9.c Resolution 07-18-17-07 approving the issuance of certificates of indebtedness for the purchase of a 2017 plow truck
Extract of Minutes of Meeting
of the City Council of the City of
Scandia, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Scandia,
Minnesota, was duly held in the City Hall in said City on Tuesday, July 18, 2017, commencing at 7:00 p.m.
The following members were present:
and the following were absent:
* * * * * * * * *
The Mayor announced that the next order of business was consideration of the proposal that had
been received from Security State Bank of Marine for the purchase of the City’s $160,000 General
Obligation Equipment Certificates of Indebtedness, Series 2017A.
After due consideration of the proposal, Councilmember ____________________ then introduced
the following resolution and moved its adoption:
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RESOLUTION NO. 07-18-17-07
A RESOLUTION AWARDING THE SALE OF $160,000 GENERAL
OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES
2017A; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR
EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council (the “Council”) of the City of Scandia, Minnesota
(the “City”) as follows:
Section 1. Sale of Certificates.
1.01 Background; Findings. It is determined that:
(a) the City is authorized by Minnesota Statutes, Section 412.301, as amended
(the “Act”), to issue its general obligation equipment certificates of indebtedness on such terms and
in such manner as the City determines to finance the purchase of certain items of capital equipment
(the “Equipment”), subject to certain limitations contained in the Act;
(b) as approved by this Council on February 21, 2017, the City authorized the purchase
and acquisition of a 2018 Western Star single-axle dump truck with J-Craft snowplow and
accessories package (the “Plow Truck”);
(c) as required by the Act:
(i) the expected useful life of the Equipment is or will be at least as long as
the five-year term of the Certificates (herein defined); and
(ii) the principal amount of the Certificates ($160,000) will not exceed 0.25
percent of the current market value of taxable property in the City
($633,310,600.00 x 0.25% = $1,583,276.50), therefore this Resolution need not be
published in the official newspaper of the City;
(d) it is necessary and expedient to the sound financial management of the affairs of
the City to issue its General Obligation Equipment Certificates of Indebtedness, Series 2017A, in
the aggregate principal amount of $160,000 (the “Certificates”), pursuant to the Act to provide
financing for the Equipment; and
(e) the City is authorized by Minnesota Statutes, Section 475.60, Subdivision 2(2) to
negotiate the sale of the Certificates, it being determined that the City has not issued and sold more
than $1,200,000 in obligations in the past 12-month period. The actions of City staff in negotiating
the sale of the Certificates are ratified and confirmed in all aspects.
1.02. Award to the Purchaser and Interest Rates. The proposal of Security State Bank of Marine
(the “Purchaser”) to purchase the Certificates is determined to be a reasonable offer and is accepted, the
proposal being to purchase the Certificates at a price of $160,000.00, for Certificates bearing interest as
follows:
3
Year Interest Rate
2018 2.35%
2019 2.45
2020 2.55
2021 2.65
2022 2.75
1.03. Purchase Contract. The Mayor and the City Administrator are authorized and directed to
execute a contract with the Purchaser on behalf of the City.
1.04. Terms and Principal Amounts of the Certificates. The City will forthwith issue and sell
the Certificates pursuant to the Act in the total principal amount of $160,000, originally dated August 15,
2017, numbered R-1, upward, bearing interest as above set forth, and maturing serially on August 1 in the
years and amounts as follows:
Year Amount
2018 $32,000
2019 32,000
2020 32,000
2021 32,000
2022 32,000
1.05. Optional Redemption. The City may prepay and redeem the Certificates, in whole or in
part, at any time without penalty.
Section 2. Registration and Payment.
2.01. Registered Form. The Certificates will be issued only in fully registered form. The interest
thereon and, upon surrender of each Certificate, the principal amount thereof, is payable by check or draft
issued by the Registrar described herein.
2.02. Dates; Interest Payment Dates. Each Certificate will be dated as of the last interest payment
date preceding the date of authentication to which interest on the Certificate has been paid or made available
for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid
or made available for payment, in which case the Certificate will be dated as of the date of authentication,
or (ii) the date of authentication is prior to the first interest payment date, in which case the Certificate will
be dated as of the date of original issue. The interest on the Certificates is payable on February 1 and
August 1 of each year, commencing February 1, 2018 to the registered owners of record as of the close of
business on the fifteenth day of the immediately preceding month, whether or not that day is a business day.
2.03. Registration. The City hereby appoints the City Administrator as the registrar, transfer
agent, authenticating agent and paying agent for the Bonds (the “Registrar”). On or before each principal
or interest due date on the Bonds, without further order of this Council, the Registrar must transmit to the
Purchaser money sufficient for the payment of all principal and interest then due. The further effect of
registration and the rights and duties of the City and the Registrar with respect thereto are as follows:
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(a) Register. The Registrar must keep at its principal office a certificate register in
which the Registrar provides for the registration of ownership of Certificates and the registration
of transfers and exchanges of Certificates entitled to be registered, transferred or exchanged.
(b) Transfer of Certificates. Upon surrender for transfer of a Certificate duly endorsed
by the registered owner thereof or accompanied by a written instrument of transfer, in form
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates of a like aggregate
principal amount and maturity, as requested by the transferor. The Registrar may, however, close
the books for registration of any transfer after the fifteenth day of the month preceding each interest
payment date and until that interest payment date.
(c) Exchange of Certificates. When Certificates are surrendered by the registered
owner for exchange the Registrar will authenticate and deliver one or more new Certificates of a
like aggregate principal amount and maturity, as requested by the registered owner or the owner’s
attorney in writing.
(d) Cancellation. Certificates surrendered upon any transfer or exchange will be
promptly cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Certificate is presented to the
Registrar for transfer, the Registrar may refuse to transfer the Certificate until the Registrar is
satisfied that the endorsement on the Certificate or separate instrument of transfer is valid and
genuine and that the requested transfer is legally authorized. The Registrar will incur no liability
for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person in
whose name a Certificate is registered in the certificate register as the absolute owner of the
Certificate, whether the Certificate is overdue or not, for the purpose of receiving payment of, or
on account of, the principal of and interest on the Certificate and for all other purposes, and
payments so made to a registered owner or upon the owner’s order will be valid and effectual to
satisfy and discharge the liability upon the Certificate to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner
thereof for a transfer or exchange of Certificates sufficient to reimburse the Registrar for any tax,
fee or other governmental charge required to be paid with respect to the transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Certificates. If a Certificate becomes
mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Certificate of like amount,
number, maturity date and tenor in exchange and substitution for and upon cancellation of the
mutilated Certificate or in lieu of and in substitution for any Certificate destroyed, stolen or lost,
upon the payment of the reasonable expenses and charges of the Registrar in connection therewith;
and, in the case of a Certificate destroyed, stolen or lost, upon filing with the Registrar of evidence
satisfactory to it that the Certificate was destroyed, stolen or lost, and of the ownership thereof, and
upon furnishing to the Registrar an appropriate certificate or indemnity in form, substance and
amount satisfactory to it and as provided by law, in which both the City and the Registrar must be
named as obligees. Certificates so surrendered to the Registrar will be cancelled b y the Registrar
and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or
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lost Certificate has already matured in accordance with its terms it is not necessary to issue a ne w
Certificate prior to payment.
2.04. Execution, Authentication and Delivery. The Certificates will be prepared under the
direction of the City Administrator and executed on behalf of the City by the signatures of the Mayor and
the City Administrator, provided that all signatures may be printed, engraved or lithographed facsimiles of
the originals. If an officer whose signature or a facsimile of whose signature appears on the Certificates
ceases to be such officer before the delivery of any Certificate, that signature or facsimile will nevertheless
be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery.
Notwithstanding such execution, a Certificate will not be valid or obligatory for any purpose or entitled to
any security or benefit under this Resolution unless and until a certificate of authentication on the Certificate
has been duly executed by the manual signature of an authorized representative of the Registrar.
Certificates of authentication on different Certificates need not be signe d by the same representative. The
executed certificate of authentication on a Certificate is conclusive evidence that it has been authenticated
and delivered under this Resolution. When the Certificates have been so prepared, executed and
authenticated, the City Administrator will deliver the same to the Purchaser upon payment of the purchase
price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not
obligated to see to the application of the purchase price.
2.05. Temporary Certificates. The City may elect to deliver in lieu of printed definitive
Certificates one or more typewritten temporary Certificates in substantially the form set forth in Section 3
hereof. Upon the execution and delivery of the definitive Certificates the temporary Certificate will be
exchanged therefor and cancelled.
Section 3. Form of Certificate.
3.01. Form. The Certificates will be printed or typewritten in substantially the form as attached
hereto as Exhibit A.
3.02. Approving Legal Opinion. The City Administrator is authorized and directed to obtain a
copy of the proposed approving legal opinion of Eckberg Lammers, P.C., Stillwater, Minnesota, Bond
Counsel to the City, which is to be complete except as to dating thereof and cause the opinion to be printed
on or accompany each Certificate.
Section 4. Payment; Security; Pledges and Covenants.
4.01. Funds and Accounts. (a) Debt Service Fund. The Certificates are payable from the General
Obligation Equipment Certificates of Indebtedness, Series 2017A Debt Service Fund (the “Debt Service
Fund”) created herein, and the proceeds of the ad valorem taxes hereinafter levied are pledged to the Debt
Service Fund. If a payment of principal or interest on the Certificates becomes due when there is not
sufficient money in the Debt Service Fund to pay the same, the City Administrator will pay such principal
or interest from the general fund of the City, and the general fund may be reimbursed for those advances
out of the proceeds of the taxes levied by this Resolution, when collected.
(b) Equipment Acquisition Fund. The proceeds of the Certificates, together with any other
funds appropriated during the acquisition of the Equipment, will be deposited in a separate Equipment
Acquisition Fund. When the Equipment has been acquired and put into service and the cost thereof fully
paid, the Equipment Acquisition Fund is to be closed and any balance in the fund is to be deposited in the
Debt Service Fund.
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4.02. Pledge of Taxes. For the purpose of paying the principal of and interest on the Certificates,
there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which
tax will be spread upon the tax rolls and collected with and as part of other general taxes of the City. Such
tax will be credited to the Debt Service Fund above provided and will be in the years and amounts (year
stated being year of collection) attached hereto as Exhibit B.
4.03. Certification to County Auditor as to Debt Service Fund Amount. As required by
Minnesota Statutes, Section 475.61, as amended, it is determined that the estimated collection of the
foregoing taxes will produce at least five percent (5%) in excess of the amount needed to meet when due
the principal and interest payments on the Certificates. The tax levy herein provided is irrepealable until
all of the Certificates are paid, provided that at the time the City makes its annual tax levies, the City
Administrator may certify to the Washington County Auditor-Treasurer the amount available in the Debt
Service Fund to pay principal and interest due during the ensuing year, and the County Auditor -Treasurer
will thereupon reduce the levy collectible during such year by the amount so certified.
4.04. Certificate as to Registration. The City Administrator is authorized and directed to file a
certified copy of this Resolution with the Washington County Auditor-Treasurer and to obtain the certificate
required by Minnesota Statutes, Section 475.63, as amended.
4.05. Reimbursement Intent. This Resolution is intended to serve as an “official intent” of the
City to comply with the reimbursement bond requirements set forth in United States Treasury Regulations,
Section 1.150-2, as amended.
Section 5. Authentication of Transcript.
5.01. City Proceedings and Records. The officers of the City are authorized and directed to
prepare and furnish to the Purchaser and to the attorneys approving the Certificates, certified copies of
proceedings and records of the City relating to the Certificates and to the financial condition and affairs of
the City, and such other certificates, affidavits and transcripts as may be required to show the facts within
their knowledge or as shown by the books and records in their custody and under their control, relating to
the validity and marketability of the Certificates, and such instruments, including any heretofore furnished,
will be deemed representations of the City as to the facts stated therein. The Mayor and the City
Administrator are authorized and directed to furnish to the Purchaser at closing on the Certificates such
certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending
questioning the Certificates or the organization of the City or incumbency of its officers, at the closing the
Mayor and the City Administrator shall also execute and deliver to the Purchaser a suitable certificate as to the
absence of material litigation, and the City Administrator shall also execute and deliver a certificate as to
payment for and delivery of the Certificates.
5.02. No Official Statement. It is determined that no comprehensive Official Statement or
offering material has been prepared or circulated by the City in connection with the sale of the Bonds and
that the Purchaser has made its own investigations concerning the City, as set forth in an investment letter
of even date, receipt of which is acknowledged.
Section 6. Tax Covenants.
6.01. Tax-Exempt Certificates. The City covenants and agrees with the holders from time to time
of the Certificates that it will not take or permit to be taken by any of its officers, employees or agents any
action which would cause the interest on the Certificates to become subject to taxat ion under the Internal
Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder,
in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take,
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all affirmative action within its power that may be necessary to ensure that such interest will not become
subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter
amended and made applicable to the Certificates.
6.02. No Rebate Required. For purposes of qualifying for the small issuer exception to the federal
arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-
exempt obligations (other than private activity bonds) issued by the City (and all subordinate entities of the
City) during the calendar year in which the Certificates are issued and outstanding at one time is not reasonably
expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code.
6.03. Not Private Activity Certificates. The City further covenants not to use the proceeds of the
Certificates, or to cause or permit them or any of them to be used, in such a manner as to cause the
Certificates to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the
Code.
6.04. Qualified Tax-Exempt Obligations. In order to qualify the Certificates as “qualified tax-
exempt obligations” within the meaning of Section 265(b)(3) of the Code, the City makes the following
factual statements and representations:
(a) the Certificates are not “private activity bonds” as defined in Section 141 of the
Code;
(b) the City designates the Certificates as “qualified tax-exempt obligations” for
purposes of Section 265(b)(3) of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other than private
activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all
subordinate entities of the City) during calendar year 2017 will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar year
2017 have been designated for purposes of Section 265(b)(3) of the Code.
6.05. Procedural Requirements. The City will use its best efforts to comply with any federal
procedural requirements which may apply in order to effectuate the designations made by this Section.
Section 7. Continuing Disclosure. Participating underwriters need not comply with the
continuing disclosure requirements of Rule 15c2-12, promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, because the offering is in a principal amount less
than $1,000,000. Consequently, the City will not enter into any undertaking to provide continuing
disclosure of any kind with respect to the Certificates.
Section 8. Defeasance. When all Certificates and all interest thereon have been discharged as
provided in this Section, all pledges, covenants and other rights granted by this Resolution to the holders of the
Certificates will cease, except that the pledge of the full faith and credit of the City for the prompt and full
payment of the principal of and interest on the Certificates will remain in full force and effect. The City may
discharge all Certificates which are due on any date by depositing with the Purchaser on or before that date a
sum sufficient for the payment thereof in full. If any Certificate should not be paid when due, it may
nevertheless be discharged by depositing with the Purchaser a sum sufficient for the payment thereof in full
with interest accrued to the date of such deposit.
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Passed and adopted by the City Council of the City of Scandia, Minnesota this 18th day of July,
2017.
CITY OF SCANDIA, MINNESOTA
____________________________________
Christine Maefsky, Mayor
Attest:
____________________________________
Neil Soltis, City Administrator
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The motion for the adoption of the foregoing resolution was duly seconded by Councilmember
____________________, and upon 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.
STATE OF MINNESOTA )
)
COUNTY OF WASHINGTON ) SS.
)
CITY OF SCANDIA )
I, the undersigned, being the duly qualified and acting Administrator of the City of Scandia, Minnesota,
certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the
City Council of the City held on July 18, 2017 with the original minutes on file in my office and the extract is
a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City’s General
Obligation Equipment Certificates of Indebtedness, Series 2017A, in the aggregate principal amount of
$160,000.
WITNESS My hand officially as such Administrator and the corporate seal of the City this ______
day of _______________, 2017.
City Administrator
City of Scandia, Minnesota
(SEAL)
A-1
EXHIBIT A
FORM OF CERTIFICATE
No. R-___ UNITED STATES OF AMERICA $_________
STATE OF MINNESOTA
COUNTY OF WASHINGTON
CITY OF SCANDIA
GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF
INDEBTEDNESS, SERIES 2017A
Rate
Maturity
Date of
Original Issue
August 1, 20__ August 15, 2017
Registered Owner: Security State Bank of Marine
The City of Scandia, Minnesota, a duly organized and existing municipal corporation and political
subdivision located in Washington County, Minnesota (the “City”), acknowledges itself to be indebted and
for value received promises to pay to the Registered Owner specified above or registered assigns, the
principal sum of $__________ on the Maturity date specified above, with interest thereon from the date
hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing
February 1, 2018, to the person in whose name this Certificate is registered at the close of business on the
fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and,
upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United
States of America by check or draft by the City Administrator, as Registrar, Paying Agent, Transfer Agent
and Authenticating Agent, or his designated successor under the Resolution described herein. For the
prompt and full payment of such principal and interest as the same respectively become due, the full faith
and credit and taxing powers of the City have been and are hereby irrevocably pledged.
The City may prepay and redeem this Certificate, in whole or in part, at any time without penalty.
The City Council of the City has designated the issue of Certificates of which this Certificate forms
a part as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Inter nal
Revenue Code of 1986, as amended (the “Code”), relating to disallowance of interest expense for financial
institutions and within the $10 million limit allowed by the Code for the calendar year of issue.
A-2
This Certificate is one of an issue in the aggregate principal amount of $160,000, all of like original
issue date and tenor, except as to number, maturity date, and interest rate, issued pursuant to a resolution
adopted by the City Council of the City on July 18, 2017 (the “Resolution”), for the purpose of providing
money to defray expenses incurred or to be incurred in purchasing certain road maintenance capital
equipment, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Section 412.301, as amended, and the principal hereof and interest hereon
are payable from ad valorem taxes, as set forth in the Resolution to which reference is made for a full
statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably
pledged for payment of this Certificate and the City Council of the City has obligated itself to levy additional
ad valorem taxes on all taxable property in the City in the event of any deficiency, which taxes may be
levied without limitation as to rate or amount.
As provided in the Resolution and subject to certain limitations set forth therein, this Certificate is
transferable upon the books of the City at the principal office of the Registrar, by the registered owner
hereof in person or by the owner’s attorney duly authorized in writing, upon surrender hereof together with
a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the
owner’s attorney; and may also be surrendered in exchange for Certificates of other authorized
denominations. Upon such transfer or exchange the City will cause a new Certificate or Certificates to be
issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing
interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or
governmental charge required to be paid with respect to such transfer or exchange.
The City and the Registrar may deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof, whether this Certificate is overdue or not, for the purpose of
receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any
notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions
and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen
and to be performed preliminary to and in the issuance of thi s Certificate in order to make it a valid and
binding general obligation of the City in accordance with its terms, have been done, do exist, have happened
and have been performed as so required, and that the issuance of this Certificate does not cause the
indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness.
This Certificate is not valid or obligatory for any purpose or entitled to any security or benefit under
the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual
signature.
A-3
IN WITNESS WHEREOF, the City of Scandia, Minnesota, by its City Council, has caused this
Certificate to be executed on its behalf by the facsimile or manual signatures of the Mayor and the City
Administrator and has caused this Certificate to be dated as of the date set forth below.
Dated: August 15, 2017.
CITY OF SCANDIA, MINNESOTA
(Facsimile) (Facsimile)
Mayor City Administrator
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates delivered pursuant to the Resolution mentioned within.
CITY OF SCANDIA, MINNESOTA
By
City Administrator
A-4
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
________________________________________ the within Certificate and all rights thereunder, and does
hereby irrevocably constitute and appoint _________________________ attorney to transfer the said
Certificate on the books kept for registration of the within Certificate, with full power of substitution in the
premises.
Dated:
Notice: The assignor’s signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration or any change whatever.
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities
Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”), the
New York Stock Exchange, Inc. Medallion Signatures Program (“MSP”) or other such “signature guarantee
program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or
MSP, all in accordance with the Securities Exchange Act of 1934, as amended.
The Registrar will not effect transfer of this Certificate unless the information concerning the
assignee requested below is provided.
Name and Address:
(Include information for all joint owners if this Certificate
is held by joint account.)
Please insert social security or other identifying
number of assignee
A-5
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Certificate has been registered on the
books of the Registrar in the name of the person last noted below.
Date of Registration
Registered Owner
Signature of
Registrar
August 15, 2017
Security State Bank of Marine
Federal ID #______________
EXHIBIT B
TAX LEVY SCHEDULE
Year of Tax Levy Year of Tax Collection Amount
2017 2018 $37,884.00
2018 2019 $37,094.40
2019 2020 $36,271.20
2020 2021 $35,414.40
2021 2022 $34,524.00