HomeMy Public PortalAbout2007-072 Resolution Awarding Sale of General Obligation Water Revenue BondsMember Smith introduced the following resolution and moved its adoption:
RESOLUTION NO.2007-72
A RESOLUTION AWARDING THE SALE OF $4,395,000
GENERAL OBLIGATION WATER REVENUE BONDS, SERIES
2007A; 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. It is determined that:
(a) the City engineer has recommended the construction of various improvements to the
City's water system, including improvements to a well, a well pumping station, and the raw water supply
line, construction of a well and a water reservoir, and land acquisition necessary for such improvements
(the "Project").
(b) the City is authorized by Minnesota Statutes, Section 444.075 (the "Act") to finance all or
a portion of the cost of the Project (the "Project Costs") by the issuance of general obligation bonds of the
City payable from the net revenues of the water system. The Project Costs are presently estimated by the
engineer to be as follows:
Project Designation & Description: Total Project Cost
Deposit to Project Construction Fund
Costs of Issuance
Underwriter's Compensation
$4,328,893.00
36,660.50
30,006.70
Total $4,395,560 20
* Includes par amount of $4,395,000.00, plus original issue premium of $560.20.
(c) it is necessary and expedient to the sound financial management of the affairs of the City
to issue its General Obligation Water Revenue Bonds, Series 2007A, in the original aggregate principal
amount of $4,395,000 (the "Bonds"), pursuant to the Act to provide financing for the Project.
1.02. The proposal of UMB Bank, N.A., Kansas City, Missouri (the "Purchaser"), to purchase
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 $4,365,553.50
(par amount of $4,395,000.00, plus original issue premium of $560.20, less underwriter's discount of
$30,006.70), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows:
Year
(February 1)
Interest Rate
Year
(February 1)
Interest Rate
2009 3.250% 2016 3.600%
2010 3.250 2017 3.700
2011 3.300 2018 3.750
2012 3.300 2019 3.800
2013 3.400 2020 3.850
2014 3.450 2021 3.900
2015 3.550 2023* 4.000
* Term Bond
True interest cost: 3.8545007%
1.03. The sum of $23,293.50, being the amount proposed by the Purchaser in excess of
$4,342,260.00, shall be credited to the Debt Service Fund hereinafter created or deposited in the
Construction Fund hereinafter created, as determined by the City's Finance Director in consultation with
the City's financial advisor. 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. The Mayor and City Administrator are directed to execute a contract with the
Purchaser on behalf of the City.
1.04. The City will forthwith issue and sell the Bonds pursuant to the Act, in the total principal
amount of $4,395,000, originally dated December 20, 2007, 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 $205,000 2016 $290,000
2010 230,000 2017 300,000
2011 240,000 2018 310,000
2012 250,000 2019 325,000
2013 260,000 2020 340,000
2014 270,000 2021 350,000
2015 280,000 2023* 745,000
* Term Bond
1.05. Optional Redemption. The City may elect on February 1, 2015, and on any day
thereafter to prepay Bonds due on or after February 1, 2016. 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.
1.06. Term Bonds; Mandatory Redemption. The Bonds maturing on February 1, 2023, shall
hereinafter be referred to collectively as the "Term Bonds." The principal amounts of the Term Bonds
Resolution No. 2007-72
December 4, 2007
2
subject to mandatory sinking fund redemption on any date may be reduced through earlier optional
redemptions, with any partial redemptions of the Term Bonds credited against future mandatory sinking fund
redemptions of such Term Bonds in such order as the City shall determine. The Term Bonds are subject to
mandatory sinking fund redemption and shall be redeemed in part at par plus accrued interest on February 1
of the following years and in the principal amounts as follows:
Bonds Maturing February 1, 2023
Year Amount Year Amount
2022 $365,000 2023* $380,000
* Maturity
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 August 1, 2008, 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.
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
Resolution No. 2007-72
December 4, 2007
3
principal amount and maturity as requested by the registered owner or the owner's attorney in
writing.
(d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly
cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar
for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the
endorsement on the Bond or separate instrument of transfer is valid and genuine and that the
requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in
good faith, to make transfers which it, in its judgment, deems improper or unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person in
whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether
the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the
principal of and interest on the Bond and for all other purposes, and payments so made to a
registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the
liability upon the Bond to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner
thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee
or other governmental charge required to be paid with respect to the transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is
destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity
date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in
lieu of and in substitution for 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
registered owners, 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
Resolution No. 2007-72
December 4, 2007
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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 Mayor and the City
Administrator, provided that those signatures may be printed, engraved or lithographed facsimiles of the
originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to
be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and
sufficient for all purposes, the same as if the officer had remained in office until delivery.
Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any
security or benefit under this Resolution unless and until a certificate of authentication on the Bond has
been duly executed by the manual signature of an authorized representative of the Registrar. Certificates
of authentication on different Bonds need not be signed by the same representative. The executed
certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered
under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City
Administrator will deliver the same to the Purchaser upon payment of the purchase price in accordance
with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the
application of the purchase price.
2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one
or more typewritten temporary Bonds in substantially the form set forth in 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:
No. R-
(The remainder of this page is intentionally left blank.)
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF MEDINA
GENERAL OBLIGATION WATER REVENUE BOND, SERIES 2007A
Date of
Rate Maturity Original Issue
February 1, 20 December 20, 2007
Registered Owner: Cede & Co.
CUSIP
Resolution No. 2007-72
December 4, 2007
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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 August 1, 2008,
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, 2015, and on any day thereafter to prepay Bonds due on or
after February 1, 2016. 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 Bonds maturing on February 1, 2023, shall hereinafter be referred to collectively as the
"Term Bonds." The principal amounts of the Term Bonds subject to mandatory sinking fund redemption on
any date may be reduced through earlier optional redemptions, with any partial redemptions of the Term
Bonds credited against future mandatory sinking fund redemptions of such Term Bonds in such order as the
City shall determine. The Term Bonds are subject to mandatory sinking fund redemption and shall be
redeemed in part at par plus accrued interest on February 1, 2023.
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 $4,395,000 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 December 4, 2007 (the "Resolution"), for the
purpose of providing money to aid in financing various improvements to the water system of the City,
pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including
Minnesota Statutes, Section 444.075 and the principal hereof and interest hereon are payable primarily
from the net revenues of the water system of the City in a special debt service fund of the City, 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 ad valorem taxes on all taxable property in the City in the event
of any deficiency in net revenues pledged, which 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.
IT IS HEREBY CERTIFIED AND RECITED That in and by the Resolution, the City has
covenanted and agreed that it will continue to own and operate the water system free from competition by
other like municipal utilities; that adequate insurance on said system and suitable fidelity bonds on
employees will be carried; that proper and adequate books of account will be kept showing all receipts
Resolution No. 2007-72
December 4, 2007
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and disbursements relating to the Water Fund, into which it will pay all of the gross revenues from the
water system; that it will also create and maintain a General Obligation Water Revenue Bonds,
Series 2007A Debt Service Fund, into which it will pay, out of the net revenues from the water system a
sum sufficient to pay principal hereof and interest thereon when due; and that it will provide, by ad
valorem tax levies, for any deficiency in required net water system revenues.
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 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 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: December 20, 2007
T.M. Crosby, Jr., Mayor
ATTEST:
Chad M. Adams, City Administrator -Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member Weir and
upon vote being taken thereon, the following voted in favor thereof:
Resolution No. 2007-72
December 4, 2007
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Crosby, Smith, Weir, Cavanaugh
and the following voted against same: (Absent: Johnson)
None
Whereupon said resolution was declared duly passed and adopted.
Resolution No. 2007-72
December 4, 2007
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