2020-028 A Resolution Awarding the Sale of General Obligation Bonds, Series 2020A, in the original Aggregate Principal Amount of $8,585,000; Fixing Their Form and Specifications; Directing Their Execution and Delivery; and Providing for Their Payment RESOLUTION NO. 2020-028
A RESOLUTION AWARDING THE SALE OF GENERAL
OBLIGATION BONDS, SERIES 2020A, IN THE ORIGINAL
AGGREGATE PRINCIPAL AMOUNT OF $8,585,000; FIXING
THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR
EXECUTION AND DELIVERY; AND PROVIDINC FOR THEIR
PAYMENT
BE IT RESOLVED By the City Council (the "City Council") of the City of Hopkins, Hennepin
County, Minnesota(the"City") as follows:
Section 1. Sale of Bonds.
1.01. Equipment Certificates.
(a) Pursuant to Minnesota Statutes, Chapter 475, as amended, and Minnesota
Statutes, Sections 410.32 and 412.301, as amended (the "Capital Equipment Act"), the City is
authorized to issue its general obligation equipment certificates of indebtedness on such tenns
and in such manner as the City determines to finance the purchase of items of capital equipment
(the"Equipment"), subject to certain limitations contained in the Capital Equipment Act.
(b) The City has purchased and acquired or will purchase and acquire the Equipment
described in EXHIBIT B attached hereto, or other items of capital equipment authorized under
the Capital Equipment Act, pursuant to the Capital Equipment Act.
(c) It is necessary and expedient to the sound financial management of the affairs of
the City to issue general obligations in the aggregate principal amount of $225,000 (the
"Equipment Certificates"), pursuant to the Capital Equipment Act, to provide financing for the
acquisition of the Equipment.
(d) As required by the Capital Equipment Act:
(i) the expected useful life of the Equipment is or will be at least as long as
the term of the Equipment Certificates; and
(ii) the principal amount of the Equipment Certificates to be issued in the
year 2020 will not exceed one-quarter of one percent (0.25%) of the estimated market
value of taxable property in the City for the year 2020.
1.02. Im�rovement Bonds.
(a) Certain assessable public improvements within the City, including but not limited
to bituminous street removal and reconstruction and turf restoration street reconstruction (the
"Assessable Improvements"), which are part of the City's 2020-2021 Street and Utility
Improvements (the"Improvement Project"),have been made, duly ordered or contracts let for the
construction thereof pursuant to the provisions of Minnesota Statutes, Chapters 429 and 475, as
atnended(the"Improvement Act").
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(b) It is necessary and expedient to the sound financial management of the affairs of
the City to issue general obligations in the aggregate principal amount of $2,305,000 (the
"Improvement Bonds"), pursuant to the Improvement Act, to provide financing for the
Assessable Improvements.
(c) The City issued its General Obligation Bonds, Series 2019A (the "Series 2019A
Bonds"), on April 30, 2019 in the amount of$12,185,000. The City has excess bond proceeds in
the amount of $461,000 from the sale of the Series 2019A Bonds. Pursuant to Minnesota
Statutes, Section 475.65, the City Council may pledge the excess bond proceeds to another
project that is eligible to be financed with bonds. The City Council hereby approves the use of
the excess proceeds of the Series 2019A Bonds in the amount of $461,000 to finance the
Assessable Improvements.
1.03. Utilitv Revenue Bonds.
(a) The City engineer has recommended the construction of various improvements to
the City's sanitary sewer, water, and storm sewer systems (the "Utility Improvements") as part of
the Improvement Project.
(b) It is necessary and expedient to the sound financial management of the affairs of
the City to issue general obligations in the aggregate principal amount of$5,580,000 (the "Utility
Revenue Bonds"), pursuant to Minnesota Statutes, Chapters 444 and 475, as amended (the
"Utility Revenue Act"), to provide financing for the Utility Improvements.
1.04. Abatement Bonds.
(a) The City is authorized by Minnesota Statutes, Chapter 475, as amended, and
Minnesota Statutes, Sections 469.1812 through 469.1815, as amended (the "Abatement Act"), to
grant a property tax abatement on speci�ed parcels in order to accomplish certain public
purposes, including the acquisition or improvement of public infrastructure and the provision of
access to improved roadways and trails for residents of the City.
(b) Pursuant to a resolution adopted by the City Council on April 21, 2020 (the
"Abatement Resolution") following a duly noticed public hearing, the City Council approved a
property tax abatement (the "Abatements") in the maximum amount of $1,500,000 for certain
property in the City (the "Abatement Parcel") over a period of fifteen (15) years, in an amount
sufficient to pay the principal amount of and all or a portion of the interest on one or more series
of bonds to be issued to finance certain public infrastructure improvements, including mill and
overlay on 1" Street North, North Central Business District Avenues, Meaetzold Field Lot, and
the Knollwood Neighborhood, the construction of trails within the City, and other similar projects
(collectively,the"Abatement Project").
(c) 1n the Abatement Resolution, the City found and detennined that the Abatement
Project benefits the Abatement Parcel and that the maximum principal amount of bonds to be
secured by Abatements does not exceed the estimated sum of Abatements from the Abatement
Parcel for the term authorized under the Abatement Resolution.
(d) It is necessary and expedient to the sound financial management of the affairs of
the City to issue genera] obligation abatement bonds in the original aggregate principal amount of
$475,000 (the "Abatement Bonds"), pursuant to the Abatement Act, to provide financing for the
Abatement Project.
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1.05. Issuance of General Obligation Bonds.
(a) The City Council finds it necessary and expedient to the sound financial
management of the affairs of the City to issue its General Obligation Bonds, Series 2020A (the
"Bonds"), in the original aggregate principal amount of $8,585,000, pursuant to the Capital
Equipment Act, the Improvement Act, the Utility Revenue Act, and the Abatement Act
(collectively, the "Act"), to provide financing for the Equipment, the Assessable Improvements,
the Utility Improvements, and the Abatement Project.
(b) The City is authorized by Section 475.60, subdivision 2(9)of the Act to negotiate
the sale of the Bonds, it being determined that the City has retained an independent municipal
advisor in connection with such sale. The actions of the City staff and municipal advisor in
negotiating the sale of the Bonds are ratified and confirmed in all aspects.
1.06. Award to the Purchaser and Interest Rates. The proposal of (the
"Purchaser") to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby
accepted, the proposal being to purchase the Bonds at a price of$8,585,000 (par amount of�
[plus original issue premium of $ ,] [less original issue discount of $ ,] less an
underwriter's discount of$ ),plus accrued interest, if any, to date of delivery for Bonds bearing
interest as follows:
Year Interest Rate Year Interest Rate
2023 % 2030 %
2024 2031
2025 2032
2026 2033
2p2� 2034
2p2g 2035
2029 2036
True interest cost: %
1.07. Purchase Contract. The sum of$ ,being the amount proposed by the Purchaser
in excess of$8,499,150, shall be credited to the accounts in the Debt Servicc Fund hereinafter created or
deposited in thc accounts of the Project Fund hereinafter creatcd, as determined by thc Finance Director of
the City in consultation with the City's municipal advisor. The Finance Director 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 Manager are directed to execute a contract with the
Purchaser on behalf of the City.
1.08. Tcrms and Princ�al Amounts of the Bonds. The City will forthwith issue and sell the
Bonds pursuant to the Act, in the original aggregate principal amount of $8,585,000, originally dated
June 10,2020, 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 in the years and amounts as
follows:
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Year Amount Year Amount
2023 $ 2030 $
2024 2031
2025 2032
2026 2033
2�2� 2034
2�2g 2035
2029 2036
(a) $225,000 of the Bonds, constituting the Equipment Certificates, maturing on
February 1 of the years and in the amounts set forth below, will be used to finance the acquisition of
the Equipment:
Year Amount Year Amount
2023 $ 2027 $
2024 2028
2025 2029
2026 2030
(b) $2,305,000 of the Bonds, constituting the Improvement Bonds, maturing on
February 1 of the years and in the amounts set forth below,will be used to finance the construction of
the Assessable Improvements:
Year Amount Year Amount
2023 $ 2030 $
2024 2031
2025 2032
2026 2033
2027 2034
2�2g 2035
2029 2036
(c) $5,580,000 of the Bonds, constituting the Utility Revenue Bonds, maturing on
February 1 of the years and in the amounts set forth below,will be used to finance the construction of
the Utility Improvements:
Year Amount Year Amount
2023 $ 2030 $
2024 2031
2025 2032
2026 2033
202� 2034
2�2g 2035
2029 2036
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(d) The remainder of the Bonds in the principal amount of$475,000, constituting the
Abatement Bonds, maturing on February 1 of the years and in the amounts set forth bclow, will be
used to finance the construction of the Abatement Project:
Year Amount Year Amount
2023 $ 2030 $
2024 2031
2025 2032
2026 2033
2p2� 2034
2p2g 2035
2029 2036
1.09. Optional Redemption. The City may elect on February ],2029, and on any day thereafter to
prepay Bonds due on or after February l,2030. Redemption may be in whole or in part and if in part, at the
option of the City and in such manner as the City will detennine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC (as defined in Section 7 hereo fl of the particular 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 participant 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.
[TO BE COMPLETED iF TERM BONDS ARE REQUESTED: 1.10. Mandatory Redemption;
Tenn Bonds. The Bonds maturing on February 1, 20_and February 1, 20_shall hereinafter be referred to
collectively as the "Tern� Bonds." The principal amount of the Term Bonds subject to mandatory sinking
fund redemption on any date may be reduced through earlier optional redemptions, with any partial
redemptions of the Term Bonds credited against future mandatory sinking fund redemptions of such Term
Bonds in such order as the City shall determine. The Term Bonds are subject to mandatory sinking fund
redemption and shall be redeemed in part at par plus accrued interest on Febniary 1 of the following years
and in the principal amounts as follows:]
Sinking Fund Installment Date
Februarv 1 20 Term Bond Principal Amount
. $
* Maturity
Fcbruarv 1 20 Term Bond Principal Amount
, $
* Maturity
Section 2. Re�istration and Pavment.
2.01. Re�Tistered Form. The Bonds will be issued only in fully registered forn1. The interest
thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued
by the Registrar described herein.
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2.02. Dates; Interest Pavment 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 becn paid or
made available for payment, in which case the Bond will be dated as of the date of authentication, or(ii) the
date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the
date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year,
commencing February 1, 2021, 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 such 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) Re ister. The Registrar must keep at its principal corporate trust office a bond
register in which the Registrar provides for the registration of ownership of Bonds and the
registration of transfers and exchanges of Bonds entitled to be registered,transferred or exchanged.
(b) Transfer of Bonds. Upon surrender far transfer of a Bond duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to
the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the
registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity,
as requested by the transferor. The Registrar may, however, close the books for registration of any
transfer after the fifteenth day of the month preceding each interest payment date and until that
interest payment date.
(c) Exchan�e of Bonds. When Bonds are surrendered by the registered owner for
excllange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate
principal amount and maturity as requested by the registered owner or the owner's attorney in
writing.
(d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly
cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for
transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the
endorsernent on the Bond or separate instrument of transfer is valid and genuine and that the
requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good
faith,to make transfers which it, in its judgment,deems improper or unauthorized.
(fl Persons Deemed Owners. The City and the Registrar may treat the person in whose
name a Bond is registered in the bond register as thc absolute owner of the Bond, whether the Bond
is ovcrdue or not, for the purpose of receiving payment of, or on account of, the principal of and
interest on the Bond and for all other purposes, and payments so made to a registered owner or upon
the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to
the extent of the sum or sums so paid.
(g) TaYes. Fees and Char es. 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.
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(h) Mutilated Lost Stolen or Destroved Bonds. If a Bond becomes �nutilated or is
destroyed,stolen or lost,the Registrar will deliver a new Bond of like amount,number,maturity date
and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of
and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable
expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed,
stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was
destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an
appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by
law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to
the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to
the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for
redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment.
(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 any registered owner,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 redeinption date,provided that
the funds for the redemption are on deposit with the place of payment at that time.
2.04. Ap.pointment of Initial Re ig s,_ trar. Thc City appoints Bond Trust Serviccs Corporation,
Roseville,Minnesota,as the initial Registrar. The Mayor and the City Manager 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
re►nove the Registrar upon thirty (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 the City Council, the Finance Director must transmit to the Registrar
moneys sufficient for the payment of all principal and interest then due.
2.05. Execution Authentication and Deliverv. The Bonds will be prepared under the direction of
the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager,
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 Manager 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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Section 3. Form of Bond.
3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially thc fonn
set forth in EXHIBIT C.
3.02. Approvin�=Le a�Opinion. The City Manager is authorized and directed to obtain a copy
of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, and
cause the opinion to be printed on or accompany each Bond.
Section 4. Pavment; Security• Pledges and Covenants.
4.O1. Debt Service Fund. The Bonds wil] be payable from the Genera] Obligation Bonds,
Series 2020A Debt Service Fund(the "Debt Service Fund") hereby created. The Debt Service Fund shall be
administered and maintained by the Finance Director as a bookkeeping account separate and apart from all
other funds maintained in the official financial records of the City. The City will maintain the following
accounts in the Debt Service Fund: the"Equipment Account,"the"Assessable Improvements Account,"the
"Utility Improvements Account," and the "Abatement Project Account." Amounts in the Equipment
Account are irrevocably pledged to the Equipment Certificates, amounts in the Assessable Improvements
Account are irrevocably pledged to the Improvement Bonds, amounts in the Utility Improvements Account
are irrevocably pledged to the Utility Revenue Bonds, and amounts in the Abatement Project Account are
irrevocably pledged to the Abatement Bonds.
(a) E uipment Account. Ad valorem taxes hereinafter levied are hereby pledged to the
Equipment Account of the Debt Service Fund. There is also appropriated to the Equipment Account
a pro rata portion of(i)capitalized interest financed from the proceeds of the Bonds, if any; and
(ii)amounts over the minimum purchase price paid by the Purchaser, to the extent designated for
deposit in the Debt Service Fund in accordance with Section 1.07 hereof.
(b) Assessable Improvements Account. Ad valorem taxes hereinafter levied for the
Assessable Improvement and special assessments levied against properiy specially benefited by the
Assessable lmprovements (the "Assessments") are hereby pledged to the Assessable Improvements
Account of the Debt Service Fund. There is also appropriated to the Assessable Improvements
Account a pro rata portion of(i)capitalized interest financed from the proceeds of the Bonds, if any;
and(ii)amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent
designated for deposit in the Debt Service Fund in accordance with Section 1.07 hereof.
(c) Utilitv Improvements Account. The City will continue to maintain and operate its
Sanitary Sewer Fund, Water Fund, and Storm Sewer Fund, to which will be credited all gross
revenues of the sanitary sewer system, the water system, and the storm sewer system, respectively,
and out of which will be paid all nonnal and reasonable expenses of current operations of such
systems. Any balances therein are deemed net revenues (the "Net Revenues") and will be
transferred, from time to time,to the Utility Improvements Account of the Debt Service Fund, which
Utility Improvements Account will be used only to pay principal of and interest on the Utility
Revenue Bonds and any other bonds similarly authorized. There will always be retained in the
Utility Improvements Account a sufficient amount to pay principal of and interest on all the
Utility Revenue Bonds, and the Finance Director must report any current or anticipated
deficiency in the Utility Improvemer�ts Account to the City Council. There is also appropriated to
the Utility Improvements Account a pro rata portion of (i)capitalized interest financed from the
proceeds of the Bonds, if any; and (ii)amounts over the minimum purchase price of the Bonds paid
by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with
Section 1.07 hereof.
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(d) Abatement Project Account. The Finance Director shall timely deposit in the
Abatement Project Account of the Debt Service Fund the Abatements from the Abatement Parcel
and proceeds of ad valorem taxes hereinafter levied for the Abatement Project are hereby pledged to
the Abatement Project Account. There is also appropriated to the Abatement Project Account a pro
rata portion of (i)capitalized interest financed from the proceeds of the Bonds, if any; and
(ii)amounts over the minimum purchase price paid by the Purchaser, to the extent designated for
deposit in the Debt Service Fund in accordance with Section 1.07 hereof.
4.02. Project Fund. The City hereby creates the General Obligation Bonds, Series 2020A Project
Fund (the "Project Fund"). The City will maintain the following accounts in the Project Fund: the
"Equipment Account," the "Assessable Improvements Account," the "Utility Improvements Account," and
the "Abatement Project Account." Amounts in the Equipment Account are irrcvocably pledged to the
Equipment Certificates, amounts in the Assessable Improvements Account are itrevocably pledged to the
Improvement Bonds, amounts in the Utility Improvements Account are irrevocably pledged to the Utility
Revenue Bonds, and amounts in the Abatement Project Account are irrevocably pledged to the Abatement
Bonds.
(a) Equipment Account. Proceeds of the Equipment Certificates, less the
appropriations inade in Section 4.01(a) hereof, together with any other funds appropriated for the
purchase of the Equipment, will be deposited in the Equipment Account of the Project Fund to be
used solely to defray the costs of acquiring the Equipment. When the Equipment has been acquired
and the cost thereof paid, the Equipment Account of the Project Fund is to be closed and any funds
remaining may be deposited in the Equipment Account of the Debt Service Fund.
(b) Assessable Improvements Account. Proceeds of the Iinprovcment Bonds, less the
appropriations made in Section 4.01(b) hereof, together with ad valorem taxes and the Assessments
and any other funds appropriated for the Assessable Improvements collected during the construction
of the Assessable I�nprovements, will be deposited in the Assessable Improvements Account of the
Project Fund to be used solely to defray cxpenses of the Assessablc Improvements and the paymcnt
of principal of and interest on the Improvement Bonds prior to the completion and payment of all
costs of the Assessable Improvements. Any balance remaining in the Assessable Improvements
Account after completion of the Assessable Improvements may be used to pay the cost in whole or in
part of any other improvement instituted under the Improvement Act, under the direction of the City
Council. When the Assessable Improvements are completed and the cost thereof paid, the
Assessable Improvements Account of the Project Fund is to be closed and any subsequent collections
of Assessments and ad valorem taxes for the Assessable Improvements are to be deposited in the
Assessable Improvements Account of the Debt Service Fund.
(c) Utilitv Improvements Account. Proceeds of thc Utility Revenuc Bonds, less the
appropriations made in Section 4.01(c) hereof, will be deposited in the Utility Improvements
Account of the Project Fund to be used solely to defray expenses of the Utility Improvements. When
the Utility Improvements are completed and the cost thereof paid, the Utility Improve�nents Account
of the Project Fund is to be closed and any funds remaining may be deposited in the Utility
Improvements Account of the Debt Service Fund.
(d) Abatement Project Account. Proceeds of the Abatement Bonds, less the
appropriations made in Section 4.O1(d) hereof, together with any other funds appropriated for the
Abatement Project collected during the construction of the Abatement Project, will be deposited in
the Abatement Project Account of the Project Fund to be used solely to defray expenses of the
Abatement Project described herein and in the Abatement Resolution, and the payment of principal
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of the Abatement Bonds prior to the completion and payment of all costs of the Abatement Project to
be financed with the proceeds of the Abatement Bonds. When the Abatement Project is completed
and the cost thereof paid,the Abatement Project Account of the Project Fund is to be closed and any
funds remaining may be deposited in the Abatement Project Account of the Debt Service Fund.
4.03. Citv Covenants with Respect to the Improvement Bonds. It is hereby determined that thc
Assessable Improvements will directly and indirectly benefit abutting property, and the City hereby
covenants with the holders from time to time of the Bonds as follows:
(a) The City will cause the Assessments for the Assessable Improvements to be
promptly levied so that the first installment of the Assessable Improvements will be collectible
not later than 2022 and will take all steps necessary to assure prompt collection, and the levy of
the Assessments is hereby authorized. The City Council will cause to be taken with due diligence
all further actions that are required for the construction of each Assessable Improvement financed
wholly or partly from the proceeds of the Improvement Bonds, and will take all further actions
necessary for the final and valid levy of the Assessments and the appropriation of any other funds
needed to pay the Improvement Bonds and interest thereon when due.
(b) In the event of any current or anticipated deficiency in Assessments and ad
valorem taxes, the City Council will lcvy additional ad valorem taxes in the ainount of the current
or anticipated deficiency.
(c) The City will keep complete and accurate books and records showing receipts
and disbursements in connection with the Assessable Improvements, Assessments, and ad
valorem taxes levied therefor and other funds appropriated for their payment, collections thereof
and disbursements therefrom, monies on hand, and the balance of unpaid Assessments.
(d) The City will cause its books and records to be audited at least annually and will
furnish copies of such audit reports to any interested person upon request.
(e) At least twenty percent (20%) of the cost to the City of the Assessable
Improvements described herein will be specially assessed against benefited propertres.
4.04. City Covenants with Respect to the Utility Revenue Bonds. 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 Gity will continue to maintain and efficiently operate the sanitary sewer
system,the water system,and the storm sewer system as public utilities and conveniences free from
competition of other likc municipal utilities and will cause all revenues therefrom to be depositcd
in bank accounts and credited to the Sanitary Sewer Fund, the Water Fund, and the Storm Sewer
Fund, respectively, 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 Utility lmprovements Account of the Debt
Service Fund as a separate account and will cause money to be credited thereto from time to time,
out of Net Revenues from the sanitary sewer system, the water system, and the storm sewer system
in sums sufficient to pay principal of and interest on the Utility Revenue Bonds when due.
(c) The City will keep and maintain proper and adequate books of records and
accounts separate from all other records of the City in which will be complete and correct entries
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as to all transactions relating to the sanitary sewer system, the water system, and the storm sewer
system and which will be open to inspection and copying by any Bondholder, or the Bondholder's
agcnt or attorney, at any reasonable time, and it will furnish certified transcripts therefrom upon
request and upon 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 report will be
furnished to all Bondholders upon request.
(d) The City Council will cause persons handling revenues of the sanitary sewer
system, the water system, and the storm sewer 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 such system to be deposited in a bank whose deposits are guaranteed under the
Federal Deposit Insurance Law.
(e) The City Council will keep the sanitary sewer system, the water system, and the
storm sewer system insured at all ti�nes 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.
(fl The City and each and all of its officers will punctually perform all duties with
reference to the sanitary sewer systein,the water system,and the storm sewer system as required by
law.
(g) The City will impose and collect charges of the nature authorized by
Section 444.075 of the Utility Revenue Act, at the times and in the amounts required to produce
Net Revenues adequate to pay all principal and interest when due on the Utility Revenue Bonds
and to create and maintain such reserves securing said payments as may be provided herein.
(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.
4.05. General Obligation Pled�e. For the prompt and full payment of the principal of and interest
on the Bonds, as the same respectively become due,the full faith,credit and taxing powers of the City will be
and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient to pay all
principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be
promptly paid out of monies in the general fund of the City which are available for such purpose, and such
general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient
balance is available therein.
4.06. Pledgc of Tax Levv. For the purpose of paying all or a portion of the principal of and
interest on the Equipment Certificates, the Improvement Bonds, and the Abatement Bonds, there is levied
a direct annual irrepealable ad valorem tax (the "Taxes") upon a11 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.
The Taxes will be credited to the Equipment Account, the Assessable Improvements Account, and the
Abatement Project Account of the Debt Service Fund above provided and will be in the years and
amounts as set forth in EXHIBIT D attached hereto.
4.07. Certification to Taxpaver Services Division Mana�er as to Debt Service Fund Amount. It
is hereby determined that the estimated collections of Taxes, Assessments, Net Revenues, and
Abatements will produce at least five percent (5%) in excess of the amount needed to meet when due the
principal and interest payments on the Bonds. The tax levy herein provided is irrepealable until all of the
12
Bonds are paid, provided that at the time the City makes its annual tax levies the Finance Director may
certify to thc Taxpayer Services Division Manager of Hennepin County, Minnesota (the "Taxpayer
Services Division Manager") the amount available in the Debt Scrvicc Fund to pay principal and interest
due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy
collectible during such year by the amount so certified.
4.08. Registration of Resolution. The City Manager 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 Section 475.63 of the Act.
Section 5. Authentication of Transcript.
5.01. City Proceedin�s and Records. The officcrs of the City are authorized and directed to
prepare and furnish to the Purchaser and to the attorneys approving the Bonds certified copies of proceedings
and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such
other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as
shown by the books and records in their custody and under their control, relating to the validity 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. Certification as to Official Statement. The Mayor, the City Manager, and the Finance
Dircctor are authorized and directed to certify that they have examined the Official Statement prepared and
circulated in connection with the issuance and salc of the Bonds and that to the best of their knowlcdge and
belief the Official Statement is a complete and accurate representation of the facts and representations rnade
therein as of the date of the Official Statement.
5.03. Other Certificates. The Mayor, the City Manager, and the Finance Director are hereby
authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a
condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or
the organization of the City or incumbency of its officers, at the closing the Mayor, the City Manager, and
the Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of
material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for
and delivery of the Bonds.
5.04. Electronic Si natures. The electronic signature of the Mayor, the City Manager, the City
Clerk, and/or the Finance Director to this resolution and to any ceriificate authorized to be executed
hereunder shall be as valid as an original signature of such party and shall be effective to bind the City
thereto. For purposes hereof, (i) "electronic signature" means a manually signed original signature that is
then transmitted by eleetronic means; and(ii) "transmitted by electronic means"means sent in the form of
a facsimile or sent via the internet as a portable document format ("pdf') or other replicating image
attached to an electronic mail or internet message.
5.05. Payinent of Costs of Issuance. The City authorizes the Purchaser to forward the amount
of Bond proceeds allocable to the payment of issuance expenses to Old National Bank, Chaska,
Minnesota on the closing date for further distribution as directed by the City's municipal advisor, Ehlers
and Associates, Inc.
Section 6. Tax Covenant.
6.01. Tax-Exempt Bonds. 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
13
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.
6A2. Rebate. 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.
6.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the
Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be
"private activity bonds"within the meaning of Sections 103 and 141 through 150 of the Code.
6.04. Qualified Tax-Exempt Obli atg ions. 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 2020 will not exceed$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar year
2020 have been designated for purposes of Section 265(b)(3)of the Code.
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.
6.06. Reimbursement. The City has or may have incurred certain expenditures with respect to the
Equipment, the Assessable Improvements, the Utility Improvements, and the Abatement Project that were
financed temporarily from other sources but are expected to be reimbursed with proceeds of the Bonds. The
City hereby declares its intent to reimburse certain costs of the Equipment,the Assessable Improvements,the
Utility Improvements, and the Abatement Project from proceeds of the Bonds (the "Declaration"). This
Declaration is intended to constitute a declaration of official intent for purposes of the Section 1.150-2 of
the Treasury Regulations promulgated under the Code.
Section 7. Book-Entrv Svstem• Limited Obligation of City.
7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or
printed fully registered Bond for each of the maturities set forth in Section 1.08 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
14
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. Participants. 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 from time to time for
which DTC holds Bonds as securities depository (the"Participants") or to any other person on behalf of
which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation
with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any
ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a
registered owner of Bonds, as 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,preinium and interest with respect to such Bond,
for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying
Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the
respective registered owners, as shown in the registration books kept by the 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 Manager
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
Manager 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
Issucr Letter of Representations (the"Representation Letter") which will govern payment of principal of,
premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or
Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary
for all representations of tlie 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-Entr,�ystem. In the event the City, by resolution of the City
Council, determines that it is in the bcst interests of the persons having beneficial interests in the Bonds that
they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the
Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer
and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the
provisions of this resolution. DTC may determine to discontinue providing its services with respect to the
Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under
applicable law. In such event, if no successor securities depository is appointed, the City will issue and the
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.
7.05. Pavments 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 Arrangements, as set forth in
the Representation Letter.
15
Section 8. Continuin�Disclosure.
8.01. Execution of Continuin� Disclosure Certificate. "Continuing Disclosure Certificate"
means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the
date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to
timc in accordance with the terms thereof.
8.02. City Compliance with Provisions of Continuing Disclosure Certificate. 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.
Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as
provided in this section,all pledges, covenants and other rights 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 principal 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 nevertheless 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 reinainder of this page is intentionally left blank.)
16
The motion for the adoption of the foregoing resolution was duly seconded by Member
, and upon vote being takcn thereon, the following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
17
Passed and adopted this 19th day of May,2020.
�t
' ���,
,~r Jason Gadd,Mayor
Attest:
'` e
��
Amy Domeier, City Clerk
18
EXHIBIT A
PROPOSALS
A-1
EXHIBIT B
LIST OF EQUIPMENT
Equipment Cost Expected Life (in Years)
Wheel Loader $218,000 20
B-1
EXHIBIT C
FORM OF BOND
No. R- LJNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF HOPKINS
GENERAL OBLIGATION BOND
SERIES 2020A
Date of
Rate Maturitv Original Issue CUSIP
February 1, 20_ June 10,2020
Registered Owner: Cede& Co.
The City of Hopkins, 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 principal sum
of$ on the maturity date specified above, with interest thereon from the date hereof at the
annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable
February 1 and August 1 in each year, commencing February 1, 2021, to the person in whose name tliis
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 Bond
Trust Services Corporation, Roseville, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and
Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt
and full payment of such principal and interest as the same respectively become due, the full faith and
credit and taxing powers of the City have been and are hereby irrevocably pledged.
The City may elect on February 1, 2029, and on any day thereafter to prepay Bonds due on or
after February 1,2030. Redemption may be in whole or in part and if in part, 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 The Depository Trust Company ("DTC") of the particular 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 participant will then select by lot the benefieial ownership interests in sucl� maturity to
be redcemed. Prepayments will be at a price of par plus accrued interest.
This Bond is one of an issue in the aggregate principal amount of$8,585,000 all of like original
issue datc and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issucd
pursuant to a resolution adopted by the City Council on May 19, 2020 (the "Resolution"), for the purpose
of providing money to defray the expenses incurred and to be incurred in acquiring certain capital
equipment and making certain assessable local improvements, certain improvements to the sanitary
sewer, water, and stonn sewer syste�ns of the City, and certain public infrastructurc improvements,
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, Chapters 429, 444, and 475, as amended,
C-1
Minnesota Statutes, Sections 410.32 and 412.301, as amended, and Minnesota Statutes, Sections
469.1812 through 469.1815, as amended. The principal hereof and interest hereon are payable in part
from special assessments lcvied against property specially benefited by local improvements, from net
revenues of the sanitary sewer, water, and storm sewer systems of the City, from abatements collected
from certain property in the City, and from ad valorem taxes, as set forth in the Resolution to which
reference is rnade for a full statement of rights and powers thereby conferred. The full faith and credit of
the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to
levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency in
special assessments, net revenues, abatements, and ad valorem taxes pledged, which additional 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.
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.
1T 1S 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 sanitary sewer system, water system,
and storm scwer system frec from competition by other like municipal utilities; that adequate insurancc
on said 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 Sanitary Sewer Fund, the
Water Fund, and the Stonn Sewer Fund, into which it will pay all of the gross revenues from the sanitary
sewer systcm, water system, and storm sewer system, respectively; that it will also create and maintain a
Utility Iinprovements Account within the General Obligation Bonds, Series 2020A Debt Service Fund,
into which it will pay, out of the net revenues from the sanitary sewer systein, water system, and storm
sewer system, a sum sufficient to pay principal of the Utility Revenue Bonds (as defined in the
Resolution) and interest on the Utility Revenue Bonds when due; and that it will provide, by ad valorern
tax levies, for any deficiency in required net revenues of the sanitary sewer systein, water system, and
storm sewer system.
As provided in the Resolution and subject to certain limitations set forth therein, this Bond is
transferable upon the books of the City at the principal office of the Bond Registrar, by the registered
owner hereof in person or by the owner's attorney duly authorizcd in writing upon surrender hereof
together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the
registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of otller
authorized denominations. Upon such transfer or exchange thc City will cause a new Bond or Bonds to
be issued in the name of the transferee or registered owner, of the same aggregate principal amount,
bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee
or governmental charge required to be paid with respect to such transfer or exchange.
The City and the Bond Registrar may deem and treat the person in whose name this Bond is
registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of rcceiving
payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any
notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts,
conditions and things required by the 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 perfonned preliminary to and in the issuance
of this Bond in order to make it a valid and binding general obligation of the City in accordance with its
terms, havc becn done, do exist, have happcned and have been performed as so required, and that the
C-2 "
issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, charter, or
statutory limitation of indebtedness.
This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under
the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by
manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Hopkins, 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 Manager and has caused this Bond to be dated as of the date set forth below.
Dated: June l0, 2020
CITY OF HOPKINS,MINNESOTA
_ (Facsimilel (Facsimilel
Mayor City Manager
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
BOND TRUST SERVICES CORPORATION
By
Authorized Representative
ABBREVIATIONS
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
Act, State of
JT TEN — as joint tenants with right of
survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
G3
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and does hereby
irrevocably constitute and appoint attorney to transfer the said Bond on the
books kept for registration of the within Bond,with full power of substitution in the premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration or
any change whatever.
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities
Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the
New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature guarantee
program" as may be detennined 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 infonnation for all joint owners if this Bond is
held by joint account.)
Please insert social security or other identifying
nu�nber of assignee
G4
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.
Signature of
Date of Re}�istration Re�istered Owner Officer of Re istrar
Cede & Co.
Federal ID#13-2555119
GS
EXHIBIT D
TAX LEVY SCHEDULES
Tax Levv Schedule for Equipment Certificates
YEAR * TAX LEVY
2022 $
2023
2024
2025
2026
2027
2028
2029
* Year ta.r levv collected.
Tax Levv Schedule for Improvement Bonds
YEAR * TAX LEVY
2022 $
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
* Year tax levv collected.
D-]
Tax Levv Schedule for Abatement Bonds
YEAR * TAX LEVY
2022 $
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
* Year tax levy coJlected.
D-2
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN ) SS.
)
CITY OF HOPKINS )
I, being the duly qualified and acting City Clerk of the City of Hopkins, Hennepin County,
Minnesota (the "City"), 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 May 19, 2020 with the
original minutes on frle in my office and the extract is a full, true and correct copy of the minutes insofar
as they rclate to the issuance and sale of the City's General Obligation Bonds, Series 2020A, in the
origina] aggregate principal amount of$8,585,000.
WITNESS My hand officially as such City Clerk and the corporate seal of the City this _
day of May, 2020.
City Clerk
City of Hopkins,Minnesota
(SEAL)
HPI10-101 (JAE)
649472v2
S&P Global
Ratings
Ratin sDirect�
g
.............................................................................................................
Summary;
Hopkins, Minnesota; General
Obligation
Primary Credit Analyst:
Emily Powers,Chicago+ 1 (312)233 7030;emily.powers@spglobal.com
Secondary Contact:
Caroline E West,Chicago(1)312-233-7047;caroline.west@spglobal.com
Table Of Contents
............................................................................................................�
Rating Action
Stable Outlook
Credit Opinion
Related Research
WWW STANDARDANDPOORS.COM/RATWGSUIHECI MAY 8, 2020 1
Summary:
Hopkins, Minnesota; General0bligation
.. . .
US$8.585 mil GO bnds ser 2020A dtd 06/10/2020 due 02/O1/2036
Long Term Rating AA+/Stable New
Hopldns GO
Long Term Rating AA+/Stable Affirmed
Rating Action
S&P Global Ratings assigned its'AA+'long-term rating to Hopldns, Minn.'s series 2020A genera]obligation(GO)
bonds.At the same time,we affirmed our'AA+'rating on the city's existing GO bonds.The outlook is stable.
The city's full-faith-and-credit pledge and ability to levy unlimited ad valorem property taxes secure the bonds.
Officials intend to pay debt service with special assessments;net revenues of the sewer,water, and storm sewer
systems; and pledged tax abatement revenue generated from specific parcels,but the rating is based on the unlimited
ad valorem tax pledge.The city's existing GO debt also includes various other pledged revenues such as
tax-increment,tax abatement, special assessment revenues,and various enterprise fund revenues,but in each case,we
rate to the city's GO pledge. Proceeds will be used to finance various street reconstruction projects, and to purchase
capital equipment.
Credit overview
Hopkins,having maintained a strong history of mostly stable operational performance, complete with very strong
available reserves,has placed itself in a positive position to hold steady during uncertain economic times. It maintains
sizable general fund receivables,including loans to the Arts Center fund,water fund,and various other governmental
funds, and even excluding those amounts from the city's available fund balance,it has been able to maintain very
strong reserves. However,if these interfund loans continue to grow,there could be pressure on the city's general fund.
Hopldns is backed by a strong management team that has implemented robust policies and practices,helping it
maintain stability in operations.The city's debt profile,while somewhat elevated,has been historically managed within
its budget and,even given sizable debt service carrying charges,we expect that to continue.Additionally,its other
long-term liabilities(pension and other postemployment benefits[OPEBs]) are manageable,further supporting its
underlying credit quality.
Given the uncertainty in the current economic environment stemming from the recent spread of coronavirus
(COVID-19),and the possible financial repercussions and pressures that could arise,in our view,the city could face
pressures similar to those in the last recession,possibly including reductions in property values and state aid receipts,
which could lead to decreased revenues over the medium term. However,even given a recession,we believe Hopkins
has sufficient financial flexibility to address uncertainties and budget pressures. Generally, our rating outlook
timeframe is up to two years;given the current uncertainty around the pandemic, our view of the credit risks to the
WWW STANDARQANDPODRS COM1RAl WGSDIHECI MAY 8, 2020 2
Summary:Hopkins, Minnesota; General Obligation
city centers on the more immediate budget effects in 2020.
The'AA+'rating reflects our assessment of the city's:
• Very strong economy,with access to a broad and diverse metropolitan statistical area(MSA);
• Very strong management,with strong financial policies and practices under our Financial Management Assessment
(FMA)methodology;
• Adequate budgetary performance,with operating results that we expect could improve in the near term relative to
fiscal 2018,which closed with operating deficits in the general fund and at the total governmental fund level in fiscal
2018;
• Very strong budgetary flexibility,with an available fund balance in fiscal 2018 of 20%of operating expenditures;
• Very strong liquidity,with total government available cash at 95.3%of total governmental fund expenditures and
4.8x governmental debt service,and access to external liquidity we consider strong;
• Weak debt and contingent liability position,with debt service carrying charges at 20.1%of expenditures and net
direct debt that is 249.7%of total governmental fund revenue,but rapid amortization,with 71.6%of debt scheduled
to be retired in 10 years;and
• Strong institutional framework score.
Stable Outlook
Downside scenario
We could lower the rating if budgetary pressures outside of the general fund, such as with the enterprise and Arts
Center funds, continue to drain general fund resources, and if debt continues to grow.
Upside scenario
While we don't view this as likely given current macroeconomic conditions,we could raise the rating if the city's
balance sheet improves and economic measures,such as its income levels and per capita market values,were to
improve to levels commensurate with those of higher-rated peers,all other credit factors remaining equal.
Credit Opinion
Very strong economy
We consider Hopkins'economy very strong. The city,with an estimated population of 18,808,is in Hennepin County
in the Minneapolis-St. Paul-Bloomington MSA,which we consider to be broad and diverse. It has a projected per
capita effective buying income of 123%of the national level and per capita market value of$114,093. Overall,market
value grew by 5.8%over the past year to$2.1 billion in 2019.The county unemployment rate was 2.5%in 2018.
Hopkins'proximity to the Twin Cities allows easy access to employment and retail opportunities,and will become
more easily accessible with the expansion of the Minneapolis METRO light-rail system,which will include three new
stops in Hopldns that is currentiy under development. Hopldns'tax base is composed of primarily residential(39%),
and commercial/industrial(35%)valuations. Even given uncertainty among wider macroeconomic factors,the city is
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Saanmary: Hvpkrns, Mimresota; General Obligation
still experiencing steady economic activity,with most businesses still operating and economic and residential
development projects continuing to move forward.We expect the city's local economy to remain very strong over the
near term,but given that the U.S. economy is currently in a recession,as reported by S&P Global Economics(see"An
Already Historic U.S. Downturn Now Looks Even Worse,"published April 16, 2020 on RatingsDirect), economic
metrics and property values could be pressured over the medium term.
Very strong management
We view the city's management as very strong,with strong financial policies and practices under our FMA
methodology,indicating financial practices exist in most areas,but that governance officials might not formalize or
monitor all of them on a regular basis.
Highlights of the city's financial practices and policies include:
• Use of at least three years of historical information in the formulation of the upcoming year's revenue and
expenditure assumptions with the help of outside sources and a line-by-line approach to budgeting;
• Quarterly reporting of budget-to-actual performance to the council with the ability to make amendments to the
budget as needed;
• A five-year,long-term financial plan that projects revenues and expenditures and is updated on an annual basis;
• A rolling five-year,long-term capital plan that addresses capital needs of the city with sources and uses of funds
identified; ,
• Formalized investment management policy with quarterly reporting of investments and holdings;
• Formalized debt management policy that sets guidelines for short-term borrowing,maturity lengths, and minimum
allowable coverage on revenue debt;and
• Formalized fund balance policy to maintain 42%of expenditures for cash-flow needs,which the city has mostly
been in compliance with,with the exception of 2018, and which we calculate differently than the city given our
adjustments to available reserves.
Adequate budgetary performance
Hopkins'budgetary performance is adequate,in our opinion.The city had operating deficits of negative 1.7%of
expenditures in the general fund and negative 7.1%across all governmental funds in fiscal 2018.
Current-year performance for fiscal 2020 is tracldng closely with the budget,which is calling for a break-even result.
Management has already begun assessing potential revenue pressures that could arise given the current recessionary
environment, and has already identified$400,000 in savings that have been or could be implemented into the current
and 2021 budgets if substantial decreases in revenues were to occur.We expect the city will continue to manage its
overall operating budget to alleviate any potential pressure on the general fund, and ease its reliance on interfund
loans. Should interfund loans and negative operations in the other funds rise in such a way that we believe the city's
budgetary performance is compromised,it could lead to a weakening in our view of its overall credit quality.
General fund results for fiscal 2018 came out slightly worse than the break-even budget,mainly due to salary and
benefit expenses that were higher than expected and some under-budgeted revenues in public safety and general
governments.While the deficit was relatively minimal,management has addressed these operational items by looking
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Summary: Ho��kfns, Minrresota; Ceneral Obligation
more closely at employee salaries and benefits and including higher contingency measures in the current and future
budgets. Actual(unaudited)results for fiscal 2019 came out better than budgeted, showing a$376,000 (or 2.6%of
expenditures)increase to fund balance,reflecting positive variances in inspection revenue,rental licensing revenue,
and unbudgeted state and county grants.
The general fund benefits from a revenue structure that has historically been stable and predictable,consisting mostly
of property taxes(78%),with state aid(referred to as local government aid[LGA]in Minnesota)accounting for 10%. In
prior recessionary times,particularly during the Great Recession, management noted that tax collections remained
very stable;therefore,it does not expect any substantial reductions in that revenue stream. However, even if property
tax receipts or LGA did fall substantially,we believe that the city will manage its budget to maintain mostly balanced
operations.
Very strong budgetary flexibility
Hopldns'budgetary flexibility is very strong,in our view,with an available fund balance in fiscal 2018 of 20%of
operating expenditures,or$2.7 million.
We have reduced the city's available fund balance to account for interfund loans to its Arts Center fund,water fund,
and various other governmental funds,which amounted to roughly$2.7 million in 2018. Even with this portion
removed from the available fund balance,the city's reserves have been historically maintained at levels we consider
very strong. We note that the interfund loans have increased year over year and if they continue to rise,they could put
downward pressure on what we consider the available fund balance.
The Arts Center fund has historically held a deficit fund balance,which amounted to$1.2 million in fiscal 2018, all of
which was marked as a loan from the general fund.The city realizes economic benefits from the Arts Center,so
management plans to continue providing financial support for it from the general fund. While the 2019 budget did not
account for any improvement in the fund deficit,year-end actual results as reported by management showed a slight
decrease in the receivable,to$1.15 million,which was due to efforts by Arts Center staff to bring in more revenue and
lower expenses.T'he facility is currently closed due to statewide directives in response to COVID-19,but city
management does not expect the temporary closure to lead to increased reliance on the city's general fund.
Additionally, a direct lery has been implemented for fiscal 2020 that will begin to pay down the receivable owed to the
general fund, although given the amount of the approved levy, at$60,000,there is no specified timeline for when the
full receivable will be repaid.The general fund also has receivables from the water fund and various other
governmental funds, al]of which(including the Arts Center fund receivable)amounted to$2.7 million in fiscal 2018
and,per management,increased to$2.85 million in 2019,for which we do not have an audit.
The receivable from the water fund,increased sizably between 2017 and 2018,but only marginally in 2019,to$1.1
million, as noted by management. Water rate hikes were implemented in January 2020 to pay down the amount owed
to the general fund,and while there is no specified timeline for full repayment,management expects it will likely occur
within a five-year period. The remainder of the receivable to the general fund,totaling roughly$464,000 in 2018, is
accounted for in various nonmajor governmental funds,the negative balances of which primarily reflect timing of bond
proceeds.This portion of the receivable improved from 2017,but an additional loan to the city's HRA fund of$200,000
increased the amount in 2019;however,this portion will be repaid in 2020.
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT MAY 8, 2020 S
Su�nmary:Hopklns, Minnesota; Cerreral Obligation
Very strong liquidity
In our opinion, Hopldns'liquidity is very strong,with total government available cash at 95.3%of total governmental
fund e�cpenditures and 4.8x governmental debt service in 2018. In our view,the city has strong access to external
liquidity if necessary.
The city's available$25.6 million in available cash and investments(after removing unspent bond proceeds)were held
primarily in federal and municipal securities,money market accounts, and certificates of deposit,which we do not
consider aggressive. Based on past issuance of debt,we believe the city has strong access to capital markets to provide
for liquidity needs if necessary. It has no direct-purchase or variable-rate debt that we expect could pose a liquidity
risk. Even given current recessionary pressures,we believe that the city has sufficient cash levels and will maintain a
very strong liquidity profile.
Weak debt and contingent liability profile
In our view,Hopkins'debt and contingent liability profile is weak.Total governmental fund debt service is 20.1%of
total governmental fund expenditures, and net direct debt is 249.7%of total governmental fund revenue.
Approximately 71.6%of the direct debt is scheduled to be repaid within 10 years,which is,in our view, a positive
credit factor.
We calculate net direct debt(excluding self-supporting GO debt paid from the city's enterprise funds)at$76.3 million.
Management noted that the city plans to issue up to$12.0 million in new-money GO bonds in the next two years for
street reconstruction projects.We believe the debt profile will likely remain weak.While debt service costs make up a
considerable portion of the budget,the city has historically managed these costs well,which we expect it will continue
to do, even given potential budgetary pressures that could arise from the current recessionary environment.
Pensions and other postemployment benefits (OPEBs)
Hopkins'combined required pension and actual OPEB contributions totaled 4.4%of total governmental fund
expenditures in 2018. Of that amount, 3.6%represented required contributions to pension obligations,and 0.7%
represented OPEB payments.The city made its full annual required pension contribution in 2018.
We do not believe that pension liabilities represent a medium-term credit pressure,as contributions are only a modest
share of the budget, and we believe the city has the capacity to absorb higher costs without pressuring operations.
Hopldns participates in two multiple-employer,defined-benefit pension plans that have seen recent improvements in
funded status,though plan statutory contributions have regularly fallen short of actuarial recommendations.Along
with certain plan-specific actuarial assumptions and methods,this introduces some long-term risk of funding volatility
and cost acceleration. Although the city funds its OPEBs on a pay-as-you-go basis,exposing it to cost acceleration and
volatility,we expect that medium-term costs will remain only a small share of total spending and,therefore,not a
significant budgetary pressure.
The city participates in the following plans:
• Minnesota General Employees Retirement Fund(GERF): 80.2%funded(as of June 30, 2019),with a city
proportionate share of the plan's net pension liability of$4.5 million.
• Minnesota Police and Fire Fund(PEPFF): 89.3%funded(June 30, 2019),with a proportionate share of$3.1 million.
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Su�nmary:Hopkins, Mi�i�zesota; General Obligation
• A single-employer, defined-benefit OPEB plan: 0%funded with a net OPEB liability of$1.0 million.
Total contributions to GERF and PEPFF were 89%and 94%,respectively,of our minimum funding progress metric
and were slightly above static funding in both cases.Annual contributions are based on a statutory formula that has
typically produced contributions lower than the actuarially determined contribution for each plan. In our view,this
increases the risk of underfunding over time,if the state legislature does not make adjustments to offset future funding
shortfalls. Other key risks include a 7.5%investment rate-of-return assumption(for both plans)that indicate some
exposure to cost acceleration as a result of market volatility, and an amortization method that significantly defers
contributions through a lengthy, closed 30-year amortization period based on a level 3.25%payroll growth assumption.
Regardless,costs remain only a modest share of total spending,and we believe they are unlikely to pressure the city's
medium-term operational health.
Strong institutional framework
The institutional framework score for Minnesota cities with a popula�ion greater than 2,500 is strong.
Related Research
• S&P Public Finance Local GO Criteria: How We Adjust Data For Analytic Consistency, Sept. 12, 2013
• Incorporating GASB 67 And 68: Evaluating Pension/OPEB Obligations Under Standard&Poor's U.S. Local
Government GO Criteria, Sept. 2, 2015
�- � � �
Hopldns GO bnds
Long Term Rating AA+/Stable Affirmed
Hopkins GO bnds ser 2017B dtd 07/13/2017 due 02/O1/2033
Long Term Rating AA+/Stable Affirmed
Hopldns GO imp bnds
Long Term Rating AA+/Stable Affirmed
Hopkins GO tax abatement bnds
Long Term Rating AA+/Stable Affirmed
Hopldns GO tax increment rev rfdg bnds
Long Term Rating AA+/Stable Affirmed
Hopkins GO
Long Term Rating AA+/Stable Affirmed
Hopldns GO
Long Term Rating AA+/Stable Affirmed
Hopkins GO
Long Term Rating AA+/Stable Affirmed
Hopldns GO
Long Term Rating AA+/Stable Affirmed
WWW.STANDAADANDPOORS.COM/RAIINGSDIRECT MAY S, 2020 7
Su�nmary: Hopkrns, Mimresota; General Obligatiosz
Certain terms used in this report,particularly certain adjectives used to express our view on rating relevant factors,have specific meanings ascribed
to them in our criteria,and should therefore be read in conjunction with such criteria.Please see Ratings Criteria at www.standardandpoors.com for
further information.Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com.All ratings affected by this rating
action can be found on S&P Global Ratirgs'public website at www.standardandpoors.com.Use the Ratings search box located in the]eft column.
UJWW STAN[7RRDF�NDPOORS.GOM/RATINGSGIRECT MAY 8, 2020 8
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