HomeMy WebLinkAbout[05] Monte Eastvold, 2009 Refunding Bond Issue~~
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Council Agenda Item 5
MEETING DATE: February 19, 2009
AGENDA ITEM: Monte Eastvold, 2009 Refunding Bond Issue
SUBMITTED BY: Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION:
PREVIOUS COUNCIL ACTION: Monte Eastvold, Bond Counsel, had approached the Council in 2008
with the potential interest savings in refinancing two debt funds of the City, the 2001 Sewer Capacity
and 2002 Improvement. The Council had agreed to watch the rates and re-issue the debt when the
savings reached a point where it was viable to do so. Monte Eastvold has been watching the rates over
the past months and the City is in a position to save considerable interest payments through refinancing.
BACKGROUND INFORMATION: In an effort to reduce the interest further, the City is going through the
rating process again, hoping to receive an A rating. The City is currently one step below that. While we
have a very good rating, we would like to hit the next level. The City should have information before the
meeting as to what our new rating is. Included in the packet is projected savings using an A rating. In
talking to Monte Eastvold on Wednesday, the savings were slightly higher. As everyone is aware the
market is very volatile and Monte will provide current savings on Thursday evening. The attached
information also illustrates the difference in interest rates. Just as a reminder, there is no downside to
the City restructuring this debt. The City is not penalized, nor does the refinancing have an impact on
our credit rating or bonding ability.
BUDGET/FISCAL IMPACT: Savings projected - $ 100,000 +
ATTACHMENTS: Refunding Summary, Resolution authorizing bond sale
REQUESTED COUNCIL ACTION: Authorize the Mayor and Administrator to execute Resolution 2009-
002 providing for the issuance and sale of $ 275,000 General Obligation Crossover Refunding Bonds.
EXTRACT OF MINUTES OI' A MEETING
OF THE CITY COUNCIL
CITY OF ST. JOSEPH, MINNESOTA
HELD: February 19, 2009
Pursuant to due call and notice thereof, a regular or special meeting of the City Council
of the City of St. Joseph, Stearns County, Minnesota, was duly called and held at the City Ha11
on February 19, 2009, at 7:00 P.M., for the purpose, in part, of authorizing the issuance and
awarding the sale of $2,735,000 General Obligation Crossover Refunding Bonds, Series 2009A.
The following members were present:
and the following were absent:
Member
introduced the following resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $2,735,000 GENERAL
OBLIGATION CROSSOVER REFUNDING BONDS, SERIES 2009A AND PLEDGING FOR
THE SECURITY THEREOF SEWER SYSTEM NET REVENUES, SPECIAL
ASSESSMENTS AND LEVYING A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City Council of the City of St. Joseph, Minnesota (the "City"),
hereby determines and declares that it is necessary and expedient to provide moneys for a
crossover refunding of the City's (i) $640,000 original principal amount of General Obligation
Sewer Revenue Bonds of 2001, dated October ], 2001 (the "Prior Sewer Revenue Bonds"),
which mature on and after December 1, 2011, and (ii) $4,700,000 original principal amount of
Genera] Obligation Improvement Bonds of 2002, dated August 1, 2002 (the "Prior Improvement
Bonds"), which mature on and after December 1, 201 ] ;and
B. WHEREAS, $410,000 aggregate principal amount of the Prior Sewer Revenue
Bonds which matures on and after December 1, 2011, is callable on December 1, 2009 (the
"Refunded Sewer Revenue Bonds"), at a price of par plus accrued interest, as provided in the
resolution of the City Council adopted on September 20, 2001, authorizing the issuance of the
Prior Sewer Revenue Bonds (the "Prior Sewer Revenue Bonds Resolution"), provided, $30,000
principal amount of the Prior Sewer Revenue Bonds maturing on December 1, 2010, will be paid
on that date in accordance with the provisions of the Prior Sewer Revenue Bonds Resolution;
and
C. WHEREAS, $2,230,000 aggregate principal amount of the Prior Improvement
Bonds which matures on and after December 1, 2011, is callable on December 1, 2009 (the
"Refunded Improvement Bonds"), at a price of par plus accrued interest, as provided in the
resolution of the City Council adopted on July 25, 2002, authorizing the issuance of the Prior
Improvement Bonds (the "Prior Improvement Bonds Resolution"), provided, $270,000 principal
amount of the Prior Improvement Bonds maturing on December 1, 2010, will be paid on that
date in accordance with the provisions of the Prior Improvement Bonds Resolution; and
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D. WHEREAS, the City owns and operates a municipal sewer system (the "System")
as a separate revenue producing public utility and the December 1, 20l 0 maturity of the Prior
Sewer Revenue Bonds are the only outstanding obligations of the City, the interest and principal
of which would constitute a prior lien upon the net revenues of the System; and
E. WHEREAS, the Prior Sewer Revenue Bonds were issued for the purpose of
providing money to finance improvements to the System (the "Sewer Revenue Project") and the
Prior Improvement Bonds were issued for the purpose of providing money to finance the
construction of various public improvements (the "Improvement Project" and, together with the
Sewer Revenue Project, the "Project"); and
F. WHEREAS, the crossover refunding of the Refunded Sewer Revenue Bonds and
the Refunded Improvement Bonds (together, the "Refunded Bonds") on December 1, 2009 (the
"Crossover Date") is consistent with covenants made with the holders thereof, and is necessary
and desirable for the reduction of debt service cost to the City; and
G. WHEREAS, the City Council hereby determines and declares that it is necessary
and expedient to issue $2,735,000 General Obligation Crossover Refunding Bonds, Series
2009A (the "Bonds" or individually, a "Bond"), pursuant to Minnesota Statutes, Chapter 475, to
provide moneys for a crossover refunding of the Refunded Bonds; and
H. WHEREAS, the Bonds are being sold pursuant to a private sale as permitted by
Minnesota Statutes, Section 475.60, Subdivision 2(5); and
I. WHEREAS, it is in the best interests of the City that the Bonds be issued in book-
entry form as hereinafter provided; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Joseph,
Minnesota, as follows:
1. Acceptance of Offer. The offer of Northland Securities, Inc. (the "Purchaser"), to
purchase the Bonds in accordance with the terms and at the rates of interest hereinafter set forth,
and to pay therefor the sum of $ ,plus interest accrued to settlement, is hereby
accepted.
2. Bond Terms.
(a) Original Issue Date; Denominations; Maturities. The Bonds shall dated March ],
2009, as the date of original issue, shall be issued forthwith on or after such date in fully
registered form, shall be numbered from R-1 upward in the denomination of $5,000 each or in
any integral multiple thereof of a single maturity (the "Authorized Denominations") and shall
mature on December l in the years and amounts as follows:
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Year Amount Year Amount
2010 20]6
2011 2017
2012 2018
2013 2019
20]4 2020
2015 2021
As may be requested by the Purchaser, one or more term Bonds may be issued having
mandatory sinking fund redemption and final maturity amounts conforming to the foregoing
principal repayment schedule, and corresponding additions may be made to the provisions of the
applicable Bond(s).
(b) Allocation of Bonds and Prepayments to Portions of Debt Service. Bonds in the
aggregate principal amount of $ maturing in each of the years and amounts hereinafter
set forth are allocable to the costs of crossover refunding the Refunded Sewer Revenue Bonds
(the "Sewer Revenue Refunding Portion") and Bonds in the aggregate principal amount of
$ maturing in each of the years and amounts hereinafter set forth are allocable to
the costs of crossover refunding the Refunded Improvement Bonds (the "Improvement
Refunding Portion"):
Sewer Revenue Refunding
Year Portion (Amount)
Improvement Refunding
Portion (Amount) Total Amount
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
If Bonds are prepaid, the prepayments shall be allocated to the portions of debt service
(and hence allocated to the payment of Bonds treated as relating to a particular portion of debt
service) as provided in this paragraph. if the source of prepayment moneys is the general fund of
the City, or other generally available source, the prepayment may be allocated to any or all of the
portions of debt service in such amounts as the City shall determine. If the source of a
prepayment is net revenues of the System pledged to the Prior Sewer Revenue Bonds, the
prepayment shall be allocated to the Sewer Revenue Refunding Portion of debt service. If the
source of a prepayment is special assessments or taxes pledged to the Prior Improvement Bonds,
the prepayment shall be allocated to the Improvement Refunding Portion of debt service.
(c) Book Entry Only System. The Depository Trust Company, a limited purpose
trust company organized under the laws of the State of New York or any of its successors or its
successors to its functions hereunder (the "Depository") will act as securities depository for the
Bonds, and to this end:
(i) The Bonds shall be initially issued and, so long as they remain in book
entry form only (the "Book Entry Only Period"), shall at all times be in the form of a
separate single fully registered Bond for each maturity of the Bonds; and for purposes of
complying with this requirement under paragraphs 5 and 10 Authorized Denominations
for any Bond shall be deemed to be limited during the Book Entry Only Period to the
outstanding principal amount of that Bond.
(ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond
register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE
& CO., as the nominee (it or any nominee of the existing or a successor Depository, the
"Nominee").
(iii) With respect to the Bonds neither the City nor the Bond Registrar shall
have any responsibility or obligation to any broker, dealer, bank, or any other financial
institution for which the Depository holds Bonds as securities depository (the
"Participant") or the person for which a Participant holds an interest in the Bonds shown
on the books and records of the Participant (the "Beneficial Owner"). Without limiting
the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have
any such responsibility or obligation with respect to (A) the accuracy of the records of the
Depository, the Nominee or any Participant with respect to any ownership interest in the
Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than
the Depository, of any notice with respect to the Bonds, including any notice of
redemption, or (C) the payment to any Participant, any Beneficial Owner or any other
person, other than the Depository, of any amount with respect to the principal of or
premium, if any, or interest on the Bonds, or (D) the consent given or other action taken
by the Depository as the Registered Holder of any Bonds (the "Holder"). For purposes of
securing the vote or consent of any Holder under this Resolution, the City may, however,
rely upon an omnibus proxy under which the Depository assigns its consenting or voting
rights to certain Participants to whose accounts the Bonds are credited on the record date
identified in a listing attached to the omnibus proxy.
(iv) The City and the Bond Registrar may treat as and deem the Depository to
be the absolute owner of the Bonds for the purpose of payment of the principal of and
premium, if any, and interest on the Bonds, for the purpose of giving notices of
redemption and other matters with respect to the Bonds, for the purpose of obtaining any
consent or other action to be taken by Holders for the purpose of registering transfers
with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as
paying agent hereunder, shall pay all principal of and premium, if any, and interest on the
Bonds only to the Holder or the Holders of the Bonds as shown on the bond register, and
all such payments shall be valid and effective to fully satisfy and discharge the City's
obligations with respect to the principal of and premium, if any, and interest on the Bonds
to the extent of the sum or sums so paid.
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(v) Upon delivery by the Depository to the Bond Registrar of written notice to
the effect that the Depository has determined to substitute a new Nominee in place of the
existing Nominee, and subject to the transfer provisions in paragraph 10, references to the
Nominee hereunder shall refer to such new Nominee.
(vi) So long as any Bond is registered in the name of a Nominee, all payments
with respect to the principal of and premium, if any, and interest on such Bond and al]
notices with respect to such Bond shall be made and given, respectively, by the Bond
Registrar or City, as the case may be, to the Depository as provided in the Letter of
Representations to the Depository required by the Depository as a condition to its acting
as book-entry Depository for the Bonds (said Letter of Representations, together with any
replacement thereof or amendment or substitute thereto, including any standard
procedures or policies referenced therein or applicable thereto respecting the procedures
and other matters relating to the Depository's role as book-entry Depository for the
Bonds, collectively hereinafter referred to as the "Letter of Representations").
(vii) All transfers of beneficial ownership interests in each Bond issued in
book-entry form shall be limited in principal amount to Authorized Denominations and
shall be effected by procedures by the Depository with the Participants for recording and
transferring the ownership of beneficial interests in such Bonds.
(viii) In connection with any notice or other communication to be provided to
the Holders pursuant to this Resolution by the City or Bond Registrar with respect to any
consent or other action to be taken by Holders, the Depository shall consider the date of
receipt of notice requesting such consent or other action as the record date for such
consent or other action; provided, that the City or the Bond Registrar may establish a
special record date for such consent or other action. The City or the Bond Registrar shall,
to the extent possible, give the Depository notice of such special record date not less than
fifteen calendar days in advance of such special record date to the extent possible.
(ix) Any successor Bond Registrar in its written acceptance of its duties under
this Resolution and any paying agency bond registrar agreement, shall agree to take any
actions necessary from time to time to comply with the requirements of the Letter of
Representations.
(x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of
surrendering the Bonds for a Bond of a lesser denomination as provided in paragraph 5
hereof, make a notation of the reduction in principal amount on the panel provided on the
Bond stating the amount so redeemed.
(d) Termination of Book-Entry Only S stem. Discontinuance of a particular
Depository's services and termination of the book-entry only system may be effected as follows:
(i) The Depository may determine to discontinue providing its services with
respect to the Bonds at any time by giving written notice to the City and discharging its
responsibilities with respect thereto under applicable law. The City may terminate the
services of the Depository with respect to the Bond if it determines that the Depository is
2144616v1
no longer able to carry out its functions as securities depository or the continuation of the
system of book-entry transfers through the Depository is not in the best interests of the
City or the Beneficial Owners.
(ii) Upon termination of the services of the Depository as provided in the
preceding paragraph, and if no substitute securities depository is willing to undertake the
functions of the Depository hereunder can be found which, in the opinion of the City, is
willing and able to assume such functions upon reasonable or customary terms, or if the
City determines that it is in the best interests of the City or the Beneficial Owners of the
Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds
shall no longer be registered as being registered in the bond register in the name of the
Nominee, but may be registered in whatever name or names the Holder of the Bonds
shall designate at that time, in accordance with paragraph ] 0. To the extent that the
Beneficial Owners are designated as the transferee by the Holders, in accordance with
paragraph l0, the Bonds will be delivered to the Beneficial Owners.
(iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of
paragraph 10.
(e) Letter of Representations. The provisions in the Letter of Representations are
incorporated herein by reference and made a part of the resolution, and if and to the extent any
such provisions are inconsistent with the other provisions of this resolution, the provisions in the
Letter of Representations shall control.
3. Purpose; Refunding Findings. The Bonds shall provide funds for a crossover
refunding of the Refunded Bonds (the "Refunding"). It is hereby found, determined and declared
that the Refunding is pursuant to Minnesota Statutes, Section 475.67, Subdivision 13, and as of
the crossover date of the Bonds, shall result in a reduction of the present value of the dollar
amount of the debt service to the City from a total dollar amount of (i) $ for
the Prior Sewer Revenue Bonds to a total dollar amount of $ for the Bonds
and (ii) $ for the Prior Improvement Bonds to a total dollar amount of
$ for the Bonds, computed in accordance with the provisions of Minnesota
Statutes, Section 475.67, Subdivision ] 2, and accordingly the dollar amount of such present
value of the debt service for the Bonds is lower by at least three percent than the dollar amount
of such present value of the debt service for the Prior Sewer Revenue Bonds and the Prior
Improvement Bonds, respectively, as required in Minnesota Statutes, Section 475.67,
Subdivision l2.
4. Interest. The Bonds shall bear interest payable semiannually on June 1 and
December 1 of each year (each, an "interest Payment Date"), commencing December 1, 2009,
calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per
annum set forth opposite the maturity years as follows:
z~aac,u~~i
Maturity Year Interest Rate Maturity Year interest Rate
2010 2016
2011 2017
2012 2018
2013 2019
2014 2020
2015 2021
5. Redemption. Bonds maturing on December 1, 2017, and thereafter, shall be
subject to redemption and prepayment at the option of the City on December 1, 2016, and on any
date thereafter at a price of par plus accrued interest. Redemption may be in whole or in pari of
the Bonds subject to prepayment. If redemption is in part, the maturities and the principal
amounts within each maturity to be redeemed shall be determined by the City; and if only part of
the Bonds having a common maturity date are called for prepayment, the specific Bonds to be
prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the redemption date, and interest thereon shall cease to
accrue from and after the redemption date. Mailed notice of redemption shall be given to the
paying agent and to each affected registered holder of the Bonds prior to the date fixed for
redemption.
To effect a partial redemption of Bonds having a common maturity date, the Bond
Registrar prior to giving notice of redemption shall assign to each Bond having a common
maturity date a distinctive number for each $5,000 of the principal amount of the Bond. The
Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in
its discretion, from the numbers so assigned to the Bonds, as many numbers as, at $5,000 for
each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be
redeemed shall be the Bonds to which were assigned numbers so selected; provided, however,
that only so much of the principal amount of each Bond of a denomination of more than $5,000
shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a
Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the
City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the
City and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly
authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall
authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds
having the same stated maturity and interest rate and of any Authorized Denomination or
Denominations, as requested by the Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond so surrendered.
6. Bond Re isg irar. Northland Trust Services, Inc., in Minneapolis, Minnesota, is
appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond
Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all
pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith.
The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is
duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or
record holders) of the Bonds in the manner set forth in the form of Bond and paragraph l 2.
214461Gv1
7. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of
Authentication, the form of Assignment and the registration information thereon, shall be in
substantially the following form:
UNITED STATES OF AMERICA
STATE OF MINNESOTA
STEARNSCOUNTY
CITY OF ST. JOSEPH
R- $
GENERAL OBLIGATION CROSSOVER REFUNDING BOND, SERIES 2009A
Interest Rate Maturity Date Date of Original Issue CUSIP
December 1, March 1, 2009
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The City of St. Joseph, Stearns County, Minnesota (the "Issuer"), certifies that it is
indebted and for value received promises to pay to the registered owner specified above, or
registered assigns, in the manner hereinafter set forth, the principal amount specified above, on
the maturity date specified above, unless called for prior payment, and to pay interest thereon
semiannually on June 1 and December I of each year (each, an "Interest Payment Date"),
commencing December 1, 2009, at the rate per annum specified above (calculated on the basis of
a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for.
This Bond will bear interest from the most recent Interest Payment Date to which interest has
been paid or, if no interest has been paid, from the date of original issue hereof. The principal of
and premium, if any, on this Bond are payable upon presentation and surrender hereof at the
principal office of Northland Trust Services, Inc., in Minneapolis, Minnesota (the "Bond
Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer.
Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the
person in whose name this Bond is registered (the "Holder" or "Bondholder") on the registration
books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the
close of business on the fifteenth day of the calendar month next preceding such Interest
Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be
payable to the person who is the Holder hereof as of the Regular Record Date, and shall be
payable to the person who is the Holder hereof at the close of business on a date (the "Special
Record Date") fixed by the Bond Registrar whenever money becomes available for payment of
the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less
than ten days prior to the Special Record Date. The principal of and premium, if any, and
interest on this Bond are payable in lawful money of the United States of America. So long as
this Bond is registered in the name of the Depository or its Nominee as provided in the
Resolution hereinafter described, and as those terms are defined therein, payment of principal of,
premium, if any, and interest on this Bond and notice with respect thereto shall be made as
provided in the Letter of Representations, as defined in the Resolution, and surrender of this
2144GI6vl
Bond shall not be required for payment of the redemption price upon a partial redemption of this
Bond. Until termination of the book-entry only system pursuant to the Resolution, Bonds may
only be registered in the name of the Depository or its Nominee.
Optional Redemption. The Bonds of this issue (the "Bonds") maturing on December 1,
2017, and thereafter, shall be subject to redemption and prepayment at the option of the City on
December 1, 2016, and on any date thereafter at a price of par plus accrued interest. Redemption
may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the
maturities and the principal amounts within each maturity to be redeemed shall be determined by
the City; and if only part of the Bonds having a common maturity date are called for prepayment,
the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions
thereof called for redemption shall be due and payable on the redemption date, and interest
thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption
shall be given to the paying agent and to each affected Holder of the Bonds prior to the date
fixed for redemption.
Selection of Bonds for Redemption• Partial Redemption. To effect a partial redemption
of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a
common maturity date a distinctive number for each $5,000 of the principal amount of such
Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall
deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at
$5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The
Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided,
however, that only so much of the principal amount of Bond of a denomination of more than
$5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If
a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the
Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the
Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly
authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall
authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds
having the same stated maturity and interest rate and of any Authorized Denomination or
Denominations, as requested by the Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond so surrendered.
Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal
amount of $2,735,000, all of like date of original issue and tenor, except as to number, maturity,
interest rate and denomination, issued pursuant to and in full conformity with the Constitution
and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council on
February 19, 2009 (the "Resolution"), for the purpose of providing funds sufficient for a
crossover refunding on December 1, 2009, of the Issuer's General Obligation Sewer Revenue
Bonds of 2001, dated October 1, 2001 and General Obligation Improvement Bonds of 2002,
dated August 1, 2002, all of which mature on and after December 1, 201 1. This Bond is payable
out of the Escrow Account and the Debt Service Account. This Bond constitutes a general
obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal,
premium, if any, and interest when the same become due, the full faith and credit and taxing
powers of the Issuer have been and are hereby irrevocably pledged.
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Denominations; Exchange; Resolution. The Bonds are issuable solely in fully registered
form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully
registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the
principal office of the Bond Registrar, but only in the manner and subject to the limitations
provided in the Resolution. Reference is hereby made to the Resolution for a description of the
rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal
office of the Bond Registrar.
Transfer. This Bond is transferable by the Holder in person or by the Holder's attorney
duly authorized in writing at the principal office of the Bond Registrar upon presentation and
surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the
Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond
Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and
deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the
transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized
Denomination or Denominations, in aggregate principal amount equal to the principal amount of
this Bond, of the same maturity and bearing interest at the same rate.
Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection with the transfer
or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds.
Treatment of Registered Owners. The Issuer and Bond Registrar may treat the person in
whose name this Bond is registered as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Bond shall be overdue, and neither
the Issuer nor the Bond Registrar shall be affected by notice to the contrary.
Authentication. This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security unless the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Qualified Tax-Exempt Obli ag tion. This Bond has been designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things
required by the Constitution and laws of the State of Minnesota to be done, to happen and to be
performed, precedent to and in the issuance of this Bond, have been done, have happened and
have been performed, in regular and due form, time and manner as required by law, and that this
Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof
and the date of its issuance and delivery to the original purchaser, does not exceed any
constitutional or statutory limitation of indebtedness.
IN WITNESS WHEREOF, the City of St. Joseph, Stearns County, Minnesota, by its City
Council has caused this Bond to be executed on its behalf by the facsimile signatures of its
Mayor and its Administrator-Clerk, the corporate seal of the Issuer having been intentionally
omitted as permitted by law.
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Date of Registration: Registrable by: NORTHLAND TRUST SERVICES,
INC.
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the Bonds
described in the Resolution
mentioned within.
Northland Trust Services, Inc
Minneapolis, Minnesota
Bond Registrar
By
Authorized Signature
Payable at: NORTHLAND TRUST SERVICES,
INC.
CITY OF ST. JOSEPH,
STEARNS COUNTY, MINNESOTA
/s/ Facsimile
Mayor
/s/ Facsimile
Administrator-Clerk
214461Gv]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond, shall
be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UTMA - as custodian for
(Gust) (Minor)
under the Uniform 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 does hereby irrevocably constitute and appoint attorney to transfer
the Bond on the books kept for the registration thereof, with full power of substitution in the
premises.
Dated:
Notice: The assignor's signature to this assignment must
correspond with the name as it appears upon the
face of the within Bond in every particular, without
alteration or any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm
having a membership in one of the major stock exchanges or any other "Eligible Guarantor
Institution" as defined in 17 CFR 240.]7 Ad-15(a)(2).
The Bond Registrar will not effect transfer of this Bond unless the information concerning the
transferee requested below is provided.
Name and Address:
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PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s) and in the amount(s) as follows:
AUTHORIZED
SIGNATURE
DATE AMOUNT OF HOLDER
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8. Execution; Temporary Bonds. The Bonds shall be in typewritten form, shall be
executed on behalf of the City by the signatures of its Mayor and Administrator-Clerk and be
sealed with the seal of the City; provided, as permitted by law, both signatures may be
photocopied facsimiles and the corporate seal has been omitted. In the event of disability or
resignation or other absence of either officer, the Bonds may be signed by the manual or
facsimile signature of the officer who may act on behalf of the absent or disabled officer. In case
either officer whose signature or facsimile of whose signature shall appear on the Bonds shall
cease to be such officer before the delivery of the Bonds, the signature or facsimile shall
nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in
office until delivery.
9. Authentication. No Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit under this resolution unless a Certificate of Authentication on
such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certificates of Authentication on different
Bonds need not be signed by the same person. The Bond Registrar shall authenticate the
signatures of officers of the City on each Bond by execution of the Certificate of Authentication
on the Bond and by inserting as the date of registration in the space provided the date on which
the Bond is authenticated, except that for purposes of delivering the original Bonds to the
Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue of
March ], 2009. The Certificate of Authentication so executed on each Bond shall be conclusive
evidence that it has been authenticated and delivered under this resolution.
l0. Registration; Transfer; Exchange. The City will cause to be kept at the principal
office of the Bond Registrar a bond register in which, subject to such reasonable regulations as
the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds
and the registration of transfers of Bonds entitled to be registered or transferred as herein
provided.
Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the
City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of
registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee
or transferees, one or more new Bonds of any Authorized Denomination or Denominations of a
like aggregate principal amount, having the same stated maturity and interest rate, as requested
by the transferor; provided, however, that no Bond may be registered in blank or in the name of
"bearer" or similar designation.
At the option of the Holder, Bonds may be exchanged for Bonds of any Authorized
Denomination or Denominations of a like aggregate principal amount and stated maturity, upon
surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever
any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond
Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the
Holder making the exchange is entitled to receive.
All Bonds surrendered upon any exchange or transfer provided for in this resolution shall
be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the City.
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All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general
obligations of the City evidencing the same debt, and entitled to the same benefits under this
resolution, as the Bonds surrendered for such exchange or transfer.
Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or
be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar,
duly executed by the Holder thereof or his, her or its attorney duly authorized in writing.
The Bond Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or exchange of any Bond and any
legal or unusual costs regarding transfers and lost Bonds.
Transfers shall also be subject to reasonable regulations of the City contained in any
agreement with the Bond Registrar, including regulations which permit the Bond Registrar to
close its transfer books between record dates and payment dates. The Administrator-Clerk is
hereby authorized to negotiate and execute the terms of said agreement.
l 1. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in
exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Bond.
12. Interest Payment; Record Date. Interest on any Bond shall be paid on each
Interest Payment Date by check or draft mailed to the person in whose name the Bond is
registered (the "Holder") on the registration books of the City maintained by the Bond Registrar
and at the address appearing thereon at the close of business on the fifteenth day of the calendar
month next preceding such Interest Payment Date (the "Regular Record Date"). Any such
interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of
the Regular Record Date, and shall be payable to the person who is the Holder thereof at the
close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever
money becomes available for payment of the defaulted interest. Notice of the Special Record
Date shall be given by the Bond Registrar to the Holders not less than ten days prior to the
Special Record Date.
13. Treatment of Registered Owner. The City and Bond Registrar may treat the
person in whose name any Bond is registered as the owner of such Bond for the purpose of
receiving payment of principal of and premium, if any, and interest (subject to the payment
provisions in paragraph l2) on, such Bond and for all other purposes whatsoever whether or not
such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by
notice to the contrary.
14. Delivery; Application of Proceeds. The Bonds when so prepared and executed
shall be delivered by the Administrator-Clerk to the Purchaser upon receipt of the purchase price,
and the Purchaser shall not be obliged to see to the proper application thereof.
15. Funds; Accounts and Subaccounts. For the convenience and proper
administration of the moneys to be borrowed and repaid on the Bonds, and to make adequate and
specific security to the Purchaser and holders from time to time of the Bonds, there is hereby
created a special fund to be designated the "General Obligation Crossover Refunding Bonds,
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Series 2009A Fund" (the "Fund") to be administered and maintained by the Administrator-Clerk
as a bookkeeping account separate and apart from all other funds maintained in the official
financial records of the City. The Fund shall be maintained in the manner herein specified until
the Bonds and the interest thereon shall have been fully paid. The Operation and Maintenance
Account heretofore established by the City for the System shall continue to be maintained in the
manner heretofore provided by the City. All moneys remaining after paying or providing for the
items set forth in the resolution establishing the Operation and Maintenance Account shall
constitute and are referred to as "net revenues" until the Sewer Revenue Refunding Portion of the
Bonds has been paid. The Administrator-Clerk and all officials and employees concerned
therewith shall establish and maintain financial records of the receipts and disbursements of the
System in accordance with this resolution. In such records there shall be established and
maintained the following separate accounts, for the purposes as follows.
(a) Escrow Account. The Escrow Account shall be maintained as an escrow account
with Northland Trust Services, Inc. (the "Escrow Agent"), in Minneapolis, Minnesota, which is a
suitable financial institution within or without the State. All proceeds of the sale of the Bonds
shall be received by the Escrow Agent and applied to fund the Escrow Account or to pay costs of
issuing the Bonds. Proceeds of the Bonds not used to pay costs of issuance and any Bond
proceeds returned to the City are hereby irrevocably pledged and appropriated to the Escrow
Account, together with all investment earnings thereon. The Escrow Account shall be invested
in securities maturing or callable at the option of the holder on such dates and bearing interest at
such rates as shall be required to provide sufficient funds, together with any cash or other funds
retained in the Escrow Account, (i) to pay when due the interest to accrue on the Bonds to and
including the Crossover Date; and (ii) to pay when called for redemption on the Crossover Date,
the principal amount of the Refunded Bonds. The Escrow Account shall be irrevocably
appropriated to the payment of (i) all interest on the Bonds to and including the Crossover Date,
and (ii) the principal of the Refunded Bonds due by reason of their call for redemption on the
Crossover Date. The moneys in the Escrow Account shall be used solely for the purposes herein
set forth and for no other purpose, except that any surplus in the Escrow Account may be
remitted to the City, all in accordance with the Escrow Agreement, by and between the City and
Escrow Agent (the "Escrow Agreement"), a form of which is on file in the office of the
Administrator-Clerk. Any moneys remitted to the City pursuant to the Escrow Agreement shall
be deposited in the Debt Service Account.
(b) Debt Service Account. There shall be maintained the following separate
subaccounts in the Debt Service Account to be designated the "Sewer Revenue Debt Service
Subaccount" and the "Improvement Debt Service Subaccount". There are hereby irrevocably
appropriated and pledged to, and there shall be credited to the separate subaccounts of the Debt
Service Account:
(i) Sewer Revenue Debt Service Subaccount. To the Sewer Revenue Debt
Service Subaccount there is hereby pledged and irrevocably appropriated and there shall
be credited: (l) after the Crossover Date, the net revenues of the System not otherwise
pledged and applied to the payment of other obligations of the City, in an amount,
together with other funds which may herein or hereafter from time to time be irrevocably
appropriated to the account sufficient to meet the requirements of Minnesota Statutes,
Section 475.61 for the payment of the principal and interest of the Sewer Revenue
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Refunding Portion of the Bonds; (2) any collections of al] taxes which may hereafter be
levied in the event the net revenues of the System herein pledged to the payment of the
principal and interest on the Sewer Revenue Refunding Portion of the Bonds are
insufficient therefor; (3) a pro rata share of accrued interest received upon delivery of the
Bonds; (4) a pro rata share of any sums remitted to the City pursuant to the Escrow
Agreement; (5) any funds remaining after the Crossover Date in the Debt Service
Account established by the Prior Sewer Revenue Bonds Resolution; (6) all investment
earnings on funds in the Sewer Revenue Debt Service Subaccount; and (7) any and all
other moneys which are properly available and are appropriated by the governing body of
the City to the Sewer Revenue Debt Service Subaccount. The amount of any surplus
remaining in the Sewer Revenue Debt Service Subaccount when the Sewer Revenue
Refunding Portion of the Bonds and interest thereon are paid shall be used consistent
with the Minnesota Statutes, Section 475.61, Subdivision 4.
(ii) Improvement Debt Service Subaccount. To the Improvement Debt
Service Subaccount there is hereby pledged and irrevocably appropriated and there shall
be credited: (l) after the Crossover Date, all uncollected special assessments pledged to
the payment of the Prior Improvement Bonds; (2) any collections of all taxes heretofore
or hereafter levied for the payment of the Prior Improvement Bonds and interest thereon
which are not needed to pay the Prior Improvement Bonds as a result of the Refunding;
(3) a pro rata share of accrued interest received upon delivery of the Bonds; (4) a pro rata
share of any sums remitted to the City pursuant to the Escrow Agreement; (5) all
investment earnings on funds in the Improvement Debt Service Subaccount; and (6) any
and all other moneys which are properly available and are appropriated by the governing
body of the City to the Improvement Debt Service Subaccount. The amount of any
surplus remaining in the Improvement Debt Service Subaccount when the Improvement
Portion of the Bonds and interest thereon are paid shall be used consistent with
Minnesota Statutes, Section 475.61, Subdivision 4. The moneys in the Improvement
Debt Service Subaccount shall be used solely to pay the principal of and interest on the
Improvement Portion of the Bonds or any other bonds hereafter issued and made payable
from the Fund.
No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire
higher yielding investments or to replace funds which were used directly or indirectly to acquire
higher yielding investments, except (a) for a reasonable temporary period until such proceeds are
needed for the purpose for which the Bonds were issued, and (b) in addition to the above, in an
amount not greater than the lesser of five percent of the proceeds of the Bonds or $ l 00,000. To
this effect, any proceeds of the Bonds and any sums from time to time held in the Fund (or any
other City account which will be used to pay principal and interest to become due on the Bonds)
in excess of amounts which under the applicable federal arbitrage regulations may be invested
without regard as to yield shall not be invested in excess of the applicable yield restrictions
imposed by the arbitrage regulations on such investments after taking into account any
applicable "temporary periods" or "minor portion" made available under the federal arbitrage
regulations. In addition, the proceeds of the Bonds and money in the Fund shall not be invested
in obligations or deposits issued by, guaranteed by or insured by the United States or any agency
or instrumentality thereof if and to the extent that such investment would cause the Bonds to be
2144616v1 ] "]
"federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue
Code of 1986, as amended (the "Code").
16. Covenants Relating to the Sewer Revenue Refunding Portion of the Bonds.
(a) Pledge of System Net Revenues; Coverage Test. ]t is hereby found, determined
and declared that the System net revenues are sufficient to pay when due the principal of and
interest on the Sewer Revenue Refunding Portion of the Bonds and a sum at least five percent in
excess thereof, and the System net revenues are hereby pledged for the payment of the Sewer
Revenue Refunding Portion of the Bonds and shall be applied for that purpose, but solely to the
extent required to meet the principal and interest requirements of the Sewer Revenue Refunding
Portion of the Bonds as the same become due. Nothing contained herein shall be deemed to
preclude the City from making further pledges and appropriations of the System net revenues for
the payment of other or additional obligations of the City, provided that it has first been
determined by the City Council that the estimated System net revenues will be sufficient for the
payment of the Sewer Revenue Refunding Portion of the Bonds and such additional obligations
and any such pledge and appropriation of the System net revenues may be made superior or
subordinate to, or on a parity with the pledge and appropriation herein.
(b) Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes,
Section 444.075, the City hereby covenants and agrees with the Holders of the Sewer Revenue
Refunding Portion of the Bonds that it will impose and collect charges for the service, use,
availability and connection to the System at the times and in the amounts required to produce
System net revenues adequate to pay the principal and interest when due on the Sewer Revenue
Refunding Portion of the Bonds. Nothing herein shall preclude the City from levying taxes for
the payment of the Sewer Revenue Refunding Portion of the Bonds as permitted by Minnesota
Statutes, Section 115.46.
(c) Excess System Net Revenues. System net revenues in excess of those required
for the foregoing may be used for any proper purpose.
(d) General Obligation Pled;;e. For the prompt and full payment of the principal of
and interest on the Sewer Revenue Refunding Portion of the Bonds as the same respectively
become due, the full faith, credit and taxing powers of the City shall be and are hereby
irrevocably pledged. If the System net revenues pledged to the payment of the principal and
interest on the Sewer Revenue Refunding Portion of the Bonds, together with other funds
irrevocably appropriated to the Escrow Account or the Sewer Revenue Debt Service Subaccount,
shall at any time be insufficient to pay the principal and interest when due, the City covenants
and agrees to levy, without limitation as to rate or amount an ad valorem tax upon all taxable
property in the City sufficient to pay such principal and interest as it becomes due. If the balance
in the Escrow Account or the Sewer Revenue Debt Service Subaccount is ever insufficient to pay
all principal and interest then due on the Sewer Revenue Refunding Portion of the Bonds payable
therefrom, the deficiency shall be promptly paid out of any other accounts of the City which are
available for such purpose, and such other funds may be reimbursed without interest from the
Escrow Account or the Sewer Revenue Debt Service Subaccount when a sufficient balance is
available therein.
2144616v1 1 g
17. Covenants Relating to the Improvement Portion of the Bonds.
(a) Special Assessments. 'The City has heretofore levied special assessments
pursuant to the Prior Improvement Bonds Resolution, which were pledged to the payment of the
principal and interest on the Prior Improvement Bonds and, after the Crossover Date, the
uncollected special assessments for the Prior Improvement Bonds are now pledged to the
payment of principal and interest on the Improvement Refunding Portion of the Bonds. The
special assessments are such that if collected in full they, together with estimated collections of
taxes herein pledged for the payment of the Improvement Refunding Portion of the Bonds, will
produce at least five percent in excess of the amount needed to meet when due the principal and
interest payments on the Improvement Refunding Portion of the Bonds. The special assessments
were levied as provided below, payable in equal, consecutive, annual installments, with general
taxes for the years shown below and with interest on the declining balance of all such
assessments at the rate shown opposite such years:
Improvement Desi nations Amounts Interest Rate Collection Years
See attached schedules
(b) Tax Levv; Coverage Test; Cancellation of Certain Tax Levies. To provide
moneys for payment of the principal and interest on the Improvement Refunding Portion of the
Bonds, there is hereby levied upon all of the taxable property in the City a direct annual ad
valorem tax which shall be spread upon the tax rolls and collected with and as part of other
general property taxes in the City for the years and in the amounts as follows:
Years of Tax Levv Years of Tax Collection Amounts
See attached schedule
The tax levies are such that if collected in full they, together with estimated collections of
special assessments and any other revenues herein pledged for the payment of the Improvement
Refunding Portion of the Bonds and sums held in the Escrow Account, will produce at least five
percent in excess of the amount needed to meet when due the principal and interest payments on
the Improvement Refunding Portion of the Bonds. The tax levies shall be in epealable so long as
any of the Improvement Refunding Portion of the Bonds are outstanding and unpaid, provided
that the City reserves the right and power to reduce the levies in the manner and to the extent
permitted by Minnesota Statutes, Section 475.6], Subdivision 3.
Upon payment of the Prior Improvement Bonds, the uncollected taxes levied in the Prior
Improvement Bonds Resolution authorizing the issuance of the Prior Improvement Bonds which
are not needed to pay the Prior Improvement Bonds as a result of the Refunding shall be
canceled.
(c) General Obligation Pledge. For the prompt and full payment of the principal and
interest on the Improvement Refunding Portion of the Bonds, as the same respectively become
due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably
pledged. If the balance in the Escrow Account or the Improvement Debt Service Subaccount is
ever insufficient to pay all principal and interest then due on the Improvement Refunding Portion
2144616v1 1 9
of the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of
any other funds of the City which are available for such purpose, and such other funds may be
reimbursed with or without interest from the Escrow Account or the lmprovelnent Debt Service
Subaccount when a sufficient balance is available therein.
18. Securities; Escrow Agent. Securities purchased from moneys in the Escrow
Account shall be limited to securities set forth in Minnesota Statutes, Section 475.67,
Subdivision 8, and any amendments or supplements thereto. Securities purchased from the
Escrow Account shall be purchased simultaneously with the delivery of the Bonds. The City
Council has investigated the facts and hereby finds and determines that the Escrow Agent is a
suitable financial institution to act as escrow agent.
19. Escrow Agreement. On or prior to the delivery of the Bonds the Mayor and
Administrator-Clerk shall, and are hereby authorized and directed to, execute on behalf of the
City the Escrow Agreement. The Escrow Agreement is hereby approved and adopted and made
a part of this resolution, and the City covenants that it will promptly enforce all provisions
thereof in the event of default thereunder by the Escrow Agent.
20. Purchase of SLGS or Open Market Securities. The Purchaser, as agent for the
City, is hereby authorized and directed to purchase on behalf of the Council and in its name the
appropriate United States Treasury Securities, State and Local Government Series and/or open
market securities as provided in paragraph 18, from the proceeds of the Bonds and, to the extent
necessary, other available funds, all in accordance with the provisions of this resolution and the
Escrow Agreement and to execute all such documents (including the appropriate subscription
form) required to effect such purchase in accordance with the applicable U.S. Treasury
Regulations.
21. Redemption of Prior Bonds. The Prior Bonds shall be redeemed and prepaid in
accordance with the terms and conditions set forth in the Notices of Call for Redemption, in the
forms attached to the Escrow Agreement, which terms and conditions are hereby approved and
incorporated herein by reference. The Notices of Call for Redemption shall be given pursuant to
the Escrow Agreement.
22. Prior Bonds; Security. Until retirement of the Prior Bonds, all provisions
theretofore made for the security thereof shall be observed by the City and all of its officers and
agents.
23. Supplemental Resolution. The Prior Resolutions are hereby supplemented to the
extent necessary to give effect to the provisions of this resolution.
24. Defeasance. When all Bonds have been discharged as provided in this paragraph,
all pledges, covenants and other rights granted by this resolution to the registered holders of the
Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with
respect to any Bonds which are due on any date by irrevocably depositing with the Bond
Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond
should not be paid when due, it may nevertheless be discharged by depositing with the Bond
Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such
2144616v1 2U
deposit. The City may also at any time discharge its obligations with respect to any Bonds,
subject to the provisions of law now or hereafter authorizing and regulating such action, by
depositing irrevocably in escrow, with a suitable banking institution qualified by law as an
escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67,
Subdivision 8, bearing interest payable at such times and at such rates and maturing on such
dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to
become due thereon to maturity or, if notice of redemption as herein required has been duly
provided for, to such earlier redemption date.
25. Certificate of Registration. A certified copy of this resolution is hereby directed
to be filed with the County Auditor of Stearns County, Minnesota, together with such other
information as the County Auditor shall require, and to obtain from the County Auditor a
certificate that the Bonds have been entered in the County Auditor's Bond Register and that the
tax levy required by law has been made.
26. Records and Certificates. The officers of the City are hereby authorized and
directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the
issuance of the Bonds, certified copies of all proceedings and records of the City relating to the
Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates
and information as are required to show the facts relating to the legality and marketability of the
Bonds as the same appear from the books and records under their custody and control or as
otherwise known to them, and all such certified copies, certificates and affidavits, including any
heretofore furnished, shall be deemed representations of the City as to the facts recited therein.
27. Negative Covenant as to Use of Proceeds and Projects. The City hereby
covenants not to use the proceeds of the Bonds or to use the Projects financed by the Prior
Bonds, or to cause or permit them to be used, or to enter into any deferred payment arrangements
for the cost of the Projects, in such a manner as to cause the Bonds to be "private activity bonds"
within the meaning of Sections 103 and l4] through 150 of the Code.
28. Tax-Exempt Status of the Bonds• Rebate. The City shall comply with
requirements necessary under the Code to establish and maintain the exclusion from gross
income under Section 103 of the Code of the interest on the Bonds, including without limitation
(i) requirements relating to temporary periods for investments, (ii) limitations on amounts
invested at a yield greater than the yield on the Bonds, and (iii) the rebate of excess investment
earnings to the United States, if the Bonds (together with other obligations reasonably expected
to be issued and outstanding at one time in this calendar year) exceed the small issuer exception
amount of $5,000,000.
For purposes of qualifying for the exception to the federal arbitrage rebate requirements
for governmental units issuing $5,000,000 or less of bonds, the City hereby finds, determines and
declares that:
(a) the Bonds are issued by a governmental unit with general taxing powers;
(b) no Bond is a private activity bond;
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(c) ninety-five percent or more of the net proceeds of the Bonds are to be used for
local governmental activities of the City (or of a governmental unit the jurisdiction of which is
entirely within the jurisdiction of the City); and
(d) the aggregate face amount of all tax exempt bonds (other than private activity
bonds) issued by the City (and all subordinate entities thereof, and all entities treated as one
issuer with 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.
(e) there shall not be taken into account for purposes of said $5,000,000 limit any
bond issued to refund (other than to advance refund) any bond to the extent the amount of the
refunding bond does not exceed the outstanding amount of the refunded bond;
(f) the aggregate face amount of the Bonds does not exceed $5,000,000;
(g) each of the Refunded Bonds was issued as part of an issue which was treated as
meeting the rebate requirements by reason of the exception for governmental units issuing
$5,000,000 or less of bonds;
(h) the average maturity of the Sewer Revenue Refunding Portion of the Bonds does
not exceed the average maturity of the Refunded Sewer Revenue Bonds;
(i) the average maturity of the Improvement Refunding Portion of the Bonds does
not exceed the average maturity of the Refunded Improvement Bonds;
(j) no part of the Sewer Revenue Refunding Portion of the Bonds has a maturity date
which is later than the date which is thirty years after the date the Refunded Sewer Bonds were
issued; and
(k) no part of the lmprovement Refunding Portion of the Bonds has a maturity date
which is thirty years after the date the Refunded Improvement Bonds were issued.
29. Designation of 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 hereby makes the following factual statements and representations:
(a) the Bonds are issued after August 7, 1986;
(b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code;
(c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for
purposes of Section 265(b)(3) of the Code;
(d) the reasonably anticipated amount oftax-exempt obligations (other than private
activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will
be issued by the City (and all entities treated as one issuer with the City, and all subordinate
ziaa6~6~~ 22
entities whose obligations are treated as issued by the City) during this calendar year 2009 will
not exceed $10,000,000; and
(e) not more than $10,000,000 of obligations issued by the City during this calendar
year 2009 have been designated for purposes of Section 265(b)(3) of the Code.
The City shall use its best efforts to comply with any federal procedural requirements which may
apply in order to effectuate the designation made by this paragraph.
30. Continuing Disclosure. The City is the sole obligated person with respect to the
Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"),
promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described to:
(a) Provide or cause to be provided to each nationally recognized municipal securities
information repository ("NRMSIR") and to the appropriate state information depository ("SID"),
if any, for the State of Minnesota, in each case as designated by the Commission in accordance
with the Rule, certain annual financial information and operating data in accordance with the
Undertaking. The City reserves the right to modify from time to time the terms of the
Undertaking as provided therein.
(b) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the
Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of the occurrence of
certain material events with respect to the Bonds in accordance with the Undertaking.
(c) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the
MSRB and (ii) the SID, notice of a failure by the City to provide the annual financial information
with respect to the City described in the Undertaking.
(d) The City agrees that its covenants pursuant to the Rule set forth in this paragraph
and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be
enforceable on behalf of such Holders; provided that the right to enforce the provisions of these
covenants shall be limited to a right to obtain specific enforcement of the City's obligations under
the covenants.
The Mayor and Administrator-Clerk, or any other officer of the City authorized to act in
their place (the "Officers") are hereby authorized and directed to execute on behalf of the City
the Undertaking in substantially the form presented to the City Council subject to such
modifications thereof or additions thereto as are (i) consistent with the requirements under the
Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Officers.
31. Severability. If any section, paragraph or provision of this resolution shall be held
to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section,
paragraph or provision shall not affect any of the remaining provisions of this resolution.
32. HeadinQS. Headings in this resolution are included for convenience of reference
only and are not a part hereof, and shall not limit or define the meaning of any provision hereof.
2144616v1 23
The ]notion for the adoption of the foregoing resolution was duly seconded by member
and, after a full discussion thereof and upon a vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
whereupon the resolution was declared duly passed and adopted.
2144616v1 24
STATE OF MINNESOTA
COUNTY OF STEARNS
CITY OF ST. JOSEPH
1, the undersigned, being the duly qualified and acting Administrator-Clerk of the City of
St. Joseph, Minnesota, DO HEREBY CERTIFY that 1 have compared the attached and foregoing
extract of minutes with the original thereof on file in my office, and that the same is a full, true
and complete transcript of the minutes of a meeting of the City Council, duly called and held on
the date therein indicated, insofar as such minutes relate to providing for the issuance and sale of
$2,735,000 General Obligation Crossover Refunding Bonds, Series 2009A.
WITNESS my hand on February 19, 2009.
Administrator-Clerk
2144616v1 25
ated)
2001 Sew 2002 Imp Issue Summary
$435,000.00 $2,300,000.OD $2,735,000.00
5435,000.00 $2,300,000.00 $2,735,000.00
417,027.74 2,259,910.93 2,676,938.67
5,546.25 29,325.00 34,871.25
9,250.00 8.625.00 17,875.00
3,176.01 2,139.07 5,315.08
5435,000.00 52,300,000.00 $2,735,000.00
Net Funded Net Funded Net Funded
$417,027.74 $2,259,910.93 $2,676,938.67
1,947.26 10, 552.40 12,499.66
$418,975.00 $2,270,463.33 $2,689,438.33
18,973.81 66,936.13 85,909.94
3,176.01 2,139.07 5,315.08
$22,149.82 $69,075.20 $91,225.02
5.402% 3.0989'0 3.455%
5.092°k 3.003% 3.335%
7.885 Years 5.734 Years 6.076 Years
3.3556851 % 2.7722103% 2.8926386%
3.5173834°~ 2.9945659% 3.1024747%
2.8767564% 2.8767564% 2.8767564%
3.5191700% 3.0080460% 3.1105192%
3.8417128% 3.0809669% 3.2318632%
Page 1
Preliminary
City of Saint Joseph, Minnesota
G.O. Refunding Bonds of 2008 (Assumes "A" Rated)
20200
Debt Service Comparison
Date Total P+I PCF Existing D/S Net New D/S Old Net Dl~ Savings-
12J01/2009 49,438.33 (2,669,438.33) 3,055,467.50 ,152.42 415,467.50 5,3~b.08
12/01/2010 99,157.50 - 310,630.00 409,987.50 420,667.50 10,680.00
12/01/2011 408,745.00 - - 408,745.00 479,837.50 11,092.50
12/01/2012 411,710.00 - - 411,710.00 423,307.50 11,697.50
12/01/2013 413,947.50 - - 413,847.50 425,865.00 11,917.50
12101!2014 410,250.00 - - 410,250.00 422,085.00 11,835.00
12/01!2015 410,890.00 - - 410,890.00 422,770.00 11,880.00
12/01/2016 410,530.00 - - 41p,530.00 422,442.50 11,912.50
12/01/2017 409,130.00 - 409,130.00 421,237.50 12,107.50
12/0112018 46,650.00 - - 46,660.00 49,012.50 2,362.50
12101!2019 50,130.00 - - 50,130.00 51,952.50 1,822,60
12/01!2020 48,420.00 - - 48,420.00 49,635.00 1,215.00
12/01/2021 46,710.00 - - 46,710.00 47,317.50 607.50
Total 53,215,708.33 (2,689,438.33) 53,366,297.50 53,887,252.42 $3,991,597.50 $104,345.06
PV Analysis Summary (Net to Net)
Gross PV Debt Service Savings ..................... 85,909.94
Net PV Cashflow Savings ~ 2.877%(Bond Yield)..... 85,909.94
Con undf Amount .................... 5 315.08
Net Present Value Bene 91,225.02
Net PV Benefit / $2,772,404.10 PV Refunded Debt Service i=
3.290°~
Net PV Benefit / $2,640,000 Refunded Principal... 3.455°k
Net PV Benefit / $2,735,000 Refunding Principal.. 3.335°~6
Refunding Bond Information
Refunding Dated Date 4/01/2008
Refunding Delivery Date 4!01/2009
Rel 1 i issue Summary 11/13!2009 110:16 AM
C
Northland Securities
Public Finance Page z
Preliminary
City of Saint Joseph, Minnesota
G.O. Refunding Bonds of 2008 (Assumes "A"
2001 / 2002
Debt Service Schedule
Date Principal Coupon Interest Total P;I Fiscal Total
04/01/2009 - _ _ _
12/01/2009 - - 49,438.33 49,438.33 49,438.33
06/01!2010 - - 37,078.75 37,078.75 -
12/01/2010 25,000.00 1.650°10 37,078.75 62,078.75 99,157.50
06/01/2011 - - 36,872.50 36,872.50 -
12/O1l2011 335,000.00 2.100% 36,872.50 371,872.50 408,745.00
06/01/2012 - - 33,355.00 33,355.00 -
12/01/2012 345,060.00 2.250% 33,355.00 378,355.00 411,710.00
06/01/2013 - - 29,473.75 29,473.75 -
12/01/2013 355,060.00 2.450% 29,473.75 384,473.75 413,947.50
06/01/2014 - - 25,125.00 25,125.00 -
12/01/2014 360,000.00 2.600% 25,125.00 385,125.00 410 250 00
06/01/2015 - - 20,445.00 20,445.00 -
12/01l20i5 370,000.00 2.800% 20,445.00 390,445.00 410,890.00
06/01/2016 - - 15,265.00 15,265.00 -
12/Ol/2016 380,000.00 3.000% 15,265.00 395,265.00 410,530.00
06/01/2017 - - 9,565.00 9,565.00 -
12/Ol/2017 390,000.00 3.200% 9,565.00 399,565.00 409,130.00
06/01/2018 - - 3,325.00 3,325.00 -
12/01/2018 40,000.00 3.800% 3,325.00 43,325.00 46,650.00
06/01/2019 - - 2,565.00 2,565.00 -
12/01/2019 45,000.00 3.800% 2,565.00 47,565.00 50,130.00
06/01 /2020 - - 1,710.00 1,710.00 -
12/Ol/2020 45,000.00 3.800% 1,710.00 46,710.00 48,420 00
06/01/2021 - - 855.00 855.00 -
12/01/2021 45,000.00 3.800% 855.00 45,855.00 46,710.00
Total $2,735,000.00 - $480,708.33 $3,215,708.33 -
Dated
First available cat/ date
Call Price -
Bond Year Dollars $16 618 33
Average Life 6.076 Years
Interest Cost (NIC) 3.1024747%
True Interest Cost (TIC) 3.1105192%
Bond Yield for Arbitrage Purposes 2.8767564%
Net Interest Cost 2.8926386%
Weighted Average Maturity 6.076 Years
Rel 1 I Issue Summery ~ 1/13/2009 110:16 AM
Northland Securities
Public Finance Page 3
Preliminary
City
of
S-ai-nt ,~seph innesota
~
~
•E'r.~5ewer Revenue Bonds of 2001
t`
Debt Service To Maturity And To Call
Refunded Inlerest to
Date Bonds Call D/S To Call Principal Coupon Interest R9Funded D!S Fiscal Total
06/01/2009 10,128.75 10,128.75 - - 10,128.75 10,128.75 -
ty01/2D09 410,000.00 10,128.75 420,128.75 - 4.100% 10,12fi.75 10,128.75 20,257.50
D6/01/2010 - - - - 10,128.75 10,126.75 -
ty01/2010 - - - 4.800% 10,128.75 10,128,75 20,267.50
06/01/2011 - - 10,128.75 10,128.75 -
1y01/2011 - - 30,000.00 4.600°k 10,128.75 40,128.76 50,257.50
06/01/2012 - - - - - 9,438.75 9,438.75 -
1y01/2012 - - - 30,000.00 4.600% 9,438.75 39,436.75 46,877.50
06/01/2013 - - - 8,748.75 8,748.75 -
1y01/2013 - - - 30,000.00 4,600°k 8,748.75 38,748.75 47,497.50
06/01/2014 - - - - 8,058.75 8,058.75 ~ -
1y01/2014 35,000.00 4.900% 8,058.75 43,058.75 51,117.50
06/01/2015 - - - - 7,201.25 7,201.25 -
1y01/2015 - - 35,000.00 4.900°k 7,201.25 42,201.25 49,402.50
06/01/2016 - - - - - 6,343.75 6,343.75 -
1y01/2016 - - 35,000.00 4.900°k 6,343.75 41,343.75 47,687.50
06!07/2017 - - - - - 5,486.25 5,486.25 -
1y01/2017 40,000.00 4.900°k 5,486.25 45,486.25 50,972.50
06/01/2018 - - - - - 4,506.25 4,506.25 -
1y01/2018 - - - 40,000.00 5.150% 4,506.25 44,506.25 49,012.50
06/01/201P - - - 3,476.25 3,476.25 -
1y01l2019 - - 45,000.00 5.150°k 3,476.25 48,476.25 51,952.50
06/01/2020 - - - - - 2,317.50 2,317.50 -
12101/2020 45,000.00 5.150°k 2,317.50 47,317.50 49,635.00
06/01/2021 - - - 1,168.7b 1,168.75 -
12/01/2021 - - - 45,000.00 5,150% 1,158.76 46,158.75 47,317.50
Total 5410,000.00 520,257.50 5430,257.50 5410,000.00 - 5174,245.00 5664,245.00 -
Yield Statistics
Average Life 8.142 Yeans
W ' very a Maturi Par Basis 42 `Ce
Average Coupon 5.0172491%
~_ r
Refunding Bond Irrformation ~
Refunding Dated Date 4/01/2009
Refunding Delivery Date 4/01/2009
Olold ~ SINGLE PURPOSE I V13R009 110.16 AM
Northland Securities
Public Finance Page 4
Preliminary
Improvement Bonds of
nesota
Debt Service To Maturity And To Call
Refunded Interest to
Date Bonds Call D/S To Call Principal Coupon Interest Refunded D/S Fiscal Total
06/01/2009 - 44,790.00 44,790.00 - - 44,790.00 44,790.00 -
12101120D9 2,230,OOD.00 44,790.00 2,274,7900D - 3.375°,6 44,790.00 44,790.00 89,560.00
06101/2010 - - - 44,790.00 44,790,00 -
12l01/2010 - - - - 3.50D% 44,780.D0 44,790.00 69,590 OD
06!01/2011 - - - 44,790.00 44,790.OD -
12/0120t 1 28D 000 00 3 625•h 44 79000 324,790 00 369,590 OD
06!0112012 - - - - 39,715.00 39,715.00 -
12J0112012 - - - 295,000.00 3.750°h 39,715.00 334,715.00 374,430.00
06/0112013 - - - - 34,183.75 34,183.75 -
12/01/2013 - 310,000.00 4.000°,6 34,183.75 344,183.75 378,367.50
06/01/2014 - - - - 27,983.75 27,983.75 -
12I012014 - 315,000.00 4.000•.6 27,983.75 342 963.75 370,967.50
06101!2015 - - - - - 21,683.75 21,683.75 -
12101/2015 - - - 330,ODO.OD 4.125% 21,683.75 351,663.75 373,367.50
06101!2016 - - - - 14,677.50 14,877.50 -
12/01/2016 - - - 345,000.00 4.200°,6 14,877.50 359,977.60 374,755.OD
06!01!2017 - - - - - 7,632.50 7,632.60 -
12l012017 355,000 00 4300% 7 632 50 362 832 50 370 265 00
Total 52,23D,000.00 588,580.00 52,319,590.00 52,23D,000.OD E58D,892.SD 52,780,892.60 -
Yield Statistics
Refunding Bond Information
Refunding Dated Date ,d/012009
Refunding Delivery Dale 4/012()09
02dtl I SINGLE PURPOSE I V1J200r 11D:16 AM
Northland Securities
Public Finance Page 6