HomeMy WebLinkAbout[07] Bond SaleMEETING DATE: June 5, 2014
Council Agenda Item 07
AGENDA ITEM: Bond Sale - Monte Eastvold, Northland Securities, Inc.
SUBMITTED BY: Finance
BOARD /COMMISSION /COMMITTEE RECOMMENDATION: None
PREVIOUS COUNCIL ACTION: Council awarded bids and adopted the assessment rolls for the
2014 Park Terrace improvement project. Council awarded bids for the water tower improvements and
sewer Main Lift Station improvements.
BACKGROUND INFORMATION: Monte Eastvold, Northland Securities, will be present to discuss
the bond issue for the 2014 Park Terrace improvements and 2014 utility improvements. The bond issue
has two parts, one for each project. The bond will be issued as one issue to save on financing costs. The
funding sources for each project include debt levy, special assessments and utility revenues.
Standards & Poors updated the City's bond rating. The City maintained an A+ rating stable rating. 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.
The most recent estimated amortization schedules are attached. The interest rates have decreased since
the schedules were last run. Monte will bring in the revised schedules to the meeting. The resolution
reflects Friday's estimates for closing costs.
BUDGET /FISCAL IMPACT: $2,715,000 General Obligation Bonds
ATTACHMENTS: RCA — Bond Sale
Resolution 2014 -023 Authorize Bond Issue
2014 GO Street Improvement Bond Schedule
2014 GO Utility Revenue Bond Schedule
Standards & Poors Rating Summary
REQUESTED COUNCIL ACTION: Authorize execution of Resolution 2014 -023 providing for the
issuance and sale of the $2,715,000 General Obligation Bonds, Series 2014, pledging for the security
thereof special assessments and net revenues and levying a tax for the payment thereof.
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EXTRACT OF MINUTES OF A MEETING
CITY COUNCIL OF THE
CITY OF ST. JOSEPH, MINNESOTA
HELD: JUNE 5, 2014
Pursuant to due call, a regular or special meeting of the City Council of the City of St.
Joseph, Stearns County, Minnesota, was duly held at the City Hall on June 5, 2014, at 7:00 P.M.,
for the purpose, in part, of authorizing the issuance and awarding the sale of $2,715,000 General
Obligation Bonds, Series 2014A.
The following members were present:
and the following were absent:
Member introduced the following resolution and moved its adoption:
RESOLUTION NO. 2014 -023
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $2,715,000 GENERAL
OBLIGATION BONDS, SERIES 2014A, PLEDGING FOR THE SECURITY THEREOF
SPECIAL ASSESSMENTS AND NET REVENUES AND LEVYING A TAX FOR THE
PAYMENT THEREOF
A. WHEREAS, the City of St. Joseph, Minnesota (the "City "), owns and operates a
municipal sanitary sewer utility system (the "Sewer System "), and a municipal water system (the
"Water System" and together with the Sewer System, the "System "), as separate revenue
producing public utilities and the net revenues of the Sewer System are pledged to the payment
of the City's outstanding (i) $3,010,000 original principal amount of General Obligation
Crossover Refunding Bonds, Series 2009A, dated March 1, 2009, $455,000 designated as the
"Sewer Revenue Refunding Portion" (the "Outstanding 2009 Sewer Bonds ") and (ii) 2,280,000
original principal amount of General Obligation Bonds, Series 201 IA, dated November 1, 2011,
$225,000 designated as the "System Portion" (the "Outstanding 2011 Sewer Bonds "), and (iii)
$2,545,000 original principal amount of General Obligation Bonds, Series 2013A, dated
September 1, 2013, $1,875,000 designated as the System Portion (the "Outstanding 2013 Sewer
Bonds" and together with the Outstanding 2009 Sewer Bonds, the Outstanding 2011 Sewer
Bonds, the "Outstanding Sewer Bonds "); and the net revenues of the Water System are pledged
to the payment of the City's (iv) $4,595,000 General Obligation Water Revenue Bonds, Series
2005D, dated December 1, 2005 (the "2005 Water Revenue Bonds "), and (v) $3,575,000 General
Obligation Water Revenue Bonds, Series 2006A, dated January 1, 2006 (the "2006 Water
Revenue Bonds "), and (vi) $425,000 General Obligation Water Revenue Refunding Bonds,
Series 2009C, dated December 1, 2009 (the "2009 Water Revenue Bonds "), and (vii) $4,860,000
original principal amount of General Obligation Water Revenue Crossover Refunding Bonds,
Series 2012A, dated April 1, 2012 (the "2012 Water Revenue Bonds" and together with the 2005
Water Revenue Bonds, the 2006 Water Revenue Bonds and the 2009 Water Revenue Bonds, the
"Outstanding Water Revenue Bonds "); and
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B. WHEREAS, the City Council has heretofore determined and declared that it is
necessary and expedient to issue $2,720,000 General Obligation Bonds, Series 2014A (the
"Bonds" or individually a "Bond "), pursuant to Minnesota Statutes, Chapters 429 and 475 to
finance the construction of various public improvements within the City (the "Improvements ")
and Chapters 475 and 444 to finance improvements to the System (the "System Improvements ");
and
C. 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
Improvements or all their components by general nature, estimated cost, and area to be assessed;
and
D. WHEREAS, the City has retained Blue Rose Capital Advisors, Inc., in
Minneapolis, Minnesota, as its independent financial advisor for the sale of the Bonds and was
therefore authorized to sell the Bonds by private negotiation in accordance with Minnesota
Statutes, Section 475.60, Subdivision 2(9); and
E. 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 Proposal. 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; Term Bond Option. The Bonds
shall be dated June 15, 2014, as the date of original issue and 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
2015
2024
2016
2025
2017
2026
2018
2027
2019
2028
2020
2029
2021
2030
2022
2031
2023
2032
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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 "). The aggregate principal amount of $ maturing in each of
the years and amounts hereinafter set forth are issued to finance the System Improvements (the
"System Portion ")
Improvement Portion
Year Amount
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
System Portion
Amount Total Amount
If Bonds are prepaid, the prepayments shall be allocated to the portions of debt service
(and hence allocated to the payment of Bonds treated as relating to a particular portion of debt
service) as provided in this paragraph. If the source of prepayment moneys is the general fund of
the City, or other generally available source, the prepayment may be allocated to any portions of
debt service in such amounts as the City shall determine. If the source of the prepayment is
special assessments pledged to the Improvements, the prepayment shall be allocated to the
Improvement Portion of debt service. If the source of a prepayment is excess net revenues of the
System pledged to the System Improvements, the prepayment shall be allocated to the System
Portion of debt service.
(c) Book Entry Only System. The Depository Trust Company, a limited purpose
trust company organized under the laws of the State of New York or any of its successors or its
successors to its functions hereunder (the "Depository ") will act as securities depository for the
Bonds, and to this end:
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(i) The Bonds shall be initially issued and, so long as they remain in book
entry form only (the "Book Entry Only Period "), shall at all times be in the form of a
separate single fully registered Bond for each maturity of the Bonds; and for purposes of
complying with this requirement under paragraphs 5 and 10 Authorized Denominations
for any Bond shall be deemed to be limited during the Book Entry Only Period to the
outstanding principal amount of that Bond.
(ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond
register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE
& CO., as the nominee (it or any nominee of the existing or a successor Depository, the
"Nominee ").
(iii) With respect to the Bonds neither the City nor the Bond Registrar shall
have any responsibility or obligation to any broker, dealer, bank, or any other financial
institution for which the Depository holds Bonds as securities depository (the
"Participant ") or the person for which a Participant holds an interest in the Bonds shown
on the books and records of the Participant (the "Beneficial Owner "). Without limiting
the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have
any such responsibility or obligation with respect to (A) the accuracy of the records of the
Depository, the Nominee or any Participant with respect to any ownership interest in the
Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than
the Depository, of any notice with respect to the Bonds, including any notice of
redemption, or (C) the payment to any Participant, any Beneficial Owner or any other
person, other than the Depository, of any amount with respect to the principal of or
premium, if any, or interest on the Bonds, or (D) the consent given or other action taken
by the Depository as the Registered Holder of any Bonds (the "Holder "). For purposes of
securing the vote or consent of any Holder under this Resolution, the City may, however,
rely upon an omnibus proxy under which the Depository assigns its consenting or voting
rights to certain Participants to whose accounts the Bonds are credited on the record date
identified in a listing attached to the omnibus proxy.
(iv) The City and the Bond Registrar may treat as and deem the Depository to
be the absolute owner of the Bonds for the purpose of payment of the principal of and
premium, if any, and interest on the Bonds, for the purpose of giving notices of
redemption and other matters with respect to the Bonds, for the purpose of obtaining any
consent or other action to be taken by Holders for the purpose of registering transfers
with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as
paying agent hereunder, shall pay all principal of and premium, if any, and interest on the
Bonds only to the Holder or the Holders of the Bonds as shown on the bond register, and
all such payments shall be valid and effective to fully satisfy and discharge the City's
obligations with respect to the principal of and premium, if any, and interest on the Bonds
to the extent of the sum or sums so paid.
(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 hereof,
references to the Nominee hereunder shall refer to such new Nominee.
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(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
special record date for such consent or other action. The City or the Bond Registrar shall,
to the extent possible, give the Depository notice of such special record date not less than
fifteen calendar days in advance of such special record date to the extent possible.
(ix) Any successor Bond Registrar in its written acceptance of its duties under
this Resolution and any paying agency /bond registrar agreement, shall agree to take any
actions necessary from time to time to comply with the requirements of the Letter of
Representations.
(x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of
surrendering the Bonds for a Bond of a lesser denomination as provided in paragraph 5,
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.
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(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 (d) 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. Purposes. The Improvement Portion of the Bonds shall provide funds to finance
the Improvements (the "Improvement Project "); the System Portion of the Bonds shall provide
funds to finance the System Improvements (the "System Improvements Project" and, together
with the Improvement Project, the "Project "). The total cost of the Project, which shall include
all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to
the amount of the Bonds. The City covenants that it shall do all things and perform all acts
required of it to assure that work on the Project proceeds with due diligence to completion and
that any and all permits and studies required under law for the Project are obtained.
4. Interest. The Bonds shall bear interest payable semiannually on June 1 and
December 1 of each year (each, an "Interest Payment Date "), commencing December 1, 2014,
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
2015
2024
2016
2025
2017
2026
2018
2027
2019
2028
2020
2029
2021
2030
2022
2031
2023
2032
6
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5. Redemption. All Bonds maturing on December 1, 2022 and thereafter, shall be
subject to redemption and prepayment at the option of the City on December 1, 2021, and on any
date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of
the Bonds subject to prepayment. If redemption is in part, the maturities and the principal
amounts within each maturity to be redeemed shall be determined by the City; and if only part of
the Bonds having a common maturity date are called for prepayment, the specific Bonds to be
prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the redemption date, and interest thereon shall cease to
accrue from and after the redemption date. Mailed notice of redemption shall be given to the
paying agent and to each affected registered holder of the Bonds thirty days prior to the date
fixed for redemption.
To effect a partial redemption of Bonds having a common maturity date, the Bond
Registrar prior to giving notice of redemption shall assign to each Bond having a common
maturity date a distinctive number for each $5,000 of the principal amount of 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 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 Re isg tray. 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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ra
UNITED STATES OF AMERICA
STATE OF MINNESOTA
STEARNS COUNTY
CITY OF ST. JOSEPH
GENERAL OBLIGATION BOND, SERIES 2014A
Interest Rate Maturity Date Date of Original Issue CUSIP
% December 1, June 15, 2014
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, unless called for earlier redemption, in the manner hereinafter set forth, the
principal amount specified above, on the maturity date specified above, and to pay interest
thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date "),
commencing December 1, 2014, 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 "). 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
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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,
2022, and thereafter, are subject to redemption and prepayment at the option of the Issuer on
December 1, 2021, and on any date thereafter at a price of par plus accrued interest. Redemption
may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the
maturities and the principal amounts within each maturity to be redeemed shall be determined by
the Issuer; and if only part of the Bonds having a common maturity date are called for
prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar.
Bonds or portions thereof called for redemption shall be due and payable on the redemption date,
and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of
redemption shall be given to the paying agent and to each affected registered holder of the Bonds
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 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 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 Issuer or Bond Registrar so requires, a written instrument of transfer in form
satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's
attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new
Bond or Bonds having the same stated maturity and interest rate and of any Authorized
Denomination or Denominations, as requested by the Holder, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered.
Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal
amount of $2,720,000, 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 June 5, 2014 (the "Resolution "), for the purpose of providing money to
finance various municipal improvement projects within the jurisdiction of the Issuer. This Bond
is payable out of the General Obligation Bonds, Series 2014A Fund of the Issuer. This Bond
constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full
payment of its principal, premium, if any, and interest when the same become due, the full faith
and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged.
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Denominations; Exchange; Resolution. The Bonds are issuable solely in fully registered
form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully
registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the
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 office of the Bond Registrar.
Transfer. This Bond is transferable by the Holder in person or the Holder's attorney duly
authorized in writing at the 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 (except as otherwise provided herein with respect to the Record Date) and for all
other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond
Registrar shall be affected by notice to the contrary.
Authentication. This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security unless the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Qualified Tax - Exempt Obli ag tion. This Bond has been designated by the Issuer as a
"qualified tax - exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things
required by the Constitution and laws of the State of Minnesota to be done, to happen and to be
performed, precedent to and in the issuance of this Bond, have been done, have happened and
have been performed, in regular and due form, time and manner as required by law; that the
Issuer has covenanted and agreed with the Holders of the Bonds that it will impose and collect
charges for the service, use and availability of its sanitary sewer system and municipal water
system (together, the "System ") at the times and in amounts necessary to produce net revenues,
together with other sums pledged to the payment of the System Portion of the Bonds, as defined
in the Resolution, adequate to pay all principal and interest when due on the System Portion of
the Bonds; and that the Issuer will levy a direct, annual, irrepealable ad valorem tax upon all of
the taxable property of the Issuer, without limitation as to rate or amount, for the years and in
amounts sufficient to pay the principal and interest on System Portion of the Bonds as they
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respectively become due, if the net revenues from the System, and any other sums irrevocably
appropriated to the Debt Service Account are insufficient therefor; and that this Bond, together
with all other debts of the Issuer outstanding on the date of original issue hereof and the date of
its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory
limitation of indebtedness.
IN WITNESS WHEREOF, the City of St. Joseph, Stearns County, Minnesota, by its City
Council has caused this Bond to be executed on its behalf by the facsimile signatures of its
Mayor and its Administrator, the corporate seal of the Issuer having been intentionally omitted as
permitted by law.
Date of Registration:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
NORTHLAND TRUST SERVICES,
INC.
Minneapolis, Minnesota,
Bond Registrar
in
Authorized Signature
Registrable by: NORTHLAND TRUST
SERVICES, INC.
Payable at: NORTHLAND TRUST
SERVICES, INC.
CITY OF ST. JOSEPH,
STEARNS COUNTY, MINNESOTA
/s/ Facsimile
Mayor
/s/ Facsimile
Administrator
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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
(State)
Transfers to Minors Act
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:
(Include information for all joint owners if the Bond is held by joint account.)
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PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s) and in the amount(s) as follows:
Date Amount Authorized signature of Holder
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8. Execution. The Bonds shall be in typewritten form, shall be executed on behalf of
the City by the signatures of its Mayor and Administrator 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
the Bond, substantially in the form hereinabove set forth, shall have been duly executed by the
Bond Registrar. 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 June 15, 2014. The Certificate of
Authentication so executed on each Bond shall be conclusive evidence that it has been
authenticated and delivered hereunder.
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 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 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. There is hereby established a special fund to be designated
"General Obligation Bonds, Series 2014A Fund" (the "Fund ") to be administered and maintained
by the Finance Director as a bookkeeping account separate and apart from all other funds
maintained in the official financial records of the City. The Fund shall be maintained in the
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manner herein specified until all of the Bonds and the interest thereon have been fully paid. The
Operation and Maintenance Accounts heretofore established by the City shall continue to be
maintained in the manner heretofore provided by the City. All moneys for the System remaining
after paying or providing for the items set forth in the resolution establishing the Operation and
Maintenance Accounts shall constitute or are referred to as "net revenues" until the System
Portion of the Bonds and the Outstanding Bonds have been paid. There shall be maintained in
the Fund the following separate accounts to which shall be credited and debited all income and
disbursements of the System as hereinafter set forth. The Finance Director and all officials and
employees concerned therewith shall establish and maintain financial records of the receipts and
disbursements of the System in accordance with this resolution. In such records there shall be
established accounts or accounts shall continue to be maintained as the case may be, of the Fund
for the purposes and in the amounts as follows:
(a) Construction Account. To the Construction Account there shall be credited the
proceeds of the sale of the Bonds, less any accrued interest, 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 and the System Improvements, including the cost of any
construction or other 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 Bonds may also be used to the extent necessary to pay interest on the Bonds due
prior to the anticipated date of commencement of the collection of taxes, special assessments or
net revenues 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 to the Debt
Service Account or may be transferred by the Council to 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.
(b) Debt Service Account. There shall be maintained separate subaccounts in the
Debt Service Account to be designated the "Improvement Project Debt Service Subaccount ", and
the "System Improvements Project Debt Service Subaccount ". There are hereby irrevocably
appropriated and pledged to, and there shall be credited to the separate subaccounts of the Debt
Service Account:
(i) Improvement Project Debt Service Subaccount. To the Improvement
Project Debt Service Subaccount there shall be credited: (A) 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, (B) a pro rata share of any accrued interest received upon delivery of the
Bonds; (C) available funds of the City in the amount of $ sufficient to pay
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interest due on the Improvement Portion of the Bonds on or before December 1, 2014);
(D) any collections of all taxes herein or hereinafter levied for the payment of the
Improvement Portion of the Bonds and interest thereon; (E) a pro rata share of all funds
remaining in the Construction Account after completion of the Project and payment of
the costs thereof, (F) all investment earnings on funds held in the Improvement Project
Debt Service Subaccount; and (G) any and all other moneys which are properly available
and are appropriated by the governing body of the City to the Improvement Project Debt
Service Subaccount. The Improvement Project Debt Service Subaccount shall be used
solely to pay the principal and interest and any premium for redemption of the
Improvement Portion of the Bonds and any other general obligation bonds of the City
hereafter issued by the City and made payable from said subaccount as provided by law.
(ii) System Improvements Project Debt Service Subaccount. To the System
Improvements Project Debt Service Subaccount there shall be credited: (A) the net
revenues of the System not otherwise pledged and applied to the payment of other
obligations of the City, in an amount, together with other funds which may herein or
hereafter from time to time be irrevocably appropriated to the System Improvements
Project Debt Service Subaccount, sufficient to meet the requirements of Minnesota
Statutes, Section 475.61 for the payment of the principal and interest of the System
Portion of the Bonds; (B) a pro rata share of any accrued interest received upon delivery
of the Bonds; (C) any collections of all taxes which may hereafter be levied in the event
that the net revenues of the System and other funds herein pledged to the payment of the
principal and interest on the System Portion of the Bonds are insufficient therefore; (D) a
pro rata share of all funds remaining in the Construction Account after completion of the
Project and payment of the costs thereof, (E) all investment earnings on funds held in the
System Improvements Project Debt Service Subaccount; and (F) any and all other
moneys which are properly available and are appropriated by the governing body of the
City to the System Improvements Project Debt Service Subaccount. The System
Improvements Project Debt Service Subaccount shall be used solely to pay the principal
and interest and any premium for redemption of the System Portion of the Bonds and any
other General Obligation Bonds of the City hereafter issued by the City and made
payable from said subaccount as provided by law.
16. Covenants Relating to the Improvement Portion of the Bonds.
(a) Special Assessments. It is hereby determined that no less than twenty percent 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 benefited by any of the Improvements. The
City hereby covenants and agrees that it will let all construction contracts not heretofore let
within one 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 special 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
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the making of the special 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 special assessments a valid and binding lien upon such
property. . 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 a rate per annum not greater than the maximum
permitted by law and not less than the rates per annum shown opposite their collection years
specified below:
Improvement
Designation
Park Terrace Improvements
Levy Collection
Years Years
2015 -2029 2016 -2030
Amount Rate
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:
Levy Years Collection Years Amount
2014 -2029 2015 -2030 See attached schedule
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 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 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.
17. Covenants Relating to the System Portion of the Bonds.
(a) Sufficiency of Net Revenues; Coverage Test. It is hereby found, determined and
declared that the net revenues of the System are sufficient in amount to pay when due the
principal of and interest on the System Portion of the Bonds and a sum at least five percent in
excess thereof; and the net revenues of the Sewer System are sufficient in amount to pay when
due the principal of and interest on the Outstanding Sewer Bonds and a sum at least five percent
in excess thereof; and the net revenues of the Water System are sufficient in amount to pay when
due the principal of and interest on the Outstanding Water bonds and a sum at least five percent
in excess thereof; and the net revenues of the System are hereby pledged for the payment of the
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System Portion of the Bonds on a parity lien with the Outstanding Sewer Bonds and the
Outstanding Water Bonds and shall be applied for that purpose, but solely to the extent required
to meet the principal and interest requirements of the System Portion of the Bonds as the same
become due. As used herein the term net revenues means the gross revenues derived by the City
from the operation of the System, including all charges for service, use, availability, and
connection to the System, and all monies received from the sale of any facilities or equipment of
the System or any by- products thereof, less all normal, reasonable, or current costs of owning,
operating, and maintaining the System. Nothing contained herein shall be deemed to preclude
the City from making further pledges and appropriations of the net revenues of the System for
the payment of other or additional obligations of the City, provided that it has first been
determined by the City Council that the estimated net revenues of the System will be sufficient in
addition to all other sources, for the payment of the System Portion of the Bonds and such
additional obligations and any such pledge and appropriation of the net revenues may be made
superior or subordinate to, or on a parity with the pledge and appropriation herein.
(b) Excess Net Revenues. Net revenues in excess of those required for the foregoing
may be used for any proper purpose.
(c) Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes,
Section 444.075, the City hereby covenants and agrees with the Holders of the Bonds that it will
impose and collect charges for the service, use, availability and connection to the System at the
times and in the amounts required to produce net revenues adequate to pay all principal and
interest when due on the System Portion of the Bonds and the Outstanding Sewer Bonds and the
Outstanding Water Bonds. Minnesota Statutes, Section 444.075, Subdivision 2, provides as
follows: "Real estate tax revenues should be used only, and then on a temporary basis, to pay
general or special obligations when the other revenues are insufficient to meet the obligations."
18. 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 to the MSRB notice of the occurrence of certain
events with respect to the Bonds in not more than ten (10) business days after the occurrence of
the event, in accordance with the Undertaking.
(c) Provide or cause to be provided 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, in
not more than ten (10) business days following such occurrence.
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(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 of the City, 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.
19. 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 discharge its obligations with respect to any prepayable Bonds called
for redemption on any date when they are prepayable according to their terms, by depositing
with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full,
provided that notice of redemption thereof has been duly given. 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.
20. Compliance With Reimbursement Bond Regulations. The provisions of this
paragraph are intended to establish and provide for the City's compliance with United States
Treasury Regulations Section 1.150 -2 (the "Reimbursement Regulations ") applicable to the
"reimbursement proceeds" of the Bonds, being those portions thereof which will be used by the
City to reimburse itself for any expenditure which the City paid or will have paid prior to the
Closing Date (a "Reimbursement Expenditure ").
The City hereby certifies and /or covenants as follows:
(a) Not later than sixty days after the date of payment of a Reimbursement
Expenditure, the City (or person designated to do so on behalf of the City) has made or will have
made a written declaration of the City's official intent (a "Declaration ") which effectively (i)
states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement
Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional
description of the property, project or program to which the Declaration relates and for which the
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Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the
general functional purpose thereof from which the Reimbursement Expenditure was to be paid
(collectively the "Project "); and (iii) states the maximum principal amount of debt expected to be
issued by the City for the purpose of financing the Project; provided, however, that no such
Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for
the Project, defined in the Reimbursement Regulations to include engineering or architectural,
surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not
exceed twenty percent of the "issue price" of the Bonds, and (ii) a de minimis amount of
Reimbursement Expenditures not in excess of the lesser of $100,000 or five percent of the
proceeds of the Bonds.
(b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of
the Bonds or any of the other types of expenditures described in Section 1.150- 2(d)(3) of the
Reimbursement Regulations.
(c) The "reimbursement allocation" described in the Reimbursement Regulations for
each Reimbursement Expenditure shall and will be made forthwith following (but not prior to)
the issuance of the Bonds and in all events within the period ending on the date which is the later
of three years after payment of the Reimbursement Expenditure or one year after the date on
which the Project to which the Reimbursement Expenditure relates is first placed in service.
(d) Each such reimbursement allocation will be made in a writing that evidences the
City's use of Bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30
days after the Bonds are issued, shall be treated as made on the day the Bonds are issued.
Provided, however, that the City may take action contrary to any of the foregoing
covenants in this paragraph upon receipt of an opinion of its Bond Counsel for the Bonds stating
in effect that such action will not impair the tax - exempt status of the Bonds.
21. General Obligation Pledge. For the prompt and full payment of the principal 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 net revenues of the
System appropriated and pledged to the payment of principal and interest on the System Portion
of the Bonds, together with other funds irrevocably appropriated to the System Improvements
Project Debt Service Subaccount herein established, shall at any time be insufficient to pay such
principal and interest when due, the City covenants and agrees to levy, without limitation as to
rate or amount an ad valorem tax upon all taxable property in the City sufficient to pay such
principal and interest as it becomes due. If the balance in the Debt Service Account is ever
insufficient to pay all principal and interest then due on the Bonds and any other bonds payable
therefrom, the deficiency shall be promptly paid out of any other funds of the City which are
available for such purpose, and such other funds may be reimbursed with or without interest
from the Debt Service Account when a sufficient balance is available therein.
22. Certificate of Registration. A certified copy of this resolution is hereby directed
to be filed in the office of the County Auditor of Stearns County, together with such other
information as the County Auditor shall require, and to obtain the County Auditor's Certificate
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that the Bonds have been entered in the Bond Register and the tax levies required by law have
been made.
23. 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.
24. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby
covenants not to use the proceeds of the Bonds or to use the Project, 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.
25. 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 small issuer 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 (i) the Bonds are issued by a governmental unit with general taxing
powers; (ii) no Bond is a private activity bond; (iii) 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
(iv) the aggregate face amount of all tax exempt bonds (other than private activity bonds) issued
by the City (and all entities subordinate to, or 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.
26. 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;
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(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 2014 will
not exceed $10,000,000;
(e) not more than $10,000,000 of obligations issued by the City during this calendar
year 2014 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.
27. 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
28. Payment of Issuance Expenses. The City authorizes the Purchaser to forward the
amount of Bond proceeds allocable to the payment of issuance expenses to the Bond Registrar
on the closing date for further distribution as directed by the Purchaser.
29. 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.
23
6265105v1
STATE OF MINNESOTA
COUNTY OF STEARNS
CITY OF ST. JOSEPH
I, the undersigned, being the duly qualified and acting Administrator 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 authorizing the issuance and awarding
the sale of $2,715,000 General Obligation Bonds, Series 2014A.
WITNESS my hand on June 5, 2014.
Administrator
24
6265105v1
Park Terrace 2014
CITY OF ST. JOSEPH, MINNESOTA
GENERAL OBLIGATION STREET IMPROVEMENT BONDS OF 2014
Conti Pavman s; Revenue SQUrcesI 1 Cash Flovu:
Year
(12 -1)
Principal
Est.
Interest
Rate
Interest
Total
Debt
Payment
Statutory
5.00%
Coverage
Sewer
Revenues
CIP
Reserves
Special
Assessment
Income
Tax
Levy
Annual
Surplus/
Deficit
Cumulative
Balance
2014
0
0.000%
27,129
27,129
27,129
0
70,000
0
0
42,871
42,871
2015
0
0.000%
54,258
54,258
54,258
0
0
2,124
13,000
- 39,133
3,738
2016
115,000
1.200%
54,258
169,258
177,720
0
0
56,267
120,000
-1,453
2,285
2017
115,000
1.350%
52,878
167,878
176,271
0
0
54,573
120,000
-1,699
586
2018
120,000
1.650%
51,325
171,325
179,891
0
0
52,882
128,000
991
1,577
2019
120,000
1.900%
49,345
169,345
177,812
0
0
51,189
130,000
3,377
4,954
2020
125,000
2.100%
47,065
172,065
180,668
0
0
49,495
132,000
827
5,781
2021
130,000
2.300%
44,440
174,440
183,162
0
0
47,802
134,000
-1,360
4,420
2022
130,000
2.450%
41,450
171,450
180,023
0
0
46,108
136,000
2,086
6,506
2023
135,000
2.650%
38,265
173,265
181,928
0
0
44,415
138,000
486
6,992
2024
140,000
2.800%
34,688
174,688
183,422
0
0
42,721
140,000
-701
6,291
2025
140,000
2.900%
30,768
170,768
179,306
0
0
41,027
142,000
3,721
10,013
2026
145,000
3.000%
26,708
171,708
180,293
0
0
39,333
143,000
2,040
12,053
2027
150,000
3.250%
22,358
172,358
180,975
0
0
37,639
144,000
664
12,717
2028
155,000
3.450%
17,483
172,483
181,107
0
0
35,945
144,000
-1,162
11,555
2029
160,000
3.600%
12,135
172,135
180,742
0
0
34,250
144,000
-2,492
9,063
2030
170,000
3.750%
6,375
176,375
185,194
0
0
32,556
144,000
-8,638
425
2,050,000 610,924 2,660,924 2,789,901
0 70,000 668,326 2,052,0001
425
AO Oil oioo of Funds"
Interest Rate on Assessments:
*0140 Terr a Pro14a 6 tA)
First Installment Collection:
Est. 2014 Park Terrace Project (A)
2,059,343
Est. Construction Costs
1,521,703
Less: CIP Reserve Contribution
- 70,000
Est. Contingency Costs
76,100
Total Hard Costs
1,989,343
Est. Soil Boring Costs
6,550
Add. Issuance Expenses
Est. Engineering Plans /Specs
285,100
Est. Underwriter's Discount @1.96%
40,180
2010 Engineering Feasibility Report
26,890
Est. Capitalized Interest (0 Months)
0
Est. Legal /Administrative
45,000
Est. Financial Advisory Fee
0
Est. Sewer Reconnection Subsidy
98,000
Est. Misc.
0
Est. Bond Counsel Fee
7,000
Est. Total Project Costs
2,059,343
Est. Rating Fee
10,000
Est. County Auditor /O.S. Printing
250
Est. Registrar /Paying Agent Fee
7,125
Total
2,053,898
Less: Investment Income
-1,232
Rounded For Issuance
2,050,000
�3ond InfQrmsZiori�
Bonds Dated:
Bonds Mature:
Interest Payments:
Call Option:
Registrar /Pay Agent:
Purchase Price:
Est. Average Coupon:
Est. Net Effective Rate:
Bond Sale Date:
Est. Bond Closing Date:
Bond Counsel:
6/1/2014
12/1/16 Through 12/1/30
6/1/11 & Each 1211 & 6/1 Thereafter
Callable 12/1/2021 @ Par
Northland Trust Services
$2,009,820
2.9779%
3.1738%
May 28, 2014.
June , 2014.
Briggs & Morgan
Aasessmont Income:
Est. Amount of Assessments:
$461,970
Percentage of Issue Assessed:
22.54%
Interest Rate on Assessments:
5.50%
First Installment Collection:
2016
Number of Annual Installments:
15
Start Date of Assessments:
11/30/2015
Monte Eastvold, V.P., Northland Securities, Inc. Dated: 4/8/2014
Park Terrace 2014
CITY OF ST. JOSEPH, MINNESOTA
ASSESSMENT INCOME
Pik ieXXace� .�
Assessmegts Assessriionts
2,052,0001 Average Annual Incr: $30.34 $45.51 $60.68
Average Monthly Incr: $2.53 $3.79 $5.06
Monte Eastvold, V.P., Northland Securities, Inc. Dated: 4/8/2014
461,970.00
Estimated
0
Estimated
Annual
Tax
Assessment
Interest
Assessment
Assessment
Interest
Assessment
Year
Principal
5.50%
Income
Principal
0.00%
Income
2014
0
0
0
0
Increase
0 0
2015
0.00
2,117
2,117
0.00
0 0
2016
30,798.00
25,408
56,206
0.00
0.33%
0 0
2017
30,798.00
23,714
54,512
0.00
3.05%
0 0
2018
30,798.00
22,021
52,819
0.00
3.02%
0 0
2019
30,798.00
20,327
51,125
0.00
3.19%
0 0
2020
30,798.00
18,633
49,431
0.00
3.20%
0 0
2021
30,798.00
16,939
47,737
0.00
3.22%
0 0
2022
30,798.00
15,245
46,043
0.00
3.24%
0 0
2023
30,798.00
13,551
44,349
0.00
3.25%
0 0
2024
30,798.00
11,857
42,655
0.00
3.27%
0 0
2025
30,798.00
10,163
40,961
0.00
3.28%
0 0
2026
30,798.00
8,469
39,267
0.00
3.30%
0 0
2027
30,798.00
6,776
37,574
0.00
3.29%
0 0
2028
30,798.00
5,082
35,880
0.00
3.28%
0 0
2029
30,798.00
3,388
34,186
0.00
3.24%
0 0
2030
1 30,798.00
1,694
32,4921
0.00
3.21%
0 0
2,052,0001 Average Annual Incr: $30.34 $45.51 $60.68
Average Monthly Incr: $2.53 $3.79 $5.06
Monte Eastvold, V.P., Northland Securities, Inc. Dated: 4/8/2014
461,970.00
205,384 667,3541 0.00 0
Tax I* aC1 ..... .
...:.:.:.:.. t:Arira� sfis;
0
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
2014
0
3,861,182
2015
13,000
3,899,794
0.33%
3.33
5.00
6.67
2016
120,000
3,938,792
3.05%
30.47
45.70
60.93
2017
120,000
3,978,180
3.02%
30.16
45.25
60.33
2018
128,000
4,017,961
3.19%
31.86
47.79
63.71
2019
130,000
4,058,141
3.20%
32.03
48.05
64.07
2020
132,000
4,098,722
3.22%
32.21
48.31
64.41
2021
134,000
4,139,710
3.24%
32.37
48.55
64.74
2022
136,000
4,181,107
3.25%
32.53
48.79
65.05
2023
138,000
4,222,918
3.27%
32.68
49.02
65.36
2024
140,000
4,265,147
3.28%
32.82
49.24
65.65
2025
142,000
4,307,799
3.30%
32.96
49.45
65.93
2026
143,000
4,350,877
3.29%
32.87
49.30
65.73
2027
144,000
4,394,385
3.28%
32.77
49.15
65.54
2028
144,000
4,438,329
3.24%
32.44
48.67
64.89
2029
144,000
4,482,712
3.21%
32.12
48.19
64.25
2030
144,000
4,527,540
3.18%
31.81
47.71
63.61
2,052,0001 Average Annual Incr: $30.34 $45.51 $60.68
Average Monthly Incr: $2.53 $3.79 $5.06
Monte Eastvold, V.P., Northland Securities, Inc. Dated: 4/8/2014
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Utility 18
CITY OF ST. JOSEPH, MINNESOTA
GENERAL OBLIGATION UTILITY REVENUE BONDS OF 2014
avenue Sources:
WA
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Sewer Water
Revenues Revenues
0
Bond Payments.-
7,500
49,000
7,500
48,000
Estimated
47,000
Total
Statutory
Funds-
(12-1)
Interest
46,000
Debt
5.00%
On
'rinci a/
Rate
Interest
Payment
Coverage
Hand
0
0.00%
9,060
9,060
9,060
9,060
35,000
1.00%
18,120
53,120
55,776
6,000
35,000
1.20%
17,770
52,770
55,409
0
35,000
1.35%
17,350
52,350
54,968
35,000
1.65%
16,878
51,878
54,471
35,000
1.90%
16,300
51,300
53,865
35,000
2.10%
15,635
50,635
53,167
35,000
2.30%
14,900
49,900
52,395
35,000
2.45%
14,095
49,095
51,550
35,000
2.65%
13,238
48,238
50,649
35,000
2.80%
12,310
47,310
49,676
35,000
2.90%
11,330
46,330
48,647
35,000
3.00%
10,315
45,315
47,581
40,000
3.25%
9,265
49,265
51,728
40,000
3.45%
7,965
47,965
50,363
40,000
3.60%
6,585
46,585
48,914
40,000
3.75%
5,145
45,145
47,402
45,000
4.00%
3,645
48,645
51,077
45,000
4.10%
1,845
46,845
49,187
0
0.00%
0
0
0
0
0.00%
0
0
0
avenue Sources:
WA
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Sewer Water
Revenues Revenues
0
0
7,500
49,000
7,500
48,000
7,500
47,000
7,500
47,000
7,500
46,500
7,500
46,000
7,000
45,000
6,500
45,000
6,000
44,500
6,000
44,000
5,500
44,000
5,500
44,000
5,500
44,000
5,500
44,000
5,500
44,000
5,500
43,500
6,000
43,000
6,000
43,000
0
0
0
0
Cash Flow:
Annual
Surplus/ Cumulative
Deficit Balance
0
0
724
724
92
816
-468
348
29
377
135
512
333
845
-395
450
-50
400
-149
251
325
575
854
1,429
1,919
3,348
-2,228
1,120
-863
257
586
842
1,598
2,440
-2,077
363
-187
176
0
0
0
0
670,000 221,750 891,750 935,8851 9,060 0 115,500 811,5001 176
Appiieatfort of Ourds: for lrifarmation
Water Tower Refurbishment Costs
Sewer Main Lift Station Costs
Total of Hard Costs:
Add. Issuance Expenses
Est. Bond Counsel
Est. Misc.
Est. Registration (One -Time Fee)
Est. Capitalized Interest (0 Months)
Est. Fairness Opinion
Est. Bond Rating Fee
Est. Underwriter Discount (1.96 %)
Est. County Auditor /O.S. Printing
Total
Rounded For Issuance
566,000
83,753
649,753
2,000
50
2,150
0
550
2,500
13,132
300
670,435
670,000
Bonds Dated:
6/1/2014
Bonds Mature:
12/1/15 Through 2034
Interest Payments:
12/1/14 & Semiannually Each 6/1 & 12/1 Thereafti
Call Option:
Callable 12/1/2021 @ Par Plus Accrued Interest.
Registrar /Pay Agent:
Northland Trust
Minimum Bid:
$656,868
Est. Average Coupon:
3.19%
Est. Net Effective Rate:
3.37%
Bond Sale Date:
June 5, 2014.
Bond Closing Date
June , 2014.
Bond Counsel:
Briggs & Morgan, P.A.
Monte Eastvold, V.P,, Northland Securities, Inc. Dated: 5/5/2014
This page intentionally left blank
RATINGS SERVICES
TA �;;. � 0171111 1 ;
May 30, 2014
City of St. Joseph
25 College Avenue North
PO Box 668
St. Joseph, MN 56374
Attention: Ms. Judy Weyrens, Administrator
130 East Randolph Street
Suite 2900
Chicago, IL 60601
tel 312- 233 -7000
reference no.: 1347419
Re: US$2,720,000 City of St. Joseph, Minnesota, General Obligation Bonds, Series 2014A,
dated: June 15, 2014, due: December 01, 2032
Dear Ms. Weyrens:
Pursuant to your request for a Standard & Poor's Ratings Services ( "Ratings Services ") rating on
the above - referenced obligations, Ratings Services has assigned a rating of "A + ". Standard &
Poor's views the outlook for this rating as stable. A copy of the rationale supporting the rating is
enclosed.
This letter constitutes Ratings Services' permission for you to disseminate the above - assigned
ratings to interested parties in accordance with applicable laws and regulations. However,
permission for such dissemination (other than to professional advisors bound by appropriate
confidentiality arrangements) will become effective only after we have released the rating on
standardandpoors.com. Any dissemination on any Website by you or your agents shall include the
full analysis for the rating, including any updates, where applicable.
To maintain the rating, Standard & Poor's must receive all relevant financial and other
information, including notice of material changes to financial and other information provided to us
and in relevant documents, as soon as such information is available. You understand that Ratings
Services relies on you and your agents and advisors for the accuracy, timeliness and completeness
of the information submitted in connection with the rating and the continued flow of material
information as part of the surveillance process. Please send all information via electronic delivery
to: wbfin® statelocal�zovta ,standardandpoors.com. If SEC rule 17g -5 is applicable, you may post
such information on the appropriate website. For any information not available in electronic format
or posted on the applicable website,
Please send hard copies to:
Standard & Poor's Ratings Services
Public Finance Department
55 Water Street
New York, NY 10041 -0003
The rating is subject to the Terms and Conditions, if any, attached to the Engagement Letter
applicable to the rating. In the absence of such Engagement Letter and Terms and Conditions, the
Page 12
rating is subject to the attached Terms and Conditions. The applicable Terms and Conditions are
incorporated herein by reference.
Ratings Services is pleased to have the opportunity to provide its rating opinion. For more
information please visit our website at www.standardandl)oors.com. If you have any questions,
please contact us. Thank you for choosing Ratings Services.
Sincerely yours,
Standard & Poor's Ratings Services
gc
enclosures
cc: Ms. Carol Swanson
Mr. David Wheeler
Mr. Monte Eastvold