BY COUNCILOR HOGG:01-0238R
RESOLUTION PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF $1,405,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2001A, OF THE CITY OF DULUTH, MINNESOTA; ESTABLISHING THE TERMS AND FORM THEREOF; CREATING A DEBT SERVICE ACCOUNT THEREFOR; AND AWARDING THE SALE THEREOF.
BE IT RESOLVED, by the city council of the city of Duluth, Minnesota (the "City"), as follows:
Section 1. Bond Purpose and Authorization.
1.01 A. Under and pursuant to the provisions of Chapter 475 of Minnesota
Statutes and other pertinent provisions of said Statutes and the home rule
charter of the City, the City is authorized to issue its general obligation
bonds to finance the cost of local public improvements, and the city council
may pledge the full faith and credit and taxing powers of the City for
the payment of the principal and interest on such indebtedness.
B. The city council has, by resolutions adopted on the following dates, ordered the following local public improvements, as more fully described in reports filed with the city clerk by the Special Assessment Board pursuant to and in accordance with Chapter IX of the City Charter (the "Public Improvements"); and the Council determined to defray the following portions of the cost of the improvements set forth below to be assessed against benefitted property:
|99-0816||12/06/99||$370,479||Maple Ridge Phase 2|
|99-0871||12/20/99||21,028||Greysolon Road-2" grinder pump system|
|00-0253||04/10/00||392,900||Woodlawn Street-water, gas, sanitary sewer from 48½ Ave. E. to 52nd Ave. E.|
|00-0199||04/10/00||42,220||Sidewalks 2000 and pavement restoration|
|00-0503||07/24/00||239,800||Featherstone Drive and Lane in Woodcrest Drive|
|00-0539||08/14/00||3,000||48th Avenue East from Peabody to 140 feet north|
|00-0810||12/04/00||225,000||Fond du Lac sanitary sewer system construction|
|00-0808||12/04/00||21,500||Sanitary sewer in 41st Avenue East from Regent St. to alley|
|00-0830||12/18/00||30,000||Sanitary sewer on 38th Avenue West from 4th-5th alley|
|00-0673||10/10/00||21,500||Sanitary sewer on Seventh Avenue West from Second Alley to 75' north|
C. Pursuant to the authority herein recited, the City authorizes and directs
the issuance and sale of $1,405,000 General Obligation Improvement Bonds,
Series 2001A, to be dated April 1, 2001, as the date of original issue
D. Evensen Dodge, Inc., financial consultant to the City, has given notification by mail to at least five firms determined by Evensen Dodge, Inc. to be prospective bidders on the Bonds at least two days (omitting Saturdays, Sundays and legal holidays) before the date set for receipt of bids on the Bonds. All actions of the mayor, the clerk and Evensen Dodge, Inc. taken with regard to the sale of the Bonds are hereby ratified and approved.
1.02 Pursuant to such solicitation for bids for the sale of the Bonds, the City Council has received and considered all bids presented pursuant to the official terms of offering and has determined that the most favorable bid is that of ____________________________________ of ____________________________ (the "Purchaser"), to purchase the Bonds at a cash price of $_____________, plus accrued interest on the total principal amount from April 1, 2001, to the date of delivery of the Bonds and upon condition that the Bonds mature and bear interest at the times and annual rates set forth in Section 2. The City, after due consideration, finds such offer reasonable and proper and the offer of the Purchaser is hereby accepted. The mayor and the city clerk are authorized and directed to execute on the part of the City a contract for the sale of the Bonds in accordance with the Purchaser's bid. The city treasurer is directed to deposit the good faith check of the successful bidder.
Section 2. Terms of Bonds.
2.01 A. The Bonds to be issued hereunder shall be dated April 1, 2001,
as the date of original issue, shall be issued in the denomination of $5,000
each, or any integral multiple thereof, in fully registered form and lettered
and numbered R-1 and upward. The Bonds shall mature on February 1 in the
respective years and amounts and shall bear interest at the annual rates
stated as follows:
B. The Bonds maturing on February 1 in the years ____ and ____ shall be
subject to mandatory redemption prior to maturity pursuant to the requirements
of this Section 2.01B at a redemption price equal to the stated principal
amount, as hereinafter provided, plus interest accrued thereon to the redemption
date, without premium. The Bond Registrar, as designated below, shall select
for redemption, by lot or other manner deemed fair, on February 1 in each
of the following years, the following stated principal amounts:
(1) For Bonds maturing on February 1, ____ (the "____ Term Bonds"):
The remaining $______ stated principal amount of the ____ Term Bond shall be paid at maturity on February 1, ____.
(2) For Bonds maturing on February 1, ____ (the "____ Term Bonds"):
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ST. LOUIS
CITY OF DULUTH
GENERAL OBLIGATION IMPROVEMENT BOND
|Maturity Date||Date of
|February 1, ____||April 1, 2001|
REGISTERED OWNER: CEDE &
The City of Duluth, in St. Louis County, Minnesota (the "City"), for value received, promises to pay to the registered owner specified above, or registered assigns, the principal amount specified above on the maturity date specified above, and to pay interest on said principal amount to the registered owner hereof from April 1, 2001, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, until the principal amount is paid or discharged, said interest being at the rate per annum specified above. Interest is payable semiannually on February 1 and August 1 of each year (each referred to herein as an "Interest Payment Date") commencing on August 1, 2001. Both principal and interest are payable in lawful money of the United States of America by check or draft at the office of Wells Fargo Bank Minnesota, National Association, in Minneapolis, Minnesota, as the registrar, paying agent, transfer agent and authenticating agent (the "Bond Registrar"), or at the office of such successor bond registrar as may be designated by the city council. The Bond Registrar shall make the interest payment with respect to this Bond directly to the registered owner hereof shown on the bond registration records maintained on behalf of the City by the Bond Registrar at the close of business on the 15th day of the month next preceding the Interest Payment Date (whether or not a business day), at such owner's address shown on said bond registration records, without, except for payment of principal on the Bond, the presentation or surrender of this Bond, and all such payments shall discharge the obligations of the City to the extent of the payments so made. Payment of principal shall be made upon presentation and surrender of this Bond to the Bond Registrar when due. For the prompt and full payment of such principal and interest as they become due, the full faith and credit of the City are irrevocably pledged.
This Bond is one of a series issued by the City in the aggregate amount of $1,405,000, all of like date and tenor, except for number, denomination, maturity date and interest rate, pursuant to Minnesota Statutes, Chapter 475, the City Charter and other pertinent provisions of said statutes and a resolution adopted by the governing body of the City on March 22, 2001 (the "Resolution"), for the purpose of financing local public improvements, which obligations and interest thereon will be payable from special assessments levied or to be levied against property specially benefitted by local improvements.
The Bonds maturing in the years ____ and ____ shall be subject to mandatory redemption and redeemed in installments as provided in the Resolution, at par plus accrued interest to the date of redemption.
The Bonds of this series maturing in the years 2002 through 2009 are not subject to redemption before maturity, but those maturing, or subject to mandatory redemption, in the year 2010 and in subsequent years are each subject to redemption and prepayment at the option of the City on February 1, 2009, and on any date thereafter upon 30 days' notice, in whole or in part, and if in part, in such order of maturities as selected by the City, and by lot as to Bonds maturing in the same year, at a price equal to the principal amount plus accrued interest to the redemption date.
Prior to the date fixed for redemption and prepayment of any Bonds, notice of redemption shall be mailed to each registered owner of a Bond to be redeemed. No defect or failure in such mailed notice shall affect the validity of the proceedings for redemption of any Bond not affected by such failure or defect. If any Bond is redeemed in part, upon surrender of the Bond being redeemed, the City shall deliver or cause to be delivered to the registered owner of such Bond a Bond in like form in the principal amount equal to that portion of the Bond so surrendered not being redeemed.
The Bonds of this series are issued as fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof. Subject to limitations set forth in the Resolution, this Bond is transferable by the registered owner hereof upon surrender of this Bond for transfer at the principal corporate office of the Bond Registrar, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Bond Registrar and executed by the registered owner hereof or the owner's attorney duly authorized in writing. Thereupon the City shall execute and the Bond Registrar shall authenticate, if required by law and this Resolution, and deliver, in exchange for this Bond, one or more new fully registered bonds in the name of the transferee, of an authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of this Bond, of the same maturity and bearing interest at the same rate.
IT IS CERTIFIED AND RECITED that all acts and conditions required by the Charter of the City and by the laws and the Constitution of the State of Minnesota to be done, and to exist precedent to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done and do exist in form, time, and manner as so required; that all taxable property within the corporate limits of the City is subject to the levy of ad valorem taxes to the extent needed to pay the principal hereof and the interest hereon when due, without limitation as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Bond Registrar's Authentication Certificate hereon shall have been executed by the Bond Registrar by one of its authorized representatives.
IN WITNESS WHEREOF, the city of Duluth, by its city council, has caused this Bond to be executed in its name by the signatures of the mayor and the city clerk.
Date of Authentication: __________________
BOND REGISTRAR'S AUTHENTICATION CERTIFICATE
The Bond Registrar confirms that the books reflect the ownership of a Bond registered in the name of the owner named above, in the principal amount stated above, and this Bond is one of the Bonds of the series issued pursuant to the Resolution hereinabove described.
WELLS FARGO BANK MINNESOTA,
This Bond must be registered as to both principal and interest in the name of the owner on the books to be kept by Wells Fargo Bank Minnesota, National Association, as Bond Registrar. No transfer of this Bond shall be valid unless made on said books by the registered owner or the owner's attorney thereunto duly authorized and similarly noted on the registration books. The ownership of the unpaid principal balance of this Bond and the interest accruing thereon is registered on the books of the City in the name of the registered owner last noted below.
|Date||Registered Owner||Signature of
||Cede & Co.
c/o The Depository Trust Company
55 Water Street
New York, NY 10041
Federal Taxpayer I.D. No.: 13-2555119
BOND COUNSEL OPINION
I certify that attached hereto is a full, true, and correct copy of the legal opinion rendered by bond counsel on the issuance of the Bonds, dated as of the original date of delivery of and payment for the Bond.
FOR VALUE RECEIVED, the undersigned sells, assigns, and transfers unto ______________________________
____________________ Social Security or Other
____________________ Identifying Number of Assignee
the within Bond and all rights thereunder and does hereby irrevocably constitute and appoint _______________________________ _____________________________________________ attorney to transfer the said Bond on the books kept for registration thereof with full power of substitution in the premises.
NOTICE: The signature of this assignment must correspond with the name of the registered owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever.
(Bank, Trust Company, member of
National Securities Exchange)
Section 3. Revenues, Accounts and Covenants.
3.01 The city council covenants and agrees with the holders of the Bonds
and with its taxpayers that it will assess against benefitted property
the cost of the improvements to the City for the Public Improvements in
an amount which is not less than 20% of the costs of such projects financed
by the proceeds of the Bonds allocable to the Public Improvements. The
city council further covenants and agrees that, with due diligence, it
will complete the special assessment process, including any and all supplemental
assessments or reassessments that may be required to lawfully assess the
3.02 Upon payment of the purchase price of the Bonds, the City shall credit the proceeds from the sale of the Bonds to a separate construction account (the "2001 Projects Account") within the Special Assessment Capital Projects Fund for the Public Improvements. The proper City officers are authorized and directed to pay out of such construction account from time to time as required, upon presentation of properly verified vouchers or statements of account, such amount or amounts as may be required to pay the cost of the improvements described in Section 1.01 and the costs of issuance of the Bonds.
3.03 A separate account within the Special Assessment Debt Service Fund maintained by the City is hereby created and is designated the "2001 Improvement Bond Account." The money in such account shall be used for no purpose other than the payment of principal and interest on the Bonds; provided, however, that if any payment of principal or interest shall become due when there is not sufficient money in said account, the treasurer shall pay the same from any other fund of the City and said fund shall be reimbursed out of said account. Into the 2001 Improvement Bond Account shall be paid from the proceeds of the Bonds unused discount, if any, capitalized interest in the amount of $-0-, plus the amount of accrued interest on the Bonds, all special assessments levied for the projects listed in Section 1.01 hereof and the ad valorem taxes levied, if any, pursuant to Section 3.04 hereof.
3.04 It is estimated that the special assessments levied and appropriated to the 2001 Improvement Bond Account will be received at the times and in amounts not less than 5% in excess of the amounts needed to meet when due the principal and interest payments thereon and, accordingly, no tax is presently levied for this purpose. It is recognized, however, that the City's liability on the Bonds is not limited to the revenues so pledged, and the City Council covenants and agrees that it will levy upon all taxable property within the City, and cause to be extended, levied and collected, any taxes found necessary for full payment of the principal of and interest on the Bonds, without limitation as to rate or amount.
3.05 Proceeds of the Bonds on deposit in the 2001 Projects Account and the 2001 Improvement Bond Account may, in the discretion of the city treasurer, be invested in securities permitted by Minnesota Statutes, Chapter 118A; provided, that any such investment shall mature at such time and in such amounts as will permit the payment of costs for the improvement program and/or payment of the principal and interest on the Bonds when due.
Section 4. Tax Covenants; Miscellaneous.
4.01 The city council covenants and agrees with the holders of the Bonds
that the City will (i) take all action on its part necessary to cause the
interest on the Bonds to be excluded from gross income for federal income
taxes including, without limitation, restricting, to the extent necessary,
the yield on investments made with the proceeds of the Bonds and investment
earnings thereon, making required payments to the federal government, if
any, and maintaining books and records in a specified manner, where appropriate,
and (ii) refrain from taking any action which would cause interest on the
Bonds to be subject to federal income taxes, including, without limitation,
refraining from spending the proceeds of the Bonds and investment earnings
thereon on certain specified purposes.
4.02 A. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued. To this effect, any proceeds of the Bonds and any sums from time to time held in such debt service account (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any applicable temporary periods of minor portion made available under the federal arbitrage regulations.
B. In addition, the proceeds of the Bonds and money in such debt service account 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 Bonds to be federally guaranteed within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code").
C. The City hereby covenants not to use the proceeds of the Bonds, or to cause or permit them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code.
4.03 A. Pursuant to Section 1.148-7(d) of the Treasury Regulations, relating to exception from rebate, the City hereby covenants that with respect to the gross proceeds of the Bonds, the following schedule will be met: (i) at least 15% of the gross proceeds of the Bonds will be allocated to expenditures for the governmental purpose of the Bonds within six months of the date of issue of the Bonds; (ii) at least 60% of such proceeds will be allocated for such purposes within the one-year period of such date; and (iii) 100% of such proceeds will be allocated for such purposes within the 18-month period beginning on such date; subject to an exception for reasonable retainage of 5% of the available proceeds of the Bonds, and that 100% of the available proceeds of the Bonds will be allocated within 30 months from the date of issue of the Bonds.
B. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this section.
Section 5. Continuing Disclosure. The City acknowledges that the Bonds are subject to the continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (17 C.F.R. §240.15c2-12) (the "Rule"). The Rule governs the obligations of certain underwriters to require that issuers of municipal bonds enter into agreements for the benefit of the bondholders to provide continuing disclosure with respect to the Bonds. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit underwriters of the Bonds to comply with the Rule, which will enhance the marketability of the Bonds, the mayor and the clerk are hereby authorized and directed to execute a continuing disclosure certificate substantially in the form of the certificate currently on file in the office of the city clerk.
Section 6. Certificate of Proceedings.
6.01 The city clerk is directed to file with the county auditor a certified
copy of this Resolution and such other information as the county auditor
may require, and to obtain from the county auditor a certificate stating
that the Bonds herein authorized have been duly entered on his register.
6.02 The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to bond counsel certified copies of all proceedings and records of the City relating to the authorization and issuance of the Bonds and other affidavits and certificates as may reasonably be requested to show the facts relating to the legality and marketability of the Bonds as such facts appear from the official books and records of the officers' custody or otherwise known to them. All of such certified copies, certificates and affidavits, including any heretofore furnished, constitute representations of the City as to the correctness of facts recited therein and the actions stated therein to have been taken.
6.03 The officers of the City are hereby authorized and directed to certify that they have examined the official statement prepared and circulated in connection with the sale of the Bonds and that to the best of their knowledge and belief the official statement is a complete and accurate representation of the facts and representations made therein as of the date of the official statement.