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94-056 RES e Govncilmember Holmgren then introduced the following Resolut1on an~ moved its adoption: RESOLUTION NO. g4-56 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $1,280,000 GENERAL OBLIGATION SEWER REVENUE BONDS, SERIES 1994B 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) That the wastewater treatment plant improvements (the "Improvements") described in the Council's May 2, 1994, resolution relating to these Bonds have been duly ordered by the City and have been constructed by the City or will be constructed under contracts which the City has or will let therefor, all pursuant to and in accordance with Minnesota Statutes, Section 444.075. e (b) That is it necessary and expedient to the sound financial management of the affairs of the City that the City issue its bonds pursuant to Minnesota Statutes, Section 444.075 and Chapter 475, to provide financing for the Improvements. 2. Acceptance of Offer. The offer of (the "Purchaser") to purchase the City's $1,280,000 General Obligation Sewer Revenue Bonds, Series 1994B (the "Bonds"), at the rates of interest and upon the other terms set forth in this Resolution, and to pay therefor the sum of $ plus interest accrued to settlement, is hereby accepted. 3. Title: Original Issue Date: Denominations: Maturities. The Bonds shall be titled "General Obligation Sewer Revenue Bonds, Series 1994B," shall be dated June 1, 1994, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-l upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on February 1 in the years and amounts as follows: we 264042. 1 2 Years Amounts Years Amount~ e 1996 $ 65,000 2003 $ 90,000 1997 70,000 2004 95,000 1998 70,000 2005 100,000 1999 75,000 2006 105,000 2000 80,000 2007 115,000 2001 85,000 2008 120,000 2002 85,000 2009 125,000 4. Puroose. The Bonds shall provide funds to finance the Improvements. The total cost of the Improvements, which shall include all costs enumerated in Minnesota statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Improvements shall proceed with due diligence to completion. 5. Interest. The Bonds shall bear interest payable semiannually on February 1 and August 1 of each year (each, an "Interest PaYment Date"), commencing February 1, 1995, calculated on the basis of a 360-day year consisting of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years, as follows: Maturity Interest Maturity Interest Year Rate Year Rate e 1996 % 2003 % 1997 2004 1998 2005 1999 2006 2000 2007 2001 2008 2002 2009 6. Redemption. All Bonds maturing after February 1, 2004, shall be subject to redemption and prepayment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of e 264042. 1 3 e redemption shall be given to the paying agent and to each affected registered owner of the Bonds. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar, prior to giving notice of redemption, shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or by the registered owner's attorney, duly authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. e 7. Bond Reqistrar. , in , , is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. The principal of and interest on the Bonds shall be paid to the registered owners (or record owners) of the Bonds in the manner set forth in the form of Bond and paragraph 13 of this Resolution. 8. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: e 264042. 1 4 e UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF SHERBURNE CITY OF ELK RIVER R- $ GENERAL OBLIGATION SEWER REVENUE BOND, SERIES 1994B INTEREST RATE MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS e The City of Elk River, Sherburne County, Minnesota (the "City"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above on the maturity date specified above, unless duly called for earlier redemption, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 1995, at the rate per annum specified above (calculated on the basis of a 360-day year consisting of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , (the "Bond Registrar"), acting as paying agent, or at the principal office of any successor paying agent duly appointed by the City. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Registered Owner") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Registered Owner hereof as of the Regular Record Date, and shall be payable to the person who is the Registered Owner hereof at the close of business on a date (the e 264042. , 5 e "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Registered Owners not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. 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 Bond, have been done, have happened and have been performed in regular and due form, time and manner as required by law, and that this Bond, together with all other indebtedness of the City outstanding on the date of original issue hereof and the date of its actual issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. e IN WITNESS WHEREOF, the City of Elk River, Sherburne County, Minnesota, by its city Council, has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its City Administrator; has caused the corporate seal of the City to be intentionally omitted herefrom, as permitted by law; and has caused this Bond to be executed manually by the Bond Registrar, acting as the City's duly appointed authenticating agent for the Bonds. e 264042. 1 6 e Date of Registration: Registrable by: Payable at: BOND REGISTRAR'S CERTIFICATE OF CITY OF ELK RIVER, SHERBURNE COUNTY, MINNESOTA AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. /s/ Facsimile Mayor /s/ Facsimile City Administrator Bond Registrar e By /s/ Manual Authorized Signature ON REVERSE OF BOND I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion executed by the above-named attorneys, except as to the dating thereof, which opinion has been handed to me for filing in my office prior to the time of delivery of the Bonds. (facsimile signature) city Clerk City of Elk River, Minnesota e 264042.1 7 e Rede~~tion. All Bonds of this issue maturing after February 1, 2004, are sUbject to redemption and prepaYment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepaYment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepayment, the Bonds of that maturity to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. PUblished notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. e Selection of Bonds for Redemotion: Partial Redemotion. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing), and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: puroose: General Obliqation. This Bond is one of an issue in the total principal amount of $1,280,000, all of like date of original issue and tenor, except as to registration number, maturity, interest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State of e 264042. 1 8 e Minnesota and pursuant to a resolution adopted by the City Council on May 23, 1994 (the "Resolution"), for the purpose of providing money to finance certain costs of improvements to the City's wastewater treatment utility. This Bond constitutes a general obligation of the City, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. Denominations: Exchange: Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. e Transfer. This Bond is transferable by the Registered Owner in person or by the Registered Owner's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the City contained in any agreement with the Bond Registrar. Thereupon the City shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees UDon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reqistered Owners. The City and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and e 264042. 1 9 e neither the City nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the certificate of Authentication hereon shall have been executed by the Bond Registrar. Qua~ified Tax-Exempt Ob~igations. The Bonds have been designated by the City as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cust) under the (Minor) Uniform e (state) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. e 264042. 1 10 ASSIGNMENT e For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. as Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: e Signature(s) must be guaranteed by a national bank or trust company, by a brokerage firm having a membership in one of the major stock exchanges or by any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15(a) (2). , The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) e 264042. 1 11 e 9. E~ecution: ~emporary Bonds. The Bonds shall be executed on behalf of the City by the signatures of its Mayor and City Administrator and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed facsimile; and provided further that both of such signatures may be printed facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in substantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and cancelled. e 10. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is June 1, 1994. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The City Clerk shall obtain a copy of the proposed approving legal opinion of bond counsel, Briggs and Morgan, Professional Association, st. Paul, Minnesota, which shall be complete except as to dating ther~of, shall cause such opinion to be filed in the offices of the City, and shall cause said opinion to be printed on each of the Bonds, together with a certificate to be signed by the facsimile signature of the City Clerk in substantially the form set forth in the foregoing form of the Bonds. e 264042. 1 12 e 11. Registration: Transfer: Exchanqe. The city will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 10) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. e At the option of the registered owner thereof, Bonds may be exchanged for Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the registered owner making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this Resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the city. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid obligations of the City evidencing the same debt, and entitled to the same benefits under this Resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. e 264042. 1 13 e Transfers shall also be subject to reasonable regula- tions of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 12. Riqh~s Upon Transfer Of Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carryall the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. e 13. Interest Payment: Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the registered owner thereof as of the Regular Record Date, and shall be payable to the person who is the registered owner thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the registered owners not less than ten (10) days prior to the Special Record Date. 14. Treatment of Reqistered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 13 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 15. Deliverv: Apolication of Proceeds. The Bonds when so prepared and executed shall be delivered by the City Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 16. Fund and Accounts. There is hereby created a special fund of the city designated the "$1,280,000 General Obligation Sewer Revenue Bonds, Series 1994B Fund" (the "Fund") to be held and administered by the City as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the city. The Fund shall continue to be maintained in the manner herein specified until all of the e 264042. 1 14 e e e Bonds herein authorized and all other bonds payable from said Fund and the interest thereon have been fully paid. There shall be maintained in the Fund two (2) separate accounts, to be designated the "Capital Account" and "Debt Service Account", respectively. (i) Ca9ital Account. To the Capital Account there shall be credited the proceeds of the sale of the Bonds, less such amounts thereof as shall be deposited into the Debt Service Account pursuant to paragraph 16(ii) below. From the Capital Account there shall be paid all costs and expenses of making the Improvements, including the cost of any construction contracts heretofore let, the costs of issuing the Bonds and all other costs incurred and to be incurred of the kind authorized in Minnesota statutes, Section 475.65; and the moneys in said account shall be used for no other purpose except as otherwise provided by law. (ii) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (a) the net revenues of the City's municipal sanitary sewer system (as hereinafter described, the "Net Revenues"), but only in amounts and at such times as will be sufficient (together with other amounts in the Debt Service Account) to pay, when due, the principal of and interest on the Bonds; (b) all accrued interest received upon delivery of the Bonds; (c) any collections of all taxes hereafter levied for the paYment of the Bonds and interest thereon; (d) all investment earnings on funds held in the Debt Service Account; and (e) any and all other moneys which are properly available and are appropriated by the Council to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal of and interest on the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. As used in this Resolution, the term Net Revenues means the gross revenues derived by the City from the operation of its municipal sanitary sewer system, including all charges for service, use, availability, and connection to said system, and all monies received from the sale of any facilities or equipment of said system or any by-products thereof, less all normal, reasonable, or current costs of owning, operating, and maintaining the system. If any paYment of principal or interest on the Bonds 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 Net Revenues or of any general ad valorem taxes hereafter levied for 264042. 1 15 e e e such purpose, when collected. The City hereby covenants that it will impose and collect charges for the service, use, and availability of and connection to the City's municipal sanitary sewer system, at the times and in the amounts required to produce Net Revenues adequate, together with other sources of funding available to the Debt Service Account, to pay all principal of and interest on the Bonds, when due. Nothing contained herein shall be deemed to preclude the city from making further pledges and appropriations of the Net Revenues of the City's municipal sanitary sewer system for the payment of other or additional obligations of the City, provided that it has first been determined that the estimated Net Revenues of the City's municipal sanitary sewer system will be sufficient, in addition to all other sources, for the paYment of the Bonds and such additional obligations, and any such pledge and appropriation of said Net Revenues may be made superior or subordinate to, or on a parity with, the pledge and appropriation herein. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the "issue price" of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the capital Account or 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 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 Additional Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). 17. 105% Debt Service Coverage. It is hereby determined and reasonably anticipated that the estimated collections of the Net Revenues and the other 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, and accordingly no ad valorem tax levy is 264042. 1 16 e required at this time. The City Clerk is directed to file a certified copy of this Resolution with the County Auditor of Sherburne County and to obtain the certificate of said official required by Minnesota Statutes, Section 475.63. 18. General Obligation Pledqe. 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 Bonds, 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 Council shall levy ad valorem taxes on all taxable property in the City in the amount of such deficiency. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. e 19. 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. 20. Neqative Covenant as to Use of Im~rovements. The City hereby covenants not to use the Improvements or to cause or permit the Improvements to be used, or to enter into any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 21. 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 and to the extent e 264042. 1 17 e e e that the Bonds do not qualify 'for available exceptions. In calendar year 1994, the City does not expect to qualify for the $5,000,000 "small issuer" exception to the federal arbitrage rebate requirements. 22. Designation of Qualified Tax-~xemDt Obliaations. In order to qualify the Bonds as "qualified tax-exempt Obligations" within the meaning of Section 265(b) (3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" 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 1994 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 1994 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. 23. Defeasance. When any obligation of a Bond has been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this Resolution to the registered owner of that Bond (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 any Bond, 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 264042. 1 18 e may include any interest paYm~nt on such Bond 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). 24. Com~li~nce With Reimbursement Bond Reaulations. with respect to the Improvements, the City has complied and will continue to comply with the "Reimbursement Regulations" provided in United states Treasury Regulations Section 1.103-18, and any successor regulations as may be applicable, including 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"), 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 Improvements 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; otherwise, the proceeds of the Bonds are to be used for initial payment, and not for such reimbursement, of costs of the Improvements. e 25. Severability. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforcea~ility of such section, paragraph or provision shall not affect any of the remaining provisions of this Resolution. 26. Headinqs. Headings in this Resolution are included for convenience of reference only and shall not limit or define the meaning of any provision hereof. Adopted on May 23, 1994, by the Elk River City Council. The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Farber and upon a vote being taken thereon, the following voted in favor thereof: Mayor Duitsman, Councilmembers Scheel, Farber, Deitz, and Holmgren and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. e 264042. 1 19