ERMU RES 18-9 EXTRACT OF MINUTES OF MEETING OF THE
ELK RIVER MUNICIPAL UTILITIES COMMISSION
HELD: July 10, 2018
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 July, 2018, at 3:00 P.M. for the purpose in part of authorizing the
competitive negotiated sale of the $10,000,000 Electric Revenue Bonds, Series 2018A.
The following members were present: Chair John Dietz, Vice Chair Al Nadeau, and
Commissioners Paul Bell, Mary Stewart, and Matt Westgaard
and the following were absent: None
Member Mary Stewart introduced the following resolution and moved its adoption:
Resolution No. 18-9
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED
SALE OF $10,000,000
ELECTRIC REVENUE BONDS, SERIES 2018A
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 2018A
(the "Bonds") to finance the remaining cost of the acquisition of its membership in the
Minnesota Municipal Power Agency 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.
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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 July 16, 2018, 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
Al Nadeau and, after full discussion thereof and upon a vote being taken thereon, the following
voted in favor thereof:
John Dietz
Al Nadeau
Paul Bell
Mary Stewart
Matt Westgaard
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
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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 2018A.
WITNESS my hand this I ik'^ day of J , 2018.
Secretafy
529084v1 JSB EL185-55 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 2018A
(BOOK ENTRY ONLY)
Proposals for the above-referenced obligations (the"Bonds")will be received on Wednesday, August 29,
2018, (the "Sale Date") until 9:30 A.M., Central Time at the offices of Springsted Incorporated
("Springsted"), 380 Jackson Street, Suite 300, Saint Paul, Minnesota, 55101, 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 its meeting commencing at 3:00 P.M., Central Time, of the
same day.
SUBMISSION OF PROPOSALS
Springsted will assume no liability for the inability of a 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 of Elk River,Minnesota(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,
Commission, its 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, its 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 is 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.
* Preliminary;subject to change.
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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 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 February 1, 2019. 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:
2019 $260,000 2025 $235,000 2031 $285,000 2037 $350,000 2043 $445,000
2020 $210,000 2026 $240,000 2032 $295,000 2038 $365,000 2044 $460,000
2021 $210,000 2027 $250,000 2033 $305,000 2039 $375,000 2045 $480,000
2022 $215,000 2028 $255,000 2034 $315,000 2040 $390,000 2046 $500,000
2023 $225,000 2029 $265,000 2035 $325,000 2041 $410,000 2047 $525,000
2024 $230,000 2030 $275,000 2036 $335,000 2042 $425,000 2048 $545,000
* The City and the Commission reserve 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 or maturities 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 for this purpose is the
differential between the price paid to the City for the new issue and the prices at which the proposal indicates
the securities will be 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 for 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 lowest bidder
(the "Purchaser"), as a condition of delivery of the Bonds, will be required to deposit the Bonds with
DTC.
REGISTRAR
The City will name the registrar which shall be subject to applicable regulations of the Securities and
Exchange Commission. The City will pay for the services of the registrar.
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OPTIONAL REDEMPTION
The City may elect on August 1, 2028 and on any day thereafter, to redeem Bonds due on or after
August 1, 2029. 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 Bonds of a maturity are called for redemption,
the City will notify DTC of the particular amount of such maturity to be redeemed. 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 redemptions
shall be at a price of par plus accrued interest.
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 of the Bonds will be used to finance the remaining cost of
acquisition of the Commission's membership interest in the Minnesota Municipal Power Agency
(MMPA).
BIDDING PARAMETERS
Proposals shall be for not less than $9,850,000 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 on the
Sale Date unless the meeting of the Commission 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 as stated on the proposal
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.
ESTABLISHMENT OF ISSUE PRICE
In order to provide the City with information necessary for compliance with Section 148 of the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively,
the "Code"), the Purchaser will be required to assist the City in establishing the issue price of the Bonds
and shall complete, execute, and deliver to the City prior to the closing date, a written certification in a
form acceptable to the Purchaser, the City, and Bond Counsel (the "Issue Price Certificate") containing
the following for each maturity of the Bonds (and, if different interest rates apply within a maturity, to
each separate CUSIP number within that maturity):: (i) the interest rate; (ii) the reasonably expected
initial offering price to the "public" (as said term is defined in Treasury Regulation Section 1.148-1(f)
(the"Regulation")) or the sale price; and(iii)pricing wires or equivalent communications supporting such
offering or sale price. Any action to be taken or documentation to be received by the City pursuant hereto
may be taken or received on behalf of the City by Springsted.
The City intends that the sale of the Bonds pursuant to this Terms of Proposal shall constitute a
"competitive sale"as defined in the Regulation based on the following:
(i) the City shall cause this Terms of Proposal to be disseminated to potential bidders in a
manner that is reasonably designed to reach potential bidders;
(ii) all bidders shall have an equal opportunity to submit a bid;
(iii) the City reasonably expects that it will receive bids from at least three bidders that have
established industry reputations for underwriting municipal bonds such as the Bonds; and
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(iv) the City anticipates awarding the sale of the Bonds to the bidder who provides a proposal
with the lowest true interest cost, as set forth in this Terms of Proposal (See "AWARD"
herein).
Any bid submitted pursuant to this Terms of Proposal shall be considered a firm offer for the purchase of
the Bonds, as specified in the proposal. The Purchaser shall constitute an "underwriter" as said term is
defined in the Regulation. By submitting its proposal, the Purchaser confirms that it shall require any
agreement among underwriters, a selling group agreement, or other agreement to which it is a party
relating to the initial sale of the Bonds, to include provisions requiring compliance with the provisions of
the Code and the Regulation regarding the initial sale of the Bonds.
If all of the requirements of a "competitive sale" are not satisfied, the City shall advise the Purchaser of
such fact prior to the time of award of the sale of the Bonds to the Purchaser. In such event, any
proposal submitted will not be subject to cancellation or withdrawal. Within twenty-four (24)hours
of the notice of award of the sale of the Bonds, the Purchaser shall advise the City and Springsted if 10%
of any maturity of the Bonds (and, if different interest rates apply within a maturity, to each separate
CUSIP number within that maturity) has been sold to the public and the price at which it was sold. The
City will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity
basis. The City will not require the Purchaser to comply with that portion of the Regulation commonly
described as the "hold-the-offering-price" requirement for the remaining maturities, but the Purchaser
may elect such option. If the Purchaser exercises such option,the City will apply the initial offering price
to the public provided in the proposal as the issue price for such maturities. If the Purchaser does not
exercise that option, it shall thereafter promptly provide the City and Springsted the prices at which 10%
of such maturities are sold to the public; provided such determination shall be made and the City and
Springsted notified of such prices whether or not the closing date has occurred, until the 10% test has
been satisfied as to each maturity of the Bonds or until all of the Bonds of a maturity have been sold.
GOOD FAITH DEPOSIT
To have its proposal considered for award, the Purchaser 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 Sale Date.
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 Purchaser shall be solely responsible for the timely
delivery of its Deposit whether by check or wire transfer. Neither the City nor Springsted 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, Saint Paul,Minnesota 55101 by the time specified above.
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 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.
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Once an award has been made, the Deposit received from 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 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 or 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 Commission determines to have failed to comply with the terms
herein.
BOND INSURANCE AT PURCHASER'S OPTION
Neither the City nor the Commission have 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 the assignment of CUSIP numbers such numbers will be printed on the Bonds;
however, 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. Springsted will
apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking
Board. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be
paid by the Purchaser.
SETTLEMENT
On or about September 26, 2018,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 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.
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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.
OFFICIAL STATEMENT
The City and the Commission has authorized the preparation of a Preliminary Official Statement
containing pertinent information relative to the Bonds, and said Preliminary Official Statement has been
deemed final by the City and the Commission as of the date thereof 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 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 the Purchaser, the Commission agrees that, no more than
seven business days after the date of such award, it shall provide without cost to the Purchaser up to
25 copies of the Final Official Statement. The Commission designates the Purchaser as its agent for
purposes of distributing copies of the Final Official Statement to each syndicate member, if applicable.
The Purchaser agrees that if its proposal is accepted by the Commission, (i) it shall accept designation and
(ii) it shall enter into a contractual relationship with its syndicate members for purposes of assuring the
receipt of the Final Official Statement by each such syndicate member.
Dated July 10,2018 BY ORDER OF THE ELK RIVER MUNICIPAL
UTILITIES COMMISSION
/s/Theresa Slominski
Finance and Office Manager
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