CR 96-201 Excelsior Blvd Improvement ProjectDecember 9, 1996
Overview
Primary Issues to Consider
Supporting Documents
o Resolution 96 -84
o Bond official statement
• 1 (
7amewb. Kerrigan j
Planting & Economic Development Director
o What are the specifics of this bond issue?
o What are the specific sources of funding for this project?
o What are the specifics of this project?
Council Report 96 -201
EXCELSIOR BOULEVARD IMPROVEMENT PROJECT BOND SALE
Proposed Action
Staff recommends adoption of the following motion: Move to approve Resolution 96 -84,
awarding the sale of $2,240.000 General Obligation Tax Increment Bonds. Series 1997A,
(Excelsior Boulevard Improvement Project) and approving and authorizing the execution of
various documents in connection therewith. With this action, Ehlers and Associates will take the
necessary steps to complete this bond sale.
As the Council is aware, staff has been working with Hennepin County to undertake a phased
upgrading of the entire Excelsior Boulevard roadway throughout the City. The majority of
funding for this project will be shared between the county and City.
The funding source for the City portion of the improvement project, as detailed in the Capital
Improvement Program, will come from MSA funds, special assessments, and tax increment. The
tax increment portion is proposed to be provided through the subject bond issue paid by
increments generated from TIE District 2 -1 (this is the district that includes the it L. Johnson
property).
Based on previous action by the Council, Ehlers and Associates has been undertaking the
necessary steps to complete this bond sale. This is the final action the Council needs to undertake
concerning this matter. A representative from Ehlers and Associates will be present at the
meeting to answer questions.
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Council Report 96 -201 - Page 2
Primary Issues to Consider
o What are the specifics of this bond issue?
The total amount of the bond issue would be $2,240,000. This issue would he repaid from
available tax increment generated from Tax Increment District 2 -1 over a 15 -year period.
o What are the specific sources of funding for this project?
The entire City cost of the first phase of Excelsior Boulevard improvements will be funded
with this $2,240,000 G.O. Tax Increment Bond. Bond payments will be from tax increment
generated by TIF District 2 -1. Sufficient municipal state aid funds will be available to fund
future phases of Excelsior Boulevard improvements and Shady Oak Road improvements.
o What are the specifics of this project?
Specific Excelsior Boulevard Phase One project elements and estimated costs are shown
below.
Estimated
Project Element City Cost
Road construction $ 260,000
Storm sewer construction 385,000
1lth Avenue improvements 270,000
Right -of -way acquisition 270,000
Excelsior Boulevard lighting 328,000
Landscaping 400,000
Relocate overhead electricity to underground 100,000
Sidewalk 90,000
Contingency 137,000
TOTAL: $2,240,000
Alternatives
The City Council has the following alternatives regarding this matter:
1. Approve the action as recommended by staff. With this action, Ehlers and Associates will
complete the sale of the subject bonds.
2. Do not approve sale of the bond. With this action, the Council will need to provide direction
to staff on how to address funding for this improvement project.
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A RESOLUTION AWARDING THE SALE OF $2,240,000
GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1997A;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council of the City of Hopkins, Hennepin County,
Minnesota (City) as follows:
Section 1. Sale of Bonds.
1.01. It is hereby determined that:
(a)
(b) the City has duly established tax increment financing district no. 2 -1 (TIF
District) within the Project pursuant to Minnesota Statutes, Section 469.174
to 469.179 (TIF Act);
(c)
(d) the following Costs to be financed by the Bonds are authorized by the
Plan:
Public Improvements
RESOLUTION NO. 96
the City has duly established the Redevelopment Project No. 2 (Project)
pursuant to Minnesota Statutes, Sections 469.001 through 469.047 (the
Act);
the City is authorized by Section 469.178 of the TIF Act to issue and sell
its general obligations to pay all or a portion of the public redevelopment
costs (Costs) related to the Project as identified in the tax increment
financing plan (Plan) for the TIF District;
County Road 3 Improvements
Sources
Par Amount of Bonds $2,240,000
Total Sources $2,240,000
(e)
Uses
Project Costs $2,175,000
Costs of Issuance 29,200
Discount 35,800
Total Uses $2,240,000
it is necessary and expedient to the sound financial management of the
affairs of the City to issue $2,240,000 General Obligation Tax Increment
Bonds, series 1997A (Bonds) to provide fmancing for the Costs.
(f) The Housing and Redevelopment Authority in and for the City of Hopkins
(Authority) has requested the City to issue and sell its general obligations
to finance a portion of the Costs.
1.02. The proposal of (Purchaser) to
purchase $2,240,000 General Obligation Tax Increment Bonds, Series 1997A (Bonds) of the City
described in the Terms of Proposal thereof is found and determined to be a reasonable offer and
is hereby accepted, the proposal being to purchase the Bonds at a price of $ plus
accrued interest to date of delivery, for Bonds bearing interest as follows:
True interest cost:
1.03. The sum of $ being the amount proposed by the Purchaser in excess
of $2,204,200 will be credited to the Debt Service Fund hereinafter created. The City 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 forthwith.
The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of
the City.
1.04. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes,
Chapter 469 (Act), in the total principal amount of $2,240,000, originally dated January 1, 1997,
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Year of Interest Year of Interest
Maturity Rate Maturity Rate
1998 2006
1999 2007
2000 2008
2001 2009
2002 2010
2003 2011
2004 2012
2005
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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:
Year Amount Year Amount
1998 $ 85,000 2006 $155,000
1999 110,000 2007 160,000
2000 115,000 2008 170,000
2001 120,000 2009 180,000
2002 125,000 2010 190,000
2003 135,000 2011 200,000
2004 140,000 2012 210,000
2005 145,000
1.05. Optional Redemption. The City may elect on February 1, 2006, and on any day
thereafter to prepay Bonds due on or after February 1, 2007. 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 DTC (as
defined in Section 7 hereof) 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.
Section 2. Registration and Payment.
2.01. Registered Form. The Bonds will be issued only in fully registered form. 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.
2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest
payment date preceding the date of authentication to which interest on the Bond has been paid
or made available for payment, unless (i) the date of authentication is an interest payment date
to which interest has been paid or made available for payment, in which case the Bond will be
dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest
payment date, in which case the Bond will be dated as of the date of original issue. The interest
on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 1997,
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 will appoint a bond registrar, transfer agent, authenticating
agent and paying agent (Registrar). The effect of registration and the rights and duties of the
City and the Registrar with respect thereto are as follows:
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(a) Register. The Registrar must keep at its principal corporate trust office a
bond register in which the Registrar provides for the registration of ownership of Bonds
and the registration of transfers and exchanges of Bonds entitled to be registered,
transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed
by the registered owner thereof or accompanied by a written instrument of transfer, in
form satisfactory to the Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Registrar will authenticate
and deliver, in the name of the designated transferee or transferees, one or more new
Bonds of a like aggregate principal amount and maturity, as requested by the transferor.
The Registrar may, however, close the books for registration of any transfer after the
fifteenth day of the month preceding each interest payment date and until that interest
payment date.
(c) Exchange of Bonds. When Bonds are surrendered by the registered owner
for exchange the Registrar will authenticate and deliver one or more new Bonds of a like
aggregate principal amount and maturity as requested by the registered owner or the
owner's attorney in writing.
(d) Cancellation. Bonds 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 endorsement on such 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.
(f) Persons Deemed Owners. The City and the Registrar may treat the person
in whose name a Bond is registered in the bond register as the absolute owner of the
Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or
on account of, the 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) Taxes, Fees and Charges. The Registrar may impose a charge upon the
owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar
for any tax, fee or other governmental charge required to be paid with respect to the
transfer or exchange.
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2.04. Appointment of Initial Registrar. The City appoints
, 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 remove the Registrar upon 30 days' notice and upon
the appointment of a successor Registrar, in which event the predecessor Registrar must deliver
all cash and Bonds in its possession to the successor Registrar and must deliver the bond register
to the successor Registrar. On or before each principal or interest due date, without further order
of this Council, the City Finance Director must transmit to the Registrar moneys sufficient for
the payment of all principal and interest then due.
2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the
direction of the City Clerk and executed on behalf of the City by the signatures of the Mayor and
the City Manager, provided that all signatures may be printed, engraved or lithographed
facsimiles of the originals. If an officer whose signature or a facsimile of whose signature
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(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated
or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount,
number, maturity date and tenor in exchange and substitution for and upon cancellation
of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost,
upon the payment of the reasonable expenses and charges of the Registrar in connection
therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the
Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of
the ownership thereof, and upon furnishing to the Registrar an appropriate bond or
indemnity in form, substance and amount satisfactory to the Registrar, 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) not more
than 60 and not less than 30 days prior to the date fixed for redemption 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 redemption date, provided that
the funds for the redemption are on deposit with the place of payment at that time.
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Section 3. Form of Bond.
3.01. The Bonds will be printed or typewritten in substantially the following form:
• [Face of the Bond]
appears on the Bonds ceases to be such officer before the delivery of any 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
Finance Director will deliver the same to the Purchaser upon payment of the purchase price in
accordance with the contract of sale heretofore made and executed, and the Purchaser is not
obligated to see to the application of the purchase price.
2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive
Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3
with such changes as may be necessary to reflect more than one maturity in a single temporary
bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be
exchanged therefor and cancelled.
No. R-
Rate Maturity Original Issue CUSIP
Registered Owner: Cede & Co.
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF HOPKINS
January 1, 1997
GENERAL OBLIGATION TAX INCREMENT BOND, SERIES 1997A
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The City of Hopkins, 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 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, payable February 1 and August 1 in each year,
commencing August 1, 1997, to the person in whose name this Bond is registered at the close
of business on the fifteenth day (whether or not a business day) of the immediately preceding
month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are
payable in lawful money of the United States of America by check or draft by
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, 2006, and on any day thereafter to prepay Bonds due
on or after February 1, 2007. 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 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 beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a
price of par plus accrued interest.
The City Council has designated the issue of Bonds of which this Bond forms a part as
"qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended (the Code) relating to disallowance of interest expense for
financial institutions and within the $10 million limit allowed by the Code for the calendar year
of issue.
Additional provisions of this Bond are contained on the reverse hereof and such provisions
have the same effect as though fully set forth in this place.
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.
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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:
City Manager Mayor
This Bond is one of an issue in the aggregate principal amount of $2,240,000 all of like
original issue date and tenor, except as to number, maturity date, redemption privilege, and
interest rate, all issued pursuant to a resolution adopted by the City Council on December 17,
1996 (the Resolution), for the purpose of providing money to aid in financing the public
redevelopment costs of a project (Project) in the City, 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, Sections 469.174 to 469.179, the Minnesota Tax Increment Financing Act,
and Minnesota Statutes, Sections 469.001 through 469.047 and the principal hereof and interest
hereon are payable primarily from tax increments resulting from increases in taxable valuation
of real property in a Tax Increment Financing District (District) in the Project, 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 Bond and the
City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in
the event of any deficiency in tax increments pledged, which taxes may be levied without
limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds
in denominations of $5,000 or any integral multiple thereof of single maturities.
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(Facsimile) (Facsimile)
CERTIFICATE OF AUTHENTICATION
CITY OF HOPKINS, MINNESOTA
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
[Reverse of the Bond]
By
Authorized Representative
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As provided in the Resolution and subject to certain (imitations 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 authorized 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 other authorized denominations. Upon such transfer or exchange the 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 receiving 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 performed preliminary to and
in the issuance of this Bond in order to make it a valid and binding general obligation of the City
in accordance with its terms, have been done, do exist, have happened and have been performed
as so required, and that the issuance of this Bond does not cause the indebtedness of the City to
exceed any constitutional, statutory or charter limitation of indebtedness.
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
TEN ENT -- as tenants under Uniform Gifts or
by entireties Transfers to Minors
JT TEN --
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as joint tenants with
right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT Custodian
(Cust) (Minor)
Act
(State)
Additional abbreviations may also be used though not in the above list.
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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:
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ASSIGNMENT
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 Signature Program ( "MSP ")
or such other "signature guarantee program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange
Act of 1934, as amended.
The Bond Registrar will not effect transfer of this Bond unless the information concerning
the assignee requested below is provided.
Name and Address:
(Include information for all joint owners if this
Bond is held by joint account.)
Please insert social security or other
• identifying number of assignee
Date of Registration
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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.
Cede & Co.
Federal ID #13-2555119
3.02. The City Clerk is directed to obtain a copy of the proposed approving legal opinion
of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to
dating thereof and to cause the opinion to be printed on or accompany each Bond.
Section 4. Payment; Security; Pledges and Covenants.
Signature of
Registered Owner Officer of Registrar
4.01. (a) The Bonds are payable from the General Obligation Tax Increment Bonds,
Series 1997A Debt Service Fund (Debt Service Fund) hereby created, and all tax increments (Tax
Increments) received by the City pursuant to the Tax Increment Pledge Agreement between the
City and Authority (the Pledge Agreement) are pledged to the Debt Service Fund. If a payment
of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt
Service Fund to pay the same, the City Finance Director is directed to pay such principal or
interest from the general fund of the City, and the general fund will be reimbursed for those
advances out of the proceeds of Tax Increments when received. There is appropriated to the Debt
Service Fund (i) capitalized interest funded from Bond proceeds, if any, (ii) any amount over the
minimum purchase price paid by the Purchaser, and (iii) the accrued interest paid by the
Purchaser upon closing and delivery of the Bonds.
(b) The Mayor and City Manager are authorized to execute the Pledge Agreement in
substantially the form on file, with such changes not inconsistent with law as the officers
executing the same may approve which approval shall be conclusively evidenced by the execution
thereof.
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4.02. It is determined that the estimated collection of Tax Increments for payment of
principal and interest on the Bonds will prcduce at least five percent in excess of the amount
needed to meet, when due, the principal and interest payments on the Bonds and that no tax levy
is needed at this time.
4.03. The City Clerk is directed to file a certified copy of this Resolution with the
Taxpayer Services Division Manager of Hennepin County and 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 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. The Mayor and City Manager are authorized and directed to certify that they have
examined the Official Statement prepared and circulated in connection with the issuance and sale
of the Bonds and that to the best of their knowledge and belief the Official Statement is a
complete and accurate representation of the facts and representations made therein as of the date
of the Official Statement.
5.03. The City authorizes the Purchaser to forward the amount of Bond proceeds
allocable to the payment of issuance expenses (other than amounts payable to Kennedy & Graven,
Chartered as Bond Counsel) to Resource Bank & Trust Company, Minneapolis, Minnesota on the
closing date for further distribution as directed by the City's financial adviser, Ehlers and
Associates, Inc.
Section 6. Tax Covenant.
6.01. The City covenants and agrees with the holders from time to time of the Bonds
that it will not take or permit to be taken by any of its officers, employees or agents any action
which would cause the interest on the Bonds to become subject to taxation under the Internal
Revenue Code of 1986, as amended (the Code), and the Treasury Regulations promulgated
thereunder, in effect at the time of such actions, and that it will take or cause its officers,
employees or agents to take, all affirmative action within its power that may be necessary to
ensure that such interest will not become subject to taxation under the Code and applicable
Treasury Regulations, as presently existing or as hereafter amended and made applicable to the
Bonds.
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6.02. (a) The City will comply with requirements necessary under the Code to establish
and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of
the Code, including without limitation requirements relating to temporary periods for investments,
limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of
excess investment earnings to the United States if the Bonds (together with other obligations
reasonably expected to be issued in calendar year 1997) 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 Bonds are issued and outstanding at
one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section
148(f)(4)(C) of the Code.
6.03. The City further covenants not to use the proceeds of the Bonds or to cause or
permit them or any of them to be used, in such a manner as to cause the Bonds to be "private
activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code.
6.04. In order to qualify the Bonds as "qualified tax- exempt obligations" within the
meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and
representations:
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.
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Code;
(a) the Bonds are not "private activity bonds" as defined in Section 141 of the
(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 1997 will not exceed
$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during
calendar year 1997 have been designated for purposes of Section 265(b)(3) of the Code.
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Section 7. Book -Entry System; Limited Obligation of City.
7.01. The Bonds will be initially issued in the form of a separate single typewritten or
printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon
initial issuance, the ownership of each Bond will be registered in the registration books kept by
the Bond Registrar in the name of Cede & Co., as nominee for The Depository Trust Company,
New York, New York, and its successors and assigns (DTC). Except as provided in this section,
all of the outstanding Bonds will be registered in the registration books kept by the Bond
Registrar in the name of Cede & Co., as nominee of DTC.
7.02. With respect to Bonds registered in the registration books kept by the Bond
Registrar in the name of Cede & Co., as nominee of DTC, the City, the Bond 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
(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 Bond 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 Bond 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 Bond Registrar as the holder and absolute owner of such
Bond for the purpose of payment of principal, premium and interest with respect to such Bond,
for the purpose of registering transfers with respect to such 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 Bond 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 Bond 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
Bond Registrar and Paying Agent.
7.03. Representation Letter. The City has heretofore executed and delivered to DTC a
Blanket Issuer Letter of Representations (Representation Letter) which shall govern payment of
principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds.
Any Paying Agent or Bond Registrar subsequently appointed by the City with respect to the
Bonds will agree to take all action necessary for all representations of the City in the
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Representation letter with respect to the Bond Registrar and Paying Agent, respectively, to be
Lvnlplied - with ar all times.
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7.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the
City Council, determines that it is in the best 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 Bond
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. Payments to Cede & Co. Notwithstanding any other provision of this Resolution
to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC,
payments with respect to principal of, premium, if any, and interest on the Bond and 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.
Section 8. Continuing Disclosure.
8.01. The City hereby covenants and agrees that it will comply with and carry out all of
the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of
this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not
to be considered an event of default with respect to the Bonds; however, any Bondholder may
take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the City to comply with its obligations under this section.
8.02. "Continuing Disclosure Certificate" means that certain Continuing Disclosure
Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery
of the Bonds, as originally executed and as it may be amended from time to time in accordance
with the terms thereof.
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Attest:
City Manager
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Passed and adopted this 17th day of December, 1996.
Mayor