HomeMy WebLinkAbout6 - General Obligation Refunding Bonds of 1993
AGENDA:
REQUESTED BY :
SUBJECT MATTER:
DATE:
INTRODUCTION:
BACKGROUND:
6
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF RESOLUTION 93-04
AUTHORIZING $1,100,000 GENERAL OBLIGATION
REFUNDING BONDS OF 1993
JANUARY 19, 1993
The City has two additional outstanding bond
issues that are eligible for refunding. The
purpose for refinancing ~s threefold:
1. Achieve a lower net effective interest
rate.
2. Reduce debt service costs by attaining
lower interest payments.
3. Pass these savings along to the taxpayer
in the form of reduced future property
tax levies.
The method of accompliShing these objectives
is to be in the form of a negotiated bond sale
whereby Juran & Moody would ~urchase the bonds
outright at the council meet1ng at competitive
market rates as opposed to a public sale.
There are two ~rincipal reasons why such an
outright sale 1S in the City's best interest.
First, the issuance costs typically associated
with a public sale would eat up a significant
percentage of the potential savings. Second,
timing is very important to taking advantage
of the current market with respect to interest
rates.
The bond issues considered for refunding are
general obligation bonds initially refunded in
1976 and general obligation bonds issued in
1978 for the financin9 of Martinson Island
water and sewer utilit1es.
The above referenced issues were on the bubble
for consideration during the last round of
refundings conducted by the City in September
of last year. However, the interest rates have
fallen an additional 25 basis points since
then which makes it feasible at the present
time to undertake their refinancing.
Accordingly, Staff in concert with our fiscal
consultant Steve Mattson, prepared a refunding
analfsis to evaluate the merit of these
spec1fic issues.
4629 Dakota St. S.E" Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
DISCUSSION:
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ALTERNATIVES:
RECOMMENDATION:
ACTION REQUIRED:
A synopsis of these findings are outlined
below for Council information. It is important
to note that the rates utilized were
calculated as of 1/ll/93 and depending upon
the market one week from todar, interest rates
could either move off or 1mprove, thereby
affecting our yield.
The outstanding bond issues to be refinanced
are to be consolidated into a single current
refunding bond issue because the call date for
both have passed. The average coupon rates of
the old bonds is 6.18% while the coupon rate
for the new bonds is estimated to be 4.21%.
The result is an overall debt service
savings realized of $46,546.00.
As indicated, the combined remaining principal
balance of $1,075,000 shall be rolled into a
single non-callable issue in the amount of
$1,100,000.00. The increase difference is
necessary to pay expenses associated with the
refunding.
1. Approve Resolution 93-04 Authorizing the
Issuance of $1,100,000 General Obligation
Refunding Bonds of 1993.
2. Delay the refinancing until a future time
as determined by the council.
3. Deny approval of Resolution 93-04.
According to the national consensus, the
overall economy is experiencing a very slow
and moderate recovery. In view of this opinion
it would appear that interest rates will not
drift much lower and in all likelihood are at
or very near the bottom. Therefore, in lieu of
this market outlook, Staff would recommend
refunding of the aforementioned bond issues.
Motion to approve Resolution 93-04 Authorizing
the Issuance of $1,100,000 General Obligation
Refunding Bonds of 1993.
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
PRIOR LAKE, MINNESOTA.
HELD: January 19, 1993
Pursuant to due call and notice thereof, a special
meeting of the city Council of the City of Prior Lake, Scott
County, Minnesota, was duly called and held at the City Hall in
said City on Tuesday, the 19th day of January, 1993, at
o'clock _.M., for the purpose of authorizing the issuance of, and
awarding the sale of, $1,100,000 General Obligation Refunding
Bonds of 1993 of the city.
The following members were present:
and the following were absent:
Member
resolution and moved its adoption:
Resolution Number 93-
introduced the following
RESOLUTION PROVIDING FOR THE
ISSUANCE AND SALE OF
$1,100,000 GENERAL OBLIGATION
REFUNDING BONDS OF 1993, AND LEVYING
A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City of Prior Lake, Minnesota (the
"City"), has heretofore issued $2,370,000 General Obligation
Refunding Bonds of 1976, dated October 1, 1976 (the "1976 Prior
Bonds"), for the purpose of providing money in addition to other
available funds to advance refund outstanding General Obligation
Improvement Bonds of 1975, dated April 1, 1975 of the City, which
were issued for various improvements in the City (the "1976
Project"); and
B. WHEREAS, $515,000 in principal amount of the 1976
Prior Bonds which mature in the years 1994 and thereafter are
subject to redemption and prepayment at the option of the City on
April 1, 1993 at a price of par plus accrued interest, as
provided in the resolution of the City council, dated
232221
September 7, 1976, authorizing the issuance of the 1976 Prior
Bonds (the "1976 Prior Resolution"); and
C. WHEREAS, the City Council deems it desirable and in
the best interests of the City to call for redemption and
prepayment all of the 1976 Prior Bonds which mature on April 1,
1994 and thereafter on April 1, 1993 in accordance with the 1976
Prior Resolution in order to reduce the debt service costs to the
City; and
D. WHEREAS, the City has heretofore issued $2,025,000
General Obligation Improvement Bonds of 1978, Series A, dated
October 1, 1978 (the "1978 Prior Bonds"), for the purpose of
providing money for various improvements in the city (the "1978
project"); and
E. WHEREAS, $560,000 in principal amount of the 1978
Prior Bonds which mature in the years 1993 and thereafter are
subject to redemption and prepayment at the option of the City on
April 1, 1993 at a price of par plus accrued interest, as
provided in the resolution of the City Council, dated
September 25, 1978, authorizing the issuance of the 1978 Prior
Bonds (the "1978 Prior Resolution"); and
F. WHEREAS, the City Council deems it desirable and in
the best interests of the City to call for redemption and
prepayment all of the 1978 Prior Bonds which mature on October 1,
1993 and thereafter on April 1, 1993 in accordance with the 1978
Prior Resolution in order to reduce the debt service costs to the
City; and
G. WHEREAS, the 1976 Prior Bonds and the 1978 Prior
Bonds are hereinafter referred to collectively as the "Prior
Bonds"; the 1976 Project and the 1978 project are hereinafter
referred to collectively as the "Project"; and the 1976 Prior
Resolution and the 1978 Prior Resolution are hereinafter referred
to collectively as the "Prior Resolution"; and
H. WHEREAS, the City Council has heretofore determined
and declared that it is necessary and expedient to issue
$1,100,000 General Obligation Refunding Bonds of 1993 of the
City, pursuant to Minnesota Statutes, Chapter 475, to provide
funds to pay on April 1, 1993, all of the City'S Prior Bonds
which then remain outstanding (the "Refunding"); and
I. WHEREAS, no other obligations have been sold
pursuant to a private sale within the last twelve (12) calendar
months of the date hereof which when combined with this issue
would exceed the $1,200,000 limitation on negotiated sales as
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2
required by Minnesota statutes, section 475.60, Subdivision 2(2);
and
NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Prior Lake, Minnesota, as follows:
1. AcceDtance of Offer. The offer of Juran & Moody,
Inc. (the "Purchaser"), to purchase $1,100,000 General Obligation
Refunding Bonds of 1993 of the City (the "Bonds", or individually
a "Bond"), in accordance with the terms and at the rates of
interest hereinafter set forth, and to pay therefor the sum of
$1,078,440, plus interest accrued to settlement, is hereby
accepted.
2. Title:Oriainal Issue Date: Denominations:
Maturities. The Bonds shall be titled "General Obligation
Refunding Bonds of 1993", shall be dated March 1, 1993, as the
date of original issue and shall be issued forthwith on or after
such date as fully registered bonds. The Bonds shall be numbered
from R-1 upward in the denomination of $5,000 each or in any
integral multiple thereof of a single maturity. The Bonds shall
mature, without option of prepayment, on the first day in the
months, years and amounts as follows:
Month ~ Amount Month ~ Amount
October 1993 $100,000 October 1996 $ 85,000
April 1994 120,000 April 1997 120,000
October 1994 100,000 October 1997 80,000
April 1995 120,000 April 1998 50,000
October 1995 85,000 October 1998 120,000
April 1996 120,000
3. Puroose. The Bonds (together with other available
funds, if any, appropriated in paragraph 15 hereof) shall provide
funds to finance the Refunding. It is hereby found, determined
and declared that the Refunding is pursuant to Minnesota
Statutes, Section 475.67 and shall result in a reduction of debt
service cost to the city.
4. Interest. The Bonds shall bear interest payable
semiannually on April 1 and October 1 of each year (each, an
"Interest Payment Date"), commencing October 1, 1993, calculated
on the basis of a 360-day year of twelve 30-day months, at the
respective rates per annum set forth opposite the maturity years
as follows:
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3
Maturity Interest Maturity Interest
Year Rate Year Rate
1993 % 1996 %
1994 1997
1995 1998
5. No RedemDtion. The Bonds shall not be subject to
redemption and prepayment prior to their maturity.
6. Bond Reaistrar. Firstar Trust Company, in
Milwaukee, Wisconsin is appointed to act as bond registrar and
transfer agent with respect to the Bonds (the "Bond Registrar"),
and shall do so unless and until a successor Bond Registrar is
duly appointed, all pursuant to any contract the City and Bond
Registrar shall execute which is consistent herewith. The Bond
Registrar shall also serve as paying agent unless and until a
successor paying agent is duly appointed. Principal and interest
on the Bonds shall be paid to the registered holders (or record
holders) of the Bonds in the manner set forth in the form of Bond
and paragraph 12 of this resolution.
7. Form of Bond. The Bonds, together with the Bond
Registrar's certificate of Authentication, the form of Assignment
and the registration information thereon, shall be in
substantially the following form:
232221
4
UNITED STATES OF AMERICA
STATE OF MINNESOTA
SCOTT COUNTY
CITY OF PRIOR LAKE
R-
$
GENERAL OBLIGATION
REFUNDING BOND OF 1993
INTEREST
RATE
MATURITY
DATE
DATE OF
ORIGINAL ISSUE
CUSIP
MARCH 1, 1993
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Prior Lake, Scott County, Minnesota (the "Issuer"), certifies
that it is indebted and for value received promises to pay to the
registered owner specified above, or registered assigns, in the
manner hereinafter set forth, the principal amount specified
above, on the maturity date specified above, without option of
prepayment, and to pay interest thereon semiannually on April 1
and October 1 of each year (each, an "Interest Payment Date"),
commencing October 1, 1993, at the rate per annum specified above
(calculated on the basis of a 360-day year of twelve 30-day
months) until the principal sum is paid or has been provided for.
This Bond will bear interest from the most recent Interest
Payment Date to which interest has been paid or, if no interest
has been paid, from the date of original issue hereof. The
principal of and premium, if any, on this Bond are payable upon
presentation and surrender hereof at the principal office of
Firstar Trust Company, in Milwaukee, Wisconsin (the "Bond
Registrar"), acting as paying agent, or any successor paying
agent duly appointed by the Issuer. Interest on this Bond will
be paid on each Interest Payment Date by check or draft mailed to
the person in whose name this Bond is registered (the "Holder" or
"Bondholder") on the registration books of the Issuer maintained
by the Bond Registrar and at the address appearing thereon at the
close of business on the fifteenth day of the calendar month next
preceding such Interest Payment Date (the "Regular Record Date").
Any interest not so timely paid shall cease to be payable to the
person who is the Holder hereof as of the Regular Record Date,
and shall be payable to the person who is the Holder hereof at
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5
the close of business on a date (the "Special Record Date") fixed
by the Bond Registrar whenever money becomes available for
payment of the defaulted interest. Notice of the Special Record
Date shall be given to Bondholders not less than ten days prior
to the Special Record Date. The principal of and premium, if
any, and interest on this Bond are payable in lawful money of the
United States of America.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
IT IS HEREBY CERTIFIED AND RECITED that all acts,
conditions and things required by the Constitution and laws of
the State of Minnesota to be done, to happen and to be performed,
precedent to and in the issuance of this Bond, have been done,
have happened and have been performed, in regular and due form,
time and manner as required by law, and that this Bond, together
with all other debts of the Issuer outstanding on the date of
original issue hereof and the date of its issuance and delivery
to the original purchaser, does not exceed any constitutional or
statutory limitation of indebtedness.
IN WITNESS WHEREOF, the City of Prior Lake, Scott
County, Minnesota, by its City Council has caused this Bond to be
executed on its behalf by the facsimile signatures of its Mayor
and its Manager, the corporate seal of the Issuer having been
intentionally omitted as permitted by law.
232221
6
Date of Registration:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
FIRSTAR TRUST
COMPANY
Milwaukee, Wisconsin
Bond Registrar
By
Authorized Signature
232221
Registrable by: FIRSTAR
TRUST COMPANY
Payable at: FIRSTAR
TRUST COMPANY
CITY OF PRIOR LAKE,
SCOTT COUNTY, MINNESOTA
Isl Facsimile
Mayor
Isl Facsimile
Manager
7
ON REVERSE OF BOND
No RedemDtion. The Bonds of this issue (the "Bonds")
are not subject to redemption and prepayment prior to their
maturity.
Issuance: Purcose: General Obliaation. This Bond is
one of an issue in the total principal amount of $1,100,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate and denomination, which Bond has been
issued pursuant to and in full conformity with the Constitution
and laws of the state of Minnesota and pursuant to a resolution
adopted by the City Council of the Issuer on January 19, 1993
(the "Resolution"), for the purpose of providing money to redeem
on April 1, 1993, all of the outstanding: (i) General Obligation
Refunding Bonds of 1976, dated October 1, 1976: and (ii) General
Obligation Improvement Bonds of 1978, Series A, dated October 1,
1978 of the Issuer. This Bond is payable out of the General
Obligation Refunding Bonds of 1993 Fund of the Issuer. This Bond
constitutes a general obligation of the Issuer, and to provide
moneys for the prompt and full payment of its principal, premium,
if any, and interest when the same become due, the full faith and
credit and taxing powers of the Issuer have been and are hereby
irrevocably pledged.
Denominations: Exchanae: Resolution. The Bonds are
issuable solely as fully registered bonds in the denominations of
$5,000 and integral multiples thereof of a single maturity and
are exchangeable for fully registered Bonds of other authorized
denominations in equal aggregate principal amounts at the
principal office of the Bond Registrar, but only in the manner
and subject to the limitations provided in the Resolution.
Reference is hereby made to the Resolution for a description of
the rights and duties of the Bond Registrar. Copies of the
Resolution are on file in the principal office of the Bond
Registrar.
Transfer. This Bond is transferable by the Holder in
person or by his, her or its attorney duly authorized in writing
at the principal office of the Bond Registrar upon presentation
and surrender hereof to the Bond Registrar, all subject to the
terms and conditions provided in the Resolution and to reasonable
regulations of the Issuer contained in any agreement with the
Bond Registrar. Thereupon the Issuer shall execute and the Bond
Registrar shall authenticate and deliver, in exchange for this
Bond, one or more new fully registered Bonds in the name of the
transferee (but not registered in blank or to "bearer" or similar
designation), of an authorized denomination or denominations, in
232221
8
aggregate principal amount equal to the principal amount of this
Bond, of the same maturity and bearing interest at the same rate.
Fees upon Transfer or Loss. The Bond Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Bond and any legal or unusual costs regarding
transfers and lost Bonds.
Treatment of Registered Owners. The Issuer and Bond
Registrar may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided (except as otherwise provided on the
reverse side hereof with respect to the Record Date) and for all
other purposes, whether or not this Bond shall be overdue, and
neither the Issuer nor the Bond Registrar shall be affected by
notice to the contrary.
Authentication. This Bond shall not be valid or become
obligatory for any purpose or be entitled to any security unless
the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Qualified Tax-ExemDt Obliaation. This Bond has been
designated by the Issuer as "a "qualified tax-exempt Obligation"
for purposes of Section 265(b) (3) of the Internal Revenue Code of
1986, as amended.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this Bond, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM
TEN ENT
JT TEN
- as tenants in common
- as tenants by the entireties
- as joint tenants with right of
and not as tenants in common
as custodian for
survivorship
UTMA -
(CUst)
under the
(Minor)
Uniform
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
232221
9
ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the within Bond and does
hereby irrevocably constitute and appoint
attorney to transfer the Bond on the books kept for the
registration thereof, with full power of substitution in the
premises.
Dated:
Notice:
The assignor's signature to this
assignment must correspond with the
name as it appears upon the face of
the within Bond in every
particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other "Eligible Guarantor
Institution" as defined in 17 CFR 240.17 Ad-15 (a) (2).
The Bond Registrar will not effect transfer of this Bond
unless the information concerning the transferee requested below
is provided.
Name and Address:
(Include information for all joint owners
if the Bond is held by joint account.)
232221
10
8. Execution: TemDorary Bonds. The Bonds shall be
executed on behalf of the City by the signatures of its Mayor and
Manager and be sealed with the seal of the city; provided,
however, that the seal of the City may be a printed facsimile;
and provided further that both of such signatures may be printed
facsimiles and the corporate seal may be omitted on the Bonds as
permitted by law. In the event of disability or resignation or
other absence of either such officer, the Bonds may be signed by
the manual or facsimile signature of that officer who may act on
behalf of such absent or disabled officer. In case either such
officer whose signature or facsimile of whose signature shall
appear on the Bonds shall cease to be such officer before the
delivery of the Bonds, such signature or facsimile shall
nevertheless be valid and sufficient for all purposes, the same
as if he or she had remained in office until delivery. The City
may elect to deliver, in lieu of printed definitive bonds, one or
more typewritten temporary bonds in Substantially the form set
forth above, with such changes as may be necessary to reflect
more than one maturity in a single temporary bond. Such
temporary bonds may be executed with photocopied facsimile
signatures of the Mayor and Manager. Such temporary bonds shall,
upon the printing of the definitive bonds and the execution
thereof, be exchanged therefor and canceled.
9. Authentication. No Bond shall be valid or
Obligatory for any purpose or be entitled to any security or
benefit under this resolution unless a certificate of
Authentication on such Bond, substantially in the form
hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certificates of
Authentication on different Bonds need not be signed by the same
person. The Bond Registrar shall authenticate the signatures of
officers of the city on each Bond by execution of the Certificate
of Authentication on the Bond and by inserting as the date of
registration in the space provided the date on which the Bond is
authenticated, except that for purposes of delivering the
original Bonds to the Purchaser, the Bond Registrar shall insert
as a date of registration the date of original issue, which date
is March 1, 1993. The Certificate of Authentication so executed
on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
10. Registration; Transfer: Exchanae. The City will
cause to be kept at the principal office of the Bond Registrar a
bond register in which, subject to such reasonable regulations as
the Bond Registrar may prescribe, the Bond Registrar shall
provide for the registration of Bonds and the registration of
transfers of Bonds entitled to be registered or transferred as
herein provided.
232221
11
Upon surrender for transfer of any Bond at the
principal office of the Bond Registrar, the City shall execute
(if ,necessary), and the Bond Registrar shall authenticate, insert
the date of reqistration (as provided in paragraph 9) of, and
deliver, in the name of the designated transferee or transferees,
one or more new Bonds of any authorized denomination or
denominations of a like aggregate principal amount, having the
same stated maturity and interest rate, as requested by the
transferor: provided, however, that no Bond may be registered in
blank or in the name of "bearer" or similar designation.
At the option of the Holder, Bonds may be exchanged for
Bonds of any authorized denomination or denominations of a like
aggregate principal amount and stated maturity, upon surrender of
the Bonds to be exchanged at the principal office of the Bond
Registrar. Whenever any Bonds are so surrendered for exchange,
the City shall execute (if necessary), and the Bond Registrar
shall authenticate, insert the date of registration of, and
deliver the Bonds which the Holder making the exchange is
entitled to receive.
All Bonds surrendered upon any exchange or transfer
provided for in this resolution shall be promptly canceled by the
Bond Registrar and thereafter disposed of as directed by the
City.
All Bonds delivered in exchange for or upon transfer of
Bonds shall be valid general obligations of the City evidencing
the same debt, and entitled to the same benefits under this
resolution, as the Bonds surrendered for such exchange or
transfer.
Every Bond presented or surrendered for transfer or
exchange shall be duly endorsed or be accompanied by a written
instrument of transfer, in form satisfactory to the Bond
Registrar, duly executed by the Holder thereof or his, her or its
attorney duly authorized in writing.
The Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in connection with the transfer or exchange of any Bond and any
legal or unusual costs regarding transfers and lost Bonds.
Transfers shall also be subject to reasonable
regulations of the City contained in any agreement with the Bond
Registrar, including regulations which permit the Bond Registrar
to close its transfer books between record dates and payment
dates. The Manager is hereby authorized to negotiate and execute
the terms of said agreement.
232221
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11. Riahts UDon Transfer or Exchanae. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
other Bond shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
12. Interest Pavment: Record Date. Interest on any
Bond shall be paid on each Interest Payment Date by check or
draft mailed to the person in whose name the Bond is registered
(the "Holder") on the registration books of the City maintained
by the Bond Registrar and at the address appearing thereon at the
close of business on the fifteenth (15th) day of the calendar
month next preceding such Interest Payment Date (the "Regular
Record Date"). Any such interest not so timely paid shall cease
to be payable to the person who is the Holder thereof as of the
Regular Record Date, and shall be payable to the person who is
the Holder thereof at the close of business on a date (the
"special Record Date") fixed by the Bond Registrar whenever money
becomes available for payment of the defaulted interest. Notice
of the Special Record Date shall be given by the Bond Registrar
to the Holders not less than ten (10) days prior to the Special
Record Date.
13. Treatment of Registered Owner. The City and Bond
Registrar may treat the person in whose name any Bond is
registered as the owner of such Bond for the purpose of receiving
payment of principal of and premium, if any, and interest
(subject to the payment provisions in paragraph 12 above) on,
such Bond and for all other purposes whatsoever whether or not
such Bond shall be overdue, and neither the City nor the Bond
Registrar shall be affected by notice to the contrary.
14. Delivery: ADDlication of Proceeds. The Bonds when
so prepared and executed shall be delivered by the Finance
Director to the Purchaser upon receipt of the purchase price, and
the Purchaser shall not be obliged to see to the proper
application thereof.
15. Fund and Accounts.
(a) $ of the proceeds of the Bonds shall be
deposited in the Debt Service Fund of the General Obligation
Refunding Bonds of 1976 Account (the "1976 Redemption Fund")
heretofore created by the 1976 Prior Resolution for the 1976
Prior Bonds, which amount, together with all other funds held
therein, is sufficient to prepay the outstanding 1976 Prior Bonds
on April 1, 1993.
(b) $ of the proceeds of the Bonds shall be
deposited in the Debt Service Fund of the General Obligation
232221
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Improvement Bonds of 1978 Account (the "1978 Redemption Fund")
heretofore created by the 1978 Prior Resolution for the 1978
Prior Bonds, which amount, together with all other funds held
therein, is sufficient to prepay the outstanding 1978 Prior Bonds
on April 1, 1993.
(c) There is hereby created a special fund to be
designated the "General Obligation Refunding Bonds of 1993 Fund"
(the "Fund") to be administered and maintained by the Finance
Director as a bookkeeping account separate and apart from all
other Funds maintained in the official financial records of the
city. The Fund shall be maintained in the manner herein
specified until all of the Bonds and the interest thereon have
been fully paid. There shall be maintained in the Fund two (2)
separate accounts, to be designated the "Payment Account" and
"Debt Service Account", respectively.
(i) pavment Account. There shall be deposited in the
Payment Account $ of the remaining proceeds of the
Bonds from which a portion of the costs of issuing the Bonds
shall be paid. Monies in the Payment Account shall be used
to pay a portion of the costs of issuing the Bonds. Any
monies remaining in the Payment Account after all costs of
issuance have been paid or provided for shall be transferred
to the Debt Service Account for the Bonds.
(ii) Debt Service Account. There are hereby
irrevocably appropriated and pledged to, and there shall be
credited to, the Debt service Account: (a) all uncollected
special assessments pledged to the payment of the Prior
Bonds; (b) all accrued interest received upon delivery of
the Bonds; (c) any collections of all taxes herein or
hereafter levied for the payment of the Bonds and interest
thereon; (d) any collections of all taxes heretofore levied
for the payment of the 1976 Prior Bonds and interest thereon
which are not needed to pay the 1976 Prior Bonds as a result
of the Refunding; (e) all funds remaining in the Payment
Account after all costs of issuing the Bonds have been paid;
(f) any funds remaining on deposit in the 1976 Redemption
Fund established for the 1976 Prior Bonds and in the 1978
Redemption Fund established for the 1978 Prior Bonds after
the same have been paid and discharged; (g) all investment
earnings on funds held in the Debt Service Account; and (h)
any and all other moneys which are properly available and
are appropriated by the governing body of the City to the
Debt Service Account. The Debt Service Account shall be
used solely to pay the principal and interest and any
premiums for redemption of the Bonds and any other general
232221
14
obligation bonds of the city hereafter issued by the City
and made payable from said account as provided by law.
No portion of the proceeds of the Bonds shall be used
directly or indirectly to acquire higher yielding investments or
to replace funds which were used directly or indirectly to
acquire higher yielding investments, except (1) for a reasonable
temporary period until such proceeds are needed for the purpose
for which the Bonds were issued and (2) in addition to the above
in an amount not greater than the lesser of five percent (5%) of
the proceeds of the Bonds or $100,000. To this effect, any
proceeds of the Bonds and any sums from time to time held in the
Payment Account or Debt Service Account (or any other City
account which will be used to pay principal or interest to become
due on the bonds payable therefrom) in excess of amounts which
under then-applicable federal arbitrage regulations may be
invested without regard to yield shall not be invested at a yield
in excess of the applicable yield restrictions imposed by said
arbitrage regulations on such investments after taking into
account any applicable "temporary periods" or "minor portion"
made available under the federal arbitrage regulations. Money in
the Fund shall not be invested in obligations or deposits issued
by, guaranteed by or insured by the United states or any agency
or instrumentality thereof if and to the extent that such
investment would cause the Bonds to be "federally guaranteed"
within the meaning of Section 149(b) of the Internal Revenue Code
of 1986, as amended (the "Code").
16. special Assessments. The City has heretofore
levied special assessments pursuant to the Prior Resolution,
which assessments were pledged to the payment of the principal
and interest on the Prior Bonds and all uncollected special
assessments are now pledged to the payment of principal and
interest on the Bonds herein authorized. Said assessments were
levied as provided below, payable in equal, consecutive, annual
installments, including principal and interest with general taxes
for the years shown below at the rate shown opposite such years.
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Improvement
Desiqnation
Amount
Rate
Levv Years
Sanitary Sewer
and Water systems,
storm sewer
drainage and
widening, upgrading
& surfacing of all
streets
$
8.00%
(for both)
1992-1997
(for both)
Sanitary sewer
extensions, water
main extensions, storm
sewer and street
improvements
TOTAL:
$
17. Tax Levv: Coveraqe Test: Cancellation of Certain
Tax Levies. To provide moneys for payment of the principal and
interest on the Bonds there is hereby levied upon all of the
taxable property in the City a direct annual ad valorem tax which
shall be spread upon the tax rolls and collected with and as part
of other general property taxes in the City for the years and in
the amounts as follows:
Year of Tax Year of Tax
Levy Collection Amount
1992 1993 $
1993 1994
1994 1995
1995 1996
1996 1997
The tax levies are such that if collected in full they,
together with estimated collections of special assessments and
other revenues herein pledged for the payment of the Bonds, will
produce at least five percent (5%) in excess of the amount needed
to meet when due the principal and interest payments on the
Bonds. The tax levies shall be irreparable so long as any of the
Bonds are outstanding and unpaid, provided that the City reserves
the right and power to reduce the levies in the manner and to the
extent permitted by Minnesota Statutes, Section 475.61,
Subdivision 3.
Upon payment of the 1976 Prior Bonds, the uncollected
taxes pledged in paragraph 12 of the 1976 Prior Resolution
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authorizing the issuance of the 1976 Prior Bonds, in the years
1993 through 1998 for collection in 1994 through 1999 shall be
canceled.
18. Defeasance. When all Bonds have been discharged
as provided in this paragraph, all pledges, covenants and other
rights granted by this resolution to the registered holders of
the Bonds shall cease. The city may discharge its obligations
with respect to any Bonds which are due on any date by
irrevocably depositing with the Bond Registrar on or before that
date a sum sufficient for the payment thereof in full~ or if any
Bond should not be paid when due, it may nevertheless be
discharged by depositing with the Bond Registrar a sum sufficient
for the payment thereof in full with interest accrued to the date
of such deposit. The City may also at any time discharge its
obligations with respect to any Bonds, subject to the provisions
of law now or hereafter authorizing and regulating such action,
by depositing irrevocably in escrow, with a suitable banking
institution qualified by law as an escrow agent for this purpose,
cash or securities described in Minnesota statutes, section
475.67, Subdivision 8, bearing interest payable at such times and
at such rates and maturing on such dates as shall be required,
subject to sale and/or reinvestment, to pay all amounts to become
due thereon to maturity.
19. .General Obliaation Pledae. For the prompt and
full payment of the principal and interest on the Bonds, as the
same respectively become due, the full faith, credit and taxing
powers of the City shall be and are hereby irrevocably pledged.
If the balance in the Debt Service Account is ever insufficient
to pay all principal and interest then due on the Bonds and any
other bonds payable therefrom, the deficiency shall be promptly
paid out of any other funds of the City which are available for
such purpose, and such other funds may be reimbursed with or
without interest from the Debt Service Account when a sufficient
balance is available therein.
20. Notice of Call for RedemDtion.
A. 1976 Prior Bonds. The Manager is hereby
authorized and directed to cause notice of redemption to be
published in Northwestern Financial Review prior to April 1,
1993, and to give mailed notice of redemption prior to said
redemption date to Norwest Bank Minnesota, National Association
(formerly, Northwestern National Bank of Minneapolis), in
Minneapolis, Minnesota, the paying agent for the 1976 Prior
Bonds, and to all holders of the 1976 Prior Bonds, if any, who
have registered their names, addresses and serial numbers with
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the City Manager. Said notice shall be in substantially the form
attached hereto as Exhibit A.
B. 1978 Prior Bonds. The Manager is hereby
authorized and directed to cause notice of redemption to be
published in Northwestern Financial Review prior to April 1,
1993, and to give mailed notice of redemption prior to said
redemption date to Norwest Bank Minnesota, National Association
(formerly, Northwestern National Bank of Minneapolis), in
Minneapolis, Minnesota, the paying agent for the 1978 Prior
Bonds, and to all holders of the 1978 Prior Bonds, if any, who
have registered their names, addresses and serial numbers with
the City Manager. Said notice shall be in substantially the form
attached hereto as Exhibit B.
21. Prior Bonds: Security. until retirement of the
Prior Bonds, all provisions theretofore made for the security
thereof shall be observed by the City and all of its officers and
agents.
22. Certificate of Reqistration. The Manager is
hereby directed to file a certified copy of this resolution with
the County Auditor of Scott County, Minnesota, together with such
other information as he or she shall require, and to obtain the
County Auditor's certificate that the Bonds have been entered in
the County Auditor's Bond Register, that the tax levy for the
1976 Prior Bonds has been canceled, and that the tax levy
required by law for the Bonds has been made.
23. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Purchaser, and to the attorneys approving the legality of the
issuance of the Bonds, certified copies of all proceedings and
records of the City relating to the Bonds and to the financial
condition and affairs of the City, and such other affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Bonds as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
furnished, shall be deemed representations of the City as to the
facts recited therein.
24. Neqative Covenant as to Use of Proceeds and
Proiect. The City hereby covenants not to use the proceeds of
the Bonds or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangements for the
cost of the Project, in such a manner as to cause the Bonds to be
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"private activity bonds" within the meaning of Sections 103 and
141 through 150 of the Code.
25. Tax-ExemDt Status of the Bonds; Rebate. The City
shall comply with requirements necessary under the Code to
establish and maintain the exclusion from gross income under
section 103 of the Code of the interest on the Bonds, including
without limitation (1) requirements relating to temporary periods
for investments, (2) limitations on amounts invested at a yield
greater than the yield on the Bonds, and (3) the rebate of excess
investment earnings to the United states if the Bonds (together
with other obligations reasonably expected to be issued and
outstanding at one time in this calendar year) exceed the
small-issuer exception amount of $5,000,000.
For purposes of qualifying for the exception to the
federal arbitrage rebate requirements for governmental units
issuing $5,000,000 or less of bonds, the City hereby finds,
determines and declares that (1) the Bonds are issued by a
governmental unit with general taxing powers, (2) no Bond is a
private activity bond, (3) ninety-five percent (95%) or more of
the net proceeds of the Bonds are to be used for local
governmental activities of the City (or of a governmental unit
the jurisdiction of which is entirely within the jurisdiction of
the City), and (4) the aggregate face amount of all tax-exempt
bonds (other than private activity bonds) issued by the City (and
all subordinate entities thereof, and all entities treated as one
issuer with the City) during the calendar year in which the Bonds
are issued and outstanding at one time is not reasonably expected
to exceed $5,000,000, all within the meaning of Section
148(f) (4) (D) of the Code.
Furthermore:
(i) there shall not be taken into account for
purposes of said $5,000,000 limit any bond issued to
refund (other than to advance refund) any bond to the
extent the amount of the refunding bond does not exceed
the outstanding amount of the refunded bond;
(ii) the aggregate face amount of the Bonds does
not exceed $5,000,000;
(iii) each of the Prior Bonds was issued as part
of an issue which was treated as meeting the rebate
requirements by reason of the exception for
governmental units issuing $5,000,000 or less of bonds;
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(iv) the average maturity of the Bonds does not
exceed the average maturity of the Prior Bonds; and
(v) no part of the Bonds has a maturity date
which is later than the date which is thirty (30) years
after the dates the Prior Bonds were issued.
26. Desiqnation of Qualified Tax-ExemDt Obliqations;
Issuance Limit. In order to qualify the Bonds as "qualified
tax-exempt obligations" within the meaning of section 265(b) (3)
of the Code, the City hereby makes the following factual
statements and representations:
(a) the Bonds are issued after August 7, 1986;
(b) the Bonds are not "private activity bonds" as
defined in section 141 of the Code;
(c) the City hereby designates the Bonds as
"qualified tax-exempt obligations" for purposes of
section 265(b) (3) of the Code;
(d) the reasonably anticipated amount of
tax-exempt obligations (other than private activity
bonds, treating qualified 501(c) (3) bonds as not being
private activity bonds) which will be issued by the
City (and all entities treated as one issuer with the
City, and all subordinate entities whose obligations
are treated as issued by the City) during this calendar
year 1993 will not exceed $10,000,000;
(e) not more than $10,000,000 of obligations
issued by the City during this calendar year 1993 have
been designated for purposes of Section 265(b) (3) of
the Code;
(f) the aggregate face amount of the Bonds does
not exceed $10,000,000; and
(g) the Bonds are issued to refund, and not to
"advance refund" the Prior Bonds within the meaning of
Section 149(d) (5) of the Code, and shall not be taken
into account under the $10,000,000 issuance limit to
the extent the Bonds do not exceed the outstanding
amount of the Prior Bonds.
The City shall use its best efforts to comply with any federal
procedural requirements which may apply in order to effectuate
the designation made by this paragraph.
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27. Severability. If any section, paragraph or
prov1s10n of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
28. Headinas. Headings in this resolution are
included for convenience of reference only and are not a part
hereof, and shall not limit or define the meaning of any
provision hereof.
The motion for the adoption
was duly seconded by member
discussion thereof and upon a vote
following voted in favor thereof:
of the foregoing resolution
and, after a full
being taken thereon, the
and the following voted against the same:
Whereupon said resolution was declared duly passed and
adopted.
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STATE OF MINNESOTA
COUNTY OF SCOTT
CITY OF PRIOR LAKE
I, the undersigned, being the duly qualified and acting
Manager of the City of Prior Lake, Minnesota, DO HEREBY CERTIFY
that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that
the same is a full, true and complete transcript of the minutes
of a meeting of the City Council of said City, duly called and
held on the date therein indicated, insofar as such minutes
relate to authorizing the issuance of, and awarding the sale of,
$1,100,000 General Obligation Refunding Bonds of 1993 of said
City.
WITNESS my hand and the seal of said City this 19th day
of January, 1993.
Manager
(SEAL)
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EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
GENERAL OBLIGATION REFUNDING BONDS OF 1976
CITY OF PRIOR LAKE,
SCOTT COUNTY, MINNESOTA
NOTICE IS HEREBY GIVEN that by order of the City Council of the
City of Prior Lake, Scott County, Minnesota, there have been
called for redemption and prepayment on
April 1, 1993
those outstanding bonds of the City designated as General
Obligation Refunding Bonds of 1976, dated October 1, 1976,
bearing serial numbers 372 through 474, having stated maturity
dates in the years 1994 through 1998, and totalling $515,000 in
principal amount. The bonds are being called at a price of par
plus accrued interest to April 1, 1993, on which date all
interest on said bonds will cease to accrue. Holders of the
bonds hereby called for redemption are requested to present their
bonds for payment, with subsequently maturing interest coupons
attached, at Norwest Bank Minnesota, National Association
(formerly, Northwestern National Bank of Minneapolis), if by mail
to: Corporate Trust Operations, 255 Second Avenue South: or if in
person to: TELLERS 1-8, 6th and Marquette Avenue, in Minneapolis,
Minnesota 55479-0113, on or before April 1, 1993.
Dated: January 19, 1993.
BY ORDER OF THE CITY COUNCIL
Isl David Unmacht
Manager
Important Notice: Under the Interest and Dividend Compliance Act
of 1983, 31% will be withheld if tax identification is not
properly certified.
Additional information
may be obtained from:
JURAN & MOODY, INC.
Minnesota Mutual Life Building
400 North Robert Street
suite 800
st. Paul, Minnesota 55101-2091
Telephone No.: (612) 224-l500
Attn.: Lori A. Giampaolo
Public Finance Department
232221
EXHIBIT B
NOTICE OF CALL FOR REDEMPTION
GENERAL OBLIGATION IMPROVEMENT BONDS OF 1978, SERIES A
CITY OF PRIOR LAKE,
SCOTT COUNTY, MINNESOTA
NOTICE IS HEREBY GIVEN that by order of the City Council of the
City of Prior Lake, Scott County, Minnesota, there have been
called for redemption and prepayment on
April 1, 1993
those outstanding bonds of the City designated as General
Obligation Improvement Bonds of 1978, Series A, dated October 1,
1978, bearing serial numbers 294 through 405, having stated
maturity dates in the years 1993 through 1999, and totalling
$560,000 in principal amount. The bonds are being called at a
price of par plus accrued interest to April 1, 1993, on which
date all interest on said bonds will cease to accrue. Holders of
the bonds hereby called for redemption are requested to present
their bonds for payment, with subsequently maturing interest
coupons attached, at Norwest. Bank Minnesota, National Association
(formerly, Northwestern National Bank of Minneapolis), if by mail
to: Corporate Trust Operations, 255 Second Avenue South; or if in
person to: TELLERS 1-8, 6th and Marquette Avenue, in Minneapolis,
Minnesota 55479-0113, on or before April 1, 1993.
Dated: January 19, 1993.
BY ORDER OF THE CITY COUNCIL
Isl David Unmacht
Manager
Important Notioe: Under the Interest and Dividend Compliance Act
of 1983, 31% will be withheld if tax identification is not
properly certified.
Additional information
may be obtained from:
JURAN & MOODY, INC.
Minnesota Mutual Life Building
400 North Robert Street
suite 800
st. Paul, Minnesota 55101-2091
Telephone No.: (612) 224-1500
Attn.: Lori A. Giampaolo
Public Finance Department
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