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7.5. SR 03-15-2010Ci Council 7.5t, era. ec~~r~ e~~~ ,~~ r~a,re by ~ldminis~•ation Mach 15, 2010 Tim Simon, Finance DuectOr item sacra ~®n ~v~~~ G.O. Capital Imp~•ovement Bonds, Series 2010A fog the Inte~.•est Cost Savings of Refunding the 2002A and 2002B Bonds, ~v~e~ ~ ct~®~,.,_.~ u A Resolution .A.wa~ding The Sale Gf Appioxinaately x$,000,000 General Gbligation Capital Improvement Plan Bonds, Series 2010A; Fixing Them Foam And Specifications; Directing Theif• Execution And Delivery; Providing For Their Payment; Providing For The Escrowing .~.nd Investment Of The P~•oceeds Thereof; And Providing For The Redemption Gf Bonds Refunded Thezeby. ~clc r®u~dl iscussi~n Can Decembe~• 21, 2009 the City Council held a public hewing on approving a Capital Improvement Plan fo~• refunding the 2002A Public Safety Building} and 2002B City Hall Expansion} bonds, The purpose of these Gene~•al obligation Capital Improvement Pan Bonds, Sexies 2010A will be interest cost savings on the advance ~•efunding of the 2002A and 2002B bonds, As p~•eviously discussed the maximum interest savings would be achieved by having flexibility of when the bonds could be refunded. Historically, bonds are sold on Council days and approved the night of the muting. The City Council is being asl~ed to approve a "parameters" resolution that will allow flexibility of when the bonds can be sold in the competitive market. Currently, Ehle~.•s is looping at March 24, 2010 as the sale date. A pricing comtx~ittee will be established to review and either reject or accept the bonds on the sale date. The pricing committee will consist of the City Administiato~.•, Finance Director, and the Mayor and/or a City Council member designated by the Mayor. The Cou~a.cil will want to consider deciding tonight who they would life on the committee. The Pricing Committee is authorized and dit•ected, with the advice of the City's financial advisor, Ehlers & Associates, Inc,, to ~a} review proposals for• the sale of the Bonds, ~b} award the sale of the Bonds to the prospective purchaser the "Purchaser"} with a proposal conforming to the terms of proposal distributed by the City or reject the sale, Per our Debt Policy "bonds shall not be refunded for savings unless the present value of the savings exceeds 3°/a of the refunded principal and ~Z5°/a of costs of issuance plus underv~riter's discount," A rating call was done on March 11, 2010 at 9;00 a,m, with Standard and Poor's and we expected our bond rating later in the weep. C,~Documcnts and scttings~tallard~~,ncal Settin~s~7'emparary Internet Files~nLKl-{~2()1U11 r~eFimding l~c~nds,dc~c Next Steps: Receive the bond rating the week of Ma~.•ch ~ 5. ® Report back to the Council the results of the sale or rejection of any sales. ~ rf bids are accepted by the pricing committee, the EDA will approve the bond documents at the April ~ 2 EDA meeting and the Utilities Commission will approve the changes to the sublease of the City Hall space at its April meeting, inanca~ ~r~a~c It is anticipated that refunding the bonds will yield at a minimum a net present value savings of aver 3%, This should result in approximately X20,000 to X25,000 pet• year savings in debt service costs over the next ~ 3 yea~.•s. t~achr~~ns ® Pa.•e~Sale Report ® A Resolution Awarding The Sale 0f Approximately $8,000,000 General Gbligation Capital Improvement Plan Bonds, Series 20~DA; Fixing Them Form And Specifications; Directing Theii.• Execution And Delivery; P~,•oviding For Theit• Payment; Providing For The Escrowing And investment Qf The Proceeds Thereof; And Providing For The Redemption ~f Bonds Refunded Thereby. C,~Dr~cuments and Settings~tallard~i,~ca! Settings~Temporary Internet I{i~es~OLI~I+~2U1011 refunding I~~nc~s,dac ~.„ „ ' ~~...,,.,,.~,,,..~,..,w.,~..,,,~.,~,,,,,,,,,,,w,,,,,.,,,,,,~ .............~,~,.,~,,.~~.,W,,,,,.,,,n.,...~.w.,~,~n,.~.,.m,..~„~,~„~.,,~„~~.,,,,,,,,,.,~.,,~..,,,,,,,,~...,.,..~.,..~,~..,.,,,,.. ~„,~.,,,,m,,,M.~,~..,~..~,,,~,~~,~,,,,,,,,,.,..,....,~~n,.,.,.,.,~,,,,.,,,,.~,.....,,~,.,,.,,,w,,,~..,,,~,~,w,,.,~,,,,.„,,...~..,~~....,..............,..,.,....~,....,... ,,,,,,,,,,,,,,,,, ,.........u,,.. N ;o......,,,,,,,,.# N City of ~Ik River, Minnesota City of El. ~ ~`. ~~ ~~ ~ Y~'Y ~.N.N.»......x».w»n~Nnxw~~.vnwm+v+.+~m»»~mv»+»+.w~vswwRVr::n•:isN:H.~~vnmmrcm»++~w.»»~».+w.x.N....xnrrv::••.xnsr~rvvntiw~....w.w:Nr.+.w~n~N~i~r.~w:n~:nv:::~:w.~.~......Nm»+~++~x++..w.....H...w :rrrvrr:~••w..v:.~.~.....mw»».w++..w..v«J...x~.:.::::r ~.r+~mx w.w..~M..~..~... x ..~, ~~~~~~~ a~ ~u~~~~ ~~~~a~c~ ~#~I~~~ ~1~~ ire Vv~~~~~~sir~ ~n~ IIllr~~l ~~ ~~ •~~~~~,~ ~~~vi~l~, MN :~~ ~ ~ ~~ ~ ~ ~:NH.VnKV:ttH:, fN: NNN, j+•WNNCCNNNS ~ ~ ~ ~ ~ ~~ ~'r } y~ mx~ - ~mxxw~ w.y~~ enxl~uvaw+mvmxxx~xxxxvnxwnxxxx~whxx++nxvmxx~x~uxxx~xxrx~xNx~xx~xuxxmxux~xx~mm~u~ux~x~vxm~wm~u~uuu~uMU~uuu~u~uuMUUUxuuuuuumuxw`x~xvnxxnxm~x~u~uw,x~wu~vw.y.~xvn~xwxmxxxx~xxxxx~xxxxvw mx~xmxm~m~xw.wmxxxxxx~xx~xmwnnxxxx~ixx~H~~wwwnvu.u~i~xv~ui»vrvn~xn~xu~uun~ z i E n„~„n.,.•~ Lpgyq~cay ~u~x~l\\\\M~1oF D ~ ils of ~r o~ec ~~bt l~~p~ 1~ $7,$00,000 ~-,~. Capital Improvement Plan Bonds, Series 2010A to be secured by the full faith and credit of the taxpayers of the City of Elk River the "Bonds"}. The City has previously approved a Capital Improvement Plan for financing purposes of the public safety building and the City Hall expansion, The 30 day reverse refere~~d~~m passed without any petition requesting any bonds be placed on the ballot for approval by the citizens. The City used this same process far financing of the library building. ~~rpa~~ To provide funds sufficient for an advance refunding of all of the EI)A's $8,000,000 Public Safety Building Lease Revenue Bonds, Series 2002A and $1,695,000 City Plall Expansion Revenue Bands, Series 20028 the "Prior Bonds"}, The Prior Bonds have approximately $5,840,000 and $1,270,000 outstanding respectively, The savings will occur over the next 13 years at approximately $20,000 to $25,000 per year, Current interest rates are approximately 4,75x/° and the new interest rates should be slightly under 3%, An advance refua~ding means the proceeds of the new Bonds will be escrowed in an amount sufficient to pay principal and interest on the Prior Bonds through the call date of 21112013, Bonds can only be advance refunded once during the life of the Bonds, The City's goal is to have the present value savings be at least 3% of the outstanding Prior Bonds, The City Council is being aslced to approve a "parameters" resolution. This resolution allows the Bonds to be sold competitively on any date set by staff, A pricing committee will be established in the resolution to approve the actual sale based upon the savings parameters in the resolution, This type of resolution is used for refundings to allow flexibility to meet the City's goals far the savings, The resolution will also authorize up to $8,000,000 in total bond proceeds ~u1l~o~i1: The Bonds are being issued pursuant to Minnesota Statues, Chapter 475, ~~~~di~t~ ~~~~~~ It is the intent of the City to utilize the same source of payment originally pledged to the Prior Bonds, an annual property tax levy and asub-lease to the Ellc River Municipal Utilities, to make all debt service payments. The approximately $70,000 of debt service reserve funds that were set aside out of the 2002B Bonds will be used as cash to reduce the size of the refunding Bonds, ;; _ :;: ;~ ~r'~~" ~~ 66 F E~p ~.....i.~......... F.wnavaaq~. lw...........w.i ~r~ '~~~: The Bonds will general obligation bonds secured by the City's full faith, credit and taxing powers, This pledge helps improve the credit worthiness of the bonds and reduces interest costs, The City could wait until closer to the call date to refund the Bonds, If the City believes that interest rates will stay the same or be lower within three years the call date on the Prior Bonds, then it would be prudent to wait to refund the Prior Bonds at a later date. i~; The City has historically been rated by Moody's Xnvestors Services, Many cities in Minnesota have changed to Standard & Poor's ~S&P~ for bond rating se~•vices because of S&P's broader perspective on municipal bands. The Moody's rating is at a Aa3 level, we would hope to see an increase in the rating to a AA level with S&P, The rating fees are about the sa~~ne between the two firms and thusfar the bond marl~et does not bid different interest rates for Bonds rated by S&P versus Moody's, ~~bit~ ~or~i~~~in~: The City will need to monitar its debt service funds to ensure compliance with 1RS parameters and to avoid penalties for carrying too high of a balance during the life of the issue. A final report on the Prior Bonds will be due by April, 2013 after the Prior Bonds are called, ~ ~~li~i~~i~~; Because the City is issuing less than $30 million in the calendar year, the City will be able to designate the Bands as "bank qualified"obligations, Bank qualified status broadens the market for the Bonds. Trr~lC~IC ~t~~: Interest is payable each six months. Principal on the Bonds will be due on February 1 in the years 2011 through 2023. The Bonds will be prepayable on February 1, 2020 or any date thereafter. ~~1~~' ~~irtio~, we will continue to monitor the market and the call dates for the City's outstanding debt and will alert you to any future refunding opportunities, ~~r~lo ~~o~~ ~~-°c~~ °1 a, 2f~ ~ 9 ~~ ,,,.. !M~„.~,s, ' r„„,.~.,,,...,,w~,..w.V..,,~„~.,.,~,~.....,.~.,..~...Vw,,.~,,..,..w~ ................„~..,,~.~~.,..,....,..,..~.,,..~..„~.,„..~,~,,...,,„.,.,,..~..~~,,..~.,u,~,,,,,,,,,.,~,~~~,.,,,, ,,,w.,,w„r,,,,.,..,,,..%,...,,~,.,,.,,,.,.,,,,,...,,......,u,~,.~,,,....w~,~~.~.~,.,n,.,,....,..,,,.,,,.,,,w,..,x„~,.,,..,.,....m..,~..,,~..,~,,.~,...,.,,,,,m,~.,~~.,..,,,.,.~,.,,,.,,. ................. ~,,,,,..,M,n. ~ „~,,....,.. Pr~~as~d ~~ [ssuce 5~~c.~l~ onf~~~~ ~ri~~ din ~rn~~: March 11, 2010 ~ii~ut ~fi~il ~~~~n: March 12, 2a 10 ~~r~~i o~ ~~~~t~~~ oluio~ ~ ~ oun~iP: March 15, 2010 ~~ ~ or~~~ii~ ~i: March 24, 2010 ~in~1; I~i~ D~: April 21, 2010 ~~n~ o~~r~~ end ~J~~ o~~und~ 1~~~~od D~~ ~rvi~~ ~1~~~1~ ~~ n~. ~`inni.i ~~vi~~: fond ~ni~t: one ~i~ oo~dinlor: Mark Ruff Stacie Kvilvang Diana Lockard Debbie Holmes Alicia Aulwes (651) 697-8505 (651) 697-8506 (651)697-8534 (651)697-8536 (651) 697-8523 The Official Statement for this financing will be mailed to the Council Members at their home address for review prior to the sale date. r~~l loo ~~~c~ ~ a~, ~~~ ~ '~~ 4 C~ o EZ~ River EA.,11~N Proposed Net Cash Refunding as G,G, of $8,000,000 Public Project Lease Revenue Bonds, Series 2002A $1,695,O0D Public Project Lease Revenue Bonds, Series 2002B Debt Service shed ~ Date Princi al Cou on Interest Total Pal Fiscal Total 04124/201 a - - - - - 08/01/2010 - - 45,967.22 45,967.22 - 02/01/2011 SBa,aQa.aa 0,500°/n 85,3aa,00 665,30a,0D 711,267.22 08/01/2011 - - 83,850,00 83,8Sa,aa - 02/01/2012 54S 000,00 D,75a% $3,850,00 628 8Sa,00 712 700.00 08/01/2012 - - 81,806,25 81,8D6,25 - a21a112a13 5S0,0a0.00 a,9Sa% 81,8a6.2S 631,8a6,2S 713,612.50 a8la 1120 13 - - 79,193.75 79, i 93.75 - 021a112a14 5S5,a00,00 1,250% 79,193,75 634,193,75 713,387,Sa 08/01/2014 - - 75,725,00 7S,72S,04 - a21a l l2a 1 S 560,000.00 1.6Sa% 75,725.00 635,72S,aa 711,450,00 08/01/2015 - - 71,105.00 71,laS,aa - a21a 112016 575,QOD,aO 2.050% 71,1 aS.00 646, l OS.Qa 717,21 a.0a 08/01/2016 - - 65,211.25 65,211,25 - ,..,,,02101l2017 ................................................................... 585,000,00 ............. ...................................................... 2;350%° ............... ........................... ......... .. 6.5 211,25 .... ,......,.,.,,,.,,,,,,,,,.,.......,.,...,.r.....................,........,....,............ 6Sa,211.25 ...............,.......,...........................,...,..............,,...........,..... 715 422,Sa .........................,..,,.,............z......................,. 08/01/2017 - - 58,337,Sa 58,337,50 - a210112018 S9S,aDa.Oa 2.650% 58,337.Sa 653,337,50 711,675,00 a8lallzal8 - - 50,453.75 50,453.75 - a21a112a19 615,000,00 2,85o°i° 50,453.75 66s,453.7s 715,907.50 ~asro112a19 - - 41 690,00 41 69 0,00 o2ro112a2a 63a,aaa.oa 3.DDD°i° ~ mm 41,69aao _~~ ~ ~71,69aao ~ 713,38a,ao a81a112a2a - - 32,240.00 32,24a,Da - 02/01/2021 b50,000.00 3.1 a0% 32,240.00 b82,24a,a0 714,480.00 0810 112021 - - 22,16S.a0 22,165.00 - ....,.4210i1242~ ............................................. ..............670000„DO,,,,,,,,,.,,,,,,..,,.. ,,,,,............,.. 3,,200% 22165.00 692165.00 714 330.00 08/01/2022 - - 11,445.00 1 ],445.00 - a21o112023 690,000,00 3,3 i 7% 11,445,00 701,445.Qa 712,89a,aD Total ~7,800,ODD,OD - $1,477,712,22 $9,Z77,712,Z2 - Yield statistics fond Year Dollars ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, $54 841,67 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, r..........,...,.,.,,,.,.. ,.Average,.Life ............................................ ....................................................................... .................................................................. ...... ............. 7.031 Years ,Average„Coda,~ar~ ................................. ..................... 2.6945064°/fl ,Net„Interest..Cost, ~N1C) 2,7798430% 1'rrae Interest Cast tT1C~ .......... .................................................. 2.7636909% Bond Yield far Arbitrage,Purposes .................. 2,6676891 Ali lncltisive Cost.~A1C.~ ........ ................................................. 2.8984070% lR5 Form 8~3~ Net Cnterest Cost 2,$94Sab4% Wei hted Avera e MatlEri 7.031 Years D7 netcash of Ser Q2A ~ 0 ~ Issue Summary 121512010 ~ 1Q;35 AM Ci of Elk Diver E~, N1N Proposed Net Cash Refunding as G,G, of $8,440,044 Public Project Lease Revenue Bonds, Series ZOO2A $1,695,D40 Public Project Lease Revenue Bonds, Series Z002B Debt ~rvice ~amp~ison Date Total P+I Net New D!S ~Id Net D!S Savin s D210112D11 711,267.22 707,795.17 734,188,46 26,393,29 02/01/2012 712,700,00 712,70D.0D 733,263,46 20,563,46 02/01/2013 713,b 12,50 713,612.50 736,403.46 22,790,96 02/01/2014 713,387,50 713,387.50 733,31 D,96 19,923.46 02/01/201 S 711 450.00 71 ] 450,DD 734,35D.9G 22,9DD.9b 02101120! 6 717,210,00 717,210,QD 739,09D.9G 21,88D.96 02/01/2017 715,422.50 715,422,50 737,Ob8.4b 21,b4S.9b 02/01/2018 711,675,00 71 1,675,00 738,653.46 26,978,46 02/01/2019 715,907,50 715,907,50 738,558.46 22,6SD,96 021D112D20 713,38D.OD 713,380,00 741,228,46 27,848,46 D210112D21 714,480.00 714,48D,DD 742,245,96 27,765,96 D21D112D22 714,33D,DD 714,330,00 741,570,96 27,240,96 0210112D23 712,89D,D0 712,89QOD 672,266,00 (4D,G24.D0} Tatal X9,277,712,22 $9,274,x40,17 $9,522,2DD,OZ X247,959,85 PVAnaI sis Summa Net to Net Grass PV Debt Service Savin s. 276 781,28 1~ffects of cha~~ es in DSR investments. ...................................................i7......................................,.,..........................................................,.,........,.........,...............,.,....... ......... ~.,...,..............,...........................,..,....................................... S8 959,67 ,.....................................................................,.............................,............................................... ~......,.3.....,...,.,........ ~ )... Net PV Cashflaw Savin rs a 2,668°/o fond Yicld 217 821.81 Contin enc ar Roundin Amount .................... ........................~...........Y.......................................~..............................................................,........................................................... ..........,.............................,.............,...........................,....,..... 3,472,05 ....,...........................................,...........,.,.,...,..,,.,.....,...,...,.......................................,....................................,..............., Net Present Value Benefit $2Z 1 293,8b Net PV ~enetit 1$8 07b 781,28 PV Refunded Debt Service 2.740°/Q Net PV Sene~t 1 $7,110 000 Refunded Princi al, ..........................................~,,.,.,,,,,,.,,.,,,.,,,..,....,,,~,..~.,,.......,.,.,.~,.,.,..,,,.,,,.......,..,.,.,,.....,.....,....,.~,~..,.......~..........,..,,..............,,......... .,,.,..,..........,,,.....................~..........,,...................................... 3, 112% .........................................,.......,...........r,..,.,,..,..,..,...........,..............................,....,...........................,,...,..........~..,............. Net PV benefit I ~7 80D 000 Refundin Princi al,. 2,837% Refundin Dond Information Refundin Dated Date 4/2412010 Refunding Delivery Date 4/24/2010 07 ~etcash of Ser 02A & 0 ~ Issue Summary 1 ~175f2010 ~ 10:35 AM C~ of k R~~ver ~,11N Proposed Net Cash Refunding as G.~, of $B,QOO,000 Public Project Lease Revenue Bonds, Series 2002A $1,b95,Q00 Public Project Lease Revenue Bonds, Series 2002B Escrow Fury dash ~ Cash Dade Princi al Rate Interest Recei is Disbursements balance 04/24/201 a - - - a,91 - a,91 08/0112010 132,379.00 0.120% 25,073.56 157,452,56 157,452,50 a,97 021x112011 530,456,00 0,300% 46,996.70 577,452,70 577,452,50 I , l7 0$10112011 103,727,00 0,500% 45,762.$5 148,489,85 149,490,00 1,02 02/01/2012 538 987,00 0,78x% 4S Sa3.S4 584 490,54 584 490,00 I ,S6 08/01/2012 97,658,00 1.060% 43,401.51 141,059.51 141,060,00 1.07 0210112013 6,353,175,00 1,350% 42,883,93 6,396,058,93 6,396,060,00 - Total ~7,'1SG,382A0 - ~249,G22,09 $B,OOG,aOS,aQ SS,OOG,OUS,UD - Investment Parameters Investment Made) Pv GIC ar securities securities ...............................................................~..........:,,...........,...3..........................................a............................................................... ..................................................................................................................,.................................................................................... ............,............................................,,,.,..,,..,,.,.,......,,,,. Default investment iel~ tar et Bond Yield .................................................................Y....................... ~............,...................................,..............,............................................ .......,............................................................................................................,............................,....................,................................ ................................................................................... Casl~ De alit 0,91 Cast of Investments Purchased with Bond Proceeds 7,756,382,00 Total Cast of Investments $7 756 382.91 Tar et Cast of Investments at band field ..............~....,..........................,...,.,.....,...........,,.....,..,,.,....................,.........Y.................................................................................... ....................................................................................................... $7,500,669,37 ............................................................................................................ ,......................................................................... Actual asitive ar ne ative arbitra e 255,713,54 Yield to Recei t 1,2900198% Yield for Arbitra e Pur uses ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,17,,,,,,,,,,,,,,,, ~,..,,,,,,,.,,.,,.,...,..,,,..........................,................,...,.,....,....,,......,..........................., ,..................,.....,..................,.....,.,..........,..........................,.,.,,,.,.,.. 2,6676891% .,,,...,.....,,,,.,.,,.,...,.,.,,.,........,,,...,.....,.......,..,..,,,,...,.........,..,.,,.,,.,,.,..,............,,.,.....,.......,,.....,......,......,.................,.,,.,.,,.., State and Local Gavernmec~t Series SLGS rates for 211 9120 1 0 07 nelcash of 5er 02A & 0 I issue Summary ~ 2!251201 D ~ 10,35 AM C~~y o Elk iye~, N $B,OOO,D00 Public Project Lease Revenue Bonds, Series 2002A City of Ells River Lease ~biigation Prier rigi ~ Debt service Date ~rincival Caunon Interest Total PSI Fiscal Total 08/01/2010 - - 128,1 a0.00 128, I oa.0a - 02/01/2011 350,000.00 3.750% 128,1 Q0,00 478, I OO,aO 60G,2aa,00 08/01/2011 - - 121,537.50 121,537.Sa - 02/01/2012 360,000.00 3,85D% 121,537.50 481,537.Sa G03,075,00 08/01/2012 - - 1 i4,G07.5a 114 607,50 - a2Ia112a13 375,a0o,0a 3.950% 114,G07.50 4s9,6o7.sa G04,215.0a 08/01/2013 - - 107,201.25 107,20 ! .25 - 02/01/2014 390,000.x0 4,000% 107,201.25 497,201.25 604,402.50 08/01/2014 - - 99,401.25 99,401.25 - 021x112015 405,000,x0 4,100% 99,401.25 504,401.25 G03,802.50 08/01/2015 - - 91,098.75 91,098,75 - 021a 112016 425,000,00 4.250% 91,098,75 516,098,75 G07,197.50 08/01/201 G - - 82,067,50 82,067,50 - x2ro1I2017 44x,xa0.oa 4.35a°~° 82,067,5x 522,067,5x Ga4,13s,0a asro 112017 - - '12 497, sx 72,497.50 - 02/01/2018 46a,xa0.0x 4.450% 72,497.50 532,497.50 604,995.00 08/01/2018 - - 62,2G2.S0 62,262.50 - 02/01/2019 48x,axa.ax 4.G00% 62,262.Sx 542,262.50 604,525.00 08/0112019 - - 51,222.50 51,222.50 - 02Ix 112a2x 5aS 000,Q0 4.G5x% ~ S 1222.50 5S6 222.50 607~445,Oa 08101/2020 - ~ 39,481,25 39,481.25 - 02/01/2021 S2S,OOx.xO 4.700% 39,4$1.25 SG4,481.25 G03,962,50 0810112x21 - - 27, !x3,75 27,143.75 - 02/01/2022 5Sx,00x.0a 4.800% 27,143,75 577,143,75 604,287.50 08/01/2022 - - 13,943,75 13 943,75 - 02/0112023 575,000.00 4.854% 13,943,75 588,943.75 602,8$7.50 Tata1 X5,840,000,00 - $2,021,130,00 X7,861,130,00 - Yield Statistics Base lake for Av ,Life & Av , Cap! o!] Calculatio!] 4/24/2010 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,~,,,,..,,,,,,,,,,,,.,..,..........,...~..,,....,,.....,..h..............................................................,........................ .....................................................~.........,.,.,..........,.,.,.,..,.......,,.,...,,,.,..,,...,...,,,,,..,.,.................,...........,.,.......................~.,.,...,,.,.... .,,.,...,,.,.,.,,,,,..........,,,,,,,,,,,,,,,,...,........,,...,.,..,.,.,,,,.,, Avera e Life 7,357 Years Avera e Cau a!1 4,7042894°/a Wei 1]ted Avera e Maturi Par Basis 7,35'1 Years Refundin fond Information Refundin Dated Date 4124120 ] 0 Refundll1 Delive Date 4/24/2010 5er 02A ~8M Pub Salty Bld ~ 51NG1.~ PtJRPOS~ ~ 7J25120~0 11Q:~5 AM Cif off ~M giver, HIV P1~oposed Net Cash Refunding as G.4. of $8,oD~,ooo Public Project Lease Revenue Bonds, Series 2402A 1)el~~ Service Schedule Date Princi al Cou on Interest Total PSI Fiscal Total 04/24/201 D - - - - 08101/2010 - - 38,050,27 38,050.27 - 02/01/2011 480,000,OD 0,500% 70,b08,75 SS0,608,75 588,659.02 081D11201 i - - 69,408,75 b9,408,75 - 021D112012 450,00D,D0 D,750% 69 408,75 519,408,75 588,817,50 0810112012 - ~ 67,721,25 67,721.25 - D210112013 455,OOD.DD 0,950% 67,721,25 522,721,25 590,442,50 08/01/2013 - - 65,560,00 65,S60.D0 - a21011201 ~ 460,D00,00 1,250% 65,560,00 52S,56D,00 591,120,OD ......081011201 ~ ...............................~~......... .........................~........~...........-..................~. .............~~..................................-,.,,..~.........,._. .. ......................................62x685:.00..~....~~..........~ ..~.......~.........~~....~......62268,5.:0~......~............ ..........................................................~.... -... 02/01/2015 465,000,00 1,650% 62,68S,0D 527,68S,OD 590,370,D0 08/01/201 S - - 58,848,75 58,848.75 - 021D112016 475,000,00 2,050% 58,848,75 533,848,75 592,697,50 0810112D16 - - 53,980,00 53,980,00 - ..0210112017 ,, ,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 485 000,OD ,,,,,,,,,,,,,,,,,,,,,,,,,,a,.........,..................,.......,...,. 2,350% ..................,...,........,.,........,................................,, S3 980,00 ,...,.........................,.,.,......,.....r.......................,...................... 538,980,00 .,,,.,..,,,.....................................,.....,.,.,.,.....,.....,............,.... 592 960,00 .....,,...,.,.,...........,..............,,.:,,,.,,,,,,,,,,,,,,,,,,... 08/0112017 - - 48,281,25 48,28 I.2S - 0210112D18 495,000,DD 2,65D% 48,281,25 543,281,25 S91,S62,SD 08/01/2018 - - 41,722,50 41,722,50 - D210112019 510,000,00 2.850% 41,722,5D 551,722.50 593,44S,0D DSID 1I~D19µµµ~.,w.w._~~....~.~.~. ~,~..w~.w~..~.w~~~..:~.M~~...,.. ,~..~..~..~._...~.~.~ M~.~._w_..~ ,.._.~...~w~.._........34~~55~DO...,w...._..M.~ _..~,~.~..ww.~~~.. ~~,~455.QOw~..~ ~ .._.~ m~~._.~.,~.~.__.w.,____.rv,'_ 02/01/2020 S20,OOD,OD 3,000°/a 34,455.OD 554,4SS.00 588,910.00 08/01/2020 - - 26,655,00 26,655,00 - 021D112021 54D,00D,00 3,100% 2b,655,OD 566,6SS.D0 593,310,OD 08/01/2021 - - i 8,28S,OD 18,285,00 - 02/01/2022 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ~.,,,,,.....,.,....,,.,,.,,.,.,,,,,, 555 DDO,OD ,,,,...,.,,,..,,,,,,.,..,.:.,,..,,,,,,,,,,,,................,,...,,,,,, 3.2DD% .....,,..,...,..,,,,,,,,,,,,,,,,,.,.........,,,,,,,,,,,,,,,,,,,,,,,,,,.,,,... 18 285,00 ......,.,,,.,,,,,,,,,,,,,....,.,,,,,.,.,.,,,,, r.......................,....................,. S73 285,OD ..,...,.,...,...,,...,...,...,,.,.,,,,,,,,,,.,, r...,.,.,.,...,.,.,........................ 591 570,00 .......,....,,,,,,,.,,,..,,,,,,,,,,,,....,,, a.......................,. a81a112o22 - - 9,4D5,00 9,4aS,0o - 02/01/2023 570,000,00 3,300% 9,405,04 579,405,00 588,810,00 Tot~ti ~G,4G0,000,00 - $1,222,674.02 $7,G82,G74.0Z - Yield Statistics Bond Year Dollars $45 425,61 ,.Avers e l~i.fe ... ... „ ........~......~ ........................,,,, ,,, ....,.,..,,...... ...........~..,.,....,,,,,.....,.,,,,.,.,,,,.,...,,,,,,,,,,.,.,...... .,,,,,,,,,,,,,,,..,.,.........,................,.......,....................w .,..................~..,.......................................,...,.,...~..,.,,,,,.,,...,,, ,.,..,.,.,............,......,,....,.,,,.,.................................,,.,,,,........ 7,032 Years .,..............,,,,.,.....,.,,,...,,.....,.,..,,,,.,.,,..,...,.,,,,., .Average„Cau~o» ................................. . 2,6915962% Net Interest Cost ~N1C} 2,7769225% .,.... True Interest Cast,~T1C~ ... ~ ~ ~ ~ ~~~~~ .,....... 2,7609396% „Band Yield far Arbitra.~e.P~ir ores.... 6676891 /° All Inclusive Cast ~AIC~ 2,8956275% IRS Form ~03~ Net Interest Cast 2,6915962% ~Vei kited Avers e Maturi 7,D32 Years 07 nelcash of Ser D2A & p I Ref 20D2A ~ 21251201 i 1:35 AM Ci o iii River, N Proposed Net Cash Refunding as G,~, of $5,000,000 Public Project Lease Revenue Bonds, Series 2002A Debt Service ompr°YSOn Date Total P+I Net New DIS ®ld Net D15 Sevin s 02/0112011 588,659.02 585,048.74 60b,200.00 21,151,26 02/01/2012 588,$17.50 588,817.50 603,075.00 14,257.50 02/011201 3 590,442,50 590,442,50 604,215,00 13,772,50 02/01/2014 591,120,00 591,120,00 604,402,50 13,282.50 02/01/2015 590,370,00 590 370.00 603 $02,50 13 432.50 021011201 b 592,697,50 592,697, 50 607,197.50 ! 4,500.00 02/01/2017 592,9b0.00 592,960,00 604,135,00 11,175,00 02/0112018 591,562.50 591,5b2.50 604,995,00 13,432,50 02/01/2019 593,445.00 593,495,00 604,525,00 11,080.00 02/01/2020 588,910.00 588,910.00 607,445.00 18,535.00 n ~ 02101/2021 593,310,00 593,310.00 603,962.50 10,652.50 02/01/2022 591,570,00 591,570.00 604,287.50 12,717.50 02/01/2023 588,810,00 588,810,00 602,887.50 14,077.50 Tots! ~7,G~2,U7q,D2 ~7,G79,063,74 ~7,8G~,130,0U $182,QGG,2b PV Analysis Summary Net to Not} Grass PV Debt Service Sevin s„ 155 555.82 ...........................................................................................~..........,......,,,.,,...........,,.....,...,..................,.......................................... .....................,.,.....,.,...........................,......,................,,,...,............,....,...........,.,...,,,,.,,.....,,,,,.,...,...,....,...........,..,,.,.......,...,.....,....,. ....,......,.._..........,...,.........................a.............,....,...... Net PV Casllfiow Sevin s c 2.668% Bond Yield 155 555.82 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,~.....~...,.,,...,..,....,,.,,,.,.,.~...,,.,.,,,...,,,.,,,,,,....,.,,.....7: ; ::.:..,,.............,.,.,...,,,,..,...,.,.,.,.., ,,,,.,.,,,.,,,,,,,,.,,.,,,,,.,.,.....,,,,,,,,,,,,,,,,,,,,,,,,.......,.,,,,,.,.......,..,,,,,,,,,,.,.,.,.,.,,,,,,,,,,,,,,,...,..,,........,.......................,...........,..,,,,,,,,,,.,.,....,..., ..,.........,,,,,,,,,,,.,,,,...........,.,..~..............,.....,, Cantin enc ar Roundin Amount,. 3 610.28 Net Present Value Benefit $159,166.10 Net PV Benefit 1$6 6i 4 448, ! 2 PV Refunded Debt Service ................................................................. ~.,...........;......................,...,...,.................,..............,..........,.....,...,......................,.......... .................................................................,..................................................... 2.406% .......,,.......,.......,.............................................................,................,........,,.w,...,.,...,..........................,.,.....,,....... Net PV Benefit I $5,840 000 Refunded Princi al,.. .................................................................................~........,.................., ....................................p......,............................................ ..........................,................................................................................,.,..... 2,725% ..........................,.......................................................................................................................................... Net PV Benefit I $6 460,000 Refundin Princi al.. .................................................................,.......................,.,.............,..................~..................... P................................................... ..........................................,..................,,,.,..,.........,.,..,..............,,..,.,,,.,,,. 2.4b4% ,,,.,,, _..,.,,,,..,,,,....,...,,,.,,,,.,.,.,.,.,,,.,.,,,,..,,,.,.,,,.,,,.,.,....,,,.,.,,,...,.,.,......,, .........,..,..,,.....,,,,.,,..,..,.,,.,..,..,.,.,..,........... Refundin Dond Information Refundin Dated Date.. 4/24/2010 Refunding Delivery Date 4/24/2010 07 netcash of Ser OVA & 0 ~ Rif 2002A ~ 21512010 ~ ~ 0:35 AM ~i o Eik ,fiver, N $1,95,000 Public Project Lease Revenue Bands, Series ~002B City of Elk River Lease ~bliga~ion Priar ~rigi ~ Debi Service Date Principal Coupon Interest Total P+I Fiscal Total asIa112D1 D - - 29,352,5a 29,3S2.5a - a21a112a11 7a,aaa.oo 4,aaa°i° 29,352.50 99,352.5D 128,7a5.aa asla 112D I 1 ~ - 27,952.50 27,9sz.5D - a210112D12 75,DDD.00 4,aDa% 27,952,5D 102,952,50 130,9D5.Da 08/01/2012 .......................................................................... - ......................................................................................... - .,,.,,,,,.,,,,,,,..,,.........,.,....,........................,,,,,,..,..,,.. 2b 452.50 ,...,,.,....,...,......,,,,,.,,.,,,.,,,3,,,,,,,,,,,.,.,..,.................................. 26 452,50 ............................,.,...,,....., r,................................................ - ......................................,..,,..................,.. 0210112a13 80,000,00 4.100% 26,4S2.5a 106,452,50 132,905.00 DsIDl12D13 - w 24,812.5a z4,812,5a - 0210112D14 80,a00,Q0 4.200°/a 24,812.50 104,812,5a 129,b25.Da 08/0112014 - - 23,132.50 23,132, S0 - 0210112a15 BS,Qa0,00 4.300% 23,132.50 108, 132,50 131,265,00 x810112015 - - 21,305,00 21,3a5,0D - D21D112D16 90,00x,00 4,400% 21,305.00 111,3a5.OD 132,610.ax D810112D16 - - 19,325.00 19,325,x0 - x21a112x17 95,DOD,Da 4,50D% 19,325.00 114,325,00 133,65a,DD 081a112a17 - - 17 l 87.50 17187.50 - a21a112a18 IOD,000,OD 4.625% 17,187,50 117,187.50 134,375.D0 a81a112a18 - - 14,875.00 14,875.00 - D21D112D19 Ia5,000.D0 5.Oxa% 14,875,00 119,875,D0 134,750,D0 081D 112D19 - - i 2,250,x0 12,250.OD - a21x112x20 ~....w.~M I lD a0a,x0 5,000% ~ ~ 1~250~Q0 ~~ 1 ~2 2Sa,D0 13~D~a0 081x112020 - - 9,500,0a 9,Sa0.0x - 02/01/2021 12a,aa0.D0 5.000% 9,500,OD 129,500,00 139,DOD.Da 08101/2021 - - 6,50x,00 6,500,D0 - 02101/2022 125,0OO.Oa 5.0ax% 6,Sa0,aa i 3 i ,50x,x0 l 38,DOa,DO 08101/2022 - - 3,375.x0 3 37S.xa - 0210112023 135,000,aa S,xxO% 3,375.x0 138,37S,xa 141,750.00 7~ot~1 s~,z~o,oao,oa ~ ~4~z,xao,xa st,74z,a~o,oo - Yieid statistics Base date for Av ,Life & Av , Cou on Calculation 4/24/2010 Avera e Life 7,510 Years Avera e Colt nn 4,949463.9% VVei kited Avera e Maturi 1'ar Basis 7,510 Years Refundin Dond Information RefLlnd111 Dated Date 4/24/201 a Refunding Delivery Date 412412x10 Ser 026 ~1,695M Pub Safty ~ SINGLE PURPOSE ~ 212512o1Q 11Q,35 AM Cz off' ~~ fiver, IN Pl~oposed Nei Cash Refunding as G,O, of $1,695,x00 Public Project Lease Revenue Bonds, Series ~D02B Debi ~rvice Schedule Date Princi al Cou on interest Total P~1 Fiscal Total x412412010 - - - - - a810112010 - - 7,916,95 7,916.95 - 02/01/2011 1 00,x00,00 x,500% 14,b91,25 ] 14,691,25 122,6x8,20 081a 112011 - - 14,441.25 14,441,25 - a210i12x12 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,.............................,.,,,.,. 95 000,x0 ....,,.,..,.......,....,,,,~.,,,,,,,...,,,,,,,,,............,,..,,,,... 0,75x% ..,,,,,.....,,,.,,,,.,,,..,,.,,.............,,.,,,,.,,.,...................... 14,441,25 ........................,....,,................,...,....,..............,......,........,.,,,..., 1x9,441.25 ..............,,..........,,,,,,,,,,,,,....,.,,,,.,.,,,,,,,,,,,,,,,,,.,.,,.....,,..,, 123 882,5a ,,,,,,,,,,.,.,...,,......,..,....,.,,.,...,,,f,,....,.,.,.,,,..,...... 081x112012 - - 14,x85,00 14,085,x0 - 0210112x13 95,aaa,a0 a,9Sx% 14,x85,00 l a9,a85,Qa 123,170.OD x810112013 - - 13,633,75 13,633,75 - 02/01/2014 95,000,00 1.25x% 13,633,75 1x8,633,75 122,267.5a 0810112x14 .....w .................................~,,,,,..,.............,..,,.....,......,.,,,,, - ,.,,..........,....~,...,.............,...............,,...,........,.. - ......................,.......,.,.,,,.,.~...,.,..,........~,~,,,,........,, 13 040,00 ,.,,,,.,.~..,.,...............,...,,.,..~..,,,,,,....,,.~.,...~.,........w................. 13,04a.OD ..................................................................................~. - ..,....,...~,,,,,,,,.,,.,..,~.........,,......,,,,,.~,.,.....~.rv,,. 021x112015 95,000.aa 1,G50% 13,040,00 1 08,x40,00 121,D80,00 08/01/2015 - - 12,25G,2S 12,2SG,2S - 021o112x1b 10x,000,00 2,050% 12,2S6.2S 112,256,25 124,512,50 08/01/2016 - - 11,231,25 11,231.25 - a21a 112017 lax aaa,00 2,350% 1 1231,25 111 231.25 122,462.50 08!0112017 - - 10,x56,25 1 0,x56,25 - 0210112x18 10a,0xa,0a 2,G50% 10,x56,25 110,05G,2S 12x,112,50 081a 112018 - - 8,731,25 8,73 1.25 - 0210112()19 1 x5,xxx.0a 2,8Sx% 8,731,25 113,731,25 122,4G2,5a 08/01/2019 ..~,~.~..~..~.~.~_M._.~...,._.~,..„...w - .......~.~..~...V.~.,_~..w~...~..w.~~.~ - ww.._µ~._~.~..~...Y..~..~,,..__~..~.w~.. 7 235,x0 ._.. _~,..._.ww...~...~...w~w.~.~. 7 235,x0 ,~..~.._~...~~~.~w~...w.~...~.~...,_~__ - ~.,m_.~.~~......w.~..~.~..... 02/01/2020 110,OOa,Oa 3,x00% 7,23S.aa 117,235,00 124,47x,00 a810112aza - - 5,585.aa 5,S85,xa - a21o 112021 I 1 x,a0a,0a 3,1x0°i° 5,58S.a0 115,585,aa I21,17a,0a xs1a112x21 - - 3,88a,aa 3,s8a,aa - a21o112a22 115 0x0,00 3.2x0°~° 3 8so,oa 118 8$a,xa 122 76a,ax a81x112az2 - - 2,x40,00 2,040,x0 - a21o112a23 12o,oaa,ox 3.4x0°i° 2,040.x0 122,a4x,aa 124,x8a.aa Tatal s~,3~a,oaa,aa ~ szss,a~8,zo s~,s~s,a~8,zo - Yield statistics ..~o«d Year ~oll~rs...... .. ............ . .. $9 416,06 ,Avec.a~e Life ............................. ................................................ .......... 7,027 Years ..... .. Avera e Cau nn. 2,7085460% Net.lnterest Cast N1C 2,7939321% 'Prue lnterest Cast T1C 2,7769615% Band Yield far Arbitra e Pur ores ,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,~....,,.,.,.,,.,..1~.............................................................. .............................................................................. ............................................................................................... ..................................................................................... 2,667G891 % ..........................................,............................ All Inclusive Cast A1C 2 9118134% Ii~S Form 803 Net Interest Cosk 2,708S4bx% Wei kited Avera e Maturi 7.027 Years D7 netcasi~ of Ser 02A ~ D ~ Ref 20Q28 ~ 2125l2D10 114,35 AM Ci of ~ River N Proposed Net Cash Refunding as G.U. of $~,b95,oDD Public Project Lease Revenue Bonds, Series 2D02B Delbt Service omparisan Date Total P+I Net New DIS ®Id Net DlS savin s 02/01/2011 122,608,20 122,746,43 127,988,4b 5,242,03 02/01/2012 123,882.54 123,882.50 ! 30,188,46 b,305,9b 02/01/2013 123,1'14,00 123,170.00 i 32,188,46 9,018,44 02/01/2014 122,267.50 122,267.50 128,908,46 6,b40,9b 02/01/201 S 121 080,00 121 080.00 130 548,4b 9 4b8,46 4210i120ib 124,512.50 124,512,50 131,893,46 7,380,96 0210 i 120 i 7 l 22,462, 50 i 22,462.50 132,933.46 10,470,96 42/01/2018 120,112.50 120,112,50 133,658,46 13,545,96 02/01/2019 122,462.50 122,4b2,50 134,033.46 11,570,96 02/01/2024 124,470.OD 124,470,00 133,783,46 9,313,46 021D112021 121,170.00 121,174,00 138,283,46 17,113,46 021D112022 122,7b0.00 122,760,04 137,2$3,46 14,523.46 02/0112023 124,080,00 124,D80.00 69,378,50 (54,701.50) Total $1,595,038,20 S1,S9S,I76,43 ~1,G61,070,02 ~G5,893,59 PV Anal sis summa Net to Net Grass PV Debt Service Savin s„ i.21,225.~b. affects of chap es in DSR investments, .. .. .........58,959,47... Net PV Casi~flow Savin s cr 2,668% Band Yield ...., .................................................................................................... .. b2 266.04 Cantin enc Qr Raundin ~ Amount .................... ........................~...........Y..........,............................~..........................................................................................................,..,....,.,..... ,........,..................................................................................... 138,23. ..........~................,........,...,................................................,.................................................................~....................... Net Present Value 13enelit $62127.77 Net AV )3enefit I $ i 462 333.1 b PV Refunded Debt Service ................................................................. ~..........., a................................................................,....,...........,..,..,.,...................,........ ................................................................,.....,..,,.......,............,...,..,,, 4.248°/fl ......,.......,,,,,,,.,,,..,.,................,....................................,,,,,,..........,,,,.,,.,,......,,,,,...,,,,,........,....,..,,,,.,,.,,.,....,....,.,............... Net PV Bet}eft 1 $ 1270,000 Refunded Princi al... ................................................................... ~,.,,,,,,,,...,.,.,.,.,.,,,....,.,,.,..,.........................................1? ......................................,...,.,,, ,,.,,......,,,,,,,,.. _.,,,....................................................................._,..... 4.892% .......................................................,.,..,,,,.,,.,...........,...,,,....,....,,..,....,, .,.....,,...............................................,................... Net PV Benefit 1 $l 340 OOO Refundin Princi al., ...................................................................~.............:....,...,.,,....,.,.,,,,,,,,.....,,,,,,,,,,.~.,,,,,,,.,.,.......,.1?..........................................,,..... ...................,....................................,...,......,...,..............,,.,.,.,.,,, 4.b36% .,.,...,,,.,..,,,,..,,..,,..,....,....................,...,........................,,.,........,....,.,,....,,..........,,,..,,,,..,,,.......,,,,.,..,,.,,..............,...,..........,. Refundin Pond Information Refundin Dated Date X12412010 Reftindin~ Delivery Date 4124/2010 07 netcash o(Ser 02A ~ 0 I I~ef 20028 12J25r2a1a 110,35 AM Extract of Minutes of Meeting of the City Council of the City of Elk River, Sherburne County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Elk River, Minnesota, was duly held in the City Hall in said City on Monday, March 15, ZOl o, commencing at .M, The following members were present; and the following were absent; The Mayor announced that the next order of business was consideration of the issuance and sale of the City's approximately $$,OOO,0o0 General Obligation Capital ~mpravement Plan Bonds, Series 201 oA. Member introduced the following written resolution, the reading of which was dispensed with by the unanimous consent, and moved its adoption; 365125v1 JSQ EL185-11 RESOLUTION N0, A RESOLUTION AWARDING THE SALE OF APPROXIMATELY $8,000,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 201OA; FIXING TZ IEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR TI~EIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY. BE IT RESOLVED By the City Council of the City of Elk River, Sherburne County, Minnesota the "City"} as follows: Section 1. Authorization to Issue Bonds; Issuan,ce,of-Bonds 1.01. Authorization to Bonds. It is hereby determined that; ~a} Tl~e Ells River Economic Development Authority, Minnesota the "Authority"} previously issued its Public Safety Building Lease Revenue Bonds, Series 2002A City of Ells River, Minnesota Lease Obligation}, dated September 1, 2002 the "Series 2002A Bonds"}, pursuant to a Mortgage and Security Agreement and Trust Indenture, dated September 1, 20D2, between the Authority and U.S. Bank National Association, as trustee the "Series 2002A Trustee"} the "Series 20D2A Indenture"} and a resolution adopted by Authority on August 12, 2002 the "Series 2DD2A Bond Resolution"}, The proceeds of the Series 2002A Bonds were used for construction and furnishing of a certain public safety facility the "Safety Facility"}, The City currently leases the Safety Facility pursuant to a Lease Agreement, dated September 1, 2002 the "Lease Agreement"}, between the Authority, as lessor, and the City, as lessee, The City has determined to terminate the Lease Agreement and purchase the Safety Facility from. the Authority by refunding the Series 2D02A Bonds, which are currently outstanding in the principal amount of $5,840,OD0 fib} The Authority also previously issued its City Hall Expansion Revenue Bonds, Series 2002B City of Elk River Lease Purchase Obligation}, dated September 1, 2002 the "Series 2002B Bonds"}, pursuant to a Trust Indenture, dated November 1, 1991, as supplemented by a Supplement to Trust Indenture dated December 1, 1997, and further supplemented by a Supplement to Trust Indenture dated September 1, 2002, between the Authority and U.S. Bank National Association formerly First Trust National Association}, as trustee the "Series 2002E Trustee"} collectively the "Series 20D2B Indenture"} and a resolution adopted by Authority on August 12, 2002 the "Series 2002E Bond Resolution"}, The proceeds of the Series 2002B Bonds were used for the expansion of the City Hall, including related furnishings, equipment and site i~~provements the "City Hall Facility"}, The City currently 3b5125v 1 J5~ EL! $S-! ! 2 leases the City Facility pursuant to a Lease Purchase Agreement, dated November 1, 1991, as supplemented by a Supplement to Lease Purchase Agreement dated December 1, 1997, as further supplemented by a Supplement to Lease Purchase Agreement dated September 1, 2002 collectively the "Lease Purchase Agreement"}, between the Authority, as lessor, and the City, as lessee, The City has determined to terminate the Lease Purchase Agreement and purchase the City Hall Facility fram the Authority by refunding the Series 2002B Bonds, which are currently outstanding in the principal amount of $1,270,000. ~c} The City is autharized by Minnesota Statutes, Section 475,521 the "CIP Act"} to finance certain capital improvements under an approved capital improvement plan by the issuance of general obligation bonds of the City payable from ad valorem taxes. Capital improvements include acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, public safety facility and public worlcs facilities, Further, the City is authorized by the provisions of Minnesota Statutes, Chapter 475 the "Municipal Debt Act"), and specifically Section 475.67, Subdivisions 3 through 12 of the Municipal Debt Act, to issue and sell its general obligation bonds to refund outstanding bonds when determined by the City Council to be necessary and desirable for the reduction of debt service or interest cost and the adjustment of maturities of outstanding issues of bonds, ~d} ~n December 21, 2009 the City held a public hearing regarding ~i} the adoption of a five~year capital improvement plan for the City prepared in compliance with, Minnesota Statutes, Section 475,521 the "CIP Plan"}; and iii} the issuance of general obligation bonds the "CIP Bonds"} in the maximum amount of $8,000,000, to acquire the City's Safety Facility and the City Hall Facility from the Authority by refunding the outstanding Series 2002A Bonds and Series 2002B Bonds issued by the Authority. fie} The City Council has determined that, within 30 days after the public hearing, no petition for a referendum on issuance of bonds pursuant to the Plan was received by the City in accordance with the CIP Act. ~f} As required by the CIP Act, the City has determined that; ~i} the expected useful life of the City Hall will be at least five years; and iii} the amount of principal and interest due in any year on all outstanding bonds issued by the City under the CIP Act, including the CIP Bonds, will not exceed 0.16 percent of the taxable marl~et value of property in the City for taxes payable in 2011, 1,02, Authorization to Issue Bonds, It is determined that the City is autharized by Section 475,67, Subdivision 3 of the Municipal Debt Act, to issue and se11 its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service cost to the City or for the extension or adjustment of maturities in relation to the resources available for their payment, Further, Minnesota Statutes, Section 475,67, subdivision 4 permits the sale of refunding obligations 365125v1 JSI3 F~LI$5-1 } ~ during the six month period prior to the date on which the obligations to be refunded may be called for redemption. 1.03. Issuance of Bands. ~a} The City finds that it is necessary and desirable for the reduction of interest cost that the City issue its General Obligation Capital Improvement Plan Bands, Series ~OlOA the "Bonds"}, in an original aggregate principal amount not to exceed $8,000,000, the proceeds of which will be applied to defease and advance refund the Authority's Series Z002A Bonds and the Authority's Series 2002B Bonds, fib} The City is authorized by Minnesota Statutes, Section 475,G0, Subdivision 2~9} to negotiate the sale of the Bonds because the City has hired an independent financial advisor to opine that the sale price of the Bands is commercially reasonable. The actions of the City staff and financial advisors in negotiating the sale of the Bonds are ratified and confirmed in all respects. 1,04, Pricing Committee, The City hereby establishes a pricing committee with respect to the Bonds comprised of the City Administrator, the Finance Director and the Mayor andlor a City Council member designated by the Mayor, the "Pricing Committee"}, The Pricing Committee is authorized and directed, with the advice of the City's financial advisor, Ehlers & Associates, Inc,, to ~a} review proposals for the sale of the Bonds, fib} award the sale of the Bonds to the prospective purchaser the "Purchaser"} with a proposal conforming to the terms of proposal distributed by the City including any adjustment in principal amount in an aggregate principal amount not to exceed $5,000,000}, offering the lowest true interest cost which shall not exceed 3.5%, and meeting the debt service savings required by Minnesota Statutes, Section 475,G7, subdivision 12 and ~c} approve the tax levy for the repayment of the Bonds, The City hereby approves the sale of the Bonds to the Purchaser, at the price and at the rates to be determined by the Pricing Committee in accordance with the preceding sentence, Issuance of the Bonds shall be conclusive evidence that the Pricing Committee has determined such price and rates in accordance with this Resolution, 1,05, Credit to Debt Service Fund Good Faith Checl~ and Contract with the Purchaser. The amount proposed by the Purchaser in excess of the minimum bid specified in the terms of proposal will be credited to the Debt Service Fund hereinafter created, The City Finance Director is directed to retain the goad faith checl{ of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checl~s of the unsuccessful proposers forthwith. The Mayor and City Finance Director are directed to execute a contract with the Purchaser on behalf of the City. 1.0~, Terms of the Bonds -and Principal Amounts. The City will forthwith issue and sell the Bonds pursuant to the Municipal Debt Act in the total principal amount not to exceed $8,000,000, originally dated as of their date of issuance, in the denomination of $5,Q00 each or any integral multiple thereof, numbered No. R~ 1, upward, bearing interest as determined by the 3b512Sv1 JSB EL1$5-11 4 Pricing Committee, and maturing on February ~ in the years and amounts as determined by the Pricing Committee, 1,07 ~ tional Redem tion, The City may elect on February 1, 2020, and on any day thereafter, to prepay Bonds due on ar after February 1, 2021, Redemption may be in whale or in part and if in part, at the option of the City and in such manner as the City will determine, if less than all Bonds of a maturity are called for redemption, the City will notify DTC has defined in Section 8 hereof} of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed, Prepayments will be at a price of par plus accrued interest. 1.08, Term Bonds, if Term Bonds are requested by the Purchaser, the following provisions apply; Mandatory__R_ed_em~~ion, The Term Bonds are subject to mandatory sinking fund redemption and shall be redeemed in part by lot at par plus accrued interest on the sinking fund installment dates and in the principal amounts specif ed by the Purchaser and approved by the Pricing Committee in accordance with Section 1.04, The specific Term Bonds to be redeemed will be selected by lot by the Registrar, All prepayments will be at a price of par plus accrued interest. Section 2, Registration and Payment, 2.01, Re istered Form, The Bonds will be issued only in fully registered form, The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2,02. DatesLInterest Payment Dates, Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless ~i} the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or iii} the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue, The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2010, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2,03. Registration, The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent the "Registrar"}, The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows; 365125v1 JSB EL1~5~1 I 5 ~a} R~ e~is~er, The Registrar must beep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged, fib} Transfer of Bonds, Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in farm satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a life aggregate principal amount and maturity, as requested by the transferor, The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. ~c} Exchan e of Bonds, when Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a life aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing, ~d} Cancellation, Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City, fie) Improper or Unauthorized Transfer, When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized, The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized, ~f} Persons Deemed owners, The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or . sums so pal , fig} Taxes Fees and Charges. The Registrar may impose a charge upon the owner thereof far a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange, 3b51~5v1 JSB EL18S-I 1 ~ ~h} Mutilated,,Lost,,Stolen or Destroyed Bonds, If a Bond becomes mutilated ~. ~... . or is destroyed, stolen or lost, the Registrar will deliver a new Bond of lil~e amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or last, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destrayed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or last, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bands so surrendered t0 the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or last Bond has already matured ar been called for redemption in accordance with its terms it is not necessary to issue a new Band prior to payment, ~i} Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail postage prepaid} to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law, Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time, 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association in St. Paul, Minnesota, as the initial Registrar, The 1Vlayor and the City Administrator are authorized to execute and deliver, on behalf of the City, a contract with the Registrar, Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar, The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. Cn or before each principal or interest due date, without further order of this Council, the Administrator must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05, Execution, Authentication and Delivery, The Bonds will be prepared under the direction of the City Administrator and executed on behalf of the City by the signatures of the Mayor and the City Administrator, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals, If an officer whose signature or a facsimile of whose 3G51Z5v1 JSB EL185-11 7 signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery, Notwithstanding such execution, a Bond will not be valid or obligatory far any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on each Bond is conclusive evidence that it has been authenticated and delivered under this Resolution, when the Bonds have been so prepared, executed and authenticated, the City Administrator will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2,06. Te~ mpora~ Bonds, The City may elect to deliver in lieu of printed definitive Bonds one or mare typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond, Upon the execution and delivery of definitive Bonds the temporary Bands will be exchanged therefor and cancelled. Section 3, Form of Bond. 3.01, Execution of the Bonds, The Bonds will be printed or typewritten in substantially the following form.; 365125vI 1ST ELlBS-11 $ No, R~ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF SHERBURNE CITY OF ELK RIVER GENERAL OBLIGATION CAPITAL IMROVEMENT PLAN BOND, SERIES 2010A Date of Rate Maturit Ori i~nal Issue CUSIP February 1, 20~ Apri 121, 2010 Registered Owner; Cede & Co. The City of Ells River, Minnesota, a duly organized and existing municipal corporation in Sherburne County, Nlinnesata the "City"}, acl~nowledges itself to be indebted and for value received promises to pay to the Registered owner specif ed above or registered assigns, the principal sum of $ on the maturity date specified above with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing August 1, 2010, to the person in whose name this Bond is registered at the close of business on the fifteenth day whether or not a business day} of the immediately preceding month, The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U. S. Banl~ National Association, St, Paul, Minnesota, as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein, For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2020, and on any day thereafter to prepay Bonds due on or after February 1, 2021. Redemption maybe in whole or in part and if in part, at the option of the City and in such manner as the City will determine, If less than all Bonds of a maturity are called for redemption, the City will notify Depository Trust Company ~"DTC"} of the particular amount of such maturity to be prepaid, DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the benef cial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt obligations" within the meaning of Section 265~b}~3} of the Internal Revenue Code of 1986, as amended the "Code"} relating to disallowance of interest expense for 365125v1 JSB rLl$5-11 9 financial institutions and within the $3o million limit allowed by the Code for the calendar year of issue. This Bond is one of an issue In the aggregate principal amount of $ all of like original issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued pursuant to a resolution adapted by the City Council on March 15, X010 the "Resolution"~, for the purpose of providing money to refund in advance of maturity of the outstanding principal amount of certain general obligation bonds of the City, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 475,67, Subdivisions 3 through 1Z, and the principal hereof and interest hereon are payable in part from ad valorem taxes, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency in taxes pledged, which additional taxes may be levied without limitation as to rate or amount, The Bonds of this series are issued only as fully registered Bonds in denominations of $S,OOO or any integral multiple thereof of single maturities, As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the boolcs of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations, Upan such transfer or exchange the City will cause a new Band or Bonds to be issued in the name of the t~•ansferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Band is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary, IT IS HEREBY CERTIFIED, RECITED, CC~ENANTED AND AGREED that all acts, conditions and things required by the Constitution and Laws of the State of 11~Innesota to be done, to exist, to happen and to be performed preliminary to and In the Issuance of this Bond In order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness, 3b5125v1 JSB E~,1$5~11 to This Bond is not valid ar obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certif sate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives, IN WITNESS WHEREOF, the City of Ells River, Sherburne County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Administrator and has caused this Bond to be dated as of the date set forth below. Dated; CITY OF ELK RIVER, MINNESOTA Facsimile Facsimile City Administrator Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within, U.S, BAND. NATIONAL ASSOCIATION B~ -- Authorized Representative The following abbreviations, when used in the inscription of the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations; TEN COM ~- as tenants UNIF GIFT MIN ACT Custodian in common ~Cust} Minor} TEN ENT -- as tenants under Uniform Gifts or by entireties Transfers to Minors ~T TEN ~~ as j oint tenants with right of survivorship and Act .... , ... , , , . not as tenants in common State} 365125v1 TSB EL185-11 ~ ~ Additional abbreviations may alsa be used though not in the above list, ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby Irrevocably constitute and appoint attorney to transfer the said Bond an the books kept far registration of the within Bond, 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 Band in every particular, without alteration or any change whatever. Signature Guaranteed; NGTICE; Signatures} must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ~"STAMP"}, the Stocl~ Exchange Medallion Program ~"SEMP"}, the New Yarl~ Stock Exchange, lnc, Medallion Signatures Program ~"MSP"} or other such "signature guarantee program" as may be determined by the l~.egistrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended, The R.egistral~ will not effect transfer of this Bond unless the information concerning the assignee requested below is provided, Name and Address; ~lnclude information for all joint owners if this Bond is held by j oint account,} 365125v1 JSB EL185-I 1 12 Please insert social security or other identifying number of assignee PRG~XSIGNS AS TG REGISTRATIGN The ownership of the principal of and interest on the within Bond has been registered an the boobs of the Registrar in the name of the person last noted below, Date of Registration Registered owner Cede & Co, Federal ZD # 13 -25 5 5119 Signature of Gfficer of Re~trar 3 , 02, Aug, Legal 0~inion, The City Administrator is authorized and directed to obtain a co ~of the ro osed approving legal opinion of Kennedy & Graven, Chartered, pY p P Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4, Payment; Security; Pledges and Covenants, 4,01, ~a} Debt Service Fund, The Bonds are payable from the General Gbligation Capital Improvement Plan Bonds, Series 201OA Debt Service Fund the "Debt Service Fund"} hereby created, and the proceeds of ad valorem taxes hereinafter levied the "Taxes"} are hereby pledged to the Debt Service Fund, into which shall be deposited ~i}accrued interest paid by the Purchaser, if any, upon closing and delivery of the Bonds; iii} proceeds of the Taxes herein levied; viii}any additional funds directed to be deposited by the City Administrator, rf the balance in the Debt Service Fund is at any tune insufficient to pay all interest and principal then due on the Bonds payable therefrom, the Council covenants and agrees that it will each yea~~ levy an amount sufficient to take care of any accumulated or anticipated deficiency, which levy is not subject to any limitation as to rate or amount, fib} Escrow Account, Pursuant to an Escrow Agreement, dated as of April 1, 2010, between the City, the Authority, and the Escrow Agent, proceeds of the Bonds in the amount of set forth therein shall be deposited in the Escrow Account to be maintained by the Escrow Agent to be applied to the defeasance and refunding of the Authority's Series 2002A Bonds and the Authority's Series 2002B Bonds, 3bS12Sv1 1SI3I:L18S-11 1~ 4,02, Pledge of Taxes For the purpose of paying the principal of and interest on the Bonds, there is hereby levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City, Such tax will be credited to the Debt Service Fund above provided and will be in the years and amounts to be set for in the certificate of the Pricing Committee, 4,03, County Auditor's Certificate as to Registration, The City Administrator is directed to file a certified copy of this resolution along with a copy of the certificate of the Pricing Committee with the County Auditor of Sherburne County and to obtain the certificate required by Section 475,3 of the Act, 4,04, Cancellation of Tax Levies for the Refunded Bonds, It is hereby determined that upon the deposit of the proceeds of the Bonds in the Escrow Account p~u•suant to the Escrow Agreement that an irrevocable appropriation to the debt service fund for the Refunded Bonds will have been made within the meaning of Section 475,b1, Subdivision 3 of Minnesota Statutes, as amended, and the City Administrator is hereby authorized and directed to certify such fact to and request the County Auditor to cancel any and all tax levies made by the resolution authorizing and approving the Refunded Bonds, 4,05. Certification to Count Auditor as to Debt Service Fund Amount, It is hereby determined that the estimated collection of the foregoing tax levies will produce at least eve percent in excess of the amount needed to meet when due, the principal and interest payments on the Bonds, The tax levy herein provided will be irrepealable until all of the Bonds are paid, provided that at the time the City males its annual tax levies the City Administrator may certify to the County Auditor the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the County Auditor will thereupon reduce the levy collectible during such year by the amount so certified, Section 5, Refundin ~ Findin s~ Redem tion of Refi,~nded Bonds, 5,01. Refunding Refunded Bonds., The Series 2002A Bonds will be defeased on the date of issue of the Bonds and the Series 2002A Bonds maturing on and after February 1, 2014 will be fully redeemed on February 1, 2013, The Series 2002A Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the farm of Notice of Call for Redemption attached as Exhibit A to the Escrow Agreement has hereinafter defined which terms and conditions are hereby approved and incorporated herein by reference, The Series 2002B Bonds will be defeased on the date of issue of the Bands and the Series 2002B Bonds maturing on and after February 1, 2014 will be fully redeemed on February 1, 2013, The Series 2002B Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached as Exhibit B to the Escrow Agreement which terms and conditions are hereby approved and incorporated herein by reference, 365125v1 JSB EL185-11 14 5,02. Investment Yields and A licable Arbitra e Re ulations. No portion of the proceeds of the Bonds will 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 tlae purpose far which the Bonds were issued, and iii} in addition to the above, in an amount not greater than the lesser of 5% of the proceeds of the Bonds or $100,000, To this effect, any proceeds of the Bonds and any sums from time to time held in the Debt Service Fund for 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 the applicable federal arbitrage regulations may be invested without regard as to yield will not be invested at a yield in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after tal~ing into account any applicable temporary periods or minor portion made available under the federal arbitrage regulations, In addition, the proceeds of the Bands and money in the Fund wi11 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 Cade of 1986, as amended the "Code"}. 5,03, Pa ment at Maturit or Redem tion of Series 2002A and Series 2002B Bonds, It is hereby found and determined, based solely on the Verification Report of the Independent Accountant identified in the Escrow Agreement, that the monies available and appropriated to the Escrow Account will be sufficient, together with the permitted earnings on the investment of the Escrow Account, to pay at maturity or upon redemption all of the principal of and interest on the Series 2002A Bonds and the Series 2002B Bonds, 5,04. Purchase of Securities and Com Hance with the Act, Securities purchased from the monies in the Escrow Account will be limited to securities specified in Section 475,67, subdivision 8 of the Act, The Escrow Agent, as agent for the City, is hereby authorized and directed to purchase for and on behalf of the City and in its name, appropriate securities to fund the Escrow Account, Upon the Issuance and delivery of the Bonds, the securities so purchased will be deposited in the Escrow Account established herein and held pursuant to the terms of the Escrow Agreement and the Resolution, 5.05, General ~b_ l~atio~, Pledge, Far the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will be and are hereby irrevocably pledged, If the balance in the Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein, 5,06, Escrow ,A rg Bement, ~n or prior to the delivery of the Bonds, the Mayor and the City Administrator are hereby authorized and directed to execute on behalf of the City the 365125v1 JSa E~,18S-I I ~ 5 Escrow Agreement. The Escrow Agreement is hereby approved in substantially the form on file with the City on the date hereof, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor and City Administrator, in their discretion, shall determine, and the execution thereof by the Nlayor and City Administrator shall be conclusive evidence of such determination. 5,07, other Documents. In addition to the Escrow Agreement, the Mayor and City Administrator are hereby authorized and directed to execute such other documents which are necessary and appropriate to terminate the Lease-Purchase Agreement and defense the Series 2002A Bonds and the Series 2002B Bonds, including but not limited to a termination of the Ground Lease, termination of the Lease-Purchase Agreement and satisfaction of the Mortgage. Such documents are hereby approved in substantially the forms on file with the City on the date hereof, with such necessary and appropriate variations, omissions, and insertions as do not materially change tl~e substance thereof, or as the Mayor and City Administrator, in their discretion, shall determine, and the execution thereof by the Mayor and City Administrator shall be conclusive evidence of such determination, Section 6, Authentication of Transcri t, 6,01, Ci Proceedin s and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certif cater, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the boars and records in their custody and under their control, relating to the validity and marketability of the Bonds and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein, 6,02, Cex~if cation as to Official Statement. The Mayor and City Administrator are hereby authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement, 6,03, Payment of Costs of Issuance, The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses bother than amounts payable to Kennedy & Graven, Chartered, acting as bond counsels to U, S, Trust Company, in Minneapolis, Minnesota on the closing date for fu~~ther distribution as directed by the City's financial adviser, Ehlers & Associates, Inc, 365125v1 JSI3 ~L185~11 ~ 6 Section 7. Tax Covenant, 7,01, Tax~Exempt~Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not tape or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 198G, as amended the "Code"}, and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that maybe necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds, 7,02, Rebate, The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest an the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds, 7,03, Not Private Activity ~on~s, The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 7,04, ,Qualified TaxwExempt Ubli~ations, In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265~b}~3} of the Code, the City mares the following factual statements and representations; Code; ~a} the Bonds are not "private activity bonds" as defined in Section 141 of the fib} the City hereby designates the Bonds as "qualified tax~exempt obligations" for purposes of Section 265~b}~3} of the Code; ~c} the reasonably anticipated amount of tax~exempt obligations bother than private activity bonds, that are not qualified 501 ~c}~3}bonds} which will be issued by the City (and all subordinate entities of the City} during calendar year 2010 will not exceed $30,000,000; and (d} not more than $30,000,000 of obligations issued by the City during calendar year 2010 have been designated for purposes of Section 265~b}(3} of the Code, 3GS12Svl 1SB E1~18S-11 ~ 7 7.05, Procedural Requirements, The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section, Section 8. Book~Entr S stem Limited Obli anon of Cit , 8.01, DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond far each of the maturities set forth in Section 1,03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration boolcs kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ~"DTC"}, Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by tl~e Registrar in the name of Cede & Co., as nominee of DTC. 8,02, Partici ants, with respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository the "Participants"} or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to ~i} the accuracy of the records of DTC, Cede & Co, or any Participant with respect to any ownership interest in the Bonds, iii} the delivery to any Participant or any other person bother than a registered owner of Bonds, as shown by the registration books kept by the Registrar}, of any notice with respect to the Bonds, including any notice of redemption, or viii} the payment to any Participant or any other person, other than a registered owner of Bands, of any amount with respect to principal of, premium, if any, or interest on the Bonds, The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes, The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration boolcs kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal af, premium, if any, or interest on the Bands to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Administrator of a written notice to tlae effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co,," will refer to such new nominee of DTC; and upon receipt of such a notice, the City Administrator will promptly deliver a copy of the same to the Registrar and Paying Agent. 3b51~5v1 TSB EL185-1 I 18 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter"} which will govern payment of, premium, if any, and interest on the Bands and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to tape all action necessary for all representations of the City in the Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. $.04, Transfers Outside Boob-En~ry_~ystem, In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution, DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law, In such event, if no successor securities depositary is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof, 8,05, Pa ments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co,, as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's operational Arrangements, as set forth in the Representation Letter. Section 9. Continuin~Disclosure. 9,01, Ci Com Hance with Provisions of Continuin Disclosure Certificate, The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate, Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may tape such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. 9,02. Execution of Cantinuin Disclosure Certificate, "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Administrator and dated the date of issuance and delivery of the Bands, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 10, Defeasance. when all Bonds and all interest thereon, have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the 365125v1 JSB FL185-I l ~~ holders of the Bonds will cease, except that the pledge of the fi.~ll faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full, ~f any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The motion for the adoption of the foregoing resolution was duly seconded by Member and upon vote being taken thereon, the following voted in favor thereof; and the following voted against the same: whereupon said resolution was declared duly passed and adopted, 36S 125v1 JS13 ELl $S-I 1 ~~ STATE OF MINNESOTA ) COUNTY OF SHERBURN~) SS. CITY OF ELK RIVER ) ~, the undersigned, being the duly qualified and acting Clerk of the City of Elk River, Sherburne County, Minnesota, do hereby certify that r have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on March 15, 2010, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of its General Obligation Capital Improvement Plan Bonds, Series 201 OA of the City, wrTNESS My hand officially as such Clerk and the corporate seal of the City this day of March, 2010, City Clerl~ Elk River, Minnesota (SEAL) 3~51z5vI ,ISB ~1~185~1 I