5.3. SR 02-06-2006
City of Elk River
REQUEST FOR COUNCIL ACTION
Agenda Section Meeting Date
Administration Februa 6,2006
Item Description
Resolution Concurring in the Action of the Board of
Commissioners of the Public Utilities Commission of the City of
Elk River, Minnesota, in Providing for the Issuance and Sale of
$3,595,000 Electric Revenue Bonds, Series 2006A
Item Number
5.3.
Prepared by
Lori Johnson, City Administrator
Reviewed by
Introduction
Award sale of Electric Revenue Bonds of $3,595,000 for Elk River Municipal Utilities electric
improvement projects.
Discussion
Bids for this bond sale will be received February 6. Representatives of Ehlers and Associates will be at
the Council meeting to present the results of the sale. The Elk River Municipal Utilities Commission will
meet at noon on February 6 to approve the PUC resolution awarding the sale of these bonds.
Financial Impact
These bonds will be repaid with revenues from the electric utility.
Attachments
· Resolution 06-_ Concurring in the Action of the Board of Commissioners of the Public
Utilities Commission of the City of Elk River, Minnesota, in Providing for the Issuance and Sale
of $3,595,000 Electric Revenue Bonds, Series 2006A
· Utilities Commission Resolution Providing for the Issuance and Sale of $3,595,000 Electric
Revenue Bonds, Series 2006A and Pledging Net Revenues for the Security Thereof
Action Requested
It is requested that the Mayor and City Council adopt resolution 06-_ Concurring in the Action of the
Board of Commissioners of the Public Utilities Commission of the City of Elk River, Minnesota, in
Providing for the Issuance and Sale of $3,595,000 Electric Revenue Bonds, Series 2006A
Council Action
Motion by _
Second by _
Vote
Follow Up
S: \ Council\Lori\2006\BondSale Award.doc
RESOLUTION 06-
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE
CITY OF ELK RIVER, MINNESOTA
HELD: February 6,2006
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of Elk River, Minnesota, was duly called and held at the City Hall in the City of Elk River,
Minnesota on February 6,2006, at 6:30 o'clock P.M.
The following members were present:
and the following were absent:
Member
introduced the following resolution and moved its adoption:
RESOLUTION CONCURRING IN THE ACTION OF THE BOARD OF COMMISSIONERS
OF THE PUBLIC UTILITIES COMMISSION OF THE CITY OF ELK RIVER, MINNESOTA,
IN PROVIDING FOR THE ISSUANCE AND SALE OF $3,595,000 ELECTRIC REVENUE
BONDS, SERIES 2006A
A. WHEREAS, the Public Utilities Commission of the City of Elk River, Minnesota
(the "Commission") has determined to undertake capital improvements to the municipal electric
light and power plant and distribution system of the City (the "Electric System") consisting of
improvements and extensions to the Electric System (the "Project"); and will finance the Project
by the issuance ofthe City's $3,595,000 Electric Revenue Bonds, Series 2006A (the "Series
2006A Bonds"); and
B. WHEREAS, the Commission has presented to the City Council a copy of a
resolution (the "Bond Resolution") entitled "Resolution Providing for the Issuance and Sale of
$3,595,000 Electric Revenue Bonds, Series 2006A and Pledging Net Revenues for the Security
Thereof," to be considered for adoption by the Commission.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River,
Minnesota, the City Council hereby concurs in the Bond Resolution of the Commission
providing for the issuance and sale of the Series 2006A Bonds, hereby joins in and adopts the
Bond Resolution and makes the determinations and findings set forth in the Bond Resolution
with the same force and effect as if the Bond Resolution had been adopted by the City Council.
The motion for the adoption of the foregoing resolution was seconded by member
and upon a vote being taken thereon, the following voted in favor
thereof:
and the following voted against the same:
Whereupon the resolution was declared duly passed and adopted.
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
I, the undersigned, being the duly qualified and acting Clerk of the City of Elk River,
Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that the same is a full, true and
complete transcript of the minutes of a meeting of the City Council, duly called and held on the
date therein indicated, relating to $3,595,000 Electric Revenue Bonds, Series 2006A.
WITNESS my hand on February 6, 2006.
Clerk
EXTRACT OF MINUTES OF A MEETING OF THE
PUBLIC UTILITIES COMMISSION OF THE
CITY OF ELK RIVER, MINNESOTA
HELD: February 6, 2006
Pursuant to due call, a special meeting of the Public Utilities Commission ofthe City of
Elk River, Sherburne County, Minnesota, was duly held at the City Hall on February 6, 2006, at
12:00 P.M, for the purpose, in part, of providing for the issuance and sale of$3,595,000 Electric
Revenue Bonds, Series 2006A.
The following members were present:
and the following were absent:
Member
introduced the following resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $3,595,000 ELECTRIC
REVENUE BONDS, SERIES 2006A AND PLEDGING NET REVENUES FOR THE
SECURITY THEREOF
BE IT RESOLVED by the Public Utilities Commission of the City of Elk River,
Minnesota (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 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).
"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.
1861915vl
"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 2006A Bonds, the Prior Bonds or 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 Public Utilities Commission of the City, and any successor to
its obligations under this Resolution.
"Commission Resolution" means a resolution or other legislative enactment duly adopted
by the Commission.
"Construction Account" means the Construction Account established in the Electric Fund
pursuant to Section 13 hereof.
"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.
1861915vl
2
"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.
"Net Revenues" means the Gross Revenues ofthe Electric System for any specified
period, less the Operating Expenses ofthe 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 ofthe 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 15.
"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 $3,595,000 original principal amount of Electric System
Revenue Bonds, Series 2004A, dated August 1,2004, $865,000 in principal amount of which are
currently outstanding.
"Prior Resolution" means the resolution duly adopted by the Commission on August 3,
2004.
"Project" means improvements and extensions and other capital improvements to the
Electric System.
"Public Utilities Commission" means the governing body ofthe Commission.
"Purchaser" means
"Registrar" means U.S. Bank National Association, in St. Paul, Minnesota, or its
successor appointed by the Commission pursuant to Section 6.01.
1861915vl
3
"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 reference, an amount equal to the least of
(i) 10% of the original principal amount of the Bonds and the Prior Bonds Outstanding, or (ii) the
maximum amount of principal and interest payable during the then current Fiscal Year or any
future Fiscal Year on all Bonds and Prior Bonds Outstanding as of the date of reference, or (iii)
125% of the average annual principal and interest payable on all Bonds and Prior Bonds as of the
date of reference.
"Resolution" means this Resolution, including any amendment hereof or supplement
hereto adopted in accordance with Section 14.
"Series 2006A 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. Public Utilities Commission. The City has established the Commission and
placed the Electric System under the jurisdiction ofthe 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 ofthe 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 twelve month period next succeeding the issuance of the Series 2006A 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
of the Series 2006A Bonds, adjusted for such Fiscal Year as permitted by the Prior Resolution
are as follows:
1861915vl
4
Audited Fiscal Year Ended
OPERATlNG REVENUES
OPERATlNG EXPENSES
$
OPERATlNG PROFIT
(Exclusive of Depreciation)
$
ADD: Non-Operating Revenue
NET REVENUES
$
The Net Revenues of the Electric System for the Audited Fiscal Year immediately
preceding the issuance of the Series 2006A Bonds, adjusted as set forth above, were at least one
hundred twenty five percent (125%) of the average annual principal and interest coming due
during the remaining term of the Prior Bonds plus the Series 2006A Bonds computed to
February 1, 2015 (the final maturity date of the Prior Bonds). The average annual principal and
interest requirements, based on the schedule of maturities herein set forth and a net interest cost
on the Series 2006A Bonds of % per annum for the Prior Bonds and the Series 2006A
Bonds is $
Other than the Prior 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 2006A
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 2006A Bonds and the Prior Bonds when due.
2.05. Authorization of Series 2006A Bonds. The Commission is authorized by law to
borrow money necessary to finance the Proj ect 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
System Revenue Bonds, Series 2006A, in the principal amount of$3,595,000. All costs of the
Proj ect in excess of the proceeds of the Series 2006A 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 2006A Bonds. The Commission has retained Ehlers and
Associates, Inc., in Roseville, Minnesota (Ehlers), as its independent financial advisor for the
sale of the Bonds and was therefore authorized to sell the Bonds by private negotiation in
accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9) and proposals to purchase
the Bonds have been solicited by Ehlers.
2.07. Receipt and Acceptance of Proposals. Proposals have been received by the
Commission Secretary, or designee, at the offices of Ehlers on the date hereof pursuant to the
Official Terms of Bond Sale established for the Bonds. The proposal of
1861915vl
5
(the Purchaser), to purchase the Bonds in accordance with the Official
Terms of Bond Sale, at the rates of interest hereinafter set forth, and to pay therefor the sum of
$ , plus interest accrued to settlement, is hereby found, determined and declared
to be the most favorable proposal received and is hereby accepted and the Bonds are hereby
awarded to the Purchaser. The Secretary is directed to retain the deposit of the Purchaser and to
return to the unsuccessful bidders any good faith checks or drafts.
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 2006A Bonds having been done,
existing, having happened and having been performed, it is now necessary to establish the form
and terms of the Series 2006A Bonds, to provide security therefor and to issue the Series 2006A
Bonds forthwith.
Section 3.
Security for Series 2006A Bonds.
3.01. Pledge of Net Revenues. From and after their issuance, the principal of and
interest on the Series 2006A 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 Debt Service Account,
the Reserve Account and the Net Revenues ofthe Electric System.
3.02. Reserve Account Requirement. Upon issuance of the Series 2006A Bonds, the
Commission shall deposit, from available funds on hand, in the Reserve Account $ , so
that the balance in the Reserve Account shall be not less than the then applicable Reserve
Requirement.
3.03. Not General Obligations. The Series 2006A 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 2006A Bonds.
4.01. Series 2006A Bond Form. The Series 2006A Bonds shall be prepared in
substantially the following form:
1861915vl
6
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
ELECTRIC SYSTEM REVENUE BOND, SERIES 2006A
No.
$
Interest Rate
Maturity Date
Date of Original Issue
CUSIP
August 1, _
March 2, 2006
REGISTERED OWNER:
CEDE & CO.
PRINCIP AL AMOUNT:
THE CITY OF ELK RNER, 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, all subject to the provisions referred to herein with respect to the
redemption of the principal of this Series 2006A Bond before maturity. Interest hereon is payable
on February 1 and August 1 in each year, commencing August 1,2006, to the person in whose
name this Series 2006A Bond is registered at the close of business on the fifteenth day (whether
or not a business day) of the immediately preceding month. The principal of and premium, if
any, on this Series 2006A 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 2006A Bond will be paid on each Interest Payment Date by check or draft
mailed to the person in whose name this Series 2006A 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 fifteenth 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 ten days prior to the Special Record Date. The principal of and
premium, if any, and interest on this Series 2006A Bond are payable in lawful money of the
United States of America. So long as this Series 2006A 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
2006A Bond and notice with respect thereto shall be made as provided in the Letter of
1861915vl
7
Representations, as defined in the Resolution, and surrender of this Series 2006A Bond shall not
be required for payment of the redemption price upon a partial redemption of this Series 2006A
Bond. Until termination of the book-entry only system pursuant to the Resolution, Series 2006A
Bonds may only be registered in the name ofthe Depository or its Nominee.
This Series 2006A Bond is one of an issue (the "Series 2006A Bonds") in the aggregate
principal amount of$3,595,000, issued pursuant to a resolution adopted by the Public Utilities
Commission of the City of Elk River, Minnesota (the "Commission") on February 6,2006 (the
"Resolution"), to provide funds to pay part of the costs of certain capital improvements to 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
2006A 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 oflien with the pledge of Net Revenues to the $3,595,000 original principal
amount of Electric System Revenue Bonds, Series 2004A, dated August 1,2004 (the "Prior
Bonds"). The Series 2006A 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
2006A 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.
Series 2006A Bonds maturing on August 1,2014, and thereafter, are subject to
redemption and prepayment at the option of the City on February 1, 2014, and on any date
thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the
Series 2006A Bonds subj ect to prepayment. If redemption is in part, the maturities and the
principal amounts within each maturity to be redeemed shall be determined by the City; and if
only part of the Series 2006A Bonds having a common maturity date are called for prepayment,
the specific Series 2006A Bonds to be prepaid shall be chosen by lot by the Bond Registrar.
Series 2006A 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.
Mailed notice of redemption shall be given to the paying agent and to each affected Holder of the
Series 2006A Bonds at least thirty days prior to the date fixed for redemption.
To effect a partial redemption of Series 2006A Bonds having a common maturity date,
the Bond Registrar shall assign to each Series 2006A Bond having a common maturity date a
distinctive number for each $5,000 of the principal amount of such Series 2006A 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 Series 2006A Bonds, as many numbers as, at
$5,000 for each number, shall equal the principal amount of such Series 2006A Bonds to be
redeemed. The Series 2006A Bonds to be redeemed shall be the Series 2006A Bonds to which
were assigned numbers so selected; provided, however, that only so much of the principal
amount of such Series 2006A 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 Series 2006A 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 and Bond
Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in
1861915vl
8
writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and
deliver to the Holder of the Series 2006A Bond, without service charge, a new Series 2006A
Bond or Series 2006A Bonds having the same stated maturity and interest rate and of any
Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of the Series 2006A
Bond so surrendered.
The Series 2006A Bonds are issuable solely in fully registered form in Authorized
Denominations (as defined in the Resolution) and are exchangeable for fully registered Series
2006A 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 2006A 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
Resolution and to reasonable regulations ofthe 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 2006A Bond, one or more new fully
registered Series 2006A 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 2006A Bond, of the same maturity
and bearing interest at the same rate.
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 2006A
Bond and any legal or unusual costs regarding transfers and lost Series 2006A Bonds.
The City, the Commission and the Bond Registrar may treat the person in whose name
this Series 2006A Bond is registered as the owner hereof for the purpose of receiving payment as
herein provided (except as otherwise provided herein with respect to the Record Date) and for all
other purposes, whether or not this Series 2006A Bond shall be overdue, and neither the City, the
Commission nor the Bond Registrar shall be affected by notice to the contrary.
This Series 2006A 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 2006A Bonds have 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
1861915vl
9
Operating Account of the Electric Fund the Gross Revenues ofthe 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 one-twelfth of all principal
payable on the Series 2006A Bonds and the Prior Bonds during the next twelve months and one-
sixth of all interest payable on the Series 2006A Bonds and the Prior Bonds in the next six
months, and will credit to the Reserve Account an amount necessary to maintain therein a
balance equal to the least of (i) ten percent of the original principal amount of the Series 2006A
Bonds and the Prior Bonds, or (ii) the maximum amount of principal and interest to come due in
any future calendar year on all Series 2006A Bonds and the Prior Bonds, or (iii) one hundred
twenty- five percent of the average annual debt service on all Series 2006A Bonds and the Prior
Bonds; 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 one hundred ten percent 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 2006A 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 2006A Bond a valid and binding special obligation ofthe 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 2006A 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 2006A 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 2006A Bond to be dated as of the Date of Original Issue set forth above.
1861915vl
10
Date of Registration:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Series 2006A Bond is one of the
Series 2006A Bonds described in the
Resolution mentioned within.
U.S. Bank National Association, in St.
Paul, Minnesota
Bond Registrar
By:
Authorized Signature
1861915vl
Registrable by: U.S. BANK NATIONAL ASSOCIATION
Payable at: U.S. BANK NATIONAL ASSOCIATION
CITY OF ELK RIVER,
SHERBURNE COUNTY, MINNESOTA
/s/ Facsimile
Mayor
/s/ Facsimile
Clerk
PUBLIC UTILITIES COMMISSION OF THE
CITY OF ELK RIVER,
SHERBURNE COUNTY, MINNESOTA
/s/ Facsimile
President
/s/ Facsimile
Secretary
11
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Series
2006A 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
(Minor)
(Cust)
under the
Uniform Transfers to Minors Act
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Series
2006A Bond and does hereby irrevocably constitute and appoint attorney
to transfer the Series 2006A 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 2006A
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).
The Bond Registrar will not effect transfer of this Series 2006A Bond unless the
information concerning the transferee requested below is provided.
Name and Address:
(Include information for all joint owners if the Series 2006A Bond is held by joint account.)
1861915vl
12
PREPAYMENT SCHEDULE
This Series 2006A Bond has been prepaid in part on the date(s) and in the amount(s) as follows:
DATE
1861915vl
AMOUNT
13
AUTHORIZED
SIGNATURE
OF HOLDER
Section 5.
Series 2006A Bond Terms Execution and Delivery.
5.01. Maturities, Interest Rates, Denominations, Payment and Dating of Bonds. The
City shall forthwith issue and deliver the Series 2006A 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 of March 2, 2006, 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:
Year
Amount
Interest
Rate
Year
Amount
Interest
Rate
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
As may be requested by the Purchaser, one or more term Series 2006A 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 2006A Bond(s).
The Series 2006A Bonds shall be issuable only in fully registered form. The interest
thereon and, upon surrender of each Series 2006A Bond, the principal amount thereof, shall be
payable by check or draft issued by the Registrar.
5.02. Interest Payment Dates. The Series 2006A Bonds shall bear interest payable
semiannually on February 1 and August 1 of each year, commencing August 1,2006, calculated
on the basis of a 360-day year of twelve 30-day months to the person in whose name the Series
2006A Bond is registered in the Bond Register at the close of business on the fifteenth day of the
immediately preceding month, whether or not such day is a business day.
5.03. Optional Redemption. Series 2006A Bonds maturing on August 1,2014, and
thereafter, shall be subject to redemption and prepayment at the option of the City on February 1,
2014, and on any date thereafter at a price of par plus accrued interest. Redemption may be in
whole or in part of the Series 2006A Bonds subject to prepayment. If redemption is in part, the
maturities and the principal amounts within each maturity to be redeemed shall be determined by
the City; and if only part of the Series 2006A Bonds having a common maturity date are called
for prepayment, the specific Series 2006A Bonds to be prepaid shall be chosen by lot by the
Bond Registrar. Series 2006A 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. Mailed notice of redemption shall be given to the paying agent and to each
1861915vl
14
affected registered holder of the Series 2006A Bonds at least thirty days prior to the date fixed
for redemption.
To effect a partial redemption of Series 2006A Bonds having a common maturity date,
the Bond Registrar prior to giving notice of redemption shall assign to each Series 2006A Bond
having a common maturity date a distinctive number for each $5,000 ofthe principal amount of
such Series 2006A 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 Series
2006A Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount
of such Series 2006A Bonds to be redeemed. The Series 2006A Bonds to be redeemed shall be
the Series 2006A Bonds to which were assigned numbers so selected; provided, however, that
only so much of the principal amount of each such Series 2006A 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 Series 2006A Bond is to be redeemed only in part, it shall be surrendered to the
Bond Registrar (with, if the City, the Commission or Bond Registrar so requires, a written
instrument of transfer in form satisfactory to the City, the Commission and the Bond Registrar
duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the
City and the Commission shall execute (if necessary) and the Bond Registrar shall authenticate
and deliver to the Holder of the Series 2006A Bond, without service charge, a new Series 2006A
Bond or Series 2006A Bonds having the same stated maturity and interest rate and of any
Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of the Series 2006A
Bond so surrendered.
5.04. Application of Proceeds. Immediately upon delivery ofthe Series 2006A Bonds
to the Purchaser, the amount received as accrued interest on the Series 2006A Bonds shall be
credited to the Debt Service Account and the remaining proceeds shall be deposited in the
Construction Account and used to pay costs of issuance of the Series 2006A Bonds and costs of
the Project, as provided in Section 13.
Section 6.
Registration; Appointment of Registrar; Book-Entrv System.
6.01. Registration. The City, by the Commission, shall appoint, and shall maintain, a
bond registrar, transfer agent and paying agent (the Registrar). The effect of registration and the
rights and duties of the City and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its principal corporate trust office a
Bond Register in which the Registrar shall provide for the registration of ownership of
Series 2006A Bonds and the registration of transfers and exchanges of Bonds entitled to
be registered, transferred or exchanged.
(b) Transfer of Series 2006A Bonds. Upon surrender to the Registrar for
transfer of any Series 2006A 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 shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Series 2006A Bonds of a like
1861915vl
15
aggregate principal amount and maturity, as requested by the transferor. The Registrar
shall not be obligated to transfer or exchange any Series 2006A Bond which has been
selected for redemption.
( c) Exchange of Series 2006A Bonds. Whenever any Series 2006A Bond is
surrendered by the registered owner for exchange, the Registrar shall authenticate and
deliver one or more new Series 2006A Bonds of alike aggregate principal amount and
maturity, as requested by the registered owner or the owner's attorney duly authorized in
writing.
(d) Cancellation. All Series 2006A Bonds surrendered upon any transfer or
exchange shall be promptly canceled by the Registrar and thereafter disposed of as
directed by the City.
(e) Improper or Unauthorized Transfer. When any Series 2006A Bond is
presented to the Registrar for transfer, the Registrar may refuse to transfer the same until
it is satisfied that the endorsement on such Series 2006A Bond or separate instrument of
transfer is legally authorized. The Registrar shall incur no liability for its 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 any Series 2006A Bond is at any time registered in the Bond Register as
the absolute owner of such Series 2006A Bond, whether such Series 2006A Bond shall
be overdue or not, for the purpose of receiving payment of, or on account of, the principal
of and interest on such Series 2006A Bond and for all other purposes, and all such
payments so made to any such registered owner or upon the owner's order shall be valid
and effectual to satisfy and discharge the liability of the City upon such Series 2006A
Bond to the extent of the sum or sums so paid.
(g) Taxes Fees and Charges. For every transfer or exchange of Series 2006A
Bonds (except for an exchange upon a partial redemption of a Series 2006A Bond), the
Registrar may impose upon the owner thereof a charge sufficient to reimburse the
Registrar for any tax, fee or other governmental charge required to be paid with respect to
such transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroved Series 2006A Bonds. In case any
Series 2006A Bond shall become mutilated or be lost, stolen or destroyed, the City shall
execute and the Registrar shall authenticate and deliver a new Series 2006A Bond of the
same series, of like amount, number, maturity date and tenor, in exchange and
substitution for and upon cancellation of any such mutilated Series 2006A Bond or in lieu
of and in substitution for any such Series 2006A Bond lost, stolen or destroyed, upon the
payment of the reasonable expenses and charges of the Registrar in connection therewith,
and, in the case of a Series 2006A Bond lost, stolen or destroyed, upon the payment of
the reasonable expenses and charges of the Registrar in connection therewith, and, in the
case of a Series 2006A Bond lost, stolen or destroyed, upon filing with the Registrar of
evidence satisfactory to it that such Series 2006A Bond was lost, stolen or destroyed, and
of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or
1861915vl
16
indemnity in form, substance and amount satisfactory to it, in which the City, the
Commission, and the Registrar shall be named as obligees. All Series 2006A Bonds so
surrendered to the Registrar shall be canceled by it and evidence of such cancellation
shall be given to the Commission. If the mutilated, lost, stolen or destroyed Series 2006A
Bond has already matured or been called for redemption in accordance with its terms, it
shall not be necessary to issue a new Series 2006A Bond prior to payment.
6.02. Appointment of Initial Registrar. U.S. Bank National Association, in St. Paul,
Minnesota, is hereby appointed as the initial 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, such corporation shall be 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 any Registrar upon
thirty days' notice and upon the appointment of a successor Registrar, in which event the
predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar
and shall 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. The Series 2006A Bonds shall be initially issued in the form of a separate single
typewritten or printed fully registered Series 2006A Bond for each of the maturities set forth in
this Resolution. Upon initial issuance, the ownership of each such Series 2006A Bond shall 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 2006A Bonds shall be
registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee
ofDTC.
6.04. With respect to Series 2006A Bonds registered in the registration books kept by
the Registrar in the name of Cede & Co., as nominee ofDTC, the City, the Registrar and the
Paying Agent shall have no responsibility or obligation to any broker dealers, banks and other
financial institutions from time to time for which DTC holds Series 2006A Bonds as securities
depository (the "Participants") or to any other person on behalf of which a Participant holds an
interest in the Series 2006A Bonds, including but not limited to any responsibility Or obligation
with respect to (i) the accuracy of the records ofDTC, Cede & Co. or any Participant with
respect to any ownership interest in the Series 2006A Bonds, (ii) the delivery to any Participant
or any other person other than a registered owner of Series 2006A Bonds, as shown by the
registration books kept by the Registrar, of any notice with respect to the Series 2006A Bonds,
including any notice of redemption, or (iii) the payment to any Participant or any other person,
other than a registered owner of Series 2006A Bonds, or any amount with respect to principal of,
premium, if any, or interest on the Series 2006A Bonds. The City, the Registrar and the Paying
Agent may treat and consider the person in whose name each Series 2006A Bond is registered in
the registration books kept by the Registrar as the holder and absolute owner of such Series
2006A Bond for the purpose of payment of principal, premium and interest with respect to such
Series 2006A Bond, for the purpose of registering transfers with respect to such Series 2006A
Bonds, and for all other purposes. The Paying Agent shall pay all principal of, premium, if any,
1861915vl
17
and interest on the Series 2006A 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 shall 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 2006A Bonds to the extent ofthe sum or
sums so paid. No person other than a registered owner of Series 2006A Bonds, as shown in the
registration books kept by the Registrar, shall receive a certificated Series 2006A 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 & Ca,
and the words "Cede & Co.," shall refer to such new nominee ofDTC; and upon receipt of such
a notice, the City shall promptly deliver a copy of the same to the Registrar and Paying Agent, if
the Paying Agent is other than the Registrar.
6.05. 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 interest in
the Series 2006A Bonds that they be able to obtain Series 2006A Bond certificates, the City shall
notify DTC, whereupon DTC shall notify the Participants, of the availability through DTC of
Series 2006A Bond certificates. In such event the City shall issue, transfer and exchange Series
2006A 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 2006A Bonds at any time by giving notice to the City and discharging
its responsibilities with respect thereto under applicable law. In such event, ifno successor
securities depository is appointed, the City shall issue and the Registrar shall authenticate Series
2006A Bond certificates in accordance with this resolution and the provisions hereof shall apply
to the transfer, exchange and method of payment thereof.
6.06. PaYments to Cede & Co. Notwithstanding any other provision of this resolution to
the contrary, so long as any Series 2006A Bond is registered in the name of Cede & Co., as
nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such
Series 2006A Bond and all notices with respect to such Series 2006A Bond shall be made and
given, respectively in the manner provided in the representation letter executed by the City and
on file with DTC.
Section 7. Notice of Redemption. At least thirty days before the date set for optional
or mandatory redemption of any Series 2006A Bond, the City shall cause notice of such
redemption to be mailed to the registered Holder of each Series 2006A 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 2006A 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 2006A Bonds to be redeemed and the place at
which the Series 2006A 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 2006A
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 2006A Bonds or portions
thereof shall cease to bear interest.
1861915vl
18
In addition to the notice prescribed by the preceding paragraph, the City shall also give
notice of the redemption of any Series 2006A Bond or Series 2006A Bonds or portions thereof at
least thirty days before the redemption date by certified mail or telecopy to the original purchaser
of the Series 2006A Bonds and to all registered securities depositories then in the business of
holding substantial amounts of obligations of the character of the Series 2006A Bonds (such
depositories now being The Depository Trust Company, of Garden City, New York; Pacific
Securities Depository Trust Company, of San Francisco, California; and Philadelphia Depository
Trust Company, of Philadelphia, Pennsylvania) and one or more national information services
that disseminate information regarding municipal bond redemptions; provided that any defect in
or any failure to give any notice of redemption prescribed by this paragraph shall not affect the
validity of the proceedings for the redemption of any Series 2006A Bond or portion thereof.
Series 2006A 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 2006A Bond redeemed in part shall
receive, upon surrender of such Series 2006A Bond to the Registrar, one or more new Series
2006A Bonds of the same series in authorized denominations equal in principal amount to the
unredeemed portion of the Series 2006A Bond so surrendered.
Section 8. Execution, Authentication and Delivery of Series 2006A Bonds. The
Series 2006A 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 2006A Bonds shall cease to be such
officer before the delivery of any Series 2006A 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 2006A 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 2006A Bond has been executed by the manual signature of an
authorized representative of the Registrar. Certificates of authentication on different Series
2006A Bonds need not be signed by the same representative. The executed certificate of
authentication on each Series 2006A Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution. When the Series 2006A 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
described in this section, or in lieu thereof there may be maintained the required balances as
undesignated components of the Electric Fund.
1861915vl
19
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, 9.05 and 9.06.
9.03. Debt Service Account. Upon delivery of the Series 2006A Bonds, the
Commission shall credit to the Debt Service Account, from the proceeds of the Series 2006A
Bonds, the accrued interest received from the Purchaser of the Series 2006A Bonds. As of the
first day of each month there shall be credited to the Debt Service Account out ofthe Net
Revenues on hand in the Operating Account an amount equal to not less than one-sixth of the
interest due within the next six months on all Outstanding Bonds and one-twelfth of the principal
due within the next twelve 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 payor 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 2006A Bonds the Commission
shall credit to the Reserve Account from available funds on hand, the sum of $ . 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 six 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.
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.
1861915vl
20
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.
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 first day of
each month, such portion of the Net Revenues, in excess ofthe current requirements ofthe 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 ofwom 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.
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 and
only if the Net Revenues ofthe Electric System for the Audited Fiscal Year immediately
preceding the issuance of such Additional Bonds, adjusted as hereinafter provided, were not less
than one hundred twenty-five percent 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:
1861915vl
21
(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 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 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
five percent.
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:
1861915vl
22
(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 ofthe 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 thirty 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
one hundred ten percent of the annual interest and principal requirements of the Series
2006A Bonds and the Prior Bonds in such Fiscal Year. Such rates and charges will be
increased from time to time whenever necessary to carry out the obligations ofthis
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
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.
1861915vl
23
(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
Outstanding Bonds upon request within ninety days after the close of each Fiscal Year.
(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.
Construction Account.
13.01. There is hereby established within the Electric Fund a Construction Account, into
which the Commission shall deposit the proceeds of the Series 2006A Bonds, net of amounts
deposited in the Revenue Bond Account and the Reserve Account, as provided in Section 5.04
hereof. Moneys on deposit in the Construction Account may be disbursed by the Commission to
pay costs of issuance of the Series 2006A Bonds and costs of the Project. Pending such
disbursement, moneys on deposit in the Construction Account may be invested in Government
Obligations maturing or subject to redemption at the option of the holder thereof not later than
1861915vl
24
the date on which such moneys are expected to be needed. Investment earnings on moneys in
the Construction Account shall be credited to the Construction Account and used to pay costs of
the Project. Any remaining balance in the Construction Account upon completion of the Project
may be used to pay additional capital costs of the Electric System, may be transferred to the
Repair and Replacement Account, or may be used for any other lawful purpose.
Section 14. Amendments. The provisions of this Resolution shall constitute a contract
between the City, the Commission and the Holders of the Outstanding Bonds and after the
issuance of any of the Series 2006A 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 2006A Bonds and interest thereon have been paid in full. However, the
Holders of a maj ority 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
one hundred percent 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. Defeasance. When any Bond has been discharged as provided in this
section, all pledges, covenants and other rights granted by this Resolution to the Holder of such
Bond shall cease, and such Bond shall no longer be deemed to be Outstanding under this
Resolution. The obligations with respect to any 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 Bond 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 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 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
Bonds to their maturity or redemption date, provided that if any of such Bonds are to be
redeemed, notice of redemption has been given or provided for, and provided that such
defeasance shall not impair the exemption of interest on any Bonds from federal income
taxation.
Section 16. 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 2006A 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").
1861915vl
25
The Commission hereby certifies and/or covenants as follows:
(a) Not later than sixty days after the date of payment of a Reimbursement
Expenditure, the Commission (or person designated to do so on behalf of 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 borrowing; (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" ofthe Series 2006A Bonds, and (ii) a de minimis amount of
Reimbursement Expenditures not in excess of the lesser of$lOO,OOO or five percent of
the proceeds of the Series 2006A Bonds.
(b) Each Reimbursement Expenditure is a capital expenditure or a cost of
issuance of the Series 2006A Bonds or any of the other types of expenditures described in
Section l.l50-2(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 2006A 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 2006A Bonds are issued, shall
be treated as made on the day the Series 2006A 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 2006A
Bonds stating in effect that such action will not impair the tax-exempt status of the Series 2006A
Bonds.
Section 17. Continuing Disclosure. The Electric System ofthe Commission is the
only "obligated person" in respect of the Series 2006A Bonds within the meaning of the Rule for
purposes of identifying the entities in respect of which continuing disclosure must be made. The
Commission hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"),
promulgated by the Securities and Exchange Commission (the "SEC") pursuant to the Securities
1861915vl
26
Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described to:
(a) Provide or cause to be provided to each nationally recognized municipal
securities information repository ("NRMSIR") and to the appropriate state information
depository ("SID"), if any, for the State of Minnesota, in each case as designated by the
SEC in accordance with the Rule, certain annual financial information and operating data
in accordance with the Undertaking. The SEC reserves the right to modify from time to
time the terms of the Undertaking as provided therein.
(b) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR
or to the Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of
the occurrence of certain material events with respect to the Series 2006A Bonds in
accordance with the Undertaking.
(c) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR
or to the MSRB and (ii) the SID, notice of a failure by the Commission to provide the
annual financial information with respect to the Commission described in the
Undertaking.
(d) The Commission agrees that its covenants pursuant to the Rule set forth in
this section and in the Undertaking is intended to be for the benefit of the Holders of the
Series 2006A Bonds and shall be enforceable on behalf of such Holders; provided that
the right to enforce the provisions of these covenants shall be limited to a right to obtain
specific enforcement of the Commission's obligations under the covenants.
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 and directed to execute on behalf of the Commission and the City the
Undertaking in substantially the form presented to the governing bodies of the Commission and
the City subject to such modifications thereof or additions thereto as are (i) consistent with the
requirements under the Rule, (ii) required by the Purchaser of the Series 2006A Bonds, and (iii)
acceptable to the Officers.
Section 18. 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 2006A Bonds, certified copies of all
proceedings and records of the Commission and the City relating to the Series 2006A 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 2006A 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 Commission and the City as to the facts recited therein.
Section 19. Negative Covenant as to Use of Bond Proceeds and Proiect. The
Commission and the City hereby covenant not to use the proceeds of the Series 2006A Bonds or
1861915vl
27
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 2006A Bonds to
be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code.
Section 20. Tax-Exempt Status of the Series 2006A 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
2006A 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
2006A Bonds, and (c) the rebate of excess investment earnings to the United States, if the Series
2006A Bonds (together with other obligations reasonably expected to be issued and outstanding
at one time in this calendar year) exceed the small-issuer exception amount of $5,000,000. For
purposes of qualifying for the exception to the federal arbitrage rebate requirements for
governmental units issuing $5,000,000 or less of bonds, the City hereby finds, determines and
declares that
(a) the Series 2006A Bonds are issued by a governmental unit with general
taxing powers;
(b) no Bond is a private activity bond;
(c) ninety-five percent or more of the net proceeds of the Series 2006A Bonds
are to be used for local governmental activities of the City (or of a governmental unit the
jurisdiction of which is entirely within the jurisdiction of the City); and
(d) the aggregate face amount of all tax -exempt bonds (other than private
activity bonds) issued by the City (and all subordinate entities thereof, and all entities
treated as one issuer with the City) during the calendar year in which the Series 2006A
Bonds are issued and outstanding at one time is not reasonably expected to exceed
$5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code.
Section 21. Designation ofOualified Tax-Exempt Obligations. In order to qualify the
Series 2006A 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 Series 2006A Bonds are issued after August 7, 1986;
(b) the Series 2006A Bonds are not "private activity bonds" as defined in
Section 141 of the Code;
( c) the City hereby designates the Series 2006A 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 treated as one issuer with the
1861915vl
28
City, and all subordinate entities whose obligations are treated as issued by the City)
during this calendar year 2006 will not exceed $10,000,000; and
( e) not more than $10,000,000 of obligations issued by the City during this
calendar year 2006 have been designated for purposes of Section 265(b )(3) ofthe 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 section.
Section 22. Official Statement. The Official Statement relating to the Series 2006A
Bonds, prepared and distributed by Ehlers is hereby approved and the officers of the
Commission are authorized in connection with the delivery of the Series 2006A Bonds, to sign
such certificates as may be necessary with respect to the completeness and accuracy of the
Official Statement.
Section 23. Payment ofIssuance Expenses. The Commission authorizes the Purchaser
to forward the amount of Series 2006A Bond proceeds allocable to the payment of issuance
expenses to U.S. Trust Company N.A., Greenwich, Connecticut on the closing date for further
distribution as directed by the Commission's financial advisor, Ehlers
Section 24. Effective Date. This Resolution, having been concurred in by the City
Council by resolution adopted on February 6, 2006, shall be effective immediately.
1861915vl
29
STATE OF MINNESOTA
COUNTY OF SHERBURNE
PUBLIC UTILITIES COMMISSION
OF THE CITY OF ELK RNER, MINNESOTA
I, the undersigned, being the duly qualified and acting Secretary of the Public Utilities
Commission of the City of Elk River, Minnesota, DO HEREBY CERTIFY that I have carefully
compared the attached and foregoing extract of minutes of a meeting of the Board of
Commissioners, held on the date therein indicated, with the original thereof on file and of record
in my office and that the same is a full, true and complete transcript insofar as the same relates to
the $3,595,000 Electric Revenue Bonds, Series 2006A of the City of Elk River, Minnesota.
WITNESS my hand on February 6, 2006.
Secretary
Public Utilities Commission
of the City of Elk River, Minnesota
1861915vl
30
(:'/) an [j! cY1J- a/ t.c> !Cj(;J
II-trn 5: 3,
City of Elk River, MN
Results of Bond Sale
February 6, 2006
$3,595,000 Electric Revenue Bonds, Series 2006A
Low Bidder
Northland Securities, Inc.
Minneapolis, Minnesota
3.9472%
True Interest Cost
Number of Bids
9
Rating
A2 Moody's Investors Services
(One step below the city's A1
general obligation rating)
3.9472% - 4.0887%
Range of Bids
Total Debt Service
Principal Amount
Discount Allowance
Costs of Issuance
True Interest Cost
Coupon Rates
Interest Cost
Proiected 11/9/05
$3,595,000
$62,912.50
$27,900
4.4732%
3.25% - 4.60%
$1,336,345
Results of Sale
Variance
$3,595,000
$57,707.85
$28,086.25
3.9472%
3.15% - 4.00%
$1,231,153.95
$0
-$5,204.65
+186.25
-0.526%
-$105,191.05
Closing Date
Council Action
March 2, 2006
Award the bid to Northland Securities, Inc. and adopt the
Resolution Concurring In The Action Of The Board Of
Commissioners Of The Public Utilities Commission Of The City Of
Elk River, Minnesota, In Providing For The Issuance And Sale Of
$3,595,000 Electric Revenue Bonds, Series 2006A.
Attachments
. Bid Tabulation
,
BID TABULATION
rfI cu/f1 eYJJ- d/u; leI);
/feIYI ,5". 3.
$3,595,000 Electric Revenue Bonds, Series 2006A
CITY OF ELK RIVER, MINNESOTA
SALE: February 6, 2006
AWARD: NORTHLAND SECURITIES, INC.
RATING: AMBAC Insured (Moody's Investors Service, Inc. "Aaa")*
UNDERLYING RATING: Moody's Investors Service, Inc. 1A2"
BBI: 4.43%
PRICE
NET TRUE
INTEREST INTEREST
COST RATE
NAME OF BIDDER
MATURITY
(August 1)
$3,537,292.15 $1,288,861.80 3.9472%
NORTHLAND SECURITIES, INC.
Minneapolis, Minnesota
BERNARDI SECURITIES, INC.
Chicago, IL
NORTH AMERICAN CAPITAL MARKETS
Minneapolis, Minnesota
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
SUNTRUST CAPITAL MARKETS, INC.
Atlanta, Georgia
RBC DAIN RAUSCHER, INC.
St. Petersburg, Florida
CREWS & ASSOCIATES
Little Rock, Arkansas
FIRST TRUST PORTFOLIOS L.P.
Lisle, Illinois
STEPHENS INC.
Little Rock, Arkansas
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
*AMBAC insurance purchased by Northland Securities, Inc.
RATE REOFFERING
YIELD
3.150%
3.250%
3.300%
3.350%
3.500%
3.500%
3.500%
3.550%
3.600%
3.650%
3.750%
3.800%
3.850%
4.000%
4.000%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.800%
3.875%
4.000%
8
EHLERS
& ASSOCIATES INC
3.150%
3.250%
3.300%
3.350%
3.400%
3.450%
3.500%
3.550%
3.600%
3.650%
3.750%
3.800%
3.850%
3.900%
3.950%
$3,556,857.05 $1,291,116.51 3.9496%
3060 Centre Pointe Drive, Roseville, MN 55113
651.697.8500 fax 651.697.8555 www.ehlers-inc.com
Offices in Roseville, MN Brookfield, WI and Lisle, IL
$3,595,000 Electric Revenue Bonds, Series 2006A
City of Elk River, Minnesota
,
Page 2
NAME OF BIDDER
PRICE
NET TRUE
INTEREST INTEREST
COST RATE
MATURITY
(August 1)
RATE REOFFERING
YIELD
$3,557,891.15 $1,293,032.52 3.9531 %
PIPER JAFFRA Y & CO.
Leawood, Missouri
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
STIFEL, NICOLAUS & CO., INC.
Minneapolis, Minnesota
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
3.500%
3.500%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.800%
3.850%
3.900%
4.000%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.850%
3.850%
3.850%
3.850%
3.850%
3.875%
3.875%
4.000%
4.000%
$3,568,772.85 $1,303,422.60 3.9776%
$3,595,000 Electric Revenue Bonds, Series 2006A
City of Elk River, Minnesota
Page 3
NAME OF BIDDER
MATURITY
(August 1)
MORGAN KEEGAN & CO., INC.
Memphis, Tennessee
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
CRONIN & COMPANY, INC.
Minneapolis, Minnesota
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
RATE REOFFERING
YIELD
3.500%
3.500%
3.750%
3.750%
3.750%
3.750%
3.875%
3.875%
3.875%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.800%
3.850%
4.000%
4.000%
4.000%
PRICE
NET TRUE
INTEREST INTEREST
COST RATE
$3,581,062.45 $1,308,488.45 3.9821%
$3,561,577.55 $1,304,507.43 3.9848%
$3,595,000 Electric Revenue Bonds, Series 2006A
City of Elk River, Minnesota
Page 4
NAME OF BIDDER
MATURITY
(August 1)
RATE REOFFERING
YIELD
PRICE
NET TRUE
INTEREST INTEREST
COST RATE
$3,547,364.00 $1,315,508.98 4.0301%
HARRIS INVESTMENT MANAGEMENT
Chicago, Illinois
FTN Financial Capital Markets
Isaak Bond Investments Inc.
Bankers' Bank
Axelrod Associates, Inc.
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
WELLS FARGO BROKERAGE SERVICES,
LLC
Minneapolis, Minnesota
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.750%
3.800%
3.850%
3.850%
3.900%
3.950%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
4.000%
$3,583,496.00 $1,327,221.22 4.0440%
$3,595,000 Electric Revenue Bonds, Series 2006A
City of Elk River, Minnesota
Page 5
NAME OF BIDDER
PRICE
NET TRUE
INTEREST INTEREST
COST RATE
GRIFFIN, KUBIK, STEPHENS & THOMPSON,
INC.
Chicago, Illinois
MATURITY RATE REOFFERING
(August 1) YIELD
2007 3.875%
2008 3.875%
2009 3.875%
2010 3.875%
2011 3.875%
2012 3.875%
2013 3.875%
2014 3.875%
2015 3.875%
2016 3.900%
2017 3.900%
2018 4.000%
2019 4.000%
2020 4.100%
2021 4.100%
$3,562,432.65 $1,338,372.23 4.0887%