ERMU RES 16-4 EXTRACT OF MINUTES OF MEETING OF THE
ELK RIVER MUNICIPAL UTILITIES COMMISSION
HELD: May 10, 2016
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 10th day of May, 2016, at 3:30 P.M. for the purpose in part of authorizing the
competitive negotiated sale of the $10,000,000 Electric Revenue Bonds, Series 2016A.
The following members were present: j in D i. Z
111 &mil'
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and the following were absent: --
Member 41 nr,;4>,,,;,,, introduced the following resolution and moved its adoption:
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RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED
SALE OF $10,000,000
ELECTRIC REVENUE BONDS, SERIES 2016A
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 $10,000,000 Electric Revenue Bonds, Series 2016A
(the "Bonds") to finance a portion of the cost of the acquisition of its membership in the
Minnesota Municipal Power Association by the electric system of the Elk River Municipal
Utilities; and
B. WHEREAS, the Commission has retained Springsted Incorporated, in Saint
Paul, Minnesota("Springsted"), as its independent municipal 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.
479050v1 JSB EL185-41
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.
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 May 16, 2016, 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
and, after full discussion thereof and upon a vote being taken thereon, the
foll ing vot d in favor thereof:
(John IAz
Di -i'i mp
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
479050v1 JSB EL185-41 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 $10,000,000 Electric
Revenue Bonds, Series 2016A.
WITNESS my hand this k) day of H , 2016.
Secretary
479050v1 JSB EL185-41 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
$10,000,000*
CITY OF ELK RIVER, MINNESOTA
ELECTRIC REVENUE BONDS, SERIES 2016A
(BOOK ENTRY ONLY)
Proposals for the Series 2016A Bonds will be received on Tuesday, June 14, 2016, 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 Series 2016A 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 and the City to purchase the Series 2016A 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, its agents nor PARITY® shall have any
duty or Series 2016A Bond 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, its
agents nor PARITY® shall be responsible for a bidder's failure to register to bid or for any
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479050vI JSB EL185-41
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 is using the services of PARITY® solely
as a communication mechanism to conduct the electronic bidding for the Series 2016A Bonds,
and PARITY®is not an agent of the City.
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
DETAILS OF THE SERIES 2016A BONDS
The Series 2016A 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 February 1, 2017. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Series 2016A Bonds will mature February 1 in the years and amounts*as follows:
2019 $465,000 2023 $495,000 2027 $535,000 2031 $595,000 2034 $645,000
2020 $470,000 2024 $505,000 2028 $550,000 2032 $610,000 2035 $665,000
2021 $480,000 2025 $515,000 2029 $565,000 2033 $630,000 2036 $685,000
2022 $485,000 2026 $525,000 2030 $580,000
* The City reserves the right, after proposals are opened and prior to award, to increase or
reduce the principal amount of the Series 2016A 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 Series 2016A
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 Series 2016A 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 Series 2016A Bonds will be issued by means of a book entry system with no physical
distribution of Series 2016A Bonds made to the public. The Series 2016A Bonds will be issued
in fully registered form and one Series 2016A Bond, representing the aggregate principal amount
of the Series 2016A Bonds maturing in each year, will be registered in the name of Cede & Co.
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479050v1 JSB EL185-41
as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act
as securities depository of the Series 2016A Bonds. Individual purchases of the Series 2016A
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 Series 2016A 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 Series 2016A Bonds, will be required to
deposit the Series 2016A Bonds with DTC.
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 City may elect on February 1, 2025, and on any day thereafter, to prepay Series 2016A
Bonds due on or after February 1, 2026. Redemption may be in whole or in part and if in part at
the option of the City and in such manner as the City shall determine. If less than all Series
2016A Bonds of a maturity are called for redemption, the City will notify DTC of the particular
amount of such maturity to be prepaid. DTC will determine by lot the amount of each
participant's interest in such maturity to be redeemed and each participant will then select by lot
the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a
price of par plus accrued interest.
SECURITY AND PURPOSE
The Series 2016A 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 finance
acquisition of membership in the Minnesota Municipal Power Association by the electric system
of the Elk River Municipal Utilities.
BIDDING PARAMETERS
Proposals shall be for not less than$9,870,000 plus accrued interest, if any, on the total principal
amount of the Series 2016A 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 Series 2016A
Bonds is adjourned, recessed, or continued to another date without award of the Series 2016A
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. Series 2016A Bonds of the same
maturity shall bear a single rate from the date of the Series 2016A Bonds to the date of maturity.
No conditional proposals will be accepted.
GOOD FAITH DEPOSIT
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479050v1 JSB EL185-41
To have its proposal considered for award, the lowest bidder is required to submit a good faith
deposit to the City in the amount of$100,000 (the "Deposit") no later than 1:00 P.M., Central
Time on the day of sale. The Deposit may be delivered as described herein in the form of either
(i) a certified or cashier's check payable to the City; or (ii) a wire transfer. The lowest bidder
shall be solely responsible for the timely delivery of their Deposit whether by check or wire
transfer. Neither the City nor Springsted Incorporated have any liability for delays in the receipt
of the Deposit. If the Deposit is not received by the specified time, the City may, at its sole
discretion, reject the proposal of the lowest bidder, direct the second lowest bidder to submit a
Deposit, and thereafter award the sale to such bidder.
Certified or Cashier's Check. A Deposit made by certified or cashier's check will be considered
timely delivered to the City if it is made payable to the City and delivered to Springsted
Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101 by the specified time.
Wire Transfer. A Deposit made by wire will be considered timely delivered to the City upon
submission of a federal wire reference number by the specified time. Wire transfer instructions
will be available from Springsted Incorporated following the receipt and tabulation of proposals.
The successful bidder must send an e-mail including the following information: (i) the federal
reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to
which it applies.
Once an award has been made, the Deposit received from the lowest bidder (the "purchaser")
will be retained by the City and no interest will accrue to the purchaser. The amount of the
Deposit will be deducted at settlement from the purchase price. In the event the purchaser fails
to comply with the accepted proposal, said amount will be retained by the City.
AWARD
The Series 2016A 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. The City's computation of the interest rate of each proposal, in accordance with customary
practice,will be controlling.
The City 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 Series 2016A 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
The City has not applied for or pre-approved a commitment for any policy of municipal bond
insurance with respect to the Series 2016A Bonds. If the Series 2016A 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 City specifically reserves the right to reject any bid specifying municipal bond
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479050v1 JSB EL185-41
insurance, even though such bid may result in the lowest TIC to the City. 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
Series 2016A Bonds shall not constitute cause for failure or refusal by the successful bidder to
accept delivery of the Series 2016A Bonds.
CUSIP NUMBERS
If the Series 2016A Bonds qualify for assignment of CUSIP numbers such numbers will be
printed on the Series 2016A Bonds, but neither the failure to print such numbers on any Series
2016A Bond nor any error with respect thereto will constitute cause for failure or refusal by the
purchaser to accept delivery of the Series 2016A Bonds. The CUSIP Service Bureau charge for
the assignment of CUSIP identification numbers shall be paid by the purchaser.
SETTLEMENT
On or about July 14, 2016, the Series 2016A 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 Series 2016A 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 Series 2016A Bonds has been made
impossible by action of the City, 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 will undertake, pursuant to the resolution
awarding sale of the Series 2016A 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 Series 2016A Bonds will be conditioned upon receiving evidence of this
undertaking at or prior to delivery of the Series 2016A Bonds.
OFFICIAL STATEMENT
The City has authorized the preparation of a Preliminary Official Statement containing pertinent
information relative to the Series 2016A 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 Municipal
Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul,
Minnesota 55101,telephone (651) 223-3000.
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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 Series 2016A Bonds, together with
any other information required by law. By awarding the Series 2016A Bonds to an underwriter
or underwriting syndicate, the City agrees that, no more than seven business days after the date
of such award, it shall provide without cost to the sole underwriter or to the senior managing
underwriter of the syndicate (the "Underwriter" for purposes of this paragraph) to which the
Series 2016A Bonds are awarded up to 25 copies of the Final Official Statement. The City
designates the Underwriter of the syndicate to which the Series 2016A Bonds are awarded as its
agent for purposes of distributing copies of the Final Official Statement to each Participating
Underwriter. Such Underwriter agrees that if its proposal is accepted by the City, (i) it shall
accept designation and (ii) it shall enter into a contractual relationship with all Participating
Underwriters of the Series 2016A Bonds for purposes of assuring the receipt by each such
Participating Underwriter of the Final Official Statement.
Dated May 10, 2016 BY ORDER OF THE ELK RIVER MUNICIPAL
UTILITIES COMISSION
/s/Theresa Slominski
Finance and Office Manager
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