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12-01-08 agendaS - CITY OF RICHFIELD, MINNESOTA SPECIAL CITY COUNCIL MEETING MONDAY, DECEMBER 1, 2008 RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 6:30 P.M. AGENDA Call to order Roll call 1. Consideration the attached resolution awarding the sale of $9,480,000 General Obligation (G.O.) Capital Improvement Bonds, Series 2008A (tabled from November 25, 2008) • Staff Report No. 287 Notes: 2. Consideration of resolution awarding sale of $515,000 General Obligation Capital Notes, Series 2008B (tabled from November 25, 2008) Staff Report No. 288 Notes: Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. u ~ .~ N •- L ~ •- 0 ~ ~ V •- ~ V 0 U ~ ~ ~.~ N O c -::::~ ?i.... 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SPECIAL CITY COUNCIL MEETING DECEMBER 1, 2008 REPORT PREPARED BY: DEPARTMENT DIRECTOR REVIEW: CHRIS REGIS, FINANCE MANAGER NAME, TITLE NAME, r~ U REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration the attached resolution awarding the sale of $9,480,000 General Obligation G.O. Ca ital Im rovement Bonds, Series 2008A. I. RECOMMENDED ACTION: By Motion: Approval of the attached resolution awarding the sale of $9,480,000 General Obligation Capital Improvement Bonds, Series 2008A, Fixing their form and specifications; Directing. their execution and delive ;and rovidin their a ment. II. BACKGROUND • On October 28, 2008, the City Council adopted a resolution providing for the sale of General Obligation Capital Improvement Bonds, Series 2008A, to provide funding for the construction of a new Police/Fire/City Hall Facility. • Bids on the G.O. Capital Improvement Bonds are due in the offices of Ehlers & Associates, Inc. on Monday December 1, 2008. A representative from Ehlers & Associates, Inc. will be at the City Council meeting to recommend the successful bidder and review attached documents, and provide information that is absent from the resolution and available only after the bidding on the certificates has closed. • Following Ehlers & Associates, Inc. recommendation it would be appropriate for the City Council to award the bond sale to the qualified buyer and undertake other related actions as necessary as delineated in the approving resolution. The closing on the bonds is scheduled for December 23, 2008. • In order to issue bank-qualified bonds, which generally provide more favorable interest rates, the sale of the 2008 series of bonds and 2009 series of bonds must be separated by 15 days. By separating the sales by 15 days, both series of bonds will be treated as separate bond issues for tax purposes. Therefore, the 2008 series sale is being brought before Council for approval on December 1, 2008 and the 2009 series, in order to comply with the legal timing requirements, will be brought before Council at a special City Council meeting on December 17, 2008. III. BASIS OF RECOMMENDATION A. POLICY • The City Council approved the call for-sale of G.O. Capital Improvement Bonds, Series 2008A at the October 28, 2008 City Council meeting. • The new Police/Fire/City Hall Facility is included in the City's 2008 Capital Improvement Budget and 2009-2012 Capital Improvement Plan. . • At tt~e June 24, 2008, the City Council approved the five-year Capital Improvement Budget and Plan prepared in compliance with Minnesota Statutes 475.521. • Preliminary approval was also granted to issue capital improvement bonds for the new Police/Fire/City Hall Facility at the June 24, 2008 City Council meeting. B. CxrrICAL ISSUES • The issuance of the G.O. Capital Improvement Bonds is an important piece of the financing of the new Police/Fire/City Hall Facility. • In order to meet the legal timing requirements for the sale and issuance of the 2009A G.O. Capital Improvement Bonds a special City Council meeting will be necessary on December 17, 2008 at 6:00 p.m. C. FINANCIAL • The estimated total cost of the new Police/Fire/City Hall is estimated to be $22,250,000. • Funding for the project will be a combination of internal sources and the issuance of the capital improvement bonds. Sources and uses of the project are as follows: • Sources Bond Proceeds $13,650,000 PERA Pension Refund 7,600,000 Cash on Hand 1,000,000 Total $22,250,000 Uses Construction Costs $21,650,000 Site Acquisition 600,000 Total $22,250,000 • The total par amount of the bonds to be issued is $14,G30,000. The Series 2008A Bonds which are being considered for avvard of sale on November 25, 2008 have a par value of $9,480,000, while the 2009A Bonds which will be considered for award of sale on December 17, 2008 have a .par value of $4,550,000. • Net proceeds to be used for the project, after underwriter's discount, costs of issuance, and capitalized interest will .total $13,650,000 for both issues. • The estimated annual tax levy for both bond issues, has been structured to start at a lower amount in year one and then increase in years two and .three, and then level off to an average of $1,239,232 in years four through twenty. • Accordingly, the estimated annual increases in taxes due to the issuance of these bonds for a residential property valued at $250,000 will be approximately $48.57 in year one, an additional $25.62 in year two, and an additional $16.48 in year three for a total increase after year three of $90.67. D. LEGAL • Legal Counsel has been involved in the bond sale transactions as .bond counsel to the City. • The sale of the two series of bonds, 2008 and 2009, must be separated by a minimum of 15 days in order for the two -bonds to be considered IE;gally separate issues for tax purposes. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMEND?iTION~S~ • None. V. ATTACHMENTS • A Resolution Awarding the Sale of $9,480,000 General Obligation Capital Improvement Bonds, Series 2008A, fixing their form and specifications; directing their execution and delivery; and providing for their payment. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Rebecca Kurtz, Ehlers & Associates, Inc. • • Extract of Minutes of Meeting of the City Council of the City of Richfield, Hennepin County, Minnesota Pursuant to due call and notice thereof, a special meeting of the City Council of the City of Richfield, Minnesota, was duly held in the City Hall in said City on Monday, December 1, 2008, commencing at 7:00 P.M. The following members were present: and the following were absent: The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's General Obligation Capital Improvement Plan Bonds, ~; . Series 2008A, in the aggregate principal amount of $9,480,000. The City Manager presented a tabulation of the proposals that have been received in the manner specified in the Terms of Proposal for the Bonds. The proposals are as set forth in Exhibit A attached. After due consideration of the proposals. Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: U RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION CAPITAL IlVIPROVEMENT PLAN BONDS, SERIES 2008A, IN THE AGGREGATE PRINCIPAL AMOUNT OF $9,480,000; FIIONG THEIR FORM AND SPECIFICATIONS; DIRECTING THEIIZ .EXECUTION AND DELIVERY; AND PROVIDING FOR THEIIt PAYMENT BE IT RESOLVED By the City Council of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Back rground. 1.01. Statutory Authorization. The City is authorized by Minnesota Statutes, section 475.521 (the "Act"), to finance certain capital improvements under an approved capital improvement plan by the issuance of general obligation bonds of the City payable from ad valorem taxes. Capital improvements include acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, library, public safety facility and public works facilities (excluding light rail transit or any activity related to it, or a park, road, bridge, administrative building other than a city hall, or land for any of those activities). 1.02. Capital Improvement Plan Authorizing Issuance of Bonds. On June 24, 2008, the City held a public hearing with respect to a five-yeah capital improvement plan (the "Plan") and the issuance of bonds, in the maximum. principal amount of $22,000,000, to finance planned capital improvements, all in accordance with the Act. The Plan authorizes issuance of bonds to pay the cost of construction of a new Police/Fire/City Hall Facility (the "Project"). 1.03. No Petition for a Referendum Received. The City Council has determined that, within 30 days after the hearing, no petition for a referendum on issuance of bonds pursuant to the Plan was received by the City in accordance with the Act. 1.04. Estimated Total Cost of Capi±al Improvement. The City estimates that the total cost of the Project is at least $22,000,000, including capitalized interest, costs of issuance, and bond discount. The proceeds of the Bonds (hereinafter defined) in the amount of $9,480,000 will be expended as follows: Project Description & Designation Deposit to Project Construction Fund Deposit to Capitalized Interest Fund Costs of Issuance Underwriter's Compensation Total $9,220,460 86,040 55,000 118,500 $ 482 0 000 1.05. Determinations of the City in Compliance with the Act. As required by the Act, the City has determined that: . (i) the expected useful lire of the Project will be at least five years; and Total Cost 2. (ii) the amount of principal and interest due. in any year on all outstanding bonds issued by the City under the Act, including the Bonds, will not exceed 0.16 percent of the taxable market value of property in the City for taxes payable in 2008. 1.06. Issuance of the Bonds. It is necessary and expedient to the sound fmancial management of the affairs of the City to issue its General Obligation Capital Improvement Plan Bonds, Series 2008A (the "Bonds"), in the aggregate principal amount of $9,480,000, pursuant to the Act to provide financing for the Project. Section 2. Sale of Bonds. 2.01. Award to the Purchaser and Interest Rates. The proposal of (the "Purchaser") to purchase the Bonds of the City described in the Terms of Proposal thereof is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $ (par amount of $9,480,000.00, [plus original issue premium of $ ,] [less original issue discount of $ ,] less underwriter's discount of $ ), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate • 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year Interest Rate 2021 2022 2023 2024 ~' 2025 2026 2027 2028 2029 True interest cost: 2.02. Purchase Contract. The sum of $ ,being the amount proposed by the Purchaser in excess of $ ,shall be credited to the Debt Service Fund hereinafter created or deposited in the Construction Fund hereinafter created, as determined b;' the City Finance Manager in consultation with the City's financial advisor. The City Finance Manager is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 2.03. Terms and Principal Amounts of Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act to the Purchaser in the total principal amount of $9,480,000. The Bonds will be originally dated as of December 23, 2008,: 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 2011 2021 2012 2022 2013 2023 2014 2024 2015 2025 2016 2026 2017 2027 2018 2028 2019 2029 2020 2.04. Optional Redemktion. The City may elect on February 1, 2019, and on any day thereafter to prepay Bonds due on or after February 1, 2020. 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 th~;n select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. [2.05. Term Bonds. To be completed if Term Bonds are requested by the Purchaser.] Section 3. ~' Registration and Payment. 3.01. Re ig_stered 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. 3.02. 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, 2009, 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: 3.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) ~e_gister. 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 of Bonds entitled to be registered or transferred. (b) "Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered ownex• 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 4 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 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 will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Im~r~er 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 unauthc+rized. (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 Charges. The Registrar may impose a charge upon the owner thereof for a transfer of Bonds, sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer. (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 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. The Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is :not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the 5 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. 3.04. Appointment of Initial Re ig attar. The City appoints Wells Fargo Bank, N.A., Minneapolis, 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. 3.05. Execution. Authentication and Delivery. The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly execuuted by the manual signature of an authorized representative of the Registrar. Certificate's of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When .the Bonds have been so prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 3.06. 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. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 4. Form of Bond. 4.01. Execution of the Bonds. The Bond will be printed or typewritten in substantially the following form: (The remainder of this page. is intentionally left blank.) .J 6 No. R- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF RICHFIELD [Form of Bond] GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND SERIES 2008A Interest Rate Maturity February 1, 20. Registered Owner: Cede & Co. Date of Ori inalIssue December 23, 2008 CUSIl' The City of Richfield, Minnesota, a duly organized and existing municipal corporation in Iiennepin County, Minnesota (the "City"), acknowledges itself to be indebted .and for value received 1-iereby promises to pay to the Registered Owner specified above, or registered assigns, the principal sum of $ on the maturity date specified above, payable February 1 and August 1 in each year, commencing August 1, 2009, 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 mori~ey of the United States of America by check or draft by Wells Fargo Bank, N.A., Minneapolis, 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, 201.9, and on any day thereafter to prepay Bonds due on or after February 1, 2020. 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 this Bond as a "qualified tax-exempt obligation" 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. This Bond is one of an issue in the aggregate principal amount of $9,480,000 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 ors June 24, 2008, and December 1, 2008 (the "Resolutions"), for the purpose of providing money to defray the expenses incurred and to be incurred in making certain capital improvements, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota ~itatutes, section 475.521, and the principal hereof and interest hereon are payable from ad valorem taxes as set forth in the Resolutions to which 7 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 additional ad valorem taxes on all taxable property in the City in the event of any deficiency in taxes 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 the denominations of $5,000 or any integral multiple thereof of single maturities. As provided in the Resolutions and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered o~;rner 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 Registrar, duly executed by the registered owner or the owner's attorney. Upon such transfer the City will cause a new Bond to be issued in the name of the transferee or registered owner, of the same 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. The City and the 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 i.:he City nor the 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 imorder to make it a valid and binding general obligation of the City in accordance with itsr 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. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolutions until the Certificate of Authentication hereon has been executed by the 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 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: December 23, 2008 (Facsimile) Mayor CITY OF RICHFIELD, NIINNESOTA ~FacsimileZ City Manager 8 CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolutions mentioned within. WELLS FARGO BANK, N.A. By The following abbreviations, when used in ttie inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT Custodian (Gust) (Minor) TEN ENT -- as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. 9 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 fmancial institution that is a member of the Securities 'Transfer Agent Medallion Program ("STAMP"), the Stock I~xchange 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 for, STEMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will noteffect 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 10 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. Date of Registration Registered Owner Signature of Officer of Registrar [End of form of Bond] 4.02. Approving Le ag 1 Opinion. The City Manager 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 5. Pa~~ment; Securit~Pledges and Covenants. 5.01. Debt Service Fund. The Bonds are payable from the General Obligation Capital Improvement Plan Bonds, Series 2008A Debt Service Fund (the "Debt Service Fund") he:reby created, and the proceeds of the ad valorem taxes (the "Taxes") hereinafter levied are hereby 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 Manager will 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 the Taxes levied by this resolution, when collected. 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 paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 2.02, and (iii) the accrued interest paid by the Purchaser upon closing and delivery of the Bonds, if any. 5.02. Construction Fund. The proceeds of the Bonds, less the appropriations made in Section 5.01 hereof, together with any otl-ier funds appropriated for the Project and Taxes collected during the construction of the Project will be deposited in a separate construction fund (the "Construction Fund") to be used solely to defray expenses of the Project and the payment of principal and interest on the Bonds prior to the completion and payment of all costs of the Project. Any balance remaining in the Construction Fund after completion of the Project may be used to pay the cost in whole or in part of any other capital improvement instituted under the Act upon action by the City Council. When the Project is completed and the cost thereof paid, the Construction Fund is to be closed and subsequent collections of Taxes for the Project are to be deposited in the Debt Service Fund. 5.03. Pledge of Taxes. For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, to be spread upon the tax rolls and collec~ ed with and as part of other general taxes of the City. The tax -will be credited to the Debt Service Fund and will be in the years and amounts as shown in Exhibit B. 5.04. Certification to Taxpayer Services Division Manager as to Debt Service Fund Amount. It is determined that the estimated collection of the foregoing Taxes will produce at least five percent in excess of the amount needed to meet when due, the principal and interest payments on the Bonds. The tax levy herein provided will be irrepealable until all of the Bonds are paid, provided that at the time the City makes its annual tax levies the City Finance Manager may certify to the Taxpayer Services Division Manager of Cede & Co. Federal ID #13-2555119 11 Hennepin County the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible during such year by the amount so certified. 5.05. Certificate of Taxpayer Services Division Manager as to Registration. The City Manager is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager and to obtain the certificate required by Minnesota Statutes, Section 475.63. Section 6. Authentication of Transcript. 6.01. City Proceedings and Records. 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, maybe deemed representations of the City as to the facts stated therein. 6.02. (;ertification as to Official Statement. The Mayor, City Manager, and City 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 rriade therein as of the date of the Official Statement. 6.03. Payment of Costs of Issuance. 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 U.S. Trust Company, Minneapolis, Minnesota on the closing date for further distribution as directed by the City's financial advisor, Ehlers & Associates, Inc. Section ?. Tax Covenant. 7.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cai:se the interest on the Bonds to become subject to taxation tinder 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. Not Private Activi , Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 7.03, Qualified Tax-Exempt Obli atg ions. In order to qualify the Bonds as "qualified . tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: • (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; 12 (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 2008 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. 7.04. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 8. Book-Entry System; Limited Obligation of City. 8.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept. by the Registrar in the name of Cc;de & Co., as nominee for The Depository Trust Company, Mew 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 Registrar in the name of Cede & Co., as nominee of DTC. 8.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede ~& Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and o±her financial institutions from time to time for which DTC holds Bonds as securities depository (the "Participants") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any .other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar) of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, 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 Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co." will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket • Issuer Letter of Representations (the "Representation Letter") which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or 13 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 Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book-Entr~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 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 reslrect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be i:nade and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 9. Continuing_Disclosure. 9.01. City Compliance with Provisions of Continuins Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. 9.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 10. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accs•ued to the date of such deposit. n 14 Passed and adopted this 1st day of December, 2008. ITY OF RICHFIELD MINNESOTA C , Mayor City Manager Attest: City Clerk • 15 The motion for the adoption of the foregoing resolution -was duly seconded by Member ,and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • • 16 STATE OF MINNESOTA ) COUNTY OF HENNIPIN ) SS. • ) CITY OF RICHFIELD ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Richfield, Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a special meeting of the City Council of the City held on December 1, 2008, 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 the City's General Obligation Capital Improvement Plan Bonds, Series 2008A, in the aggregate principal amount of $9,480,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this day C] of December, 2008. City Clerk Richfield, Minnesota (SEAL) • STATE OF MINNESOTA • COUNTY OF HENNEPIN CERTIFICATE OF TAXPAYER SERVICES DIVISION MANAGER AS TO TAX LEVY AND REGISTRATION I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a resolution adopted by the` City Council of the City of Richfield, Minnesota (the "City"), on December 1, 2008, levying taxes for the payment of the City's General Obligation Capital Improvement Plan Bonds, Series 2008A, in the aggregate principal amount of $9,480,000, dated as of December 23, 2008, has been filed. in my office and said obligations have been registered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this day of December, 2008. (SEAL) Taxpayer Services Division Manager Hennepin County, Minnesota Deputy U • • • EX~IIBIT A Proposals A-1 . • EXHIBIT B Tax Levy Schedule Year* Tax Levy 2009 2010 2011 2012 2013 2014 2015 2016 • * Year tax levy collected. RC145-593 (JAE) 341977v2 c: 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 B-1 • AGENDA ITEM # 2 REPORT # 2SH ~~ STAFF REPORT SPECIAL- CITY COUNCIL MEETING DECEMBER 1, 2008 REPORT PREPARED BY: CHRIS REGIS, FINANCE MANAGER NAME, T[rr,~ DEPARTMENT DIltECTOR REVIEW: REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of the attached resolution awarding the sale of $515,000 General Obligation G.O. Ca ital Notes, Series 20086. I. RECOMMENDED ACTION: By Motion: Approval of the attached resolution awarding the sale of $515,000 G.O.. Capital Notes, Series 20086; Fixing their form and specifications; Directing their execution and delivery and providing for their aavment. II. BACKGROUND • At the October 28, 2008 City Council meeting, the .City Council approved a resolution calling for the sale of the G.O. Capital Notes, Series 20086 • Bids on the capital notes are due in the offices of Ehlers & Associates, Inc. on Monday December 1, 2008. A representative from Ehlers & Associates, Inc. will be at the City Council meeting to recommend the successful bidder and review attached documents, and provide information that is absent from the resolution and available only after the bidding on the capital notes has closed. • Following Ehlers & Associates, Inc. recommendation it would be appropriate for the City Council to award the bond sale to the qualified buyer and undertake other related actions as necessary as delineated in the approving resolution. The closing on the G.O.. Capital Notes is scheduled for December 23, 2008. • For the past several years the City has funded equipment purchases through its • General tax levy.-This was done to save the City the cost of issuing bonds. However, with the advent of state imposed levy limits this option is no longer available. Therefore, the use of capital notes is now part of the budget process and the funding of equipment purchases. • These capital notes are short-term borrowing supported by a separate tax levy outside of imposed levy limits. III.. BASIS OF RECOMMENDATION • A. POLICY • The issuance of ,Series 20086 Capital Notes is the third instance of capital notes for the City of Richfield. B. CRITICAL ISSUES • N/A C. FINANCIAL • The Capital Notes will be financed by tax levies in 2009 and 2010. • The tax levy amounts will be an estimated $287,117 in 2009 and $281,873 in 2010. Equipment to be purchased is as follows: Estimated Description Cost 1 -One Ton Truck $ 45,000 2 -Mowers 26,000 3 -.Skid Steer Loader 34,000 1 -One Ton Truck 47,000 1 -Brush Chipper 70,000 1 -Ice Resurfacer 115,000 4 -Mid-Size Sedans 80,000 1 -Sports Utility Vehicle 28,000 5 -Full-Size Police Squads 135,000 1 -Records Archival System Scanners 6,050 2 -Network Servers Fiber Optic Network Construction • Fundin Tax Levy G.O. Capital Notes Cash on Hand 11,980 104,000 Total $702,030 136,502 498,000 67,528 T otal 702,030 I '-' • LEGAL • Legal Counsel has been involved in the bond sale transactions as . bond counsel to the City. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • None. _ V. ATTACHMENTS • Resolution Providing for the Sale of $515,000 G.O. Capital Notes, Series 20086. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Rebecca Kurtz, Ehlers & Associates, Inc. l._J • Extract of Minutes of Meeting of the City Council of the City of Richfield, Hennepin County, Minnesota Pursuant to due call and notice thereof, a special meeting of the City Council of the City of Richfield, Minnesota, was duly held in the City Hall in said City on Tuesday, December 1, 2008, commencing at 7:00 P.M. The following members were present: and the following were absent: The lvlayor announced that the next order of business was consideration. of the proposals which had been received for the purchase of the City's General Obligation Capital Notes, Series 2008B, in the • aggregate principal amount of $515,000. The City Manager presented a tabulation of the proposals that had been received in the manner specified in the Terms of Proposal for the Notes.. The proposals are as set forth in Exhibit A attached. After due consideration of the proposals, Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: • RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION CAPITAL NOTES, SERIES 2008B, IN 'THE AGGREGATE PRINCIPAL AMOUNT OF $515,000; FIXING THEIR FORM AND SPECIFICATIONS; DIItECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYN~~ENT BE IT RESOLVED By the City Council of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Sale of Notes. 1.01. Authorization. It is hereby determined that: (a) the City is authorized by Minnesota Statutes, Chapter 475 and Sections 410.32 and 412.301 (collectively, the "Act"), to issue its general obligation capital notes on such terms and in such manner as the City determines to finance the purchase of items of capital equipment (the "Equipment"), subject to certain limitations contained in the Act; (b) the City will purchase and acquire various items of Equipment, which items and the estimated cost thereof, are listed on Exhibit B, attached hereto and made a part hereof; • (c) as required by the Act, (i) the expected useful life of each item of Equipment is or will be at least as long as the term of the Notes (hereinafter defined); and (ii) the principal amount of Notes to be issued in the year 2008 will not exceed 0.25 percent of the market value of taxable property in the City for the year 2008; (d) it is necessary and expedient to the sound financial management of the affairs of the City to issue its General Obligation Capital Notes, Series 2008B (the "Notes"), in the aggregate principal amount of $515,000, pursuant to the Act to provide financing for the Equipment. 1.02. Award to the Purchaser and Interest Rates. 'The proposal of (the "Purchaser") to purchase the Notes described in the Terms of Proposal thereof is found and determined to be a reasonable offer and is accepted, the proposal being to purchase the Notes at a price of $ ,plus accrued interest to date of delivery, if any, for Notes bearing interest as follows: Year Interest Rate 2010 Year Interest Rate 2011 True interest cost: 2 1.03. Purchase Contract. The sum of $ ,being the amount proposed by the Purchaser in excess of $ ,shall be credited to the Debt Service Fund hereinafter created or deposited in the Equipment Fund hereinafter created, as determined by the City Finance Manager in consultation with the City's financial advisor. 'The City Finance Manager is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Notes, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Notes. The City will forthwith issue and sell the Notes pursuant to the Act in the total principal amount of $515,000, originally dated December 23, 2008, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-l, upward, bearing interest as above set forth, and maturing serially on February 1 without option of prior payment in the years and amounts as follows: Year Amount Year Amount 2010 2011 Section 2. Registration and Payment. 2.01. Registered Form.. The Notes will be issued only in fully registered form. The interest thereon and, upon surrender of each Note, the principal amount thereof, is .payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment`~Dates. Each Note will be dated as of the last interest payment date preceding the date of authentication to which interest on the Note has been paid or made available for payment, unless (i) the date of ar~thentication is an interest payment date to which interest has been paid or made available for payment, in which case the Note 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 Note will be dated as of the date of original issue. The interest on the Notes is payable on February 1 and August 1 of each year, commencing August 1, 2009, to the registered owners of record thereof as of fne 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 note registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re ig'ster. The Registrar must keep at its principal corporate trust office a note register in which the Registrar provides for the registration of ownership of Notes and the registration of transfers and exchanges of Notes entitled to be registered, transferred or exchanged. (b) Transfer of Notes. Upon surrender for transfer of a Note 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 i:n writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes 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. 3 (c) Exchange of Notes. When Notes. are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Notes of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. . (d) Cancellation. Notes 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 Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the Note until the Registrar is satisfied that the endorsement on the Note or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (fl Persons Deemed Clwners. The City and the Registrar may treat the person in whose name a Note is registered in the note register as the absolute owner of the Note, whether the Note is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Note 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 Note to the extent of the sum. or sums so paid. (g) Taxes. Fees and Ciiar~es. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Notes 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 Notes. If a Note becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Note of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Note or in lieu of and in substitution for any Note 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 Note destroyed, stolen or lost, upor. filing with the Registrar of evidence satisfactory to it that the Note was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate note or indemnity in form, substance and amount satisfactory to it and a.s provided by law, in which both the City and the Registrar must be named as obligees. Notes 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 Note has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Note prior to payment. 2.04. Anuointment of Initial Registrar. The City appoints Wells Fargo Bank, N.A., Minneapolis, 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 e~f the Registrar with another corporation, if tYie resulting corporation is a bank or trust company authorized by law to conduct the resulting business, such 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 Notes in its possession to the successor Registrar and must deliver the note register to the successor Registrar. On or before each principal or interest due date, w7thout further order of this Council, the City Finance Manager must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. . 4 2.05. .Execution, Authentication and Delivery. The Notes will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that 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 Notes ceases to be such officer before the delivery of any Note, 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 Note will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and antil a certificate of authentication on the Note has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Notes need not be signed by the same representative. The executed certificate of authentication on a Note is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Notes have been so prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Notes. The City may elect to deliver in.lieu of printed definitive Notes one or more typewritten temporary Notes 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 note. Upon the execution and delivery of definitive Notes the temporary Notes will be exchanged therefor and cancelled. Section 3. Form of Note. 3.01. Execution of the Notes. The Notes mill be printed or typewritten in substantially the following form: (The remainder of this page is intentionally left blank.) • No. R- UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF RICHFIELD GENERAL OBLIGATION CAPITAL NOTE SERIES 2008B Date of Rate Maturity Original Issue CUSIl' February 1, 20_ December 23, 2008 Registered Owner: Cede & Co. The City of Richfield, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the "City"), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $_ on the maturity date specified above without option of prior payment, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing August 1, 2009, to the person in whose name this Note 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 Wells Fargo Bank, N.A., Minneapolis Minnesota, as 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 in evocably pledged. This Note will not be subject to optional redemption. The City Council has designated the issue of Notes of which this Note forms a part as "qualified tar.-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. This Note is one of an issue in the aggregate principal amount of $515,000 all of like original issue date and tenor, except as to number, maturity date, and interest rate, all issued pursuant to a resolution adopted by the City Council on December 1, 2008 (the "Resolution"), for the purpose of providing money to defray expenses incurred or to be incurred in purchasing various items of capital equipment, 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, Chapter 475 and Sections 410.32 and 412.301, and the principal hereof and interest hereon are payable primarily from ad valorem taxes, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The. full faith and credit of the City are irrevocably pledged for payment of this Note and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency, which taxes may be levied without limitation as to rate or amount. The Notes of this series are issued only as fully registered Notes in denominations of $5,000 or any integral multiple thereof of single maturities. '6 As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the City at the principal office of the 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 Registrar, duly executed by the registered owner or the owner's attorney; .and may also be surrendered in exchange for Notes of other authorized denominations. Upon such transfer or exchange the City will cause a new Note or Notes 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 Registrar may deem and treat the person in whose name this Note is registered as the absolute owner hereof, whether this Note is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the 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 o:f this Note 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 bf;en performed as so required, and that the issuance of this Note does not cause the indebtedness of the City to exceed any constitutional or charter limitation of indebtedness. This Note 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 Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Richfield, Minnesota, by its City Council, has caused this Note to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Note to be dated as of the date set forth below. Dated: December 23, 2008 CIT4' OF RICHFIELD, MINNESOTA (Facsimile) (Facsimile) Mayor City Manager CERTIFICATE OF AUTHENTICATION This is one of the Notes delivered pursuant to the Resolution mentioned within. WELLS FARGO BANK, N.A. By Authorized Representative The following abbreviations, when used in the inscription on the face of this Note, will be construed a;a though they were written out in full according to applicable laws or regulations: TEN COM~ -- as tenants in common TEN ENT -- as tenants by entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT Custodian (Gust) (Minor) under Uniforni Gifts or Transfers to Minors Act, State of 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 Note and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Note on the books kept for registration of the within Note, 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 Note in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution tY~at is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the 8. 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 for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Note unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Note is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Note has been registered on the books of the Registrar in the name of the person last noted below. Signature of Date of Registration Registered Owner Officer of Reig strar Cede & Co, Federal ID #13-2555119 [End of Form of Note] 3.02. Approving Le ag 1 Opinion. The City Manager is authorized and 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 Note. Section 4. Payment: Security: Pledges and Covenants. 4.01. Debt Service Fund. The Notes will be payable from the General Obligation Capital Notes, Series 2008B 'Debt Service Fund (the "Debt Service Fund") hereby created, and the proceeds of the ad valorem taxes Hereinafter levied are pledged to the Debt Service Fund. If a payment of principal or interest on the Notes becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the City Finance Manager will pay such principal or interest from the general fund of the City, and the general fund may be reimbursed for those advances out of the proceeds of the taxes levied by this resolution when collected. There is appropriated to the Debt Service Fund (i) all capitalized interest financed from Note proceeds, if any, (ii) any amount over the minimum purchase price of the Notes paid 9 by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03, and (iii) the accrued interest paid by the Purchaser upon closing and delivery of the Notes, if any. 4.02. Equipment Fund. The proceeds of the Notes, less the appropriations made in Section 4.01, together with any other funds appropriated for the purchase of Equipment will be deposited in a separate fund (the "Equipment Fund") to be used solely to defray expenses of the Equipment. When the Equipment is purchased and the cost thereof paid, the Equipment Fund is to be closed and any monies remaining therein shall be transf°rred to the Debt Service Fund. 4.03. Pledge of Taxes. For the purpose of paying the principal of and interest on the Notes, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property ir: the City, to be spread upon the tax rolls and collected with and as part of other general taxes of the City. The tax will be credited to the Debt Service Fund above provided and is in the years and amounts attached hereto as Exhibit C. 4.04. Certification to Taxpayer Services Division Manager as to Debt Service Fungi Amount. It is determined that the estimated collection of the foregoing taxes will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Notes. The tax levy herein provided is irrepeaJ.able until a1T of the Notes are paid, provided that at the time the City makes its annual tax levies, the City Finance Manager may certify to the Taxpayer Servi~~es Division Manager of Hennepin County the amount available in the Debt Service Fund to pay principal. and interest due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible during that year by the amount so certified. e~ 4.05. Taxpayer Services Division Manager's Certificate as to Registration. The City Manager is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager and to obtain the certificate required by Minnesota Statutes, Section 475.63. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Notes, certified copies of proceedings and records of the City relating to the Notes 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 Notes, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 5.02. Certification as to Official Statement. The Mayor, City Manager, and City 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 Notes 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. Payment of Costs of Issuance. The City authorizes the Purchaser to forward the amount of Note proceeds allocable to the payment of issuance expenses (other than amounts payable to Kennedy & Graven, Chartered, ass Bond Counsel) to U.S. Trust Company, Minneapolis, Minnesota on the closing date for further distribution as directed by the City's financial advisor, Ehlers & Associates, Inc. • 10 • Section 6. Tax Covenant. 6.01. Tax-Exempt Notes. The City covenants and agrees with the holders from time to time of the Notes 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 Notes 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 Notes. 6.02. Not Private Activi Bonds.. The City further covenants not to .use the proceeds of the Notes or to cause or permit them or any of them to be used, in such a manner as to cause the Notes to be "private activity bonds" within the meaning of Sections 103 and 141. through 150 of the Code.. 6.03. Oualified Tax-Exempt Obli atg ions. In order to qualify the Notes as "qualifi.ed 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 Notes are not '`private activity bonds" as defined in Section 141 of the Codc°; (b) the City designates the Notes 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 qualifed 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2008 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. 6.04. Procedural Requirements. The City will use its best efforts to comply with any. fedexal 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. DTC. The Notes will be initially issued in the form of a separate single typewritten or printed fully registered Note for each of the. maturities set forth in Section 1.04 hereof. Upon initial issuance, the ownership of each Note will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this section, all of the outstanding Notes will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 7.02. Participants. With respect to Notes registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Notes as securities depository (the "Participants") or to any other person on behalf of which a Participant holds an interest in the Notes, 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 Notes, (ii) the delivery to any Participant or a~.ny other person (other than a registered owner of Notes, as shown by the registration books kept by the 11 Registrar) of any notice with respect to the Notes, including any notice of redemption, or (iii) the payment • to any Participant or any other person, other than a registered owner of Notes, of any amount with respect to principal of, premium, if any, or interest on the Notes. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Note is registered in the registration books kept by the Registrar as the holder and absolute owner of such Note for the purpose of payment of principal, premium and interest with respect to such Note, for the purpose of registering transfers with respect to such Notes, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Notes only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Notes to the extent of the sum or sums so paid. No person other than a registered owner of Notes, as shown in the registration books kept by the Registrar, will receive a certificated Note evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter") which will govern payment of principal of, premium, if any, and interest on the Notes and notices with respect to the Notes. Any Paying Agent. or Registrar subsequently appointed by the City with respect to the Notes will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at ail times. `~ 7.04. Transfers Outside Book-Entr~ystem. In the event the City, by resolution of the City . Council, determines that it is in the best interests of the persons having beneficial interests in the Notes that they be able to obtain Note certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Note certificates. In such event the City will issue, transfer and exchange Note 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 Notes at any time by giving notice to the City and discharging its responsibilities -with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Note 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 Note 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 Note and all notices with respect to the Note 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. Cit~mpliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Notes; however, any Noteholder 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. 12 8.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and -City Manager and dated the date of issuance and delivery of the Notes, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 9. Defeasance. When all Notes and all interest thereon have been discharged as provided in this section, all pledges, covenants and ether rights granted by this resolution to the holders of the Notes will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Notes will remain in full force and effect. The City may discharge all Notes which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Note should .not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page is intentionally left blank.) • • ;,s 13 • Passed and adopted this 1st day of December, 2008. CITY OF RICHFIELD, MINNESOTA Mayor City Manager • • Attest: City Clerk 14 The motion for the adoption of the foregoing resolution was duly seconded by Member ,and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. n LJ • 15 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. ) CITY OF RICHFIELD ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Richfield, Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a special meeting of the City Council of the City held on December 1, 2008, 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 relat~a to the issuance and sale of the City's General Obligation Capital Notes, Series 2008B, in the aggregate principal amount of $515,000. WITNESS My hand officially as such City Clerk and the corpo~~ate seal of the City this day of December, 2008. • (SEAL) City Clerk Richfield, Minnesota • • STATE OF MINNESOTA CERTIFICATE OF TAXPAYER SERVICES DNISION MANAGER AS TO COUNTY OF HENNEPIN TAX LEVY AND REGISTRATION I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a certified copy of a resolution adopted by the governing body of the City of Richfield Minnesota (the "City), on December 1, 2008, levying taxes for the payment of the City's General Obligation Capital Notes, Series 2008B, in the aggregate principal amount of $515,000, dated December 23, 2008, has been filed in my office and said Notes have been entered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this day of December, 2008. • Taxpayer Services Division. Manager Hennepin County, Minnesota (SEAL) Deputy • • • • EXHIBIT A PROPOSALS A-1 • EXHIBIT B LIST OF EQUIPMENT AND COST Equipment One One-Ton Truck Two Mowers One Skid Steer Loader One One-'Ton Truck One Brush Chipper One Ice R.esurfacer Four Mid-Size Sedans One Spor±s Utility Vehicle Five Full-Size Police Squad Cars One Records Archival System Scanner Two Netvrork Servers Fiber Optic Network Construction Total: • Cost 45,000 26,000 34,000 47,000 70,000 115,000 80,000 28,000 135,000 6,050 11,980 104,000 $702.030 B-1 • • • EXHIBIT C YEAR * TAX LEVY SCHEDULE TAX LEVY 2009 2010 * Year tax levy collected. RC145-599 (JAE) 341966v2 C-1