HomeMy WebLinkAbout8E - Fences in Right-Of-Way
STAFF AGENDA REPORT
DATE:
~~NALD RYE, PLANNING DIRECTOR 0ft.
CONSIDER AN AMENDMENT TO THE ZONING
ORDINANCE TO PERMIT FENCES IN COUNTY
ROAD RIGHT-OF-WAY
SEPTEMBER 3, 1996
AGENDA #:
PREPARED BY:
SUBJECT:
DISCUSSION:
The Harbor Community Association has submitted an
application to amend the zoning ordinance to permit the
construction of a fence in the right-of-way of County Road
42.
The attached staff report describes the request in detail and
discusses some of the reasons why cities do not typically
allow fences in rights-of-way. Also attached is a document
prepared by the applicant which outlines their reasons for
requesting the amendment.
INTRODUCTION:
Originally, the applicant suggested language which would
have allowed Scott County to approve fences in the right-
of-way of County roads. The County did not support this
language and suggested wording which limited the
regulation of fences to City right-of-way and was silent
concerning state and County right-of-way.
Staff is basically of the opinion that the current ordinance
which prohibits fences in all.. rights-of-way in the City
could be difficult to enforce on state or county roads if
either was inclined to allow them, particularly if they were
to cite some beneficial public purpose for doing so. Staff
also feels that both MnDOT and Scott County have been
reluctant to allow any structure of substance on their rights-
of-way without a compelling reason.
Because staff is of the opinion that this a policy issue; no
specific recommendation was given to the Planning
Commission.
The Planning Commission conducted a public hearing on
this matter on August 12, 1996. One person testified in
opposition to the request and one person from the Harbor
16200 tcPgrl~~~~Rs.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 44.7-4245
AN EQUAL OPPORTUNITY EMPLOYER
PLANNING REPORT
SITE:
PRESENTER:
PUBLIC HEARING:
DATE:
4E
Consider amendment to zoning ordinance to permit fences
in County road rights-of way ((
~
N/A . "\
Donald Rye, Planning Director ~ L
_X_ YES _NO-N/A
August 12, 1996
AGENDA ITEM:
SUBJECT:
INTRODUCTION: The City has received an application from the Harbors Community
Association to amend the zoning ordinance to permit the construction of a fence in the
right-of-way of County Road 42.
BACKGROUND: The Harbor Community Association wishes to construct a fence in
the right-of-way of County Road 42 in order to meet the objectives contained in the
attachment to this report. These objectives relate to screening, noise reduction and
security and access control. The Association has indicated that a fence on their own
property will not meet these objectives because of the topography of the area. The right-
of-way line is located on the hill slope below the level of County Road 42 and a fence on
the property line would not provide the screening the Association desires nor would it
adequately address the other objectives. Consequently, the Association has asked that the
ordinance be amended to allow fences on the right-of-way of County roads with County
approval. The fence as proposed by the Association would exceed the height limitation
for fences in the City. If an amendment were to be approved, the height limits would need
to be addressed in some fashion.
City ordinance currently states as follows regarding fences: Fences shall not be permitted
in any ri~ht-of-way.
DISCUSSION: The provision which prohibits fences in rights-of-way is a common one
in City codes. The reasons for such provisions are as follows:
. Public policy- As a matter of public policy, public land should be available to the
general public on an equal basis. The theory is that public land should not be
generally available to individuals or small groups to enjoy a privilege not granted to
the general public. If no public purpose is being served, there should be no private
use.
. Liability- The City may have liability exposure by allowing private use of public
right-of-way. Some Cities will allow limited private use subject to specific
agreements which specify the conditions of use, contain a hold-harmless or
16200 ~!tp~4eJ1~<t</%,re. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
indemnification clause in favor of the City and provide for insurance coverage to the
City to be provided by the user.
· Interference with public functions- Private use of a right-of-way may interfere with
the public functions of the right-of-way. In addition to streets, rights-of-way often
contain public utilities, signage and pedestrian facilities for the benefit of the general
public. Private use should not interfere with these facilities. While private use can
sometimes be shown not to conflict with these facilities, most communities as noted
have taken the position that private use is usually not allowed.
· Traffic Safety- Private use may compromise the safety of persons using public streets
if the private use obstructs traffic, confuses motorists, blocks views or otherwise acts
as an impediment or hazard to traffic. Because of potential liability issues noted
above, most cities do not allow private use except in rare or unusual circumstances.
The attached memorandum from the Engineering Department underscores these
concerns.
Proposal- The applicants have proposed specific ordinance language as follows:
Fences shall not be permitted in any right-of-way, except that Scott County may permit
construction offences within the right-ofway of County State Aid Highways.
This language was submitted to Scott County for review. The response received by the
City was that the County was opposed to the specific language proposed and suggested
that the City may want to consider an amendment which limited City regulations to City
streets only and remained silent on the issue of County or State highways. A copy of the
County response is attached.
This application, and the County response to it, raises both regulatory and policy issues.
While the City may have some authority to regulate the use of County or State right-of-
way, City regulations may be superseded by other authorities if superior public purposes
are being served by these other authorities. For example, the State could build a noise
wall along Highway 13 as a means of protecting the public health.
As a policy matter, the question is whether the City wishes to continue to assert control
over fences in State or County rights-of-way, knowing that the possibility exists that City
controls could be overridden, or is the City satisfied to allow the County and State to
regulate their own rights-of-way, knowing that each is also subject to the concerns
outlined above regarding the private use of public right-of-way?
If the City were to adopt language along the lines suggested by the County, the City
would have no control over such structures and would have no guarantee of some
minimum level of aesthetics. The attached map shows the County and State roads in the
City which would be affected by the language proposed by the County. However, given
the position expressed by the County, it does not appear that the County is anxious to
issue fence permits on a wholesale basis. Traditionally, MnDGT has not freely issued
permits for the use of its' right-of-way and it would seem unlikely that they would adopt
a more liberal position in that regard.
ALTERNATIVES:
8 1 2964E.DOC/DR
2
1. Approve amendment as requested
2. Approve an amendment consistent with language suggested by Scott County
3. Approve amendment with specific changes adopted by the Commission
4. Deny the request
5. Continue the case for specific reasons
RECOMMENDATION: Specify policy direction and recommend Council adoption of
ordinance language consistent with the suggested policy direction.
ACTION REQmRED: Motion and second consistent with desired alternative
812964E.DOCIDR
3
Planning Case File No.
Property Identification No.
City of Prior Lake
LAND USE APPLICATION
q~-O&~
16200 Eagle Creek Avenue S.E. / Prior Lake, Minnesota 55372-1714 / Phone (612) 447-4230, Fax (612) 447-4245
Type of Application: Brief description of proposed project (attach additional
o Rezoning, from (present zonini) sheets/narrative if desired)
to (proposed zonini) v 13 ~ ~ ~ A.~ ~
B Amendment to City Code, Compo Plan or City Ordinance ~ ~ U1 s ~ ~
o Subdivision of Land ~ ... ~~~f?4.1! ~.~ . tr^
o Administrative Subdivision ~ ~.........~..... Lc... ~-~
o Conditional Use Permit ......... Il~ L~ --@~;I"""""P,)f~
o Variance Applicable Ordinance Section(s): , . , I S- ~ ~L t....~
( t:>f< I). '" S' -0.1) Ii:
ccr' V/V'j ~
Applicant(s): H~ ~..~
Address: 6S ~" 1-1 MJl../3 t. .~ '? /iA<:. rt IV..~
Home Phone: "I 2. -C{y -.;- Ii::. '7 Work Phone:
~/L Y'1~ 77Y<j
Property Owner(s) [If different from Applicants]:
Address:
Home Phone: Work Phone:
Type of Ownership: Fee -:-k Contract for Deed _ Purchase Agreement .
Legal DescriPt;:;'n~ ~ttach a copy if there is not enough space on this sheet):
AJ,~ ~tr~
To the best of my knowledge the information procided in this application and other material submitted is correct. In
addition, I have read the relevant sections of the Prior Lake Ordinance and procedural guidelines, and understand that
appJiciltions will n,Rt be processed until d emed complete by the Planning Director or assignee.
H A, 31"'l. ~ .-vt ,v\ V ,v I -':-1. 0 ~,
f) 7-/ -9~
A licant's Signa re Date
Fee Owner's Signature
Date
THIS SPACE TO BE FILLED IN BY THE PLANNING DIRECTOR OR DESIGNEE
PLANNING COMMISSION
CITY COUNCIL
APPROVED
APPROVED
DENIED
DENIED
DATE OF HEARING
DA TE OF HEARING
CONDITIONS:
Signature of Planning Director or Designee
Date
T Appendix ( change noted in italics)
6.11 Screening: (Ord. 95-05)
Proposed change in wording for (E) regarding the last sentence.
F~ces shall not be permitted in any right-of-way, except that Scott County may permit construction of
fences within the right of way of County State Aid Highways.
II: A r f fi.-I-l "f} qt (H i1 ;< I':,:"i~ t () .... I- L-(. IV I 1'1 PRo I' 0 S rt <.. )
Proposal for North end of Harbor South of Hwy 42 North of tennis court between the Don Kotula
and Dr. Ed Reese properties.
Project:
Erect a solid wood fence that stands 6-7 feet above Hwy 42. runs approximatelv 525 feet long and
is substantial enough to withstand wind and weather for 25+ years. Plant 5 + foot trees next to fence and
pay for both trees and fence throu~h voluntary contributions.
Objective:
. Act as a security barrier
. Reduce sound
. Reduce, or eliminate sight of traffic on 42.
. Eliminate trespassing down hill to lake through Association property- Summer and Winter
. Retain a uniform look that is attractive and adds value.
Ways to meet objectives:
. Plant Spruce trees: To block out the sight of automobiles (seedlings and small transplants) 1-3
below have been completed and paid for already from voluntary contributions.
1. Plant close together (5ft centers)
2. Several rows deep (2 rows deep on each end and 12 rows deep in middle section.
3. Length of area - 850 ft.~ Depth 10 to 65 feet (Approximately 1,050 seedlings
planted).
* Through voluntary contributions- this will add one row of taller spruce trees towards top of
bank next to proposed fence. They should be 5-8 feet tall. (approximately 40 trees over a 240 ft
distance) .
. Build Fence:
1. Treated wood - 525 feet long
2. 23-35 ft from curbs on County highway 42
3. 7 to 8 ft. fence (Approximately 6 -7ft above highway)
Constructed from 2" x 6" x 8 ft. treated lumber & 4" x 6" x lOft. treated
posts (posts rest about 3 ft: in ground).
will eliminate almost all road noise.
will not eliminate all sight problems until trees reach 15 ft height.
Should eliminate security problems and the way trespassers reach water.
Cost of spruce trees and fence:
. Fence - approximately $24 per lineal foot. Total projected cost = $13.000
. Spruce trees - Approximately $100-$200 depending on size and variety.
Variety of spruce - Norway, White, Colorado
Blue and Black Hills spruce.
Size - 5 ft: - 8ft
Optimum number = 40
Total projected cost = $ 6 000. (based on 40 trees x $150)
TOTAL PROJECTED COST for optimum size fence and number of trees = $19 000.
SCOTT COUNTY
PUBLIC WORKS AND LANDS DIVISIO
HIGHWAY DEPARTMENT
600 COUNTRY TRAIL EAST
JORDAN, MN 55352-9339
GARY L. CUNNINGHAM (612) 496-8346
COUNTY ADMINISTRATOR
BRAD LARSON
ASSOCIA TE ADMINISTRATOR
D rn@rnO'MrnrD
JJ./91&) U
Fax: (612) 496-8365
July 18, 1996
Jane Kansier
Planning Coordinator
City of Prior Lake
16200 Eagle Creek Ave. S.E.
Prior Lake MN 55372-1714
RE: Fence Ordinance
Dear Ms. Kansier:
This is in response to the City's consideration of an amendment to the city code and
zoning ordinance on fences within the public right-of-way. While we do not have a
problem with the proposal, Scott County is opposed to the amendment as written.
If the ordinance is recommended for change, the change should not specifically
reference Scott County right-of-way. We recommend that the ordinance specify that no
fences shall be placed within the right-of-way of Prior Lake streets. The ordinance
would be "silent" on State and County highways. This we believe would satisfy the
City's concern on their system, continue to maintain the State's and County's statutory
authority on their system and not "advertise" the idea that private fences may be
allowed on public right-of-way.
If you further questions or need additional information please feel free to call me.
Sincerely,
~
Bradley J. Larson, .E.
Associate Administrator - Public Works and Lands
B JUan
c: John Roach, Assistant County Attorney
An Equal OpportuniryjSafety A ware Employer
INTEROFFICE MEMORANDUM
TO:
FROM:
RE:
DATE:
DON RYE, DIRECTOR OF PLANNING AND ZONING ~D'. I
JOHN WINGARD, ASSISTANT CITY ENGINEER ..> 1 \N
FENCES IN PUBLIC RIGHT-OF-WAY
AUGUST 5, 1996
We have given careful consideration to the request by private individuals to construct fences in
public right-of-way. For the following reasons, we would discourage the construction of fences
in City right-of-way.
. The fence can create an obstacle to the City's maintenance or public safety personnel that
might need access to the City's property.
. If the fence is constructed on public property, then the issue of who will maintain the fence
needs to be resolved. The City's maintenance personnel are busy and have a lot of facilities
to keep in good working order. Maintaining our streets, water and sewer systems should be a
higher priority.
. The design and location of fences needs to allow for good visibility for our motorists and
pedestrians.
. The City needs to allow adequate space for snow storage along our streets. Fences can be
damaged from the weight of the snow when the plows clear the streets.
. The fence can become another obstacle for a car that is out of control that leaves the paved
surface. The traffic engineers are requiring clear zones on streets to improve the safety.
These ideas are mutually recognized by other cities as reasons why you seldom see fences in City
right-of-way. I hope this helps to provide you with some of the rationale used by the .City in
formulating our policy regarding fences in public right-of-way.
162(9~~~~'~" Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
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EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
PRIOR LAKE, MINNESOTA
HELD: September 3, 1996
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 in said City on Tuesday, the 3rd day of September, 1996, at
____ o'clock _.M., for the purpose, in part, of authorizing the
issuance of, and awarding the sale of, $2,430,000 General
Obligation Refunding Bonds of 1996 of the City.
The following members were present:
and the following were absent:
Member
resolution and moved its adoption:
introduced the following
Resolution Number 96-93
RESOLUTION PROVIDING FOR ISSUANCE
OF $2,430,000 GENERAL OBLIGATION
REFUNDING BONDS OF 1996
A. WHEREAS, the City of Prior Lake, Minnesota (the
"City"), has retained , in
Minnesota, as its independent financial advisor for the
competitive negotiated sale of $2,430,000 General Obligation
Refunding Bonds of 1996 (the "Bonds") and was therefore
authorized to sell the Bonds by private negotiation in accordance
with Minnesota Statutes, Section 475.60, Subdivision 2(9) ; and
B. WHEREAS, the City owns and operates a municipal
water and sewer system as a combined revenue producing public
utility (the "System") and there are outstanding: (i) General
Obligation Advance Refunding Bonds of 1992, dated February 1,
1992 (the "Prior Bonds") ; and (ii) General Obligation Water and
Sewer Revenue Bonds of 1995, dated November 1, 1995 (the "Prior
Water and Sewer Revenue Bonds"), a portion of the interest and
principal of the Prior Bonds and all of the interest and
314807.1
principal of the Prior Water and Sewer Revenue Bonds constitute a
prior lien upon the net revenues of the System. The Prior Bonds
and Prior Water and Sewer Revenue Bonds are hereinafter referred
to collectively as the "Outstanding Revenue Bonds"; and
C. WHEREAS, the City has heretofore issued the Prior
Bonds for the purpose of providing money, together with other
available funds, to refund in advance of maturity the outstanding
bonds of the following issues: (a) General Obligation Improvement
Bonds of 1986, dated February 1, 1986 (the "Improvement Bonds");
and (b) General Obligation Water Revenue Bonds of 1987, dated
October 1, 1987 (the "Water Bonds") of the City. The Improvement
Bonds were issued for the purpose of providing money to finance
the construction of various improvements within the jurisdiction
of the City (the "Improvement Project"). The Water Bonds were
issued for the purpose of providing money to finance the
construction of various improvements to the municipal water
system within the jurisdiction of the City (the "Water Project") ;
and
D. WHEREAS, $3,025,000 in principal amount of the
Prior Bonds which mature in the years 1996 and thereafter are
subject to redemption and prepayment at the option of the City on
December 1, 1995, and on any interest payment date thereafter at
a price of par plus accrued interest as provided in the
resolution of the City Council, dated January 13, 1992
authorizing the issuance of the Prior Bonds (the "Prior
Resolution"); and
E. WHEREAS, the City Council deems it desirable and in
the best interests of the City to call for redemption and
prepayment all (i.e., $2,405,000) of the Prior Bonds which mature
on December 1, 1998 and thereafter on December 1, 1996, the next
interest payment date, in accordance with the Prior Resolution in
order to reduce the debt service costs to the City; and
F. WHEREAS, the City Council has heretofore determined
and declared that it is necessary and expedient to issue the
Bonds of the City, pursuant to Minnesota Statutes, Chapter 475,
to provide funds, together with certain available funds of the
City, to pay on December 1, 1996, all of the City's Prior Bonds
which then remain outstanding (the "Refunding"); and
G. 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 Council of the
City of Prior Lake, Minnesota, as follows:
314807.1
2
:..
1. Acceotance of Offer. The offer of Juran & Moody,
Inc. (the "Purchaser"), to purchase the Bonds of the City (or
individually, a "Bond"), in accordance with the terms and at the
rates of interest hereinafter set forth, and to pay therefor the
sum of $2,386,260, plus interest accrued to settlement, is hereby
accepted.
2. Bond Terms.
(a) Title: Original Issue Date: Denominations:
Maturities. The Bonds shall be titled "General Obligation
Refunding Bonds of 1996", shall be dated September 1, 1996, as
the date of original issue and shall be issued forthwith on or
after such date as fully registered bonds. The Bonds shall be
numbered from R-1 upward in the denomination of $5,000 each or in
any integral multiple thereof of a single maturity (the
"Authorized Denominations"). The Bonds shall mature, without
option of prepayment, on December 1 in the years and amounts as
follows:
Year
Amount
Year
Amount
1998-2000
2001-2002
2003-2004
$275,000
290,000
300,000
2005
2006
$210,000
215,000
All dates are inclusive.
(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
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
paragraph 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 nominee of the existing or
a successor Depository, the "Nominee").
314807.1
3
"
(iii) With respect to the Bonds neither the City nor
the Bond Registrar shall have any responsibility or
obligation to any broker, dealer, bank, or any other
financial institution for which the Depository holds Bonds
as securities depository (the "Participant") or 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 Register 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 or upon the Holder of 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.
(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
314807.1
4
provisions in paragraph 10 hereof, references to the Nominee
hereunder shall refer to such new Nominee.
(vi) So long as any Bond is registered in the name of
a Nominee, all payments with respect to the principal of and
premium, if any, and interest on such Bond and all notices
with respect to such Bond shall be made and given,
respectively, by the Bond Registrar or 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 rece~pt 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.
(c) Termination of Book-Entry Only System. Discontinu-
ance of a particular Depository's services and termination of the
book-entry only system may be effected as follows:
314807.1
5
_...........--.=,,~~'"~.".~,,~--......_'_"'~h.'."~'"""~..~"'_.._.. ."~~""'>"'~~"~~____~""'"-__~,,_~_......,.,~..~..,..__,__.,,+......,,",,""_,_..." _..,...___~~..,",~"..,...~~_..,,~%,__..,___.,._".,_"____,....~,_.'''-..>"......_.,__"".,__.--......___"_<~..,,...,.. ,__
(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
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
11 hereof. To the extent that the Beneficial Owners are
designated as the transferee by the Holders, in accordance
with paragraph 11 hereof, the Bonds will be delivered to the
Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit or
restrict the provisions of paragraph 11 hereof.
(d) The City Manager is authorized and directed to
execute in the name of the City the Letter of Representations in
substantially the form on file in the office of the City. In the
event of the disability or the resignation or other absence of
the Manager of the City, such other officer of the City who may
act in his or her behalf shall without further act or
authorization of the City do all things and execute all
instruments and documents required to be done or to be executed
by such absent or disabled official. The provisions in the
Letter of Representations are incorporated herein by referenced
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.
314807.1 6
3. Allocation of Bonds to Improvement Refunding
Portion of the Prior Bonds and to Water Revenue Refundina Portion
of the Prior Bonds: Allocation of Prepayments to Portions of Debt
Service. The aggregate principal amount of $
maturing in the principal amounts of $5,000 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 remaining aggregate
principal amount of the Bonds of $ maturing in each of
the years and amounts hereinafter set forth is 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)
1998
1999
2000
2001
2002
2003
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 moneys 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 Project, 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 Project, the prepayment shall be allocated to the Water
Revenue Refunding Portion of debt service.
4. Purpose. The Bonds (together with other available
funds, if any, appropriated in paragraph 16 hereof) shall provide
funds to finance 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.
314807.1
7
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, 1997, 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 Interest Maturity Interest
Year Rate Year Rate
1998 % 2002 %
1999 2003
2000 2004
2001 2005
6. No Redemption. The Bonds shall not be subject to
redemption and prepayment prior to their maturity.
7. Bond Registrar. First Trust 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:
314807.1
8
UNITED STATES OF AMERICA
STATE OF MINNESOTA
SCOTT COUNTY
CITY OF PRIOR LAKE
R-
$
GENERAL OBLIGATION
REFUNDING BOND OF 1996
INTEREST
RATE
MATURITY
DATE
DATE OF
ORIGINAL ISSUE
CUSIP
SEPTEMBER 1, 1996
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS that 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, without
option of prepayment, in the manner hereinafter set forth, the
principal amount specified above, on the maturity date specified
above, and to pay interest thereon semiannually on June 1 and
December 1 of each year (each, an "Interest Payment Date") ,
commencing June 1, 1997, at the rate per annum specified above
(calculated on the basis of a 36D-day year of twelve 3D-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
First Trust 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
314807.1
9
"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
te~s 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 the Letter of Representations, as
defined in the Resolution. Until te~ination of the book-entry
only system pursuant to the Resolution, Bonds may only be
registered in the name of the Depository or its Nominee.]*
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
IT IS HEREBY CERTIFIED AND RECITED that all acts,
conditions and things required by the Constitution and laws of
the State of Minnesota to be done, to 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 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"
(as defined in the Resolution) of the Bonds, 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 of this
issue as they respectively become due, if the net revenues from
the municipal water 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.
Include only until te~ination of the book-entry only
system under paragraph 2 hereof.
*
314807.1
10
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, the corporate seal of the Issuer having been
intentionally omitted as permitted by law.
Registrable by: FIRST TRUST
NATIONAL
ASSOCIATION
Date of Registration:
Payable at: FIRST TRUST NATIONAL
ASSOCIATION
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
CITY OF PRIOR LAKE,
SCOTT COUNTY, MINNESOTA
/s/ Facsimile
Mayor
FIRST TRUST NATIONAL
ASSOCIATION
St. Paul, Minnesota
Bond Registrar
/s/ Facsimile
Manager
By
Authorized Signature
314807.1
11
ON REVERSE OF BOND
No Redemption. The Bonds of this issue (the "Bonds")
are not subject to redemption and prepayment prior to their
maturity.
Issuance: purpose: General Obliqation. This Bond is
one of an issue in the total principal amount of $2,430,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate and denomination, which Bond has been
issued pursuant to and in full conformity with the Constitution
and laws of the State of Minnesota and pursuant to a resolution
adopted by the City Council of the Issuer on September 3, 1996
(the "Resolution"), for the purpose of providing money, together
with certain available money of the Issuer, to redeem on
December 1, 1996, a portion of the outstanding General Obligation
Advance Refunding Bonds of 1992, dated February 1, 1992 of the
Issuer. This Bond is payable out of the General Obligation
Refunding Bonds of 1996 Fund of the Issuer. 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: Exchanqe: Resolution. The Bonds are
issuable solely as fully registered bonds in Authorized
Denominations (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 transferable by the Holder in
person or by his, her or its attorney duly authorized in writing
at the principal office of the Bond Registrar upon presentation
and surrender hereof to the Bond Registrar, all subject to the
terms and conditions provided in the Resolution and to reasonable
regulations of the 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.
314807.1
12
Fees unon 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 Reqistered 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.
Oualified Tax-Exempt Oblioation. This Bond has been
designated by the Issuer as a "qualified tax-exempt obligation"
for purposes of Section 26S(b) (3) of the Internal Revenue Code of
1986, as amended.
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:
UTMA -
- as tenants in common
- as tenants by the entireties
as joint tenants with right of
and not as tenants in common
as custodian for
survivorship
TEN COM
TEN ENT
JT TEN -
(Minor)
Uniform
(Cust)
under the
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
314807.1
13
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.)
314807.1
14
9. Execution: Temporary Bonds. The Bonds shall be
printed (or, at the request of the Purchaser, typewritten) and
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
(or, at the request of the Purchaser, photocopied) facsimile; and
provided further that both of such signatures may be printed (or,
at the request of the Purchaser, photocopied) facsimiles and the
corporate seal may be omitted on the Bonds as permitted by law.
In the event of disability or resignation or other absence of
either such officer, the Bonds may be signed by the manual or
facsimile signature of that officer who may act on behalf of such
absent or disabled officer. In case either such officer whose
signature or facsimile of whose signature shall appear on the
Bonds shall cease to be such officer before the delivery of the
Bonds, such signature or facsimile shall nevertheless be valid
and sufficient for all purposes, the same as if he or she had
remained in office until delivery. The City may elect to
deliver, in lieu of printed definitive bonds, one or more
typewritten temporary bonds in substantially the form set forth
above, with such changes as may be necessary to reflect more than
one maturity in a single temporary bond. Such temporary bonds
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, 1996. 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
314807.1
15
. --'_.'--~------"'-'----"""'-'-""-"""""""'--'''''''''''''-'~'''~-''''~'' ,~-""""_______,__~......_",-~_,.~.."..,...."...".,,~..~~__,,,_,__,._._.._"...,.......,;..",._"'=._.._~"___,_~c,~,'_,........_____~.~^,.~___.......__~.~,.~_~..
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 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 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 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
314807.1
16
dates. The Manager is hereby authorized to negotiate and execute
the terms of said agreement.
12. Riahts Upon Transfer or Exchange. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
other Bond shall carryall 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 (15th) 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 (10) days prior to the Special
Record Date.
14. Treatment of Reqistered Owner. The City and Bond
Registrar may treat the person in whose name any Bond is
registered as the owner of such Bond for the purpose of receiving
payment of principal of and premium, if any, and interest
(subject to the payment provisions in paragraph 13 above) on,
such Bond and for all other purposes whatsoever 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. Deliverv: Application of Proceeds. The Bonds when
so prepared and executed shall be delivered by the Finance
Director to the Purchaser upon receipt of the purchase price, and
the Purchaser shall not be obliged to see to the proper
application thereof.
16. Fund. Accounts and Subaccounts.
(a) $ of the proceeds of the Bonds shall be
deposited in the Debt Service Account of the General Obligation
Advance Refunding Bonds of 1992 Fund (the "Payment Account"),
which amount, together with all other funds held therein and
$ of the City deposited at bond closing for the Bonds
is sufficient to prepay the outstanding Prior Bonds on December
1, 1996.
314807.1
17
(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 this 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 1996 Fund"
(the "Fund") to be administered and maintained by the Finance
Director as a bookkeeping account separate and apart from all
other funds maintained in the official financial records of the
City. The Fund shall be maintained in the manner herein
specified until all of the Bonds and the interest thereon have
been fully paid. There shall be maintained in the Fund two (2)
separate accounts, to be designated the "Cost of Issuance
Account" and "Debt Service Account", respectively, to which shall
be credited and debited all income and disbursements of the
System as hereinafter set forth. The Finance Director of the
City and all officers and employees concerned therewith shall
establish and maintain financial records of the receipts and
disbursements of the System 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) Cost of Issuance Account. There shall be
deposited in the Cost of Issuance Account $ of
the remaining proceeds of the Bonds. Monies in the Cost of
Issuance Account shall be used to pay the costs of issuing
the Bonds. Any monies remaining in the Cost of Issuance
Account after all costs of issuance have been paid or
provided for shall be transferred to the Debt Service
Account for the Bonds.
(ii) Debt Service Account. There shall be maintained
two (2) separate subaccounts in the Debt Service Account to
314807.1
18
be designated the "Improvement 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
which are not needed to pay the Improvement Refunding
Portion of the Prior Bonds as a result of the
Refunding; (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 and interest thereon; (iv) any collections of all
taxes heretofore levied for the payment of the
Improvement Refunding Portion of the Prior Bonds and
interest thereon 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 Cost of Issuance Account after all
costs of issuing the Bonds have been paid; (vi) a pro
rata share of any funds remaining on deposit in the
Payment Account established for the Prior Bonds after
the same have been paid and discharged; (vii) all
investment earnings on funds held in the Improvement
Subaccount; and (viii) 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 and
314807.1
19
-_.~..~----~~-,..'^'"...,"'-~"..~~.,_. "....,'"--~-"'-"""~-'----
other funds herein pledged to the payment of the
principal and interest of the Water Revenue Refunding
Portion of the Bonds of this issue are insufficient
therefor; (iv) a pro rata share of funds remaining in
the Cost of Issuance Account after all costs of issuing
the Bonds have been paid; (v) a pro rata share of any
funds remaining on deposit in the Payment Account
established for the Prior Bonds after the same have
been paid and discharged; (vi) all investment earnings
on funds held in the Water Revenue Subaccount; and
(vii) 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 amount not greater than the lesser of five percent (5%) of
the proceeds of the Bonds or $100,000. To this effect, any
proceeds of the Bonds and any sums from time to time held in the
Cost of Issuance 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 Improvement Project financed
by the Improvement Bonds. The balance of said special
assessments which are not needed to pay the Improvement Refunding
314807.1 20
_ .".,_...."..-~.,~"',___"._,..~""".__._,,,.____"'.>__""~~._'-'......,._,.,,,, .'..M',..._........",_.._, ". '.. >-,~~~.~""~._,~.,._.,,,._-._-,--.'"""'""-----~,~,......,;"_.~.--.....---_.-...-""",-,._#~
Portion of the Prior Bonds as a result of the Refunding shall be
pledged to the payment of the Improvement Refunding Portion of
the Bonds.
18. Tax Levy: Coveraae 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
$
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 (5%) 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 Improve-
ment 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 taxes levied in paragraph 18 of the Prior
Resolution authorizing the issuance of the Prior Bonds, in the
years ____ through 2005 for collection in ____ through 2006 shall
be canceled.
19. Excess Net Revenues. Net revenues in excess of
those required for the foregoing may be used for any proper
purpose.
20. Sufficiency of Net Revenues: Coveraae 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 herein authorized and the Outstanding Revenue Bonds and a
sum at least five percent (5%) in excess thereof, and the net
revenues of the System are hereby pledged on a parity with the
314807.1
21
~_,___.",-___"'O<o__.._.o.d-,=~.""____",""""___,,,,,_,,.,""'"",,,~;>~<,"~,-~",,,,,,~,--,-------""~.-"~-"'--'~"""""-""'--"'~"""'-""'--"""~"-------~-~^.,,..,.-
Outstanding Revenue Bonds, for the payment of the Water Revenue
Refunding Portion of the Bonds of this issue and shall be applied
for that purpose, but solely to the extent required to meet the
principal and interest requirements of this issue 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 herein authorized and such additional obligations and any
such pledge and appropriation of the net revenues may be made
superior or subordinate to, or on a parity with the pledge and
appropriation herein.
21. 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 Revenue Bonds.
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.
23. 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
314807.1
22
"Rule"), 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 each nationally
recognized municipal securities information repository ("NRMSIR")
and to the appropriate state information depository ("SID"), if
any, for the State of Minnesota, in each case as designated by
the Commission 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 time to
time the terms of the Undertaking as provided therein.
B. Provide or cause to be provided, in a timely manner, to
(i) each NRMSIR or to the Municipal Securities Rulemaking Board
("MSRB") and (ii) the SID, notice of the occurrence of certain
material events with respect to the Bonds in accordance with the
Undertaking.
C. Provide or cause to be provided, in a timely manner, to
(i) each NRMSIR or to the MSRB and (ii) the SID, notice of a
failure by the City to provide the annual financial information
with respect to the City described in the Undertaking.
D. The City agrees that its covenants pursuant to the Rule
set forth in this paragraph 23 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 right 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 with "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 modifications thereof or additions
thereto as are (i) consistent with the requirements under the
Rule, (ii) required by the Purchaser of the Bonds, and (iii)
acceptable to the Officers.
24. General Obligation Pledae. 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 net revenues of the System appropriated and pledged to the
payment of principal and interest on the Water Revenue Refunding
Portion of the Bonds, together with other funds irrevocably
appropriated to the Debt Service Account herein established,
314807.1
23
~__,~__~",_~."_~_~,__"",.,,,,__~"_A__'__-""_""_''''""''_'<____"'"""'.__~.".__,_"__..__.......,,.~.___...._..._~...__ ,..,~---......"_.".,..,_u~_..,,~.,_..........~~,.,._._~-..............---..-..---,
shall at any time be insufficient to pay such principal and
interest 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 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.
25. 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, 1996 to Firstar Trust
Company, Milwaukee, Wisconsin, as agent for Firstar Bank of
Minnesota, N.A., successor to American Bank National Association
(formerly, American National Bank and Trust Company), the paying
agent for the Prior Bonds, and to all registered holders of the
Prior Bonds. Said notice shall be in substantially the form
attached hereto as Exhibit A.
26. 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.
27. Certificate of Registration. The Manager is
hereby directed to file a certified copy of this resolution with
the County Auditor of Scott County, Minnesota, together with such
other information as he or she shall require, and to obtain the
County Auditor's certificate that the Bonds have been entered in
the County Auditor's 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.
28. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Purchaser, and to the attorneys approving the legality of the
issuance of the Bonds, certified copies of all proceedings and
records of the City relating to the Bonds and to the financial
condition and affairs of the City, and such other affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Bonds as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
furnished, shall be deemed representations of the City as to the
facts recited therein.
314807.1
24
29. Neaative Covenant as to Use of Proceeds and
Project. The City hereby covenants not to use the proceeds of
the Bonds or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangements for the
cost of the Project, 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.
30. 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 that (1) the Bonds are issued by a
governmental unit with general taxing powers, (2) no Bond is a
private activity bond, (3) ninety-five percent (95%) or more of
the net proceeds of the Bonds are to be used for local
governmental activities of the City (or of a governmental unit
the jurisdiction of which is entirely within the jurisdiction of
the City), and (4) the aggregate face amount of all tax-exempt
bonds (other than private activity bonds) issued by the City (and
all 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:
(i) 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;
(ii) the aggregate face amount of the Bonds does
not exceed $5,000,000;
(iii) each of the Prior Bonds was issued as part
of an issue which was treated as meeting the rebate
314807.1 25
requirements by reason of the exception for
governmental units issuing $5,000,000 or less of bonds;
(iv) the average maturity of the Bonds does not
exceed the average maturity of the Prior Bonds; and
(v) no part of the Bonds has a maturity date
which is later than the date which is thirty (30) years
after the dates the Prior Bonds were issued.
31. Designation of Oualified Tax-Exempt Obligations:
Issuance Limit. In order to qualify the Bonds as "qualified
tax-exempt obligations" within the meaning of Section 26s(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 26S(b) (3) of the Code;
(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 1996 will not exceed $10,000,000;
(e) not more than $10,000,000 of obligations
issued by the City during this calendar year 1996 have
been designated for purposes of Section 26s(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 149(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.
314807.1
26
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.
32. Severability. If any section, paragraph or
prov1s1on 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.
33. 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:
adopted.
Whereupon said resolution was declared duly passed and
314807.1
27
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 of said City, duly called and
held on the date therein indicated, insofar as such minutes
relate to authorizing the issuance of, and awarding the sale of,
$2,430,000 General Obligation Refunding Bonds of 1996 of said
City.
WITNESS my hand this 3rd day of September, 1996.
Manager
314807.1
28
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
GENERAL OBLIGATION ADVANCE REFUNDING BONDS OF 1992
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, 1996
those outstanding bonds of the City designated as General
Obligation Advance Refunding Bonds of 1992, dated February 1,
1992, having stated maturity dates in the years 1998 through
2007, and totalling $2,405,000 in principal amount. The bonds
are being called at a price of par plus accrued interest to
December 1, 1996, on which date all interest on said bonds will
cease to accrue. Holders of the bonds hereby called for
redemption are requested to present their bonds for payment, at
Firstar Trust Company, Milwaukee, Wisconsin, as agent for Firstar
Bank of Minnesota, N.A., successor to American Bank National
Association (formerly, American National Bank and Trust Company),
Attn: Corporate Trust Services, 615 East Michigan Street, Fourth
Floor, in Milwaukee, Wisconsin 53202, on or before December 1,
1996.
Dated: September 3, 1996.
BY ORDER OF THE CITY
COUNCIL
/s/ Frank Boyles
Manager
Important Notice: Under the Interest and Dividend Compliance Act
of 1983, 31% will be withheld if tax identification is not
properly certified.
Additional information
may be obtained from:
JURAN & MOODY, INC.
Minnesota Mutual Life Building
400 North Robert Street, Suite 800
St. Paul, Minnesota 55101-2091
Telephone No.: (612) 224-1500
Fax No.: (612) 224-5124
Attn.: Lori A. Giampaolo
Public Finance Department
314807.1