97-057 RESEXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
· special meeting of the City Council of the. City of Elk River,
Minnesota, was duly held in the Elk River City Hall on June 30,
1997, commencing at 6:00 P.M., C.T., in part for the purpose of
consideration of awarding the sale of the City's Liquor Store
Revenue Bonds of 1997.
The following Councilmembers were present:
Mayor Duitsman, Councilmembers Farber, Holmgren and Dietz
and the following were absent: Councilmember Thompson
During said meeting, ~n~]m~hpr F~rb~
introduced the following Resolution and
moved its adoption:
RESOLUTION NO. 97-57
RESOLUTION PROVIDING FOR THE ISSUANCE
AND SALE OF THE CITY'S $1,245,000
LIQUOR STORE REVENUE BONDS OF 1997
BE IT RESOLVED by the City Council (the "Council") of
the City of Elk River, Minnesota (the "City"), as follows:
1. Recitals. It is hereby determined:
(a) The City has determined to acquire,
construct, equip, furnish, operate, and maintain a new
municipal liquor store (the "Liquor Store"), and the
costs of completing and financing the Liquor Store are
currently estimated to be $1,393,535. The City
currently owns and operates a municipal liquor store,
355470.1
which will be closed upon completion of the new Liquor
Store, estimated to occur in October 1997. Excess
funds currently on hand in the City's Liquor Store Fund
and estimated to be generated in the coming months from
operation of the existing liquor store will be used to
reduce the necessary bonding amount to $1,245,000 and
to help make initial debt service payments on the Bonds
hereinafter described.
(b) The City is authorized to acquire and
complete the Liquor Store and to finance the same
through the issuance of the City's liquor store revenue
bonds pursuant to applicable law, including without
limitation Minnesota Statutes, Section 426.19, and the
Council hereby finds that it is necessary and expedient
to the sound financial management of the City that the
City do so.
(c) The City has retained Springsted Incorporated, in
Saint Paul, Minnesota, as its independent financial advisor
for the Bonds and is therefore authorized and hereby
determines to sell the Bonds by private negotiation, as
authorized by Minnesota Statutes, Section 475.60,
Subdivision 2(9).
2. Acceptance of Offer. First National Bank Elk
River and The Bank of Elk River (collectively, the "Purchaser")
have offered to purchase the City's $1,245,000 Liquor Store
Revenue Bonds of 1997 (the "Bonds") at a price of $1,245,000 par,
the Bonds to be subject to the terms and conditions herein
provided. The Purchaser has in that connection submitted to the
Council for its consideration a certain Bond Purchase Agreement,
and the Council hereby approves and accepts said Agreement and
authorizes the Mayor and City Administrator to execute the same
at such time and with such amendments thereto as they may deem
desirable, as evidenced by their execution and delivery thereof.
3. Authorization for Issuance. The City shall
forthwith issue the Bonds. The Bonds shall provide funds to
finance the Liquor Store, the total cost of which is estimated to
be at least equal to the amount of the Bonds. Work on the Liquor
Store shall proceed with due diligence to completion. The Bonds
shall be dated as of the date of delivery thereof to the
Purchaser, which shall be July 1, 1997, or as soon thereafter as
settlement can be arranged with the Purchaser, shall be a fully
registered bond without interest coupons and shall mature and
bear interest and be payable as provided in the form of the Bonds
set out in paragraph 5 of this Resolution.
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4. Bond Registrar. Both principal of and interest on
the Bonds shall be payable by the City Finance Director, who
shall also act as registrar and transfer agent (the "Bond
Registrar") for the Bonds.
5. Form of Bond The Bonds shall be two in number
(numbered R-1 and R-2, respectively), each in the denomination of
$622,500, and shall be identical except for the name of the
registered owners thereof, being the two purchasing banks,
respectively, mentioned in paragraph 2 hereof. Each of the Bonds
shall be substantially the following form:
355470.1 3
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
R- $622,500
LIQUOR STORE REVENUE BOND OF 1997
KNOW ALL PERSONS BY THESE PRESENTS that the City of Elk
River, Sherburne County, Minnesota (the "City"), for value
received, hereby promises to pay, but only from the sources and
as hereinafter provided, to
or assigns duly registered on the Bond Register (the "Owner")
maintained by the City Finance Director, the principal sum of SIX
HUNDRED TWENTY-TWO THOUSAND FIVE RTJNDRED ($622,500) on February
in the years and principal amounts, respectively, as follows:
Year
Principal Amount
1998 $ 45,000
1999 37,500
2000 40,000
2001 40,000
2002 70,000
2003 72,500
2004 77,500
2005 82,500
2006 87,500
2007 70,000
$622,500
or on any earlier date on which the principal amounts of this
Bond may be and shall have been duly called for prepayment, and
to pay interest to the Owner from the date hereof on the
principal amounts hereof until the same are paid at the rate of
six and thirty-five hundredths percent (6.35%) per annum,
interest to maturity payable on February 1, 1998, and on each
August 1 and February 1 thereafter. Interest shall be calculated
on the basis of a 360-day year consisting of 12 months of 30 days
each. Both principal of and interest on this Bond 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 Bond, the Owner shall surrender this Bond to the City
Finance Director.
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Manner of Payment. The principal of and interest on
this Bond are payable when due by check or draft mailed,
transferred by wire or otherwise delivered by or on behalf of the
City Finance Director to the person that was the Owner hereof as
of the end of the day, whether or not a business day, immediately
precedin~ the applicable payment due date; provided that if the
city shall be in default in payment of interest due on said date,
whenever money becomes available for payment of such defaulted
interest, the City Finance Director shall establish a special
record date with respect to the payment thereof and shall mail
written notice of the special record date not less than fifteen
(15) days prior to such date to the Owner of the Bond as of the
close of business of the City on the fifth (5th) business day of
the City preceding such mailing, and the Owner as of the special
record date shall be entitled to receive the payment of such
defaulted interest.
Issuance; Purpose; Special Revenue Obligation. This
Bond is one of an issue of two Bonds having an aggregate
principal amount of $1,245,000, both Bonds being of like date,
tenor, principal amount, interest rate, and principal payment
schedule. The Bonds are issued under and 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, the governing body of the City, on June 30, 1997 (the
"Resolution"), for the purpose of providing money to finance the
acquisition and completion of a municipal liquor store to be
owned and operated by the City (the "Project"). The principal of
and interest on the Bonds are payable solely and exclusively from
the Net Revenues of the Project (as said Net Revenues are defined
in the Resolution) and from such other funds, if any, as may
become available to pay debt service on the Bonds pursuant to the
Resolution. This Bond is not a general obligation of the City.
Reference is made to the Resolution for a fuller statement of the
sources of revenue which are or may become available to pay the
principal of and interest on the Bonds, of the additional
provisions respecting the security of the Bonds, and of the
conditions upon which the City may issue other bonds or
obligations on a parity with the Bonds.
Optional Redemption. The principal amounts of this
Bond are subject to prepayment, at par plus accrued interest,
without penalty at the option of the City, in whole but not in
part, on July 1, 2002, and on any date thereafter upon 15 days'
prior written notice to the Owner, but only in~.the event that the
City Council shall have reasonably determined 6hat such
redemption is necessary in order to allow the City to construct
or finance a second municipal liquor store.
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Transfer. This Bond is transferable, as provided in
the Resolution, upon the Bond Register kept by the City Finance
Director at City Hall upon surrender of this Bond, together with
a written instrument of transfer duly executed by the Owner or
the Owner's attorney duly authorized in writing, and thereupon a
new, fully registered Bond in the same aggregate principal amount
shall be issued to the transferee in exchange therefor (or the
transfer shall be duly recorded on the Bond Register and the
Certificate of Registration section hereof), upon the payment of
char~es and satisfaction of applicable conditions, if any, as
therein prescribed; provided that such transfer may occur only
with respect to the entire Bond and all of the remaining
principal amount hereof. The City may treat and consider the
person in whose name this Bond is registered as the absolute
Owner hereof for the purpose of receiving payment of or on
account of the principal of and interest on this Bond (except for
the payment of interest to the Owner as of a special record date)
and for all other purposes whatsoever.
Qualified Tax-Exempt Obligation. The Bonds have been
designated by the City as a "qualified tax-exempt obligations"
within the meanin~ of and pursuant to Section 265(b) (3) of the
Internal Revenue Code of 1986, as amended.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, to have happened and to
be performed precedent to and in the execution and delivery of
this Bond do exist, have happened and have been perfo~LL~ed in due
form, time and manner, as required by law, and that the issuance
of the Bonds, together with all other indebtedness of the City,
does not exceed or violate any constitutional or statutory
limitation of indebtedness.
IN WITNESS WHEREOF, the City of Elk River, Sherburne County,
Minnesota, by the City Council, its governing body, has caused
this Bond to be executed in its name and on its behalf by the
manual signatures of its Mayor and its City Administrator and has
caused the official seal of the City to be impressed hereon, all
as of , 1997.
Mayor
· y ministra~or
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CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Bond 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 Bond, the undersigned City Finance-.
Director has as of said applicable date registered the Bond 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
, 1997
(End of Form of Bond)
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6. Legal Opinion. The City Finance Director shall
obtain a copy of the proposed approving legal opinion of bond
counsel for the Bonds, Briggs and Morgan, St. Paul, Minnesota,
and shall cause such opinion to be filed in the offices of the
City.
7. Execution. The Bonds shall be executed on behalf
of the City by the manual signatures of Mayor and City
Administrator and shall be duly registered by the manual
signature of the City Finance Director as Bond Registrar. The
official seal of the City shall be impressed on the Bonds. The
Bonds, when fully executed, shall be delivered by the City
Finance Director to the Purchaser, and the Purchaser shall not be
obligated to see to the proper application of the proceeds
thereof.
8. Fund and Accounts. In order to provide for the
proper administration of all funds which are derived from the
operation of the City's existing liquor store and the Liquor
Store, the City Finance Director has heretofore established and
shall continue to maintain a Liquor Store Fund (the "Fund") which
shall remain a separate fund of the City subject to the following
separate accounting:
(a) Project Account. To the Project Account within
the Liquor Store Fund there shall be deposited the proceeds
from the sale of the Bonds. From the Project Account shall
be paid all costs of the Project including legal,
engineering, financing and other such expenses incidental
thereto. The City hereby covenants to complete the Liquor
Store and hereby appropriates such other funds of the City
as may be necessary to do so, if the proceeds of the Bonds
should prove insufficient for that purpose. Any balance
remaining in the Project Account after the payment of such
costs shall be transferred to the Operation and Maintenance
Account described below.
(b) Operation and Maintenance Account. To the
Operation and Maintenance Account within the Liquor Store
Fund shall be paid all revenues and receipts from the
operation of the Liquor Store, including all revenues
derived from the interim operation and subsequent lease,
sale or other disposition of the existing liquor store
(collectively, the "Gross Revenues"). From this account
there shall be paid all, but only, current expenses of the
Liquo~ Store. Current expenses shall include the reasonable
and necessary costs of administering, operating, maintaining
and insuring the Liquor Store, the cost of salaries, wages,
merchandise sold and other similar items, costs of materials
and supplies, necessary legal, engineerin~ and auditin~
355470.1
services, and all other items which, by sound accounting
practices constitute normal, reasonable and current costs of
operation and maintenance, but excluding any allowance for
depreciation, extraordinary repairs and payments into the
Debt Service Account. All money remaining in the Operation
and Maintenance Account, after paying or providing for the
foregoing items, shall constitute and are referred to in
this resolution as "Net Revenues."
(c) Debt Service Account. To the Debt Service Account
within the Liquor Store Fund there shall be credited such
amounts of Net Revenues as shall be necessary from time to
time to make full and timely payment of the debt service on
the Bonds, and said funds, when deposited into the Debt
Service Account, are irrevocably pledged for such purposes.
(d) Excess Net Revenues. Net Revenues in excess of
those required for the foregoing purposes may be used for
any proper purpose of the City, including without limitation
capital and other costs of the City's liquor store
operations.
Any proceeds of the Bonds and any sums from time to time
held in the Debt Service Account in excess of amounts which under
then-applicable federal arbitrage regulations may be invested
without regard to yield shall 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. Money in
the Liquor Store Fund 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 or any other bonds
payable from the Debt Service Account to be "federally
guaranteed" within the meaning of Section 149(b) of the Internal
Revenue Code of 1986, as amended (the "Code").
9. Covenants as to Maintenance, Rates and Charqes,
Sale, Insurance, Etc. The City hereby certifies and represents
to, and covenants and agrees with, the Owners from time to time
of the Bonds as follows:
(a) The City will complete and continue its ownership
and operation.of the Liquor Store as a revenue producing
facility and'!~onvenience, in the manner authorized and
subject to the restrictions imposed by Minnesota Statutes,
the laws of the State of Minnesota, including Minnesota
Statutes, Section 340A.601, relating to elections on the
licensing of intoxicating liquors. The City will maintain
355470.1
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the Liquor Store, its furnishings, equipment and merchandise
in good condition, and free from all liens, provided that
purchase money liens may be created on merchandise acquired
for resale, or such merchandise may be acquired subject to
liens existing at the time of acquisition. It should be
noted that Minnesota Statutes, Section 426.20, would require
the City Council to hold a public hearing as a condition to
appropriating City funds, other than the Liquor Store
revenues themselves, to cover any shortfall of revenues
necessary for operation costs, but this provision shall not
apply to appropriations which may need to be made by the
City in order to complete the Liquor Store and any other
expenses expressly, excepted by the foregoing Section of the
Minnesota Statutes. It should also be noted that Minnesota
Statues, Section 340A.602, requires that if the Liquor Store
operates at a loss for any two out of any three consecutive
years, the City Council is required to conduct a public
hearing on the question of whether or not the City should
submit to voter referendum the question of the City's
continued operation of the Liquor Store; alternatively, a 5%
voter petition may also call a referendum on that question
in those circumstances.
(b) If any properties constituting capital assets of
the Liquor Store shall be sold and disposed of, it shall be
only at their fair market value, and the proceeds of such
sale or disposition shall be used either to produce other
capital assets for the Liquor Store or deposited into the
Operation and Maintenance Account. No such sale or sales
shall be made at times or prices such as to imperil the
prompt and full payment of the Bonds.
(c) The City will procure and keep in force insurance
on the Liquor Store and the equipment and furnishings
thereof and all stocks of merchandise, protecting against
loss or damage by fire, tornado, windstorm, flood, theft and
all other causes customarily insured against for like
properties. In the event of loss covered by said insurance
policies or bonds, the proceeds shall be used to repair or
restore the damage or to retire Bonds payable from the
revenues of the Liquor Store.
(d) The City will further keep in force a liability
insurance policy (covering.its operation of the Liquor
Store). Said policy shall~specifically provide for the
payment by the insurance company on behalf of the insured of
all sums which the City shall be obligated to pay by reason
of liability imposed upon it by law for injuries or damage
to persons, other than employees, including liability
imposed by reason of Minnesota Statutes, Section 340A.801.
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The City shall annually provide to each bondholder
certificates or other suitable documentary proofs showing
that the insurance coverages specified in (c) and (d) of
this paragraph 9 are being maintained.
(e) The City will cause proper and adequate books and
records of account to be kept separate from all other
records of the City, reflecting all receipts and
disbursements relating to the Liquor Store and its
operation. All of said books and records shall be open to
inspection and copying at all reasonable times by the Owners
of the Bonds, and the City will, without cost, furnish
copies of any portions thereof reasonably requested by any
bondholder. The City will cause annual operating statements
to be prepared and an independent audit of the books of the
Liquor Store to be made by a competent public accountant,
and will furnish a copy thereof without cost to each
bondholder.
(f) The Gross and Net Revenues of the Liquor Store
will be used and applied only as prescribed in this
Resolution. The City will at all times maintain operating
policies concerning the purchase and sale of merchandise and
do and perform all other acts and things necessary to assure
that the Net Revenues will be at least sufficient to pay the
principal and interest on the Bonds.
(g) Each and all of the foregoing provisions of this
Resolution which in any way tend to secure or assure prompt
and full payment of the principal of and interest on the
Bonds will be promptly and faithfully performed and carried
out by the City and its officers and agents.
10. Additional Bonds. The City reserves the right to
issue additional bonds payable from the Debt Service Account and
secured by the covenants set forth in this Resolution on the
terms and conditions specified in this paragraph.
(a) Purpose of Bonds; Net Revenues. Additional
bonds may be issued only to finance the acquisition and
betterment of improvements or additions to the Liquor
Store, including necessary maintenance equipment, or to
refund bonds issued for such purposes. All revenues
derived from any such improvements or additions shall
be Net Revenues of the Liquor StOre and subject to the
provisions of paragraph 8.
(b) Parity Lien Bonds. Such additional bonds may
be made payable from the Debt Service Account and the
Net Revenues pledged thereto on a parity as to both
355470.1
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principal and interest with all other bonds payable
therefrom only if:
(1) in the last complete fiscal year of the
City immediately preceding the issuance of the
bonds, the amount of Net Revenues was: (A) equal
to not less than 125% of the total amount of
principal and interest to become due in any future
fiscal year on all outstanding bonds payable from
the Debt Service Account and all additional bonds
to be issued, but excluding any bonds to be
refunded by such additional bonds; and(B)
sufficient to pay when due all costs and expenses
payable from the Operation and Maintenance Account
in such last complete fiscal year; provided that
for purposes of this paragraph the Net Revenues
for any fiscal year may be increased to reflect
any increase in the rates and charges which have
been put into effect prior to the issuance of any
additional bonds but were not in effect for all of
such last complete fiscal year; and
(2) the bonds are not made subject to
redemption on a date prior to any outstanding
bonds payable from the Debt Service Account or, if
the bonds are refunding bonds, on a date prior to
the one which the refunded bonds were subject to
redemption;
(3) in the case of refunding bonds, if an
escrow fund is to be established, the City obtains
a report of an independent certified public
accountant that the moneys and securities on hand
in the escrow account are sufficient to pay the
applicable debt service obligations of the
refunded bonds on their stated maturity dates
and/or any date on which such obligations have
been or are to be called for prior redemption and
prepayment; and the City obtains an opinion of
nationally recognized bond counsel stating that
the issuance of the additional bonds will not
cause the interest on any bonds payable from the
Debt Service Account to be includible in gross
income for federal tax purposes; and
(4) the City is not in default under this
Resolutlon or any other resolution authorizing ~he
issuance of any outstanding bonds payable from the
Debt Service Account.
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11. Subordinate Lien Bonds. Except as provided in
paragraph 10, all additional bonds shall be payable from the Net
Revenues after the requirements of paragraph 8 are met, and such
additional bonds described in this paragraph shall be wholly
junior and subordinate to the pledge and appropriation of such
Net Revenues to the Bonds.
12. Debt Service Coveraqe. It is hereby determined
and reasonably anticipated that the estimated collections of the
revenues available to the Debt Service Account will produce at
least 5% in excess of the amount needed to meet, when due, the
principal of and interest on the Bonds.
13. 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.
14. Tax-Exempt Bond Covenants. The City covenants and
agrees with the Owners from time to time of the Bonds that the
City will not use the proceeds of the Bonds or the Project, or
cause or permit the same to be used, in such a manner, and will
not take or permit to be taken by any of its officers, employees,
or agents any action, which would (a) cause the interest on the
Bonds to become subject to taxation under the Internal Revenue
Code of 1986, as amended (the "Code"), or (b) cause the Bonds to
be "private activity bonds" within the meaning of Sections 103
and 141 through 150 of 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 and that the
Bonds will not be private activity bonds under the Code.
In particular, but without limitation, the City covenants to
forebear the implementation, effectuation or enforcement
and all contracts or other agreements respecting the Project, or
any property benefitted thereby or assessed with respect thereto,
which the City may now or in the future have with users,
managers, developers, contractors, owners or any other person or
355470.1
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parties to the extent that such implementation, effectuation or
enforcement would (individually or in the aggregate) cause the
Bonds to become such a "private activity bonds," and to said
limited extent the City would and hereby does (solely for the
benefit of the Owners of the Bonds) disavow any and all such
provisions, entitlements and enforcements which would or could
become so offending.
Without limitation of the foregoing, the City shall not
enter into any lease, use agreement, management or operation
contract or other agreement respecting the Project which would
adversely affect the exemption from federal income tax of the
interest on the Bonds, 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. 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 amounts 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 small issuer exception to the federal
arbitrage rebate requirements, the City hereby finds, determines
and declares that the aggregate face amount of all tax-exempt
bonds (other than private activity bonds) issued by the City (and
all subordinate entities of 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.
16. Desiqnation of Qualified Tax-Exempt Obliqations.
The City hereby designates the Bonds as a "qualified tax-exempt
obligations" within the meaning of Section 265(b) (3) of the Code,
the City hereby 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 1997 will not exceed $10,000,000; and
355470.1
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(b) not more than $10,000,000 of obligations issued or
to be issued by the City during calendar year 1997 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. Defeasance. When any obligation of the Bonds have
been discharged as provided in this paragraph, all pledges,
covenants and other rights granted by this Resolution to the
registered owner of the Bonds (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 Bonds, 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 payment on such
Bonds 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. Compliance With Reimbursement Bonds Requlations.
With respect to the Liquor Store, 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
Bonds will be used to reimburse the City for a cost of the Liquor
Store theretofore paid and temporarily financed by the City out
of other City funds, prior to the initial payment 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, and will thereafter comply with the
requirements of the Reimbursement Regulations (e.g., the
requirements applicable to the reimbursement allocation
~hereunder); otherwise, the proceeds of the Bonds are to be used
~or initial payment, and not for such reimbursement, of costs of
the Liquor Store.
19. No Continuing Disclosure Undertakinq. Based upon
the representations made by the Purchaser in the Bond Purchase
355470.1
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Agreement and upon the fact that the authorized denomination of
each of the Bonds exceeds $100,000, Rule 15c2-12(b) (5) of the
Securities and Exchange Commission, respecting continuing
disclosure, does not apply to the Bonds.
20. Severability. 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 provisions of this Resolution.
21. Headings. Headings in this Resolution are
included for convenience of reference only and shall not limit or
define the meaning of any provision hereof.
Adopted by the Elk River City Council on June 30, 1997.
355470.1 16
CERTIFICATION
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 $1,245,000 Liquor
Store Revenue Bonds of 1997. Said Resolution was duly adopted by
the Elk River City Council at a regular or special meeting of the
Council held on June 30, 1997. 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 Farber moved the adoption of the
Resolution, which motion was seconded by Councilmember
Holm~ren A vote being taken on the motion,
the following members of the Council voted in favor of the
Resolution:
Mayor Duitsman, Councilmembers Father, Holm§ten and Dietz
and the following voted against the same: None
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~lerk~ of the City of
Elk River, Minnesota, this ~ day of <~t?~ , 1997.
(SEAL)
City Clerk n~e
City of Elk River, Mi sota
355470.1