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HomeMy WebLinkAboutResolution No. 091-09 00. 1 -09 • RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $2,865,000 GENERAL OBLIGATION REVENUE REFUNDING BONDS, SERIES 2009C A. WHEREAS, the Common Council of the City of Rochester, Minnesota(the "City"), has heretofore determined and declared that it is necessary and expedient to provide moneys for a current refunding of the City's General Obligation Revenue Refunding Bonds, Series 2001A dated September 15, 2001 (the "Prior Bonds") issued pursuant to the resolution of the Common Council, adopted September 15, 2001 (the "Prior Resolution"); and B. WHEREAS,the Prior Bonds which mature on or after December 1, 2009 (the "Refunded Bonds"), are callable on May 15, 2009, at a price of par plus accrued interest as provided in the Prior Resolution; and C. WHEREAS,the refunding of the Refunded Bonds is consistent with covenants made with the holders thereof, and is necessary and desirable for the reduction of debt service cost to the City; and D. WHEREAS, offers to purchase the Bonds were solicited on behalf of the City by Springsted Incorporated, an independent financial consultant ("Springsted"), and therefore the City is authorized to negotiate the sale of the Bonds without compliance with the public sale requirements of Chapter 475; and • E. WHEREAS,the Common Council has heretofore determined and declared that it is necessary and expedient to issue $2,865,000 General Obligation Revenue Refunding Bonds, Series 2009C (the "Bonds") of the City,pursuant to Minnesota Statutes, Chapter 475,to provide moneys for a current refunding of the Refunded Bonds; and F. WHEREAS, the following offers were received, opened and recorded, at the offices of Springsted, at 10:30 A.M.,this same clay. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota, as follows: 1. Acceptance of Offer. The offer of (the "Purchaser"), to purchase $2,865,000 General Obligation Revenue Refunding Bonds, Series 2009C of the City(the "Bonds" or the "Refunding Bonds", or individually a"Bond"), at the rates of interest hereinafter set forth, and to pay therefor the sum of$ , plus interest accrued to settlement is hereby found, determined and declared to be the most favorable offer received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser. The Finance Director is directed to retain the deposit of the Purchaser and to forthwith return to the others making offers their good faith checks or drafts. 2. Terms of Bonds. (a) Title; Original Issue Date; Denominations; Maturities. The Bonds shall be titled • "General Obligation Revenue Refunding Bonds, Series 2009C", shall be dated March 15, 2009, as the date of original issue and shall be issued forthwith on or after such date as fully registered 2303232v1 • bonds. The Bonds shall be numbered from R-1 upward in the denomination of$5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on December 1 in the years and amounts as follows: Year Amount 2009 $945,000 2010 945,000 2011 975,000 (b) Book Entry Only System; Letter of Representations. The Bonds shall be issued in book entry form. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any successor to its functions hereunder(the "Depository") will act as securities depository for the Bonds, and to this end: (i) The Bonds shall be initially issued and, so long as they remain in book entry form only(the "Book Entry Only Period"), shall at all times be in the form of a separate single fully registered Bond for each maturity of the Bonds; and for purposes of complying with this requirement under paragraphs 7 (with respect to redemption) and 12 (with respect to registration, transfer and exchange) Authorized Denominations for any Bond shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Bond. • (ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond register maintained by the City Finance Director in Rochester, Minnesota(the "Bond Registrar") in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee"). (iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Bonds as securities depository(the "Participant") or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant(the 'Beneficial Owner"). Without limiting the immediately preceding sentence,neither the City,nor the Bond Registrar, shall have any such responsibility or obligation with respect to (A)the accuracy of the records of the Depository,the Nominee or any Participant with respect to any ownership interest in the Bonds, or (B)the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any notice of redemption, or(C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Bonds,or(D)the consent given or other action taken by the Depository as the Registered Holder of any Bonds (the "Holder"). For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its • consenting or voting rights to certain Participants to whose accounts the Bonds 2303232v1 2 • are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Bond Registrar may treat as and deem the Depository to be the absolute owner of the Bonds for the purpose of payment of the principal of and premium, if any, and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to the Bonds, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Bonds only to or upon the Holder of the Holders of the Bonds as shown on the bond register, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Bond Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 12 hereof(with respect to registration, transfer and exchange), references to the Nominee hereunder shall refer to such new Nominee. • (vi) So long as any Bond is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively,by the Bond Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations,to the Depository required by the Depository as a condition to its acting as book-entry Depository for the Bonds (said Letter of Representations,together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book entry Depository for the Bonds, collectively hereinafter referred to as the "Letter of Representations"). The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution,the provisions in the Letter of Representations shall control. 3. Purpose; Refunding Findings. The Bonds shall provide funds for a current refunding of the Refunded Bonds (the "Refunding"). It is hereby found, determined and declared that the Refunding is pursuant to Minnesota Statutes, Section 475.67, Subdivision 3, and shall result in a reduction of debt service cost to the City. It is hereby found, determined and declared that such refunding is necessary or desirable for the reduction of debt service cost to the City and/or the adjustment of the maturities of the Prior Bonds in relation to the sources for their • repayment and will result in a reduction of debt service cost to the City. All of the proceeds, including all investment earnings thereon, of the Prior Bonds have heretofore been expended by 2303232v1 3 the City for the uses and purposes for which the City issued said Prior Bonds. The balance in the debt service account heretofore established by the City for the payment of the principal of and interest on the Prior Bonds has been taken into account in appropriately sizing the Bonds. 4. Interest. The Bonds shall bear interest payable semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing December 1, 2009, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Year Rate 2009 % 2010 2011 5. No Redemption. The Bonds shall not be subject to redemption and prepayment prior to their maturity. 6. Bond Re ig strar. City Finance Director in Rochester, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond • Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 12 of this resolution. 7. Form of Bond. The Bonds,together with the Bond Registrar's Certificate of Authentication,the form of Assignment and the registration information thereon, shall be in substantially the following form: 2303232v1 4 UNITED STATES OF AMERICA STATE OF MINNESOTA CITY OF ROCHESTER R- $ GENERAL OBLIGATION REVENUE REFUNDING BOND, SERIES 2009C INTEREST MATURITY DATE OF RATE DATE ORIGINAL ISSUE CUSIP March 15, 2009 REGISTERED OWNER: CEDE& CO. PRINCIPAL AMOUNT: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the City of Rochester, Olmsted County,Minnesota(the "Issuer"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth,the principal amount specified above,unless called for earlier redemption, on the maturity date specified above, and to pay interest thereon semiannually on June 1 and December 1 of each year(each, an "Interest Payment Date"), commencing December 1, 2009, at the rate per annum specified above (calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of the City Finance Director in Rochester, Minnesota(the 'Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered(the "Holder" or 'Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. So long as this Bond is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein,payment of principal of and interest on this Bond and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution. Bonds may only be • registered in the name of the Depository or its Nominee. 23032320 5 • No Redemption. The Bonds are not subject to redemption and prepayment prior to their maturity. Issuance• Purpose General Obligation. This Bond is one of an issue in the total principal amount of$2,865,000, all of like date of original issue and tenor, except as to number, maturity, interest rate and denomination,which Bond has been issued pursuant to and in full conformity with the Constitution, laws of the State of Minnesota and pursuant to a resolution adopted by the Common Council of the Issuer on March 2, 2009 (the "Resolution"), for the purpose of providing funds sufficient for a current refunding of the Issuer's General Obligation Revenue Refunding Bonds, Series 2001A, dated September 15, 2001, which mature on December 1, 2009, and thereafter. This Bond is payable out of the Debt Service Account of the Issuer's General Obligation Revenue Refunding Bonds, Series 2009C Fund. This Bond has been issued in aid of refinancing improvements to the municipal sanitary sewer disposal system within the meaning of Minnesota Statutes, Section 115.46. Denominations; Exchange; Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of$5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. • Transfer. This Bond is transferable by the Holder in person or by his,her or its attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owners. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided herein with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed • by the Bond Registrar. 2303232v1 6 Qualified Tax-Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and Charter of the Issuer to be done,to happen and to be performed,precedent to and in the issuance of this Bond,have been done, have happened and have been performed, in regular and due form, time and manner as required by law;that the Issuer has covenanted and agreed with the Holders of the Bonds that it will impose and collect charges for the service,use and availability of its sewer utility (the Utility ) at the times and in amounts necessary to produce net revenues,together with other sums pledged to the payment of the Bonds, adequate to pay all principal and interest when due on the Bonds; and that the Issuer will levy a direct, annual, irrepealable ad valorem tax upon all of the taxable property of the Issuer, without limitation as to rate or amount, for the years and in amounts sufficient to pay the principal and interest on such portion of the Bonds as they respectively become due, if the net revenues from the utility and any other sums irrevocably appropriated to the Debt Service Account are insufficient therefor; and that this Bond,together with all other debts of the Issuer outstanding on the date of original issue hereof and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional, statutory or charter limitation of indebtedness. IN WITNESS WHEREOF, City of Rochester, Olmsted County, Minnesota, by its • Common Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Clerk,the corporate seal of the Issuer having been intentionally omitted as permitted by law. Date of Registration Registrable by: City Finance Director Rochester,Minnesota Payable at: City Finance Director Rochester, Minnesota CITY OF ROCHESTER, MINNESOTA BOND REGISTRAR'S CERTIFICATE OF /s/ AUTHENTICATION Mayor This Bond is one of the Bonds described in the Resolution mentioned within. /s/ Clerk City Finance Director, Rochester,Minnesota Bond Registrar a By: Authorized Signature 2303232v1 7 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ET- as tenants by the entireties JT TEN- as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. • 2303232v1 8 ASSIGNMENT For value received,the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof,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 Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s)must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor • Institution" as defined in 17 CFR 240.17 Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) • 2303232v1 9 • 8. Execution; Temporary Bonds. The Bonds shall be printed (or, at the request of the Purchaser, typewritten) shall be executed on behalf of the City by the signatures of its Mayor and Clerk and be sealed with the seal of the City; provided,however,that the seal of the City may be a printed (or, at the request of the Purchaser, photocopied) facsimile; and provided further that both of such signatures may be printed (or, at the request of the Purchaser, photocopied) facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes,the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in substantially the form set forth above,with such changes as may be necessary to reflect more than one maturity in a single temporary bond. The temporary bonds may be executed with photocopied facsimile signatures of the Mayor and Clerk. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and canceled. 9. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different . Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser,the Bond Registrar shall insert as a date of registration the date of original issue, which date is March 15, 2009. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 10. Registration; Transfer; Exchange. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe,the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar,the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration(as provided in paragraph 9 with respect to authentication) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any authorized denomination or denominations of a like aggregate principal amount,having the same stated maturity and interest rate, as requested by the transferor; provided,however,that no Bond may be registered in blank or in the name of"bearer" or similar designation. At the option of the Holder, Bonds may be exchanged for Bonds of any authorized idenomination or denominations of a like aggregate principal amount and stated maturity,upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever 2303232v1 10 • any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the Holder making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the City. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or his,her or its attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 11. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 12. Interest Payment; Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth(15th) day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten(10) days prior to the Special Record Date. 13. Treatment of Registered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest(subject to the payment provisions in paragraph 12 above, with respect to interest payment and record date) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 2303232v1 11 . 14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Clerk to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Revenue Refunding Bonds, Series 2009C Fund" (the "Fund")to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Bonds and the interest thereon have been fully paid. There shall be maintained in the Fund two (2) separate accounts,to be designated the "Payment Account" and "Debt Service Account",respectively. (i) Payment Account. To the Payment Account there shall be credited the proceeds of the sale of the Bonds, less accrued interest received thereon, and less any amount paid for the Bonds in excess of$2,853,540. From the Payment Account shall be paid all costs of issuance of the Bonds. The Finance Director shall transfer $ from the Payment Account to the debt service account of the Prior Bonds on or before May 15, 2009, which amount together with moneys on hand herein, are sufficient to pay the principal and interest due on the Prior Bonds on May 15, 2009, which is the date on which they will be called for redemption. Any balance remaining in the fund after the payment of the costs of issuance of the Bonds shall be transferred to the Debt Service Account. • (ii) Debt Service Account. To the Debt Service Account there is hereby pledged and irrevocable appropriated and there shall be credited: (1)the accrued interest received on the sale of the Bonds, (2) any amount paid for the Bonds in excess of $2,853,540, (3) any balance remitted to the City upon the termination of the Payment Account; (4) all investment earnings on funds in the Debt Service Account; (5) any collections of taxes levied by the City for the payment of the Bonds and interest thereon; and (6) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The amount of any surplus remaining in the Debt Service Account when the Bonds and interest thereon are paid shall be used consistent with Minnesota Statutes, Section 475.61, Subdivision 4. The moneys in the Debt Service Account shall be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund. No portion of the proceeds of the Bonds 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 (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and(2) in addition to the above, in an amount not greater than the lesser of five percent(5%) of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Fund (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any 2303232v1 12 • applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and money in the Fund shall not be invested 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 such investment would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended(the "Code"). 16. Prior Bonds; Security. Until retirement of the Prior Bonds, all provisions theretofore made for the security thereof shall be observed by the City and all of its officers and agents. 17. Sufficiency of Net Revenues; Coverage Test. It is hereby found, determined and declared that the net revenues of the sewer utility (the "Utility") are sufficient in amount to pay when due the principal of and interest on the Bonds herein authorized, and the net revenues of the Utility are hereby pledged for the payment of the Bonds and shall be applied for that purpose, but solely to the extent required to meet the principal and interest requirements of the Bonds as the same become due. Excess net revenues may be used for any proper purpose. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the net revenues of the Utility for the payment of other or additional obligations of the City, provided that it has first been determined by the Common Council that the estimated net revenues of the Utility will be sufficient in addition to all other sources, for the payment of the Bonds herein authorized, and such additional obligations and any such pledge • and appropriation of the net revenues may be made superior or subordinate to, or on a parity with the pledge and appropriation herein 18. Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes, Section 444.075,the City hereby covenants and agrees with the Holders of the Bonds that it will impose and collect charges for the service, use, availability and connection to the Utility at the times and in the amounts required to produce net revenues adequate to pay all principal and interest when due on the Bonds. 19. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall,to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also at any time discharge its obligations with respect to any Bonds, without regard to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required,without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if notice of redemption as herein required has been duly • provided for,to such earlier redemption date. 2303232v1 13 • 20. General Obligation Pledge. For the prompt and full payment of the principal of and interest on the Bonds as the same respectively become due, the full faith, credit and taxing powers of the City shall be and hereby are irrevocably pledged. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds payable therefrom, the deficiency shall be promptly paid out of any other accounts of the City which are available for such purpose, and such other funds may be reimbursed without interest from the Payment Account or Debt Service Account when a sufficient balance is available therein. 21. Redemption of Prior Bonds. The Prior Bonds which mature in 2009 and thereafter shall be redeemed and prepaid on May 15, 2009, in accordance with the terms and conditions set forth in the Notice of Call for Redemption attached hereto as Exhibit A, which terms and conditions are hereby approved and incorporated herein by reference. The City Finance Director is hereby directed to mail the Notice of Call for Redemption to the Holders of the Prior Bonds at least 30 days prior to May 15, 2009. 22. Certificate of Registration. The Clerk is hereby directed to file a certified copy of this resolution with the County Auditor of Olmsted County, Minnesota,together with such other information as the County Auditor shall require, and to obtain the County Auditor's Certificate that the Bonds have been entered in the County Auditor's Bond Register. 23. Records and Certificates. The officers of the City are hereby authorized and • directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 24. Negative Covenant as to Use of Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or to use the property refinanced by the Bonds, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 25. Continuing Disclosure. (a) The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"),promulgated by the Securities and Exchange Commission (the "Commission")pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereinafter described to: (1) provide or cause to be provided to each nationally recognized municipal securities information repository ("NRMSIR") and to the appropriate ate information depository ("SID"), if any, for the State of Minnesota, in each case as designated by the 2303232v1 14 Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. (2) Provide or cause to be provided, in a timely manner,to (i) each NRMSIR or to the Municipal Securities Rulemaking Board("MSRB") and(ii) the SID, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking. (3) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ii)the SID, notice of a failure by the Issuer to provide the annual financial information with respect to the Issuer described in the Undertaking. (4) The City agrees that its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking is intended to be for the benefit of the holders of the Bonds and shall be enforceable on behalf of such holders;provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. (5) The Mayor and Clerk of the City, or any other officer of the City authorized to act in their place, (the "Officers") are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the Common Council, subject to such modifications thereof or additions thereto as are (i) • consistent with the requirements under the Rule, (ii)required by the purchaser of the Bonds and (iii) acceptable to the Officers. 26. Tax Exempt Status of the Bonds: Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1)requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and(3)the rebate of excess investment earnings to the United States. 27. Designation of Qualified Tax-Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code,the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986, and after December 31, 2008; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; I (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax-exempt government obligations which will be issued by the City (and all entities es treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2009 will not exceed $30,000,000; 2303232v1 15 • (e) not more than$30,000,000 of obligations issued by the City during this calendar year 2009 have been designated for purposes of Section 265(b)(3) of the Code; (f) the aggregate face amount of the Bonds does not exceed $30,000,000; and (g) the Bonds are issued to refund, and not to "advance refund" the Prior Bonds within the meaning of Section 149(d)(5) of the Code, and shall not be taken into account under the $30,000,000 issuance limit to the extent the Bonds do not exceed the outstanding amount of the Prior Bonds. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 28. Supplemental Resolution. The Prior Resolution is hereby supplemented to the extent necessary to give effect to the provisions of this resolution. 29. Severability. If any section,paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 30. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. • PASSED AND ADOPTED BY THE COMMO UNCIL OF THE CITY: F ROCHESTER, MINNESOTA, THIS 2nd DAY OF SIDENT OF SAID COMMON COUNCIL ATTEST: CIT CLE Approved this day of _ , 2009. MAYOR OF SAID CITY (Seal of the City of Rochester,Minnesota) 2303232v1 16 • EXHIBIT A NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION REVENUE REFUNDING BONDS, SERIES 2001A CITY OF ROCHESTER OLMSTED COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the Common Council of the City of Rochester, Olmsted County, Minnesota, there have been called for redemption and prepayment on May 15, 2009 those outstanding bonds of the City designated as General Obligation Revenue Refunding Bonds, Series 2001A, dated September 15, 2001, having stated maturity dates of December 1 in the years 2009 through 2011, both inclusive, and totaling $2,820,000 in principal amount. The bonds are being called at a price of par plus accrued interest to May 15, 2009, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the office of the City Finance Director in Rochester, Minnesota, on or before May 15, 2009. Dated: March 2, 2009 BY ORDER OF THE COMMON COUNCIL OF THE CITY OF ROCHESTER • 2303232v1 CERTIFICATION I, the undersigned City Clerk of the City of Rochester, Minnesota, do hereby certify the following: The foregoing is true and correct copy of a Resolution on file and of record in the offices of the City,which Resolution relates to the issuance by the City of its General Obligation Revenue Refunding Bonds, Series 2009C. Said Resolution was duly adopted by the Rochester Common Council at a regular or special meeting of the Council held on March 2, 2009. Said meeting was duly called and regularly held and was open to the public and was held at the place at which meetings of the Council are regularly held, a quorum of the Council being present and acting throughout. Councilmember kbicik moved the adoption of the Resolution,which motion was seconded by Councilmember DbAcid . A vote being taken on the motion, the following members of the Council voted in favor of the Resolution: President Damis Hxnsm, s IErk BiMerback, Fd Hevska, Sera �bx1S, Bob NJAc1dj Bnx-e SrydEr, I Jidmd 'tibjcik and the following voted against the same: None Whereupon said Resolution was declared duly passed and adopted. The Resolution is in full force and effect and no action has been taken by the Council which would in any way alter or amend the Resolution. • WITNESS MY HAND officially as the City Clerk of the City of Rochester, Minnesota, this day of March, 2009. City Clerk City of Rochester, Minnesota 2303232v1 17 i