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Home My WebLink About2001 [09] Sep 20 {Book 22} ebllege Avenue NW itg of St. Joseph P.O. Box 668, St. Joseph. MN 56374 St. Joseph City Council (320) 363-720 I September 20, 2001 Fax: 363-0342 7:00 PM CLERK! ADMINISTRATOR Judy Weyrens 1. Call to Order MAYOR 2. Approve Agenda Larry J. Hosch 3. Consent Agenda COUNCILORS a. Bills Payable Requested Action: Approve Bob Loso b. Minutes - August 16, 2001 Requested Action: Approve Cory Ehlert c. Capital Outlay Request, Work Station Requested Action: Approve steel case work station for Kyle Schneider front area in the amount of$3,410.00. Amount to be expended from the Administration Capital Outlay budget. Alan Rassier 4. Public Comments - Each speaker will be limited to three minutes 5. 7 :05 PM - Monte Eastvold, Bond Sale Sewer Capacity 6. 7:30 PM - Public Hearing, DTED Small Cities Development Program Application 7. 7 :40 PM - City Engineer Reports . 8. 7:50 PM - Jamie Phenow, BFI - Refuse containers 9. 8:00 PM - Rezoning Request; Planning Commission recommendation on the proposed zoning change from properties abutting Highway 75 on the south from current RI to HE 10. Public Works Director - Tower mixer request .. - 11. Mayor Reports 12. Council Reports 13. Administrator/Clerk Reports 14. Adjourn e 18 Sep 2001 Bills Payable Page 1 Tue 6:30 PM City of St. Joseph September 19, 2001 . Check Transaction Depart Number Name Amount Comments Description Fund 30226 STATE OF MINNESOTA 70.00 incorporation fees Legislative Commit ties 101 30227 ~-1~OILET RENTAL "." ,.,.1i'.. Kl'~f"'" Park Areas 101 30228 ALL PEC SERVICES 1,977.75 inspection fe Building Inspec. Admistration 101 30229 AMC~ BLOCK AND PRECAST, INC 1,342.45 picinic tabl? ,benches Park Areas 101 30230 BA¥Y0N DATA SYSTEM 3.84 fixed asseti~ales tax Accounting 101 i 57.45 radio repairs Fire Communications 30231 B~TTERIES PLUS 105 30232 ¿ERKLEY ADMISTRATORS 2,800.00 work comp/bremium Fire Administration 105 J 30232 'BERKLEY ADMISTRATORS 400.00 work c0mP premium Street Maintanence 101 30232 BERKLEY ADMISTRATORS 900.00 work comp premium Administration and General 601 30232 BERKLEY ADMISTRATORS 900.00 work comp premium Sanitary Sewer Maintenance 602 30232 BERKLEY ADMISTRATORS 6,400.00 work comp premium Crime Control & Investigation 101 30232 BERKLEY ADMISTRATORS 379.00 work comp premium Salaries & Adminstrative 101 30232 BERKLEY ADMISTRATORS 1,000.00 work comp premium park Areas 101 30232 BERKLEY ADMISTRATORS 100.00 work comp premium Participant Recreation 101 30232 BERKLEY ADMISTRATORS 15.00 work comp premium Mayor 101 30232 BERKLEY ADMISTRATORS 50.00 work comp premium Council 101 30232 BERKLEY ADMISTRATORS 75.00 work comp premium Legislative Committies 101 30233 BROWNING-FERRIS INDUSTRIES 184.37 refuse removal Park Areas 101 30233 BROWNING-FERRIS INDUSTRIES 57.84 refuse removal Administration and general 602 30233 BROWNING-FERRIS INDUSTRIES 108.45 refuse removal Fire Fighting 105 30233 BROWNING-FERRIS INDUSTRIES 7,895.22 refuse removal Waste Collection 603 . 30234 CASEY'S GENERAL STORE 2.32 gas cans Park Areas 101 30235 CELLULAR 2000 28.83 cell phone Street Maintanence 101 30235 CELLULAR 2000 7.95 cell phone Park Areas 101 30235 CELLULAR 2000 7.95 cell phone Waste Collection 603 30235 CELLULAR 2000 123.20 cell phone Communication Service 101 30235 CELLULAR 2000 11.77 cell phone Park Areas 101 30236 CENTRAL MCGOWAN 26.05 medical oxygen Medical Services 105 30237 CITY OF ST. CLOUD 10,440.44 august sewer rent Sewage Treatment Plant 602 30238 COLD SPRING VETERINARY CLINC 24.00 dog boarding Animal Control 101 30239 EARL F. ANDERSON & ASSOC 336.51 camp,skate park signs Park Areas 101 30240 EARL'S WELDING/INDUSTRIAL SUPP 26.92 welding materials Maint Shop 101 30241 FIRST STATE BANK 20.00 payroll services Accounting 101 30241 FIRST STATE BANK 221.60 collection fee Administration and General 601 30241 FIRST STATE BANK 221.60 collection fee Administration and general 602 30241 FIRST STATE BANK 221.60 collection fee Waste Collection 603 30242 GRANITE ELECTRONICS 56.00 rescue unit radio repair Fire Station and Building 105 30243 GRANITE WATER WORKS 8.57 water meter parts Distribution 601 30244 HAWKINS WATER TREATMENT GROUP 138.00 sewer tests Sewage Treatment Plant 602 30244 HAWKINS WATER TREATMENT GROUP 2.50 water tests Purification 601 30244 HAWKINS WATER TREATMENT GROUP 14.50 water tests Administration and General 601 30244 HAWKINS WATER TREATMENT GROUP 294.32 hydrofluosilicic acid Distribution 601 30245 HORIZON ROOFING, INC 2,580.00 roof repairs Ci ty Hall 422 30246 INITIATIVE FUND 2,032.00 final contribution Communty Support 101 30247 INTOXIMETERS 101.84 500 mouth pieces Crime Control & Investigation 101 . 18 Sep 2001 Bills Payable Page 2 Tue 6:30 PM City of St. Joseph · September 19, 2001 Check Transaction Depart Number Name Amount Comments Description Fund 30248 ~1 GRAYSTO~~ OIL CO., INC 39.19 fuels Park Areas 101 30249 K.E.E.P.R.S) INC 63.95 pants, young Crime Control & Investigation 101 30249 K.E.E.P.R.S INC / 32.96 shirt, young Crime Control & Investigation 101 / 30250 LEAGUE OF .MN CITIES 3,338.00 dues, LoMC Council 101 30251 LEEF BRO~ 63.38 floor runners,towels City Hall Annex 101 30251 LEEF BRaS 36.76 clothing service Park Areas 101 30251 LEEF BRaS 36.76 clothing service Street Maintanence 101 30251 LEEF BROS 36.76 clothing service Administration and General 601 30251 LEEF BRaS 36.77 clothing service Administration and general 602 30252 LESNICK, MARGE 140.00 7 planning meetings Legislative Commit ties 101 30253 MCDOWALL COMFORT M&~AGEMENT 112.00 repairs, humidity issues City Hall Annex 101 30254 MINNESOTA TRAVEL MANAGEMENT 1,308.20 car rent Automotive Services 101 30254 MINNESOTA TRAVEL VANAGE!1ENT 486.90 gas Automotive Services 101 30255 MUNICIPAL DEVELOPMENT CORP 1,528.20 Fess for august Economic Development Authority 101 30256 NAHAN, TOM 55.35 office supplies Cable Access 101 30257 NCPERS GROUP LIFE INSURANCE 18.00 life insurance 101 30258 NORTHERN WATER WORKS SUPPLY 557.90 hydrant repair Distribution 601 30259 NORTHLAND ELECTRIC SUPPLY 32.38 light bulbs, panel Administration and General 601 30260 OFFICE MAX 31.94 office supplies Crime Control & Investigation 101 30260 OFFICE MAX 27.13 video tapes Cable Access 101 · 30260 OFFICE MAX 40.01 office supplies Salaries & Adminstrative 101 30260 OFFICE MAX 27.77 office supplies Salaries & Adminstrative 101 30261 RADIO SHACK 39.38 cable supplies Cable Access 101 30262 SGŒRHERHORN, LESLIE 63.75 transcription services Crime Control & Investigation 101 30263 SEH 439.00 engineering, st. wendel Engineering Fee 101 30263 SEH 2,212.98 engineering, CR 121 Street Maintanence 423 30263 SEH 4,825.95 engineering,pondview 6 Engineering Fee 101 30264 SERVICE MASTER PROFESSIONAL SR 394.05 cleaning service City Hall Annex 101 30265 ST. CLOUD FIRE EQUI P!·1ENT 81.46 service (4) SCBA cylind Fire Fighting 105 30265 ST. CLOUD FIRE EQUIPMENT 81.46 service (4) SCBA 2216 cyl Fire Fighting 105 30266 ST. CLOUD TIMES 186.83 job publications Salaries & Adminstrative 101 30267 ST. JOSEPH TRAVEL AGENCY 361.00 flight, candidate Crime Control & Investigation 101 30268 TAUFEN, DICK 1.95 postage Administration and General 601 30269 TIREMAXX SERVICE CENTERS 41.56 tire repair Park Areas 101 30269 TIRE~AXX SERVICE CENTERS 41.56 tire repair Automotive Services 101 30269 TIREt·\AXX SERVICE CENTERS 26.95 L0F Crown vic Automotive Services 101 30270 XCEL ENERGY 16.18 electric Purification 601 30270 XCEL ENERGY 30.54 electricity Street Maintanence 101 30271 ZEP ~ANUFACTURING 336.14 cleaning solvents,towe1s Maint Shop 101 --------- Grand Total 58,959.79 · CITY OF ST. JOSEPH 1 of1 . Item Mfg Part Number Part Description Sell $ Ext Sell $ 1 STC ¡CCCAF2 iEXTENDED STELLA KEYBOARD $ 268.45 i $ 268.45 ,I !W/PALMREST "I 2 STClTS~"'),''''lTS'j2õ'BBï=L''''''''''TP'ËÖËSfÄC2''BÕXifFïLË''ÓïNR:2"ÕÕ....·-·-...........r.....1...........r........$........·29T·á5r.......·....·.....$........·29·fá5· 3 stC"lTSA'" :Ts7224áj2ËFf..l~g:~~,·~~Ä,·~~~~4~~~~·~:Ö..ëÜR\ÏË...D......·........T.......f.......·r·.......$·.....·..4iÕ~è"O'II:......._..........·$........·4iifèÖ' : ..-:. r - : I . . -. . . .. . . - .. '" 4 stC"TSÃ7 -¡Tsf22"i24I~EL...·..¡wõRï<sÜRï=Äëï~::ExTENÖE'b"'·ëUR\ïËb..._·.........·r......r....·T·.......$....·....4iõ}¡õT·.......·.........$·........4iõ~·6"õ' ¡ ! ¡ ¡CORNER,LH,24X24?<72X48 . ¡ ¡ ¡ ·-..--·..·k...·-...........·-...·..···.....·....··..··......·......·.....-......·..·.....................................................-.............-....................-............-........................................................................-......-......................................... 5 STC !T9"A TS772MP ¡MODESTY PANEL-72W ¡ 2 $ 122.85 ¡ $ 245.70 ,.." ,,! ¡: i! !.! i ,".. '" '" '" 6 ·stc..iTsA..·_..¡fs·7bpC.......·.....·........!'LEG~bõÜBLE..pÖsT...........·......·....·........·.................-·...-..........r.....r·....T·..·.....$·...·.....1·õ'i3".'èÖT......·...........$·.........1()Ë3~èÖ· ~ ª ~ ¡ j i 7 stC1TSA....-jTS7ï24ï=¡::...........·....Tpï~..ÖËsfÄC2"ï:ï"[E...ÖRAW'E·R·;24'õ............-....-·..·-..r·..·1·.........r..·...·$·........24S·..9"i5T·....·......·.....$..·..·..·24"1:3."9"5· ::: ::: : i ¡ :: j 8 šTctTSA·..-lfs7M'pp·..................·..jtïRAëï<ET:rJföõE·S'iY·PANï~ï::·TÕ....·...·....-................·"!·...·..2"......·..t·....·......$·......-·1"3-:ë5õ'j..·..........···......$...........2€Ú)õ' !! !PEDESTAL CONNECTOR !! ! 9 :~tCJ:~~....J:~:~~:~~::~:::.:::~::::·~:I~~~~:~':~~:~~:~~..~:~..::.::~.::::~.~:::::~:.::~::::~::~::::~.:~~:~.~::[::~~:::::~[::..-.::~-.:::~~~~:·~~I::::~::::~:~:.~::::::~:~~.:~:~: 10 STC iTSA ¡TS714WSP ¡SUPPORT-PLATE,14D ! 1 ¡ $ 20.80! $ 20.80 ¡: '!: ! ¡ j '" '" 11 STC rscT·-n..;:ï22ï~¡1..............·...........1ï=ïLE:ï:AfEï:{ÃCRï~ë..pÜLC2"bwFf-·..._...._...·-..r..T...·...r...·....$.......·..,;H4:iõr·....-....-r·....4·f;r'7"0' .......__..L..._...._L._......................................l.~~:..~.~~~~~~.!................................................._...................._...._...._..L...............L.......................................1.................................................... 12 STC !SCF !142361 !FILE-LATERAL,REC PULL,3 DWR, ! 1 1 $ 525.851 $ 525.85 . ¡ . ¡ ¡LK,18X42X39 ¡ ¡ i.. . 13 ;¡·**-·l***·_....-IcAÕÖESïGÑ........TDEsïÖ·N..fïME......._..·..._·..........·....·...........·...·......·....-....-·...-··..--..·¡-·..4...........¡..·..·..·-'ij;'......·-T:;¡-:2ST·...·_...........$..·..·..·..4¡:Ú56 '" '" ." ... : =: ::: ::: ::: 14 ;;*-"¡***-'-"'lNC':¡:::ïN'STÄLClp'RÕï='Ë'SSïÕN"ACïNSfACLAfïë5N...........·..·-....-·..·-..r.....1·.....·..·r..·....·$·.........EÕ·..õ'Õr...........·-·$..·..·....1!5'õ~Õ'õ· ¡Grand Totals ! $ 3,410.00 i : ¡ . . (}VUrfie . J:\Hotel-Ann\Wkst\Vince\ST. JOE\ONE-DESK.sp3 09/18/01 08: 17:42 : '.. . , . . EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF ST. JOSEPH, MINNESOTA HELD: September 20,2001 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of St. Joseph, Stearns County, Minnesota, was duly held at the City Hall in said City on Thursday, the 20th day of September, 2001, at _ o'clock _.M., for the purpose, in part, of considering bids for, and awarding the competitive negotiated sale of, $640,000 General Obligation Sewer Revenue Bonds of2001 of the City. The following members were present: and the following were absent: The City Administrator-Clerk presented bids on $640,000 General Obligation Sewer Revenue Bonds of2001 of the City, for which proposals were to be received, opened and tabulated by the City Administrator-Clerk, or designee, this same day, in accordance with the resolution adopted by the City Council on August 16, 200l. . The following proposals were received, opened and tabulated at 11 :00 A.M., Central Time, at the offices of Juran & Moody, a division of Miller, Johnson, Steichen Kinnard, Inc., in the presence of the Administrator-Clerk, or designee, on this same day: Bidder Interest Rate Net Interest Cost (See Attached) The Council then proceeded to consider and discuss the bids, after which Member introduced the following resolution and moved its adoption: RESOLUTION ACCEPTING BID ON THE SALE OF $640,000 GENERAL OBLIGATION SEWER REVENUE BONDS OF 2001, AND PLEDGING FOR THE SECURITY THEREOF NET REVENUES A. WHEREAS, the City of S1. Joseph, Minnesota (the "City"), owns and operates a municipal sewer system as a separate revenue producing public utility (the "System"); and B. WHEREAS, there are no outstanding obligations of the City, the interest and principal of which would constitute a prior lien upon the net revenues of the System; and . C. WHEREAS, the City Council has heretofore determined that it is necessary and expedient to issue $640,000 General Obligation Sewer Revenue Bonds of2001 1328070v1 . (the "Bonds"), pursuant to Minnesota Statutes, Section 444.075 and Chapter 475 to finance improvements to the System (the "Project"); and D. 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 proposal of (the "Purchaser"), to purchase the Bonds of the City (or individually, a "Bond"), 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, and the Bonds are hereby awarded to said proposal maker. The City Clerk-Administrator is directed to retain the deposit of said proposal maker and to forthwith return to the unsuccessful proposal makers their good faith checks or drafts. 2. Bond Terms. (a) Title: Original Issue Date: Denominations: Maturities: Term Bond Option. The Bonds shall be titled "General Obligation Sewer Revenue Bonds of2001", shall be dated October 1, 2001, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered rrom R-l upward in the denomination . of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized Denominations"). The Bonds shall mature on December 1 in the years and amounts as follows: Year Amount 2002-2009 $25,000 2010-2013 30,000 2014-2016 35,000 2017-2018 40,000 2019-2021 45,000 All dates are inclusive. 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) Book Entry Only System. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New Yark 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 1328070vl 2 . 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 ofthe existing or a successor Depository, the IINomineell). (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 IIParticipantll) or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant (the IIBeneficial Ownerll). 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 IIHolderll). For purposes of . securing the vote Oïconsent 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 detennined 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. . (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 1328070vl 3 . 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"). (vü) 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. ( vili) 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 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 agencylbond registrar agreement, shall agree to take any actions necessary ITom 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. (c) 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 ofthe City, is willing and able to assume such functions upon reasonable or customary terms, or if the 1328070v1 4 . City determines that it is in the best interests ofthe 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 hereof To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10 hereof, the Bonds will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of paragraph 10 hereof (d) 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: Cost. The Bonds shall provide funds to finance the Project in the City. 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 June 1, 2002, 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 Interest Year Rate 2002 % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 . 2015 2016 2017 1328070v1 5 . 2018 2019 2020 2021 5. Redemption. All Bonds maturing in the years 2010 to 2021, both inclusive, shall be subject to redemption and prepayment at the option of the City on December 1, 2009, 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. Ifredemption is in part, those Bonds remaining unpaid which have the latest maturity date shall be prepaid first; 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 ITom 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 (30) 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 ofthe 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, trom the numbers so assigned to such Bonds, as many numbers as, at $5,000 for . each number, shaH 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 his, her or its attorney duly authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by such 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. U.S. Bank Trust National Association, in St. Paul, 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 ofthis resolution. . 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: 1328070v1 6 . DmTED STATES OFAMEIDCA STATE OF MINNESOTA STEARNS COUNTY CITY OF ST. JOSEPH R- $ GENERAL OBLIGATION SEWER REVENUE BOND OF 2001 INTEREST MATURITY DATE OF RATE DATE OIDGINAL ISSUE CUSIP DECEMBER 1, 20_ OCTOBER 1, 2001 REGISTERED OWNER: PRINCIP AL AMOUNT: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that 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 June 1, 2002, 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 trom the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, trom 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 U.S. Bank Trust National Association, in S1. Paul, 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 th~·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 1328070vl 7 . 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.]* REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. 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 ofthis 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 municipal sewer system at the times and in amounts necessary to produce net revenues, together with other sums pledged to the payment of the Bonds, adequate to pay all principal and interest when due on 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 the Bonds of this issue as they respectively become due, if the net revenues ITom the municipal sewer 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. . * Include only until termination of the book-entry only system under paragraph 2 hereof. 1328070v1 8 . IN WITNESS WHEREOF, the City of St. Joseph, Stearns County, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Administrator-Clerk, the corporate seal of the Issuer having been intentionally omitted as permitted by law. Date of Registration: Registrable by: U.S. BANK TRUST NATIONAL ASSOCIATION Payable at: U. S. BANK TRUST NATIONAL ASSOCIATION BOND REGISTRAR'S CITY OF ST. JOSEPH, STEARNS COUNTY, CERTIFICATE OF :MINNESOTA AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned /s/ Facsimile within. Mayor . /s/ Facsimile Administrator-Clerk U.S. BANK TRUST NATIONAL ASSOCIATION St. Paul, Minnesota Bond Registrar By Authorized Signature . 1328070v1 9 . ON REVERSE OF BOND Redemption. All Bonds of this issue (the "Bonds") maturing in the years 2010 to 2021, both inclusive, are subject to redemption and prepayment at the option ofthe Issuer on December 1, 2009, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subj ect to prepayment. If redemption is in part, those Bonds remaining unpaid which have the latest maturity date shall be prepaid first; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected Holder of the Bonds at least thirty (30) days prior to the date fixed for redemption. Selection of Bonds for Redemption: Partial Redemption. To effect a partial redemption of Bonds h.aving 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 his, her or its attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by such 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 $640,000, all oflike date of original issue and tenor, except as to number, maturity, interest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws ofthe State of Minnesota and pursuant to a resolution adopted by the City Council of the Issuer on September 20,2001 (the "Resolution"), for the purpose of providing money to finance improvements to the municipal sewer system within the jurisdiction of the Issuer. This Bond is payable out of the General Obligation Sewer Revenue Bonds of2001 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. . Denominations: Exchange: Resolution. The Bonds are issuable solely as fully registered bonds in Authorized Denominations (as defined in the Resolution) and are exchangeable for 1328070v1 10 . 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 ofthe rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by his, her or its 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 (except as otherwise provided on the reverse side hereof 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. Oualified 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. . 1328070vl 11 . ABBREVIATIONS The following abbreviations, when used in the inscription on the face ûfthis Bûnd;-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 IT 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. . . 1328070v1 12 . 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 assignor1s 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.) . 1328070v1 13 . [Use only for Bonds when they are Registered in Book Entry Only System] PREP A~{MENT SCHED1JLE This Bond has been prepaid in part on the date(s) and in the amount(s) as follows: DATE AMOUNT AUTHORIZED SIGNATURE OF HOLDER . . 1328070v1 14 . 8. Execution: Temporary Bonds. The Bonds shall be printed (or, at the request of the Purchaser, typewritten) and 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, however, that the seal of the City may be a printed (or, at the request ofthePurchaser, photocopied) facsimile; and provided further that both of such signatures may be printed (or, at the request of the Purchaser, photocopied) facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such 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, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in substantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Such temporary bonds may be executed with photocopied facsimile signatures of the Mayor and Administrator-Clerk. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and cancelled. 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, which date is October 1, 2001. 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 1328070v1 15 . . 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 cancelled by the Bond Registrar and thereafter disposed of as directed by the City. 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 tenns of said agreement. II. 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 (15th) 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 (10) 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 above) 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. 1328070v1 16 . 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. There is hereby established a special fund to be designated the "General Obligation Sewer Revenue Bonds of2001 Fund" (the "Fund") to be administered and maintained by the Administrator-Clerk as a bookkeeping account separate and apart trom all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all ofthe Bonds and the interest thereon have been fully paid. There shall be established and maintained in the Fund the following three (3) separate accounts to which shall be credited and debited all income and disbursements of the System as hereinafter set forth. The Administrator-Clerk of the City and all officials and employees concerned therewith shall establish and maintain financial records of the receipts and disbursements ofthe City's System in accordance with this resolution. In such records there shall be established and maintained accounts 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 accrued interest received thereon and less any amount paid for the Bonds in excess of $629,760. From the Construction Account there shall be paid all costs and expenses of the Project, 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. Any balance remaining in the fund after completion of the costs shall be transferred to the Debt Service Account. (b) Operation and Maintenance Account. To this account shall be paid all gross revenues and earnings derived ITom the operation of the City's System, including all charges for service, use and availability of and connection to said system, when collected, and all moneys received ITom the sale of any facilities or equipment of said system or any by-products thereof From this account there shall be paid all the normal, reasonable and current costs of operating and maintaining and insuring the system, salaries, wages, costs of materials and supplies, necessary legal, engineering and auditing services, and all other items which, by sound accounting practices, constitute nonnal, reasonable and current costs of operation and maintenance, but excluding any allowance for depreciation, extraordinary repairs and payments into the Debt Service Account. All moneys remaining in the Operation and Maintenance Account after paying or providing for the foregoing items shall constitute, and are referred to in this resolution as, "net revenues". (c) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (i) 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 trom time to time be irrevocably appropriated to the account sufficient to meet the requirements of Minnesota Statutes, Section 475.61 for the payment of the principal and interest of this issue; (ii) any amount paid for the . Bonds in excess of $629,760; (iii) all accrued interest received upon delivery of the Bonds; (iv) any collections of all taxes which may hereafter be levied in the event that the net revenues and other funds herein pledged to the payment of the principal and interest on the Bonds are 1328070v1 17 . insufficient therefor; (v) all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (vi) all investment earnings on funds held in the Debt Service Account; and (vii) any and all other moneys which are properly available and are appropriated by the governing boày oÎ the City to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest and any premiums for redemption ofthe Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable ITom said account as provided by law. 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 (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums ITom time to time held in the Construction Account, Operation and Maintenance Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable thereITom) in excess of amounts which under then-applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. 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 io be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"). 16. Excess Net Revenues. Net revenues in excess of those required for the foregoing may be used for any proper purpose. 17. 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 interest on the Bonds herein authorized and a sum at least five percent (5%) in excess thereof, and the net revenues of the System are hereby pledged for the payment of the Bonds of this issue and shall be applied for that purpose, but solely to the extent required to meet the principal and interest requirements of this issue as the same become due. Nothing contained herein shall be deemed to preclude the City ITom 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 Bonds herein authorized 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. 18. 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 1328070v1 18 . interest when due on the 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". 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 oflaw 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 60 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 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 1328070v1 19 ~ . exceed 20% 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 5% of the proceeds of the Bonds. (b) Each Reimbüísement-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 18 months 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, but not more than three years after the date of the Reimbursement Expenditure. (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 20 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 irrevocably pledged. If the net revenues of the System appropriated and pledged to the payment of principal and interest on the Bonds, together with other funds irrevocably appropriated to the Debt Service Account 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 payable thereITom, 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 ITom the Debt Service Account when a sufficient balance is available therein. 22. 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 he or she shall require, and to obtain the County Auditor's certificate that the Bonds have been entered in the County Auditor's Bond Register. 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 ITom the books and records under their custody and control or as 1328070v1 20 . otheIWise 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. ",,, Negative Covenant as to Use of Proceeds and Proiect. The City hereby covenants "'-"t. 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 1 03 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 :fÌ"om gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and (3) 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 (1) the Bonds are issued by a governmental unit with general taxing powers, (2) no Bond is a private activity bond, (3) ninety-five percent (95%) 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 (4) 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 l48(t)(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) ofthe 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 2001 will not exceed $10,000,000; and . (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2001 have been designated for purposes of Section 265(b)(3) of the Code. 1328070v1 21 . 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. ,.,~ Severability. If any section, paragraph or provision of this resolution shall be held ... I . 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. 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 said resolution was declared duly passed and adopted. . . 1328070vl 22 . 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 of said City, duly called and held on the date therein indicated, insofar as such minutes relate to authorizing the issuance of, and awarding the sale of, $640,000 General Obligation Sewer Revenue Bonds of 200 1 of said City. WITNESS my hand this 20th day of September, 2001. . Administrator-Clerk . 1328070v1 23 . ." 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". ,. ',.., ~~' " ,', v·'· , 3~:~'~ '~n::.· u, u ,', ,. ':': I n~n~' n, . u·" ill I' " 66/6/6 . ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 0 0 0 0 0 0 0 0 0 LO 0 LO 0 LO 0 LO 0 LO C\I 0 I'- LO C\I 0 I'- LO CD CD CD 1.0 1.0 1.0 1.0 "¢ "¢ Q&M) . Juran & Moody :\ DI\'IS]O" O¡.: ¡\lILl,ER, JOH"SO" &. KlTH~. I~CORrOR,-\TED TABULATION OF BIDS CITY OF ST. JOSEPH, MINNESOTA $640,000 GENERAL OBLIGATION SEWER REVENUE BONDS OF 2001 AWARD: UNITED BANKERS' BANK DATE OF SALE: THURSDAY, SEPTEMBER 20, 2001 RATING: NONE BIDDER INTEREST RATE NET INTEREST COST (RATE) UNITED BANKERS' BANK 3.30% - 2002/05* 4.10% - 2006/09* 4.60% - 2010/13* . 4.90% - 2014/17* 5.15% - 2018/21* PURCHASE PRICE: $629,760.00 $378,447.08 (4.9654%) BERNARDISECURrnES 5.75% - 2002/04 MILLER JOHNSON STEICHEN) CO- 3.75% - 2005/06* KINNARD) MANAGERS 4.00% - 2007/08* CRONIN & CO., INC.) 4.30% - 2009/10* 4.65% - 2011/12* 5.00% - 2013/15* 5.10% - 2016/18* 5.15% - 2019/21 * PURCHASE PRICE: $629,760.00 $386,443.33 (5.0703%) " d *TERMED BONDS ,(j . 10 World Trade Center SÎPC East Seventh Street (651) 224, 1500 Paul. "iN 55101 """"""""._'''''''~~-oo (800) 950 - 4666 ttsdale. AZ . La Jolla, CA . Clearwatet, FL . .vlinneapolis, "iN . St. Paul. ,"'IN . Houston. TX MINNESOTA MUNICIPAL BOND SALES . SEPTEMBER 2001 DATE MATURITY MUNICIPALITY AMOUNT TYPE RATING NIC 9- 4 6 Kandiyohi County $ 2,200,000 G.O. Bonds Aaa 3.46 FGIC 9- 4 21 Kandiyohi County 6,000,000 G.O. Water & Sewer Aaa 4.67 MBIA 9- 4 3 Kittson County 750,000 G.O. Bonds NR 3.45 9- 4 9 Washington County 14,680,000 G.O. Bonds Aa2 3.72 AA (S&P) 9- 4 16 Waseca 1,270,000 G.O. Bonds A3 4.46 9- 5 10 Rochester 8,315,000 G.O. Bonds Aaa 3.78 - AAA (S&P) 9- 6 16 Duluth 4,800,000 G.O. Bonds, Series D Aaa 4.40 AAA (S&P) FSA 9- 6 10 Duluth 615,000 G.O. Bonds, Series E Al A+ .10 17 Goodview 2,060,000 G.O. Bonds Aaa FGIC 9- 10 10 ISD 2397, LeSueur 3,060,000 G.O. Bonds Aa 1 Henderson School Credit Program 9- 10 3 Norwood-Young 3,555,000 G.O. Bonds NR 3.53 America 9- 10 10 Sacred Heart 495,000 G. O. Bonds NR 4.21 9- 10 21 Wright County 2,295,000 G.O. Sewer Aaa MBIA 9- 17 6 ISD 882, Monticello 5,435,000 G. O. Bonds AA+ 3.32 School Credit Program 9- 20 20 St. Joseph 640,000 G.O. Sewer Revenue NR 4.96 . JURAN & MOODY, a division of MILLER. JOHNSON & KUEHN. INCORPORA'lED Sewcap20.xls . ~iYJ CITY OF ST. JOSEPH, MINNESOTA lY. GENERAL OBLIGATION SEWER REVENUE BONDS OF 2001 :::r:}}::::::::::::}::}}=r:}}}::=rrr@}}::=rrr@~ijijW:P.MffMMM}:r::rr:}}}:rrrrrrrrr@}}}}}}¡:rr ........................................................................................................ ..................................................... t:tttt=tmttt:ttt:::tti:t'J.v.~M~t$ÄW$¡Wt:t::ttmt=t:=:t=:::::tt:t:::::t= itttt=:::=:=:::þ@ij:H:W:WHtt::t=ttt Final Total Statutory DBL Labs Annual 112-1) Interest Debt 5.00% Cash-On Special Tax Sewer Surplus/ Cumulative Year Principal Rate Interest Payment Coverage Hand Assessmnt Levies Rates Deficit Balance 2001 0 0.00% 4,840 4,840 4,840 11,000 33,438 0 0 39,598 39,598 2002 25,000 3.30% 29,038 54,038 56,739 31,807 39,000 23,400 37,468 77,066 2003 25,000 3.30% 28,213 53,213 55,873 30,176 39,000 23,400 36,703 113,769 2004 25,000 3.30% 27,388 52,388 55,007 28,545 40,000 23,400 36,938 150,707 2005 25,000 3.30% 26,563 61,563 54,141 26,913 40,000 23,400 36,172 186,879 2006 25,000 4.10% 25,738 50,738 53,274 25,282 40,000 23,400 36,408 222,287 2007 25,000 4.10% 24,713 49,713 52,198 23,651 40,000 23,400 34,853 257,140 2008 25,000 4.10% 23,688 48,688 51 , 1 22 22,020 41. 000 23,400 36,298 292,438 2009 25,000 4.10% 22,663 47,663 50,046 0 42,000 23,400 15,364 307,792 2010 30,000 4.60% 21,638 61,638 54,219 - 0 42,000 23,400 11,181 318,973 2011 30,000 4.60% 20,258 60,268 62,770 0 0 23,400 -29,370 289,603 2012 30,000 4.60% 18,878 48,878 61,321 0 0 23,400 -27,921 261,681 2013 30,000 4.60% 1 7,498 47,498 49,872 0 0 23,400 -26,472 236,209 2014 36,000 4.90% 16,118 61,118 53,673 0 0 23,400 -30,273 204,936 2016 35,000 4.90% 14,403 49,403 51,873 0 0 23,400 -28,473 176,463 2016 36,000 4.90% 12,688 47,688 50,072 0 0 23,400 -26,672 149,791 2017 40,000 4.90% 10,973 60,973 63,521 0 0 23,400 -30,121 119,670 2018 40,000 5.15% 9,013 49,013 . 61 ,463 0 0 23,400 -28,063 91,607 2019 46,000 6.16% 6,953 51,963 54,560 0 0 23,400 -31,160 60,467 . 45,000 6.16% 4,636 49,636 52,117 0 0 23,400 -28,717 31,740 46,000 6.16% 2,318 47,318 49,683 0 0 23;400 -26,283 6;457 640,000 368,207 1,008,207 1,068,376 11,000 221,832 363,000 468,000 6,467 ~iß.iw.RMnM&imttt::::::t::t:=:::tttttt=tt:tlttt::t:::=::::ttt=ttt::::::::: ::m.maJiUðWiiMiM:M:::::tt=t=:tttttt::::tt::t:t::::=:::tm=:::::::::::::t:=:::=:::=::tm::tmttt=m::t::::::::::tttt::ttt::t::::t::::ttttt::::::::::::: 3ewer Transportation Capacity Cost 860,100 Bonds Dated: 10/1/01 Less: Sewer Fund Contribution -247,000 Bonds Mature: 12/1/11 Through 2021 'otal of Hard Costs: 613,100 Interest Payments: 6/1/02 & Semiannually Each 12/1 & 6/1 Thereafter Add: Issuance Expenses Call Option: Callable 12/1/2009 @ Par Plus Accrued Interest. :st. Bond Counsel 4,500 Registrar/Pay Agent: US Bank Trust, N.A., St. Paul, MN .st. Bond Printing 0 Purchase Price: $629,760 L ~ , ì 'i__)--"\' :st. Registration (One-Time Fee) 5,250 Average Coupon: C 831 % J;.A'.Þ)J'~/ r¿..t~" I I ./..!;í: ~apitalized Interest (0 Months) 0 Net Effective Rate: 4--:966% ¡'j) ~ß(,j'/i.j~{¿'/ 'iscal Fee 6,900 Est. Bond Sale Date: September 20, 2001 ".- :st. Bond Rating Fee 0 Est. Closing Date: Approximately 21 Business Days After Sale. Inderwriter's Discount (1.6%) 10,240 Bond Counsel: Briggs & Morgan, P.A. ther 0 Total 639,990 ounded For Issuance II 640,00011 . Monte Eastvold, Juran & Moody Dated: 9/20/01 l II I , --- -- -- _, ~-'::;;--;"'~-PM! l!!Ii! ~ -.-,:--~ ---~~- --~~---~~~- .-.... TABLE OF CONTENTS .. Page Summary of Offering...............,................................................................................................... 2 \ Principal City Officials...................................................... .......................................................... 3 '. Official T enns of Bond Sale..................................................,..................................................... 4-8 Authority and Security for the Bonds ...... ......................................................................... ........... 9 Purpose....................................................................................................................... ................. 9 Official Statement..,..,.......................................................................................,.......................... 9 Statutory Debt Limit......................... ........................................................................................... 10 Estimated Source and Application of Funds .................................... ........................................... 11 Future Financing.............................,.....,...................................................................................... 12 Bond Rating.....,........,.....,.................,......................................................................................... . 12 , Litigation.................................................................................................................... .................. 12 Certification...................................................................,...,....................,............................. ....... 12 . Legality..................................................................................,...............,..........,.,............ ............ 12 Financial Advisor......................................................................................................................... 12 Continuing Disclosure Undertaking ..... ...... ... ........ ...... .... '" '" .... ... ..... ..... ......... ........ ..,....... ... ....... 13 Book-Entry Only System.....................................................,....................,.................................. 14 \ Tax Exemption...........................................................................................,........................... ...... 15 Other Federal Tax Considerations ....... ....... ....... ........ ................ .............. ............ ..,......... ............ 15 - 16 City of St. Joseph (General Infonnation)......... ..................................... .................. ......... ...... ... ... 17 - 22 Minnesota Valuations, Tax Credits and Levy Limitations.......................................................... 23 - 25 City of S1. Joseph (Economic and Financial Infonnation) .......................................................... 26 - 34 Summary of Debt and Debt Statistics...................... .......... ......... ...... ..... ......... ............. ................ 35 \ Worksheet. ...... .................... ... .......... ....... ... ........... ... .... .... .... ... ...... ........ ... ...... ......... ....... ..... ... ... ... 37 Proposal F onn................................... ,........................,.. ,.............................................................. 38 \ Appendix A - Proposed Fonn of Legal Opinion . Appendix B - Fonn of Continuing Disclosure Undertaking ~ Appendix C - City's Financial Statements SUMMARY OF OFFERING $640,000 GENERAL OBLlGA TION SEWER REVENUE BONDS OF 2001 . (Book-Entry Only) AMOUNT - $640,000. ISSUER - City ofSt. Joseph, Minnesota (The "City"). SALE DATE - Thursday, September 20,2001. OPENING - 11:00 A.M. Central Time, at Juran & Moody, a division of Miller Johnson Steichen Kinnard, Inc., 1100 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, Minnesota 55101-4901, telephone: (651) 224-1500 or (800) 950-4666. AWARD - 7:00 P.M., Central Time, at the St. Joseph City Hall, 25 First Avenue Northwest, St. Joseph, Minnesota 56374-0668. TYPE OF ISSUE - General Obligation Sewer Revenue Bonds of 2001 (the "Bonds"). See Authority and Security for the Bonds and Estimated Source and Application of Funds herein for additional information. SECURITY & PURPOSE - These Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475 and are payable primarily from net revenues of the municipal sewer and water utility system. The full faith and credit of the City is pledged to their payment and the City has validly obligated itself to levy additional ad valorem taxes in the event of any deficiency in the Debt Service Account established for this issue. Taxes will be levied upon all of the taxable property within the City and without limitation of amount. Interest on the Bonds is not includable in gross income of the recipient for federal income tax pur- poses or in taxable net income for Minnesota income tax purposes, and is a preference item for purposes of the computation of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax imposed on individu- als, trusts and estates, but such interest is includable in the computation of" adjusted current earnings" used in the calcula- tion of federal alternative minimum taxable income of corporations, and is subject to Minnesota franchise taxes on corpo- rations (including financial institutions) measured by income and the alternative minimum tax base. Proceeds of the Bonds, along with other available City funds, will be used to provide moneys to finance the construction of a new well and pump house facility as well as the upgrading and renovation of the existing wastewater treatment plant. See Estimated Source and Application of Funds herein for additional information. DA TE OF ISSUE - October I, 200 I. I INTEREST PAYABLE DATES - June 1,2002, and semiannually thereafter on June I and December I and to registered owners of the Bonds appearing of record in the bond register as of the close of business on the fifteenth (IS]¡) day (whether or not a business day) of the immediately preceding month. DENOMINATIONS - 55,000. MA TURITIES - .r 12/01/02 $ 25,000 12/01/06 525,000 12/01/1 0 530,000 12/01/14 $35,000 12/01/18 $40,000 12/01/03 25,000 12/01/07 25,000 12/01/11 30,000 12/01/15 35,000 12/01/19 45,000 12/01/04 25,000 12/01/08 25,000 12/01/1 2 30,000 12/01/16 35,000 12/01/20 45,000 12/01/05 25,000 12/01/09 25,000 12/01113 30,000 12/01/17 40,000 12/01/21 45,000 AVERAGE MATURITY - 1 \. 90885 years. REDEMPTION FEATURE - At the option of the Issuer. Bonds maturing after December 1,2009, shall be subject to prior redemption on said date, and any interest payment date thereafter, at a price of par and accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the Bonds remaining unpaid which have the latest maturity date shall be prepaid first. If only part of the Bonds having a common maturity date are called for prepayment, the Issuer will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each par- ticipant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests is such maturity to be redeemed. Notice of such call shall be given by mailing a notice thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each bond to be re- deemed at the address ShOVoll on the registered books. BOOK-ENTRY SYSTEM - The Bonds will be issued as fully registered Bonds and, when issued, will be registered in the name of Cede & Co., as nominee of the Depository Trust Company, New York, New York, to which principal and interest payments on the Bonds will be made. Individual purchases will be made in book-entry form only, in the principal amount of $5,000 or any whole multiple thereof. Purchasers of Bonds will not receive physical delivery of Bonds. REGISTRARlPA YING AGENT - U.S. Bank Trust National Association, St. Paul, Minnesota. METHOD OF SALE - Sealed proposals only, accompanied by a good faith check in the amount of $12,800 at a price of not less than $629,760 and accrued interest. See Official Terms of Bond Sales herein for additional information. TAX DESIGNATIONS- NOT Private Activity Bonds - These Bonds are not" private activity bonds" as defined in § 141 of the Internal Revenue Code of 1986, as amended (the Code). Qualified Tax-Exempt Obligations - The City will designate these Bonds "qualified tax-exempt obligations" for purposes of §265(b)(3) of the Code. LEGAL OPINION - Briggs and Morgan, Professional Association, St. Paul and Minneapolis, Minnesota (the "Bond Counsel"). RA TING - St. Joseph currently has a general obligation bond rating of" Baa2" assigned by Moody's Investors Service. The City wm not . apply to Moody's for a rating on this issue. ESTIMA TED CLOSING DATE - October 9, 200 I. PRIMARY CONTACT - Judy Weyrens, City Administrator/Clerk-Treasurer, (320) 363-7201. Monte Eastvold, Vice President, Juran & Moody, (651) 224-1500 or (800) 950-4666. -2- I CITY OF ST. JOSEPH . PRINCIPAL CITY OFFICIALS Elected Officials City Council Name Position Term Exoires Larry Hosch Mayor 12/31/01 Cory Ehlert Council Member 12/31/01 Bob Loso Council Member 12/31/01 I Alan Rassier Council Member 12/31/03 Kyle Schneider Council Member 12/31/03 J Appointed Officials . Judy Weyrens City Administrator/Clerk-Treasurer Judy Weyrens Finance Director Rajkowski Hansmeier Ltd. - John H. Scherer City Attorney Short Elliot Hendrickson & Associates - Joe Bettendorf City Engineer J Bond Counsel Briggs and Morgan, Professional Association St. Paul and Minneapolis, Minnesota ì \. Bond Consultant . Juran & Moody a division of Miller Johnson Steichen Kinnard, Inc. I St. Paul, Minnesota -3- OFFICIAL TERMS OF . BOND SALE $640,000 GENERAL OBLIGATION SEWER REVENUE BONDS OF 2001 CITY OF ST. JOSEPH STEARNS COUNTY :tvf1NNESOTA (Book Entry Only) NOTICE IS HEREBY GIVEN that these bonds will be offered for sale according to the following terms: TIME AND PLACE: Sealed proposals will be opened by the City Administrator- Clerk, or designee, on Thursday, September 20, 2001, at 11 :00 AM., Central Time, at the offices of Juran & Moody, 1100 Minnesota World-Trade Center, 30 East Seventh Street, in St. Paul, Minnesota 55101-2091. Consideration of the proposals for award of the sale will be . by the City Council at its meeting in the St. Joseph City Hall beginning at 7:00 P.M., on the same day. BOOK ENTRY SYSTEM: The bonds will be issued by means of a book entry system with no physical distribution of bond certificates made to the public. The bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the bonds. \ Individual purchases of the bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records ofDTC and its participants. Principal and interest are payable by the Issuer through U.S. Bank Trust National Association, in St. Paul, Minnesota (the "Registrar") to DTC or its nominee as registered owner of the bonds. Transfer of principal and interest payments to participants ofDTC will be the responsibility ofDTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such 1320379vl . . -4- , ¡e participants and other nominees of beneficial owners. The successful proposal maker, as a condition of delivery of the bonds, will be required to deposit the bond certificates with DTC. The Issuer will pay reasonable and customary charges for the services of the Registrar. DATE OF ORIGINAL ISSUE OF BONDS: October 1,2001. PURPOSE: For the purpose of providing money to finance various , improvements to the sewer system within the City. INTEREST P ATIÆENTS: June 1, 2002, and semiannually thereafter on June 1 and December 1 to registered owners of the bonds appearing of record in the bond register as of the close of business on the fifteenth (15th) day (whether or not a business day) of the immediately preceding month. MATURITIES: December 1 in each of the years and amounts as follows: Year Amount 2002-2009 $25,000 . ~. 2010-2013 30,000 2014-2016 35,000 2017-2018 40,000 2019-2021 45,000 All dates are inclusive. Proposals for the bonds may contain a maturity schedule providing for any combination of serial bonds and term bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory redemption in each year conforms to the maturity schedule set forth above. REDEMPTION: At the option of the Issuer, bonds maturing after December 1, 2009, shall be subject to prior payment on said date, and any date thereafter, at a price of par and accrued interest. Redemption may be in whole or in part of the bonds subject to prepayment. If redemption is in part, the bonds remaining unpaid which have the latest maturity date shall be prepaid first. If only part of the bonds having a common maturity date are called for prepayment, the Issuer will notify DTC of the particular amount of such . 1320379vl -5- I maturity to be prepaid. DTC will deterDÚne by lot the eì amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Notice of such call shall be given by mailing a notice thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each bond to be redeemed at the address shown on the registered books. CUSIP NlTh1BERS: If the bonds qualify for assignment of CUSIP numbers such ~ numbers will be printed on the bonds, but neither the failure to print such numbers on any bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Purchaser thereof to accept delivery of and pay for the bonds in accordance with terms of the purchase contract. The CUSlP Service Bureau charge for the assignment of CUSlP identification numbers shall be paid by the Purchaser. DELIVERY: Forty days after award subject to approving legal opinion of Briggs and Morgan, Professional Association, of St. Paul and Minneapolis, Minnesota. Legal opinion will be paid by the Issuer and delivery will be anywhere in the continental . United States without cost to the Purchaser at DTC. TYPE OF PROPOSAL: Sealed proposals of not less than $629,760 and accrued interest on the principal sum of $640,000 from date of original issue of the bonds to date of delivery must be filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to legality. A certified or cashier's check (the "Deposit") in the amount of $12,800, payable to the order of the Administrator-Clerk of the Issuer, or a Financial Surety Bond complying with the provisions below, must accompany each proposal, to be forfeited as liquidated damages if proposal maker fails to comply with accepted proposal. Proposals for the bonds should be delivered to Juran & Moody, and addressed to: Judy Weyrens Administrator-Clerk St Joseph City Hall 21 First Avenue Northwest St Joseph, Minnesota 56374-0668 1320379vl . -6- \ '. If a Financial Surety Bond is used, it must be :fÌ'om an insurance company licensed to issue such a bond in the State of Minnesota, and preapproved by the Issuer. Such bond must be submitted to Juran & Moody, prior to the opening of the proposals. The Financial Surety Bond must identify each proposal maker whose Deposit is guaranteed by such Financial Surety Bond. If the bonds are awarded to a proposal maker using a Financial Surety Bond, then that purchaser is required to submit its Deposit to Juran & Moody in the form of a certified or cashierl s check or wire . transfer as instructed by Juran & Moody not later than 3 :30 P.M., Central Time, on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the Issuer to satisfy the Deposit requirement. The Issuer will deposit the check of the ·purchaser, the amount of which will be deducted at settlement and no interest will accrue to the purchaser. In the event the purchaser fails to comply with \ the accepted proposal, said amount will be retained by the Issuer. No proposal can be withdrawn after the time set for receiving proposals unless the meeting of the Issuer scheduled for award of the bonds is adjourned, recessed, or continued to another date without award of the bonds '. . having been made. RATES: All rates must be in integral multiples of 1I20th or 1I8th of 1%. No limitation is-placed upon the number of rates which may be used. All bonds of the same maturity must bear a single uniform rate ITom date of issue to maturity. INFORMATION FROM The successful purchaser will be required to provide, PURCHASER: in a timely manner, certain information relating to the initial offering price of the bonds necessary to compute the yield on the bonds pursuant ~o the provisions of the Internal Revenue Code of 1986, as amended. . 1320379vl -7- QUALIFIED TAX The Issuer will designate the bonds as qualified tax .' EXEMPT OBLIGATIONS: exempt obligations for purposes of Section 265(b )(3) of the Internal Revenue Code of 1986, as amended. The Issuer reserves the right to reject any and all proposals, to waive informalities and to adjourn the sale. Dated: August 16,2001. BY ORDER OF THE CITY COUNCIL , Is! Judy Weyrens City Administrator-Clerk Additional information may be obtained from: JURAN & MOODY 1100 Minnesota WorId Trade Center 30 East Seventh Street . St. Paul, Minnesota 55101-2091 Telephone No.: (651) 224-1500 . 1320379vl . -8- / AUTHORITY AND SECURITY FOR THE BONDS . The Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475. At closing Bond Counsel will render an opinion that the Bonds are valid and binding general obligations of the City of St. Joseph. The Bonds will be payable primarily from net revenues of the municipal sewer and water utility system. The full faith and credit of the City is pledged to their payment and the City has validly obligated itself to levy additional ad valorem taxes in the event of any deficiency in the Debt Service Account established for this issue. Taxes will be levied upon all of the taxable property within the City and without limitation of amount. Interest on the Bonds is not includable in gross income of the recipi- ent for federal income tax purposes or in taxable net income for Minnesota income tax purposes, and is a preference item for purposes of the computation of the federal alternative minimum tax, or the com- putation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates, but such interest is includable in the computation of" adjusted current earnings" used in the calculation of fed- eral alternative minimum taxable income of corporations, and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income and the alternative minimum tax base. See Appendix A - Proposed Form of Legal Opinion. PURPOSE The purpose of the Bonds is to provide moneys, along with other available City funds, to finance improvements to the sewer utility system including, but not limited to, sanitary sewer line extensions, water main and line extensions, stonn sewer, streets, sidewalks and curb & gutter. See Estimated " Source and Application of Funds herein for additional infonnation. OFFICIAL STATEMENT . No Final Official Statement will be prepared. The Issuer will provide the successful Underwriter with an addendum that together with this Preliminary Official Statement will be deemed the Final Official Statement by the Issuer. . -9- ST A TUTORY DEBT LlMITI Minnesota Statutes, Section 475.53, states that a city may not incur or be subject to a net debt in excess .' of two percent (2%) of its estimated market value. Net debt is, with limited exceptions, debt paid solely from ad valorem taxes. Computation of Legal Debt Margin as of August 16, 2001, plus this issue: 2000/2001 Estimated Market Value $ 98,697,300 Times 2% of Estimated Market Value x .02 Statutory Debt Limit $ 1.973.946 Amount of debt applicable to debt limit: Total Bonded Debt (includes this issue) $ 6,740,000 Less: General Obligation Improvement Bonds ( 4,045,000) General Obligation Water Revenue Bonds ( 930,000) General Obligation Sewer Revenue Bonds (this issue only) ( 640.000) Total debt applicable to debt limit $ 1.125.000 Legal debt margin $ 848.946 . . 1 Pursuant to Minnesota. St.atutes 465.71, any lease r~venue or public project revenue bond issues/agreements over S999,999 are subject to the statutorx debt hmlt. Lease revenue or public project revenue bond issues/agreements under S999,999 are not subject to the statutory debt limit. -10- ESTIMATED SOURCE AND APPLICATION OF FUNDS I. Source of Funds . General Obligation Sewer Revenue Bonds of2001 $ 640.000 \ II. Application of Funds Estimated Costs to be Financed: Sewer Transportation Capacity $860,100 Less City Contribution (247.000) Total Estimated Costs to be Financed $ 613,100 \ Add Estimated Issuance Costs: [Bond counsel, financial advisory fee, and paying agent! registration (one time fee)] $ 16,650 Underwriter's Discount (1.600% of par) 10.240 Total Estimated Issuance Costs 26.890 Subtotal $ 639,990 Rounded for Issuance 10 \ Par Amount of Bond Issue $ 640.000 . . -11- FUTURE FINANCING The City does not anticipate the need to finance any capital improvements with the issuance of general · obligation bonds within the next two months. BOND RATING The City of St. Joseph currently has a general obligation bond rating of "Baa2" assigned by Moody's Investors Service. The City will not apply to Moody's for a rating on this issue. LITIGATION I On May 4, 2001, the City Attorney, Rajkowski Hansmeier Ltd., John H. Scherer, indicated that no liti- gation is pending or threatened that would jeopardize the creditworthiness of the City or Authority. Claims or other actions in which the City is a defendant are covered by insurance or are of insignificant amounts. CERTIFICATION The City will furnish, upon request, a statement to the effect that this Official Statement to the best of their knowledge and belief, as of the date of sale and the date of delivery, is true and correct in all ma- terial respects, and does not contain any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. LEGALITY · Legal matters incident to the authorization and issuance of the Bonds are subject to the approving opinion of Bond Counsel, as to validity and tax exemption. A copy of such opinion will be available at the time of the delivery of the Bonds. See Appendix A - Proposed Form of Legal Opinion. Bond Counsel has not participated in the preparation of the Official Statement and is not passing upon its accuracy, completeness or sufficiency. Bond Counsel has not examined, nor attempted to examine, or verify, any of the financial or statistical statements or data contained in this Official Statement, and will express no opinion with respect thereto. FINANCIAL ADVISOR The City has retained Juran & Moody, a division of Miller Johnson Steichen Kinnard, Inc. as financial advisor (the "Financial Advisor") in connection with the issuance of the Bonds. In preparing the Official Statement, the Financial Advisor has relied upon governmental officials, and other sources who have access to relevant data to provide accurate information for the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been engaged by the Issuer to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards. Pursuant to Rule G-23 of the Municipal Securities Rulemaking Board, the City reserves the right to invite the Financial Advisor to participate in the underwriting of the Bonds. If any entity or company associated with the Financial Advisor submits a competitive bid, it shall fax said bid to the City (Fax No. 320-363-0342) at least fifteen (15) minutes prior to the deadline otherwise established for the receipt of such a bid. · -12- CONTINUING DISCLOSURE UNDERTAKING · In order to assist the Underwriters in complying with SEC Rule 15c2-12 (the "Rule"), pursuant to the Award Resolution and a Continuing Disclosure Undertaking to be executed on behalf of the City on or before Bond Closing, the City has and will covenant (the "Undertaking") for the benefit of holders of the Bonds to provide certain financial information and operating data relating to the City to certain in- formation repositories annually, and to provide notices of the occurrence of certain events enumerated in the Rule to certain information repositories or the Municipal Securities Rulemaking Board and to any state information depository. The specific nature of the Undertaking, as well as the information to be contained in the annual report or the notices of material events is set forth in the Continuing Disclosure Undertaking in substantially the form attached hereto as Appendix B. The City has never failed to comply in all material respects with any previous Undertakings under the Rule to provide an- nual reports or notices of material events. A failure by the City to comply with the Undertaking will i not constitute an event of default on the Bonds (although holders will have an enforceable right to spe- ì cific performance). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. The Issuer will covenant in the resolution awarding the sale of the Bonds and in a Continuing Disclosure Undertaking to provide, or cause to be provided, annual financial information, including audited financial statements of the Issuer, and notices of certain material events, as required by SEC Rule 15c2-l2. Please see Appendix B - Form of Continuing Disclosure Undertaking for further infor- mation regarding continuing disclosure for the City ofSt. Joseph, Minnesota. I · ¡ · -13- BOOK-ENTRY ONL Y SYSTEM The Depository Trust Company (the" DTC"), New York, New York, will act as securities depository . for the Obligations. Upon issuance of the Obligations, one fully registered Obligation will be registered in the name of Cede & Co., as nominee for DTC, for each maturity of the Obligations as set forth on the cover page hereof, each in the aggregate principal amount of such maturity. So long as Cede & Co. is the registered owner of the Obligations, references herein to the holders of the Obligations or regis- tered owners of the Obligations shall mean Cede & Co. and shall not mean the Beneficial Owners of the Obligations. DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Unifonn Commercial Code and a "clearing agency" registered pursuant to the provisions of § 17 A of the Secu- rities Exchange Act of 1934, as amended. DTC was created to hold securities of its participants (the "DTC Participants") and to facilitate the clearance and settlement of securities transactions among DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Par- ticipants include securities brokers and dealers, banks, trust companies, clearing corporations, and cer- tain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with DTC Participants, either directly or indirectly (the "Indirect Participants"). The Interest of each of the Beneficial Owners of the Obligations will be recorded through the records of a DTC Participant or Indirect Participant. Each DTC Participant will receive a credit balance on the records of DTC. Individual purchases will be made in the denomination of $5,000 or any whole multi- ple thereof. Beneficial owners of Obligations will receive a written confinnation of their purchases providing details of the Obligations acquired. Beneficial owners of Obligations will not receive certifi- cates representing their ownership interest in the Obligations, except as specifically provided below. . Transfers of beneficial ownership interest in the Obligations will be accomplished by book entries made by DTC and, in turn, by the DTC Participants who act on behalf of the Indirect Participants and the Beneficial Owners of Obligations. For every transfer and exchange of beneficial ownership of Ob- ligations, the beneficial owner may be charged a sum sufficient to cover any tax, fee or other govern- mental charge that may be imposed in relation thereto. The Issuer will make payments of principal and interest on the Obligations to DTC or its nominee, Cede & Co., as registered owner of the Obligations. Upon receipt of moneys, DTC's current practice is to immediately credit the accounts of the DTC Participants in accordance with their respective holdings shown on the records of DTC. Payments by DTC Participants and Indirect Participants to Beneficial Owners will be governed by standing instructions and customary practices such as those which are now the case for municipal securities held in bearer fonn or registered in "street name" for the accounts of customers and will be the responsibility of such DTC Participants or Indirect Participants and not the responsibility of DTC or the Issuer, subject to any statutory and regulatory requirements as may be in effect from time to time. . -14- TAX EXEMPTION · At closing Bond Counsel will render an opinion that, at the time of their issuance and delivery to the original purchaser, under present federal and State of Minnesota laws, regulations, rulings and deci- sions (which excludes any pending legislation which may have a retroactive effect), the interest on each Bond is excluded from gross income for purposes of United States income tax and is excluded, to the same extent, in computing both gross income and taxable net income for purposes of State of Minnesota income tax (other than Minnesota franchise taxes measured by income and imposed on cor- porations and financial institutions), and that interest on the Bonds is not an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations or the Minnesota alternative minimum tax applicable to individuals, estates or trusts; provided that inter- est on the Bonds is subject to federal income taxation to the extent it is included as part of adjusted cur- rent earnings for purposes of computing the alternative minimum tax imposed on certain corporations. No opinion will be expressed by Bond Counsel regarding other federal or state tax consequences caused by the receipt or accrual of interest on the Bonds or arising with respect to ownership of the Bonds. Preservation of the exclusion of interest on the Bonds from federal gross income and state gross and taxable net income, however, depends upon compliance by the City with all requirements of the Internal Revenue Code of 1986, as amended, (The "Code") that must be satisfied subsequent to the is- suance of the Bonds in order that interest thereon be (or continue to be) excluded from federal gross income and state gross and taxable net income. , The City will covenant to comply with requirements necessary under the Code to establish and main- tain the Bonds as tax-exempt under Section 103 thereof, including without limitation, requirements re- I lating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds. OTHER FEDERAL TAX CONSIDERATIONS · Property and Casualty Insurance Companies Property and casualty insurance companies are required to reduce the amount of their loss reserve de- duction by 15% of the amount of tax-exempt interest received or accrued during the taxable year on certain obligations acquired after August 7, 1986, including interest on the Bonds. Foreign Insurance Companies Foreign companies carrying on an insurance business in the United States are subject to a tax on in- come which is effectively connected with their conduct of any trade or business in the United States, including "net investment income." Net investment income includes tax-exempt interest such as inter- est on the Bonds. J Branch Profits Tax A foreign corporation is subject to a branch profits tax equal to 30% of the "dividend equivalent amount" for the taxable year. The" dividend equivalent amount" is the foreign corporation's "effec- tively connected earnings and profits," adjusted for increase or decrease in "u.s. net equity." A branch's earnings and profits may include tax-exempt municipal bond interest, such as interest on the Bonds. Passive Investment Income of S Corporations Passive investment income, including interest on the Bonds, may be subject to federal income taxation under Section 1375 of the Code for an S corporation that has Subchapter C earnings and profits at the · close of the taxable year if more than 25% of the gross receipts of such S corporation is passive investment income. -15- General The preceding is not a comprehensive list of all federal tax consequences which may arise from the re- · ceipt or accrual of interest on the Bonds. The receipt or accrual of interest on the Bonds may otherwise affect the federal income tax (or Minnesota income tax or franchise tax) liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items of in- come or deductions. All prospective purchasers of the Bonds are advised to consult their own tax advi- sors as to the tax consequences of, or tax considerations for, purchasing or holding the Bonds. Qualified Tax-Exempt Obligations The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b )(3) of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obliga- tions. "Qualified tax-exempt obligations" are treated as acquired by a financial institution before August 8, 1986. Interest allocable to such obligations remains subject to the 20% disallowance under prior law. I · (Remainder of page left intentionally blank) · -16- CITY OF ST. JOSEPH . GENERAL INFORMATION Access and TransDortation The City of St. Joseph, situated in Stearns County, is located in the central portion of Minnesota. The City lies approximately 8 miles northwest ofSt. Cloud, 70 miles northwest of the Minneapolis-St. Paul Metropolitan Area and 160 miles southwest of Duluth. Access is provided via County Roads 2 and 75. In addition, Interstate Highway 94 lies just 1 mile west of the City, U.S. Highway 10 lies 10 miles east of the City, and State Highways 15 and 23 lie 8 and 5 miles south of the City, respectively. Principal truck lines serving the City include Scherer & Sons Trucking as well as Anderson Trucking. Burlington Northern Santa Fe Railroad provides rail service to the City. There are approximately sev- enteen miles of paved streets within the City's corporate limits. Tax Base For taxes collectable in 2001, the tax breakdown is 54.31% residential homestead (non-agriculture), .59% agricultural, 26.83% commercial & industrial, .70% public utility, .28% railroad operating ~ property, 12.56% non-homestead residential, 1.54% other, and 3.19% personal property. Area 1,150 Acres . (1.797 Square Miles) PODulation 1970 Census 1,786 1980 Census 2,994 1990 Census 3,367 2001 Estimate 5,074 MuniciDal Facilities Revenue Producing Facilities: The Waterworks System has approximately 994 connections served by a 550,000 gallon elevated stor- age facility along with three municipal wells that have the capacity to pump 1,000 gallons per minute or 1,440,000 gallons per day. Average demand is 290,000 gallons per day while peak demand reaches 675,000 gallons per day. Total tap water hardness is 20 parts per million. The 2000 audited operating revenues were $177,945 with the average charge per year per household and commercial at approximately $179. The Sewer System has approximately 1,085 connections served by a 13,000,000 gallon per day waste- water treatment facility along with two lift stations. The City became part of the St. Cloud Interceptor System in 1986 and all wastewater is pumped to St. Cloud. Average demand is 9,500,000 gallons per . day while peak demand reaches 11,000,000 gallons per day. The 2000 audited operating revenues were $238,184 with the average charge per year per connection at approximately $220. -17- Refuse Collection System. The City operates a waste management system for its refuse collection sys- tem. The 2000 audited operating revenues were $125,586 with net income before operating transfers of $29,901. · Other Municipal Services: Fire & Rescue Department. The City currently has a 29-member volunteer fire department consisting of two various size pumper/ladder trucks, two tankers, one grass rig, one snowmobile with rescue sled, one emergency/rescue vehicle as well as other miscellaneous fire fighting and rescue equipment. Police Department. The City operates its own police department providing 24-hour coverage. Staff in- cludes one chief of police, one sergeant, five officers, four full-time and one part-time, and three re- serve officers. The city owns three fully equipped patrol cars, all fully computerized, as well as other miscellaneous equipment. All dispatching is provided by the Stearns County Sheriffs Department. Park and Recreational Facilities. The City currently operates four municipal parks encompassing ap- proximately 100 acres. Facilities include two tot lots, two baseball/softball fields, sheltered picnic areas with a fireplace, walking paths, wildlife areas, a camping area with ten electrical hookup sites, and general playground equipment. In addition, the City provides summer recreation programs for children of all ages with varied activities. The combination of these parks and facilities contain a complete rec- reation and park system throughout the City. City Government ( St. Joseph, organized on January 17, 1890, is a Minnesota Statutory City with an Optional Plan A form of government. It has a mayor elected at large for a two-year term and four council members also elected at large for four-year terms. The professional staff is appointed and consists of a city adminis- trator, finance director, economic development director, city attorney, and city engineer. · The City recently revised its Comprehensive Plan that illustrates current land use within the City and the surrounding two-mile radius. The Plan includes Land Use Planning Goals and objectives including social, economic and transportation issues, as well as Projected Growth Areas outlining desired growth and statistical demographics. In addition, the City achieved Star City status that includes short term as well as long term goals. As a result, St. Joseph formed an Economic Development Authority and hired a full-time Economic Development Director. Further, the City and Township of St. Joseph have signed and adopted a joint merger/consolidation agreement that will consolidate the majority of St. Joseph Township with the City of St. Joseph. The plan identifies annexation areas in 5, 10, 15 and 20-year increments. Employee Pension Proarams The City employs twenty-five people, fifteen full-time, three part-time, and seven seasonal. The pension plan covers fourteen of the City's employees as of December 31, 2000. The City participates in contributory pension plans through the Public Employees Retirement Association (PERA) under Minnesota Statutes, Chapters, 353 and 356, which covers all full-time and certain part-time employees. PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost sharing, multiple-employer retire- ment plans. This plan is state administered and is coordinated with the Federal Social Security Retirement Plan (FICA) and employees are vested after three years of credited service. State statute re- quires the City to fund current service pension cost as it accrues. Prior service cost is being amortized over a period of 40 years and is being funded by payment determined as a percentage of gross wages paid by all employers participating in the State Association. · -18- The City's contributions to PERA for the past nine years have been as follows: Year Amount Year Amount . - 2000 $41,862 1995 $30,826 1999 39,581 1994 25,964 1998 38,774 1993 25,803 1997 35,186 1992 22,534 1996 32,947 The volunteer firefighters of the City are eligible for pension benefits through membership in the St. Joseph Fire Relief Association organized under Minnesota Statutes, Chapter 69, and administered by a separate Board elected by the membership. This plan is funded by state aids as well as contribu- tions :ITom the City of St. Joseph, St. Joseph Township and St. Wendell Township. The City is obli- gated to contribute to the Fund according to a fonnula that compares growth in the estimated pension liability to the annual estimated state aid and interest earnings of the pension fund. State statute re- quires this plan to fund current service cost as it accrues and prior service cost to be amortized over a period of ten years. Residential Development There are approximately 1,084 single-family homes and 244 multifamily units (112 structures) located \ within the City. In addition, there have been 37 single-family homes and two multiple dwellings con- structed within the past twelve months. The status of residential subdivisions constructed or planned within the past three years is as follows: Subdivision Total Number Number of Lots Remaining Lots ¡. Name of Lots/Dwellinf!s Comvleted Available Northland Five 54 Under construction 54 Pond View Six 67 Under construction 67 Industrial Parkes} There is an approximate 165-acre industrial park located within the City with a capacity of 39 enter- prises. Currently there are 20 enterprises occupying the park, the larger of which include DBL Labs Inc., W. Gohman Construction Co., MCa Lens Crafting, Borgert Concrete, and Vic West Steel. The City installed utility services to the industrial park in 1999 in anticipation of further development. / The City is in the process of developing the St. Joseph Industrial Park, a privately owned industrial park. The EDA Director is working with the current owner to market and sell lots. The park is being developed with utilities along with tax increment financing to qualified businesses. (Remainder of page left intentionally blank) . -19- Commercial/Industrial Development Building construction and commercial/industrial growth completed within the past three years has been · as follows: Description Name Product/Service of Construction Autobody 20001 Automotive Repair New construction Borgert Concrete Concrete Products Plant addition Casey's General Store Gas/Convenience Store New construction D & D Welding Welding Facility addition First State Bank ofSt. Josephl Financial Services New construction Individual Commercial Suites & Rental New construction Shroeder Sports Inc. WholesalelRetail Sporting Equipment New construction Spring Green 1 Lawn Service New construction Sunset Manufacturing Metal Fabricating Plant addition Building Permits Building permits issued for the past ten years and a portion of the current year have been as follows: Commercial/ Industrial Residential Total Total Number of Number Number Permit Year of Permits of Permits of Permits Valuation 2001 (as of 05/31/01) N/A N/A N/A $ N/A · 2000 5 64 69 8,718,600 1999 4 62 66 3,872,735 1998 15 85 100 6,558,780 , 1997 6 35 41 5,697,300 1996 0 27 27 4,386,375 1995 5 82 87 5,785,700 1994 6 85 91 11,192,000 1993 7 65 72 2,714,955 1992 5 48 53 1,817,857 1991 5 29 34 1,320,095 Financial Institutions Financial services are provided by First State Bank of St. Joseph. Reported deposits as of December 31, 2000, were $40,111,000 as obtained from the latest edition (spring 2001) of the McFadden Upper Midwest Financial DirectoryTM. · 1 Building construction and commerciallindustrial growth completed within the past twelve months. - 20- 1 Education '. S1. Joseph is served by Independent School District No. 742, S1. Cloud. The district operates eleven elementary schools, two junior high schools, two senior high schools and one area learning center. Directly located within City limits is one elementary school, grades kindergarten through four. Combined enrollment at the sixteen schools for the 2000/2001 school year was approximately 10,635. , In addition, there is one parochial school located within the City, St. Joseph Laboratory, which offers grades kindergarten through six. Further, the school is accredited by the Minnesota Nonpublic School Accrediting Association. Post secondary education is available at the following schools: Distance from School Tvve Location St. Joseph S1. Cloud Technical College V ocationaVTechnical S1. Cloud, Minnesota 8 Miles S1. Cloud Business College Business College S1. Cloud, Minnesota 7 Miles S1. Cloud Beauty School Beauty School S1. Cloud, Minnesota 7 Miles S1. Cloud State University State University S1. Cloud, Minnesota 10 Miles College of S1. Benedict Private College S1. Joseph, Minnesota o Miles S1. John's University Private University Collegeville, Minnesota 2 Miles Maior Emplovers The City has 22 retail or commercial enterprises in the downtown area employing an estimated 158 people, The following is a list of the thirteen largest employers within the City: ¡. Number of Commercial Product/Service Emvlovees College of S1. Benedict Private College 450 DBL Labs Inc. Ophthalmic Goods 177 Convent of S1. Benedict Monastery 102 W. Gohman Construction Co. Nonresidential Construction 45 MCa Lens Crafting Ophthalmic Goods 31 City ofS1. Joseph! City Government 25 S1. Joseph Laboratory Church/Private Education 23 Super America Gasoline Service Stations 21 Borgert Concrete Concrete Products 20 I Vic West Steel Fabricated Structural Metal 20 First State Bank of S1. Joseph Financial Services 18 St. Joe-Cold Spring Veterinarian Clinic Veterinary Clinic 15 Metro Plumbing & Heating Plumbing & Heating Contractor 13 . ! Constitutes fifteen full-time, three part-time, and seven seasonal employees. -21- Largest Taxpayers The following is a list of the ten largest taxpayers within the City as reported by Stearns County: . Percent of 2000/2001 Real Property Estimated 2000/2001 To Net Market Net Tax Tax Capacity , Name Service Value CaDacity ($1.372.853)1 Northern States Power Co. Utility $1,454,100 $49,283 3.59% Individual Trust Apartments 1,927,200 46,253 3.37 Borgert Concrete Products Inc. Commercial 1,005,900 34,201 2.49 Meadowlark Apartments Apartments 844,600 20,271 1.48 DSG Enterprises Commercial 610,900 19,271 1.40 St. Joseph's Assisted Living Inc. Apartments 741,000 17,784 1.30 Individual Commercial 530,900 16,551 1.21 Individual Commercial 460,900 14,170 1.03 Individual Commercial 449,500 13,783 1.00 Triple K Partnership Commercial 360,300 10,750 .78 ., (Remainder of page left intentionally blank) \ . I Before tax increment adjustment. -22- MINNESOTA V ALUA TIONS: PROPERTY TAX CLASSIFICATIONS Market Value . According to Minnesota Statutes, Chapter 273, all real property subject to taxation is to be appraised at maximum intervals of four years. All real property becoming taxable in any year is listed at its esti- mated market value on January 2 of that year. The estimated market value is the County Assessor's ap- praisal of the worth ofthe property. Indicated Market Value The Minnesota Department of Revenue conducts the Real Estate Sales Assessment Ratio Study to ac- complish equalization of property valuation in the State of Minnesota and to determine the probable selling price of a property. The study is a three-year average of sale prices as related to the latest asses- sor's estimated market value. The indicated market value is determined by dividing the estimated mar- ket value by the Sales Assessment Ratio for the city as determined by the Department of Revenue. Tax Cycle Minnesota local government ad valorem property taxes are extended and collected by the various counties within the state. The process begins in the fall of every year with the certification, to the county auditor, of all local taxing districts' property tax levies. Local tax rates are calculated by divid- ing each taxing district's levy by its net tax capacity. One percentage point oflocal tax rate represents one dollar of tax per $100 net tax capacity. A list of taxes due is then prepared by the county auditor and turned over to the county treasurer on or before the first Monday in January. The county treasurer is responsible for collecting all property taxes within the county. Real estate tax statements are to be mailed out no later than January 31 and personal property tax statements no later ;. than February 15. The due dates for payment of real property taxes are one-half on or before May 15 and one-half on or before October 15. Personal property taxes become due one-half on or before \ February 28 and one-half on or before June 30. Following each settlement (March 5, June 5, and November 5 of each year), the county treasurer must redistribute property tax revenues to the local taxing districts in proportion to their tax capacity ratios. Delinquent property taxes are penalized at various rates depending on the type of property and the length of delinquency. Tax Credits Prior to 1990, taxes on homestead residential and agricultural property were reduced by a direct sub- sidy to the taxpayer. Beginning in 1990, the homestead credit has been eliminated. The state subsidy is I now accomplished through lower class rates to homesteaded classifications of property and increased state aids paid directly to local taxing districts. This new system is intended to have generally the same impact as the former homestead credit system. Tax Levies for General Obligation Bonds (Minnesota Statutes, Section 475.61) The governing body of any municipality issuing general obligations shall, prior to delivery of the obli- gations, levy by resolution a direct general ad valorem tax upon all taxable property in the municipality to be spread upon the tax rolls for each year of the term of the obligations. The tax levies for all years shall be specified and such that if collected in full they, together with estimated collections of special assessments and other revenues pledged for the payment of said obligations, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the . obligations. Such resolution shall irrevocably appropriate the taxes so levied and any special assess- ments or other revenues so pledged to the municipality's debt service fund or a special debt service fund or account created for the payment of one or more issues of obligations. -23- The governing body may, at its discretion, at any time after the obligation have been authorized, adopt a resolution levying only a portion of such taxes, to be filed, assessed, extended, collected and remitted as hereinafter provided, and the amount or amounts therein levied shall be credited against the tax re- · quired to be levied prior to delivery of the obligations. The recording officer of the municipality shall file in the office of the county auditor of each county in which any part of the municipality is located a certified copy of the resolution, together with full in- fonnation regarding the obligations for which the tax is levied. No further action by the municipality is required to authorize the extension, assessment and collection of the tax, but the municipality's liability on the obligations is not limited thereto and its governing body shall levy and cause to be extended, assessed and collected any additional taxes found necessary for full payment of the principal and inter- est. The auditor shall annually assess and extend upon the tax rolls the amount specified for such year in the resolution, unless the amount has been reduced as authorized below or, if the municipality is lo- cated in more than one county, the portion thereof that bears the same ratio to the whole amount as the tax capacity value of taxable property in that part of the municipality located in his county bears to the tax capacity value of all taxable property in the municipality. Tax levies so made and filed shall be irrevocable, except that if the governing body in any year makes an irrevocable appropriation to the debt service fund of moneys actually on hand or if there is on hand any excess amount in the debt service fund, the recording officer may certify to the county auditor the fact and amount thereof and the auditor shall reduce by the amount so certified the amount otherwise to be included in the rolls next thereafter prepared. All such taxes shall be collected and remitted to the municipality by the county treasurer as other taxes are collected and remitted, and shall be used only for payment of the obligations on account of that levied or to repay advances from other funds used for such payments, except that any surplus remain- ing in the debt service fund when the obligations and interest thereon are paid may be appropriated to any other general purpose by the municipality. Class Rate · The factors (class rates) for converting estimated market value to net tax capacity represent a basic element of the State's property tax relief system and are therefore subject to annual revisions by the State Legislature. (Remainder of page left intentionally blank) · -24- The following is a partial summary ofthese factors: · Property Tax Classifications Class Rate Schedule 1997/ 1998/ 1999/ 2000/ 2001/ Class Tvpe of ProperlY 1998 1999 2000 2001 2002 \ Residential Homestead la Under $72,000 Over $72,001 Under $75,000 1.000% 1.000% Over $75,001 1.850 1.700 Under $76,000 1.000% 1.000% 1.000% $76,001-$500,000 1.650 1.650 1.000 \ Over $500,001 1.650 1.650 1.250 2a Agricultural Land & Buildings Homestead: Under $115,000 .400 .350 .350 .350 .550 $115,000-$600,000 Under 320 Acres .900 .800 .800 .800 .550 Over 320 Acres 1.400 1.250 .800 .800 .550 Over $600,001 Under 320 Acres .900 .800 1.200 1.200 1.000 Over 320 Acres I.400 1.250 1.200 1.200 1.000 2b Non-Homestead Agricultural Land 1.400 1.250 1.200 1.200 1.200 3a CommerciallIndustrial Public Utility Under $100,000 Over $100,001 · Under $150,000 2.700 2.450 2.400 2.400 1.500 Over $150,001 4.000 3.500 3.400 3.400 2.000 Residential Non-Homestead 4d Apartments: 1 to 3 units J 1 Unit 1.900 1.000 1.000 1.000 .900 2 or 3 units 2.000 I.OOO 1.000 1.000 .900 4a 4 or more units 2.900 2.500 2.400 2.400 1.800 Small cities less than 5,000 population with 4 or more units 2.300 2.150 2.150 2.150 1.800 4bb(2) Under $75,000 1.900 1.250 Over $75,001 2.100 1.700 Under $76,000 1.200 I.200 1.000 $76,001-$500,000 1.650 I.650 1.000 Over $500,001 1.650 1.650 1.250 4b(4) Vacant Land 2.1 00 1.700 1.650 1.650 1.500 4c(1 ) Seasonal Recreational/Commercial Non-Commercial: Under $75,000 1.400 1.250 Over $75,001 2.500 2.200 Under $76,000 1.200 1.200 1.000 $76,001-$500,000 1.650 1.650 1.000 Over $500,001 1.650 1.650 1.250 Resorts: lc Homestead Under $500,000 1.000 1.000 1.000 I.OOO 1.000 Over $500,000 1.000 1.000 1. 000 1.000 1.000 4c(2) Seasonal Under $500,000 2.100 1.800 1.650 1.650 I.OOO · Over $500,000 2.100 1.800 1.650 1.650 1.250 -25- CITY OF ST. JOSEPH ECONOMIC AND FINANCIAL INFORMATION · Valuations , Estimated Net Tax Market Value Capacity 2000/2001 2000/2001 Real Property $97,321,700 $1,372,853 Personal Property 1,375,600 45,270 Less Tax Increment Deduction ( 486) Total Valuation $98.697.300 $IAI7.637 Market Value after Sales Assessment Ratio The Minnesota Department of Revenue conducts the Real Estate Sales Assessment Ratio Study to ac- complish equalization of property valuations in the State and to determine the probable selling price of a property. The Study is a three-year average of sale prices as related to the latest assessor's market value. The latest Sales Assessment Ratio (2000) in St. Joseph is 89.7% meaning the County Auditor's recorded real property market value of $97,321,700 is 89.7% of the probable resale market value. We have made the following computations in deriving the market value figure used in the" Summary of Debt and Debt Statistics." $ 97,321,700 County Auditor's recorded real property market value. · 89.7% Latest Composite Ratio from the Real Estate Sales Assessment Ratio Study of the Minnesota Department of Revenue. = $ 1 08,496,878 Indicated market value of real property. + 1 .375.600 Personal property. = $109.872.478 Indicated market value of real and personal property used in "Summary of Debt and Debt Statistics." · -26- Sales Assessment Ratio History · The Sales Assessment Ratio for the City of St. Joseph over the past ten years have been as follows: Year Ratio Year Ratio 2000 89.7% 1995 91.4% I 1999 90.2 1994 92.6 1998 89.2 1993 92.8 1997 90.7 1992 90.1 1996 90.3 1991 89.0 I Valuation Trends (Real and Personal Property) Valuation trends for the City ofSt. Joseph over the past ten years have been as follows: Net Tax Net Tax Capacity Capacity Levy Year/ Indicated Estimated Before Tax After Tax Collection Year Market Value Market Value Increments Increments 200012001 $109,872,478 $98,697,300 $1,418,123 $1,417,637 1999/2000 97,950,303 87,514,500 1,234,989 1,234,635 1998/1999 87,072,654 77,808,700 1,089,251 1,089,251 1997/1998 77,892,338 69,615,700 1,065,687 1,063,403 1996/1997 71,277,331 64,758,400 1,101,470 1,098,843 1995/1996 67,904,520 61,428,100 1,048,424 1,045,798 1994/1995 60,714,661 55,493,200 940,486 940,486 · 1993/1994 52,537,473 48,649,700 825,087 825,087 1992/1993 46,080,062 42,821,100 700,198 700,198 1991/1992 43,056,194 38,868,000 668,469 668,469 Breakdown of Valuations 2000/2001 Estimated Market Value, Real and Personal Property: Real Property I $97,321,700 98.61 % Personal Property 1.375.600 1.39 Total $98.697.300 100.00% 2000/2001 Net Tax Capacity, Real and Personal Property (before tax increment deduction): Residential Homestead $ 770,181 54.31 % Agricultural 8,322 .59 Commercial & Industrial 380,494 26.83 Public Utility 9,911 .70 Railroad Operating Property 3,924 .28 Non-Homestead Residential 178,148 12.56 Other 21,873 1.54 Personal Property 45.270 3.19 Total $ 1.418.123 100.00% · Breakdown of Estimated Market Value for the City ofSt. Joseph is not available from Stearns County. -27- Net Tax Capacity Rate History The following are tax rates for the City of St. Joseph for the past five-assessable/collection years: · 1996/97 1997/98 1998/99 1999/00 2000/01 Net Tax Net Tax Net Tax Net Tax Net Tax Levy Year/ Capacity Capacity Capacity Capacity Capacity I Collection Year Rates Rates Rates Rates Rates County of Steams 36.388% 39.024% 42.122% 42.841 % 42.417% City of St. Joseph 35.177 42.334 42.786 42.433 46.718 ISD No. 742, St. Cloud 50.320 50.749 53.279 52.737 47.565 Sauk. River Watershed .209 .279 .230 .567 .365 Steams County HRA .270 .304 .606 .568 .497 Totals 122.364 132.690 139.023 139.146 137.562 Tax Levies and Collections Levy Year/ 1996/ 1997/ 1998/ 1999/ Collection Year 1997 1998 1999 2000 Original Gross Tax Levy $386,560 $450,429 $466,047 $523,893 Property Tax Credits! N/A N/A N/A N/A Levy Adjustments ( 0) ( 0) ( 75) ( 0) Net Tax Levy $386,560 $450,429 $465,972 $523,893 · Amount Collected during Collection Year $378,625 $447,032 $461,263 $517,492 Percent of Net Tax Levy Collected 97.95% 99.25% 98.99% 98.78% Amount Delinquent at end of Collection Year $ 7,935 $ 3,397 $ 4,709 $ 6,401 Delinquencies Collected as of (12/31/99) ( 7,935) ( 3,397) ( 4,212) ( 0) Delinquencies Abated or Cancelled as of (12/31/99) ( 0) ( 0) ( 0) ( 0) Total Delinquencies Outstanding as of (12/31/99) $ 0 $ 0 $ 497 $ 6,401 Percent of Net Tax Levy Collected 100.00% 100.00% 99.89% 98.78% Note: 2000/2001 Gross Tax Levy $662,292 2000/2001 Net Tax Levy N/A · . ! Property tax credits are aids provided by the State of Minnesota and paid directly to the City. -28- CITY OF ST. JOSEPH, MINNESOTA GENERAL OBLIGATION DEBT · (As of September 5,2001, Plus This Issue) Purpose: \ Improvement Water Improvement Water Improvement Bonds Revenue Bonds Revenue Bonds 0 of1991 Bonds of 1991 of 1993 Bonds of 1996 of 1996 1997 Dated: 07/01/92 10/01/92 11101/93 06/01/96 06/01/96 04/01/97 Original Amount: $200,000 $475,000 $550,000 $780,000 $1,280,000 $1,235,000 Maturity: I-Dee I-Dee I-Dee l-Dec I-Dee 1-Dec Interest Rates: 4.00-6.25% 4.00-6.00% 3.00-5.30% 4.30-6.00% 4.30-5.90% 4.00-5.75% \ 2001 $15,000 $45,000 $35,000 $25,000 $70,000 $40,000 2001 2002 15,000 45,000 35,000 25,000 75,000 45,000 2002 2003 15,000 45,000 40,000 25,000 80,000 45,000 2003 2004 15,000 50,000 40,000 30,000 85,000 50,000 2004 2005 20,000 50,000 . 45,000 30,000 85,000 50,000 2005 2006 20,000 0 45,000 35,000 90,000 55,000 2006 2007 20,000 0 45,000 40,000 95,000 55,000 2007 2008 0 0 50,000 40,000 100,000 60,000 2008 2009 0 0 0 45,000 105,000 65,000 2009 2010 0 0 0 45,000 115,000 65,000 2010 2011 0 0 0 50,000 120,000 70,000 2011 2012 0 0 0 55,000 0 75,000 2012 2013 0 0 0 55,000 0 80,000 2013 2014 0 0 0 60,000 0 85,000 2014 2015 0 0 0 65,000 0 90,000 2015 2016 0 0 0 70,000 0 95,000 2016 2017 0 0 0 0 0 100,000 2017 · 2018 0 0 0 0 0 0 2018 2019 0 0 0 0 0 0 2019 2020 0 0 0 0 0 0 2020 2021 0 0 0 0 0 0 2021 $120,000 $235,000 $335,000 $695,000 $1,020,000 $1,125,000 (1) (2) (1) (2) (1) (3) · -29- CITY OF ST. JOSEPH, MINNESOTA GENERAL OBLIGATION DEBT (As afSeptember 5,2001, Plus This Issue) · This Issue Purpose: Improvement Improvement Improvement Sewer Bonds of Bonds of Bonds Revenue 1998 1999 of2001 Bonds of2001 Dated: 11/01/98 10/01/99 09/0110 I 10/01/01 Original Amount: $545,000 $1,330,000 $810,000 $640,000 Maturity: I-Dee I-Dee I-Dec I-Dee Interest Rates: 3.90·5.00% 4.875-5.20% 3.00-3.85% -------% TOTALS: 2001 $25,000 $65,000 SO SO S320,000 2001 2002 30,000 70,000 160,000 25,000 525,000 2002 2003 35,000 70,000 160,000 25,000 540,000 2003 2004 35,000 75,000 160,000 25,000 565,000 2004 2005 35,000 80,000 165,000 25,000 585,000 2005 2006 35,000 80,000 165,000 25,000 550,000 2006 2007 35,000 85,000 0 25,000 400,000 2007 2008 35,000 90,000 0 25,000 400,000 2008 2009 45,000 95,000 0 25,000 380,000 2009 2010 45,000 100,000 0 30,000 400,000 2010 2011 45,000 105,000 0 30,000 420,000 2011 2012 45,000 110,000 0 30,000 315,000 2012 2013 50,000 115,000 0 30,000 330,000 2013 2014 0 125,000 0 35,000 305,000 2014 2015 0 0 0 35,000 190,000 2015 2016 0 0 0 35,000 200,000 2016 2017 0 0 0 40,000 140,000 2017 2018 0 0 0 40,000 40,000 2018 · 2019 0 0 0 45,000 45,000 2019 2020 0 0 0 45,000 45,000 2020 2021 0 0 0 45,000 45,000 2021 S495,000 SI,265,000 S810,000 S640,OOO S6,740,000 (I) (4) (1) (4) (5) (1) (6) (1) These bonds are payable primarily from special assessments and additionally secured by ad valorem taxes on all taxable property within the City and without lim iw lion of amount. (2) These bonds are payable primarily from net revenues of the municipal water system and additionally secured by ad valorem taxes on all taxable property within the City and without limitation of amount. (3) 77lese bonds are payable solely from ad valorem taxes on all taxable property within the City and without limitation of amount. (4) Maturities 2011 through 2013. inclusil·e. are subject to mandatory redemption on December 1 of their respective years. (5) These bonds have been addirionally secured by AMBAC 1demniry Corporation and are rated Aaa. (6) 77lese bonds are payable primarily from net revenues of the municipal sewer system and additionally secured by ad valorem taxes on all · - 30- EDA OF THE CITY OF ST. JOSEPH, MINNESOTA SPECIAL OBLIGATION DEBT · (As of September 5,2001) \ Purpose: Public Project Revenue Bonds of2000 Dated: 06/01/00 Original Amount: $960,000 Maturity: I-Dee Interest Rates: 5.60-6.60% \ 2001 40,000 2002 45,000 2003 45,000 2004 50,000 2005 50,000 2006 55,000 2007 60,000 2008 60,000 2009 65,000 2010 70,000 2011 75,000 2012 80,000 2013 80,000 2014 90,000 2015 95,000 $960,000 · (1) (1) These bonds are payable from annual appropriations to be made by the city's governing body. The full faith and credit of the City IS NOT pledged for the payment of principal and interest. · -31- Overlappina Debt 2000/2001 · 2000/2001 Net Tax Net Tax Capacity Percentage City's Capacity Value Applicable Share Issuer Value(l) in City(J) in Citv Net Debt of Debt Stearns County $77,046,583 $1,417,637 1.84% $29,350,820(2) $ 540,055 ISD No. 742, St. Cloud 52,903,276 1,417,637 2.68 16,565,668(3) 443,960 Stearns County HRA 46,609,738 1,417,637 3.04 1,070,000(4) 32.528 Total Overlapping Debt: $1.016.543 Overlapping Debt Future Financing Stearns County Stearns County does not anticipate the issu- ance of any additional bonding within the next two months. ISD No. 742, St. Cloud ISD No. 742, St. Cloud does not anticipate the issuance of any additional bonding within the next two months. Stearns County HRA Stearns County HRA recently issued $1,070,000 Housing Development Bonds, · Series 200lA, dated July 1, 2001. This debt has been included in the above overlapping debt figures. The HRA does not anticipate the issuance of any additional general obligation bonding within the next two months. (1) Taxable Net Tax Capacity value after tax increment adjustment. · (2) Steams County reported bond indebtedness of $32,425,000 and sinking funds of 53,074, 180 as of December 31, 2000. (3) ISD No. 742, St. Cloud, reported bond indebtedness of $18,600,000 and sinking funds of $2,034,332 as of December 31, 2000. (4) Steams County HRA has bond indebtedness of$I,070,000 and sinking funds of$O as of July 1,2001. - 32- 1 Cash and Investment Balances as of Mav 31 , 2001 (Unaudited) . Fund General Fund $ 871,823 Special Revenue Funds 469,179 (1 ) Debt Service Funds 1,641,888' (2) Enterprise Funds 920.165 (3) Total Cash and Investment Balances $3.903.055 ¡ . (1) Includes the following Special Revenue Funds: #105 Fire Fund $ 523,530.10 #106 Street Maintenance Fund ( 92,024.27) # 119 Fire Station Facility Fund 1,785.92 #210 Recreation Center Fund 34,599.05 #225 Dare Fund 978.67 #230 Lake Wobegon Trail Fund 309.47 (2) Includes the following Debt Service Funds: #308 1992 Improvement Fund $ 35,684.28 #309 1992A Improvement Bonds - Water Storage Fund 35,691.66 #3141996 Water Filtration Improvement Fund 454,854.19 #3151996 East MN Street Improvement Fund 661,857.43 #317 1997 Fire Facility Fund 214,547.66 #319 1998 Street Improvement Fund 196,142.26 #321 Joseph Street Improvement Fund ( 66,021.80) City Hall Improvement Fund 13,886.60 #501 Trunk Sewer Fund 95,245.61 (3) Includes the following Enterprise Funds: #601 Water Fund $ 223,900.24' #602 Sewer Fund 578,538.38 . #603 Refuse Collection Fund 117,725.89 · Funds available for debt service on outstanding general obligation bonded indebtedness. Total cash and investment fund balances available for debt service is $1,865,788.13. -33- SUMMARY OF DEBT AND DEBT STATISTICS General Obliaation Debt · Bonds secured by special assessments $ 4,045,000 Bonds secured by net water revenues 930,000 Bonds secured by ad valorem taxes 1,125,000 Bonds secured by sewer revenues (this issue only) 640.000 Total General Obligation Direct Debt $ 6,740,000 Less: debt service funds ( 1,641,888) water fund ( 223,900) Net Direct General Obligation Debt $ 4,874,212 Add City's share of net overlapping debt 1.016.543 Total Net Direct and Net Overlapping Debt $ 5.890.755 Special Obliaations $960,000 Public Project Revenue Bonds of2000 $ 960,000 · Facts for Ratio Computations 2000/2001 Indicated Market Value (real and personal property) $109,872,478 2000/2001 Net Tax Capacity (real and personal property, after tax increment adjustment) $1,417,637 Population (2001 Estimate) 5,074 Debt Ratios Net Direct Net Net and Net Direct Direct Overlapping Overlapping Debt Debt Debt Debt To Indicated Market Value 6.13% 4.44% .93% 5.37% Per Capita S 1,328 $961 $200 $ 1,161 Per Capita Adjusted 1 S 959 $694 $144 $ 838 · 1 The City's tax base is 26.83% commercial & industrial, .70% public utility, and .28% railroad operating property, which has been deducted. -34- $640,000 GENERAL OBLlGA TION SEWER REVENUE BONDS OF 2001 CITY OF ST. JOSEPH, MINNESOTA · (STEARNS COUNTY) CUMULATIVE BOND YEARS AND WORKSHEET (DEe. 1) CUMULATIVE YEAR AMOUNT BOND YEARS BOND YEARS 2002 $ 25,000 29.167 29.167 2003 25,000 54.167 83.333 2004 25,000 79.167 162.500 2005 25,000 104.167 266.667 2006 25,000 129.167 395.833 2007 25,000 154.167 550.000 2008 25,000 179.167 729.167 2009 25,000 204.167 933.333 2010 30,000 275.000 1,208.333 2011 30,000 305.000 1,513.333 2012 30,000 335.000 1,848.333 2013 30,000 365.000 2,213.333 2014 35,000 460.833 2,674.167 2015 35,000 495.833 3,170.000 2016 35,000 530.833 3,700.833 2017 40,000 646.667 4,347.500 2018 40,000 686.667 5,034.167 2019 45,000 817.500 5,851.667 2020 45,000 862.500 6,714.167 2021 45,000 907.500 7,621.667 · AVERAGE MATURITY: 11.90885 years. BONDS DATED: October 1,2001. INTEREST PAYMENTS: June 1, 2002, and semiannually thereafter on June 1 and December 1 to registered owners of the Bonds appearing of record in the bond register as of the close of business on the fifteenth (15th) day (whether or not a busi- ness day) of the immediately preceding month. REDEMPTION: At the option of the Issuer, Bonds maturing after December 1,2009, shall be subject to prior payment on said date, and any date thereafter, at a price of par and accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the Bonds remaining unpaid which have the latest maturity date shall be prepaid first. If only part of the Bonds having a common maturity date are called for prepayment, the Issuer will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Notice of such call shall be given by mailing a notice thereof by registered of certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registered books. PROPOSAL: Sealed proposals of not less than $629,760 and accrued interest. Good faith check or a Financial Surety Bond for $12,800 must accompany the proposal. RATES: All rates must be integral multiples of 1/20th or 1/8th of 1 %. No limi- · tation is placed upon the number of rates which may be used. All Bonds of the same maturity must bear a single uniform rate from date of issue to maturity. ESTIMATED CLOSING DATE: October 9, 2001. -35- PROPOSAL FORM ¡. DATED: SEPTEMBER 20,2001 HONORABLE CITY COUNCIL CITY OF ST, JOSEPH ST. JOSEPH, MINNESOTA FOR ALL OF THE $640,000 GENERAL OBLIGATION SEWER REVENUE BONDS OF 2001, OF YOUR CITY AS DESCRIBED IN THE OFFICIAL TERMS OF BOND SALE, WE WILL PAY YOU DOLLARS ($ ) (NOT LESS THAN $629,760) PLUS ACCRUED INTEREST FROM THE DATE OF SAID BONDS TO THE DATE OF DELIVERY. SAID BONDS SHALL BEAR INTEREST PAYABLE JUNE 1,2002, AND SEMIANNUALLY EACH JUNE 1 AND DECEMBER 1 THEREAFTER AS FOLLOWS: % - 2002 % - 2006 % - 2010 % - 2014 % - 2018 % - 2003 % - 2007 % - 2011 % - 2015 % - 2019 % - 2004 % - 2008 % - 2012 % - 2016 % - 2020 % - 2005 % - 2009 % - 2013 % - 2017 % - 2021 DESIGNATION OF SERIAL AND TERM MATURITIES LAST YEAR OF SERIAL MATURITIES YEAR OF TERM MATURITIES PRINCIPAL WILL BE PAYABLE AT U.S. BANK TRUST NATIONAL ASSOCIATION, ST. PAUL, MINNESOTA. CUSIP NUMBERS WILL BE ISSUED AT THE COST OF THE SUCCESSFUL . UNDERWRITER. . THIS PROPOSAL IS FOR PROMPT ACCEPTANCE AND SUBJECT TO ALL TERMS IN THE OFFICIAL TERMS OF BOND SALE. WE ARE TO BE FURNISHED THE APPROVING LEGAL OPINION OF BOND COUNSEL, TOGETHER WITH THE DELIVERY OF THE PRINTED AND EXECUTED BONDS, WITHIN 40 DAYS AFTER AWARD OR AT OUR OPTION THEREAFTER. DELIVERY WILL BE MADE AT (SPECIAL INSTRUCTIONS-SEE OVER). ACCOUNT MEMBERS: ACCOUNT MANAGER BY: ACCEPTED FOR THE ADDRESSEE THIS DAY OF SEPTEMBER, 2001. BY: MAYOR ATTEST: CITY ADMINISTRA TOR/CLERK-TREASURER - - - - - - - - - - - - - -- - - - - -- - - - - - - - - - - - - - - - -- -.. - - - - - - - - - - - - - - - - - - - - - - - - - -- WE COMPUTE OUR TOTAL NET INTEREST COST TO BE $ FOR A NET INTEREST RATE OF %. THESE COMPUTATIONS ARE NOT A PART OF THIS OFFER. IT IS NOT NECESSARY TO USE THIS FORM; HOWEVER, ANY PROPOSAL MUST COMPLY WITH THE TERMS STATED IN THIS OFFICIAL TERMS OF BOND SALE. PLEASE SUBMIT THIS PROPOSAL IN DUPLlCA TE . -37- SPECIAL INSTRUCTIONS: .' SALE RESULTS WILL BE FURNISHED TO PROPOSAL MAKERS AT 8:30 A.M. ON THE DAY AFTER THE SALE AT 651-224-1500. IF RESULTS ARE DESIRED IMMEDIATELY, PLEASE COMPLETE THE FOLLOWING: CONTACT: TELEPHONE NUMBER: --................................................................. -- -- --..................................................-.... --...... . THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT FOR THE GOOD FAITH CHECK IN THE AMOUNT OF $12,800 TO BE RETURNED TO THE UNSUCCESSFUL PROPOSAL MAKER. JURAN & MOODY BY: . DATED: SEPTEMBER 20,2001 - 38- , '. This page left blank intentionally . . BRIGGS AND MORGAN W2200 First National Bank Building 332 Minnesota Street . Saint Paul, .MN 5510 1-13 96 Telephone 651-223-6600 Facsimile 651-223-6450 PROFESSIONAL ASSOCIATION www.briggs.com PROPOSED FORM OF LEGAL OPINION $640,000 GENERAL OBLIGATION SEWER REVENUE BONDS OF 2001 CITY OF ST. JOSEPH STEARNS COUNTY MINNESOTA We have acted as bond counsel in connection with the issuance by the City of S1. Joseph, Steams County, Minnesota (the "Issuer"), of its $640,000 General Obligation Sewer Revenue Bonds of200l, bearing a date of original issue of October 1,2001 (the "Bonds"). We have \. examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and we express no opinion relating thereto. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon such examinations, and assuming the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such documents, and the accuracy of the statements of fact contained in such documents, and based upon present Minnesota and federal laws (which excludes any pending legislation which may have a retroactive effect on or before the date hereof), regulations, rulings and decisions, it is our opinion that: (1) The proceedings show lawful authority for the issuance of the Bonds according to their terms under the Constitution and laws of the State of Minnesota now in force. (2) The Bonds are valid and binding general obligations ofthe Issuer and all of the taxable . property within the Issuer's jurisdiction is subject to the levy of an ad valorem tax to pay the same without limitation as to rate or amount; provided that the enforceability (but not the validity) of the Bonds and the pledge of taxes for the payment of the principal and interest thereon is subject to the exercise of judicial discretion in accordance with general principles of equity, to the constitutional 1320379v1 ,. .. BRIGGS AND MORGAN . PROPOSED FORM OF LEGAL OPINION powers of the United States of America and to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted. (3) At the time of the issuance and delivery of the Bonds to the original purchaser, the interest on the Bonds is excluded from gross income for United States income tax purposes and is excluded, to the same extent, from both gross income and taxable net income for State of Minnesota income tax purposes (other than Minnesota franchise taxes measured by income and imposed on corporations and financial institutions), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations or the Minnesota alternative minimum tax applicable to individuals, estates or trusts; it should be noted, however, that for the purpose of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in detennining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest . thereon be, or continue to be, excluded from gross income for federal income tax purposes and from both gross income and taxable net income for State of Minnesota income tax purposes. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income and taxable net income retroactive to the date of issuance of the Bonds. We express no opinion regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Bonds or arising with respect to ownership of the Bonds. Professional Association . 1320379vl APPENDIX B · City's Financial Statements The following fmancial statements are excerpts from the annual fmancial report for the year ended December 31, 2000. The complete fmancial report for the year 2000 and the prior two years are avail- able for inspection at the St. Joseph City Hall and at the St. Paul office of Juran & Moody. The reader of this Official Statement should be aware that the complete fmancial report may have further data relating to the excerpts presented in the appendix which may provide additional explanation, interpretation or modification of the excerpts. Excerpts from the Financial ReDort ~ Combined Balance Sheet - All Fund Types and Account Groups ~ Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund Types ~ Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General and Special Revenue Fund Types ~ Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types ~ Combined Statement of Cash Flows - All Proprietary Fund Types ~ Notes to Financial Statements · · CITY OF ST. JOSEPH. MINNESOTA COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS December 31, 2000 . Governmental Fund Types Special Debt Capital ASSETS AND OTHER DEBITS General Revenue Service Proiects ASSETS: Cash and Investments (Including Cash Equivalents) $ 1,44Î,215 $ 36,058 $ 1,948.229 $ 212,406 Taxes Receivable - Delinquent 5,036 0 2.065 0 Special Assessments Receivable - Deferred 18,988 0 1,4 ÎO, no 163,117 Delinquent 208 0 3,091 0 Accounts Receivable 6,094 0 7.017 0 Notes Receivable 30,000 0 0 0 Interest Receivable 31.442 n9 41.312 4.495 Due from Other Governmental Units 199,096 0 58.458 0 Fixed Assets - Net 0 0 0 0 OTHER DEBITS: Amount Available in Debt Service Funds 0 0 0 0 Amount to be Provided from Special Assessments 0 0 0 0 Amount to be Provided for Compensated Absences Payable 0 0 0 0 Amount to be Provided for Retirement of General Long-Term Debt 0 0 0 O. TOTAL ASSETS AND OTHER DEBITS S 1.738.079 $ 36.837 $ 3,530.342 $ 380.018 LIABILITIES. EQU1TY AND OTHER CREDITS LIABILITIES: Cash Overdraft S 0 S 0 $ 0 S 265,414 Accrued Liabilities 102.791 0 0 60.319 Due to Other Governmental Units 0 0 0 0 Contracts Payable 0 0 0 23.079 Deferred Revenue 24.232 0 1,475.326 163.11Î Compensated Absences Payable 19,029 0 0 0 Bonds Payable 0 0 0 0 Loans Payable 0 0 0 0 Total Liabilities 146.052 0 1,475.326 511.929 EQUITY AND OTHER CREDITS: Investment in General Fixed Assets 0 0 0 0 Contributed Capital 0 0 0 0 Retained Earnings (Deficit) 0 0 0 0 Fund Balance - Reserved 30.000 0 2.055.016 0 Unreserved - Designated 903.044 0 0 0 Undesignated (Deficit) 658.983 36.837 0 (131.911) Total Eguity and Other Credits 1.592.02ï 36.837 2.055.016 (131.911) TOTAL LIABILITIES. EQUITY AND OTHER CREDITS S 1.ï38.079 $ 36.837 $ 3.530.342 $ 380.018. The notes to the financial statements are an integral part of this statement. · Proprietary Fund Types Account Groups General General Totals Fixed Long-Tenn (MemoIëùïdum Only) Enterprise Assets Debt 2000 1999 $ 918,114 $ 0 $ 0 $ 4.562,022 $ 4,378,840 0 0 0 7,101 5,363 0 0 0 1,652,275 1,935,739 0 0 0 3,299 899 177,690 0 0 190,801 161,420 0 0 0 30,000 50,000 20,608 0 0 98,636 57,459 0 0 0 257,554 131,032 4,448,300 3,515,497 0 7,963,797 7,282,501 0 0 2.055,016 2.055,016 1,802,436 0 0 1,473.261 1,4ì3,261 1,896.329 0 0 51.754 51,754 52,231 . 0 0 2.971.465 2.971.465 2.161.235 $ 5.564.712 $ 3.515.497 $ 6.551.496 $ 21.316.981 $ 19.915.484 $ 0 $ 0 $ 0 $ 265,414 $ 203,622 40,820 0 0 203,930 203,900 17,117 0 0 17,117 8,215 0 0 0 23,079 0 0 0 0 1.662.675 1,942,001 28.215 0 51. 754 98.998 111,692 0 0 6.250,000 6.250.000 5,860,000 0 0 249,742 249,742 0 86,152 0 6.551,496 8, ï70,955 8.329,430 0 3.515,497 0 3.515,497 2.712,031 5,519,572 0 0 5.519,572 5,519,572 (41.012) 0 0 (41.012) (72,226) 0 0 0 2.085.016 1.852,436 0 0 0 903,044 1,172,015 0 0 0 563.909 402.226 5.478.560 3.515.497 () 12.54ó.026 11,586,054 . $ 5.564,712 $ 3.515.497 $ 6.551.496 $ 21.316.981 $ 19,915.484 CITY OF ST. JOSEPH, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES, · i\ND CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES Year Ended December 31, 2000 Governmental Fund Types Special Debt General Revenue Service REVENUES: General Property Taxes $ 374,003 $ 0 $ 154,845 Special Assessments 24,880 0 423,297 Licenses and Pennits 73,607 0 0 Intergovernmental 617,422 0 62,701 Charges for Services 158,914 0 0 Fines 85,003 0 0 Miscellaneous 207,031 2,393 235.587 Total Revenues 1,540,860 2.393 876,430 EXPENDITURES: Current - General Government 266,496 92 0 Public Safety 725,973 0 0 Public Works 233,305 0 0 Culture and Recreation 152.835 0 0 Economic Development 65,292 0 0 Miscellaneous 1,600 0 0 · Capital Outlay 0 0 0 Debt Service 0 0 957,060 Total Expenditures 1.445.501 92 957,060 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 95.359 2,301 (80,630) OTHER FINANCING SOURCES (USES): Operating Transfers In 0 0 276,000 Operating Transfers Out (231,000) 0 0 Proceeds from Loans 0 0 0 Proceeds from the Sale of Bonds 0 0 61.750 Total Other Financing Sources (Uses) (231,000) 0 337,750 EXCESS OF REVENUES .i\ND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (135,641 ) 2,301 257,120 FUND BALANCE - January I 1.727,668 34,536 1,802,436 RESIDUAL EQUITY TRANSFER 0 0 (4,540) FUND BALANCE - December 31 $ 1.592,027 $ 36,837 $ 2,055.016 · The notes to the financial statements are an integral pai"t of this statement. · T otaIs Capital (Memorandum Only) Projects 2000 1999 $ 0 $ 528,848 $ 479,915 0 -448,177 261,962 0 73,607 82,156 0 -680,123 678,564 0 158,914 155,600 0 85,003 60,964 3,288 448,299 488,925 3,288 2,422,971 2,208,086 0 266,588 238,591 0 725,973 743,769 0 233)05 152,677 0 152,835 221,931 0 65,292 59,362 · 0 1,600 1,061 1,157346 1,157,346 1,630,872 (\ 957,060 525,707 v 1,157346 3.559,999 3,573.970 (1,154,058) (1,137,028) (1,365,884) 0 276,000 318,676 0 (231,000) (278.676) 276,136 276,136 0 879,434 941,184 1,299.599 I J 55.570 1.262,320 1,339,599 1,512 125,292 (26.285) (137,963 ) 3,426,677 3,452.962 4.540 0 0 $ (131.911) $ 3.551.969 $ 3,426.677 · CITY OF ST. JOSEPH, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES .WI) . CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUND TYPES Year Ended December 31,2000 General Fund Over (Under) Budget Actual Budget REVENUES: ~ General Property Taxes $ 368,465 $ 374,003 $ 5,538 Special Assessments 39,000 24,880 (14,120) Licenses and Pennits 60,400 73,607 13,207 Intergovernmental 605,913 617,422 11,509 Charges for Services 160,113 158,914 (1,199) Fines 66,150 85,003 18,853 Miscellaneous 67,000 207,031 140,031 Total Revenues 1,367,041 1,540,860 lì3,819 EXPENDITURES: Current - General Government 266,217 266,496 279 Public Safety 670,524 725,973 55,449 Public Works 230,703 233,305 2,602 . Culture and Recreation 140,707 152,835 12,128 Econumic Development 62,516 65,292 2,776 Miscellaneous 500 1,600 1,100 Total Expenditures 1.371.167 1,445.501 74,334 REVENUES OVER (UNDER) EXPENDITURES (4,126) 95,359 99,485 OTHER FINANCING SOURCES (USES): Operating Transfers ° (231.000) (231,000) EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ (4.126) (135,641) $ (131.515) FUND BALANCE - January 1 1.727.668 FUND BALANCE - December 31 $ 1.592.027 . The notes to the financial statements are an integral part of this statement. · Special Revenue Funds Over (Under) Budget Actual Budget ~ $ 0 $ 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,393 2,393 0 2,393 2,393 0 92 92 0 0 0 · 0 0 0 0 0 0 0 0 0 0 0 0 0 92 92 0 2,301 2,301 0 0 0 $ 0 2,301 $ 2.301 34,536 $ 36.837 · CITY OF ST. JOSEPH, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENSES AND . CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES Year Ended December 31, 2000 With Comparative Totals for the Year Ended December 31,1999 Totals 2000 1999 OPERATING REVENUES: Charges for Services $ 541,715 $ 527,299 OPERATING EXPENSES: Salaries and Benefits 126,903 136,308 Utilities 27,218 24,217 Supplies 13,440 16,275 Sewer Use Rental 125,470 98,046 Postage 1,249 1,201 Repairs and Maintenance 7 13,607 Professional Fees 19,506 3,651 Fees and Tests 8,438 16,730 Dues and Subscriptions 690 451 Refuse Disposal 89,101 95,228 Depreciation 125,139 122,431 Insurance 8,015 8,138 Miscellaneous 2,737 2,565 Total Operating Expenses 547,913 538,848 . OPERATING LOSS (6,198) (11,549) NON-OPERATING REVENUES: Investment Income 64,611 27,147 Other Revenues 17,801 18,848 Total Non-Operating Revenues 82,412 45,995 INCOME BEFORE OPERATING TRAi"'\lSFERS 76,214 34,446 Operating Transfers Out (45,000) (40,000) NET INCOME (LOSS) 31,214 (5,554) RETAINED E~~GS (DEFICIT) - January I (72,226) (66,672) RET AINED E.A..RNINGS (DEFICIT) - December 31 $ (41.012) $ (72.226) . The notes to the financial statements are an integral part of this statement. CITY OF ST. JOSEPH, MINNESOTA · COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES Year Ended December 31, 2000 With Comparative Totals for the Year Ended December 31, 1999 Totals 2000 1999 CASH FLOWS FROM OPERATING ACTMTIES: Operating Loss $ (6,198) $ (11,549) Adjustments to Reconcile Operating Loss to Net Cash Provided by Operating Activities: Depreciation 125,139 122,431 Other Non-operating Revenues 17,801 18,848 Change in Assets and Liabilities: (Increase) in Accounts Receivable (26,756) (43,684) Increase (Decrease) in Accrued Liabilities (82,614) 101,490 Increase in Due to Other Governmental Units 8,902 708 Increase (Decrease) in Compensated Absences Payable (8,891) 18,200 Total Adjustments 33,581 217,993 Net Cash Provided by Operating Activities 27,383 206,444 CASH FLOWS FROM NONCAPITAL FINANCING ACTMTIES: Operating Transfers to Other Funds (45,000) (40,000) · CASH FLOWS FROM CAP IT AL AND RELATED FINANCING ACTMTIES: Capital Acquisitions (2,969) (88,686) CASH FLOWS FROM INVESTING ACTNITIES: Investment Income 55,591 29,206 Net Increase in Cash and Cash Equivalents 35,005 106,964 Cash and Cash Equivalents, January 1 883,109 776,145 Cash and Cash Equivalents, December 31 $ 918.114 $ 883.109 · The notes to the financial statements are an integral part of this statement. CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of S1. Joseph, Minnesota, has a mayor-council form of government. A mayor and four council members are elected by the voters of the City for two-year and four-year terms, respectively. The accounting policies of the City confonn to accounting principles generally accepted in the United States of America as applicable to governments. With respect to proprietary activities, the City has adopted GASB No. 20, "Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting." The City has elected to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board (F ASB) pronouncements, Accounting Principles Board (APB) Opinions and Accounting Research Bulletins (ARB), issued on or before November 30, 1989 unless those pronouncements conflict with or contradict GASB pronouncements. In addition, the City has elected not to apply FASBs, APBs and ARBs issued after November 30, 1989. The following is a summary of the City's more significant accounting policies. A. Financial Revorting Entity In accordance with GASB Statement No. 14, The Financial Reporting Entity, the financial · statements present the City and its component units. The City includes all funds, account groups, organizations, institutions, agencies, departments. and offices that are not legally separate from such. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the financial statements of the City because of the significance of their operational or financial relationships with the City. The City is considered financially accountable for a component unit if it appoints a voting majority of the organization's governing body and it is able to impose its will on the organization by significantly influencing the programs, projects, activities, or level of services perfonned or provided by the organization, or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the City. As a result of applying the component unit definition criteria above, the City of S1. Joseph's component unit is presented in this report as follows: Blended Component Unit - The St. Joseph Economic Development Authority (EDA) was organized for the purpose of preserving and creating jobs, enhancing the tax base, and promoting the general welfare of the people of the City ofSt. Joseph. The Authority is governed by a five member board appointed by the City Council. The EDA is included as a blended component unit of the City because the EDA is financially accountable to the City, and the Authority provides services almost entirely for the City. The S1. Joseph EDA is presented as a department in the City's general fund, the City Hall Project Capital Project Fund and the EDA Public Project Revenue Bonds of2000 Debt Service fund. Separate · financial statements are not prepared for the EDA. · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31,2000 NOTE 1 - SUM:MARY OF SIGNIFICAl'll ACCOUNTING POLICIES (Continued) B. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spentand the means by which expending activities are controlled. The various funds are grouped, in the financial statements in this report, into five generic fund types and two broad fund categories, described below. Governmental Funds The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds are used to account for the proceeds of specific revenue sources · (other than expendable trusts or major capital proj ects) that are legally restricted to expenditures for specified purposes. Debt Service Funds are used to account for the accumulation of resources for, and the payment of, generallong-tenn debt principal, interest, and related costs. Capital Pr01ects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by enterprise funds). ProprietarY Funds Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises--where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered through user charges; or (b) where the governing body has decided that periodic detennination of revenues earned, expenses incurred, or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The City maintains Refuse, Water and Sewer Enterprise Funds. · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMJv1ARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Fixed Assets. and Long- Tenn Liabilities The acc01J.nting and reporting treatment applied to the fixed assets and long-tenn liabilities associated with a fund are determined by its measurement focus. All governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of available spendable resources during a period. Fixed assets used in governmental fund type operations (general fixed assets) are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings, including roads, curbs and gutters, streets and sidewalks, are not capitalized by the City. No depreciation has been provided on general fixed assets. All fixed assets are valued at their historical cost or estimated historical cost if actual · historical cost is not available. Donated fixed assets are valued at their estimated fair value on the date donated. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-tenn amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long-Term Debt Account Group. The two account groups, General Fixed Assets and General Long-Tenn Debt, are not "funds". They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. All proprietary funds are accounted for on a flow of economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with the funds' activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus. Fixed Assets, and Long-Tenn Liabilities (Continued) Major outlays for capital assets and improvements are capitalized in proprietary funds as projects are constructed. Interest incurred during the èonstruction phase of proprietary fund fixed assets is reflected in the capitalized value of the asset constructed. Capital assets constructed in governmental funds for proprietary funds are recorded as contributed capital. Depreciation of all exhaustible fixed assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is reported on proprietary fund balance sheets. Depreciation has been provided over the assets' estimated useful lives, which range from five to fifty years, using the straight-line method. Depreciation expense for the years ended December 31,2000 and 1999 is $ 125,139 and $ 122,431, respectively. D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the · timing of the measurement made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting, in which revenues are recognized when they become measurable and available as net current assets. The more significant revenues which have been accrued are intergovernmental revenues and interest earnings. Expenditures are generally recognized in the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include sick pay and principal and interest on generallong-tenn debt, which are recognized when due. All proprietary funds are accounted for using the accrual basis of accounting; revenues are recognized when they are earned and expenses are recognized when they are incurred. E. Budgetarv Data The City Council adopts an annual budget. The amounts shown in the financial statements as "budget" represent the original budgeted amount and all revisions made during the year. The City follows these procedures in establishing the budgetary data reflected in the financial statements. · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL ST A TElvŒNTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) E. Bud2:etarv Data (Continued) 1. In August of each year, the City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of fina..'1cing them for the upcommg year. 2. Public hearings are conducted to obtain taxpayer comment. 3. Prior to December 31, the budget is legally enacted through passage of a resolution. 4. Formal budgetary integration is employed as a management control device during the year for the General and Special Revenue Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. Budgetary control for Capital Projects Funds is accomplished through the use of project controls. 5. The Budgets for the General and Special Revenue Funds are adopted on a basis · consistent with accounting principles generally accepted in the United States of America. F. Encumbrances Encumbrances represent outstanding purchase orders and unfulfilled commitments that are issued to outside vendors and budgeted in the current year but do not include amounts that are set up as liabilities, amounts for personal services to be performed by City employees and purchase orders applicable to the subsequent year's budget. As of December 31,2000, no outstanding encumbrances existed. G. Cash and Investments (Includill2: Cash Eauivalents) (See Note 3) Cash balances from all funds are combined and invested to the extent available in authorized investments. Earnings from such invesunents are allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments are carried at fair value. For purposes of the statement of cash flows, the City considers all short-term, highly liquid investments with original maturity dates of three months or less from the date of purchase to be cash equivalents. In addition, cash invested in the City's cash management pool is considered to be cash equivalents. Based on this policy, the total cash and investments of the proprietary funds are considered to be cash equivalents. · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31,2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) H. Taxes Receivable Delinquent taxes receivable represent the past six years of uncollected tax levies. 1. Suecial Assessments Receivable Delinquent special assessments represent the past six years of uncollected special assessments. Deferred special assessments represent the principal portion of those assessments to property owners for improvements made by the City. These assessments are made at various times by City resolution and are collectible over periods ranging from ten to thirty years and bear annual interest of7 percent to 8 percent and are to be received in 2001 and years thereafter. 1. Deferred Revenue Deferred revenue represents delinquent taxes and deferred and delinquent assessments · receivable. This revenue is deferred until it is measurable and available as net current assets. K. Comoensated Absences The City compensates employees who leave City service in good standing for all earned, unused vacation. In addition, employees are compensated for unused sick leave (up to a maximum of 720 hours) at 50% of the current regular rate of pay, provided the City's notice of termination policy has been complied with. 1. Fund EQuitv Fund equity is divided into sections as follows: - Contributed capital represents fixed assets purchased by other funds and contributed to the enterprise funds. - Investment in General Fixed Assets represents the City's equity in general fixed assets. - Retained earnings of enterprise funds are available for expending in future periods. · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNlFICANT ACCOUNTING POLICIES (Continued) L. Fund Eauity (Continued) - Fund balance accounts are subdivided as follows: , Reserved accounts indicate the portion of fund balance which has been reserved for a specific purpose. Umeserved, designated accounts indicate the portion of fund balance which has been designated for a specific purpose. The unreserved, undesignated account is the portion of fund balance which is available for budgeting and expending in future periods. M. Revenues. EXDenditures and EXDenses 1. Revenues Property taxes and special assessment principal and interest are recognized as revenue · when measurable and available. Portions of taxes paid by the State in the fonn of HAC A and other tax credits are included in intergovernmental revenue. Intergovernmental revenues are reported under the legal and contractual requirements of the individual programs. Licenses and permits, charges for services, fines and forfeits, and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash because they are generally not measurable until then. Investment earnings are recorded when earned because they are measurable and available. 2. ProDertv Tax Collection Calendar The City levies its property tax for the subsequent year during the month of December. December 28 is the last day the City can certify a tax levy to the County Auditor for collection the following year. The property tax is recorded as revenue when it becomes measurable and available. Stearns County is the collecting agency for the levy and remits the collections to the City three times a year. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable. · . CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31,2000 NOTE 1 - SU1vllv1ARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. Revenues. EXDenditures and EXDenses (Continued) 2. ProDertv Tax Collection Calendar (Continued) The County Auditor creates the tax list for all taxable property in the City, applying the applicable tax rate to the tax capacity of individual properties, to arrive at the actual tax for each property. The County Auditor also collects all special assessments, except for certain prepayments paid directly to the City. The County Auditor turns over the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year. The County Treasurer collects all taxes, and all special assessments, except as noted above. The County Treasurer is required to mail copies of all personal property tax statements by April 15, and copies of all real estate tax statements by April 15, of each year. Property owners are required to pay one-half of their real estate taxes due by May 15 and . the balance by October 15. If taxes due May 15 are not paid on time, a penalty of3% is assessed on homesteaded property, and 7% on non-homesteaded property. An additional 1 % penalty is added each month the taxes remain unpaid, until October 15. If the taxes due May 15 are not paid by October 15, a 2% penalty per month is added to homesteaded property and 4% per month to non-homesteaded property until January 1. If the taxes are not paid by January 1, further penalties are added. Penalties and interest apply to both taxes and special assessments. There are some exceptions to the above penalties, but they are not material. Within 30 days after the tax settlement date, the County Treasurer is required to pay 70% of the estimated collections of taxes and special assessments to the City Treasurer. The County Treasurer must pay the balance to the City Treasurer within 60 days after settlement, provided that after 45 days interest accrues. 3. EXDenditures Expenditure recognition for govenunental fund types includes only amounts represented by current liabilities. Since noncurrent liabilities do not affect net current assets, they are not recognized as govenunental fund expenditures or fund liabilities. They are reported as liabilities in the General Long-Term Debt Account Group. 4. EXDenses Enterprise funds recognize expenses when they are incurred. . CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SU1vfMARY OF SIGNIFICANT ACCOUNTil'lG POLICIES (Continued) N. Interfund Transactions Quasi-ext~rnal transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it that are properly applicable to another fund are recorded as expenditures or expenses in the fund that is reimbursed. All other interfund transactions, except quasi-external and reimbursements, are reported as transfers. Nonrecurring or nonroutÎne permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. O. Total Columns on General Puroose Statements Total columns on the general purpose financial statements are captioned "memorandum only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in confonnity with accounting principles generally accepted in the United States of America. Interfund eliminations have not been made in the aggregation of these data. · P. ComDarative Data Cornparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the City's financial position and operations. However, prior year totals by fund type have not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. Comparative data have been restated to reflect reclassifications. Q. Use of Estimates The preparation of general purpose financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresíexpenses during the reporting period. Actual results could differ from those estimates. · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 2 - STEWARDSHIP. C01vfPLIANCE AND ACCOUNTABILITY A. Fund Deficits The fol1owing funds have deficit fund balance/retained earnings at December 31, 2000: Capital Projects Funds - 1999 Street Improvements $ (260,037) County Road 121 (11,115) Enterprise Fund - Sewer (332,054) These deficits will be eliminated by future revenues, user charges or transfers from other funds. B. Expenditures in Excess of Appropriations Expenditures exceeded appropriations in the following funds for the year ended December 31, 2000: · Expenditures Appropriation General Fund $ 1,445,501 $ 1,371,167 Special Revenue Funds: DARE Program 92 0 NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. Assets 1. Cash and Investments (Including Cash Eouivalents) Cash balances of the City's funds are combined (pooled) and invested to the extent available in various investments authorized by Minnesota Statutes. Each fund's portion of this pool (or pools) is displayed on the financial statements as "cash and investments (including cash equivalents)." For purposes of identifying risk of investing public funds, the balances and related restrictions are summarized below: a. Deposits - Minnesota Statutes require that all deposits with financial institutions must ~e collateralized in an amount equal to 110% of deposits in excess of FDIC Insurance. · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - DET AlLED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) A. Assets (Continued) 1. Cash and Investments (Includim: Cash Eauivalents) (Continued) a. Deposits - (Continued) Category 1 - Deposits covered by Federal Depository Insurance (FDIC) and those deposits collateralized with securities held by the City or by its agent in the City's name. Category 2 - Collateralized with securities held by the pledging institutions trust department or agent in the District's name. Category 3 - Deposits which are not insured or collateralized; or those deposits where collateral assignment has not been perfected. Category Bank Carrying I 2 3 Balance Amount · -- Bank Accounts $ 238,144 $ 0 $ 0 $ 238,144 $ 457,634 Certificates of Deposit 1.227.619 0 0 1,227,619 1.227,619 -- TotaJ Deposits $ 1.465.763 $ 0 $ 0 $ 1.465,763 $ 1.685.253 b. Investments - Minnesota Statutes authorize the City to invest in obligations of the U.S. Treasury, agencies, and instrumentalities, shares of investment companies whose only investments are in the forementioned securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future contracts, repurchase and reverse repurchase agreements, and commercial paper of the highest quality with a maturity of no longer than 270 days. Investments held by the City at year end classified as to credit risk are as follows: Category 1 - Insured or registered, or securities held by the City's agent in the City's name. Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust depaI1ment or agent in the City's name. Category 3 - Uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the City's name. · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) A. Assets (Continued) 1. Cash and Investments (Including Cash Equivalents) (Continued) b. Investments - (Continued) Category 1 2 3 Fair Value U.S. Government and - - Federal Agency Notes and Bonds $ 1,037,592 $0 $0 $ 1,037,592 Repurchase Agreements 100,000 0 0 100,000 Negotiable Certificates of Deposit 1,459,494 0 0 1,459,478 - - Total Investments $ 2.597.086 $0 $0 2,597,070 · Unclassified as to Rjsk: Money Market Mutual Funds 14,065 Total Deposits (See Note 3 A. La.) 1,685,253 Petty Cash 220 Total Cash and Investments (Including Cash Equivalents) $ 4.296,608 Cash and investment balances are presented in the general purpose financial statements as follows: Cash and Investments (Including Cash Equivalents) $ 4,562,022 Cash Overdraft (265,414) Total $ 4.296.608 · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FJNANCIAL STATEMENTS December 31, 2000 NOTE 3 - DETAILED NOTES ON ALL FUNDS..<\ND ACCOUNT GROUPS (Continued) A. Assets (Continued) 2. Due from Other Governmental Units The following is a summary of due from other governmental units at December 31, 2000: City of Sl Joseph Stearns Waite Park Township County Total General Fund - Fines S 0 S 0 S 6,732 $ 6,732 Property Taxes/Special Assessments 0 0 189,019 189.019 Miscellaneous 2,426 919 0 3,345 Total General Fund 2,426 919 195,751 199.096 Debt Service Funds - G.O. Improvement Bonds of 1993 - Property Taxes/Special · Assessments 0 0 663 663 G.O. Improvement Bonds of 1998 - Property Taxes/Special Assessments 0 0 9,509 9,509 G.O. Improvement Bonds of 1999 - Property Taxes/Special Assessments 0 0 48,286 48.286 Total Debt Service 0 0 58,458 58.458 Total S 2.426 $ 919 $ 254.209 $ 257.554 · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) A. Assets (Continued) 3. Fixed Assets A summary of changes in general fixed assets follows: Balance Balance 1-1-99 Additions Disposals 12-31-00 Land $ 167,569 $ 51,475 $ (55,000) $ 164,044 Buildings 947,186 758,985 0 1,706,171 Improvements Other than Buildings 333,852 30,146 0 363,998 Machinery and Equipment 720,998 15,514 0 736,512 Office Furniture 96,743 6,156 (1,673) 101,226 Motor Vehicles 211,337 0 0 211,337 Other Equipment 234,346 4.384 (6,521) 232,209 · Total $ 2.712.031 $ 866.660 $ (63.194) $ 3.515,497 A summary of Enterprise Fund fixed assets at December 31,2000, is as follows: Water Sewer Fund Fund Total Land and Land Improvements $ 12,996 $ 4,940 $ 17,936 Treatment Plant and Lines 1,937,720 2,073,069 4,010,789 Buildings 0 517,983 517,983 Water Storage Facility 1,236,542 0 1,236,542 Machinery and Equipment 81,389 179,138 260,527 Total Cost 3,268,647 2,775,130 6,043,777 Less: Accumulated Depreciation (507,058) (1,088,419) (1,595,477) Net Fixed Assets $ 2.761.589 $ 1.686.711 $ 4.448.300 · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FmANCIAL STATEMENTS December 31, 2000 NOTE 3 - DET .A.lLED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities 1. Defined Benefit Pension Plans - State\\ride A. Plan Description All full-time and certain part-time employees of the City of St. Joseph are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (pERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost- sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, fire- fighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members. and · benefits to surVivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at tennination of service. Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service. For all PEPFF members and for PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. A reduce retirement annuity is also available to eligible members seeking early retirement. · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 1. Defined Benefit Pension Plans - Statewide (Continued) A. Plan Description (Continued) There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree--no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, tenninated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in · effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 514 S1. Peter Street #200, S1. Paul, Minnesota, 55102 or by calling (651) 296-7460 or 1-800-652-9026. B. Funding Policv Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 8.75 percent and 4.75 percent, respectively, of their annual covered salary. PEPFF members are required to contribute 6.20 percent of their annual covered salary. The City of St. Joseph is required to contribute the following percentages of annual covered payroll: 11.43 percent for Basic Plan PERF members, 5.18 percent for Coordinated Plan PERF members, and 9.30 percent for PEPFF members. The City's contributions to the Public Employees Retirement Fund for the years ending December 31,2000,1999, and 1998 were $ 17,887, $ 15,286, and $ 11,820, respectively. The City's contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2000, 1999, and 1998 were $ 23,975, $ 24,295, and $ 26,954, respectively. The City's contributions were equal to the comracmaHy requireà connibutions for each year as set by state statute. · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO TIIE FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 2. Defined Contribution - Statewide The City provides pension benefits for its elected local government officials through a defmed contribution plan administered by the Public Employees Retirement Association (PERA). The Public Employees Defined Contribution Plan (PEDCP) is a multi-employer deferred compensation plan. Ejected officials who are covered by a public or private pension plan because of their employment are not eligible to participate in the PEDCP. Plan benefits depend solely on amounts contributed to the plan plus investment earnings. Minnesota Statutes, Chapter 353D.03 requires that both the elected local government official and the City contribute an amount equal to 5% of the elected local government official's salary. There is no vesting period required to receive benefits in the PEDCP. The City's total payroll in the year 2000 was $ 728,416. The City's contributions were calculated using the base salary amount of $ 20300. Both the City and the elected local government official made the required 5% contribution, amounting to $ 1,015 from each source, or $ 2,030 in total. · 3. Deferred Revenue Deferred revenue at December 31, 2000, consisted of: Debt CapitaJ General Service Projects Tota] Taxes Receivable - Delinquent $ 5.036 $ 2,065 $ 0 $ 7,101 Special Assessments Receivable - Deferred 18.988 1,470.170 163,117 1,652.275 Delinquent 208 3.091 0 3.299 Total S 24.232 $ 1.475.326 $ 163.117 $ 1.662.675 · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL ST A TE:MENTS December 31, 2000 NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 4. Bonds Payable The following is a summary of bond transactions for the year ended December 31,2000: General Obligation General General Special Obligation Obligation Assessment Revenue Revenue Total Bonds Payable - January 1,2000 $ 1,165,000 $ 3,700,000 $ 995,000 $ 0 $5,860,000 Bonds Issued 0 0 0 960,000 960,000 Bonds Retired (40,000) (465,000) (65,000) 0 (570,000) Bonds Payable - December 31, 2000 $ 1.125.000 $ 3.235.000 $ 930,000 $ 960.000 $6.250,000 · Bonds outstanding at December 31,2000, comprise the following issues: General Obligation Bonds: $ 1,235,000 General Obligation Bonds of 1997 due in annual installments of $ 35,000 to $ 100,000 through December 1,2017, interest at 4.00 to 5.75 percent $ 1,125,000 General Obligation Special Assessment Bonds: $ 200,000 General Obligation Improvement Bonds of 1992 due in annual installments of $ 10,000 to $ 20,000 through December 1,2007, interest at 4.60 to 6.40 percent 120,000 $ 550,000 General Obligation Improvement Bonds of 1993 due in annual installments of $ 25,000 to $ 50,000 through December 1,2008, interest at 3.00 to 5.30 percent 335,000 · CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 (Continued) NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 4. Bonds Pavable (Continued) General Obligation Special Assessment Bonds: (Continued) $ 1,280,000 General Obligation Improvement Bonds of 1996 due in annual installments of$ 60,000 to $ 120,000 through December 1, 2011, interest at 4.30 to 5.90 percent $ 1,020,000 $ 545,000 General Obligation Improvement Bonds of 1998 due in annual installments of $ 25,000 to $ 50,000 through December 1,2013, interest at 3.85 to 5.00 percent 495,000 $ 1,330,000 General Obligation Improvement Bonds of 1999 due in annual installments of $ 65,000 to $ 125,000 through December 1,2014, interest at 4.875 to 5.20 percent 1,265,000 · Total General Obligation Special Assessment Bonds 3,235,000 General Obligation Revenue Bonds: $ 475,000 General Obligation Water Revenue Bonds of 1992 due in annual installments of $ 30,000 to $ 50,000 through December 1, 2005, interest at 4.00 to 6.00 percent 235,000 $ 780,000 General Obligation Water Revenue Bonds of 1996 due in annual installments 0[$ 20,000 to $ 70,000 through December 1, 2016, interest at 4.30 to 6.00 percent 695,000 Total General Obligation Revenue Bonds 930,000 Revenue Bonds: $ 960,000 EDA Public Project Revenue Bonds of2000 due in annual installments of $ 40,000 to $ 95,000 through December 1,2015, interest at 5.60 to 6.60 percent 960,000 TOTAL BONDS PAYABLE $ 6.250.000 The annual requirements to amortize all bonded debt outstanding as of December 31, 2000, including interest payments of$ 3,155,609 are: · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued) B. Liabilities (Continued) 4. Bonds Payable (Continued) General Obligation General Year Ending General Special Obligation December 31, Obligation Assessment Revenue Revenue Total 2001 $ 99,835 $ 415,932 $ 123,418 $ 99,240 $ 738,425 2002 103,055 419,289 119,672 102,000 744,016 2003 100,985 431,739 115,835 99,435 747,994 2004 103,870 423,311 121,905 101,825 750,911 2005 101,470 423,895 117,345 98,900 741,610 Thereafter 1,253,590 2,638,405 781,120 1,009,538 5,682,653 Totals $ 1,762.805 $ 4.752.571 $ 1,379.295 $ 1,510.938 $ 9.405.609 · 5. Loans Payable The foHowing is a summary ofloan transactions for the year ended December 31, 2000: Stearns Electric Loans Payable - January 1, 2000 $ 0 Loans Issued 276,136 Loans Retired (26,394) Loans Payable - December 31, 2000 $ 249.742 The annual requirements to amortize an loans outstanding as of December 31, 2000, including interest payments of$ 12,653 are: 2001 $ 29,155 2002 29,155 2003 29,155 2004 29,155 2005 29,155 2006-2009 11 ó ó?O ---7--- · Totals $ 262.395 CITY OF ST. JOSEPH, MINNESOTA · NOTES TO THE FINANCIAL STATEMENTS December 31,2000 NOTE 3 - DET.AlLED NOTES ON ALL FUNDS AND ACCOlJNT GROUPS (Continued) C. Fund Equity Fund equity balances are classified as follows to reflect the limitarions and restrictions of the respective· funds: 1. Fund Balance a. Reserved Fund Balance is comprised of the following: General Debt Service Total Notes Receivable $ 30,000 $ 0 $ 30,000 Debt Service 0 2,055,016 2,055.016 Total $ 30,000 $ 2,055.016 $ 2.085.016 b. Unreserved fund balance is comprised of the following: · Special Capital General Revenue Projects Total Designated for Fire S 508.] 07 $ 0 $ 0 $ 508,107 Designated for Fire HaJJ 1.814 0 0 1.814 Designated for Capital Expenditures (31.622) 0 0 (31,622) . Designated for Debt Service 174.745 0 0 174,745 Designated for Working Capita) 250.000 0 0 250,000 Undesignated 658.983 36.837 (131.911) 563.909 Total Unreserved Fund Balance S 1.562.027 $ 36.837 $ (131.911) $ 1,466.953 2. Contributed Capital Contributed capital in the Enterprise Funds represents fixed assets which were purchased by other funds and transferred to the Enterprise Funds. Contributed capital is as follows: Balance, December 31, 1999 $ 5,519,572 Capital Contributed in 2000 0 Balance, December 31, 2000 $ 5.519.572 · · CITY OF ST. JOSEPH, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 4 - SEGMENT INFORMATION FOR ENTERPRISE FUNDS The City maintains three Enterprise Funds which provide refuse, water and sewer services. Segment information for the year ended December 31,2000, is: Refuse Water Sewer Fund Fund Fund Total Operating Revenues $ 125,586 $ 177,945 $ 238,184 $ 541,715 Depreciation 0 53,468 71,671 125,139 Operating Income (Loss) 21,709 24,933 (52,840) (6,198) Operating Transfers Out (10,000) (35,000) 0 (45,000) Net Income 19,901 21,497 (10,184) 31,214 Contributed Capital 0 2,807,647 2,711,925 5,519,572 Fixed Assets - Acquisitions 0 7,219 0 7,219 Net Working Capital 126,244 210,856 693,160 1,030,260 Total Assets 136,022 2,999,240 2,429,450 5,564,712 Debt Outstanding 0 930,000 0 930,000 · Total Equity 126,244 2,972,445 2,379,871 5,478,560 NOTE 5 - RISK MANAGEMENT The City is exposed to various risk of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. In order to protect against these risks of loss, the City purchases commercial insurance through the League of Minnesota Cities Insurance Trust, a public entity risk pool. This pool currently operates common risk management and insurance programs for municipal entities. The City pays an annual premium to the League for its insurance coverage. The League of Minnesota Cities Insurance Trust is self-sustaining through commercial companies for excess claims. The City is covered through the pool for any claims incurred but unreported, however, retains risk for the deductible portion of its insurance policies. The amounts of these deductibles are considered immaterial to the financial statements. The City's workers compensation insurance policy is retrospectively rated. With this type of policy, final premiums are determined after loss experience, workers compensation rates and salaries for the year are known. The final premium adjustment was recorded in the year the adjustment was made. During the year ended December 31, 2000, there were no significant reductions in insurance coverage from the prior year. Settled claims have not exceeded the City's commercial coverage · in any of the past three years. ..,.,.