved its adoption:
RESOLUTION
ACCEPTING PROPOSAL ON SALE OF
$3,940,000 GENERAL OBLIGATION IMPROVEMENT
BONDS, SERIES 1998A, PROVIDING FOR
THEIR ISSUANCE, AND LEVYING A TAX FOR
THE PAYMENT THEREOF
A. WHEREAS, on May 6, 1998, the City Council of the
City of Cottage Grove, Minnesota (the "City"), adopted a
resolution (the "Preliminary Resolution"), which provided for the
sale of $3,940,000 General Obligation Improvement Bonds, Series
1998A (the "Bonds"}; and
B. WHEREAS, proposals to purchase the Bonds have been
solicited by Ehlers and Associates, Inc. ("Ehlers") in accordance
with the Preliminary Resolution; and
C. WHEREAS, the proposals set forth on Exhibit A
attached hereto were received and opened pursuant to the Bond
Sale Report established for the Bonds in the presence of the
Clerk, or designee, at the offices of Ehlers at 11:00 A.M.,
Central Time, this same day; and
D. WHEREAS, the City Council has heretofore
determined and declared that it is necessary and expedient to
issue the Bonds pursuant to Minnesota Statutes, Chapters 429 and
937915.1
475, to finance the construction of various public improvements
within the City (the "Improvements"); and
E. WHEREAS, the Improvements and all their components
have been ordered prior to the date hereof, after a hearing
thereon for which notice was given describing the Improvements or
al1 their components by general nature, estimated cost, and area
to be assessed; and
F. WHEREAS, it is in the best interests of the City
that the Bonds be issued in book-entry form as hereinafter
provided; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Cottage Grove, Minnesota, as follows:
1. Acceptance of Proposal. The proposal of
(the "Purchaser"), to
purchase the Bonds of the City (or individually, a"Bond"), in
accordance with the Bond Sa1e Report established for the Bonds,
at the rates of interest hereinafter set forth, and to pay
therefor the sum of $ , 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 said proposal maker. The Clerk is
directed to retain the deposit of said proposal maker and to
forthwith return to the unsuccessful proposal makers their good
faith checks or drafts,
2. Bond Terms.
(a) Title; OriQinal Issue Date; Denominations; Maturi
Combininq Maturities. The Bonds shall be titled "General
Obligation Improvement Bonds, Series 1998A", shall be dated
l, 1998, as the date of original issue and shall be issued
forthwith on or after such date as fully registered bonds.
Bonds shall be numbered from R-1 upward in the denomination
$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
2000
2001
2002
2003-2005
2006-2007
2008-2009
Amount
$280,000
165,000
160,000
165,000
170,000
175,000
All dates are inclusive.
Year
2010
2011
2012
2013
2014
June
The
of
Amount
$170,000
175,000
170,000
800,000
835,000
937915.1
For the purpose of complying with Minnesota Statutes,
Section 475.54, Subdivision l, the maturity schedule for the
Bonds has been combined with the maturity schedule for the
, as permitted by Minnesota Statutes, Section
475.54, Subdivision 2.
(b) Book Entry On1y 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 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 Bond 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
Bond 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 Bond 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 Bond 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 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 Register Holder of any Bonds (the
"Holder"). For gurposes 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
937915.1 3
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 Bond 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 Bond 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 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 Bonds
to the extent of the sum or sums so paid.
(v) Upon delivery by the Depository to the Bond
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 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 Bond 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.
93�915.1 4
(viii) In connection with any notice or other
communication to be provided to the Holders pursuant to this
Resolution by the City or Bond 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 Bond Registrar may establish a special record date for
such consent or other action. The City or the Bond
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 Bond 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.
(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 hereof,
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 Bond 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 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 such
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 Bond 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
937915.1 S
registered in whatever name or names the Holder of the Bonds
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 Bonds will be delivered to the
Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit or
restrict the provisions of paragraph 10 hereof.
(d) Letter of Representations. The provisions in the
Letter of Representation are incorporated herein by referenced
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 Representation
shall control. .
3. Purpose; Cost. The Bonds shall provide funds to
finance the Improvements in the City. The total cost of the
Improvements, which shall include all costs enumerated in
Minnesota Statutes, Section 475.65, is estimated to be at least
equal to the amount of the Bonds. The City covenants that it
shall do all things and perform all acts required of it to assure
that work on the Improvements proceeds with due diligence to
completion and that any and all permits and studies required
under law for the Improvements are obtained.
4. 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, 1999, 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
Year
2000
2001
2002
2003
2004
2005
2006
2007
Interest
Rate
%
Maturity
Year
2008
2009
2010
2011
2012
2013
2014
Interest
Rate
0
5. Redemption. All Bonds maturing in the years 2007
to 2014, both inclusive, shall be subject to redemption and
prepayment at the option of the City on February 1, 2006, and on
any date thereafter at a price of par plus accrued interest.
Redemption may be in whole or in part of the Bonds subject to
prepayment. If redemption is in part, the maturities and the
937915.1� 6
principal amounts within each maturity to be redeemed shall be
determined by the City; and if only part of the Bonds having a
common maturity date are called for prepayment, the specific
Bonds to be prepaid shall be chosen by lot by the Bond Registrar.
Bonds or portions thereof called for redemption shall be due and
payable on the redemption date, and interest thereon shall cease
to accrue from and after the redemption date. Notice of
redemption shall be given by registered or certified mail at
least thirty (30? days prior to the date fixed for redemption to
the paying agent and to each affected registered holder of the
Bonds at the address shown on the registration books.
To effect a partial redemption of Bonds having a common
maturity date, the Bond Registrar prior to giving notice of
redemption shall assign to each Bond having a commoa maturity
date a distinctive number for each $5,000 of the principal amount
of such Bond. The Bor.d Registrar shall then select by lot, using
such method of selection as it sha11 deem proper in its discre-
tion, from the numbers so assigned to such Bonds, as many numbers
as, at $5,000 for each number, shall equal the principal amount
of such Bonds to be redeemed. The Bonds to be redeemed shall be
the Bonds to which were assigned numbers so selected; provided,
however, that only so much of the principal amount of each such
Bond of a denomination of more than $5,000 sha11 be redeemed as
shall equal $5,000 for each number assigned to it and so
selected. If a Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the City or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the City and Bond Registrar duly executed by the
holder thereof or his, her or its attorney duly authorized in
writing) and the City shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Bond, without service charge, a new Bond or Bonds of the same
series having the same stated maturity and interest rate and of
any Authorized Denomination or Denominations, as requested by
such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
6. Bond Registrar. ,
in , , is appointed to act as
bond registrar and transfer agent with respect to the Bonds (the
"Bond Registrar"), and shall do so unless and until a successor
Bond Registrar is duly appointed, all pursuant to any contract
the City and Bond Registrar shall execute which is consistent
herewith. The Bond Registrar shall also serve as paying agent
unless and until a successor paying agent is duly appointed.
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 of this
resolution.
937915.7 7
7. 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:
937915.1 $
UNITED STATES OF AMERICA
STATE OF MINNESOTA
WASHINGTON COUNTY
CITY OF COTTAGE GROVE
�
GENERAL OBLIGATION IMPROVEMENT BOND, SERIES 1998A
INTEREST MATURITY DATE OF
RATE DATE ORIGINAL ISSUE CUSIP
JUNE l, 1998
REGISTERED OWNER:
PRINCIPAL AMOUNT:
I�• _ __.:
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Cottage Grove, 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, unless called for earlier redemption, 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 rebruary l, 1999, 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 wi11 bear interest from
the most recent Interest Payment Date to which interest has been
paid or, if no interest has been paid, from the date of original
issue hereof. The principal of and premium, if any, on this Bond
are payable upon presentation and surrender hereof at the
principal office of , in
, tthe "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 Zssuer 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
937915.1
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 regiatered
in the name of the Depository or ita Nominee as provided in the
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.]'
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
ZT IS HEREBY CERTIFZED 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.
` Include only until termination of the book-entry only
syetem under paragsaph 2 hereof.
937915.1 1 �
IN WITNESS WHEREOF, the City of Cottage
Washington County, Minnesota, by its City Council
Bond to be executed on its behalf by the facsimile
its Mayor and its C1erk, the corporate seal of the
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.
Bond Registrar
By
Authorized Signature
Registrable by:
Payable at:
Grove,
has caused this
signatures of
Issuer having
CITY OF COTTAGE GROVE,
WASHINGTON COUNTY, MINNESOTA
/s/ Facsimile
Mayor
/s/ Facsimile
Clerk
937915.1 � 1.�.
ON REVERSE OF BOND
Redemption. All Bonds of this issue (the "Bonds")
maturing in the years 2007 to 2014, both inclusive, are subject
to redemption and prepayment at the option of the Issuer on
February 1, 2006, and on any date thereafter at a price of par
plus accrued interest. Redemption may be in whole or in part of
the Bonds subject to prepayment. If redemption is in part, the
maturities and the principal amounts within each maturity to be
redeemed shall be determined by the Issuer; and if only part of
the Bonds having a common maturity date are called for
prepayment, the specific Bonds to be prepaid shall be chosen by
lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the redemption date, and
interest thereon shall cease to accrue from and after the
redemption date. Notice of redemption shall be given by
registered or certified mail at least thirty (30) days prior to
the date fixed for redemption to the paying agent and to each
affected Holder of the Bonds at the address shown on the
registration books.
Selection of Bonds for Redemption; Partial Redemption.
To effect a partial redemption of Bonds having a common maturity
date, the Bond Registrar shall assign to each Bond having a
common maturity date a distinctive number for each $5,000 of the
principal amount of such Bond. The Bond Registrar sha11 then
select by lot, using such method of selection as it shall deem
proper in its discretion, from the numbers assigned to the Bonds,
as many numbers as, at $5,000 for each number, shall equal the
principal amount of such Bonds to be redeemed. The Bonds to be
redeemed shall be the Bonds to which were assigned numbers so
selected; provided, however, that only so much of the principal
amount of such Bond of a denomination of more than $5,000 sha11
be redeemed as sha11 equal $5,000 for each number assigned to it
and so selected. If a Bond is to be redeemed only in part, it
shall be surrendered to the Bond Registrar (with, if the Issuer
or Bond Registrar so requires, a written instrument of transfer
in form satisfactory to the Issuer and Bond Registrar duly
executed by the Holder thereof or his, her or its attorney duly
authorized in writing) and the Issuer shall execute (if
necessary) and the Bond Registrar shall authenticate and deliver
to the Holder of such Bond, without service charge, a new Bond or
Bonds of the same series having the same stated maturity and
interest rate and of any Authorized Denomination or Denomina-
tions, as requested by such Holder, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the
principal of the Bond so surrendered.
937915.1 1 2
Issuance; Purpose; General Obligation. This Bond is
one of an issue in the total principal amount of $3,940,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate, denomination and redemption privilege,
which Bond has been issued pursuant to and in full conformity
with the Constitution and laws of the State of Minnesota and
pursuant to a resolution adopted by the City Council of the
Issuer on May 20, 1998 (the "Resolution"), for the purpose of
providing money to finance the construction of various public
improvements within the jurisdiction of the Issuer. This Bond is
payable out of the General Obligation Improvement Bonds, Series
1998A 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 as fully registered bonds 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 his, her or its 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 sha11 authenticate and deliver, in exchange for this
Bond, one or more new fully registered Bonds in the name of the
transferee (but not registered in blank or to "bearer" or similar
designation), of an Authorized Denomination or Denominations, in
aggregate principal amount equal to the principal amount of this
Bond, of the same maturity and bearing interest at the same rate.
Fees 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
937915.1 1 3
registered as the owner hereof for the purpose of receiving
payment as herein provided (except as otherwise provided on the
reverse side hereof with respect to the Record Date) and for all
other purposes, whether or not this Bond shall be overdue, and
neither the 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.
Oualified Tax-Exempt Oblic�ation. This Bond 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.
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
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
937915.1 14
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
assignment mus
as it appears
within Bond i
alteration or
Signature Guaranteed:
signature to this
t correspond with the name
upon the face of the
n every particular, without
any change whatever.
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 al1 joint owners
if the Bond is held by joint account.)
937915.1 1 5
[Use only for Bonds when they are
Registered in Hook Entry Only System]
PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s) and
in the amount(s) as follows:
AUTHORIZED SIGNATURE
DATE AMOUNT OF HOLDER
937915.1 1.6
8. Execution; Temporary Bonds. The Bonds 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 Clerk 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 further that both of such signatures may be printed (or,
at the request of the Purchaser, photocopied) facsimiles and the
corporate seal may be omitted on the Bonds as permitted by law.
In the event of disability or resignation or other absence of
either such officer, the Bonds may be signed by the manual or
facsimile signature of that officer who may act on behalf of such
absent or disabled officer. In case either such officer whose
signature or facsimile of whose signature shall appear on the
Bonds shall cease to be such officer before the delivery of the
Bonds, such signature or facsimile sha11 nevertheless be valid
and sufficient for all purposes, the same as if he or she had
remained in office until delivery. The City may elect to
deliver, in lieu of printed definitive bonds, one or more
typewritten temporary bonds in substantially the form set forth
above, with such changes as may be r.ecessary to reflect more than
one maturity in a single temporary bond. Such temporary bonds
may be executed with photocopied facsimile signatures of the
Mayor and Clerk. Such temporary bonds shall, upon the printing
of the definitive bonds and the execution thereof, be exchanged
therefor and cancelled.
9. Authentication. No Bond shall be valid or
obligatory for any purpose or be entitled to any security or
benefit under this resolution unless a Certificate of
Authentication on such Bond, substantially in the form
hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certificates of
Authentication on different Bonds need not be signed by the same
person. The Bond Registrar shall authenticate the signatures of
officers of the City on each Bond by execution of the Certificate
of Authentication on the Bond and by inserting as the date of
registration in the space provided the date on which the Bond is
authenticated, except that for purposes of delivering the
original Bonds to the Purchaser, the Bond Registrar shall insert
as a date of registration the date of original issue, which date
is June 1, 1998. The Certificate of Authentication so executed
on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
10. Reaistration; Transfer; ExchanQe. 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.
937915.1 1 7
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) 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.
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 Aolder thereof or his, her or its
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 af any Bond and any
legal or unusual costs regarding transfers and lost Honds.
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. The Clerk is hereby authorized to negotiate and execute
the terms of said agreement.
il. Riahts Upon Transfer or Exchanae. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
93�915.1 1 8
other Bond shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
12. 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 (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 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 (10) days prior to the Special
Record Date.
13. Treatment of Reqistered 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 above) on,
such Bond and for all other purposes whatsoever whether or not
such Bond shall be overdue, and neither the �ity nor the Bond
Registrar shall be affected by notice to the contrary.
14. Delivery; Application of Proceeds. The Bonds when
so prepared and executed shall be delivered by the Director of
Finance to the Purchaser upon receipt of the purchase price, and
the Purchaser shall not be obliged to see to the proper
application thereof.
15. Funds and Accounts. There is hereby created a
special fund to be designated the "General Obligation Improvement
Bonds, Series 1998A Fund" (the "Fund"), to be administered and
maintained by the Director of Finance as a bookkeeping account
separate and apart from all other accounts maintained in the
official financial records of the City. The Fund shall be
maintained 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 two (2) separate accounts, to be
designated the "Construction Account" and "Debt Service Account",
respectively.
(a) Construction Account. To the Construction Account
there shall be credited the proceeds of the sale of the Bonds,
less accrued interest received thereon, and less any amount paid
for the Bonds in excess of $3,800,600, and less capitalized
interest in the amount of $ (together with
937915.1 1 9
interest earnings thereon and subject to such other adjustments
as are appropriate to provide sufficient funds to pay interest
due on the Bonds on or before l, ), glus any special
assessments levied with respect to the Improvements and collected
prior to completion of the Improvements and payment of the costs
thereof. From the Construction Account there shall be paid all
costs and expenses of making the Improvements, including the cost
of any construction contracts heretofore let and all other costs
incurred and to be incurred of the kind authorized in Minnesota
Statutes, Section 475.65; and the moneys in the Construction
Account shall be used for no other purpose except as otherwise
provided by law; provided that the proceeds of the Bonds may also
be used to the extent necessary to pay interest on the Bonds due
prior to the anticipated date of commencement of the collection
of taxes or special assessments herein levied or covenanted to be
levied; and provided further that if upon completion of the
Improvements there shall remain any unexpended balance in the
Construction Account, the balance may be transferred by the
Council to the fund of any other improvement instituted pursuant
to Minnesota Statutes, Chapter 429, or transferred to the Debt
Service Account; and provided further that any special
assessments credited to the Construction Aecount shall only be
applied towards payment of the costs of the Improvements upon
adoption of a resolution by the City Council determining that the
application of the special assessments for such purpose will not
cause the City to no longer be in compliance with Minnesota
Statutes, Section 475.61, Subdivision l.
(b) Debt Service Account. There are hereby pledged and
there shall be credited to the Debt Service Account: (i? all
collections of special assessments herein covenanted to be levied
with respect to the Improvements and either initially credited to
the Construction Account and not already spent as permitted above
and required to pay any principal and interest due on the Bonds
or collected subsequent to the completion of the Improvements and
payment of the costs thereof; (ii) all accrued interest received
upon delivery of the Bonds; (iii) all funds paid for the Bonds in
excess of $3,800,600; (iv} capitalized interest in the amount of
$ (together with interest earnings thereon and
subject ta such other adjustments as are appropriate to provide
sufficient funds to pay interest due on the Bonds on or before
1, ); {v) any collections of all taxes herein or
hereafter levied for the payment of the Bonds and interest
thereon; (vi) all funds remaining in the Construction Account
after completion of the Improvements and payment of the costs
thereof, not so transferred to the account of another improve-
ment; (vii) all investment earnings on moneys held in the Debt
Service Account; and {viii) 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
937915.1 2 0
obligation bonds of the City hereafter issued by the City and
made payable from the Debt Service Account as provided by law.
No portion of the proceeds of the Bonds sha11 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 five percent (5a) of the proceeds
of the Bonds. To this effect, any sums from time to time held in
the Construction Account or Debt Service Account (or any other
City fund or 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 as to yield sha11 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. In addition, the proceeds of the Bonds
and money in the Construction Account or Debt Service Account
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 federal Internal Revenue Code of
1986, as amended (the "Code").
16. Assessments. It is hereby determined that no less
than twenty percent (20%) of the cost to the City of each
Improvement financed hereunder within the meaning of Minnesota
Statutes, Section 475.58, Subdivision 1(3), shall be paid by
special assessments to be levied against every assessable lot,
piece and parcel of land benefitted by the Improvements. The
City hereby covenants and agrees that it will let all
construction contracts not heretofore let within one year after
ordering each Improvement financed hereunder unless the
resolution ordering the Improvement specifies a different time
limit for the letting of construction contracts. The City hereby
further covenants and agrees that it will do and perform, as soon
as they may be done, all acts and things necessary for the final
and valid levy of such special assessments, and in the event that
any such assessment be at any time held invalid with respect to
any lot, piece or parcel of land due to any error, defect, or
irregularity in any action or proceedings taken or to be taken by
the City or this Council or any of the City officers or
employees, ei:ther in the making of the assessments or in the
performance of any condition precedent thereto, the City and this
Council will forthwith do all further acts and take all further
proceedings as may be required by law to make the assessments a
valid and binding lien upon such property.
937915.1 � 2 1
The special assessments have not heretofore been
authorized, and accordingly, for purposes of Minnesota Statutes,
Section 475.55, Subdivision 3, the special assessments are hereby
authorized. Subject to such adjustments as are required by
conditions in existence at the time the assessments are levied,
the assessments are hereby authorized and it is hereby determined
that the assessments shall be payable in equal, consecutive,
annual installments, including both principal and interest, with
interest at a rate per annum approximately percent (%)
per annum in excess of the net effective rate oE interest on the
Bonds (estimated at o):
Improvement
Designation
(i) 80` Street
Improvements
Amount
$ 600,000
Collection
Lev� Years Years
(ii) 1998 Pavement
Management Projects
TOTAL:
1998-2012 1999-2013
(for both) (for both)
At the time the assessments are in fact levied the City
Council shall, based on the then-current estimated collections of
the assessments, make any adjustments in any ad valorem taxes
required to be levied in order to assure that the City continues
to be in compliance with Minnesota Statutes, Section 475.61,
Subdivision l.
:�� ���
51.400,000
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
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
$
937915.1 z 2
2011 2012
2012 2013
The tax levies are such that if collected in full they,
together with estimated collections of special assessments and
other revenues herein pledged for the payment of the Bonds, will
produce at least five percent (5%) 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. 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 discharge
its obligations with respect to any prepayable Bonds called for
redemption on any date when they are prepayable according to
their terms, by depositing with the Bond Registrar on or before
that date a sum sufficient for the payment thereof in full,
provided that notice of redemption thereof has been duly given.
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 therenn to maturity or, if notice of redemption as herein
required has been duly provided for, to such earlier redemption
date.
19. Compliance With Reimbursement Bond Requlations.
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 Bonds, being
those portions thereof which will be used by the City to
reimburse itself for any expenditure which the City paid or wiil
have paid prior to the Closing Date (a "Reimbursement
Expenditure").
937915.7 2 3
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 shali
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 Bonds, and (ii)
a de minimis amount of Reimbursement Expenditures not
in excess of the lesser of $100,000 or 5% of the
proceeds of the Bonds. Notwithstanding the foregoing,
with respect to any Declaration made by the City
between January 27, 1992 and June 30, 1993, with
respect to a Reimbursement Expenditure made prior to
March 2, 1992, the City hereby represents that there
exists objective evidence, that at the time the
Expenditure was paid the City expected to reimburse the
cost thereof with the proceeds of a borrowing (taxable
or tax-exempt) and that expectation was reasonable.
(b) Each Reimbursement Expenditure is a capital expenditure
or a cost of issuance of the Bonds 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 Bonds and in all
events within the period ending on the date which is
the Tater of 18 months after payment of the Reimburse-
ment Expenditure or one year after the date on which
the Project to which the Reimbursement Expenditure
937915.1 2 4
relates is first placed in
three years after the date
Expenditure.
service, but not more than
of the Reimbursement
(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 Bonds are issued, shall be
treated as made on the day the Bonds are issued.
Provided, however, that the City may take action contrary to any
of the foregoing covenants in this paragraph 19 upon receipt of
an opinion of its Bond Counsel for the Bonds stating in effect
that such action will not impair the tax-exempt status of the
Bonds.
20. Continuina 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 to:
(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, 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, to
(i) each NRMSIR or to the Municipal Securities Rulemaking Board
("MSRB") and (ii) the SID, 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, to
(i) each NRMSIR or to the MSRB and (ii) the SID, 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 20 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.
93�915.1 2 5
The Mayor and Clerk of the City, or any other officer of the
City authorized to act in their place with "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.
21. General Obliqation Pledqe. For the prompt and
fu11 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 irrevocably pledged. If the
balance in the Debt Service Account is ever insufficient to pay
all principal and interest then due on the Bonds payable
therefrom, the deficiency shall be promptly paid out of any other
accounts of the City which are available for such purpose, and
such other funds may be reimbursed without interest from the Debt
Service Account when a sufficient balance is available therein.
22. Certificate of Reaistration. The Clerk 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 he or she sha11 require, and to obtain
the County Auditor's certificate that the Bonds have been entered
in the County Auditor's Bond Register, and that the tax levy
required by law had been made.
23. Records and Certificates The officers of the
City are hereby authorized and directed to prepare and furnish to
the Purchaser, and to the attorneys approving the legality of the
issuance of the Bonds, certified copies of all proceedings and
records of the City relating to the Bonds and to the financial
condition and affairs of the City, and such other affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Bonds as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
furnished,_ shall be deemed representations of the City as to the
facts recited therein.
24. Negative Covenant as to Use of Proceeds and
Improvements. The City hereby covenants not to use the proceeds
of the Bonds or to use the Improvements, or to cause or permit
them to be used, or to enter into any deferred payment
arrangements for the cost of the Improvements, in such a manner
as to cause the Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code.
25. Tax-Exempt Status of the Bonds: Rebate. The City
shall comply with requirements necessary under the Code to
937915.1' 2 6
establish and maintain the exclusion from gross income under
Section 103 of the Code of the interest on the Bonds, including
without limitation (1) requirements relating to temporary periods
for investments, (2) limitations on amounts invested at a yield
greater than the yield on the Bonds, and (3) the rebate of excess
investment earnings to the IInited 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 (1) the Bonds are issued by a
governmental unit with general taxing powers, (2) no Bond is a
private activity bond, (3) ninety-five percent (95°s) or more of
the net proceeds of the Bonds are to be used for local
governmental activities of the City (or of a governmental unit
the jurisdiction of which is entirely within the jurisdiction of
the City), and (4) the aggregate face amount of all tax-exempt
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.
26. Designation of Oualified Tax-Exempt ObliQations.
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 a11 subordinate entities whose obligations
are treated as issued by the City) during this calendar
year 1998 will not exceed $10,000,000; and
93?915.1 2 7
(e) not more than $10,000,000 of obligations
issued by the City during this calendar year 1998 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.
27. Payment of Issuance Expenses. The City authorizes
the Purchaser to forward the amount of Bond proceeds allocable to
the payment of issuance expenses to Resource Bank & Trust
Company, Minneapolis, Minnesota on the closing date for further
distribution as directed by the City's financial advisor, Ehlers.
28. Severabilitv. 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 sha11 not affect any of
the remaining provisions of this resolution.
29. Headinas. 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 and, after a full
discussion thereof and upon a vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
adopted.
Whereupon said resolution was declared duly passed and
937915.1 Z $
STATE OF MINNESOTA
COUNTY OF WASHINGTON
CITY OF COTTAGE GROVE
Z, the undersigned, being the duly qualified and acting
Clerk of the City of Cottage Grove, 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 ful1, 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 considering proposals for, and awarding the sale of,
$3,940,000 General Obligation Improvement Bonds, Series 1998A of
said City.
WITNESS my hand this 20th day of May, 1998.
Clerk
937915.1 Z 9
EXHIBIT A
.�•• ,
[To be supplied by Ehlers and Associates, Inc.]
937915.1 j�-�.
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
COTTAGE GROVE, MINNESOTA
HELD: May 20, 1998
Pursuant to due call and notice thereof,
meeting of the City Council of the City of Cottage
Washington County, Minnesota, was duly held at the
said City on Wednesday, the 20th day of May, 1998,
for the purpose, in part, of considering proposals
awarding the sale of, $1,060,000 General Obligation
Bonds, Series 1998B of the City.
The following members were present:
and the following were absent:
a regular
Grove,
City Hall in
at 7:30 P.M.
for, and
Improvement
Member introduced the
following resolution and moved its adoption:
RESOLUTION
ACCEPTING PROPOSAL ON SALE OF
$1,060,000 GENERAL OBLIGATION IMPROVEMENT
BONDS, SERIES 1998B, AND
PROVIDING FOR THEIR ISSUANCE
A. WHEREAS, on May 6, 1998, the City Council
City of Cottage Grove, Minnesota (the "City"), adopted a
resolution (the "Preliminary Resolution"), which provided
sale of $1,060,000 General Obligation Improvement Bonds,
1998B (the "Bonds"); and
of the
for the
Series
B. WFiEREAS, proposals to purchase the Bonds have been
solicited by Ehlers and Associates, Inc. ("Ehlers") in accordance
with the Preliminary Resolution; and
C. WHEREAS, the proposals set forth on Exhibit A
attached hereto were received and opened pursuant to the Bond
Sale Report established for the Bonds in the presence of the
Clerk, or designee, at the offices o£ Ehlers at 11:00 A.M.,
Central Time, this same day; and
D. WHEREAS, the City Council has heretofore
determined and declared that it is necessary and expedient to
issue the Bonds pursuant to Minnesota Statutes, Chapters 429 and
937167.1
475, to finance the construction of various public improvements
within the City (the "Improvements"); and
E. WHEREAS, the Improvements and all their components
have been ordered prior to the date hereof, after a hearing
thereon for which notice was given describing the Improvements or
all their components by general nature, estimated cost, and area
to be assessed; and
F. WHEREAS, it is in the best interests of the City
that the Bonds be issued in book-entry form as hereinafter
provided; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Cottage Grove, Minnesota, as follows:
1. Acceptance of Proposal. The proposal of
(the "Purchaser"), to
purchase the Bonds of the City {or individually, a"BOnd"), in
accordance with the Bond Sale Report established for the Bonds,
at the rates of interest hereinafter set forth, and to pay
therefor the sum of $ , 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 said proposal maker. The Clerk is
directed to retain the deposit of said proposal maker and to
forthwith return to the unsuccessful proposal makers their good
faith checks or drafts.
Bond Terms.
(a} Title: OriQinal Issue Date: Denominations: Maturities.
The Bonds shall be titled "General Obligation Improvement Bonds,
Series 1998B°, shall be dated June 1, 1998, as the date of
original issue and shall be issued forthwith on or after such
date as fully registered bonds. The Bonds shall be numbered from
R-1 upward in the denomination of $5,000 each or in any integral
multiple thereof of a single maturity (the "Authorized
Denominations"). The Bonds shall mature on February 1 in the
years and.amounts as follows:
Year Amount Year Amount
2000-2001 $350,000 2002 $360,000
All dates are inclusive.
(b) Book Entrv 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 successors to
its functions hereunder (the "Depository") will act as securities
depository for the Bonds, and to this end:
937167.1 z
(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 Bond 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
Bond 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 Bond 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 Bond Registrar, shall
have any auch 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 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 Register Holder of any Bonda (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
assigna its consenting or voting rights to certain
Participanta to whose accounts the Bonds are credited on the
record date identified in a listing attached to the omnibus
proacy.
(iv) The City and the Bond 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 Sonds, for the purpose of giving
notices of redemption and other matters with respect to the
Bonds, for the purpose of obtaining any conaent or other
action to be taken by Holders for the purpose of registering
937167.1 3
transfers with respect to such Bonds, and for all purpose
whatsoever. The Bond 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 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 Bonds
to the extent of the sum or sums so paid.
(v) Upon delivery by the Depoeitory to the Bond
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 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 Sond and all notices
with respect to such Bond shall be made and given,
respectively, by the Bond 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 Depoaitory for
the Bonds (said Letter of Repreaentations, 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 iasued in book-entry form shall be limited in
principal amount to Authorized Denominationa and shall be
effected by procedures by the Depository with the
Participants for recording and traneferring the ownerehip 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 Bond Registrar with respect to any
consent or other action to be taken by Holders, the
Depoeitory 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 Bond Registrar may establish a special record date for
such consent or other action. The City or the Bond
Registrar shall, to the extent possible, give the Depository
notice of such special record date not less than 15 calendar
937167.1 4
days in advance of such special record date to the extent
possible.
(ix} Any successor Bond 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.
(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 hereof,
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 Sy�tem. 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 Bond if it determines that the Depository is
no longer able to carry out ita functiona as securitiea
depoaitory or the continuation of the syatem 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
Depoaitory as provided in the preceding paragraph, and if no
substitute securities depository ia 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 such
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 Bond 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 Aolder of the Bonds
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 Bonds will be delivered to the
Seneficial Ownera.
(iii) Nothing in this subparagraph (c) shall limit or
restrict the proviaions of paragraph 10 hereof.
937167.1 5
�d) rPrrPr of Reoresentations. The provisions in the
Letter of Representation are incorporated herein by referenced
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 Representation
shall control.
3. P�ggse: Cost. The Bonds shall provide funds to
finance the Improvements in the City. The total cost of the
Improvements, which shall include all costs enumerated in
Minnesota Statutes, Section 475.65, is estimated to be at least
equal to the amount of the Bonds. The City covenants that it
shall do all things and perform all acts required of it to assure
that work on the Improvements proceeds with due diligence to
completion and that any and all permits and studies required
under law for the Improvements are obtained.
4. 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, 1999, 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
Year
2000
2001
Interest
Rate
�
Maturity
Year
2002
Intereat
Rate
�
5. Redemption. All Bonds maturing in the year 2002
shall be subject to redemption and prepayment at the option of
the City on February 1, 2001, and on any date thereafter at a
price of par plus accrued interest. Redemption may be in whole
or in part of the Bonds subject to prepayment. If redemption is
in part, the maturitiea and the principal amounts within each
maturity to be redeemed shall be determined by the City; and if
only part of the Bonds having a common maturity date are called
for prepayment, the agecific Bonds to be prepaid shall be chosen
by lot by the Bond Regiatrar. Bonda or portions thereof called
for redemption shall be due and payable on the redemption date,
and intereat thereon ahall cease to accrue from and after the
redemption date. Notice of redemption shall be given by
registered or certified mail at least thirty (30) days prior to
the date fixed for redemption to the paying agent and to each
affected regietered holder of the Bonds at the address shown on
the registration books.
To effect a partial redemption of Bonda having a common
maturity date, the Bond Registrar prior to giving notice of
redemption shall assign to each Bond having a common maturity
date a distinctive number for each $5,000 of the principal amount
937167.1 6
of such Bond. The Bond Registrar shall then select by lot, using
such method of selection as it shall deem proper in its discre-
tion, from the numbers so assigned to such Bonds, as many numbers
as, at $5,000 for each number, shall equal the principal amount
of such Bonds to be redeemed. The Bonds to be redeemed shall be
the Bonds to which were assigned numbers so selected; provided,
however, that only so much of the principal amount of each such
Bond of a denomination of more than $5,000 shall be redeemed as
shall equal $5,000 for each number asaigned to it and so
selected. If a Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the City or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the City and Bond Registrar duly executed by the
holder thereof or his, her or its attorney duly authorized in
writing) and the City shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Bond, without service charge, a new Bond or Bonds of the same
series having the same stated maturity and interest rate and of
any Authorized Denomination or Denominationa, as requested by
such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
6. Bond Registrar. ,
in , , 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 ahall execute which is consistent
herewith. The Bond Registrar shall also serve as paying agent
unless and until a successor paying agent is 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 of this
resolution.
7. Form of Bond. The Bonds, together with the Bond
Registrar's Gertificate of Authentication, the form of Aasignment
and the registration information thereon, shall be in
substantially the following form:
93716�.1 7
UNITED STATES OF AMERICA
STATE OF MINNESOTA
WASHINGTON COUNTY
CITY OF COTTAGE GRO�IE
Ei'ji
GENERAL OBLIGATION IMPROVEMENT BOND, SERIES 1998B
INTEREST
RATE
REGISTERED OWNER:
PRINCIPAL AMOLTNT:
MATURITY DATE OF
DATE ORIGINAL ISSUE UC SIP
JUNE 1, 1998
DOLL�ARS
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Cottage Grove, Washington County, Minnesota (the "Iasuer"),
certifies that it is indebted and for value received promises to
pay to the registered owner specified above, or registered
asaigns, unleas called for earlier redemption, 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 February 1, 1999, 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 , in
, (the "Bond Registrar"),
acting as paying agent, or any successor paying agent duly
appointed by the Isauer. 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 Regiatrar and at the address appearing thereon at the
close of busineas 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
93'7167.1
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 regiatered
in the name of the Depoeitory or ita Nom�aee as provided ia the
Resolution hereinafter dascribed, and ae thoee terme are defined
tharain, paymeat of priacipal of, premium, if any, and interest
on thia Bond and aotica with reapect therato ahall be made as
provided in the Letter of Representatioas, as defined in the
Reaolution, and aurrender of thia Bond ahall not be required for
paymant of the redemption price upon a partial redemption of this
Sond. Ontil termination of the book-entry only systam pursuant
to the Reeolution, Sonda may only be registered ia-the name of
the Depoaitory or ita Nominee.]`
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISZONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
IT SS AEREBY CERTIFZED 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 Sond, 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 ita issuance and delivery
to the original purchaser, does not exceed any constitutional or
statutory limitation of indebtedneas.
' Inelude only until termiaation of the book-eatry only
ayetem under paragraph 2 hereof.
937167.1 9
IN WITNESS WHEREOF, the City of Cottage Grove,
Washington County, Minnesota, by its City Council has caused this
Bond to be executed on its behalf by the facsimile signatures of
its Mayor and its Clerk, the corporate seal of the Issuer having
been intentionally amitted 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.
Bond Registrar
By
Authorized Signature
Registrable by:
Payable at:
CITY OF COTTAGE GROVE,
WASAINGTON COUNTY, MINNESOTA
1s/ Facsimile
Mayor
/s/ Facsimile
Clerk
9a�as�.i 1 0
ON REVERSE OF BOND
Redemption. All Bonds of this issue (the "Bonds")
maturing in the year 2002 are subject to redemption and
prepayment at the option of the Issuer on February 1, 2001, and
on any date thereafter at a price of par plus accrued interest.
Redemption may be in whole or in part of the Sonds subject to
prepayment. If redemption is in part, the maturities and the
principal amounts within each maturity to be redeemed shall be
determined by the Issuer; and if only part of the Bonds having a
common maturity date are called for prepayment, the specific
Bonds to be prepaid shall be chosen by lot by the Bond Registrar.
Bonds or portions thereof called for redemption shall be due and
payable on the redemption date, and interest thereon shall cease
to accrue from and after the redemption date. Notice of
redemption shall be given by registered or certified mail at
least thirty (30) days prior to the date fixed for redemption to
the paying agent and to each affected Holder of the Bonds at the
address shown on the registration books.
To effect a partial redemption of Bonds having a common maturity
date, the Bond Registrar shall assign to each Bond having a
common maturity date a distinctive number for each $5,000 of the
principal amount of such Bond. The Bond Registrar shall then
select by lot, using such method of selection as it shall deem
proper in its discretion, from the numbers assigned to the Bonds,
as many numbers as, at $5,000 for each number, shall equal the
principal amount of auch Bonds to be redeemed. The Bonds to be
redeemed shall be the Bonds to which were assigned numbers so
selected; provided, however, that only so much of the principal
amount of such Bond of a denomination of more than $5,000 ahall
be redeemed as shall equal $5,000 for each number assigned to it
and so selected. Sf a Bond is to be redeemed only in part, it
shall be surrendered to the Bond Registrar (with, if the Iesuer
or Bond Registrar so requires, a written instrument of transfer
in form satisfactory to the Issuer and Bond Registrar duly
executed by the Holder thereof or his, her or its attorney duly
authorized in writing) and the Issuer shall execute (if
necessary) and the Bond Registrar shall authenticate and deliver
to the Holder of such Bond, without service charge, a new Bond or
Bonds of the same series having the same stated maturity and
interest rate and of any Authorized Denomination or Denomina-
tions, as requested by auch I-iolder, in aggregate principal amount
egual to and in exchange for the unredeemed portion of the
principal of the Bond so surrendered.
937167.1 1 �.
Tssuance• Purpose• General O�liaation. This Bond is
one of an issue in the total principal amount of $1,060,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate, denomination and redemption privilege,
which Bond has been issued pursuant to and in full conformity
with the Constitution and laws of the State of Minnesota and
pursuant to a resolution adopted by the City Council of the
Issuer on May 20, 1998 (the "Resolution"), for the purpose of
providing money to finance the construction of various public
improvements within the jurisdiction of the Issuer. This Bond is
payable out of the General Obligation Improvement Bonds, Series
1998B 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
iseuable solely as fully registered bonds 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 his, her or its 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 conditiona 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
deaignation), of an Authorized Denomination or Denominations, in
aggregate principal amount equal to the principal amount of this
Bond, of the same maturity and bearing interest at the same rate.
Fees up4n 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 Zssuer and Bond
Registrar may treat the person in whose name this Bond is
43716�.1 1 a
registered as the owner hereof for the purpose of receiving
payment as herein provided (except as otherwise provided on the
reverse side hereof with respect to the Record Date) and for all
other purposes, whether or not this Bond shall be overdue, and
neither the 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.
n„aiified Tax-Exempt Obl�Qation. This Bond 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.
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 lawa 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
r7TMA - as custodian for
(Cust) (Minor)
under the Uniform
(State)
Transfers to Minors Act
Additional abbreviationa may also be used
though not in the above list.
9a�is�.a 13
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 corresponc� 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 truat
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 240.1'7 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.)
937167.1 14
[Uae only for Bonds whan they are
Regiatared in Book Entry Only Syatem]
PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s) and
in the amount(s) as follows:
AUTHORIZED SIGNATURE
DATE AMOUNT OF HOLDER
937167.1 1 5
8. Execution; Temporary Bonds. The Bonds 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 Clerk and be sealed with the ssal 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 further that both of such signatures may be printed (or,
at the request of the Purchaser, photocopied) facsimiles and the
corporate seal may be omitted on the Bonds as permitted by law.
In the event of disability or resignation or other absence of
either such officer, the Bonds may be signed by the manual or
facsimile signature of that officer who may act on behalf of such
absent or disabled officer. In case either such officer whose
signature or facsimile of whose signature shall appear on the
Bonds shall cease to be such officer before the delivery of the
Bonds, such signature or facsimile shall nevertheless be valid
and sufficient for all purposes, the same ae if he or she had
remained in office until delivery. The City may elect to
deliver, in lieu of printed definitive bonda, one or more
typewritten temporary bonds in substantially the form set forth
above, with such changes as may be necessary to reflect more than
one maturity in a single temporary bond. Such temporary bonds
may be executed with photocopied facsimile signatures of the
Mayor and Clerk. Such temporary bonds shall, upon the printing
of the definitive bonds and the execution thereof, be exchanged
therefor and cancelled.
9. Authentication. No Sond shall be valid or
obligatory for any purpose or be entitled to any security or
benefit under this resolution unless a Certificate of
Authentication on such Bond, substantially in the form
hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certificates of
Authentication on different Bonds need not be signed by the same
person. The Sond 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 iesue, which date
is June 1, 1998. The Certificate of Authentication so executed
on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
10. Reaistration: Transfer; Exchanae. The City will
cause to be kept at the principal office of the Bond Regiatrar a
bond register in which, subject to such reasonable regulationa as
the Bond Registrar may prescribe, the Bond Regietrar shall
provide for the registration of Bonds and the registration of
transfers of Bonds entitled to be registered or transferred as
herein provided.
937167.1 1 6
Upon surrender for transfer of any Bond at the
principal office of the Bond Regiatrar, the City shall execute
(if necessary), and the Bond Registrar shall authenticate, insert
the date of registration (aa provided in paragraph 9) 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 thia resolution shall be promptly cancelled by
the Bond Registrar and thereafter dispoaed of as directed by the
City.
Al1 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 his, her or its
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 coeta regarding transfers and lost Bonds.
Transfera 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 tranafer books between record dates and payment
dates. The Clerk ia hereby authorized to negotiate and execute
the terms of said agreement.
11. Riahts Ugon Tranafer or Exchanae. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
937167.1 1 7
other Bond shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
12, Tnterest Pavment• 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 (i5th) day of the calendar
month next preceding such Znterest 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 (10) days prior to the Special
Record Date.
13. Treatment of Regiatered 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 provisiona in paragraph 12 above) on,
such Bond and for all other purposes whatsoever whether or not
such Bond shall be overdue, and neither the City nor the Bond
Registrar shall be affected by notice to the contrary.
14. D� ive • Ap�lication of Proceeds. The Bonds when
so prepared and executed shall be delivered by the Director of
Finance to the Purchaser upon receipt of the purchase price, and
the Purchaser shall not be obliged to see to the proper
application thereof.
15. Funds and Accounts. There is hereby created a
special fund to be deaignated the "General Obligation Improvement
Bonds, Series 1998B Fund" (the "Fund"}, to be administered and
maintained by the Director of Finance as a bookkeeping account
separate and apart from all other accounts maintained in the
official financial records of the City. The Fund shall be
maintained in the manner herein apecified until all of the Bonds
and the interest thereon have been fully paid. There ahall be
maintained in the Fund two (2) separate accounts, to be
designated the "Conatruction Account" and "Debt Service Account",
respectively.
� ��nar Account. To the Construction Account
there shall be credited the proceeds of the sale of the Bonds,
less accrued interest received thereon, and less any amount paid
for the Bonds in excess of $1,053,640, and less capitalized
interest in the amount of $ (together with
937167.1 1 8
interest earnings thereon and subject to such other adjustments
as are appropriate to provide sufficient funds to pay interest
due on the Bonds on or before l, ), plus any special
assessments levied with respect to the Improvements and collected
prior to completion of the Improvements and payment of the costs
thereof. From the Construction Account there shall be paid all
costs and expenses of making the Improvements, including the cost
of any construction contracts heretofore let and all other costs
incurred and to be incurred of the kind authorized in Minnesota
Statutes, Section 475.65; and the moneys in the Construction
Account shall be used for no other purpose except as otherwise
provided by law; provided that the proceeds of the Bonds may also
be used to the extent necessary to pay interest on the Bonds due
prior to the anticipated date of commencement of the collection
of special assessments herein levied or covenanted to be levied;
and provided further that if upon completion of the Zmprovements
there shall remain any unexpended balance in the Construction
Account, the balance may be transferred by the Council to the
fund of any other improvement instituted pursuant to Minnesota
Statutes, Chapter 429, or transferred to the Debt Service
Account; and provided further that any special assessments
credited to the Construction Account shall only be applied
towards payment of the costs of the Improvements upon adoption of
a resolution by the City Council determining that the application
of the special assessments for such purpose will not cause the
City to no longer be in compliance with Minnesota Statutes,
Section 475.61, Subdivision 1:
(b) Debt Service Account. There are hereby pledged and
there shall be credited to the Debt Service Account: (i) all
collections of special assessments herein covenanted to be levied
with respect to the Improvements and either initially credited to
the Construction Account and not already spent as permitted above
and required to pay any principal and interest due on the Bonds
or collected subsequent to the completion of the Improvements and
payment of the costs thereof; (ii) all accrued interest received
upon delivery of the Bonds; (iii) all funds paid for the Bonds in
excess of $1,053,640; (iv) capitalized interest in the amount of
$ (together with interest earnings thereon and
subject to such other adjustments as are appropriate to provide
sufficient funds to pay interest due on the Bonds on or before
1, ); (v) any collections of all taxes which may
hereafter be levied in the event that the special assessments and
other sums herein pledged to the payment of the Bonds are
insufficient therefor; (vi) all funds remaining in the
Construction Account after completion of the Improvements and
payment of the costs thereof, not so transferred to the account
of another improvement; (vii) all investment earnings on moneys
held in the Debt Service Account; and (viii) 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
937167.1 1 9
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 the Debt Service 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 five percent (5�) of the proceeds
of the Bonds. To this effect, any sums from time to time held in
the Construction Account or Debt Service Account (or any other
City fund or 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 as to yield shall not
be invested at a yield in excesa 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. In addition, the proceeds of the Bonds
and money in the Construction Account or Debt Service Account
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 federal Internal Revenue Code of
1986, as amended (the "Code").
16. Assessments. It is hereby determined that no less
than one hundred percent (100�) of the cost to the City of each
Improvement financed hereunder within the meaning of Minnesota
Statutes, Section 475.58, Subdivision 1(3), shall be paid by
special assessmenta to be levied against every assessable lot,
piece and parcel of land benefitted by the Zmprovements. The
City hereby covenants and agreea that it will let all
construction contracts not heretofore let within one year after
ordering each Improvement financed hereunder unless the
resolution ordering the Improvement specifies a different time
limit for the letting of construction contracta. The City hereby
further covenants and agrees that it will do and perform, as soon
as they may be done, all acts and things necessary for the final
and valid levy of such special asaessments, and in the event that
any such asseasment be at any time held invalid with respect to
any lot, piece or parcel of land due to any error, defect, or
irregularity in any action or proceedings taken or to be taken by
the City or thia Council or any of the City officers or
employees, either in the making of the assessments or in the
performance of any condition precedent thereto, the City and this
Council will forthwith do all further acts and take all further
ea�ac�.i 2 0
proceedings as may be required by law to make the assessments a
valid and binding lien upon such property.
The special assessments have not heretofore been
authorized, and accordingly, for purposes of Minnesota Statutes,
Section 475.55, Subdivision 3, the special asaessments are hereby
authorized. Subject to such adjustments as are required by
conditions in existence at the time the assessments are levied,
the assessments are hereby authorized and it is hereby determined
that the assessments shall be payable in equal, consecutive,
annual installments, including both principal and interest, with
interest at a rate per annum approximately percent (�)
per annum in excess of the net effective rate of interest on the
Bonds (estimated at &):
Improvement
DesiQnation
Amoun
Collection
Levy Years Yeara
(i) West Draw Meadows ls`
Addition
(ii) Pine Foreat 3`
Addition
TOTAL:
$ 575,677
�►I/IFZ�a
$1.053.640
1998-2000 1999-2001
(for both) (for both)
At the time the assessments are in fact levied the City
Council shall, based on the then-current estimated collections of
the assessments, make any adjustments in any ad valorem taxes
required to be levied in order to assure that the City continues
to be in compliance with Minnesota Statutes, Section 475.61,
Subdivision 1.
1'7. Coverage Test. The special assessments are such
that if collected in full they, together with estimated
collections of other revenues herein pledged for the payment of
the Bonds, will produce at Zeast five percent (5%) in excess of
the amount needed to meet when due the principal and interest
payments on the Bonda.
18. Defeasance. When all Bonds have been discharged
as provided in thia paragraph, all pledges, covenants and other
rights granted by this resolution to the registered holders of
the Bonds ahall, to the extent permitted by law, cease. The City
may discharge its obligationa 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 intereat
accrued to the date of such deposit. The City may also discharge
ita obligationa with respect to any prepayable Bonds called for
redemption on any date when they are prepayable according to
937767.1 2 1
their terms, by depositing with the Bond Registrar on or before
that date a sum sufficient far the payment thereof in full,
provided that notice of redemption thereof has been duly given.
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.
19. Compliance With Reimbursement Bond ReQUlations.
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 Bonds, 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 covenanta as follows:
(a) Not later than 60 days after the date of payment of a
Reimbursement E�cpenditure, the City (or person
designated to do so on behalf of the City) has made or
wi11 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 E�cpenditure
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 wae to be paid
(collectively the "Project"3; 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 "isaue price" of the Bonda, and (ii)
937167.1 2 2
a de minimis amount of Reimbursement Expenditures not
in excess of the lesser of $100,000 or Sg of the
proceeds of the Bonds. Notwithstanding the foregoing,
with respect to any Declaration made by the City
between January 27, 1992 and June 30, 1993, with
respect to a Reimbursement Expenditure made prior to
March 2, 1992, the City hereby represents that there
exists objective evidence, that at the time the
Expenditure was paid the City expected to reimburse the
cost thereof with the proceeds of a borrowing (taxable
or tax-exempt) and that expectation was reasonable.
(b) Each Reimbursement Expenditure is a capital expenditure
or a cost of issuance of the Bonds 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 Bonds and in all
events within the period ending on the date which is
the later of 18 months after payment of the Reimburse-
ment Expenditure or one year after the date on which
the Project to which the Reimbursement Expenditure
relates is first placed in service, but not more than
three years after the date of the Reimbursement
Expenditure.
(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 Bonds are isaued, shall be
treated as made on the day the Bonds are issued.
Provided, however, that the City may take action contrary to any
of the foregoing covenants in this paragraph 19 upon receipt of
an opinion of its Bond Counsel for the Bonda stating in effect
that such action will not impair the tax-exempt status of the
Bonds.
20. Continuing Disclosure. The City is the aole
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 "Commiasion") pursuant to the Securitiea Exchange Act of
1934, as amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described to:
(a) Provide or cause to be provided to each nationally
recognized municipal securities information repository ("NRMSIR")
937167.1 2 3
and to the appropriate state information depository ("SID'��, if
any, for the State of Minnesota, 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, to
(i) each NRMSIR or to the Municipal Securities Rulemaking Board
("MSRB"} and (ii) the SID, 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, to
(i) each NRMSIR or to the MSRB and (ii) the SID, notice of a
failure by the City to provide the annual financiat 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 20 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 with "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.
21. General Obligation Pledae. 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 ahall be and are irrevocably pledged. If the
balance in the Debt Service Account is ever insufficient to pay
all principal and intereat then due on the Bonds payable
therefrom, the deficiency shall be promptly paid out of any other
accounts of the City which are available for such purpose, and
such other funde may be reimbursed without interest from the Debt
Service Account when a aufficient balance is available therein.
22, rArrificate of Registration. The Clerk 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 he or ahe shall require, and to obtain
the County Auditor's certificate that the Bonds have been entered
in the County Auditor's Bond Register.
93716�.1 2 4
23. 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 finaneial
condition and affairs of the City, and such other affidavits,
certificates and information as are reguired to show the facts
relating to the legality and marketability of the Bonds as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
furnished, shall be deemed representations of the City as to the
facts recited therein.
24. Nec�ative �ovenant as co use oi rroceeu� a�,u
Imbrovements. The City hereby covenants not to use the proceeds
of the Bonds or to use the Improvements, or to cause or permit
them to be used, or to enter into any deferred payment
arrangements for the cost of the Improvements, in such a manner
as to cause the Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code.
25. 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 (1) requirements relating to temporary periods
for investments, (2) limitations on amounta invested at a yield
greater than the yield on the Bonds, and (3) the rebate of excess
investment earnings to the United States if the Bonds (together
with other obligations reasonably expected to be issued and
outstanding at one time in this calendar year) exceed the
small-issuer exception amount of $5,000,000.
For purposes of qualifying for the exception to the
federal arbitrage rebate requirements for governmental units
issuing $5,000,000 or lesa of bonds, the City hereby finds,
determines and declares that (1) the Bonds are issued by a
governmental unit with general taxing powers, (2) no Bond is a
private activity bond, (3) ninety-five percent (95�) or more of
the net proceeds of the Bonds are to be used for local
governmental activities of the City (or of a governmental unit
the jurisdiction of which is entirely within the jurisdiction of
the City), and (4) the aggregate face amount of all tax-exempt
bonds (other than private activity bonds) issued by the City (and
all subordinate entities thereof, and all entitiea 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.
93�167.1 2 5
26. Aesianation of Oualified 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
"gualified 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 thia calendar
year 1998 will not exceed $10,000,000; and
(e) not more than $10,000,000 of obligations
issued by the City during this calendar year 1998 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.
27. Pavment of Issuance Expenses. The City authorizes
the Purchaser to forward the amount of Bond proceeds allocable to
the payment of issuance expenses to Resource Bank & Trust
Company, Minneapolis, Minnesota on the cloaing date for further
distribution as directed by the City's financial advisor, Ehlers.
28. Severabilitv. 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 proviaions of this resolution.
29. Heading�. 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.
93716�.1 z 6
The motion for the adoption of the foregoing resolution
was duly seconded by member and, after a 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.
93�167.1 a �
STATE OF MINNESOTA
COUNTY OF WASHINGTON
CITY OF COTTAGE GROVE
I, the undersigned, being the duly qualified and acting
Clerk of the City of Cottage Grove, 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 ealled and
held on the date therein indicated, insofar as such minutes
relate to considering proposals for, and awarding the sale of,
$1,060,000 General Obligation Improvement Bonds, Series 1998B of
said City.
WITNESS my hand this 20th day of May, 1998.
Clerk
937167.1 2 �
EXHIBIT A
PROPOSAI,S
[To be supplied by Ehlers and Associates, Inc.]
939167 .1 A- �.