10-641Council File # 10-641
Green Sheet # 3113716
RESOLUTION
CITY OF�If�T �AUL, MINNESOTA � �
Presented by
ACCEPTING THE OFFER OF THE NIINNESOTA PUBLIC FACILITIES
AUTHORITY TO PURCHASE WATER REVENUE NOTES IN 1`WO OR MORE
SERIES IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$30,000,000, PROVIDING FOR THE ISSUANCE OF THE SERIES 2010 NOTES,
AND AUTHORIZING EXECUTION OF PROJECT LOAN AGREEMENTS
WITH THE NIINNESOTA PUBLIC FACILITIES AUTHORITY
1 WHEREAS, Saint Paul Regional Water Services on behalf of the City Council (the "CounciP') of
2 the City of Saint Paul, Minnesota (the "City"), has heretofore applied for a loan from the Minnesota
3 Public Facilities Authority (the "PFA") to provide financing pursuant to the Ciry's home mle charter and
4 Minnesota Statues, Chapter 475 (the "Municipal Debt AcP'), for funding: (i) the replaceme�t of the Dale
5 Street Resecvoir (not to exceed $6,000,000) (the "Dale Reservoir ProjecP'); (ii) lead service replacement
6 projects (not to exceed $3,500,000) throughout the City; and (iii) the replacement of water meters
7 throughout the service area of the Utility (not to exceed $20,500,000) ((ii) and (iri) are referred to herein
8 as the "Replacement Projects" and collectively with the Dale Reservoir Project, the "2010 Projects") as
9 various improvement to the City's municipal water utility (the "Water Utility") operated by Saint Paul
10 Regional Water Services; and
1 I WHEREAS, Saint Paul Regional Water Services has, since its acquisition in 1885, been under the
12 jurisdiction of the Boazd of Water Comrnissioners of the City of Saint Paul (the "Boazd") and the Boazd
13 and this Council deem it necessary and expedient to undertake the 2010 Projects; and
14 WHEREAS, the PFA is authorized pursuant to Minnesota Statutes, Chapter 466A, as amended
15 (the "PFA Act"), to issue its bonds and to use the proceeds thereof, together with certain other state and
16 federal funds, to provide loans to municipaliues such as the City to fund eligible costs of construction of
17 publicly owned drinking water systems in accordance with the Federal Safe Drinking Water Act; and
18 WHEREAS, the PFA has committed to make one or more loans to the City in the principal
19 amount of up to $30,OOQ000, to be disbursed and repaid in accordance with the terms of one or more
20 Public Facilities Authority Project Loau and Revenue Bond Purchase Agreements (collectively, the
21 "Project Loan AgreemenY') executed by the PFA and the City and agreed to by the Board, if uecessary,
22 copies of which aze before this meeting aod on file with the City Clerk; and the Froject Loan
23 Agreement(s), as executed, is incorporated by reference hereto; and
24 WHEREAS, in order to fund [he 2010 Projects and provide the funds therefore as required by the
25 Project Loan Agreement, the City will issue its (i) tax-exempt Water Revenue Note, Series 2010A (the
26 "Series 2010A Note") in an amount not to exceed $6,OOQ000 in order to finance the Dale Reservoir
27 Project and (ii) tas-exempt Water Revenue Note, Series 2010B (the "Series 2010B Note" and together
28 with the Series 2010A Note, the "2010 Notes") in an amount not to exceed $24,000,000 in order to
29 finance the Replacement Projects; and
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1 WHEREAS, in accordance with Section 475.6Q Subdivision 2(4) of the Municipal Debt Act, the
2 City is authorized to issue obligations to a boazd, department or agency of the State of Minnesota by
3 �egotiation and without advertisement for bids and the PFA is, and has represented that it is, a boazd,
4 department or agency of the State of Minnesota; and
5 WHEREAS, there aze currently outstanding bonds of the City payable from Net Revenues of the
6 City's Water Utility, specifically the City's (a) Water Revenue Note of 1998 (the "1998 Note"), issued
7 pursuant to a resolution adopted by this Council on October 7, 1998, of which $7,395,000 is outstanding,
8 (b) Water Revenue Bonds, Series 2003C (the "2003 Bonds"), issued pwsuant [o a resolution adopted by
9 this Council on February 26, 2003, of which $8,000,000 is outstanding, (c) Water Revenue Bonds, Series
10 2005D (the "2005 Bonds"), issued pursuant to a resolution adopted by this Council on March 9, 2005, of
11 which $9,44Q000 is outstanding, and (d) Water Revenue Refunding Bonds, Series 2007A (the "2007
12 Bonds"), issued pursuant to a resolution adopted by this Council on January 24, 2007, of which
13 $6,605,000 is outstanding and there is currenfly outstanding a general obligation note of the City payable
14 on a subordinate lien basis from Net Revenues of the City's Water Utility, specifically the City's General
15 Obligation Wastewater Treated Water Revenue Note of 1996 (the "1996 Note°), issued pursuant to a
16 resolution adopted by this Council on May 15, 1996, of which $1,778,372 remains outstanding; and
17 WHEREAS, all capitalized terms used in this resolution and not defined herein shall have the
18 meanings granted to them in the resolutions authorizing the issuance of the 1998 Note, the 2003 Bonds,
19 the 2005 Bonds, or the 2007 Bonds, as applicable; and
20
21 WHEREAS, it is necessazy and desirable to provide for the issuance of the 2010 Notes on a pazity
22 of lien with the 1998 Note, 2003 Bonds, 2005 Bonds, and 2007 Bonds and with a priority of lien over the
23 1996 Note; and pazagraph 18 oF the resolution authorizing the issuance and sale of the 2007 Bonds
24 provides for the issuance of parity lien bonds as follows:
25 "18. Parity Bonds. ...The 1998 Note, 2003 Bonds, 2005 Bonds and 2007 Bonds shall
26 be a first chazge and lien upon the Net Revenues of the Water Utility. No part of such Net
27 Revenues shall be pledged to the payment of any general obligation bonds issued by the City
28 while any 1998 Note, 2003 Bonds, 2005 Bonds and 2007 Bonds or bonds issued on a parity
29 therewith remain outstanding and undischarged, unless the pledge of Net Revenues to such
30 general obligation bonds is expressly made a second and subsequent lien and the City and Boazd
31 covenant to make the rates and chazges of the Water Utility sufficient to timely pay such general
32 obligation bonds. No additional revenue obligations payable from the Revenue Bond Debt
33 Service Account shall be hereafrer issued unless the same aze expressly made a second and
34 subsequent lien upon the Net Revenues of the Water Utiliry; provided, however, that additional
35 obligations may be issued on a parity of lien with the 2007 Bonds, provided that the annual Net
36 Revenues of said Water Utility for each of the two (2) completed fiscal yeazs immediately
37 preceding the issuance of such addiuonal obligations shall have been one and one-half (1.5) times
38 the masimum annual principal and interest coming due thereafter on all outstanding revenue
39 obligations payable from and having a parity of lien upon the Net Revenues of the Water Utility
40 Fund, including the additional obligations so to be issued; provided further, however, that if the
41 annual Net Revenues in either or both of the aforesaid two (2) completed fiscal yeazs shall be
42 insufficient to meet this test then any reasonably projected increase in Net Revenues for the fiscal
43 year immediately following such second completed fiscal yeaz may be added to the Net Revenues
44 for such completed fiscal yeazs or either of them (but the total of such projected increase in Net
45 Revenues may be added only once) in applying the foregoing test.
46
47 For purposes of the foregoing limitations, when only bonds issued after the 1994 Bonds
48 are outstanding, the "masimum annual principal and interest coming due thereafter" on variable
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1 rate bonds shall be calculated assuming the variable rate bonds beaz fixed interest at the rates
2 prevailing at the time of the calculation for utiliry revenue bonds of comparable quality, maturity
3 (or remaining maturity) and tasable or tax-exempt status, provided that other or different
4 assumptions may be used if necessary to obtain an investment grade credit rating for the variable
5 rate bonds or to maintain the credit rating(s) then in effect for the bonds then ouutanding. Such
6 facts shall be shown by the Certificate of the General Manager of the Board of Water
7 Comrnissioners and shall be a finding of and recited in the resolution of the City authorizing any
8 such additional series.
9 In addition, the following conditions shall be met:
10 (a) The payments required to be made (at the time of the issuance of such
11 parity lien bonds) into the various funds and accounts provided for in this resolution have
12 been made.
13 (b) All such pazity lien bonds shall have a December 1 maturity or maturities
14 and shall have semiannual interest payments on June 1 and December 1 in each year,
15 provided that interest payments may be more frequent than semiannually or on dates
16 other than 7une 1 and December 1 if such interest is paid in full ouly if at the time of
17 payment the interest deposits into the Revenue Bond Debt Service Account for interest
18 payments on June 1 or December 1, as appropriate, on other bonds aze cunent, and any
19 insufficiency of interest on all parity bonds is allocated proportionately in each six-month
20 period ending June 1 or December 1, as appropriate.
21 (c) The proceeds of such parity lien bonds shall be used only for the purpose
22 of (1) making improvements, additions, extensions, renewals or replacements to the
23 Water Utility, and capitalizing interest or establishing Reserves and paying the costs of
24 such financing, or (2)refunding parity lien bonds (provided that bonds which refund
25 parity lien bonds may instead derive their parity lien status from paragraphs 19 or 25 as
26 applied in paragraph 20)";and
27 WHEREAS, for purposes of this Resolution paragraphs 11, 18, 18 and 18 of the resolutions
28 authorizing the issuance and sale of the 1998 Notes, 2003 Bonds, 2005 Bonds, and 2007 Bonds is
29 substantively identical to said pazagraph 18 relating to the 2010 Bonds; and
30 WHEREAS, herein the Ciry makes various findings demonstrating the propriety of the issuance
31 of the 2010 Notes on a parity with the 1998 Note, Series 2003 Bonds, 2005 Boods and 2007 Bonds; and
32 WHEREAS, in accordance with advice received from the Boazd, this Council finds, deternunes
33 and declares that it is necessazy and expedient to provide moneys to finance the 2010 Projects, continue
34 and add to a Reserve Account previously established as security for the obligations outstanding on a
35 parity with the Series 2010 Notes, and provide for the costs of the issuance of the 2010 Notes from the
36 proceeds of obligations payable solely from the Net Revenues of the Water Utility; and
37 WHEREAS, a contract or contracts for the 2010 Projects have been made by the Water Utility or
38 the City, as appropriate, with the approval of the PFA and all other state and federal agencies of which
39 approval is required.
40 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul,
41 Minnesota, as follows:
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j 1. Acceptance of Offer; Pavment. The offer of PFA to purchase the 2010 Notes, at the rates
2 of interest hereinafter set forth, and to pay for the 2010 Notes up to the sum of $30,000,000 as provided
3 below, is hereby accepted, and the sale of the 2010 Notes is hereby awazded to the PFA. Payment For the
4 2010 Notes shall be disbursed in installments as elia ble costs of the 2010 Projects are reimbursed or paid,
5 all as provided for in the applicable Project Loan Aa eement(s).
6 2. Title; OriQinal Issue Date; Denominations; Maturities. The 2010 Notes shall be titled the
7 (i) "Water Revenue Note, Series 2010A" and shall be issued in an amount not to exceed �6,OOQ000 and
8 (ii) "Water Revenue Note, Series 2010B" and shall be issued in an amount not to exceed $24,000,000 or
9 so much thereof as shall be disbursed pursuant to the Project Loan Agreement. The 2010 Notes shall be
10 dated their date of issuance. Each 2010 Note shall beaz interest on so much of the principal amount of the
11 applicable 2010 Note as (i) may be disbursed from time to time as provided in the applicable Project Loan
12 Agreement at the rate which will not exceed 1.975% per annum (calculated on the basis of a 360-day year
13 of twelve 30-day months). Interest on each of the Series 2010 Notes is payable semiannually on each
14 June 1 and December 1, commencing December 1, 2010. Principal on the Series 2010A Note and the
15 Series 2010B Note shall mature on December 1 of the yeazs and in the installments as set forth in the
16 forms of the Series 2010A Note set forth in Exhibit A attached hereto and Exhibit B attached hereto,
17 respectively.
18 Interest shall accrue only on the aggregate amount of each of the 2010 Notes which has been
19 disbursed and is unpaid under the applicable Project Loan Agreement. The principal installments shall be
20 paid in the amounts scheduled even if at the time of payme�t the full principal amount of the 2010 Notes
21 has not been disbursed; provided that if the full principal amount of the 2010 Notes is never disbursed, the
22 amount of the principal not disbursed shall be applied to reduce each unpaid principal installment in the
23 proportion that such installmeut beazs to the total of all unpaid principal installmeots (i.e., the remaining
24 principal payme�t schedule shall be reamortized to provide proportionately reduced principal payments).
25 Principal, interest and any premium due under the 2010 Notes will be paid on each payment date by wire
26 payment, or by check or draft mailed five (5) business days prior to the payment date to the person in
27 whose name the 2010 Notes is registered, in any coin or cunency of the United States which at the time
28 of payment is legal tender for public and private debts.
29 Interest on the 2010 Notes includes amounts treated by the PFA as service fees.
30 3. Purnose. The 2010 Notes shall provide funds to finance the acquisition, construction,
31 installation, and equipping of the 2010 Projects and funding the costs of issuance for the 2010 Notes. The
32 proceeds of the Series 2010A Note shall be utilized to finance the Dale Reservoir Project and proceeds of
33 the Series 2010B Note shall be utilized to finance the Replacement Projects. The proceeds of the 2010
34 Notes shall be deposited and used as provided in pazagraph 16 below. The total cost of the acquisition,
35 construction, installation and equipping of the 2010 Projects, including legal and other professional
36 chazges, publication and printing costs, interest accruing on money borrowed for the 2010 Projects before
37 the collection of Net Revenue pledged and appropriated therefore, and all other costs necessazily incurred
38 and to be incurred from the inception to the completion of the 2010 Projects, is estimated to be at least
39 equal to the amount of the 2010 Notes. The City covenants that it shall do all things and perform all acts
40 required of it to assure that work on the 2010 Frojects proceeds with due diligence to completion and that
41 any pemuts and studies required under law for the 2010 Projects aze obtained.
42 4. Redemption. Each of the 2010 Notes shall be subject to redemption and prepayment in
43 whole or in part at the option of the City or mandatorily as provided in the Project Loan Agreement(s). If
44 redemption is in part, each installment of principal shall be prepaid in the proportion that such installment
45 bears to the total of all unpaid principal installments (i.e., the remaining principal payment schedule shall
H!
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1 be reamortized to provide propoaionally reduced principal payments), unless the City and the holder of
2 the 2010 Notes aa ee to a different result.
3 5. Note Reaistrar. As provided in the Resolution, the Treasurer of the City is appointed to
4 act as note rea snaz and transfer agent with respect to the 2010 Notes (the "Note Registraz"), and shall do
5 so unless and until a successor Note Rea straz is duly appointed. A successor Note Rea straz shall be an
6 officer of the City or a bank or trust company eligible for desib ation as Note Registrar pursuant to the
7 Municipal Debt Act and may be appointed pursuant to any contract the City and such successor Note
8 Registraz shall execute which is consistent herewith. The Note Registrar shall also serve as Paying Agent
9 for the Series 2010 Note unless and until a successor Paying Agent is duly appointed. Principal of and
10 interest on the 2010 Notes shall be paid to the rea stered holder or holders of the 2010 Notes (the
I 1 "Holder" or "Holders") in the manner set forth in the form of the 2010 Notes. The effect of registration
12 and the rights and duties of the City and the Note Registrar with respect thereto are as follows:
13 (a) Register. The Note Registraz shall keep a register in which the Note Regstraz provides
14 for the registration of ownership of the 2010 Notes and the registration of transfers and exchanges of the
IS 2010 Notes entitled to be registered, transferred, or exchanged.
16 (b) Transfer of 2010 Notes. Upon surrender for transfer of a Series 2010 Note duly endorsed
17 by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to
18 the Note Registraz, duly executed by the registered owner thereof or by an attorney duly authorized by the
19 registered owner in writing, the Note Registrar shall authenticate and deliver, in the name of the
20 designated transferee or transferees, one or more new 2010 Notes of a like aggregate principal amount
21 and maturity, as requested by the transferor. The Note Registrar may, however, close the books for
22 registration of any transfer afrer the fifree�th day of the month preceding each interest payment date and
23 until that interest payment date.
24 (c) Exchange of 2010 Notes. When a 2010 Note is surrendered by the registered owner for
25 exchange, the Note Registraz shall authenticate and deliver one or more new 2010 Notes of a like
26 aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in
27 writing.
28 (d) Cancellarion. A 2010 Note surrendered upon transfer or exchange shall be prompdy
29 cancelled by the Note Registraz and thereafter disposed of as directed by the City.
30 (e) Improper or Unauthorized Transfer. When a 2010 Note is presented to the Note
31 Registrar for transfer, the Note Registraz may refuse to transfer the 2010 Note until the Note Registraz is
32 satisfied that the endorsement on the 2010 Note or separate instmment of transfer is valid and genuine
33 and that the requested transfer is legally authorized. The Note Registraz shall incur no liability for the
34 refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.
35 (t) Persons Deemed Owners. The City and the Note Registraz may treat the person in whose
36 name a Series 2010 Note is registered in the bond register as the absolute owner of the 2010 Note,
37 whether the 2010 Note is overdue or not, for the purpose of receiving payment of, or on account of, the
38 principal of and interest on the 2010 Notes and for all other purposes, and payments so made to a
39 registered owner or upon the owner's order shall be valid and effechxal to sadsfy and discharge the
40 liability upon the 2010 Notes to the extent of the sum or sums so paid.
41 (g) Taxes, Fees, arul Charges. The Note Registrar may impose a chazge upon the owner
42 thereof for a transfer or exchange of a 2010 Note sufFicient to reimburse the Note Registraz for any tax,
43 fee, or other governmental charge required to be paid with respect to the transfer or exchange.
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1 (h) Mutflated, Lost, Stolen or Destroyed Series 2010 Note. If a Series 2010 Note becomes
2 mutilated or is destroyed, stolen, or lost, the Note Registraz shatl deliver a new Series 2010 Note of like
3 amount, number, maturity date, and tenor in exchange and substitution for and upon cancellation of the
4 mutilated Series 2010 Note or in lieu of and in substitution for any Series 2010 Note destroyed, stolen, or
5 lost, upon the payment of the reasonable expenses and chazges of the Note Registraz in connection
6 therewith; and, in the case of a Series 2010 Note destroyed, stolen, or lost, upon filing with the Note
7 Registrar of evidence satisfactory to it that the Series 2010 Note was destroyed, stolen, or lost, and of the
8 ownership thereof, and upon fumishing to the Note Registrar an appropriate bond or indemnity in Form,
9 substance, and amount satisfactory to it and as provided by law, in which both the Ciry and the Note
10 Registraz must be named as obligees. A Series 2010 Note so surrendered to the Note Registraz shall be
ll cancelled by the Note Registraz and evidence of such cancellation shall be given to the City. If the
12 mutilated, destroyed, stolen, or lost Series 2010 Note has already matured or been called for redemption
13 in accordance with its terms, it is not necessary to issue a new Series 2010 Note prior to payment.
14 6. Re¢istration and Pavment. The 2010 Notes will be issued only in fully registered form.
15 The interest thereon and, upon surrender of each Series 2010 Note, the principal amount thereof, is
16 payable by check or draft issued by the Note Registraz described herein. Each Series 2010 Note shall be
17 dated as of the last interest payment date preceding the date of authentication to which interest on the
18 2010 Notes has been paid or made available for payment, unless: (i) the date of authentication is an
19 interest payment date to which interest has been paid or made available for payment, in which case the
20 2010 Notes will be dated as of the date of authentication; or (ii) the date of authenticarion is prior to the
21 first interest payment date, in which case the 2010 Notes will be dated as of the date of original issue.
22 7. Form of 2010 Notes. All of the provisions of the 2010 Notes, when executed as
23 authorized herein, shall be deemed to be a part of this Resolution as fully and to the same extent as if
24 incorporated verbatim herein and shall be in full force and effect from the date of execurion and delivery
25 thereof. The 2010 Notes shall be issued in the form of a registered note and shall be substantially in the
26 forms attached to this Resolution as EXHIBIT' A and EXHIBIT B, respectively, which forms aze hereby
27 approved, with such necessary and appropriate variations, omissions, and insertions as the City Treasurer
28 and Director, Office of Financial Services, oc their respective deputies, in their discretion, shall deternune
29 and delivery of the 2010 Notes by the City shall be conclusive evidence of such determinations. Changes
30 to the forms of [he 2010 Notes may be approved by bond counsel and the City Attorney.
31 The City Treasurer is authorized and directed to obtain a copy of the proposed approving legal
32 opinions of Kennedy & Graven, Chartered, Saint Paul, Minnesota, as bond counsel to the City, which
33 shall be complete except as to dating thereof and cause the opinions to accompany the 2010 Notes.
34 8. Execution. The 2010 Notes shall be executed on behalf of the City by the signahxres of
35 its Mayor (or his designee), City Clerk (or designee), and Director, Office of Financial Services (or
36 designee), provided that any of such signatures may be printed or photocopied facsimiles and the
3'7 corporate seal of the City may be omitted on the 2010 Notes as permitted by law. In the event of
38 disabIlity or resignation or other absence of any such officer, the 2010 Notes may be signed by the
39 manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In
40 case any such officer whose signature or facsimile of whose signature shall appeaz on the 2010 Notes
41 shall cease to be such officer before the delivery of the 2010 Notes, such signature or facsimile shall
42 nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until
43 delivery.
44 9. Authentication: Date of Registration. The 2010 Notes shall not be valid or obligatory for
45 any purpose or be entitled to any security or benefit under this Resolution unless a Certificate of
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1 Authentication on such Series 2010 Note, substantially in the form hereinabove set forth, shall have been
2 duly executed by an authorized representative of the Note Rea strar. Certificates of Authentication on
3 different 2010 Notes need not be sia ed by the same person. The No[e Reb straz shall authenticate the
4 sia atures of officers of the City on each Series 2010 Note by execution of the Certificate of
5 Authentication on the 2010 Notes and by inserting as the date of registration in the space provided the
6 date on which the Series 2010 Note is authenticated. For purposes of delivering the 2010 Notes to the
7 Purchaser, the Note Registrar shall insert as the date of registration the date of original issue. The
8 Certificate of Authentication so executed on the 2010 Notes shall be conclusive evidence that it has been
9 authenticated and delivered under this Resolution.
10 10. R�istration: Transfer: Exchan¢e. The City will cause to be kept at the principal office of
11 the Note Registraz a Note Register in which, subject to such reasonable regvlations as the Note Registrar
12 may prescribe, the Note Registrar shall provide for the registrauon of 2010 Notes and the registration of
13 transfers of 2010 Notes entitled to be registered or transferred as herein provided.
14 11. Ri¢hts uvon Transfer or Exchange. Each Series 2010 Note delivered upon transfer of or
15 in exchange for or in lieu of any other Series 2010 Note shall carry all the rights to interest accrued and
16 unpaid, and to accrue, which were carried by such other 2010 Notes.
17 12. Interest Pavment; Record Date. Interest shall be paid on each Interest Payment Date by
18 check or drafr mailed to the Holders, and in each case at the address appearing thereon at the close of
19 business on the fifteenth (15th) day of the calendar month next preceding such Interest Payment Date (the
20 "Regulaz Record Date"). Any such interest not so timely paid shall cease to be payable to the persoo who
21 is the Holder thereof as of the Regulaz Record Date, and shall be payable to the person who is the Holder
22 thereof at the close of business on a date (the "Special Record Date") fixed by the Note Registraz
23 whenever money becomes available for payment of the defaulted interes� Notice of the Special Record
24 Date shall be given by the Note Registrar to the Holders not less than ten (10) days prior to the Special
25 Record Date.
26 13. Holders: Treatment of Reeistered Owner: Consent of Holder.
27 (a) Holders. The "Holder" of a 2010 Note is the person in whose name it is registered oo the
28 registration books of the City. For the purposes of all acpons, consents and other matters affecting the
29 Holders of the 2010 Notes, other than payments, redemptions, and. purchases, the City may (but shall not
30 be obligated to) treat as the Holder of a 2010 Note the bene5cial owner of the 2010 Note iustead of the
31 person in whose name a 2010 Note is registered. For that purpose, the City may ascertain the identity of
32 the beneficial owner of a 2010 Note by such means as the Treasurer in his or her cole discretion deems
33 appropriate, including but not limited to a certificate from the person in whose name a 2010 Note is
34 registered identifying such beneficial owner.
35 (b) Treatment of Registered Owner. The City and its Treasurer may treat the persons in
36 whose name the 2010 Notes aze registered as the owner of the 2010 Notes for the purpose of receiving
37 payment of principal of and premium, if any, and interest on, the 2010 Notes and for all other purposes
38 whatsoever whether or not the 2010 Notes shall be overdue, and neither the City nor its Treasurer shall be
39 affected by notice to the conttary.
40 (c) Consent of Holder. Any consent, request, direction, approval, objection or othei
41 instrument to be signed and executed by the Holder may be in any number of concunent writings of
42 similar tenor and must be signed or executed by the Holder in person or by agent appointed in writing.
43 Froof of the execution of any such consent, request, direction, approval, objection or other instrument or
44 of the writing appointing any such agent and of the ownership of the 2010 Notes, if made in the following
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1 manner, shall be sufFicient for any of the purposes of this Resolution, and shail be conclusive in favor of
2 the City with regazd to any action taken by it under such request or other instrument, namely:
3 (I) The fact and date of the execution by any person of any such writing may be
4 proved by the certificate of any officer in any jurisdiction who by law has power to take
5 acknowledgments within such jurisdiction that the person sia ing such writing acknowledged
6 before him the execuuon thereof, or by an affidavit of any witness to such execution.
7 (2) Subject to the provisions of subparagaph (a) above, the fact of the ownership by
8 any person of the 2010 Notes, and the date of the holding of the same, may be proved by
9 reference to the note register.
10 14. Deliverv; Application of Proceeds. The 2010 Notes when so prepared and executed shall
11 be delivered by the Director, Office of Financial Services, to PFA thereof prior to disbursements pursuant
12 to the Project Loan Agreement(s), and PFA shall not be obliged to see to the proper application thereof.
13 15. Fund and Accounts. For the convenience and proper administration of the proceeds from
14 the sale of the 2010 Notes and for the payment of principal of and interest on the 2010 Notes, the Board
15 of Water Commissioners Water Utiliry Enterprise Fund (the "Water Utility Fund", heretofoce in
16 resolutions relating to the 1998 Note, 2003 Bonds, 2005 Bonds and 2007 Bonds also referred to as the
17 "Water Utility Fund") heretofore created shall continue in Force and effect as a separate fund of the City
18 and of the Boazd until all of the 2010 Notes and interest thereon, have been fully paid, and as specified
19 herein until the 2010 Notes and interest thereon have been fully paid. The Treasurer and all municipal
20 officials and employees concemed therewith shall establish and maintain financial records of the receipts
21 wd disbursements of the Water Utility in accordance with this Resolution. In such records there shall be
22 maintained accounts of the Water Utility Fund for the purposes and in the amounts as follows:
23 (a) PFA Construction Account. A"PFA Construction AccounP', to wluch shall be credited
24 all proceeds received from the sale of the 2010 Notes, to sepazate subaccounts therein established for each
25 of the 2010 Notes. The 2010 Notes shall be the only source of money credited to the PFA Constructiou
26 Account. It is recognized that the sale proceeds of the 2010 Notes are received in reimbursement for
27 costs expended on the 2010 Projects or in direct payment of such costs, and that accordingly the moneys
28 need not be placed i� the appropriate subaccount of the PFA Construction Account upon receipt but may
29 be applied immediately to reimburse the source from which the expenditure was made. The money in the
30 PFA Constnxction Account shall be used solely for the purpose of paying for (i) the cost of acquiring,
31 constructing, installing and equipping the 2010 Projects, including all costs enumerated in Section 475.65
32 of the Municipal Debt Act, and (ii) the costs of issuance for the 2010 Notes provided thaC such money
33 shall only be expended for costs and expenses which aze pernutted under the Project Loan Agreement(s).
34 The PFA prohibits the use of proceeds of the 2010 Notes to reimburse costs initially paid from proceeds
35 of other obligations of the City unless otherwise specifically approved. Upon completion of the 2010
36 Projects, and the payment of the costs thereof, any surplus shall be transferred to the Revenue Bond Debt
37 Service Account.
38 (b) Operation ancl Maintenance Account. An "Operation and Maintenance AccounY', into
39 which shall be paid all gross revenues and earnings derived from the operation of the Water Utility
40 system including any assessments which may from time to time be levied with respect to the Water
41 Utility. From this account there shall be paid ali, but only, current expenses of the Water Utility system.
42 C�rrent expenses shall include the reasonable and necessary costs of administering, operating,
43 maintaining and insuring the Water Utility system, salaries, wages, costs of materials and supplies, costs
44 of water production and distribution, necessary legal, engineering and auditing services, and all other
45 items which, by sound accounting practices, constiwte normal, reasonable and current costs of operation
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1 and maintenance, but excluding any allowance for depreciation, extraordinary repairs and payments into
2 the Revenue Bond Debt Service Account and Reserve Account. There shall at all times be maintained in
3 said account a reserve in an amount sufficient to cover the operation and maintenance costs of the Water
4 Utility system for the ensuing fifteen (15) day period; neither said reserve nor any annual addition thereto
5 shall constitute "Net Revenues" as defined below. The balance from time to time remaining in the
6 Operation and Maintenance Account, including interest or other eamings received from the investment of
7 any money in the Water Utility Fund, after paying or providing for the foregoing items, shall constitute,
8 and aze referred to in this Resolution as, "Net Revenues". Payments of fees to trustees for bonds, to
9 providers of liquidity facilities or credit enhancement facilities for bonds and remazketing agents for
10 bonds are also cusent expenses.
11 (c) Revenue Bond Debt Service Accaunt. A"Revenue Bond Debt Service Account", into
12 which there shall be credited and to which there is hereby irrevocably pledged from the Net Revenues of
13 the operation of the Water Utility system monthly (i) commencing in July, 2010 a sum equal to at least
14 one-fourth (1/4`�) of the principal of and interest due on the 2010 Notes on December 1, 2010, and
15 (ii) commencing, November, 2010, a sum equal to at least 1/12�' of the total principal and interest on the
16 2010 Notes and a�y other bonds or notes issued on a parity therewith during the ensuing twelve (12)
17 months; provided, however, that no further payments need be made to said account when the money held
18 therein is sufficient for the payment of all principal and interest due on said bonds and notes on and prior
19 to the next maturity date that aze issued on a parity with the 2010 Notes. No money shall be paid out of
20 the Revenue Bond Debt Service Account except to pay principal, premium, if any, and interest on the
21 2010 Notes and any other bonds or notes which aze issued on a parity with the 2010 Notes.
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(d) Reserve Account. A"Reserve Account", which was heretofore created, and is hereby
continued, to be used only when and if mo�ey in the Revenue Bond Debt Service Account or other
money available therefor is insufficient to pay principal, premium, if any, and interest on the 2010 Notes
and other parity bonds and notes payable from the Revenue Bond Debt Service Account. Provided,
however, that the money in the Reserve Account may be used to prepay said bonds and notes, when such
pxepayment will retice a11 of the bonds and notes of a series then outstanding. On the data of issuance of
the Series 2010 Note, an amount allocable to each Series 2010 Note shall be deposited in the Reserve
Account from the retained earnings of the Water Utility so that the amount therein is equal to the reserve
requirement discussed below. Excesses in the Reserve Account shall be removed from the Reserve
Account upon the issuance of the 2010 Notes and deposited in the Revenue Bond Debt Service Account;
and other amounts in the Reserve Fund pursuant to the resolutions authorizing the 1998 Note, 2003
Bonds, 2005 Bonds and 2007 Bonds shall be maintained therein upon the issuance of the 2010 Notes and
thereafter to the extent necessazy to equal the amount required to be maintained in the Reserve Account as
set forth below, being initially amounts required for the 1998 Note, 2003 Bonds, 2005 Bonds, 2007
Bonds and 2010 Notes. Whenever the money in the Reserve Account exceeds 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 money 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
arnount required to be maintained in the Reserve Account shall be an amount equal to the lesser of:
(1) ten percent (10%) of the original principal amount 2010 Notes on a parity of lien therewith, or (2) the
masimum principal and interest due in any yeaz on the bonds and notes payable from the Revenue Bond
Debt Service Account that aze on a parity with the 2010 Notes; and whenever the money in the Reserve
Account exceeds such amount required to be maintained therein, such excess may be transferred to the
Revenue Bond Debt Service Account. When only bonds or notes issued afrer the 1994 Bonds aze
outstanding, the "ma;cimum principal and interest due in any yeaz" on variable rate bonds shall be
calculated at such time (for any variable rate bonds issued prior to such time) or in connection with their
issuance (for variable rate bonds issued afrer 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
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1 time (for any variable rate bonds issued prior to such time) or at the time of their issuance (for variable
2 rate bonds issued after such time) for utility revenue bonds of comparable quality, maturity and taxable or
3 taY-exempt status, provided that other or different assumptions may be used if necessazy to obtain an
4 investment grade credit rating for the variable rate bonds or to maintain the credit rating(s) then in effect
5 forthe bondsthen ouutanding.
6 (e) Fxcess Net Revenues. Net Revenues in excess of [hose required for the foregoing
7 purposes may be used for any proper purpose.
8 (� Deficiency. The money in the Water Utility Fund shall be allotted and paid to the various
9 accounts herein established in the order in which said accounts aze listed on a cumulative basis, and if in
10 any month the money in said accounts is insufficient to place the required amount in any accounts, the
11 deficiency shall be made up in the following month or months after payment into all other accounts
12 having a prior claim on said Net Revenues have been made in full.
13 (g) Separate Accounts All money held in the Revenue Bond Debt Service Account and the
14 Reserve Account created by this Resolution shall be kepi sepazate and apart from all other municipal
15 funds and accounts.
16 (h) Rebate. Notwithstandi�g anything to the contrary herein, money in the Water Utiliry
17 Fund and any account thereof may be used to pay any rebate of excess arbitrage earnings on gross
18 proceeds of the 1998 Note, 2003 Bonds, 2005 Bonds, 2007 Bonds and 2010 Notes to be paid to the
19 United States in order to maintain the exclusion from gross income under Section 103 of the Code (as
20 hereinafter defined) of the interest on the 1998 Note, 2003 Bonds, 2005 Bonds, 2007 Bonds and 2010
21 Notes.
22 (i) Subordinate Liens. Accounts created for bouds, notes or obligations with a lien oo Net
23 Revenues subordinate to the lien of the 2010 Notes shall be maintained and operated as required by the
24 resolutions authorizing the same.
25 (j) Investments. No portion of the proceeds of the 2010 Notes shall be used directly oc
26 indirectly to acquire higher yielding investments or to replace funds which were used directly or
27 indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such
28 proceeds aze needed for the purpose for which the 2010 Notes was issued, (2) as part of a reasonably
29 required reserve or replacement fund not in excess of ten percent (10%) of the proceeds of the 2010 Notes
30 (or in a higher amount which the City establishes is necessazy to the satisfaction of the Secretary of the
31 Treasury of the United States), and (3) in addition to the above in an amount not greater than the lesser of
32 (i) five peroent (5%) of the proceeds of the 2010 Notes or (ii) $1OQ000. To this effect, any proceeds of
33 the 2010 Notes and any sums from time to time held in the PFA Constrnction Account, Operation and
34 Maintenance Account, Reserve Account or Revenue Bond Debt Service Account (or any other City or
35 Boazd account which will be used to pay principal or interest to become due on the 2010 Notes, bonds or
36 notes payable therefrom) in excess of amounts which under the federal azbitrage regulations may be
37 invested without regazd to yield shall not be invested at a yield in excess of the applicable yield
38 restrictions imposed by said arbitrage regulations on such investments after taldng into account any
39 applicable "temporary periods", minor portion or reserve made available under the federal arbitrage
40 regulations. Money in the Water Utility Fund shall not be invested in obligations or deposits issued by,
41 guaranteed by or insured by the United States or any agency or instrumentaliry thereof if and to the extent
42 that such investment would cause the 2010 Notes to be "federally guaranteed" within the meaning of
43 Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code").
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1 16. Paritv Bonds. The 1998 Note, 2003 Bonds, 2005 Bonds, 2007 Bonds and 2010 Notes
2 shall be a fust charge and lien upon the Net Revenues of the Water Utllity. No part of such Net Revenues
3 shall be pledged to the payment of any general obligation bonds issued by the City while the 2010 Notes,
4 any 1998 Note, 2003 Bonds, 2005 Bonds, 2007 Bonds and 2010 Notes or bonds or notes issued on a
5 parity therewith remain outstanding and undischazged, unless the pledge of Net Revenues to such general
6 obligation bonds is exgressly made a second and subsequent lien and the City and Boazd covenant to
7 make the rates and charges of the Water Utility sufficient to timely pay such general obligation bonds.
8 No additional revenue obligations payable from the Revenue Bond Debt Service Account shall be
9 hereafrer issued unless the same aze expressly made a second and subsequent lien upon the Net Revenues
10 of the Water Utiliry; provided, however, that additional obligations may be issued on a parity of lien with
11 the 2010 Notes, provided that the annual Net Revenues of said Water Uality for each of the two
12 (2) completed fiscal yeazs immediately preceding the issuance of such additional obligadons shall have
13 been one and one-half (1.5) times the maximum annual principal a�d interest coming due thereafter on all
14 outstanding revenue obligations payable from and having a parity of lien upon the Net Revenues of the
IS Water Utility Fund, including the additional obligations so to be issued; provided further, however, that if
16 the annual Net Revenues in either or both of the aforesaid two (2) completed fiscal years shall be
17 insufficient to meet this test then any reasonably projected increase in Net Revenues for the fiscal year
18 immediately following such second completed fiscal yeaz may be added to the Net Revenues for such
19 completed fiscal years or either of them (but the total of such projected increase in Net Revenues may be
20 added only once) in applying the foregoing test.
21 For purposes of the foregoing limitations, the "maximum annual principal and interest coming
22 due thereafter" o� variable rate bonds shall be calculated assuming the variable rate bonds beaz fixed
23 interest at the rates prevailing at the time of the calculation for utility revenue bonds of comparable
24 quality, maturity (or remaining maturity) and taacable or tas-exempt status, provided that other or different
25 assumptions may be used if necessary to obtain an investment grade credit rating for the `variable rate
26 bonds or to maintain the credit rating(s) then in effect for the bonds then outstanding.
27 Such facts shall be shown by the Certificate of the General Manager of the Boazd of Water
28 Commissioners and shall be a finding of and recited in the resolution of the City authorizing any such
29 additional series. In addition, the following conditions shall be met:
30 (a) Pre-Issuance Payments. The payments required to be made (at the time of the issuance
31 of such parity lien bonds) into the various funds and accounts provided for in this Resolution have been
32 made.
33 (b) Maturities. All such parity lien bonds shall have a December 1 maturity or maturities and
34 shall have semiannual interest payments on June 1 and December 1 in each year; provided that interest
35 payments may be more frequent than semiannually or on dates other than June 1 and December 1 if such
36 interest is paid in full only if at the time of payment the interest deposits into the Revenue Bond Debt
37 Service Account for interest payments on June 1 or December 1, as appropriate, on other bonds aze
38 current, and any insufficiency of interest on all parity bonds is allocated proportionately in each six-month
39 period ending June 1 or December 1, as appropriate.
40 (c) Purposes. The proceeds of such parity lien bonds shall be used only for the purpose of
41 (1) making improvements, additions, extensions, renewals or replacements to the Water Utility, and
42 capitalizing interest or establishing Reserves: and paying the costs of such financing, or (2) refunding
43 parity lien bonds (provided that bonds which refund parity lien bonds may instead derive their parity lien
44 status from paragraphs 17 or 23 as applied in paragraph 18).
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1 The 2010 Notes shall have a priority of lien over the 1996 Note, and the pledge and appropriation
2 of Net Revenues of the Water Utility for the payment of the 2010 Notes shall be superior to the pledge
3 and appropriate to the 1996 NoTe.
4 17. Refundin� Maturin� Bonds. The City also reserves the right and privilege of issuing
5 additional revenue bonds if and to the extent needed to refund maturing bonds payable from money in the
6 Water Utility Fund in case the money in the Revenue Bond Debt Service Account are insufFicient to pay
7 the same at maturity, which refunding revenue bonds may be on a parity with this issue as to interest
8 payments even if such interest is in excess of the interest on the refunded bonds, but shall mature
9 subsequent to all the revenue obligations which are payable from the Net Revenues of the Water Utility
10 Fund and which are still outstanding upon completion of such refunding.
1 I 18. Other Revenue Obli�ations. Except as authorized in paragraphs 16, 17 and 23 hereof, the
12 City covenants and agrees that it will issue or incur no obligations payable from the Net Revenues of all
13 or a part of said Water Utility or constituting in any man�er a lien thereon, unless such obligations aze
14 expressly made junior and subordinate to the lien and chazge of the 2010 Notes on said Net Revenues. If
15 bonds which cefund the 2010 Notes aze parity lien bonds, they shall en}oy comQlete equality of lien with
16 any portion of the 2010 Notes not refunded and any other then outstanding bonds payable from the
17 Revenue Bond Debt Service Account, if any there be, and such refunding bonds shall continue to have
18 whatever priority of lien over subsequent issues that the refunded bonds may have had. If only a portion
19 of the outstanding 2010 Notes shall be refunded and if such 2010 Notes shall be refunded in such manner
20 that the interest rate of any refunding bond shall be greater than the interest rate of the corresponding
21 refunded 2010 Notes (or the average net interest rate of the refunding bonds shall be, or shall be
22 reasonably estimated to be, higher than the average net interest rate of the refunded 2010 Notes), or that
23 the maturity date of any refunding bond shall be earlier than the maturiry date of the corresponding
24 refunded 2010 Notes (or the average maturity of the refunding bonds shall be earlier than the average
25 maturity of the refunded 2010 Notes), theu such 2010 Notes may not be refunded without the consent of
26 the holders ofthe unrefunded portion ofthe 2010 Notes and any other bonds then outstanding payable
27 from the Revenue Bond Debt Service Account unless the Net Revenues coverage test of pazagraph 16 is
28 met.
29 19. InsufPicient Amounts. In the event that the money in the Revenue Bond Debt Service
30 Accouot and Reserve Account shall be insufficient at any particulaz time to pay the principal then due and
31 interest then accrued on all bonds payable from the Revenue Bond Debt Service Account, said moneys
32 shall fust be applied to the payment pro rata of the accrued interest on all such bonds, payable over a
33 period ending on June 1 or December 1, as appropriate, and any balance shall be applied in payment pro
34 rata of the principal on all such bonds, provided further that if it sha11 ever be detemuned by a court of
35 competent jurisdiction while any such bonds remain outstanding that the sums available and to become
36 available for the payment of the principal thereof and interest thereon aze insufficient whether or not then
37 due, then the money in the Revenue Bond Debt Service Account and Reserve Account shall be applied in
38 payment of all principal then outstanding whether or not then due and the interest accrued thereon to the
39 date of payment ratably according to the aggregate amount thereof without any preference or priority.
40 20. Suit bv Bondholders. The Holders of twenty percent (20%o) or more in aggregate
41 principal amount of bonds issued under this Resolution and at any time outstanding may, either at law or
42 in equity, by suit, action, or other proceedings, protect and enforce the rights of all Holders of the 2�10
43 Notes then outstanding or enforce or compel the performance of any and all of the covenants and duties
44 specified in this Resolution to be performed by the City or Boazd or their officers and agents, including
45 the fixing and maintaining of rates and chazges and the collection and proper segregation of revenues and
46 the application and use thereof.
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1 21. Covenants. For the protecrion of the Hotders of the 2010 Notes, the City herein
2 covenants and agrees to and with the holders thereof from time to time as follows:
3 (a) Operate as a Water Utiliry. It will at all times through its Boazd adequately maintain and
4 efficiently operate the Water Utility as a City utility. It will from time to time make all needful and proper
5 repairs, replacements, additions and betterments to the equipment and facilities of said Water Utility so
6 that they may at ail times be operated properly and advantageously, and whenever any equipment of said
7 system shall have been wom out, destroyed or otherwise become insufficient for proper use, it shall be
8 promptly replaced or repaired so that the value and efficiency of the facilities shall be at all times fully
9 maintained and its revenues unencumbered by reason thereof.
10 (b) Customary Rates. The rates for all water service and the charges for all water supplied
11 by the Water Utility to the City and its residents and to all other consumers shall be reasonable and just,
12 taking into account the cost and value of the Water Utility, the cost of maintaining and operating the
13 Water Utility and the proper and necessazy allowances for depreciation, the amounts required for the
14 payment of principal and interest on the bonds payable from the Net Revenues of the Water Utility, and
I S all other sums customarily paid from the revenues of the Water Utility.
16 (c) Maintain Rates. It will as required by Section 10.112 of the City Charter (and it will
17 continue to do so whetber or not required by said Charter) establish, maintain and collect such charges
18 and rates as will produce revenues sufficient to pay the reasonable cost of operation, repair and
19 maintenance of the Water Utility and to pay the interest on arid principal of the 2010 Notes and all bonds
20 on a parity of lien with the 2010 Notes, as and when they become due, as well as to provide sufficient
21 money to make the required appropriations to the various funds and accounts established herein. The
22 City will review the schedule of rates and chazges for the Water Utility at least annually when the Boazd
23 budget is reviewed.
24 (d) No Sale of Utility. It will not sell, lease, mortgage, or in any manner dispose of the Water
25 Utility or any part thereof (including any and all extensions and additions that may be made thereto) until
26 all revenue bonds payable from the Net Revenues of the Water Utility or any part thereof have been paid
27 in full; provided, however, that the City may sell the Water Uulity or any part thereof if simultaneously
28 with or prior to said sale all of the outstanding bonds are dischazged in accordance with pazagraph 23 of
29 this Resolution. This covenant shall not be construed to prevent the sale by the City at fair market value
30 of real estate, equipment or other non-revenue-producing properties which in the judgment of the City
31 have become unnecessazy, uneconomical or inexpedient to use in connection with the Water Utility
32 provided that suitable facilities aze obtained in place theceof and provided furthec that nothing hecein is
33 intended to prevent the City or Board from terminating or otherwise preventing the temunation of
34 contracts for the furnishing of water.
35 (e) Books and Records. It shall cause to be kept proper books, records and accounts adapted
36 to the Water Utility separate from other accounts to be audited at the end of each fiscal yeaz. A copy of
37 said audit shall be furnished, without cost, to the PFA. If the City fails to provide such audit within a
38 reasonable time afrer the end of said fiscal year, the PFA may cause such audit to be made at the expense
39 of the City. T`he expense of preparing such audit shall be paid as current operating expenses of the Water
40 Utility. The PFA or its duly appointed representatives, from time to time shall have the right, at all
41 reasonable times, to inspect the Water Utility system and to inspect and copy the books, records, accounts
42 and data relating thereto. The City agrees to furnish copies of such audit, without cost, to the PFA at its
43 request within a reasonable time after the end of each fiscal yeaz.
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10-641
1 (� Duties. It will faithfully and punctually perform all duties with reference to the Water
2 Utility requ'ued by the City Charter, the Constitution and laws of the State of Minnesota and this
3 Resolution.
4 (g) Competition. It will a ant no franchise to any competing utility.
5 22. Amendments. No change, amendment, modification or alteration shall be made in the
6 covenants made with Holders of the 2010 Notes without the consent of the Holders of not less than sixty
7 percent (60%) in principal amount of such 2010 Notes then outstanding except for changes, amendments,
8 modifications and alterations (a) made to cure any ambia ity or formal defect or omission, or (b) which
9 would not materially prejudice the Holders of such outstanding 2010 Notes; provided, however, that
10 nothing herein contained shall permit or be construed as permitting (1) an extension of the maturity of the
11 principal of or the interest on any such 2010 Notes, or (2) a reduction in the principal amount of any such
12 2010 Notes or the rate of interest thereon, or (3) a privilege or priority of any such 1998 Note, 2003
13 Bonds, 2005 Bonds, 2007 Bonds or 2010 Notes over any other bond or bonds except as otherwise
14 provided herein, or (4) a reduction in the aggregate principal amount of such 2010 Notes required for
15 consent to any change, amendment, modification or alteration, or (5) the creation of any lien ranking prior
16 to or on a parity with the lien of such 2010 Notes, except as hereinbefore expressly pernritted, or (6) a
17 modification of any of the provisions of this paragraph without the consent of the Holders of one hundred
18 peroent (100%) of the principal amount of such 2010 Notes outstanding.
19 23. DischarQe. When all 2010 Notes of a series have been dischazged as provided in this
20 pazagraph, all pledges, covenants and other rights granted by this Resolution to the Holders of the 2010
21 Notes of such series shall cease. The City may dischazge all 2010 Notes of a series which are due on any
22 date by depositing with the paying agent (but not if a City officer is the paying agent) or an escrow agent
23 for such 2010 Notes on or before that date a sum sufficient for the payment thereof in full; or if any 2010
24 Notes should not be paid when due, it may nevertheless be dischazged by depositing with the paying
25 agent (but not if a City officer is the paying agent) oc an escrow agent a sum sufficient for the payment
26 thereof in full. The City may also dischazge any prepayable 2010 Notes which aze called for redemption
27 on any date when they aze prepayable according to their terms, by depositing with the paying agent (but
28 not if a City officer is the paying agent) or an escrow agent on or before that date an amount equal to the
29 principal, interest and redemption premium, if any, which aze then due, provided that notice of such
30 redemption has been duly given as provided in this Resolution. The City may also at any time discharge
31 all or a series of the 2010 Notes in whole or in part by complying with the applicable provisions of
32 Section 475.67 of the Municipal Debt Act, and any amendments thereto, except that the funds deposited
33 in escrow in accordance with said provisions may but �eed not be in whole or part proceeds of advance
34 refunding bonds. The City may dischazge 2010 Notes as herein provided without the consent of any
35 Bopdholders.
36 24. Fiscal Yeaz. As used in this Resolution the words "fiscal year" shall mean the twelve
37 (12) month period beginning on January 1 of each yeaz and ending on December 31 of the same yeaz.
38 Should it be deemed advisable at some later date to change the fiscal yearly basis, the same may be done
39 by proper actions to that effect, which change shall not constitute an amendment or modification of this
40 Resolution.
41 25. Froject Loan Agreement(s). The Project Loan Agreement(s) are hereby approved in
42 substantially the form heretofore presented to the City Council, and in the form ezecuted is hereby
43 incorporated by reference and made a part of this Resolution. Each and all of the provisions of this
44 Resolution relating to the 2010 Notes are intended to be consistent with the provisions of the Project Loan
45 Agreement(s), and to the extent that any provision in the Froject Loan Agreement(s) is in conflict wiCh
46 this Resolution as it relates to the 2010 Notes, then that provision shall control and this Resolution shall
14
10-641
1 be deemed accordingly modified. The Mayor (or his designee), the City Clerk (or desia ee), and the
2 Director, OfFice of Financial Services (or her desia ee), are hereby authorized and directed to execute the
3 Project Loan Agreement(s). The execution of the Project Loan Agreement(s) by the appropriate officials
4 shall be conclusive evidence of the approvai of the Project Loan Agreement(s) in accordance with the
5 terms hereof.
6 26. Records and CeRificates. The officers of the City aze hereby authorized and directed to
7 prepare and fumish to the PFA, and to Kennedy & Graven, Chartered, bond counsel to the City, certified
8 copies of all proceedings and records of the City relating to the 2010 Notes and to the financial condition
9 and affairs of the City, and such other affidavits, instmments, certificates, and information as are required
10 to show the facts relating to the legality and marketability of the 2010 Notes as the same appeaz from the
11 books and records under their custody and control or as otherwise known to them, and all such certified
12 copies, certificates, and aff'idavits, including any heretofore furnished, sha11 be deemed representations of
13 the City as to the facts recited therein.
14 All documents, certificates, and instrumeuts relating to the issuance of the 2010 Notes, i�cluding
15 the forms of the 2010 Notes may be executed and delivered by the Mayor, the City Clerk, and Director,
16 Office of Financial Services, or their designees or executive assistants, or, in the case of the Mayor, the
17 Deputy Mayor, as deternuned by Kennedy & Graven, Chartered, as bond counsel to the City, and the
18 Off'ice of the City Attomey.
19 27. Ne¢ative Covenants as to Use of Proceeds and Improvements. The City hereby
20 covenants not to use the proceeds of the 2010 Notes, or to cause or permit them or any of them to be used,
21 or to enter into any deferred payment arrangements for tk�e cost of 2010 Projects, in such a manner as to
22 cause the 2010 Notes to be "private activity bonds" within the meaning of Sections 103 and 141 through
23 150 of the Code. The City reasonably expects that no actions will be taken over the term of the 2010
24 Notes that would cause them to be private activity bonds, and the average term of the 2010 Notes is not
25 longer than reasonably necessary for the governmental purpose of the issue. The City hereby covenants
26 not to use the proceeds of the 2010 Notes in such a manner as to cause the 2010 Notes to be "hedge
27 bonds" within the meaning of Section 149(g) of the Code.
28 28. Tax-Exempt Status of the 2010 Notes; Rebate; Elections. The City shall comply with
29 requirements necessary under the Code to establish and maintain the exclusion from gross income under
30 Section 103 of the Code of the interest on the 2010 Notes, including without limitation requirements
31 relating to temporary periods for investments, limitations on amounts invested at a yield greater than the
32 yield on the 2010 Notes, and the rebate of excess investment eaznings to the United States.
33 The City expects that the two-yeaz expenditure exceptiou to the rebate requirements may apply to
34 the construction proceeds of the 2010 Notes.
35 If any elections are available now or hereafter with respect to azbitrage or rebate matters relating
36 to the 2010 Notes, the Mayor, Clerk, Treasurer and Director, Office of Financial Services, or any of them,
37 are hereby authorized and directed to make such elections as they deem necessary, appropriate or
38 desirable in connection with the 2010 Notes, and all such elections shall be, and shall be deemed and
39 treated as, elections of the City.
40 29. Tax-Exemot Status of the 2010 Notes; Rebate. The City with respect to the 2010 Notes
41 shall comply with requirements necessazy under the Code to establish and maintain the exclusion from
42 gross income under Section 103 of the code of the interests on the 2010 Notes, including without
43 limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts
44 invested at a yield greater than the yield on the 2010 Notes, and (3) the rebate of excess investment
15
10-641
1 eaming to the United States. The City covenants and agrees with the PFA and holders of the Note that
2 the investments of proceeds of the Note, including the investment of any revenues pledged to the Note
3 which are considered gross proceeds of the 2010 Notes under the applicable regulations, and accumulated
4 sinking funds, if any, shall be limited as to amount and yield in such manner that the 2010 Notes shall not
5 be arbitrage bonds within the meaning of Section 148 of the Code and any regulations thereundec On the
6 basis of the existing facts, estimates and circumstances, including the foregoing findings and covenants,
7 the City hereby certified that it is not expected that the proceeds of the Series 2010 Notes will be issued in
8 such manner as to cause the 2010 Notes to be azbitrage bonds under section 148 of the Code and any
9 regulations thereunder. The Mayor (or his designee), City Clerk (or designee), and Director, Office of
10 Financial Services (or her designee), shail furnish a certificate [o the FPA embracing or based on the
11 foregoing certification at the time of delivery of the Series 2010 Notes.
12 30. No DesiQnation of Oualified Tax-Exempt Obligations. The 2010 Notes, together with
13 other obligations issued by the City in calendar year 201Q exceed in amount those which may be
14 qualified as "qualified tax-exempt obligatio�s" within the meaning of Section 265(b)(3) of [he Code, and
15 hence are not designated for such purpose.
16 31. Ne¢otiated Sale. The City has retained Springsted Incorporated as an independent
17 financial advisor, and this Council has heretofore determined, and does hereby deternune, to sell the 2010
18 Notes by private negotiation to PFA.
19 32. Paritv Findin¢s. It is hereby found, determined and declared that:
20 (a) The City does not have any outstanding bonds, warrants, certificates, or other obligatio�s
21 or evidences of indebtedness, or money bonowed for or on account of the Water Utility or indebtedness
22 for which any of the Net Revenues of all or a part of the Water Utility have been pledged which aze a
23 prior lien on such Net Revenues, except the 1998 Note, 2003 Bonds, 2005 Bonds, 2007 Bonds and the
24 subordinate 1996 Note.
25 (b) All payments required to be made prior to the date hereof into the various funds and
26 accouuts of the "Water Utility Fund" established pursuant to the resolutions of this City Council which
27 authorized the issuance of the 1998 Note, 2003 Bonds, 2005 Bonds, 2007 Bonds have been made.
28 (c) This City Council has been fumished with the Certificate of the General Manager of
29 Saint Paul Regional Water Services, attesting to the fact that the issuance of the 2010 Notes complies with
30 the financial requirements relating to the issuance of Additional Bonds on a parity with prior senior lien
31 bonds.
32 (d) This City Council, pursuant to advice from the General Manager of Saint Paul Regional
33 Water Services, hereby finds, deternunes and declazes that the estimated Revenues to be derived from the
34 operation of the Water Utility daring the term of the 2010 Notes will be more than sufficient to provide
35 Net Revenues adequate to pay principal and interest when due on the 2010 Notes and on those other
36 bonds which are now outstanding and to maintain the Reserve Account required therefor.
37 (e) The 2010 Notes have June 1 and December 1 maturities (as shown on EXHIBIT A and
38 EXHIBIT B hereto) and have interest payments on June 1 and December 1, commencing December 1,
39 2010.
40 33. Covenant with Holders. Each and all of the terms and provisions of this Resolution shall
41 be and constitute a covenant on the part of the City to and with each and every Holder from time to time
42 of the Bonds.
16
10-641
1 34. Severabilitv. If any section, pazagraph or provision of this Resolution shall be held to be
2 invalid or unenforceable for any reason,the invalidity or unenforceability of such section, paraa aph or
3 provision shall not affect any of the remaining provisions of this Resolution
4 35. Headines. Headings in this Resolution are included for convenience of reference only
5 and are not a part hereof, and shall not limit or define the meaning of any provision hereof.
Bosaom
Stazk
Thune
Yeas I Navs I Absent
Adopted by Council: Date �����dJ�
AdopGOn Certified by Coui .il Secretary
By:
Approved yo Date 1jL
By:
Re sted b Dep tment of: f �, �4! �(����y�i,�
R., D �
�
17
10-641
Green Sheet Green Sheet Green �heet Green Sheet Green Sheet Green Sheet �
FS - Financial Services
Gontad Person � Phone:
Bob Geurs
6-8837
Doc.
on Gouncil Agenda by (Date):
�cumEnt Required: Y "
Document Contact: 7o follow Public He
Contact Phone: on Budget
01JUN2010 I Green Sheet NO: 3113716
�
Assign
Number
For
Routing
Order
Total # of Signature Pages _(Clip All Locations for Signature}
0 �Financial Services I(d7 D (9Lh.... �
I ffinaucial Servica Deoarfm ent Directorr ,
2 ICiN Attornet� f Citv Attornev I� ,
3 DYtayor's�ce �1 MavodASSistant , �!
Approve attached fina] resolution accepting the offer of the Minnesota Public Facilities Authoriry to purchase Water Revenue Notes
in 2 or more series in an aggegate principal amount not to exceed $30,OOQ000 providing for the issuance of the series 2010 Notes, &
authoriting execution of project loan aa eements with th Minne Public Faciliries Authority. Interest rate is 1.97% for 20 yeazs.
Tiw,A �s c c.a� 6c�' At�-o�.d�/l �r �s 3 f�� 8 s6.
Recommendations: ApproJe (A) or Re�ect (R):
Pianning Commission
qB Committee
Civil Service Commission
Personal Service Contrecks Must Answer the Foilowing Questions:
1. Has this person/firm ever worked under a contract for tnis department�
Yes No
2. Has this person/frm ever been a city employee?
Yes No
3. Does this person/firtn possess a skill not normally possessed by any
current city employee?
Yes No
EXplain all yes answers on separete sheet and attach to green sheet.
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why�:
Prelimmary Council resolution was adopted on 5/5/201Q CF# 10-441.
Saint Paul Regional W ater Services applied for a loan from the Minnesota Public Facilities Authority to provide financing for the
replacement of the Dale St. Reservoir, meters, lead pipe replacement, and various improvements to the City's Mumcipal Water Urility.
Advantages if Approved:
Note proceeds will be available for financing.
DisadvanWges If Approved:
None known.
Disadvantages If Not Approved:
Note proceeds will nto be available for financing.
Total Amount of �� �� ` �l � �
Transaction: �
Funding Source: � � , �Q�
Financial Information:
(Explain)
CosURevenue Budgeted:
Activity Number:
���— ���� �
lvu�
June 8, 2010 11:08 AM Page 1
10-641
EXHIBIT A
UNITED STATES OF .AbIERICA
STATE OF MINNESOTA
RANISEY COLJNTY
CITY OF SAINT PAUL
$5,96Q000 WATER REVENUE NOTE
SERIES 2010A
KNOW ALL PERSONS BY 'I'HESE PRESENTS that the City of Saint Paul, Ramsey County, Minnesota
(the "City"), certifies that it is indebted aud for value received promises to pay to the Minnesota Public Faciliues
Authority or the registered assign, the pdncipal sum of FIVE MII.LIONS NINE HUNDRED SIXTY THOUS[1ND
DOLLARS ($5,96Q000), or so much [hereof as shall be disbursed, solely from the source and in the manner
hereinafter set forth, on December 1 of the years and in the installments as follows:
Payment Principal Payment Principal
Date Amount Date Amount
2010 $ 1,000 2021 $302,000
2011 132,000 2022 312,000
2012 242,000 2023 482,000
2013 217,000 2024 337,000
2014 197,000 2025 512,000
2015 307,000 2026 286,000
2016 197,000 2027 291,000
2017 177,000 2028 296,000
2018 237,000 2029 306,000
2019 347,000 2030 305,000
2020 477,000
and to pay interest on so much of the principal amount of the debt as (i) may be disbursed from time to Ume as
provided in the Project Loan Agreement (as defined below) and (ii) cemains unpaid, from December 1, 2010, for
disbursements made on or pdor to that da[e or from [he date of each later disbursement antil the principal amount
hereof is paid or has been provided for, at the rate of [1.975%]% per annum from the date hereof until Decembec 1,
203Q (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Note is payable
semiannually on each June 1 and December I, commencing December 1, 2010.
Princioal and Interest Pavments. Amounts payable on this Series 2010A Note are payable solely from Net
Revenues as provided below. Interest shall accme only on the aga egate amount of this Series 2010A Note which
has been disbursed under the Public Facili[ies Authority Project Loan Aa eement and Revenue Bond Purchase
A�eemeo[ dated as of July 1, 201Q by and between the City and the Minnesota Public Facilities Authority (the
"Project Loan AgeemenP'). The principal installments shall be paid in the amounts scheduled above even if at the
time of payment the full priacipal amount of the Note has not been disbursed; provided that if fhe full principal
amount of tivs Series 2010A Note is nevei disbursed, the amount of the principal not disbursed shall be applied to
reduce each unpaid pilncipal instaliment in the proportion that such installment bears to the total of all unpaid
principal installments (i.e., the remaining principal payment schedule shall, be reamortized to provide
proportio�ately ieduced principal payments). Inteiest on this Series 2010A Note includes amounts treated by [he
Minnesota Public Facilities Authority as service fees. Principal, interest and any prearium due under this
Series 2010A NoCe will be paid on each payment date by wiie payment, o� by check o� drafr mailed five (5) business
days prior to the payment date to the person in whose name this Series 2010A Note is registered, in any coin or
currency of the United States of America which at the time of payment is legal tender for public and private debts.
A-1
10-641
Redemndon. This Series 2010A Note is subject to redempdon and prepayment in whole or in part at the
option of the City or mandatorily as provided in the Project Loan A�eement. If redemption is in part, each
installment of principal shall be prepaid in the proportion that such installment bears to the total of all unpaid
principal installments (i.e., the remaining principal payment schedule shall be reamortized to provide
proportionately reduced principal payments), unless [he City a�d the holder of this Series 2010A Note a�ree ro a
different result.
Issuance: Puroose: Special Oblieation. This Series 2010A Note has been issued pursuant to and in full
conformity with [he Constitution and laws of the Sta[e of Minnesota and the Charter of the Issuer, and pursuani to a
resoLudon adopted by the City Council of the Issuer on June 9, 2010 (ihe "Resolutiod'), for the purpose of providing
money to finance the construction of improvements to the City's Water Utility as more fully described in [he
Resolution. This Series 2010A Note and the interest thereon aze payable solely and exclusively from the Net
Revenues of the Water Uulity of the Issuer pledged to the payment thereof, and do no[ constitute a debt of the Issuer
or of the Saint Paul Board of Water Commissioners within the meaning of any consti[utional, Charter or statutory
limitation of indebtedness. In the event of any default hereunder, the holder of this Series 2010A Note may exercise
any of the rights and privileges granted by the laws of the State of Minnesota, subject to the provisions of the
Resolution. 1'his issue, together with the $16,SOQ000 Water Revenue Note of 1998 (the "1998 Note"), $iQ65Q000
Water Revenue Bonds, Series 2003C ([he "2003 Bonds'), $11,380,000 Water Revenue Bonds, Series 2005D (the
"2005 Bonds"), $8,985,000 Water Revenue Refunding Bonds, Series 2007A (the "2007 Bonds"), and $23,107,000
Water Revenue Note, Series 2010B (the "Series 2010B Note") of the Issuer, except that the Issuer is authorized
under certain conditions to issue additional revenae obligaUOns on a pazity of lien with the Nofe and these bonds, all
as provided in the Resolution.
Re�isaauon: Transfer. This Series 2010A Note shall be Legisteced in the name of the payee on the books
of the City by presenting ttils Series 2010A Note for registration [o the City's Treasurer, who will endorse his or her
name and note the date of registcation opposite the name of the payee in the certificate of registration attached
hereto. Thereafter this Series 2010A Note may be transferred [o a bona fide purchaser only by delivery with an
assignment duly executed by the registered owner or his, her or its legal representative, and the City may treat the
registered owner as the person exclusively entitled to exercise all the rights and powers of an owner antil this Series
2010A Note is presented with such assignment for regisuation of transfer, accompanied by assurance of the namre
provided by law that the assignment is germine and effective, and until such transfet is registered on said books and
noted bereon by the City's Treas�uer.
Fees unon Transfer or Loss. The Treasurer may require payment of a sum sufficient to cover any taac or
other governmental charge payable in connection wi[h the [ransfer of this Series 2010A Note and any legal or
unusual costs regazding transfers and-lost notes.
Project Loan Aereement. The [erms and conditions of [he Projec[ Loan Agreement aze incorpota[ed herein
by �eference and made a part hereof. The Project Loan Agreemeut may be attached to this Series 2010A Note, and
shall be attached to this Series 2010A Note if the holder of this Series 2010A Note is any person othec than the
Minnesota Public Facilities Authority.
Taac-Exemot Oblieatioa The City intends that the interest on [his Sedes 2010A Note will be excluded
from a oss income for United States income tax purposes and from both gross income and. taeable net income fo�
State of Minnesota income tax purposes.
Not OuaLified Tazc-Exemot Oblisation. This Series 2010A Note has not been designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section 265(b) (3) of the federal Internal Revenue Code of 1986,
as amended. This Series 2010A Note does not qaalify for such desi�nation.
IT IS HEREBY CERTIFIED AND RECIT'ED that all acts, conditions and things required by the
Constitution and laws of the State of Minnesota and [he Charter of [he Issuer to be done, to happen and to be
performed, precedent to and in the issuance of this Series 2010A Note, have been done, have happened and have
been performed, in regulu and due form, time and manner as required by law; that [his Series 2010A Note, together
with all other debts of the Issuer outstanding on fhe date hereof, being the date of its actual issuance and delivery,
does no[ exceed any constitutional or statutory or Charter limitauon of indebtedness; and that the Issuer will
A-2
10-641
establish ra[es and charges for the wa[er service furnished by its Water Utility su�cient in amount to prompily meet
[he principal and interes[ requirements of this Series 2010A Note.
(The remainder of tlus page is mtentionally left blankJ
A-3
10-6�31
IN VJITNESS WHEREOF, the City of Saint Paul, Ramsey County, Minnesota, by its City Council has
ca�sed this Series 2010A Note to be executed on its behalf by [he signature of i[s Mayor, attested by the signature of
its Clerk, and countersigned by the signature of its Director, Office of Financial Services, all as of July _ 2010.
CITY OF 5AINT PAUL,
RA�vISEY COUNTY, biINNESOTA
Mayor or designee
Attest:
City Clerk or designee
Coun[ersigned:
Director, Office of Financial Services or designee
A-4
10-641
CERTIFTCATE OF REGISTRATION
The transfer of ownership of the principal amount of the attached Series 2010A Note may be made only by
the registered owner or his, her or its legal representative ]ast no[ed below.
Date of Name and Address Signature
Reaisttation of Registered Owner of City Treasurer
Minnesota Public Facilities Authority
Saint Paul, Minnesota
Federal Employer ldentificarion
Iuly _, 2010 No.41-6007162
A-5
10-641
��:�:tirj���
UNiTED STATES OF �MERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CTTY OF SAINT PAUL
$23,107,000 WATER REVENUE NOTE
SERIES 2010B
KNOW ALL PERSONS BY THESE PRESENTS that the City of Saint Paul, Ramsey County, Minnesota
(the "City"), certifies that it is indebted and for value received promises to pay to the Minnesota Public Facilities
Authority or the rea stered assign, the principal sum of TWEN'I'Y-THREE MII.LION ONE HUNDRED SEVEN
THOUSAND DOLLARS ($23,107,000), or so much thereof as shall be disbursed, solely from the source and in the
manner hereinafter set forth, on December I of the yeazs and in the installments as follows:
Payment Principal Payment Principal
Date Amount Date Amount
2010 $ 1,000 2021 1,150,000
2011 663,000 2022 1,188,000
2012 1,038,000 2023 1,882,000
2013 834,000 2024 1,286,000
2014 753,000 2025 1,989,000
2015 1,187,000 2026 1,078,000
2016 741,000 2027 1,106,000
2017 660,000 2028 1,130,000
2018 908,000 2029 1,154,000
2019 1,327,000 2030 1,186,000
2020 1,846,000
and to pay interest on so much of the principal amount of the debt as (i) may be disbursed from ume to time as
provided in the Project Loan Aa eement (as defined below) and (ii) remains unpaid, from December 1, 201Q for
disbursemenCS made on or prior to that date or from the date of each later disbursement until the principal amount
hereof is paid or has been provided for, at the rate of [ 1.975%]% per annum from the date hereof unfil December 1,
2030 (calculated on the basis of a 360-day yeaz of twelve 30-day months). Interest ou the Note is payable
senuannually on each June 1 and December 1, commencing December 1, 2010.
Frincioal and Interest Pavments. Amounts payable on this Series 2010B Note aze payable solely from Net
Revenues as provided below. Interest shall accrue only on the aga egate amount of this Series 2010B Note which
has been disbarsed under We Public Facilities Authority Froject Loan Aa eement and Revenue Bond Putchase
Agreement dated as of July 1, 2010, by and between the City and the Minaesota Public Facilities Authority (the
"Project Loan Ageement°). The principal installments shall be paid in the amounts scheduled above even if at the
rime of payment the full principal amount of the Note has not been disbursed; provided that if the full principal
amount of this Series 2010B Note is never disbursed, the amount of the principal not disbursed shall be applied to
reduce each unpaid principal installment in the proportion that such installmeat bears to the total of all unpaid
principal installments (i.e., the remaining principal payment schedule shall, be reamortized to provide
proportionately reduced principal payments). Interes[ on this Series 2010B Note includes amounts treated by [he
Minnesota Public Faciliues Authority as service fees. Principal, interest and any premium due under this
Series 2010B Note will be paid on each payment date by wire payment, or by check or draft mailed five (5) business
days prior to the payment date to the person in whose name this Series 2010B Note is registered, in any coin or
currency of the United States of America which at the time of payment is legal tender for public and private debts.
�
10-641
Redemption. This Series 2010E Note is subject to redemption and prepayment in whole or in part at the
option of the City or mandatorily as provided in the Project Loan Agreemen[. If redemption is in part, each
installment of principal shall be prepaid in the proportion that such installme�t beazs to the total of all unpaid
principal installments (i.e., the remaining principal payment schedule shall be reamortized [o provide
proportiona[ely reduced principal payments), unless the City and the holder of this Series 2010B Note aa ee to a
different result.
Issuance; Puroose: S�ecial Obliea[ion. This Series 2010B Note has been issued pursuant ro and in full
conforurity with the Constitution and laws of the State of Minnesota and the Chac[er of the Issuer, and pursuant ro a
resolu[ion adopted by the City Council of the Issuer on June 9, 2010 (the "Resolution"), for [he purpose of providin�
money to finance the construction of improvements to [he City's Water U[ihty, as more fully described in the
Resolution. This Series 2010B Note and the interest thereon aze payable solely and exclusively from the Net
Revenues of the Water Utility of the Issuer pledged to the paymen[ thereof, and do not constitute a debt of the Issuer
or of the Saint Paul Board of Water Commissioners within the meaning of any constitutional, Charter or stamtory
limitauon of indebtedness. In the even[ of any default hereunder, the holder of this Series 2010B Note may exercise
any of the rights and privileges granted by the ]aws of the State of Minnesota, subject to the provisions of the
Resolution. This iss�e, together with the $16,500,000 Water Revenue Note of 1998 (the "1998 Note"), $10,650,000
Water Revenue Bonds, Series 2003C (the "2003 Bonds'), $11,38Q000 Water Revenue Bonds, Series 2005D (the
"2005 Bonds"), $8,985,000 Water Revenue Refunding Bonds, Series 2007A (che "2007 Bonds"), and $5,960,000
Water Revenae Note, Series 2010A (the "Series 2010A Note") of the Issuer, except that the Issuer is authorized
under certain conditions [o issue additional revenue obligations on a parity of lien wi[h the Note and these bonds, all
as provided in the Resolution.
ReQistraaon; Transfer. This Series 2010B Note shall be iegistered in the name of the payee on the books of
the City by presenting this Se�ies 2010B Note for regishation to the City's Treasurer, who will endorse his oc hee
name and ¢ote the date of registration opposite the name of the payee in the certifieate of registcation attached
hereto. Thereafrer this Series 2010B Note may be transferred to a bona fide purchaser only by delivery wi[h an
assignment duly executed by the registered owner or his, her or its legal representative, and the City may treat the
registered owner as [he person exclusively entided to exercise all the rights and powers of an owner until this Series
2010B Note is presented with such assignment for registration of transfer, accompanied by assurance of the nature
provided by law that the assig�ment is genuine and effective, and until such transfer is registered on said books and
noted hereon by the City's T�easucer.
Fees upon Transfer or Loss. The Treasurer may require payment of a sum sufficient to cover any taY or
other govemmental chazge payable in connection wi[h the transfer of this Series 2010B Note and any legal or
unusual costs regarding transfers and-lost notes.
Project I,oan Aereement. The terms and conditions of the Project Loan A�eement are incorporated herein
by ieference and made a part hereof. The Project Loan Agreement may be attached to this Series 2010B Note, and
shall be attached to this Series 2010B Note if the holder of t6is Series 2010B Note is any person other tha� the
Mi�nesota Public Facili[ies Authoriry.
Ta7c-Exempt Oblieation. The City intends tha[ the interest on this Series 2010B Note will be excluded from
a oss income foc United States income taY purposes and from both gross income and. ta�cable net income for State of
Minnesota income tas purposes.
Not Oualified Ta�c-Sxempt Obli�ation. This Secies 2010B Note has no[ been designated by the Issuer as a
"qualified taac-exempt obligation" foi purposes of Sectioo 265(b) (3) of the fedeial Iuternal Revenne Code of 1986,
as amended. This Series 2010B Note does not qualify for such designation.
IT IS HEREBY CERTIFTED AND RECI1'ED that all acts, conditions and things required by the
Co�stimtion and laws of [he State of Minnesota and the Charter of the Issuer to be done, to happen and ro be
performed, precedent to and in the issuance of this Series 2010B Note, have been done, have happened and have
been performed, in regulaz and due form, time and manner as required by law; that this Series 2010B Note, together
with all other debts of the Issuer outstanding on the date hereof, being the date of its actual issuance and delivery,
does not exceed any constituuonal or statu[ory or Charter liaritaUOn of indebtedness; and that the Issuer will
C��
10-641
establish rates and chaz�es for the water service fumished by its Water Utility sufficient in amount to promptly meet
Ihe principal and interest requirements of this Series 2010B Note.
(The remaindec of this page is intentionally lefr b1ankJ
�
10-641
IN WITNESS WFIEREOF, [he City of Saint Paul, Ramsey County, Minnesora, by its City Council has
caused this Series 2010B Note to be executed on iu behalf by the si�nature of i[s Mayor, attested by the si�nawre of
its Clerk, and coun[ersigned by the signa[ure of its Duector, Office of Financial Services, all as of July _ 2010.
CITY OF SAINT PAi3L,
RAMSEY COUNTY, MLNNESOTA
Mayor or designee
Attest
City Clerk or designee
Countersigned:
Directo�, Office of Financial Se�vlces oi designee
�
10-641
CERTIFTCATE OF REGISTRATION
The transfer of ownership of the principal amount of the attached Series 2010B Note may be made only by
the cea stered owner or his, her or its legal cepresentative last noted below.
Date of Name and Address Signature
Regisnation of Registered Owner of City Treasurer
Minnesota Public Facilities Authority
Saint Paul, Minnesota
Federal Employer ldentification
July _,2010 No.41-6007162
SA385-19 (BWJ)
367117v.4
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