98-131 RESCouncilmember Farber then introduced the following Resolution and moved its
adoption:
RESOLUTION NO. 98-131
RESOLUTION PROVIDING FOR THE
ISSUANCE AND SALE OF THE CITY'S
$820,000 GENERAL OBLIGATION WATER REVENUE
BONDS, SERIES 1998B
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 improvements (the "Improvements") to the City's municipal water
system described in the Council's resolution of November 9, 1998, 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 the applicable provisions of 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,
Chapter 475 and Section 444.075, to provide financing for the Improvements.
(c) The Council desires that the Bonds be issued initially in "Book Entry Only
Form" (as hereinafter described).
2. Acceptance of Offer; Book Entry Bonds.
(a) The offer of (the "Purchaser") to
purchase the City's $820,000 General Obligation Water Revenue Bonds, Series 1998B
(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.
(b) Book Entry Only System. The Depository Trust Company, a limited purpose
trust company organized under the laws of the State of New York, or any of its
successors to its functions hereunder (the "Depository"), will act as securities depository
for the Bonds, and to this end:
(i) The Bonds shall be initially issued and, so long as they remain in book
entry form only (the "Book Entry Only Period"), shall at all times be in the form
998543.1
2
of a separate single fully registered Bond for each maturity of the Bonds; and for
purposes of complying with this requirement under paragraphs 6 and 11 of this
Resolution, authorized denominations for each maturity of Bonds shall be deemed
to be limited during the Book Entry Only Period to the outstanding principal
amount of that maturity. While in such book entry form, the Bonds are
sometimes hereinafter referred to as being in "Book Entry Only Form."
(ii) Upon initial issuance, ownership of the Bonds shall be registered in a
bond register maintained'by the Bond Registrar appointed pursuant to paragraph 7
of this Resolution in the name of CEDE & CO., as the nominee (it or any nominee
of the existing or a successor Depository, the "Nominee").
(iii) With respect to the Bonds, neither the City nor the Bond Registrar
shall have any responsibility or obligation to any broker, dealer, bank, or any
other financial institution for which the Depository holds Bonds as securities
depository (the "Participant") or to the person for which a Participant hold, an
interest in the Bonds shown on the books and records of the Participant (the
"Beneficial Owner"). Without limiting the immediately preceding sentence,
neither the City, nor the Bond Registrar, shall have any such responsibility or
obligation with respect to (A) the accuracy of the records of the Depository, the
Nominee or any Participant with respect to any ownership interest in the Bonds,
or (B) the delivery to any Participant, any Beneficial Owner or any other person,
other than the Depository, of any notice with respect to the Bonds, including any
notice of redemption, or (C) the payment to any Participant, any Beneficial Owner
or any other person, other than the Depository, of any amount with respect to the
principal of or premium, if any, or interest on the Bonds, or (D) the consent given
or other action taken by the Depository as the registered owner of any Bonds (the
"Holder"). For purposes of securing the vote or consent of any Holder under this
Resolution, the City may, however, rely upon an omnibus proxy under which the
Depository assigns its consenting or voting rights to certain Participants to whose
accounts the Bonds are credited on the record date identified in a listing attached
to the omnibus proxy.
(iv) The City and the Bond Registrar may treat, as an.d deem the
Depository to be the absolute owner of the Bonds for the purpose of payment of
the principal of and premium, if any, and interest on the Bonds, for the purpose of
giving notices of redemption and ether matters with respect to the Bonds, for the
purpose of obtaining any consent or other action to be taken by Holders for the
purpose of registering transfers with respect to such Bonds, and for all purpose
whatsoever. The Bond Registrar, as paying agent hereunder, shall pay all
principal of and premium, if any, and interest on the Bonds only to or upon the
Holder or the Holders of the Bonds, as shown on the Bond Registrar's bond
register, and all such payments shall be valid and effective to fully satisfy and
discharge the City's obligations with respect to the principal of and premium, if
any, and interest on the Bonds to the extent of the sum or sums so paid.
998543.1
3
(v) Upon delivery by the Depository to the Bond Registrar of written
notice to the effect that the Depository has determined to substitute a new
Nominee in place of the existing Nominee, and subject to the transfer provisions
in paragraph 11 hereof, references to the Nominee hereunder shall refer to such
new Nominee.
(vi) So long as any Bond is registered in the name of a Nominee, all
payments with respect to the principal of and premium, if any, and interest on
such Bond and all notices with respect to such Bond shall be made and given,
respectively, by the Bond Registrar or the City, as the case may be, to the
Depository as provided in the Blanket Letter of Representations required by the
Depository as a condition to its acting as book-entry Depository for the Bonds
(said Blanket Letter of Representations, together with any replacement thereof or
amendment or substitute thereto, including any standard procedures or policies
referenced therein or applicable thereto respecting the procedures and other
matters relating to the Depository's role as book-entry Depository for the Bonds,
are collectively hereinafter referred to as the "Blanket Letter of Representations").
(vii) All transfers of beneficial ownership interests in each Bond issued in
book-entry form shall be limited in principal amount to authorized denominations
and shall be effected by the Depository with the Participants for recording and
transferring the ownership of beneficial interests in such Bonds.
(viii) In connection with any notice or other communication to be
provided to the Holders pursuant to this Resolution by the City or the Bond
Registrar with respect to any consent or other action to be taken by Holders, the
Depository shall consider the date of receipt of notice requesting such consent or
other action as the record date for such consent or other action; provided, that the
City or the Bond Registrar may establish a special record date for such consent or
other action. The City or the Bond Registrar shall, to the extent possible, give the
Depository notice of such special record date not less than 15 calendar days in
advance thereof to the extent possible.
(ix) Any successor Bond Registrar, in its written acc. eptance of its duties
under this Resolution and any paying agency registrar agreement, shall agree to
take any actions necessary from time to time to comply with the requirements of
the Blanket Letter of Representations.
(x) In the case of a partial prepayment of a Bond, the Holder may, in lieu
of surrendering the Bond for a Bond of a lesser denomination as provided in
paragraph 6 hereof, make a notation of the reduction in principal amount on the
panel provided on the Bond stating the amount so redeemed.
998543.1
(c) Termination of Book-Entry Only System. Discontinuance of a particular
Depository's services and termination of the book-entry only system may be effected as
follows:
(i) The Depository may determine to discontinue providing its services
with respect to the Bonds at any time by giving written notice to the City and
discharging its responsibilities with respect thereto under applicable law. The
City may terminate the services of the Depository with respect to the Bonds if the
City determines that the Depository is no longer able to carry out its functions as
securities depository or the continuation of the system of book-entry transfers
through the Depository is not in the best interests of the City.
(ii) Upon termination of the services of the Depository as provided in the
preceding paragraph, and if no substitute securities depository is willing to
undertake the functions of the Depository hereunder can be found which, in the
opinion of the City, is willing and able to assume such functions upon reasonable
or customary terms, or if the City determines that it is in the best interests of the
City that the Beneficial Owners be issued certificates for the Bonds, the Bonds
shall no longer be registered in the name of the Nominee, but may be registered in
whatever name or names the Holder of the Bonds shall designate at that time, in
accordance with paragraph 11 hereof. To the extent that the Beneficial Owners
are designated as the transferee by the Holders, in accordance with paragraph 11
hereof, the Bonds will be delivered to the Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit or restrict the provisions
of paragraph 11 hereof.
(d) Blanket Letter of Representations. The City's execution of the City the
Blanket Letter of Representations in substantially the form on file in the offices of the
City has heretofore been authorized and is hereby ratified. The provisions in the Blanket
Letter of Representations are incorporated herein by reference and made fully a part of
this Resolution to the same extent as if set forth in full herein, and if and to the extent that
any provisions of this Resolution are inconsistent or in conflict with the provisions of the
Blanket Letter of Representations, the provisions in the Blanket Leger of Representations
shall control.
3. Title; Original Issue Date; Denominations; Maturities. The Bonds shall be
titled "General Obligation Water Revenue Bonds, Series 1998B," shall be dated December 1,
1998, 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
998543.1 5
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
2000 $35,000 2008
2001 40,000 2009
2002 45,000 2010
2003 45,000 2011
2004 50,000 2012
2005 50,000 2013
2006 50,000 2014
2007 55,000
$55,000
60,000
60,000
65.000
65,000
70.000
75.000
As may be requested by the Purchaser, one or more term Bonds may be issued having
mandatory sinking fund redemption and final maturity amounts conforming to the foregoing
principal repayment schedule, and corresponding additions may be made to the provisions of the
applicable Bond (s).
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 August 1, 1999,
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
2000 % 2008
2001 2009
2002 2010
2003 2011
2004 2012
2005 2013
2006 2014
2007
6. Redemption. All Bonds maturing after February 1, 2007, 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
998543.1 6
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.
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 b~
redeemed as shall equal $5,000 for each number assigned to it and so selected. Ifa 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 Registrar. , 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.owne, rs) 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:
998543.1
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
R- $
GENERAL OBLIGATION WATER REVENUE
BOND, SERIES 1998B
INTEREST MATURITY
RATE DATE
DATE OF
ORIGINAL ISSUE
CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
The City of Elk River, Sherbume 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 August 1, 1999, 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 w. ill 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 "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.
998543.1 8
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, Sherbume 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 execmed
manually by the Bond Registrar, acting as the City's duly appointed authenticating agent for the
Bonds.
998543.t 9
Date of Registration: Registrable by:
Payable at:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
CITY OF ELK RIVER,
SHERBURNE COUNTY,
MINNESOTA
Mayor
Bond Registrar
City Administrator
By.
Authorized Signature
998543.1
10
Redemption. All Bonds of this issue maturing after February 1, 2007, 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 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 $820,000, all of like date of original issue and tenor, except as to registration
number, maturity, interest rate, denomination and redemption privileg.e, which Bond has been
issued pursuant to and in full conformity with the Constitution and laws of the State of
Minnesota and pursuant to a resolution adopted by the City Council on November 30, 1998 (the
"Resolution"), for the purpose of providing money to finance certain costs of improvements to
the City's municipal water 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. Each capitalized term which is used but not
otherwise defined in this Bond shall have the meaning given to that term in the Resolution.
[For Bonds in Book Entry Only Form, the following paragraph shall be added, and this
Bond form (1) may be rearranged so that the signature blocks hereof appear at the end of
998543.1
11
the main text of this form or (2) may otherwise be amended to conform to book entry
requirements and the Blanket Letter of Representations.]
Book Entry_ Only Form; Blanket Letter of Representations. Pursuant to the
Resolution, the Bonds may be issued in Book Entry Only Form, and during any period in which
Bonds are in such form, the provisions applicable to the Bonds pursuant to the Blanket Letter of
Representations shall apply, notwithstanding any contrary or inconsistent provision herein or in
the Resolution.
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 pu. rpose 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.
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.
No Qualification of Bonds as Tax-Exempt Obligations. The Bonds have not 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.
998543.1 12
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
.IT TEN - as joint tenants with right of survivorship
and not as tenants in common
UTMA - as custodian for
(Cust)
under the
(State)
(Minor)
Uniform Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
998543.1 13
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:
Signature Guaranteed:
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(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.)
998543.1 14
9. Execution; Temporary 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 December 1, 1998. The Certificate of Authentication so executed on each Bond
shall be conclusive evidence that it has been authenticated and delivered under this Resolution.
11. Registration; 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
998543.1 15
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 evidencih'g 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.
Transfers shall also be subject to reasonable regulations 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. Rights Upon Transfer or Exchange. 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 Registered 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 xvhether
998543.1
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 "$820,000 General Obligation Water Revenue Bonds, Series 1998B 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 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) Capital 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 water system and utility (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 and $ of additional proceeds of the
Bonds, all to be used to pay the interest first coming due thereon; (c) all collections of any 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 water system and utility, 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
998543.1 17
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 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 water system and utility 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 water system and
utility for the payment of other or additional obligations of the City, provided that it has first
been determined that the estimated Net Revenues 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. With respect to all currently outstanding obligations of the
City which are payable from the Net Revenues, the Council hereby determines that the estimated
Net Revenues will be sufficient, in addition to all other sources available for such purposes, for
the payment of the Bonds and all such other obligations.
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 (I) 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 "Sale Proceeds" of the
Bonds (being the "issue price" of the Bonds less accrued interest). 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. 105% Debt Service Coverage. It is hereby determined and reasonably
anticipated that the estimated collections of 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. The City Clerk is directed to file a certified copy
of this Resolution with the County Auditor of Sherburne County and to obtain the certificate of
said official required by Minnesota Statutes, Section 475.63.
18. General Obligation Pledge. 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
998543.1 18
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 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 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 arrangements for the cost of the Improvements, in such a manner
as (or to take any action or permit any other circumstance to exist or any action to be taken, the
effect to which would be) to cause the Bonds to be "private activity bonds" within the meaning
of Sections 103 and 141 through 150 of the Code. In particular, but without limitation, the City
covenants to forebear the implementation, effectuation or enforcement of any and all contracts or
other agreements respecting the Improvements or any property benefitted thereby or assessed
with respect thereto, which it may now or in the future have with developers, contractors, owners
or any other person or parties to the extent that such implementation, effectuation or enforcement
~vould (individually or in the aggregate) cause the Bonds to become such "private activity
bonds," and to said limited extent the City would and hereby does (solely for the benefit of the
owners of the Bonds) disavow any and all such provisions, entitlements and enforcement which
would or could become so offending.
21. Tax-Exempt Status of the Bonds; Rebate. The .City s. hall 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 the Bonds (together with other obligations reasonably expected to
be issued and outstanding at one time in this calendar year) exceed the small-issuer exception
amount of $5,000,000. For purposes of qualifying for the small issuer exception to the federal
arbitrage rebate requirements, the City hereby finds, determines and declares that (1) the Bonds
are issued by a governmental unit with general taxing powers, (2) no Bond is a private activity
bond, (3) ninety-five percent (95%) or more of the net proceeds of the Bonds are to be used for
local governmental activities of the City (or of a governmental unit the jurisdiction of which is
99ss43.~ 19
entirely within the jurisdiction of the City), and (4) the aggregate face amount of all tax-exempt
obligations (other than private activity bonds) issued by the City (and all entities subordinate to,
or treated as one issuer with, the City) during the 1998 calendar year is not reasonably expected
to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of'the Code.
22. No Designation of Bonds as Qualified Tax-Exempt Obligations. The City
is not designating the Bonds as "qualified tax-exempt obligations" within the meaning of Section
265(b)(3) of the Code.
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 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 Regulations. 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 1.150-2. 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 (and the City will also make the written "reimbursement allocation"
required by the Reimbursement Regulations); otherwise, the proceeds of the Bonds are to be
used for initial payment, and not for such reimbursement, of costs of the Improvements.
25. Continuing Disclosure Undertaking. With respect to continuing disclosure
under Rule 15c2-12(b)(5) (the "Rule"), on the date of actual issuance and delivery of the Bonds,
the City will execute and deliver a Continuing Disclosure Undertaking (the "Undertaking")
whereunder the City will covenant to provide, or cause to be provided, annual financial
information, including audited financial statements of the City, and notices of certain material
events, as specified in the Undertaking. The proposed form of the Undertaking which has been
submitted to the City for the Council's consideration is hereby approved, and the officers of the
City are hereby authorized to execute and deliver that Undertaking in the proposed form or in
such final form thereof reflecting such modifications thereof as are consistent with the Rule,
requested by the original purchaser of the Bonds and acceptable to the City officials who shall
998543.1 20
execute the Undertaking (which consent shall be conclusively evidenced by their execution and
delivery thereof). The Undertaking, as so executed and delivered by the City, shall be as much a
part of this Resolution as if set forth in full herein and shall be for the benefit of the owners from
time to time of the Bonds.
26. 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.
27. 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 November 30, 1998, by the Elk River City Council.
The motion for the adoption of the foregoing resolution was duly seconded by -
Councilmember Thomp s on and upon a vote being taken thereon, the following voted in
favor thereof:
Mayor Duitsman
Councilmembers: Farber, Thompson, Dietz
and the following voted against the same:
None
Whereupon said resolution was declared duly passed and adopted.
998543.1 21
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
sale of the City's $820,000 General Obligation Water Revenue Bonds, Series 1998B. -
WITNESS my hand as such City Clerk and the official seal of the City this 30th
day of November ., 1998.
City Clerk
(SEAL)
998543.1