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97-719oR����!��_ a Preserrted By Referred To Council File # 1� � 1 l l � Mc ���" � GreenSheet# J��7�� �, �., �� RESOLUTION �F SAINT PAUL, MINNESOTA ��� Z/r///d Committee: Dffie 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 G�. 23 ACCEPTING PROPOSAL ON SALE OF $7,000,000 WATER REVENUE REFUNDING HONDS, SERIES 1997C, AND PROVIDING FOR THEIR ISSUANCE WHEREAS, the Director, Office of Financial Services, has presented proposals received for the sale of $7,000,000 Wate Revenue Refunding Bonds, Series 1997C (the "Bonds" or "1997 Bonds"), of the City of Saint Paul, Minnesota (the "City"); and WHEREAS, the proposals set forth on Schedule A attached hereto were received pursuant to the Terms of Proposal at the offices of Springsted Incorporated at 10:30 A.M., Central Time, this same day; and WHEREAS, the Director, Office of Finan,cial Serv�ces, has advised this Council that the proposal of /�prqan K@�AU.fI �„ ���� _� �, was found to be the most ° advantageous and"� has recommended that said proposal be accepted; and 3537323 ��'� �� WHEREAS, there are currently outstanding bonds of the City payable from Net Revenues of the City�s Water Utility, specifically the City's (a) $11,175,000 Water Revenue Bonds, Series 1993E (the "1993 Bonds"), issued pursuant to a resolution adopted by this Council on June 15, 1993, of which $7,790,000 remain outstanding, and (b) $10,000,000 Variable Rate Demand Water Revenue Bonds, Series 1994D (the "1994 Bonds"), issued pursuant to a resolution adopted by this Council on November 9, 1994, of which $9,600,000 remain outstanding; and WHEREAS, it is necessary and desirable to provide for the issuance of the Bonds on a parity of lien with the 1993 Bonds, to refund, in a current re£unding in advance of their stated maturities, all outstanding 1994 Bonds (also the "Refunded Bonds"); and WHEREAS, the Refunded Bonds are optionally redeemable at any time at a price of par plus accrued interest; and WHEREAS, refunding the Refunded Bonds (the "Refunding") is consistent with covenants made with the holders thereof, and is necessary and desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds which bear interest at a rate varying periodically, in order to avoid the uncertainty of variable rate debt service; and WHEREAS, the proceeds of the Refunded Bonds financed various improvements to the City's municipal water utility (the "Water Utility"), which has since its acquisition in 1885 been under the jurisdiction of the Board of Water Commissioners (the "Board"); and WHEREAS, the Board and this Council deem it necessary and expedient to undertake the Refunding; and WHEREAS, herein the City makes various findings demonstrating the propriety of the issuance of the Bonds on a parity with the 1993 Bonds; and WHEREAS, in accordance with advice received from the Board, this Council finds, determines and declares that it is necessary and expedient to provide moneys to finance the Refunding, continue a Reserve previously established, and provide for the costs of the issuance of the Bonds from the proceeds of bonds payable solely from the Net Revenues of the Water Util.ity; and WHEREAS, the City has heretofore issued registered obliqations in certificated form, and incurs substantial costs associated with their printing and issuance, and substantial 353732.3 2 9�-��°� F� 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 5� continuing.transaction costs selating.to their payment, transfer . and exchange; and WHEREAS, the City has determined that significant savings in transaction costs will result from issuing bonds in "global book-entry form", by which bonds are issued in certificated form in large denominations, registered on the books of the City in the name of a depository or its nominee, and held in safekeeping and immobilized by such depository, and such depository as part of the computerized national securities clearance and settlement system (the "National System") registers transfers of ownership interests in the bonds by making computerized book entries on its own books and distributes payments on the bonds to its Participants shown on its books as the owners 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 WHEREAS, "Participants" means those financial institutions for whom the Depository effects book-entry transfers and pledges of securities deposited and immobilized with the Depository; and WFIEREAS, The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, or any of its successors or successors to its functions hereunder (the "Depository"), will act as such depository with respect to the Bonds except as set forth below, and the City has heretofore delivered a letter of representations (the "Letter of Representations") setting forth various matters relating to the Depository and its role with respect to the Bonds; and WHEREAS, the City will deliver the Bonds in the form of one certificate per maturity, each representing the entire principal amount of the Bonds due on a particular maturity (each a"Global Certificate"), which single certificate per maturity may be transferred on the City's bond register as required by the Uniform Commercial Code, but not exchanged smaller denominations unless the City determines to issue Replacement Bonds as provided below; and date for WHEREAS, the City will be able to replace the Depository or under certain circumstances to abandon the "global book-entry form" by permitting the Global Certificates to be exchanged for smaller denominations typical of ordinary bonds registered on the City's bond register; and "Replacement Bonds'� means the certificates representing the Bonds so authenticated and delivered by the Bond Registrar pursuant to paragraphs 6 and 12 hereaf; and 353732.3 �J 7-719 1 WHEREAS, "Holder" as used herein means the person in 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 whose name a Bond is registered on the registration books of the City maintained by the registrar appointed as provided in paragraph 8 (the "Bond Registrar"); and WHEREAS, pursuant to Minnesota Statutes, Section 475.60, Subdivision 2(9), public sale requirements do not apply to the Bonds, because the City has retained an independent financial advisor and this Council has determined to sell the Bonds by private negotiation, and the City has instead authorized a competitive sale without publication of notice thereo£ as a form of private negotiation; and WHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to provide certain continuing disclosure with respect to the Bonds; and WHEREAS, proposals for Springsted Incorporated pursuant Terms of Proposal therein: the Bonds have been solicited by to an Official Statement and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows: 6 1. Acceptance of Proposal. The proposal of Morgan, Keegan & Company, Inc. (the "PUrchaser"), to purchase $7,000,000 Water Revenue Refunding Bonds, Series 1997C, of the City (the "BOnds" or "1997 Bonds'�, or individually a"Bond" or "1997 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 $6,984,775.00, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser. The Director, Office of Rinancial Services, or his designee, is directed to retain the deposit of the Purchaser and to forthwith return to the others making proposals their good faith checks or drafts. 2. Title; Oriciinal Issue Date: Denominations; Maturities. The Bonds shall be titled "Water Revenue Refunding Sonds, Series 1997C", shall be dated July 1, 1997, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward. Global Certificates sha11 each be in the denomination of the entire principal amount maturing on a single date. Replacement Bonds, if issued as provided in paragraph 6, shall be in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on 3537323 0 � �, �i � multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: Year 1998 1999 2000 2001 2002 2043 2004 2005 Amount $730,000 800,000 420,000 225,000 315,000 660,000 690,000 640,000 Year 2006 2007 2008 2009 2010 2011 2012 Amount $345,000 425,000 595,000 165,000 240,000 400,000 350,000 3. Purpose; Refunding Findincts. The Bonds (together with other available funds appropriated) shall provide funds for a current refunding of the Refunded Bonds (the "Refunding"). The 1994 Bonds were issued to finance improvements to the Water Utility (the "Improvements"). The proceeds of the Bonds shall be deposited and used as provided in paragraph 17. The total cost of the Refunding, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. It is hereby found, determined and declared that (1) the Refunding is pursuant to Minnesota Statutes, Section 475.67, and (2) the Refunding is necessary or desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds, which bear interest at a rate varying periodically. 4. Interest. The Bonds shall bear interest payable semiannually on 3une 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturitv Year Interest Rate Maturitv Year Interest Rate 1998 1999 2000 2001 2002 2003 2004 20�5 4.75� 4.75 4.75 4.75 4.75 4.75 4.75 4.75 2006 2007 2008 2009 201� 2011 2012 4 4 4 5 5 5 5 75% 80 90 00 OQ 00 00 5. DescriAtion of the Global Certificates and Global Book-Entrv Svstem. Upon their original issuance the Bonds will be issued in the form of a single Global Certificate for 353732.3 5 �t�1-r1�°� 4 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 each maturity, deposited with the Depositosy by the Purchaser and immobilized as provided in paragraph 6. No beneficial owners of interests in the Bonds will receive certificates representing their respective interests in the Bonds except as provided in paragraph 6. Except as so provided, during the term of the Bonds, beneficial ownership (and subsequent transfers of beneficial ownership} of interests in the Global Certificates will be reflected by book entries made on the records of the Depository and its Participants and other banks, brokers, and dealers participating in the National System. The Depository's book entries of beneficial ownership interests are authorized to be in increments of $5,000 of principal of the Bonds, but not smaller increments, despite the larger authorized denominations of the Global Certificates. Payment of principal of, premium, if any, and interest on the Global Certificates will be made to the Bond Registrar as paying agent, and in turn by the Bond Registrar to the Depository or its nominee as registered owner of the Global Certificates, and the Depository according to the laws and rules governing it will receive and forward payments on behalf of the bene£icial owners of the Global Certificates. Payment of principal of, premium, if any, and interest on a Global Certificate may in the City's discretion be made by such other method of transferring funds as may be requested by the Holder of a Global Certificate. C=� Pursuant to the request of the Purchaser to the Depository, which request is required by the Terms of Proposal, immediately upon the original delivery of the Bonds the Purchaser will deposit the Global Certificates representing all of the Bonds with the Depository. The Global Certificates shall be in typewritten form or otherwise as acceptable to the Depository, shall be registered in the name of the Depository or its nominee and shall be held immobilized from circulation at the offices of the Depository on behalf of the Purchaser and subsequent bondowners. The Depository or its nominee will be the sole holder of record of the Global Certificates and no investor or other party purchasing, selling or otherwise transferring ownership of interests in any Bond is to receive, hold or deliver any bond certificates so long as the Depository holds the Global Certificates immobilized from circulation, except as provided below in this paragraph and in paragraph 12. Certificates evidencing the Bonds may not after their original delivery be transferred or exchanged except: (i) Upon registration of transfer of ownership of a Global Certificate, as provided in paragraph 12, 3537323 9"1-'1�� FI 5 6 7 8 9 l0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 (ii) To any successor of the Depository (or its nominee) or any substitute depository (a "substitute depository") designated pursuant to clause (iii) of this subparagraph, provided that any successor of the Depository or any substitute depository must be both a"clearing corporation" as defined in the Minnesota Uniform Commercial Code at Minnesota Statutes, Section 336.8-102, and a qualified and registered "clearing agency" as provided in Section 17A of the Securities Exchange Act o£ 1934, as amended, (iii) To a substitute depository designated by and acceptable to the City upon (a) the determination by the Depository that the Bonds shall no longer be eligible for its depository services or (b) a determination by the City that the Depository is no longer able to carry out its functions, provided that any substitute depository must be qualified to act as such, as provided in clause (ii) of this subparagraph, or (iv) To those persons to whom transfer is requested in written transfer instructions in the event that: (a) the Depository shall resign or discontinue its services for the Bonds and the City is unable to locate a ssbstitute depository within two (2) months following the resignation or determination of non-eligibility, or (b) upon a determination by the City in its sole discretion (1) that the continuation of the book-entry system described herein, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds, in either of which events the City shall notify Holders of its determination and of the availability of certificates (the "Replacement Bonds") to Holders requesting the same and the registration, transfer and exchange of such Bonds will be conducted as provided in paragraphs 9B and 12 hereof. In the event of a succession of the Depository as may be authorized by this paragraph, the Bond Registrar upon presentation of Global Certificates shall register their transfer to the substitute or successor depository, and the substitute or successor depository shall be treated as the Depository for all 3537323 7 9�-'1�9 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 puxposes and functions under this Representations shall not apply to depository unless the City and the depository so agree, and a simila 7. Redemption. resolution. The Letter of a substitute or successor substitute or successor r agreement may be entered into_ (a) Optional Redemption; Due Date. All Bonds maturing after December 1, 2005, shall be subject to redemption and prepayment at the option of the City on such date and on any day thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of Che Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City sha11 determine; and if only part of the Bonds having a common maturity date are called for prepayment, the Global Certificates may be prepaid in $5,000 increments of principal and, if applicable, the specific Replacement Bonds to be prepaid shall be chosen by lot by the Bond RegisCrar. 8onds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. (b) Notation on Global Certificate. Upon a reduction in the aggregate principal amount of a Global Certificate, the Holder may make a notation of such redemption on the panel provided on the Global Certificate stating the amount so redeemed, or may return the Global Certificate to the Bond Registrar in exchange for a new Global Certificate authenticated by the Bond Registrar, in proper principal amount. Such notation, if made by the Holder, shall be for reference only, and may not be relied upon by any other person as being in any way determinative of the principal amount of such Global Certificate outstanding, unless the Bond Registrar has signed the appropriate column of the panel. (c) Selection of Replacement Bonds. To effect a partial redemption of Replacement Bonds having a common maturity date, the Bond Registrar prior to giving notice of redemption shall assign to each Replacement Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Replacement Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Replacement Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Replacement Bonds to be redeemed. The Replacement Bonds to be redeemed shall be the Replacement Bonds to which were assigned numbers 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 353732.3 9'1-� tq 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 redeemed as shall equal $5,000 £or each number assigned to it and so selected. (d) Partial Redemption of Replacement Bonds. If a Replacement Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City and Bond Registrar duly executed by the 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 deliver 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 Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion o£ the principal of the Bond so surrendered. (e) Recruest for Redemption. The Bond Registrar shall call Bonds for redemption and payment as herein provided upon receipt by the Bond Registrar at least forty-five (45) days prior to the redemption date of a request of the City, in written form if the Bond Registrar is other than a City officer. Such request shall specify the principal amount of Bonds to be called for redemption and the redemption date. (f) Notice. Mailed notice of redempti the gaying agent (if other than a City office affected Holder. If and when the City shall Bonds for redemption and payment prior to the thereof, the Bond Registrar shall give writte of the City of its intention to redeem and pay suc office of the Bond Registrar. Notice of redempti given by first class mail, postage prepaid, maile thirty (30) days prior to the redemption date, to Bonds to be redeemed, at the address appearing in Register. All notices of redemption shall state: (i) (ii) The redemption date; The redemption price; be given o each of the maturity in the h Bonds at on shall be d not less t each Holder the Bond to name the han of (iii) If less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (iv) That on the redemption date, the redemption price will become due and payable upon each such Bond, and that 353732.3 0 on shall r) and t call any stated n notice 9 ' 1 •' � interest thereon shall cease to accrue from and after said date; and 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 (v) The place where such Bonds are to be surrendered for payment of the redemption price (which shall be the office of the Bond Registrar). (g) Notice to Depositorv. Notices to The Depository Trust Company or its nominee shall contain the CUSIP numbers of the Bonds. If there are any Holders of the Bonds other than the Depository or its nominee, the Bond Registrar shall use its best efforts to deliver any such notice to the Depository on the business day next preceding the date of mailing of such notice to all other Holders. 8. Bond Reqistrar. First Trust National Association in Saint Paul, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. A successor Bond Registrar shall be an officer of the City or a bank or trust company eligible for designation as bond registrar pursuant to Minnesota Statutes, Chapter 475, and may be appointed pursuant to any contract the City and such successor Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the Holders (or record holders) of the Bonds in the manner set forth in the forms of Bond and paragraph 14 of this resolution. 9. Forms of Bond. The Bonds sha11 be in the form of Global Certificates unless and until Replacement Bonds are made available as provided in paragraph 6. Each form o£ bond may contain such additional or different terms and provisions as to the form of payment, record date, notices and other matters as are consistent with the Letter of Representations and approved by the City Attorney. A. G1oba1 Certificates. The Global Certificates, together with the Certificate of Registration, the Register of Partial Payments, the form of Assignment and the registration information thereon, shall be in substantially the £ollowing form and may be typewritten rather than printed: 353732.3 FS�] �1-1�q r� R- INTEREST RATE REGISTERED OWNER: PRINCIPAL AMOUNT: UNITED STATES OF AMERICA STATE OF MINNESOTA RAMSEY COUNTY CITY OF SAINT PAUL WATER REVENUE REFUI3DIATG BOND, SERIES 1997C 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP December 1, iiZiSilFe\:b: KNOW ALL PERSONS BY THESE PRESENTS that the City of Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above or on the certificate of registration below, or registered assigns, solely from the source and in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for earlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, at the rate per annum specified above (calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable in same-day funds by 2:30 p.m., Eastern time, upon presentation and surrender hereof at the principal office of in , Minnesota (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer; provided, however, that upon a partial redemption of this Bond which results in the stated amount hereof being reduced, the Holder may in its discretion be paid without presentation of this Bond, which payment shall be received no later than 2:30 p.m., Eastern time, and may make a notation on the panel provided herein of such redemption, stating the amount so redeemed, or may return the Bond to the Bond Registrar in exchange for a new Bond in the proper principal amount. Such notation, i£ 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 July 1, 1997 353732.3 1 1 q'1-r11� 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 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 2:30 p.m., Eastern time, to the person in whose name this Bond is registered (the "Holder" or "BOndholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Interest payments shall be received by the Iiolder no later than 2:30 p.m., Eastern time; and principal and premium payments shall be received by the Holder no later than 2:30 p.m., Eastern time, if the Bond is surrendered for payment enough in advance to permit payment to be made by such time. Any interest not so timely paid shall cease to be payable to the person who is the Aolder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the olose of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for paymenC of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. Date of Pavment Not Business Dav. If the date for payment of the principal of, premium, if any, or interest on this Bond sha11 be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. Redemption. All Bonds of this issue (the "Bonds") maturing after December 1, 2005, are subject to redemption and prepayment at the option of the Issuer on such date and on any day therea£ter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City shall determine; and if only part of the Bonds having a common maturity date are called for prepayment, this Bond may be prepaid in $5,000 increments of principal. Bonds or portions thereof called for redemption shall be due and payable on the redemption clate, and interest thereon shall cease to accrue from and after the redemption date. 353732.3 �-2 97•��� 2 3 4 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Notice of Redemption. Mailed notice of redemption shall be given to the paying agent (if other than a City offiaer) and to each affected Holder of the Sonds. In the event any of the Bonds are called for redemption, written notice thereof will be given by first class mail mailed not less than thirty (30) days prior to the redemption date to each Aolder of Bonds to be redeemed. In connection with any such notice, the "CUSIP" numbers assigned to the Bonds shall be used. fteplacement or Notation of Bonds after Partial Redemption. Upon a partial redemption of this Bond which results in the stated amount hereof being reduced, the Holder may in its discretion make a notation on the panel provided herein of such redemption, stating the amount so redeemed. Such notation, if made by the Holder, shall be for reference only, and may not be relied upon by any other person as being in any way determinative of the principal amount of the Bond outstanding, unless the Bond Registrar has signed the appropriate column of the panel. Otherwise, the Holder may surrender this Bond to the Bond Registrar (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or his, her or its attorney duly authorized in writing) and the Issuer shal� execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond of the same series having the same stated maturity and interest rate and of the authorized denomination in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: Purpose; Special Obligation. This Bond is one of an issue in the total principal amount of $7,000,000, 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 Constitution and laws of the State of Minnesota and Che Charter of the Issuer, and pursuant to a resoluCion adopted by the City Council of the Issuer on June 11, 1997 (the "Resolu- tion"), for the gurpose of providing, together with certain other moneys of the Issuer, funds sufficient for a current refunding of the Issuer's outstandinq Variable Rate Demand Water Revenue Bonds, Series 1994D. The Bonds and the interest thereon are payable solely and exclusively from the Net Revenues of the Water utility of the Issuer pledged to the payment thereof, and do not constitute a debt of the Issuer or of the Saint Paul Board of Water Commissioners within the meaning of any constitutional, Charter or statutory limitation of indebtedness. In the event of any default hereunder, the Holder of this Bond may exercise any of the rights and privileges granted by the laws of the State of 353732.3 13 9�-'1�°� 1 Minnesota, subject to-the provisions of the Resolution. The 2 Bonds of this issue, together with the Water Revenue Bonds, 3 Series 1993E, issued in the principal amount of $11,175,000, are 4 a first and prior lien upon the Net Revenues of the Water Utility 5 of the Issuer, except that the Issuer is authorized under certain 6 conditions to issue additional revenue obligations on a parity of 7 lien with these Bonds, all as provided in the Resolution. 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2$ 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Action by Holders. The Holders of twenty percent (20°s) 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 o£ any and all of the covenants and duties specified in the Resolution to be performed by the Issuer or the Board of Water Commissioners or their officers and agents; provided, however, that nothing shall affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of and interest on each of the Bonds issued to the respective Holders thereof at the time and place, from the source and in the manner provided in the Bonds. Denominations; Exchanae; 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. G1oba1 Certi£icates 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 registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Replacement Bonds. Replacement Bonds may be issued by the Issuer in the event that: (a) the Depository shall resign or its services for the Bonds, and only if unable to locate a substitute depository 353732.3 14 discontinue the Issuer is within two (2) 9'l -'1 �°� months following the resignation-or determination of non-eligibility, or ib) upon a determination by the Issuer in its sole discretion (1) that the continuation of the book-entry system described in the Resolution, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds. Transfer. This Bond shall be registered in the name of the payee on the books of the Issuer by presenting this Bond for registration to the Bond Registrar, who will endorse his, her or its name and note the date of registration opposite the name of the payee in the certificate of registration attached hereto. Thereafter this Bond may be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representatives, and the Issuer and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until this Bond is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar. Transfer of this Bond may, at the direction and expense of the Issuer, be subject to certain other restrictions if required to qualify this Bond as being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended. Fees uoon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reqistered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. 353732.3 1 5 ��-'1 �q 1 Authentication This Bond shall not be valid or become 2 obligatory for any puxpose or be entitled to any security unless 3 the Certificate of Authentication hereon shall have been executed 4 by the Bond Registrar. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2S 29 30 31 32 33 34 Not Oualified Tax-Exempt Obligations. The Bonds have not been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. The Bonds do not qualify for such designation. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Charter of the Issuer to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or Charter limitation of indebtedness; and that the Issuer will establish rates and charges for the water service furnished by its Water Utility sufficient in amount to promptly meet the principal and interest requirements of this issue. IN WITNESS WHEREOF, the City of Saint Pau1, Ramsey County, Minnesota, by its City Council has caused this Bond to be sealed with its official seal and to be executed on its behal£ by the photocopied facsimile signature of its Mayor, attested by the photocopied facsimile signature of its Clerk, and countersigned by the photocopied facsimile signature of its Director, Office of Financial Services. 353732.3 � ��-1�� Date of Registration: BOND REGISTRAZ2'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Registrable by: Payable at: CITY OF SAINT PAUL, RAMSEY COiTNTY, MINNESOTA Mayor Attest: Bond Registrar � By Authorized Signature (SEAL) City Clerk Countersigned: Director, Office of Financial Services Water Revenue Refunding Bond, Series 1997C, No. R- 353T52.3 17 `i'1-'1�°� CERTIFICATE 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 SIGNATURE OF REGISTRATION REGISTERED OWNER BOND REGISTRAR 353732.3 1g °��-� �°� REGISTER OF FARTIAL PAYMENTS The principal amount of the attached Bond has been prepaid on the dates and in the amounts noted below: Signature of Signature of Date Amount Bondholder Bond Reaistrar If a notation is made on this register, such notation has the effect stated in the attached Sond. Partial payments do not require the presentation of the attached Bond to the Bond Registrar, and a Holder could fail to note the partial payment here. 353732.3 7-9 `t`1-1�q 1 2 3 4 5 6 7 8 9 io 11 12 13 14 15 16 17 18 19 20 21 22 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, sha11 be construed as though they were written out in full according to applicable laws or regulations: TEN COM TEN ENT JT TEN - �iyYui_� 353732.3 - as tenants in oommon - as tenants by the entireties as joint tenants with right of survivorship and not as tenants in common as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 20 �� �1�� ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the attached Bond and does hereby irrevocably constitute and appoint attomey to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the attached Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other ��Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 3537323 21 9� -'1 �� 1 B. Replacement Bonds. If the City has notified 2 Holders that Replacement Bonds have been made available as 3 provided in paragraph 6, then for every Bond thereafter 4 transferred or exchanged (including an exchange to reflect the 5 partial prepayment of a Global Certificate not previously 6 exchanged for Replacement Bonds) the Bond Registrar shall deliver 7 a certificate in the form of the Replacement Bond rather than the 8 Global Certificate, but the Holder of a Global Certificate shall 9 not otherwise be required to exchange the Global Certificate for 10 one or more Replacement Bonds since the City recognizes that some li beneficial owners may prefer the convenience of the Depository's 12 registered ownership of the Bonds even though the entire issue is 13 no longer required to be in global book-entry form. The 14 Replacement Bonds, together with the Bond Registrar's Certi£icate 15 of Authentication, the form of Assignment and the registration 16 information thereon, shall be in substantially the following 17 form: 18 3537323 22 q�-��� 1 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 UNITED STATES OF AMERICA STATE OF MINNESOTA RAMSEY COUNTY CITY OF SAINT PAUL � WATER REVENUE REF`UNDING BOND, SERIES 1997C INTEREST RATE MATURITY DATE OF DATE ORIGINAL ISSUE CUSIP July 1, 1997 REGISTERED OWNER: PRTNCIPAI, AMOiTNT: DOLLARS IZNOW ALL PERSONS BY THESE PRESENTS that the City o£ Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, solely from the source and in the manner hereinafter set forth, the principal amount speci£ied above, on the maturity date specified above, unless called for earlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, 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 Tnterest Payment Date to which interest has been paid or, if no interesC has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , (the "Bond Registrar��), acting as paying agent or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder'�) on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date��) fixed by the Bond 353732.3 2 3 °1�1-11°1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Registrar whenever money becomes available for payment o£ the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALi, PURPOSES HAVE THE SAMS EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Charter of the Issuer to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or Charter limitation of indebtedness; and that the Issuer will establish rates and charges for the water service furnished by its Water Utility sufficient in amount to promptly meet the principal and interest requirements of this issue. IN WITNESS WHEREOF, the City of Saint Paul, Ramsey County, Minnesota, by its City Council has caused this Bond to be sealed with its official seal or a facsimile thereof and to be executed on its behalf by the original or facsimile signature of its Mayor, attested by the original or facsimile signature of its Clerk, and countersigned by the original or facsimile signature of its Director, Office of Financial Services. 3537323 24 °Iri - `l�'� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Date of Registration: BOND REGISTRP.R'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Bond Registrar � By Authorized Signature (SEAL) 353732.3 Registrable by: Payable at: _ CITY OF SAINT PAUL, RAMSEY COUNTY, MINNESOTA Mayor Attest: City Clerk Countersigned: Director, Office of Financial Services 25 °1'1-�l �°, ON REVERSE OF BOND Date of Pavment Not Business Dav. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, 1ega1 holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. Redemption. All Bonds of this issue (the "BOnds") maturing after December 1, 2005, are subject to redemption and prepayment at the option of the Issuer on such date and on any day thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City shall determine; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Notice of Redemption. Mailed notice of redemption shall be given to the paying agent (if other than a City officer) and to each affected Holder of the Bonds. In the event any of the Bonds are called for redemption, written notice thereof will be given by first class mail mailed not less than Chirty (30) days prior to the redemption date to each Holder of Bonds to be redeemed. In connection with any such notice, the ��CUSIP" numbers assigned to the Sonds sha11 be used. Selection of Bonds for Redemotion. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount o£ 353732.3 2 6 °1'1-'1 l� 1 such Bond of a denomination of more than $5,000 shall be redeemed 2 as shall equal $5,000 for each number assigned to it and so 3 selected. If a Bond is to be redeemed only in part, it shall be 4 surrendered to the Bond Registrar (with, if the Issuer or Bond 5 Registrar so requires, a written instrument of transfer in form 6 satisfactory to the Issuer and Bond Registrar duly executed by 7 the Holder thereof or his, her or its attorney duly authorized in 8 writing) and the Issuer shall execute (if necessary) and the Bond 9 Registrar sha11 authenticate and deliver to the Holder of such 10 ii 12 13 14 15 16 17 is 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion o£ the principal of the Bond so surrendered. Issuance; Purpose: Special Obliaation. This Bond is one of an issue in the total principal amount of $7,000,000, all of like date of original issue and tenor, except as to number, maturiCy, inCerest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State o£ Minnesota and the Charter of the Issuer, and pursuant to a resolution adopted by the City Council of the Issuer on June il, 1997 ithe "Resolution"), for the purpose of providing, together with certain other moneys of the Issuer, funds sufficient for a current refunding of the Issuer's outstanding Variable Rate Demand Water Revenue Bonds, Series 1994D. The Bonds and the interest thereon are payable solely and exclusively from the Net Revenues of the Water Utility of the Issuer pledged to the payment thereof, and do not constitute a debt of the Issuer or of the Saint Paul Board of Water Commissioners within the meaning of any constitutional, Charter or statutory limitation of indebtedness. In the event of any default hereunder, the Holder of this Bond may exercise any of the rights and privileges granted by the laws of the State of Minnesota, subject to the provisions of the Resolution. The Bonds of this issue, together with the Water Revenue Bonds, Series 1993E, issued in the principal amount of $11,175,000, are a first and prior lien upon the Net Revenues of the Water Utility of the Issuer, except that the Issuer is authorized under certain conditions to issue additional revenue obligations on a parity of lien with these Bonds, all as provided in the Resolution. Action by Holders. The Holders of twenty percent t20%) or more in aggregate principal amount o£ Bonds at any time outstanding may, either by law or in equity, by suit, action, or other proceedings, protect and enforce the rights o£ all Holders of Bonds then outstanding, or enforce and compel the performance of any and all of the covenants and duties specified in the 353T523 2 7 q1-11� 1 2 3 4 5 6 7 8 9 10 11 12 13 i4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Resolution to be performed by the Issuer or the Board of Water Commissioners or their officers and agents; provided, however, that nothing shall affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of and interest on each of the Bonds issued to the respective Holders thereof at the time and place, from the source and in the manner provided in the Bonds_ Denominations: Exchanae; Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Re£erence is hereby made to the Resolution for a description o£ the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of.the Issuer-contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange £or this Bond, one or more new fully, registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees uQon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reaistered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. 353732.3 2 $ gR •'1�°� 1 2 3 4 5 6 7 8 9 10 Authentication This Bond shall not be valid or become obligatoYy for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Not Oualified Tax-Exemnt Obliaations. The Bonds have not been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. The Bonds do not qualify for such designation. 353732.3 29 9rt •'1 � °� 1 2 3 4 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable law regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 353732.3 � 9'�-'1�°l ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 3537323 31 an-��g 2 3 4 9 io 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3� 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 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 seal of the City may be a printed or photocopied facsimile; and provided further that any of such signatures may be printed or photocopied facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of any such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case an}r 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 Sonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. 11. Authentication; Date of Recristration. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. 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 Sond Registrar sha11 insert as the date of registration the date of original issue, which date is July 1, 1997. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 12. Registration; Transfer; Exchanae. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. A Global Certificate shall be registered in the name of the payee on the books of the Bond Registrar by presenting the Global Certificate for registration to the Bond Registrar, who will endorse his or her name and note the date of registration opposite the name of the payee in the certificate of registration on the Global Certificate. Thereafter a Global Certificate may 3537323 3 2 °l'1 • �l\°� 1 2 3 4 8 9 10 ii 12 13 14 15 16 i� 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representative, and the City and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until a Global Certificate is presented with such assignment £or registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted thereon by the Bond Registrar, all subject to the terms and conditions provided in this resolution and to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar. Transfer of a Global Certificate may, at the direction and expense of the City, be subject to other restrictions if required to qualify the Global Certificates as being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended, If a Global Certificate is to be exchanged for one or more Replacement Bonds, all of the principal amount of the Global Certificate shall be so exchanged. Upon surrender for transfer of any Replacement Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond RegisCrar shall authenticate, insert the date of registration (as provided in paragraph 11) of, and deliver, in the name of the designated transferee or transferees, one or more new Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder of a Replacement Bond, Replacement Bonds may be exchanged for Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Replacement Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Iteplacement Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Replacement Bonds which the Holder making the exchange is entitled to receive. Global Certi£icates may not be exchanged for Global Certificates of smaller denominations. Al1 Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly cancelled by 353732.3 cicj �l�-�t�°� 1 the Bond Registrar and thereafter disposed of as directed by the 2 City. 3 4 All Bonds delivered in exchange for or upon transfer of 5 Bonds shall be valid special obligations of the City evidencing 6 the same debt, and entitled to the same benefits under this 7 resolution, as the Bonds surrendered for such exchange or 8 transfer. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 4S 49 50 Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any 1ega1 or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 13. Riahts Ubon Transfer or Exchange. &ach Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 14. Interest Payment: Record Date. Interest on any Global Certificate shall be paid as provided in the first paragraph thereof, and interest on any Replacement Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder'�) on the registration books of the City maintained by the Bond Registrar, and in each case at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date"1 fixed by the Bond Registrar whenever money becomes available £or payment of the de£aulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Aolders not less than ten (10) days prior to the Special Record Date. 3537323 34 q�.�►t� 15. Holders• Treatment o£ ReQistered Owner; Consent of Iiolders. (A) For the purposes of all actions, consents and other matters affecting Iiolders of the Bonds, other than payments, redemptions, and purchases, the City may {but shall not be obligated to) treat as the Holder of a Bond the beneficial owner of the Bond instead of the person in whose name the Bond is registered. For that purpose, the City may ascertain the identity of the beneficial owner of the Bond by such means as the Bond Registrar in its sole discretion deems appropriate, including but not limited to a certificate from the person in whose name Che Bond is registered identifying such beneficial owner. (B} The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest isubject to the payment provisions in paragraph 14 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. (C) Any consent, request, direction, approval, objection or other instrument to be signed and executed by the Holders may be in any number of concurrent writings of similar tenor and must be signed or executed by such Aolders 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 instrument, namely: (1) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such writing acknowledged before him the execution thereof, or by an a£fidavit of any witness to such execution. (2) Subject to the provisions of subparagraph (A) above, the fact of the ownership by any person of Bonds and the amounts and numbers of such Bonds, and the date of the holding of the same, may be proved by reference to the bond register. 353732,3 3 5 �� -^� �q 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 16. Deliverv; Application of Proceeds. The Global Certificates when so prepared and executed shall be delivered by the Director, O£fice of Financial Services, to the Purchasex upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 17. Fund and Accounts. For the convenience and proper administration of the proceeds from the sale of the 1997 Bonds and for the payment of principal of and interest on the 1997 Bonds, the Board of Water Commissioners Water Utility Enterprise Fund (the "Water Utility Fund", heretofore in resolutions relating to the 1993 Bonds and 1994 Bonds also referred to as the "Water Utility Fund") heretofore created shall continue in force and e£fect as a separate fund of the City and of the Board until a11 of the 1997 Bonds are fu11y paid and retired. In the Water Utility Fund there is hereby created a 1997 Refunding Account and in addition there are, and there shall continue to be, the following accounts: (a) A"1997 Refunding Account", to which shall be credited all proceeds of the sale of the 1997 Bonds, together with any other moneys provided by the City as set forth in paragraph 27. The 1997 Refunding Account shall be used to pay the 1993 Bonds upon their early redemption and to pay the costs of issuing the 1997 Bonds. The moneys in the 1997 Refunding Account shall be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the 1997 Refunding Account shall be deposited in the Revenue Bond Debt Service Account. (b) An "O�eration and Maintenance Account", into which shall be paid all gross revenues and earnings derived from the operation of the Water Utility system including any assessments which may from time to time be levied with respect to the Water Utility. From this account there shall be paid all, but only, current expenses of said system. Current expenses shall include the reasonable and necessary costs of administering, operating, maintaining and insuring the system, salaries, wages, costs of materials and supplies, costs of water production and distribution, necessary legal, engineering and auditing services, and a11 other items which, by sound accounting practices, constitute normal, reasonable and current costs of operation and maintenance, but excluding any allowance for depreciation, extraordinary repairs and payments into the Revenue Bond Debt Service Account and Reserve Account. There shall at all times be maintained in said account a reserve in an amount sufficient to cover the operation and maintenance costs of the Water Utility system for the ensuing fifteen (15? day period; neither said reserve nor any annual 3537323 36 y�-��� addition thereto shall constitute "Net Revenues" as defined below. The balance from time to time remaining in the Operation and Maintenance Account, including interest or other earnings received from the investment of any moneys in the Water Utility Fund, after paying or providing for the foregoing items, shall constitute, and are referred to in this resolution as, "Net Revenues"_ Payments of fees to trustees for bonds, to providers of liquidity facilities or credit enhancement facilities for bonds and remarketing agents for bonds are also current expenses. (c) A°Revenue Bond Debt Service Account", into which there shall be credited and to which there is hereby irrevocably pledged from the Net Revenues of the operation of the Water Utility system monthly commencing in July, 1997, a sum equal to at least 1/12 of the total principal and interest on the 1997 Bonds and any other bonds issued on a parity therewith during the ensuing twelve (12) months; provided, however, that no further payments need be made to said account when the moneys held therein are sufficient for the payment of a11 principal and interest due on said bonds on and prior to the next maturity date. No money shall be paid out of said account except to pay principal, premium, if any, and interest on the 1997 Bonds and any other bonds which are issued on a parity with the 1997 Bonds. (d) A"Reserve Account�', which was heretofore created, and is hereby continued, to be used only when and if moneys in the Revenue Bond Debt Service Account or other moneys available therefor are insufficient to pay principal, premium, if any, and interest on the bonds payable from the Revenue Bond Debt Service Account; provided, however, that the moneys in the Reserve Account may be used to prepay said bonds, when such prepayment will retire all of the bonds then outstanding. Amounts already in the Reserve Account pursuant to the resolutions authorizing the issuance of the 1993 Bonds and 1994 Bonds shall be maintained therein upon the issuance of the 1997 Bonds to the extent necessary to equal the amount required to be maintained in the Reserve Account as set forth below, being initially amounts required for the 1993 Bonds and 1997 Bonds. Whenever the moneys in the Reserve Account exceed the amount required to be maintained in the Reserve Account as set forth below, such excess may be transferred to the Revenue Bond Debt Service Account; and whenever the moneys in the Reserve Account sha11 be less than said amount, the Reserve Account shall be restored to said amount from the next available Net Revenues. The amount required to be maintained in the Reserve Account shall be an amount equal to the lesser of: tl) ten percent (10�) of the original princigal amount of 353732.3 3 7 q�-�� � 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 the 1997 Bonds and other bonds payable from the Revenue Bond Debt Service Account issued after the 1993 Bonds on a parity of lien therewith, or {2) the maximum principal and interest due in any year on the bonds payable £rom the Revenue Bond Debt Service Account; and whenever the moneys in the Reserve Account exceed such amount required to be maintained therein, such excess may be transferred to the Revenue Bond Debt Service Account. When only bonds issued after the 1994 Bonds are outstanding, the "maximum principal and interest due in any year" on variable rate bonds shall be calculated at such time (for any variable rate bonds issued prior to such time) or in connection with their issuance (for variable rate bonds issued after such time) assuming the variable rate bonds bear fixed interest for the remainder of their terms or for their terms, as appropriate, at the rates prevailing at such time (for any variable rate bonds issued prior to such time) or at the time of their issuance (for variable rate bonds issued after such time) for utility revenue bonds of comparable quality, maturity and taxable or tax-exempt status, provided that other or different assumptions may be used if necessary to obtain an investment grade credit rating for the variable rate bonds or to maintain the credit rating(s) then in effect for the bonds then outstanding. (e) Net Revenues in excess of those required for the foregoing purposes may be used for any proper purpose. (f) The money in the Water Utility Fund shall be allotted and paid to the various accounts herein established in the order in which said accounts are listed on a cumulative basis, and if in any month the money in said accounts is insufficient to place the required amount in any accounts, the deficiency shall be made up in the following month or months after payment into all other accounts having a prior claim on said Net Revenues have been made in full. (g) All money held in the Revenue Bond Debt Service Account and the Reserve Account created by this resolution shall be kept separate and apart from all other municipal funds and accounts. ih) Notwithstanding anything to the contrary herein, moneys in the Water Utility Fund and any account thereof may be used to pay any rebate of excess arbitrage earnings on gross proceeds of the 1993 Bonds, 1994 Bonds and 1997 Bonds to be paid to the United States in order to maintain the exclusion from gross income under Section 103 of the Code (as hereinafter defined) of the interest on the 1993 Bonds, 1994 Bonds and 1997 Bonds. 353732.3 m 9'l-'1\� 1 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 (i) Accounts created £or bonds, notes or obligations with a lien on Net Revenues subordinate to the lien of the 1997 Bonds shall be maintained and operated as required by the resolutions authorizing the same. (j) No portion of the proceeds of the 1997 Bonds sha11 be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the 1997 Bonds were issued, (2) as part of a reasonably required reserve or replacement fund not in exeess of ten percent (10a) of the proceeds of the 1997 Bonds (or in a higher amount which the City establishes is necessary to the satisfaction of the Secretary of the Treasury of the United States), and (3) in addition to the above in an amount not greater than the lesser of five percent (50) of the proceeds of the 1997 Bonds or $100,000. To this effect, any proceeds of the 1997 Bonds and any sums from time to time held in the 1997 Refunding Account, Operation and Maintenance Account, Reserve Account or Revenue Bond Debt Service Account (or any other City or Board account which will be used to pay principal or interest to become due on the bonds payable there£rom) in excess o£ amounts which under the federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods", minor portion or reserve made available under the federal arbitrage regulations. Money in the Water Utility Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the 1997 Bonds to be ��federally guaranteed" within the meaning of Section 149(b) of the federal Tnternal Revenue Code of 1986, as amended ithe "Code"). 18. Paritv Bonds. The 1993 Bonds and 1997 Bonds shall be a first charge and lien upon the Net Revenues of the Water Utility. No part of such Net Revenues shall be pledged to the payment of any general obligation bonds issued by the City while any 1993 Bonds or 1997 Bonds or bonds issued on a parity therewith remain outstanding and undischarged, unless the pledge of Net Revenues to such general obligation bonds is expressly made a second and subsequent lien and the City and Board covenant to make the rates and charges of the Water Utility su�ficient to timely pay such general obligation bonds. No additional revenue obligations payable from the Revenue Bond Debt Service Account 353732.3 39 °1'1-'l �°� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 shall be herea£ter issued unless the same are e�ressly made a second and subsequent lien upon the Net Revenues of the Water Utility; provided, however, that additional obligations may be issued on a parity of lien with the 1997 Bonds, provided that the annual Net Revenues of said Water Utility for each of the two (2) completed £iscal years immediately preceding the issuance of such additional obligations shall have been one and one-half (1.5) times the maximum annual principal and interest coming due thereafter on all outstanding revenue obligations payable from and having a parity of lien upon the Net Revenues of the Water Utility Fund, including the additional obligations so to be issued; provided further, however, that if the annual Net Revenues in either or both of the aforesaid two (2) completed fiscal years shall be insufficient to meet this test then any reasonably projected increase in Net Revenues for the fiscal year immediately following such second completed fiscal year may be added to the Net Revenues for such completed fiscal years or either of them (but the total of such projected increase in Net Revenues may be added only once) in applying the foregoing test. For purposes of the foregoing limitations, when only bonds issued after the 1994 Bonds are outstanding, the "maximum annual principal and interest coming due thereafter" on variable rate bonds shall be calculated assuming the variable rate bonds bear fixed interest at the rates prevailing at the time of the calculation for utility revenue bonds of comparable quality, maturity (or remaining maturity) and taxable or tax-exempt status, provided that other or different assumptions may be used if necessary to obtain an investment grade credit rating for the variable rate bonds or to maintain the credit rating(s) then in effect for the bonds then outstanding. Such facts shall be shown by the Certificate of the General Manager of the Board of Water Commissioners and shall be a finding of and recited in the resolution of the City authorizing any such additional series. In addition, the following conditions shall be met: (a) The payments required to be made (at the time of the issuance of such parity lien bonds? into the various funds and accounts provided for in this resolution have been made. ib) All such parity lien bonds shall have a December 1 maturity or maturities and shall have semiannual interest payments on June 1 and December 1 in each year; provided that interest payments may be more frequent than semiannually or on dates other than June 1 and December 1 if such interest is paid in full only if at the time of payment the interest deposits into the Revenue Bond Debt Service Account for interest payments on June 1 or December 1, as appropriate, on other bonds are current, and any insufficiency of interest on all parity bonds is allocated 353732.3 � °I'1-'l 1 � � 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 proportionately in each six-month period ending 3une 1 or December 1, as appropriate. (c) The proceeds of such parity lien bonds shall be used only for the purpose of (1) making improvements, additions, extensions, renewals or replacements to the Water Utility, and capitalizing interest or establishing Reserves and paying the costs of such financing, or (2} refunding parity lien bonds (provided that bonds which refund parity lien bonds may instead derive their parity lien status from paragraphs 19 or 25 as applied in paragraph 20). 19. Refundina Maturina Bonds. The City also reserves the right and privilege o£ issuing additional revenue bonds if and to the extent needed to refund maturing bonds payable from the moneys in the Water Utility Fund in case the moneys in the Revenue Bond Debt Service Account are insufficient to pay the same at maturity, which refunding revenue bonds may be on a parity with this issue as to interest payments even if such interest is in excess of the interest on the refunded bonds, but shall mature subsequent to all the revenue obligations which are payable from the Net Revenues of the Water Utility Fund and which are sti11 outstanding upon completion of such refunding. 20. Other Revenue Obliaations. Except as authorized in paragraphs 18, 19 and 25 hereof, the City covenants and agrees that it will issue or incur no obligations payable from the Net Revenues o£ all or a part of said Water Utility or constituting in any manner a lien thereon, unless such obligations are expressly made junior and subordinate to the lien and charge of the 1997 Bonds on said Net Revenues. If bonds which refund the 1997 Bonds are parity lien bonds, they shall enjoy complete equality of lien with any portion of the 1997 Bonds not refunded and any other then outstanding bonds payable from the Revenue Bond Debt Service Account, if any there be, and such refunding bonds shall continue to have whatever priority of lien over subsequent issues that the refunded bonds may have had. If only a portion of the outstanding 1997 Bonds shall be refunded such 1997 Bonds shall be refunded in such manner that the interest rate of any refunding bond sha11 be greater than interest rate of the corresponding refunded 1997 Bond (or average net interest rate of the refunding bonds shall be, shall be rea o bl and if the the or s na y estimated to be, higher than the average net interest rate of the refunded 1997 Bonds), or that the maturity date of any refunding bond shall be earlier than the maturity date of the corresponding refunded 1997 Bond (or the average maturity of the refunding bonds shall be earlier than the average maturity of the refunded 1997 Bonds), then such 1997 Bonds may not be refunded without the consent of the holders of the unrefunded portion of the 1997 Bonds and any other bonds then 353T323 41 9�-� �q outstanding payable from the Revenue Bond Debt Service Account unless the Net Revenues coverage test af paragraph 18 is met. 21. Insufficient Amounts. In the event that the moneys in the Revenue Bond Debt Service Account shall be insufficient at any particular time to pay the principal then due and interest then accrued on all bonds payable therefrom, said moneys shall first be applied to the payment pro rata of the accrued interest on all such bonds, payable over a period ending on June 1 or December 1, as appropriate, and any balance shall be applied in payment pro rata of the principal on a11 such bonds, provided further that if it shall ever be determined by a court of competent jurisdiction while any such bonds remain outstanding that the sums available and to become available for the payment of the principal thereof and interest thereon are insufficient whether or not then due, then the moneys in the Revenue Bond Debt Service Account shall be applied in payment of all principal then outstanding whether or not then due and the interest accrued thereon to the date of payment ratably according to the aggregate amount thereof without any preference or priority. 22. Suit b�Bondholders. The Holders of twenty percent (20%) or more in aggregate principal amount of bonds issued under this resolution and at any time outstanding may, either at law or in equity, by suit, action, or other proceedings, protect and enforce the rights of all Holders of the 1997 Bonds then outstanding or enforce or compel the performance of any and all of the covenants and duties specified in this resolution to be performed by the City or Board or their officers and agents, including the fixing and maintaining of rates and charges and the collection and proper segregation of revenues and the application and use thereof. 23. Covenants. For the protection of the Holders of the 1997 Bonds, the City herein covenants and agrees to and with the holders thereof from time to time as follows: (a) It will at all times through its Board adequately maintain and efficiently operate the Water Utility as a City utility. It will from time to time make a11 needful and proper repairs, replacements, additions and betterments to the equipment and facilities of said Water Utility so that they may at all times be operated properly and advantageously, and whenever any equipment of said system shall have been worn out, destroyed or otherwise become insufficient for proper use, it shall be promptly replaced or repaired so that the value and efficiency of the facilities shall be at all times fully maintained and its revenues unencumbered by reason thereof_ 353732.3 4 2 9�1-'1 � °1 (b) The rates for all water service and the charges £or all water supplied by the Water Utility to the City and its residents and to all other consumers shall be reasonable and just, taking into account the cost and value of the Water Utility, the cost of maintaining and operating the Water Utility and the proper and neaessary allowances for depreciation, the amounts required for the payment of principal and interest on the bonds payable £rom the Net Revenues of the Water Utility, and a11 other sums customarily paid from the revenues of the Water Utility. {c) It will as required by Section 10.11.2 of the City Charter (and it will continue to do so whether or not required by said Charter) establish, maintain and collect such charges and rates as will produce revenues sufficient to pay the reasonable cost of operation, repair and maintenance of the Water iJtility and to pay the interest on and principal of the 1997 Bonds and all bonds on a parity of lien with the 1997 Bonds, as and when they become due, as well as to provide sufficient money to make the required appropriations to the various funds and accounts established herein. The City will review the schedule of rates and charges for the Water Utility at least annually when the Board budget is reviewed. (d) It will not sell, lease, mortgage, or in any manner dispose of the Water Utility or any part thereof (including any and all extensions and additions that may be made thereto) until all revenue bonds payable from the Net Revenues of the Water Utility or any part thereof have been paid in full; provided, however, that the City may sell the Water LTtility or any part thereof if simultaneously with or prior to said sale all of the outstanding bonds are discharged in accordance with paragraph 25 of this resolution. This covenant shall not be construed to prevent the sale by the City at fair market value of real estate, equipment or other non-revenue-producing properties which in the judgment of the City have become unnecessary, uneconomical or inexpedient to use in connection with the Water Utility provided that suitable facilities are obtained in place thereof and provided further that nothing herein is intended to prevent the City or Board from terminating or otherwise preventing the termination of contracts for the furnishing of water. (e) It shall cause to be kept proper books, records and accounts adapted to the Water Utility separate from other acaounts to be audited at the end of each fiscal year. A copy of said audit shall be furnished, without cost, to the Purchaser of the 1997 Bonds. If the City fails to provide 353T52.3 4 3 q�t -��� 1 2 3 4 8 9 10 11 12 13 14 15 16 17 18 19 20 zi 2z 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 such audit within a reasonable time after the end of said fiscal year, the holders of twenty percent (200) or more of the outstanding bonds may cause such audit to be made at the expense of the City. The expense of preparing such audit shall be paid as current operating expenses of the Water Utility. The Purchaser of the 1997 Bonds and the Holders thereof, or their duly appointed representatives, from time to time shall have the right, at all reasonable times, to inspect the Water Utility system and to inspect and copy the books, records, accounts and data relating thereto. The City agrees to furnish copies of such audit, without cost, to any Holder or Holders of the 1997 Bonds at their request within a reasonable time after the end of each fiscal year. (f) It will faithfully and punctually perform all duties with reference to the Water Utility required by the City Charter, the Constitution and laws of the State of Minnesota and this resolution. (g) It will grant no franchise to any competing utility. 24. Amendments. alteration shall be made in the 1997 Bonds without the than sixty percent (600) in then outstanding except for and alterations ta) made to or omission, or (b) which w Holders of such outstanding nothing herein contained sh permitting (1) an extension or the interest on any such principal amount of any suc thereon, or (3) a privilege No change, amendment, moditication or the covenants made with Holders of �onsent of the Holders of not less principal amount of such 1997 Bonds changes, amendments, modifications cure any ambiguity or formal defect �uld not materially prejudice the 1997 Bonds; provided, however, that �11 permit or be construed as of the maturiCy of the principal of 1997 Bonds, or (2) a reduction in the z 1997 Bond or the rate of interest or priority of any such 1997 Bond or 1997 Bonds over any otner bona or bonas excepL as oLnerwise provided herein, or (4) a reduction in the aggregate principal amount of such 1997 Bonds required for consent to any change, amendment, modification or alteration, or i5) the creation of any lien ranking prior to or on a parity with the lien of such 1997 Bonds, except as hereinbefore e�pressly permitted, or (6) a modification of any of the provisions of this paragraph without the consent of the Holders of one hundred percent (100%) of the principal amount of such 1997 Bonds outstanding. discharged and other 1997 Bonds sahich are 353732.3 25. Discharae. When all 1997 Bonds have been as provided in this paragraph, all pledges, covenants rights granted by this resolution to the Holders of the shall cease. The City may discharge all 1997 Bonds due on any date by depositing with the paying agent � � � �� � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum sufficient for the payment thereof in full; or if any 1997 Bond should not be paid when due, it may nevertheless be discharged by depositing with the paying agent ibut not if a City officer is the paying agent) or an escrow agent a sum sufficient for the payment thereaf in fu11. The City may also discharge any grepayable 1997 Bonds which are called for redemption on any date when they are prepayable according to their terms, by depositing with the paying agent (but not if a City officer is the paying agent) or an escrow agent on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as provided in this resolution. The City may also at any time discharge the issue of the 1997 Bonds in whole or in part by complying with the applicabla provisions of Minnesota Statutes, Section 475.67, and any amendments thereto, except that the funds deposited in escrow in accordance with said provisions may but need not be in whole or part proceeds of advance refunding bonds. The City may discharge 1997 Bonds as herein provided without the consent of any Bondholders. 26. Fiscal Year As used in this resolution the words "fiscal year" shall mean the twelve (12) month period beginning on January 1 of each year and ending on December 31 of the same year. Should it be deemed advisable at some later date to change the fiscal yearly basis, the same may be done by proper actions to that effect, which change shall not constitute an amendment or modification of this resolution. 27. Abpropriation. It is hereby found, determined and declared that on the date this resolution is adopted, there is more in the Reserve Account than is required upon the discharge of the Refunded Bonds. The difference is hereby appropriated to the 1997 Refunding Account. The Board's additional initial appropriation to the 1997 Refunding Account necessary to accomplish the current refunding of the Refunded Bonds is hereby recognized and approved. 28. Refunded Bonds; Securitv. Until retirement of the Refunded Bonds, all provisions heretofore made for the security thereof shall be observed by the City and all of its officers and agents. 353732.3 G� q �-�> 9 29. RedemQtion of Refunded Bonds. The Refunded Bonds shall be paid upon early redemption prior to October 1, 1997, all in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached hereto as E�ibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemption in substantially such fox sha11 be mailed to the paying agent and sha11 be given by the paying agent to the holders of the Refunded Bonds at least ten (10) days prior to the redemption date in the manner provided for the Refunded Bonds. 30. Records and Certificates The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the £acts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the faats recited therein. 31. Neaative Covenants as to IIse of Proceeds and Imbrovements. The City hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be �'private activity bonds" within the meaning of Sections 1�3 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Bonds that would cause them to be private activity bonds, and the average term of the Bonds is not longer than reasonably necessary for the governmental purpose of Che issue. The City hereby covenants not to use the proceeds of the Bonds in such a manner as to cause the Bonds to be ��hedge bonds" within the meaning of Section 149(g) of the Code. 32. Tax-Exempt Status of the Bonds; Rebate; Elections. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 353732.3 4 6 �� ~��� If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Bonds, the Mayor, Clerk, Treasurer and Director, Office of Financial Services, or any of them, are hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 33. No Desicrnation of Oualified Tax-Exe�t Oblicsations. The Bonds, together with other obligations issued by the City in 1997, exceed in amount those which may be qualified as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and hence are not designated for such purpose. 34. Letter of Rebresentations. The Letter of Representations for the Bonds is hereby confirmed to be the Blanket Issuer Letter of Representations dated April 10, 1996, by the City and received and accepted by The Depository Trust Company. So long as The Depository Trust Company is the Depository or it or its nominee is the Holder of any Global Certificate, the City shall comply with the provisions of the Letter of Representations, as it may be amended or supplemented by the City £rom time to time with the agreement or consent of The Depository Trust Company. 35. Parity Findings. It is hereby found, determined and declared that: (a) The 1997 Bonds are on a parity of lien with the 1993 Bonds, and do not require for their issuance or their parity status the consent of the holders of any of the 1993 Sonds or 1994 Sonds pursuant to the resolutions authorizing the issuance thereof. The Bonds bear interest at a rate under the Maximum Rate on the 1994 Bonds, and the 1997 Bonds are qualified to be on a parity of lien with the 1993 Sonds up to said Maximum Rate. 36. Covenant with Holders. Each and all of the terms and provisions of this resolution shall be and constitute a covenant on the part of the City to and with each and every Holder from time to time of the Bonds. 37. Necrotiated Sale. The City has retained Springsted Incorporated as an independent financial advisor, and this Council has heretofore determined, and does hereby determine, ta sell the Bonds by private negotiation to the Purchaser, all as provided by Minnesota Statutes, Section 475.60, Subdivision 2(9). 353732.3 4 7 q� -��q 38. Continuincx Disclosure. The City is an obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereina£ter described, to: A. Provide or cause to be provided to each nationally recognized municipal securities information repository ('�NRMSIR") and to the appropriate state information depository ("SID"), if any, for the State of Minnesota, in each case as designated by the Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. B. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking. C. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of a failure by the City to provide the annual financial information with respect to the City described in the Undertaking. The City agrees that its covenants pursuant to the Rule set forth in this paragraph 38 and in the Undertaking are intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holflers; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Director, Office of Financial Services, or any other officers of the City authorized to act in their stead (the "Officers"), are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council, subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser, and (iii) acceptable to the Officers. 39. Severabilitv. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability 353732.3 4 8 a1-ril9 1 2 3 4 5 6 7 of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 40. Headincxs. Headings in this resolution are included for convenienoe of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. Requested by Department of: Adoption by Council 3ecretary B \ = �_ � ApprovecS by Mayor. Date � Office of Financial Services B y : m' �_ Form Apprwed by City Attomey By`.� �-" � � G'�3 -- �7 Approved by ayo� for Submis ion to Council By . e Adopted by Council: Date � �..�-<- �� ,`� q`� g 1 q �('� �� S 7 � ! 1 � UEPARTMENTADFFIGHCOUNCIL �ATE MlT1ATFA v � �� v Office of Financial Services 6/3/97 GREEN SHEE GONTACT PERSON & PHONE INRIAL/OATE INRIAL/DATE � DEPARiMENTDIRE � CI7YCAUNCIL Martha Rantorowicz, 266-8836 p5$�GN �CRYATfORNEY �CINCLERK NUMBEfl FOR MUST BE ON fAUNCI� AGENDA BY (�p'TE) pOUTING � B��ET OIRECiO O FIN. & MGT. SERVILES DIA. June 11 a 1997 ORDER � MAVOR (pR A$SISfANT� � TOTAL # OP SIGNATORE PAGES z __ (CLIP ALL LOCATiONS FOR SIGNATURE) ACTION RE�UESTEO: This resolution accepYS the winning proposal and awards the bid for the $7,000,000 Water Revenue Refunding Bonds, Series 1997C. This is a competitive bond sale and the award is going to the bidder £ound to be the lowest cost to the Wa[er Utility. FECAMMENDA710NS: Approve (A) ar Rcyect (R) pERSONAL SERVICE CONTRACTS MUST ANSWER TNE FOLLOWING �UESTIONS: _ PLANNING COMMISSION _ CIVIL SEFVICE COMMISS�ON 1. Has this personttirm ever worketl untler a comract for this tlepartment? _ CIB GOMMITfEE _ YES NO � STAFF Z. Hes this person�rm ever been a ciry employee? — YES NO _ O�.sia�c[cAURT _ 3. Does this personRirm possess a skill not normaliy possessed by any curtent city employee? SUPPpRT$ WNICH COUNCIL OBJECTIVE� YES NO Explain all yes answers on separate sheet antl ettach to green sheet INITIATING PROBIEM, ISSUE, OPPFIRTUNITV (Who, What, When, Where, Why). These bonds axe for the purpose of refunding the $10,000,000 Variable Rate Demand Water Revenue Bonds, Series 1994D. ADVANTACaES IFAPPROVED Conversion to fixed rate debt is beneficial in the current market, and we eliminate the risk of having variable rate debt. DISADVANTAOES IF APPROVED� None DISADVANTAGES IF NOTAPPflOVED' � 7��Q� TOTAL AMOUNT OFTRANSAC710N $ COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO FUNDIfBG SOURCE AC7IVITY NUMBER FINANCIAL INFORFiAT10N: (EXPLAIN) 9�-^�r�9 1 SCFiEDULES AND EXHIBITS 2 3 4 Schedule A - Proposals 5 6 Er,hibit A- Notice of Call for Redemption a'1 • rl�°� EXHIBIT A NOTICE OF CAI,L FOR REDEMPTION $10,000,000 VARIABLE RATE DEMAND WATER REVENUE BONDS, SERIES 1994D CITY OF SAINT PAUI, RAMSEY COUN`I'Y MINNESOTA NOTICE IS HEREBY GIVEN that by order o£ the City Council of the City of Saint Paul, Ramsey County, Minnesota, there have been called for redemption and prepayment on 1997, outstanding bonds of the City designated as Variable Rate Demand Water Revenue Bonds, Series 1994D, dated November 15, 1994, as the date of original issue, having stated maturity dates o£ December 1, 2014, bearing the CUSIP number 793073 CU9, bearing interest at a variable rate, and now outstanding in the total principal amount of $9,600,000. Al1 outstanding bonds of the issue are being called for redemption. The bonds are being called at a price of par plus accrued interest to , 1997, on which date the redemption price will become due and pagrable and all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the principal office of the trustee and paying agent for the Bonds, First Trust National Association, 180 East Fifth Street, 2nd Floor, Saint Paul, Minnesota 55101, on or before , 1997. BY ORDER OF THE CITY COUNCIL /s/ Fred Owusu City Clerk Additional information may be obtained from: SPRINGSTED INCORPORATED 85 East Seventh Place Suite 100 Saint Paul, Minnesota 55101-2143 (612) 223-3000 353764.7 1 2 3 4 5 8 9 10 11 12 13 14 15 16 17 1S 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 �n� WHERRAS, "Holder" as used herein means the perso in whose name a Bond is registered on the registration books,�f t: City maintained by the registrar appointed as provided in' / paragraph 8 (the "Bond Registrar"); and WHEREAS, pursuant to Minnesota Statutes, Secti 475.60, Subdivision 2(9), public sale requirements do n' apply to the Bonds, because the City has retained an indepe ent financial advisor and this Council has determined to ell the Bonds by private negotiation, and the City has inst d authorized a competitive sale without publication of notice t ereo£ as a form of private negotiation; and WHEREAS, Rule 15c2-12 of the Securit' s and Exchange Commission prohibits "participating underwri rs" from purchasing or selling the Bonds unless the City undert es to provide certain continuing disclosure with respect o the Bonds; and WHEREAS, proposals for the Bo s have been solicited by Springsted Incoxporated pursuant to an fficial Statement and Terms of Proposal therein: NOW, THEREFORE, BE IT R City o£ Saint Paul, Minnesota, as 6 � VED by the Council of the lows: The proposal of (the "PUrchaser��} to purchase $7,0 ,000 Water Revenue Refunding Bonds, Series 1997C, of the ty (the "Bonds" or "1997 Bonds", or individually a"Bond" or "1 7 Bond"), in accordance with the Terms of Proposal for the nd sale, at the rates of interest hereinafter set forth, an to pay for the Bonds the sum of $ , plus terest accrued to settlement, is hereby found, determined and clared to be the most favorable proposal received and is hereb accepted, and the Bonds are hereby awarded to the Purchaser. T Director, Office of Financial Services, or his designee, is di- cted to retain the deposit of the Purchaser and to forthwith r urn to the others making proposals their good faith checks or fts. 2. Maturities. Bonds, Serie original is� date as fujl R-1 upwar�� date. shall e Bonds shall be titled "Water Revenue Refunding 1997C", shall be dated July l, 1997, as the date of e and shall be issued forthwith on or after such y registered bonds. The Bonds shall be numbered from Global Certificates shall each be in the o£ the entire principal amount maturing on a single cement Bonds, if issued as provided in paragraph 6, the denomination of $5,00o each or in any integral �9 � 9�1-�tq multiple thereof of a single maturity. The Bonds shall ma]�re on December 1 in the years and amounts as follows: / Year Year 2006 2007 2008 2009 201� 2011 2012 Amount $345,00 425,0 0 595, 00 165 000 2 ,��� 0,000 50,000 3. Pur ose• Refundin Findin s The Bonds (together with other available funds appropriated? hall provide funds for a current refunding of the Refunded Bon (the "Refunding"). The 1994 Bonds were issued to finance impr ements to the Water Utility (the "Improvements"). 2he pr ceeds of the Bonds shall be deposited and used as provided in p agraph 17. The total cost of the Refunding, which shall incl e all costs enumerated in Minnesota Statutes, Section 475.6 , is estimated to be at least equal to the amount of the Bonds It is hereby found, determined and declared that (1) the Refun ng is pursuant to Minnesota Statutes, Section 475.67, and ) the Refunding is necessary or desirable for the issuance of bligations bearing a fixed rate of interest in the case of the 94 Bonds, which bear interest at a rate varying periodically. 4. Interest. he Bonds shall bear interest payable semiannually on June 1 d December 1 of each year (each, an "Interest Payment Date'! , commencing December 1, 1997, calculated on the basis of a 360- ay year of twelve 30-day months, at the respective rates per nnum set £orth opposite the maturity years as follows: 1998 1999 2000 2001 20�2 2003 2004 2005 Amount $730,000 800,000 420,000 225,000 315,00� 660,000 690,000 640,000 Interest Rate Maturitv Year Interest Rate 11 1998 1999 2000 200 20 2 3 04 005 L� 0 2006 2007 2008 2009 2010 2011 2012 ° Description of the Global Certificates and ry System. Upon their original issuance the Bonds in the form of a single Global Certificate for 5 ��-�t� (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum suf£icient for the payment thereof in fu11; or if any 1997 Bond should not be paid when due, it may nevertheless be discharged by deposit' g with the paying agent (but not if a City officer is the payi agent) or an escrow agent a sum sufficient for the payment thereof in full. The City may also discharge any prepaya e 1997 Bonds which are called for redemption on any date when t y are prepayable according to their terms, by depositing wit the palring agent (but not if a City officer is the paying gent) or an escrow agent on or before that date an amount e to the principal, interest and redemption premium, if any which are then due, provided that notice of such redemption as been duly given as provided in this resolution. The City ay also at any time discharge the issue of the 1997 Bonds in ole or in part by complying with the applicable provisions of M' nesota Statutes, Section 475.67, and any amendments thereto, cept that the funds deposited in escrow in accordance with sai rovisions may but need not be in whole or part proceeds of vance refunding bonds. The City may discharge 1997 Bonds as her n provided without the consent of any Bondholders. 26. Fiscal Year. As used ' this resolution the words "fiscal year" shall mean the twelve 12) month period beginning on January 1 of each year and endi on December 31 of the same year. Should it be deemed advisa e at some later date to change the fiscal yearly basis, the sam may be done by proper actions to that effect, which change sh 1 not constitute an amendment or modification of this resolutio . 27. A ro riatio . It is hereby found, determined and declared that on the date is resolution is adopted, there is $ in the eserve Account, of which only $ is re red upon the discharge of the Refunded Bonds. The difference f$ is hereby appropriated to the 1997 Refunding ccount. The Board's additianal initial appropriation to the 997 Refunding Account necessary to accomplish the curr nt refunding of the Refunded Bonds is hereby recognized and ap oved. 28. Refunded Bonc thereof shall agents. f �tunded Bonds; Securitv. Until retirement of the all provisions heretofore made for the security observed by the City and all of its officers and 45 `t�t-��� 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 29. Redemntion of Refunded Bonds. The Refunded Bonds shall be paid upon early redemption on or about , 1997, all in accordance with the terms and conditions set forth in the Notice of Ca11 far Redemption attached hereto as Exhibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemp�ion in substantially such form shall be mailed to the paying agent and shall be given by the paying agent to the holders of he Re£unded Bonds at least ten (10) days prior to the redem�ion date in the manner provided for the Refunded Bonds. �f 30. Records and Certificates. The offi City are hereby authorized and directed to prepare the Purchaser, and to the attorneys approving the� of the furnish to ity of the issuance of the Bonds, certified copies of all oceedings and records of the City relating to the Bonds and � the financial condition and affairs of the City, and such o er affidavits, certificates and information as are require o show the facts relating to the legality and marketability f the Bonds as the same appear £rom the books and records un r their custody and control or as otherwise known to them, all such certified copies, certificates and affidavits, i uding any heretofore furnished, shall be deemed representa ons of the City as to the facts recited therein. 31. Neqative Cove Improvements. The City here of the Bonds or to use the I them to be used, or to ente arrangements for the cost of as to cause the Bonds to be meaning of Sections 103 an City reasonably expects - term of the Bonds that bonds, and the average reasonably necessary The City hereby cove an such a manner as t cau the meaning of Se ion 32. The City sh to establis Section 103 without li investme s than th yi earnin to by c enants not to use the proceeds mpr ements, or to cause or permit r' o any deferred payment e Improvements, in such a manner private activity bonds" within the 141 through 150 of the Code. The no actions will be taken over the cause them to be private activity erm of the Bonds is not longer than r the governmental purpose of the issue. ts not to use the proceeds of the Bonds in se the Bonds to be "hedge bonds" within 149(g) of the Code. 1 comply with requirements necessary under the Code nd maintain the exclusion from gross income under f the Code of the interest on the Bonds, including tation requirements relating to temporary periods for limitations on amounts invested at a yield greater ld on the Bonds, and the rebate of excess investment the United States. m w '_ 85 E. SEVENTH PLACE SUITE 100 SAINC PAUL, MN 55101-2143 612-223-3000 FAX:612-223-3002 q�- ��9 SPRINGSTED Public Finana fldvisors June �1, 1897 Mr. Bemie Bullert, General Manager City of Saint Paul Water Utility 8 East Fourth Street, Suite 400 Saint Paul, MN 551�1-1007 Ms. Martha Kantorowicz, Debt Manager City of Saint Pau{ Treasury Division 160 City Hall 15 West Keltogg Boulevard Saint Paul, MN 55102 f � Re: Recommendations for Award of City of Saint Paul's $7,0�0,000 Water Revenue Refunding 8onds, Series 1997C Dear Mr. Bullert and Ms. Kantorowicz: Purpose of Issue The purpose of this issue is to refund on a long-term fixed interest rate basis the City's $10,000,000 Variable Rate Demand Bond issued in 1994. The Water Utility, through principal repayment and cash contributions, has lowered the principaf on this issue to $7,000,000. Tax-Exempt Interest Rate Market The municipal tax-exempt market has operated within a relatively narrow band since January 1. On January 1, the Bond Buyer's Index (BBI) was at 5.70%. 'The high point was in April at 5.88%; the low point is this week at 5.60%. Sale Resuits The City received 7(seven) bids on this sale. The bids were as fioliows: Rank Bidder Morgan Keegan (Memphis) First of America (Michigan) Piper Jaffray (Twin Cities) A. G. Edwards (St. Louis) Smith Bamey (New York) Dain Bosworth, Inc. (Twin Cities) Prudential Securities (Chicago) TIC % 4.88% 4.89% 4.92°!0 4.94% 4.95% 4.96% 4.98% SAINT PAUL, MN � MI[YNEAPOL[S, MN � BROOKF(EID, W[ � OVERLAND PARK, KS � WASHNGTON, DC � [OWA CtTY, lA City of Saint Paul Water Utility June 11, 1997 Page 2 The {owest bid of 4.88°fo was received by Morgan Keegan (Memphis underwriter). q,�-�19 This issue received significant national interest with underwriters bidding from New York, Chicago, Memphis, St. Louis, and Michigan as well as the Twin Cities. We require bidders to submit their bids on a'True Interest Rate" (TIC) basis, so as to refiect the present vatue ofi their bids and thereby ensure the Utility's award is based on the fowest cost to the Utility. We have enclosed a bid tabulation form for the issue summarizing the bid specifics and composition of each underxriting syndicate. Recommendation We recommend award of this sale to Morgan Keegan. Basis of Award The interest rates received on this issue are well below the planning esiimates used by the Water Utility and compare fiavorably with current market experience. The Utility had, through the first part of the year, used 5.4°!o for planning purposes based on earlier market experience. Generalty, the Utility has over the years hoped to finance this issue at under 5.0°/a. We have compared this issue's interest rates with other basic utilities selling nationally, with such comparisons yielding very favorable results for the Utility. Credit Rating The Utility received credit ratings of Aa2 and Aa from Moody's Investors Service and Standard & Poor's, respectively. Standard & Poor's upgraded the Utility's outlook to positive from stable. These are excel{ent ratings from both agencies. We are again appreciative of the opportunity to be of service to the Utility. We welcome any questions or comments on this report. Respectfuliy, (� � , � � ��^ ��_� �� � ` �;�_ � � ,�.�� David N. MacGilfivsay Principal Di�ector of Project Management /dmf Enctosures � � � � � � N O � \ O \ � C�J 0 � � a � � � -� 0 � 0 � � � c.n O � \ O � \ � � O � \ O C3� \ � J Percent � � � � �� � � � <� CD � CD Q � � � O � � CD � CD � r--r- °�' � � � Q � � N -� � � � X � � � � � � � � o � o � o � o � : v 85 E. SEVENTH PL.iCE, SUITE 100 r SA1NT PAUL, MN 55101-2143 61?-223-3000 FAX:67L223-3002 �� 9,� -'1 �°� SPRINGSTED Public Fv�mue Adviso�s $7,000,000 CITY OF SAINT PAUL, MINNESOTA WATER REVENUE REFUNDING BONDS, SERIES 1997C (BOOK ENTRY ONLY) : ,/ \ ��/�r 7 �� SALE: June11,1997 Moody's Rating: Aa2 Standard 8 Poor's Rating: AA interest Netlnterest Truelnterest Bidder Rates Price Cost Rate MORGAN KEEGAN & CO., INC. HUTCHINSON, SHOCKEY, ERLEY & COMPANY Mesirow Financial Inc. FIRST OF AMERICA SECURITIES MORGAN KEEGAN & CO., INC. HUTCHINSON, SHOCKEY, ERLEY 8� COMPANY AND ASSOCIATE 4.75°!0 1998-2006 4.80% 2007 4.90% 2008 5.00% 2009-2012 4.00% 4.a5°!o 4.25% 4.35% 4.45% 4.55% 4.65% 4.70°!0 4.75% 4.80% 4.90°fo 5.00% 5.10% 5.125% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2�08 2009-2010 2011 2�12 $6,984,775.00 $2,573,935.40 4.8805% $6,941,008.80 $2,576,373.70 4.8910% (Continued) SAIN7' PAOL, MN � MINNEAPOLIS, MN BROOKFIELD, WI � OVERLAND PARK, KS � WASHINGTON, DC � IOWA CITY, IA Y Interest Netlnterest Truelnterest ` B dder Rates Price Cost Rafe PIPER JAFFRAY INC. NORWEST fNVESTMENT SERVICES, INC. ROBERT W. BAIRD & COMPANY, INCORPORATED SECURIT(ES CORPORATION OF iOWA 3.90% 4.15% 4.30% 4.40% 4.50% 4.60% 4.70% 4.75% 4.80% 4.85% 4.90% 5,00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-2012 A.G. EDWARDS & SONS, INCORPORA7ED 4.75% 1998-2006 4.80% 2007-2012 SMiTH BARNEY CRONIN & COMPANY, 1NCORPORATED 4.00% 4.15% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.85% 4.90°/a 5.00% 5.10% 5.15% 5.20% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-2009 2010 2011 2012 DAIN BOSWORTH INCORPORATED PRUDENTIAL SECURITIES, WC. ABN AMRO CHICAGO CORPORATION DEAN WiTTER REYNOLDS INCORPORATED PAINEWEBBERINCORPORATED OPPENHEIMER & CO., INC. 4.75% 1998-2005 4.80% 2006 4.90% 2007 5.00% 2008-2012 3.75% 4.10% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.85% 4.90% 5.00% 5.10% 5.20% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-20�9 2010 2091-2012 $6,932,123.35 $6,930,000.00 $6,945,356.80 $6,962,715.35 $6,932,726.80 $2,586,921.86 $2,589,05479 $2,610,708.41 $2,608,83923 $2,622,669.66 4.9196% 4.9438% 4.9535% 4.9575% 4.9$09% (Continued) REOFFERING SCHEDULE OF THE PURCHASER Rate Year Yield 4.75% 4.75% 4.75°l0 4.75% 4.75% 4.75% 4.75% 4.75°!0 4.75% 4.80% 4.90°l0 5.00% 5.00% 5.00% 5.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3.75% 4.10% 4.30°l0 4.40°!0 4.50% 4.60% 4.70% 4.75% 4.80% 4.85% 4.95% 5.45% $.15% 520% 5.25% �,� -��� BBI: 5.60% Average Maturity: 7.53 Years �� -1 �� CITX OF SAINT PAUL Norm Colemurs, Mayor June 11, 1997 Council President Thune Members of the City Council 15 West Kellogg Blvd, 3rd Floor Saint Paul, Minnesota 55102 OFFICE OF THb MAYOR OFFICE OF FINANCIAL SERV[CES laseph ReiG. Director Shiriey A. Davi.s, Treasurer IRFASURYSEC!!ON IS West Kelingg Blvd. Telephone: 612-266-8830 Raom 760 Ciry HaII Facsimi[e: 6I2-266-88-f0 SaintPaut, Minnesota SS102 Dear Council President Thune and Members of the City Council: Please find attached four subsiitution pages for resolution 97-719 accepting the winning proposal and awarding the bid for the $7,000,000 Water Revenue Refunding Bonds, Series 1997C, which is before you this afternoon. Bernie Bullert and I will be prepared to make a brief presentation on the impact of these changes. The changes simply reflect the pricing which took place this morning. If you have any questions concerning these changes, do not hesitate to call me at 266-8836. Sincerely, � � Martha Kantorowicz ��-��q 1 WHEREAS, "Aolder" as used herein means the person in 2 whose name a Bond is registered on the regis�ration books of the 3 City maintained by the registrar appointed as provided in a paragraph 8(the "Bond Registrar"); and 5 6 7 9 10 li 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 WHEREAS, pursuant to Minnesota Statutes, Section a75.60, Subdivision 2(9), public sale requirements do not apply to the Bonds, because the City has retained an independent financial advisor and this Council has determined to sell the Bonds by private negotiation, and the City has instead au�horized a competitive sale without publication of notice thereof as a form of private negotiation; and TdHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to provide certain continuing disclosure with respect to the Bonds; and WHEREAS, proposals for the Bonds have been solicited by Springsted Incoxporated pursuant to an Official Statement and Terms of Proposal therein: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows: 6 1. Acceptance of Proposal. The proposal of Morgan, Keegan & Company, Inc. (the "Purchaser"), to purchase $7,000,000 Water Revenue Refunding Bonds, Series 1997C, of the City (the �'BOnds" or "1997 Bonds", or individually a"Bond" or "1997 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 o£ $6,984,775.00, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser. The Director, Office of Financial Services, or his designee, is directed to retain the deposit of the Purchaser and to forthwith return to the others making proposals their good faith checks or drafts. 2. Title• Oriciinal Issue Date• Denominations; Maturities. The Bonds shall be titled "Water Revenue Refunding Bonds, Series 1997C��, shall be dated July 1, 1997, as the date of original issue and shall be issued forthwith on or a£ter 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, sha11 be in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on 353732.3 4 �c � —� t1 multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: Year 1998 1999 2000 2001 2�02 2003 2004 2005 Amount $730,000 800,000 420,000 225,000 315,OOD 660,000 690,OOD 640,000 Year 2006 2007 2008 2009 2010 2011 2012 Amount $3?5,000 425,000 595,000 165,000 240,000 400,000 350,000 3. Purpose• RefundinQ Findincrs. The Bonds (together with other available funds appropriated) shall provide funds for a current retunding of the Refunded Bonds (the "Refunding"). The 1994 Bonds were issued to finance improvements to the Water i3tility (the "Improvements"). The proceeds of the Bonds shall be deposited and used as provided in paragraph 17. The total cost of the Refunding, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. It is hereby found, determined and declared that (1) the Refunding is pursuant to Minnesota Statutes, Section 475.67, and (2) the Refunding is necessary or desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds, which bear interest aC a rate varying periodically. 4. Interest. The Bonds shall bear interest payable semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturitv Year Interest Rate Maturity Year Interest Rate 1998 1999 2000 2001 2002 2003 2004 2005 4 4 4 4 4 4 4 4 750 75 75 75 75 75 75 75 2006 2007 2008 2009 2010 2011 2012 4 4 4 5 5 5 5 750 80 90 00 00 00 00 5. Descrit�tion ot the CU1o1�a1 c:erLi=ica�es ac�u Global Book-Entrv Svstem. Upon their original issuance the Bonds will be issued in the form of a single Global CerCificate for 353T32.3 5 ��-�19 1 2 3 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3Q 31 32 33 34 35 36 37 38 39 40 41 42 43 (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum suf£icient for the payment thereof in £ull; or i£ any 1997 Bond should not be paid when due, it may nevertheless be discharged by depositing with the paying agent (but not i£ a City officer is the paying agent) or an escrow agent a sum sufficient £or the payment thereof in full. The City may also discharge any prepayable 1997 Bonds which are called for redemption on any date when they are prepayable according to their terms, by depositing with the paying agent (but not if a City officer is the paying agent) or an escrow agent on or before that date an amount equal to the principal, interest and redemption premium, i£ any, which are then due, provided that notice of such redemption has been duly given as provided in resolution. The City may also aC any time discharge the issue of the 1997 Bonds in whole or in part by complying with the applicable provisions of Minnesota Statutes, Section 475.67, and any amendments thereto, except that the funds deposited in escrow in accordance with said provisions may buC need not be in whole or part proceeds of advance refunding bonds. The City may discharge 1997 Bonds as herein provided without the consent of any Bondholders. 26. Fiscal Year. As used in this resolution the words '�fiscal year" shall mean the twelve (12) month period beginning on January 1 of each year and ending on December 31 of the same year. Should it be deemed advisable at some later date to change the fiscal yearly basis, the same may be done by proper actions to that effect, which change shall not constitute an amendment or modification o£ this resolution. 27. Appropriation. It is hereby found, determined and declared that on the date this resolution is adopted, there is more in the Reserve Account than is required upon the discharge of the Refunded Bonds. The difference is hereby appropriated to the 1997 Refunding Account_ The Board's additional initial appropriation to the 1997 Refunding Account necessary to accomplish the current refunding of the Refunded Bonds is hereby recognized and approved. 28. Refunded Bonds; Securitv. Unti1 retirement of the Refunded Bonds, a11 provisions hereCo£ore made for the security thereof shall be observed by the City and all of its officers and agents. 353732.3 45 ��-��� 29. Redemotion of Refunded Bonds. The Refunded Bonds sha11 be paid upon early redemption prior to October 1, 1997, all in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached hereto as Exhibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemption in substantially such form shall be mailed to the paying agent and shall be given by the paying agent to the holders of the Refunded Bonds at least ten (10) days prior to the redemption date in the manner provided for the Refunded Bonds. 30. Records and Certificates. The of£icers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and af£airs of the City, and such other a£fidavits, certificates and information as are required to show the facts relating to the legality and markeCability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, ancl all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 31. Neaative Covenants as to Use of Proceeds and Improvements. The City hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or permit them to be used, or to enter inCo any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within tihe meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Bonds that would cause them to be private activity bonds, and the average term of the Bonds is not longer than reasonably necessary for the governmenCal purpose of the issue. The City hereby covenants not to use the proceeds of the Bonds in such a manner as to cause the Bonds to be "hedge bonds" within the meaning of Section 149(g) of the Code. 32. Tax-Exemnt Status of the Bonds• Rebate; Elections_. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation requirements relating to temporary periods £or investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 353732.3 4 6 oR����!��_ a Preserrted By Referred To Council File # 1� � 1 l l � Mc ���" � GreenSheet# J��7�� �, �., �� RESOLUTION �F SAINT PAUL, MINNESOTA ��� Z/r///d Committee: Dffie 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 G�. 23 ACCEPTING PROPOSAL ON SALE OF $7,000,000 WATER REVENUE REFUNDING HONDS, SERIES 1997C, AND PROVIDING FOR THEIR ISSUANCE WHEREAS, the Director, Office of Financial Services, has presented proposals received for the sale of $7,000,000 Wate Revenue Refunding Bonds, Series 1997C (the "Bonds" or "1997 Bonds"), of the City of Saint Paul, Minnesota (the "City"); and WHEREAS, the proposals set forth on Schedule A attached hereto were received pursuant to the Terms of Proposal at the offices of Springsted Incorporated at 10:30 A.M., Central Time, this same day; and WHEREAS, the Director, Office of Finan,cial Serv�ces, has advised this Council that the proposal of /�prqan K@�AU.fI �„ ���� _� �, was found to be the most ° advantageous and"� has recommended that said proposal be accepted; and 3537323 ��'� �� WHEREAS, there are currently outstanding bonds of the City payable from Net Revenues of the City�s Water Utility, specifically the City's (a) $11,175,000 Water Revenue Bonds, Series 1993E (the "1993 Bonds"), issued pursuant to a resolution adopted by this Council on June 15, 1993, of which $7,790,000 remain outstanding, and (b) $10,000,000 Variable Rate Demand Water Revenue Bonds, Series 1994D (the "1994 Bonds"), issued pursuant to a resolution adopted by this Council on November 9, 1994, of which $9,600,000 remain outstanding; and WHEREAS, it is necessary and desirable to provide for the issuance of the Bonds on a parity of lien with the 1993 Bonds, to refund, in a current re£unding in advance of their stated maturities, all outstanding 1994 Bonds (also the "Refunded Bonds"); and WHEREAS, the Refunded Bonds are optionally redeemable at any time at a price of par plus accrued interest; and WHEREAS, refunding the Refunded Bonds (the "Refunding") is consistent with covenants made with the holders thereof, and is necessary and desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds which bear interest at a rate varying periodically, in order to avoid the uncertainty of variable rate debt service; and WHEREAS, the proceeds of the Refunded Bonds financed various improvements to the City's municipal water utility (the "Water Utility"), which has since its acquisition in 1885 been under the jurisdiction of the Board of Water Commissioners (the "Board"); and WHEREAS, the Board and this Council deem it necessary and expedient to undertake the Refunding; and WHEREAS, herein the City makes various findings demonstrating the propriety of the issuance of the Bonds on a parity with the 1993 Bonds; and WHEREAS, in accordance with advice received from the Board, this Council finds, determines and declares that it is necessary and expedient to provide moneys to finance the Refunding, continue a Reserve previously established, and provide for the costs of the issuance of the Bonds from the proceeds of bonds payable solely from the Net Revenues of the Water Util.ity; and WHEREAS, the City has heretofore issued registered obliqations in certificated form, and incurs substantial costs associated with their printing and issuance, and substantial 353732.3 2 9�-��°� F� 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 5� continuing.transaction costs selating.to their payment, transfer . and exchange; and WHEREAS, the City has determined that significant savings in transaction costs will result from issuing bonds in "global book-entry form", by which bonds are issued in certificated form in large denominations, registered on the books of the City in the name of a depository or its nominee, and held in safekeeping and immobilized by such depository, and such depository as part of the computerized national securities clearance and settlement system (the "National System") registers transfers of ownership interests in the bonds by making computerized book entries on its own books and distributes payments on the bonds to its Participants shown on its books as the owners 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 WHEREAS, "Participants" means those financial institutions for whom the Depository effects book-entry transfers and pledges of securities deposited and immobilized with the Depository; and WFIEREAS, The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, or any of its successors or successors to its functions hereunder (the "Depository"), will act as such depository with respect to the Bonds except as set forth below, and the City has heretofore delivered a letter of representations (the "Letter of Representations") setting forth various matters relating to the Depository and its role with respect to the Bonds; and WHEREAS, the City will deliver the Bonds in the form of one certificate per maturity, each representing the entire principal amount of the Bonds due on a particular maturity (each a"Global Certificate"), which single certificate per maturity may be transferred on the City's bond register as required by the Uniform Commercial Code, but not exchanged smaller denominations unless the City determines to issue Replacement Bonds as provided below; and date for WHEREAS, the City will be able to replace the Depository or under certain circumstances to abandon the "global book-entry form" by permitting the Global Certificates to be exchanged for smaller denominations typical of ordinary bonds registered on the City's bond register; and "Replacement Bonds'� means the certificates representing the Bonds so authenticated and delivered by the Bond Registrar pursuant to paragraphs 6 and 12 hereaf; and 353732.3 �J 7-719 1 WHEREAS, "Holder" as used herein means the person in 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 whose name a Bond is registered on the registration books of the City maintained by the registrar appointed as provided in paragraph 8 (the "Bond Registrar"); and WHEREAS, pursuant to Minnesota Statutes, Section 475.60, Subdivision 2(9), public sale requirements do not apply to the Bonds, because the City has retained an independent financial advisor and this Council has determined to sell the Bonds by private negotiation, and the City has instead authorized a competitive sale without publication of notice thereo£ as a form of private negotiation; and WHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to provide certain continuing disclosure with respect to the Bonds; and WHEREAS, proposals for Springsted Incorporated pursuant Terms of Proposal therein: the Bonds have been solicited by to an Official Statement and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows: 6 1. Acceptance of Proposal. The proposal of Morgan, Keegan & Company, Inc. (the "PUrchaser"), to purchase $7,000,000 Water Revenue Refunding Bonds, Series 1997C, of the City (the "BOnds" or "1997 Bonds'�, or individually a"Bond" or "1997 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 $6,984,775.00, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser. The Director, Office of Rinancial Services, or his designee, is directed to retain the deposit of the Purchaser and to forthwith return to the others making proposals their good faith checks or drafts. 2. Title; Oriciinal Issue Date: Denominations; Maturities. The Bonds shall be titled "Water Revenue Refunding Sonds, Series 1997C", shall be dated July 1, 1997, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward. Global Certificates sha11 each be in the denomination of the entire principal amount maturing on a single date. Replacement Bonds, if issued as provided in paragraph 6, shall be in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on 3537323 0 � �, �i � multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: Year 1998 1999 2000 2001 2002 2043 2004 2005 Amount $730,000 800,000 420,000 225,000 315,000 660,000 690,000 640,000 Year 2006 2007 2008 2009 2010 2011 2012 Amount $345,000 425,000 595,000 165,000 240,000 400,000 350,000 3. Purpose; Refunding Findincts. The Bonds (together with other available funds appropriated) shall provide funds for a current refunding of the Refunded Bonds (the "Refunding"). The 1994 Bonds were issued to finance improvements to the Water Utility (the "Improvements"). The proceeds of the Bonds shall be deposited and used as provided in paragraph 17. The total cost of the Refunding, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. It is hereby found, determined and declared that (1) the Refunding is pursuant to Minnesota Statutes, Section 475.67, and (2) the Refunding is necessary or desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds, which bear interest at a rate varying periodically. 4. Interest. The Bonds shall bear interest payable semiannually on 3une 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturitv Year Interest Rate Maturitv Year Interest Rate 1998 1999 2000 2001 2002 2003 2004 20�5 4.75� 4.75 4.75 4.75 4.75 4.75 4.75 4.75 2006 2007 2008 2009 201� 2011 2012 4 4 4 5 5 5 5 75% 80 90 00 OQ 00 00 5. DescriAtion of the Global Certificates and Global Book-Entrv Svstem. Upon their original issuance the Bonds will be issued in the form of a single Global Certificate for 353732.3 5 �t�1-r1�°� 4 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 each maturity, deposited with the Depositosy by the Purchaser and immobilized as provided in paragraph 6. No beneficial owners of interests in the Bonds will receive certificates representing their respective interests in the Bonds except as provided in paragraph 6. Except as so provided, during the term of the Bonds, beneficial ownership (and subsequent transfers of beneficial ownership} of interests in the Global Certificates will be reflected by book entries made on the records of the Depository and its Participants and other banks, brokers, and dealers participating in the National System. The Depository's book entries of beneficial ownership interests are authorized to be in increments of $5,000 of principal of the Bonds, but not smaller increments, despite the larger authorized denominations of the Global Certificates. Payment of principal of, premium, if any, and interest on the Global Certificates will be made to the Bond Registrar as paying agent, and in turn by the Bond Registrar to the Depository or its nominee as registered owner of the Global Certificates, and the Depository according to the laws and rules governing it will receive and forward payments on behalf of the bene£icial owners of the Global Certificates. Payment of principal of, premium, if any, and interest on a Global Certificate may in the City's discretion be made by such other method of transferring funds as may be requested by the Holder of a Global Certificate. C=� Pursuant to the request of the Purchaser to the Depository, which request is required by the Terms of Proposal, immediately upon the original delivery of the Bonds the Purchaser will deposit the Global Certificates representing all of the Bonds with the Depository. The Global Certificates shall be in typewritten form or otherwise as acceptable to the Depository, shall be registered in the name of the Depository or its nominee and shall be held immobilized from circulation at the offices of the Depository on behalf of the Purchaser and subsequent bondowners. The Depository or its nominee will be the sole holder of record of the Global Certificates and no investor or other party purchasing, selling or otherwise transferring ownership of interests in any Bond is to receive, hold or deliver any bond certificates so long as the Depository holds the Global Certificates immobilized from circulation, except as provided below in this paragraph and in paragraph 12. Certificates evidencing the Bonds may not after their original delivery be transferred or exchanged except: (i) Upon registration of transfer of ownership of a Global Certificate, as provided in paragraph 12, 3537323 9"1-'1�� FI 5 6 7 8 9 l0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 (ii) To any successor of the Depository (or its nominee) or any substitute depository (a "substitute depository") designated pursuant to clause (iii) of this subparagraph, provided that any successor of the Depository or any substitute depository must be both a"clearing corporation" as defined in the Minnesota Uniform Commercial Code at Minnesota Statutes, Section 336.8-102, and a qualified and registered "clearing agency" as provided in Section 17A of the Securities Exchange Act o£ 1934, as amended, (iii) To a substitute depository designated by and acceptable to the City upon (a) the determination by the Depository that the Bonds shall no longer be eligible for its depository services or (b) a determination by the City that the Depository is no longer able to carry out its functions, provided that any substitute depository must be qualified to act as such, as provided in clause (ii) of this subparagraph, or (iv) To those persons to whom transfer is requested in written transfer instructions in the event that: (a) the Depository shall resign or discontinue its services for the Bonds and the City is unable to locate a ssbstitute depository within two (2) months following the resignation or determination of non-eligibility, or (b) upon a determination by the City in its sole discretion (1) that the continuation of the book-entry system described herein, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds, in either of which events the City shall notify Holders of its determination and of the availability of certificates (the "Replacement Bonds") to Holders requesting the same and the registration, transfer and exchange of such Bonds will be conducted as provided in paragraphs 9B and 12 hereof. In the event of a succession of the Depository as may be authorized by this paragraph, the Bond Registrar upon presentation of Global Certificates shall register their transfer to the substitute or successor depository, and the substitute or successor depository shall be treated as the Depository for all 3537323 7 9�-'1�9 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 puxposes and functions under this Representations shall not apply to depository unless the City and the depository so agree, and a simila 7. Redemption. resolution. The Letter of a substitute or successor substitute or successor r agreement may be entered into_ (a) Optional Redemption; Due Date. All Bonds maturing after December 1, 2005, shall be subject to redemption and prepayment at the option of the City on such date and on any day thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of Che Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City sha11 determine; and if only part of the Bonds having a common maturity date are called for prepayment, the Global Certificates may be prepaid in $5,000 increments of principal and, if applicable, the specific Replacement Bonds to be prepaid shall be chosen by lot by the Bond RegisCrar. 8onds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. (b) Notation on Global Certificate. Upon a reduction in the aggregate principal amount of a Global Certificate, the Holder may make a notation of such redemption on the panel provided on the Global Certificate stating the amount so redeemed, or may return the Global Certificate to the Bond Registrar in exchange for a new Global Certificate authenticated by the Bond Registrar, in proper principal amount. Such notation, if made by the Holder, shall be for reference only, and may not be relied upon by any other person as being in any way determinative of the principal amount of such Global Certificate outstanding, unless the Bond Registrar has signed the appropriate column of the panel. (c) Selection of Replacement Bonds. To effect a partial redemption of Replacement Bonds having a common maturity date, the Bond Registrar prior to giving notice of redemption shall assign to each Replacement Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Replacement Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Replacement Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Replacement Bonds to be redeemed. The Replacement Bonds to be redeemed shall be the Replacement Bonds to which were assigned numbers 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 353732.3 9'1-� tq 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 redeemed as shall equal $5,000 £or each number assigned to it and so selected. (d) Partial Redemption of Replacement Bonds. If a Replacement Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City and Bond Registrar duly executed by the 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 deliver 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 Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion o£ the principal of the Bond so surrendered. (e) Recruest for Redemption. The Bond Registrar shall call Bonds for redemption and payment as herein provided upon receipt by the Bond Registrar at least forty-five (45) days prior to the redemption date of a request of the City, in written form if the Bond Registrar is other than a City officer. Such request shall specify the principal amount of Bonds to be called for redemption and the redemption date. (f) Notice. Mailed notice of redempti the gaying agent (if other than a City office affected Holder. If and when the City shall Bonds for redemption and payment prior to the thereof, the Bond Registrar shall give writte of the City of its intention to redeem and pay suc office of the Bond Registrar. Notice of redempti given by first class mail, postage prepaid, maile thirty (30) days prior to the redemption date, to Bonds to be redeemed, at the address appearing in Register. All notices of redemption shall state: (i) (ii) The redemption date; The redemption price; be given o each of the maturity in the h Bonds at on shall be d not less t each Holder the Bond to name the han of (iii) If less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (iv) That on the redemption date, the redemption price will become due and payable upon each such Bond, and that 353732.3 0 on shall r) and t call any stated n notice 9 ' 1 •' � interest thereon shall cease to accrue from and after said date; and 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 (v) The place where such Bonds are to be surrendered for payment of the redemption price (which shall be the office of the Bond Registrar). (g) Notice to Depositorv. Notices to The Depository Trust Company or its nominee shall contain the CUSIP numbers of the Bonds. If there are any Holders of the Bonds other than the Depository or its nominee, the Bond Registrar shall use its best efforts to deliver any such notice to the Depository on the business day next preceding the date of mailing of such notice to all other Holders. 8. Bond Reqistrar. First Trust National Association in Saint Paul, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. A successor Bond Registrar shall be an officer of the City or a bank or trust company eligible for designation as bond registrar pursuant to Minnesota Statutes, Chapter 475, and may be appointed pursuant to any contract the City and such successor Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the Holders (or record holders) of the Bonds in the manner set forth in the forms of Bond and paragraph 14 of this resolution. 9. Forms of Bond. The Bonds sha11 be in the form of Global Certificates unless and until Replacement Bonds are made available as provided in paragraph 6. Each form o£ bond may contain such additional or different terms and provisions as to the form of payment, record date, notices and other matters as are consistent with the Letter of Representations and approved by the City Attorney. A. G1oba1 Certificates. The Global Certificates, together with the Certificate of Registration, the Register of Partial Payments, the form of Assignment and the registration information thereon, shall be in substantially the £ollowing form and may be typewritten rather than printed: 353732.3 FS�] �1-1�q r� R- INTEREST RATE REGISTERED OWNER: PRINCIPAL AMOUNT: UNITED STATES OF AMERICA STATE OF MINNESOTA RAMSEY COUNTY CITY OF SAINT PAUL WATER REVENUE REFUI3DIATG BOND, SERIES 1997C 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP December 1, iiZiSilFe\:b: KNOW ALL PERSONS BY THESE PRESENTS that the City of Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above or on the certificate of registration below, or registered assigns, solely from the source and in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for earlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, at the rate per annum specified above (calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable in same-day funds by 2:30 p.m., Eastern time, upon presentation and surrender hereof at the principal office of in , Minnesota (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer; provided, however, that upon a partial redemption of this Bond which results in the stated amount hereof being reduced, the Holder may in its discretion be paid without presentation of this Bond, which payment shall be received no later than 2:30 p.m., Eastern time, and may make a notation on the panel provided herein of such redemption, stating the amount so redeemed, or may return the Bond to the Bond Registrar in exchange for a new Bond in the proper principal amount. Such notation, i£ 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 July 1, 1997 353732.3 1 1 q'1-r11� 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 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 2:30 p.m., Eastern time, to the person in whose name this Bond is registered (the "Holder" or "BOndholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Interest payments shall be received by the Iiolder no later than 2:30 p.m., Eastern time; and principal and premium payments shall be received by the Holder no later than 2:30 p.m., Eastern time, if the Bond is surrendered for payment enough in advance to permit payment to be made by such time. Any interest not so timely paid shall cease to be payable to the person who is the Aolder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the olose of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for paymenC of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. Date of Pavment Not Business Dav. If the date for payment of the principal of, premium, if any, or interest on this Bond sha11 be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. Redemption. All Bonds of this issue (the "Bonds") maturing after December 1, 2005, are subject to redemption and prepayment at the option of the Issuer on such date and on any day therea£ter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City shall determine; and if only part of the Bonds having a common maturity date are called for prepayment, this Bond may be prepaid in $5,000 increments of principal. Bonds or portions thereof called for redemption shall be due and payable on the redemption clate, and interest thereon shall cease to accrue from and after the redemption date. 353732.3 �-2 97•��� 2 3 4 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Notice of Redemption. Mailed notice of redemption shall be given to the paying agent (if other than a City offiaer) and to each affected Holder of the Sonds. In the event any of the Bonds are called for redemption, written notice thereof will be given by first class mail mailed not less than thirty (30) days prior to the redemption date to each Aolder of Bonds to be redeemed. In connection with any such notice, the "CUSIP" numbers assigned to the Bonds shall be used. fteplacement or Notation of Bonds after Partial Redemption. Upon a partial redemption of this Bond which results in the stated amount hereof being reduced, the Holder may in its discretion make a notation on the panel provided herein of such redemption, stating the amount so redeemed. Such notation, if made by the Holder, shall be for reference only, and may not be relied upon by any other person as being in any way determinative of the principal amount of the Bond outstanding, unless the Bond Registrar has signed the appropriate column of the panel. Otherwise, the Holder may surrender this Bond to the Bond Registrar (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or his, her or its attorney duly authorized in writing) and the Issuer shal� execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond of the same series having the same stated maturity and interest rate and of the authorized denomination in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: Purpose; Special Obligation. This Bond is one of an issue in the total principal amount of $7,000,000, 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 Constitution and laws of the State of Minnesota and Che Charter of the Issuer, and pursuant to a resoluCion adopted by the City Council of the Issuer on June 11, 1997 (the "Resolu- tion"), for the gurpose of providing, together with certain other moneys of the Issuer, funds sufficient for a current refunding of the Issuer's outstandinq Variable Rate Demand Water Revenue Bonds, Series 1994D. The Bonds and the interest thereon are payable solely and exclusively from the Net Revenues of the Water utility of the Issuer pledged to the payment thereof, and do not constitute a debt of the Issuer or of the Saint Paul Board of Water Commissioners within the meaning of any constitutional, Charter or statutory limitation of indebtedness. In the event of any default hereunder, the Holder of this Bond may exercise any of the rights and privileges granted by the laws of the State of 353732.3 13 9�-'1�°� 1 Minnesota, subject to-the provisions of the Resolution. The 2 Bonds of this issue, together with the Water Revenue Bonds, 3 Series 1993E, issued in the principal amount of $11,175,000, are 4 a first and prior lien upon the Net Revenues of the Water Utility 5 of the Issuer, except that the Issuer is authorized under certain 6 conditions to issue additional revenue obligations on a parity of 7 lien with these Bonds, all as provided in the Resolution. 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2$ 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Action by Holders. The Holders of twenty percent (20°s) 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 o£ any and all of the covenants and duties specified in the Resolution to be performed by the Issuer or the Board of Water Commissioners or their officers and agents; provided, however, that nothing shall affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of and interest on each of the Bonds issued to the respective Holders thereof at the time and place, from the source and in the manner provided in the Bonds. Denominations; Exchanae; 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. G1oba1 Certi£icates 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 registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Replacement Bonds. Replacement Bonds may be issued by the Issuer in the event that: (a) the Depository shall resign or its services for the Bonds, and only if unable to locate a substitute depository 353732.3 14 discontinue the Issuer is within two (2) 9'l -'1 �°� months following the resignation-or determination of non-eligibility, or ib) upon a determination by the Issuer in its sole discretion (1) that the continuation of the book-entry system described in the Resolution, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds. Transfer. This Bond shall be registered in the name of the payee on the books of the Issuer by presenting this Bond for registration to the Bond Registrar, who will endorse his, her or its name and note the date of registration opposite the name of the payee in the certificate of registration attached hereto. Thereafter this Bond may be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representatives, and the Issuer and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until this Bond is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar. Transfer of this Bond may, at the direction and expense of the Issuer, be subject to certain other restrictions if required to qualify this Bond as being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended. Fees uoon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reqistered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. 353732.3 1 5 ��-'1 �q 1 Authentication This Bond shall not be valid or become 2 obligatory for any puxpose or be entitled to any security unless 3 the Certificate of Authentication hereon shall have been executed 4 by the Bond Registrar. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2S 29 30 31 32 33 34 Not Oualified Tax-Exempt Obligations. The Bonds have not been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. The Bonds do not qualify for such designation. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Charter of the Issuer to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or Charter limitation of indebtedness; and that the Issuer will establish rates and charges for the water service furnished by its Water Utility sufficient in amount to promptly meet the principal and interest requirements of this issue. IN WITNESS WHEREOF, the City of Saint Pau1, Ramsey County, Minnesota, by its City Council has caused this Bond to be sealed with its official seal and to be executed on its behal£ by the photocopied facsimile signature of its Mayor, attested by the photocopied facsimile signature of its Clerk, and countersigned by the photocopied facsimile signature of its Director, Office of Financial Services. 353732.3 � ��-1�� Date of Registration: BOND REGISTRAZ2'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Registrable by: Payable at: CITY OF SAINT PAUL, RAMSEY COiTNTY, MINNESOTA Mayor Attest: Bond Registrar � By Authorized Signature (SEAL) City Clerk Countersigned: Director, Office of Financial Services Water Revenue Refunding Bond, Series 1997C, No. R- 353T52.3 17 `i'1-'1�°� CERTIFICATE 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 SIGNATURE OF REGISTRATION REGISTERED OWNER BOND REGISTRAR 353732.3 1g °��-� �°� REGISTER OF FARTIAL PAYMENTS The principal amount of the attached Bond has been prepaid on the dates and in the amounts noted below: Signature of Signature of Date Amount Bondholder Bond Reaistrar If a notation is made on this register, such notation has the effect stated in the attached Sond. Partial payments do not require the presentation of the attached Bond to the Bond Registrar, and a Holder could fail to note the partial payment here. 353732.3 7-9 `t`1-1�q 1 2 3 4 5 6 7 8 9 io 11 12 13 14 15 16 17 18 19 20 21 22 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, sha11 be construed as though they were written out in full according to applicable laws or regulations: TEN COM TEN ENT JT TEN - �iyYui_� 353732.3 - as tenants in oommon - as tenants by the entireties as joint tenants with right of survivorship and not as tenants in common as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 20 �� �1�� ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the attached Bond and does hereby irrevocably constitute and appoint attomey to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the attached Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other ��Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 3537323 21 9� -'1 �� 1 B. Replacement Bonds. If the City has notified 2 Holders that Replacement Bonds have been made available as 3 provided in paragraph 6, then for every Bond thereafter 4 transferred or exchanged (including an exchange to reflect the 5 partial prepayment of a Global Certificate not previously 6 exchanged for Replacement Bonds) the Bond Registrar shall deliver 7 a certificate in the form of the Replacement Bond rather than the 8 Global Certificate, but the Holder of a Global Certificate shall 9 not otherwise be required to exchange the Global Certificate for 10 one or more Replacement Bonds since the City recognizes that some li beneficial owners may prefer the convenience of the Depository's 12 registered ownership of the Bonds even though the entire issue is 13 no longer required to be in global book-entry form. The 14 Replacement Bonds, together with the Bond Registrar's Certi£icate 15 of Authentication, the form of Assignment and the registration 16 information thereon, shall be in substantially the following 17 form: 18 3537323 22 q�-��� 1 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 UNITED STATES OF AMERICA STATE OF MINNESOTA RAMSEY COUNTY CITY OF SAINT PAUL � WATER REVENUE REF`UNDING BOND, SERIES 1997C INTEREST RATE MATURITY DATE OF DATE ORIGINAL ISSUE CUSIP July 1, 1997 REGISTERED OWNER: PRTNCIPAI, AMOiTNT: DOLLARS IZNOW ALL PERSONS BY THESE PRESENTS that the City o£ Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, solely from the source and in the manner hereinafter set forth, the principal amount speci£ied above, on the maturity date specified above, unless called for earlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, 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 Tnterest Payment Date to which interest has been paid or, if no interesC has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , (the "Bond Registrar��), acting as paying agent or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder'�) on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date��) fixed by the Bond 353732.3 2 3 °1�1-11°1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Registrar whenever money becomes available for payment o£ the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALi, PURPOSES HAVE THE SAMS EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Charter of the Issuer to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or Charter limitation of indebtedness; and that the Issuer will establish rates and charges for the water service furnished by its Water Utility sufficient in amount to promptly meet the principal and interest requirements of this issue. IN WITNESS WHEREOF, the City of Saint Paul, Ramsey County, Minnesota, by its City Council has caused this Bond to be sealed with its official seal or a facsimile thereof and to be executed on its behalf by the original or facsimile signature of its Mayor, attested by the original or facsimile signature of its Clerk, and countersigned by the original or facsimile signature of its Director, Office of Financial Services. 3537323 24 °Iri - `l�'� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Date of Registration: BOND REGISTRP.R'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Bond Registrar � By Authorized Signature (SEAL) 353732.3 Registrable by: Payable at: _ CITY OF SAINT PAUL, RAMSEY COUNTY, MINNESOTA Mayor Attest: City Clerk Countersigned: Director, Office of Financial Services 25 °1'1-�l �°, ON REVERSE OF BOND Date of Pavment Not Business Dav. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, 1ega1 holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. Redemption. All Bonds of this issue (the "BOnds") maturing after December 1, 2005, are subject to redemption and prepayment at the option of the Issuer on such date and on any day thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City shall determine; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Notice of Redemption. Mailed notice of redemption shall be given to the paying agent (if other than a City officer) and to each affected Holder of the Bonds. In the event any of the Bonds are called for redemption, written notice thereof will be given by first class mail mailed not less than Chirty (30) days prior to the redemption date to each Holder of Bonds to be redeemed. In connection with any such notice, the ��CUSIP" numbers assigned to the Sonds sha11 be used. Selection of Bonds for Redemotion. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount o£ 353732.3 2 6 °1'1-'1 l� 1 such Bond of a denomination of more than $5,000 shall be redeemed 2 as shall equal $5,000 for each number assigned to it and so 3 selected. If a Bond is to be redeemed only in part, it shall be 4 surrendered to the Bond Registrar (with, if the Issuer or Bond 5 Registrar so requires, a written instrument of transfer in form 6 satisfactory to the Issuer and Bond Registrar duly executed by 7 the Holder thereof or his, her or its attorney duly authorized in 8 writing) and the Issuer shall execute (if necessary) and the Bond 9 Registrar sha11 authenticate and deliver to the Holder of such 10 ii 12 13 14 15 16 17 is 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion o£ the principal of the Bond so surrendered. Issuance; Purpose: Special Obliaation. This Bond is one of an issue in the total principal amount of $7,000,000, all of like date of original issue and tenor, except as to number, maturiCy, inCerest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State o£ Minnesota and the Charter of the Issuer, and pursuant to a resolution adopted by the City Council of the Issuer on June il, 1997 ithe "Resolution"), for the purpose of providing, together with certain other moneys of the Issuer, funds sufficient for a current refunding of the Issuer's outstanding Variable Rate Demand Water Revenue Bonds, Series 1994D. The Bonds and the interest thereon are payable solely and exclusively from the Net Revenues of the Water Utility of the Issuer pledged to the payment thereof, and do not constitute a debt of the Issuer or of the Saint Paul Board of Water Commissioners within the meaning of any constitutional, Charter or statutory limitation of indebtedness. In the event of any default hereunder, the Holder of this Bond may exercise any of the rights and privileges granted by the laws of the State of Minnesota, subject to the provisions of the Resolution. The Bonds of this issue, together with the Water Revenue Bonds, Series 1993E, issued in the principal amount of $11,175,000, are a first and prior lien upon the Net Revenues of the Water Utility of the Issuer, except that the Issuer is authorized under certain conditions to issue additional revenue obligations on a parity of lien with these Bonds, all as provided in the Resolution. Action by Holders. The Holders of twenty percent t20%) or more in aggregate principal amount o£ Bonds at any time outstanding may, either by law or in equity, by suit, action, or other proceedings, protect and enforce the rights o£ all Holders of Bonds then outstanding, or enforce and compel the performance of any and all of the covenants and duties specified in the 353T523 2 7 q1-11� 1 2 3 4 5 6 7 8 9 10 11 12 13 i4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Resolution to be performed by the Issuer or the Board of Water Commissioners or their officers and agents; provided, however, that nothing shall affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of and interest on each of the Bonds issued to the respective Holders thereof at the time and place, from the source and in the manner provided in the Bonds_ Denominations: Exchanae; Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Re£erence is hereby made to the Resolution for a description o£ the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of.the Issuer-contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange £or this Bond, one or more new fully, registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees uQon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reaistered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. 353732.3 2 $ gR •'1�°� 1 2 3 4 5 6 7 8 9 10 Authentication This Bond shall not be valid or become obligatoYy for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Not Oualified Tax-Exemnt Obliaations. The Bonds have not been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. The Bonds do not qualify for such designation. 353732.3 29 9rt •'1 � °� 1 2 3 4 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable law regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 353732.3 � 9'�-'1�°l ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 3537323 31 an-��g 2 3 4 9 io 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3� 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 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 seal of the City may be a printed or photocopied facsimile; and provided further that any of such signatures may be printed or photocopied facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of any such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case an}r 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 Sonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. 11. Authentication; Date of Recristration. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. 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 Sond Registrar sha11 insert as the date of registration the date of original issue, which date is July 1, 1997. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 12. Registration; Transfer; Exchanae. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. A Global Certificate shall be registered in the name of the payee on the books of the Bond Registrar by presenting the Global Certificate for registration to the Bond Registrar, who will endorse his or her name and note the date of registration opposite the name of the payee in the certificate of registration on the Global Certificate. Thereafter a Global Certificate may 3537323 3 2 °l'1 • �l\°� 1 2 3 4 8 9 10 ii 12 13 14 15 16 i� 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representative, and the City and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until a Global Certificate is presented with such assignment £or registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted thereon by the Bond Registrar, all subject to the terms and conditions provided in this resolution and to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar. Transfer of a Global Certificate may, at the direction and expense of the City, be subject to other restrictions if required to qualify the Global Certificates as being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended, If a Global Certificate is to be exchanged for one or more Replacement Bonds, all of the principal amount of the Global Certificate shall be so exchanged. Upon surrender for transfer of any Replacement Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond RegisCrar shall authenticate, insert the date of registration (as provided in paragraph 11) of, and deliver, in the name of the designated transferee or transferees, one or more new Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder of a Replacement Bond, Replacement Bonds may be exchanged for Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Replacement Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Iteplacement Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Replacement Bonds which the Holder making the exchange is entitled to receive. Global Certi£icates may not be exchanged for Global Certificates of smaller denominations. Al1 Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly cancelled by 353732.3 cicj �l�-�t�°� 1 the Bond Registrar and thereafter disposed of as directed by the 2 City. 3 4 All Bonds delivered in exchange for or upon transfer of 5 Bonds shall be valid special obligations of the City evidencing 6 the same debt, and entitled to the same benefits under this 7 resolution, as the Bonds surrendered for such exchange or 8 transfer. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 4S 49 50 Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any 1ega1 or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 13. Riahts Ubon Transfer or Exchange. &ach Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 14. Interest Payment: Record Date. Interest on any Global Certificate shall be paid as provided in the first paragraph thereof, and interest on any Replacement Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder'�) on the registration books of the City maintained by the Bond Registrar, and in each case at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date"1 fixed by the Bond Registrar whenever money becomes available £or payment of the de£aulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Aolders not less than ten (10) days prior to the Special Record Date. 3537323 34 q�.�►t� 15. Holders• Treatment o£ ReQistered Owner; Consent of Iiolders. (A) For the purposes of all actions, consents and other matters affecting Iiolders of the Bonds, other than payments, redemptions, and purchases, the City may {but shall not be obligated to) treat as the Holder of a Bond the beneficial owner of the Bond instead of the person in whose name the Bond is registered. For that purpose, the City may ascertain the identity of the beneficial owner of the Bond by such means as the Bond Registrar in its sole discretion deems appropriate, including but not limited to a certificate from the person in whose name Che Bond is registered identifying such beneficial owner. (B} The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest isubject to the payment provisions in paragraph 14 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. (C) Any consent, request, direction, approval, objection or other instrument to be signed and executed by the Holders may be in any number of concurrent writings of similar tenor and must be signed or executed by such Aolders 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 instrument, namely: (1) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such writing acknowledged before him the execution thereof, or by an a£fidavit of any witness to such execution. (2) Subject to the provisions of subparagraph (A) above, the fact of the ownership by any person of Bonds and the amounts and numbers of such Bonds, and the date of the holding of the same, may be proved by reference to the bond register. 353732,3 3 5 �� -^� �q 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 16. Deliverv; Application of Proceeds. The Global Certificates when so prepared and executed shall be delivered by the Director, O£fice of Financial Services, to the Purchasex upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 17. Fund and Accounts. For the convenience and proper administration of the proceeds from the sale of the 1997 Bonds and for the payment of principal of and interest on the 1997 Bonds, the Board of Water Commissioners Water Utility Enterprise Fund (the "Water Utility Fund", heretofore in resolutions relating to the 1993 Bonds and 1994 Bonds also referred to as the "Water Utility Fund") heretofore created shall continue in force and e£fect as a separate fund of the City and of the Board until a11 of the 1997 Bonds are fu11y paid and retired. In the Water Utility Fund there is hereby created a 1997 Refunding Account and in addition there are, and there shall continue to be, the following accounts: (a) A"1997 Refunding Account", to which shall be credited all proceeds of the sale of the 1997 Bonds, together with any other moneys provided by the City as set forth in paragraph 27. The 1997 Refunding Account shall be used to pay the 1993 Bonds upon their early redemption and to pay the costs of issuing the 1997 Bonds. The moneys in the 1997 Refunding Account shall be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the 1997 Refunding Account shall be deposited in the Revenue Bond Debt Service Account. (b) An "O�eration and Maintenance Account", into which shall be paid all gross revenues and earnings derived from the operation of the Water Utility system including any assessments which may from time to time be levied with respect to the Water Utility. From this account there shall be paid all, but only, current expenses of said system. Current expenses shall include the reasonable and necessary costs of administering, operating, maintaining and insuring the system, salaries, wages, costs of materials and supplies, costs of water production and distribution, necessary legal, engineering and auditing services, and a11 other items which, by sound accounting practices, constitute normal, reasonable and current costs of operation and maintenance, but excluding any allowance for depreciation, extraordinary repairs and payments into the Revenue Bond Debt Service Account and Reserve Account. There shall at all times be maintained in said account a reserve in an amount sufficient to cover the operation and maintenance costs of the Water Utility system for the ensuing fifteen (15? day period; neither said reserve nor any annual 3537323 36 y�-��� addition thereto shall constitute "Net Revenues" as defined below. The balance from time to time remaining in the Operation and Maintenance Account, including interest or other earnings received from the investment of any moneys in the Water Utility Fund, after paying or providing for the foregoing items, shall constitute, and are referred to in this resolution as, "Net Revenues"_ Payments of fees to trustees for bonds, to providers of liquidity facilities or credit enhancement facilities for bonds and remarketing agents for bonds are also current expenses. (c) A°Revenue Bond Debt Service Account", into which there shall be credited and to which there is hereby irrevocably pledged from the Net Revenues of the operation of the Water Utility system monthly commencing in July, 1997, a sum equal to at least 1/12 of the total principal and interest on the 1997 Bonds and any other bonds issued on a parity therewith during the ensuing twelve (12) months; provided, however, that no further payments need be made to said account when the moneys held therein are sufficient for the payment of a11 principal and interest due on said bonds on and prior to the next maturity date. No money shall be paid out of said account except to pay principal, premium, if any, and interest on the 1997 Bonds and any other bonds which are issued on a parity with the 1997 Bonds. (d) A"Reserve Account�', which was heretofore created, and is hereby continued, to be used only when and if moneys in the Revenue Bond Debt Service Account or other moneys available therefor are insufficient to pay principal, premium, if any, and interest on the bonds payable from the Revenue Bond Debt Service Account; provided, however, that the moneys in the Reserve Account may be used to prepay said bonds, when such prepayment will retire all of the bonds then outstanding. Amounts already in the Reserve Account pursuant to the resolutions authorizing the issuance of the 1993 Bonds and 1994 Bonds shall be maintained therein upon the issuance of the 1997 Bonds to the extent necessary to equal the amount required to be maintained in the Reserve Account as set forth below, being initially amounts required for the 1993 Bonds and 1997 Bonds. Whenever the moneys in the Reserve Account exceed the amount required to be maintained in the Reserve Account as set forth below, such excess may be transferred to the Revenue Bond Debt Service Account; and whenever the moneys in the Reserve Account sha11 be less than said amount, the Reserve Account shall be restored to said amount from the next available Net Revenues. The amount required to be maintained in the Reserve Account shall be an amount equal to the lesser of: tl) ten percent (10�) of the original princigal amount of 353732.3 3 7 q�-�� � 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 the 1997 Bonds and other bonds payable from the Revenue Bond Debt Service Account issued after the 1993 Bonds on a parity of lien therewith, or {2) the maximum principal and interest due in any year on the bonds payable £rom the Revenue Bond Debt Service Account; and whenever the moneys in the Reserve Account exceed such amount required to be maintained therein, such excess may be transferred to the Revenue Bond Debt Service Account. When only bonds issued after the 1994 Bonds are outstanding, the "maximum principal and interest due in any year" on variable rate bonds shall be calculated at such time (for any variable rate bonds issued prior to such time) or in connection with their issuance (for variable rate bonds issued after such time) assuming the variable rate bonds bear fixed interest for the remainder of their terms or for their terms, as appropriate, at the rates prevailing at such time (for any variable rate bonds issued prior to such time) or at the time of their issuance (for variable rate bonds issued after such time) for utility revenue bonds of comparable quality, maturity and taxable or tax-exempt status, provided that other or different assumptions may be used if necessary to obtain an investment grade credit rating for the variable rate bonds or to maintain the credit rating(s) then in effect for the bonds then outstanding. (e) Net Revenues in excess of those required for the foregoing purposes may be used for any proper purpose. (f) The money in the Water Utility Fund shall be allotted and paid to the various accounts herein established in the order in which said accounts are listed on a cumulative basis, and if in any month the money in said accounts is insufficient to place the required amount in any accounts, the deficiency shall be made up in the following month or months after payment into all other accounts having a prior claim on said Net Revenues have been made in full. (g) All money held in the Revenue Bond Debt Service Account and the Reserve Account created by this resolution shall be kept separate and apart from all other municipal funds and accounts. ih) Notwithstanding anything to the contrary herein, moneys in the Water Utility Fund and any account thereof may be used to pay any rebate of excess arbitrage earnings on gross proceeds of the 1993 Bonds, 1994 Bonds and 1997 Bonds to be paid to the United States in order to maintain the exclusion from gross income under Section 103 of the Code (as hereinafter defined) of the interest on the 1993 Bonds, 1994 Bonds and 1997 Bonds. 353732.3 m 9'l-'1\� 1 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 (i) Accounts created £or bonds, notes or obligations with a lien on Net Revenues subordinate to the lien of the 1997 Bonds shall be maintained and operated as required by the resolutions authorizing the same. (j) No portion of the proceeds of the 1997 Bonds sha11 be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the 1997 Bonds were issued, (2) as part of a reasonably required reserve or replacement fund not in exeess of ten percent (10a) of the proceeds of the 1997 Bonds (or in a higher amount which the City establishes is necessary to the satisfaction of the Secretary of the Treasury of the United States), and (3) in addition to the above in an amount not greater than the lesser of five percent (50) of the proceeds of the 1997 Bonds or $100,000. To this effect, any proceeds of the 1997 Bonds and any sums from time to time held in the 1997 Refunding Account, Operation and Maintenance Account, Reserve Account or Revenue Bond Debt Service Account (or any other City or Board account which will be used to pay principal or interest to become due on the bonds payable there£rom) in excess o£ amounts which under the federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods", minor portion or reserve made available under the federal arbitrage regulations. Money in the Water Utility Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the 1997 Bonds to be ��federally guaranteed" within the meaning of Section 149(b) of the federal Tnternal Revenue Code of 1986, as amended ithe "Code"). 18. Paritv Bonds. The 1993 Bonds and 1997 Bonds shall be a first charge and lien upon the Net Revenues of the Water Utility. No part of such Net Revenues shall be pledged to the payment of any general obligation bonds issued by the City while any 1993 Bonds or 1997 Bonds or bonds issued on a parity therewith remain outstanding and undischarged, unless the pledge of Net Revenues to such general obligation bonds is expressly made a second and subsequent lien and the City and Board covenant to make the rates and charges of the Water Utility su�ficient to timely pay such general obligation bonds. No additional revenue obligations payable from the Revenue Bond Debt Service Account 353732.3 39 °1'1-'l �°� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 shall be herea£ter issued unless the same are e�ressly made a second and subsequent lien upon the Net Revenues of the Water Utility; provided, however, that additional obligations may be issued on a parity of lien with the 1997 Bonds, provided that the annual Net Revenues of said Water Utility for each of the two (2) completed £iscal years immediately preceding the issuance of such additional obligations shall have been one and one-half (1.5) times the maximum annual principal and interest coming due thereafter on all outstanding revenue obligations payable from and having a parity of lien upon the Net Revenues of the Water Utility Fund, including the additional obligations so to be issued; provided further, however, that if the annual Net Revenues in either or both of the aforesaid two (2) completed fiscal years shall be insufficient to meet this test then any reasonably projected increase in Net Revenues for the fiscal year immediately following such second completed fiscal year may be added to the Net Revenues for such completed fiscal years or either of them (but the total of such projected increase in Net Revenues may be added only once) in applying the foregoing test. For purposes of the foregoing limitations, when only bonds issued after the 1994 Bonds are outstanding, the "maximum annual principal and interest coming due thereafter" on variable rate bonds shall be calculated assuming the variable rate bonds bear fixed interest at the rates prevailing at the time of the calculation for utility revenue bonds of comparable quality, maturity (or remaining maturity) and taxable or tax-exempt status, provided that other or different assumptions may be used if necessary to obtain an investment grade credit rating for the variable rate bonds or to maintain the credit rating(s) then in effect for the bonds then outstanding. Such facts shall be shown by the Certificate of the General Manager of the Board of Water Commissioners and shall be a finding of and recited in the resolution of the City authorizing any such additional series. In addition, the following conditions shall be met: (a) The payments required to be made (at the time of the issuance of such parity lien bonds? into the various funds and accounts provided for in this resolution have been made. ib) All such parity lien bonds shall have a December 1 maturity or maturities and shall have semiannual interest payments on June 1 and December 1 in each year; provided that interest payments may be more frequent than semiannually or on dates other than June 1 and December 1 if such interest is paid in full only if at the time of payment the interest deposits into the Revenue Bond Debt Service Account for interest payments on June 1 or December 1, as appropriate, on other bonds are current, and any insufficiency of interest on all parity bonds is allocated 353732.3 � °I'1-'l 1 � � 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 proportionately in each six-month period ending 3une 1 or December 1, as appropriate. (c) The proceeds of such parity lien bonds shall be used only for the purpose of (1) making improvements, additions, extensions, renewals or replacements to the Water Utility, and capitalizing interest or establishing Reserves and paying the costs of such financing, or (2} refunding parity lien bonds (provided that bonds which refund parity lien bonds may instead derive their parity lien status from paragraphs 19 or 25 as applied in paragraph 20). 19. Refundina Maturina Bonds. The City also reserves the right and privilege o£ issuing additional revenue bonds if and to the extent needed to refund maturing bonds payable from the moneys in the Water Utility Fund in case the moneys in the Revenue Bond Debt Service Account are insufficient to pay the same at maturity, which refunding revenue bonds may be on a parity with this issue as to interest payments even if such interest is in excess of the interest on the refunded bonds, but shall mature subsequent to all the revenue obligations which are payable from the Net Revenues of the Water Utility Fund and which are sti11 outstanding upon completion of such refunding. 20. Other Revenue Obliaations. Except as authorized in paragraphs 18, 19 and 25 hereof, the City covenants and agrees that it will issue or incur no obligations payable from the Net Revenues o£ all or a part of said Water Utility or constituting in any manner a lien thereon, unless such obligations are expressly made junior and subordinate to the lien and charge of the 1997 Bonds on said Net Revenues. If bonds which refund the 1997 Bonds are parity lien bonds, they shall enjoy complete equality of lien with any portion of the 1997 Bonds not refunded and any other then outstanding bonds payable from the Revenue Bond Debt Service Account, if any there be, and such refunding bonds shall continue to have whatever priority of lien over subsequent issues that the refunded bonds may have had. If only a portion of the outstanding 1997 Bonds shall be refunded such 1997 Bonds shall be refunded in such manner that the interest rate of any refunding bond sha11 be greater than interest rate of the corresponding refunded 1997 Bond (or average net interest rate of the refunding bonds shall be, shall be rea o bl and if the the or s na y estimated to be, higher than the average net interest rate of the refunded 1997 Bonds), or that the maturity date of any refunding bond shall be earlier than the maturity date of the corresponding refunded 1997 Bond (or the average maturity of the refunding bonds shall be earlier than the average maturity of the refunded 1997 Bonds), then such 1997 Bonds may not be refunded without the consent of the holders of the unrefunded portion of the 1997 Bonds and any other bonds then 353T323 41 9�-� �q outstanding payable from the Revenue Bond Debt Service Account unless the Net Revenues coverage test af paragraph 18 is met. 21. Insufficient Amounts. In the event that the moneys in the Revenue Bond Debt Service Account shall be insufficient at any particular time to pay the principal then due and interest then accrued on all bonds payable therefrom, said moneys shall first be applied to the payment pro rata of the accrued interest on all such bonds, payable over a period ending on June 1 or December 1, as appropriate, and any balance shall be applied in payment pro rata of the principal on a11 such bonds, provided further that if it shall ever be determined by a court of competent jurisdiction while any such bonds remain outstanding that the sums available and to become available for the payment of the principal thereof and interest thereon are insufficient whether or not then due, then the moneys in the Revenue Bond Debt Service Account shall be applied in payment of all principal then outstanding whether or not then due and the interest accrued thereon to the date of payment ratably according to the aggregate amount thereof without any preference or priority. 22. Suit b�Bondholders. The Holders of twenty percent (20%) or more in aggregate principal amount of bonds issued under this resolution and at any time outstanding may, either at law or in equity, by suit, action, or other proceedings, protect and enforce the rights of all Holders of the 1997 Bonds then outstanding or enforce or compel the performance of any and all of the covenants and duties specified in this resolution to be performed by the City or Board or their officers and agents, including the fixing and maintaining of rates and charges and the collection and proper segregation of revenues and the application and use thereof. 23. Covenants. For the protection of the Holders of the 1997 Bonds, the City herein covenants and agrees to and with the holders thereof from time to time as follows: (a) It will at all times through its Board adequately maintain and efficiently operate the Water Utility as a City utility. It will from time to time make a11 needful and proper repairs, replacements, additions and betterments to the equipment and facilities of said Water Utility so that they may at all times be operated properly and advantageously, and whenever any equipment of said system shall have been worn out, destroyed or otherwise become insufficient for proper use, it shall be promptly replaced or repaired so that the value and efficiency of the facilities shall be at all times fully maintained and its revenues unencumbered by reason thereof_ 353732.3 4 2 9�1-'1 � °1 (b) The rates for all water service and the charges £or all water supplied by the Water Utility to the City and its residents and to all other consumers shall be reasonable and just, taking into account the cost and value of the Water Utility, the cost of maintaining and operating the Water Utility and the proper and neaessary allowances for depreciation, the amounts required for the payment of principal and interest on the bonds payable £rom the Net Revenues of the Water Utility, and a11 other sums customarily paid from the revenues of the Water Utility. {c) It will as required by Section 10.11.2 of the City Charter (and it will continue to do so whether or not required by said Charter) establish, maintain and collect such charges and rates as will produce revenues sufficient to pay the reasonable cost of operation, repair and maintenance of the Water iJtility and to pay the interest on and principal of the 1997 Bonds and all bonds on a parity of lien with the 1997 Bonds, as and when they become due, as well as to provide sufficient money to make the required appropriations to the various funds and accounts established herein. The City will review the schedule of rates and charges for the Water Utility at least annually when the Board budget is reviewed. (d) It will not sell, lease, mortgage, or in any manner dispose of the Water Utility or any part thereof (including any and all extensions and additions that may be made thereto) until all revenue bonds payable from the Net Revenues of the Water Utility or any part thereof have been paid in full; provided, however, that the City may sell the Water LTtility or any part thereof if simultaneously with or prior to said sale all of the outstanding bonds are discharged in accordance with paragraph 25 of this resolution. This covenant shall not be construed to prevent the sale by the City at fair market value of real estate, equipment or other non-revenue-producing properties which in the judgment of the City have become unnecessary, uneconomical or inexpedient to use in connection with the Water Utility provided that suitable facilities are obtained in place thereof and provided further that nothing herein is intended to prevent the City or Board from terminating or otherwise preventing the termination of contracts for the furnishing of water. (e) It shall cause to be kept proper books, records and accounts adapted to the Water Utility separate from other acaounts to be audited at the end of each fiscal year. A copy of said audit shall be furnished, without cost, to the Purchaser of the 1997 Bonds. If the City fails to provide 353T52.3 4 3 q�t -��� 1 2 3 4 8 9 10 11 12 13 14 15 16 17 18 19 20 zi 2z 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 such audit within a reasonable time after the end of said fiscal year, the holders of twenty percent (200) or more of the outstanding bonds may cause such audit to be made at the expense of the City. The expense of preparing such audit shall be paid as current operating expenses of the Water Utility. The Purchaser of the 1997 Bonds and the Holders thereof, or their duly appointed representatives, from time to time shall have the right, at all reasonable times, to inspect the Water Utility system and to inspect and copy the books, records, accounts and data relating thereto. The City agrees to furnish copies of such audit, without cost, to any Holder or Holders of the 1997 Bonds at their request within a reasonable time after the end of each fiscal year. (f) It will faithfully and punctually perform all duties with reference to the Water Utility required by the City Charter, the Constitution and laws of the State of Minnesota and this resolution. (g) It will grant no franchise to any competing utility. 24. Amendments. alteration shall be made in the 1997 Bonds without the than sixty percent (600) in then outstanding except for and alterations ta) made to or omission, or (b) which w Holders of such outstanding nothing herein contained sh permitting (1) an extension or the interest on any such principal amount of any suc thereon, or (3) a privilege No change, amendment, moditication or the covenants made with Holders of �onsent of the Holders of not less principal amount of such 1997 Bonds changes, amendments, modifications cure any ambiguity or formal defect �uld not materially prejudice the 1997 Bonds; provided, however, that �11 permit or be construed as of the maturiCy of the principal of 1997 Bonds, or (2) a reduction in the z 1997 Bond or the rate of interest or priority of any such 1997 Bond or 1997 Bonds over any otner bona or bonas excepL as oLnerwise provided herein, or (4) a reduction in the aggregate principal amount of such 1997 Bonds required for consent to any change, amendment, modification or alteration, or i5) the creation of any lien ranking prior to or on a parity with the lien of such 1997 Bonds, except as hereinbefore e�pressly permitted, or (6) a modification of any of the provisions of this paragraph without the consent of the Holders of one hundred percent (100%) of the principal amount of such 1997 Bonds outstanding. discharged and other 1997 Bonds sahich are 353732.3 25. Discharae. When all 1997 Bonds have been as provided in this paragraph, all pledges, covenants rights granted by this resolution to the Holders of the shall cease. The City may discharge all 1997 Bonds due on any date by depositing with the paying agent � � � �� � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum sufficient for the payment thereof in full; or if any 1997 Bond should not be paid when due, it may nevertheless be discharged by depositing with the paying agent ibut not if a City officer is the paying agent) or an escrow agent a sum sufficient for the payment thereaf in fu11. The City may also discharge any grepayable 1997 Bonds which are called for redemption on any date when they are prepayable according to their terms, by depositing with the paying agent (but not if a City officer is the paying agent) or an escrow agent on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as provided in this resolution. The City may also at any time discharge the issue of the 1997 Bonds in whole or in part by complying with the applicabla provisions of Minnesota Statutes, Section 475.67, and any amendments thereto, except that the funds deposited in escrow in accordance with said provisions may but need not be in whole or part proceeds of advance refunding bonds. The City may discharge 1997 Bonds as herein provided without the consent of any Bondholders. 26. Fiscal Year As used in this resolution the words "fiscal year" shall mean the twelve (12) month period beginning on January 1 of each year and ending on December 31 of the same year. Should it be deemed advisable at some later date to change the fiscal yearly basis, the same may be done by proper actions to that effect, which change shall not constitute an amendment or modification of this resolution. 27. Abpropriation. It is hereby found, determined and declared that on the date this resolution is adopted, there is more in the Reserve Account than is required upon the discharge of the Refunded Bonds. The difference is hereby appropriated to the 1997 Refunding Account. The Board's additional initial appropriation to the 1997 Refunding Account necessary to accomplish the current refunding of the Refunded Bonds is hereby recognized and approved. 28. Refunded Bonds; Securitv. Until retirement of the Refunded Bonds, all provisions heretofore made for the security thereof shall be observed by the City and all of its officers and agents. 353732.3 G� q �-�> 9 29. RedemQtion of Refunded Bonds. The Refunded Bonds shall be paid upon early redemption prior to October 1, 1997, all in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached hereto as E�ibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemption in substantially such fox sha11 be mailed to the paying agent and sha11 be given by the paying agent to the holders of the Refunded Bonds at least ten (10) days prior to the redemption date in the manner provided for the Refunded Bonds. 30. Records and Certificates The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the £acts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the faats recited therein. 31. Neaative Covenants as to IIse of Proceeds and Imbrovements. The City hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be �'private activity bonds" within the meaning of Sections 1�3 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Bonds that would cause them to be private activity bonds, and the average term of the Bonds is not longer than reasonably necessary for the governmental purpose of Che issue. The City hereby covenants not to use the proceeds of the Bonds in such a manner as to cause the Bonds to be ��hedge bonds" within the meaning of Section 149(g) of the Code. 32. Tax-Exempt Status of the Bonds; Rebate; Elections. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 353732.3 4 6 �� ~��� If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Bonds, the Mayor, Clerk, Treasurer and Director, Office of Financial Services, or any of them, are hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 33. No Desicrnation of Oualified Tax-Exe�t Oblicsations. The Bonds, together with other obligations issued by the City in 1997, exceed in amount those which may be qualified as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and hence are not designated for such purpose. 34. Letter of Rebresentations. The Letter of Representations for the Bonds is hereby confirmed to be the Blanket Issuer Letter of Representations dated April 10, 1996, by the City and received and accepted by The Depository Trust Company. So long as The Depository Trust Company is the Depository or it or its nominee is the Holder of any Global Certificate, the City shall comply with the provisions of the Letter of Representations, as it may be amended or supplemented by the City £rom time to time with the agreement or consent of The Depository Trust Company. 35. Parity Findings. It is hereby found, determined and declared that: (a) The 1997 Bonds are on a parity of lien with the 1993 Bonds, and do not require for their issuance or their parity status the consent of the holders of any of the 1993 Sonds or 1994 Sonds pursuant to the resolutions authorizing the issuance thereof. The Bonds bear interest at a rate under the Maximum Rate on the 1994 Bonds, and the 1997 Bonds are qualified to be on a parity of lien with the 1993 Sonds up to said Maximum Rate. 36. Covenant with Holders. Each and all of the terms and provisions of this resolution shall be and constitute a covenant on the part of the City to and with each and every Holder from time to time of the Bonds. 37. Necrotiated Sale. The City has retained Springsted Incorporated as an independent financial advisor, and this Council has heretofore determined, and does hereby determine, ta sell the Bonds by private negotiation to the Purchaser, all as provided by Minnesota Statutes, Section 475.60, Subdivision 2(9). 353732.3 4 7 q� -��q 38. Continuincx Disclosure. The City is an obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereina£ter described, to: A. Provide or cause to be provided to each nationally recognized municipal securities information repository ('�NRMSIR") and to the appropriate state information depository ("SID"), if any, for the State of Minnesota, in each case as designated by the Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. B. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking. C. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of a failure by the City to provide the annual financial information with respect to the City described in the Undertaking. The City agrees that its covenants pursuant to the Rule set forth in this paragraph 38 and in the Undertaking are intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holflers; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Director, Office of Financial Services, or any other officers of the City authorized to act in their stead (the "Officers"), are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council, subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser, and (iii) acceptable to the Officers. 39. Severabilitv. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability 353732.3 4 8 a1-ril9 1 2 3 4 5 6 7 of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 40. Headincxs. Headings in this resolution are included for convenienoe of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. Requested by Department of: Adoption by Council 3ecretary B \ = �_ � ApprovecS by Mayor. Date � Office of Financial Services B y : m' �_ Form Apprwed by City Attomey By`.� �-" � � G'�3 -- �7 Approved by ayo� for Submis ion to Council By . e Adopted by Council: Date � �..�-<- �� ,`� q`� g 1 q �('� �� S 7 � ! 1 � UEPARTMENTADFFIGHCOUNCIL �ATE MlT1ATFA v � �� v Office of Financial Services 6/3/97 GREEN SHEE GONTACT PERSON & PHONE INRIAL/OATE INRIAL/DATE � DEPARiMENTDIRE � CI7YCAUNCIL Martha Rantorowicz, 266-8836 p5$�GN �CRYATfORNEY �CINCLERK NUMBEfl FOR MUST BE ON fAUNCI� AGENDA BY (�p'TE) pOUTING � B��ET OIRECiO O FIN. & MGT. SERVILES DIA. June 11 a 1997 ORDER � MAVOR (pR A$SISfANT� � TOTAL # OP SIGNATORE PAGES z __ (CLIP ALL LOCATiONS FOR SIGNATURE) ACTION RE�UESTEO: This resolution accepYS the winning proposal and awards the bid for the $7,000,000 Water Revenue Refunding Bonds, Series 1997C. This is a competitive bond sale and the award is going to the bidder £ound to be the lowest cost to the Wa[er Utility. FECAMMENDA710NS: Approve (A) ar Rcyect (R) pERSONAL SERVICE CONTRACTS MUST ANSWER TNE FOLLOWING �UESTIONS: _ PLANNING COMMISSION _ CIVIL SEFVICE COMMISS�ON 1. Has this personttirm ever worketl untler a comract for this tlepartment? _ CIB GOMMITfEE _ YES NO � STAFF Z. Hes this person�rm ever been a ciry employee? — YES NO _ O�.sia�c[cAURT _ 3. Does this personRirm possess a skill not normaliy possessed by any curtent city employee? SUPPpRT$ WNICH COUNCIL OBJECTIVE� YES NO Explain all yes answers on separate sheet antl ettach to green sheet INITIATING PROBIEM, ISSUE, OPPFIRTUNITV (Who, What, When, Where, Why). These bonds axe for the purpose of refunding the $10,000,000 Variable Rate Demand Water Revenue Bonds, Series 1994D. ADVANTACaES IFAPPROVED Conversion to fixed rate debt is beneficial in the current market, and we eliminate the risk of having variable rate debt. DISADVANTAOES IF APPROVED� None DISADVANTAGES IF NOTAPPflOVED' � 7��Q� TOTAL AMOUNT OFTRANSAC710N $ COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO FUNDIfBG SOURCE AC7IVITY NUMBER FINANCIAL INFORFiAT10N: (EXPLAIN) 9�-^�r�9 1 SCFiEDULES AND EXHIBITS 2 3 4 Schedule A - Proposals 5 6 Er,hibit A- Notice of Call for Redemption a'1 • rl�°� EXHIBIT A NOTICE OF CAI,L FOR REDEMPTION $10,000,000 VARIABLE RATE DEMAND WATER REVENUE BONDS, SERIES 1994D CITY OF SAINT PAUI, RAMSEY COUN`I'Y MINNESOTA NOTICE IS HEREBY GIVEN that by order o£ the City Council of the City of Saint Paul, Ramsey County, Minnesota, there have been called for redemption and prepayment on 1997, outstanding bonds of the City designated as Variable Rate Demand Water Revenue Bonds, Series 1994D, dated November 15, 1994, as the date of original issue, having stated maturity dates o£ December 1, 2014, bearing the CUSIP number 793073 CU9, bearing interest at a variable rate, and now outstanding in the total principal amount of $9,600,000. Al1 outstanding bonds of the issue are being called for redemption. The bonds are being called at a price of par plus accrued interest to , 1997, on which date the redemption price will become due and pagrable and all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the principal office of the trustee and paying agent for the Bonds, First Trust National Association, 180 East Fifth Street, 2nd Floor, Saint Paul, Minnesota 55101, on or before , 1997. BY ORDER OF THE CITY COUNCIL /s/ Fred Owusu City Clerk Additional information may be obtained from: SPRINGSTED INCORPORATED 85 East Seventh Place Suite 100 Saint Paul, Minnesota 55101-2143 (612) 223-3000 353764.7 1 2 3 4 5 8 9 10 11 12 13 14 15 16 17 1S 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 �n� WHERRAS, "Holder" as used herein means the perso in whose name a Bond is registered on the registration books,�f t: City maintained by the registrar appointed as provided in' / paragraph 8 (the "Bond Registrar"); and WHEREAS, pursuant to Minnesota Statutes, Secti 475.60, Subdivision 2(9), public sale requirements do n' apply to the Bonds, because the City has retained an indepe ent financial advisor and this Council has determined to ell the Bonds by private negotiation, and the City has inst d authorized a competitive sale without publication of notice t ereo£ as a form of private negotiation; and WHEREAS, Rule 15c2-12 of the Securit' s and Exchange Commission prohibits "participating underwri rs" from purchasing or selling the Bonds unless the City undert es to provide certain continuing disclosure with respect o the Bonds; and WHEREAS, proposals for the Bo s have been solicited by Springsted Incoxporated pursuant to an fficial Statement and Terms of Proposal therein: NOW, THEREFORE, BE IT R City o£ Saint Paul, Minnesota, as 6 � VED by the Council of the lows: The proposal of (the "PUrchaser��} to purchase $7,0 ,000 Water Revenue Refunding Bonds, Series 1997C, of the ty (the "Bonds" or "1997 Bonds", or individually a"Bond" or "1 7 Bond"), in accordance with the Terms of Proposal for the nd sale, at the rates of interest hereinafter set forth, an to pay for the Bonds the sum of $ , plus terest accrued to settlement, is hereby found, determined and clared to be the most favorable proposal received and is hereb accepted, and the Bonds are hereby awarded to the Purchaser. T Director, Office of Financial Services, or his designee, is di- cted to retain the deposit of the Purchaser and to forthwith r urn to the others making proposals their good faith checks or fts. 2. Maturities. Bonds, Serie original is� date as fujl R-1 upwar�� date. shall e Bonds shall be titled "Water Revenue Refunding 1997C", shall be dated July l, 1997, as the date of e and shall be issued forthwith on or after such y registered bonds. The Bonds shall be numbered from Global Certificates shall each be in the o£ the entire principal amount maturing on a single cement Bonds, if issued as provided in paragraph 6, the denomination of $5,00o each or in any integral �9 � 9�1-�tq multiple thereof of a single maturity. The Bonds shall ma]�re on December 1 in the years and amounts as follows: / Year Year 2006 2007 2008 2009 201� 2011 2012 Amount $345,00 425,0 0 595, 00 165 000 2 ,��� 0,000 50,000 3. Pur ose• Refundin Findin s The Bonds (together with other available funds appropriated? hall provide funds for a current refunding of the Refunded Bon (the "Refunding"). The 1994 Bonds were issued to finance impr ements to the Water Utility (the "Improvements"). 2he pr ceeds of the Bonds shall be deposited and used as provided in p agraph 17. The total cost of the Refunding, which shall incl e all costs enumerated in Minnesota Statutes, Section 475.6 , is estimated to be at least equal to the amount of the Bonds It is hereby found, determined and declared that (1) the Refun ng is pursuant to Minnesota Statutes, Section 475.67, and ) the Refunding is necessary or desirable for the issuance of bligations bearing a fixed rate of interest in the case of the 94 Bonds, which bear interest at a rate varying periodically. 4. Interest. he Bonds shall bear interest payable semiannually on June 1 d December 1 of each year (each, an "Interest Payment Date'! , commencing December 1, 1997, calculated on the basis of a 360- ay year of twelve 30-day months, at the respective rates per nnum set £orth opposite the maturity years as follows: 1998 1999 2000 2001 20�2 2003 2004 2005 Amount $730,000 800,000 420,000 225,000 315,00� 660,000 690,000 640,000 Interest Rate Maturitv Year Interest Rate 11 1998 1999 2000 200 20 2 3 04 005 L� 0 2006 2007 2008 2009 2010 2011 2012 ° Description of the Global Certificates and ry System. Upon their original issuance the Bonds in the form of a single Global Certificate for 5 ��-�t� (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum suf£icient for the payment thereof in fu11; or if any 1997 Bond should not be paid when due, it may nevertheless be discharged by deposit' g with the paying agent (but not if a City officer is the payi agent) or an escrow agent a sum sufficient for the payment thereof in full. The City may also discharge any prepaya e 1997 Bonds which are called for redemption on any date when t y are prepayable according to their terms, by depositing wit the palring agent (but not if a City officer is the paying gent) or an escrow agent on or before that date an amount e to the principal, interest and redemption premium, if any which are then due, provided that notice of such redemption as been duly given as provided in this resolution. The City ay also at any time discharge the issue of the 1997 Bonds in ole or in part by complying with the applicable provisions of M' nesota Statutes, Section 475.67, and any amendments thereto, cept that the funds deposited in escrow in accordance with sai rovisions may but need not be in whole or part proceeds of vance refunding bonds. The City may discharge 1997 Bonds as her n provided without the consent of any Bondholders. 26. Fiscal Year. As used ' this resolution the words "fiscal year" shall mean the twelve 12) month period beginning on January 1 of each year and endi on December 31 of the same year. Should it be deemed advisa e at some later date to change the fiscal yearly basis, the sam may be done by proper actions to that effect, which change sh 1 not constitute an amendment or modification of this resolutio . 27. A ro riatio . It is hereby found, determined and declared that on the date is resolution is adopted, there is $ in the eserve Account, of which only $ is re red upon the discharge of the Refunded Bonds. The difference f$ is hereby appropriated to the 1997 Refunding ccount. The Board's additianal initial appropriation to the 997 Refunding Account necessary to accomplish the curr nt refunding of the Refunded Bonds is hereby recognized and ap oved. 28. Refunded Bonc thereof shall agents. f �tunded Bonds; Securitv. Until retirement of the all provisions heretofore made for the security observed by the City and all of its officers and 45 `t�t-��� 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 29. Redemntion of Refunded Bonds. The Refunded Bonds shall be paid upon early redemption on or about , 1997, all in accordance with the terms and conditions set forth in the Notice of Ca11 far Redemption attached hereto as Exhibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemp�ion in substantially such form shall be mailed to the paying agent and shall be given by the paying agent to the holders of he Re£unded Bonds at least ten (10) days prior to the redem�ion date in the manner provided for the Refunded Bonds. �f 30. Records and Certificates. The offi City are hereby authorized and directed to prepare the Purchaser, and to the attorneys approving the� of the furnish to ity of the issuance of the Bonds, certified copies of all oceedings and records of the City relating to the Bonds and � the financial condition and affairs of the City, and such o er affidavits, certificates and information as are require o show the facts relating to the legality and marketability f the Bonds as the same appear £rom the books and records un r their custody and control or as otherwise known to them, all such certified copies, certificates and affidavits, i uding any heretofore furnished, shall be deemed representa ons of the City as to the facts recited therein. 31. Neqative Cove Improvements. The City here of the Bonds or to use the I them to be used, or to ente arrangements for the cost of as to cause the Bonds to be meaning of Sections 103 an City reasonably expects - term of the Bonds that bonds, and the average reasonably necessary The City hereby cove an such a manner as t cau the meaning of Se ion 32. The City sh to establis Section 103 without li investme s than th yi earnin to by c enants not to use the proceeds mpr ements, or to cause or permit r' o any deferred payment e Improvements, in such a manner private activity bonds" within the 141 through 150 of the Code. The no actions will be taken over the cause them to be private activity erm of the Bonds is not longer than r the governmental purpose of the issue. ts not to use the proceeds of the Bonds in se the Bonds to be "hedge bonds" within 149(g) of the Code. 1 comply with requirements necessary under the Code nd maintain the exclusion from gross income under f the Code of the interest on the Bonds, including tation requirements relating to temporary periods for limitations on amounts invested at a yield greater ld on the Bonds, and the rebate of excess investment the United States. m w '_ 85 E. SEVENTH PLACE SUITE 100 SAINC PAUL, MN 55101-2143 612-223-3000 FAX:612-223-3002 q�- ��9 SPRINGSTED Public Finana fldvisors June �1, 1897 Mr. Bemie Bullert, General Manager City of Saint Paul Water Utility 8 East Fourth Street, Suite 400 Saint Paul, MN 551�1-1007 Ms. Martha Kantorowicz, Debt Manager City of Saint Pau{ Treasury Division 160 City Hall 15 West Keltogg Boulevard Saint Paul, MN 55102 f � Re: Recommendations for Award of City of Saint Paul's $7,0�0,000 Water Revenue Refunding 8onds, Series 1997C Dear Mr. Bullert and Ms. Kantorowicz: Purpose of Issue The purpose of this issue is to refund on a long-term fixed interest rate basis the City's $10,000,000 Variable Rate Demand Bond issued in 1994. The Water Utility, through principal repayment and cash contributions, has lowered the principaf on this issue to $7,000,000. Tax-Exempt Interest Rate Market The municipal tax-exempt market has operated within a relatively narrow band since January 1. On January 1, the Bond Buyer's Index (BBI) was at 5.70%. 'The high point was in April at 5.88%; the low point is this week at 5.60%. Sale Resuits The City received 7(seven) bids on this sale. The bids were as fioliows: Rank Bidder Morgan Keegan (Memphis) First of America (Michigan) Piper Jaffray (Twin Cities) A. G. Edwards (St. Louis) Smith Bamey (New York) Dain Bosworth, Inc. (Twin Cities) Prudential Securities (Chicago) TIC % 4.88% 4.89% 4.92°!0 4.94% 4.95% 4.96% 4.98% SAINT PAUL, MN � MI[YNEAPOL[S, MN � BROOKF(EID, W[ � OVERLAND PARK, KS � WASHNGTON, DC � [OWA CtTY, lA City of Saint Paul Water Utility June 11, 1997 Page 2 The {owest bid of 4.88°fo was received by Morgan Keegan (Memphis underwriter). q,�-�19 This issue received significant national interest with underwriters bidding from New York, Chicago, Memphis, St. Louis, and Michigan as well as the Twin Cities. We require bidders to submit their bids on a'True Interest Rate" (TIC) basis, so as to refiect the present vatue ofi their bids and thereby ensure the Utility's award is based on the fowest cost to the Utility. We have enclosed a bid tabulation form for the issue summarizing the bid specifics and composition of each underxriting syndicate. Recommendation We recommend award of this sale to Morgan Keegan. Basis of Award The interest rates received on this issue are well below the planning esiimates used by the Water Utility and compare fiavorably with current market experience. The Utility had, through the first part of the year, used 5.4°!o for planning purposes based on earlier market experience. Generalty, the Utility has over the years hoped to finance this issue at under 5.0°/a. We have compared this issue's interest rates with other basic utilities selling nationally, with such comparisons yielding very favorable results for the Utility. Credit Rating The Utility received credit ratings of Aa2 and Aa from Moody's Investors Service and Standard & Poor's, respectively. Standard & Poor's upgraded the Utility's outlook to positive from stable. These are excel{ent ratings from both agencies. We are again appreciative of the opportunity to be of service to the Utility. We welcome any questions or comments on this report. Respectfuliy, (� � , � � ��^ ��_� �� � ` �;�_ � � ,�.�� David N. MacGilfivsay Principal Di�ector of Project Management /dmf Enctosures � � � � � � N O � \ O \ � C�J 0 � � a � � � -� 0 � 0 � � � c.n O � \ O � \ � � O � \ O C3� \ � J Percent � � � � �� � � � <� CD � CD Q � � � O � � CD � CD � r--r- °�' � � � Q � � N -� � � � X � � � � � � � � o � o � o � o � : v 85 E. SEVENTH PL.iCE, SUITE 100 r SA1NT PAUL, MN 55101-2143 61?-223-3000 FAX:67L223-3002 �� 9,� -'1 �°� SPRINGSTED Public Fv�mue Adviso�s $7,000,000 CITY OF SAINT PAUL, MINNESOTA WATER REVENUE REFUNDING BONDS, SERIES 1997C (BOOK ENTRY ONLY) : ,/ \ ��/�r 7 �� SALE: June11,1997 Moody's Rating: Aa2 Standard 8 Poor's Rating: AA interest Netlnterest Truelnterest Bidder Rates Price Cost Rate MORGAN KEEGAN & CO., INC. HUTCHINSON, SHOCKEY, ERLEY & COMPANY Mesirow Financial Inc. FIRST OF AMERICA SECURITIES MORGAN KEEGAN & CO., INC. HUTCHINSON, SHOCKEY, ERLEY 8� COMPANY AND ASSOCIATE 4.75°!0 1998-2006 4.80% 2007 4.90% 2008 5.00% 2009-2012 4.00% 4.a5°!o 4.25% 4.35% 4.45% 4.55% 4.65% 4.70°!0 4.75% 4.80% 4.90°fo 5.00% 5.10% 5.125% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2�08 2009-2010 2011 2�12 $6,984,775.00 $2,573,935.40 4.8805% $6,941,008.80 $2,576,373.70 4.8910% (Continued) SAIN7' PAOL, MN � MINNEAPOLIS, MN BROOKFIELD, WI � OVERLAND PARK, KS � WASHINGTON, DC � IOWA CITY, IA Y Interest Netlnterest Truelnterest ` B dder Rates Price Cost Rafe PIPER JAFFRAY INC. NORWEST fNVESTMENT SERVICES, INC. ROBERT W. BAIRD & COMPANY, INCORPORATED SECURIT(ES CORPORATION OF iOWA 3.90% 4.15% 4.30% 4.40% 4.50% 4.60% 4.70% 4.75% 4.80% 4.85% 4.90% 5,00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-2012 A.G. EDWARDS & SONS, INCORPORA7ED 4.75% 1998-2006 4.80% 2007-2012 SMiTH BARNEY CRONIN & COMPANY, 1NCORPORATED 4.00% 4.15% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.85% 4.90°/a 5.00% 5.10% 5.15% 5.20% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-2009 2010 2011 2012 DAIN BOSWORTH INCORPORATED PRUDENTIAL SECURITIES, WC. ABN AMRO CHICAGO CORPORATION DEAN WiTTER REYNOLDS INCORPORATED PAINEWEBBERINCORPORATED OPPENHEIMER & CO., INC. 4.75% 1998-2005 4.80% 2006 4.90% 2007 5.00% 2008-2012 3.75% 4.10% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.85% 4.90% 5.00% 5.10% 5.20% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-20�9 2010 2091-2012 $6,932,123.35 $6,930,000.00 $6,945,356.80 $6,962,715.35 $6,932,726.80 $2,586,921.86 $2,589,05479 $2,610,708.41 $2,608,83923 $2,622,669.66 4.9196% 4.9438% 4.9535% 4.9575% 4.9$09% (Continued) REOFFERING SCHEDULE OF THE PURCHASER Rate Year Yield 4.75% 4.75% 4.75°l0 4.75% 4.75% 4.75% 4.75% 4.75°!0 4.75% 4.80% 4.90°l0 5.00% 5.00% 5.00% 5.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3.75% 4.10% 4.30°l0 4.40°!0 4.50% 4.60% 4.70% 4.75% 4.80% 4.85% 4.95% 5.45% $.15% 520% 5.25% �,� -��� BBI: 5.60% Average Maturity: 7.53 Years �� -1 �� CITX OF SAINT PAUL Norm Colemurs, Mayor June 11, 1997 Council President Thune Members of the City Council 15 West Kellogg Blvd, 3rd Floor Saint Paul, Minnesota 55102 OFFICE OF THb MAYOR OFFICE OF FINANCIAL SERV[CES laseph ReiG. Director Shiriey A. Davi.s, Treasurer IRFASURYSEC!!ON IS West Kelingg Blvd. Telephone: 612-266-8830 Raom 760 Ciry HaII Facsimi[e: 6I2-266-88-f0 SaintPaut, Minnesota SS102 Dear Council President Thune and Members of the City Council: Please find attached four subsiitution pages for resolution 97-719 accepting the winning proposal and awarding the bid for the $7,000,000 Water Revenue Refunding Bonds, Series 1997C, which is before you this afternoon. Bernie Bullert and I will be prepared to make a brief presentation on the impact of these changes. The changes simply reflect the pricing which took place this morning. If you have any questions concerning these changes, do not hesitate to call me at 266-8836. Sincerely, � � Martha Kantorowicz ��-��q 1 WHEREAS, "Aolder" as used herein means the person in 2 whose name a Bond is registered on the regis�ration books of the 3 City maintained by the registrar appointed as provided in a paragraph 8(the "Bond Registrar"); and 5 6 7 9 10 li 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 WHEREAS, pursuant to Minnesota Statutes, Section a75.60, Subdivision 2(9), public sale requirements do not apply to the Bonds, because the City has retained an independent financial advisor and this Council has determined to sell the Bonds by private negotiation, and the City has instead au�horized a competitive sale without publication of notice thereof as a form of private negotiation; and TdHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to provide certain continuing disclosure with respect to the Bonds; and WHEREAS, proposals for the Bonds have been solicited by Springsted Incoxporated pursuant to an Official Statement and Terms of Proposal therein: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows: 6 1. Acceptance of Proposal. The proposal of Morgan, Keegan & Company, Inc. (the "Purchaser"), to purchase $7,000,000 Water Revenue Refunding Bonds, Series 1997C, of the City (the �'BOnds" or "1997 Bonds", or individually a"Bond" or "1997 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 o£ $6,984,775.00, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser. The Director, Office of Financial Services, or his designee, is directed to retain the deposit of the Purchaser and to forthwith return to the others making proposals their good faith checks or drafts. 2. Title• Oriciinal Issue Date• Denominations; Maturities. The Bonds shall be titled "Water Revenue Refunding Bonds, Series 1997C��, shall be dated July 1, 1997, as the date of original issue and shall be issued forthwith on or a£ter 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, sha11 be in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on 353732.3 4 �c � —� t1 multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: Year 1998 1999 2000 2001 2�02 2003 2004 2005 Amount $730,000 800,000 420,000 225,000 315,OOD 660,000 690,OOD 640,000 Year 2006 2007 2008 2009 2010 2011 2012 Amount $3?5,000 425,000 595,000 165,000 240,000 400,000 350,000 3. Purpose• RefundinQ Findincrs. The Bonds (together with other available funds appropriated) shall provide funds for a current retunding of the Refunded Bonds (the "Refunding"). The 1994 Bonds were issued to finance improvements to the Water i3tility (the "Improvements"). The proceeds of the Bonds shall be deposited and used as provided in paragraph 17. The total cost of the Refunding, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. It is hereby found, determined and declared that (1) the Refunding is pursuant to Minnesota Statutes, Section 475.67, and (2) the Refunding is necessary or desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds, which bear interest aC a rate varying periodically. 4. Interest. The Bonds shall bear interest payable semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturitv Year Interest Rate Maturity Year Interest Rate 1998 1999 2000 2001 2002 2003 2004 2005 4 4 4 4 4 4 4 4 750 75 75 75 75 75 75 75 2006 2007 2008 2009 2010 2011 2012 4 4 4 5 5 5 5 750 80 90 00 00 00 00 5. Descrit�tion ot the CU1o1�a1 c:erLi=ica�es ac�u Global Book-Entrv Svstem. Upon their original issuance the Bonds will be issued in the form of a single Global CerCificate for 353T32.3 5 ��-�19 1 2 3 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3Q 31 32 33 34 35 36 37 38 39 40 41 42 43 (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum suf£icient for the payment thereof in £ull; or i£ any 1997 Bond should not be paid when due, it may nevertheless be discharged by depositing with the paying agent (but not i£ a City officer is the paying agent) or an escrow agent a sum sufficient £or the payment thereof in full. The City may also discharge any prepayable 1997 Bonds which are called for redemption on any date when they are prepayable according to their terms, by depositing with the paying agent (but not if a City officer is the paying agent) or an escrow agent on or before that date an amount equal to the principal, interest and redemption premium, i£ any, which are then due, provided that notice of such redemption has been duly given as provided in resolution. The City may also aC any time discharge the issue of the 1997 Bonds in whole or in part by complying with the applicable provisions of Minnesota Statutes, Section 475.67, and any amendments thereto, except that the funds deposited in escrow in accordance with said provisions may buC need not be in whole or part proceeds of advance refunding bonds. The City may discharge 1997 Bonds as herein provided without the consent of any Bondholders. 26. Fiscal Year. As used in this resolution the words '�fiscal year" shall mean the twelve (12) month period beginning on January 1 of each year and ending on December 31 of the same year. Should it be deemed advisable at some later date to change the fiscal yearly basis, the same may be done by proper actions to that effect, which change shall not constitute an amendment or modification o£ this resolution. 27. Appropriation. It is hereby found, determined and declared that on the date this resolution is adopted, there is more in the Reserve Account than is required upon the discharge of the Refunded Bonds. The difference is hereby appropriated to the 1997 Refunding Account_ The Board's additional initial appropriation to the 1997 Refunding Account necessary to accomplish the current refunding of the Refunded Bonds is hereby recognized and approved. 28. Refunded Bonds; Securitv. Unti1 retirement of the Refunded Bonds, a11 provisions hereCo£ore made for the security thereof shall be observed by the City and all of its officers and agents. 353732.3 45 ��-��� 29. Redemotion of Refunded Bonds. The Refunded Bonds sha11 be paid upon early redemption prior to October 1, 1997, all in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached hereto as Exhibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemption in substantially such form shall be mailed to the paying agent and shall be given by the paying agent to the holders of the Refunded Bonds at least ten (10) days prior to the redemption date in the manner provided for the Refunded Bonds. 30. Records and Certificates. The of£icers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and af£airs of the City, and such other a£fidavits, certificates and information as are required to show the facts relating to the legality and markeCability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, ancl all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 31. Neaative Covenants as to Use of Proceeds and Improvements. The City hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or permit them to be used, or to enter inCo any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within tihe meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Bonds that would cause them to be private activity bonds, and the average term of the Bonds is not longer than reasonably necessary for the governmenCal purpose of the issue. The City hereby covenants not to use the proceeds of the Bonds in such a manner as to cause the Bonds to be "hedge bonds" within the meaning of Section 149(g) of the Code. 32. Tax-Exemnt Status of the Bonds• Rebate; Elections_. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation requirements relating to temporary periods £or investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 353732.3 4 6 oR����!��_ a Preserrted By Referred To Council File # 1� � 1 l l � Mc ���" � GreenSheet# J��7�� �, �., �� RESOLUTION �F SAINT PAUL, MINNESOTA ��� Z/r///d Committee: Dffie 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 G�. 23 ACCEPTING PROPOSAL ON SALE OF $7,000,000 WATER REVENUE REFUNDING HONDS, SERIES 1997C, AND PROVIDING FOR THEIR ISSUANCE WHEREAS, the Director, Office of Financial Services, has presented proposals received for the sale of $7,000,000 Wate Revenue Refunding Bonds, Series 1997C (the "Bonds" or "1997 Bonds"), of the City of Saint Paul, Minnesota (the "City"); and WHEREAS, the proposals set forth on Schedule A attached hereto were received pursuant to the Terms of Proposal at the offices of Springsted Incorporated at 10:30 A.M., Central Time, this same day; and WHEREAS, the Director, Office of Finan,cial Serv�ces, has advised this Council that the proposal of /�prqan K@�AU.fI �„ ���� _� �, was found to be the most ° advantageous and"� has recommended that said proposal be accepted; and 3537323 ��'� �� WHEREAS, there are currently outstanding bonds of the City payable from Net Revenues of the City�s Water Utility, specifically the City's (a) $11,175,000 Water Revenue Bonds, Series 1993E (the "1993 Bonds"), issued pursuant to a resolution adopted by this Council on June 15, 1993, of which $7,790,000 remain outstanding, and (b) $10,000,000 Variable Rate Demand Water Revenue Bonds, Series 1994D (the "1994 Bonds"), issued pursuant to a resolution adopted by this Council on November 9, 1994, of which $9,600,000 remain outstanding; and WHEREAS, it is necessary and desirable to provide for the issuance of the Bonds on a parity of lien with the 1993 Bonds, to refund, in a current re£unding in advance of their stated maturities, all outstanding 1994 Bonds (also the "Refunded Bonds"); and WHEREAS, the Refunded Bonds are optionally redeemable at any time at a price of par plus accrued interest; and WHEREAS, refunding the Refunded Bonds (the "Refunding") is consistent with covenants made with the holders thereof, and is necessary and desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds which bear interest at a rate varying periodically, in order to avoid the uncertainty of variable rate debt service; and WHEREAS, the proceeds of the Refunded Bonds financed various improvements to the City's municipal water utility (the "Water Utility"), which has since its acquisition in 1885 been under the jurisdiction of the Board of Water Commissioners (the "Board"); and WHEREAS, the Board and this Council deem it necessary and expedient to undertake the Refunding; and WHEREAS, herein the City makes various findings demonstrating the propriety of the issuance of the Bonds on a parity with the 1993 Bonds; and WHEREAS, in accordance with advice received from the Board, this Council finds, determines and declares that it is necessary and expedient to provide moneys to finance the Refunding, continue a Reserve previously established, and provide for the costs of the issuance of the Bonds from the proceeds of bonds payable solely from the Net Revenues of the Water Util.ity; and WHEREAS, the City has heretofore issued registered obliqations in certificated form, and incurs substantial costs associated with their printing and issuance, and substantial 353732.3 2 9�-��°� F� 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 5� continuing.transaction costs selating.to their payment, transfer . and exchange; and WHEREAS, the City has determined that significant savings in transaction costs will result from issuing bonds in "global book-entry form", by which bonds are issued in certificated form in large denominations, registered on the books of the City in the name of a depository or its nominee, and held in safekeeping and immobilized by such depository, and such depository as part of the computerized national securities clearance and settlement system (the "National System") registers transfers of ownership interests in the bonds by making computerized book entries on its own books and distributes payments on the bonds to its Participants shown on its books as the owners 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 WHEREAS, "Participants" means those financial institutions for whom the Depository effects book-entry transfers and pledges of securities deposited and immobilized with the Depository; and WFIEREAS, The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, or any of its successors or successors to its functions hereunder (the "Depository"), will act as such depository with respect to the Bonds except as set forth below, and the City has heretofore delivered a letter of representations (the "Letter of Representations") setting forth various matters relating to the Depository and its role with respect to the Bonds; and WHEREAS, the City will deliver the Bonds in the form of one certificate per maturity, each representing the entire principal amount of the Bonds due on a particular maturity (each a"Global Certificate"), which single certificate per maturity may be transferred on the City's bond register as required by the Uniform Commercial Code, but not exchanged smaller denominations unless the City determines to issue Replacement Bonds as provided below; and date for WHEREAS, the City will be able to replace the Depository or under certain circumstances to abandon the "global book-entry form" by permitting the Global Certificates to be exchanged for smaller denominations typical of ordinary bonds registered on the City's bond register; and "Replacement Bonds'� means the certificates representing the Bonds so authenticated and delivered by the Bond Registrar pursuant to paragraphs 6 and 12 hereaf; and 353732.3 �J 7-719 1 WHEREAS, "Holder" as used herein means the person in 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 whose name a Bond is registered on the registration books of the City maintained by the registrar appointed as provided in paragraph 8 (the "Bond Registrar"); and WHEREAS, pursuant to Minnesota Statutes, Section 475.60, Subdivision 2(9), public sale requirements do not apply to the Bonds, because the City has retained an independent financial advisor and this Council has determined to sell the Bonds by private negotiation, and the City has instead authorized a competitive sale without publication of notice thereo£ as a form of private negotiation; and WHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to provide certain continuing disclosure with respect to the Bonds; and WHEREAS, proposals for Springsted Incorporated pursuant Terms of Proposal therein: the Bonds have been solicited by to an Official Statement and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows: 6 1. Acceptance of Proposal. The proposal of Morgan, Keegan & Company, Inc. (the "PUrchaser"), to purchase $7,000,000 Water Revenue Refunding Bonds, Series 1997C, of the City (the "BOnds" or "1997 Bonds'�, or individually a"Bond" or "1997 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 $6,984,775.00, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser. The Director, Office of Rinancial Services, or his designee, is directed to retain the deposit of the Purchaser and to forthwith return to the others making proposals their good faith checks or drafts. 2. Title; Oriciinal Issue Date: Denominations; Maturities. The Bonds shall be titled "Water Revenue Refunding Sonds, Series 1997C", shall be dated July 1, 1997, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward. Global Certificates sha11 each be in the denomination of the entire principal amount maturing on a single date. Replacement Bonds, if issued as provided in paragraph 6, shall be in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on 3537323 0 � �, �i � multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: Year 1998 1999 2000 2001 2002 2043 2004 2005 Amount $730,000 800,000 420,000 225,000 315,000 660,000 690,000 640,000 Year 2006 2007 2008 2009 2010 2011 2012 Amount $345,000 425,000 595,000 165,000 240,000 400,000 350,000 3. Purpose; Refunding Findincts. The Bonds (together with other available funds appropriated) shall provide funds for a current refunding of the Refunded Bonds (the "Refunding"). The 1994 Bonds were issued to finance improvements to the Water Utility (the "Improvements"). The proceeds of the Bonds shall be deposited and used as provided in paragraph 17. The total cost of the Refunding, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. It is hereby found, determined and declared that (1) the Refunding is pursuant to Minnesota Statutes, Section 475.67, and (2) the Refunding is necessary or desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds, which bear interest at a rate varying periodically. 4. Interest. The Bonds shall bear interest payable semiannually on 3une 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturitv Year Interest Rate Maturitv Year Interest Rate 1998 1999 2000 2001 2002 2003 2004 20�5 4.75� 4.75 4.75 4.75 4.75 4.75 4.75 4.75 2006 2007 2008 2009 201� 2011 2012 4 4 4 5 5 5 5 75% 80 90 00 OQ 00 00 5. DescriAtion of the Global Certificates and Global Book-Entrv Svstem. Upon their original issuance the Bonds will be issued in the form of a single Global Certificate for 353732.3 5 �t�1-r1�°� 4 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 each maturity, deposited with the Depositosy by the Purchaser and immobilized as provided in paragraph 6. No beneficial owners of interests in the Bonds will receive certificates representing their respective interests in the Bonds except as provided in paragraph 6. Except as so provided, during the term of the Bonds, beneficial ownership (and subsequent transfers of beneficial ownership} of interests in the Global Certificates will be reflected by book entries made on the records of the Depository and its Participants and other banks, brokers, and dealers participating in the National System. The Depository's book entries of beneficial ownership interests are authorized to be in increments of $5,000 of principal of the Bonds, but not smaller increments, despite the larger authorized denominations of the Global Certificates. Payment of principal of, premium, if any, and interest on the Global Certificates will be made to the Bond Registrar as paying agent, and in turn by the Bond Registrar to the Depository or its nominee as registered owner of the Global Certificates, and the Depository according to the laws and rules governing it will receive and forward payments on behalf of the bene£icial owners of the Global Certificates. Payment of principal of, premium, if any, and interest on a Global Certificate may in the City's discretion be made by such other method of transferring funds as may be requested by the Holder of a Global Certificate. C=� Pursuant to the request of the Purchaser to the Depository, which request is required by the Terms of Proposal, immediately upon the original delivery of the Bonds the Purchaser will deposit the Global Certificates representing all of the Bonds with the Depository. The Global Certificates shall be in typewritten form or otherwise as acceptable to the Depository, shall be registered in the name of the Depository or its nominee and shall be held immobilized from circulation at the offices of the Depository on behalf of the Purchaser and subsequent bondowners. The Depository or its nominee will be the sole holder of record of the Global Certificates and no investor or other party purchasing, selling or otherwise transferring ownership of interests in any Bond is to receive, hold or deliver any bond certificates so long as the Depository holds the Global Certificates immobilized from circulation, except as provided below in this paragraph and in paragraph 12. Certificates evidencing the Bonds may not after their original delivery be transferred or exchanged except: (i) Upon registration of transfer of ownership of a Global Certificate, as provided in paragraph 12, 3537323 9"1-'1�� FI 5 6 7 8 9 l0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 (ii) To any successor of the Depository (or its nominee) or any substitute depository (a "substitute depository") designated pursuant to clause (iii) of this subparagraph, provided that any successor of the Depository or any substitute depository must be both a"clearing corporation" as defined in the Minnesota Uniform Commercial Code at Minnesota Statutes, Section 336.8-102, and a qualified and registered "clearing agency" as provided in Section 17A of the Securities Exchange Act o£ 1934, as amended, (iii) To a substitute depository designated by and acceptable to the City upon (a) the determination by the Depository that the Bonds shall no longer be eligible for its depository services or (b) a determination by the City that the Depository is no longer able to carry out its functions, provided that any substitute depository must be qualified to act as such, as provided in clause (ii) of this subparagraph, or (iv) To those persons to whom transfer is requested in written transfer instructions in the event that: (a) the Depository shall resign or discontinue its services for the Bonds and the City is unable to locate a ssbstitute depository within two (2) months following the resignation or determination of non-eligibility, or (b) upon a determination by the City in its sole discretion (1) that the continuation of the book-entry system described herein, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds, in either of which events the City shall notify Holders of its determination and of the availability of certificates (the "Replacement Bonds") to Holders requesting the same and the registration, transfer and exchange of such Bonds will be conducted as provided in paragraphs 9B and 12 hereof. In the event of a succession of the Depository as may be authorized by this paragraph, the Bond Registrar upon presentation of Global Certificates shall register their transfer to the substitute or successor depository, and the substitute or successor depository shall be treated as the Depository for all 3537323 7 9�-'1�9 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 puxposes and functions under this Representations shall not apply to depository unless the City and the depository so agree, and a simila 7. Redemption. resolution. The Letter of a substitute or successor substitute or successor r agreement may be entered into_ (a) Optional Redemption; Due Date. All Bonds maturing after December 1, 2005, shall be subject to redemption and prepayment at the option of the City on such date and on any day thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of Che Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City sha11 determine; and if only part of the Bonds having a common maturity date are called for prepayment, the Global Certificates may be prepaid in $5,000 increments of principal and, if applicable, the specific Replacement Bonds to be prepaid shall be chosen by lot by the Bond RegisCrar. 8onds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. (b) Notation on Global Certificate. Upon a reduction in the aggregate principal amount of a Global Certificate, the Holder may make a notation of such redemption on the panel provided on the Global Certificate stating the amount so redeemed, or may return the Global Certificate to the Bond Registrar in exchange for a new Global Certificate authenticated by the Bond Registrar, in proper principal amount. Such notation, if made by the Holder, shall be for reference only, and may not be relied upon by any other person as being in any way determinative of the principal amount of such Global Certificate outstanding, unless the Bond Registrar has signed the appropriate column of the panel. (c) Selection of Replacement Bonds. To effect a partial redemption of Replacement Bonds having a common maturity date, the Bond Registrar prior to giving notice of redemption shall assign to each Replacement Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Replacement Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Replacement Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Replacement Bonds to be redeemed. The Replacement Bonds to be redeemed shall be the Replacement Bonds to which were assigned numbers 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 353732.3 9'1-� tq 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 redeemed as shall equal $5,000 £or each number assigned to it and so selected. (d) Partial Redemption of Replacement Bonds. If a Replacement Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City and Bond Registrar duly executed by the 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 deliver 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 Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion o£ the principal of the Bond so surrendered. (e) Recruest for Redemption. The Bond Registrar shall call Bonds for redemption and payment as herein provided upon receipt by the Bond Registrar at least forty-five (45) days prior to the redemption date of a request of the City, in written form if the Bond Registrar is other than a City officer. Such request shall specify the principal amount of Bonds to be called for redemption and the redemption date. (f) Notice. Mailed notice of redempti the gaying agent (if other than a City office affected Holder. If and when the City shall Bonds for redemption and payment prior to the thereof, the Bond Registrar shall give writte of the City of its intention to redeem and pay suc office of the Bond Registrar. Notice of redempti given by first class mail, postage prepaid, maile thirty (30) days prior to the redemption date, to Bonds to be redeemed, at the address appearing in Register. All notices of redemption shall state: (i) (ii) The redemption date; The redemption price; be given o each of the maturity in the h Bonds at on shall be d not less t each Holder the Bond to name the han of (iii) If less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (iv) That on the redemption date, the redemption price will become due and payable upon each such Bond, and that 353732.3 0 on shall r) and t call any stated n notice 9 ' 1 •' � interest thereon shall cease to accrue from and after said date; and 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 (v) The place where such Bonds are to be surrendered for payment of the redemption price (which shall be the office of the Bond Registrar). (g) Notice to Depositorv. Notices to The Depository Trust Company or its nominee shall contain the CUSIP numbers of the Bonds. If there are any Holders of the Bonds other than the Depository or its nominee, the Bond Registrar shall use its best efforts to deliver any such notice to the Depository on the business day next preceding the date of mailing of such notice to all other Holders. 8. Bond Reqistrar. First Trust National Association in Saint Paul, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. A successor Bond Registrar shall be an officer of the City or a bank or trust company eligible for designation as bond registrar pursuant to Minnesota Statutes, Chapter 475, and may be appointed pursuant to any contract the City and such successor Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the Holders (or record holders) of the Bonds in the manner set forth in the forms of Bond and paragraph 14 of this resolution. 9. Forms of Bond. The Bonds sha11 be in the form of Global Certificates unless and until Replacement Bonds are made available as provided in paragraph 6. Each form o£ bond may contain such additional or different terms and provisions as to the form of payment, record date, notices and other matters as are consistent with the Letter of Representations and approved by the City Attorney. A. G1oba1 Certificates. The Global Certificates, together with the Certificate of Registration, the Register of Partial Payments, the form of Assignment and the registration information thereon, shall be in substantially the £ollowing form and may be typewritten rather than printed: 353732.3 FS�] �1-1�q r� R- INTEREST RATE REGISTERED OWNER: PRINCIPAL AMOUNT: UNITED STATES OF AMERICA STATE OF MINNESOTA RAMSEY COUNTY CITY OF SAINT PAUL WATER REVENUE REFUI3DIATG BOND, SERIES 1997C 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP December 1, iiZiSilFe\:b: KNOW ALL PERSONS BY THESE PRESENTS that the City of Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above or on the certificate of registration below, or registered assigns, solely from the source and in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for earlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, at the rate per annum specified above (calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable in same-day funds by 2:30 p.m., Eastern time, upon presentation and surrender hereof at the principal office of in , Minnesota (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer; provided, however, that upon a partial redemption of this Bond which results in the stated amount hereof being reduced, the Holder may in its discretion be paid without presentation of this Bond, which payment shall be received no later than 2:30 p.m., Eastern time, and may make a notation on the panel provided herein of such redemption, stating the amount so redeemed, or may return the Bond to the Bond Registrar in exchange for a new Bond in the proper principal amount. Such notation, i£ 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 July 1, 1997 353732.3 1 1 q'1-r11� 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 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 2:30 p.m., Eastern time, to the person in whose name this Bond is registered (the "Holder" or "BOndholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Interest payments shall be received by the Iiolder no later than 2:30 p.m., Eastern time; and principal and premium payments shall be received by the Holder no later than 2:30 p.m., Eastern time, if the Bond is surrendered for payment enough in advance to permit payment to be made by such time. Any interest not so timely paid shall cease to be payable to the person who is the Aolder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the olose of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for paymenC of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. Date of Pavment Not Business Dav. If the date for payment of the principal of, premium, if any, or interest on this Bond sha11 be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. Redemption. All Bonds of this issue (the "Bonds") maturing after December 1, 2005, are subject to redemption and prepayment at the option of the Issuer on such date and on any day therea£ter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City shall determine; and if only part of the Bonds having a common maturity date are called for prepayment, this Bond may be prepaid in $5,000 increments of principal. Bonds or portions thereof called for redemption shall be due and payable on the redemption clate, and interest thereon shall cease to accrue from and after the redemption date. 353732.3 �-2 97•��� 2 3 4 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Notice of Redemption. Mailed notice of redemption shall be given to the paying agent (if other than a City offiaer) and to each affected Holder of the Sonds. In the event any of the Bonds are called for redemption, written notice thereof will be given by first class mail mailed not less than thirty (30) days prior to the redemption date to each Aolder of Bonds to be redeemed. In connection with any such notice, the "CUSIP" numbers assigned to the Bonds shall be used. fteplacement or Notation of Bonds after Partial Redemption. Upon a partial redemption of this Bond which results in the stated amount hereof being reduced, the Holder may in its discretion make a notation on the panel provided herein of such redemption, stating the amount so redeemed. Such notation, if made by the Holder, shall be for reference only, and may not be relied upon by any other person as being in any way determinative of the principal amount of the Bond outstanding, unless the Bond Registrar has signed the appropriate column of the panel. Otherwise, the Holder may surrender this Bond to the Bond Registrar (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or his, her or its attorney duly authorized in writing) and the Issuer shal� execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond of the same series having the same stated maturity and interest rate and of the authorized denomination in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance: Purpose; Special Obligation. This Bond is one of an issue in the total principal amount of $7,000,000, 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 Constitution and laws of the State of Minnesota and Che Charter of the Issuer, and pursuant to a resoluCion adopted by the City Council of the Issuer on June 11, 1997 (the "Resolu- tion"), for the gurpose of providing, together with certain other moneys of the Issuer, funds sufficient for a current refunding of the Issuer's outstandinq Variable Rate Demand Water Revenue Bonds, Series 1994D. The Bonds and the interest thereon are payable solely and exclusively from the Net Revenues of the Water utility of the Issuer pledged to the payment thereof, and do not constitute a debt of the Issuer or of the Saint Paul Board of Water Commissioners within the meaning of any constitutional, Charter or statutory limitation of indebtedness. In the event of any default hereunder, the Holder of this Bond may exercise any of the rights and privileges granted by the laws of the State of 353732.3 13 9�-'1�°� 1 Minnesota, subject to-the provisions of the Resolution. The 2 Bonds of this issue, together with the Water Revenue Bonds, 3 Series 1993E, issued in the principal amount of $11,175,000, are 4 a first and prior lien upon the Net Revenues of the Water Utility 5 of the Issuer, except that the Issuer is authorized under certain 6 conditions to issue additional revenue obligations on a parity of 7 lien with these Bonds, all as provided in the Resolution. 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2$ 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Action by Holders. The Holders of twenty percent (20°s) 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 o£ any and all of the covenants and duties specified in the Resolution to be performed by the Issuer or the Board of Water Commissioners or their officers and agents; provided, however, that nothing shall affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of and interest on each of the Bonds issued to the respective Holders thereof at the time and place, from the source and in the manner provided in the Bonds. Denominations; Exchanae; 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. G1oba1 Certi£icates 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 registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Replacement Bonds. Replacement Bonds may be issued by the Issuer in the event that: (a) the Depository shall resign or its services for the Bonds, and only if unable to locate a substitute depository 353732.3 14 discontinue the Issuer is within two (2) 9'l -'1 �°� months following the resignation-or determination of non-eligibility, or ib) upon a determination by the Issuer in its sole discretion (1) that the continuation of the book-entry system described in the Resolution, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds. Transfer. This Bond shall be registered in the name of the payee on the books of the Issuer by presenting this Bond for registration to the Bond Registrar, who will endorse his, her or its name and note the date of registration opposite the name of the payee in the certificate of registration attached hereto. Thereafter this Bond may be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representatives, and the Issuer and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until this Bond is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar. Transfer of this Bond may, at the direction and expense of the Issuer, be subject to certain other restrictions if required to qualify this Bond as being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended. Fees uoon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reqistered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. 353732.3 1 5 ��-'1 �q 1 Authentication This Bond shall not be valid or become 2 obligatory for any puxpose or be entitled to any security unless 3 the Certificate of Authentication hereon shall have been executed 4 by the Bond Registrar. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2S 29 30 31 32 33 34 Not Oualified Tax-Exempt Obligations. The Bonds have not been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. The Bonds do not qualify for such designation. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Charter of the Issuer to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or Charter limitation of indebtedness; and that the Issuer will establish rates and charges for the water service furnished by its Water Utility sufficient in amount to promptly meet the principal and interest requirements of this issue. IN WITNESS WHEREOF, the City of Saint Pau1, Ramsey County, Minnesota, by its City Council has caused this Bond to be sealed with its official seal and to be executed on its behal£ by the photocopied facsimile signature of its Mayor, attested by the photocopied facsimile signature of its Clerk, and countersigned by the photocopied facsimile signature of its Director, Office of Financial Services. 353732.3 � ��-1�� Date of Registration: BOND REGISTRAZ2'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Registrable by: Payable at: CITY OF SAINT PAUL, RAMSEY COiTNTY, MINNESOTA Mayor Attest: Bond Registrar � By Authorized Signature (SEAL) City Clerk Countersigned: Director, Office of Financial Services Water Revenue Refunding Bond, Series 1997C, No. R- 353T52.3 17 `i'1-'1�°� CERTIFICATE 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 SIGNATURE OF REGISTRATION REGISTERED OWNER BOND REGISTRAR 353732.3 1g °��-� �°� REGISTER OF FARTIAL PAYMENTS The principal amount of the attached Bond has been prepaid on the dates and in the amounts noted below: Signature of Signature of Date Amount Bondholder Bond Reaistrar If a notation is made on this register, such notation has the effect stated in the attached Sond. Partial payments do not require the presentation of the attached Bond to the Bond Registrar, and a Holder could fail to note the partial payment here. 353732.3 7-9 `t`1-1�q 1 2 3 4 5 6 7 8 9 io 11 12 13 14 15 16 17 18 19 20 21 22 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, sha11 be construed as though they were written out in full according to applicable laws or regulations: TEN COM TEN ENT JT TEN - �iyYui_� 353732.3 - as tenants in oommon - as tenants by the entireties as joint tenants with right of survivorship and not as tenants in common as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 20 �� �1�� ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the attached Bond and does hereby irrevocably constitute and appoint attomey to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the attached Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other ��Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 3537323 21 9� -'1 �� 1 B. Replacement Bonds. If the City has notified 2 Holders that Replacement Bonds have been made available as 3 provided in paragraph 6, then for every Bond thereafter 4 transferred or exchanged (including an exchange to reflect the 5 partial prepayment of a Global Certificate not previously 6 exchanged for Replacement Bonds) the Bond Registrar shall deliver 7 a certificate in the form of the Replacement Bond rather than the 8 Global Certificate, but the Holder of a Global Certificate shall 9 not otherwise be required to exchange the Global Certificate for 10 one or more Replacement Bonds since the City recognizes that some li beneficial owners may prefer the convenience of the Depository's 12 registered ownership of the Bonds even though the entire issue is 13 no longer required to be in global book-entry form. The 14 Replacement Bonds, together with the Bond Registrar's Certi£icate 15 of Authentication, the form of Assignment and the registration 16 information thereon, shall be in substantially the following 17 form: 18 3537323 22 q�-��� 1 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 UNITED STATES OF AMERICA STATE OF MINNESOTA RAMSEY COUNTY CITY OF SAINT PAUL � WATER REVENUE REF`UNDING BOND, SERIES 1997C INTEREST RATE MATURITY DATE OF DATE ORIGINAL ISSUE CUSIP July 1, 1997 REGISTERED OWNER: PRTNCIPAI, AMOiTNT: DOLLARS IZNOW ALL PERSONS BY THESE PRESENTS that the City o£ Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, solely from the source and in the manner hereinafter set forth, the principal amount speci£ied above, on the maturity date specified above, unless called for earlier redemption, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, 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 Tnterest Payment Date to which interest has been paid or, if no interesC has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in , (the "Bond Registrar��), acting as paying agent or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder'�) on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date��) fixed by the Bond 353732.3 2 3 °1�1-11°1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Registrar whenever money becomes available for payment o£ the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALi, PURPOSES HAVE THE SAMS EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Charter of the Issuer to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or Charter limitation of indebtedness; and that the Issuer will establish rates and charges for the water service furnished by its Water Utility sufficient in amount to promptly meet the principal and interest requirements of this issue. IN WITNESS WHEREOF, the City of Saint Paul, Ramsey County, Minnesota, by its City Council has caused this Bond to be sealed with its official seal or a facsimile thereof and to be executed on its behalf by the original or facsimile signature of its Mayor, attested by the original or facsimile signature of its Clerk, and countersigned by the original or facsimile signature of its Director, Office of Financial Services. 3537323 24 °Iri - `l�'� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Date of Registration: BOND REGISTRP.R'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Bond Registrar � By Authorized Signature (SEAL) 353732.3 Registrable by: Payable at: _ CITY OF SAINT PAUL, RAMSEY COUNTY, MINNESOTA Mayor Attest: City Clerk Countersigned: Director, Office of Financial Services 25 °1'1-�l �°, ON REVERSE OF BOND Date of Pavment Not Business Dav. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, 1ega1 holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. Redemption. All Bonds of this issue (the "BOnds") maturing after December 1, 2005, are subject to redemption and prepayment at the option of the Issuer on such date and on any day thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid may be prepaid in such order of maturity and in such amount per maturity as the City shall determine; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Notice of Redemption. Mailed notice of redemption shall be given to the paying agent (if other than a City officer) and to each affected Holder of the Bonds. In the event any of the Bonds are called for redemption, written notice thereof will be given by first class mail mailed not less than Chirty (30) days prior to the redemption date to each Holder of Bonds to be redeemed. In connection with any such notice, the ��CUSIP" numbers assigned to the Sonds sha11 be used. Selection of Bonds for Redemotion. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount o£ 353732.3 2 6 °1'1-'1 l� 1 such Bond of a denomination of more than $5,000 shall be redeemed 2 as shall equal $5,000 for each number assigned to it and so 3 selected. If a Bond is to be redeemed only in part, it shall be 4 surrendered to the Bond Registrar (with, if the Issuer or Bond 5 Registrar so requires, a written instrument of transfer in form 6 satisfactory to the Issuer and Bond Registrar duly executed by 7 the Holder thereof or his, her or its attorney duly authorized in 8 writing) and the Issuer shall execute (if necessary) and the Bond 9 Registrar sha11 authenticate and deliver to the Holder of such 10 ii 12 13 14 15 16 17 is 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any authorized denomination or denominations, as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion o£ the principal of the Bond so surrendered. Issuance; Purpose: Special Obliaation. This Bond is one of an issue in the total principal amount of $7,000,000, all of like date of original issue and tenor, except as to number, maturiCy, inCerest rate, denomination and redemption privilege, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State o£ Minnesota and the Charter of the Issuer, and pursuant to a resolution adopted by the City Council of the Issuer on June il, 1997 ithe "Resolution"), for the purpose of providing, together with certain other moneys of the Issuer, funds sufficient for a current refunding of the Issuer's outstanding Variable Rate Demand Water Revenue Bonds, Series 1994D. The Bonds and the interest thereon are payable solely and exclusively from the Net Revenues of the Water Utility of the Issuer pledged to the payment thereof, and do not constitute a debt of the Issuer or of the Saint Paul Board of Water Commissioners within the meaning of any constitutional, Charter or statutory limitation of indebtedness. In the event of any default hereunder, the Holder of this Bond may exercise any of the rights and privileges granted by the laws of the State of Minnesota, subject to the provisions of the Resolution. The Bonds of this issue, together with the Water Revenue Bonds, Series 1993E, issued in the principal amount of $11,175,000, are a first and prior lien upon the Net Revenues of the Water Utility of the Issuer, except that the Issuer is authorized under certain conditions to issue additional revenue obligations on a parity of lien with these Bonds, all as provided in the Resolution. Action by Holders. The Holders of twenty percent t20%) or more in aggregate principal amount o£ Bonds at any time outstanding may, either by law or in equity, by suit, action, or other proceedings, protect and enforce the rights o£ all Holders of Bonds then outstanding, or enforce and compel the performance of any and all of the covenants and duties specified in the 353T523 2 7 q1-11� 1 2 3 4 5 6 7 8 9 10 11 12 13 i4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Resolution to be performed by the Issuer or the Board of Water Commissioners or their officers and agents; provided, however, that nothing shall affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof, or the obligation of the Issuer to pay the principal of and interest on each of the Bonds issued to the respective Holders thereof at the time and place, from the source and in the manner provided in the Bonds_ Denominations: Exchanae; Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Re£erence is hereby made to the Resolution for a description o£ the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of.the Issuer-contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange £or this Bond, one or more new fully, registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees uQon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Reaistered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. 353732.3 2 $ gR •'1�°� 1 2 3 4 5 6 7 8 9 10 Authentication This Bond shall not be valid or become obligatoYy for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Not Oualified Tax-Exemnt Obliaations. The Bonds have not been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. The Bonds do not qualify for such designation. 353732.3 29 9rt •'1 � °� 1 2 3 4 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable law regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 353732.3 � 9'�-'1�°l ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 3537323 31 an-��g 2 3 4 9 io 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3� 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 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 seal of the City may be a printed or photocopied facsimile; and provided further that any of such signatures may be printed or photocopied facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of any such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case an}r 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 Sonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. 11. Authentication; Date of Recristration. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. 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 Sond Registrar sha11 insert as the date of registration the date of original issue, which date is July 1, 1997. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 12. Registration; Transfer; Exchanae. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. A Global Certificate shall be registered in the name of the payee on the books of the Bond Registrar by presenting the Global Certificate for registration to the Bond Registrar, who will endorse his or her name and note the date of registration opposite the name of the payee in the certificate of registration on the Global Certificate. Thereafter a Global Certificate may 3537323 3 2 °l'1 • �l\°� 1 2 3 4 8 9 10 ii 12 13 14 15 16 i� 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representative, and the City and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until a Global Certificate is presented with such assignment £or registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted thereon by the Bond Registrar, all subject to the terms and conditions provided in this resolution and to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar. Transfer of a Global Certificate may, at the direction and expense of the City, be subject to other restrictions if required to qualify the Global Certificates as being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended, If a Global Certificate is to be exchanged for one or more Replacement Bonds, all of the principal amount of the Global Certificate shall be so exchanged. Upon surrender for transfer of any Replacement Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond RegisCrar shall authenticate, insert the date of registration (as provided in paragraph 11) of, and deliver, in the name of the designated transferee or transferees, one or more new Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder of a Replacement Bond, Replacement Bonds may be exchanged for Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Replacement Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Iteplacement Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Replacement Bonds which the Holder making the exchange is entitled to receive. Global Certi£icates may not be exchanged for Global Certificates of smaller denominations. Al1 Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly cancelled by 353732.3 cicj �l�-�t�°� 1 the Bond Registrar and thereafter disposed of as directed by the 2 City. 3 4 All Bonds delivered in exchange for or upon transfer of 5 Bonds shall be valid special obligations of the City evidencing 6 the same debt, and entitled to the same benefits under this 7 resolution, as the Bonds surrendered for such exchange or 8 transfer. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 4S 49 50 Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any 1ega1 or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 13. Riahts Ubon Transfer or Exchange. &ach Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 14. Interest Payment: Record Date. Interest on any Global Certificate shall be paid as provided in the first paragraph thereof, and interest on any Replacement Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder'�) on the registration books of the City maintained by the Bond Registrar, and in each case at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date"1 fixed by the Bond Registrar whenever money becomes available £or payment of the de£aulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Aolders not less than ten (10) days prior to the Special Record Date. 3537323 34 q�.�►t� 15. Holders• Treatment o£ ReQistered Owner; Consent of Iiolders. (A) For the purposes of all actions, consents and other matters affecting Iiolders of the Bonds, other than payments, redemptions, and purchases, the City may {but shall not be obligated to) treat as the Holder of a Bond the beneficial owner of the Bond instead of the person in whose name the Bond is registered. For that purpose, the City may ascertain the identity of the beneficial owner of the Bond by such means as the Bond Registrar in its sole discretion deems appropriate, including but not limited to a certificate from the person in whose name Che Bond is registered identifying such beneficial owner. (B} The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest isubject to the payment provisions in paragraph 14 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. (C) Any consent, request, direction, approval, objection or other instrument to be signed and executed by the Holders may be in any number of concurrent writings of similar tenor and must be signed or executed by such Aolders 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 instrument, namely: (1) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such writing acknowledged before him the execution thereof, or by an a£fidavit of any witness to such execution. (2) Subject to the provisions of subparagraph (A) above, the fact of the ownership by any person of Bonds and the amounts and numbers of such Bonds, and the date of the holding of the same, may be proved by reference to the bond register. 353732,3 3 5 �� -^� �q 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 16. Deliverv; Application of Proceeds. The Global Certificates when so prepared and executed shall be delivered by the Director, O£fice of Financial Services, to the Purchasex upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 17. Fund and Accounts. For the convenience and proper administration of the proceeds from the sale of the 1997 Bonds and for the payment of principal of and interest on the 1997 Bonds, the Board of Water Commissioners Water Utility Enterprise Fund (the "Water Utility Fund", heretofore in resolutions relating to the 1993 Bonds and 1994 Bonds also referred to as the "Water Utility Fund") heretofore created shall continue in force and e£fect as a separate fund of the City and of the Board until a11 of the 1997 Bonds are fu11y paid and retired. In the Water Utility Fund there is hereby created a 1997 Refunding Account and in addition there are, and there shall continue to be, the following accounts: (a) A"1997 Refunding Account", to which shall be credited all proceeds of the sale of the 1997 Bonds, together with any other moneys provided by the City as set forth in paragraph 27. The 1997 Refunding Account shall be used to pay the 1993 Bonds upon their early redemption and to pay the costs of issuing the 1997 Bonds. The moneys in the 1997 Refunding Account shall be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the 1997 Refunding Account shall be deposited in the Revenue Bond Debt Service Account. (b) An "O�eration and Maintenance Account", into which shall be paid all gross revenues and earnings derived from the operation of the Water Utility system including any assessments which may from time to time be levied with respect to the Water Utility. From this account there shall be paid all, but only, current expenses of said system. Current expenses shall include the reasonable and necessary costs of administering, operating, maintaining and insuring the system, salaries, wages, costs of materials and supplies, costs of water production and distribution, necessary legal, engineering and auditing services, and a11 other items which, by sound accounting practices, constitute normal, reasonable and current costs of operation and maintenance, but excluding any allowance for depreciation, extraordinary repairs and payments into the Revenue Bond Debt Service Account and Reserve Account. There shall at all times be maintained in said account a reserve in an amount sufficient to cover the operation and maintenance costs of the Water Utility system for the ensuing fifteen (15? day period; neither said reserve nor any annual 3537323 36 y�-��� addition thereto shall constitute "Net Revenues" as defined below. The balance from time to time remaining in the Operation and Maintenance Account, including interest or other earnings received from the investment of any moneys in the Water Utility Fund, after paying or providing for the foregoing items, shall constitute, and are referred to in this resolution as, "Net Revenues"_ Payments of fees to trustees for bonds, to providers of liquidity facilities or credit enhancement facilities for bonds and remarketing agents for bonds are also current expenses. (c) A°Revenue Bond Debt Service Account", into which there shall be credited and to which there is hereby irrevocably pledged from the Net Revenues of the operation of the Water Utility system monthly commencing in July, 1997, a sum equal to at least 1/12 of the total principal and interest on the 1997 Bonds and any other bonds issued on a parity therewith during the ensuing twelve (12) months; provided, however, that no further payments need be made to said account when the moneys held therein are sufficient for the payment of a11 principal and interest due on said bonds on and prior to the next maturity date. No money shall be paid out of said account except to pay principal, premium, if any, and interest on the 1997 Bonds and any other bonds which are issued on a parity with the 1997 Bonds. (d) A"Reserve Account�', which was heretofore created, and is hereby continued, to be used only when and if moneys in the Revenue Bond Debt Service Account or other moneys available therefor are insufficient to pay principal, premium, if any, and interest on the bonds payable from the Revenue Bond Debt Service Account; provided, however, that the moneys in the Reserve Account may be used to prepay said bonds, when such prepayment will retire all of the bonds then outstanding. Amounts already in the Reserve Account pursuant to the resolutions authorizing the issuance of the 1993 Bonds and 1994 Bonds shall be maintained therein upon the issuance of the 1997 Bonds to the extent necessary to equal the amount required to be maintained in the Reserve Account as set forth below, being initially amounts required for the 1993 Bonds and 1997 Bonds. Whenever the moneys in the Reserve Account exceed the amount required to be maintained in the Reserve Account as set forth below, such excess may be transferred to the Revenue Bond Debt Service Account; and whenever the moneys in the Reserve Account sha11 be less than said amount, the Reserve Account shall be restored to said amount from the next available Net Revenues. The amount required to be maintained in the Reserve Account shall be an amount equal to the lesser of: tl) ten percent (10�) of the original princigal amount of 353732.3 3 7 q�-�� � 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 the 1997 Bonds and other bonds payable from the Revenue Bond Debt Service Account issued after the 1993 Bonds on a parity of lien therewith, or {2) the maximum principal and interest due in any year on the bonds payable £rom the Revenue Bond Debt Service Account; and whenever the moneys in the Reserve Account exceed such amount required to be maintained therein, such excess may be transferred to the Revenue Bond Debt Service Account. When only bonds issued after the 1994 Bonds are outstanding, the "maximum principal and interest due in any year" on variable rate bonds shall be calculated at such time (for any variable rate bonds issued prior to such time) or in connection with their issuance (for variable rate bonds issued after such time) assuming the variable rate bonds bear fixed interest for the remainder of their terms or for their terms, as appropriate, at the rates prevailing at such time (for any variable rate bonds issued prior to such time) or at the time of their issuance (for variable rate bonds issued after such time) for utility revenue bonds of comparable quality, maturity and taxable or tax-exempt status, provided that other or different assumptions may be used if necessary to obtain an investment grade credit rating for the variable rate bonds or to maintain the credit rating(s) then in effect for the bonds then outstanding. (e) Net Revenues in excess of those required for the foregoing purposes may be used for any proper purpose. (f) The money in the Water Utility Fund shall be allotted and paid to the various accounts herein established in the order in which said accounts are listed on a cumulative basis, and if in any month the money in said accounts is insufficient to place the required amount in any accounts, the deficiency shall be made up in the following month or months after payment into all other accounts having a prior claim on said Net Revenues have been made in full. (g) All money held in the Revenue Bond Debt Service Account and the Reserve Account created by this resolution shall be kept separate and apart from all other municipal funds and accounts. ih) Notwithstanding anything to the contrary herein, moneys in the Water Utility Fund and any account thereof may be used to pay any rebate of excess arbitrage earnings on gross proceeds of the 1993 Bonds, 1994 Bonds and 1997 Bonds to be paid to the United States in order to maintain the exclusion from gross income under Section 103 of the Code (as hereinafter defined) of the interest on the 1993 Bonds, 1994 Bonds and 1997 Bonds. 353732.3 m 9'l-'1\� 1 5 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 (i) Accounts created £or bonds, notes or obligations with a lien on Net Revenues subordinate to the lien of the 1997 Bonds shall be maintained and operated as required by the resolutions authorizing the same. (j) No portion of the proceeds of the 1997 Bonds sha11 be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the 1997 Bonds were issued, (2) as part of a reasonably required reserve or replacement fund not in exeess of ten percent (10a) of the proceeds of the 1997 Bonds (or in a higher amount which the City establishes is necessary to the satisfaction of the Secretary of the Treasury of the United States), and (3) in addition to the above in an amount not greater than the lesser of five percent (50) of the proceeds of the 1997 Bonds or $100,000. To this effect, any proceeds of the 1997 Bonds and any sums from time to time held in the 1997 Refunding Account, Operation and Maintenance Account, Reserve Account or Revenue Bond Debt Service Account (or any other City or Board account which will be used to pay principal or interest to become due on the bonds payable there£rom) in excess o£ amounts which under the federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods", minor portion or reserve made available under the federal arbitrage regulations. Money in the Water Utility Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the 1997 Bonds to be ��federally guaranteed" within the meaning of Section 149(b) of the federal Tnternal Revenue Code of 1986, as amended ithe "Code"). 18. Paritv Bonds. The 1993 Bonds and 1997 Bonds shall be a first charge and lien upon the Net Revenues of the Water Utility. No part of such Net Revenues shall be pledged to the payment of any general obligation bonds issued by the City while any 1993 Bonds or 1997 Bonds or bonds issued on a parity therewith remain outstanding and undischarged, unless the pledge of Net Revenues to such general obligation bonds is expressly made a second and subsequent lien and the City and Board covenant to make the rates and charges of the Water Utility su�ficient to timely pay such general obligation bonds. No additional revenue obligations payable from the Revenue Bond Debt Service Account 353732.3 39 °1'1-'l �°� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 shall be herea£ter issued unless the same are e�ressly made a second and subsequent lien upon the Net Revenues of the Water Utility; provided, however, that additional obligations may be issued on a parity of lien with the 1997 Bonds, provided that the annual Net Revenues of said Water Utility for each of the two (2) completed £iscal years immediately preceding the issuance of such additional obligations shall have been one and one-half (1.5) times the maximum annual principal and interest coming due thereafter on all outstanding revenue obligations payable from and having a parity of lien upon the Net Revenues of the Water Utility Fund, including the additional obligations so to be issued; provided further, however, that if the annual Net Revenues in either or both of the aforesaid two (2) completed fiscal years shall be insufficient to meet this test then any reasonably projected increase in Net Revenues for the fiscal year immediately following such second completed fiscal year may be added to the Net Revenues for such completed fiscal years or either of them (but the total of such projected increase in Net Revenues may be added only once) in applying the foregoing test. For purposes of the foregoing limitations, when only bonds issued after the 1994 Bonds are outstanding, the "maximum annual principal and interest coming due thereafter" on variable rate bonds shall be calculated assuming the variable rate bonds bear fixed interest at the rates prevailing at the time of the calculation for utility revenue bonds of comparable quality, maturity (or remaining maturity) and taxable or tax-exempt status, provided that other or different assumptions may be used if necessary to obtain an investment grade credit rating for the variable rate bonds or to maintain the credit rating(s) then in effect for the bonds then outstanding. Such facts shall be shown by the Certificate of the General Manager of the Board of Water Commissioners and shall be a finding of and recited in the resolution of the City authorizing any such additional series. In addition, the following conditions shall be met: (a) The payments required to be made (at the time of the issuance of such parity lien bonds? into the various funds and accounts provided for in this resolution have been made. ib) All such parity lien bonds shall have a December 1 maturity or maturities and shall have semiannual interest payments on June 1 and December 1 in each year; provided that interest payments may be more frequent than semiannually or on dates other than June 1 and December 1 if such interest is paid in full only if at the time of payment the interest deposits into the Revenue Bond Debt Service Account for interest payments on June 1 or December 1, as appropriate, on other bonds are current, and any insufficiency of interest on all parity bonds is allocated 353732.3 � °I'1-'l 1 � � 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 proportionately in each six-month period ending 3une 1 or December 1, as appropriate. (c) The proceeds of such parity lien bonds shall be used only for the purpose of (1) making improvements, additions, extensions, renewals or replacements to the Water Utility, and capitalizing interest or establishing Reserves and paying the costs of such financing, or (2} refunding parity lien bonds (provided that bonds which refund parity lien bonds may instead derive their parity lien status from paragraphs 19 or 25 as applied in paragraph 20). 19. Refundina Maturina Bonds. The City also reserves the right and privilege o£ issuing additional revenue bonds if and to the extent needed to refund maturing bonds payable from the moneys in the Water Utility Fund in case the moneys in the Revenue Bond Debt Service Account are insufficient to pay the same at maturity, which refunding revenue bonds may be on a parity with this issue as to interest payments even if such interest is in excess of the interest on the refunded bonds, but shall mature subsequent to all the revenue obligations which are payable from the Net Revenues of the Water Utility Fund and which are sti11 outstanding upon completion of such refunding. 20. Other Revenue Obliaations. Except as authorized in paragraphs 18, 19 and 25 hereof, the City covenants and agrees that it will issue or incur no obligations payable from the Net Revenues o£ all or a part of said Water Utility or constituting in any manner a lien thereon, unless such obligations are expressly made junior and subordinate to the lien and charge of the 1997 Bonds on said Net Revenues. If bonds which refund the 1997 Bonds are parity lien bonds, they shall enjoy complete equality of lien with any portion of the 1997 Bonds not refunded and any other then outstanding bonds payable from the Revenue Bond Debt Service Account, if any there be, and such refunding bonds shall continue to have whatever priority of lien over subsequent issues that the refunded bonds may have had. If only a portion of the outstanding 1997 Bonds shall be refunded such 1997 Bonds shall be refunded in such manner that the interest rate of any refunding bond sha11 be greater than interest rate of the corresponding refunded 1997 Bond (or average net interest rate of the refunding bonds shall be, shall be rea o bl and if the the or s na y estimated to be, higher than the average net interest rate of the refunded 1997 Bonds), or that the maturity date of any refunding bond shall be earlier than the maturity date of the corresponding refunded 1997 Bond (or the average maturity of the refunding bonds shall be earlier than the average maturity of the refunded 1997 Bonds), then such 1997 Bonds may not be refunded without the consent of the holders of the unrefunded portion of the 1997 Bonds and any other bonds then 353T323 41 9�-� �q outstanding payable from the Revenue Bond Debt Service Account unless the Net Revenues coverage test af paragraph 18 is met. 21. Insufficient Amounts. In the event that the moneys in the Revenue Bond Debt Service Account shall be insufficient at any particular time to pay the principal then due and interest then accrued on all bonds payable therefrom, said moneys shall first be applied to the payment pro rata of the accrued interest on all such bonds, payable over a period ending on June 1 or December 1, as appropriate, and any balance shall be applied in payment pro rata of the principal on a11 such bonds, provided further that if it shall ever be determined by a court of competent jurisdiction while any such bonds remain outstanding that the sums available and to become available for the payment of the principal thereof and interest thereon are insufficient whether or not then due, then the moneys in the Revenue Bond Debt Service Account shall be applied in payment of all principal then outstanding whether or not then due and the interest accrued thereon to the date of payment ratably according to the aggregate amount thereof without any preference or priority. 22. Suit b�Bondholders. The Holders of twenty percent (20%) or more in aggregate principal amount of bonds issued under this resolution and at any time outstanding may, either at law or in equity, by suit, action, or other proceedings, protect and enforce the rights of all Holders of the 1997 Bonds then outstanding or enforce or compel the performance of any and all of the covenants and duties specified in this resolution to be performed by the City or Board or their officers and agents, including the fixing and maintaining of rates and charges and the collection and proper segregation of revenues and the application and use thereof. 23. Covenants. For the protection of the Holders of the 1997 Bonds, the City herein covenants and agrees to and with the holders thereof from time to time as follows: (a) It will at all times through its Board adequately maintain and efficiently operate the Water Utility as a City utility. It will from time to time make a11 needful and proper repairs, replacements, additions and betterments to the equipment and facilities of said Water Utility so that they may at all times be operated properly and advantageously, and whenever any equipment of said system shall have been worn out, destroyed or otherwise become insufficient for proper use, it shall be promptly replaced or repaired so that the value and efficiency of the facilities shall be at all times fully maintained and its revenues unencumbered by reason thereof_ 353732.3 4 2 9�1-'1 � °1 (b) The rates for all water service and the charges £or all water supplied by the Water Utility to the City and its residents and to all other consumers shall be reasonable and just, taking into account the cost and value of the Water Utility, the cost of maintaining and operating the Water Utility and the proper and neaessary allowances for depreciation, the amounts required for the payment of principal and interest on the bonds payable £rom the Net Revenues of the Water Utility, and a11 other sums customarily paid from the revenues of the Water Utility. {c) It will as required by Section 10.11.2 of the City Charter (and it will continue to do so whether or not required by said Charter) establish, maintain and collect such charges and rates as will produce revenues sufficient to pay the reasonable cost of operation, repair and maintenance of the Water iJtility and to pay the interest on and principal of the 1997 Bonds and all bonds on a parity of lien with the 1997 Bonds, as and when they become due, as well as to provide sufficient money to make the required appropriations to the various funds and accounts established herein. The City will review the schedule of rates and charges for the Water Utility at least annually when the Board budget is reviewed. (d) It will not sell, lease, mortgage, or in any manner dispose of the Water Utility or any part thereof (including any and all extensions and additions that may be made thereto) until all revenue bonds payable from the Net Revenues of the Water Utility or any part thereof have been paid in full; provided, however, that the City may sell the Water LTtility or any part thereof if simultaneously with or prior to said sale all of the outstanding bonds are discharged in accordance with paragraph 25 of this resolution. This covenant shall not be construed to prevent the sale by the City at fair market value of real estate, equipment or other non-revenue-producing properties which in the judgment of the City have become unnecessary, uneconomical or inexpedient to use in connection with the Water Utility provided that suitable facilities are obtained in place thereof and provided further that nothing herein is intended to prevent the City or Board from terminating or otherwise preventing the termination of contracts for the furnishing of water. (e) It shall cause to be kept proper books, records and accounts adapted to the Water Utility separate from other acaounts to be audited at the end of each fiscal year. A copy of said audit shall be furnished, without cost, to the Purchaser of the 1997 Bonds. If the City fails to provide 353T52.3 4 3 q�t -��� 1 2 3 4 8 9 10 11 12 13 14 15 16 17 18 19 20 zi 2z 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 such audit within a reasonable time after the end of said fiscal year, the holders of twenty percent (200) or more of the outstanding bonds may cause such audit to be made at the expense of the City. The expense of preparing such audit shall be paid as current operating expenses of the Water Utility. The Purchaser of the 1997 Bonds and the Holders thereof, or their duly appointed representatives, from time to time shall have the right, at all reasonable times, to inspect the Water Utility system and to inspect and copy the books, records, accounts and data relating thereto. The City agrees to furnish copies of such audit, without cost, to any Holder or Holders of the 1997 Bonds at their request within a reasonable time after the end of each fiscal year. (f) It will faithfully and punctually perform all duties with reference to the Water Utility required by the City Charter, the Constitution and laws of the State of Minnesota and this resolution. (g) It will grant no franchise to any competing utility. 24. Amendments. alteration shall be made in the 1997 Bonds without the than sixty percent (600) in then outstanding except for and alterations ta) made to or omission, or (b) which w Holders of such outstanding nothing herein contained sh permitting (1) an extension or the interest on any such principal amount of any suc thereon, or (3) a privilege No change, amendment, moditication or the covenants made with Holders of �onsent of the Holders of not less principal amount of such 1997 Bonds changes, amendments, modifications cure any ambiguity or formal defect �uld not materially prejudice the 1997 Bonds; provided, however, that �11 permit or be construed as of the maturiCy of the principal of 1997 Bonds, or (2) a reduction in the z 1997 Bond or the rate of interest or priority of any such 1997 Bond or 1997 Bonds over any otner bona or bonas excepL as oLnerwise provided herein, or (4) a reduction in the aggregate principal amount of such 1997 Bonds required for consent to any change, amendment, modification or alteration, or i5) the creation of any lien ranking prior to or on a parity with the lien of such 1997 Bonds, except as hereinbefore e�pressly permitted, or (6) a modification of any of the provisions of this paragraph without the consent of the Holders of one hundred percent (100%) of the principal amount of such 1997 Bonds outstanding. discharged and other 1997 Bonds sahich are 353732.3 25. Discharae. When all 1997 Bonds have been as provided in this paragraph, all pledges, covenants rights granted by this resolution to the Holders of the shall cease. The City may discharge all 1997 Bonds due on any date by depositing with the paying agent � � � �� � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum sufficient for the payment thereof in full; or if any 1997 Bond should not be paid when due, it may nevertheless be discharged by depositing with the paying agent ibut not if a City officer is the paying agent) or an escrow agent a sum sufficient for the payment thereaf in fu11. The City may also discharge any grepayable 1997 Bonds which are called for redemption on any date when they are prepayable according to their terms, by depositing with the paying agent (but not if a City officer is the paying agent) or an escrow agent on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as provided in this resolution. The City may also at any time discharge the issue of the 1997 Bonds in whole or in part by complying with the applicabla provisions of Minnesota Statutes, Section 475.67, and any amendments thereto, except that the funds deposited in escrow in accordance with said provisions may but need not be in whole or part proceeds of advance refunding bonds. The City may discharge 1997 Bonds as herein provided without the consent of any Bondholders. 26. Fiscal Year As used in this resolution the words "fiscal year" shall mean the twelve (12) month period beginning on January 1 of each year and ending on December 31 of the same year. Should it be deemed advisable at some later date to change the fiscal yearly basis, the same may be done by proper actions to that effect, which change shall not constitute an amendment or modification of this resolution. 27. Abpropriation. It is hereby found, determined and declared that on the date this resolution is adopted, there is more in the Reserve Account than is required upon the discharge of the Refunded Bonds. The difference is hereby appropriated to the 1997 Refunding Account. The Board's additional initial appropriation to the 1997 Refunding Account necessary to accomplish the current refunding of the Refunded Bonds is hereby recognized and approved. 28. Refunded Bonds; Securitv. Until retirement of the Refunded Bonds, all provisions heretofore made for the security thereof shall be observed by the City and all of its officers and agents. 353732.3 G� q �-�> 9 29. RedemQtion of Refunded Bonds. The Refunded Bonds shall be paid upon early redemption prior to October 1, 1997, all in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached hereto as E�ibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemption in substantially such fox sha11 be mailed to the paying agent and sha11 be given by the paying agent to the holders of the Refunded Bonds at least ten (10) days prior to the redemption date in the manner provided for the Refunded Bonds. 30. Records and Certificates The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the £acts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the faats recited therein. 31. Neaative Covenants as to IIse of Proceeds and Imbrovements. The City hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be �'private activity bonds" within the meaning of Sections 1�3 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Bonds that would cause them to be private activity bonds, and the average term of the Bonds is not longer than reasonably necessary for the governmental purpose of Che issue. The City hereby covenants not to use the proceeds of the Bonds in such a manner as to cause the Bonds to be ��hedge bonds" within the meaning of Section 149(g) of the Code. 32. Tax-Exempt Status of the Bonds; Rebate; Elections. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 353732.3 4 6 �� ~��� If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Bonds, the Mayor, Clerk, Treasurer and Director, Office of Financial Services, or any of them, are hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 33. No Desicrnation of Oualified Tax-Exe�t Oblicsations. The Bonds, together with other obligations issued by the City in 1997, exceed in amount those which may be qualified as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and hence are not designated for such purpose. 34. Letter of Rebresentations. The Letter of Representations for the Bonds is hereby confirmed to be the Blanket Issuer Letter of Representations dated April 10, 1996, by the City and received and accepted by The Depository Trust Company. So long as The Depository Trust Company is the Depository or it or its nominee is the Holder of any Global Certificate, the City shall comply with the provisions of the Letter of Representations, as it may be amended or supplemented by the City £rom time to time with the agreement or consent of The Depository Trust Company. 35. Parity Findings. It is hereby found, determined and declared that: (a) The 1997 Bonds are on a parity of lien with the 1993 Bonds, and do not require for their issuance or their parity status the consent of the holders of any of the 1993 Sonds or 1994 Sonds pursuant to the resolutions authorizing the issuance thereof. The Bonds bear interest at a rate under the Maximum Rate on the 1994 Bonds, and the 1997 Bonds are qualified to be on a parity of lien with the 1993 Sonds up to said Maximum Rate. 36. Covenant with Holders. Each and all of the terms and provisions of this resolution shall be and constitute a covenant on the part of the City to and with each and every Holder from time to time of the Bonds. 37. Necrotiated Sale. The City has retained Springsted Incorporated as an independent financial advisor, and this Council has heretofore determined, and does hereby determine, ta sell the Bonds by private negotiation to the Purchaser, all as provided by Minnesota Statutes, Section 475.60, Subdivision 2(9). 353732.3 4 7 q� -��q 38. Continuincx Disclosure. The City is an obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereina£ter described, to: A. Provide or cause to be provided to each nationally recognized municipal securities information repository ('�NRMSIR") and to the appropriate state information depository ("SID"), if any, for the State of Minnesota, in each case as designated by the Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. B. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking. C. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of a failure by the City to provide the annual financial information with respect to the City described in the Undertaking. The City agrees that its covenants pursuant to the Rule set forth in this paragraph 38 and in the Undertaking are intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holflers; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Director, Office of Financial Services, or any other officers of the City authorized to act in their stead (the "Officers"), are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council, subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser, and (iii) acceptable to the Officers. 39. Severabilitv. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability 353732.3 4 8 a1-ril9 1 2 3 4 5 6 7 of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 40. Headincxs. Headings in this resolution are included for convenienoe of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. Requested by Department of: Adoption by Council 3ecretary B \ = �_ � ApprovecS by Mayor. Date � Office of Financial Services B y : m' �_ Form Apprwed by City Attomey By`.� �-" � � G'�3 -- �7 Approved by ayo� for Submis ion to Council By . e Adopted by Council: Date � �..�-<- �� ,`� q`� g 1 q �('� �� S 7 � ! 1 � UEPARTMENTADFFIGHCOUNCIL �ATE MlT1ATFA v � �� v Office of Financial Services 6/3/97 GREEN SHEE GONTACT PERSON & PHONE INRIAL/OATE INRIAL/DATE � DEPARiMENTDIRE � CI7YCAUNCIL Martha Rantorowicz, 266-8836 p5$�GN �CRYATfORNEY �CINCLERK NUMBEfl FOR MUST BE ON fAUNCI� AGENDA BY (�p'TE) pOUTING � B��ET OIRECiO O FIN. & MGT. SERVILES DIA. June 11 a 1997 ORDER � MAVOR (pR A$SISfANT� � TOTAL # OP SIGNATORE PAGES z __ (CLIP ALL LOCATiONS FOR SIGNATURE) ACTION RE�UESTEO: This resolution accepYS the winning proposal and awards the bid for the $7,000,000 Water Revenue Refunding Bonds, Series 1997C. This is a competitive bond sale and the award is going to the bidder £ound to be the lowest cost to the Wa[er Utility. FECAMMENDA710NS: Approve (A) ar Rcyect (R) pERSONAL SERVICE CONTRACTS MUST ANSWER TNE FOLLOWING �UESTIONS: _ PLANNING COMMISSION _ CIVIL SEFVICE COMMISS�ON 1. Has this personttirm ever worketl untler a comract for this tlepartment? _ CIB GOMMITfEE _ YES NO � STAFF Z. Hes this person�rm ever been a ciry employee? — YES NO _ O�.sia�c[cAURT _ 3. Does this personRirm possess a skill not normaliy possessed by any curtent city employee? SUPPpRT$ WNICH COUNCIL OBJECTIVE� YES NO Explain all yes answers on separate sheet antl ettach to green sheet INITIATING PROBIEM, ISSUE, OPPFIRTUNITV (Who, What, When, Where, Why). These bonds axe for the purpose of refunding the $10,000,000 Variable Rate Demand Water Revenue Bonds, Series 1994D. ADVANTACaES IFAPPROVED Conversion to fixed rate debt is beneficial in the current market, and we eliminate the risk of having variable rate debt. DISADVANTAOES IF APPROVED� None DISADVANTAGES IF NOTAPPflOVED' � 7��Q� TOTAL AMOUNT OFTRANSAC710N $ COS7/REVENUE BUDGETED (CIRCLE ONE) YES NO FUNDIfBG SOURCE AC7IVITY NUMBER FINANCIAL INFORFiAT10N: (EXPLAIN) 9�-^�r�9 1 SCFiEDULES AND EXHIBITS 2 3 4 Schedule A - Proposals 5 6 Er,hibit A- Notice of Call for Redemption a'1 • rl�°� EXHIBIT A NOTICE OF CAI,L FOR REDEMPTION $10,000,000 VARIABLE RATE DEMAND WATER REVENUE BONDS, SERIES 1994D CITY OF SAINT PAUI, RAMSEY COUN`I'Y MINNESOTA NOTICE IS HEREBY GIVEN that by order o£ the City Council of the City of Saint Paul, Ramsey County, Minnesota, there have been called for redemption and prepayment on 1997, outstanding bonds of the City designated as Variable Rate Demand Water Revenue Bonds, Series 1994D, dated November 15, 1994, as the date of original issue, having stated maturity dates o£ December 1, 2014, bearing the CUSIP number 793073 CU9, bearing interest at a variable rate, and now outstanding in the total principal amount of $9,600,000. Al1 outstanding bonds of the issue are being called for redemption. The bonds are being called at a price of par plus accrued interest to , 1997, on which date the redemption price will become due and pagrable and all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the principal office of the trustee and paying agent for the Bonds, First Trust National Association, 180 East Fifth Street, 2nd Floor, Saint Paul, Minnesota 55101, on or before , 1997. BY ORDER OF THE CITY COUNCIL /s/ Fred Owusu City Clerk Additional information may be obtained from: SPRINGSTED INCORPORATED 85 East Seventh Place Suite 100 Saint Paul, Minnesota 55101-2143 (612) 223-3000 353764.7 1 2 3 4 5 8 9 10 11 12 13 14 15 16 17 1S 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 �n� WHERRAS, "Holder" as used herein means the perso in whose name a Bond is registered on the registration books,�f t: City maintained by the registrar appointed as provided in' / paragraph 8 (the "Bond Registrar"); and WHEREAS, pursuant to Minnesota Statutes, Secti 475.60, Subdivision 2(9), public sale requirements do n' apply to the Bonds, because the City has retained an indepe ent financial advisor and this Council has determined to ell the Bonds by private negotiation, and the City has inst d authorized a competitive sale without publication of notice t ereo£ as a form of private negotiation; and WHEREAS, Rule 15c2-12 of the Securit' s and Exchange Commission prohibits "participating underwri rs" from purchasing or selling the Bonds unless the City undert es to provide certain continuing disclosure with respect o the Bonds; and WHEREAS, proposals for the Bo s have been solicited by Springsted Incoxporated pursuant to an fficial Statement and Terms of Proposal therein: NOW, THEREFORE, BE IT R City o£ Saint Paul, Minnesota, as 6 � VED by the Council of the lows: The proposal of (the "PUrchaser��} to purchase $7,0 ,000 Water Revenue Refunding Bonds, Series 1997C, of the ty (the "Bonds" or "1997 Bonds", or individually a"Bond" or "1 7 Bond"), in accordance with the Terms of Proposal for the nd sale, at the rates of interest hereinafter set forth, an to pay for the Bonds the sum of $ , plus terest accrued to settlement, is hereby found, determined and clared to be the most favorable proposal received and is hereb accepted, and the Bonds are hereby awarded to the Purchaser. T Director, Office of Financial Services, or his designee, is di- cted to retain the deposit of the Purchaser and to forthwith r urn to the others making proposals their good faith checks or fts. 2. Maturities. Bonds, Serie original is� date as fujl R-1 upwar�� date. shall e Bonds shall be titled "Water Revenue Refunding 1997C", shall be dated July l, 1997, as the date of e and shall be issued forthwith on or after such y registered bonds. The Bonds shall be numbered from Global Certificates shall each be in the o£ the entire principal amount maturing on a single cement Bonds, if issued as provided in paragraph 6, the denomination of $5,00o each or in any integral �9 � 9�1-�tq multiple thereof of a single maturity. The Bonds shall ma]�re on December 1 in the years and amounts as follows: / Year Year 2006 2007 2008 2009 201� 2011 2012 Amount $345,00 425,0 0 595, 00 165 000 2 ,��� 0,000 50,000 3. Pur ose• Refundin Findin s The Bonds (together with other available funds appropriated? hall provide funds for a current refunding of the Refunded Bon (the "Refunding"). The 1994 Bonds were issued to finance impr ements to the Water Utility (the "Improvements"). 2he pr ceeds of the Bonds shall be deposited and used as provided in p agraph 17. The total cost of the Refunding, which shall incl e all costs enumerated in Minnesota Statutes, Section 475.6 , is estimated to be at least equal to the amount of the Bonds It is hereby found, determined and declared that (1) the Refun ng is pursuant to Minnesota Statutes, Section 475.67, and ) the Refunding is necessary or desirable for the issuance of bligations bearing a fixed rate of interest in the case of the 94 Bonds, which bear interest at a rate varying periodically. 4. Interest. he Bonds shall bear interest payable semiannually on June 1 d December 1 of each year (each, an "Interest Payment Date'! , commencing December 1, 1997, calculated on the basis of a 360- ay year of twelve 30-day months, at the respective rates per nnum set £orth opposite the maturity years as follows: 1998 1999 2000 2001 20�2 2003 2004 2005 Amount $730,000 800,000 420,000 225,000 315,00� 660,000 690,000 640,000 Interest Rate Maturitv Year Interest Rate 11 1998 1999 2000 200 20 2 3 04 005 L� 0 2006 2007 2008 2009 2010 2011 2012 ° Description of the Global Certificates and ry System. Upon their original issuance the Bonds in the form of a single Global Certificate for 5 ��-�t� (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum suf£icient for the payment thereof in fu11; or if any 1997 Bond should not be paid when due, it may nevertheless be discharged by deposit' g with the paying agent (but not if a City officer is the payi agent) or an escrow agent a sum sufficient for the payment thereof in full. The City may also discharge any prepaya e 1997 Bonds which are called for redemption on any date when t y are prepayable according to their terms, by depositing wit the palring agent (but not if a City officer is the paying gent) or an escrow agent on or before that date an amount e to the principal, interest and redemption premium, if any which are then due, provided that notice of such redemption as been duly given as provided in this resolution. The City ay also at any time discharge the issue of the 1997 Bonds in ole or in part by complying with the applicable provisions of M' nesota Statutes, Section 475.67, and any amendments thereto, cept that the funds deposited in escrow in accordance with sai rovisions may but need not be in whole or part proceeds of vance refunding bonds. The City may discharge 1997 Bonds as her n provided without the consent of any Bondholders. 26. Fiscal Year. As used ' this resolution the words "fiscal year" shall mean the twelve 12) month period beginning on January 1 of each year and endi on December 31 of the same year. Should it be deemed advisa e at some later date to change the fiscal yearly basis, the sam may be done by proper actions to that effect, which change sh 1 not constitute an amendment or modification of this resolutio . 27. A ro riatio . It is hereby found, determined and declared that on the date is resolution is adopted, there is $ in the eserve Account, of which only $ is re red upon the discharge of the Refunded Bonds. The difference f$ is hereby appropriated to the 1997 Refunding ccount. The Board's additianal initial appropriation to the 997 Refunding Account necessary to accomplish the curr nt refunding of the Refunded Bonds is hereby recognized and ap oved. 28. Refunded Bonc thereof shall agents. f �tunded Bonds; Securitv. Until retirement of the all provisions heretofore made for the security observed by the City and all of its officers and 45 `t�t-��� 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 29. Redemntion of Refunded Bonds. The Refunded Bonds shall be paid upon early redemption on or about , 1997, all in accordance with the terms and conditions set forth in the Notice of Ca11 far Redemption attached hereto as Exhibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemp�ion in substantially such form shall be mailed to the paying agent and shall be given by the paying agent to the holders of he Re£unded Bonds at least ten (10) days prior to the redem�ion date in the manner provided for the Refunded Bonds. �f 30. Records and Certificates. The offi City are hereby authorized and directed to prepare the Purchaser, and to the attorneys approving the� of the furnish to ity of the issuance of the Bonds, certified copies of all oceedings and records of the City relating to the Bonds and � the financial condition and affairs of the City, and such o er affidavits, certificates and information as are require o show the facts relating to the legality and marketability f the Bonds as the same appear £rom the books and records un r their custody and control or as otherwise known to them, all such certified copies, certificates and affidavits, i uding any heretofore furnished, shall be deemed representa ons of the City as to the facts recited therein. 31. Neqative Cove Improvements. The City here of the Bonds or to use the I them to be used, or to ente arrangements for the cost of as to cause the Bonds to be meaning of Sections 103 an City reasonably expects - term of the Bonds that bonds, and the average reasonably necessary The City hereby cove an such a manner as t cau the meaning of Se ion 32. The City sh to establis Section 103 without li investme s than th yi earnin to by c enants not to use the proceeds mpr ements, or to cause or permit r' o any deferred payment e Improvements, in such a manner private activity bonds" within the 141 through 150 of the Code. The no actions will be taken over the cause them to be private activity erm of the Bonds is not longer than r the governmental purpose of the issue. ts not to use the proceeds of the Bonds in se the Bonds to be "hedge bonds" within 149(g) of the Code. 1 comply with requirements necessary under the Code nd maintain the exclusion from gross income under f the Code of the interest on the Bonds, including tation requirements relating to temporary periods for limitations on amounts invested at a yield greater ld on the Bonds, and the rebate of excess investment the United States. m w '_ 85 E. SEVENTH PLACE SUITE 100 SAINC PAUL, MN 55101-2143 612-223-3000 FAX:612-223-3002 q�- ��9 SPRINGSTED Public Finana fldvisors June �1, 1897 Mr. Bemie Bullert, General Manager City of Saint Paul Water Utility 8 East Fourth Street, Suite 400 Saint Paul, MN 551�1-1007 Ms. Martha Kantorowicz, Debt Manager City of Saint Pau{ Treasury Division 160 City Hall 15 West Keltogg Boulevard Saint Paul, MN 55102 f � Re: Recommendations for Award of City of Saint Paul's $7,0�0,000 Water Revenue Refunding 8onds, Series 1997C Dear Mr. Bullert and Ms. Kantorowicz: Purpose of Issue The purpose of this issue is to refund on a long-term fixed interest rate basis the City's $10,000,000 Variable Rate Demand Bond issued in 1994. The Water Utility, through principal repayment and cash contributions, has lowered the principaf on this issue to $7,000,000. Tax-Exempt Interest Rate Market The municipal tax-exempt market has operated within a relatively narrow band since January 1. On January 1, the Bond Buyer's Index (BBI) was at 5.70%. 'The high point was in April at 5.88%; the low point is this week at 5.60%. Sale Resuits The City received 7(seven) bids on this sale. The bids were as fioliows: Rank Bidder Morgan Keegan (Memphis) First of America (Michigan) Piper Jaffray (Twin Cities) A. G. Edwards (St. Louis) Smith Bamey (New York) Dain Bosworth, Inc. (Twin Cities) Prudential Securities (Chicago) TIC % 4.88% 4.89% 4.92°!0 4.94% 4.95% 4.96% 4.98% SAINT PAUL, MN � MI[YNEAPOL[S, MN � BROOKF(EID, W[ � OVERLAND PARK, KS � WASHNGTON, DC � [OWA CtTY, lA City of Saint Paul Water Utility June 11, 1997 Page 2 The {owest bid of 4.88°fo was received by Morgan Keegan (Memphis underwriter). q,�-�19 This issue received significant national interest with underwriters bidding from New York, Chicago, Memphis, St. Louis, and Michigan as well as the Twin Cities. We require bidders to submit their bids on a'True Interest Rate" (TIC) basis, so as to refiect the present vatue ofi their bids and thereby ensure the Utility's award is based on the fowest cost to the Utility. We have enclosed a bid tabulation form for the issue summarizing the bid specifics and composition of each underxriting syndicate. Recommendation We recommend award of this sale to Morgan Keegan. Basis of Award The interest rates received on this issue are well below the planning esiimates used by the Water Utility and compare fiavorably with current market experience. The Utility had, through the first part of the year, used 5.4°!o for planning purposes based on earlier market experience. Generalty, the Utility has over the years hoped to finance this issue at under 5.0°/a. We have compared this issue's interest rates with other basic utilities selling nationally, with such comparisons yielding very favorable results for the Utility. Credit Rating The Utility received credit ratings of Aa2 and Aa from Moody's Investors Service and Standard & Poor's, respectively. Standard & Poor's upgraded the Utility's outlook to positive from stable. These are excel{ent ratings from both agencies. We are again appreciative of the opportunity to be of service to the Utility. We welcome any questions or comments on this report. Respectfuliy, (� � , � � ��^ ��_� �� � ` �;�_ � � ,�.�� David N. MacGilfivsay Principal Di�ector of Project Management /dmf Enctosures � � � � � � N O � \ O \ � C�J 0 � � a � � � -� 0 � 0 � � � c.n O � \ O � \ � � O � \ O C3� \ � J Percent � � � � �� � � � <� CD � CD Q � � � O � � CD � CD � r--r- °�' � � � Q � � N -� � � � X � � � � � � � � o � o � o � o � : v 85 E. SEVENTH PL.iCE, SUITE 100 r SA1NT PAUL, MN 55101-2143 61?-223-3000 FAX:67L223-3002 �� 9,� -'1 �°� SPRINGSTED Public Fv�mue Adviso�s $7,000,000 CITY OF SAINT PAUL, MINNESOTA WATER REVENUE REFUNDING BONDS, SERIES 1997C (BOOK ENTRY ONLY) : ,/ \ ��/�r 7 �� SALE: June11,1997 Moody's Rating: Aa2 Standard 8 Poor's Rating: AA interest Netlnterest Truelnterest Bidder Rates Price Cost Rate MORGAN KEEGAN & CO., INC. HUTCHINSON, SHOCKEY, ERLEY & COMPANY Mesirow Financial Inc. FIRST OF AMERICA SECURITIES MORGAN KEEGAN & CO., INC. HUTCHINSON, SHOCKEY, ERLEY 8� COMPANY AND ASSOCIATE 4.75°!0 1998-2006 4.80% 2007 4.90% 2008 5.00% 2009-2012 4.00% 4.a5°!o 4.25% 4.35% 4.45% 4.55% 4.65% 4.70°!0 4.75% 4.80% 4.90°fo 5.00% 5.10% 5.125% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2�08 2009-2010 2011 2�12 $6,984,775.00 $2,573,935.40 4.8805% $6,941,008.80 $2,576,373.70 4.8910% (Continued) SAIN7' PAOL, MN � MINNEAPOLIS, MN BROOKFIELD, WI � OVERLAND PARK, KS � WASHINGTON, DC � IOWA CITY, IA Y Interest Netlnterest Truelnterest ` B dder Rates Price Cost Rafe PIPER JAFFRAY INC. NORWEST fNVESTMENT SERVICES, INC. ROBERT W. BAIRD & COMPANY, INCORPORATED SECURIT(ES CORPORATION OF iOWA 3.90% 4.15% 4.30% 4.40% 4.50% 4.60% 4.70% 4.75% 4.80% 4.85% 4.90% 5,00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-2012 A.G. EDWARDS & SONS, INCORPORA7ED 4.75% 1998-2006 4.80% 2007-2012 SMiTH BARNEY CRONIN & COMPANY, 1NCORPORATED 4.00% 4.15% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.85% 4.90°/a 5.00% 5.10% 5.15% 5.20% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-2009 2010 2011 2012 DAIN BOSWORTH INCORPORATED PRUDENTIAL SECURITIES, WC. ABN AMRO CHICAGO CORPORATION DEAN WiTTER REYNOLDS INCORPORATED PAINEWEBBERINCORPORATED OPPENHEIMER & CO., INC. 4.75% 1998-2005 4.80% 2006 4.90% 2007 5.00% 2008-2012 3.75% 4.10% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.85% 4.90% 5.00% 5.10% 5.20% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-20�9 2010 2091-2012 $6,932,123.35 $6,930,000.00 $6,945,356.80 $6,962,715.35 $6,932,726.80 $2,586,921.86 $2,589,05479 $2,610,708.41 $2,608,83923 $2,622,669.66 4.9196% 4.9438% 4.9535% 4.9575% 4.9$09% (Continued) REOFFERING SCHEDULE OF THE PURCHASER Rate Year Yield 4.75% 4.75% 4.75°l0 4.75% 4.75% 4.75% 4.75% 4.75°!0 4.75% 4.80% 4.90°l0 5.00% 5.00% 5.00% 5.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3.75% 4.10% 4.30°l0 4.40°!0 4.50% 4.60% 4.70% 4.75% 4.80% 4.85% 4.95% 5.45% $.15% 520% 5.25% �,� -��� BBI: 5.60% Average Maturity: 7.53 Years �� -1 �� CITX OF SAINT PAUL Norm Colemurs, Mayor June 11, 1997 Council President Thune Members of the City Council 15 West Kellogg Blvd, 3rd Floor Saint Paul, Minnesota 55102 OFFICE OF THb MAYOR OFFICE OF FINANCIAL SERV[CES laseph ReiG. Director Shiriey A. Davi.s, Treasurer IRFASURYSEC!!ON IS West Kelingg Blvd. Telephone: 612-266-8830 Raom 760 Ciry HaII Facsimi[e: 6I2-266-88-f0 SaintPaut, Minnesota SS102 Dear Council President Thune and Members of the City Council: Please find attached four subsiitution pages for resolution 97-719 accepting the winning proposal and awarding the bid for the $7,000,000 Water Revenue Refunding Bonds, Series 1997C, which is before you this afternoon. Bernie Bullert and I will be prepared to make a brief presentation on the impact of these changes. The changes simply reflect the pricing which took place this morning. If you have any questions concerning these changes, do not hesitate to call me at 266-8836. Sincerely, � � Martha Kantorowicz ��-��q 1 WHEREAS, "Aolder" as used herein means the person in 2 whose name a Bond is registered on the regis�ration books of the 3 City maintained by the registrar appointed as provided in a paragraph 8(the "Bond Registrar"); and 5 6 7 9 10 li 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 WHEREAS, pursuant to Minnesota Statutes, Section a75.60, Subdivision 2(9), public sale requirements do not apply to the Bonds, because the City has retained an independent financial advisor and this Council has determined to sell the Bonds by private negotiation, and the City has instead au�horized a competitive sale without publication of notice thereof as a form of private negotiation; and TdHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to provide certain continuing disclosure with respect to the Bonds; and WHEREAS, proposals for the Bonds have been solicited by Springsted Incoxporated pursuant to an Official Statement and Terms of Proposal therein: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as follows: 6 1. Acceptance of Proposal. The proposal of Morgan, Keegan & Company, Inc. (the "Purchaser"), to purchase $7,000,000 Water Revenue Refunding Bonds, Series 1997C, of the City (the �'BOnds" or "1997 Bonds", or individually a"Bond" or "1997 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 o£ $6,984,775.00, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser. The Director, Office of Financial Services, or his designee, is directed to retain the deposit of the Purchaser and to forthwith return to the others making proposals their good faith checks or drafts. 2. Title• Oriciinal Issue Date• Denominations; Maturities. The Bonds shall be titled "Water Revenue Refunding Bonds, Series 1997C��, shall be dated July 1, 1997, as the date of original issue and shall be issued forthwith on or a£ter 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, sha11 be in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on 353732.3 4 �c � —� t1 multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: Year 1998 1999 2000 2001 2�02 2003 2004 2005 Amount $730,000 800,000 420,000 225,000 315,OOD 660,000 690,OOD 640,000 Year 2006 2007 2008 2009 2010 2011 2012 Amount $3?5,000 425,000 595,000 165,000 240,000 400,000 350,000 3. Purpose• RefundinQ Findincrs. The Bonds (together with other available funds appropriated) shall provide funds for a current retunding of the Refunded Bonds (the "Refunding"). The 1994 Bonds were issued to finance improvements to the Water i3tility (the "Improvements"). The proceeds of the Bonds shall be deposited and used as provided in paragraph 17. The total cost of the Refunding, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. It is hereby found, determined and declared that (1) the Refunding is pursuant to Minnesota Statutes, Section 475.67, and (2) the Refunding is necessary or desirable for the issuance of obligations bearing a fixed rate of interest in the case of the 1994 Bonds, which bear interest aC a rate varying periodically. 4. Interest. The Bonds shall bear interest payable semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 1997, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturitv Year Interest Rate Maturity Year Interest Rate 1998 1999 2000 2001 2002 2003 2004 2005 4 4 4 4 4 4 4 4 750 75 75 75 75 75 75 75 2006 2007 2008 2009 2010 2011 2012 4 4 4 5 5 5 5 750 80 90 00 00 00 00 5. Descrit�tion ot the CU1o1�a1 c:erLi=ica�es ac�u Global Book-Entrv Svstem. Upon their original issuance the Bonds will be issued in the form of a single Global CerCificate for 353T32.3 5 ��-�19 1 2 3 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3Q 31 32 33 34 35 36 37 38 39 40 41 42 43 (but not if a City officer is the paying agent) or an escrow agent for such 1997 Bonds on or before that date a sum suf£icient for the payment thereof in £ull; or i£ any 1997 Bond should not be paid when due, it may nevertheless be discharged by depositing with the paying agent (but not i£ a City officer is the paying agent) or an escrow agent a sum sufficient £or the payment thereof in full. The City may also discharge any prepayable 1997 Bonds which are called for redemption on any date when they are prepayable according to their terms, by depositing with the paying agent (but not if a City officer is the paying agent) or an escrow agent on or before that date an amount equal to the principal, interest and redemption premium, i£ any, which are then due, provided that notice of such redemption has been duly given as provided in resolution. The City may also aC any time discharge the issue of the 1997 Bonds in whole or in part by complying with the applicable provisions of Minnesota Statutes, Section 475.67, and any amendments thereto, except that the funds deposited in escrow in accordance with said provisions may buC need not be in whole or part proceeds of advance refunding bonds. The City may discharge 1997 Bonds as herein provided without the consent of any Bondholders. 26. Fiscal Year. As used in this resolution the words '�fiscal year" shall mean the twelve (12) month period beginning on January 1 of each year and ending on December 31 of the same year. Should it be deemed advisable at some later date to change the fiscal yearly basis, the same may be done by proper actions to that effect, which change shall not constitute an amendment or modification o£ this resolution. 27. Appropriation. It is hereby found, determined and declared that on the date this resolution is adopted, there is more in the Reserve Account than is required upon the discharge of the Refunded Bonds. The difference is hereby appropriated to the 1997 Refunding Account_ The Board's additional initial appropriation to the 1997 Refunding Account necessary to accomplish the current refunding of the Refunded Bonds is hereby recognized and approved. 28. Refunded Bonds; Securitv. Unti1 retirement of the Refunded Bonds, a11 provisions hereCo£ore made for the security thereof shall be observed by the City and all of its officers and agents. 353732.3 45 ��-��� 29. Redemotion of Refunded Bonds. The Refunded Bonds sha11 be paid upon early redemption prior to October 1, 1997, all in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached hereto as Exhibit A, which terms and conditions are hereby approved and incorporated herein by reference. Notice of Call for Redemption in substantially such form shall be mailed to the paying agent and shall be given by the paying agent to the holders of the Refunded Bonds at least ten (10) days prior to the redemption date in the manner provided for the Refunded Bonds. 30. Records and Certificates. The of£icers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and af£airs of the City, and such other a£fidavits, certificates and information as are required to show the facts relating to the legality and markeCability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, ancl all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 31. Neaative Covenants as to Use of Proceeds and Improvements. The City hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or permit them to be used, or to enter inCo any deferred payment arrangements for the cost of the Improvements, in such a manner as to cause the Bonds to be "private activity bonds" within tihe meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Bonds that would cause them to be private activity bonds, and the average term of the Bonds is not longer than reasonably necessary for the governmenCal purpose of the issue. The City hereby covenants not to use the proceeds of the Bonds in such a manner as to cause the Bonds to be "hedge bonds" within the meaning of Section 149(g) of the Code. 32. Tax-Exemnt Status of the Bonds• Rebate; Elections_. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation requirements relating to temporary periods £or investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 353732.3 4 6