00-327Counci{ F+le # (.10 � .� O� 1
GreenSheet# tOl�
RESOLUTION
OF SAINT PAUL, MINNESOTA
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Presented By
Referred To
Committee
ACCEPTING PROPOSAL ON SALE OF
$8,035,000 WATER REVEN[7E
BONDS, SERIES 2000C, AND PROVIDING FOR
THEIR ISSUANCE
WHEREAS, the Director, Office of Financial Services,
has presented proposals received fbr the sale of $8,035,000 Water
Revenue Bonds, Series 2000C (the "Bonds�� or "2000 Bonds"), of trie
City of Saint Paul, Minnesota (the "City"); and
WHEREAS, the proposals set forth on Schedule A aCtached
hereto were received pursuant to the Terms of Proposal at the
offices of Springsted Incorporated at 10:30 A.M., Central Time,
this same day; and
WHEREAS, the Director, Office of Financial Services,
has advised this Council that the proposal of Robert W. Baird &
Co. was found to be the most advantageous and has recommended
that said proposal be accepted; and
WHEREAS, there are currently outstanding bonds of the
City payable from Net Revenues of the City�s Water Utility,
speci£ically the City's (a) $11,175,000 Water Revenue Bonds,
Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
adopted by this Council on June 15, 1993, of which $2,690,000
remain outstanding, and (b) $7,000,000 Water Revenue Refunding
Bonds, Series 1997C (the ��1997 Bonds"), issued pursuant to a
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resolution adopted by this Council on 3une li, 1997, of which
$5,470,000 remain outstanding, and (c) $16,500,000 Water Revenue
Note of 1998 (the ��1998 Note'�), issued pursuant to a resolution
adopted by this Council on October 7, 1998, of which
$15,395,079_49 is outstanding and more is to be drawn; and there
is currently outstanding a general obligation note of the City
payable on a subordinate lien basis from Net Revenues of the
City's Water Utility, specifically the City's $4,269,844 General
Obligation Wastewater Treatment Water Revenue Note of 1996 (the
"1996 Note"), issued pursuant to a resolution adopted by this
Council on May 15, 1996, of which $3,774,192 remains outstanding;
and the 1997 Bonds refunded bonds issued in 1994, all of which
have been retired (the "1994 Bonds"); and
WHEREAS, it is necessary and desirable to provide for
the issuance of the Bonds on a parity of lien with the 1993
Bonds, 1997 Bonds and 1998 Note, to finance the acquisition and
construction of various improvements (the "Project") 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
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. Paritv Bonds. The 1993 Bonds and 1997 Bonds
shall be a first charge and lien upon the Net Revenues
of the Water Utility. No part of such Net Revenues
sha11 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
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
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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 insufPicient 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 £or 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
Decemher 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 interest 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.
"(c) The proceeds of such parity lien bonds
shall be used only for the purpose of (1) making
improvements, additions, extensions, renewals or
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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
WHEREAS, for purposes of this resolution paragraphs 18
and 11 of the resolutions authorizing the issuance and sale of
the 1993 Bonds and 1998 Note are substantively identical to said
paragraph 18 relating to the 1997 Bonds; and
WHEREAS, the Board and this Council deem it necessary
and expedient to undertake the Project; and
WHEREAS, herein the City makes various findings
demonstrating the propriety of the issuance of the Bonds on a
parity with the 1993 Bonds, 1997 Bonds and 1998 Note and with a
priority of lien over the 1996 Note; and
WHEREAS, in accordance with advice received from the
Board, this Council finds, detexmines and declares that it is
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 Bonds £rom the proceeds of bonds
payable solely from the Net Revenues of the Water Utility; and
WHEREAS, the City has heretofore issued registered
obligations in certificated form, and incurs substantial costs
associated with their printing and issuance, and substantial
continuing transaction costs relating to their payment, transfer
and exchange; and
WAEREAS, the City has determined that significant
savings in transaction costs will result from issuing bonds in
"global book-entry form", by which bonds are issued in
certificated form in large denominations, registered on the books
of the City in the name of a depository or its nominee, and held
in safekeeping and immobilized by such depository, and such
depository as part of trie computerized national securities
clearance and settlement sy5tem (the "National System") registers
transfers of ownership interests in the bonds by making
computerized book entries on its own books and distributes
payments on the bonds to its Participants shown on its books as
the owners o£ such interests; and such Participants and other
banks, brokers and dealers participating in the National System
will do likewise (not as agents of the City) if not the
beneficial owners of the bonds; and
WHEREAS, "Participants" means those financial
institutions for whom the Depository effects book-entry transfers
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and pledges of securities deposited and immobilized with the
Depository; and
WHEREAS, The Depository Trust Company, a limited
purpose trust company organized under the laws of the State of
New York, or any of its successors or successors to its functions
hereunder (the "Depositoxy"), will act as such depository with
respect to the Bonds except as set forth below, and the City has
heretofore delivered a letter of representations (the "Letter of
Representations") setting forth various matters relating to the
Depository and its role with respect to the Bonds; and
WHEREAS, the City will deliver the Bonds in the form of
one certificate per maturity, each representing the entire
principal amount of the Bonds due on a particular maturity
(each a"Global Certificate"), which single certificate per
maturity may be transferred on the City's bond register as
required by the Uniforni Commercial Code, but not exchanged
smaller denominations unless the City determines to issue
Replacement Bonds as provided below; and
date
for
WHEREAS, the City will be able to replace the
Depository or under certain circumstances to abandon the "global
book-entry form" by permitting the Global Certificates to be
exchanged for smaller denominations typical of ordinary bonds
registered on the City's bond register; and "Replacement Bonds"
means the certificates represenCing the Bonds so authenticated
and delivered by the Bond Registrar pursuant to paragraphs 6 and
12 hereof: and
WHEREAS, "HOlder'� as used herein means the person in
whose name a Bond is registered on the registration books of the
City maintained by the registrar appointed as provided in
paragraph 8 (the "Bond Registrar"); and
WHEREAS, pursuant to Minnesota Statutes, Section
475.60, Subdivision 2(9), public sale requirements do not apply
to the Bonds, because the City has retained an independent
financial advisor and this Council has determined to sell the
Bonds by private negotiation, and the City has instead authorized
a competitive sale without publication of notice thereof as a
form of private negotiation; and
WHEREAS, Rule 15c2-12 of the Securities and Exchange
Commission prohibits ��participating underwriters�' from purchasing
or selling the Bonds unless the City undertakes to provide
certain continuing disclosure with respect to the Bonds; and
WHEREAS, proposals for the Bonds have been solicited by
Springsted Incorporated pursuant to an Official Statement and
Terms of Proposal therein:
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NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Saint Paul, Minnesota, as follows:
l. Acceptance of Proposal. The proposal of Robert W.
Baird & Co. (the ��Purchaser��) to purchase $8,035,000 Water
Revenue Bonds, Series 2000C, of the City (the "BOnds�� or ��2000
Bonds", or individually a"Bond�� or '�2000 Bond"), in accordance
with the Terms of Proposal for the bond sale, at the rates of
interest hereinafter set forth, and to pay for the Bonds the sum
of $7,942,459.00, plus interest accrued to settlement, is hereby
found, determined and declared to be the most favorable proposal
received and is hereby accepted, and the Bonds are hereby awarded
to the Purchaser. The Director, Office of Financial Services, or
his designee, is directed to retain the deposit of the Purchaser
and to forthwith return to the others making proposals their good
faith checks or drafts.
2. Title: Original Issue Date• Denominations•
Maturities. The Bonds shall be titled ��Water Revenue Bonds,
Series 2000C", shall be dated May 1, 2000, as the date of
original issue and shall be issued forthwith on or after such
date as fully registered bonds. The Bonds shall be numbered from
R-1 upward. Global Certificates shall each be in the
denomination of the entire principal amount maturing on a single
date. Replacement Bonds, if issued as provided in paragraph 6,
shall be in the denomination of $5,000 each or in any integral
multiple thereof of a single maturity. The Bonds shall mature on
December 1 in the years and amounts as follows:
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Amount
$135,000
150,000
175,000
125,000
250,000
275,000
225,000
375,000
400,000
300,000
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Amount
$325,000
400,000
425,000
475,000
550,000
550,000
600,000
675,000
725,000
900,000
3. Purpose. The Bonds shall provide funds for the
acquisition and construction of the Project. The proceeds of the
Bonds shall be deposited and used as provided in paragraph 17.
The total Cost of the Project, which shall include all costs
enumerated in Minnesota Statutes, Section 475.65, including legal
and other professional charges, publication and printing costs,
interest accruing on money borrowed for Che Project before the
collection of Net Revenues pledged and appropriated therefor, and
all other Costs necessarily incurred and to be incurred from the
inception to the completion of the Project, is estimated to be at
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least equal to the amount of the Bonds. The City covenants that
it shall do all things and perform all acts required of it to
assure that work on the Project proceeds with due diligence to
completion and that any and all permits and studies required
under law for the Project are obtained.
4. Interest. The Bonds shall bear interest payable
semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing December l, 2000, calculated
on the basis of a 360-day year of twelve 30-day months, at the
respective rates per annum set forth opposite the maturity years
as follows:
Maturity Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Interest Rate
4.30$
4.40
4.60
4.70
4.75
4.80
4.85
4.90
4.95
5.00
Maturity Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Interest Rate
5.00°s
5.05
5.10
5.20
5.25
5.25
5.30
5.40
5.45
5.50
5. Description of the Global Certificates and
Global Book-Entry S�stem. Upon their original issuance the Bonds
will be issued in the form of a single Global Certificate for
each maturity, deposited with the Depository by the Purchaser and
immobilized as provided in paragraph 6. No beneficial owners of
interests in the Bonds will receive certificates representing
their respective interests in the Bonds except as provided in
paragraph 6. Except as so provided, during the term of the
Bonds, beneficial ownership (and subsequent transfers of
beneficial ownership) of interests in the Global Certificates
will be reflected by book entries made on the records of the
Depository and its Participants and other banks, brokers, and
dealers participating in the National System. The Depository's
book entries of beneficial ownership interests are authorized to
be in increments of $5,000 of principal of the Bonds, but not
smaller increments, despite the larger authorized denominations
of the Global Certificates. Payment of principal of, premium, if
any, and interest on the Global Certificates will be made to the
Bond Registrar as paying agent, and in turn by the Bond Registrar
to the Depository or its nominee as registered owner of the
Global Certificates, and the Depository according to the laws and
rules governing it will receive and forward payments on behalf of
the bene£icial owners of the Global Certificates.
Payment of principal of, premium, if any, and interest
on a Global Certificate may in the City's discretion be made by
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such other method of transferring funds as may be requested by
the Holder o£ a Global Certificate.
6. Immobilization of Global Certificates bv the
De�ositorv; Successor DenositoLy; Replacement Bonds. Pursuant to
the request of the Purchaser to the Depository, which request is
required by the Ternts of Proposal, immediately upon the original
delivery of the Bonds the Purchaser will deposit the Global
Certificates representing all of the Bonds with the Depository.
The Global Certificates shall be in typewritten form or otherwise
as acceptable to the Depository, shall be registered in the name
of the Depository or its nominee and shall be held immcbili�ed
from circulation at the offices of the Depository on behalf of
the Purchaser and subsequent bondowners. The Depository or its
nominee will be the sole holder of record of the Global
Certificates and no investor or other party purchasing, selling
or otherwise transferring ownership of interests in any Bond is
to receive, hold or deliver any bond certificates so long as the
Depository holds the Global Certificates immobilized from
circulation, except as provided below in this paragraph and in
paragraph 12.
Certificates evidencing the Bonds may not after their
original delivery be transferred or exchanged except:
(i) Upon registration of transfer of ownership of a
Global Certificate, as provided in paragraph 12,
(ii) To any successor of the Depository (or its
nominee) or any substitute depository (a "substitute
depository") designated pursuant to clause (iii) of this
subparagraph, provided that any successor of the Depository
or any substitute depository must be both a"clearing
corporation" as defined in the Minnesota Uniform Commercial
Code at Minnesota Statutes, Section 336.8-102, and a
qualified and registered "clearing agency" as provided in
Section 17A of the Securities Exchange Act of 1934, as
amended,
(iii) To a substitute depository designated by and
acceptable to the City upon (a) the determination by the
Depository that the Bonds shall no longer be eligible for
its depository services or (b) a determination by the City
that the Depository is no longer able to carry out its
functions, provided that any substitute depository must be
qualified to act as such, as provided in clause (ii) of this
subparagraph, or
(iv) To those persons to whom transfer is requested
in written transfer instructions in the event that:
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1 (a) the Depository shall resign or discontinue
2 its services for the Bonds and the City is unable to
3 locate a substitute depository within two (2) months
4 following the resignation or detexznination of
5 non-eligibility, or
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(b) upon a detennination by the City in its sole
discretion (1) that the continuation of the book-entry
system described herein, which precludes the issuance
of certificates (other than Global Certificates) to any
Holder other than the Depository (or its nominee),
might adversely affect the interest of the beneficial
owners of the Bonds, or (2) that it is in the best
interest of the beneficial owners of the Bonds that
they be able to obtain certificated bonds,
in either of which events the City shall notify Holders of
its determination and of the availability of certificates
(the "Replacement Bonds") to Holders requesting the same and
the registration, transfer and exchange of such Bonds will
be conducted as provided in paragraphs 9B and 12 hereof.
In the event of a succession of the Depository as may
be authorized by this paragraph, the Bond Registrar upon
presentation of Global Certificates shall register their transfer
to the substitute or successor depository, and the substitute or
successor depository shall be treated as the Depository for all
purposes and functions under this resolution. The Letter of
Representations shall not apply to a substitute or successor
depository unless the City and the substitute or successor
depository so agree, and a similar agreement may be entered into.
Redemption.
(a) Ootional Redemption; Due Date. All Bonds maturing
after December 1, 2009, shall be subject to redemption and
prepayment at the option of the City on such date and on any day
thereafter at a price of par plus accrued interest. Redemption
may be in whole or in part of the Bonds subject to prepayment.
If redemption is in part, those Bonds remaining unpaid may be
prepaid in such order of maturity and in such amount per maturity
as the City shall determine; and if only part of the Bonds having
a common maturity date are called for prepayment, the Global
Certificates may be prepaid in $5,000 increments of principal
and, if applicable, the specific Replacement Bonds to be prepaid
shall be chosen by 1ot by the Bond Registrar. Bonds or portions
thereof called for redemption shall be due and payable on the
redemption date, and interest thereon shall cease to accrue from
and after the redemption date.
(b) Notation on Global Certificate. Upon a reduction in
the aggregate principal amount of a Global Certificate, the
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Holder may make a notation of such redemption on the panel
provided on the Global Certificate stating the amount so
redeemed, or may return the Global Certificate to the Bond
Registrar in exchange for a new Global Certificate authenticated
by the Bond Registrar, in proper principal amount_ Such
notation, if made by the Holder, shall be for reference only, and
may not be relied upon by any other person as being in any way
determinative o£ the principal amount of such Global Certificate
outstanding, unless the Bond Registrar has signed the appropriate
column of the panel.
(c) Selection of Replacement Bonds. To effect a partial
redemption oP Replacement Bonds having a common maturity date,
the Bond Registrar prior to giving notice of redemption shall
assign to each Replacement Bond having a common maturity date a
distinctive number for each $5,000 of the principal amount of
such Replacement Bond. The Bond Registrar shall then select by
lot, using such method of selection as it shall deem proper in
its discretion, from the numbers so assigned to such Replacement
Bonds, as many numbers as, at $5,000 for each number, shall equal
the principal amount of such Replacement Bonds to be redeemed.
The Replacement Bonds to be redeemed shall be the Replacement
Bonds to which were assigned numbers 5o selected; provided,
however, that only so much of the principal amount of each such
Replacement Bond of a denomination of more than $5,000 shall be
redeemed as shall equal $5,000 for each number assigned to it and
so selected.
(d) Partial Redemption of Re�lacement Bonds. If a
Replacement Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the City or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the City and Bond Registrar duly executed by the
Aolder thereof or his, her or its attorney duly authorized in
writing) and the City shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Replacement Bond, without service charge, a new Replacement Bond
or Bonds pf the same series having the same stated maturity and
interest rate and of any authorized denomination or
denominations, as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the Bond so surrendered.
(e) Rec�uest for Redemotion. The Bond Registrar shall call
Bonds for redemption and payment as herein provided upon receipt
by the Bond Registrar at least forty-five (45) days prior to the
redemption date of a request of the City, in written form if the
Bond Registrar is other than a City officer. Such request shall
specify the principal amount of Bonds to be called for redemption
and the redemption date.
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(f) Notice_ Mailed notice of redemption shall be given to
the paying agent (if other than a City officer) and to each
affected Holder. If and when the City shall call any of the
Bond5 for redemption and payment prior to the stated maturity
thereof, the Bond Registrar shall give written notice in the name
of the City of its intention to redeem and pay such Bonds at the
office of the Bond Registrar. Notice of redemption shall be
given b� first class mai1, postage prepaid, mailed not less than
thirty (30) days prior to the redemption date, to each Fiolder of
Bonds to be redeemed, at the address appearing in the Bond
Register. All notices of redemption shall state:
(i)
(ii)
The redemption date;
`Phe redemption price;
(iii} If less than all outstanding Bonds are to be
redeemed, the identification (and, in the case of partial
redemption, the respective principal amountsl of the Bonds
to be redeemed;
(iv) That on the redemption date, the redemption price
will become due and payable upon each such Bond, and that
interest thereon shall cease to accrue from and after said
date; and
(v) The place where such Bonds are to be surrendered
for payment of the redemption price (which shall be the
office of the Bond Registrar).
(g) Notice to De�ositorv. Notices to The Depository Trust
Company or its nominee shall contain the CUSIP numbers of the
Bonds. Tf there are any Holders of the Bonds other than the
Depository or its nominee, the Bond Registrar shall use its best
efforts to deliver any such notice to the Depository on the
business day next preceding the date of mailing of such notice to
all other Holders.
8. Bond RecTistrar. U.S. Bank Trust National
Association in Saint Paul, Minnesota, is appointed to act as bond
registrar and transfer agent with respect to the Bonds (the "Bond
Registrar"), and shall do so unless and until a successor Bond
Registrar is duly appointed, all pursuant to any contract the
City and Bond Registrar shall execute whiCh is consistent
herewith. A successor Bond Registrar shall be an officer of the
City or a bank or trust company eligible for designation as bond
registrar pursuant to Minnesota Statutes, Chapter 475, and may be
appointed pursuant to any contract the City and such successor
Bond Registrar shall execute which is consistent herewith. The
Bond Registrar shall also serve as paying agent unless and until
a successor paying agent is duly appointed. Principal and
interest on the Bonds shall be paid to the Holders (or record
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holders) of the Bonds in the manner set forth in the fonns of
Bond and paragraph 14 of this resolution.
9. Forms of Bond. The Bonds shall be in the form of
Global Certificates unless and until Replacement Bonds are made
available as provided in paragraph 6. Each form of bond may
contain such additional or different terms and provisions as to
the form of payment, record date, notices and other matters as
are consistent with the Letter of Representations and approved by
the City Attorney.
A. Global Certificates. The Global Certificates,
together with the Certificate of Registration, the Register of
Partial Payments, the form of Assignment and the registration
information thereon, shall be in substantially the following form
and may be typewritten rather than printed:
1149735.2
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1 UNITED STATES OF AMERICA
2 STATE OF MINNESOTA
3 RAMSEY COUNTY
4 CITY OF SAINT PAUL
5 R-
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WATER REVENUE
BOND, SERIES 2000C
INTEREST
RATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
MA`PURITY
DATE
December 1,
CUSIP
DOLLARS
KNOW ALL PERSONS BY THESE PRESEI�'PS that the City of
Saint Paul, Ramsey County, Minnesota (the "ISSUer�� or ��City"),
certifies that it is indebted and for value received promises to
pay to the registered owner specified above or on the certificate
of registration below, or registered assigns, solely from the
source and in the manner hereinafter set forth, the principal
amount specified above, on the maturity date specified above,
unless called for earlier redemption, and to pay interest thereon
semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing December 1, 2000, at the
rate per annum specified above (calculated on the basis of a
360-day year of twelve 30-day months) until the principal sum is
paid or has been provided for. This Bond will bear interest from
the most recent Interest Payment Date to which interest has been
paid or, if no interest has been paid, from the date of original
issue hereof. The principal of and premium, if any, on this Bond
are payable in same-day funds by 2:30 p.m., Eastern time, upon
presentation and surrender hereof at the principal office of
in , Minnesota (the
"Bond Registrar"), acting as paying agent, or any successor
paying agent duly appointed by the Issuer; provided, however,
that upon a partial redemption of this Bond which results in the
stated amount hereof being reduced, the Holder may in its
discretion be paid without presentation of this Bond, which
payment shall be received no later than 2:30 p.m., Eastern time,
and may make a notation on the panel provided herein of such
redemption, stating the amount so redeemed, or may return the
Bond to the $ond Registrar in exchange for a new Bond in the
proper principal amount. Such notation, if made by the Holder,
shall be for reference only, and may not be relied upon by any
other person as being in any way detenninative of the principal
amount of this Bond outstanding, unless the Bond Registrar has
signed the appropriate column of the panel. Interest on this
1149735.2
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DATE OF
ORIGINAL ISSUE
May 1, 2000
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Bond will be paid on each Interest Payment Date in same-day funds
by 2:30 p.m., Eastern time, to the person in whose name this Bond
is registered (the ��Holder�� or "BOndholder") on the registration
books of the Issuer maintained by the Bond Registrar and at the
address appearing thereon at the close of business on the
fifteenth day of the calendar month next preceding such Interest
Payment Date (the "Regular Record Date"). Interest payments
shall be received by the Aolder no later than 2:30 p.m., Eastern
time; and principal and premium payments shall be received by the
xolder no later than 2:30 p.m_, Eastern time, if the Bond is
surrendered for payment enough in advance to permit payment to be
made by such time. Any interest not so timely paid shall cease
to be payable to the person who is the Holder hereof as of the
Regular Record Date, and shall be payable to the person who is
the Holder hereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money
becomes available for payment of the defaulted interest. Notice
of the Special Record Date shall be given to Bondholders not less
than ten days prior to the Special Record Date. The principal of
and premium, if any, and interest on this Bond are payable in
lawful money of the i3nited States of America.
Date of Payment Not Business Dav. If the date for
payment of the principal of, premium, if any, or interest on this
Hond shall be a Saturday, Sunday, legal holiday or a day on which
banking institutions in the City of New York, New York, or the
city where the principal office of the Bond Registrar is located
are authorized by law or executive order to close, then the date
for such payment shall be the next sucCeeding day which is not a
Saturday, Sunday, legal holiday or a day on which such banking
institutions are authorized to close, and payment on such date
shall have the same force and effect as if made on the nominal
date of payment.
Redemotion. All Bonds of this issue (the '�BOnds")
maturing after December 1, 2009, are subject to redemption and
prepayment at the option of the Issuer on such date and on any
day thereafter at a price of par plus accrued interest.
Redemption may be in whole or in part of the Bonds subject to
prepayment. If redemption is in part, those Bonds remaining
unpaid may be prepaid in such order of maturity and in such
amount per maturity as the City shall determine; and if only part
of the Bonds having a common maturity date are called for
prepayment, this Bond may be prepaid in $5,000 increments of
principal. Bonds or portions thereof called for redemption shall
be due and payable on the redemption date, and interest thereon
shall cease to accrue from and after the redemption date.
Notice of Redemption. Mailed notice of redemption
shall be given to the paying agent (if other than a City officer)
and to each affected Holder of the Bonds. In the event any of
the Bonds are called for redemption,_written notice thereof wi11
1149']35.2 14
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be given by first class mail mailed not less than thirty (30)
days prior to the redemption date to each Holder of Bonds to be
redeemed_ In connection with any such notice, the ��CUSIP"
numbers assigned to the Bonds shall be used.
Replacement or Notation of Bonds after Partial
Redemption. Upon a partial redemption of this Bond which results
in the stated amount hereof being reduced, the xolder may in its
discretion make a notation on the panel provided herein of such
redemption, stating the amount so redeemed. Such notation, if
made by the Holder, shall be for reference only, and may not be
relied upon by any other person as being in any way detenninative
of the principal amount of the Bond outstanding, unless the Bond
Registrar has signed the appropriate column of the panel.
Otherwise, the Holder may surrender this Bond to the Bond
Registrar (with, if the Issuer or Bond Registrar so requires, a
written instrument of transfer in form satisfactory to the Issuer
and Bond Registrar duly executed by the Holder thereof or his,
her or its attorney duly authorized in writing) and the Issuer
shall execute (if necessary) and the Bond Registrar shall
authenticate and deliver to the Holder of such Bond, without
service charge, a new Bond of the same series having the same
stated maturity and interest rate and of the authorized
denomination in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
Issuance: Pur�ose; Soecial Obligation. This Bond is
one of an issue in the total principal amount of $8,035,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate, denomination and redemption privilege,
which Bond has been issued pursuant to and in fu11 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 April 5, 2000 (the "Resolu-
tion"), for the purpose of providing, together with certain other
moneys of the Issuer, funds to finance the acquisition and
construction of various improvements to the Water Utility of the
Tssuer. The Bonds 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 within the meaning of any constitutional, Charter
or statutory limitation of indebtedness. In the event of any
default hereunder, the Holder of this Bond 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,
Water Revenue Refunding Bonds, Series 1997C, issued in the
principal amount of $7,000,000, and Water Revenue Note of 1998,
issued in the principal amount of $16,500,000, are a first and
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prior lien upon the Net Revenues of the Water Utility of the
Tssuer, except that the Issuer is authorized under certain
conditions to issue additional revenue obligations on a parity of
lien with these Bonds, all as provided in the Resolution_
Action by Iiolders_ The Holders of twenty percent (200)
or more in aggregate principal amount of Bonds at any time
outstanding may, either at law or in equity, by suit, action, or
other proceedings, protect and enforce the rights of all Holders
of Bonds then outstanding, or enforce and compel the performance
of any and all of the covenants and duties specified in the
Resolution to be performed by the Issuer or the Board of Water
Commissioners or their officers and agents; provided, however,
that nothing shall affect or impair the right of any Bondholder
to enforce the payment of the principal of and interest on any
Bond at and after the maturity thereof, or the obligation of the
Issuer to pay the principal of and interest on each of the Bonds
issued to the respective Holders thereof at the time and place,
from the source and in the manner provided in the Sonds.
Denominations; Exchange; Resolution. The Bonds are
issuable originally only as Global Certificates in the
denomination of the entire principal amount of the issue maturing
on a single date, or, if a portion of said principal is prepaid,
said principal amount less the prepayment. Global Certificates
are not exchangeable for fully registered bonds of smaller
denominations except to evidence a partial prepayment or in
exchange £or Replacement Bonds if then available. Replacement
Bonds, if made available as provided below, are issuable solely
as fu11y registered bonds in the denominations of $5,000 and
integral multiples thereof of a single maturity and are
exchangeable for fully registered Bonds of other authorized
denominations in equal aggregate principal amounts at the
principal office of the Bond Registrar, but only in the manner
and subject to the limitations provided in the Resolution.
Reference is hereby made to the Resolution for a description of
the rights and duties of the Bond Registrar. Copies o£ the
Resolution are on file in the principal office of the Bond
Registrar.
Re�lacement Bonds. Replacement Bonds may be issued by
the Issuer in the event that:
(a) the Depository shall resign or discontinue
its services for the Bonds, and only if the Issuer is
unable to locate a substitute depository within two (2)
months following the resignation or determination of
non-eligibility, or
(b) upon a determination by the Issuer in its
sole discretion (1) that the continuation of the
book-entry system described in the Resolution, which
1149735.2
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precludes the issuance of certificates (other than
Global Certificates) to any Holder other than the
Depository tor its nominee), might adversely aEfect the
interest of the beneficial owners of the Bonds, or (2)
that it is in the best interest of the beneficial
owners of the Bonds that they be able to obtain
certificated bonds.
Transfer. This Bond shall be registered in the name of
the payee on the books of the Issuer by presenting this Bond for
registration to the Eond Registrar, who wi11 endorse his, her or
its name and note the date of registration opposite the name of
the payee in the certificate of registration attached hereto.
Thereafter this Bond may be transferred by delivery with an
assignment duly executed by the Holder or his, her or its legal
representatives, and the Issuer and Bond Registrar may treat the
Holder as the person exclusively entitled to exercise all the
rights and powers of an owner until this Bond is presented with
such assignment for registration of Cransfer, accompanied by
assurance of the nature provided by ].aw that the assignment is
genuine and effective, and until such transfer is registered on
said books and noted hereon by the Bond.Registrar, all subject to
the terms and conditions provided in the Resolution and to
reasonable regulations of the Issuer contained in any agreement
with, or notice to, the Bond Registrar. Transfer of this Bond
may, at the direction and expense of the Issuer, be subject to
certain other restrictions if required to qualify this Bond as
being "in registered form" within the meaning of Section 149(a)
of the federal Internal Revenue Code of 1986, as amended.
Fees upon Transfer or Loss. The Bond Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Bond and any legal or unusual costs regarding
transfers and lost Bonds.
Treatment of Re�stered Owner. The Issuer and Bond
Registrar may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided (except as otherwise provided with
respect to the Record Date) and for all other purposes, whether
or not this Bond shall be overdue, and neither the Issuer nor the
Bond Registrar shall be affected by notice to the contrary.
Authentication. This Bond shall not be valid or become
obligatory for any purpose or be entitled to any security unless
the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Not Oualified Tax-Exemot Obligations. The Bonds have
not been designated by the Issuer as "qualified tax-exempt
obligations" for purposes of Section 265(b)(3) of the federal
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Internal Revenue Code of 1986, as amended. The Bonds do 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 perfonned, precedent to and in the issuance
of this Bond, have been done, have happened and have been
perfonned, in regular and due form, time and manner as required
by 1aw; that this Bond, together with a11 other debts of the
Issuer outstanding on the date of original issue hereof and on
the date of its issuance and delivery to the original purchaser,
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 furnished by its Water
Utility suf£icient in amount to promptly meet the principal and
interest requirements of this issue.
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Bond to be
executed on its behalf by the photocopied facsimile signature of
its Mayor, attested by the photocopied facsimile signature of its
Clerk, and countersigned by the photocopied facsimile signature
of its Director, Office of Financial Services.
1149935.2
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Date of Registration:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution
mentioned within.
Bond Registrar
By
Authorized Signature
Registrable by:
Payable at:
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
riayor
Attest:
City Clerk
Countersigned:
Director, Office of
Financial Services
Water Revenue Bond, Series 2000C, No. R-
1149735.2 19
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CERTIFICATE OF REGISTRATION
The transfer o£ ownership of the principal amount of the attached
Bond 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 BOND REGISTRAR
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REGISTER OF PARTIAL PAYMENTS
The principal amount of the attached Bond has been prepaid on the
dates and in the amounts noted below:
Signature o£ Signature of
Date Amount Bondholder Bond Registrar
If a notation is made on this register, such notation has the
effect stated in the attached Bond. Partial payments do not
require the presentation of the attached Bond to the Bond
Registrar, and a Holder could fail to note the partial payment
here.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this Bond, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UTMA - as custodian for
(Cust) (Minor)
under the Unifonn
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
1149735.2
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ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the attached Bond and does
hereby irrevocably constitute and appoint
attorney to transfer
the Bond on the books kept for the registration thereof, with
fu11 power of substitution in the premises.
Dated:
Notice: The assignor's signature to this
assignment must correspond with the
name as it appears upon the face of
the attaChed Bond in every
particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other �'Eligible Guarantor
Institution�� as defined in 17 CFR 240.17Ad-15(a)(2).
The Bond Registrar
Bond unless the information
below is provided.
Name and Address:
will not effect transfer of this
concerning the transferee requested
(Include information for a11 joint owners if
the Bond is lzeld by joint account.)
1149935.2 2 3
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1 B. Replacement Bonds_ If the City has notified
2 Holders that Replacement Bonds have been made available as
3 provided in paragraph 6, then for every Bond thereafter
4 transferred or exchanged (including an exchange to reflect the
5 partial prepayment of a Global Certificate not previously
6 exchanged for Replacement Bonds) the Bond Registrar shall deliver
7 a certificate in the form of the Replacement Bond rather than the
8 Global Certificate, but the Holder of a Global Certificate shall
9 not otherwise be required to exchange the Global Certificate £or
10 one or more Replacement Bonds since the City recognizes that some
11 beneficial owners may prefer the convenience of the Depository's
12 registered ownership of the Bonds even though the entire issue is
13 no longer required to be in global book-entry form. The
14 Replacement Bonds, together with the Bond Registrar's Certificate
15 of Authentication, the form of Assignment and the registration
16 infonnation thereon, shall be in substantially the following
17 form, with paragraphs identical to those of the form of G1oba1
18 Certificate stated by heading or initial text only:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
�
INTEREST
RATE
WATER REVENUE
BOND, SERIES 2000C
MATURITY DATE OF
DATE ORIGINAL ISSUE
May 1, 2000
REGISTERED OWNER:
CUSIP
PRINCIPAL AMOUNT: DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"),
certifies that it is indebted and for value received promises to
pay to the registered owner specified above, or registered
assigns, solely from the source and in the manner hereinafter set
forth, the principal amount specified above, on the maturity date
specified above, unless called for earlier redemption, and to pay
interest thereon semiannually on June 1 and December 1 0� each
year (each, an "Interest Payment Date"), commencing December 1,
2000, at the rate per annum specified above (calculated on the
basis of a 360-day year of twelve 30-day months) until the
principal sum is paid or has been provided for. This Bond wi11
bear interest from the most recent Interest Payment Date to which
interest has been paid or, if no interest has been paid, from the
date of original issue hereof. The principal of and premium, if
any, on this Bond are payable upon presentation and surrender
hereof at the principal office of ,
in , (the "Sond Registrar�'), acting
as paying agent or any successor paying agent duly appointed by
the Issuer. Interest on this Bond will be paid on each Interest
Payment Date by check or draft mailed to the person in whose name
this Bond is registered (the ��Holder�� or ��Bondholder") on the
registration books of the Issuer maintained by the Bond Registrar
and at the address appearing thereon at the close of business on
the fifteenth day of the calendar month next preceding such
Interest Payment Date (the "Regular Record Date"). Any interest
not so timely paid sha11 cease to be payable to the person who is
the Holder hereof as of the Regular Record Date, and shall be
payable to the person who is the Holder hereof at the close of
business on a date (the "Special Record Date") fixed by the Bond
Registrar whenever money becomes available for payment of the
defaulted interest. Notice of the Special Record Date shall be
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given to Sondholders not less than ten days prior to the Special
Record Date_ The principal of and premium, if any, and interest
on this Bond are payable in lawful money of the United States of
America.
REFERENCE IS HEREBY MP.DE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
IT IS HEREBY CERTIFIED AND RECITED
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Bond to be
sealed with its official seal or a facsimile thereof and to be
executed on its behalf by the original or facsimile signature of
its Mayor, attested by the original or facsimile signature of its
Clerk, and countersigned by the original or facsimile signature
of its Director, Office of Financial Services.
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Date of Registration:
BOND REGISTRAR'S
CERTIRICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
Bond Registrar
By
Authorized Signature
(SEAL)
1149735.2
Registrable by:
Payable at: _
CITY OF SAINT PAUL,
RAMSEY COUN'SY, MINNESOTA
Mayor
Attest:
ty
Countersigned:
Director, Office of Financial
Services
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ON REVERSE OF BOND
Date of Payment Not Business Day
Redemption. Al1 Bonds of this issue (the "Bonds��)
maturing after December 1, 2009, are subject to redemption and
prepayment at the option of the Issuer on such date and on any
day thereafter at a price of par plus accrued interest_
Redemption may be in whole or in part of the Bonds subject to
prepayment. If redemption is in part, those Bonds remaining
unpaid may be prepaid in such order of maturity and in such
amount per maturity as the City shall determine; and if only part
of the Bonds having a common maturity date are called for
prepayment, the specific Bonds to be prepaid shall be chosen by
lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the redemption date, and
interest thereon shall cease to accrue from and after the
redemption date.
I3otice of Redemption
Selection o£ Bonds for Redemption. To effect a partial
redemption of Bonds having a common maturity date, the Bond
Registrar shall assign to each Bond having a common maturity date
a distinctive number for each $5,000 of the principal amount of
such Bond. The Bond Registrar shall then select by lot, using
such meChod of selection as it shall deem proper in its
discretion, from the numbers assigned to the Bonds, as many
numbers as, at $5,000 for each number, shall equal the principal
amount of such Bonds to be redeemed. The Bonds to be redeemed
shall be the Bonds to which were assigned numbers so selected;
provided, however, that only so much of the principal amount o£
such Bond of a denomination of more than $5,000 shall be redeemed
as shall equal $5,000 for each number assigned to it and so
selected. If a Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the Issuer or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the Issuer and Bond Registrar duly executed by
the Holder thereof or his, her or its attorney duly authorized in
writing) and the Issuer Shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Bond, without service charge, a new Bond or Bonds of the same
series having the same stated maturity and interest rate and of
any authorized denomination or denominations, as requested by
such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
Issuance; Pur�ose; Special Obliaation
Action by Holders
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Denominations: Exchange; Resolution. The Bonds are
issuable solely as fully registered bonds in the denominations of
$5,000 and integral multiples thereof of a single maturity and
are exchangeable for fully registered Bonds of other authorized
denominations in equal aggregate principal amounts at the
principal of£ice of the Bond Registrar, but only in the manner
and subject to the limitations provided in the Resolution.
Reference is hereby made to the Resolution for a description of
the rights and duties of the Bond Registrar. Copies of the
Resolution are on file in the principal office of the Bond
Registrar.
Transfer. This Bond is transferable by the Holder in
person or by his, her or its attorney duly authorized in writing
at the principal office of the Bond Registrar upon presentation
and surrender hereof to the Bond Registrar, all subject to the
tenns and conditions provided in the Resolution and to reasonable
regulations of the Sssuer contained in any agreement with the
Bond Registrar. Thereupon the Issuer shall execute and the Bond
Registrar shall authenticate and deliver, in exchange Eor this
Bond, one or more new fully, registered Bonds in the name of the
transferee (but not registered in blank or to "bearer'� or similar
designation), of an authorized denomination or denominations, in
aggregaCe principal amount equal to the principal amount of this
Bond, of the same maturity and bearing interest at the same rate.
Fees upon Transfer or Loss.
Treatment of Reqistered Owner
Authentication
Not Oualified Tax-Exempt Obligations
ABBREVIATIONS
1149"]35.2
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ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the within Bond and does hereby irrevocably constitute and
appoint attorney to transfer the Bond on
the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
Notice: The assignor's signature to this
assignment must correspond with the
name as it appears upon the face of
the within Bond in every
particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other "Eligible Guarantor
Institution" as defined in 17 CFR 240.17Ad-15(a)(2).
The Bond Registrar will not effect tran5fer of this
Bond unless the information concerning the transferee requested
below is provided.
Name and Address:
(Include information for all joint owners if
the Bond is held by joint account.)
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10. Execution The Bonds 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
fornls of the Bonds, and be sealed with the seal of the City;
provided, however, that the seal of the City may be a printed or
photocopied £acsimile; and provided further that any of such
signatures may be printed or photocopied facsimiles and the
corporate seal may be omitted on the Bonds as permitted by law.
In the event of disability or resignation or other absence of any
such of£icer, the Bonds may he signed by the manual or facsimile
signature of that officer who may act on behalf of such absent pr
disabled officer. In case any such officer whose signature or
facsimile of whose signature shall appear on the Bonds shall
cease to be such officer before the delivery of the Bonds, such
signature or facsimile shall nevertheless be valid and sufficient
for a11 purposes, the same as if he or she had remained in office
until delivery.
11. Authentication; Date of Registration. No Bond
shall be valid or obligatory for any purpose or be entitled to
any security or benefit under this resolution unless a
Certificate of Authentication on such Bond, substantially in the
form hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certi£icates o£
Authentication on di£ferent Bonds need not be signed by the same
person. The Bond Registrar shall authenticate the signatures of
officers of the City on each Bond by execution of the Certificate
of Authentication on the Bond and by inserting as the date of
registration in the space provided the date on which the Bond is
authenticated. For purposes of delivering the original Global
Certificates to the Purchaser, the Bond Registrar shall insert as
the date of registration the date of original issue, which date
is May 1, 200�. The Certificate of Authentication so executed on
each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
12. Reqistration; Transfer; Exchanqe. The City will
cause to be kept at the principal office of the Bond Registrar a
bond register in which, subject to such reasonable regulations as
the Bond Registrar may prescribe, the Bond Registrar shall
provide for the registration of Bonds and the registration of
transfers of Bonds entitled to be registered or transferred as
herein provided.
A Global Certificate shall be registered in the name of
the payee on the books of the Bond Registrar by presenting the
Global Certificate for registration to the Bond Registrar, who
will endorse his or her name and note the date o£ registration
opposite the name of the payee in the certificate of registration
on the Global Certificate. Thereafter a Global Certificate may
be transferred by delivery with an assignment duly executed by
the Holder or his, her or its legal representative, and the City
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and Bond Registrar may treat the Holder as the person exclusively
entitled to exercise all the rights and powers of an owner until
a Global Certificate 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 thereon
by the Bond Registrar, all subject to the terms and conditions
provided in this resolution and to reasonable regulations of the
City contained in any agreement with, or notice to, the Bond
Registrar.
Transfer of a Global Certificate may, at the direction
and expense of the City, be subject to other restrictions if
required to qualify the Global Certificates as being "in
registered form" within the meaning of Section 149(a) of the
federal Internal Revenue Code of 1986, as amended.
If a Global Certificate is to be exchanged for one or
more Replacement Bonds, all of the principal amount of the Global
Certificate shall be so exchanged.
Upon surrender for transfer of any Replacement Bond at
the principal office of the Bond Registrar, the City shall
execute (if necessary), and the Bond Registrar shall
authenticate, insert the date of regi5tration (as provided in
paragraph 11) of, and deliver, in the name of the designated
transferee or transferees, one or more new Replacement Bonds of
any authorized denomination or denominations of a like aggregate
principal amount, having the same stated maturity and interest
rate, as requested by the transferor; provided, however, that no
Bond may be registered in blank or in the name of "bearer" or
similar designation.
At the option of the Holder of a Replacement Bond,
Replacement Bonds may be exchanged for Replacement Bonds of any
authorized denomination or denominations of a like aggregate
principal amount and stated maturity, upon surrender of the
Replacement Bonds to be exchanged at the principal office of the
Bond Registrar. Whenever any Replacement Bonds are so
surrendered for exchange, the City shall execute (if necessary),
and the Bond Registrar shall authenticate, insert the date of
registration of, and deliver the Replacement Bonds which the
Holder making the exchange is entitled to receive. Global
Certificates may not be exchanged for Global Certificates of
smaller denominations.
provided
the Bond
City.
All Bonds surrendered upon any exchange or transfer
for in this resolution shall be promptly cancelled by
Registrar and thereafter disposed of as directed by the
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All Bonds delivered in exchange for or upon transfer of
Bonds shall be valid special obligations of the City evidencing
the same debt, and entitled to the same benefits under this
resolution, as the Bonds surrendered for such exchange or
transfer.
Every Bond presented or surrendered for transfer or
exchange shall be duly endorsed or be accompanied by a written
instrument of transfer, in form satisfactory to the Bond
Registrar, duly executed by the Holder thereof or his, her or its
attorney duly authorized in writing.
The Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in connection with the transfer or exchange of any Bond and any
legal or unusual costs regarding transfers and lost Bonds.
Transfers shall also be subject to reasonable
regulations of the City contained in any agreement with, or
notice to, the Bond Registrar, including regulations which permit
the Bond Registrar to close its transfer books between record
dates and payment dates.
13. Rights Upon Transfer or Exchanae. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
other Bond shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
14. Interest Pavment; Record Date. Interest on any
Global Certificate shall be paid as provided in the first
paragraph thereof, and interest on any Replacement Bond shall be
paid on each Interest Payment Date by check or draft mailed to
the person in whose name the Bond is registered (the �'Holder") on
the registration books of the City maintained by the Bond
Registrar, and in each case at the address appearing thereon at
the close of business on the fifteenth (i5th) day of the calendar
month next preceding such Interest Payment Date ithe "Regular
Record Date��). Any such interest not so timely paid shall cease
to be payable to the person who is the Holder thereof as of the
Regular Record Date, and sha11 be payable to the person who is
the Holder thereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money
becomes available for payment of the defaulted interest. Notice
of the Special Record Date shall be given by the Bond Registrar
to the Holders not less than ten (1�) days prior to the Special
Record Date.
15. Holders; Treatment of Reqistered Owner; Consent of
Holders.
(A) For the purposes of all actions, consents and other
matters affecting Holders of the Bonds, other than payments,
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redemptions, and purchases, the City may (but shall not be
obligated to) treat as the Holder of a Bond the beneficial owner
of the Bond instead of the person in whose name the Bond is
registered. Eor that purpose, the City may ascertain the
identity of the beneficial owner of the Bond by such means as the
Bond Registrar in its sole discretion deems appropriate,
including but not limited to a certificate from the person in
whose name the Bond is registered identifying such beneficial
owner.
(B) The City and Bond Registrar may treat the person in
whose name any Bond is registered as the owner of such Bond for
the purpose of receiving payment of principal of and premium, if
any, and interest (subject to the payment provisions in paragraph
14 above) on, such Bond and for all other purposes whatsoever
whether or not such Bond sha11 be overdue, and neither the City
nor the Bond Registrar 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 Holders may be
in any number of concurrent writings of similar tenor and must be
signed or executed by such Holders 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
ownership of Bonds, if made in the following manner, shall be
sufficient for any of the purposes of this resolution, and sYsall
be conclusive in favor of the City with regard to any action
taken by it under such request or other instrument, namely:
(1) The fact 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
signing such writing acknowledged before him the execution
thereof, or by an affidavit of any witness to such
execution.
(2) Subject to the provisians of subparagraph (A)
above, the fact of the ownership by any person of Bonds and
the amounts and numbers of such Bonds, and the date of the
holding of the same, may be proved by reEerence to the bond
register.
16. Delivery; Application of Proceeds. The Global
Certi£icates when so prepared and executed shall be delivered by
the Director, Office of Financial Services, to the Purchaser upon
receipt of the purchase price, and the Purchaser shall not be
obliged to see to the proper application thereof.
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17. Fund and Accounts. For the convenience and proper
administration oE the proceeds from the sale of the 2000 Bonds
and for the payment of principal of and interest on the 2000
Bonds, the Board of Water Commissioners Water Utility Enterprise
Fund (the "Water Utility Fund", heretofore in resolutions
relating to the 1993 Bonds, 1997 Bonds and 1998 Note also
referred to as the "Water Utility Fund") heretofore created shall
continue in force and effect as a separate fund of the City and
of the Board until all of the 2000 Bonds are fully paid and
retired. In the Water Utility Fund there is hereby created a
2000 Construction Account and in addition there are, and there
shall continue to be, the following accounts:
(a) A"2000 Construction Account", to whiCh shall be
credited all proceeds of the sale of the 2000 Bonds other
than accrued interest and amounts in excess of $7,930,545.
The 20�0 Construction Account shall be used to pay the costs
of the Project, including all costs enumerated in Minnesota
Statutes, Section 475.65. The moneys in the 2000
Construction Account shall be used solely for the purposes
herein set forth and for no other purpose, except that any
surplus in the 2000 Construction Account shall be deposited
in the Revenue Bond Debt Service Account.
(b) An "Ooeration 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 sha11 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, ai.d all
other items which, by sound accounting practices, constitute
nornlal, 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 resexve 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
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
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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 sale proceeds of the 2000 Bonds
representing accrued interest and amounts in excess of
$7,930,545, and further into which there shall be credited
and to which there is hereby irrevocably pledged from the
Net Revenues of the operation of the Water Utility system
monthly commencing in June, 2000, a sum equal to at least
1/12 (in 2000, 1/6 through November as to the 2000 Bonds
only) of the total principal and interest on the 2000 Sonds
and any other bonds issued on a parity therewith during the
ensuing twelve (12) months; provided, however, that no
further payments need be made to said account when the
moneys held therein are sufficient for the payment of all
principal and interest due on said bonds 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 2000 Bonds and any other bonds which are
issued on a parity with the 2000 Bonds.
(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 bonds payable from the
Revenue Bond Debt Service Account; provided, however, that
the moneys in the Reserve Account may be used to prepay said
bonds, when such prepayment will retire all of the bonds
then outstanding. $575,925 from the Water Utility's retained
earnings shall be deposited in the Reserve Account upon the
issuance of the 2000 Bonds, and amounts already in the
Reserve Account pursuant to the resolutions authorizing the
issuance of the 1993 Bonds, 1997 Bonds and 1998 Note shall
be maintained therein upon the issuance of the 2000 Bonds 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,
1998 Note and 2000 Bonds. Whenever the moneys in the
Reserve Account exceed the amount required to be maintained
in the Reserve Account as set Eorth below, such excess may
be transferred to the Revenue Bond Debt Service Account; and
whenever the moneys in the Reserve Account sha11 be less
than said amount, the Reserve Account shall be restored to
said amount from the next available A7et Revenues. The
amount required to be maintained in the Reserve Account
shall be an amount equal to the lesser of: (1) ten percent
(l0a) of the original principal amount of the 2000 Bonds 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
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any year on the bonds payable from the Revenue Bond Debt
Sesvice 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 issued after the 1994
Bonds (as defined in the resolution authorizing trie issuai.ce
of the 1997 Bonds, 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 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
rating(s) 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 Utility 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, 1998 Note and
20�0 Bonds to be paid to the United States in order to
maintain the exclusion from gross income under Section 103
of the Code (as hereinafter defined) of the interest on the
1993 Bonds, 1997 Bonds, 1998 Note and 2000 Bonds_
(i) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
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2000 Bonds shall be maintained and operated as required by
the resolutions authorizing the same.
(j) No portion of the proceeds of the 2000 Bonds 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 2000 Bonds were
issued, (2) as part of a reasonably required reserve or
replacement fund not in excess of ten percent (l00) of the
proceeds of the 2000 Bonds (or in a higher amount which the
City establishes is necessary Co the satisfaction of the
Secretary of the Treasury of the United States), and (3) in
addition to the above in an amount not greater than the
lesser of five percent (5°s) of the proceeds of the 2000
Bonds or $100,000. To this effect, any proceeds of the 2000
Bonds and any sums from time to time held in the 2000
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 bonds 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 taking 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 2000 Bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the federal Internal Revenue
Code of 1986, as amended (the '�Code��).
18. Paritv Bonds. The 1993 Bonds, 1997 Bonds, 1998
Note and 2000 Bonds 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 any 1993 Bonds, 1997 Bonds, 1995 Note or
2000 Bonds or bonds 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 the rates
and charges of the Water Utility sufficient to timely pay such
general obligation bonds. I3o additional revenue obligations
payable from the Revenue Bond Debt Service Account sha11 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
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parity of lien with the 2000 Bonds, 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 ma�cimum 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 other 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 £or 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.
(c) The proceeds of such parity lien bonds shall be
used only for the purpose of (1) making improvements,
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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 19 or 25 as applied in paragraph 20).
19. Refunding Maturing Bonds. The City also reserves
the right and privilege of issuing additional revenue bonds if
and to the extent needed to refund maturing bonds payable from
the moneys in the Water Utility Fund in case the moneys in the
Revenue Bond Debt Service Account are insuEficient 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, 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.
20. Other Revenue Obli�rations. Except as authorized
in paragraphs 18, 19 and 25 hereof, the City covenants and agrees
that it wi11 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 2000 Bonds on said Net Revenues. If bonds which refund the
2000 Bonds are parity lien bonds, they shall enjoy complete
equality of lien with any portion of the 2000 Bonds not refunded
and any other then outstanding bonds payable from the Revenue
Bond Debt Service Account, if any there be, and such refunding
bonds shall continue to have whatever priority of lien over
subsequent issues that the refunded bonds may have had. If only
a portion of the outstanding 2000 Bonds shall be refunded and if
such 20�� Bonds shall be refunded in such manner that the
interest rate of any refunding bond shall be greater than the
interest rate of the corresponding refunded 2000 Bond (or the
average net interest rate of the refunding bonds shall be, or
shall be reasonably esCimated to be, higher than the average net
interest rate of the refunded 2000 Bonds), or that the maturity
date of any refunding bond shall be earlier than the maturity
date of the corresponding refunded 2000 Bond (or the average
maturity of the refunding bonds shall be earlier than the average
maturity of the refunded 2000 Bonds), then such 2000 Bonds may
not be refunded without the consent of the holders of the
unrefunded portion of the 2000 Bonds and any other bonds then
outstanding payable from the Revenue Bond Debt Service Account
unless the Net Revenues coverage test of paragraph 18 is met.
21. Insufficient Amounts. Tn the event that the
moneys in the Revenue Bond Debt Service Account and Reserve
Account shall be insufficient at any particular time to pay the
principal then due and interest then accrued on all bonds payable
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from the 12evenue Bond Debt Service Account, said moneys shall
first be applied to the payment pro rata of the accrued interest
on all such bonds, payable over a period ending on June 1 or
December 1, as appropriate, and any balance sha11 be applied ir
payment pro rata of the principal on all such bonds, provided
further that if it shall ever be determined by a court of
competent jurisdiction while any such bonds 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.
22. Suit by Sondholders. The Holders of twenty
percent (200) or more in aggregate principal amount of bonds
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 of all Holders of the
2000 Bonds then outstanding 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.
23. Covenants. For the protection of the Holders of
the 2000 Bonds, 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 thereof.
(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 Utility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
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principal and interest on the bonds payable from 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 2000 Bonds and all bonds on a parity of
lien with the 2000 Bonds, 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 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 25 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 otlzer non-revenue-producing properties which in
the judgment of the City have become unnecessary,
uneconomical or inexpedient to use in connection with the
Water Utilit� 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.
(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 oE said audit shall be furnished, without cost, to the
Purchaser of the 2000 Bonds. If the City fails to provide
such audit within a reasonable time after the end of said
fiscal year, the holders of twenty percent (20°s) or more of
the outstanding bonds 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 Purchaser of the 2000 Bonds and the Holders
thereof, or their duly appointed representatives, from time
to time shall have the right, at all reasonable times, to
inspect the Water Utility system and to inspect and copy the
1149'/35.2 4 2
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books, records, accounts and data relating thereto. The
City agrees to furnish copies of such audit, without cost,
to any Holder or Aolders of the 2000 Bonds at their request
within a reasonable time after the end of each fiscal year.
(f) It will faithfully and punetually perform all
duties with reference to the Water Utility required by the
City Charter, the Constitution and laws o£ the State of
Minnesota and this resolution.
(g) It will grant no franchise to any competing
utility.
24. Amendments. No change, amendment, modification or
alteration shall be made in the covenants made with Holders of
the 2000 Bonds without the consent of the Holders of not less
than sixty percent (600) in principal amount of such 2000 Bonds
then outstanding except for changes, amendments, modifications
and alterations (a) made to cure any ambiguity or formal defect
or omission, or (b) which would not materially prejudice the
Holders of such outstanding 2000 Bonds; provided, however, that
nothing herein contained shall permit or be construed as
permitting (1) an exCension of the maturity of the principal of
or Che interest on any such 2000 Bonds, or (2) a reduction in the
principal amount of any such 2000 Bond or the rate of interest
thereon, or (3) a privilege or priority of any such 2000 Bond or
2000 Bonds over any other bond or bonds except as otherwise
provided herein, or (4) a reduction in the aggregate principal
amount of such 2000 Bonds 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 such 2000
Bonds, except as hereinbefore expressly permitted, or t6) a
modification of any of the provisions of this paragraph without
the consent of the Holders of one hundred percent (1000) of the
principal amount of such 2000 Bonds outstanding.
25. Discharae. When all 2000 Bonds have been
discharged as provided in this paragraph, all pledges, covenants
and other rights granted by this resolution to the Holders of the
2000 Bonds shall cease. The City may discharge all 2000 Bonds
which are 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 such 2000 Bonds on or before that date a sum sufficient
for the payment thereof in full; or if any 2000 Bond 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 2000
Bonds which are called for redemption on any date when they are
prepayable according to their 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
1149"/35.2 43
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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 issue of the 2000 Bonds in whole or in part by
complying with the applicable provisions of Minnesota Statutes,
Section 475.67, and any amendments thereto, except Chat the funds
deposited in escrow in accordance with said provisions may but
need not be in whole or part proceeds of advance refunding bonds.
The City may discharge 2000 Bonds as herein provided without the
consent of any Bondholders.
26. Fiscal Year. As used in this resolution the words
"fiscal year" shall mean the twelve (12) 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 £iscal 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.
27. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Purchaser, and to Che attorneys approving the legality of the
issuance of the Bonds, certified copies of a11 proceedings and
records of the City relating to the Bonds 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 Bonds 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
furnished, shall be deemed representations of the City as to the
facts recited therein.
28. Negative Covenants as to Use of Proceeds and
Improvements. The City hereby covenants not to use the proceeds
o£ the Bonds or to use the Improvements, or to cause or permit
them to be used, or to enter into any deferred payment
arrangements for the cost of the Improvements, in such a manner
as to cause the Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code. The
City reasonably expects that no actions wi11 be taken over the
term of the Sonds that would cause Chem to be private activity
bonds, and the average term of the Bonds is not longer than
reasonably necessary for the governmental purpose of the issue.
The City hereby covenants not to use the proceeds of the Bonds in
such a manner as to cause the Bonds to be "hedge bonds�� within
the meaning of Section 149(g) of the Code.
29. Tax-Exempt Status of the Bonds• 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 Bonds, including
1149735.2 4 4
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without limitation requirements relating to
investments, limitations on amounts invested
than the yield on the Bonds, and the rebate
earnings to the United States.
temporary periods for
at a yield greater
of excess investment
If any elections are available now or hereafter with
respect to arbitrage or rebate matters relating to the Bonds, 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 Bonds, and all such elections
shall be, and shall be deemed and treated as, elections of the
City.
30. No Designation of Oualified Tax-Exem�t
Obliaations. The Bonds, together with other obligations issued
by the City in 2000, exceed in amount those which may be
qualified ae "qualified tax-exempt obligations" within the
meaning of Section 265(b)(3) of the Code, and hence are not
designated for such purpose.
31. Letter of Repre5entations. The Letter of
Representations-for the Bonds is hereby confirmed to be the
Blanket Issuer Letter of Representations dated April 10, 1996, by
the City and received and accepted by The Depository Trust
Company. So long as The Depository Trust Company is the
Depository or it or its nominee is the Holder of any Global
Certificate, the City shall comply with the provisions of the
Letter of Representations, as it may be amended or supplemented
by the City from time to time with the agreement or consent of
The Depository Trust Company.
32. Parity Findinqs. It is hereby found, determined
and declared that:
(a1 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, 1997 Bonds and 1998 Note
and the subordinate 1996 Note.
lb) All payments required to be made prior to the date
riereof 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, 1997 Bonds and 1998 Note have been made.
(c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
iias�ss.z 4 5
�-3a,7
the 2000 Bonds have been more than one and one-half (1.5)
times, specifically 3.070 and 3.288 times, respectively, the
maximum annual principal and interest coming due hereafter on
all outstanding revenue obligations payable from and having a
parity of lien upon the Net Revenues, being the 1993 Bonds,
1997 Bonds and 1998 Note, and the 2000 Bonds as the
obligations proposed to be issued, to wit:
Net Revenues 199&
Net Revenues 1999
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and
Interest on the 1998 Note
Maximum Annual Principal and
Interest on the 2000 Bonds
Maximum Annual Principal and
Interest on the 1993 Bonds,
1997 Sonds, 1998 I3ote and
2000 Bonds
(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
$10,478,238
$11,219,964
$ 987,000
$ 8'78,218
$ 1,616,868
$ 949,500
S 3,412,629
$ 5,118,944
This City Council has been furnished with the Certificate 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 L3tility during the term of the 2000 Bonds will be more
than sufficient to provide Net Revenues adequate to pay
principal and interest when due on the 2000 Bonds and on
those other bonds which are now outstanding and to maintain
the Reserves required therefor.
(f) The 2000 Bonds have a December 1 maturity or
maturities and has interest payments on June 1 and December
1, and are in compliance with the other requirements for
parity bonds.
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(g) The proceeds of the 2000 Bonds shall only be used
for the purpose o£ 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 1996 Note and 2000 Bonds.
33. Covenant with Holders 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 Bonds.
34. Negotiated Sale. The City has retained Springsted
Incorporated as an independent financial advisor, and this
Council has heretofore determined, and does hereby determine, to
sell the Bonds by private negotiation to the Purchaser, all as
provided by Minnesota Statutes, Section 475.60, Subdivision 2(9).
35. Continuing Disclosure. The City is an obligated
person with respect to the Bonds. The City hereby agrees, in
accordance with the provisions of Rule 15c2-12 (the "Rule"),
promulgated by the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as
amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described, to:
A. Provide or cause to be provided to each nationally
recognized municipal securities information repository
("NRMSIR") and to the appropriate state information
depository ('�SID"), if any, for the State of Minnesota, in
each case as designated by the Commission in accordance with
the Rule, certain annual financial information and operating
data in accordance with the Undertaking. The City reserves
the right to modify from time to time the terms of the
Undertaking as provided therein.
B. Provide or cause to be provided, in a timely
manner, to (i) each NRMSIR or to the Municipal Securities
Rulemaking Board ("MSRB") and (ii) the SID, notice of the
occurrence of certain material events with respect to the
Bonds in accordance with the i3ndertaking.
C. Provide or cause to be provided, in a timely
manner, to (i) each NRMSIR or to the MSRB and (ii) the SID,
notice of a failure by the City to provide the annual
financial information with respect to the City described in
the Undertaking.
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The City agrees that its covenants pursuant to the Rule
set forth in this paragraph 35 and in the Undertaking are
intended to be for the benefit of the Holders of the Bonds and
shall be enforceable on behalf of such Holders; provided that the
right to enforce the provisions of these covenants shall be
limited to a right to obtain specific enforcement of the City's
obligations under the covenants.
The Mayor and Director, Office of Financial Services,
or any other officers of the City authorized to act in their
stead (the "Officers"), are hereby authorized and directed to
execute on behalf of the City the Undertaking in substantially
the £orn1 presented to the City Council, subject to such
modifications thereof or additions thereto as are (i} consistent
with the requirements under the Rule, (ii) required by the
Purchaser, and (iii) acceptable to the Officers.
36. 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_
37. Aeadinas. 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 6y Oepartment of.
���1G� c�F ���t��tk� Sc��l��
g � �'` �-_—�--`1
Adopted by Council: Date ���� S .�flOa
Adoption Certified by Councit Secretary
By: '�r ���v
Approved by Mayor. D Q
B Y —�� � �--'
Form Ap roved b City Attorney
�r�-- � ,. C"''°-
By: —.
d�_ o a
Appro db MayorforSubmi
e f
48
t - Abs�e�.�-� ovJ
i
!,�_ �/.
.__�^�'?�
OJ1TE N11i111iED
:��.� GREEN SHEET
� U oEr�ue�r c.rcrc. U a�rwu��� _
\GEIJ44 BY (WTE]
K441GN
NUYBERFOR �CrtYAiTa11E! anCtfltlt_
RWTItICs
� ❑ ALIKUL9BIYCF80R i111111C1�L9EM�CC10
❑3 wraR ❑
TOTAL # OF SIGNATURE PAGES 1_ (CL1P ALL LOCATIONS FOR SIGNATURE)
iis resdution accePts the winnirg proposal and awards the bid fw fhe $8,035,000
ater Revenue Bonds. Series 2000C. This is a eomD�e borW sale and tlx award
poing to the bidder fouM most advantagcos (lovrest eost) to the City.
PLANNING COMMISSION
CIB COMMI7TEE
CML SERVICE COMMISSION
IATING PROBLEM ISSUE, OPPORTUNITY (Wlw, What, When, Where, Why)
boMS are for the purpose of finaricing various imprwemenls to the Ulility. aM will be repaid by re�enues of the U[ilily.
be available for impfovements to the UIiIM1y.
evs:.ma.:
Has this Pe�Krm e�er waked unUer a cont'act tor this tlepartment?
VES NO
tias this persa�rm ever been a city employee9
YES NO
Dces th's pe�soNfirtn possess a sldll trot rrormally possessed by any curte�rt cily employee?
YES NO j
Is Mis pereoMrtn a targeted veMOR
YES NO
dain all ves ansvrers on seoarate sheet aM atlach to nreen sheet
�O ��0��
No 101150
needed for certain Utility imqouements will not be available.
AMOUNT OF 7RANSACiION S Se.ms.000
COST/REVENUE BUDGETED (GIRCLE ON�
YES NO
SOURCE
ACTIVITY NUMBER
(EXPWN)
oo-3a7
8i SEVENTH PLACE EAST, SUITE 100
SAIST PA[iL, MN 55101-2R87
// 6i1-223-3000 FAX:657-28-3002
lJ
SPRINGSTED
Publu Finance Advuors
April 5, 2000
/..
Mr. Joe Reid, Director Mr. Bernie Bullert, General Manager
Office of the Financial Services Saint Paul Regional Water Services
City of Saint Paul 8 Fourth Street East, Suite 400
240 City Hall Saint Paul, MN 55101
15 West Kellogg Boulevard
Saint Paul, MN 55102
RE: Recommendations for Award of City of Saint Paul's
$8,035,000 Water Revenue Bonds, Series 2000C
Dear Mr. Reid and Mr. Bullert;
This letter summarizes the results of the competitive bids opened at 10:30 A.M. this morning for
this issue.
Purpose of Issue
The purpose of this Water Revenue issue is to fund various capital improvements of Water
Regional Services. The issue will be repaid solely by net revenues of the water utility.
Tax-Exempt Market Rates
The tax-exempt market has moved downward over the last several weeks.. A major national
index of tax-exempt interest rates (the Bond Buyer's Index — BBI) is currentiy 5.74%.
Sale Results
The City received four bids on the issue. The bids were as follows:
Rank Bidder
Robert Baird
PiperJaffray
Cronin
Dain Rauscher
TIC (%1
5.3683
5.3797
5.4378
5.4772
The lowest or best bid was received from Robert Baird (Milwaukee) at a true interest rate of
5.36%.
SAINT PAUL, MN � MIN�'EAPOLIS, MN - MILWAIIKEE, Wf • OVERLAND PARK, KS • WASHINGTON, DC • DES MOINES, IA
�-3a�
City of Saint Paul, Minnesota
April 5, 2000
Page 2
We require bidders to submit their bids on a"True Interest Rate (TIC) basis, so as to reflect the
present value of their bids and thereby ensure the City award based on the lowest cost to the
City. We have enclosed bid tabulation forms for the issue summarizing the bid specifics and
composition of each underwriting syndicate.
Recommendation
We recommend award of sale to Robert W. Baird for these Water Revenue Bonds.
Basis of Recommendation
We believe the interest rates received by the City today aggressively reflect current market
conditions for this issue. In our financing recommendations for this issue, previously provided,
we estimated a TIC rate of 5.79% for the week of March 21. This result of 5 36% far exceeds
any market movement occurring during the interim.
Credit Rating
We have enclosed the written reports on the Water Regional Services ratings for this issue from
Moody's, and Standard & Poor's. The S&P report announces the upgrading of the rating to
AA+. Moodys reaffirms the rating at Aa2. Both have a stable outlook for the rating. Saint Paul
Water Regional Services should take great pride in its upgrading. We believe that the AA+ is
an exceptional rating for a water utility. Both the City and the Water Board should take
particular pride in this achievement.
We appreciate the opportunity to again be of service to the City and the Water Board on this
very successful issuance program. We welcome any questions regarding this sale process.
Respectfully,
�`�it�-v �� � �� ��4� ✓� �
David N. MacGillivray
Principal
Director of Project Management
,'i113
enclosure
cc: Ms Barb Maynard, Acting Treasurer
o a7
//
RS E. SEVENTH PLACE, SUITE 100
SAINT PAUL, M[Y 55101-2887
65i-Z?3-3000 FAX: 651-2233002
SPRINGSTED
Public Finance Advisors
$8,035,000
CITY OF SAINT PAUL, NIINNESOTA
WATER REVENUE BONDS, SERIES 2000C
(BOOK EN1'RY ONLI�
I:�.\ N�
SALE:
April 5, 2000
Moody's Rating: Aa2
Standard & Poor's Rating: AA+
Interest Net Interest 17ue Interest
Bidder Rates Price Cast Rate
ROBERT W. BAIRD & COMPANY
INCORPORATED
U.S. BANCORP PIPER IAFFRAY INC.
NORWEST INVESTMENT SERVICES, INC.
Edward D. Jones & Company
ROBERT W. BAIItD & COMPANY, INCORPORATED
4.30%
4.40%
4.60 %
4.70 %
4.75 %
4.80 %
4.85 %
4.90%
4.95 %
5.00%
5.05 %
5.10%
5.20 %
5.25%
5.30 %
5.40 %
5.45 %
5.50 %
4.50%
4.60%
4.70 %
4.75 %
4.80%
4.90%
5.00%
5.10%
520%
5.25 %
5.30%
5.35 %
5.40 %
5.50%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009-2010
2011
2012
2013
2014-2015
2016
2017
2018
2019
2000-2002
2003
2004
2005
2006-2007
2008-2009
2010-2011
2012
2013
2014
2015
2016
2017
2018-2019
$7,942,459.00
$7,934,980.20
$5,558,425.17
$5,569,562.51
5.3683 %
5.3797 %
(Continued)
SAINTPAUL,MN , MINNEAPOLIS,MN , MILWAUKEE,WI � OVERLANDPARK,KS , waSHINGTON,DC . DESMOINES,IA
Interest Netlnterest True Interest
Bidder Rates Price Cost Rate
CRONIN & COMPANY, INCORPORATED
SALOMON SMITH BARNEY
MORGAN STANLEY DEAN WITTER
PAINEWEBBERINCORPORATED
CIBC WORLD MARKETS
FIRST UNION CAPITAL MARKETS
CORPORATION
SOUTHWEST SECURITIES, INC.
DAIN RAUSCHERINCORPORATED
Isaak Bond Investments, Inc.
4.50 %
4.60 %
4.70 %
4.75 %
5.00 %
5.10 %
5.20 %
5.25 %
5.35 %
5.40 %
5.50 %
4.75%
4.875%
4.90%
5.00%
5.125 %
S.IS%
525%
5.375%
5.40%
5.50 %
5.60 �
2000-2001
2002
2003
2004
2005-2010
2011
2012
2013
2014-2015
2016-2017
2018-2019
2000-2001
2002-2005
2006-2007
20p8-2010
2011
2012
2013
2014
2015
2016-2018
2019
$7,931,767.35
$7,930.711.00
REOFFERING SCHEDULE OF THE PURCHASER
Rate
4.30 %
4.40 %
4.60 %
4.70%
4.75%
4.80%
4.85 %
4.90 %
4.95 %
5.00 %
5.00 %
5.05 %
5.10 %
5.20 %
5.25 %
5.25 %
5.30 %
5.40 %
5.45 %
5.50 %
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Yield
Par
Par
Par
Par
Par
Paz
Par
Paz
Par
Par
5.05 %
5.t0%
5. LS%
5.25 %
5.30 %
5.35%
5.40%
5.50 %
5.55 %
5.60 %
$5,623,533.69
$5,666,814.52
5.4378%
5.4772%
BBI: 5.74%
Average Maturity: 12.93 Years
Analysts:
Peter V. Musphy, New Yo�k
212-438-2065
UPGRADED
$1.02 mil wtr rev bnds
OUTLOOK REVISED
TO
AA+
TO
Stable
FflOM
AA
FROM
Posit�ve
RATIONALE
James Wiemken, Chuago The ratmg upgrade on St. Paul, Minn.'s water revenue bonds reflects connnued strong financial
312-669-9170 performance and liquidity and maintenance of low debt levels afcer completmg substannal capital
�mprovements from rewrrmg revenues.
Other strengths supporting the ratfng are:
• A sound service area economy,
• Affordable rares despite frequent rate adjustments,
• Solid legal provisions, and
• �lanageable capital needs.
The bonds are secured by a first hen pledge of net revenues of the Sc Paul Regional Wacer
Servues (SPRW$) system.
The setvice area economy connnues ro grow along wah tha[ of the Twin Cities metropolaan area.
Anchoring the city's diverse economic base �s the stare govemment and the health, fmanctal
serv�ces, and educations; serv�czs seaors. Maaufacturing >Iso :etams a presence m the ciry's area
economy. Unemployment rares are generally 1%-2% be(ow the state's and nanods averages,
indicanng a measure of economic stabiliry. Curren[ effotts on the part oE the ciry and the pnvate
sector mdude the mcreasing of retail, entertamment, and residential investment m the ciry's
downrown core. �
Financial performance remains strong. Historical and pro�ected coverage of revenue debt is
stable at about 3 times (x). Cash balances are strong, exceeding n�ne monchs' operating expenses. In
addmon, a low debt burden totaling $36 million, including [his issue, provides capacity for future
issues. The 2000 bonds will fund various system improvements.
The system servues 93,000 retail customers in St. Paul; West St. Paul, Minn.; Maplewood,
Minn.; Mendota Heighes, Minn.; Falcon He�ghts, Minn.; and Lauderdale, Minn., as well as two
wholesale cusromers. Three ocher cities receive warer on a retad basis. The city plans to concinue ro
acquire these retail sysrems over nme, creating a regional water supply rysrem. The first acquisition,
Maplewood (8,200 customers), took place in January 1998 with two more acquisitions taking
place m 1999. The utility has adequate warer supply and treatment and has succeeded in miuganng
Standard & Poor's �
an� �'n�xrc.�rrmo.�.a
Pu�Lgpa py SGtMaeE 8 Pow s a Oinsmn of iM1e McG�aw�Xtll Lnmpames. �� &earne oft�s Illi Avx�e oi rtieAmenws. New Yoh. N V Ip020. Edironal olGres 55 Wat¢r Svret.
New YM, N.Y 100C1 Subw�Eer umas. �112� d38�]IBO Copyrig�� 1999 Ey iM McG�aw�Hdl Compan�eS Inc fleryotluttion m whole or in part IXa�iM�ed e�cept py permisswn
NEW RATING
CREDIT PROFILE $g� mil wtr rev bnds ser 2000C dtd May 1, 2000
due Dec 1, 2019 AA+
Sale dare: Aprd 5, 2000
MerCh 30.2000 Compentive sale
Standard & Poor's PuB�tC Fmn�CE
h�gh lead tevels wi[h corrosion
conuol processes. Wacer razes are
low a[ 513..i per 1,000 cubfc feet;
and combmed monchtr �vater and
sew•er rates are affordab(e ac abouc
538.�.
The capical impro��ement plan
(CIP) Is manageable ac �107 million
chrough 2009. Pro7ecn �sill be
funded by 529 million of debc with
�78 mdfion funded internallv.
OUTLOOK
The outlook �s revised co stable
from positive. The outlook revisfon
reflec[s Scandard & Poor's
expeccation that connnued stxong
finanaa( performance and low debt
levels wdf be mamtained whde the
sysrem's management progresses
coward regionalizacion.
Legai Pravisions
Legal provisions are strong,
parncularly in prorecnng bond
holders from di(ution by subsequent
debt �ssuance. The bonds are secured
by a fisst 1�en pledge of net revenues
of the ary's water syscem. The
addi[ional bonds rest requires a high
1.Sx coverage of pro�ected
max�mum annual debt sezv�ce by net
revenues over the past cw•o years
w¢h certam adjustments permitred
m ca(culatmg net revenues. The debt
servse reserve wdl be funded up
Eront wtth bond proceeds and is
equal ro maximum annual debt
service.
Service Area Economy
SPRWS provides wacer to the
- ry, a� well as the nearoy
communaies of Falwn Heights,
Lauderdale, and Maplewood.
SPRWS also has retail contracts to
suppfy water to the anes of
i�Iendota Heights; i�lendota, Minn.;
and West St. Paul water systems.
SPRWS aLso secves Liale Canada,
iV[mn.'s and Roseville, �finn.'s
wholesale contraas, which expire m
2007 and 2004, respecnvely.
Rosevdle, in mm, reselts water to
Arden Hills, Minn. In all, the service
area, induding wholesale and retail
cuscomers, includes abouc 400,000
�nhabitants. The suburban
customers accounc for 37% of
annual warer mnsumpcion. The
SPRWS board's scracegy has been
co acquire che spsrems of �ts currenc
membecs under a regSonalizazion
concept. Beginning w�th
Vlaplewood in 1998, SPRWS has
now acquired the syscems of three
caies; and a November 2000
reEerendum in Wesc St. Paul wdl
dererm(ne �f its sysem wdl likewise
be acquired by SPRWS. Exrensions
ro the sysrem ou¢ide St. Paul will
be paid for by the local
mumapaLry, or by developers, and
w�ll be assumed by the system only
after the warranty penod has
exp�red, posc connecuon. Since $t.
Paul's own �nfrastructure is older
and its mams require qwcker
replacement, coupled with [he fact
chat the cay has genera(!y required
acqu�red system's mfrastructure ro
meet SPRWS' mimmum standards,
concerns over system expansion v�a
acquisinon is somewhat mitigated.
St PauPs economy contmues
to benefic from growth m[he Twin
Cines area; and downrown St. Paul
concmues ro be the scene of a
mass�ve redevelopment of its office
space, enrertainment, and tourist
fac�Lnes. Dunng 1999,
metropolitan area �ob growth
contnbuted ro a low 2.2% city
unemployment rate. :1 surge m real
estate demand and strong
absorpnon rares has driven overall
vacanty rates down m 4S in
1999 from 19.0% in 1995 while
vacancies of Cfass A space declined
ro 6.2% in 1999 from 19.0% in
1995; rencs have aiso dedmed by
more than 30%a since 1997. Several
new devefopments or expansions
have recendy occurred, mcludmg:
• Ecolab,
• Minneso[a Mutual Life,
• The St. Paul Cos., and
• The Lawson $ohware Center.
The Lawson Sofnvare Center
and the ongomg Minnesota Mumaf
Life pro�ect represent 3202 million
of new conscruction and 960,000
square feec of new office space; the
two pro7ects will add mote than
1,000 jobs ro the downcown area's
�,�a1
economy. Canseco Financial Services
Corp. is conso(fdaung fts
mecropotitan-area workforce, adding
an additional 600 workers-700
workers. Cin' ofhcials expect the
demand for downcown oEfices to spur
recail growth. Ciry� offiaals are also
working co add housmg, improve
streecscapes, and expand transic
access to encourage workers to live,
and spend d�sposable income, in
downtown Sc PauL St. PauPs latest
developmenc minanves regard the
city's need for housing dose to the
downtown area. Aparcmenc vacancies
were 11 % in 1999, and the cay has
idenafied seveca! bLocks m walking
distance of che central business
distnct that can be redevefoped for
residential use.
The other ma�or focus for
downrown redevelopment is the c�ty's
entertamment and museum facilities.
The city recendy complered
renovat�ons to the Rivercentre
Convention Cenrer and the $99
milhon Saence Museum of
Minnesota. The new Rivercentre
Arena is expeaed to be completed by
the start of [he 2000-2001 National
Hockey League (NHL) season. All
three facd¢�es are adjacen[ ro the
❑ucfeus of St. PauPs educauonal and
entertainment distnct—along wah
che existmg Ordway Music Theater,
[he Minnesota History Center, and
the Chddren's Museum. St. Paul
projects more chan frve milhon
visitors dunng 2000. The suburban
areas served by the ary's water unLry
system have also bene5[ed from the
strong Minneapo(is5[. Paul
metropoli[an area economy of the
I 990s.
Cusromer Profile
The system serves 93,000
pnmarily residennal accounts in St.
Paul and its surrounding
communities. The customer base is
not concentrared since �he 10 leading
customers acmun[ for �ust 8.6% of
mnsumption. Cusmmer account
growth has been modest, mcreasing
by (ess than 1% per year, and is
expected to continue to grow m a
vmilar Eashion over che near cerm.
Page 2
Standard & Poor PUBLIC F[NAYCE
IssuedManagement
St. Paul's managemenc fs strong
and has worked diligently to
mainram finances, as wetl as find
financiaf solu[ions ro spur
developmen�. The wacer unlin�
s}�srem fs an encerpnse of St. Paul
and �s governed by a six-member
board, which mcicdes:
• Three members of the St Pauf
City Council,
• Two independent members
res[ding m the ciry, and
• One member appointed by
Maplewood.
The bozrd expects to add a
seventh member by 2001, also
represennng che suburbs.
�Ianagement connnues ro focus
on providmg quah[y water ac
reasonable prices. As such,
substannal sums have been mvesred
in new creatment faa(ines that are
more auromaced and provide coso-
saving opera[�onal efficiencies.
During the past decade, [he budget
for full-t�me equivalent posmons has
dedined 17% to 280 in fisca( 2000.
Management beheves further
reducnons wdl occur as the system
contmues to implement aucomanon
where pracncaL In addinoa,
managementhasengaged
eonsultanes !o examme ia pract�ces
to further reduce costs.
Operetions
Tlie sysrem operates one wacer
creatment p(ant with a capaciry of
144 mdlion gallons per day (mgd),
wh�ch is we(I be(ow the annual peak
daily flow of 90 mgd. The average
da�ly flow rose sreadiiy to 52 mgd in
1999. The ciry has an avadable
source capaury of 180 mgd and a
total s[orage capacity of 131 mgd.
St. Paul estimates that its available
supply is sufficient ro accommodate
100,000 additional wsromers.
Recent improvements a[ the water
treatment plant have been designed
co prov�de redundancy for parts of
the plant, reducing che tikelihood
chat che plant would ever be
comp(etely off-line due ro equ�pmenc
probiems.
Rates/Collections
Under che sysrem's race
strucmre, sLght(y higher rares are
charged during che summer season;
and sps[em customers outvde St.
Paul n•p�cally pay 20% above ary
residents per unit of consumption.
This percenc, however, gradually
dedmes for cuscomers in
municipalities where the wa[er
ryscem has ownership.
Furthermore, the demand charge
based on me[er size has recently
becn elimina[ed. The board's track
record oE sfightly increasing rates
on a regular basis is good,
indudmg 2.9% m 1999 ro$13.5
per 1,000 cubic feet; and the board
wif( ra�se rates by an esximaced
2.1% in f�scal 2000. Retail rates, at
�169 per year for 1,000 cubic feet
(or 7,500 galfons) per mon[h
consumption, are favorabte when
compared to other medium-s¢ed
metropolitan systems.
Finances/Capital Impravement Plan
Sc. Paul's wacer syscem
operares under a rolling 10-year
CIP, which �dennfies capital needs
chroughoutthesyscem and
esnmates the timmg, cost, and
funding of pro�ects. The 1999-
2009 CIP indicates that capital
needs will remain manageable and
will be largely funded with
rewrcing opecanng revenues. The
CIP's mam focus wd( be to �mprove
che qual�ry of water. The $107
million CIP mcludes $78 mil(ion of
recurrmg funds and S29 milLon in
debt m be issued in three-year
mcrements. The bfmnesota stare
revolving fund may be used for
projects chat qualify for such low-
cost funding. Ma7or capital items
anticipated for the.nex[ five years
include:
• Geographic Information
Systems (GIS) conversion,
• Improvements co sfudge fields
and condmts, and
• Projec¢ related m the
consohdation of the
distrfbunon and busmess
divis�ons.
oo-aa�
Page 3
.. .�a u
Springsted, Inc.
. . �
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MOODY'S ASSIGNS AA2 RgT=NG TO SAINT PAUL, 7�7 $8�035,000 WATER REVgp7Ug EpNDS,
SERIES 2000C _
$16.195 MILL20N DEET 9FFECTED
St. Paul (City of) ZR77
Water/Sewer
Mi,nnesota
Moody's Rating
Issue
- Rating
Water Revenue Bonds, Series 2000C Aa2
Sale Aiaount $8,035,000
Expected Sale Date 04/OS/00
Rating Description Water Revenue Bonds
NEW YORK, March 30, 2000 -- Moody+$ �S a,ggigaed a Aa2 rating H,nd stable
outlook to the City o£ St. Paul, M�7 Water Revenue Boads,:Series 2000C. The
bonds, which are secured by the net revenues of the city+s water utility, will
provide financing for varioua improvements iacluding added admi.niatrative
space at the expanded treatment plant. The Aa.2 rating is baeed on the water
system�s strong financial operations, stable service area, and mana.geable, ten
year capital program.
Moody•s expects continuation oP souad system financea and favorable debt
service coverage. Steady rate increaees have consiatently produced more than
two and a ha1P times annual debt service coverage oP both water revenue bonds
and Public Facitilites Authority <PFA) general obligation aad revenue loans.
Peak debt service coverage on all outstanding obligations and the currently
offered issue is 2,31 times based on actual 1998 net system revenues;
preliminary 1999 net revenues would result in coverage of 3.0 times peak. The
utility•s strategic plan targets annual rate increases at levels below
intlation. A rate increase, though, may not be needed Por the year 2001
because the combination of coat controls and a reduction in the number of
employees have resulted in operational savings. The utility has recently
acquired, since January 1998, the water utility syatems of three suburban
retail customers: Maplewood, Falcon Heights and Lauderdale. The agreement for
these acquisitions includea a five year plan to reduce their rates to the city
of St. Paul's level - about a 20% reduction. Cost controls have allowed the
utility to absorb the revenue reduction and keep rate increases below the
level of inflation. The utility is seeking to diversify its revenue stream to
compensate £or its limited growth potential; currently about 13% of the
revenues are not related to the saZe of water.
The system service area is stable. The St. Paul Regional Water Services serves
slmost 400,00o people living in the City oP St. Paul and eight suburban
communities as well as portions of four additional suburbs. Account levels
have trended slowly upward over the last five years, but potential is limited;
estimates are that there is room for another 500 homes in the two suburbs
served which are not fully developed. St. Paul, the state•s capital and second
largest city, is a mature city with an economic base which includes sizable
government, higher education and medical aervices sectors. As with other
older, urban cities, St. Paul had shown signs of eeonomic stress in recent
years; these are being addressed by the city's successful revitalization
efforts.
The system�s capital pragram is manageable with existing resources and
borrowing capacity. The ten year capital plan totals $102.3 million dollars;
$7s.� million will be funded from rates-derived monies on hand and �he balance
from revenue bonds. After this sale another $8 million in water rey_enue bonds
is expected to be sold in 2003 and 2006. The current issue provide� $3,g
million in funding Por the non-process portion of the treatment plant upgrade;
the balance of the bond proceeds will finance a variety of projects which
include two new pumps, a new tank and new screens at river intakea.
Approximately $2 million for one small project relating to the plant upgrade
will remain and is expected to be addressed in 2003.
KEY STATISTICS:
Number of retail accounts: 93,477
Operating ratio (1999 prelim): 70.9%
Debt service coverage (rev, obligations only, 1999 prelim): 3.o x
Debt service coverage (rev, and G.o, obligationa, 1999 prelim): 2.76x
Peak debt service.coverage: 3.0 x
Debt ratio (projected incl. new iasue): 6.1R
Payout of principal, all obligations C10 years): 56.S:L
ANALYSTS:
, Public Finance Group, Moody's Investors Service
CONTACTS:
Journalists: <212) 553-0376
Research Clients: (212) 553-1625
Counci{ F+le # (.10 � .� O� 1
GreenSheet# tOl�
RESOLUTION
OF SAINT PAUL, MINNESOTA
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Presented By
Referred To
Committee
ACCEPTING PROPOSAL ON SALE OF
$8,035,000 WATER REVEN[7E
BONDS, SERIES 2000C, AND PROVIDING FOR
THEIR ISSUANCE
WHEREAS, the Director, Office of Financial Services,
has presented proposals received fbr the sale of $8,035,000 Water
Revenue Bonds, Series 2000C (the "Bonds�� or "2000 Bonds"), of trie
City of Saint Paul, Minnesota (the "City"); and
WHEREAS, the proposals set forth on Schedule A aCtached
hereto were received pursuant to the Terms of Proposal at the
offices of Springsted Incorporated at 10:30 A.M., Central Time,
this same day; and
WHEREAS, the Director, Office of Financial Services,
has advised this Council that the proposal of Robert W. Baird &
Co. was found to be the most advantageous and has recommended
that said proposal be accepted; and
WHEREAS, there are currently outstanding bonds of the
City payable from Net Revenues of the City�s Water Utility,
speci£ically the City's (a) $11,175,000 Water Revenue Bonds,
Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
adopted by this Council on June 15, 1993, of which $2,690,000
remain outstanding, and (b) $7,000,000 Water Revenue Refunding
Bonds, Series 1997C (the ��1997 Bonds"), issued pursuant to a
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resolution adopted by this Council on 3une li, 1997, of which
$5,470,000 remain outstanding, and (c) $16,500,000 Water Revenue
Note of 1998 (the ��1998 Note'�), issued pursuant to a resolution
adopted by this Council on October 7, 1998, of which
$15,395,079_49 is outstanding and more is to be drawn; and there
is currently outstanding a general obligation note of the City
payable on a subordinate lien basis from Net Revenues of the
City's Water Utility, specifically the City's $4,269,844 General
Obligation Wastewater Treatment Water Revenue Note of 1996 (the
"1996 Note"), issued pursuant to a resolution adopted by this
Council on May 15, 1996, of which $3,774,192 remains outstanding;
and the 1997 Bonds refunded bonds issued in 1994, all of which
have been retired (the "1994 Bonds"); and
WHEREAS, it is necessary and desirable to provide for
the issuance of the Bonds on a parity of lien with the 1993
Bonds, 1997 Bonds and 1998 Note, to finance the acquisition and
construction of various improvements (the "Project") 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
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. Paritv Bonds. The 1993 Bonds and 1997 Bonds
shall be a first charge and lien upon the Net Revenues
of the Water Utility. No part of such Net Revenues
sha11 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
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
1149735.2 2
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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 insufPicient 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 £or 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
Decemher 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 interest 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.
"(c) The proceeds of such parity lien bonds
shall be used only for the purpose of (1) making
improvements, additions, extensions, renewals or
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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
WHEREAS, for purposes of this resolution paragraphs 18
and 11 of the resolutions authorizing the issuance and sale of
the 1993 Bonds and 1998 Note are substantively identical to said
paragraph 18 relating to the 1997 Bonds; and
WHEREAS, the Board and this Council deem it necessary
and expedient to undertake the Project; and
WHEREAS, herein the City makes various findings
demonstrating the propriety of the issuance of the Bonds on a
parity with the 1993 Bonds, 1997 Bonds and 1998 Note and with a
priority of lien over the 1996 Note; and
WHEREAS, in accordance with advice received from the
Board, this Council finds, detexmines and declares that it is
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 Bonds £rom the proceeds of bonds
payable solely from the Net Revenues of the Water Utility; and
WHEREAS, the City has heretofore issued registered
obligations in certificated form, and incurs substantial costs
associated with their printing and issuance, and substantial
continuing transaction costs relating to their payment, transfer
and exchange; and
WAEREAS, the City has determined that significant
savings in transaction costs will result from issuing bonds in
"global book-entry form", by which bonds are issued in
certificated form in large denominations, registered on the books
of the City in the name of a depository or its nominee, and held
in safekeeping and immobilized by such depository, and such
depository as part of trie computerized national securities
clearance and settlement sy5tem (the "National System") registers
transfers of ownership interests in the bonds by making
computerized book entries on its own books and distributes
payments on the bonds to its Participants shown on its books as
the owners o£ such interests; and such Participants and other
banks, brokers and dealers participating in the National System
will do likewise (not as agents of the City) if not the
beneficial owners of the bonds; and
WHEREAS, "Participants" means those financial
institutions for whom the Depository effects book-entry transfers
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and pledges of securities deposited and immobilized with the
Depository; and
WHEREAS, The Depository Trust Company, a limited
purpose trust company organized under the laws of the State of
New York, or any of its successors or successors to its functions
hereunder (the "Depositoxy"), will act as such depository with
respect to the Bonds except as set forth below, and the City has
heretofore delivered a letter of representations (the "Letter of
Representations") setting forth various matters relating to the
Depository and its role with respect to the Bonds; and
WHEREAS, the City will deliver the Bonds in the form of
one certificate per maturity, each representing the entire
principal amount of the Bonds due on a particular maturity
(each a"Global Certificate"), which single certificate per
maturity may be transferred on the City's bond register as
required by the Uniforni Commercial Code, but not exchanged
smaller denominations unless the City determines to issue
Replacement Bonds as provided below; and
date
for
WHEREAS, the City will be able to replace the
Depository or under certain circumstances to abandon the "global
book-entry form" by permitting the Global Certificates to be
exchanged for smaller denominations typical of ordinary bonds
registered on the City's bond register; and "Replacement Bonds"
means the certificates represenCing the Bonds so authenticated
and delivered by the Bond Registrar pursuant to paragraphs 6 and
12 hereof: and
WHEREAS, "HOlder'� as used herein means the person in
whose name a Bond is registered on the registration books of the
City maintained by the registrar appointed as provided in
paragraph 8 (the "Bond Registrar"); and
WHEREAS, pursuant to Minnesota Statutes, Section
475.60, Subdivision 2(9), public sale requirements do not apply
to the Bonds, because the City has retained an independent
financial advisor and this Council has determined to sell the
Bonds by private negotiation, and the City has instead authorized
a competitive sale without publication of notice thereof as a
form of private negotiation; and
WHEREAS, Rule 15c2-12 of the Securities and Exchange
Commission prohibits ��participating underwriters�' from purchasing
or selling the Bonds unless the City undertakes to provide
certain continuing disclosure with respect to the Bonds; and
WHEREAS, proposals for the Bonds have been solicited by
Springsted Incorporated pursuant to an Official Statement and
Terms of Proposal therein:
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NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Saint Paul, Minnesota, as follows:
l. Acceptance of Proposal. The proposal of Robert W.
Baird & Co. (the ��Purchaser��) to purchase $8,035,000 Water
Revenue Bonds, Series 2000C, of the City (the "BOnds�� or ��2000
Bonds", or individually a"Bond�� or '�2000 Bond"), in accordance
with the Terms of Proposal for the bond sale, at the rates of
interest hereinafter set forth, and to pay for the Bonds the sum
of $7,942,459.00, plus interest accrued to settlement, is hereby
found, determined and declared to be the most favorable proposal
received and is hereby accepted, and the Bonds are hereby awarded
to the Purchaser. The Director, Office of Financial Services, or
his designee, is directed to retain the deposit of the Purchaser
and to forthwith return to the others making proposals their good
faith checks or drafts.
2. Title: Original Issue Date• Denominations•
Maturities. The Bonds shall be titled ��Water Revenue Bonds,
Series 2000C", shall be dated May 1, 2000, as the date of
original issue and shall be issued forthwith on or after such
date as fully registered bonds. The Bonds shall be numbered from
R-1 upward. Global Certificates shall each be in the
denomination of the entire principal amount maturing on a single
date. Replacement Bonds, if issued as provided in paragraph 6,
shall be in the denomination of $5,000 each or in any integral
multiple thereof of a single maturity. The Bonds shall mature on
December 1 in the years and amounts as follows:
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Amount
$135,000
150,000
175,000
125,000
250,000
275,000
225,000
375,000
400,000
300,000
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Amount
$325,000
400,000
425,000
475,000
550,000
550,000
600,000
675,000
725,000
900,000
3. Purpose. The Bonds shall provide funds for the
acquisition and construction of the Project. The proceeds of the
Bonds shall be deposited and used as provided in paragraph 17.
The total Cost of the Project, which shall include all costs
enumerated in Minnesota Statutes, Section 475.65, including legal
and other professional charges, publication and printing costs,
interest accruing on money borrowed for Che Project before the
collection of Net Revenues pledged and appropriated therefor, and
all other Costs necessarily incurred and to be incurred from the
inception to the completion of the Project, is estimated to be at
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least equal to the amount of the Bonds. The City covenants that
it shall do all things and perform all acts required of it to
assure that work on the Project proceeds with due diligence to
completion and that any and all permits and studies required
under law for the Project are obtained.
4. Interest. The Bonds shall bear interest payable
semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing December l, 2000, calculated
on the basis of a 360-day year of twelve 30-day months, at the
respective rates per annum set forth opposite the maturity years
as follows:
Maturity Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Interest Rate
4.30$
4.40
4.60
4.70
4.75
4.80
4.85
4.90
4.95
5.00
Maturity Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Interest Rate
5.00°s
5.05
5.10
5.20
5.25
5.25
5.30
5.40
5.45
5.50
5. Description of the Global Certificates and
Global Book-Entry S�stem. Upon their original issuance the Bonds
will be issued in the form of a single Global Certificate for
each maturity, deposited with the Depository by the Purchaser and
immobilized as provided in paragraph 6. No beneficial owners of
interests in the Bonds will receive certificates representing
their respective interests in the Bonds except as provided in
paragraph 6. Except as so provided, during the term of the
Bonds, beneficial ownership (and subsequent transfers of
beneficial ownership) of interests in the Global Certificates
will be reflected by book entries made on the records of the
Depository and its Participants and other banks, brokers, and
dealers participating in the National System. The Depository's
book entries of beneficial ownership interests are authorized to
be in increments of $5,000 of principal of the Bonds, but not
smaller increments, despite the larger authorized denominations
of the Global Certificates. Payment of principal of, premium, if
any, and interest on the Global Certificates will be made to the
Bond Registrar as paying agent, and in turn by the Bond Registrar
to the Depository or its nominee as registered owner of the
Global Certificates, and the Depository according to the laws and
rules governing it will receive and forward payments on behalf of
the bene£icial owners of the Global Certificates.
Payment of principal of, premium, if any, and interest
on a Global Certificate may in the City's discretion be made by
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such other method of transferring funds as may be requested by
the Holder o£ a Global Certificate.
6. Immobilization of Global Certificates bv the
De�ositorv; Successor DenositoLy; Replacement Bonds. Pursuant to
the request of the Purchaser to the Depository, which request is
required by the Ternts of Proposal, immediately upon the original
delivery of the Bonds the Purchaser will deposit the Global
Certificates representing all of the Bonds with the Depository.
The Global Certificates shall be in typewritten form or otherwise
as acceptable to the Depository, shall be registered in the name
of the Depository or its nominee and shall be held immcbili�ed
from circulation at the offices of the Depository on behalf of
the Purchaser and subsequent bondowners. The Depository or its
nominee will be the sole holder of record of the Global
Certificates and no investor or other party purchasing, selling
or otherwise transferring ownership of interests in any Bond is
to receive, hold or deliver any bond certificates so long as the
Depository holds the Global Certificates immobilized from
circulation, except as provided below in this paragraph and in
paragraph 12.
Certificates evidencing the Bonds may not after their
original delivery be transferred or exchanged except:
(i) Upon registration of transfer of ownership of a
Global Certificate, as provided in paragraph 12,
(ii) To any successor of the Depository (or its
nominee) or any substitute depository (a "substitute
depository") designated pursuant to clause (iii) of this
subparagraph, provided that any successor of the Depository
or any substitute depository must be both a"clearing
corporation" as defined in the Minnesota Uniform Commercial
Code at Minnesota Statutes, Section 336.8-102, and a
qualified and registered "clearing agency" as provided in
Section 17A of the Securities Exchange Act of 1934, as
amended,
(iii) To a substitute depository designated by and
acceptable to the City upon (a) the determination by the
Depository that the Bonds shall no longer be eligible for
its depository services or (b) a determination by the City
that the Depository is no longer able to carry out its
functions, provided that any substitute depository must be
qualified to act as such, as provided in clause (ii) of this
subparagraph, or
(iv) To those persons to whom transfer is requested
in written transfer instructions in the event that:
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1 (a) the Depository shall resign or discontinue
2 its services for the Bonds and the City is unable to
3 locate a substitute depository within two (2) months
4 following the resignation or detexznination of
5 non-eligibility, or
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(b) upon a detennination by the City in its sole
discretion (1) that the continuation of the book-entry
system described herein, which precludes the issuance
of certificates (other than Global Certificates) to any
Holder other than the Depository (or its nominee),
might adversely affect the interest of the beneficial
owners of the Bonds, or (2) that it is in the best
interest of the beneficial owners of the Bonds that
they be able to obtain certificated bonds,
in either of which events the City shall notify Holders of
its determination and of the availability of certificates
(the "Replacement Bonds") to Holders requesting the same and
the registration, transfer and exchange of such Bonds will
be conducted as provided in paragraphs 9B and 12 hereof.
In the event of a succession of the Depository as may
be authorized by this paragraph, the Bond Registrar upon
presentation of Global Certificates shall register their transfer
to the substitute or successor depository, and the substitute or
successor depository shall be treated as the Depository for all
purposes and functions under this resolution. The Letter of
Representations shall not apply to a substitute or successor
depository unless the City and the substitute or successor
depository so agree, and a similar agreement may be entered into.
Redemption.
(a) Ootional Redemption; Due Date. All Bonds maturing
after December 1, 2009, shall be subject to redemption and
prepayment at the option of the City on such date and on any day
thereafter at a price of par plus accrued interest. Redemption
may be in whole or in part of the Bonds subject to prepayment.
If redemption is in part, those Bonds remaining unpaid may be
prepaid in such order of maturity and in such amount per maturity
as the City shall determine; and if only part of the Bonds having
a common maturity date are called for prepayment, the Global
Certificates may be prepaid in $5,000 increments of principal
and, if applicable, the specific Replacement Bonds to be prepaid
shall be chosen by 1ot by the Bond Registrar. Bonds or portions
thereof called for redemption shall be due and payable on the
redemption date, and interest thereon shall cease to accrue from
and after the redemption date.
(b) Notation on Global Certificate. Upon a reduction in
the aggregate principal amount of a Global Certificate, the
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Holder may make a notation of such redemption on the panel
provided on the Global Certificate stating the amount so
redeemed, or may return the Global Certificate to the Bond
Registrar in exchange for a new Global Certificate authenticated
by the Bond Registrar, in proper principal amount_ Such
notation, if made by the Holder, shall be for reference only, and
may not be relied upon by any other person as being in any way
determinative o£ the principal amount of such Global Certificate
outstanding, unless the Bond Registrar has signed the appropriate
column of the panel.
(c) Selection of Replacement Bonds. To effect a partial
redemption oP Replacement Bonds having a common maturity date,
the Bond Registrar prior to giving notice of redemption shall
assign to each Replacement Bond having a common maturity date a
distinctive number for each $5,000 of the principal amount of
such Replacement Bond. The Bond Registrar shall then select by
lot, using such method of selection as it shall deem proper in
its discretion, from the numbers so assigned to such Replacement
Bonds, as many numbers as, at $5,000 for each number, shall equal
the principal amount of such Replacement Bonds to be redeemed.
The Replacement Bonds to be redeemed shall be the Replacement
Bonds to which were assigned numbers 5o selected; provided,
however, that only so much of the principal amount of each such
Replacement Bond of a denomination of more than $5,000 shall be
redeemed as shall equal $5,000 for each number assigned to it and
so selected.
(d) Partial Redemption of Re�lacement Bonds. If a
Replacement Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the City or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the City and Bond Registrar duly executed by the
Aolder thereof or his, her or its attorney duly authorized in
writing) and the City shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Replacement Bond, without service charge, a new Replacement Bond
or Bonds pf the same series having the same stated maturity and
interest rate and of any authorized denomination or
denominations, as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the Bond so surrendered.
(e) Rec�uest for Redemotion. The Bond Registrar shall call
Bonds for redemption and payment as herein provided upon receipt
by the Bond Registrar at least forty-five (45) days prior to the
redemption date of a request of the City, in written form if the
Bond Registrar is other than a City officer. Such request shall
specify the principal amount of Bonds to be called for redemption
and the redemption date.
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(f) Notice_ Mailed notice of redemption shall be given to
the paying agent (if other than a City officer) and to each
affected Holder. If and when the City shall call any of the
Bond5 for redemption and payment prior to the stated maturity
thereof, the Bond Registrar shall give written notice in the name
of the City of its intention to redeem and pay such Bonds at the
office of the Bond Registrar. Notice of redemption shall be
given b� first class mai1, postage prepaid, mailed not less than
thirty (30) days prior to the redemption date, to each Fiolder of
Bonds to be redeemed, at the address appearing in the Bond
Register. All notices of redemption shall state:
(i)
(ii)
The redemption date;
`Phe redemption price;
(iii} If less than all outstanding Bonds are to be
redeemed, the identification (and, in the case of partial
redemption, the respective principal amountsl of the Bonds
to be redeemed;
(iv) That on the redemption date, the redemption price
will become due and payable upon each such Bond, and that
interest thereon shall cease to accrue from and after said
date; and
(v) The place where such Bonds are to be surrendered
for payment of the redemption price (which shall be the
office of the Bond Registrar).
(g) Notice to De�ositorv. Notices to The Depository Trust
Company or its nominee shall contain the CUSIP numbers of the
Bonds. Tf there are any Holders of the Bonds other than the
Depository or its nominee, the Bond Registrar shall use its best
efforts to deliver any such notice to the Depository on the
business day next preceding the date of mailing of such notice to
all other Holders.
8. Bond RecTistrar. U.S. Bank Trust National
Association in Saint Paul, Minnesota, is appointed to act as bond
registrar and transfer agent with respect to the Bonds (the "Bond
Registrar"), and shall do so unless and until a successor Bond
Registrar is duly appointed, all pursuant to any contract the
City and Bond Registrar shall execute whiCh is consistent
herewith. A successor Bond Registrar shall be an officer of the
City or a bank or trust company eligible for designation as bond
registrar pursuant to Minnesota Statutes, Chapter 475, and may be
appointed pursuant to any contract the City and such successor
Bond Registrar shall execute which is consistent herewith. The
Bond Registrar shall also serve as paying agent unless and until
a successor paying agent is duly appointed. Principal and
interest on the Bonds shall be paid to the Holders (or record
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holders) of the Bonds in the manner set forth in the fonns of
Bond and paragraph 14 of this resolution.
9. Forms of Bond. The Bonds shall be in the form of
Global Certificates unless and until Replacement Bonds are made
available as provided in paragraph 6. Each form of bond may
contain such additional or different terms and provisions as to
the form of payment, record date, notices and other matters as
are consistent with the Letter of Representations and approved by
the City Attorney.
A. Global Certificates. The Global Certificates,
together with the Certificate of Registration, the Register of
Partial Payments, the form of Assignment and the registration
information thereon, shall be in substantially the following form
and may be typewritten rather than printed:
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1 UNITED STATES OF AMERICA
2 STATE OF MINNESOTA
3 RAMSEY COUNTY
4 CITY OF SAINT PAUL
5 R-
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WATER REVENUE
BOND, SERIES 2000C
INTEREST
RATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
MA`PURITY
DATE
December 1,
CUSIP
DOLLARS
KNOW ALL PERSONS BY THESE PRESEI�'PS that the City of
Saint Paul, Ramsey County, Minnesota (the "ISSUer�� or ��City"),
certifies that it is indebted and for value received promises to
pay to the registered owner specified above or on the certificate
of registration below, or registered assigns, solely from the
source and in the manner hereinafter set forth, the principal
amount specified above, on the maturity date specified above,
unless called for earlier redemption, and to pay interest thereon
semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing December 1, 2000, at the
rate per annum specified above (calculated on the basis of a
360-day year of twelve 30-day months) until the principal sum is
paid or has been provided for. This Bond will bear interest from
the most recent Interest Payment Date to which interest has been
paid or, if no interest has been paid, from the date of original
issue hereof. The principal of and premium, if any, on this Bond
are payable in same-day funds by 2:30 p.m., Eastern time, upon
presentation and surrender hereof at the principal office of
in , Minnesota (the
"Bond Registrar"), acting as paying agent, or any successor
paying agent duly appointed by the Issuer; provided, however,
that upon a partial redemption of this Bond which results in the
stated amount hereof being reduced, the Holder may in its
discretion be paid without presentation of this Bond, which
payment shall be received no later than 2:30 p.m., Eastern time,
and may make a notation on the panel provided herein of such
redemption, stating the amount so redeemed, or may return the
Bond to the $ond Registrar in exchange for a new Bond in the
proper principal amount. Such notation, if made by the Holder,
shall be for reference only, and may not be relied upon by any
other person as being in any way detenninative of the principal
amount of this Bond outstanding, unless the Bond Registrar has
signed the appropriate column of the panel. Interest on this
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DATE OF
ORIGINAL ISSUE
May 1, 2000
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Bond will be paid on each Interest Payment Date in same-day funds
by 2:30 p.m., Eastern time, to the person in whose name this Bond
is registered (the ��Holder�� or "BOndholder") on the registration
books of the Issuer maintained by the Bond Registrar and at the
address appearing thereon at the close of business on the
fifteenth day of the calendar month next preceding such Interest
Payment Date (the "Regular Record Date"). Interest payments
shall be received by the Aolder no later than 2:30 p.m., Eastern
time; and principal and premium payments shall be received by the
xolder no later than 2:30 p.m_, Eastern time, if the Bond is
surrendered for payment enough in advance to permit payment to be
made by such time. Any interest not so timely paid shall cease
to be payable to the person who is the Holder hereof as of the
Regular Record Date, and shall be payable to the person who is
the Holder hereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money
becomes available for payment of the defaulted interest. Notice
of the Special Record Date shall be given to Bondholders not less
than ten days prior to the Special Record Date. The principal of
and premium, if any, and interest on this Bond are payable in
lawful money of the i3nited States of America.
Date of Payment Not Business Dav. If the date for
payment of the principal of, premium, if any, or interest on this
Hond shall be a Saturday, Sunday, legal holiday or a day on which
banking institutions in the City of New York, New York, or the
city where the principal office of the Bond Registrar is located
are authorized by law or executive order to close, then the date
for such payment shall be the next sucCeeding day which is not a
Saturday, Sunday, legal holiday or a day on which such banking
institutions are authorized to close, and payment on such date
shall have the same force and effect as if made on the nominal
date of payment.
Redemotion. All Bonds of this issue (the '�BOnds")
maturing after December 1, 2009, are subject to redemption and
prepayment at the option of the Issuer on such date and on any
day thereafter at a price of par plus accrued interest.
Redemption may be in whole or in part of the Bonds subject to
prepayment. If redemption is in part, those Bonds remaining
unpaid may be prepaid in such order of maturity and in such
amount per maturity as the City shall determine; and if only part
of the Bonds having a common maturity date are called for
prepayment, this Bond may be prepaid in $5,000 increments of
principal. Bonds or portions thereof called for redemption shall
be due and payable on the redemption date, and interest thereon
shall cease to accrue from and after the redemption date.
Notice of Redemption. Mailed notice of redemption
shall be given to the paying agent (if other than a City officer)
and to each affected Holder of the Bonds. In the event any of
the Bonds are called for redemption,_written notice thereof wi11
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be given by first class mail mailed not less than thirty (30)
days prior to the redemption date to each Holder of Bonds to be
redeemed_ In connection with any such notice, the ��CUSIP"
numbers assigned to the Bonds shall be used.
Replacement or Notation of Bonds after Partial
Redemption. Upon a partial redemption of this Bond which results
in the stated amount hereof being reduced, the xolder may in its
discretion make a notation on the panel provided herein of such
redemption, stating the amount so redeemed. Such notation, if
made by the Holder, shall be for reference only, and may not be
relied upon by any other person as being in any way detenninative
of the principal amount of the Bond outstanding, unless the Bond
Registrar has signed the appropriate column of the panel.
Otherwise, the Holder may surrender this Bond to the Bond
Registrar (with, if the Issuer or Bond Registrar so requires, a
written instrument of transfer in form satisfactory to the Issuer
and Bond Registrar duly executed by the Holder thereof or his,
her or its attorney duly authorized in writing) and the Issuer
shall execute (if necessary) and the Bond Registrar shall
authenticate and deliver to the Holder of such Bond, without
service charge, a new Bond of the same series having the same
stated maturity and interest rate and of the authorized
denomination in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
Issuance: Pur�ose; Soecial Obligation. This Bond is
one of an issue in the total principal amount of $8,035,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate, denomination and redemption privilege,
which Bond has been issued pursuant to and in fu11 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 April 5, 2000 (the "Resolu-
tion"), for the purpose of providing, together with certain other
moneys of the Issuer, funds to finance the acquisition and
construction of various improvements to the Water Utility of the
Tssuer. The Bonds 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 within the meaning of any constitutional, Charter
or statutory limitation of indebtedness. In the event of any
default hereunder, the Holder of this Bond 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,
Water Revenue Refunding Bonds, Series 1997C, issued in the
principal amount of $7,000,000, and Water Revenue Note of 1998,
issued in the principal amount of $16,500,000, are a first and
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prior lien upon the Net Revenues of the Water Utility of the
Tssuer, except that the Issuer is authorized under certain
conditions to issue additional revenue obligations on a parity of
lien with these Bonds, all as provided in the Resolution_
Action by Iiolders_ The Holders of twenty percent (200)
or more in aggregate principal amount of Bonds at any time
outstanding may, either at law or in equity, by suit, action, or
other proceedings, protect and enforce the rights of all Holders
of Bonds then outstanding, or enforce and compel the performance
of any and all of the covenants and duties specified in the
Resolution to be performed by the Issuer or the Board of Water
Commissioners or their officers and agents; provided, however,
that nothing shall affect or impair the right of any Bondholder
to enforce the payment of the principal of and interest on any
Bond at and after the maturity thereof, or the obligation of the
Issuer to pay the principal of and interest on each of the Bonds
issued to the respective Holders thereof at the time and place,
from the source and in the manner provided in the Sonds.
Denominations; Exchange; Resolution. The Bonds are
issuable originally only as Global Certificates in the
denomination of the entire principal amount of the issue maturing
on a single date, or, if a portion of said principal is prepaid,
said principal amount less the prepayment. Global Certificates
are not exchangeable for fully registered bonds of smaller
denominations except to evidence a partial prepayment or in
exchange £or Replacement Bonds if then available. Replacement
Bonds, if made available as provided below, are issuable solely
as fu11y registered bonds in the denominations of $5,000 and
integral multiples thereof of a single maturity and are
exchangeable for fully registered Bonds of other authorized
denominations in equal aggregate principal amounts at the
principal office of the Bond Registrar, but only in the manner
and subject to the limitations provided in the Resolution.
Reference is hereby made to the Resolution for a description of
the rights and duties of the Bond Registrar. Copies o£ the
Resolution are on file in the principal office of the Bond
Registrar.
Re�lacement Bonds. Replacement Bonds may be issued by
the Issuer in the event that:
(a) the Depository shall resign or discontinue
its services for the Bonds, and only if the Issuer is
unable to locate a substitute depository within two (2)
months following the resignation or determination of
non-eligibility, or
(b) upon a determination by the Issuer in its
sole discretion (1) that the continuation of the
book-entry system described in the Resolution, which
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precludes the issuance of certificates (other than
Global Certificates) to any Holder other than the
Depository tor its nominee), might adversely aEfect the
interest of the beneficial owners of the Bonds, or (2)
that it is in the best interest of the beneficial
owners of the Bonds that they be able to obtain
certificated bonds.
Transfer. This Bond shall be registered in the name of
the payee on the books of the Issuer by presenting this Bond for
registration to the Eond Registrar, who wi11 endorse his, her or
its name and note the date of registration opposite the name of
the payee in the certificate of registration attached hereto.
Thereafter this Bond may be transferred by delivery with an
assignment duly executed by the Holder or his, her or its legal
representatives, and the Issuer and Bond Registrar may treat the
Holder as the person exclusively entitled to exercise all the
rights and powers of an owner until this Bond is presented with
such assignment for registration of Cransfer, accompanied by
assurance of the nature provided by ].aw that the assignment is
genuine and effective, and until such transfer is registered on
said books and noted hereon by the Bond.Registrar, all subject to
the terms and conditions provided in the Resolution and to
reasonable regulations of the Issuer contained in any agreement
with, or notice to, the Bond Registrar. Transfer of this Bond
may, at the direction and expense of the Issuer, be subject to
certain other restrictions if required to qualify this Bond as
being "in registered form" within the meaning of Section 149(a)
of the federal Internal Revenue Code of 1986, as amended.
Fees upon Transfer or Loss. The Bond Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Bond and any legal or unusual costs regarding
transfers and lost Bonds.
Treatment of Re�stered Owner. The Issuer and Bond
Registrar may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided (except as otherwise provided with
respect to the Record Date) and for all other purposes, whether
or not this Bond shall be overdue, and neither the Issuer nor the
Bond Registrar shall be affected by notice to the contrary.
Authentication. This Bond shall not be valid or become
obligatory for any purpose or be entitled to any security unless
the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Not Oualified Tax-Exemot Obligations. The Bonds have
not been designated by the Issuer as "qualified tax-exempt
obligations" for purposes of Section 265(b)(3) of the federal
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Internal Revenue Code of 1986, as amended. The Bonds do 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 perfonned, precedent to and in the issuance
of this Bond, have been done, have happened and have been
perfonned, in regular and due form, time and manner as required
by 1aw; that this Bond, together with a11 other debts of the
Issuer outstanding on the date of original issue hereof and on
the date of its issuance and delivery to the original purchaser,
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 furnished by its Water
Utility suf£icient in amount to promptly meet the principal and
interest requirements of this issue.
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Bond to be
executed on its behalf by the photocopied facsimile signature of
its Mayor, attested by the photocopied facsimile signature of its
Clerk, and countersigned by the photocopied facsimile signature
of its Director, Office of Financial Services.
1149935.2
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Date of Registration:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution
mentioned within.
Bond Registrar
By
Authorized Signature
Registrable by:
Payable at:
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
riayor
Attest:
City Clerk
Countersigned:
Director, Office of
Financial Services
Water Revenue Bond, Series 2000C, No. R-
1149735.2 19
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CERTIFICATE OF REGISTRATION
The transfer o£ ownership of the principal amount of the attached
Bond 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 BOND REGISTRAR
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REGISTER OF PARTIAL PAYMENTS
The principal amount of the attached Bond has been prepaid on the
dates and in the amounts noted below:
Signature o£ Signature of
Date Amount Bondholder Bond Registrar
If a notation is made on this register, such notation has the
effect stated in the attached Bond. Partial payments do not
require the presentation of the attached Bond to the Bond
Registrar, and a Holder could fail to note the partial payment
here.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this Bond, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UTMA - as custodian for
(Cust) (Minor)
under the Unifonn
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
1149735.2
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ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the attached Bond and does
hereby irrevocably constitute and appoint
attorney to transfer
the Bond on the books kept for the registration thereof, with
fu11 power of substitution in the premises.
Dated:
Notice: The assignor's signature to this
assignment must correspond with the
name as it appears upon the face of
the attaChed Bond in every
particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other �'Eligible Guarantor
Institution�� as defined in 17 CFR 240.17Ad-15(a)(2).
The Bond Registrar
Bond unless the information
below is provided.
Name and Address:
will not effect transfer of this
concerning the transferee requested
(Include information for a11 joint owners if
the Bond is lzeld by joint account.)
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1 B. Replacement Bonds_ If the City has notified
2 Holders that Replacement Bonds have been made available as
3 provided in paragraph 6, then for every Bond thereafter
4 transferred or exchanged (including an exchange to reflect the
5 partial prepayment of a Global Certificate not previously
6 exchanged for Replacement Bonds) the Bond Registrar shall deliver
7 a certificate in the form of the Replacement Bond rather than the
8 Global Certificate, but the Holder of a Global Certificate shall
9 not otherwise be required to exchange the Global Certificate £or
10 one or more Replacement Bonds since the City recognizes that some
11 beneficial owners may prefer the convenience of the Depository's
12 registered ownership of the Bonds even though the entire issue is
13 no longer required to be in global book-entry form. The
14 Replacement Bonds, together with the Bond Registrar's Certificate
15 of Authentication, the form of Assignment and the registration
16 infonnation thereon, shall be in substantially the following
17 form, with paragraphs identical to those of the form of G1oba1
18 Certificate stated by heading or initial text only:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
�
INTEREST
RATE
WATER REVENUE
BOND, SERIES 2000C
MATURITY DATE OF
DATE ORIGINAL ISSUE
May 1, 2000
REGISTERED OWNER:
CUSIP
PRINCIPAL AMOUNT: DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"),
certifies that it is indebted and for value received promises to
pay to the registered owner specified above, or registered
assigns, solely from the source and in the manner hereinafter set
forth, the principal amount specified above, on the maturity date
specified above, unless called for earlier redemption, and to pay
interest thereon semiannually on June 1 and December 1 0� each
year (each, an "Interest Payment Date"), commencing December 1,
2000, at the rate per annum specified above (calculated on the
basis of a 360-day year of twelve 30-day months) until the
principal sum is paid or has been provided for. This Bond wi11
bear interest from the most recent Interest Payment Date to which
interest has been paid or, if no interest has been paid, from the
date of original issue hereof. The principal of and premium, if
any, on this Bond are payable upon presentation and surrender
hereof at the principal office of ,
in , (the "Sond Registrar�'), acting
as paying agent or any successor paying agent duly appointed by
the Issuer. Interest on this Bond will be paid on each Interest
Payment Date by check or draft mailed to the person in whose name
this Bond is registered (the ��Holder�� or ��Bondholder") on the
registration books of the Issuer maintained by the Bond Registrar
and at the address appearing thereon at the close of business on
the fifteenth day of the calendar month next preceding such
Interest Payment Date (the "Regular Record Date"). Any interest
not so timely paid sha11 cease to be payable to the person who is
the Holder hereof as of the Regular Record Date, and shall be
payable to the person who is the Holder hereof at the close of
business on a date (the "Special Record Date") fixed by the Bond
Registrar whenever money becomes available for payment of the
defaulted interest. Notice of the Special Record Date shall be
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given to Sondholders not less than ten days prior to the Special
Record Date_ The principal of and premium, if any, and interest
on this Bond are payable in lawful money of the United States of
America.
REFERENCE IS HEREBY MP.DE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
IT IS HEREBY CERTIFIED AND RECITED
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Bond to be
sealed with its official seal or a facsimile thereof and to be
executed on its behalf by the original or facsimile signature of
its Mayor, attested by the original or facsimile signature of its
Clerk, and countersigned by the original or facsimile signature
of its Director, Office of Financial Services.
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Date of Registration:
BOND REGISTRAR'S
CERTIRICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
Bond Registrar
By
Authorized Signature
(SEAL)
1149735.2
Registrable by:
Payable at: _
CITY OF SAINT PAUL,
RAMSEY COUN'SY, MINNESOTA
Mayor
Attest:
ty
Countersigned:
Director, Office of Financial
Services
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ON REVERSE OF BOND
Date of Payment Not Business Day
Redemption. Al1 Bonds of this issue (the "Bonds��)
maturing after December 1, 2009, are subject to redemption and
prepayment at the option of the Issuer on such date and on any
day thereafter at a price of par plus accrued interest_
Redemption may be in whole or in part of the Bonds subject to
prepayment. If redemption is in part, those Bonds remaining
unpaid may be prepaid in such order of maturity and in such
amount per maturity as the City shall determine; and if only part
of the Bonds having a common maturity date are called for
prepayment, the specific Bonds to be prepaid shall be chosen by
lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the redemption date, and
interest thereon shall cease to accrue from and after the
redemption date.
I3otice of Redemption
Selection o£ Bonds for Redemption. To effect a partial
redemption of Bonds having a common maturity date, the Bond
Registrar shall assign to each Bond having a common maturity date
a distinctive number for each $5,000 of the principal amount of
such Bond. The Bond Registrar shall then select by lot, using
such meChod of selection as it shall deem proper in its
discretion, from the numbers assigned to the Bonds, as many
numbers as, at $5,000 for each number, shall equal the principal
amount of such Bonds to be redeemed. The Bonds to be redeemed
shall be the Bonds to which were assigned numbers so selected;
provided, however, that only so much of the principal amount o£
such Bond of a denomination of more than $5,000 shall be redeemed
as shall equal $5,000 for each number assigned to it and so
selected. If a Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the Issuer or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the Issuer and Bond Registrar duly executed by
the Holder thereof or his, her or its attorney duly authorized in
writing) and the Issuer Shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Bond, without service charge, a new Bond or Bonds of the same
series having the same stated maturity and interest rate and of
any authorized denomination or denominations, as requested by
such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
Issuance; Pur�ose; Special Obliaation
Action by Holders
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Denominations: Exchange; Resolution. The Bonds are
issuable solely as fully registered bonds in the denominations of
$5,000 and integral multiples thereof of a single maturity and
are exchangeable for fully registered Bonds of other authorized
denominations in equal aggregate principal amounts at the
principal of£ice of the Bond Registrar, but only in the manner
and subject to the limitations provided in the Resolution.
Reference is hereby made to the Resolution for a description of
the rights and duties of the Bond Registrar. Copies of the
Resolution are on file in the principal office of the Bond
Registrar.
Transfer. This Bond is transferable by the Holder in
person or by his, her or its attorney duly authorized in writing
at the principal office of the Bond Registrar upon presentation
and surrender hereof to the Bond Registrar, all subject to the
tenns and conditions provided in the Resolution and to reasonable
regulations of the Sssuer contained in any agreement with the
Bond Registrar. Thereupon the Issuer shall execute and the Bond
Registrar shall authenticate and deliver, in exchange Eor this
Bond, one or more new fully, registered Bonds in the name of the
transferee (but not registered in blank or to "bearer'� or similar
designation), of an authorized denomination or denominations, in
aggregaCe principal amount equal to the principal amount of this
Bond, of the same maturity and bearing interest at the same rate.
Fees upon Transfer or Loss.
Treatment of Reqistered Owner
Authentication
Not Oualified Tax-Exempt Obligations
ABBREVIATIONS
1149"]35.2
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ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the within Bond and does hereby irrevocably constitute and
appoint attorney to transfer the Bond on
the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
Notice: The assignor's signature to this
assignment must correspond with the
name as it appears upon the face of
the within Bond in every
particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other "Eligible Guarantor
Institution" as defined in 17 CFR 240.17Ad-15(a)(2).
The Bond Registrar will not effect tran5fer of this
Bond unless the information concerning the transferee requested
below is provided.
Name and Address:
(Include information for all joint owners if
the Bond is held by joint account.)
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10. Execution The Bonds 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
fornls of the Bonds, and be sealed with the seal of the City;
provided, however, that the seal of the City may be a printed or
photocopied £acsimile; and provided further that any of such
signatures may be printed or photocopied facsimiles and the
corporate seal may be omitted on the Bonds as permitted by law.
In the event of disability or resignation or other absence of any
such of£icer, the Bonds may he signed by the manual or facsimile
signature of that officer who may act on behalf of such absent pr
disabled officer. In case any such officer whose signature or
facsimile of whose signature shall appear on the Bonds shall
cease to be such officer before the delivery of the Bonds, such
signature or facsimile shall nevertheless be valid and sufficient
for a11 purposes, the same as if he or she had remained in office
until delivery.
11. Authentication; Date of Registration. No Bond
shall be valid or obligatory for any purpose or be entitled to
any security or benefit under this resolution unless a
Certificate of Authentication on such Bond, substantially in the
form hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certi£icates o£
Authentication on di£ferent Bonds need not be signed by the same
person. The Bond Registrar shall authenticate the signatures of
officers of the City on each Bond by execution of the Certificate
of Authentication on the Bond and by inserting as the date of
registration in the space provided the date on which the Bond is
authenticated. For purposes of delivering the original Global
Certificates to the Purchaser, the Bond Registrar shall insert as
the date of registration the date of original issue, which date
is May 1, 200�. The Certificate of Authentication so executed on
each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
12. Reqistration; Transfer; Exchanqe. The City will
cause to be kept at the principal office of the Bond Registrar a
bond register in which, subject to such reasonable regulations as
the Bond Registrar may prescribe, the Bond Registrar shall
provide for the registration of Bonds and the registration of
transfers of Bonds entitled to be registered or transferred as
herein provided.
A Global Certificate shall be registered in the name of
the payee on the books of the Bond Registrar by presenting the
Global Certificate for registration to the Bond Registrar, who
will endorse his or her name and note the date o£ registration
opposite the name of the payee in the certificate of registration
on the Global Certificate. Thereafter a Global Certificate may
be transferred by delivery with an assignment duly executed by
the Holder or his, her or its legal representative, and the City
1149735.2 3 1
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and Bond Registrar may treat the Holder as the person exclusively
entitled to exercise all the rights and powers of an owner until
a Global Certificate 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 thereon
by the Bond Registrar, all subject to the terms and conditions
provided in this resolution and to reasonable regulations of the
City contained in any agreement with, or notice to, the Bond
Registrar.
Transfer of a Global Certificate may, at the direction
and expense of the City, be subject to other restrictions if
required to qualify the Global Certificates as being "in
registered form" within the meaning of Section 149(a) of the
federal Internal Revenue Code of 1986, as amended.
If a Global Certificate is to be exchanged for one or
more Replacement Bonds, all of the principal amount of the Global
Certificate shall be so exchanged.
Upon surrender for transfer of any Replacement Bond at
the principal office of the Bond Registrar, the City shall
execute (if necessary), and the Bond Registrar shall
authenticate, insert the date of regi5tration (as provided in
paragraph 11) of, and deliver, in the name of the designated
transferee or transferees, one or more new Replacement Bonds of
any authorized denomination or denominations of a like aggregate
principal amount, having the same stated maturity and interest
rate, as requested by the transferor; provided, however, that no
Bond may be registered in blank or in the name of "bearer" or
similar designation.
At the option of the Holder of a Replacement Bond,
Replacement Bonds may be exchanged for Replacement Bonds of any
authorized denomination or denominations of a like aggregate
principal amount and stated maturity, upon surrender of the
Replacement Bonds to be exchanged at the principal office of the
Bond Registrar. Whenever any Replacement Bonds are so
surrendered for exchange, the City shall execute (if necessary),
and the Bond Registrar shall authenticate, insert the date of
registration of, and deliver the Replacement Bonds which the
Holder making the exchange is entitled to receive. Global
Certificates may not be exchanged for Global Certificates of
smaller denominations.
provided
the Bond
City.
All Bonds surrendered upon any exchange or transfer
for in this resolution shall be promptly cancelled by
Registrar and thereafter disposed of as directed by the
1149735.2 3 2
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All Bonds delivered in exchange for or upon transfer of
Bonds shall be valid special obligations of the City evidencing
the same debt, and entitled to the same benefits under this
resolution, as the Bonds surrendered for such exchange or
transfer.
Every Bond presented or surrendered for transfer or
exchange shall be duly endorsed or be accompanied by a written
instrument of transfer, in form satisfactory to the Bond
Registrar, duly executed by the Holder thereof or his, her or its
attorney duly authorized in writing.
The Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in connection with the transfer or exchange of any Bond and any
legal or unusual costs regarding transfers and lost Bonds.
Transfers shall also be subject to reasonable
regulations of the City contained in any agreement with, or
notice to, the Bond Registrar, including regulations which permit
the Bond Registrar to close its transfer books between record
dates and payment dates.
13. Rights Upon Transfer or Exchanae. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
other Bond shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
14. Interest Pavment; Record Date. Interest on any
Global Certificate shall be paid as provided in the first
paragraph thereof, and interest on any Replacement Bond shall be
paid on each Interest Payment Date by check or draft mailed to
the person in whose name the Bond is registered (the �'Holder") on
the registration books of the City maintained by the Bond
Registrar, and in each case at the address appearing thereon at
the close of business on the fifteenth (i5th) day of the calendar
month next preceding such Interest Payment Date ithe "Regular
Record Date��). Any such interest not so timely paid shall cease
to be payable to the person who is the Holder thereof as of the
Regular Record Date, and sha11 be payable to the person who is
the Holder thereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money
becomes available for payment of the defaulted interest. Notice
of the Special Record Date shall be given by the Bond Registrar
to the Holders not less than ten (1�) days prior to the Special
Record Date.
15. Holders; Treatment of Reqistered Owner; Consent of
Holders.
(A) For the purposes of all actions, consents and other
matters affecting Holders of the Bonds, other than payments,
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redemptions, and purchases, the City may (but shall not be
obligated to) treat as the Holder of a Bond the beneficial owner
of the Bond instead of the person in whose name the Bond is
registered. Eor that purpose, the City may ascertain the
identity of the beneficial owner of the Bond by such means as the
Bond Registrar in its sole discretion deems appropriate,
including but not limited to a certificate from the person in
whose name the Bond is registered identifying such beneficial
owner.
(B) The City and Bond Registrar may treat the person in
whose name any Bond is registered as the owner of such Bond for
the purpose of receiving payment of principal of and premium, if
any, and interest (subject to the payment provisions in paragraph
14 above) on, such Bond and for all other purposes whatsoever
whether or not such Bond sha11 be overdue, and neither the City
nor the Bond Registrar 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 Holders may be
in any number of concurrent writings of similar tenor and must be
signed or executed by such Holders 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
ownership of Bonds, if made in the following manner, shall be
sufficient for any of the purposes of this resolution, and sYsall
be conclusive in favor of the City with regard to any action
taken by it under such request or other instrument, namely:
(1) The fact 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
signing such writing acknowledged before him the execution
thereof, or by an affidavit of any witness to such
execution.
(2) Subject to the provisians of subparagraph (A)
above, the fact of the ownership by any person of Bonds and
the amounts and numbers of such Bonds, and the date of the
holding of the same, may be proved by reEerence to the bond
register.
16. Delivery; Application of Proceeds. The Global
Certi£icates when so prepared and executed shall be delivered by
the Director, Office of Financial Services, to the Purchaser upon
receipt of the purchase price, and the Purchaser shall not be
obliged to see to the proper application thereof.
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17. Fund and Accounts. For the convenience and proper
administration oE the proceeds from the sale of the 2000 Bonds
and for the payment of principal of and interest on the 2000
Bonds, the Board of Water Commissioners Water Utility Enterprise
Fund (the "Water Utility Fund", heretofore in resolutions
relating to the 1993 Bonds, 1997 Bonds and 1998 Note also
referred to as the "Water Utility Fund") heretofore created shall
continue in force and effect as a separate fund of the City and
of the Board until all of the 2000 Bonds are fully paid and
retired. In the Water Utility Fund there is hereby created a
2000 Construction Account and in addition there are, and there
shall continue to be, the following accounts:
(a) A"2000 Construction Account", to whiCh shall be
credited all proceeds of the sale of the 2000 Bonds other
than accrued interest and amounts in excess of $7,930,545.
The 20�0 Construction Account shall be used to pay the costs
of the Project, including all costs enumerated in Minnesota
Statutes, Section 475.65. The moneys in the 2000
Construction Account shall be used solely for the purposes
herein set forth and for no other purpose, except that any
surplus in the 2000 Construction Account shall be deposited
in the Revenue Bond Debt Service Account.
(b) An "Ooeration 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 sha11 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, ai.d all
other items which, by sound accounting practices, constitute
nornlal, 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 resexve 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
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
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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 sale proceeds of the 2000 Bonds
representing accrued interest and amounts in excess of
$7,930,545, and further into which there shall be credited
and to which there is hereby irrevocably pledged from the
Net Revenues of the operation of the Water Utility system
monthly commencing in June, 2000, a sum equal to at least
1/12 (in 2000, 1/6 through November as to the 2000 Bonds
only) of the total principal and interest on the 2000 Sonds
and any other bonds issued on a parity therewith during the
ensuing twelve (12) months; provided, however, that no
further payments need be made to said account when the
moneys held therein are sufficient for the payment of all
principal and interest due on said bonds 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 2000 Bonds and any other bonds which are
issued on a parity with the 2000 Bonds.
(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 bonds payable from the
Revenue Bond Debt Service Account; provided, however, that
the moneys in the Reserve Account may be used to prepay said
bonds, when such prepayment will retire all of the bonds
then outstanding. $575,925 from the Water Utility's retained
earnings shall be deposited in the Reserve Account upon the
issuance of the 2000 Bonds, and amounts already in the
Reserve Account pursuant to the resolutions authorizing the
issuance of the 1993 Bonds, 1997 Bonds and 1998 Note shall
be maintained therein upon the issuance of the 2000 Bonds 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,
1998 Note and 2000 Bonds. Whenever the moneys in the
Reserve Account exceed the amount required to be maintained
in the Reserve Account as set Eorth below, such excess may
be transferred to the Revenue Bond Debt Service Account; and
whenever the moneys in the Reserve Account sha11 be less
than said amount, the Reserve Account shall be restored to
said amount from the next available A7et Revenues. The
amount required to be maintained in the Reserve Account
shall be an amount equal to the lesser of: (1) ten percent
(l0a) of the original principal amount of the 2000 Bonds 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
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any year on the bonds payable from the Revenue Bond Debt
Sesvice 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 issued after the 1994
Bonds (as defined in the resolution authorizing trie issuai.ce
of the 1997 Bonds, 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 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
rating(s) 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 Utility 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, 1998 Note and
20�0 Bonds to be paid to the United States in order to
maintain the exclusion from gross income under Section 103
of the Code (as hereinafter defined) of the interest on the
1993 Bonds, 1997 Bonds, 1998 Note and 2000 Bonds_
(i) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
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2000 Bonds shall be maintained and operated as required by
the resolutions authorizing the same.
(j) No portion of the proceeds of the 2000 Bonds 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 2000 Bonds were
issued, (2) as part of a reasonably required reserve or
replacement fund not in excess of ten percent (l00) of the
proceeds of the 2000 Bonds (or in a higher amount which the
City establishes is necessary Co the satisfaction of the
Secretary of the Treasury of the United States), and (3) in
addition to the above in an amount not greater than the
lesser of five percent (5°s) of the proceeds of the 2000
Bonds or $100,000. To this effect, any proceeds of the 2000
Bonds and any sums from time to time held in the 2000
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 bonds 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 taking 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 2000 Bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the federal Internal Revenue
Code of 1986, as amended (the '�Code��).
18. Paritv Bonds. The 1993 Bonds, 1997 Bonds, 1998
Note and 2000 Bonds 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 any 1993 Bonds, 1997 Bonds, 1995 Note or
2000 Bonds or bonds 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 the rates
and charges of the Water Utility sufficient to timely pay such
general obligation bonds. I3o additional revenue obligations
payable from the Revenue Bond Debt Service Account sha11 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
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parity of lien with the 2000 Bonds, 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 ma�cimum 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 other 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 £or 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.
(c) The proceeds of such parity lien bonds shall be
used only for the purpose of (1) making improvements,
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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 19 or 25 as applied in paragraph 20).
19. Refunding Maturing Bonds. The City also reserves
the right and privilege of issuing additional revenue bonds if
and to the extent needed to refund maturing bonds payable from
the moneys in the Water Utility Fund in case the moneys in the
Revenue Bond Debt Service Account are insuEficient 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, 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.
20. Other Revenue Obli�rations. Except as authorized
in paragraphs 18, 19 and 25 hereof, the City covenants and agrees
that it wi11 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 2000 Bonds on said Net Revenues. If bonds which refund the
2000 Bonds are parity lien bonds, they shall enjoy complete
equality of lien with any portion of the 2000 Bonds not refunded
and any other then outstanding bonds payable from the Revenue
Bond Debt Service Account, if any there be, and such refunding
bonds shall continue to have whatever priority of lien over
subsequent issues that the refunded bonds may have had. If only
a portion of the outstanding 2000 Bonds shall be refunded and if
such 20�� Bonds shall be refunded in such manner that the
interest rate of any refunding bond shall be greater than the
interest rate of the corresponding refunded 2000 Bond (or the
average net interest rate of the refunding bonds shall be, or
shall be reasonably esCimated to be, higher than the average net
interest rate of the refunded 2000 Bonds), or that the maturity
date of any refunding bond shall be earlier than the maturity
date of the corresponding refunded 2000 Bond (or the average
maturity of the refunding bonds shall be earlier than the average
maturity of the refunded 2000 Bonds), then such 2000 Bonds may
not be refunded without the consent of the holders of the
unrefunded portion of the 2000 Bonds and any other bonds then
outstanding payable from the Revenue Bond Debt Service Account
unless the Net Revenues coverage test of paragraph 18 is met.
21. Insufficient Amounts. Tn the event that the
moneys in the Revenue Bond Debt Service Account and Reserve
Account shall be insufficient at any particular time to pay the
principal then due and interest then accrued on all bonds payable
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from the 12evenue Bond Debt Service Account, said moneys shall
first be applied to the payment pro rata of the accrued interest
on all such bonds, payable over a period ending on June 1 or
December 1, as appropriate, and any balance sha11 be applied ir
payment pro rata of the principal on all such bonds, provided
further that if it shall ever be determined by a court of
competent jurisdiction while any such bonds 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.
22. Suit by Sondholders. The Holders of twenty
percent (200) or more in aggregate principal amount of bonds
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 of all Holders of the
2000 Bonds then outstanding 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.
23. Covenants. For the protection of the Holders of
the 2000 Bonds, 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 thereof.
(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 Utility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
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principal and interest on the bonds payable from 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 2000 Bonds and all bonds on a parity of
lien with the 2000 Bonds, 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 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 25 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 otlzer non-revenue-producing properties which in
the judgment of the City have become unnecessary,
uneconomical or inexpedient to use in connection with the
Water Utilit� 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.
(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 oE said audit shall be furnished, without cost, to the
Purchaser of the 2000 Bonds. If the City fails to provide
such audit within a reasonable time after the end of said
fiscal year, the holders of twenty percent (20°s) or more of
the outstanding bonds 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 Purchaser of the 2000 Bonds and the Holders
thereof, or their duly appointed representatives, from time
to time shall have the right, at all reasonable times, to
inspect the Water Utility system and to inspect and copy the
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books, records, accounts and data relating thereto. The
City agrees to furnish copies of such audit, without cost,
to any Holder or Aolders of the 2000 Bonds at their request
within a reasonable time after the end of each fiscal year.
(f) It will faithfully and punetually perform all
duties with reference to the Water Utility required by the
City Charter, the Constitution and laws o£ the State of
Minnesota and this resolution.
(g) It will grant no franchise to any competing
utility.
24. Amendments. No change, amendment, modification or
alteration shall be made in the covenants made with Holders of
the 2000 Bonds without the consent of the Holders of not less
than sixty percent (600) in principal amount of such 2000 Bonds
then outstanding except for changes, amendments, modifications
and alterations (a) made to cure any ambiguity or formal defect
or omission, or (b) which would not materially prejudice the
Holders of such outstanding 2000 Bonds; provided, however, that
nothing herein contained shall permit or be construed as
permitting (1) an exCension of the maturity of the principal of
or Che interest on any such 2000 Bonds, or (2) a reduction in the
principal amount of any such 2000 Bond or the rate of interest
thereon, or (3) a privilege or priority of any such 2000 Bond or
2000 Bonds over any other bond or bonds except as otherwise
provided herein, or (4) a reduction in the aggregate principal
amount of such 2000 Bonds 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 such 2000
Bonds, except as hereinbefore expressly permitted, or t6) a
modification of any of the provisions of this paragraph without
the consent of the Holders of one hundred percent (1000) of the
principal amount of such 2000 Bonds outstanding.
25. Discharae. When all 2000 Bonds have been
discharged as provided in this paragraph, all pledges, covenants
and other rights granted by this resolution to the Holders of the
2000 Bonds shall cease. The City may discharge all 2000 Bonds
which are 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 such 2000 Bonds on or before that date a sum sufficient
for the payment thereof in full; or if any 2000 Bond 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 2000
Bonds which are called for redemption on any date when they are
prepayable according to their 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
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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 issue of the 2000 Bonds in whole or in part by
complying with the applicable provisions of Minnesota Statutes,
Section 475.67, and any amendments thereto, except Chat the funds
deposited in escrow in accordance with said provisions may but
need not be in whole or part proceeds of advance refunding bonds.
The City may discharge 2000 Bonds as herein provided without the
consent of any Bondholders.
26. Fiscal Year. As used in this resolution the words
"fiscal year" shall mean the twelve (12) 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 £iscal 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.
27. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Purchaser, and to Che attorneys approving the legality of the
issuance of the Bonds, certified copies of a11 proceedings and
records of the City relating to the Bonds 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 Bonds 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
furnished, shall be deemed representations of the City as to the
facts recited therein.
28. Negative Covenants as to Use of Proceeds and
Improvements. The City hereby covenants not to use the proceeds
o£ the Bonds or to use the Improvements, or to cause or permit
them to be used, or to enter into any deferred payment
arrangements for the cost of the Improvements, in such a manner
as to cause the Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code. The
City reasonably expects that no actions wi11 be taken over the
term of the Sonds that would cause Chem to be private activity
bonds, and the average term of the Bonds is not longer than
reasonably necessary for the governmental purpose of the issue.
The City hereby covenants not to use the proceeds of the Bonds in
such a manner as to cause the Bonds to be "hedge bonds�� within
the meaning of Section 149(g) of the Code.
29. Tax-Exempt Status of the Bonds• 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 Bonds, including
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without limitation requirements relating to
investments, limitations on amounts invested
than the yield on the Bonds, and the rebate
earnings to the United States.
temporary periods for
at a yield greater
of excess investment
If any elections are available now or hereafter with
respect to arbitrage or rebate matters relating to the Bonds, 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 Bonds, and all such elections
shall be, and shall be deemed and treated as, elections of the
City.
30. No Designation of Oualified Tax-Exem�t
Obliaations. The Bonds, together with other obligations issued
by the City in 2000, exceed in amount those which may be
qualified ae "qualified tax-exempt obligations" within the
meaning of Section 265(b)(3) of the Code, and hence are not
designated for such purpose.
31. Letter of Repre5entations. The Letter of
Representations-for the Bonds is hereby confirmed to be the
Blanket Issuer Letter of Representations dated April 10, 1996, by
the City and received and accepted by The Depository Trust
Company. So long as The Depository Trust Company is the
Depository or it or its nominee is the Holder of any Global
Certificate, the City shall comply with the provisions of the
Letter of Representations, as it may be amended or supplemented
by the City from time to time with the agreement or consent of
The Depository Trust Company.
32. Parity Findinqs. It is hereby found, determined
and declared that:
(a1 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, 1997 Bonds and 1998 Note
and the subordinate 1996 Note.
lb) All payments required to be made prior to the date
riereof 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, 1997 Bonds and 1998 Note have been made.
(c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
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the 2000 Bonds have been more than one and one-half (1.5)
times, specifically 3.070 and 3.288 times, respectively, the
maximum annual principal and interest coming due hereafter on
all outstanding revenue obligations payable from and having a
parity of lien upon the Net Revenues, being the 1993 Bonds,
1997 Bonds and 1998 Note, and the 2000 Bonds as the
obligations proposed to be issued, to wit:
Net Revenues 199&
Net Revenues 1999
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and
Interest on the 1998 Note
Maximum Annual Principal and
Interest on the 2000 Bonds
Maximum Annual Principal and
Interest on the 1993 Bonds,
1997 Sonds, 1998 I3ote and
2000 Bonds
(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
$10,478,238
$11,219,964
$ 987,000
$ 8'78,218
$ 1,616,868
$ 949,500
S 3,412,629
$ 5,118,944
This City Council has been furnished with the Certificate 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 L3tility during the term of the 2000 Bonds will be more
than sufficient to provide Net Revenues adequate to pay
principal and interest when due on the 2000 Bonds and on
those other bonds which are now outstanding and to maintain
the Reserves required therefor.
(f) The 2000 Bonds have a December 1 maturity or
maturities and has interest payments on June 1 and December
1, and are in compliance with the other requirements for
parity bonds.
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37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
(g) The proceeds of the 2000 Bonds shall only be used
for the purpose o£ 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 1996 Note and 2000 Bonds.
33. Covenant with Holders 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 Bonds.
34. Negotiated Sale. The City has retained Springsted
Incorporated as an independent financial advisor, and this
Council has heretofore determined, and does hereby determine, to
sell the Bonds by private negotiation to the Purchaser, all as
provided by Minnesota Statutes, Section 475.60, Subdivision 2(9).
35. Continuing Disclosure. The City is an obligated
person with respect to the Bonds. The City hereby agrees, in
accordance with the provisions of Rule 15c2-12 (the "Rule"),
promulgated by the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as
amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described, to:
A. Provide or cause to be provided to each nationally
recognized municipal securities information repository
("NRMSIR") and to the appropriate state information
depository ('�SID"), if any, for the State of Minnesota, in
each case as designated by the Commission in accordance with
the Rule, certain annual financial information and operating
data in accordance with the Undertaking. The City reserves
the right to modify from time to time the terms of the
Undertaking as provided therein.
B. Provide or cause to be provided, in a timely
manner, to (i) each NRMSIR or to the Municipal Securities
Rulemaking Board ("MSRB") and (ii) the SID, notice of the
occurrence of certain material events with respect to the
Bonds in accordance with the i3ndertaking.
C. Provide or cause to be provided, in a timely
manner, to (i) each NRMSIR or to the MSRB and (ii) the SID,
notice of a failure by the City to provide the annual
financial information with respect to the City described in
the Undertaking.
1149735.2
47
oo-�,z,7
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
The City agrees that its covenants pursuant to the Rule
set forth in this paragraph 35 and in the Undertaking are
intended to be for the benefit of the Holders of the Bonds and
shall be enforceable on behalf of such Holders; provided that the
right to enforce the provisions of these covenants shall be
limited to a right to obtain specific enforcement of the City's
obligations under the covenants.
The Mayor and Director, Office of Financial Services,
or any other officers of the City authorized to act in their
stead (the "Officers"), are hereby authorized and directed to
execute on behalf of the City the Undertaking in substantially
the £orn1 presented to the City Council, subject to such
modifications thereof or additions thereto as are (i} consistent
with the requirements under the Rule, (ii) required by the
Purchaser, and (iii) acceptable to the Officers.
36. 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_
37. Aeadinas. 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 6y Oepartment of.
���1G� c�F ���t��tk� Sc��l��
g � �'` �-_—�--`1
Adopted by Council: Date ���� S .�flOa
Adoption Certified by Councit Secretary
By: '�r ���v
Approved by Mayor. D Q
B Y —�� � �--'
Form Ap roved b City Attorney
�r�-- � ,. C"''°-
By: —.
d�_ o a
Appro db MayorforSubmi
e f
48
t - Abs�e�.�-� ovJ
i
!,�_ �/.
.__�^�'?�
OJ1TE N11i111iED
:��.� GREEN SHEET
� U oEr�ue�r c.rcrc. U a�rwu��� _
\GEIJ44 BY (WTE]
K441GN
NUYBERFOR �CrtYAiTa11E! anCtfltlt_
RWTItICs
� ❑ ALIKUL9BIYCF80R i111111C1�L9EM�CC10
❑3 wraR ❑
TOTAL # OF SIGNATURE PAGES 1_ (CL1P ALL LOCATIONS FOR SIGNATURE)
iis resdution accePts the winnirg proposal and awards the bid fw fhe $8,035,000
ater Revenue Bonds. Series 2000C. This is a eomD�e borW sale and tlx award
poing to the bidder fouM most advantagcos (lovrest eost) to the City.
PLANNING COMMISSION
CIB COMMI7TEE
CML SERVICE COMMISSION
IATING PROBLEM ISSUE, OPPORTUNITY (Wlw, What, When, Where, Why)
boMS are for the purpose of finaricing various imprwemenls to the Ulility. aM will be repaid by re�enues of the U[ilily.
be available for impfovements to the UIiIM1y.
evs:.ma.:
Has this Pe�Krm e�er waked unUer a cont'act tor this tlepartment?
VES NO
tias this persa�rm ever been a city employee9
YES NO
Dces th's pe�soNfirtn possess a sldll trot rrormally possessed by any curte�rt cily employee?
YES NO j
Is Mis pereoMrtn a targeted veMOR
YES NO
dain all ves ansvrers on seoarate sheet aM atlach to nreen sheet
�O ��0��
No 101150
needed for certain Utility imqouements will not be available.
AMOUNT OF 7RANSACiION S Se.ms.000
COST/REVENUE BUDGETED (GIRCLE ON�
YES NO
SOURCE
ACTIVITY NUMBER
(EXPWN)
oo-3a7
8i SEVENTH PLACE EAST, SUITE 100
SAIST PA[iL, MN 55101-2R87
// 6i1-223-3000 FAX:657-28-3002
lJ
SPRINGSTED
Publu Finance Advuors
April 5, 2000
/..
Mr. Joe Reid, Director Mr. Bernie Bullert, General Manager
Office of the Financial Services Saint Paul Regional Water Services
City of Saint Paul 8 Fourth Street East, Suite 400
240 City Hall Saint Paul, MN 55101
15 West Kellogg Boulevard
Saint Paul, MN 55102
RE: Recommendations for Award of City of Saint Paul's
$8,035,000 Water Revenue Bonds, Series 2000C
Dear Mr. Reid and Mr. Bullert;
This letter summarizes the results of the competitive bids opened at 10:30 A.M. this morning for
this issue.
Purpose of Issue
The purpose of this Water Revenue issue is to fund various capital improvements of Water
Regional Services. The issue will be repaid solely by net revenues of the water utility.
Tax-Exempt Market Rates
The tax-exempt market has moved downward over the last several weeks.. A major national
index of tax-exempt interest rates (the Bond Buyer's Index — BBI) is currentiy 5.74%.
Sale Results
The City received four bids on the issue. The bids were as follows:
Rank Bidder
Robert Baird
PiperJaffray
Cronin
Dain Rauscher
TIC (%1
5.3683
5.3797
5.4378
5.4772
The lowest or best bid was received from Robert Baird (Milwaukee) at a true interest rate of
5.36%.
SAINT PAUL, MN � MIN�'EAPOLIS, MN - MILWAIIKEE, Wf • OVERLAND PARK, KS • WASHINGTON, DC • DES MOINES, IA
�-3a�
City of Saint Paul, Minnesota
April 5, 2000
Page 2
We require bidders to submit their bids on a"True Interest Rate (TIC) basis, so as to reflect the
present value of their bids and thereby ensure the City award based on the lowest cost to the
City. We have enclosed bid tabulation forms for the issue summarizing the bid specifics and
composition of each underwriting syndicate.
Recommendation
We recommend award of sale to Robert W. Baird for these Water Revenue Bonds.
Basis of Recommendation
We believe the interest rates received by the City today aggressively reflect current market
conditions for this issue. In our financing recommendations for this issue, previously provided,
we estimated a TIC rate of 5.79% for the week of March 21. This result of 5 36% far exceeds
any market movement occurring during the interim.
Credit Rating
We have enclosed the written reports on the Water Regional Services ratings for this issue from
Moody's, and Standard & Poor's. The S&P report announces the upgrading of the rating to
AA+. Moodys reaffirms the rating at Aa2. Both have a stable outlook for the rating. Saint Paul
Water Regional Services should take great pride in its upgrading. We believe that the AA+ is
an exceptional rating for a water utility. Both the City and the Water Board should take
particular pride in this achievement.
We appreciate the opportunity to again be of service to the City and the Water Board on this
very successful issuance program. We welcome any questions regarding this sale process.
Respectfully,
�`�it�-v �� � �� ��4� ✓� �
David N. MacGillivray
Principal
Director of Project Management
,'i113
enclosure
cc: Ms Barb Maynard, Acting Treasurer
o a7
//
RS E. SEVENTH PLACE, SUITE 100
SAINT PAUL, M[Y 55101-2887
65i-Z?3-3000 FAX: 651-2233002
SPRINGSTED
Public Finance Advisors
$8,035,000
CITY OF SAINT PAUL, NIINNESOTA
WATER REVENUE BONDS, SERIES 2000C
(BOOK EN1'RY ONLI�
I:�.\ N�
SALE:
April 5, 2000
Moody's Rating: Aa2
Standard & Poor's Rating: AA+
Interest Net Interest 17ue Interest
Bidder Rates Price Cast Rate
ROBERT W. BAIRD & COMPANY
INCORPORATED
U.S. BANCORP PIPER IAFFRAY INC.
NORWEST INVESTMENT SERVICES, INC.
Edward D. Jones & Company
ROBERT W. BAIItD & COMPANY, INCORPORATED
4.30%
4.40%
4.60 %
4.70 %
4.75 %
4.80 %
4.85 %
4.90%
4.95 %
5.00%
5.05 %
5.10%
5.20 %
5.25%
5.30 %
5.40 %
5.45 %
5.50 %
4.50%
4.60%
4.70 %
4.75 %
4.80%
4.90%
5.00%
5.10%
520%
5.25 %
5.30%
5.35 %
5.40 %
5.50%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009-2010
2011
2012
2013
2014-2015
2016
2017
2018
2019
2000-2002
2003
2004
2005
2006-2007
2008-2009
2010-2011
2012
2013
2014
2015
2016
2017
2018-2019
$7,942,459.00
$7,934,980.20
$5,558,425.17
$5,569,562.51
5.3683 %
5.3797 %
(Continued)
SAINTPAUL,MN , MINNEAPOLIS,MN , MILWAUKEE,WI � OVERLANDPARK,KS , waSHINGTON,DC . DESMOINES,IA
Interest Netlnterest True Interest
Bidder Rates Price Cost Rate
CRONIN & COMPANY, INCORPORATED
SALOMON SMITH BARNEY
MORGAN STANLEY DEAN WITTER
PAINEWEBBERINCORPORATED
CIBC WORLD MARKETS
FIRST UNION CAPITAL MARKETS
CORPORATION
SOUTHWEST SECURITIES, INC.
DAIN RAUSCHERINCORPORATED
Isaak Bond Investments, Inc.
4.50 %
4.60 %
4.70 %
4.75 %
5.00 %
5.10 %
5.20 %
5.25 %
5.35 %
5.40 %
5.50 %
4.75%
4.875%
4.90%
5.00%
5.125 %
S.IS%
525%
5.375%
5.40%
5.50 %
5.60 �
2000-2001
2002
2003
2004
2005-2010
2011
2012
2013
2014-2015
2016-2017
2018-2019
2000-2001
2002-2005
2006-2007
20p8-2010
2011
2012
2013
2014
2015
2016-2018
2019
$7,931,767.35
$7,930.711.00
REOFFERING SCHEDULE OF THE PURCHASER
Rate
4.30 %
4.40 %
4.60 %
4.70%
4.75%
4.80%
4.85 %
4.90 %
4.95 %
5.00 %
5.00 %
5.05 %
5.10 %
5.20 %
5.25 %
5.25 %
5.30 %
5.40 %
5.45 %
5.50 %
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Yield
Par
Par
Par
Par
Par
Paz
Par
Paz
Par
Par
5.05 %
5.t0%
5. LS%
5.25 %
5.30 %
5.35%
5.40%
5.50 %
5.55 %
5.60 %
$5,623,533.69
$5,666,814.52
5.4378%
5.4772%
BBI: 5.74%
Average Maturity: 12.93 Years
Analysts:
Peter V. Musphy, New Yo�k
212-438-2065
UPGRADED
$1.02 mil wtr rev bnds
OUTLOOK REVISED
TO
AA+
TO
Stable
FflOM
AA
FROM
Posit�ve
RATIONALE
James Wiemken, Chuago The ratmg upgrade on St. Paul, Minn.'s water revenue bonds reflects connnued strong financial
312-669-9170 performance and liquidity and maintenance of low debt levels afcer completmg substannal capital
�mprovements from rewrrmg revenues.
Other strengths supporting the ratfng are:
• A sound service area economy,
• Affordable rares despite frequent rate adjustments,
• Solid legal provisions, and
• �lanageable capital needs.
The bonds are secured by a first hen pledge of net revenues of the Sc Paul Regional Wacer
Servues (SPRW$) system.
The setvice area economy connnues ro grow along wah tha[ of the Twin Cities metropolaan area.
Anchoring the city's diverse economic base �s the stare govemment and the health, fmanctal
serv�ces, and educations; serv�czs seaors. Maaufacturing >Iso :etams a presence m the ciry's area
economy. Unemployment rares are generally 1%-2% be(ow the state's and nanods averages,
indicanng a measure of economic stabiliry. Curren[ effotts on the part oE the ciry and the pnvate
sector mdude the mcreasing of retail, entertamment, and residential investment m the ciry's
downrown core. �
Financial performance remains strong. Historical and pro�ected coverage of revenue debt is
stable at about 3 times (x). Cash balances are strong, exceeding n�ne monchs' operating expenses. In
addmon, a low debt burden totaling $36 million, including [his issue, provides capacity for future
issues. The 2000 bonds will fund various system improvements.
The system servues 93,000 retail customers in St. Paul; West St. Paul, Minn.; Maplewood,
Minn.; Mendota Heighes, Minn.; Falcon He�ghts, Minn.; and Lauderdale, Minn., as well as two
wholesale cusromers. Three ocher cities receive warer on a retad basis. The city plans to concinue ro
acquire these retail sysrems over nme, creating a regional water supply rysrem. The first acquisition,
Maplewood (8,200 customers), took place in January 1998 with two more acquisitions taking
place m 1999. The utility has adequate warer supply and treatment and has succeeded in miuganng
Standard & Poor's �
an� �'n�xrc.�rrmo.�.a
Pu�Lgpa py SGtMaeE 8 Pow s a Oinsmn of iM1e McG�aw�Xtll Lnmpames. �� &earne oft�s Illi Avx�e oi rtieAmenws. New Yoh. N V Ip020. Edironal olGres 55 Wat¢r Svret.
New YM, N.Y 100C1 Subw�Eer umas. �112� d38�]IBO Copyrig�� 1999 Ey iM McG�aw�Hdl Compan�eS Inc fleryotluttion m whole or in part IXa�iM�ed e�cept py permisswn
NEW RATING
CREDIT PROFILE $g� mil wtr rev bnds ser 2000C dtd May 1, 2000
due Dec 1, 2019 AA+
Sale dare: Aprd 5, 2000
MerCh 30.2000 Compentive sale
Standard & Poor's PuB�tC Fmn�CE
h�gh lead tevels wi[h corrosion
conuol processes. Wacer razes are
low a[ 513..i per 1,000 cubfc feet;
and combmed monchtr �vater and
sew•er rates are affordab(e ac abouc
538.�.
The capical impro��ement plan
(CIP) Is manageable ac �107 million
chrough 2009. Pro7ecn �sill be
funded by 529 million of debc with
�78 mdfion funded internallv.
OUTLOOK
The outlook �s revised co stable
from positive. The outlook revisfon
reflec[s Scandard & Poor's
expeccation that connnued stxong
finanaa( performance and low debt
levels wdf be mamtained whde the
sysrem's management progresses
coward regionalizacion.
Legai Pravisions
Legal provisions are strong,
parncularly in prorecnng bond
holders from di(ution by subsequent
debt �ssuance. The bonds are secured
by a fisst 1�en pledge of net revenues
of the ary's water syscem. The
addi[ional bonds rest requires a high
1.Sx coverage of pro�ected
max�mum annual debt sezv�ce by net
revenues over the past cw•o years
w¢h certam adjustments permitred
m ca(culatmg net revenues. The debt
servse reserve wdl be funded up
Eront wtth bond proceeds and is
equal ro maximum annual debt
service.
Service Area Economy
SPRWS provides wacer to the
- ry, a� well as the nearoy
communaies of Falwn Heights,
Lauderdale, and Maplewood.
SPRWS also has retail contracts to
suppfy water to the anes of
i�Iendota Heights; i�lendota, Minn.;
and West St. Paul water systems.
SPRWS aLso secves Liale Canada,
iV[mn.'s and Roseville, �finn.'s
wholesale contraas, which expire m
2007 and 2004, respecnvely.
Rosevdle, in mm, reselts water to
Arden Hills, Minn. In all, the service
area, induding wholesale and retail
cuscomers, includes abouc 400,000
�nhabitants. The suburban
customers accounc for 37% of
annual warer mnsumpcion. The
SPRWS board's scracegy has been
co acquire che spsrems of �ts currenc
membecs under a regSonalizazion
concept. Beginning w�th
Vlaplewood in 1998, SPRWS has
now acquired the syscems of three
caies; and a November 2000
reEerendum in Wesc St. Paul wdl
dererm(ne �f its sysem wdl likewise
be acquired by SPRWS. Exrensions
ro the sysrem ou¢ide St. Paul will
be paid for by the local
mumapaLry, or by developers, and
w�ll be assumed by the system only
after the warranty penod has
exp�red, posc connecuon. Since $t.
Paul's own �nfrastructure is older
and its mams require qwcker
replacement, coupled with [he fact
chat the cay has genera(!y required
acqu�red system's mfrastructure ro
meet SPRWS' mimmum standards,
concerns over system expansion v�a
acquisinon is somewhat mitigated.
St PauPs economy contmues
to benefic from growth m[he Twin
Cines area; and downrown St. Paul
concmues ro be the scene of a
mass�ve redevelopment of its office
space, enrertainment, and tourist
fac�Lnes. Dunng 1999,
metropolitan area �ob growth
contnbuted ro a low 2.2% city
unemployment rate. :1 surge m real
estate demand and strong
absorpnon rares has driven overall
vacanty rates down m 4S in
1999 from 19.0% in 1995 while
vacancies of Cfass A space declined
ro 6.2% in 1999 from 19.0% in
1995; rencs have aiso dedmed by
more than 30%a since 1997. Several
new devefopments or expansions
have recendy occurred, mcludmg:
• Ecolab,
• Minneso[a Mutual Life,
• The St. Paul Cos., and
• The Lawson $ohware Center.
The Lawson Sofnvare Center
and the ongomg Minnesota Mumaf
Life pro�ect represent 3202 million
of new conscruction and 960,000
square feec of new office space; the
two pro7ects will add mote than
1,000 jobs ro the downcown area's
�,�a1
economy. Canseco Financial Services
Corp. is conso(fdaung fts
mecropotitan-area workforce, adding
an additional 600 workers-700
workers. Cin' ofhcials expect the
demand for downcown oEfices to spur
recail growth. Ciry� offiaals are also
working co add housmg, improve
streecscapes, and expand transic
access to encourage workers to live,
and spend d�sposable income, in
downtown Sc PauL St. PauPs latest
developmenc minanves regard the
city's need for housing dose to the
downtown area. Aparcmenc vacancies
were 11 % in 1999, and the cay has
idenafied seveca! bLocks m walking
distance of che central business
distnct that can be redevefoped for
residential use.
The other ma�or focus for
downrown redevelopment is the c�ty's
entertamment and museum facilities.
The city recendy complered
renovat�ons to the Rivercentre
Convention Cenrer and the $99
milhon Saence Museum of
Minnesota. The new Rivercentre
Arena is expeaed to be completed by
the start of [he 2000-2001 National
Hockey League (NHL) season. All
three facd¢�es are adjacen[ ro the
❑ucfeus of St. PauPs educauonal and
entertainment distnct—along wah
che existmg Ordway Music Theater,
[he Minnesota History Center, and
the Chddren's Museum. St. Paul
projects more chan frve milhon
visitors dunng 2000. The suburban
areas served by the ary's water unLry
system have also bene5[ed from the
strong Minneapo(is5[. Paul
metropoli[an area economy of the
I 990s.
Cusromer Profile
The system serves 93,000
pnmarily residennal accounts in St.
Paul and its surrounding
communities. The customer base is
not concentrared since �he 10 leading
customers acmun[ for �ust 8.6% of
mnsumption. Cusmmer account
growth has been modest, mcreasing
by (ess than 1% per year, and is
expected to continue to grow m a
vmilar Eashion over che near cerm.
Page 2
Standard & Poor PUBLIC F[NAYCE
IssuedManagement
St. Paul's managemenc fs strong
and has worked diligently to
mainram finances, as wetl as find
financiaf solu[ions ro spur
developmen�. The wacer unlin�
s}�srem fs an encerpnse of St. Paul
and �s governed by a six-member
board, which mcicdes:
• Three members of the St Pauf
City Council,
• Two independent members
res[ding m the ciry, and
• One member appointed by
Maplewood.
The bozrd expects to add a
seventh member by 2001, also
represennng che suburbs.
�Ianagement connnues ro focus
on providmg quah[y water ac
reasonable prices. As such,
substannal sums have been mvesred
in new creatment faa(ines that are
more auromaced and provide coso-
saving opera[�onal efficiencies.
During the past decade, [he budget
for full-t�me equivalent posmons has
dedined 17% to 280 in fisca( 2000.
Management beheves further
reducnons wdl occur as the system
contmues to implement aucomanon
where pracncaL In addinoa,
managementhasengaged
eonsultanes !o examme ia pract�ces
to further reduce costs.
Operetions
Tlie sysrem operates one wacer
creatment p(ant with a capaciry of
144 mdlion gallons per day (mgd),
wh�ch is we(I be(ow the annual peak
daily flow of 90 mgd. The average
da�ly flow rose sreadiiy to 52 mgd in
1999. The ciry has an avadable
source capaury of 180 mgd and a
total s[orage capacity of 131 mgd.
St. Paul estimates that its available
supply is sufficient ro accommodate
100,000 additional wsromers.
Recent improvements a[ the water
treatment plant have been designed
co prov�de redundancy for parts of
the plant, reducing che tikelihood
chat che plant would ever be
comp(etely off-line due ro equ�pmenc
probiems.
Rates/Collections
Under che sysrem's race
strucmre, sLght(y higher rares are
charged during che summer season;
and sps[em customers outvde St.
Paul n•p�cally pay 20% above ary
residents per unit of consumption.
This percenc, however, gradually
dedmes for cuscomers in
municipalities where the wa[er
ryscem has ownership.
Furthermore, the demand charge
based on me[er size has recently
becn elimina[ed. The board's track
record oE sfightly increasing rates
on a regular basis is good,
indudmg 2.9% m 1999 ro$13.5
per 1,000 cubic feet; and the board
wif( ra�se rates by an esximaced
2.1% in f�scal 2000. Retail rates, at
�169 per year for 1,000 cubic feet
(or 7,500 galfons) per mon[h
consumption, are favorabte when
compared to other medium-s¢ed
metropolitan systems.
Finances/Capital Impravement Plan
Sc. Paul's wacer syscem
operares under a rolling 10-year
CIP, which �dennfies capital needs
chroughoutthesyscem and
esnmates the timmg, cost, and
funding of pro�ects. The 1999-
2009 CIP indicates that capital
needs will remain manageable and
will be largely funded with
rewrcing opecanng revenues. The
CIP's mam focus wd( be to �mprove
che qual�ry of water. The $107
million CIP mcludes $78 mil(ion of
recurrmg funds and S29 milLon in
debt m be issued in three-year
mcrements. The bfmnesota stare
revolving fund may be used for
projects chat qualify for such low-
cost funding. Ma7or capital items
anticipated for the.nex[ five years
include:
• Geographic Information
Systems (GIS) conversion,
• Improvements co sfudge fields
and condmts, and
• Projec¢ related m the
consohdation of the
distrfbunon and busmess
divis�ons.
oo-aa�
Page 3
.. .�a u
Springsted, Inc.
. . �
�� - 3a7
MOODY'S ASSIGNS AA2 RgT=NG TO SAINT PAUL, 7�7 $8�035,000 WATER REVgp7Ug EpNDS,
SERIES 2000C _
$16.195 MILL20N DEET 9FFECTED
St. Paul (City of) ZR77
Water/Sewer
Mi,nnesota
Moody's Rating
Issue
- Rating
Water Revenue Bonds, Series 2000C Aa2
Sale Aiaount $8,035,000
Expected Sale Date 04/OS/00
Rating Description Water Revenue Bonds
NEW YORK, March 30, 2000 -- Moody+$ �S a,ggigaed a Aa2 rating H,nd stable
outlook to the City o£ St. Paul, M�7 Water Revenue Boads,:Series 2000C. The
bonds, which are secured by the net revenues of the city+s water utility, will
provide financing for varioua improvements iacluding added admi.niatrative
space at the expanded treatment plant. The Aa.2 rating is baeed on the water
system�s strong financial operations, stable service area, and mana.geable, ten
year capital program.
Moody•s expects continuation oP souad system financea and favorable debt
service coverage. Steady rate increaees have consiatently produced more than
two and a ha1P times annual debt service coverage oP both water revenue bonds
and Public Facitilites Authority <PFA) general obligation aad revenue loans.
Peak debt service coverage on all outstanding obligations and the currently
offered issue is 2,31 times based on actual 1998 net system revenues;
preliminary 1999 net revenues would result in coverage of 3.0 times peak. The
utility•s strategic plan targets annual rate increases at levels below
intlation. A rate increase, though, may not be needed Por the year 2001
because the combination of coat controls and a reduction in the number of
employees have resulted in operational savings. The utility has recently
acquired, since January 1998, the water utility syatems of three suburban
retail customers: Maplewood, Falcon Heights and Lauderdale. The agreement for
these acquisitions includea a five year plan to reduce their rates to the city
of St. Paul's level - about a 20% reduction. Cost controls have allowed the
utility to absorb the revenue reduction and keep rate increases below the
level of inflation. The utility is seeking to diversify its revenue stream to
compensate £or its limited growth potential; currently about 13% of the
revenues are not related to the saZe of water.
The system service area is stable. The St. Paul Regional Water Services serves
slmost 400,00o people living in the City oP St. Paul and eight suburban
communities as well as portions of four additional suburbs. Account levels
have trended slowly upward over the last five years, but potential is limited;
estimates are that there is room for another 500 homes in the two suburbs
served which are not fully developed. St. Paul, the state•s capital and second
largest city, is a mature city with an economic base which includes sizable
government, higher education and medical aervices sectors. As with other
older, urban cities, St. Paul had shown signs of eeonomic stress in recent
years; these are being addressed by the city's successful revitalization
efforts.
The system�s capital pragram is manageable with existing resources and
borrowing capacity. The ten year capital plan totals $102.3 million dollars;
$7s.� million will be funded from rates-derived monies on hand and �he balance
from revenue bonds. After this sale another $8 million in water rey_enue bonds
is expected to be sold in 2003 and 2006. The current issue provide� $3,g
million in funding Por the non-process portion of the treatment plant upgrade;
the balance of the bond proceeds will finance a variety of projects which
include two new pumps, a new tank and new screens at river intakea.
Approximately $2 million for one small project relating to the plant upgrade
will remain and is expected to be addressed in 2003.
KEY STATISTICS:
Number of retail accounts: 93,477
Operating ratio (1999 prelim): 70.9%
Debt service coverage (rev, obligations only, 1999 prelim): 3.o x
Debt service coverage (rev, and G.o, obligationa, 1999 prelim): 2.76x
Peak debt service.coverage: 3.0 x
Debt ratio (projected incl. new iasue): 6.1R
Payout of principal, all obligations C10 years): 56.S:L
ANALYSTS:
, Public Finance Group, Moody's Investors Service
CONTACTS:
Journalists: <212) 553-0376
Research Clients: (212) 553-1625
Counci{ F+le # (.10 � .� O� 1
GreenSheet# tOl�
RESOLUTION
OF SAINT PAUL, MINNESOTA
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Presented By
Referred To
Committee
ACCEPTING PROPOSAL ON SALE OF
$8,035,000 WATER REVEN[7E
BONDS, SERIES 2000C, AND PROVIDING FOR
THEIR ISSUANCE
WHEREAS, the Director, Office of Financial Services,
has presented proposals received fbr the sale of $8,035,000 Water
Revenue Bonds, Series 2000C (the "Bonds�� or "2000 Bonds"), of trie
City of Saint Paul, Minnesota (the "City"); and
WHEREAS, the proposals set forth on Schedule A aCtached
hereto were received pursuant to the Terms of Proposal at the
offices of Springsted Incorporated at 10:30 A.M., Central Time,
this same day; and
WHEREAS, the Director, Office of Financial Services,
has advised this Council that the proposal of Robert W. Baird &
Co. was found to be the most advantageous and has recommended
that said proposal be accepted; and
WHEREAS, there are currently outstanding bonds of the
City payable from Net Revenues of the City�s Water Utility,
speci£ically the City's (a) $11,175,000 Water Revenue Bonds,
Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
adopted by this Council on June 15, 1993, of which $2,690,000
remain outstanding, and (b) $7,000,000 Water Revenue Refunding
Bonds, Series 1997C (the ��1997 Bonds"), issued pursuant to a
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resolution adopted by this Council on 3une li, 1997, of which
$5,470,000 remain outstanding, and (c) $16,500,000 Water Revenue
Note of 1998 (the ��1998 Note'�), issued pursuant to a resolution
adopted by this Council on October 7, 1998, of which
$15,395,079_49 is outstanding and more is to be drawn; and there
is currently outstanding a general obligation note of the City
payable on a subordinate lien basis from Net Revenues of the
City's Water Utility, specifically the City's $4,269,844 General
Obligation Wastewater Treatment Water Revenue Note of 1996 (the
"1996 Note"), issued pursuant to a resolution adopted by this
Council on May 15, 1996, of which $3,774,192 remains outstanding;
and the 1997 Bonds refunded bonds issued in 1994, all of which
have been retired (the "1994 Bonds"); and
WHEREAS, it is necessary and desirable to provide for
the issuance of the Bonds on a parity of lien with the 1993
Bonds, 1997 Bonds and 1998 Note, to finance the acquisition and
construction of various improvements (the "Project") 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
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. Paritv Bonds. The 1993 Bonds and 1997 Bonds
shall be a first charge and lien upon the Net Revenues
of the Water Utility. No part of such Net Revenues
sha11 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
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
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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 insufPicient 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 £or 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
Decemher 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 interest 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.
"(c) The proceeds of such parity lien bonds
shall be used only for the purpose of (1) making
improvements, additions, extensions, renewals or
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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
WHEREAS, for purposes of this resolution paragraphs 18
and 11 of the resolutions authorizing the issuance and sale of
the 1993 Bonds and 1998 Note are substantively identical to said
paragraph 18 relating to the 1997 Bonds; and
WHEREAS, the Board and this Council deem it necessary
and expedient to undertake the Project; and
WHEREAS, herein the City makes various findings
demonstrating the propriety of the issuance of the Bonds on a
parity with the 1993 Bonds, 1997 Bonds and 1998 Note and with a
priority of lien over the 1996 Note; and
WHEREAS, in accordance with advice received from the
Board, this Council finds, detexmines and declares that it is
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 Bonds £rom the proceeds of bonds
payable solely from the Net Revenues of the Water Utility; and
WHEREAS, the City has heretofore issued registered
obligations in certificated form, and incurs substantial costs
associated with their printing and issuance, and substantial
continuing transaction costs relating to their payment, transfer
and exchange; and
WAEREAS, the City has determined that significant
savings in transaction costs will result from issuing bonds in
"global book-entry form", by which bonds are issued in
certificated form in large denominations, registered on the books
of the City in the name of a depository or its nominee, and held
in safekeeping and immobilized by such depository, and such
depository as part of trie computerized national securities
clearance and settlement sy5tem (the "National System") registers
transfers of ownership interests in the bonds by making
computerized book entries on its own books and distributes
payments on the bonds to its Participants shown on its books as
the owners o£ such interests; and such Participants and other
banks, brokers and dealers participating in the National System
will do likewise (not as agents of the City) if not the
beneficial owners of the bonds; and
WHEREAS, "Participants" means those financial
institutions for whom the Depository effects book-entry transfers
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and pledges of securities deposited and immobilized with the
Depository; and
WHEREAS, The Depository Trust Company, a limited
purpose trust company organized under the laws of the State of
New York, or any of its successors or successors to its functions
hereunder (the "Depositoxy"), will act as such depository with
respect to the Bonds except as set forth below, and the City has
heretofore delivered a letter of representations (the "Letter of
Representations") setting forth various matters relating to the
Depository and its role with respect to the Bonds; and
WHEREAS, the City will deliver the Bonds in the form of
one certificate per maturity, each representing the entire
principal amount of the Bonds due on a particular maturity
(each a"Global Certificate"), which single certificate per
maturity may be transferred on the City's bond register as
required by the Uniforni Commercial Code, but not exchanged
smaller denominations unless the City determines to issue
Replacement Bonds as provided below; and
date
for
WHEREAS, the City will be able to replace the
Depository or under certain circumstances to abandon the "global
book-entry form" by permitting the Global Certificates to be
exchanged for smaller denominations typical of ordinary bonds
registered on the City's bond register; and "Replacement Bonds"
means the certificates represenCing the Bonds so authenticated
and delivered by the Bond Registrar pursuant to paragraphs 6 and
12 hereof: and
WHEREAS, "HOlder'� as used herein means the person in
whose name a Bond is registered on the registration books of the
City maintained by the registrar appointed as provided in
paragraph 8 (the "Bond Registrar"); and
WHEREAS, pursuant to Minnesota Statutes, Section
475.60, Subdivision 2(9), public sale requirements do not apply
to the Bonds, because the City has retained an independent
financial advisor and this Council has determined to sell the
Bonds by private negotiation, and the City has instead authorized
a competitive sale without publication of notice thereof as a
form of private negotiation; and
WHEREAS, Rule 15c2-12 of the Securities and Exchange
Commission prohibits ��participating underwriters�' from purchasing
or selling the Bonds unless the City undertakes to provide
certain continuing disclosure with respect to the Bonds; and
WHEREAS, proposals for the Bonds have been solicited by
Springsted Incorporated pursuant to an Official Statement and
Terms of Proposal therein:
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NOW, THEREFORE, BE IT RESOLVED by the Council of the
City of Saint Paul, Minnesota, as follows:
l. Acceptance of Proposal. The proposal of Robert W.
Baird & Co. (the ��Purchaser��) to purchase $8,035,000 Water
Revenue Bonds, Series 2000C, of the City (the "BOnds�� or ��2000
Bonds", or individually a"Bond�� or '�2000 Bond"), in accordance
with the Terms of Proposal for the bond sale, at the rates of
interest hereinafter set forth, and to pay for the Bonds the sum
of $7,942,459.00, plus interest accrued to settlement, is hereby
found, determined and declared to be the most favorable proposal
received and is hereby accepted, and the Bonds are hereby awarded
to the Purchaser. The Director, Office of Financial Services, or
his designee, is directed to retain the deposit of the Purchaser
and to forthwith return to the others making proposals their good
faith checks or drafts.
2. Title: Original Issue Date• Denominations•
Maturities. The Bonds shall be titled ��Water Revenue Bonds,
Series 2000C", shall be dated May 1, 2000, as the date of
original issue and shall be issued forthwith on or after such
date as fully registered bonds. The Bonds shall be numbered from
R-1 upward. Global Certificates shall each be in the
denomination of the entire principal amount maturing on a single
date. Replacement Bonds, if issued as provided in paragraph 6,
shall be in the denomination of $5,000 each or in any integral
multiple thereof of a single maturity. The Bonds shall mature on
December 1 in the years and amounts as follows:
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Amount
$135,000
150,000
175,000
125,000
250,000
275,000
225,000
375,000
400,000
300,000
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Amount
$325,000
400,000
425,000
475,000
550,000
550,000
600,000
675,000
725,000
900,000
3. Purpose. The Bonds shall provide funds for the
acquisition and construction of the Project. The proceeds of the
Bonds shall be deposited and used as provided in paragraph 17.
The total Cost of the Project, which shall include all costs
enumerated in Minnesota Statutes, Section 475.65, including legal
and other professional charges, publication and printing costs,
interest accruing on money borrowed for Che Project before the
collection of Net Revenues pledged and appropriated therefor, and
all other Costs necessarily incurred and to be incurred from the
inception to the completion of the Project, is estimated to be at
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least equal to the amount of the Bonds. The City covenants that
it shall do all things and perform all acts required of it to
assure that work on the Project proceeds with due diligence to
completion and that any and all permits and studies required
under law for the Project are obtained.
4. Interest. The Bonds shall bear interest payable
semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing December l, 2000, calculated
on the basis of a 360-day year of twelve 30-day months, at the
respective rates per annum set forth opposite the maturity years
as follows:
Maturity Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Interest Rate
4.30$
4.40
4.60
4.70
4.75
4.80
4.85
4.90
4.95
5.00
Maturity Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Interest Rate
5.00°s
5.05
5.10
5.20
5.25
5.25
5.30
5.40
5.45
5.50
5. Description of the Global Certificates and
Global Book-Entry S�stem. Upon their original issuance the Bonds
will be issued in the form of a single Global Certificate for
each maturity, deposited with the Depository by the Purchaser and
immobilized as provided in paragraph 6. No beneficial owners of
interests in the Bonds will receive certificates representing
their respective interests in the Bonds except as provided in
paragraph 6. Except as so provided, during the term of the
Bonds, beneficial ownership (and subsequent transfers of
beneficial ownership) of interests in the Global Certificates
will be reflected by book entries made on the records of the
Depository and its Participants and other banks, brokers, and
dealers participating in the National System. The Depository's
book entries of beneficial ownership interests are authorized to
be in increments of $5,000 of principal of the Bonds, but not
smaller increments, despite the larger authorized denominations
of the Global Certificates. Payment of principal of, premium, if
any, and interest on the Global Certificates will be made to the
Bond Registrar as paying agent, and in turn by the Bond Registrar
to the Depository or its nominee as registered owner of the
Global Certificates, and the Depository according to the laws and
rules governing it will receive and forward payments on behalf of
the bene£icial owners of the Global Certificates.
Payment of principal of, premium, if any, and interest
on a Global Certificate may in the City's discretion be made by
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such other method of transferring funds as may be requested by
the Holder o£ a Global Certificate.
6. Immobilization of Global Certificates bv the
De�ositorv; Successor DenositoLy; Replacement Bonds. Pursuant to
the request of the Purchaser to the Depository, which request is
required by the Ternts of Proposal, immediately upon the original
delivery of the Bonds the Purchaser will deposit the Global
Certificates representing all of the Bonds with the Depository.
The Global Certificates shall be in typewritten form or otherwise
as acceptable to the Depository, shall be registered in the name
of the Depository or its nominee and shall be held immcbili�ed
from circulation at the offices of the Depository on behalf of
the Purchaser and subsequent bondowners. The Depository or its
nominee will be the sole holder of record of the Global
Certificates and no investor or other party purchasing, selling
or otherwise transferring ownership of interests in any Bond is
to receive, hold or deliver any bond certificates so long as the
Depository holds the Global Certificates immobilized from
circulation, except as provided below in this paragraph and in
paragraph 12.
Certificates evidencing the Bonds may not after their
original delivery be transferred or exchanged except:
(i) Upon registration of transfer of ownership of a
Global Certificate, as provided in paragraph 12,
(ii) To any successor of the Depository (or its
nominee) or any substitute depository (a "substitute
depository") designated pursuant to clause (iii) of this
subparagraph, provided that any successor of the Depository
or any substitute depository must be both a"clearing
corporation" as defined in the Minnesota Uniform Commercial
Code at Minnesota Statutes, Section 336.8-102, and a
qualified and registered "clearing agency" as provided in
Section 17A of the Securities Exchange Act of 1934, as
amended,
(iii) To a substitute depository designated by and
acceptable to the City upon (a) the determination by the
Depository that the Bonds shall no longer be eligible for
its depository services or (b) a determination by the City
that the Depository is no longer able to carry out its
functions, provided that any substitute depository must be
qualified to act as such, as provided in clause (ii) of this
subparagraph, or
(iv) To those persons to whom transfer is requested
in written transfer instructions in the event that:
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1 (a) the Depository shall resign or discontinue
2 its services for the Bonds and the City is unable to
3 locate a substitute depository within two (2) months
4 following the resignation or detexznination of
5 non-eligibility, or
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(b) upon a detennination by the City in its sole
discretion (1) that the continuation of the book-entry
system described herein, which precludes the issuance
of certificates (other than Global Certificates) to any
Holder other than the Depository (or its nominee),
might adversely affect the interest of the beneficial
owners of the Bonds, or (2) that it is in the best
interest of the beneficial owners of the Bonds that
they be able to obtain certificated bonds,
in either of which events the City shall notify Holders of
its determination and of the availability of certificates
(the "Replacement Bonds") to Holders requesting the same and
the registration, transfer and exchange of such Bonds will
be conducted as provided in paragraphs 9B and 12 hereof.
In the event of a succession of the Depository as may
be authorized by this paragraph, the Bond Registrar upon
presentation of Global Certificates shall register their transfer
to the substitute or successor depository, and the substitute or
successor depository shall be treated as the Depository for all
purposes and functions under this resolution. The Letter of
Representations shall not apply to a substitute or successor
depository unless the City and the substitute or successor
depository so agree, and a similar agreement may be entered into.
Redemption.
(a) Ootional Redemption; Due Date. All Bonds maturing
after December 1, 2009, shall be subject to redemption and
prepayment at the option of the City on such date and on any day
thereafter at a price of par plus accrued interest. Redemption
may be in whole or in part of the Bonds subject to prepayment.
If redemption is in part, those Bonds remaining unpaid may be
prepaid in such order of maturity and in such amount per maturity
as the City shall determine; and if only part of the Bonds having
a common maturity date are called for prepayment, the Global
Certificates may be prepaid in $5,000 increments of principal
and, if applicable, the specific Replacement Bonds to be prepaid
shall be chosen by 1ot by the Bond Registrar. Bonds or portions
thereof called for redemption shall be due and payable on the
redemption date, and interest thereon shall cease to accrue from
and after the redemption date.
(b) Notation on Global Certificate. Upon a reduction in
the aggregate principal amount of a Global Certificate, the
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Holder may make a notation of such redemption on the panel
provided on the Global Certificate stating the amount so
redeemed, or may return the Global Certificate to the Bond
Registrar in exchange for a new Global Certificate authenticated
by the Bond Registrar, in proper principal amount_ Such
notation, if made by the Holder, shall be for reference only, and
may not be relied upon by any other person as being in any way
determinative o£ the principal amount of such Global Certificate
outstanding, unless the Bond Registrar has signed the appropriate
column of the panel.
(c) Selection of Replacement Bonds. To effect a partial
redemption oP Replacement Bonds having a common maturity date,
the Bond Registrar prior to giving notice of redemption shall
assign to each Replacement Bond having a common maturity date a
distinctive number for each $5,000 of the principal amount of
such Replacement Bond. The Bond Registrar shall then select by
lot, using such method of selection as it shall deem proper in
its discretion, from the numbers so assigned to such Replacement
Bonds, as many numbers as, at $5,000 for each number, shall equal
the principal amount of such Replacement Bonds to be redeemed.
The Replacement Bonds to be redeemed shall be the Replacement
Bonds to which were assigned numbers 5o selected; provided,
however, that only so much of the principal amount of each such
Replacement Bond of a denomination of more than $5,000 shall be
redeemed as shall equal $5,000 for each number assigned to it and
so selected.
(d) Partial Redemption of Re�lacement Bonds. If a
Replacement Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the City or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the City and Bond Registrar duly executed by the
Aolder thereof or his, her or its attorney duly authorized in
writing) and the City shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Replacement Bond, without service charge, a new Replacement Bond
or Bonds pf the same series having the same stated maturity and
interest rate and of any authorized denomination or
denominations, as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the Bond so surrendered.
(e) Rec�uest for Redemotion. The Bond Registrar shall call
Bonds for redemption and payment as herein provided upon receipt
by the Bond Registrar at least forty-five (45) days prior to the
redemption date of a request of the City, in written form if the
Bond Registrar is other than a City officer. Such request shall
specify the principal amount of Bonds to be called for redemption
and the redemption date.
1149935.2 1 �
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(f) Notice_ Mailed notice of redemption shall be given to
the paying agent (if other than a City officer) and to each
affected Holder. If and when the City shall call any of the
Bond5 for redemption and payment prior to the stated maturity
thereof, the Bond Registrar shall give written notice in the name
of the City of its intention to redeem and pay such Bonds at the
office of the Bond Registrar. Notice of redemption shall be
given b� first class mai1, postage prepaid, mailed not less than
thirty (30) days prior to the redemption date, to each Fiolder of
Bonds to be redeemed, at the address appearing in the Bond
Register. All notices of redemption shall state:
(i)
(ii)
The redemption date;
`Phe redemption price;
(iii} If less than all outstanding Bonds are to be
redeemed, the identification (and, in the case of partial
redemption, the respective principal amountsl of the Bonds
to be redeemed;
(iv) That on the redemption date, the redemption price
will become due and payable upon each such Bond, and that
interest thereon shall cease to accrue from and after said
date; and
(v) The place where such Bonds are to be surrendered
for payment of the redemption price (which shall be the
office of the Bond Registrar).
(g) Notice to De�ositorv. Notices to The Depository Trust
Company or its nominee shall contain the CUSIP numbers of the
Bonds. Tf there are any Holders of the Bonds other than the
Depository or its nominee, the Bond Registrar shall use its best
efforts to deliver any such notice to the Depository on the
business day next preceding the date of mailing of such notice to
all other Holders.
8. Bond RecTistrar. U.S. Bank Trust National
Association in Saint Paul, Minnesota, is appointed to act as bond
registrar and transfer agent with respect to the Bonds (the "Bond
Registrar"), and shall do so unless and until a successor Bond
Registrar is duly appointed, all pursuant to any contract the
City and Bond Registrar shall execute whiCh is consistent
herewith. A successor Bond Registrar shall be an officer of the
City or a bank or trust company eligible for designation as bond
registrar pursuant to Minnesota Statutes, Chapter 475, and may be
appointed pursuant to any contract the City and such successor
Bond Registrar shall execute which is consistent herewith. The
Bond Registrar shall also serve as paying agent unless and until
a successor paying agent is duly appointed. Principal and
interest on the Bonds shall be paid to the Holders (or record
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holders) of the Bonds in the manner set forth in the fonns of
Bond and paragraph 14 of this resolution.
9. Forms of Bond. The Bonds shall be in the form of
Global Certificates unless and until Replacement Bonds are made
available as provided in paragraph 6. Each form of bond may
contain such additional or different terms and provisions as to
the form of payment, record date, notices and other matters as
are consistent with the Letter of Representations and approved by
the City Attorney.
A. Global Certificates. The Global Certificates,
together with the Certificate of Registration, the Register of
Partial Payments, the form of Assignment and the registration
information thereon, shall be in substantially the following form
and may be typewritten rather than printed:
1149735.2
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1 UNITED STATES OF AMERICA
2 STATE OF MINNESOTA
3 RAMSEY COUNTY
4 CITY OF SAINT PAUL
5 R-
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WATER REVENUE
BOND, SERIES 2000C
INTEREST
RATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
MA`PURITY
DATE
December 1,
CUSIP
DOLLARS
KNOW ALL PERSONS BY THESE PRESEI�'PS that the City of
Saint Paul, Ramsey County, Minnesota (the "ISSUer�� or ��City"),
certifies that it is indebted and for value received promises to
pay to the registered owner specified above or on the certificate
of registration below, or registered assigns, solely from the
source and in the manner hereinafter set forth, the principal
amount specified above, on the maturity date specified above,
unless called for earlier redemption, and to pay interest thereon
semiannually on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing December 1, 2000, at the
rate per annum specified above (calculated on the basis of a
360-day year of twelve 30-day months) until the principal sum is
paid or has been provided for. This Bond will bear interest from
the most recent Interest Payment Date to which interest has been
paid or, if no interest has been paid, from the date of original
issue hereof. The principal of and premium, if any, on this Bond
are payable in same-day funds by 2:30 p.m., Eastern time, upon
presentation and surrender hereof at the principal office of
in , Minnesota (the
"Bond Registrar"), acting as paying agent, or any successor
paying agent duly appointed by the Issuer; provided, however,
that upon a partial redemption of this Bond which results in the
stated amount hereof being reduced, the Holder may in its
discretion be paid without presentation of this Bond, which
payment shall be received no later than 2:30 p.m., Eastern time,
and may make a notation on the panel provided herein of such
redemption, stating the amount so redeemed, or may return the
Bond to the $ond Registrar in exchange for a new Bond in the
proper principal amount. Such notation, if made by the Holder,
shall be for reference only, and may not be relied upon by any
other person as being in any way detenninative of the principal
amount of this Bond outstanding, unless the Bond Registrar has
signed the appropriate column of the panel. Interest on this
1149735.2
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DATE OF
ORIGINAL ISSUE
May 1, 2000
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Bond will be paid on each Interest Payment Date in same-day funds
by 2:30 p.m., Eastern time, to the person in whose name this Bond
is registered (the ��Holder�� or "BOndholder") on the registration
books of the Issuer maintained by the Bond Registrar and at the
address appearing thereon at the close of business on the
fifteenth day of the calendar month next preceding such Interest
Payment Date (the "Regular Record Date"). Interest payments
shall be received by the Aolder no later than 2:30 p.m., Eastern
time; and principal and premium payments shall be received by the
xolder no later than 2:30 p.m_, Eastern time, if the Bond is
surrendered for payment enough in advance to permit payment to be
made by such time. Any interest not so timely paid shall cease
to be payable to the person who is the Holder hereof as of the
Regular Record Date, and shall be payable to the person who is
the Holder hereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money
becomes available for payment of the defaulted interest. Notice
of the Special Record Date shall be given to Bondholders not less
than ten days prior to the Special Record Date. The principal of
and premium, if any, and interest on this Bond are payable in
lawful money of the i3nited States of America.
Date of Payment Not Business Dav. If the date for
payment of the principal of, premium, if any, or interest on this
Hond shall be a Saturday, Sunday, legal holiday or a day on which
banking institutions in the City of New York, New York, or the
city where the principal office of the Bond Registrar is located
are authorized by law or executive order to close, then the date
for such payment shall be the next sucCeeding day which is not a
Saturday, Sunday, legal holiday or a day on which such banking
institutions are authorized to close, and payment on such date
shall have the same force and effect as if made on the nominal
date of payment.
Redemotion. All Bonds of this issue (the '�BOnds")
maturing after December 1, 2009, are subject to redemption and
prepayment at the option of the Issuer on such date and on any
day thereafter at a price of par plus accrued interest.
Redemption may be in whole or in part of the Bonds subject to
prepayment. If redemption is in part, those Bonds remaining
unpaid may be prepaid in such order of maturity and in such
amount per maturity as the City shall determine; and if only part
of the Bonds having a common maturity date are called for
prepayment, this Bond may be prepaid in $5,000 increments of
principal. Bonds or portions thereof called for redemption shall
be due and payable on the redemption date, and interest thereon
shall cease to accrue from and after the redemption date.
Notice of Redemption. Mailed notice of redemption
shall be given to the paying agent (if other than a City officer)
and to each affected Holder of the Bonds. In the event any of
the Bonds are called for redemption,_written notice thereof wi11
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be given by first class mail mailed not less than thirty (30)
days prior to the redemption date to each Holder of Bonds to be
redeemed_ In connection with any such notice, the ��CUSIP"
numbers assigned to the Bonds shall be used.
Replacement or Notation of Bonds after Partial
Redemption. Upon a partial redemption of this Bond which results
in the stated amount hereof being reduced, the xolder may in its
discretion make a notation on the panel provided herein of such
redemption, stating the amount so redeemed. Such notation, if
made by the Holder, shall be for reference only, and may not be
relied upon by any other person as being in any way detenninative
of the principal amount of the Bond outstanding, unless the Bond
Registrar has signed the appropriate column of the panel.
Otherwise, the Holder may surrender this Bond to the Bond
Registrar (with, if the Issuer or Bond Registrar so requires, a
written instrument of transfer in form satisfactory to the Issuer
and Bond Registrar duly executed by the Holder thereof or his,
her or its attorney duly authorized in writing) and the Issuer
shall execute (if necessary) and the Bond Registrar shall
authenticate and deliver to the Holder of such Bond, without
service charge, a new Bond of the same series having the same
stated maturity and interest rate and of the authorized
denomination in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
Issuance: Pur�ose; Soecial Obligation. This Bond is
one of an issue in the total principal amount of $8,035,000, all
of like date of original issue and tenor, except as to number,
maturity, interest rate, denomination and redemption privilege,
which Bond has been issued pursuant to and in fu11 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 April 5, 2000 (the "Resolu-
tion"), for the purpose of providing, together with certain other
moneys of the Issuer, funds to finance the acquisition and
construction of various improvements to the Water Utility of the
Tssuer. The Bonds 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 within the meaning of any constitutional, Charter
or statutory limitation of indebtedness. In the event of any
default hereunder, the Holder of this Bond 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,
Water Revenue Refunding Bonds, Series 1997C, issued in the
principal amount of $7,000,000, and Water Revenue Note of 1998,
issued in the principal amount of $16,500,000, are a first and
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prior lien upon the Net Revenues of the Water Utility of the
Tssuer, except that the Issuer is authorized under certain
conditions to issue additional revenue obligations on a parity of
lien with these Bonds, all as provided in the Resolution_
Action by Iiolders_ The Holders of twenty percent (200)
or more in aggregate principal amount of Bonds at any time
outstanding may, either at law or in equity, by suit, action, or
other proceedings, protect and enforce the rights of all Holders
of Bonds then outstanding, or enforce and compel the performance
of any and all of the covenants and duties specified in the
Resolution to be performed by the Issuer or the Board of Water
Commissioners or their officers and agents; provided, however,
that nothing shall affect or impair the right of any Bondholder
to enforce the payment of the principal of and interest on any
Bond at and after the maturity thereof, or the obligation of the
Issuer to pay the principal of and interest on each of the Bonds
issued to the respective Holders thereof at the time and place,
from the source and in the manner provided in the Sonds.
Denominations; Exchange; Resolution. The Bonds are
issuable originally only as Global Certificates in the
denomination of the entire principal amount of the issue maturing
on a single date, or, if a portion of said principal is prepaid,
said principal amount less the prepayment. Global Certificates
are not exchangeable for fully registered bonds of smaller
denominations except to evidence a partial prepayment or in
exchange £or Replacement Bonds if then available. Replacement
Bonds, if made available as provided below, are issuable solely
as fu11y registered bonds in the denominations of $5,000 and
integral multiples thereof of a single maturity and are
exchangeable for fully registered Bonds of other authorized
denominations in equal aggregate principal amounts at the
principal office of the Bond Registrar, but only in the manner
and subject to the limitations provided in the Resolution.
Reference is hereby made to the Resolution for a description of
the rights and duties of the Bond Registrar. Copies o£ the
Resolution are on file in the principal office of the Bond
Registrar.
Re�lacement Bonds. Replacement Bonds may be issued by
the Issuer in the event that:
(a) the Depository shall resign or discontinue
its services for the Bonds, and only if the Issuer is
unable to locate a substitute depository within two (2)
months following the resignation or determination of
non-eligibility, or
(b) upon a determination by the Issuer in its
sole discretion (1) that the continuation of the
book-entry system described in the Resolution, which
1149735.2
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precludes the issuance of certificates (other than
Global Certificates) to any Holder other than the
Depository tor its nominee), might adversely aEfect the
interest of the beneficial owners of the Bonds, or (2)
that it is in the best interest of the beneficial
owners of the Bonds that they be able to obtain
certificated bonds.
Transfer. This Bond shall be registered in the name of
the payee on the books of the Issuer by presenting this Bond for
registration to the Eond Registrar, who wi11 endorse his, her or
its name and note the date of registration opposite the name of
the payee in the certificate of registration attached hereto.
Thereafter this Bond may be transferred by delivery with an
assignment duly executed by the Holder or his, her or its legal
representatives, and the Issuer and Bond Registrar may treat the
Holder as the person exclusively entitled to exercise all the
rights and powers of an owner until this Bond is presented with
such assignment for registration of Cransfer, accompanied by
assurance of the nature provided by ].aw that the assignment is
genuine and effective, and until such transfer is registered on
said books and noted hereon by the Bond.Registrar, all subject to
the terms and conditions provided in the Resolution and to
reasonable regulations of the Issuer contained in any agreement
with, or notice to, the Bond Registrar. Transfer of this Bond
may, at the direction and expense of the Issuer, be subject to
certain other restrictions if required to qualify this Bond as
being "in registered form" within the meaning of Section 149(a)
of the federal Internal Revenue Code of 1986, as amended.
Fees upon Transfer or Loss. The Bond Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Bond and any legal or unusual costs regarding
transfers and lost Bonds.
Treatment of Re�stered Owner. The Issuer and Bond
Registrar may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided (except as otherwise provided with
respect to the Record Date) and for all other purposes, whether
or not this Bond shall be overdue, and neither the Issuer nor the
Bond Registrar shall be affected by notice to the contrary.
Authentication. This Bond shall not be valid or become
obligatory for any purpose or be entitled to any security unless
the Certificate of Authentication hereon shall have been executed
by the Bond Registrar.
Not Oualified Tax-Exemot Obligations. The Bonds have
not been designated by the Issuer as "qualified tax-exempt
obligations" for purposes of Section 265(b)(3) of the federal
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Internal Revenue Code of 1986, as amended. The Bonds do 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 perfonned, precedent to and in the issuance
of this Bond, have been done, have happened and have been
perfonned, in regular and due form, time and manner as required
by 1aw; that this Bond, together with a11 other debts of the
Issuer outstanding on the date of original issue hereof and on
the date of its issuance and delivery to the original purchaser,
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 furnished by its Water
Utility suf£icient in amount to promptly meet the principal and
interest requirements of this issue.
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Bond to be
executed on its behalf by the photocopied facsimile signature of
its Mayor, attested by the photocopied facsimile signature of its
Clerk, and countersigned by the photocopied facsimile signature
of its Director, Office of Financial Services.
1149935.2
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Date of Registration:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution
mentioned within.
Bond Registrar
By
Authorized Signature
Registrable by:
Payable at:
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
riayor
Attest:
City Clerk
Countersigned:
Director, Office of
Financial Services
Water Revenue Bond, Series 2000C, No. R-
1149735.2 19
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CERTIFICATE OF REGISTRATION
The transfer o£ ownership of the principal amount of the attached
Bond 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 BOND REGISTRAR
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REGISTER OF PARTIAL PAYMENTS
The principal amount of the attached Bond has been prepaid on the
dates and in the amounts noted below:
Signature o£ Signature of
Date Amount Bondholder Bond Registrar
If a notation is made on this register, such notation has the
effect stated in the attached Bond. Partial payments do not
require the presentation of the attached Bond to the Bond
Registrar, and a Holder could fail to note the partial payment
here.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this Bond, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UTMA - as custodian for
(Cust) (Minor)
under the Unifonn
(State)
Transfers to Minors Act
Additional abbreviations may also be used
though not in the above list.
1149735.2
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ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the attached Bond and does
hereby irrevocably constitute and appoint
attorney to transfer
the Bond on the books kept for the registration thereof, with
fu11 power of substitution in the premises.
Dated:
Notice: The assignor's signature to this
assignment must correspond with the
name as it appears upon the face of
the attaChed Bond in every
particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other �'Eligible Guarantor
Institution�� as defined in 17 CFR 240.17Ad-15(a)(2).
The Bond Registrar
Bond unless the information
below is provided.
Name and Address:
will not effect transfer of this
concerning the transferee requested
(Include information for a11 joint owners if
the Bond is lzeld by joint account.)
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1 B. Replacement Bonds_ If the City has notified
2 Holders that Replacement Bonds have been made available as
3 provided in paragraph 6, then for every Bond thereafter
4 transferred or exchanged (including an exchange to reflect the
5 partial prepayment of a Global Certificate not previously
6 exchanged for Replacement Bonds) the Bond Registrar shall deliver
7 a certificate in the form of the Replacement Bond rather than the
8 Global Certificate, but the Holder of a Global Certificate shall
9 not otherwise be required to exchange the Global Certificate £or
10 one or more Replacement Bonds since the City recognizes that some
11 beneficial owners may prefer the convenience of the Depository's
12 registered ownership of the Bonds even though the entire issue is
13 no longer required to be in global book-entry form. The
14 Replacement Bonds, together with the Bond Registrar's Certificate
15 of Authentication, the form of Assignment and the registration
16 infonnation thereon, shall be in substantially the following
17 form, with paragraphs identical to those of the form of G1oba1
18 Certificate stated by heading or initial text only:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
�
INTEREST
RATE
WATER REVENUE
BOND, SERIES 2000C
MATURITY DATE OF
DATE ORIGINAL ISSUE
May 1, 2000
REGISTERED OWNER:
CUSIP
PRINCIPAL AMOUNT: DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS that the City of
Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"),
certifies that it is indebted and for value received promises to
pay to the registered owner specified above, or registered
assigns, solely from the source and in the manner hereinafter set
forth, the principal amount specified above, on the maturity date
specified above, unless called for earlier redemption, and to pay
interest thereon semiannually on June 1 and December 1 0� each
year (each, an "Interest Payment Date"), commencing December 1,
2000, at the rate per annum specified above (calculated on the
basis of a 360-day year of twelve 30-day months) until the
principal sum is paid or has been provided for. This Bond wi11
bear interest from the most recent Interest Payment Date to which
interest has been paid or, if no interest has been paid, from the
date of original issue hereof. The principal of and premium, if
any, on this Bond are payable upon presentation and surrender
hereof at the principal office of ,
in , (the "Sond Registrar�'), acting
as paying agent or any successor paying agent duly appointed by
the Issuer. Interest on this Bond will be paid on each Interest
Payment Date by check or draft mailed to the person in whose name
this Bond is registered (the ��Holder�� or ��Bondholder") on the
registration books of the Issuer maintained by the Bond Registrar
and at the address appearing thereon at the close of business on
the fifteenth day of the calendar month next preceding such
Interest Payment Date (the "Regular Record Date"). Any interest
not so timely paid sha11 cease to be payable to the person who is
the Holder hereof as of the Regular Record Date, and shall be
payable to the person who is the Holder hereof at the close of
business on a date (the "Special Record Date") fixed by the Bond
Registrar whenever money becomes available for payment of the
defaulted interest. Notice of the Special Record Date shall be
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given to Sondholders not less than ten days prior to the Special
Record Date_ The principal of and premium, if any, and interest
on this Bond are payable in lawful money of the United States of
America.
REFERENCE IS HEREBY MP.DE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
IT IS HEREBY CERTIFIED AND RECITED
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Bond to be
sealed with its official seal or a facsimile thereof and to be
executed on its behalf by the original or facsimile signature of
its Mayor, attested by the original or facsimile signature of its
Clerk, and countersigned by the original or facsimile signature
of its Director, Office of Financial Services.
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Date of Registration:
BOND REGISTRAR'S
CERTIRICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
Bond Registrar
By
Authorized Signature
(SEAL)
1149735.2
Registrable by:
Payable at: _
CITY OF SAINT PAUL,
RAMSEY COUN'SY, MINNESOTA
Mayor
Attest:
ty
Countersigned:
Director, Office of Financial
Services
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ON REVERSE OF BOND
Date of Payment Not Business Day
Redemption. Al1 Bonds of this issue (the "Bonds��)
maturing after December 1, 2009, are subject to redemption and
prepayment at the option of the Issuer on such date and on any
day thereafter at a price of par plus accrued interest_
Redemption may be in whole or in part of the Bonds subject to
prepayment. If redemption is in part, those Bonds remaining
unpaid may be prepaid in such order of maturity and in such
amount per maturity as the City shall determine; and if only part
of the Bonds having a common maturity date are called for
prepayment, the specific Bonds to be prepaid shall be chosen by
lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the redemption date, and
interest thereon shall cease to accrue from and after the
redemption date.
I3otice of Redemption
Selection o£ Bonds for Redemption. To effect a partial
redemption of Bonds having a common maturity date, the Bond
Registrar shall assign to each Bond having a common maturity date
a distinctive number for each $5,000 of the principal amount of
such Bond. The Bond Registrar shall then select by lot, using
such meChod of selection as it shall deem proper in its
discretion, from the numbers assigned to the Bonds, as many
numbers as, at $5,000 for each number, shall equal the principal
amount of such Bonds to be redeemed. The Bonds to be redeemed
shall be the Bonds to which were assigned numbers so selected;
provided, however, that only so much of the principal amount o£
such Bond of a denomination of more than $5,000 shall be redeemed
as shall equal $5,000 for each number assigned to it and so
selected. If a Bond is to be redeemed only in part, it shall be
surrendered to the Bond Registrar (with, if the Issuer or Bond
Registrar so requires, a written instrument of transfer in form
satisfactory to the Issuer and Bond Registrar duly executed by
the Holder thereof or his, her or its attorney duly authorized in
writing) and the Issuer Shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of such
Bond, without service charge, a new Bond or Bonds of the same
series having the same stated maturity and interest rate and of
any authorized denomination or denominations, as requested by
such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond
so surrendered.
Issuance; Pur�ose; Special Obliaation
Action by Holders
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Denominations: Exchange; Resolution. The Bonds are
issuable solely as fully registered bonds in the denominations of
$5,000 and integral multiples thereof of a single maturity and
are exchangeable for fully registered Bonds of other authorized
denominations in equal aggregate principal amounts at the
principal of£ice of the Bond Registrar, but only in the manner
and subject to the limitations provided in the Resolution.
Reference is hereby made to the Resolution for a description of
the rights and duties of the Bond Registrar. Copies of the
Resolution are on file in the principal office of the Bond
Registrar.
Transfer. This Bond is transferable by the Holder in
person or by his, her or its attorney duly authorized in writing
at the principal office of the Bond Registrar upon presentation
and surrender hereof to the Bond Registrar, all subject to the
tenns and conditions provided in the Resolution and to reasonable
regulations of the Sssuer contained in any agreement with the
Bond Registrar. Thereupon the Issuer shall execute and the Bond
Registrar shall authenticate and deliver, in exchange Eor this
Bond, one or more new fully, registered Bonds in the name of the
transferee (but not registered in blank or to "bearer'� or similar
designation), of an authorized denomination or denominations, in
aggregaCe principal amount equal to the principal amount of this
Bond, of the same maturity and bearing interest at the same rate.
Fees upon Transfer or Loss.
Treatment of Reqistered Owner
Authentication
Not Oualified Tax-Exempt Obligations
ABBREVIATIONS
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� r � � ♦
ASSIGNMENT
For value received, the undersigned hereby sells,
assigns and transfers unto
the within Bond and does hereby irrevocably constitute and
appoint attorney to transfer the Bond on
the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
Notice: The assignor's signature to this
assignment must correspond with the
name as it appears upon the face of
the within Bond in every
particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a national bank or trust
company or by a brokerage firm having a membership in one of the
major stock exchanges or any other "Eligible Guarantor
Institution" as defined in 17 CFR 240.17Ad-15(a)(2).
The Bond Registrar will not effect tran5fer of this
Bond unless the information concerning the transferee requested
below is provided.
Name and Address:
(Include information for all joint owners if
the Bond is held by joint account.)
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10. Execution The Bonds 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
fornls of the Bonds, and be sealed with the seal of the City;
provided, however, that the seal of the City may be a printed or
photocopied £acsimile; and provided further that any of such
signatures may be printed or photocopied facsimiles and the
corporate seal may be omitted on the Bonds as permitted by law.
In the event of disability or resignation or other absence of any
such of£icer, the Bonds may he signed by the manual or facsimile
signature of that officer who may act on behalf of such absent pr
disabled officer. In case any such officer whose signature or
facsimile of whose signature shall appear on the Bonds shall
cease to be such officer before the delivery of the Bonds, such
signature or facsimile shall nevertheless be valid and sufficient
for a11 purposes, the same as if he or she had remained in office
until delivery.
11. Authentication; Date of Registration. No Bond
shall be valid or obligatory for any purpose or be entitled to
any security or benefit under this resolution unless a
Certificate of Authentication on such Bond, substantially in the
form hereinabove set forth, shall have been duly executed by an
authorized representative of the Bond Registrar. Certi£icates o£
Authentication on di£ferent Bonds need not be signed by the same
person. The Bond Registrar shall authenticate the signatures of
officers of the City on each Bond by execution of the Certificate
of Authentication on the Bond and by inserting as the date of
registration in the space provided the date on which the Bond is
authenticated. For purposes of delivering the original Global
Certificates to the Purchaser, the Bond Registrar shall insert as
the date of registration the date of original issue, which date
is May 1, 200�. The Certificate of Authentication so executed on
each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution.
12. Reqistration; Transfer; Exchanqe. The City will
cause to be kept at the principal office of the Bond Registrar a
bond register in which, subject to such reasonable regulations as
the Bond Registrar may prescribe, the Bond Registrar shall
provide for the registration of Bonds and the registration of
transfers of Bonds entitled to be registered or transferred as
herein provided.
A Global Certificate shall be registered in the name of
the payee on the books of the Bond Registrar by presenting the
Global Certificate for registration to the Bond Registrar, who
will endorse his or her name and note the date o£ registration
opposite the name of the payee in the certificate of registration
on the Global Certificate. Thereafter a Global Certificate may
be transferred by delivery with an assignment duly executed by
the Holder or his, her or its legal representative, and the City
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and Bond Registrar may treat the Holder as the person exclusively
entitled to exercise all the rights and powers of an owner until
a Global Certificate 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 thereon
by the Bond Registrar, all subject to the terms and conditions
provided in this resolution and to reasonable regulations of the
City contained in any agreement with, or notice to, the Bond
Registrar.
Transfer of a Global Certificate may, at the direction
and expense of the City, be subject to other restrictions if
required to qualify the Global Certificates as being "in
registered form" within the meaning of Section 149(a) of the
federal Internal Revenue Code of 1986, as amended.
If a Global Certificate is to be exchanged for one or
more Replacement Bonds, all of the principal amount of the Global
Certificate shall be so exchanged.
Upon surrender for transfer of any Replacement Bond at
the principal office of the Bond Registrar, the City shall
execute (if necessary), and the Bond Registrar shall
authenticate, insert the date of regi5tration (as provided in
paragraph 11) of, and deliver, in the name of the designated
transferee or transferees, one or more new Replacement Bonds of
any authorized denomination or denominations of a like aggregate
principal amount, having the same stated maturity and interest
rate, as requested by the transferor; provided, however, that no
Bond may be registered in blank or in the name of "bearer" or
similar designation.
At the option of the Holder of a Replacement Bond,
Replacement Bonds may be exchanged for Replacement Bonds of any
authorized denomination or denominations of a like aggregate
principal amount and stated maturity, upon surrender of the
Replacement Bonds to be exchanged at the principal office of the
Bond Registrar. Whenever any Replacement Bonds are so
surrendered for exchange, the City shall execute (if necessary),
and the Bond Registrar shall authenticate, insert the date of
registration of, and deliver the Replacement Bonds which the
Holder making the exchange is entitled to receive. Global
Certificates may not be exchanged for Global Certificates of
smaller denominations.
provided
the Bond
City.
All Bonds surrendered upon any exchange or transfer
for in this resolution shall be promptly cancelled by
Registrar and thereafter disposed of as directed by the
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All Bonds delivered in exchange for or upon transfer of
Bonds shall be valid special obligations of the City evidencing
the same debt, and entitled to the same benefits under this
resolution, as the Bonds surrendered for such exchange or
transfer.
Every Bond presented or surrendered for transfer or
exchange shall be duly endorsed or be accompanied by a written
instrument of transfer, in form satisfactory to the Bond
Registrar, duly executed by the Holder thereof or his, her or its
attorney duly authorized in writing.
The Bond Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in connection with the transfer or exchange of any Bond and any
legal or unusual costs regarding transfers and lost Bonds.
Transfers shall also be subject to reasonable
regulations of the City contained in any agreement with, or
notice to, the Bond Registrar, including regulations which permit
the Bond Registrar to close its transfer books between record
dates and payment dates.
13. Rights Upon Transfer or Exchanae. Each Bond
delivered upon transfer of or in exchange for or in lieu of any
other Bond shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
14. Interest Pavment; Record Date. Interest on any
Global Certificate shall be paid as provided in the first
paragraph thereof, and interest on any Replacement Bond shall be
paid on each Interest Payment Date by check or draft mailed to
the person in whose name the Bond is registered (the �'Holder") on
the registration books of the City maintained by the Bond
Registrar, and in each case at the address appearing thereon at
the close of business on the fifteenth (i5th) day of the calendar
month next preceding such Interest Payment Date ithe "Regular
Record Date��). Any such interest not so timely paid shall cease
to be payable to the person who is the Holder thereof as of the
Regular Record Date, and sha11 be payable to the person who is
the Holder thereof at the close of business on a date (the
"Special Record Date") fixed by the Bond Registrar whenever money
becomes available for payment of the defaulted interest. Notice
of the Special Record Date shall be given by the Bond Registrar
to the Holders not less than ten (1�) days prior to the Special
Record Date.
15. Holders; Treatment of Reqistered Owner; Consent of
Holders.
(A) For the purposes of all actions, consents and other
matters affecting Holders of the Bonds, other than payments,
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redemptions, and purchases, the City may (but shall not be
obligated to) treat as the Holder of a Bond the beneficial owner
of the Bond instead of the person in whose name the Bond is
registered. Eor that purpose, the City may ascertain the
identity of the beneficial owner of the Bond by such means as the
Bond Registrar in its sole discretion deems appropriate,
including but not limited to a certificate from the person in
whose name the Bond is registered identifying such beneficial
owner.
(B) The City and Bond Registrar may treat the person in
whose name any Bond is registered as the owner of such Bond for
the purpose of receiving payment of principal of and premium, if
any, and interest (subject to the payment provisions in paragraph
14 above) on, such Bond and for all other purposes whatsoever
whether or not such Bond sha11 be overdue, and neither the City
nor the Bond Registrar 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 Holders may be
in any number of concurrent writings of similar tenor and must be
signed or executed by such Holders 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
ownership of Bonds, if made in the following manner, shall be
sufficient for any of the purposes of this resolution, and sYsall
be conclusive in favor of the City with regard to any action
taken by it under such request or other instrument, namely:
(1) The fact 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
signing such writing acknowledged before him the execution
thereof, or by an affidavit of any witness to such
execution.
(2) Subject to the provisians of subparagraph (A)
above, the fact of the ownership by any person of Bonds and
the amounts and numbers of such Bonds, and the date of the
holding of the same, may be proved by reEerence to the bond
register.
16. Delivery; Application of Proceeds. The Global
Certi£icates when so prepared and executed shall be delivered by
the Director, Office of Financial Services, to the Purchaser upon
receipt of the purchase price, and the Purchaser shall not be
obliged to see to the proper application thereof.
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17. Fund and Accounts. For the convenience and proper
administration oE the proceeds from the sale of the 2000 Bonds
and for the payment of principal of and interest on the 2000
Bonds, the Board of Water Commissioners Water Utility Enterprise
Fund (the "Water Utility Fund", heretofore in resolutions
relating to the 1993 Bonds, 1997 Bonds and 1998 Note also
referred to as the "Water Utility Fund") heretofore created shall
continue in force and effect as a separate fund of the City and
of the Board until all of the 2000 Bonds are fully paid and
retired. In the Water Utility Fund there is hereby created a
2000 Construction Account and in addition there are, and there
shall continue to be, the following accounts:
(a) A"2000 Construction Account", to whiCh shall be
credited all proceeds of the sale of the 2000 Bonds other
than accrued interest and amounts in excess of $7,930,545.
The 20�0 Construction Account shall be used to pay the costs
of the Project, including all costs enumerated in Minnesota
Statutes, Section 475.65. The moneys in the 2000
Construction Account shall be used solely for the purposes
herein set forth and for no other purpose, except that any
surplus in the 2000 Construction Account shall be deposited
in the Revenue Bond Debt Service Account.
(b) An "Ooeration 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 sha11 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, ai.d all
other items which, by sound accounting practices, constitute
nornlal, 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 resexve 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
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
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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 sale proceeds of the 2000 Bonds
representing accrued interest and amounts in excess of
$7,930,545, and further into which there shall be credited
and to which there is hereby irrevocably pledged from the
Net Revenues of the operation of the Water Utility system
monthly commencing in June, 2000, a sum equal to at least
1/12 (in 2000, 1/6 through November as to the 2000 Bonds
only) of the total principal and interest on the 2000 Sonds
and any other bonds issued on a parity therewith during the
ensuing twelve (12) months; provided, however, that no
further payments need be made to said account when the
moneys held therein are sufficient for the payment of all
principal and interest due on said bonds 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 2000 Bonds and any other bonds which are
issued on a parity with the 2000 Bonds.
(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 bonds payable from the
Revenue Bond Debt Service Account; provided, however, that
the moneys in the Reserve Account may be used to prepay said
bonds, when such prepayment will retire all of the bonds
then outstanding. $575,925 from the Water Utility's retained
earnings shall be deposited in the Reserve Account upon the
issuance of the 2000 Bonds, and amounts already in the
Reserve Account pursuant to the resolutions authorizing the
issuance of the 1993 Bonds, 1997 Bonds and 1998 Note shall
be maintained therein upon the issuance of the 2000 Bonds 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,
1998 Note and 2000 Bonds. Whenever the moneys in the
Reserve Account exceed the amount required to be maintained
in the Reserve Account as set Eorth below, such excess may
be transferred to the Revenue Bond Debt Service Account; and
whenever the moneys in the Reserve Account sha11 be less
than said amount, the Reserve Account shall be restored to
said amount from the next available A7et Revenues. The
amount required to be maintained in the Reserve Account
shall be an amount equal to the lesser of: (1) ten percent
(l0a) of the original principal amount of the 2000 Bonds 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
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any year on the bonds payable from the Revenue Bond Debt
Sesvice 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 issued after the 1994
Bonds (as defined in the resolution authorizing trie issuai.ce
of the 1997 Bonds, 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 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
rating(s) 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 Utility 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, 1998 Note and
20�0 Bonds to be paid to the United States in order to
maintain the exclusion from gross income under Section 103
of the Code (as hereinafter defined) of the interest on the
1993 Bonds, 1997 Bonds, 1998 Note and 2000 Bonds_
(i) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
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2000 Bonds shall be maintained and operated as required by
the resolutions authorizing the same.
(j) No portion of the proceeds of the 2000 Bonds 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 2000 Bonds were
issued, (2) as part of a reasonably required reserve or
replacement fund not in excess of ten percent (l00) of the
proceeds of the 2000 Bonds (or in a higher amount which the
City establishes is necessary Co the satisfaction of the
Secretary of the Treasury of the United States), and (3) in
addition to the above in an amount not greater than the
lesser of five percent (5°s) of the proceeds of the 2000
Bonds or $100,000. To this effect, any proceeds of the 2000
Bonds and any sums from time to time held in the 2000
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 bonds 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 taking 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 2000 Bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the federal Internal Revenue
Code of 1986, as amended (the '�Code��).
18. Paritv Bonds. The 1993 Bonds, 1997 Bonds, 1998
Note and 2000 Bonds 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 any 1993 Bonds, 1997 Bonds, 1995 Note or
2000 Bonds or bonds 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 the rates
and charges of the Water Utility sufficient to timely pay such
general obligation bonds. I3o additional revenue obligations
payable from the Revenue Bond Debt Service Account sha11 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
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parity of lien with the 2000 Bonds, 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 ma�cimum 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 other 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 £or 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.
(c) The proceeds of such parity lien bonds shall be
used only for the purpose of (1) making improvements,
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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 19 or 25 as applied in paragraph 20).
19. Refunding Maturing Bonds. The City also reserves
the right and privilege of issuing additional revenue bonds if
and to the extent needed to refund maturing bonds payable from
the moneys in the Water Utility Fund in case the moneys in the
Revenue Bond Debt Service Account are insuEficient 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, 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.
20. Other Revenue Obli�rations. Except as authorized
in paragraphs 18, 19 and 25 hereof, the City covenants and agrees
that it wi11 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 2000 Bonds on said Net Revenues. If bonds which refund the
2000 Bonds are parity lien bonds, they shall enjoy complete
equality of lien with any portion of the 2000 Bonds not refunded
and any other then outstanding bonds payable from the Revenue
Bond Debt Service Account, if any there be, and such refunding
bonds shall continue to have whatever priority of lien over
subsequent issues that the refunded bonds may have had. If only
a portion of the outstanding 2000 Bonds shall be refunded and if
such 20�� Bonds shall be refunded in such manner that the
interest rate of any refunding bond shall be greater than the
interest rate of the corresponding refunded 2000 Bond (or the
average net interest rate of the refunding bonds shall be, or
shall be reasonably esCimated to be, higher than the average net
interest rate of the refunded 2000 Bonds), or that the maturity
date of any refunding bond shall be earlier than the maturity
date of the corresponding refunded 2000 Bond (or the average
maturity of the refunding bonds shall be earlier than the average
maturity of the refunded 2000 Bonds), then such 2000 Bonds may
not be refunded without the consent of the holders of the
unrefunded portion of the 2000 Bonds and any other bonds then
outstanding payable from the Revenue Bond Debt Service Account
unless the Net Revenues coverage test of paragraph 18 is met.
21. Insufficient Amounts. Tn the event that the
moneys in the Revenue Bond Debt Service Account and Reserve
Account shall be insufficient at any particular time to pay the
principal then due and interest then accrued on all bonds payable
11$ 9735 . 2 (} �
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from the 12evenue Bond Debt Service Account, said moneys shall
first be applied to the payment pro rata of the accrued interest
on all such bonds, payable over a period ending on June 1 or
December 1, as appropriate, and any balance sha11 be applied ir
payment pro rata of the principal on all such bonds, provided
further that if it shall ever be determined by a court of
competent jurisdiction while any such bonds 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.
22. Suit by Sondholders. The Holders of twenty
percent (200) or more in aggregate principal amount of bonds
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 of all Holders of the
2000 Bonds then outstanding 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.
23. Covenants. For the protection of the Holders of
the 2000 Bonds, 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 thereof.
(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 Utility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
1149735.2 4 1
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principal and interest on the bonds payable from 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 2000 Bonds and all bonds on a parity of
lien with the 2000 Bonds, 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 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 25 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 otlzer non-revenue-producing properties which in
the judgment of the City have become unnecessary,
uneconomical or inexpedient to use in connection with the
Water Utilit� 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.
(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 oE said audit shall be furnished, without cost, to the
Purchaser of the 2000 Bonds. If the City fails to provide
such audit within a reasonable time after the end of said
fiscal year, the holders of twenty percent (20°s) or more of
the outstanding bonds 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 Purchaser of the 2000 Bonds and the Holders
thereof, or their duly appointed representatives, from time
to time shall have the right, at all reasonable times, to
inspect the Water Utility system and to inspect and copy the
1149'/35.2 4 2
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books, records, accounts and data relating thereto. The
City agrees to furnish copies of such audit, without cost,
to any Holder or Aolders of the 2000 Bonds at their request
within a reasonable time after the end of each fiscal year.
(f) It will faithfully and punetually perform all
duties with reference to the Water Utility required by the
City Charter, the Constitution and laws o£ the State of
Minnesota and this resolution.
(g) It will grant no franchise to any competing
utility.
24. Amendments. No change, amendment, modification or
alteration shall be made in the covenants made with Holders of
the 2000 Bonds without the consent of the Holders of not less
than sixty percent (600) in principal amount of such 2000 Bonds
then outstanding except for changes, amendments, modifications
and alterations (a) made to cure any ambiguity or formal defect
or omission, or (b) which would not materially prejudice the
Holders of such outstanding 2000 Bonds; provided, however, that
nothing herein contained shall permit or be construed as
permitting (1) an exCension of the maturity of the principal of
or Che interest on any such 2000 Bonds, or (2) a reduction in the
principal amount of any such 2000 Bond or the rate of interest
thereon, or (3) a privilege or priority of any such 2000 Bond or
2000 Bonds over any other bond or bonds except as otherwise
provided herein, or (4) a reduction in the aggregate principal
amount of such 2000 Bonds 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 such 2000
Bonds, except as hereinbefore expressly permitted, or t6) a
modification of any of the provisions of this paragraph without
the consent of the Holders of one hundred percent (1000) of the
principal amount of such 2000 Bonds outstanding.
25. Discharae. When all 2000 Bonds have been
discharged as provided in this paragraph, all pledges, covenants
and other rights granted by this resolution to the Holders of the
2000 Bonds shall cease. The City may discharge all 2000 Bonds
which are 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 such 2000 Bonds on or before that date a sum sufficient
for the payment thereof in full; or if any 2000 Bond 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 2000
Bonds which are called for redemption on any date when they are
prepayable according to their 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
1149"/35.2 43
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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 issue of the 2000 Bonds in whole or in part by
complying with the applicable provisions of Minnesota Statutes,
Section 475.67, and any amendments thereto, except Chat the funds
deposited in escrow in accordance with said provisions may but
need not be in whole or part proceeds of advance refunding bonds.
The City may discharge 2000 Bonds as herein provided without the
consent of any Bondholders.
26. Fiscal Year. As used in this resolution the words
"fiscal year" shall mean the twelve (12) 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 £iscal 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.
27. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Purchaser, and to Che attorneys approving the legality of the
issuance of the Bonds, certified copies of a11 proceedings and
records of the City relating to the Bonds 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 Bonds 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
furnished, shall be deemed representations of the City as to the
facts recited therein.
28. Negative Covenants as to Use of Proceeds and
Improvements. The City hereby covenants not to use the proceeds
o£ the Bonds or to use the Improvements, or to cause or permit
them to be used, or to enter into any deferred payment
arrangements for the cost of the Improvements, in such a manner
as to cause the Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code. The
City reasonably expects that no actions wi11 be taken over the
term of the Sonds that would cause Chem to be private activity
bonds, and the average term of the Bonds is not longer than
reasonably necessary for the governmental purpose of the issue.
The City hereby covenants not to use the proceeds of the Bonds in
such a manner as to cause the Bonds to be "hedge bonds�� within
the meaning of Section 149(g) of the Code.
29. Tax-Exempt Status of the Bonds• 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 Bonds, including
1149735.2 4 4
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without limitation requirements relating to
investments, limitations on amounts invested
than the yield on the Bonds, and the rebate
earnings to the United States.
temporary periods for
at a yield greater
of excess investment
If any elections are available now or hereafter with
respect to arbitrage or rebate matters relating to the Bonds, 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 Bonds, and all such elections
shall be, and shall be deemed and treated as, elections of the
City.
30. No Designation of Oualified Tax-Exem�t
Obliaations. The Bonds, together with other obligations issued
by the City in 2000, exceed in amount those which may be
qualified ae "qualified tax-exempt obligations" within the
meaning of Section 265(b)(3) of the Code, and hence are not
designated for such purpose.
31. Letter of Repre5entations. The Letter of
Representations-for the Bonds is hereby confirmed to be the
Blanket Issuer Letter of Representations dated April 10, 1996, by
the City and received and accepted by The Depository Trust
Company. So long as The Depository Trust Company is the
Depository or it or its nominee is the Holder of any Global
Certificate, the City shall comply with the provisions of the
Letter of Representations, as it may be amended or supplemented
by the City from time to time with the agreement or consent of
The Depository Trust Company.
32. Parity Findinqs. It is hereby found, determined
and declared that:
(a1 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, 1997 Bonds and 1998 Note
and the subordinate 1996 Note.
lb) All payments required to be made prior to the date
riereof 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, 1997 Bonds and 1998 Note have been made.
(c) The annual Net Revenues for each of the two (2)
completed fiscal years immediately preceding the issuance of
iias�ss.z 4 5
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the 2000 Bonds have been more than one and one-half (1.5)
times, specifically 3.070 and 3.288 times, respectively, the
maximum annual principal and interest coming due hereafter on
all outstanding revenue obligations payable from and having a
parity of lien upon the Net Revenues, being the 1993 Bonds,
1997 Bonds and 1998 Note, and the 2000 Bonds as the
obligations proposed to be issued, to wit:
Net Revenues 199&
Net Revenues 1999
Maximum Annual Principal and
Interest on the 1993 Bonds
Maximum Principal and Interest
on the 1997 Bonds
Maximum Annual Principal and
Interest on the 1998 Note
Maximum Annual Principal and
Interest on the 2000 Bonds
Maximum Annual Principal and
Interest on the 1993 Bonds,
1997 Sonds, 1998 I3ote and
2000 Bonds
(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
$10,478,238
$11,219,964
$ 987,000
$ 8'78,218
$ 1,616,868
$ 949,500
S 3,412,629
$ 5,118,944
This City Council has been furnished with the Certificate 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 L3tility during the term of the 2000 Bonds will be more
than sufficient to provide Net Revenues adequate to pay
principal and interest when due on the 2000 Bonds and on
those other bonds which are now outstanding and to maintain
the Reserves required therefor.
(f) The 2000 Bonds have a December 1 maturity or
maturities and has interest payments on June 1 and December
1, and are in compliance with the other requirements for
parity bonds.
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(g) The proceeds of the 2000 Bonds shall only be used
for the purpose o£ 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 1996 Note and 2000 Bonds.
33. Covenant with Holders 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 Bonds.
34. Negotiated Sale. The City has retained Springsted
Incorporated as an independent financial advisor, and this
Council has heretofore determined, and does hereby determine, to
sell the Bonds by private negotiation to the Purchaser, all as
provided by Minnesota Statutes, Section 475.60, Subdivision 2(9).
35. Continuing Disclosure. The City is an obligated
person with respect to the Bonds. The City hereby agrees, in
accordance with the provisions of Rule 15c2-12 (the "Rule"),
promulgated by the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as
amended, and a Continuing Disclosure Undertaking (the
"Undertaking") hereinafter described, to:
A. Provide or cause to be provided to each nationally
recognized municipal securities information repository
("NRMSIR") and to the appropriate state information
depository ('�SID"), if any, for the State of Minnesota, in
each case as designated by the Commission in accordance with
the Rule, certain annual financial information and operating
data in accordance with the Undertaking. The City reserves
the right to modify from time to time the terms of the
Undertaking as provided therein.
B. Provide or cause to be provided, in a timely
manner, to (i) each NRMSIR or to the Municipal Securities
Rulemaking Board ("MSRB") and (ii) the SID, notice of the
occurrence of certain material events with respect to the
Bonds in accordance with the i3ndertaking.
C. Provide or cause to be provided, in a timely
manner, to (i) each NRMSIR or to the MSRB and (ii) the SID,
notice of a failure by the City to provide the annual
financial information with respect to the City described in
the Undertaking.
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The City agrees that its covenants pursuant to the Rule
set forth in this paragraph 35 and in the Undertaking are
intended to be for the benefit of the Holders of the Bonds and
shall be enforceable on behalf of such Holders; provided that the
right to enforce the provisions of these covenants shall be
limited to a right to obtain specific enforcement of the City's
obligations under the covenants.
The Mayor and Director, Office of Financial Services,
or any other officers of the City authorized to act in their
stead (the "Officers"), are hereby authorized and directed to
execute on behalf of the City the Undertaking in substantially
the £orn1 presented to the City Council, subject to such
modifications thereof or additions thereto as are (i} consistent
with the requirements under the Rule, (ii) required by the
Purchaser, and (iii) acceptable to the Officers.
36. 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_
37. Aeadinas. 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 6y Oepartment of.
���1G� c�F ���t��tk� Sc��l��
g � �'` �-_—�--`1
Adopted by Council: Date ���� S .�flOa
Adoption Certified by Councit Secretary
By: '�r ���v
Approved by Mayor. D Q
B Y —�� � �--'
Form Ap roved b City Attorney
�r�-- � ,. C"''°-
By: —.
d�_ o a
Appro db MayorforSubmi
e f
48
t - Abs�e�.�-� ovJ
i
!,�_ �/.
.__�^�'?�
OJ1TE N11i111iED
:��.� GREEN SHEET
� U oEr�ue�r c.rcrc. U a�rwu��� _
\GEIJ44 BY (WTE]
K441GN
NUYBERFOR �CrtYAiTa11E! anCtfltlt_
RWTItICs
� ❑ ALIKUL9BIYCF80R i111111C1�L9EM�CC10
❑3 wraR ❑
TOTAL # OF SIGNATURE PAGES 1_ (CL1P ALL LOCATIONS FOR SIGNATURE)
iis resdution accePts the winnirg proposal and awards the bid fw fhe $8,035,000
ater Revenue Bonds. Series 2000C. This is a eomD�e borW sale and tlx award
poing to the bidder fouM most advantagcos (lovrest eost) to the City.
PLANNING COMMISSION
CIB COMMI7TEE
CML SERVICE COMMISSION
IATING PROBLEM ISSUE, OPPORTUNITY (Wlw, What, When, Where, Why)
boMS are for the purpose of finaricing various imprwemenls to the Ulility. aM will be repaid by re�enues of the U[ilily.
be available for impfovements to the UIiIM1y.
evs:.ma.:
Has this Pe�Krm e�er waked unUer a cont'act tor this tlepartment?
VES NO
tias this persa�rm ever been a city employee9
YES NO
Dces th's pe�soNfirtn possess a sldll trot rrormally possessed by any curte�rt cily employee?
YES NO j
Is Mis pereoMrtn a targeted veMOR
YES NO
dain all ves ansvrers on seoarate sheet aM atlach to nreen sheet
�O ��0��
No 101150
needed for certain Utility imqouements will not be available.
AMOUNT OF 7RANSACiION S Se.ms.000
COST/REVENUE BUDGETED (GIRCLE ON�
YES NO
SOURCE
ACTIVITY NUMBER
(EXPWN)
oo-3a7
8i SEVENTH PLACE EAST, SUITE 100
SAIST PA[iL, MN 55101-2R87
// 6i1-223-3000 FAX:657-28-3002
lJ
SPRINGSTED
Publu Finance Advuors
April 5, 2000
/..
Mr. Joe Reid, Director Mr. Bernie Bullert, General Manager
Office of the Financial Services Saint Paul Regional Water Services
City of Saint Paul 8 Fourth Street East, Suite 400
240 City Hall Saint Paul, MN 55101
15 West Kellogg Boulevard
Saint Paul, MN 55102
RE: Recommendations for Award of City of Saint Paul's
$8,035,000 Water Revenue Bonds, Series 2000C
Dear Mr. Reid and Mr. Bullert;
This letter summarizes the results of the competitive bids opened at 10:30 A.M. this morning for
this issue.
Purpose of Issue
The purpose of this Water Revenue issue is to fund various capital improvements of Water
Regional Services. The issue will be repaid solely by net revenues of the water utility.
Tax-Exempt Market Rates
The tax-exempt market has moved downward over the last several weeks.. A major national
index of tax-exempt interest rates (the Bond Buyer's Index — BBI) is currentiy 5.74%.
Sale Results
The City received four bids on the issue. The bids were as follows:
Rank Bidder
Robert Baird
PiperJaffray
Cronin
Dain Rauscher
TIC (%1
5.3683
5.3797
5.4378
5.4772
The lowest or best bid was received from Robert Baird (Milwaukee) at a true interest rate of
5.36%.
SAINT PAUL, MN � MIN�'EAPOLIS, MN - MILWAIIKEE, Wf • OVERLAND PARK, KS • WASHINGTON, DC • DES MOINES, IA
�-3a�
City of Saint Paul, Minnesota
April 5, 2000
Page 2
We require bidders to submit their bids on a"True Interest Rate (TIC) basis, so as to reflect the
present value of their bids and thereby ensure the City award based on the lowest cost to the
City. We have enclosed bid tabulation forms for the issue summarizing the bid specifics and
composition of each underwriting syndicate.
Recommendation
We recommend award of sale to Robert W. Baird for these Water Revenue Bonds.
Basis of Recommendation
We believe the interest rates received by the City today aggressively reflect current market
conditions for this issue. In our financing recommendations for this issue, previously provided,
we estimated a TIC rate of 5.79% for the week of March 21. This result of 5 36% far exceeds
any market movement occurring during the interim.
Credit Rating
We have enclosed the written reports on the Water Regional Services ratings for this issue from
Moody's, and Standard & Poor's. The S&P report announces the upgrading of the rating to
AA+. Moodys reaffirms the rating at Aa2. Both have a stable outlook for the rating. Saint Paul
Water Regional Services should take great pride in its upgrading. We believe that the AA+ is
an exceptional rating for a water utility. Both the City and the Water Board should take
particular pride in this achievement.
We appreciate the opportunity to again be of service to the City and the Water Board on this
very successful issuance program. We welcome any questions regarding this sale process.
Respectfully,
�`�it�-v �� � �� ��4� ✓� �
David N. MacGillivray
Principal
Director of Project Management
,'i113
enclosure
cc: Ms Barb Maynard, Acting Treasurer
o a7
//
RS E. SEVENTH PLACE, SUITE 100
SAINT PAUL, M[Y 55101-2887
65i-Z?3-3000 FAX: 651-2233002
SPRINGSTED
Public Finance Advisors
$8,035,000
CITY OF SAINT PAUL, NIINNESOTA
WATER REVENUE BONDS, SERIES 2000C
(BOOK EN1'RY ONLI�
I:�.\ N�
SALE:
April 5, 2000
Moody's Rating: Aa2
Standard & Poor's Rating: AA+
Interest Net Interest 17ue Interest
Bidder Rates Price Cast Rate
ROBERT W. BAIRD & COMPANY
INCORPORATED
U.S. BANCORP PIPER IAFFRAY INC.
NORWEST INVESTMENT SERVICES, INC.
Edward D. Jones & Company
ROBERT W. BAIItD & COMPANY, INCORPORATED
4.30%
4.40%
4.60 %
4.70 %
4.75 %
4.80 %
4.85 %
4.90%
4.95 %
5.00%
5.05 %
5.10%
5.20 %
5.25%
5.30 %
5.40 %
5.45 %
5.50 %
4.50%
4.60%
4.70 %
4.75 %
4.80%
4.90%
5.00%
5.10%
520%
5.25 %
5.30%
5.35 %
5.40 %
5.50%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009-2010
2011
2012
2013
2014-2015
2016
2017
2018
2019
2000-2002
2003
2004
2005
2006-2007
2008-2009
2010-2011
2012
2013
2014
2015
2016
2017
2018-2019
$7,942,459.00
$7,934,980.20
$5,558,425.17
$5,569,562.51
5.3683 %
5.3797 %
(Continued)
SAINTPAUL,MN , MINNEAPOLIS,MN , MILWAUKEE,WI � OVERLANDPARK,KS , waSHINGTON,DC . DESMOINES,IA
Interest Netlnterest True Interest
Bidder Rates Price Cost Rate
CRONIN & COMPANY, INCORPORATED
SALOMON SMITH BARNEY
MORGAN STANLEY DEAN WITTER
PAINEWEBBERINCORPORATED
CIBC WORLD MARKETS
FIRST UNION CAPITAL MARKETS
CORPORATION
SOUTHWEST SECURITIES, INC.
DAIN RAUSCHERINCORPORATED
Isaak Bond Investments, Inc.
4.50 %
4.60 %
4.70 %
4.75 %
5.00 %
5.10 %
5.20 %
5.25 %
5.35 %
5.40 %
5.50 %
4.75%
4.875%
4.90%
5.00%
5.125 %
S.IS%
525%
5.375%
5.40%
5.50 %
5.60 �
2000-2001
2002
2003
2004
2005-2010
2011
2012
2013
2014-2015
2016-2017
2018-2019
2000-2001
2002-2005
2006-2007
20p8-2010
2011
2012
2013
2014
2015
2016-2018
2019
$7,931,767.35
$7,930.711.00
REOFFERING SCHEDULE OF THE PURCHASER
Rate
4.30 %
4.40 %
4.60 %
4.70%
4.75%
4.80%
4.85 %
4.90 %
4.95 %
5.00 %
5.00 %
5.05 %
5.10 %
5.20 %
5.25 %
5.25 %
5.30 %
5.40 %
5.45 %
5.50 %
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Yield
Par
Par
Par
Par
Par
Paz
Par
Paz
Par
Par
5.05 %
5.t0%
5. LS%
5.25 %
5.30 %
5.35%
5.40%
5.50 %
5.55 %
5.60 %
$5,623,533.69
$5,666,814.52
5.4378%
5.4772%
BBI: 5.74%
Average Maturity: 12.93 Years
Analysts:
Peter V. Musphy, New Yo�k
212-438-2065
UPGRADED
$1.02 mil wtr rev bnds
OUTLOOK REVISED
TO
AA+
TO
Stable
FflOM
AA
FROM
Posit�ve
RATIONALE
James Wiemken, Chuago The ratmg upgrade on St. Paul, Minn.'s water revenue bonds reflects connnued strong financial
312-669-9170 performance and liquidity and maintenance of low debt levels afcer completmg substannal capital
�mprovements from rewrrmg revenues.
Other strengths supporting the ratfng are:
• A sound service area economy,
• Affordable rares despite frequent rate adjustments,
• Solid legal provisions, and
• �lanageable capital needs.
The bonds are secured by a first hen pledge of net revenues of the Sc Paul Regional Wacer
Servues (SPRW$) system.
The setvice area economy connnues ro grow along wah tha[ of the Twin Cities metropolaan area.
Anchoring the city's diverse economic base �s the stare govemment and the health, fmanctal
serv�ces, and educations; serv�czs seaors. Maaufacturing >Iso :etams a presence m the ciry's area
economy. Unemployment rares are generally 1%-2% be(ow the state's and nanods averages,
indicanng a measure of economic stabiliry. Curren[ effotts on the part oE the ciry and the pnvate
sector mdude the mcreasing of retail, entertamment, and residential investment m the ciry's
downrown core. �
Financial performance remains strong. Historical and pro�ected coverage of revenue debt is
stable at about 3 times (x). Cash balances are strong, exceeding n�ne monchs' operating expenses. In
addmon, a low debt burden totaling $36 million, including [his issue, provides capacity for future
issues. The 2000 bonds will fund various system improvements.
The system servues 93,000 retail customers in St. Paul; West St. Paul, Minn.; Maplewood,
Minn.; Mendota Heighes, Minn.; Falcon He�ghts, Minn.; and Lauderdale, Minn., as well as two
wholesale cusromers. Three ocher cities receive warer on a retad basis. The city plans to concinue ro
acquire these retail sysrems over nme, creating a regional water supply rysrem. The first acquisition,
Maplewood (8,200 customers), took place in January 1998 with two more acquisitions taking
place m 1999. The utility has adequate warer supply and treatment and has succeeded in miuganng
Standard & Poor's �
an� �'n�xrc.�rrmo.�.a
Pu�Lgpa py SGtMaeE 8 Pow s a Oinsmn of iM1e McG�aw�Xtll Lnmpames. �� &earne oft�s Illi Avx�e oi rtieAmenws. New Yoh. N V Ip020. Edironal olGres 55 Wat¢r Svret.
New YM, N.Y 100C1 Subw�Eer umas. �112� d38�]IBO Copyrig�� 1999 Ey iM McG�aw�Hdl Compan�eS Inc fleryotluttion m whole or in part IXa�iM�ed e�cept py permisswn
NEW RATING
CREDIT PROFILE $g� mil wtr rev bnds ser 2000C dtd May 1, 2000
due Dec 1, 2019 AA+
Sale dare: Aprd 5, 2000
MerCh 30.2000 Compentive sale
Standard & Poor's PuB�tC Fmn�CE
h�gh lead tevels wi[h corrosion
conuol processes. Wacer razes are
low a[ 513..i per 1,000 cubfc feet;
and combmed monchtr �vater and
sew•er rates are affordab(e ac abouc
538.�.
The capical impro��ement plan
(CIP) Is manageable ac �107 million
chrough 2009. Pro7ecn �sill be
funded by 529 million of debc with
�78 mdfion funded internallv.
OUTLOOK
The outlook �s revised co stable
from positive. The outlook revisfon
reflec[s Scandard & Poor's
expeccation that connnued stxong
finanaa( performance and low debt
levels wdf be mamtained whde the
sysrem's management progresses
coward regionalizacion.
Legai Pravisions
Legal provisions are strong,
parncularly in prorecnng bond
holders from di(ution by subsequent
debt �ssuance. The bonds are secured
by a fisst 1�en pledge of net revenues
of the ary's water syscem. The
addi[ional bonds rest requires a high
1.Sx coverage of pro�ected
max�mum annual debt sezv�ce by net
revenues over the past cw•o years
w¢h certam adjustments permitred
m ca(culatmg net revenues. The debt
servse reserve wdl be funded up
Eront wtth bond proceeds and is
equal ro maximum annual debt
service.
Service Area Economy
SPRWS provides wacer to the
- ry, a� well as the nearoy
communaies of Falwn Heights,
Lauderdale, and Maplewood.
SPRWS also has retail contracts to
suppfy water to the anes of
i�Iendota Heights; i�lendota, Minn.;
and West St. Paul water systems.
SPRWS aLso secves Liale Canada,
iV[mn.'s and Roseville, �finn.'s
wholesale contraas, which expire m
2007 and 2004, respecnvely.
Rosevdle, in mm, reselts water to
Arden Hills, Minn. In all, the service
area, induding wholesale and retail
cuscomers, includes abouc 400,000
�nhabitants. The suburban
customers accounc for 37% of
annual warer mnsumpcion. The
SPRWS board's scracegy has been
co acquire che spsrems of �ts currenc
membecs under a regSonalizazion
concept. Beginning w�th
Vlaplewood in 1998, SPRWS has
now acquired the syscems of three
caies; and a November 2000
reEerendum in Wesc St. Paul wdl
dererm(ne �f its sysem wdl likewise
be acquired by SPRWS. Exrensions
ro the sysrem ou¢ide St. Paul will
be paid for by the local
mumapaLry, or by developers, and
w�ll be assumed by the system only
after the warranty penod has
exp�red, posc connecuon. Since $t.
Paul's own �nfrastructure is older
and its mams require qwcker
replacement, coupled with [he fact
chat the cay has genera(!y required
acqu�red system's mfrastructure ro
meet SPRWS' mimmum standards,
concerns over system expansion v�a
acquisinon is somewhat mitigated.
St PauPs economy contmues
to benefic from growth m[he Twin
Cines area; and downrown St. Paul
concmues ro be the scene of a
mass�ve redevelopment of its office
space, enrertainment, and tourist
fac�Lnes. Dunng 1999,
metropolitan area �ob growth
contnbuted ro a low 2.2% city
unemployment rate. :1 surge m real
estate demand and strong
absorpnon rares has driven overall
vacanty rates down m 4S in
1999 from 19.0% in 1995 while
vacancies of Cfass A space declined
ro 6.2% in 1999 from 19.0% in
1995; rencs have aiso dedmed by
more than 30%a since 1997. Several
new devefopments or expansions
have recendy occurred, mcludmg:
• Ecolab,
• Minneso[a Mutual Life,
• The St. Paul Cos., and
• The Lawson $ohware Center.
The Lawson Sofnvare Center
and the ongomg Minnesota Mumaf
Life pro�ect represent 3202 million
of new conscruction and 960,000
square feec of new office space; the
two pro7ects will add mote than
1,000 jobs ro the downcown area's
�,�a1
economy. Canseco Financial Services
Corp. is conso(fdaung fts
mecropotitan-area workforce, adding
an additional 600 workers-700
workers. Cin' ofhcials expect the
demand for downcown oEfices to spur
recail growth. Ciry� offiaals are also
working co add housmg, improve
streecscapes, and expand transic
access to encourage workers to live,
and spend d�sposable income, in
downtown Sc PauL St. PauPs latest
developmenc minanves regard the
city's need for housing dose to the
downtown area. Aparcmenc vacancies
were 11 % in 1999, and the cay has
idenafied seveca! bLocks m walking
distance of che central business
distnct that can be redevefoped for
residential use.
The other ma�or focus for
downrown redevelopment is the c�ty's
entertamment and museum facilities.
The city recendy complered
renovat�ons to the Rivercentre
Convention Cenrer and the $99
milhon Saence Museum of
Minnesota. The new Rivercentre
Arena is expeaed to be completed by
the start of [he 2000-2001 National
Hockey League (NHL) season. All
three facd¢�es are adjacen[ ro the
❑ucfeus of St. PauPs educauonal and
entertainment distnct—along wah
che existmg Ordway Music Theater,
[he Minnesota History Center, and
the Chddren's Museum. St. Paul
projects more chan frve milhon
visitors dunng 2000. The suburban
areas served by the ary's water unLry
system have also bene5[ed from the
strong Minneapo(is5[. Paul
metropoli[an area economy of the
I 990s.
Cusromer Profile
The system serves 93,000
pnmarily residennal accounts in St.
Paul and its surrounding
communities. The customer base is
not concentrared since �he 10 leading
customers acmun[ for �ust 8.6% of
mnsumption. Cusmmer account
growth has been modest, mcreasing
by (ess than 1% per year, and is
expected to continue to grow m a
vmilar Eashion over che near cerm.
Page 2
Standard & Poor PUBLIC F[NAYCE
IssuedManagement
St. Paul's managemenc fs strong
and has worked diligently to
mainram finances, as wetl as find
financiaf solu[ions ro spur
developmen�. The wacer unlin�
s}�srem fs an encerpnse of St. Paul
and �s governed by a six-member
board, which mcicdes:
• Three members of the St Pauf
City Council,
• Two independent members
res[ding m the ciry, and
• One member appointed by
Maplewood.
The bozrd expects to add a
seventh member by 2001, also
represennng che suburbs.
�Ianagement connnues ro focus
on providmg quah[y water ac
reasonable prices. As such,
substannal sums have been mvesred
in new creatment faa(ines that are
more auromaced and provide coso-
saving opera[�onal efficiencies.
During the past decade, [he budget
for full-t�me equivalent posmons has
dedined 17% to 280 in fisca( 2000.
Management beheves further
reducnons wdl occur as the system
contmues to implement aucomanon
where pracncaL In addinoa,
managementhasengaged
eonsultanes !o examme ia pract�ces
to further reduce costs.
Operetions
Tlie sysrem operates one wacer
creatment p(ant with a capaciry of
144 mdlion gallons per day (mgd),
wh�ch is we(I be(ow the annual peak
daily flow of 90 mgd. The average
da�ly flow rose sreadiiy to 52 mgd in
1999. The ciry has an avadable
source capaury of 180 mgd and a
total s[orage capacity of 131 mgd.
St. Paul estimates that its available
supply is sufficient ro accommodate
100,000 additional wsromers.
Recent improvements a[ the water
treatment plant have been designed
co prov�de redundancy for parts of
the plant, reducing che tikelihood
chat che plant would ever be
comp(etely off-line due ro equ�pmenc
probiems.
Rates/Collections
Under che sysrem's race
strucmre, sLght(y higher rares are
charged during che summer season;
and sps[em customers outvde St.
Paul n•p�cally pay 20% above ary
residents per unit of consumption.
This percenc, however, gradually
dedmes for cuscomers in
municipalities where the wa[er
ryscem has ownership.
Furthermore, the demand charge
based on me[er size has recently
becn elimina[ed. The board's track
record oE sfightly increasing rates
on a regular basis is good,
indudmg 2.9% m 1999 ro$13.5
per 1,000 cubic feet; and the board
wif( ra�se rates by an esximaced
2.1% in f�scal 2000. Retail rates, at
�169 per year for 1,000 cubic feet
(or 7,500 galfons) per mon[h
consumption, are favorabte when
compared to other medium-s¢ed
metropolitan systems.
Finances/Capital Impravement Plan
Sc. Paul's wacer syscem
operares under a rolling 10-year
CIP, which �dennfies capital needs
chroughoutthesyscem and
esnmates the timmg, cost, and
funding of pro�ects. The 1999-
2009 CIP indicates that capital
needs will remain manageable and
will be largely funded with
rewrcing opecanng revenues. The
CIP's mam focus wd( be to �mprove
che qual�ry of water. The $107
million CIP mcludes $78 mil(ion of
recurrmg funds and S29 milLon in
debt m be issued in three-year
mcrements. The bfmnesota stare
revolving fund may be used for
projects chat qualify for such low-
cost funding. Ma7or capital items
anticipated for the.nex[ five years
include:
• Geographic Information
Systems (GIS) conversion,
• Improvements co sfudge fields
and condmts, and
• Projec¢ related m the
consohdation of the
distrfbunon and busmess
divis�ons.
oo-aa�
Page 3
.. .�a u
Springsted, Inc.
. . �
�� - 3a7
MOODY'S ASSIGNS AA2 RgT=NG TO SAINT PAUL, 7�7 $8�035,000 WATER REVgp7Ug EpNDS,
SERIES 2000C _
$16.195 MILL20N DEET 9FFECTED
St. Paul (City of) ZR77
Water/Sewer
Mi,nnesota
Moody's Rating
Issue
- Rating
Water Revenue Bonds, Series 2000C Aa2
Sale Aiaount $8,035,000
Expected Sale Date 04/OS/00
Rating Description Water Revenue Bonds
NEW YORK, March 30, 2000 -- Moody+$ �S a,ggigaed a Aa2 rating H,nd stable
outlook to the City o£ St. Paul, M�7 Water Revenue Boads,:Series 2000C. The
bonds, which are secured by the net revenues of the city+s water utility, will
provide financing for varioua improvements iacluding added admi.niatrative
space at the expanded treatment plant. The Aa.2 rating is baeed on the water
system�s strong financial operations, stable service area, and mana.geable, ten
year capital program.
Moody•s expects continuation oP souad system financea and favorable debt
service coverage. Steady rate increaees have consiatently produced more than
two and a ha1P times annual debt service coverage oP both water revenue bonds
and Public Facitilites Authority <PFA) general obligation aad revenue loans.
Peak debt service coverage on all outstanding obligations and the currently
offered issue is 2,31 times based on actual 1998 net system revenues;
preliminary 1999 net revenues would result in coverage of 3.0 times peak. The
utility•s strategic plan targets annual rate increases at levels below
intlation. A rate increase, though, may not be needed Por the year 2001
because the combination of coat controls and a reduction in the number of
employees have resulted in operational savings. The utility has recently
acquired, since January 1998, the water utility syatems of three suburban
retail customers: Maplewood, Falcon Heights and Lauderdale. The agreement for
these acquisitions includea a five year plan to reduce their rates to the city
of St. Paul's level - about a 20% reduction. Cost controls have allowed the
utility to absorb the revenue reduction and keep rate increases below the
level of inflation. The utility is seeking to diversify its revenue stream to
compensate £or its limited growth potential; currently about 13% of the
revenues are not related to the saZe of water.
The system service area is stable. The St. Paul Regional Water Services serves
slmost 400,00o people living in the City oP St. Paul and eight suburban
communities as well as portions of four additional suburbs. Account levels
have trended slowly upward over the last five years, but potential is limited;
estimates are that there is room for another 500 homes in the two suburbs
served which are not fully developed. St. Paul, the state•s capital and second
largest city, is a mature city with an economic base which includes sizable
government, higher education and medical aervices sectors. As with other
older, urban cities, St. Paul had shown signs of eeonomic stress in recent
years; these are being addressed by the city's successful revitalization
efforts.
The system�s capital pragram is manageable with existing resources and
borrowing capacity. The ten year capital plan totals $102.3 million dollars;
$7s.� million will be funded from rates-derived monies on hand and �he balance
from revenue bonds. After this sale another $8 million in water rey_enue bonds
is expected to be sold in 2003 and 2006. The current issue provide� $3,g
million in funding Por the non-process portion of the treatment plant upgrade;
the balance of the bond proceeds will finance a variety of projects which
include two new pumps, a new tank and new screens at river intakea.
Approximately $2 million for one small project relating to the plant upgrade
will remain and is expected to be addressed in 2003.
KEY STATISTICS:
Number of retail accounts: 93,477
Operating ratio (1999 prelim): 70.9%
Debt service coverage (rev, obligations only, 1999 prelim): 3.o x
Debt service coverage (rev, and G.o, obligationa, 1999 prelim): 2.76x
Peak debt service.coverage: 3.0 x
Debt ratio (projected incl. new iasue): 6.1R
Payout of principal, all obligations C10 years): 56.S:L
ANALYSTS:
, Public Finance Group, Moody's Investors Service
CONTACTS:
Journalists: <212) 553-0376
Research Clients: (212) 553-1625