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HomeMy WebLinkAboutResolution No. 114-24 - Resolution - Awarding the Sale of Taxable General Obligation Abatement and CIP Bonds, Series 2024A RESOLUTION Awarding the Sale of $11,400,000 Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A Fixing Their Form and Specifications; Directing Their Execution and Delivery; and Providing for Their Payment. WHEREAS, the City of Rochester, Olmsted County, Minnesota (the “City”) is authorized by Minnesota Statutes, Sections 469.1812 to 469.1815 and Minnesota Statutes, Chapter 475, as amended (collectively, the “Abatement Act”), to issue its general obligation tax abatement bonds on such terms and in such manner as the City determines, subject to certain limitations contained in the Abatement Act; and WHEREAS, on May 20, 2024, the City held a public hearing regarding, and adopted a resolution (the “Abatement Resolution”) approving, property tax abatements in the maximum amount of $4,560,000 (the “Abatements”) on certain property in the City (the “Abatement Parcels”) pursuant to the Act to finance the acquisition, construction and installation of certain improvements to the City’s Mayo Civic Center to, among other things, replace the steam heating and cooling system with a district heating and cooling system (the “Abatement Project”); and WHEREAS, the City is authorized by Minnesota Statutes, Chapter 475, including without limitation, Section 475.521 (collectively the “CIP Act”) to finance certain capital improvements under an approved capital improvement plan by the issuance of general obligation bonds of the City payable from ad valorem taxes. Capital improvements include acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, library, public safety facility and public works facilities (excluding light rail transit or any activity related to it, or a park, road, bridge, administrative building other than a city hall, or land for any of those activities); and WHEREAS, the City held a public hearing on May 6, 2024, regarding a 5-year capital improvement plan for the years 2024 through 2028 (the “Plan”) and regarding issuance of bonds in the maximum principal amount of $8,700,000 to finance planned capital improvements, all in accordance with the CIP Act. The Plan authorizes issuance of bonds to pay the cost of certain capital improvements identified in the capital improvement plan, including without limitation the improvements to the Rochester Public Library and the City Hall to, among other things, replace the steam heating and cooling system with a district heating and cooling system (the “CIP Improvements”); and WHEREAS, the Common Council has determined that, within 30 days after the hearing, no valid petition for a referendum on issuance of bonds to pay costs of the CIP Improvements was received by the City in accordance with the CIP Act; and WHEREAS, as required by the CIP Act, the City has determined that: 1 RC110-156-953523.v3 (a) the expected useful life of the CIP Improvements will be at least 5 years; and (b) the amount of principal and interest due in any year on all outstanding bonds issued by the City under the CIP Act, including the Bonds (as defined below), will not exceed 0.16% of the estimated market value of property in the City for taxes payable in 2024; and WHEREAS, it is necessary and expedient to the sound financial management of the affairs of the City to issue its Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A (the “Bonds”), in the aggregate principal amount of $11,400,000, to provide financing for the Abatement Project and the CIP Improvements; and WHEREAS, 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. NOW, THEREFORE, BE IT RESOLVED By the Common Council of the City of Rochester, Olmsted County, Minnesota (the “Council”) as follows: Section 1. Sale of Bonds. 1.01 Authorization. It is hereby determined that it is necessary to provide financing for the Abatement Project and the CIP Improvements and to finance those improvements through the issuance of the City’s $11,400,000 Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A (the “Bonds”). 1.02. Award to the Purchaser and Interest Rates. The proposal of BOK Financial Securities, Inc., Dallas, Texas (the “Purchaser”) to purchase the Bonds of the City described in the Terms of Proposal thereof, is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $11,419,431.90 (par amount of $11,400,000.00, plus a premium of $32,526.65 less an underwriter’s discount of $13,094.75), for Bonds bearing interest as follows: RC110-156-953523.v3 Year of Interest Year of Interest Maturity Rate Maturity Rate 2026 5.00% 2034* 4.73% 2027 5.00 2036* 4.81 2028 5.00 2038* 4.90 2029 5.00 2040* 5.00 2030 5.00 2042* 5.05 2031 5.00 2044* 5.10 2032 4.69 2045 5.14 1.03. Purchase Contract. 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 accounts in the Construction Fund hereinafter created, as determined by the City Director of Finance after consultation with the City’s municipal advisor. The City Director of Finance is directed to retain the good faith deposit of the Purchaser, pending completion of the sale of the Bonds. The Mayor and City Clerk are authorized 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. The City will forthwith issue and sell the Bonds pursuant to the Abatement Act and the CIP Act (together, the “Act”), in the total principal amount of $11,400,000, originally dated the date of delivery, in fully registered form in denominations of $5,000 each or any integral multiple thereof, numbered No. R- 1 and upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2026 $350,000 2034* $1,000,000 2027 365,000 2036* 1,095,000 2028 385,000 2038* 1,205,000 2029 400,000 2040* 1,325,000 2030 425,000 2042* 1,465,000 2031 440,000 2044* 1,610,000 2032 465,000 2045 870,000 As may be requested by the Purchaser, one or more term Bonds may be issued having mandatory sinking fund redemption and final maturity amounts conforming to the foregoing principal repayment schedule, and corresponding additions may be made to the provisions of the applicable Bond(s). $4,560,000 of the Bonds (the “Abatement Bonds”) maturing in the amounts and on the dates set forth below are being issued to finance the cost of the Abatement Project: RC110-156-953523.v3 Year Amount Year Amount 2026 $140,000 2036 $225,000 2027 145,000 2037 235,000 2028 155,000 2038 245,000 2029 160,000 2039 260,000 2030 170,000 2040 270,000 2031 175,000 2041 285,000 2032 185,000 2042 300,000 2033 195,000 2043 315,000 2034 205,000 2044 330,000 2035 215,000 2045 350,000 $6,840,000 of the Bonds (the “CIP Bonds”) maturing in the amounts and on the dates set forth below are being issued to finance the cost of the construction of the CIP Improvements: Year Amount Year Amount 2026 $210,000 2036 $335,000 2027 220,000 2037 355,000 2028 230,000 2038 370,000 2029 240,000 2039 390,000 2030 255,000 2040 405,000 2031 265,000 2041 430,000 2032 280,000 2042 450,000 2033 295,000 2043 470,000 2034 305,000 2044 495,000 2035 320,000 2045 520,000 1.05. Optional Redemption. The City may elect on February 1, 2034, and on any day thereafter to prepay Bonds maturing on or after February 1, 2035. 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 5 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. 1.06 Mandatory Redemption; Term Bonds. The Bonds maturing on February 1, 2034, 2036, 2038, 2040, 2042 and 2044 shall hereinafter be referred to collectively as the “Term Bonds.” The principal amount of the Term Bonds subject to mandatory sinking fund redemption on any date may be reduced through earlier optional redemptions, with any partial redemptions of the Term Bonds credited against future mandatory sinking fund redemptions of such Term Bond in such order as the City shall determine. The Term Bonds RC110-156-953523.v3 are subject to mandatory sinking fund redemption and shall be redeemed in part at par plus accrued interest on February 1 of the following years and in the principal amounts as follows: Sinking Fund Installment Date February 1, 2034 Term Bond Principal Amount 2033 $490,000 2034* 510,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2036 Term Bond Principal Amount 2035 $535,000 2036* 560,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2038 Term Bond Principal Amount 2037 $590,000 2038* 615,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2040 Term Bond Principal Amount 2039 $650,000 2040* 675,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2042 Term Bond Principal Amount 2041 $715,000 2042* 750,000 ____________________ * Maturity RC110-156-953523.v3 Sinking Fund Installment Date February 1, 2044 Term Bond Principal Amount 2043 $785,000 2044* 825,000 ____________________ * Maturity 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, 2025, to the registered owners th thereof of record as of the close of business on the 15 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 th books for registration of any transfer after the 15 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 RC110-156-953523.v3 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 such 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 time registered, as of the applicable record date, 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, in an amount 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, 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 RC110-156-953523.v3 (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 and the City Clerk are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and 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 Director of Finance 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 and executed on behalf of the City by the signatures of the Mayor and the City Clerk, 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 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 B attached hereto. RC110-156-953523.v3 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 Kennedy & Graven, Chartered, 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. Accounts; Payment; Security; Pledges and Covenants. 3.01. Debt Service Fund and Accounts Maintained Therein. 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 “Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A Debt Service Fund (the “Debt Service Fund”). The Debt Service Fund shall be administered and maintained by the 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. The City will maintain the following accounts in the Debt Service Fund: the “Abatement Project Account” and the “CIP Account.” Amounts in the Abatement Project Account are irrevocably pledged to the Abatement Bonds, amounts in the CIP Account are irrevocably pledged to the CIP Bonds. (a) Abatement Project Account. To the Abatement Project Account in the Debt Service Fund there is hereby pledged and irrevocably appropriated and there will be credited: (i) proceeds of the ad valorem property taxes levied under Section 3.03(a) or hereafter levied the Abatement Bonds (the “Abatement Taxes”) and the Abatements; (ii) capitalized interest financed from Abatement Bond proceeds, if any; (iii) a pro rata portion of the amount over the minimum purchase price paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof; (iv) all investment earnings on amounts in the Abatement Project Account of the Debt Service Fund; and (v) any other funds appropriated for the payment of principal or interest on the Abatement Bonds. The Director of Finance must report to the Common Council any current or anticipated deficiency in the Abatement Project Account in the amount necessary to pay principal of and interest on all of the Abatement Bonds when due. If a payment of principal or interest on the Improvement Bonds becomes due when there is not sufficient money in the Abatement Project Account 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 proceeds of Abatement Taxes and Abatements when collected. (b) CIP Account. The Director of Finance shall timely deposit in, and there are pledged and appropriated to, the CIP Account of the Debt Service Fund hereby created, (i) proceeds of ad valorem property taxes levied under Section 3.03(b) or hereafter levied for the CIP Bonds (the “Improvement Taxes” and, together with the Abatement Taxes, the “Taxes”) for the CIP Improvements, (ii) a pro rata portion of any amount over the minimum purchase price paid by the Purchaser, to the extent RC110-156-953523.v3 designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof, (iii) all investment earnings on funds in the CIP Account of the Debt Service Fund; and (iv) any and all other moneys which are properly available and are appropriated by the Common Council to the CIP Account of the Debt Service Fund. The Director of Finance must report to the Common Council any current or anticipated deficiency in the CIP Account in the amount necessary to pay principal of and interest on all of the CIP Bonds when due. If a payment of principal or interest on the CIP Bonds becomes due when there is not sufficient money in the CIP Account 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 proceeds of Improvement Taxes when collected. 3.02. Construction Fund. The City hereby creates the Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A Construction Fund (the “Construction Fund”) to be administered and maintained by the Director of Finance as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The City will maintain the following accounts in the Construction Fund: the “Abatement Project Account” and the “CIP Account.” Amounts in the Abatement Project Account will be used to construct the Abatement Project and amounts in the CIP Account will be used to construct the CIP Improvements. (a) Abatement Project Account. Proceeds of the Abatement Bonds, less the appropriations made in Section 3.01(a) hereof, together with the Abatements and Abatement Taxes collected during the construction of the Abatement Project and any other funds appropriated for the Abatement Project, will be deposited in the Abatement Project Account of the Construction Fund to be used solely to defray expenses of the Abatement Project and the payment of principal of and interest on the Abatement Bonds prior to the completion and payment of all costs of the Abatement Project. Any balance remaining in the Abatement Project Account after the Abatement Project is completed and the costs thereof have been paid may be used as provided in Minnesota Statutes, section 475.65, under the direction of the Common Council. Thereafter, the Abatement Project Account of the Construction Fund is to be closed and any balance remaining therein and any subsequent collections of the Abatements and Taxes for the Abatement Project are to be deposited in the Abatement Project Account of the Debt Service Fund. (b) CIP Account. Proceeds of the CIP Bonds, less the appropriations made in Section 3.01(b) hereof, together with any other funds appropriated for the CIP Improvements, will be deposited in the CIP Account of the Construction Fund to be used solely to defray expenses of the CIP Improvements and the payment of principal of and interest on the CIP Bonds prior to the completion and payment of all costs of the CIP Improvements. Any balance remaining in the CIP Account after the CIP Improvements are completed and the costs thereof have been paid may be used as provided in Minnesota Statutes, section 475.65, under the direction of the Common Council. Thereafter, the CIP Account is to be closed and RC110-156-953523.v3 any balance remaining therein is to be deposited in the CIP Account of the Debt Service Fund. 3.03. Tax Levy. (a) For the purpose of paying the principal of and interest on the Abatement Bonds, there is hereby levied a direct annual irrepealable ad valorem property tax upon all of the taxable property in the City, which Abatement Taxes will be spread upon the tax rolls and collected with and as part of other general taxes of the City. Such Abatement Taxes will be credited to the Abatement Project Account of the Debt Service Fund above provided and will be in the years and amounts as set forth in Exhibit C. The tax levy herein provided will be irrepealable until all of the Abatement Bonds are paid, provided that the Director of Finance may annually, at the time the City makes its tax levies, certify to the County Auditor of the County the amount available in the Abatement Account of the Debt Service Fund to pay principal and interest due during the ensuing year on the Abatement Bonds, and the County Auditor of the County will thereupon reduce the levy collectible during such year by the amount so certified. (b) For the purpose of paying the principal of and interest on the CIP Bonds, there is hereby levied a direct annual irrepealable ad valorem property tax upon all of the taxable property in the City, which Improvement Taxes will be spread upon the tax rolls and collected with and as part of other general taxes of the City. Such Improvement Taxes will be credited to the CIP Account of the Debt Service Fund above provided and will be in the years and amounts as set forth in Exhibit D. The tax levy herein provided will be irrepealable until all of the CIP Bonds are paid, provided that the Director of Finance may annually, at the time the City makes its tax levies, certify to the County Auditor of the County the amount available in the CIP Account of the Debt Service Fund to pay principal and interest due during the ensuing year on the CIP Bonds, and the County Auditor of the County will thereupon reduce the levy collectible during such year by the amount so certified in the manner and to the extent permitted by Section 475.61, subdivision 3 of the Act. 3.04. Registration of Resolution. The Director of Finance is authorized and directed to file a certified copy of this resolution with the County Auditor of Olmsted County and to obtain the certificate required by Minnesota Statutes Section 475.63. 3.05. Debt Service Coverage. It is hereby determined that the estimated collection of the foregoing Abatement Taxes and Abatements will produce at least 5% in excess of the amount needed to pay, when due, the principal and interest payments on the Abatement Bonds and the estimated collection of the foregoing Improvement Taxes will produce at least 5% in excess of the amount needed to pay, when due, the principal and interest payments on the CIP Bonds. 3.06. 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 RC110-156-953523.v3 taxing powers of the City will be and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient balance is available therein. 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, City Administrator, City Clerk and City Director of Finance, or any of them, are hereby 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, as of the date thereof, is 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 and the Bonds. 4.03. Other Certificates. The Mayor, City Administrator, City Clerk 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, City Administrator, City Clerk 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 Director of Finance shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 4.04. Electronic Signatures. The electronic signature of the Mayor, City Administrator, City Clerk, and Director of Finance 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. RC110-156-953523.v3 Section 5. Book-Entry System; Limited Obligation of City. 5.01. 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 Section 1.04 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (DTC). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 5.02. 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 Bonds, 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. 5.03. 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. RC110-156-953523.v3 5.04. 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. 5.05. 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 all 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 6. Continuing Disclosure. 6.01. 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. 6.02. Execution of Continuing Disclosure Certificate. “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate executed by the Mayor and City Clerk and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 7. Defeasance. When all Bonds (or all of any of the Abatement Bonds or CIP Bonds portion thereof) and all accrued interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution (with respect to the Abatement Bonds or CIP Bonds portion of the Bonds, as the case may be) to holders of the 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 (or all of either the Abatement Bonds or CIP Bonds portion thereof) which are due on any date by RC110-156-953523.v3 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. Section 8. Effective Date. This resolution shall be in full force and effect from and after its passage. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2024. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2024. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) RC110-156-953523.v3 EXHIBIT A PROPOSALS A-1 RC110-156-953523.v3 A-2 RC110-156-953523.v3 EXHIBIT B FORM OF BOND No. R-_____ UNITED STATES OF AMERICA $__________ STATE OF MINNESOTA COUNTY OF OLMSTED CITY OF ROCHESTER TAXABLE GENERAL OBLIGATION ABATEMENT AND CAPITAL IMPROVEMENT PLAN BOND SERIES 2024A Date of Interest Rate Maturity Date Original Issue CUSIP % February 1, 20____ July 17, 2024 771588 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 Interest 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, 2025, 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. This Bond is one of an issue in the aggregate principal amount of $11,400,000, all of like original issue date and tenor, except as to number, maturity date, denomination, redemption privilege, and interest rate, all issued pursuant to a resolution adopted by the Common Council on June 17, 2024 (the “Resolution”), for the purpose of providing monies in part for improvements related to the City’s Mayo Civic Center, City Library, and City Hall to replace the steam heating and cooling system with a district heating and cooling system and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.1812 to 469.1815 and 475.521 and Minnesota Statutes, Chapter 475. The principal hereof and interest hereon RC110-156-953523.v3 B-1 are payable from certain property tax abatements and from ad valorem taxes levied on all taxable property in the City, all 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 additional ad valorem taxes on all taxable property in the City in the event of any deficiency in tax abatements and ad valorem taxes pledged, 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 City may elect on February 1, 2034, and on any date thereafter to prepay Bonds maturing on or after February 1, 2035. 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. The Bonds maturing on February 1, 2034, 2036, 2038, 2040, 2042 and 2044 shall hereinafter be referred to collectively as the “Term Bonds.” The principal amount of the Term Bonds subject to mandatory sinking fund redemption on any date may be reduced through earlier optional redemptions, with any partial redemptions of the Term Bonds credited against future mandatory sinking fund redemptions of such Term Bond in such order as the City shall determine. The Term Bonds are subject to mandatory sinking fund redemption and shall be redeemed in part at par plus accrued interest on February 1 of the following years and in the principal amounts as follows: Sinking Fund Installment Date February 1, 2034 Term Bond Principal Amount 2033 $490,000 2034* 510,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2036 Term Bond Principal Amount 2035 $535,000 2036* 560,000 ____________________ * Maturity RC110-156-953523.v3 B-2 Sinking Fund Installment Date February 1, 2038 Term Bond Principal Amount 2037 $590,000 2038* 615,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2040 Term Bond Principal Amount 2039 $650,000 2040* 675,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2042 Term Bond Principal Amount 2041 $715,000 2042* 750,000 ____________________ * Maturity Sinking Fund Installment Date February 1, 2044 Term Bond Principal Amount 2043 $785,000 2044* 825,000 ____________________ * Maturity 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 RC110-156-953523.v3 B-3 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 AND RECITED that all acts, conditions and things required by its home rule charter, the Constitution and laws of the State of Minnesota to be done, 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, have happened and have been performed in regular and due form, time and manner, that prior to the issuance of this bond the Common Council of the City has provided funds for the payment of principal and interest on the bonds of this issue as the same become due, but the full faith and credit of the City is pledged for their payment and additional taxes will be levied, if required for such purpose, without limitation as to the rate of amount; and that this bond, together with all other indebtedness of the City outstanding on the date of its issuance, does not exceed any constitutional, statutory or charter limitation thereon. 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 and City Clerk and has caused this Bond to be dated as of the date set forth below. Dated: July 17, 2024 CITY OF ROCHESTER, MINNESOTA City Clerk Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. RC110-156-953523.v3 B-4 U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION ST. PAUL, MINNESOTA By Authorized Representative ________________________ The following abbreviations, when used in the inscription of 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 UNIF GIFT MINN ACT _____ Custodian _______ in common (Cust) (Minor) TEN ENT – as tenants under Uniform Gift or Transfer to by entireties Minors JT TEN – as joint tenants with right of Act…………………….. survivorship and (State) 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 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: RC110-156-953523.v3 B-5 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. Signature of Date of Registered Owner Registrar Registration Cede & Co. July 17, 2024 Federal ID #13-2555119 RC110-156-953523.v3 B-6 Post-Sale Tax Levies Pyament 105% Abatement Levy/Collection DatePrincipalCouponInterestTotal P+IOverlevyRevenueLevy AmountYear 02/01/2025--122,035.70122,035.70128,137.49-128,137.492023/2024 02/01/2026140,000.005.000%226,458.00366,458.00384,780.90228,000.00156,780.902024/2025 02/01/2027145,000.005.000%219,458.00364,458.00382,680.90228,000.00154,680.902025/2026 02/01/2028155,000.005.000%212,208.00367,208.00385,568.40228,000.00157,568.402026/2027 02/01/2029160,000.005.000%204,458.00364,458.00382,680.90228,000.00154,680.902027/2028 02/01/2030170,000.005.000%196,458.00366,458.00384,780.90228,000.00156,780.902028/2029 02/01/2031175,000.005.000%187,958.00362,958.00381,105.90228,000.00153,105.902029/2030 02/01/2032185,000.004.690%179,208.00364,208.00382,418.40228,000.00154,418.402030/2031 02/01/2033195,000.004.730%170,531.50365,531.50383,808.08228,000.00155,808.082031/2032 02/01/2034205,000.004.730%161,308.00366,308.00384,623.40228,000.00156,623.402032/2033 02/01/2035215,000.004.810%151,611.50366,611.50384,942.08228,000.00156,942.082033/2034 02/01/2036225,000.004.810%141,270.00366,270.00384,583.50228,000.00156,583.502034/2035 02/01/2037235,000.004.900%130,447.50365,447.50383,719.88228,000.00155,719.882035/2036 02/01/2038245,000.004.900%118,932.50363,932.50382,129.13228,000.00154,129.132036/2037 02/01/2039260,000.005.000%106,927.50366,927.50385,273.88228,000.00157,273.882037/2038 02/01/2040270,000.005.000%93,927.50363,927.50382,123.88228,000.00154,123.882038/2039 02/01/2041285,000.005.050%80,427.50365,427.50383,698.88228,000.00155,698.882039/2040 02/01/2042300,000.005.050%66,035.00366,035.00384,336.75228,000.00156,336.752040/2041 02/01/2043315,000.005.100%50,885.00365,885.00384,179.25228,000.00156,179.252041/2042 02/01/2044330,000.005.100%34,820.00364,820.00383,061.00228,000.00155,061.002042/2043 EXHIBIT C 02/01/2045350,000.005.140%17,990.00367,990.00386,389.50228,000.00158,389.502043/2044 Total$4,560,000.00-$2,873,355.20$7,433,355.20$7,805,022.96$4,560,000.00$3,245,022.96- ABATEMENT BONDS TAX LEVY RC110-156-953523.v3 C-1 Post-Sale Tax Levies Pyament Levy/Collection DatePrincipalCouponInterestTotal P+I105% OverlevyLevy AmountYear 02/01/2025--183,047.35183,047.35192,199.72192,199.722023/2024 02/01/2026210,000.005.000%339,675.50549,675.50577,159.28577,159.282024/2025 02/01/2027220,000.005.000%329,175.50549,175.50576,634.28576,634.282025/2026 02/01/2028230,000.005.000%318,175.50548,175.50575,584.28575,584.282026/2027 02/01/2029240,000.005.000%306,675.50546,675.50574,009.28574,009.282027/2028 02/01/2030255,000.005.000%294,675.50549,675.50577,159.28577,159.282028/2029 02/01/2031265,000.005.000%281,925.50546,925.50574,271.78574,271.782029/2030 02/01/2032280,000.004.690%268,675.50548,675.50576,109.28576,109.282030/2031 02/01/2033295,000.004.730%255,543.50550,543.50578,070.68578,070.682031/2032 02/01/2034305,000.004.730%241,590.00546,590.00573,919.50573,919.502032/2033 02/01/2035320,000.004.810%227,163.50547,163.50574,521.68574,521.682033/2034 02/01/2036335,000.004.810%211,771.50546,771.50574,110.08574,110.082034/2035 02/01/2037355,000.004.900%195,658.00550,658.00578,190.90578,190.902035/2036 02/01/2038370,000.004.900%178,263.00548,263.00575,676.15575,676.152036/2037 02/01/2039390,000.005.000%160,133.00550,133.00577,639.65577,639.652037/2038 02/01/2040405,000.005.000%140,633.00545,633.00572,914.65572,914.652038/2039 02/01/2041430,000.005.050%120,383.00550,383.00577,902.15577,902.152039/2040 02/01/2042450,000.005.050%98,668.00548,668.00576,101.40576,101.402040/2041 02/01/2043470,000.005.100%75,943.00545,943.00573,240.15573,240.152041/2042 02/01/2044495,000.005.100%51,973.00546,973.00574,321.65574,321.652042/2043 EXHIBIT D 02/01/2045520,000.005.140%26,728.00546,728.00574,064.40574,064.402043/2044 Total$6,840,000.00-$4,306,476.35$11,146,476.35$11,703,800.17$11,703,800.17- CIP BONDS TAX LEVY RC110-156-953523.v3 D-1 STATE OF MINNESOTA COUNTY AUDITOR-TREASURER’S CERTIFICATE AS TO COUNTY OF OLMSTED TAX LEVY AND REGISTRATION I, the undersigned County Auditor of Olmsted County, Minnesota, hereby certify that a certified copy of a resolution adopted by the governing body of the City of Rochester, Minnesota, on June 17, 2024, levying taxes for the payment of $11,400,000 Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A, of said municipality dated July 17, 2024 has been filed in my office and said bonds have been entered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand this _____ day of _______, 2024. County Auditor-Treasurer Olmsted County, Minnesota Deputy RC110-156-953523.v3