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9.a) Staff Report-Resolution to Approve $570,000 G.O. Equipment Certificate for Fire and Dump Trucks �� l, � � ,� '�� , SCANDIA Staff Report Date of Meeting: June 18, 2013 To: City Council From: Kristina Handt, Administrator Re: Resolution to Approve $570,000 G.O. Equipment Certificate for Fire and Dump Trucks Agenda Item #: 9.a) Background: At the April Council meeting, staff was directed to prepare the resolution and other required documents necessary to move forward with bonding for the cost of the new fire engine and a dump truck with plow. Issue: Should the Council bond for the purchase of the Fire Engine and Dump Truck with a Plow? Proposal Details: Included in your packet is a resolution to award the sale of the bonds and providing for the payments on the bonds to come from the general tax levy. Staff has worked with Northland Securities on the documents and they have been reviewed by Asst City Attorney Andy Pratt who has also served as bond counsel. Northland Securities would buy the bonds and then resell them. The bond proceeds would be available approximately July 9tn The interest rates will be finalized the morning of June 18th but an estimate from Northland Securities is provided as an attaclunent to the resolution. Monte Eastvold,Northland Securities, will provide the finalized rates at the Council meeting and Attorney Pratt will provide an updated resolution that fills on those blank spots in sections 1.02 and 1.04. Northland Securities will also bring an updated Bond Purchase Agreement to the meeting. A draft is included in your packet. The resolution authorizes the Mayor and Administrator to execute the agreement. The bond proceeds would be used for the purchase of the new fire engine ($350,000) and the dump truck with plow($200,000). As mentioned previously, the Council would have up to 18 months to change what equipment is purchased with the bond proceeds. It would have to be used on equipment that had a useful life of at least 10 years since that is the length of the bond. However, for the purposes of issuing the bonds, staff had to include the dump truck and plow at , this time. The Council could amend it if anyone has thoughts on alternative equipment to use the funds for that meets the above stated requirements. Fiscal Impact: Next year's projected payment is $64,01 l. As staff inentioned previously, the current schedule of debt payments is expected to decrease and by applying fund balance to the 2005 G.O. Bond to prepay all of 2015 and possibly some of 2014's payment, these savings will offset the expense of the new bond. Options: 1) Approve Resolution 06-18-13-OS 2) Amend and then Approve Resolution 06-18-13-OS 3) Do not approve the resolution. Direct staff on how to pay for the fire engine. First payment is likely in July. Recommendation: Option 1. RESOLUTION NO.06-18-13-05 A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2013A, TO BE ISSUED IN THE AGGREGATE PRINCIPAL AMOUNT OF $570,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIIt 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 Back�round; Findin�s. 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 (the"Certificates") 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) the City will purchase and acquire various items of Equipment, which items are listed on Exhibit B, attached hereto and made a part hereof; (c) as required by the Act: (i) the expected useful life of each item of Equipment is or will be at least as long as the term of the Certificates; and (ii) the principal amount of the Certificates ($570,000) will not exceed 0.25 percent of the market value of taxable property in the City ($555,474,800), 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 2013A, in the aggregate principal amount of $570,000, 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 $1,200,000 in obligations in the past 12-month period. The actions of City staff in negotiating the sale of the Certificates are ratified and confirmed in all aspects. 1.02. Award to the Purchaser and Interest Rates. The proposal of Northland Securities, Inc. (the"Purchaser") to purchase the Certificates is determined to be a reasonable offer and is accepted, the proposal being to purchase the Certificates at a price of$ (par amount of$570,000, plus original issue premium of $ , less original issue discount of $ , less underwriter's discount of $ ), plus $ of accrued interest to date of delivery, for Certificates bearing interest as follows: Year Interest Rate Year Interest Rate 2014 2019 2015 2020 2016 2021 2017 2022 2018 2023 1.03. Purchase Contract. The Mayor and the City Administratar 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 $570,000, originally dated July 1, 2013, in the denomination of$5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on July 1 in the years and amounts as follows: Year Amount Year Amount 2014 2019 2015 2020 2016 2021 2017 2022 2018 2023 1.05. Optional Redemption. The City may elect on July 1, 2019, and on any date thereafter to prepay Certificates due on or after July 1, 2020. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Certificates of a maturity are called for redemption, the City will notify DTC (as defined in Section 7 hereo fl of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. Section 2. Re�istration and Pavment. 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 Pavment 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 July 1 and January 1 of each year, commencing January 1, 2014 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 2.03. Registration. The City will appoint a certificate registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re i�. The Registrar must keep at its principal corporate trust o�ce 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 ar mare 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) Exchan�e 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) Impro�er 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. (fl 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 Char�es. 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 3 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 by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Certificate has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Certificate prior to payment. (i) Redemption. In the event that any of the Certificates are called for redemption, notice thereof identifying the Certificates to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Certificate to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein,will not affect the validity of the proceedings far the redemption of Certificates. Certificates so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Re is�. The City appoints Northland Trust Services, Inc., Minneapolis, Minnesota, as the initial Registrar. The Mayor and the City Administrator are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business,the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Certificates in its possession to the successor Registrar and must deliver the certificate register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Administrator must transmit to the Registrar money sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Deliverv. 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 befare 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 ar 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 signed 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 heretofare made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. 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 with such changes as may be necessary to reflect more than one maturity in a single temporary 4 certificate. 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 Le a�pinion. The City Administrator is authorized and directed to obtain a copy of the proposed approving legal opinion of Eckberg, Lammers, Briggs, Wolff& Vierling, P.L.L.P., Stillwater, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Certificate. Section 4. Pavment; Securit� 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 2013A 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. There is appropriated to the Debt Service Fund (i) capitalized interest financed from Certificate proceeds, and (ii) accrued interest paid by the Purchaser upon closing and delivery of the Certificates. (b) Equipment Acquisition Fund. The proceeds of the Certificates, less the appropriations made in subparagraph (a), 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 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. 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 t� 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 C. 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. 5 Section 5. Authentication of Transcript. SA1. Citv Proceedin�s 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. 5.02. Certification as to Official Statement. The Mayor and the City Administrator are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Certificates and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 5.03. Other Certificates. 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. Section 6. Tax Covenants. 6.01. TaY-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 taxation 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, 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 Reyuired. 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 taY-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(fl(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 Obli atg ions. 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: 6 (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 yualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City)during calendar year 2013 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2013 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. Book-Entrv Svstem; Limited Obligation of Citv. 7.01. DTC. The Certificates will be initially issued in the form of a separate single typewritten or printed fully registered Certificate for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance, the ownership of each Certificate will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this Section, all of the outstanding Certificates will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 7.02. Participants. With respect to Certificates registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City and the Registrar will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Certificates as securities depository (the "Participants") or to any other person on behalf of which a Participant holds an interest in the Certificates, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Certificates, (ii)the delivery to any Participant or any other person(other than a registered owner of Certificates, as shown by the registration books kept by the Registrar), of any notice with respect to the Certificates, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Certificates, of any amount with respect to principal of or interest on the Certificates. The City and the Registrar may treat and consider the person in whose name each Certificate is registered in the registration books kept by the Registrar as the holder and absolute owner of such Certificate for the purpose of payment of principal and interest with respect to such Certificate, for the purpose of registering transfers with respect to such Certificate, and for all other purposes. The Registrar will pay all principal of and interest on the Certificates only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of or interest on the Certificates to the extent of the sum or sums so paid. No person other than a registered owner of Certificates, as shown in the registration books kept by the Registrar, will receive a certificated Certificate evidencing the obligation of this Resolution. Upon delivery by DTC to the City Administrator of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede&Co.,the words"Cede& Co.,"will refer to such new nominee of DTC; and upon receipt of such a notice, the City Administrator will promptly deliver a copy of the same to the Registrar. 7 7.03. Representation Letter. The City has heretofare executed and delivered to DTC a Blanket Issuer Letter of Representations (the"Representation Letter") which will govern payment of principal of and interest on the Certificates and notices with respect to the Certificates. Any registrar subsequently appointed by the City with respect to the Certificates will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar to be complied with at all times. 7.04. Transfers Outside Book-Entry Svstem. In the event the City, by resolution of this Council, determines that it is in the best interests of the persons having beneficial interests in the Certificates that they be able to obtain certificates that evidence such beneficial interests, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of such certificates. In such event the City will issue, transfer and exchange certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Certificates at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate certificates evidencing beneficial interests in the Certificates in accordance with this Resolution and the provisions hereof will apply to the transfer,exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Certificate is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of and interest on the Certificate and notices with respect to the Certificate will be made and given, respectively, in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 8.01. Execution of the Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate, executed by the Mayor and the City Administrator and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 8.02. Compliance with Provisions of the Continuin� Disclosure Certificate. The City covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate will not be considered an event of default with respect to the Certificates; however, any Certificate holder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section. Section 9. 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 Registrar 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 Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 8 Passed and adopted by the City Council of the City of Scandia, Minnesota this 18th day of June, 2013. CITY OF SCANDIA,MINNESOTA Mayor Attest: City Administrator 9 The motion for the adoption of the foregoing resolution was duly seconded by Member , and upon vote being taken thereon,the following voted in favor thereo£ and the following voted against the same: whereupon the resolution was declared duly passed and adopted. 10 . 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 June l 8, 2013 with the ariginal 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, in the aggregate principal amount of $570,000. WITNESS My hand officially as such Administrator and the corporate seal of the City this day of ,2013. City Administrator City of Scandia, Minnesota (SEAL) , EXHIBIT A FORM OF BOND No. R- UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF SCANDIA GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF INDEBTEDNESS, SERIES 2013A Date of Rate Maturi Ori�inal Issue CUSIP July 1, 20_ July 1,2013 Registered Owner: Cede&Co. The City of Scandia, Minnesota, a duly organized and existing municipal corparation 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 January 1 and July 1 in each year, commencing January 1, 2014, 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 Northland Trust Services, Inc., Minneapolis, Minnesota, as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its 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 elect on July 1, 2019, and on any date thereafter to prepay Certificates due on ar after July 1, 2020. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Certificates of a maturity are called for redemption, the City will notify Depository Trust Company ("DTC") of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. 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 Internal 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-1 This Certificate is one of an issue in the aggregate principal amount of $570,000, all of like ariginal issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all] issued pursuant to a resolution adopted by the City Council of the City on June 18, 2013 (the"Resolution"), for the purpose of providing money to defray expenses incurred or to be incurred in purchasing various items of capital equipment, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 412301, as amended, and the principal hereof and interest hereon are payable primarily 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 far payment of this Certificate and the CiTy Council of the City has obligated itself to levy additional ad valorem taxes on all taxable properry in the City in the event of any deficiency, which taxes may be levied without limitation as to rate or amount. The Certificates of this series are issued only as fully registered Certificates in denominations of$5,000 or any integral multiple thereof of single maturities. 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, far 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 this Certificate in arder 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 of one of its authorized representatives. A-2 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: July 1, 2013. 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. NORTHLAND TRUST SERVICES, INC. By Authorized Representative 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 determin4ed 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. A-3 The Registrar will not effect transfer of this Certificate unless the information concerning the assignee requested below is provided. Narne and Address: (Include information for all joint owners if this Certificate is held by joint account.) Please insert social security ar other identifying number of assignee 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. Signature of Date of Re�istration Re�stered Owner Officer of Re is�trar Cede&Co. Federal ID#13-2555119 A-4 EXHIBIT B LIST OF EQUIPMENT Fire Truck: Freightliner,two-door CustomFire Pumper Dump Truck: Single-axel dump truck with plow B-1 EXHIBIT C TAX LEVY SCHEDULE Attached B-1 � 0 � 20-Year/G.O./A-Rated 1 T W W W A A A A ln lA (n ln Q1 01 N Vl V O N ln V O N V1 V O N � ln O ln O cn O v+ O �/+ O (n O ln p . a o 0 0 0 oe oe o 02 `ee o�° `oe a°. c^ ------ -.. __,__ _._- ---._---- -__ ------_-_----- --------- ----- a � �----.___ .�i_ __..�._______� ---i��_____.._ i I z a ' I ; ' � i o �o � � � I I � i f 7 U � � I � i { y `c I ' � I 1 I 3 z i � ( I n o ' � i � � i i ' � � ( S � � 2��7 � i I � ( � i i fp V�f � � ' I � ( I � f I I i �0 I n I f1 T. � i I 7 C I ' I � I o � z �� i � � � � p o ' , ! � , j � � i ; � c � � zoos ; i i � i � � �- ; f � � s I c � x ? j ` ' � ' m � i I i i 'o' m a � I W o � r' o : ; i j o � � � i � � � �� n { Q. � � fD � , � � `� n, ��-y � i � � i N � m 3 � o V N 2009 � i i I ! 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Ut O Ut p ZJ:��,�'�,�: J Oo � o � �p Oo Oo Oo Oo A N N � N � O O p � � � N \ O � 0 t� �i: O�o � � fl- � fD Q��:;� �-. � 69 Q O fD p� � � � _a � � � � � s � � � v � p)':fR:. � rt 7 .-�' � � CT CT1 � � � � � � �I � X � tlF:: � ? C fD � � �I W V --� O N � CO OD O � p n p �.'ii::: � m 3 � � v, � cnv, � w .Awcnrv o � o � :::::: 3' � °'c °c v � �:;::c m � � Q � � ^� :::::: a � o �' o � tyv �:::�::: � y9 � n < ��-►, � N NNNNNNNNNNO `t�V N �:: _ N O p 3' .p N W W A A ? A Cn Cn Cn N Cn �p .. �• .. � 7 fD jV � O � N � W C� W N CT � CT O � N =• � W Ul W W � CT � CO V W p O RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2013A, TO BE ISSUED IN THE AGGREGATE PRINCIPAL AMOUNT OF $570,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIIt EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council (the "Council") of the City of Scandia, lvlinnesota (the"City")as follows: Section 1. Sale of Certificates. 1.01 Backaround; 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 (the"Certificates") 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) the City will purchase and acquire various items of Equipment, which items and the estimated cost thereof are listed on Exhibit B, attached hereto and made a part hereof; (c) as required by the Act: (i) the expected useful life of each item of Equipment is or will be at least as long as the term of the Certificates; and (ii) the principal amount of the Certificates ($570,000) will not exceed 0.25 percent of the market value of taxable property in the City ($555,474,800), 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 2013A, in the aggregate principal amount of $570,000, 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 $1,200,000 in obligations in the past 12-month period. The actions of City staff in negotiating the sale of the Certificates are ratified and confirmed in all aspects. 1.02. Award to the Purchaser and Interest Rates. The proposal of Northland Securities, Inc. (the"Purchaser") to purchase the Certificates is determined to be a reasonable offer and is accepted, the proposal being to purchase the Certificates at a price of$ (par amount of$570,000, plus original issue premium of $ , less original issue discount of $ , less 2 NORTHLAND SECURITIES Honorable City Council City of Scandia, Minnesota Dear City Officials: We understand that you desire to issue $570,000 General Obligation Equipment Certificates of Indebtedness, Series 2013A (the "Certificates"). Accordingly, we propose as follows: We agree to purchase $570,000 Equipment Certificates of Indebtedness, Series 2013A to be dated July 1, 2013 and to mature July 1, 2014 - 2023. We agree to pay for the Certificates $560,310.00 and accrued interest to the date of settlement. The Certificates are to be payable at Northland Trust Services, Inc., Minneapolis, Minnesota, as paying agent and registrar. Interest is to be payable on January 1, 2014 and semiannually thereafter. The Certificates will have the following interest rates and will mature or be subject to mandatory redemption on July 1 in the years and amounts as follows: 2014 $55,000 0.80% 2019 $55,000 2.10% 2015 55,000 0.80 2020 60,000 2.60 2016 55,000 1.50 2021 60,000 2.60 2017 55,000 1.50 2022 60,000 3.10 2018 55,000 2.10 2023 60,000 3.10 All Certificates will be Book Entry and in multiples of $5,000. The average interest rate is 2.4680% and the TIC is 2.7760%. Mandatory Redemption: This issue shall have five term certificates maturing July 1, 2015 (2014 and 2015 maturities), July 1, 2017 (2016 and 2017 maturities), July 1, 2019 (2018 and 2019 maturities), July 1, 2021 (2020 and 2021 maturities), and July 1, 2023 (2022 and 2023 maturities), which will have mandatory redemptions equal to the annual principal due as stated above: Optional Redemption: Certificates maturing in the years 2020 through 2023, inclusive, are callable at the option of the Issuer in whole or in part on July 1, 2019 and on any date thereafter, at a price of par plus accrued interest. This contract is made for prompt acceptance and subject to the approval of Eckberg, Lammers, Briggs, Wolff& Vierling, P.L.L.P. (Bond Counsel) of Stillwater, Minnesota, as to the legality and regularity of all proceedings taken in the issuance of the Certificates. The Issuer agrees to pay the expenses of registering the Certificates and the fee of Bond Counsel, recognized municipal bond attorneys, in furnishing the necessary proceedings required to authorize the issuance of the Certificates. Northland Securities,Inc.45 South 7ch Street,Suite 2000,Minneapolis,MN 55402 Toll Free 1-800-851-2920 Main 612-851-5900 Fax 612-851-5918 www.northlandsecurities.com Member FINRA and SIPC City of Scandia,Minnesota $570,000 General Obligation Equipment Certificates of Indebtedness, Series 2013A " No Advisory or Fiduciary Role. The City of Scandia ("Issuer') acknowledges and agrees that: (i) the transaction contemplated by this contract is an arm's length, commercial transaction beriveen the Issuer and Northland Securities, Inc.("NSI') in which NSI is acting solely as a principal and is not acting as a municipal advisor,financial advisor or fiduciary to the Issuer; (ii) NSI has not assumed arry advisory or fiduciary responsibility to the Issuer with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether NSI has provided other services or is currently providing other services to the Issuer on other matters); (iii) the only obligations NSI has to the Issuer with respect to the transaction contemplated hereby expressly are set forth in this contract,• and('rv)the Issuer has consulted its own legal, accountin� tar,financial and other advisors, as applicable, to the extent it has deemed appropriate. Respectfully submitted this 18th day of June, 2013. NORTHLA SE I ES, INC. By: The foregoing proposal was duly accepted by the City Counci of candia, Minnesota, at p.m. this 18�' day of June, 2013. �� r�< By: � Mayor Attest: City Administrator O � ON �OON �A �- MO� tntD � � � " � aOC� � NM �- NO� I� oO � � .. � �� N c'7 M � � � � �h C7 t'7 M ''� d C "' y — ; � � � NNNNNNNNNN � O :� > U � � � C y 'O � d O � � o c�o o ao ao co �n co r� u� rn eh � co o a� � � � O (� �O DaornO � No � rnaorn a E � � 3 ,:y � O x (� 0 1f1 1n (G (O lC lC tC � tff tfl � l0 �. C � O --. 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Accardingly,we propose as follows: We agee to purchase$570,000 Equipment Certificates of Indebtedness, Series 2013A to be dated July 1,2013 and to mature Jul l,2014-2023.� eegr to pay for the Certificates $ and accrued interest to the date of settlement. - The Certificates are to be payable at Northland Trust Services, Inc., Minneapolis,Minnesota,as paying agent and registrar. Interest is to be payable on Januar 1,2014 and semiannuall thereafter. The Certificates will have the following interest rates and will mature on July 1 in the years and amounts as follows: 2014 $ % 2019 $ % 2015 2020 2016 2021 2017 2022 2018 2023 All Certificates will be Book Entry and in multiples of$5,000.The average interest rate is %and the TIC is %. Mandatorv Redemption: This issue shall have term Certificates maturing l,20 (20 20 maturities), l,20 (20 20 maturities), 1,20 (20 20 maturities), 1,20 (20 20 maturities), 1,20 (20 20 maturities), 1,20 (20 20 maturities), l,20 (20 20 maturities)and 1,20 (20 20 maturities)which will have mandatory redemptions equal to the annual principal due as stated above. Optional Redemption: Certificates maturing in the years 2020 through 2023, inclusive, are callable at the option of the Issuer in whole or in part on July 1,2019 and on any date thereafter,at a price of par plus accrued interest. This contract is made for prompt acceptance and subject to the approval of Eckberg, Lammers, Briggs,Wolff& Vierling,P.L.L.P. (Bond Counsel)of Stillwater,Minnesota,as to the legality and regularity of all proceedings taken in the issuance of the Certificates. The Issuer agrees to pay the expenses of registering the Certificates and the fee of Bond Counsel,recognized municipal bond attorneys, in furnishing the necessary proceedings required to authorize the issuance of the Certificates. City of Scandia,Minnesota $570,000 General Obligation Equipment Certificates of Indebtedness, Series 2013A No Advisory or Fiduciary Role. The City of Scandia("Issuer")acknowledges and agrees that: (i)the transacrion contemplated by this contract is an arnt's length,commercial transaction between the Issuer and Northland Securities,Inc.("NSI")in which NSI is acting solely as a principal and is not acting as a municipal advisor,financial advisor or fiduciary to the Issuer;(ii)NSI has not assumed any adzrisory or fiduciary responsibility to the Issuer urith respect to the transaction contemplated hereby and the discussions,undertakings and procedures leading thereto (irrespective of whether NSI has provided other senrices or is currently providing other services to the Issuer on other matters);(iii)the only obligations NSI has to the Issuer urith respect to the transaction contemplated hereby expressly are set forth in this contract;and(iv) the Issuer has consulted its ozvn legal,accounring, tax,financial and other advisors, as applicable, to the extent it hns deemed appropriate. Respectfully submitted this day of ,2013. NORTHLAND SECURITIES, INC. By: The foregoing proposal was duly accepted by the City Council of Scandia,Minnesota,at .m.this day of ,2013. By: Mayor Attest: