HomeMy WebLinkAboutResolution - 2014-69 - Aquatic Expansion Project - Authorizing GO Tax Abatement Bonds - 06/17/2014 CITY OF EDEN PRAIRIE
HENNEPIN COUNTY, MINNESOTA
RESOLUTION NO. 2014-69
RESOLUTION AUTHORIZING ISSUANCE, AWARDING
SALE, PRESCRIBING THE FORM AND DETAILS AND
PROVIDING FOR THE PAYMENT OF S17,155,000
GENERAL OBLIGATION TAX ABATEMENT BONDS,
SERIES 2014A
BE IT RESOLVED by the City Council (the "Council") of the City of Eden Prairie,
Minnesota(the "City"), as follows:
SECTION 1. AUTHORIZATION, SALE AND AWARD
1.01. Authorization
To pay all or a portion of the costs of the construction and equipping of an expansion of
the City Aquatics Center (the "Project") or to pay principal of and interest on general obligation
bonds to be issued by the City to pay for such Project, this Council, by resolution adopted May 6,
2014, has granted an abatement of property taxes to be imposed by the City on certain parcels
located within the City (the "Abatement Parcels") pursuant to Minnesota Statutes, Sections
469.1812 to 469.1815, for a period of twenty (20) years commencing with property taxes
payable in 2015 and concluding with property taxes payable in 2034 (the "Tax Abatement," and
the revenues received by the City from such Tax Abatement, the "Abatement Revenue"). The
City has inquired of Independent School District No. 272 (Eden Prairie), Minnesota (the
"District") and Iiennepin County, Minnesota (the "County") regarding the granting of an
abatement on the Abatement Parcels. By motion approved May 7, 2014, the District declined to
grant an abatement.
This Council hereby determines that it is in the best interests of the City to issue its
General Obligation Tax Abatement Bonds, Series 2014A (the "Bonds") in the principal amount
of$17,155,000, pursuant to Minnesota Statutes, Chapter 475 and Section 469.1814, to Finance
the Project and to fiend costs of issuance of the Bonds.
1.02. Sale
Pursuant to the Preliminary Official Statement prepared on behalf of the City by
Northland Securities, inc., financial consultants to the City, sealed or electronic proposals for the
purchase of the Bonds were received at or before the time specified for receipt of proposals. The
proposals have been opened and 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 Piper .laffray & Co., in Minneapolis, Minnesota (the
"Purchaser"), to purchase the Bonds at a price of$17,556,150.74 plus accrued interest, if any, on
all Bonds to the day of delivery and payment, on the further terms and conditions hereinafter set
forth.
CITY OF EDEN PRAIRIE
HENNEPIN COUNTY, MINNESOTA
RESOLUTION NO. 2014-70
RESOLUTION AUTHORIZING ISSUANCE, AWARDING
SALE, PRESCRIBING THE FORM AND DETAILS AND
PROVIDING FOR THE PAYMENT OF $17,155,000
GENERAL OBLIGATION TAX ABATEMENT BONDS,
SERIES 2014A
BE IT RESOLVED by the City Council (the "Council") of the City of Eden Prairie,
Minnesota (the "City"), as follows:
SECTION 1. AUTHORIZATION, SALE AND AWARD
1.01. Authorization
To pay all or a portion of the costs of the construction and equipping of an expansion of
the City Aquatics Center (the "Project") or to pay principal of and interest on general obligation
bonds to be issued by the City to pay for such Project, this Council, by resolution adopted May 6,
2014, has granted an abatement of property taxes to be imposed by the City on certain parcels
located within the City (the "Abatement Parcels") pursuant to Minnesota Statutes, Sections
469.1812 to 469.1815, for a period of twenty (20) years commencing with property taxes
payable in 2015 and concluding with property taxes payable in 2034 (the "Tax Abatement," and
the revenues received by the City from such Tax Abatement, the "Abatement Revenue"). The
City has inquired of Independent School District No. 272 (Eden Prairie), Minnesota (the
"District") and Hennepin County, Minnesota (the "County") regarding the granting of an
abatement on the Abatement Parcels. By motion approved May 7, 2014, the District declined to
grant an abatement.
This Council hereby determines that it is in the best interests of the City to issue its
General Obligation Tax Abatement Bonds, Series 2014A (the "Bonds") in the principal amount
of$17,155,000, pursuant to Minnesota Statutes, Chapter 475 and Section 469.1814, to finance
the Project and to fund costs of issuance of the Bonds.
1.02. Sale
Pursuant to the Preliminary Official Statement prepared on behalf of the City by
Northland Securities, Inc., financial consultants to the City, sealed or electronic proposals for the
purchase of the Bonds were received at or before the time specified for receipt of proposals. The
proposals have been opened and 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 Piper Jaffray & Co., in Minneapolis, Minnesota (the
"Purchaser"), to purchase the Bonds at a price of$17,556,150.74 plus accrued interest, if any, on
all Bonds to the day of delivery and payment, on the further terms and conditions hereinafter set
forth.
1.03. Award
The sale of the Bonds is hereby awarded to the Purchaser, and the Mayor and City
Manager are hereby authorized and directed to execute a contract on the part of the City with the
Purchaser for the sale of the Bonds. The good faith deposit of the Purchaser shall be retained
and deposited by the City until the Bonds have been delivered and shall be deducted from the
purchase price paid at settlement.
SECTION 2. BOND TERMS; REGISTRATION; EXECUTION AND DELIVERY
2.01. Issuance of Bonds
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 Bonds having been done, now existing, having happened and having been
performed, it is now necessary for the Council to establish the form and terms of the Bonds, to
provide security therefor and to issue the Bonds forthwith.
2.02. Form of Bonds
The Bonds shall be prepared in substantially the following form:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF EDEN PRAIRIE
GENERAL OBLIGATION TAX ABATEMENT BOND, SERIES 2014A
No. R- $
Rate Maturity Date Date of Original Issue CUSIP No.
January 15, July 15, 2014
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
THE CITY OF EDEN PRAIRIE, MINNESOTA (the "City"), acknowledges itself to be
indebted and, for value received, 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 (as hereinafter defined) to which interest has been paid or duly
provided for, at the annual rate specified above, payable on January 15 and July 15 of each year,
commencing July 15, 2015 (each such date, an "Interest Payment Date"), all subject to the
provisions referred to herein with respect to the redemption of the principal of this Bond before
maturity. The interest so payable on any Interest Payment Date shall be paid to the person in
whose name this Bond is registered at the close of business on the first day (whether or not a
business day) of the month in which such interest is payable. 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 Registrar described below,
the principal hereof are payable in lawful money of the United States of America 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 Bond is one of an issue in the aggregate principal amount of$17,155,000 issued
pursuant to a resolution adopted by the City Council on June 17, 2014 (the "Resolution"), to
finance an expansion of the City Aquatics Center (the "Project"). This Bond is issued by
authority of and in strict accordance with the provisions of the Constitution and laws of the State
of Minnesota thereunto enabling, including Minnesota Statutes, Chapter 475 and Section
469.1814. For the full and prompt payment of the principal of and interest on the Bonds as the
same become due, the full faith, credit and taxing power of the City have been and are hereby
irrevocably pledged. The Bonds are issuable only in fully registered form, in denominations of
$5,000 or any integral multiple thereof, of single maturities.
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Bonds maturing in 2023 and later years are each subject to redemption and prepayment at
the option of the City, in whole or in part, and if in part in such order of maturity dates as the
City may select and 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 as to Bonds maturing on the
same date, on January 15, 2022, and on any date thereafter, at a price equal to the principal
amount thereof plus accrued interest to the date of redemption. Prior to the date specified for the
redemption of any Bond prior to its stated maturity date, the City will cause notice of the call for
redemption to be published if and as required by law, and, at least thirty days prior to the
designated redemption date, will cause notice of the call to be mailed by first class mail (or, if
applicable, provided in accordance with the operational arrangements of the bond depository), to
the registered owner of any Bond 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 Bond not
affected by such defect or failure. Official notice of redemption having been given as aforesaid,
the Bonds or portions of Bonds 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 Bonds or portions of such Bonds shall
cease to bear interest. Upon partial redemption of any Bond, a new Bond or Bonds will be
delivered to the registered owner without charge, representing the remaining principal amount
outstanding.
The City and the Registrar may deem and treat the person in whose name this Bond is
registered as the absolute owner hereof, whether this Bond 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.
As provided in the Resolution and subject to certain limitations set forth therein, this
Bond is transferable upon the books of the City at the principal office of the Registrar, by the
registered owner hereof in person or by his 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 his attorney; and may also be surrendered in exchange for Bonds of
other authorized denominations. Upon such transfer or exchange, the City will cause a new
Bond or Bonds 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.
Notwithstanding any other provisions of this Bond, so long as this Bond is registered in
the name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any
other nominee of The Depository 'Trust Company or other securities depository, the Registrar
shall pay all principal of and interest on this Bond, and shall give all notices with respect to this
Bond, only to Cede & Co. or other nominee in accordance with the operational arrangements of
The Depository Trust Company or other securities depository as agreed to by the City.
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 Bond in order
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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 has pledged and appropriated to the sinking fund established for the
payment of the Bonds, tax abatements to be derived by the City from certain specified properties
within the City; that, if necessary to pay the principal and interest on this Bond, 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 Bond does not cause the indebtedness of the City to exceed
any constitutional or statutory limitation.
This Bond 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 the Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Eden Prairie, Minnesota, by its City Council, has
caused this Bond 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
Dated
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Registrar
By
Authorized Representative
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 the applicable laws or regulations:
TEN COM as tenants in common UTMA ........................... as Custodian for .............
(Cust) (Minor)
TEN ENT as tenants by the entireties under Uniform Transfers to Minors Act ..................
(State)
JT TEN as joint tenants with right of survivorship and not as tenants in common
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Additional abbreviations may also be used.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint
attorney to transfer the said Bond on the books kept for registration of
the within Bond, 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 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 BOND FORM]
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2.03. Maturities; Interest Rates; Denominations and Payment
The Bonds shall be originally dated as of July 15, 2014, shall be in the denomination of
$5,000 each, or any integral multiple thereof, of single maturities, shall mature on January 15 in
the years and amounts stated below, and shall bear interest from date of original issue until paid
or duly called for redemption at the annual rates set forth opposite such years and amounts, as
follows:
Year Amount 6) Rate % Year Amount ($) Rate
2017 350,000 2.000 2027 865,000 3.000
2018 460,000 2.000 2028 885,000 3.000
2019 445,000 3.000 2029 1,210,000 3.000
2020 900,000 3.000 2030 1,025,000 3.500
2021 910,000 3.000 2031 1,060,000 3.500
2022 925,000 3.000 2032 1,100,000 3.500
2023 920,000 3.000 2033 1,130,000 3.750
2024 930,000 3.000 2034 1,165,000 3.750
2025 815,000 3.000 2035 1,210,000 3.750
2026 850,000 3.000
The Bonds shall be issuable only in fully registered form. The interest thereon and, upon
surrender of each Bond at the principal office of the Registrar described herein, the principal
amount thereof, shall be payable by check or draft issued by the Registrar (as hereinafter
defined); provided that, so long as the Bonds are registered in the name of a securities
depository, or a nominee thereof, in accordance with Section 2.09 hereof, principal and interest
shall be payable in accordance with the operational arrangements of the securities depository.
2.04. Dates and Interest Payment Dates
Upon initial delivery of the Bonds pursuant to Section 2.08 and upon any subsequent
transfer or exchange pursuant to Section 2.07, the date of authentication shall be noted on each
Bond so delivered, exchanged or transferred. Interest on the Bonds shall be payable each
January 15 and July 15, commencing July 15, 2015 (each such date, an "Interest Payment
Date"), to the person in whose name the Bonds are registered on the Bond Register (as
hereinafter defined) at the Registrar's close of business on the first day of the calendar month in
which such Interest Payment Date falls, 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.
2.05. Redemption
Bonds maturing in 2023 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
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depository in accordance with its customary procedures) in multiples of$5,000, on January 15,
2022, and on any date thereafter, at a price equal to the principal amount thereof and accrued
interest to the date of redemption. The City Clerk shall cause notice of the call for redemption
thereof to be published if and 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 Bond to be redeemed at their addresses as they appear on the bond
register described in Section 2.07 hereof, provided that notice shall be given to any securities
depository in accordance with its operational arrangements. No defect in or failure to give such
mailed notice of redemption shall affect the validity of proceedings for the redemption of any
Bond not affected by such defect or failure. Official notice of redemption having been given as
aforesaid, the Bonds or portions of Bonds 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 Bonds or portions of
Bonds shall cease to bear interest. Upon partial redemption of any Bond, a new Bond or Bonds
will be delivered to the registered owner without charge, representing the remaining principal
amount outstanding.
2.06. Appointment of Initial Registrar
The City hereby appoints Wells Fargo Bank, 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 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' notice and upon the
appointment of and acceptance by a successor Registrar, in which event the predecessor
Registrar shall deliver all cash and Bonds in its possession to the successor Registrar and shall
deliver the Bond Register to the successor Registrar.
2.07. Registration
The effect of registration and the rights and duties of the City and the Registrar with
respect thereto shall be as follows:
(a) Re gib. The Registrar shall keep at its principal corporate trust office a bond
register(the "Bond Register") in which the Registrar shall provide for the registration of
ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to
be registered, transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of any Bond 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 Bonds of a like aggregate principal amount and maturity, as requested by the
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transferor. The Registrar may, however, close the books for registration of any transfer
after the first day of the month in which such Interest Payment Date falls until such
Interest Payment Date.
(c) Exchange of Bonds. Whenever any Bonds are surrendered by the registered
owner for exchange the Registrar shall authenticate and deliver one or more new Bonds
of a like aggregate principal amount and maturity, as requested by the registered owner or
the owner's attorney in writing.
(d) Cancellation. All Bonds 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 Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Bond 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 Bond is at any time registered in the Bond Register as the absolute
owner of the Bond, whether the Bond shall be overdue or not, for the purpose of
receiving payment of or on account of, the principal of and interest on the Bond 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 Bond to the
extent of the sum or sums so paid.
(g) Taxes, Fees and Char. For every transfer or exchange of Bonds (except
for an exchange upon a partial redemption of a Bond), 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 Bonds. In case any Bond shall become
mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like
amount, number, maturity date and tenor in exchange and substitution for and upon
cancellation of any such mutilated Bond or in lieu of and in substitution for any Bond
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 Bond destroyed, stolen or lost,
upon filing with the Registrar of evidence satisfactory to it that the Bond 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 Bonds 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 Bond has already matured or been
called for redemption in accordance with its terms it shall not be necessary to issue a new
Bond prior to payment.
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(i) Authenticating Agent. The Registrar is hereby designated authenticating
agent for the Bonds, within the meaning of Minnesota Statutes, Section 475.55, subd. 1,
as amended.
0) Valid Obligations. All Bonds issued upon any transfer or exchange of Bonds
shall be the valid obligations of the City, evidencing the same debt, and entitled to the
same benefits under this Resolution as the Bonds surrendered upon such transfer or
exchange.
2.08. Execution, Authentication and Delivery
The Bonds shall be prepared under the direction of the City Clerk and shall be executed
on behalf of the City by the signatures of the Mayor and 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 Bonds shall cease
to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless
be valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery. Notwithstanding such execution, no Bond 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 Bond has been duly executed by the manual signature of an authorized
representative of the Registrar. Certificates of authentication on different Bonds need not be
signed by the same representative. The executed certificate of authentication on each Bond shall
be conclusive evidence that it has been authenticated and delivered under this Resolution. When
the Bonds have been prepared, executed and authenticated, the City 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.
2.09. Securities Depository
For purposes of this section the following terms shall have the following meanings:
"Beneficial Owner" shall mean, whenever used with respect to a Bond, the person
in whose name such Bond is recorded as the beneficial owner of such Bond by a
Participant on the records of such Participant, or such person's subrogee.
"Cede & Co." shall mean Cede & Co., the nominee of DTC, and any successor
nominee of DTC with respect to the Bonds.
"DTC" shall mean The Depository Trust Company of New York, New York.
"Participant" shall mean any broker-dealer, bank or other financial institution for
which DTC. holds Bonds as securities depository.
"Representation Letter" shall mean the Representation Letter pursuant to which
the sender agrees to comply with DTC's Operational Arrangements.
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(a) The Bonds shall be initially issued as separately authenticated fully registered bonds,
and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon
initial issuance, the ownership of such Bonds shall be registered in the Bond Register in the
name of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its
nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of
payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be
redeemed, if any, giving any notice permitted or required to be given to registered owners of
Bonds under this Resolution, registering the transfer of Bonds, and for all other purposes
whatsoever, and neither the Registrar nor the City shall be affected by any notice to the contrary.
Neither the Registrar nor the City shall have any responsibility or obligation to any Participant,
any person claiming a beneficial ownership interest in the Bonds under or through DTC or any
Participant, or any other person which is not shown on the Bond Register as being a registered
owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any
Participant, with respect to the payment by DTC or any Participant of any amount with respect to
the principal of or interest on the Bonds, with respect to any notice which is permitted or
required to be given to owners of Bonds under this Resolution, with respect to the selection by
DTC or any Participant of any person to receive payment in the event of a partial redemption of
the Bonds, or with respect to any consent given or other action taken by DTC as registered owner
of the Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC,
the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with
respect to such Bond, only to Cede & Co. in accordance with DTC's Operational Arrangements,
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 interest on the Bonds to the extent of the sum or
SUMS so paid. No person other than DTC shall receive an authenticated Bond for each separate
stated maturity evidencing the obligation of the City to make payments of principal and interest.
Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., the Bonds will be transferable to such new
nominee in accordance with paragraph (e) hereof.
(b) In the event the City determines that it is in the best interest of the Beneficial Owners
that they be able to obtain Bonds in the form of bond certificates, the City may notify DTC and
the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of
Bonds in the form of certificates. In such event, the Bonds will be transferable in accordance
with paragraph (d) hereof. DTC may determine to discontinue providing its services with
respect to the Bonds at any time by giving notice to the City and the Registrar and discharging its
responsibilities with respect thereto under applicable law. In such event the Bonds will be
transferable in accordance with paragraph (d) hereof.
(c) The execution and delivery of the Representation Letter to DTC by the Mayor or City
Manager, if not previously tiled, is hereby authorized and directed.
(d) In the event that any transfer or exchange of Bonds is permitted under paragraph (a)
or (b) hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of
the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted
transferee in accordance with the provisions of this Resolution. In the event Bonds in the form
of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as
owner of all the Bonds, or another securities depository as owner of all the Bonds, the provisions
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of this Resolution shall also apply to all matters relating thereto, including, without limitation,
the printing of such Bonds in the form of bond certificates and the method of payment of
principal of and interest on such Bonds in the form of bond certificates.
SECTION 3. USE OF PROCEEDS
Upon payment for the Bonds by the Purchaser, the City Manager shall deposit and apply
the proceeds of the Bonds as follows:
3.01. Construction Fund
There is hereby created a special bookkeeping fund to be designated as the "General
Obligation Tax Abatement Bonds, Series 2014A Construction Fund" (the "Construction Fund"),
to be held and administered by the City Manager separate and apart from all other funds of the
City. To the Construction Fund there shall be credited from the proceeds of the Bonds an
amount equal to the estimated cost of the Project, and from the Construction Fund there shall be
paid all construction costs and expenses. There shall also be credited to the Construction Fund
all Abatement Revenue collected by the City until all costs of the Project have been fully paid.
After payment of all such costs and expenses, the Construction Fund shall be terminated. All
funds on hand in the Construction Fund when terminated shall be credited to the Sinking Fund
described in Section 3.02 hereof, unless and except as such proceeds may be transferred to some
other fund or account as to which the City has received from bond counsel an opinion that such
other transfer is permitted by applicable laws and does not impair the exemption of interest on
the Bonds from federal income taxes.
3.02. Sinking Fund
The Bonds shall be payable from a separate "General Obligation Tax Abatement Bonds,
Series 2014A Sinking Fund" (the "Sinking Fund") of the City, which shall be created and
maintained on the books of the City as a separate debt redemption fund until the Bonds, and all
interest thereon, are fully paid. Into the Sinking Fund shall be paid (i) all proceeds of the Bonds
received from the Purchaser upon delivery of the Bonds other than the amount deposited in the
Construction Fund pursuant to Section 3.01 hereof, (ii) all Abatement Revenue received by the
City, except as otherwise provided in Section 3.01 hereof; (iii) any amount to be credited to the
Sinking Fund pursuant to Section 3.01 hereof; and (iv) all taxes levied and all other money
which may from time to time be received for or appropriated for the payment of the principal of
or interest on the Bonds, including all collections of ad valorem taxes levied for the payment of
such.
The principal of and interest on the Bonds shall be payable from the Sinking Fund, and
the money on hand in the Sinking Fund from time to time shall be used only to pay the principal
of and interest on the Bonds. On or before each principal and Interest Payment Date for the
Bonds, the City Manager is directed to remit to the Registrar from funds on deposit in the
Sinking Fund the amount needed to pay principal and interest on the Bonds on the next
succeeding principal and Interest Payment Date.
There are hereby established two accounts in the Sinking Fund, designated as the "Debt
Service Account" and the "Surplus Account." There shall initially be deposited into the Debt
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Service Account upon the issuance of the Bonds the amount set forth in clause (i) above.
Thereafter, during each bond year (each twelve month period commencing on January 16 and
ending on the following January 15, a "Bond Year"), as monies are received into the Sinking
Fund, the City Manager shall first deposit such monies into the Debt Service Account until an
amount has been appropriated thereto sufficient to pay all principal and interest due on the Bonds
through the end of the Bond Year. All subsequent monies received in the Sinking Fund during
the Bond Year shall be appropriated to the Surplus Account. If at any time the amount on hand
in the Debt Service Account is insufficient for the payment of principal and interest then due, the
City Manager shall transfer to the Debt Service Account amounts on hand in the Surplus
Account to the extent necessary to cure such deficiency. Investment earnings (and losses) on
amounts from time to time held in the Debt Service Account and Surplus Account shall be
credited or charged to said accounts.
SECTION 4. TAX ABATEMENT
The City has heretofore done all acts and things necessary to be done prior to the
construction of the Project and the City hereby covenants and agrees that, for the payment of the
costs of the Project, the City has done or will do and perform all acts and things necessary to
authorize the 'Fax Abatement and collect Abatement Revenue from the Abatement Parcels
sufficient to pay the costs of the Project.
SECTION 5. PLEDGE OF TAXING POWERS
For the prompt and full payment of the principal of and interest on the Bonds 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
Bonds, 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
2014-2033 2015-2034 See attached Levy Computation
The taxes shall be irrepealable as long as any of the Bonds 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 6. DEFEASANCE
When all of the Bonds have been discharged as provided in this section, all pledges,
covenants and other rights granted by this Resolution to the registered owners of the Bonds shall
cease. The City may discharge its obligations with respect to any Bonds 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 Bond 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 Bonds called for redemption on any date when they
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are prepayable according to their terms by depositing with the Registrar on or before that date an
amount equal to the principal, redemption premium, if any, and interest 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 any Bonds, subject to the provisions of law now or
hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a
bank or trust company 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 of
the Bonds 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 Bonds
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
Bonds to be discharged on and before their maturity dates.
SECTION 7. TAX COVENANTS, ARBITRAGE MATTERS AND CONTINUING
DISCLOSURE
7.01. General Covenant
The City covenants and agrees with the owners from time to time of the Bonds, 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 Bonds to become includable in gross income of the recipient
under the Internal Revenue Code of 1986, as amended (the "Code") and applicable Treasury
Regulations promulgated thereunder (the "Regulations"), and covenants to take any and all
affirmative actions within its powers to ensure that the interest on the Bonds will not become
includable in gross income of the recipient under the Code and applicable Regulations. The
City represents and covenants that all improvements financed from the proceeds of the Bonds are
and will be owned and operated by the City and available for use by members of the general
public on a substantially equal basis. The City has not and will not enter into any lease,
management contract, operating agreement, use agreement or other contract relating to the use,
operation or maintenance of the City facilities financed by the Bonds which would cause the
Bonds to be considered "private activity bonds" or "private loan bonds"pursuant to Section 141
of the Code.
7.02. Arbitrage Certification
The Mayor and City Manager being the officers of the City charged with the
responsibility for issuing the Bonds 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 that on the basis of facts, estimates
and circumstances in existence on the date of issue and delivery of the Bonds, it is reasonably
expected that the proceeds of the Bonds will not be used in a manner that would cause the Bonds
to be "arbitrage bonds" within the meaning of the Code and the applicable Regulations.
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7.03. Arbitrage Rebate
The City acknowledges that the Bonds are subject to the rebate requirements of Section
l 48(f) of the Code. The City hereby covenants and agrees to retain such records, make such
determinations, file such reports and documents and pay such amounts at the times as are
required by said Section l 84(t) and applicable regulations unless the Bonds qualify for an
exception from the rebate requirement pursuant to one of the spending exceptions set forth in
Section 1.148-7 of the Regulations and no "gross proceeds" of the Bonds (other than amounts
constituting a "bona fide debt service fund") arise during or after the expenditure of the original
proceeds thereof.
7.04. Reimbursement
The City certifies that the proceeds of the Bonds will not be used by the City to reimburse
itself for any expenditure with respect to Project which the City paid or will have paid more than
60 days prior to the issuance of the Bonds unless, with respect to such prior expenditures, the
City shall have made a declaration of official intent which complies with the provisions of
Section l.l 50-2 of the Regulations, provided that this certification shall not apply (1) with respect
to certain de minimis expenditures, if any, with respect to the Project meeting the requirements
of Section l.150-2(f)(l) of the Regulations, or(ii) with respect to "preliminary expenditures" for
the Project as defined in Section l.150-2(f)(2) of the Regulations, including engineering or
architectural expenses and similar preparatory expenses, which in the aggregate do not exceed
20% of the "issue price" of the Bonds.
7.05. Continuing Disclosure
(a) Purpose and Beneficiaries. To provide for the public availability of certain
information relating to the Bonds and the security therefor and to permit the Purchaser and other
participating underwriters in the primary offering of the Bonds to comply with amendments to
Rule l 5c2-12 promulgated by the SEC under the Securities Exchange Act of ]934 (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 Bonds, 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 Bonds. The City is the only obligated person in respect of the
Bonds 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 Bonds, 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 Bonds or under any other
provision of this Resolution. As used in this section, Owner or Bondowner owner means, in
respect of the Bonds, 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
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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 the Bonds, any person or entity which (a) has the power, directly or indirectly, to vote
or consent with respect to, or to dispose of ownership of, such Bonds (including persons or
entities holding Certificates through nominees, depositories or other intermediaries), or (b) is
treated as the owner of the Bonds 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. Within 12 months after the end of each fiscal year of the City, commencing with the
fiscal year ending December 31, 2014, the following financial information and
operating data in respect of the City (the Disclosure Information):
a. the audited financial statements of the City for such fiscal year, prepared in
accordance with generally accepted accounting principles 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 tine 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 tine
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 headings:
City Property Values; City Indebtedness; City Tax Rates, Levies &
Collections.
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 filed with the SEC or have been made
available to the public by the Municipal Securities Rulemaking Board (the "MSRB")
through its Electronic Municipal Market Access System (EMMA). 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
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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)(I) 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.
2. In a timely manner, not in excess of 10 business days, to the MSRB through FMMA,
notice of the occurrence of any of the following events (each 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;
j. release, substitution, or sale of property securing repayment of the securities;
k. rating changes;
1. bankruptcy, insolvency, receivership, or similar event of the obligated person;
m. the consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of an
obligated person, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its
terms, if material; and
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n. appointment of a successor or additional trustee or the change of name of a
trustee, if material.
As used herein, for those events that must be reported if material, 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 the Bonds 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 a fact that
would be deemed material for purposes of the purchase, holding or sale of the Bonds
within the meaning of applicable federal securities laws, as interpreted at the time of
discovery of the occurrence of the event.
For the purposes of the event identified in (1) hereinabove, the event is considered to
occur when any of the following occur: the appointment of a receiver, fiscal agent or
similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or
in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the
obligated person, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and
orders of a court or governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the obligated
person.
3. In a timely manner, to the MSRB through EMMA, 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;
b. 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.
1. The City agrees to make available to the MSRB through EMMA, in an electronic
format as prescribed by the MSRB, the information described in subsection (b).
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2. All documents provided to the MSRB pursuant to this subsection (c) shall be
accompanied by identifying information as prescribed by the MSRB from time to
time.
(d) Term; Amendments; Inlerl)relulion.
1. The covenants of the City in this section shall remain in effect so long as any Bonds
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 Bonds 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)(2) hereof) or the consent of the Owners of any Bonds, 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
Bonds, 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 Bondowners
under the Rule.
If the Disclosure Information is so amended, the City agrees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the
reasons for the amendment and the effect, if any, of 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.
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SECTION 8. CERTIFICATION OF PROCEEDINGS
8.01. Registration and Levy of Taxes
The City Clerk is hereby authorized and directed to file a certified copy of this
Resolution in the records of the County, together with such additional information as required,
and to issue a certificate that the Bonds have been duly entered upon the County Auditor's bond
register as required by law.
8.02. Authentication of Transcript
The officers of the City 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 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 may be required to show the facts
relating to the legality and marketability of the Bonds 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,
certificates and affidavits, including any heretofore furnished, shall be deemed representations of
the City as to the correctness of all statements contained therein.
8.03. Official Statement
The Preliminary Official Statement relating to the Bonds, dated as of June 5, 2014,
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 Final Official Statement listing the offering price, the
interest rates, selling compensation, delivery date, the underwriters and such other information
relating to the Bonds required to be included in the Official Statement by Rule 15c2-12 adopted
by the Securities and Exchange Commission 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.
ADOPTED by the Eden Prairie City Council on this 17th day of June, 2014.
c yra cen a or
ATTEST:
�*, �2, ' �f
K� hleen Porta, City Clerk
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