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:
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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:
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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
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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.
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(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
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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
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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
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=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
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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:
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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.
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(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
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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
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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