HomeMy WebLinkAbout11-142 Bond Resolution 12 05 11EXTRACT OF MINUTES OF A MEETING
OF THE CITY COUNCIL
CITY OF PRIOR LAKE, MINNESOTA
HELD: December 5, 2011
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
December 5, 2011, at 7:00 P.M., for the purpose, in part, of authorizing the issuance and
awarding the sale of $ 5,780,000 General Obligation Bonds, Series 2011B.
The following members were present: Mayor Myser and Coun cilmembers Erickson,
Hedberg, Keeney and Soukup.
and the following were absent: None.
Member Hedberg introduced the following resolution and moved its adoption:
RESOLUTION NO. 11 - 142
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $ 5,780,000 GENERAL
OB LIGATION BONDS, SERIES 2011B, PLEDGING FOR THE SECURITY THEREOF
SPECIAL ASSESSMENTS AND LEVYING A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City Council of the City of Prior Lake, Minnesota (the "City"),
hereby determines and declares that it is necessary a nd expedient to provide moneys for:
1. a crossover advance refunding of the City's $3,700,000 original principal
amount of General Obligation Fire Hall Bonds, Series 2006A dated November 15, 2006
(the "Prior Bonds"); and
2. the construction of various improvemen ts in the City (the "2011
Improvements") pursuant to Minnesota Statutes, Chapter 429 and 475; and
3. street reconstruction projects (the "Street Reconstruction Improvements")
pursuant to Minnesota Statutes, Section 475.68, Subdivision 3b; and
B. WHEREAS, $3,215, 000 of the principal amount of the Prior Bonds which
mature, or are subject to mandatory redemption, on and after December 15, 2015, are callable on
December 15, 2014 (the "Crossover Date"), at a price of par plus accrued interest, as provided in
the Resol ution adopted by the City Council on October 30, 2006, authorizing the issuance of the
Prior Bonds (the "Prior Bonds Resolution"); and
C. WHEREAS, the crossover advance refunding of the Prior Bonds (the "Refunded
Bonds"), is consistent with covenants made wit h the holders thereof, and is necessary and
desirable for the reduction of debt service cost to the City; and
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D. WHEREAS, the Street Reconstruction Improvements will be financed under the
City's Street Reconstruction Plan 2011 - 2015, adopted on June 21, 2010; following duly
published notice of hearing thereon, the Council held a public hearing on June 7, 2010 on the
plan and on the issuance of approximately $4,222,000 principal amount of bonds to finance the
Street Reconstruction Improvements for the years 201 1 through 2015 and all persons who
wished to speak or provide written information relative to the public hearing were afforded an
opportunity to do so; and
E. WHEREAS, the City's net debt limit, calculated in accordance with the provisions
of Minnesota Statut es, Section 475.53, is $79,229,595, which includes the Refunded Bonds; and
with (i) the $ 550 ,000 principal amount of the Bonds issued to finance the Street Reconstruction
Improvements; (ii) the Tax Levy Refunding Portion of the outstanding $7,570,000 origi nal
principal amount of the City's General Obligation Refunding Bonds, Series 2005A, dated
September 1, 2005, (iii) the outstanding $1,400,000 original principal amount of the City's
General Obligation Street Reconstruction Bonds, Series 2007B, dated May 1 5, 2007, (iv) the
outstanding $945,000 original principal amount of the City's General Obligation Refunding Fire
Station Bonds, Series 2008A, dated May 1, 2008, (v) the Street Reconstruction P ortion of the
outstanding $3,240,000 original principal amount o f the City's General Obligation Bonds, Series
2011A, dated December 1, 2005, and (vi) the outstanding $10,000,000 original principal amount
of the EDA's Public Project Revenue Bonds, Series 2005B, dated May 15, 2005, the City has no
other bonds outstanding which count against the net debt limit; and
F. WHEREAS, the City Council hereby determines and declares that it is necessary
and expedient to issue $ 5,780,000 General Obligation Bonds, Series 2011B (the "Bonds" or
individually, a "Bond"), pursuant to Minneso ta Statutes, Chapter 475, to provide moneys for (i) a
crossover advance refunding of the Refunded Bonds; (ii) finance the 2011 Improvements in the
City; and (iii) finance Street Reconstruction Improvements in the City; and
G. WHEREAS, the City has retained Blue Rose Capital Advisors, Inc., in
Minneapolis, Minnesota, as its independent financial advisor for the sale of the Bonds, and was
therefore authorized to sell the Bonds by private negotiation in accordance with Minneso ta
Statutes, Section 473.60, Subdivision 2(9); 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,
Minne sota, 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 $ 5,774,264.80 , plus int erest accrued to settlement, is hereby
accepted.
2. Bond Terms .
(a) Original Issue Date; Denominations; Maturities . The Bonds shall be dated
December 15, 2011, as the date of original issue, shall be issued forthwith on or after such date
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in fully registered for m, shall be numbered from R - 1 upward in the denomination of $5,000 each
or in any integral multiple thereof of a single maturity (the "Authorized Denominations") and
shall mature on December 15 in the years and amounts as follows:
Year Amount Year Amount
2013 $2 05 ,000 2023 $195,000
2014 215,000 2024 215,000
2015 340,000 2025 2 30 ,000
2016 360,000 2026 240,000
2017 360,000 2027 255,000
2018 370,000 2028 270,000
2019 380,000 2029 285,000
2020 400,000 2030 300,000
2021 420,000 2031 315,000
2022 425,000
As may be requested by the Purchaser, one or more term Bonds may be issued having
mandatory sinking fund redemption and final maturity amounts conforming to the foregoing
principal repayment schedule, and correspo nding additions may be made to the provisions of the
applicable Bond(s).
(b) Book Entry Only District . 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
successors t o 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 6 and 11 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 defined) in the name of CEDE
& CO., as the nominee (it or any no minee of the existing or a successor Depository, the
"Nominee").
(iii) With respect to the Bonds neither the City nor the Bond Registrar shall
have any responsibility or obligation to any broker, dealer, bank, or any other financial
institution for which the Dep ository 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 se ntence, 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
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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
securi ng 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 B onds, 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 v alid and effective to fully satisfy and discharge the City's
obligations with respect to the principal of and premium, if any, and interest on the Bonds
to the extent of the sum or sums so paid.
(v) Upon delivery by the Depository to the Bond Registrar of writ ten 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 a s 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
replaceme nt 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, coll ectively 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 procedure s 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
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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 s uch 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 6
hereof, make a notation of the reductio n in principal amount on the panel provided on the
Bond stating the amount so redeemed.
(c) Termination of Book - Entry Only District . Discontinuance of a particular
Depository's services and termination of the book - entry only District may be effected as follow s:
(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
ser vices of the Depository with respect to the Bond if it determines that the Depository is
no longer able to carry out its functions as securities depository or the continuation of the
District of book - entry transfers through the Depository is not in the bes t 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 Owner s 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 tim e, in accordance with paragraph 11. To the extent that the
Beneficial Owners are designated as the transferee by the Holders, in accordance with
paragraph 11, the Bonds will be delivered to the Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall lim it 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.
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3. Allocation . The aggregate principal amount of $ 3,500,000 maturing in each of
the years and amounts hereinafter set forth are issued to refund the Prior Bonds (the "Refunding
Portion"). The aggregate principal amount of $ 1,730,000 maturing in each of the years and
amounts hereinafter set forth are issued to finance the 2011 Improvements (the "Improvement
Portion"). The aggregate principal amount o f $ 550,000 maturing in each of the years and
amounts hereinafter set forth are issued to finance the Street Reconstruction Improvements (the
"Street Reconstruction Portion"):
Street
Improvement Reconstruction Total
Refunding
Year Portion Portion Portion A mount
2013 $160,000 $45,000 $205,000
2014 165,000 50,000 215,000
2015 $120,000 165,000 55,000 340,000
2016 135,000 170,000 55,000 360,000
2017 135,000 170,000 55,000 360,000
2018 140,000 175,000 55,000 370,000
2019 150,000 175,000 55,000 380,000
2020 160,000 180,000 60,000 400,000
2021 175,000 185,000 60,000 420,000
2022 180,000 185,000 60,000 425,000
2023 195,000 - - 195,000
2024 215,000 - - 215,000
2025 230,000 - - 230,000
2026 240,000 - - 240,000
2027 255,000 - - 255,000
2028 270,000 - - 270,000
2029 285,000 - - 285,000
2030 300,000 - - 300,000
2031 315,000 - - 315,000
If Bonds are prepaid, the prepayments shall be allocated to the po rtions 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 sourc e, the prepayment may be allocated to any of the portions
of debt service in such amounts as the City shall determine. If the source of a prepayment is
taxes pledged to the Refunding Portion of the Bonds, the prepayment shall be allocated to the
Refunding Portion debt service. If the source of prepayment is special assessments o r taxes
pledged to the Improvement Portion of the Bonds the prepayment shall be allocated to the
Improvement Portion debt service. If the source of a prepayment is taxes pledged t o the Street
Reconstruction Portion of the Bonds, the prepayment shall be allocated to the Street
Reconstruction Portion debt service.
4. Purpose; Refunding Findings . The Bonds shall provide funds as follows: (i) the
Refunding Portion of the B onds shall provide funds for a crossover advance refunding of the
Refunded Bonds (the "Crossover Refunding"); (ii) the Improvement Portion of the Bonds shall
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provide funds to finance the 2011 Improvements (the "Improvements Project"); and (iii) the
Street Reconstruction Portion shall provide funds to finance the Street Reconstruction
Improvements (the "Street Reconstruction Project" and together with the Improvement Project,
the "Project"). It is hereby found, determined and declare d that the Crossover Refunding is
pursuant to Minnesota Statutes, Section 475.67. With respect to the Refunded Bonds, as of the
Crossover Date there shall result a reduction in the present value of the dollar amount of the debt
service to the City from a total dollar amount of $ 3,676,598.75 for the Prior Bonds to a total
dollar amount of $ 3,516,084.38 for the Refunding Portion of the Bonds computed in accordance
with the provisions of Minnesota Statutes, Section 475.67, Subdivision 12. The dollar amount o f
such present value of the debt service for the Refunding Portion of the Bonds is lower by at least
three percent than the dollar amount of such present value of the debt service for the Prior Bonds
as required by Minnesota Statutes, Section 475.67, Subdi vision 12. The total cost of the Project,
which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to
be at least equal to the amount of the Improvement Portion and the Street Reconstruction Portion
of the Bonds. The C ity covenants that it shall do all things and perform all acts required of it to
assure that work on the Project proceeds with due diligence to completion and that any and all
permits and studies required under law for the Project are obtained.
5. Interest . The Bonds shall bear interest payable semiannually on June 15 and
December 15 of each year (each, an "Interest Payment Date"), commencing June 15, 2012,
calculated on the basis of a 360 - day year of twelve 30 - day months, at the respective rates per
annum se t forth opposite the maturity years as follows:
Maturity Year Interest Rate Maturity Year Interest Rate
2013 2.00 % 2023 2.50 %
2014 2.00 2024 2.65
2015 2.00 2025 2.75
2016 2.00 2026 2. 85
2017 2.00 2027 3.00
2018 2.00 2028 3.20
2019 2.00 2029 3.2 0
2020 2.05 2030 3.40
2021 2.20 2031 3.40
2022 2.35
6. Optional Redemption . All Bonds maturing on December 15, 2021 , and thereafter,
shall be subject to redemption and prepayment at the option of the City on December 15, 2020 ,
and on any date ther eafter at a price of par plus accrued interest. Redemption may be in whole or
in part of the Bonds subject to prepayment. If redemption is in part, and the selection of the
amounts and maturities of the Bonds to be prepaid shall be at the discretion of t he City. If only
part of the Bonds having a common maturity date are called for prepayment, the specific Bonds
to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the red emption date, and interest thereon shall cease to
accrue from and after the redemption date. Mailed notice of redemption shall be given to the
paying agent and to each affected registered holder of the Bonds at least thirty (30) days prior to
the date fix ed for redemption.
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To effect a partial redemption of Bonds having a common maturity date, the Bond
Registrar prior to giving notice of redemption shall assign to each Bond having a common
maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The
Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in
its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for
each number, shall equal the principa l amount of such Bonds to be redeemed. The Bonds to be
redeemed shall be the Bonds to which were assigned numbers so selected; provided, however,
that only so much of the principal amount of each such Bond of a denomination of more than
$5,000 shall be re deemed as shall equal $5,000 for each number assigned to it and so selected. If
a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the
City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the
City and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly
authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall
authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds
having the same stated maturity and interest rate and of any Authorized Denomination or
Denominations, as requested by the Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portio n of the principal of the Bond so surrendered.
7. Bond Registrar . Northland Trust Services, Inc., in Minneapolis, 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.
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:
UNITED STATES OF AMERICA
STATE OF MINNESOTA
SCOTT COUNTY
CITY OF PRIOR LAKE
R - _________ $_________
GENERAL OBLIGATION BOND, S ERIES 2011B
Interest Rate Maturity Date Date of Original Issue CUSIP
December 15, December 15, 2011
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
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The CITY OF PRIOR LAKE, Scott County, Minnesota (the "Issuer"), certifies that it is
indebted and for v alue received promises to pay to the registered owner specified above, or
registered assigns, in the manner hereinafter set forth, the principal amount specified above, on
the maturity date specified above, unless called for prepayment, and to pay interest thereon
semiannually on June 15 and December 15 of each year (each, an "Interest Payment Date"),
commencing June 15, 2012, 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 thi s Bond are payable upon presentation and surrender hereof at the
principal office of Northland Trust Services, Inc., in Minneapolis, Minnesota (the "Bond
Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer.
Inte rest 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 add ress appearing thereon at the
close of business on the first day of the calendar month of 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 Re gular 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 shal l be made as provided in the 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 Dis trict pursuant to the Resolution, Bonds may only be registered in the
name of the Depository or its Nominee.
Optional Redemption . The Bonds of this issue (the "Bonds") maturing on December 15,
2021 , and thereafter, are subject to redemption and prepayment at the option of the Issuer on
December 15, 2020 , and on any date thereafter at a price of par plus accrued interest.
Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in
part, the maturities and the principal am ounts within each maturity to be redeemed shall be
determined by the Issuer; and if only part of the Bonds having a common maturity date are called
for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar.
Bonds or por tions thereof called for redemption shall be due and payable on the redemption date,
and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of
redemption shall be given to the paying agent and to each affected Holder of the Bonds prior to
the date fixed for redemption.
Prior to the date on which any Bond or Bonds are directed by the Issuer to be redeemed
in advance of maturity, the Issuer will cause notice of the call thereof for redemption identifying
the Bonds to be redeemed to be mailed to the Bond Registrar and all Bondholders, at the
addresses shown on the Bond Register. All Bonds so called for redemption will cease to bear
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interest on the specified redemption date, provided funds for their redemption have been du ly
deposited.
Issuance; Purpose; General Obligation . This Bond is one of an issue in the total principal
amount of $ 5,780,000 (the "Bonds"), all of like date of original issue and tenor, except as to
number, maturity, interest rate, denomination and redem ption privilege, 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 December 5, 2011 (the "Resolution"), for the purpose
of providing funds sufficie nt for a crossover advance refunding of certain outstanding general
obligation bonds of the Issuer and to provide funds for public improvements and street
reconstruction projects, all within the jurisdiction of the Issuer. This Bond is payable out of the
Escrow Account and the Debt Service Account of the Issuer's General Obligation Bonds, Series
2011B Fund. This 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 Authorized Denominat ions (as defined in the Resolution) and are exchangeable for fully
registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the
principal office of the Bond Registrar, but only in the manner and subject to the limitations
provided in the Resolution. Reference is hereby made to the Resolution for a description of the
rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal
office of the Bond Registrar.
Transfer . This Bond is transfera ble by the Holder in person or by the Holder's attorney
duly authorized in writing at the principal office of the Bond Registrar upon presentation and
surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the
Resolutio n 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 i n 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 int erest 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 re garding 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 and for all other purpos es, 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 unle ss the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
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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 Intern al Revenue
Code of 1986, as amended.
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, 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 charter,
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 execut ed on its behalf by the facsimile signatures of its
Mayor and its Manager, the corporate seal of the Issuer having been intentionally omitted as
permitted by law.
Date of Registration: Registrable by: NORTHLAND TRUST
SERVI CES, INC.
________________________
Payable at: NORTHLAND TRUST
SERVICES, INC.
BOND REGISTRAR'S
CERTIFICATE OF
CITY OF PRIOR LAKE,
AUTHENTICATION
SCOTT COUNTY, MINNESOTA
This Bond is one of the Bonds
described in the Resolution
/s/ Facsimile
mentioned within.
Mayor
NORTHLAND TRUST SERVICES,
INC.
/s/ Facsimile
Minneapolis, Minnesota
Manager
Bond Registrar
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
JT TEN - as joint tenants with right of sur vivorship and not as tenants in common
UTMA - _____________ as custodian for _____________
(Cust) (Minor)
under the _____________________ Uniform Transfers to Minors Act
(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 fo r 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: ________________________________________
________________________________________
________________________________________
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PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s) and in the amount(s) as follows:
AUTHORIZED
SIGNATURE
DATE AMOUNT OF HOLDER
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9. Execution . The Bonds shall be in typewritten form, 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, as permitted by law, both signatures may be photocopied facsimiles and the corporate
seal has been omitted. In the event of disability or resignation or other absence of either officer,
the Bonds may be signed by the manual or facsimi le signature of the officer who may act on
behalf of the absent or disabled officer. In case either 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, the sign ature or facsimile shall nevertheless be valid and sufficient for all purposes,
the same as if the officer had remained in office until delivery.
10. Authentication . No Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefi t 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 of
December 15, 2011. 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
pro vided.
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, i n 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 stat ed maturity, upon
surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever
any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond
Registrar shall authenticate, insert the date o f 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 dispos ed of as directed by the City.
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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 his, her or its 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 tran sfers 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 payme nt 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 "Ho lder") 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 first day of the calendar
month of 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 Bo nd 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 Own er . The City and Bond Registrar may treat the
person in whose name any Bond is registered as the owner of such Bond for the purpose of
receiving payment of principal of and premium, if any, and interest (subject to the payment
provisions in paragraph 13) on, such Bond and for all other purposes whatsoever whether or not
such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by
notice to the contrary.
15. Delivery; Application of Proceeds . The Bonds when so prepared and execu ted
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. Funds and Accounts .
(a) There is hereby created a special fund to be designated the "Gen eral Obligation
Bonds, Series 2011B Fund" (the "Fund") to be administered and maintained by the Finance
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Director as a bookkeeping account separate and apart from all other funds maintained in the
official financial records of the City. The Fund shall be m aintained 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 the following accounts:
(i) Escrow Account . The Escrow Account is established for the Refunded
Bonds and the Refunding Portion of the Bonds and shall be maintained as an escrow
account with Northland Trust Services, Inc. (the "Escrow Agent"), in Minneapolis,
Minnesota, which is a suitable financial institution within or without the State.
$3,494,166.74 in procee ds of the Bonds shall be received by the Escrow Agent and
applied to fund the Escrow Account or to pay costs of issuing the Bonds. Proceeds of the
Refunding Portion of the Bonds less proceeds used to pay costs of issuance or any
portion of the Refunding P ortion of Bond proceeds returned to the City are hereby
irrevocably pledged and appropriated to the Escrow Account, together with all
investment earnings thereon. The Escrow Account shall be invested in securities
maturing or callable at the option of the holder on such dates and bearing interest at such
rates as shall be required to provide sufficient funds, together with any cash or other
funds retained in the Escrow Account, (A) to pay when due the interest to accrue on the
Refunding Portion of the Bond s to and including the Crossover Date and (B) to pay when
called for redemption on the Crossover Date, the principal amount of the Refunded
Bonds. The Escrow Account shall be irrevocably appropriated to the payment of (A) all
interest on the Refunding Por tion of the Bonds to and including the Crossover Date and
(B) the principal of the Refunded Bonds due by reason of their call for redemption on the
Crossover Date. The moneys in the Escrow Account shall be used solely for the purposes
herein set forth and for no other purpose, except that any surplus in the Escrow Account
may be remitted to the City, all in accordance with the Escrow Agreement, by and
between the City and Escrow Agent (the "Escrow Agreement"), a form of which is on file
in the office of th e Manager. Any moneys remitted to the City pursuant to the Escrow
Agreement shall be deposited in the Refunded Bonds Debt Service Subaccount.
(ii) Construction Account . To the Construction Account there shall be
credited the proceeds of the sale of the Improv ement Portion and Street Reconstruction
Portion of the Bonds, less capitalized interest and less a pro rata share of all accrued
interest received upon delivery of the Bonds. From the Construction Account there shall
be paid all costs and expenses of the Project, including the cost of any construction
contracts heretofore let and all other costs incurred and to be incurred of the kind
authorized in Minnesota Statutes, Section 475.65. Moneys in the Construction Account
shall be used for no other purpose ex cept as otherwise provided by law; provided that the
proceeds of the Bonds may also be used to the extent necessary to pay interest on the
Bonds due prior to the anticipated date of commencement of the collection of taxes or
special assessments herein levi ed or covenanted to be levied; and provided further that if
upon completion of the Project there shall remain any unexpended balance in the
Construction Account, the balance (other than special assessments) shall be transferred to
the Improvements Project Debt Service Subaccount and the Street Reconstruction
Improvement Debt Service Subaccount, as applicable, or the fund of any other
improvement instituted pursuant to Minnesota Statutes, Chapter 429, and provided
further that any special assessments credite d to the Construction Account shall only be
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applied towards payment of the costs of the Project upon adoption of a resolution by the
City Council determining that the application of the special assessments for such purpose
will not cause the City to no lon ger be in compliance with Minnesota Statutes, Section
475.61, Subdivision 1.
(iii) Debt Service Account . There shall be maintained the following separate
subaccounts in the Debt Service Account to be designated the "Refunded Bonds Debt
Service Subaccount", the " Improvement Debt Service Subaccount"; and the "Street
Reconstruction Improvement Debt Service Subaccount". There are hereby irrevocably
appropriated and pledged to, and there shall be credited to the separate subaccounts of the
Debt Service Account:
(a) Refund ed Bonds Debt Service Subaccount . To the Refunded Bonds Debt
Service Subaccount are hereby irrevocably appropriated, pledged to and there shall be
credited to: (1) any balance remaining after the Crossover Date in the Prior Bonds Debt
Service Account crea ted by the Prior Bonds Resolution; (2) collections of all taxes herein
or hereinafter levied for the payment of the Refunding Portion of the Bonds and interest
thereon; (3) all investment earnings on funds in the Refunded Bonds Debt Service
Subaccount; (4) any sums remitted to the City pursuant to the Escrow Agreement; and (5)
any and all other moneys which are properly available and are appropriated by the
governing body of the City to the Refunded Bonds Debt Service Subaccount. The
amount of any surplus remaining in the Refunded Bonds Debt Service Subaccount when
the Refunding Portion of the Bonds and interest thereon are paid shall be used consistent
with Minnesota Statutes, Section 475.61, Subdivision 4.
(b) Improvements Project Debt Service Subaccount . To the Improvements
Project Debt Service Subaccount there shall be credited: (1) capitalized interest in the
amount of $11,202.22 (together with interest earnings thereon and subject to such other
adjustments as are appropriate to provide sufficient funds t o pay interest due on the
Bonds on or before June 15, 2012); ( 2 ) collections of all special assessments herein or
hereinafter levied for the payment of the Improvement Portion of the Bonds and interest
thereon; ( 3 ) any taxes herein or hereafter levied for the payment of the Improvement
Portion of the Bonds; a pro rata share of all accrued interest received upon delivery of
the Bonds; ( 4 ) a pro rata share of all funds remaining in the Construction Account after
completion of the Project and payment of the c osts thereof; ( 5 ) all investment earnings on
funds held in the Improvements Project Debt Service Subaccount; and ( 6 ) any and all
other moneys which are properly available and are appropriated by the governing body of
the City to the Improvements Project De bt Service Subaccount. The Improvements
Project Debt Service Subaccount shall be used solely to pay the principal and interest and
any premium for redemption of the Improvement Portion of the Bonds and any other
general obligation bonds of the City hereaf ter issued by the City and made payable from
said subaccount as provided by law.
(c) Street Reconstruction Improvements Debt Service Subaccount . To the
Street Reconstruction Improvements Project Debt Service Subaccount there shall be
credited: (1) capitalize d interest in the amount of $35,211.56 (together with interest
earnings thereon and subject to such other adjustments as are appropriate to provide
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sufficient funds to pay interest due on the Bonds on or before June 15, 2012); ( 2 )
collections of all taxes herein or hereinafter levied for the payment of the Street
Reconstruction Improvement Portion of the Bonds and interest thereon; ( 3 ) a pro rata
share of all accrued interest received upon delivery of the Bonds; ( 4 ) a pro rata share of
all funds remaining i n the Construction Account after completion of the Project and
payment of the costs thereof; ( 5 ) all investment earnings on funds held in the Street
Reconstruction Improvements Project Debt Service Subaccount; and ( 6 ) any and all other
moneys which are pro perly available and are appropriated by the governing body of the
City to the Street Reconstruction Improvements Project Debt Service Subaccount. The
Street Reconstruction Improvements Project Debt Service Subaccount shall be used
solely to pay the princi pal and interest and any premium for redemption of the Street
Reconstruction Improvement 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 porti on 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 unti l such proceeds are
needed for the purpose for which the Bonds were issued and (2) in addition to the above in an
amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To
this effect, any proceeds of the Bonds and an y sums from time to time held in the Debt Service
Account (or any other City account which will be used to pay principal or interest to become due
on the Bonds), in excess of amounts which under then applicable federal arbitrage regulations
may be invested without regard to yield shall not be invested at a yield in excess of the
applicable yield restrictions imposed by the arbitrage regulations on such investments after
taking into account any applicable "temporary periods" or "minor portion" made available under
the federal arbitrage regulations. 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. Covenants Relating to the Refunding Portion of the Bonds .
(a) Tax Levy; Coverage Test; Cancellation of Certain Tax Levies . To provide
moneys for payment of the principal and interest on the 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 coll ected with and as part of other general property taxes in
the City for the years and in the amounts as follows:
Years of Tax Levy Years of Tax Collection Amounts
2014 - 2030 2015 - 2031 See attached schedule
The tax levies are such that if collected in full they, together with estimated collections of
other monies herein pledged for the payment of the Refunding Portion of the Bonds, will
produce at least five percent in excess of the amount needed to meet when due the principal and
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interest payments on the Re funding Portion of the Bonds. The tax levies shall be irrepealable so
long as any of the 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 pe rmitted
by Minnesota Statutes, Section 475.61, Subdivision 3.
(b) General Obligation Pledge . For the prompt and full payment of the principal and
interest on the Refunding Portion of the Bonds, as the same respectively become due, the full
faith, credit and t axing powers of the City shall be and are hereby irrevocably pledged. If the
balance in the Refunded Bonds Debt Service Subaccount is ever insufficient to pay all principal
and interest then due on the Refunding Portion of the Bonds and any other bonds pa yable
therefrom, the deficiency shall be promptly paid out of any other funds of the City which are
available for such purpose, and such other funds may be reimbursed with or without interest
from the Refunded Bonds Debt Service Subaccount when a sufficien t balance is available
therein.
18. Covenants Relating to the Improvement Portion of the Bonds .
(a) Assessments . It is hereby determined that no less than twenty percent (20%) of
the cost to the City of each Improvement financed hereunder within the meaning of Mi nnesota
Statutes, Section 475.58, Subdivision 1(3), shall be paid by special assessments to be levied
against every assessable lot, piece and parcel of land benefitted by any of the 2011
Improvements. The City hereby covenants and agrees that it will let all construction contracts
not heretofore let within one (1) year after ordering each 2011 Improvement financed hereunder
unless the resolution ordering the 2011 Improvement specifies a different time limit for the
letting of construction contracts. The C ity hereby further covenants and agrees that it will do and
perform as soon as they may be done all acts and things necessary for the final and valid levy of
such special assessments, and in the event that any such assessment be at any time held invalid
wi th respect to any lot, piece or parcel of land due to any error, defect, or irregularity in any
action or proceedings taken or to be taken by the City or the City Council or any of the City
officers or employees, either in the making of the assessments or in the performance of any
condition precedent thereto, the City and the City Council will forthwith do all further acts and
take all further proceedings as may be required by law to make the assessments a valid and
binding lien upon such property. The spe cial assessments have heretofore been authorized.
Subject to such adjustments as are required by the conditions in existence at the time the
assessments are levied, it is hereby determined that the assessments shall be payable in equal,
consecutive, annua l installments, with general taxes for the years shown below and with interest
on the declining balance of all such assessments at the rates per annum not less than the rate per
annum set forth opposite the collection years specified below:
Improvement Collection
Des ignation Amount Levy Years Years Rate
Boudins Neighborhood Improvements $ 550,000 2011 - 2020 2012 - 2021 6.00%
Project Nos. 11 - 011 and 12 - 011
At the time the assessments are in fact levied the City Council shall, based on the then -
curr ent estimated collections of the assessments, make any adjustments in any ad valorem taxes
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required to be levied in order to assure that the City continues to be in compliance with
Minnesota Statutes, Section 475.61, Subdivision 1.
(b) Tax Levy; Coverage Test . To provide moneys for payment of the principal and
interest on the Improvement 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
2011 - 2020 2012 - 2021 See attached schedule
The tax levies are such that if collected in full they, tog ether with estimated collections of
special assessments and other revenues herein pledged for the payment of the Improvement
Portion of the Bonds, will produce at least five percent (5%) in excess of the amount needed to
meet when due the principal and int erest payments on the Improvement Portion of the Bonds.
The tax levies shall be irrepealable so long as any of the Improvement 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.
(c) General Obligation Pledge . For the prompt and full payment of the principal and
interest on the Improvement Portion of 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
balance in the Improvements Project Debt Service Subaccount is ever insufficient to pay all
principal and interest then due on the Improvement Porti on of the Bonds and any other bonds
payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which
are available for such purpose, and such other funds may be reimbursed with or without interest
from the Improvement Proje ct Debt Service Subaccount when a sufficient balance is available
therein.
19. Covenants Relating to the Street Reconstruction Improvement Portion of the
Bonds .
(a) Tax Levy Coverage Test . To provide moneys for payment of the principal and
interest on the Street Reconstruction Improvement 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 th e City for
the years and in the amounts as follows:
Year of Tax Levy Year of Tax Collection Amount
2011 - 2020 2012 - 2021 See attached Schedule
The tax levies are such that if collected in full they will produce at least five percent in
excess of th e amount needed to meet when due the principal and interest payments on the Street
Reconstruction Improvement Portion of the Bonds. The tax levies shall be irrepealable so long
as any of the Street Reconstruction Improvements are outstanding and unpaid, p rovided that the
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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.
(b) General Obligation Pledge . For the prompt and full payment of the principal and
interes t on the Street Reconstruction Portion of 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 balance in the Street Reconstruction Debt Service Subaccount is ever insufficient to pay all
principal and interest then due on the Street Reconstruction Portion of the Bonds and any other
bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City
which are available for such purpose, and such other funds may be reimbursed with or without
interest from the Street Reconstruction Debt Service Subaccount when a sufficient balance is
available therein.
20. Prior Bonds; Security . Until retirement of the Bonds, all provisions theretofor e
made for the security thereof shall be observed by the City and all of its officers and agents.
21. Defeasance . When all Bonds have been discharged as provided in this paragraph,
all pledges, covenants and other rights granted by this resolution to the regi stered 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 Ci ty may also discharge its obligations with respect to any prepayable Bonds called
for redemption on any date when they are prepayable according to their terms, by depositing
with the Bond Registrar on or before that date a sum sufficient for the payment th ereof in full,
provided that notice of redemption thereof has been duly given. 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 suc h 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.
22. Compliance With Reimbursement Bond Regulations . The provisions of this
paragraph are intended to establish and provide for the City's compliance with United States
Treasury Regulations Section 1.150 - 2 (the "Reimbursement Regulations") applicable to the
"reimbursement proceeds" of the Improvement Portion and Street Reconstruction Portion of the
Bonds, being those portions thereof which will be used by the City to reimburse itself for any
expenditure which the City paid or will have paid prior to the C losing Date (a "Reimbursement
Expenditure").
The City hereby certifies and/or covenants as follows:
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(a) Not later than sixty days after the date of payment of a Reimbursement
Expenditure, the City (or person designated to do so on behalf of the City) has made or will have
made a written declaration of the City's official intent (a "Declaration") which effectively (i)
states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement
Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional
description of the property, project or program to which the Declaration relates and for which the
Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the
general functi onal purpose thereof from which the Reimbursement Expenditure was to be paid
(collectively the "Project"); and (iii) states the maximum principal amount of debt expected to be
issued by the City for the purpose of financing the Project; provided, however, that no such
Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for
the Project, defined in the Reimbursement Regulations to include engineering or architectural,
surveying and soil testing expenses and similar pre fatory costs, which in the aggregate do not
exceed twenty percent of the "issue price" of the Improvement Portion and Street Reconstruction
Portion of the Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess
of the lesser of $100 ,000 or five percent of the proceeds of the Improvement Portion and Street
Reconstruction Portion of the Bonds.
(b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of
the Improvement Portion and Street Reconstruction Portion of th e Bonds or any of the other
types of expenditures described in Section 1.150 - 2(d)(3) of the Reimbursement Regulations.
(c) The "reimbursement allocation" described in the Reimbursement Regulations for
each Reimbursement Expenditure shall and will be made forth with following (but not prior to)
the issuance of the Improvement Portion and Street Reconstruction Portion of the Bonds and in
all events within the period ending on the date which is the later of three years after payment of
the Reimbursement Expenditure or one year after the date on which the Project to which the
Reimbursement Expenditure relates is first placed in service.
(d) Each such reimbursement allocation will be made in a writing that evidences the
City's use of Improvement Portion and Street Reconst ruction Portion of the Bond proceeds to
reimburse the Reimbursement Expenditure and, if made within 30 days after the Improvement
Portion and Street Reconstruction Portion of the Bonds are issued, shall be treated as made on
the day the Improvement Portion and Street Reconstruction Portion of the Bonds are issued.
Provided, however, that the City may take action contrary to any of the foregoing
covenants in this paragraph upon receipt of an opinion of its Bond Counsel for the Improvement
Portion and Street Reconstruction Portion of the Bonds stating in effect that such action will not
impair the tax - exempt status of the Improvement Portion and Street Reconstruction Portion of
the Bonds.
23. Securities, Escrow Agent . Securities purchased from moneys in the Escro w
Account shall be limited to securities set forth in Minnesota Statutes, Section 475.67,
Subdivision 8, and any amendments or supplements thereto. Securities purchased from the
Escrow Account shall be purchased simultaneously with the delivery of the Bon ds. The City
Council has investigated the facts and hereby finds and determines that the Escrow Agent is a
suitable financial institution to act as escrow agent.
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24. Redemption of Refunded Bonds . The Refunded Bonds shall be redeemed and
prepaid on the Crosso ver Date in accordance with the terms and conditions set forth in the Notice
of Call for Redemption, in substantially the form attached to the Escrow Agreement, which terms
and conditions are hereby approved and incorporated herein by reference.
25. Escrow Agr eement . On or prior to the delivery of the Bonds the Mayor and
Manager shall, and are hereby authorized and directed to, execute the Escrow Agreement on
behalf of the City. The Escrow Agreement is hereby approved and adopted and made a part of
this resol ution, and the City covenants that it will promptly enforce all provisions thereof in the
event of default thereunder by the Escrow Agent.
26. Purchase of SLGS or Open Market Securities . The Purchaser, or its desgniee , as
agent for the City, is hereby authori zed and directed to purchase on behalf of the City and in its
name the appropriate United States Treasury Securities, State and Local Government Series
and/or open market securities as provided in paragraph 23, from the proceeds of the Refunded
Bonds and t he Refunding Portion of the Bonds, to the extent necessary, other available funds, all
in accordance with the provisions of this resolution and the Escrow Agreement and to execute all
such documents (including the appropriate subscription form) required to effect such purchase in
accordance with the applicable U.S. Treasury Regulations.
27. Continuing Disclosure . The City is the sole obligated person with respect to the
Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2 - 12 (the "Rul e"),
promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described to:
(a) Provide or cause to be provided to the Municipal Securities Rulemaking Board
(the "MSRB") by filing at www.emma.msrb.org in accordance with the Rule, certain annual
financial information and operating data in accordance with the Undertaking. The City reserves
the right to modify from t ime to time the terms of the Undertaking as provided therein.
(b) Provide or cause to be provided to the MSRB notice of the occurrence of certain
events with respect to the Bonds in not more than ten (10) business days after the occurrence of
the event, in acc ordance with the Undertaking.
(c) Provide or cause to be provided to the MSRB notice of a failure by the City to
provide the annual financial information with respect to the City described in the Undertaking, in
not more than ten (10) business days following s uch amendment.
(d) The City agrees that its covenants pursuant to the Rule set forth in this paragraph
and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be
enforceable on behalf of such Holders; provided that the ri ght to enforce the provisions of these
covenants shall be limited to a right to obtain specific enforcement of the City's obligations under
the covenants.
The Mayor and Manager of the City, or any other officer of the City authorized to act in
their place (the "Officers") are hereby authorized and directed to execute on behalf of the City
the Undertaking in substantially the form presented to the City Council subject to such
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modifications thereof or additions thereto as are (i) consistent with the requireme nts under the
Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Officers.
28. Certificate of Registration . The Manager is hereby directed to file a certified copy
of this resolution with the County Auditor of Scott County, Minneso ta, together with such other
information as the County Auditor shall require, and to obtain the County Auditor's Certificate
that the Bonds have been entered in the County Auditor's Bond Register and that the tax levy
required by law has been made.
29. 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 r elating to the
Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates
and information as are required to show the facts relating to the legality and marketability of the
Bonds as the same appear from the books and records under their custody and control or as
otherwise known to them, and all such certified copies, certificates and affidavits, including any
re furnished, shall be deemed representations of the City as to the facts recited therein.
30. Negative Covena nt as to Use of Proceeds and Projects . The City hereby
covenants not to use the proceeds of the Bonds or to use the projects originally financed by the
Prior Bonds, or to cause or permit them to be used, or to enter into any deferred payment
arrangements for the cost of the projects, 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.
31. Tax - Exempt Status of the Bonds; Rebate . The City shall comply with
requirements necessa ry 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
(a) requirements relating to temporary periods for investments, (b) limitations on amounts
invested at a yield greater than the yield on the Bonds, and (c) the rebate of excess investment
earnings to the United States. The City expects to satisfy the eighteen month expenditure
exemption for gross proceeds of the Bonds as provided in Section 1.1 48 - 7(d)(1) of the
Regulations. The Mayor and/or Finance Director are hereby authorized and directed to make
such elections as to arbitrage and rebate matters relating to the Bonds as they deem necessary,
appropriate or desirable in connection with the Bon ds, and all such elections shall be, and shall
be deemed and treated as, elections of the City.
32. Designation of Qualified Tax - Exempt Obligations . 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 "qua lified 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 2011 will
not exceed $10,000,000;
(e) not more than $10,000,000 of obligat ions issued by the City during this calendar
year 2011 have been designated for purposes of Section 265(b)(3) of the Code; and
(f) the aggregate face amount of the Bonds does not exceed $10,000,000.
The City shall use its best efforts to comply with any federa l procedural requirements which may
apply in order to effectuate the designation made by this paragraph.
33. Official Statement . The Official Statement relating to the Bonds prepared and
distributed by the Purchaser is hereby approved and the officers of the City are authorized in
connection with the delivery of the Bonds to sign such certificates as may be necessary with
respect to the completeness and accuracy of the Official Statement.
34. Supplemental Resolution . The Prior Resolutions are hereby supplemented to the
extent necessary to give effect to the provisions hereof.
35. Payment of Issuance Expenses . The City authorizes the Purchaser to forward the
amount of Bond proceeds allocable to the payment of issuance expenses to the Escrow Agent on
the closing date f or further distribution as directed by the Purchaser.
36. 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 pro vision shall not affect any of the remaining provisions of this resolution.
37. 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
Soukup and, after a full discussion thereof and upon a vote being taken thereon, the following
voted in favor thereof: Mayor Myser, Councilmembers Erickson, Hedberg, Kee ney and Soukup
and the following voted against the same: None.
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 th e City Council, duly called and held on the
date therein indicated, insofar as such minutes relate to providing for the issuance and sale of
$ 5,780,000 General Obligation Bonds, Series 2011B.
WITNESS my hand on December 5, 2011.
_________________________ __
Manager
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TAX LEVY
Levy Collection Refunding Improvement Street Reconstruction
Year Year Portion Portion Portion
2011 2012 * * * * *
2012 2013 * 112,000 $65,000
2013 2014 * 123,000 65,000
2014 2015 $215,017.50 123,000 65,000
20 15 2016 227,617.50 128,000 65,000
2016 2017 224,917.50 127,000 65,000
2017 2018 227,217.50 132,000 65,000
2018 2019 234,417.50 132,000 65,000
2019 2020 241,417.50 137,000 65,000
2020 2021 253,137.50 141,000 65,000
2021 2022 254,287.50 141,000 65,000
2022 2023 265,057.50 - -
2023 2024 280,182.50 - -
2024 2025 289,485.00 - -
2025 2026 293,160.00 - -
2026 2027 301,320.00 - -
2027 2028 308,670.00 - -
2028 2029 315,030.00 - -
2029 2030 320,910.00 - -
2030 2031 325,710.00 - -
*To be paid from Esc row Account .
* To be paid with Capitalized Interest.
SPECIAL ASSESSMENTS
Levy Collection Assessment
Year Year Income
2012 2013 $ 93,500
2013 2014 84,700
2014 2015 81,400
2015 2016 78,100
2016 2017 74,800
2017 2018 71,500
2018 2019 68,200
2 019 2020 64,900
2020 2021 61,600
2021 2022 58,300
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