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HomeMy WebLinkAbout$6.3 Million Facility Page 1 of 1 • Eric Johnson e << From: Judy Hoist Sent: Thursday, June 19, 2008 3:57 PM To: Eric Johnson Subject: GO Capital Improvement Bonds of 2008 Eric, The proceeds for the GO Capital improvement Bonds of 2008 were received today. The amount was $6,197,529.45. The funds were invested as follows: $5,925,242.03 Federal National Mtg Assn 3.25% due 2/15/09 -Face value of $5,900,000. $66,052.22 Accrued Interest and Service Charge due on FNMA $5,991,294.25 Total Purchase with Northland Securities $206,235.20 Purchased 4M Funds to be used for expenses between now and 2/15/09 • $6,197,529.45 Total Bonds Proceeds Interest pays semi - annually on August 15 and February 15. We will receive interest on August 15 for the period February 16, 2008 through August 15, 2008, approximately $95,875.00. Attached is the confirmation for the purchase of Federal National Mortgage Association interest rate of 3.25% due 2/15/09, yield of 2.584% to maturity. Let me know if you need additional information. Judy • 6/20/2008 • Northland Trust Services, Inc 45 South 7th street, Suite 2500 Minneapolis, MN 55402 (612)851 -4931 Phone (612)851 -4933 Fax • CITY OF OAK PARK HEIGHTS, MINNESOTA Invoice: 917 ATTN: ADMINISTRATOR 06/19/08 tflp P 0 BOX 2007 OAK PARK HEIGHTS MN 55082 -3007 OAKPRKO8A Issuer: CITY OF OAK PARK HEIGHTS, MINNESOTA b,,c $6,300,000 GENERAL OBLIGATION CAPITAL G -#- IMPROVEMENT PLAN BONDS, SERIES 2008A CALL DATE: 12/15/2016 '' (DV Billing Period: 06/19/08 - 12/15/16 BALANCE CARRIED FORWARD: $ 0.00 PREVIOUS AMOUNT BILLED: $ 0.00 AMOUNT RECEIVED: $ 0.00 AMOUNT PAID FOR THIS BILL: $ 4,650.00 OTHER FEES AND EXPENSES: ORIGINAL ISSUANCE OF BONDS 25.00 PREPAID PAYING AGENT FEE TO CALL DATE 4,325.00 - TOTAL DUE $ 0.'4 PA I D -- /f -/ Please make check payable to Northland Trust Services, Inc. Thank you tor your business • NORTHLAND TRUST SERVICES • June 19, 2008 Eric Johnson, Administrator City of Oak Park Heights City Hall P 0 2007 Oak Park Heights, MN 55082 -3007 RE: City of Oak Park Heights, Minnesota $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2008A Dated: June 15, 2008 Closed: June 19, 2008 Dear Eric: Thank you for choosing Northland Trust Services, Inc. for the Paying Agent and Registrar activities associated with the above - mentioned bond issue. I am very pleased to provide this value added service to an already very important Northland customer. Since my background is in the banking industry with expertise in securities processing, I can provide you with a `full service' commitment related to this bond issuance. Enclosed is an invoice for the paying agent and transfer agent activities based on the information that was received from your Northland Securities representative, Steve Mattson at closing. The enclosed invoice is prepaid through the call date of 12 -15 -2016. Thereafter, annual fees will apply. Additionally, I have enclosed two copies of the Paying Agent Services Agreement for your signature. Please return one copy and retain one copy for the City's records. Please feel free to contact me at 612 -851 -4932, if you need additional infoinlation or if you have questions. Thanks again! Sincerely, Northland Trust Services, Inc. Lori A. Giampaolo Chief Operating Officer, Cashier • Northland Trust Services, Inc. 45 South 7th Street, Suite 2500, Minneapolis, MN 55402 Toll Free 1- 800 - 851 -2920 Main 612 - 851 -4931 Fax 612- 851 -4933 NORTHLAND TRUST SERVICES TRUST SERVICES AGREEMENT RELATING TO PAYING AGENT, REGISTRAR AND TRANSFER AGENT SERVICES This Agreement is entered into the date hereof between Northland Trust Services, Inc., Minneapolis, Minnesota, (the "Agent ") and the City of Oak Park Heights, Minnesota ( "the Issuer "). WITNESSETH that the Issuer has by Resolution, adopted on May 27, 2008 authorized the issuance of $6,300,000 General Obligation Capital Improvement Bonds, Series 2008A(the "Bonds "); and the Issuer has designated the Agent as the paying agent, registrar and transfer agent for the Bonds. NOW THEREFORE, the Issuer and the Agent each in consideration of the representations and agreements of the other as set forth herein, mutually represent and p g Y p agree to the following: Section 1. Agent's Duties: • 1.1 Registrar Function. The Agent shall maintain records of the identity of the owners of the Bonds in order to carry out its function as Registrar. In such capacity the Agent is authorized at any time to register for original issuance certificates representing the Bonds and not exceeding the total principal amount of the Bonds ( "certificates ") and upon surrender for cancellation of certificates to register new certificates for the principal amount of Bonds represented by the certificates so cancelled and to redeliver such new certificates. 1.2 Transfer Agent Function. For the purpose of the original issuance of certificates the Agent is hereby directed to record and authenticate certificates signed by or bearing the facsimile signatures of the officers of the Issuer authorized to sign certificates in such names and in such amounts as the Issuer may direct. The Agent shall make transfers from time to time upon the records of the Issuer of any outstanding certificates and of certificates issued in exchange therefore signed by the officers of the Issuer upon surrender thereof for transfer properly endorsed and upon reasonable assurance that such endorsements are genuine and effective. Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require to be guaranteed by certain eligible guarantor institutions that participate in the recognized signature guarantee program. • 1 • Upon request for cancellation of such certificate, the Agent shall record and authenticate new certificates duly signed and deliver such certificates to or upon the order of the person entitled thereto. 1.3 Signature of Officers. Certified specimen signatures of the officers of the certified specimen certificates in the form duly approved b Issuer and certi p y pp by the Issuer shall be lodged with the Agent and upon request of the Agent the Issuer will deliver to the Agent a sufficient supply of certificates in the form approved. In case any of the officers of the Issuer whose manual or facsimile signature appears on any certificate, Bond or other record delivered to the Agent, shall cease to be such officer prior to the registration, processing, or transfer thereof, the Agent may nevertheless process such documents as though the person signing the same or whose facsimile signature appears thereon had not ceased to be such officer unless written instruction of the Issuer to the contrary is received. 1.4 Record Date. For purposes of determining the registered owners of the Bonds the record date shall be deemed to be the fifteenth day of the month preceding the date on which payment of principal, premium, if any, or interest is payable to the registered owners of the Bonds ( "Payment Date ") whether such payment is due to optional redemption, operation of a sinking fund, or any other reason. 1.5 Exchange of Bonds. Whenever any Bonds are surrendered to the Agent for • exchange the Agent shall authenticate and deliver the Bonds which, under the authorizing resolution, the owner making the exchange is entitled to receive. 1.6 Improper or Unauthorized Transfer. When any Bond is presented to the Agent for transfer, the Agent may refuse to transfer the same until it is satisfied that the endorsement on such Certificate or written instrument of transfer is valid and genuine and the requested transfer is legally authorized. The Agent shall incur no liability for the refusal, in good faith, to make transfers, which it, in its judgment, deems improper or unauthorized. 1.7 Reliance Upon Certain Certifications and Representations. The Agent may rely conclusively and act, without further investigation, upon any list, instruction, certification, authorization, certificate, or other instrument or paper suitably guaranteed and believed by it in good faith and due diligence in performing its functions to be genuine and to have been signed, countersigned, or executed by a duly authorized person or persons or upon the instruction of any authorized officer of the Issuer or upon the advise of the Issuer's counsel; and may register any certificate representing the Bonds or may refuse to register any such certificate if in good faith the Agent deems such refusal necessary in order to avoid any liability on the part of either the Issuer or the Agent, and the Issuer agrees to indemnify and hold harmless the Agent from and against any and all losses, costs, claims, and liability for so relying or acting or refusing g Y Y Y to act. ii 2 • 1.8 Three Day Turnaround. The Agent agrees that it will turnaround within three business days of receipt all items received in proper form for transfer, process or other action pursuant to the terms of this Agreement. 1.9 Destruction of Cancelled Bonds. The Agent will promptly cancel and destroy certificates representing the Bonds which have been spoiled, surrendered to it for transfer, or with respect to which principal, premium, if any, and interest owing on such Bonds has been paid. 1.10 Taxes, Fees, and Charges. For any transfer or exchange of Bonds the Agent may impose upon the owner thereof a charge sufficient to pay or reimburse the Agent for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. 1.11 Mutilated, Lost, Stolen, or Destroyed Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Agent shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Agent in connection therewith; and in the case of a Bond destroyed, g g Y stolen or lost, upon filing by the owner with the Agent of evidence satisfactory to it that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon • furnishing to the Agent of an appropriate bond of indemnity in form, substance and amount as may be required by law and as is satisfactory to the Agent, in which bond the Issuer and the Agent shall be named as obligees. All Bonds so surrendered to the Agent shall be cancelled by it and evidence of such cancellation shall be given to the Issuer. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment, provided that the owner shall first provide the Agent with a bond of indemnity as set forth above. 1.12 Paying Agent Function. The Agent shall (a) keep true and accurate accounts of the outstanding principal balance of the Bonds; (b) not less than thirty (30) days before the due date of any principal or interest payment on the Bonds, send a statement to the Issuer of the amount which will be required to pay the principal, premium, if any, or interest on the Bonds on such date; (c) pay such interest on the Bonds as is due on each stated payment date, with the funds received from the Issuer, by check, ACH, or wire issued no later than the interest payment date, to the registered owners of the Bonds as of the close of business on the 15 day (whether or not a business day) of the preceding month. • 3 • (d) pay such principal and premium, if any, of the Bonds as is due on the stated payment dates, with the funds received from the Issuer, upon presentation of the Bonds for payment; (e) upon presentation and payment of the bonds, cancel the same and retain and dispose of the same manner set forth in Section 1.9 hereof; (f) In any case where the date of maturity of interest or principal of the Bond or the date fixed for redemption of any Bonds shall be a Sunday or a legal holiday or a day on which banking and trust institutions are authorized by law to close, then payment of interest or principal may be made on the succeeding business day with the same force and effect as if made on the date of maturity or the day fixed for redemption, provided that funds have been received from the Issuer in accordance with Section 2 hereof; 1.13 No Interest to be Paid on Funds. The Agent shall not be required to pay interest on any funds of the Issuer for any period during which funds are held by the Agent awaiting the presentation of Bonds for payment or the disbursement of interest on payment date. The Agent will have no obligation to invest any funds in its possession on behalf of the Issuer. 1.14 Payment of Unclaimed Amounts. In the event any payment representing payment of interest or principal on the Bonds is returned to the Agent or is not • presented for payment or if any Bond is not presented for payment of principal or premium at the maturity or redemption date, if funds sufficient to pay such interest or principal shall have been made available to the Agent for the benefit of the owner thereof, all liability of the Issuer to the owner thereof for such interest or principal payment of such Bonds shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Agent to hold such funds, without liability for interest thereon, for the benefit of the owner of such Bonds who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on this part under the Resolution or on, or with respect to, such interest or principal. The Agent's obligation to hold such funds shall continue for a period equal to three years following the date on which date such interest or principal became due, whether at maturity or at the date fixed for redemption thereof, at which time the Agent shall surrender any remaining funds so held to the Issuer, whereupon any claim under the Resolution by the owners of Bonds of whatever nature shall be made upon the Issuer. Section 2. Issuer's Function. 2.1 Provision of the Executed Bonds. The Issuer shall provide the Agent with such executed Bonds as are required to issue the Bonds in exchange for or upon transfer of outstanding Bonds. • 4 • 2.2 Provision of Funds to pay Principal and Interest. The Issuer may pay the Agent for the interest and principal due by check; however, the check must be received by the Agent for deposit no later than three business days before the debt service payment date in order for the bondholder payments to be released on the payment date. Check payments received from the Issuer after the deadline will result in bondholder payments being released after a three - business day clearance. If the Issuer pays by wire, the wire must be received at least one (1) business day prior to the debt service payment date. If the Issuer is a School District and the Bonds were issued under the Minnesota Credit Enhancement Program, funds must be received three (3) business days prior to payment date in compliance with the program provisions. 2.3 Failure to Provide Funds. If available funds needed for payment do not reach the Agent by any interest payment date, payment of items may be refused and the Issuer may be charged for reasonable expenses incurred and extra service performed in accordance with the Agent's schedule in effect at the time of the payment date. If the Issuer is a School District, the Agent will notify the State of non - payment pursuant to Minnesota State Statute 126C.55, and disburse funds when they are made available. • If the bond issue was insured at its original issuance, then Agent will notify the appropriate insurance company of non - payment, and disburse funds when they are made available. 2.4 Compensation of the Agent. The Issuer will pay the Agent reasonable compensation for its services performed hereunder in accordance with the Registrar's fee schedule in effect at the time of the service. The Agent's compensation may include the amount of any attorney fees incurred by it under Section 3.3 hereof. All fees are non - refundable. The fees and charges of said Agent shall in no event become a charge against the funds remitted by the Issuer for payment of principal and interest on the Bonds. Section 3. General Provisions. 3.1 Delivery of Records to Issuer Retention. The Agent may, from time to time at its discretion, deliver to the Issuer, for safekeeping or disposition by the Issuer in accordance with law, such records accumulated in the performance of its duties as it may deem expedient, and the Issuer assumes all responsibility for any failure thereafter to produce any paper, record or document so returned, if and when required. • 5 3.2 Call Processing. When the Agent shall receive notice from the Issuer of its option to redeem Bonds prior to maturity, the Agent shall select the Bonds to be redeemed and give notice of the redemption thereof, all in accordance with the terms of the Bonds and the Resolution. The Agent shall be compensated for these services at the fee schedule in effect at the time of service. 3.3 Bond Counsel. When the Agent deems it necessary or reasonable it may apply to Bond Counsel for the Issuer or such other law firm or attorney approved by the Issuer for instructions or advice 3.4 Termination. Either party may terminate this agreement by written notice mailed to the other party at least ninety (90) days prior to termination date, upon which event the Agent shall return all cash and Bonds in its possession to the Issuer or its order and shall deliver the Bond Register to the Issuer or its order, and the Issuer shall p a Y $350.00 for this service along with any accrued or unpaid service charges to the Agent. 3.5 Obligations, Rights and Privileges of the Agent. The Agent shall have, with regard to the particular functions it performs, the same obligation to the owner or owners of the Bonds and shall have the same rights and privileges the Issuer has in regard to those functions. 3.6 Indemnification. The Issuer shall indemnify and save the Agent harmless from and against any loss, cost, charge, expense, judgment or liability which it may incur in the exercise of its powers and duties hereunder and which are not due to its negligence or default. • 6 • Dated: June 19, 2008 ISSU ' e' j, By v Its 1 c + -r p m I vvr5 T FtP (SEAL) NORTHLAND TRUST SERVICES, INC. �J ' 0 By f - Ct`4 - 6 Its Chief Operating Officer, Casiir (SEAL) • • 7 NORTHLAND 100 SECURITIES • June 4, 2008 Eric Johnson, Administrator CITY OF OAK PARK HEIGHTS City Hall PO Box 2007 Oak Park Heights, Minnesota 55082 -3007 RE: City of Oak Park Heights, Minnesota $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2008A Closing June 19, 2008 Dear Eric, In direct relation to the above - referenced bond issue, I am enclosing the following documents for your handling: 1. One copy of the Bond Resolution adopted May 27` Please retain the resolution for the City's records. - • 2. One copy of the Nonarbitrage Certificate and four cop+l'e of page 5. Please have the designated City Officials sign and return all copies. JJ 3. Five copies of the Finance Director's Receipt. Please nave all copies signed and returned. d 4. One copy of the Signature and Nonlitigation Certificate and four copies of page 2. Please have the designated City Officials sign and return all copies. 5. One copy of the Continuing Disclosure Undertaking and four copies of page 5. Please have the designated City Officials sign and return all copies. 6. Six copies of the IRS form 8038 -G. Please have the designated City Officials sign and return all copies. Please return these documents as soon as possible. Please return all documents to my attention at Northland Securities, Inc., 45 South 7th Street, Suite 2500, Minneapolis, Minnesota 55402. If you should have any questions or comments, please do not hesitate to call. Very Truly Yours, NORTHLAND SECURITIES, INC. ( ----'-,. f Punnavy Koy � 0 PK/pk Fiscal Administrator Enclosures Northland Securities, Inc. 45 South 7th Street, Suite 2500, Minneapolis, MN 55402 Ton Free 1-800-851-2920 Mar 612 - 851 -5900 Fax 612 - 851 -5987 www.northlandsecurities.com Member NASD and SIPC EXTRACT OF MINUTES OF A MEETING • CITY COUNCIL OF THE CITY OF OAK PARK HEIGHTS, MINNESOTA HELD: May 27, 2008 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Oak Park Heights, Washington County, Minnesota, was duly held at the City Hall on May 27, 2008, at 7:00 P.M., for the purpose, in part, of authorizing the issuance and awarding the sale of $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2008A. The following members were present: Beaudet, Abrahamson, Doerr, McComber, and Swenson and the following were absent: None Member Doerr introduced the following resolution and moved its adoption: RESOLUTION NO. 08 -05 -21 FINAL RESOLUTION PROVIDING FOR THE SALE OF $6,300,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2008A AND SETTING • FINAL INTEREST RATES, REDEMPTION PROVISIONS AND TAX LEVY FOR THE PAYMENT THEREOF PURSUANT TO RESOLUTION NO. 08 -05 -19 WHICH AUTHORIZED THE ISSUANCE OF THE BONDS A. WHEREAS, on November 7, 2007, the City Council of the City Oak Park Heights, Minnesota (the "City "), held a public hearing on the proposed issuance of general obligation capital improvement plan bonds and, pursuant to Resolution Nos. 7 -11 -62 and 7 -11- 63, approved and adopted the 2008 through 2012 Five -Year Capital Improvement Plan for City of Oak Park Heights, Minnesota (the "Plan"), all in accordance with the provisions of Minnesota Statutes, Section 475.521; and B. WHEREAS, on May 13, 2008, the City Council adopted Resolution No. 08 -05- 19, which approved the issuance of general obligation capital improvement plan bonds to finance the rehabilitation and/or replacement of city hall facilities, including the police department and public works areas (the "Project "), all pursuant to the Plan; and C. WHEREAS, no petition signed by voters equal to five percent of the votes cast in the City in the last general election requesting a vote on the issuance of the general obligation capital improvement plan bonds has been filed with the Administrator within thirty days after the public hearing on the Plan and on the issuance of the general obligation capital improvement plan bonds; and • D. WHEREAS, the City Council hereby determines and declares that it is necessary and expedient to issue $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2116597v1 • 2008A (the "Bonds" or, individually, a "Bond "), pursuant to Minnesota Statutes, Section 475.521 and Chapter 475, to provide funds to finance the Project; and E. WHEREAS, the City has heretofore determined, in accordance with Minnesota Statutes, Section 475.521, Subd. 4, that the principal and interest to become due in any year on all the outstanding bonds issued by the City under Minnesota Statutes, Section 475.521, including the Bonds, will be less than 0.16 percent of the taxable market value of property in the City; and F. WHEREAS, the City has retained Sound Capital Management Inc., in Eden Prairie, Minnesota, as its independent financial advisor for the sale of the Bonds and was therefore authorized to sell the Bonds by private negotiation in accordance with Minnesota Statues, Section 475.60, Subdivision 2(9); and G. WHEREAS, it is in the best interests of the City that the Bonds be issued in book - entry form as hereinafter provided; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Oak Park Heights, Minnesota, as follows: 1. Acceptance of Offer. The offer of Northland Securities, Inc. (the "Purchaser "), to purchase the Bonds in accordance with the terms and at the rates of interest hereinafter set forth, and to pay therefor the sum of $6,219,201.95, plus interest accrued to settlement, is hereby accepted. 2. Bond Terms. (a) Original Issue Date; Denominations; Maturities; Term Bond Option. The Bonds shall be dated June 15, 2008, as the date of original issue, be issued forthwith on or after such date in fully registered form, be numbered from R -1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized Denominations "), and shall mature on December 15 in the years and amounts as follows: Year Amount Year Amount 2009 $135,000 2019 $290,000 2010 150,000 2020 315,000 2011 155,000 2021 340,000 2012 170,000 2022 370,000 2013 185,000 2023 405,000 2014 200,000 2024 440,000 2015 215,000 2025 485,000 2016 230,000 2026 525,000 2017 250,000 2027 560,000 2018 270,000 2028 610,000 40 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 2116597v1 2 principal repayment schedule, and corresponding additions may be made to the provisions of the applicable Bond(s). (b) Book Entry Only System. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository") will act as securities depository for the Bonds, and to this end: (i) The Bonds shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period "), shall at all times be in the form of a separate single fully registered Bond for each maturity of the Bonds; and for purposes of complying with this requirement under paragraphs 5 and 10 Authorized Denominations for any Bond shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Bond. (ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee "). (iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Bonds as securities depository (the "Participant ") or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant (the "Beneficial Owner "). Without limiting the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Bonds, or (D) the consent given or other action taken by the Depository as the Registered Holder of any Bonds (the "Holder "). For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to certain Participants to whose accounts the Bonds are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Bond Registrar may treat as and deem the Depository to be the absolute owner of the Bonds for the purpose of payment of the principal of and premium, if any, and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to the Bonds, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as • paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Bonds only to the Holder or the Holders of the Bonds as shown on the bond register, and 2116597v1 3 • all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Bond Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 10, references to the Nominee hereunder shall refer to such new Nominee. (vi) So long as any Bond is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, by the Bond Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book -entry Depository for the Bonds (said Letter of Representations, together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book -entry Depository for the Bonds, collectively hereinafter referred to as the "Letter of Representations "). (vii) All transfers of beneficial ownershi p interests in each Bond issued in book -entry form shall be limited in principal amount to Authorized Denominations and shall be effected by procedures by the Depository with the Participants for recording and • transferrin g ownership the ownershi of beneficial interests in such Bonds. (viii) In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Bond Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Bond Registrar may establish a special record date for such consent or other action. The City or the Bond Registrar shall, to the extent possible, give the Depository notice of such special record date not less than 15 calendar days advance of such special record date to the ex tent possible. Y (ix) Any successor Bond Registrar in its written acceptance of its duties under this Resolution and any paying agency/bond registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of surrendering the Bonds for a Bond of a lesser denomination as provided in paragraph 5 make a notation of the reduction in principal amount on the panel provided on the Bond stating the amount so redeemed. (c) Termination of Book -Entry Only System. Discontinuance of a particular Depository's services and termination of the book -entry only system may be effected as follows: 2116597v1 4 • (i) The Depository may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law. The City may terminate the services of the Depository with respect to the Bond if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book -entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners. (ii) Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute securities depository is willing to undertake the functions of the Depository hereunder can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terms, or if the City determines that it is in the best interests of the City or the Beneficial Owners of the Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds shall no longer be registered as being registered in the bond register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Bonds shall designate at that time, in accordance with paragraph 10. To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10, the Bonds will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of paragraph 10. II/ (d) Letter of Representations. The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representations shall control. 3. Purpose. The Bonds shall provide funds to finance the Project. The total cost of the Project, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Project shall proceed with due diligence to completion. 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. Interest. The Bonds shall bear interest payable semiannually on June 15 and December 15 of each year (each, an "Interest Payment Date "), commencing December 15, 2008, calculated on the basis of a 360 -day year of twelve 30 -day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Year Interest Rate Maturity Year Interest Rate 2009 2.50% 2019 3.80% 2010 2.75 2020 4.00 2011 2.90 2021 4.00 2012 3.05 2022 4.00 • 2013 3.15 2023 4.05 2014 3.30 2024 4.10 2116597v1 5 • 2015 3.45 2025 4.20 2016 3.60 2026 4.25 2017 3.70 2027 4.35 2018 3.75 2028 4.40 5. Redemption. All Bonds maturing on December 15, 2017, and thereafter shall be subject to redemption and prepayment at the option of the City on December 15, 2016, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and the principal amounts within each maturity to be redeemed shall be determined by the City and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Bonds. To effect a partial redemption of Bonds having a common maturity date, the Registrar prior to giving notice of redemption shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Registrar (with, if the City or Registrar so requires, a written instrument of transfer in form satisfactory to the City and Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the City shall execute (if necessary) and the Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered: 6. Bond Registrar. Northland Trust Services, Inc., in Minneapolis, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar "), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 12. 7. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: • 2116597v1 6 e UNITED STATES OF AMERICA STATE OF MINNESOTA WASHINGTON COUNTY CITY OF OAK PARK HEIGHTS R- $ GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND, SERIES 2008A Interest Rate Maturity Date Date of Original Issue CUSIP December 15, June 15, 2008 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: THE CITY OF OAK PARK HEIGHTS, Washington County, Minnesota (the "Issuer "), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for prepayment, and to pay interest thereon semiannually on June 15 and December 15 of each year (each, an "Interest Payment Date "), commencing December 15, 2008, at the rate per annum specified above (calculated on the basis of a 360 -day year of twelve 30 -day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of Northland Trust Services, Inc., in Minneapolis, Minnesota (the "Bond Registrar "), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder ") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the first day of the calendar month of such Interest Payment Date (the "Regular Record Date "). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date ") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. So long as this Bond is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of principal of, premium, if any, and interest on this Bond and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution. Until termination of the book -entry only system pursuant to the Resolution, Bonds may only be registered in the name of the Depository or its Nominee. 2116597v1 7 • Optional Redemption. The Bonds of this issue (the "Bonds ") maturing on December 15, 2017, and thereafter, are subject to redemption and prepayment at the option of the Issuer on December 15, 2016, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and the principal amounts within each maturity to be redeemed shall be determined by the Issuer; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected Holder of the Bonds prior to the date fixed for redemption. Selection of Bonds for Redemption; Partial Redemption. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar 411 (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $6,300,000, all of like date of original issue and tenor, except as to number, maturity, interest rate and denomination, issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council of the Issuer on May 27, 2008 (the "Resolution "), to finance the rehabilitation and/or replacement of the city hall facilities, including the police department and public works areas, as provided in the 2008 through 2012 Five -Year Capital Improvement Plan for City of Oak Park Heights, Minnesota. This Bond is payable out of the General Obligation Capital Improvement Plan Bonds, Series 2008A Fund of the Issuer. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable solely in fully registered • form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations 2116597v1 8 provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by the Holder's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized Denomination or Denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owners. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided herein with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. • Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Qualified Tax- Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax- exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Oak Park Heights, Washington County, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Administrator, the corporate seal of the Issuer having been intentionally omitted as permitted by law. 2116597v1 9 • Date of Registration: Registrable by: NORTHLAND TRUST SERVICES, INC. Payable at: NORTHLAND TRUST SERVICES, INC. CITY OF OAK PARK HEIGHTS, WASHINGTO -0 ► ,.... V �� ESOTA BOND REGISTRAR'S f < CERTIFICATE OF •/ �j AUTHENTICATION /s/ Facsimil , A ��..c This Bond is one of the Bonds Mayor , described in the Resolution mentioned within. ) 1 Northland Trust Services, Inc. /s/ F. '►� Minneapolis, Minnesota, Adm ':trato Bond Registrar By f Authorized Signature I/ • 2116597v1 1 0 • ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for _ (Cust) (Minor) under the Uniform Transfers to Minors Act (State) 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 does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. i) Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad- 15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 2116597v1 11 PREPAYMENT SCHEDULE This Bond has been prepaid in part on the date(s) and in the amount(s) as follows: AUTHORIZED SIGNATURE DATE AMOUNT OF HOLDER • • 2116597v1 12 • 8. Execution; Temporary Bonds. The Bonds shall be in typewritten form, shall be executed on behalf of the City by the signatures of its Mayor and Administrator and be sealed with the seal of the City; provided, as permitted by law, both signatures may be photocopied facsimiles and the corporate seal has been omitted. In the event of disability or resignation or other absence of either officer, the Bonds may be signed by the manual or facsimile signature of the officer who may act on behalf of the absent or disabled officer. In case either officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, the signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. 9. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on the Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and, by inserting as the date of registration in the space provided, the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is June 15, 2008. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 10. Registration; Transfer; Exchange. The City will cause to be kept at the principal • office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder, Bonds may be exchanged for Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the Holder making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the City. 2116597v1 13 All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or the Holder's attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover an tax or other g Y q P Ym Y governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. The Administrator is hereby authorized to negotiate and execute the terms of said agreement. 11. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 12. Interest Payment; Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder ") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the first day of the calendar month of such Interest Payment Date (the "Regular Record Date "). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date ") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten days prior to the Special Record Date. 13. Treatment of Registered d Registrar may treat the istered Owner. The City and on g t3' g Y person in whose name any Bond is registered as the owner of the Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 12) on, the Bond and for all other purposes whatsoever whether or not the Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Administrator to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Capital Improvement Plan Bonds, Series 2008A Fund" (the "Fund ") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall 2116597v1 14 • be maintained in the manner herein specified until all of the Bonds and the interest thereon have been fully paid. There shall be maintained in the Fund the following separate accounts: (a) Construction Account. To the Construction Account there shall be credited the proceeds of the sale of the Bonds, less accrued and capitalized interest. From the Construction Account there shall be paid all costs and expenses of financing the Project listed in paragraph 16, including the cost of any construction contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Moneys in the Construction Account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bonds may also be used to the extent necessary to pay interest on the Bonds due prior to the anticipated date of commencement of the collection of taxes herein levied or covenanted to be levied; and provided further that if upon completion of the Project there shall remain any unexpended balance in the Construction Account, the balance shall be t - transferred by the City Council to the Debt Service Account. Pelt (b) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (i) accrued interest received upon delivery of the Bonds; (ii) capitalized interest in the amount of $242,302.50 (together with interest earnings thereon and subject to such other adjustments as are appropriate to provide sufficient funds to pay interest due on the Bonds on or before December 15, 2009); (iii) all collections of taxes herein or hereafter levied for the payment of the Bonds; (iv) all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (v) all investment earnings on funds held in the Debt Service Account; and (vii) any and • all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Construction Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under then applicable 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 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code "). 16. Tax Levy; Coverage Test. To provide moneys for payment of the principal and • interest on the Bonds there is hereby levied upon all of the taxable property in the City a direct 2116597v1 15 • annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Levy Years Collection Years Amount 2008 -2027 2009 -2028 See Attached Schedule A The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levies shall be irrepealable so long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 17. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full, provided that notice of redemption thereof has been duly given. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity. 18. Compliance With Reimbursement Bond Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1.150 -2 (the "Reimbursement Regulations ") applicable to the "reimbursement proceeds" of the Bonds, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure "). The City hereby certifies and/or covenants as follows: (a) Not later than 60 days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration ") which effectively (i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the 2116597v1 16 • Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the general functional purpose thereof from which the Reimbursement Expenditure was to be paid (collectively the "Project "); and (iii) states the maximum principal amount of debt expected to be issued by the City for the purpose of financing the Project; provided, however, that no such Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed twenty percent of the "issue price" of the Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of $100,000 or five percent of the proceeds of the Bonds. (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Bonds or any of the other types of expenditures described in Section 1.150- 2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Bonds and in all events within the period ending on the date which is the later of three years after payment of the Reimbursement Expenditure or one year after the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30 days after the Bonds are issued, shall be treated as made on the day the Bonds are issued. Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph upon receipt of an opinion of its Bond Counsel for the Bonds stating in effect that such action will not impair the tax- exempt status of the Bonds. 19. General Obligation Pledge. 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 hereby irrevocably pledged. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds 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 Debt Service Account when a sufficient balance is available therein. 20. Continuing Disclosure. The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2 -12 (the "Rule "), promulgated by the Securities and Exchange Commission (the "Commission ") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking ") hereinafter described to: (a) to provide or cause to be provided, (i) (a) upon request to any person, or (b) upon establishment of a state information depository ( "SID "), to the SID, its audited financial statements for the most recent fiscal year, and (ii) to each nationally recognized municipal securities information repository or to the Municipal Securities Rulemaking Board and the SID, 2116597v1 17 • if any, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking; and (b) its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holders; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Administrator, or any other officer of the City authorized to act in their place are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Mayor and Administrator. 21. Certificate of Registration. The Administrator is hereby directed to file a certified copy of this resolution with the County Auditor of Washington County, Minnesota, together with such other information as the County Auditor shall require, and to obtain from the County Auditor the certificate that the Bonds have been entered in the County Auditor's Bond Register and that the tax levy required by law has been made. 22. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 23. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or to use 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 Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 24. Tax- Exempt Status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (a) requirements relating to temporary periods for investments, (b) limitations on amounts invested at a yield greater than the yield on the Bonds, and (c) the rebate of excess investment earnings to the United States. The City expects to satisfy the eighteen month expenditure exemption for gross proceeds of the Bonds as provided in Section 1.148- 7(d)(1) of the Regulations. If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Bonds, the Mayor, the City Administrator, or either of them, are hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable 2116597v1 18 in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 25. Designation of Qualified Tax- Exempt Obligations. In order to qualify the Bonds as "qualified tax- exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax- exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2008 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. 40 The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 26. Payment of Issuance Expenses. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to the Bond Registrar on the closing date for further distribution as directed by the Purchaser. 27. 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. 28. 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. The motion for the adoption of the foregoing resolution was duly seconded by member Swenson and, after a full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: Beaudent, Abrahamson, Doerr, and Swenson and the following voted against the same: McComber Whereupon the resolution was declared duly passed and adopted. • 2116597v1 19 0 STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF OAK PARK HEIGHTS I, the undersigned, the Administrator of the City of Oak Park Heights, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council, duly called and held on the date therein indicated, insofar as such minutes relate to authorizing the issuance and awarding the sale of $6,300,000 General Obligation Capital Improvement Plan Bonds, Series:A. WITNESS my hand on May 1,7, 2008. Admi ► ator • i 2116597v1 20 • SCHEDULE A YEAR OF LEVY YEAR OF COLLECTION TAX LEVY 2008 2009 $360,000.00 2009 2010 380,000.00 2010 2011 390,000.00 2011 2012 400,000.00 2012 2013 410,000.00 2013 2014 420,000.00 2014 2015 430,000.00 2015 2016 440,000.00 2016 2017 450,000.00 2017 2018 460,000.00 2018 2019 470,000.00 2019 2020 485,000.00 2020 2021 500,000.00 2021 2022 515,000.00 2022 2023 530,000.00 2023 2024 545,000.00 2024 2025 560,000.00 2025 2026 575,000.00 2026 2027 595,000.00 2027 2028 620,000.00 TOTAL $9,535,000.00 • ` "�" • 7 Vic: City of Oak Park Heights • • Phone (651) 439 -4439 • Fax 651 14168 Oak Park Blvd. N • Box 2007 • Oak Park Heights, MN 55082 • Phon (65 } ( ) 439 -0574 June 2, 2008 TO: Steve Mattson. Northland Securities FROM: Eric Johnson, City Administrator RE: Documents for Bond issuance Enclosed per your request are two items: 1. A OFFICAL COPY of the Extract of Minutes of the May 27th City Council Meeting, and which contains a certified copy of the 08 -05 -21 City Resolution and Certification. • 2. 5 signed original copies of the certification of the Extract of Minutes please pass these on to Punnavy Koy. Please let me know if y• n d anything else. Best r egards, Eric .h Cc: Judy Hoist - (No Enclosures) • • RESOLUTION 08 -05 -21 FINAL RESOLUTION PROVIDING FOR THE SALE OF $6,300,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2008A AND SETTING FINAL INTEREST RATES, REDEMPTION PROVISIONS AND TAX LEVY FOR THE PAYMENT THEREOF PURSUANT TO RESOLUTION NO. 08-05-19 WHICH AUTHORIZED THE ISSUANCE OF THE BONDS A. WHEREAS, on November 7, 2007, the City Council of the City Oak Park Heights, Minnesota (the "City "), held a public hearing on the proposed issuance of general obligation capital improvement plan bonds and, pursuant to Resolution Nos. 7 -11 -62 and 7 -11- 63, approved and adopted the 2008 through 2012 Five -Year Capital Improvement Plan for City of Oak Park Heights, Minnesota (the "Plan"), all in accordance with the provisions of Minnesota Statutes, Section 475.521; and B. WHEREAS, on May 13, 2008, the City Council adopted Resolution No. 08-05 - 19, which approved the issuance of general obligation capital improvement plan bonds to finance the rehabilitation and/or replacement of city hall facilities, including the police department and public works areas (the "Project "), all pursuant to the Plan; and C. WHEREAS, no petition signed by voters equal to five percent of the votes cast in the City in the last general election requesting a vote on the issuance of the general obligation capital improvement plan bonds has been filed with the Administrator within thirty days after the public hearing on the Plan and on the issuance of the general obligation capital improvement plan bonds; and D. WHEREAS, the City Council hereby determines and declares that it is necessary and expedient to issue $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2008A (the "Bonds" or, individually, a "Bond"), pursuant to Minnesota Statutes, Section 475.521 and Chapter 475, to provide funds to finance the Project; and E. WHEREAS, the City has heretofore determined, in accordance with Minnesota Statutes, Section 475.521, Subd. 4, that the principal and interest to become due in any year on all the outstanding bonds issued by the City under Minnesota Statutes, Section 475.521, including the Bonds, will be less than 0.16 percent of the taxable market value of property in the City; and F. WHEREAS, the City has retained Sound Capital Management Inc., in Eden Prairie, Minnesota, as its independent financial advisor for the sale of the Bonds and was therefore authorized to sell the Bonds by private negotiation in accordance with Minnesota Statues, Section 475.60, Subdivision 2(9); and G. WHEREAS, it is in the best interests of the City that the Bonds be issued in book- • entry form as hereinafter provided; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Oak Park Heights, Minnesota, as follows: • 1. Acceptance of Offer. The offer of Northland Securities, Inc. (the "Purchaser "), to purchase the Bonds in accordance with the terms and at the rates of interest hereinafter set forth, and to pay therefor the sum of $6,219,201.95, plus interest accrued to settlement, is hereby accepted. 2. Bond Terms. (a) Original Issue Date; Denominations; Maturities; Term Bond Option. The Bonds shall be dated June 15, 2008, as the date of original issue, be issued forthwith on or after such date in fully registered form, be numbered from R -1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized Denominations "), and shall mature on December 15 in the years and amounts as follows: Year Amount Year Amount 2009 $135,000 2019 $290,000 2010 150,000 2020 315,000 2011 155,000 2021 340,000 2012 170,000 2022 370,000 2013 185,000 2023 405,000 2014 200,000 2024 440,000 2015 215,000 2025 485,000 2016 230,000 2026 525,000 2017 250,000 2027 560,000 2018 270,000 2028 610,000 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). (b) Book Entry Only System. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository ") will act as securities depository for the Bonds, and to this end: (i) The Bonds shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period "), shall at all times be in the form of a separate single fully registered Bond for each maturity of the Bonds; and for purposes of complying with this requirement under paragraphs 5 and 10 Authorized Denominations for any Bond shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Bond. (ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the i "Nominee "). • (iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Bonds as securities depository (the "Participant ") or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant (the "Beneficial Owner "). Without limiting the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Bonds, or (D) the consent given or other action taken by the Depository as the Registered Holder of any Bonds (the "Holder "). For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to certain Participants to whose accounts the Bonds are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Bond Registrar may treat as and deem the Depository to be the absolute owner of the Bonds for the purpose of payment of the principal of and premium, if any, and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to the Bonds, for the purpose of obtaining any • consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Bonds only to the Holder or the Holders of the Bonds as shown on the bond register, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Bond Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 10, references to the Nominee hereunder shall refer to such new Nominee. (vi) So long as any Bond is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, by the Bond Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book -entry Depository for the Bonds (said Letter of Representations, together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book -entry Depository for the • Bonds, collectively hereinafter referred to as the "Letter of Representations "). (vii) All transfers of beneficial ownership interests in each Bond issued in book -entry form shall be limited in principal amount to Authorized Denominations and shall be effected by procedures by the Depository with the Participants for recording and transferring the ownership of beneficial interests in such Bonds. (viii) In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Bond Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Bond Registrar may establish a special record date for such consent or other action. The City or the Bond Registrar shall, to the extent possible, give the Depository notice of such special record date not less than 15 calendar days in advance of such special record date to the extent possible. (ix) Any successor Bond Registrar in its written acceptance of its duties under this Resolution and any paying agency/bond registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of surrendering the Bonds for a Bond of a lesser denomination as provided in paragraph 5, make a notation of the reduction in principal amount on the panel provided on the Bond stating the amount so redeemed. • (c) Termination of Book -Entry Only System. Discontinuance of a particular Depository's services and termination of the book -entry only system may be effected as follows: (i) The Depository may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law. The City may terminate the services of the Depository with respect to the Bond if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book -entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners. (ii) Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute securities depository is willing to undertake the functions of the Depository hereunder can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terms, or if the City determines that it is in the best interests of the City or the Beneficial Owners of the Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds shall no longer be registered as being registered in the bond register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Bonds shall designate at that time, in accordance with paragraph 10. To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10, the Bonds will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of paragraph 10. (d) Letter of Representations. The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representations shall control. 3. Purpose. The Bonds shall provide funds to finance the Project. The total cost of the Project, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Project shall proceed with due diligence to completion. 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. Interest. The Bonds shall bear interest payable semiannually on June 15 and December 15 of each year (each, an "Interest Payment Date "), commencing December 15, 2008, calculated on the basis of a 360 -day year of twelve 30 -day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Year Interest Rate Maturity Year Interest Rate 2009 2.50% 2019 3.80% 2010 2.75 2020 4.00 2011 2.90 2021 4.00 2012 3.05 2022 4.00 2013 3.15 2023 4.05 • 2014 3.30 2024 4.10 2015 3.45 2025 4.20 2016 3.60 2026 4.25 2017 3.70 2027 4.35 2018 3.75 2028 4.40 5. Redemption. All Bonds maturing on December 15, 2017, and thereafter shall be subject to redemption and prepayment at the option of the City on December 15, 2016, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and the principal amounts within each maturity to be redeemed shall be determined by the City and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Bonds. To effect a partial redemption of Bonds having a common maturity date, the Registrar prior to giving notice of redemption shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the q p p Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Registrar (with, if the City or Registrar so requires, a written instrument of transfer in form satisfactory to the City and Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the City shall execute (if necessary) and the Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 6. Bond Registrar. Northland Trust Services, Inc., in Minneapolis, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or h manner set forth in the form of Bond and paragraph 12. ara ra record holders) of the Bonds in the m p g p 7. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: • UNITED STATES OF AMERICA STATE OF MINNESOTA WASHINGTON COUNTY CITY OF OAK PARK HEIGHTS R- $ GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND, SERIES 2008A Interest Rate Maturity Date Date of Original Issue CUSIP December 15, June 15, 2008 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: THE CITY OF OAK PARK HEIGHTS, Washington County, Minnesota (the "Issuer "), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for prepayment, and to pay interest thereon semiannually on June 15 and December 15 of each year (each, an "Interest . Payment Date "), commencing December 15, 2008, at the rate per annum specified above (calculated on the basis of a 360 -day year of twelve 30 -day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of Northland Trust Services, Inc., in Minneapolis, Minnesota (the "Bond Registrar "), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder ") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the first day of the calendar month of such Interest Payment Date (the "Regular Record Date "). Any interest not so timely paid shall e to be payable to the person who is the Holder hereof as of the Regular o ular Record Date, and p y p g shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date ") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. So long as this Bond is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of P rincipal of, premium, if any, and interest on this Bond and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution. Until termination of the book -entry only system pursuant to the Resolution, Bonds may only be registered in the name of the Depository or its Nominee. Optional Redemption. The Bonds of this issue (the "Bonds ") maturing on December 15, 2017, and thereafter, are subject to redemption and prepayment at the option of the Issuer on December 15, 2016, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and the principal amounts within each maturity to be redeemed shall be determined by the Issuer; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected Holder of the Bonds prior to the date fixed for redemption. Selection of Bonds for Redemption; Partial Redemption. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $6,300,000, all of like date of original issue and tenor, except as to number, maturity, interest rate and denomination, issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council of the Issuer on May 27, 2008 (the "Resolution "), to finance the rehabilitation and/or replacement of the city hall facilities, including the police department and public works areas, as provided in the 2008 through 2012 Five -Year Capital Improvement Plan for City of Oak Park Heights, Minnesota. This Bond is payable out of the General Obligation Capital Improvement Plan Bonds, Series 2008A Fund of the Issuer. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable solely in fully registered form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the 410 rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by the Holder's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized Denomination or Denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owners. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided herein with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. • Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Qualified Tax- Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax - exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Oak Park Heights, Washington County, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Administrator, the corporate seal of the Issuer having been intentionally omitted as permitted by law. • Date of Registration: Registrable by: NORTHLAND TRUST SERVICES, INC. Payable at: NORTHLAND TRUST SERVICES, INC. CITY OF OAK PARK HEIGHTS, WASHINGTON COUNTY, MINNESOTA BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION /s/ Facsimile This Bond is one of the Bonds Mayor described in the Resolution mentioned within. Northland Trust Services, Inc. /s/ Facsimile Minneapolis, Minnesota, Administrator Bond Registrar By Authorized Signature • • ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cust) (Minor) under the Uniform Transfers to Minors Act (State) 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 does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor " Ad-15(a)(2). Institution as defined in 17 CFR 240.17 The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) • PREPAYMENT SCHEDULE This Bond has been prepaid in part on the date(s) and in the amount(s) as follows: AUTHORIZED SIGNATURE DATE AMOUNT OF HOLDER • • 8. Execution; Temporary Bonds. The Bonds shall be in typewritten form, shall be executed on behalf of the City by the signatures of its Mayor and Administrator and be sealed with the seal of the City; provided, as permitted by law, both signatures may be photocopied facsimiles and the corporate seal has been omitted. In the event of disability or resignation or other absence of either officer, the Bonds may be signed by the manual or facsimile signature of the officer who may act on behalf of the absent or disabled officer. In case either officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, the signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. 9. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on the Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and, by inserting as the date of registration in the space provided, the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is June 15, 2008. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 10. Registration; Transfer; Exchange. The City will cause to be kept at the principal • office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder, Bonds may be exchanged for Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the Holder making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the City. • All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or the Holder's attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. The Administrator is hereby authorized to negotiate and execute the terms of said agreement. 11. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 12. Interest Payment; Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder ") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the first day of the calendar month of such Interest Payment Date (the "Regular Record Date "). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date ") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten days prior to the Special Record Date. 13. Treatment of Registered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of the Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 12) on, the Bond and for all other purposes whatsoever whether or not the Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Administrator to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. g p p Pp 15. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Capital Improvement Plan Bonds, Series 2008A Fund" (the "Fund ") to be • administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Bonds and the interest thereon have been fully paid. There shall be maintained in the Fund the following separate accounts: (a) Construction Account. To the Construction Account there shall be credited the proceeds of the sale of the Bonds, less accrued and capitalized interest. From the Construction Account there shall be paid all costs and expenses of financing the Project listed in paragraph 16, including the cost of any construction contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Moneys in the Construction Account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bonds may also be used to the extent necessary to pay interest on the Bonds due prior to the anticipated date of commencement of the collection of taxes herein levied or covenanted to be levied; and provided further that if upon completion of the Project there shall remain any unexpended balance in the Construction Account, the balance shall be transferred by the City Council to the Debt Service Account. (b) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (i) accrued interest received upon delivery of the Bonds; (ii) capitalized interest in the amount of $245,025.00 (together with interest earnings thereon and subject to such other adjustments as are appropriate to provide sufficient funds to pay interest due on the Bonds on or before December 15, 2009); (iii) all collections of taxes herein or hereafter levied for the payment of the Bonds; (iv) all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (v) all investment earnings on funds held in the Debt Service Account; and (vii) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Construction Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under then applicable 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 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code "). . 16. Tax Levy; Coverage Test. To provide moneys for payment of the principal and interest on the Bonds there is hereby levied upon all of the taxable property in the City a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Levy Years Collection Years Amount 2008 -2027 2009 -2028 See Attached Schedule A The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levies shall be irrepealable so long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 17. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond g pY should not be paid when due, it may nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing io with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full, provided that notice of redemption thereof has been duly given. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably g g g � Y p g Y in escrow, with a purpose, cash or le banking institution qualified by law as an escrow agent for this surtab g q y g p� securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity. 18. Compliance With Reimbursement Bond Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1.150 -2 (the "Reimbursement Regulations ") applicable to the "reimbursement proceeds" of the Bonds, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure "). The City hereby certifies and/or covenants as follows: (a) Not later than 60 days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration ") which effectively (i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the 4) general functional purpose thereof from which the Reimbursement Expenditure was to be paid (collectively the "Project "); and (iii) states the maximum principal amount of debt expected to be issued by the City for the purpose of financing the Project; provided, however, that no such Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed twenty percent of the "issue price" of the Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of $100,000 or five percent of the proceeds of the Bonds. (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Bonds or any of the other types of expenditures described in Section 1.150- 2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Bonds and in all events within the period ending on the date which is the later of three years after payment of the Reimbursement Expenditure or one year after the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30 days after the Bonds are issued, shall be treated as made on the day the Bonds are issued. • Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph upon receipt of an opinion of its Bond Counsel for the Bonds stating in effect that such action will not impair the tax- exempt status of the Bonds. 19. General Obligation Pledge. 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 hereby irrevocably pledged. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds 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 Debt Service Account when a sufficient balance is available therein. 20. Continuing Disclosure. The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2 -12 (the "Rule "), promulgated by the Securities and Exchange Commission (the "Commission ") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking ") hereinafter described to: (a) to provide or cause to be provided, (i) (a) upon request to any person, or (b) upon establishment of a state information depository ( "SID "), to the SID, its audited financial statements for the most recent fiscal year, and (ii) to each nationally recognized municipal • securities information repository or to the Municipal Securities Rulemaking Board and the SID, if any, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking; and • (b) its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holders; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Administrator, or any other officer of the City authorized to act in their place are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Mayor and Administrator. 21. Certificate of Registration. The Administrator is hereby directed to file a certified copy of this resolution with the County Auditor of Washington County, Minnesota, together with such other information as the County Auditor shall require, and to obtain from the County Auditor the certificate that the Bonds have been entered in the County Auditor's Bond Register and that the tax levy required by law has been made. 22. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the • Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 23. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or to use 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 Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 24. Tax- Exempt Status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (a) requirements relating to temporary periods for investments, (b) limitations on amounts invested at a yield greater than the yield on the Bonds, and (c) the rebate of excess investment earnings to the United States. The City expects to satisfy the eighteen month expenditure exemption for gross proceeds of the Bonds as provided in Section 1.148- 7(d)(1) of the Regulations. If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Bonds, the Mayor, the City Administrator, or either of them, are hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 410 25. Designation of Qualified Tax- Exempt Obligations. In order to qualify the Bonds 41) as "qualified tax- exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax- exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2008 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 26. Payment of Issuance Expenses. The City authorizes the Purchaser to forward the • amount of Bond proceeds allocable to the payment of issuance expenses to the Bond Registrar on the closing date for further distribution as directed by the Purchaser. 27. 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. 28. 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. The motion for the adoption of the foregoing resolution was made by member Doerr and duly seconded by member Swenson and, after a full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: Beaudet, Abrahamson, Doerr, and Swenson and the following voted against the same: McComber Passed by the City Council of the City of Oak Par ft ;: - : 27 th da ay, 2008. 1.4 ' Y I II !` mcv- det, Ma A ti 'c J•hnson City Administrator 1 O � °N N P2 !; 'R N b m e N 8 n h P I Y:. p ' d _ U N O ^ - •-• • O O P OG F N- „, d ,O M1 r- h • N m , � ( i Q b l g h . i .�. \ V 0 ,T; M ,T, .b+, m A A r M M rr'+ M Cb') g A n rb', ern M K 1. M F Gra V V� I-4 y •yam p 8 ' M V m n O r- N v m' }y J OO O N N O tl N O vt V, N O� � O O. M. V d' d' . V. b r 8 O Z/I.IG. 0 P N T Q. P P P P P C. P P P P P P O. 8 N "&r. U 14 .Y- a d, : 4t za U V o O N P .D m N F— mm—me— d O m m d,•m i a U ' —_ N - d :O h, b O , v ) .... V� 00 «. < ' Q S N b b b •,, ,, , h Vi b , h P. 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Riverside Plaza Suite 2220 Chicago, IL 60606 May 30, 2008 Henrietta Chang Vice President/Sr. Analyst Ms. Judy Holst Tel: 312.706.9960 Finance Director Fax: 312.706.9999 City of Oak Park Heights E -mail: henrietta.chang@moodys.com 14168 Oak Park Boulevard Oak Park Heights, MN 55082 Dear Ms. Hoist: We wish to inform you that on May 22, 2008, Moody's Investors Service reviewed and assigned a rating of A2 to Oak Park Heights (City of) MN's General Obligation Capital Improvement Bonds, Series 2008A. In order for us to maintain the currency of our ratings, we request that you provide • ongoing disclosure, of current financial and statistical information. Moody's will monitor this rating and reserves the right, at its sole discretion, to revise or withdraw this rating at any time in the future. The rating, as well as any revisions or withdrawals thereof, will be publicly disseminated by Moody's through normal print and electronic media and in response to verbal requests to Moody's Rating Desk. Should you have any questions regarding the above, please do not hesitate to contact me or the analyst assigned to this transaction, Molly Shellhorn at 312- 706 -9972. Sincerely, Henrietta Chang cc: Mr. Steven Mattson Northland Securities • at Global Credit Research New Issue Ila+Nsstors 22 MAY 2008 • New Issue: Oak Park Heights (City of) MN MOODY'S ASSIGNS INITIAL A2 RATING TO THE CITY OF OAK PARK HEIGHTS (MN) $6.3 MILLION GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2008A Municipality MN Moody's Rating ISSUE RATING General Obligation Capital Improvement Bonds, Series 2008A A2 Sale Amount $6,300,000 Expected Sale Date 05/27/08 Rating Description General Obligation Unlimited Tax Opinion NEW YORK, May 22,2008 -- Moody's Investors Service has assigned an initial A2 rating to the City of Oak Park Height's (MN) $6.3 million General Obligation Capital Improvement Plan Bonds, Series 2008A. Secured by the city's general obligation unlimited tax pledge, bond proceeds will support construction of a new joint city hall and public works facility. The A2 rating is based on the city's growing tax base dominated by Xcel Power; strong financial management supported by healthy reserves; and below average debt burden limited future borrowing planned. ` FINANCIAL OPERATIONS EVIDENCED BY HEALTHY RESERVE LEVELS Moody's expects the city's financial position to remain sound due to demonstrated prudent management evidenced by sizable and stable reserves. Following five consecutive years of posting operating surpluses, the city recorded a surplus of approximately $200,000 in fiscal 2007, increasing the General Fund balance to $2.5 million, or 73.6% of General Fund revenues. The city's reserve policy is particularly strong, requiring maintenance of 50% of the following fiscal year's tax levy for cash flow needs. In addition the city also sets aside an amount equal to 15% of budgeted expenditures as a general contingency for unanticipated expenditures. Adherence to these policies has resulted in the city maintaining reserves historically well exceeding 50% of General Fund revenues. Given that over 77% of revenues are generated from local property taxes, the city has virtually no dependence on state local government aid. A certain measure of flexibility in the General Fund exists as several city services could be funded with a charge for service rather than through the General Fund levy. Moody's anticipates the city's strong financial position will be maintained based on the city's conservative budgeting practices and history of prudent fiscal management. GROWING TAX BASE DOMINATED BY XCEL ENERGY Located 20 miles west of St. Paul (general obligation rated Aa2) the city sits along the St. Croix river, south of Stillwater (rated Aa3). The city's tax base, currently valued at $727 million, has grown an average of 8:8% annually over the past five years. Recent growth is primarily attributed to new commercial development along highway 36. The city's largest taxpayer, Xcel Energy (senior unsecured rated Baa 1) accounts for a substantial 32.2% of Net Tax Capacity. Xcel recently completed a $40 million expansion at the Oak Park Heights plant, and according to city officials has invested approximately $300 million over the past several years associated with the Metropolitan Emissions Reduction Program. Favorably, the coal fired generating power plant has decreased over time as a percentage of the city's valuation (down from 50% in 1998), however Moody's believes this concentration poses vulnerabilities, given the city's heavy reliance on property taxes, which comprise over 77% of operating revenue. Wealth indices are relatively aligned with state averages with median family income and per capita income averaging 122.2% and 100.4% of state values. Washington County's unemployment rate (4.7% in March 2008) is typically slightly below state levels (5.4% for the same time period). Moody's expects the city's tax base will continue to experience moderate growth 0 to its proximity to the Twin Cities and ongoing commercial and residential development. BELOW AVERAGE DEBT BURDEN WITH NO FUTURE BORROWING PLANNED Moody's expects the city's below average 2.2% debt burden (0.9% direct) to remain manageable due to future tax base growth and the absence of any planned future borrowing. Principal amortization is below average, with 26.8% of all general obligation debt retired within ten years. As this will be the city's only ' outstanding general obligation debt, the 2008A bonds will be supported by a new debt service levy which is structured to maintain a level tax rate throughout the life of the bonds. Officials report there are no plans to sue additional debt over the near to mid -term. 411,' STATISTICS 2007 Population (Estimate): 4,676 2007 Full Value: $727 million 2007 Full Value per Capita: $155,488 Top ten largest taxpayers as a % of net tax capacity: 54.6% (Xcel Energy 32.2 %) Direct Debt: 0.9% Overlapping Debt: 2.2% Payout (10 Years): 26.8% Fiscal 2007 General Fund Balance: $2.5 million (73.6% of revenues) Washington County's Unemployment Rate (March 2008): 4.7% 2000 Per Capita Income as a % of State: 100.1% (107.9% of US) 2000 Median Family Income as a % of State: 122.2% (138.8% of US) Post -sale general obligation debt: $6.3 million • I Y sts Molly Shellhorn Analyst Public Finance Group Moody's Investors Service Rachel Cortez Backup Analyst Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553 -0376 Research Clients: (212) 553 -1653 © Copyright 2008, Moody's Investors Service, Inc. and /or its licensors including Moody's Assurance Company, Inc. 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Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5 %, is posted annually on Moody's website at www.moodys.com under the heading "Shareholder Relations - Corporate Governance - Director and Shareholder Affiliation Policy." I • • C I .01 Oak Park Heights .2c2- R fm ru b Request for Council Action Meeting Date May 27 2008 Time Required: 5 Minutes Agenda Item Title: City Hall Facility — Resolution Relati • to Final Sale of Bonds and Incorporated Terms. Agenda Placement Old Business Originating D artment/Re � r i c Jos. • Ci Administrator gl g ep q � - ..� n or ni t Requester's Signature 1 Action Requested Apgr %ve Resol on'— See Attached. Background/Justification (Please indicate if any previous action has been taken or if other public bodies have advised): This morning (5/27/08) it was brought to my attention that the Bond Counsel requires adoption of Final Resolution which sets forth the terms of the capital improvement plan bonds which were authorized on May 13, 2008, including the sale and purchase of the bonds by Northland Securities, final interest rates, redemption provisions, maturity amounts and finalizing the tax levy for the repayment of the bonds. The bonds have now been sold at a rate of 4.07% - Steve Mattson will be on hand to expand on the sale transactions and next steps. Council will recall that the action taken May 13, 2008, adoption of Resolution No. 08-05 - 19: authorized construction of a new City Hall Facility and resolved to issue capital improvement plan bonds which will cover the financing costs related thereto. Ordinarily, I would t; forestall this for your June 10 agenda, but because this meeting has been cancelled it is imperative that the City Council adopt this resolution this evening. (5/27/08) 111 T 7 EXTRACT OF MINUTES OF A MEETING • CITY COUNCIL OF THE CITY OF OAK PARK HEIGHTS, MINNESOTA HELD: May 27, 2008 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Oak Park Heights, Washington County, Minnesota, was duly held at the City Hall on May 27, 2008, at P.M., for the purpose, in part, of authorizing the issuance and awarding the sale of $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2008A. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION NO. 08- - FINAL RESOLUTION PROVIDING FOR THE SALE OF $6,300,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2008A AND SETTING FINAL INTEREST RATES, REDEMPTION PROVISIONS AND TAX LEVY FOR THE PAYMENT THEREOF PURSUANT TO RESOLUTION NO. 08-05-19 WHICH AUTHORIZED THE ISSUANCE OF THE BONDS A. WHEREAS, on November 7, 2007, the City Council of the City Oak Park Heights, Minnesota (the "City "), held a public hearing on the proposed issuance of general obligation capital improvement plan bonds and, pursuant to Resolution Nos. 7 -11 -62 and 7 -11- 63, approved and adopted the 2008 through 2012 Five -Year Capital Improvement Plan for City of Oak Park Heights, Minnesota (the "Plan "), all in accordance with the provisions of Minnesota Statutes, Section 475.521; and B. WHEREAS, on May 13, 2008, the City Council adopted Resolution No. 08 -05- 19, which approved the issuance of general obligation capital improvement plan bonds to finance the rehabilitation and /or replacement of city hall facilities, including the police department and public works areas (the "Project "), all pursuant to the Plan; and C. WHEREAS, no petition signed by voters equal to five percent of the votes cast in the City in the last general election requesting a vote on the issuance of the general obligation capital improvement plan bonds has been filed with the Administrator within thirty days after the public hearing on the Plan and on the issuance of the general obligation capital improvement plan bonds; and D. WHEREAS, the City Council hereby determines and declares that it is necessary and expedient to issue $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2116597v1 • 2008A (the "Bonds" or, individually, a "Bond"), pursuant to Minnesota Statutes, Section 475.521 • and Chapter 475, to provide funds to finance the Project; and E. WHEREAS, the City has heretofore determined, in accordance with Minnesota Statutes, Section 475.521, Subd. 4, that the principal and interest to become due in any year on all the outstanding bonds issued by the City under Minnesota Statutes, Section 475.521, including the Bonds, will be less than 0.16 percent of the taxable market value of property in the City; and F. WHEREAS, the City has retained in , Minnesota, as its independent financial advisor for the sale of the Bonds and was therefore authorized to sell the Bonds by private negotiation in accordance with Minnesota Statues, Section 475.60, Subdivision 2(9); and G. WHEREAS, it is in the best interests of the City that the Bonds be issued in book - entry form as hereinafter provided; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Oak Park Heights, Minnesota, as follows: 1. Acceptance of Offer. The offer of Northland Securities, Inc. (the "Purchaser "), to purchase the Bonds in accordance with the terms and at the rates of interest hereinafter set forth, and to pay therefor the sum of $ , plus interest accrued to settlement, is hereby accepted. 2. Bond Terms. (a) Original Issue Date; Denominations; Maturities; Term Bond Option. The Bonds shall be dated June 15, 2008, as the date of original issue, be issued forthwith on or after such date in fully registered form, be numbered from R -1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized Denominations "), and shall mature on December 15 in the years and amounts as follows: Year Amount Year Amount 2009 2019 2010 2020 2011 2021 2012 2022 2013 2023 2014 2024 2015 2025 2016 2026 2017 2027 2018 2028 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 2116597v1 2 T principal repayment schedule, and corresponding additions may be made to the provisions of the • applicable Bond(s). (b) Book Entry Only System. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository ") will act as securities depository for the Bonds, and to this end: (i) The Bonds shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period "), shall at all times be in the form of a separate single fully registered Bond for each maturity of the Bonds; and for purposes of complying with this requirement under paragraphs 5 and 10 Authorized Denominations for any Bond shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Bond. (ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee "). (iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Bonds as securities depository (the • "Participant ") or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant (the "Beneficial Owner "). Without limiting the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Bonds, or (D) the consent given or other action taken by the Depository as the Registered Holder of any Bonds (the "Holder "). For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to certain Participants to whose accounts the Bonds are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Bond Registrar may treat as and deem the Depository to be the absolute owner of the Bonds for the purpose of payment of the principal of and premium, if any, and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to the Bonds, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as !II paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Bonds only to the Holder or the Holders of the Bonds as shown on the bond register, and 2116597v1 3 all such payments shall be valid and effective to fully satisfy and discharge the City's • obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Bond Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 10, references to the Nominee hereunder shall refer to such new Nominee. (vi) So long as any Bond is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, by the Bond Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book -entry Depository for the Bonds (said Letter of Representations, together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book -entry Depository for the Bonds, collectively hereinafter referred to as the "Letter of Representations "). (vii) All transfers of beneficial ownership interests in each Bond issued in book -entry form shall be limited in principal amount to Authorized Denominations and shall be effected by procedures by the Depository with the Participants for recording and transferring the ownership of beneficial interests in such Bonds. (viii) In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Bond Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Bond Registrar may establish a special record date for such consent or other action. The City or the Bond Registrar shall, to the extent possible, give the Depository notice of such special record date not less than 15 calendar days in advance of such special record date to the extent possible. (ix) Any successor Bond Registrar in its written acceptance of its duties under this Resolution and any paying agency /bond registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of surrendering the Bonds for a Bond of a lesser denomination as provided in paragraph 5, make a notation of the reduction in principal amount on the panel provided on the Bond stating the amount so redeemed. (c) Termination of Book -Entry Only System. Discontinuance of a particular Depository's services and termination of the book -entry only system may be effected as follows: 2116597v1 4 • (i) The Depository may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law. The City may terminate the services of the Depository with respect to the Bond if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book -entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners. (ii) Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute securities depository is willing to undertake the functions of the Depository hereunder can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terms, or if the City determines that it is in the best interests of the City or the Beneficial Owners of the Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds shall no longer be registered as being registered in the bond register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Bonds shall designate at that time, in accordance with paragraph 10. To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10, the Bonds will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of paragraph 10. • (d) Letter of Representations. The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representations shall control. 3. Purpose. The Bonds shall provide funds to finance the Project. The total cost of the Project, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Project shall proceed with due diligence to completion. 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. Interest. The Bonds shall bear interest payable semiannually on June 15 and December 15 of each year (each, an "Interest Payment Date "), commencing December 15, 2008, calculated on the basis of a 360 -day year of twelve 30 -day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Year Interest Rate Maturity Year Interest Rate 2009 % 2019 2010 2020 2011 2021 2012 2022 2013 2023 • 2014 2024 2116597v1 5 • 2015 2025 2016 2026 2017 2027 2018 2028 5. Redemption. All Bonds maturing on December 15, 2017, and thereafter shall be subject to redemption and prepayment at the option of the City on December 15, 2016, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and the principal amounts within each maturity to be redeemed shall be determined by the City and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Bonds. To effect a partial redemption of Bonds having a common maturity date, the Registrar prior to giving notice of redemption shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each Bond of a denomination of more than $5,000 shall be redeemed as shall • equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Registrar (with, if the City or Registrar so requires, a written instrument of transfer in form satisfactory to the City and Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the City shall execute (if necessary) and the Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 6. Bond Registrar. Northland Trust Services, Inc., in Minneapolis, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar "), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 12. 7. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: • 2116597v1 6 UNITED STATES OF AMERICA STATE OF MINNESOTA WASHINGTON COUNTY CITY OF OAK PARK HEIGHTS R- $ GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND, SERIES 2008A Interest Rate Maturity Date Date of Original Issue CUSIP December 15, June 15, 2008 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: THE CITY OF OAK PARK HEIGHTS, Washington County, Minnesota (the "Issuer "), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for prepayment, and to pay interest thereon semiannually on June 15 and December 15 of each year (each, an "Interest Payment Date "), commencing December 15, 2008, at the rate per annum specified above 41) (calculated on the basis of a 360 -day year of twelve 30 -day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of Northland Trust Services, Inc., in Minneapolis, Minnesota (the "Bond Registrar "), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the first day of the calendar month of such Interest Payment Date (the "Regular Record Date "). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be a able to the person who is the Holder hereof at the close of business on a date (the p Y p ( "Special Record Date ") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. So long as this Bond is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of principal of, premium, if any, and interest on this Bond and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution. Until termination of the book - entry only system pursuant to the Resolution, Bonds may only be registered in the name of the Depository or its Nominee. 2116597v1 7 • Optional Redemption. The Bonds of this issue (the "Bonds ") maturing on December 15, 2017, and thereafter, are subject to redemption and prepayment at the option of the Issuer on December 15, 2016, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and the principal amounts within each maturity to be redeemed shall be determined by the Issuer; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected Holder of the Bonds prior to the date fixed for redemption. Selection of Bonds for Redemption; Partial Redemption. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form • satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $6,300,000, all of like date of original issue and tenor, except as to number, maturity, interest rate and denomination, issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council of the Issuer on May 27, 2008 (the "Resolution "), to finance the rehabilitation and/or replacement of the city hall facilities, including the police department and public works areas, as provided in Y � g P p p P the 2008 through 2012 Five -Year Capital Improvement Plan for City of Oak Park Heights, Minnesota. This Bond is payable out of the General Obligation Capital Improvement Plan Bonds, Series 2008A Fund of the Issuer. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable solely in fully registered form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully 40 registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations 2116597v1 8 provided in the Resolution. Reference is hereby made to the Resolution for a description of the • rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by the Holder's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized Denomination or Denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum p g Y q p Y sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Owners. Bond Registrar may treat the Treatment of Registered Owne s. The Issuer and B n g y person in p whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided herein with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. • Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Qualified Tax - Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax - exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Oak Park Heights, Washington County, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Administrator, the corporate seal of the Issuer having been intentionally omitted as permitted by law. 2116597v1 9 Date of Registration: Registrable by: NORTHLAND SERVICES, INC. Payable at: NORTHLAND TRUST SERVICES, INC. CITY OF OAK PARK HEIGHTS, WASHINGTON COUNTY, MINNESOTA BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION /s/ Facsimile This Bond is one of the Bonds Mayor described in the Resolution mentioned within. Northland Trust Services, Inc. /s/ Facsimile Minneapolis, Minnesota, Administrator Bond Registrar By Authorized Signature • • 2116597v1 10 ABBREVIATIONS • The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cult) (Minor) under the Uniform Transfers to Minors Act (State) 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 does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. p g � p p Dated: • Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad- 15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 2116597v1 11 1 • PREPAYMENT SCHEDULE This Bond has been art re aid in on the date(s) s and in the amount(s) as follows: P P part AUTHORIZED SIGNATURE DATE AMOUNT OF HOLDER • 2116597v1 12 8. Execution; Temporary Bonds. The Bonds shall be in typewritten form, shall be executed on behalf of the City by the signatures of its Mayor and Administrator and be sealed with the seal of the City; provided, as permitted by law, both signatures may be photocopied facsimiles and the corporate seal has been omitted. In the event of disability or resignation or other absence of either officer, the Bonds may be signed by the manual or facsimile signature of the officer who may act on behalf of the absent or disabled officer. In case either officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, the signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. 9. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on the Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and, by inserting as the date of registration in the space provided, the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, which date is June 15, 2008. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 10. Registration; Transfer; Exchange. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder, Bonds may be exchanged for Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the Holder making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the City. 2116597v1 13 J � All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general • obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or the Holder's attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. The Administrator is hereby authorized to negotiate and execute the terms of said agreement. 11. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 12. Interest Payment; Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder ") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the first day of the calendar month of such Interest Payment Date (the "Regular Record Date "). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date ") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten days prior to the Special Record Date. 13. Treatment of Registered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of the Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 12) on, the Bond and for all other purposes whatsoever whether or not the Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Administrator to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Capital Improvement Plan Bonds, Series 2008A Fund" (the "Fund ") to be ID administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall 2116597v1 14 be maintained in the manner herein specified until all of the Bonds and the interest thereon have • been fully paid. There shall be maintained in the Fund the following separate accounts: (a) Construction Account. To the Construction Account there shall be credited the proceeds of the sale of the Bonds, less accrued and capitalized interest. From the Construction Account there shall be paid all costs and expenses of financing the Project listed in paragraph 16, including the cost of any construction contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Moneys in the Construction Account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bonds may also be used to the extent necessary to pay interest on the Bonds due prior to the anticipated date of commencement of the collection of taxes herein levied or covenanted to be levied; and provided further that if upon completion of the Project there shall remain any unexpended balance in the Construction Account, the balance shall be transferred by the City Council to the Debt Service Account. (b) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (i) accrued interest received upon delivery of the Bonds; (ii) capitalized interest in the amount of $ (together with interest earnings thereon and subject to such other adjustments as are appropriate to provide sufficient funds to pay interest due on the Bonds on or before ); (iii) all collections of taxes herein or hereafter levied for the payment of the Bonds; (iv) all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (v) all investment earnings on funds held in the Debt Service Account; and (vii) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Construction Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under then applicable 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 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code "). • 16. Tax Levy; Coverage Test. To provide moneys for payment of the principal and interest on the Bonds there is hereby levied upon all of the taxable property in the City a direct 2116597v1 15 , annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Levy Years Collection Years Amount 2008 -2027 2009 -2028 See Attached Schedule The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levies shall be irrepealable so long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 17. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full, provided that notice of redemption thereof has been duly given. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and /or reinvestment, to pay all amounts to become due thereon to maturity. 18. Compliance With Reimbursement Bond Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1 .150 -2 (the "Reimbursement Regulations ") applicable to the "reimbursement proceeds" of the Bonds, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure "). The City hereby certifies and /or covenants as follows: (a) Not later than 60 days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration ") which effectively (i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional alp description of the property, project or program to which the Declaration relates and for which the 2116597v1 16 Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the • general functional purpose thereof from which the Reimbursement Expenditure was to be g p� paid p p (collectively the "Project "); and (iii) states the maximum principal amount of debt expected to be issued by the City for the purpose of financing the Project; provided, however, that no such Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed twenty percent of the "issue price" of the Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of $100,000 or five percent of the proceeds of the Bonds. (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Bonds or any of the other types of expenditures described in Section 1.150- 2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Bonds and in all events within the period ending on the date which is the later of three years after payment of the Reimbursement Expenditure or one year after the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30 fp days after the Bonds are issued, shall be treated as made on the day the Bonds are issued. Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph upon receipt of an opinion of its Bond Counsel for the Bonds stating in effect that such action will not impair the tax - exempt status of the Bonds. 19. General Obligation Pledge. 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 hereby irrevocably pledged. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds 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 Debt Service Account when a sufficient balance is available therein. 20. Continuing Disclosure. The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2 -12 (the "Rule "), promulgated by the Securities and Exchange Commission (the "Commission ") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking ") hereinafter described to: (a) to provide or cause to be provided, (i) (a) upon request to any person, or (b) upon establishment of a state information depository ( "SID "), to the SID, its audited financial statements for the most recent fiscal year, and (ii) to each nationally recognized municipal securities information repository or to the Municipal Securities Rulemaking Board and the SID, 2116597v1 17 s9 �i • if any, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking; and (b) its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holders; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Administrator, or any other officer of the City authorized to act in their place are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Mayor and Administrator. 21. Certificate of Registration. The Administrator is hereby directed to file a certified copy of this resolution with the County Auditor of Washington County, Minnesota, together with such other information as the County Auditor shall require, and to obtain from the County Auditor the certificate that the Bonds have been entered in the County Auditor's Bond Register and that the tax levy required by law has been made. 22. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings an d records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 23. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or to use 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 Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 24. Tax- Exempt Status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (a) requirements relating to temporary periods for investments, (b) limitations on amounts invested at a yield greater than the yield on the Bonds, and (c) the rebate of excess investment earnings to the United States. The City expects to satisfy the eighteen month expenditure exemption for gross proceeds of the Bonds as provided in Section 1.148- 7(d)(1) of the Regulations. If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Bonds, the Mayor, the City Administrator, or either of them, are hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable 2116597v1 18 g in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, • elections of the City. 25. Designation of Qualified Tax - Exempt Obligations. In order to qualify the Bonds as "qualified tax - exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax - exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2008 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may • apply in order to effectuate the designation made by this paragraph. 26. Payment of Issuance Expenses. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to the Bond Registrar on the closing date for further distribution as directed by the Purchaser. 27. 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. 28. 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. The motion for the adoption of the foregoing resolution was duly seconded by member and, after a full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon the resolution was declared duly passed and adopted. • 2116597v1 19 STATE OF MINNESOTA • COUNTY OF WASHINGTON I I CITY OF OAK PARK HEIGHTS I, the undersigned, being the duly qualified and acting Administrator of the City of Oak Park Heights, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council, duly called and P A g Y held on the date therein indicated, insofar as such minutes relate to authorizing the issuance and awarding the sale of $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2008A. WITNESS my hand on May 27, 2008. Administrator 41) • 2116597v1 20 Page 1 of 2 Eric Johnson From: Obidowski, Linda [LObidowski @Briggs.com] Sent: Tuesday, May 27, 2008 2:13 PM To: Eric Johnson Cc: smattson @northlandsecurities.com; Boulton, Jennifer Subject: FW: Synopsis of Council Actions and Title of Resolution Hi Eric, Here's a short synopsis of the actions previously taken by the Council at the 5/13 meeting and to be taken tonight as they relate to the Capital Improvement Plan Bonds: Council action taken May 13, 2008, adoption of Resolution No. 08- 05 -19: authorized construction of a new City Hall Facility and resolved to issue capital improvement plan bonds which will cover the financing costs related thereto. Council action requested for May 27: Bond Counsel requires adoption of Final Resolution • which sets forth the terms of the capital improvement plan bonds which were authorized on May 13, 2008, including the purchase of the bonds by Northland Securities, final interest rates, redemption provisions, maturity amounts and finalizing the tax levy for the repayment of the bonds. Here's the title of the Final Resolution (that document will be sent separately from this e- mail and will have many blanks but those blanks will be completed by Northland this afternoon yet and Steve will bring a completed copy to the meeting this evening): FINAL RESOLUTION PROVIDING FOR THE SALE OF $6,300,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2008A AND SETTING FINAL INTEREST RATES, REDEMPTION PROVISIONS AND TAX LEVY FOR THE PAYMENT THEREOF PURSUANT TO RESOLUTION NO. 08-05-19 WHICH AUTHORIZED THE ISSUANCE OF THE BONDS Give a call if you need anything further prior to the meeting. Thanks. Linda Obidowski, Paralegal • 5/27/2008 Page 2 of 2 411 Ern Direct 651.808.6461 Fax 651.808.6450 lobdowski @briggs.com W2200 First National Bank Building 332 Minnesota Street, St. Paul, MN 55101 CONFIDENTIALITY NOTICE: The information contained in this e-mail communication and any attached documentation may be privileged, confidential or otherwise protected from disclosure and is intended only for the use of the designated recipient(s). It is not intended for transmission to, or receipt by, any unauthorized person. The use, distribution, transmittal or re- transmittal by an unintended recipient of this communication is strictly prohibited without our express approval in writing or by e-mail. If you are not the intended recipient of this e-mail, please delete it from your system without copying it and notify the above sender so that our e-mail address may be corrected. Receipt by anyone other than the intended recipient is not a waiver of any attorney - client or work - product privilege. This email has been scanned for all viruses by the MessageLabs SkyScan service. (http: / /www.messagelabs.com) • 5/27/2008 - Eric Johnson From: Judy Holst ent: Friday, May 23, 2008 9 :16 AM Eric Johnson Subject: FW: Oak Park Heights (City of) MN- Moody's rating Original Message From: GID - Moody's Investors Service [mailto:epi @moodys.com] Sent: Thursday, May 22, 2008 4:57 PM To: Judy Holst Subject: Oak Park Heights (City of) MN MOODY'S ASSIGNS INITIAL A2 RATING TO THE CITY OF OAK PARK HEIGHT'S (MN) $6.3 MILLION GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2008A NEW YORK, May 22, 2008 -- Moody's Investors Service has assigned an initial A2 rating to the City of Oak Park Height's (MN) $6.3 million General Obligation Capital Improvement Plan Bonds, Series 2008A. Secured by the city's general obligation unlimited tax pledge, bond proceeds will support construction of a new joint city hall and public works facility. The A2 rating is based on the city's growing tax base dominated by Xcel Power; strong financial management supported by healthy reserves; and below average debt burden limited future borrowing planned. SOUND FINANCIAL OPERATIONS EVIDENCED BY HEALTHY RESERVE LEVELS illi ody's expects the city's financial position to remain sound due to monstrated prudent management evidenced by sizable and stable reserves. ollowing five consecutive years of posting operating surpluses, the city recorded a surplus of approximately $200,000 in fiscal 2007, increasing the General Fund balance to $2.5 million, or 73.6% of General Fund revenues. The city's reserve policy is particularly strong, requiring maintenance of 50% of the following fiscal year's tax levy for cash flow needs. In addition the city also sets aside an amount equal to 15% of budgeted expenditures as a general contingency for unanticipated expenditures. Adherence to these policies has resulted in the city maintaining reserves historically well exceeding 50% of General Fund revenues. Given that over 77% of revenues are generated from local property taxes, the city has virtually no dependence on state local government aid. A certain measure of flexibility in the General Fund exists as several city services could be funded with a charge for service rather than through the General Fund levy. Moody's anticipates the city's strong financial position will be maintained based on the city's conservative budgeting practices and history of prudent fiscal management. GROWING TAX BASE DOMINATED BY XCEL ENERGY Located 20 miles west of St. Paul (general obligation rated Aa2) the city sits along the St. Croix river, south of Stillwater (rated Aa3). The city's tax base, currently valued at $727 million, has grown an average of 8.8% annually over the past five years. Recent growth is primarily attributed to new commercial development along highway 36. The city's largest taxpayer, Xcel P 9 g Y Y g Energy (senior unsecured rated Baal) accounts for a substantial 32.2% of Net Tax Capacity. Xcel recently completed a $40 million expansion at the Oak Park Heights plant, and according to city officials has invested approximately $300 million over the past several years associated with the Metropolitan Emissions uction Program. Favorably, the coal fired generating power plant has reased over time as a percentage of the city's valuation (down from 50% in 1998), however Moody's believes this concentration poses vulnerabilities, given the city's heavy reliance on property taxes, which comprise over 77% of 1 operating revenue. Wealth indices are relatively aligned with state averages with median family income and per capita income averaging 122.2% and 100.4% of state values. Washington County's unemployment rate (4.7% in March 2008) is typically slightly below state levels (5.4% for the same time period). Moody's ects the city's tax base will continue to experience moderate growth due to proximity to the Twin Cities and ongoing commercial and residential development. BELOW AVERAGE DEBT BURDEN WITH NO FUTURE BORROWING PLANNED Moody's expects the city's below average 2.2% debt burden (0.9% direct) to remain manageable due to future tax base growth and the absence of any planned future borrowing. Principal amortization is below average, with 26.8% of all general obligation debt retired within ten years. As this will be the city's only outstanding general obligation debt, the 2008A bonds will be supported by a new debt service levy which is structured to maintain a level tax rate throughout the life of the bonds. Officials report there are no plans to issue additional debt over the near to mid -term. KEY STATISTICS 2007 Population (Estimate): 4,676 2007 Full Value: $727 million 2007 Full Value per Capita: $155,488 Top ten largest taxpayers as a % of net tax capacity: 54.6% (Xcel Energy 32.2 %) Direct Debt: 0.9% Overlapping Debt: 2.2% g out (10 Years): 26.8% Fiscal 2007 General Fund Balance: $2.5 million (73.6% of revenues) Washington County's Unemployment Rate (March 2008): 4.7% 2000 Per Capita Income as a % of State: 100.1% (107.9% of US) 2000 Median Family Income as a % of State: 122.2% (138.8% of US) Post -sale general obligation debt: $6.3 million ANALYSTS: Molly Shellhorn, Analyst, Public Finance Group, Moody's Investors Service Rachel Cortez, Backup Analyst, Public Finance Group, Moody's Investors Service CONTACTS: Journalists: (212) 553 -0376 Research Clients: (212) 553 -1653 Copyright 2008, Moody's Investors Service, Inc. and/or its licensors and affiliates including Moody's Assurance Company, Inc. (together, "MOODY'S "). 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You should, before acting on the opinion, consider the appropriateness of the opinion having regard to your own objectives, financial situation and. needs. 1 3 • RESOLUTION 08 - 05 - 19 A RESOLUTION AUTHORIZING THE CONSTRUCTION OF A NEW CITY HALL FACILITY Whereas, the City of Oak Park Heights currently conducts the majority of its municipal operations from the City Hall Facility (hereafter referred to as the "Facility ") located at 14168 Oak Park Blvd and which houses general administrative operations, finance, public meeting space, all law enforcement operations and significant public works activities, and; Whereas, part of the current Facility was initially constructed in 1968 with additions in 1980, and 1989, bringing the current Facility to 15,000 + /- square feet, and; Whereas, considering the age and configuration of the Facility, the City will be required invest significant funds to maintain the current Facility for continued use, including t of HVAC systems, roof replacements, ADA compliance re lacernen o liance initiatives and other p p Y P code compliance improvements, and; Whereas, the City Council has invested considerable time and resources in the discussion and investigation of numerous options for possible replacement and/or renovation of the Facility, including the formation of a Citizen's Advisory Committee to study the options in more detail; and, • Whereas the City of has received the Final Report from the Citizen's Advisory Committee that recommended the construction of a new facility as opposed to a major renovation or a facility expansion as the investment of significant dollars to expand the current Facility and to ensure significant code compliance, future spacing needs and efficient operability is not an economical long -term investment as compared to construction of a new building, and; Whereas, market conditions are opportune for the advancement of a new facility, with historic lows for bond interest rates, the City maintaining maintainin no current debt service and that t he current e commercial- residential make -u p of the City's tax base would fairly balance debt service revenues sources, and; Whereas, if the City proceeded with a $6.3 million project, it is estimated that single- t of approximately t 0 0 would incur a tax im ac o valued at 20 00 family residential property val $ p pp Y $77.86 per year based on a twenty -year bond repayment schedule as attached and incorporated into this Resolution. e NOW, THEREFORE, BE IT RESOLVED that the City Council for the City of Oak Park Heights does hereby deem that it is necessary and vital for the future operations and services to the City's residents that it construct a new City Hall Facility estimated at $6.3 million dollars and that this option will provide the most • cost - effective investment for the City for both useable square footage and long -term durability. BE IT FURTHER RESOLVED that the City Council does direct the preparation and immediate issuance of up to $6.3 million in General Obligation Capital Improvement Bonds necessary to fully fund a new City Hall Facility and in such increments that best preserve financial flexibility for the City, and BE IT FURTHER RESOLVED that the City Council does hereby direct that The City shall enter into a contract as prepared by the City Attorney's office with Buetow and Associates to prepare schematic designs and provide design development services for a new City Hall Facility at a price not exceed $160,000.00. P tY h' P BE IT FURTHER RESOLVED that the City shall enter into a contract as prepared by the City Attorney's office with Buetow and Associates to oversee and manage all aspects of the project including but not limited to, providing final design, providing construction specifications and documents, prepare final bid forms, analyze and direct contract award, providing subsequent construction oversight to include at a minimum, weekly site visits and progress reports and satisfactory close -out of the project, all at a price not to exceed 9 % of the final awarded base bid and all approved alternates. The amounts due under this percentage shall be reduced for amounts already paid for schematic designs and design development services. • 13 Passed by the City Council of the City of Oak Park Heights this 13 day of Ma 2008. 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N N C N N f°V t°i fV g N N RESOLUTION 07 A Resolution Approving the Capital Improvement Plan Documents Related To and Necessary For the Future Issuance of Capital Improvement Bonds as Permitted Under MN STAT. 475.521, to Fund Proposed Improvements or Replacement of the Current City Hall Facility. Whereas, the City of Oak Park Heights currently coordinates the majority of its municipal operations from the City Hall Facility (hereafter referred to as the "Facility ") located at 14168 Oak Park Blvd and which houses general administrative operations and public meeting space, all law enforcement operations and significant public works activities, and; Whereas, part of the current Facility was initially constructed in 1968 with additions in 1980, and 1989, bringing the current Facility to 15,000 + /- square feet, and; Whereas, considering the age and configuration of the Facility, the City will soon be required invest significant funds to maintain the current Facility, including replacement of HVAC systems, roof replacements, ADA compliance initiative and other code compliance improvements, and; Whereas, the investment of significant dollars to bring the aged Facility into significant code compliance and efficient operability may not an be an economical long -term investment as compared to a major renovation or the construction of a new building, and; • Whereas, the City Council has invested considerable time and dollars in the discussion and investigation of numerous options for possible replacement and /or renovation of the Facility, including but not limited to the following: • Dec 12 2006, At CC Meeting: `Discussion of Break Room Improvements' • Jan 23 2007 At CC Meeting: `Planning for City Hall's Future' - Issue Study. RFPs - City Hall Facilities Space Needs and Facilities Study. • Feb 6 2007 City Council Worksession: - Narrow Down RFP Submissions for City Hall's Future. • Feb 6 2007 At CC Meeting: `City Hall Improvements' - Request RFP Respondents to Submit Additional Information. • Feb 27 2007 At CC Meeting: `City Hall Improvements' - Award RFP to Buetow and Associates for $9,600 to review current Facility and provide cost estimates for rehab /expansion or a new building. • May 22"`', 2007 At CC Meeting: `City Hall Facilities Needs and Assessment Report' - Current Facilities Report given by Randy Engel of Buetow & Assoc. • City's Municipal Facility was discussed as part of the City's 2008 Budget Discussions • Aug 28 2007 At CC Meeting: `Accept Final Report from Buetow and Associates' Approving a resolution concluding and accepting the initial RFP study for Space Needs and Facilities Use Study. • Sep 12 2007 City Council Work session - City Hall Facility Space Needs and 2008 Budget' - Additional layout options were examined with the • Architect and cost estimates reviewed. Additional discussion was held with Steve 110 • Mattson of Northland Securities about timing of possible bond financing. Sep 12 2007 At CC Meeting: `New Building Update' — City Council set the necessary public hearing date as part of the legal requirements for possible bonding — Date set for October 23, 2007. • Sept, 2007 City published the Fall 2007 Newsletter with a full — discussion of the Facility issues. This notice also referenced the City's website where the public hearing information was placed and building site renderings. • Sep 25 2007 At CC Meeting: `City Hall Facility' — City Administrator reported that the Architect may provide more detailed plans of layouts at $4,200 per option, Council approved up to $10,000 for additional layout refinement. • Oct 9 2007 `City Council Work session' — City Hall Facility discussion — refinement of possible building options and discussion of financing. • Oct 9 2007 At CC Meeting: `City Hall Facility' --- City Council directed staff to have the Architect provide additional refinements with certain criteria and which will be ultimately presented at the Public Hearing on Oct 23 2007 • Oct 23 2007 At CC Meeting: `City Hall Facility' -City Council Held a Public Hearing on the issuance of up to $7.5 Million Capital Improvement Bonds and the update to the CIP — necessary to fund a new Municipal Facility or a Rehabilitated and Expanded Facility. City Council continued the public hearing to Nov 7`'', 2007 and mailed out Public Hearing notice cards to all residents. • Nov 7 2007 At CC Meeting: `City Hall Facility' - Following additional direct public notice to City residents, the City Council continued the public hearing as initiated on October 23 2007 in an effort to encourage additional public input, and; • Whereas, the City has not received material adverse public comment on the proposed improvement options. Now, Therefore, Be It Resolved that the City has determined that there is a need to address the long -term condition of the City Hall Facility and does hereby adopt the Five - Year Capital Improvement Plan (Attached as `Exhibit A') being necessary for the issuance of Capital Improvement Bonds up to $7,500,000 to fund a possible renovation or replacement of the current City Hall Facility. Passed by the City Council of the City of Oak Park Heights this 7th day of November, 2007. "111111C `1 , i i ill ii fie /-A- 4 4A 7 vid Beaudet, Mayor Attes i , / 1 Z---°" ----------- - J ; J nson, City Administrator • t 'Exhibit A' As Attached to Resolution 07 1 - 6 2 2008 through 2012 Capital Improvement Plan 10/16/07 City Hall Facility • • • 2008 throngh 2012 Five -Year Capital Improvement Plan for City of Oak Park Heights, Minnesota 10/16/07 • Prepared by: Erie Johnson, City Administrator City of Oak Park Heights, MN • • Table of Contents L Introduction 2 II. Purpose — 2 III. The Capital Improvement Planning Process 3 1V. Project Summary 4 V. Financing the Capital Improvement Plan. 5 Project Costs Appendix A Proposed CIP Bond Issue Appendix 13 Pre -Sale Schedule. Appendix C • • CITY OF OAK PARK HEIGHTS FIVE-YEAR -YEAR CAPITAL IMPROVEMENT PLAN 2008 THROUGH 2012 1. INTRODUCTION In 2003, the Minnesota State Legislature adopted a statute that generally exempts City bonds issued under a capital improvement program from the referendum requirements usually required for city halls, town halls, public works, libraries and public safety facilities. II. PURPOSE A capital improvement is a major expenditure of City funds for the acquisition or betterment to public lands, buildings, or other improvements used as a City Hall, town hall, public safety, or public works facility, which has a useful live of five years or more. • For the purposes of Minnesota Statutes, Section 475.521, capital improvements do not include light rail transit or related activities, parks, road /bridges, administrative buildings other than City Hall or town hall or land for those facilities. A Capital Improvement Plan (CIP) is a docuinent designed to anticipate capital improvement expenditures and schedule them over a five -year period so that they may be purchased in the most efficient and cost effective method possible. A CIP allows the matching of expenditures with anticipated income. As potential expenditures are reviewed, the City considers the benefits, costs, alternatives and impact on operating expenditures. The City of Oak Park Heights, Minnesota (the "City ") believes the capital improvement process is an important element of responsible fiscal management. Major capital expenditures can be anticipated and coordinated so as to minimize potentially adverse financial impacts caused by the timing and magnitude of capital outlays. This coordination of capital expenditures is important to the City in achieving its goals of adequate physical assets and sound fiscal management. In these financially difficult times, good planning is essential for the wise use of limited financial resources. The CIP is designed to be updated on an annual basis. In this manner, it becomes an ongoing fiscal planning tool that continually anticipates future capital expenditures and funding sources. • III. TI - -IE CAPITAL IMPROVEMENT PLANNING PROCESS The capital improvement planning process is as follows: the City Council authorizes the preparation of the CIP. City staff is instructed to assemble the capital expenditures to be undertaken within the next five years. The City Council then reviews the expenditures according to their priority, fiscal impact, and available funding. From this information, a preliminary capital improvement plan is prepared. Changes are made based on that input and a final project list is established. The City Council then prepares a plan based on the available funding sources. If general obligation bonding is necessary, the City works with its financial advisor to prepare a bond sale and repayment schedule. Over the life of the CIP, once the funding, including proceeds from the bond sales becomes available; the individual capital expenditures can be made. In subsequent years, the process is repeated as expenditures are completed and new needs arise. Capital improvement planning looks five years into the future. For a City to use its authority to finance expenditures under Section 475.521, it must meet the requirements provided therein. Specifically, the City Council tnust approve the sale of capital improvement bonds by a three -fifth majority of its membership. In addition, it must hold a public hearing for public input. Notice of such hearing must be published in the official newspaper of the City at least fourteen, but not more than twenty -eight days prior to the date of the public hearing. The City Council approves the CIP following the public hearing. Although a referendum is not required, a reverse referendum is allowable. If a petition bearing the signatures of at least five percent of the votes cast in the last general election requesting a vote on the issuance of bonds is received by the municipal clerk within thirty days after the public hearing, a referendum vote on the issuance of the bonds shall be called (if a vote is taken and the referendum passes, the taxes would be levied on market value rather than tax capacity). • • T.V. PROJECT SUMMARY The expenditures to be undertaken with this C1P are limited to those listed below. All other foreseeable capital expenditures within the City government will come through other means. The following expenditures have been submitted for inclusion in this CIP: Rehabilitation and /or Replacement of the City Hall Facility, including the Police Department and Public Works Areas There are not other projects constituting a capital improvement within the tneaning of Minnesota Statutes Section 475.521 contemplated at this time. To be undertaken within the next 5 years. The statute has established certain criteria that must be met, Under these criteria, the City has considered the following eight points: 1. Condition of the City's infrastructure and need for the project. 2. Demand for the improvement. 3. Cost of the improvement. 4. Availability of public resources. 5. Level of overlapping debt. 6. Cost/benefits of alternative uses of funds. 7. Operating costs of the proposed improvements. • 8. Options for shared facilities with other cities or local governments. The CIP is composed of projects that will allow the City's departments more space in an expanded area. The City has analyzed the eight points required per statute for each project on an individual basis and as a whole. Their findings are as follows: PROJECT: Rehabilitation and /or Replacement of the City Hall Facility Conditions of City Infrastructure and Need for the Project The current City Hall Facility, hereafter referred to as the "Facility" is in average condition and large approximately 35 years old with major updates in 1980 and 1989 However, due to continued growth in the area, additional space is needed to house personnel, equipment and supplies necessary to continue to provide adequate public services for the next 50 years. (please see Exhibit A) Demand for Project As mentioned above the current Facility does not provide adequate space for personnel, equipment and supplies. Moreover, in the next few years, the current Facility will need major repairs to its roof, HVAC systems, compliance with Americans with Disabilities Act and other improvements to bring the City facilities into compliance with its own zoning codes. • • • Estimated Cost of the Project The project is estimated to cost of the project ranges between $7.5 Million for a new Facility to approximately $L75 million for a rehabilitation and expansion of the Current Facility. Availability of Public Resources The City's portion of the project may be funded by a combination of general property tax levy and available resources on hand. Relative Costs and Benefits of Alternative Uses of the Funds The need for additional space and pending building repairs has been discussed for several years. The space limitations with the current Facility make this project necessary for the City. There are no significant alternatives for funds designated for this project. Operating Costs of the Proposed Improvements A larger Facility will likely require higher maintenance costs, but it is hoped that through the application of LEED certified building elements, these cost differential • will be minimal. The current Facility is not economical nor energy efficient by current standards. Options for Shared Facilities with Other Cities or Local Government The Facility is and will be entirely owned by the City. 411 • Level of Overlapping Debt • • The City does not have any other capital improvement bonds outstanding. Indirect Debt 2006/2007 2006/2007 Tax Tax Capacity Percentage Taxpayers' Capacity Value Applicable Share Issuer Value( in CityW in City Net Debt of Debt Washington County $ 273,358,492 $7,356,523 2.69% $ 54,295,000 $ 1,460,536 ISD No. 834, Stillwater 85,874,241 7,356,523 8.57 65,563,464( 5,618,789 NM1SD No. 916 261,805,893 7,356,523 2.81 12,320,000( 346,192 Metropolitan Council 3,038,442,757 7,356,523 .24 8,673,927( 20,817 Metro Transit 2,583,170,505 7,356,523 .28 122,283,681( 342,394 Net Indirect Debt: 7 7 . $,22$ • • Only those jurisdictions with outstanding bond indebtedness are shown above. ( Tax Capacity Valves are after tax increment, 10% of 200kV transmission line, and fiscal disparity contribution adjustments and before fiscal disparity distribution adjustment. ( Washington County has bond indebtedness of $54,295,000 as of December 31, 2006. ( ISD No. 834, Stillwater, has bond indebtedness of $74,990,000 and sinking funds of $9,426,536 as ofhune 30, 2007. ( Northeast Metro Intermediate School District No. 916, reported bond indebtedness of $12,320,000 as of December 31, 2006. ( Deductions: (A) $882,480,000 Metropolitan Waste Control Commission Debt as of March 15, 2007. Note 1: Debt Service on (A) above is 100% sel f supported from revenues of the Metro Sanitary Sewer System, although the bonds are full faith and credit bonds. Sinking funds of $10,639,920 and escrow funds of $8,016,458 have not been deducted because said funds are attributable to (A) above. Sinking fund /escrow balances are as of December 31, 2006. Note 2: The only tax supported bond indebtedness is $18,775,000 as of March 15, 2007 and sinking funds of $10,101,073 as of December 31, 2006. ( Metro 'transit has bond indebtedness of $162,505,000 as of March 15, 2007 as well as sinking funds of $16,281,784 and escrow funds of $16,629,535 as of December 31, 2006. This debt is issued by the Metropolitan Council for all public transit operations in the transit district, of which Metro Transit is the largest public transit provider, and is payable from ad valorem taxes levied on all taxable property within the Metropolitan Transit District. i V. FINANCING THE CAPITAL IMRPOVEMENT PLAN The total amount of requested expenditures under the CIP is $7,358,000. If these expenditures are to be funded, that amount of money is anticipated to be generated through the tax levy and the sale of $7,500,000 in bonds over the five -year period. In the financing of the CIP, two statutory limitations apply. Under Chapter 475, with few exceptions, cities cannot incur debt in excess of 2% of the assessor's Taxable Market Value (TMV) for the City. In the City, the TMV is $579,089,800. Therefore, the total amount of outstanding debt cannot exceed $11,581,796. As of October 23, 2007, the City had no debt subject to the legal debt limit, Another limitation on bonding under the CIP Statute (475.521) is that without referendum, the total amount of principal and interest in any one year for CIP debt cannot exceed 0.16% of the TMV for the City. Far the City of Oak Park Heights, the amount is $926,544 ($579,089,800 x .0016). The principal and interest payments for the City portion of the debt are estimated to be approximately $657,500 in collection year 2008, gradually increasing to $820,000 in collection year 2022 (this amount takes into account the required 105% debt service coverage for the City's portion of the bonds). ilk Under the CIP, the City will secure $7,500,000 in 20 -year general obligation bonds in the year 2007 to finance the Municipal Government Center, The par amount of the Bond Issue is based on the amounts listed in Appendix A. The City's proposed general obligation capital improvement bonds (including issuance costs) are shown in Appendix B. Continuation of the Capital Improvement Plan This CIP should be reviewed annually by the City Council using the process outlined in this plan. The City Council should review proposed expenditures, make priority decisions and seek funding for those expenditures it deems necessary for the City. If deemed appropriate, the City Council should prepare an update to this plan. • APPENDIX A PROJECT COSTS (Capital Expenditures to be Funded with Bond Proceeds) 2008 Expenditures Estimated Hard Cost of New City Hall Facility $ 7,358,000 Estimated Soft Costs 253,900 Less: Estimated Construction Interest Draw ( 11 I,9001 Total Uses of Funds: ,51a0011 • APPENDIX B PROPOSED CIP BOND ISSUE 2007 General Obliaatioil CII' Issue Net Debt Service Schedule EST. TOTAL (12 -1) INTEREST DEBT YEAR PRINCIPAL RATES INTEREST SERVICE 2007 2008 $340,000.00 3.55% 286,087.50 626,087.50 2009 350,000.00 3.55% 274,017.50 624,017.50 2010 365,000.00 3.55% 261,592.50 626,592.50 2011 385,000.00 3.60% 248,635.00 633,635.00 2012 400,000.00 3.60% 234,775.00 634,775.00 2013 425,000.00 3.60% 220,375.00 645,375.00 2014 440,000.00 3.65% 205,075.00 645,075.00 2015 475,000.00 3.75% 189,015.00 664,015.00 2016 500,000.00 3.80% 171,202.50 671,202.50 2017 540,000.00 3.85% 152,202.50 692,202.50 • 2018 575,000.00 3.90% 131,412.50 706,412.50 2019 615,000.00 3.95% 108,987.50 723,987.50 2020 650,000.00 4,00% 84,695.00 734,695.00 2021 690,000.00 4.05% 58,695.00 748,695.00 2022 750,000.00 4.10% 30,750.00 780,750.00 2023 0.00 0.00% 0.00 0.00 2024 0.00 0.00% 0.00 0.00 2025 0.00 0.00% 0.00 0.00 2026 0.00 0.00% 0.00 0.00 2027 0.00 0.00% 0.00 0.00 7,500,000.00 2,657,5 3 7.50 10,157,517.50 • • APPENDIX C 5 -Year City Capital Improvement Plan Bond Issuance City of Oak Park Weights, Minnesota The City Council must take the following actions before bonds can be issued: • City Council directs preparation of a 5 -year Capital Improvement Plan • City Council conducts a Public Hearing on issuance of bonds and Capital Improvement Plan • City Council approves bonds and Capital Improvement Plan by at least a three - fifths vote of the Council membership The table below lists the steps in issuing process: 9/12/07: City Council adopts Resolution Calling for Public Hearing on Issuance of Bonds and on Capital lmprovement Plan. 9/28/07: Close date to get Notice of Public Hearing on Issuance of Fonds and on Capital lmprovement Plan to official newspaper for publication. 10/4/07: Publish Notice of Public Hearing on Issuance of Bonds and on Capital Improvement Plan (publication no more than 28 days and no less than 14 days prior to hearing date). 10/23/07 @ 7:00 p.m.: City Council holds Public Hearing on Bonds and on Capital Improvement Plan and adopts resolution giving preliminary approval for their issuance and • approving Capital Improvement Plan by at least a three -fifths vote of the Council membership. 11/22/07: Reverse referendum period ends (within 30 days of the public hearing). 12/10/07: City Council accepts offer for bonds and adopts resolution approving sale of bonds. 1/8/08: Tentative closing /receipt of funds. Net Debt Limit Assessor's Taxable Market Value $ 579,089,800 Multiply by 2% 0.02 Statutory Debt Limit 11,581,796 Less Debt Paid Solely from Taxes 0 Unused Debt Limit $ 11,581,796 Annual Levy Limit per County Value Assessor's Taxable Market Value $ 579,089,800 Multiply by .16% 0.0016 Statutory Levy Limit 926,544 Less City Debt Issued under CIP 0 Unused Levy Limit $ 926,544 1 • RESOLUTION 07- -11 -63 RESOLUTION GIVING PRELIMINARY APPROVAL FOR THE ISSUANCE OF GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS IN AN AMOUNT NOT TO EXCEED $7,500,000 FOR PURPOSES STATED IN THE ADOPTED , 2008 -201.2 ANTICIPATED FIVE - YEAR CAPITAL IMPROVEMENT PLAN AS ADOPTED ON NOVEMBER 7 2007. WHEREAS, the City Council of the City of Oak Park Heights, Minnesota (the "City ") proposes to issue general obligation capital improvement plan bonds (the "Bonds ") and has adopted the City of Oak Park Heights, Minnesota, 2008 -2012 Anticipated Five -Year Capital Improvement Plan (the "Plan ") on November 7 2007; and WHEREAS, the City has caused notice of the public hearing on the intention to issue the Bonds and on the adoption of the Plan to be published pursuant to and in accordance with Minnesota Statutes, Section 475.521; and WHEREAS, a public hearing on the intention to issue the Bonds and on the Plan has been held on this October 23 2007 and continued to November 7 2007, following • published notice of the public hearing as required by law; and WHEREAS, in approving the Plan, th City Council considered for each project and pp g Y p J for the overall Plan: � infrastructure, r 1. The condition of the City's existing infrastructure, including the projected need for repair and replacement; 2. The likely demand for the improvement; 3. The estimated cost of the improvement; 4. The available public resources; 5. The level of overlapping debt in the City; 6. The relative benefits and costs of alternative uses of the funds; 7. Operating costs of the proposed improvements; and 8. Alternatives for providing services more efficiently through shared facilities with other local governmental ocal ov rnm ntal units• and g WHEREAS, the City Council has determined that the issuance of general obligation capital improvement plan bonds in the aggregate principal amount not to exceed • • $7,500,000 is the best way to finance those portions of Plan eligible under Minnesota Statutes, Section 475.521. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Oak Park Heights, Minnesota, that the City hereby authorizes its bond counsel to prepare paperwork and obtain a credit rating for the City Council to review, facilitating the future issuance of up to $7,500,000 aggregate principal amount of general obligation capital improvement plan bonds and is consistent with the Plan. Passed by the City Council for the City of Oa . rte. ' • is this 27 d of November, 407. . / )/ D' TBeaudet, Mayor ri Johnson, City Administrator • . • 2