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City Council Resolution 2013-18CITY OF MONTICELLO WRIGHT COUNTY, MINNESOTA RESOLUTION NO. 2013-018 AWARDING THE SALE OF A GENERAL OBLIGATION CERTIFICATE OF INDEBTEDNESS, SERIES 2013A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $500,000; FIXING ITS FORM AND SPECIFICATIONS; DIRECTING ITS EXECUTION AND DELIVERY; AND PROVIDING FOR THE PAYMENT THEREOF BE IT RESOLVED By the City Council of the City of Monticello, Wright County, Minnesota (the "City "), as follows: Section 1. Sale of Certificates. 1.01. Authorization. It is hereby determined that: (a) The City is authorized by Minnesota Statutes, Chapter 475, as amended, and Section 412.301 (collectively, the "Act "), to issue its general obligation certificates of indebtedness on such terms and in such manner as the City determines to finance the purchase of items of capital equipment, subject to certain limitations contained in the Act. (b) The City has purchased and acquired, or will purchase and acquire, certain items of capital equipment, as described in EXHIBIT A attached hereto (collectively, the "Equipment"). (c) As required by the Act, (i) the expected useful life of each item of Equipment is or will be at least as long as the term of the Certificates (as hereinafter defined); and (ii) the principal amount of the Certificates to be issued will not exceed 0.25 percent of the estimated market value of taxable property in the City for the year 2013. (d) It is necessary and expedient to the sound financial management of the affairs of the City to issue its General Obligation Certificates of Indebtedness, Series 2013A (the "Certificates "), in the original aggregate principal amount of $500,000, pursuant to the Act to provide financing for the Equipment. (e) The City is authorized by Section 475.60, subdivision 2(1), of the Act to negotiate the sale of the Certificates, since the Certificates will payable in not more than ten years and shall be issued on such terms and in such manner as the City Council may determine, in accordance with Section 412.301(d) of the Act. 1.02. Award to the Purchaser and Interest Rate. The proposal of Harvest Bank, Kimball, Minnesota (the "Purchaser "), to purchase the Certificates is found and determined to be a reasonable offer and is accepted. The proposal of the Purchaser is to purchase the Certificates at a price of $500,000, for the Certificates bearing interest as follows: 4210242 MNI MN 190-142 Year Interest Rate Year Interest Rate 2013 0.35% 2017 1.35% 2014 0.60 2018 1.60 2015 0.85 2019 1.85 2016 1.10 2020 2.10 1.03. Terms and Principal Amount of the Certificates. The City will forthwith issue and sell the Certificates to the Purchaser pursuant to the Act in the total principal amount of $500,000, originally dated as of delivery, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R -1 upward, bearing interest as above set forth, and maturing serially on December 1 in the years and amounts as follows: Year Amount Year Amount 2013 $55,000 2017 $65,000 2014 60,000 2018 65,000 2015 60,000 2019 65,000 2016 60;000 2020 70,000 1.04. Optional Redemption. The City may elect on any date to prepay the Certificates on December 1, 2018, and any date thereafter. Redemption may be in whole or in part and if in part, at the option of the City and in such order as the City will determine and within a maturity by lot as selected by the Registrar. Prepayments will be at a price of par plus accrued interest. Section 2. Registration and Payment. 2.01. Registered Form. The Certificates will be issued only in fully registered form. The interest thereon and, upon surrender of the Certificates, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. The Certificates will be dated as of delivery to the Purchaser. The interest on the Certificates is payable on December 1 of each year, commencing December 1, 2013, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City appoints the City Finance Director, Monticello, Minnesota, as certificate registrar, transfer agent, authenticating agent and paying agent (the "Registrar "). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re ig ster. The Registrar must keep a bond register in which the Registrar provides for the registration of ownership of the Certificates and the registration of the transfer and exchange of the Certificates entitled to be registered, transferred or exchanged. (b) Transfer of Certificates. Upon surrender for transfer of the Certificates 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 will 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 that interest payment date. 421024 MNI MN 190 -142 (c) Exchange of Certificates. When a Certificate is surrendered by the registered owner for exchange the Registrar will 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. The Certificate if surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Certificate is presented to the Registrar for transfer, the Registrar may refuse to transfer the Certificate until the Registrar is satisfied that the endorsement on the Certificate or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will 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 a Certificate is registered in the bond register as the absolute owner of the Certificate, whether the Certificate is 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 payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Certificate to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of the Certificates sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Certificates. If a Certificate becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Certificate of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Certificate or in lieu of and in substitution for the 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 an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. The Certificate so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must 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 is not necessary to issue a new Certificate prior to payment. (i) Redemption. In the event any portion of the Certificates are called for redemption, notice thereof identifying the Certificates to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) not more than 60 and not less than 30 days prior to the date fixed for redemption to the registered owner of the Certificates to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of the Certificates. The Certificates so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time, 421024 MNI MN190 -142 2.05. Execution and Delivery. The Certificates will be prepared under the direction of the City Administrator and executed on behalf of the City by the manual signatures of the Mayor and the City Administrator. If an officer whose signature or a facsimile of whose signature appears on the Certificates cease to be such officer before the delivery of any Certificate, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. When the Certificates have been so prepared, executed and authenticated, the City Finance Director will deliver the same to the Purchaser upon payment of the purchase price, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Certificates. The City may elect to deliver in lieu of printed definitive Certificates one or more typewritten temporary Certificates in substantially the form set forth in EXHIBIT B attached hereto with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Certificates the temporary Certificates will be exchanged therefor and cancelled. Section 3. Form of Certificate. 3.01. Execution of the Certificate. The Certificate will be printed or typewritten in substantially the form set forth in EXHIBIT B attached hereto. 3.02. Approving Legal Opinion, The City Administrator is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and to cause the opinion to be printed on or accompany the Certificates. Section 4. Payment: Security: Pledges and Covenants. 4.01. Debt Service Fund. The Certificates will be payable from the General Obligation Certificates of Indebtedness, Series 2013A Debt Service Fund (the "Debt Service Fund ") hereby created, and the proceeds of the ad valorem taxes hereinafter levied (the "Taxes ") are pledged to the Debt Service Fund. If a payment of principal or interest on the Certificates becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the City Administrator will pay such principal or interest from the general fund of the City, and the general fund may be reimbursed for those advances out of the proceeds of the Taxes when collected. 4.02. Equipment Purchase. The proceeds of the Certificates, together with any other funds appropriated for the purchase of Equipment, will be used solely to defray expenses of the Equipment and pay the costs of issuance related to the Certificates. 4.03. Pledge of Taxes. For the purpose of paying the principal of and interest on the Certificates, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, to be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Debt Service Fund above provided and will be in the annual amount as attached as Exhibit C, commencing with taxes collected in 2014. 4.04. Certificate to County Auditor as to Debt Service Fund Amount. It is determined that the estimated collection of the foregoing Taxes will produce at least five percent (5 %) in excess of the amount needed to meet when due, the principal and interest payments on the Certificates. The tax levy herein provided is irrepealable until the Certificates are paid, provided that at the time the City makes its annual tax levies, the City Administrator may certify to the County Auditor of Wright County, Minnesota, the amount 421024 MNI MN 190 -142 4 available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the County Auditor will thereupon reduce the levy collectible during that year by the amount so certified. 4.05. County Auditor Certificate as to Registration. The City Administrator is authorized and directed to file a certified copy of this resolution with the County Auditor and to obtain the certificate required by Section 475.63 of the Act. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Certificates, certified copies of proceedings and records of the City relating to the Certificates and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Certificates, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 5.02. No Official Statement or Prospectus. It is determined that no official statement or prospectus has been prepared or circulated by the City in connection with the sale of the Certificates and that the Purchaser has made its own investigations concerning the City as set forth in an investment letter of even date, receipt of which is hereby acknowledged. Section 6. Tax Covenants. 6.01. Tax - Exempt Certificates, The City covenants and agrees with the Purchaser and any subsequent holders from time to time of the Certificates that the City will not take or permit to be taken by any City officers, employees or agents any action which would cause the interest on the Certificates to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code "), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Certificates. 6.02. No Rebate Required. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Certificates under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Certificates, and the rebate of excess investment earnings to the United States if the Certificates (together with other obligations reasonably expected to be issued in calendar year 2013) exceeds the small- issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax- exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during calendar year 2013 is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(C) of the Code. 421024 MNI MN 190-142 6.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Certificates or to permit them or any of them to be used, in such a manner as to cause the Certificates to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. Qualified Tax- Exempt Obligations. In order to qualify the Certificates as a "qualified tax- exempt obligation" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Certificates are not a "private activity bond" as defined in Section 141 of the Code; (b) the City Council designates the Certificates as a "qualified tax - exempt obligation" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax- exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2013 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2013 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. No Requirement of Continuing Disclosure. Participating underwriters need not comply with the continuing disclosure requirements of Rule 15c2 -12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule "), because the offering is in a principal amount less than $1,000,000. Consequently, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Certificates. However, the City hereby agrees to provide the Purchaser, upon a reasonable request by the Purchaser, the financial information that the City is providing in its continuing disclosure undertakings for other City debt obligations. Section 8. Defeasance. When the Certificates, and all interest thereon, has been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Certificates will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Certificates will remain in full force and effect. The City may discharge the 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. If the Certificates 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 to the date of such deposit. 421024 MNI MN190 -142 6 Extract of Minutes of Meeting of the City Council of the City of Monticello Wright County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Monticello, Minnesota, was duly held in the City Hall in the City on Monday, April 8, 2013, commencing at 7 :00 P.M. The following members were present: Mayor Clint Herbst; Councilmembers — Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf and the following were absent: None The Mayor announced that the next item of business was the consideration of an offer for the purchase of the City's General Obligation Certificate of Indebtedness, Series 2013A, in the aggregate principal amount of $500,000. The City Administrator presented an offer of Harvest Bank, Kimball, Minnesota, to purchase the Certificates. After due consideration of the proposal, the motion for the adoption of the foregoing resolution was moved by Council Member Posusta and duly seconded by Member Hilgart, and upon vote being taken thereon, the following voted in favor thereof: Mayor Clint Herbst; Councilmembers — Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. 421024 MNI MN190 -142 7 STATE OF MINNESOTA ) COUNTY OF MONTICELLO ) SS. CITY OF WRIGHT ) I, the undersigned, being the duly qualified and acting City Administrator of the City of Monticello, Minnesota (the "City "), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on April 8, 2013, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City's General Obligation Certificates of Indebtedness, Series 2013A, in the aggregate principal amount of $500,000. WITNESS my hand officially as such City Administrator and the corporate seal of the City this fl f day of / G / 2013. 4210242 MNI MN190 -142 8 e.. C,Yy ;i nistrator City o onticello, Minnesota EXHIBIT A LIST OF EQUIPMENT Equipment Laser Fiche Midsize Tractor Paint Striping Sprayer Two -Ton Mini Dump Truck Mini Tack Trailer Two -Ton Mini Dump Truck Three Mowers Brush Clipper Van Total Cost: 421024 MNI MN190 -142 A -1 Cost $ 65,000 92,500 10,000 70,000 35,000 75,000 95,000 35,000 22,500 $500,000 EXIIIBIT B FORM OF CERTIFICATE No. R -1 UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF MONTICELLO, MINNESOTA GENERAL OBLIGATION CERTIFICATE OF INDEBTEDNESS SERIES 2013A Date of Rate Maturi1y Original Issue % December 1, 20_ April 26, 2013 The City of Monticello, Minnesota, a duly organized and existing municipal corporation in Wright County, Minnesota (the "City "), acknowledges itself to be indebted and for value received hereby promises to pay to Hai-vest Bank, Kimball, Minnesota, or registered assigns, the principal sum of $ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable December 1 in each year, commencing December 1, 2013. 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. The City may elect on any date to prepay the Certificates on December 1, 2018, and any date thereafter. Redemption may be in whole or in part and if in part, at the option of the City and in such order as the City will determine and within a maturity by lot as selected by the Registrar. Prepayments will be at a price of par plus accrued interest. This Certificate is issued pursuant to a resolution adopted by the City Council on April 8, 2013 (the "Resolution "), for the purpose of providing money to defray expenses incurred or to be incurred in purchasing various items of capital equipment, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 475, as amended, and Section 412.301, and the principal hereof and interest hereon are payable primarily from ad valorem taxes, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Certificate, and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency, which taxes may be levied without limitation as to rate or amount. The City Council has designated the Certificates as a "qualified tax- exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "), relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. 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 City Finance Director, as Registrar, by the 421024 MNI MN 190 -142 B -1 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 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 will 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, and that the issuance of this Certificate does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Monticello, Minnesota, by its City Council, has caused this Certificate to be executed on its behalf by the manual signatures of the Mayor and City Administrator and has caused this Certificate to be dated as of the date set forth below. Dated: April 26, 2013 Mayor CITY OF MONTICELLO, MINNESOTA City Administrator CERTIFICATE OF AUTHENTICATION This is the Certificate delivered pursuant to the Resolution mentioned within. CITY OF MONTICELLO, MINNESOTA By Its City Finance Director 421024 MNI MN190 -142 B -2 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Certificate, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common TEN ENT -- as tenants by entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT Custodian (Cust) (Minor) under Uniform Gifts or Transfers to Minors Act, State of Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto _ the within Certificate and all rights thereunder, and attorney to transfer the with full power of substitution does hereby irrevocably constitute and appoint said Certificate on the books kept for registration of the within Certificate, 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 any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ( "STAMP "), the Stock Exchange Medallion Program ( "SEMP "), the New York Stock Exchange, Inc. Medallion Signatures Program ( "MSP ") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Certificate unless the information concerning the assignee requested below is provided. Name and Address: 421024 MNI MN 190-142 B -3 (Include information for all joint owners if this Certificate is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Certificate has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration April 26, 2013 Registered Owner Harvest Bank 75 Main Street North P.O. Box 70 Kimball, MN 55353 421024 MNI MN190 -142 B -4 Signature of City Finance Director EXHIBIT C TAX LEVY SCHEDULE YEAR * TAX LEVY 2013 $61,726.88 2014 69,426.00 2015 69,048.00 2016 68,512.50 2017 73,069.50 2018 72,148.13 2019 71,056.13 2020 75,043.50 * Year tax levy collected 421024 MNI MN190 -142