95-073 RES
-
CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION 95- 73
RESOLUTION AWARDING THE SALE OF THE CITY'S $88,000
GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF 1995;
FIXING ITS FORM AND SPECIFICATIONS;
DIRECTING ITS EXECUTION AND DELIVERY;
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
$88,000 General Obligation Equipment Certificate of
1995 (the "Certificate") pursuant to Minnesota
Statutes, Section 412.301, to finance the costs of
the acquisition of the following items of capital
equipment for the City (hereinafter referred to as
the "Equipment"):
~ Equipment:
Fire Radios and Self-
Contained Breathing Apparatus
$25,000
Computer Equipment
8,800
Police Vehicles, Setup and
Equipment
59,300
Emergency Preparedness Siren
10,000
Parks Department Backblade
2,600
Field Groomer
10,500
Costs of Issuance
800
Subtotal
$117,000
Less Funds on Hand
29,000
NET TOTAL
$ 88,000
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(b) The Equipment has an expected useful life at least
as long as the final maturity of the Certificate,
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and for such purposes the City has treated the
above-mentioned police equipment as having a useful
life of 3 years (with corresponding allocation
thereto of the earlier maturities of the
Certificate), with the remaining Equipment having a
useful life of 5 years or more; and the $88,000
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 $88,000
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.
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2. The offer of 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 $88,000
par, the Certificate to be subject to the terms and conditions
herein provided.
3. The City shall forthwith issue and sell its $88,000
General Obligation Equipment Certificate of 1995. The Certificate
shall be dated December 1, 1995, shall be a single, fully
registered obligation without interest coupons, shall bear interest
payable on February 1, 1996, and semiannually thereafter on each
August 1 and February 1, 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.
5.
form:
The Certificate shall be substantially the following
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[Form of Certificate]
No. R-1
$88,000
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
GENERAL OBLIGATION
EQUIPMENT CERTIFICATE OF 1995
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 Bank of Elk
River, or its registered assigns (the "Registered Owner"), the
Principal Sum of EIGHTY-EIGHT THOUSAND DOLLARS ($88,000) on
February 1 in the years and principal amounts, respectively, as
follows:
Year
princioal Amount
1997
1998
1999
2000
$22,000
22,000
22,000
22,000
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
four and sixty hundredths percent (4.60%) per annum, interest to
maturity payable on February 1, 1996, 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 subj ect 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.
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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.
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 h~ve been
done, have happened, and have been performed in regular and due
forrrl, 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.
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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 December I, 1995.
/< ,
City Administrator
Mayor
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Certificate was on
the date specified below registered in the name of Bank of Elk
River and that, at the request of the Registered Owner of this
Certificate, the undersigned has this day 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
Bank of Elk River,
Elk River, Minnesota
December 1, 1995
(End of Form of Certificate)
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6 . The Ci ty 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 hereinafter or
hereafter levied by the City for the purpose of paying the
principal of and interest on the Certificate; (2) second, the
proceeds of the $26,250 ad valorem taxes levied for the Certificate
pursuant to Resolution No. 95-60, adopted by the Council on
September 5, 1995; and (3) third, 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 C~rtificate, 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.
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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
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
1995 1996 $26,250
1996 1997 26,327
1997 1998 24,694
1998 1999 23,631
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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 foregoing ad valorem tax levies) 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
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4It be deemed representations of the City as to the facts stated
therein.
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.
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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 (if
any) to the United States if and to the extent that the
Certificate does not 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 obligations (other than private activity bonds)
issued by the City (and all entities subordinate to, or treated
as one issuer with, the City) during the 1995 calendar year is
not reasonably expected to exceed $5,000,000, all within the
meaning of Section 148(f) (4) (D) of the Code.
16. In order to qualify the Certificate as a "qualified
tax-exempt obligation" within the meaning of Section 265(b) (3) of
the Code, the City hereby makes the following factual statements
and representations:
(a) the Certificate is issued after August 7, 1986;
(b) the Certificate is not a "private activity bond" as
defined in Section 141 of the Code;
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(c) the City hereby designates the Certificate as a
"qualified tax-exempt obligation" for purposes of Section
265(b) (3) of the Code;
(d) 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
1995 will not exceed $10,000,000; and
(e) not more than $10,000,000 of obligations issued or to
be issued by the City during calendar year 1995 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.
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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 payment 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 fi~anced 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
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will have made a duly qualifying statement of its official intent
to bond for such costs; otherwise, the proceeds of the
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 November 6, 1995.
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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 $88,000 General
Obligation Equipment Certificate of 1995. Said Resolution was
duly adopted by the Elk River City Council at a regular or
special meeting of the Council held on November 6, 1995. 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 Holmgren moved
the adoption of the Resolution, which motion was seconded by
Councilmember Dietz .A vote being taken on
the motion, the following members of the Council voted in favor
of the Resolution: Duitsman, Holmgren, Dietz, and Farber
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 .Clerk of the City of
Elk River, Minnesota, this ~ ~day of November, 1995.
(SEAL)
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C1 ty -CTerk--..-.----- ..
City of Elk River,
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