HomeMy WebLinkAbout8B - Resolution 99-110 - Issuance of $1,025,000 in General Obligation Improvement Bonds
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MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
INTRODUCTION:
BACKGROUND:
DISCUSSION:
ALTERNATIVES:
STAFF AGENDA REPORT
OCTOBER 18,1999
8B
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF RESOLUTION 99-XX
AUTHORIZING ISSUANCE OF $1,025,000 GENERAL
OBLIGATION IMPROVEMENT BONDS OF 1999
The City's bond and fiscal consultant Steve Mattson from Juran &
Moody will present to the Council a resolution formally authorizing
the issuance of$1,025,000 in general obligation improvement bonds
to finance the City's 1999 improvement projects which include
Candy Cove street reconstruction, North Shore Oaks 1st Addition
sewer and water installation and our cooperative share for the
upgrade ofCSAH 42 between McKenna Road and CSAH 83.
On September 20, 1999 the City Council approved Resolution 99-99
which allowed for a negotiated bond sale which would attempt to
time the market in an effort to obtain the optimum interest rate on
these bonds.
Since that time Juran & Moody has pre-sold the bonds at an even
more favorable rate than was initially projected. The bonds were
sold at a net effective interest rate of 4.982% which is almost a ~%
lower than under the original market conditions which was
estimated at 5.23% in the 9/20/99 agenda report. This will result in
annual tax savings to the public of $1,000 as the projected tax levy
will be reduced from $83,000 each year to $82,000 for a total
savings of$10,000.00 to the Prior Lake tax payers.
Steve Mattson will present additional information illustrating the
course of interest rates from 8/1/99 up until 10/13/99 to the Council
along with the approving resolution.
The following alternatives are available to the City Council:
1. Consider approval of Resolution 99-xx Authorizing Issuance of
$1,025,000 General Obligation Improvements Bonds of 1999.
2. Reject the bond resolution for a specific reason as determined by
the City Council.
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
H:\BONDSIA99SALE.DOC
RECOMMENDATION: Staff would recommend that the City Council approve Resolution
99-xx Authorizing the Issuance of $1,025,000 General Obligation
Improvements Bonds of 1999.
ACTION REQUIRED:
Motion and second to a
Issuance of $1,025,000
1999~
prove Resolution 99-xx Authorizing the
neral Obligation Improvements Bonds of
REVIEWED BY:
Attachments:
1. Resolutio 99-XX Authorizing Issuance of $1,025,000 General
Obligation Improvements Bonds of 1999.
2. Juran & Moody Final Bond Analysis
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
RESOLUTION 99-99
RESOLUTION AUTHORIZING NEGOTIATED SALE
OF $1,025,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 1999
MOTION BY: Kedrowski
SECOND BY: Petersen
The City of Prior Lake has conducted the appropriate public hearings to consider
comments regarding those public improvement projects deemed necessary for
construction in 1999; and
The City Council has determined that such construction projects scheduled for 1999
are consistent with the City's Capital Improvement Plan (CIP); and
The City of Prior Lake has complied with all requirements of Chapter 429 of
Minnesota State Statutes with respect to special assessment improvement projects;
and
The City of Prior Lake has awarded the construction bids for Project 99-11 Candy
Cove/Lakeside Manor for street reconstruction and for Project 99-13 North Shore
Oaks 1 st Addition for the installation of sewer and water; and
It is necessary to issue general obligation bonds for the purpose of financing these
construction improvements and the city's cooperative share for the 4 lane divided
highway upgrade improvements for CSAH 42 between McKenna Road and CSAH
83.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that it has
determined it is in the best interest of the City of Prior Lake to enter into a negotiated sale with Juran &
Moody, in an effort to obtain the lowest interest rate possible, for the issuance of $1,025,000 of general
obligation improvement bonds.
Passed and adopted this 20th day of September, 1999.
{Seal}
YES NO
Mader X Mader
Kedrowski X Kedrowski
Petersen X Petersen
Schenck X Schenck
Wuellner X Wuellner
16200 Eagle Creek Ave. S.E.. Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN FQI'AI Ol'('()lnllNITY 1'.11'( (lyrE
RICOLlNCI LIR ESOLLlTIIFINA R ESIW.99.99. DOC
'\PPLIC'\TJOl"OFF1~1)S fESTL\UTEDCOSTSI
19~ CO:-';STIWCfJON PROJELlS
ADD: ESn~IATED E.'1GI~'EERL'\'G (15%)
ESTIMATED AD~n~lSlR\TION (.1.25%)
ESn~H.TED FINANCING (3.25%)
LESS: MlJl'o.lClPAL STATE AID
TRUNK RESERVE R:;-"'1) CO~TR.
GRAND TOTAL IL"-RD COSTS
ADD: (SOI'T COSTS, IM..'LFDEO IN .-\DOVE)
EST1~t\TED LEGAL OPl!\10N
ES'1'I~IA'ln) B01\'D PRINTING; Pl:BUCAnO:\S
ESTl~IATED REGISTR.\TION (1 TIME.. BOOK ENTRY)
C.WrI'AL INTEREST (0 ~IOr-;rHS)
ESTIH\TED FISCAL FEE
E STI~t\TED BO:-'1) R...\ TIl"G FEE
EST. DISCOlJNI' FACfOR (1.60% OF P.\R)
ROl:]\UL'\'G E-\CTuR
TOT.\L SOFI' COSTS OF ISSUANCE
SUBTOTAL
ROL'~1)ED FOR ISSL'.-\..."\CE
956.205.00
] 16,500.00
32,350.00
29.160.00
0.00
(109,215.00)
3,500.00
0.00
2.225.00
0.00
0.00
5.500.00
16..JOO.00
1.535.00
29.160.00
],025,000.00
1.025.000.00
S 1.025.000.00
CITY OF PRIOR LAKE. 1\U1'.'NE50T'\
GENERAL OBLIGATION IMPROVEME1'.T BO!\l)S OF ]999
PAR AMOUNT: $1,025,000
YEAR AMOL'l\'T
]999
2000 $75.000
2001 100,000
2002 ]00.000
2003 100,000
20O-t 100,000
2005 ]00.000
2006 ]00.000
2007 ]00,000
2008 ]25.000
2009 125.000
2010 0
2011 0
20]2 0
20]3 0
2014 0
2015 0
2016 0
2017 0
2018 0
2019 0
TOTAL~ $1.025.000
BONDS DATED:
BONDS 1\1A TURE:
INTEREST:
0171'I0N:
PL'RCHASE PRICE:
EST. A VER.\GE COl iPON R\ TE:
EST. !\'ET EH'ECJ1\'E RATE:
PAYING AGE!\T &
REGISTR\R:
BO/'\1) SALE DATE:
BOl'.'D SALE PL\CE:
EST. BO:'ID CI..OSI!'o:G DATE:
FI\'AL A\'ALYSIS
OCTOBER I. 1999
DECEMBER I. 2oooTIIROl.!G1I2009
n;:-';E I. 2000 AND SE~ U.-\..."\l\ 1 '.-\I..L.Y TlIERI:.-\I'TER 0:\ EAC1I
JU:\E 1 Al\U DECBIBER I.
AU. BO:-'1)S ~1.-\TL'RIN(i IN TIlE YE.-\RS 2006 '1'IIROIX,112009. ARE
CALL\BLE AT TilE 01'110:\ OF TilE CITY ON J)ECE~lIJER I. 2005
OR A:-''Y PA Y ~ IE:-."I' D.\ TE T1 n:REAI'TER AT PAR.
SI.008.6oo.oo
4.6602%
4.92112%
CITY OF PRIOR LAKE
(X~roBER 18. 1999
HREII.-\I..1..
OC('()BER 211. 1999
DATE OF A"'ALYSIS:
DATED DATE OF BOSD ISSUE
I FILE: PIlIOR LAKE U, 99F
OcI~13-1999
OCI-1-1999
Nome of Issuer cln' OF P RIO R I.AKE, MINl'i ESOTA
Type of Bond GEl'iERAI. OBLIGATION UIPRO\'BIENT BONDS OF 1999
PAR AMOUI'IT SI.02.S.000.00
(21)
YEAR PRINCIPAL
1999
2000
2001
2002
2003
ZOO4
2005
~006
200-:
2tx)g
200':1
2010
2011
2012
2013
2OJ",
2015
201b
201 (
201M
2019
ANAL
II'ITEREST
RATES INTEREST
TAX
LEVY
TOTAL STATUATORY
DEBT COVERAGE
SERVICE ,g 105.00%
CAPITALIZED ASSESSMEI'ITS
Il'oo'TEREST ASSESSME."IT II'ITEREST @ ASSESSMEI'IT
o MONTHS PRINCIPAL 8.00% INCOME
$000
$75,000 00 4 00'li 53958.33 128,95833 135,406 25 $.38.300 00 $38,300.00 $76,600.00 82,00000
100, (XX) 00 410% 43,250 00 14325000 15041250 38,300 00 27.576.00 65,87600 82,00000
100.000 00 420% 39,15000 139,150.00 1-16,10'750 38,30000 24,51200 62,812.00 82.00000
100,000 00 430% 34,95000 134,95000 141.69"50 38.30000 21,+1800 59.748.00 82.00000
100,000 00 445% 30,650 00 130,65000 137.18250 38.300 00 18.38400 56,684.00 82.000 00
100,00000 455% 26,20000 126,20000 132,510 00 38,300 00 15.32000 53.62000 82,00000
100,00000 465% 21,65000 121.650 00 lYi,73250 38,300 00 12,256.00 50.55600 82,00000
100 OlX100 4 "5% 17,000 00 117,000 00 122,850 00 38.300 00 9,192.00 47.49200 82,000 00
125,000 00 485% 12,250 00 137,250 00 144,11250 38,300~00 6,128.00 44.428.00 82.000 00
125.00000 4~ 95% 6,1l!" 50 131.18750 137,7-16.88 38.300 00 3,~00 41.3<>100 82.00000
000 0.00% 000 0.00 000 0.00 0,00 0.00 0.00
000 000% 000 000 000 0.00 000 0,00 0,00
000 000% 000 000 000 0,00 0,00 000 0.00
000 o 00'li 000 000 000 0,00 000 000 000
000 000% 0,00 000 000 000 0,00 0.00 000
000 0.00% 000 000 000 000 000 0,00 000
000 0, 00'li 000 000 000 0,00 0,00 000 0,00
000 000% 000 000 000 0.00 000 000 000
000 000% 0,00 000 000 000 0,00 000 0,00
0.00 000% 000 000 000 0.00 000 000 000
1.02500000 285,245 !B 1.310,2458.> 1.375,75813 000 38.>,00000 176.18000 559.1~100 5820,000.00
(~ ) (. ) (.) (.)
AMOUl'oo"'T OF ADDITIONALASSESSME:o.'TS $38.>,000 00
PERCENTAGE OF ISSL'E ASSESSED 37.37% PREPARED BY:
INTEREST RA TE 0'" ASSESS:o.1E!'oo'TS 8,00% r rrVJ: JURAN & MOODY
FIRST INSTALUfEl'oo'T cOLLELf10N 1999 STI:.",\'EN J. MATtSON ".P.
'~v
. OF ANNUAL 1NST ALLME:o.'TS 10 L"J~~.; 6110291.3034
5T ART DATE OF ASSES5:o.IENTS IO'J."ill 806-950.4666
F1:\'AL ~"AL YSIS
RESIDI~'\TlAL HO:o.IESTEAD
ANNUAL TAX ~IARKI'f VALUE
AN:\liAL TAX C\PACITY CAPACITY $85 000 5110,000 $125,000 $150.000
SURPLUS cU:o.lULA TIVE \' ALliE INCR RATE :\Fr TAX CAPAClTY
iDH1Crr BALANCE 200% II\CREASE $935 513Y8 $1.7 50 $2,250
$000 $000 9.907,620
23.193.75 23.193"5 10, I 05, 7"2 O~I% ~' 5'-' 511 32 51418 S1821
(2536 50) :W.65725 IOJ(J7,8!l7 Ob'Q(;[ ".jjj II 18 1400 1800
(I ,195 50) 19,36175 10,514,045 0"8'1 7~9 1090 U 65 1'755
50.$0 19.41225 IO,-~-t.326 0...6'1 ~ II 1062 LHO 1710
1,50150 20.,913 "5 10,9.18.813 0"5'1 7.01 1049 UIJ 1688
3,11000 14,021"5 11.157,589 0"'3% 68.1 10 ~I 1~78 1643
4.82150 :!H,K.P 25 11,380,741 o :2(:~ 6 ...) 100" 1~60 1620
(i(~:! 00 J5.4IN 25 IJ.6(~_i.')() 0-1 C, h(H ,) '/i 1:!4i IS 98
(I7,6~ 50) I" 804"5 1184ll.52.1 Db':!'il h-tS <)b5 1208 1553
(I4J8288) 342187 12,On.HI OoH<;j 6J6 '.I 51 11.90 1530
0.00 3.421 87 12.318,880 OOOr:'i, 000 000 0.00 000
000 3.4~1 87 12.565,2Sll o (Xy" 000 000 000 000
000 3.421 87 I ~.816,56.J O(X)<;( 000 GW 000 GOO
000 3.421 8" 130"2,894 o 00'1 000 000 000 000
000 3.42187 LU34,J5~ 000'" 000 OW 000 0.00
000 3.42187 13.601039 OOO~ 000 000 000 000
000 342187 IJ.8"J060 OOO~( OOll GOO 000 000
000 j.-t2Ilr 14.150.521 000';. OlXl 000 000 000
000 3.42187 14.4.13,5.11 o OO"i 000 000 000 O()(J
000 3421 R7 l.l"7:!2,202 o eO', 000 000 000 000
$342187 A VG ASNt'AL l:o>cR $695 510 J~ 51J 01 SI6::!
MO:o.TIILY ISCR. 5058 5Ul!" 51 Cti 51.19
F"ROM
1999.10-12
23:09
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EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
PRIOR LAKE, MI~~ESOTA
HELD: October 18, 1999
Pursuant to due call and notice thereof, a regular
meeting of the City Council of the City of Prior Lake, Scott
County, Minnesota, was duly held at the Fire Hall in said Citv on
Monday, the 18th day of October, 1999, at 1JKL o'clock ~.M., for
the purpose, in part, of authorizing the issuance of, and
awarding the sale of, $1,025,000 General Obligation Improvement
Bonds of 1999 of the City.
The following members were present:
Made.r, Kedrowski, Pe.te,~en I Wuellner I SchencK
and the following were absent: None.
.Member Ked(ows~ introduced the following resolution
and moved its adoption:
Resolution Number 99-(10
RESOLUTION P~TIFYING ACCEPTANCE OF OFFER
AND PROVIDING FOR ISSUANCE
OF $1,025,000 GENERAL OBLIGATION
IMPROVEMENT BONDS OF 1999, AND
LEVYING A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City Council of the City of Prior
Lake, Minnesota (the ~City"), has heretofore determined and
declared that it is necessary and expedient to issue $1,025,000
General Obligation Improvement Bonds of 1999 (the "Bonds~) of the
Citv, nursuant to Minnesota Statutes, Chanters 429 and 475, to
fi~~nc~ the construction 0: various impro~ements in the City (the
"Improvements"); and
3. WHEREAS, the Improvements and all their components
have been ordered prior to the date hereof, after a hearing
thereon for which notice was given describing the Improvements or
all their components by general nature, estimated cost, and area
to be assessed; and
C. WHEREAS, on September 28, 1999, the Mayor and
Manager 0: the City accepted on behalf of the City the offer of
Juran & t-1oody (" Juran ") to purchase Bonds; and
l0627~O.1
D. 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
required by Minnesota Statutes, Section 475.60, subdivision 2(2);
and
E. WHEREAS, it is in the best interests of the City
that the Bonds be issued in book-entry form as hereinafter
provided; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Prior Lake, Minnesota, as follows:
1. Ratification of Acceptance of Offer. All prior
actions taken by the Mayor and Manager with respect to accepting
the offer of Juran (the "Purchaser"), to purchase the Bonds of
the City (or individually, a "Bond"), in accordance with the
terms established therefor and at the rates of interest
hereinafter set forth, and to pay therefor the sum of $1,008,600,
plus interest accrued to settlement, is hereby ratified, affirmed
and approved.
2. Bond Terms.
(a) Title: Oriainal Issue Date: Denominations:
Maturities: Term Bond Option. The Bonds shall be titled "General
Obligation Improvement Bonds of 1999", shall be dated October I,
1999, as the date of original issue and shall be issued forthwith
on or after such date as fully registered bonds. The Bonds shall
be numbered from R-1 upward in the denomination of $5,000 each or
in any integral multiple thereof of a single maturity (the
"Authorized Denominations"). The Bonds shall mature on
December 1 in the years and amounts as follows:
Year
Amount
Year
Amount
2000
2001-2007
$ 75,000
100,000
2008-2009
$125,000
All dates are inclusive.
As may be requested by the Purchaser, one or more term
Bonds may be issued having mandatory sinking fund redemption and
final maturity amounts conforming to the foregoing principal
repayment schedule, and corresponding additions may be made to
the provisions of the applicable Bonds(s).
(b) Book Entrv Only System. The Depository Trust
Company, a limited purpose trust company organized under the laws
of the State of New York or any of its successors or its
successors to its functions hereunder (the "Depository") will act
as securities depository for the Bonds, and to this end:
1082740.1
2
(i) The Bonds shall be initially issued and, so
long as they. remain in book entry form only (the "Book Entry
Only Period"), shall at all times be in the form of a
separate single fully registered Bond for each maturity of
the Bonds; and for purposes of complying with this
requirement under paragraphs 5 and 10 Authorized
Denominations for any Bond shall be deemed to be limited
during the Book Entry Only Period to the outstanding
principal amount of that Bond.
(ii) Upon initial issuance, ownership of the Bonds
shall be registered in a bond register maintained by the
Bond Registrar (as hereinafter defined) in the name of CEDE
& CO., as the nominee (it or any nominee of the existing or
a successor Depository, the IINomineell).
(iii) With respect to the Bonds neither the City
nor the Bond' Registrar shall have any responsibility or
obligation to any broker, dealer, bank, or any other
financial institution for which the Depository holds Bonds
as securities depository (the "Participantll) or the person
for which a Participant holds an interest in the Bonds shown
on the books and records of the Participant (the "Beneficial
Owner"). Without limiting the immediately preceding
sentence, neither the City, nor the Bond Registrar, shall
have any such responsibility or obligation with respect to
(A) the accuracy of the records of the Depository, the
Nominee or any Participant with respect to any ownership
interest in the Bonds, or (B) the delivery to any
Participant, any Owner or any other person, other than the
Depository, of any notice with respect to the Bonds,
including any notice of redemption, or (C) the payment to
any Participant, any Beneficial Owner or any other person,
other than the Depository, of any amount with respect to the
principal of or premium, if any, or interest on the Bonds,
or (D) the consent given or other action taken by the
Depository as the Registered Holder of any Bonds (the
"Holder"). For purposes of securing the vote or consent of
any Holder under this Resolution, the City may, however,
rely upon an omnibus proxy under which the Depository
assigns its consenting or voting rights to certain
Participants to whose accounts the Bonds are credited on the
record date identified in a listing attached to the omnibus
proxy.
(iv) The City and the Bond Registrar may treat as
and deem the Depository to be che absolute owner of the
Bonds for the purpose of payment of the principal of and
premium, if any, and interest on the Bonds, for the purpose
of giving notices of redemption and other matters with
respect to the Bonds, for the purpose of obtaining any
consent or other action to be taken by Holders for the
purpose of registering transfers with respect to such Bonds,
and for all purpose whatsoever. The Bond Registrar, as
paying agent hereunder, shall pay all principal of and
1082740.1
3
premium, if any, and interest on the Bonds only to the
Holder or the Holders of the Bonds as shown on the bond
register, and all such payments shall be valid and effective
to fully satisfy and discharge the City's obligations with
respect to the principal of and premium, if any, and
interest on the Bonds to the extent of the sum or sums so
paid.
(v) Upon delivery by the Depository to the Bond
Registrar of written notice to the effect that the
Depository has determined to substitute a new Nominee in
place of the existing Nominee, and subject to the transfer
provisions in paragraph 10 hereof, references to the Nominee
hereunder shall refer to such new Nominee.
(vi) So long as any Bond is registered in the name
of a Nominee, all payments with respect to the principal of
and premium, if any, and interest on such Bond and all
notices with respect to such Bond shall be made and given,
respectively, by the Bond Registrar or City, as the case may
be, to the Depository as provided in the Letter of
Representations to the Depository required by the Depository
as a condition to its acting as book-entry Depository for
the Bonds (said Letter of Representations, together with any
replacement thereof or amendment or substitute thereto,
including any standard procedures or policies referenced
therein or applicable thereto respecting the procedures and
other matters relating to the Depository's role as
book-entry Depository for the Bonds, collectively
hereinafter referred to as the "Letter of Representations")
(vii) All transfers of beneficial ownership
interests in each Bond issued in book-entry form shall be
limited in principal amount to Authorized Denominations and
shall be effected by procedures by the Depository with the
Participants for recording and transferring the ownership of
beneficial interests in such Bonds.
(viii) In connection with any notice or other
communication to be provided to the Holders pursuant to this
Resolution by the City or Bond Registrar with respect to any
consent or other action to be taken by Holders, the
Depository shall consider the date of receipt of notice
requesting such consent or other action as the record date
for such consent or other action; provided, that the City or
the Bond Registrar may establish a special record date for
such consent or other action. The City or the Bond
Registrar shall, to the extent possible, give the Depository
notice of such special record date not less than 15 calendar
days in advance of such special record date.
(ix) Any successor Bond Registrar in its written
acceptance of its duties under this Resolution and any
paying agency/bond registrar agreement, shall agree to take
1082740.1
4
.'
any actions necessary from time to time to comply with the
requirements of the Letter of Representations.
(x) In the case of a partial prepayment of a
Bond, the Holder may, in lieu of surrendering the Bonds for
a Bond of a lesser denomination as provided in paragraph 5
hereof, make a notation of the reduction in principal amount
on the panel provided on the Bond stating the amount so
redeemed.
(c)
Discontinuance
termination of
follows:
Termination of Book-Entrv Only System.
of a particular Depository's services and
the book-entry only system may be effected as
(i) The Depository may determine to discontinue
providing its services with respect to the Bonds at any time
by giving written notice to the City and discharging its
responsibilities with respect thereto under applicable law.
The City may terminate the services of the Depository with
respect to the Bond if it determines that the Depository is
no longer able to carry out its functions as securities
depository or the continuation of the system of book-entry
transfers through the Depository is not in the best
interests of the City or the Beneficial Owners.
(ii) Upon termination of the services of the
Depository as provided in the preceding paragraph, and if no
substitute securities depository is willing to undertake the
functions of the Depository hereunder can be found which, in
the opinion of the City, is willing and able to assume such
functions upon reasonable or customary terms, or if the City
determines that it is in the best interests of the City or
the Beneficial Owners of the Bond that the Beneficial Owners
be able to obtain certificates for the Bonds, the Bonds
shall no longer be registered as being registered in the
bond register in the name of the Nominee, but may be
registered in whatever name or names the Holder of the Bonds
shall designate at that time, in accordance with paragraph
10 hereof. To the extent that the Beneficial Owners are
designated as the transferee by the Holders, in accordance
with paragraph 10 hereof, the Bonds will be delivered to the
Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit
or restrict the provisions of paragraph 10 hereof.
(d) Letter of Reoresentations. The provisions in the
Letter of Representations are incorporated herein by reference
and made a part of this resolution, and if and to the extent any
such provisions are inconsistent with the other provisions of
this resolution, the provisions in the Letter of ~epresentations
shall control.
1082740.1
5
3. Purpose. The Bonds shall provide funds to finance
the Improvements. The total cost of the Improvements, which
shall include all costs enumerated in Minnesota Statutes, Section
475.65, is estimated to be at least equal to the amount of the
Bonds. Work on the Improvements shall proceed with due diligence
to completion. The City covenants that it shall do all things
and perform all acts required of it to assure that work on the
Improvements proceeds with due diligence to completion and that
any and all permits and studies required under law for the
Improvements are obtained.
4. Interest. The Bonds shall bear interest payable
semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing June I, 2000, calculated on
the basis of a 360-day year of twelve 30-day months, at the
respective rates per annum set forth opposite the maturity years
as follows:
Maturity Interest Maturity Interest
Year Rate Year Rate
2000 4.00% 2005 4.55%
2001 4.10 2006 4.65
2002 4.20 2007 4.75
2003 4.30 2008 4.85
2004 4.45 2009 4.95
5. Redemotion. All Bonds maturing in the years 2006
to 2009, both inclusive, shall be subject to redemption and
prepayment at the option of the City on December I, 2005, and on
any Interest Payment Date thereafter at a price of par plus
accrued interest. Redemption may be in whole or in part of the
Bonds subject to prepayment. If redemption is in part, those
Bonds remaining unpaid which have the latest maturity date snaIl
be prepaid first; and if only part of the Bonds having a common
maturity date are called for prepayment, the specific Bonds to be
prepaid shall be chosen by lot by the Bond Registrar. Bonds or
portions thereof called for redemption shall be due and payable
on the redemption date, and interest thereon shall cease to
accrue from and after the redemption date. Mailed notice of
redemption shall be given to the paying agent and to each
affected registered holder of the Bonds at least thirty (30) days
prior to the date fixed for redemption.
To effect a partial redemption of Bonds having a common
maturity date, the Bond Registrar prior to giving notice of
redemption shall assign to each Bond having a common maturity
date a distinctive number for each $5,000 of the principal amount
or such Bond. The Bond Registrar shall then select by lot, using
such method of selection as it shall deem proper in its discre-
tion, from the numbers so assigned to such Bonds, as many numbers
as, at $5,000 for each number, shall equal the principal amount
of such Bonds to be redeemed. The Bonds to be redeemed shall be
the Bonds to which were assigned nu~bers so selected; provided,
however, that only so much of the principal amount of each such
1082740.1
6
."
Bond of a denomination of more than $5,000 shall be redeemed as
shall equal $5,000 for each number assigned to it and so
selected. If a Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the City or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the City and Bond Registrar duly executed by the
holder thereof or his, her or its attorney duly authorized in
writing) and the City shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Bond, without service charge, a new Bond or Bonds of the same
series having the same stated maturity and interest rate and of
any Authorized Denomination or Denominations, as requested by
such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
6. Bond Reqistrar. The Finance Director of the City
is appointed to act as bond registrar and transfer agent with
respect to the Bonds (the "Bond Registrar"), and shall do so
unless and until a successor Bond Registrar is duly appointed,
aJ.l 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:
1082740.1
7
UNITED STATES OF AMERICA
STATE OF MINNESOTA
SCOTT COUNTY
CITY OF PRIOR LAKE
R-
$
GENERAL OBLIGATION IMPROVEMENT BOND OF 1999
4. %
MATURITY
DATE
DECEMBER 1, 200
DATE OF
ORIGINAL ISSUE
OCTOBER 1, 1999
CUSIP
742616
INTEREST
RATE
REG I STERED 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, unless
called for earlier redemption, in the manner hereinafter set
forth, the principal amount specified above, on the maturity date
specified above, and to pay interest thereon semiannually on June
1 and December 1 of each year (each, an "Interest Payment Date"),
commencing June 1, 2000, at t~e 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 the
Finance Director of the Issuer (the "Bond Registrar"), acting as
paying agent, or any successor paying agent duly appointed by the
Issuer. Interest on this Bond will be paid on each Interest
Payment Date by check or draft mailed to the person in whose name
this Bond is registered (the "Holder" or "Bondholder") on the
registration books of the Issuer maintained by the Bond Registrar
and at the address appearing thereon at the close of business on
the fifteenth day of the calendar month next preceding such
Interest Payment Date (the "Regular Record Date"). Any interest
not so timely paid shall cease to be payable to the person who is
the Holder hereof as of the Regular Record Date, and shall be
payable to the person who is the Holder hereof at the close of
business on a date (the "Special Record Datell) 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
1082740.1
8
America. [So long as this Bond is registered in the name of the
Depository or its Nominee as provided in the Resolution
hereinafter described, and as those terms are defined therein,
payment of principal of, premium, if any, and interest on this
Bond and notice with respect thereto shall be made as provided in
the Letter of Representations, as defined in the Resolution, and
surrender of this Bond shall not be required for payment of the
redemption price upon a partial redemption of this Bond. Until
termination of the book-entry only system pursuant to the
Resolution, Bonds may only be registered in the name of the
Depository or its Nominee.].
REFERENCE IS HEREBY ~~E 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.
Include only until termination of the book-entry only
system under paragraph 2 hereof.
1082740.1
9
Date of Registration:
Registrable by: THE FINANCE
DIRECTOR OF THE CITY OF PRIOR
LAKE, MINNESOTA
Payable at: OFFICE OF THE FINANCE
DIRECTOR OF THE CITY OF PRIOR
LAKE, MINNESOTA
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
CITY OF PRIOR LAKE,
SCOTT COUNTY,
MINNESOTA
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
/s/ Facsimile
Mayor
/s/ Facsimile
Manager
THE CITY OF PRIOR LAKE, MINNESOTA
Bond Registrar
By
Authorized Signature
1082740.1
10
. .
ON REVERSE OF BOND
Redemption. All Bonds of this issue (the "Bonds")
maturing in the years 2006 to 2009, both inclusive, are subject
to redemption and prepayment at the option of the Issuer on
December 1, 2005, and on any Interest Payment Date thereafter at
a price of par plus accrued interest. Redemption may be in whole
or in part of the Bonds subject to prepayment. If redemption is
in part, those Bonds remaining unpaid which have the latest
maturity date shall be prepaid first; and if only part of the
Bonds having a common maturity date are called for prepayment,
the specific Bonds to be prepaid shall be chosen by lot by the
Bond Registrar. Bonds or portions thereof called for redemption
shall be due and payable on the redemption date, and interest
thereon shall cease to accrue from and after the redemption date.
Mailed notice of redemption shall be given to the paying agent
and to each affected Holder of the Bonds at least thirty (30)
days prior to the date fixed for redemption.
Selection of Bonds for Redemption; Partial Redemption.
To effect a partial redemption of Bonds having a common maturity
date, the Bond Registrar shall assign to each Bond having a
common maturity date a distinctive number for each $5,000 of the
principal amount of such Bond. The Bond Regi~trar shall then
select by lot, using such method of selection as it shall deem
proper in its discretion, from the numbers assigned to the Bonds,
as many numbers as, at $5,000 for each number, shall equal the
principal amount of such Bonds to be redeemed. The Bonds to be
redeemed shall be the Bonds to which were assigned numbers so
selected; provided, however, that only so much of the principal
amount of such Bond of a denomination of more than $5,000 shall
be redeemed as shall equal $5,000 for each number assigned to it
and so selected. If a Bond is to be redeemed only in part, it
shall be surrendered to the Bond Registrar (with, if the Issuer
or Bond Registrar so requires, a written instrument of transfer
in form satisfactory to the Issuer and Bond Registrar duly
executed by the Holder thereof or his, her or its attorney duly
authorized in writing) and the Issuer shall execute (if
necessary) and the Bond Registrar shall authenticate and deliver
to the Holder of such Bond, without service charge, a new Bond or
Bonds of the same series having the same stated maturity and
interest rate and of any Authorized Denomination or Denomina-
tions, as requested by such Holder, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the
principal of the Bond so surrendered.
Issuance; Purpose; General Obliqation. This Bond is
one of an issue in the total principal amount of $1,025,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate, denomination and redemption privilege,
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 October 18, 1999 (the I'Resolution"), for the purpose of
providing money to finance the construction of various improve-
1082740.1
11
ments within the jurisdiction of the Issuer. This Bond is
payable out of the General Obligation Improvement Bonds of 1999
Fund of the Issuer. This Bond constitutes a general obligation
of the Issuer, and to provide moneys for the prompt and full
payment of its principal, premium, if any, and interest when the
same become due, the full faith and credit and taxing powers of
the Issuer have been and are hereby irrevocably pledged.
Denominations; Exchanqe; Resolution. The Bonds are
issuable solely as fully registered bonds in Authorized
Denominations (as defined in the Resolution) and are exchangeable
for fully registered Bonds of other Authorized Denominations in
equal aggregate principal amounts at the principal office of the
Bond Registrar, but only in the manner and subject to the
limitations provided in the Resolution. Reference is hereby made
to the Resolution for a description of the rights and duties of
the Bond Registrar. Copies of the Resolution are on file in the
principal office ~f 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 IIbearerll or similar
designation), of an Authorized Denomination or Denominations, in
aggregate principal amount equal to the principal amount of this
Bond, of the same maturity and bearing interest at the same rate.
Fees upon Transfer or Loss. The Bond Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Bond and any legal or unusual costs regarding
transfers and lost Bonds.
Treatment of Registered Owners. The Issuer and Bond
Registrar may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided (except as otherwise provided on the
reverse side hereof with respect to the Record Date) and for all
other purposes, whether or not this Bond shall be overdue, and
neither the Issuer nor the Bond Registrar shall be affected by
notice to the contrary.
Authentication. This Bond shall not be valid or become
obligatory for any purpose or be entitled to any security unless
the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Oualified Tax-Exempt Obliaation. This Bond has been
designated by the Issuer as a "qualified tax-exempt obligation"
1082740.1
12
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:
UTMA -
- as tenants in common
- as tenants by the entireties
as joint tenants with right of
and not as tenants in common
as custodian for
survivorship
TEN COM
TEN ENT
JT TEN -
(Cus t)
under the
(Minor)
Uniform
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
1082740.1
13
ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the within Bond and does
hereby irrevocably constitute and appoint
attorney to transfer the Bond on the books kept for the
registration thereof, with full power of substitution in the
premises.
Dated:
Notice:
The assignor's signature to this
assignment must correspond with the name
as it appears upon the face of the
within Bond in every particular, without
alteration or any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other "Eligible Guarantor
Institutionll as defined in 17 CFR 240.17 Ad-IS (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.)
1082740.1
14
[Use only for Bonds when they are
Registered in Book Entry Only System]
PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s) and
in the amount(s) as follows:
DATE
AMOUNT
AUTHORIZED SIGNATURE
OF HOLDER
1082740.1
15
8. Execution; Temoorarv Bonds. The Bonds shall be
printed (or, at the request of the Purchaser, typewritten) and
shall be executed on behalf of the City by the signatures of its
Mayor and Manager and be sealed with the seal of the City;
provided, however, that the seal of the City may be a printed
(or, at the request of the Purchaser, photocopied) facsimile; and
provided further that both of such signatures may be printed (or,
at the request of the Purchaser, photocopied) facsimiles and the
corporate seal may be omitted on the Bonds as permitted by law.
In the event of disability or resignation or other absence of
either such officer, the Bonds may be signed by the manual or
facsimile signature of that officer who may act on behalf of such
absent or disabled officer. In case either such officer whose
signature or facsimile of whose signature shall appear on the
Bonds shall cease to be such officer before the delivery of the
Bonds, such signature or facsimile shall nevertheless be valid
and sufficient for all purposes, the same as if he or she had
remained in office until delivery. The City may elect to
deliver, in lieu of printed definitive bonds, one or more
typewritten temporary bonds in substantially the form set forth
ab0ve, 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 October 1, 1999. The Certificate of Authentication so
executed on each Bond shall be conclusive evidence that it has
been authenticated and delivered under this resolution.
10. Reqistration; Transfer; Exchanqe. 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.
Upon surrender for transfer of any Bond at the
principal office of the Bond Registrar, the City shall execute
1082740.1
16
(if necessary), and the Bond Registrar shall authenticate, insert
the date of registration (as provided in paragraph 9) of, and
deliver, in the name of the designated transferee or transferees,
one or more new Bonds of any Authorized Denomination or
Denominations of a like aggregate principal amount, having the
same stated maturity and interest rate, as requested by the
transferor; provided, however, that no Bond may be registered In
blank or in the name of "bearer" or similar designation.
At the option of the Holder, Bonds may be exchanged for
Bonds of any Authorized Denomination or Denominations of a like
aggregate principal amount and stated maturity, upon surrender of
the Bonds to be exchanged at the 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.
1082740.1
17
11. Riqhts Upon Transfer or Exchanqe. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
other Bond shall carryall the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
12. Interest Payment: Record Date. Interest on any
Bond shall be paid on each Interest Payment Date by check or
draft mailed to the person in whose name the Bond is registered
(the "Holder") on the registration books of the City maintained
by the Bond Registrar and at the address appearing thereon at the
close of business on the fifteenth (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 Reqistered Owner. The City and Bond
Registrar may treat the person in whose name any Bond is
registered as the owner of such Bond for the purpose of receiving
payment of principal of and premium, if any, and interest
(subject to the payment provisions in paragraph 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: Application of Proceeds. The Bonds when
so prepared and executed shall be delivered by the Finance
Director to the Purchaser upon receipt of the purchase price, and
the Purchaser shall not be obliged to see to the proper
application thereof.
IS. Fund and Accounts. There is hereby created a
special fund to be designated the "General Obligation Improvement
Bonds of 1999 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 "Construction Account" and "Debt Service Account II ,
respectively.
(a) Construction Account. To the Construction Account
there shall be credited the proceeds of the sale of the Bonds,
less accrued interest received thereon, plus any special assess-
ments levied with respect to the Improvements and collected prior
to completion of the Improvements and payment of the costs
thereof. From the Construction Account there shall be paid all
1082740.1
18
costs and expenses of making the Improvements listed in paragraph
16, including the 'cost of any construction contracts heretofore
let and all other costs incurred and to be incurred of the kind
authorized in Minnesota Statutes, Section 475.65j and the moneys
in said account shall be used for no other purpose except as
otherwise provided by lawj provided that the proceeds of the
Bonds may also be used to the extent necessary to pay interest on
the Bonds due prior to the anticipated date of commencement of
the collection of taxes or special assessments herein levied or
covenanted to be leviedj and provided further that if upon
completion of the Improvements there shall remain any unexpended
balance in the Construction Account, the balance (other than any
special assessments) may be transferred by the Council to the
fund of any other improvement instituted pursuant to Minnesota
Statutes, Chapter 429, and provided further that any special
assessments credited to the Construction Account shall only be
applied towards payment of the costs of the Improvements upon
adoption of a resolution by the City Council determining that the
application of the special assessments for such purpose will not
cause the City to no longer be in compliance with Minnesota
St~tutes, Section 475.61, Subdivision 1.
(b) Debt Service Account. There are hereby irrevocably
appropriated and pledged to, and there shall be credited to, the
Debt Service Account: (i) all collections of special assessments
herein covenanted to be levied with respect to the Improvements
and either initially credited to the Construction Account and not
already spent as permitted above and required to pay any
principal and interest due on the Bonds or collected subsequent
to the completion of the Improvements and payment of the costs
thereofj (ii) all accrued interest received upon delivery of the
Bondsj (iii) any collections of all taxes herein or hereafter
levied for the payment of the Bonds and interest thereonj (iv)
all funds remaining in the Construction Account after completion
of the Improvements and payment of the costs thereof, not so
transferred to the account of another improvementj (v) all
investment earnings on funds held in the Debt Service Accountj
and (vi) 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 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
Construction Account or Debt Service Account (or any other City
1082740.1
19
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. Assessments. It is hereby determined that no less
than twenty percent (20%) of the cost to the City of each
Improvement financed hereunder within the meaning of Minnesota
Statutes, Section 475.58, Subdivision 1(3), shall be paid by
special assessments to be levied against every assessable lot,
pi~ce and parcel of land benefitted by any of the Improvements.
The City hereby covenants and agrees that it will let all
construction contracts not heretofore let within one (1) year
after ordering each Improvement financed hereunder unless the
resolution ordering the Improvement specifies a different time
limit for the letting of construction contracts. The City hereby
further covenants and agrees that it will do and perform as soon
as they may be done all acts and things necessary for the final
and valid levy of such special assessments, and in the event that
any such assessment be at any time held invalid with respect to
any lot, piece or parcel of land due to any error, defect, or
irregularity in any action or proceedings taken or to be taken by
the City or the City Councilor any of the City officers or
employees, either in the making of the assessments or in the
performance of any condition precedent thereto, the City and the
City Council will forthwith do all further acts and take all
further proceedings as may be required by law to make the
assessments a valid and binding lien upon such property. The
special assessments have not heretofore been authorized, and
accordingly, for purposes of Minnesota Statutes, Section 475.55,
subdivision 3, the special assessments are hereby authorized.
Subject to such adjustments as are required by the conditions in
existence at the time the assessments are levied, it is hereby
determined that the assessments shall be payable in equal,
consecutive, annual installments, with general taxes for the
years shown below and with interest on the declining balance of
all such assessments at a rate per annum not greater than the
maximum permitted by law and not less than the rate per annum set
forth opposite the collection years specified below:
1082740.1
20
Improvement
Desianation
Amount
1&YY
Years
Collection
Years Ra te
2000-2009 8.00%
1999 Street
Improvements (Project
99-11, Project 99-12
and Project 99-13)
$383,000
1999-2008
At the time the assessments are in fact levied the City
Council shall, based on the then-current estimated collections of
the assessments, make any adjustments in any ad valorem taxes
required to be levied in order to assure that the City continues
to be in compliance with Minnesota Statutes, Section 475.61,
subdivision 1.
17. Tax Levv; Coveraae Test. 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
Levv Collection Amount
1999 2000 $ 82,000
2000 2001 82,000
2001 2002 82,000
2002 2003 82,000
2003 2004 82,000
2004 2005 82,000
2005 2006 82,000
2006 2007 82,000
2007 2008 82,000
2008 2009 82,000
The tax levies are such that if collected in full they,
togethe~ wltn estimated collections of special assessments and
other revenues herein pledged for the payment of the Bonds, will
o~oduce at least five oercent (5%) in excess ~f the amount needed
to meet when due the principal and interest payments on the
Bonds. The tax levies shall be irrepealable so long as any of
the Bonds are outstanding and unpaid, provided that the City
reserves the right and power to reduce the levies in the manner
and to the extent permitted by ~:innesota Statutes, Section
475.61, Subdivision 3.
18. Defeasance. When all Bonds have been discharged
as provided in this paragraph, all pledges, covenants and other
rights g~anted by this ~esolution to the ~egistered holders of
the Bonds shall, to the extent permitted by law, cease. The City
may discharge its obligations with respect to any Bonds which are
10e27H .1
21
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 discharge
its obligations with respect to any prepayable Bonds called for
redemption on any date when they are prepayable according to
their terms, by depositing with the Bond Registrar on or before
that date a sum sufficient for the payment thereof in full,
provided that notice of redemption thereof has been duly given.
The City may also at any time discharge its obligations with
respect to any Bonds, subject to the provisions of law now or
hereafter authorizing and regulating such action, by depositing
irrevocably in escrow, with a suitable banking institution
qualified by law as an escrow agent for this purpose, cash or
securities described in Minnesota Statutes, Section 475.67,
Subdivision 8, bearing interest payable at such times and at such
rates and maturing on such dates as shall be required, without
regard to sale and/or reinvestment, to pay all amounts to become
due thereon to maturity or, if notice of redemption as herein
required has been duly provided for, to such earlier redemption
date.
19. Compliance With Reimbursement Bond Requlations.
The provisions of this paragraph are intended to establish and
provide for the City's compliance with United States Treasury
Regulations Section 1.150-2 (the "Reimbursement Regulations")
applicable to the "reimbursement proceeds II of the Bonds, being
those portions thereof which will be used by the City to
reimburse itself for any expenditure which the City paid or will
have paid prior to the Closing Date (a "Reimbursement
Expenditure") .
The City hereby certifies and/or covenants as follows:
(a) Not later than 60 days after the date of payment of a
Reimbursement Expenditure, the City (or person
designated to do so on behalf of the City) has made or
will have made a written declaration of the City's
official intent (a "Declaration") which effectively (i)
states the City's reasonable expectation to reimburse
itself for the payment of the Reimbursement Expenditure
out of the proceeds of a subsequent borrowing; (ii)
gives a general and functional description of the
property, project or program to which the Declaration
relates and for which the Reimbursement Expenditure is
paid, or identifies a specific fund or account of the
City and the general functional purpose thereof from
which the Reimbursement Expenditure was to be paid
(collectively the "Project"); and (iii) states the
maximum principal amount of debt expected to be issued
by the City for the purpose of financing the Project;
provided, however, that no such Declaration shall
necessarily have been made with respect to: (i)
1062740.1 22
"preliminary expenditures" for the Project, defined in
the Reimbursement Regulations to include engineering or
architectural, surveying and soil testing expenses and
similar prefatory costs, which in the aggregate do not
exceed 20% of the "issue price" of the Bonds, and (ii)
a de minimis amount of Reimbursement Expenditures not
in excess of the lesser of $100,000 or 5% of the
proceeds of the Bonds. Notwithstanding the foregoing,
with respect to any Declaration made by the City
between January 27, 1992 and June 30, 1993, with
respect to a Reimbursement Expenditure made prior to
March 2, 1992, the City hereby represents that there
exists objective evidence, that at the time the
Expenditure was paid the City expected to reimburse the
cost thereof with the proceeds of a borrowing (taxable
or tax-exempt) and that expectation was reasonable.
(b) Each Re~mbursement Expenditure is a capital expenditure
or a cost of issuance of the Bonds or any of the other
types of expenditures described in Section 1.150-
2 (d) (3) of the Reimbursement Regulations.
(c) The I'reimbursement allocationll described in the
Reimbursement Regulations for each Reimbursement
Expenditure shall and will be made forthwith following
(but not prior to) the issuance of the Bonds and in all
events within the period ending on the date which is
the later of three years after payment of the
Reimbursement Expenditure or one year after the date on
which the Project to which the Reimbursement
Expenditure relates is first placed in service.
(d) Each such reimbursement allocation will be made in a
writing that evidences the City'S use of Bond proceeds
to reimburse the Reimbursement Expenditure and, if made
within 30 days after the Bonds are issued, shall be
treated as made on the day the Bonds are issued.
Provided, however, that the City may take action contrary to any
of the foregoing covenants in this paragraph 19 upon receipt of
an opinion of its Bond Counsel for the Bonds stating in effect
that such action will not impair the tax-exempt status of the
Bonds.
20. Continuina Disclosure. The City is the sole
obligated person with respect to the Bonds. The City hereby
agrees, in accordance with the provisions of Rule 15c2-12 (the
IIRule"), promulgated by the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Exchange Act of
1934, as amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described to:
(a) Provide or cause to be provided to each nationally
recognized municipal securities information repository ("NRMSIR")
1082740.1
23
and to the appropriate state information depository (IISIDII), if
any, for the State of Minnesota, in each case as designated by
the Commission in accordance with the Rule, certain annual
financial information and operating data in accordance with the
Undertaking. The City reserves the right to modify from time to
time the terms of the Undertaking as provided therein.
(b) Provide or cause to be provided, in a timely manner, to
(i) each NRMSIR or to the Municipal Securities Rulemaking Board
(IIMSRBII) and (ii) the SID, notice of the occurrence of certain
material events with respect to the Bonds in accordance with the
Undertaking.
(c) Provide or cause to be provided, in a timely manner, to
(i) each NRMSIR or to the MSRB and (ii) the SID, notice of a
failure by the City to provide the annual financial information
with respect to the City described in the Undertaking.
(d) The City agrees that its covenants pursuant to the Rule
set forth in this paragraph 20 and in the Undertaking is intended
to be for the benefit of the Holders of the Bonds and shall be
enforceable on behalf of such Holders; provided that the right to
enforce the provisions of these covenants shall be limited to a
right to obtain specific enforcement of the City's obligations
under the covenants.
The Mayor and Manager of the City, or any other officer of
the City authorized to act in their place with "Officers" are
hereby authorized and directed to execute on behalf of the City
the Undertaking in substantially the form presented to the City
Council subject to such modifications thereof or additions
thereto as are (i) consistent with the requirements under the
Rule, (ii) required by the Purchaser of the Bonds, and (iii)
acceptable to the Officers.
21. General Obligation Pledqe. 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.
22. Certificate of Reaistration. 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, and that the tax levy
required by law has been made.
1082740.1
24
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
Improvements. The City hereby covenants not to use the proceeds
of the Bonds or to use the Improvements, or to cause or permit
them to be used, or to enter into any deferred payment
arrangements for the cost of the Improvements, in such a manner
as to cause the Bonds to be "private activity bonds" within the
meuning of Sections 103 and 141 through 150 of the Code.
25. Tax-Exempt Status of the Bonds: Rebate. The City
shall comply with requirements necessary under the Code to
establish and maintain the exclusion from gross income under
Section 103 of the Code of the interest on the Bonds, including
without limitation (1) requirements relating to temporary periods
for investments, (2) limitations on amounts invested at a yield
greater than the yield on the Bonds, and (3) the rebate of excess
investment earnings to the United States, if the Bonds (together
with other obligations reasonably expected to be issued and
outstanding at one time in this calendar year) exceed the
small-issuer exception amount of $5,000,000.
For purposes of qualifying for the exception to the
federal arbitrage rebate requirements for governmental units
issuing $5,000,000 or less of bonds, the City hereby finds,
determines and declares that (1) the Bonds are issued by a
governmental unit with general taxing powers, (2) no Bond is a
private activity bond, (3) ninety-five percent (95%) or more of
the net proceeds of the Bonds are to be used for local
governmental activities of the City (or of a governmental unit
the jurisdiction of which is entirely within the jurisdiction of
the City), and (4) the aggregate face amount of all tax-exempt
bonds (other than private activity bonds) issued by the City (and
all subordinate entities thereof, and all entities treated as one
issuer with the City) during the calendar year in which the Bonds
are issued and outstanding at one time is not reasonably expected
to exceed $5,000,000, all within the meaning of Section
148 (f) (4) (D) of the Code.
26. Desiqnation of Oualified Tax-Exemot Obliqations.
In order to qualify the Bonds as "qualified tax-exempt
obligations" within the meaning of Section 265(b) (3) of the Code,
1082740.1
25
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 1999 will not exceed $10,000,000; and
(e) not more than $10,000,000 of obligations
issued by the City during this calendar year 1999 have
been designated for purposes of Section 265 (b) (3) of
the Code.
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.
27. Severability. If any section, paragraph or
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
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.
1082740.1
26
The motion for the adoption of the foregoing resolution
was duly seconded by member P~t~rsen and, after a full
discussion thereof and upon a vote being taken thereon, the
following voted in favor thereof: Mader Kedl"'owski Pe.te.r~e.n
, I I
\N'uellner and Schenck
and the following voted against the same: None.
adopted.
Whereupon said resolution was declared duly passed and
1082740.1
27
STATE OF MINNESOTA
COUNTY OF SCOTT
CITY OF PRIOR LAKE
I, the undersigned, being the duly qualified and acting
Manager of the City of Prior Lake, Minnesota, DO HEREBY CERTIFY
that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that
the same is a full, true and complete transcript of the minutes
of a meeting of tpe 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,
$1,025,000 General Obligation Improvement Bonds of 1999 of said
City.
WITNESS my hand this 18th day of October, 1999.
Manager
1082740.1
28