00-091 RESCITY OF ELK RIVER
RESOLUTION NO. 00-91
RESOLUTION ACCEPTING OFFER TO PURCHASE THE
CITY'S $800,000 GENERAL OBLIGATION TAX INCREMENT BONDS,
SERIES 2000A AND PROVIDING FOR THEIR ISSUANCE
WHEREAS, it is hereby determined that the City should issue its $800,000 General
Obligation Tax Increment Bonds, Series 2000A, (the "Bonds"), to defray a portion of certain public
improvements (the "Improvements" or "Project") to be incurred within and for the benefit of the Elk
River Economic Development Authority's (the "EDA") Tax Increment Financing District No. 19
pursuant to Minnesota Statutes, Chapters 469 and 475, as follows:
Estimated Total Project Costs
Allowance for Discount
Costs of Issuance
Capitalized Interest
$ 725,000
11,900
14,550
48,550
Net Bond Issue
$ 800,000
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River
as follows:
Acceptance of Offer. The offer of
(the "Purchaser"), to purchase the City's $800,000 General Obligation Tax Increment
Bonds, Series 2000A (the "Bonds", or individually a "Bond"), 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.
2. Title; Original Issue Date; Maturities; Denominations.
(a)
Title and Maturities. The Bonds shall be titled "General Obligation Tax
Increment Bonds, Series 2000A," shall be dated November 1, 2000, 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:
1217682.1
(b)
Year Amount Year Amount
2003 $25,000 2010 $65,000
2004 50,000 2011 70,000
2005 50,000 2012 70,000
2006 55,000 2013 75,000
2007 55,000 2014 80,000
2008 60,000 2015 80,000
2009 65,000
As may be permitted in the offering of the Bonds and 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).
Book Entry Only System. The Depository Trust Company, in New York,
New York, pursuant to a certain Blanket Issuer Letter of Representations to
be executed by the City and accepted by said Trust Company (as the same
may be supplemented or superseded, and including all provisions thereof and
rules, procedures or practices referenced therein, the "Letter of
Representations"), 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 of a separate single fully registered Bond for
each maturity of the Bonds; and 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."
Upon initial issuance, ownership of the Bonds shall be registered in
a bond register maintained by the Bond Registrar described in 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 holds an interest in the Bonds shown on the books
1217682.1 2
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 and 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 other
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.
(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 applicable to the Bonds, 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
1217682.1 3
(c)
(vii)
be made and given, respectively, by the Bond Registrar or the City,
as the case may be, to the Depository as provided in the Letter of
Representations.
(viii)
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.
(ix)
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.
(x)
Any successor Bond Registrar, in its written acceptance 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 Letter of Representations.
In the case ora partial prepayment of a Bond, the Holder may, in lieu
of surrendering the Bond for a Bond ora lesser denomination, make
a notation of the reduction in principal amount on the panel provided
on the Bond stating the amount so redeemed.
Termination of Book-Entry Only System. Discontinuance of the
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.
1217692.1 4
(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 the applicable provisions
of the Bonds and this Resolution. To the extent that the Beneficial
Owners are designated as the transferee by the Holders, the Bonds
will be delivered to the Beneficial Owners.
(d)
Letter of Representations. The provisions in the Letter of Representations
(the execution and delivery of which by the City being hereby authorized) 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 or the Bonds are inconsistent or in conflict with
the provisions of the Letter of Representations, the provisions in the Letter
of Representations shall control.
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.
Interest Rates. The Bonds shall bear interest payable semiannually on February 1
and August 1 of each year (each, an "Interest Payment Date"), commencing August
1, 2001, 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
2004 2010
2005 2011
2006 2012
2007 2013
2008 2014
2009 2015
1217682.1 5
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. 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 a 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 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 having
a common maturity date 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 and Bond Registrar duly executed by the
registered owner thereof or his, her or its 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.
Bond Registrar. , in
, , is appointed
to act as bond registrar and transfer agent (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.
1217682.1 6
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:
1217682.1 7
UNITED STATES OF AME~CA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
GENERAL OBLIGATION TAX INCREMENT BOND, SERIES 2000A
INTEREST MATURITY DATE OF
RATE DATE ORIGINAL ISSUE CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
KNOW ALL BY THESE PRESENTS that the City of Elk River, Sherburne County,
Minnesota (the "City"), acknowledges that it is indebted and, for value received, hereby 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 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, 2001, at the per annum rate of
interest 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 this Bond is payable upon presentation and
surrender hereof at the principal office of , in ,
(the "Bond Registrar"), acting as paying agent, or 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 "Holder" or
"Bondholder") on the registration books of the City maintained by the Bond Registrar and at the
address appearing thereon at the close of business on the fifteenth day of the calendar month next
preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid
shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date and
shall instead be payable to the person who is the Holder hereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment
of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less
than ten days prior to the Special Record Date. The principal of and interest on this Bond are
payable in lawful money of the United States of America.
1217682.1
REFERENCE IS HEI~BY MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL
PURPOSES HAVE TF[E 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
on the date of its actual issuance and delivery to the original purchaser, does not exceed any
constitutional or statutory limitation of indebtedness.
1N 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 manual or facsimile signatures of
its Mayor and its City Administrator; has caused the City's official seal to be 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.
1217682.1 9
Date of Registration:
BOND 1LEGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
Registrable by:
Payable at:
CITY OF ELK RIVER, MINNESOTA
Mayor
Bond Registrar
By.
Authorized Signature
City Administrator
1217682.1 10
ON REVERSE OF BOND
Redemption. All Bonds 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. 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 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 Holder of the Bonds.
Selectio. n 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
having a common maturity date 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 ora denomination of more than $5,000 shall be
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 and Bond
Registrar duly executed by the Holder thereof or the Holde?s attorney duly authorized in writing),
and the City shall execute and the Bond Registrar shall authenticate and deliver to the Holder 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 Holder, 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 $800,000 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 Minnesota and
pursuant to a resolution adopted by the City Council, the governing body of the City, on October 23,
2000 (the "Resolution"), for the purpose of financing certain public development and redevelopment
costs within and for the benefit ora certain tax increment financing district located within the City.
This Bond has been issued in aid of financing a "project," as defined in Minnesota Statutes, Sections
469.174 through 469.178. 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.
1217682.1 11
[For Bonds in Book Entry Only Form, the following paragraph shall be added, and this Bond
form (I) may be rearranged so that the signature blocks hereof appear at the end ofthe main
text of this form or (2) may otherwise be amended to conform to book entry requirements and
the Letter of Representations.]
Book Entry Only Form; 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 Letter of Representations (as defined
in the Resolution) 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 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 Holder in person or by the Holder's
attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation
and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the
Resolution and to reasonable regulations of the City contained in any agreement with the Bond
Registrar. Thereupon the City shall execute, and the Bond Registrar shall authenticate and deliver,
in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but
not registered in blank or to "bearer" or similar designation), of an authorized denomination or
denominations, in aggregate principal amount equal to the principal amount of this Bond, of the
same maturity and bearing interest at the same rate.
· Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection with the transfer or
exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds.
Treatment of Registered Owners. The City and Bond Registrar may treat the person
in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as
herein provided (except as otherwise provided on the reverse side hereof with respect to the Record
Date) and for all other purposes, whether or not this Bond shall be overdue, and 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 b e entitled to any security unless the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
~:~7682.~ 12
Qualified Tax-Exempt Obligations. The Bonds have been designated by the City as
"qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code
of 1986, as amended,
1217682.1 13
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UTMA - as custodian for
(Cust)
under the
(Minor)
Uniform
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
1217682.1 14
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 correspond
with the name as it appears upon the face of the within Bond
in every particular, without alteration or any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust company or 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.)
1217682.1 15
10.
Execution; Temporary Bonds. The Bonds shall be executed on behalf of the City by
the signatures of its Mayor and City Administrator, and the official seal of the City
may be omitted from the Bonds; provided that such signatures may be printed
facsimiles. 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 any 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 may be executed with
photocopied facsimile signatures of the City officers. Such temporary bonds shall,
upon the printing of the definitive bonds and the execution thereof, be exchanged
therefor and canceled.
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
and manually 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 November 1,2000. The Certificate of Authentication so executed
on each Bond shall be conclusive evidence that it has been authenticated and
delivered under this Resolution.
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 prescrib e, 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 of (as provided in paragraph 9) 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
1217682.1 16
11.
12.
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 alike 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 canceled 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.
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.
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.
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 (the "Holder") 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 (15 th) day of the calendar month next 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 Holder thereof as of the Regular Record Date and
1217692.1 17
13.
14.
15.
shall be payable to the person who is the Holder 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 Holders not less than ten
(10) days prior to the Special Record Date.
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 interest (subject to the payment provisions in
paragraph 12 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.
Delivery; Application of Proceeds. The Bonds, when so prepared and executed, as
provided herein, shall be delivered by the City's Director of Management Services
to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be
obliged to see to the proper application thereof.
Fund and Accounts. For the convenience and proper administration of the moneys
to be borrowed and repaid on the Bonds, and to make adequate and specific security
to the Purchaser and registered owners from time to time of the Bonds, there is
hereby created a special fund to be designated the General Obligation Tax Increment
Bonds, Series 2000A, Fund" (the "Fund"), to be administered and maintained 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 be
maintained in the manner herein specified until all of the Bonds and the interest
thereon shall have been fully paid or defeased. There shall be maintained in the Fund
two separate accounts, to be designated the "Project Account" and the "Debt Service
Account," respectively.
(i)
Project Account. To the Project 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 Project 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 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 revenues described in (ii) below.
1217682.1 18
(ii)
Debt Service Account. To the Debt Service Account there are hereby
pledged and irrevocably appropriated and there shall be credited: (1) the
accrued interest on the Bonds paid by the Purchaser on the actual date of
settlement thereof, together with an additional $ of the proceeds
of the Bonds, all of which shall be used for the payment of the interest first
coming due on the Bonds; (2) the "Available Tax Increments" and other
revenues described in the Tax Increment Pledge Agreement described in
paragraph 25 hereof, provided that the amounts thereof so pledged to the
payment of the Bonds shall not exceed the amounts necessary from time to
time, 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; (3) all collections of any ad valorem taxes which may hereafter be
levied for the payment of the Bonds; (4) all investment earnings on funds
held in the Debt Service Account; and (5) any and all other moneys which are
properly available and which are appropriated by the Council to the Debt
Service Account. The foregoing funds are hereby pledged to the Debt
Service Account, but only in such amounts and at such times as may be
necessary, together with other available funds therein (and the same shall be
used solely), to pay the principal of and interest on the Bonds, when due.
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
for an available and reasonable "temporary period" until such proceeds are
needed for the purpose for which the Bonds were issued, and for any
available "minor portion." To this effect, any proceeds of the Bonds and any
sums from time to time held in the Debt Service Account (or any other City
account which will be used to pay principal and interest to become due on the
Bonds) 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 the arbitrage
regulations on such investments after taking into account any applicable
"temporary periods" or "minor portion" made available under the federal
arbitrage regulations. In addition, the proceeds of the Bonds and 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 Internal Revenue Code of 1986, as amended, and regulations, rulings
and decisions thereunder (the "Code").
16.
Coverage Test. It is hereby found and determined that the revenues provided herein
for the payment of the Bonds will be available in amounts sufficient to produce at
1217682.1 19
17.
18.
19.
20.
least five percent (5%) in excess of the amount needed to meet, when due, the
principal and interest payments on the Bonds.
General Obligation Pledge. For the prompt and full payment of the principal and
interest on the Bonds, as the same respectively become due, the full faith and credit
and taxing powers of the City shall be and are hereby irrevocably pledged. If the
balance in the Debt Service Account is ever insufficient to pay all principal and
interest then due on the Bonds, 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. To the extent that it shall ever be necessary to provide
full and timely payment of the debt service on the Bonds, the City shall, pursuant to
the authority therefor described in this paragraph, levy an ad valorem tax upon all
taxable property within the City of Elk River, Minnesota, suff~cient for such
purposes.
Certificate of Registration. The City Clerk is hereby directed to file a certified copy
of this Resolution with the office of the Sherburne County Auditor to obtain the
certificate of said official required by Minnesota Statutes, Section 475.63.
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.
Negative Covenant as to Use of Proceeds and Improvements. The City hereby
covenants not 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 ass essed with respect thereto,
which it may now or in the future have with developers, contractors, owners, lessees,
managers, or any other person or parties to the extent that such implementation,
effectuation or enforcement would (individually or in the aggregate) cause the Bonds
to become such "private activity bonds," and to said limited extent the City would
1217682.1 20
and hereby does (solely for the benefit of the owners of the Bonds) disavow any and
all such provisions, entitlements and enforcements which would or could become so
offending.
21.
Tax-Exempt 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 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, or do not otherwise qualify for available exceptions. 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 entirely within the jurisdiction of the City), and (4) the
aggregate face amount of all tax-exempt bonds (other than private activity bonds)
issued by the City (and all entities subordinate to, or treated as one issuer with, the
City) during the 2000 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.
Designation of Qualified Tax-Exempt Obligations. The City hereby designates the
Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3)
of the Code and hereby states that:
(a) the reasonably anticipated amount of tax-exempt obligations (other
than private activity bonds, treating qualified 501(c)(3)bonds as not being private
activity bonds) which will be issued by the City (and all entities subordinate to, or
treated as one issuer with, the City) during calendar year 2000 is not reasonably
anticipated to exceed $10,000,000; and
(b) not more than $10,000,000 of obligations issued by the City (or any
entity subordinate to, or treated as one issuer with, the City) during calendar year
2000 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.
1217682.1 2 1
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, and any successor regulations as may be applicable. 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.
Tax Increment Pledge Agreement. The Council hereby approves and authorizes the
Mayor and City Administrator to execute that certain Tax Increment Pledge
Agreement, dated as of November 1, 2000, respecting the Bonds. Said Agreement
is between the City and the EDA, and a form thereof has been presented to the
Council for consideration. Said Agreement may be executed with such
modifications, if any, as such officers shall approve, as evidenced by their execution
and delivery thereof.
26.
Continuing Disclosure Undertaking. The Council hereby finds that the Bonds are
exempt from continuing disclosure requirements of Rule 15c2-12 of the Securities
and Exchange Commission, as recently amended and/or supplemented, because the
Bonds are issued in the aggregate principal amount of less than $1,000,000.
Consequently, the City is not covenanting to provide and will not provide annual
1217682.1 22
financial information, notices of certain material events or any other disclosure or
information which would otherwise be required by that Rule.
27.
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.
28.
Headings. Headings in this Resolution are included for convenience of reference
only and are not a part hereof, and shall not limit or define the meaning of any
provision hereof.
Adopted on October 23, 2000, by the Elk River City Council.
1217682.1 23
CITY CLERK'S CERT~ICATE
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
resolution which was duly adopted at a duly called and regularly held meeting of the City Council
of said City held on the date indicated therein with the original thereof on file in my office and I
further certify that the same is a full, true, and correct copy thereof insofar as said minutes relate to
awarding the sale of tax increment bonds of the City.
Councilmember Dietz moved the adoption of the foregoing resolution, and
said motion was duly seconded by Councilmember Motin , and upon vote being
taken thereof, the following Counciimembers voted in favor thereof:
Mayor Klinzing; Councilmembers Dietz, Thompson, Farber & Motin
and the following voted against the same:
None
Whereupon said resolution was declared duly passed.
2000.
WITNESS My hand officially and the official seal of the City this 23 day of_0.g2Cx/lz.m~
City Clerk
City of Elk River, Minnesota
1217682.1