2.5 ERMUSR 05-11-2021______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Michelle Canterbury – Executive Administrative Manager
MEETING DATE:
May 11, 2021
AGENDA ITEM NUMBER:
2.5
SUBJECT:
Resolution Awarding the Issuance and Sale of Electric Revenue Bonds, Series 2021B
ACTION REQUESTED:
Receive and file Resolution No. 21-10 Awarding the Issuance and Sale of Electric Revenue
Bonds, Series 2021B
BACKGROUND:
At the April 13, 2021 Commission Meeting, The Commission adopted the bid tabulation and
Resolution Awarding the Issuance and Sale of $11,810,000 Electric Revenue Bonds, Series
2021B, to Hilltop Securities, Inc.
DISCUSSION:
As the resolution has now been populated with the information from bid tabulation, and the
lower borrowing amount, staff is presenting the final copy of the resolution to have on record.
ATTACHMENTS:
• Resolution No. 21-10 Awarding the Issuance and Sale of Electric Revenue Bonds, Series
2021B
EL185-68-707442.v4
EXTRACT OF MINUTES OF MEETING OF THE
ELK RIVER MUNICIPAL UTILITIES COMMISSION
HELD: April 13, 2021
Pursuant to due call and notice thereof, a regular meeting of the Elk River Municipal
Utilities Commission, was duly held in the Elk River Fire Station EOC Conference Room, 13073
Orono Parkway in said City on the 13th day of April, 2021, at 3:30 P.M., for the purpose, in part,
of awarding the sale of $11,810,000 Electric Revenue Bonds, Series 2021B.
The following members were present: Chair Dietz, and Commissioners Paul Bell,
Al Nadeau, Mary Stewart, and Matt Westgaard
and the following were absent: None
Member Stewart introduced the following resolution and moved its adoption:
Resolution No. 21-10
RESOLUTION AWARDING THE ISSUANCE AND SALE OF $11,810,000 ELECTRIC
REVENUE BONDS, SERIES 2021B AND PLEDGING NET REVENUES FOR THE
SECURITY THEREOF
BE IT RESOLVED by the Elk River Municipal Utilities Commission (the
“Commission”), as follows:
Section 1. Definitions; Interpretation. For all purposes of this Resolution, except as
otherwise expressly provided or unless the context otherwise requires, the terms defined in this
section have the meanings assigned to them in this section. All terms defined in this section
include the plural as well as the singular and the female as well as the male. Except as otherwise
expressly provided herein, accounting terms not otherwise defined herein have the meanings
assigned to them, and all computations herein provided for shall be made, in accordance with
generally accepted accounting principles.
“Accountant” means a Person engaged in the practice of accounting, retained by the
Commission.
“Act” means, collectively, Minnesota Statutes, Sections 412.321 through 412.391, and
Chapters 453 and 475, including any amendment thereof.
“Additional Bonds” means any Bonds issued pursuant to Section 10.
“Audited Fiscal Year” means a Fiscal Year for which the financial statements of the
Commission have been audited, as required by Section 12(g).
62
2
EL185-68-707442.v4
“Bond Counsel” means any attorney or firm of attorneys having a favorable reputation
for matters relating to tax-exempt financing of properties similar to the Electric System, retained
by the Commission.
“Bondholder” means the Person in whose name a Bond is registered in the Bond
Register.
“Bond Register” means the register maintained by the Registrar pursuant to Section 6.01.
“Bonds” means any Outstanding Series 2021B Bonds, any Outstanding Prior Bonds, and
any Outstanding Additional Bonds.
“City” means the City of Elk River, Minnesota, and any successor to its obligations under
this Resolution.
“Code” means the Internal Revenue Code of 1986, including any amendment thereof.
“Commission” means the Elk River Municipal Utilities Commission, and any successor
to its obligations under this Resolution.
“Commission Resolution” means a resolution or other legislative enactment duly adopted
by the Commission.
“Consultant” means a Person having a favorable reputation as experienced in planning
and financing, and evaluating the economic feasibility, of properties similar to the Electric
System, retained by the Commission.
“Debt Service Account” means the account so designated in the Electric Fund.
“Electric Fund” means the Electric Fund maintained on the official books of account of
the City.
“Electric System” means the municipal electric light and power plant and distribution
system of the City, as it may at any time exist, including any replacement, expansion or
improvement thereof.
“Fiscal Year” means the period commencing on January 1 of any year and ending on
December 31 of the same year, or any other period of twelve consecutive months specified by
Commission Resolution as the fiscal year of the Commission.
“Government Obligations” means direct obligations of, or obligations the principal of and
the interest on which are fully and unconditionally guaranteed by the United States of America.
“Gross Revenues” means all revenues and receipts from rates, fees, charges, and rentals
imposed by the Commission for the availability, benefit, use and products of the Electric System
or any part thereof, and any penalties and interest thereon, and income from the investment
thereof. Gross Revenues do not include amounts received from the sale of property which is part
of the Electric System or amounts borrowed with respect to the Electric System.
63
3
EL185-68-707442.v4
“Holder” means a Bondholder.
“Interest Payment Date” means a date specified in a Bond as a fixed date for payment of
an installment of interest on the Bond.
“Municipal Utilities Commission” means the governing body of the Commission.
“Net Revenues” means the Gross Revenues of the Electric System for any specified
period, less the Operating Expenses of the Electric System for the same specified period.
“Operating Account” means the account so designated in the Electric Fund.
“Operating Expenses” means the current expenses of operation, maintenance and minor
or current repair of the Electric System for any specified period. Operating Expenses include,
without limitation, administrative expenses of the Commission relating to the Electric System,
franchise fees, premiums for insurance relating to the Electric System, and amounts necessary to
accumulate and maintain the Operating Reserve Requirement. Operating Expenses do not
include depreciation, amortization, or interest expense.
“Operating Reserve Requirement” means an amount equal to the greater of (i) one
month’s Operating Expenses, based upon the financial statements of the Commission for the
preceding Audited Fiscal Year, or (ii) a larger amount reasonably determined by the Commission
to be necessary to be maintained as a reserve for payment of Operating Expenses.
“Outstanding” means when used with reference to the Bonds or the Prior Bonds, as the
case may be, as of the date of determination, all Bonds or Prior Bonds, as the case may be,
theretofore issued except Bonds or Prior Bonds, as the case may be, which have been paid or are
deemed to have been paid as provided in Section 16.
“Person” means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government, or any agency or political
subdivision thereof.
“Prior Bonds” means the $9,755,000 original principal amount of Electric Revenue
Bonds, Series 2016A, dated July 14, 2016, $8,465,000 in principal amount of which is currently
outstanding, and $1,370,000 original principal amount of Electric Revenue Refunding Bonds,
Series 2016B, dated July 14, 2016, $240,000 in principal amount of which is currently
outstanding and $10,000,000 original principal amount of Electric Revenue Bonds, Series
2018A, dated September 26, 2018, $9,415,000 in principal amount of which is currently
outstanding.
“Prior Resolution” means, collectively, the Resolutions duly adopted by the Commission
on June 14, 2016 and August 29, 2018, with respect to the Prior Bonds.
“Project” means the financing the remaining cost of the acquisition of the Commission’s
membership interest in the Minnesota Municipal Power Agency (MMPA).
64
4
EL185-68-707442.v4
“Project Account” means the Project Account established in the Electric Fund pursuant to
Section 13 hereof.
“Purchaser” means Hilltop Securities, Dallas, Texas.
“Registrar” means U.S. Bank National Association, in St. Paul, Minnesota, or its
successor appointed by the Commission pursuant to Section 6.01.
“Repair and Replacement Account” means the account so designated in the Electric
Fund.
“Reserve Account” means the account so designated in the Electric Fund.
“Reserve Requirement” means, as of the date of issuance of a series of Bonds, an amount
equal to the least of (i) 10% of the original principal amount of the Bonds, or (ii) the maximum
amount of principal and interest payable during the then current Fiscal Year or any future Fiscal
Year on all Bonds Outstanding as of the date of issuance of a series of such Bonds, or (iii) 125%
of the average annual principal and interest payable on all Bonds Outstanding as of the date of
issuance of a series of such Bonds.
“Resolution” means this Resolution, including any amendment hereof or supplement
hereto adopted in accordance with Section 15.
“Series 2021B Bonds” means the Bonds created by Section 5.
“State” means the State of Minnesota.
Section 2. Recitals.
2.01. Electric System. The City owns and, for financing purposes, operates a municipal
Electric System, hereinafter referred to as the “Electric System.”
2.02. Municipal Utilities Commission. The City has established the Commission and
placed the Electric System under the jurisdiction of the Commission pursuant to the Act. The
City has granted to the Commission a non-exclusive franchise to transmit, furnish, deliver or
receive electrical energy within the utility service area. The Commission operates the Electric
System as a public, revenue-producing convenience, providing service to the City and its
inhabitants and residents and other customers in the area surrounding the City, as authorized by
the Act.
2.03. Parity of Lien Test. All of the payments required to be made into the various
funds and accounts provided for in the Prior Resolution authorizing the issuance of the Prior
Bonds have been made and there is sufficient money in the Debt Service Account of the Electric
Fund to pay all principal and interest on all obligations payable from the Net Revenues coming
due during the 12-month period next succeeding the issuance of the Series 2021B Bonds.
The gross revenues, expenses of operation and maintenance and Net Revenues of the
Electric System from all sources for the Audited Fiscal Year immediately preceding the issuance
65
5
EL185-68-707442.v4
of the Series 2021B Bonds, adjusted for such Fiscal Year as permitted by the Prior Resolution
are as follows:
Audited Fiscal Year Ended 2020
OPERATING REVENUES $37,922,507
OPERATING EXPENSES (33,959,004)
NET OPERATING INCOME (LOSS) $3,963,503
ADD BACK DEPRECIATION $2,896,839
ADD OTHER INCOME $681,477
NET REVENUES $7,541,819
The Net Revenues of the Electric System for the Audited Fiscal Year immediately
preceding the issuance of the Series 2021B Bonds, adjusted as set forth above, were at least
125% of the average annual principal and interest coming due during the remaining term of the
Prior Bonds plus the Series 2021B Bonds computed to August 1, 2048 (the final maturity date of
the Prior Bonds). The combined average annual principal and interest requirement for the Series
2021B Bonds and the Prior Bonds, is $1,779,015.78.
Other than the Prior Bonds and the Series 2021B Bonds, the Commission has no other
bonds, warrants, certificates or other obligations or evidences of indebtedness of money
borrowed for or on account of the Electric System or indebtedness for which the Net Revenues
of the Electric System have been appropriated or pledged.
2.04. Sufficiency of Gross Revenues and Net Revenues. The Commission reasonably
anticipates that the Gross Revenues to be received during the period for which the Series 2021B
Bonds will be outstanding will be more than sufficient to pay all costs of the operation and
maintenance of the Electric System and to provide Net Revenues adequate to pay the principal of
and interest on the Series 2021B Bonds and the Prior Bonds when due.
2.05. Authorization of Series 2021B Bonds. The Commission is authorized by law to
borrow money necessary to finance the Project and to pay the related financing costs and fund
the Reserve Account. It is necessary and expedient for the City forthwith to issue its Electric
Revenue Bonds, Series 2021B, in the principal amount of $11,810,000. All costs of the Project
in excess of the proceeds of the Series 2021B Bonds available for payment of such costs shall be
paid from any other funds legally available to the Commission for such purpose.
2.06. Sale of Series 2021B Bonds. The Commission has retained Baker Tilly
Municipal Advisors, LLC (“Baker Tilly”), as its independent municipal advisor for the sale of
the Series 2021B Bonds and was therefore authorized to sell the Series 2021B Bonds by private
negotiation in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9) and
proposals to purchase the Series 2021B Bonds have been solicited by Baker Tilly.
2.07. Receipt and Acceptance of Proposals. Proposals have been received by the
Finance Manager, or designee, at the offices of Baker Tilly on the date hereof pursuant to the
66
6
EL185-68-707442.v4
Terms of Proposal established for the Series 2021B Bonds and are set forth in Exhibit A. The
proposal of the Purchaser, to purchase the Series 2021B Bonds in accordance with the Terms of
Proposal, at the rates of interest hereinafter set forth, and to pay therefor the sum of
$12,412,389.14 (par amount of $11,810,000.00, plus a premium of $680,441.55 and less an
underwriter’s discount of $78,052.41), plus interest accrued to settlement, is hereby found,
determined and declared to be the most favorable proposal received and is hereby accepted and
the Series 2021B Bonds are hereby awarded to the Purchaser. The Finance Manager is directed
to retain the deposit of the Purchaser, pending completion of the sale of the Series 2021B Bonds.
2.08. Performance of Requirements. All acts, conditions and things which are required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be
performed precedent to and in the valid issuance of the Series 2021B Bonds having been done,
existing, having happened and having been performed, it is now necessary to establish the form
and terms of the Series 2021B Bonds, to provide security therefor and to issue the Series 2021B
Bonds forthwith.
Section 3. Security for Series 2021B Bonds.
3.01. Pledge of Net Revenues. From and after their issuance, the principal of and
interest on the Series 2021B Bonds, as set forth in Section 5, shall be payable solely from and
constitute a parity lien and charge on the respective subaccounts of the Electric Fund, including
but not limited to the Debt Service Account, the Reserve Account, and the Net Revenues of the
Electric System.
3.02. Reserve Account Requirement. Upon issuance of the Series 2021B Bonds, the
Commission shall deposit, from proceeds of the Series 2021B Bonds, in the Reserve Account
$517,656.78, so that the balance in the Reserve Account shall be not less than the applicable
Reserve Requirement.
3.03. Not General Obligations. The Series 2021B Bonds are not general obligations of
the City or the Commission and the full faith and credit and taxing powers of the City are not
pledged for their payment.
Section 4. Form of Series 2021B Bonds.
4.01. Series 2021B Bond Form. The Series 2021B Bonds shall be prepared in
substantially the form attached hereto as Exhibit B:
Section 5. Series 2021B Bond Terms Execution and Delivery.
5.01. Maturities, Interest Rates, Denominations, Payment and Dating of Series 2021B
Bonds. The City shall forthwith issue and deliver the Series 2021B Bonds which shall be in the
denomination of $5,000 each or any integral multiple thereof of a single maturity, shall bear a
date of original issue, shall mature on August 1 in the years and amounts set forth below and
shall bear interest from date of original issue until paid or duly called for redemption at the rates
per annum set forth below:
67
7
EL185-68-707442.v4
Year Amount
Interest
Rate Year Amount
Interest
Rate
2022 $155,000 5.000% 2034 $385,000 2.000%
2023 235,000 5.000 2035 395,000 2.000
2024 250,000 5.000 2036 400,000 2.000
2025 260,000 5.000 2037 410,000 2.000
2026 275,000 5.000 2039* 845,000 2.000
2027 290,000 5.000 2040 435,000 2.000
2028 300,000 5.000 2041 445,000 2.000
2029 315,000 5.000 2042 450,000 2.000
2030 335,000 5.000 2043 460,000 2.125
2031 350,000 5.000 2044 470,000 2.125
2032 365,000 3.000 2047* 1,475,000 2.250
2033 380,000 2.000 2051* 2,130,000 2.250
*Term Bond
As may be requested by the Purchaser, one or more term Series 2021B Bonds may be issued
having mandatory sinking fund redemption and final maturity amounts conforming to the
foregoing principal repayment schedule and corresponding additions may be made to the
provisions of the applicable Series 2021B Bond(s).
The Series 2021B Bonds shall be issuable only in fully registered form. The interest
thereon and, upon surrender of each Series 2021B Bond, the principal amount thereof, shall be
payable by check or draft issued by the Registrar.
5.02. Interest Payment Dates. The Series 2021B Bonds shall bear interest payable
semiannually on February 1 and August 1 of each year, commencing February 1, 2022,
calculated on the basis of a 360-day year of twelve 30-day months to the person in whose name
the Series 2021B Bond is registered in the Bond Register at the close of business on the 15th day
of the immediately preceding month, whether or not such day is a business day.
5.03. Optional Redemption. The City may elect on February 1, 2031, and on any day
thereafter to prepay Series 2021B Bonds maturing on or after February 1, 2032. Redemption may
be in whole or in part and if in part, at the option of the City and in such manner as the City will
determine. If less than all Series 2021B Bonds of a maturity are called for redemption, the City will
notify DTC (as defined in Section 8 hereof) of the particular amount of such maturity to be prepaid.
DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed
and each participant will then select by lot the beneficial ownership interests in such maturity to be
redeemed. Prepayments will be at a price of par plus accrued interest.
5.04. Term Bonds; Mandatory Redemption. The Series 2021B Bonds maturing in 2039,
2047 and 2051 shall hereinafter be referred to collectively as the “Term Bonds.” The principal
amounts of the Term Bonds subject to mandatory sinking fund redemption on any date may be
reduced through earlier optional redemptions, with any partial redemptions of the Term Bonds
credited against future mandatory sinking fund redemptions of such Term Bonds in such order as
the City shall determine. The Term Bonds are subject to mandatory sinking fund redemption and
68
8
EL185-68-707442.v4
shall be redeemed in part by lot at par plus accrued interest on the sinking fund installment dates and
in the principal amounts as follows:
Sinking Fund Installation Date Principal Amount
August 1, 2039 Term Bonds
2038 $420,000
2039 (maturity) 425,000
Sinking Fund Installation Date Principal Amount
August 1, 2047 Term Bonds
2045 $480,000
2046 490,000
2047 (maturity) 505,000
Sinking Fund Installation Date Principal Amount
August 1, 2051 Term Bonds
2048 $515,000
2049 525,000
2050 540,000
2051(maturity) 550,000
5.05. Term Application of Proceeds. Immediately upon delivery of the Series 2021B
Bonds to the Purchaser, the amount received as accrued interest on the Series 2021B Bonds shall
be credited to the Debt Service Account and the remaining proceeds, net of the amount deposited
in the Reserve Account pursuant to Section 3.02, shall be deposited in the Project Account and
used to pay costs of issuance of the Series 2021B Bonds and costs of financing the Project, as
provided in Section 13.
Section 6. Registration; Appointment of Registrar; Book-Entry System.
6.01. Registration. The City, by the Commission, will appoint, and will maintain, a
bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”). The effect
of registration and the rights and duties of the City and the Registrar with respect thereto are as
follows:
(a) Register. The Registrar will keep at its principal corporate trust office a
bond register in which the Registrar provides for the registration of ownership of the
Series 2021B Bonds and the registration of transfers and exchanges of Bonds entitled to
be registered, transferred or exchanged.
69
9
EL185-68-707442.v4
(b) Transfer of Series 2021B Bonds. Upon surrender for transfer of any
Series 2021B Bond, duly endorsed by the registered owner thereof or accompanied by a
written instrument of transfer, in form satisfactory to the Registrar, duly executed by the
registered owner thereof or by an attorney duly authorized by the registered owner in
writing, the Registrar will authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Series 2021B Bonds of a like aggregate
principal amount and maturity, as requested by the transferor. The Registrar may,
however, close the books for registration of any transfer after the 15th day of the month
preceding each interest payment date and until that interest payment date.
(c) Exchange of Series 2021B Bonds. Whenever any Series 2021B Bonds are
surrendered by the registered owner for exchange, the Registrar will authenticate and
deliver one or more new Series 2021B Bonds of a like aggregate principal amount and
maturity, as requested by the registered owner or the owner’s duly authorized attorney in
writing.
(d) Cancellation. All Series 2021B Bonds surrendered upon any transfer or
exchange will be promptly cancelled by the Registrar and thereafter disposed of as
directed by the City.
(e) Improper or Unauthorized Transfer. When a Series 2021B Bond is
presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until
the Registrar is satisfied that the endorsement on the Series 2021B Bond or separate
instrument of transfer is valid and genuine and that the requested transfer is legally
authorized. The Registrar will incur no liability for the refusal, in good faith, to make
transfers which it, in its judgment, deems improper or unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person
in whose name a Series 2021B Bond is at any time registered, as of the applicable record
date, in the bond register as the absolute owner of such Series 2021B Bond, whether the
Series 2021B Bond is overdue or not, for the purpose of receiving payment of, or on
account of, the principal of and interest on the Series 2021B Bond and for all other
purposes, and payments so made to a registered owner or upon the owner’s order will be
valid and effectual to satisfy and discharge the liability of the City upon the Series 2021B
Bond to the extent of the sum or sums so paid.
(g) Taxes Fees and Charges. The Registrar may impose a charge upon the
owner thereof for a transfer or exchange of Series 2021B Bonds sufficient to reimburse
the Registrar for any tax, fee or other governmental charge required to be paid with
respect to the transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Series 2021B Bonds. If a Series
2021B Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a
new Series 2021B Bond, of like amount, number, maturity date and tenor in exchange
and substitution for and upon cancellation of the mutilated Series 2021B Bond or in lieu
of and in substitution for any such Series 2021B Bond destroyed, stolen or lost, upon the
payment of the reasonable expenses and charges of the Registrar in connection therewith;
70
10
EL185-68-707442.v4
and, in the case of a Series 2021B Bond destroyed, stolen or lost, upon filing with the
Registrar of evidence satisfactory to the Registrar that the Series 2021B Bond was
destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the
Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to
it and as provided by law, in which the City, the Commission, and the Registrar must be
named as obligees. Series 2021B Bonds so surrendered to the Registrar will be cancelled
by the Registrar and evidence of such cancellation must be given to the Commission. If
the mutilated, destroyed, stolen or lost Series 2021B Bond has already matured or been
called for redemption in accordance with its terms it will not be necessary to issue a new
Series 2021B Bond prior to payment.
6.02. Appointment of Initial Registrar. The City appoints U.S. Bank National
Association, St. Paul, Minnesota, as the initial Registrar. The President and Secretary are
authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon
merger or consolidation of the Registrar with another corporation, if the resulting corporation is a
bank or trust company authorized by law to conduct such business, the resulting corporation is
authorized to act as successor Registrar. The City agrees to pay the reasonable and customary
charges of the Registrar for the services performed. The City reserves the right to remove the
Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which
event the predecessor Registrar must deliver all cash and Series 2021B Bonds in its possession to
the successor Registrar and deliver the bond register to the successor Registrar. On or before
each principal or interest due date, without further order of this Commission, there shall be
transmitted to the Registrar, from amounts on hand in the Debt Service Account available
therefore, an amount sufficient to pay all principal and interest then due on the Bonds.
6.03. Initial Issue. The Series 2021B Bonds will be initially issued in the form of a
separate single typewritten or printed fully registered Series 2021B Bond for each of the
maturities set forth in this Resolution. Upon initial issuance, the ownership of each such Series
2021B Bond will be registered in the registration books kept by the Registrar in the name of
Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its
successors and assigns (“DTC”). Except as provided in this section, all of the outstanding Series
2021B Bonds will be registered in the registration books kept by the Registrar in the name of
Cede & Co., as nominee of DTC.
6.04. DTC. With respect to Series 2021B Bonds registered in the registration books
kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and
the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other
financial institutions from time to time for which DTC holds Series 2021B Bonds as securities
depository (the “Participants”) or to any other person on behalf of which a Participant holds an
interest in the Series 2021B Bonds, including but not limited to any responsibility or obligation
with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with
respect to any ownership interest in the Series 2021B Bonds, (ii) the delivery to any Participant
or any other person other than a registered owner of Series 2021B Bonds, as shown by the
registration books kept by the Registrar, of any notice with respect to the Series 2021B Bonds,
including any notice of redemption, or (iii) the payment to any Participant or any other person,
other than a registered owner of Series 2021B Bonds, of any amount with respect to principal of,
premium, if any, or interest on the Series 2021B Bonds. The City, the Registrar and the Paying
71
11
EL185-68-707442.v4
Agent may treat and consider the person in whose name each Series 2021B Bond is registered in
the registration books kept by the Registrar as the holder and absolute owner of such Series
2021B Bond for the purpose of payment of principal, premium and interest with respect to such
Series 2021B Bond, for the purpose of registering transfers with respect to such Series 2021B
Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any,
and interest on the Series 2021B Bonds only to or on the order of the respective registered
owners, as shown in the registration books kept by the Registrar, and all such payments will be
valid and effectual to fully satisfy and discharge the City’s obligations with respect to payment
of principal of, premium, if any, or interest on the Series 2021B Bonds to the extent of the sum
or sums so paid. No person other than a registered owner of Series 2021B Bonds, as shown in
the registration books kept by the Registrar, will receive a certificated Series 2021B Bond
evidencing the obligation of this resolution. Upon delivery by DTC to the City of a written
notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co.,
the words “Cede & Co.,” will refer to such new nominee of DTC; and upon receipt of such a
notice, the City will promptly deliver a copy of the same to the Registrar and Paying Agent, if
the Paying Agent is other than the Registrar.
6.05. Representation Letter. The City has heretofore executed and delivered to DTC a
Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern
payment of principal of, premium, if any, and interest on the Series 2021B Bonds and notices
with respect to the Series 2021B Bonds. Any Paying Agent or Registrar subsequently appointed
by the City with respect to the Series 2021B Bonds will agree to take all action necessary for all
representations of the City in the Representation Letter with respect to the Registrar and Paying
Agent, respectively, to be complied with at all times.
6.06. Transfers Outside Book-Entry System. In the event the City, by resolution of the
Commission, determines that it is in the best interests of the persons having beneficial interests in
the Series 2021B Bonds that they be able to obtain Series 2021B Bond certificates, the City will
notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of
Series 2021B Bond certificates. In such event the City will issue, transfer and exchange Series
2021B Bond certificates as requested by DTC and any other registered owners in accordance
with the provisions of this Resolution. DTC may determine to discontinue providing its services
with respect to the Series 2021B Bonds at any time by giving notice to the City and discharging
its responsibilities with respect thereto under applicable law. In such event, if no successor
securities depository is appointed, the City will issue and the Registrar will authenticate Series
2021B Bond certificates in accordance with this resolution and the provisions hereof will apply
to the transfer, exchange and method of payment thereof.
6.07. Payments to Cede & Co. Notwithstanding any other provision of this Resolution
to the contrary, so long as a Series 2021B Bond is registered in the name of Cede & Co., as
nominee of DTC, payments with respect to principal of, premium, if any, and interest on the
Series 2021B Bond and all notices with respect to the Series 2021B Bond will be made and
given, respectively in the manner provided in DTC’s Operational Arrangements, as set forth in
the Representation Letter.
Section 7. Notice of Redemption. At least 20 days before the date set for mandatory
redemption of any Series 2021B Bond, the City shall cause notice of such redemption to be
72
12
EL185-68-707442.v4
mailed to the registered Holder of each Series 2021B Bond to be redeemed, but no defect in or
failure to give such mailed notice of redemption shall affect the validity of proceedings for the
redemption of any Series 2021B Bond not affected by such defect or failure. The notice of
redemption shall specify the redemption date, redemption price, the numbers, interest rates and
CUSIP numbers of the Series 2021B Bonds to be redeemed and the place at which the Series
2021B Bonds are to be surrendered for payment, which shall be the principal office of the
Registrar. Notice of redemption having been given as aforesaid, the Series 2021B Bonds or
portions thereof so to be redeemed shall, on the redemption date, become due and payable at the
redemption price therein specified and from and after such date (unless the City shall default in
the payment of the redemption price) such Series 2021B Bonds or portions thereof shall cease to
bear interest.
Series 2021B Bonds in a denomination larger than $5,000 may be redeemed in part in
any integral multiple of $5,000. The Holder of any Series 2021B Bond redeemed in part shall
receive, upon surrender of such Series 2021B Bond to the Registrar, one or more new Series
2021B Bonds of the same series in authorized denominations equal in principal amount to the
unredeemed portion of the Series 2021B Bond so surrendered.
Section 8. Execution, Authentication and Delivery of Series 2021B Bonds. The
Series 2021B Bonds shall be prepared under the direction of the Secretary and shall be executed
on behalf of the City by the facsimile signatures of the Mayor and the Clerk and on behalf of the
Commission by the facsimile signatures of the President and Secretary of the Commission. In
case any officer whose signature appears on the Series 2021B Bonds shall cease to be such
officer before the delivery of any Series 2021B Bond, such signature shall nevertheless be valid
and sufficient for all purposes, the same as if such officer had remained in office until delivery.
Notwithstanding such execution, no Series 2021B Bond shall be valid or obligatory for any
purpose or entitled to any security or benefit under this Resolution unless a certificate of
authentication on such Series 2021B Bond has been executed by the manual signature of an
authorized representative of the Registrar. Certificates of authentication on different Series
2021B Bonds need not be signed by the same representative. The executed certificate of
authentication on each Series 2021B Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution. When the Series 2021B Bonds have been so
executed and authenticated, they shall be delivered to the original purchaser thereof upon
payment of the purchase price in accordance with the contract of sale heretofore made and
executed, and the purchaser shall not be obligated to see to the application of the purchase price.
Section 9. Electric Fund and Accounts.
9.01. Electric Fund. For the convenient and proper administration of the Electric
System, including the revenues thereof and proceeds of the Bonds, and to make adequate and
specific security to the purchaser and Holders of the Bonds from time to time, the Commission
agrees that there shall continue to be maintained on the books and records of the City so long as
any Bonds are Outstanding a separate bookkeeping account designated the Electric Fund.
Within the Electric Fund there shall be maintained the separate accounts and subaccounts
73
13
EL185-68-707442.v4
described in this section, or in lieu thereof there may be maintained the required balances as
undesignated components of the Electric Fund.
9.02. Operating Account. There shall be credited to the Operating Account all Gross
Revenues as received. There shall be paid from the Operating Account when due all reasonable,
necessary, and current Operating Expenses of the Electric System. All money on hand in the
Operating Account as of the first day of each month in excess of the sum of (i) Operating
Expenses then due and payable and to become due and payable during such calendar month, plus
(ii) the Operating Reserve Requirement, shall constitute Net Revenues and shall be credited to
other accounts in the Electric Fund as provided in Sections 9.03, 9.04 and 9.05.
9.03. Debt Service Account. Upon delivery of the Series 2021B Bonds, the
Commission shall credit to the Debt Service Account, from the proceeds of the Series 2021B
Bonds, the accrued interest, if any, received from the Purchaser of the Series 2021B Bonds. As
of the first day of each month there shall be credited to the Debt Service Account out of the Net
Revenues on hand in the Operating Account an amount equal to not less than 1/6 of the interest
due within the next six months on all Outstanding Bonds and 1/12 of the principal due within the
next 12 months on all Outstanding Bonds; provided that the Commission shall be entitled to
reduce a monthly apportionment by the amount of any surplus previously credited and then on
hand in the Debt Service Account. Money on hand in the Debt Service Account shall be
disbursed only to pay principal of and interest on the Outstanding Bonds when due; provided that
on any date when the amount then on hand in the Debt Service Account plus the amount in the
Reserve Account allocable to a series of Bonds, is sufficient with other money available for the
purpose to pay or discharge all Bonds of that series and the interest accrued thereon in full, it
may be used for that purpose. If any payment of principal of or interest on the Outstanding
Bonds becomes due when money in the Debt Service Account is temporarily insufficient
therefor, an amount equal to such deficiency shall be transferred thereto from the Reserve
Account or the Repair and Replacement Account, in that order.
9.04. Reserve Account. Upon delivery of the Series 2021B Bonds the Commission
shall credit to the Reserve Account from the proceeds of the Series 2021B Bonds, the sum of
$517,656.78. If the balance in the Reserve Account is ever less than the applicable Reserve
Requirement, as of the first day of each month all Net Revenues in the Operating Account
remaining after the required credit to the Debt Service Account shall be credited to the Reserve
Account until the balance therein equals the Reserve Requirement. If the balance in the Reserve
Account has not been restored to the Reserve Requirement from transfers of Net Revenues
within 6 months of the deficiency, the Commission shall transfer to the Reserve Account from
the Repair and Replacement Account, an amount sufficient to restore the balance therein to the
Reserve Requirement.
If, on any date on which principal or interest is due on the Outstanding Bonds, the
balance then on hand in the Debt Service Account is not sufficient to pay such principal and
interest in full, the Commission shall immediately transfer from the Reserve Account to the Debt
Service Account an amount equal to such deficiency.
74
14
EL185-68-707442.v4
If any Additional Bonds are issued, the Commission shall, upon issuance of the
Additional Bonds, increase the balance in the Reserve Fund to the Reserve Requirement,
calculated after giving effect to the issuance of such Additional Bonds.
Money held in the Reserve Account shall be used only to pay maturing principal and
interest when money in the Debt Service Account is insufficient therefor.
If at any time the balance in the Reserve Account exceeds the Reserve Requirement, the
Commission shall transfer such excess to the Debt Service Account. If an entire issue of Bonds
shall have been paid in full in accordance with its terms or defeased within the meaning of
Section 16 of this Resolution, the Reserve Requirement shall be reduced to that level thereof
which would apply had said issue of Bonds, or said obligation of that Bond, as the case may be,
never been issued; provided, however, that any such reduction shall be subject to the condition
that there shall not at the time be a default continuing with respect to the payment of or security
for any Bond or a default continuing under any resolution, indenture or other document pursuant
to which any Bonds were issued.
9.05. Repair and Replacement Account. The Repair and Replacement Account has
heretofore been established as a separate account within the Electric Fund and there shall be
credited to the Repair and Replacement Account from the Operating Account, on the 1st day of
each month, such portion of the Net Revenues, in excess of the current requirements of the Debt
Service Account and the Reserve Account (which portion of the Net Revenues is referred to
herein as “surplus revenues”), as the Commission shall determine to be required for replacement
or renewal of worn out, obsolete or damaged properties and equipment of the Electric System.
Money in the Repair and Replacement Account shall be used only for the purposes above stated
or, if so directed by the Commission, to pay Operating Expenses, to redeem Bonds which are
subject to redemption according to their terms, to pay principal or interest when due thereon as
required in Section 9.03, to restore a deficiency in the Reserve Account, or to pay the cost of
improvements to the Electric System; provided that in the event additional improvements or
additions to the Electric System are financed other than from Bonds payable from the Debt
Service Account, surplus revenues from time to time received may be segregated and paid into
one or more separate and additional accounts for the repayment of such indebtedness and interest
thereon, in advance of payments required to be made into the Repair and Replacement Account.
9.06. Deposit and Investment of Funds. The Commission shall cause all money
pertaining to the Electric Fund to be deposited as received with one or more depository banks.
The balance in such accounts, except such portion thereof as shall be guaranteed by federal
deposit insurance, shall at all times be secured to its full amount by bonds or securities of the
types authorized by applicable laws. Any such money not necessary for immediate use may be
deposited with such depository banks in savings or time deposits. No money shall at any time be
withdrawn from such deposit accounts except for the purposes of the Electric Fund as authorized
in this Resolution, except that money from time to time on hand in the Electric Fund may at any
time, in the discretion of the Commission, be deposited or invested in accounts or securities
which are permitted by applicable laws of the State. Except as otherwise expressly provided
herein, income received from the deposit or investment of money in said accounts shall be
credited to the account from which the deposit was made or the investment was purchased, and
handled and accounted for in the same manner as other money in that account.
75
15
EL185-68-707442.v4
Section 10. Additional Bonds. Additional Bonds shall be issued and made payable
from the Net Revenues of the Electric System only as provided in this section. One or more
series of Additional Bonds may be issued on a parity of lien with the Outstanding Bonds, if
(except as otherwise provided in this Section 10) the Net Revenues of the Electric System for the
Audited Fiscal Year immediately preceding the issuance of such Additional Bonds, adjusted as
hereinafter provided, were not less than 125% of the average annual principal and interest due on
all Outstanding Bonds and on the Additional Bonds to be issued, during the remaining term of
the Outstanding Bonds. No Additional Bonds shall be issued unless each of the following
conditions is satisfied prior to the issuance thereof, such satisfaction to be shown by a certificate
of the President of the Commission and the resolution authorizing the issuance thereof:
(a) The payments required to be made (at the time of the issuance of such
Additional Bonds) into the various accounts provided for in this Resolution have been
made.
(b) The resolution authorizing such Additional Bonds provides for payment to
the Reserve Account upon delivery of such Additional Bonds, from the proceeds thereof
or any other source, of an amount necessary to cause the aggregate balance in the Reserve
Account to equal the Reserve Requirement.
(c) The proceeds of such Additional Bonds shall be used only for the purpose
of making improvements, additions, extensions, renewals or replacements to the Electric
System, or refunding bonds payable from the Debt Service Account.
For purposes of the coverage test set forth above, the Net Revenues for the last Audited Fiscal
Year immediately preceding the issuance of such Additional Bonds, may be adjusted for such
Fiscal Year as follows: (1) the Gross Revenues for such Audited Fiscal Year may be increased to
reflect the Gross Revenues which would have been received had any rate increase placed in
effect after the commencement of the Audited Fiscal Year been in effect for the entire Audited
Fiscal Year; and (2) by including the additional revenues reasonably determined by the
Commission to be likely to result from the acquisition and construction of the facilities to be
financed by such Additional Bonds, provided that the debt service on the proposed Additional
Bonds is funded until the estimated date of completion of such facilities.
The Commission also reserves the right to cause the issuance of Additional Bonds if and
to the extent needed to refund maturing Series 2021B Bonds payable from the Debt Service
Account in case the money on hand therein is insufficient to pay the same at maturity, which
refunding revenue bonds may be on a parity with the Outstanding Bonds, but shall mature
subsequent to all Outstanding Bonds which are not to be refunded by such Additional Bonds.
The Commission also reserves the right to cause the issuance of Additional Bonds
payable on a parity as to both principal and interest with the Outstanding Bonds to refund Series
2021 Bonds if the maximum amount of principal and interest payable on the Outstanding Bonds
and such Additional Bonds in the then current or any future calendar year is not increased by
more than 5%.
76
16
EL185-68-707442.v4
Section 11. Priority of Payments. If the money on hand in the Debt Service Account
shall be insufficient at any time to pay the principal then due and interest then accrued on all
Bonds payable therefrom, said money shall first be applied to the payment pro rata of the
accrued interest on all Bonds, and any balance shall be applied first in payment of maturing
principal; as between Bonds having different maturity dates, the principal of earlier maturing
Bonds shall be paid first; and as between Bonds maturing on the same date, the principal of
Bonds shall be paid pro rata.
Section 12. Covenants. For the protection of the Holders of the Bonds, the City and
the Commission hereby covenant and agree to and with the Holders thereof from time to time as
follows:
(a) They will at all times adequately maintain and efficiently operate the
Electric System. They will from time to time make all needful and proper repairs,
replacements, additions and betterments to the equipment and facilities of the Electric
System so that it may at all times be operated properly and advantageously and so that the
value and efficiency of the facilities shall be at all times fully maintained and its revenues
unencumbered by reason thereof.
(b) In order to ensure the efficient and economical operation of the Electric
System and the proper maintenance thereof, the Commission on behalf of the City will
employ an experienced manager to operate and maintain the Electric System. Such
manager shall be employed on a full-time basis and the compensation shall be paid as an
operating expense of the Electric System.
(c) The rates for all service and the charges for all electricity and services
supplied by the Electric System to the City and its residents and to all consumers shall be
reasonable and just, taking into account the cost and value of the Electric System, the cost
of maintaining and operating the Electric System and the proper and necessary
allowances for depreciation and amounts required for the payment of principal and
interest on the bonds payable from the Net Revenues. Charges to all customers shall be
uniform for all users of the same class. The Commission on behalf of the City will bill its
customers and the City on a monthly basis and, subject to the requirements of State law,
will discontinue service to any customer whose bill remains unpaid 30 days following the
mailing of such bill and service will not be restored until the bill and any penalties have
been paid in full.
(d) They will establish, maintain and collect such charges and rates as will
produce revenues sufficient to pay the reasonable cost of operation and maintenance of
the Electric System and to produce, in each Fiscal Year, Net Revenues at least equal to
110% of the annual interest and principal requirements of the Outstanding Bonds in such
Fiscal Year. Such rates and charges will be increased from time to time whenever
necessary to carry out the obligations of this Resolution.
(e) The City and the Commission will not sell, lease, mortgage, or in any
manner dispose of all or substantially all of properties of the Electric System until all of
the Outstanding Bonds have been paid in full; provided, however, that the City or the
77
17
EL185-68-707442.v4
Commission may sell the Electric System as a whole if, simultaneously with the sale of
the Electric System, there is deposited with the Registrar the amount necessary to retire
all of the Outstanding Bonds payable from the revenues of the Electric System, including
interest to accrue to the date when the Outstanding Bonds are callable, or if the
Outstanding Bonds are then called in accordance with their terms, to the date of
redemption. This covenant shall not be construed to prevent the sale by the City or the
Commission at fair market value of real estate, equipment or other non-revenue-
producing properties which in the judgment of the City or the Commission and a
consulting engineer have become unnecessary, uneconomical or inexpedient to use in
connection with the Electric System, provided suitable facilities are obtained in place
thereof and any cash balance from the transaction is deposited in the Electric Fund.
(f) They will procure and keep in force insurance upon the properties of the
Electric System of a kind and in an amount which would normally be carried by private
companies in a like business, including public liability insurance, with an insurer or
insurers in good standing, and will keep in full force and effect fiduciary bonds on
employees in charge of the Electric System. In the event of any loss, the proceeds from
such insurance (including liability insurance) or bonds shall be used to make good such
loss or to repair or restore the Electric System. Insurance premiums shall be paid as a
cost of operation. The proceeds of insurance, except the proceeds of public liability
insurance, received by the Commission or the City, shall be placed in the Electric Fund.
(g) The Commission, on behalf of the City, shall cause to be kept proper
books, records and accounts adapted to the Electric System, separate from other accounts
of the City and shall cause such books, records and accounts to be audited at the end of
each Fiscal Year by a qualified firm of public accountants. The expense of preparing
such audit shall be paid as a current operating expense of the Electric System. In addition
to whatever other matters are included in the audit, each such audit shall include the
following:
(1) A statement in detail of the income and expenditures of the
Electric System and the component systems thereof for each such Fiscal Year.
(2) A balance sheet as of the end of each such Fiscal Year.
(3) The accountants’ comments, if any, regarding the manner in which
the Commission and the City have carried out the requirements of this Resolution
and their recommendations for any changes or improvements in the operation of
the Electric System.
(4) The disposition of any Bond proceeds during such Fiscal Year, and
the amount of Outstanding Bonds at the end of each Fiscal Year.
The Holders of the Outstanding Bonds shall have the right at all reasonable times to
inspect the Electric System and the books, records, accounts and data relating thereto.
The Commission agrees to furnish copies of such audit to any Holder who holds
78
18
EL185-68-707442.v4
Outstanding Bonds upon request not later than the date required under the Undertaking
(as defined in Section 18 hereof).
(h) They will faithfully and punctually perform all duties with respect to the
Electric System required by the Constitution and laws of the State and this Resolution.
Section 13. Project Account.
13.01. There is hereby established within the Electric Fund a Project Account, into
which the Commission shall deposit the proceeds of the Series 2021B Bonds, plus available City
funds, net of amounts deposited in the Debt Service Account and the Reserve Account, as
provided in Section 9 hereof. Moneys on deposit in the Project Account may be disbursed by the
Commission to pay costs of issuance of the Series 2021B Bonds and costs of the Project.
Pending such disbursement, moneys on deposit in the Project Account may be invested in
Government Obligations maturing or subject to redemption at the option of the holder thereof not
later than the date on which such moneys are expected to be needed.
Section 14. Amendments. The provisions of this Resolution shall constitute a contract
between the City, the Commission and the Holders of the Outstanding Bon ds and after the
issuance of any of the Series 2021B Bonds, no change, variation or alteration of any kind in the
provisions of this Resolution shall be made in any manner, except as herein provided, until such
time as all of the Series 2021B Bonds and interest thereon have been paid in full. However, the
Holders of a majority in principal amount of the Outstanding Bonds shall have the right to
consent to, and approve the adoption of resolutions or other proceedings modifying or amending
any of the terms or provisions contained in this Resolution, except that without the consent of
100% of the Holders of Outstanding Bonds this Resolution shall not be modified or amended in
any manner that may adversely affect the rights of any Holders of the Outstanding Bonds or
reduce the percentage of the number of Holders whose consent is required to effect a further
modification.
Section 15. Electronic Signatures. The electronic signature of the President and
Secretary, on behalf of the Commission, and the Mayor and City Clerk, on behalf of the City, to this
resolution and to any certificate authorized to be executed hereunder shall be as valid as an original
signature of such party and shall be effective to bind the Commission and the City, as applicable,
thereto. For purposes hereof, (i) “electronic signature” means (a) a manually signed original
signature that is then transmitted by electronic means or (b) a signature obtained through DocuSign
or Adobe or a similarly digitally auditable signature gathering process; and (ii) “transmitted by
electronic means” means sent in the form of a facsimile or sent via the internet as a portable
document format (“pdf”) or other replicating image attached to an electronic mail or internet
message.
Section 16. Defeasance. When any Series 2021B Bond has been discharged as
provided in this section, all pledges, covenants and other rights granted by this Resolution to the
Holder of such Series 2021B Bond shall cease, and such Series 2021B Bond shall no longer be
deemed to be Outstanding under this Resolution. The obligations with respect to any Series
2021B Bond which is due on any date may be discharged by depositing with the Registrar on or
before that date a sum sufficient for the payment thereof in full; or, if any Series 2021B Bond
79
19
EL185-68-707442.v4
should not be paid when due, it may nevertheless be discharged by depositing with the Registrar
a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit.
The obligations with respect to any Series 2021B Bond which is subject to redemption according
to its terms may also be discharged by depositing with the Registrar on or before that date an
amount equal to the principal, interest and redemption premium, if any, which will then be due,
provided that notice of such redemption has been duly given or provided for. The obligations
with respect to any Series 2021B Bonds may also be discharged at any time, subject to the
provisions of law now or hereafter authorizing and regulating such action, by depositing
irrevocably in escrow, with the Registrar or any bank qualified by law as an escrow agent for this
purpose, cash or Government Obligations which are authorized by law to be so deposited,
bearing interest payable at such times and at such rates and maturing on such dates as shall be
required to pay all principal, interest and redemption premiums to become due on the Series
2021B Bonds to their maturity or redemption date, provided that if any of such Series 2021B
Bonds are to be redeemed, notice of redemption has been given or provided for, a nd provided
that such defeasance shall not impair the exemption of interest on any Series 2021B Bonds from
federal income taxation.
Section 17. Compliance With Reimbursement Bond Regulations. The provisions of
this section are intended to establish and provide for the Commission’s compliance with United
States Treasury Regulations Section 1.150-2 (the “Reimbursement Regulations”) applicable to
the “reimbursement proceeds” of the Series 2021B Bonds, being those portions thereof which
will be used by the Commission to reimburse itself for any expenditure which the Commission
paid or will have paid prior to the Closing Date (a “Reimbursement Expenditure”).
The Commission hereby certifies and/or covenants as follows:
(a) Not later than 60 days after the date of payment of a Reimbursement
Expenditure, the City or the Commission (or person designated to do so on behalf of the
City or the Commission) has made or will have made a written declaration of the
Commission’s official intent (a “Declaration”) which effectively (i) states the
Commission’s reasonable expectation to reimburse itself for the payment of the
Reimbursement Expenditure out of the proceeds of a subsequent borrowi ng; (ii) gives a
general and functional description of the property, project or program to which the
Declaration relates and for which the Reimbursement Expenditure is paid, or identifies a
specific fund or account of the Commission and the general functional purpose thereof
from which the Reimbursement Expenditure was to be paid (collectively the “Project”);
and (iii) states the maximum principal amount of debt expected to be issued by the
Commission for the purpose of financing the Project; provided, however, that no such
Declaration shall necessarily have been made with respect to: (i) “preliminary
expenditures” for the Project, defined in the Reimbursement Regulations to include
engineering or architectural, surveying and soil testing expenses and similar prefatory
costs, which in the aggregate do not exceed 20% of the “issue price” of the Series 2021B
Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the
lesser of $100,000 or 5% of the proceeds of the Series 2021B Bonds.
80
20
EL185-68-707442.v4
(b) Each Reimbursement Expenditure is a capital expenditure or a cost of
issuance of the Series 2021B Bonds or any of the other types of expenditures described in
Section 1.150-2(d)(3) of the Reimbursement Regulations.
(c) The “reimbursement allocation” described in the Reimbursement
Regulations for each Reimbursement Expenditure shall and will be made forthwith
following (but not prior to) the issuance of the Series 2021B Bonds and in all events
within the period ending on the date which is the later of three years after payment of the
Reimbursement Expenditure or one year after the date on which the Project to which the
Reimbursement Expenditure relates is first placed in service.
(d) Each such reimbursement allocation will be made in a writing that
evidences the Commission’s use of Bond proceeds to reimburse the Reimbursement
Expenditure and, if made within 30 days after the Series 2021B Bonds are issued, shall
be treated as made on the day the Series 2021B Bonds are issued.
Provided, however, that the Commission may take action contrary to any of the foregoing
covenants in this section upon receipt of an opinion of its Bond Counsel for the Series 2021B
Bonds stating in effect that such action will not impair the tax-exempt status of the Series 2021B
Bonds.
Section 18. Continuing Disclosure. With respect to the continuing disclosure
requirements under Rule 15c2-12(b)(5) (the “Rule”) of the Securities and Exchange
Commission, on the date of actual issuance and delivery of the Series 2021B Bonds, the
Commission and the City will execute and deliver a Continuing Disclosure Certificate (the
“Undertaking”) whereunder the Commission and the City will covenant to provide certain
information specified in the Undertaking. The proposed form of the Undertaking which has been
submitted to the Commission for its consideration is hereby approved, and the President and
Secretary of the Commission and the Mayor and Clerk of the City, or any other officer of the
Commission or the City authorized to act in their place (the “Officers”) are hereby authorized to
execute and deliver that Undertaking in the proposed form or in such final form thereof
reflecting such modifications thereof as are consistent with the Rule, requested by the Purchasers
of the Series 2021B Bonds and acceptable to the Officers who shall execute the Undertaking
(which consent shall be conclusively evidenced by their execution and delivery thereof). The
Undertaking, as so executed and delivered by the Officers, shall be as much a part of this
Resolution as if set forth in full herein and shall be for the benefit of the owners from time to
time of the Series 2021B Bonds.
Section 19. Records and Certificates. The officers of the Commission and 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 Series 2021B Bonds, certified copies of all
proceedings and records of the Commission and the City relating to the Series 2021B Bonds and
to the financial condition and affairs of the Commission and the City, and such other affidavits,
certificates and information as are required to show the facts relating to the legality and
marketability of the Series 2021B 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,
81
21
EL185-68-707442.v4
certificates and affidavits, including any heretofore furnished, shall be deemed representations of
the Commission and the City as to the facts recited therein.
Section 20. Negative Covenant as to Use of Bond Proceeds and Project. The
Commission and the City hereby covenant not to use the proceeds of the Series 2021B Bonds or
to use the Project, or to cause or permit them to be used, or to enter into any deferred payment
arrangements for the cost of the Project, in such a manner as to cause the Series 2021B Bonds to
be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code.
Section 21. Tax-Exempt Status of the Series 2021B Bonds; Rebate. The Commission
and 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 Series
2021B Bonds, including without limitation (a) requirements relating to temporary periods for
investments, (b) limitations on amounts invested at a yield greater than the yield on the Series
2021B Bonds, and (c) the rebate of excess investment earnings to the United States.
Section 22. No Designation of Qualified Tax-Exempt Obligations. The Series 2021B
Bonds have not been designated as “qualified tax-exempt obligations” within the meaning of
Section 265(b)(3) of the Code.
Section 23. Official Statement. The Official Statement relating to the Series 2021B
Bonds, prepared and distributed by Baker Tilly is hereby approved and the officers of the
Commission are authorized in connection with the delivery of the Series 2021B Bonds, to sign
such certificates as may be necessary with respect to the completeness and accuracy of the
Official Statement.
Section 24. Effective Date. This Resolution, having been authorized and delegated to
the Commission by the City Council by resolution adopted March 15, 2021, shall be effective
immediately.
The motion for the adoption of the foregoing resolution was duly seconded by member Nadeau
and, after full discussion thereof and upon a vote being taken thereon, the following voted in
favor thereof:
Chair John Dietz
Commissioner Paul Bell
Commissioner Al Nadeau
Commissioner Mary Stewart
Commissioner Matt Westgaard
and the following voted against the same: None
Whereupon said resolution was declared duly passed and adopted.
82
83
A-1
EL185-68-707442.v4
EXHIBIT A
84
A-2
EL185-68-707442.v4
85
EL185-68-707442.v4 B-1
EXHIBIT B
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
ELECTRIC REVENUE BOND, SERIES 2021B
No._________ $_______________
Interest Rate Maturity Date Date of Original Issue CUSIP
August 1, ____ May 13, 2021
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
THE CITY OF ELK RIVER, Sherburne County, Minnesota (the “City”), acknowledges
itself to be indebted and, for value received, hereby promises to pay to the registered owner
specified above, or registered assigns, the principal amount specified above, on the maturity date
specified above, with interest thereon from the date of original issue specified above or from the
most recent interest payment date to which interest has been paid or duly provided for, at the
annual rate specified above. Interest hereon is payable on February 1 and August 1 in each year,
commencing February 1, 2022, calculated on the basis of a 360-day year of twelve 30-day
months, to the person in whose name this Series 2021B Bond is registered at the close of
business on the 15th day (whether or not a business day) of the immediately preceding month.
The principal of and premium, if any, on this Series 2021B Bond are payable upon presentation
and surrender hereof at the principal office of U.S. Bank National Association, in St. Paul,
Minnesota (the “Bond Registrar”), acting as paying agent, or any successor paying agent duly
appointed by the City. Interest on this Series 2021B Bond will be paid on each Interest Payment
Date by check or draft mailed to the person in whose name this Series 2021B Bond is registered
(the “Holder” or “Bondholder”) 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 15th day of the
calendar month next 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 Holder hereof as of
the Regular Record Date, and shall be payable to the person who is the Holder hereof 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 to Bondholders not less than 10 days prior to the Special Record Date. The principal of
and premium, if any, and interest on this Series 2021B Bond are payable in lawful money of the
United States of America. So long as this Series 2021B Bond is registered in the name of the
Depository or its Nominee as provided in the Resolution hereinafter described, and as those
terms are defined therein, payment of principal of, premium, if any, and interest on this Series
86
EL185-68-707442.v4 B-2
2021B Bond and notice with respect thereto shall be made as provided in the Letter of
Representations, as defined in the Resolution, and surrender of this Series 2021B Bond shall not
be required for payment of the redemption price upon a partial redemption of this Series 2021B
Bond. Until termination of the book-entry only system pursuant to the Resolution, Series 2021B
Bonds may only be registered in the name of the Depository or its Nominee.
This Series 2021B Bond is one of an issue (the “Series 2021B Bonds”) in the aggregate
principal amount of $11,810,000, issued pursuant to a resolution adopted by the Elk River
Municipal Utilities Commission (the “Commission”) on April 13, 2021 (the “Resolution”), to
provide funds to finance the remaining cost of the acquisition of the Commissioner’s
membership interest in the Minnesota Municipal Power Association in connection with the
City’s electric system (the “Electric System”) and is issued pursuant to and in full conformity
with the provisions of the Constitution and laws of the State of Minnesota thereunto enabling,
including Minnesota Statutes, Chapter 475 and Sections 412.321 through 412.391. This Series
2021B Bond and the interest thereon are payable solely from Net Revenues, as defined in the
Resolution, of the Electric System which have been pledged to the payment thereof, and are
issued on a parity of lien with the pledge of Net Revenues to the $9,755,000 original principal
amount of Electric Revenue Bonds, Series 2016A, dated July 14, 2016, the $1,370,000 original
principal amount of Electric Revenue Refunding Bonds, Series 2016B, dated July 14, 2016, and
$10,000,000 original principal amount of Electric Revenue Bonds, Series 2018A, dated
September 26, 2018 (collectively, the “Prior Bonds”). The Series 2021B Bonds do not constitute
a debt of the City within the meaning of any constitutional or statutory limitation of
indebtedness, and the full faith and credit and taxing power of the City are not pledged to the
payment of the principal of or interest on the Series 2021B Bonds. Additional Bonds may be
issued, which are payable on a parity of lien from the Net Revenues of the Electric System, upon
the terms and conditions provided in the Resolution.
The City may elect on February 1, 2031, and on any date thereafter to prepay Series 2021B
Bonds due on or after February 1, 2032. Redemption may be in whole or in part and if in part, at
the option of the City and in such order as the City will determine. If less than all Series 2021B
Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company
(“DTC”) of the particular amount of such maturity to be prepaid. DTC will determine by lot the
amount of each participant’s interest in such maturity to be redeemed and each participant will then
select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will
be at a price of par plus accrued interest.
The Series 2021B Bonds are issuable solely in fully registered form in Authorized
Denominations (as defined in the Resolution) and are exchangeable for fully registered Series
2021B 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.
This Series 2021B Bond is transferable by the Holder in person or the Holder’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
87
EL185-68-707442.v4 B-3
Resolution and to reasonable regulations of the City contained in any agreement with the Bond
Registrar. Thereupon the City and the Commission shall execute and the Bond Registrar shall
authenticate and deliver, in exchange for this Series 2021B Bond, one or more new fully
registered Series 2021B 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 Series 2021B Bond, of the same maturity
and bearing interest at the same rate.
The Series 2021B Bonds maturing in 2039, 2047 and 2051 shall hereinafter be referred to
collectively as the “Term Bonds.” The principal amounts of the Term Bonds subject to mandatory
sinking fund redemption on any date may be reduced through earlier optional redemptions, with any
partial redemptions of the Term Bonds credited against future mandatory sinking fund redemptions
of such Term Bonds in such order as the City shall determine. The Term Bonds are subject to
mandatory sinking fund redemption and shall be redeemed in part by lot at par plus accrued interest
on the sinking fund installment dates and in the principal amounts as follows:
Sinking Fund Installation Date Principal Amount
August 1, 2039 Term Bonds
2038 $420,000
2039 (maturity) 425,000
Sinking Fund Installation Date Principal Amount
August 1, 2047 Term Bonds
2045 $480,000
2046 490,000
2047 (maturity) 505,000
Sinking Fund Installation Date Principal Amount
August 1, 2051 Term Bonds
2048 $515,000
2049 525,000
2050 540,000
2051(maturity) 550,000
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 Series 2021B
Bond and any legal or unusual costs regarding transfers and lost Series 2021B Bonds.
The City, the Commission and the Bond Registrar may treat the person in whose name
this Series 2021B Bond is registered as the owner hereof for the purpose of receiving payment as
88
EL185-68-707442.v4 B-4
herein provided (except as otherwise provided herein with respect to the Record Date) and for all
other purposes, whether or not this Series 2021B Bond shall be overdue, and neither the City, the
Commission nor the Bond Registrar shall be affected by notice to the contrary.
This Series 2021B 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.
The Series 2021B Bonds have not been designated as “qualified tax-exempt obligations”
pursuant to the provisions of Section 265(b) of the Internal Revenue Code of 1986, as amended.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City,
through the Commission, has fixed and established and will collect reasonable rates and charges
for the services and facilities provided by the Electric System; that the City, through the
Commission, will maintain on its books and records an Electric Fund, and will credit to the
Operating Account of the Electric Fund the Gross Revenues of the Electric System as received
and pay all Operating Expenses therefrom, and will credit to the Debt Service Account, once
each month, out of Net Revenues then on hand, an amount equal to 1/12 of all principal payable
on the Bonds (as defined in the Resolution) during the next 12 months and 1/6 of the interest
payable on the Bonds (as defined in the Resolution) in the next 6 months, and will credit to the
Reserve Account an amount necessary to maintain therein a balance equal to the Reserve
Requirement (as defined in the Resolution); that the obligation to credit such amounts to such
accounts is cumulative, and if in any month the money in the Electric Fund is insufficient to
credit the required amount into any account, the deficiency shall be made up in the following
month or months after payment to all other accounts having a claim on such revenues has been
paid in full; that the City, through the Commission, will impose and collect such rates and
charges as necessary to provide in each Fiscal Year Net Revenues at least equal to 110% of the
annual principal and interest payable on all bonds payable from the Debt Service Account in
such Fiscal Year; that all provisions for the security of the Series 2021B Bonds set forth in the
Resolution will be punctually and faithfully performed as therein stipulated; that all acts,
conditions and things required by the Constitution and laws of the State of Minnesota, and the
ordinances and resolutions of the City and the Commission to be done, to exist, to happen, and to
be performed in order to make this Series 2021B Bond a valid and binding special obligation of
the City according to its terms have been done, do exist, have happened and have been
performed as so required; and that the issuance of this Series 2021B Bond does not cause the
indebtedness of the City to exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Elk River, Sherburne County, State of Minnesota,
by the Commission, has caused this Series 2021B Bond to be executed by the signatures of the
President and Secretary of the Commission and the Mayor and Clerk of the City and has caused
this Series 2021B Bond to be dated as of the Date of Original Issue set forth above.
Date of Registration: Registrable by: U.S. BANK NATIONAL ASSOCIATION
Payable at: U.S. BANK NATIONAL ASSOCIATION
89
EL185-68-707442.v4 B-5
May 13, 2021
BOND REGISTRAR’S
CERTIFICATE OF
AUTHENTICATION
This Series 2021B Bond is one of the
Series 2021B Bonds described in the
Resolution mentioned within.
U.S. Bank National Association, in St.
Paul, Minnesota
Bond Registrar
By:
Authorized Signature
CITY OF ELK RIVER,
SHERBURNE COUNTY, MINNESOTA
/s/ Facsimile
Mayor
/s/ Facsimile
Clerk
ELK RIVER MUNICIPAL UTILITIES COMMISSION,
SHERBURNE COUNTY, MINNESOTA
/s/ Facsimile
President
/s/ Facsimile
Secretary
90
EL185-68-707442.v4 B-6
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Series
2021B Bond, shall be construed as though they were written out in full according to applicable
laws or regulations:
TEN COM --as tenants in common UTMA ................... as Custodian for ................
(Cust) (Minor)
under Uniform Transfers to Minors Act .............
(State)
TEN ENT --as tenants by the entireties
JT TEN --as joint tenants with right of
survivorship and not as tenants in common
Additional abbreviations may also be used.
___________________________________
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
________________________________________________________________ the within Series
2021B Bond and does hereby irrevocably constitute and appoint _________________ attorney
to transfer the Series 2021B Bond on the books kept for the registration thereof, with full power
of substitution in the premises.
Dated:_____________________ ___________________________
Notice: The assignor’s signature to this assignment must correspond with
the name as it appears upon the face of the within Series 2021B
Bond in every particular, without alteration or any change
whatever.
Signature Guaranteed:
___________________________
Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm
having a membership in one of the major stock exchanges or any other “Eligible Guarantor
Institution” as defined in 17 CFR 240.17 Ad-15(a)(2).
91
EL185-68-707442.v4 B-7
The Bond Registrar will not effect transfer of this Series 2021B Bond unless the
information concerning the transferee requested below is provided.
Name and Address: ________________________________________
________________________________________
________________________________________
(Include information for all joint owners if the Series 2021B Bond is held by joint account.)
PREPAYMENT SCHEDULE
This Series 2021B Bond has been prepaid in part on the date(s) and in the amount(s) as follows:
DATE AMOUNT
AUTHORIZED
SIGNATURE
OF HOLDER
92