2000-018 RESOLUTION NO. 2000-18
A RESOLUTION AWARDING THE SALE OF $2,060,000 GENERAL
OBLIGATION WATER REVENUE BONDS,
SERIES 2000A; FDC[NG THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVDING 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 determined that:
(a) the City Engineer has recommended the construction of various improvements to
the City's water system (Project).
(b) the City is authorized by Minnesota Statutes, Section '!,4'!, .075 (Act) to finance
all or a portion of the cost of the Project (Project Costs) by the issuance of general obligation
bonds of the City payable from the net revenues of the water system. The Project Costs are
presently estimated by the engineer to be as follows:
Project Designation & Description Total Project Cost
Sources
Par Amount of Bonds $2,060,000
Total Sources $2,060,000
Uses
Project Costs $1,995,000
Discount Allowance 30,900
Finance Related Expenses 34,100
Total Uses $2,060,000
(c) it is necessary and expedient to the sound financial management of the affairs of
the City to issue $2,060,000 General Obligation Water Revenue Bonds, Series 2000A (Bonds)
pursuant to the Act to provide financing for the Project.
1.02. The proposal of Norwest Investment Services, Inc. (Purchaser) to purchase $2,060,000
General Obligation Water Revenue Bonds, Series 2000A (Bonds) of the City described in the Terms of
Proposal thereof is found and determined to be a reasonable offer and is accepted, the proposal being to
SJB- 177567v 1
HP110-61
Bonds at a price of $2,042,490.00 plus accrued interest to date of delivery, for Bonds
interest as follows:
Year of Interest Year of Interest
Mamri _ty Rate Mamri _ty Rate
2001 4.20% 2009 5.05%
2002 4.50% 2010 5.10%
2003 4.60% 2011 5.20%
2004 4.70% 2012 5.25%
2005 4.80% 2013 5.30%
2006 4.90% 2014 5.40%
2007 4.95% 2015 5.50%
2008 5.00%
cost: 5.2960%
The sum of $13,390 being the amount proposed by the Purchaser in excess of
will be credited to the Debt Service Fund hereinafter created. The City Finance Director is
deposit the good faith check of the Purchaser, pending completion of the sale of the Bonds,
the good faith checks of the unsuccessful proposers forthwith. The Mayor and City
directed to execute a contract with the Purchaser on behalf of the City.
The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Section
(Act), in the total principal amount of $2,060,000, originally dated April 1, 2000, in the
of $5,000 each or any integral multiple thereof, numbered No. R-l, upward, bearing
above set forth, and maturing serially on February 1 in the years and amounts as follows:
Year Amount Year Amount
2001 $115,000 2009 $140,000
2002 100,000 2010 145,000
2003 105,000 2011 155,000
2004 110,000 2012 160,000
2005 115,000 2013 170,000
2006 t20,000 2014 180,000
2007 125,000 2015 190,000
2008 130,000
1.04. Optional Redemption. The City may elect on February 1, 2009, and on any day
thereafter to prepay Bonds due on or after February 1, 2010. 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.
1.05. Term Bonds. To be completed if Term Bonds are requested by the Purchaser.
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 will be payable on
February 1 and August 1 of each year, commencing February 1, 2001, to the registered owners of
record thereof as of the close of business on the fifteenth day of the irmnediately 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:
(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 attomey
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,
SJB-177567vl
HP110-61
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 wilt 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 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.
(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.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is
destroyed, stolen or lost, the Registrar will dehver 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 of 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
SJB-177567vl
HP110-61
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
registered owners, 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.
2.04. Appointment of Initial Registrar. The City appoints Bankers Trust Company, Des
Moines, Iowa, 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 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 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.
SJB-177567vl
HPll0-61
Section 3. Form of Bond.
3.01. The Bonds will be printed or typewritten in substantially the following form:
[Face of the Bond]
No. R- UNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF HOPKINS
GENERAL OBLIGATION WATER REVENUE
BOND, SERIES 2000A
Date of
Rate Maturi~ Original Issue CUSIP
April 1, 2000
Registered Owner: Cede & Co.
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 Febmary 1,
2001, 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 Bankers Trust Company, Des Moines, Iowa, 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, 2009, and on any day thereafter to prepay Bonds due on or
after February 1, 2010. 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
SJB- 177567vl
HP110-61
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 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 contained on the reverse hereof 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.
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 OF HOPKINS, MINNESOTA
(Facsimile) (Facsimile)
City Manager Mayor
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
By
Authorized Representative
SJB-177567vl
HPll0-61
[Reverse of the Bond]
This Bond is one of an issue in the aggregate principal amount of $2,060,000 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 March 21,2000 (the Resolution), for the
purpose of providing money to aid in financing various improvements to the water system of the City,
pursuant to and in full conformity with the home role charter of the City and the Constitution and laws
of the State of Miimesota, including Minnesota Statutes, Section d/Id.075 and Chapter 475 and the
principal hereof and interest hereon are payable primarily from the net revenues of the water system of
the City in a special debt service fund of the City, 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 net revenues 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.
IT IS 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 water plant and system free from
competition by other like municipal utilities; that adequate insurance on said plant and 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 Water Fund, into which it will pay all of the
gross revenues from the water system; that it will also create and maintain a General Obligation Water
Revenue Bonds, Series 2000A Debt Service Fund, into which it will pay, out of the net revenues from
the water system a sum sufficient to pay principal hereof and interest thereon when due; and that it will
provide, by ad valorem tax levies, for any deficiency in required net water system revenues.
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 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 SUlTendered 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.
SJB- 177567vl
HP110-61
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts,
conditions and things required by the home role 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 UNIF GIF-F MIN ACT Custodian
in common (Cust) (Minor)
TEN ENT -- as tenants under Uniforrn Gifts or
by entireties Transfers to Minors
JT TEN -- as joint tenants with
fight of survivorship and Act ............
not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
SJB-177567v 1
HP110-61
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 determined by the Registrar in addition to, or in substitution ibr,
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
SJB- 177567vl
HPll0-61
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 Retistration Registered Owner Officer of the Registrar
Cede & Co.
Federal ID #13-2555119
3.02. The City Clerk will obtain a copy of the proposed approving legal opinion of Kennedy
& Graven, Chartered, Minneapolis, Minnesota, which will be complete except as to dating thereof and
will cause the opinion to be printed on or accompany each Bond.
Section 4. Payment; Security; Pledges and Covenants.
4.01. (a) The City will create and continue to operate its Water Fund to which will be
credited all gross revenues of the water system and out of which will be paid all normal and
reasonable expenses of current operations of the water system. Any balance therein are deemed
net revenues and will be transferred, from time to time, to a General Obligation Water Revenue
Bonds, Series 2000A Debt Service Fund (Debt Service Fund) hereby created in the Water
Fund, which fund will be used only to pay principal of and interest on the Bonds and any other
bonds similarly authorized. There will always be retained in the Debt Service Fund a sufficient
amount to pay principal of and interest on all the Bonds described in Section 1.01, and the City
Finance Director must report any current or anticipated deficiency in the Debt Service Fund to
the City Council. There is appropriated to the Debt Service Fund (i) capitalized interest
financed from Bond proceeds, if any, (ii) any amount over the minimum purchase price of the
Bonds paid by the Purchaser, and (iii) the accmed interest paid by the Purchaser upon closing
and delivery of the Bonds.
(b) The proceeds of the Bonds, less the appropriations made in paragraph (a),
together with any other funds appropriated during the construction of the project financed by
the Bonds will be deposited in a separate construction fund to be used solely to defray the
Project Costs. When all Project Costs are paid, the construction fund is to be closed and any
balance therein is to be deposited in the Debt Service Fund.
4.02. 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 City will continue to maintain and efficiently operate the water system as
public utilities and conveniences free from competition of other like municipal utilities and will
SJB-177567vl
HP110-61
cause all revenues therefrom to be deposited in bank accounts and credited to the water system
accounts 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 Debt Service Fund as a separate account in the
Water Fund and will cause money to be credited thereto from time to time, out of net revenues
from the water plant and system in sums sufficient to pay principal of and interest on the 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 as to all transactions relating to the water system and which will be open to inspection
and copying by any bondholder, or the bondholder's agent or attorney, at any reasonable time,
and it will fumish 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 water 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 the water system to be deposited in a
bank whose deposits are guaranteed under the Federal Deposit Insurance Law.
(e) The Council will keep the water system insured at all times 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.
(f) The City and each and all of its officers will punctually perform all duties with
reference to the water system as required by law.
(g) The City will impose and collect charges of the nature authorized by Minnesota
Statutes, Section 444,.075 at the times and in the amounts required to produce, net revenues
adequate to pay all principal and interest when due on the Bonds and to create and maintain
such reserves securing said payments as may be provided in this resolution.
(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.
4.03. It is hereby determined that the estimated collection of net revenues for the payment of
principal and interest on the Bonds will produce 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.
SJB-177567vl
HP110-61
4.03, The City Clerk is authorized and directed to file a certified copy of this resolution with
the Taxpayer Services Division Manager of Hennepin County and to obtain the certificate required by
Minnesota Statutes, Section 475.63.
Section 5. Authentication of Transcript.
5.01. The officers of the City are authorized and directed to prepare and furnish to the
Purchaser and to the attorneys approving the 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, City Manager and City Finance Director 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 & 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 apphcable to the Bonds.
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 2000) exceed the small-issuer exception amount of $5,000,000.
SJB- 177567vl
HP110-61
(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 fmther 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 265Co)(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 2000 will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar
year 2000 have been designated for purposes of Section 265(b)(3) of the Code.
6.05. The City will use its best efforts to comply with any federal procedural requirements
which may apply in order to effectuate the designations made by this section.
Section 7. Book-Entry System; Limited Obligation of City_.
7.01. The Bonds will be initially issued in the form of a separate single typewritten orprinted
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
SJB-177567vl
HP110-61
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 phncipal, premium and interest with respect to such Bond, for the
purpose of registering transfers with respect to such Bond, 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 Representation letter with respect to the Bond
Registrar and Paying Agent, respectively, to be complied with at all times.
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 certificate, 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 owner 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 all notices with respect to the
SJB- 177567vl
HP110-61
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, fa/lure 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 certa/n 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.
Passed and adopted tiffs 21 day of March, 2000.
CITY OF HOPKINS, IvlINNESOTA
City Manager
SJB- 177567vl
HPll0-61
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN ) SS.
)
CITY OF HOPKINS )
I, the undersigned, being the duly qualified and acting Clerk. of the City of Hopkins, Hennepin
County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract
of minutes of a regular meeting of the City Council of the City held on March 21, 2000 with the
original minutes on file in my office and the extract is a full, true and correct copy of the minutes
insofar as they relate to the issuance and sale of $2,060,000 General Obligation Water Revenue Bonds,
Series 2000A of the City.
WITNESS My hand officially as such Clerk and the corporate seal of the City this 22nd day
of March, 2000.
(SEAL)
SJB- 177567vi
HPI 10-61