7.6. SR 06-27-1994
rei ~'\)
( )j
fli<
ITEM 7.6.
MEMORANDUM
TO:
MAYOR & CITY COUNCIL
LORI JOHNSON, FINANCE DIRECTOR "'~
FROM:
DATE:
JUNE 23, 1994
SUBJECT: RESOLUTION PROVIDING FOR THE
ISSUANCE AND SALE OF THE CITY'S
$255,000 GENERAL OBLIGATION TAX
INCREMENT BONDS, SERIES 1994D
.
Adoption of the attached bond resolution is the final action needed to
complete the financing for the library expansion. The resolution awards the
sale of $255,000 G.O. Tax Increment Bonds. As you will recall, the City is
negotiating this bond and it is anticipated that Edward D. Jones will
purchase the bond. The exact interest rate is not yet known. That
information will be presented verbally to the Council on Monday.
The bond resolution indicates that a minimum of $51,000 would be available
from Tax Increment Districts No.1 and No.3 for debt service. However, it is
the City's intent that the bonds be repaid through the landfill surcharge
dedicated to the library and an annual appropriation in the library budget
that was previously set aside for future capital outlay. The bond resolution
also indicates that tax levies may be required in certain years. These levies
will all be canceled providing that the landfill surcharge and library budget
allow for sufficient funds for the debt service payment.
RECOMMENDATION
The Council is asked to approve the attached resolution awarding the sale of
the City's $255,000 General Obligation Tax Increment Bonds, Series 1994D.
-
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 June 27,
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 $255,000 General Obligation Tax Increment Bonds,
Series 19940.
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:
266467.1
iii;
e
e
-
then introduced the
following Resolution and moved its adoption:
RESOLUTION NO.
RESOLUTION PROVIDING FOR THE
ISSUANCE AND SALE OF THE CITY'S
$255,000 GENERAL OBLIGATION TAX INCREMENT
BONDS, SERIES 19940
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 City has undertaken or will undertake
certain public improvements (the "Improvements") within the
City's Development District No. 1 pursuant to and in full
conformity with Minnesota Statutes, sections 469.124 through
469.134 and 469.174 through 469.179; and said improvements
are described in the Council's resolution of June 20, 1994,
relating to the Bonds hereinafter defined.
(b) That it would be advantageous for the City to
issue its $255,000 General Obligation Tax Increment Bonds,
Series 19940 (the "Bonds"), pursuant to Minnesota Statutes,
section 469.178, Subdivision 2, and Chapter 475, to provide
financing for the Improvements.
2. AcceDtance of Offer. The offer of
(the "Purchaser") to purchase the City's $255,000
General Obligation Tax Increment Bonds, Series 19940 (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 Tax
Increment Bonds, Series 19940," shall be dated July 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:
266467.1
2
Years Amounts Years Amounts
. 1996 $ 10,000 2002 $ 20,000
1997 15,000 2003 25,000
1998 20,000 2004 25,000
1999 20,000 2005 25,000
2000 20,000 2006 25,000
2001 20,000 2007 30,000
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
e 1996 % 2002 %
1997 2003
1998 2004
1999 2005
2000 2006
2001 2007
6. RedemDtion. 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
redemption shall be given to the paying agent and to each
affected registered owner of the Bonds.
e
266467.1
3
.
.
.
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:
266467.1
4
.
e
e
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
R-
$
GENERAL OBLIGATION TAX INCREMENT
BOND, SERIES 1994D
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
266467.1
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.
266467.1
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
Is/ 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 siqnaturel
City Clerk
City of Elk River, Minnesota
266467.1
7
e
e
e
Redemption. 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. Bonqs 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 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: Purpose: General Obligation. This Bond is
one of an issue in the total principal amount of $255,000, 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
266467.1
8
.
e
e
Minnesota and pursuant to a resolution adopced by the City
Council on June 27, 1994 (the "Resolution"), for the purpose of
financing certain public development costs within Development
District No. 1 within the City. This Bond constitutes a general
obligation of the City, and to provide mone~s 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: 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 conpitions 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 simil~r 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 w~th 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 nam~ 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 sh~ll be overdue, and
neither the City nor the Bond Registrar shall be affected by
notice to the contrary.
266467.1
9
.
e
e
Authentication. This Bond shall not be valid or become
obligatory for any purpose or be entitled tp 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 a~ 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.
266467.1
10
.
e
e
ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the within Bond and does
hereby irrevocably constitute and appoint as
attorney to transfer the Bond on the books kept for the
registration thereof, with full power of substitution in the
premises.
Dated:
Notice:
The assignor's signature to this
assignment must cQrrespond with the name
as it appears upo~ 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 memb~rship 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 oint account.)
266467.1
11
e
e
e
9. Execution: TemDorarv Bonds. The Bonds shall be
executed on behalf of the City by the sign~tures 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 pease 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 the~eof, 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 July 1, 1994. The Certificate of Authentication so executed
on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this Resiolution.
The City Clerk shall obtain a co~y of the proposed
approving legal opinion of bond counsel, Biriggs and Morgan,
Professional Association, st. Paul, Minnesiota, which shall be
complete except as to dating thereof, shall cause such opinion to
be filed in the offices of the City, and sihall 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.
266467.1
12
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
266467.1
13
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 UDon 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. Deliverv: 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 "$255,000 General
Obligation Tax Increment Bonds, Series 1994D Fund" (the "Fund")
to be held and administered by the City Finance Director 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
266467.1
14
.
specified until all of the Bonds 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 amounts to be deposited into the Debt Service Account
pursuant to (ii) below. From the Capital Account there
shall be paid all costs and expenses of the Improvements,
including the cost of issuance of the Bonds and the cost of
any construction contracts heretofore let 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 the tax increments
described in (ii) below.
(ii) Debt Service Account. There are hereby
irrevocably appropriated and pledged to, and there shall be
credited to the Debt Service Account: (a) all accrued
interest received upon delivery of the Bonds, any unused
allowance for discount bidding, and capitalized interest in
the amount of $ , all to be used to pay the
interest first coming due on the Bonds; (b) the "Available
Tax Increments" (as hereinafter defined), provided that the
amounts thereof so pledged to the paYment of the Bonds shall
not exceed amounts necessary, when combined with other funds
available for such purposes in the Debt Service Account, to
pay the principal of and interest on the Bonds, when due;
(c) all collections of any taxes which may hereafter be
levied for the paYment of the principal of and interest on
the Bonds; (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
project; (e) all investment 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 on the
Bonds.
As used in this paragraph 16(ii), the term "Available
Tax Increments" means those tax increments that are derived
by the City from its Tax Increment Financing District Nos. 1
and 3, all within the City's Development District No.1,
subject, however, to the following stipulations: (1) in
e
266467.1
15
.
.
e
discharging its obligations with respect to the application
of any of such tax increments pursuant to this Resolution,
the City expressly reserves the right to pledge or otherwise
dedicate the Available Tax Increments to purposes other than
the discharge of the obligations described herein upon a
finding by the City that the estimated Available Tax
Increments then remaining will be sufficient from year to
year for such purposes; and (2) the pledge of Available Tax
Increments made in this Resolution is in all cases sUbject
and junior in lien to all unpaid pledges or other
outstanding commitments heretofore made by the City with
respect to the expenditure or dedication of such tax
increments. The Council hereby finds that the Available Tax
Increments will be available, if and as needed to pay debt
service on the Bonds, in the aggregate amount not less than
20% of the cost of the Improvements.
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 to be "federally guaranteed"
within the meaning of section 149(b) of the federal Internal
Revenue Code of 1986, as amended (the "Code").
17. Tax Levies. To provide moneys for paYment of the
principal of and interest on the Bonds there is hereby levied
upon all of the taxable property in the City a direct annual ad
valorem tax which shall be spread upon the tax rolls and
266467.1
16
e
e
e
collected with and as part of other general property taxes in the
City for the years and in the amounts as follows:
Year of Tax
Levv
Year of Tax
Collection
Amount
The tax levies shall be irrepealable so long as any of the
Bonds are outstanding and unpaid, provided that the City reserves
the right and power to reduce the levies in the manner and to the
extent permitted by Minnesota statutes, Section 475.61,
Subdivision 3.
18. 105% Debt Service Coveraae. It is hereby
determined and reasonably anticipated that the estimated
collections of tax increments 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. 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 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.
20. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
266467.1
17
e
e
e
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, incl~ding any heretofore
furnished, shall be deemed representations of the City as to the
facts recited therein.
21. Neaative 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.
22. Tax-Exem9t 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. Desianation of Qualified Tax-Exempt 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
266467.1
18
e
e
e
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.
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. 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"), 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.
266467.1
19
e
e
e
26. 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.
27. Headinas. Headings in this Resolution are
included for convenience of reference only and shall not limit or
define the meaning of any provision hereof.
Council.
Adopted on June 27, 1994, by the Elk River City
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.
266467.1
20
e
STATE OF MINNESOTA
CITY OF ELK RIVER
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 public sale of the City's $255,000
General Obligation Tax Increment Bonds, Series 1994D.
WITNESS my hand as such City Clerk and the official
e
seal of the City this ____ day of
, 1994.
City Clerk
(SEAL)
e
266467.1
.
.
e
STATE OF MINNESOTA
CITY OF ELK RIVER
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 public sale of the City's $255,000
General Obligation Tax Increment Bonds, Series 1994D.
WITNESS my hand as such City Clerk and the official
seal of the City this ____ day of
, 1994.
City Clerk
(SEAL)
266467.1