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HomeMy Public PortalAbout2008-030 Resolution Awarding the Sale of General Obligation BondsRESOLUTION NO.2008-30 A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION BONDS, SERIES 2008A, PROPOSED TO BE ISSUED IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $2,280,000; 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, Minnesota (the "City"), as follows: Section 1. Sale of Bonds. 1.01. Improvement Bonds. It is determined that: (a) assessable public improvements known as the Hamel Road Reconstruction Improvement Project (the "Improvement Project") have been duly ordered by the City; (b) the City is authorized by Minnesota Statutes, Chapter 429 (the "Improvement Act"), to finance all or a portion of the cost of the Improvement Project by the issuance of general obligation bonds of the City payable from special assessments levied against benefited property and ad valorem taxes. The costs of the Improvement Project are presently estimated to be as follows: Project Designation & Description Total Project Cost Deposit to Project Construction Fund Deposit to Capitalized Interest Fund Underwriter's Discount Costs of Issuance $1,547,824.81 36,781.11 9,518.99 19,313.62 Total $1,613,438.53 1.02. Tax Increment Bonds. It is also 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 "TIF Project Costs") related to the undergrounding of electric power lines in the Uptown Hamel area of the TIF District (the "TIF Project"), as identified in the Modification to the Development Program for Development Resolution No. 2008-30 2 May 20, 2008 District No. 1 and the Tax Increment Financing Plan for Tax Increment Financing District No. 1-9 (the "TIF Plan"); (d) the following TIF Project Costs to be financed by the Bonds (as herein defined) are authorized by the TIF Plan: Public Improvements Redevelopment Cost Deposit to Construction Fund Deposit to Capitalized Interest Fund Underwriter's Discount Costs of Issuance $671,609.29 15,998.89 4,130.26 8,381.38 Total $700,119.82 1.03. Issuance of Bonds. The City has determined that it is necessary and expedient to the sound financial management of the affairs of the City to issue general obligation improvement bonds (the "Improvement Bonds") and general obligation tax increment bonds (the "TIF Bonds") as one issue of bonds entitled the General Obligation Bonds, Series 2008A (the "Bonds"), in the original aggregate principal amount of $2,280,000, to provide financing for the Improvement Project and the TIF Project. 1.04. Award to the Purchaser. The proposal of Wells Fargo Brokerage Services, LLC, Minneapolis, Minnesota (the "Purchaser"), to purchase the Bonds 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 $2,299,909.10 (par amount of $2,280,000, plus original issue premium of $33,558.35, less underwriter's discount of $13,649.25), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2010 3.000% 2017 3.750% 2011 3.000 2018 4.000 2012 3.250 2019 4.000 2013 3.250 2020 4.000 2014 3.500 2022* 4.000 2015 3.500 2024* 4.000 2016 3.750 * Term Bonds True interest cost: 3.7410483% 1.05. Purchase Contract. The sum of $49,549.10, being the amount proposed by the Purchaser in excess of $2,250,360, shall be credited to the Debt Service Fund hereinafter created or deposited in the Improvement Project Construction Fund and the TIF Project Construction Fund on a pro rata basis as described in Sections 4.01(d) and 4.01(e) hereof, as determined by the City's Finance Director in consultation with the 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 Resolution No. 2008-30 3 May 20, 2008 unsuccessful proposers. The Mayor and City Administrator are directed to execute a contract with the Purchaser on behalf of the City. 1.06. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Improvement Act and the TIF Act, in the total principal amount of $2,280,000, originally dated June 17, 2008, 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 of Maturity Amount Year of Maturity Amount 2010 $115,000 2017 $150,000 2011 120,000 2018 155,000 2012 125,000 2019 160,000 2013 130,000 2020 165,000 2014 135,000 2022* 355,000 2015 140,000 2024* 385,000 2016 145,000 * Term Bonds $1,590,000 of the Bonds (the "Improvement Bonds") maturing in the amounts and on the dates set forth below are being issued to finance certain public improvement costs which are secured by special assessments against property benefited by such improvements (the "Assessments"): Year of Maturity Amount Year of Maturity Amount 2010 $80,000 2017 $105,000 2011 85,000 2018 110,000 2012 90,000 2019 110,000 2013 90,000 2020 115,000 2014 95,000 2022* 245,000 2015 100,000 2024* 265,000 2016 100,000 * Term Bonds (The remainder of this page is intentionally left blank.) Resolution No. 2008-30 4 May 20, 2008 The remaining $690,000 of the Bonds (the "TIF Bonds") maturing in the amounts and on the dates set forth below are being issued to finance the certain public improvement costs within the TIF District which are secured by tax increment revenues from the Uptown Hamel area of the TIF District (the "Tax Increment Revenues"): Year of Year of Maturity Amount Maturity Amount 2010 $35,000 2017 $ 45,000 2011 35,000 2018 45,000 2012 35,000 2019 50,000 2013 40,000 2020 50,000 2014 40,000 2022* 110,000 2015 40,000 2024* 120,000 2016 45,000 * Term Bonds 1.07. Optional Redemption. The City may elect on February 1, 2017, and on any date thereafter to prepay Bonds due on or after February 1, 2018. 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. 1.08. Term Bonds; Mandatory Redemption. The Bonds maturing on February 1, 2022, and February 1, 2024, 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 of the following years and in the principal amounts as follows: Bonds Maturing February 1, 2022 Year Amount Year Amount 2021 $175,000 2022* $180,000 * Maturity Resolution No. 2008-30 5 May 20, 2008 Bonds Maturing February 1, 2024 Year Amount Year Amount 2023 $190,000 2024* $195,000 * 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 February 1, 2009, 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 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. Resolution No. 2008-30 6 May 20, 2008 (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 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 Resolution No. 2008-30 7 May 20, 2008 successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Administrator must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Administrator and executed on behalf of the City by the signatures of the Mayor and the City Administrator, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. 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. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the following form: No. R- Rate % UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF MEDINA GENERAL OBLIGATION BOND, SERIES 2007A Maturity Date of Original Issue February 1, 20 June , 2008 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 Resolution No. 2008-30 8 May 20, 2008 above, payable February 1 and August 1 in each year, commencing February 1, 2009, 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, 2017, and on any date thereafter to prepay Bonds due on or after February 1, 2018. 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, 2022, and February 1, 2024, 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 of the following years and in the principal amounts as follows: Bonds Maturing February 1, 2022 Year Amount Year Amount 2021 $175,000 2022* $180,000 * Maturity Bonds Maturing February 1, 2024 Year Amount Year Amount 2023 $190,000 2024* $195,000 * Maturity 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 $2,280,000 all of like original issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued Resolution No. 2008-30 9 May 20, 2008 pursuant to a resolution adopted by the City Council on May 20, 2008 (the "Resolution"), for the purpose of providing money to aid in financing the costs of certain local infrastructure improvements, including streets, water lines, sewer lines, and storm sewer utilities, and the public redevelopment costs of projects in the Uptown Hamel area of 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, Chapters 429, 469, and 475. The principal hereof and interest hereon are payable in part from special assessments against property specially benefited by local improvements, in part from tax increment revenues resulting from increases in assessed valuation of real property in the Uptown Hamel area of the TIF District, and in part from ad valorem taxes for the City's share of the cost of the 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 net revenues, and special assessments and taxes 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. 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, 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: June 17, 2008 Resolution No. 2008-30 10 May 20, 2008 CITY OF MEDIN , INNESOTA T. M. Crosby, Jr., Mator ATTEST: Chad M. Adams, City Administrator -Clerk 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 TEN ENT — as tenants by entireties JT TEN — as joint tenants with right UNIF GIFT MIN ACT — of survivorship and not as tenants in Custodian common (Cust) (Minor) under Uniform Gifts or Transfers to Minors Act (State) Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby 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. Resolution No. 2008-30 May 20, 2008 11 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 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 Resolution No. 2008-30 May 20, 2008 Signature of Registered Owner Officer of Registrar Cede & Co. Federal ID #13-2555119 [End of Form of Bond] 12 3.02. Approving Legal 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. (a) Debt Service Fund and Accounts Maintained in the Debt Service Fund. The Bonds are payable from the General Obligation Bonds, Series 2008A Debt Service Fund (the "Debt Service Fund") hereby created. The City will maintain an Improvement Project Account (the "Improvement Account") and a Tax Increment Project Account (the "TIF 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 the Assessments and taxes (the "Taxes") levied or to be levied for the Improvement Project described herein, which Assessments and Taxes are pledged to that account of the Debt Service Fund. There is also appropriated to the Improvement Account of the Debt Service Fund 69.7% 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 Improvement Bonds portion of the Bonds becomes due when there is not sufficient money in the Improvement 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 Assessments when received. (c) TIF Account. The City Administrator will timely deposit in the TIF Account the Tax Increment Revenues that are pledged to that account of the Debt Service Fund. There is also appropriated to the TIF Account of the Debt Service Fund 30.3% 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 TIF Bonds portion of the Bonds becomes due when there is not sufficient money in the TIF 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 when collected. (d) Improvement Project Construction Fund. Proceeds of the Bonds, less the appropriations made in paragraphs (b) and (c), multiplied by 69.7%, together with any other funds appropriated during the construction of the improvements financed by the Improvement Bonds portion of the Bonds (the "Improvement Project") will be deposited in an 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 complete 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) TIF Project Construction Fund. Proceeds of the Bonds, less the appropriations made in paragraphs (b) and (c), multiplied by 30.3%, together with any other funds appropriated during the construction of the improvements financed by the TIF Bonds portion of the Bonds (the "TIF Project") will Resolution No. 2008-30 May 20, 2008 13 be deposited in an separate construction fund (the "TIF Project Construction Fund") to be used solely to defray expenses of the TIF Project and the payment of principal and interest on the Bonds prior to the completion and payment of all costs of the TIF Project. When the TIF Project is complete and the cost thereof paid, the TIF Project Construction Fund is to be closed and any balance therein is to be deposited in the TIF Account of the Debt Service Fund. 4.02. Covenants Relating to Assessments. It is hereby determined that the Improvement Project 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 Improvement Project to be promptly levied so that the first installment will be collectible not later than 2009 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 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, 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 Improvement Project, 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. Pledge of Taxes. The principal of and interest on the Bonds will be paid in part from Assessments, Tax Increment Revenues, and Taxes. It is determined that at least 20% of the cost of the Improvement Project will be specially assessed against benefited properties and that 20% of the cost of the TIF Project will be derived from Tax Increment Revenues. For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Improvement Account of the Debt Service Fund in the years and amounts provided in Exhibit B. 4.04. Certification to Taxpayer Services Division Manager of Hennepin County as to Debt Service Fund Amount. It is hereby determined that the estimated collections of Assessments, Tax Increment Revenues, and the foregoing Taxes will produce at least five percent in excess of the amount needed to meet, when due, the principal and interest payments on the Bonds. The tax levy herein provided is irrepealable until all of the Bonds are paid, provided that at the time the City makes its annual tax levies the City Administrator may certify to the Taxpayer Services Division Manager of Hennepin County (the "Taxpayer Services Division Manager) the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible during such year by the amount so certified. Resolution No. 2008-30 May 20, 2008 14 4.05. Taxpayer Services Division Manager's Certificate as to Registration. The City Administrator is directed to file a certified copy of this Resolution with the Taxpayer Services Division Manager and obtain the certificate required by Minnesota Statutes, Section 475.63. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. 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. Certification as to 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. Payment of 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 advisor, Ehlers & Associates, Inc. Section 6. Tax Covenant. 6.01. Tax -Exempt Bonds. 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. Resolution No. 2008-30 May 20, 2008 15 6.02. No Rebate Required. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2008) exceed the small -issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. 6.03. Not Private Activity Bonds. 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: (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 2008 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Book -Entry System; Limited Obligation of City. 7.01. DTC. 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. Participants. 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 Resolution No. 2008-30 May 20, 2008 16 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 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. Resolution No. 2008-30 May 20, 2008 17 Section 8. Continuing Disclosure. 8.01. City Compliance with Provisions of Continuing Disclosure Certificate. 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 will not be considered an event of default with respect to the Bonds; however, any Bondholder may take 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. 8.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Administrator and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 9. Defeasance. When all Bonds (or all of either the Improvement Bonds or TIF Bonds portion thereof) have been discharged as provided in this section, all pledges, covenants, and other rights granted by this resolution (with respect to the Improvement Bonds portion or the TIF Bonds portion of the Bonds, as the case may be) to 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 (or all of either the Improvement Bonds portion or the TIF Bonds portion thereof) which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page is intentionally left blank.) Resolution No. 2008-30 18 May 20, 2008 The motion for the adoption of the foregoing resolution was duly seconded by member Weir upon vote being taken thereon, the following voted in favor thereof: Crosby, Smith, Weir, Johnson and the following voted against same: (Abstained: Cavanaugh) None Whereupon said resolution was declared duly passed and adopted. Resolution No. 2008-30 May 20, 2008 19 STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF MEDINA ) SS. • I, the undersigned, being the duly qualified City Administrator of the City of Medina, Minnesota (the "City"), 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 May 20, 2008, 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 the City's General Obligation Bonds, Series 2008A, in the original aggregate principal amount of $2,280,000. WITNESS My hand officially as such City Administrator and the corporate seal of the City this 27 day of May, 2008. (SEAL) Resolution No. 2008-30 May 20, 2008 20 Chad M. Adams, City Administrator Medina, Minnesota STATE OF MINNESOTA COUNTY OF HENNEPIN CERTIFICATE OF TAXPAYER SERVICES DIVISION MANAGER AS TO TAX LEVY AND REGISTRATION 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 (the "City"), on May 20, 2008, levying taxes for the payment of the City's General Obligation Improvement Bonds, Series 2008A, in the original aggregate principal amount of $2,280,000, dated as of June 17, 2008, has been filed in my office and said obligations have been registered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this day of , 2008. Taxpayer Services Division Manager Hennepin County, Minnesota (SEAL) Deputy Resolution No. 2008-30 1 May 20, 2008 EXIIIBIT A TERMS OF PROPOSAL Resolution No. 2008-30 May 20, 2008 A-1 EXHIBIT B IMPROVEMENT PROJECT TAX LEVY SCHEDULE YEAR * TAX LEVY *Year tax levy collected. ME230-466 (JAE) 332199v2 Resolution No. 2008-30 May 20, 2008 2009 $89,026.75 2010 91,756.75 2011 94,329.25 2012 91,258.00 2013 93,436.75 2014 95,195.50 2015 91,520.50 2016 92,833.00 2017 93,948.63 2018 89,328.63 2019 89,958.63 2020 90,378.63 2021 90,588.63 2022 90,588.63 2023 90,378.63 B-1