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HomeMy WebLinkAboutRES 2006-08 AWARDING THE SALE OF $500,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2006A Extract of Minutes of Meeting of the City Council of the City of Corcoran, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Corcoran, Minnesota, was duly held in the CiTy Hall in said City on Thursday, February 23, 2006, commencing at 7 o'clock P.M. The following members were present: Mayor Cossette and Councilmembers: Lymangood, Grabowski, Jacobs and Thomas. and the following were absent: None * * * * * * * * * The Mayor announced that the next item of business was the consideration of a proposal for the purchase of$500,000 General Obligation Equipment Certificates of Indebtedness, Series 2006A of the City. The City Administrator presented an offer of Farmers State Bank of Hamel and Bankwest to purchase the Certificates that had been submitted to the City pursuant to Council direction. After due consideration of the proposal, Councilmember Lymangood introduced the following resolution and moved its adoption: 1vINI 274668v3 CRi 00-10 RESOLUTION NO. 2006-08 A RESOLUTION AWARDING THE SALE OF $500,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, 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 Corcoran, Hennepin County, Minnesota(the"City") as follows: Section 1. Background; Findin�s. It is hereby determined that: a) the City is authorized by Minnesota Statutes, Section 412301 to issue its general obligation certificates of indebtedness (the "Certificates") on such terms and in such manner as the City determines to finance the purchase of items of capita.l equipment (the"Equipment"), subject to certain limitations contained in the Act; (b) the City will purchase and acquire various items of Equipment, which items and the estimated cost thereof, aze listed on Exhibit A, attached hereto and made a part hereof; (c) as required by the Act, (i) the expected useful life of each item of Equipment is or will be at least as long as the term of the Certificates; and (ii) the principal amount of Certificates to be issued in the year 2006 will not exceed 0.25 percent of the market value of taxable property in the City for the year 2005; (d) it is necessary and expedient for the City to issue its Certificates for the purchase of Equipment and related expenses as described in Exhibit A: (e) it is necessary and expedient to the sound financial management of the affairs of the City to issue $500,000 General Obligation Equipment Certificates of Indebtedness, Series 2006A pursuant to the Act to provide financing for the Equipment. Section 2. Sale of Certificates. 2.01. Awazd to the Purchasers and Interest Ra.tes. The proposal of Farmers State Bank of Hamel and Bankwest (the"Purchasers") to purchase the Certificates is determined to be a 1�INI 274668v3 2 CR100-10 reasonable offer and is accepted, the proposal being to purchase the Certificates at a price of $500,000 for term certificates bearing interest as follows: Year Interest Ra.te Year Interest Rate 2011 3.80% 2013 4.10% True interest cost: 3.8819556% 2.02. The City will forthwith issue and sell the Certificates pursuant to the Act to the Purchasers in the total principal amount of $500,000, each of the Purchasers purchasing Certificates in the principal amount of$250,000. The Certificates will be originally dated as of date of delivery, in denominations as set forth below, and maturing on the dates and installment amounts as follows(without option of prior redemption): Date Amount Date Amount Dec. 1,2011 $380,000,in Dec. 1,2013 $120,000,in denominations of denominations of $190,000 each $60,000 each * Term Certificates subject to mandatory sinking fund redemption as set forth below. 2.03. Mandatory Redemption. The Certificates are subject to mandatory sinking fund redemption and shall be redeemed in part by lot at par plus accrued interest on the sinking fund installment dates and in the principal amounts as follows,allocated equally to each Certificate: Sinking Fund Installment Date Principal Amount December 1, 2011 Term Certificate 2007 $47,000 2008 8,000 2009 65,000 2010 126,000 2011 (maturity) 134,000 2013 Term Certificate 2012 $97,000 2013 (maturity) 23,000 Section 3. Registration and Payment. 3.01. Re�istered Form. The Certificates will be issued only in fully registered form. The interest thereon and, upon surrender of each Certificate, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. MNI 274668v3 3 CR100-10 3.02. Dates; Interest Payment Dates. Each Certificate will be dated as of the last interest payment date preceding the date of authentication to which interest on the Certificate 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 Certificate 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 Certificate will be dated as of the date of original issue. The interest on the Certificates is payable on June 1 and December 1 of each year, commencing June 1,2007, 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. 3.03. Re�istration. The City appoints the City Administrator as certificate registrar (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 will keep a bond register in which the Registrar will provide for the registration of ownership of Certificates and the registration of transfers and exchanges of Certificates entitled to be registered,transferred or exchanged. (b) Transfer of Certificates. Upon surrender for transfer of a Certificate 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 Registraz will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Certificates 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 Certificates. When Certificates aze surrendered by the registered owner for exchange the Registraz will authenticate and deliver one or more new Certificates of a like aggregate principal amount and maturity, as requested by the registered owner or the owner's attomey in writing. (d) Cancellation. Certificates surrendered upon any 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 Certificate is presented to the Registrar for transfer, the Registraz may refuse to transfer the Certificate until the Registrar is satisfied that the endorsement on the Certificate 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. (� Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Certificate is registered in the certificate register as the absolute owner MNI 2�4668v3 Q CR100-10 of the Certificate, whether the Certificate is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Certificate 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 Certificate to the extent of the sum or sums so paid. (g) Taxes, Fees and Char�. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Certificates 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 Certificates. If a Certificate becomes mutilated or is destroyed, stolen or lost,the Registrar will deliver a new Certificate of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Certificate or in lieu of and in substitution for any Certificate 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 Certificate destroyed, stolen or lost, upon filing with the Registraz of evidence satisfactory to it that the Certificate was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate certificate 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. Certificates so surrendered to the Registrar will be cancelled by the Registraz and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Certificate has already matured or been ca.11ed for redemption in accordance with its terms it is not necessary to issue a new Certificate prior to payment. 3.04. Execution, Authentication and Deliverv. The Certificates will be prepared under the direction of the City Administrator and executed on behalf of the City by the signatures of the Mayor and the City Administrator, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appeazs on the Certificates ceases to be such officer before the delivery of any Certificate, 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 Certificate 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 Certificate has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Certificates need not be signed by the same representative. The executed certificate of authentication on a Certificate is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Certificates have been so prepazed, executed and authenticated, the City Administrator will deliver the same to the Purchasers upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchasers are not obligated to see to the application of the purchase price. MNI 274668v3 $ CR100-]0 3.05. Temporary Certificates. The City may elect to deliver in lieu of printed definitive Certificates one or more typewritten temporary Certificates in substantially the form set forth in Section 4 with such changes as may be necessary to reflect more than one maturity in a single temporary certificate. Upon the execution and delivery of definitive Certificates the temporary Certificates will be exchanged therefor and cancelled. Section 4. Form of Certificate. 4.01. Execution of the Certificates. The Certificates will be printed or typewritten in substantially the following form: No. R- UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF CORCORAN GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF INDEBTEDNESS, SERIES 2006A Date of Rate Maturi Original Issue CUSIP , 20 March 15,2006 N/A The City of Corcoran, 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 or registered assigns, the principal sum of$ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable June 1 and December 1 in each year, commencing June 1, 2007,to the person in whose name this Certificate 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 aze payable in lawful money of the United States of America by check or draft by City Adminstrator, Corcoran, Minnesota, as Certificate 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 Certificates are subject to mandatory sinking fund redemption and shall be redeemed in part by lot at par plus accrued interest on the sinking fund installment dates and in the principal amounts as follows(without option of prior redemption): Sinkin��Fund Tnstallment Date Principal Amount MI�1I 274668v3 6 CR100-10 December 1, 2011 Term Certificate 2007 $ 2008 2009 2010 2011 (maturity) 2013 Term Certificate 2012 $ 2013 (maturity) All prepayments will be at a price of paz plus accrued interest. The City Council has designated the issue of Certificates of which this Certificate 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 $10 million limit allowed by the Code for the calendar year of issue. This Certificate is one of an issue in the aggregate principal amount of$ 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 February 23, 2006 (the"Resolution"), for the purpose of providing money to defray expenses incurred or to be incurred in purchasing various items of capital equipment, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the Sta.te of Minnesota, including Minnesota Statutes, Section 412.301, and the principal hereof and interest hereon are payable primarily from ad valorem t�es, as set forth in the Resolution to which reference is made for a full sta.tement of rights and powers thereby confened. The full faith and credit of the City are irrevocably pledged for payment of this Certificate and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency, which taxes may be levied without limitation as to rate or amount. The Certificates of this series are issued only as fully registered Certificates. As provided in the Resolution and subject to certain limitations set forth therein, this Certificate is transferable upon the books of the City at the principal office of the Certificate 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 Certificate Registraz, duly executed by the registered owner or the owner's attomey; and may also be surrendered in exchange for Certificates of other authorized denominations. Upon such transfer or exchange the City will cause a new Certificate or Certificates 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 ta�c, fee or governmental chazge required to be paid with respect to such transfer or exchange. MNI 274668v3 7 CR100-10 The City and the Certificate Registraz may deem and treat the person in whose name this Certificate is registered as the absolute owner hereof, whether this Certificate is overdue or not, for the purpose of receiving payment and for a11 other purposes, and neither the City nor the Certificate 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 home rule charter of the City and 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 Certificate 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 Certificate does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. This Certificate 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 Certificate Registrar by manual signature of one of its authorized representatives. IN WI`INESS WHEREOF, the City of Corcoran, Hennepin County, Minnesota, by its City Council, has caused this Certificate to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Administrator and has caused this Certificate to be dated as of the date set forth below. Dated: CITY OF CORCORAN, MINNESOTA �Facsimile) �Facsimile) City Administrator Mayor PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Certificate has been registered on the books of the Registraz in the name of the person last noted below. Signature of Date of Registration Re�istered Owner City Administrator Section 5. Pavment• Security; Pledges and Covenants. MNI 274668v3 $ CR100-10 5.01. Debt Service Fund. The Certificates are payable from the General Obligation Equipment Certificates of Indebtedness, Series 2006A Debt Service Fund (the"Debt Service Fund") hereby created, and the proceeds of the ad valorem ta�ces hereinafter levied are pledged to the Debt Service Fund. If a payment of principal or interest on the Certificates becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the City Administrator will pay such principal or interest from the general fund of the City, and the general fund may be reimbursed for those advances out of the proceeds of the taxes levied by this resolution, when collected. There is hereby appropriated to the Debt Service Fund (i) capitalized interest financed from Certificate proceeds, if any, (ii) any amount over the minimum purchase price of the Certificates paid by the Purchasers, and (iii)the accrued interest paid by the Purchasers upon closing and delivery of the Certificates. 5.02. Pled�,e of T�es. For the purpose of paying the principal of and interest on the Certificates, there is levied a direct annual irrepealable ad valorem tax upon all of the ta�cable property in the City, which will be spread upon the tax rolls and collected with and as part of other general t�es of the City. Such tax will be credited to the Debt Service Fund above provided and will be in the years and amounts as follows (year stated being year of levy for collection the following year): Yeaz Levy (See E�ibit B) 5.03. Certification to County Auditor as to Debt Service Fund Amount. It is determined that the estimated collection of the foregoing taxes will produce at least five percent in excess of the amount needed to meet when due, the principal and interest payments on the Certificates. The tax levy herein provided is inepealable until all of the Certificates are paid, provided that at the time the CiTy makes its annual tax levies, the City Administrator may certify to the Taxpayer Services Division Manager of Hennepin County the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the T�payer Services Division Manager will thereupon reduce the levy collectible during such year by the amount so certified. 5.04. Countv Auditor Certificate as to Registration. The City Administrator 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. Section 6. Tax Covenant. 6.01. T�-Exempt Certificates. The City covenants and agrees with the holders from time to time of the Certificates 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 Certificates to become subject to taa�ation 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 MNI 274668v3 9 CR100-10 will take or cause its officers, employees or agents to take, all affumative 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 Certificates. 6.02. No Rebate Required. (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 Certificates 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 Certificates, and the rebate of excess investment earnings to the United States, if the Certificates (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 t�-exempt certificates (other than private activity certificates) issued by the City (and all subordinate entities of the City) during the calendar year in which the Certificates aze issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(fl(4)(D) of the Code. 6.03. Not Private Activity Certificates. The City further covenants not to use the proceeds of the Certificates or to cause or permit them or any of them to be used, in such a manner as to cause the Certificates to be "private activity bonds"within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. Qualified Tax-Exempt Obli at� ions. In order to qualify the Certificates 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 Certificates are not "private activity bonds" as defined in Section 141 of the Code; (b) the City designates the Certificates as "qualified ta.x-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. MI�II 274668v3 1� CRI00-10 6.05. Procedural Requirements. 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. Authentication of Transcript. 7.01. City Proceedin�ys and Records. The officers of the City aze authorized and directed to prepare and furnish to the Purchasers and to the attorneys approving the Certificates, certified copies of proceedings and records of the City relating to the Certificates and to the financial condition and affairs of the City, and such other certificates, �davits 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 mazketability of the Certificates, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 7.02. No Official Statement or Prospectus. It is determined that no official statement or prospectus has been prepared or circulated by the City in connection with the sale of the Certificates and that the Purchasers have made their own investigations concerning the CiTy as set forth in an investment letter of even date, receipt of which is hereby acknowledged, from each Purchaser. Section 8. Continuin�Disclosure. 8.01. Limited Continuing Disclosure. 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 Certificates. Section 9. Defeasance. 9.01. Pled�es, Covenants, and Other Ri�hts to Cease. When all Certificates and all interest thereon, have been dischazged as provided in this section, a11 pledges, covenants and other rights granted by this resolution to the holders of the Certificates will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Certificates will remain in full force and effect. The City may discharge a11 Certificates 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 Certificate should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sui�icient for the payment thereof in full with interest accrued to the date of such deposit. MNI 274668v3 11 CR100-]0 The motion for the adoption of the foregoing resolution was duly seconded by Member Grabowski, and upon vote being taken thereon, the following voted in favor thereof: Cossette, Lymangood, Grabowski, Jacobs and Thomas. and the following voted against the same: None whereupon the resolution was declazed duly passed and adopted. MI�TI 274668v3 12 CR100-10 EXfIIBTT A Equipment and Description of Costs Estimated Price Public Works&Parks Tandem Dump Truck(replaces 1996)—Reflects Trade in $150,000 Pick Up'/4 Ton(replaces 2001) 30,000 Plow 4,000 Backhoe 95,000 Skid Loader&Trailer(replaces 2000) 30,000 Technology CC Chamber Sound System $12,000 Server Update 10,000 GIS Software 6,000 Hardware&Software 4,000 Desktop Computer 11,000 Police Squad Car(replace 2000) $32,500 Soflware Upgrade(will be done in 2yrs) 15,000 Civil Defense Sirens(1 '/2-share) 22,500 Support/Protection Equipment 15,000 Mobil Command Post Improvements 6,000 Soflwaze Upgrade 15,000 Squad(replace 2003) 33,000 Total Equipment: $491,000 Costs of Issuance: $9,000 Total Issue: $500,000 ivII•n 2�a�s�s A-1 CR100-10 EXHIBIT B TAX LEVY SCHEDULE YEAR OF LEVY YEAR OF COLLECTION AMOUNT 2006 2007 84,133.47 2007 2008 26,852.70 2008 2009 86,383.50 2009 2010 147,840.00 2010 2011 151,212.60 2011 2012 107,016.00 2012 2013 25,140.15 NINI 274668v3 B-1 CR100-10 STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) SS. ) CITY OF CORCORAN ) I, the undersigned, being the duly qualified and acting Administrator of the City of Corcoran, Hennepin County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regulaz meeting of the City Council of the City held on February 23, 2006 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$500,000 General Obligation Equipment Certificates of Indebtedness, Series 2006A of the City. WITNESS My hand officially as such Administrator and the corporate seal of the City this 2 3 rc}lay of February, 2006. . � i City Administrator Corcoran,Minnesota (SEAL) MNI 274668v3 CR100-10