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22-117 Bond SalesEXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF SHOREWOOD, MINNESOTA HELD: NOVEMBER 14, 2022 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Shorewood, Hennepin County, Minnesota, was duly held at the City Hall on November 14, 2022, at 7:00 P.M., for the purpose, in part, of authorizing the issuance and awarding the sale of a $7,570,000 General Obligation Street Reconstruction and Utility Revenue Bond, Series 2022A. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION NO. 22-117 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF A $7,570,000 GENERAL OBLIGATION STREET RECONSTRUCTION AND UTILITY REVENUE BOND, SERIES 2022A, PLEDGING FOR THE SECURITY THEREOF NET REVENUES AND LEVYING A TAX FOR THE PAYMENT THEREOF A. WHEREAS, the City Council of the City of Shorewood, Minnesota (the "City") has heretofore determined and declared that it is necessary and expedient to issue a $7,570,000 General Obligation Street Reconstruction and Utility Revenue Bond, Series 2022A (the "Bond"), pursuant to Minnesota Statutes, Chapter 475. 1. Section 475.58, Subdivision 3b, to finance street reconstruction improvements under the City's Street Reconstruction Plan (the "Street Reconstruction Project") in the amount of $3,535,000 (the "Street Reconstruction Portion of the Bond"); and 2. Section 444.075 to finance improvements to the municipal water system, sanitary sewer system and storm sewer system (collectively, the "Utility Improvements") in the amount of $4,035,000 (the "Utility Portion of the Bond"); and B. WHEREAS, on May 11, 2020, following duly published notice thereof, the City Council held a public hearing on the issuance of approximately $18,230,681 principal amount of bonds to finance the Street Reconstruction Project and all persons who wished to speak or provide written information relative to the public hearing were afforded an opportunity to do so; and C. WHEREAS, no petition signed by voters equal to 5 percent of the votes cast in the City in the last municipal general election requesting a vote on the issuance of the street reconstruction bonds was filed with the Interim City Administrator within 30 days after the public hearing on May 11, 2020; and 7s2ss66ov2 D. WHEREAS, the Street Reconstruction Portion of the Bond, together with any outstanding bonds of the City that are subject to the City's net debt limit, do not exceed the City's net debt limit; and E. WHEREAS, the City owns and operates a municipal water system (the "Water System"), a municipal sanitary sewer system (the "Sanitary Sewer System"), and a municipal storm sewer system (the "Storm Sewer System", and together with the Water System and the Sanitary Sewer System, the "System"), as separate revenue producing public utilities; and F. WHEREAS, the net revenues of the System are pledged to the payment of the City's outstanding (i) utility portion of the General Obligation Street Reconstruction and Utility Revenue Bond, Series 2020A, in the original principal amount of $7,500,000, dated August 25, 2020; and (ii) utility portion of the General Obligation Street Reconstruction and Utility Revenue Bond, Series 2021A, in the original principal amount of $4,325,000, dated July 28, 2021; (collectively the "Outstanding System Bonds"); and G. WHEREAS, the City has retained David Drown Associates, Inc., in Minneapolis, Minnesota ("David Drown"), as its independent municipal adviser for the sale of the Bond and was therefore authorized to sell the Bond by private negotiation in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9) and proposals to purchase the Bond have been solicited by Robert W. Baird & Co., Incorporated, as placement agent; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Shorewood, Minnesota, as follows: 1. Acceptance of Offer. The offer of Truist Bank, a North Carolina Banking Corporation of Charlotte, North Carolina (the "Purchaser"), to purchase the Bond and to pay therefor the sum of $7,570,000, all in accordance with the terms and at the rate of interest hereinafter set forth, is hereby accepted. 2. Terms; Original Issue Date; Denominations; Maturities; Interest and Redemption. The City shall forthwith issue the Bond, which shall be in fully registered form without interest coupons, shall be dated, mature, bear interest, be subject to redemption and be payable as provided in the form of the Bond set forth in Section 5 hereof. (a) Allocation. The Street Reconstruction Portion of the Bond, being the aggregate principal amount of $3,535,000, maturing in each of the years and amounts hereinafter set forth, is issued to finance the Street Reconstruction Project. The Utility Portion of the Bond, being the aggregate principal amount of $4,035,000, maturing in each of the years and amounts hereinafter set forth, is issued to finance the Utility Improvements. 4 75285660v2 Year (February 1) Street Reconstruction Portion Utility Portion Total Amount 2024 $ 40,000 $ 170,000 $ 210,000 2025 125,000 140,000 265,000 2026 130,000 145,000 275,000 2027 135,000 150,000 285,000 2028 140,000 155,000 295,000 2029 145,000 165,000 310,000 2030 150,000 170,000 320,000 2031 160,000 175,000 335,000 2032 165,000 185,000 350,000 2033 175,000 190,000 365,000 2034 180,000 200,000 380,000 2035 190,000 205,000 395,000 2036 195,000 220,000 415,000 2037 205,000 220,000 425,000 2038 215,000 230,000 445,000 2039 220,000 245,000 465,000 2040 230,000 255,000 485,000 2041 235,000 260,000 495,000 2042 245,000 270,000 515,000 2043 255,000 285,000 540,000 3. Purpose. The Street Reconstruction Portion of the Bond shall provide funds to finance the Street Reconstruction Project. The Utility Portion of the Bond shall provide funds to finance the Utility Improvements. The Street Reconstruction Project and the Utility Improvements are herein referred to together as the Project. The total cost of the Project, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bond. 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. The Finance Director of the City of Shorewood, Minnesota, is appointed to act as registrar and transfer agent with respect to the Bond (the "Registrar"), and shall do so unless and until a successor registrar is duly appointed, all pursuant to any contract the City and the successor registrar shall execute which is consistent herewith. The Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bond shall be paid to the registered owner (or record holder) of the Bond in the manner set forth in the form of Bond. 5. Form of Bond. The Bond, together with the Registrar's Certificate of Registration, shall be in substantially the following form: 75285660v2 UNITED STATES OF AMERICA STATE OF MINNESOTA HENNEPIN COUNTY CITY OF SHOREWOOD R-1 $7,570,000 GENERAL OBLIGATION STREET RECONSTRUCTION AND UTILITY REVENUE BOND, SERIES 2022A Interest Rate Maturity Date Date of Original Issue 4.31% February 1, 2043 December 1, 2022 REGISTERED OWNER: TRUIST BANK, CHARLOTTE, NORTH CAROLINA PRINCIPAL AMOUNT: SEVEN MILLION FIVE HUNDRED SEVENTY THOUSAND DOLLARS THE CITY OF SHOREWOOD, HENNEPIN COUNTY, MINNESOTA (the "City" or "Issuer"), acknowledges that it is indebted and, for value received, hereby promises to pay to the registered owner specified above, or assigns duly certified on the Certificate of Registration attached to and made a part of this Bond (the "Registered Owner"), unless called for earlier redemption, in the manner hereinafter set forth, the $7,570,000 principal amount of this Bond shall be subject to mandatory sinking fund principal installments due on February 1 of the years and in the amounts, respectively, as follows with each such principal installment bearing interest until paid at the interest rate of 4.31 % per annum: Principal Installments Principal Principal Installments Principal Due February 1 Amount Due February 1 Amount 2024 $210,000 2034 $380,000 2025 265,000 2035 395,000 2026 275,000 2036 415,000 2027 285,000 2037 425,000 2028 295,000 2038 445,000 2029 310,000 2039 465,000 2030 320,000 2040 485,000 2031 335,000 2041 495,000 2032 350,000 2042 515,000 2033 365,000 2043 540,000 In the event that the City shall fail to observe any covenant, agreement or representation in the Resolution (as hereinafter defined), which failure results in the interest on the Bond determined not to be exempt from Federal income tax, the interest rate shall increase to a rate equal to the current tax-exempt rate of interest set forth in this Bond (4.31%) divided by 67.5%. In addition, the Issuer shall pay an amount equal to the difference between the interest paid at the 75285660v2 tax-exempt rate and the interest which would have been paid if the interest rate would have been the taxable rate from the date that this Bond was determined to be taxable, plus any penalties, interest, assessments and additions to tax payable by the owner as a result of the loss of the tax- exempt status of interest on this Bond. Interest. Interest shall be payable semiannually on February 1 and August 1 of each year, commencing August 1, 2023 (each a "Payment Date"), and shall be calculated on the basis of a 360 day year consisting of twelve thirty day months. Payment. Principal installments and interest shall be paid by ACH debit, wire transfer or other electronic means to the Registered Owner at the address listed on the Certificate of Registration attached to and made a part of this Bond. The payment of all principal and interest on this Bond shall be made by the Finance Director of the City of Shorewood, Minnesota (the "Registrar"). The Registered Owner of the Bond shall not have to present the physical Bond to receive any payment, including any final payment or any mandatory sinking fund redemption. Date of Payment Not a Business Day. If the nominal date for payment of any principal of or interest on this Bond shall not be a business day of the Issuer or of the Registered Owner, then the date for such payment shall be the next such business day and payment on such business day shall have the same force and effect as if made on the nominal date of payment. Redemption. This Bond is subject to redemption and prepayment, in whole, and not in part, at the option of the Issuer, on any Payment Date on or after February 1, 2030, and any Payment Date thereafter, at a redemption price equal to par, plus accrued interest to such date. Mailed notice of redemption shall be given to the Registered Owner at least thirty (30) days prior to prepayment or redemption. Transfer. This Bond is transferable, as provided in the Resolution, upon the Register kept by the Finance Director upon surrender of this Bond together with a written instrument of transfer duly executed by the Registered Owner or the Registered Owner's attorney duly authorized in writing, and thereupon a new, fully registered Bond in the same principal amount shall be issued to the transferee in exchange therefor (or the transfer shall be duly recorded on the Register and the Certificate of Registration hereof), upon the payment of charges and satisfaction of applicable conditions, if any, as therein prescribed; provided that such transfer may occur only with respect to the entire Bond. The Issuer may treat and consider the person in whose name this Bond is registered as the absolute Registered Owner hereof for the purpose of receiving payment of or on account of the principal of and interest on this Bond and for all other purposes whatsoever. Issuance; Purpose; General Obligation. This Bond is issued as a single instrument in the total principal amount of $7,570,000, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and a resolution adopted by the City Council on November 14, 2022 (the "Resolution"), for the purpose of providing money to finance street reconstruction projects and improvements to the water, sanitary sewer and storm sewer systems within the jurisdiction of the Issuer. This Bond is payable out of the General Obligation Street Reconstruction and Utility Revenue Bond, Series 2022A Fund of the Issuer. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full 5 7szssbbovz 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. Fees upon Transfer or Loss. The 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 Bond. Registration. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Registration hereon shall have been executed by the Registrar. Qualified Tax -Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that the Issuer has covenanted and agreed with the Holder of the Bond that it will impose and collect charges for the service, use and availability of its municipal System, as defined in the Resolution, at the times and in amounts necessary to produce net revenues, together with other sums pledged to the payment of the Utility Portion of the Bond, as defined in the Resolution, adequate to pay all principal and interest when due on the Utility Portion of the Bond, as defined in the Resolution; 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 Utility Portion of the Bond as they respectively become due, if the net revenues from the System, and any other sums irrevocably appropriated to the Debt Service Account are insufficient therefor; and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. 75285660v2 IN WITNESS WHEREOF, the City of Shorewood, Hennepin 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 Interim City Administrator, the corporate seal of the Issuer having been intentionally omitted as permitted by law. Date of Registration: CITY OF SHOREWOOD HENNEPIN COUNTY, MINNESOTA December 1, 2022 /s/ Facsin REGISTRABLE BY AND Mayor PAYABLE AT: OFFICE OF THE FINANCE DIRECTOR City of Shorewood, Minnesota /s/ Facsimile Interim City Administrator h 7sassbbovz CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount of the attached Bond may be made only by the registered owner or the registered owner's legal representative last noted below: DATE OF REGISTERED OWNER SIGNATURE OF REGISTRATION REGISTRAR (FINANCE DIRECTOR) Truist Bank 5130 Parkway Plaza December 1, 2022 Boulevard Charlotte, NC 28217 [do not sign] 752s566ov2 6. Execution. The Bond shall be in typewritten form, shall be executed on behalf of the City by the facsimile signatures of its Mayor and Interim City Administrator the seal having been omitted as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bond may be signed by the signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature shall appear on the Bond shall cease to be such officer before the delivery of the Bond, such signature shall nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. 7. Delivery; Application of Proceeds. The Bond when so prepared and executed shall be delivered by the Finance Director to the Purchaser upon receipt of the purchase price and the Purchaser shall not be obliged to see to the proper application thereof. 8. Fund and Accounts. There is hereby established a special fund to be designated the "General Obligation Street Reconstruction and Utility Revenue Bond, Series 2022A Fund" (the "Fund") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until the Bond and the interest thereon has been fully paid. The Operation and Maintenance Account for the Water System, the Operation and Maintenance Account for the Sanitary Sewer System and the Operation and Maintenance Account for the Storm Sewer System (collectively, the "Operation and Maintenance Accounts") heretofore established by the City shall continue to be maintained in the manner heretofore and herein provided by the City. All moneys remaining after paying or providing for the items set forth in the resolutions establishing the Operation and Maintenance Accounts shall constitute and are referred to as "net revenues" until the Utility Portion of the Bond has been paid. In the financial records of the City there shall be established 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 Bond. From the Construction Account there shall be paid all costs and expenses of making the Project, including the cost of any construction or other contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Money in the Construction Account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bond may also be used to the extent necessary to pay interest on the Bond due prior to the anticipated date of commencement of the collection of taxes herein levied or covenanted to be levied; and provided further that if upon completion of the Project there shall remain any unexpended balance in the Construction Account, the balance shall be transferred to the Debt Service Account. (b) Debt Service Account. There shall be maintained two separate subaccounts in the Debt Service Account to be designated the "Street Reconstruction Project Debt Service Subaccount" and the "Utility Improvements Debt Service Subaccount". There are hereby irrevocably appropriated and pledged to, and there shall be credited to the separate subaccounts of the Debt Service Account: (i) Street Reconstruction Project Debt Service Subaccount. To the Street Reconstruction Project Debt Service Subaccount there shall be credited: (A) all M 7528566Ov2 taxes herein and hereafter levied for the payment of the Street Reconstruction Portion of the Bond; (B) a pro rata share of all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (C) all investment earnings on funds held in the Street Reconstruction Project Debt Service Subaccount; and (D) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Street Reconstruction Project Debt Service Subaccount. The Street Reconstruction Project Debt Service Subaccount shall be used solely to pay the principal of and interest and any premiums on the Street Reconstruction Portion of the Bond. (ii) Utility Improvements Debt Service Subaccount. To the Utility Improvements Debt Service Subaccount there shall be credited: (A) the net revenues of the System not otherwise pledged and applied to the payment of other obligations of the City, in an amount, together with other funds which may herein or hereafter from time to time be irrevocably appropriated to the Utility Improvements Debt Service Subaccount, sufficient to meet the requirements of Minnesota Statutes, Section 475.61 for the payment of the principal of, premium if any, and interest on the Utility Portion of the Bond; (B) any collections of all taxes which may hereafter be levied in the event that the net revenues of the System and other funds herein pledged to the payment of the principal and interest on the Utility Portion of the Bond are insufficient therefore; (C) a pro rata share of all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (D) all investment earnings on funds held in the Utility Improvements Debt Service Subaccount; and (E) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Utility Improvements Debt Service Subaccount. The Utility Improvements Debt Service Subaccount shall be used solely to pay the principal of and interest and any premium on the Utility Portion of the Bond and any other general obligation bonds of the City hereafter issued by the City and made payable from said subaccount as provided by law. No portion of the proceeds of the Bond 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 Bond was issued and (2) in addition to the above in an amount not greater than the lesser of five percent of the proceeds of the Bond or $100,000. To this effect, any proceeds of the Bond and any sums from time to time held in the Construction Account, Operation and Maintenance Accounts 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 therefrom) 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 10 75285660v2 to the extent that such investment would cause the Bond to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"). 9. Covenants Relating to the Street Reconstruction Portion of the Bond. (a) Tax Lew. To provide moneys for payment of the principal and interest on the Street Reconstruction Portion of the Bond there is hereby levied upon all of the taxable property in the City a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Years of Tax Levy Years of Tax Collection Amount See Attached Schedule in Exhibit A (b) Coverage Test. The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Street Reconstruction Portion of the Bond, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Street Reconstruction Portion of the Bond. The tax levies shall be irrepealable so long as any of the Street Reconstruction Portion of the Bond is outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 10. Covenants Relating to the Utility Portion of the Bond. (a) Sufficiency of Net Revenues. It is hereby found, determined and declared that the net revenues of the System are sufficient to pay when due the principal of and interest on the Utility Portion of the Bond and the Series 2022B Bonds and the Outstanding System Bonds and a sum at least five percent in excess thereof. The net revenues of the System are hereby pledged on a parity lien with the Outstanding System Bonds and shall be applied for that purpose, but solely to the extent required to meet, together with other pledged sums, the principal and interest requirements of the Utility Portion of the Bond of the Bond. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the net revenues of the System for the payment of other or additional obligations of the City, provided that it has first been determined by the City Council that the estimated net revenues of the System will be sufficient in addition to all other sources, for the payment of the Utility Portion of the Bond and such additional obligations and any such pledge and appropriation of the net revenues may be made superior or subordinate to, or on a parity with the pledge and appropriation herein. (b) Excess Net Revenues. Net revenues in excess of those required for the foregoing may be used for any proper purpose. (c) Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes, Section 444.075, the City hereby covenants and agrees with the Holder of the Bond that it will impose and collect charges for the service, use, availability and connection to the System at the 11 75285660v2 times and in the amounts required to produce net revenues adequate to pay all principal and interest when due on the Utility Portion of the Bond. 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." 11. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bond, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged. If the net revenues of the System appropriated and pledged to the payment of principal and interest on the Utility Portion of the Bond, together with other funds irrevocably appropriated to the Utility Improvements Project Debt Service Subaccount herein established, shall at any time be insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount an ad valorem tax upon all taxable property in the City sufficient to pay such principal and interest as it becomes due. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bond and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 12. Defeasance. When the Bond has been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered owner of the Bond shall, to the extent permitted by law, cease. The City may also discharge its obligations with respect to principal installments of the Bond which is due on any date by irrevocably depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or if the Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also at any time discharge its obligations with respect to the Bond, subject to the provisions called for redemption on any date when they are prepayable according to their terms, by depositing with the 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 the Bond, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if notice of redemption as herein required has been duly provided for, to such earlier redemption date. 13. 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 Bond, 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"). 12 752as66ov2 The City hereby certifies and/or covenants as follows: (a) Not later than sixty days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration") which effectively (i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the 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 preliminary costs, which in the aggregate do not exceed twenty percent of the "issue price" of the Bond, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of $100,000 or five percent of the proceeds of the Bond. (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Bond or any of the other types of expenditures described in Section 1. 1 50-2(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 Bond, and not later than 18 months after the later of (i) the date of the payment of the Reimbursement Expenditure, or (ii) the date on which the Project to which the Reimbursement Expenditure relates is first placed in service, but in no event more than three years after the date of payment 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 Bond is issued, shall be treated as made on the day the Bond is issued. Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph upon receipt of an opinion of its bond counsel for the Bond stating in effect that such action will not impair the tax-exempt status of the Bond. 14. Certificate of Registration. A certified copy of this resolution is hereby directed to be filed in the office of the Director of Property Tax and Public Records of Hennepin County, together with such other information as the Director of Property Tax and Public Records of Hennepin County shall require, and to obtain the Director of Property Tax and Public Records of Hennepin County's Certificate that the Bond has been entered in the bond register and the tax levies required by law have been made. 15. 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 13 7528566M issuance of the Bond, certified copies of all proceedings and records of the City relating to the Bond 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 Bond as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 16. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby covenants not to use the proceeds of the Bond 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 Bond to be an "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code. 17. Tax -Exempt Status of the Bond; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bond, including without limitation (i) requirements relating to temporary periods for investments, (ii) limitations on amounts invested at a yield greater than the yield on the Bond, and (iii) the rebate of excess investment earnings to the United States. The City expects to satisfy the 24-month spending exception for gross proceeds of the Bond as provided in Section 1.148-7(d)(1) of the Regulations. The Mayor and/or Interim City Administrator and/or Finance Director are hereby authorized and directed to make such elections as to arbitrage and rebate matters relating to the Bond as they deem necessary, appropriate or desirable in connection with the Bond, and all such elections shall be, and shall be deemed and treated as, elections of the City. 18. Designation of Qualified Tax -Exempt Obligations. In order to qualify the Bond as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bond is issued after August 7, 1986; (b) the Bond is not a "private activity bond" as defined in Section 141 of the Code; (c) the City hereby designates the Bond as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2022 will not exceed $10,000,000; (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2022 have been designated as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; and (f) the aggregate face amount of the Bond does not exceed $10,000,000. 14 7528566ov2 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. 19. Financial Statements. As soon as available, but in no event later than 270 days of each fiscal year end, the City shall provide audited fiscal year-end financial statements to the Purchaser. The City shall also provide relevant financing information as requested by the Purchaser. The City's obligation to provided annual audited financial information to the Purchaser commences with the current fiscal year to end on December 31, 2022. 20. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 21. 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. he 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, t following voted in favor thereof: & and the following voted against the same: Whereupon the resolution was declared duly passed and adopted. 15 7528566M STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF SHOREWOOD I, the undersigned, being the duly qualified and acting City Clerk of the City of Shorewood, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council, duly called and held on the date therein indicated, insofar as such minutes relate to authorizing the issuance and awarding the sale of $7,570,000 General Obligation Street Reconstruction and Utility Revenue Bond, Series 2022A. WITNESS my hand on November 14, 2022. City Clerk 16 7528566ov2 S TAX LEVY SCHEDULE Years of Tax Years of Tax Lew Collection Amount 2022 2023 $ 228,639 2023 2024 289,416 2024 2025 289,009 2025 2026 288,376 2026 2027 287,517 2027 2028 286,431 2028 2029 285,119 2029 2030 288,831 2030 2031 286,840 2031 2032 289,873 2032 2033 287,203 2033 2034 289,557 2034 2035 286,209 2035 2036 287,884 2036 2037 289,107 2037 2038 284,627 2038 2039 285,171 2039 2040 280,012 2040 2041 279,878 2041 2042 27M90 5,668,991 75285660v2