05-204�nr��� /l����ti y, adds
Gouncil File # as- �oy
GreenSheet# 30253b9
RESOLUTION
ClTY OF SAINT PAUL, MINNESOTA
Presented By.
Referred
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ACCEPTING PROPOSAL ON SALE OF
$11,380,000 WATER REVENUE
BONDS, SERIES 2005D, AND PROVIDING FOR
THEIR ISSUANCE
6 WE�EREAS, the Director, Office of Financial Services, has presented proposals
7 received for the sale of $11,380,000 Water Revenue Bonds, Series 2005D (the "Bonds" or "2005
8 Bonds"), of the City of Saint Paul, Minnesota (the "City"); and
9 WI3EREAS, the proposals set forth on Schedule A attached hereto were received
10 pursuant to the Terms of Proposal at the offices of Springsted Tncorporated at 11:00 A.M.,
11 Ceniral Tiane, this same day; and
12 4VFIEREAS, the Director, Office of Financiai Services, has advised this Council
13 that the proposal ofGt��� � � I X�rk�as`found to be the most advantageous and has
14 recommended that said proposal be accepted; and
IS
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WHEREAS, there are currently outstanding bonds of the City payabie from Net
Revenues of the City's Water Utility, spec3fically the City's (a) $7,000,000 Water Revenue
Refunding Bonds, Series 1997C (the "1997 Bonds"}, issued pursuant to a resolution adopted by
this Council on June i l, 1947, ofwhich $3,160,000 remain outstanding (b) $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 $12,410,000 is outstanding, (c) $8,035,000 Water Revenue Bonds,
Series 2000 (the °2000 Bonds"), issued pursuant to a resolution adopted Apri15, 2000, of which
$7,200,000 is outstanding, and (d) $10,650,000 Water Revenue Boncis, Series 2003C (the "2003
Bonds"), issued pursuant to a resolution adopted February 26, 2003, of which $9,825,000 is
outstanding; and there is currently outstand'ang a general obligation note of the City payable on a
subordinate lien basis from Net Revenues of the City's Water Utiliry, specifically the City's
$4,269,844 General Obligation Wastewater Treatrnent Water Revenue Note of 1996 (the "1996
Note"), issued pursuant to a resolution adopted by this Council on May 15, 1996, of which
$2,946,242 remains outstanding; and the 1997 Bonds refunded bonds issued in 1994, all of
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1 which have been retired (the "1994 Bonds"); and certain honds issued in 1993 (the "1993
2 Bonds") have been retired; and
3 WHEREAS, it is necessary and desirable to provide for the issuance of the Bonds
4 on a parity of lien with the 1997 Bonds, 1998 Note, 2000 Bonds and 2003 Bonds, to finance the
5 acquisition and construction of various improvements (the "ProjecY') to the City's municipal
6 water utility (the "Water Utility"), including water fiitrafion unprovements to the water treatment
7 infrastructure in order to enhance control of water tasfe and odar, which has since its acquisition
8 in 1885 been under the jurisdiction of the Board of Water Commissioners (the "Boazd"); and
9 WHEREAS, paragraph 18 of the resolution authorizing the issuance and sale of
10 the 2003 Bonds provides for the issuance of parity lien bonds as follows:
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"18. Paritv Bonds. The 1997 Bonds, 1998 Note, 2000 Eonds and 2Q03 Bonds
shall be a first charge and lien upon the Net Revenues of the Water Utility. No part of
such Net Revenues shall be pledged to the payment of any general obligation bonds
issued by the City while any 1997 Bonds, 199$ Note, 2000 Bonds or 2003 Bonds or
bonds issued on a parity therewith remain outstanding and undischuged, unless the
pledge of Net Revenues to such general obligation bonds is expressly made a second and
subsequent lien and the City and Boazd covenaxit to make the rates and charges of the
Water Utility sufficient to timely pay such general obligation bonds. No additional
revenue obligations payabie 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 parity of lien with the 2003 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 m�imum annual principal and interest coming due
theteafter 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 obligarions so
to be issued; provided fiulher, however, that if the annual Net Revenues in either or both
of the aforesaid two (2) compieted fiscal years shall be insufficient to meet this test then
any reasonably projected inerease in Net Revenues for the fiscal year immediately
following such second completed fiscal yeaz 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 appiying the foregoing test.
"For purposes of the foregoing limitafions, when only bonds issued after the 1994
Bonds aze outstanding, the "maYimum annual principal and intezest coming due
thereafter" on variable rate bonds shall be calculated assuming the variable rate bonds
bear &xed interest at the rates prevailing at the time of the calculation for utility revenue
bonds of comparable quality, maturity (or remaining maturity) and tasable or taY-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
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1 finding of and recited in the resolution of the City authorizing any such additional series.
2 In addition, the following conditions shall be met:
3 "(a) The payments required to be made (at the rime of the issuance of
4 such parity lien bonds) into the various funds and accounts provided for in tlus
5 resolution have been made.
6 "(b) All such parity lien bonds shall have a December 1 mahuity or
7 mariuities and shall have semiannuai interest payments on Iune 1 and December 1
8 in each yeaz; provided that interest payxnents may be more frequent than
9 semiannually or on dates other than June 1 and December i if such interest is paid
10 in full only if at the time of payment the interest deposits into the Revenue Bond
11 Debt Service Account for interest payments on June 1 or December 1, as
12 appropriate, on other bonds are current, and any insufficiency of interest on ali
13 parity bonds is allocated proportionately in each six-month period ending June 1
14 or December 1, as appropriate.
15 "(c) The proceeds of such parity lien honds shall be used only for the
16 purpose of (1) making improvements, addifions, extensions, renewals or
17 replacements to the Water Utility, and capitalizing interest or establishing
18 Reserves and paying the costs of such financing, or (2) refunding parity lien
i 9 bonds (provided that bonds which refund parity lien bonds may instead derive
20 their parity lien status from paragraphs 19 or 25 as applied in paragraph 20).' ; and
21 WF�REAS, for purposes of this resolution paragraphs 1 l, 18 and 18 of the
22 resolutions authorizing the issuance and sale of the 1997 Bonds, 1998 Note and 2000 Bonds aze
23 substantively idenfical to said paragraph 18 relating to the 2003 Bonds; and
24 WHEREAS, the Board and this Council deem it necessazy and expedient to
25 undertake the Project; and
26 WI3EREA5, herein the City makes various findings demonstrating the propriety
27 of the issuance of the Bonds on a parity with the 1997 Bonds, 199& Note, 2000 Bonds and 2003
28 Bonds and with a priority of lien over the 1996 Note; and
Z9 WFIEREAS, in accardance with advice received from the Board, this Council
30 finds, determines and declazes that it is necessary and expedient to provide moneys to finance the
31 Project, confinue a Reserve previously estabiished, and provide for the costs of the issuance of
32 the Bonds from the proceeds of bonds payable solely from the Net Revenues of the Water
33 Utility; and
34 WHEREAS, the City has heretofore issued registered obligations in certificated
35 forsn, and incurs substantial costs associated with their printing and issuance, and substantial
36 continuing transaction costs relating to their payment, h and exchange; and
37 WHEREAS, the City has detennined that significant savings in transaction costs
38 will result from issuing bonds in "global book-entry form", by which bonds are issued in
39 certificated form in large denominations, registered on the books of the City in the name of a
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depository or its nominee, and held in safekeeping and 'unmobilized by such depository, and such
depository as part of the computerized national securifies ciearance and settlement system (the
"National System") registers transfers of ownezsiup 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 ownezs of 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
8 WHEREAS, 'Participants" means those financial insritutions for whom the
9 Depository effects book-entry transfers aud pledges of securities deposited and immobilized with
10 the Depository; and
11 WIiEREAS, The Depository Trust Company, a limited purpose hust company
12 organized under the laws of the State of New York, or any of its successors or successors to its
13 functions hereunder (the "Depository"), will act as snch depository with respect to the Bonds
14 except as set forth below, and the City has heretofore delivered a letter of representations (the
15 "Letter of Representations") setting forth various matters relating to the Depository and its role
16 with respect to the Bonds; and
17 WHEREAS, the City wili deliver the Bonds in the form of one certificate per
18 maturity, each representing the entire principal amount of the Bonds due on a particular maturity
19 date (each a"Global Certificate"), which single certificate per maturity may be transferred on the
20 City's bond register as required by the Uniform Commercial Code, but not exchanged for smaller
21 denominarions unless the City determines to issue Replacernent Bonds as provided below; and
22 WFIEREAS, the City will be able to repiace the Depository or imder certain
23 circumstances to abandon the "global book-entry form" by pernutting the Global Certificates to
24 be exchanged for smailer denominations typicai of ordinary bonds registered on the City's bond
25 register; and "Replacement Bonds" means the certificates representing the Bonds so
26 authenricated and delivered by the Bond Registrar pursuant to paragraphs 6 and 12 hereof; and
27 WHEREAS, "Holder" as used herein means the person in whose name a Bond is
28 registered on the registration books of the City maintained by the registraz appointed as provided
29 in paragraph 8(the "Bond Registrar"); and
30 WF3EREAS, pursuant to Minnesota Statutes, Section 475.60, Subdivision 2(9),
31 public sale requirements do not apply to the Bonds, because the City has retained an independent
32 financial advisor and this Council has determined to sell the Bonds by private negotiation, and
33 the City has iustead authorized a competitive saie without publication of notice thereof as a form
34 of private negotiation; and
35 WHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits
36 "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to
37 provide certain conrinuing disclosure with respect to the Bonds; and
38 VJF3EREAS, proposals for the Bonds have been solicited by Springsted
39 Incorporated pursuant to an Official Statement and Terms of Proposal therein:
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NOW, THEREFORE, BE Tt RESOLVED by the Council of the City of Saint
Paul, Minnesota, as follows:
1. Acceptance of Proposai. The proposal of Citigroup Global Markets Inc.
(the "Purchaser") to purchase $11,380,000 Water Revenue Bonds, Series 2005D, of the City (the
"Bonds" or "2005 Bonds", or individually a"Bond" or "2005 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 $11,269,890.05, 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 desi�ee, is d'uected to retain the deposit of the Purchaser and to forthwith return to the others
making proposals their good faith checks or drafts.
2. Title: Ori�inal Issue Date; Denominations• Maturities. Tt�e Bonds shall be
titled "Water Revenue Bonds, 5eries 2005A", sha11 be dated March 15, 2005, as the date of
original issue and shall be issued forthwith on or a8er 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
multipie Yhereof of a singie maturity. The Bonds shall mature on December 1 in the years and
amounts as follows:
Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
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$100,000
445,000
455,000
A65,000
475,000
490,000
505,000
520,000
535,000
Year
2014
2015
2016
2017
2018
2020
2022
2024
Amount
$ 555,000
575,000
595,000
615,000
640,Q00
1,355,000
1,465,000
1,59Q000
3. Purpose. The Bonds shall provide funds for the acquisition and
construcrion 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 a11 costs enumerated in
Minnesota Statutes, Section 475.65, inciuding legal and other professional charges, publicarion
and printing costs, interest accruing on money bonowed for the Project befare the collecrion 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 least equal
to the amount of the Bonds. The City covenants that it shall do ali things and perform ali 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 payabie semiannually on June 1
and December 1 of each year (each, an "Interest Payment Date"), commencing December 1,
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2005, calculated on the basis of a 360-day yeaz of twelve 30-day months, at the respecrive rates
per annum set forth opposite the maturity years as follows:
3 Maturity Year
4
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10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
2005
2006
2007
2008
2009
2010
2011
2012
2013
Interest Rate
3.000°l0
3.000
3.000
3.000
3.250
3.500
3.750
4.000
4.OQ0
Maturitv Yeaz
2014
2015
2016
2017
2018
2020
2022
2024
Interest Rate
4.000%
A.000
4.000
4.100
4125
4.250
4.250
4.300
5. Descrintion of the Global Certificates and Global Book-Entry Svstem.
Upon their original issuance the Bonds will be issued in the form of a single Global Certificate
for each maturity, deposited with the Depository or its agent by the Purchaser and immobilized
as provided in paragraph 6. No beneficial owners of interests in the Bonds will receive
certificates representing their respecrive interests in tlie Bonds except as provided in paragraph 6.
Except as so provided, duriug 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
deaIers participating in the National System. The Depository's book eniries of beneficial
ownership interests are authorized to be in increments of $5,000 of principal of the Bonds, but
not smaller increments, despite the lazger authorized denominarions 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 accarding to the laws
and nales governing it will receive and forward payments on behalf of the beneficial owners of
the Glohal Certificates.
31 Payment of prSncipal of, premium, if any, and interest on a Global Certificate may
32 in the City's discretion be made by such other method of transferring funds as may be requested
33 by the Aolder of a Global Certificate.
34 6. Immobilization of Global Certificates b t� he De�ository� Successor
35 Depositor�Replacement Bonds. Pursuant to the request of the Putchaser to the Depository,
36 which request is required by the Terms of Proposal, immediately upon the original delivery of
37 the Bonds the Purchaser will deposit the Global Certificates represenring aii of the Bonds with
38 the Depository or its agent. The Global Certificates shall be in typewritten forxn ar othenuise as
39 acceptable to the Depository, shall be registered in the name of tt�e Depository or its nominee
40 and shall be heid immobilized from circulafion at the offices of the Depository on behalf of the
41 Purchaser and subsequent bondowners. The Depository or its nominee will be the sole holder of
42 record of the Global Certificates and no investor or other party purchasing, selling or otherwise
43 transferring ownership of interests in any Bond is to receive, hold or deliver any bond certificates
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1 so long as the Depository holds the Global Certificates immobilized from circularion, except as
2 provided below in this pazagraph and in paragraph 12.
3 Certificates evidencing the Bonds may not after their original delivery be
4 transfesed or exchanged except:
(i) ilpon registration of transfer of ownership of a Global Certificate, as
provided in paragraph 12,
7 (Si) To any successor of the Depository (or its nominee) or any substitute
8 depository (a "substitute depository") designated pursuaat to ciause (iii} of this
9 subparagraph, provided that any successor of the Depository ar any substitute depository
10 must be both a"clearing corporation" as defined in the Miuuesota Uniform Commercial
11 Code at Minnesota Statutes, Section 336.8-102, and a qualified and registered "clearing
12 agency" as provided in Section 17A of the Securiries Exchange Act of 1934, as amended,
13 (iii) To a subsfitute depository designated by and acceptable to the City upon
14 (a) the determinafion by the Depository that the Bonds shall no longer be eligible for its
15 depository services or (bj a determinarion by the City that the Depository is no longer
16 able to cany out its functions, provided that any substitute depository must be qualified to
17 act as such, as provided in clause (ii) of tlus subparagraph, or
i$ (iv) To those persons to whom transfer is requested in written transfer
19 instrucfions in the event that:
2� (a) the Depository shall resign or discontinue its services for the Bonds and
21 the City is unable to locate a substiiute depository within two (2) months following the
22 resignation or determination of non-eligibility, or
23 (b) upon a determination by the City in its sole discretion (1) that the
24 continuation of the book-entry system described herein, which precludes the issuance of
25 certificates (other than Global Certificates) to any Holder other than the Depository (or its
26 nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2)
27 that it is in the best interest of the beneficial owners of the Bonds that they be able to
28 obtain certificated bonds,
29 in either of which events the City shall notify Holders of its determination and of the
30 availability of cerhificates (the "Replacement Bonds") to Holders requesting the same and
31 the registration, transfer and exchange of such Bonds will be conducted as provided in
32 paragraphs 9B and 12 hereof.
33 In the event of a succession of the Depository as may be authorized by this
34 paragaph, the Bond Registraz upon presentation of Global Certificates shall register their
35 transfer to the substitute or successor depository, and the substitute or successor depository shall
36 be treated as the Depository for all purposes and functions under this resolution. The Letter of
37 Representations shall not apply to a substitute or successor depository unless the City and the
38 subsritute or successor depository so agree, and a similar agreement may be entered into.
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7. Redem�tion.
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(a) Optional Redempfion. All Bonds maturing after December 1, 2014, shali be
subject to redempfion 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 redemprion is in part, those Bonds remaining unpaid may be
prepaid in such order of mahuity and in such amount per maturity as the City shall determine
(treating amounts scheduled for mandatory redemption as maturiries); and if only part of the
Bonds having a common maturity date aze 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 lot by the Bond Registrar.
11 (b) Scheduled Mandatorv Redemption. Term Bonds matiuing in the year 2020 are
12 subject to redemprion and prepayment on December 1, 2019, at a price of par plus accrued
13 interest, without premium, in the amount set forth below:
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25
26
27
28
29
30
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Year
2019
2020
Term Bonds maturing in the year 2022 are subject to redemption and prepayment on December
1, 2021, at a price of par plus accrued interest, without premium, in the amount set forth below:
Year Amount
2021 $720,000
2022 745,000 (Maturity)
Term Bonds maturing in the year 2024 aze subject to redemption and prepayment on December
1, 2023, at a price of par plus accrued interest, without premium, in the amount set forth below:
Year
2023
2024
(c) Due Date. 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 afCer the
redemption date.
Amount
$665,000
690,000 (Maturity)
Amount
$780,000
810,000 (Maturity)
35 (d) Notation on Global Certificate. Upon a reducfion in the aggregate principal
36 amount of a Global Certificate, the Hoider may make a notation of such redemprion on the panel
37 provided on the Global Certaficate stating the amount so redeemed, or may return the Global
38 Certificate to the Bond Registrar in exchange for a new Global Certificate authenticated by the
39 Bond Registrar, in proper principal amount. Such notation, if made by the Holder, shall be for
40 reference only, and may not be relied upon by any other person as being in any way
41 determinarive of the principal amount of such Global Certificate outstanding, unless the Bond
42 Registrar has signed the appropriate column of the panel.
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(e) Selecrion of Replacement Bonds. To effect a partial redemption of Replacement
Bonds having a common maturity date, the Bond Registrar prior to giving norice 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 Replacemenf Bonds to which were assigned
numbers so 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.
(� Partial Redempfion of Renlacexnent Bonds. If a Replacement Bond is to be
redeemed only in part, it shall be sunendered to the Bond Registrar (with, if the City or Bond
Registrar so requires, a written instnuuent of transfer in form satisfactory to the City and Bond
Registraz duly executed by the Holder 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
de]iver to the Holder of such Replacement Bond, without service charge, a new Replacement
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 Hoider, in aggregate principai
amount equal to and in exchange for the unredeemed portion of the principal of the Bond so
surtendered.
22 (g) Request for Rademption. The Bond Registrar shall cali Bonds for redemption and
23 payment as herein provided upon receipt by the Bond Registrar at least forty-five (45} days prior
24 to the redemption date of a request of ttie City, in written form if the Bond Registrar is other than
25 a City officer. Such request shall specify the principal amount of Bonds to be called for
26 redemption and the redemp6on date.
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(h) 1Votice. Mailed notice of redemption shali be given to the paying agent (if other
than a City officer) and to each affected Holder. If and when the City shall ca11 any of the Bonds
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 shail be given by first class mail, postage prepaid,
mailed not less than thirty (30} days priar to the redemption date, to each Holder of Bonds to be
redeemed, at the address appearing in the Bond Register. All notices of redemption shall state:
(i)
(ii)
The redemption date;
The redemption price;
36 " (iii) If less than a11 outstanding Bonds are to be redeemed, the identification
37 (and, in the case of partial redemption, the respective principal amounts) of the Bonds to
38 be redeemed;
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(iv) That on the redemption date, the redemprion price will become due and
payable upon each such Bond, and that interest thereon shall cease to accrue from and
after said date; and
4 (v) The place where such Bonds are to be surrendered for payment of the
5 redemption price (which shall be the office of the Bond Registrar).
6 (i) Notice to Denository. Norices to The Depository Trust Company or its nominee
7 shall contain the CITSIP numbers of the Bonds. If there are any Holders of the Bonds other than
8 the Depository or its noruinee, the Bond Registrar shall use its best efforts to deliver any such
9 notice to the Depository on the business day next preceding the date of mailing of such nofice to
10 ail other Holders.
i l 8. Bond Reeistraz. U.S. Bank National Association in Saint Paul, Minnesota,
12 is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond
13 Registrar"), and shall do so unless and untii a successor Bond Registraz is duly appointed, all
14 pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith.
15 A successor Bond Registrar shall be an officer of the City or a bank or hust company eligible for
16 designation as bond registrar pursuant to Minnesota Statutes, Chapter 475, and may be appointed
17 pwsuant to any contract the City and such successor Bond Registrar shall execute which is
18 consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a
19 succassor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the
20 Holders (or record holders} of the Bonds in the manner set forth in the forms of Bond and
21 paragraph 14 of ttris resolution.
22 9. Forms of Bond. The Bonds shall be in the form of Giobal Certificates
23 unless and until Replacement Bonds are made available as provided in paragraph 6. Each form
24 of bond may contain such additaonai or different terms and provisions as to the form of payment,
25 record date, notices and other matters as are consistent with the Letter of Representations and
2b approved by the City Attorney.
27 A. Global Certificates. The Global Certificates, together with the Certificate of
28 Registration, the Register of Partial Payments, the form of Assignment and the registration
29 information thereon, shall be in substanrially the following form and may be typewritten rather
3Q thanprinted:
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LTNITED STATES OF AMERICA
2 STATE OF MINNESOTA
3 RA.MSEY COUNTY
4 CTfY OF SAINT PAUL
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INTEREST
RATE
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WATER REVENUB
BOND, SERIES 2005D
MATURITY DATE OF
DATE ORIGINAL ISSUE
December 1, _ March 1 S, 2005
REGISTERED 04VNER:
PRINCIPAL AMOUNT:
CUSIP
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KNOW ALL PERSON5 BY THESE PRESENTS that the City of Saint Paul,
Ramsey County, Minnesota (the "Issuer" ar"City"), certifies that it is indebted and £or 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 matmity date specified above, unless called
for eazlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of
each year (each, an "Intexest Payment Date"), commencing December 1, 2005, 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
Registraz"), acting as paying agent, or any successor paying agent duly appointed by the Issuer;
provided, however, that upon a partial redemption of tlus 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 redemprion, stating the amount so redeemed, or
may return the Bond to the Bond 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 determinative of the principal amount of this Bond
outstanding, unless the Bond Registrar has signed the appropriate column of the panel. Interest
on this Bond will be paid on each Interest Payment Date in same-day funds by 230 p.m., Eastern
time, to the person in whose name this Bond is registered (the "Holder" ar"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
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Interest Payment Date (the "Regular Record Date"}. Interest payments shall be received by the
Holder no later than 230 p.m., Eastern time; and principal and premium payments shall be
received by the Hoider no later than 230 p.m., Eastem time, if the Bond is surrendered for
payment enough in advance to permit payment to he 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") fiYed by the Bond Registraz whenever money becomes
available for payment of the defaulted interest. Norice 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 United States of
America.
12 Date of Pavment Not Business Dav. If the date for payment of the principal of,
13 premium, if any, or interest ott this Bond sha11 be a Saturday, Sunday, legal holiday or a day on
14 which banking institutions in the City of New York, New York, or the city where the principal
15 office ofthe Bond Registrar is located aze authorized by law or executive arder to close, then the
16 date for such payxnent shall be the next succeeding day which is not a Saturday, Sunday, legal
17 holiday or a day on which such banking institufions are authorized to close, and payxnent on such
18 date shall have the same force and effect as if made on the nominal date of payment.
19 Optional Redemprion. All Bonds of this issue (the "Bonds") maturing after
20 . December 1, 2414, are subject to redemprion and prepayment at the opfion of the Issuer on such
21 date and on any day thexeafter at a price of par plus accrued interest. Redemption may be in
22 whole ar in part of the Bonds subject to prepayment. If redemption is in part, those Bonds
23 rexnaining unpaid may be prepaid in such arder of maturity and in such atnount per maturity as
24 the City sha11 determine (treating amounts scheduled far mandatory redemption as maturifies);
25 and if only part of the Bonds having a common maturity date are called for prepayment, this
26 Bond may be prepaid in $5,000 increments of principai.
2? Scheduled Mandatorv Redem tp ion. The Bonds maturing in the year 2020 sha11 be
28 redeemed and prepaid on December 1, 2019, at a price of par plus accrued interest, without
29 premium, in the amount set forth below:
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Year
2019
202Q
Amount
$665,000
690,000 {Maturity}
33 The Bonds maturing in the year 2022 shall be redeemed and prepaid on December 1, 2021, at a
34 price ofpat plus accrued interest, without premium, in the amount set forth below:
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Yeaz
2021
2022
Amount
$720,000
745,000 (Maturity}
38 The Bonds maturing in the year 2024 shall be redeemed and prepaid on December i, 2023, at a
39 price of paz plus accrued interest, without premium, in the amount set forth below:
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2023
3 2024
Amount
$780,000
810,000 (Maturity)
4 Due Date. Bonds ar portions thereof called for redemption shall be due and
5 payable on the redemption date, and interest thereon shall cease to accrue from and after the
6 redemption date.
7 Nofice ofRedemption. Mailed notice ofredemption shall be given to the paying
8 agent (if other than a City officer) and to each affected Holder of the Bonds. In the event any of
9 the Bonds are called for redemption, written notice thereof will be given by first class mail
10 mailed not less than tlurty (30) days prior to the redemption date to each Holder of Bonds to be
11 redeemed. In connection with any such notice, the °CUSIP" nuxnbers assigned to the Bonds
12 shall be used.
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Reolacement or Notation of Bonds after Partial Redemntion. Upon a partial
redemption of this Bond which results in the stated amount hereof being reduced, the Holder
may in its discrerion 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 determinative of the principai
amount of the Bond outstanding, uniess 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 attomey dnly
authorized in writing) and the Issuer shail execute (ifnecessary) and the Bond Registrar shall
authenficate and deliver to the Holder of such Bond, without service chazge, 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 far the unredeemed portion of the
principal of the Bond so surrendered.
Issuance; Purpose; Snecial Obli�ation. This Bond is one of an issue in the total
principal amount of $11,380,000, 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 full conformity with the Consritution and laws of the State of Minnesota and
the Charter of the Issuer, and pursuant to a resolufion adopted by the City Council of the Issuer
on March 9, 2005 (the "Resolution"), 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 U61ity of the Issuer. The Bonds and the interest thereon are payable solely and
exclusively from the Net Revenues of the Water Urility of the Issuer pledged to the payment
thereof, and do not consritute 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 tlxe State of Minnesota, subject to the provisions
of the Resolution. The Bonds of this issue, together with the Water Revenue Refunding Bonds,
Series 1947C, issued in the principal amount of $7,000,000, Water Revenue Note of 1998, issued
in the principal amount of $16,500,000, Water Revenue Bonds, Series 2000C, issued in the
principal amount of $8,035,000, and Water Revenue Bonds, Series 2003C, issued in the principal
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1 amount of $10,650,000, are a first and prior lien upon the Net Revenues of the Water Utility of
2 the 7ssuer, except that the Issuer is authorized under certaiu conditions to issue additional
3 revenue obligarions on a parity of lien with these Bonds, all as provided in the Resolution.
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Action bv Holders. The Holders of twenty percent (20%) 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 ail of the covenants and duries specified in the
Resolution to be perfozmed by the Issuer or the Board of Water Commissioners or their officers
and agents; provided, however, that nothing shall affect or unpair 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 Bonds.
Denominarions; 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 for Replacement Bonds if
then available. Replacement Bonds, if made available as provided below, are issuable solely as
fully regstered bonds in the denominations of $5,000 and integral mulriples theraof of a single
maturity and are exchangeable for fu11y reastered Bonds of other authorized denominations in
equai aggregate principal amounts at the principal office of the Bond Registrar, but only in the
manner and subject to the limitations pravided 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 aze on file in the principal office of the Bond Registrar.
that:
Replacement Bonds. Replacement Bonds may be issued by the Issuer in the event
28 (a) the Depository shali resign or discontinue its services for the Bonds, and
29 only if the Issuer is unable to locate a substitute depository within two (2) months
30 following the resi�ation or determination of non-eligibility, or
31 (b) upon a determinafion by the Issuer in its sole discretion (1) that the
32 continuation of the book-entry system described in the Resolution, which precludes the
33 issuance of certificates (other than Global Certificates) to any Holder other than the
34 Depository (or its nominee), might adversely affect the interest of the beneficial owners
35 of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that
36 they be able to obtain certificated bonds,
37 Transfer. fihis Bond shall be registered in the name of the payee on the books of
38 the Issuer by presenting this Bond for registration to the Bond Registraz, who wili endorse his,
39 her or its name and note the date of registration opposite the name of the payee in the certificate
40 of registration attached hereto. Thereafter this Bond may be transfened by delivery with an
41 assignment duly executed by the Holder or his, her or its legal representatives, and the Issuer and
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1 Bond Regisirar may treat the Holder as the person exclusively entitled to exercise all the rights
2 and pawers of an owner until this Bond is presented with such assigunent for registration of
3 iransfer, accompanied by assurance of the nature provided by law that the assignment is genuine
4 and effective, and unril such transfer is registered on said books and noted hereon by the Bond
5 Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable
6 regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar.
7 Transfer of this Bond may, at the d'uecrion and expense of the Issuer, be subject to certain other
8 restrictions if requized to qualify this Bond as being "in registered form" within the meauing of
9 Secfion 149(a) of the federal Intemal Revenue Code of 1986, as amended.
10 Fees unon Transfer or Loss. The Bond Registrar may require payment of a sum
11 sufficient to cover any tax ar other governmental charge payable in connection with the transfer
12 or exchange of this Bond and any legal or unusual costs regazding transfers and lost Bonds.
13 Treatment of Registered Owner. The Issuer and Bond Registrar may treat the
14 pexson in whose name this Bond is registered as the owner hereof for the purpose of receiving
15 payment as herein provided (except as othenvise provided with respect to the Record Date) and
16 far all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the
17 Bond Registrar shall be affected by notice to the contrary.
18 Authentication. This Bond shall not be valid or become obligatory for any
19 purpose or be entitled to any security unless the Certificate of Authentication hereon shall have
20 been executed by the Bond Regisri
21 Not Oualified Tax-Exempt Oblieations. The Bonds have not been designated by
22 the Issuer as"qualified taY-exempt obligations" for purposes of Section 265(b}(3) of the federal
23 Internal Revenue Code of 1986, as amended. The Bonds do not qualify for such designation.
24 IT IS HEREBY CERTIFIED t1I3ll RECITED that all acts, conditions and things
25 required by the Constitufion and laws of the State of Minnesota and the Charter of the Issuer to
26 be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been
27 done, have happened and have been performed, in regular and due form, time and manner as
28 required by law; that this Bond, together with all other debts of the Issuer outstanding on the date
29 of original issue hereof and on the date of its issuance and delivery to the original purchaser,
30 does not exceed any constitutional or statutory or Charter limitation of indebtedness; and that the
31 Issuer wiil establish rates and chazges for the water service fiunished by its Water Utility
32 sufficient in amount to promptly meet the principal and interest requirements of tlus issue.
33 IN WITNESS WF3EREOF, the City of Saint Paul, Ramsey County, Minnesota, by
34 its City Council has caused tttis Bond to be executed on its behalf by the photocopied facsimile
35 signature of its Mayor, attested by the photocopied facsimile signature of its Clerk, and
36 countersigned by the photocopied facsimile signature of its Director, Office of Financial
37 Services.
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Date of Registration_
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolufion
mentioned wit}un.
Bond Registrar
By
Authorized Signature
Water Revenue Bond, Series 2005D, No. R-
I139995v3
Registrable by:
Payable at:
CTTY OF SAINT' PALIL,
RAMSEY COLTNT'Y, MINNESOTA
Mayor
Attest:
Ciry Clerk
Countersigned:
Du Office of
Financial Services
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CE72Z'IFICATE OF REGISTRATION
The transfer of 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
REGISTRATIQN
REGISTERED OWNER
SIGNATURE OF
BOND REGISTRt1R
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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 belaw:
Signature of
Date Amount Bondholder
Signature of
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 af the attached Bond to the Bond Registraz, and
a Holder could fail to note the partial payment here.
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ABBREVIATIOI3S
The following abbreviations, when used in the inscription on the face of this Bond, shall be
conshued as though they were written out in fuli according to applicable laws or regulafions:
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
(State)
Transfers to Minors Act
Unifoxm
13 Additional abbreviations may also be used
14 though not in the above list.
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ASSIGNMENT
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For value received, the undersigned hereby sells, assigns and transfers unto
-� the
4 attached Bond and does hereby irrevocably constihxte and appoint
5 attorney to transfer the Bond on the books
6 kept for the registration thereof, with full power of substiturion in the premises.
7 Dated:
8 Notice: The assignor's signature to this assignment must
9 correspond with the name as it appeazs upon the face of
10 the attached Bond in every particulaz, without alteration
ll or any change whatever.
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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 Guazantor
Institution" as defined in 17 CFR 240.17Ad-15(a)(2).
The Bond Registrar will not effect transfer of this $ond unless the information
conceming 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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1 B. Replacement Bonds. If the City has notified Holders that Replacement
2 Bonds have been made available as provided in pazagraph 6, then for every Bond thereafter
3 transferred or exchanged (including an exchange to reflect the partial prepayment of a Global
4 Certificate not previously exchanged for Replacement Bonds) the Bond Regisiraz shall deliver a
5 certificate in the form of the Replacement Bond rather than the Global Certificate, but the Holder
6 of a Global Certificate shall not otherwise be required to exchange the Giobal Certificate far one
7 or more Replacement Bonds since the City recognizes that some beneficial owners may prefer
8 the convenience of the Depasitory's registered ownership of the Bonds even though the entire
9 issue is no longer required to be in global book-entry fozm. The Replacement Bonds, together
10 with the Bond Registrar's Certificate of Authenticarion, the form of Assi�nment and the
11 registrarion information thereon, sha11 be in substantially the following form, with paragraphs
12 identical to those of the form of Global Certificate stated by heading or initial text only:
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UI�IITED STATES OF t1MERICA
STATE OF MINNESOTA
RAMSEY COUNI'Y
4 CTfY OF SAINT PAUL
S
6 R-
7 WATER REVENUE
8 BOND, SERIES 2005D
0
INTEREST
RATE
MATURITY DATE OF
DATE ORIGINAL ISSUE
March 15, 2005
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REGISTERED OWNER:
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CUSIP
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KI30W ALL PERSONS BY THESB PRESENTS that the City of Saint Paul,
Ramsey County, Minnesota (the "Issuer" ar"City"), certifies that it is indebted and far 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 principai 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 l, 2005, at the rate per annum specified above (calculated on the basis of
a 360-day year of tweive 30-day months) unril the principal sum is paid or has been provided far.
This Bond wili 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 swrender hereof at the
principai office of , zn
(the "Bond Registrar"), acting as paying agent or any successar 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 Recard Date"). 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 Aolder 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 Speciai Recard 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 United States of
America.
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1 REFERENCE IS HEREBY MADE TO THE FURTI�IZ PROVISIONS OF
2 TE3IS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS S�IALL
3 FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH I3ERE.
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IT IS HEREBY CERTIFIED AND RECITED ....
5 IN WITI�ESS WHEREOF, the City of Saint Paul, Ramsey County, Mimiesota, by
6 its City Council has caused tlus Bond to be sealed with its official seai or a facsimile thereof and
7 to be executed on its behalf by the originai or facsimile signahue of its Mayor, attested by the
8 original or facsimile signature of its Cierk, and countersigned by the original or facsimile
9 signature of its Director, Offace of Financiai Services.
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Date of Registration:
BOND REGISTRAR'S
CERTIEICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentaoned
withiia.
Bond Registrar
By
Authorized Signature
(SEAL)
Registrable by:
Payable at: _
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
Mayor
Attest:
City Clerk
Countersigned:
Airector, O�ce of Financial Services
1739995v3 'z3
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�N REVERSE OF BOND
2 Date of Payment Not Business Day. ..
j Oprionai Redemption. All Bonds of this issue (the "Bonds") maturing after
4 December 1, 2014, are subject to redemption and prepayment at the option of the Issuer on such
5 date and on any day thereafter at a price of par plus accrued interest. Redemption may be in
6 whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds
7 remaining uupaid may be prepaid in such order of maturity and in such amount per mahuity as
8 the City shall determine; and if only part of the Bonds having a common maturity date are called
9 for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar.
10 Scheduled Mandatorv Redemption. . . .
11 Due Date . . .
12 Notice of Redemmption. . . .
13 Selection of Bonds for Redemption. To effect a partial redemption of Bonds
14 hauing a common mahxrity date, the Bond Registrar shall assign to each Bond having a common
15 maturity date a distincrive nusnber for each $5,000 of the principal amount of such Bond. The
16 Bond Registrar shall then select by lot, using such method of selecfion as it shall deem proper in
17 its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each
18 number, shall equal the principal amount of such Bonds to be redeemed The Bonds to be
19 redeemed shall be the Bonds to which were assigned numbers so selected; provided, however,
20 that only so much of the principal amount of such Bond of a denomination of more than $5,000
21 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected if a
22 Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the
23 Issuer or Bond Registrar so requires, a written inshument of transfer in form satisfactory to tlte
24 Issuer and Bond Registrar duly executed by the Holder thereof or his, her or its attorney duly
25 authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall
26 authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or
27 Bonds of the same series having the same stated maturity and interest rate and of any authorized
28 denominafion or denominations, as requested by such Holder, in aggregate principal amount
29 equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered.
30 Issuance: Purpose: Snecial Obliaation. ...
31 Action bv Holders. . . .
32 Denominations: Exchanee• Resolution. The Bonds are issuable solely as fully
33 registered bonds in the denominations of $5,000 and integrai multiples thereof of a single
34 maturity and are exchangeable for fixlly registered Bonds of other authorized denominations in
35 equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the
36 manner and subject to the limitafions provided in the Resolution. Reference is hereby made to
37 the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the
38 Resolution are on file in the principal office of the Bond Registrar.
1739995v3 2t{
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1 Transfer. This Bond is transferable by the Holder in person or by his, her or its
2 attorney duly authorized in writing at the principal office of the Bond Registrar upon
3 presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions
4 provided in the Resolution and to reasonable regulations of the Issuer contained in any
5 agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar
6 shail authenricate and deliver, in exchange for this Bond, one or more new fully, registered
7 Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar
8 designation), of an authorized denomivafion or denominarions, in aggregate principal aznount
9 equal to the principal amount of this Bond, of the same maturity and bearing interest at the same
10 rate.
11 Fees upon Transfer or I,oss. ...
12 Treahnent of Re�istered Owner. ...
13 Authentication . . .
14 Not Qualified TaY-Exemne Obli an tions.
15
ABBREVIATIONS . . . .
1739995d! 2$
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ASSIGNMENT
2 For value received, the undersigned hereby sells, assigns and transfers unto
3 the witUin Bond and does hereby inevocably
4 consfitute and appoint attomey to transfer the Bond on the books
5 kept for the registrafion thereof, with full power of substiturion in the pretnises.
6 Dated:
7 Notice: The assignor's signature to this assignment must
$ correspond with the name as it appears upon the face of
9 the within Bond in every particular, without alteration
10
1 l Signature Guaranteed:
12
or any change whatever.
13 Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm
14 having a membership in one of the major stock e;cchanges or any other "Eligible Guarantar
15 Institution" as defined in 17 CFR 240.17Ad-15(a)(2).
16 The Bond Registrar will not effect transfer of this Bond unless the information
17 concerning the transferee requested below is provided.
18 Name and Address:
19
2Q
21
22
(Include information for a11 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 forms of the Bonds, and be sealed with the seal of the City; provided, however, that
the seai of the City may be a printed or photocopied facsunile; and provided fiuther that any of
such signatures may be printed or photocopied facsimiles and the corporate seal may be omitted
on the Bonds as pernritted by law. In the event of disability or resignation or other absence of
any such officer, the Bonds may be signed by the manual or facsunile si�ature of that officer
who may act on behalf of such absent or 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 sigaature or facsimile shall nevertheless be valid and
sufficient for all purposes, the same as if he or she had remained in office until delivery.
1 l. Authenfication; Date of Re�istration. No Bond shali be valid or obligatory
for any purpose or be entitled to any security or benefit under tivs 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. Certificates of
Authentication on different 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 registrataon the
date of original issue, which date is Mazch 15, 2005. The Certificate of Authentication so
executed on each Bond sha11 be conclusive evidence that it has been authenticated and delivered
under this resolution.
24 12. Re�istration; Transfer; Exchange. The City wili cause to be kept at the
25 principai office of the Bond Registrar a bond register in which, subject to such reasonable
26 regulations as the Bond Registraz may prescribe, the Bond Registraz shali provide for the
27 registration of Bonds and the registration of transfers of Bonds entitled to be registered or
28 transfened as herein provided.
29 A Global Certificate shall be registered in the name of the payee on the books of
30 the Bond Registrar by presenting the Global Certificate for registration to the Bond Registrar,
31 who wi11 endorse his or her name and note the date of registration opposite the name of the payee
32 in the certificate of registration on the Global Certificate. Thereafter a Global Certificate may be
33 transfened by delivery with an assignment duly executed by the Holder or his, her or its legal
34 representative, and the City and Bond Registrar may treat the Holder as the person exclusively
35 entitled to exercise all the rights and powers of an owner until a Globai Certificate is presented
36 with such assignment for registration of transfer, accompanied by assurance of the nature
37 provided by law that the assignment is genuine and effective, and until such transfer is registered
38 on said books and noted thereon by the Bond Registraz, all suhject to the terms and conditions
39 provided in this resolution and to reasonable regulations of the City contained in any agreement
40 with, or notice to, the Bond Registrar.
41 Transfer of a Global Certificate may, at the direction and expense of the City, be
42 subject to other restrictions af required to qualify the Global Certificates as being "in registered
1739995v3 2,"]
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form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as
amended.
3 If a Global Certificate is to be exchanged for one or more Replacement Bonds, all
4 of the principal amount of the Global Certificate shall be so exchanged.
5 Upon surrender for transfer of any Replacement Bond at the principal office of
6 the Bond Registrar, the City shall execute (if necessary), and the Bond Regstraz shail
7 authenticate, insert the date of registration (as provided in paragraph 11) of, and deliver, in the
8 name of the designated transferee or transferees, one or more new Replacement Bonds of any
9 authorized denomination or denominarions of a like aggregate principal amount, having the same
10 stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond
11 may be registered in blank or in the name of "bearer" or similar designation.
12 At the option of the Holder of a Replacement Bond, Replacement Bonds may be
13 exchanged for Replacement Bonds of any authorized denomination or denominarions of a like
14 aggregate principa] amount and stated maturity, upon surrender of the Replacement Bonds to be
1 S exchanged at the principal office of the Bond Registrar. Whenever any Replacement Bonds are
16 so surrendered far exchange, the Ciry shall execute (if necessary}, and the Bond Registraz shall
17 authenticate, insert the date of registration of, and deliver the Replacement Bonds which the
18 Holder making the exchange is entitled to receive. Global Certificates may not be exchanged for
19 Global Certificates of smaller denominations.
2� All Bonds surrendered upon any exchange or transfer provided for in this
21 resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as
22 directed by the City.
23 All Bonds delivered in exchange for or upon transfer of Bonds sha11 be valid
24 speciai obligations of the City evidencing the same debt, and enUtled to the same benefits under
25 this xesolution, as the Bonds surrendered for such exchange or iransfer.
26 Every Bond presented or surrendered for transfer or exchange shall be duly
27 endorsed or be accompanied by a written insmunent of transfer, in form satisfactory to the Bond
28 Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in
29 writing.
30 The Bond Registrar may require payment of a sum sufficient to cover any tax or
31 other govemmental chazge payable in connection with the transfer or exchange of any Bond and
32 any legal or unusual costs regarding transfers and lost Bonds.
33 Transfers shail also be subject to reasonable regularions of the City contained in
34 any agreement with, or notice to, the Bond Registraz, including regulations which permit the
35 Bond Registrar to close its transfer books between recard dates and payment dates.
36 13. RiQhts Upon Transfer or Exchan�e. Each Bond delivered upon transfer of
37 or in exchange for ar in lieu of any other Bond shall carry all the rights to interest accrued and
38 unpaid, and to accrue, which were carried by such other Bond.
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14. Interest Payment: Record Date. Interest on any Globai 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 registrarion 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 (15th) day of the calendar month next preceding such Interest Payment Date (the
"Regulaz 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 shall 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 whettever money becomes available for payment of the defaulted
interest. Norice of tiae Special Record Date shall be given by the Bond Registrar to the Holders
not less than ten (10} days prior to the Special Record Date.
15. Holders; Treatrnent of Registered Owner; Consent of Holders.
lA (A) For the purposes of all acrions, consents and other matters affecting Hoiders of the
15 Bonds, other than payments, redemprions, and purchases, the City may (but sha11 not be
16 obligated to) treat as the Holder of a Bond the beneficia] owner of the Bond instead of the person
17 in whose name the Bond is registered. For that purpose, the City may ascertain the identity of
18 the beneficial ownex of the Bond by such means as the Bond Reo strar in its sole discretion
19 deems appropriate, including but not limited to a certificate from the person in whose name the
20 Bond is registered identifying such beneficial owner.
21 (B) The City and Bond Registrar may treat the person in whose name any Bond is
22 rea stered as the owner of such Bond for the purpose of receiving payment of principal of and
23 premium, if any, and interest (subject to the payment provisions in paragraph 14 above) on, such
24 Bond and for all other purposes wbatsoever whether or not such Bond shall be overdue, and
25 neither the City nor the Bond Registrar shall be affected by notice to the contrary.
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(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 shall be
conclusive in favor of the City with regard to any action taken by it under such request or other
inshument, namely:
34 (1) The fact and date of the execution by any person of any such writing may
35 be proved by the certificate of any officer in any jurisdiction who by law has power to
36 take aclrnowledgments within such jurisdiction that the person signing such writing
37 acknowledged before him the execution thereof, or by an affidavit of any witness to such
38 execution.
39 {2) Subject to the provisions of subparagraph (A) above, the fact of the
40 ownership by any person of Bonds and the amounts and numbers of such Bonds, and the
41 date of the holding of the same, may be proved by reference to the bond register.
1739995v3 'L9
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1 16. Delivery; Applicarion of Proceeds. The Globai Ceriificates when so
2 prepared and executed shaIl be delivered by the Director, Office of Financial Services, to the
3 Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the
4 proper application thereof.
5 17. Fund and Accounts. Far the convenience and proper admiuistration of the
6 proceeds from the sale of the 2005 Bonds and for the payment of principal of and interest on the
7 2005 Bonds, the Board of Water Commissioners Water Utility Enterprise Fund (the "Water
8 Urility Fund", heretofore in resolutions relating to the 1997 Bonds, 1998 Note, 2000 Bonds and
9 2003 Bonds also refened to as the "Water Utility Fund") heretofore created shali continue in
10 force and effect as a separate fund of the City and of the Boazd until all of tl�e 2005 Bonds are
11 fully paid and retired. Tn the Water Utility Fund there is hereby created a 2005 Construction
12 Account and in addition there are, and there shall continue to be, the following accounts:
13 (a) A"2005 Conshuction Account", to which shall be credited all proceeds of
14 the sale of the 2005 Bonds other than accrued interest and amounts in excess of
]5 $11,237,750. The 2005 Construction Account sha11 be used to pay the costs of the
16 Project, including all costs enumerated in Mimiesota Statutes, Section 475.65. The
17 moneys in the 2005 Conshuction Account shall be used solely for the purposes herein set
18 forth and for no other purpose, except that any surplus in the 2005 Construcrion Account
19 shall be deposited in the Revenue Bond Debt Service Account.
2� (b) An "Operation and Maintenance Account", into which shall be paid all
21 gross revenues and earniugs derived from the operation of the Water Utility system
22 including any assessments which may from time to time be levied with respect to the
23 Water Utility. From this account there shall be paid all, hut only, current expenses of
24 said system. Current expenses shall include the reasonable and necessary costs of
25 administering, operating, maintaining and insuring the system, salaries, wages, costs of
26 materials and supplies, costs of water production and distribution, necessary legal,
27 engineering and auditing services, and ali other items which, by sound accountiug
28 pracfices, consritute normal, reasonable and current costs of operation and maintenance,
29 but excluding any allowance for depreciarion, extraordinary repairs and payments into the
30 Revenue Bond Debt Service Account and Reserve Account. There shall at all times be
31 maintained in said account a reserve in an amount sufficient to cover the operation and
32 maintenance costs of the Water Utility system for the ensuing fifteen (1 S) day period;
33 neither said reserve nor any annual addirion thereto shall constitute "Net Revenues" as
34 defined below. The balance from time to time remaitung in the Operation and
35 Maintenance Account, including interest or other earnings received from the inveshnent
36 of any moneys in the Water Ufility Fund, after paying or providing for the faregoing
37 items, shall constitute, and are refened to in this resolution as, "Net Revenues".
38 Payments of fees t� trustees far bonds, to providers of liquidity facilities or credit
39 enhancement facilities for bonds and remarketing agents for bonds are also current
40 expenses.
41 (c) A"Revenue Bond Debt Service Account", into which there shall be
42 credited sale proceeds of the 2005 Bonds representing accrued interest and amounts in
43 excess of $11,237,750, and further into which there shall be credited and to which there is
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hereby irrevocably pledged from the Net Revenues of the operation of the Water Utility
system monthly commencing in April, 2005, a sum equal to at least 1Ji2 (in 2005, 1/8
through November as to the 2005 Bonds only) of the totai principal and interest on the
2005 Bonds and any other bonds issued on a parity therewith during the ensuing twelve
(12) months; provided, however, that no furthez payments need be made to said account
when the moneys held therein aze sufficient for the payment of all principal and interest
due on said bonds on and prior to the next maturity date. No money sha11 be paid out of
said account �cept to pay principal, premium, if any, and interest on the 2005 Bonds and
any other bonds which aze issued on a parity with the 2005 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 therefar aze 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 a11 of the bonds then outstanding. $844,378
from the Water Urility's retained eantings shall be deposited in the Reserve Account upon
the issuance of the 2005 Bonds, and amounts akeady in the Reserve Account pursuant to
the resolutions authorizing the issuance of the 1997 Bonds, 1998 Note, 2000 Bonds and
2043 Bonds shall be maintained therein upon the issuance of the 2005 Bonds to the
extent necessary to equal the axnount required to be maintained in the Reserve Account as
set forth below, being initially amounts required for the 1997 Bonds, 1998 Note, 2000
Bonds, 2003 Bonds and 2005 Bonds. Whenever the moneys in Yhe Reserve Account
exceed the amount required to be maintained in the Reserve Account as set forth below,
such excess may be transferred to the Revenue Bond Debt Service Account; and
whenever the moneys in the Reserve Account shall be less than said amount, the Reserve
Account shall be restored to said amount from the next available Net Revenues. The
amount required to be maintained in the Reserve Account shall be an amount equai to the
lesser of: (1) ten percent (10%) of the original principal amount of the 2Q05 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 mascimum principal and interest due in any
year on the bonds payable from the Revenue Bond Debt Service Account; and whenever
the moneys in the Reserve Account exceed such amount required to be maintained
therean, such excess may be transfened to the Revenue Bond Debt Service Account.
When only bonds issued after the 1994 Bonds (as defined in the resolution authorizing
the issuance of the 1997 Bonds, the "1994 Bonds") are outstanding, the "maximum
principal and interest due in any year" on variable rate bonds sha11 be calculated at such
tnne (far 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 vatiable rate bonds issued after such time) for utility
revenue bonds of comparable quality, maturity and tasable or tas-exempt status, provided
that other ar different assumptions may be used if necessary to obtain an investment
grade credit rating far the variable rate bonds or to maintain the credit rating(s) then in
effect for the bonds then outstanding.
31
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1 (e) Net Revenues in excess of those required for the foregoing purposes may
2 be used foz any proper purpose.
3 (fl The money in the Water Utility Fund shall be allotted and paid to the
4 various accounts herein established in the order in whicb said accounts aze listed on a
5 cumulafive basis, and if in any month the money in said accounts is insufficient to place
6 the required amount in any accounts, the deficiency sha11 be made up in the following
7 month or months after payment into all other accounts having a prior claim on said Net
8 Revenues have been made in full.
9 (g) All money held in the Revenue Bond Debt 3ervice Account and the
10 Reserve Account created by this resolurion shall be kept separate and apart from all other
11 municipal funds and accounts.
12 (h) Notwithstanding anything to the contrary herein, moneys in the Water
13 Utility Fund and any account thereof may be used to pay any rebate of excess arbitrage
14 eatnings on gross proceeds of the 1997 Bonds, 1498 Note, 2000 Bonds, 2003 Bonds and
15 2005 Bonds to be paid to the I3nited States in arder to maintain the exclusion from gross
16 income under Section 103 of the Code (as hereinafter defined) of the interest on the 1997
17 Bonds, 1998 Note, 2000 Bonds, 2003 Bonds and 2005 Bonds.
18 (i) Accounts created for bonds, notes or obligations with a lien on Net
19 Revenues subardinate to the lien of the 2005 Bonds shall be maintained and operated as
20 required by the resolutions authorizing the same.
21 (j) No portion of the proceeds of the 2005 Bonds shall be used directly or
22 indirectly to acquire higher yielding inveshnents or to replace funds which were used
23 directly ar indirectly to acquire higher yielding investments, except (1) for a reasonable
24 temporary period until such proceeds are needed for the piupose for which the 2005
25 Bonds were issued, (2) as part of a reasonably required reserve or repiacement fund not in
26 excess of ten percent (10%) of the proceeds of the 2005 Bonds (or in a higher amount
27 which the City establishes is necessary to the satisfaction of the Seeretary of the Treasury
28 of the United States), and (3) in addition to the above in an amount not greater than the
29 lesser of five percent (5%) of the proceeds of the 2005 Bonds or $100,000. To this effect,
30 any proceeds of the 2005 Bonds and any sums from 6me to time held in the 2005
31 Conshuction Account, Operation and Maintenance Account, Reserve Account or
32 Revenue Bond Debt Service Account (or any other City or Board account which will be
33 used to pay principai or interest to become due on the bonds payable therefrom) in excess
34 of amounts which under the federal arbitrage regulations may be invested without regard
35 to yield shall not be invested at a yield in excess of the applicable yield restrictions
36 imposed by said arbitrage regulations on such inveshnents after taking into account any
3? applicable "temporary periods", minor portion or reserve made available under the
38 federal azbitrage regulations. Money in the Water Utility Fund sha11 not be invested in
39 obiigations or deposits issued by, guaranteed by ar insured by the United States or any
40 agency or instrumentality thereof if and to the extent that such investment would cause
41 the 2005 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the
42 federal Internal Revenue Code of 1986, as amended (the "Code").
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18. Pari Bonds. The 1997 Bonds, 1998 Note, 2000 Bonds, 2003 Sonds and
2005 Bonds shall be a first chazge and lien upon the Net Revenues of the Water Ufility. No part
of such Net Revenues shail be pledged to the payment of any general obligation bonds issued by
the City while any 1997 Bonds, 1998 Note, 2000 Bonds, 2003 Bonds or 2005 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 Urility sufficient to
timely pay such general obligation bonds. No addirional revenue obligations payable from the
Revenue Bond Debt Service Account shali be herea8er issued unless the same aze expressly
made a second and subsequent lien upon the Net Revenues of the Water IItility; provide�l,
however, that addirional obligations may be issued on a parity of lien with the 2005 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-haif {1.5} times the maximum annual principal and interest coming due thereafter on
all outstanding revenue obligarions 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 fiirther, however, that if the annual Net Revenues in either or both of the afaresaid two
(2} completed fiscal years shall be insufficient to meet this test then any reasonably projected
increase in Net Revenues for the fiscal yeaz immediately following such second completed fiscal
year may be added to the Net Revenues for such completed fiscal yeazs ar 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 taacable or tax-exempt status, provided that other or
different assumptions may be used if necessary to obtain an inveshnent grade eredit 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 Conunissioners and shall be a finding of and recited in the resolution of the City
authorizing any such additional series.
In addirion, the foliowing conditions shall be met:
34 (a) The payments required to be made (at the time of the issuance of such
35 parity lien bonds) into the various funds and accounts provided for in this resolurion have
36 been made.
37 (b) All such parity lien bonds sha11 have a December 1 maturity or maturities
38 and shail have semiannual interest payments on 7une 1 and December 1 an each year;
39 provided that interest payments may be more frequent than semiannually or on dates
40 other than June 1 and December 1 if such interest is paid in full only if at the time of
41 payment the interest deposits into the Revenue Bond Debt Service Account for interest
42 payments on June 1 or December l, as appropriate, on other bonds are cunent, and any
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1 iusufficiency of interest on all parity bonds is allocated proportionately in each si�c-month
2 period ending 7une 1 or December 1, as appropriate.
3 (c) The proceeds of such parity lien bonds shall be used only for the purpose
4 of (1) making improvements, additions, extensions, renewals or replacements to the
5 Water Utility, and capitalizing interest or establishing Reserves and paying the costs of
6 such financing, or (2) refundiug parity lien bonds (provided that bonds which refund
7 parity lien bonds may instead derive their parity lien status from para�aphs 19 or 25 as
8 applied in pazagraph 20).
9 19. Refunding Maturing Bonds. The City also reserves the right and privilege
10 of issuing additional revenue bonds if and to the extent needed to refund maturing bonds payable
11 from the moneys in the Water Utility Fund in case the moneys in the Revenue Bond Debt
12 Service Account are ansufficient to pay the same at maturity, which refiznding revenue bonds
13 may be on a parity with this issue as to interest payments even if such interest is in excess of the
14 interest on the refunded bonds, but shail mature subseqnent to all the revenue obligations which
15 are payable from the IVet Revenues of the Water Utility Fund and which are still outstanding
16 upon completion of such refunding.
17 20. Other Revenue Obli atg ions. Except as authorized in paragraphs 18, 19
18 and 25 hereof, the City covenants and agrees that it will issue or incur no obligations payable
19 from the Net Revenues of all or a part of said Water Urility or consrituting in any manner a lien
20 thereon, unless such obligations are expressly made junior and subordinate to the lien and charge
21 of the 2005 Bonds on said Net Revenues. If bonds which refund the 2005 Bonds are parity lien
22 bonds, they shall enjoy complete equality of lien with any portion of the 2005 Bonds not
23 refunded and any other then outstanding bonds payable from the Revenue Bond Debt Service
24 Account, if any there be, and such refunding bonds shall con6nue to have whatever priority of
25 lien over subsequent issues that the refunded bonds may have had. If only a portion of the
26 outstanding 2005 Bonds shall be refunded and if such 2005 Bonds shall be refunded in such
27 manner that the interest rate of any refunding bond shall be greater than the interest rate of the
28 corresponding refunded 2005 Bond (or the average net interest rate of the refunding bonds shall
29 be, or shall be reasonably estimated to be, higher than the average net interest rate of the
30 refunded 2005 Bonds), or that the maturity date of any refunding bond shall be earlier than the
31 maturity date of the corresponding refunded 2005 Bond (or the average maturity of the refunding
32 bonds shall be earlier than the average maturity of the refunded 2005 Bonds), then such 2005
33 Bonds may not be refunded without the consent of the holders of the unrefunded portion of the
34 2005 Bonds and any other bonds then outstanding payable $om the Revenue Bond Debt Service
35 Account unless the Net Revenues coverage test of paragraph 18 is met.
36 21. Insufficient Amounts. In the event that the moneys in the Revenue Bond
37 Debt Service Account and Reserve Account shall be insufficient at any particular time to pay the
38 principal then due and interest then accrued on all bonds payabie from the Revenue Bond Debt
39 Service Account, said moneys shall first be applied to the payment pro rata of the accrued
40 interest on all such bonds, payable over a period ending on June 1 or Aecember 1, as appropriate,
41 and any balance shali be applied in payment pro rata of the principal on all such bonds, provided
42 further that if it shall ever be determined by a court of competent jurisdiction while any such
43 bonds remain outstanding that the sums available and to become available for the payment of the
1739995v3 34
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1 principal thereof and interest thereon are insufficient whether or not then due, then the moneys in
2 the Revenue Bond Debt Service Account and Reserve Account shall be applied in payment of all
3 principal then outstanding whether or not then due and the interest accrued thereon to the date of
4 payment ratably according to the aggregate amount thereof without any preference or priority.
5 22. Suit bv Bondholders. The Hoiders of tv✓enty percent (20%) or more in
6 aggregate principal amount of bonds issued under this resolution and at any time outstanding
7 may, either at law or in equity, by suit, action, or other proceedings, protect and enforce the
8 rights of all Holders of the 2005 Bonds then outstanding or enforce or compel the pezformance of
9 auy and all of the covenants and duties specified in this resolution to be performed by the City or
10 Board or their officers and agents, including the fixing and maintaining of rates and charges and
i l the collecrion and proper segregation of revenues and the applicafion and use thereof.
12 23. Covenants. For the protection of the Holders of the 2005 Bonds, the City
13 herein covenants and agrees to and with the holders thereof from time to time as follows:
14 (a) It will at all times through its Boud adequately maintain and efficiently
15 operate the Water Urility as a City utility. It will from time to time make all naedful and
16 proper repairs, replacements, additions and betterments to the equipment and facilities of
17 said Water Utility so that they may at all rimes be operated properly and advantageously,
18 and whenever any equipment of said system shall have been worn out, destroyed or
19 otherwise become insufficient for proper use, it shall be promptly replaced or repaired so
20 that the value and efficiency of the facilities shall be at all times fully maintained and its
21 revenues unencumbered by reason thereof.
22 (b) The rates for all water service and the charges for a11 water supplied by the
23 Water Utility to the City and its residents and to all other consumers shall be reasonable
24 and just, taking into account the cost and value of the Water Utility, the cost of
25 maintaining and operating the Water Utility and the proper and necessary allowances for
26 depreciation, the amounts required for the payment of principal and interest on the bonds
2? payable from the Net Revenues of the Water Utility, and all other sums customarily paid
28 from the revenues of the Water Utility.
29 (c) It will as required by Section 10.11.2 of the City Charter (and it wiil
30 continue to do so whether or not required by said Charter) establish, maintain and collect
31 such charges and rates as will produce revenues su�cient to pay the reasonable cost of
32 operation, repair and maintenance of the Water Utility and to pay the interest on and
33 principal of the 2005 Bonds and ali bonds on a parity of lien with the 2005 Bonds, as and
34 when they become due, as well as to pxovide sufficient money to make the required
3S appropriations to the various funds and accounts established herein. The City will review
36 the schedule of rates and charges for the Water Utility at least annually when the Board
3? budget is reviewed.
38 (d) It wall not sell, lease, mortgage, or in any manner dispose of the Water
39 Utility or any part thereof (including any and all extensions and additions that may be
40 made thereto) until all revenue bonds payable from the Net Revenues of the Water Utility
41 or any part thereof have been paid in fu11; provided, however, that the City may sell the
173999Sv3 3 $
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1 Water Utility or any part thereof if simultaneously with ar prior to said sale all of the
2 outstanding bonds are dischazged in accordance with paragaph 25 of this resolution.
3 This covenant shall not be constnied to prevent the sale by the City at fair market value
4 of real estate, equipment or other non-revenue-producing properties which in the
5 judgment of the City have become unnecessary, uneconomical or inexpedient to use in
6 connection with the Water Utility provided that suitable facilities are obtained in place
7 thereof and provided further that nothing herein is intended to prevent the City or Board
8 from ternunating or otherwise preventing the termivation of contracts for the furnishing
9 of water.
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
(e) It shall cause to be kept proper books, records and accounts adapted to the
Water U61ity sepazate from other accounts to be audited at the end of each fiscal year. A
copy of said audit shall be fiunished, without cost, to the Purchaser of the 2005 Bonds. If
the City fails to provide such audit within a reasonable time after the end of said fiscai
yeaz, the holders of twenty percent (20%) 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
sha11 be paid as current operating expenses of the Water Utility. The Purchaser of the
2005 Bonds and the Holders thereof, ar their duly appointed representarives, from fime to
time shall have the right, at all reasonable times, to inspect the Water Utility system and
to inspect and copy the books, records, accounts and data relating thereto. The City
agrees to furnish copies of such audit, without cost, to any Aolder or Holders of the 2005
Bonds at their request within a reasonable time after the end of each fiscal year.
( fl It will faithfully and punctually perform all duties with reference to the
Water Utility required by the City Charter, the Consfitution and laws of the State of
Minnesota and this resolution.
(g) It will grant no franchise to any competing utility.
24. Amendments. No change, amendment, modificarion or alterarion shall be
made in the covenants made with Holders of the 2005 Bonds without the consent of the Holders
of not less than sixty percent (60°/a) in principal amount of such 2005 Bonds then outstanding
except for changes, amendments, modifications and alterafions (a} made to cure any asnbiguity
or formal defect or omission, or (b} which would not materially prejudice the Holders of such
outstanding 2005 Bonds; provided, however, that nothing herein contained shail pernut or be
construed as permitting (1) an extension of the maturity of the principal of or the interest on any
such 2005 Bonds, or (2) a reduction in the principal amount of any such 2005 Bond or the rate of
interest thereon, or (3) a privilege or priority of any such 2005 Bond or 2005 Bonds over any
other bond or bonds except as othenvise provided herein, or (4) a reduction in the aggregate
principal amount of such 2005 Bonds required for consent to any change, amendment,
modification or alterafion, or (5) the creation of any lien ranking prior to or on a parity with the
lien of such 2005 Bonds, except as hereinbefore expressly permitted, or (6) a modification of any
of the provisions of tYus pazagraph without the consent of the Holders of one hundred percent
(100%) of the principal amount of such 2005 Bonds outstanding.
25. Discharee. When all 2005 Bonds haue been discharged as provided in this
paragraph, all pledges, covenants and other rights granted by this resolurion to the Hoiders of the
1739995v3 36
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1 2005 Bonds shall cease. The City may discharge a112005 Bonds wluch aze due on any date by
2 depositing with the paying agent (but not if a City officer is the paying agent} or an escrow agent
3 for such 2005 Bonds on or before that date a sum sufficient for the payment thereof in full; or if
4 any 2005 Bond should not be paid when due, it may nevertheless be discharged by depositing
5 with the paying agent (but not if a City officer is the paying agent) or an escrow agent a sum
6 sufficient for the payment thereof in full. Tbe City may also discharge any prepayable 2005
7 Bonds which are called for redemption on any date wben they axe prepayable accordiug to their
8 terms, by depositing with the paying agent (but not if a City officer is the paying agent) or an
9 escrow agent on or before that date an amount equal to the principal, interest and redemprion
10 premium, if any, wYuch are then due, provided that notice of such redemprion has been duly
11 gven as provided in this resolution. The City may also at any time dischazge the issue of the
12 2005 Bonds in whole or in part by complying with the applicable provisions of Minnesota
13 Statutes, Section 475.67, and any amendments thereto, except that the funds deposited in escrow
14 in accardance with said provisions may but need not be in whole or part proceeds of advance
1 S refunding bonds. The City may discharge 2005 Bonds as herein provided without the consent of
16 any Bondholders.
17 26. Fiscal Year. As used in this resolution the words "fiscal yeaz" shall mean
18 the twelve (12) month period beginning on January 1 of each yeaz and ending on December 31
19 of the same year. Should it be deemed advisable at some later date to change the fiscal yearly
20 basis, the same may be done by proper actions to that effect, which change shall not constitute an
21 amendment or modification of this resolution.
22 27. Records and Certificates. The officers of the City are hereby authorized
23 and directed to prepare and furnish to the Purchaser, and to the attomeys approving the legality
24 of the issuance of the Bonds, certified copies of all proceedings and records of the City relating
25 to the Bonds and to the financial condition and affairs of the City, and such other affidavits,
26 certificates and information as are required to show the facts relating to the legality and
27 marketability of the Bonds as the same appear from the books and records under their custody
28 and control or as otherwise known to them, and all such certified copies, certificates and
29 affidavits, includang any heretofore fiunished, shall be deemed representations of the City as to
30 the facts recited therein.
31 28. Negative Covenants as to Use of Proceeds and Improvements. The City
32 hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or
33 permit them to be used, or to enter into any deferred payment arrangements for the cost of the
34 Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within the
35 meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no
36 actions will be taken over the term of the Bonds that would cause them to be private activity
37 bonds, and the average term of the Bonds is not longer than reasonably necessary for the
38 govemmental purpose of the issue. The City hereby covenants not to use the proceeds of the
39 Bonds in such a manner as to cause the Bonds to be "hedge bonds" within the meaning of
40 Section 149(g) of the Code.
41 29. Tax-Exempt Status of the Bonds: Rebate: Elections. The City shall
42 comply with requirements necessary under the Code to establish and maintain the �clusion from
43 gross income under Section 103 of the Code of the interest on the Bonds, including without
��ss�s�s 37
OS-d�`f
1 limitafion requirements relating to temporary periods for investments, limitations on amounts
2 invested at a yield greater than the yield on the Bonds, and the rebate of excess inveshnent
3 eanuugs to the United States.
4 If any elections are available now or hereafter with respect to arbitrage or rebate
5 matters relating to the Bonds, the Mayor, Clerk, Treasurer and Director, Office of Financial
6 Services, ar any of them, are hereby authorized and directed to make such elections as they deem
7 necessary, appropriate or desirable in connection with the Bonds, and all such elecrions shall be,
8 and shall be deemed and treated as, elections of the City.
9 30. No DesiQnation of Oualified Tas-Exempt Obli ate ions. The Bonds,
1Q together with other obligations issued by the City in 2005, exceed in amount those which may be
ll qualified as"qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the
12 Code, and hence are not designated for such purpose.
13
14
15
16
17
18
19
20
31. Letter of Representations. The Letter of Representations far the Bonds is
hereby confirmed to be the Blanket Issuer Letter of Representations dated April 10, 1996, by the
Ciry and received and accepted by The Depository Trust Company. So long as The Depository
Trust Company is the Depository ar it or its nominee is the Holder of any Global Cerkificate, 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. Paritv Findin¢s. It is hereby found, determined and declared that:
21 (a) Neither the City nor the Board has any outstanding bonds, warrants,
22 certificates, or other obligafions or evidences of indebtedness, or money borrowed for or
23 on account of the Water Utility or indebtedness for which any of the Net Revenues of a11
24 or a part of the Water Utility have been pledged or which are a prior lien on such Net
25 Revenues, except the 1997 Bonds, 1998 Note, 2000 Bonds and 2003 Bonds and the
26 subordinate 1996 Note.
27 (b} All payments required to be made prior to the date hereof into the various
28 funds and accounts of the "Water Ufility Fund" established pursuant to the resolutions of
29 this C3ty Council which auWorized the issuance of the 1997 Bonds, 1998 Note, 2000
30 Bonds and 2003 Bonds have been made.
31
32
33
34
35
36
37
(c) The annual Net Revenues for each of the two (2) completed fiscal years
immediately preceding the issuance of the 2005 Bonds have been more than one and one-
half (1.5) time's, specifically 2.74 and 2.38 times, respectively, the maarimum 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 1997 Bonds,
1998 Note, 2000 Bonds and 2003 Bonds, and the 2005 Bonds as the obligations proposed
to be issued, to wit:
1734995v3
�
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Net Revenues 2004
Net Revenues 2003
Maximum Principal and Interest
on the 1997 Bonds
$1Q352,149
$11,923,784
$ 878,218
Maximum Annua] Principal and
Interest on the 1998 Note $ 1,616,868
7
9
10
11
12
Maximum Annual Principal and
Interest on the 2000 Bonds
Masimum Annual Principal and
Tnterest on the 2003 Bonds
$ 949,500
$ SA3,913
$ 849,955
MaYnnum Annual Principal and
Interest on the 2005 Bonds
13 Masimum Annual Principal and
14 Interest on the 1997 Bonds, 1998 Note,
15 2000 Bonds and 2003 Bonds
16 (COMBINED FOR JOINT HIGHEST
17 YEAR, NOT SUM OF INDNIDUAL
18 HIGFIEST YEARS)
19 One and One-half (1.5) Times
20 Total Maximum Annual Principai
21 and Interest Requirements
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
$ 4,355,507
$ 6,533,260.50
This City Council has been funaished with the Certificate of the General Manager of the
Water Utility attesting to the foregoing facts.
(d) This City Council pursuant to advice from the Board hereby finds,
determines and declares that the estimated revenues to be derived from the operarion of
the Water Utility during the term of the 2005 Bonds will be rnore than sufficient to
provide Net Revenues adequate to pay principal and interest when due on the 2005 Bonds
and on those other bonds which are now outstanding and to maintain the Reserves
required therefor.
(e) The 2005 Bonds have a December 1 maturity or maturities and have
interest payments on June 1 and December 1, and are in compliance with the other
requirements for parity bonds.
( fl The proceeds of the 2005 Bonds shall only be used for the purpose of
making improvements, additions, extensions, renewals or replacements to the Water
Utility, and capitalizing interest or establishing Reserves and paying the costs of such
financing.
7739995v3 39
• - •
1 (g) A s required by paragraph 10 of the resolution authorizing the 1996 Note,
2 estimated Net Revenues of the Water Utility will be sufficient, in addition to all other
3 sources, for the payment of the 1996 Note and 2005 Bonds.
4 33. Covenant with Holders. Each and all of the terms and provisions of this
5 resolution shall be and constitute a covenant on the part of the City to and with each and every
6 Holder from time to time of the Bonds.
7 34. Negotiated Sale. The City has retained Springsted Incorparated as an
8 independent fuiancial advisor, and this Council has heretofore detexmined, and does hereby
9 determine, to sell the Bonds by private negoriarion to the Purchaser, all as provided by
10 Minnesota Statutes, Section 475.60, Subdivision 2(9).
11 35. Continuinr Disclosure. The City is an obligated person with respect to the
12 Bonds. The City hereby ag in accordance with the provisions ofRule 15c2-12 (the "Rule"),
13 promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the
14 Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the
15 "Undertaking") hereinafter described, to:
16 A. Provide or cause to be provided to each nationally recognized municipal
17 securities information repository ("NRMSIlt"} and to the appropriate state information
18 depository ("SID"}, if any, far the State of Minnesota, in each case as designated by the
19 Commission in accardance with the Rule, certain annual financial information and
20 operating data in accordance with the Undertaking. The City reserves the right to modify
21 from time to time the terms of the Undertaking as provided therein.
22 B. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR
23 or to the Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of
24 the occurrence of certain material events with respect to the Bonds in accordance with the
25 Undertaking.
26 C. Provide or cause to be provided, in a rimely manner, to (i) each NRMSIR
27 or to the MSRB and (ii) the SID, notice of a failure by the City to provide the annual
28 financiai information with respect to the City described in the Undertaking.
24 The City agrees that its covenants pursuant to the Rule set forth in this paragraph
30 35 and in the Undertaking are intended to be for the benefit of the Holders of the Bonds and shall
31 be enforceable on behalf of such Holders; provided that the right to enforce the provisions of
32 these covenants shall be limited to a right to obtain specific enforcement of the City's obligarions
33 under the covenants.
34 The Mayor and Director, Office of Financial Services, or any other officers of the
35 City authorized to act in their stead (the "Officers"), aze hereby authorized and directed to
36 execute on behalf of the City the Undertaking in substanrially the form presented to the City
37 Council, subject to such modifications thereof or additions thereto as are (i) consistent with the
38 requirements under the Rule, (ii) required by the Purchaser, and (iii) acceptable to the Officers.
1739995v3 4Q
oS-�o�f
1 36. Severabilitv. If any section, paragraph or provision of this resolution shali
2 be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such
3 section, pazagraph or provision shall not affect any of the remaining provisions of this resolution.
4 37. HeadinES. Headings in this resolution are included for convenience of
5 reference only and are not a part hereof, and shall not lunit or define the meaning of any
6 provision hereof.
Yeas Nays Absent
Benanav �
Bostrom
�-
Harris
�
Helgen ,!
Lantry ,�
Montgomery �
Thune �
Requested by DepaRment of: ,
bFFiGE F n� �a6 ��
Bv:
lNi
� a a Form Approved by
Adopted by Council: Date /�{.a.� 9, a��S
Adoption Certified �y Council Secretary
Mayor for
Approved
- 1 /AYr
1739995v3 4j
b5 - ao
� Green SMeet Green Sfieet Green Sheet Green Sheet Green Sheet Green Sheet .
Fs —am�n� s�;�
24FE6-05
0
1
2
3
4
i
6
Green Sheet NO: 3025369
Contact Person 8 Phone:
Tadd F�k�dey
266-8837
�. .. �
Gontsa¢tType: .. , . .
AR-RESELUiION W/$ iRAN5ACT10N
� '
Assign
Nnmber
For
Routi�g
OMer
In'fiallDate
an ' e ' 'al e '
ttorn �
a a t
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� Total # of Signa P ages _(Clip All L oca tio ns fo r S �
Action Requested: -
This resolurion accepts the winning p[ogosal and awazds the bid for the sate of $11,380,000 Water Revenue Bonds, Series 2005D, and
,. provides, for their issuance. This is a competitive bond sale, and the award is g'oing to the bidder found most advantageous (lowest
cost) to the City.
idations: Approee (A) or Reject (R):
Plannin9 Commisswn
CIB Committee
Cieil Service Commission
Contrects Must Mswer the Following
1. Has this persoNfirtn e�er worked under a contrect for this department?
Yes No
2. Has this persoNfirtn eeer been a city employee?
Yes No
3. Does this persoNfirm possess a skill not normally possessed by arry
cuirent oity employee?
Yes No
Explain all yes answers on separate sheet and atpch to green sheet
Initiatin9 Problem, Issues.OPPortun'dY (Nlhc What, When, Wfiere, Why):
The bonds aze for the purpose of funding improvements to Water Treahnent infrastructure, design to enhance the ability of Regional
Water Services to control the taste and odor of drinking water.
Advantages IfApproved:
Financing will be.available for improvements to the Water Treatment Infrasaucture.
Disadvantapes IfApproved:
None.
Disadvantages If Not Approved:
FSmds needed for improvements will not be available.
TotalAmountof $���OQO
Transaction:
Funding Source:
Financial lnformation:
(Explain)
CostlRevenue Budgefed: \'
Activ'ify Number.
Febivary 24, 2005 9:47 AM
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