City Council Resolution 2015-77CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
RESOLUTION NO. 2015 -077
A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION STREET
RECONSTRUCTION AND IMPROVEMENT BONDS, SERIES 2015B, IN THE ORIGINAL
AGGREGATE PRINCIPAL AMOUNT OF $2,605,000; FIXING THEIR FORM AND
SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING
FOR THEIR PAYMENT.
BE IT RESOLVED By the City Council of the City of Monticello, Minnesota (the "City "), as
follows:
Section 1. Sale of Bonds.
1.01. Street Reconstruction Bonds.
(a) Pursuant to Minnesota Statutes, Chapter 475, as amended, specifically
Section 475.58, subdivision 3b (the "Street Reconstruction Act "), the City is authorized to
finance all or a portion of the cost of street reconstruction projects by the issuance of general
obligation bonds of the City payable from ad valorem taxes.
(b) On June 22, 2015, following a duly noticed public hearing, the City Council of
the City adopted a five -year street reconstruction plan (the "Plan") describing the streets to be
reconstructed, estimated costs, and any planned reconstruction of other streets in the City and
approved the issuance of obligations by vote of all of the members thereof, all pursuant to the
Street Reconstruction Act.
(c) Expenditures described in the Plan for the period June 30, 2015, through
June 30, 2016, include, among other projects, the Overlay of Rural Outlying Street (85c' Street),
Street Reconstruction in Area 5, and the TH25 /CSAH75 Intersection Improvements (collectively,
the "Street Reconstruction "). The City estimates that the total cost of such Street Reconstruction
is $1,834,000, including capitalized interest, costs of issuance, and bond discount.
(d) The City Council has determined that, within thirty (30) days after the hearing,
no petition for a referendum on the issuance of bonds to pay costs of the Street Reconstruction
was received by the City in accordance with the Street Reconstruction Act.
(e) It is necessary and expedient to the sound financial management of the affairs of
the City to issue general obligation bonds in the aggregate principal amount of $1,885,000 (the
"Street Reconstruction Bonds "), pursuant to the Street Reconstruction Act, to provide financing
for the Street Reconstruction.
1.02. Improvement Bonds.
(a) Certain assessable public improvements designated. as the School Boulevard
Street, Pathway, and Appurtenant Improvements (City Project No. 14C003) (the "Assessable
Improvements ") have been made, duly ordered or contracts let for the construction thereof
468692v2 MNIMN190 -148
pursuant to the provisions of Minnesota Statutes, Chapters 429 and 475, as amended
(collectively, the "Improvement Act ").
(b) It is necessary and expedient to the sound financial management of the affairs of
the City to issue general obligation bonds in the aggregate principal amount of $720,000 (the
"Improvement Bonds "), pursuant to the Improvement Act, to provide financing for the
Assessable Improvements.
1.03. Issuance of General Obligation Street Reconstruction and Improvement Bonds.
(a) The City Council fords it necessary and expedient to the sound financial
management of the affairs of the City to issue the City's General Obligation Street
Reconstruction and Improvement Bonds, Series 2015B (the `Bonds "), in the original aggregate
principal amount of $2,605,000, pursuant to the Street Reconstruction Act and the Improvement
Act (together, the "Act "), to provide financing for the Street Reconstruction and the Assessable
Improvements.
(b) The City desires to proceed with the sale of the Bonds by direct negotiation with
Northland Securities, Inc. (the "Purchaser "). The Purchaser will purchase the Bonds in an
arm's - length commercial transaction with the City. The City hereby retains Blue Rose Capital
Advisors ( "Blue Rose ") to act as an independent financial advisor for the purpose of reviewing
the pricing fairness associated with the purchase and subsequent reoffering of the Bonds. The
Mayor and/or the City Administrator of the City is hereby authorized to execute an agreement
with Blue Rose for an amount not to exceed $2,000. It being thus determined that the City has
retained an independent financial advisor in connection with such sale, the City is authorized by
Section 475.60, subdivision 2(9) of the Act to negotiate the sale of the Bonds.
1.04. Award to the Purchaser and Interest Rates. The proposal of the Purchaser to purchase the
Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to
purchase the Bonds at a price of $2,600,839.50 (par amount of $2,605,000.00, plus original issue premium
of $46,897.50, less underwriter's discount of $51,058.00), plus accrued interest to date of delivery, for
Bonds bearing interest as follows:
Year
Interest Rate
Year
Interest Rate
2016
1.500%
2024*
2.500%
2017
1.500
2026*
2.500
2018
1.500
2028*
3.000
2020*
1.500
2030*
3.000
2022*
2.000
* Term Bonds
1.05. Purchase Contract. The Mayor and City Administrator are directed to execute a contract
with the Purchaser on behalf of the City.
1.06. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the
Bonds, pursuant to the Act, in the total principal amount of $2,605,000, originally dated as of
November 1, 2015, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R -1,
468692v2 MNI MN190 -148 2
upward, bearing interest as above set forth, and maturing serially on December 15 in the years and amounts
as follows:
Year
Amount
Year
Amount
2016
$ 105,000
2016
$ 145,000
2024*
$ 345,000
2017
150,000
2026*
365,000
2018
160,000
2028*
380,000
2020*
320,000
2030*
410,000
2022*
330,000
* Term Bonds
(a) $1,885,000 of the Bonds (the Street Reconstruction Bonds), maturing on
December 15 in the years and the amounts set forth below, will be used to finance the construction
of the Street Reconstruction:
Year
Amount
Year
Amount
2016
$ 105,000
2024*
$ 250,000
2017
110,000
2026*
265,000
2018
115,000
2028*
275,000
2020*
230,000
2030*
295,000
2022*
240,000
* Term Bonds
(b) The remainder of the Bonds in the principal amount of $720,000 (the Improvement
Bonds), maturing on December 15 in the years and the amounts set forth below, will be used to
finance the construction of the Assessable Improvements:
Year
Amount
Year
Amount
2016
$ 40,000
2024*
$ 95,000
2017
40,000
2026*
100,000
2018
45,000
2028*
105,000
2020*
90,000
2030*
115,000
2022*
90,000
* Term Bonds
1.05. Optional Redemption. The City may elect on December 15, 2022, and on any day
thereafter to prepay Bonds due on or after December 15, 2023. Redemption may be in whole or in part and
if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a
maturity are called for redemption, the City will notify DTC (as defined in Section 7 hereof) of the
particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each
participant's interest in such maturity to be redeemed and each participant will then select by lot the
beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus
accrued interest.
468692v2 MN1 MN190 -148 3
1.06. Mandatory Redemption: Term Bond. The Bonds maturing on December 15, 2020,
December 15, 2022, December 15, 2024, December 15, 2026, December 15, 2028, and December 15, 2030
shall hereinafter be referred to collectively as the "Term Bonds." The principal amounts of the Term Bonds
subject to mandatory sinking fund redemption on any date may be reduced through earlier optional
redemptions, with any partial redemptions of the Term Bonds credited against future mandatory sinking
fund redemptions of such Term Bonds in such order as the City shall determine. The Term Bonds are
subject to mandatory sinking fund redemption and shall be redeemed in part by lot at par plus accrued
interest on the sinking fund installment dates and in the principal amounts as follows:
Sinking Fund Installment Date Principal Amount
December 15, 2020 Term Bond
2019 $160,000
2020 (maturity) 160,000
December 15, 2022 Term Bond
2021 $165,000
2022 (maturity) 165,000
December 15, 2024 Term Bond
2023 $170,000
2024 (maturity) 175,000
December 15, 2026 Term Bond
2025 $180,000
2026 (maturity) 185,000
December 15, 2028 Term Bond
2027 $185,000
2028 (maturity) 195,000
December 15, 2030 Term Bond
2029 $200,000
2030 (maturity) 210,000
Section 2. Registration and Pavment.
2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest
thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued
by the Registrar described herein.
2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date
preceding the date of authentication to which interest on the Bond has been paid or made available for
payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or
made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the
date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of
the date of original issue. The interest on the Bonds is payable on June 15 and December 15 of each year,
commencing June 15, 2016, to the registered owners of record thereof as of the close of business on the first
day of the month of such interest payment date, whether or not such day is a business day.
468692v2 MNI MN190 -148 4
2.03. Registration. The City will appoint a bond 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) Register. The Registrar must keep at its principal corporate trust office a bond
register in which the Registrar provides 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 a 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 will 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 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.
(c) Exchange of Bonds. When Bonds are surrendered by the registered owner for
exchange the Registrar will 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. Bonds 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 Bond is presented to the Registrar for
transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the
endorsement on the Bond 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 Bond is registered in the bond register as the absolute owner of the Bond, whether
the Bond is 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 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
Bond 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 Bonds 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 Bonds. If a Bond becomes mutilated or is
destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity
date and tenor in exchange and substitution for and upon cancellation of the 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
46869242 MNI MN190 -148
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. Bonds 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 Bond has already matured or
been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior
to payment.
(i) Redemption. In the event any of the Bonds are called for redemption, notice
thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the
redemption notice by first class mail (postage prepaid) to the registered owner of each Bond 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 Bonds.
Bonds 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.
2.04. Appointment of Initial Re g sue. The City appoints U.S. Bank National Association, Saint
Paul, Minnesota, as the initial Registrar. The Mayor and the City Administrator 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, the resulting corporation is 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 upon 30 days' notice and upon the appointment of a successor
Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the
successor Registrar and must deliver the bond register to the successor Registrar. On or before each
principal or interest due date, without further order of this City Council, the Finance Director must transmit
to the Registrar moneys sufficient for the payment of all principal and interest then due.
2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of
the City Administrator and executed on behalf of the City by the signatures of the Mayor and the City
Administrator, provided that those signatures may be printed, engraved or lithographed facsimiles of the
originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be
such officer before the delivery of a Bond, 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. Notwithstanding
such execution, a Bond will not 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
a Bond is conclusive evidence that it has been authenticated and delivered under this resolution. When the
Bonds have been so prepared, executed and authenticated, the City Administrator will deliver the same to
the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made
and executed, and the Purchaser is not obligated to see to the application of the purchase price.
2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or
more typewritten temporary Bonds in substantially the form set forth in EXHIBIT A 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 Bonds the temporary Bonds will be exchanged therefor and cancelled.
468692v2 MNI MN 190-148 6
Section 3. Form of Bond.
3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form
set forth in EXHIBIT A.
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 cause the opinion to be printed on or accompany
each Bond.
Section 4. Payment: Securi ty Pledges and Covenants.
4.01. Debt Service Fund. The Bonds will be payable from the General Obligation Street
Reconstruction and Improvement Bonds, Series 2015B Debt Service Fund (the "Debt Service Fund")
hereby created. The Debt Service Fund shall be administered and maintained by the Finance Director as a
bookkeeping account separate and apart from all other funds maintained in the official financial records of
the City. The City will maintain the following accounts in the Debt Service Fund: the "Street
Reconstruction Account" and the "Assessable Improvements Account." Amounts in the Street
Reconstruction Account are irrevocably pledged to the Street Reconstruction Bonds, and amounts in the
Assessable Improvements Account are irrevocably pledged to the Improvement Bonds.
(a) Street Reconstruction Account. Ad valorem taxes levied for the Street
Reconstruction are hereby pledged to the Street Reconstruction Account of the Debt Service Fund.
There is appropriated to the Street Reconstruction Account a pro rata portion of accrued interest
paid by the Purchaser upon closing and delivery of the Bonds.
(b) Assessable Improvements Account. Ad valorem taxes hereinafter levied and
special assessments (the "Assessments') collected for the Assessable Improvements are hereby
pledged to the Assessable Improvements Account of the Debt Service Fund. There is appropriated
to the Assessable Improvements Account a pro rata portion of accrued interest paid by the Purchaser
upon closing and delivery of the Bonds.
4.02. Construction Fund. The City hereby creates the General Obligation Street Reconstruction
and Improvement Bonds, Series 2015B Construction Fund (the "Construction Fund"). The City will
maintain the following accounts in the Construction Fund: the "Street Reconstruction Account" and the
"Assessable Improvements Account." Amounts in the Stmt Reconstruction Account are irrevocably
pledged to the Street Reconstruction Bonds, and amounts in the Assessable Improvements Account are
irrevocably pledged to the Improvement Bonds.
(a) Street Reconstruction Account. Proceeds of the Street Reconstruction Bonds, less
the appropriations made in Section 4.01(a) hereof, together with any other funds appropriated for
the Street Reconstruction and ad valorem taxes collected during the construction of the Street
Reconstruction, will be deposited in the Street Reconstruction Account of the Construction Fund to
be used solely to defray expenses of the Street Reconstruction. When the Street Reconstruction is
completed and the cost thereof paid, the Street Reconstruction Account of the Construction Fund is
to be closed and any funds remaining may be deposited in the Street Reconstruction Account of the
Debt Service Fund.
468692v2 MNI MN190 -148 7
(b) Assessable Improvements Account. Proceeds of the Improvement Bonds, less the
appropriations made in Section 4.01(b) hereof, together with any other funds appropriated for the
Assessable Improvements, ad valorem taxes, and Assessments collected during the construction of
the Assessable Improvements, will be deposited in the Assessable Improvements Account of the
Construction Fund to be used solely to defray expenses of the Assessable Improvements and the
payment of principal of and interest on the Improvement Bonds prior to the completion and
payment of all costs of the Assessable Improvements. Any balance remaining in the Assessable
Improvements Account after completion of the Assessable Improvements may be used to pay the
cost in whole or in part of any other improvement instituted under the Improvement Act, under the
direction of the City Council. When the Assessable Improvements are completed and the cost
thereof paid, the Assessable Improvements Account of the Construction Fund is to be closed and
any subsequent collections of Assessments and ad valorem taxes for the Assessable Improvements
are to be deposited in the Assessable Improvements Account of the Debt Service Fund.
4.03. City Covenants with Respect to the Improvement Bonds. It is hereby determined that the
Assessable Improvements will directly and indirectly benefit abutting property, and the City hereby
covenants with the holders from time to time of the Bonds as follows:
(a) The City will cause the Assessments for the Assessable Improvements to be
promptly levied so that the first installment for the Assessable Improvements will be collectible
not later than 2016 and will take all steps necessary to assure prompt collection, and the levy of
the Assessments is hereby authorized. The City Council will cause to be taken with due
diligence all further actions that are required for the construction of each Assessable
Improvement financed wholly or partly from the proceeds of the Improvement Bonds, and will
take all further actions necessary for the final and valid levy of the Assessments and the
appropriation of any other funds needed to pay the Improvement Bonds and interest thereon
when due.
(b) In the event of any current or anticipated deficiency in Assessments and ad
valorem taxes, the City Council will levy additional ad valorem taxes in the amount of the
current or anticipated deficiency.
(c) The City will keep complete and accurate books and records showing receipts
and disbursements in connection with the Assessable Improvements, Assessments and ad
valorem taxes levied therefor and other funds appropriated for their payment, collections thereof
and disbursements therefrom, monies on hand and, the balance of unpaid Assessments.
(d) The City will cause its books and records to be audited at least annually and will
furnish copies of such audit reports to any interested person upon request.
(e) At least twenty percent (20 %) of the cost to the City of the Assessable
Improvements described herein will be specially assessed against benefited properties.
4.04. General Obligation Pledge. For the prompt and full payment of the principal and interest
on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will
be and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient to pay all
principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be
promptly paid out of monies in the general fund of the City which are available for such purpose, and such
general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient
balance is available therein.
46869242 MNI MN 190-148 8
4.05. Pledge of Tax LevX. For the purpose of paying the principal of and interest on the
Bonds, there is levied a direct annual irrepealable ad valorem tax (the "Taxes ") upon all of the taxable
property in the City, which will be spread upon the tax rolls and collected with and as part of other
general taxes of the City. The Taxes will be credited on a pro rata basis to the Street Reconstruction
Account and the Assessable Improvements Account of the Debt Service Fund above provided and will be
in the years and amounts as attached hereto as EXHIBIT B.
4.06. Certification to County Auditor /Treasurer as to Debt Service Fund Amount. It is hereby
determined that the estimated collections of Taxes and Assessments will produce at least five percent
(5 %) in excess of the amount needed to meet when due the principal and interest payments on the Bonds.
The tax levy herein provided is irrepealable until all of the Bonds are paid, provided that at the time the
City makes its annual tax levies the Finance Director may certify to the County Auditor/Treasurer of
Wright County, Minnesota (the "County Auditor /Treasurer ") the amount available in the Debt Service
Fund to pay principal and interest due during the ensuing year, and the County Auditor /Treasurer will
thereupon reduce the levy collectible during such year by the amount so certified.
4.07. Registration of Resolution. The City Administrator is authorized and directed to file a
certified copy of this resolution with the County Auditor/Treasurer 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 Bonds, certified copies of
proceedings and records of the City relating to the Bonds 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 Bonds, and such instruments, including any heretofore furnished, will be
deemed representations of the City as to the facts stated therein.
5.02. Certification as to Official Statement. The Mayor, the City Administrator, and the Finance
Director are authorized and directed to certify that they have examined the Official Statement prepared and
circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and
belief the Official Statement is a complete and accurate representation of the facts and representations made
therein as of the date of the Official Statement.
5.03. Other Certificates. The Mayor, the City Administrator, and the Finance Director are
hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required
as a condition of sale. Unless litigation shall have been commenced and be pending questioning the
Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, the City
Administrator, and the Finance Director shall also execute and deliver to the Purchaser a suitable
certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a
certificate as to payment for and delivery of the Bonds.
Section 6. Tax Covenant.
6.01. Tax - Exempt Bonds. The City covenants and agrees with the holders 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 subject to taxation under the Internal Revenue Code
468692v2 MNI MN 190 -148 9
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 Bonds.
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 Bonds 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 Bonds, and
the rebate of excess investment earnings to the United States, if the Bonds (together with other
obligations reasonably expected to be issued in calendar year 2015) exceed 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 the calendar year in which the Bonds are issued and outstanding at
one time is not reasonably expected to exceed $5,000,000, all within the meaning of
Section 148(f)(4)(D) of the Code.
6.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the
Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be
"private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code.
6.04. Qualified Tax - Exempt Obligations. In order to qualify the Bonds as "qualified tax- exempt
obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual
statements and representations:
(a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code;
(b) the City designates the Bonds as "qualified tax - exempt obligations" 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 2015 will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar year
2015 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. Book -Entry System; Limited Obligation of City.
7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or
printed fully registered Bond for each of the maturities set forth in Section 1.06 hereof. Upon initial
468692v2 MNI MN 190-148 i0
issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the
name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its
successors and assigns ("DTC "). Except as provided in this section, all of the outstanding Bonds will be
registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC.
7.02. Participant . With respect to Bonds registered in the registration books kept by the
Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will
have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to
time for which DTC holds Bonds as securities depository (the "Participants ") or to any other person on
behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility
or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with
respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other
than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice
with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any
other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium,
if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the
person in whose name each Bond is registered in the registration books kept by the Registrar as the holder
and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect
to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes.
The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the
order of the respective registered owners, as shown in the registration books kept by the Registrar, and all
such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to
payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid.
No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar,
will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the
City Administrator of a written notice to the effect that DTC has determined to substitute a new nominee in
place of Cede & Co., the words "Cede & Co." will refer to such new nominee of DTC; and upon receipt of
such a notice, the City Administrator will promptly deliver a copy of the same to the Registrar and Paying
Agent.
7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket
Issuer Letter of Representations (the "Representation Letter ") which will govern payment of principal of,
premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or
Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action
necessary for all representations of the City in the Representation Letter with respect to the Registrar and
Paying Agent, respectively, to be complied with at all times.
7.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City
Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that
they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the
Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer
and exchange Bond certificates as requested by DTC and any other registered owners in accordance with
the provisions of this resolution. DTC may determine to discontinue providing its services with respect to
the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto
under applicable law. In such event, if no successor securities depository is appointed, the City will issue
and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions
hereof will apply to the transfer, exchange and method of payment thereof.
7.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the
contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with
468692v2 MNI MN190 -148 11
respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond
will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set
forth in the Representation Letter.
Section 8. Continuing Disclosure.
8.01. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate"
means that certain Continuing Disclosure Certificate executed by the Mayor and City Administrator and
dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from
time to time in accordance with the terms thereof.
8.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby
covenants and agrees that it will comply with and carry out all of the provisions of the Continuing
Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply
with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the
Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including
seeking mandate or specific performance by court order, to cause the City to comply with its obligations
under this section.
Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as
provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of
the Bonds 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 Bonds will remain in full force and effect. The City may
discharge all 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. 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 to the date of such deposit.
ADOPTED BYthe City Council of the City of Monticello, Minnesota, this 1261 day of October, 2015.
Z—BB Stumpf, Mayor -
ATTEST:
Jeff O'*i , Yty Administrator
468692v2 MNI MN190 -148 12