HomeMy WebLinkAbout09(A) - Approval of a Resolution Authorizing the Sale of General Obligation Bonds, Series 2022A ReportITEM: 9ACITYCOUNCILAGENDAREPORT
MEETING DATE: May16, 2022
PREPARED BY: CathyErickson, Finance Director
PRESENTED BY: CathyErickson
AGENDA ITEM: Consider Approval ofaResolution Authorizing theCompetitive
Negotiated SaleofGeneral Obligation Bonds, Series2022A
GOAL AREA High-ValueCityServices
OBJECTIVE: 2. Design acomprehensive funding strategy forcapitalneeds.
RECOMMENDED ACTION:
Council adoption oftheattached resolution which provides fortheissuance andsaleofthe
Series2022A.
BACKGROUND:
Introduction
Arepresentative oftheCity’smunicipal advisor, Tammy Omdal, fromNorthland Securities Inc.,
willbepresent atthemeeting toanswerquestions relatedtotheCouncil approval ofthesaleof
bondsfortheDowntown South StreetImprovement Project.
Aresolution isattached providing forthecompetitive negotiated sale ofGeneral Obligation
Bonds, Series 2022A inanamount not-to-exceed $2,175,000. Thefinalbondamountwillbe
determined atthetimeofthesaleonAugust15.
History
Bids have beenreceived andcontracts awarded fortheDowntown South Streetproject.
Current Circumstances
Thecitywilluseacompetitive saleprocess tosolicitproposals fromunderwriters. The
resolution providing forthesaleofthebonds willsettermsforthebondissue. OnAugust 15,
thecitywillreceivebidsfrominterested underwriters orunderwriting groups. Thelowbidwill
bedetermined based onthetrue interestcost (TIC) ofthe underwriter’sdiscount andinterest
expense. Closing onthebondsisexpected tooccurinearly September.
Thestructure ofthebondissueitself willbebaseduponthefollowing components inrounded
amounts forthenewproject:
CityofPriorLake | 4646DakotaStreetSE | PriorLakeMN55372
ImprovementDowntownSouthReconstructionEstimatedProjectCosts$ 5,783,287Less: Water Fund (832,290) Less: Sewer Fund (513,153) Less: StormWaterFund (3,709) Less: Otherfunding - MSA (583,161) Less: Otherfunding - ARPAGrantRevenue (1,750,000) ProjectCoststoBond 2,100,974CostsofIssuance 48,565TotalUnderwriter'sDiscount (1.100%) 23,925RoundingAmount 1,536 Item9ATotalNewMoney$ 2,175,000 Page | 2
Attached isaFinance PlanSummary prepared byNorthland Securities, whichprovides
additional detail withrespect totheestimated sources anduses offunds, interest rates, debt
service principal/interest payments, andsources ofrepayment. Thetwoprimary sources of
repayment arepropertytaxes andspecial assessments.
TheCity’sbond counsel, TaftLaw, hasreviewed allthenecessary bonddocuments andhas
prepared theattached resolution providing fortheissuance andsaleofthegeneralobligation
bonds.
PriortoAugust 1, theCityManager, FinanceDirector, andMs. Omdalwillparticipate inabond
rating callwithS&PGlobal. Thecitycurrently hasa “AA+” rating from S&PGlobal.
Conclusion
TheCityCouncilshould adopt theattached resolution whichprovides fortheissuance and sale
ofbonds.
FINANCIAL IMPACT:
Street Project
Thecitywasabletoreduce theprojectcostsfinanced withdebt/bond issuance. American
Rescue Plangrant revenue (CSLFRprogram) willfund $1,750,000oftheprojectcost. Based
onthecontract award, theprojectcostfunded bythebondissue is $2,113,000withthetax
levysupporting about $1,405,000. Thestreet project willbefinanced overtenyears.
Debtservice taxlevyimpact onthefinancial plan-Preliminary
Thebonds arestructured withrelatively levelannual debt servicepayments.
NewMoney
Thenewmoney portion ofthe2022bondissue finances thestreet project. Thepreliminary net
annualaverage debtservicetaxlevypertheFinancePlanisabout $179,220overthetermof
the bond.
Item9A
Page | 3
Special assessments
Special assessments support therepayment oftheDowntown South Street improvement bond
issuance. Thestreet assessments forthisproject have a10-yearterm.
ALTERNATIVES:
1. Motionandasecond toAdopt theResolution Authorizing theIssuance ofGeneral
Obligation Bonds, Series2022A
2. Motion andasecond totableactionandtoprovide direction tostaffformoreinformation.
ATTACHMENTS:
1. Finance Plan General Obligation Bonds, Series 2022A
2. Resolution - Consider ApprovalofaResolution Authorizing theCompetitive Negotiated
SaleofGeneral Obligation Bonds, Series 2022A
Finance Plan
City of Prior Lake, Minnesota
$2,175,000
General Obligation Improvement Bonds,
Series 2022A
May 16, 2022
150 South 5th Street, Suite 3300
Minneapolis, MN 55402
612-851-5900 800-851-2920
www.northlandsecurities.com
Member FINRA and SIPC | Registered with SEC and MSRB
Northland Securities, Inc. Page 2
Contents
Executive Summary ........................................................................................................................................................... 2
Issue Overview .................................................................................................................................................................... 3
Purpose ................................................................................................................................................................ 3
Authority ............................................................................................................................................................. 3
Structure .............................................................................................................................................................. 3
Security and Source of Repayment ........................................................................................................ 3
Plan Rationale ................................................................................................................................................... 4
Issuing Process ................................................................................................................................................. 4
Attachment 1 – Preliminary Debt Service Schedule .......................................................................................... 5
Attachment 2 – Estimated Levy Schedule ............................................................................................................... 6
Attachment 3 – Related Considerations .................................................................................................................. 7
Bank Qualification .................................................................................................................................. 7
Arbitrage Compliance ........................................................................................................................... 7
Continuing Disclosure .......................................................................................................................... 7
Premiums .................................................................................................................................................... 7
Rating ............................................................................................................................................................ 8
Attachment 4 – Calendar of Events ............................................................................................................................ 9
Attachment 5 - Risk Factors ......................................................................................................................................... 11
Northland Securities, Inc. Page 2
Executive Summary
The following is a summary of the recommended terms for the issuance of $2,175,000 General
Obligation Improvement Bonds, Series 2022A (the “Bonds”). Additional information on the
proposed finance plan and issuing process can be found after the Executive Summary, in the Issue
Overview and Attachment 3 – Related Considerations.
Purpose Proceeds from the Bonds will be used to finance the Downtown
South street project and to finance the costs associated with the
issuance of the Bonds.
Security The Bonds will be a general obligation of the City. The City will
pledge special assessment revenue and property tax levies for
payment of the Bonds.
Repayment Term The Bonds will mature annually each December 15 in the years
2023 through 2032. Interest on the Bonds will be payable on
June 15, 2023, and semiannually thereafter on each December
15 and June 15.
Estimated Interest Rate Average coupon: 2.99%
True interest cost (TIC): 3.19%
Prepayment Option Bonds maturing on and after December 15, 2031, will be subject
to redemption on December 15, 2030, and any day thereafter at
a price of par plus accrued interest.
Rating A rating will be requested from Standard and Poor’s (S&P). The
City’s general obligation debt is currently rated "AA+" by S&P.
Tax Status The Bonds will be tax-exempt, bank qualified obligations.
Risk Factors There are certain risks associated with all debt. Risk factors
related to the Bonds are discussed in Attachment 5.
Type of Bond Sale Public Sale – Competitive Bids
Proposals Received Monday August 15, 2022 @ 10:00 A.M.
Council Consideration Monday, August 15, 2022 @ 7:00 P.M.
Northland Securities, Inc. Page 3
Issue Overview
Purpose
Proceeds from the Bonds will be used to finance the Downtown South street project (the
“Project”) and to pay costs associated with issuing the Bonds. The Bonds have been sized based
on construction bids awarded on March 21, 2022. The table below contains the estimated sources
and uses of funds for the bond issue.
Authority
The Bonds will be issued pursuant to the authority of Minnesota Statutes, Chapters 429 and 475.
Under Chapter 429, an Improvement means any type of improvement made under authority
granted by Section 429.021, which includes, but is not limited to, improvements to streets and
sidewalks, storm and sanitary sewer systems, and street lighting systems.
Before issuing bonds under Chapter 429, the City must hold a public hearing on the
improvements and the proposed bonds and must then pass a resolution ordering the
improvements by at least a 4/5 majority. A public hearing was held for the Project and the
resolution ordering the improvements was adopted with a 4/5 majority at the meeting.
Structure
The Bonds have been structured to result in relatively level annual debt service payments over
10 years. The special assessments have been structured to result in equal annual principal
payments, resulting in an increasing annual net levy.
The proposed structure for the bond issue and preliminary debt service projections are illustrated
in Attachment 1 and the estimated levy is illustrated in Attachment 2. The table in Attachment 2
shows the estimated flow of funds, including the 5 percent overlevy. State law (Section 475.61,
Subd. 1) requires that revenues pledged to the payment of general obligation bonds produce 5%
in excess of the amount needed to pay principal and interest when due. This additional revenue
provides protection against deficiencies in the collection of anticipated revenues
Security and Source of Repayment
The Bonds will be general obligations of the City. The finance plan relies on the following
assumptions for the revenues used to pay debt service, as provided by City staff:
• Special Assessments. The City is expected to levy special assessments against benefited
properties in the amount of $707,618.16 for the Projects. The assessments will be payable
over 10 years, with an interest rate of 2% over the average coupon on the Bonds and
structured for level annual payments. The Plan assumes that the assessments will be levied
in 2022 for initial payment in 2023.
Sources Of Funds Par Amount of Bonds $2,175,000.00 Total Sources $2,175,000.00 Uses Of Funds Deposit to Project Construction Fund 2,100,974.00
Costs of Issuance 48,565.00Total Underwriter's Discount (1.100%)23,925.00Rounding Amount 1,536.00 Total Uses $2,175,000.00
Northland Securities, Inc. Page 4
• Property Taxes. The remaining revenues needed to pay debt service on the Bonds are
expected to come from property tax levies. The initial projections show an annual tax levy
averaging $179,220 (ranging from approximately $160,315 to approximately $196,469) is
needed to produce the statutory requirement of 105% of debt service, after accounting for
assessments. The levy may be adjusted annually based on actual special assessment
collections and additional monies in the debt service fund. The initial tax levy will be made
in 2022 for taxes payable in 2023.
Plan Rationale
The Finance Plan recommended in this report is based on a variety of factors and information
provided by the City related to the financed project and City objectives, Northland’s knowledge
of the City and our experience in working with similar cities and projects. The issuance of General
Obligation Improvement Bonds provides the best means of achieving the City’s objectives and
cost-effective financing. The City has successfully issued and managed this type of debt for
previous projects.
Issuing Process
Northland will receive bids from underwriters to purchase the Bonds on Monday, August 15,
2022, at 10:00 A.M. Market conditions and the marketability of the Bonds support issuance
through a competitive sale. This process has been chosen as it is intended to produce the lowest
combination of interest expense and underwriting expense on the structure, date and time set to
receive bids. The calendar of events for the issuing process can be found in Attachment 4.
Municipal Advisor: Northland Securities, Inc., Minneapolis, Minnesota
Bond Counsel: Taft Stettinius & Hollister LLP, Minneapolis, Minnesota
Paying Agent: Northland Trust Services, Inc. Minneapolis, Minnesota
Northland Securities, Inc. Page 5
Attachment 1 – Preliminary Debt Service Schedule
*Based on preliminary “AA+” rates as of May 5, 2022, plus 0.25%.
Date Principal Coupon Interest Total P+I Fiscal Total
09/08/2022 -----
06/15/2023 --48,651.97 48,651.97 -12/15/2023 175,000.00 2.550%31,615.00 206,615.00 255,266.9706/15/2024 --29,383.75 29,383.75 -12/15/2024 200,000.00 2.700%29,383.75 229,383.75 258,767.5006/15/2025 --26,683.75 26,683.75 -12/15/2025 205,000.00 2.750%26,683.75 231,683.75 258,367.5006/15/2026 --23,865.00 23,865.00 -
12/15/2026 210,000.00 2.800%23,865.00 233,865.00 257,730.0006/15/2027 --20,925.00 20,925.00 -12/15/2027 215,000.00 2.850%20,925.00 235,925.00 256,850.0006/15/2028 --17,861.25 17,861.25 -
12/15/2028 220,000.00 2.950%17,861.25 237,861.25 255,722.5006/15/2029 --14,616.25 14,616.25 -12/15/2029 225,000.00 3.000%14,616.25 239,616.25 254,232.5006/15/2030 --11,241.25 11,241.25 -12/15/2030 235,000.00 3.050%11,241.25 246,241.25 257,482.5006/15/2031 --7,657.50 7,657.50 -12/15/2031 240,000.00 3.100%7,657.50 247,657.50 255,315.0006/15/2032 --3,937.50 3,937.50 -12/15/2032 250,000.00 3.150%3,937.50 253,937.50 257,875.00
Total $2,175,000.00 -$392,609.47 $2,567,609.47 -
Yield Statistics Bond Year Dollars $13,126.04Average Life 6.035 YearsAverage Coupon 2.9910729% Net Interest Cost (NIC)3.1733441%True Interest Cost (TIC)3.1897066%Bond Yield for Arbitrage Purposes 2.9843486%All Inclusive Cost (AIC)3.6163644% IRS Form 8038
Net Interest Cost 2.9910729%Weighted Average Maturity 6.035 Years Optional Redemption
12/15/2030 @100.000%
Northland Securities, Inc. Page 6
Attachment 2 – Estimated Levy Schedule
Date Total P+I 105% Levy
Less:
Special
Assessment
Revenues*Net Levy
Levy
Year
Collection
Year
12/15/2022 ----12/15/2023 255,266.97 268,030.32 107,715.21 160,315.11 2022 202312/15/2024 258,767.50 271,705.88 102,604.64 169,101.24 2023 202412/15/2025 258,367.50 271,285.88 99,066.54 172,219.34 2024 202512/15/2026 257,730.00 270,616.50 95,528.46 175,088.04 2025 202612/15/2027 256,850.00 269,692.50 91,990.36 177,702.14 2026 202712/15/2028 255,722.50 268,508.63 88,452.28 180,056.35 2027 2028
12/15/2029 254,232.50 266,944.13 84,914.17 182,029.96 2028 202912/15/2030 257,482.50 270,356.63 81,376.09 188,980.54 2029 203012/15/2031 255,315.00 268,080.75 77,837.99 190,242.76 2030 203112/15/2032 257,875.00 270,768.75 74,299.91 196,468.84 2031 2032
Total $2,567,609.47 $2,695,989.94 $903,785.65 $1,792,204.29
*Special assessment revenue is based on assessments totaling $707,618.16 assessed at a rate of 5.00% (2%
over the average coupon, rounded to the nearest 0.05%), with equal annual principal payments.
Northland Securities, Inc. Page 7
Attachment 3 – Related Considerations
Bank Qualification
We understand the City (in combination with any subordinate taxing jurisdictions or debt issued
in the City’s name by 501(c)3 corporations) anticipates issuing $10,000,000 or less in tax-exempt
debt during this calendar year. Therefore, the Bonds will be designated as “bank qualified”
obligations pursuant to Federal Tax Law.
Arbitrage Compliance
Project/Construction Fund. All tax-exempt bond issues are subject to federal rebate requirements
which require all arbitrage earned to be rebated to the U.S. Treasury. The rebate exemptions the
City expects to qualify for is the “small issuer exception.”
Debt Service Fund. The City must maintain a bona fide debt service fund for the Bonds or be
subject to yield restriction in the debt service fund. A bona fide debt service fund involves an
equal matching of revenues to debt service expense with a balance forward permitted equal to
the greater of the investment earnings in the fund during that year or 1/12 of the debt service of
that year.
The City should become familiar with the various Arbitrage Compliance requirements for this
bond issue. The Resolution for the Bonds prepared by Bond Counsel explains the requirements
in greater detail.
Continuing Disclosure
Type: Full
Dissemination Agent: Northland Securities
The requirements for continuing disclosure are governed by SEC Rule 15c2-12. The primary
requirements of Rule 15c2-12 actually fall on underwriters. The Rule sets forth due diligence
needed prior to the underwriter’s purchase of municipal securities. Part of this requirement is
obtaining commitment from the issuer to provide continuing disclosure. The document
describing the continuing disclosure commitments (the “Undertaking”) is contained in the
Official Statement that will be prepared to offer the Bonds to investors.
The City has more than $10,000,000 of outstanding debt and is required to undertake “full”
continuing disclosure. Full disclosure requires annual posting of the audit and a separate
continuing disclosure report, as well as the reporting of certain “material events.” Material events
set forth in the Rule, including, but not limited to, bond rating changes, call notices, and issuance
of “financial obligations” (such as USDA loans, Public Finance Authority loans and lease
agreements) must be reported within ten days of occurrence. The report contains annual financial
information and operating data that “mirrors” material information presented in the Official
Statement. The specific contents of the annual report will be described in the Undertaking that
appears in the appendix of the Official Statement. Northland currently serves as dissemination
agent for the City, assisting with the annual reporting. The information for the Bonds will be
incorporated into our reporting.
Premiums
In the current market environment, it is likely that bids received from underwriters will include
premiums. A premium bid occurs when the purchaser pays the City an amount in excess of the
par amount of a maturity in exchange for a higher coupon (interest rate). The use of premiums
reflects the bidder’s view on future market conditions, tax considerations for investors and other
Northland Securities, Inc. Page 8
factors. Ultimately, the true interest cost (“TIC”) calculation will determine the lowest bid,
regardless of premium.
A premium bid produces additional funds that can be used in several ways:
• The premium means that the City needs less bond proceeds and can reduce the size of the
issue by the amount of the premium.
• The premium can be deposited in the Construction Fund and used to pay additional
project costs, rather than used to reduce the size of the issue.
• The premium can be deposited in the Debt Service Fund and used to pay principal and
interest.
Northland will work with City staff prior to the sale day to determine use of premium (if any).
Rating
A rating will be requested from Standard and Poor’s (S&P). The City’s general obligation debt is
currently rated "AA+" by S&P. The rating process will include a conference call with the rating
analyst. Northland will assist City staff in preparing for and conducting the rating call.
Northland Securities, Inc. Page 9
Attachment 4 – Calendar of Events
The following checklist of items denotes each milestone activity as well as the members of the
finance team who will have the responsibility to complete it. Please note this proposed timetable
assumes regularly scheduled City Council meetings.
Date Action Responsible Party
May 9 Set Sale Resolution and Finance Plan Sent to City Northland, Bond
Counsel
May 16 Set Sale Resolution Adopted and Review of Finance Plan Northland, Bond
Counsel, City
Council Action
June 9 General Information Certificate Sent to City Northland
June 23 City Returns Completed General Information Certificate City Staff
July 7 Rating Request sent to S&P. Preliminary Official
Statement Sent to City for Sign Off
Northland, City
April 2022 May 2022
Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat
1 2 1 2 3 4 5 6 7
3 4 5 6 7 8 9 8 9 10 11 12 13 14
10 11 12 13 14 15 16 15 16 17 18 19 20 21
17 18 19 20 21 22 23 22 23 24 25 26 27 28
24 25 26 27 28 29 30 29 30 31
June 2022 July 2022
Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 1 2
5 6 7 8 9 10 11 3 4 5 6 7 8 9
12 13 14 15 16 17 18 10 11 12 13 14 15 16
19 20 21 22 23 24 25 17 18 19 20 21 22 23
26 27 28 29 30 24 25 26 27 28 29 30
31
August 2022 September 2022
Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 1 2 3
7 8 9 10 11 12 13 4 5 6 7 8 9 10
14 15 16 17 18 19 20 11 12 13 14 15 16 17
21 22 23 24 25 26 27 18 19 20 21 22 23 24
28 29 30 31 25 26 27 28 29 30
Holiday
Important Date
Northland Securities, Inc. Page 10
Date Action Responsible Party
Week of July 18 or
July 25
Rating Call Northland, City,
Rating Agency
July 25 City confirms project costs to be financed and source of
payment and plans for use of any premium that may be
bid
City Staff
August 4 Rating Received
Northland, City,
Rating Agency
August 8 Awarding Resolutions sent to City Northland, Bond
Counsel
August 15 Bond Sale at 10:00 a.m.
Bond Proposal Signed and Awarding Resolution adopted
– 7:00 p.m.
Northland, City
Council Action
September 8 Closing on the Series 2022A Bonds
Northland, City
Staff, Bd Counsel
Northland Securities, Inc. Page 11
Attachment 5 - Risk Factors
Property Taxes: Property tax levies shown in this Finance Plan are based on projected debt service
and other revenues. Final levies will be set based on the results of sale. Levies should be reviewed
annually and adjusted as needed. The debt service levy must be included in the preliminary levy
for annual Truth in Taxation hearings. Future Legislative changes in the property tax system,
including the imposition of levy limits and changes in calculation of property values, would affect
plans for payment of debt service. Delinquent payment of property taxes would reduce revenues
available to pay debt service.
Special Assessments: Special assessments for the financed projects have not been levied at this
time. This Finance Plan is based on the assumptions listed earlier in this report. Changes in the
terms and timing for the actual assessments will alter the projected flow of funds for payment of
debt service on the Bonds. Also, special assessments may be prepaid. It is likely that the income
earned on the investment of prepaid assessments will be less than the interest paid if the
assessments remained outstanding. Delinquencies in assessment collections would reduce
revenues needed to pay debt service. The collection of deferred assessments, if any, have not been
included in the revenue projections. Projected assessment income should be reviewed annually
and adjusted as needed.
General: In addition to the risks described above, there are certain general risks associated with
the issuance of bonds. These risks include, but are not limited to:
• Failure to comply with covenants in bond resolution.
• Failure to comply with Undertaking for continuing disclosure.
• Failure to comply with IRS regulations, including regulations related to use of the proceeds
and arbitrage/rebate. The IRS regulations govern the ability of the City to issue its bonds as
tax-exempt securities and failure to comply with the IRS regulations may lead to loss of tax-
exemption.
EXTRACT OFMINUTES OFAMEETING
OFTHECITYCOUNCIL
CITY OFPRIOR LAKE, MINNESOTA
HELD: MAY16, 2022
Pursuant todue callandnotice thereof, aregular orspecial meeting oftheCityCouncil
oftheCityofPrior Lake, ScottCounty, Minnesota, was dulyheld attheCityHallonMay16,
2022, at7:00P.M. forthe purpose inpartofauthorizing thecompetitive negotiated sale ofthe
2,175,000General Obligation Improvement Bonds, Series 2022A.
Thefollowing members werepresent:
andthefollowing were absent:
Member _______________ introduced thefollowing resolution and moved its adoption:
RESOLUTION PROVIDING FORTHE COMPETITIVE NEGOTIATED SALEOF
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2022A
A. WHEREAS, the CityCouncil oftheCity ofPrior Lake, Minnesota (the "City"),
hasheretofore determined thatitisnecessary andexpedient toissueGeneral Obligation
Improvement Bonds, Series 2022A (the "Bonds") tofinance various street improvements
projects inthe City; and
B. WHEREAS, theCity has retained Northland Securities, Inc., inMinneapolis,
Minnesota ("Northland"), asitsindependent municipal advisor and istherefore authorized tosell
theBondsbycompetitive negotiated saleinaccordance withMinnesota Statutes, Section 475.60,
Subdivision 2(9); and
C. WHEREAS, theCity hasretained TaftStettinius & Hollister LLP, in
Minneapolis, Minnesota asitsbondcounsel forpurposes ofthisfinancing.
NOW, THEREFORE, BEITRESOLVED bythe CityCouncil oftheCityofPriorLake,
Minnesota, asfollows:
1. Authorization. TheCity Council hereby authorizes Northland tosolicit proposals
forthecompetitive negotiated sale ofthe Bonds.
2. Meeting; Proposal Opening. The City Council shallmeet atthetimeandplace
specified intheNotice ofSale, insubstantially theformattached hereto asExhibit A, forthe
purpose ofconsidering sealed proposals for and awarding the sale oftheBonds. The City
Finance Director, ordesignee, shall open proposals atthe time and place specified intheNotice
ofSale.
73458994v1
3. Notice ofSale. Theterms andconditions oftheBonds andthenegotiation thereof
aresubstantially intheformsetforthintheNotice ofSale attached hereto asExhibit Aand
hereby approved and madeaparthereof.
4. Official Statement. Inconnection withthecompetitive negotiated saleofthe
Bonds, theCityManager andotherofficers oremployees oftheCityarehereby authorized to
cooperate withNorthland andparticipate inthe preparation ofanofficial statement forthe
Bonds, andtoexecute anddeliver itonbehalf oftheCity upon itscompletion.
The motion fortheadoption oftheforegoing resolution was dulyseconded bymember
and, afterfulldiscussion thereof anduponavote beingtaken thereon, the
following votedinfavor thereof:
andthefollowing voted against thesame:
Whereupon theresolution wasdeclared dulypassed andadopted.
2
73458994v1
STATE OFMINNESOTA
COUNTY OF SCOTT
CITY OF PRIOR LAKE
I, the undersigned, being thedulyqualified andacting CityAdministrator oftheCityof
PriorLake, Minnesota, DOHEREBY CERTIFY thatIhave compared theattached and
foregoing extract ofminutes with theoriginal thereof onfileinmyoffice, andthatthesame isa
full, trueandcomplete transcript oftheminutes ofameeting ofthe City Council duly called and
heldonthedatetherein indicated, insofar assuchminutes relatetothe City's $2,175,000General
Obligation Improvement Bonds, Series 2022A.
WITNESS my hand onMay 16, 2022.
City Manager
3
73458994v1
EXHIBIT A
NOTICE OFSALE
2,175,000
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2022A
CITY OFPRIOR LAKE, MINNESOTA
Book-Entry Only)
NOTICE ISHEREBY GIVEN thattheseBonds willbeoffered forsaleaccording tothefollowing terms:
TIME ANDPLACE:
Proposals (alsoreferred toherein as “bids”) willbeopened bytheCity’sFinance Director, ordesignee, on
Monday, August 15, 2022, at10:00A.M., CT, attheoffices ofNorthland Securities, Inc. (theCity’s
Municipal Advisor”), 150South 5thStreet, Suite 3300, Minneapolis, Minnesota 55402. Consideration of
theProposals foraward ofthesalewill bebytheCityCouncil atitsspecial meeting atthe CityOffices
beginning Monday, August 15, 2022at7:00P.M., CT.
SUBMISSION OFPROPOSALS
Proposals maybe:
a) submitted totheoffice ofNorthland Securities, Inc.,
b) faxedtoNorthland Securities, Inc. at612-851-5918,
c) emailedtoPublicSale@northlandsecurities.com
d) forproposals submitted prior tothesale, thefinal priceandcoupon ratesmaybesubmitted to
Northland Securities, Inc. bytelephone at612-851-5900or612-851-4968, or
e) submitted electronically.
Notice ishereby given thatelectronic proposals willbereceived viaPARITY, oritssuccessor, inthe
manner described below, until 10:00A.M., CT, onMonday, August 15, 2022. Proposals maybesubmitted
electronically viaPARITY oritssuccessor, pursuant tothisNotice until 10:00A.M., CT, butnoProposal
willbereceived afterthetimeforreceiving Proposals specified above. Totheextent anyinstructions or
directions setforthinPARITY, oritssuccessor, conflict withthisNotice, thetermsofthisNotice shall
control. Forfurther information aboutPARITY, oritssuccessor, potential bidders may contact NorthlandndSecurities, Inc. ori-Dealat 1359Broadway, 2 floor, NewYork, NY10018, telephone 212-849-5021.
Neither theCitynorNorthland Securities, Inc. assumes any liability ifthereisamalfunction of
PARITYor itssuccessor. Allbidders areadvised thateachProposal shallbedeemed toconstitute a
contractbetween thebidder andtheCitytopurchase theBonds regardless ofthemanner inwhich the
Proposal issubmitted.
BOOK-ENTRY SYSTEM
TheBonds willbeissued bymeans ofabook-entrysystem withnophysical distribution ofbond
certificates made tothepublic. The Bondswillbeissued infullyregistered form andonebond certificate,
representing theaggregate principal amount oftheBonds maturing ineachyear, willberegistered inthe
TheCityreservestherighttoincreaseordecreasetheprincipalamountoftheBonds. Anysuchincreaseordecreasewillbe
madeinmultiplesof $5,000andmaybemadeinanymaturity. Ifanymaturityisadjusted, thepurchasepricewillalsobeadjusted
tomaintainthesamegrossspread.
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nameofCede & Co. asnominee ofDepository Trust Company (“DTC”), NewYork, NewYork, which
will actassecurities depository oftheBonds.
Individual purchases oftheBonds maybemade intheprincipal amount of $5,000oranymultiple thereof
ofasinglematurity through book entries madeonthebooksandrecords ofDTC anditsparticipants.
Principal andinterest arepayable bytheCity through Northland Trust Services, Inc. Minneapolis,
Minnesota (the “Paying Agent/Registrar”), toDTC, oritsnominee asregistered owner oftheBonds.
Transfer ofprincipal andinterest payments toparticipants ofDTCwillbetheresponsibility ofDTC;
transfer ofprincipal and interestpayments tobeneficial owners byparticipants willbetheresponsibility of
suchparticipants andothernominees ofbeneficial owners. Thesuccessful bidder, asacondition ofdelivery
oftheBonds, willberequired todeposit thebondcertificates withDTC. TheCitywillpayreasonable and
customary charges fortheservices ofthePaying Agent/Registrar.
DATE OF ORIGINAL ISSUE OFBONDS
DateofDelivery (Estimated tobeSeptember 8, 2022)
AUTHORITY/PURPOSE/SECURITY
TheBondsarebeing issued pursuant toMinnesota Statutes, Chapters 429and475. Proceeds willbeused
tofinance theDowntown South street project and topaycostsassociated withtheissuance oftheBonds.
TheBonds arepayable fromspecialassessments against benefited property andadditionally secured byad
valorem taxesonalltaxable property within theCity. The fullfaith andcreditoftheCityispledged totheir
payment andtheCityhasvalidlyobligated itselftolevyadvalorem taxes intheevent ofanydeficiency in
thedebtservice account established forthisissue.
INTEREST PAYMENTS
Interest isduesemiannually oneachJune15andDecember 15, commencing June15, 2023, toregistered
owners oftheBondsappearing ofrecordintheBond Register asoftheclose ofbusiness onthefirstday
whether ornotabusiness day) ofthecalendar month ofsuch interest payment date.
MATURITIES
Principal isdueannually onDecember 15, inclusive, ineachoftheyearsandamounts asfollows:
Year Amount Year Amount
2023 $175,000 2028 $220,000
2024 200,000 2029 225,000
2025 205,000 2030 235,000
2026 210,000 2031 240,000
2027 215,000 2032 250,000
Proposals fortheBonds maycontain amaturity schedule providing foranycombination ofserialbonds
andtermbonds, subject tomandatory redemption, solong astheamount ofprincipal maturing orsubject
tomandatory redemption ineach year conforms tothematurity schedule setforthabove.
INTEREST RATES
Allratesmust beinintegral multiples of1/20thor1/8thof1%. Therateforanymaturity may notbemore
than2.00% lessthan therateforany preceding maturity. AllBonds ofthesamematurity mustbearasingle
uniform ratefromdate ofissuetomaturity.
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ESTABLISHMENT OFISSUE PRICE
HOLD-THE-OFFERING-PRICE RULE MAYAPPLY – BIDS NOT CANCELLABLE)
Thewinning biddershallassistthe City inestablishing theissuepriceoftheBondsandshallexecute and
delivertotheCityatclosing an “issue price” orsimilar certificate setting forththereasonably expected
initial offering pricetothepublicorthesalesprice orpricesoftheBonds, together withthesupporting
pricing wires orequivalent communications, substantially intheformattached hereto asExhibit A, with
suchmodifications asmaybeappropriate ornecessary, inthereasonable judgment ofthewinning bidder,
theCity andBond Counsel. AllactionstobetakenbytheCityunder thisNotice ofSale toestablish the
issue priceoftheBondsmaybetaken onbehalf oftheCitybytheCity’sMunicipal Advisor andanynotice
orreport tobeprovided totheCitymaybeprovided totheCity’sMunicipal Advisor.
TheCityintends that theprovisions ofTreasury Regulation Section 1.148-1(f)(3)(i) (defining “competitive
sale” forpurposes ofestablishing theissueprice oftheBonds) willapply totheinitial saleoftheBonds
the “competitive salerequirements”) because:
1) theCityshall disseminate thisNotice ofSale topotential underwriters inamanner thatisreasonably
designed toreach potential underwriters;
2) allbidders shall haveanequal opportunity tobid;
3) theCity mayreceive bidsfromatleastthreeunderwriters ofmunicipal bondswhohave established
industry reputations forunderwriting newissuances ofmunicipal bonds; and
4) theCity anticipates awarding thesaleofthe Bonds tothebidder who submits afirmoffer to
purchase theBonds atthehighest price (orlowestcost), assetforthinthisNotice ofSale.
Anybidsubmitted pursuant tothisNotice ofSaleshallbeconsidered afirmofferforthepurchase
oftheBonds, asspecified inthebid.
Intheeventthat thecompetitive salerequirements arenotsatisfied, theCity shallpromptly soadvise the
winning bidder. The Citymaythendetermine totreat theinitialoffering pricetothepublic asoftheaward
dateoftheBonds astheissue priceofeachmaturity byimposing onthewinning bidder the Hold-the-
Offering-Price Rule asdescribed inthefollowing paragraph (the “Hold-the-Offering-Price Rule”). Bids
willnot besubject tocancellation intheevent that theCitydetermines toapply theHold-the-Offering-
Price Rule totheBonds. Bidders should prepare theirbidsontheassumption thattheBonds willbe
subject totheHold-the-Offering-Price Ruleinorder toestablish theissue price oftheBonds.
Bysubmitting abid, thewinning bidder shall (i) confirm thattheunderwriters haveoffered orwilloffer
theBonds tothepublic onorbefore thedateofaward attheoffering price orprices (the “Initial Offering
Price”), oratthecorresponding yieldoryields, setforth inthebidsubmitted by thewinning bidderand (ii)
agree, onbehalf oftheunderwriters participating inthepurchase oftheBonds, thattheunderwriters will
neitheroffernorsellunsold Bonds ofanymaturity towhich theHold-the-Offering PriceRule shallapply
toanyperson atapricethatishigherthantheInitial Offering Pricetothepublicduring theperiod starting
ontheaward datefortheBonds andending ontheearlier ofthefollowing: th1) thecloseofthefifth (5) business dayaftertheaward date; or
2) thedateonwhich theunderwriters havesoldatleast10% ofamaturity oftheBonds tothepublic
atapricethatisnohigherthantheInitialOffering Pricetothepublic (the “10% Test”), atwhich
timeonlythat particular maturity will nolongerbesubject totheHold-the-Offering-PriceRule.
TheCityacknowledges that, inmaking therepresentations setforthabove, thewinning bidder willrelyon
i) theagreement ofeachunderwriter tocomply withtherequirements forestablishing issue price ofthe
Bonds, including, butnotlimited to, itsagreement tocomply withtheHold-the-Offering-Price Rule, if
applicable totheBonds, assetforth inanagreement among underwriters andtherelatedpricing wires, (ii)
intheevent asellinggrouphasbeen created inconnection with theinitialsaleoftheBondstothepublic,
theagreement ofeach dealer whoisamember oftheselling group tocomply withtherequirements for
establishing issuepriceoftheBonds, including butnotlimitedto, itsagreement tocomply with the Hold-
the-Offering-Price Rule, ifapplicable totheBonds, assetforth inaselling groupagreement andtherelated
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pricing wires, and (iii) intheeventthatanunderwriter ordealer whoisamember oftheselling groupisa
party toathird-party distribution agreement thatwasemployed inconnection withtheinitial saleofthe
Bonds tothepublic, theagreement ofeachbroker-dealer thatisaparty tosuchagreement tocomply with
the requirements forestablishing issuepriceoftheBonds, including, butnotlimited to, itsagreement to
comply withtheHold-the-Offering-Price Rule, ifapplicable totheBonds, assetforthinthethird-party
distribution agreement andtherelated pricing wires. TheCityfurther acknowledges thateachunderwriter
shall besolely liable foritsfailure tocomply with itsagreement regarding therequirements forestablishing
issuepriceoftheBonds, including butnotlimited to, itsagreement tocomply withtheHold-the-Offering-
PriceRule, ifapplicable totheBonds, andthatnounderwriter shallbeliable forthefailure ofanyother
underwriter, orofanydealer whoisamember ofaselling group, orofanybroker-dealer thatisapartyto
athird-party distribution agreement tocomply withitscorresponding agreement tocomply with the
requirements forestablishing issuepriceoftheBonds, including, butnotlimited to, itsagreement tocomply
with theHold-the-Offering-PriceRule ifapplicable totheBonds.
Bysubmitting abid, eachbidder confirms that: (i) anyagreement among underwriters, anyselling group
agreement andeachthird-party distribution agreement (towhich thebidder isaparty) relating totheinitial
saleoftheBonds tothepublic, together withtherelated pricing wires, contains orwillcontain language
obligating eachunderwriter, each dealerwhoisamember ofthesellinggroup, andeach broker-dealer that
isaparty tosuchthird-party distribution agreement, asapplicable, (A) tocomply with theHold-the-
Offering-PriceRule, ifapplicable ifandforsolongasdirected bythewinning bidder andassetforthinthe
related pricing wires, (B) topromptly notify thewinning bidder ofanysales ofBonds thattoitsknowledge,
aremade toapurchaser whoisarelated partytoanunderwriter participating intheinitial saleoftheBonds
tothepublic (eachsuch termbeingusedasdefined below), and (C) toacknowledge that, unless otherwise
advised bytheunderwriter, dealerorbroker-dealer, thewinning bidder shall assume thateachorder
submitted bytheunderwriter, dealer orbroker-dealer isasaletothepublic, and (ii) anyagreement among
underwriters orselling group agreement relating totheinitial saleoftheBonds tothepublic, together with
therelated pricing wires, contains orwillcontain language obligating each underwriter ordealer that isa
partytoathird-partydistribution agreement tobeemployed inconnection withtheinitial sale oftheBonds
tothepublictorequire eachbroker-dealer thatisaparty tosuchretail distribution agreement tocomply
withtheHold-the-Offering-Price Rule, ifapplicable, ineach case ifandforsolongasdirected bythe
winning bidderortheunderwriter andassetforthintherelated pricing wires.
Notes: SalesofanyBonds toanyperson thatisarelated party toanunderwriter participating intheinitial
saleoftheBonds tothepublic (eachsuchterm being used asdefined below) shall notconstitute sales to
thepublicforpurposes ofthis Notice ofSale. Further, forpurposes ofthisNotice ofSale:
1) “public” means anyperson other thananunderwriter orarelated party,
2) “underwriter” means (A) anyperson thatagrees pursuant toawritten contract with theCity (or
withtheleadunderwriter toformanunderwriting syndicate) toparticipate intheinitialsaleofthe
Bonds tothepublic and (B) anyperson that agrees pursuant toawritten contract directly or
indirectly with aperson described inclause (A) toparticipate intheinitialsaleoftheBonds tothe
public (including amember ofaselling group orapartytoathird-partydistribution agreement
participating intheinitial saleoftheBonds tothe public).
3) apurchaser ofanyoftheBondsisa “related party” toanunderwriter iftheunderwriter and the
purchaser are subject, directly orindirectly, to (A) more than50% common ownership ofthevoting
powerorthetotalvalue oftheirstock, ifboth entities arecorporations (including direct ownership
byonecorporation oranother), (B) morethan50% common ownership oftheircapital interests
orprofits interests, ifbothentities arepartnerships (including directownership byonepartnership
ofanother), or (C) more than50% common ownership ofthevalueoftheoutstanding stockofthe
corporation orthecapital interests orprofitinterests ofthepartnership, asapplicable, ifoneentity
isacorporation andtheotherentity isapartnership (including directownership oftheapplicable
stockorinterests byone entity oftheother), and
4) “saledate” means thedatethattheBonds areawarded bytheCity tothewinning bidder.
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73458994v1
ADJUSTMENTS TOPRINCIPAL AMOUNT AFTER PROPOSALS
TheCityreserves theright toincrease ordecrease theprincipal amount oftheBonds. Anysuch increase or
decrease willbemadeinmultiples of $5,000andmay bemadeinanymaturity. Ifanymaturity isadjusted,
thepurchase price willalsobeadjusted tomaintain thesamegross spread. Such adjustments shallbemade
promptly after thesaleandprior totheaward ofProposals bytheCityandshallbeatthesolediscretion of
theCity. Thesuccessful bidder maynotwithdraw ormodify itsProposal oncesubmitted totheCityforany
reason, including post-sale adjustment. Anyadjustment shallbeconclusive andshallbebinding upon the
successful bidder.
OPTIONAL REDEMPTION
Bonds maturing onDecember 15, 2031and2032aresubject toredemption and prepayment attheoption
oftheCityonDecember 15, 2030andanydatethereafter, ataprice ofparplusaccrued interest.
Redemption maybeinwhole orinpartoftheBonds subject toprepayment. Ifredemption isinpart, the
maturities andprincipal amounts within eachmaturity toberedeemed shallbedetermined bytheCity and
ifonlypartoftheBonds having acommon maturity date arecalledforprepayment, thespecific Bondsto
beprepaid shall bechosen bylotbytheBond Registrar.
CUSIP NUMBERS
IftheBonds qualify forassignment ofCUSIP numbers suchnumbers willbeprinted ontheBonds, but
neither thefailure toprintsuchnumbers onanyBondnoranyerrorwithrespect thereto shallconstitute
causeforafailureorrefusal bythesuccessful bidder thereof toacceptdelivery ofandpayfortheBonds
inaccordance withterms ofthepurchase contract. TheCUSIP Service Bureaucharge fortheassignment
ofCUSIPidentification numbers shallbepaidbythesuccessful bidder.
DELIVERY
Delivery oftheBonds willbewithin fortydaysafteraward, subject toanapproving legal opinion byTaft
Stettinius & Hollister LLP, BondCounsel. The legal opinion willbepaidbytheCityanddelivery will be
anywhere inthecontinental UnitedStates without costtothesuccessful bidderatDTC.
TYPE OFPROPOSAL
Proposals ofnotlessthan $2,151,075 (98.90%) andaccrued interest ontheprincipal sumof $2,175,000
must befiledwith theundersigned prior tothetime ofsale. Proposals must beunconditional except asto
legality. Proposals fortheBonds should bedelivered toNorthland Securities, Inc. andaddressed to:
Cathy Erickson, Finance Director
4646 Dakota StreetSE.
Prior Lake, Minnesota 55372
Agood faithdeposit (the “Deposit”) intheamount of $43,500intheform ofafederal wiretransfer (payable
tothe order oftheCity) isonlyrequired fromtheapparent winning bidder, andmust bereceived within
twohoursafter thetime stated forthereceipt ofProposals. Theapparent winning bidder will receive
notification ofthewire instructions fromtheMunicipal Advisor promptly afterthesale. IftheDeposit is
notreceived from theapparent winning bidder inthetime allotted, theCity maychoose toreject their
Proposal and thenproceed tooffertheBondstothenextlowestbidder based ontheterms oftheiroriginal
proposal, solong assaidbidder wires funds fortheDeposit amount withintwo hours ofsaid offer.
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TheCitywillretaintheDeposit ofthesuccessful bidder, theamount ofwhich willbededucted at
settlement andnointerest will accrue tothesuccessful bidder. Intheevent thesuccessful bidder failsto
comply withtheaccepted Proposal, saidamount willberetained bytheCity. NoProposal canbe
withdrawn after thetimesetforreceiving Proposals unless themeeting oftheCityscheduled forawardof
theBonds isadjourned, recessed, orcontinued toanother datewithout award oftheBonds having been
made.
AWARD
TheBondswillbeawarded onthebasisofthelowest interest ratetobedetermined onatrue interest cost
TIC) basis. TheCity’scomputation oftheinterestrateofeachProposal, inaccordance withcustomary
practice, will becontrolling. Intheeventofatie, thesaleoftheBonds willbeawarded bylot. The City
willreserve therightto: (i) waivenon-substantive informalities ofanyProposal orofmatters relating to
thereceipt ofProposals andaward oftheBonds, (ii) reject allProposals without cause, and (iii) reject any
Proposal which theCity determines tohavefailed tocomply withtheterms herein.
INFORMATION FROM SUCCESSFUL BIDDER
Thesuccessful bidder willberequired toprovide, inatimelymanner, certain information relating tothe
initialoffering price oftheBonds necessary tocompute theyieldontheBonds pursuant totheprovisions
oftheInternal Revenue Code of1986, asamended.
OFFICIAL STATEMENT
Byawarding theBonds toanyunderwriter orunderwriting syndicate submitting aProposal therefor, the
Cityagreesthat, nomorethanseven business daysafterthedateofsuch award, itshallprovide tothesenior
managing underwriter ofthesyndicate towhich theBondsareawarded, theFinalOfficial Statement inan
electronic format asprescribed bytheMunicipal Securities Rulemaking Board (MSRB).
FULL CONTINUING DISCLOSURE UNDERTAKING
TheCitywillcovenant intheresolution awarding thesaleoftheBonds andinaContinuing Disclosure
Undertaking toprovide, orcause tobeprovided, annual financial information, including audited financial
statements oftheCity, andnotices ofcertain material events, asrequired bySECRule 15c2-12.
BANK QUALIFICATION
TheCitywill designate theBonds asqualified tax-exempt obligations forpurposes ofSection 265(b)(3)
oftheInternal Revenue Code of1986, asamended.
BOND INSURANCE ATUNDERWRITER’SOPTION
IftheBonds qualify forissuance ofanypolicy ofmunicipal bondinsurance orcommitment therefor atthe
option ofthesuccessful bidder, thepurchase ofanysuch insurance policy ortheissuance ofany such
commitment shall beatthesoleoption andexpense ofthesuccessful bidder oftheBonds. Anyincrease in
thecostsofissuance oftheBonds resulting fromsuchpurchase ofinsurance shall bepaidbythesuccessful
bidder, except that, iftheCity hasrequested andreceived aratingontheBonds fromarating agency, the
Citywillpaythatrating fee. Anyotherratingagency feesshallbetheresponsibility ofthesuccessful bidder.
Failureofthemunicipal bondinsurer toissue thepolicyaftertheBondshavebeen awarded tothesuccessful
bidder shall notconstitute cause forfailureorrefusal bythesuccessful bidder toaccept delivery onthe
Bonds.
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TheCityreserves therighttorejectanyandallProposals, towaive informalities andtoadjourn thesale.
Dated: May16, 2022 BYORDER OFTHEPRIOR LAKECITY COUNCIL
s/ Cathy Erickson
Finance Director
Additional information maybeobtained from:
Northland Securities, Inc. th150South5 Street, Suite 3300
Minneapolis, Minnesota 55402
Telephone No.: 612-851-5900
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EXHIBIT A
FORM OFISSUE PRICE CERTIFICATE – COMPETITIVE SALESATISFIED\]
Theundersigned, onbehalf of ______________________________ (the "Underwriter"),
herebycertifies assetforthbelow withrespect tothesale oftheGeneral Obligation Improvement Bonds,
Series 2022A (the "Bonds") oftheCity ofPrior Lake, Minnesota (the "Issuer").
1. Reasonably Expected Initial Offering Price.
a) AsoftheSale Date, thereasonably expected initialoffering prices oftheBonds tothe
Public bytheUnderwriter arethepriceslisted inSchedule A (the "Expected Offering Prices"). The
Expected Offering Prices arethe pricesfortheMaturities oftheBonds usedbytheUnderwriter in
formulating itsbidtopurchase theBonds. Attached asSchedule Bisatrueand correct copyofthebid
provided bytheUnderwriter topurchase theBonds.
b) TheUnderwriter wasnotgiven theopportunity toreview otherbidsprior tosubmitting
itsbid.
c) Thebidsubmitted bytheUnderwriter constituted afirmoffertopurchase theBonds.
2. Defined Terms.
a) "Maturity" means Bonds with thesame creditandpayment terms. Bonds with different
maturity dates, orBondswiththesame maturity date butdifferent stated interest rates, aretreated as
separate Maturities.
b) "Public" means anyperson (including anindividual, trust, estate, partnership, association,
company, orcorporation) otherthan anUnderwriter orarelated partytoanUnderwriter. Theterm
related party" forpurposes ofthiscertificate generally means anytwoormorepersons whohavegreater
than50percentcommon ownership, directly orindirectly.
c) "SaleDate" means thefirstdayonwhichthereisabinding contract inwriting forthesale
ofaMaturity ofthe Bonds. TheSaleDateoftheBondsis _______________.
d) "Underwriter" means (i) anyperson thatagrees pursuant toawritten contract withthe
Issuer (orwiththeleadunderwriter toform anunderwriting syndicate) toparticipate intheinitial saleof
theBonds tothePublic, and (ii) anyperson that agrees pursuant toawritten contract directly orindirectly
withaperson described inclause (i) ofthisparagraph toparticipate intheinitial saleoftheBondstothe
Public (including amemberofasellinggroup oraparty toaretaildistribution agreement participating in
theinitialsaleoftheBonds tothePublic).
Therepresentations setforthinthiscertificate arelimited tofactual matters only. Nothing inthis
certificate represents theUnderwriter'sinterpretation ofanylaws, including specifically Sections 103and
148 oftheInternal Revenue Code of1986, asamended, and the Treasury Regulations thereunder. The
undersigned understands thattheforegoing information willbereliedupon bytheIssuer withrespect to
certain ofthe representations setforth intheNonarbitrage Certificate andwithrespect tocompliance with
thefederal income taxrulesaffecting theBonds, andbyTaftStettinius & Hollister LLP, Bond Counsel in
connection withrendering itsopinion that theinterest ontheBonds isexcluded fromgrossincome for
federal income taxpurposes, thepreparation oftheInternal Revenue Service Form 8038-G, andother
federal income taxadvice thatitmaygive totheIssuer from timetotimerelating totheBonds.
Dated: September 8, 2022.
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FORMOFISSUE PRICE CERTIFICATE – HOLD-THE-OFFERING-PRICE RULE APPLIES\]
The undersigned, onbehalf of ________________________________(the "Underwriter"), on
behalfofitself, hereby certifies assetforth belowwithrespect tothesaleandissuance ofGeneral Obligation
Improvement Bonds, Series2022A (the "Bonds") oftheCityofPriorLake, Minnesota (the "Issuer").
1. Initial Offering PriceoftheBonds.
a) TheUnderwriter offered eachMaturity oftheBonds tothe Public forpurchase atthe
respective initial offering prices listed inSchedule A (the "InitialOffering Prices") onorbefore theSale
Date. Acopyofthepricing wireorequivalent communication fortheBondsisattached tothiscertificate
asSchedule B.
b) Assetforth intheNoticeofSale andbidaward, theUnderwriter hasagreed inwriting that,
i) foreachMaturity oftheBonds, itwould neither offernorsellanyoftheBondsofsuchMaturity toany
person atapricethatishigher thantheInitial Offering Price forsuchMaturity during theHolding Period
forsuchMaturity (the "hold-the-offering-pricerule"), and (ii) anyselling group agreement shall contain the
agreement ofeach dealer whoisamemberoftheselling group, andanyretaildistribution agreement shall
contain theagreement ofeach broker-dealer whoisaparty totheretail distribution agreement, tocomply
withthehold-the-offering-pricerule. Pursuant tosuchagreement, noUnderwriter (asdefined below) has
offered orsoldanyMaturity oftheBondsatapricethatishigherthantherespective InitialOffering Price
forthat Maturity oftheBonds during theHolding Period.
2. Defined Terms.
a) "Holding Period" means, foreachMaturity oftheBonds, theperiodstarting onthe Sale
Dateandending ontheearlier of (i) theclose ofthefifthbusiness dayafter theSale Date
or (ii) thedateonwhich theUnderwriter hassoldatleast 10% ofsuchMaturity of
theBonds tothePublic atprices thatarenohigher thantheInitial Offering PriceforsuchMaturity.
b) "Maturity" means Bonds withthesamecreditandpayment terms. Bonds withdifferent
maturity dates, orBonds withthesamematurity date butdifferent stated interest rates, aretreated as
separate Maturities.
c) "Public" means anyperson (including anindividual, trust, estate, partnership, association,
company, orcorporation) other thananUnderwriter orarelated party toanUnderwriter. Theterm "related
party" forpurposes ofthiscertificate generally means any twoormorepersons whohavegreater than 50
percent common ownership, directly orindirectly.
d) "SaleDate" means thefirst dayonwhichthereisabinding contract inwriting forthesale
ofaMaturity oftheBonds. TheSaleDate oftheBonds is ________________.
e) "Underwriter" means (i) anypersonthat agrees pursuant toawritten contract withthe
Issuer (orwiththeleadunderwriter toformanunderwriting syndicate) toparticipate intheinitialsale of
theBondstothePublic, and (ii) anyperson thatagrees pursuant toawritten contract directly orindirectly
withaperson described inclause (i) ofthisparagraph toparticipate intheinitial saleoftheBonds tothe
Public (including amember ofaselling group orapartytoaretaildistribution agreement participating in
theinitialsaleoftheBonds tothePublic).
Therepresentations setforth inthiscertificate arelimited tofactual matters only. Nothing inthis
certificate represents theRepresentative'sinterpretation ofanylaws, including specifically Sections 103
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and 148oftheInternal Revenue Code of1986, asamended, andtheTreasury Regulations thereunder. The
undersigned understands thattheforegoing information will berelied upon bytheIssuer with respect to
certain oftherepresentations setforthintheNonarbitrage Certificate and with respect tocompliance with
thefederal income taxrulesaffecting the Bonds, andbyTaft Stettinius & Hollister LLP, Bond Counsel, in
connection withrendering itsopinion thattheinterest ontheBonds isexcluded from gross income for
federal income taxpurposes, thepreparation oftheInternal Revenue Service Form8038-G, andother
federal income taxadvice thatitmaygive totheIssuer from timetotimerelating totheBonds.
Dated: September 8, 2022.
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