HomeMy WebLinkAboutADDED - 10G G.O. ReFunding Bond
Preliminary
City of Prior Lake, Minnesota
G.O. Refunding Bonds of 2003
Current Refund 1996 Bonds
Dated 09/01/2003
PROJECT SUMMARY
Delivered 09/03/2003
SOURCES OF FUNDS
Par Amount of Bonds..............................................................,
Transfers from Prior Issue Debt Service Funds............................
Accrued Interest from 09/01/2003 to 09/03/2003.....................
TOTAL SOURCES....................................................................
USES OF FUNDS
Deposit to Current Refunding Fund............................................
Total Underwriter's Discount (1.600%)....................................
Costs of Issuance....................................................................
Deposit to Debt Service Fund...................................................
TOTAL USES..........................................................................
FLOW OF FUNDS DETAil
State and local Government Series (SLGS) rates for...................
Date of OMP Candidates..........................................................
PRIMARY PURPOSE FUND SOLUTION METHOD.........................
Total Cost of Investments........................................................
Interest Earnings @ 0.750%....................................................
TOTAL DRAWS..... ......................... ........................................
PRESENT VALUE ANALYSIS SUMMARY (NET TO NET)
Net PV Cashflow Savings @ 1.636%(Bond yield)......................
Accrued Interest Credit to Debt Service Fund.............................
Transfers from Prior Issue Debt Service Fund.............................
NET PRESENT VALUE BENEFIT.................................................
NET PV BENEFIT / $700,000 REFUNDED PRINCiPAL...............
NET PV BENEFIT / $715,000 REFUNDING PRINCiPAL............
BOND STATISTICS
Average Life...........................................................................
Average Coupon........................................................... ..........
Net Interest Cost (NIC)............................................................
Bond Yield for Arbitrage Purposes.............................................
True Interest Cost (TIC).................................................... .......
All Inclusive Cost (AIC)............................................................
Special Assessments Water Revenues Issue Summary
$465,000.00 $250,000.00 $715,000.00
412.69 597.54 1,010.23
39.03 20.94 59.97
$465,451.72 $250,618.48 $716,070.20
454,168.15 244,552.08 698,720.23
7,440.00 4,000.00 11,440.00
3,804.54 2,045.46 5,850.00
39.03 20.94 59.97
$465.451.72 $250,618.48 $716,070.20
Net Funded
$454,168.15
831.85
$455,000.00
Net Funded
$244,552.08
447.92
$245,000.00
Net Funded
$698,720.23
1,279.77
$700,000.00
15,201.26 8,574.26 23,775.52
39.03 20.94 59.97
(412.69) (597.54) (1,010.23)
$14,827.60 $7,997.66 $22,825.26
3.259% 3.264% 3.261%
3.189% 3.199% 3.192%
2.099 Years 2.090 Years 2.096 Years
1.6395647% 1.6387560% 1.6392827%
2.4016645% 2.4043062% 2.4025855%
1.6363042% 1.6363042% 1.6363042%
2.4263740% 2.4290932% 2.4273220%
2.8372453% 2.8418367% 2.8388460%
Northland Securities
Public Finance
File = PRIOR LAKE. SF-Issue Summary
7/18/2003 10:22 AM
Page 1
City of Prior Lake, Minnesota
G.O. Refunding Bonds of 2003
Current Refund 1996 Bonds
DEBT SERVICE COMPARISON
Date Total P+I Existing D/S Net New D/S Old Net D/S Savings
12/01/2003 . 324,150.00 324,090.03 323,139.77 (950.26)
12/01/2004 323,493.75 - 323,493.75 334,200.00 10,706.25
12/01/2005 212,075.00 . 212,075.00 219,800.00 7,725.00
12/01/2006 204,000.00 - 204,000.00 210,000.00 6,000.00
Total 739,568.75 324,150.00 1,063,658.78 1,087,139.77 23,480.99
Preliminary
PRESENT VALUE ANALYSIS SUMMARY (NET TO NET)
Gross PV Debt Service Savings.......... ................................. ...... ................. .......... 23,775.52
Net PV Cashflow Savings @ 1.636%(Bond Yield).. .......... .................... ................. 23,775.52
Accrued Interest Credit to Debt Service Fund......................................................... 59.97
Transfers from Prior Issue Debt Service Fund......................................................... (1,010.23)
NET PRESENT VALUE BENEFIT............................................................................ $22,825.26
NET PV BENEFIT / $738,835.49 PV REFUNDED DEBT SERViCE..............................
NET PV BENEFIT / $700,000 REFUNDED PRINCIPAL...........................................
NET PV BENEFIT / $715,000 REFUNDING PRINCIPAL.........................................
3.089%
3.261%
3.192%
REFUNDING BOND INFORMATION
Refunding Dated Date......................................................................................... 9/01/2003
Refunding Delivery Date...................... ....................... ......................................... 9/03/2003
Northland Securities
Public Finance
File = PRIOR LAKE. SF-Issue Summary
7/18/2003 10:22 AM
Page 2
Preliminary
City of Prior Lake, Minnesota
G.O. Refunding Bonds of 2003
Current Refund 1996 Bonds
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I FISCAL TOTAL
9/03/2003 . . . . .
6/01/2004 - . 8,096.25 8,096.25 -
12/01/2004 310,000.00 1.200% 5,397.50 315,397.50 323,493.75
6/01/2005 . . 3,537.50 3,537.50 .
12/01/2005 205,000.00 1.500% 3,537.50 208,537.50 212,075.00
6/01/2006 . - 2,000.00 2,000.00 .
12/01/2006 200,000.00 2.000% 2,000.00 202,000.00 204,000.00
Total 715,000.00 - 24,568.75 739,568.75 -
Dated......................................................................................................... .
Delivery Date...............................................................................................,
First Coupon Date.........................................................................................
Accrued Interest from 09/01/2003 to 09/03/2003...................... ......................
Bond Year Dollars........................................................... ............ ..................'
Average Life........................................................................................... ......
Average Coupon...........................................................................................
Net Interest Cost INIC)..................................................................................
True Interest Cost (TiC)................................... ..............................................
Bond Yield for Arbitrage Purposes...................................................................
Net Interest Cost........................................................................ ..................
Weighted Average Maturity............................................................................
9/01/2003
9/03/2003
6/01/2004
59.97
$1,498.75
2.096 Years
1.6392827%
2.4025855%
2.4273220%
1.6363042%
1.6396270%
2.091 Years
Northland Securities
Public finance
file = PRIOR LAKE.Sf-lssue Summary
7/18/2003 10:22 AM
Page 3
Preliminary
City of Prior Lake, Minnesota
G.O. Refunding Bonds of 1996
DEBT SERVICE TO MATURITY AND TO CALL
Date Refunded Bonds D/S To Call Principal Coupon Interest Refunded D/S fiSCAL TOTAL
9/03/2003 . . . . . . .
12/01/2003 455,000.00 455,000.00 - 4.700% - - .
6/01/2004 - . . - 11,115.00 11,115.00 .
12/01/2004 - - 195,000.00 4.800% 11,115.00 206,115.00 217,230.00
6/01/2005 - - - - 6,435.00 6,435.00 .
12/01/2005 - - 130,000.00 4.900% 6,435.00 136,435.00 142,870.00
6/01/2006 - - . - 3,250.00 3,250.00 -
12/01/2006 - . 130,000.00 5.000% 3,250.00 133,250.00 136,500.00
Total 455,000.00 455,000.00 455,000.00 - 41,600.00 496,600.00 .
YIELD STATISTICS
Average Life.............................................................................. 2.107 Years
Weighted Average Maturity {Par Basis).......................................... 2.102 Years
Average Coupon......................................................................... 4.33898310/0
REFUNDING BOND INFORMATION
Refunding Dated Date.................................................................
Refunding Delivery Date..............................................................
9/01/2003
9/03/2003
Northland Securities
Public Finance
File = PRIOR LAKE. Sf-Special Assessments
7/18/2003 10:22 AM
Page 4
City of Prior Lake, Minnesota
G.O. Refunding Bonds of 1996
DEBT SERVICE TO MATURITY AND TO CALL
Date Refunded Bonds D/S To Call Principal Coupon Interest Refunded D/S FISCAL TOTAL
9/03/2003 - - - - - - -
12/01/2003 245,000.00 245,000.00 - 4.700% - - -
6/01/2004 - - - - 5,985.00 5,985.00 -
12/01/2004 - - 105,000.00 4.800% 5,985.00 110,985.00 116,970.00
6/01/2005 - - - - 3,465.00 3,465.00 -
12/01/2005 - - 70,000.00 4.900% 3,465.00 73,465.00 76,930.00
6/01/2006 - - - - 1,750.00 1,750.00 -
12/01/2006 - - 70,000.00 5.000% 1,750.00 71,750.00 73,500.00
Total 245,000.00 245,000.00 245,000.00 - 22,400.00 267,400.00 -
Preliminary
YIELD STATISTICS
Average Life.............................................................................. 2.107 Years
Weighted Average Maturity (Par Basis).......................................... 2.102 Years
Average Coupon......................................................................... 4.33898310/0
REfUNDING BOND INfORMATION
Refunding Dated Date.................................................................
Refunding Delivery Date..............................................................
9/01/2003
9/03/2003
Northland Securities
Public finance
file = PRIOR LAKE. Sf-Water Revenues
7/18/2003 10:22 AM
Page 5
City of Prior Lake, Minnesota
G.O. Refunding Bonds of 2003
Current Refund 1996 Bonds
CURRENT REFUNDING ESCROW
Date Principal Rate Interest Receipts Disbursements Cash Balance
9/03/2003 . - . - - -
12/01/2003 698,720.23 0.7500000% 1,279.77 700,000.00 700,000.00 -
Total 698,720.23 - 1,279.77 700,000.00 700,000.00 -
Preliminary
INVESTMENT PARAMETERS
Investment Model [PV, GIC, or Securities]....... .................. ...................................
Default investment yield target...........................................................................
PV Discount
User Defined
Cost of Investments Purchased with Bond Proceeds..............................................
Total Cost of Investments..................................................................................
698,720.23
$698,720.23
Target Cost of Investments at bond yield........................................ .....................
Actual positive or (negative) arbitrage..................................................................
$697,217.04
(1,503.19)
Yield to Receipt................................................................................................
Yield for Arbitrage Purposes...............................................................................
0.7500048%
1.6363042%
State and Local Government Series (SLGS) rates for..............................................
7/17/2003
Northland Securities
Public finance
file = PRIOR LAKE. Sf-Issue Summary
7/18/2003 10:22 AM
Page 6
City of Prior Lake, Minnesota
G.O. Refunding Bonds of 2003
Current Refund 1996 Bonds
REFUNDING SUMMARY OF ASSUMPTIONS
Dated 09/01/2003
DATE AND TERM STRUCTURE
Dated................................................................................... .
Delivery Date........... ..............................................................,
First Coupon Date...................................................................
Frequency of Interest Payments................................................
Frequency of Principal Amortization Payments............................
First Serial Maturity Date.........................................................
Final Serial Maturity Date.........................................................
COSTS OF ISSUANCE DETAIL
Bond Counsel.........................................................................
Rating Agency Fee............................. .....................................
Miscellaneous.......... ............................. ..................................
FUND ASSUMPTIONS
PRIMARY PURPOSE FUND
First Deposit Date...................................................................
Final Draw Date......................................................................
Frequency of Draws. ...............................................................
INVESTMENT PARAMETERS
Default investment yield target.................................................
Transfer amounts in excess of fund requirements to
Yield to Receipt......................................................................
ISSUES REFUNDED
Preliminary
Delivered 09/03/2003
9/01/2003
9/03/2003
6/01/2004
2 Per Year
1 Per Year
12/01/2004
12/01/2006
$2,500.00
$3,250.00
$100.00
9/03/2003
12/01/2003
Irregular
User Defined
Debt Service Fund
0.7500048%
Northland Securities
Public Finance
File = PRIOR LAKE. SF-Issue Summary
7/18/200310:22 AM
Page 7
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE
CITY OF PRIOR LAKE, MINNESOTA
HELD: July 21,2003
Pursuant to due call and notice thereof, a regular or special meeting of the City Council
of the City of Prior Lake, Scott County, Minnesota, was duly called and held at the City Hall on
July 21, 2003, at 7:30 P.M., for the purpose, in part, of authorizing the issuance and awarding the
sale of$715,000 General Obligation Refunding Bonds of2003.
The following members were present:
and the following were absent:
introduced the following resolution and moved its adoption:
Member
RESOLUTION NUMBER 03-
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $715,000 GENERAL
OBLIGATION REFUNDING BONDS OF 2003, PLEDGING FOR THE SECURITY
THEREOF SPECIAL ASSESSMENTS, WATER AND SEWER SYSTEM NET REVENUES
AND LEVYING A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City of Prior Lake, Minnesota (the "City") owns and
operates a municipal water and sewer system as a combined revenue producing public utility (the
"System") and the net revenues of the System are pledged to the payment of the City's
outstanding $1,885,000 original principal amount of General Obligation Crossover Refunding
Bonds, Series 1998A, dated March 1, 1998 (the "1998 Bonds"); and
B. WHEREAS, the City has heretofore issued General Obligation Refunding
Bonds of 1996, dated October 1, 1996 (the "Prior Bonds"), for the purpose of providing money
to refinance bonds issued to finance (i) various municipal improvements (the "Improvement
Refunding Portion of the Prior Bonds") and (ii) various improvements to the System (the "Water
Revenue Refunding Portion of the Prior Bonds"); and
C. WHEREAS, the principal and interest of the 1998 Bonds and the Water
Revenue Refunding Portion of the Prior Bonds (the "Outstanding Bonds") are payable from the
net revenues of the System and constitute a prior lien thereon; and
D. WHEREAS, $700,000 in principal amount of the Prior Bonds which
mature on and after December 1, 2004, are subject to redemption and prepayment at the option
of the City on December 1,2003, at a price of par plus accrued interest, as provided in the
resolution of the City Council, adopted October 10, 1996, authorizing the issuance of the Prior
Bonds (the "Prior Resolution"); and
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E. WHEREAS, the City Council deems it desirable and in the best interests
of the City, in order to reduce debt service costs, to call for redemption and prepayment on
December 1,2003, the Prior Bonds which mature on December 1,2004, and thereafter, all in
accordance with the Prior Resolution; and
F. WHEREAS, the City Council determines and declares that it is necessary
and expedient to issue $715,000 General Obligation Refunding Bonds of2003 (the "Bonds" or
individually, a "Bond"), pursuant to Minnesota Statutes, Chapter 475, to provide funds to pay on
December 1,2003, the Prior Bonds which then remain outstanding (the "Refunding"); and
G. WHEREAS, no other obligations have been sold pursuant to a private sale
within the last twelve (12) calendar months of the date hereof which when combined with this
issue would exceed the $1,200,000 limitation on negotiated sales as required by Minnesota
Statutes, Section 475.60, Subdivision 2(2); and
H. WHEREAS, it is in the best interests of the City that the Bonds be issued
in book-entry form as hereinafter provided; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Prior Lake, Minnesota, as follows:
1. Acceptance of Offer. The offer of Northland Securities, Inc. (the "Purchaser"), to
purchase the Bonds in accordance with the terms and at the rates of interest hereinafter set forth,
and to pay therefor the sum of $ , plus interest accrued to settlement, is hereby
accepted.
2. Terms of Bonds.
(a) Original Issue Date: Denominations: Maturities: Term Bond Option. The Bonds
shall be dated September 1,2003, as the date of original issue and shall be issued forthwith on or
after such date in fully registered form. The Bonds shall be numbered from R-l upward in the
denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds
shall mature on December 1 in the years and amounts as follows:
Year
Amount
2004
2005
2006
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).
(b) Book Entry Only System. The Depository Trust Company, a limited purpose
trust company organized under the laws of the State of New York or any of its successors or its
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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 for purposes of
complying with this requirement under paragraphs 5 and 10 Authorized Denominations
for any Bond shall be deemed to be limited during the Book Entry Only Period to the
outstanding principal amount of that Bond.
(ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond
register maintained by the Bond Registrar (as hereinafter defmed) 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 fmancial
institution for which the Depository holds Bonds as securities depository (the
"Participant") or the person for which a Participant holds an interest in the Bonds shown
on the books and records of the Participant (the "Beneficial Owner"). Without limiting
the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have
any such responsibility or obligation with respect to (A) the accuracy of the records of the
Depository, the Nominee or any Participant with respect to any ownership interest in the
Bonds, or (B) the delivery to any Participant, any 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 Holder 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 the Holder or the Holders of the Bonds as shown on the 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.
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(v) Upon delivery by the Depository to the Bond Registrar of written notice to
the effect that the Depository has determined to substitute a new Nominee in place of the
existing Nominee, and subject to the transfer provisions in paragraph 11, references to the
Nominee hereunder shall refer to such new Nominee.
(vi) So long as any Bond is registered in the name of a Nominee, all payments
with respect to the principal of and premium, if any, and interest on such Bond and all
notices with respect to such Bond shall be made and given, respectively, by the Bond
Registrar or City, as the case may be, to the Depository as provided in the Letter of
Representations to the Depository required by the Depository as a condition to its acting
as book-entry Depository for the Bonds (said Letter of Representations, together with any
replacement thereof or amendment or substitute thereto, including any standard
procedures or policies referenced therein or applicable thereto respecting the procedures
and other matters relating to the Depository's role as book-entry Depository for the
Bonds, collectively hereinafter referred to as the "Letter of Representations").
(vii) All transfers of beneficial ownership interests in each Bond issued in
book-entry form shall be limited in principal amount to Authorized Denominations and
shall be effected by procedures by the Depository with the Participants for recording and
transferring the ownership of beneficial interests in such Bonds.
(viii) In connection with any notice or other communication to be provided to
the Holders pursuant to this Resolution by the City or 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 of such special record date to the extent possible.
(ix) Any successor Bond Registrar in its written acceptance of its duties under
this Resolution and any paying agency/bond registrar agreement, shall agree to take any
actions necessary from time to time to comply with the requirements of the Letter of
Representations.
(x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of
surrendering the Bonds for a Bond of a lesser denomination as provided in paragraph 5
hereof, make a notation of the reduction in principal amount on the panel provided on the
Bond stating the amount so redeemed.
(c) Termination of Book-Entry Only System. Discontinuance of a particular
Depository's services and termination of the book-entry only system may be effected as follows:
(i) The Depository may determine to discontinue providing its services with
respect to the Bonds at any time by giving written notice to the City and discharging its
responsibilities with respect thereto under applicable law. The City may terminate the
services of the Depository with respect to the Bond if it determines that the Depository is
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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 or the Beneficial Owners.
(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 or the Beneficial Owners of the
Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds
shall no longer be registered as being registered in the bond register in the name of the
Nominee, but may be registered in whatever name or names the Holder of the Bonds
shall designate at that time, in accordance with paragraph 12. To the extent that the
Beneficial Owners are designated as the transferee by the Holders, in accordance with
paragraph 10 hereof, the Bonds will be delivered to the Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of
paragraph 11.
(d) Letter of Representations. The provisions in the Letter of Representations are
incorporated herein by reference and made a part of the resolution, and if and to the extent any
such provisions are inconsistent with the other provisions of this resolution, the provisions in the
Letter of Representations shall control.
3. Allocation of Bonds to Improvement Refunding Portion of the Prior Bonds and
Water Revenue Refunding Portion of the Prior Bonds: Allocation of Prepayments to Portions of
Debt Service. The aggregate principal amount of $ maturing in each of the years
and amounts hereinafter set forth are issued to refund the Improvement Refunding Portion of the
Prior Bonds (the "Improvement Refunding Portion"). The aggregate principal amount of
$ maturing in each of the years and amounts hereinafter set forth are issued to refund
the Water Revenue Refunding Portion of the Prior Bonds (the "Water Revenue Refunding
Portion"):
Year
Improvement
Refunding Portion
(Amount)
Water Revenue
Refunding Portion
(Amount)
2004
2005
2006
If Bonds are prepaid, the prepayments shall be allocated to the portions of debt service
(and hence allocated to the payment of Bonds treated as relating to a particular portion of debt
service) as provided in this paragraph. If the source of prepayment is the general fund of the
City, or other generally available source, the prepayment may be allocated to either or both of the
portions of debt service in such amounts as the City shall determine. If the source of the
prepayment is special assessments pledged to and taxes levied for the Improvement Refunding
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Portion, the prepayment shall be allocated to the Improvement Refunding Portion of debt
service. If the source of a prepayment is excess net revenues of the System pledged to the Water
Revenue Refunding Portion, the prepayment shall be allocated to the Water Revenue Refunding
Portion of debt service.
4. Purpose. The Bonds (together with other available funds, ifany, appropriated in
paragraph 16) shall provide funds to fmance the Refunding. It is hereby found, determined and
declared that the Refunding is pursuant to Minnesota Statutes, Section 475.67 and shall result in
a reduction of debt service cost to the City.
5. Interest. The Bonds shall bear interest payable semiannually on June 1 and
December 1 of each year (each, an "Interest Payment Date"), commencing June 1, 2004,
calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per
annum set forth opposite the maturity years as follows:
Maturity Year Interest Rate
2004
2005
2006
6. No Redemption. The Bonds shall not be subject to redemption and prepayment
prior to their stated maturity dates.
7. Bond Registrar. U.S. Bank National Association, in St. Paul, Minnesota, is
appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond
Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all
pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith.
The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is
duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or
record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 13 of this
resolution.
8. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of
Authentication, the form of Assignment and the registration information thereon, shall be in
substantially the following form:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
SCOTT COUNTY
CITY OF PRIOR LAKE
R-
$
GENERAL OBLIGATION REFUNDING BOND OF 2003
Maturity Date
Date of Original Issue
CUSIP
Interest Rate
December 1,
September 1, 2003
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
THE CITY OF PRIOR LAKE, SCOTT COUNTY, MINNESOTA (the "Issuer"), certifies
that it is indebted and for value received promises to pay to the registered owner specified above,
or registered assigns, in the manner hereinafter set forth, the principal amount specified above,
on the maturity date specified above, without option of redemption, and to pay interest thereon
semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"),
commencing June 1, 2004, at the rate per annum specified above (calculated on the basis of a
360-day year of twelve 30-day months) until the principal sum is paid or has been provided for.
This Bond will bear interest from the most recent Interest Payment Date to which interest has
been paid or, if no interest has been paid, from the date of original issue hereof. The principal of
and premium, if any, on this Bond are payable upon presentation and surrender hereof at the
principal office of U.S. Bank National Association, in St. Paul, Minnesota (the "Bond
Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer.
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 Issuer 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 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 premium, if any, and
interest on this Bond are payable in lawful money of the United States of America So long as
this Bond is registered in the name of the Depository or its Nominee as provided in the
Resolution hereinafter described, and as those terms are defined therein, payment of principal of,
premium, if any, and interest on this Bond and notice with respect thereto shall be made as
provided in Letter of Representations, as defined in the Resolution, and surrender of this Bond
shall not be required for payment of the redemption price upon a partial redemption of this Bond.
Until termination of the book-entry only system pursuant to the Resolution, Bonds may only be
registered in the name of the Depository or its Nominee.
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Issuance~ Purpose~ General Obligation. This Bond is one of an issue in the total principal
amount of $715,000 (the "Bonds"), all oflike date of original issue and tenor, except as to
number, maturity, interest rate and denomination, issued pursuant to and in full conformity with
the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by the
City Council on July 21,2003 (the "Resolution"), for the purpose of providing money to redeem
on December 1,2003, the outstanding General Obligation Refunding Bonds of 1996, dated
October 1, 1996. This Bond is payable out of the General Obligation Refunding Bonds of2003
Fund of the Issuer. lbis Bond constitutes a general obligation of the Issuer, 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 Issuer have been and are
hereby irrevocably pledged.
Denominations: Exchange: Resolution. The Bonds are issuable solely in fully registered
form in the denominations of $5,000 and integral multiples thereof of a single maturity and are
exchangeable for fully registered Bonds of other authorized denominations in equal aggregate
principal amounts at the principal office of the Bond Registrar, but only in the manner and
subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution
for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on
file in the principal office of the Bond Registrar.
Transfer. lbis 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 hereofto the Bond Registrar, all subject to the terms and conditions provided in the
Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond
Registrar. Thereupon the Issuer 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 Issuer 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 Issuer nor the Bond Registrar shall be affected by notice to the contrary.
Authentication. This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security unless the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Qualified Tax-Exempt Obligation. This Bond has been designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended.
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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 happen 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; that the
Issuer has covenanted and agreed with the Holders of the Bonds that it will impose and collect
charges for the service, use and availability of its municipal water and sewer system at the times
and in amounts necessary to produce net revenues, together with other sums pledged to the
payment of the "Water Revenue Refunding Portion" of the Bonds, as defined in the Resolution,
adequate to pay all principal and interest when due on the Water Revenue Refunding Portion of
the Bonds; and that the Issuer will levy a direct, annual, irrepealable ad valorem tax upon all of
the taxable property of the Issuer, without limitation as to rate or amount, for the years and in
amounts sufficient to pay the principal and interest on Water Revenue Refunding Portion of the
Bonds as they respectively become due, if the net revenues from the municipal water and sewer
system and any other sums irrevocably appropriated to the Debt Service Account are insufficient
therefor; and that this Bond, together with all other debts of the Issuer outstanding on the date of
original issue hereof and the date of its issuance and delivery to the original purchaser, does not
exceed any constitutional or statutory limitation of indebtedness.
IN WITNESS WHEREOF, the City of Prior Lake, Scott County, Minnesota, by its City
Council has caused this Bond to be executed on its behalf by the facsimile signatures of its
Mayor and its Manager.
Date of Registration:
Registrable by: u.S. BANK
NATIONAL ASSOCIATION
Payable at: u.S. BANK NATIONAL
ASSOCIATION
BOND REGISTRAR'S CERTIFICATE
OF AUTHENTICATION
CITY OF PRIOR LAKE,
SCOTT COUNTY, MINNESOTA
This Bond is one of the Bonds
described in the Resolution
mentioned within.
Isl Facsimile
u.S. BANK NATIONAL
ASSOCIATION
St. Paul, Minnesota,
Bond Registrar
Mayor
Isl Facsimile
Manager
By
Authorized Signature
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond, shall
be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
IT TEN - as joint tenants with right of survivorship and not as tenants in common
UTMA - as custodian for under the
Uniform
(Cust)
Transfers to Minors Act
(Minor)
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and does hereby irrevocably constitute and appoint
attorney to transfer the Bond on the books kept for the registration thereof, with full power of
substitution in the premises.
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 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.)
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9. Execution: Temporary Bonds. The Bonds shall be executed on behalf of the City
by the signatures of its Mayor and Manager and be sealed with the seal of the City; provided,
however, that the seal of the City may be a printed facsimile; and provided further that both of
such signatures may be printed facsimiles and the corporate seal may be omitted on the Bonds as
permitted by law. In the event of disability or resignation or other absence of either such officer,
the Bonds may be signed by the manual or facsimile signature of that officer who may act on
behalf of such absent or disabled officer. In case either such officer whose signature or facsimile
of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of
the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes,
the same as ifhe 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 Mayor and Manager. Such temporary bonds shall, upon the printing of the
definitive bonds and the execution thereof, be exchanged therefor and canceled.
10. Authentication. No Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit under this resolution unless a Certificate of Authentication on
such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certificates of Authentication on different
Bonds need not be signed by the same person. The Bond Registrar shall authenticate the
signatures of officers of the City on each Bond by execution of the Certificate of Authentication
on the Bond and by inserting as the date of registration in the space provided the date on which
the Bond is authenticated, except that for purposes of delivering the original Bonds to the
Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue,
which date is September 1, 2003. The Certificate of Authentication so executed on each Bond
shall be conclusive evidence that it has been authenticated and delivered under this resolution.
11. Registration: Transfer: Exchange. The City will cause to be kept at the principal
office of the Bond Registrar a bond register in which, subject to such reasonable regulations as
the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds
and the registration of transfers of Bonds entitled to be registered or transferred as herein
provided.
Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the
City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of
registration (as provided in paragraph 10) of, and deliver, in the name of the designated
transferee or transferees, one or more new Bonds of any authorized denomination or
denominations of a like aggregate principal amount, having the same stated maturity and interest
rate, as requested by the transferor; provided, however, that no Bond may be registered in blank
or in the name of "bearer" or similar designation.
At the option of the Holder, Bonds may be exchanged for Bonds of any authorized
denomination or denominations of a like aggregate principal amount and stated maturity, upon
surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever
any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond
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Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the
Holder 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 general
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 Holder thereof or the Holder'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. The Manager is hereby
authorized to negotiate and execute the terms of said agreement.
12. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in
exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Bond.
13. Interest Payment; Record Date. Interest on any Bond shall be paid on each
Interest Payment Date by check or draft mailed to the person in whose name the Bond is
registered (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 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 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 days prior to the
Special Record Date.
14. Treatment of Registered Owner. The City and Bond Registrar may treat the
person in whose name any Bond is registered as the owner of such Bond for the purpose of
receiving payment of principal of and premium, if any, and interest (subj ect to the payment
provisions in paragraph 13) 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.
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15. Deliverv: Application of Proceeds. The Bonds when so prepared and executed
shall be delivered by the Manager to the Purchaser upon receipt of the purchase price, and the
Purchaser shall not be obliged to see to the proper application thereof.
16. Fund. Accounts and Subaccounts.
(a) Bond proceeds in the amount of$ shall be deposited in the
Improvement Subaccount and Bond proceeds in the amount of $ shall be
deposited in the Water Revenue Subaccount of the Debt Service Account heretofore created by
the Prior Resolution for the Prior Bonds in the General Obligation Refunding Bonds of 1996
Fund, which amounts, together with all other funds held therein is sufficient to prepay the
outstanding Prior Bonds on December 1,2003 (the "Redemption Fund").
(b) There has heretofore been created an Operation and Maintenance Account into
which is paid all gross revenues and earnings derived from the operation of the System,
including all charges for service, use, availability and connection to the System, when collected,
and all moneys received from the sale of any facilities or equipment of the System or any by-
products thereof. From the Operation and Maintenance Account there is paid all the normal,
reasonable and current costs of operating and maintaining the System. Current expenses include
the reasonable and necessary costs of operating, maintaining and insuring the System, salaries,
wages, costs of materials and supplies, necessary legal, engineering and auditing services, and all
other items, which, by sound accounting practices, constitute normal, reasonable and current
costs of operation and maintenance, but excluding any allowance for depreciation, extraordinary
repairs and payments into any debt service account. All moneys remaining in the Operation and
Maintenance Account after paying or providing for the foregoing items constitute and are
referred to in this resolution as "net revenues".
(c) There is hereby created a special fund to be designated the "General Obligation
Refunding Bonds of 2003 Fund" (the "Fund") to be administered and maintained by the Manager
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 have been fully paid. There shall be maintained in the
Fund separate accounts, designated the "Payment Account" and "Debt Service Account", to
which shall be credited and debited all funds as hereinafter set forth. The Manager of the City
and all officers and employees concerned therewith shall establish and maintain flllancial records
of the receipts and disbursements in accordance with this resolution. In such records there shall
be established and maintained accounts of the Fund for the purposes and in the amounts as
follows:
(i) Payment Account. There shall be deposited in the Payment Account
$ of remaining Bond proceeds which shall be used to pay the costs of
issuing the Bonds. Any Bond proceeds remaining in the Payment Account after all costs
of issuance have been paid or provided for shall be transferred to the Debt Service
Account.
eii) Debt Service Account. There shall be maintained two separate
subaccounts in the Debt Service Account to be designated the "Improvement
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1 547468vl
Subaccount" and the "Water Revenue Subaccount". There are hereby irrevocably
appropriated and pledged to, and there shall be credited to, the separate subaccounts of
the Debt Service Account:
(a) Improvement Subaccount. To the Improvement Subaccount there
shall be credited: (i) all uncollected special assessments pledged to the payment
of the Improvement Refunding Portion of the Prior Bonds; (ii) a pro rata share of
accrued interest received upon delivery of the Bonds; (iii) any collections of all
taxes herein or hereafter levied for the payment of the Improvement Refunding
Portion of the Bonds; (iv) any collections of all taxes heretofore levied for the
payment of the Improvement Refunding Portion of the Prior Bonds which are not
needed to pay the Improvement Refunding Portion of the Prior Bonds as a result
of the Refunding; (v) a pro rata share of funds remaining in the Payment Account
after all costs of issuing the Bonds have been paid; (vi) all investment earnings on
funds held in the Improvement Subaccount; and (vii) any and all other moneys
which are properly available and are appropriated by the governing body of the
City to the Improvement Subaccount. The Improvement Subaccount shall be
used solely to pay the principal and interest and any premiums for redemption of
the Improvement Refunding Portion of the Bonds and any other general
obligation bonds of the City hereafter issued by the City and made payable from
said subaccount as provided by law.
(b) Water Revenue Subaccount. To the Water Revenue Subaccount
there shall be credited: (i) the net revenues of the System not otherwise pledged
and applied to the payment of other obligations of the City, in an amount, together
with other funds which may herein or hereafter from time to time be irrevocably
appropriated to the account sufficient to meet the requirements of Minnesota
Statutes, Section 475.61 for the payment of the principal and interest of the Water
Revenue Refunding Portion of the Bonds; (ii) a pro rata share of accrued interest
received upon delivery of the Bonds; (iii) all collections of taxes which may
hereafter be levied in the event that net revenues of the System and other funds
herein pledged to the payment of the principal and interest of the Water Revenue
Refunding Portion of the Bonds are insufficient therefor; (iv) a pro rata share of
funds remaining in the Payment Account after all costs of issuing the Bonds have
been paid; (v) all investment earnings on funds held in the Water Revenue
Subaccount; and (vi) any and all other moneys which are properly available and
are appropriated by the governing body of the City to the Water Revenue
Subaccount. The Water Revenue Subaccount shall be used solely to pay the
principal and interest and any premiums for redemption of the Water Revenue
Refunding Portion of the Bonds and any other general obligation bonds of the
City hereafter issued by the City and made payable from said subaccount as
provided by law.
No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire
higher yielding investments or to replace funds which were used directly or indirectly to acquire
higher yielding investments, except (1) for a reasonable temporary period until such proceeds are
needed for the purpose for which the Bonds were issued and (2) in addition to the above in an
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I 547468vl
amount not greater than the lesser of five percent 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 Payment
Account, Operation and Maintenance Account or Debt Service Account (or any other City
account which will be used to pay principal or interest to become due on the bonds payable
therefrom) in excess of amounts which under then applicable federal arbitrage regulations may
be invested without regard to yield shall not be invested at a yield in excess of the applicable
yield restrictions imposed by said arbitrage regulations on such investments after taking into
account any applicable "temporary periods" or "minor portion" made available under the federal
arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued
by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and
to the extent that such investment would cause the Bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code").
17. Special Assessments. There has heretofore been levied special assessments for
the improvements refinanced by the Improvement Refunding Portion of the Prior Bonds and the
special assessments which are not needed to pay the Improvement Refunding Portion of the Prior
Bonds as a result of the Refunding are hereby pledged to the payment of the Improvement
Refunding Portion of the Bonds.
18. Tax Levy: Coverage Test: Cancellation of Certain Tax Levies. To provide
moneys for payment of the principal and interest on the Improvement Refunding Portion of the
Bonds there is hereby levied upon all of the taxable property in the City a direct annual ad
valorem tax which shall be spread upon the tax rolls and collected with and as part of other
general property taxes in the City for the years and in the amounts as follows:
Year of Tax LeVY
Year of Tax Collection
Amount
2003-2005
2004-2006
See attached
The tax levies are such that if collected in full they, together with estimated collections of
other revenues herein pledged for the payment of the Improvement Refunding Portion of the
Bonds, will produce at least five percent in excess of the amount needed to meet when due the
principal and interest payments on the Improvement Refunding Portion of the Bonds. The tax
levies shall be irrepealable so long as any of the Improvement Refunding Portion of the Bonds
are outstanding and unpaid, provided that the City reserves the right and power to reduce the
levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61,
Subdivision 3.
Upon payment of the Improvement Refunding Portion of the Prior Bonds, the uncollected
taxes pledged in the Prior Resolution authorizing the issuance of the Improvement Refunding
Portion of the Prior Bonds, shall be canceled.
19. Sufficiency of Net Revenues: Coverage Test. It is hereby found, determined and
declared that the net revenues of the System are sufficient in amount to pay when due the
principal of and interest on the Water Revenue Refunding Portion of the Bonds and the
Outstanding Bonds and a sum at least five percent in excess thereof, and the net revenues of the
System are hereby pledged for the payment of the Water Revenue Refunding Portion of the
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Bonds and the Outstanding Bonds and shall be applied for that purpose, but solely to the extent
required to meet the principal and interest requirements of the Water Revenue Refunding Portion
of the Bonds as the same become due. Nothing contained herein shall be deemed to preclude the
City from making further pledges and appropriations of the net revenues of the System for the
payment of other or additional obligations of the City, provided that it has first been determined
by the City Council that the estimated net revenues of the System will be sufficient in addition to
all other sources, for the payment of the Water Revenue Refunding Portion of the Bonds and
such additional obligations and any such pledge and appropriation of the net revenues of the
System may be made superior or subordinate to, or on a parity with the pledge and appropriation
herein.
20. Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes,
Section 444.075, the City hereby covenants and agrees with the Holders of the Water Revenue
Refunding Portion of the Bonds that it will impose and collect charges for the service, use,
availability and connection to the System at the times and in the amounts required to produce net
revenues adequate to pay all principal and interest when due on the Water Revenue Refunding
Portion of the Bonds and the Outstanding Bonds.
21. Excess Net Revenues. Net revenues in excess of those required for the foregoing
may be used for any proper purpose
22. Defeasance. When all Bonds have been discharged as provided in this paragraph,
all pledges, covenants and other rights granted by this resolution to the registered Holders of the
Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with
respect to any Bonds which are due on any date by irrevocably depositing with the Bond
Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond
should not be paid when due, it may nevertheless be discharged by depositing with the Bond
Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such
deposit. The City may also at any time discharge its obligations with respect to any Bonds,
subject to the provisions of law now or hereafter authorizing and regulating such action, by
depositing irrevocably in escrow, with a suitable banking institution qualified by law as an
escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67,
Subdivision 8, bearing interest payable at such times and at such rates and maturing on such
dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to
become due thereon to maturity or, if notice of redemption as herein required has been duly
provided for, to such earlier redemption date.
23. 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, credit and taxing
powers of the City shall be and are hereby irrevocably pledged. If the funds irrevocably
appropriated to the Debt Service Account shall at any time be insufficient to pay principal and
interest on the Bonds when due, the City covenants and agrees to levy, without limitation as to
rate or amount an ad valorem tax upon all taxable property in the City sufficient to pay such
principal and interest as it becomes due. If the balance in the Debt Service Account is ever
insufficient to pay all principal and interest then due on the Bonds and any other bonds payable
therefrom, the deficiency shall be promptly paid out of any other funds of the City which are
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1547468vl
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.
24. Notice of Call for Redemption of the Prior Bonds. The Manager is hereby
authorized and directed to give mailed notice of redemption prior to December 1, 2003 to the
paying agent for the Prior Bonds and to all registered holders of the Prior Bonds. The notice of
redemption shall be in substantially the form attached hereto as Exhibit A.
25. Prior Bonds; Security. Until retirement of the Prior Bonds, all provisions
theretofore made for the security thereof shall be observed by the City and all of its officers and
agents.
26. Certificates of Registration. The Manager is hereby directed to file a certified
copy of this resolution with the County Auditor of Scott County, Minneso~ together with such
other information as the County Auditor shall require, and to obtain from the County Auditor a
certificate that the Bonds have been entered in the County Auditors Bond Register, that the tax
levy for the Improvement Refunding Portion of the Prior Bonds has been canceled and that the
tax levy required by law for the Improvement Refunding Portion of the Bonds has been made.
27. 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 fmancial 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.
28. Negative Covenant as to Use of Proceeds and Projects. The City hereby
covenants not to use the proceeds of the Bonds or to use the projects refinanced by the Bonds, or
to cause or permit them to be used, or to enter into any deferred payment arrangements for the
cost of the projects refmanced by the Bonds, 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.
29. 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.
For purposes of qualifying for the exception to the federal arbitrage rebate requirements
for governmental units issuing $5,000,000 or less of bonds, the City hereby finds, determines and
declares:
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1 547468vl
(a) the Bonds are issued by a governmental unit with general taxing
powers;
(b) no Bond is a private activity bond;
(c) ninety-five percent 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
(d) the aggregate face amount of all tax -exempt bonds (other than
private activity bonds) issued by the City (and all subordinate entities thereof, and
all entities treated as one issuer with the City) during the calendar year in which
the Bonds are issued and outstanding at one time is not reasonably expected to
exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code.
Furthermore:
(a) there shall not be taken into account for purposes of said
$5,000,000 limit any bond issued to refund (other than to advance refund) any
bond to the extent the amount of the refunding bond does not exceed the
outstanding amount of the refunded bond;
(b) the aggregate face amount of the Bonds does not exceed
$5,000,000;
(c) each of the Prior Bonds was issued as part of an issue which was
treated as meeting the rebate requirements by reason of the exception for
governmental units issuing $5,000,000 or less of bonds;
(d) the average maturity of the Bonds does not exceed the combined
average maturity of the Prior Bonds; and
(e) no part of the Bonds has a maturity date which is later than the date
which is thirty years after the dates the Prior Bonds were issued.
30. Designation of ~ualified Tax-Exempt Obligations; Issuance Limit. In order to
qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3)
of the Code, the City hereby makes the following factual statements and representations:
(a) the Bonds are issued after August 7, 1986;
(b) the Bonds are not "private activity bonds" as defined in Section
141 of the Code;
(c) the City hereby designates the Bonds as "qualified tax-exempt
obligations" for purposes of Section 265(b)(3) of the Code;
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(d) the reasonably anticipated amount of tax-exempt obligations (other
than private activity bonds, treating qualified 501 (c)(3) bonds as not being private
activity bonds) which will be issued by the City (and all entities treated as one
issuer with the City, and all subordinate entities whose obligations are treated as
issued by the City) during this calendar year 2003 will not exceed $10,000,000;
(e) not more than $10,000,000 of obligations issued by the City during
this calendar year 2003 have been designated for purposes of Section 265(b )(3) of
the Code;
(f) the aggregate face amount of the Bonds does not exceed
$10,000,000; and
(g) the Bonds are issued to refund, and not to "advance refund" the
Prior Bonds within the meaning of Section l49(d)(5) of the Code, and shall not be
taken into account under the $10,000,000 issuance limit to the extent the Bonds
do not exceed the outstanding amount of the Prior Bonds.
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.
31. 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.
32. 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.
The motion for the adoption of the foregoing resolution was duly seconded by member
and, after a full discussion thereof and upon a vote being taken thereon,
the following voted in favor thereof:
and the following voted against the same:
Whereupon the resolution was declared duly passed and adopted.
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STATE OF MINNESOTA
COUNTY OF SCOTT
CITY OF PRIOR LAKE
I, the undersigned, being the duly qualified and acting Manager of the City of
Prior Lake, Minnesota, DO HEREBY CERTIFY that I have compared the attached and
foregoing extract of minutes with the original thereof on file in my office, and that the same is a
full, true and complete transcript of the minutes of a meeting of the City Council duly called and
held on the date therein indicated, insofar as such minutes relate to providing for the issuance
and sale of $715,000 General Obligation Refunding Bonds of2003.
WIlNESS my hand on July 21,2003.
Manager
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EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
GENERAL OBLIGATION REFUNDING BONDS OF 1996
CITY OF PRIOR LAKE,
SCOTT COUNTY, MINNESOTA
NOTICE IS HEREBY GIVEN that by order of the City Council of the City of Prior Lake, Scott
County, Minnesota, there have been called for redemption and prepayment on
December 1, 2003
those outstanding bonds of the City designated as General Obligation Refunding Bonds of 1996,
dated October 1, 1996, having stated maturity dates in the years 2004 through 2006, and totaling
$700,000 in principal amount. The bonds are being called at a price of par plus accrued interest
to December 1,2003, on which date all interest on the bonds will cease to accrue. Holders of the
bonds hereby called for redemption are requested to present their bonds for payment at u.S.
Bank National Association (formerly, First Trust National Association), Attention: Paying
Agent Services, 180 East Fifth Street, Saint Paul, Minnesota 55101, on or before December 1,
2003.
Dated: July 21,2003.
BY ORDER OF THE CITY COUNCIL
Isl Frank Boyles. Manager
[Add any additional information)
A-I
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STATE OF MINNESOTA
COUNTY AUDITOR'S CERTIFICATE
AS TO TAX LEVY, REGISTRATION AND
CANCELLATION OF CERTAIN TAX LEVIES
COUNTY OF SCOTT
I, the undersigned, being the duly qualified and acting County Auditor of Scott
County, Minnesota., DO HEREBY CERTIFY that on the date hereof there was filed in my office
a certified copy of a resolution adopted on July 21,2003, by the City Council of the City of Prior
Lake, Minnesota., authorizing the issuance of$715,000 General Obligation Refunding Bonds of
2003 (the "Bonds"), and levying a tax for the payment thereof, together with full information
regarding the Bonds for which the tax was levied. The Bonds have been entered in my Bond
Register and the tax levy required by law has been made.
I further certify that the tax levy made for the bonds refunded by the Bonds shall
be canceled to the extent and in the manner provided in the resolution.
WITNESS my hand and the seal of the County Auditor on
, 2003.
County Auditor
(SEAL)
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