98-898p,�,.�- ����
1 �lf.� �
RESOLUTION as, aa
' OF SAINT PAUL, MINNESOTA
Presented By
Referred To
36
Committee: Date
ACCEPTING THE OFFER OF
3 THE MINNESOTA PUBLIC FACILITIES AUTHORITY TO PURCHASE
4 A$16,500,000 WATER REVENUE NOTE OF 1998,
5 PROVIDING FOR ITS ISSUANCE, AND AUTHORIZING
6 EXECUTION OF A PROJECT LOAN AGREEMENT
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
A. WHEREAS, the City Council of the City of Saint
Paul, Minnesota (��City"), has heretofore applied for a loan from
the Minnesota Public Facilities Authority (the "PFA") to provide
financing pursuant to the City's home rule charter and Minnesota
Statutes, Chapter 475, for three separate building additions
to the water treatment faciZity (coZZectiveZy, the "Project"1 as
various improvements to the City's municipal water utility (the
"Water Utility"), which has since its acquisition in 1885 been
under the jurisdiction of the Board of Water Commissioners (the
"Board'�); and the Board and this Council deem it necessary and
expedient to undertake the Project; and
B. WHEREAS, the PFA is authorized pursuant to
Minnesota Statutes, Chapter 446A, as amended, to issue its bonds
(the "PFA Bonds") and to use the proceeds thereof, together with
certain other funds, to provide loans to municipalities to fund
eligible costs of construction of publicly owned drinking water
systems in accordance with the federal Drinking Water
Infrastructure Financing Act; and
C. WHEREAS, the City has applied for a loan from the
PFA pursuant to such program, and the PFA has committed to make a
loan to the City in the principal amount of $16,500,000, to be
disbursed and repaid in accordance with the terms of a Public
Facilities Authority Project Loan Agreement and Revenue Bond
Purchase Agreement (the "Project Loan Agreement") executed by the
PFA and City, a copy of which is before this meeting and on file
with the Clerk; and the Project Loan Agreement, as executed, is
incorporated by reference; and
D. WHEREAS, the
(the "Note" or "1998 Note")
addition the City will need
PFA Bonds; and
$16,500,000 Water Revenue Note of 1998
of the City is tax-exempt, and in
to assure the tax-exemption of the
Council File # — \6 ^ p ►O
Green Sheet # �D w.�
980733.3
`�g
E. WHEREAS, in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(41, the City is authorized to issue
obligations to a board, department or agency of the State of
Minnesota by negotiation and without advertisement for bids and
the PFA is, and has represented that it is, a board, department
or agency of the State of Minnesota; and
8 F. WHEREAS, there are currently outstanding bonds of
9 the City payable from Net Revenues of the City's Water Utility,
10 specifically the City's (a) $11,175,000 Water Revenue Bonds,
11 Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
12 adopted by this Council on June 15, 1993, of which $6,160,000
13 remain outstanding, and (b) $7,000,000 Water Revenue Refunding
14 Bonds, Series 1997C (the "1997 Bonds"), issued pursuant to a
15 resolution adopted by this Council on June 11, 1997, of which
16 $7,000,000 remain outstanding; and there is currently outstanding
17 a general obligation note of the City payable on a subordinate
18 lien basis from Net Revenues of the City's Water Utility,
19 specifically the City's $4,269,844 General Obligation Wastewater
20 Treatment Water Revenue Note of 1996 (the "1996 Note"), issued
, 21 pursuant to a resolution adopted by this Council on May 15, 1996,
22 of which $4,109,327.77 remains outstanding; and the 1997 Bonds
23 refunded bonds issued in 1994, all of which have been retired
24 (the '�1994 Bonds"); and
G. WHEREAS, it is necessary and desirable to provide
for the issuance of the Note on a parity of lien with the 1993
Bonds and 1997 Bonds and with a priority of lien over the 1996
Note; and
A. WHEREAS, paragraph 18 of the resolution
authorizing the issuance and sale of the 1997 Bonds provides for
the issuance of parity lien bonds as follows:
"18. Parity Bonds. The 1993 Bonds and 1997 Bonds
sha1Z be a first charge and lien upon the Net Revenues
of the Water Utility. No part of such Net Revenues
shall be pledged to the payment of any general
obligation bonds issued by the City while any 1993
Bonds or 1997 Bonds or bonds issued on a parity there-
with remain outstanding and undischarged, unless the
pledge of Net Revenues to such general obligation bonds
is expressly made a second and subsequent lien and the
City and Board covenant to make the rates and charges
of the Water Utility sufficient to timely pay such
general obligation bonds. No additional revenue
obligations payable from the Revenue Bond Debt Service
Account shall be hereafter issued unless the same are
expressly made a second and subsequent lien upon the
Net Revenues of the Water Utility; provided, however,
that additional obligations may be issued on a parity
of lien with the 1997 Bonds, provided that the annual
980733.3
E
I •
� �
� � �
1
2
3
4
5
6
7
8
9
10
11 "
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Net Revenues of said Water Utility for each of the two
(2) completed fiscal years immediately preceding the
issuance of such additional obligations shall have been
one and one-half (1.5) times the maximum annual
principal and interest coming due thereafter on all
outstanding revenue obligations payable from and having
a parity of lien upon the Net Revenues of the Water
Utility Fund, including the additional obligations so
to be issued; provided further, however, that if the
annual Net Revenues in either or both of the aforesaid
two (2) completed fiscal years shall be insufficient to
meet this test then any reasonably projected increase
in Net Revenues for the fiscal year immediately
following such second completed fiscal year may be
added to the Net Revenues for such completed fiscal
years or either of them (but the total of such
projected increase in Net Revenues may be added only
once) in applying the foregoing test. For purposes of
the foregoing limitations, when only bonds issued after
the 1994 Bonds are outstanding, the "maximum annual
principal and interest coming due thereafter" on
variable rate bonds shall be calculated assuming the
variable rate bonds bear fixed interest at the rates
prevailing at the time of the calculation for utility
revenue bonds of comparable quality, maturity (or
remaining maturity) and taxable or tax-exempt status,
provided that other or different assumptions may be
used if necessary to obtain an investment grade credit
rating for the variable rate bonds or to maintain the
credit rating(s) then in effect for the bonds then
outstanding. Such facts shall be shown by the
Certificate of the General Manager of the Board of
Water Commissioners and shall be a finding of and
recited in the resolution of the City authorizing any
such additional series. In addition, the following
conditions shall be met:
��(a) The payments required to be made (at
the time of the issuance of such parity lien
bonds) into the various funds and accounts
provided for in this resolution have been made.
"(b) All such parity lien bonds shall have a
December 1 maturity or maturities and shall have
semiannual interest payments on June 1 and
December 1 in each year; provided that interest
payments may be more frequent than semiannually or
on dates ather than June 1 and December 1 if such
interest is paid in full only if at the time of
payment the interest deposits into the Revenue
Bond Debt Service Account for interest payments on
June 1 or December 1, as appropriate, on other
980733.3
3
1
�
qY •
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
bonds are current, and any insufficiency
interest on all parity bonds is allocated
proportionately in each six-month period
June 1 or December l, as appropriate.
of
ending
"(c) The proceeds of such parity lien bonds
shall be used only for the purpose of (1) making
improvements, additions, extensions, renewals or
replacements to the Water Utility, and capital-
izing interest or establishing Reserves and paying
the costs of such financing, or (2) refunding
parity lien bonds (provided that bonds which
refund parity lien bonds may instead derive their
parity lien status from paragraphs 19 or 25 as
applied in paragraph 20)."; and
I. WHEREAS, for purposes of this resolution paragraph
18 of the resolution authorizing the issuance and sale of the
1993 Bonds is substantively identical to said paragraph 18
relating to the 1997 Bonds; and
J. WHEREAS, herein the City makes various findings
demonstrating the propriety of the issuance of the Note on a
parity with the 1993 Bonds and 1997 Bonds; and
K. WHEREAS, in accordance with advice received from
the Board, this Council finds, determines and declares that it i�
necessary and expedient to provide moneys to finance the Project,
continue a Reserve previously established, and provide for the
costs of the issuance of the Note from the proceeds of
obligations payable solely from the Net Revenues of the Water
Utility; and
L. WHEREAS, a contract or contracts for the Project
have been made by the City with the approval of the PFA and all
other state and federal agencies of which approval is required:
NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Saint Paul, Minnesota, as follows:
1. Acceptance of Offer; Pavment. The offer of the
Minnesota Public Facilities Authority (the "PFA" or "Purchaser")
to purchase a$16,500,000 Water Revenue Note of 1998 of the City
(the "Note" or "1998 Note"), at the rates of interest hereinafter
set forth, and to pay for the Note the sum of $16,500,000 as
provided below, is hereby accepted, and the sale of the Note is
hereby awarded to the PFA. Payment for the Note shall be
disbursed in installments as eligible costs of the Project are
reimbursed or paid, all as provided in the Project Loan
Agreement.
980733.3
0
q�•dqt
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
2. Title• Date• Denomination; Interest Rates;
Maturities The Note shall be a fully registered negotiable
obligation, shall be titled "Water Revenue Note o£ 1998", shall
be dated as of the date of delivery and shall be issued
forthwith. The Note shall be in the principal amount of
$16,500,000, or so much thereof as shall be disbursed pursuant to
the Project Loan Agreement, shall bear no interest until December
1, 1998, and from and after December 1, 1998, shall bear interest
on so much of the principal amount of the Note as (i) may be
disbursed from time to time as provided in the Project Loan
Agreement and (ii) remains unpaid, from December 1, 1998, for
disbursements made on or prior to that date or from the date of
each later disbursement until the principal amount of the Note
has been paid or has been provided for, at the rate of three and
forty-eight hundredths percent (3.480) per annum (calculated on
the basis of a 360-day year of twelve 30-day months). Interest
on the Note is payable semiannually on June 1 and December 1,
commencing June l, 1999. Principal on the Note shall mature on
December 1 of the years and in the installments as follows:
Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Amount
$ 15,000
605,000
750,000
775,000
955,000
990,000
1,185,000
1,030,000
965,000
925,000
Year
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Amount
$ 910,000
960,000
915,000
515,000
980,000
1,085,000
625,000
715,000
965,000
635,000
Interest shall accrue only on the aggregate amount of
the Note which has been disbursed and is unpaid under the Project
Loan Agreement. The principal installments shall be paid in the
amounts scheduled above even if at the time of payment the full
principal amount of the Note has not been disbursed; provided
that if the full principal amount of the Note is never disbursed,
the amount of the principal not disbursed shall be applied to
reduce each unpaid principal installment in the proportion that
such installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments). Principal, interest and any premium due under the
Note will be paid on each payment date by wire payment, or by
check or draft mailed the last business day prior to the payment
date to the person in whose name the Note is registered, in any
coin or currency of the United States which at the time of
payment is legal tender for public and private debts.
980733.3
qg -89d
1
2
�
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
Interest on the Note includes amounts treated by the
PFA as service fees.
3. Purpose: Cost. The proceeds of the Note shall
provide funds to finance acquisition and construction of the
Project. The proceeds of the Note shall be deposited and used as
provided in paragraph 10. The total cost of the construction of
the Project, including legal and other professional charges,
publication and printing costs, interest accruing on money
borrowed for the Project before the collection of Net Revenues
pledged and appropriated therefor, and all other costs neces-
sarily incurred and to be incurred from the inception to the
completion of the Project, is estimated to be at least equal to
the amount of the Note. The City covenants that it shall do all
things and perform all acts required of it to assure that work on
the Project proceeds with due diligence to completion and that
any and all permits and studies required under law for the
Project are obtained.
4. Redemption. The Note shall be subject to
redemption and prepayment in whole or in part at the option of
the City or mandatorily as provided in the Project Loan
Agreement. If redemption is in part, each installment of
principal shall be prepaid in the proportion that such
installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments), unless the City and the holder of the Note agree to a
different result.
5. Reaistration of Note. At the time of issuance and
delivery of the Note, the officer of the City performing the
functions of the treasurer (the "Treasurer") shall register the
Note in the name of the payee in a note register which she and
her successors in office shall maintain for the purpose of
registering the ownership of the Note. The Note shall be
prepared for execution with an appropriate text and spaces for
notation of registration. The force and effect of such regis-
tration shall be as stated in the form of Note hereinafter set
forth. Payment of principal installments and interest, whether
upon redemption or otherwise, made with respect to the Note, may
be made to the registered holder thereof or to his, her or its
legal representative, without presentation or surrender of the
Note.
Certificate of
the following
Form of Note. The Note, together with the
Registration thereon, shall be in substantially
form:
980733.3
� $.�'9Y
1
2
3
4
5
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
$16,500,000 WATER REVENUE NOTE OF 1998
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Saint Paul, Ramsey County, Minnesota (the "City"), certifies that
it is indebted and for value received promises to pay to the
Minnesota Public Facilities Authority or the registered assign,
the principal sum of SIXTEEN MILLION FIVE HUNDRED THOUSAND
DOLLARS, or so much tihereof as shall be disbursed, solely from
the source and in the manner hereinafter set forth, on December 1
of the years and in the installments as follows:
Year
1999
2000
2001
2002
2003
2�04
2005
2006
2007
2008
Amount
Year
Amount
$ 15,000
605,000
750,000
775,000
955,000
990,�00
1,185,000
1,030,000
965,000
925,000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
$ 910,000
960,000
915,000
515,000
980,000
1,085,000
625,000
715,000
965,000
635,000
and to pay interest on so much of the principal amount of the
debt as (i) may be disbursed from time to time as provided in the
Project Loan Agreement (as defined below) and (ii) remains
unpaid, from December 1, 1998, for disbursements made on or prior
to that date or from the date of each later disbursement until
the principal amount hereo£ is paid or has been provided for, at
the rate of zero percent (O.Oo) per annum from the date hereof
until December 1, 1998, and from and after December 1, 1998, at
the rate of three and forty-eight hundredths percent (3.48%) per
annum (calculated on the basis of a 360-day year of twelve 30-day
months). Interest on the Note is payable semiannually on each
June 1 and December 1, commencing June 1, 1999.
Principal and Interest Payments. Amounts payable on
this Note are payable solely from Net Revenues as provided below.
Interest shall accrue only on the aggregate amount of this Note
which has been disbursed under the Public Facilities Authority
Project Loan Agreement and Revenue Bond Purchase Agreement dated
as of October , 1998, by and between the City and the Minnesota
Public Facilities Authority (the "Project Loan Agreement"). The
980733.3
q�-d9r
1
2
3
4
10
11
12
13
14
15
16
17
ia
19
. 20
. 21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
" 40
41
42
43
44
45
46
47
48
49
50
51
52
principal installments shall be paid in the amounts scheduled
above even if at the time of payment the full principal amount of
the Note has not been disbursed; provided that if the full
principal amount of this Note is never disbursed, the amount of
the principal not disbursed shall be applied to reduce each
unpaid principal installment in the proportion that such
installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments). Interest on this Note includes amounts treated by the
Minnesota Public Facilities Authority as service fees.
Principal, interest and any premium due under this Note will be
paid on each payment date by wire payment, or by check or draft
mailed the last business day prior to the payment date to the
person in whose name this Note is registered, in any coin or
currency of the United States of America which at the time of
payment is legal tender for public and private debts.
Redemntion. This Note is subject to redemption and
prepayment in whole or in part at the option of the City or
mandatorily as provided in the Project Loan Agreement. If
redemption is in part, each installment of principal shall be
prepaid in the proportion that such installment bears to the
total of all unpaid principal installments (i.e., the remaining
principal payment schedule shall be reamortized to provide
proportionately reduced principal payments), unless the City and
the holder of this Note agree to a different result.
Issuance• Purpose; Special Obliaation. This Note has
been issued pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota and the Charter
of the Issuer, and pursuant to a resolution adopted by the City
Council of the Issuer on October , 1998 (the "Resolution"), for
the purpose of providing money to finance the construction of
improvements to the City's Water Utility. The Note and the
interest thereon are payable solely and exclusively from the Net
Revenues of the Water Utility of the Issuer pledged to the
payment thereof, and do not constitute a debt of the Issuer or of
the Saint Paul Board of Water Commissioners witliin the meaning of
any constitutional, Charter or statutory limitation of
indebtedness. In the event of any default hereunder, the holder
of this Note may exercise any of the rights and privileges
granted by the laws of the State of Minnesota, subject to the
provisions of the Resolution. The Bonds of this issue, together
with the Water Revenue Bonds, Series 1993E, issued in the
principal amount of $11,175,000, and Water Revenue Refunding
Bonds, Series 1997C, issued in the principal amount of
$7,000,000, are a first and prior lien upon the Net Revenues of
the Water Utility of the Issuer, except tha� the Issuer is
authorized under certain conditions to issue additional revenue
obligations on a parity of lien with the Note and these bonds,
all as provided in the Resolution.
960733.3
�lp -P9p
Recristration; Transfer. This Note shall be registered
in the name of the payee on the books of the City by presenting
this Note for registration to the City's Treasurer, who wi11
endorse his or her name and note the date of registration
opposite the name of the payee in the certificate of registration
attached hereto. Thereafter this Note may be transferred to a
bona fide purchaser only by delivery with an assignment duly
executed by the registered owner or his, her or its legal
representative, and the City may treat the registered owner as
the person exclusively entitled to exercise all the rights and
powers of an owner until this Note is presented with such
assignment for registration of transfer, accompanied by assurance
of the nature provided by law that the assignment is genuine and
effective, and until such transfer is registered on said books
and noted hereon by the City's Treasurer.
Fees upon Transfer or Loss. The Treasurer may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer of
this Note and any legal or unusual costs regarding transfers and
lost notes.
Proiect Loan AQreement. The terms and conditions of
the Project Loan Agreement are incorporated herein by reference
and made a part hereof. The Project Loan Agreement may be
attached to this Note, and shall be attached to this Note if the
holder of this Note is any person other than the Minnesota Public
Facilities Authority.
Tax-Exemot Obliaation. The City intends that the
interest on this Note will be excluded from gross income for
United States income tax purposes and from both gross income and
taxable net income for State of Minnesota income tax purposes.
Not Oualified Tax-Exempt Obliaation. This Note has not
been designated by the Issuer as a"qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the federal
Internal Revenue Code of 1986, as amended. This Note does not
qualify for such designation.
IT IS HEREBY CERTIFIED AND RECITED that all acts,
conditions and things required by the Constitution and laws of
the State of Minnesota and the Charter of the Issuer to be done,
to happen and to be performed, precedent to and in the issuance
of this Note, have been done, have happened and have been
performed, in regular and due form, time and manner as required
by law; that this Note, together with all other debts of the
Issuer outstanding on the date hereof, being the date of its
actual issuance and delivery, does not exceed any constitutional
or statutory or Charter limitation of indebtedness; and that the
Issuer will establish rates and charges for the water service
980733.3 9
a r -g�r
furnished by its Water Utility sufficient in amount to promptly
meet the principal and interest requirements of this Note.
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Note to be
sealed with its official seal and to be executed on its behalf by
the signature of its Mayor, attested by the signature of its
Clerk, and countersigned by the signature of its Director, Office
of Financial Services, all as of , 1998.
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
X X X X X X
Mayor
Attest:
X X X X X X
City Clerk
Countersigned:
X X X X X X
Director, Office of
Financial Services
(SEAL)
Water Revenue Note of 1998.
980733.3 �-�
a� -d'qr
CERTIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of the
attached Note may be made only by the registered owner or his,
her or its legal representative last noted below.
DATE OF SIGNATURE OF
REGISTRATION REGISTERED OWNER CITY TREASURER
Minnesota Public
Facilities Authority
Saint Paul, Minnesota
Federal Employer ldenti-
, 1998 fication No. 41-6007162 X X X
980733 .3 1�-
a�-�yr
7. Execution The Note shall be executed on behalf
of the City by the signatures of its Mayor, Clerk and Director,
Office of Financial Services, each with the effect noted on the
form of the Note, and be sealed with the seal of the City. In
the event of disability or resignation or other absence of any
such officer, the Note may be signed by the manual signature of
that officer who may act on behalf of such absent or disabled
officer. In case any such officer whose signature shall appear
on the Note shall cease to be such officer before the delivery of
the Note, such signature shall nevertheless be valid and
sufficient for all purposes, the same as if he or she had
remained in office until delivery.
8. Holder• Treatment of Registered Owner; Consent of
Aolder.
(A) The "Holder" of the Note is the person in whose name it
is registered on the registration books of the City. For the
purposes of all actions, consents and other matters affecting the
Holder of the Note, other than payments, redemptions, and
purchases, the City may (but shall not be obligated to) treat as
the Holder of the Note the beneficial owner of the Note instead
of the person in whose name the Note is registered. For that
purpose, the City may ascertain the identity of the beneficial
owner of the Note by such means as the Treasurer in his or her
sole discretion deems appropriate, including but not limited to a
certificate from the person in whose name the Note is registered
identifying such beneficial owner.
iB) The City and its Treasurer may treati the person in whose
name the Note is registered as the owner of the Note for the
purpose of receiving payment of principal of and premium, if any,
and interest on, the Note and for all other purposes whatsoever
whether or not the Note shall be overdue, and neither the City
nor its Treasurer shall be affected by notice to the contrary.
(C) Any consent, request, direction, approval, objection or
other instrument to be signed and executed by the Holder may be
in any number of concurrent writings of similar"tenor and must be
signed or executed by the Holder in person or by agent appointed
in writing. Proof of the execution of any such consent, request,
direction, approval, objection or other instrument or of the
writing appointing any such agent and of the ownerehip of the
Note, if made in the following manner, shall be sufficient for
any of the purposes of this resolution, and shall be conclusive
in favor of the City with regard to any action taken by it under
such request or other instrument, namely:
(1) The £act and date of the execution by any person of
any such writing may be proved by the certificate of any
officer in any jurisdiction who by law has power to take
acknowledgments within such jurisdiction that the person
98�733.3 1 2
°
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
signing such writing acknowledged before him the execution
thereof, or by an affidavit of any witness to such
execution.
(2) Subject to the provisions of subparagraph (A)
above, the fact of the ownership by any person of the Note,
and the date of the holding of the same, may be proved by
re£erence to the note register.
9. Delivery• Application of Proceeds. The Note when
so prepared and executed shall be delivered by the Director,
Office of Financial Services, to the purchaser thereof prior to
disbursements pursuant to the Project Loan Agreement, and the
purchaser shall not be obliged to see to the proper application
thereof.
10. Fund and Accounts. There has heretofore been
created (as provided most recently in the June 11, 1997,
resolution of the City relating to the 1997 Bonds) a separate
fund of the City designated the "Board of Water Commissioners
Water Utility Enterprise Fund" (the "Water Utility Fund",
heretofore in resolutions relating to the 1993 Bonds, 1997 Bonds
and 1996 Note also referred to as the "Water Utility Fund"). The
Fund shall be maintained in the manner specified in the
resolutions relating to the 1993 Bonds, 1997 Bonds and 1996 Note
and herein until the 1993 Bonds, 1997 Bonds and 1996 Note, and
interest thereon, have been fully paid, and as specified herein
until the Note and interest thereon have been fully paid. The
Treasurer and all municipal officials and employees concerned
therewith shall establish and maintain financial records of the
receipts and disbursements of the Water Utility in accordance
with this resolution. In such records there shall be maintained
accounts of the Water Utility Fund £or the purposes and in the
amounts as follows:
(a) A"PFA Construction Account", to which shall be
credited all proceeds received from the sale of the 1996
Note and Note, to separate subaccounts therein established
for the 1996 Note and for the Note. The 1996 Note and Note
shall be the only source of moneys credited to the PFA
Construction Account. It is recognized that the sale
proceeds of the 1996 Note and Note are received in
reimbursement for costs expended on the Project and the
project £inanced by the 1996 Note or in direct payment of
such costs, and that accordingly the moneys need not be
placed in the appropriate subaccount of the PFA Construction
Account upon receipt but may be applied immediately to
reimburse the source from which the expenditure was made.
The moneys in the PFA Construction Account shall be used
solely for the purpose of paying for the cost of construct-
ing the Project and the project financed by the 1996 Note,
as appropriate for each subaccount, including all costs
980733.3
13
a �-�qa�
�y
9
10
11"
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
enumerated in Minnesota Statutes, Section 475.65, provided
that such moneys shall only be expended for costs and
expenses which are permitted under the Project Loan
Agreement and the Project Loan Agreement for the 1996 Note.
The PFA prohibits the use of proceeds of the 1996 Note and
Note to reimburse costs initially paid from proceeds of
other obligations of the City unless otherwise specifically
approved. Upon completion of the Project and separately
upon completion of the project financed by the 1996 Note,
and the payment of the costs thereof respectively, any
surplus shall be transferred to the Revenue Bond Debt
Service Account.
(b) An "Operation and Maintenance Account", into which
shall be paid all gross revenues and earnings derived from
the operation of the Water Utility system including any
assessments which may from time to time be levied with
respect to the Water Utility. From this account there shall
be paid all, but only, current expenses of said system.
Current expenses shall include the reasonable and necessary
costs of administering, operating, maintaining and insuring
the system, salaries, wages, costs of materials and
supplies, costs of water production and distribution,
necessary legal, engineering and auditing services, and a11
other items which, by sound accounting practices, constitute
normal, reasonable and current costs of operation and
maintenance, but excluding any allowance for depreciation,
extraordinary repairs and payments into the Revenue Bond
Debt Service Account and Reserve Account. There shall at
all times be maintained in said account a reserve in an
amount sufficient to cover the operation and maintenance
costs of the Water Utility system for the ensuing fifteen
(15) day period; neither said reserve nor any annual
addition thereto shall constitute "Net Revenues'� as defined
below. The balance from time to time remaining in the
Operation and Maintenance Account, including interest or
other earnings received from the investment of any moneys in
the Water Utility Fund, after paying or providing for the
foregoing items, shall constitute, and are'referred to in
this resolution as, "Net Revenues". Payments of fees to
trustees for bonds, to providers of liquidity facilities or
credit enhancement facilities for bonds and remarketing
agents for bonds are also current expenses.
(c) A"Revenue Bond Debt Service Account", into which
there shall be credited and to which there is hereby
irrevocably pledged from the Net 22evenues of the operation
of the Water Utility system monthly commencing in November,
1998, a sum equal to at least 1/12 of the total principal
and interest on the Note and any other bonds or notes issued
on a parity therewith during the ensuing twelve (12) months;
provided, however, that no further payments need be made to
980733.3
14
Aw�e.r,�,,� �, - � � � 1 � °18' (��,���
"4
said account when the moneys held therein are sufficient for
the payment of all principal and interest due on said bonds
and notes on and prior to the next maturity date. No money
shall be paid out of said account except to pay principal,
premium, if any, and interest on the Note and any other
bonds or notes which are issued on a parity with the Note.
(d) A"Reserve Account", which was heretofore created,
and is hereby continued, to be used only when and if moneys
in the Revenue Bond Debt Service Account or other moneys
available therefor are insufficient to pay principal,
premium, if any, and interest on the Note and other bonds
and notes payable from the Revenue Bond Debt Service -
Account; provided, however, that the moneys in tlie Reserve
Account may be used to prepay said bonds and notes, when
such prepayment will retire all of the bonds and notes then
outstanding. $1,650,000 from the Water Utility's retained
earnings shall be deposited in the Reserve Account upon the
issuance of the Note, and amounts already in the Reserve
Account pursuant to the resolutions authorizing the issuance
of the 1993 Bonds and 1997 Bonds shall be maintained therein
upon the issuance of the Note to the extent necessary to
equal the amount required to be maintained in the Reserve
Account as set forth below, being initially amounts required
for the 1993 Bonds, 1997 Bonds and Note. Whenever the
moneys in the Reserve Account exceed the amount required to
be maintained in the Reserve Account as set forth below,
such excess may be transferred to the Revenue Bond Debt
Service Account; and whenever the moneys in the Reserve
Account shall be less than said amount, the Reserve Account
shall be restored to said amount from the next available Net
Revenues. The amount required to be maintained in the
Reserve Account shall be an amount equal to the lesser of:
(1) ten percent (1.0�) of the original principal amount of
the Note and other bonds payable from the Revenue Bond Debt
Service Account issued after the 1993 Bonds on a parity of
lien therewith, or (2) the maximum principal and interest
due in any year on the bonds and notes payable from the
Revenue Bond Debt Service Account; and whenever the moneys
in the Reserve Account exceed such amount required to be
maintained therein, such excess may be transferred to the
Revenue Bond Debt Service Account. When only bonds or notes
issued after the 1994 Bonds are outstanding, the "maximum
principal and interest due in any year" on variable rate
bonds shall be calculated at such time (for any variable
rate bonds issued prior to such time) or in connection with
their issuance (for variable rate bonds issued after such
time) assuming the variable rate bonds bear fixed interest
for the remainder of their terms or for their terms, as
appropriate, at the rates prevailing at such time (for any
variable rate bonds issued prior to such time) or at the
time of their issuance (for variable rate bonds issued after
980733.3 ]_�j
1
2
3
4
5
6
7
8
10
17.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
q��a�
- ��lRl�� ,��t�
a�
such time) for utility revenue bonds of comparable quality,
maturity and taxable or tax-exempt status, provided that
other or different assumptions may be used if necessary to
obtain an investment grade credit rating for the variable
rate bonds or to maintain the credit ratingis) then in
effect for the bonds then outstanding.
(e) Net Revenues in excess of those required for the
foregoing purposes may be used for any proper purpose.
{f) The money in the Water Lltility Fund shall be
allotted and paid to the various accounts herein established
in the order in which said accounts are listed on a -
cumulative basis, and if in any month the money in said
accounts is insufficient to place the required amount in any
accounts, the deficiency shall be made up in the following
month or months after payment into all other accounts having
a prior claim on said Net Revenues have been made in full.
(g) All money held in the Revenue Bond Debt Service
Account and the Reserve Account created by this resolution
shall be kept separate and apart from all other municipal
funds and accounts.
(h) Notwithstanding anything to the contrary herein,
moneys in the Water Utility Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 1993 Bonds, 1997 Bonds and Note to be
paid to the United States in order to maintain the exclusion
fram gross income under Section 103 of the Code (as
hereinafter defined) of the interest on the 1993 Bonds, 1997
Bonds and Note.
(i) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
Note sha11 be maintained and operated as required by the
resolutions authorizing the same.
(j) No portion of the proceeds of the Note shall be
used directly or indirectly to acquire higher yielding
investments or to replace funds which were used directly or
indirectly to acquire higher yielding investments, except
(1) for a reasonable temporary period until such proceeds
are needed for the purpose for which the Note was issued,
(2) as part of a reasonably required reserve or replacement
fund not in excess of ten percent (l00) of the proceeds of
the Note (or in a higher amount which the City establishes
is necessary to the satisfaction of the Secretary of the
Treasury o£ the United States), and (3) in addition to the
above in an amount not greater than the lesser of five
percent (5°a) of the proceeds of the Note or $100,000. To
this effect, any proceeds of the Note and any sums from time
980733.3
16
a r-�r
1
2
3
4
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
to time held in the PFA Construction Account, Operation and
Maintenance Account, Reserve Account or Revenue Bond Debt
Service Account (or any other City or Board account which
will be used to pay principal or interest to become due on
the Note, bonds or notes payable therefrom) in excess of
amounts which under the federal arbitrage regulations may be
invested without regard to yield shall not be invested at a
yield in excess of the applicable yield restrictions imposed
by said arbitrage regulations on such investments after
takinq into account any applicable "temporary periods",
minor portion or reserve made available under the federal
arbitrage regulations. Money in the Water Utility Fund
shall not be invested in obligations or deposits issued by,
guaranteed by or insured by the United States or any agency
or instrumentality thereof if and to the extent that such
investment would cause the Note to be "federally guaranteed"
within the meaning of Section 149(b) c�f the federal Internal
Revenue Code of 1986, as amended (the "Code").
The City shall observe the Covenants of paragraphs 22 and 24 of
this resolution and of sections 14 and 17 of the Project Loan
Agreement with regard to the Water Utility Fund.
il. Parity Bonds. The 1993 Bonds, 1997 Bonds and Note
shall be a first charge and lien upon the Net Revenues of the
Water Utility. No part of such Net Revenues shall be pledged to
the payment of any general obligation bonds issued by the City
while the Note, any 1993 Bonds or 1997 Bonds or bonds or notes
issued on a parity therewith remain outstanding and undischarged,
unless the pledge of Net Revenues to such general obligation
bonds is expressly made a second and subsequent lien and the City
and Board covenant to make Che rates and charges of the Water
Utility sufficient to timely pay such general obligation bonds.
No additional revenue obligations payable from the Revenue
Bond Debt Service Account shall be hereafter issued unless the
same are expressly made a second and subsequent lien upon the Net
Revenues of the Water t3tility; provided, however, that additional
obligations may be issued on a parity of lien with the Note,
provided that the annual Net Revenues of said Water Utility for
each of the two (2) completed fiscal years immediately preceding
the issuance of such additional obligations shall have been one
and one-half (1.5) times the maximum annual principal and
interest coming due thereafter on all outstanding revenue
obligations payable £rom and having a parity of lien upon the Net
Revenues of the Water Utility Fund, including the additional
obligations so to be issued; provided further, however, that if
the annual Net Revenues in either or both of the aforesaid two
(2) completed fiscal years shall be insufficient to meet this
test then any reasonably projected increase in Net Revenues for
the fiscal year immediately following such second completed
fiscal year may be added to the Net Revenues for such completed
980733.3 1 7
9�' '�
fiscal years or
increase in Net
foregoing test.
either of them (but the total of such projected
Revenues may be added only once) in applying the
For purposes of the foregoing limitations, when only bonds
or notes issued after the 1994 Bonds are outstanding, the
"maximum annual principal and interest coming due thereafter" on
variable rate bonds shall be calculated assuming the variable
rate bonds bear fixed interest at the rates prevailing at the
time of the calculation for utility revenue bonds of comparable
quality, maturity (or remaining maturity) and taxable or tax-
exempt status, provided that other or different assumptions may
be used if necessary to obtain an investment grade credit rating
for the variable rate bonds or to maintain the credit rating(s)
then in effect for the bonds then outstanding.
Such facts shall be shown by the Certificate of the General
Manager of the Board of Water Commissioners and shall be a
finding of and recited in the resolution of the City authorizing
any such additional series. In addition, the following
conditions shall be met:
(a) The payments required to be made (at the time of
the issuance o£ such parity lien bonds} into the various
funds and accounts provided for in this resolution have been
made.
(b) All such parity lien bonds shall have a December 1
maturity or maturities and shall have semiannual interest
payments on June 1 and December 1 in each year; provided
that interest payments may be more frequent than
semiannually or on dates other than June 1 and December 1 if
such interest is paid in full only if at the time of payment
the interesC deposits into the Revenue Bond Debt Service
Account for interest payments on June 1 or December 1, as
appropriate, on other bonds are current, and any
insufficiency of interest on all parity bonds is allocated
proportionately in each six-month period ending June 1 or
December 1, as appropriate.
(a) The proceeds of such parity lien bonds shall be
used only for the purpose of (1) making improvements,
additions, extensions, renewals or replacements to the Water
Utility, and capitalizing interest or establishing Reserves
and paying the costs of such financing, or (2) refunding
parity lien bonds (provided that bonds which refund parity
lien bonds may instead derive their parity lien status from
paragraphs 12 or 18 as applied in paragraph 13).
The Note shall have a priority of lien over the 1996 Note,
and the pledge and appropriation of Net Revenues of the Water
980733.3 1 $
q� �� r
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Utility for the payment of the Note shall be superior to the
pledge and appropriation to the 1996 Note.
12. Refunding Maturing Oblictations. The City also
reserves the right and privilege of issuing additional revenue
bonds if and to the extent needed to refund maturing bonds or
notes or installments thereof payable from the moneys in the
Water Utility Fund in case the moneys in the Revenue Bond Debt
Service Account are insufficient to pay the same at maturity,
which refunding revenue bonds may be on a parity with this issue
as to interest payments even if such interest is in excess of the
interest on the refunded bonds or notes, but shall mature
subsequent to all the revenue obligations which are payable from
the Net Revenues of the Water Utility Fund and which are still
outstanding upon completion of such refunding.
13. Other Revenue Obliaations. Except as authorized
in paragraphs 11, 12 and 18 hereof, the City covenants and agrees
that it will issue or incur no obligations payable from the Net
Revenues of all or a part of said Water Utility or constituting
in any manner a lien thereon, unless such obligations are
expressly made junior and subordinate to the lien and charge of
the Note on said Net Revenues. If obligations which refund the
Note are parity lien bonds or notes, they shall enjoy compl.ete
equality of lien with any portion of the I3ote not refunded and
any other then outstanding bonds or notes payable from the
Revenue Bond Debt Service Account, if any there be, and such
refunding bonds or notes shall continue to have whatever priority
of lien over subsequent issues that the refunded bonds or notes
may have had. If only a portion of the Note shall be refunded
and if such portion of the Note shall be refunded in such manner
that the interest rate of any refunding bond or note shall be
greater than the interest rate of the corresponding refunded
portion of the Note (or the average net interest rate of the
refunding bonds or notes shall be, or shall be reasonably
estimated to be, higher than the average net interest rate of the
refunded portion of the Note), or that the maturity date of any
refunding bond or note shall be earlier than the maturity date of
the corresponding refunded portion of the Note (or the average
maturity of the refunding bonds or notes shall be earlier than
the average maturity of Che refunded portion of the Note), then
the Note may not be refunded without the consent of the holders
of the unrefunded portion of the Note and any other bonds or
notes then outstanding payable from the Revenue Bond Debt Service
Account unless the Net Revenues coverage test of paragraph li is
met.
14.
moneys in the
Account shall
principal then
notes payable
980733.3
Insu£ficient Amounts. In the event that the
Revenue Bond Debt Sesvice Account and Reserve
be insufficient at any particular time to pay the
due and interest then accrued on all bonds or
from the Revenue Bond Debt Service Account, said
19
q �..�qr
moneys shall first be applied to the payment pro rata of the
accrued interest on all such bonds or notes, payable over a
period ending on June 1 or December 1, as appropriate, and any
balance shall be applied in payment pro rata of the principal on
all such bonds or notes, provided further that if it shall ever
be determined by a court of competent jurisdiction while any such
bonds or notes remain outstanding that the sums available and to
become available for the payment of the principal thereof and
interest thereon are insufficient whether or not then due, then
the moneys in the Revenue Bond Debt Service Account and Reserve
Account shall be applied in payment of all principal then
outstanding whether or not then due and the interest accrued
thereon to the date of payment ratably according to the aggregate
amount thereof without any preference or priority.
15. Suit by Holder. The Holder of twenty percent
(200) or more in aggregate principal amount of the Note issued
under this resolution and at any time outstanding may, either at
law or in equity, by suit, action, or other proceedings, protect
and enforce the rights o£ all Holders of the Note or enforce or
compel the performance of any and all of the covenants and duties
specified in this resolution to be performed by the City or Board
or their officers and agents, including the fixing and
maintaining of rates and charges and the collection and proper
segregation of revenues and the application and use thereof.
16. Covenants. For the protection of the Holder of
the Note, the City herein covenants and agrees to and with the
holders thereof from time to time as follows:
(a) It will at all times through its Board adequately
maintain and efficiently operate the Water Utility as a City
utility. It will from time to time make all needful and
proper repairs, replacements, additions and betterments to
the equipment and facilities of said Water Utility so that
they may at all times be operated properly and
advantageously, and whenever any equipment of said system
shall have been worn out, destroyed or otherwise become
insufficient for proper use, it shall be promptly replaced
or repaired so that the value and efficiency of the
facilities shall be at all times fully maintained and its
revenues unencumbered by reason thereo£.
(b) The rates for all water service and the charges
for all water supplied by the Water Utility to the City and
its residents and to all other consumers shall be reasonable
and just, taking into account the cost and value of the
Water i3tility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
principal and interest on the bonds and notes payable from
980733.3 2 �
a �-r9�'
the Net Revenues of-the water Utility, and all other sums
customarily paid from the revenues of the Water Utility.
(c) It will as required by Section 10.11.2 of the City
Charter (and it will continue to do so whether or not
required by said Charter) establish, maintain and collect
such charges and rates as will produce revenues sufficient
to pay the reasonable cost of operation, repair and
maintenance of the Water Utility and to pay the interest on
and principal of the Note and all bonds and notes on a
parity of lien with the Note, as and when they become due,
as well as to provide sufficient money to make the required
appropriations to the various funds and accounts established
herein. The City will review the schedule of rates and
charges for the Water Utility at least annually when the
Board budget is reviewed.
(d) It will not sell, lease, mortgage, or in any manner
dispose of the Water Utility or any part thereof (including
any and all extensions and additions that may be made
thereto) until all revenue bonds and notes payable from the
Net Revenues of the Water Utility or any part thereof have
been paid in full; provided, however, that the City may sell
the Water Utility or any part thereof if simultaneously with
or prior to said sale all of the outstanding bonds are
discharged in accordance with paragraph 18 of this
resolution. This covenant shall not be construed to prevent
the sale by the City at fair market value of real estate,
equipment or other non-revenue-producing properties which in
the judgment of the City have become unnecessary,
uneconomical or ine�cpedient to use in connection with the
Water Utility provided that suitable facilities are obtained
in place thereof and provided further that nothing herein is
intended to prevent the City or Board from terminating or
otherwise preventing the termination of contracts for the
furnishing of water. Notwithstanding the foregoing, the
provisions of the Project Loan Agreement shall be given
effect and may preclude or limit the sale,.lease, mortgage
or disposition of the Water Utility or Project.
(e) It shall cause to be kept proper books, records and
accounts adapted to the Water Utility separate from other
accounts to be audited at the end of each fiscal year. A
copy of said audit shall be £urnished, without cost, to the
Holder of the Note. If the City fails to provide such audit
within a reasonable time after the end of said fiscal year,
the holders of twentiy percent (200) or more of the
outstanding bonds and notzs may cause such audit to be made
at the expense of the City. The expense of preparing such
audit shall be paid as current operating expenses of the
Water Utility. The Holder oE the Note, or its duly
appointed representatives, from time to time shall have the
980733.3
21
Q�.B'q�
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
right, at all reasonable times, to inspect the Water Utility
system and to inspect and copy the books, records, accounts
and data relating thereto. The City agrees to furnish
copies of such audit, without cost, to any Holder or Holders
of the Note at their request within a reasonable time after
the end of each fiscal year. In addition, the City shall
observe the provisions of the Project Loan Agreement and
adhere to the requirements therein as to reporting and the
timing thereof.
(f) It will faithfully and punctually perform all
duties with reference to the Water Utility required by the
City Charter, the Constitution and laws of the State of
Minnesota and this resolution.
(g) It will grant no franchise to any competing
utility.
17. Amendments. No change, amendment, modification or
alteration shall be made in the covenants made with the Holder of
the Note without the consent of the Holders of not less than
sixty percent (60%) in principal amount of the Note then
outstanding except for changes, amendments, modifications and
alterations (a) made to cure any ambiguity or formal defect or
omission, or (b) which woul.d not materially prejudice the Holders
of the Note; provided, however, that nothing herein contained
shall permit or be construed as permitting (1) an extension of
the maturity of the principal of or the interest on the Note, or
(2) a reduction in the principal amount of the Note or the rate
of interest thereon, or (3) a privilege or priority of the Note
over any other bond or bonds or note or notes except as otherwise
provided herein, or (4) a reduction in the aggregate principal
amount of the Note required for consent to any change, amendment,
modification or alteration, or (5) the creation of any lien
ranking prior to or on a parity with the lien of the Note, except
as hereinbefore expressly permitted, or {6) a modification of any
of the provisions of this paragraph without the consent of the
Holders of one hundred percent (100%) of the principal amount of
the Note.
18. Discharae. When all of the Note has been
discharged as provided in this paragraph, all pledges, covenants
and other rights granted by this resolution to the Holder of the
Note shall cease. The City may discharge all of the Note which
is due on any date by depositing with the paying agent (but not
if a City officer is the paying agent) or an escrow agent for the
Note on or before that date a sum sufficient for the payment
thereof in full; or if any of the Note should not be paid when
due, it may nevertheless be discharged by depositing with the
paying agent (but not if a City officer is the paying agent) or
an escrow agent a sum sufficient for the payment thereof in full.
The City may also discharge any prepayable portion of the Note
980733_3
22
qg -dgl
1
2
3
4
5
6
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
4S
49
50
51
which is called for redemption on any date when it is prepayable
according to its terms, by depositing with the paying agent (but
not if a City officer is the paying agent) or an escrow agent on
or before that date an amount equal to the principal, interest
and redemption premium, if any, which are then due, provided that
notice of such redemption has been duly given as provided in this
resolution. The City may also at any time discharge the Note in
whole or in part by complying with the applicable provisions of
Minnesota Statutes, Section 475.67, and any amendments thereto,
except that the funds deposited in escrow in accordance with said
provisions may but need not be in whole or part proceeds of
advance refunding bonds or notes. The City may discharge the
Note as herein provided without the consent of the Holder.
19. Fiscal Year As used in this resolution the words
"fiscal year" shall mean the twelve t12} month period beginning
on January 1 of each year and ending on December 31 of the same
year. Should it be deemed advisable at some later date to change
the fiscal yearly basis, the same may be done by proper actions
to that effect, which change shall not constitute an amendment or
modification of this resolution.
20. Proiect Loan Aareement. The Project Loan
Agreement is hereby approved in substantially the form heretofore
presented to the City Council, and in the form executed is hereby
incorporated by reference and made a part of this resolution.
Each and all of the provisions of this resolution relating to the
Note are intended to be consistent with the provisions of the
Project Loan Agreement, and to the extent that any grovision in
the Project Loan Agreement is in conflict with this resolution as
it relates to the Note, that provision shall control and this
resolution shall be deemed accordingly modified. The Mayor and
Director, Office of Financial Services, are hereby authorized and
directed to execute the Project Loan Agreement. The execution of
the Project Loan Agreement by the appropriate officers shall be
conclusive evidence of the approval of the Project Loan Agreement
in accordance with the terms hereof. The Project L,oan Agreement
may be attached to the Note, and shall be attached to the Note if
the holder of the Note is any person other than the PFA.
21. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the PFA, and to the attorneys approving the legality of the
issuance of the Note, certified copies of all proceedings and
records of the City relating to the Note and to the financial
condition and affairs of the City, and such other affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Note as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
980733.3
23
c�g�. �'98'
furnished, shall be deemed representations of the City as to the
facts recited therein.
22. Necrative Covenants as to Use of Proceeds and
Pro�ect. The City hereby covenants not to use the proceeds of
the Note or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangements for the
cost of the Project, in such a manner as to cause the Note to be
a"private activity bond" within the meaning of Sections 103 and
141 through 150 of the Code. The City reasonably expects that no
actions will be taken over the term of the Note that would cause
it to be a private activity bond, and the average term of the
Note is not longer than reasonably necessary for the governmental
purpose of the issue. The City hereby covenants not to use the
proceeds of the Note in such a manner as to cause the Note to be
a"hedge bond" within the meaning of Section 149(g) of the Code.
The City hereby covenants not to use the proceeds of
the Note or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangement for the
cost of the Project, in such a manner as to cause the PFA Bonds
to be "private activity bonds" within the meaning of Sections 103
and 141 through 150 of the Code. The City reasonably expects
that it will take no actions over the term of the Note that would
cause the PFA Bonds to be private activity bonds, and the average
term of the Note is not longer than reasonably necessary for its
governmental purpose.
23. Tax-ExemDt Status of the Note: Rebate: Elections.
The City shall comply with requirements necessary under the Code
to establish and maintain the exclusion from gross income under
Section 103 of the Code of the interest on the Note, including
without limitation requirements relating to temporary periods for
investments, limitations on amounts invested at a yield greater
than the yield on the Note, and the rebate of excess investment
earnings to the United States.
If any elections are available now or.hereafter with
respec� to arbitrage or rebate matters relating to the Note, the
Mayor, Clerk, Treasurer and Director, Office of Financial
Services, or any of them, are hereby authorized and directed to
make such elections as they deem necessary, appropriate or
desirable in connection with the Note, and all such elections
shall be, and shall be deemed and treated as, elections of the
City.
24. Tax-Exem�t Status of the PFA Bonds:
City with respect to the Note shall comply with re�
necessary under the Code to establish and maintain
from gross income under Section 103 of the Code of
on the PFA Bonds, including without limitation (1)
relating to temporary periods for investments, i2)
Rebate. The
uirements
the exclusion
the interest
requirements
limitations on
980733.3 2 4
��.�,�.a.� _ �e �-►1 � r
amounts invested at a yield greater than the yield on the PFA
Bonds, and {3) the rebate of excess investment earnings to the
United States. The City covenants and agrees with the PFA and
holders of the Note thaC the investments of proceeds of the Note,
incZuding the investment of any revenues pledged to the Note
which are considered gross proceeds of the PFA Bonds under the
applicable regulations, and accumulated sinking funds, if any,
shall be limited as to amount and yield in such manner that the
PFA Bonds shall not be arbitrage bonds within the meaning of
Section 148 of the Code and any regulations thereunder. On the
basis of the existing facts, estimates and circumstances,
including the foregoing findings and covenants, the City hereby
certifies that it is not expected that the proceeds of the Note
will be used in such manner as to cause the PFA Bonds'to be
arbitrage bonds under Section 148 of the Code and any regulations
thereunder. The Mayor, Clerk and Director, Office of Financial
Services, shall furnish a certificate to the PFA embracing or
based on the foregoing certification at the time of delivery af
the Note to the PFA.
25. No Desicxnation of Oualified Tax-ExemDt Obligation
The Note, together with other obligations issued by the City in
1998, exceeds in amount those which may be qualified as
"qualified tax-exempt obligations" within the meaning of Section
265(b)(3) o£ the Code, and hence is not designated for such
purpose.
26. Parity Findinas. It is hereby found, determined
and declared that:
(a) Neither the City nor the Board has any outstanding
bonds, warrants, certificates, or other obligations or
evidences of indebtedness, or money borrowed for or on
account of the Water Utility or indebtedness for which any
of the Net Revenues of all or a part of the Water Utility
have been pledged or which are a prior lien on such Net
Revenues, except the 1993 Bonds and 1997 Bonds and the
subordinate 1996 Note.
(b) All payments required to be made prior to the date
hereof into the various funds and accounts of the "Water
Utility Fund" established pursuant to the resolutions of
this City Council which authorized the issuance of the 1993
Bonds and 1997 Bonds have been made.
(c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
the Note have been more than one and one-half (1.5) times,
specifically 2.027 and 1.824 times, respectively, the maximum
annual principal and interest coming due hereafter on all
outstanding revenue obligations payable from and having a
980733.3 Z 5
�A W.�w1.� - �e � -, � a�' �,�q�
q
parity of lien upon the Net Revenues, being the 1993 Bonds
and 1997 Bonds, and the Note as the obligation proposed to be
issued, to wit:
Net Revenues 1996 $11,190,732
Net Revenues 1997 $10,070,410
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and
Interest on the Note
Maximum Annual Principal and
Interest on the 1993 Bonds,
1997 Bonds, and Note
(COMBTNED)
One and One-half (1.5) Times
Total Maximum Annual Principal
and Interest Requirements
$ 1,989,432
$ 1,101,818
$ 1,616,868
$ 3,680,451
$ 5,520,676.50
This City Council has been furnished with the CerCificate of
the General Manager of the Water Utility attesting to the
foregoing facts.
(e) This City Council pursuant to advice from the
Board hereby finds, determines and declares that the
estimated revenues to be derived from the operation of the
Water Utility during the term of the Note will be more than
sufficient to provide Net Revenues adequate to pay principal
and interest when due on the Note and on those otlier bonds
which are now outsCanding and to maintain the Reserves
required therefor.
(f) The Note has a December 1 maturity or maturities
and has interest payments on June 1 and December l, and is
in compliance with the other requirements for parity bonds.
(g) The proceeds of the Note shall only be used for
the purpose of making improvements, additions, extensions,
renewals or replacements to the Water Utility, and
capitalizing interest or establishing Reserves and paying
the costs of such financing.
(h) As required by paragraph 10 of the resolution
authorizing the 1996 Note, estimated Net Revenues of the
Water Utility will be sufficient, in addition to all other
sources, for the payment of the 1946 Note and Note.
980733.3 2 6
'' �
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
27. Consent to Representation. The City hereby
consents to the representation by Briggs and Morgan, Professional
Association, which is acting as the City�s bond counsel with
respect to the Note, of the PFA with respect to the PFA Bonds and
the Note as the PFA's bond counsel pursuant to a special attorney
appointment by the Attorney General of the State of Minnesota.
28. Covenant with xolders. Each and all of the terms
and provisions of this resolution shall be and constitute a
covenant on the part of the City to and with each and every
Holder from time to time of the Note.
29. Resolutions Supplemented. The resolutions
authorizing the issuance of the 1993 Bonds, 1997 Bonds and 1996
Note are hereby supplemented to the extent necessary to give
effect to the provisions o£ this resolution.
30. Severabilitv. If any section, paragraph or
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
31. Headinas. Headings in this resolution are
included for convenience of reference only and are not a part
hereof, and shall not limit or define the meaning of any
provision hereof.
Requested by DepaRment of.
Office of ancial Services
Sy: '
Form A�ved Ci ome �,
7
B
Approv v Mav or �sfbh to Council
Adopted by Council: Date �!� • ? �� �11D
Adoption Certified by Council
g � .
Approved 6y Mayor: Date _
By:
980733.3
�
iol�l� ��,
STATE OF MINNESOTA )
COUNTI' OF I2AMSEY ) ss _ CERTIFICATE
CITY OF SAINT PAUL )
I, the undersigned, being the duly qualified and acting
General Manager of the Water Utility of the City of Saint Paul,
Minnesota, in accordance with the provisions of paragraphs 18 and
18, respectively, of those certain resolutions which provided for
the issuance and sale of $11,175,000 Water Revenue Refunding
Bonds, Series 1993E, adopted on June 15, 1993, and of $7,000,004
Water Revenue Refunding Bonds, Series 1997C, adopted on June 11,
1997, each by the City Council of the City of Saint Paul,
Minnesota, do hereby certify as follows: "`
1. All payments required to be made prior to the date
hereof into Che various funds and accounts of the ��Water Utility
Fund" established pursuant to said resolutions of the City
Council have been made.
2. The annual net revenues of the Water Utility of
the City of Saint Paul, Minnesota, for eaoh of the two (2)
completed fiscal years immediately preceding the proposed
issuance of the City's $16,500,000 Water Revenue Notie of 1998,
have been at least one and one-half i1.5) times, specifically
2.027 and 1.524 times, respectively, the maximum annual principal
and interest coming due after December l, 1997, on all
outstanding revenue obligations payable from and having a parity
of lien upon the Net Revenues of the Water Utility Fund (as such
terms are defined in said resolutions of the City Council),
including the obligations proposed to be issued, to wit:
Net Revenues 1996
Net Revenues 1997
$11,190,732
$10,070,410
Maximum Annual Principal and
Interest on $11,175,000 Water
Revenue Refunding Bonds,
Series 1993E $1,989,432
Maximum Annual Principal and
Interest on $7,000,000 Water
Revenue Refunding Bonds,
Series 1997C $1,101,818
Maximum Annual Principal and
Interest on $16,500,000 Water
Revenue Note of 1998
$1,616,868
980501.3 7,
Maximum Annual Principal
and Interest on all such
obligations
(COMBINED FOR JOINT
HIGHEST YEAR, NOT SUM OF
INDIVIDUAL HIGHEST YEARS)
One and One-half (1.5) Times
Total Maximum Annual Principal
and Interest Requirements
1 °l�l��',���
q$
$3,680,451
$5,520,676.50
980501.3 2
�
WITNESS my hand this S v day of October, 1998.
�.�i�-� C c��*-�'`�`'`.c-��
General Manager
CERTIFICATE OF THE
CITY OF SAINT PAUL,
1998 of the City of
980501.3
,b�����
G ���
4
GENERAL MANAGER OF THE WATER UTILITY OF THE
relating to $16,500,000 Water Revenue Note of
Saint Paul, Minnesota.
3
qg � g�
of Fnarxial Serrices � osmiss
.CT PERSON & PFiONE
iurleY 266-8837
3E ON COUNCIL AGENDA Bv (DA7t7
ASSIGN
� �'�� NUMBERFOR
ROUTIMG
ORDER
TOTAL # OF SIGNATURE PAGES _1
GREEN SHEET
oer�arre�r onreron
No 60037
ufrcoUlC{.
❑Z QS'lATTqtlET ❑t31'(ttHIK
❑ RlRMCJALSErtNCESMt ❑ NWNWLtFAV/ACCT6
� IuYOR1oRllsaziAXiT � �Tw�y
(CLJP ALL LOCATIONS FOR SIGNATURE)
ached resolutbn accepts the offer ot the Minnesota Public Facil'fies ANhority (PFA) to purchau a$16,500,000
Revenue Note of 1998, provWe fw its issuance aM author¢e qtecution of the projed ban agreement.
PLANNING COMMISSION
CIB COMMITTEE
CIVIL SERVICE CAMMfSSION
SONAL SERVICE CONTRACTS MUST ANSWER TXE FOLLOWING GUESTIC
Has this persoNfirm ever wqked under a contract for this tlepaRmeM?
YES NO
Has this persoMrm ever 6een a cily employee?
YES NO
Does this perso�im possess a skill not normally possessed by any curteM cM1y empoyee?
YES NO
Is this person(fitm a fafgeted vendo(?
YES NO
What, When,
loan application tor 516,500,000 to the PFA has been approvetl by [he State 7he procedure to folow
for the Ciry ro issue a Note M the State for that amount. The Loan is interest free u�il December 1, 1998, antl after
at date bears iMerest at a rate of 3.48% per annum. The instaliments are for 20 yeats. 1999 through 2(I18.
V�MOi10ti I�GalGG14f: 6Yi"f'.'�bv9
� ����
� -.
City �eceives a loan from the S[ate that 6�rs irReres[ at a ra[e of 3.46%, which �s well below market rates.
Cdy bses the opportuniry to Dorrax funds (rom the SYate at a low rate, to wpport the Water DepartmenYs
OF TRANSACTION S s+s.soo.aao
SOURGE
COSTIREVENUE BUDGEfED (CIRCLE ON�
ACTIVITY NUMBER
YES NO
(IXPWN)
INTERDEPARTMENTAL MEMORANDUM
CITYOFS4A�TPAUL
October 5, 1998
To: Nancy Anderson
From: Todd Hurley l ��
Re: Changes for October 7, 1998 Council Meeting
Nancy,
Please see the attached pages:
1.) Replacement Page 3 for item # 35 - Resolution 98-897 (1 original, 7 copies)
2.) Replacement Pages 15, 16, 25, 26 for item # 36 - Resolution 98-898 (1 original, 7
copies)
, . }
' , 1
3.) Certificate of the ('seneral Maz�ager of the Water Utility of the
City of Saint Paul — as a supplement to Resolution 98-898. (1 original, 7 copies)
�
1
2
3
4
5
6
7
8
9
10
li
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
said account when the moneys held therein are suf£ici�t for
the payment of all principal and interest due on sa d`�bonds
and notes on and prior to the next maturity date. o money
shall be paid out of said account except to pay p�ncipal,
premium, if any, and interest on the Note and an other
bonds or notes which are issued on a parity wit the Note.
(d) A"Reserve Account", which was heret�ofore created,
and is hereby continued, to be used only whe� and if moneys
in the Revenue Bond Debt Service Account or ther moneys
available therefor are insufficient to pay rincipal,
premium, if any, and interest on the Note nd other bonds
and notes payable from the Revenue Bond bt Service
Account; provided, however, that the mo ys in the Reserve
Account may be used to prepay said bon and notes, when
such prepayment will retire all of th bonds and notes then
outstanding. $1,650,000 from the Cit s Account
shall be deposited in the Reserve A ount upon the issuance
of the Note, and amounts already i the Reserve Account
pursuant to the resolutions autho 'zing the issuance of the
1993 Bonds and 1997 Bonds shall e maintained therein upon
the issuance of the Note to the extent necessary to equal
the amount required to be mai ained in the Reserve Account
as set £orth below, being in' ially amounts required for the
1993 Bonds, 1997 Bonds and ote. Whenever the moneys in the
Reserve Account exceed the amount required to be maintained
in the Reserve Account as set forth below, such excess may
be transferred to the R enue Bond Debt Service Account; and
whenever the moneys in he Reserve Account shall be less
than said amount, the eserve Account shall be restored to
said amount from the next available Net Revenues. The
amount required to e maintained in the Reserve Account
shall be an amoun equal to the lesser of: (1) ten percent
(l00) of the ori nal principal amount of the Note and other
bonds payable f m the Revenue Bond Debt Service Account
issued after t e 1993 Bonds on a parity of lien therewith,
or (2) the ma imum principal and interest due in any year on
the bonds an notes payable from the Revenue Bond Debt
Service Acc unt; and whenever the moneys in the Reserve
Account ex eed such amount required to be maintained
therein, uch excess may be transferred to the Revenue Bond
Debt Ser ice Account. When only bonds or notes issued after
the 199 Bonds are outstanding, the "maximum principal and
inter t due in any year" on variable rate bonds shall be
calc ated at such time (for any variable rate bonds issued
pri to such time) or in connection with their issuance
(f variable rate bonds issued after such time) assuming
t variable rate bonds bear fixed interest for the
mainder of their terms or for their terms, as appropriate,
t the rates prevailing at such time (for any variable rate
bonds issued prior to such time) or at the time of their
issuance (for variable rate bonds issued after such time)
.3
15
ar . � r
for utility revenue_bonds of comparable quality, matur�ty
and taxable or tax-exempt status, provided that othe.� or
different assumptions may be used if necessary to �tain an
investment grade credit rating for the variable r�te bonds
or to maintain the credit rating(s) then in eff�t for the
bonds then outstanding.
(e) Net Revenues in excess of those rec�uired for the
foregoing purposes may be used for any prop�(r purpose.
(f) The money in the Water Utility F nd shall be
allotted and paid to the various accounts herein established
in the order in which said accounts are isted on a
cumulative basis, and if in any month t e money in said
accounts is insufficient to place the equired amount in any
accounts, the deficiency shall be mad up in the following
month or months after payment into a other accounts having
a prior claim on said Net Revenues ve been made in fu11.
(g) All money held in the R enue Bond Debt Service
Account and the Reserve Account eated by this resolution
shall be kept separate and apar from all other municipal
funds and accounts.
(h) Notwithstanding a thing to the contrary herein,
moneys in the Water Utilit Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 19 3 Bonds, 1997 Bonds and Note to be
paid to the United Sta s in order to maintain the exclusion
from gross income und Section 103 of the Code (as
hereinafter defined) of the interest on the 1993 Bonds, 1997
Bonds and Note.
(i) Acco
with a lien on
Note shall be
resolutions a�P
created for bonds, notes or obligations
Revenues subordinate to the lien of the
ained and operated as required by the
zina the same.
(j) portion of the proceeds of the Note shall be
used dire ly or indirectly to acquire higher yielding
investme s or to replace funds which were used directly or
indirec y to acquire higher yielding investments, except
(1) fo a reasonable temporary period until such proceeds
are n eded for the purpose for which the Note was issued,
(2) s part of a reasonably required reserve or replacement
fun not in excess of ten percent (10%) of the proceeds of
th Note (or in a higher amount which the City establishes
i necessary to the satisfaction of the Secretary of the
reasury of the United States), and (3) in addition to the
above in an amount not greater than the lesser of five
percent (So) of the proceeds of the Note or $100,000. To
this effect, any proceeds of the Note and any sums from time
33.3 16
I � �•
amounts invested at a yield greater than the yield on the PFA
Bonds, and (3) the rebate of excess investment earnings to the
United States. The City covenants and agrees with the PFA and
holders of the Note that the investments of proceeds of the Note,
including the investment of any revenues pledged to the Note
which are considered gross proceeds of the PFA Bonds under the
applicable regulations, and accumulated sinking funds, if any
shall be limited as to amount and yield in such manner that e
PFA Bonds shall not be arbitrage bonds within the meaning
Section 148 of the Code and any regulations thereunder. the
basis of the existing facts, estimates and circumstances
including the foregoing findings and covenants, the Ci hereby
certifies that it is not expected that the proceeds o the Note
will be used in such manner as to cause the PFA Bond to be
arbitrage bonds under Section 148 of the Code and y regulations
thereunder. The Mayor, Clerk and Director, Offic of Financial
Services, shall furnish a certificate to the PFA mbracing or
based on the foregoing certification at the tim of delivery of
the Note to the PFA.
25. No Desi nation of ualified ax-Exem t Obli ation
The Note, together with other obligations ssued by the City in
1998, exceeds in amount those which may e qualified as
"qualified tax-exempt obligations" wit n the meaning of Section
265(b)(3) of the Code, and hence is t designated for such
purpose.
26. Paritv Findinqs. t is hereby found, determined
and declared that:
(a) Neither the ity nor the Board has any outstanding
bonds, warrants, ce ificates, or other obligations or
evidences of inde edness, or money borrowed for or on
account of the ter Utility or indebtedness for which any
of the Net Rev nues of all or a part of the Water Utility
have been pl ged or which are a prior lien on such Net
Revenues, cept the 1993 Bonds and 1997 Bonds and the
subordina e 1996 Note.
( All payments required to be made prior to the date
hereo into the various funds and accounts of the "Water
Uti ty Fund" established pursuant to the resolutions of
th' City Council which authorized the issuance of the 1993
B ds and 1997 Bonds have been made.
' (c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
the Note have been more than one and one-half (1.5) times,
specifically and times, respectively, the maximum
annual principal and interest coming due hereafter on all
outstanding revenue obligations payable from and having a
980733.3
25
a$ -��►�
parity of lien upon the Net Revenues, being the
and 1997 Bonds, to wit:
Net Revenues 1996
Net Revenues 1997
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and �
Interest on the Note
Maximum Annual Principal
Interest on the 1993 Bon
1997 Bonds, and Note
(COMBINED)
One and One-half (1.5)
Total Maximum Annual k
and Interest ReauireR'�e
This City Council has
the General Manager o
foregoing facts. J
Bonds
$
$
$1,989,432
$1,101,818
$1,616,868
$3,680,451
$5,520,676.50
furnished with the Certificate of
Water Utility attesting to the
(e) This Cit Council pursuant to advice from the
Board hereby find , determines and declares that the
estimated reven s to be derived from the operation of the
Water Utility ring the term of the Note will be more than
sufficient to rovide Net Revenues adequate to pay principal
and interest hen due on the Note and on those other bonds
which are n outstanding and to maintain the Reserves
reguired t erefor.
(f) The Note has a December 1 maturity or maturities
and has interest payments on June 1 and December l, and is
in co liance with the other requirements for parity bonds.
/(g) The proceeds of the Note shall only be used for
purpose of making improvements, additions, extensions,
wals or replacements to the Water Utility, and
talizing interest or establishing Reserves and paying
costs of such financing.
(h) As required by paragraph 10 of the resolution
authorizing the 1996 Note, estimated Net Revenues o£ the
Water Utility will be sufficient, in addition to all other
sources, for the payment of the 1996 Note and Note.
980733.3 2 6
C � ,���
From: Shiriey Davis '"��
To: STPAUL.apigate.Council, fabei, H2O.WATER.bernieb, ...
Date: 10/5/98 1;17pm
Subject: Agenda 10-7--#'s 35,36,37
The Council Agenda for this Wednesday, October 7, 1998 includes three itesr.s which
are City Treasury related. 1 apologize. f cannot be at the Council meeting, as I
expected, on that day. I will be attending a family funeral on Wednesday.
I wili be in the o�ce until 4:30 today. If you have questions, please contact me at
266-8839. I will be out of the office on Tuesday and Wednesday, back in on Thursday,
10-8. lf, during my absence, you wish further information, please contact Todd Huriey
in Treasury at 266-8837.
The following information is relevant to items #35, 36, and 37.
#35: 98-897 is the resolution authorizing a$3,000,000 lease loan from Narwest Bank
for the City Ha11 Annex remodeling financing. There wil4 be a changed page to the
resolution which authorizes the City Treasury to bring the $3,000,000 in-house to invest
within the City's portfolio. This will provide a higher interest rate return for the funds,
rather than having Nonvest Bank hold and invest the money. (The lease for the
RiverCentre also allowed me to invest the money). I did bid this lease and Norwest won
the bid. Also, the Council has previously approved the budget for the $3,d00,000; this
lease provides the financing.
#36: 98-898 is the resolution accepting a State of Minnesota loan (PFA) for Water
Utility financing in the amount of $16,500,000. The rate is 3.4% The Water Board
knows of this financing and will be approving the Council's actions on October 13, 1998.
There wi41 be some changed pages (filling in the blanks) and a Certificate of the Water
Utility General Manager filed with the Council today, Monday, October 5, 1998. These
are houskeeping additions. Closing the financing and accepting the funds from the
state wili occur after City Council and Water Board approval.
#37 98-899 is the resolution approving 1998 State Law for Capital Improvement
Bonding (C1B) authority. For the Vaw to be effective, there must be local approval. The
previous law ended with 1998 bonding limits. This law provides for future financing
ratios. All limits on general obligation CIB debt must fail within criteria set by the State
Legislafure. As you know, after approval by the City's Capital Improvement Committee,
CIB bonding is always approved by the City Council on an annual basis.
Thank you. ........ Shirley...........
p,�,.�- ����
1 �lf.� �
RESOLUTION as, aa
' OF SAINT PAUL, MINNESOTA
Presented By
Referred To
36
Committee: Date
ACCEPTING THE OFFER OF
3 THE MINNESOTA PUBLIC FACILITIES AUTHORITY TO PURCHASE
4 A$16,500,000 WATER REVENUE NOTE OF 1998,
5 PROVIDING FOR ITS ISSUANCE, AND AUTHORIZING
6 EXECUTION OF A PROJECT LOAN AGREEMENT
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
A. WHEREAS, the City Council of the City of Saint
Paul, Minnesota (��City"), has heretofore applied for a loan from
the Minnesota Public Facilities Authority (the "PFA") to provide
financing pursuant to the City's home rule charter and Minnesota
Statutes, Chapter 475, for three separate building additions
to the water treatment faciZity (coZZectiveZy, the "Project"1 as
various improvements to the City's municipal water utility (the
"Water Utility"), which has since its acquisition in 1885 been
under the jurisdiction of the Board of Water Commissioners (the
"Board'�); and the Board and this Council deem it necessary and
expedient to undertake the Project; and
B. WHEREAS, the PFA is authorized pursuant to
Minnesota Statutes, Chapter 446A, as amended, to issue its bonds
(the "PFA Bonds") and to use the proceeds thereof, together with
certain other funds, to provide loans to municipalities to fund
eligible costs of construction of publicly owned drinking water
systems in accordance with the federal Drinking Water
Infrastructure Financing Act; and
C. WHEREAS, the City has applied for a loan from the
PFA pursuant to such program, and the PFA has committed to make a
loan to the City in the principal amount of $16,500,000, to be
disbursed and repaid in accordance with the terms of a Public
Facilities Authority Project Loan Agreement and Revenue Bond
Purchase Agreement (the "Project Loan Agreement") executed by the
PFA and City, a copy of which is before this meeting and on file
with the Clerk; and the Project Loan Agreement, as executed, is
incorporated by reference; and
D. WHEREAS, the
(the "Note" or "1998 Note")
addition the City will need
PFA Bonds; and
$16,500,000 Water Revenue Note of 1998
of the City is tax-exempt, and in
to assure the tax-exemption of the
Council File # — \6 ^ p ►O
Green Sheet # �D w.�
980733.3
`�g
E. WHEREAS, in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(41, the City is authorized to issue
obligations to a board, department or agency of the State of
Minnesota by negotiation and without advertisement for bids and
the PFA is, and has represented that it is, a board, department
or agency of the State of Minnesota; and
8 F. WHEREAS, there are currently outstanding bonds of
9 the City payable from Net Revenues of the City's Water Utility,
10 specifically the City's (a) $11,175,000 Water Revenue Bonds,
11 Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
12 adopted by this Council on June 15, 1993, of which $6,160,000
13 remain outstanding, and (b) $7,000,000 Water Revenue Refunding
14 Bonds, Series 1997C (the "1997 Bonds"), issued pursuant to a
15 resolution adopted by this Council on June 11, 1997, of which
16 $7,000,000 remain outstanding; and there is currently outstanding
17 a general obligation note of the City payable on a subordinate
18 lien basis from Net Revenues of the City's Water Utility,
19 specifically the City's $4,269,844 General Obligation Wastewater
20 Treatment Water Revenue Note of 1996 (the "1996 Note"), issued
, 21 pursuant to a resolution adopted by this Council on May 15, 1996,
22 of which $4,109,327.77 remains outstanding; and the 1997 Bonds
23 refunded bonds issued in 1994, all of which have been retired
24 (the '�1994 Bonds"); and
G. WHEREAS, it is necessary and desirable to provide
for the issuance of the Note on a parity of lien with the 1993
Bonds and 1997 Bonds and with a priority of lien over the 1996
Note; and
A. WHEREAS, paragraph 18 of the resolution
authorizing the issuance and sale of the 1997 Bonds provides for
the issuance of parity lien bonds as follows:
"18. Parity Bonds. The 1993 Bonds and 1997 Bonds
sha1Z be a first charge and lien upon the Net Revenues
of the Water Utility. No part of such Net Revenues
shall be pledged to the payment of any general
obligation bonds issued by the City while any 1993
Bonds or 1997 Bonds or bonds issued on a parity there-
with remain outstanding and undischarged, unless the
pledge of Net Revenues to such general obligation bonds
is expressly made a second and subsequent lien and the
City and Board covenant to make the rates and charges
of the Water Utility sufficient to timely pay such
general obligation bonds. No additional revenue
obligations payable from the Revenue Bond Debt Service
Account shall be hereafter issued unless the same are
expressly made a second and subsequent lien upon the
Net Revenues of the Water Utility; provided, however,
that additional obligations may be issued on a parity
of lien with the 1997 Bonds, provided that the annual
980733.3
E
I •
� �
� � �
1
2
3
4
5
6
7
8
9
10
11 "
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Net Revenues of said Water Utility for each of the two
(2) completed fiscal years immediately preceding the
issuance of such additional obligations shall have been
one and one-half (1.5) times the maximum annual
principal and interest coming due thereafter on all
outstanding revenue obligations payable from and having
a parity of lien upon the Net Revenues of the Water
Utility Fund, including the additional obligations so
to be issued; provided further, however, that if the
annual Net Revenues in either or both of the aforesaid
two (2) completed fiscal years shall be insufficient to
meet this test then any reasonably projected increase
in Net Revenues for the fiscal year immediately
following such second completed fiscal year may be
added to the Net Revenues for such completed fiscal
years or either of them (but the total of such
projected increase in Net Revenues may be added only
once) in applying the foregoing test. For purposes of
the foregoing limitations, when only bonds issued after
the 1994 Bonds are outstanding, the "maximum annual
principal and interest coming due thereafter" on
variable rate bonds shall be calculated assuming the
variable rate bonds bear fixed interest at the rates
prevailing at the time of the calculation for utility
revenue bonds of comparable quality, maturity (or
remaining maturity) and taxable or tax-exempt status,
provided that other or different assumptions may be
used if necessary to obtain an investment grade credit
rating for the variable rate bonds or to maintain the
credit rating(s) then in effect for the bonds then
outstanding. Such facts shall be shown by the
Certificate of the General Manager of the Board of
Water Commissioners and shall be a finding of and
recited in the resolution of the City authorizing any
such additional series. In addition, the following
conditions shall be met:
��(a) The payments required to be made (at
the time of the issuance of such parity lien
bonds) into the various funds and accounts
provided for in this resolution have been made.
"(b) All such parity lien bonds shall have a
December 1 maturity or maturities and shall have
semiannual interest payments on June 1 and
December 1 in each year; provided that interest
payments may be more frequent than semiannually or
on dates ather than June 1 and December 1 if such
interest is paid in full only if at the time of
payment the interest deposits into the Revenue
Bond Debt Service Account for interest payments on
June 1 or December 1, as appropriate, on other
980733.3
3
1
�
qY •
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
bonds are current, and any insufficiency
interest on all parity bonds is allocated
proportionately in each six-month period
June 1 or December l, as appropriate.
of
ending
"(c) The proceeds of such parity lien bonds
shall be used only for the purpose of (1) making
improvements, additions, extensions, renewals or
replacements to the Water Utility, and capital-
izing interest or establishing Reserves and paying
the costs of such financing, or (2) refunding
parity lien bonds (provided that bonds which
refund parity lien bonds may instead derive their
parity lien status from paragraphs 19 or 25 as
applied in paragraph 20)."; and
I. WHEREAS, for purposes of this resolution paragraph
18 of the resolution authorizing the issuance and sale of the
1993 Bonds is substantively identical to said paragraph 18
relating to the 1997 Bonds; and
J. WHEREAS, herein the City makes various findings
demonstrating the propriety of the issuance of the Note on a
parity with the 1993 Bonds and 1997 Bonds; and
K. WHEREAS, in accordance with advice received from
the Board, this Council finds, determines and declares that it i�
necessary and expedient to provide moneys to finance the Project,
continue a Reserve previously established, and provide for the
costs of the issuance of the Note from the proceeds of
obligations payable solely from the Net Revenues of the Water
Utility; and
L. WHEREAS, a contract or contracts for the Project
have been made by the City with the approval of the PFA and all
other state and federal agencies of which approval is required:
NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Saint Paul, Minnesota, as follows:
1. Acceptance of Offer; Pavment. The offer of the
Minnesota Public Facilities Authority (the "PFA" or "Purchaser")
to purchase a$16,500,000 Water Revenue Note of 1998 of the City
(the "Note" or "1998 Note"), at the rates of interest hereinafter
set forth, and to pay for the Note the sum of $16,500,000 as
provided below, is hereby accepted, and the sale of the Note is
hereby awarded to the PFA. Payment for the Note shall be
disbursed in installments as eligible costs of the Project are
reimbursed or paid, all as provided in the Project Loan
Agreement.
980733.3
0
q�•dqt
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
2. Title• Date• Denomination; Interest Rates;
Maturities The Note shall be a fully registered negotiable
obligation, shall be titled "Water Revenue Note o£ 1998", shall
be dated as of the date of delivery and shall be issued
forthwith. The Note shall be in the principal amount of
$16,500,000, or so much thereof as shall be disbursed pursuant to
the Project Loan Agreement, shall bear no interest until December
1, 1998, and from and after December 1, 1998, shall bear interest
on so much of the principal amount of the Note as (i) may be
disbursed from time to time as provided in the Project Loan
Agreement and (ii) remains unpaid, from December 1, 1998, for
disbursements made on or prior to that date or from the date of
each later disbursement until the principal amount of the Note
has been paid or has been provided for, at the rate of three and
forty-eight hundredths percent (3.480) per annum (calculated on
the basis of a 360-day year of twelve 30-day months). Interest
on the Note is payable semiannually on June 1 and December 1,
commencing June l, 1999. Principal on the Note shall mature on
December 1 of the years and in the installments as follows:
Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Amount
$ 15,000
605,000
750,000
775,000
955,000
990,000
1,185,000
1,030,000
965,000
925,000
Year
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Amount
$ 910,000
960,000
915,000
515,000
980,000
1,085,000
625,000
715,000
965,000
635,000
Interest shall accrue only on the aggregate amount of
the Note which has been disbursed and is unpaid under the Project
Loan Agreement. The principal installments shall be paid in the
amounts scheduled above even if at the time of payment the full
principal amount of the Note has not been disbursed; provided
that if the full principal amount of the Note is never disbursed,
the amount of the principal not disbursed shall be applied to
reduce each unpaid principal installment in the proportion that
such installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments). Principal, interest and any premium due under the
Note will be paid on each payment date by wire payment, or by
check or draft mailed the last business day prior to the payment
date to the person in whose name the Note is registered, in any
coin or currency of the United States which at the time of
payment is legal tender for public and private debts.
980733.3
qg -89d
1
2
�
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
Interest on the Note includes amounts treated by the
PFA as service fees.
3. Purpose: Cost. The proceeds of the Note shall
provide funds to finance acquisition and construction of the
Project. The proceeds of the Note shall be deposited and used as
provided in paragraph 10. The total cost of the construction of
the Project, including legal and other professional charges,
publication and printing costs, interest accruing on money
borrowed for the Project before the collection of Net Revenues
pledged and appropriated therefor, and all other costs neces-
sarily incurred and to be incurred from the inception to the
completion of the Project, is estimated to be at least equal to
the amount of the Note. The City covenants that it shall do all
things and perform all acts required of it to assure that work on
the Project proceeds with due diligence to completion and that
any and all permits and studies required under law for the
Project are obtained.
4. Redemption. The Note shall be subject to
redemption and prepayment in whole or in part at the option of
the City or mandatorily as provided in the Project Loan
Agreement. If redemption is in part, each installment of
principal shall be prepaid in the proportion that such
installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments), unless the City and the holder of the Note agree to a
different result.
5. Reaistration of Note. At the time of issuance and
delivery of the Note, the officer of the City performing the
functions of the treasurer (the "Treasurer") shall register the
Note in the name of the payee in a note register which she and
her successors in office shall maintain for the purpose of
registering the ownership of the Note. The Note shall be
prepared for execution with an appropriate text and spaces for
notation of registration. The force and effect of such regis-
tration shall be as stated in the form of Note hereinafter set
forth. Payment of principal installments and interest, whether
upon redemption or otherwise, made with respect to the Note, may
be made to the registered holder thereof or to his, her or its
legal representative, without presentation or surrender of the
Note.
Certificate of
the following
Form of Note. The Note, together with the
Registration thereon, shall be in substantially
form:
980733.3
� $.�'9Y
1
2
3
4
5
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
$16,500,000 WATER REVENUE NOTE OF 1998
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Saint Paul, Ramsey County, Minnesota (the "City"), certifies that
it is indebted and for value received promises to pay to the
Minnesota Public Facilities Authority or the registered assign,
the principal sum of SIXTEEN MILLION FIVE HUNDRED THOUSAND
DOLLARS, or so much tihereof as shall be disbursed, solely from
the source and in the manner hereinafter set forth, on December 1
of the years and in the installments as follows:
Year
1999
2000
2001
2002
2003
2�04
2005
2006
2007
2008
Amount
Year
Amount
$ 15,000
605,000
750,000
775,000
955,000
990,�00
1,185,000
1,030,000
965,000
925,000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
$ 910,000
960,000
915,000
515,000
980,000
1,085,000
625,000
715,000
965,000
635,000
and to pay interest on so much of the principal amount of the
debt as (i) may be disbursed from time to time as provided in the
Project Loan Agreement (as defined below) and (ii) remains
unpaid, from December 1, 1998, for disbursements made on or prior
to that date or from the date of each later disbursement until
the principal amount hereo£ is paid or has been provided for, at
the rate of zero percent (O.Oo) per annum from the date hereof
until December 1, 1998, and from and after December 1, 1998, at
the rate of three and forty-eight hundredths percent (3.48%) per
annum (calculated on the basis of a 360-day year of twelve 30-day
months). Interest on the Note is payable semiannually on each
June 1 and December 1, commencing June 1, 1999.
Principal and Interest Payments. Amounts payable on
this Note are payable solely from Net Revenues as provided below.
Interest shall accrue only on the aggregate amount of this Note
which has been disbursed under the Public Facilities Authority
Project Loan Agreement and Revenue Bond Purchase Agreement dated
as of October , 1998, by and between the City and the Minnesota
Public Facilities Authority (the "Project Loan Agreement"). The
980733.3
q�-d9r
1
2
3
4
10
11
12
13
14
15
16
17
ia
19
. 20
. 21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
" 40
41
42
43
44
45
46
47
48
49
50
51
52
principal installments shall be paid in the amounts scheduled
above even if at the time of payment the full principal amount of
the Note has not been disbursed; provided that if the full
principal amount of this Note is never disbursed, the amount of
the principal not disbursed shall be applied to reduce each
unpaid principal installment in the proportion that such
installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments). Interest on this Note includes amounts treated by the
Minnesota Public Facilities Authority as service fees.
Principal, interest and any premium due under this Note will be
paid on each payment date by wire payment, or by check or draft
mailed the last business day prior to the payment date to the
person in whose name this Note is registered, in any coin or
currency of the United States of America which at the time of
payment is legal tender for public and private debts.
Redemntion. This Note is subject to redemption and
prepayment in whole or in part at the option of the City or
mandatorily as provided in the Project Loan Agreement. If
redemption is in part, each installment of principal shall be
prepaid in the proportion that such installment bears to the
total of all unpaid principal installments (i.e., the remaining
principal payment schedule shall be reamortized to provide
proportionately reduced principal payments), unless the City and
the holder of this Note agree to a different result.
Issuance• Purpose; Special Obliaation. This Note has
been issued pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota and the Charter
of the Issuer, and pursuant to a resolution adopted by the City
Council of the Issuer on October , 1998 (the "Resolution"), for
the purpose of providing money to finance the construction of
improvements to the City's Water Utility. The Note and the
interest thereon are payable solely and exclusively from the Net
Revenues of the Water Utility of the Issuer pledged to the
payment thereof, and do not constitute a debt of the Issuer or of
the Saint Paul Board of Water Commissioners witliin the meaning of
any constitutional, Charter or statutory limitation of
indebtedness. In the event of any default hereunder, the holder
of this Note may exercise any of the rights and privileges
granted by the laws of the State of Minnesota, subject to the
provisions of the Resolution. The Bonds of this issue, together
with the Water Revenue Bonds, Series 1993E, issued in the
principal amount of $11,175,000, and Water Revenue Refunding
Bonds, Series 1997C, issued in the principal amount of
$7,000,000, are a first and prior lien upon the Net Revenues of
the Water Utility of the Issuer, except tha� the Issuer is
authorized under certain conditions to issue additional revenue
obligations on a parity of lien with the Note and these bonds,
all as provided in the Resolution.
960733.3
�lp -P9p
Recristration; Transfer. This Note shall be registered
in the name of the payee on the books of the City by presenting
this Note for registration to the City's Treasurer, who wi11
endorse his or her name and note the date of registration
opposite the name of the payee in the certificate of registration
attached hereto. Thereafter this Note may be transferred to a
bona fide purchaser only by delivery with an assignment duly
executed by the registered owner or his, her or its legal
representative, and the City may treat the registered owner as
the person exclusively entitled to exercise all the rights and
powers of an owner until this Note is presented with such
assignment for registration of transfer, accompanied by assurance
of the nature provided by law that the assignment is genuine and
effective, and until such transfer is registered on said books
and noted hereon by the City's Treasurer.
Fees upon Transfer or Loss. The Treasurer may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer of
this Note and any legal or unusual costs regarding transfers and
lost notes.
Proiect Loan AQreement. The terms and conditions of
the Project Loan Agreement are incorporated herein by reference
and made a part hereof. The Project Loan Agreement may be
attached to this Note, and shall be attached to this Note if the
holder of this Note is any person other than the Minnesota Public
Facilities Authority.
Tax-Exemot Obliaation. The City intends that the
interest on this Note will be excluded from gross income for
United States income tax purposes and from both gross income and
taxable net income for State of Minnesota income tax purposes.
Not Oualified Tax-Exempt Obliaation. This Note has not
been designated by the Issuer as a"qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the federal
Internal Revenue Code of 1986, as amended. This Note does not
qualify for such designation.
IT IS HEREBY CERTIFIED AND RECITED that all acts,
conditions and things required by the Constitution and laws of
the State of Minnesota and the Charter of the Issuer to be done,
to happen and to be performed, precedent to and in the issuance
of this Note, have been done, have happened and have been
performed, in regular and due form, time and manner as required
by law; that this Note, together with all other debts of the
Issuer outstanding on the date hereof, being the date of its
actual issuance and delivery, does not exceed any constitutional
or statutory or Charter limitation of indebtedness; and that the
Issuer will establish rates and charges for the water service
980733.3 9
a r -g�r
furnished by its Water Utility sufficient in amount to promptly
meet the principal and interest requirements of this Note.
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Note to be
sealed with its official seal and to be executed on its behalf by
the signature of its Mayor, attested by the signature of its
Clerk, and countersigned by the signature of its Director, Office
of Financial Services, all as of , 1998.
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
X X X X X X
Mayor
Attest:
X X X X X X
City Clerk
Countersigned:
X X X X X X
Director, Office of
Financial Services
(SEAL)
Water Revenue Note of 1998.
980733.3 �-�
a� -d'qr
CERTIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of the
attached Note may be made only by the registered owner or his,
her or its legal representative last noted below.
DATE OF SIGNATURE OF
REGISTRATION REGISTERED OWNER CITY TREASURER
Minnesota Public
Facilities Authority
Saint Paul, Minnesota
Federal Employer ldenti-
, 1998 fication No. 41-6007162 X X X
980733 .3 1�-
a�-�yr
7. Execution The Note shall be executed on behalf
of the City by the signatures of its Mayor, Clerk and Director,
Office of Financial Services, each with the effect noted on the
form of the Note, and be sealed with the seal of the City. In
the event of disability or resignation or other absence of any
such officer, the Note may be signed by the manual signature of
that officer who may act on behalf of such absent or disabled
officer. In case any such officer whose signature shall appear
on the Note shall cease to be such officer before the delivery of
the Note, such signature shall nevertheless be valid and
sufficient for all purposes, the same as if he or she had
remained in office until delivery.
8. Holder• Treatment of Registered Owner; Consent of
Aolder.
(A) The "Holder" of the Note is the person in whose name it
is registered on the registration books of the City. For the
purposes of all actions, consents and other matters affecting the
Holder of the Note, other than payments, redemptions, and
purchases, the City may (but shall not be obligated to) treat as
the Holder of the Note the beneficial owner of the Note instead
of the person in whose name the Note is registered. For that
purpose, the City may ascertain the identity of the beneficial
owner of the Note by such means as the Treasurer in his or her
sole discretion deems appropriate, including but not limited to a
certificate from the person in whose name the Note is registered
identifying such beneficial owner.
iB) The City and its Treasurer may treati the person in whose
name the Note is registered as the owner of the Note for the
purpose of receiving payment of principal of and premium, if any,
and interest on, the Note and for all other purposes whatsoever
whether or not the Note shall be overdue, and neither the City
nor its Treasurer shall be affected by notice to the contrary.
(C) Any consent, request, direction, approval, objection or
other instrument to be signed and executed by the Holder may be
in any number of concurrent writings of similar"tenor and must be
signed or executed by the Holder in person or by agent appointed
in writing. Proof of the execution of any such consent, request,
direction, approval, objection or other instrument or of the
writing appointing any such agent and of the ownerehip of the
Note, if made in the following manner, shall be sufficient for
any of the purposes of this resolution, and shall be conclusive
in favor of the City with regard to any action taken by it under
such request or other instrument, namely:
(1) The £act and date of the execution by any person of
any such writing may be proved by the certificate of any
officer in any jurisdiction who by law has power to take
acknowledgments within such jurisdiction that the person
98�733.3 1 2
°
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
signing such writing acknowledged before him the execution
thereof, or by an affidavit of any witness to such
execution.
(2) Subject to the provisions of subparagraph (A)
above, the fact of the ownership by any person of the Note,
and the date of the holding of the same, may be proved by
re£erence to the note register.
9. Delivery• Application of Proceeds. The Note when
so prepared and executed shall be delivered by the Director,
Office of Financial Services, to the purchaser thereof prior to
disbursements pursuant to the Project Loan Agreement, and the
purchaser shall not be obliged to see to the proper application
thereof.
10. Fund and Accounts. There has heretofore been
created (as provided most recently in the June 11, 1997,
resolution of the City relating to the 1997 Bonds) a separate
fund of the City designated the "Board of Water Commissioners
Water Utility Enterprise Fund" (the "Water Utility Fund",
heretofore in resolutions relating to the 1993 Bonds, 1997 Bonds
and 1996 Note also referred to as the "Water Utility Fund"). The
Fund shall be maintained in the manner specified in the
resolutions relating to the 1993 Bonds, 1997 Bonds and 1996 Note
and herein until the 1993 Bonds, 1997 Bonds and 1996 Note, and
interest thereon, have been fully paid, and as specified herein
until the Note and interest thereon have been fully paid. The
Treasurer and all municipal officials and employees concerned
therewith shall establish and maintain financial records of the
receipts and disbursements of the Water Utility in accordance
with this resolution. In such records there shall be maintained
accounts of the Water Utility Fund £or the purposes and in the
amounts as follows:
(a) A"PFA Construction Account", to which shall be
credited all proceeds received from the sale of the 1996
Note and Note, to separate subaccounts therein established
for the 1996 Note and for the Note. The 1996 Note and Note
shall be the only source of moneys credited to the PFA
Construction Account. It is recognized that the sale
proceeds of the 1996 Note and Note are received in
reimbursement for costs expended on the Project and the
project £inanced by the 1996 Note or in direct payment of
such costs, and that accordingly the moneys need not be
placed in the appropriate subaccount of the PFA Construction
Account upon receipt but may be applied immediately to
reimburse the source from which the expenditure was made.
The moneys in the PFA Construction Account shall be used
solely for the purpose of paying for the cost of construct-
ing the Project and the project financed by the 1996 Note,
as appropriate for each subaccount, including all costs
980733.3
13
a �-�qa�
�y
9
10
11"
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
enumerated in Minnesota Statutes, Section 475.65, provided
that such moneys shall only be expended for costs and
expenses which are permitted under the Project Loan
Agreement and the Project Loan Agreement for the 1996 Note.
The PFA prohibits the use of proceeds of the 1996 Note and
Note to reimburse costs initially paid from proceeds of
other obligations of the City unless otherwise specifically
approved. Upon completion of the Project and separately
upon completion of the project financed by the 1996 Note,
and the payment of the costs thereof respectively, any
surplus shall be transferred to the Revenue Bond Debt
Service Account.
(b) An "Operation and Maintenance Account", into which
shall be paid all gross revenues and earnings derived from
the operation of the Water Utility system including any
assessments which may from time to time be levied with
respect to the Water Utility. From this account there shall
be paid all, but only, current expenses of said system.
Current expenses shall include the reasonable and necessary
costs of administering, operating, maintaining and insuring
the system, salaries, wages, costs of materials and
supplies, costs of water production and distribution,
necessary legal, engineering and auditing services, and a11
other items which, by sound accounting practices, constitute
normal, reasonable and current costs of operation and
maintenance, but excluding any allowance for depreciation,
extraordinary repairs and payments into the Revenue Bond
Debt Service Account and Reserve Account. There shall at
all times be maintained in said account a reserve in an
amount sufficient to cover the operation and maintenance
costs of the Water Utility system for the ensuing fifteen
(15) day period; neither said reserve nor any annual
addition thereto shall constitute "Net Revenues'� as defined
below. The balance from time to time remaining in the
Operation and Maintenance Account, including interest or
other earnings received from the investment of any moneys in
the Water Utility Fund, after paying or providing for the
foregoing items, shall constitute, and are'referred to in
this resolution as, "Net Revenues". Payments of fees to
trustees for bonds, to providers of liquidity facilities or
credit enhancement facilities for bonds and remarketing
agents for bonds are also current expenses.
(c) A"Revenue Bond Debt Service Account", into which
there shall be credited and to which there is hereby
irrevocably pledged from the Net 22evenues of the operation
of the Water Utility system monthly commencing in November,
1998, a sum equal to at least 1/12 of the total principal
and interest on the Note and any other bonds or notes issued
on a parity therewith during the ensuing twelve (12) months;
provided, however, that no further payments need be made to
980733.3
14
Aw�e.r,�,,� �, - � � � 1 � °18' (��,���
"4
said account when the moneys held therein are sufficient for
the payment of all principal and interest due on said bonds
and notes on and prior to the next maturity date. No money
shall be paid out of said account except to pay principal,
premium, if any, and interest on the Note and any other
bonds or notes which are issued on a parity with the Note.
(d) A"Reserve Account", which was heretofore created,
and is hereby continued, to be used only when and if moneys
in the Revenue Bond Debt Service Account or other moneys
available therefor are insufficient to pay principal,
premium, if any, and interest on the Note and other bonds
and notes payable from the Revenue Bond Debt Service -
Account; provided, however, that the moneys in tlie Reserve
Account may be used to prepay said bonds and notes, when
such prepayment will retire all of the bonds and notes then
outstanding. $1,650,000 from the Water Utility's retained
earnings shall be deposited in the Reserve Account upon the
issuance of the Note, and amounts already in the Reserve
Account pursuant to the resolutions authorizing the issuance
of the 1993 Bonds and 1997 Bonds shall be maintained therein
upon the issuance of the Note to the extent necessary to
equal the amount required to be maintained in the Reserve
Account as set forth below, being initially amounts required
for the 1993 Bonds, 1997 Bonds and Note. Whenever the
moneys in the Reserve Account exceed the amount required to
be maintained in the Reserve Account as set forth below,
such excess may be transferred to the Revenue Bond Debt
Service Account; and whenever the moneys in the Reserve
Account shall be less than said amount, the Reserve Account
shall be restored to said amount from the next available Net
Revenues. The amount required to be maintained in the
Reserve Account shall be an amount equal to the lesser of:
(1) ten percent (1.0�) of the original principal amount of
the Note and other bonds payable from the Revenue Bond Debt
Service Account issued after the 1993 Bonds on a parity of
lien therewith, or (2) the maximum principal and interest
due in any year on the bonds and notes payable from the
Revenue Bond Debt Service Account; and whenever the moneys
in the Reserve Account exceed such amount required to be
maintained therein, such excess may be transferred to the
Revenue Bond Debt Service Account. When only bonds or notes
issued after the 1994 Bonds are outstanding, the "maximum
principal and interest due in any year" on variable rate
bonds shall be calculated at such time (for any variable
rate bonds issued prior to such time) or in connection with
their issuance (for variable rate bonds issued after such
time) assuming the variable rate bonds bear fixed interest
for the remainder of their terms or for their terms, as
appropriate, at the rates prevailing at such time (for any
variable rate bonds issued prior to such time) or at the
time of their issuance (for variable rate bonds issued after
980733.3 ]_�j
1
2
3
4
5
6
7
8
10
17.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
q��a�
- ��lRl�� ,��t�
a�
such time) for utility revenue bonds of comparable quality,
maturity and taxable or tax-exempt status, provided that
other or different assumptions may be used if necessary to
obtain an investment grade credit rating for the variable
rate bonds or to maintain the credit ratingis) then in
effect for the bonds then outstanding.
(e) Net Revenues in excess of those required for the
foregoing purposes may be used for any proper purpose.
{f) The money in the Water Lltility Fund shall be
allotted and paid to the various accounts herein established
in the order in which said accounts are listed on a -
cumulative basis, and if in any month the money in said
accounts is insufficient to place the required amount in any
accounts, the deficiency shall be made up in the following
month or months after payment into all other accounts having
a prior claim on said Net Revenues have been made in full.
(g) All money held in the Revenue Bond Debt Service
Account and the Reserve Account created by this resolution
shall be kept separate and apart from all other municipal
funds and accounts.
(h) Notwithstanding anything to the contrary herein,
moneys in the Water Utility Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 1993 Bonds, 1997 Bonds and Note to be
paid to the United States in order to maintain the exclusion
fram gross income under Section 103 of the Code (as
hereinafter defined) of the interest on the 1993 Bonds, 1997
Bonds and Note.
(i) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
Note sha11 be maintained and operated as required by the
resolutions authorizing the same.
(j) No portion of the proceeds of the Note shall be
used directly or indirectly to acquire higher yielding
investments or to replace funds which were used directly or
indirectly to acquire higher yielding investments, except
(1) for a reasonable temporary period until such proceeds
are needed for the purpose for which the Note was issued,
(2) as part of a reasonably required reserve or replacement
fund not in excess of ten percent (l00) of the proceeds of
the Note (or in a higher amount which the City establishes
is necessary to the satisfaction of the Secretary of the
Treasury o£ the United States), and (3) in addition to the
above in an amount not greater than the lesser of five
percent (5°a) of the proceeds of the Note or $100,000. To
this effect, any proceeds of the Note and any sums from time
980733.3
16
a r-�r
1
2
3
4
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
to time held in the PFA Construction Account, Operation and
Maintenance Account, Reserve Account or Revenue Bond Debt
Service Account (or any other City or Board account which
will be used to pay principal or interest to become due on
the Note, bonds or notes payable therefrom) in excess of
amounts which under the federal arbitrage regulations may be
invested without regard to yield shall not be invested at a
yield in excess of the applicable yield restrictions imposed
by said arbitrage regulations on such investments after
takinq into account any applicable "temporary periods",
minor portion or reserve made available under the federal
arbitrage regulations. Money in the Water Utility Fund
shall not be invested in obligations or deposits issued by,
guaranteed by or insured by the United States or any agency
or instrumentality thereof if and to the extent that such
investment would cause the Note to be "federally guaranteed"
within the meaning of Section 149(b) c�f the federal Internal
Revenue Code of 1986, as amended (the "Code").
The City shall observe the Covenants of paragraphs 22 and 24 of
this resolution and of sections 14 and 17 of the Project Loan
Agreement with regard to the Water Utility Fund.
il. Parity Bonds. The 1993 Bonds, 1997 Bonds and Note
shall be a first charge and lien upon the Net Revenues of the
Water Utility. No part of such Net Revenues shall be pledged to
the payment of any general obligation bonds issued by the City
while the Note, any 1993 Bonds or 1997 Bonds or bonds or notes
issued on a parity therewith remain outstanding and undischarged,
unless the pledge of Net Revenues to such general obligation
bonds is expressly made a second and subsequent lien and the City
and Board covenant to make Che rates and charges of the Water
Utility sufficient to timely pay such general obligation bonds.
No additional revenue obligations payable from the Revenue
Bond Debt Service Account shall be hereafter issued unless the
same are expressly made a second and subsequent lien upon the Net
Revenues of the Water t3tility; provided, however, that additional
obligations may be issued on a parity of lien with the Note,
provided that the annual Net Revenues of said Water Utility for
each of the two (2) completed fiscal years immediately preceding
the issuance of such additional obligations shall have been one
and one-half (1.5) times the maximum annual principal and
interest coming due thereafter on all outstanding revenue
obligations payable £rom and having a parity of lien upon the Net
Revenues of the Water Utility Fund, including the additional
obligations so to be issued; provided further, however, that if
the annual Net Revenues in either or both of the aforesaid two
(2) completed fiscal years shall be insufficient to meet this
test then any reasonably projected increase in Net Revenues for
the fiscal year immediately following such second completed
fiscal year may be added to the Net Revenues for such completed
980733.3 1 7
9�' '�
fiscal years or
increase in Net
foregoing test.
either of them (but the total of such projected
Revenues may be added only once) in applying the
For purposes of the foregoing limitations, when only bonds
or notes issued after the 1994 Bonds are outstanding, the
"maximum annual principal and interest coming due thereafter" on
variable rate bonds shall be calculated assuming the variable
rate bonds bear fixed interest at the rates prevailing at the
time of the calculation for utility revenue bonds of comparable
quality, maturity (or remaining maturity) and taxable or tax-
exempt status, provided that other or different assumptions may
be used if necessary to obtain an investment grade credit rating
for the variable rate bonds or to maintain the credit rating(s)
then in effect for the bonds then outstanding.
Such facts shall be shown by the Certificate of the General
Manager of the Board of Water Commissioners and shall be a
finding of and recited in the resolution of the City authorizing
any such additional series. In addition, the following
conditions shall be met:
(a) The payments required to be made (at the time of
the issuance o£ such parity lien bonds} into the various
funds and accounts provided for in this resolution have been
made.
(b) All such parity lien bonds shall have a December 1
maturity or maturities and shall have semiannual interest
payments on June 1 and December 1 in each year; provided
that interest payments may be more frequent than
semiannually or on dates other than June 1 and December 1 if
such interest is paid in full only if at the time of payment
the interesC deposits into the Revenue Bond Debt Service
Account for interest payments on June 1 or December 1, as
appropriate, on other bonds are current, and any
insufficiency of interest on all parity bonds is allocated
proportionately in each six-month period ending June 1 or
December 1, as appropriate.
(a) The proceeds of such parity lien bonds shall be
used only for the purpose of (1) making improvements,
additions, extensions, renewals or replacements to the Water
Utility, and capitalizing interest or establishing Reserves
and paying the costs of such financing, or (2) refunding
parity lien bonds (provided that bonds which refund parity
lien bonds may instead derive their parity lien status from
paragraphs 12 or 18 as applied in paragraph 13).
The Note shall have a priority of lien over the 1996 Note,
and the pledge and appropriation of Net Revenues of the Water
980733.3 1 $
q� �� r
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Utility for the payment of the Note shall be superior to the
pledge and appropriation to the 1996 Note.
12. Refunding Maturing Oblictations. The City also
reserves the right and privilege of issuing additional revenue
bonds if and to the extent needed to refund maturing bonds or
notes or installments thereof payable from the moneys in the
Water Utility Fund in case the moneys in the Revenue Bond Debt
Service Account are insufficient to pay the same at maturity,
which refunding revenue bonds may be on a parity with this issue
as to interest payments even if such interest is in excess of the
interest on the refunded bonds or notes, but shall mature
subsequent to all the revenue obligations which are payable from
the Net Revenues of the Water Utility Fund and which are still
outstanding upon completion of such refunding.
13. Other Revenue Obliaations. Except as authorized
in paragraphs 11, 12 and 18 hereof, the City covenants and agrees
that it will issue or incur no obligations payable from the Net
Revenues of all or a part of said Water Utility or constituting
in any manner a lien thereon, unless such obligations are
expressly made junior and subordinate to the lien and charge of
the Note on said Net Revenues. If obligations which refund the
Note are parity lien bonds or notes, they shall enjoy compl.ete
equality of lien with any portion of the I3ote not refunded and
any other then outstanding bonds or notes payable from the
Revenue Bond Debt Service Account, if any there be, and such
refunding bonds or notes shall continue to have whatever priority
of lien over subsequent issues that the refunded bonds or notes
may have had. If only a portion of the Note shall be refunded
and if such portion of the Note shall be refunded in such manner
that the interest rate of any refunding bond or note shall be
greater than the interest rate of the corresponding refunded
portion of the Note (or the average net interest rate of the
refunding bonds or notes shall be, or shall be reasonably
estimated to be, higher than the average net interest rate of the
refunded portion of the Note), or that the maturity date of any
refunding bond or note shall be earlier than the maturity date of
the corresponding refunded portion of the Note (or the average
maturity of the refunding bonds or notes shall be earlier than
the average maturity of Che refunded portion of the Note), then
the Note may not be refunded without the consent of the holders
of the unrefunded portion of the Note and any other bonds or
notes then outstanding payable from the Revenue Bond Debt Service
Account unless the Net Revenues coverage test of paragraph li is
met.
14.
moneys in the
Account shall
principal then
notes payable
980733.3
Insu£ficient Amounts. In the event that the
Revenue Bond Debt Sesvice Account and Reserve
be insufficient at any particular time to pay the
due and interest then accrued on all bonds or
from the Revenue Bond Debt Service Account, said
19
q �..�qr
moneys shall first be applied to the payment pro rata of the
accrued interest on all such bonds or notes, payable over a
period ending on June 1 or December 1, as appropriate, and any
balance shall be applied in payment pro rata of the principal on
all such bonds or notes, provided further that if it shall ever
be determined by a court of competent jurisdiction while any such
bonds or notes remain outstanding that the sums available and to
become available for the payment of the principal thereof and
interest thereon are insufficient whether or not then due, then
the moneys in the Revenue Bond Debt Service Account and Reserve
Account shall be applied in payment of all principal then
outstanding whether or not then due and the interest accrued
thereon to the date of payment ratably according to the aggregate
amount thereof without any preference or priority.
15. Suit by Holder. The Holder of twenty percent
(200) or more in aggregate principal amount of the Note issued
under this resolution and at any time outstanding may, either at
law or in equity, by suit, action, or other proceedings, protect
and enforce the rights o£ all Holders of the Note or enforce or
compel the performance of any and all of the covenants and duties
specified in this resolution to be performed by the City or Board
or their officers and agents, including the fixing and
maintaining of rates and charges and the collection and proper
segregation of revenues and the application and use thereof.
16. Covenants. For the protection of the Holder of
the Note, the City herein covenants and agrees to and with the
holders thereof from time to time as follows:
(a) It will at all times through its Board adequately
maintain and efficiently operate the Water Utility as a City
utility. It will from time to time make all needful and
proper repairs, replacements, additions and betterments to
the equipment and facilities of said Water Utility so that
they may at all times be operated properly and
advantageously, and whenever any equipment of said system
shall have been worn out, destroyed or otherwise become
insufficient for proper use, it shall be promptly replaced
or repaired so that the value and efficiency of the
facilities shall be at all times fully maintained and its
revenues unencumbered by reason thereo£.
(b) The rates for all water service and the charges
for all water supplied by the Water Utility to the City and
its residents and to all other consumers shall be reasonable
and just, taking into account the cost and value of the
Water i3tility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
principal and interest on the bonds and notes payable from
980733.3 2 �
a �-r9�'
the Net Revenues of-the water Utility, and all other sums
customarily paid from the revenues of the Water Utility.
(c) It will as required by Section 10.11.2 of the City
Charter (and it will continue to do so whether or not
required by said Charter) establish, maintain and collect
such charges and rates as will produce revenues sufficient
to pay the reasonable cost of operation, repair and
maintenance of the Water Utility and to pay the interest on
and principal of the Note and all bonds and notes on a
parity of lien with the Note, as and when they become due,
as well as to provide sufficient money to make the required
appropriations to the various funds and accounts established
herein. The City will review the schedule of rates and
charges for the Water Utility at least annually when the
Board budget is reviewed.
(d) It will not sell, lease, mortgage, or in any manner
dispose of the Water Utility or any part thereof (including
any and all extensions and additions that may be made
thereto) until all revenue bonds and notes payable from the
Net Revenues of the Water Utility or any part thereof have
been paid in full; provided, however, that the City may sell
the Water Utility or any part thereof if simultaneously with
or prior to said sale all of the outstanding bonds are
discharged in accordance with paragraph 18 of this
resolution. This covenant shall not be construed to prevent
the sale by the City at fair market value of real estate,
equipment or other non-revenue-producing properties which in
the judgment of the City have become unnecessary,
uneconomical or ine�cpedient to use in connection with the
Water Utility provided that suitable facilities are obtained
in place thereof and provided further that nothing herein is
intended to prevent the City or Board from terminating or
otherwise preventing the termination of contracts for the
furnishing of water. Notwithstanding the foregoing, the
provisions of the Project Loan Agreement shall be given
effect and may preclude or limit the sale,.lease, mortgage
or disposition of the Water Utility or Project.
(e) It shall cause to be kept proper books, records and
accounts adapted to the Water Utility separate from other
accounts to be audited at the end of each fiscal year. A
copy of said audit shall be £urnished, without cost, to the
Holder of the Note. If the City fails to provide such audit
within a reasonable time after the end of said fiscal year,
the holders of twentiy percent (200) or more of the
outstanding bonds and notzs may cause such audit to be made
at the expense of the City. The expense of preparing such
audit shall be paid as current operating expenses of the
Water Utility. The Holder oE the Note, or its duly
appointed representatives, from time to time shall have the
980733.3
21
Q�.B'q�
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
right, at all reasonable times, to inspect the Water Utility
system and to inspect and copy the books, records, accounts
and data relating thereto. The City agrees to furnish
copies of such audit, without cost, to any Holder or Holders
of the Note at their request within a reasonable time after
the end of each fiscal year. In addition, the City shall
observe the provisions of the Project Loan Agreement and
adhere to the requirements therein as to reporting and the
timing thereof.
(f) It will faithfully and punctually perform all
duties with reference to the Water Utility required by the
City Charter, the Constitution and laws of the State of
Minnesota and this resolution.
(g) It will grant no franchise to any competing
utility.
17. Amendments. No change, amendment, modification or
alteration shall be made in the covenants made with the Holder of
the Note without the consent of the Holders of not less than
sixty percent (60%) in principal amount of the Note then
outstanding except for changes, amendments, modifications and
alterations (a) made to cure any ambiguity or formal defect or
omission, or (b) which woul.d not materially prejudice the Holders
of the Note; provided, however, that nothing herein contained
shall permit or be construed as permitting (1) an extension of
the maturity of the principal of or the interest on the Note, or
(2) a reduction in the principal amount of the Note or the rate
of interest thereon, or (3) a privilege or priority of the Note
over any other bond or bonds or note or notes except as otherwise
provided herein, or (4) a reduction in the aggregate principal
amount of the Note required for consent to any change, amendment,
modification or alteration, or (5) the creation of any lien
ranking prior to or on a parity with the lien of the Note, except
as hereinbefore expressly permitted, or {6) a modification of any
of the provisions of this paragraph without the consent of the
Holders of one hundred percent (100%) of the principal amount of
the Note.
18. Discharae. When all of the Note has been
discharged as provided in this paragraph, all pledges, covenants
and other rights granted by this resolution to the Holder of the
Note shall cease. The City may discharge all of the Note which
is due on any date by depositing with the paying agent (but not
if a City officer is the paying agent) or an escrow agent for the
Note on or before that date a sum sufficient for the payment
thereof in full; or if any of the Note should not be paid when
due, it may nevertheless be discharged by depositing with the
paying agent (but not if a City officer is the paying agent) or
an escrow agent a sum sufficient for the payment thereof in full.
The City may also discharge any prepayable portion of the Note
980733_3
22
qg -dgl
1
2
3
4
5
6
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
4S
49
50
51
which is called for redemption on any date when it is prepayable
according to its terms, by depositing with the paying agent (but
not if a City officer is the paying agent) or an escrow agent on
or before that date an amount equal to the principal, interest
and redemption premium, if any, which are then due, provided that
notice of such redemption has been duly given as provided in this
resolution. The City may also at any time discharge the Note in
whole or in part by complying with the applicable provisions of
Minnesota Statutes, Section 475.67, and any amendments thereto,
except that the funds deposited in escrow in accordance with said
provisions may but need not be in whole or part proceeds of
advance refunding bonds or notes. The City may discharge the
Note as herein provided without the consent of the Holder.
19. Fiscal Year As used in this resolution the words
"fiscal year" shall mean the twelve t12} month period beginning
on January 1 of each year and ending on December 31 of the same
year. Should it be deemed advisable at some later date to change
the fiscal yearly basis, the same may be done by proper actions
to that effect, which change shall not constitute an amendment or
modification of this resolution.
20. Proiect Loan Aareement. The Project Loan
Agreement is hereby approved in substantially the form heretofore
presented to the City Council, and in the form executed is hereby
incorporated by reference and made a part of this resolution.
Each and all of the provisions of this resolution relating to the
Note are intended to be consistent with the provisions of the
Project Loan Agreement, and to the extent that any grovision in
the Project Loan Agreement is in conflict with this resolution as
it relates to the Note, that provision shall control and this
resolution shall be deemed accordingly modified. The Mayor and
Director, Office of Financial Services, are hereby authorized and
directed to execute the Project Loan Agreement. The execution of
the Project Loan Agreement by the appropriate officers shall be
conclusive evidence of the approval of the Project Loan Agreement
in accordance with the terms hereof. The Project L,oan Agreement
may be attached to the Note, and shall be attached to the Note if
the holder of the Note is any person other than the PFA.
21. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the PFA, and to the attorneys approving the legality of the
issuance of the Note, certified copies of all proceedings and
records of the City relating to the Note and to the financial
condition and affairs of the City, and such other affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Note as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
980733.3
23
c�g�. �'98'
furnished, shall be deemed representations of the City as to the
facts recited therein.
22. Necrative Covenants as to Use of Proceeds and
Pro�ect. The City hereby covenants not to use the proceeds of
the Note or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangements for the
cost of the Project, in such a manner as to cause the Note to be
a"private activity bond" within the meaning of Sections 103 and
141 through 150 of the Code. The City reasonably expects that no
actions will be taken over the term of the Note that would cause
it to be a private activity bond, and the average term of the
Note is not longer than reasonably necessary for the governmental
purpose of the issue. The City hereby covenants not to use the
proceeds of the Note in such a manner as to cause the Note to be
a"hedge bond" within the meaning of Section 149(g) of the Code.
The City hereby covenants not to use the proceeds of
the Note or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangement for the
cost of the Project, in such a manner as to cause the PFA Bonds
to be "private activity bonds" within the meaning of Sections 103
and 141 through 150 of the Code. The City reasonably expects
that it will take no actions over the term of the Note that would
cause the PFA Bonds to be private activity bonds, and the average
term of the Note is not longer than reasonably necessary for its
governmental purpose.
23. Tax-ExemDt Status of the Note: Rebate: Elections.
The City shall comply with requirements necessary under the Code
to establish and maintain the exclusion from gross income under
Section 103 of the Code of the interest on the Note, including
without limitation requirements relating to temporary periods for
investments, limitations on amounts invested at a yield greater
than the yield on the Note, and the rebate of excess investment
earnings to the United States.
If any elections are available now or.hereafter with
respec� to arbitrage or rebate matters relating to the Note, the
Mayor, Clerk, Treasurer and Director, Office of Financial
Services, or any of them, are hereby authorized and directed to
make such elections as they deem necessary, appropriate or
desirable in connection with the Note, and all such elections
shall be, and shall be deemed and treated as, elections of the
City.
24. Tax-Exem�t Status of the PFA Bonds:
City with respect to the Note shall comply with re�
necessary under the Code to establish and maintain
from gross income under Section 103 of the Code of
on the PFA Bonds, including without limitation (1)
relating to temporary periods for investments, i2)
Rebate. The
uirements
the exclusion
the interest
requirements
limitations on
980733.3 2 4
��.�,�.a.� _ �e �-►1 � r
amounts invested at a yield greater than the yield on the PFA
Bonds, and {3) the rebate of excess investment earnings to the
United States. The City covenants and agrees with the PFA and
holders of the Note thaC the investments of proceeds of the Note,
incZuding the investment of any revenues pledged to the Note
which are considered gross proceeds of the PFA Bonds under the
applicable regulations, and accumulated sinking funds, if any,
shall be limited as to amount and yield in such manner that the
PFA Bonds shall not be arbitrage bonds within the meaning of
Section 148 of the Code and any regulations thereunder. On the
basis of the existing facts, estimates and circumstances,
including the foregoing findings and covenants, the City hereby
certifies that it is not expected that the proceeds of the Note
will be used in such manner as to cause the PFA Bonds'to be
arbitrage bonds under Section 148 of the Code and any regulations
thereunder. The Mayor, Clerk and Director, Office of Financial
Services, shall furnish a certificate to the PFA embracing or
based on the foregoing certification at the time of delivery af
the Note to the PFA.
25. No Desicxnation of Oualified Tax-ExemDt Obligation
The Note, together with other obligations issued by the City in
1998, exceeds in amount those which may be qualified as
"qualified tax-exempt obligations" within the meaning of Section
265(b)(3) o£ the Code, and hence is not designated for such
purpose.
26. Parity Findinas. It is hereby found, determined
and declared that:
(a) Neither the City nor the Board has any outstanding
bonds, warrants, certificates, or other obligations or
evidences of indebtedness, or money borrowed for or on
account of the Water Utility or indebtedness for which any
of the Net Revenues of all or a part of the Water Utility
have been pledged or which are a prior lien on such Net
Revenues, except the 1993 Bonds and 1997 Bonds and the
subordinate 1996 Note.
(b) All payments required to be made prior to the date
hereof into the various funds and accounts of the "Water
Utility Fund" established pursuant to the resolutions of
this City Council which authorized the issuance of the 1993
Bonds and 1997 Bonds have been made.
(c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
the Note have been more than one and one-half (1.5) times,
specifically 2.027 and 1.824 times, respectively, the maximum
annual principal and interest coming due hereafter on all
outstanding revenue obligations payable from and having a
980733.3 Z 5
�A W.�w1.� - �e � -, � a�' �,�q�
q
parity of lien upon the Net Revenues, being the 1993 Bonds
and 1997 Bonds, and the Note as the obligation proposed to be
issued, to wit:
Net Revenues 1996 $11,190,732
Net Revenues 1997 $10,070,410
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and
Interest on the Note
Maximum Annual Principal and
Interest on the 1993 Bonds,
1997 Bonds, and Note
(COMBTNED)
One and One-half (1.5) Times
Total Maximum Annual Principal
and Interest Requirements
$ 1,989,432
$ 1,101,818
$ 1,616,868
$ 3,680,451
$ 5,520,676.50
This City Council has been furnished with the CerCificate of
the General Manager of the Water Utility attesting to the
foregoing facts.
(e) This City Council pursuant to advice from the
Board hereby finds, determines and declares that the
estimated revenues to be derived from the operation of the
Water Utility during the term of the Note will be more than
sufficient to provide Net Revenues adequate to pay principal
and interest when due on the Note and on those otlier bonds
which are now outsCanding and to maintain the Reserves
required therefor.
(f) The Note has a December 1 maturity or maturities
and has interest payments on June 1 and December l, and is
in compliance with the other requirements for parity bonds.
(g) The proceeds of the Note shall only be used for
the purpose of making improvements, additions, extensions,
renewals or replacements to the Water Utility, and
capitalizing interest or establishing Reserves and paying
the costs of such financing.
(h) As required by paragraph 10 of the resolution
authorizing the 1996 Note, estimated Net Revenues of the
Water Utility will be sufficient, in addition to all other
sources, for the payment of the 1946 Note and Note.
980733.3 2 6
'' �
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
27. Consent to Representation. The City hereby
consents to the representation by Briggs and Morgan, Professional
Association, which is acting as the City�s bond counsel with
respect to the Note, of the PFA with respect to the PFA Bonds and
the Note as the PFA's bond counsel pursuant to a special attorney
appointment by the Attorney General of the State of Minnesota.
28. Covenant with xolders. Each and all of the terms
and provisions of this resolution shall be and constitute a
covenant on the part of the City to and with each and every
Holder from time to time of the Note.
29. Resolutions Supplemented. The resolutions
authorizing the issuance of the 1993 Bonds, 1997 Bonds and 1996
Note are hereby supplemented to the extent necessary to give
effect to the provisions o£ this resolution.
30. Severabilitv. If any section, paragraph or
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
31. Headinas. Headings in this resolution are
included for convenience of reference only and are not a part
hereof, and shall not limit or define the meaning of any
provision hereof.
Requested by DepaRment of.
Office of ancial Services
Sy: '
Form A�ved Ci ome �,
7
B
Approv v Mav or �sfbh to Council
Adopted by Council: Date �!� • ? �� �11D
Adoption Certified by Council
g � .
Approved 6y Mayor: Date _
By:
980733.3
�
iol�l� ��,
STATE OF MINNESOTA )
COUNTI' OF I2AMSEY ) ss _ CERTIFICATE
CITY OF SAINT PAUL )
I, the undersigned, being the duly qualified and acting
General Manager of the Water Utility of the City of Saint Paul,
Minnesota, in accordance with the provisions of paragraphs 18 and
18, respectively, of those certain resolutions which provided for
the issuance and sale of $11,175,000 Water Revenue Refunding
Bonds, Series 1993E, adopted on June 15, 1993, and of $7,000,004
Water Revenue Refunding Bonds, Series 1997C, adopted on June 11,
1997, each by the City Council of the City of Saint Paul,
Minnesota, do hereby certify as follows: "`
1. All payments required to be made prior to the date
hereof into Che various funds and accounts of the ��Water Utility
Fund" established pursuant to said resolutions of the City
Council have been made.
2. The annual net revenues of the Water Utility of
the City of Saint Paul, Minnesota, for eaoh of the two (2)
completed fiscal years immediately preceding the proposed
issuance of the City's $16,500,000 Water Revenue Notie of 1998,
have been at least one and one-half i1.5) times, specifically
2.027 and 1.524 times, respectively, the maximum annual principal
and interest coming due after December l, 1997, on all
outstanding revenue obligations payable from and having a parity
of lien upon the Net Revenues of the Water Utility Fund (as such
terms are defined in said resolutions of the City Council),
including the obligations proposed to be issued, to wit:
Net Revenues 1996
Net Revenues 1997
$11,190,732
$10,070,410
Maximum Annual Principal and
Interest on $11,175,000 Water
Revenue Refunding Bonds,
Series 1993E $1,989,432
Maximum Annual Principal and
Interest on $7,000,000 Water
Revenue Refunding Bonds,
Series 1997C $1,101,818
Maximum Annual Principal and
Interest on $16,500,000 Water
Revenue Note of 1998
$1,616,868
980501.3 7,
Maximum Annual Principal
and Interest on all such
obligations
(COMBINED FOR JOINT
HIGHEST YEAR, NOT SUM OF
INDIVIDUAL HIGHEST YEARS)
One and One-half (1.5) Times
Total Maximum Annual Principal
and Interest Requirements
1 °l�l��',���
q$
$3,680,451
$5,520,676.50
980501.3 2
�
WITNESS my hand this S v day of October, 1998.
�.�i�-� C c��*-�'`�`'`.c-��
General Manager
CERTIFICATE OF THE
CITY OF SAINT PAUL,
1998 of the City of
980501.3
,b�����
G ���
4
GENERAL MANAGER OF THE WATER UTILITY OF THE
relating to $16,500,000 Water Revenue Note of
Saint Paul, Minnesota.
3
qg � g�
of Fnarxial Serrices � osmiss
.CT PERSON & PFiONE
iurleY 266-8837
3E ON COUNCIL AGENDA Bv (DA7t7
ASSIGN
� �'�� NUMBERFOR
ROUTIMG
ORDER
TOTAL # OF SIGNATURE PAGES _1
GREEN SHEET
oer�arre�r onreron
No 60037
ufrcoUlC{.
❑Z QS'lATTqtlET ❑t31'(ttHIK
❑ RlRMCJALSErtNCESMt ❑ NWNWLtFAV/ACCT6
� IuYOR1oRllsaziAXiT � �Tw�y
(CLJP ALL LOCATIONS FOR SIGNATURE)
ached resolutbn accepts the offer ot the Minnesota Public Facil'fies ANhority (PFA) to purchau a$16,500,000
Revenue Note of 1998, provWe fw its issuance aM author¢e qtecution of the projed ban agreement.
PLANNING COMMISSION
CIB COMMITTEE
CIVIL SERVICE CAMMfSSION
SONAL SERVICE CONTRACTS MUST ANSWER TXE FOLLOWING GUESTIC
Has this persoNfirm ever wqked under a contract for this tlepaRmeM?
YES NO
Has this persoMrm ever 6een a cily employee?
YES NO
Does this perso�im possess a skill not normally possessed by any curteM cM1y empoyee?
YES NO
Is this person(fitm a fafgeted vendo(?
YES NO
What, When,
loan application tor 516,500,000 to the PFA has been approvetl by [he State 7he procedure to folow
for the Ciry ro issue a Note M the State for that amount. The Loan is interest free u�il December 1, 1998, antl after
at date bears iMerest at a rate of 3.48% per annum. The instaliments are for 20 yeats. 1999 through 2(I18.
V�MOi10ti I�GalGG14f: 6Yi"f'.'�bv9
� ����
� -.
City �eceives a loan from the S[ate that 6�rs irReres[ at a ra[e of 3.46%, which �s well below market rates.
Cdy bses the opportuniry to Dorrax funds (rom the SYate at a low rate, to wpport the Water DepartmenYs
OF TRANSACTION S s+s.soo.aao
SOURGE
COSTIREVENUE BUDGEfED (CIRCLE ON�
ACTIVITY NUMBER
YES NO
(IXPWN)
INTERDEPARTMENTAL MEMORANDUM
CITYOFS4A�TPAUL
October 5, 1998
To: Nancy Anderson
From: Todd Hurley l ��
Re: Changes for October 7, 1998 Council Meeting
Nancy,
Please see the attached pages:
1.) Replacement Page 3 for item # 35 - Resolution 98-897 (1 original, 7 copies)
2.) Replacement Pages 15, 16, 25, 26 for item # 36 - Resolution 98-898 (1 original, 7
copies)
, . }
' , 1
3.) Certificate of the ('seneral Maz�ager of the Water Utility of the
City of Saint Paul — as a supplement to Resolution 98-898. (1 original, 7 copies)
�
1
2
3
4
5
6
7
8
9
10
li
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
said account when the moneys held therein are suf£ici�t for
the payment of all principal and interest due on sa d`�bonds
and notes on and prior to the next maturity date. o money
shall be paid out of said account except to pay p�ncipal,
premium, if any, and interest on the Note and an other
bonds or notes which are issued on a parity wit the Note.
(d) A"Reserve Account", which was heret�ofore created,
and is hereby continued, to be used only whe� and if moneys
in the Revenue Bond Debt Service Account or ther moneys
available therefor are insufficient to pay rincipal,
premium, if any, and interest on the Note nd other bonds
and notes payable from the Revenue Bond bt Service
Account; provided, however, that the mo ys in the Reserve
Account may be used to prepay said bon and notes, when
such prepayment will retire all of th bonds and notes then
outstanding. $1,650,000 from the Cit s Account
shall be deposited in the Reserve A ount upon the issuance
of the Note, and amounts already i the Reserve Account
pursuant to the resolutions autho 'zing the issuance of the
1993 Bonds and 1997 Bonds shall e maintained therein upon
the issuance of the Note to the extent necessary to equal
the amount required to be mai ained in the Reserve Account
as set £orth below, being in' ially amounts required for the
1993 Bonds, 1997 Bonds and ote. Whenever the moneys in the
Reserve Account exceed the amount required to be maintained
in the Reserve Account as set forth below, such excess may
be transferred to the R enue Bond Debt Service Account; and
whenever the moneys in he Reserve Account shall be less
than said amount, the eserve Account shall be restored to
said amount from the next available Net Revenues. The
amount required to e maintained in the Reserve Account
shall be an amoun equal to the lesser of: (1) ten percent
(l00) of the ori nal principal amount of the Note and other
bonds payable f m the Revenue Bond Debt Service Account
issued after t e 1993 Bonds on a parity of lien therewith,
or (2) the ma imum principal and interest due in any year on
the bonds an notes payable from the Revenue Bond Debt
Service Acc unt; and whenever the moneys in the Reserve
Account ex eed such amount required to be maintained
therein, uch excess may be transferred to the Revenue Bond
Debt Ser ice Account. When only bonds or notes issued after
the 199 Bonds are outstanding, the "maximum principal and
inter t due in any year" on variable rate bonds shall be
calc ated at such time (for any variable rate bonds issued
pri to such time) or in connection with their issuance
(f variable rate bonds issued after such time) assuming
t variable rate bonds bear fixed interest for the
mainder of their terms or for their terms, as appropriate,
t the rates prevailing at such time (for any variable rate
bonds issued prior to such time) or at the time of their
issuance (for variable rate bonds issued after such time)
.3
15
ar . � r
for utility revenue_bonds of comparable quality, matur�ty
and taxable or tax-exempt status, provided that othe.� or
different assumptions may be used if necessary to �tain an
investment grade credit rating for the variable r�te bonds
or to maintain the credit rating(s) then in eff�t for the
bonds then outstanding.
(e) Net Revenues in excess of those rec�uired for the
foregoing purposes may be used for any prop�(r purpose.
(f) The money in the Water Utility F nd shall be
allotted and paid to the various accounts herein established
in the order in which said accounts are isted on a
cumulative basis, and if in any month t e money in said
accounts is insufficient to place the equired amount in any
accounts, the deficiency shall be mad up in the following
month or months after payment into a other accounts having
a prior claim on said Net Revenues ve been made in fu11.
(g) All money held in the R enue Bond Debt Service
Account and the Reserve Account eated by this resolution
shall be kept separate and apar from all other municipal
funds and accounts.
(h) Notwithstanding a thing to the contrary herein,
moneys in the Water Utilit Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 19 3 Bonds, 1997 Bonds and Note to be
paid to the United Sta s in order to maintain the exclusion
from gross income und Section 103 of the Code (as
hereinafter defined) of the interest on the 1993 Bonds, 1997
Bonds and Note.
(i) Acco
with a lien on
Note shall be
resolutions a�P
created for bonds, notes or obligations
Revenues subordinate to the lien of the
ained and operated as required by the
zina the same.
(j) portion of the proceeds of the Note shall be
used dire ly or indirectly to acquire higher yielding
investme s or to replace funds which were used directly or
indirec y to acquire higher yielding investments, except
(1) fo a reasonable temporary period until such proceeds
are n eded for the purpose for which the Note was issued,
(2) s part of a reasonably required reserve or replacement
fun not in excess of ten percent (10%) of the proceeds of
th Note (or in a higher amount which the City establishes
i necessary to the satisfaction of the Secretary of the
reasury of the United States), and (3) in addition to the
above in an amount not greater than the lesser of five
percent (So) of the proceeds of the Note or $100,000. To
this effect, any proceeds of the Note and any sums from time
33.3 16
I � �•
amounts invested at a yield greater than the yield on the PFA
Bonds, and (3) the rebate of excess investment earnings to the
United States. The City covenants and agrees with the PFA and
holders of the Note that the investments of proceeds of the Note,
including the investment of any revenues pledged to the Note
which are considered gross proceeds of the PFA Bonds under the
applicable regulations, and accumulated sinking funds, if any
shall be limited as to amount and yield in such manner that e
PFA Bonds shall not be arbitrage bonds within the meaning
Section 148 of the Code and any regulations thereunder. the
basis of the existing facts, estimates and circumstances
including the foregoing findings and covenants, the Ci hereby
certifies that it is not expected that the proceeds o the Note
will be used in such manner as to cause the PFA Bond to be
arbitrage bonds under Section 148 of the Code and y regulations
thereunder. The Mayor, Clerk and Director, Offic of Financial
Services, shall furnish a certificate to the PFA mbracing or
based on the foregoing certification at the tim of delivery of
the Note to the PFA.
25. No Desi nation of ualified ax-Exem t Obli ation
The Note, together with other obligations ssued by the City in
1998, exceeds in amount those which may e qualified as
"qualified tax-exempt obligations" wit n the meaning of Section
265(b)(3) of the Code, and hence is t designated for such
purpose.
26. Paritv Findinqs. t is hereby found, determined
and declared that:
(a) Neither the ity nor the Board has any outstanding
bonds, warrants, ce ificates, or other obligations or
evidences of inde edness, or money borrowed for or on
account of the ter Utility or indebtedness for which any
of the Net Rev nues of all or a part of the Water Utility
have been pl ged or which are a prior lien on such Net
Revenues, cept the 1993 Bonds and 1997 Bonds and the
subordina e 1996 Note.
( All payments required to be made prior to the date
hereo into the various funds and accounts of the "Water
Uti ty Fund" established pursuant to the resolutions of
th' City Council which authorized the issuance of the 1993
B ds and 1997 Bonds have been made.
' (c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
the Note have been more than one and one-half (1.5) times,
specifically and times, respectively, the maximum
annual principal and interest coming due hereafter on all
outstanding revenue obligations payable from and having a
980733.3
25
a$ -��►�
parity of lien upon the Net Revenues, being the
and 1997 Bonds, to wit:
Net Revenues 1996
Net Revenues 1997
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and �
Interest on the Note
Maximum Annual Principal
Interest on the 1993 Bon
1997 Bonds, and Note
(COMBINED)
One and One-half (1.5)
Total Maximum Annual k
and Interest ReauireR'�e
This City Council has
the General Manager o
foregoing facts. J
Bonds
$
$
$1,989,432
$1,101,818
$1,616,868
$3,680,451
$5,520,676.50
furnished with the Certificate of
Water Utility attesting to the
(e) This Cit Council pursuant to advice from the
Board hereby find , determines and declares that the
estimated reven s to be derived from the operation of the
Water Utility ring the term of the Note will be more than
sufficient to rovide Net Revenues adequate to pay principal
and interest hen due on the Note and on those other bonds
which are n outstanding and to maintain the Reserves
reguired t erefor.
(f) The Note has a December 1 maturity or maturities
and has interest payments on June 1 and December l, and is
in co liance with the other requirements for parity bonds.
/(g) The proceeds of the Note shall only be used for
purpose of making improvements, additions, extensions,
wals or replacements to the Water Utility, and
talizing interest or establishing Reserves and paying
costs of such financing.
(h) As required by paragraph 10 of the resolution
authorizing the 1996 Note, estimated Net Revenues o£ the
Water Utility will be sufficient, in addition to all other
sources, for the payment of the 1996 Note and Note.
980733.3 2 6
C � ,���
From: Shiriey Davis '"��
To: STPAUL.apigate.Council, fabei, H2O.WATER.bernieb, ...
Date: 10/5/98 1;17pm
Subject: Agenda 10-7--#'s 35,36,37
The Council Agenda for this Wednesday, October 7, 1998 includes three itesr.s which
are City Treasury related. 1 apologize. f cannot be at the Council meeting, as I
expected, on that day. I will be attending a family funeral on Wednesday.
I wili be in the o�ce until 4:30 today. If you have questions, please contact me at
266-8839. I will be out of the office on Tuesday and Wednesday, back in on Thursday,
10-8. lf, during my absence, you wish further information, please contact Todd Huriey
in Treasury at 266-8837.
The following information is relevant to items #35, 36, and 37.
#35: 98-897 is the resolution authorizing a$3,000,000 lease loan from Narwest Bank
for the City Ha11 Annex remodeling financing. There wil4 be a changed page to the
resolution which authorizes the City Treasury to bring the $3,000,000 in-house to invest
within the City's portfolio. This will provide a higher interest rate return for the funds,
rather than having Nonvest Bank hold and invest the money. (The lease for the
RiverCentre also allowed me to invest the money). I did bid this lease and Norwest won
the bid. Also, the Council has previously approved the budget for the $3,d00,000; this
lease provides the financing.
#36: 98-898 is the resolution accepting a State of Minnesota loan (PFA) for Water
Utility financing in the amount of $16,500,000. The rate is 3.4% The Water Board
knows of this financing and will be approving the Council's actions on October 13, 1998.
There wi41 be some changed pages (filling in the blanks) and a Certificate of the Water
Utility General Manager filed with the Council today, Monday, October 5, 1998. These
are houskeeping additions. Closing the financing and accepting the funds from the
state wili occur after City Council and Water Board approval.
#37 98-899 is the resolution approving 1998 State Law for Capital Improvement
Bonding (C1B) authority. For the Vaw to be effective, there must be local approval. The
previous law ended with 1998 bonding limits. This law provides for future financing
ratios. All limits on general obligation CIB debt must fail within criteria set by the State
Legislafure. As you know, after approval by the City's Capital Improvement Committee,
CIB bonding is always approved by the City Council on an annual basis.
Thank you. ........ Shirley...........
p,�,.�- ����
1 �lf.� �
RESOLUTION as, aa
' OF SAINT PAUL, MINNESOTA
Presented By
Referred To
36
Committee: Date
ACCEPTING THE OFFER OF
3 THE MINNESOTA PUBLIC FACILITIES AUTHORITY TO PURCHASE
4 A$16,500,000 WATER REVENUE NOTE OF 1998,
5 PROVIDING FOR ITS ISSUANCE, AND AUTHORIZING
6 EXECUTION OF A PROJECT LOAN AGREEMENT
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
A. WHEREAS, the City Council of the City of Saint
Paul, Minnesota (��City"), has heretofore applied for a loan from
the Minnesota Public Facilities Authority (the "PFA") to provide
financing pursuant to the City's home rule charter and Minnesota
Statutes, Chapter 475, for three separate building additions
to the water treatment faciZity (coZZectiveZy, the "Project"1 as
various improvements to the City's municipal water utility (the
"Water Utility"), which has since its acquisition in 1885 been
under the jurisdiction of the Board of Water Commissioners (the
"Board'�); and the Board and this Council deem it necessary and
expedient to undertake the Project; and
B. WHEREAS, the PFA is authorized pursuant to
Minnesota Statutes, Chapter 446A, as amended, to issue its bonds
(the "PFA Bonds") and to use the proceeds thereof, together with
certain other funds, to provide loans to municipalities to fund
eligible costs of construction of publicly owned drinking water
systems in accordance with the federal Drinking Water
Infrastructure Financing Act; and
C. WHEREAS, the City has applied for a loan from the
PFA pursuant to such program, and the PFA has committed to make a
loan to the City in the principal amount of $16,500,000, to be
disbursed and repaid in accordance with the terms of a Public
Facilities Authority Project Loan Agreement and Revenue Bond
Purchase Agreement (the "Project Loan Agreement") executed by the
PFA and City, a copy of which is before this meeting and on file
with the Clerk; and the Project Loan Agreement, as executed, is
incorporated by reference; and
D. WHEREAS, the
(the "Note" or "1998 Note")
addition the City will need
PFA Bonds; and
$16,500,000 Water Revenue Note of 1998
of the City is tax-exempt, and in
to assure the tax-exemption of the
Council File # — \6 ^ p ►O
Green Sheet # �D w.�
980733.3
`�g
E. WHEREAS, in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(41, the City is authorized to issue
obligations to a board, department or agency of the State of
Minnesota by negotiation and without advertisement for bids and
the PFA is, and has represented that it is, a board, department
or agency of the State of Minnesota; and
8 F. WHEREAS, there are currently outstanding bonds of
9 the City payable from Net Revenues of the City's Water Utility,
10 specifically the City's (a) $11,175,000 Water Revenue Bonds,
11 Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
12 adopted by this Council on June 15, 1993, of which $6,160,000
13 remain outstanding, and (b) $7,000,000 Water Revenue Refunding
14 Bonds, Series 1997C (the "1997 Bonds"), issued pursuant to a
15 resolution adopted by this Council on June 11, 1997, of which
16 $7,000,000 remain outstanding; and there is currently outstanding
17 a general obligation note of the City payable on a subordinate
18 lien basis from Net Revenues of the City's Water Utility,
19 specifically the City's $4,269,844 General Obligation Wastewater
20 Treatment Water Revenue Note of 1996 (the "1996 Note"), issued
, 21 pursuant to a resolution adopted by this Council on May 15, 1996,
22 of which $4,109,327.77 remains outstanding; and the 1997 Bonds
23 refunded bonds issued in 1994, all of which have been retired
24 (the '�1994 Bonds"); and
G. WHEREAS, it is necessary and desirable to provide
for the issuance of the Note on a parity of lien with the 1993
Bonds and 1997 Bonds and with a priority of lien over the 1996
Note; and
A. WHEREAS, paragraph 18 of the resolution
authorizing the issuance and sale of the 1997 Bonds provides for
the issuance of parity lien bonds as follows:
"18. Parity Bonds. The 1993 Bonds and 1997 Bonds
sha1Z be a first charge and lien upon the Net Revenues
of the Water Utility. No part of such Net Revenues
shall be pledged to the payment of any general
obligation bonds issued by the City while any 1993
Bonds or 1997 Bonds or bonds issued on a parity there-
with remain outstanding and undischarged, unless the
pledge of Net Revenues to such general obligation bonds
is expressly made a second and subsequent lien and the
City and Board covenant to make the rates and charges
of the Water Utility sufficient to timely pay such
general obligation bonds. No additional revenue
obligations payable from the Revenue Bond Debt Service
Account shall be hereafter issued unless the same are
expressly made a second and subsequent lien upon the
Net Revenues of the Water Utility; provided, however,
that additional obligations may be issued on a parity
of lien with the 1997 Bonds, provided that the annual
980733.3
E
I •
� �
� � �
1
2
3
4
5
6
7
8
9
10
11 "
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Net Revenues of said Water Utility for each of the two
(2) completed fiscal years immediately preceding the
issuance of such additional obligations shall have been
one and one-half (1.5) times the maximum annual
principal and interest coming due thereafter on all
outstanding revenue obligations payable from and having
a parity of lien upon the Net Revenues of the Water
Utility Fund, including the additional obligations so
to be issued; provided further, however, that if the
annual Net Revenues in either or both of the aforesaid
two (2) completed fiscal years shall be insufficient to
meet this test then any reasonably projected increase
in Net Revenues for the fiscal year immediately
following such second completed fiscal year may be
added to the Net Revenues for such completed fiscal
years or either of them (but the total of such
projected increase in Net Revenues may be added only
once) in applying the foregoing test. For purposes of
the foregoing limitations, when only bonds issued after
the 1994 Bonds are outstanding, the "maximum annual
principal and interest coming due thereafter" on
variable rate bonds shall be calculated assuming the
variable rate bonds bear fixed interest at the rates
prevailing at the time of the calculation for utility
revenue bonds of comparable quality, maturity (or
remaining maturity) and taxable or tax-exempt status,
provided that other or different assumptions may be
used if necessary to obtain an investment grade credit
rating for the variable rate bonds or to maintain the
credit rating(s) then in effect for the bonds then
outstanding. Such facts shall be shown by the
Certificate of the General Manager of the Board of
Water Commissioners and shall be a finding of and
recited in the resolution of the City authorizing any
such additional series. In addition, the following
conditions shall be met:
��(a) The payments required to be made (at
the time of the issuance of such parity lien
bonds) into the various funds and accounts
provided for in this resolution have been made.
"(b) All such parity lien bonds shall have a
December 1 maturity or maturities and shall have
semiannual interest payments on June 1 and
December 1 in each year; provided that interest
payments may be more frequent than semiannually or
on dates ather than June 1 and December 1 if such
interest is paid in full only if at the time of
payment the interest deposits into the Revenue
Bond Debt Service Account for interest payments on
June 1 or December 1, as appropriate, on other
980733.3
3
1
�
qY •
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
bonds are current, and any insufficiency
interest on all parity bonds is allocated
proportionately in each six-month period
June 1 or December l, as appropriate.
of
ending
"(c) The proceeds of such parity lien bonds
shall be used only for the purpose of (1) making
improvements, additions, extensions, renewals or
replacements to the Water Utility, and capital-
izing interest or establishing Reserves and paying
the costs of such financing, or (2) refunding
parity lien bonds (provided that bonds which
refund parity lien bonds may instead derive their
parity lien status from paragraphs 19 or 25 as
applied in paragraph 20)."; and
I. WHEREAS, for purposes of this resolution paragraph
18 of the resolution authorizing the issuance and sale of the
1993 Bonds is substantively identical to said paragraph 18
relating to the 1997 Bonds; and
J. WHEREAS, herein the City makes various findings
demonstrating the propriety of the issuance of the Note on a
parity with the 1993 Bonds and 1997 Bonds; and
K. WHEREAS, in accordance with advice received from
the Board, this Council finds, determines and declares that it i�
necessary and expedient to provide moneys to finance the Project,
continue a Reserve previously established, and provide for the
costs of the issuance of the Note from the proceeds of
obligations payable solely from the Net Revenues of the Water
Utility; and
L. WHEREAS, a contract or contracts for the Project
have been made by the City with the approval of the PFA and all
other state and federal agencies of which approval is required:
NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Saint Paul, Minnesota, as follows:
1. Acceptance of Offer; Pavment. The offer of the
Minnesota Public Facilities Authority (the "PFA" or "Purchaser")
to purchase a$16,500,000 Water Revenue Note of 1998 of the City
(the "Note" or "1998 Note"), at the rates of interest hereinafter
set forth, and to pay for the Note the sum of $16,500,000 as
provided below, is hereby accepted, and the sale of the Note is
hereby awarded to the PFA. Payment for the Note shall be
disbursed in installments as eligible costs of the Project are
reimbursed or paid, all as provided in the Project Loan
Agreement.
980733.3
0
q�•dqt
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
2. Title• Date• Denomination; Interest Rates;
Maturities The Note shall be a fully registered negotiable
obligation, shall be titled "Water Revenue Note o£ 1998", shall
be dated as of the date of delivery and shall be issued
forthwith. The Note shall be in the principal amount of
$16,500,000, or so much thereof as shall be disbursed pursuant to
the Project Loan Agreement, shall bear no interest until December
1, 1998, and from and after December 1, 1998, shall bear interest
on so much of the principal amount of the Note as (i) may be
disbursed from time to time as provided in the Project Loan
Agreement and (ii) remains unpaid, from December 1, 1998, for
disbursements made on or prior to that date or from the date of
each later disbursement until the principal amount of the Note
has been paid or has been provided for, at the rate of three and
forty-eight hundredths percent (3.480) per annum (calculated on
the basis of a 360-day year of twelve 30-day months). Interest
on the Note is payable semiannually on June 1 and December 1,
commencing June l, 1999. Principal on the Note shall mature on
December 1 of the years and in the installments as follows:
Year
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Amount
$ 15,000
605,000
750,000
775,000
955,000
990,000
1,185,000
1,030,000
965,000
925,000
Year
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Amount
$ 910,000
960,000
915,000
515,000
980,000
1,085,000
625,000
715,000
965,000
635,000
Interest shall accrue only on the aggregate amount of
the Note which has been disbursed and is unpaid under the Project
Loan Agreement. The principal installments shall be paid in the
amounts scheduled above even if at the time of payment the full
principal amount of the Note has not been disbursed; provided
that if the full principal amount of the Note is never disbursed,
the amount of the principal not disbursed shall be applied to
reduce each unpaid principal installment in the proportion that
such installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments). Principal, interest and any premium due under the
Note will be paid on each payment date by wire payment, or by
check or draft mailed the last business day prior to the payment
date to the person in whose name the Note is registered, in any
coin or currency of the United States which at the time of
payment is legal tender for public and private debts.
980733.3
qg -89d
1
2
�
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
Interest on the Note includes amounts treated by the
PFA as service fees.
3. Purpose: Cost. The proceeds of the Note shall
provide funds to finance acquisition and construction of the
Project. The proceeds of the Note shall be deposited and used as
provided in paragraph 10. The total cost of the construction of
the Project, including legal and other professional charges,
publication and printing costs, interest accruing on money
borrowed for the Project before the collection of Net Revenues
pledged and appropriated therefor, and all other costs neces-
sarily incurred and to be incurred from the inception to the
completion of the Project, is estimated to be at least equal to
the amount of the Note. The City covenants that it shall do all
things and perform all acts required of it to assure that work on
the Project proceeds with due diligence to completion and that
any and all permits and studies required under law for the
Project are obtained.
4. Redemption. The Note shall be subject to
redemption and prepayment in whole or in part at the option of
the City or mandatorily as provided in the Project Loan
Agreement. If redemption is in part, each installment of
principal shall be prepaid in the proportion that such
installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments), unless the City and the holder of the Note agree to a
different result.
5. Reaistration of Note. At the time of issuance and
delivery of the Note, the officer of the City performing the
functions of the treasurer (the "Treasurer") shall register the
Note in the name of the payee in a note register which she and
her successors in office shall maintain for the purpose of
registering the ownership of the Note. The Note shall be
prepared for execution with an appropriate text and spaces for
notation of registration. The force and effect of such regis-
tration shall be as stated in the form of Note hereinafter set
forth. Payment of principal installments and interest, whether
upon redemption or otherwise, made with respect to the Note, may
be made to the registered holder thereof or to his, her or its
legal representative, without presentation or surrender of the
Note.
Certificate of
the following
Form of Note. The Note, together with the
Registration thereon, shall be in substantially
form:
980733.3
� $.�'9Y
1
2
3
4
5
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
$16,500,000 WATER REVENUE NOTE OF 1998
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Saint Paul, Ramsey County, Minnesota (the "City"), certifies that
it is indebted and for value received promises to pay to the
Minnesota Public Facilities Authority or the registered assign,
the principal sum of SIXTEEN MILLION FIVE HUNDRED THOUSAND
DOLLARS, or so much tihereof as shall be disbursed, solely from
the source and in the manner hereinafter set forth, on December 1
of the years and in the installments as follows:
Year
1999
2000
2001
2002
2003
2�04
2005
2006
2007
2008
Amount
Year
Amount
$ 15,000
605,000
750,000
775,000
955,000
990,�00
1,185,000
1,030,000
965,000
925,000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
$ 910,000
960,000
915,000
515,000
980,000
1,085,000
625,000
715,000
965,000
635,000
and to pay interest on so much of the principal amount of the
debt as (i) may be disbursed from time to time as provided in the
Project Loan Agreement (as defined below) and (ii) remains
unpaid, from December 1, 1998, for disbursements made on or prior
to that date or from the date of each later disbursement until
the principal amount hereo£ is paid or has been provided for, at
the rate of zero percent (O.Oo) per annum from the date hereof
until December 1, 1998, and from and after December 1, 1998, at
the rate of three and forty-eight hundredths percent (3.48%) per
annum (calculated on the basis of a 360-day year of twelve 30-day
months). Interest on the Note is payable semiannually on each
June 1 and December 1, commencing June 1, 1999.
Principal and Interest Payments. Amounts payable on
this Note are payable solely from Net Revenues as provided below.
Interest shall accrue only on the aggregate amount of this Note
which has been disbursed under the Public Facilities Authority
Project Loan Agreement and Revenue Bond Purchase Agreement dated
as of October , 1998, by and between the City and the Minnesota
Public Facilities Authority (the "Project Loan Agreement"). The
980733.3
q�-d9r
1
2
3
4
10
11
12
13
14
15
16
17
ia
19
. 20
. 21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
" 40
41
42
43
44
45
46
47
48
49
50
51
52
principal installments shall be paid in the amounts scheduled
above even if at the time of payment the full principal amount of
the Note has not been disbursed; provided that if the full
principal amount of this Note is never disbursed, the amount of
the principal not disbursed shall be applied to reduce each
unpaid principal installment in the proportion that such
installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule
shall be reamortized to provide proportionately reduced principal
payments). Interest on this Note includes amounts treated by the
Minnesota Public Facilities Authority as service fees.
Principal, interest and any premium due under this Note will be
paid on each payment date by wire payment, or by check or draft
mailed the last business day prior to the payment date to the
person in whose name this Note is registered, in any coin or
currency of the United States of America which at the time of
payment is legal tender for public and private debts.
Redemntion. This Note is subject to redemption and
prepayment in whole or in part at the option of the City or
mandatorily as provided in the Project Loan Agreement. If
redemption is in part, each installment of principal shall be
prepaid in the proportion that such installment bears to the
total of all unpaid principal installments (i.e., the remaining
principal payment schedule shall be reamortized to provide
proportionately reduced principal payments), unless the City and
the holder of this Note agree to a different result.
Issuance• Purpose; Special Obliaation. This Note has
been issued pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota and the Charter
of the Issuer, and pursuant to a resolution adopted by the City
Council of the Issuer on October , 1998 (the "Resolution"), for
the purpose of providing money to finance the construction of
improvements to the City's Water Utility. The Note and the
interest thereon are payable solely and exclusively from the Net
Revenues of the Water Utility of the Issuer pledged to the
payment thereof, and do not constitute a debt of the Issuer or of
the Saint Paul Board of Water Commissioners witliin the meaning of
any constitutional, Charter or statutory limitation of
indebtedness. In the event of any default hereunder, the holder
of this Note may exercise any of the rights and privileges
granted by the laws of the State of Minnesota, subject to the
provisions of the Resolution. The Bonds of this issue, together
with the Water Revenue Bonds, Series 1993E, issued in the
principal amount of $11,175,000, and Water Revenue Refunding
Bonds, Series 1997C, issued in the principal amount of
$7,000,000, are a first and prior lien upon the Net Revenues of
the Water Utility of the Issuer, except tha� the Issuer is
authorized under certain conditions to issue additional revenue
obligations on a parity of lien with the Note and these bonds,
all as provided in the Resolution.
960733.3
�lp -P9p
Recristration; Transfer. This Note shall be registered
in the name of the payee on the books of the City by presenting
this Note for registration to the City's Treasurer, who wi11
endorse his or her name and note the date of registration
opposite the name of the payee in the certificate of registration
attached hereto. Thereafter this Note may be transferred to a
bona fide purchaser only by delivery with an assignment duly
executed by the registered owner or his, her or its legal
representative, and the City may treat the registered owner as
the person exclusively entitled to exercise all the rights and
powers of an owner until this Note is presented with such
assignment for registration of transfer, accompanied by assurance
of the nature provided by law that the assignment is genuine and
effective, and until such transfer is registered on said books
and noted hereon by the City's Treasurer.
Fees upon Transfer or Loss. The Treasurer may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer of
this Note and any legal or unusual costs regarding transfers and
lost notes.
Proiect Loan AQreement. The terms and conditions of
the Project Loan Agreement are incorporated herein by reference
and made a part hereof. The Project Loan Agreement may be
attached to this Note, and shall be attached to this Note if the
holder of this Note is any person other than the Minnesota Public
Facilities Authority.
Tax-Exemot Obliaation. The City intends that the
interest on this Note will be excluded from gross income for
United States income tax purposes and from both gross income and
taxable net income for State of Minnesota income tax purposes.
Not Oualified Tax-Exempt Obliaation. This Note has not
been designated by the Issuer as a"qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the federal
Internal Revenue Code of 1986, as amended. This Note does not
qualify for such designation.
IT IS HEREBY CERTIFIED AND RECITED that all acts,
conditions and things required by the Constitution and laws of
the State of Minnesota and the Charter of the Issuer to be done,
to happen and to be performed, precedent to and in the issuance
of this Note, have been done, have happened and have been
performed, in regular and due form, time and manner as required
by law; that this Note, together with all other debts of the
Issuer outstanding on the date hereof, being the date of its
actual issuance and delivery, does not exceed any constitutional
or statutory or Charter limitation of indebtedness; and that the
Issuer will establish rates and charges for the water service
980733.3 9
a r -g�r
furnished by its Water Utility sufficient in amount to promptly
meet the principal and interest requirements of this Note.
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Note to be
sealed with its official seal and to be executed on its behalf by
the signature of its Mayor, attested by the signature of its
Clerk, and countersigned by the signature of its Director, Office
of Financial Services, all as of , 1998.
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
X X X X X X
Mayor
Attest:
X X X X X X
City Clerk
Countersigned:
X X X X X X
Director, Office of
Financial Services
(SEAL)
Water Revenue Note of 1998.
980733.3 �-�
a� -d'qr
CERTIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of the
attached Note may be made only by the registered owner or his,
her or its legal representative last noted below.
DATE OF SIGNATURE OF
REGISTRATION REGISTERED OWNER CITY TREASURER
Minnesota Public
Facilities Authority
Saint Paul, Minnesota
Federal Employer ldenti-
, 1998 fication No. 41-6007162 X X X
980733 .3 1�-
a�-�yr
7. Execution The Note shall be executed on behalf
of the City by the signatures of its Mayor, Clerk and Director,
Office of Financial Services, each with the effect noted on the
form of the Note, and be sealed with the seal of the City. In
the event of disability or resignation or other absence of any
such officer, the Note may be signed by the manual signature of
that officer who may act on behalf of such absent or disabled
officer. In case any such officer whose signature shall appear
on the Note shall cease to be such officer before the delivery of
the Note, such signature shall nevertheless be valid and
sufficient for all purposes, the same as if he or she had
remained in office until delivery.
8. Holder• Treatment of Registered Owner; Consent of
Aolder.
(A) The "Holder" of the Note is the person in whose name it
is registered on the registration books of the City. For the
purposes of all actions, consents and other matters affecting the
Holder of the Note, other than payments, redemptions, and
purchases, the City may (but shall not be obligated to) treat as
the Holder of the Note the beneficial owner of the Note instead
of the person in whose name the Note is registered. For that
purpose, the City may ascertain the identity of the beneficial
owner of the Note by such means as the Treasurer in his or her
sole discretion deems appropriate, including but not limited to a
certificate from the person in whose name the Note is registered
identifying such beneficial owner.
iB) The City and its Treasurer may treati the person in whose
name the Note is registered as the owner of the Note for the
purpose of receiving payment of principal of and premium, if any,
and interest on, the Note and for all other purposes whatsoever
whether or not the Note shall be overdue, and neither the City
nor its Treasurer shall be affected by notice to the contrary.
(C) Any consent, request, direction, approval, objection or
other instrument to be signed and executed by the Holder may be
in any number of concurrent writings of similar"tenor and must be
signed or executed by the Holder in person or by agent appointed
in writing. Proof of the execution of any such consent, request,
direction, approval, objection or other instrument or of the
writing appointing any such agent and of the ownerehip of the
Note, if made in the following manner, shall be sufficient for
any of the purposes of this resolution, and shall be conclusive
in favor of the City with regard to any action taken by it under
such request or other instrument, namely:
(1) The £act and date of the execution by any person of
any such writing may be proved by the certificate of any
officer in any jurisdiction who by law has power to take
acknowledgments within such jurisdiction that the person
98�733.3 1 2
°
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
signing such writing acknowledged before him the execution
thereof, or by an affidavit of any witness to such
execution.
(2) Subject to the provisions of subparagraph (A)
above, the fact of the ownership by any person of the Note,
and the date of the holding of the same, may be proved by
re£erence to the note register.
9. Delivery• Application of Proceeds. The Note when
so prepared and executed shall be delivered by the Director,
Office of Financial Services, to the purchaser thereof prior to
disbursements pursuant to the Project Loan Agreement, and the
purchaser shall not be obliged to see to the proper application
thereof.
10. Fund and Accounts. There has heretofore been
created (as provided most recently in the June 11, 1997,
resolution of the City relating to the 1997 Bonds) a separate
fund of the City designated the "Board of Water Commissioners
Water Utility Enterprise Fund" (the "Water Utility Fund",
heretofore in resolutions relating to the 1993 Bonds, 1997 Bonds
and 1996 Note also referred to as the "Water Utility Fund"). The
Fund shall be maintained in the manner specified in the
resolutions relating to the 1993 Bonds, 1997 Bonds and 1996 Note
and herein until the 1993 Bonds, 1997 Bonds and 1996 Note, and
interest thereon, have been fully paid, and as specified herein
until the Note and interest thereon have been fully paid. The
Treasurer and all municipal officials and employees concerned
therewith shall establish and maintain financial records of the
receipts and disbursements of the Water Utility in accordance
with this resolution. In such records there shall be maintained
accounts of the Water Utility Fund £or the purposes and in the
amounts as follows:
(a) A"PFA Construction Account", to which shall be
credited all proceeds received from the sale of the 1996
Note and Note, to separate subaccounts therein established
for the 1996 Note and for the Note. The 1996 Note and Note
shall be the only source of moneys credited to the PFA
Construction Account. It is recognized that the sale
proceeds of the 1996 Note and Note are received in
reimbursement for costs expended on the Project and the
project £inanced by the 1996 Note or in direct payment of
such costs, and that accordingly the moneys need not be
placed in the appropriate subaccount of the PFA Construction
Account upon receipt but may be applied immediately to
reimburse the source from which the expenditure was made.
The moneys in the PFA Construction Account shall be used
solely for the purpose of paying for the cost of construct-
ing the Project and the project financed by the 1996 Note,
as appropriate for each subaccount, including all costs
980733.3
13
a �-�qa�
�y
9
10
11"
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
enumerated in Minnesota Statutes, Section 475.65, provided
that such moneys shall only be expended for costs and
expenses which are permitted under the Project Loan
Agreement and the Project Loan Agreement for the 1996 Note.
The PFA prohibits the use of proceeds of the 1996 Note and
Note to reimburse costs initially paid from proceeds of
other obligations of the City unless otherwise specifically
approved. Upon completion of the Project and separately
upon completion of the project financed by the 1996 Note,
and the payment of the costs thereof respectively, any
surplus shall be transferred to the Revenue Bond Debt
Service Account.
(b) An "Operation and Maintenance Account", into which
shall be paid all gross revenues and earnings derived from
the operation of the Water Utility system including any
assessments which may from time to time be levied with
respect to the Water Utility. From this account there shall
be paid all, but only, current expenses of said system.
Current expenses shall include the reasonable and necessary
costs of administering, operating, maintaining and insuring
the system, salaries, wages, costs of materials and
supplies, costs of water production and distribution,
necessary legal, engineering and auditing services, and a11
other items which, by sound accounting practices, constitute
normal, reasonable and current costs of operation and
maintenance, but excluding any allowance for depreciation,
extraordinary repairs and payments into the Revenue Bond
Debt Service Account and Reserve Account. There shall at
all times be maintained in said account a reserve in an
amount sufficient to cover the operation and maintenance
costs of the Water Utility system for the ensuing fifteen
(15) day period; neither said reserve nor any annual
addition thereto shall constitute "Net Revenues'� as defined
below. The balance from time to time remaining in the
Operation and Maintenance Account, including interest or
other earnings received from the investment of any moneys in
the Water Utility Fund, after paying or providing for the
foregoing items, shall constitute, and are'referred to in
this resolution as, "Net Revenues". Payments of fees to
trustees for bonds, to providers of liquidity facilities or
credit enhancement facilities for bonds and remarketing
agents for bonds are also current expenses.
(c) A"Revenue Bond Debt Service Account", into which
there shall be credited and to which there is hereby
irrevocably pledged from the Net 22evenues of the operation
of the Water Utility system monthly commencing in November,
1998, a sum equal to at least 1/12 of the total principal
and interest on the Note and any other bonds or notes issued
on a parity therewith during the ensuing twelve (12) months;
provided, however, that no further payments need be made to
980733.3
14
Aw�e.r,�,,� �, - � � � 1 � °18' (��,���
"4
said account when the moneys held therein are sufficient for
the payment of all principal and interest due on said bonds
and notes on and prior to the next maturity date. No money
shall be paid out of said account except to pay principal,
premium, if any, and interest on the Note and any other
bonds or notes which are issued on a parity with the Note.
(d) A"Reserve Account", which was heretofore created,
and is hereby continued, to be used only when and if moneys
in the Revenue Bond Debt Service Account or other moneys
available therefor are insufficient to pay principal,
premium, if any, and interest on the Note and other bonds
and notes payable from the Revenue Bond Debt Service -
Account; provided, however, that the moneys in tlie Reserve
Account may be used to prepay said bonds and notes, when
such prepayment will retire all of the bonds and notes then
outstanding. $1,650,000 from the Water Utility's retained
earnings shall be deposited in the Reserve Account upon the
issuance of the Note, and amounts already in the Reserve
Account pursuant to the resolutions authorizing the issuance
of the 1993 Bonds and 1997 Bonds shall be maintained therein
upon the issuance of the Note to the extent necessary to
equal the amount required to be maintained in the Reserve
Account as set forth below, being initially amounts required
for the 1993 Bonds, 1997 Bonds and Note. Whenever the
moneys in the Reserve Account exceed the amount required to
be maintained in the Reserve Account as set forth below,
such excess may be transferred to the Revenue Bond Debt
Service Account; and whenever the moneys in the Reserve
Account shall be less than said amount, the Reserve Account
shall be restored to said amount from the next available Net
Revenues. The amount required to be maintained in the
Reserve Account shall be an amount equal to the lesser of:
(1) ten percent (1.0�) of the original principal amount of
the Note and other bonds payable from the Revenue Bond Debt
Service Account issued after the 1993 Bonds on a parity of
lien therewith, or (2) the maximum principal and interest
due in any year on the bonds and notes payable from the
Revenue Bond Debt Service Account; and whenever the moneys
in the Reserve Account exceed such amount required to be
maintained therein, such excess may be transferred to the
Revenue Bond Debt Service Account. When only bonds or notes
issued after the 1994 Bonds are outstanding, the "maximum
principal and interest due in any year" on variable rate
bonds shall be calculated at such time (for any variable
rate bonds issued prior to such time) or in connection with
their issuance (for variable rate bonds issued after such
time) assuming the variable rate bonds bear fixed interest
for the remainder of their terms or for their terms, as
appropriate, at the rates prevailing at such time (for any
variable rate bonds issued prior to such time) or at the
time of their issuance (for variable rate bonds issued after
980733.3 ]_�j
1
2
3
4
5
6
7
8
10
17.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
q��a�
- ��lRl�� ,��t�
a�
such time) for utility revenue bonds of comparable quality,
maturity and taxable or tax-exempt status, provided that
other or different assumptions may be used if necessary to
obtain an investment grade credit rating for the variable
rate bonds or to maintain the credit ratingis) then in
effect for the bonds then outstanding.
(e) Net Revenues in excess of those required for the
foregoing purposes may be used for any proper purpose.
{f) The money in the Water Lltility Fund shall be
allotted and paid to the various accounts herein established
in the order in which said accounts are listed on a -
cumulative basis, and if in any month the money in said
accounts is insufficient to place the required amount in any
accounts, the deficiency shall be made up in the following
month or months after payment into all other accounts having
a prior claim on said Net Revenues have been made in full.
(g) All money held in the Revenue Bond Debt Service
Account and the Reserve Account created by this resolution
shall be kept separate and apart from all other municipal
funds and accounts.
(h) Notwithstanding anything to the contrary herein,
moneys in the Water Utility Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 1993 Bonds, 1997 Bonds and Note to be
paid to the United States in order to maintain the exclusion
fram gross income under Section 103 of the Code (as
hereinafter defined) of the interest on the 1993 Bonds, 1997
Bonds and Note.
(i) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
Note sha11 be maintained and operated as required by the
resolutions authorizing the same.
(j) No portion of the proceeds of the Note shall be
used directly or indirectly to acquire higher yielding
investments or to replace funds which were used directly or
indirectly to acquire higher yielding investments, except
(1) for a reasonable temporary period until such proceeds
are needed for the purpose for which the Note was issued,
(2) as part of a reasonably required reserve or replacement
fund not in excess of ten percent (l00) of the proceeds of
the Note (or in a higher amount which the City establishes
is necessary to the satisfaction of the Secretary of the
Treasury o£ the United States), and (3) in addition to the
above in an amount not greater than the lesser of five
percent (5°a) of the proceeds of the Note or $100,000. To
this effect, any proceeds of the Note and any sums from time
980733.3
16
a r-�r
1
2
3
4
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
to time held in the PFA Construction Account, Operation and
Maintenance Account, Reserve Account or Revenue Bond Debt
Service Account (or any other City or Board account which
will be used to pay principal or interest to become due on
the Note, bonds or notes payable therefrom) in excess of
amounts which under the federal arbitrage regulations may be
invested without regard to yield shall not be invested at a
yield in excess of the applicable yield restrictions imposed
by said arbitrage regulations on such investments after
takinq into account any applicable "temporary periods",
minor portion or reserve made available under the federal
arbitrage regulations. Money in the Water Utility Fund
shall not be invested in obligations or deposits issued by,
guaranteed by or insured by the United States or any agency
or instrumentality thereof if and to the extent that such
investment would cause the Note to be "federally guaranteed"
within the meaning of Section 149(b) c�f the federal Internal
Revenue Code of 1986, as amended (the "Code").
The City shall observe the Covenants of paragraphs 22 and 24 of
this resolution and of sections 14 and 17 of the Project Loan
Agreement with regard to the Water Utility Fund.
il. Parity Bonds. The 1993 Bonds, 1997 Bonds and Note
shall be a first charge and lien upon the Net Revenues of the
Water Utility. No part of such Net Revenues shall be pledged to
the payment of any general obligation bonds issued by the City
while the Note, any 1993 Bonds or 1997 Bonds or bonds or notes
issued on a parity therewith remain outstanding and undischarged,
unless the pledge of Net Revenues to such general obligation
bonds is expressly made a second and subsequent lien and the City
and Board covenant to make Che rates and charges of the Water
Utility sufficient to timely pay such general obligation bonds.
No additional revenue obligations payable from the Revenue
Bond Debt Service Account shall be hereafter issued unless the
same are expressly made a second and subsequent lien upon the Net
Revenues of the Water t3tility; provided, however, that additional
obligations may be issued on a parity of lien with the Note,
provided that the annual Net Revenues of said Water Utility for
each of the two (2) completed fiscal years immediately preceding
the issuance of such additional obligations shall have been one
and one-half (1.5) times the maximum annual principal and
interest coming due thereafter on all outstanding revenue
obligations payable £rom and having a parity of lien upon the Net
Revenues of the Water Utility Fund, including the additional
obligations so to be issued; provided further, however, that if
the annual Net Revenues in either or both of the aforesaid two
(2) completed fiscal years shall be insufficient to meet this
test then any reasonably projected increase in Net Revenues for
the fiscal year immediately following such second completed
fiscal year may be added to the Net Revenues for such completed
980733.3 1 7
9�' '�
fiscal years or
increase in Net
foregoing test.
either of them (but the total of such projected
Revenues may be added only once) in applying the
For purposes of the foregoing limitations, when only bonds
or notes issued after the 1994 Bonds are outstanding, the
"maximum annual principal and interest coming due thereafter" on
variable rate bonds shall be calculated assuming the variable
rate bonds bear fixed interest at the rates prevailing at the
time of the calculation for utility revenue bonds of comparable
quality, maturity (or remaining maturity) and taxable or tax-
exempt status, provided that other or different assumptions may
be used if necessary to obtain an investment grade credit rating
for the variable rate bonds or to maintain the credit rating(s)
then in effect for the bonds then outstanding.
Such facts shall be shown by the Certificate of the General
Manager of the Board of Water Commissioners and shall be a
finding of and recited in the resolution of the City authorizing
any such additional series. In addition, the following
conditions shall be met:
(a) The payments required to be made (at the time of
the issuance o£ such parity lien bonds} into the various
funds and accounts provided for in this resolution have been
made.
(b) All such parity lien bonds shall have a December 1
maturity or maturities and shall have semiannual interest
payments on June 1 and December 1 in each year; provided
that interest payments may be more frequent than
semiannually or on dates other than June 1 and December 1 if
such interest is paid in full only if at the time of payment
the interesC deposits into the Revenue Bond Debt Service
Account for interest payments on June 1 or December 1, as
appropriate, on other bonds are current, and any
insufficiency of interest on all parity bonds is allocated
proportionately in each six-month period ending June 1 or
December 1, as appropriate.
(a) The proceeds of such parity lien bonds shall be
used only for the purpose of (1) making improvements,
additions, extensions, renewals or replacements to the Water
Utility, and capitalizing interest or establishing Reserves
and paying the costs of such financing, or (2) refunding
parity lien bonds (provided that bonds which refund parity
lien bonds may instead derive their parity lien status from
paragraphs 12 or 18 as applied in paragraph 13).
The Note shall have a priority of lien over the 1996 Note,
and the pledge and appropriation of Net Revenues of the Water
980733.3 1 $
q� �� r
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Utility for the payment of the Note shall be superior to the
pledge and appropriation to the 1996 Note.
12. Refunding Maturing Oblictations. The City also
reserves the right and privilege of issuing additional revenue
bonds if and to the extent needed to refund maturing bonds or
notes or installments thereof payable from the moneys in the
Water Utility Fund in case the moneys in the Revenue Bond Debt
Service Account are insufficient to pay the same at maturity,
which refunding revenue bonds may be on a parity with this issue
as to interest payments even if such interest is in excess of the
interest on the refunded bonds or notes, but shall mature
subsequent to all the revenue obligations which are payable from
the Net Revenues of the Water Utility Fund and which are still
outstanding upon completion of such refunding.
13. Other Revenue Obliaations. Except as authorized
in paragraphs 11, 12 and 18 hereof, the City covenants and agrees
that it will issue or incur no obligations payable from the Net
Revenues of all or a part of said Water Utility or constituting
in any manner a lien thereon, unless such obligations are
expressly made junior and subordinate to the lien and charge of
the Note on said Net Revenues. If obligations which refund the
Note are parity lien bonds or notes, they shall enjoy compl.ete
equality of lien with any portion of the I3ote not refunded and
any other then outstanding bonds or notes payable from the
Revenue Bond Debt Service Account, if any there be, and such
refunding bonds or notes shall continue to have whatever priority
of lien over subsequent issues that the refunded bonds or notes
may have had. If only a portion of the Note shall be refunded
and if such portion of the Note shall be refunded in such manner
that the interest rate of any refunding bond or note shall be
greater than the interest rate of the corresponding refunded
portion of the Note (or the average net interest rate of the
refunding bonds or notes shall be, or shall be reasonably
estimated to be, higher than the average net interest rate of the
refunded portion of the Note), or that the maturity date of any
refunding bond or note shall be earlier than the maturity date of
the corresponding refunded portion of the Note (or the average
maturity of the refunding bonds or notes shall be earlier than
the average maturity of Che refunded portion of the Note), then
the Note may not be refunded without the consent of the holders
of the unrefunded portion of the Note and any other bonds or
notes then outstanding payable from the Revenue Bond Debt Service
Account unless the Net Revenues coverage test of paragraph li is
met.
14.
moneys in the
Account shall
principal then
notes payable
980733.3
Insu£ficient Amounts. In the event that the
Revenue Bond Debt Sesvice Account and Reserve
be insufficient at any particular time to pay the
due and interest then accrued on all bonds or
from the Revenue Bond Debt Service Account, said
19
q �..�qr
moneys shall first be applied to the payment pro rata of the
accrued interest on all such bonds or notes, payable over a
period ending on June 1 or December 1, as appropriate, and any
balance shall be applied in payment pro rata of the principal on
all such bonds or notes, provided further that if it shall ever
be determined by a court of competent jurisdiction while any such
bonds or notes remain outstanding that the sums available and to
become available for the payment of the principal thereof and
interest thereon are insufficient whether or not then due, then
the moneys in the Revenue Bond Debt Service Account and Reserve
Account shall be applied in payment of all principal then
outstanding whether or not then due and the interest accrued
thereon to the date of payment ratably according to the aggregate
amount thereof without any preference or priority.
15. Suit by Holder. The Holder of twenty percent
(200) or more in aggregate principal amount of the Note issued
under this resolution and at any time outstanding may, either at
law or in equity, by suit, action, or other proceedings, protect
and enforce the rights o£ all Holders of the Note or enforce or
compel the performance of any and all of the covenants and duties
specified in this resolution to be performed by the City or Board
or their officers and agents, including the fixing and
maintaining of rates and charges and the collection and proper
segregation of revenues and the application and use thereof.
16. Covenants. For the protection of the Holder of
the Note, the City herein covenants and agrees to and with the
holders thereof from time to time as follows:
(a) It will at all times through its Board adequately
maintain and efficiently operate the Water Utility as a City
utility. It will from time to time make all needful and
proper repairs, replacements, additions and betterments to
the equipment and facilities of said Water Utility so that
they may at all times be operated properly and
advantageously, and whenever any equipment of said system
shall have been worn out, destroyed or otherwise become
insufficient for proper use, it shall be promptly replaced
or repaired so that the value and efficiency of the
facilities shall be at all times fully maintained and its
revenues unencumbered by reason thereo£.
(b) The rates for all water service and the charges
for all water supplied by the Water Utility to the City and
its residents and to all other consumers shall be reasonable
and just, taking into account the cost and value of the
Water i3tility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
principal and interest on the bonds and notes payable from
980733.3 2 �
a �-r9�'
the Net Revenues of-the water Utility, and all other sums
customarily paid from the revenues of the Water Utility.
(c) It will as required by Section 10.11.2 of the City
Charter (and it will continue to do so whether or not
required by said Charter) establish, maintain and collect
such charges and rates as will produce revenues sufficient
to pay the reasonable cost of operation, repair and
maintenance of the Water Utility and to pay the interest on
and principal of the Note and all bonds and notes on a
parity of lien with the Note, as and when they become due,
as well as to provide sufficient money to make the required
appropriations to the various funds and accounts established
herein. The City will review the schedule of rates and
charges for the Water Utility at least annually when the
Board budget is reviewed.
(d) It will not sell, lease, mortgage, or in any manner
dispose of the Water Utility or any part thereof (including
any and all extensions and additions that may be made
thereto) until all revenue bonds and notes payable from the
Net Revenues of the Water Utility or any part thereof have
been paid in full; provided, however, that the City may sell
the Water Utility or any part thereof if simultaneously with
or prior to said sale all of the outstanding bonds are
discharged in accordance with paragraph 18 of this
resolution. This covenant shall not be construed to prevent
the sale by the City at fair market value of real estate,
equipment or other non-revenue-producing properties which in
the judgment of the City have become unnecessary,
uneconomical or ine�cpedient to use in connection with the
Water Utility provided that suitable facilities are obtained
in place thereof and provided further that nothing herein is
intended to prevent the City or Board from terminating or
otherwise preventing the termination of contracts for the
furnishing of water. Notwithstanding the foregoing, the
provisions of the Project Loan Agreement shall be given
effect and may preclude or limit the sale,.lease, mortgage
or disposition of the Water Utility or Project.
(e) It shall cause to be kept proper books, records and
accounts adapted to the Water Utility separate from other
accounts to be audited at the end of each fiscal year. A
copy of said audit shall be £urnished, without cost, to the
Holder of the Note. If the City fails to provide such audit
within a reasonable time after the end of said fiscal year,
the holders of twentiy percent (200) or more of the
outstanding bonds and notzs may cause such audit to be made
at the expense of the City. The expense of preparing such
audit shall be paid as current operating expenses of the
Water Utility. The Holder oE the Note, or its duly
appointed representatives, from time to time shall have the
980733.3
21
Q�.B'q�
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
right, at all reasonable times, to inspect the Water Utility
system and to inspect and copy the books, records, accounts
and data relating thereto. The City agrees to furnish
copies of such audit, without cost, to any Holder or Holders
of the Note at their request within a reasonable time after
the end of each fiscal year. In addition, the City shall
observe the provisions of the Project Loan Agreement and
adhere to the requirements therein as to reporting and the
timing thereof.
(f) It will faithfully and punctually perform all
duties with reference to the Water Utility required by the
City Charter, the Constitution and laws of the State of
Minnesota and this resolution.
(g) It will grant no franchise to any competing
utility.
17. Amendments. No change, amendment, modification or
alteration shall be made in the covenants made with the Holder of
the Note without the consent of the Holders of not less than
sixty percent (60%) in principal amount of the Note then
outstanding except for changes, amendments, modifications and
alterations (a) made to cure any ambiguity or formal defect or
omission, or (b) which woul.d not materially prejudice the Holders
of the Note; provided, however, that nothing herein contained
shall permit or be construed as permitting (1) an extension of
the maturity of the principal of or the interest on the Note, or
(2) a reduction in the principal amount of the Note or the rate
of interest thereon, or (3) a privilege or priority of the Note
over any other bond or bonds or note or notes except as otherwise
provided herein, or (4) a reduction in the aggregate principal
amount of the Note required for consent to any change, amendment,
modification or alteration, or (5) the creation of any lien
ranking prior to or on a parity with the lien of the Note, except
as hereinbefore expressly permitted, or {6) a modification of any
of the provisions of this paragraph without the consent of the
Holders of one hundred percent (100%) of the principal amount of
the Note.
18. Discharae. When all of the Note has been
discharged as provided in this paragraph, all pledges, covenants
and other rights granted by this resolution to the Holder of the
Note shall cease. The City may discharge all of the Note which
is due on any date by depositing with the paying agent (but not
if a City officer is the paying agent) or an escrow agent for the
Note on or before that date a sum sufficient for the payment
thereof in full; or if any of the Note should not be paid when
due, it may nevertheless be discharged by depositing with the
paying agent (but not if a City officer is the paying agent) or
an escrow agent a sum sufficient for the payment thereof in full.
The City may also discharge any prepayable portion of the Note
980733_3
22
qg -dgl
1
2
3
4
5
6
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
4S
49
50
51
which is called for redemption on any date when it is prepayable
according to its terms, by depositing with the paying agent (but
not if a City officer is the paying agent) or an escrow agent on
or before that date an amount equal to the principal, interest
and redemption premium, if any, which are then due, provided that
notice of such redemption has been duly given as provided in this
resolution. The City may also at any time discharge the Note in
whole or in part by complying with the applicable provisions of
Minnesota Statutes, Section 475.67, and any amendments thereto,
except that the funds deposited in escrow in accordance with said
provisions may but need not be in whole or part proceeds of
advance refunding bonds or notes. The City may discharge the
Note as herein provided without the consent of the Holder.
19. Fiscal Year As used in this resolution the words
"fiscal year" shall mean the twelve t12} month period beginning
on January 1 of each year and ending on December 31 of the same
year. Should it be deemed advisable at some later date to change
the fiscal yearly basis, the same may be done by proper actions
to that effect, which change shall not constitute an amendment or
modification of this resolution.
20. Proiect Loan Aareement. The Project Loan
Agreement is hereby approved in substantially the form heretofore
presented to the City Council, and in the form executed is hereby
incorporated by reference and made a part of this resolution.
Each and all of the provisions of this resolution relating to the
Note are intended to be consistent with the provisions of the
Project Loan Agreement, and to the extent that any grovision in
the Project Loan Agreement is in conflict with this resolution as
it relates to the Note, that provision shall control and this
resolution shall be deemed accordingly modified. The Mayor and
Director, Office of Financial Services, are hereby authorized and
directed to execute the Project Loan Agreement. The execution of
the Project Loan Agreement by the appropriate officers shall be
conclusive evidence of the approval of the Project Loan Agreement
in accordance with the terms hereof. The Project L,oan Agreement
may be attached to the Note, and shall be attached to the Note if
the holder of the Note is any person other than the PFA.
21. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the PFA, and to the attorneys approving the legality of the
issuance of the Note, certified copies of all proceedings and
records of the City relating to the Note and to the financial
condition and affairs of the City, and such other affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Note as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
980733.3
23
c�g�. �'98'
furnished, shall be deemed representations of the City as to the
facts recited therein.
22. Necrative Covenants as to Use of Proceeds and
Pro�ect. The City hereby covenants not to use the proceeds of
the Note or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangements for the
cost of the Project, in such a manner as to cause the Note to be
a"private activity bond" within the meaning of Sections 103 and
141 through 150 of the Code. The City reasonably expects that no
actions will be taken over the term of the Note that would cause
it to be a private activity bond, and the average term of the
Note is not longer than reasonably necessary for the governmental
purpose of the issue. The City hereby covenants not to use the
proceeds of the Note in such a manner as to cause the Note to be
a"hedge bond" within the meaning of Section 149(g) of the Code.
The City hereby covenants not to use the proceeds of
the Note or to use the Project, or to cause or permit them to be
used, or to enter into any deferred payment arrangement for the
cost of the Project, in such a manner as to cause the PFA Bonds
to be "private activity bonds" within the meaning of Sections 103
and 141 through 150 of the Code. The City reasonably expects
that it will take no actions over the term of the Note that would
cause the PFA Bonds to be private activity bonds, and the average
term of the Note is not longer than reasonably necessary for its
governmental purpose.
23. Tax-ExemDt Status of the Note: Rebate: Elections.
The City shall comply with requirements necessary under the Code
to establish and maintain the exclusion from gross income under
Section 103 of the Code of the interest on the Note, including
without limitation requirements relating to temporary periods for
investments, limitations on amounts invested at a yield greater
than the yield on the Note, and the rebate of excess investment
earnings to the United States.
If any elections are available now or.hereafter with
respec� to arbitrage or rebate matters relating to the Note, the
Mayor, Clerk, Treasurer and Director, Office of Financial
Services, or any of them, are hereby authorized and directed to
make such elections as they deem necessary, appropriate or
desirable in connection with the Note, and all such elections
shall be, and shall be deemed and treated as, elections of the
City.
24. Tax-Exem�t Status of the PFA Bonds:
City with respect to the Note shall comply with re�
necessary under the Code to establish and maintain
from gross income under Section 103 of the Code of
on the PFA Bonds, including without limitation (1)
relating to temporary periods for investments, i2)
Rebate. The
uirements
the exclusion
the interest
requirements
limitations on
980733.3 2 4
��.�,�.a.� _ �e �-►1 � r
amounts invested at a yield greater than the yield on the PFA
Bonds, and {3) the rebate of excess investment earnings to the
United States. The City covenants and agrees with the PFA and
holders of the Note thaC the investments of proceeds of the Note,
incZuding the investment of any revenues pledged to the Note
which are considered gross proceeds of the PFA Bonds under the
applicable regulations, and accumulated sinking funds, if any,
shall be limited as to amount and yield in such manner that the
PFA Bonds shall not be arbitrage bonds within the meaning of
Section 148 of the Code and any regulations thereunder. On the
basis of the existing facts, estimates and circumstances,
including the foregoing findings and covenants, the City hereby
certifies that it is not expected that the proceeds of the Note
will be used in such manner as to cause the PFA Bonds'to be
arbitrage bonds under Section 148 of the Code and any regulations
thereunder. The Mayor, Clerk and Director, Office of Financial
Services, shall furnish a certificate to the PFA embracing or
based on the foregoing certification at the time of delivery af
the Note to the PFA.
25. No Desicxnation of Oualified Tax-ExemDt Obligation
The Note, together with other obligations issued by the City in
1998, exceeds in amount those which may be qualified as
"qualified tax-exempt obligations" within the meaning of Section
265(b)(3) o£ the Code, and hence is not designated for such
purpose.
26. Parity Findinas. It is hereby found, determined
and declared that:
(a) Neither the City nor the Board has any outstanding
bonds, warrants, certificates, or other obligations or
evidences of indebtedness, or money borrowed for or on
account of the Water Utility or indebtedness for which any
of the Net Revenues of all or a part of the Water Utility
have been pledged or which are a prior lien on such Net
Revenues, except the 1993 Bonds and 1997 Bonds and the
subordinate 1996 Note.
(b) All payments required to be made prior to the date
hereof into the various funds and accounts of the "Water
Utility Fund" established pursuant to the resolutions of
this City Council which authorized the issuance of the 1993
Bonds and 1997 Bonds have been made.
(c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
the Note have been more than one and one-half (1.5) times,
specifically 2.027 and 1.824 times, respectively, the maximum
annual principal and interest coming due hereafter on all
outstanding revenue obligations payable from and having a
980733.3 Z 5
�A W.�w1.� - �e � -, � a�' �,�q�
q
parity of lien upon the Net Revenues, being the 1993 Bonds
and 1997 Bonds, and the Note as the obligation proposed to be
issued, to wit:
Net Revenues 1996 $11,190,732
Net Revenues 1997 $10,070,410
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and
Interest on the Note
Maximum Annual Principal and
Interest on the 1993 Bonds,
1997 Bonds, and Note
(COMBTNED)
One and One-half (1.5) Times
Total Maximum Annual Principal
and Interest Requirements
$ 1,989,432
$ 1,101,818
$ 1,616,868
$ 3,680,451
$ 5,520,676.50
This City Council has been furnished with the CerCificate of
the General Manager of the Water Utility attesting to the
foregoing facts.
(e) This City Council pursuant to advice from the
Board hereby finds, determines and declares that the
estimated revenues to be derived from the operation of the
Water Utility during the term of the Note will be more than
sufficient to provide Net Revenues adequate to pay principal
and interest when due on the Note and on those otlier bonds
which are now outsCanding and to maintain the Reserves
required therefor.
(f) The Note has a December 1 maturity or maturities
and has interest payments on June 1 and December l, and is
in compliance with the other requirements for parity bonds.
(g) The proceeds of the Note shall only be used for
the purpose of making improvements, additions, extensions,
renewals or replacements to the Water Utility, and
capitalizing interest or establishing Reserves and paying
the costs of such financing.
(h) As required by paragraph 10 of the resolution
authorizing the 1996 Note, estimated Net Revenues of the
Water Utility will be sufficient, in addition to all other
sources, for the payment of the 1946 Note and Note.
980733.3 2 6
'' �
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
27. Consent to Representation. The City hereby
consents to the representation by Briggs and Morgan, Professional
Association, which is acting as the City�s bond counsel with
respect to the Note, of the PFA with respect to the PFA Bonds and
the Note as the PFA's bond counsel pursuant to a special attorney
appointment by the Attorney General of the State of Minnesota.
28. Covenant with xolders. Each and all of the terms
and provisions of this resolution shall be and constitute a
covenant on the part of the City to and with each and every
Holder from time to time of the Note.
29. Resolutions Supplemented. The resolutions
authorizing the issuance of the 1993 Bonds, 1997 Bonds and 1996
Note are hereby supplemented to the extent necessary to give
effect to the provisions o£ this resolution.
30. Severabilitv. If any section, paragraph or
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
31. Headinas. Headings in this resolution are
included for convenience of reference only and are not a part
hereof, and shall not limit or define the meaning of any
provision hereof.
Requested by DepaRment of.
Office of ancial Services
Sy: '
Form A�ved Ci ome �,
7
B
Approv v Mav or �sfbh to Council
Adopted by Council: Date �!� • ? �� �11D
Adoption Certified by Council
g � .
Approved 6y Mayor: Date _
By:
980733.3
�
iol�l� ��,
STATE OF MINNESOTA )
COUNTI' OF I2AMSEY ) ss _ CERTIFICATE
CITY OF SAINT PAUL )
I, the undersigned, being the duly qualified and acting
General Manager of the Water Utility of the City of Saint Paul,
Minnesota, in accordance with the provisions of paragraphs 18 and
18, respectively, of those certain resolutions which provided for
the issuance and sale of $11,175,000 Water Revenue Refunding
Bonds, Series 1993E, adopted on June 15, 1993, and of $7,000,004
Water Revenue Refunding Bonds, Series 1997C, adopted on June 11,
1997, each by the City Council of the City of Saint Paul,
Minnesota, do hereby certify as follows: "`
1. All payments required to be made prior to the date
hereof into Che various funds and accounts of the ��Water Utility
Fund" established pursuant to said resolutions of the City
Council have been made.
2. The annual net revenues of the Water Utility of
the City of Saint Paul, Minnesota, for eaoh of the two (2)
completed fiscal years immediately preceding the proposed
issuance of the City's $16,500,000 Water Revenue Notie of 1998,
have been at least one and one-half i1.5) times, specifically
2.027 and 1.524 times, respectively, the maximum annual principal
and interest coming due after December l, 1997, on all
outstanding revenue obligations payable from and having a parity
of lien upon the Net Revenues of the Water Utility Fund (as such
terms are defined in said resolutions of the City Council),
including the obligations proposed to be issued, to wit:
Net Revenues 1996
Net Revenues 1997
$11,190,732
$10,070,410
Maximum Annual Principal and
Interest on $11,175,000 Water
Revenue Refunding Bonds,
Series 1993E $1,989,432
Maximum Annual Principal and
Interest on $7,000,000 Water
Revenue Refunding Bonds,
Series 1997C $1,101,818
Maximum Annual Principal and
Interest on $16,500,000 Water
Revenue Note of 1998
$1,616,868
980501.3 7,
Maximum Annual Principal
and Interest on all such
obligations
(COMBINED FOR JOINT
HIGHEST YEAR, NOT SUM OF
INDIVIDUAL HIGHEST YEARS)
One and One-half (1.5) Times
Total Maximum Annual Principal
and Interest Requirements
1 °l�l��',���
q$
$3,680,451
$5,520,676.50
980501.3 2
�
WITNESS my hand this S v day of October, 1998.
�.�i�-� C c��*-�'`�`'`.c-��
General Manager
CERTIFICATE OF THE
CITY OF SAINT PAUL,
1998 of the City of
980501.3
,b�����
G ���
4
GENERAL MANAGER OF THE WATER UTILITY OF THE
relating to $16,500,000 Water Revenue Note of
Saint Paul, Minnesota.
3
qg � g�
of Fnarxial Serrices � osmiss
.CT PERSON & PFiONE
iurleY 266-8837
3E ON COUNCIL AGENDA Bv (DA7t7
ASSIGN
� �'�� NUMBERFOR
ROUTIMG
ORDER
TOTAL # OF SIGNATURE PAGES _1
GREEN SHEET
oer�arre�r onreron
No 60037
ufrcoUlC{.
❑Z QS'lATTqtlET ❑t31'(ttHIK
❑ RlRMCJALSErtNCESMt ❑ NWNWLtFAV/ACCT6
� IuYOR1oRllsaziAXiT � �Tw�y
(CLJP ALL LOCATIONS FOR SIGNATURE)
ached resolutbn accepts the offer ot the Minnesota Public Facil'fies ANhority (PFA) to purchau a$16,500,000
Revenue Note of 1998, provWe fw its issuance aM author¢e qtecution of the projed ban agreement.
PLANNING COMMISSION
CIB COMMITTEE
CIVIL SERVICE CAMMfSSION
SONAL SERVICE CONTRACTS MUST ANSWER TXE FOLLOWING GUESTIC
Has this persoNfirm ever wqked under a contract for this tlepaRmeM?
YES NO
Has this persoMrm ever 6een a cily employee?
YES NO
Does this perso�im possess a skill not normally possessed by any curteM cM1y empoyee?
YES NO
Is this person(fitm a fafgeted vendo(?
YES NO
What, When,
loan application tor 516,500,000 to the PFA has been approvetl by [he State 7he procedure to folow
for the Ciry ro issue a Note M the State for that amount. The Loan is interest free u�il December 1, 1998, antl after
at date bears iMerest at a rate of 3.48% per annum. The instaliments are for 20 yeats. 1999 through 2(I18.
V�MOi10ti I�GalGG14f: 6Yi"f'.'�bv9
� ����
� -.
City �eceives a loan from the S[ate that 6�rs irReres[ at a ra[e of 3.46%, which �s well below market rates.
Cdy bses the opportuniry to Dorrax funds (rom the SYate at a low rate, to wpport the Water DepartmenYs
OF TRANSACTION S s+s.soo.aao
SOURGE
COSTIREVENUE BUDGEfED (CIRCLE ON�
ACTIVITY NUMBER
YES NO
(IXPWN)
INTERDEPARTMENTAL MEMORANDUM
CITYOFS4A�TPAUL
October 5, 1998
To: Nancy Anderson
From: Todd Hurley l ��
Re: Changes for October 7, 1998 Council Meeting
Nancy,
Please see the attached pages:
1.) Replacement Page 3 for item # 35 - Resolution 98-897 (1 original, 7 copies)
2.) Replacement Pages 15, 16, 25, 26 for item # 36 - Resolution 98-898 (1 original, 7
copies)
, . }
' , 1
3.) Certificate of the ('seneral Maz�ager of the Water Utility of the
City of Saint Paul — as a supplement to Resolution 98-898. (1 original, 7 copies)
�
1
2
3
4
5
6
7
8
9
10
li
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
said account when the moneys held therein are suf£ici�t for
the payment of all principal and interest due on sa d`�bonds
and notes on and prior to the next maturity date. o money
shall be paid out of said account except to pay p�ncipal,
premium, if any, and interest on the Note and an other
bonds or notes which are issued on a parity wit the Note.
(d) A"Reserve Account", which was heret�ofore created,
and is hereby continued, to be used only whe� and if moneys
in the Revenue Bond Debt Service Account or ther moneys
available therefor are insufficient to pay rincipal,
premium, if any, and interest on the Note nd other bonds
and notes payable from the Revenue Bond bt Service
Account; provided, however, that the mo ys in the Reserve
Account may be used to prepay said bon and notes, when
such prepayment will retire all of th bonds and notes then
outstanding. $1,650,000 from the Cit s Account
shall be deposited in the Reserve A ount upon the issuance
of the Note, and amounts already i the Reserve Account
pursuant to the resolutions autho 'zing the issuance of the
1993 Bonds and 1997 Bonds shall e maintained therein upon
the issuance of the Note to the extent necessary to equal
the amount required to be mai ained in the Reserve Account
as set £orth below, being in' ially amounts required for the
1993 Bonds, 1997 Bonds and ote. Whenever the moneys in the
Reserve Account exceed the amount required to be maintained
in the Reserve Account as set forth below, such excess may
be transferred to the R enue Bond Debt Service Account; and
whenever the moneys in he Reserve Account shall be less
than said amount, the eserve Account shall be restored to
said amount from the next available Net Revenues. The
amount required to e maintained in the Reserve Account
shall be an amoun equal to the lesser of: (1) ten percent
(l00) of the ori nal principal amount of the Note and other
bonds payable f m the Revenue Bond Debt Service Account
issued after t e 1993 Bonds on a parity of lien therewith,
or (2) the ma imum principal and interest due in any year on
the bonds an notes payable from the Revenue Bond Debt
Service Acc unt; and whenever the moneys in the Reserve
Account ex eed such amount required to be maintained
therein, uch excess may be transferred to the Revenue Bond
Debt Ser ice Account. When only bonds or notes issued after
the 199 Bonds are outstanding, the "maximum principal and
inter t due in any year" on variable rate bonds shall be
calc ated at such time (for any variable rate bonds issued
pri to such time) or in connection with their issuance
(f variable rate bonds issued after such time) assuming
t variable rate bonds bear fixed interest for the
mainder of their terms or for their terms, as appropriate,
t the rates prevailing at such time (for any variable rate
bonds issued prior to such time) or at the time of their
issuance (for variable rate bonds issued after such time)
.3
15
ar . � r
for utility revenue_bonds of comparable quality, matur�ty
and taxable or tax-exempt status, provided that othe.� or
different assumptions may be used if necessary to �tain an
investment grade credit rating for the variable r�te bonds
or to maintain the credit rating(s) then in eff�t for the
bonds then outstanding.
(e) Net Revenues in excess of those rec�uired for the
foregoing purposes may be used for any prop�(r purpose.
(f) The money in the Water Utility F nd shall be
allotted and paid to the various accounts herein established
in the order in which said accounts are isted on a
cumulative basis, and if in any month t e money in said
accounts is insufficient to place the equired amount in any
accounts, the deficiency shall be mad up in the following
month or months after payment into a other accounts having
a prior claim on said Net Revenues ve been made in fu11.
(g) All money held in the R enue Bond Debt Service
Account and the Reserve Account eated by this resolution
shall be kept separate and apar from all other municipal
funds and accounts.
(h) Notwithstanding a thing to the contrary herein,
moneys in the Water Utilit Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 19 3 Bonds, 1997 Bonds and Note to be
paid to the United Sta s in order to maintain the exclusion
from gross income und Section 103 of the Code (as
hereinafter defined) of the interest on the 1993 Bonds, 1997
Bonds and Note.
(i) Acco
with a lien on
Note shall be
resolutions a�P
created for bonds, notes or obligations
Revenues subordinate to the lien of the
ained and operated as required by the
zina the same.
(j) portion of the proceeds of the Note shall be
used dire ly or indirectly to acquire higher yielding
investme s or to replace funds which were used directly or
indirec y to acquire higher yielding investments, except
(1) fo a reasonable temporary period until such proceeds
are n eded for the purpose for which the Note was issued,
(2) s part of a reasonably required reserve or replacement
fun not in excess of ten percent (10%) of the proceeds of
th Note (or in a higher amount which the City establishes
i necessary to the satisfaction of the Secretary of the
reasury of the United States), and (3) in addition to the
above in an amount not greater than the lesser of five
percent (So) of the proceeds of the Note or $100,000. To
this effect, any proceeds of the Note and any sums from time
33.3 16
I � �•
amounts invested at a yield greater than the yield on the PFA
Bonds, and (3) the rebate of excess investment earnings to the
United States. The City covenants and agrees with the PFA and
holders of the Note that the investments of proceeds of the Note,
including the investment of any revenues pledged to the Note
which are considered gross proceeds of the PFA Bonds under the
applicable regulations, and accumulated sinking funds, if any
shall be limited as to amount and yield in such manner that e
PFA Bonds shall not be arbitrage bonds within the meaning
Section 148 of the Code and any regulations thereunder. the
basis of the existing facts, estimates and circumstances
including the foregoing findings and covenants, the Ci hereby
certifies that it is not expected that the proceeds o the Note
will be used in such manner as to cause the PFA Bond to be
arbitrage bonds under Section 148 of the Code and y regulations
thereunder. The Mayor, Clerk and Director, Offic of Financial
Services, shall furnish a certificate to the PFA mbracing or
based on the foregoing certification at the tim of delivery of
the Note to the PFA.
25. No Desi nation of ualified ax-Exem t Obli ation
The Note, together with other obligations ssued by the City in
1998, exceeds in amount those which may e qualified as
"qualified tax-exempt obligations" wit n the meaning of Section
265(b)(3) of the Code, and hence is t designated for such
purpose.
26. Paritv Findinqs. t is hereby found, determined
and declared that:
(a) Neither the ity nor the Board has any outstanding
bonds, warrants, ce ificates, or other obligations or
evidences of inde edness, or money borrowed for or on
account of the ter Utility or indebtedness for which any
of the Net Rev nues of all or a part of the Water Utility
have been pl ged or which are a prior lien on such Net
Revenues, cept the 1993 Bonds and 1997 Bonds and the
subordina e 1996 Note.
( All payments required to be made prior to the date
hereo into the various funds and accounts of the "Water
Uti ty Fund" established pursuant to the resolutions of
th' City Council which authorized the issuance of the 1993
B ds and 1997 Bonds have been made.
' (c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
the Note have been more than one and one-half (1.5) times,
specifically and times, respectively, the maximum
annual principal and interest coming due hereafter on all
outstanding revenue obligations payable from and having a
980733.3
25
a$ -��►�
parity of lien upon the Net Revenues, being the
and 1997 Bonds, to wit:
Net Revenues 1996
Net Revenues 1997
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and �
Interest on the Note
Maximum Annual Principal
Interest on the 1993 Bon
1997 Bonds, and Note
(COMBINED)
One and One-half (1.5)
Total Maximum Annual k
and Interest ReauireR'�e
This City Council has
the General Manager o
foregoing facts. J
Bonds
$
$
$1,989,432
$1,101,818
$1,616,868
$3,680,451
$5,520,676.50
furnished with the Certificate of
Water Utility attesting to the
(e) This Cit Council pursuant to advice from the
Board hereby find , determines and declares that the
estimated reven s to be derived from the operation of the
Water Utility ring the term of the Note will be more than
sufficient to rovide Net Revenues adequate to pay principal
and interest hen due on the Note and on those other bonds
which are n outstanding and to maintain the Reserves
reguired t erefor.
(f) The Note has a December 1 maturity or maturities
and has interest payments on June 1 and December l, and is
in co liance with the other requirements for parity bonds.
/(g) The proceeds of the Note shall only be used for
purpose of making improvements, additions, extensions,
wals or replacements to the Water Utility, and
talizing interest or establishing Reserves and paying
costs of such financing.
(h) As required by paragraph 10 of the resolution
authorizing the 1996 Note, estimated Net Revenues o£ the
Water Utility will be sufficient, in addition to all other
sources, for the payment of the 1996 Note and Note.
980733.3 2 6
C � ,���
From: Shiriey Davis '"��
To: STPAUL.apigate.Council, fabei, H2O.WATER.bernieb, ...
Date: 10/5/98 1;17pm
Subject: Agenda 10-7--#'s 35,36,37
The Council Agenda for this Wednesday, October 7, 1998 includes three itesr.s which
are City Treasury related. 1 apologize. f cannot be at the Council meeting, as I
expected, on that day. I will be attending a family funeral on Wednesday.
I wili be in the o�ce until 4:30 today. If you have questions, please contact me at
266-8839. I will be out of the office on Tuesday and Wednesday, back in on Thursday,
10-8. lf, during my absence, you wish further information, please contact Todd Huriey
in Treasury at 266-8837.
The following information is relevant to items #35, 36, and 37.
#35: 98-897 is the resolution authorizing a$3,000,000 lease loan from Narwest Bank
for the City Ha11 Annex remodeling financing. There wil4 be a changed page to the
resolution which authorizes the City Treasury to bring the $3,000,000 in-house to invest
within the City's portfolio. This will provide a higher interest rate return for the funds,
rather than having Nonvest Bank hold and invest the money. (The lease for the
RiverCentre also allowed me to invest the money). I did bid this lease and Norwest won
the bid. Also, the Council has previously approved the budget for the $3,d00,000; this
lease provides the financing.
#36: 98-898 is the resolution accepting a State of Minnesota loan (PFA) for Water
Utility financing in the amount of $16,500,000. The rate is 3.4% The Water Board
knows of this financing and will be approving the Council's actions on October 13, 1998.
There wi41 be some changed pages (filling in the blanks) and a Certificate of the Water
Utility General Manager filed with the Council today, Monday, October 5, 1998. These
are houskeeping additions. Closing the financing and accepting the funds from the
state wili occur after City Council and Water Board approval.
#37 98-899 is the resolution approving 1998 State Law for Capital Improvement
Bonding (C1B) authority. For the Vaw to be effective, there must be local approval. The
previous law ended with 1998 bonding limits. This law provides for future financing
ratios. All limits on general obligation CIB debt must fail within criteria set by the State
Legislafure. As you know, after approval by the City's Capital Improvement Committee,
CIB bonding is always approved by the City Council on an annual basis.
Thank you. ........ Shirley...........