99-8695r
55
RESOLUTION NO. 8695
A RESOLUTION AWARDING THE SALE OF $1,660,000
GROSS REVENUE ICE ARENA
BONDS, SERIES 1999;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTIONAND.DELIVERY;
. AND PROVIDING FOR THEIR PAYMENT .
BE IT RESOLVED By the City Council of the City of Richfield, Hennepin County,
Minnesota (City) as follows:
Section 1. Sale of Bonds.
1.01. It is determined that it is desirable to acquire, construct and equip a second
ice sheet at the City's Ice Arena as part of the recreation program of the City (Project).
1.02. Minnesota Statutes, Section 471.191 (Act) authorizes the City to: a) issue
and sell revenue bonds to provide funds for the acquisition of the Project, which bonds may
be secured by a pledge of all income and revenues derived from the Project as a first
charge on the gross revenues thereof, and b) provide in its budget each year for any
anticipated deficiency in the revenues available for operation and maintenance of the
Project.
.'
1.03. The City Council has determined that the estimated gross revenues to be
derived from the operation of the Project during the term of the bonds authorized by this
Resolution will be sufficient to pay principal and interest when due on such bonds, to
maintain the required reserve therefor, and to pay the annual costs of operation and
maintenance of the Project.
1.04. The proposed financing of the Project is as follows:
Sources:
Par Amount of Bonds
City Funds for Reserve Account
City Contribution
Mighty Ducks Grant
Total Sources
$1,660,000
140,000
1,200,000
125.000
$3,125,000
Uses:
Project Costs
Reserve Account
Discount Allowance
Finance Related Expenses
Capitalized Interest
Total Uses
$2,889,741
140,000
29,050
30,000
36.209
$3,125,000
1.05. The City has received a proposal from Cronin & Company, Inc. (Purchaser)
to purchase the City's bonds to finance the Project.
Resolution No. 8695
-2-
1.06. The City will, therefore, issue and sell its $1,660,000 Gross Revenue Ice
Arena Bonds, Series 199 (Bonds) to finance all or a portion of the costs of the Project.
1.07. The Bonds bear interest as follows:
Year of
Maturitv
Interest
.. ,',;.Rate..
,-. " '- F....
...; ,',,", .", '- ~-'
Year of
Matur.itv .,'
Interest.
Rate
'-,t-f r.' :r .~.r-','". ,; :';"--'>.-;-l'::.\',;'.:~.:::'-':-:'-;L"~-'."::!,'" ""t~ t~,..l.(:H.. 'r~~ .......1~
2001
2002
2003
2004
2005
4.60%
4.60
4.60
4.60
4.60
2006
2007
2008
2009
2010
4.60%
4.60
4.70
4.80
4.90
Term Bonds due February 1,2012 at 5.00%
Term Bonds due February 1, 2014 at 5.10%
Term Bonds due February 1, 2017 at 5.20%
Term Bonds due February 1, 2020 at 5.25%
True interest cost: 5.2638%
1.08. The sum of $6.70 being the amount proposed by the Purchaser in excess of
$1,630,950 will be credited to the Revenue Bond Account hereinafter created. The City
Finance Manager is directed to deposit 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 Acting City Manager are directed to
execute a contract with the Purchaser on behalf of the City.
1.09. The City will forthwith issue and sell the Bonds pursuant to Minnesota
Statutes, Sections 471.191 and 475.58, Subdivision 3 (collectively, the Act) in the total
principal amount of $1,660,000, originally dated May 1, 1999, 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
2001 $50,000 2006 $65,000
2002 55,000 2007 65,000
2003 55,000 2008 70,000
2004 55,000 2009 75,000
2005 60,000 2010 75,000
Term Bonds due February 1,2012 in the aggregate principal amount of $165,000
Term Bonds due February 1,2014 in the aggregate principal amount of $185,000
Term Bonds due February 1,2017 in the aggregate principal amount of $315,000
Term Bonds due February 1, 2020 in the aggregate principal amount of $370,000
Resolution No. 8695
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1.10. Ootional Redemotion. 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.
1.11. Mandatory Redemotion. The Term Bonds are subject to mandatory
redemption on February 1, of the following years in the following amounts:
Year Amount
2012 Term Bonds
2011 $80,000
2012 (maturity) 85,000
2014 Term Bonds
2013 $90,000
2014 (maturity) 95,000
2017 Term Bonds
2015 $100,000 --
2016 105,000
2017 (maturity) 110,000
2020 Term Bonds
2018 $115,000
2019 125,000
2020 (maturity) 130,000
The specific Term Bonds to be redeemed will be selected by lot by the Registrar. All
prepayments will be at a price of par plus accrued interest.
Section 2. Reaistration and Payment.
2.01. Reaistered 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 February 1, 2000, 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 that day is a business day.
Resolution No. 8695
-4-
2.03. Reaistration. 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) Reaister. The Registrar must keep. at its ,principal corporate trust
office, ,a .bond ,.register jn,}which.Ah~ R~giatr:ar:. proYides.forLthe, registration of
, 'ownership of BondSi and the registratiort:. of ttansfeFS<!andexchanges of-iBonds
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) Exchanae 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 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 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 Charaes. 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.
Resolution No. 8695
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(h) Mutilated. Lost. "Stolen OL Destroved 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 inconnectiori 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 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.
2.04. Appointment of Initial Reaistrar. The City appoints Firstar Bank of Minnesota,
N.A., St. Paul, 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 Manager must transmit to the
Registrar monies sufficient for the payment of all principal and interest then due.
Resolution No. 8695
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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 Acting 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 appears on the :Bonds ceases to be such officer before the delivery of any
Bond, that signature or.. facsimile.. will, nevertheless. be. ,valid and ~ufficient. for all purposes,
the same as if the . offiCer' had remained .in: offide 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 Clerk 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.
Section 3. Form of Bond.
3.01. The Bonds will be printed in substantially the following form:
[F ace of the Bond]
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF RICHFIELD
GROSS REVENUE ICE ARENA
BOND, SERIES 1999
Rate
Date of
Oriainallssue
Maturitv
May 1,1999
No.
Registered Owner: Cede & Co.
CUSIP
$
Resolution No. 8695
-7-
The City of Richfield, Minnesota, a duly organized and existing municipal corpora-
tion in Hennepin County, Minnespt(l (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 February 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 Firstar Bank of Milwaukee,
N.A., Milwaukee, Wisconsin, as agent for Firstar Bank of Minnesota, N.A., St. Paul,
Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or
its designated successor under the Resolution described herein.
The City may elect on February 1, 2009, and on any date thereafter, to prepay
Bonds of this issue maturing 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 shall
determine. If less than all Bonds of a maturity are called for redemption, the City will notify
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.
All prepayments shall be at a price of par plus accrued interest.
The Term Bonds are subject to mandatory redemption on February 1, of the
following years in the following amounts:
Year
Amount
2012 Term Bonds
2011
2012 (maturity)
$80,000
85,000
2014 Term Bonds
2013
2014 (maturity)
$90,000
95,000
2017 Term Bonds
2015
2016
2017 (maturity)
$100,000
105,000
110,000
2020 Term Bonds
2018
2019
2020 (maturity)
$115,000
125,000
130,000
Additional provisions of this Bond contained on the reverse hereof have the same
effect as though fully set forth in this place.
Resolution No. 8695
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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 Richfield, Hennepin County, Minnesota, by its
City Council, has caused this Bond to be executed on: its behalf by the. facsimile signatures
of the Mayor and Ading City Manager'and :has. caused lthis Sonata'be dated as 'of the date
set forth below.
Dated:
CITY OF RICHFIELD, MINNESOTA
(Facsimile)
Acting City Manager
(Facsimile)
Mayor
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
FIRSTAR BANK OF MINNESOTA, N.A.
By
Authorized Representative
[Reverse of the Bond]
This Bond is one of an issue in the aggregate principal amount of $1,660,000 all of
like original issue date and tenor, except as to number, maturity date, redemption privilege,
and interest rate, all issued pursuant to resolutions adopted by the City Council on April 12,
1999 (Resolution), for the purpose of providing money to aid in financing various
improvements to certain recreational facilities of the City, pursuant to and in full conformity
with. the Constitution and laws of the State of Minnesota, including Minnesota Statutes,
Section 471.191 and Chapter 475 (collectively, the Act), and the City's home rule charter.
The principal hereof and interest hereon are payable primarily from the revenues of such
recreational facilities in the Ice Arena Recreation 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 Bonds of this series are issued only as fully registered Bonds in
denominations of $5,000 or any integral multiple thereof of single maturities.
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 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.
Resolution No. 8695
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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 payrqeQtand for .all other purposes, and neither the City nor
the Bond Registrar shall be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts,
conditions and things required by the Constitution and laws of the State of Minnesota and
the City's home rule charter 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
special 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,
shall 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
JT TEN --
as joint tenants with
right of survivorship and
not as tenants in common
Act. . . . .
(State)
Additional abbreviations may also be used though not in the above list.
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.
Resolution No. 8695
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Signature Guaranteed:
Signature(s) must be guaranteed by a financial institution that is a member of the
Securities Transfer AgentMedaJlion Program,(~ISTAMP!~), tI:re. Stock Exchange. Medallion
Program ("SEM?"), the' New York StoCk 'Excharige~"1hc. 'Medallion" Signatures Program
("MSP") or other such "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
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. Funds. Accounts. Pledge of Revenues.
4.01. F or the convenience and proper administration of the moneys to be borrowed
and repaid on the Bonds, and to make adequate and specific security to the purchasers
and holders of the Bonds from time to time, there is hereby created and continued in the
Recreation Fund a separate special fund of the City to be known as the Ice Arena
Recreation Fund, which fund will be continued and maintained as a permanent fund of the
City until all the Bonds are paid. All income and receipts of whatever nature from the
operation of the Project will be credited to the Ice Arena Recreation Fund. The City will
establish and maintain financial records of the receipts and disbursements of the Project in
accordance with this resolution. In those records there will be continued and maintained
separate accounts of the Ice Arena Recreation Fund as follows:
Resolution No. 8695 -11-
(a) A Capital Expenditure Account, into which Account will be paid:
(i) the .. proceeds of the sale of the Bonds less (i) the
amount of proceeds in excess of $1,630,950, and (ii) the sum of
$33,296.98 representing capitalized interest which amounts will be
deposited in the Revenue Bond Account; and
(ii) the sum of $1,200,000 representing an equity
contribution by the City; and
(Hi) the proceeds of grants from the State of Minnesota for
the development of youth ice athletic facilities in the Project.
From the Capital Expenditure Account will be paid all costs of the Project, including
but not limited to, construction costs, legal, engineering and financing expenses but
excluding capitalized interest. Money in the Capital Expenditure Account will be
disbursed only upon orders duly issued after certification that the purpose for which
the payment is to be made is within the scope of the work contemplated by this
Resolution, that the work done or the materials furnished are in accordance with the
contract therefor, (or that such work is, or that such materials are suitable for the
purposes of the Project, if such payments are not covered by an express contract)
and that the amount of such payment is in accordance with such contract, or if there
is no contract, that the amount thereof is reasonable. Nothing in this clause is to be
construed to prohibit payment without such a certification of expenses necessarily
incident to the issuance and sale of the Bonds. The Project must be constructed
and placed in operation in accordance with the approved plans and specifications,
and no deviation therefrom of a substantial nature may be made. When the Acting
City Manager, upon recommendation of the Project architect, certifies that the
construction of the entire Project has been completed and paid for, any balance
remaining in the Capital Expenditure Account must be transferred to the Revenue
Bond Account hereinafter created and the Capital Expenditure Account will be
closed.
(b) An Operation and Maintenance Account, from which Account may be
paid all. but only, expenses of operation and maintenance of the Project. Those
expenses include the reasonable and necessary costs of operation, maintenance,
insurance. salaries, wages, cost of materials and supplies, and all other items which
by accepted accounting practices constitute normal, reasonable costs of operation
and maintenance. but excluding any allowance for depreciation. The City
covenants and agrees that it will provide in the City budget each year an amount
sufficient to meet any anticipated deficiency in the revenues available for operation
and maintenance. and the City hereby pledges and agrees to provide from other
funds and ad valorem tax levies, if necessary, sufficient sums to pay all current
costs of operation. maintenance and administration of the Project. Money in the
Operation and Maintenance Account may be invested in the manner permitted by
law for the investment of municipal funds, but such instruments must mature not
later than the date on which it is anticipated the proceeds thereof will be required for
disbursement from the Operation and Maintenance Account. Investment earnings
may be transferred. at the option of the City, to the Revenue Bond Account or
retained in the Operation and Maintenance Account.
Resolution No. 8695
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(c) A Revenue Bond Account for payment of the principal of and interest
on the Bonds into which will be deposited accrued interest on the Bonds from their
date of issue until date of delivery, together with (i) any amount in excess of
$1,630,950 and (ii) the sum of $33,296.98 representing capitalized interest from the
proceeds of the sale of the Bonds. There will be credited monthly to the Revenue
Bond Account, commencing June 1, 1999, from the gross revenues of the Project,
1/12th of the amount of interest and principal due on the Bonds in the next ensuing
12.i.month period-(Debt Service Requiremelif'). Any gross revenues in excess of the
Debt Service Requirement will be transferred first to the Reserve Account to
maintain the Reserve Requirement, and second to the Operation and Maintenance
Account. The Revenue Bond Account will be maintained as herein provided until all
the Bonds have been paid and retired. If there are insufficient funds in the Revenue
Bond Account to pay principal and interest, or either of them, when due, funds to
make such payment must be transferred to the Revenue Bond Account for that
purpose from the Operation and Maintenance Account. In the event of a deficiency
in the Debt Service Requirement, the City covenants and agrees to provide from
other sources funds necessary to pay the principal of and interest on the Bonds.
Money in the Revenue Bond Account may be invested in the manner provided by
law for the investment of municipal funds, but such investments may not mature
later than the date on which it is anticipated the proceeds thereof will be required for
disbursement.
(d) A Reserve Account, into which the sum of $138,387.50 is to be paid
from the funds available to the City. This initial balance, being equal to the
maximum amount of principal and interest on the Bonds in any year is the Reserve
Requirement. Money in the Reserve Account may be used only to pay principal of
and interest on the Bonds or additional parity bonds. Investment earnings in the
Reserve Account may be transferred to the Revenue Bond Account. Moneys in the
Reserve Account may not be transferred to the general fund of the City or used for
any other purpose until all Bonds have been paid or sufficient sums for payment of
principal and interest on the Bonds has been deposited with the Bond Registrar.
The funds in the Reserve Account may be invested only in securities authorized by
State law for investment of municipal funds. It is determined that the Reserve
Account is reasonably required in order to market the Bonds and provide adequate
security therefor. Moneys in the Reserve Account may be used only for payment of
debt service on the Bonds or additional parity bonds, except that such moneys may
be used for payment of a final installment maturity, or for such payment if the Bonds
are defeased. If additional parity bonds are issued the Reserve Account must be
increased so that its ratio to the total amount of outstanding bonds is equal to its
ratio to the Bonds at the date of delivery of the Bonds. Money in the Reserve
Account may be used only (i) for transfer to the Revenue Bond Account and (ii) for
the redemption and prepayment of Bonds.
4.02. The City may issue additional bonds to complete or improve the Project or
refund the Bonds either (i) pursuant to the Act or (ii) pursuant to any law authorizing the
issuance of such obligations. Any such additional obligations payable solely from the
revenues of the Project may be issued on a parity with the Bonds. Junior or subordinate
bonds secured by the revenues of the Project may be issued at any time by the City.
Resolution No. 8695
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4.03. Money in the funds and accounts created by this Resolution will be kept
separate from other municipal funds in accordance with the City's accounting and
investment policies, and depositeg, 9111y in a (bank or banks which are members of the
Federal Deposit Insurance Corporation (FDIC). Deposits which cause the aggregate
deposits of the City in anyone bank to be in excess of the amount insured by FDIC must
be continuously secured in the manner provided by law for the investment of municipal
funds. Income derived from investments in the funds and accounts may at any time be
liquidated and the proceeds thereof applied for the purpose or purposes for which the
respective Account was created.
4.04. Subject to the provisions of Section 4.02, the Bonds are and will be a first
charge and lien on the gross revenues of the Project, the Ice Arena and of all additions,
improvements and extensions thereto.
4.05. There is appropriated to the Capital Expenditure Account from the general
fund of the City the sum of $1 ,200,000. There is appropriated to the Reserve Account from
the general fund of the City the sum of $138,387.50.
Section 5. Covenants.
5.01. For the protection of the holders of the Bonds, the City covenants and agrees
with the holders of the Bonds from time to time as follows:
5.02. It will complete the Project and will cause it to be constructed and completed
free from all liens in accordance with plans and specifications heretofore approved, with the
proceeds of the Bonds supplemented with other funds if necessary.
5.03. It will at all times provide for and insure the adequate maintenance and
efficient operation of the Project as part of its program of public recreation. It will from time
to time make all needed and proper repairs, replacements, additions and betterments of
the Project so that it may at all times be operated properly and advantageously, and
whenever any equipment is worn out, destroyed or otherwise become insufficient for its
intended use, the equipment will be promptly replaced or repaired so that the value and
efficiency of the Project will be at all times fully maintained and the revenues
unencumbered by reason thereof. The City may replace obsolete, worn out, or destroyed
equipment with different kinds of equipment recognizing technological and operational
changes, so long as the operation of the Project for its intended purpose and the revenues
therefrom are not impaired.
5.04. In order to insure the efficient and economical operation of the Project and
the proper maintenance thereof, the City will provide for and insure the employment of
experienced personnel to operate and maintain the same. The compensation of such
personnel is deemed an operating expense.
5.05. Except for special promotional purposes to encourage use of the Project, the
City will permit no free use by any person or group. The fees for all users of the Project by
the residents of the City and all other customers will be reasonable and just, taking into
account the cost and value of the facilities, the cost of maintaining and operating and the
proper and necessary allowances depreciation and the amounts required for the payment
of principal of and interest on the Bonds payable from the revenues pledged therefor.
Resolution No. 8695
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5.06. The City will annually, prior to July 1, estimate the gross revenues of the
Project available for operation and maintenance of the Project in the next ensuing calendar
year. If that estimate shows a deficiency in gross revenues available for operation and
maintenance of the Project in that ensuing year the City will: (i) adjust the rates and
charges for the use of the Project to cover the deficiency, (ii) provide for transfer of funds
from other available sources to cover the estimated deficiency,.-(iii) levy; within the
limitations of applicable law, the taxes necessary tofund-any'estimateddeficiency in the
ensuing year, or (iv) any combination of the actions described in subparagraphs (i), (ii) and
(iii), provided however, that the City may, but the City will not be required to, fund such
deficiency in any year beyond the amount budgeted for such year.
It is the intention of the City Council to use all the security devices permitted by
applicable law and to make and carry out all pledges and covenants permitted by the Act
for the prompt and full payment of principal and interest on the Bonds.
5.07. The City will establish, maintain and collect such fees and charges that are
estimated to produce revenues sufficient to pay the cost of operation and maintenance of
the Project and to pay the interest on and principal of the Bonds as and when they become
due. Fees and charges may not be reduced if the proposed rate reduction will adversely
affect the ability of the City to meet all requirements of this Resolution. The fees and
charges will be increased from time to time whenever necessary to carry out the
obligations undertaken by this Resolution.
5.08. The City will provide for and procure and keep in force insurance on the
Project of a kind and in an amount which would normally be carried by private companies
in a like business, including public liability insurance, with an insurer or insurers in good
standing in the State of Minnesota; and it will provide for the keeping in full force and effect
fiduciary bonds on employees in charge of the Project. In the event of any loss, the
proceeds from such insurance (including liability insurance) or bonds will be used to make
good such loss or to repair or restore the Project. Insurance premiums are to be paid as a
cost of operation of the Project.
Section 6. Authentication of Transcript.
6.01. 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, may be deemed representations of the
City as to the facts stated therein.
6.02. The Mayor, Actomg City Manager and Finance 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.
Resolution No. 8695 -15-
Section 7. Tax Covenant.
7.01. 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.
7.02. 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.
7.03. 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.
7.04. 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:
(a) the Bonds are not "private activity bonds" as defined in Section 141 of
the Code;
(b) the City hereby 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 any 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
1999 will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during
calendar year 1999 have been designated for purposes of Section 265(b)(3) of the
Code.
7.05. 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 8. Book-Entrv System: Limited Obliaation of City.
Resolution No. 8695
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8.01. 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 (OTC).
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.
8.02. 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 (Hi) 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 Acting 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 Acting City
Manager will promptly deliver a copy of the same to the Bond Registrar and Paying Agent.
8.03. 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.
Resolution No. 8695
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8.04. Transfers Outside Book-Entry System. In the event the City, by resolution of
the City Council, determines that .itis jnthe best interests of the persons having beneficial
interests in the Bonds that they be abie 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.
8.05. 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 9. Continuina Disclosure.
9.01. 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.
9.02. "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.
Adopted by the City Council of the City of Richfield, Minnesota this 12th day of
April, 1999. .~~.
J?;;;;;;~
Martin J. Kirs Mayor
ATTEST:
1~P~
Thomas P. Ferber City Clerk