HomeMy WebLinkAboutResolution 2004-04 - Awarding Sale General Obligation Equipment Certificates RESOLUTION NO. 2004-04
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 February 12, 2004,
commencing at 7:00 o'clock P.M.
The following members were present:
Gageby, Lymangood and Thomas
and the following were absent:
Bucher and Guenthner
* * * * * * * * *
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 $414,000 General Obligation Equipment
Certificates of Indebtedness, Series 2004.
The City Administrator presented the offers of Farmers State Bank, Hamel, Minnesota
and Bankwest, Rockford, Minnesota to purchase the Certificates that had been submitted to the
City pursuant to Council direction.
After due consideration of the proposal, Member Thomas introduced the
following written resolution, the reading of which was dispensed with by unanimous consent,
and moved its adoption:
EMT-242856v1
CR 100-6
RESOLUTION NO. 2004-04
A RESOLUTION AWARDING THE SALE OF $414,000
GENERAL OBLIGATION EQUIPMENT CERTIFICATES
OF INDEBTEDNESS, SERIES 2004;
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(City) as follows:
Section 1. Sale of Certificates.
1.01. It is hereby determined that:
(a) the City is authorized by Minnesota Statutes, Section
412.301 (the Act) to issue its general obligation certificates of
indebtedness (Certificates) on such terms and in such manner as the City
determines to finance the purchase of items of capital equipment
(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, are listed on
Exhibit B, 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 2004 will not exceed 0.25 percent of the market value of
taxable property in the City for the year 2004;
(d) it is necessary and expedient for the City to issue its
Certificates for the purchase of Equipment and related expenses as
follows:
Public works and park vehicles $329,125
Police vehicles,office equipment, and
Other equipment 57,500
Computers, hardware and software 18,000
Total $404,625
EMT-242856v1
CR100-6
(e) it is necessary and expedient to the sound financial
management of the affairs of the City to issue $414,000 General
Obligation Equipment Certificates of Indebtedness, Series 2004 pursuant
to the Act to provide financing for the Equipment.
1.02. The offer of Farmers State Bank, Hamel, Minnesota and Bankwest, Rockford,
Minnesota (Purchasers) to purchase the Certificates is found to be a reasonable offer and is
accepted, the offer being to purchase the Certificates at a price of $414,000 for Certificates
bearing interest as follows:
Year of Interest Year of Interest
Maturity Rate Maturity Rate
August 2, 2004 February 2, 2007
February 2,2005 August 2, 2007
August 2,2005 February 2, 2008
February 2,2006 August 2,2008
August 2,2006 February 2, 2009
True interest cost:
1.03. The City will forthwith issue and sell the Certificates pursuant to Minnesota
Statutes, Chapter 412 (Act) in the total principal amount of$414,000, originally dated as of date
of delivery, 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 and August
1 without option of prior payment in the years and amounts as follows:
Year Amount Year Amount
August 2, 2004 $15,000 February 2,2007 $13,000
February 2,2005 14,000 August 2,2007 81,000
August 2, 2005 14,000 February 2,2008 82,000
February 2,2006 13,000 August 2,2008 84,000
August 2, 2006 14,000 February 2,2009 84,000
Certificates purchased by Farmers State Bank, Hamel, Minnesota, in the total principal
amount of $207,000 are maturing without option of prior redemption in the years, installment
amounts and interest rates as follows:
EMT-242856v1
CR100-6
Year Amount Rate Year Amount Rate
August 2, 2004 $7,500 February 2, 2007 $ 6,500
February 2, 2005 7,000 August 2,2007 40,500
August 2, 2005 7,000 February 2, 2008 41,000
February 2, 2006 6,500 August 2, 2008 42,000
August 2, 2006 7,000 February 2, 2009 42,000
Certificates purchased by Bankwest, Rockford, Minnesota, in the total principal amount
of$207,000 are maturing without option of prior redemption in the years, installment amounts
and interest rates as follows:
Year Amount Rate Year Amount Rate
August 2, 2004 $7,500 February 2,2007 $ 6,500
February 2, 2005 7,000 August 2, 2007 40,500
August 2,2005 7,000 February 2, 2008 41,000
February 2, 2006 6,500 August 2, 2008 42,000
August 2, 2006 7,000 February 2, 2009 42,000
Section 2. Registration and Payment.
2.01. Registered 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.
2.02. Dates; Interest Payment Dates. Each Certificate will he 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 February 2 and August 2 of each
year, commencing August 2, 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.
2.03. Registration. The City appoints the City Administrator as Certificate 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
EMT-242856v1
CR 100-6
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 Registrar
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 are surrendered by the
registered owner for exchange the Registrar 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 attorney 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 Registrar 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.
(f) Persons Deemed Owners. The City and the Registrar may treat the person
in whose name a Certificate is registered in the bond register as the absolute owner 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 Charges. 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
EMT-242856v I
CR 100-6
charges of the Registrar in connection therewith; and, in the case of a Certificate
destroyed, stolen or lost, upon filing with the Registrar 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 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. Certificates 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 Certificate has already matured or been called for
redemption in accordance with its terms it is not necessary to issue a new Certificate prior
to payment.
2.04. Execution, Authentication and Delivery. 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 appears 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 prepared, executed and authenticated,the City Administrator 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.
2.05. 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 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 Certificates the temporary
Certificates will be exchanged therefor and cancelled.
Section 3. Form of Certificate.
3.01. The Certificates will be printed or typewritten in substantially the following form:
No. R-1 UNITED STATES OF AMERICA $207,000
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF CORCORAN
EMT-242856v 1
C R 100-6
GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF
INDEBTEDNESS, SERIES 2004
Date of Original Issue: March 1, 2004
The City of Corcoran, Minnesota, a duly organized and existing municipal corporation in
Hennepin County, Minnesota (City), acknowledges itself to be indebted and for value received
hereby promises to pay to (Farmers State Bank, Hamel, Minnesota) (Bankwest Bank, Rockford,
Minnesota), or registered assigns, the principal sum of $207,000 in the years, installment
amounts and interest rates as follows:
Year Amount Rate Year Amount Rate
August 2,2004 $7,500 February 2, 2007 $ 6,500
February 2, 2005 7,000 August 2,2007 40,500
August 2, 2005 7,000 February 2, 2008 41,000
February 2, 2006 6,500 August 2, 2008 42,000
August 2, 2006 7,000 February 2,2009 42,000
without option of prior payment, with interest thereon from the date hereof at the annual rate
specified above, payable February 2 and August 2 in each year, commencing August 2, 2004, 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 are payable in lawful money of
the United States of America by check or draft by the City Administrator, Corcoran Minnesota,
as Certificate Registrar, Paying Agent and Transfer 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 Certificates of which this Certificate forms a
part as "qualified tax exempt obligations" within the meaning of Section 265(h)(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 issued pursuant to a resolution adopted by the City Council on
February 12, 2004 (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 State
of Minnesota, including Minnesota Statutes, Section 412.301, and the principal hereof and
interest hereon are payable primarily from ad valorem taxes, 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 Certificate and the City
EMT-242856v1
CR100-6
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.
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 Registrar, duly executed by the registered owner or the owner's attorney; 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 tax, fee or
governmental charge required to be paid with respect to such transfer or exchange.
The City and the Certificate Registrar 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 all 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.
IN WITNESS 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 Bond has been registered on
the books of the Registrar in the name of the person last noted below.
EMT-242856v1
CR I00-6
Signature of
Date of Registration Registered Owner City Administrator
(Farmers State Bank Bank, Farmers State Bank, Minnesota)
(Bankwest Bank, Rockford, Minnesota)
Federal ID ## _
3.02. The City Administrator is authorized and directed to obtain a copy of the
proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota,
which will be complete except as to dating thereof and to cause the opinion to be printed on or
accompany on each Certificate.
Section 4. Payment; Security; Pledges and Covenants.
4.01. The Certificates are payable from the General Obligation Equipment Certificates
of Indebtedness, Series 2004 Debt Service Fund (Debt Service Fund) hereby created, and the
proceeds of the ad valorem taxes hereinafter levied described in Section 1.01 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 Purchaser, and (iii) the accrued interest paid by the Purchaser upon
closing and delivery of the Certificates.
4.02. 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 taxable property in the City,
which will be spread upon the tax rolls and collected with and as part of other general taxes 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):
Year Levy
(See Attachment A)
4.03. 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 irrepealable 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
EMT-242856v1
CR 100-6
year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible
during such year by the amount so certified.
4.04. 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 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 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, 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 Certificates, and such instruments,
including any heretofore furnished, will be deemed representations of the City as to the facts
stated therein.
5.02. 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 Purchaser has
made its own investigations concerning the City as set forth in an investment letter of even date,
receipt of which is hereby acknowledged.
Section 6. Tax Covenant.
6.01. The City covenants and agrees with the holders from time to time of the
Certificates that it will not take or permit to he taken by any of its officers, employees or agents
any action which would cause the interest on the Certificates 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 Certificates.
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 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 2004) 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
EMT-242856v1
CR100-6
entities of the City) during the calendar year in which the Certificates 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.
6.03. 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. 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 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 2004 will not exceed
$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during
calendar year 2004 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. Continuing Disclosure.
7.01. The Purchasers 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.
EMT-242856v1
1
CR100-6
The motion for the adoption of the foregoing resolution was duly seconded by Member
Gageby and upon vote being taken thereon, the following voted in favor
thereof:
Gageby, Thomas and Lymangood
and the following voted against the same:
whereupon the resolution was declared duly passed and adopted.
EMT-242856v1
CR100-6
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 regular meeting of the City Council of the City
held on February 12, 2004 with the original minutes on file in my office and the extract is a lull,
true and correct copy of the minutes insofar as they relate to the issuance and sale of$414,000
General Obligation Equipment Certificates of Indebtedness, Series 2004 of the City.
WITNESS My hand officially as such Administrator and the corporate seal of the City
this 12th day of February, 2004.
■111■4I �L
Ci Administrator i
Corcoran, Minnesota
(SEAL)
EMT-242856v1
CR 100-6