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07. Staff Report - 2024 Street Project Public Hearing Staff Report Date of Meeting: March 19, 2024 For: Honorable Mayor and Council From: Kyle Morell, City Administrator Subject: Public Hearing – 2024 Street Improvement Bond Issuance Background: At last month’s meeting, the Council set March 19 as a public hearing date to approve a street reconstruction plan and review proposed bond details. Jason Aarsvold, who presented to the Council, will return to aid with the public hearings. Issue: Two public hearings are scheduled, and three resolutions are before you for approval, with the following sequencing of actions: 1. Hold the Public Hearing for the Street Reconstruction Plan and issuing bonds for the purpose of financing the 2024 Street Improvement Project described by the Plan; 2. Consider adopting the Resolution Adopting the Street Reconstruction Plan; 3. Hold the Public Hearing for the Tax Abatements; 4. Consider adopting the Resolution Approving the Tax Abatements and 5. Consider adopting the “Pre-Sale” Resolution for the bond issuance. The resolutions in question are attached. Options: 1) Approve Resolutions are presented 2) Table for further discussion Recommendation: Option 1 Attachments: Pre-Sale Report prepared by Ehlers Resolution 03-19-24-02 – Adopting Street Reconstruction Plan and Approving Issuance of Bonds Resolution 03-19-24-03 – Approving Tax Abatements Resolution 03-19-24-04 – Pre-Sale Resolution - $4,135,000 GO Bonds March 19, 2024 PRE-SALE REPORT FOR City of Scandia, Minnesota $4,135,000 General Obligation Bonds, Series 2024A               Prepared by: Ehlers 3060 Centre Pointe Drive Roseville, MN 55113 Advisors: Jason Aarsvold, Senior Municipal Advisor Todd Hagen, Senior Municipal Advisor Schane Rudlang, Associate Municipal Advisor     BUILDING COMMUNITIES. IT’S WHAT WE DO.   Presale Report City of Scandia, Minnesota March 19, 2024 Page 1 Proposed Issue: $4,135,000 General Obligation Bonds, Series 2024A Purposes: The proposed issue includes financing for the following purposes:  2024 Street Improvement Project ($3,480,000): Debt service will be paid from ad valorem property taxes.  2024 Crack Fill & Seal Coat Project ($655,000): Debt service will be paid from tax abatement revenues. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters:  469 – Tax Abatement  475.58, subd. 3b – Street Reconstruction and Bituminous Overlays  475 – General Bonding Authority Under the Tax Abatement Authority, the amount of property taxes abated in any year for the Bonds, together with any outstanding annual abatements, may not exceed: (1) 10% of the City's net tax capacity (“NTC”), or (2) $200,000, whichever is greater. The City’s NTC is $11,057,558, leaving a maximum allowable annual abatement of $1,105,755. The projected average annual abatement for the Bonds is $56,450. Therefor, the City will have over $1,049,305 of remaining annual abatement authority. The City will hold the required Tax Abatement Hearing on March 19, 2024. The Street Improvement Project portion of the Bonds are being issued pursuant to Minnesota Statutes, Chapter 475.58 3b and the required public hearing on the Street Reconstruction and Overlay Plan will be held on March 19, 2024. The Street Reconstruction portion of the Bonds are also restricted by the amount of net debt the City can issue. The City cannot issue debt in excess of 3% of the assessor’s estimated market value for the City. The 2024 Estimated Market Value is $1,079,820,400. Therefore, the total amount of outstanding debt cannot exceed $32,394,612. As of March 7, 2024, the City had approximately $2.78 million of existing debt subject to the legal debt limit. With this proposed debt issuance discussed in this report, approximately $26.1 million would be available in debt capacity. The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. EXECUTIVE SUMMARY OF PROPOSED DEBT   Presale Report City of Scandia, Minnesota March 19, 2024 Page 2 Term/Call Feature: The Bonds are being issued for a term of 16 years. Principal on the Bonds will be due on February 1 in the years 2026 through 2040 (15 years). Interest will be due every six months beginning February 1, 2025. Bonds maturing on February 1, 2035, and thereafter are subject to call for prior optional redemption on February 1, 2034 or any date thereafter. Bank Qualification: Because the City is expecting to issue no more than $10,000,000 in tax exempt debt during the calendar year, the City will be able to designate the Bonds as “bank qualified” obligations. Bank qualified status broadens the market for the Bonds, which can result in lower interest rates. Rating: The City’s most recent bond issue was rated by S&P Global Ratings. The current rating on those bonds is AA+. The City will request a new rating for the Bonds. If the winning bidder on the Bonds elects to purchase bond insurance, the rating for the issue may be higher than the City's bond rating in the event that the bond rating of the insurer is higher than that of the City. Basis for Recommendation: Based on your objectives, financial situation and need, risk tolerance, liquidity needs, experience with the issuance of Bonds and long-term financial capacity, as well as the tax status considerations related to the Bonds and the structure, timing and other similar matters related to the Bonds, we are recommending the issuance of Bonds as a suitable option. Method of Sale/Placement: We are recommending the Bonds be issued as municipal securities and offered through a competitive underwriting process. You will solicit competitive bids, which we will compile on your behalf, for the purchase of the Bonds from underwriters and banks. An allowance for discount bidding will be incorporated in the terms of the issue. The discount is treated as an interest item and provides the underwriter with all or a portion of their compensation in the transaction. If the Bonds are purchased at a price greater than the minimum bid amount (maximum discount), the unused allowance may be used to reduce your borrowing amount.   Presale Report City of Scandia, Minnesota March 19, 2024 Page 3 Premium Pricing: In some cases, investors in municipal bonds prefer “premium” pricing structures. A premium is achieved when the coupon for any maturity (the interest rate paid by the issuer) exceeds the yield to the investor, resulting in a price paid that is greater than the face value of the bonds. The sum of the amounts paid in excess of face value is considered “reoffering premium.” The underwriter of the bonds will retain a portion of this reoffering premium as their compensation (or “discount”) but will pay the remainder of the premium to the City. The amount of the premium varies, but it is not uncommon to see premiums for new issues in the range of 2.00% to 10.00% of the face amount of the issue. This means that an issuer with a $2,000,000 offering may receive bids that result in proceeds of $2,040,000 to $2,200,000. For this issue of Bonds we have been directed to use the net premium to reduce the size of the issue for the project. The resulting adjustments may slightly change the true interest cost of the issue, either up or down. The amount of premium can be restricted in the bid specifications. Restrictions on premium may result in fewer bids, but may also eliminate large adjustments on the day of sale and unintended impacts with respect to debt service payment. Ehlers will identify appropriate premium restrictions for the Bonds intended to achieve the City’s objectives for this financing. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are no refunding opportunities at this time. We will continue to monitor the market and the call dates for the City’s outstanding debt and will alert you to any future refunding opportunities. Continuing Disclosure: Ehlers can assist the City in meeting all of its continuing disclosure requirements. Arbitrage Monitoring: The City must ensure compliance with certain sections of the Internal Revenue Code and Treasury Regulations (“Arbitrage Rules”) throughout the life of the issue to maintain the tax- exempt status of the Bonds. These Arbitrage Rules apply to amounts held in construction, escrow, reserve, debt service account(s), etc., along with related investment income on each fund/account. IRS audits will verify compliance with rebate, yield restriction and records retention requirements within the Arbitrage Rules. The City’s specific arbitrage responsibilities will be detailed in the Nonarbitrage Certificate (the “Tax Compliance Document”) prepared by your Bond Attorney and provided at closing. The Bonds may qualify for one or more exception(s) to the Arbitrage Rules by meeting 1) small issuer exception, 2) spend down requirements, 3) bona fide debt service fund limits, 4) reasonable reserve requirements, 5) expenditure within an available period limitations, 6) investments yield restrictions, 7) de minimis rules, or; 8) borrower limited requirements. An Ehlers arbitrage expert will contact the City within 30 days after the sale date to review the City’s specific responsibilities for the Bonds.   Presale Report City of Scandia, Minnesota March 19, 2024 Page 4 Investment of Bond Proceeds: Ehlers can assist the City in developing a strategy to invest your Bond proceeds until the funds are needed to pay project costs. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service, we have assumed that you will continue that relationship. For services you have not previously required, we have identified a service provider. Fees charged by these service providers will be paid from proceeds of the obligation, unless you notify us that you wish to pay them from other sources. Our pre-sale bond sizing includes a good faith estimate of these fees, but the final fees may vary. If you have any questions pertaining to the identified service providers or their role, or if you would like to use a different service provider for any of the listed services please contact us. Bond Counsel: Taft Stettinius & Hollister LLP Paying Agent: TBD Rating Agency: S&P Global Ratings (S&P) Summary: The decisions to be made by the City Council are as follows:  Accept or modify the finance assumptions described in this report  Adopt the resolution providing for the sale of the Bonds.   Presale Report City of Scandia, Minnesota March 19, 2024 Page 5 Pre-Sale Review by City Council and Hearings: March 19, 2024 Due Diligence Call to Review Official Statement: Week of April 15, 2024 Conference with Rating Agency: Week of April 15, 2024 Distribute Official Statement: Week of April 22, 2024 City Council Meeting to Award Sale of the Bonds: May 1, 2024 Estimated Closing Date: May 22, 2024 Attachments Estimated Sources and Uses of Funds Estimated Proposed Debt Service Schedule Resolution Authorizing Ehlers to Proceed with Bond Sale (Distributed separately by Bond Counsel) EHLERS’ CONTACTS Jason Aarsvold, Senior Municipal Advisor (651) 697-8512 Todd Hagen, Senior Municipal Advisor (651) 697-8508 Schane Rudlang, Associate Municipal Advisor (651) 697-8527 Silvia Johnson, Lead Public Finance Analyst (651) 697-8580 Alicia Gage, Senior Financial Analyst (651) 697-8551 PROPOSED DEBT ISSUANCE SCHEDULE EHLERS’ CONTACTS City of Scandia, Minnesota $4,135,000 General Obligation Bonds, Series 2024A Issue Summary Assumes Current Market BQ AA+ Rates plus 50bps Total Issue Sources And Uses Dated 05/22/2024 | Delivered 05/22/2024 Street Reconstruction Tax Abatement Issue Summary Sources Of Funds Par Amount of Bonds $3,480,000.00 $655,000.00 $4,135,000.00 Total Sources $3,480,000.00 $655,000.00 $4,135,000.00 Uses Of Funds Total Underwriter's Discount (1.200%)41,760.00 7,860.00 49,620.00 Costs of Issuance 56,572.56 10,177.44 66,750.00 Deposit to Capitalized Interest (CIF) Fund 79,152.60 14,907.15 94,059.75 Deposit to Project Construction Fund 3,300,000.00 620,000.00 3,920,000.00 Rounding Amount 2,514.84 2,055.41 4,570.25 Total Uses $3,480,000.00 $655,000.00 $4,135,000.00 Series 2024 GO Bonds - Pr | Issue Summary | 3/ 5/2024 | 8:31 AM City of Scandia, Minnesota $4,135,000 General Obligation Bonds, Series 2024A Issue Summary Assumes Current Market BQ AA+ Rates plus 50bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 05/22/2024 ----- 02/01/2025 --94,059.75 94,059.75 94,059.75 08/01/2025 --67,995.00 67,995.00 - 02/01/2026 220,000.00 3.200%67,995.00 287,995.00 355,990.00 08/01/2026 --64,475.00 64,475.00 - 02/01/2027 225,000.00 3.150%64,475.00 289,475.00 353,950.00 08/01/2027 --60,931.25 60,931.25 - 02/01/2028 230,000.00 3.100%60,931.25 290,931.25 351,862.50 08/01/2028 --57,366.25 57,366.25 - 02/01/2029 245,000.00 3.050%57,366.25 302,366.25 359,732.50 08/01/2029 --53,630.00 53,630.00 - 02/01/2030 250,000.00 3.050%53,630.00 303,630.00 357,260.00 08/01/2030 --49,817.50 49,817.50 - 02/01/2031 255,000.00 3.050%49,817.50 304,817.50 354,635.00 08/01/2031 --45,928.75 45,928.75 - 02/01/2032 260,000.00 3.050%45,928.75 305,928.75 351,857.50 08/01/2032 --41,963.75 41,963.75 - 02/01/2033 275,000.00 3.150%41,963.75 316,963.75 358,927.50 08/01/2033 --37,632.50 37,632.50 - 02/01/2034 280,000.00 3.150%37,632.50 317,632.50 355,265.00 08/01/2034 --33,222.50 33,222.50 - 02/01/2035 290,000.00 3.100%33,222.50 323,222.50 356,445.00 08/01/2035 --28,727.50 28,727.50 - 02/01/2036 295,000.00 3.300%28,727.50 323,727.50 352,455.00 08/01/2036 --23,860.00 23,860.00 - 02/01/2037 310,000.00 3.400%23,860.00 333,860.00 357,720.00 08/01/2037 --18,590.00 18,590.00 - 02/01/2038 320,000.00 3.650%18,590.00 338,590.00 357,180.00 08/01/2038 --12,750.00 12,750.00 - 02/01/2039 335,000.00 3.750%12,750.00 347,750.00 360,500.00 08/01/2039 --6,468.75 6,468.75 - 02/01/2040 345,000.00 3.750%6,468.75 351,468.75 357,937.50 Total $4,135,000.00 -$1,300,777.25 $5,435,777.25 - Yield Statistics Bond Year Dollars $38,410.04 Average Life 9.289 Years Average Coupon 3.3865552% Net Interest Cost (NIC)3.5157401% True Interest Cost (TIC)3.5281040% Bond Yield for Arbitrage Purposes 3.3714332% All Inclusive Cost (AIC)3.7430582% IRS Form 8038 Net Interest Cost 3.3865552% Weighted Average Maturity 9.289 Years Series 2024 GO Bonds - Pr | Issue Summary | 3/ 5/2024 | 8:31 AM City of Scandia, Minnesota $4,135,000 General Obligation Bonds, Series 2024A Issue Summary Assumes Current Market BQ AA+ Rates plus 50bps Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of Total 02/01/2025 --94,059.75 94,059.75 (94,059.75)-- 02/01/2026 220,000.00 3.200%135,990.00 355,990.00 -355,990.00 373,789.50 02/01/2027 225,000.00 3.150%128,950.00 353,950.00 -353,950.00 371,647.50 02/01/2028 230,000.00 3.100%121,862.50 351,862.50 -351,862.50 369,455.63 02/01/2029 245,000.00 3.050%114,732.50 359,732.50 -359,732.50 377,719.13 02/01/2030 250,000.00 3.050%107,260.00 357,260.00 -357,260.00 375,123.00 02/01/2031 255,000.00 3.050%99,635.00 354,635.00 -354,635.00 372,366.75 02/01/2032 260,000.00 3.050%91,857.50 351,857.50 -351,857.50 369,450.38 02/01/2033 275,000.00 3.150%83,927.50 358,927.50 -358,927.50 376,873.88 02/01/2034 280,000.00 3.150%75,265.00 355,265.00 -355,265.00 373,028.25 02/01/2035 290,000.00 3.100%66,445.00 356,445.00 -356,445.00 374,267.25 02/01/2036 295,000.00 3.300%57,455.00 352,455.00 -352,455.00 370,077.75 02/01/2037 310,000.00 3.400%47,720.00 357,720.00 -357,720.00 375,606.00 02/01/2038 320,000.00 3.650%37,180.00 357,180.00 -357,180.00 375,039.00 02/01/2039 335,000.00 3.750%25,500.00 360,500.00 -360,500.00 378,525.00 02/01/2040 345,000.00 3.750%12,937.50 357,937.50 -357,937.50 375,834.38 Total $4,135,000.00 -$1,300,777.25 $5,435,777.25 (94,059.75)$5,341,717.50 $5,608,803.38 Significant Dates Dated 5/22/2024 First Coupon Date 2/01/2025 Yield Statistics Bond Year Dollars $38,410.04 Average Life 9.289 Years Average Coupon 3.3865552% Net Interest Cost (NIC)3.5157401% True Interest Cost (TIC)3.5281040% Bond Yield for Arbitrage Purposes 3.3714332% All Inclusive Cost (AIC)3.7430582% Series 2024 GO Bonds - Pr | Issue Summary | 3/ 5/2024 | 8:31 AM City of Scandia, Minnesota $3,480,000 General Obligation Bonds, Series 2024A Street Reconstruction Assumes Current Market BQ AA+ Rates plus 50bps Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of Total 02/01/2025 --79,152.60 79,152.60 (79,152.60)-- 02/01/2026 185,000.00 3.200%114,437.50 299,437.50 -299,437.50 314,409.38 02/01/2027 190,000.00 3.150%108,517.50 298,517.50 -298,517.50 313,443.38 02/01/2028 195,000.00 3.100%102,532.50 297,532.50 -297,532.50 312,409.13 02/01/2029 205,000.00 3.050%96,487.50 301,487.50 -301,487.50 316,561.88 02/01/2030 210,000.00 3.050%90,235.00 300,235.00 -300,235.00 315,246.75 02/01/2031 215,000.00 3.050%83,830.00 298,830.00 -298,830.00 313,771.50 02/01/2032 220,000.00 3.050%77,272.50 297,272.50 -297,272.50 312,136.13 02/01/2033 230,000.00 3.150%70,562.50 300,562.50 -300,562.50 315,590.63 02/01/2034 235,000.00 3.150%63,317.50 298,317.50 -298,317.50 313,233.38 02/01/2035 245,000.00 3.100%55,915.00 300,915.00 -300,915.00 315,960.75 02/01/2036 250,000.00 3.300%48,320.00 298,320.00 -298,320.00 313,236.00 02/01/2037 260,000.00 3.400%40,070.00 300,070.00 -300,070.00 315,073.50 02/01/2038 270,000.00 3.650%31,230.00 301,230.00 -301,230.00 316,291.50 02/01/2039 280,000.00 3.750%21,375.00 301,375.00 -301,375.00 316,443.75 02/01/2040 290,000.00 3.750%10,875.00 300,875.00 -300,875.00 315,918.75 Total $3,480,000.00 -$1,094,130.10 $4,574,130.10 (79,152.60)$4,494,977.50 $4,719,726.38 Significant Dates Dated 5/22/2024 First Coupon Date 2/01/2025 Yield Statistics Bond Year Dollars $32,312.00 Average Life 9.285 Years Average Coupon 3.3861417% Net Interest Cost (NIC)3.5153816% True Interest Cost (TIC)3.5277583% Bond Yield for Arbitrage Purposes 3.3714332% All Inclusive Cost (AIC)3.7443216% Series 2024 GO Bonds - Pr | Street Reconstruction | 3/ 5/2024 | 8:31 AM City of Scandia, Minnesota $655,000 General Obligation Bonds, Series 2024A Tax Abatement Assumes Current Market BQ AA+ Rates plus 50bps Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of Total 02/01/2025 --14,907.15 14,907.15 (14,907.15)-- 02/01/2026 35,000.00 3.200%21,552.50 56,552.50 -56,552.50 59,380.13 02/01/2027 35,000.00 3.150%20,432.50 55,432.50 -55,432.50 58,204.13 02/01/2028 35,000.00 3.100%19,330.00 54,330.00 -54,330.00 57,046.50 02/01/2029 40,000.00 3.050%18,245.00 58,245.00 -58,245.00 61,157.25 02/01/2030 40,000.00 3.050%17,025.00 57,025.00 -57,025.00 59,876.25 02/01/2031 40,000.00 3.050%15,805.00 55,805.00 -55,805.00 58,595.25 02/01/2032 40,000.00 3.050%14,585.00 54,585.00 -54,585.00 57,314.25 02/01/2033 45,000.00 3.150%13,365.00 58,365.00 -58,365.00 61,283.25 02/01/2034 45,000.00 3.150%11,947.50 56,947.50 -56,947.50 59,794.88 02/01/2035 45,000.00 3.100%10,530.00 55,530.00 -55,530.00 58,306.50 02/01/2036 45,000.00 3.300%9,135.00 54,135.00 -54,135.00 56,841.75 02/01/2037 50,000.00 3.400%7,650.00 57,650.00 -57,650.00 60,532.50 02/01/2038 50,000.00 3.650%5,950.00 55,950.00 -55,950.00 58,747.50 02/01/2039 55,000.00 3.750%4,125.00 59,125.00 -59,125.00 62,081.25 02/01/2040 55,000.00 3.750%2,062.50 57,062.50 -57,062.50 59,915.63 Total $655,000.00 -$206,647.15 $861,647.15 (14,907.15)$846,740.00 $889,077.00 Significant Dates Dated 5/22/2024 First Coupon Date 2/01/2025 Yield Statistics Bond Year Dollars $6,098.04 Average Life 9.310 Years Average Coupon 3.3887461% Net Interest Cost (NIC)3.5176400% True Interest Cost (TIC)3.5299364% Bond Yield for Arbitrage Purposes 3.3714332% All Inclusive Cost (AIC)3.7363646% Series 2024 GO Bonds - Pr | Tax Abatement | 3/ 5/2024 | 8:31 AM City of Scandia, Minnesota $4,135,000 General Obligation Bonds, Series 2024A Issue Summary Assumes Current Market BQ AA+ Rates plus 50bps Detail Costs Of Issuance Dated 05/22/2024 | Delivered 05/22/2024 COSTS OF ISSUANCE DETAIL Municipal Advisor $31,000.00 SROP Fee $2,500.00 Bond Counsel $16,250.00 Rating Agency Fee $16,000.00 Miscellaneous $1,000.00 TOTAL $66,750.00 Series 2024 GO Bonds - Pr | Issue Summary | 3/ 5/2024 | 8:31 AM 131861526v1 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF SCANDIA, MINNESOTA HELD: March 19, 2024 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Scandia, Washington County, Minnesota, was duly held at City Hall on March 19, 2024 at 7:00 P.M., for the purpose in part of approving and adopting a street reconstruction and overlay plan and approving the issuance of general obligation street reconstruction bonds. The following members were present: and the following were absent: Member __________________ introduced the following resolution and moved its adoption: RESOLUTION NO. 03-19-24-02 RESOLUTION ADOPTING A STREET RECONSTRUCTION AND OVERLAY PLAN AND APPROVING THE ISSUANCE OF GENERAL OBLIGATION STREET RECONSTRUCTION BONDS WHEREAS, the City of Scandia, Minnesota (the "City"), has determined that it is in the best interest of the City to authorize the issuance and sale of general obligation street reconstruction bonds pursuant to Minnesota Statutes, Section 475.58, subdivision 3b, as amended (the "Act"), to finance the cost of street reconstruction projects, as described in the proposed street reconstruction and overlay plan described below, a copy of which is on file in the City Clerk's office; and WHEREAS, pursuant to the Act, the City is authorized to issue and sell general obligation street reconstruction bonds for street reconstruction under the circumstances and within the limitations set forth in the Act. The Act provides that a street reconstruction and overlay plan may be financed with general obligation street reconstruction bonds, following adoption of a street reconstruction and overlay plan, after a public hearing on the street reconstruction and overlay plan and on the issuance of general obligation street reconstruction bonds and other proceedings conducted in accordance with the requirements of the Act; and WHEREAS, pursuant to the Act, the City has caused the preparation of the drafted Five - Year Street Reconstruction & Overlay Plan for the City, for calendar years 2024 through 2028, which describes the streets to be reconstructed, the estimated costs and any planned reconstruction of other streets in the City, including the issuance of general obligation street reconstruction bonds under the Act (the "Plan"), to determine the funding strategy for street reconstruction projects; and 131861526v1 2 WHEREAS, the City Council held a public hearing on the same date hereof on the adoption of the Plan and the issuance of not to exceed $3,480,000 general obligation street reconstruction bonds (the "Bonds") under the Plan for street reconstruction improvements to those streets described in the Plan (the "Street Reconstruction Projects") after publication of the notice of public hearing not less than 10 days nor more than 28 days prior to the date thereof in the City's official newspaper; and WHEREAS, all parties who appeared at the public hearing were given an opportunity to express their views with respect to the proposal to adopt the Plan and to undertake and finance the Street Reconstruction Projects by the issuance of Bonds and any written comments submitted prior to the public hearing were considered. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Scandia, County of Washington, State of Minnesota, as follows: 1. City Policies and Goals. The financing of the Street Reconstruction Projects and the issuance and sale of the Bonds would further the policies and goals of the City as set forth in the Plan, hereby adopted by the City Council in connection with the issuance of the Bonds. 2. Public Hearing Notice. The City Council hereby ratifies the actions of the City Clerk in causing the publication of the Notice of Public Hearing in the City's official newspaper as required by law; and 3. Adoption of Street Reconstruction and Overlay Plan. Based on information received at the public hearing, such written comments (if any) and such other facts and circumstances as the City Council deems relevant, it is hereby found, determined and declared that: a. the Street Reconstruction Projects proposed in the Plan will allow the City to upgrade its transportation infrastructure to accommodate anticipated and existing residential and commercial development; and b. the Plan is hereby approved and adopted in the form presently on file with the City. 4. Authorization and Approval of Bonds. The City is hereby authorized to issue the Bonds, the proceeds of which will be used, together with any additional funds of the City which might be required, to finance certain costs of the Street Reconstruction Projects and to pay costs of issuance of the Bonds. 5. Execution of Documents. The Mayor and City Clerk are authorized and directed to execute such other documents and instruments as may be required to give effect to the transactions herein contemplated. 6. Voter Referendum Contingency. Pursuant to the Act, a petition requesting a vote on the question of issuing the Bonds, signed by voters equal to five percent of the votes cast in the last municipal general election, may be filed within thirty days of the public hearing. Upon receipt of such petition within the prescribed time period, the City may issue the Bonds only after 131861526v1 3 obtaining the approval of a majority of the voters voting on the question of the issuance of the Bonds. The authorizations and approvals contained herein are subject to and contingent upon not receiving such a petition, or, in the event such a petition is filed, the approving vote of a majority of the voters voting on the question of the issuance of the Bonds. The motion for the adoption of the foregoing resolution was duly seconded by Council Member _______________________ and, after full discussion thereof and upon a vote being taken thereon, the following Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 131861526v1 CITY CLERK'S CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Scandia, Minnesota (the "City"), DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council of the City, duly called and held on the date therein indicated, insofar as such minutes relate to adopting a street reconstruction and overlay plan and approving the issuance of bonds therefor. WITNESS my hand this ____ day of ________________, 2024. __________________________________ City Clerk Scandia, Minnesota 131960714v1 1 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF SCANDIA, MINNESOTA HELD: March 19, 2024 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Scandia, Washington County, Minnesota, was duly held at City Hall on March 19, 2024 at 7:00 P.M., for the purpose in part of approving property tax abatements. The following members were present: and the following were absent: Member __________________ introduced the following resolution and moved its adoption: RESOLUTION NO. 03-19-24-03 RESOLUTION APPROVING PROPERTY TAX ABATEMENTS BE IT RESOLVED by the City Council (the "Council") of the City of Scandia, Minnesota (the "City"), as follows: 1. Recitals. (a) The City proposes to approve tax abatements in connection with the financing of the City's designated 2024 Crack Fill & Seal Coat Project located in the City (the "Project"). The City proposes to use the abatement for the purposes provided for in the Abatement Law (as hereinafter defined), including the Project. The proposed term of the abatement will be for up to fifteen (15) years in an amount not to exceed $655,000. The tax abatement will apply to the City's share of the property taxes (the "Abatement") derived from the property identified by the tax parcel identification numbers listed below (the "Property"): 06.032.20.33.0003 21.032.20.31.0002 26.032.20.14.0003 08.032.20.11.0001 21.032.20.42.0005 26.032.20.23.0004 08.032.20.12.0008 22.032.20.24.0003 26.032.20.34.0004 08.032.20.12.0009 22.032.20.24.0006 26.032.20.43.0009 08.032.20.12.0010 23.032.20.44.0002 27.032.20.13.0003 09.032.20.43.0003 25.032.20.11.0003 27.032.20.41.0003 11.032.20.21.0001 26.032.20.13.0007 30.032.20.11.0001 20.032.20.13.0001 131960714v1 2 (b) The Council held a public hearing on the same date hereof on the question of the Abatement, and said hearing was preceded by at least 10 days but not more than 30 days prior published notice thereof. (c) The City proposes to issue General Obligation Tax Abatement Bonds (the "Bonds") in the aggregate principal amount not to exceed $655,000, which will be used to finance the Project. The City will pledge the property tax abatements to pay the Bonds. (d) The Abatement is authorized under Minnesota Statutes, Sections 469.1912 through 469.1915 (the "Abatement Law"). 2. Findings for the Abatement. The City Council hereby makes the following findings: (a) The Council expects the benefits to the City of the Abatement to at least equal or exceed the costs to the City thereof. (b) Granting the Abatement is in the public interest because it will help provide access to services for residents of the City and provide public infrastructure. (c) The Property is not located in a tax increment financing district. (d) In any year, the total amount of property taxes abated by the City by this and other existing abatement resolutions, shall not exceed ten percent (10%) of net tax capacity of the City for the taxes payable year to which the abatement applies or $200,000, whichever is greater (the "Abatement Limit"). The City may grant other abatements permitted under the Abatement Law after the date of this resolution, provided that to the extent the total abatements in any year exceed the Abatement Limit the allocation of the Abatement limit to such other abatements is subordinate to the Abatement granted by this resolution. 3. Terms of Abatement. The Abatement is hereby approved. The terms of the Abatement are as follows: (a) The Abatement shall be for up to a fifteen (15) year period, anticipated to commence for the taxes payable in the year 2025. The City reserves the right to modify the commencement date, but the abatement period shall not exceed fifteen (15) years. (b) The City will abate the City's share of property tax amount which the City receives from the Property, not to exceed $655,000. (c) In accordance with Section 469.1915 of the Abatement Law, the City will add to its levy in each year during the term of the Abatement the total estimated amount of current year Abatement granted under this resolution. (d) The Abatement shall be subject to all the terms and limitations of the Abatement Law. 131960714v1 3 The motion for the adoption of the foregoing resolution was duly seconded by Council Member _______________________ and, after full discussion thereof and upon a vote being taken thereon, the following Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 131960714v1 4 CITY CLERK'S CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Scandia, Minnesota (the "City"), DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council of the City, duly called and held on the date therein indicated, insofar as such minutes relate to approving property tax abatements. WITNESS my hand this ____ day of ________________, 2024. __________________________________ City Clerk Scandia, Minnesota 131861886v1 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF SCANDIA, MINNESOTA HELD: MARCH 19, 2024 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Scandia, Washington County, Minnesota, was duly held at City Hall on March 19, 2024, at 7:00 P.M., for the purpose, in part, of authorizing the competitive negotiated sale of $4,135,000 General Obligation Bonds, Series 2024A. The following members were present: and the following were absent: Member ________________ introduced the following resolution and moved its adoption: RESOLUTION NO. 03-19-24-04 RESOLUTION PROVIDING FOR THE SALE OF $4,135,000 GENERAL OBLIGATION BONDS, SERIES 2024A A. WHEREAS, the City Council of the City of Scandia, Minnesota (the "City") has heretofore determined that it is necessary and expedient to issue the City's $4,135,000 General Obligation Bonds, Series 2024A (the "Bonds"), to finance the City's designated (i) 2024 Street Improvement Project, and (ii) 2024 Crack Fill & Seal Coat Project; and B. WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"), as its independent municipal advisor for the Bonds in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9). NOW, THEREFORE, BE IT RESOLVED by the City of Scandia, Minnesota, as follows: 1. Authorization. The City Council hereby authorizes Ehlers to assist the City for the sale of the Bonds. 2. Meeting; Proposal Opening. The City Council shall meet at 7:00 P.M. on May 1, 2024, for the purpose of considering proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. 131861886v1 2 The motion for the adoption of the foregoing resolution was duly seconded by Council Member _______________________ and, after full discussion thereof and upon a vote being taken thereon, the following Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 131861886v1 3 STATE OF MINNESOTA WASHINGTON COUNTY CITY OF SCANDIA I, the undersigned, being the duly qualified and acting Clerk of the City of Scandia, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council, duly called and held on the date therein indicated, insofar as the minutes relate to providing for the issuance and sale of $4,135,000 General Obligation Bonds, Series 2024A. WITNESS my hand on March 19, 2024. __________________________________________ Clerk