HomeMy WebLinkAboutResolution 2001-76 - Authorizing General Obligation Equipment Certificates 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, November 29, 2001,
commencing at 7:00 o'clock P.M.
The following members were present: Mayor Guenthner, and Council members Gmach,
Bucher, Gageby, and Thomas
and the following were absent: None
* * * * * * * * *
The Mayor announced that the next order of business was consideration of a proposal for the
purchase of the City's $602,000 General Obligation Equipment Certificates of Indebtedness of
2001.
The City Administrator presented the offers of Farmers State Bank of Hamel, Hamel,
Minnesota and BANKWEST, Rockford, Minnesota to jointly purchase the Certificates that had
been submitted to the City pursuant to Council direction.
After due consideration of the proposal, Member Thomas then introduced the following
written resolution, the reading of which was dispensed with by unanimous consent, and moved its
adoption:
In accordance with the official Terms of Proposal the following adjustments were made:
Principal Amount:
Maturities:
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RESOLUTION NO. 0700/• 7('
A RESOLUTION AWARDING THE SALE OF $602,000
GENERAL OBLIGATION EQUIPMENT CERTIFICATES
OF INDEBTEDNESS OF 2001;
FIXING ITS FORM AND SPECIFICATIONS;
DIRECTING ITS EXECUTION AND DELIVERY;
AND PROVIDING FOR ITS 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 410.32 (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 Equipment for the police, technology and
parks and public works departments, the estimated cost of which is
$602,000;
(c) as required by the Act,
(i) the expected useful life of the 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 2001 will
not exceed 0.25 percent of the market value of taxable property in the
City for the year 2000;
(d) it is necessary and expedient for the City to issue its Certificates for the
purchase of the Equipment and related expenses as follows:
Equipment Cost $591,800
Issuance Costs 10,200
Total $602,000
(d) it is necessary and expedient to the sound financial management of the
affairs of the City to issue a $602,000 General Obligation Equipment
Certificates of Indebtedness of 2001 pursuant to the Act to provide financing
for the Equipment.
1.02. The offer of Farmers State Bank of Hamel, Hamel, Minnesota, and BANKWEST,
Rockford Minnesota (Purchasers) to jointly purchase a $602,000 General Obligation Equipment
Certificates of Indebtedness of 2001 (Certificates) of the City are determined to be reasonable offers
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and are accepted, the offer being to purchase the Certificates at a price of par for the Certificates
bearing interest as follows:
Year Interest Rate
2002 2.85%
2003 3.20
2004 3.60
2005 3.85
2006 4.10
1.03. The City will forthwith issue and sell the Certificates pursuant to Minnesota Statutes,
section 410.32 (Act) in the total principal amount of$602,000, originally dated December 1, 2001
in the denomination of$5,000, and maturing on December 1 without option of prior redemption in
the years and amounts as follows:
Year Amount
2002 $112,000
2003 116,000
2004 120,000
2005 124,000
2006 130,000
Bonds purchased by Farmers State Bank of Hamel, Hamel, Minnesota, in the total principal
amount of $301,000 are maturing without option of prior redemption in the years, amounts and
interest rates as follows:
Year Amount Interest Rate
2002 $56,000 2.85%
2003 58,000 3.20
2004 60,000 3.60
2005 62,000 3.85
2006 65,000 4.10
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Bonds purchased by BANKWEST, Rockford, Minnesota, in the total principal amount of
$301,000 are maturing without option of prior redemption in the years, amounts and interest rates as
follows:
Year Amount Interest Rate
2002 $56,000 2.85%
2003 58,000 3.20
2004 60,000 3.60
2005 62,000 3.85
2006 65,000 4.10
Section 2. Registration and Payment.
2.01. Registered Form. The Certificates will be issued in fully registered form. The
interest thereon and the principal amount thereof, is payable by check or draft issued by the
Registrar described herein.
2.02. Dates; Interest Payment Dates. The Certificates will be dated as of the last interest
payment date preceding the date of authentication to which interest on the Certificates 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 Certificates 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 Certificates 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
December 1, 2002, 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 hereby 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
certificate register in which the Registrar provides for the registration of ownership of the
Certificates and the registration of transfers and exchanges entitled to be registered,
transferred or exchanged.
(b) Transfer of Certificates. Upon surrender for transfer of the Certificates 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
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the fifteenth day of the month preceding each interest payment date and until that interest
payment date.
(c) Exchange of Certificates. When the 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. The 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 Certificates are presented to the
Registrar for transfer, the Registrar may refuse to transfer the Certificates until the Registrar
is satisfied that the endorsement on the Certificates 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 Certificates are registered in the bond register as the absolute owner of the
Certificates, whether the Certificates are overdue or not, for the purpose of receiving
payment of, or on account of, the principal of and interest on the Certificates 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 Certificates 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 the 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 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
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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 and Delivery. The Certificates will be prepared under the direction of the
City Administrator and will be executed on behalf of the City by the manual signatures of the
Mayor and the City Administrator. In case any officer whose signature or a facsimile of whose
signature appears on the Certificates will cease to be such officer before the delivery of the
Certificates, such signature will nevertheless be valid and sufficient for all purposes, the same as if
the officer had remained in office until delivery. When the Certificates have been so prepared and
executed the City Administrator will deliver the same to the Purchaser thereof upon payment of the
purchase price and the Purchaser will not be obligated to see to the application of the purchase price.
Section 3. Form of Certificates.
3.01. The Certificates will be printed or typewritten in substantially the following form:
[Face of the Certificate]
No. R-1 UNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF CORCORAN
GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF
INDEBTEDNESS OF 2001
Date of
Rate Maturity Original Issue
December 1, 20_ December 1, 2001
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 , , Minnesota, or registered
assigns, the principal sum of$ on the maturity date specified above, without option of
prior payment, with interest thereon from the date hereof at the annual rate specified above, payable
on June 1 and December 1, commencing December 1, 2002, to the person in whose name this Bond
is registered at the close of business on the fifteenth day day (whether or not a business day) of the
immediately preceding month. 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.
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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(bX3) 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 November
29, 2001 (the Resolution), for the purpose of providing money to defray expenses incurred or to be
incurred in purchasing an item of capital equipment, pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 410.32 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 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 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 or statutory
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.
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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 Certificate has been registered
on the books of the Registrar in the name of the person last noted below.
Signature of
Date of Registration Registered Owner City Administrator
, Minnesota
Federal ID#41-
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 the
Certificates.
Section 4. Payment; Security; Pledges and Covenants.
4.01. The Certificates are payable from the General Obligation Equipment Certificates of
Indebtedness of 2001 Debt Service Fund (Debt Service Fund) hereby created, and the proceeds of
the ad valorem taxes 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 capitalized interest financed from Certificate proceeds.
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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
2001 $133,328.00
2002 134,136.00
2003 134,424.00
2004 134,104.00
2005 135,330.00
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 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 Taxpayer
Services Division Manager of Hennepin County 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 of Hennepin County 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.
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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 be 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 Certificate (together with other
obligations reasonably expected to be issued in calendar year 2001) exceed the small-issuer
exception amount of$5,000,000.
(b) For purposes of qualifying for the small issuer exception to the federal arbitrage
rebate requirements, the City finds, determines and declares that the aggregate face amount of all
tax-exempt bonds(other than private activity bonds) issued by the City (and all subordinate entities
of the City)during the calendar year in which the 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)(4XC) 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 2001 will not exceed
$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar
year 2001 have been designated for purposes of Section 265(b)(3) of the Code.
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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.
The motion for the adoption of the foregoing resolution was duly seconded by Member
Bucher, and upon vote being taken thereon,the following voted in favor thereof:
Guenthner, Gmach, Bucher, Gageby, and Thomas
and the following voted against the same: None
whereupon the resolution was declared duly passed and adopted.
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STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN ) SS.
)
CITY OF CORCORAN )
I, the undersigned, being the duly qualified and acting Clerk 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 November
29, 2001 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 $602,000 General Obligation
Equipment Certificates of Indebtedness of 2001 of the City.
WITNESS My hand officially as such City Clerk and the corporate seal of the City this 29th
day of November, 2001.
1y rk
Corcoran, Minnesota
(SEAL)
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