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City Council Agenda Packet 12-06-1993AGENDA SPECIAL MEETING - MONTICELLO CITY COUNCIL Monday, December 6, 199.9 - 8 p.m. Mayor: Ken Maus Council Manhers: Shirley Anderson, Brad Fyle, Clint Herbst, Patty Olsen Call to order. Consideration of resolution awarding the sale of $980,000 G.O. Refunding Bonds, Series 1994A. Adjournment. Special Council Agenda - 12/6/93 Consideration of resolution awarding the sale of $980.000 G.O. Refunding Bonds, Series 1994A, (H.W.) A. REFERENCE: AND BACKGROUND At 1 p.m., Monday, December 6, Springsted, Inc., our bond consultant, will be receiving bids on the sale of $980,000 in G.O. Refunding Bonds. The proceeds of this refinancing issue will he used to prepay the balance of the original $1,625,000 G.O. Improvement Bonds of 1988 that were used to finance improvements to East County Road 39, construction of wells #3 and #4, improvements to Dundas Circle in the industrial park, and the streetscape project. The refunding hoed issue will not immediately pay off all of the outstanding debt but will be put into an escrow account for a couple of years until February 1, 1997, at which time all of the remaining principal balance will be paid. This cross-over refunding bond issue is still expected to save the City approximately $1311,000 in total interest expense over what we are currently paying on the 1988 issue. Mr. Jerry Shannon, or a representative of Springsted, Inc., will he in attendance at the special Council meeting 14) provide a summary of the hids received and make it recommendation on awarding the sale to the bidder with the lowest net interest cost. It. ALTERNATIVE ACTIONS: 1. Accept the recommendation of our bond consultant and award the sale of the bonds to the lowest bidder. 2. If the interest savings do not meet our expectations, the Council could decide to delay refinancing until a later dale based on the recommendation of our hond consultant. C. STAFF RECOMMENDATION: It. is assumed (.flatthe interest rules haven't dramatically changed in the past few weeks; therefore, our savings on a refinancing of this nature should still save its the $1311,0110 in total interest cost. If savings in this neighborhood do materialize, it is recommended that the Council award the sale to the lowest bidder per recommendation of pond consultant. D, SUPI4 )HTING DATA: Copy of official statement prepared by Springsted, Inc.; Copy of resolution awarding sale. 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 special meeting of the City Council of the City of Monticello, Minnesota, was duly held in the City Hall in said City on Monday, December 6, 1953, commencing at 7:00 P.M. The following members were present: and the following were absent: rs• •sr rss The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's $ General Obligation Improvement Refunding Bonds, Series 1994A. The City Adminiatrator presented a tabulation of the proposals which had been received in the manner specified in the Official Terms of Proposal of the Bonds. The proposals were as follows: anuses nnsa-u After due consideration of the proposals, Member then introduced the following resolution and moved its adoption: In accordance with the Official Terms of Proposal the following adjustments were made: Principal Amount: Maturities: Minimum Purchase Price: RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF $ GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1994A; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY. BE IT RESOLVED By the City Council of the City of Monticello, Wright County, Minnesota (City) as follows: Section 1. Sale of Bonds. 1.01. Theproposalof (Purchaser) to purchase $ General Obligation Improvement Refunding Bonds, Series 1994A (Bonds) of the City described in the Official Terms of Proposal thereof is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $ plus accrued interest to date of delivery, for Bonds bearing interest as follows: Year of Interest Year of Interest Maturity Rate Maturity Rate 1997 2001 1998 2002 1999 2003 2000 2004 True interest rate: $Jul"0 iaiw-u 1. 02. The sum of $ being the amount proposed by the Purchaser in excess of $ is credited to the Escrow Account hereinafter created, or designated to pay costs of issuance of the Bonds, as the case may be. The City Administrator is directed to deposit the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers forthwith. The Mayor and City Administrator are directed to execute a contract with the Purchaser on behalf of the City. 1.03. The City will forthwith issue and sell the Bonds in the total principal amount of $ , originally dated January 1, 1994, in the denomination of $5,000 each orany integral multiple thereof, numbered No. R -i, upward, bearing Interest as above set forth, and which mature serially on February 1 in the years and amounts as follows: Year Amount Year Amount 1997 2001 1998 2002 1999 2003 2000 2004 1.04. Optional Redemption. The City may elect on February 1, 2002, and on any day thereafter, to prepay Bonds due on or after February 1, 2003. Redemption uwy be in whole or in part and if In part, at the option of the City and in such order as the City shall determine and within a maturity by lot as selected by the registrar. All prepayments shall be at a price of par plus accrued interest. 1.05. The maturity schedule of the Bonds shall be combined with the maturity schedule of the City's $1,825,000 General Obligation Improvement Bonds, Series 1988A, which combined maturities conform to Minnesota Statutes, Section 475.54. Section 2. Registration and Pavment. 2.01. Registered Form, The Bonds shall 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 Pavment 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 (1) the date of authentication Is an interest payment date to which interest has been paid or made available for payment, In which case such Bond shall be dated as of the date of authentication, or (0) the date of authentication is prior to the first interest payment date, in which case such Bond will be dated as of the date of original issue. The interest on the Bonds Is payable on February I and August I of each year, commencing August 1, 1994, to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 2.03. Restration. The City will appoint, and shall maintain, a bond s rogietrsr, tranor agent, authenticating agent and paying agont (Registrar). The SM15w iaiaa-u effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re ster. 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 such 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 any 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 such Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. For a transfer or exchange of Bonds, the Registrar may Impose a charge upon the owner thereof sufficient to reimburse tho Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. &M615:0 101100-t1 (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 Registrar of 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 re- demption, 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) not more than 60 and not less than 30 days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publlshing the notice In the wauuer 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 any proceeding 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 Registrar. The City appoints 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 con- solidation 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 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 Council, the City Administrator 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 all signatures may be printed, engraved or lithographed facsimiles of the originals. In case any officer whose signature or a facsimile of whose signature appears on the Bonds snsie:o 0190- 1 ceases to be such officer before the delivery of any Bond, such 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 each 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 Finance Director shall 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. 2.08. 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 Section 3 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. Section 3. Form of Bond. 3.01. The Bonds will be printed L1 substantially the following form: [Face of the Bond) UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF MONTICELLO GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND, SERIES 1994A Date of Rate Maturity Oriainal Issue CUSIP January 1, 1994 No The City of Monticello, Minnesota, a duly organized and existing municipal corporation in Wright County, Minnesota (City), acknowledges itself to be Indebted and for value received promises to pay to or registered assigns, the principal sum of f on the maturity date specified above, with intorost thereon from the date horeof at the annual rate a1"10:0 MOD -t1 specified above, payable February 1 and August 1 in each year, commencing August 1, 1994, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by 'Minnesota, as Bond Registrar, paying Agent, Transfer Agent and Authenticating Agent, or Its designated successor under the Resolution descrihed 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 Irrevo- cably pledged. The City may elect on February 1, 2002, and on any day thereafter, to prepay Bonds due on or after February 1, 2003. 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 shall determine and within a maturity by lot as selected by the registrar. All prepayments shall be at a price of par plus accrued interest. The City Council has designated the Bonds as "qualified tax exempt obliga- tions" within the meaning of Section 285(b) (3) of the Internal Revenue Code of 1988, 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. Additional provisions of this Bond are contained on the reverse hereof and such provisions for all purposes have the same effect as though fully set forth in this place. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Monticello, Wright County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of the Mayor and City Administrator and has caused this Bond to be dated as of the date set forth below. Dated: CITY OF MONTICELLO. MINNESOTA S Facafmile) ( Facsimile) City Administrator Mayor uu1540 =100.43 CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. By Authorized Representative [Reverse of the Bond j This Bond is one of an issue in the aggregate principal amount of $ all of like original issue date and tenor, except as to number, maturity date, redemp- tion privilege, and interest rate, all issued pursuant to a resolution adopted by the City Council on December 6, 1993 (the Resolution), for the purpose of providing money to refund in advance of maturity and on the Redemption Date, as defined in the Resolution, a portion of certain general obligation bonds of the City, pursuant to and in full conformity with the Constitudon and laws of the State of Minnesota, including Minnesota Statutes, Section 475.67, Subdivision 13 and Chapter 429. The interest hereon is payable until the Redemption Date, primarily out of the Escrow Account and Debt Service Account in the City's Refunding Bonds, Series 1994A Debt Service Fund and after the Redemption Date from special assessments against property specially benefitted by local improvements and 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 Bond 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 in special assessments and taxes pledged, which taxes may be levied without Umitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of x5,000 or any integral multiple thereof of single maturities. 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 Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's 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 tan, fee or governmental charge required to be paid with respect to such transfer or oxchango. The City and the Bond 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 Bond Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and taws of the State of 9n91eu0 10190-s1 Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond 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 Bond does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness. ( Form of certificate to be printed on the reverse side of each Bond, following a full copy of the legal opinion.) I certify that the above is a full, true and correct copy of the legal opinion rendered by bond counsel on the issue of Bonds of the City of Monticello, Minnesota, which includes the within Bond, dated as of the date of delivery of and payment for the Bonds. (Facsimile Signature) City Administrator The following abbroviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants UNIF GIFT MIN ACT Custodian in common Cust) (Minor) TEN ENT -- as tenants under Uniform Gifts or by entireties Transfers to Minors JT TEN -- as joint tenants with right of survivorship and Act . . not as tenants in common (State) 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 Bond and all rights thereunder, and does hereby lrrovocably 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: aiw1�0 MIN -4I 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 any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. The Bond Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account. ) Please insert social security or other identifying number of assignee 3.02. The City Administrator is authorized and directed to obtain a copy of the proposed approving legal opinion of Holmes & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on each Bond, together with a certificate to be signed by the facsimile signature of the Administrator in substantially the form set forth in the form of Bond. The Administrator is authorized and directed to execute the certificate in the name of the City upon receipt of the opinion and to file the opinion In the City offic- es. Section 4. Bonds; Securitv; Escrow. 4.01. Funds and Accounts. For the convenience and proper administration of the moneys to be borrowed and repaid on the Bonds and the Refunded Bonds (as defined in the resolution providing for the Issuance and sale of the Bonds) , and to provide adequate and specific security for the Purchaser and holders from time to time of the Bonds and Refunded Bonds, there is hereby created a special fund to be designated the Refunding Bonds, Series 1994A Debt Service Fund (the Fund) to 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 Fund shall be maintained in the manner herein specified until all of the Refunded Bonds have boon paid and until all of the Bonds and the interest thereon shall have been fully paid. There shall be maintained in the Fund two separate accounts, to be designated the Escrow Account and Debt Service Account. L7"1D40 101100-4] (a) Escrow Account. The Escrow Account shall be maintained as an Escrow Account (Escrow Account) with in , Minnesota, which is a suitable financial institution within the State, whose deposits are insured by the Federal Deposit Insurance Corporation, whose combined capital and surplus is not less than $500,000 and said financial institution is hereby designated escrow agent (Escrow Agent) for the Escrow Account. All proceeds of the sale of the Bonds shall be received by the Escrow Agent and applied to fund the Escrow Account or to pay costs of issuing the Bonds. Proceeds of the Bonds not used to pay costs of issuance are hereby irrevocably pledged and appropriated to the Escrow Account, together with all investment earnings thereon. The Escrow Account shall be invested in securities maturing or callable at the option of the holder on such dates and bearing interest at such rates as shall be required to provide sufficient funds, together with any cash or other funds retained in the Escrow Account, to pay when due the interest to accrue on each Bond to and including February 1, 1998 (Redemption Date), and to pay when due on the Redemption Date the principal amount of each of the Refunded Bonds then outstanding. From the Escrow Account there shall be paid (1) all interest paid on, or to be paid on, or to accrue on, the Bonds to and including the Redemption Date, and (ii) the principal of the Refunded Bonds due by reason of redemption on the Redemption Date. The Escrow Account shall be irrevocably appropriated to the payment of the principal of and interest on the Bonds until the proceeds of the Bonds therein are applied to prepayment of the Refunded Bonds. The moneys in the Escrow Account shall be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Escrow Account may be remitted to the City, all in accordance with the Escrow Agreement ( hereafter defined) by and between the City and the Escrow Agent. Any moneys remitted to the City upon termination of the Escrow Agreement shall be deposited in the Debt Service Account. (b) Debt Service Account. To the Debt Service Account there is hereby pledged and irrevocably appropriated and there shall be credited: (i) any balance remitted to the City upon the termination of the Escrow Agreement; (1i) any balance remaining on February 2, 1998, In the Debt Service Fund created by the City Council resolution authorizing the issuance and sale of the Refunded Bonds (Prior Resolution) ; (iii) any collections of all lazes helreafter levied for the payment of the Bonds and interest thereon, (iv) all investment earnings on funds in the Debt Service Account: (v) special assessments collected after the Redemption Date that wore pledged to repayment of the Refunded Bonds in the Prior Resolution; (vi) accrued interest (if any) received upon delivery of the Bonds to the extent not required to fund the Escrow Account; and (vii) any and all other moneys which are properly available and aro appropriated by the City Council to the Debt Service Account. The amount of any surplus remaining in the Debt Service Account when the Bonds and interest thereon are paid shall be used as provided in Section 475.81, Subdivision 4 of the Act. 4.02. The moneys in the Debt Service Account shall be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds &3"1546 19 399-" which were used directly or indirectly to acquire higher yielding investments, except (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (ll) in addition to the above, in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds any sums from time to time held in the Fund (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any applicable temporary periods or minor portion made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds to be federally guaranteed within the meaning of Section 149(b) of the Internal Revenue Code of 1988, as amended (the Code). 4.03. 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 shall be and are hereby irrevocably pledged. If the balance in the Escrow Account or Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall 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 Escrow Account or Debt Service Account when a sufficient balance is available therein. 4.04. It is hereby determined that upon the deposit of proceeds of the Bonds in the Escrow Account that an irrevocable appropriation to the debt service fund for the Refunded Bonds to be redeemed on the Redemption Date shall have been made within the meaning of Section 475.81, Subdivision 3 of Minnesota Statutes, as amended, and the Administrator Is hereby authorized and directed to certify such fact to and request the County Auditor to cancel the tax levies made by the Prior Resolution for the years 1995 through 2002 (year stated being the year of levy for collection the following year). 4.05. Pledge of Tax Levies. (a) To provide moneys for payment of the principal and interest on the Bonds, there is hereby levied upon all of the taxable property in the County a direct annual irrepealable ad valorem tax to be spread upon the tax rolls and collected with and as part of other general property taxes in the County. Such tax shall be credited to the Debt Service Account above provided and shall be for the years and in the amounts as follows (year stated being year of levy for collection the following year): Year Levy (See Attachment B) (b) The tax levies are such that if collected in full they, together with estimated collections of investment earnings (and until the Redemption Date, all &M61 40 iaiao-43 amounts in the Escrow Account) and other revenues herein pledged for the payment of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levies shall be irrepealable so long as any of the Refunded Bonds and the Bonds are outstanding and unpaid, provided that the County reserves the right to reduce the levies in the manner and to the extent permitted by Section 475.61, Subdivision 3 of Minnesota Statutes, as amended. 4.06. Filina. The City Administrator is authorized and directed to file a certified copy of this resolution with the County Auditor of Wright County and to obtain the certificate required by Section 475.63 of the Act. Section 5. Refundine: Findines: Redemption of Refunded Bonds. 5.01. It is hereby found and determined that based upon information presently available from the City's financial advisers, the issuance of the Bonds will result in a reduction of debt service cost to the City on the Refunded Bonds as follows: Refunding Refunded Bonds Bonds The dollar value of such debt service cost savings (Reduction) is $ , and the present value of the Reduction determined as of the Redemption Date is $ . The present value of the Reduction is % of the present value of the debt service cost on the Refunded Bonds. The ReducTon, after the inclusion of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is adequate to authorize the issuance of the Bonds as provided by Section 475.67, Subdivision 13 of Minnesota Statutes. 5.02. As of the date of delivery of and payment for the Bonds the proceeds of the Bonds, in the amount of $ plus accrued interest on the Bonds less necessary expenses of the issuance of the Bonds (Proceeds), together with other funds (Funds) in the amount of $ are hereby pledged and appropriated and shall be deposited in the Escrow Account. 5.03. It is hereby found and determined that the Proceeds and Funds available and appropriated to the Escrow Account will be sufficient, together with the permitted earnings on the investment of the Escrow Account, to pay at maturity or redemption all of the principal of and redemption premium (if any) on the Refunded Bonds. 5.04. Securities purchased from the monies in the Escrow Account shall be limited to securities specified in Section 475.67, Subdivision 8 of the Act. Springsted Incorporated, as agent for the City is hereby authorized and directed to purchase for and on behalf of the City and in its name, appropriate securities to fund the Escrow Account. Upon the issuance and delivery of the Bonds, the securities so purchased shall be deposited with the Escrow Agent and hold pursuant to the terms of the Escrow Agreement and the Resolution. W361640 =199-i3 5.05. The Refunded Bonds maturing on February 1, 1997 and thereafter shall be redeemed and prepaid on the Redemption Date. The Refunded Bonds shall be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as Attachment A which terms and conditions are hereby approved and incorporated herein by reference. 5.08. Escrow Acreemont. On or prior to the delivery of the Refunding Bondi;, the Mayor and the City Administrator are hereby authorized and directed to execute on behalf of the City an escrow agreement (Escrow Agreement) with the Escrow Agent in substantially the form now on file with the City Administrator. All essential terms and conditions of the Escrow Agreement including payment by the City of reasonable charges for the services of the Escrow Agent, are hereby approved and adopted and made a part of this resolution, and the City covenants that it will promptly enforce all provisions thereof in the event of default thereunder by the Escrow Agent. 5.07. Defeasance. When all Bonds and all interest thereon, have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds shall 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 shall 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. The City may also at any time discharge and defease the Bonds in their entirety by complying with the provisions of Section 475.87 of Minnesota Statutes, except that the funds deposited in escrow in accordance with said provisions may (to the extent permitted by law) but need not be, in whole or in part, proceeds of bonds as therein provided without the consent of any Bondholders. Section 8. Authentication of Transcrint. 8.01. 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, shall be deemed representations of the City as to the facts stated therein. 8.02. The Mayor and City Administrator are hereby 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 tho date of the Official Statement. & MIew 101100-4I Section 7. Tax Covenant. 7.01. 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 of 1988, 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 nf kers, 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. 7.02. (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 1994) 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 35,000,000, all within the meaning of Section 148(f) (4)(C) of the Code and further finds, determines and declares that the aggregate amount of all tax-exempt bonds (other than private activity bonds) issued by the City in 1994 (the year the Refunded Bonds were issued) did not exceed $5,000,000, and that the average maturity date of the Bonds is not later than the average maturity date of the Refunded Bonds. 7.03. 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. 7.04. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 285(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 hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 285(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be Issued by the City (and all snae4o 10340-4] subordinate entities of the City) during calendar year 1994 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 1994 have been designated for purposes of Section 295(b)(3) of the Code. 7.05. The City shall use its best efforts to comply with any federal Procedural requirements which may apply in order to effectuate the designations made by this section. The motion for the adoption of the foregoing resolution was duly seconded by Member , and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. a UI540 Moo -4] STATE OF MINNESOTA ) COUNTY OF WRIGHT ) SS. CITY OF MONTICELLO ) I, the undersigned, being the duly qualified and acting City Administrator of the City of Monticello, Wright County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a special meeting of the City Council of the City held on December 6, 1993 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 $ General Obligation Improvement Refunding Bonds, Series 1994A of the City. WITNESS My hand officially as such City Administrator and the corporate seal of the City this day of December, 1993. (SEAL) L7N1N0 MIN -61 City Administrator Monticello, Minnesota ATTACHMENT A NOTICE OF CALL FOR REDEMPTION $1,625,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1988A CITY OF MONTICELLO WRIGHT COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Monticello, Wright County, Minnesota, there have been called for redemption and prepayment on FEBRUARY 1, 1998 all outstanding bonds of the City designated as General Obligation Improvement, as Series 1988A, dated June 1, 1988, having stated maturity dates of February 1 in the years 1997 through 2004, both inclusive, totalling $1,035,000 in principal amount, and with the following CUSIP numbers: Year CUSIP 1997 614468 _ 1998 614468 1999 _ 614468 _ 2000 614468 _ 2001 614468 _ 2002 614468 _ 2003 614468 2004 _ 614468 The Registrar shall not be responsible for the selection or use of the CUSIP number, ` nor is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. The bonds are being called at a price of par plus accrued interest to February 1, 1996, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of American National Bank and Trust Company, in the City of St. Paul, Minnesota, on or before February 1, 1996. Dated: , 19_. BY ORDER OF THE CITY COUNCIL By W"15" 'L IOI/10-�I City Administrator City of Monticello, Minnesota