HomeMy WebLinkAbout[08] Bond Sale CM' OF ST. JoskPN Council Agenda Item 8
MEETING DATE: September 2, 2010
AGENDA ITEM: Bond Sale, Monte Eastvold
SUBMITTED BY: Finance
BOARD /COMMISSION /COMMITTEE RECOMMENDATION: None
PREVIOUS COUNCIL ACTION: Council provided information of the upcoming bond sale at their August
5, 2010 Council meeting. Council awarded bids and adopted the assessment rolls for the 16 Ave
improvement project.
BACKGROUND INFORMATION: Monte Eastvold, Northland Securities, continuously watches the debt
funds of the City in relation to the current interest rates. As you are aware, Eastvold has presented the
Council with numerous refunding opportunities whereby the City saves on interest payments. Eastvold
has identified another candidate for refunding, the 2005 Hill Street /Cloverdale Debt Service. While the
debt is not callable until December 1, 2011 the City can issue crossover bonds. The new debt that is
issued will be held until December 1, 2011 in escrow and will be used to payoff the old debt. From this
point forward the new debt schedule will become effective. The City has utilities this method many
times in the past.
The Average Coupon Rate of the 2005B bonds is 4.24 %. The Average Coupon Rate of the proposed
refunding bonds is estimated to be 2.02 %. This decrease in interest expense contributes to an overall
reduction in future debt service payment s of approximately $37,068. This is a true savings figure in that
all issuance - related expenses have been taken into account.
The 16 Ave improvements will be included in the crossover refunding of the 2005B bonds. One bond
issue will allow for further cost savings on the bond issues.
The City Staff along with Eastvold is very pleased to let you know that the City received an upgrade in
the bond rate from A to A +. The rating was completed by Standards & Poors. Even with the U.S., State
and local economic conditions, the City of St. Joseph has maintained a strong financial position. The A+
rating provides the City with more bond buyers bidding lower interest rates.
Eastvold will present the bid results at the meeting as is customary. The figures presented at the
meeting will then be used to fill in the resolution that is included in your packet.
BUDGET /FISCAL IMPACT: 2005 Bond Issue Impact: Reduction of approximately $37,068 in
future debt payments
New debt of $805,000 incurred to finance the 16 Avenue SE
Improvement.
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ATTACHMENTS: Request for Council Action 8:1 -2
Resolution 2010 -20 Award the sale of the $1,045,000 8:3 -26
GO Refunding Bonds, Series 2010B.
REQUESTED COUNCIL ACTION: Authorize execution of Resolution 2010 -20 Accepting the proposal and
award the sale of the $1,045,000 GO Refunding Bonds, Series 2010B.
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EXTRACT OF MINUTES OF A MEETING
OF THE CITY COUNCIL
CITY OF ST. JOSEPH, MINNESOTA
HELD: September 2, 2010
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 Hall
on September 2, 2010, at P.M., for the purpose, in part, of authorizing the issuance and
awarding the sale of $1,845,000 General Obligation Improvement Bonds, Series 2010B.
The following members were present:
and the following were absent:
Member introduced the following resolution and moved its adoption:
\RESOLUTION ACCEPTING PROPOSAL ON THE NEGOTIATED SALE OF $1,845,000
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2010B, PLEDGING SPECIAL
ASSESSMENTS FOR THE SECURITY THEREOF 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 (i)
crossover refunding of the City's $1,655,000 original principal amount of General Obligation
Improvement Bonds, Series 2005B, dated March 1, 2005 (the "Prior Bonds "), which mature on
and after December 1, 2013 and (ii) to finance the construction of various improvements in the
City (the "Improvements "); and
B. WHEREAS, $985,000 aggregate principal amount of the Prior Bonds which
matures on and after December 1, 2013 (the "Refunded Bonds "), is callable on December 1,
2012 (the "Crossover Date "), at a price of par plus accrued interest, as provided in the resolution
adopted on March 3, 2005, authorizing the issuance of the Prior Bonds (the "Prior Resolution ");
and
C. WHEREAS, the refunding of the Refunded Bonds 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
D. WHEREAS, the City Council hereby determines and declares that it is necessary
and expedient to issue $1,845,000 General Obligation Improvement Bonds, Series 2010B (the
"Bonds" or individually, a "Bond "), pursuant to Minnesota Statutes, Chapter 475, to provide
moneys for a crossover refunding of the Refunded Bonds and pursuant to Minnesota Statutes,
Chapters 429 and 475 to finance the Improvements; and
E. WHEREAS, as permitted by Minnesota Statutes, Section 475.60, Subdivision
2(5), the public sale requirements do not apply to the Bonds; and
F. WHEREAS, the Improvements and all their components have been ordered prior
to the date hereof, after a hearing thereon for which notice was given describing the
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Improvements or all their components by general nature, estimated cost, and area to be assessed;
and
G. 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 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
September 1, 2010, 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 1 in the years and amounts as follows:
Year Amount Year Amount
2011 2019
2012 2020
2013 2021
2014 2022
2015 2023
2016 2024
2017 2025
2018
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. The aggregate principal amount of $ maturing in
each of the years and amounts hereinafter set forth are issued to finance the Improvements (the
"Improvement Portion "); and the aggregate principal amount of $ maturing in each
of the years and amounts hereinafter set forth are issued to finance the refunding of the Refunded
Bonds (the "Crossover Refunding Portion "):
Crossover Refunding
Improvement Portion Portion
Year (Amount) (Amount) Total Amount
2011
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2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
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 either or both of
the portions of debt service in such amounts as the City shall determine. If the source of the
prepayment is special assessments pledged to and taxes levied for the Improvements or for the
project financed by the Prior Bonds, the prepayment shall be allocated to either or both of the
portions 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
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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.
(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 all
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
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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
15 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 System. 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
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 10. To the extent that the
Beneficial Owners are designated as the transferee by the Holders, in accordance with
paragraph 10, 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 Crossover Refunding Portion of the Bonds
shall provide funds for a crossover refunding of the Refunded Bonds (the "Refunding "). The
Improvement Portion of the Bonds shall provide funds to finance the Improvements (the
"Project "). The total cost of the Project, which shall include all costs enumerated in Minnesota
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Statutes, Section 475.65, is estimated to be at least equal to the amount of the Improvement
Portion of the Bonds. 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, 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 $ for the Prior Bonds to a total dollar amount of
$ for the Crossover Refunding Portion of the Bonds computed in accordance
with the provisions of Minnesota Statutes, Section 475.67, Subdivision 12, and accordingly the
dollar amount of such present value of the debt service for the Crossover Refunding Portion of
the Bonds is lower by at least three percent than the dollar amount of such present value of the
debt service for the Prior Bonds, as required in Minnesota Statutes, Section 475.67, Subdivision
12.
4. Interest. The Bonds shall bear interest payable semiannually on June 1 and
December 1 of each year (each, an "Interest Payment Date "), commencing June 1, 2011,
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:
Maturity Year Interest Rate Maturity Year Interest Rate
2011 2019
2012 2020
2013 2021
2014 2022
2015 2023
2016 2024
2017 2025
2018
5. Optional Redemption. Bonds maturing on December 1, 2019, and thereafter,
shall be subject to redemption and prepayment at the option of the City on December 1, 2018,
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 selection of the amounts
and maturities of the Bonds to be prepaid shall be at the discretion of the City. 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 at least thirty days prior to the
date fixed for redemption.
Prior to the date on which any Bond or Bonds are directed by the City to be redeemed in
advance of maturity, the City will cause notice of the call thereof for redemption identifying the
Bonds to be redeemed to be mailed to the Bond Registrar and all Bondholders, at the addresses
shown on the Bond Register. All Bonds so called for redemption will cease to bear interest on
the specified redemption date, provided funds for their redemption have been duly deposited. 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 such Bond. The Bond Registrar
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shall then select by lot, using such method of selection as it shall deem proper in its discretion,
from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for each number,
shall equal the principal amount of such 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 such 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 Registrar. 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 12.
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:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
STEARNS COUNTY
CITY OF ST. JOSEPH
R- $
GENERAL OBLIGATION IMPROVEMENT BOND, SERIES 2010B
Interest Rate Maturity Date Date of Original Issue CUSP
December 1, September 1, 2010
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 redemption, and to pay interest thereon
semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date "),
commencing June 1, 2011, 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
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. All Bonds of this issue (the "Bonds") maturing on December 1,
2019, and thereafter, shall be subject to redemption and prepayment at the option of the City on
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December 1, 2018, 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
selection of the amounts and maturities of the Bonds to be prepaid shall be at the discretion of
the Issuer. 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 at least thirty days
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 $1,845,000, all of like date of original issue and tenor, except as to number, maturity,
interest rate, denomination and redemption privilege, 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 September 2, 2010 (the "Resolution "), for the purpose of providing funds (i)
to finance municipal improvements within the Issuer and (ii) sufficient for a crossover refunding
on December 1, 2012, of the Issuer's General Obligation Improvement Bonds, Series 2005B,
dated March 1, 2005, which mature on and after December 1, 2013. 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.
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.
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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 Obligation. 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.
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IN WITNESS WHEREOF, the City of St. Joseph, Steams 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.
Date of Registration: Registrable by: NORTHLAND TRUST SERVICES,
INC.
Payable at: NORTHLAND TRUST SERVICES,
INC.
BOND REGISTRAR'S
CERTIFICATE OF CITY OF ST. JOSEPH,
AUTHENTICATION STEARNS COUNTY, MINNESOTA
This Bond is one of the Bonds
described in the Resolution
mentioned within. /s/ Facsimile
Mayor
Northland Trust Services, Inc.
Minneapolis, Minnesota
Bond Registrar /s/ Facsimile
Administrator -Clerk
By
Authorized Signature
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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
(Cust) (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 240.17 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
DATE AMOUNT SIGNATURE 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
September 1, 2010. The Certificate of Authentication so executed on each Bond shall be
conclusive evidence that it has been authenticated and delivered under this resolution.
10. 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.
11. 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 12) 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. Fund and Accounts. The City has heretofore created for the Prior Bonds, special
funds designated the "Construction Account" and "Debt Service Account," administered and
maintained by the Administrator -Clerk as bookkeeping accounts separate and apart from all
other funds maintained in the official financial records of the City. The funds shall continue to
be maintained in the manner heretofore specified in the Prior Resolution and as herein and
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hereafter specified until all of the Crossover Refunding Portion of the Bonds and any other
obligations made payable from the funds and the interest thereon and all improvements to be
paid from the funds have been fully paid. The following accounts are herein created:
(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. $ in proceeds of the
sale of the Crossover Refunding Portion of the Bonds shall be received by the Escrow Agent and
applied to fund the Escrow Account or to pay costs of issuing the Crossover Refunding Portion
of the Bonds. Proceeds of the Crossover Refunding Portion of the Bonds, less proceeds used to
pay costs of issuance and any 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, to pay when due the interest to
accrue on the Crossover Refunding Portion of the Bonds to and including the Crossover Date
and 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 all
interest on the Crossover Refunding Portion of the Bonds to and including the Crossover Date
and 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 an agreement (the "Escrow Agreement ") by and
between the City and Escrow Agent, a form of which agreement 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) Construction Account. To the Construction Account there shall be credited the
proceeds of the sale of the Improvement Portion of the Bonds, less capitalized interest and less
accrued interest received thereon, plus any special assessments levied with respect to the
Improvements and collected prior to completion of the Improvements and payment of the costs
thereof. From the Construction Account there shall be paid all costs and expenses of making the
Improvements listed in paragraph 16, including the cost of any construction contracts heretofore
let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes,
Section 475.65. Moneys in the Construction Account shall be used for no other purpose except
as otherwise provided by law; provided that the proceeds of the Improvement Portion of the
Bonds may also be used to the extent necessary to pay interest on the Improvement Portion of
the Bonds due prior to the anticipated date of commencement of the collection of taxes or special
assessments herein levied or covenanted to be levied; and provided further that if upon
completion of the Improvements there shall remain any unexpended balance in the Construction
Account, the balance (other than any special assessments) shall be transferred by the Council to
the Debt Service Account or the fund of any other improvement instituted pursuant to Minnesota
Statutes, Chapter 429, and provided further that any special assessments credited to the
Construction Account shall only be applied towards payment of the costs of the Improvements
upon adoption of a resolution by the City Council determining that the application of the special
assessments for such purpose will not cause the City to no longer be in compliance with
Minnesota Statutes, Section 475.61, Subdivision 1.
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(c) Debt Service Account. To the Debt Service Account there is hereby pledged and
irrevocably appropriated and there shall be credited: (i) all collections of special assessments
herein covenanted to be levied with respect to the Improvements and either initially credited to
the Construction Account and not already spent as permitted above and required to pay any
principal and interest due on the Improvement Portion of the Bonds or collected subsequent to
the completion of the Improvements and payment of the costs thereof (ii) after the Crossover
Date, all uncollected special assessments pledged to the payment of the Prior Bonds; (iii)
capitalized interest in an amount sufficient to pay interest due on the Improvement Portion of the
Bonds on or before June 1, 2011; (iv) any collections of all taxes heretofore or hereafter levied
for the payment of the Prior Bonds and interest thereon which are not needed to pay the Prior
Bonds as a result of the Refunding; (v) any collections of all taxes herein or hereafter levied for
the payment of the Improvement Portion of the Bonds and interest thereon; (vi) all funds
remaining in the Construction Account after completion of the Improvements and payment of the
costs thereof, not so transferred to the account of another improvement; (vii) any sums remitted
to the City pursuant to the Escrow Agreement; (viii) all investment earnings on funds in the
Debt Service Account; and (ix) any and all other moneys which are properly available and are
appropriated by the governing body of the City to the Debt Service Account. The amount of any
surplus remaining in the Debt Service Account when the Bonds and interest thereon are paid
shall be used consistent with Minnesota Statutes, Section 475.61, Subdivision 4. The moneys in
the Debt Service Account shall be used solely to pay the principal of and interest on 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 $100,000. 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
"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 Crossover Refunding Portion of the Bonds.
(a) Special Assessments. The City has heretofore levied special assessments
pursuant to the Prior Resolution, which were pledged to the payment of the principal and interest
on the Prior Bonds and, after the Crossover Date, the uncollected special assessments for the
Prior Bonds are now pledged to the payment of principal and interest on the Crossover
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 Crossover
Refunding Portion of the Bonds, will produce at least five percent in excess of the amount
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needed to meet when due the principal and interest payments on the Crossover 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 Designations Amount Rate Collection Years
(b) Tax Levy; Coverage Test; Cancellation of Certain Tax Levies. To provide
moneys for payment of the principal and interest on the Crossover 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 Levy Years of Tax Collection Amount
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 Crossover
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 Crossover Refunding Portion of the Bonds. The tax levies shall be irrepealable so long as
any of the Crossover 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 475.61, Subdivision 3.
Upon payment of the Prior Bonds, the uncollected taxes levied in the Prior Resolution
authorizing the issuance of the Prior Bonds which are not needed to pay the Prior Bonds as a
result of the Refunding shall be canceled.
17. Covenants Relating to the Improvement Portion of the Bonds.
(a) Assessments. It is hereby determined that no less than twenty percent (20 %) of
the cost to the City of each Improvement financed hereunder within the meaning of Minnesota
Statutes, Section 475.58, Subdivision 1(3), shall be paid by special assessments to be levied
against every assessable lot, piece and parcel of land benefitted by any of the Improvements.
The City hereby covenants and agrees that it will let all construction contracts not heretofore let
within one (1) year after ordering each Improvement financed hereunder unless the resolution
ordering the Improvement specifies a different time limit for the letting of construction contracts.
The City hereby further covenants and agrees that it will do and perform as soon as they may be
done all acts and things necessary for the final and valid levy of such special assessments, and in
the event that any such assessment be at any time held invalid with respect to any lot, piece or
parcel of land due to any error, defect, or irregularity in any action or proceedings taken or to be
taken by the City or the City Council or any of the City officers or employees, either in the
making of the assessments or in the performance of any condition precedent thereto, the City and
the City Council will forthwith do all further acts and take all further proceedings as may be
required by law to make the assessments a valid and binding lien upon such property. The
special assessments have heretofore been authorized. Subject to such adjustments as are required
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by the conditions in existence at the time the assessments are levied, it is hereby determined that
the assessments shall be 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 rates per annum not less than the rate per annum set forth opposite the collection years
specified below:
Improvement Collection
Designation Amount Levy Years Year Rate
2010 -2024 2011 -2025 5.50%
At the time the assessments are in fact levied the City Council shall, based on the then -
current estimated collections of the assessments, make any adjustments in any ad valorem taxes
required to be levied in order to assure that the City continues to be in compliance with
Minnesota Statutes, Section 475.61, Subdivision 1.
(b) Tax Levy; Coverage Test. To provide moneys for payment of the principal and
interest on the Improvement 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:
Year of Tax Levy Year of Tax Collection Amount
See Attached
The tax levies are such that if collected in full they, together with estimated collections of
special assessments and other revenues herein pledged for the payment of the Improvement
Portion of the Bonds, will produce at least five percent (5 %) in excess of the amount needed to
meet when due the principal and interest payments on the Improvement Portion of the Bonds.
The tax levies shall be irrepealable so long as any of the Improvement 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 475.61, Subdivision 3.
18. General Obligation Pledge. For the prompt and full payment of the principal of
and interest on 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 Debt Service Account is ever insufficient to pay all principal and interest then due on
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 Debt Service Account when a sufficient balance is available
therein.
19. 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.
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20. 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 an 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.
21. 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 Crossover Refunding
Portion 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.
22. Redemption of Prior Bonds. The Prior Bonds shall be redeemed and prepaid in
accordance with the terms and conditions set forth in the Notice of Call for Redemption, in the
form attached to the Escrow Agreement, which terms and conditions are hereby approved and
incorporated herein by reference. The Notice of Call for Redemption shall be given pursuant to
the Escrow Agreement.
23. 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.
24. Supplemental Resolution. The Prior Resolution is hereby supplemented to the
extent necessary to give effect to the provisions of this resolution.
25. 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
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.
26. Certificate of Registration. The Administrator -Clerk is hereby directed to file a
certified copy of this resolution with the County Auditor of Stearns County, Minnesota, together
with such other information as the County Auditor shall require, and to obtain the County
Auditor's 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.
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27. 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.
28. Negative Covenant as to Use of Proceeds and Project. The City hereby covenants
not to use the proceeds of the Bonds or to use the Project 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 Project, in such a manner as to cause the Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code.
29. 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;
(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;
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(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 Bonds does not exceed the average maturity of the
Refunded Bonds; and
(i) no part of the Bonds has a maturity date which is later than the date which is
thirty years after the date the Refunded Bonds were issued.
30. 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 of tax 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
entities whose obligations are treated as issued by the City) during this calendar year 2009 will
not exceed $10,000,000;
(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; and
(f) the aggregate face amount of the Bonds does not exceed $10,000,000.
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.
31. 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 the Municipal Securities Rulemaking Board
(the "MSRB ") by filing at www.emma.msrb.org 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 the MSRB notice of the
occurrence of certain material events with respect to the Bonds in accordance with the
Undertaking.
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(c) Provide or cause to be provided, in a timely manner to the MSRB 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.
32. 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.
33. Headings. 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.
The motion 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.
2674034v1
8:25
STATE OF MINNESOTA
COUNTY OF STEARNS
CITY OF ST. JOSEPH
I, the undersigned, being the duly qualified and acting Administrator -Clerk of the City of
St. Joseph, Minnesota, do hereby certify that I 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
$1,845,000 General Obligation Improvement Bonds, Series 2010B.
WITNESS my hand on September 2, 2010.
Administrator -Clerk
2674034v1
8:26
STANDARD Glob C redit Portal
&POOR'S
Ra tingsDirect
August 27, 2010
Summary:
St. Josep v linnesota; General
Obligation
Primary Credit Analyst
Blake Yocom, C hicago ( 1 ) 312 - 233 -7056; blake
Secondary Credit Analyst:
Caroline West, Chicago 312 - 233 -7047; caroline _west @standardandpo
Tab Of Contents
Rat
Outlook
Related Criteria And Research
www standardandpoors .com /ratingsdirect
� 8:27
Summary:
St. Joseph Minnesota; General Obligation
Credit Profile
US$1.845 mil GO imp buds ser 20108 dtd 09/01/2010 due 12/01/2011 -2025
Long Term Rating A+ /Stable New
St. Joseph GO
Long Term Rating A+ /Stable Upgraded
St. Joseph GO (AGM)
Unenhanced Rating A +(SPUR) /Stable Upgraded
Many issues are enhanced by bond insurance.
Rationale
Standard & Poor's Ratings Services raised its long -term rating and underlying rating (SPUR) on St. Joseph, Minn.'s
outstanding debt to 'A +' from 'A', reflecting an increase in reserves and improved financial practices. At the same
time, Standard & Poor's assigned its 'A +' long -term rating to the city's series 2010B general obligation (GO)
improvement bonds. The outlook on all ratings is stable.
In our opinion, the ratings reflect the city's:
• Proximity and access to St. Cloud, Minn., which provides a diverse employment base;
• Adequate income and strong wealth levels measured by market value per capita; and
• Maintenance of very strong reserves.
Partially offsetting the preceding credit strengths are the city's high carrying charges, as well as our concerns about
the financial strength of the city's water and sewer operations and the debt obligations of those funds.
Officials will use proceeds from the series 2010B bonds to finance street improvements in the city and to crossover
refund the city's series 2005B GO improvement bonds. The bonds are secured by the city's full faith and credit
pledge.
St. Joseph covers 4.1 square miles and is in Stearns County, about 8 miles west of St. Cloud and 70 miles northwest
of the Minneapolis -St. Paul metropolitan area. The city, with about 6,066 residents, provides residents with access
to various employment opportunities in nearby St. Cloud ('AA +' GO rating). St. Cloud (population: 65,650) serves
as the regional employment, retail, trade, and health care center for a three -county area in central Minnesota.
Unemployment in the St. Cloud metropolitan area as of May 2010 was 6.2 %, below the state and national rates.
The city's median household effective buying income is, in our opinion, adequate at 81% of the state's average and
89% of the nation's average. However, per capita effective buying income is, in our opinion, a low 55% of the
national average. Management has stated that this is attributable mainly to the student population (about 2,100) at
the College of St. Benedict.
Tax capacity for the city increased by an average of 10.6% annually between 2006 and 2010, to $3.84 million. The
city's indicated market value, which is a better representation of area market prices, was $356.48 million, or, in our
Standard & Poor's 1 RatingsDirect on the Global Credit Portal 1 August 27, 2010
817643 1 301252425 8.28
Summary: St. Joseph, Minnesota; General Obligation
opinion, a strong $63,735 per capita, for 2010. The 10 leading taxpayers account for, in our opinion, a very diverse
10.8% of net tax capacity.
We consider St. Joseph's financial position to be very strong, as evidenced by very strong general fund reserves. At
fiscal year -end 2009 (Dec. 31), the general fund balance (all unreserved) totaled $1.66 million after a large $599,000
surplus, or, in our opinion, a very strong 69.3% of expenditures. Management attributes the surplus to an
allocation error that returned $100,000 to the general fund, unfilled positions, and reduced capital expenditures.
After the state cut local government aid to the city by a total of $200,000 in fiscals 2008 and 2009, management
expects an additional $295,000 reduction in fiscal 2010. Management had anticipated and budgeted for $200,000
in local government aid cuts. After further reductions in capital expenditures, unfilled positions, and other savings,
management expects to be close to break -even in fiscal 2010. Although the city is early in the budget process,
management is projecting a break -even budget in fiscal 2011 with no use of reserves. Property taxes (39.5 %) are the
leading revenue source, followed by intergovernmental aid (35 %).
Standard & Poor's considers St. Joseph's financial management practices "good" under its Financial Management
Assessment (FMA) methodology. An FMA of "good" indicates that practices exist in most areas, although not all
might be formalized or regularly monitored by governance officials. We changed the assessment to "good" from
"standard" based on clarification of the city's reserve policy. Management maintains a general fund reserves goal of
four to six months of expenditures. Management provides reports on budgeted numbers compared to actual results
to the city council monthly. The city also uses a five -year capital improvement plan to address capital needs. The city
does not have a multiyear financial plan or a debt management policy.
In our opinion, St. Joseph's overall debt burden is a moderate $3,793 per capita, but a moderately high 6.5% of
market value. Debt service as a percentage of expenditures is, in our view, high at 54.8 %. The city supports
approximately 51% of its GO debt with nonproperty tax sources such as special assessments. In addition, the water
and sewer GO debt accounts for 39% of the city's net direct debt obligation. Recent trends have shown a higher
reliance on water and sewer access fees to make debt service payments and operating losses in both the water and
sewer funds. Debt amortization is rapid, with officials retiring 83% of principal over 10 years. The city has no
formal debt plans at this time but anticipates a bond issuance for street improvements within the next two years.
Outlook
The stable outlook reflects our expectation that the city will maintain balanced financial operations and strong
reserves despite reductions in state aid. The city's access to St. Cloud, which serves as a regional economic center in
the area, provides further rating stability.
Related Criteria And Research
• USPF Criteria: GO Debt, Oct. 12, 2006 •
• USPF Criteria: Key General Obligation Ratio Credit Ranges — Analysis Vs. Reality, April 2, 2008
Complete ratings information is available to RatingsDirect subscribers on the Global Credit Portal at
www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this
rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings
search box located in the left column.
www.standardandpoors .com/ratingsdirect
817643 1 30 i=b-4=b 8:29
Honorable City Council NORTHLAND S E C U R I T I E S
City of St. Joseph, Minnesota
Dear City Officials:
We understand that you desire to issue $1,825,000 General Obligation Improvement Bonds. Accordingly, we propose
as follows:
We agree to purchase $1,825,000 General Obligation Improvement Bonds, Series 2010B to be dated September 1,
2010 and to mature December 1, 2011 -2025. We agree to pay for the Bonds $1,814,103.80 and accrued interest to the
date of settlement.
The Bonds are to be payable at Northland Trust Services, Inc., Minneapolis, Minnesota, as paying agent, registrar and
escrow agent. Interest is to be payable on June 1, 2011 and semiannually thereafter. The Bonds will have the following
interest rates and will mature or be subject to mandatory redemption on December 1 in the years and amounts as
follows:
2011 $45,000 2.00 % 2019 $190,000 2.30 %
2012 45,000 2.00 2020 190,000 2.45
2013 170,000 2.00 2021 55,000 2.90
2014 170,000 2.00 2022 55,000 2.90
2015 175,000 2.00 2023 60,000 2.90
2016 180,000 2.00 2024 60,000 3.25
2017 180,000 2.00 2025 65,000 3.25
2018 185,000 2.10
It is further understood that you authorize the escrow agent to purchase securities to fund the escrow account for the
benefit of the Issuer.
All Bonds will be Book Entry and in multiples of $5,000. The average interest rate is 2.4117% and the TIC is
2.4845 %.
Mandatory Redemption: This issue shall have two term bonds maturing December 1, 2023 (2021 through 2023
maturities) and December 1, 2025 (2024 and 2025 maturities), which will have mandatory redemptions equal to the
annual principal due as stated above.
Optional Redemption: Bonds maturing in the years 2019 through 2025, inclusive, are callable at the option of the
Issuer in whole or in part on December 1, 2018, or on any date thereafter, at a price of par plus accrued interest.
This contract is made for prompt acceptance and subject to the approval of Briggs and Morgan, Professional
Association (Bond Counsel) of St. Paul, Minnesota, as to the legality and regularity of all proceedings taken in the
issuance of the Bonds.
The Issuer agrees to pay the expenses for registering the Bonds and the fee of Bond Counsel, recognized municipal
bond attorneys, in furnishing the necessary proceedings required to authorize the issuance of the Bonds. The Issuer
shall be responsible for paying agent fees on the Refunded Bonds when calle. .1 •: • p . ic: tion of the call notice.
Respectfully submitted this 2 "d day of September, 2010.
Northland ec • .
►By:
The foregoing proposal was duly accepted by the City Council of the City,of St. oseph, ly inneSota, at 7 P.M. this
2nd day of September 2010.
By: _ �� l !■
Mayor
dm , istrat.
Northland Sec, rities nc. 45 South 7th Street, Suite 2000, Minneapolis, MN 55402 Toll Free 1 -800- 851 -2920 Ma;n 612 - 851 -5900 Fax 612- 851 -5987
www.northlandsecurities.com
Member FINRA and SIPC
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Final
City of Saint Joseph, Minnesota
G.O. Improvement Bonds, Series 2010B
Refunding Summary
Dated 09/01/2010 l Delivered 09/28/2010
Issue
Refunding New Money Summary
Sources Of Funds
Par Amount of Bonds $1,035,000.00 $790,000.00 $1,825,000.00
Reoffering Premium 15,957.70 8,368.60 24,326.30
Accrued Interest from 09/01/2010 to 09/28/2010 1,638.56 1,451.63 3,090.19
Total Sources $1,052,596.26 $799,820.23 $1,852,416.49
Uses Of Funds
Deposit to Crossover Escrow Fund 1,023,691.96 - 1,023,691.96
Deposit to Project Construction Fund - 753,617.00 753,617.00
Total Underwriter's Discount (1.930 %) 19,975.50 15,247.00 35,222.50
Costs of Issuance 6,825.00 16,870.00 23,695.00
Deposit to Capitalized Interest (CIF) Fund - 14,677.54 14,677.54
Deposit to Debt Service Fund - 1,451.63 1,451.63
Rounding Amount 2.103.80 (2,042.94) 60.86
Total Uses $1,052,596.26 $799,820.23 $1,852,416.49
Flow of Funds Detail
State and Local Government Series (SLGS) rates for 8/31/2010 •
Date of OMP Candidates
Primary Purpose Fund Solution Method Net Funded Net Funded Net Funded
Total Cost of Investments $1,023,691.96 $753,617.00 $1,777,308.96
Interest Earnings @ 0.477% 10,464.92 - 10,464.92
Total Draws $1,034,156.88 $753,617.00 $1,787,773.88
Capitalized Interest Fund Solution Method Net Funded Net Funded Net Funded
Original Bond Proceeds - 14,677.54 14,677.54
Accrued Interest - 1,451.63 1,451.63
Total Draws - $16,129.17 $16,129.17
PV Analysis Summary (Net to Net)
Net PV Cashflow Savings @ 2.203 %(Bond Yield) 38,368.30 - -
Contingency or Rounding Amount 2,103.80 - -
Net Present Value Benefit $40,472.10 - -
Net PV Benefit / - Refunded Principal 4.109% - -
Net PV Benefit / - Refunding Principal 3.910% - -
Bond Statistics
Average Life 6.835 Years 8.699 Years 7.642 Years
Average Coupon 2.1567327% 2.6742997% 2.4117819%
Net Interest Cost (NIC) 2.2135314% 2.7743856% 2.4899118%
Bond Yield for Arbitrage Purposes 2.2025322% 2.2025322% 2.2025322%
True Interest Cost (TIC) 2.2155397% 2.7707367% 2.4845272%
All Inclusive Cost (AIC) 2.3224509% 3.0623298% 2.6783664%
05bref 1 Issue Summary 1 9/212010 1 10:48 AM
Northland Securities
Public Finance Page 1
r(! ---. Final
City of Saint Joseph, Minnesota
G.O. Improvement Bonds, Series 2010B
Debt Service Schedule
Date Principal Coupon Interest Total P +I Fiscal Total
09/28/2010
- - - -
06/01/2011 - - 30,901.88 30,901.88 -
12/01/2011 45,000.00 2.000% 20,601.25 65,601.25 96,503.13
06/01/2012 - - 20,151.25 20,151.25 -
12/01/2012 45,000.00 2.000% - 20,151.25 65,151.25 85,302.50
06/01/2013 - - 19,701.25 19,701.25 -
12/01/2013 170,000.00 2.000% 19,701.25 189,701.25 209,402.50
06/01/2014 - - 18,001.25 18,001.25 -
12/01/2014 170,000.00 2.000% 18,001.25 188,001.25 206,002.50
06/01/2015 - - 16,301.25 16,301.25 -
12/01/2015 175,000.00 2.000% 16,301.25 191,301.25 207,602.50
06/01/2016 - - 14,551.25 14,551.25 -
12/01/2016 180,000.00 2.000% 14,551.25 194,551.25 209,102.50
06/01/2017 - - 12,751.25 12,751.25 -
12/01/2017 180,000.00 2.000% 12,751.25 192,751.25 205,502.50
06/01/2018 - - 10,951.25 10,951.25 -
12/01/2018 185,000.00 2.100% 10,951.25 195,951.25 206,902.50
06/01/2019 - - 9,008.75 9,008.75 -
12/01/2019 190,000.00 2.300% 9,008.75 199,008.75 208,017.50
06/01/2020 - - 6,823.75 6,823.75 -
12/01/2020 190,000.00 2.450% 6,823.75 196,823.75 203,647.50
06/01/2021 - - 4,496.25 4,496.25 -
12/01/2021 55,000.00 2.900% 4,496.25 59,496.25 63,992.50
06/01/2022 - - 3,698.75 3,698.75 -
12/01/2022 55,000.00 2.900% 3,698.75 58,698.75 62,397.50
06/01/2023 - - 2,901.25 2,901.25 -
12/01/2023 60,000.00 2.900% 2,901.25 62,901.25 65,802.50
06/01/2024 - - 2,031.25 2,031.25 -
12/01/2024 60,000.00 3.250% 2,031.25 62,031.25 64,062.50
06/01/2025 - - 1,056.25 1,056.25 -
12/01/2025 65,000.00 3.250% 1,056.25 66,056.25 67,112.50
Total $1,825,000.00 - $336,353.13 $2,161,353.13 -
Dated 9/01/2010
Delivery Date 9/28/2010
First Coupon Date 6/01/2011
First available call date 12/01/2018
Call Price 100.0000000%
Accrued Interest from 09/01/2010 to 09/28/2010 3,090.19
Bond Year Dollars $13,946.25
Average Life 7.642 Years
Average Coupon 2.4117819%
Net Interest Cost (NIC) 2.4899118%
True Interest Cost (TIC) 2.4845272%
Bond Yield for Arbitrage Purposes 2.2025322%
Net Interest Cost 2.1983229%
Weighted Average Maturity 7.599 Years
05bref 1 Issue Summary 1 9/ 2/2010 1 10:48 AM
Northland Securities
Public Finance Page 2
ill! ' Final
City of Saint Joseph, Minnesota
G.O. Improvement Bonds, Series 2010B
Pricing Summary
Maturit
Maturity Type of Bond Coupon Yield Value Price Dollar Price
12/01/2011 Serial Coupon 2.000% 0.500% 45,000.00 101.754% 45,789.30
12/01/2012 Serial Coupon 2.000% 0.600% 45,000.00 103.020% 46,359.00
12/01/2013 Serial Coupon 2.000% 0.800% 170,000.00 103.754% 176,381.80
12/01/2014 Serial Coupon 2.000% 1.100% 170,000.00 103.662% 176,225.40
12/01/2015 Serial Coupon 2.000% 1.400% - 175,000.00 102.984% 180,222.00
12/01/2016 Serial Coupon 2.000% 1.700% 180,000.00 101.750% 183,150.00
12/01/2017 Serial Coupon 2.000% 1.900% 180,000.00 100.666% 181,198.80
12/01/2018 Serial Coupon 2.100% 2.100% 185,000.00 100.000% 185,000.00
12/01/2019 Serial Coupon 2.300% 2.300% 190,000.00 100.000% 190,000.00
12/01/2020 Serial Coupon 2.450% 2.450% 190,000.00 100.000% 190,000.00
12/01/2023 Term 1 Coupon 2.900% 2.900% 170,000.00 100.000% 170,000.00
12/01/2025 Term 2 Coupon 3.250% 3.250% 125,000.00 100.000% 125,000.00
Total - - - $1,825,000.00 - $1,849,326.30
Dated 9/01/2010
Delivery Date 9/28/2010
First Coupon Date 6/01/2011
First available call date 12/01/2018
Call Price 100.0000000%
Par Amount of Bonds $1,825,000.00
Reoffering Premium or (Discount) 24,326.30
Gross Production $1,849,326.30
Total Underwriter's Discount (1.930 %) $(35,222.50)
Bid (99.403 %) 1,814,103.80
Accrued Interest from 09/01/2010 to 09/28/2010 3,090.19
Total Purchase Price $1.817,193.99
Bond Year Dollars $13,946.25
Average Life 7.642 Years
Average Coupon 2.4117819%
Net Interest Cost (NIC) 2.4899118%
True Interest Cost (TIC) 2.4845272%
05bref 1 Issue Summary 1 9/2/2010 1 10:48 AM
Northland Securities
Public Finance Page 3
Final
C ity of Saint Joseph, Minnesota
G.O. Improvement Bonds, Series 2010B
Refunding
Refunding Summary
Dated 09/01/2010 1 Delivered 09/28/2010
Sources Of Funds
Par Amount of Bonds $1,035,000.00
Reoffering Premium 15,957.70
Accrued Interest from 09/01/2010 to 09/28/2010 1,638.56
Total Sources $1,052,596.26
Uses Of Funds
Deposit to Crossover Escrow Fund 1,023,691.96
Total Underwriter's Discount (1.930 %) 19,975.50
Costs of Issuance 6,825.00
Rounding Amount 2,103.80
Total Uses $1,052,596.26
Flow of Funds Detail
State and Local Govemment Series (SLGS) rates for 8/31/2010
Date of OMP Candidates
Crossover Escrow Fund Solution Method Net Funded
Total Cost of Investments $1,023,691.96
Interest Eamings @ 0.477% 10,464.92
Total Draws $1,034,156.88
Issues Refunded And Call Dates
05bold 12/01/2012
PV Analysis Summary (Net to Net)
Net PV Cashflow Savings @ 2.203 %(Bond Yield) 38,368.30
Contingency or Rounding Amount 2,103.80
Net Present Value Benefit $40,472.10
Net PV Benefit / $985,000 Refunded Principal _ 4.109%
Net PV Benefit / $1,035,000 Refunding Principal 3.910%
Bond Statistics
Average Life 6.835 Years
Average Coupon 2.1567327%
Net Interest Cost (NIC) 2.2135314%
Bond Yield for Arbitrage Purposes 2.2025322%
True Interest Cost (TIC) _ 2.2155397%
All Inclusive Cost (AIC) 2.3224509%
05bref 1 Refunding 1 9/2/2010 1 10:48 AM
Northland Securities
Public Finance Page 4
Final
City of Saint Joseph, Minnesota
G.O. Improvement Bonds, Series 2010B
Refunding
Debt Service Comparison
Date Total P +I PCF Existing D/S Net New D/S Old Net D/S Savings
12/01/2010 - - 121,012.50 118,908.70 121,012.50 2,103.80
12/01/2011 27,309.38 (27,309.38) 148,795.00 148,795.00 148,795.00 -
12/01/2012 21,847.50 (1,006,847.50) 1,135,195.00 150,195.00 150,195.00 -
12/01/2013 146,847.50 - - 146,847.50 151,257.50 4,410.00
12/01/2014 139,347.50 - - 139,347.50 146,967.50 7,620.00
12/01/2015 141,947.50 - - 141,947.50 147,567.50 5,620.00
12/01/2016 144,447.50 - - 144,447.50 147,852.50 3,405.00
12/01/2017 141,847.50 - 141,847.50 147,872.50 6,025.00
-
12/01/2018 144,247.50 - - 144,247.50 147,622.50 3,375.00
12/01/2019 141,412.50 - - 141,412.50 147,032.50 5,620.00
12/01/2020 138,307.50 - - 138,307.50 146,160.00 7,852.50
Total $1,187,561.88 (1,034,156.88) $1,405,002.50 $1,556,303.70 $1,602,335.00 $46,031.30
PV Analysis Summary (Net to Net)
Gross PV Debt Service Savings 38,368.30
Net PV Cashflow Savings @ 2.203 %(Bond Yield) 38,368.30
Contingency or Rounding Amount 2,103.80
Net Present Value Benefit $40,472.10
Net PV Benefit / $1,024,086.23 PV Refunded Debt Service 3.952%
Net PV Benefit / $985,000 Refunded Principal... 4.109%
Net PV Benefit / $1,035,000 Refunding Principal.. 3.910%
Refunding Bond Information
Refunding Dated Date 9/01/2010
Refunding Delivery Date 9/28/2010
05bref 1 Refunding 1 9/2/2010 1 10:48 AM
Northland Securities
Public Finance Page 5
Final
City of Saint Joseph, Minnesota
G.O. Improvement Bonds, Series 2010B
Refunding
Debt Service Schedule
Date Principal Coupon Interest Total P +I Fiscal Total
09/28/2010 - - - - -
06/01/2011 - - 16,385.63 16,385.63 -
12/01/2011 - - 10,923.75 10,923.75 27,309.38
06/01/2012 - ., - 10,923.75 10,923.75 -
12/01/2012 - - 10,923.75 10,923.75 - 21,847.50
06/01/2013 - -, 10,923.75 10,923.75 -
12/01/2013 125,000.00 2.000% 10,923.75 135,923.75 146,847.50
06/01/2014 - - 9,673.75 9,673.75 -
12/01/2014 120,000.00 2.000% 9,673.75 129,673.75 139,347.50
06/01/2015 - - 8,473.75 8,473.75 -
12/01/2015 125,000.00 2.000% 8,473.75 133,473.75 141,947.50
06/01/2016 - - 7,223.75 7,223.75 -
12/01/2016 130,000.00 2.000% 7,223.75 137,223.75 144,447.50
06/01/2017 - - 5,923.75 5,923.75 -
12/01/2017 130,000.00 2.000% 5,923.75 135,923.75 141,847.50
06/01/2018 - - 4,623.75 4,623.75 -
12/01/2018 135,000.00 2.100% 4,623.75 139,623.75 144,247.50
06/01/2019 - - 3,206.25 3,206.25 -
12/01/2019 135,000.00 2.300% 3,206.25 138,206.25 141,412.50
06/01/2020 - - 1,653.75 1,653.75 -
12/01/2020 135,000.00 2.450% 1,653.75 136,653.75 138,307.50
Total $1,035,000.00 - $152,561.88 $1,187,561.88 -
Dated 9/01/2010
Delivery Date 9/28/2010
First Coupon Date 6/01/2011
First available call date 12/01/2018
Call Price 100.0000000%
Accrued Interest from 09/01/2010 to 09/28/2010 1,638.56
Bond Year Dollars $7,073.75
Average Life 6.835 Years
Average Coupon 2.1567327%
Net Interest Cost (NIC) 2.2135314%
True Interest Cost (TIC) 2.2155397%
Bond Yield for Arbitrage Purposes 2.2025322%
Net Interest Cost 1.8882239%
Weighted Average Maturity 6.801 Years
05bref 1 Refunding 1 9/2/2010 1 10:48AM
Northland Securities
Public Finance Page 6
Final
City of Saint Joseph, Minnesota
G.O. Improvement Bonds, Series 2010B
New Money
Project Summary
Dated 09/01/2010 I Delivered 09/28/2010
Sources Of Funds
Par Amount of Bonds $790,060.00
Reoffering Premium 8,368.60
Accrued Interest from 09/01/2010 to 09/28/2010 1,451.63
Total Sources $799,820.23
Uses Of Funds
Deposit to Project Construction Fund 753,617.00
Costs of Issuance 16,870.00
Total Underwriter's Discount (1.930 %) 15,247.00
Deposit to Capitalized Interest (CIF) Fund 14,677.54
Deposit to Debt Service Fund 1,451.63
Rounding Amount (2,042.94)
Total Uses $799,820.23
Flow of Funds Detail
State and Local Government Series (SLGS) rates for
Date of OMP Candidates
Project Construction Fund Solution Method Net Funded
Total Cost of Investments $753,617.00
Total Draws $ 753,617 . 00
•
Capitalized Interest Fund Solution Method Net Funded
Original Bond Proceeds 14,677.54
Accrued Interest 1,451.63
Total Draws $16,129.17
Bond Statistics
Average Life 8.699 Years
Average Coupon 2.6742997%
Net Interest Cost (NIC) 2.7743856%
Bond Yield for Arbitrage Purposes _ _ 2.2025322%
True Interest Cost (TIC) 2.7707367%
All Inclusive Cost (AIC) 3.0623298%
05bref New Money 9/ 2,2010 10:48 AM
Northland Securities
Public Finance Page 7
Final
City of Saint Joseph, Minnesota
1 G.O. Improvement Bonds, Series 2010B
New Money
Debt Service Schedule
Date Principal Coupon Interest Total P +I Fiscal Total
09/28/2010 - - - - -
06/01/2011 - - 14,516.25 14,516.25 -
12/01/2011 45,000.00 2.000% 9,677.50 54,677.50 69,193.75
06/01/2012 - - 9,227.50 9,227.50 -
12/01/2012 45,000.00 2.000% 9,227.50 54,227.50 63,455.Q0
06/01 /2013 - - 8,777.50 8,777.50 -
12/01/2013 45,000.00 2.000% 8,777.50 53,777.50 62,555.00
06/01/2014 - - 8,327.50 8,327.50 -
12/01/2014 50,000.00 2.000% 8,327.50 58,327.50 66,655.00
06/01/2015 - - 7,827.50 7,827.50 -
12/01/2015 50,000.00 2.000% 7,827.50 57,827.50 65,655.00
06/01/2016 - 7,327.50 7,327.50 -
12/01/2016 50,000.00 2.000% 7,327.50 57,327.50 64,655.00
06/01/2017 - - 6,827.50 6,827.50 -
12/01/2017 50,000.00 2.000% 6,827.50 56,827.50 63,655.00
06/01/2018 - - 6,327.50 6,327.50 -
12/01/2018 50,000.00 2.100% 6,327.50 56,327.50 62,655.00
06/01/2019 - - 5,802.50 5,802.50 -
12/01/2019 55,000.00 2.300% 5,802.50 60,802.50 66,605.00
06/01/2020 - - 5,170.00 5,170.00 -
12/01/2020 55,000.00 2.450% 5,170.00 60,170.00 65,340.00
06/01/2021 - - 4,496.25 4,496.25 -
12/01/2021 55,000.00 2.900% 4,496.25 59,496.25 63,992.50
06/01/2022 - - 3,698.75 3,698.75 -
12/01/2022 55,000.00 2.900% 3,698.75 58,698.75 62,397.50
06/01/2023 - - 2,901.25 2,901.25 -
12/01/2023 60,000.00 2.900% 2,901.25 62,901.25 65,802.50
06/01/2024 - - 2,031.25 2,031.25 -
12/01/2024 60,000.00 3.250% 2,031.25 62,031.25 64,062.50
06/01/2025 - - 1,056.25 1,056.25 -
12/01/2025 65,000.00 3.250% 1,056.25 66,056.25 67,112.50
Total 5790,000.00 - $183,791.25 $973,791.25 -
Dated 9/01/2010
Delivery Date 9/28/2010
First Coupon Date 6/01/2011
First available call date 12/01/2018
Call Price 100.0000000%
Accrued Interest from 09/01/2010 to 09/28/2010 1,451.63
Bond Year Dollars $6,872.50
Average Life 8.699 Years
Average Coupon 2.6742997%
Net Interest Cost (NIC) 2.7743856%
True Interest Cost (TIC) 2.7707367%
Bond Yield for Arbitrage Purposes 2.2025322%
Net Interest Cost 2.5192992%
Weighted Average Maturity 8.650 Years
05bref 1 New Money 1 9/ 2/2010 1 10:48 AM
1
II Northland Securities
Public Finance Page 8
16th Ave Final
CITY OF ST. JOSEPH, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS OF 2010, SERIES B
:Bond Payments: Revenue :Sources. Cash Flow
Final Total Statutory Storm Special Est. Annual
(12 -1) Interest Debt 5.00% Cap. Sewer Assessment Tax Surplus/ Cumulative
Year Principal Rate Interest Payment Coverage Interest Revenues Income Levy Deficit Balance
2010 0 0.000% 4,839 4,839 4,839 14,516 0 1,635 0 11,312 11,312
2011 45,000 2.000% 19,355 64,355 67,573 13,254 43,396 10,000 -922 10,390
2012 45,000 2.000% 18,455 63,455 66,628 13,254 42,089 11,000 -285 10,105
2013 45,000 2.000% 17,555 62,555 65,683 13,254 40,781 12,000 352 10,457
2014 50,000 2.000% 16,655 66,655 69,988 13,254 39,473 13,000 -4,261 6,196
2015 50,000 2.000% 15,655 65,655 68,938 13,254 38,165 15,000 -2,519 _ 3,677
2016 50,000 2.000% 14,655 64,655 67,888 13,254 36,857 17,000 -777 2,901
2017 50,000 2.000% 13,655 63,655 66,838 13,254 35,549 19,000 966 3,866
2018 50,000 2.100% 12,655 62,655 65,788 13,254 34,242 21,000 2,708 6,574
2019 55,000 2.300% 11,605 66,605 69,935 13,254 32,934 23,000 -748 5,827
2020 55,000 2.450% 10,340 65,340 68,607 13,254 31,626 25,000 1,273 7,099
2021 55,000 2.900% 8,993 63,993 67,192 13,254 30,318 25,000 1,380 8,479
2022 55,000 2.900% 7,398 62,398 65,517 13,254 29,010 25,000 1,747 10,226
2023 60,000 2.900% 5,803 65,803 69,093 13,254 27,702 26,000 -2,136 8,090
2024 60,000 3.250% 4,063 64,063 67,266 13,254 26,395 26,000 -1,617 6,473
2025 65,000 3.250% 2,113 67,113 70,468 13,254 25,087 26,000 -6,127 345
790,000 183,791 973,791 1,022,239 14,516 198,810 515,258 294,000 345
Appiication of Fund 2010 16th Avenue Improvement Project (A)
16th Avenue Improvement Project (A) 753,617 Street, Curb & Gutter Costs 350,141
Less: Reoffering Premium -8,369 Storm Sewer Improvements 198,811
Total Hard Costs 745,248 Water Service 1,465
Add: Issuance Expenses Geotechnical Investigation 1,000
Underwriter's Discount @1.93% 15,247 Legal /Admin 14,000
Est. Capitalized Interest (10 Months) 14,516 Est. Engineering Fees 133,200
Est. Fairness Opinion 1,000 Est. Contingencies 55,000
Est. Misc. 100
Est. Bond Counsel Fee 3,500 Total Improvement Costs: 753,617
Est. Rating Fee 4,200
Est. County Auditor /Misc. 250
Registrar /Paying Agent Fee 7,420 Bond Information
Total 791,481
Less: Investment Income -1,150 Bonds Dated: 9/1/2010
Bonds Mature: 12/1/11 Through 12/1/23
Rounded For Issuance I 790,0001 Interest Payments: 6/1/11 & Semiannually Each 12/1 & 6/1 Thereafter.
Call Option: Callable 12/1/2018 @ Par Plus Accrued Interest.
Registrar /Pay Agent: Northland Trust Services
Purchase Price: $774,753
Assessment.Incorme Average Coupon: 2.6743%
Net Effective Rate: 2.8962%
Par Amount of Bond Issue: $790,000 Bond Sale Date: September 2, 2010.
Percentage of Project Assessed: 46.63% Est. Bond Closing Date September 28, 2010.
Interest Rate on Assessments: 5.50% Bond Counsel: Briggs & Morgann
First Installment Collection: 2011 Bid Opening: July 8, 2010.
Number of Annual Installments: 15 Assessment Hearing: July 12, 2010.
Start Date of Assessments: 11/30/2010 Construction Begins: August 30, 2010.
Monte Eastvold, V.P., Northland Securities, Inc. Dated: 9/2/2010
16th Ave Final
CITY OF ST. JOSEPH, MINNESOTA
ASSESSMENT INCOME
16th Avenue : • Average
Assessments :: Assessment/t
.............. ...................... ......................
Estimated Estimated
Assessment Interest Assessment Assessment Interest Assessment
Year Principal 5.50% Income Principal 5.50% Income
2010 0 1,635 1,635 0 54 54
2011 23,778.85 19,618 43,396 781.40 645 1,426
2012 23,778.85 18,310 42,089 781.40 602 1,383
2013 23,778.85 17,002 40,781 781.40 559 1,340
2014 23,778.85 15,694 39,473 781.40 516 1,297
2015 23,778.85 14,386 38,165 781.40 473 1,254 _
2016 23,778.85 13,078 36,857 781.40 430 1,211
2017 23,778.85 11,771 35,549 781.40 387 1,168
2018 23,778.85 10,463 34,242 781.40 344 1,125
2019 23,778.85 9,155 32,934 781.40 301 1,082
2020 23,778.85 7,847 31,626 781.40 258 1,039
2021 23,778.85 6,539 30,318 781.40 215 996
2022 23,778.85 5,231 29,010 781.40 172 953
2023 23,778.85 3,924 27,702 781.40 129 910
2024 23,778.85 2,616 26,395 781.40 86 867
2025 23,778.85 1,308 25,087 781.40 43 824
356,682.75 158,575 515,258 11,721.00 5,211 16,932
Tax tiripact Analysis:
Annual Tax Residential Market Value
Est. Tax Capacity Capacity $100,000 $150, 000 $200, 000
Tax Value Incr. Rate Net Tax Capacity
Year Levy 1.00% Increase $1,000 $1,500 $2,000
2010 0 3,664,663
2011 10,000 3,701,310 0.27% 2.70 4.05 5.40
2012 11,000 3,738,323 0.29% 2.94 4.41 5.88
2013 12,000 3,775,706 0.32% 3.18 4.77 6.36
2014 13,000 3,813,463 0.34% 3.41 5.11 6.82
2015 15,000 3,851,598 0.39% 3.89 5.84 7.79
2016 17,000 3,890,114 0.44% 4.37 6.56 8.74
2017 19,000 3,929,015 0.48% 4.84 7.25 9.67
2018 21,000 3,968,305 0.53% 5.29 7.94 10.58
2019 23,000 4,007,988 0.57% 5.74 8.61 11.48
2020 25,000 4,048,068 0.62% 6.18 9.26 12.35
2021 25,000 4,088,549 0.61% 6.11 9.17 12.23
2022 25,000 4,129,434 0.61% 6.05 9.08 12.11
2023 26,000 4,170,728 0.62% 6.23 9.35 12.47
2024 26,000 4,212,436 0.62% 6.17 9.26 12.34
2025 26,000 4,254,560 0.61% 6.11 9.17 12.22
294,000 Average Annual Incr: $4.88 $7.32 $9.76
Average Monthly Incr: $0.41 $0.61 $0.81
Monte Eastvold, V.P., Northland Securities, Inc. Dated: 9/2/2010