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HomeMy WebLinkAboutResolution No. 2003-021 $6,570,000 GO TIF Refunding Bonds Series 2003B RESOLUTION NO. 2003-21 CERTIFICATION OF MINUTES RELATING TO $6,570,000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2003B Issuer: City of Edina, Minnesota Governing body: City Council Kind, date, time and place of meeting: A regular meeting held on February 18, 2003, at 7:00 o'clock P.M., at the Edina City Hall. Members present: Scot Housh, James Hovland, Michael Kelly,Linda Masica Members absent: Dennis Maetzold Documents attached: Minutes of said meeting including (pages): 1 through 18 RESOLUTION RELATING TO $6,570,000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 200313; AWARDING THE SALE, FIXING THE FORM AND DETAILS AND PROVIDING FOR THE EXECUTION AND DELIVERY THEREOF AND SECURITY THEREFOR I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of the corporation in my legal custody, from which they have been transcribed; that the documents are a correct and complete transcript of the minutes of a meeting of the governing body of the corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at the meeting, insofar as they relate to the obligations; and that the meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above,pursuant to call and notice given as required by law. WITNESS my hand officially as such recording officer thist day of February, 2003. oQ Debra Mangen, Crty Clerk It was reported that five (5)proposals had been received prior to 12:00 Noon, Central Time today for the purchase of the $6,570,000 General Obligation Tax Increment Refunding Bonds, Series 2003B of the City in accordance with the Official Statement distributed by the City to potential purchasers of the Bonds. The proposals have been read and tabulated, and the terms of each have been determined to be as follows: Bid for Interest Net Interest Name of Bidder Principal Rates Cost [See attached] BID TABULATION $6,640,000"" General Obligation Tax Increment Refunding Bonds, Series 2003B CITY OF EDINA, MINNESOTA SALE: February 18, 2003 AWARD: ADVEST INC. RATING: Moody's Investors Service"Aaa" BBI: 4.83% Standard &Poor's"AAA" NET TRUE NAME OF BIDDER MATURITY RATE REOFFERING PRICE INTEREST INTEREST (February 1) YIELD COST RATE ADVEST INC. 2004 2.000% 1.128% $6,719,461.90 $187,136.02 1.5339% New York, New York 2005 2.000% 1.374% 2006 2.500% 1.749% U.S. BANCORP PIPER JAFFRAY 2004 2.500% $6,754,340.80 $187,825.87 1.5350% Minneapolis, Minnesota 2005 2.500% W LS FARGO BROKERAGE SERVICES LLC 2006 2.500% neapolis, Minnesota CRONIN &COMPANY, INC. 2004 2.000% $6,691,745.50 $189,987.83 1.5632% Minneapolis, Minnesota 2005 2.000% 2006 2.000% RBC DAIN RAUSCHER INC. 2004 1.500% $6,676,146.20 $194,839.22 1.6050% Minneapolis, Minnesota 2005 2.000% 2006 2.000% MILLER JOHNSON STEICHEN KINNARD 2004 2.000% $6,674,646.00 $207,087.33 1.7071% INVESTMENT SECURITIES, INC. 2005 2.000% Minneapolis, Minnesota 2006 2.000% *Subsequent to bid opening the issue size was decreased to$6,570,000 with the 2004 maturity decreased$20,000 to$2,325,000,the 2005 maturity decreased $20,000 to$2,570,000, and the 2006 maturity decreased$30,000 to$1,675,000 in maturity value. Adjusted Price-$6,648,492.20 ,#ted Net Interest Cost-$184,784.88 ted TIC- 1.5330% L E A D E R S I N P U B L I C F I N A N C E E H L E R S 3060 Centre Point Drive, Roseville, MN 55113-1105 651.697.8500 fax 651.697.8555 www.ehlers-inc.com & ASSOCIATES INC Offices in Roseville, MN, Brookfield, WI and Naperville, IL T, 1 Councilmember Masica then introduced the following resolution and moved its adoption: RESOLUTION RELATING TO $6,570,000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 200313; AWARDING THE SALE, FIXING THE FORM AND DETAILS AND PROVIDING FOR THE EXECUTION AND DELIVERY THEREOF AND SECURITY THEREFOR BE IT RESOLVED by the City Council (the"Council") of the City of Edina, Minnesota(the"City"), as follows: Section 1. Recitals, Authorization and Sale of Bonds. 1.01. Authorization and Outstanding Bonds. The City has presently outstanding its General Obligation Tax Increment Refunding Bonds, Series 1993, initially dated as of May 1, 1993 (the "Prior Bonds"). This Council, by a resolution adopted on January 21, 2003, authorized the sale of General Obligation Refunding Bonds, Series 2003B (the "Bonds"), of the City,the proceeds of which would be used,together with any additional funds of the City which might be required,to refund the Prior Bonds maturing on or after February 1, 2004 (the"Refunded Bonds"). 1.02. Sale of Bonds. The City has retained Ehlers & Associates, Inc., an independent financial advisor,to assist the City in connection with the sale of the Bonds. The Bonds are being sold pursuant to Minnesota Statutes, Section 475.60, Subdivision 2,paragraph (9),without meeting the requirements for public sale under Minnesota Statutes, Section 475.60, Subdivision 1. Pursuant to the Terms and Conditions of Sale for the Bonds, five (5)proposals for the purchase of the Bonds were received at or before the time specified for receipt of proposals. The proposals have been publicly read and considered, and the purchase price, interest rates and net interest cost under the terms of each proposal have been determined. The most favorable proposal received is that of Advest Inc., of New York,New York(the "Purchaser"), to purchase the Bonds at a price of$6,648,492.20, the Bonds to bear interest at the rates set forth in Section 3.01. The proposal is hereby accepted, and the Mayor and the City Manager are hereby authorized and directed to execute a contract on the part of the City for the sale of the Bonds with the Purchaser. The good faith checks of the unsuccessful bidders shall be returned forthwith. 1.03. Performance of Requirements. The City is authorized by the Act to issue and sell the Bonds to secure the Bonds by the covenants and agreements hereinafter set forth. All acts, conditions and things which are required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the valid issuance of the Bonds having been done, existing,having happened and having been performed, it is now necessary for this Council to establish the form and terms of the Bonds,to provide security therefor and to issue the Bonds forthwith. Section 2. Form of Bonds. The Bonds shall be prepared in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDINA GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND, SERIES 2003B Date of Interest Rate Maturity Orijzinal Issue CUSIP % February 1, March 1, 2003 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS THE CITY OF EDINA, Hennepin County, Minnesota(the "City"), acknowledges itself to be indebted and, for value received,hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above, on the maturity date specified above,without option of prior payment,with interest thereon from the date of original issue specified above, or from the most recent interest payment date to which interest has been paid or duly provided for, at the annual rate specified above. Interest hereon is payable on February 1 and August 1 in each year, commencing August 1, 2003,to the person in whose name this Bond is registered at the close of business on the 15th day(whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof, are payable in lawful money of the United States of America by check or draft of U.S. Bank National Association, in St. Paul, Minnesota, as Bond Registrar, Transfer Agent and Paying Agent(the "Bond Registrar"), or its successor designated under the Resolution described herein. This Bond is one of an issue in the aggregate principal amount of$6,570,000 (the "Bonds") all of like date and tenor except as to serial number, interest rate and maturity date, issued pursuant to a resolution adopted by the City Council on February 18, 2003 (the "Resolution"), for the purpose of refunding certain of the City's outstanding general obligation bonds and is issued pursuant to and in full conformity with the provisions of the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statutes, Section 00 469.178 and Chapter 475. This Bond is payable primarily from tax increments to be derived from tax increment financing districts established by the Housing and Redevelopment Authority -2- in and for the City of Edina(the "Districts") which have been pledged to the payment of the Bonds by the Resolution. In addition, for the full and prompt payment of the principal and interest on the Bonds as the same become due,the full faith, credit and taxing power of the City have not been and are irrevocably pledged. The Bonds are issuable only as fully registered bonds in denominations of$5,000 or any multiple thereof, of single maturities.The Bonds are payable on their respective stated maturity dates without option of prior payment. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by his attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or his attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange, the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount,bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof,whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. • IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist,to happen and to be performed precedent to and in the issuance of this Bond in order to make this Bond a valid and binding general obligation of the City according to its terms, have been done, do exist,have happened and have been performed in regular and due form as so required; that prior to the issuance hereof the City has pledged and appropriated to a sinking fund established for the payment of the Bonds tax increments to be derived by the City from the Districts; that, if necessary for the payment of principal and interest on the Bonds, ad valorem taxes are required to be levied upon all taxable property in the City, which levy is not limited as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or statutory 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 Certificate of Authentication hereon shall have been executed by the Bond Registrar by the manual signature of the Bond Registrar, or in the event the City Finance Director is no longer acting as Bond Registrar, one of the authorized representatives of the Bond Registrar. IN WITNESS WHEREOF, the City of Edina, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed by the facsimile signatures of the Mayor 01 and the City Manager and has caused this Bond to be dated as of the date set forth below. -3- iCITY OF EDINA City Manager Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. Date of Authentication: U.S. BANK NATIONAL ASSOCIATION St. Paul, Minnesota, as Bond Registrar By Authorized Representative The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM——as tenants UNIF TRANS MIN ACT. . . . . . . Custodian. . . . . . . . in common (Cust) (Minor) TEN ENT——as tenants under Uniform Transfers to Minors by the entireties Act. . . . . . . . . . . . . . . . . . . . . . (State) JT TEN—— as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used. IF -4- ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: NOTICE: The signature(s)to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular,without alteration, enlargement or any change whatsoever. Signature(s) must be guaranteed by an "eligible guarantor institution" • meeting the requirements of the Bond Registrar, which requirements include membership or participation in the Securities Transfer Association Medalion Program(STAMP) or such other"signature guaranty program" as may be determined by the Bond Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. [End of Bond Form] Section 3. Bond Terms, Execution and Delivery. 3.01. Maturities, Interest Rates, Denominations, Payment, Dating of Bonds. The City shall forthwith issue and deliver the Bonds,which shall be denominated"General Obligation Tax Increment Refunding Bonds, Series 2003B." The Bonds shall be dated as of March 1, 2003, shall be issuable in the denominations of$5,000 or any integral multiple thereof, shall mature on February 1 in the years and amounts set forth below, without option of prior payment, and Bonds maturing in such years and amounts shall bear interest from date of issue until paid at the rates per annum set forth opposite such years and amounts as follows: -5- Year Amount Rate 2004 $2,325,000 2.00% 2005 2,570,000 2.00 2006 1,675,000 2.50 The Bonds shall be issuable only in fully registered form, of single maturities. The interest thereon and, upon surrender of each Bond at the principal office of the Registrar described herein, the principal amount thereof, shall be payable by check or draft issued by the Registrar. Each Bond shall be dated by the Registrar as of the date of its authentication. 3.02. Interest Payment Dates. Interest on the Bonds shall be payable on February 1 and August 1 in each year, commencing August 1, 2003,to the owners thereof as such appear of record in the bond register as of the close of business on the fifteenth day of the immediately preceding month,whether or not such day is a business day. Interest on the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months and will be rounded pursuant to the rules of the Municipal Securities Rulemaking Board. 3.03. Registration. The City shall appoint, and shall maintain, a bond registrar, transfer agent and paying agent(the Registrar). The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: • (a) Register. The Registrar shall keep at its principal office a bond register in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender to the Registrar for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing,the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date. (c) Exchange of Bonds. Whenever any Bond is surrendered by the registered owner for exchange,the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount, interest rate and maturity, as requested by the registered owner or the owner's attorney duly authorized in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be 10 promptly cancelled by the Registrar and thereafter disposed of as directed by the City. -6- (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer,the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith,to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of,the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the City upon such Bond to the extent of the sum or sums so paid. (g) Taxes,Fees and Charges. For every transfer or exchange of Bonds,the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be lost, stolen or destroyed, the Registrar shall deliver a new Bond of like amount, number, interest rate,maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond lost, stolen or destroyed,upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond lost, stolen or destroyed,upon receipt by the Registrar of evidence satisfactory to it that such Bond was lost, stolen or destroyed, and of the ownership thereof, and upon receipt by the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed Bond has already matured in accordance with its terms, it shall not be necessary to issue a new Bond prior to payment. 3.04. Appointment of Initial Registrar. The City hereby appoints U.S. Bank National Association in St. Paul, Minnesota, as the initial Registrar. The Mayor and City Finance Director are authorized to execute and deliver, on behalf of the City, a contract with U.S. Bank National Association, as Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove any Registrar upon thirty(30) days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar. On or before each principal or interest due date, without further order of this Council,the City Finance Director -7- shall transmit to the Registrar from the 2003B General Obligation Tax Increment Refunding Bond Fund described in Section 4 hereof, moneys sufficient for the payment of all principal and interest then due.. 3.05. Redemption. The Bonds are not subject to redemption prior to maturity. 3.06. Preparation and Delivery. The Bonds shall be prepared under the direction of the City Manager and shall be executed on behalf of the City by the signatures of the Mayor and the City Manager; provided that said signatures may be printed, engraved, or lithographed facsimiles thereof. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Bonds shall cease to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes,the same as if such officer had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on such Bond has been duly executed by the manual signature of the Registrar, or in the event the City Finance Director is no longer acting as Registrar, an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so executed and authenticated, they shall be delivered by the City Manager to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser shall not be obligated to see to the application of the purchase price. 3.07. Securities Depository. (a) For purposes of this Section the following terms shall have the following meanings: "Beneficial Owner" shall mean, whenever used with respect to a Bond,the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or such person's subrogee. "Cede & Co." shall mean Cede & Co.,the nominee of DTC, and any successor nominee of DTC with respect to the Bonds. "DTC" shall mean The Depository Trust Company of New York,New York. "Participant" shall mean any broker-dealer,bank or other financial institution for which DTC holds Bonds as securities depository. "Representation Letter" shall mean the Representation Letter from the City to DTC previously executed by the City and on file with DTC. (b) The Bonds shall be initially issued as separately authenticated fully registered bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon initial issuance,the ownership of such Bonds shall be registered in the bond register in the name of Cede & Co., as nominee of DTC. The Registrar and the City may treat -8- DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving any notice permitted or required to be given to registered owners of Bonds under this resolution, registering the transfer of Bonds, and for all other purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the bond register as being a registered owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any Participant, with respect to the payment by DTC or any Participant of any amount with respect to the principal of or interest on the Bonds, with respect to any notice which is permitted or required to be given to owners of Bonds under this resolution,with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond, only to Cede & Co. in accordance with the Representation Letter, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than DTC shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co.,the Bonds will be transferable to such new nominee in accordance with paragraph(d)hereof. (c) In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bonds in the form of bond certificates, the City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of Bonds in the form of certificates. In such event,the Bonds will be transferable in accordance with paragraph(d) hereof. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and the Registrar and discharging its responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with paragraph(d) hereof. (d) In the event that any transfer or exchange of Bonds is permitted under paragraph(b)or(c)hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this resolution. In the event Bonds in the form of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as owner of all the Bonds, or another securities depository as owner of all the Bonds, the provisions of this resolution shall also apply to all matters relating thereto, including, without limitation,the printing of such Bonds in the form of bond certificates and the method of payment of principal of and interest on such Bonds in the form of bond certificates. -9- Section 4. Security Provisions. 4.01. Use of Proceeds. The proceeds of the Bonds in the amount of $6,604,224.01, are irrevocably appropriated to pay and redeem all of the Refunded Bonds. Any accrued interest on the Bonds shall be deposited in the Bond Fund created pursuant to Section 4.02 hereof. 4.02. General Obligation Tax Increment Refunding Bond Fund. The Bonds shall be payable from a separate "200313 General Obligation Tax Increment Refunding Bond Fund" (the "Bond Fund")which shall be created and maintained on the books of the City as a separate debt service fund until the Bonds, and all interest thereon, are fully paid. There shall be credited to the Bond Fund the following: (a) Any amount initially deposited therein pursuant to Section 4.01 hereof. (b)All proceeds of all taxes levied and all other money which may at any time be received for or appropriated to the payment of such bonds and interest, including the tax increment herein pledged and appropriated to the Bond Fund, all collections of any ad valorem taxes levied for the payment of the Bonds, and all other moneys received for or appropriated to the payment of the Bonds and interest thereon. (c)Any other funds appropriated by the Council for the payment of the Bonds. • 4.03. Pledge of Tax Increment. The City hereby irrevocably pledges to the Bond Fund tax increments derived from tax increment financing districts of the Housing and Redevelopment Authority of Edina(the "HRA") designated by Hennepin County as Nos. 1203 (Centennial Lakes), 1201 (Edinborough) and 1200 (50th and France), which are received by the City from the HRA to pay the Bonds. Such tax increments shall be deposited in the Bond Fund in an amount sufficient to pay all principal and interest when due on the Bonds. Nothing herein shall preclude the City or the HRA from hereafter making further pledges and appropriations of the tax increments pledged for the payment of the Bonds or for the payment of other obligations of the Issuer or the HRA. 4.04. Full Faith and Credit Pledged. The full faith and credit of the City are irrevocably pledged for the prompt and full payment of the principal of and the interest on the Bonds, as such principal and interest comes due. If the money on hand in the Bond Fund should at any time be insufficient for the payment of principal and interest then due, this City shall pay the principal and interest out of any fund of the City, and such other fund or funds shall be reimbursed therefor when sufficient money is available to the Bond Fund. If on October I in any year the sum of the balance in the Bond Fund plus the available tax increment on hand and estimated to be received or before the end of the following calendar year is not sufficient with any ad valorem taxes heretofore levied in accordance with the provisions of this resolution, to pay when due all principal and interest become due on all Bonds payable therefrom in said following calendar year, or the Bond Fund has incurred a deficiency in the manner provided in this Section 4.04, a direct, irrepealable, ad valorem tax shall be levied on all taxable property within the corporate limits of the City for the purpose of restoring such accumulated or -10- anticipated deficiency in an amount at least 5% in excess of amount needed to make good the deficiency. Section 5. Defeasance. When any Bond has been discharged as provided in this Section 5, all pledges, covenants and other rights granted by this resolution to the holders of such Bonds shall cease, and such Bonds shall no longer be deemed outstanding under this Resolution. The City may discharge its obligations with respect to any Bond which is due on any date by irrevocably depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due,the City may nevertheless discharge its obligations with respect thereto by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action,by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited,bearing interest payable at such times and at such rates and maturing on such dates as shall be required,without reinvestment,to pay all principal and interest to become due thereon to maturity. Section 6. County Auditor Registration, Certification of Proceedings,Investment of Money, Arbitrage, Official Statement and Fees. 6.01. County Auditor Registration. The City Manager is hereby authorized and directed to file a certified copy of this Resolution with the County Auditor of Hennepin County, together with such other information as the County Auditor shall require, and to obtain from said County Auditor a certificate that the Bonds have been entered on his bond register as required by law. 6.02. Certification of Proceedings. The officers of the City and the County Auditor of Hennepin County are hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey& Whitney LLP, Bond Counsel to the City, certified copies of all proceedings and records of the City, and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. -11- i6.03. Covenant. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and Regulations promulgated thereunder(the Regulations), as such are enacted or promulgated and in effect on the date of issue of the Bonds, and covenants to take any and all actions within its powers to ensure that the interest on the Bonds will not become subject to taxation under such Code and Regulations. The project financed by the bonds refunded by the Prior Bonds is available for use by members of the general public on a substantially equal basis. The City will not enter into any lease, use agreement or other contract respecting the project financed by the bonds refunded by the Prior Bonds or security for the payment of the Bonds which would cause the Bonds to be considered"private activity bonds" or"private loan bonds"pursuant to Section 141 of the Code. 6.04. Arbitrage Rebate. The City shall take such actions as are required to comply with the arbitrage rebate requirements of paragraphs (2) and (3) of Section 148(f)of the Code. 6.05. Arbitrage Certification. The Mayor and the City Manager,being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the Purchaser a certification in accordance with the provisions of Section 148 of the Code, and the Regulations, stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds which • make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of the Code and Regulations. 6.06. Official Statement. The Official Statement relating to the Bonds, dated February 6, 2003,prepared and distributed on behalf of the City by Ehlers& Associates, Inc., is hereby approved. Ehlers&Associates, Inc. is hereby authorized on behalf of the City to prepare and distribute to the Purchaser a supplement to the Official Statement listing the offering price, the interest rates, selling compensation, delivery date,the underwriters and such other information relating to the Certificates required to be included in the Official Statement by Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. Within seven business days from the date hereof, the City shall deliver to the Purchaser a reasonable number of copies of the Official Statement and such supplement. The officers of the City are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency of the Official Statement. Section 7. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the original purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2-12 promulgated by the Securities and Exchange Commission(the "SEC") under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to It continuing disclosure (as in effect and interpreted from time to time,the "Rule"), which will enhance the marketability of the Bonds, the City hereby makes the following covenants and -12- agreements for the benefit of the Owners (as hereinafter defined) from time to time of the Outstanding Bonds. The City is the only"obligated person"in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. If the City fails to comply with any provisions of this Section 7, any person aggrieved thereby, including the Owners of any Outstanding Bonds,may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this Section 7, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this Section 7 constitute a default under the Bonds or under any other provision of this resolution. As used in this Section 7, "Owner" or"Bondowner"means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any"Beneficial Owner" (as hereinafter defined)thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, `Beneficial Owner"means, in respect of a Bond, any person or entity which(i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond(including persons or entities holding Bonds through nominees, depositories or other intermediaries), or(b)is treated as the owner of the ' Bond for federal income tax purposes. As used herein, "Outstanding"when used as of any particular time with reference to Bonds means all Bonds theretofore, or thereupon being, authenticated and delivered by the Registrar under this Resolution except(i) Bonds theretofore canceled by the Registrar or surrendered to the Registrar for cancellation; (ii) Bonds with respect to which the liability of the City has been discharged in accordance with Section 5 hereof; and (iii)Bonds for the transfer or exchange or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Registrar pursuant to this Resolution. (b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection(c)hereof, either directly or indirectly through an agent designated by the City,the following information at the following times: (1) on or before 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 2002 the following financial information and operating data in respect of the City(the "Disclosure Information"): (A) the audited financial statements of the City for such fiscal year, accompanied by the audit report and opinion of the accountant or government auditor relating thereto, as permitted or required by the laws of the State of Minnesota, containing balance sheets as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal year then ended, showing in comparative form such figures for the preceding fiscal year of the City, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified -13- • R i (E) any change in the fiscal year of the City. (c) Manner of Disclosure. The City agrees to make available the information described in subsection(b) to the following entities by telecopy, overnight delivery, mail or other means, as appropriate: (1) the information described in paragraph(1) of subsection (b), to each then nationally recognized municipal securities information repository under the Rule and to any state information depository then designated or operated by the State of Minnesota as contemplated by the Rule (the "State Depository"), if any; (2) the information described in paragraphs (2) and(3) of subsection(b),to the Municipal Securities Rulemaking Board and to the State Depository, if any; and (3)the information described in subsection(b),to any rating agency then maintaining a rating of the Bonds and, at the expense of such Bondowner, to any Bondowner who requests in writing such information, at the time of transmission under paragraphs (1)or(2) of this subsection(c), as the case may be, or, if such information is transmitted with a subsequent time of release, at the time such information is to be released. (d) Term, Amendments; Interpretation. • (1) The covenants of the City in this Section 7 shall remain in effect so long as any Bonds are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this Section 7 shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings,the failure of the City to comply with the requirements of this Section 7 will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This Section 7 (and the form and requirements of the Disclosure Information)may be amended or supplemented by the City from time to time, without notice to (except as provided in paragraph(c)(3)hereof) or the consent of the Owners of any Bonds,by a resolution of the City Council filed in the office of the City Clerk of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications,to the effect that: (i) such amendment or supplement(a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity,nature or status of the City or the type of operations conducted by the City, or(b) is required by, or better complies with, the provisions of paragraph(b)(5) of the Rule; (ii)this Section 7 as so amended or supplemented would have complied with the requirements of paragraph(b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the -16- 16 primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial information or operating data being provided hereunder. (3) This Section 7 is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph(b)(5) of the Rule. Section 8. Redemption of Refunded Bonds. The City hereby calls the Refunded Bonds for redemption as soon as practicable. The Finance Director shall cause notice of the redemption of the Refunded Bonds to be given in the manner required by the resolution authorizing the Prior Bonds. Dennis Maetzold Mayor Attest: Debra Mangen City Clerk The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Hovland, and upon vote being taken thereon,the following voted in favor thereof: Housh, Hovland, Masica, Kelly and the following voted against the same: None whereupon said resolution was declared duly passed and adopted, and was signed by the Mayor which signature was attested by the City Clerk. -17- • 1