02. Resolution 07-01-26-01- Scandia 2026C GO Revenue Bond for Bliss WWT Project
Staff Report
Date of Meeting: July 1, 2026
For: Honorable Mayor and Council
From: Kyle Morell, City Administrator
Subject: Resolution 07-01-26-01 – Resolution approving PFA Loan and 2026C
GO Revenue Note for Bliss Wastewater Treatment Project
Background:
The City received funding from the Public Facilities Authority (PFA) for its required Bliss
Wastewater System upgrades. The PFA funding consists of an 80% grant and a 20% loan. The
total cost of the project is $1,878,933. The city will receive $1,503,146 Point Source
Implementation Grant from PFA. An additional grant of $114,392 is from the Clean Water State
Revolving Fund. The total loan amount is $261,395. With the unanticipated Clean Water
Revolving Fund grant, the City has received approximately 86% of project funding in grant
form.
The non-executed grant loan agreement is attached. The final loan amount is $261,395. The
term is 20 years at 2.211%. Also attached is the loan payment schedule and Resolution 07-10-
26-01, which approved the 2026C General Obligation Revenue Bond required as part of the loan.
The City plans to repay the loan through user fees included in the Bliss System's annual budget.
The Revenue Note is needed to ensure repayment of the loan if user fees fail to cover the
repayment amount.
Options:
1) Approve Resolution 07-01-26-01
2) Table for future discussion
Recommendation:
Options 1
Attachment:
1) Resolution 07-01-26-01 – Resolution Approving 2026C Scandia GO Revenue Note for
Bliss Wastewater Project
2) Non-Executed Loan Agreement
3) Loan Schedule
RESOLUTION NO. 07-01-26-01
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF A GENERAL
OBLIGATION REVENUE NOTE, SERIES 2026C, AND PROVIDING FOR ITS
PAYMENT
BE IT RESOLVED by the City Council (the “Council”) of the City of Scandia, Washington
County, Minnesota (the “Issuer”), as follows:
Section 1. Authorization and Sale of Note.
1.01. Findings. It is found and determined to be necessary and in the best interest of
the Issuer, the residents of the Issuer and the environment to finance improvements to the
Issuer’s wastewater utility (the “Utility”), including the Bliss Wastewater Treatment Facility (the
“Project”) as further described in the Issuer’s application to the Minnesota Pubic Facilities
Authority (the “Lender”) for project funding.
1.02. Note for Capital Improvements to Utility. It is further found and determined to be
necessary and in the best interest of the Issuer and the residents of the Issuer to sell and issue
a general obligation revenue note of the Issuer to the Lender in an amount not-to-exceed
$300,000 to finance the Project, all pursuant to Minnesota Statutes, Section 444.075 and Chapter
475 and subject to execution by the Issuer and Lender of a loan agreement (the “Loan
Agreement”).
1.03. Issuance and Sale of Note. The Issuer authorizes the issuance and sale to the
Lender of the Issuer’s General Obligation Revenue Note, Series 2026C (the “Note”), in
substantially the form attached hereto as Attachment A, in an amount not-to-exceed $300,000,
and at an interest rate not-to-exceed 3%, to finance the Project and authorizes and approves the
Loan Agreement between the Lender and the Issuer, in substantially the form presented to the
Council and on file in the office of the City Administrator, which is incorporated by reference.
Section 2. Execution and Delivery of Note and Loan Agreement.
2.01. Terms.
A. The Note to be issued hereunder shall be dated as of the date of issuance, shall
be issued in fully registered form and lettered and numbered R-1.
B. The Note shall be in a principal amount not-to-exceed $300,000, or such lesser
amount that shall be disbursed pursuant to the Loan Agreement, shall bear interest on so much
of the principal amount of the Note as may be disbursed and remains unpaid until the principal
amount of the Note has been paid or has been provided for, at a rate not-to-exceed 3% per
annum (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Note
will payable semiannually as provided in the Loan Agreement and the Note.
C. Principal payments shall be made in the respective years and amounts set forth
on Exhibit A to the Note. Principal, interest and any premium due under the Note will be paid on
each payment date by wire payment, or by check or draft mailed at least five business days prior
to the payment date to the person in whose name the Note is registered.
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2.02. Execution. The Note 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 in accordance with the approved form. The Loan
Agreement shall be prepared for execution in accordance with the approved form and shall be
signed by the manual or electronic signature of the Mayor and attested by the manual or
electronic signature of the City Administrator in accordance with the approved form. In case any
officer whose signature shall appear on the Note shall cease to be an officer before delivery of
the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as
if such officer had remained in office until delivery.
2.03. Note Register. The Issuer will cause to be kept at its offices a register in which,
subject to such reasonable regulations as the Issuer may prescribe, the City Administrator shall
provide for the registration of transfers of ownership of the Note. The Note shall be initially
registered in the name of the Lender and shall be transferable upon the register by the Lender in
person or by its agent duly authorized in writing, upon surrender of the Note, together with a
written instrument of transfer satisfactory to the City Administrator, duly executed by the Lender
or its duly authorized agent.
2.04. Delivery. Delivery of the Note shall be made at a place mutually satisfactory to the
Issuer and the Lender. The Note shall be furnished by the Issuer without cost to the Lender. The
Note, when prepared in accordance with this Resolution and executed, shall be delivered to the
Lender by and under the direction of the City Administrator. Disbursement of the proceeds of the
Note shall be made pursuant to the Loan Agreement.
2.05. Loan Agreement to Govern. In the event of an inconsistency between a provision
of this Resolution and a provision of the Loan Agreement, the provision of the Loan Agreement
shall govern.
Section 3. Accounts and Tax Levies.
3.01. Fund. The Issuer will continue to operate its fund associated with the Utility (the
“Fund”) in accordance with Minnesota Statutes, Section 444.075, to which shall be credited all
gross revenues of the Utility and out of which will be paid all normal and reasonable expenses of
current operations of the Utility. There are created in the Fund the following accounts: the 2026C
Minnesota Public Facilities Authority Note Construction Account (the “Construction Account”) and
the 2026C Minnesota Public Facilities Authority Note Debt Service Account (the “Debt Service
Account”) which shall be separate restricted accounts in the Fund.
3.02. Construction Account. Each disbursement of proceeds of the Note which is
received pursuant to the terms of the Loan Agreement shall be credited to the Construction
Account. Monies on deposit in the Construction Account shall be used from time to time to pay
the capital costs of the Project, including but not limited to costs of planning, engineering, legal,
financial advisory, and other professional services, printing and publication costs, and costs of
issuance of the Note, as such payments become due. Upon completion of the Project, any
amounts left in the Construction Account shall be transferred to the Debt Service Account.
3.03. Debt Service Account. The money in the Debt Service Account shall be used for
no purpose other than the payment of principal and interest on the Note and other notes similarly
authorized; provided, however, that if any payment of principal or interest shall become due when
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there is not sufficient money in the Debt Service Account, the City Administrator shall pay the
same from any other funds of the Issuer and said funds shall be reimbursed for such advance
from the Debt Service Account when a sufficient balance is available therein. The Issuer further
irrevocably appropriates to the Debt Service Account for payment of the principal of and interest
on the Note:
(a) any revenues of the Utility available in the Fund after payment in full of
normal and reasonable expenses of current operations of the Utility which balances are
deemed net revenues solely to the extent allocated to pay the principal of and interest on
the Note when due; the portion of such payments allocated to the Note shall be
transferred to the Debt Service Account no later than the last business day of the month
in which such payments are received;
(b) all sums collected from the taxes, if any, extended and assessed under the
provisions of Section 3.05;
(c) all income and gain from investment of the Debt Service Account; and
(d) any funds remaining in the Construction Account after completion of the
Project and payment of the costs thereof.
3.04. No Tax Levy. The full faith and credit and taxing powers of the Issuer are
irrevocably pledged for the prompt and full payment of the principal of and interest on the Note,
as such principal and interest respectively become due. However, the monies and payments
appropriated to the Debt Service Account in Section 3.03 hereof are estimated to be not less than
five percent in excess of the principal of and interest on the Note when due and, accordingly, no
tax is levied at this time.
3.05. General Obligation Pledge. In the event the monies and payments appropriated to
the Debt Service Account in Section 3.03 hereof are insufficient to pay principal of and interest
on the Note as the same become due, the Issuer is required by law and by contract with the
holder of the Note and obligates itself to levy and cause to be extended, assessed, and collected
any additional taxes found necessary for the payment of principal of and interest on the Note.
3.06. Investments. Subject to the requirements of Section 7 of this Resolution, monies
on deposit in the Construction Account and the Debt Service Account may, at the discretion of
the City Administrator, be invested in any securities permitted by Minnesota Statutes,
Chapter 118A and in accordance with resolutions of the Issuer; provided, however, such
investments shall mature at such times and in such amounts as will permit payments by the
Issuer for authorized purposes, when due.
Section 4. Registration of Note with County Auditor. The City Administrator or
designee is directed to file with the County Auditor of Washington County, Minnesota, a certified
copy of this Resolution, together with such other information as the County Auditor may desire
concerning the Note and obtain from the County Auditor a certificate that the Note has been
entered on the County Auditor’s register. If any taxes are required to be levied under Section 3.05
hereof, the County Auditor will assess and extend each year the amount, or the reduced amount
certified by the City Administrator. The County Auditor will certify to the City Administrator the
assessed valuation of taxable property within the Issuer each year, and may each extend and
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assess the full amount of the taxes to be levied that the City Administrator computes and certifies
to the County Auditor.
Section 5. Authentication of Note Transcript.
5.01. Official Proceedings. The officers of the Issuer are authorized and directed to
furnish to the Lender certified copies of proceedings and information in their official records
relevant to the authorization and issuance of the Note and the execution and delivery of the Loan
Agreement, and such certificates and affidavits as to other matters appearing in their official
records or otherwise known to them as may be reasonably required to evidence the validity and
security of the Note, and all such certified copies, certificates and affidavits, including any
heretofore furnished, shall constitute representations and recitals of the Issuer as to the
correctness of all facts stated therein and the completion of all proceedings stated therein to have
been taken.
5.02. Absent or Disabled Officers. In the event of the absence or disability of the Mayor
or the City Administrator, such officers or members of the 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 Note, and do all things and execute all instruments and documents required to be done or
executed by such absent or disabled officers.
Section 6. Covenants. The Council covenants and agrees with the holders of the Note
that so long as any payments under the Note remain outstanding and unpaid, they will keep and
enforce the following covenants and agreements:
(a) The Issuer will continue to maintain and efficiently operate the Utility or
continue to cause the Utility to be maintained and efficiently operated as a public utility
and convenience free from competition of other like utilities, and will cause all revenue
therefrom to be deposited in bank accounts and credited to the Fund and accounts therein
as herein above provided, and will make or authorize no expenditures from those funds
and accounts except for a duly authorized purpose and in accordance with this Resolution.
(b) The Issuer will also maintain or cause to be maintained the Debt Service
Account as a separate account in the Fund and will cause monies to be credited thereto
from time to time out of net revenues from the Utility, in sums sufficient to pay principal
and interest on the Note and obligations similarly authorized when due.
(c) The Issuer will keep and maintain or cause to be kept and maintained
proper and adequate books and records of accounts separate from all the records of the
Issuer in which will be complete and correct entries as to all transactions relating to the
Utility and which shall be open to inspection and copying in accordance with the Loan
Agreement by the Lender or the Lender’s agent or attorney at any reasonable time, and
it will furnish certified transcripts therefrom upon request and upon payment of a
reasonable fee therefor and said account shall be audited at least annually by a qualified
public accountant and statements of such audit and report will be furnished to the Lender
in accordance with the requirements of the Loan Agreement.
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(d) The Issuer will cause the funds collected on account of the operations of
the Utility to be deposited in a bank whose deposits are guaranteed under the Federal
Deposit Insurance Law.
(e) The Issuer will keep the Utility insured or cause the Utility to be insured at
all times against loss by fire, tornado and other risks customarily insured against with an
insurer or insurers in good standing in such amounts as are customary for like utilities to
protect the Lender and the Issuer from any loss due to such casualty and will apply the
proceeds of such insurance to make good any such loss.
(f) The Issuer and each and all of its officers will punctually perform all duties
of reference to the Utility as required by law.
(g) The Issuer will impose and collect charges or cause the imposition and
collection of charges of the nature authorized by Minnesota Statutes, Section 444.075 at
the times and in the amounts required, along with the monies and payments appropriated
to the Debt Service Account in Section 3.03 hereof, to produce net revenues of the Utility
adequate to pay all principal and interest when due on the Note, and to create and
maintain such reserves securing said payments as may be provided in this Resolution.
Section 7. Tax Covenants.
7.01. Covenants with Respect to the Lender’s Bonds. The Issuer agrees to cooperate
with the Lender as necessary to maintain the tax-exempt status of any bonds issued by the Lender
either to fund the Note or which are secured by the Note (the “Bonds”). The Issuer specifically
agrees:
(a) Any sums from time to time held by or under the control of the Issuer
which would constitute “gross proceeds” of the Bonds (“Gross Proceeds”), as defined in
the Internal Revenue Code of 1986, as amended, and the regulations in effect with respect
thereto (the “Code”) shall not be invested at a yield in excess of the applicable yield on
the Bonds. Disbursements of proceeds of the Note shall not be reinvested by the Issuer.
In addition, said Gross Proceeds shall not be invested in obligations or deposits issued,
guaranteed or insured by the United States or any agency or instrumentality thereof if
and to the extent that such investment would cause the Bonds to be “federally
guaranteed” within the meaning of Section 149(b) of the Code.
(b) The Issuer covenants not to use the Project or to cause or permit it or any
of it to be used, or to enter into any deferred payment arrangements for the cost of such
Project, in such a manner as to cause any Bonds to be “private activity bonds” within the
meaning of Sections 103 and 141 through 150 of the Code.
(c) With respect to any Gross Proceeds, the Issuer shall comply with
requirements necessary under the Code to establish and maintain the exclusion from gross
income under Section 103 of the Code and the interest on any Bonds, including without
limitation requirements relating to temporary periods for investments, limitations on
amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess
investment earnings to the United States.
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(d) The Issuer shall comply with such instructions as may be provided from
time to time by the Lender with respect to gross proceeds of Bonds.
7.02. Covenant Regarding Tax-Exempt Status of the Note. The Issuer covenants and
agrees with the Lender that the Issuer will (i) take all action on its part necessary to cause the
interest on the Note 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 Note
and investment earnings thereon, making required payments to the federal government, if any,
and maintaining books and records in a specified manner, where appropriate, and (ii) refrain from
taking any action which would cause interest on the Note to be subject to federal income taxes,
including, without limitation, refraining from spending the proceeds of the Note and investment
earnings thereon on certain specified purposes.
7.03. Covenant as to Yield Restriction. No portion of the proceeds of the Note shall be
used directly or indirectly to acquire higher yielding investments or to replace funds which were
used directly or indirectly to acquire higher yielding investments, except (i) for a reasonable
temporary period until such proceeds are needed for the purpose for which the Note was issued,
and (ii) in addition to the above, in an amount not greater than the lesser of five percent of the
proceeds of the Note or $100,000. To this effect, any proceeds of the Note and any sums from
time to time held in the Debt Service Account (or any other Issuer account which will be used to
pay principal and interest to become due on the Note) in excess of amounts which under the
applicable federal arbitrage regulations may be invested without regard as to yield shall not be
invested at a yield in excess of the applicable yield restrictions imposed by the arbitrage
regulations on such investments after taking into account any applicable temporary periods or
minor portion made available under the federal arbitrage regulations.
7.04. Arbitrage Rebate Exemption. For purposes of qualifying for the small-issuer
exception to the federal arbitrage rebate requirements, the Issuer finds, determines and declares:
(a) the Issuer is a governmental unit with general taxing powers;
(b) the Note is not a “private activity bond” as defined in Section 141 of the
Code;
(c) 95% or more of the net proceeds of the Note is to be used for local
governmental activities of the Issuer; and
(d) the aggregate face amount of the tax-exempt obligations (other than
private activity bonds) issued by the Issuer during the calendar year in which the Note is
issued is not reasonably expected to exceed $5,000,000, all within the meaning of
Section 148(f)(4)(D) of the Code.
7.05. Bank Qualified Obligations. In order to qualify the Note as a “qualified tax-exempt
obligation” within the meaning of Section 265(b)(3) of the Code, the Issuer makes the following
factual statements and representations:
(a) the Note is not a “private activity bond” as defined in Section 141 of the
Code;
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(b) the Issuer designates the Note as a “qualified tax-exempt obligation” for
purposes of Section 265(b)(3) of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations, other than
obligations described in clause (ii) of Section 265(b)(3)(C), 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 Note is issued will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations (other than certain qualified
refunding obligations, which are not taken into account) will be issued by the Issuer during
the calendar year in which the Note is issued have been designated for the purposes of
Section 265(b)(3) of the Code.
7.06. Declaration of Official Intent to Reimburse. The Issuer has incurred and paid for
within 60 days of the date hereof, or reasonably expects to incur, expenditures with respect to
the Project prior to the issuance of the Note, and hereby declares its official intent to reimburse
itself for the payment of such expenditures from the proceeds of the Note not later than 18
months after the later of (1) the date of payment of the expenditure or (2) the date the Project
is placed in service (but in no event more than 3 years after actual payment).
Section 8. 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 Bonds. The City Administrator continues
to be designated to be responsible for post-issuance compliance in accordance with the Policy
and Procedures.
Approved by the Council on July 1, 2026.
Mayor
Attest:
City Administrator
ATTACHMENT A
FORM OF GENERAL OBLIGATION REVENUE NOTE
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WASHINGTON
CITY OF SCANDIA
GENERAL OBLIGATION REVENUE NOTE, SERIES 2026C
R-1 Rate: ____% $_______
Date of Note: _______________, 2026
Final Maturity Date: __________, 20___
FOR VALUE RECEIVED, the City of Scandia, Washington County, Minnesota, a duly
organized and existing municipal corporation and political subdivision of the State of Minnesota
(the “Issuer”), and whose office address is 14727 209th Street North, Scandia, MN 55073, for
value received, promises to pay to the MINNESOTA PUBLIC FACILITIES AUTHORITY, its
successors or registered assigns (the “Lender”) at its offices in St. Paul, Minnesota, or such other
place as the Lender may designate in writing, the principal sum of [INSERT PAR AMOUNT]
($_______), or such portion thereof as is disbursed to the Issuer (the “Loan”), pursuant to the
Minnesota Public Facilities Authority Bond Purchase and Project Loan Agreement with Water
Infrastructure Funding Grant between the Issuer and the Lender dated ___________, 2026 (the
“Loan Agreement”), the provisions of which are incorporated as though fully set forth herein.
The principal of this Note must be repaid in the amounts and on the dates set forth in the
schedule attached hereto as Exhibit A (notwithstanding the rate of disbursement of the principal
hereof), subject to adjustment as provided in the Loan Agreement, together with interest and
services fees collectively at the annual rate set forth above, for the period starting on the date
set forth above through the date on which no principal remains unpaid, provided, however, that
interest and service fees shall accrue only on the aggregate amount of the principal disbursed
and outstanding hereunder. Interest shall be calculated on the basis of a 360-day year of twelve,
30-day months. The entire outstanding principal balance and interest and service fees thereon, if
not sooner paid, must be paid in full on the final maturity date set forth above. As provided in
Article 1 of the Loan Agreement, Exhibit A hereto may be revised and replaced in its entirety,
which replacement shall govern the dates and amounts of payments due hereunder.
Both principal hereof and interest hereon are payable in lawful money of the United States
of America by wire payment, check or draft mailed at least five business days prior to the due
date directly to the registered owner hereof shown on the Note registration records maintained
by the Issuer, without, except for the final payment of principal on this Note, the presentation or
surrender of this Note, and all such payments shall discharge the obligations of the Issuer to the
extent of the payments so made. The final principal payment shall be made upon presentation
and surrender of this Note when 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.
Attachment A, page 2
This Note is issued by the Issuer pursuant to the authority contained in Minnesota
Statutes, Section 444.075 and Chapter 475, and all other laws thereunto enabling, and pursuant
to an authorizing resolution adopted by the Issuer on July 1, 2026 (the “Resolution”), for the
purpose of financing improvements to the Issuer’s wastewater utility, including the Bliss
Wastewater Treatment Facility (the “Project”).
This Note is subject to redemption and prepayment with the written consent of the Lender,
in whole or in part on such dates and at such prices and upon such other terms as are specified
in the Loan Agreement.
This Note is transferable by the registered owner hereof upon surrender of this Note for
transfer at the office of the Issuer duly endorsed and accompanied by a written instrument of
transfer in form satisfactory to the Issuer and executed by the registered owner hereof or the
owner’s attorney duly authorized in writing. The Issuer may deem and treat the person in whose
name this Note is last registered upon the books of the Issuer, with such registration noted on
this Note, as the absolute owner hereof for the purpose of receiving payment of or on account of
the principal balance, redemption price or interest and for all other purposes; all such payments
so made to the registered holder or upon the order thereof shall be valid and effectual to satisfy
and discharge the liability upon this Note to the extent of the sum or sums so paid, and the Issuer
shall not be affected by any notice to the contrary.
IT IS CERTIFIED AND RECITED that all acts and conditions required by the Constitution
and the laws of the State of Minnesota to be done and to exist precedent to and in the issuance
of this Note 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 matter as so required; that all
revenues received in payment of debt service cost allocations for this Note are irrevocably pledged
and appropriated to the 2026C Minnesota Public Facilities Authority Note Debt Service Account
established in the Resolution to pay when due the principal of and interest on this Note and
obligations similarly authorized as provided in the Resolution; that, if needed to pay such principal
and interest, the Issuer is required to levy ad valorem taxes on all taxable property in the Issuer,
and such taxes may be levied without limitation of rate or amount; and that the issuance of this
Note does not cause the indebtedness of the Issuer to exceed any constitutional or statutory
limitation.
Additional provisions of this Note are contained in the Loan Agreement and such provisions
shall for all purposes have the same effect as though fully set forth at this place.
Attachment A, page 3
IN WITNESS WHEREOF, the Issuer has caused this Note to be executed in its name by
the manual signatures of its Mayor and City Administrator.
(Form – No Signature Required)
Mayor
Attest:
(Form – No Signature Required)
City Administrator
Attachment A, page 4
PROVISIONS AS TO REGISTRATION
The ownership of the unpaid principal balance of this Note and the interest accruing
thereon is registered on the books of the City of Scandia, Minnesota, in the name of the holder
last noted below.
Date of
Registration
Name and Address
of Registered Owner Signature of City Administrator
7/___/2026
State of Minnesota
Public Facilities Authority
1st National Bank Bldg., Suite
W820
332 Minnesota Street
St. Paul, MN 55101-1378
Federal Tax I.D. No.: 41-6007162
(Form-No Signature Required)
Attachment A, page 5
ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto
______________________________________ the within Note and all rights thereunder, and
irrevocably constitutes and appoints __________________________________ attorney to
transfer the said Note on the books kept for registration of the within Note, with full power of
substitution in the premises.
Dated: ________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Note in every
particular, without alteration or enlargement
or any change whatever.
The City Administrator will not effect transfer of this Note unless the information
concerning the assignee requested below is provided.
Name and Address: _______________________________________
_______________________________________
_______________________________________
Taxpayer Identification No.: _______________________
Attachment A, page 6
EXHIBIT A TO NOTE
INSERT PAYMENT SCHEDULE FROM PFA LOAN AGREEMENT
STATE OF MINNESOTA )
) ss.
COUNTY OF WASHINGTON )
I, City Administrator, the duly qualified and acting City Administrator of the City of Scandia,
Minnesota (the “Issuer”), certify that I am the official custodian of the records of the Issuer, and
that I have compared the attached copy with the original records of the Issuer, and that it is a
true and correct transcript taken from the records of the proceedings of the meeting of the City
Council, held at the City of Scandia, Minnesota, on July 1, 2026.
IN WITNESS WHEREOF, I have hereunto set my hand on July 1, 2026.
City Administrator
Non-executable
Scandia_CWRF_01 Page 1 of 12
MINNESOTA PUBLIC FACILITIES AUTHORITY
BOND PURCHASE AND PROJECT LOAN AGREEMENT WITH
POINT SOURCE IMPLEMENTATION GRANT
This BOND PURCHASE AND PROJECT LOAN AGREEMENT with POINT SOURCE IMPLEMENTATION GRANT
(“the Agreement”), is between the Minnesota Public Facilities Authority (the "Authority") and the City
of Scandia (“Recipient”) and is dated June 11, 2026.
The Project consists of the planning, design, and construction of improvements to the existing
wastewater treatment facility and a new total nitrogen removal process using denitrification (“the
Project”). The Project is further described and detailed in the MN Pollution Control Agency's
certification(s) dated June 27, 2024 and in the Recipient’s Project application which is incorporated
herein.
Program Funding for the Project Name Legal citations Funding IDs Amounts
Point Source Implementation ("the PSIG MS 446A.073 MPFA-PSIG-G-082-FY26 $1,503,146
Grant Program Grant")
Clean Water State Revolving Fund ("the Loan") MS 446A.07; MPFA-CWRF-L-082-FY26 $261,395
Loan MN Rules 7380
.0400-.0480
Clean Water State Revolving Fund ("the Principal MS 446A.07 MPFA-CWRF-G-082-FY26 $114,392
Principal Forgiveness Grant Forgiveness
Grant")
Total Authority Project Financing: $1,878,933
ARTICLE 1 – TERMS AND CONDITIONS
Section 1.1 Terms. (a) General: The Authority hereby commits, subject to the availability of funds and
the conditions and legal citations herein set forth, to provide ONE MILLION EIGHT HUNDRED SEVENTY
EIGHT THOUSAND NINE HUNDRED THIRTY THREE DOLLARS ($1,878,933) to the Recipient for the purpose
of financing eligible costs of the Project.
(b) Loan: The Loan shall be evidenced by the Note described in Section 1.4 of this Agreement (the
“Note”). The final maturity date of the Loan will be August 20, 2045. The aggregate principal amount of
the Loan disbursed and outstanding will bear interest and servicing fees collectively at the rate of 2.211%
per annum accruing from and after the date of the Note through the date on which no principal of the
Loan remains unpaid and all accrued interest and servicing fees thereon have been paid.
(c) Grant(s): The PSIG Grant and the Principal Forgiveness Grant are granted and are not required to be
repaid except as otherwise provided in Article 9 of this Agreement.
Section 1.2 Authority Sources of Funds. (a) The Recipient acknowledges that the Authority may use the
proceeds of one or more series of the Authority’s revenue bonds (the "Bonds"), federal capitalization
grants, proceeds of state general obligation bonds, state appropriations from the Clean Water Legacy
Fund, or other funds of the Authority, or a combination thereof, to fund the Agreement.
(b) At the written request of the Recipient, the Authority will provide information with respect to the
funding of the Agreement, from time to time.
(c) Allocation and pledging of Loan: The Authority may, at any time, pledge the Loan as security for its
Bonds. The Authority in its sole discretion may allocate the Loan to one or more sources of funds and
may from time to time reallocate the Loan to one or more different sources of funds, including one or
more different series of Bonds (whether or not that series of Bonds refunded the series of Bonds to
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which the Loan was originally allocated), or may sell the Loan if permitted by the documents relating to
its Bonds.
Section 1.3 Disbursements. (a) Delivery of Note: No funds will be disbursed by the Authority to the
Recipient until the Recipient has delivered its Note to the Authority as set forth in section 1.4.
(b) All Recipient disbursement requests will be subject to Authority approval and will be disbursed on a
cost reimbursement basis, consistent with the budget presented in the Recipient's application. The
Authority may withhold or disallow all or part of the amount requested if the Authority determines the
request is not in compliance with this Agreement, applicable federal and state laws, regulations or rules
as then in effect.
(c) The Authority will disburse funds pursuant to approved disbursement requests complying with the
provisions of this Agreement. Each disbursement request must be for eligible costs for completed work
on the Project and must be submitted on or before the deadlines established by the Authority and on a
form prescribed by the Authority. Each disbursement request must include supporting invoices and
billing statements and be signed by an employee or elected official of the Recipient.
(d) The Authority will reimburse the Recipient for eligible Project costs incurred prior to the execution of
this Agreement only to the extent approved in connection with the Authority’s approval of the
Recipient’s application.
(e) The Authority will make disbursements to the Recipient within 30 days of receipt of the Recipient’s
request, unless the Authority determines to withhold disbursement in accordance with the provisions of
this Agreement. The Authority will endeavor to pay disbursement requests submitted by the Recipient
not later than the 15th day of the month by the last day of the same month.
(f) If the entire amount specified in Section 1.1 is not fully disbursed by June 30, 2029 the Authority will
not make any further disbursements. In that event or if final eligible Project costs are less than the total
financing amount specified in Section 1.1, the undisbursed balances of the PSIG Grant and the Principal
Forgiveness Grant will be cancelled, and the undisbursed balance of the Loan will be applied to the
outstanding principal installments of the Loan on a pro rata basis or as otherwise determined by the
Authority. The Authority will revise Exhibit A to this Agreement to reflect the reduction in principal
amount and promptly deliver a copy to the Recipient.
Section 1.4 Security. (a) The Recipient must issue to the Authority its Tax Exempt General Obligation
Revenue Note to evidence its obligation to repay the Loan. The Authority will not disburse funds to the
Recipient under this Agreement until the Recipient delivers to the Authority the executed Note, a
certified copy of resolutions or other authority by the appropriate governing body or bodies as have
authorized the execution and performance of this Agreement and the Note in accordance with
applicable law, and all opinions, certificates and documents requested by, and in a form acceptable to,
the Authority.
(b) The Recipient represents and agrees that the Note is a general obligation debt of the Recipient and
will be shown as such on its financial statements and be treated in all respects as a general obligation
debt of the Recipient. For purposes of permitting sale of the Note to the Authority, the Authority
represents that it is a "board, department or agency" of the State of Minnesota within the meaning of
Minnesota Statutes, Section 475.60, subdivision 2, clause (4), as amended.
(c) The obligations of the Recipient under the Note evidence amounts payable under the Loan. Each
payment made pursuant to the Note will be deemed to be a credit against the corresponding obligation
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of the Recipient under the Loan and any such payment will fulfill the Recipient’s obligation to pay that
amount hereunder.
(d) The Recipient agrees to impose and collect rates and charges in compliance with Minnesota Statutes
and in accordance with the Recipient’s service charge system, so that sufficient gross revenues are
available, together with other sources as may be applicable, for the payment of system costs, including
operation and maintenance expenses and principal, interest and servicing fees due on any outstanding
debt payable from those revenues. The Recipient agrees to annually review and ensure that the gross
revenues are sufficient for the payment of all system costs.
Section 1.5 Mandatory Payments. (a) The Recipient must repay the principal amount of the Loan,
together with accrued interest and servicing fees, in the amounts and on the dates set forth in Exhibit A
attached hereto (notwithstanding the rate of disbursement of the proceeds of the Loan), subject to
adjustment as set forth in Section 1.3 or 1.6. The interest payment shown on Exhibit A is for
informational purposes only; the actual interest payment will be the amount of interest which has
accrued to the date of payment. The Authority will be entitled to retain for its own purposes any interest
earnings on Loan proceeds that are not disbursed and will not be obligated to credit any such interest
earnings against any required repayment of principal or payment of interest and servicing fees. Any
payment of principal or interest received by the Authority in excess of the amounts set forth in Exhibit
A, as then in effect, which is not a mandatory payment as designated in paragraph (b), or not expressly
designated by the Recipient to be treated as an optional prepayment may, in the sole discretion of the
Authority, be (i) held without interest payable by the Authority and applied to a future payment due on
the Loan in a manner determined by the Authority, (ii) treated as a prepayment of principal on the Loan,
or (iii) returned to the Recipient as an overpayment. Other than prepayments, the Authority will apply
any payments received under the Note as follows: first, to the payment of any costs or expenses incurred
by the Authority in enforcing any provision of the Note or this Agreement; second, to the payment of
accrued and unpaid interest and servicing fees on the Note; and third, to the payment of principal of the
Note then due.
(b) If the Recipient has pledged to the repayment of the Loan revenues subject to prepayment or lump-
sum payments by a third party, such as special assessments or connection charges from another
municipality, the Recipient will notify the Authority immediately upon receipt of any such payment. The
Authority, in its sole discretion, may direct the Recipient to use the funds for the payment of eligible
construction costs of the Project, or to transmit the funds to the Authority for payment on the Loan,
immediately or at a later date. Any such payment received by the Authority may be applied to reduce
each unpaid annual principal installment of the Loan in the proportion that such installment bears to the
total of all unpaid principal installments, or, in the sole discretion of the Authority, may be applied to
one or more future principal payments on the Loan in a manner determined by the Authority.
Section 1.6 Optional Prepayments. (a) The Recipient may not prepay the Loan except upon written
consent of the Authority. If the Authority has consented, then upon 45 days’ prior written notice to the
Authority (or such lesser period as the Authority may accept), the Recipient may prepay the Loan and
the Note, in whole or in part, on any February 20 or August 20 at a redemption price equal to the principal
amount to be prepaid, together with accrued interest and servicing fees thereon to the redemption date
and a premium equal to all fees and expenses of the Authority, if any, in connection with the
prepayment, including any fees, expenses or other costs relating to the payment and redemption of the
Bonds as determined by the Authority.
(b) The Authority may require that the Recipient, at its sole cost and expense, deliver to the Authority
an opinion from a law firm, selected by the Authority, having a national reputation in the field of
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municipal finance law whose legal opinions are generally accepted by purchasers of municipal bonds
("Bond Counsel") to the effect that such prepayment will not cause the interest on the Note to be
included in the gross income of the recipient thereof for federal income tax purposes.
(c) The Authority will apply any amount paid by the Recipient to prepay all or a portion of the Note as
follows: first, to the payment of fees, expenses and other costs of the Authority as provided in
Subsection (a); second, to the payment of interest and servicing fees on the principal amount of the Note
to be prepaid; and, third, to the principal of the Note. The principal amount of a partial prepayment will,
in the sole discretion of the Authority, (i) be applied to one or more future principal payments of the
Loan in a manner determined by the Authority, or (ii) be applied to reduce each unpaid annual principal
installment of the Loan in the proportion that such installment bears to the total of all unpaid principal
installments (i.e., the remaining principal payment schedule shall be re-amortized to provide
proportionately reduced principal payments in each year).
ARTICLE 2 – RECIPIENT RESPONSIBILITIES AND PROJECT COMPLIANCE
Section 2.1 Recipient Responsibilities with Respect to the Project. (a) The Recipient must meet all
requirements in the project application submitted to the Authority as to compliance with federal and
state laws, rules and regulations and include in any contract or subcontract related to the Project
provisions requiring contractor and subcontractor compliance with applicable state and federal laws.
The requirements in that application are hereby incorporated by reference.
(b) The Recipient agrees to commence construction and complete the Project with reasonable diligence,
regardless of the sufficiency of loans or grants therefor from the Authority to pay eligible project costs.
(c) The Recipient will not enter into a sale, lease, transfer or other use agreement of any part of the
Project, or change the use of the Project, without the prior written approval of the Authority if that sale,
lease, transfer, agreement or change in use would (i) violate the covenants set forth in Article 3 or Article
4, or (ii) violate the conditions under which any capitalization grants were furnished by the United States
Environmental Protection Agency (the “EPA”), or (iii) otherwise violate any terms or conditions of this
Agreement.
(d) The Recipient must maintain adequate property insurance coverage for the Project in those amounts
and with those limits as it determines in good faith to be reasonable or in those amounts and with those
limits as the Authority may require from time to time. The Recipient may substitute adequate, actuarially
sound self-insurance or risk retention program(s) for property insurance coverage, so long as such
program(s) are consistent with applicable laws and state and federal regulations.
(e) The Recipient must complete the Project in accordance with all applicable federal, state and local
statutes, rules, regulations, ordinances, reporting requirements, approvals, and state agency
certifications governing the design and construction of the Project, and operate the Project’s system in
compliance with all applicable federal and state laws and regulations and permit requirements.
(f) The Recipient agrees to exert all reasonable efforts to investigate claims that the Recipient may have
against third parties with respect to the construction of the Project and, in appropriate circumstances,
take whatever action, including legal action, the Recipient reasonably determines to be appropriate.
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(g) Clean Water Legacy logo: The Recipient must display a sign with the Clean Water Legacy logo at the
project site or other public location identifying that the project was built with assistance from the Clean
Water, Land & Legacy Amendment.
Section 2.2 Construction Compliance. (a) State prevailing wages: The Recipient must comply with the
provisions of prevailing wage requirements set forth in Minnesota Statutes, Sections 177.41 to 177.44,
as then in effect.
(b) Federal prevailing wages: In addition to the prevailing wage requirements under Subsection (a), the
Recipient must comply with, and require that all laborers and mechanics employed by contractors and
subcontractors on the Project be paid wages at rates not less than those prevailing on projects of a
similar character in the locality as determined by the Secretary of Labor in accordance with, the Davis-
Bacon Act (40 U.S.C., sec. 276a through 276a-5), as amended.
(c) Federal American Iron and Steel: The Recipient will comply with the American Iron and Steel
requirements of Section 608 of the Federal Water Pollution Control Act, unless the Project is granted a
waiver from the EPA.
(d) Federal Build America, Buy America (BABA): The Project may be subject to the Buy American
Sourcing requirements under the Build America, Buy America provisions of the Infrastructure
Investment and Jobs Act (IIJA) (P.L. 117-58 §§70911-70917).
ARTICLE 3 – TAX COMPLIANCE COVENANTS
The Recipient acknowledges that the Note is intended to bear interest that is excluded from gross
income of the owner thereof for federal and State of Minnesota income tax purposes (a “Tax-exempt
Note”) and may be funded by the Authority from the proceeds of the Authority’s Bonds that are intended
to bear interest that is excluded from gross income of the owner thereof for federal and State of
Minnesota income tax purposes (“Tax-exempt Bonds”). The Recipient also acknowledges that,
regardless of the source of funding, the Authority may pledge the Loan and the related Note as security
for, and as a source of, the payment of debt service on any or all of its Tax-exempt Bonds. In
consideration of these facts, the Recipient covenants and agrees with the Authority, whether or not strict
compliance with those agreements is required to maintain the Note as a Tax-exempt Note or the
Authority’s Bonds as Tax-exempt Bonds, as follows:
(a) The Recipient will not take, or, to the extent under its control, permit to be taken, any action that
would cause the Note not to be a Tax-exempt Note or any Authority Bonds not to be Tax-exempt Bonds
and will not omit from taking, or cause to be taken, any action required to maintain the Note as a Tax-
exempt Note or the Authority’s Bonds as Tax-exempt Bonds.
(b) The Recipient will take all actions with respect to the Note necessary to comply with all instructions
and requests of the Authority relating to maintaining the Authority’s Bonds as Tax-exempt Bonds and
the Note as a Tax-exempt Note or compliance with the agreements set forth in this Section or in any Tax
Compliance Certificate (hereinafter defined).
(c) The Recipient will comply with all requirements of any certificate or agreement (“Tax Compliance
Certificate”) executed and delivered by it in connection with the issuance of the Note.
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(d) The Recipient will promptly notify the Executive Director of the Authority in writing of any action or
event which adversely affects the status of the Note as a Tax-exempt Note or any of the Authority’s
Bonds as Tax-exempt Bonds.
(e) The Recipient will not use any of the proceeds of the Loan to pay the costs of any facility used or to
be used during the term of the Loan for any private business use or to make a private loan within the
meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the “Code”).
(f) The Recipient will not repay the Loan from, or secure repayment of the Loan by, property used or to
be used for a private business use or payments in respect of such property within the meaning of Section
141 of the Code, except as specifically permitted in writing by the Authority.
(g) The Recipient will not establish any fund or account, other than a bona fide debt service fund, securing
the payment of the Tax-exempt Note or Tax-exempt Bonds or from which the Recipient reasonably
expects to pay debt service on the Loan, or in any other respect create “gross proceeds,” within the
meaning of the Code, of the Tax-exempt Note or Tax-exempt Bonds, except as specifically permitted in
writing by the Authority. In addition, the Recipient will not invest any gross proceeds in obligations or
deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality
thereof if and to the extent that investment would cause the Tax-Exempt Note or Tax-exempt Bonds to
be “federally guaranteed” within the meaning of Section 149(b) of the Code.
(h) The Recipient will not invest any moneys constituting “gross proceeds” of the Tax-exempt Note or
Tax-exempt Bonds other than in a fair market, arms’ length transaction and at a yield, within the meaning
of the Code, in excess of the lesser of the yield on the Tax-exempt Note or the Tax-exempt Bonds
applicable to the Loan and will apply all Loan proceeds within five days of the receipt thereof by the
Recipient consistent with the terms of the Recipient’s disbursement request.
(i) Except as permitted under Treasury Regulations, Section 1.150-2, and Section 1.4(d) hereof, the
Recipient will not use Loan proceeds to reimburse itself for any payments of project costs that the
Recipient made from other funds, if the original payment was made prior to the earlier of the issuance
of the Authority Bonds used to fund the Loan or the execution and delivery of this Agreement or if the
original payment was made from the proceeds of other debt of the Recipient.
(j) Other than as provided in Section 4.1 hereof, the allocation by the Authority of funds it uses to
purchase the Loan, including different series of Tax-exempt Bonds, is at the sole discretion of the
Authority and that allocation is binding on the Recipient.
(k) With respect to any gross proceeds of the Tax-exempt Bonds created by the Recipient, the Recipient
will be liable to the Authority for any amount the Authority is required to rebate to the United States as
excess investment earnings pursuant to Section 148 of the Code.
The Authority may, in its sole discretion and only upon receipt of an opinion of counsel to the Authority,
waive any of the agreements set forth in this Article 3.
ARTICLE 4 – COMPLIANCE WITH STATE BOND REQUIREMENTS
Section 4.1 State Bond Financed Property. The Recipient and the Authority acknowledge and agree that
the Recipient’s ownership interest in the Project, consisting of real property, and, if applicable, all
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facilities located, or that will be constructed and located, on that real property, and all equipment that
is a part thereof, that was purchased with the proceeds of state general obligation bond proceeds
constitutes “State Bond Financed Property”, as that term is used in Minnesota Statutes, Section 16A.695
and the “Fourth Order Amending Order of the Commissioner of Finance Relating to Use and Sale of State
Bond Financed Property” dated July 30, 2012 (the “Order”), as such may be amended, modified,
supplemented, or replaced from time to time, and therefore the provisions contained in that statute and
order apply to the Recipient’s ownership interest in the Project and any Use contracts relating thereto.
The Recipient agrees that the proceeds of the Agreement must be used, and the Project must be
operated, in a manner that complies with Minnesota Statutes, Section 16A.695 and the Order. The
Recipient must file the required state bond financed property declaration as provided in the Order and
provide a copy of the filed declaration to the Authority, unless the filing requirement is waived in writing
by the Commissioner of Minnesota Management and Budget.
Section 4.2 Lease or Management Contract. The Recipient agrees that any lease or management or
similar contract (each a “Use Agreement”) it enters into with respect to property constituting all or a
part of the State Bond Financed Property must comply with the following requirements:
(a) It must be for the express purpose of carrying out a governmental program established or authorized
by law and established by official action of the Recipient.
(b) It must be approved, in writing, by the Commissioner of Minnesota Management and Budget.
(c) It must be for a term, including any renewals that are solely at the option of the lessee or manager,
that is substantially less than the useful life of the property subject to that lease or management
contract, but may allow renewal beyond that term upon determination by the Recipient that the use
continues to carry out the governmental program.
(d) It must be terminable by the Recipient if the other contracting party defaults under the contract, or
if the governmental program is terminated or changed.
(e) It must provide for oversight by the Recipient of the operation of the property that is the subject of
the Use Agreement.
(f) It must specifically identify the statute that provides the Recipient authority to enter into the Use
Agreement.
(g) It must contain a provision stating that the Use Agreement is being entered into in order to carry out
a governmental program and must specifically identify the governmental program.
Section 4.3 Sale. The Recipient must not sell any property constituting all or a part of the State Bond
Financed Property unless the sale complies with the following requirements:
(a) The Recipient determines by official action that the property is no longer usable or needed by the
Recipient to carry out the governmental program for which it was acquired or constructed.
(b) The sale must be made as authorized by law.
(c) The sale must be for fair market value as defined in Minnesota Statutes, Section 16A.695 as then in
effect.
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(d) The Recipient obtains the prior written consent of the Commissioner of Minnesota Management and
Budget.
Section 4.4 Changes to Minnesota Statute 16A.695 or the Order. In the event that Minnesota Statutes
Section 16A.695 or the Order is amended in a manner that reduces any requirement imposed upon the
Recipient, or if the Recipient’s interest in the State Bond Financed Property is exempt from Minnesota
Statutes, Section 16A.695 or the Order, then upon written request by the Recipient, the Authority will
enter into and execute an amendment to this Agreement to implement that amendment to, or exempt
the interest in the Project from, Minnesota Statutes, Section 16A.695 and the Order.
Section 4.5 Waiver. The Authority may waive the requirements of Article 4 at any time upon
determination by the Authority, and after notifying the Commissioner of Minnesota Management and
Budget, that the Project has not been and will not be funded from the proceeds of state general
obligation bonds.
ARTICLE 5 – DISCLOSURE
Section 5.1 Information for Disclosure Documents. (a) The Recipient agrees to provide to the Authority
such information with respect to the Recipient, its duties, operations and functions as may be reasonably
requested by the Authority, and hereby consents to its inclusion in the Authority's official statement(s)
used in connection with issuance and sale or the re-marketing of its Bonds or continuing disclosure with
respect to its Bonds (collectively, the “Disclosure Documents”), whether or not all or a portion of the
proceeds of Bonds were or will be loaned to the Recipient.
(b) At the request of the Authority, the Recipient will certify and represent that the information with
respect to the Recipient in any Disclosure Document does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which they were made, not misleading; provided, however, that in no event will the Authority
require the Recipient to make any representation about any other information in the Disclosure
Documents or as to any Disclosure Document in its entirety. If for any reason the Recipient determines
that it is not able to make that certification and representation, it will provide to the Authority the
information for inclusion in the Disclosure Documents necessary for the Recipient to make the
certification and representation.
(c) If at any time during the period ending 90 days after the date the Recipient provides information to
Authority for inclusion in a Disclosure Document any event occurs that the Recipient believes would
cause the information with respect to the Recipient in the Disclosure Document to omit a material fact
or make the statements therein misleading, the Recipient agrees to promptly notify the Authority in
writing of that event and provide information for inclusion in the Disclosure Document or an amendment
thereof or a supplement thereto. At the request of the Authority, the Recipient will also provide the
certification and representation required in (b) above with respect to that information.
(d) The Recipient agrees to provide such information as may be reasonably requested by any rating
agency in connection with rating the Bonds of the Authority.
Section 5.2 Continuing Disclosure. If the Authority, in its sole discretion, determines, at any time prior
to payment of the Loan in full, (i) that the Recipient is a material "obligated person," as the term
"obligated person" is defined in Rule 15c2-12 promulgated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended or supplemented, including any successor
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regulation or statute thereto ("Rule 15c2-12") or (ii) that an event has occurred with respect to the
Recipient or the Loan that must be disclosed under Rule 15c2-12, or (iii) that any other action of the
Recipient has occurred which the Authority determines in its sole discretion is material to an investor in
the Bonds, the Recipient covenants that it will authorize and provide to the Authority, for inclusion in a
Disclosure Document, all statements and information relating to the Recipient deemed material by the
Authority for the purpose of satisfying Rule 15c2-12 as well as Rule 10b-5 promulgated pursuant to the
Securities Exchange Act of 1934, as amended or supplemented, including any successor regulation or
statute thereto ("Rule 10b-5"), including certificates and written representations of the Recipient
evidencing satisfaction of the requirements of Rule 15c2-12 and Rule 10b-5. The Authority, in its sole
discretion and as set forth in a resolution or official statement of the Authority, will determine materiality
under each of clause (i) and clause (iii) pursuant to criteria established from time to time. The Recipient
further covenants that, if determined to be such a material obligated person, it will execute and deliver
a continuing disclosure agreement, in that form as the Authority determines to be necessary, desirable
or convenient, in its sole discretion, for the purpose of meeting the requirements of Rule 15c2-12.
Pursuant to the terms and provisions of that continuing disclosure agreement, the Recipient will
thereafter provide ongoing disclosure with respect to all annual and event information and financial
statements relating to the Recipient required by a continuing disclosure undertaking under Rule 15c-12.
The Recipient further agrees that the Authority will have the right to disclose any information about the
Recipient or the Loan, whether or not received from the Recipient, determined by the Authority in its
sole discretion, to be material with respect to any of its Bonds.
ARTICLE 6 – SYSTEM REPLACEMENT FUND
Pursuant to Minnesota Statutes, Section 446A.072, Subdivision 12, the Recipient must establish a system
replacement fund in its official books and records for the major rehabilitation, expansion, or replacement
of the system of the Recipient. The Recipient must deposit in the replacement fund each calendar year
a minimum of $0.50 per 1,000 gallons of system flow. Amounts deposited in the fund must remain in
the fund for the term of the Loan, unless use of all or a portion of the fund is approved in writing by the
Authority for the major rehabilitation, expansion, or replacement of the system. By March 1 of each
year, the Recipient must submit a report to the Authority identifying the amount deposited into the fund
during the prior calendar year and the balance of the fund as of the end of the prior calendar year.
ARTICLE 7 - FINANCIAL RECORDS, AUDITS, REPORTS AND INSPECTIONS
Section 7.1 Financial Recordkeeping. For all expenditures made pursuant to this Agreement, the
Recipient must keep financial accounts and records in accordance with generally accepted accounting
principles including invoices, contracts, receipts, vouchers and other documents sufficient to evidence
in proper detail the nature and propriety of the expenditures and any investments made with proceeds
of the Loan or other “gross proceeds” of the Note or the tax-exempt Bonds of the Authority. Such
accounts and records must be accessible and available for a minimum of six years from the date of
initiation of operation of the Project and for so long as the Note is outstanding for examination by
authorized representatives of the Authority, the Office of the Legislative Auditor, the Office of the State
Auditor and the EPA Office of Inspector General.
Section 7.2 Annual Financial Reports. (a) The Recipient must annually provide to the Authority for the
term of the Loan a copy of an independent audit of its financial statements. All audit reports must be
submitted within 30 days after the completion of the audit but no later than one year after the end of
the fiscal year to be audited. The audits must be conducted in accordance with generally accepted
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government auditing standards and in compliance with Subpart F (Audit Requirements) of Title 2 U.S.
Code of Federal Regulations Part 200.
(b) The Recipient must describe the Note as general obligation debt of the Recipient in its annual audited
financial statements for the term of the Loan.
Section 7.3 General. The Recipient must submit the project reports required by the Authority on forms
prescribed by the Authority.
Section 7.4 Inspections. The Recipient, upon reasonable request by the Authority, must allow the
Authority and its agents to inspect the Project.
ARTICLE 8 – GOVERNMENT DATA PRACTICES
The Recipient agrees, with respect to any data that it possesses regarding the Project, to comply with all
of the provisions and restrictions contained in the Minnesota Government Data Practices Act, Minnesota
Statutes, Chapter 13, that exist as of the date of this Agreement and as such may subsequently be
amended, modified or replaced from time to time.
ARTICLE 9 - DEFAULT AND REMEDIES
Section 9.1. Events of Default. Any of the following is an event of default under this Agreement:
(a) The Recipient does not make a Loan payment when due;
(b) The Recipient does not comply with any other provision of this Agreement or the Note after written
notice from the Authority, and for a three-month period the Recipient does not cure that default or
provide a written plan acceptable to the Authority providing for that cure or, if the Authority accepts a
plan for cure, the Recipient does not cure that default within the time period specified therein.
Section 9.2 Remedies. (a) If an event of default described in Section 9.1(a) of this Agreement occurs, the
Authority will impose an interest penalty as provided in Minn. Rules Part 7380.0475, Subpart 1. The
Authority may also exercise one or more of the following remedies: (1) withhold approval of any
disbursement request, (2) reject any pending application by the Recipient for financial assistance, (3) to
the extent permitted by law, demand immediate payment of the Loan and the Note in full and, upon
such demand, the outstanding principal amount of the Loan and Note will be immediately due and
payable, with interest accrued thereon to the date of payment, or (4) exercise any other remedy
available to the Authority at law or in equity, including under Minnesota Rules, Chapter 7380, as
amended.
(b) If an event of default described in Section 9.1(b) of this Agreement occurs, the Authority will impose
an immediate increase in the interest rate on the Loan by eliminating all interest rate discounts that
were applied in determining the interest rate under Minn. Rules Part 7380.0442. The Authority may also
exercise one or more of the following remedies: (1) withhold approval of any disbursement request, (2)
demand repayment of any grant disbursements under this Agreement, (3) reject any pending application
by the Recipient for financial assistance, (4) to the extent permitted by law, demand immediate payment
of the Loan and the Note in full and, upon such demand, the outstanding principal amount of the Loan
and Note will be immediately due and payable, with interest accrued thereon to the date of payment,
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or (5) exercise any other remedy available to the Authority at law or in equity, including under Minnesota
Rules, Chapter 7380, as amended. If the Authority subsequently determines that the Recipient has cured
all events of default, the interest rate on any unpaid Loan principal will then revert back to the original
interest rate.
ARTICLE 10 – ADMINISTRATION
Section 10.1 Amendments. Any amendments to this Agreement must be in writing and must be
executed by the Recipient by the same officials who signed the Agreement, or their successors.
Section 10.2 Termination of Loan. The obligations of the Recipient under this Agreement (except the
obligations set forth in Section 2.1 (c), (d) and (e) and Article 4 hereof) will terminate when the Loan is
fully paid.
Section 10.3 Fees. (a) Pursuant to Minnesota Statutes, section 446A.04, subdivision 5(a), the Authority
may charge application fees and loan repayment servicing fees.
(b) Application fee: The application fee is waived by the Authority.
(c) Loan repayment servicing fees: The Recipient acknowledges that the Authority may apply up to 2
percent of any loan repayment as a servicing fee and that such fee will not increase the amount of any
repayments or extend the period of repayment.
Section 10.4 Notices. In addition to any notice required under applicable law to be given in another
manner, any notices required hereunder must be in writing, and will be sufficient if delivered by courier
or overnight delivery service or sent by certified mail (return receipt requested), postage prepaid, to the
address of the party to whom it is directed. That address must be the address specified below or a
different address as may hereafter be specified by either party by written notice to the other:
In the case of the Authority: In the case of the Recipient:
Minnesota Public Facilities Authority City of Scandia
Attention: Executive Director Attention: Mayor
1st National Bank Building 14727 209th St. N.
332 Minnesota Street, Suite W820 Scandia, MN 55073-8503
Saint Paul, MN 55101-1378
Non-executable
Scandia_CWRF_01 Page 12 of 12
The Authority and the Recipient have caused this Agreement to be duly executed by their duly authorized
undersigned representatives. Statutory Cities must execute this Agreement as provided in Minnesota
Statutes, Section 412.201, as amended. Home Rule Charter Cities must execute this Agreement as
provided in Minnesota Statutes, Chapter 410, as amended.
1. State Encumbrance verification: Individual
certifies that funds have been encumbered as required by MN
Statute § 16A.15.
2. Recipient:
We have read and we agree to all of the above provisions of this
Agreement.
By
Name
Date
Title MPFA Encumbrance Group
By
Name
Date
Title Mayor
3. State Agency-MN Public Facilities Authority.
By
Name Matt Varilek
Date
Title Chair, or delegate
By
Name
Date
Title City Administrator
By
Name
Date
Title
By
Name
Date
Title
Non-executable
MN Public Facilities Authority Exhibit A
Loan Amortization Schedule
Clean Water State Revolving Fund
Scandia_CWRF_01 MPFA-CWRF-L-082-FY26 261,395.00
Rate: 2.211%Advanced treatment nitrogen, rehab LSTS
Date:
Maturity: 08/20/45 final loan amount:261,395.00
Date Effective Source Disbursement Repayment Interest Principal Loan Balance Annl Debt Srv
projected 07/29/26 Op Res 261,395.00 261,395.00
projected 08/26/26 Op Res 433.46 261,395.00
projected 09/23/26 Op Res 866.92 261,395.00
projected 10/28/26 Op Res 1,428.81 261,395.00
projected 11/25/26 Op Res 1,862.27 261,395.00
projected 12/22/26 Op Res 2,295.73 261,395.00
projected 01/26/27 Op Res - 2,841.57 261,395.00
02/20/27 3,226.87 3,226.87 261,395.00
08/20/27 11,284.72 2,889.72 8,395.00 253,000.00 14,511.59
02/20/28 2,796.92 2,796.92 253,000.00
08/20/28 14,796.92 2,796.92 12,000.00 241,000.00 17,593.84
02/20/29 2,664.26 2,664.26 241,000.00
08/20/29 14,664.26 2,664.26 12,000.00 229,000.00 17,328.52
02/20/30 2,531.60 2,531.60 229,000.00
08/20/30 14,531.60 2,531.60 12,000.00 217,000.00 17,063.20
02/20/31 2,398.94 2,398.94 217,000.00
08/20/31 14,398.94 2,398.94 12,000.00 205,000.00 16,797.88
02/20/32 2,266.28 2,266.28 205,000.00
08/20/32 15,266.28 2,266.28 13,000.00 192,000.00 17,532.56
02/20/33 2,122.56 2,122.56 192,000.00
08/20/33 15,122.56 2,122.56 13,000.00 179,000.00 17,245.12
02/20/34 1,978.85 1,978.85 179,000.00
08/20/34 14,978.85 1,978.85 13,000.00 166,000.00 16,957.70
02/20/35 1,835.13 1,835.13 166,000.00
08/20/35 15,835.13 1,835.13 14,000.00 152,000.00 17,670.26
02/20/36 1,680.36 1,680.36 152,000.00
08/20/36 15,680.36 1,680.36 14,000.00 138,000.00 17,360.72
02/20/37 1,525.59 1,525.59 138,000.00
08/20/37 15,525.59 1,525.59 14,000.00 124,000.00 17,051.18
02/20/38 1,370.82 1,370.82 124,000.00
08/20/38 15,370.82 1,370.82 14,000.00 110,000.00 16,741.64
02/20/39 1,216.05 1,216.05 110,000.00
08/20/39 16,216.05 1,216.05 15,000.00 95,000.00 17,432.10
02/20/40 1,050.23 1,050.23 95,000.00
08/20/40 16,050.23 1,050.23 15,000.00 80,000.00 17,100.46
02/20/41 884.40 884.40 80,000.00
08/20/41 15,884.40 884.40 15,000.00 65,000.00 16,768.80
02/20/42 718.58 718.58 65,000.00
08/20/42 16,718.58 718.58 16,000.00 49,000.00 17,437.16
02/20/43 541.70 541.70 49,000.00
08/20/43 16,541.70 541.70 16,000.00 33,000.00 17,083.40
02/20/44 364.82 364.82 33,000.00
08/20/44 16,364.82 364.82 16,000.00 17,000.00 16,729.64
02/20/45 187.94 187.94 17,000.00
08/20/45 17,187.94 187.94 17,000.00 - 17,375.88
totals 261,395.00 323,781.65 62,386.65 261,395.00 323,781.65
Type of Note:Tax Exempt
General Obligation Revenue Note
THIS SCHEDULE IS NOT TO BE USED
TO DETERMINE EXACT REPAYMENTS DUE
UNTIL THE LOAN IS FULLY DISBURSED
Scandia_cw_01.xlsm 6/17/2026 page 1 of 1
MN Public Facilities Authority Exhibit A
Loan Amortization Schedule
Clean Water State Revolving Fund
Scandia_CWRF_01 MPFA-CWRF-L-082-FY26 261,395.00
Rate: 2.211%Advanced treatment nitrogen, rehab LSTS
Date:
Maturity: 08/20/45 final loan amount:261,395.00
Date Effective Source Disbursement Repayment Interest Principal Loan Balance Annl Debt Srv
projected 07/29/26 Op Res 261,395.00 261,395.00
projected 08/26/26 Op Res 433.46 261,395.00
projected 09/23/26 Op Res 866.92 261,395.00
projected 10/28/26 Op Res 1,428.81 261,395.00
projected 11/25/26 Op Res 1,862.27 261,395.00
projected 12/22/26 Op Res 2,295.73 261,395.00
projected 01/26/27 Op Res - 2,841.57 261,395.00
02/20/27 3,226.87 3,226.87 261,395.00
08/20/27 11,284.72 2,889.72 8,395.00 253,000.00 14,511.59
02/20/28 2,796.92 2,796.92 253,000.00
08/20/28 14,796.92 2,796.92 12,000.00 241,000.00 17,593.84
02/20/29 2,664.26 2,664.26 241,000.00
08/20/29 14,664.26 2,664.26 12,000.00 229,000.00 17,328.52
02/20/30 2,531.60 2,531.60 229,000.00
08/20/30 14,531.60 2,531.60 12,000.00 217,000.00 17,063.20
02/20/31 2,398.94 2,398.94 217,000.00
08/20/31 14,398.94 2,398.94 12,000.00 205,000.00 16,797.88
02/20/32 2,266.28 2,266.28 205,000.00
08/20/32 15,266.28 2,266.28 13,000.00 192,000.00 17,532.56
02/20/33 2,122.56 2,122.56 192,000.00
08/20/33 15,122.56 2,122.56 13,000.00 179,000.00 17,245.12
02/20/34 1,978.85 1,978.85 179,000.00
08/20/34 14,978.85 1,978.85 13,000.00 166,000.00 16,957.70
02/20/35 1,835.13 1,835.13 166,000.00
08/20/35 15,835.13 1,835.13 14,000.00 152,000.00 17,670.26
02/20/36 1,680.36 1,680.36 152,000.00
08/20/36 15,680.36 1,680.36 14,000.00 138,000.00 17,360.72
02/20/37 1,525.59 1,525.59 138,000.00
08/20/37 15,525.59 1,525.59 14,000.00 124,000.00 17,051.18
02/20/38 1,370.82 1,370.82 124,000.00
08/20/38 15,370.82 1,370.82 14,000.00 110,000.00 16,741.64
02/20/39 1,216.05 1,216.05 110,000.00
08/20/39 16,216.05 1,216.05 15,000.00 95,000.00 17,432.10
02/20/40 1,050.23 1,050.23 95,000.00
08/20/40 16,050.23 1,050.23 15,000.00 80,000.00 17,100.46
02/20/41 884.40 884.40 80,000.00
08/20/41 15,884.40 884.40 15,000.00 65,000.00 16,768.80
02/20/42 718.58 718.58 65,000.00
08/20/42 16,718.58 718.58 16,000.00 49,000.00 17,437.16
02/20/43 541.70 541.70 49,000.00
08/20/43 16,541.70 541.70 16,000.00 33,000.00 17,083.40
02/20/44 364.82 364.82 33,000.00
08/20/44 16,364.82 364.82 16,000.00 17,000.00 16,729.64
02/20/45 187.94 187.94 17,000.00
08/20/45 17,187.94 187.94 17,000.00 - 17,375.88
totals 261,395.00 323,781.65 62,386.65 261,395.00 323,781.65
Type of Note:Tax Exempt
General Obligation Revenue Note
THIS SCHEDULE IS NOT TO BE USED
TO DETERMINE EXACT REPAYMENTS DUE
UNTIL THE LOAN IS FULLY DISBURSED
Scandia_cw_01.xlsm 6/17/2026 page 1 of 2
MN Public Facilities Authority RATE CALC Clean Water State Revolving Fund
Calculation of Loan Rate for Scandia_CWRF_01
MPFA-CWRF-L-082-FY26
Cash flow using principal Present Value of Cash Flows
Rate Scales schedule and these rate scales:and these rate scales *:
Date Principal PFA Bonds Market AAA PFA Bonds Market AAA PFA Bonds Market AAA
07/29/26 (261,395.00) (261,395.00) (261,395.00) (261,395.00) (261,395.00)
02/20/27 - 4,418.43 4,418.43 4,340.53 4,340.53
08/20/27 8,395.00 2.400%2.400%12,351.81 12,351.81 11,942.29 11,942.29
02/20/28 - 3,856.07 3,856.07 3,669.30 3,669.30
08/20/28 12,000.00 2.408%2.408%15,856.07 15,856.07 14,849.66 14,849.66
02/20/29 - 3,711.59 3,711.59 3,421.08 3,421.08
08/20/29 12,000.00 2.428%2.428%15,711.59 15,711.59 14,252.97 14,252.97
02/20/30 - 3,565.91 3,565.91 3,183.74 3,183.74
08/20/30 12,000.00 2.507%2.507%15,565.91 15,565.91 13,678.04 13,678.04
02/20/31 - 3,415.49 3,415.49 2,953.82 2,953.82
08/20/31 12,000.00 2.566%2.566%15,415.49 15,415.49 13,121.12 13,121.12
02/20/32 - 3,261.53 3,261.53 2,732.22 2,732.22
08/20/32 13,000.00 2.635%2.635%16,261.53 16,261.53 13,407.23 13,407.23
02/20/33 - 3,090.25 3,090.25 2,507.57 2,507.57
08/20/33 13,000.00 2.716%2.716%16,090.25 16,090.25 12,850.04 12,850.04
02/20/34 - 2,913.71 2,913.71 2,290.18 2,290.18
08/20/34 13,000.00 2.773%2.773%15,913.71 15,913.71 12,310.55 12,310.55
02/20/35 - 2,733.47 2,733.47 2,081.14 2,081.14
08/20/35 14,000.00 2.854%2.854%16,733.47 16,733.47 12,538.80 12,538.80
02/20/36 - 2,533.69 2,533.69 1,868.55 1,868.55
08/20/36 14,000.00 2.949%2.949%16,533.69 16,533.69 12,000.63 12,000.63
02/20/37 - 2,327.26 2,327.26 1,662.49 1,662.49
08/20/37 14,000.00 3.039%3.039%16,327.26 16,327.26 11,479.20 11,479.20
02/20/38 - 2,114.53 2,114.53 1,463.16 1,463.16
08/20/38 14,000.00 3.128%3.128%16,114.53 16,114.53 10,974.38 10,974.38
02/20/39 - 1,895.57 1,895.57 1,270.53 1,270.53
08/20/39 15,000.00 3.212%3.212%16,895.57 16,895.57 11,145.50 11,145.50
02/20/40 - 1,654.67 1,654.67 1,074.28 1,074.28
08/20/40 15,000.00 3.249%3.249%16,654.67 16,654.67 10,642.08 10,642.08
02/20/41 - 1,410.99 1,410.99 887.35 887.35
08/20/41 15,000.00 3.312%3.312%16,410.99 16,410.99 10,157.57 10,157.57
02/20/42 - 1,162.59 1,162.59 708.21 708.21
08/20/42 16,000.00 3.411%3.411%17,162.59 17,162.59 10,289.68 10,289.68
02/20/43 - 889.71 889.71 524.99 524.99
08/20/43 16,000.00 3.492%3.492%16,889.71 16,889.71 9,808.56 9,808.56
02/20/44 - 610.35 610.35 348.85 348.85
08/20/44 16,000.00 3.628%3.628%16,610.35 16,610.35 9,343.86 9,343.86
02/20/45 - 320.11 320.11 177.23 177.23
08/20/45 17,000.00 3.766%3.766%17,320.11 17,320.11 9,437.61 9,437.61
02/20/46 - - - - -
totals - 91,310.11 91,310.11 - -
* yields that equates PV of cash flows to $-0-:3.211%3.211%
less discounts applied to the higher of the two yields: base discount: (1) 1.000%
MHI below average:
Avg residential cost:
resulting loan rate (min=1%): 2.211%
(1) The base discount is 100 basis points on loans up to $92 million, with no base discount applied to amounts in excess of that amount
06/10/26
estimated savings:$28,923 WAM:
10.8 years
FINAL
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