HomeMy WebLinkAbout04-217 s„
CITY OF LAKEVILLE
RESOLUTION
Date October 18, 2004 Resolution No. 04-217
Motion By Luick Seconded By Wulff
RESOLUTION AUTHORIZING ISSUANCE AND SALE, PRESCRIBING
THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF
GENERAL OBLIGATION WATER REVENUE REFUNDING BONDS,
SERIES 2004B
BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the City), as
follows:
SECTION 1. AUTHORIZATION AND SALE.
1.01. Authorization. The City Council by a resolution duly adopted. on October 4,
2004, authorized the issuance and public sale of its General Obligation Water Revenue
Refixnding Bonds, Series 2004B, in the aggregate principal amount of $10,090,000 (the Bonds),
subject to adjustment in accordance with the Terms of Proposal. The proceeds. of the Bonds will
be used, together with any additional funds of the City which might be required, to refund in
advance of maturity, on February 1, 2006 (the Crossover Date), the 2007 through 2011
maturities, aggregating $1,195,000 in principal amount, of the City's $2,850,000 General
Obligation Water Revenue Bonds, Series 1995D, originally dated June 1, 1995, and the 2007
through 2016 maturities, aggregating $8,625,000 in principal amount, of the City's $13,400,000
General Obligation Water Revenue Bonds, Series 1996A, originally dated November 1, 1996
(collectively, the Refunded Bonds), in a "crossover refunding" as defined in Minnesota Statutes,
Section 475.67, subdivision 13. .The proceeds of the Refunded Bonds were used to finance
various improvements to the City's municipal water system (the Water System).
1.02. Sale. Pursuant to the Tenns of Proposal and the Official Statement prepared on
behalf of the City by Springsted Incorporated, sealed proposals for the .purchase of the Bonds
were received at or before the time specified for receipt ofproposals. The proposals have been
opened, publicly read. and considered and the purchase price, interest rates and net. interest cost
under the terms of each proposal have been determined. The most favorable proposal received is
that of
in ,and associates (the Purchaser), to
purchase the Bonds at a price of $ plus accrued interest on all Bonds to the
day of delivery and payment, on the further terms and conditions hereinafter. set forth.
1.03. Award. The sale of the Bonds is hereby awarded to the Purchaser and the Mayor.
• and City Clerk are hereby authorized and directed to execute a contract on behalf of the City for
the sale of the Bonds in accordance with the terms of the proposal. The good faith deposit of the
s
• Purchaser shall be retained and deposited by the City until the Bonds have been delivered, and
shall be deducted from the purchase price paid at settlement.
1.04.. Savin s. It is hereby determined that:
(a) by the issuance of the Bonds the City will realize a substantial interest rate
reduction, a gross savings of approximately $ and a present value
savings (using the yield on the Bonds, computed in accordance with Section 148 of the
Internal Revenue Code of 1986, as amended (the Code), as the discount factor). of
approximately $ ;and
(b) as of the Crossover Date, the present. value of the debt service on the Bonds,
computed to their stated maturity dates, after deducting any premium, is lower by
(not less than 3%) than .the sum of (i) the present value of the debt service on
the Refunded Bonds, computed to their stated maturity dates, plus (ii) any expenses of the
refunding payable from a source other than the proceeds. of the Bonds: or investment
earnings thereon, using the yield of the Bonds as the discount rate.
SECTION 2. BOND: TERMS• REGISTRATION• EXECUTION AND DELIVERY.
2.01. Issuance of Bonds. All acts, conditions and things which are required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen. and to be
• performed precedent to and in the valid issuanceof the Bonds having been done, now existing,
having happened and having been performed, it is now necessary for the City Council to
establish the form and terms of the Bonds, to provide security therefor and to issue the Bonds
forthwith.
2.02. Maturities; Interest Rates; Denominations and Payment. The Bonds shall be
originally dated as of November 1, 2004, shall be in the denomination of $5,000 each, or any
integral multiple thereof, of single maturities, shall mature on February 1 in the years and
amounts stated below,. and shall bear interest from date of issue until paid or duly called fore
redemption at the annual rates set forth opposite such years and amounts, as follows:
Year Amount Rate Year Amount Rate
2007 $1,015,000 % 2012 $$90,000
2008 1,020,000 2013 925,000
2009 1,065,000 2014 955,000
.2010 1,075,000 2015 985,000'
- 2011 1,120,000 2016. .1,040,000
[REVISE MATURITY SCHEDULE FOR ANY TERM BONDS]
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r
The Bonds shall be issuable only in fully registered-form. Interest shall be computed on the basis
of a 360 day year composed. of twelve 30 day months.. The interest on and, upon surrender of
each Bond, the principal amount thereof, shall be payable by check or draft issued by the
Registrar described herein; provided that,. so long as the Bonds are registered in the name of a
securities depository, or a nominee thereof, in accordance with Section 2.08 hereof, principal and
interest shall be payable in accordance withthe operational arrangements of the securities
depository.
2.03. Dates and Interest Payment Dates. Upon initial delivery of the Bonds pursuant to
Section 2.07 and upon any subsequent transferor exchange pursuant to Section 2.06, the date of
authentication shall be noted on each Bond so delivered, exchanged or transferred. Interest on
the Bonds shall bepayable on February 1 and August 1 in each year, commencing August 1,_
2005, each such date being referred to herein as an Interest Payment Date, to the persons in
.whose names the Bonds are registered on the Bond Register, as hereinafterdefined, at the
Registrar's close of business on the fifteenth day of the calendar month nextpreceding such
Interest Payment Date, whether or not such day is a business day.
2.04. Redemption. Bonds maturing on or after February 1, 201.5 shall be subject to
redemption and prepayment at the option of the City, in whole or in part, in such order of
maturity dates as the City may select and, within a maturity, by lot as selected by the Registrar
(or, if applicable, by the bond depository in accordance with its customary procedures) in
multiples of $5,000, on February 1, 2014,. and on any date thereafter, at a price equal to the
principal amount thereof and accrued interest to the date of redemption. The City Clerk shall
cause notice of the call for redemption thereof to be published as required by law, and of least
thirty days prior to the designated redemption date, shall cause notice of call for redemption to be
mailed, by first class mail, to the registered holders of any Bonds to be redeemed at their
addresses as they appear on the bond register described in Section 2.06 hereof, but no defect in
or failure to give such mailed notice of redemption shall affect the validity. of proceedings for. the
redemption of any Bond not affected by such defect or failure. Official notice of redemption
having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the
redemption date, become due and payable at the redemption price therein specified and from and
after such date (unless the City shall default in the payment of the redemption price) such Bonds
or portions of Bonds shall cease to bear interest. Upon partial redemption of any Bond, a new
Bond or Bonds will be delivered to the owner without .charge, representing the remaining
principal amount outstanding.
[COMPLETE THE FOLLOWING PROVISIONS IF THERE ARE TERM BONDS-
ADD ADDITIONAL PROVISIONS IF THERE ARE MORE THAN TWO TERM BONDS]
[Bonds maturing on February 1, 20 and 20 (the Term Bonds) shall be subject to
mandatory. redemption prior to maturity pursuant to the sinking fund requirements of this Section
2..04 at a redemption price equal to the stated principal amount thereof plus interest accrued
thereon to the redemption date, wthoutpremium. The Registrar shall select forredemption, by
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lot or other manner deemed fair, on February 1 in each of the following years the, following
stated principal amounts of such Bonds:
Year Principal Amount
The remaining $ stated principal amount of such Bonds shall be paid at
maturity on February 1, 20
Year Principal Amount
The remaining $ stated principal .amount of such Bonds shall be paid at
maturity on February 1, 20
Notice of redemption shall be given as provided in the preceding paragraph.]
2.05. Appointment of Initial Re ig strar. The City hereby appoints U.S. Bank National
Association in St. Paul, Minnesota, as the initial bond registrar, transfer agent and paying agent
(the Registrar). The Mayor and City Clerk 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 organized under the laws of "
the United States or one. of the states of the United States and authorized byelaw to conduct. such
business, such corporation shall be authorized to act as successor Registrar. The City agrees to
pay the reasonable and customary charges of the Registrar for the services performed. The City
reserves the right to remove the Registrar, effective upon not less than thirty days' written notice
and upon the appointment and acceptance of a successor Registrar, in which event the
predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar
.and shall deliver the Bond Register to the successor Registrar.
2.06. Registration. The effect of registration and the rights and duties of the City-and the
Registrar with respect thereto shall be as follows:
(a) Re ig ster. The Registrar shall keep. at its principal corporate trust office a
register (the Bond Register) in which the Registrar shall provide for the registration of
ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to
be registered, transferred or exchanged. The term Holder or Bondholder as used herein
shall mean the person (whether a natural person, corporation, association, :partnership,
trust, governmental unit, or other legal entity) in whose name a Bond is registered in the
Bond Register.
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(b) Transfer of Bonds. Upon surrender for transfer of any Bond duly endorsed by
the registered owner thereof or accompanied by a written instrument of transfer, in form
satisfactory to the Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Registrar shall
authenticate and deliver, in the name of the designated transferee or transferees, one or
more new Bonds of a like aggregate principal amount and maturity, as requested by the
transferor. The Registrar may, however, close the books for registration of any transfer
after the fifteenth day of the montk preceding each interest payment date and until such
interest payment date.
(c) Exchange ofBonds. Whenever any Bonds are surrendered by the registered
owner for exchange the Registrar shall authenticate and deliver one or more' new Bonds
of a ike aggregate principal amounf and maturity, as requested by the registered owner or
the owner's attorney in writing.
(d) Cancellation. All Bonds surrendered for payment, transfer or exchange shall
be promptly canceled by the Registrar and thereafter disposed of. The Registrar shall
furnish the City at least once each year a certificate setting forth the principal amounts
and numbers of Bonds canceled and destroyed.
(e) Improper or Unauthorized Transfer. When any Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Bond or separate instrument of transfer is valid and genuine and
that the requested transfer is legally authorized. The Registrar shall incur no liability for
the refusal, in good .faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person in
whose name any Bond is at any time registered in the bond register as the absolute owner
of the Bond, whether the Bond shall be overdue or not, for the purpose of receiving
payment of or on account of, the principal of and interest on the Bond and for all other
purposes; and all payments made to anyxegistered owner or upon the owner's order shall
be valid and effectual to .satisfy and discharge the liability upon Bond to the extent of the
sum or sums so paid.
(g} Taxes, Fees and Charges. For every transfer or exchange of Bonds .(except
for an exchange upon a partial redemption of a Bond), the Registrar may impose a charge
.upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other
governmental charge required to be paid with respect to such transfer. or exchange.
(h) Mutilated, Lost,. Stolen or Destroyed Bonds.. In case any Bond shall become
mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like
amount, number, maturity date and tenor in exchange and substitution for and upon
cancellation of any such mutilated Bond or in lieu of and insubstitution for any Bond
destroyed, .stolen or lost, upon the payment of the reasonable expenses and charges of the.
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Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or-lost,
upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed,
stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an
appropriate bond or indemnity in form, substance and amount satisfactory to it, in which
both the City and the Registrar shall be named as obligees. All Bonds so surrendered to
the Registrar shall be canceled by it and evidence of such cancellation shall be given to
the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been
called for redemption in accordance with its terms. it shall not be necessary to issue a new
Bond prior to payment.
(i) Authenticating Agent. The Registrar is hereby designated authenticating
agent for the Bonds, within the meaning of Minnesota Statutes, Section 475.55,
Subdivision 1, as amended.
(j) .Valid Obli ations. All Bonds issued upon any transfer or exchange of Bonds
shall be the valid obligations of the City, evidencing the same debt, and entitled to the
same benefits under this Resolution as the Bonds surrendered upon such transfer or
exchange.
2.07. Execution, Authentication and Delivery. The Bonds shall be prepared under the
direction of the City Clerk and shall be executed on behalf of the City by the signatures of the
Mayor and the City Clerk, provided .that the signatures may be printed, engraved or lithographed.
facsimiles of the originals. In case any officer whose signature or a facsimile of whose signature.
shall appear on the Bonds shall cease to be such. officer before the delivery of any Bond, such
signature or facsimile shall nevertheless be valid and sufficient. for all purposes, the same as if he
had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or
obligatory for any purpose or entitled to any security or benefit under this resolution unless and
until a certificate of authentication on the Bond has been duly executed by the manual signature
of an authorized representative of the Registrar. Certificates of authentication on different Bonds
need not be signed by the same representative. The executed certificate of authentication on
each Bond shall be conclusive evidence that it has been authenticated and delivered .under this
resolution. When the Bonds have been prepared, executed and authenticated, the City Clerk
shall deliver them to the Purchaser upon payment of the purchase price in accordance with the
contract of sale heretofore .executed, and the Purchaser shall not be obligated to see to the
application of the. purchase price.
2.08... Securities Depository. (a) For purposes of this section the following terms shall
have the following meanings:
"Beneficial Owner" shall mean, whenever used with respect to a Bond, the person in
whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the
records of such Participant, or such person's subrogee.
"Cede & Co." shall mean Cede & Co., the nominee of DTC, and any. successor nominee
• of DTC with respect to the Bonds.
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"DTC" shall mean The Depository Trust Company of New York, New York.
"Participant" shall mean any broker-dealer, bank or other financial institution for which
DTC holds Bonds as securities depository.
"Representation Letter" shall. mean the Representation Letter pursuant to which the City
agrees to comply with DTC's Operational Arrangements.
(b) The Bonds shall be initially issued as separately authenticated fully registered bonds,
and one Bond shall be issued in the principal amount of each stated maturity of the Bonds.: Upon
initial issuance, the ownership of such Bonds shall be registered in the bond register in the name
of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee).
as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment
of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be
redeemed, if any, giving any notice permitted or required to be given to registered owners of
Bonds under this resolution, registering the transfer of Bonds, and for all other purposes
whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary.
Neither the Registrar nor the City shall have any responsibility or obligation to any Participant,
any person. claiming a beneficial ownership interest in the Bonds under or through DTC or any
Participant, or any other person which is not shown on the bond register as being a registered
owner of anyBonds, with respect to the accuracy of any records maintained by DTC or any
Participant, with respect to the payment by DTC or any Participant of any amount with respect to
the. principal of or interest on the Bonds, with respect to any notice which is permitted or
required to be given to owners of Bonds under this resolution, with respect to the selection by
DTC or any Participant of any person to receive payment in the event of a partial redemption of
the Bonds, or with respect to any consent given or other action taken byDTC as registered owner
of the Bonds.. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC,.
the Registrar shall pay all principal of and interest. on such Bond, and shall give all notices with
respect to such Bond, only to Cede & Co. in accordance with DTC's Operational Arrangements,
and all such payments shall be valid and effective to fully satisfy and discharge the City's
obligations with respect to the principal of and interest on the Bonds to the extent of the sum or
sums so paid. No person other than DTC shall receive an authenticated Bond for each separate
stated maturity evidencing the obligation of the. City. to make payments of principal and interest.
Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., the Bonds. will be transferable to such new
nominee in accordance with paragraph (e) hereof.
(c) In the event the City determines that it is in the best interest. of the Beneficial Owners
that theybe able to obtain Bonds in the form of bond certificates, the City may notify DTC and
the Registrar, whereupon DTC shall notify the Participants. of the availability: through DTC of
Bonds in the form of certificates. In such event, the Bonds will be transferable in accordance
with paragraph (e) hereof. DTC may determine to discontinue providing its services with respect
to the Bonds at any time by giving notice to the City and the Registrar and discharging its
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responsibilities with respect thereto under applicablelaw. In such event the Bonds will be
transferable in accordance with paragraph (e) hereof.
(d) The execution and delivery of the Representation Letter to DTC by the Mayor or City
Clerk is hereby authorized and. directed.
(e) In the event that any transfer or exchange of Bonds is permitted under paragraph (b)
or (c) hereof, such. transfer or exchange shall be accomplished upon receipt by the Registrar of
the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted
transferee in accordance with the provisions of this resolution. In the eventBonds in the form of
certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as
owner of all the Bonds, or another securities depository as owner of all the Bonds,. the provisions
of this resolution shall also apply to all matters relating thereto, including, without limitation, the
printing of such Bonds in the form of bond certificates and the method of payment of principal of
and interest on such Bonds in the form of bond certificates.
2.09. Form of Bonds. The Bonds shall be prepared in substantially the following form:
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UNITED STATES OF AMERICA
`STATE OF MINNESOTA
COUNTY OF DAKOTA
CITY OF LAKEVILLE
GENERAL OBLIGATION WATER REVENUE REFUNDING BOND, SERIES 2004B
R- $
Interest Rate Maturity Date Date of Original Issue CUSIP No.
%o February 1, 20-- November 1, 2004.
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: THOUSAND DOLLARS
THE CITY OF LAKEVILLE, .MINNESOTA (the City), acknowledges itself to be
indebted and hereby promises to pay to the registered owner named above, or registered assigns,
the principal amount specified above on the maturity date: specified above, with interest thereon
.from the date hereof at the annual rate specified above, payable on February 1 and. August 1 in
each year, commencing August 1, 2005, 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, alI subject to the provisions referred to herein with respect to the redemption of
the principal of this Bond before maturity. Interest hereon shall be computed on the basis of a
360-day year composed of twelve 30-day months. The interest hereon and, upon presentation
and surrender hereof at the principal office of the agent of the Registrar described below, the
principal hereof are payable in lawful money of the United States of America by check or draft
drawn on U.S. Bank National Association, as bond registrar, transfer agent and paying agent, or
its successor designated under the Resolution described herein (the Registrar), or its designated
successor under the Resolution described herein. For the prompt and full payment of such
principal and interest as the same respectively become due, the full faith and credit and taxing
powers of the City have been and are hereby irrevocably pledged.
This Bond is one of an issue (the Bonds) in the aggregate principal amount of
$10,090,000, issued pursuant to a resolution adopted by the City Council on October 4, 2004 (the
Resolution) to provide funds to refund certain outstanding general obligation water. revenue
bonds of the.City, the proceeds of which were used to finance improvements to the City's
municipal water system (the Water System), and is issued pursuant to and in full conformity with
the Constitution and laws of the .State of Minnesota thereunto enabling, including Minnesota.
Statutes, Chapter 444 and 475, and Section 115.46. The Bonds are issuable only in fully
registered form, in denominations of $5,000 or any integral multiple thereof, of single maturities.
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Bonds maturing on or after February 1, 2015 are each subject to redemption and
prepayment at the option of the City, in whole or in part, in such order of maturity dates as the
City may select and, within a maturity, by lot as selected by the Registrar: (or, if applicable, by
the bond depository in accordance with its customary procedures) in multiples of $5,000 on
February 1, 2014, and on any date thereafter, at a price equal to the principal amount thereof plus
interest accrued to the date of redemption. The City will cause notice of the call for redemption
to be published as required by law and, at least thirty days prior to the designated redemption
date, will cause notice of the call thereof to be mailed by first class mail. to the registered owner
of any Bond to be redeemed at the. owner's address as it appears on the bond register maintained
by the Registrar, but no defect in or failure to give such mailed notice of redemption shall affect
the validity of proceedings for the redemption of any Bond not affected by such defect or failure.
.Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so
to be redeemed shall, on the redemption date, become due and payable at the redemption price
therein specified, and from and after such date (unless the. City shall default in the payment of the
redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon partial
redemption of any Bond, a new Bond or Bonds will. be delivered to the registered owner without
charge, representing the remaining principal amount outstanding.
[COMPLETE THE FOLLOWING PROVISIONS IF THERE ARE TERM BONDS -
ADD ADDITIONAL PROVISIONS IF THERE ARE MORE THAN TWO TERM BONDS]
[Bonds maturing in the year 20 and 20 shall be subject to mandatory
redemption, at a redemption price equal to their principal amount plus interest accrued thereon to
the redemption date, without premium,. on February 1 in each of the years shown below, in an
amountequal to the following principal amounts:
Term Bonds Maturin ig n 20-- Term Bonds Maturin ig n 20_-
Sinking Fund Aggregate Sinking Fund Aggregate
Payment Date Principal Amount Payment Date Principal Amount
$ $
Notice of redemption shall be given as provided in the preceding paragraph.]
As provided in the Resolution and subject to certain limitations set forth therein, this
Bond is transferable upon the books of the City at the principal office of the Registrar, by the
registered owner hereof in person or by the owner's attorney duly authorized in writing upon
surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly
executed by the registered owner or the owner's attorney; and may also be surrendered in
exchange for 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
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date, subject to reimbursement for any tax, fee or governmental charge required to be paid with
respect to such transfer or exchange.
The City and the Registrar may deem and treat the person in whose name this Bond is
registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of
receiving payment and for. all other purposes, and neither the City nor the Registrar shall be
affected by any notice to the contrary.
Notwithstanding any other provisions of this Bond, so long as this Bond is registered in
the name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any
other nominee of The. Depository Trust Company or other securities depository, the Registrar
shall pay all principal of and. interest on this Bond, and shall give all notices with respect to this
Bond, only to Cede & Co. or other nominee inaccordance with the operational arrangements of
The Depository Trust Company or other securities depository as agreed to by the City.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts,
conditions and things required by the Constitution and laws of the State of Minnesota to be done,
to exist,. to happen and to be performed preliminary to and in the issuance of this Bond,in order
to make it a valid and binding general obligation of the City in accordance with tsterms, have
been done, do exist, have happened and have been performed as so required; that in and by the
Resolution, the .City has covenanted and agreed it will impose and collect charges for the service,
use and availability of the Water System at the times and in the amounts required to produce net
revenues which, together with any other funds appropriated by the City, will be not less than five
percent in excess of the amounts necessary to pay the principal of and interest on the Bonds
when due; that if necessary for payment of such principal and interest, ad valorem taxes are
required to be levied upon all taxable property in the City, without limitation as to rate or
amount; and that the issuance of this Bond, together with all other indebtedness of the City
outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause
the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Resolution until the Certificate of Authentication hereon shall have
been executed by the Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Lakeville, Minnesota, by its City Council, has
caused this Bond to be executed on its. behalf by the facsimile signatures of the Mayor and City
Clerk and has caused this Bond to be dated as of the date set forth below.
CITY OF LAKEVILLE, MINNESOTA
(facsimile signature City Clerk) (facsimile siunature Mayor)
CERTIFICATE OF AUTHENTICATION
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This is one of the Bonds delivered pursuant to the Resolution mentioned within.
Date of Authentication: U.S. BANK NATIONAL ASSOCIATION,
as Registrar
By
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though. they were written out. in full according to the applicable laws or regulations:
TEN COM - as tenants in common UTMA as Custodian for
(Gust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Transfers to Minors Act
(State)
JT TEN as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and'all rights thereunder, and does hereby irrevocably constitute and.appoint
attorney to transfer the said Bond on the books kept. for registration of the
within Bond, with full power of substitution in the premises.
Dated:
NOTICE: The assignor's signature to this assignment. must
correspond with the name as it appears upon the face of the
within Bond in every particular, without alteration or
enlargement or any change whatsoever.
Signature Guaranteed:
Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements
of the Registrar, which requirements include membership or participation in STAMP or such
other "signature guaranty program" as may be determined by the Registrar in addition to or in
substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
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[end of bond form]
SECTION 3. USE OF PROCEEDS. Bond proceeds in the amount of $ are.
irrevocably appropriated for the payment of interest to become due on the Bonds to and
including the Crossover Date and for the payment and redemption of the Refunded Bonds on the
Crossover Date. The Clerk is hereby authorized and directed, simultaneously with the delivery
of the Bonds, to deposit the proceeds thereof, to the extent described above, in escrow with U.S.
Bank National Association, in St. Paul, Minnesota, a banking institution whose deposits are
insured bythe Federal Deposit Insurance Corporation and whose combined capital and surplus is
not less than $500,000,. and shall invest the funds so deposited in securities authorized for such
purpose by Minnesota Statutes, Section 475.67, subdivision 8, maturing on such dates. and
bearing interest at such rates as are required to provide funds sufficient, with cash retained in the
escrow account, to make the above-described payments. The Mayor and City Clerk are hereby
authorized to enter into an escrow agreement with said. Bank establishing the terms and
conditions for the escrow account in accordance with Minnesota Statutes,. Section 475.67. Of the
remaining Bond proceeds, $ shall be applied to pay issuance expenses and
$ shall be deposited in the Bond Fund created pursuant to Section 4 hereof.
SECTION 4. GENERAL OBLIGATION WATER REVENUE REFUNDING BONDS
SERIES 2004B BOND FUND. The Bonds shall be payable from a separate and special General
.Obligation Water Revenue Refunding Bonds, Series 2004B Bond Fund (the Bond Fund) of the
City, which Bond Fund the City agrees to maintain until the Bonds have been paid in full. If the
money in the Bond Fund should at any time be insufficient to pay principal and interest due on
the Bonds, such amounts shall be paid from other moneys on hand in other funds of the City,
which other funds shall be reimbursed therefor when sufficient money becomes available in the
Bond Fund. The moneys on hand in the Bond Fund from time to time shall be used only to pay
the principal of and interest on the Bonds. Into the Bond Fund shall be paid: (a) any amount
appropriated thereto pursuant to Section 3 hereof; (b) all interest earned on the investments held
in the escrow account established in Section 3 to and including the Crossover Date (other than
the sum of $9,820,000 received from maturing investments on the Crossover Date to be used to
retire the Refunded Bonds); (c) all amounts. on deposit in the Bond Fund maintained for the
payment of the Refunded Bonds upon the retirement of the Refunded Bonds; (d) all net revenues
of he Water System appropriated to the payment of the Bonds and interest thereon in accordance
with. Section 6 hereof; (e) any ad valorem taxes collected in accordance with the provisions of
Section 7 hereof; and (f) any other funds appropriated by the City Council for the payment of the
Bonds.
SECTION 5. SUFFICIENCY OF WATER SYSTEM REVENUES. It is hereby found,
determined and declared that the City owns and operates the Water System as a revenue-
producing utility and convenience and that the net operating revenues of the Water System, after
deducting from the gross receipts derived from charges for the service, use and availability of the
Water System the expenses of operation and maintenance thereof (excluding interest,
amortization and depreciation), will be sufficient, with any other funds actually appropriated by_
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the City, for the payment when due of the principal of and.. interest on the Bonds herein
authorized, and on any other bonds or other obligations of the City to which suck revenues are. or
may be pledged. The Bonds shall not be secured by a mortgage lien upon or security interest in
any part of the Water System.
SECTION 6. RATE COVENANT. Pursuant to Minnesota Statutes, Section 444.075, the City
hereby agrees with the registered owners from time to time of the Bonds, that until the Bonds
and. the interest thereon are paid in full, or are discharged as provided in Section 8, the City will
impose and collect reasonable charges for the service, use and availability of the Water System,
according to schedules which will produce net revenues sufficient, with any other funds
appropriated by the City, to pay all principal and interest when due on the Bonds and anyother
bonds or other obligations of the City to which. said net revenues have been or may be pledged;
and said net revenues, to the extent necessary, are hereby irrevocably pledged and appropriated
to the payment of the principal of and interest on the Bonds and shall be credited to the Bond.
Fund as required. Nothing herein shall preclude the City from hereafter making further pledges
and appropriations of the net revenues of the Water System for payment of additional bonds or
other obligations of the City hereafter authorized if the City Council determines before the
authorization of suck additional obligations that the estimated net revenues of the Water System
will be sufficient, with any other sources pledged to the payment of the Bonds, any other
outstanding obligations payable in whole or in part from said net revenues and the additional
obligations, :for payment of the Bonds, -any. such other outstanding obligations and such
additional obligations. Such further pledges and appropriations of said net revenues maybe
made superior or subordinate to, or on a parity with, the pledge. and appropriation of net revenues
herein made.
SECTION 7. PLEDGE DF TAXING POWERS. For the prompt and full payment of the
principal of and interest on the Bonds as such payments respectively become due, the City:
hereby irrevocably pledges its full faith, credit and unlimited taxing powers. However, the City
presently estimates that the payments to be received from the Water Board and appropriated to
the Bond Fund pursuant to Section 4 hereof, .together with interest earnings thereon, will be at
least five percent in excess of the amounts needed to meet when due the principal and interest
payments on the Bonds and therefore no ad valorem taxes are required to be levied at this time.
SECTION 8. DEFEASANCE. When all of the Bonds have been discharged as provided in this
section, all pledges, covenants and other rights granted by this resolution to the registered owners
of the Bonds shall cease. The City may discharge its obligations with respect to any Bonds
which are due on any date by depositing with the Registrar on or before that. date a sum. sufficient
for the payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless
be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full
with interest accrued from the due date to the date of such deposit. The City may also discharge
its obligations with respect to any prepayable Bonds called for redemption on any-date when
they are prepayable according to their terms, by depositing with the Registrar on or before that
date an amount equal to the principal, interest and redemption premium, if any, which are then
due, provided that notice of such redemption has been duly given as provided herein. The City
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• may also at any time discharge its obligations with respect to any Bonds, subject to the
provisions of law now or hereafter authorizing and regulating such action, by depositing
irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or
securities which are authorized by law to be so deposited, bearing interest payable at such time
and at such rates and maturing or callable at the holder's option. on such dates as shall be
required to pay a1I principal and interest to become due thereon to maturity or earlier designated
redemption date. Provided,. however, that. if such deposit is made more than ninety days before
the maturity date or specified redemption date of the Bonds to be discharged, the City shall have:
received a written opinion ofBond Counsel to the effect that such deposit does not adversely
affect the exemption of interest on any Bonds from federal income taxation and a written report
of an accountant or investment banking firm verifying that the deposit is sufficient to pay when
due all of the principal and interest on the Bonds to be discharged on and before their maturity
dates or earlier designated redemption date.
SECTION 9. CERTIFICATION OF PROCEEDINGS.
9.01. Registration of Bonds. The City Clerk is hereby authorized and. directed to file a
certified copy of this resolution with the County Treasurer-Auditor of Dakota County and obtain
a certificate that the Bonds have been duly entered upon the Treasurer-Auditor's bond register.
9.02. Authentication of Transcript. The officers of the City and the County Treasurer-
Auditor are hereby authorized. and directed to prepare and furnish to the Purchaser and to Dorsey
Whitney LLP, Bond Counsel, certified copies of all proceedings and records relating to the
Bonds and such other affidavits, certificates and information as maybe required to show. the
facts relating to the legality and marketability of the Bonds, as the same appear from the books
and records in their custody and control or as otherwise known to them, and all such certified.
copies, affidavits and certificates, including any heretofore furnished, shall be deemed
representations of the City as to the correctness of all statements contained therein.
9.03. Official Statement. The Official Statement relating to the Bonds, dated October
2004, and the supplement thereto, relating to the Bonds prepared and distributed by
Springsted Incorporated is hereby approved. Springsted Incorporated, is hereby authorized on
behalf of the City to prepare and distribute to the Purchaser within seven business days from the
date hereof, a supplement to the Official Statement listing the offering price, the interest rates,
selling compensation, delivery date, the underwriters and such other information relating to the
Bonds required to be included in the Official Statement by Rule 15c2-12 adopted by the
Securities and Exchange Commission (the SEC) under the Securities Exchange Act of 1934.
The officers of the City are hereby authorized and directed to execute such: certificates as maybe
appropriate concerning the accuracy, completeness and sufficiency of the Official Statement.
SECTION 10. TAX COVENANTS• ARBITRAGE MATTERS• AND CONTINUING
DISCLOSURE.
10.01. General Tax Covenant. The City covenants and agrees with the registered owners
• of the Bonds that it will not take, or permit to be taken by any of its officers, employees or
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. agents, any actions that would cause interest. on the Bonds to become includable in gross income
of the recipient under the Internal Revenue Code of 1986, as amended (the Code) .and applicable
Treasury Regulations (the Regulations), and covenants to take. any and all .actions within its
powers to ensure that the interest on the Bonds will not become includable in gross income of the
recipient under the Code and the Regulations.. It is hereby certified that the proceeds of the
Refunded Bonds were used to finance improvements to the City's Water System. The Water
System is and will be owned and maintained by the City and available for use by members of the.
general public on a substantially equal basis. The City shall not enter into any lease,
management.contract, use agreement, capacity agreement or other agreement with any non-
governmentalperson relating to the use of the Water System, or anyportion,thereof, or security
for the payment of the Bonds which might cause the Bonds to be considered "private activity
bonds" or "private loanbonds" pursuant to Section 141 of the Code.
10.02. Arbitrage Certification. The Mayor and City Clerk being the. officers of the City
charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized
and directed to execute and deliver to the Purchaser a certificate in accordance with Section 148
of the Code, and applicable Regulations, stating the facts, estimates and circumstances in
existence on the date of issue and delivery of the Bonds which make it reasonable to expect that
the proceeds of the Bonds will not be used. in a manner that would cause the Bonds to be
"arbitrage bonds" within the meaning of the Code. and Regulations.
10.03. Arbitrage Rebate. The City acknowledges that the Bonds are subject to the rebate
• requirements of Section 148(f) of the Code. The City covenants and agrees to retain such
records, make such determinations, file such reports and documents and pay such amounts at
such times as are required under said Section 148(f) and applicable Regulations to preserve the
exclusion of interest on the Bonds from gross income fore federal income tax purposes, unless the
Bonds qualify for an exception from the rebate requirement pursuant to one of the spending
exceptions set forth in Section 1.148-7 of the Regulations and no "gross proceeds" of the Bonds
(other than amounts constituting a "bona fide debt service fund") arise during or after the
expenditure of the original proceeds thereof.
10.04. Not_Qualified Tax-Exempt Obligations. The Bonds .are not. "qualified tax-exempt
.obligations" for purposes: of Section 265(b)(3) of the Code relating to the disallowance of interest
expense for financial institutions.
10.05. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for
the public availability of certain information relating to the Certificates and the securtytherefor
and to permit the Purchaser and other participating underwriters in the primary offering of the
Certificates to comply with amendments to Rule 15c2-12 promulgated by the SEC under the
Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to continuing disclosure (as
in effect and interpreted from time to time, the Rule), which will enhance the marketability of the
Certificates, the City hereby makes the following covenants and agreements for the benefit of the
Owners (as hereinafter defined) from time to time of the Outstanding Certificates. The City is
the only obligated person. in respect of the Certificates within the meaning of the Rule for
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purposes of identifying the entities in respect of which continuing disclosure must be made. The
City has complied in all material respects with any undertaking previouslyentered into by it
under the Rule. If the City fails to comply with any provisions of this section, any person
aggrieved thereby, including the Owners of any Outstanding Certificates, may: take whatever
action at law or in equity may appear necessary or appropriate to enforce performance and
observance of any agreement or covenant contained in this section, including an action for a writ
of mandamus or specific performance. Direct, indirect, consequential .and punitive damages
shall not be recoverable for any default hereunder to the extent permitted by law.
Notwithstanding anything to the contrary contained herein, in no event shall a default under this
section constitute a default under the Certificates or under any other provision of this resolution.
As used in this section, Owner or Certificateowner means, in respect of a Certificate, the
registered owner or owners thereof appearing in the bond register maintained by the Registrar or
any Beneficial Owner (as hereinafter defined) thereof, if such Beneficial Owner provides. to the
Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to
the Registrar. As used herein, Beneficial Owner means, in respect of a Certificate, any person or
entity which (i) has the power, directly or indirectly, to vote or consent with respect to, or to
dispose of ownership of, such Certificate (including persons or entities holding Certificates
through nominees, depositories or other intermediaries), or (b) is treated as the owner of the
Certificate for federal income tax purposes.
(b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection
(c) hereof, either directly or indirectly through an agent designated by the City, the following
• information at the following times:
(1) on or before 365 days after the end of each fiscal year of the City, commencing with
the fiscal year ending December 31, 2004, the following financial information and
operating data in respect of the City (the Disclosure Information):
(A) the audited financial statements of the City for such fiscal year, containing
balance sheets as of the end of such fiscal year and a statement of operations,
changes in fund balances and cash flows for the fiscal year then ended, showing.
in comparative form. such figures for the preceding fiscal year of the City,
prepared in accordance with generally accepted accounting principles
promulgated by the Financial Accounting Standards Board as modified in
accordance with the governmental accounting standards promulgated by the
Governmental Accounting Standards Board or as otherwise provided under
Minnesota law, as in effect from time to time, or, if and to the extent such
financial statements have not been prepared in accordance with such generally.
accepted accounting principles for reasons beyond the reasonable control of the
City, noting the discrepancies therefrom and the effect thereof, and certified as
to accuracy and completeness. in all material respects by the-fiscal officer of the
City; and
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(B) to the extent not included in the financial statements referred to in paragraph (A)
hereof, the. information for such fiscal year or for the period most recently
available of the type contained in the Official Statement under headings: City
Property Values; City Indebtedness; and City Tax Rates, Levies and
Collections.
Notwithstanding the foregoing paragraph, if the audited financial statements are not available by
the date specified, the City shall provide on or before such date unaudited financial statements in
the format required for the audited financial statements as part of the Disclosure Information and,
within 10 days. after the receipt thereof, the City shall provide the audited financial statements.
Any or all of the Disclosure Information maybe incorporated by reference, if it is updated as
required hereby, from other documents, including official. statements, which have been submitted
to each of the repositories hereinafter. referred to under subsection (c) or the SEC. If the
document incorporated by reference is a final official statement, it must be available from the
Municipal Securities Rulemaking Board. The City shall clearly identify in the Disclosure
Information each document so incorporated by reference. If any part of the Disclosure
Information can no longer be generated because the operations of the City have materially
changed or been discontinued, such Disclosure Information need no longer be provided if the
City includes in the Disclosure Information a statement to such effect; provided, however, if such
operations .have been replaced by other City operations in respect of which data is not included in
the Disclosure Information and the City determines that certain specified data regarding such
replacement operations would be a Material Fact (as defined in paragraph (2) hereof), then, from
and after such determination, the Disclosure Information shall include such additional specified
data regarding the replacement operations. If the Disclosure Information is changed_or this
section is amended as permitted by this paragraph (b)(1) or subsection (d), then the Cityshall
include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an
explanation of the reasons. for the amendment. and the effect of any change in the type of
financial information or operating data provided.
(2) In a timely manner, notice of the occurrence of any of the following events which is
a Material Fact (as hereinafter defined):
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions. or events affecting the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the securities;
and
(K) .Rating changes.
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. As used herein, a Material Fact is a fact. as to which a substantial likelihood exists that a
reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a
Certificate or, if not disclosed, would significantly alter. the total information otherwise available
to an investor from the Official Statement, information disclosed hereunder or information
generally available to the public. Notwithstanding the foregoing sentence, a Material Fact is also
an event that would be deemed material for purposes of the purchase, holding or sale of a
Certificate within the meaning of applicable federal securities laws, as interpreted at the time of
discovery of the occurrence of the event.
(3) In a timely manner, notice of the occurrence of any of the following events or
conditions:
(A) the failure of the City to provide the Disclosure Information required under
paragraph (b)(1) at the time specified thereunder;
(B) the amendment or supplementing of this section pursuant to subsection (d),
together with. a copy of such amendment or supplement and any explanation
provided by the Cityunder subsection (d)(2);
(C) the termination of the obligations of the City under this section pursuant to
subsection (d);
(D) any change in the accounting principles pursuant to which the financial
statements constituting a portion of the Disclosure Information are prepared;.
and
(E) any change in the fiscal year of the City.
(c) .Manner of Disclosure. The. City. agrees to make available the information described in
subsection (b) to the following entities by telecopy, overnight delivery, mail or other means, as
appropriate:
(1) .the information described in paragraph (1) of subsection (b), to each then nationally
recognized municipal securities information repository under the Rule and to any
state information depository then designated or operated by the State of Minnesota
as contemplated by the Rule (the State Depository), if any;
(2) the information described in paragraphs (2) and (3) of subsection (b), to the
Municipal Securities Rulemaking Board and to the State Depository, if any; and
(3) the information described in subsection (b), to any rating agency then maintaining a
rating of the Certificates at the request of the City and, at the expense of such
Certificateowner, to any Certificateowner who requests in writing such information,
at the time of transmission under paragraphs (1) or (2) of this subsection (c), as the
case maybe, or, if such information is transmitted with a subsequent time of release,
at the time such information is to be released.
(d) Term; Amendments; Interpretation.
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( ,
(1) The covenants of the City in this section shall remain in effect so long as any
Certificates are Outstanding. Notwithstanding the preceding sentence, however, the
obligations of the City under this section shall terminate and be without further
effect as of any date on which the City delivers to the Registrar an opinion of Bond
Counsel to the effect that, because of legislative action or final judicial or
.administrative actions or proceedings, the failure of the City to comply with the
requirements of this section will not cause participating underwriters in the primary
offering of the Certificates to be in violation of the Rule or other applicable
requirements of the Securities Exchange Act of 1934, as amended; or any statutes. or
laws successory thereto or amendatory thereof.
(2) This section (and the form and requirements of the Disclosure Information) maybe
amended or supplemented by the City from time to time, without notice to (except as
provided in paragraph (c)(3) hereof) or the consent of the Owners of any
Certificates, by a resolution of this Council filed in the office of the recording. officer
of the City accompanied by an opinion of Bond Counsel, who may rely on
certificates of the City and others and the opinion maybe subject to customary
qualifications, to the effect that: (i) such amendment or supplement (a) is made in
.connection with a change in circumstances that. arises from a change in law or
regulation or a change in the identity, nature or status of the City or the type of
operations conducted by the City, or (b) is required by, or better complies with, the
provisions of paragraph (b)(5) of the Rule; (ii) this section as so amended or
• supplemented would have complied with the requirements of paragraph (b)(5) of the
Rule at the time of the primary offering of the Certificates, giving effect to .any
change in circumstances. applicable under clause (i)(a) and assuming .that the Rule as
in effect and interpreted at the time of the amendment or supplement was in effect at
the time of the primary offering; and (iii) such amendment or supplement does not
materially impair the. interests of the Certificateowners under the Rule.
If the Disclosure Information is so amended, the City agrees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the
reasons for the amendment and the effect, if any, of the change in the type of
financial information or operating data being provided hereunder.
(3) This section is entered into to comply with the continuing disclosure provisions of
the Rule and should be construed so as to satisfy the requirements of paragraph
(b)(5) of the Rule.
SECTION 11. REDEMPTION OF REFUNDED BONDS. The Clerk is hereby directed to
advise U.S. Bank National Association, St. Paul, Minnesota, successor to First Trust National
Association, St. Paul, Minnesota, as paying agent for the Refunded Bonds, to call the Refunded
Bonds for redemption and prepayment at their earliest permissible redemption date (February 1,
2006) and to give notice of redemption in accordance with the resolution authorizing issuance of
the Refunded Bonds..
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• APPROVED AND ADOPTED this 18th day of October, 2004.
CITY OF LAKEVILLE,
By:
Robert D. John ,Mayor
TTEST:
Charlene Friedges, City rk
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