HomeMy WebLinkAbout18-095 Series 2018A Bond Issuance Set SaleEXTRACT OF MINUTES OF A MEETING
OF THE CITY COUNCIL
CITY OF PRIOR LAKE, MINNESOTA
HELD: June 18,2018
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 held at the City Hall on June 18,
2018, at7:00 P.M. for the purpose in part of authorizing the competitive negotiated sale of the
$8,745,000 General Obligation Bonds, Series 2018A.
The following members were present: Briggs, McGuire, Thompson, Burkart and Braid
and the following were absent: NA
Member McGuire introduced the following resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF
GENERAL OBLIGATION BONDS, SERIES 20184
IN AN AMOUNT NOT TO EXCEED $9,OOO,OOO
A. WHEREAS, the City Council of the City of Prior Lake, Mirmesota (the "City"),
has heretofore determined that it is necessary and expedient to issue General Obligation Bonds,
Series 2018A (the "Bonds"), pursuant to Minnesota Statutes, Chapters 429, 444 and 475 and
Sections 412301 and 475.521, in an amount not to exceed $9,000,000, to finance the purchase of
equipment, a capital improvement plan project, an improvement project, a permanent
improvement revolving fund, a water project, a sewer project and a street reconstruction project
in the City; and
B. WHEREAS, the City has retained Northland Securities, Inc., in Minneapolis,
Minnesota ("Northland"), as its independent financial advisor and is therefore authorized to sell
the Bonds by competitive negotiated sale in accordance with Miruresota Statutes, Section 475.60,
Subdivision 2(9); and
C. WHEREAS, the City has retained Briggs and Morgan, Professional Association,
in Minneapolis, Minnesota as its bond counsel for purposes of this financing.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Prior Lake,
Minnesota, as follows:
1. Authorization. The City Council hereby authorizes Northland to solicit proposals
for the competitive negotiated sale of the Bonds.
2. Meeting: Proposal Opening. The City Council shall meet at the time and place
specified in the Notice of Sale attached hereto as Exhibit A for the purpose of considering sealed
proposals for and awarding the sale of the Bonds. The City Finance Director, or designee, shall
open proposals at the time and place specified in the Notice of Sale.
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3. Notice of Sale. The terms and conditions of the Bonds and the negotiation thereof
are fully set forth in the Notice of Sale attached hereto as Exhibit A and hereby approved and
made a part hereof.
4. Official Statement. In connection with the competitive negotiated sale of the
Bonds, the City Finance Director and other officers or employees of the City are hereby
authorized to cooperate with Northland and participate in the preparation of an official statement
for the Bonds, and to execute and deliver it on behalf of the City upon its completion.
The motion for the adoption of the foregoing resolution was duly seconded by member
Thompson and, after fuIl discussion thereof and upon a vote being taken thereon, the following
voted in favor thereof: Briggs, McGuire, Thompson, Burkart and Braid
and the following voted against the same: NA
Whereupon the resolution was declared duly passed and adopted.
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STATE OF MINNESOTA
COLINTY OF SCOTT
CITY OF PRIOR LAKE
I, the undersigned, being the duly qualified and acting City 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 the City's General Obligation Bonds,
Series 2018A.
WITNESS mv hand on June 18. 2018
t
City
aJ
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EXHIBIT A
NOTICE OF SALE
$8,745,000*
GENERAL OBLIGATION BONDS, SERIES 2018A
CITY OF PRIOR LAKE, MINNESOTA
(Book-Entry Only)
NOTICE IS HEREBY GIVEN that these Bonds will be offered for sale according to the following terms:
TIME AND PLACE:
Proposals (also referred to herein as "bids") will be opened by the Finance Director, or designee, on Monday,
July 16,2018 at 10:30 A.M., CT, at the offices of Northland Securities, Inc. (the City's "Municipal Advisor"),
150 South 5th Street, Suite 3300, Minneapolis, Minnesota 55402. Consideration of the Proposals for award of
the sale will be by the City Council at its meeting at the City Offices beginning Monday, July 16, 2018, at7:00
P.M., CT.
SUBMISSION OF PROPOSALS
Proposals may be:
a) submitted to the office of Northland Securities, Inc.,
b) faxed to Northland Securities, Inc. at 6 12-85 1 -59 1 8,
c) for proposals submitted prior to the sale, the final price and coupon rates may be submitted to Northland
Securities, Inc. by telephone at 612-851-5900 or 612-851-4945, or
d) submitted electronically.
Notice is hereby given that electronic proposals will be received via PARITY'", or its successor, in the manner
described below, until 10:30 A.M., CT, on Monday, July 16, 2018. Proposals may be submitted electronically
via PARITY'" or its successor, pursuant to this Notice until 10:30 A.M., CT, but no Proposal will be received
after the time for receiving Proposals specified above. To the extent any instructions or directions set forth in
PARITY'", or its successor, conflict with this Notice, the terms of this Notice shall control. For further
information about PARITY'", or its successor, potential bidders may contact Northland Securities, Inc. or i-
Deal@ at 13 59 Broadw dy, 2'd floor, New York, NY 1 00 I 8, telephone 212-849-5021 .
Neither the City nor Northland Securities, Inc. assumes any liability if there is a malfunction of PARITY'" or its
successor. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder
and the City to purchase the Bonds regardless of the manner in which the Proposal is submitted.
BOOK-ENTRY SYSTEM
The Bonds will be issued by means of a book-entry system with no physical distribution of bond certificates
made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the
aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as
nominee of Depository Trust Company ("DTC"), New York, New York, which will act as securities depository
ofthe Bonds.
* Th. City reserves the right to increase or decrease the principal amount ofthe Bonds. Any such increase or decrease will be
made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted
to maintain the same gross spread.
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Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a
single maturity through book entries made on the books and records of DTC and its participants. Principal and
interest are payable by the City through Northland Trust Services, Inc. Minneapolis, Minnesota (the "Paying
Agent/Registrar"), to DTC, or its nominee as registered owner of the Bonds. Transfer of principal and interest
payments to participants of DTC will be the responsibility of DTC;transfer of principal and interest payments
to beneficial owners by participants will be the responsibility of such participants and other nominees of
beneficial owners. The successful bidder, as a condition of delivery of the Bonds, will be required to deposit the
bond certificates with DTC. The City will pay reasonable and customary charges for the services of the Paying
Agent/Registrar.
DATE OF ORIGINAL ISSUE OF BONDS
Date of Delivery (Estimated to be August 15, 2018)
AUTHORITY/PURPOSE/SECURITY
The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429,444 and 475 and Sections 412.301
and 415.521. Proceeds will be used to finance the purchase of equipment, a capital improvement plan project,
an improvement project, a permanent improvement revolving fund, a water project, a sewer project, a street
reconstruction project and to finance the costs associated with the issuance of the Bonds. The Bonds are payable
from special assessments against benefited properry, water revenues, sewer revenues and additionally secured
by ad valorem taxes on all taxable properly within the City. The full faith and credit of the City is pledged to
their payment and the City has validly obligated itself to levy ad valorem taxes in the event of any deficiency in
the debt service account established for this issue.
INTEREST PAYMENTS
Interest is due semiannually on each June 15 and December 15, commencing June 15, 2019,to registered owners
of the Bonds appearing of record in the Bond Register as of the close of business on the first day (whether or not
a business day) of the calendar month of such interest payment date.
MATURITIES
Principal is due annually on December 15, inclusive, in each of the years and amounts as follows:
Year
2019
2020
2021
2022
Amount
$760,000
860,000
885,000
915,000
Year
2023
2024
2025
Amount
$925,000
855,000
875,000
Year
2026
2027
2028
Amount
$890,000
920,000
860,000
Proposals for the Bonds may contain a maturity schedule providing for any combination of serial bonds and term
bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory
redemption in each year conforms to the maturify schedule set forth above.
INTEREST RATES
All rates must be in integral multiples of ll2}th or l/Sth of lo/o. Rates must be in level or ascending order. AII
Bonds of the same maturity must bear a single uniform rate from date of issue to maturity.
ESTABLISHMENT OF ISSUE PRICE
(HOLD-THE-OFFERING-PRICE RULE MAY APPLY - BIDS NOT CANCELLABLE)
The winning bidder shall assist the City in establishing the issue price of the Bonds and shall execute and deliver
to the City at closing an "issue price" or similar certificate setting forth the reasonably expected initial offering
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price to the public or the sales price or prices of the Bonds, together with the supporting pricing wires or
equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as
may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City and Bond Counsel.
A11 actions to be taken by the City under this Notice of Sale to establish the issue price of the Bonds may be
taken on behalf of the City by the City's Municipal Advisor and any notice or report to be provided to the City
may be provided to the City's Municipal Advisor.
The City intends thatthe provisions of Treasury Regulation Section 1.148-l(0(3)(i) (defining "competitive sale"
for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the
"competitive sale requirements") because:
( I ) the City shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably
designed to reach potential underwriters;
(2) all bidders shall have an equal opportunity to bid;
(3) the City may receive bids from at least three underwriters of municipal bonds who have established
industry reputations for underwriting new issuances of municipal bonds; and
(a) the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase
the Bonds at the highest price (or lowest cost), as set forth in this Notice of Sale.
Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the
Bonds, as specified in the bid.
In the event that the competitive sale requirements are not satisfied, the City shall promptly so advise the winning
bidder. The City may then determine to treat the initial offering price to the public as of the award date of the
Bonds as the issue price of each maturity by imposing on the winning bidder the Hold-the-Offering-Price Rule
as described in the following paragraph (the "Hold-the-Offering-Price Rule"). Bids will not be subject to
cancellation in the event that the City determines to apply the Holdthe-Offering-Price Rule to the Bonds.
Bidders should prepare their bids on the assumption that the Bonds will be subject to the Hold-the-
Offering-Price Rule in order to establish the issue price of the Bonds.
By submitting a bid, the winning bidder shall (i) confirm that the underwriters have offered or will offer the
Bonds to the public on or before the date of award at the offering price or prices (the "Initial Offering Price"),
or at the coresponding yield or yields, set forth in the bid submitted by the winning bidder and (ii) agree, on
behalf of the underwriters participating in the purchase of the Bonds, that the underwriters will neither offer nor
sell unsold Bonds of any maturity to which the Hold-the-Offering Price Rule shall apply to any person at a price
that is higher than the Initial Offering Price to the public during the period sta(ing on the award date for the
Bonds and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the award date; or
(2) the date on which the underwriters have sold at least l0%o of a maturity of the Bonds to the public at a
price that is no higher than the Initial Offering Price to the public (the "10o/o Test"), at which time only
that particular maturity will no longer be subject to the Holdthe-Offering-Price Rule.
The City acknowledges that, in making the representation set forth above, the winning bidder will rely on (i) the
agreement of each underwriter to comply with the Hold-the-Offering-Price Rule, as set forth in an agreement
among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection
with the initial sale ofthe Bonds to the public, the agreement of each dealer who is a member of the selling group
to comply with the Holdthe-Offering-Price Rule, as set forth in a selling group agreement and the related pricing
wires, and (iii) in the event that an underwriter is a parly to a retail distribution agreement that was employed in
connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a parfy to
such agreement to comply with the Hold-the-Offering-Price Rule, as set forth in the retail distribution agreement
and the related pricing wires. The City further acknowledges that each underwriter shall be solely liable for its
failure to comply with its agreement regarding the Holdthe-Offering-Price Rule and that no underwriter shall
be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any
broker-dealer that is a party to a retail distribution agreement to comply with its corresponding agreement
regarding the Holdthe-Offering-Price Rule as applicable to the Bonds.
By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group
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agreement and each retail distribution agreement (to which the bidder is a parfy) relating to the initial sale of the
Bonds to the public, together with the related pricing wires, contains or will contain language obligating each
underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such
retail distribution agreement, as applicable, to comply with the Hold-the-Offering-Price Rule, if applicable, in
each case if and for so long as directed by the winning bidder and as set forth in the related pricing wires, and
(ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the
related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail
distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require
each broker-dealer that is a party to such retail distribution agreement to comply with the Hold-the-Offering-
Price Rule, if applicable, in each case if and for so long as directed by the winning bidder or such underwriter
and as set forth in the related pricing wires.
Notes: Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to
the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale:
(l) "public" means any person other than an underwriter or a related party,
@ "underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with
the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to
the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a
person described in clause (A) to participate in the initial sale of the Bonds to the public (including a
member of a selling group or a party to a retail distribution agreement participating in the initial sale
of the Bonds to the public).
(j) a purchaser of any of the Bonds is a "related pqrty" to an underwriter if the underwriter and the
purchaser are subject, directly or indirectly, to (i) at least 50o% common ownership of the voting power
or the total value of their stock, if both entities are corporcttions (including direct ownership by one
corporation or another), (ii) more than 500% common ownership of their capital interests or profits
interests, if both entities are partnerships (including direct ownership by one partnership of another),
or (iii) more than 5004 common ownership of the value of the outstanding stock of the corporation or
the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation
and the other entity is a partnership (including direct ownership of the applicable stock or interests by
one entity of the other), and
(4) "sale date" means the date that the Bonds are awarded by the City to the winning bidder.
ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER PROPOSALS
The City reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or
decrease willbe made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the
purchase price will also be adjusted to maintain the same gross spread. Such adjustments shall be made promptly
after the sale and prior to the award of Proposals by the City and shall be at the sole discretion of the City. The
successful bidder may not withdraw or modify its Proposal once submitted to the City for any reason, including
post-sale adjustment. Any adjustment shall be conclusive and shall be binding upon the successful bidder.
OPTIONAL REDEMPTION
Bonds maturing on December 15,2027 through 2028 are subject to redemption and prepayment at the option of
the City on December 15,2026 and any date thereafter, at a price of par plus accrued interest. Redemption may
be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and principal
amounts within each maturity to be redeemed shall be determined by the City and if only part of the Bonds
having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by
lot by the Bond Registrar.
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CUSIP NUMBERS
If the Bonds qualifu for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither
the failure to print such numbers on any Bond nor any error with respect thereto shall constitute cause for a
failure or refusal by the successful bidder thereofto accept delivery ofand pay for the Bonds in accordance with
terms of the purchase contract. The CUSIP Service Bureau charge for the assignment of CUSIP identification
numbers shall be paid by the successful bidder.
DELTVERY
Delivery of the Bonds will be within forly days after award, subject to an approving legal opinion by Briggs and
Morgan, Professional Association, Bond Counsel. The legal opinion will be paid by the City and delivery will
be anywhere in the continental United States without cost to the successful bidder at DTC.
TYPE OF PROPOSAL
Proposals of not less than $8,675,040(99.20%) and accrued interest on the principal sum of $8,745,000 must be
filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to legality.
Proposals for the Bonds should be delivered to Northland Securities, Inc. and addressed to:
Cathy Erickson, Finance Director
Prior Lake City Hall
4646 Dakota Avenue Street SE
Prior Lake, Minnesota 55372
A good faith deposit (the "Deposit") in the amount of $174,900 in the form of a federal wire transfer (payable
to the order of the City) is only required from the apparent winning bidder, and must be received within two
hours after the time stated for the receipt of Proposals. The apparent winning bidder will receive notification of
the wire instructions from the Municipal Advisor promptly after the sale. If the Deposit is not received from the
apparent winning bidder in the time allotted, the City may choose to reject their Proposal and then proceed to
offer the Bonds to the next lowest bidder based on the terms of their original proposal, so long as said bidder
wires funds for the Deposit amount within two hours of said offer.
The City will retain the Deposit of the successful bidder, the amount of which will be deducted at settlement and
no interest will accrue to the successful bidder. In the event the successful bidder fails to comply with the
accepted Proposal, said amount willbe retained by the City. No Proposal can be withdrawn after the time set for
receiving Proposals unless the meeting of the City scheduled for award of the Bonds is adjoumed, recessed, or
continued to another date without award of the Bonds having been made.
AWARI)
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC)
basis. The City's computation of the interest rate of each Proposal, in accordance with customary practice, will
be controlling. In the event of a tie, the sale of the Bonds will be awarded by lot. The City will reserve the right
to: (i) waive non-substantive informalities of any Proposal or of matters relating to the receipt of Proposals and
award of the Bonds, (ii) reject all Proposals without cause, and (iii) reject any Proposal which the City determines
to have failed to comply with the terms herein.
INFORMATION FROM SUCCESSFUL BIDDER
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The successful bidder will be required to provide, in a timely manner, certain information relating to the initial
offering price of the Bonds necessary to compute the yield on the Bonds pursuant to the provisions of the Internal
Revenue Code of 1986, as amended.
OFFICIAL STATEMENT
By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the City
agrees that, no more than seven business days after the date of such award, it shall provide to the senior managing
underwriter ofthe syndicate to which the Bonds are awarded, the Final Official Statement in an electronic format
as prescribed by the Municipal Securities Rulemaking Board (MSRB).
FULL CONTINUING DISCLOSURE UNDERTAKING
The City will covenant in the resolution awarding the sale of the Bonds and in a Continuing Disclosure
Undertaking to provide, or cause to be provided, annual financial information, including audited financial
statements of the City, and notices of certain material events, as required by SEC Rule 15c2-12.
BANK QUALIFICATION
The City will designate the Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the
Internal Revenue Code of 1986, as amended.
BOND INSURANCE AT UNDERWRITER'S OPTION
If the Bonds qualifu for issuance of any policy of municipal bond insurance or commitment therefor at the option
of the successful bidder, the purchase of any such insurance policy or the issuance of any such commitment shall
be at the sole option and expense ofthe successful bidder ofthe Bonds. Any increase in the costs ofissuance of
the Bonds resulting from such purchase of insurance shall be paid by the successful bidder, except that, if the
Cify has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee.
Any other rating agency fees shall be the responsibility of the successful bidder. Failure of the municipal bond
insurer to issue the policy after the Bonds have been awarded to the successful bidder shall not constitute cause
for failure or refusal by the successful bidder to accept delivery on the Bonds.
The City reserves the right to reject any and all Proposals, to waive informalities and to adjourn the sale.
Dated: June 18, 2018 BY ORDER OF THE PRIOR LAKE CITY COUNCIL
lsl Cathy Erickson
Finance Director
Additional information may be obtained from
Northland Securities, Inc.
150 South 5th Street, Suite 3300
Minneapolis, Minnesota 55402
Telephone No.: 612-85 I -5900
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EXHIBIT A
(ISSUE PRICE CERTIFICATE - COMPETITIVE SALE SATISFIED)
The undersigned, on behalfof (the "Underwriter"), hereby certifies as
set forth below with respect to the sale of the General Obligation Bonds, Series 2018A (the "Bonds") of the City of
Prior Lake, Minnesota (the "Issuer").
1. Reasonably Expected Initial Offering Price.
(a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by
the Underwriter are the prices listed in Schedule A (the "Expected Offering Prices"). The Expected Offering Prices
are the prices for the Maturities of the Bonds used by the Underwriter in formulating its bid to purchase the Bonds.
Attached as Schedule B is a true and correct copy ofthe bid provided by the Underwriter to purchase the Bonds.
(b) The Underwriter was not given the opportunity to review other bids prior to submitting its bid.
(c) The bid submitted by the Underwriter constituted a firm offer to purchase the Bonds.
2. Defined Terms.
(a) "Maturiqr" means Bonds with the same credit and payment terms. Bonds with different maturity
dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(b) "Public" means any person (including an individual, trust, estate, partnership, association,
company, or corporation) other than an Underwriter or a related parly to an Underwriter. The term "related party"
for purposes of this certificate generally means any two or more persons who have greater than 50 percent common
ownership, directly or indirectly.
(c) "Sale Date" means the first day on which there is a binding contract in writing for the sale of a
Maturity of the Bonds. The Sale Date of the Bonds is
(d) "Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or
with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the
Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in
clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a
selling group or aparty to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate
represents the Underwriter's interpretation of any laws, including specifically Sections 103 and 148 of the Internal
Revenue Code of 1 986, as amended, and the Treasury Regulations thereunder. The undersigned understands that
the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in
the Nonarbitrage Certificate and with respect to compliance with the federal income tax rules affecting the Bonds,
and by Briggs and Morgan, Professional Association, Bond Counsel in connection with rendering its opinion that
the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the
Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer fiom time
to time relating to the Bonds.
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Dated:
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QSSUE PRICE CERTIFICATE - HOLD THE PNCE)
The undersigned, on behalf of _ (the "Underwriter"), on behalf of
itself; hereby certifies as set forth below with respect to the sale and issuance of General Obligation
Bonds, Series (the "Bonds") of the City of
Minnesota (the "Issuer").
1. Initial Offering Price of the Bonds.
(a) The Underwriter offered each Maturity of the Bonds to the Public for purchase at the respective
initial offering prices listed in Schedule A (the "lnitial Offering Prices") on or before the Sale Date. A copy of the
pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Notice of Sale, the Underwriter has agreed in writing that, (i) for each Maturity
of the Bonds, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher
than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold-the-offering-
price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the
selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party
to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no
Underwriter (as defined below) has offered or sold any Maturity of the Bonds at a price that is higher than the
respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.
2. Defined Terms.
(a) "Holding Period" means, for each Maturity of the Bonds, the period starting on the Sale Date and
ending on the earlier of (i) the close of the fifth business day after the Sale Date or (ii) the date
on which the Underwriter has sold at least 10% of such Maturity of the Bonds to the Public at prices that are no higher
than the Initial Offering Price for such Maturity.
(b) "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity
dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(c) "Public" means any person (including an individual, trust, estate, partnership, association, company,
or corporation) other than an Underwriter or a related parfy to an Underwriter. The term "related party" for purposes
of this certificate generally means any two or more persons who have greater than 50 percent common ownership,
directly or indirectly.
(d) "Sale Date" means the first day on which there is a binding conlract in writing for the sale of a
Maturity of the Bonds. The Sale Date of the Bonds is 201 8
(e) "Undenvriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or
with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public,
and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i)
of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or
aparty to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certific ate are limited to factual matters only. Nothing in this certificate
represents the Representative's interpretation of any laws, including specifically Sections 103 and 148 of the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the
foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the
Nonarbitrage Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by
Briggs and Morgan, Professional Association, Bond Counsel, in connection with rendering its opinion that the interest
on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue
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Service Form 8038-G, and other federal income tax advice that it may give to the Issuer fiom time to time relating to
the Bonds.
Dated 2018
1083491 5vl
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MI,JMCIPAL ADVISORY SERVICE AGREEMENT
BYANDBE"TWEEN
THE CITY OFPRIORLAKE, MINNESOTA
AND
NORTHLAND SECI,.rTUTIES, INC.
This Agreement made and entered into by and betrveen tlle Gty of ltior Iake Mirmesota
ftereinafter "City") and Norttrland Securities, lnc., of Minneapolis, Minnesota (hereinafter "NSI").
WIINESSETH
WHEREAS, Ere City desires to have NSI provide it witr advice on the structure, terrns, timing ard
other sntters related to the issuance of the General Obligation Bonds, Series 2018A (the "Deb()
serving in the role of municipal (financial) advisor, and
WHEREAS, NSI is a registered municipal advisor with bo*r Ere Securities and Exchange
C-ommission ("SEC') and the Murricipal Securities RuJerraking Board ('MSRB") (registsation # 866
0ffi82{0), and
WHEREAS, NSI will act as municipal advisor in accordance with Ere duties and responsibilities of
Rule G42 of t}re lvlSRB and
WIIEREAS. the N{SRB provides a municipal advisory dimt brochure on its websiE (www.msrb.org)
that describes fte proEctions trat may be provided by Erc N4SRB rules, irdudhg professional
compeErcy, fair dealing, duty of loyalty, remedie for disputes and how to file a complaint with an
appropriate reguJabry authority, and
WHEREAS, dre Gty and NSI are entering into ttris Agreement to define Ere municipal advisory
relationship at the earliest opportunity related to the irrception of the municipal advisory relatiorship
for the Debt and
WHEREAS, NSI desires to furnistr services tro the Gty as hereinafter descritred,
NOW, THEREFORE, it is ageed by and between tre parties as follows:
SERVICES TO BE PR,OVIDED BY NSI
NSI shall provide &re Gty wi*r services necessary to analyze, structue, offer for sale and dose the
Debt The services will be tailored to meet the needs of this engagement and may include:
Plarming and Devdopnurt
1. Assist City officials to define the scope and the otjectives for tre Debt
2 lnvgsrigate and consider r€asonably feasible financing altematives.
3, Assist ttre City in understanding the material risks, potential bene6E, structue and other
draracreristics of tre recommended plan for the Debt induding issue stsucture, estiruted debt
Municipal Advisory Service Agreement
service payments, projected revenues, method of issuance, bond rating, sale tirning, and call
provisions.
4. Prepare a schedule of evenb related to the issuance process.
5. Coordinate with bond counsel any actions needed to authorize the issuance of the Debt.
6. Attend meetings of the City Council and other project and bond issue related meetings as needed
and as requested.
Bond SaIe
1,. Assist the City with the preparatiory review and approval of the preliminary official statement
(Pos).
2. Assist the City and bond counsel with preparing and publishing the Official Notice of SaIe if
required by Iaw.
3. Prepare and submit application for bond rating(s) and assist the City with fumishing the rating
agenry(s) with any additional information required to conduct the rating review. Assist the City
with preparing and conducting the rating call or other presentation.
4. Assist the City in receiving the bids, compute the accurary of the bids received, and recommend
to the City the most favorable bid for award.
5. Coordinate with bond counsel the preparation of required contracb and resolutions.
Post Sale Support
L. Assist the City with the preparation of final official statement distribution to the underwriter and
posting on EMMA.
2. Coordinate the bond issue closing, including making all arrangements for bond printing,
registration, and delivery.
3. Furnish to the City a complete transcript of the transaction, if not provided by bond counsel.
There are no specific limitations on the scope of this agreement
COMPENSATION
For providing these services with respect to the Debt, NSI shall be paid a lump sum of $3O010. The
fee due to NSI shall be payable by the City upon the closing of the Bonds.
NSI agrees to pay the following expenses from its fee:
. Out-of-pocket expenses such as travel, long distance phone, and copy costs.
. Production and distribution of material to rating agencies and/or bond insurance companies.
. Preparation of the bond transcript.
The City agrees to pay for all other expenses related to the processing of the bond issue(s) including,
butnotlimited to, the following:
o Engineeingand/ or architectural fees.
. Publication of legal notices.
. Bond counsel and local attomey fees.
o Fees for various debt certificates.
. The cost of printing Official Statements, if *y.
. City staff expenses.
o Airfare and lodging expenses of one NSI official and City officials when and if traveling for
rating agency presentations.
. Rating agency fees, if any.
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Municipal Advisory Service Agreement
o Bond insurance fees, if any.o Accounting and other related fees.
It is erpressly rmderstood that there is no obligation on the part of the Gty rmder the terrrs of tris
Ageement to issrue the Debt If the Debt js not issue4 NSI agrees to pay its own expenses and
receive no fee for any services it has rcndered.
NSI is not aware of any material conflicb of interest that could reasonably be anticipated to impair
NSI's ability to provide advice to or on behalf of the Gty in accordance with the standards of conduct
for mrmicipal advisors.
The compersation for services provided in dris Agreement is customary in tre municipal securities
marke! but may pose a conflict of interest Since the fee is payable at closing and only if the Debt is
issud, NSI may have an incentive to €ncourage issuance. Compersation linked to tre size of the
tsansaction may provide inctntive tro increase dre amount of the Debt. Comperuation consideratiors
will not impair NSI s ability to provide unbiased and competent advice or to fr:lfill ib fiduciary duty
to the City. In executing this Agreement, tre Cig ad<nowledges and accepts the potsntial conflicb of
inErest posed by the compersation to NSI.
Norftland Capital Holdings is the parent company of NSI. Another subsidiary of Norttrland Capital
Holdings is Northland Trus! Inc. Northland Trust provides paylng agent services to issuers of
municipal bonds. The City is solely responsible for the decision on the source of paying agent
servic€s. Any engagement of Northland Trust is outside tre scope of ftis Ag€ement No
compersation paid to Norlfiland Trust is shard with NSI.
NSI does not provide executive search, organizational developmen! compensation systems or other
manageurent consulting services that may directly or indirectly affect Gty staff that recommend the
engag€mart of mruricipal advisor servicrs and may pose a conflict of interest.
LEGAL AND DISOPI,INARY ACTIONS
There are no legal or dixiptinary events reporH by the Securities and Exdrange Commission
contained in Form MA or Form MA-[ The Gty can find information about these forms and acc€ssing
infomr,ation relaEd b NSI at www.sec.gov/municipaf orrs+dgar-Iiriks.
SUCCESSORSORASSIGNS
The Ems and provisiors of ttris Agreerrent are binding upon and inure to the benefit of ttle Gty
and NSI and treir successors or assigrs,
CONFLICTSOFINTEREST
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This
shall
Municipal Advisory Service Agreement
TERM OFTI{IS AGREEMENT
Agreementmay be terminated by thirty (30) days writtennotice by either the City or NSI and it
terminate sixty (60) days following the dosing date related to the issuance of the Debt.
Dated this 24 day of May, 2018.
Securities, Inc.
Byt
Tom Bartzen - Executive Vice
City of Prior Lake, Minnesota
<fByt
Its:
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Northland
(