HomeMy Public PortalAbout2008-059 Resolution Awarding the Sale of General Obligation Equipment Cert.Member Smith then introduced the following resolution, and moved its adoption:
RESOLUTION NO.2008-59
A RESOLUTION AWARDING THE SALE OF $415,000
GENERAL OBLIGATION EQUIPMENT CERTIFICATES,
SERIES 2008B;
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 Certificates.
1.01 Authority to Issue Certificates. It is hereby determined that:
a) the City is authorized by Minnesota Statutes, Section 412.301 (the "Act')
to issue its general obligation equipment certificates (the "Certificates") on such terms
and in such manner as the City determines to finance the purchase of items of capital
equipment (the "Equipment'), subject to certain limitations contained in the Act;
(b) the City has or will purchase and acquire various items of Equipment,
which items and the estimated cost thereof, are listed on Exhibit B, attached hereto and
made a part hereof;
(c) as required by the Act,
(i) the expected useful life of each item of Equipment is or will be at
least as long as the term of the Certificates; and
(ii) the principal amount of the Certificates to be issued in the year
2008 will not exceed 0.25 percent of the market value of taxable property
in the City for the year 2008;
(d) it is necessary and expedient to the sound financial management of the
affairs of the City to issue $415,000 General Obligation Equipment Certificates,
Series 2008B (the "Bonds") pursuant to the Act to provide financing for the Equipment.
1.02. Sale Negotiation. The City is authorized by Minnesota Statutes, section 475.60,
subdivision 2(9) to negotiate the sale of the Bonds, it being determined that the City has retained
Resolution No. 2008-59
September 2, 2008
an independent financial adviser in connection with such sale. The actions of the City staff and
financial advisers in negotiating the sale of the Bonds are ratified and confirmed in all aspects.
1.03. Award to the Purchaser and Interest Rates. The proposal of United Bankers'
Bank, Bloomington, Minnesota (the "Purchaser"), to purchase the Certificates of the City
described in the Terms of Proposal thereof is determined to be a reasonable offer and is accepted,
the proposal being to purchase the Certificates at a price of $412,510.00 (par amount of
$415,000.00, less underwriter's discount of $2,490.00), plus accrued interest to date of delivery,
for Certificates bearing interest as follows:
Year Interest Rate Year Interest Rate
2009 2.250% 2011 3.000%
2010 2.750
True interest cost: 3.3143957%
1.04. Terms and Principal Amounts of the Certificates. The City will forthwith issue
and sell the Certificates pursuant to the Act in the total principal amount of $415,000, originally
dated September 25, 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 without option of prior payment in the years and amounts as follows:
Year Amount Year Amount
2009 $140,000 2011 $140,000
2010 135,000
Section 2. Registration and Payment.
2.01. Registered Form. The Certificates will be issued only in fully registered form.
The interest thereon and, upon surrender of each Certificate, the principal amount thereof, is
payable by check or draft issued by the Registrar described herein.
2.02. Dates; Interest Payment Dates. Each Certificate will be dated as of the last
interest payment date preceding the date of authentication to which interest on the Certificate 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
Certificate 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 Certificate will be dated as of the date of
original issue. The interest on the Certificates is payable on February 1 and August 1 of each
year, commencing February 1, 2009, to the registered owners of record as of the close of
business on the fifteenth day of the immediately preceding month, whether or not that day is a
business day.
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September 2, 2008
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2.03. Registration. The City appoints the City Finance Director as bond registrar (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 will keep a certificate register in which the
Registrar provides for the registration of ownership of Certificates and the registration of
transfers and exchanges of Certificates entitled to be registered, transferred or exchanged.
(b) Transfer of Certificates. Upon surrender for transfer of a Certificate 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 Certificates 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 Certificates. When Certificates are surrendered by the
registered owner for exchange the Registrar will authenticate and deliver one or more
new Certificates of a like aggregate principal amount and maturity, as requested by the
registered owner or the owner's attorney in writing.
(d) Cancellation. Certificates surrendered upon any transfer or exchange will
be promptly cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Certificate is presented to the
Registrar for transfer, the Registrar may refuse to transfer the Certificate until the
Registrar is satisfied that the endorsement on the Certificate 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 the Certificate is registered in the certificate register as the absolute owner
of the Certificate, whether the Certificate is overdue or not, for the purpose of receiving
payment of, or on account of, the principal of and interest on the Certificate 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 Certificate 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 Certificates sufficient to reimburse the
Registrar for any tax, fee or other governmental charge required to be paid with respect to
the transfer or exchange.
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September 2, 2008
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(h) Mutilated, Lost, Stolen or Destroyed Certificates. If the Certificate
becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new
Certificate of like amount, number, maturity date and tenor in exchange and substitution
for and upon cancellation of the mutilated Certificate or in lieu of and in substitution for
any Certificate 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 Certificate
destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that
the Certificate was destroyed, stolen or lost, and of the ownership thereof, and upon
furnishing to the Registrar an appropriate certificate 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. Certificates 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 Certificate has already matured or been called for
redemption in accordance with its terms it is not necessary to issue a new Certificate prior
to payment.
2.04. Execution and Delivery. The Certificates 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 Certificates ceases to be such officer before the delivery of any Certificate, 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 Certificate 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 Certificate has been duly
executed by the manual signature of an authorized representative of the Registrar. Certificates of
authentication on different Certificates need not be signed by the same representative. The
executed certificate of authentication on a Certificate is conclusive evidence that it has been
authenticated and delivered under this Resolution. When the Certificates have been so prepared
and executed, 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.
2.05. Temporary Certificates. The City may elect to deliver in lieu of printed definitive
Certificates one or more typewritten temporary Certificates 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 certificate. Upon the execution and delivery of the definitive Certificates the
temporary Certificates will be exchanged therefor and cancelled.
Section 3. Form of Certificate.
3.01. Execution of the Certificates. The Certificates will be printed or typewritten in
substantially the following form:
Resolution No. 2008-59
September 2, 2008
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No. R- UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF MEDINA
GENERAL OBLIGATION EQUIPMENT CERTIFICATE,
SERIES 2008B
Date of
Rate Maturity Original Issue
February 1, 20 September 25, 2008
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 or registered
assigns, the principal sum of $ on the maturity date specified above without option
of prior payment, 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, 2009, to the person in
whose name this Certificate 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 the Finance Director of the City of Medina, Minnesota, as
Certificate Registrar, Paying Agent, and Transfer 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 Council has designated the issue of Certificates of which this Certificate 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.
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September 2, 2008
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This Certificate is one of an issue in the aggregate principal amount of $415,000 all of
like original issue date and tenor, except as to number, maturity date, and interest rate, all issued
pursuant to a resolution adopted by the City Council on September 2, 2008 (the "Resolution"),
for the purpose of providing money to defray expenses incurred or to be incurred in purchasing
various items of capital equipment, pursuant to and in full conformity with the Constitution and
laws of the State of Minnesota, including Minnesota Statutes, Section 412.301, and the principal
hereof and interest hereon are payable primarily from ad valorem taxes, as set forth in the
Resolution to which reference is made for a full statement of rights and powers thereby
conferred. The full faith and credit of the City are irrevocably pledged for payment of this
Certificate 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, which taxes may be levied without
limitation as to rate or amount. The Certificates of this series are issued only as fully registered
Certificates 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
Certificate is transferable upon the books of the City at the principal office of the Certificate
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
Certificate Registrar, duly executed by the registered owner or the owner's attorney; and may
also be surrendered in exchange for Certificates of other authorized denominations. Upon such
transfer or exchange the City will cause a new Certificate or Certificates 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 Certificate Registrar may deem and treat the person in whose name this
Certificate is registered as the absolute owner hereof, whether this Certificate is overdue or not,
for the purpose of receiving payment and for all other purposes, and neither the City nor the
Certificate 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 Certificate 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 Certificate does not cause the indebtedness of the City to exceed any
constitutional or statutory limitation of indebtedness.
This Certificate 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 Certificate 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 Certificate to be executed on its behalf by the facsimile or manual
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September 2, 2008
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signatures of the Mayor and City Administrator and has caused this Certificate to be dated as of
the date set forth below.
Date: September 2, 2008
T.M. Crosby, Jr., Mayor
ATTEST:
Chad M. Adams, City Administrator -Clerk
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Certificate 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 Finance Director
Federal ID #
3.02. Approving Legal Opinion. The City Administrator is authorized and directed to
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 to cause the
opinion to be printed on or accompany on each Certificate.
Section 4. Payment; Security; Pledges and Covenants.
4.01. Debt Service Fund. The Certificates are payable from the General Obligation
Equipment Certificates, Series 2008B Debt Service Fund (the "Debt Service Fund") hereby
created, and the proceeds of the ad valorem taxes hereinafter levied and described in Section
4.02 are pledged to the Debt Service Fund. If a payment of principal or interest on the
Certificates becomes due when there is not sufficient money in the Debt Service Fund to pay the
same, the City Finance Director will pay such principal or interest from the general fund of the
City, and the general fund may be reimbursed for those advances out of the proceeds of the taxes
levied by this resolution, when collected. There is hereby appropriated to the Debt Service Fund
(i) capitalized interest financed from Certificate proceeds, if any, (ii) any amount over the
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minimum purchase price of the Certificates paid by the Purchaser, and (iii) the accrued interest
paid by the Purchaser upon closing and delivery of the Certificates.
4.02. Pledge of Taxes. For the purpose of paying the principal of and interest on the
Certificates, 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. Such tax will be credited to the Debt Service Fund above
provided and will be in the years and amounts provided in Exhibit C.
4.03. Certification to Taxpayer Services Division Manager as to Debt Service Fund
Amount. It is determined that the estimated collection of 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 Certificates. The tax levy herein provided is irrepealable until all of the
Certificates 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
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.
4.04. Taxpayer Services Division Manager Certificate as to Registration. The City
Administrator is authorized and directed to file a certified copy of this resolution with the
Taxpayer Services Division Manager and to 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 Certificates, certified
copies of proceedings and records of the City relating to the Certificates 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 Certificates, and
such instruments, including any heretofore furnished, will be deemed representations of the City
as to the facts stated therein.
5.02. No Official Statement or Prospectus. It is determined that no official statement or
prospectus has been prepared or circulated by the City in connection with the sale of the
Certificates and that the Purchaser has made its own investigations concerning the City as set
forth in an investment letter of even date, receipt of which is hereby acknowledged.
5.03. Payment of Costs of Issuance. The City authorizes the Purchaser to forward the
amount of Certificate 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.
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Section 6. Tax Covenant.
6.01. Tax -Exempt Certificates. The City covenants and agrees with the holders from
time to time of the Certificates 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 Certificates 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 Certificates.
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 Certificates 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 Certificates,
and the rebate of excess investment earnings to the United States, if the Certificates (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 certificates (other than private activity certificates) issued by the City (and all
subordinate entities of the City) during the calendar year in which the Certificates 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 Certificates. The City further covenants not to use the
proceeds of the Certificates or to cause or permit them or any of them to be used, in such a
manner as to cause the Certificates 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 Certificates 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 Certificates are not "private activity bonds" as defined in Section 141
of the Code;
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September 2, 2008
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(b) the City designates the Certificates 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. Continuing Disclosure.
7.01. No Requirement of Continuing Disclosure. Participating underwriters need not
comply with the continuing disclosure requirements of Rule 15c2-12 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule),
because the offering is in a principal amount less than $1,000,000. Consequently, the City will
not enter into any undertaking to provide continuing disclosure of any kind with respect to the
Certificates.
Section 8. Defeasance. When all Certificates 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 Certificates 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 Certificates
will remain in full force and effect. The City may discharge all Certificates 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 Certificate 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.
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Resolution No. 2008-59
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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:
Smith, Weir, Crosby, Cavanaugh
and the following voted against same: (Absent: Johnson)
None
Whereupon said resolution was declared duly passed and adopted.
Resolution No. 2008-59
September 2, 2008
11
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 (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 September 2, 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 $415,000 General Obligation Equipment Certificates, Series 2008B of the City.
WITNESS My hand officially as such City Administrator and the corporate seal of the
City this day of , 2008.
City Administrator
Medina, Minnesota
(SEAL)
{
STATE OF MINNESOTA
COUNTY OF HENNEPIN
TAXPAYER SERVICES DIVISION MANAGER'S
CERTIFICATE AS TO
TAX LEVY AND
REGISTRATION
I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota,
hereby certify that a certified copy of a resolution adopted by the governing body of Medina,
Minnesota, on September 2, 2008, levying taxes for the payment of $415,000 General Obligation
Equipment Certificates, Series 2008B of said municipality dated September 25, 2008, has been
filed in my office and said Certificates have been entered 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.
(SEAL)
Taxpayer Services Division Manager
Hennepin County, Minnesota
Deputy
EXHIBIT A
PROPOSALS
A -I
EXHIBIT B
EQUIPMENT/COSTS
Equipment Estimated Cost
Police Vehicles $145,000
Tandem Truck 190,000
Mower/Tractor 40,000
Black Top Roller 18,000
Water & Sewer GPS 7,000
B-1
EXHIBIT C
TAX LEVY SCHEDULE
YEAR * TAX LEVY
* Year tax levy collected.
ME230-475 (JAE)
338653v2