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3.2. SR 05-23-1994 rei ---\) ( )j ~li{ AGENDA ITEM 3.2. MEMORANDUM TO: MAYOR & CITY COUNCIL LORI JOHNSON, FINANCE DIRECTOR ",,,;;; FROM: DATE: MAY 19, 1994 SUBJECT: RESOLUTIONS PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $3,495,000 G.O. IMPROVEMENT BONDS, SERIES 1994A; THE CITY'S $1,280,000 G.O. SEWER REVENUE BONDS, SERIES 1994B; AND THE CITY'S $1,080,000 G.O. STORM SEWER REVENUE BONDS, SERIES 1994C e Bids for the bonds mentioned above will be accepted until Monday, May 23, 1994, at the offices of Springsted. David Drown of Springsted will be in attendance at Monday's meeting to present the bid tabulation and recommend the award of the sale of the bonds. A resolution awarding the sale of each of the bonds is attached for your review. As you may be aware, Mayor Duitsman and I had a teleconference with Moody's Investor Service regarding the rating of these three bond issues. The teleconference lasted approximately two hours, and I believe it was very successful. Attached you will find a copy of Moody's Daily Rating Recap which is a brief listing of the items considered by Moody's. Moody's rated the bond issues Baal. It was their feeling that the City has continued to make progress in building its reserves and its General Fund balance. However, due to the growth in the City, we do and will continue to have a large amount of special assessment debt. This, plus the overlapping debt (debt issued by the County and School) will continue to be negative factors affecting the City's bond rating. This overlapping debt becomes a debt burden on all residents of the City and it is that total debt burden that Moody's looks at when evaluating our rating. RECOMMENDATION The Council is asked to approve the three resolutions which will issue and award the sale of each of the bond issues. e P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 e e e EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Elk River, Minnesota, was duly held in the Elk River City Hall on May 23, 1994, commencing at 7:00 P.M., C.T., in part for the purpose of considering the offers which had been received for the purchase of the City's $3,495,000 General Obligation Improvement Bonds, Series 1994A. The following Councilmembers were present: and the following were absent: *** *** *** There was then presented a tabulation of the offers which had been received in the manner specified in the Terms of Proposal for the Bonds. The offers were as follows: 264002.1 then introduced the ~ following Resolution and moved its adoption: RESOLUTION NO. RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $3,495,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1994A ~ BE IT RESOLVED by the City Council (the "Council") of the City of Elk River, Minnesota (the "City"), as follows: 1. Recitals. It is hereby determined: (a) That the assessable public improvement projects (the "Improvements") described in the Council's May 2, 1994, resolution relating to these Bonds have been duly ordered by the City and have been constructed by the City or will be constructed under contracts which the City has or will let therefor, all pursuant to and in accordance with Minnesota statutes, Chapter 429. (b) That is it necessary and expedient to the sound financial management of the affairs of the City that the City issue its bonds pursuant to Minnesota Statutes, Chapters 429 and 475, to provide financing for the Improvements. (c) The Improvements and all their components have been ordered on or prior to the date hereof, after a hearing thereon (except where not required by law) for which mailed and published notice was duly given as required by law describing the Improvements and all their components by general nature, estimated cost, and area to be assessed. 2. AcceDtance of Offer. The offer of (the "PurChaser") to purchase the City'S $3,495,000 General Obligation Improvement Bonds, Series 1994A (the "Bonds"), at the rates of interest and upon the other terms set forth in this Resolution, and to pay therefor the sum of $ plus interest accrued to settlement, is hereby accepted. 3. Maturities. Title: Original Issue Date: Denominations: The Bonds shall be titled "General Obligation ~ 264002.1 2 e Improvement Bonds, Series 1994A," shall be dated June 1, 1994, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on February 1 in the years and amounts as follows: Years Amounts Years Amounts 1996 $530,000 2004 $180,000 1997 270,000 2005 195,000 1998 220,000 2006 190,000 1999 225,000 2007 185,000 2000 235,000 2008 185,000 2001 245,000 2009 180,000 2002 140,000 2010 180,000 2003 160,000 2011 175,000 e 4. PurDose. The Bonds shall provide funds to finance the Improvements. The total cost of the Improvements, which shall include all costs enumerated in Minnesota Statutes, section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Improvements shall proceed with due diligence to completion. 5. Interest. The Bonds shall bear interest payable semiannually on February 1 and August 1 of each year (each, an "Interest PaYment Date"), commencing February 1, 1995, calculated on the basis of a 360-day year consisting of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years, as follows: Maturity Interest Maturity Interest Year Rate Year Rate 1996 % 2004 % 1997 2005 1998 2006 1999 2007 2000 2008 2001 2009 2002 2010 2003 2011 6. RedemDtion. All Bonds maturing after February 1, 2001, shall be subject to redemption and prepaYment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepaYment. If redemption is in part, the City shall determine the amount of e 264002. 1 3 e Bonds having a common maturity date are called for prepaYment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. e To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar, prior to giving notice of redemption, shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or by the registered owner's attorney, duly authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 7. Bond Reaistrar. , in , , is appointed to act as bond regi~trar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. The principal of and interest on the Bonds shall be paid to the registered owners (or record owners) of the Bonds in the manner set forth in the form of Bond and paragraph 13 of this Resolution. e 264002.1 4 e e e 8. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: 264002.1 5 . e e UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF SHERBURNE CITY OF ELK RIVER R- $ GENERAL OBLIGATION IMPROVEMENT BOND, SERIES 1994A INTEREST RATE MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Elk River, Sherburne County, Minnesota (the "city"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above on the maturity date specified above, unless duly called for earlier redemption, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 1995, at the rate per annum specified above (calculated on the basis of a 360-day year consisting of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , . (the "Bond Registrar"), acting as paying agent, or at the principal office of any successor paying agent duly appointed by the city. Interest on this Bond will be paid on each Intere$t Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Registered Owner") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Registered Owner hereof as of the Regular Record Date, and shall be payable to the person who is the Registered Owner hereof at the close of business on a date (the 264002.1 6 . e . "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Registered owners not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the united States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to have happened and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed in regular and due form, time and manner as required by law, and that this Bond, together with all other indebtedness of the City outstanding on the date of original issue hereof and the date of its actual issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the city of Elk River, Sherburne County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its City Administrator; has caused the corporate seal of the City to be intentionally omitted herefrom, as permitted by law; and has caused this Bond to be executed manually by the Bond Registrar, acting as the City'S duly appointed authenticating agent for the Bonds. 264002.1 7 e e e Date of Registration: Registrable by: Payable at: BOND REGISTRAR'S CERTIFICATE OF CITY OF ELK RIVER, SHERBURNE COUNTY, MINNESOTA AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Isl Facsimile Mayor Isl Facsimile City Administrator Bond Registrar By Isl Manual Authorized Signature ON REVERSE OF BOND I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion executed by the above-named attorneys, except as to the dating thereof, which opinion has been handed to me for filing in my office prior to the time of delivery of the Bonds. (facsimile sianaturel City Clerk City of Elk River, Minnesota 264002.1 8 e e e Redemotion. All Bonds of this issue maturing after February 1, 2001, are subject to redemption and prepayment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepayment, the Bonds of that maturity to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. Selection of Bonds for Redemption: Partial Redemotion. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing), and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: puroose: General Obliaation. This Bond is one of an issue in the total principal amount of $3,495,000, all of like date of original issue and tenor, except as to registration number, maturity, interest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State of 264002.1 9 e e e Minnesota and pursuant to a resolution adopted by the City Council on May 23, 1994 (the "Resolution"), for the purpose of providing money to finance certain costs of assessable public improvements within the city. This Bond constitutes a general obligation of the City, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. Denominations: Exchange: Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Registered Owner in person or by the Registered Owner's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the City contained in any agreement with the Bond Registrar. Thereupon the City shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees UDon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reqistered Owners. The City and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 264002.1 10 e e e Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the certificate of Authentication hereon shall have been executed by the Bond Registrar. Oualified Tax-ExemDt Obliaations. The Bonds have been designated by the City as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of and not as tenants in common UTMA - as custodian for survivorship (Cust) under the (Minor) Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 264002.1 11 e e e ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. as Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company, by a brokerage firm having a membership in one of the major stock exchanges or by any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15 (a) (2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 264002.1 1~ e 9. Execution: Temporarv Bonds. The Bonds shall be executed on behalf of the City by the signatures of its Mayor and City Administrator and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed facsimile; and provided further that both of such signatures may be printed facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in substantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and cancelled. e 10. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless a certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is June 1, 1994. The certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The City Clerk shall obtain a copy of the proposed approving legal opinion of bond counsel, Briggs and Morgan, Professional Association, st. Paul, Minnesota, which shall be complete except as to dating thereof, shall cause such opinion to be filed in the offices of the City, and shall cause said opinion to be printed on each of the Bonds, together with a certificate to be signed by the facsimile signature of the City Clerk in substantially the form set forth in the foregoing form of the Bonds. e 264002.1 13 e 11. Reaistration: Transfer: Exchanae. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 10) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. e At the option of the registered owner thereof, Bonds may be exchanged for Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the registered owner making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this Resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the city. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid obligations of the City evidencing the same debt, and entitled to the same benefits under this Resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing. The Bond Registrar may require paYment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. e 264002.1 14 e Transfers shall also be subject to reasonable regula- tions of the City contained in any agreement with the. Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and paYment dates. 12. Riahts Uoon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carryall the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. e 13. Interest Payment: Record Date. Interest on any Bond shall be paid on each Interest PaYment Date by check or draft mailed to the person in whose name the Bond is registered on the registration books of the city maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month preceding such Interest PaYment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the registered owner thereof as of the Regular Record Date, and shall be payable to the person who is the registered owner thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for paYment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the registered owners not less than ten (10) days prior to the Special Record Date. 14. Treatment of Reaistered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving paYment of principal of and premium, if any, and interest (subject to the paYment provisions in paragraph 13 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 15. Delivery: Aoolication of Proceeds. The Bonds when so prepared and executed shall be delivered by the City Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 16. Fund and Accounts. There is hereby created a special fund of the City designated the "$3,495,000 General Obligation Improvement Bonds, Series 1994A Fund" (the "FUnd") to be held and administered by the City as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall continue to be maintained in the manner herein specified until all of the . 264002. 1 15 . Bonds herein authorized and all other bonds payable from said Fund and the interest thereon have been fully paid. There shall be maintained in the Fund two (2) separate accounts, to be designated the "Capital Account" and "Debt Service Account", respectively. e (i) CaDital Account. To the Capital Account there shall be credited the proceeds of the sale of the Bonds, less such amounts thereof as shall be deposited into the Debt Service Account pursuant to paragraph 16(ii) below, plus any special assessments levied with respect to the Improvements and collected prior to completion of the Improvements and payment of the costs thereof. From the Capital Account there shall be paid all costs and expenses of making the Improvements, including the cost of any construction contracts heretofore let, the costs of issuing the Bonds and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, section 475.65; and the moneys in said account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bonds may also be used to the extent necessary to pay interest on the Bonds due prior to the anticipated date of commencement of the collection of taxes or special assessments levied or covenanted to be levied; and provided further that if upon completion of the Improvements there shall remain any unexpended balance in the Capital Account, the balance (other than any special assessments) may be transferred by the Council to the fund of any other improvement instituted pursuant to Minnesota statutes, Chapter 429; and provided further that any special assessments credited to the Capital Account shall only be applied towards payment of the costs of the Improvements upon adoption of a resolution by the City Council determining that the application of the special assessments for such purpose will not cause the City to no longer be in compliance with Minnesota Statutes, Section 475.61, Subdivision 1. (ii) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (a) all collections of special assessments herein covenanted to be levied with respect to the Improvements and either initially credited to the Capital Account and not already spent as permitted above and required to pay any principal and interest due on the Bonds or collected subsequent to the completion of the Improvements and payment of the costs thereof; (b) $ of the proceeds of the Bonds, to be used to pay the interest first coming due thereon; (c) any collections of all taxes herein or hereafter levied for the payment of the Bonds and interest thereon; (d) all funds remaining in the Capital Account after completion of the Improvements and payment of the costs thereof, not so transferred to the account of another improvement; (e) all investment . 264002.1 16 . earnings on funds held in the Debt Service Account; and (f) any and all other moneys which are properly available and are appropriated by the Council to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest and any premiums for redemption of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. e No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the "issue price" of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Capital Account or Debt Service Account in excess of amounts which under then-applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds or any Additional Bonds to be "federally guaranteed" within the meaning of section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). 17. Assessments. It is hereby determined that no less than twenty percent (20%) of the cost to the City of the Improvements financed hereunder within the meaning of Minnesota Statutes, Section 475.58, Subdivision 1(3), shall be paid by special assessments heretofore levied or to be levied hereafter against every assessable lot, piece and parcel of land benefitted by any of the Improvements. The City hereby covenants and agrees that it will let all construction contracts not heretofore let within one (1) year after ordering each Improvements financed hereunder unless the resolution ordering said Improvement specifies a different time limit for the letting of construction contracts. The City hereby further covenants and agrees that it will do and perform as soon as they may be done, all acts and things necessary for the final and valid levy of such special assessments, and in the event that any such assessment be at any time held invalid with respect to any lot, piece or parcel of land due to any error, defect, or irregularity in any action or proceedings taken or to be taken by the City or the Councilor . 264002.1 17 e e e any of the City officers or employees, either in the making of the assessments or in the performance of any condition precedent thereto, the City and the Council will forthwith do all further acts and take all further proceedings as may be required by law to make the assessments a valid and binding lien upon such property. At the time all of the assessments are in fact levied the Council shall, based on the then-current estimated col- lections of the assessments, make any adjustments in any ad valorem taxes required to be levied in order to assure that the City continues to be in compliance with Minnesota statutes, section 475.61, Subdivision 1. 18. 105% Debt Service Coveraae. It is hereby determined and reasonably anticipated that the estimated collections of special assessments relating to the Improvements and the other revenues available to the Debt Service Account will produce at least 5% in excess of the amount needed to meet, when due, the principal of and interest on the Bonds, and accordingly no ad valorem tax levy is required at this time. The City Clerk is directed to file a certified copy of this Resolution with the County Auditor of Sherburne County and to obtain the certificate of said official required by Minnesota Statutes, section 475.63. 19. General Obligation Pledae. The full faith and credit and taxing powers of the City are hereby pledged to the paYment of the principal of and interest on the Bonds, and in the event of any current or anticipated deficiency of funds in the Debt Service Account of amounts needed to make any such paYment, when due, the Council shall levy ad valorem taxes on all taxable property in the City in the amount of such deficiency. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 20. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 264002.1 18 e 21. Negative Covenant as to Use of Imorovements. The City hereby covenants not to use the Improvements or to cause or permit the Improvements to be used, or to enter into any deferred paYment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 22. Tax-Exemot status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and (3) the rebate of excess investment earnings to the United States if and to the extent that the Bonds do not qualify for available exceptions. In calendar year 1994, the City does not expect to qualify for the $5,000,000 "small issuer" exception to the federal arbitrage rebate requirements. 23. Designation of Oualified Tax-Exemot Obliaations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265{b) (3) of the Code, the City hereby makes the following factual statements and representations: e (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265{b) (3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501{c) (3) bonds as not being private activity bonds) which will be issued by the City (and all entities subordinate to, or treated as one issuer with, the City) during calendar year 1994 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued or to be issued by the City during calendar year 1994 have been designated for purposes of Section 265{b) (3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. e 264002.1 19 e e e 24. Defeasance. When any obligation of a Bond has been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this Resolution to the registered owner of that Bond (with respect to the obligation thereof so defeased) shall, to the extent permitted by law, cease. The City may at any time discharge any or all of such obligation(s) with respect to any Bond, subject to the provisions of law now or hereafter authorizing or regulating such action, by depositing irrevocably in escrow, with a suitable institution qualified by law as an escrow agent for this purpose, cash or securities which are backed by the full faith and credit of the United states of America, bearing interest payable at such times and at such rates and maturing on such dates and in such amounts as shall be required and sufficient, subject to sale and/or reinvestment in like securities, to pay said obligation(s), which may include any interest paYment on such Bond and/or principal amount due thereon at a stated maturity (or if irrevocable provision shall have been made for permitted prior redemption of such principal amount, at such earlier redemption date). 25. Compliance with Reimbursement Bond Reaulations. with respect to the Improvements, the City has complied and will continue to comply with the "Reimbursement Regulations" provided in United states Treasury Regulations section 1.103-18, and any successor regulations as may be applicable, including section 1.150-2. In particular, except where the following may not be required by said Regulations (e.g., with respect to certain "preliminary expenditures"), to the extent that any of the proceeds of the Bonds will be used to reimburse the City for a cost of the Improvements theretofore paid and temporarily financed by the City out of other City funds, prior to the initial paYment thereof (or within applicable time limits thereafter) the City has made or will have made a duly qualifying statement of its official intent to bond for such costs; otherwise, the proceeds of the Bonds are to be used for initial paYment, and not for such reimbursement, of costs of the Improvements. 26. Amendment of Prior Resolution. Following the adoption on May 2, 1994, of that certain resolution of the Council (the "Prior Resolution") initiating the process for the sale of the Bonds, the City determined that it was necessary to change the earliest optional redemption date for the Bonds from February 1, 2004, to February 1, 2001. Said revision of the terms of the Bonds is hereby approved and ratified by the Council, and the Prior Resolution is hereby amended with the same force and effect as though the corrected first optional redemption date for the Bonds had appeared therein at the time of its adoption. 264002.1 20 e e e 27. Severability. If any section, paragraph or prov1s1on of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Resolution. 28. Headings. Headings in this Resolution are included for convenience of reference only and shall not limit or define the meaning of any provision hereof. Adopted on May 23, 1994, by the Elk River City Council. The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 264002.1 21 . e e City Clerk's Certificate I, the undersigned, being the duly qualified and acting City Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the City Council duly called and held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to awarding the sale of the City's $3,495,000 General Obligation Improvement Bonds, Series 1994A. WITNESS my hand as such City Clerk and the official seal of the City this day of , 1994. City Clerk (SEAL) 264002.1 . , e e e EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Elk River, Minnesota, was duly held in the Elk River City Hall on May 23, 1994, commencing at 7:00 P.M., C.T., in part for the purpose of considering the offers which had been received for the purchase of the City's $1,280,000 General Obligation Sewer Revenue Bonds, Series 1994B. The following Councilmembers were present: and the following were absent: *** *** *** There was then presented a tabulation of the offers which had been received in the manner specified in the Terms of Proposal for the Bonds. The offers were as follows: 264042.1 e then introduced the following Resolution and moved its adoption: RESOLUTION NO. RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $1,280,000 GENERAL OBLIGATION SEWER REVENUE BONDS, SERIES 1994B e BE IT RESOLVED by the City Council (the "Council") of the City of Elk River, Minnesota (the "City"), as follows: 1. Recitals. It is hereby determined: (a) That the wastewater treatment plant improvements (the "Improvements") described in the Council's May 2, 1994, resolution relating to these Bonds have been duly ordered by the City and have been constructed by the City or will be constructed under contracts which the City has or will let therefor, all pursuant to and in accordance with Minnesota Statutes, Section 444.075. (b) That is it necessary and expedient to the sound financial management of the affairs of the City that the City issue its bonds pursuant to Minnesota Statutes, Section 444.075 and Chapter 475, to provide financing for the Improvements. 2. AcceDtance of Offer. The offer of (the "Purchaser") to purchase the City'S $1,280,000 General Obligation Sewer Revenue Bonds, Series 1994B (the "BondS"), at the rates of interest and upon the other terms set forth in this Resolution, and to pay therefor the sum of $ plus interest accrued to settlement, is hereby accepted. 3. Title: Original Issue Date: Denominations: Maturities. The Bonds shall be titled "General Obligation Sewer Revenue Bonds, Series 1994B," shall be dated June 1, 1994, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on February 1 in the years and amounts as follows: e 264042.1 2 Years Amounts Years Amounts e 1996 $ 65,000 2003 $ 90,000 1997 70,000 2004 95,000 1998 70,000 2005 100,000 1999 75,000 2006 105,000 2000 80,000 2007 115,000 2001 85,000 2008 120,000 2002 85,000 2009 125,000 4. Purpose. The Bonds shall provide funds to finance the Improvements. The total cost of the Improvements, which shall include all costs enumerated in Minnesota statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Improvements shall proceed with due diligence to completion. 5. Interest. The Bonds shall bear interest payable semiannually on February 1 and August 1 of each year (each, an "Interest PaYment Date"), commencing February 1, 1995, calculated on the basis of a 360-day year consisting of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years, as follows: Maturity Interest Maturity Interest Year Rate Year Rate e 1996 % 2003 % 1997 2004 1998 2005 1999 2006 2000 2007 2001 2008 2002 2009 6. Redemption. All Bonds maturing after February 1, 2004, shall be subject to redemption and prepaYment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepaYment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepaYment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of e 264042. 1 3 e redemption shall be given to the paying agent and to each affected registered owner of the Bonds. e To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar, prior to giving notice of redemption, shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or by the registered owner's attorney, duly authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 7. Bond Reaistrar. , in , , is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. The principal of and interest on the Bonds shall be paid to the registered owners (or record owners) of the Bonds in the manner set forth in the form of Bond and paragraph 13 of this Resolution. 8. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: e 264042. 1 4 e e e UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF SHERBURNE CITY OF ELK RIVER R- $ GENERAL OBLIGATION SEWER REVENUE BOND, SERIES 1994B INTEREST RATE MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Elk River, Sherburne County, Minnesota (the "City"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above on the maturity date specified above, unless duly called for earlier redemption, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest PaYment Date"), commencing February 1, 1995, at the rate per annum specified above (calculated on the basis of a 360-day year consisting of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest PaYment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , (the "Bond Registrar"), acting as paying agent, or at the principal office of any successor paying agent duly appointed by the City. Interest on this Bond will be paid on each Interest PaYment Date by check or draft mailed to the person in whose name this Bond is registered (the "Registered Owner") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month preceding such Interest PaYment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Registered Owner hereof as of the Regular Record Date, and shall be payable to the person who is the Registered Owner hereof at the close of business on a date (the 264042. 1 5 . e e "Special Record Date") fixed by the Bond Registrar whenever money becomes available for paYment of the defaulted interest. Notice of the Special Record Date shall be given to Registered Owners not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to have happened and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed in regular and due form, time and manner as required by law, and that this Bond, together with all other indebtedness of the City outstanding on the date of original issue hereof and the date of its actual issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Elk River, Sherburne County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its City Administrator; has caused the corporate seal of the City to be intentionally omitted herefrom, as permitted by law; and has caused this Bond to be executed manually by the Bond Registrar, acting as the City'S duly appointed authenticating agent for the Bonds. 264042. 1 6 e e e Date of Registration: Registrable by: Payable at: BOND REGISTRAR'S CERTIFICATE OF CITY OF ELK RIVER, SHERBURNE COUNTY, MINNESOTA AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. /s/ Facsimile Mayor /s/ Facsimile City Administrator , Bond Registrar By /s/ Manual Authorized Signature ON REVERSE OF BOND I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion executed by the above-named attorneys, except as to the dating thereof, which opinion has been handed to me for filing in my office prior to the time of delivery of the Bonds. (facsimile sianaturel City Clerk City of Elk River, Minnesota 264042.1 7 e e e Redemotion. All Bonds of this issue maturing after February 1, 2004, are subject to redemption and prepayment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepayment, the Bonds of that maturity to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. Selec~ion of Bonds for Redemotion: Partial Redemption. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing), and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: puroose: General Obliaation. This Bond is one of an issue in the total principal amount of $1,280,000, all of like date of original issue and tenor, except as to registration number, maturity, interest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the state of 264042.1 8 e e e Minnesota and pursuant to a resolution adopted by the City Council on May 23, 1994 (the "Resolution"), for the purpose of providing money to finance certain costs of improvements to the City's wastewater treatment utility. This Bond constitutes a general obligation of the City, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. Denominations: Exchange: Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral mUltiples thereof of a single maturity and are exchangeable for fully registered bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Registered Owner in person or by the Registered Owner's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the City contained in any agreement with the Bond Registrar. Thereupon the City shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owners. The City and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and 264042. 1 9 neither the City nor the Bond Registrar shall be affected by ~ notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the certificate of Authentication hereon shall have been executed by the Bond Registrar. Qualified Tax-ExemDt Obligations. The Bonds have been designated by the City as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for ~ (Cust) under the (Minor) Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. e 264042.1 10 e e e ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. as Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company, by a brokerage firm having a membership in one of the major stock exchanges or by any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15 (a) (2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 264042.1 11 e e e 9. Execution: TemDorary Bonds. The Bonds shall be executed on behalf of the City by the signatures of its Mayor and City Administrator and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed facsimile; and provided further that both of such signatures may be printed facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in substantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and cancelled. 10. ~uthentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless a certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is June 1, 1994. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The City Clerk shall obtain a copy of the proposed approving legal opinion of bond counsel, Briggs and Morgan, Professional Association, st. Paul, Minnesota, which shall be complete except as to dating ther~of, shall cause such opinion to be filed in the offices of the City, and shall cause said opinion to be printed on each of the Bonds, together with a certificate to be signed by the facsimile signature of the City Clerk in sUbstantially the form set forth in the foregoing form of the Bonds. 264042. 1 12 . 11. Reaistration: Transfer: Exchange. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 10) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. . At the option of the registered owner thereof, Bonds may be exchanged for Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the registered owner making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this Resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the City. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid obligations of the City evidencing the same debt, and entitled to the same benefits under this Resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing. The Bond Registrar may require paYment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. e 264042. 1 13 e e e Transfers shall also be subject to reasonable regula- tions of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 12. Riahts Upon Transfer or Exchanae. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carryall the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 13. Interest Payment: Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the registered owner thereof as of the Regular Record Date, and shall be payable to the person who is the registered owner thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the registered owners not less than ten (10) days prior to the Special Record Date. 14. Treatment of Reaistered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 13 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 15. Delivery: Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the City Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 16. Fund and Accounts. There is hereby created a special fund of the City designated the "$1,280,000 General Obligation Sewer Revenue Bonds, Series 1994B Fund" (the "Fund") to be held and administered by the City as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall continue to be maintained in the manner herein specified until all of the 264042. 1 14 e Bonds herein authorized and all other bonds payable from said Fund and the interest thereon have been fully paid. There shall be maintained in the Fund two (2) separate accounts, to be designated the "Capital Account" and "Debt Service Account", respectively. (i) CaDital Account. To the Capital Account there shall be credited the proceeds of the sale of the Bonds, less such amounts thereof as shall be deposited into the Debt Service Account pursuant to paragraph 16(ii) below. From the Capital Account there shall be paid all costs and expenses of making the Improvements, including the cost of any construction contracts heretofore let, the costs of issuing the Bonds and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65; and the moneys in said account shall be used for no other purpose except as otherwise provided by law. e (ii) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (a) the net revenues of the city's municipal sanitary sewer system (as hereinafter described, the "Net Revenues"), but only in amounts and at such times as will be sufficient (together with other amounts in the Debt service Account) to pay, when due, the principal of and interest on the Bonds; (b) all accrued interest received upon delivery of the Bonds; (c) any collections of all taxes hereafter levied for the paYment of the Bonds and interest thereon; (d) all investment earnings on funds held in the Debt Service Account; and (e) any and all other moneys which are properly available and are appropriated by the Council to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal of and interest on the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. As used in this Resolution, the term Net Revenues means the gross revenues derived by the City from the operation of its municipal sanitary sewer system, including all charges for service, use, availability, and connection to said system, and all monies received from the sale of any facilities or equipment of said system or any by-products thereof, less all normal, reasonable, or current costs of owning, operating, and maintaining the system. If any paYment of principal or interest on the Bonds shall become due when there are not sufficient funds in the Debt Service Account to pay the same, the City Finance Director shall pay such principal or interest from the general fund or other available fund of the City, and such fund shall be reimbursed for such advances from the proceeds of the Net Revenues or of any general ad valorem taxes hereafter levied for e 264042. 1 15 e e e such purpose, when collected. The City hereby covenants that it will impose and collect charges for the service, use, and availability of and connection to the city's municipal sanitary sewer system, at the times and in the amounts required to produce Net Revenues adequate, together with other sources of funding available to the Debt Service Account, to pay all principal of and interest on the Bonds, when due. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the Net Revenues of the City's municipal sanitary sewer system for the paYment of other or additional obligations of the City, provided that it has first been determined that the estimated Net Revenues of the City's municipal sanitary sewer system will be sufficient, in addition to all other sources, for the paYment of the Bonds and such additional obligations, and any such pledge and appropriation of said Net Revenues may be made superior or subordinate to, or on a parity with, the pledge and appropriation herein. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the "issue price" of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Capital Account or Debt Service Account in excess of amounts which under then-applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds or any Additional Bonds to be "federally guaranteed" within the meaning of section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "COde"). 17. 105% Debt Service Coveraae. It is hereby determined and reasonably anticipated that the estimated collections of the Net Revenues and the other revenues available to the Debt Service Account will prOduce-at least 5% in excess of the amount needed to meet, when due, the principal of and interest on the Bonds, and accordingly no ad valorem tax levy is 264042. 1 16 e required at this time. The City Clerk is directed to file a certified copy of this Resolution with the County Auditor of Sherburne County and to obtain the certificate of said official required by Minnesota Statutes, Section 475.63. 18. General Obliaation Pledae. The full faith and credit and taxing powers of the City are hereby pledged to the paYment of the principal of and interest on the Bonds, and in the event of any current or anticipated deficiency of funds in the Debt Service Account of amounts needed to make any such paYment, when due, the Council shall levy ad valorem taxes on all taxable property in the City in the amount of such deficiency. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. e 19. Records and certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 20. Negative Covenant as to Use of ImDrovements. The City hereby covenants not to use the Improvements or to cause or permit the Improvements to be used, or to enter into any deferred paYment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 21. Tax-ExemDt Status of the Bonds: Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and (3) the rebate of excess investment earnings to the United States if and to the extent e 264042.1 17 e that the Bonds do not qualify for available exceptions. In calendar year 1994, the City does not expect to qualify for the $5,000,000 "small issuer" exception to the federal arbitrage rebate requirements. 22. Desianation of Qualified Tax-Exempt Qbliaations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of section 265(b) (3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of section 265 (b) (3) of the Code; e (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c) (3) bonds as not being private activity bonds) which will be issued by the City (and all entities subordinate to, or treated as one issuer with, the City) during calendar year 1994 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued or to be issued by the City during calendar year 1994 have been designated for purposes of section 265(b) (3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 23. Defeasance. When any obligation of a Bond has been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this Resolution to the registered owner of that Bond (with respect to the obligation thereof so defeased) shall, to the extent permitted by law, cease. The City may at any time discharge any or all of such obligation(s) with respect to any Bond, subject to the provisions of law now or hereafter authorizing or regulating such action, by depositing irrevocably in escrow, with a suitable institution qualified by law as an escrow agent for this purpose, cash or securities which are backed by the full faith and credit of the united states of America, bearing interest payable at such times and at such rates and maturing on such dates and in such amounts as shall be required and sufficient, sUbject to sale and/or reinvestment in like securities, to pay said obligation(s), which e 264042. 1 18 e e e may include any interest paYment on such Bond and/or principal amount due thereon at a stated maturity (or if irrevocable provision shall have been made for permitted prior redemption of such principal amount, at such earlier redemption date). 24. Compliance with Reimbursement Bond Regvlations. With respect to the Improvements, the City has complied and will continue to comply with the "Reimbursement Regulations" provided in United states Treasury Regulations Section 1.103-18, and any successor regulations as may be applicable, including Section 1.150-2. In particular, except where the following may not be required by said Regulations (e.g., with respect to certain "preliminary expenditures"), except where the following may not be required by said Regulations (e.g., with respect to certain "preliminary expenditures"), to the extent that any of the proceeds of the Bonds will be used to reimburse the City for a cost of the Improvements theretofore paid and temporarily financed by the City out of other City funds, prior to the initial paYment thereof (or within applicable time limits thereafter) the City has made or will have made a duly qualifying statement of its official intent to bond for such costs; otherwise, the proceeds of the Bonds are to be used for initial paYment, and not for such reimbursement, of costs of the Improvements. 25. Severability. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Resolution. 26. Headinas. Headings in this Resolution are included for convenience of reference only and shall not limit or define the meaning of any provision hereof. Adopted on May 23, 1994, by the Elk River City Council. The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 264042. 1 19 e e . City Clerk's Certificate I, the undersigned, being the duly qualified and acting City Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the City Council duly called and held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to awarding the sale of the City's $1,280,000 General Obligation Sewer Revenue Bonds, Series 1994B. WITNESS my hand as such City Clerk and the official seal of the City this ____ day of , 1994. (SEAL) 264042.1 City Clerk ,~ e e e EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Elk River, Minnesota, was duly held in the Elk River City Hall on May 23, 1994, commencing at 7:00 P.M., C.T., in part for the purpose of considering the offers which had been received for the purchase of the City's $1,080,000 General Obligation Storm Sewer Revenue Bonds, Series 1994C. The following Councilmembers were present: and the following were absent: *** *** *** There was then presented a tabulation of the offers which had been received in the manner specified in the Terms of Proposal for the Bonds. The offers were as follows: 264048. 1 .~ e e e then introduced the following Resolution and moved its adoption: RESOLUTION NO. RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $1,080,000 GENERAL OBLIGATION STORM SEWER REVENUE BONDS, SERIES 1994C BE IT RESOLVED by the City Council (the "Council") of the City of Elk River, Minnesota (the "city"), as follows: 1. Recitals. It is hereby determined: (a) That the public storm sewer improvements (the "Improvements") described in the Council's May 2, 1994, resolution relating to these Bonds have been duly ordered by the City and have been constructed by the City or will be constructed under contracts which the City has or will let therefor, all pursuant to and in accordance with Minnesota Statutes, Section 444.075. (b) That is it necessary and expedient to the sound financial management of the affairs of the City that the City issue its bonds pursuant to Minnesota Statutes, Section 444.075 and Chapter 475, to provide financing for the Improvements. 2. AcceDtance of Offer. The offer of (the "Purchaser") to purchase the City'S $1,080,000 General Obligation Storm Sewer Revenue Bonds, Series 1994C (the "Bonds"), at the rates of interest and upon the other terms set forth in this ReSOlution, and to pay therefor the sum of $ plus interest accrued to settlement, is hereby accepted. 3. Title: Oriainal Issue Date: Denominations: Maturities. The Bonds shall be titled "General Obligation Storm Sewer Revenue Bonds, Series 1994C," shall be dated June 1, 1994, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: 264048.1 2 Years Amounts Years Amounts e 1995 $ 25,000 2003 $ 75,000 1996 55,000 2004 80,000 1997 55,000 2005 85,000 1998 60,000 2006 85,000 1999 60,000 2007 95,000 2000 65,000 2008 100,000 2001 65,000 2009 105,000 2002 70,000 4. Pur9ose. The Bonds shall provide funds to finance the Improvements. The total cost of the Improvements, which shall include all costs enumerated in Minnesota statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Improvements shall proceed with due diligence to completion. 5. Interest. The Bonds shall bear interest payable semiannually on June 1 and December 1 of each year (each, an "Interest PaYment Date"), commencing June 1, 1995, calculated on the basis of a 360-day year consisting of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years, as follows: Maturity Interest Maturity Interest e Year Rate Year Rate 1995 % 2003 % 1996 2004 1997 2005 1998 2006 1999 2007 2000 2008 2001 2009 2002 6. RedemDtion. All Bonds maturing after December 1, 2004, shall be subject to redemption and prepaYment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepaYment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepaYment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and e 264048. 1 3 e e e to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar, prior to giving notice of redemption, shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or by the registered owner's attorney, duly authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 7. Bond Reqistrar. , in , , is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. The principal of and interest on the Bonds shall be paid to the registered owners (or record owners) of the Bonds in the manner set forth in the form of Bond and paragraph 13 of this Resolution. 8. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: 264048. 1 4 . e e UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF SHERBURNE CITY OF ELK RIVER R- $ GENERAL OBLIGATION STORM SEWER REVENUE BOND, SERIES 1994C INTEREST RATE MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Elk River, Sherburne County, Minnesota (the "city"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above on the maturity date specified above, unless duly called for earlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing June 1, 1995, at the rate per annum specified above (calculated on the basis of a 360-day year consisting of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , (the "Bond Registrar"), acting as paying agent, or at the principal office of any successor paying agent duly appointed by the City. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Registered Owner") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Registered Owner hereof as of the Regular Record Date, and shall be payable to the pe~son who is the Registered Owner hereof at the close of business on a date (the 264048.1 5 e e e "Special Record Date") fixed by the Bond Registrar whenever money becomes available for paYment of the defaulted interest. Notice of the Special Record Date shall be given to Registered Owners not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United states of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to have happened and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed in regular and due form, time and manner as required by law, and that this Bond, together with all other indebtedness of the City outstanding on the date of original issue hereof and the date of its actual issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Elk River, Sherburne County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its City Administrator; has caused the corporate seal of the City to be intentionally omitted herefrom, as permitted by law; and has caused this Bond to be executed manually by the Bond Registrar, acting as the City's duly appointed authenticating agent for the Bonds. 264048.1 6 e e e Date of Registration: Registrable by: Payable at: BOND REGISTRAR'S CERTIFICATE OF CITY OF ELK RIVER, SHERBURNE COUNTY, MINNESOTA AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Isl Facsimile Mayor Isl Facsimile City Administrator Bond Registrar By Isl Manual Authorized Signature ON REVERSE OF BOND I hereby certify that the foregoing is a full, true, and correct copy of the legal opinion executed by the above-named attorneys, except as to the dating thereof, which opinion has been handed to me for filing in my office prior to the time of delivery of the Bonds. (facsimile siqnature) City Clerk City of Elk River, Minnesota 264048.1 7 e e e Redemption. All Bonds of this issue maturing after December 1, 2004, are subject to redemption and prepayment at the option of the City on said date and on any date thereafter at a price of par plus accrued interest to date of redemption. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the City shall determine the amount of Bonds of each maturity to be prepaid; and if only part of the Bonds having a common maturity date are called for prepayment, the Bonds of that maturity to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Published notice of redemption shall in each case be given if and to the extent required by applicable law, and mailed notice of redemption shall be given to the paying agent and to each affected registered owner of the Bonds. Selection of Bonds for RedemDtion: Partial RedemDtion. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond of that maturity a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City or Bond Registrar duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing), and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the registered owner of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such registered owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: Purpose: General Obligation. This Bond is one of an issue in the total principal amount of $1,080,000, all of like date of original issue and tenor, except as to registration number, maturity, interest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State of 264048.1 8 . e e Minnesota and pursuant to a resolution adopted by the city council on May 23, 1994 (the "Resolution"), for the purpose of providing money to finance certain costs of improvements to the City's storm sewer system and utility. This Bond constitutes a general obligation of the City, and to provide moneys for the prompt and full paYment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. Denomin~tions: Exchanae: Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Registered Owner in person or by the Registered Owner's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the City contained in any agreement with the Bond Registrar. Thereupon the City shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees UDon Transfer or Loss. The Bond Registrar may require paYment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reaistered Owners. The City and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and 264048. 1 9 e e e neither the City nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the certificate of Authentication hereon shall have been executed by the Bond Registrar. Qualified Tax-ExemDt Obliaations. The Bonds have been designated by the City as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Minor) Uniform (Cust) under the (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 264048. 1 10 e e e ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. as Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company, by a brokerage firm having a membership in one of the major stock exchanges or by any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15(a) (2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 264048.1 11 e e e 9. Execution: Temporarv Bonds. The Bonds shall be executed on behalf of the City by the signatures of its Mayor and City Administrator and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed facsimile; and provided further that both of such signatures may be printed facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in sUbstantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and cancelled. 10. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is June 1, 1994. The certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The City Clerk shall obtain a copy of the proposed approving legal opinion of bond counsel, Briggs and Morgan, Professional Association, st. Paul, Minnesota, which shall be complete except as to dating thereof, shall cause such opinion to be filed in the offices of the City, and shall cause said opinion to be printed on each of the Bonds, together with a certificate to be signed by the facsimile signature of the City Clerk in substantially the form set forth in the foregoing form of the Bonds. 264048.1 12 e e e 11. Reaistration: Transfer: Exchanae. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 10) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the registered owner thereof, Bonds may be exchanged for Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the registered owner making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this Resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the City. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid obligations of the City evidencing the same debt, and entitled to the same benefits under this Resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof or the registered owner's attorney duly authorized in writing. The Bond Registrar may require paYment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. 264048.1 13 e e e Transfers shall also be subject to reasonable regula- tions of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and paYment dates. 12. Riahts Upon Transfer or Exchanae. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 13. Interest Payment: Record Date. Interest on any Bond shall be paid on each Interest PaYment Date by check or draft mailed to the person in whose name the Bond is registered on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month preceding such Interest PaYment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the registered owner thereof as of the Regular Record Date, and shall be payable to the person who is the registered owner thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for paYment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the registered owners not less than ten (10) days prior to the Special Record Date. 14. Treatment of Reaistered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving paYment of principal of and premium, if any, and interest (subject to the paYment provisions in paragraph 13 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 15. Delivery: ADDlication of Proceeds. The Bonds when so prepared and executed shall be delivered by the City Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 16. Fund and Accounts. There is hereby created a special fund of the City designated the "$1,080,000 General Obligation Storm Sewer Revenue Bonds, Series 1994C Fund" (the "Fund") to be held and administered by the City as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall continue to be maintained in the manner herein specified until all of the 264048.1 14 e e e Bonds herein authorized and all other bonds payable from said Fund and the interest thereon have been fully paid. There shall be maintained in the Fund two (2) separate accounts, to be designated the "Capital Account" and "Debt Service Account", respectively. (i) CaDital Account. To the Capital Account there shall be credited the proceeds of the sale of the Bonds, less such amounts thereof as shall be deposited into the Debt Service Account pursuant to paragraph 16(ii) below. From the Capital Account there shall be paid all costs and expenses of making the Improvements, including the cost of any construction contracts heretofore let, the costs of issuing the Bonds and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, section 475.65; and the moneys in said account shall be used for no other purpose except as otherwise provided by law. (ii) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (a) the net revenues of the City's municipal storm sewer system (as hereinafter described, the "Net Revenues"), but only in amounts and at such times as will be sufficient (together with other amounts in the Debt Service Account) to pay, when due, the principal of and interest on the Bonds; (b) all accrued interest received upon delivery of the Bonds; (c) any collections of all taxes hereafter levied for the paYment of the Bonds and interest thereon; (d) all investment earnings on funds held in the Debt Service Account; and (e) any and all other moneys which are properly available and are appropriated by the Council to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal of and interest on the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. As used in this Resolution, the term Net Revenues means the gross revenues derived by the City from the operation of its municipal storm sewer system, including all charges for service, use, availability, and connection to said system, and all monies received from the sale of any facilities or equipment of said system or any by-products thereof, less all normal, reasonable, or current costs of owning, operating, and maintaining the system. If any paYment of principal or interest on the Bonds shall become due when there are not sufficient funds in the Debt Service Account to pay the same, the City Finance Director shall pay such principal or interest from the general fund or other available fund of the City, and such fund shall be reimbursed for such advances from the proceeds of the Net Revenues or of any general ad valorem taxes hereafter levied for such purpose, when 264048. 1 15 e e e collected. The City hereby covenants that it will impose and collect charges for the service, use, and availability of and connection to the City's municipal storm sewer system, at the times and in the amounts required to produce Net Revenues adequate, together with other sources of funding available to the Debt Service Account, to pay all principal of and interest on the Bonds, when due. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the Net Revenues of the city's municipal storm sewer system for the paYment of other or additional obligations of the City, provided that it has first been determined that the estimated Net Revenues of the city's municipal storm sewer system will be sufficient, in addition to all other sources, for the paYment of the Bonds and such additional obligations, and any such pledge and appropriation of said Net Revenues may be made superior or subordinate to, or on a parity with, the pledge and appropriation herein. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the "issue price" of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Capital Account or Debt Service Account in excess of amounts which under then-applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the united States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds or any Additional Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). 17. 105% Debt Service Coveraae. It is hereby determined and reasonably anticipated that the estimated collections of the Net Revenues and the other revenues available to the Debt Service Account will produce at least 5% in excess of the amount needed to meet, when due, the principal of and interest on the Bonds, and accordingly no ad valorem tax levy is 264048.1 16 . e e required at this time. The City Clerk is directed to file a certified copy of this Resolution with the County Auditor of Sherburne County and to obtain the certificate of said official required by Minnesota Statutes, section 475.63. 18. General Obliaation Pledge. The full faith and credit and taxinq powers of the City are hereby pledqed to the paYment of the principal of and interest on the Bonds, and in the event of any current or anticipated deficiency of funds in the Debt Service Account of amounts needed to make any such paYment, when due, the Council shall levy ad valorem taxes on all taxable property in the City in the amount of such deficiency. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 19. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approvinq the leqality of the issuance of the Bonds, certified copies of all proceedinqs and records of the City relatinq to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relatinq to the leqality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, includinq any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 20. Negative Covenant as to Use of Improvements. The City hereby covenants not to use the Improvements or to cause or permit the Improvements to be used, or to enter into any deferred paYment arranqements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within the meaninq of Sections 103 and 141 throuqh 150 of the Code. 21. Tax-ExemDt Status of the Bonds: Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from qross income under section 103 of the Code of the interest on the Bonds, includinq without limitation (1) requirements relatinq to temporary periods for investments, (2) limitations on amounts invested at a yield qreater than the yield on the Bonds, and (3) the rebate of excess investment earninqs to the United States if and to the extent 264048.1 17 . e . that the Bonds do not qualify for available exceptions. In calendar year 1994, the City does not expect to qualify for the $5,000,000 "small issuer" exception to the federal arbitrage rebate requirements. 22. Desianation of Qualified Tax-ExemDt Obliaations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b) (3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of section 265(b) (3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(C) (3) bonds as not being private activity bonds) which will be issued by the City (and all entities subordinate to, or treated as one issuer with, the City) during calendar year 1994 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued or to be issued by the City during calendar year 1994 have been designated for purposes of Section 265(b) (3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 23. Defeasance. When any obligation of a Bond has been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this Resolution to the registered owner of that Bond (with respect to the obligation thereof so defeased) shall, to the extent permitted by law, cease. The City may at any time discharge any or all of such obligation(s) with respect to any Bond, subject to the provisions of law now or hereafter authorizing or regulating such action, by depositing irrevocably in escrow, with a suitable institution qualified by law as an escrow agent for this purpose, cash or securities which are backed by the full faith and credit of the United States of America, bearing interest payable at such times and at such rates and maturing on such dates and in such amounts as shall be required and sufficient, subject to sale and/or reinvestment in like securities, to pay said obligation(s), which 264048.1 18 . . . may include any interest paYment on such Bond and/or principal amount due thereon at a stated maturity (or if irrevocable provision shall have been made for permitted prior redemption of such principal amount, at such earlier redemption date). 24. ComDliance with Reimbursement Bond Reaulations. with respect to the Improvements, the City has complied and will continue to comply with the "Reimbursement Regulations" provided in United states Treasury Regulations Section 1.103-18, and any successor regulations as may be applicable, including Section 1.150-2. In particular, except where the following may not be required by said Regulations (e.g., with respect to certain "preliminary expenditures"), except where the following may not be required by said Regulations (e.g., with respect to certain "preliminary expenditures"), to the extent that any of the proceeds of the Bonds will be used to reimburse the City for a cost of the Improvements theretofore paid and temporarily financed by the City out of other City funds, prior to the initial paYment thereof (or within applicable time limits thereafter) the City has made or will have made a duly qualifying statement of its official intent to bond for such costs; otherwise, the proceeds of the Bonds are to be used for initial paYment, and not for such reimbursement, of costs of the Improvements. 25. Severabilitv. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Resolution. 26. Headinas. Headings in this Resolution are included for convenience of reference only and shall not limit or define the meaning of any provision hereof. Adopted on May 23, 1994, by the Elk River City Council. The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 264048. 1 19 . e e City Clerk's Certificate I, the undersigned, being the duly qualified and acting City Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the City Council duly called and held on the date therein indicated, which are on file and of record in my office, and the same is a full, 'true and complete transcript therefrom insofar as the same relates to awarding the sale of the City's $1,080,000 General Obligation storm Sewer Revenue Bonds, series 1994C. WITNESS my hand as such City Clerk and the official seal of the City this ____ day of 1994. City Clerk (SEAL) 264048.1 SENT BY:MOODY'S INVESTORS SVC 5-16-94 ;12:17PM PUBLIC FINANCE DEPT~ 4417425;# 1 - ~ _1 m Mood~s Investors Service ".llJ Public Finance -- Telecopy Transmittal Please deliver this material as soon as possible. To: Lori Johnson, Fin. Dir. Telephone: (612) 441-7420 From: Moody's Public Finance Rating Desk FAX: (612) 441-7425 Date Sent: 05/17/94 e A RATING WAS ASSIGNED TO YOUR DEBT ISSUE(S) TODAY e Moody's has already undertaken these two immediate actions to disseminate your rating throughout the investment and municipal communities: Rating Recap-The second page of this fax is an excerpt of Moody's Municipal Daily Rating Recap for your issue. Immediately after you were notified of the rating, Moody's made your Recap available electronically to every major participant in the municipal investment conununity. Your rating will also appear in the printed copy of today's Rating Recap, a daily summary of Moody's rating activity, which is delivered to all our Public Finance subscribers. Rating Desk-Immediately after you were notified, information about your issue' s rating was made available to the public via Moody's Rating Desk. Our Rating Desk received more than 90,000 rating inquiries last year from fund managerst bankers, financial advisors and issuers. Up-to-date information about your issue is provided to them throughout the year. This immediate dissemination of your rating provides the broadest possible awareness of your issue, which enhances its marketability. If yot have any questions about the attached Recap or how Moodyts distributes rating information, please don't hesitate to call the analyst whose name and telephone number appear at the bottom of the Recap. If the transmission is interrupted or if it is of poor quality, please notify us immediately by calling (212) 553-1352 and asking for Marie Joseph. SENT BY:MOODY'S INVESTORS SVC 5-1S-94 ;12:1SPM PUBLIC fINANCE DEPT~ 4417425;# 2 . Moody's Municipal Daily Rating Recap e e Elk River. Minnesota Rating date: May 17, 1994 Moody.s rating: Baa 1 $3,495,000 General Obligation Improvement Bonds, Series 1994A $1,280.000 General Obligation Sewer Revenue Bonds, Series 1994B $1,080,000 G neral Obligation Storm Sewer Revenue Bonds, Series 1994C Sale: $S.S5S,ooO Date of Sale: May 23 Type: Competitive Security: General obligation, unlimited t x; special assessments against benefited properties d net reve- nues of the city sewer utility and storm se er utility are also pledged. Use of Proceeds: Trunk sewer, water, st rm drainage and street improvements; sewage treatme t plant expansion. Last Rating change: December 1974: aa to Baal Update of related ratings: Elk River Economic Development Aut orlty, Minnesota City Hall & Law Enforcement Facilities evenue Bonds Moody's rating: laa Elk River, Minnesota General Obligation State Aid Road Bonds Moody's rating: A Credit Comment: Key factors supporting the confir- mation of the Baal rating on the general obligation bonds of the City of Elk River are as follows: . Despite pressures related to this rapidly growing com- munity's mounting capital, personnel and service needs, financial operations, which are largely sup- ported by property taxes, state aid, and special assess- ments, continue to be satisfactorily maintained. Small annual increases in the General Fund balance over the past four fiscal years are largely attributable to unan- ticipated revenues and conservative budgeting. Year-to-date general operations compare favorably to budget and the city estimates that the December 31, 1994 General Fund balance will be somewhat above that of the prior year. . With the current issuance both debt burden and per capita debt remain well above the medians for cities of similar population size. Additional borrowing can be expected in order to accommodate the city's growth and the issuance of $225,000 in tax increment supported general obligation debt is expected within two months for library expansion, along with $1.6 million in special assessment backed general obliga- tion debt for a new street anticipated later this year. However, support from special assessments, utility enterprise revenues, and tax increments for most of the city's outstanding general obligation debt allevi- ates pressure on the property tax rate. . Elk River benefits from its close proximity to the Minneapolis-St. Paul metropolitan area, as evidenced, in part, by its rapid population growth and continuing economic diversification. Additional growth is expected since the city remains almost two-thirds undeveloped. Resident income levels and housing val- ues are above those of the state in general and, tradi- SENT BY:MOODY'S INVESTORS SVC 5-18-94 ;12:18PM PUBLIC FINANCE DEPT~ 4417425;# 3 2 As of May 17. 1994 Moody's Municipal Daily Rating Recap Elk liver. Minnesota (continued) e tionally, county unemployment rates have exceeded state averages. At this time, we have also reviewed and confirmed the A rating on the city's general obligation state aid road bonds, which are secured by both the city's general obligation pledge and state road aid allotments, and the Baa rating on the Elk River Economic Development Authority's City Hall and Law Enforcement Facility Revenue Bonds, which are backed by the city's annual budget appropriations. analyst: Jerry COden (212) 553-0329 e e Thalnformalion heNln hu been oblalned from sourcea bellcve4 to be aoolralC and reUable. bill beeause of Ih. po.slbllll1 of humen BIld meohalllca\ emr, lIS 8DGur~y or Domple.noula not sua,en.e4. Moody's ratinll are oplnlOllll, DO! l'ICommenclallolllto bull or 1111. and their aeollfacy lallOl paranread. A radII' should be \II.Sbed 10lel1 a, one factor In anlnvellmenl decllion, " and YOII should make yollr own study and evaluation of lIIlY IMBuer whoSI teCurldeB or debt ablllJlliollJ )'011 conlider bIIy1ng or Bellini. MOItluuers of corpora,. bondi, municipal bond. and nOles, prcf'cned sleck. and c:ommlll'Clal paper whlcllllftl rated by Moody', lnvelton Servlc:c:, IDe. have, prior le receiving the r.nll." agreed 10 pay a flC 10 Moody'. for wappralial and radnS Bel'lllcc,. 'J'ba fea taIIgcl frolll SI.ooo to SI2.1,000. Copyriahl e 1994 by Moody's lnveslon Service, Inc:. Pllbllablng and OllIOUtlva offices 1199 Clunm Street. Nil'" York. NY 10007 ~ SPRINGSTED PUBLIC FINANCE ADVISORS e Home Office 85 East Seventh Place SUite 100 Saint Paul. MN 55101-2143 (612) 223-3000 Fax: (612) 223-3002 $3,495,000 CITY OF ELK RIVER, MINNESOTA GENERAL OBUGA TION IMPROVEMENT BONDS, SERIES 1994A AWARD: SALE: PIPER JAFFRA Y INC. May 23,1994 120 South Sixth Street SUite 2507 Minneapolis, MN 55402-1800 (612) 333-9177 Fax: (612) 349-5230 16655 West Bluemound Road SUite 290 Brookfield. WI 53005-5935 (414) 782-8222 Fax: (414) 782-2904 6800 College Boulevard SUite 600 Overland Park, KS 66211-1533 (913) 345-8062 Fax: (913) 345-1770 1850 K Street NW SUite 215 Washington, DC 20006-2200 (202) 466-3344 Fax: (202) 223-1362 Moody's Rating: Aaa Standard & Poor's Rating: AAA Capital Guaranty Insured Bidder Price Net Interest True Interest Cost Rate _IPER JAFFRAY INC. FBS INVESTMENT SERVICES, INC. DAIN BOSWORTH INCORPORATED DOUGHERTY, DAWKINS, STRAND & BIGELOW, INCORPORATED MILLER & SCHROEDER FINANCIAL, INC. National City Bank - In Association With - NORWEST INVESTMENT SERVICES, INC. MERRILL LYNCH & CO. American National Bank Saint Paul ~iller, Johnson & Kuehn, Inc. Interest Rates 4.20% 1996 4.40% 1997 4.60% 1998 4.80% 1999 5.00% 2000 5.10% 2001 5.20% 2002 5.30% 2003 5.40% 2004 5.50% 2005 5.60% 2006 5.70% 2007 5.80% 2008 5.90% 2009 5.95% 2010 6.00% 2011 $3,478,328.85 $1,563,404.48 5.5155% 4.35% 1996-1997 4.55% 1998 4.70% 1999 4.85% 2000 5.00% 2001 5.10% 2002 5.20% 2003 5.30% 2004 5.45% 2005 5;60% 2006 5.70% 2007 5.80% 2008 5.90% 2009 5.95% 2010 6.00% 2011 $3,449,565.00 $1,582,809.17 5.6166% (Continued) Bidder CRONIN & COMPANY. INCORPORATED SMITH BARNEY SHEARSON PARK INVESTMENT CORPORATION EDWARD D. JONES & COMPANY PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INCORPORATED PRUDENTIAL SECURITIES. INC. ROBERT W. BAIRD & COMPANY, INCORPORATED GRIFFIN, KUBIK, STEPHENS & THOMPSON, INC. RAYMOND JAMES & ASSOCIATES LASALLE NATIONAL BANK NIKE SECURITIES Interest Rates Price Net Interest True Interest f Cost Rate 5.10% 1996-2002 5.20% 2003 5.30% 2004 5.40% 2005 5.50% 2006 5.60% 2007 5.70% 2008 5.80% 2009 6.00% 2010-2011 $3,463.162.40 $1.585,477.60 5.00% 1996-2000 5.10% 2001-2002 5.25% 2003 5.35% 2004 5.45% 2005 5.60% 2006 5.75% 2007 5,85% 2008 5.95% 2009 6.00% 2010-2011 $3,453,758.95. $1.606,176.88 4.875% 1996 4.90% 1997-1999 5.00% 2000 5.10% 2001 5.20% 2002 5.30% 2003 5.40% 2004 5.50% 2005 5.60% 2006 5.70% 2007 5.80% 2008 5.90% 2009 6.00% 2010-2011 $3,449,585.25 $1,606,590.58 4.75% 1996 4.90% 1997 5.00% 1998-2000 5.10% 2001 5.20% 2002 5.30% 2003 5.40% 2004 5.50% 2005 5.60% 2006 5.70% 2007 5.80% 2008 5..90% 2009 6.00% 2010-2011 $3,449,616.60 $1,607,311.73 5.62950/_ 5.7086% 5.7139% e 5.7166% (Continued) e Interest Net Interest True Interest Bidder Rates Price Cost Rate eCLA YTON BROWN & ASSOCIATES, 4.50% 1996 $3,450,040.05 $1,615,337.45 5.7351% INCORPORATED 4.60% 1997 4.625% 1998 4.80% 1999 5.00% 2000 5.125% 2001 5.30% 2002 5.40% 2003 5.50% 2004 5.625% 2005 5.70% 2006 5.80% 2007 5.90% 2008-2009 6.00% 2010 6.125% 2011 FIRSTAR BANK MilWAUKEE, N.A. 4.65% 1996-1998 $3,449,612.65 $1,615,529.85 5.7391 % OPPENHEIMER & CO., INC. 4.85% 1999 5.10% 2000 5.20% 2001 5.25% 2002 5.35% 2003 5.45% 2004 5.55% 2005 5.65% 2006 e 5.75% 2007 5.85% 2008 5.95% 2009 6.05% 2010 6.10% 2011 ---------------------------------------------------------------------------------------------------------------------------------------------- These Bonds are being reoffered at par. BBI: 6.14% Average Maturity: 8.06 Years e ~~ SPRINGSTED 120 South Sixth Street SUite 2507 Minneapolis, MN 55402-1800 (612) 333-9177 Fax: (612) 349-5230 PUBLIC FINANCE ADVISORS . Home Office 85 East Seventh Place SUite 100 Saint Paul. MN 55101-2143 (612) 223-3000 Fax: (612) 223-3002 16655 West Bluemound Road SUite 290 Brookfield, WI 53005-5935 (414) 782-8222 Fax: (414) 782-2904 6800 College Boulevard SUite 600 Overland Park, KS 66211-1533 (913) 345-8062 Fax: (913) 345-1770 $1,280,000 CITY OF ELK RIVER, MINNESOTA GENERAL OBLIGATION SEWER REVENUE BONDS, SERIES 1994B 1850 K Street NW SUite 215 Washington. DC 20006-2200 (202) 466-3344 Fax: (202) 223-1362 AWARD: CRONIN & COMPANY, INCORPORATED SMITH BARNEY SHEARSON PARK INVESTMENT CORPORATION EDWARD D. JONES & COMPANY fiALE: May 23, 1994 Moody's Rating: Aaa Standard & Poor's Rating: A.AA Capital Guaranty Insured Bidder Interest Rates Price Net Interest True Interest Cost Rate CRONIN & COMPANY, INCORPORATED SMITH BARNEY SHEARSON PARK INVESTMENT CORPORATION EDWARD D. JONES & COMPANY 5.40% 1996-2005 5.50% 2006 5.60% 2007 5.70% 2008 5.80% 2009 $1,265,603.20 $651,428.47 5.6975% PIPER JAFFRAY INC. 4.30% 1996 4.60% 1997 4.80% 1998 5.00% 1999 5.10% 2000 5.20% 2001 5.30% 2002 5.40% 2003 5.50% 2004 5.60% 2005 5.70% 2006 5.80% 2007 5.90% 2008 6.00% 2009 $1,264,640.00 $658,983.33 5.7458% e (Continued) Bidder Net Interest True Interest . Cost Rate FBS INVESTMENT SERVICES, INC. DAIN BOSWORTH INCORPORATED DOUGHERTY, DAWKINS, STRAND & BIGELOW, INCORPORATED MILLER & SCHROEDER FINANCIAL, INC. National City Bank - In Association With - NORWEST INVESTMENT SERVICES, INC. MERRILL LYNCH & CO. American National Bank Saint Paul Miller, Johnson & Kuehn, Inc. PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INCORPORATED PRUDENTIAL SECURITIES, INC. ROBERT W. BAIRD & COMPANY, INCORPORATED Interest Rates 4.25% 1996 4.50% 1997 4.75% 1998 4.95% 1999 5.10% 2000 5.25% 2001 5.40% 2002 5.50% 2003 5;60% 2004 5.70% 2005 5.80% 2006 5.90% 2007 6.00% 2008 6.10% 2009 Price $1,263,360.00 $669,574.17 5.8387%_ $1,263,360.00 $673,305.83 4.40% 1996 4.60% 1997 4.80% 1998 4.90% 1999 5.00% 2000 5.10% 2001 5.20% 2002 5.30% 2003 5.40% 2004 5.50% 2005 5.65% 2006 5.80% 2007 5.90% 2008 7.00% 2009 5.8567% e ---.....---------------~-----------_._----_..._---------------...----...-........--------------------------------.---------------... REOFFERING SCHEDULE OF THE PURCHASER Ram 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.50% 5.60% 5.70% 5.80% ~ ~ 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4.20% 4.40% 4.60% 4.80% 4.90% 5.00% 5.10% 5.20% 5.30% Par Par Par Par Par BBI: 6.14%_ Average Maturity: 8.98 Years ~ SPRINGSTED 120 South Sixth Street SUite 2507 Minneapolis. MN 55402-1800 (612) 333-9177 Fax: (612) 349-5230 PUBLIC FINANCE ADVISORS . Home Office 85 East Seventh Place SUite 100 Saint Paul. MN 55101-2143 (612) 223-3000 Fax: (612) 223-3002 16655 West Bluemound Road SUite 290 Brookfield. WI 53005-5935 (414) 782-8222 Fax: (414) 782-2904 6800 College Boulevard SUite 600 Overland Park, KS 66211-1533 (913) 345-8062 Fax: (913) 345-1770 $1,080,000 CITY OF ELK RIVER, MINNESOTA GENERAL OBLIGATION STORM SEWER REVENUE BONDS, SERIES 1994C 1850 K Street NW SUite 215 Washington, DC 20006-2200 (202) 466-3344 Fax: (202) 223-1362 AWARD: CRONIN & COMPANY, INCORPORATED SMITH BARNEY SHEARSON PARK INVESTMENT CORPORATION EDWARD D. JONES & COMPANY _SALE: May 23, 1994 Moody's Rating: Aaa Standard & Poor's Rating: AAA Capital Guaranty Insured Bidder Interest Rates Price Net Interest True Interest Cost Rate CRONIN & COMPANY, INCORPORATED SMITH BARNEY SHEARSON PARK INVESTMENT CORPORATION EDWARD D. JONES & COMPANY 5.40% 1995-2005 5.50% 2006 5.60% 2007 5.70% 2008 5.80% 2009 $1,067,921.50 $589,516.00 5.6756% PIPER JAFFRAY INC. 4.25% 1995 4.40% 1996 4.70% 1997 4.90% 1998 5.10% 1999-2000 5.20% 2001 5.30% 2002 5.40% 2003 5.50% 2004 5.60% 2005 5.70% 2006 5.80% 2007 5.90% 2008 6.00% 2009 $1,067,040.00 $595,706.25 5.7167% e (Continued) ~ Bidder Net Interest True Interest ~ Cost Rate FBS INVESTMENT SERVICES, INC. DAIN BOSWORTH INCORPORATED DOUGHERTY, DAWKINS, STRAND & BIGELOW, INCORPORATED MILLER & SCHROEDER FINANCIAL, INC. National City Bank - In Association With - NORWEST INVESTMENT SERVICES, INC. MERRILL LYNCH & CO. American National Bank Saint Paul Miller, Johnson & Kuehn, Inc. BERNARDI SECURITIES INC. Interest Rates Price $1,065,960.00 $604,030.00 5.79470/'41 4.10% 1995 4.25% 1996 4.50% 1997 4.75% 1998 4.95% 1999 5.10% 2000 5.25% 2001 5.40% 2002 5.50% 2003 5.60% 2004 5.70% 2005 5.80% 2006 5.90% 2007 6.00% 2008 6.10% 2009 $1,065,960.72 $616,054.28 5.45% 1995 5.50% 1996 5.55% 1997-2001 5.60% 2002-2004 5.70% 2005 5.80% 2006 5.90% 2007 6.00% 2008-2009 REOFFERING SCHEDULE OF THE PURCHASER ~ ~ 5.9340% ------------------------------------------------------------------------------------------------------------------. ~ ~ 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.40% 5.50% 5.60% 5.70% 5.80% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4.00% 4.20% 4.40% 4.60% 4.80% 4.90% 5.00% 5.10% 5.20% 5.30% Par Par Par Par Par BBI: 6.14% Average Maturity: 9.65 Years e