Loading...
HomeMy WebLinkAboutResolution No. 527-08 _J • RESOLUTION BE IT RESOLVED by the Common Council of the City of Rochester that the City approve of the issuance of the $2.5 million General Obligation Sales Tax Note of 2008 and loan agreement with the Minnesota Public Facilities Authority. The Mayor, City Clerk and Finance Director are authorized and directed to execute any and all documents required for the completion of this transaction on behalf of the City. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS P% DAY OF 1u�c VY► lL , 2008. PRESIDENT OF SAID COMMON COUNCIL ATTEST: - ✓ • CMY CLERK APPROVED THIS DAY OF 2008. MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) ResMExecuteAgA240 • EXTRACT OF MINUTES OF A MEETING OF THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA Pursuant to due call and notice thereof, a regular meeting of the Common Council of the City of Rochester, Minnesota, was duly held in the Council/Board Chambers in the Government Center on November 3, 2008, commencing at 7:00 o'clock P.M., for the purpose in part of awarding the sale of a$2,500,000 General Obligation Sales Tax Revenue Note of 2008 of the City. The following Councilmembers were present: President Dennis Hanson, Councilmembers Pat Carr, Ed Hruska, Marcia Marcoux, Sandra Means, Bob Nowicki , Bruce Snyder and the following Councilmembers were absent: None During said meeting Marcia Marcoux introduced the following resolution and moved its adoption: CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION NO. 59? -08 RESOLUTION ACCEPTING THE OFFER OF THE MINNESOTA PUBLIC FACILITIES AUTHORITY TO PURCHASE A$2,500,000 GENERAL OBLIGATION SALES TAX REVENUE NOTE OF 2008 AND AUTHORIZING EXECUTION OF A PROJECT LOAN AGREEMENT A WHEREAS,pursuant to Laws of Minnesota for 1998, Chapter 389, Article 8, Section 43 (the "Special Law"), and pursuant to a referendum question duly approved by the electorate of the City on June 23, 1998,the City has been authorized to impose certain sales and use taxes (collectively,the "Taxes") and to issue its general obligation bonds for various purposes, as specified in the Special Law, including transportation infrastructure improvements. B. WHEREAS,the Council and the City have complied with Minnesota Statutes, Section 645.021, Subdivision 3, in approving the Special Law. C. WHEREAS, it is necessary and expedient that the City issue its bonds pursuant to • the Special Law and Minnesota Statutes, Chapter 475,to provide financing for a portion of the costs of Phase 2 of the reconstruction of 50th Avenue NW (the "Project"). 2252666v1 . D. WHEREAS,the City shall continue to impose and collect the Taxes at least as long as any portion of the Note (hereinafter defined), or any obligations issued to refund the Note,remains unpaid or undefeased. E. WHEREAS,the City has heretofore applied for a loan from the Minnesota Public Facilities Authority(the "PFA")to provide financing for the Project. F. WHEREAS,the PFA is authorized pursuant to Minnesota Statutes, Chapter 446A, as amended (the "Act"), to issue its bonds (the "PFA Bonds") and to use the proceeds thereof, together with certain other funds, to provide loans to municipalities to fund eligible costs of construction of publicly owned transportation facilities in accordance with the Act and the Minnesota Department of Transportation. G. WHEREAS,the City has applied for a loan from the PFA pursuant to such program, and the PFA has committed to make a loan to the City in the principal amount of $2,500,000, which loan is to be disbursed and repaid in accordance with the terms of a Minnesota Public Facilities Authority General Obligation Bond Purchase Agreement and Project Loan Agreement, Transportation Revolving Fund (the "Project Loan Agreement"), between the PFA and the City, a copy of which is on file with the City Clerk. H. WHEREAS,the $2,500,000 General Obligation Sales Tax Revenue Note of 2008 (the "Note") of the City is to be issued as a tax-exempt obligation, and in addition the City will need to assure the tax-exemption of the PFA Bonds with respect to the Note. I. WHEREAS, in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(4), the City is authorized to issue obligations to a board, department or agency of the State of Minnesota by negotiation and without advertisement for bids and the PFA is, and has represented that it is, a board, department or agency of the State of Minnesota. J. WHEREAS, a contract or contracts for the Project have been or will be made by the City with the approval of the PFA and all other state and federal agencies of which approval is required. NOW, THEREFORE, BE IT RESOLVED by the Common_ Council of the City of Rochester, Minnesota, as follows: l. Acceptance of Offer for Note; Pam. The offer of the PFA to purchase a$2,500,000 General Obligation Sales Tax Revenue Note of 2008 of the City(the "Note"), at the rate of interest hereinafter set forth, and to pay therefor the sum of$2,500,000, as provided below, is hereby accepted, and the sale of the Note is hereby awarded to the PFA. Payment for the Note shall be disbursed in installments as eligible costs of the Project are reimbursed or paid, all as provided in the Project Loan Agreement. 2. Title; Date; Denomination; Interest Rates; Maturities. The Note shall be a fully registered negotiable obligation, shall be titled the "General Obligation Sales Tax Revenue Note of 2008", shall be dated as of the date of delivery and shall be issued forthwith. The Note • shall be in the principal amount of$2,500,000, or so much thereof as shall be disbursed pursuant to the Project Loan Agreement, shall bear interest on so much of the principal amount of the 2252666v1 2 Note as (i)may be disbursed from time to time as provided in the Project Loan Agreement and • (ii)remains unpaid, from the date of the first disbursement until the principal amount of the Note has been paid or has been provided for, at the rate of 3.415%per annum (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Note is payable semiannually on each February 20 and August 20, commencing August 20, 2009. Principal on the Note shall mature on August 20 of the years and in the installments as follows: Year Amount Year Amount 2009 $ 86,000 2019 $125,000 2010 92,000 2020 129,000 2011 95,000 2021 134,000 2012 99,000 2022 138,000 2013 102,000 2023 143,000 2014 106,000 2024 148,000 2015 109,000 2025 153,000 2016 113,000 2026 158,000 2017 117,000 2027 163,000 2018 121,000 2028 169,000 Interest shall accrue only on the aggregate amount of the Note which has been disbursed and is unpaid under the Project Loan Agreement. The principal installments shall be paid in the amounts scheduled above even if at the time of payment the full principal amount of the Note has not been disbursed;provided that if the full principal amount of the Note is never disbursed,the amount of the principal not disbursed shall be applied to reduce each unpaid principal installment of the Note in the proportion that such installment bears to the total of all unpaid principal installments (i.e.,the remaining principal payment schedule shall be reamortized to provide proportionately reduced principal payments). Principal, interest and any premium due under the Note will be paid on each payment date by wire payment, or by check or draft mailed five business days prior to the payment date for receipt on or prior to the payment date,to the person in whose name the Note is registered, in any coin or currency of the United States which at the time of payment is legal tender for public and private debts. Interest on the Note includes amounts treated by the PFA as service fees. 3. Purpose; Cost. The proceeds of the Note shall provide funds to finance construction of the Project. The total cost of the Project is estimated to be at least equal to the amount of the Note. The City covenants that it shall do all things and perform all acts required of it to assure that work on the Project proceeds with due diligence to completion and that any and all permits and studies required under law for the Project are obtained. 4. Redemption. The Note shall be subject to redemption and prepayment in whole, or in part, at the option of the City at the times, under the conditions and with the premiums (if any) and other payments (if any) set forth in the Project Loan Agreement. If redemption is in part,the holder of the Note in its sole discretion shall determine which installments of principal in which amounts shall be prepaid, unless the City and the holder of the Note agree to a different result. 2252666v1 3 • 5. Registration of Note. At the time of issuance and delivery of the Note,the City Finance Director shall register the Note in the name of the payee. The Note shall be prepared for execution with an appropriate text and spaces for notation of registration. The force and effect of such registration shall be as stated in the form of the Note hereinafter set forth. Payment of principal installments and interest, whether upon redemption or otherwise, made with respect to the Note, may be made to the registered holder thereof or to his, her or its legal representative, without presentation or surrender of the Note except upon the final payment thereof. 6. Form of the Note. The Note, together with the Certificate of Registration attached thereto, shall be in substantially the following form: • 2252666v1 4 • UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF OLMSTED CITY OF ROCHESTER $2,500,000 GENERAL OBLIGATION SALES TAX REVENUE NOTE OF 2008 KNOW ALL PERSONS BY THESE PRESENTS that the City of Rochester, Olmsted County, Minnesota(the "City"), certifies that it is indebted and for value received promises to pay to the Minnesota Public Facilities Authority or the registered assign, the principal sum of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS, or so much thereof as may have been disbursed, on August 20 of the years and in the installments as follows: Year Amount Year Amount 2009 $ 86,000 2019 $125,000 2010 92,000 2020 129,000 2011 95,000 2021 134,000 2012 99,000 2022 138,000 2013 102,000 2023 143,000 2014 106,000 2024 148,000 2015 109,000 2025 153,000 2016 113,000 2026 158,000 2017 117,000 2027 163,000 2018 121,000 2028 169,000 and to pay interest on so much of the principal amount of the debt as (i)may be disbursed from time to time as provided in the Project Loan Agreement(as defined below) and (ii)remains unpaid, from the date of the first disbursement until the principal amount hereof is paid or has been provided for, at the rate of three and four hundred fifteen thousandths percent (3.415%)per annum (calculated on the basis of a 360-day year of twelve 30-day months). Interest on this Note is payable semiannually on each February 20 and August 20, commencing August 20, 2009. Principal and Interest Payments. Interest shall accrue only on the aggregate amount of this Note which has been disbursed under the Minnesota Public Facilities Authority General Obligation Bond Purchase and Project Loan Agreement, Transportation Revolving Fund, dated as of October 23, 2008, by and between the City and the Minnesota Public Facilities Authority (the "Project Loan Agreement"). The principal installments shall be paid in the amounts scheduled above even if at the time of payment the full principal amount of this Note has not been disbursed; provided that if the full principal amount of this Note is never disbursed, the amount of the principal not disbursed shall be applied to reduce each unpaid principal installment in the proportion that such installment bears to the total of all unpaid principal • installments of this Note (i.e.,the remaining principal payment schedule of this Note shall be reamortized to provide proportionately reduced principal payments). Interest on this Note 2252666v1 5 • includes amounts treated by the Minnesota Public Facilities Authority as service fees. Principal, interest and any premium due under this Note will be paid on each payment date by wire payment, or by check or draft mailed five business days prior to the payment date for receipt on or prior to the payment date,to the person in whose name this Note is registered, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts, without presentation or surrender hereof except upon final payment. Redemption. This Note is subject to redemption and prepayment in whole, or in part, at the option of the City at the times, under the conditions and with the premiums (if any) and other payments (if any) set forth in the Project Loan Agreement. If redemption is in part, the holder of this Note in its sole discretion shall determine which installments of principal in which amounts shall be prepaid, unless the City and the holder of this Note agree to a different result. Purpose; General Obli ag tion. This Note has been issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota for the purpose of providing money to finance the construction of transportation infrastructure improvements for the City and is payable out of the PFA Debt Service Account of the Sales Tax Revenue Note of 2008 Fund of the City, to which account have been pledged certain sales tax revenues of the City. This Note constitutes a general obligation of the City, and to provide moneys for the prompt and full payment of said principal installments and interest when the same become due, the full faith, credit and taxing powers of the City have been and are hereby irrevocably pledged. Registration; Transfer. This Note shall be registered in the name of the payee on the books of the City by presenting this Note for registration to the City Finance Director, who will endorse his or her name and note the date of registration opposite the name of the payee in the certificate of registration attached hereto. Thereafter this Note may be transferred to a bona fide purchaser only by delivery with an assignment duly executed by the registered owner or his, her or its legal representative, and the City may treat the registered owner as the person exclusively entitled to exercise all the rights and powers of an owner until this Note is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the City Finance Director. Fees Upon Transfer or Loss. The City Finance Director may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer of this Note and any legal or unusual costs regarding transfers and lost notes. Project Loan Agreement. The terms and conditions of the Project Loan Agreement are incorporated herein by reference and made a part hereof. The Project Loan Agreement may be attached to this Note, and shall be attached to this Note if the holder of this Note is any person other than the Minnesota Public Facilities Authority. Tax-Exempt Obligation. The City intends that the interest on this Note will be excluded from gross income for United States income tax purposes and from both gross income and taxable net income for State of Minnesota income tax purposes. • 2252666A 6 • Not Designated as Qualified Tax-Exempt Obligation. This Note has not been designated by the City 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 the Home Rule Charter of the City to be done,to have happened and to be performed precedent to and in the issuance of this Note have been done, have happened and have been performed in regular and due form, time and manner as required by law; and that this Note,together with all other indebtedness of the City outstanding on the date hereof, being the date of its actual issuance and delivery, does not exceed any constitutional, statutory or Charter limitation of indebtedness. IN WITNESS WHEREOF,the City of Rochester, Olmsted County, Minnesota, by its Common Council has caused this Note to be executed on its behalf by the manual signature of its Mayor and attested by the manual signature of its City Clerk,the corporate seal of the City having been intentionally omitted herefrom, as permitted by law, all as of 1y oV. 3 , 2008. CITY OF ROCHESTER, OLMSTED COUNTY, MINNESOTA Mayor ATTEST: —� City Jerk • 2252666vl 7 • CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount of the attached Note may be made only by the registered owner or his, her or its legal representative last noted below. SIGNATURE OF DATE OF CITY FINANCE REGISTRATION REGISTERED OWNER DIRECTOR Minnesota Public Facilities Authority Saint Paul, Minnesota Federal Employee Identification / No. 41-6007162 • 2252666v1 8 • 7. Execution. The Note shall be executed on behalf of the City by the signature of its Mayor and attested by the signature of the City Clerk, and the Note may be sealed with the seal of the City;provided, however, that the seal of the City may be intentionally omitted from the Note, as permitted by law. In the event of disability or resignation or other absence of either such officer, the Note may be signed by the manual signature of that officer who may act on behalf of such absent or disabled officer. In case any such officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. 8. Delivery; Application of Proceeds. The Note when so prepared and executed shall be delivered by the City Finance Director to the purchaser thereof prior to disbursements pursuant to the Project Loan Agreement, and the purchaser shall not be obliged to see to the proper application thereof. 9. Fund and Accounts. There is hereby created a special fund to be designated the "Sales Tax Revenue Note of 2008 Fund" (the "Fund")to be administered and maintained by the City 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 specified herein until the Note has been paid. There shall be maintained in the Fund the following two separate accounts to which shall be credited and debited all income and disbursements of the Fund. In such records there shall be maintained accounts of the Fund for • the purposes and in the amounts as follows: a. A "PFA Capital Account",to which shall be credited all proceeds received from the sale of the Note. The proceeds of the Note and earnings thereon shall be the only sources of moneys credited to the PFA Capital Account. It is recognized that the sale proceeds of the Note are received in reimbursement for costs expended on the Project or in direct payment of such costs, and that accordingly the moneys need not be placed in the PFA Capital Account upon receipt but may be applied immediately to reimburse the source from which the expenditure was made. The moneys in the PFA Capital Account shall be used solely for the purpose of paying for the costs of the Project, including all costs enumerated in Minnesota Statutes, Section 475.65, provided that such moneys shall only be expended for costs and expenses which are permitted under the Project Loan Agreement. Unless the PFA has approved arrangements to the contrary,the PFA prohibits the use of proceeds of the Note to reimburse costs initially paid from proceeds of other obligations of the City. Upon completion of the Project and the payment of the costs thereof, any surplus shall be transferred to the PFA Debt Service Account. b. A "PFA Debt Service Account", to which shall be irrevocably appropriated,pledged and credited: (1) Taxes, as defined in Recital A of this resolution, but only in amounts sufficient from time to time,together with other funds in said Account and available for such purposes, to pay the principal of and interest on the Note, when due; (2) all collections of ad valorem taxes which may hereafter be levied for the • payment of the principal of and interest on the Note; (3) all investment earnings on moneys held in the PFA Debt Service Account; (4) any amounts transferred from the 2252666v1 9 • PFA Capital Account; and(5) any other moneys which are properly available and are appropriated by the Common Council to the PFA Debt Service Account. The moneys in said account shall be used only to pay or prepay the principal of and interest on the Note and on any other general obligation bonds which may hereafter be issued and made payable from said account, and to pay any rebate due to the United States with respect to the Note or the PFA Bonds in connection with the Note. C. No portion of the proceeds of the Note shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except(1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Note was 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 Note or$100,000. To this effect, any proceeds of the Note and any sums from time to time held in the PFA Capital Account or PFA Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the Note) in excess of amounts which under the federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or minor portion made available under the federal arbitrage regulations. 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 Note to • be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). The City shall observe the covenants of paragraphs 16, 17 and 18 of this resolution and of Articles III and VI of the Project Loan Agreement with regard to the Fund. 10. Future Tax Levies. On or before October 10 of each year,the City Finance Director shall determine the amount of Taxes and any other funds appropriated to and then held in the PFA Debt Service Account and the estimated collections of Taxes to be received in the next succeeding year. In the event that it is anticipated that the aggregate of said sums will not be sufficient to pay the principal and interest on the Note to become due in the first calendar year thereafter and the first six (6)months of the succeeding calendar year,the Common Council shall pass a resolution requesting the County Auditor of Olmsted County to levy an ad valorem tax in such amount as is necessary, together with the aforementioned funds then held in the PFA Debt Service Account and said estimated collections of Taxes, to pay the principal and interest on the Note to become due during said period. 11. Coverage Test. It is hereby found, determined and declared that the Taxes are and are reasonably expected to be available in amounts sufficient to pay, when due, 105% of the principal of and interest on the Note. 12. General Obligation Pledge. The full faith, credit and taxing powers of the City shall be, and are hereby, irrevocably pledged for the prompt and full payment of the principal and interest on the Note as the same respectively become due. If the Taxes appropriated and pledged to the payment of principal and interest on the Note, together with 22526660 10 other funds irrevocably appropriated to the PFA Debt Service Account referred to in paragraph 9 of this resolution, 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 they become due. If the balance in the PFA Debt Service Account is ever insufficient to pay all principal and interest then due on the Note and any other obligations payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed, with or without interest, from the PFA Debt Service Account when a sufficient balance is available therein. 13. Certificate of Registration. The City 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 Note has been entered in the County Auditor's Bond Register. 14. Project Loan Agreement. The Project Loan Agreement is hereby approved in substantially the form heretofore presented to the Common Council, and in the form executed is hereby incorporated by reference and made a part of this resolution. Each and all of the provisions of this resolution relating to the Note are intended to be consistent with the provisions of the Project Loan Agreement, and to the extent that any provision in the Project Loan Agreement is in conflict with this resolution as it relates to the Note,that provision shall control and this resolution shall be deemed accordingly modified. The Mayor and City Clerk are • hereby authorized and directed to execute the Project Loan Agreement. The execution of the Project Loan Agreement by the appropriate officers shall be conclusive evidence of the approval of the Project Loan Agreement in accordance with the terms hereof. The Project Loan Agreement may be attached to the Note, and shall be attached to the Note if the holder of the Note is any person other than the PFA. 15. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the PFA, and to the attorneys approving the legality of the issuance of the Note, certified copies of all proceedings and records of the City relating to the Note 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 Note 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. 16. Negative Covenants as to Use of Proceeds and Project. The City hereby covenants not to use the proceeds of the Note or the Project, 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 Note to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Note that would cause it to be a private activity bond, and the average term of the Note is not longer than reasonably necessary for the governmental purpose of the issue. The City hereby covenants not to use the proceeds of the Note in such a manner as to cause the Note to be a "hedge bond" within the meaning of Section 149(g) of the Code. 2252666v1 11 • The City hereby covenants not to use the proceeds of the Note or to use the Project, or to cause or permit them to be used, or to enter into any deferred payment arrangement for the cost of the Project, in such a manner as to cause the PFA Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that it will take no actions over the term of the Note that would cause the PFA Bonds to be private activity bonds, and the average term of the Note is not longer than reasonably necessary for its governmental purpose. 17. Tax-Exempt Status of the Note; Rebate; Elections. 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 Note, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Note, and the rebate of excess investment earnings to the United States. The Note does not qualify for the exception to the federal arbitrage rebate requirements for governmental units issuing$5,000,000 or less of bonds in a calendar year. If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Note in whole or in part, the Mayor and City Finance Director, or either of them, are hereby authorized to make such elections as they deem necessary, appropriate or desirable in connection with the Note, and all such elections shall be, and shall be deemed and treated as, elections of the City. • 18. Tax-Exempt Status of the PFA Bonds; Rebate. The City with respect to the Note 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 PFA 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 PFA Bonds, and (3)the rebate of excess investment earnings to the United States. The City covenants and agrees with the PFA and holders of the Note that the investments of proceeds of the Note, including the investment of any revenues pledged to the Note which are considered gross proceeds of the PFA Bonds under the applicable regulations, and accumulated sinking funds, if any, shall be limited as to amount and yield in such manner that the PFA Bonds shall not be arbitrage bonds within the meaning of Section 148 of the Code and any regulations thereunder. On the basis of the existing facts, estimates and circumstances, including the foregoing findings and covenants,the City hereby certifies that it is not expected that the proceeds of the Note will be used in such manner as to cause the PFA Bonds to be arbitrage bonds under Section 148 of the Code and any regulations thereunder. The City shall furnish a certificate to the PFA embracing or based on the foregoing certification at the time of delivery of the Note to the PFA. The proceeds of the Note will likewise be used in such manner that the Note is not a private activity bond under Section 103(b) of the Code. 19. No Designation of Qualified Tax-Exempt Obligation. The Note is not being designated as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code. 2252666v1 12 • 20. Consent to Representation. The City hereby consents to the representation by Briggs and Morgan, Professional Association, which is acting as the City's bond counsel with respect to the Note, of the PFA with respect to the PFA Bonds and the Note as the PFA's bond counsel pursuant to a special attorney appointment by the Attorney General of the State of Minnesota. 21. 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. 22. 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 COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS P DAY OF NOVEMBER, 2008. PRESIDENT OF SAID COMMON COUNCIL ATTEST: CITY CL RK Approved this 3rd day of November, 2008 MAYOR OF SAID CITY 2252666v1 13