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09.b2 Resolution 12-17-24-11 GO Equipment Certificate 2025 Series ARESOLUTION NO. 12-17-24-11 RESOLUTION AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF $340,000 GENERAL OBLIGATION CERTIFICATES OF INDEBTEDNESS, SERIES 2025A BE IT RESOLVED, by the City Council of the City of Scandia (the “City Council”), Washington County, Minnesota (the “Issuer”), as follows: Section 1. Purpose, Authorization and Award. 1.01 Authority. Pursuant to authority contained in Minnesota Statutes, Section 412.301, the Issuer is authorized to issue certificates of indebtedness to provide funds for the purchase of capital equipment having an expected useful life at least as long as the terms of the certificates issued to finance such capital equipment. 1.02 Findings. A. Pursuant to authority contained in Minnesota Statutes, Chapter 475 and Section 412.301 (collectively, the “Act”), the Issuer has determined that it is necessary, expedient and in the best interest of the residents of the Issuer that the Issuer purchase certain items of capital equipment, including but not limited to the purchase of a fire engine (the “Project”), and that the Issuer issue and sell its General Obligation Certificates of Indebtedness, Series 2025A, of the Issuer, in the aggregate original principal amount of $340,000 (the “Certificates”), in order to finance the Project. B. The aggregate original principal amount of the Certificates does not exceed 0.25 percent of the market value of taxable property in the territory of Issuer. The estimated taxable market value of the Issuer for calendar year 2025 is $1,043,161,100. C. The expected useful life of the equipment being financed by the Certificates is 25 years. D. All acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen, and to be performed precedent to the issuance of the Certificates, having been done, having happened and having been performed in regular and due form, time and manner as required by law, it is necessary for the Issuer to establish the form and terms of the Certificates, to provide for the security thereof, and to provide for the issuance of the Certificates forthwith. 1.03 Bonds Previously Sold. The Issuer elects to apply the exception to the public sale requirement contained in Minnesota Statutes, Section 475.60, Subdivision 2(2). The Issuer has not sold obligations, and covenants not to sell obligations, in the aggregate amount exceeding $1,200,000 for the 12-month period from June 1, 2024 to June 1, 2025. 2 1.04 Award of Sale. The Issuer has received a proposal for a loan to be evidenced by the Certificates from the Security State Bank of Marine, located in Marine on St. Croix, Minnesota (the “Lender”), in the amount of $340,000, plus accrued interest on the total principal amount to the date of delivery of the Certificates, if any, upon condition that the Certificates mature and bear interest at the times and annual rates set forth in Section 2. The Issuer, after due consideration, finds such offer reasonable and proper and the offer of the Lender is accepted. All actions of the Mayor, the City Administrator, and other City staff taken with regard to the sale of the Certificates are ratified and approved. Section 2. Terms of the Certificates. 2.01 Interest Rate and Principal Maturities. A. The Certificates shall be (i) designated “General Obligation Certificates of Indebtedness, Series 2025A”, (ii) dated January 16, 2025, as the date of original issue, (iii) issued in the denominations set forth below, and in fully registered form, and (iv) lettered and numbered R-1. B. The Certificates shall mature on January 15 in the years and amounts stated below and shall bear interest from the most recent Payment Date (as hereinafter defined) to which interest has been paid or duly provided for, or, if no interest has been paid or provided for, from the date of original issue until paid at the rates per annum set forth below opposite such years and amounts: Year Principal Interest Rate 2026 23,000.00 4.40% 2027 23,000.00 4.35% 2028 23,000.00 4.30% 2029 23,000.00 4.30% 2030 23,000.00 4.30% 2031 23,000.00 4.30% 2032 23,000.00 4.30% 2033 23,000.00 4.30% 2034 23,000.00 4.35% 2035 23,000.00 4.65% 2036 22,000.00 4.70% 2037 22,000.00 4.70% 2038 22,000.00 4.75% 2039 22,000.00 4.75% 2040 22,000.00 4.75% C. The maturities of the Certificates meet the requirements of Minnesota Statutes, Section 475.54. 2.02 Prepayment. The Certificates are prepayable, in whole or in part, on any date without notice at a price equal to the principal amount to be prepaid plus accrued interest to the 3 date of prepayment. Partial payments shall be applied first to interest due on the outstanding principal balance and thereafter to reduction of the principal balance. 2.03 Payment Dates. A. Principal shall be payable annually on January 15 in the years and in the amounts stated in Section 2.01 above, and interest shall be payable semi-annually on January 15 and July 15 of each year (each referred to herein as a “Payment Date”) commencing on July 15, 2025. Interest will be computed upon the basis of a 360-day year of twelve 30-day months. B. The Registrar designated below shall make all interest payments with respect to the Certificates by check or draft mailed to the registered owner shown on the registration records maintained by the Registrar at or before the close of business on the Payment Date at such owners’ addresses shown on such registration records. 2.04 Preparation and Execution. A. The Certificates shall be prepared for execution in accordance with the approved form and shall be signed by the manual signature of the Mayor and attested by the manual signature of the City Administrator. The corporate seal of the Issuer may be omitted from the Certificates as permitted by law. In case any officer whose signature shall appear on the Certificates shall cease to be an officer before delivery of the Certificates, such signature shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. B. The City Administrator is authorized and directed to obtain a copy of the proposed approving legal opinion of Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota, and cause such opinion to be delivered to the Lender. 2.05 Appointment of Registrar. The City Council appoints the City Administrator as registrar, authenticating agent, paying agent and transfer agent for the Certificate (the “Registrar”). The Issuer reserves the right to name a substitute, successor Registrar upon giving prompt written notice to each registered Certificate holder. 2.06 Registered Owner. The Certificates shall be registered in the name of the Lender. 2.07 Register. The Issuer shall cause to be kept by the Registrar a bond register in which, subject to such reasonable regulations as the Registrar may prescribe, the Issuer shall provide for the registration of the Certificates and the registration of transfers of the Certificates entitled to be registered or transferred as herein provided. In the event of the resignation or removal of the Registrar or its incapability of acting as such, the bond registration records shall be maintained at the office of the successor Registrar as may be appointed by the City Council. 2.08 Payment. The principal of and interest on the Certificates shall be payable by the Registrar in such funds as are legal tender for the payment of debts due the United States of America. 4 2.09 Delivery. Delivery of the Certificates and payment of the purchase price shall be made at a place mutually satisfactory to the Issuer and the Lender. Typewritten and executed Certificates shall be furnished by the Issuer without cost to the Lender. The Certificates, when prepared in accordance with this Resolution and executed, shall be delivered by or under the direction of the City Administrator to the Lender upon receipt of the purchase price plus accrued interest, if any. Section 3. Form of the Certificates. 3.01 The Certificates shall be typewritten in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA WASHINGTON COUNTY R-__ $__________ CITY OF SCANDIA GENERAL OBLIGATION CERTIFICATE OF INDEBTEDNESS, SERIES 2025A Rate Maturity Date Date of Original Issue ________% January 15, 20___ January 16, 2025 REGISTERED OWNER: SECURITY STATE BANK OF MARINE PRINCIPAL AMOUNT: _________________________ DOLLARS The City of Scandia, Washington County, Minnesota (the “Issuer”), 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 date of original issue set forth above, or from the most recent Payment Date (defined below) to which interest has been paid or duly provided for, until the principal amount is paid, said interest being at the rate per annum specified above. Interest shall be payable semi-annually on January 15 and July 15 of each year (each referred to herein as a “Payment Date”) commencing on July 15, 2025. Both principal hereof and interest hereon are payable in lawful money of the United States of America by check or draft at the main office of the City Administrator, as Registrar, authenticating agent, paying agent and transfer agent (the “Registrar”), or at the office of such successor Registrar as may be designated by the governing body of the Issuer. The Registrar shall make all payments with respect to this Certificate directly to the registered owner hereof shown on the Certificate registration records maintained on behalf of the Issuer by the Registrar 5 at or before the close of business on the Payment Date at such owner’s address shown on said Certificate registration records, without, except for final payment of principal of the Certificate, the presentation or surrender of this Certificate, and all such payments shall discharge the obligation of the Issuer to the extent of the payments so made. Payment of principal shall be made upon presentation and surrender of this Certificate to the Registrar when due. The principal amount evidenced by this Certificate was drawn upon by Issuer in accordance with the Loan Agreement between Issuer and Lender dated as of the date hereof. This Certificate is prepayable, in whole or in part, on any date without notice at a price equal to the principal amount to be prepaid plus accrued interest to the date of prepayment. Partial payments shall be applied first to interest due on the outstanding principal balance and thereafter to reduction of the principal balance. This Certificate is one of a series issued by the Issuer in the total aggregate amount $340,000, all of like original issue date and tenor, except as to number, par amount, maturity date, and interest rate (collectively, the “Certificates”), pursuant to the authority contained in Minnesota Statutes, Chapters 475 and Section 412.301, and all other laws thereunto enabling, and pursuant to an authorizing resolution adopted by the governing body of the Issuer on December 17, 2024 (the “Resolution”), for the purpose of financing the purchase of certain items of capital equipment including but not limited to the purchase of a fire engine. The Issuer has levied a direct, annual ad valorem tax upon all taxable property within the Issuer which shall be extended upon the tax rolls for the years and in the amounts sufficient to produce sums not less than five percent in excess of the amounts of principal and interest on the Certificates, as such principal and interest respectively come due. For the prompt and full payment of such principal and interest as they become due, the full faith and credit and taxing power of the Issuer are irrevocably pledged. The Issuer has designated the Certificates as “qualified tax-exempt obligations” pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. This Certificate is transferable by the registered owner hereof upon surrender of this Certificate for transfer at the principal corporate office of the Registrar, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Registrar and executed by the registered owner hereof or the owner’s attorney duly authorized in writing. Thereupon the Issuer shall execute and the Registrar shall authenticate and deliver, in exchange for this Certificate, one new fully registered bond in the name of the transferee of an authorized denomination, an aggregate principal amount equal to the unpaid principal amount of this Certificate, of the same maturity, and bearing interest at the same rate. No service charge shall be made for any transfer or exchange hereinbefore referred to, 6 but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. IT IS CERTIFIED AND RECITED that all acts and conditions required 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 Certificate, in order to make it a valid and binding general obligation of the Issuer 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 limits of the Issuer 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 Certificate does not cause the indebtedness of the Issuer to exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City of Scandia, Washington County, Minnesota, by its governing body, has caused this Certificate to be executed in its name by the manual signature of the Mayor and attested by the manual signature of the City Administrator as of the date of original issue set forth above. ATTEST: (form no signature) (form no signature) City Administrator Mayor REGISTRATION CERTIFICATE This Certificate must be registered as to both principal and interest in the name of the owner on the books to be kept by the City Administrator of the City of Scandia, Minnesota, as Registrar. No transfer of this Certificate 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 Certificate and the interest accruing thereon is registered on the books of the City Administrator in the name of the registered owner last noted below. Date Registered Owner Signature of City Administrator ___/___/2025 Security State Bank of Marine 120 Judd St. Marine on St. Croix, MN 55047 Federal Tax I.D. No.: 41-0531810 ______(form no signature)_____ ASSIGNMENT 7 FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (Name and Address of Assignee) ____________________ Social Security or Other ____________________ Identifying Number of Assignee the within Certificate and all rights thereunder and irrevocably constitutes and appoints _____________________________________ attorney to transfer the said Certificate on the books kept for registration thereof with full power of substitution in the premises. Dated: _________________ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of the within Certificate in every particular, without alteration or enlargement or any change whatsoever. Signature Guaranteed: _______________________________ (Bank, Trust Company, member of National Securities Exchange) THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF FOR VALUE, OR TRANSFERRED, WITHOUT (i) AN OPINION OF COUNSEL THAT SUCH SALE, DISPOSITION OR TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED AND UNDER APPLICABLE STATE SECURITIES LAWS, OR (ii) SUCH REGISTRATION. THE TRANSFERABILITY OF THIS INSTRUMENT IS SUBJECT TO RESTRICTIONS REQUIRED BY (1) FEDERAL AND STATE SECURITIES LAWS GOVERNING UNREGISTERED SECURITIES; AND (2) THE RULES, REGULATIONS, AND INTERPRETATIONS OF THE GOVERNMENTAL AGENCIES ADMINISTERING SUCH LAWS. THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER CHAPTER 80A OF 8 MINNESOTA STATUTES OR OTHER APPLICABLE STATE BLUE SKY LAWS AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW. Section 4. Covenants, Accounts and Tax Levies. 4.01 The Fund. There is created a special fund to be designated the “2025A General Obligation Certificates of Indebtedness Fund” (the “Fund”) to be administered and maintained by the City Administrator as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the Issuer. The Fund shall be maintained in the manner herein specified until the principal amount of the Certificates and the interest thereon has been fully paid. There shall be maintained in the Fund two separate accounts, to be designated the “2025A Project Fund” and “2025A Debt Service Fund,” respectively: A. Project Fund. On receipt of the purchase price of the Certificates, the Issuer shall credit proceeds from the sale of the Certificates, less accrued interest and capitalized interest, if any (the “Capitalized Interest”), to the Project Fund. The monies in such fund, along with other monies of the Issuer available therefor, shall be used to pay the costs of the Project, as set forth herein. Other costs for which payment from such fund is authorized shall include costs of legal, financial advisory, and other professional services, printing and publication costs and costs of issuance of the Certificates. B. Debt Service Fund. There are pledged and appropriated to the Debt Service Fund ad valorem taxes levied in Section 4.02 below; and the Capitalized Interest, if any. The money in such fund shall be used for no purpose other than the payment of principal and interest on the Certificate; provided, however, that if any payment of principal or interest shall become due when there is not sufficient money in the Debt Service Fund, the Administrator shall pay the same from any other fund of the Issuer, which fund shall be reimbursed from the Debt Service Fund when the balance therein is sufficient. 4.02 Tax Levy. A. For the prompt and full payment of the principal and interest on the Certificates when due, the full faith and credit and taxing power of the Issuer are irrevocably pledged. There is levied a direct annual ad valorem tax upon all taxable property in the Issuer which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the Issuer. Said levies are for the years and in the amounts set forth below: 9 Levy Year Collection Year Amount 2024 2025 $ 7,990.50 2025 2026 $39,599.70 2026 2027 $38,543.40 2027 2028 $37,498.65 2028 2029 $36,460.20 2029 2030 $35,421.75 2030 2031 $34,383.30 2031 2032 $33,344.85 2032 2033 $32,306.40 2033 2034 $31,261.65 2034 2035 $30,174.90 2035 2036 $28,021.35 2036 2037 $26,935.65 2037 2038 $25,843.65 2038 2039 $24,746.40 2039 2040 $23,649.15 B. The tax levies are such that if collected in full they, together with estimated collections of investment earnings and other funds herein pledged and appropriated for payment of the Certificates, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Certificates. C. The tax levies shall be irrepealable so long as the Certificates are outstanding and unpaid; provided, however, that on November 30 of each year, while any Certificate issued hereunder remains outstanding, the Issuer shall reduce or cancel the above levies to the extent of funds available in the Debt Service Fund to pay principal and interest due during the ensuing year, and shall direct the County Auditor to reduce the levy for such calendar year by that amount. 4.03 Investments. Monies on deposit in the Project Fund and in the Debt Service Fund may, at the discretion of the City Administrator, be invested in securities permitted by Minnesota Statutes, Chapter 118A, that any such investments shall mature at such times and in such amounts as will permit for payment of Project costs and/or payment of the principal and interest on the Certificates when due. Section 5. Tax Covenants. 5.01 General. A. The Issuer covenants and agrees with the holders of the Certificates that the Issuer will (i) take all action on its part necessary to cause the interest on the Certificates to be exempt from federal income taxes including, without limitation, restricting, to the extent necessary, the yield on investments made with the proceeds of the Certificates 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 10 cause interest on the Certificates to be subject to federal income taxes, including, without limitation, refraining from spending the proceeds of the Certificates and investment earnings thereon on certain specified purposes. B. For purposes of qualifying for the small-issuer exception to the federal arbitrage rebate requirements, the Issuer finds, determines and declares: (1) the Issuer is a governmental unit with general taxing powers; (2) the Certificates are not “private activity bonds” as defined in Section 141 of the Internal Revenue Code of 1986, as amended (the “Code”); (3) 95% or more of the net proceeds of the Certificates are to be used for local governmental activities of the Issuer; and (4) the aggregate face amount of tax-exempt obligations (other than private activity bonds) issued by the Issuer during the calendar year in which the Certificates are issued is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. C. In order to qualify the Certificates as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the Issuer makes the following factual statements and representations: (1) the Certificates are not “private activity bonds” as defined in Section 141 of the Code; (2) the Issuer designates the Certificates as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code; (3) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the Issuer (and all entities whose obligations will be aggregated with those of the Issuer) during the calendar year in which the Certificates are being issued will not exceed $10,000,000; and (4) not more than $10,000,000 of obligations issued by the Issuer during the calendar year in which the Certificates are being issued have been designated for purposes of Section 265(b)(3) of the Code. Section 6. Miscellaneous. 6.01 Filing with County Auditor. The City Administrator is directed to file with the County Auditor a certified copy of this resolution and such other information as the County 11 Auditor may require, and to obtain from the County Auditor certificates stating that the Certificates herein authorized have been duly entered on the County Auditor’s register. 6.02 Certified Proceedings. The officers of the Issuer are authorized and directed to prepare and furnish to the Lender of the Certificates and to bond counsel certified copies of all proceedings and records of the Issuer relating to the authorization and issuance of the Certificates and other affidavits and certificates as may reasonably be requested to show the facts relating to the legality and marketability of the Certificates 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 Issuer as to the correctness of facts recited therein and the actions stated therein to have been taken. 6.03 Disclosure. No official statement or prospectus has been prepared or circulated by the Issuer in connection with the sale of the Certificates and the Lender has made its own investigation concerning the Issuer as set forth in an investment letter dated the date hereof. 6.04 Absent or Disabled Officers. In the event of the absence or disability of the Mayor or City Administrator, such officers or members of the City Council as in the opinion of the Issuer’s attorney may act in their behalf shall, without further act or authorization, execute and deliver the Certificates, and do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. Section 7. Loan Agreement. The proceeds of the Certificates will be advanced to the Issuer in accordance with the terms of this Resolution and with a Loan Agreement between the Issuer, and the Lender (the “Loan Agreement”). The Mayor and City Administrator of the Issuer are hereby authorized and directed to execute the Loan Agreement substantially in the form currently on file in the office of the Issuer. Section 8. Pre- and Post-Issuance Compliance Policy and Procedures. The Issuer has previously approved a Pre- and Post-Issuance Compliance Policy and Procedures which applies to qualifying obligations to provide for compliance with all applicable federal regulations for tax- exempt obligations or tax-advantaged obligations (collectively, the “Policy and Procedures”). The Issuer hereby ratifies the Policy and Procedures for the Bond. The City Administrator continues to be designated to be responsible for post-issuance compliance in accordance with the Policy and Procedures. Adopted: December 17, 2024 Mayor ATTEST: ____________________________________ City Administrator EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF SCANDIA, MINNESOTA HELD: DECEMBER 17, 2024 Pursuant to due call and notice thereof, a meeting of the City Council of the City of Scandia, Washington County, Minnesota, was duly held at the City Hall on December 17, 2024, at 7:00 P.M. The following members were present: and the following were absent: Member ____________________ introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF $340,000 GENERAL OBLIGATION CERTIFICATES OF INDEBTEDNESS, SERIES 2025A The motion for the adoption of the foregoing resolution was duly seconded by member ____________ and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon the resolution was declared duly passed and adopted.