ERMU RES 14-1 RESOLUTION 14-1
EXTRACT OF MINUTES OF MEETING OF THE
ELK RIVER MUNICIPAL UTILITIES COMMISSION
HELD: January 14, 2014
Pursuant to due call and notice thereof, a regular meeting of the Elk River Municipal
Utilities Commission, was duly held in the Utilities Conference Room, 13069 Orono Parkway in
said City on the 14th day of January, 2014, at 3:30 P.M. for the purpose in part of authorizing the
competitive negotiated sale of the $2,125,000 Electric Revenue Refunding Bonds, Series 2014A.
The following members were present: TO f l n
/ howjl Thompson
and the following were absent: A( Oad a
Member/kV t1npw1 introduced the following resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED
SALE OF $2,125,000
ELECTRIC REVENUE REFUNDING BONDS, SERIES 2014A
A. WHEREAS, the Elk River Municipal Utilities Commission (the
"Commission"), has heretofore determined that it is necessary and expedient that the City of
Elk River, Minnesota (the "City") issue its $2,125,000 Electric Revenue Refunding Bonds,
Series 2014A (the "Bonds") to refund the August 1, 2014 through August 1, 2021 maturities of
the City's Electric Revenue Bonds, Series 2006A; and
B. WHEREAS, the Commission has retained Springsted Incorporated, in Saint
Paul, Minnesota ("Springsted"), as its independent financial advisor and is therefore authorized
to sell these obligations by a competitive negotiated sale in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(9); and
NOW, THEREFORE, BE IT RESOLVED by the Elk River Municipal Utilities
Commission, as follows:
1. Authorization; Findings. The Commission hereby authorizes Springsted to solicit
bids for the competitive negotiated sale of the Bonds.
2. Meeting; Bid Opening. This Commission shall meet at the time and place
specified in the Terms of Proposal attached hereto as Exhibit A for the purpose of considering
sealed bids for, and awarding the sale of, the Bonds. The Finance and Office Manager or
designee, shall open bids at the time and place specified in such Terms of Proposal.
3. Terms of Proposal. The terms and conditions of the Bonds and the negotiation
thereof are fully set forth in the "Terms of Proposal" attached hereto as Exhibit A and hereby
approved and made a part hereof.
437542v2 JSB EL185-25
4. Official Statement. In connection with said competitive negotiated sale, the
Finance and Office Manager and other officers or employees of the Commission are hereby
authorized to cooperate with Springsted and participate in the preparation of an official statement
for the Bonds, and to execute and deliver it on behalf of the Commission upon its completion.
5. Request to City Council. The Commission hereby requests that the City Council
of the City adopt a resolution on January 21, 2014, approving the issuance of the Bonds and
authorizing the Commission to take actions necessary and sufficient to provide for the issuance
of the Bonds.
The motion for the adoption of the foregoing resolution was duly seconded by member
'phn 7jt{,tk and, after full discussion thereof and upon a vote being taken thereon, the
ollowing voted in favor thereof: b �I n(�
John b\c l-
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
437542v2JSB EL185-25 2
STATE OF MINNESOTA )
COUNTY OF SHERBURNE )
ELK RIVER MUNICIPAL )
UTILTIES COMMISSION )
I, the undersigned, being the duly qualified and acting Secretary of the Elk River
Municipal Utilities Commission, 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 Commission, duly called and
held on the date therein indicated, insofar as such minutes relate to the $2,125,000 Electric
Revenue Refunding Bonds, Series 2014A.
WITNESS my hand this Ott' day of .i/jU,Var , 2014.
SecrJtary
437542v2 J5B EL185-25 3
EXHIBIT A
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS
BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$2,125,000
CITY OF ELK RIVER, MINNESOTA
ELECTRIC REVENUE REFUNDING BONDS, SERIES 2014A
(BOOK ENTRY ONLY)
Proposals for the Bonds and the Good Faith Deposit ("Deposit") will be received on Tuesday,
February 11, 2014, until 10:00 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson
Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated.
Consideration for award of the Bonds will be by the Elk River Municipal Utilities Commission (the
"Commission") at 3:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of
sale specified above. All bidders are advised that each Proposal shall be deemed to constitute a contract
between the bidder, the City and the Commission to purchase the Bonds regardless of the manner in
which the Proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223-3046 to
Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the
time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and
coupons, by telephone(651) 223-3000 or fax(651)223-3046 for inclusion in the submitted Proposal.
OR
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARITY®.
For purposes of the electronic bidding process, the time as maintained by PARITY® shall constitute the
official time with respect to all Proposals submitted to PARITY®. Each bidder shall be solely responsible
for making necessary arrangements to access PARITY®for purposes of submitting its electronic Proposal
in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the City,
the Commission, their agents nor PARITY® shall have any duty or obligation to undertake registration to
bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective
bidder, and neither the City, the Commission, their agents nor PARITY®shall be responsible for a bidder's
failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or
interruptions of or any damages caused by the services of PARITY®. The City and the Commission are
using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding
for the Bonds, and PARITY®is not an agent of the City or the Commission.
If any provisions of this Terms of Proposal conflict with information provided by PARITY®, this Terms of
Proposal shall control. Further information about PARITY®, including any fee charged, may be obtained
from:
PARITY®, 1359 Broadway, 2nd Floor, New York, New York 10018
Customer Support: (212) 849-5000
Preliminary; subject to change.
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DETAILS OF THE BONDS
The Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and
August 1 of each year, commencing August 1, 2014. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Bonds will mature August 1 in the years and amounts*as follows:
2014 $430,000 2017 $425,000
2015 420,000 2018 430,000
2016 420,000
The City reserves the right, after proposals are opened and prior to award, to increase or reduce the
principal amount of the Bonds or the amount of any maturity in multiples of$5,000. In the event the
amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the
same gross spread per $1,000 of Bonds as that of the original proposal. Gross spread is the
differential between the price paid to the City for the new issue and the prices at which the securities
are initially offered to the investing public.
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and
term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus
accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above.
In order to designate term bonds, the proposal must specify "Years of Term Maturities" in the spaces
provided on the Proposal form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to
the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate
principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as
nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities
depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of
$5,000 or any multiple thereof of a single maturity through book entries made on the books and records of
DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as
registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be
the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants
will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as
a condition of delivery of the Bonds, will be required to deposit the
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for
the services of the registrar.
OPTIONAL REDEMPTION
The Bonds will not be subject to payment in advance of their respective stated maturity dates.
SECURITY AND PURPOSE
The Bonds will be special obligations of the City payable solely from net revenues of the electric system
of the Commission and shall not constitute a debt for which the full faith and credit or taxing powers of the
City will be pledged. The proceeds will be used to refund the August 1, 2014 through August 1, 2021
maturities of the City's Electric Revenue Bonds, Series 2006A, dated March 2, 2006.
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BIDDING PARAMETERS
Proposals shall be for not less than $2,106,938 plus accrued interest, if any, on the total principal amount
of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless
the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another
date without award of the Bonds having been made. Rates shall be in integral multiples of 1/100 or 1/8 of
1%. The initial price to the public for each maturity must be 98.0%or greater. Bonds of the same maturity
shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will
be accepted.
GOOD FAITH DEPOSIT
Proposals, regardless of method of submission, shall be accompanied by a Deposit in the amount of
$21,250, in the form of a certified or cashier's check, a wire transfer, or Financial Surety Bond and
delivered to Springsted Incorporated prior to the time proposals will be opened. Each bidder shall be
solely responsible for the timely delivery of their Deposit whether by check, wire transfer or Financial
Surety Bond. Neither the City nor Springsted Incorporated have any liability for delays in the transmission
of the Deposit.
Any Deposit made by certified or cashier's check should be made payable to the City and delivered to
Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101.
Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's agent
according to the following instructions:
Wells Fargo Bank, N.A., San Francisco, CA 94104
ABA#121000248
for credit to Springsted Incorporated, Account#635-5007954
Ref: Elk River, MN Series 2014A Good Faith Deposit
Contemporaneously with such wire transfer, the bidder shall send an e-mail to
bond_services @springsted.com, including the following information; (i) indication that a wire transfer has
been made (including the fed reference number and time released), (ii) the amount of the wire transfer,
(iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the
Bonds.
Any Deposit made by the successful bidder by check or wire transfer will be delivered to the City following
the award of the Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be
returned to such bidder following City action relative to an award of the Bonds.
If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond
in the State of Minnesota and pre-approved by the City. Such bond must be submitted to Springsted
Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each
underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to an
underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the
City in the form of a certified or cashier's check or wire transfer as instructed by Springsted Incorporated
not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is
not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit
requirement.
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The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be
deposited by the City and no interest will accrue to the purchaser. In the event the purchaser fails to
comply with the accepted proposal, said amount will be retained by the City.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest
cost (TIC) basis calculated on the proposal prior to any adjustment made by the City and the
Commission. The Commission's computation of the interest rate of each proposal, in accordance with
customary practice, will be controlling.
The Commission will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause,
and (iii) reject any proposal that the City determines to have failed to comply with the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
Neither the City nor the Commission have not applied for or pre-approved a commitment for any policy of
municipal bond insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance
and a bidder desires to purchase a policy, such indication, the maturities to be insured, and the name of
the desired insurer must be set forth on the bidder's Proposal. The Commission specifically reserves the
right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest
TIC to the City and the Commission. All costs associated with the issuance and administration of such
policy and associated ratings and expenses (other than any independent rating requested by the City)
shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the
award of the Bonds shall not constitute cause for failure or refusal by the successful bidder to accept
delivery of the Bonds.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but
neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute
cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau
charge for the assignment of CUSIP identification numbers shall be paid by the purchaser.
SETTLEMENT
On or about March 13, 2014, the Bonds will be delivered without cost to the purchaser through DTC in
New York, New York. Delivery will be subject to receipt by the purchaser of an approving legal opinion of
Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a
no-litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or
equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon,
Central Time. Unless compliance with the terms of payment for the Bonds has been made impossible by
action of the Issuer, or its agents, the purchaser shall be liable to the City for any loss suffered by the City
by reason of the purchaser's non-compliance with said terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City and the Commission will undertake, pursuant to the
resolution awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation to
purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery
of the Bonds.
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OFFICIAL STATEMENT
The City and the Commission have authorized the preparation of a Preliminary Official Statement
containing pertinent information relative to the Bonds, and said Preliminary Official Statement will serve
as a nearly final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange
Commission. For copies of the Preliminary Official Statement or for any additional information prior to
sale, any prospective purchaser is referred to the Financial Advisor to the City and the Commission,
Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone
(651) 223-3000.
A Final Official Statement (as that term is defined in Rule 15c2-12) will be prepared, specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other information
required by law. By awarding the Bonds to any underwriter or underwriting syndicate submitting a
proposal therefor, the City and the Commission agree that, no more than seven business days after the
date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to
which the Bonds are awarded up to 25 copies of the Final Official Statement. The Commission
designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent
for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any
underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted
by the Commission (i) it shall accept such designation and (ii) it shall enter into a contractual relationship
with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such
Participating Underwriter of the Final Official Statement.
Dated January 14, 2014 BY ORDER OF THE ELK RIVER MUNICIPAL
UTILITIES COMMISSION
/s/Theresa Slominski
Finance and Office Manager
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