89-135 A
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Extract of Minutes of Meeting
of the City Council of the City of
Chanhassen, Carver and Hennepin Counties, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City
Council of the City of Chanhassen, Minnesota, was duly held in the City Hall in
said City on Monday, December 4, 1989, commencing at 7:30 P.M.
The following members were present:
& Mayor D. Chmiel
U. Dimler, J. Johnson, T. Workman
and the following were absent:
W. Boyt
* * *
* * *
* * *
The Mayor announced that the next order of business was consideration of
e the bids which had been received for the purchase of the City's $6,650,000
General Obligation Improvement Bonds Series 1989A, as advertised for sale. The
City Manager presented affidavits showing publication of the notice of sale in
the City's official newspaper and in Northwestern Financial Review, a financial
paper published in Minneapolis, Minnesota, which affidavits were examined and
found satisfactory and ordered placed on file.
The City Manager presented a tabulation of the bids which had been received
in the manner specified in the Official Terms of Offering of the Bonds. The
bids were as follows:
See Attached
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.
.~~~
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SPRINGSTED
PUBLIC FINANCE ADVISORS
85 East Seventh. Place. Suite 100
Saint Paul, MN 55101.2143
612-223.3000
Fax: 612.223.3002
$6,650,000
CITY OF CHANHASSEN, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1989A
FIRST BANK NATIONAL ASSOCIATION
NORWEST INVESTMENT SERVICES, INCORPORATED
MERRILL LYNCH CAPITAL MARKETS
AMERICAN NATIONAL BANK SAINT PAUL
CRONIN & COMPANY, INCORPORATED
MILLER & SCHROEDER FINANCIAL, INCORPORATED
And Associates
. In Association With.
DAIN BOSWORTH INCORPORATED
PIPER, JAFFRAY & HOPWOOD INCORPORATED
ALUSON.WILUAMS COMPANY
MILLER, JOHNSON & KUEHN, INC.
AWARD:
e SALE:
December 4, 1989
FGIC Insured
Moody's Rating: Aaa
Standard & Poor's Rating: AAA
Bidder
Price
Interest
Rates
Net Interest
Cost & Rate
FIRST BANK NATIONAL ASSOCIATION
NORWEST INVESTMENT SERVICES,
INCORPORATED
MERRILL LYNCH CAPITAL MARKETS
AMERICAN NATIONAL BANK SAINT PAUL
CRONIN & COMPANY, INCORPORATED
MILLER & SCHROEDER FINANCIAL,
INCORPORATED
Marquette Bank Minneapolis, N.A.
Moore, Juran and Company, Incorporated
. In Association With -
DAIN BOSWORTH INCORPORATED
PIPER, JAFFRA Y & HOPWOOD
INCORPORATED
ALLlSON.WllLlAMS COMPANY
MILLER, JOHNSON & KUEHN, INC.
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Indiana Office:
135 North Pennsylvania Street
Suite 2015
Indianapolis. IN 46204.2498
317.684.6000
Fax: 317.684.6004
$6,583,500.00
$3,513,291.67
(6.3868%)
5.85% 1992
5.90% 1993
5.95% 1994
6.00% 1995
6.05% 1996
6.10% 1997
6.20% 1998
6.25% 1999
6.30% 2000
6.40% 2001
6.50% 2002
(Continued)
Kansas Office:
6800 College Boulevard
Suite 600
Overland Park. KS 66211.1533
913.345.8062
Fax: 913.345.1770
Wisconsin Office:
500 Elm Grove Road
Suite 101
Elm Grove. WI 53122.0037
414.782.8222
Fax: 414.782.2904
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After due consideration of the bids, Member
Workman
then
introduced the following written resolution and moved its adoption:
RESOLUTION NO. 89-l35A
A RESOLUTION AWARDING THE SALE OF $6,650,000
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1989A;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council of the City of Chanhassen, Carver and
Hennepin Counties, Minnesota (City) as follows:
Section 1. Sale of Bonds.
1.01. The bid of FBS Investment Services, Inc. (Purchaser) to
purchase $6,650,000 General Obligation Improvement Bonds, Series 19B9A (Bonds)
of the City described in the Official Terms of Offering thereof is hereby found
and determined to be the highest and best bid received pursuant to duly
advertised notice of sale and shall be and is hereby accepted, the bid being to
purchase the Bonds at a price of $ 6,583,500.00 plus accrued interest to date of
delivery, for Bonds bearing interest as follows:
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Year of Maturity Interest Rate Year of Maturity Interest Rate
1992 5.85% 1997 6.10%
1993 5.90% 1998 6.20%
1994 5.95% 1999 6.25%
1995 6.00% 2000 6.30%
1996 6.05% 2001 6.40%
2002 6.50%
Net effective interest rate: 6.3868%
1.02. The sum of $ 19.950 being the amount bid by the Purchaser in
excess of $6,563,550 will be credited to the Debt Service Fund hereinafter
created. The City Treasurer is directed to retain the good faith check of the
Purchaser, pending completion of the sale of the Bonds, and to return the good
faith checks of the unsuccessful bidders forthwith. The Mayor and City Manager
are directed to execute a contract with the Purchaser on behalf of the City.
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1. 03 . The City will f orthwi th issue and sell the Bonds in the total
principal amount of $6,650,000, originally dated December 1, 1989, in the
denomination of $5,000 each or any integral multiple thereof, numbered No. R-1,
upward, bearing interest as above set forth, and which mature serially on
February 1 in the years and amounts as follows:
~ q
e Year Amount Year Amount
1992 $300,000 1998 $750,000
1993 300,000 1999 825,000
1994 300,000 2000 875,000
1995 300,000 2001 925,000
1996 675,000 2002 700,000
1997 700,000
1.04. Optional Redemption. The City may elect on February 1, 1995 and on
any date thereafter to prepay Bonds maturing on or after February 1, 1996.
Redemption may be in whole or in part of the Bonds subject to prepayment. If
redemption is in part, those Bonds remaining unpaid which have the latest
maturity date will be prepaid first. If only part of the Bonds having a common
maturity date are called for prepayment the specific Bonds to be prepaid will be
chosen by lot by the Registrar. All payments will be at a price of par plus
accrued interest.
Section 2. Registration and Payment.
2.01. Registered Form. The Bonds shall be issued only in fully registered
form. The interest thereon and, upon surrender of each Bond, the principal
amount thereof, is payable by check or draft issued by the Registrar described
herein.
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2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the
last interest payment date preceding the date of authentication to which inter-
est on the Bond has been paid or made available for payment, unless (i) the date
of authentication is an interest payment date to which interest has been paid or
made available for payment, in which case such Bond shall be dated as of the
date of authentication, or (ii) the date of authentication is prior to the first
interest payment date, in which case such Bond will be dated as of the date of
original issue. The interest on the Bonds is payable on February 1 and August 1
of each year, commencing August 1, 1990, to the owner of record thereof as of
the close of business on the fifteenth day of the immediately preceding month,
whether or not such day is a business day.
2.03. Registration. The City will appoint, and shall maintain, a bond
registrar, transfer agent, authenticating agent and paying agent (Registrar).
The effect of registration and the rights and duties of the City and the Regis-
trar with respect thereto are as follows:
(a) Register. The Registrar must keep at its principal corporate
trust office a bond register in which the Registrar provides for the
registration of ownership of Bonds and the registration of transfers and
exchanges of Bonds entitled to be registered, transferred or exchanged.
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(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly
endorsed by the registered owner thereof or accompanied by a written
instrument of transfer, in form satisfactory to the Registrar, duly exe-
cuted by the registered owner thereof or by an attorney duly authorized by
. "
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the registered owner in writing, the Registrar will authenticate and
deliver, in the name of the designated transferee or transferees, one or
more new Bonds of a like aggregate principal amount and maturity, as
requested by the transferor. The Registrar may, however, close the books
for registration of any transfer after the fifteenth day of the month
preceding each interest payment date and until such interest payment date.
(c) Exchange of Bonds. When Bonds are surrendered by the registered
owner for exchange the Registrar will authenticate and deliver one or more
new Bonds of a like aggregate principal amount and maturity, as requested
by the registered owner or the owner's attorney in writing.
(d) Cancellation. Bonds surrendered upon any transfer or exchange
will be promptly cancelled by the Registrar and thereafter disposed of as
directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to
the Registrar for transfer, the Registrar may refuse to transfer the Bond
until the Registrar is satisfied that the endorsement on the Bond or
separate instrument of transfer is valid and genuine and that the requested
transfer is legally authorized. The Registrar will incur no liability for
the refusal, in good faith, to make transfers which it, in its judgment,
deems improper or unauthorized.
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(f) Persons Deemed Owners. The City and the Registrar may treat the
l'erson in whose name a Bond is registered in the bond register as the
absolute owner of the Bond, whether the Bond is overdue or not, for the
purpose of receiving payment of, or on account of, the principal of and
interest on the Bond and for all other purposes and payments so made to
registered owner or upon the owner's order will be valid and effectual to
satisfy and discharge the liability upon such Bond to the extent of the sum
or sums so paid.
(g) Taxes, Fees and Charges. For a transfer or exchange of Bonds,
the Registrar may impose a charge upon the owner thereof sufficient to
reimburse the Registrar for any tax, fee or other governmental charge
required to be paid with respect to the transfer or exchange.
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(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes
mutilated or is destroyed, stolen or lost, the Registrar will deliver a new
Bond of like amount, number, maturity date and tenor in exchange and
substitution for and upon cancellation of the mutilated Bond or in lieu of
and in substitution for a Bond destroyed, stolen or lost, upon the payment
of the reasonable expenses and charges of the Registrar in connection
therewith; and, in the case of a Bond destroyed, stolen or lost, upon
filing with the Registrar of evidence satisfactory to it that the Bond was
destroyed, stolen or lost, and of the ownership thereof, and upon furnish-
ing to the Registrar of an appropriate bond or indemnity in form, substance
and amount satisfactory to it and as provided by law, in which both the
City and the Registrar must be named as obligees. Bonds so surrendered to
the Registrar will be cancelled by the Registrar and evidence of such
cancellation must be given to the City. If the mutilated, destroyed,
stolen or lost Bond has already matured or been called for redemption in
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accordance with its terms it is not necessary to issue a new Bond prior to
payment.
(i) Redemption. In the event any of the Bonds are called for re-
demption, notice thereof identifying the Bonds to be redeemed will be given
by the Registrar by mailing a copy of the redemption notice by first class
mail (postage prepaid) not more than 60 and not less than 30 days prior to
the date fixed for redemption to the registered owner of each Bond to be
redeemed at the address shown on the registration books kept by the Regis-
trar and by publishing the notice in the manner required by law. Failure
to give notice by publication or by mail to any registered owner, or any
defect therein, will not affect the validity of any proceeding for the
redemption of Bonds. Bonds so called for redemption will cease to bear
interest after the specified redemption date, provided that the funds for
the redemption are on deposit with the place of payment at that time.
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2.04. Appointment of Initial Registrar. The City appoints
Norwest Bank Minnesota, N.A. , M1nneapolis , Minnesota, as the
initial Registrar. The Mayor and the City Manager are authorized to execute and
deliver, on behalf of the City, a contract with the Registrar. Upon merger or
consolidation of the Registrar with another corporation, if the resulting
corporation is a bank or trust company authorized by law to conduct such busi-
ness, such corporation is authorized to act as successor Registrar. The City
agrees to pay the reasonable and customary charges of the Registrar for the
services performed. The City reserves the right to remove the Registrar upon 30
days' notice and upon the appointment of a successor Registrar, in which event
the predecessor Registrar must deliver all cash and Bonds in its possession to
the successor Registrar and must deliver the bond register to the successor
Registrar. On or before each principal or interest due date, without further
order of this Council, the Treasurer must transmit to the Registrar moneys
sufficient for the payment of all principal and interest then due.
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2.05. Execution, Authentication and Delivery. The Bonds will be prepared
under the direction of the Manager and executed on behalf of the City by the
signatures of the Mayor and the Manager, provided that all signatures may be
printed, engraved or lithographed facsimiles of the originals. In case any
officer whose signature or a facsimile of whose signature appears on the Bonds
ceases to be such officer before the delivery of any Bond, such signature or
facsimile will nevertheless be valid and sufficient for all purposes, the same
as if the officer had remained in office until delivery. Notwithstanding such
execution, a Bond will not be valid or obligatory for any purpose or entitled to
any security or benefit under this Resolution unless and until a certificate of
authentication on the Bond has been duly executed by the manual signature of an
authorized representative of the Registrar. Certificates of authentication on
different Bonds need not be signed by the same representative. The executed
certificate of authentication on each Bond is conclusive evidence that it has
been authenticated and delivered under this Resolution. When the Bonds have
been so prepared, executed and authenticated, the Treasurer shall deliver the
same to the Purchaser upon payment of the purchase price in accordance with the
contract of sale heretofore made and executed, and the Purchaser is not obli-
gated to see to the application of the purchase price.
2.06. Temporary Bonds. The City may elect to deliver in lieu of printed
definitive Bonds one or more typewritten temporary Bonds in substantially the
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form set forth in Section 3 with such changes as may be necessary to reflect
more than one maturity in a single temporary bond. Upon the execution and
delivery of definitive Bonds the temporary Bonds will be exchanged therefor and
cancelled.
Section 3. Form of Bond.
3.01. The Bonds will be printed in substantially the following form:
[Face of the Bond]
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTIES OF CARVER AND HENNEPIN
CITY OF CHANHASSEN
GENERAL OBLIGATION IMPROVEMENT BON~ SERIES 1989A
Rate
Date of
Original Issue
CUSIP
Maturity
December 1, 1989
No.
$
The City of Chanhassen, Minnesota, a duly organized and existing municipal
corporation in Carver and Hennepin Counties, Minnesota (City), acknowledges
itself to be indebted and for value received hereby promises to pay to
or registered assigns, the principal sum of $ on the maturity date
specified above, with interest thereon from the date hereof at the annual rate
specified above, payable February 1 and August 1 in each year, commencing
August 1, 1990, to the person in whose name this Bond is registered at the close
of business on the fifteenth day (whether or not a business day) of the immedi-
ately preceding month. The interest hereon and, upon presentation and surrender
hereof, the principal hereof are payable in lawful money of the United States of
America by check or draft by , Minneso-
ta, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or
its designated successor under the Resolution described herein. For the prompt
and full payment of such principal and interest as the same respectively become
due, the full faith and credit and taxing powers of the City have been and are
hereby irrevocably pledged.
The City may elect on February 1, 1995, and on any date thereafter, to
prepay Bonds of this issue maturing on or after February 1, 1996. Redemption
may be in whole or in part of the Bonds subject to prepayment. If redemption is
in part, those Bonds remaining unpaid which have the latest maturity date will
be prepaid first. If only part of the Bonds having a common maturity date are
called for prepayment the specific Bonds to be prepaid will be
. "
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chosen by lot by the Registrar. All prepayments shall be at a price of par plus
accrued interest.
The City Council has designated the Bonds as "qualified tax exempt obliga-
tions" within the meaning of Section 265(b) (3) of the Internal Revenue Code of
1986, as amended (the Code) relating to disallowance of interest expense for
financial institutions and within the $10 million limit allowed by the Code for
the calendar year of issue.
Additional provisions of this Bond are contained on the reverse hereof and
such provisions for all purposes have the same effect as though fully set forth
in this place.
This Bond is not valid or obligatory for any purpose or entitled to any
security or benefit under the Resolution until the Certificate of Authentication
hereon has been executed by the Bond Registrar by manual signature of one of its
authorized representatives.
IN WITNESS WHEREOF, the City of Chanhassen, Carver and Hennepin Counties,
Minnesota, by its City Council, has caused this Bond to be executed on its
behalf by the facsimile signatures of the Mayor and City Manager and has caused
this Bond to be dated as of the date set forth below.
Dated:
CITY OF CHANHASSEN, MINNESOTA
(facsimile)
City Manager
(facsimile)
Mayor
CERTIFICATE OF AL~HENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned
within.
By
Authorized Representative
[Reverse of the Bond]
This Bond is one of an issue in the aggregate principal amount of
$6,650,000 all of like original issue date and tenor, except as to number,
maturity date, redemption privilege, and interest rate, all issued pursuant to a
resolution adopted by the City Council on December 4, 1989 (the Resolution), for
the purpose of providing money to defray the expenses incurred and to be in-
curred in making local improvements, pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes,
Chapter 429, and the principal hereof and interest hereon are payable primarily
from special assessments against property specially benefited by local improve-
ments, as set forth in the Resolution to which reference is made for a full
statement of rights and powers thereby conferred. The full faith and credit of
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the City are irrevocably pledged for payment of this Bond and the City Council
has obligated itself to levy ad valorem taxes on all taxable property in the
City in the event of any deficiency in special assessments pledged, which taxes
may be levied without limitation as to rate or amount. The Bonds of this series
are issued only as fully registered Bonds in denominations of $5,000 or any
integral multiple thereof of single maturities.
As provided in the Resolution and subject to certain limitations set forth
therein, this Bond is transferable upon the books of the City at the principal
office of the Bond Registrar, by the registered owner hereof in person or by the
owner's attorney duly authorized in writing upon surrender hereof together with
a written instrument of transfer satisfactory to the Bond Registrar, duly
executed by the registered owner or the owner's attorney; and may also be
surrendered in exchange for Bonds of other authorized denominations. Upon such
transfer or exchange the City will cause a new Bond or Bonds to be issued in the
name of the transferee or registered owner, of the same aggregate principal
amount, bearing interest at the same rate and maturing on the same date, subject
to reimbursement for any tax, fee or governmental charge required to be paid
with respect to such transfer or exchange.
The City and the Bond Registrar may deem and treat the person in whose name
this Bond is registered as the absolute owner hereof, whether this Bond is
overdue or not, for the purpose of receiving payment and for all other purposes,
and neither the City nor the Bond Registrar will be af:ected by any notice to
the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED A~1) AGREED that all acts,
conditions and things required by the Constitution and laws of the State of
Minnesota, to be done, to exist, to happen and to be performed preliminary to
and in the issuance of this Bond in order to make it a valid and binding general
obligation of the City in accordance with its terms, have been done, do exist,
have happened and have been performed as so required, and that the issuance of
this Bond does not cause the indebtedness of the City to exceed any constitu-
tional or statutory limitation of indebtedness.
(Form of certificate to be printed on the reverse side of each Bond,
following a full copy of the legal opinion.)
I certify that the above is a full, true and correct copy of the legal
opinion rendered by bond counsel on the issue of Bonds of the City of
Chanhassen, Minnesota, which includes the within Bond, dated as of the date of
delivery of and payment for the Bonds.
(Facsimile Signature)
City Manager
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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
UNIF GIFT MIN ACT
(Cust)
Custodian
(Minor)
TEN ENT -- as tenants
by entireties
under Uniform Gifts or
Transfers to Minors
JT TEN -- as joint tenants with
right of survivorship and
not as tenants in common
Ac t . . . .
(State)
......
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers
the within Bond and all rights
hereby irrevocably constitute and appoint
attorney to transfer the said Bond on the books kept
for registration of the within Bond, with full power of substitution in the
premises.
unto
thereunder,
and
does
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 Guara~teed:
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.
The Bond Registrar will not effect transfer of this Bond unless the infor-
mation concerning the assignee requested below is provided.
Name and Address:
(Include information for all joint owners if
this Bond is held by joint account.)
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Please insert social security or
other identifying number of assignee
3.02. The City Manager is directed to obtain a copy of the proposed
approving legal opinion of Holmes & Graven, Chartered, Minneapolis, Minnesota,
which is to be complete except as to dating thereof and to cause the opinion to
be printed on each Bond, together with a certificate to be signed by the fac-
simile signature of the Manager in substantially the form set forth in the form
of Bond. The Manager is authorized and directed to execute such certificate in
the name of the City upon receipt of such opinion and to file the opinion in the
City offices.
Section 4. Payment: Security: Pledges and Covenants.
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4.01. The Bonds are payable from the Improvement Bonds Series 1989A Debt
Service Fund (Debt Service Fund) hereby created, and the proceeds of special
assessments (Assessments) levied or to be levied for the improvements (Improve-
ments) financed by the Bonds and tax increments resulting from increases in
taxable value of real property in Tax Increment Financing District No. 1 (Tax
Increments) are hereby pledged to the Debt Service Fund. If any payment of
principal or interest on the Bonds shall become due when there is not sufficient
money in the Debt Service Fund to pay the same, the Treasurer is directed to pay
such principal or interest from the general fund of the City, and the general
fund will be reimbursed for such advances out of the proceeds of Assessments and
Tax Increments when collected. There is appropriated to the Debt Service Fund
all capitalized interest financed from Bond proceeds, if any, any amount over
the minimum purchase price paid by the Purchaser and the accrued interest paid
by the Purchaser upon closing and delivery of the Bonds.
4.02. It is hereby determined that the Improvements to be financed by the
Bonds will directly and indirectly benefit and abutting property, and the City
hereby covenants with the holders from time to time of the Bonds as follows:
(a) The City has caused or will cause the Assessments for the Im-
provements to be promptly levied so that the first installment will be
collectible not later than 1991 and will take all steps necessary to assure
prompt collection, and the levy of the Assessments is hereby authorized.
The City Council will cause all further actions and proceedings relative to
the making and financing of the Improvements financed hereby to be taken
with due diligence that are required for the construction of each Improve-
ment financed wholly or partly from the proceeds of the Bonds, and for the
final and valid levy of the Assessments and the appropriation of any other
funds needed to pay the Bonds and interest thereon when due.
(b) In the event of any current or anticipated deficiency in Assess-
ments and Tax Increments, the City Council will levy ad valorem taxes in
the amount of the current or anticipated deficiency.
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(c) The City will keep complete and accurate books and records
showing: receipts and disbursements in connection with the Improvements,
Assessments levied therefor and Tax Increments and other funds appropri-
ated for their payment, collections thereof and disbursements therefrom,
moneys on hand and, the balance of unpaid Assessments.
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(d) The City will cause its books and records to be audited at least
annually and will furnish copies of such audit reports to any interested
person upon request.
4.03. It is hereby determined that the estimated collections of Assess-
ments and interest thereon and Tax Increments for payment of principal and
interest on 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 and
that no tax levy is needed at this time.
4.04. The City Manager is authorized and directed to file a certified copy
of this resolution with the County Auditor of Carver County and Director of
Property Taxation of Hennepin County and to obtain the certificates required by
Minnesota Statutes, Section 475.63.
Section 5. Authentication of Transcript.
5.01. The officers of the City are authorized and directed to prepare and
furnish to the Purchaser and to the attorneys approving the Bonds, certified
copies of proceedings and records of the City relating to the Bonds and to the
financial condition and affairs of the City, and such other certificates,
affidavits and transcripts as may be required to show the facts within their
knowledge or as shown by the books and records in their custody and under their
control, relating to the validity and marketability of the Bonds and such
instruments, including any heretofore furnished, may be deemed representations
e of the City as to the facts stated therein.
5.02. The Mayor and City Manager are authorized and directed to certify
that they have examined the Official Statement prepared and circulated in
connection with the issuance and sale of the Bonds and that to the best of their
knowledge and belief the Official Statement is a complete and accurate repre-
sentation of the facts and representations made therein as of the date of the
Official Statement.
Section 6. Tax Covenant.
6.01. The City covenants and agrees with the holders from time to time of
the Bonds that it will not take or permit to be taken by any of its officers,
employees or agents any action which would cause the interest on the Bonds to
become subject to taxation under the Internal Revenue Code of 1986, as amended
(the Code), and the Treasury Regulations promulgated thereunder, in effect at
the time of such actions, and that it will take or cause its officers, employees
or agents to take, all affirmative action within its power that may be necessary
to ensure that such interest will not become subject to taxation under the Code
and applicable Treasury Regulations, as presently existing or as hereafter
amended and made applicable to the Bonds.
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6.02. (a) The City will comply with requirements necessary under the Code
to establish and maintain the exclusion from gross income of the interest on the
Bonds under Section 103 of the Code, including without limitation requirements
relating to temporary periods for investments, limitations on amounts invested
at a yield greater than the yield on the Bonds, and the rebate of excess in-
vestment earnings to the United States.
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(b) For purposes of qualifying for the exception to the federal arbitrage
rebate requirements as set forth in Code Section 148(f)(4)(iv), the City hereby
finds, determines and declares that 75% of the net proceeds of the Bonds are to
be used for construction expenditures with respect to property owned by a
governmental unit and it is the reasonable expectation of the City that 10% of
the net proceeds of the Bonds will be spent for the governmental purposes of the
issue within the 6-month period beginning on the date the bonds are issued, 45%
of such proceeds will be spent for such purposes within the I-year period
beginning on such date, 75% of such proceeds will be spent for such purposes
within the 18-month period beginning on such date, and 100% of such proceeds
will be spent for such purposes within the 2-year period beginning on such date.
If the Bonds fail to meet the requirements set forth in this subparagraph, the
City elects the application of Subclause (v) of Section 148 (f) (4) (iv) of the
Code.
6.03. The City further covenants not to use the proceeds of the Bonds or
to cause or permit them or any of them to be used, in such a manner as to cause
the Bonds to be "private activity bonds" within the meaning of Sections 103 and
141 through 150 of the Code.
6.04. In order to qualify the Bonds as "qualified tax-exempt obligations"
within the meaning of Section 265(b)(3) of the Code, the City makes the follow-
ing factual statements and representations:
e
(a) the Bonds are not "private activity bonds" as defined in Section
141 of the Code;
(b) the City hereby designates the Bonds as "qualified tax-exempt
obligations" for purposes of Section 265(b) (3) of the Code;
(c) 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
subordinate entities of the City) during calendar year 1989 will not exceed
$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City
during calendar year 1989 have been designated for purposes of Section
265(b)(3) of the Code.
6.05. The City will use its best efforts to comply with any federal
procedural requirements which may apply in order to effectuate the designations
made by this section.
e
"
~ The motion for the adoption of the foregoing resolution was duly seconded
by Member Dimler , and upon vote being taken thereon, the
following voted in favor thereof: All members present
and the following voted against the same: None
whereupon said resolution was declared duly passed and adopted.
e
e
e
STATE OF MINNESOTA )
)
COUNTIES OF CARVER ) SSe
AND HENNEPIN )
)
CITY OF CHANHASSEN )
I, the undersigned, being the duly qualified and acting Manager of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, do hereby certify that I
have carefully compared the attached and foregoing extract of minutes of a
regular meeting of the City Council of the City held on Monday, December 4, 1989
with the original minutes on file in my office and the extract is a full, true
and correct copy of the minutes insofar as they relate to the issuance and sale
of $6,650,000 General Obligation Improvement Bonds Series 1989A of the City.
WITNESS My hand officially as such Manager and the corporate seal of the
e City ~his ~ day of December, 1989.
41 (JJ.5lZ
City Manager
Chanhassen, Minnesota
(SEAL)
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