4.4. SR 10-23-2000
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Item # 4. 4 .
MEMORANDUM
TO:
Mayor & City Council
FROM:
Lori Johnson, Finance Director
DATE:
October 23, 2000
SUBJECT: Resolution Awarding the Sale of the City's $198,200
General Obligation Equipment Certificate of 2000; Fixing
Its Form and Specifications; Directing Its Execution and
Delivery; and Providing for Its Payment
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Attached is a resolution to award the sale of the city's 2000 equipment
certificate. The 2000 budget authorized $215,800 of equipment certificate
expenditures for public safety and street department equipment. All of the
budgeted equipment has been purchased, and each piece of equipment came
in under budget. Therefore, the actual 2000 equipment certificate including
issuance costs will be $198,200, $17,600 less than budgeted. The Bank of Elk
River will purchase the five-year certificates at an interest rate of six percent.
Action Reauested
The City Council is asked to approve the attached Resolution Awarding the
Sale of the City's $198,200 General Obligation Equipment Certificate of 2000;
Fixing its Form and Specifications; Directing its Execution and Delivery; and
Providing for its Payment.
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13065 Orono Parkway. P.O. Box 490. Elk River, MN 55330. TDD & Phone (763) 441-7420. Fax (763) 441-7425
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CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION 00-
RESOLUTION AWARDING THE SALE OF THE CITY'S $198,200
GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF 2000j
FIXING ITS FORM AND SPECIFICATIONSj
DIRECTING ITS EXECUTION AND DELIVERYj
AND PROVIDING FOR ITS PAYMENT
BE IT RESOLVED by the City Council (The "Council") of the City
of Elk River, Minnesota (the "City"), as follows:
1. It is hereby determined:
(a) It is necessary and expedient to issue the City's
$198,200 General Obligation Equipment Certificate
of 2000 (the "Certificate") pursuant to Minnesota
Statutes, Section 412.301, to finance the costs of
the City's recent or upcoming acquisition of public
safety and public works capital equipment for the
City (hereinafter referred to as the "Equipment") .
(b) The Equipment, on an average basis, has an expected
useful life at least as long as the final maturity
of the Certificate, and the $198,200 amount of the
Certificate does not exceed 0.25% of the market
value of the taxable property in the City.
(c) The City is authorized pursuant to Minnesota
Statutes, Section 475.60, Subdivision 2(2), to
negotiate the sale of the Certificate without
public notice and sale because the $198,200
principal amount of the Certificate, when combined
with any amounts of other obligations which the
City has negotiated and sold without public sale
pursuant to said Subdivision within the last 12
months, does not exceed $1,200,000.
2. The offer of The Bank of Elk River, in Elk River,
Minnesota (the "Purchaser"), to purchase the Certificate is hereby
accepted, such offer being to purchase the Certificate at a price
of $198,200 par, the Certificate to be subject to the terms and
conditions herein provided.
3. The City shall forthwith issue and sell its $198,200
General Obligation Equipment Certificate of 2000. The Certificate
shall be dated November I, 2000 (or as soon thereafter as
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settlement can be arranged with the Purchaser), shall be a single,
fully registered obligation without interest coupons, shall bear
interest payable on February I, 2001, and semiannually thereafter
on each August 1 and February I, and shall mature and bear interest
as provided in the form of the Certificate set out in paragraph 5
of this Resolution.
The Certificate shall be subject to redemption in whole or in
part at the option of the City at any time, in inverse order of the
principal maturities thereof, upon prior written notice to the
Registered Owner thereof, at par plus accrued interest to date of
redemption. Interest on the Certificate shall be calculated on the
basis of a 360-day year consisting of 12 months of 30 days each.
4. Both principal of and interest on the Certificate shall
be payable by the City Finance Director, who shall also act as
registrar and transfer agent (the "Certificate Registrar") for the
Certificate.
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form:
The Certificate shall be substantially the following
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[Form of Certificate]
No. R-l
$198,200
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
GENERAL OBLIGATION
EQUIPMENT CERTIFICATE OF 2000
KNOW ALL BY THESE PRESENTS that the City of Elk River,
Sherburne County, Minnesota, acknowledges itself to be indebted
and, for value received, hereby promises to pay to The Bank of Elk
River, or its registered assigns (the "Registered Owner"), the
Principal Sum of ONE HUNDRED NINETY-EIGHT THOUSAND TWO HUNDRED
DOLLARS ($198,200) on February 1 in the years and principal
amounts, respectively, as follows:
Year
Principal Amount
2001
2002
2003
2004
2005
$47,000
43,500
35,900
35,900
35,900
or on any earlier date on which the principal amounts of this
Certificate may be and shall have been duly called for prepayment,
and to pay interest to the Registered Owner from the date hereof on
the principal amounts hereof until the same are paid at the rate of
six percent (6.00%) per annum, interest to maturity payable on
February I, 2001, and on each August 1 and February 1 thereafter
(the "Interest Payment Dates"). Interest shall be calculated on
the basis of a 360-day year consisting of 12 months of 30 days
each. The City Finance Director will pay the interest due on this
Certificate on each Interest Payment Date by mailing or delivering
a check or draft made payable to the person that was the Registered
Owner at the end of the day preceding such Interest Payment Date.
Both principal of and interest on this Certificate are payable in
any coin or currency of the United States of America which on the
date of payment is legal tender for public and private debts. At
the time of final payment of all principal of and interest on this
Certificate, the Registered Owner shall surrender this Certificate
to the City Finance Director.
This Certificate is subject to prepayment at the option of the
City at any time, in inverse order of the principal maturities
hereof, in whole or in part, at par plus accrued interest to the
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date of prepayment, upon prior written notice to the Registered
Owner.
This Certificate is issued by the City pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota
for the purpose of providing funds to finance costs of acquiring
certain capital equipment of the City. This Certificate
constitutes a general obligation of the City, and to provide moneys
for the prompt and full payment of the principal hereof and the
interest thereon, as the same become due, the full faith and credit
and taxing powers of the City have been and are hereby irrevocably
pledged.
This Certificate may be assigned but upon such assignment the
assignor shall promptly give written notice thereof to the City at
the office of the City Finance Director, and the assignee shall
surrender this Certificate to the City Finance Director either in
exchange for a new fully registered Certificate or for transfer of
this Certificate on the registration records. Each such assignee
shall take this Certificate subject to this condition. The City
shall treat the Registered Owner as the absolute owner of this
Certificate for purposes of paying the principal of and interest on
this Certificate and for all other purposes whatsoever.
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This Certificate has been designated by the City as a
"qualified tax-exempt obligation" for purposes of Section 265 (b) (3)
of the Internal Revenue Code of 1986, as amended.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions,
and things required by the Constitution and laws of the State of
Minnesota to be done, to have happened, and to be performed
precedent to and in the issuance of this Certificate have been
done, have happened, and have been performed in regular and due
form, time, and manner as required by law; and that this
Certificate, together with all other indebtedness of the City
outstanding on the date hereof, does not cause the indebtedness of
the City to exceed any constitutional or statutory limitation
thereon.
IN WITNESS WHEREOF, the City of Elk River, Sherburne County,
Minnesota, by its City Council, has caused this Certificate to be
executed by the manual signatures of its Mayor and City
Administrator; has caused the official seal of the City to be
impressed upon this Certificate; and has caused this Certificate to
be dated November 1, 2000.
City Administrator
Mayor
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CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Certificate was as
of the latest date specified below registered in the name of the
last Registered Owner noted below and that, at the request of said
Registered Owner of this Certificate, the undersigned City Finance
Director has as of said applicable date registered the Certificate
as to principal and interest in the name of such Registered Owner,
as indicated in the registration blank below, on the books kept by
the undersigned for such purposes.
NAME OF REGISTERED OWNER
DATE OF
REGISTRATION
SIGNATURE OF CITY
FINANCE DIRECTOR
The Bank of Elk
River
Novernbe~, 2000
(End of Form of Certificate)
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6. The City Finance Director shall obtain a copy of the
proposed approving legal opinion of bond counsel for the
Certificate, Briggs and Morgan, St. Paul, Minnesota, and shall
cause such opinion to be filed in the offices of the City.
7. The Certificate shall be executed on behalf of the City
by the manual signatures of the Mayor and the City Administrator
and shall be duly registered by the manual signature of the City
Finance Director as Certificate Registrar. The official seal of
the City shall be impressed upon the Certificate. The Certificate,
when fully executed and sealed, shall be delivered by the City
Finance Director to the Purchaser upon receipt of the purchase
price thereof, and the Purchaser shall not be obligated to see to
the proper application thereof.
8. The proceeds of the Certificate shall be deposited in and
expended from a separate capital account or subaccount of the City
to provide financing for the Equipment. The City Finance Director
shall establish and maintain a separate debt service account or
subaccount (the "Debt Service Account") for the paYment of the
Certificate. The Debt Service Account shall be maintained to pay
the debt service on the Certificate and any additional obligations
of the City which may hereafter be made payable therefrom.
9. The Debt Service Account shall be held in trust by the
City for the benefit of the Registered Owner from time to time of
the Certificate, as hereinafter provided. Until the principal of
and interest on the Certificate are paid, or until the Certificate
is otherwise discharged as hereinafter provided, there shall be
credited to and maintained in the Debt Service Account (1) first,
the proceeds of the general ad valorem taxes levied by the City for
the purpose of paying the principal of and interest on the
Certificate, including certain prior tax levies made for that
purpose (and made in anticipation of the issuance of the
Certificate); and (2) second, any other funds which are properly
available and are appropriated by the Council to the Debt Service
Account. The aforesaid funds, when deposited in the Debt Service
Account, shall be used only and exclusively for, and are hereby
pledged to, the payment of the principal of and interest on the
Certificate, when due, and such other obligations of the City as
may be made payable therefrom. If any paYment of principal or
interest shall become due when there are not sufficient funds in
the Debt Service Account to pay the same, the City Finance Director
shall pay such principal or interest from the general fund or other
available fund of the City, and such fund shall be reimbursed for
such advances from the proceeds of the ad valorem taxes levied for
such purpose, when collected.
10. The full faith and credit and taxing powers of the City
are hereby pledged to the paYment of the principal of and interest
on the Certificate, and in the event of any current or anticipated
deficiency of funds in the Debt Service Account of amounts needed
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to make any such payment, when due, the City Council shall levy ad
valorem taxes on all taxable property in the City in the amount of
such deficiency.
11. To provide moneys for payment of the principal of and
interest on the Certificate 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 Year of Tax
Levy Collection Amount
2000 2001 $54,000
2001 2002 43,349
2002 2003 41,088
2003 2004 38,826
The foregoing tax levies shall be irrepealable so long
as the Certificate is 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.
12. It is hereby determined that the funds available to the
Debt Service Account pursuant to this Resolution (including from
the ad valorem tax levies herein and heretofore made for payment
of debt service on the Certificate) will be in amounts not less
than 5% in excess of the amount needed to meet, when due, the
principal of and interest on the Certificate. The City Finance
Director is directed to file a certified copy of this Resolution
with the County Auditor of Sherburne County and to obtain the
certificate of the County Auditor required by Minnesota Statutes,
Section 475.63.
13. The officers of the City are hereby authorized and
directed to prepare and furnish upon request to the Purchaser and
to the attorneys approving the Certificate, certified copies of
proceedings and records of the City relating to the Certificate
and to the financial condition and affairs of the City, and to
furnish such other certificates, affidavits, and transcripts as
may be required to show facts within their knowledge or as shown
by the books and records in their custody and under their control
relating to the validity and marketability of the Certificate,
and such instruments, including any heretofore furnished, shall
be deemed representations of the City as to the facts stated
therein.
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14. The City covenants and agrees with the Registered Owner
from time to time of the Certificate that the City will not take
or permit to be taken by any of its officers, employees, or
agents any action which would cause the interest on the
Certificate to become generally subject to taxation under the
Internal Revenue Code of 1986, as amended (the "Code"), and
regulations issued thereunder, as now existing or as hereafter
amended or proposed and in effect at the time of such action, and
that the City will take, or it will cause to be taken, all
affirmative actions within its power which may be necessary to
insure that such interest will not become subject to income
taxation under the Code.
Without limitation of the foregoing, the City shall not
enter into any lease, use agreement, management or operation
contract or other agreement respecting the Equipment or any
portion thereof which would adversely affect the exemption from
federal income tax of the interest on the Certificate, taking
into account and observing the requirements of Revenue Procedure
97-13 of the Internal Revenue Service and any similar or other
applicable revenue procedures or guidelines relating to leases,
management contracts and service contracts involving facilities
financed with tax-exempt obligations.
15. 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
Certificate, 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
Certificate, and (3) the rebate of excess investment earnings to
the United States if the Certificate (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, or do not otherwise qualify for available
exceptions. For purposes of qualifying for the small-issuer
exception to the federal arbitrage rebate requirements, the City
hereby finds, determines and declares that (1) the Certificate is
issued by a governmental unit with general taxing powers, (2) the
Certificate is not a private activity bond, (3) ninety-five
percent (95%) or more of the net proceeds of the Certificate 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 entities subordinate to, or treated
as one issuer with, the City) during the 2000 calendar year is
not reasonably expected to exceed $5,000,000, all within the
meaning of Section 148(f) (4) (D) of the Code.
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16. The City hereby designates the Certificate as a
"qualified tax-exempt obligation" within the meaning of Section
265(b) (3) of the Code and further represents that:
(a) 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
subordinate to, or treated as one issuer with, the City)
during calendar year 2000 will not exceed $10,000,000; and
(b) not more than $10,000,000 of obligations issued or
to be issued by the City during calendar year 2000 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.
17. When any obligation of the Certificate has been
discharged as provided in this paragraph, all pledges, covenants
and other rights granted by this Resolution to the registered
owner of the Certificate (with respect to the obligation thereof
so defeased) shall, to the extent permitted by law, cease. The
City may at any time discharge any or all of such obligation(s)
with respect to the Certificate, subject to the provisions of law
now or hereafter authorizing or regulating such action, by
depositing irrevocably in escrow, with a suitable institution
qualified by law as an escrow agent for this purpose, cash or
securities which are backed by the full faith and credit of the
United States of America, bearing interest payable at such times
and at such rates and maturing on such dates and in such amounts
as shall be required and sufficient, subject to sale and/or
reinvestment in like securities, to pay said obligation(s), which
may include any interest paYffient on such Certificate and/or
principal amount due thereon at a stated maturity (or if
irrevocable provision shall have been made for permitted prior
redemption of such principal amount, at such earlier redemption
date) .
18. With respect to the Equipment, the City has complied
and will continue to comply with the "Reimbursement Regulations"
provided in United States Treasury Regulations Section 1.150-2.
In particular, except where the following may not be required by
said Regulations (e.g., with respect to certain "preliminary
expenditures"), to the extent that any of the proceeds of the
Certificate will be used to reimburse the City for a cost of the
Equipment theretofore paid and temporarily financed by the City
out of other City funds, prior to the initial paYffient thereof (or
within applicable time limits thereafter) the City has made or
will have made a duly qualifying statement of its official intent
to bond for such costs; otherwise, the proceeds of the
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Certificate are to be used for initial payment, and not for such
reimbursement, of costs of the Equipment.
19. The Council hereby finds that the Certificate is exempt
from continuing disclosure requirements of Rule 15c2-12 of the
Securities and Exchange Commission because the Certificate is
issued in the aggregate principal amount of less than $1,000,000.
Consequently, the City is not covenanting to provide and will not
provide annual financial information, notices of certain material
events or any other disclosure or information which would
otherwise be required by that Rule.
Adopted by the Elk River City Council on October 23, 2000.
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C E R T I F I CAT ION
I, the undersigned City Clerk of the City of Elk River,
Minnesota, do hereby certify the following:
The foregoing is true and correct copy of a Resolution on
file and of record in the offices of the City, which Resolution
relates to the issuance by the City of its $198,200 General
Obligation Equipment Certificate of 2000. Said Resolution was
duly adopted by the Elk River City Council at a regular or
special meeting of the Council held on October 23, 2000. Said
meeting was duly called and regularly held and was open to the
public and was held at the place at which meetings of the Council
are regularly held, a quorum of the Council being present and
acting throughout. Councilmember moved
the adoption of the Resolution, which motion was seconded by
Councilmember . A vote being taken on
the motion, the following members of the Council voted in favor
of the Resolution:
and the following voted against the same:
Whereupon said Resolution was declared duly passed and adopted.
The Resolution is in full force and effect and no action has been
taken by the Council which would in any way alter or amend the
Resolution.
WITNESS MY HAND officially as the City Clerk of the City of
Elk River, Minnesota, this__ day of October, 2000.
( SEAL)
City Clerk
City of Elk River, Minnesota
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