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HomeMy WebLinkAboutResolution No. 119-26 - Resolution - Rochester Sales Tax 2026A Bond Award RESOLUTION Resolution Authorizing the Sale of General Obligation Sales Tax Revenue Bonds, Series 2026A and Providing for their Issuance, Subject to Certain Parameters BE IT RESOLVED By the Common Council of the City of Rochester, Olmsted County, Minnesota (the “City”), as follows: Section 1. Findings, Determinations; Sale of Bonds. 1.01 It is hereby determined that: (a) pursuant to Minnesota Statutes, Chapter 475 and Minnesota Laws 2023, Chapter 64, Article 10, Sections 6 through 9, inclusive (the “Special Law” and, together with Chapter 475, the “Act”), and pursuant to a referendum question duly approved by the electorate of the City on November 7, 2023, the City has been authorized to impose certain sales and use taxes (collectively, the “Sales Taxes”) and to issue its general obligation bonds for various purposes, as specified in the Special Law; (b) the Council and the City have complied with Minnesota Statutes, Section 645.021, Subdivision 3, in approving the Special Law; (c) it is necessary and expedient to the sound financial management of the affairs of the City to issue General Obligation Sales Tax Revenue Bonds, Series 2026A (the “Bonds”), in the maximum principal amount of $65,000,000, to provide financing for the purposes specified in the Special Law, including without limitation, construction of a sports and recreation complex in the City as more specifically described in the Special Law (the “Project”); and (d) the City is authorized by Minnesota Statutes, Section 475.60, Subdivision 2(9) to negotiate the sale of the Bonds, if the City has retained an independent municipal advisor in connection with such sale. The City has retained Baker Tilly Municipal Advisors, LLC as an independent municipal advisor in connection with the sale of the Bonds. The actions of the City staff and the City’s municipal advisor in negotiating the sale of the Bonds are ratified and confirmed in all aspects. 1.02. Terms of Bond Sale; Notices. The City has retained Baker Tilly Municipal Advisors LLC, St. Paul, Minnesota (“Baker Tilly”) as independent municipal advisor, and, pursuant to Minnesota Statutes, Section 475.60, subdivision 2, paragraph 9, Baker Tilly is hereby authorized to solicit proposals for the Bonds on behalf of the City on a competitive basis without requirement of published notice. The City hereby establishes a pricing committee with respect to the sale of the Bonds comprised of the City Administrator and the City Director of Finance (the “Pricing Committee”). The Pricing Committee is authorized and directed, upon satisfaction of the conditions for the issuance of the Bonds under the Act and with the advice of Baker Tilly MA, to (i) review proposals for the sale of the Bonds; (ii) award the sale of the Bonds to the prospective purchaser (the “Purchaser”), not later than 120 days from the date hereof, in an aggregate principal amount not to exceed $65,000,000 plus any premium, with a true interest cost not to exceed 5.00% and a final maturity not later than February 1, 2046; (iii) approve the dates for optional redemption or any mandatory sinking fund redemption schedule; and (iv) approve the principal amounts and maturities of the Bonds, all as set forth in a Pricing Certificate executed by the Pricing Committee (the “Pricing Certificate”). 4897-0789-5216.5 Subject to a determination by the Pricing Committee, the City hereby approves the sale of the Bonds to the Purchaser, at the price, par bond principal amount, maturity schedule, and rates to be determined by the Pricing Committee based on the lowest true interest cost. 1.03. Contract with the Purchaser. Any amount paid by the Purchaser over the minimum purchase price shall be credited to the Debt Service Fund hereinafter created, or deposited in the Construction Fund hereinafter created, as determined by the City Director of Finance after consultation with the City’s municipal advisor. The City Clerk is directed to retain the good faith deposit of the Purchaser pending completion of the sale of the Bonds. The Mayor or Council President and City Director of Finance are authorized and directed to execute a contract with the Purchaser on behalf of the City, if requested by the Purchaser. 1.04. Terms and Principal Amount of Bonds. Subject to a determination by the Pricing Committee, the City will forthwith issue and sell the Bonds pursuant to Act, in an aggregate principal amount not to exceed $65,000,000 plus any premium, originally dated as of the date of issuance, in fully registered form, in denominations of $5,000 each or any integral multiple thereof, numbered No. R-1 and upward, bearing interest as determined by the Pricing Committee, and maturing on February 1 in the years and amounts as determined by the Pricing Committee. As may be requested by the Purchaser, one or more term Bonds may be issued having mandatory sinking fund redemption and final maturity amounts as set forth in the principal repayment schedule in the Pricing Certificate, and corresponding additions may be made to the provisions of the applicable Bond(s). 1.05. Optional Redemption. The Pricing Committee will determine whether and when the Bonds will be subject to optional redemption prior to maturity. If the Bonds are subject to optional redemption, the following provisions shall apply: 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 Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 6 hereof) 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. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond 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 Bond 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 Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2027 or such other date determined by the Pricing Committee, to the registered owners thereof of record as of the close of 4897-0789-5216.5 2 business on the 15th day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City will appoint, and will maintain, a bond 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) Register. The Registrar will keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred, or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds 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 15th day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. Whenever any Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is at any time registered, in the bond register as the absolute owner of such Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond 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 Bond to the extent of the sum or sums so paid. (g) Taxes, Fees, and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds 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 Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, 4897-0789-5216.5 3 maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond 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 Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to the Registrar that the Bond was destroyed, stolen, or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance, and amount satisfactory to the Registrar and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds 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 Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, written notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) not less than 30 days prior to the redemption date to the registered owner of each Bond 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 for the redemption of Bonds. Bonds 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 Registrar. The City appoints U.S. Bank Trust Company, National Association, St. Paul, Minnesota as the initial Registrar. The Mayor or Council President and the City Clerk are authorized and directed to execute and deliver, on behalf of the City, a contract with the Registrar, if necessary. 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 Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Clerk must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication, and Delivery. The Bonds will be prepared under the direction of the City Director of Finance, which the Mayor or Council President and the City Clerk are authorized and directed to execute on behalf of the City, 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 Bonds ceases to be such officer before the delivery of any Bond, 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 Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Director of Finance will deliver 4897-0789-5216.5 4 the same to the Purchaser thereof upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Form of Bond. The Bonds will be printed or typewritten in substantially the form set forth in Exhibit A attached hereto. 2.07. Approving Legal Opinion. The City Director of Finance is authorized and directed to obtain a copy of the proposed approving legal opinion of Kutak Rock LLP, Minneapolis, Minnesota, which will be complete except as to dating thereof and will cause the opinion to be printed on or accompany each Bond. Section 3. Payment; Security; Funds; Pledges and Covenants. 3.01. Debt Service Fund. For the convenience and proper administration of the moneys to be borrowed and repaid on the Bonds, and to provide adequate and specific security for the Purchaser and holders from time to time of the Bonds, there is hereby created a special fund to be designated the General Obligation Sales Tax Revenue Bonds, Series 2026A Debt Service Fund (the “Debt Service Fund”). The Debt Service Fund shall be administered and maintained by the City Director of Finance as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Debt Service Fund will be maintained in the manner herein specified until all of the Bonds and the interest thereon have been fully paid. To the Debt Service Fund there is hereby pledged and irrevocably appropriated and there will be credited: (i) sufficient amounts of revenues generated by the Sales Taxes to pay principal of and interest on the Bonds when due; (ii) any amount over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03; (iii) the accrued interest paid by the Purchaser upon closing and delivery of the Bonds, if any; (iv) all investment earnings on amounts in the Debt Service Fund; and (v) any other funds appropriated for the payment of principal or interest on the Bonds. The City Director of Finance must report any current or anticipated deficiency in the Debt Service Fund to the Common Council. If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the City Director of Finance is directed to pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for the advances out of the revenues generated by the Sales Taxes and other taxes when collected. 3.02. Construction Fund. The City hereby creates the General Obligation Sales Tax Revenue Bonds, Series 2026A Construction Fund (the “Construction Fund”) to be administered and maintained by the City Director of Finance as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The proceeds of the Bonds, less the appropriations made in Section 3.01, together with any other funds appropriated for the Project, will be deposited in the Construction Fund. Amounts in the Construction Fund will be disbursed to (i) pay costs of the Project and costs of issuance of the Bonds; and (ii) pay any capitalized interest financed with the proceeds of the Bonds during or after construction of the Project. Any balance remaining in the Construction Fund after completion of the Project may be used as provided in Minnesota Statutes, section 475.65, under the direction of the Common Council and in accordance with the Special Law. Thereafter, the Construction Fund is to be closed and any balance remaining therein is to be deposited in the Debt Service Fund. 3.03. Debt Service Coverage. Pursuant to Subdivisions 1 and 1a of the Special Law and an ordinance adopted by the City Council on March 18, 2024, the City has imposed the Sales Taxes. 4897-0789-5216.5 5 The revenues received from the Sales Tax are hereby pledged to the payment of the principal of and interest on the Bonds as set forth in the Pricing Certificate. It is determined that the estimated revenues of the Sales Tax authorized by the Special Law for the payment of principal and interest on the Bonds will produce at least 5% in excess of the amount needed to meet when due the principal and interest payments on the Bonds and that no tax levy is needed at this time. 3.04 General Obligation. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are irrevocably pledged. If the Sales Tax appropriated and pledged to the payment of principal and interest on the Bonds, together with other funds irrevocably appropriated to the Debt Service Account herein established, shall at any time be insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount an ad valorem tax upon all taxable property in the City sufficient to pay such principal and interest as it becomes due. 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 Debt Service Account when a sufficient balance is available therein 3.05. Registration of Resolution. The City Director of Finance is authorized and directed to file a certified copy of this resolution with the County Director of Property Records and Licensing of Olmsted County, Minnesota (the “County Auditor”), and to obtain the certificate required by Section 475.63 of the Act. Section 4. Authentication of Transcript. 4.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds 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 Bonds, and such instruments, including any heretofore furnished, may be deemed representations of the City as to the facts stated therein. 4.02. Certification as to Official Statement. The Mayor or Council President, City Clerk, City Administrator and City Director of Finance, or any of them 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 Bonds and that to the best of their knowledge and belief the Official Statement is, as of the date thereof, a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement as it relates to the City. 4.03. Other Certificates. The Mayor or Council President, City Clerk, City Administrator and City Director of Finance, or any of them, are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor or Council President, City Clerk, City Administrator and City Director of Finance, or any of them, shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the City Director of Finance shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 4897-0789-5216.5 6 4.04 Electronic Signatures. The electronic signature of the Mayor or Council President, City Clerk, City Administrator and City Director of Finance, or any of them, to this resolution and to any certificate authorized to be executed hereunder shall be as valid as an original signature of such party and shall be effective to bind the City thereto. For purposes hereof, (i) “electronic signature” means (a) a manually signed original signature that is then transmitted by electronic means or (b) a signature obtained through DocuSign or Adobe or a similarly digitally auditable signature gathering process; and (ii) “transmitted by electronic means” means sent in the form of a facsimile or sent via the internet as a portable document format (“pdf”) or other replicating image attached to an electronic mail or internet message. Section 5. Tax Covenants. 5.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds 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 Bonds 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 Bonds. To that end, the City will comply with all requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds. 5.02. Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States unless the Bonds qualify for an exception to the rebate requirement under the Code and related Treasury Regulations. 5.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or the Project financed by the Bonds, or to cause or permit them or any of them to be used, 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. 5.04 No Designation of Qualified Tax-Exempt Obligations. The Bonds have not been designated as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code. 5.05. 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 6. Book-Entry System; Limited Obligation of City. 6.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in the Pricing Certificate. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the 4897-0789-5216.5 7 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 Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 6.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, 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 Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar) of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds 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, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Director of Finance 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 Director of Finance will promptly deliver a copy of the same to the Registrar and Paying Agent. 6.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 6.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the Common Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond 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 Bonds 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 Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 4897-0789-5216.5 8 6.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter. Section 7. Continuing Disclosure. 7.01. Execution of Continuing Disclosure Certificate. “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate, dated the date of issuance and delivery of the Bonds, which is authorized and directed to be executed by the Mayor or Council President and City Clerk, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 7.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby 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 is not an event of default with respect to the Bonds; however, any Bondholder 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 8. Defeasance. When all Bonds and all accrued interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of all Bonds 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 Bonds will remain in full force and effect. The City may discharge all Bonds 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 or by depositing irrevocably in escrow, with a suitable institution qualified by law as an escrow agent for this purpose, cash or securities which are backed by the full faith and credit of the United States of America, or any other security authorized under Minnesota law for such purpose, bearing interest payable at such times and at such rates and maturing on such dates and in such amounts as shall be required and sufficient, subject to sale and/or reinvestment in like securities, to pay said obligation(s), which may include any interest payment on such Bond and/or principal amount due thereon at a stated maturity (or if irrevocable provision shall have been made for permitted prior redemption of such principal amount, at such earlier redemption date). If any Bond 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 . 4897-0789-5216.5 9 PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF __________________, 2026. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________, 2026. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 4897-0789-5216.5 10 4897-0789-5216.5 11 EXHIBIT A No. R-_____ UNITED STATES OF AMERICA $_________ STATE OF MINNESOTA COUNTY OF OLMSTED CITY OF ROCHESTER, MINNESOTA GENERAL OBLIGATION SALES TAX REVENUE BOND SERIES 2026A Date of Rate Maturity Date Original Issue CUSIP % February 1, 20__ ___________, 2026 Registered Owner: Cede & Co. The City of Rochester, Minnesota, a duly organized and existing municipal corporation in Olmsted County, Minnesota (the “City”), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner specified above or registered assigns, the principal sum set forth above on the Maturity Date specified above, unless called for earlier redemption, with interest thereon from the date hereof at the annual Rate specified above (calculated on the basis of a 360-day year of twelve 30 day months), payable February 1 and August 1 in each year, commencing February 1, 2027, to the person in whose name this Bond is registered at the close of business on the 15th 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 U.S. Bank Trust Company, National Association, St. Paul, 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 February 1, 2036, and on any date thereafter to prepay Bonds due on or after February 1, 2037. 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 Bonds of a maturity are called for redemption, the City will notify the 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. This Bond is one of an issue in the aggregate principal amount of $65,000,000 all of like original issue date and tenor, except as to number, maturity date, interest rate, denomination and redemption privilege, all issued pursuant to a resolution adopted by the Common Council on July 6, 2026 (the “Resolution”), for the purpose of providing money to aid in financing the cost of the certain capital projects in the City, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 475, as amended, and Minnesota Laws 2023, Chapter 64, Article 10, Sections 6 through 9, inclusive (the “Special Law”). The principal 4897-0789-5216.5 A-1 hereof and interest hereon are payable primarily from sales and use tax revenues of the City authorized by the Special Law, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the Common Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency, which additional taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. The Bond is not a “qualified tax-exempt obligation” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). As provided in the Resolution and subject to certain limitations set forth therein, this Bond 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 Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds 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 Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution, laws of the State of Minnesota and charter of the City to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. This Bond 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. IN WITNESS WHEREOF, the City of Rochester, Olmsted County, Minnesota, by its Common Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor or Council President and City Clerk and has caused this Bond to be dated as of the date set forth below. 4897-0789-5216.5 A-2 Dated: ___________, 2026 CITY OF ROCHESTER, MINNESOTA (Facsimile) (Facsimile) Mayor or Council President City Clerk ______________________________________ CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, ST. PAUL, MINNESOTA By Authorized Representative ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT _________ Custodian _________ (Cust) (Minor) TEN ENT -- as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of _______________ JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ________________________________________ ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ________________________________________ the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint _________________________ attorney to transfer 4897-0789-5216.5 A-3 the said Bond on the books kept for registration of the within Bond, 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: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”), the New York Stock Exchange, Inc. Medallion Signatures Program (“MSP”) or other such “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee ________________________________________ PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. 4897-0789-5216.5 A-4 Signature of Date of Registration Registered Owner Registrar Cede & Co. ___________, 2026 Federal ID #13-2555119 4897-0789-5216.5 A-5 STATE OF MINNESOTA CERTIFICATE OF COUNTY DIRECTOR OF PROPERTY RECORDS AND LICENSING COUNTY OF OLMSTED AS TO REGISTRATION WHERE NO AD VALOREM TAX LEVY I, the undersigned County Director of Property Records and Licensing of Olmsted County, Minnesota, hereby certify that a certified copy of a resolution adopted by the Common Council of the City of Rochester, Minnesota (the “City”), on July 6, 2026, and the accompanying Certificate of Pricing Committee relating to its $_____________ General Obligation Sales Tax Revenue Bonds, Series 2026A, dated ___________, 2026, has been filed in my office and said obligations have been registered on the register of obligations in my office. WITNESS My hand and official seal this ____ day of __________, 2026. ___________________________________ County Director of Property Records and Licensing Olmsted County, Minnesota By_______________________________ Deputy 4897-0789-5216.5