06-084
CITY OF SHOREWOOD
RESOLUTION NO. 06- 084
A RESOLUTION AWARDING THE SALE OF $ 1,450,000 GENERAL
OBLIGATION WATER REVENUE BONDS, SERIES 2006A;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council of the City of Shorewood, Hennepin County,
Minnesota (the "City") as follows:
Section 1.
Sale of Bonds.
1.01. It is determined that:
(a) the City engineer has recommended the construction of various improvements to
the City's water system (the "Project").
(b) the City is authorized by Minnesota Statutes, Section 444.075 (the "Act") to
finance all or a portion of the cost of the Project (the "Project Costs") by the issuance of general
obligation bonds of the City payable from the net revenues of the water system. The Project
Costs are presently estimated by the engineer to be as follows:
Proiect Designation & Description:
Total Project Cost
Project Costs
Discount Allowance
Costs of Issuance
Rounding Amount
$ 1,400,000
18,850.00
30,145.00
1,005.00
Total
$1,450,000.00
(c) it is necessary and expedient to the sound financial management of the affairs of
the City to issue $1,450,000 General Obligation Water Revenue Bonds, Series 2006A (the
"Bonds") pursuant to the Act to provide financing for the Project.
1.02. The proposal of
(the "Purchaser") to purchase $1,450,000 General Obligation Water Revenue Bonds, Series
2006A (the "Bonds") of the City described in the Terms of Proposal thereof is found and
determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at
a price of $ plus accrued interest to date of delivery, for Bonds bearing interest as
follows:
Year
Interest Rate
Year
Interest Rate
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
True interest cost:
1.03. The sum of $ being the amount proposed by the Purchaser in excess
of $1,431,150 shall be credited to the Debt Service Fund hereinafter created, or deposited in the
Construction Fund under Section 4.01 hereof, as determined by the City's financial advisor. The
City Finance Director-Treasurer is directed to retain the good faith check of the Purchaser,
pending completion of the sale of the Bonds, and to return the good faith checks of the
unsuccessful proposers. The Mayor and City Administrator-Clerk are directed to execute a
contract with the Purchaser on behalf of the City.
1.04. The City will fOlthwith issue and sell the Bonds pursuant to Minnesota Statutes,
Section 444.075 (the "Act"), in the total plincipal amount of $1,450,000, originally dated
November 1, 2006, 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
January 1 in the years and amounts as follows:
Year Amount Year Amount
2012 $50,000 2018 $140,000
2013 120,000 2019 145,000
2014 120,000 2020 155,000
2015 125,000 2021 160,000
2016 130,000 2022 165,000
2017 140,000
In accordance with Minnesota Statutes, Section 475.54, subdivision 17, the City Council: (a)
determines that the Bonds are payable primarily from a source other than ad valorem taxes (i.e.,
net revenues of the City water system); (b) estimates that such primary source of payment is
sufficient to pay when due the principal of an interest on the Bonds; and (c) determines that the
primary source of payment is inevocably appropriated to payment of the Bonds; all as fmther set
fOlth in Section 4 hereof.
1.05. Optional Redemption. The City may elect on January 1, 2014, and on any day
thereafter to prepay Bonds due on or after January 1, 2015. Redemption may be in whole or in
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pmt and if in pmt, at the option of the City and in such manner as the City will determine. If less
than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in
Section 7 hereof) of the pmticular 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
pmticipant will then select by lot the beneficial ownership interests in such maturity to be
redeemed. Prepayments will be at a price of par plus accrued interest.
1.06. Term Bonds. To be completed if Term Bonds are requested by the Purchaser.
Section 2.
Registration and Payment.
2.01. Registered Form. The Bonds will be issued only in fully registered form. The
interest thereon and, upon sunender 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 will be payable on January 1 and July 1 of each year, commencing July 1,2007, to
the registered owners of record thereof as of the close of business on the fifteenth day of the
immediately preceding month, whether or not that day is a business day.
2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating
agent and paying agent (the "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 sunender 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 matmity, 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.
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(c) Exchange of Bonds. When Bonds are sunendered 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 sunendered 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 unauthOlized.
(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 plincipal 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 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 a 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 of 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 smTendered
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.
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299434vl S18 SH230-38
./
(i) Redemption. In the event any of the Bonds are called for redemption,
notice thereof identifying the Bonds to be redeemed will be given by the Registrar by
mailing a copy of the redemption notice by first class mail (postage prepaid) to the
registered owner of each Bond to be redeemed at the address shown on the registration
books kept by the Registrar and by publishing the notice if required by law. Failure to
give notice by publication or by mail to registered owners, or any defect therein, will not
affect the validity of the proceedings for the redemption of Bonds. Bonds so called for
redemption will cease to bear interest after the specified redemption date, provided that
the funds for the redemption are on deposit with the place of payment at that time.
2.04. Appointment of Initial Registrar. The City appoints Northland Trust Services,
Inc., Minneapolis, 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 Finance
Director-Treasurer 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 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.
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299434vl S18 SH230-38
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 fOlth 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
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF SHOREWOOD
$
GENERAL OBLIGATION WATER REVENUE BOND,
SERIES 2006A
Rate
Maturity
Date of
Original Issue
CUSIP
January 1,20_
November 1, 2006
Registered Owner: Cede & Co.
The City of Shorewood, Minnesota, a duly organized and existing municipal corporation
in Hennepin County, Minnesota (the "City"), acknowledges itself to be indebted and for value
received hereby promises to pay to the Registered Owner specified above or registered assigns,
the plincipal sum of $ on the maturity date specified above with interest thereon
from the date hereof at the annual rate specified above, payable January 1 and July 1 in each
year, commencing July 1,2007, 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 Northland Trust
Services, Inc., Minneapolis, Minnesota, as 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 may elect on January 1,2014, and on any day thereafter to prepay Bonds due on
or after January 1, 2015. Redemption may be in whole or in pmt and if in pmt, at the option of
the City and in such manner as the City will determine. If less than all Bonds of a matmity are
called for redemption, the City will notify The Depository Trust Company ("DTC") of the
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299434vl S18 SH230-38
pmticular amount of such maturity to be prepaid. DTC will determine by lot the amount of each
pmticipant's interest in such matmity to be redeemed and each pmticipant will then select by lot
the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a
price of par plus accrued interest.
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 $1,450,000 all of like
original issue date and tenor, except as to number, maturity date, redemption privilege, and
interest rate, all issued pursuant to a resolution adopted by the City Council on October 23, 2006
(the "Resolution"), for the purpose of providing money to aid in financing various improvements
to the water system of the City, pursuant to and in full conformity with the Constitution and laws
of the State of Minnesota, including Minnesota Statutes, Section 444.075 and Chapter 475 and
the principal hereof and interest hereon are payable primarily from the net revenues of the water
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 lights and powers thereby conferred. The full
faith and credit of the City are inevocably 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 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 system free from
competition by other like municipal 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 system; that it will also create and
maintain a General Obligation Water Revenue Bonds, Series 2006A Debt Service Fund, into
which it will pay, out of the net revenues from the water system a sum sufficient to pay principal
hereof and interest thereon 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 celtain limitations set forth therein, this
Bond is transferable upon the books of the City at the principal office of the Registrar, by the
registered owner hereof in person or by the owner's attorney duly authorized in writing upon
sunender hereof together with a written instrument of transfer satisfactory to the Registrar, duly
executed by the registered owner or the owner's attorney; and may also be sunendered in
exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City
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299434vl S18 SH230-38
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 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 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 tenns, 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
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:
CITY OF SHOREWOOD, MINNESOTA
(Facsimile)
City Administrator-Clerk
(Facsimile)
Mayor
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
NORTHLAND TRUST SERVICES, INC.
By
Authorized Representative
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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
In common
UNIF GIFT MIN ACT
Custodian
(Cust)
(Minor)
TEN ENT -- as tenants
by entireties
under Uniform Gifts or
Transfers to Minors
JT TEN --
as joint tenants with
right of survivorship and
not as tenants in common
Act. . . . .
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and
does hereby inevocably 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.
Dated:
Notice:
The assignor's signature to this assignment must conespond with the
name as it appears upon the face of the within Bond in every pmticular,
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
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299434vl 518 SH230-38
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 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 secmity or other
identifying number of assignee
PROVISIONS AS TO REGISTRATION
The ownership of the plincipal 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.
Date of Registration
Registered Owner
Signature of
Officer of Registrar
Cede & Co.
Federal ID #13-2555119
3.02. The City Administrator-Clerk will obtain a copy of the proposed approving legal
opinion of Kennedy & Graven, Chattered, Minneapolis, Minnesota, which will be complete
except as to dating thereof and will cause the opinion to be printed on or accompany each Bond.
Section 4.
Payment; Security; Pledges and Covenants.
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299434v I S18 SH230-38
4.01. (a) The City will create and continue to operate its Water Fund to which will
be credited all gross revenues of the water system and out of which will be paid all normal and
reasonable expenses of cunent operations of the water system. Any balance therein are deemed
net revenues and will be transferred, from time to time, to a General Obligation Water Revenue
Bonds, Series 2006A Debt Service Fund (the "Debt Service Fund") hereby created in the Water
Fund, which fund will be used only to pay principal of and interest on the Bonds and any other
bonds similarly authorized. There will always be retained in the Debt Service Fund a sufficient
amount to pay when due the principal of and interest on the Bonds and the City Administrator-
Clerk must report any Clment or anticipated deficiency in the Debt Service Fund to the City
Council. There is appropriated to the Debt Service Fund (i) any amount over the minimum
purchase plice of the Bonds paid by the Purchaser, to the extent designated for deposit in the
Debt Service Fund in accordance with Section 1.03 and (ii) the accrued interest paid by the
Purchaser upon closing and delivery of the Bonds.
(b) The proceeds of the Bonds, less the appropnatIOns made in paragraph (a),
together with any other funds appropriated during the construction of the Project financed by the
Bonds will be deposited in a separate construction fund to be used solely to defray expenses of
the Project and the payment of principal and interest on the Bonds prior to the completion and
payment of all costs of the Projects. When the Project is completed and the cost thereof paid, the
construction account is to be closed and any balance therein is to be deposited in the Debt
Service Fund.
4.02. The City Council covenants and agrees with the holders of the Bonds that so long
as any of the Bonds remain outstanding and unpaid, it will keep and enforce the following
covenants and agreements:
(a) The City will continue to maintain and efficiently operate the water
system as public utilities and conveniences free from competition of other like municipal
utilities and will cause all revenues therefrom to be deposited in bank accounts and
credited to the water system accounts as hereinabove provided, and will make no
expenditures from those accounts except for a duly authorized purpose and in accordance
with this resolution.
(b) The City will also maintain the Debt Service Fund as a separate account in
the Water Fund and will cause money to be credited thereto from time to time, out of net
revenues from the water plant and system in sums sufficient to pay principal of and
interest on the Bonds when due.
(c) The City will keep and maintain proper and adequate books ofrecords and
accounts separate from all other records of the City in which will be complete and conect
entries as to all transactions relating to the water system and which will be open to
inspection and copying by any bondholder, or the bondholder's agent or attorney, at any
reasonable time, and it will furnish certified transcripts therefrom upon request and upon
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299434vl S18 SH230-38
payment of a reasonable fee therefor, and said account will be audited at least annually by
a qualified public accountant and statements of such audit and repOlt will be furnished to
all bondholders upon request.
(d) The City Council will cause persons handling revenues of the water
system to be bonded in reasonable amounts for the protection of the City and the
bondholders and will cause the funds collected on account of the operations of the water
system to be deposited in a bank whose deposits are guaranteed under the Federal
Deposit Insurance Law.
(e) The Council will keep the water system insured at all times against loss by
fire, tornado and other risks customarily insured against with an insurer or insurers in
good standing, in such amounts as are customary for like plants, to protect the holders,
from time to time, of the Bonds and the City from any loss due to any such casualty and
will apply the proceeds of such insurance to make good any such loss.
(f) The City and each and all of its officers will punctually perform all duties
with reference to the water system as required by law.
(g) The City will impose and collect charges of the nature authorized by
Minnesota Statutes, Section 444.075 at the times and in the amounts required to produce,
net revenues adequate to pay all principal and interest when due on the Bonds and to
create and maintain such reserves securing said payments as may be provided in this
resolution.
(h) The City Council will levy general ad valorem taxes on all taxable
property in the City, when required to meet any deficiency in net revenues.
4.03. It is hereby determined that the estimated collection of net revenues for the
payment of principal and interest on the Bonds will produce at least five percent in excess of the
amount needed to meet, when due, the principal and interest payments on the Bonds and that no
tax levy is needed at this time.
4.04. The City Administrator-Clerk is authorized and directed to file a certified copy of
this resolution with the Taxpayer Services Division Manager and to obtain the certificate
required by Minnesota Statutes, Section 475.63.
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299434vl S18 SH230-38
Section 5.
Authentication of Transcript.
5.01. The officers of the City are authorized and directed to prepare and furnish to the
Purchaser and to the attorneys approving the Bonds, celtified 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 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.
5.02. The Mayor; City Administrator-Clerk and Finance Director-Treasurer are
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.
5.03. The City authorizes the Purchaser to forward the amount of Bond proceeds
allocable to the payment of issuance expenses. (other than amounts payable to Kennedy &
Graven, Chattered as Bond Counsel) to Northland Trust Services, Inc. on the closing date for
further distribution as directed by the City's financial adviser, Northland Securities, Inc.
Section 6.
Tax Covenant.
6.01. 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.
6.02. (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 2006) 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
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299434vl S18 SH230-38
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)(D) of the Code.
6.03. 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 "plivate
activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code.
6.04. 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 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 2006 will not exceed
$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during
calendar year 2006 have been designated for purposes of Section 265(b)(3) of the Code.
6.05. 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 7.
Book-Entry System; Limited Obligation of City.
7.01. The Bonds will be initially issued in the form of a separate single typewritten or
plinted fully registered Bond for each of the matmities set forth in Section 1.03 hereof. Upon
initial issuance, the ownership of each Bond will be registered in the registration books kept by
the 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 Registrar in the
name of Cede & Co., as nominee of DTC.
7.02. With respect to Bonds registered in the registration books kept by the Registrar in
the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will
have no responsibility or obligation to any broker dealers, banks and other financial institutions
14
299434vl S18 SH230-38
from time to time for which DTC holds Bonds as securities depository (the "Pmticipants") 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 Pmticipant 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 shown
by the registration books kept by the 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 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
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 Bond, 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 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 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 Registrar and Paying Agent.
7.03. Representation Letter. The City has heretofore executed and delivered to DTC a
Blanket Issuer Letter of Representations (the "Representation Letter") which shall govern
payment of principal of, premium, if any, and interest on the Bonds and notices with respect to
the Bonds. Any Paying Agent or 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 Registrar and Paying Agent, respectively, to be
complied with at all times.
7.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the
City Council, detelmines that it is in the best interests of the persons having beneficial interests
in the Bonds that they be able to obtain Bond celtificate, 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 celtificates as requested by DTC and any
other registered owner 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
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.
15
299434vl S18 SH230-38
7.05. 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 all notices
with respect to the Bond will be made and given, respectively in the manner provided in DTC's
Operational Anangements, as set fOlth in the Representation Letter.
Section 8.
Continuing Disclosure.
8.01. The City hereby covenants and agrees that it will comply with and carry out all of
the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of
this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to
be considered an event of default with respect to the Bonds; however, any Bondholder may take
such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the City to comply with its obligations under this section.
8.02. "Continuing Disclosure Certificate" means that certain Continuing Disclosure
Certificate executed by the Mayor and City Administrator-Clerk and dated the date of issuance
and delivery of the Bonds, as Oliginally executed and as it may be amended from time to time in
accordance with the terms thereof.
16
299434vl S18 SH230-38
Section 9.
Defeasance.
9.01. When all Bonds and all interest thereon, have been discharged as provided in this
section, all pledges, covenants and other lights granted by this resolution to the holders of the Bonds
will cease, except that the pledge of the full faith and credit of the City for the prompt and full
payment of the plincipal of and interest on the Bonds will remain in full force and effect. The City
may discharge all Bonds which are due on any date by depositing with the Registrar on or before
that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due,
it may neveltheless 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 remainder of this page is intentionally left blank.)
17
299434vl 518 SH230-38
2006.
ADOPTED by the City Council of the City of Shorewood this 23~51_day of October,
/
(ji&-
WOODY LOVE, MAYOR
ATTEST:
A WSON, CITY ADMINISTRATOR/CLERK
299434vl SJB SH230-38
OCT-23-2005 13:50
PIPER JAFFRAY
9133453294
P.01/01
PARITY Bid Form
Page 1 of2
"
: ~'
Piper Jaffray - Kansas City I MO's Bid .~..
Shorewood
$1.450,000 General Obligation Water Revenue Bonds,
Series 2006A
" ' ~
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~:;',~~)It~i::':i-~\~::~{,.;';~.\,~~<f);;~:;.., ~..:.~ C.::....::;.~f~1~~hL> .~~b:?:{~.~~:,. :J.;~;~~i~
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For the aggregate principal amD~nt of $1,450,000.00, we will pay you $1,442,607.95, plus accrued Interest from
the date of issue to the elate of delivery. The Bonda are to bear interest at the rollowing rate(s):
l'
I ~;
, \
Maturity Date IAmount $ Coupon %
01/0112012 50M 4.0000
0110112013 120M 4.0000
01101/2014 120M 4.0000
Q1lQUZQ1S
Qj/OH201() 255M 4.0000
01101/2017
01/01/2018 280M 4.0000
01/0112019
01/011202Q 300M 4.0000
01/0112021
011Q1/.2022 325M 4.0000
Total Interest Cost $625.266.67
Di9c:Ount $7,392.05
Net Interest Cost $632,658.72 ./
TIC: 4.058546
lima Last Bid Received On: 1 0/2312006 10:59:65 CDST
I
, ,':
I
This proposalls made subj~ to all of the tenns and oonditions of the Officlal Bid Form. the Omclal Notice of
Sale, and the Preliminary Offtclal statemenl, all of which are made a. part hl!reaf.
, 't
, ~
Bidder. Piper Jafftay, Kansas CItj I MQ
Contact: Joyce Chaney
Title: Managing Director
Telaphone:913-345-3360
Fax:
Date:
Company Name: PI p-M" :J @...ffi.~
OO.PmdBr-~~
"J"yc.e e. fi~
Date: JP I ,;? 3/0b..
Issuer Ni'SI'M: City of ShtmM'Clod
Ac:c:epted ay:
. .
https:llwww.newissuebom.e..i-deal.comIParity/asp/main.asp?frame=Content&page....JJarity.n 10/2312006
TOTAL P.01
NORTHLAND
SECURITIES
TABULATION OF BIDS
SHOREWOOD, MN
$1,450,000
GENERAL OBLIGA nON WATER REVENUE BONDS, SERIES 2006A
AWARD:
CREDIT RATING:
MOODY'S INVESTORS SERVICE" Aa3"
PIPER JAFFRA Y
DA TE OF SALE:
MONDAY, OCTOBER 23, 2006
NET
INTEREST COST
$632,658.72
BIDDER
PRICE
PIPER JAFFRA Y
Kansas City, MO
$1,442,607.95
UMBBANK
Kansas City, MO
$637,455.25
CRONIN & CO.
Minneapolis, MN
$640,629.48
WELLS FARGO BROKERAGE SERVICES
Minneapolis, MN
$645,336.67
TRUE
INTEREST
COST
4.058646%
4.086933%
4.106425%
4.127135%
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www"northlandsecurities"com
Member NASD and SIPC