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HomeMy WebLinkAboutResolution - 91-196 - Sale of $9,050,000 General Obligation Water and Sewer Bonds - 08/20/1991 CERTIFICATION OF MINUTES RELATING TO $9, 500, 000 GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, SERIES 1991C Issuer: City of Eden Prairie, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A regular meeting held Tuesday, August 20, 1991, at 7 :30 o'clock P .M. , at the City Hall. Members present : Richard Anderson, H. Martin Jessen, Jean Harris, Patricia Pidcock and Mayor Douglas Tenpas Members absent : None Documents Attached: Minutes of said meeting (including) : RESOLUTION NO. 91-1 66 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $9, 500, 000 GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, • SERIES 1991C I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer this 20th day of August, 1991 . F nce Director/Clerk • The Finance-Director/Clerk presented to the City Council affidavits showing publication in the official newspaper and in the Northwestern Financial Review of a Notice of Sale of $9, 500,000 General Obligation Water and Sewer Revenue Bonds, Series 1991C, of the City, for which bids were to be considered at this meeting in accordance with the resolution adopted by the City Council on July 30, 1991. The affidavits were examined and found satisfactory and directed to be placed on file in the office of the Finance Director/Clerk. The Finance Director/Clerk reported that _2 sealed bids had been received at or prior to the time stated in the Notice of Sale, and the bids having been opened, publicly read and considered, were all found to conform to the Notice of Sale and • the Official Notice of Sale and the highest and best bid of each bidder was found to be as follows: (See next page) SPRINGSTED PUBLIC FINANCE ADVISORS • 16655 West Bluemound Road 85 East Seventh Place 6800 College Boulevard Suite 290 Suite 100 Suite 600 Brookfield,WI 53005-5935 Saint Paul,MN 55101-2143 Overland Park,KS 66211-1533 (414)782-8222 (612) 223-3000 (913) 345-8062 Fax:(414)782-2904 Fax:(612)223-3002 Fax:(913)345-1770 2739 Second Avenue S.E. 222 South Ninth Street Cedar Rapids, IA 52403-1434 Suite 2825 (319) 363-2221 Minneapolis,MN 55402-3368 Fax:(319)363-6999 (612) 333-2363 $9,500,000 CITY OF EDEN PRAIRIE, MINNESOTA GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, SERIES 1991 C AWARD: PRUDENTIAL SECURITIES, INC. DEAN WITTER REYNOLDS INCORPORATED LEHMAN BROTHERS BEAR, STEARNS & CO., INC. • A. G. EDWARDS &SONS, INCORPORATED OPPENHEIMER&CO., INC. SALE: August 20, 1991 Moody's Rating: Al Interest True Interest Bidder Rates Price Cost& Rate PRUDENTIAL SECURITIES, INC. 5.00% 1993 $9,370,032.25 $4,779,361.50 DEAN WITTER REYNOLDS 5.20% 1994 (6.3023%) INCORPORATED 5.40% 1995 LEHMAN BROTHERS 5.60% 1996 BEAR, STEARNS & CO., INC. 5.75% 1997 A. G. EDWARDS & SONS, 5.90% 1998 INCORPORATED 6.00% 1999 OPPENHEIMER & CO., INC. 6.10% 2000-2001 6.20% 2002 6.30% 2003 (Continued) Interest True Interest Bidder Rates Price Cost& Rate NORWEST INVESTMENT-SERVICES, 4.90% 1993 $9,395,500.00 $4,794,287.50 INCORPORATED ' 5.10% 1994 (6.3064%)* JURAN & MOODY, INCORPORATED 5.30% 1995 MERRILL LYNCH CAPITAL MARKETS 5.50% 1996 American National Bank Saint Paul 5.70% 1997 Miller & Schroeder Financial, Inc. 5.90% 1998 Dougherty, Dawkins, Strand & Bigelow, 6.00% 1999 Incorporated 6.10% 2000 Moore, Juran and Company, 6.20% 2001 Incorporated 6.30% 2002 Peterson Financial Corporation 6.40% 2003 - In Association With - PIPER, JAFFRAY& HOPWOOD, INCORPORATED FBS INVESTMENT SERVICES, INC. Robert W. Baird & Company, Incorporated Craig-Hallum, Incorporated Marquette Bank Minneapolis, N.A. - In Association With - DAIN BOSWORTH INCORPORATED Miller, Johnson & Kuehn, Inc. Cronin & Company, Incorporated REOFFERING SCHEDULE OF THE PURCHASER • Rate Year Yield 5.00% 1993 Par 5.20% 1994 Par 5.40% 1995 Par 5.60% 1996 Par 5.75% 1997 Par 5.90% 1998 Par 6.00% 1999 Par 6.10% 2000 Par 6.10% 2001 6.20% 6.20% 2002 6.30% 6.30% 2003 6.40% BBI: 6.88 Average Maturity: 8.03 Years i Councilperson Harris introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $9, 500,000 GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, SERIES 1991C BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota (the Issuer) , as follows: Section 1 . Authorization and Sale. (a) This Council, by its Resolution No. 91-174 adopted on July 30, 1991, authorized the issuance and public sale of $9, 500, 000 General Obligation Water and Sewer Revenue Bonds, Series 1991C (the Obligations) of the Issuer to finance the costs of various improvement to the water and sewer utility system (the System) as described in Resolution No. 91-174 (the Improvements) . (b) Notice of Sale has been duly published. Pursuant to the Official Terms of Offering and the Notice of Sale, _2 sealed bids for the purchase of the Obligations were received at or before the time specified for receipt of bids. The bids have been opened, publicly read and considered and the purchase price, interest rates and net interest cost under the terms of each bid have been determined. The most favorable bid received is that of Prudential Securities, Inc. of Chicago , and associates (the Purchaser) , to purchase the Obligations at a price of $ 9,370,032. 25 plus accrued interest on all Obligations to the day of delivery and payment, on the further terms and conditions hereinafter set forth. (c) The sale of the Obligations is hereby awarded to the Purchaser and the Mayor and the Manager are hereby authorized and directed to execute a contract on behalf of the Issuer for the sale of the Obligations in accordance with the terms of the bid. The good faith deposit of the Purchaser shall be retained by the Issuer until the Obligations have been delivered. The good faith checks of other bidders shall be returned to them forthwith. Section 2 . Bond Terms; Registration; Execution and Delivery. 2.01. Issuance of Obligations. All acts, conditions and things which are required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be . performed precedent to and in the valid issuance of the Obligations having been done, now existing, having happened and having been performed, it is now necessary for the City Council to ! • establish the form and terms of the Obligations, to provide security therefor and to issue the Obligations forthwith. 2.02 . Dates, Maturities: Interest Rates: Denominations and Payment . The Obligations shall be originally dated as of September 1, 1991, shall be in denominations of $5,000 or any integral multiple thereof, of single maturities, shall mature on February 1 in the years and amounts stated below, and shall bear interest from date of original issue until paid or duly called for redemption at the annual rates set forth opposite such years and amounts, as follows: Year Amount Rate Paz Amok Rate 1993 $175,000 5.00% 1999 $ 875,000 6.00% 1994 525,000 5.20 2000 950,000 6.10 1995 625,000 5 .40 2001 1,050,000 6.10 1996 575,000 5.60 2002 1,350,000 6.20 1997 600,000 5.75 2003 2, 125,000 6.30 1998 650,000 5 . 90 The Obligations shall be issuable only in fully registered form. The interest thereon and, upon surrender of each Obligation at the principal office of the Registrar described herein, the principal amount thereof, shall be payable by check or draft issued by the Registrar described herein. The Registrar shall, upon the initial . issuance and delivery of the Obligations and any subsequent transfer, exchange or substitution of Obligations, note thereon the date of authentication and delivery thereof. 2.03 . Interest Payment Dates. The interest on the Obligations shall be payable on February 1 and August 1 in each year, commencing February 1, 1992, to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 2.04 . Redemption. Obligations maturing in the years 1993 through 2000 shall not be subject to redemption prior to maturity, but Obligations maturing in 2001 and later years shall be subject to redemption and prepayment at the option of the Issuer, in whole or in part, in such order as the Issuer shall determine and within a maturity by lot as selected by the Registrar in multiples of $5,000, on February 1, 2000, and on any date thereafter, at a price equal to the principal amount thereof and accrued interest to the date of redemption. The Finance Director/Clerk shall cause notice of the call for redemption thereof to be published as required by law, and at least thirty days prior to the designated redemption date, shall cause notice of call for redemption to be mailed, by first class mail, to the registered holders of any Obligations to be redeemed at their addresses as they appear on the bond register described in Section -2- � 2 .06 hereof, but no defect in or failure to give such mailed notice of redemption shall affect the validity of proceedings for the redemption of any Obligation not affected by such defect or failure. Official notice of redemption having been given as aforesaid, the Obligations or portions of Obligations so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Obligations or portions of Obligations shall cease to bear interest. Upon partial redemption of any Obligation, a new Obligation or Obligations will be delivered to the owner without charge, representing the remaining principal amount outstanding. In addition to the notice prescribed by the preceding paragraph, the Finance Director/Clerk shall also give, or cause to be given, notice of the redemption of any Obligation or Obligations or portions thereof at least 35 days before the redemption date by first class mail or telecopy to the Purchaser and all registered securities depositories then in the business of holding substantial amounts of obligations of the character of the Obligations (such depositories now being The Depository Trust Company, of Garden City, New York; Midwest Securities Trust Company, of Chicago, Illinois; and Philadelphia Depository Trust Company, of Philadelphia, Pennsylvania) and one or more national information services that disseminate information regarding municipal bond redemptions; provided that any defect in or any failure to give any notice of redemption prescribed by this paragraph shall not affect the validity of the proceedings for the redemption of any Obligation or portion thereof. 2.05. Appointment of Initial Registrar. The Issuer hereby appoints Norwest Bank Minnesota, National Association as the initial bond registrar, transfer agent and paying agent (the Registrar) for the Obligations. The Mayor and Finance Director/Clerk are authorized to execute and deliver, on behalf of the Issuer, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The Issuer agrees to pay the reasonable and customary charges of the Registrar for the services performed. The Issuer reserves the right to remove the Registrar upon thirty days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Obligations in its possession to the successor Registrar and shall deliver the bond register to the successor Registrar. 2.06. Registration. The effect of registration and the rights and duties of the Issuer and the Registrar with respect thereto shall be as follows: -3- j i (a) Register. The Registrar shall keep at its principal corporate trust office a bond register in which the Registrar shall provide for the registration of ownership of Obligations and the registration of transfers and exchanges of Obligations entitled to be registered, transferred or exchanged. (b) Transfer of Obligations. Upon surrender for transfer of any Obligation duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Obligations of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date. (c) Exchange of Obligations. Whenever any Obligations are surrendered by the registered owner for exchange the Registrar shall authenticate and deliver one or more new Obligations of a like aggregate principal amount and maturity, as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. All Obligations surrendered upon any transfer or exchange shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Issuer. (e) Improper or Unauthorized Transfer. When any Obligation is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Obligation or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) persons Deemed Owners. The Issuer and the Registrar may treat the person in whose name any Obligation is at any time registered in the bond register as the absolute owner of the Obligation, whether the Obligation shall be overdue or not, for the purpose of receiving payment of or on account of, the principal of and interest on the • Obligation and for all other purposes; and all payments made to any registered owner or upon the owner's order shall be -4- f valid and effectual to satisfy and discharge the liability upon Obligation to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. For every transfer or exchange of Obligations (except for an exchange upon a partial redemption of an Obligation) , the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Obligations. In case any Obligation shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Obligation of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Obligation or in lieu of and in substitution for any Obligation destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Obligation destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Obligation was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to • it, in which both the Issuer and the Registrar shall be named as obligees. All Obligations so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Issuer. If the mutilated, destroyed, stolen or lost Obligation has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Obligation prior to payment. (i) Authenticating Agent. The Registrar is hereby designated authenticating agent for the Obligations, within the meaning of Minnesota Statutes, Section 475.55, Subdivision 1, as amended. 2.07. Execution, Authentication and Delivery. The Obligations shall be prepared under the direction of the Finance Director/Clerk and shall be executed on behalf of the Issuer by the signatures of the Mayor and the Manager, provided that the signatures may be printed, engraved or lithographed facsimiles of the originals. In case any officer whose signature or a facsimile of whose signature shall appear on the Obligations shall cease to be such officer before the delivery of any Obligation, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until delivery. Notwithstanding such execution, no Obligation shall be valid or obligatory for any purpose or entitled to any security or • benefit under this Resolution unless and until a certificate of authentication on the Obligation has been duly executed by the -5- 3 • • 3 • manual signature of an authorized representative of the Registrar. Certificates of authentication on different Obligations need not be signed by the same representative. The executed certificate of authentication on each Obligation shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Obligations have been prepared, executed and authenticated, the Finance Director/Clerk shall deliver them to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore executed, and the Purchaser shall not be obligated to see to the application of the purchase price. 2 .08. Form of Obligations. The Obligations shall be prepared in substantially the following form: • • (Face of the Obligations) UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE GENERAL OBLIGATION WATER AND SEWER REVENUE BOND, SERIES 1991C Interest Maturity Date of Rate Date Original Issue CUSIP September 1, 1991 REGISTERED OWNER: PRINCIPAL AMOUNT: THE CITY OF EDEN PRAIRIE, COUNTY OF HENNEPIN, MINNESOTA (the Issuer) , a duly organized and existing municipal corporation, . acknowledges itself to be indebted and for value received hereby promises to pay to the registered owner specified above, or registered assigns, the principal sum specified above on the maturity date specified above, and to pay interest thereon from the date of original issue specified above, or from the most recent date to which interest has been paid or duly provided for, at the annual rate specified above, payable on February 1 and August 1 in each year, commencing February 1, 1992, to the person in whose name this Obligation is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by , in , as Registrar and Paying Agent (the Registrar) , or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith, credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Additional provisions of this Obligation are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth hereon. This Obligation shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon -7- shall have been executed by the Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Eden Prairie, County of Hennepin, Minnesota, by its City Council, has caused this Obligation to be executed on its behalf by the printed facsimile signatures of its Mayor and Manager. Date of Authentication: CITY OF EDEN PRAIRIE, MINNESOTA (facsimile) (facsimile) City Manager Mayor CERTIFICATE OF AUTHENTICATION This is one of the Obligations delivered pursuant to the Resolution mentioned within. as Registrar By Authorized Representative [Reverse of the Obligations] This Obligation is one of an issue in the aggregate principal amount of $9,500,000, issued pursuant to a resolution adopted by the City Council on August 20, 1991 (the Resolution) , to finance the cost of various improvements to the water and sewer utility system (the System) , and is issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statutes Chapters 444.075 and 475. The Obligations are issuable only in fully registered form, in denominations of $5,000 or any integral multiple thereof, of single maturities. Obligations maturing in 2000 and earlier years are payable on their respective stated maturity dates without option of prior payment, but Obligations having stated maturity dates in 2001 and later years are each subject to redemption and prepayment at the option of the Issuer, in whole or in part, in such order as the Issuer shall determine and, within a maturity, by lot as -8- selected by the Registrar in multiples -of $5,000 on February 1, 2000, and on any date thereafter, at a price equal to the principal amount thereof plus interest accrued to the date of redemption. The Issuer will cause notice of the call for redemption to be published as required by law and, at least thirty days prior to the designated redemption date, will cause notice of the call thereof to be mailed by first class mail to the registered owner of any Obligation to be redeemed at the owner's address as it appears on the bond register maintained by the Registrar, but no defect in or failure to give such mailed notice of redemption shall affect the validity of proceedings for the redemption of any Obligation not affected by such defect or failure. Official notice of redemption having been given as aforesaid, the Obligations or portions of Obligations so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Obligations or portions of Obligations shall cease to bear interest. Upon partial redemption of any Obligation, a new Obligation or Obligations will be delivered to the registered owner without charge, representing the remaining principal amount outstanding. As provided in the Resolution and subject to certain limitations set forth therein, this Obligation is transferable upon the books of the Issuer at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Obligations of other authorized denominations. Upon such transfer or exchange the Issuer will cause a new Obligation or Obligations to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The Issuer and the Registrar may deem and treat the person in whose name this Obligation is registered as the absolute owner hereof, whether this Obligation is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the Issuer nor the Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Obligation in order to make it a valid and binding general obligation of the Issuer in accordance with its terms, have been -9- i • done, do exist, have happened and have been performed as so required; that in and by the Resolution, the Issuer has covenanted and agreed with the registered owners of the Obligations that it will impose and collect, or cause to be imposed and collected, charges for the service, use and availability of the System at the times and in the amounts required to produce net revenues adequate to pay all principal and interest when due on the Obligations, but the full faith and credit and taxing powers of the Issuer have been pledged to the payment of principal and interest when due, and ad valorem taxes, if necessary for such purpose, will be levied upon all taxable property in the Issuer, without limitation as to rate or amount; and that the issuance of this Obligation, together with all other indebtedness of the Issuer outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Issuer to exceed any constitutional or statutory limitation of indebtedness. Form of certificate to be printed on the reverse side of each Obligation, following a full copy of the legal opinion: We certify that the above is a full, true and correct copy of the legal opinion rendered by Bond Counsel on the issue of Obligations of the City of Eden Prairie, Hennepin County, Minnesota, which includes the within Obligation, dated as of the date of original delivery of and payment for the Obligations. (Facsimile Signature) (Facsimile Signature)" City Manager Mayor The following abbreviations, when used in the inscription on the face of this Obligation, shall be construed as though they were written out in full according to applicable laws or regulations: -10- • TEN COM -- as tenants UTMA as Custodian for in common (Cust) (Minor) TEN ENT -- as tenants by entireties under Uniform Transfers to Minors JT TEN --as joint tenants with right of Act . . . . . . . . . . . . . . . . . survivorship and (State) not as tenants in common Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Obligation and all rights thereunder, and does hereby irrevocably constitute and appoint . attorney to transfer the said Obligation on the books kept for registration of the within Obligation, 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 enlargement or any change whatsoever. Signature Guaranteed: Signature (s) must be guaranteed by a commercial bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: -11- Section 3. Construction Fund. There is hereby established on the official books and records of the Issuer a General Obligation Water and Sewer Revenue Bond, Series 1991C Construction Fund (the Construction Fund) , and the Finance Director/Clerk shall continue to maintain the Construction Fund until payment of all costs and expenses incurred in connection with the construction of the Improvements to the System have been paid. To the Construction Fund there shall be credited from the proceeds of the Obligations, exclusive of unused discount, accrued and capitalized interest, an amount equal to the estimated cost of the Improvements and from the Construction Fund there shall be paid all construction costs and expenses of the Improvements. After payment of all construction costs, the Construction Fund shall be discontinued. All proceeds of the Obligations deposited in the Construction Fund will be expended solely for the payment of the costs of the Improvements to the System. The System will be owned and maintained by the Issuer and available for use by members of the general public on a substantially equal basis. The Issuer shall not enter into any lease, use or other agreement with any non-governmental person relating to the use of the System or security for the payment of the Obligations which might cause the Obligations to be considered "private activity bonds" or "private loan bonds" pursuant to Section 141 of the Internal Revenue Code of 1986, as amended (the Code) . . Section 4. Debt Service Fund. There is hereby established on the official books and records of the Issuer a General Obligation Water and Sewer Revenue Bond, Series 1991C Debt Service Fund (the Debt Service Fund) , and so long as any of the Obligations are outstanding and any principal of or interest thereon unpaid, the Finance Director/Clerk shall continue to maintain the Debt Service Fund, and the principal of and interest on the Obligations shall be payable therefrom. The Issuer irrevocably appropriates to the Debt Service Fund (a) any amount in excess of $9,338,500 received from the Purchaser; (b) capitalized interest in the amount of $ -0- ; (c) net revenues of the System appropriated to the payment of the Obligations and interest thereon in accordance with Section 5 hereof, all taxes collected pursuant to Section 6 hereof, and any other funds appropriated by the Council for the payment of the Obligations. Section 5. Sufficiency of System Revenues. It is hereby found, determined and declared that the Issuer owns and operates the System as a revenue-producing utility and convenience; and that the net operating revenues of the System, after deducting from the gross receipts derived from charges for the service, use and availability of the System the normal, current and reasonable expenses of operation and maintenance thereof, will be sufficient, together with any other pledged . funds, for the payment when due of the principal of and interest -12- i on the Obligations herein' authorized, and on any other bonds to which such revenues are pledged. Section 6. Rate Covenant . Pursuant to Minnesota Statutes, Section 444 .075, the Issuer hereby covenants and agrees with the registered owners from time to time of the Obligations, that until the Obligations are paid in full, or are discharged as provided in Section 8, the Issuer will impose and collect reasonable charges for the service, use and availability of the System according to schedules sufficient to produce net revenues sufficient to pay the Obligations, and any other bonds to which said net revenues have been pledged; and the net revenues, to the extent necessary, are hereby irrevocably pledged and appropriated to the payment of the Obligations herein authorized and interest thereon when due. Nothing herein shall preclude the Issuer from hereafter making further pledges and appropriations of the net revenues of the System for payment of additional obligations of the Issuer hereafter authorized if the Council determines before the authorization of such additional obligations that the estimated net revenues of the System will be sufficient, together with any other sources pledged to the payment of the outstanding and additional obligations, for payment of the outstanding bonds and such additional obligations. Such further pledges and appropriations of net revenues may be made superior or subordinate to or on a parity with, the pledge and appropriation herein made. iSection 7. Pledge of Taxing Power.. For the prompt and full payment of the principal of and interest on the Obligations as such payments respectively become due, the full faith, credit and unlimited taxing powers of the Issuer shall be and are hereby irrevocably pledged. It is, however, presently estimated that the revenues appropriated pursuant to Section 5 hereof will provide sums not less than 5% in excess of principal and interest on the Obligations when due, and therefore no tax levy is presently required. Section 8. Defeasance. When all of the Obligations have been discharged, all pledges, covenants and other rights granted by this Resolution to the holders of the Obligations shall cease. The Issuer may discharge its obligations with respect to any Obligations which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Obligation should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit. The Issuer may also discharge its obligations with respect to any prepayable Obligations called for redemption on any date when they are prepayable according to their terms, by depositing with the Registrar on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as -13- provided herein. The Issuer may also at any time discharge its obligations with respect to any Obligations, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited, bearing interest payable at such time and at such rates and maturing or callable at the holder's option on such dates as shall be required to pay all principal, interest and redemption premiums to become due thereon to maturity or earlier designated redemption date. Section 9. Registration of Obligations . The Finance Director/Clerk is hereby authorized and directed to file a certified copy of this Resolution with the County Auditor of Hennepin County, together with such additional information as the Auditor may require, and to obtain from the Auditor a certificate that the Obligations have been duly entered upon the Auditor's bond register and the taxes required by law for the payment of the Obligations have been levied. Section 10. ALthentication of Transcript. The officers of the Issuer and the Auditor are hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey & Whitney, Bond Counsel, certified copies of all proceedings and records relating to the Obligations and such other affidavits, • certificates and information as may be required to show the facts relating to the legality and marketability of the Obligations, as the same appear from the books and records in their custody and control or as otherwise known to them, and all such certified copies, affidavits and certificates, including any heretofore furnished, shall be deemed representations of the Issuer as to the correctness of all statements contained therein. Section 11. Official Statement. The Official Statement relating to the Obligations, dated August 8, 1991, prepared and delivered on behalf of the Issuer by Springsted Incorporated, is hereby approved, and the officers of the Issuer are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency thereof. Section 12. Tax Matters. 12.01. Covenant. The Issuer covenants and agrees with the registered owners from time to time of the Obligations that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Obligations to become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code) , and applicable Treasury Regulations (the Regulations) , and covenants to take any and all actions within its powers to ensure that the interest on the Obligations will not become subject to taxation under the Code -14- and the Regulations. The Issuer will cause to be filed with the Secretary of Treasury an information reporting statement in the form and at the time prescribed by the Code. 12.02 . Arbitrage Certification. The Mayor and Finance Director/Clerk, being the officers of the Obligations charged with the responsibility for issuing the Issuer pursuant to this resolution, are authorized and directed to execute and deliver to the Purchaser a certificate in accordance with the provisions of Section 148 of the Code, and Sections 1.103-13, 1 .103-14 and 1. 103-15 of the Regulations, stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Obligations which make it reasonable to expect that the proceeds of the Obligations will not be used in a manner that would cause the Obligations to be arbitrage bonds within the meaning of the Code and Regulations. 12.03. Rebate to the United States. The Issuer acknowledges that the Obligations are subject to the rebate requirements of Section 148 (f) of the Code. The Issuer covenants and agrees to retain such records, make such determinations, file such reports and documents and pay such amounts at such times as are required under Section 148 (f) and applicable Regulations to preserve the exclusion of interest on the Obligations from gross income for federal income tax purposes, unless the Obligations qualify for the exception from the rebate requirement under Section 148 (f) (4) (C) of the Code and no "gross proceeds" of the Obligations (other than amounts constituting a "bona fide debt service fund") arise during or after the expenditure of the original proceeds thereof. In furtherance of the foregoing, the Finance Director/Clerk is hereby authorized and directed to execute a Rebate Certificate, substantially in the form of the Rebate Certificate currently on file in his office, and the Issuer hereby covenants and agrees to observe and perform the covenants and agreements contained therein, unless amended or terminated in accordance with the provisions thereof. Dout as B. Tenpas, M yor Attest• •Jo Zane, Finance Director/Clerk -15- f t t a The motion for the adoption of the foregoing resolution was duly seconded by Councilperson Pidcock and, upon vote being taken thereon, the following voted in favor thereof: Richard Anderson, H. Martin Jessen, Jean Harris, Patricia Pidcock and Mayor Douglas Tenpas and the following voted against the same: None whereupon the resolution was declared duly passed and adopted. • • -16-