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03-059CITY OF SHOREWOOD • RESOLUTION NO. 03-059 A RESOLUTION APPROVING PUBLICATION OF ORDINANCE NO. 395 BY TITLE AND SUMMARY WHEREAS, on 28 July, 2003, the City Council of the City of Shorewood adopted Ordinance No. 395 entitled "An Ordinance Amending Chapter 903 of the Shorewood City Code Relating to Municipal Water Use and Service; and WHEREAS, the City staff has prepared a summary of Ordinance No. 395 as follows: This Ordinance establishes certain rules and standards for water usage and service requirements within the City of Shorewood. Significant features of the amendment include the following: 1. Connection charges are made more equitable between older properties and newer lots. 2. Connection fees are reduced by giving landowners credit for their expense in getting water to the property line. 3. Allows, at Council discretion, connection fees to be assessed. 4. All requirements are contained within one ordinance. • A copy of the entire text of the Ordinance is available in the office of the City Administrator/ Clerk. NOW THEREFORE, IT IS HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF SHOREWOOD: The City Council finds that the above title and summary of Ordinance No. 395 clearly informs the public of intent and effect of the Ordinance. 2. The City Clerk is directed to publish this Resolution, in lieu of publication of the entire text of Ordinance No. 395, pursuant to Minnesota Statutes, Section 412.191, subdivision 4. The City Administrator is directed to post a copy of the entire text of Ordinance No. 395 at the front counter at Shorewood City Hall, beginning 29 July, 2003, and ending 29 August, 2003. • Resolution No. 03- 059 la Page 2 ADOPTED by the Shorewood City Council on this Sth day of July, 2003. WOODY LOVE, MAYOR ATTEST: G WWSON, CITY ADMINISTRATOR/CLERK • 0 I R d El Extract of Minutes of Meeting of the City Council of the City of Shorewood, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Shorewood, Minnesota, was duly held in the City Hall in said City on Monday, July 14 2003, commencing at 7:00 o'clock P.M. The following members were present: Mayor Love, Council Members: Lizee, Garfunkel, Turgeon 0 and the following were absent: Council Member Zerby The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's approximately $815,000 General Obligation Refunding Bonds of 2003. The City Administrator -Clerk presented a proposal from Northland Securities, Inc. DJK-234059v1 SH230-35 0 After due consideration of the proposals, Member Garfunkel then introduced the following resolution and moved its adoption: RESOLUTION NO.03-058 A RESOLUTION AWARDING THE SALE OF $815,000 GENERAL OBLIGATION REFUNDING BONDS OF 2003; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY. BE IT RESOLVED By the City Council of the City of Shorewood, Hennepin County, Minnesota (City) as follows: Section 1. Sale of Bonds. 1.01. It is hereby determined that: • (a) the City is authorized by the provisions of Minnesota Statutes, Chapter 475 (Act) and Section 475.67, Subdivision 13 of the Act to issue and sell its general obligation bonds to refund outstanding bonds when determined by the City Council to be necessary and desirable; (b) it is necessary and desirable that the City issue $815,000 General Obligation Refunding Bonds of 2003 to refund in advance of maturity and at their redemption date, certain outstanding general obligations of the City; (c) the outstanding bonds to be refunded (Refunded Bonds) consist of the $1,920,000 General Obligation Water Revenue Bonds, Series 1995A, dated November 1, 1995, of which $770,000 in principal amount is callable on February 1, 2005 (Redemption Date). The proposal of Northland Securities, Inc. (Purchaser) to purchase $815,000 General Obligation Refunding Bonds of 2003 (Bonds) of the City described in the Official Terms of Proposal thereof is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $799,026.00 plus accrued interest to date of delivery, for Bonds bearing interest as follows: DJK-234059v1 SH230-35 Year of Interest Maturity Rate 2006 1.50% 2007 1.90% 2008 2.10% 2009 2.40% 2010 2.75% 2011 3.00% True interest cost: 2.8494411 % 1.02. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Chapter 475 (Act) in the total principal amount of $815,000, originally dated August 1, 2003, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 without option of prior payment in the years and amounts as follows: Year Amount 2006 $145,000 • 2007 145,000 2008 135,000 2009 135,000 2010 130,000 2011 125,000 Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2004, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. DJK-234059vl • SH230-35 • 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (Registrar). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like • aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for DJK-234059v1 SH230-35 • any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. 2.04. Appointment of Initial Re isg_trar. The City appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar. The Mayor and the City Administrator - Clerk are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Administrator -Clerk must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Administrator -Clerk and executed on behalf of the City by the signatures of the Mayor and the City Administrator -Clerk provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the DJK-234059v1 SH230-35 Bonds have been so prepared, executed and authenticated, the City Administrator -Clerk will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. The Bonds will be printed or typewritten in substantially the following form: No. R- UNITED STATES OF AMERICA $815,000 STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF SHOREWOOD . GENERAL OBLIGATION REFUNDING BOND OF 2003 Date of Rate Maturity Original Issue CUSIP August 1, 2003 Registered Owner: Cede & Co. The City of Shorewood, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (City), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $815,000 on the maturity date specified above without option of prior payment, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing February 1, 2004, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National DJK-234059v1 SH230-35 • Association, St. Paul, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the Code) relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. This Bond is one of an issue in the aggregate principal amount of $815,000 all of like original issue date and tenor, except as to number, maturity date, and interest rate, all issued pursuant to a resolution adopted by the City Council on July 14, 2003 (the Resolution), for the purpose of providing money to refund in advance of maturity and on the Redemption Date, as defined in the Resolution, a portion of certain general obligation bonds of the City, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 475.67, Subdivision 13. The interest hereon is payable until the Redemption Date, primarily out of the Escrow Account and Debt Service Account in the City's Refunding Bonds of 2003 Debt Service Fund and after the Redemption Date from net revenues of the water plant and system of the City in a special debt service fund of the City, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and • credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in net water system revenues pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. IT IS HEREBY CERTIFIED AND RECITED That in and by the Resolution, the City has covenanted and agreed that it will continue to own and operate the water plant and system free from competition by other like utilities; that adequate insurance on said plant and system and suitable fidelity bonds on employees will be carried; that proper and adequate books of account will be kept showing all receipts and disbursements relating to the Water Fund, into which it will pay all of the gross revenues from the water plant and system; that it will also create and maintain a Refunding Bonds of 2003 Debt Service Fund, into which it will pay, out of the net revenues from the water plant and system a sum sufficient to pay principal hereof and interest hereon when due; and that it will provide, by ad valorem tax levies, for any deficiency in required net water system revenues. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City DJK-234059v1 SH230-35 • C7 will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. 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 or manual signatures of the Mayor and City Administrator -Clerk and has caused this Bond to be dated as of the date set forth below. Dated: (Facsimile) City Administrator -Clerk DJh-234059v1 SH230-35 CITY OF SHOREWOOD, MINNESOTA (Facsimile) Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION Authorized Representative The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants UNIF GIFT MIN ACT Custodian in common (Cost) TEN ENT -- as tenants under Uniform Gifts or by entireties Transfers to Minors JT TEN -- as joint tenants with right of survivorship and Act . . . . . . . . . . . . not as tenants in common (State) Additional abbreviations may also be used though not in the above list. ASSIGNMENT (Minor) For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. 0 DJK-234059v1 SH230-35 • Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Bond Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. DJK-234059v1 SH230-35 • Date of Registration Registered Owner Cede & Co. Federal ID #13-2555119 Signature of Officer of Registrar 3.02. The City Administrator -Clerk is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Bonds; Security; Escrow. 4.01. Funds and Accounts. For the convenience and proper administration of the moneys to be borrowed and repaid on the Bonds and the Refunded Bonds, and to provide adequate and specific security for the Purchaser and holders from time to time of the Bonds and Refunded Bonds, there is hereby created a special fund to be designated the Refunding Bonds of 2003 Debt Service Fund (the Fund) to be administered and maintained by the Administrator -Clerk as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the • City. The Fund will be maintained in the manner herein specified until all of the Refunded Bonds have been paid and until all of the Bonds and the interest thereon will have been fully paid. There will be maintained in the Fund two separate accounts, to be designated the Escrow Account and Debt Service Account. (a) Escrow Account. The Escrow Account will be maintained as an Escrow Account (Escrow Account) with U.S. Bank National Association in St. Paul, Minnesota, which is a suitable financial institution within the State, whose deposits are insured by the Federal Deposit Insurance Corporation, whose combined capital and surplus is not less than $500,000 and said financial institution is hereby designated escrow agent (Escrow Agent) for the Escrow Account. All proceeds of the sale of the Bonds will be received by the Escrow Agent and applied to fund the Escrow Account or to pay costs of issuing the Bonds. Proceeds of the Bonds not used to pay costs of issuance are hereby irrevocably pledged and appropriated to the Escrow Account, together with all investment earnings thereon. The Escrow Account will be invested in securities maturing or callable at the option of the holder on such dates and bearing interest at such rates as will be required to provide sufficient funds, together with any cash or other funds retained in the Escrow Account, to pay when due the interest to accrue on each Bond to and including February 1, 2005 (Redemption Date), and to pay when due on the Redemption Date the principal amount of each of the Refunded Bonds then outstanding. From the Escrow Account there will be paid (i) all interest paid on, or to be paid on, or to accrue on, the Bonds to and including the Redemption Date, and (ii) the principal of the Refunded Bonds due by reason of redemption 0 DJK-234059vt SH230-35 • on the Redemption Date. The Escrow Account will be irrevocably appropriated to the payment of the principal of and interest on the Bonds until the proceeds of the Bonds therein are applied to prepayment of the Refunded Bonds. The moneys in the Escrow Account will be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Escrow Account may be remitted to the City, all in accordance with the Escrow Agreement (hereafter defined) by and between the City and the Escrow Agent. Any moneys remitted to the City upon termination of the Escrow Agreement will be deposited in the Debt Service Account. (b) Debt Service Account. To the Debt Service Account there is hereby pledged and irrevocably appropriated and there will be credited: (i) any balance remitted to the City upon the termination of the Escrow Agreement; (ii) any balance remaining on February 2, 2005, in the Debt Service Fund created by the City Council resolution authorizing the issuance and sale of the Refunded Bonds (Prior Resolution); (iii) any collections of all taxes hereafter levied for the payment of the Bonds and interest thereon; (iv) all investment earnings on funds in the Debt Service Account; (v) after the Redemption Date, net revenues of the municipal water plant and system pledged to repayment of the Refunded Bonds in the Prior Resolution; (vi) accrued interest (if any) received upon delivery of the Bonds to the extent not required to fund the Escrow Account; and (vii) any and all other moneys which are properly available and are appropriated by the City Council to the Debt Service Account. The amount of any surplus remaining in the Debt Service Account when the Bonds and • interest thereon are paid will be used as provided in Section 475.61, Subdivision 4 of the Act. 4.02. Findings. It is hereby found and determined that based upon information presently available from the City's financial advisers, the issuance of the Bonds will result in a reduction of debt service cost to the City on the Refunded Bonds, such that The present value of such debt service or interest cost savings (Reduction) is 3.460% of the debt service on the Refunded Bonds. The Reduction, after the inclusion of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is adequate to authorize the issuance of the Bonds as provided by Minnesota Statutes, Section 475.67, Subdivisions 12 and 13. 4.03. The moneys in the Debt Service Account will be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund. No portion of the proceeds of the Bonds will 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 (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (ii) in addition to the above, in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds any sums from time to time held in the Fund (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield will not be invested at a yield in excess of the applicable yield restrictions imposed by the arbitrage . DJK-234059v1 SH230-35 • regulations on such investments after taking into account any applicable temporary periods or minor portion made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and money in the Fund will not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds to be federally guaranteed within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the Code). 4.04. 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 will be and are hereby irrevocably pledged. If the balance in the Escrow Account or Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Escrow Account or Debt Service Account when a sufficient balance is available therein. 4.05. It is determined that estimated collection of net revenues of the water system for the payment of principal and interest on the Bonds after the Redemption Date will produce at least five percent in excess of the amount needed to meet when due, the principal and interest payments on the Bonds and that no tax levy is needed at this time. • 4.06. Filing. The Administrator -Clerk is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager of Hennepin County and to obtain the certificate required by Section 475.63 of the Act. 4.07. The City will create and continue to operate its Water Fund to which will be credited all gross revenues of the water plant and system and out of which will be paid all normal and reasonable expenses of current operations of the water plant and system. Any balance therein will be deemed net revenues and will be transferred from time to time, to the Debt Service Account, which fund will be used only to pay principal of and interest on the Bonds after the Redemption Date and any other bonds similarly authorized. The Water Fund Accounts established in the resolution awarding the sale of the Refunded Bonds are continued and will be maintained as therein provided. There will always be retained in the Debt Service Fund a sufficient amount to pay principal of and interest on all the Bonds, and the Administrator -Clerk will report any current or anticipated deficiency in the Debt Service Account to the City Council. 4.07. Prior Resolution Pledges. The pledges and covenants of the City made by the Prior Resolution relating to the ownership, protection of and other particulars governing the operation and financial management of the municipal water plant and system and the improvements thereto financed by the Bonds and the Refunded Bonds are restated and confirmed in all respects. The provisions of the Prior Resolution are hereby supplemented to the extent necessary to give full effect to the provisions of this resolution. • DJK-234059v1 SH230-35 • Section 5. Refunding; Findings; Redemption of Refunded Bonds. 5.01. As of the date of delivery of and payment for the Bonds the proceeds of the Bonds, in the amount of $815,000 plus accrued interest on the Bonds less necessary expenses of the issuance of the Bonds (Proceeds), together with other funds (Funds) in the amount of $815,000 are hereby pledged and appropriated and will be deposited in the Escrow Account. 5.02. It is hereby found and determined that the Proceeds and Funds available and appropriated to the Escrow Account will be sufficient, together with the permitted earnings on the investment of the Escrow Account, to pay at maturity or redemption all of the principal of and redemption premium (if any) on the Refunded Bonds. 5.03. Securities purchased from the monies in the Escrow Account will be limited to securities specified in Section 475.67, Subdivision 8 of the Act. Northland Securities, Inc., as agent for the City of Shorewood is hereby authorized and directed to purchase for and on behalf of the City and in its name, appropriate securities to fund the Escrow Account. Upon the issuance and delivery of the Bonds, the securities so purchased will be deposited with the Escrow Agent and held pursuant to the terms of the Escrow Agreement and the Resolution. 5.04. The Refunded Bonds maturing on February 1, 2006 and thereafter will be redeemed • and prepaid on the Redemption Date. The Refunded Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as Attachment A which terms and conditions are hereby approved and incorporated herein by reference. The Registrar for the Refunded Bonds is authorized and directed to send a copy of the Notice of Redemption to each registered holder of the Refunded Bonds. 5.05. Escrow Agreement. On or prior to the delivery of the Refunding Bonds, the Mayor and the Administrator -Clerk are hereby authorized and directed to execute on behalf of the City an escrow agreement (Escrow Agreement) with the Escrow Agent in substantially the form now on file with the Administrator -Clerk. All essential terms and conditions of the Escrow Agreement including payment by the City of reasonable charges for the services of the Escrow Agent, are hereby approved and adopted and made a part of this resolution, and the City covenants that it will promptly enforce all provisions thereof in the event of default thereunder by the Escrow Agent. Section 6. Authentication of Transcript. 6.01. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity • DJK-234059v1 SH230-35 • and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 6.02. The Mayor and City Administrator -Clerk are hereby authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. Section 7. Tax Covenant. 7.01. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently • existing or as hereafter amended and made applicable to the Bonds. 7.02. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2003) exceed the small -issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(C) of the Code and further finds, determines and declares that the aggregate amount of all tax-exempt bonds (other than private activity bonds) issued by the City in 2003 (the year the Refunded Bonds were issued) did not exceed $5,000,000, and that the average maturity date of the Bonds is not later than the average maturity date of the Refunded Bonds. • DJK-234059v1 SH230-35 • 7.03. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 7.04. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2003 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2003 have been designated for purposes of Section 265(b)(3) of the Code. • 7.05. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 8. Book -Entry ystem; Limited Obligation of City. 8.01. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each such Bond will be registered in the registration books kept by the Bond Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (DTC). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Bond Registrar in the name of Cede & Co., as nominee of DTC. 8.02. With respect to Bonds registered in the registration books kept by the Bond Registrar in the name of Cede & Co., as nominee of DTC, the City, the Bond Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (Participants) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as • DJK-234059v1 SH230-35 • shown by the registration books kept by the Bond Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Bond Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Bond Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Bond Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Bond Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Administrator -Clerk of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon receipt of such a notice, the City Administrator -Clerk will promptly deliver a copy of the same to the Bond Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (Representation Letter) which will govern payment of • principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Bond Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation letter with respect to the Bond Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interest, in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Bond Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. • DJK-234059v1 SH230-35 • Section 9. Continuing Disclosure. 9.01. Participating underwriters need not comply with the continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), because the offering is in a principal amount less than $1,000,000. Consequently, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Bonds. The motion for the adoption of the foregoing resolution was duly seconded by Member Lizee and upon vote being taken thereon, the following voted in favor thereof: Lizee, Garfunkel, Turgeon and the following voted against the same: None. Council Member Zerby was absent • whereupon said resolution was declared duly passed and adopted. I* DJK-234059v1 SH230-35 • STATE OF MINNESOTA COUNTY OF HENNEPIN ) SS. CITY OF SHOREWOOD ) • I, the undersigned, being the duly qualified and acting Administrator -Clerk of the City of Shorewood, Hennepin County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on July 14, 2003 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of $815,000 General Obligation Refunding Bonds of 2003 of the City. WITNESS My hand officially as such Administrator -Clerk and the corporate seal of the City this 15th day of July, 2003. (SEAL) • DJK-234059v1 SH230-35 • is ATTACHMENT A NOTICE OF CALL FOR REDEMPTION $1,920,000 GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 1995A CITY OF SHOREWOOD HENNEPIN COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Shorewood, Hennepin County, Minnesota, there have been called for redemption and prepayment on FEBRUARY 1, 2005 all outstanding bonds of the City designated as General Obligation Water Revenue Bonds, Series 1995A, dated November 1, 1995, having stated maturity dates of February 1 in the years 2004 through 2011, both inclusive, totaling $770,000 in principal amount, and with the following CUSIP numbers: Year of Maturity CUSIP 2006 825227 HA2 2007 825227 HBO 2008 825227 HC8 2009 825227 HD6 2010 825227 HE4 2011 825227 HF 1 The bonds are being called at a price of par plus accrued interest to February 1, 2005, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, St. Paul, Minnesota, (formerly known as American Bank National Association) on or before February 1, 2005. If by mail: U.S. Bank National Association Corporate Trust Operations P.O. Box 64111 St. Paul, MN 55164-0111 • DJK-234059v1 SH230-35 If bha d: U.S. Bank National Association 180 East Fifth Street 3rd Floor - Bond Drop Window St. Paul, MN 55101 • Importance Notice: In compliance with the Economic Growth and Tax Relief p P Reconciliation Act of 2001, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W-9 Form, which may be obtained at a bank or other financial institution. The Registrar will not be responsible for the selection or use of the CUSIP number, nor is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934-6802 Dated: July 14, 2003. U BY ORDER OF THE CITY COUNCIL LOW 0 DJK-234059v1 SH230-35 City Administrator -Clerk City o 0horewood, Minnesota