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16200 Eagle Creek Avenue S.E.
Prior LakeEMl1I':LM.'f7E~MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE
CITY OF PRIOR LAKE, MINNESOTA
HELD: March 25,2004
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 March 25,2004, at 5:00 P.M., for the purpose, in part, of authorizing the
issuance and awarding the sale of $1 ,385,000 General Obligation Improvement
Crossover Refunding Bonds of 2004.
The following members were present: Mayor Haugen and Councilmembers:
Blomberg, LeMair and Petersen.
and the following were absent: Councilmember Zieska
Member Peterson introduced the following resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $1,385,000
GENERAL OBLIGATION IMPROVEMENT CROSSOVER REFUNDING BONDS
OF 2004, PLEDGING FOR THE SECURITY THEREOF, SPECIAL ASSESSMENTS
AND LEVYING A TAX FOR THE PAYMENT THEREOF
WHEREAS, the City Council of the City of Prior Lake, Minnesota (the "City"), hereby
determines and declares that it is necessary and expedient to provide moneys for a
crossover refunding of the City's: (i) $1,065,000 original principal amount of General
Obligation Improvement Bonds of 1997, dated November 1, 1997 (the "Prior 1997
Bonds"), which mature on and after December 1, 2005; (ii) $1,275,000 original principal
amount of General Obligation Improvement Bonds of 1998, dated December 1, 1998 (the
"Prior 1998 Bonds"), which mature on and after December 1,2005; and (iii) $1,025,000
original principal amount of General Obligation Improvement Bonds of 1999, dated
October 1, 1999 (the "Prior 1999 Bonds"), which mature on and after December 1, 2006;
and
WHEREAS, $365,000 aggregate principal amount of the Prior 1997 Bonds which
matures on and after December 1,2005, is callable on December 1,2004 (the "Refunded
1997 Bonds"), at a price of par plus accrued interest, as provided in Resolution No. 97-
92, duly adopted by the City Council on October 20, 1997, authorizing the issuance of the
Prior 1997 Bonds (the "Prior 1997 Resolution"); and
WHEREAS, $525,000 aggregate principal amount of the Prior 1998 Bonds which
matures on and after December 1,2005, is callable on December 1,2004 (the "Refunded
1998 Bonds"), at a price of par plus accrued interest, as provided in Resolution No. 98-
www.cityofpriorlake.com
Phone 952.447.4230 / Fax 952.447.4245
133, duly adopted by the City Council on December 1, 1998, authorizing the issuance of
the Prior 1998 Bonds (the "Prior 1998 Resolution"); and
WHEREAS, $450,000 aggregate principal amount of the Prior 1999 Bonds which
matures on and after December 1,2006, is callable on December 1,2005, (the "Refunded
1999 Bonds"), at a price of par plus accrued interest, as provided in Resolution No. 99-
110, duly adopted by the City Council on October 18, 1999, authorizing the issuance of
the Prior 1999 Bonds (the "Prior 1999 Resolution"); and
WHEREAS, (i) the Prior 1997 Bonds, the Prior 1998 Bonds and the Prior 1999 Bonds
are referred to herein together as the "Prior Bonds"; (ii) the Refunded 1997 Bonds, the
Refunded 1998 Bonds and the Refunded 1999 Bonds are referred to herein together as
the "Refunded Bonds"; and (iii) the Prior 1997 Resolution, the Prior 1998 Resolution and
the Prior 1999 Resolution are referred to herein together as the "Prior Resolutions"; and
WHEREAS, the refunding of the Refunded Bonds is consistent with covenants made
with the holders thereof, and is necessary and desirable for the reduction of debt service
cost to the City; and
WHEREAS, the City Council has heretofore determined and declared that it is necessary
and expedient to issue $1,385,000 aggregate principal amount of General Obligation
Improvement Crossover Refunding Bonds of 2004 (the "Bonds" or individually, a
"Bond"), pursuant to Minnesota Statutes, Chapter 475, to provide moneys for a crossover
refunding of the Refunded Bonds; and
WHEREAS, as permitted by Minnesota Statues, Section 475.60, Subdivision 2(5), the
public sale requirements do not apply to the Bonds; and
WHEREAS, it is in the best interests of the City that the Bonds be issued in book-entry
form as hereinafter provided; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Prior
Lake, Minnesota, as follows:
1. Acceptance of Offer. The offer of Northland Securities, Inc. (the
"Purchaser"), to purchase the Bonds in accordance with the terms and at the rates of
interest hereinafter set forth, and to pay therefor the sum of$I,362,840.00, plus interest
accrued to settlement, is hereby accepted.
2. Bond Terms.
(a) Original Issue Date; Denominations; Maturities. The Bonds shall dated
April 1, 2004, as the date of original issue, shall be issued forthwith on or after such date
in fully registered form, 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 1 in the years and amounts as follows:
Year
Amount
Year
Amount
2005 255,000
2006 370,000
2007 360,000
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 corresponding additions may be made to the
provisions of the applicable Bond(s).
2008
2009
275,000
125,000
(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 paragraphs 5 and 10
Authorized Denominations for any Bond shall be deemed to be limited during the
Book Entry Only Period to the outstanding principal amount of that Bond.
(ii) Upon initial issuance, ownership of the Bonds shall be registered
in a bond register maintained by the Bond Registrar (as hereinafter defined) in the
name of CEDE & CO., as the nominee (it or any nominee of the existing or a
successor Depository, the "Nominee").
(iii) With respect to the Bonds neither the City nor the Bond Registrar
shall have any responsibility or obligation to any broker, dealer, bank, or any
other financial institution for which the Depository holds Bonds as securities
depository (the "Participant") or the person for which a Participant holds an
interest in the Bonds shown on the books and records of the Participant (the
"Beneficial Owner"). Without limiting the immediately preceding sentence,
neither the City, nor the Bond Registrar, shall have any such responsibility or
obligation with respect to (A) the accuracy of the records of the Depository, the
Nominee or any Participant with respect to any ownership interest in the Bonds,
or (B) the delivery to any Participant, any Owner or any other person, other than
the Depository, of any notice with respect to the Bonds, including any notice of
redemption, or (C) the payment to any Participant, any Beneficial Owner or any
other person, other than the Depository, of any amount with respect to the
principal of or premium, if any, or interest on the Bonds, or (D) the consent given
or other action taken by the Depository as the Registered Holder of any Bonds
(the "Holder"). For purposes of securing the vote or consent of any Holder under
this Resolution, the City may, however, rely upon an omnibus proxy under which
the Depository assigns its consenting or voting rights to certain Participants to
whose accounts the Bonds are credited on the record date identified in a listing
attached to the omnibus proxy.
(iv) The City and the Bond Registrar may treat as and deem the
Depository to be the absolute owner of the Bonds for the purpose of payment of
the principal of and premium, if any, and interest on the Bonds, for the purpose of
giving notices of redemption and other matters with respect to the Bonds, for the
purpose of obtaining any consent or other action to be taken by Holders for the
purpose of registering transfers with respect to such Bonds, and for all purpose
whatsoever. The Bond Registrar, as paying agent hereunder, shall pay all
principal of and premium, if any, and interest on the Bonds only to the Holder or
the Holders of the Bonds as shown on the bond register, and all such payments
shall be valid and effective to fully satisfy and discharge the City's obligations
with respect to the principal of and premium, if any, and interest on the Bonds to
the extent of the sum or sums so paid.
(v) Upon delivery by the Depository to the Bond Registrar of written
notice to the effect that the Depository has determined to substitute a new
Nominee in place of the existing Nominee, and subject to the transfer provisions
in paragraph 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 receipt of notice requesting such consent or other action
as the record date for such consent or other action; provided, that the City or the
Bond Registrar may establish a special record date for such consent or other
action. The City or the Bond Registrar shall, to the extent possible, give the
Depository notice of such special record date not less than 15 calendar days in
advance of such special record date to the extent possible.
(ix) Any successor Bond Registrar in its written acceptance of its duties
under this Resolution and any paying agency/bond registrar agreement, shall
agree to take any actions necessary from time to time to comply with the
requirements of the Letter of Representations.
(x) In the case of a partial prepayment of a Bond, the Holder may, in
lieu of surrendering the Bonds for a Bond of a lesser denomination as provided in
paragraph 5 hereof, make a notation of the reduction in principal amount on the
panel provided on the Bond stating the amount so redeemed.
(c) Termination of Book-Entry Only System. Discontinuance of a particular
Depository's services and termination of the book-entry only system may be effected as
follows:
(i) The Depository may determine to discontinue providing its
services with respect to the Bonds at any time by giving written notice to the City
and discharging its responsibilities with respect thereto under applicable law. The
City may terminate the services of the Depository with respect to the Bond if it
determines that the Depository is 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 10 hereof. To the extent that the Beneficial Owners
are designated as the transferee by the Holders, in accordance with paragraph 10
hereof, the Bonds will be delivered to the Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit or restrict the
provisions of paragraph 10.
(d) Letter of Representations. The provisions in the Letter of Representations
are incorporated herein by reference and made a part of the resolution, and if and to the
extent any such provisions are inconsistent with the other provisions of this resolution,
the provisions in the Letter of Representations shall control.
3. Purpose; Refunding Findings. The Bonds shall provide funds for a
crossover refunding of the Refunded Bonds (the "Refunding"). It is hereby found,
determined and declared that the Refunding is pursuant to Minnesota Statutes, Section
475.67, Subdivision 13, and as of the crossover date of the Bonds, shall result in a
reduction of the present value of the dollar anlount of the debt service to the City from a
total dollar amount of$1,441,556.85 for the Prior Bonds to a total dollar amount of
$1,399,531.37 for the Bonds, computed in accordance with the provisions of Minnesota
Statutes, Section 475.67, Subdivision 12, and accordingly the dollar amount of such
present value of the debt service for 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 in
said Subdivision 12.
4. Interest. The Bonds shall bear interest payable semiannually on June 1
and December 1 of each year (each, an "Interest Payment Date"), commencing December
1,2004, calculated on the basis of a 360-day year of twelve 30-day months, at the
respective rates per annum set forth opposite the maturity years as follows:
Maturity Year Interest Rate % Maturity Year Interest Rate
%
2005 1.20 2008 2.10
2006 1.50 2009 2.35
2007 1.80
5. No Redemption. The Bonds shall not be subject to redemption and
prepayment prior to their stated maturity dates.
6. Bond Registrar. The Finance Director of the City 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. 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.
7. 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 IMPROVEMENT CROSSOVER REFUNDING BOND OF
2004
Interest Rate
Maturity Date
December 1,
Date of Original Issue
April 1, 2004
CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Prior Lake, Scott County, Minnesota (the "Issuer"), certifies that it is
indebted and for value received promises to pay to the registered owner specified above,
or registered assigns, in the manner hereinafter set forth, the principal amount specified
above, on the maturity date specified above, without option of prior redemption, and to
pay interest thereon semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing December 1, 2004, at the rate per annum
specified above (calculated on the basis of a 360-day year of twelve 30-day months) until
the principal sum is paid or has been provided for. This Bond will bear interest from the
most recent Interest Payment Date to which interest has been paid or, if no interest has
been paid, from the date of original issue hereof. The principal of and premium, if any,
on this Bond are payable upon presentation and surrender hereof at the office of the
Issuer's Finance Director (the "Bond Registrar"), acting as paying agent, or any successor
paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each
Interest Payment Date by check or draft mailed to the person in whose name this Bond is
registered (the "Holder" or "Bondholder") on the registration books of the Issuer
maintained by the Bond Registrar and at the address appearing thereon at the close of
business on the fifteenth day of the calendar month next preceding such Interest Payment
Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be
payable to the person who is the Holder hereof as of the Regular Record Date, and shall
be payable to the person who is the Holder hereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money becomes available
for payment of the defaulted interest. Notice of the Special Record Date shall be given to
Bondholders not less than ten days prior to the Special Record Date. The principal of and
premium, if any, and interest on this Bond are payable in lawful money of the United
States of America. So long as this Bond is registered in the name of the Depository or its
Nominee as provided in the Resolution hereinafter described, and as those terms are
defined therein, payment of principal of, premium, if any, and interest on this Bond and
notice with respect thereto shall be made as provided in 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 system pursuant to the Resolution, Bonds may only be registered in the
name of the Depository or its Nominee.
Issuance; Purpose; General Obligation. This Bond is one of an issue in the total
principal amount of$I,385,000 (the "Bonds"), all of like date of original issue and tenor,
except as to number, maturity, interest rate and denomination, issued pursuant to and in
full conformity with the Constitution and laws of the State of Minnesota and pursuant to
a resolution adopted by the City Council on March 25, 2004 (the "Resolution"), for the
purpose of providing funds sufficient (i) for a crossover refunding on December 1, 2004,
of the Issuer's General Obligation Improvement Bonds of 1997, dated November 1, 1997
and General Obligation Improvement Bonds of 1998, dated December 1, 1998, which
mature on and after December 1,2005, and (ii) for a crossover refunding on December 1,
2005, of the Issuer's General Obligation Improvement Bonds of 1999, dated October 1,
1999, which mature on and after December 1,2006. This Bond is payable out of the
Escrow Account and the Debt Service Account of the Issuer's General Obligation
Improvement Crossover Refunding Bonds of 2004 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 Denominations (as defined in the Resolution) and are
exchangeable for fully registered Bonds of other Authorized Denominations in equal
aggregate principal amounts at the 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 office of the Bond Registrar.
Transfer. This Bond is transferable by the Holder in person or by the Holder's
attorney duly authorized in writing at the 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.
Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection with the
transfer or exchange of this Bond and any legal or unusual costs regarding transfers and
lost Bonds.
Treatment of Registered Owners. The Issuer and Bond Registrar may treat the
person in whose name this Bond is registered as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not this Bond
shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice
to the contrary.
Authentication. This Bond shall not be valid or become obligatory for any
purpose or be entitled to any security unless the Certificate of Authentication hereon shall
have been executed by the Bond Registrar.
Qualified Tax-Exempt Obligation. This Bond has been designated by the Issuer
as a "qualified tax-exempt obligation" for purposes of Section 265(b )(3) of the Internal
Revenue Code of 1986, as amended.
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 constitutional or statutory limitation of indebtedness.
IN WITNESS WHEREOF, the City of Prior Lake, Scott County, Minnesota, by
its City Council has caused this Bond to be executed on its behalfby 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: FINANCE DIRECTOR
CITY OF PRIOR LAKE,
MINNESOTA
Payable at: OFFICE OF THE
FINANCE DIRECTOR
CITY OF PRIOR LAKE,
MINNESOTA
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
FINANCE DIRECTOR.
CITY OF PRIOR LAKE,
MINNESOTA
Bond Registrar
/s/ Facsimile
:Mayor
By
Is/ Facsimile
Manager
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Bond, shall be construed as though they were written out in full according to applicable
laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UTMA - as custodian for
(Cust)
under the
(Minor)
Uniform 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 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:
8. 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,
photocopies) 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.
9. 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 the Bond Registrar. 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 April 1, 2004. The Certificate of
Authentication so executed on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
10. Registration; Transfer; Exchange. The City will cause to be kept at the
office of the Bond Registrar a bond register in which, subject to such reasonable
regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the
registration of Bonds and the registration of transfers of Bonds entitled to be registered or
transferred as herein provided.
Upon surrender for transfer of any Bond at the 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 9) 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 office of the Bond
Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute
(ifnecessary), 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 dates. The
Manager is hereby authorized to negotiate and execute the terms of said agreement.
11. 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.
12. Interest Payment; Record Date. Interest on any Bond shall be paid on
each Interest Payment Date by check or draft mailed to the person in whose name the
Bond is registered (the "Holder") on the registration books of the City maintained by the
Bond Registrar and at the address appearing thereon at the close of business on the
fifteenth day of the calendar month next preceding such Interest Payment Date (the
"Regular Record Date"). Any such interest not so timely paid shall cease to be payable to
the person who is the Holder thereof as of the Regular Record Date, and shall be payable
to the person who is the Holder thereof at the close of business on a date (the "Special
Record Date") fixed by the Bond Registrar whenever money becomes available for
payment of the defaulted interest. Notice of the Special Record Date shall be given by
the Bond Registrar to the Holders not less than ten days prior to the Special Record Date.
13. Treatment of Registered Owner. The City and Bond Registrar may treat
the person in whose name any Bond is registered as the owner of such Bond for the
purpose of receiving payment of principal of and premium, if any, and interest (subject to
the payment provisions in paragraph 12) 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.
14. Delivery; Application of Proceeds. The Bonds when so prepared and
executed shall be delivered by the Finance Director and Treasurer to the Purchaser upon
receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper
application thereof.
15. Fund and Accounts. There is hereby created a special fund to be
designated the "General Obligation Improvement Crossover Refunding Bonds of 2004
Fund" (the "Fund") to be administered and maintained by the Finance Director and
Treasurer 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 the following separate accounts:
(a) Escrow Account. The Escrow Account shall be maintained as an escrow
account with U.S. Bank National Association (the "Escrow Agent"), in St. Paul,
Minnesota, which is a suitable financial institution within or without the State whose
deposits are insured by the Federal Deposit Insurance Corporation and whose combined
capital and surplus is not less than $500,000. All proceeds of the sale 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 Bonds not used to pay costs of issuance 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, (i) to pay when due the interest to accrue on the
Bonds to and including December 1, 2004; (ii) to pay when called for redemption on
December 1, 2004, the principal amount of the Refunded 1997 Bonds and the Refunded
1998 Bonds; and (iii) to pay when called for redemption on December 1, 2005, the
principal amount of the Refunded 1999 Bonds. The Escrow Account shall be irrevocably
appropriated to the payment of (i) all interest on the Bonds to and including December 1,
2004; (ii) the principal of the Refunded 1997 Bonds and the Refunded 1998 Bonds due
by reason of their call for redemption on December 1, 2004; and (iii) the principal of the
Refunded 1999 Bonds due by reason of their call for redemption on December 1, 2005 .
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 an agreement (the "Escrow Agreement") by and
between the City and Escrow Agent, a form of which agreement is on file in the office of
the Finance Director and Treasurer. Any moneys remitted to the City upon termination
of the Escrow Agreement shall be deposited in the Debt Service Account.
(b) Debt Service Account. To the Debt Service Account there is hereby
pledged and irrevocably appropriated and there shall be credited: (i) after the crossover
dates, all uncollected special assessments pledged to the payment of the Prior Bonds; (ii)
any collections of all taxes herein or hereafter levied for the payment of the Bonds; (iii)
any collections of all taxes heretofore levied for the payment of the Prior Bonds and
interest thereon which are not needed to pay the Prior Bonds as a result of the Refunding;
(iv) any balance remitted to the City upon the termination of the Escrow Agreement; (v)
any balances remaining after December 1, 2004, in the General Obligation Improvement
Bonds of 1997 and General Obligation Improvement Bonds of 1998 Funds created by the
Prior 1997 Resolution and the Prior 1998 Resolution; (vi) any balances remaining after
December 1, 2005, in the General Obligation Improvement Bonds of 1999 Fund created
by the Prior 1999 Resolution; (vii) all investment earnings on funds in the Debt Service
Account; and (vii) any and all other moneys which are properly available and are
appropriated by the governing body of the City to the Debt Service Account. The amount
of any surplus remaining in the Debt Service Account when the Bonds and interest
thereon are paid shall be used consistent with Minnesota Statutes, Section 475.61,
Subdivision 4.
The moneys in the Debt Service Account shall be used solely to pay the principal
of and interest on the Bonds or any other bonds hereafter issued and made payable from
the Fund. 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 (i) for a reasonable temporary
period until such proceeds are needed for the purpose for which the Bonds were issued,
and (ii) 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
any sums from time to time held in the Fund (or any other City account which will be
used to pay principal and interest to become due on the Bonds) in excess of amounts
which under the applicable federal arbitrage regulations may be invested without regard
as to yield shall not be invested in excess of the applicable yield restrictions imposed by
the arbitrage regulations on such investments after taking into account any applicable
"temporary periods" or "minor portion" made available under the federal arbitrage
regulations. In addition, the proceeds of the Bonds and money in the Fund shall not be
invested in obligations or deposits issued by, guaranteed by or insured by the United
States or any agency or instrumentality thereof if and to the extent that such investment
would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b)
of the federal Internal Revenue Code of 1986, as amended (the "Code").
16. 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.
17. Special Assessments. The City has heretofore levied special assessments
pursuant to the Prior Resolutions, which assessments were pledged to the payment of the
principal and interest on the Prior Bonds and, after the crossover dates of December 1,
2004 for the Refunded 1997 Bonds and Refunded 1998 Bonds and the crossover date of
December 1,2005, for the Refunded 1999 Bonds, all uncollected special assessments are
now pledged to the payment of principal and interest on the Bonds. The special
assessments are such that if collected in full they, together with estimated collections of
taxes herein pledged for the payment of the Bonds, will produce at least five percent in
excess of the amount needed to meet when due the principal and interest payments on the
Bonds. The special assessments were levied as provided below, payable in equal,
consecutive, annual installments, with general taxes for the years shown below and with
interest on the declining balance of all such assessments at the rate shown opposite such
years:
Improvement Designations Amounts Rate Collection Years
Pike Lake Trail, Mush Town $465,000 8.00% 1998-2007
Road and CSAH #42
1998 Improvement Projects $594,000 8.00% 1999-2008
1999 Street Improvements (Projects
99-11, 99-12 and 99-13) $383,000 8.00% 2000-2009
18. Tax Levy; Coverage Test; Cancellation of Certain Tax Levies. To provide
moneys for payment of the principal and interest on 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
See Attachment A
The tax levies are such that if collected in full they, together with estimated
collections of special assessments and any other revenues herein pledged for the payment
of the Bonds and sums held in the Escrow Account, will produce at least five percent in
excess of the amount needed to meet when due the principal and interest payments on the
Bonds. The tax levies shall be irrepealable so long as any 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 Prior Bonds, the uncollected taxes levied in the Prior
Resolutions authorizing the issuance of the Prior Bonds which are not needed to pay the
Prior Bonds as a result of the Refunding shall be canceled.
19. Defeasance. When all Bonds have been discharged as provided in this
paragraph, all pledges, covenants and other rights granted by this resolution to the
registered holders of the Bonds shall, to the extent permitted by law, cease. The City
may discharge its obligations with respect to any Bonds which are due on any date by
irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for
the payment thereof in full; or if any Bond should not be paid when due, it may
nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the
payment thereof in full with interest accrued to the date of such deposit. The City may
also at any time discharge its obligations with respect to any Bonds, subject to the
provisions of law now or hereafter authorizing and regulating such action, by depositing
irrevocably in escrow, with a suitable banking institution qualified by law as an escrow
agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67,
Subdivision 8, bearing interest payable at such times and at such rates and maturing on
such dates as shall be required, without regard to sale and/or reinvestment, to pay all
amounts to become due thereon to maturity or, if notice of redemption as herein required
has been duly provided for, to such earlier redemption date.
20. General Obligation Pledge. For the prompt and full payment of the
principal of 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
balance in the Escrow Account or Debt Service Account is ever insufficient to pay all
principal and interest then due on the Bonds payable therefrom, the deficiency shall be
promptly paid out of any other accounts of the City which are available for such purpose,
and such other funds may be reimbursed without interest from the Escrow Account or
Debt Service Account when a sufficient balance is available therein.
21. Securities; Escrow Agent. Securities purchased from moneys in the
Escrow 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 Bonds. 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.
22. Redemption of Refunded Bonds. The Refunded Bonds shall be redeemed
and prepaid in accordance with the terms and conditions set forth in the Notices of Call
for Redemption, substantially in the forms attached to the Escrow Agreement, which
terms and conditions are hereby approved and incorporated herein by reference. The
Notices of Call for Redemption shall be given pursuant to the Escrow Agreement.
23. Escrow Agreement. On or prior to the delivery of the Bonds the Mayor
and Manager shall, and are hereby authorized and directed to, execute on behalf of the
City an Escrow Agreement. The Escrow Agreement is hereby approved and adopted and
made a part of this resolution, and the City covenants that it will promptly enforce all
provisions thereof in the event of default thereunder by the Escrow Agent.
24. Purchase of SLGS or Open Market Securities. The Purchaser, as agent for
the Council, is hereby authorized and directed to purchase on behalf of the Council and in
its name the appropriate United States Treasury Securities, State and Local Government
Series and/or open market securities as provided in paragraph 22, from the proceeds of
the Bonds and, 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.
25. 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 the 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.
26. 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 re furnished, shall be deemed
representations of the City as to the facts recited therein.
27. Negative Covenant as to Use of Proceeds and Proiects. 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.
28. 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 (i) requirements relating to temporary periods for investments; (ii)
limitations on amounts invested at a yield greater than the yield on the Bonds; and (iii)
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 (i) the Bonds are issued by a governmental unit with
general taxing powers; (ii) no Bond is a private activity bond; (iii) ninety-five percent or
more of the net proceeds of the Bonds are to be used for local governmental activities of
the City (or of a governmental unit the jurisdiction of which is entirely within the
jurisdiction of the City); and (iv) 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 is not reasonably expected to exceed $5,000,000, all within the meaning
of Section 148(f)(4)(D) of the Code.
Furthermore:
(a) each of the Prior Bonds was issued as part of an issue which was treated as
meeting the rebate requirements by reason of the exception for governmental units
issuing $5,000,000 or less of bonds;
(b) the average maturity of the Bonds does not exceed the remaining average
maturity of the Prior Bonds; and
(c) no maturity of the Bonds has a maturity date which is later than the date
which is thirty years after the dates the Prior Bonds were issued.
29. 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 "qualified tax-exempt
obligations" for purposes of Section 265(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 2004 will not exceed $10,000,000;
(e) not more than $10,000,000 of obligations issued by the City during this
calendar year 2004 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 federal procedural requirements
which may apply in order to effectuate the designation made by this paragraph.
30. Supplemental Resolution. The Prior Resolutions are hereby supplemented
to the extent necessary to give effect to the provisions of this resolution.
31. 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 "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 Issuer described in the Undertaking.
(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 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 (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 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.
32. Severability. If any section, paragraph or provision of this resolution shall
be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of
such section, paragraph or provision shall not affect any of the remaining provisions of
this resolution.
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 LeMair and, after a full discussion thereof and upon a vote being taken thereon,
the following voted in favor thereof: Mayor Haugen and Councilmembers: Blomberg,
LeMair and Petersen.
and the following voted against the same: None
whereupon the resolution was declared duly passed and adopted.
STATE OF MINNESOTA
COUNTY OF SCOTT
CITY OF PRIOR LAKE
I, the undersigned, being the duly qualified and acting Manager of the City of
Prior Lake, Minnesota, DO HEREBY CERTIFY that I have compared the attached and
foregoing extract of minutes with the original thereof on file in my office, and that the
same is a full, true and complete transcript of the minutes of a meeting of the City
Council, duly called and held on the date therein indicated, insofar as such minutes relate
to providing for the issuance and sale of$1,385,000 General Obligation Improvement
Crossover Refunding Bonds of 2004.
WITNESS my hand on March 25th, 2004.
rurH-
M~ager