HomeMy Public PortalAbout2005-056 Resolution Awarding the Sale of General Obligation Tax Increment BondsMember Smith introduced the following resolution and moved its adoption.
CITY OF MEDINA
RESOLUTION NO.2005-56
RESOLUTION AWARDING THE SALE OF $1,040,000 GENERAL
OBLIGATION TAX INCREMENT BONDS, SERIES 2005C;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council of the City of Medina, Hennepin County,
Minnesota (the "City") as follows:
Section 1. Sale of Bonds.
1.01 Findings. It is hereby determined that:
(a) the City has duly established Development District No. 1 (the "Project
Area") pursuant to Minnesota Statutes, Sections 469.174 through 469.1799, as amended
(the "TIF Act");
(b) the City has duly established Tax Increment Financing District No. 1-9
(the "TIF District") within the Project Area pursuant to the TIF Act;
(c) the City is authorized by Section 469.178 of the TIF Act to issue and sell
its general obligations to pay all or a portion of the public redevelopment costs
(the "Project Costs") related to the TIF District, as identified in the Modification to the
Development Program for Development District No. 1 and the Tax Increment Financing
Plan for Tax Increment Financing District No. 1-9 (the "TIF Plan");
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Resolution No. 2005-56
September 20, 2005
(d) the following Project Costs to be financed by the Bonds (as herein
defined) are authorized by the TIF Plan:
Public Improvements Redevelopment Cost
Sioux Drive, Mi11 Drive, and Hamel Road Improvements
Deposit to Construction Fund
Deposit to Capitalized Interest Funds
Underwriter's Discount
Costs of Issuance
$ 960,203.50
48,041.50
9,990.00
21,765.00
Total $1,040,000.00
(e) it is necessary and expedient to the sound financial management of the
affairs of the City to issue $1,040,000 General Obligation Tax Increment Bonds, Series
2005 (the "Bonds") pursuant to the Act to provide financing for the Costs.
1.02. Acceptance of Offer. The proposal of Miller Johnson Steichen Kinnard Investment
Securities, Inc., Minneapolis, Minnesota (the "Purchaser) to purchase $1,040,000 General
Obligation Tax Increment Bonds, Series 2005C (the "Bonds") of the City described in the Terms of
Proposal thereof is found and determined to be a reasonable offer and is accepted, the proposal
being to purchase the Bonds at a price of $1,030,010.00, plus accrued interest to date of delivery,
for Bonds bearing interest as follows:
Year Interest Rate Year Interest Rate
2009 * 3.00% 2016 3.65%
2012 * 3.25 2017 3.70
2013 3.50 2019 * 3.75
2014 3.50 2021 * 3.95
2015 3.65
* Term Bonds
True interest cost: 3.7913043%
1.02. Purchase Contract. The sum of $3,530.00, being the amount proposed by the
Purchaser in excess of $1,026,480.00, will be credited to the Construction Fund hereinafter created.
The City Administrator is directed to retain 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.
Resolution No. 2005-56 2
September 20, 2005
1.03. Issuance of Bonds. The City will forthwith issue and sell the Bonds pursuant to the
TIF Act and Minnesota Statutes, Chapter 475 (collectively with the TIF Act, the "Act"), in the total
principal amount of $1,040,000, originally dated October 13, 2005, in the denomination of $5,000
each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set
forth, and maturing serially on February 1 in the years and amounts as follows:
Year Amount Year Amount
2009 * $120,000 2016 $ 75,000
2012 * 195,000 2017 80,000
2013 70,000 2019 * 170,000
2014 70,000 2021 * 185,000
2015 75,000
* Term Bonds
$985,000 in principal amount of the Bonds (the "Improvement Project Bonds") maturing in the
amounts and on the dates set forth below are being issued to finance certain public improvement
costs within the TIF District which are secured by special assessments against property benefited by
such improvements (the "Assessments") and tax increment revenues from the Hamel Uptown area
of the TIF District (the "Tax Increment Revenues"):
Year Amount Year Amount
2009 * $ 65,000 2016 $ 75,000
2012 * 195,000 2017 80,000
2013 70,000 2019 * 170,000
2014 70,000 2021 * 185,000
2015 75,000
* Term Bonds
The remaining $55,000 in principal amount of the Bonds (the "Underground Electrical Project
Bonds") maturing in the amounts and on the dates set forth below are being issued to finance
I I Iiii certain public improvement costs within the TIF District which are secured by Tax Increment
Revenues:
* Term Bonds
Year Amount
2009 * $55,000
Resolution No. 2005-56 3
��� September 20, 2005
1.04. Optional Redemption. The City may elect on February 1, 2013, and on any day
thereafter to prepay Bonds due on or after February 1, 2014. Redemption may be in whole or in
part and if in part, at the option of the City and in such manner as the City will determine. If less
than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in
Section 7 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by
lot the amount of each participant's interest in such maturity to be redeemed and each participant
will then select by lot the beneficial ownership interests in such maturity to be redeemed.
Prepayments will be at a price of par plus accrued interest.
1.05. Mandatory Redemption. The Term Bonds are subject to mandatory sinking fund
redemption and shall be redeemed in part by lot at par plus accrued interest on the sinking fund
installment dates and in the principal amounts as follows:
Principal
Sinking Fund Installment Date Amount
February 1, 2009 Term Bonds
2008
2009 *
February 1, 2012 Term Bonds
2010
2011
2012 *
* Maturity
$60,000
60,000
$65,000
65,000
65,000
Principal
Sinking Fund Installment Date Amount
February 1, 2019 Term Bonds
2018
2019 *
February 1, 2021 Term Bonds
2020
2021 *
$85,000
85,000
$90,000
95,000
The specific Term Bonds to be redeemed will be selected by lot by the Registrar. All prepayments
will be at a price of par plus accrued interest.
Section 2. Registration and Payment.
2.01. Registered Form. The Bonds will be issued only in fully registered form. The
interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by
check or draft issued by the Registrar described herein.
2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest
payment date preceding the date of authentication to which interest on the Bond has been paid or
made available for payment, unless (i) the date of authentication is an interest payment date to
which interest has been paid or made available for payment, in which case the Bond will be dated
as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment
date, in which case the Bond will be dated as of the date of original issue. The interest on the
Bonds will be payable on February 1 and August 1 of each year, commencing February 1, 2006, to
the registered owners of record thereof as of the close of business on the fifteenth day of the
immediately preceding month, whether or not that day is a business day.
Resolution No. 2005-56 4
September 20, 2005
2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating
agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the
City and the Registrar with respect thereto are as follows:
(a) Register. The Registrar must keep at its principal corporate trust office a bond
register in which the Registrar provides for the registration of ownership of Bonds and the
registration of transfers and exchanges of Bonds entitled to be registered, transferred or
exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney
duly authorized by the registered owner in writing, the Registrar will authenticate and
deliver, in the name of the designated transferee or transferees, one or more new Bonds of a
like aggregate principal amount and maturity, as requested by the transferor. The Registrar
may, however, close the books for registration of any transfer after the fifteenth day of the
month preceding each interest payment date and until that interest payment date.
(c) Exchange of Bonds. When Bonds are surrendered by the registered owner for
exchange the Registrar will authenticate and deliver one or more new Bonds of a like
aggregate principal amount and maturity as requested by the registered owner or the
owner's attorney in writing.
(d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly
cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for
transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the
endorsement on the Bond or separate instrument of transfer is valid and genuine and that the
requested transfer is legally authorized. The Registrar will incur no liability for the refusal,
in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person in whose
name a Bond is registered in the bond register as the absolute owner of the Bond, whether
the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the
principal of and interest on the Bond and for all other purposes, and payments so made to a
registered owner or upon the owner's order will be valid and effectual to satisfy and
discharge the liability upon the Bond to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner
thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax,
Resolution No. 2005-56 5
September 20, 2005
fee or other governmental charge required to be paid with respect to the transfer or
exchange.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is
destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number,
maturity date and tenor in exchange and substitution for and upon cancellation of the
mutilated Bond or in lieu of and in substitution for a 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 redemption, notice
thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a
copy of the redemption notice by first class mail (postage prepaid) to the registered owner
of each Bond to be redeemed at the address shown on the registration books kept by the
Registrar and by publishing the notice if required by law. Failure to give notice by
publication or by mail to any registered owner, or any defect therein, will not affect the
validity of the proceedings for the redemption of Bonds. Bonds so called for redemption
will cease to bear interest after the specified redemption date, provided that the funds for
the redemption are on deposit with the place of payment at that time.
2.04. Appointment of Initial Registrar. The City appoints Bond Trust Services
Corporation, Roseville, Minnesota, as the initial Registrar. The Mayor and the City Administrator
are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon
merger or consolidation of the Registrar with another corporation, if the resulting corporation is a
bank or trust company authorized by law to conduct such business, the resulting corporation is
authorized to act as successor Registrar. The City agrees to pay the reasonable and customary
charges of the Registrar for the services performed. The City reserves the right to remove the
Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event
the predecessor Registrar must deliver all cash and Bonds in its possession to the successor
Registrar and must deliver the bond register to the successor Registrar. On or before each principal
or interest due date, without further order of this 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
Resolution No. 2005-56 6
September 20, 2005
Mayor and the City Administrator, provided that all signatures may be printed, engraved or
lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose
signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that
signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the
officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be
valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless
and until a certificate of authentication on the Bond has been duly executed by the manual signature
of an authorized representative of the Registrar. Certificates of authentication on different Bonds
need not be signed by the same representative. The executed certificate of authentication on a Bond
is conclusive evidence that it has been authenticated and delivered under this Resolution. When the
Bonds have been so prepared, executed and authenticated, the City Administrator will deliver the
same to the Purchaser upon payment of the purchase price in accordance with the contract of sale
heretofore made and executed, and the Purchaser is not obligated to see to the application of the
purchase price.
2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds
one or more typewritten temporary Bonds in substantially the form set forth in 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 or typewritten in substantially the following form:
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Resolution No. 2005-56 7
September 20, 2005
No. R-
Rate
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF MEDINA
GENERAL OBLIGATION TAX INCREMENT BOND,
SERIES 2005C
Maturity
Date of
Original Issue
February 1, 20_ October 13, 2005
Registered Owner: Cede & Co.
CUSIP
$
The City of Medina, Minnesota, a duly organized and existing municipal corporation in
Hennepin County, Minnesota (the "City"), acknowledges itself to be indebted and for value
received hereby promises to pay to the Registered Owner specified above or registered assigns, the
principal sum of $ on the maturity date specified above, with interest thereon from the
date hereof at the annual rate specified above, payable February 1 and August 1 in each year,
commencing February 1, 2006, 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 Bond Trust Services
Corporation, Roseville, Minnesota, as Registrar, Paying Agent, Transfer Agent and Authenticating
Agent, 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.
The City may elect on February 1, 2013, and on any day thereafter to prepay Bonds due on
or after February 1, 2014. Redemption may be in whole or in part and if in part, at the option of the
City and in such manner as the City will determine. If less than all Bonds of a maturity are called
for redemption, the City will notify The Depository Trust Company ("DTC") of the particular
amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's
interest in such maturity to be redeemed and each participant will then select by lot the beneficial
ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus
accrued interest.
The Term Bonds are subject to mandatory sinking fund redemption and shall be redeemed
in part by lot at par plus accrued interest on the sinking fund installment dates and in the principal
amounts as follows:
Resolution No. 2005-56 8
September 20, 2005
Principal
Sinking Fund Installment Date Amount
February 1, 2009 Term Bonds
2008
2009 *
February 1, 2012 Term Bonds
2010
2011
2012 *
* Maturity
$60,000
60,000
$65,000
65,000
65,000
Principal
Sinking Fund Installment Date Amount
February 1, 2019 Term Bonds
2018
2019 *
February 1, 2021 Term Bonds
2020
2021 *
$85,000
85,000
$90,000
95,000
The specific Term Bonds to be redeemed will be selected by lot by the Registrar. All prepayments
will be at a price of par plus accrued interest.
The City Council has designated the issue of Bonds of which this Bond forms a part as
"qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended (the "Code") relating to disallowance of interest expense for financial
institutions and within the $10 million limit allowed by the Code for the calendar year of issue.
This Bond is one of an issue in the aggregate principal amount of $1,040,000 all of like
original issue date and tenor, except as to number, maturity date, redemption privilege, and interest
rate, all issued pursuant to a resolution adopted by the City Council on September 20, 2005
(the "Resolution"), for the purpose of providing money to aid in financing the public
redevelopment costs of projects (the "Projects") in Tax Increment Financing District No. 1-9
(the "TIF District") in the City, pursuant to and in full conformity with the Constitution and laws
of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1799, and
Chapter 475. The principal hereof and interest hereon are payable in part from tax increment
revenues resulting from increases in assessed valuation of real property in the Hamel Uptown
area of the TIF District and payable in part from special assessments against property specially
benefited by local improvements, 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 tax
increment revenues and special assessments pledged, which additional taxes may be levied without
limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in
denominations of $5,000 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 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
Resolution No. 2005-56 9
September 20, 2005
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 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 will be affected
by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all
acts, conditions and things required by [the home rule charter of the City and] 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 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.
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
Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Medina, Hennepin County, Minnesota, by its City
Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of
the Mayor and City Administrator and has caused this Bond to be dated as of the date set forth
below.
Dated: September 20, 2005
CITY OF MEDINi MINNESOTA
City Administrator Mayor
Resolution No. 2005-56
September 20, 2005
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10
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
BOND TRUST SERVICES
CORPORATION
By
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, will be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants
in common
UNIF GIFT MIN ACT Custodian
(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
not as tenants in common
Act
(State)
Additional abbreviations may also be used though not in the above list.
Resolution No. 2005-56
September 20, 2005
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11
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 any change
whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a financial institution that is a member of the Securities
Transfer Agent Medallion Program ("STEMP"), the Stock Exchange Medallion Program
("SEMP"), the New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other
such "signature guarantee program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of
1934, as amended.
The Registrar will not effect transfer of this 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
Resolution No. 2005-56
September 20, 2005
12
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Bond has been registered on the
books of the Registrar in the name of the person last noted below.
Date of Registration
Signature of
Registered Owner Officer of Registrar
Cede & Co.
Federal ID #13-2555119
[End of Form of Bond]
3.02. Bond Counsel Opinion. The City Administrator will obtain a copy of the proposed
approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which will be
complete except as to dating thereof and will cause the opinion to be printed on or accompany each
Bond.
Section 4. Payment; Security; Pledges and Covenants.
4.01. Debt Service Accounts. (a) The Bonds are payable from the General Obligation
Tax Increment Bonds, Series 2005C Debt Service Fund (the "Debt Service Fund") hereby created.
The City will maintain an "Improvements Project Account" (the "Improvement Account") and an
"Underground Electrical Project Account" (the "Underground Project Account") in the Debt
Service Fund. There is appropriated to the Debt Service Fund (i) capitalized interest funded from
Bond proceeds, if any, and (ii) the accrued interest paid by the Purchaser upon closing and
delivery of the Bonds, if any.
(b) Improvement Account. The City Administrator will timely deposit in the
Improvement Account Tax Increment Revenues and Assessments, which Tax Increment Revenues
and Assessments are pledged to that account of the Debt Service Fund. There is also appropriated
to the Improvement Account of the Debt Service Fund 94.7% of (i) capitalized interest financed by
the proceeds of the Bonds, if any, and (ii) the accrued interest paid by the Purchaser upon closing
and delivery of the Bonds, if any. If a payment of principal or interest on the Improvements
Project Bonds portion of the Bonds becomes due when there is not sufficient money in the
Improvements Account to pay the same, the City Administrator is directed to pay such principal
or interest from the general fund of the City, and the general fund will be reimbursed for those
advances out of the proceeds of Tax Increment Revenues and Assessments when collected.
(c) Underground Project Account. The City Administrator will timely deposit in the
Underground Project Account Tax Increment Revenues sufficient to pay principal and interest
Resolution No. 2005-56
September 20, 2005
13
due on the Bonds, which Tax Increment Revenues are pledged to that account of the Debt Service
Fund. There is also appropriated to the Underground Project Account of the Debt Service Fund
5.3% of (i) any amount over the minimum purchase price paid by the Purchaser, (ii) capitalized
interest financed by the proceeds of the Bonds, if any, and (iii) the accrued interest paid by the
Purchaser upon closing and delivery of the Bonds, if any. If any payment of principal or interest on
the Underground Electrical Project Bonds portion of the Bonds will become due when there is not
sufficient money in the Underground Project Account of the Debt Service Fund to pay the same, the
City Administrator is directed to pay such principal or interest from the general fund of the City,
and the general fund will be reimbursed for such advances out of the proceeds of Tax Increment
Revenues when received.
(d) Improvement Project Construction Fund. Proceeds of the Bonds, less the
appropriations made in paragraphs (b) and (c), multiplied by 94.7%, together with any other funds
appropriated during the construction of the improvements financed by the Improvement Project
Bonds portion of the Bonds (the "Improvement Project") will be deposited in a separate
construction fund (the "Improvement Project Construction Fund") to be used solely to defray
expenses of the Improvement Project and the payment of principal and interest on the Bonds prior
to the completion and payment of all costs of the Improvement Project. When the Improvement
Project is completed and the cost thereof paid, the Improvement Project Construction Fund is to be
closed and any balance therein is to be deposited in the Improvement Account of the Debt Service
Fund.
(e) Underground Electrical Project Construction Fund. Proceeds of the Bonds, less the
appropriations made in paragraphs (b) and (c), multiplied by 5.3%, together with any other funds
appropriated during the construction of the improvements financed by the Underground Electrical
Project Bonds portion of the Bonds (the "Underground Electrical Project") will be deposited in a
separate construction fund (the "Underground Electrical Project Construction Fund") to be used
solely to defray expenses of the Underground Electrical Project and the payment of principal and
interest on the Bonds prior to the completion and payment of all costs of the Underground
Electrical Project. When the Underground Electrical Project is completed and the cost thereof paid,
the Underground Electrical Project Construction Fund is to be closed and any balance therein is to
be deposited in the Underground Project Account of the Debt Service Fund.
4.02. Covenants relating to Assessments. It is hereby determined that the improvements,
to be assessed, as described in Section 1.03, will directly and indirectly benefit abutting property,
and the City hereby covenants with the holders from time to time of the Bonds as follows:
(a) The City has caused or will cause the Assessments for the improvements to
be promptly levied so that the first installment will be collectible not later than 2007 and
will take all steps necessary to assure prompt collection, and the levy of the Assessments is
hereby authorized. The City Council will cause to be taken with due diligence all further
actions that are required for the construction of each Improvement financed wholly or partly
from the proceeds of the Improvement Bonds portion of the Bonds, and will take all further
actions necessary for the final and valid levy of the Assessments and the appropriation of
Resolution No. 2005-56
September 20, 2005
14
any other funds needed to pay the Improvement Bonds portion of the Bonds and interest
thereon when due.
(b) In the event of any current or anticipated deficiency in Assessments and Tax
Increment Revenues, the City Council will levy ad valorem taxes in the amount of the
current or anticipated deficiency.
(c) The City will keep complete and accurate books and records showing:
receipts and disbursements in connection with the Assessable Improvements, Assessments
levied therefor and other funds appropriated for their payment, collections thereof and
disbursements therefrom, monies on hand and, the balance of unpaid Assessments.
(d) The City will cause its books and records to be audited at least annually and
will furnish copies of such audit reports to any interested person upon request.
4.03. Debt Coverage. It is determined that the estimated collection of Tax Increment
Revenues and Assessments for payment of principal and interest on 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 and that no tax levy is needed at this time.
4.04. Filing of Resolution. The City Administrator is directed to file a certified copy of
this Resolution with the Taxpayer Services Division Manager of Hennepin County and obtain the
certificate required by Minnesota Statutes, Section 475.63.
Section 5. Transcript, Certificates, and Costs of Issuance.
5.01. Transcript. The officers of the City are authorized and directed to prepare and
furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings
and records of the City relating to the Bonds and to the financial condition and affairs of the City,
and such other certificates, affidavits and transcripts as may be required to show the facts within
their knowledge or as shown by the books and records in their custody and under their control,
relating to the validity and marketability of the Bonds, and such instruments, including any
heretofore furnished, will be deemed representations of the City as to the facts stated therein.
5.02. Official Statement. The Mayor and City Administrator are authorized and directed
to certify that they have examined the Official Statement prepared and circulated in connection with
the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official
Statement is a complete and accurate representation of the facts and representations made therein as
of the date of the Official Statement.
5.03. Other Certificates. The Mayor and City Administrator are hereby authorized and
directed to furnish to the Purchaser at the closing such certificates as are required as a condition
of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or
the organization of the City or incumbency of its officers, at the closing the Mayor and the City
Resolution No. 2005-56
September 20, 2005
15
Administrator shall also execute and deliver to the Purchaser a suitable certificate as to absence
of material litigation, and the Mayor and City Administrator shall also execute and deliver a
certificate as to payment for and delivery of the Bonds.
5.04. Costs of Issuance. The City authorizes the Purchaser to forward the amount of
Bond proceeds allocable to the payment of issuance expenses (other than amounts payable to
Kennedy & Graven, Chartered as Bond Counsel) to U.S. Trust Company, Minneapolis,
Minnesota on the closing date for further distribution as directed by the City's financial adviser,
Ehlers & Associates, Inc.
Section 6. Tax Covenant.
6.01. General Tax Exemption Covenant. 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 1986, as amended (the "Code"), and the Treasury
Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or
cause its officers, employees or agents to take, all affirmative action within its power that may be
necessary to ensure that such interest will not become subject to taxation under the Code and
applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable
to the Bonds.
6.02. Arbitrage. No portion of the proceeds of the Bonds will be used directly or
indirectly to acquire higher yielding investments or to replace funds 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 (ii) in addition to
the above, in an amount not greater than the lesser of five percent (5%) of the proceeds of the
Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held
in the Debt Service 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 Section 148 of the Code, and
Treasury Regulations, Sections 1.148-1 to 1.148-10, may be invested without regard as to yield,
will not be invested at a yield in excess of the applicable yield restrictions imposed by the forgoing
arbitrage regulations on such investments after taking into account any applicable temporary
periods or minor portion made available under such arbitrage regulations.
6.03. Private Activity Bond Status. The City further covenants not to use the proceeds of
the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the
Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of
the Code.
6.04. Qualified Tax -Exempt Obligations. In order to qualify the Bonds as "qualified tax-
exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the
following factual statements and representations:
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September 20, 2005
16
(a) the Bonds are not "private activity bonds" as defined in Section 141 of the
Code;
(b) the City designates the Bonds as "qualified tax-exempt obligations" for
purposes of Section 265(b)(3) of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other than
private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the
City (and all subordinate entities of the City) during calendar year 2005 will not exceed
$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar
year 2005 have been designated for purposes of Section 265(b)(3) of the Code.
Section 7. Book -Entry System; Limited Obligation of City.
7.01. Book -Entry System. The Bonds will be initially issued in the form of a separate
single typewritten or printed fully registered Bond for each of the maturities set forth in Section
1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration
books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust
Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in
this section, all of the outstanding Bonds will be registered in the registration books kept by the
Registrar in the name of Cede & Co., as nominee of DTC.
7.02. Depository Trust Company. With respect to Bonds registered in the registration
books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar
and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and
other financial institutions from time to time for which DTC holds Bonds as securities depository
(the "Participants") or to any other person on behalf of which a Participant holds an interest in the
Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy
of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the
Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of
Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the
Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other
person, other than a registered owner of Bonds, of any amount with respect to principal of,
premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat
and consider the person in whose name each Bond is registered in the registration books kept by the
Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal,
premium and interest with respect to such Bond, for the purpose of registering transfers with respect
to such Bond, and for all other purposes. The Paying Agent will pay all principal of, premium, if
any, and interest on the Bonds only to or on the order of the respective registered owners, as shown
in the registration books kept by the Registrar, and all such payments will be valid and effectual to
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September 20, 2005
17
fully satisfy and discharge the City's obligations with respect to payment of principal of, premium,
if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a
registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a
certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City
Administrator of a written notice to the effect that DTC has determined to substitute a new nominee
in place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon
receipt of such a notice, the City Administrator will promptly deliver a copy of the same to the
Registrar and Paying Agent.
7.03. Representation Letter. The City has heretofore executed and delivered to DTC a
Blanket Issuer Letter of Representations (the "Representation Letter") which will govern
payment of principal of, premium, if any, and interest on the Bonds and notices with respect to
the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the
Bonds will agree to take all action necessary for all representations of the City in the
Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied
with at all times.
7.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the
City Council, determines that it is in the best interests of the persons having beneficial interests in
the Bonds that they be able to obtain Bond certificate, the City will notify DTC, whereupon DTC
will notify the Participants, of the availability through DTC of Bond certificates. In such event the
City will issue, transfer and exchange Bond certificates as requested by DTC and any other
registered owner in accordance with the provisions of this Resolution. DTC may determine to
discontinue providing its services with respect to the Bonds at any time by giving notice to the City
and discharging its responsibilities with respect thereto under applicable law. In such event, if no
successor securities depository is appointed, the City will issue and the Registrar will authenticate
Bond certificates in accordance with this resolution and the provisions hereof will apply to the
transfer, exchange and method of payment thereof.
7.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to
the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC,
payments with respect to principal of, premium, if any, and interest on the Bond and all notices with
respect to the Bond will be made and given, respectively in the manner provided in DTC's
Operational Arrangements, as set forth in the Representation Letter.
Section 8. Continuing Disclosure. A Continuing Disclosure Certificate, dated the
date of issuance of the Bonds (the "Continuing Disclosure Certificate), is hereby approved and
shall be executed by the Mayor and City Administrator in substantially the form on file with the
City, with such additions, deletions, and other changes as are approved by the City
Administrator. The City hereby covenants and agrees that it will comply with and carry out all of
the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of
this resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to
be considered an event of default with respect to the Bonds; however, any Bondholder may take
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September 20, 2005
18
such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the City to comply with its obligations under this section.
Section 9. Defeasance. When all Bonds and all interest thereon, have been discharged
as provided in this section, all pledges, covenants and other rights granted by this resolution to the
holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the
prompt and full payment of the principal of and interest on the Bonds will remain in full force and
effect. The City may discharge all Bonds which are due on any date by depositing with the
Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should
not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum
sufficient for the payment thereof in full with interest accrued to the date of such deposit.
Resolution No. 2005-56
September 20, 2005
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The motion for the adoption of the foregoing resolution was duly seconded by Member
Cavanaugh, and upon vote being taken thereon, the following voted in favor thereof:
Workman, Smith, Brinkman, Weir and Cavanaugh
and the following voted against the same:
None
whereupon said resolution was declared duly passed and adopted.
Resolution No. 2005-56
September 20, 2005
20
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) SS.
CITY OF MEDINA )
I, the undersigned, being the duly qualified and acting Administrator of the City of Medina,
Hennepin County, Minnesota, do hereby certify that I have carefully compared the attached and
foregoing extract of minutes of a regular meeting of the City Council of the City held on
September 20, 2005, 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 $1,040,000 General
Obligation Tax Increment Bonds, Series 2005C of the City.
WITNESS My hand officially as such City Administrator and the corporate seal of the City
this day of , 2005.
City Administrator
Medina, Minnesota
(SEAL)
Resolution No. 2005-56
September 20, 2005
STATE OF MINNESOTA
COUNTY OF HENNEPIN
TAXPAYER SERVICES DIVISION MANAGER'S
CERTIFICATE AS TO
REGISTRATION WHERE NO AD
VALOREM TAX LEVY
I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota,
hereby certify that a resolution adopted by the City Council of the City of Medina, Minnesota, on
September 20, 2005, relating to General Obligation Tax Increment Bonds, Series 2005, in the
amount of $1,040,000, dated October 13, 2005, has been filed in my office and said obligations
have been registered on the register of obligations in my office.
WITNESS My hand and official seal this day of , 2005.
Taxpayer Services Division Manager
Hennepin County, Minnesota
(SEAL)
Deputy
Resolution No. 2005-56
September 20, 2005