HomeMy WebLinkAboutResolution - 2008-99 - $3,120,000 General Obligation Equipment Certificates, Series 2008A - 10/07/2008 CITY OF EDEN PRAIRIE
HENNEPIN COUNTY, MINNESOTA
RESOLUTION NO. 2008-99
RESOLUTION AUTHORIZING THE ISSUANCE, AWARDING THE
SALE,PRESCRIBING THE FORM AND DETAILS AND PROVIDING
FOR THE PAYMENT OF$3,120,000 GENERAL OBLIGATION
EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2008A
BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota(the City),
as follows:
SECTION 1. AUTHORIZATION AND SALE.
1.01. Authorization. The City Council hereby determines that it is in the best interest of
the City to issue its General Obligation Equipment Certificates of Indebtedness, Series 2008A
(the Certificates), in the principal amount of$3,120,000,pursuant to Minnesota Statutes, Section
412.301 and Chapter 475. The proceeds of the Certificates will be used, together with any
additional funds of the City which might be required, to finance the costs of acquiring various
items of capital equipment. Said items of capital equipment have a useful life not less than the
term of the Certificates. The principal amount of the Certificates does not exceed 0.25 percent of
the market value of taxable property in the City. Accordingly,publication of this resolution in
the City's official newspaper is not required and the Certificates are not subject to approval at an
election.
1.02. Sale. Pursuant to the Notice of Sale and the Official Statement prepared on behalf
of the City by Northland Securities, Inc.,proposals for the purchase of the Certificates were
received at or before the time specified for receipt of proposals. The proposals have been
opened,publicly read and considered and the purchase price, interest rates and net interest cost
under the terms of each proposal have been determined. The most favorable proposal received is
that of , in ,
, (the Purchaser),to purchase the Certificates at a price of
$ plus accrued interest on all Certificates to the day of delivery and
payment, on the further terms and conditions hereinafter set forth.
1.03. Award. The sale of the Certificates is hereby awarded to the Purchaser and the
Mayor and City Manager are hereby authorized and directed to execute a contract on behalf of
the City for the sale of the Certificates in accordance with the terms of the proposal. The good
faith deposit of the Purchaser shall be retained and deposited by the City until the Certificates
have been delivered, and shall be deducted from the purchase price paid at settlement.
SECTION 2. CERTIFICATE TERMS, REGISTRATION; EXECUTION AND DELIVERY.
2.01. Issuance of Certificates. 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 Certificates 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 Certificates, to provide security therefor and to issue the
Certificates forthwith.
2.02. Maturities, Interest Rates, Denominations and Payment. The Certificates shall be
originally dated as of October 1, 2008, shall be in the denomination of$5,000 each, or any
integral multiple thereof,of single maturities, shall mature on June 1 in the years and amounts
stated below, and shall bear interest from date of original issue until paid at the annual rates set
forth opposite such years and amounts,as follows:
Year Amount Rate Year Amount Rate
2009 $ % 2014 $ %
20I0 2015
2011 2016
2012 2017
2013 2018
The interest thereon and, upon surrender of each Certificate, the principal amount thereof shall
be payable by check or draft issued by the Registrar described herein.
[REVISE MATURITY SCHEDULE FOR ANY TERM CERTIFICATES]
2.03. Dates and Interest Payment Dates. Upon initial delivery of the Certificates
pursuant to Section 2.07 and upon any subsequent transfer or exchange pursuant to Section 2.06,
the date of authentication shall be noted on each Certificate so delivered, exchanged or
transferred. Interest on the Certificates shall be payable on June 1 and December 1, commencing
June 1, 2009,each such date being referred to herein as an Interest Payment Date, to the person
in whose names the Certificates are registered on the Bond Register, as hereinafter defined, at the
Registrar's close of business on the fifteenth day of the calendar month next preceding such
Interest Payment Date, whether or not such day is a business day. Interest shall be computed on
the basis of a 360-day year composed of twelve 30-day months.
2.04. Redemption. Certificates maturing in 2017 and later years shall be subject to
redemption and prepayment at the option of the City, in whole or in part, in such order of
maturity dates as the City may select and,within a maturity,by lot as selected by the Registrar
(or, if applicable, by the bond depository in accordance with its customary procedures) in
multiples of$5,000,on June 1, 2016, and on any date thereafter, at a price equal to the principal
amount thereof and accrued interest to the date of redemption. The City Manager shall cause
notice of the call for redemption thereof to be published as required by law, and at least thirty
days prior to the designated redemption date, shall cause notice of call for redemption to be
mailed,by first class mail, to the registered holders of any Certificates to be redeemed at their
2
addresses as they appear on the bond register described in Section 4.06 hereof,but no defect in
or failure to give such mailed notice of redemption shall affect the validity of proceedings for the
redemption of any Certificate not affected by such defect or failure. Official notice of
redemption having been given as aforesaid, the Certificates or portions of Certificates so to be
redeemed shall, on the redemption date, become due and payable at the redemption price therein
specified and from and after such date (unless the City shall default in the payment of the
redemption price) such Certificates or portions of Certificates shall cease to bear interest. Upon
partial redemption of any Certificate, a new Certificate or Certificates will be delivered to the
owner without charge, representing the remaining principal amount outstanding.
[COMPLETE THE FOLLOWING PROVISIONS IF THERE ARE TERM CERTIFICATES-
ADD ADDITIONAL PROVISIONS IF THERE ARE MORE THAN TWO TERM
CERTIFICATES]
[Certificates maturing on June 1,20 and 20 (the Term Certificates) shall be
subject to mandatory redemption prior to maturity pursuant to the sinking fund requirements of
this Section 4.04 at a redemption price equal to the stated principal amount thereof plus interest
accrued thereon to the redemption date, without premium. The Registrar shall select for
redemption,by lot or other manner deemed fair, on June 1 in each of the following years the
following stated principal amounts of such Certificates:
Year Principal Amount
The remaining$ stated principal amount of such Certificates shall be paid at
maturity on June 1, 20
Year Principal,Amount
The remaining$ stated principal amount of such Certificates shall be paid at
maturity on June 1, 20
Notice of redemption shall be given as provided in the preceding paragraph.]
2.05. Appointment of Initial Registrar. The City hereby appoints Wells Fargo Sank,
National Association in Minneapolis, Minnesota, as the initial bond registrar, transfer agent and
paying agent (the Registrar). The Mayor and City Manager are authorized to execute and
deliver, on behalf of the City, 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
organized under the laws of the United States or one of the states of the United States and
authorized by law to conduct such business, such corporation shall be authorized to act as
successor Registrar. The City agrees to pay the reasonable and customary charges of the
Registrar for the services performed. The City reserves the right to remove the Registrar,
effective upon not less than thirty days' written notice and upon the appointment and acceptance
of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and
3
Certificates in its possession to the successor Registrar and shall deliver the bond register to the
successor Registrar.
2.46. Registration. The effect of registration and the rights and duties of the City and the
Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep a bond register in which the Registrar shall
provide for the registration of ownership of Certificates and the registration of transfers
and exchanges of Certificates entitled to be registered, transferred or exchanged.
(b) Transfer of Certificates. Upon surrender for transfer of any Certificate 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 Certificates 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 Certificates. Whenever any Certificates are surrendered by the
registered owner for exchange the Registrar shall authenticate and deliver one or more
new Certificates of a like aggregate principal amount and maturity,as requested by the
registered owner or the owner's attorney in writing.
(d) Cancellation. All Certificates surrendered upon any transfer or exchange
shall be promptly canceled by the Registrar and thereafter disposed of as directed by the
City.
(e) Improper or Unauthorized Transfer. When any Certificate is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Certificate 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 City and the Registrar may treat the person in
whose name any Certificate is at any time registered in the bond register as the absolute
owner of the Certificate, whether the Certificate shall be overdue or not, for the purpose
of receiving payment of or on account of, the principal of and interest on the Certificate
and for all other purposes; and all payments made to any registered owner or upon the
owner's order shall be valid and effectual to satisfy and discharge the liability upon
Certificate to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. For every transfer or exchange of Certificates
(except for an exchange upon a partial redemption of a Certificate), the Registrar may
impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax,
4
fee or other governmental charge required to be paid with respect to such transfer or
exchange.
(h) Mutilated, Lost, Stolen or Destroyed Certificates. In case any Certificate
shall become mutilated or be destroyed, stolen or lost,the Registrar shall deliver a new
Certificate of like amount, number,maturity date and tenor in exchange and substitution
for and upon cancellation of any such mutilated Certificate or in lieu of and in
substitution for any Certificate 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 Certificate destroyed, stolen or lost, upon filing with the Registrar of evidence
satisfactory to it that the Certificate 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 City and the Registrar shall be
named as obligees. All Certificates so surrendered to the Registrar shall be canceled by it
and evidence of such cancellation shall be given to the City. If the mutilated, destroyed,
stolen or lost Certificate has already matured or been called for redemption in accordance
with its terms it shall not be necessary to issue a new Certificate prior to payment.
(i) Authenticating Agent. The Registrar is hereby designated authenticating
agent for the Certificates, within the meaning of Minnesota Statutes, Section 475.55,
Subdivision 1, as amended.
0) Valid Obligations. All Certificates issued upon any transfer or exchange of
Certificates shall be the valid obligations of the City, evidencing the same debt, and
entitled to the same benefits under this Resolution as the Certificates surrendered upon
such transfer or exchange.
2.07. Execution, Authentication and Deliyery. The Certificates shall be prepared under
the direction of the City Manager and shall be executed on behalf of the City by the signatures of
the Mayor and the City 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 Certificates shall cease to be such officer before the delivery
of any Certificate, 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 Certificate 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 Certificate has
been duly executed by the manual signature of the Registrar. The executed certificate of
authentication on each Certificate shall be conclusive evidence that it has been authenticated and
delivered under this Resolution. When the Certificates have been prepared, executed and
authenticated,the City Manager 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 Certificates. The Certificates shall be prepared in substantially the
following form:
5
UNITED STATES OF AMERICA
STATE OF MINNESOTA
CITY OF EDEN PRAIRIE
GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF INDEBTEDNESS, SERIES
2008A
Interest Rate Maturity Date Date of Original Issue CUSIP No.
% June 1, 20 October 1, 2008
REGISTERED OWNER: CEDE &CO.
PRINCIPAL AMOUNT: THOUSAND DOLLARS
THE CITY OF EDEN PRAIRIE, MINNESOTA (the City),acknowledges itself to be
indebted and hereby promises to pay to the registered owner named above,or registered assigns,
the principal amount specified above on the maturity date specified above, and promises to pay
interest thereon from the date of original issue specified above or from the most recent interest
payment date to which interest has been paid or duly provided for, at the annual rate specified
above, payable on June 1 and December 1 of each year,commencing June 1, 2009, to the person
in whose name this Certificate is registered at the close of business on the fifteenth day(whether
or not a business day)of the immediately preceding month, all subject to the provisions referred
to herein with respect to the redemption of the principal of this Certificate before maturity.
Interest hereon shall be computed on the basis of a 360-day year composed of twelve 30-day
months. The interest hereon and, upon presentation and surrender hereof at the principal office
of the agent of the Registrar described below, the principal hereof are payable in lawful money
of the United States of America by check or draft drawn on Wells Fargo Bank,National
Association, in Minneapolis, Minnesota,as bond registrar, transfer agent and paying agent(the
Registrar), or its successor designated 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
and credit and taxing powers of the City have been and are hereby irrevocably pledged.
This Certificate is one of an issue in the aggregate principal amount of$3,120,000 issued
pursuant to a resolution adopted by the City Council on October 7, 2008 (the Resolution), to
finance the costs of acquisition of capital equipment, and is issued pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota thereunto enabling,
including Minnesota Statutes, Section 412.301 and Chapter 475.
Certificates maturing in 2017 and later years are each subject to redemption and
prepayment at the option of the City, in whole or in part, in such order of maturity dates as the
City may select and,within a maturity, by lot as selected by the Registrar(or, if applicable,by
the bond depository in accordance with its customary procedures) in multiples of$5,000 on
June 1,2016, and on any date thereafter, at a price equal to the principal amount thereof plus
interest accrued to the date of redemption. The City will cause notice of the call for redemption
6
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 Certificate 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 Certificate not affected by such
defect or failure. Official notice of redemption having been given as aforesaid, the Certificates
or portions of Certificates 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 City
shall default in the payment of the redemption price)such Certificates or portions of Certificates
shall cease to bear interest. Upon partial redemption of any Certificate, a new Certificate or
Certificates will be delivered to the registered owner without charge,representing the remaining
principal amount
[COMPLETE THE FOLLOWING PROVISIONS IF THERE ARE TERM CERTIFICATES-
ADD ADDITIONAL PROVISIONS IF THERE ARE MORE THAN TWO TERM
CERTIFICATES]
[Certificates maturing in the year 20 and 20 shall be subject to mandatory
redemption, at a redemption price equal to their principal amount plus interest accrued thereon to
the redemption date,without premium, on June 1 in each of the years shown below, in an amount
equal to the following principal amounts:
Term Certificates Maturing in 20-- Term Certificates Maturing in 20---
Sinking Fund Aggregate Sinking Fund Aggregate
Payment Date Principal Amount Payment Date Principal Amount
Notice of redemption shall be given as provided in the preceding paragraph.]
As provided in the Resolution and subject to certain limitations set forth therein, this
Certificate is transferable upon the books of the City at the 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 Certificates of other authorized denominations. Upon such transfer or exchange the
City will cause a new Certificate or Certificates 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 Certificates have been designated by the City as"qualified tax-exempt obligations"
pursuant to Section 265(b)(3)of the Internal Revenue Code of 1986.
7
The City and the Registrar may deem and treat the person in whose name this Certificate
is registered as the absolute owner hereof, whether this Certificate is overdue or not, for the
purpose of receiving payment and for all other purposes, and neither the City 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 Certificate in
order to make it a valid and binding general obligation of the City in accordance with its terms,
have been done, do exist, have happened and have been performed as so required; that, prior to
the issuance hereof, the City Council has levied ad valorem taxes on all taxable property in the
City,which taxes will be collectible for the years and in amounts sufficient to produce sums not
less than five percent in excess of the principal of and interest on the Certificates when due, and
has appropriated such taxes to its General Obligation Equipment Certificates of Indebtedness,
Series 2008A Certificate Fund for the payment of such principal and interest; that if necessary
for payment of such principal and interest, additional ad valorem taxes are required to be levied
upon all taxable property in the City,without limitation as to rate or amount; and that the
issuance of this Certificate, together with all other indebtedness of the City outstanding on the
date hereof and on the date of its actual issuance and delivery,does not cause the indebtedness of
the City to exceed any constitutional or statutory limitation of indebtedness.
This Certificate 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 shall
have been executed by manual signature of the Registrar.
IN WITNESS WHEREOF,the City of Eden Prairie,Minnesota,by its City Council,has
caused this Certificate to be executed on its behalf by the facsimile signatures of the Mayor and
City Manager.
CITY OF EDEN PRAIRIE,MINNESOTA
(facsimile signature -- City Manager) (facsimile signature--Mayor}
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates delivered pursuant to the Resolution mentioned within.
Date of Authentication: WELLS FARGO BANK,NATIONAL
ASSOCIATION, as Registrar
By
Authorized Representative
8
The following abbreviations, when used in the inscription on the face of this Certificate, shall be
construed as though they were written out in full according to the applicable laws or regulations:
TEN COM - as tenants in common UTMA ................... as Custodian for.,..,.,..............
(Gust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Transfers to Minors Act ..............
(State)
]T TEN-- as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Certificate and all rights thereunder, and does hereby irrevocably constitute and
appoint attorney to transfer the said Certificate on the books kept for
registration of the within Certificate, 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 Certificate in every particular,without alteration or
enlargement or any change whatsoever.
Signature Guaranteed:
Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements
of the Registrar, which requirements include membership or participation in STAMP or such
other"signature guaranty program" as may be determined by the Registrar in addition to or in
substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
(end of certificate form]
SECTION 3. GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF
INDEBTEDNESS, SERIES 2008A CERTIFICATE FUND. S❑ long as any of the Certificates
are outstanding and any principal of or interest thereon unpaid, the Finance Director shall
maintain a separate debt service fund on the official books and records of the City to be known
as the General Obligation Equipment Certificates of Indebtedness, Series 2008A Certificate Fund
(the Certificate Fund), and the principal of and interest on the Certificates shall be payable from
the Certificate Fund, The City irrevocably appropriates to the Certificate Fund: (a) any amount
in excess of$ received from the Purchaser; (b) all taxes levied and collected in
accordance with this Resolution; and (c)all other moneys as shall be appropriated by the City
9
Council to the Certificate Fund from time to time. If the balance in the Certificate Fund is at any
time insufficient to pay all interest and principal then due on all Certificates payable therefrom,
the payment shall be made from any fund of the City which is available for that purpose, subject
to reimbursement from the Certificate Fund when the balance therein is sufficient, and the City
Council covenants and agrees that it will each year levy a sufficient amount of ad valorem taxes
to take care of any accumulated or anticipated deficiency, which levy is not subject to any
constitutional or statutory limitation.
SECTION 4. PLEDGE OF TAXING POWERS. For the prompt and full payment of the
principal of and interest on the Certificates as such payments respectively become due,the full
faith, credit and unlimited taxing powers of the City shall be and are hereby irrevocably pledged.
In order to produce aggregate amounts not less than 5% in excess of the amount needed to meet
when due the principal and interest payments on the Certificates, ad valorem taxes are hereby
levied on all taxable property in the City. The taxes are to be levied and collected in the
following years and amounts:
Levy Years Collection Years Amount
2008-2016 2009-2017 See attached Levy Computation
The taxes shall be irrepealable as long as any of the Certificates are outstanding and unpaid,
provided that the City reserves the right and power to reduce the tax levies in accordance with
the provisions of Minnesota Statutes, Section 475.61.
SECTION 5. CERTIFICATE FUND BALANCE RESTRICTION. In order to ensure
compliance with the Code, and applicable Treasury Regulations(the Regulations), upon
allocation of any funds to the Certificate Fund, the balance then on hand in the Fund shall be
ascertained. If it exceeds the amount of principal and interest on the Certificates to become due
and payable through rune 1 next following,plus a reasonable carryover equal to 1112th of the
debt service due in the following bond year, the excess shall (unless an opinion is otherwise
received from bond counsel)be used to prepay or purchase Certificates,or invested at a yield
which does not exceed the yield on the Certificates calculated in accordance with Section 148 of
the Code.
SECTION 6. DEFEASANCE. When all of the Certificates have been discharged as provided in
this section, all pledges, covenants and other rights granted by this resolution to the registered
owners of the Certificates shall cease. The City may discharge its obligations with respect to any
Certificates 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 Certificate 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
City may also discharge its obligations with respect to any prepayable Certificates 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 provided herein. The City may also at any time discharge its obligations with respect to
10
any Certificates, 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 and interest to become due thereon to maturity
or earlier designated redemption date. Provided, however, that if such deposit is made more than
ninety days before the maturity date or specified redemption date of the Certificates to be
discharged, the City shall have received a written opinion of Bond Counsel to the effect that such
deposit does not adversely affect the exemption of interest on any Certificates from federal
income taxation and a written report of an accountant or investment banking firm verifying that
the deposit is sufficient to pay when due all of the principal and interest on the Certificates to be
discharged on and before their maturity dates or earlier designated redemption date.
SECTION 7. CERTIFICATION OF PROCEEDINGS.
7.01. Re istg ration of Certificates. The City Manager is hereby authorized and directed to
file a certified copy of this resolution with the County Auditor of Hennepin County and obtain a
certificate that the Certificates have been duly entered upon the County Auditor's bond register
and that the tax for the payment of the Certificates has been levied as required by law.
7.02. Authentication of Transcript. The officers of the City and the County Auditor are
hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey& Whitney
LLP, Bond Counsel, certified copies of all proceedings and records relating to the Certificates
and such other affidavits, certificates and information as may be required to show the facts
relating to the legality and marketability of the Certificates, 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 City as to the correctness of all statements contained therein.
7.03. Official Statement. The Preliminary Official Statement relating to the Certificates,
dated , 2008,relating to the Certificates prepared and distributed by Northland
Securities, Inc. is hereby approved. Northland Securities, Inc., is hereby authorized on behalf of
the City to prepare and distribute to the Purchaser within seven business days from the date
hereof, a supplement to the Official Statement listing the offering price, the interest rates, selling
compensation,delivery date, the underwriters and such other information relating to the
Certificates required to be included in the Official Statement by Rule 15c2-12 adopted by the
Securities and Exchange Commission(the SEC) under the Securities Exchange Act of 1934.
The officers of the City are hereby authorized and directed to execute such certificates as may be
appropriate concerning the accuracy,completeness and sufficiency of the Official Statement.
SECTION 8. TAX COVENANTS; ARBITRAGE MATTERS AND CONTINUING
DISCLOSURE,
I
8.01. General Tax Covenant. The City covenants and agrees with the registered owners
from time to time of the Certificates that it will not take, or permit to be taken by any of its
officers, employees or agents, any actions that would cause interest on the Certificates to become
includable in gross income of the recipient under the Internal Revenue Code of 1986 (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 Certificates will not become includable in
gross income of the recipient under the Code and the Regulations. In particular, the City
covenants and agrees that all proceeds of the Certificates will be expended solely for the
payment of the costs of acquisition of capital equipment to be owned and maintained by the City
and used in the City's general governmental operations. The City shall not enter into any lease,
use or other agreement with any non-governmental person relating to the use of the equipment or
security for the payment of the Certificates which might cause the Certificates to be considered
"private activity bonds" or"private loan bonds" pursuant to Section 141 of the Code.
8.02. Arbitrage Certification. The Mayor and City Manager being the officers of the
City charged with the responsibility for issuing the Certificates 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 applicable Regulations, stating the facts, estimates
and circumstances in existence on the date of issue and delivery of the Certificates which make it
reasonable to expect that the proceeds of the Certificates will not be used in a manner that would
cause the Certificates to be "arbitrage bonds" within the meaning of the Code and Regulations.
8.03. Arbitrage Rebate Exemption. (a) It is hereby found that the City has general
taxing powers, that no Certificate is a"private activity bond"within the meaning of Section 141
of the Code, that 95%or more of the net proceeds of the Certificate are to be used for local
governmental activities of the City, and that the aggregate face amount of all tax-exempt
obligations(other than private activity bonds) issued by the City and all subordinate entities
thereof during the year 2008 is not reasonably expected to exceed $5,000,000. Therefore,
pursuant to the provisions of Section 148(f)(4)(D)of the Code, the City shall not be required to
comply with the arbitrage rebate requirements of paragraphs(2) and(3)of Section 148(f)of the
Code.
(b)Notwithstanding the provisions of paragraph(a) of this Section 8.03, if the arbitrage
rebate provisions of Section 148(f) of the Code applies to the Certificate, the City hereby
covenants and agrees to make the determinations,retain records and rebate to the United States
the amounts at the times and in the manner required by said Section 148(f) and applicable
Regulations.
8.04. Qualified Tax-Exempt Obligations. The Council hereby designates the Certificates
as"qualified tax-exempt obligations" for purposes of Section 265(b)(3)of the Code relating to
the disallowance of interest expense for financial institutions, and hereby finds that the
reasonably anticipated amount of tax-exempt obligations which are not private activity bonds
(not treating qualified 501(c)(3)bonds under Section 145 of the Code as private activity bonds
for the purpose of this representation) which will be issued by the City and all subordinate
entities during calendar year 2008 does not exceed $10,000,000.
12
8.05. Reimbursement. The City certifies that the proceeds of the Certificates will not be
used by the City to reimburse itself for any expenditure with respect to the equipment which the
City paid or will have paid more than 60 days prior to the issuance of the Certificates unless,
with respect to such prior expenditures, the City shall have made a declaration of official intent
which complies with the provisions of Section 1.150-2 of the Regulations;provided that this
certification shall not apply(i)with respect to certain de minimis expenditures, if any,with
respect to the equipment meeting the requirements of Section 1.1 50-2(f)(1) of the Regulations, or
(ii)with respect to "preliminary expenditures" for the equipment as defined in Section 1.150-
2(f)(2) of the Regulations which in the aggregate do not exceed 20%of the "issue price"of the
Certificates.
8.06. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public
availability of certain information relating to the Certificates and the security therefor and to
permit the Purchaser and other participating underwriters in the primary offering of the
Certificates to comply with amendments to Rule 15c2-12 promulgated by the SEC under the
Securities Exchange Act of 1934(17 C.F.R. § 240.15c2-12),relating to continuing disclosure(as
in effect and interpreted from time to time, the Rule),which will enhance the marketability of the
Certificates,the City hereby makes the following covenants and agreements for the benefit of the
Owners (as hereinafter defined) from time to time of the outstanding Certificates. The City is the
only obligated person in respect of the Certificates within the meaning of the Rule for purposes
of identifying the entities in respect of which continuing disclosure must be made. The City has
complied in all material respects with any undertaking previously entered into by it under the
Rule. If the City fails to comply with any provisions of this section, any person aggrieved
thereby, including the Owners of any outstanding Certificates,may take whatever action at law
or in equity may appear necessary or appropriate to enforce performance and observance of any
agreement or covenant contained in this section, including an action for a writ of mandamus or
specific performance. Direct, indirect, consequential and punitive damages shall not be
recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything
to the contrary contained herein, in no event shall a default under this section constitute a default
under the Certificates or under any other provision of this resolution. As used in this section,
Owner or Certificateowner means, in respect of a Certificate,the registered owner or owners
thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner(as
hereinafter defined)thereof, if such Beneficial Owner provides to the Registrar evidence of such
beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used
herein, Beneficial Owner means, in respect of a Certificate, any person or entity which (i)has the
power, directly or indirectly, to vote or consent with respect to,or to dispose of ownership of,
such Certificate(including persons or entities holding Certificates through nominees,
depositories or other intermediaries),or(b) is treated as the owner of the Certificate for federal
income tax purposes.
(b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection
(c)hereof, either directly or indirectly through an agent designated by the City, the following
information at the following times:
(1) on or before 365 days after the end of each fiscal year of the City, commencing with
the fiscal year ending December 31, 2008, the following financial information and
13
operating data in respect of the City(the Disclosure Information):
(A) the audited financial statements of the City for such fiscal year, containing
balance sheets as of the end of such fiscal year and a statement of operations,
changes in fund balances and cash flows for the fiscal year then ended,showing
in comparative form such figures for the preceding fiscal year of the City,
prepared in accordance with generally accepted accounting principles
promulgated by the Financial Accounting Standards Board as modified in
accordance with the governmental accounting standards promulgated by the
Governmental Accounting Standards Board or as otherwise provided under
Minnesota law, as in effect from time to time, or, if and to the extent such
financial statements have not been prepared in accordance with such generally
accepted accounting principles for reasons beyond the reasonable control of the
City, noting the discrepancies therefrom and the effect thereof, and certified as
to accuracy and completeness in all material respects by the fiscal officer of the
City; and
(B) to the extent not included in the financial statements referred to in paragraph(A)
hereof, the information for such fiscal year or for the period most recently
available of the type contained in the Official Statement under the captions
ECONOMIC AND FINANCIAL INFORMATION; SUMMARY OF DEBT
AND DEBT STATISTICS; GENERAL INFORMATION- "Major Employers"
and"Building Permits."
Notwithstanding the foregoing paragraph, if the audited financial statements are not available by
the date specified,the City shall provide on or before such date unaudited financial statements in
the format required for the audited financial statements as part of the Disclosure Information and,
within 10 days after the receipt thereof, the City shall provide the audited financial statements.
Any or all of the Disclosure Information may be incorporated by reference, if it is updated as
required hereby, from other documents, including official statements,which have been submitted
to each of the repositories hereinafter referred to under subsection(c)or the SEC. If the
document incorporated by reference is a final official statement, it must be available from the
Municipal Securities Rulemaking Board. The City shall clearly identify in the Disclosure
Information each document so incorporated by reference. If any part of the Disclosure
Information can no longer be generated because the operations of the City have materially
changed or been discontinued, such Disclosure Information need no longer be provided if the
City includes in the Disclosure Information a statement to such effect;provided, however, if such
operations have been replaced by other City operations in respect of which data is not included in
the Disclosure Information and the City determines that certain specified data regarding such
replacement operations would be a Material Fact (as defined in paragraph(2)hereof), then, from
and after such determination, the Disclosure Information shall include such additional specified
data regarding the replacement operations. If the Disclosure Information is changed or this
section is amended as permitted by this paragraph(b)(1) or subsection(d), then the City shall
include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an
explanation of the reasons for the amendment and the effect of any change in the type of
financial information or operating data provided.
14
(2) In a timely manner, notice of the occurrence of any of the following events which is
a Material Fact(as hereinafter defined):
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(I) Defeasances;
(3) Release, substitution, or sale of property securing repayment of the securities;
and
(K) Rating changes.
As used herein, a Material Fact is a fact as to which a substantial likelihood exists that a
reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a
Certificate or, if not disclosed, would significantly alter the total information otherwise available
to an investor from the Official Statement, information disclosed hereunder or information
generally available to the public. Notwithstanding the foregoing sentence, a Material Fact is also
an event that would be deemed material for purposes of the purchase, holding or sale of a
Certificate within the meaning of applicable federal securities laws, as interpreted at the time of
discovery of the occurrence of the event.
(3) In a timely manner,notice of the occurrence of any of the following events or
conditions:
(A) the failure of the City to provide the Disclosure Information required under
paragraph(b)(1) at the time specified thereunder;
(S) the amendment or supplementing of this section pursuant to subsection(d),
together with a copy of such amendment or supplement and any explanation
provided by the City under subsection(d)(2);
(C) the termination of the obligations of the City under this section pursuant to
subsection(d);
(D) any change in the accounting principles pursuant to which the financial
statements constituting a portion of the Disclosure Information are prepared;
and
(E) any change in the fiscal year of the City.
(c) Manner of Disclosure. The City agrees to make available the information described in
subsection(b)to the following entities by telecopy, overnight delivery,mail or other means, as
appropriate:
(1) the information described in paragraph(1)of subsection(b),to each then nationally
15
recognized municipal securities information repository under the Rule and to any
state information depository then designated or operated by the State of Minnesota
as contemplated by the Rule(the State Depository), if any;
(2) the information described in paragraphs (2) and(3) of subsection(b), to the
Municipal Securities Rulemaking Board and to the State Depository, if any; and
(3) the information described in subsection(b), to any rating agency then maintaining a
rating of the Certificates at the request of the City and, at the expense of such
Certificateowner, to any Certificateowner who requests in writing such information,
at the time of transmission under paragraphs (1)or(2) of this subsection(c), as the
case may be, or, if such information is transmitted with a subsequent time of release,
at the time such information is to be released.
(d) Term: Amendments: Interpretation.
(1) The covenants of the City in this section shall remain in effect so long as any
Certificates are outstanding. Notwithstanding the preceding sentence, however, the
obligations of the City under this section shall terminate and be without further
effect as of any date on which the City delivers to the Registrar an opinion of Bond
Counsel to the effect that,because of legislative action or final judicial or
administrative actions or proceedings,the failure of the City to comply with the
requirements of this section will not cause participating underwriters in the primary
offering of the Certificates to be in violation of the Rule or other applicable
requirements of the Securities Exchange Act of 1934, as amended, or any statutes or
laws successory thereto or amendatory thereof.
(2) This section(and the form and requirements of the Disclosure Information)may be
amended or supplemented by the City from time to time, without notice to(except as
provided in paragraph (c)(3)hereof} or the consent of the Owners of any
Certificates, by a resolution of this Council filed in the office of the recording officer
of the City accompanied by an opinion of Bond Counsel,who may rely on
certificates of the City and others and the opinion may be subject to customary
qualifications, to the effect that: (i)such amendment or supplement (a) is made in
connection with a change in circumstances that arises from a change in law or
regulation or a change in the identity,nature or status of the City or the type of
operations conducted by the City, or(b) is required by, or better complies with, the
provisions of paragraph(b)(5)of the Rule; (ii)this section as so amended or
supplemented would have complied with the requirements of paragraph(b)(5) of the
Rule at the time of the primary offering of the Certificates, giving effect to any
change in circumstances applicable under clause (i)(a)and assuming that the Rule as
in effect and interpreted at the time of the amendment or supplement was in effect at
the time of the primary offering; and (iii) such amendment or supplement does not
materially impair the interests of the Certificateowners under the Rule.
If the Disclosure Information is so amended, the City agrees to provide,
16
contemporaneously with the effectiveness of such amendment, an explanation of the
reasons for the amendment and the effect, if any, ❑f the change in the type of
financial information or operating data being provided hereunder.
(3) This section is entered into to comply with the continuing disclosure provisions of
the Rule and should be construed so as to satisfy the requirements of paragraph
(b)(5) of the Rule.
ADOPTED by the City Council on October 7, 2008.
a 64n�
PH Young, Mat&
ATTEST:
K leen Nrta, City Clerk
17