1f. Audubon Road Reconstruction Project j- Cb A -
CITYOF 100 MEMORANDUM
CHANHESEN TO: Mayor and City Council
7700 Market Boulevard
PO Box 147 FROM: Greg Sticha, Finance D
Chanhassen, MN 55317
DATE: June 14, 2010 O
Administration
Phone: 952.227.1100 SUBJ: Financing Audubon Road Improvements
Fax: 952.227.1110
Building Inspections PROPOSED MOTION:
Phone: 952.227.1180
Fax: 952.227.1190 The City Council & EDA approves the following four resolutions:
Engineering 1. CITY: A resolution adopting a street reconstruction plan and
Phone: 952.227.1160 approving the issuance of general obligation street reconstruction
Fax: 952.227.1170
bonds for financing the 2010 Audubon Road reconstruction project
Finance (unanimous vote of those members present).
Phone: 952.227.1140
Fax: 952.227.1110 2. CITY: A resolution authorizing a fund transfer to the EDA for a
bond sale to the city (simple majority vote).
Park & Recreation
Phone: 952227.1120 3. CITY: A resolution providing for the issuance and sale of
Fax: 952.227.1110
$1,540,000 general obligation temporary street reconstruction bonds,
Recreation Center Series 2010 and levying a tax for the payment thereof (simple
2310 Coulter Boulevard majority vote).
Phone: 952.227.1400
Fax: 952.227.1404 4. EDA: A resolution proposing to purchase the City of Chanhassen
general obligation temporary street reconstruction bonds, Series
Planning& 2010 (simple majority vote).
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works BACKGROUND
1591 Park Road
Phone: 952.227.1300 When we first discussed financing options for the 2010 Audubon Road
Fax: 952.227.1310 Improvement Project, staff assumed the best option would be to bond for the
city's share of the project cost. At that time, the estimated total project cost was
Senior Center $3 million. The most reasonable option to finance a project of this size is to bond
Phone: 952,227.1125 for the project and use levy dollars to repay the bond. This scenario was
Fax: 952.227.1110 presented in the original Debt Levy Schedule and the original Revolving
Web Site Assessment Schedule, which are attached.
www.ci,chanhassen.mn.us
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
Audubon Financing
June 14, 2010
Page 2 of 3
Since the initial project cost estimates, a number of things have changed the scope
and total cost of the project. The roadway is now slated to be 4 -feet narrower
than originally planned. The shallower pavement means that less storm water
improvements are needed. Staff designed the project in- house, saving an
estimated $100,000, and staff will be inspecting the project, saving an additional
$75,000. In addition, the bids received were once again very competitive. All of
these changes brought down the total project cost by almost $1 million.
The new estimated total project cost is just under $2.1 million and some of those
costs are related to water and storm sewer improvements ($516,113). This brings
the total project cost that requires financing down to just over $1.5 million. With
this new lower amount, staff decided to review the possibility of using cash
reserves in the Revolving Assessment Construction Fund to pay for the
improvements, and then dedicate tax levy dollars to pay back the cash advance for
the $1.5 million.
As we reviewed the option of using cash from the Revolving Assessment
Construction Fund, one problem became clear very quickly. Staff thought that the
best way to replace the use of that cash would be to use available excess levy
from our debt levy schedule. However, because of state imposed levy limits, this
is considered transitioning a debt levy to a regular levy, and would severely
impact our available overall levy capacity due to the structure of the State Levy
Limit regulations. The only way to avoid potential issues with our levy capacity
is to issue a bond and related debt levy for the repayment of that bond, in order to
preserve our levy limit capacity.
In an attempt to avoid large amounts of bonding and interest costs, which could
total as much as $250,000 over the life of the bond, staff researched several
alternatives to issuing bonds. After reviewing this issue with our Financial
Advisors Ehler's & Associates, we were able to find one solution that keeps our
costs to a minimum and protects our levy capacity. This solution is to issue a
bond to the City from the City's EDA; borrowing the funds from the EDA and
repaying the bond with a dedicated debt levy for Audubon (see yellow highlighted
figures on Debt Levy Schedule & Revolving Assessment Construction Fund
Schedule).
Therefore, it is staff's recommendation that the $1.54 million in costs for
Audubon Road be financed through the use of a Street Reconstruction CIP Bond
that is issued to the city from the EDA, and repay that bond with a dedicated debt
levy for Audubon.
Audubon Financing
June 14, 2010
Page3of3
Four resolutions are required to be passed at tonight's meeting in the following
order:
1. CITY: A resolution adopting a street reconstruction plan and approving the
issuance of general obligation street reconstruction bonds for financing the
2010 Audubon Road reconstruction project (unanimous vote of those
members present).
2. CITY: A resolution authorizing a fund transfer to the EDA for a bond sale
to the city (simple majority vote).
3. CITY: A resolution providing for the issuance and sale of $1,540,000
general obligation temporary street reconstruction bonds, Series 2010 and
levying a tax for the payment thereof (simple majority vote).
4. EDA: A resolution proposing to purchase the City of Chanhassen general
obligation temporary street reconstruction bonds, Series 2010 (simple
majority vote).
The EDA will convene immediately following the regular meeting.
ATTACHMENTS
1. Audubon Project Costs
2. Revised Debt Levy Schedule
3. Revised Revolving Assessment Construction Fund
4. Resolution Approving the Issuance of Street CIP Bonds
5. Resolution Authorizing a Fund Transfer to the EDA from the Revolving
Assessment Construction fund, in order to sell Bonds to the City from the
EDA
6. Resolution providing for the issuance and sale of Bonds to EDA from the City
7. EDA Resolution Proposing to Purchase the City of Chanhassen General
Obligation Temporary Street Reconstruction Bonds.
8. Flowchart explaining bond issuance process
Audubon Road Reconstruction (Lake Drive West to Lyman Blvd.)
City Project # 10 -02
Item Costs
Street $1,177,649
Storm $317,202
Watermain $151,992
Erosion Control /Misc $98,643
Street Lighting $29,575
Construction Contract $1,775,060
10% Indirect Costs /Contingency $177,506
Indirect Costs as of 4/30/10 $108,110
Soils Testing $20,000
Misc. Financing & Legal Fees $12,876
Estimated Final Project Cost $2,093,552
Revenues
*Water Fund $167,191
*Storm Sewer Fund $348,922
Assessments $37,439
Bond $1,540,000
Estimated Project Revenue Total $2,093,552
* Includes 5% Engineering Fee and 5% Contingency
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A A P A A A A A
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
DATE: June 14, 2010 RESOLUTION NO: 2010 -
MOTION BY: SECONDED BY:
RESOLUTION FOR RECONSIDERATION TO ADOPT A
STREET RECONSTRUCTION PLAN AND APPROVING THE ISSUANCE
OF GENERAL OBLIGATION STREET RECONSTRUCTION BONDS
WHEREAS, the City of Chanhassen, Minnesota (the "City "), on December 14, 2009
adopted, by a 4 -1 vote by the City Council, Resolution No. 2009 -07 entitled "A Resolution
Adopting a Street Reconstruction Plan and Approving the Issuance of General Obligation Street
Reconstruction Bonds" (the "Prior Resolution ") and also held a public hearing on the adoption of
the Plan all in accordance pursuant to Minnesota Statutes, Section 475.58, subdivision 3b, as
amended (the "Act ");
WHEREAS, pursuant to the Act the plan and issuance of street reconstruction bonds
must be approved by a vote of all members of the City Council;
WHEREAS, the City Council believes it is in the best interest of the City to present to the
provisions of the Prior Resolution for reconsideration, as follows;
1. WHEREAS, the City has determined that it is in the best interest of the City to
authorize the issuance and sale of general obligation street reconstruction bonds pursuant to
Minnesota Statutes, Section 475.58, subdivision 3b, as amended (the "Act "), to finance the cost
of street reconstruction projects, as described in the proposed street reconstruction plan described
below, a copy of which is on file in the City's Engineering Department; and
2. WHEREAS, pursuant to the Act, the City is authorized to issue and sell general
obligation street reconstruction bonds for street reconstruction under the circumstances and
within the limitations set forth in the Act. The Act provides that a street reconstruction plan may
be financed with general obligation street reconstruction bonds, following adoption of a street
reconstruction plan, after a public hearing on the street reconstruction plan and on the issuance of
general obligation street reconstruction bonds and other proceedings conducted in accordance
with the requirements of the Act; and
3. WHEREAS, pursuant to the Act, the City has prepared a five year street
reconstruction plan, which describes the streets to be reconstructed, the estimated costs and any
planned reconstruction of other streets in the City, including the issuance of general obligation
street reconstruction bonds under the Act (the "Plan "), to determine the funding strategy for
street reconstruction projects; and
4. WHEREAS, on December 14, 2010, the City Council held a public hearing on the
adoption of the Plan and the issuance of not to exceed approximately $30,000,000 general
obligation street reconstruction bonds (the "Bonds") under the Plan for street reconstruction
2506358v2
improvements to those streets described in the Plan (the "Street Reconstruction Projects ") after
publication of the notice of public hearing not less than 10 days nor more than 28 days prior to
the date thereof in the City's official newspaper; and
5. WHEREAS, all parties who appeared at the public hearing were given an
opportunity to express their views with respect to the proposal to adopt the Plan and to undertake
and finance the Street Reconstruction Projects by the issuance of Bonds and any written
comments submitted prior to the public hearing were considered.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Chanhassen, Minnesota, as follows:
1. City Policies and Goals. The financing of the Street Reconstruction Projects and
the issuance and sale of the Bonds would further the policies and goals of the City as set forth in
the Plan, hereby adopted by the City Council in connection with the issuance of the Bonds.
2. Adoption of Street Reconstruction Plan. Based on information received at the
public hearing, such written comments (if any) and such other facts and circumstances as the
City Council deems relevant, it is hereby found, determined and declared that:
(a) the Street Reconstruction Projects proposed in the Plan will allow the City to
upgrade its transportation infrastructure; and
(b) the Plan is hereby approved and adopted in the form presently on file with the
City.
3. Authorization and Approval of Bonds. The City is hereby authorized to issue the
Bonds, the proceeds of which will be used, together with any additional funds of the City which
might be required, to finance certain costs of the Street Reconstruction Projects and to pay costs
of issuance of the Bonds.
4. Execution of Documents. The Mayor and City Administrator are authorized and
directed to execute such other documents and instruments as may be required to give effect to the
transactions herein contemplated.
5. Voter Referendum Contingency. Pursuant to the Act, a petition requesting a vote
on the question of issuing the Bonds, signed by voters equal to five percent of the votes cast in
the last municipal general election, may be filed within thirty days of the public hearing. Upon
receipt of such petition within the prescribed time period, the City may issue the Bonds only
after obtaining the approval of a majority of the voters voting on the question of the issuance of
the Bonds. The authorizations and approvals contained herein are subject to and contingent upon
not receiving such a petition, or, in the event such a petition is filed, the approving vote of a
majority of the voters voting on the question of the issuance of the Bonds.
2
2506358v2
Passed and adopted by the Chanhassen City Council this 14 day of June, 2010.
ATTEST:
Todd Gerhardt, City Manager Thomas A. Furlong, Mayor
YES NO ABSENT
3
2506358v2
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
DATE: June 14 , 2010 RESOLUTION NO: 2010 -
MOTION BY: SECONDED BY:
RESOLUTION AUTHORIZING FUND TRANSFER TO EDA FOR BOND SALE TO
THE CITY
WHEREAS, the city is issuing Street Reconstruction Bonds for the Construction of Audubon
Road.
WHEREAS, the city is issuing a Bond from the City's EDA to the City for the construction of
Audubon Road.
NOW, THEREFORE, BE IT RESOLVED by the City Council of Chanhassen, Minnesota, as
follows:
1. Authorization; Findings. The City Council hereby authorizes the Finance Director to transfer the
following amounts as shown.
Transfer from: Transfer to: Amount
601 Revolving Construction assessment Fund 220 (EDA) $1,540,000.00
Passed and adopted by the Chanhassen City Council this 14th day of June, 2010.
ATTEST:
Todd Gerhardt, City Manager Thomas A. Furlong, Mayor
YES NO ABSENT
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE
CITY OF CHANHASSEN, MINNESOTA
HELD: June 14, 2010
Pursuant to due call, a regular or special meeting of the City Council of the City of
Chanhassen, Hennepin and Carver Counties, Minnesota, was duly held at the City Hall on June
14, 2010, at 7:00 P.M, for the purpose, in part, of authorizing the issuance and awarding the sale
of $1,540,000 General Obligation Temporary Street Reconstruction Bonds, Series 2010.
The following members were present:
and the following were absent:
Member introduced the following resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $1,540,000 GENERAL
OBLIGATION TEMPORARY STREET RECONSTRUCTION BONDS, SERIES 2010 AND
LEVYING A TAX FOR THE PAYMENT THEREOF
A. WHEREAS, the City Council of the City of Chanhassen, Minnesota (the "City ")
has heretofore determined and declared that it is necessary and expedient to issue $1,540,000
General Obligation Temporary Street Reconstruction Bonds, Series 2010 (the "Bonds" or
individually, a "Bond "), pursuant to Minnesota Statutes, Chapter 475 and Section 475.58,
Subdivision 3b, to temporarily finance street reconstruction improvements under the City's Street
Reconstruction Plan 2010 -2014, adopted on June 14, 2010 (the "Improvements "); and
B. WHEREAS, on December 14, 2009, following duly published notice thereof, the
Council held a public hearing on the issuance of not to exceed approximately $30,000,000
principal amount of bonds to finance the Improvements and all persons who wished to speak or
provide written information relative to the public hearing were afforded an opportunity to do so;
and
C. WHEREAS, on the date hereof, the City Council pursuant to "Resolution for
Reconsideration to Adopt a Street Reconstruction Plan and Approving the Issuance of General
Obligation Bonds" adopted the City's Reconstruction Plan and authorized the issuance of street
reconstruction bonds in an amount not to exceed $30,000,000;
D. WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 475.60,
subdivision 2(9), the public sale requirements do not apply to this sale of the Bonds since the
City has retained Ehlers & Associates, Inc. as independent financial advisors. The City has
received an offer from the Economic Development Authority of the City of Chanhassen,
Minnesota (the "Purchaser "), to purchase the Bonds at a price of $1,540,000, plus accrued
interest, if any, on all Bonds to the date of delivery and payment, on the further terms and
conditions hereinafter set forth. The offer is hereby accepted, and the Mayor and the City
Manager are hereby authorized and directed to execute a contract on the part of the City for the
sale of the Bonds with the Purchaser; and
E. WHEREAS, the Bonds, together with any outstanding bonds of the City that are
subject to the City's net debt limit, do not exceed the City's net debt limit; and
F. 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 Chanhassen,
Minnesota, as follows:
1. Acceptance of Offer. The offer of 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 $1,540,000, plus interest, if any, accrued to settlement, is hereby accepted.
2. Title; Original Issue Date; Denominations; Maturities. The Bonds shall be dated
July 1, 2010, as the date of original issue, shall be issued forthwith on or after such date in fully
registered form, shall 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 semiannually on December 15 and June 15 in the years and amounts and bear interest
payable semiannually on December 15 and June 15 of each year (each an "Interest Payment
Date "), commencing December 15, 2010, calculated on the basis of a 360 -day year of twelve 30-
day months, at the respective rates per annum as set forth opposite the maturity years as follows:
Month /Year Principal Amount Interest Rate
December 15, 2010 $230,000 .650%
June 15, 2011 70,000 .650
December 15, 2011 70,000 .950
June 15, 2012 200,000 .950
December 15, 2012 200,000 1.200
June 15, 2013 770,000 1.200
3. Purpose. The Bonds shall provide funds to temporarily finance the
Improvements. The total cost of the Improvements, 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 Improvements 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
Improvements proceeds with due diligence to completion and that any and all permits and
studies required under law for the Improvements are obtained.
4. Bond Registrar. The City Manager, City of Chanhassen, 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.
5. Form of Bond. The Bonds, together with the Certificate of Registration, shall be
in substantially the following form:
UNITED STATES OF AMERICA
STATE OF MINNESOTA
HENNEPIN AND CARVER COUNTIES
CITY OF CHANHASSEN
R- $
GENERAL OBLIGATION TEMPORARY STREET
RECONSTRUCTION BOND, SERIES 2010
Interest Rate Maturity Date Date of Original Issue
1, July 1, 2010
REGISTERED OWNER: ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF
CHANHASSEN, MINNESOTA
PRINCIPAL AMOUNT:
The City of Chanhassen, Hennepin and Carver Counties, 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, and to pay interest thereon semiannually
on June 15 and December 15 of each year (each, an "Interest Payment Date "), commencing
December 15, 2010, 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 this
Bond is payable upon presentation and surrender hereof at the office of the City Manager, City
of Chanhassen, Minnesota (the "Bond Registrar "), acting as paying agent, or any successor
paying agent duly appointed by the Issuer (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.
Redemption. All Bonds of this issue (the "Bonds") are subject to redemption and
prepayment at the option of the Issuer on any date without penalty at the option of the Issuer, in
whole or in multiples of $5,000, upon written notice to the Holder, at a redemption price of par
plus accrued interest to the date of prepayment. If redemption is in part, the Issuer may select the
specific principal installments hereof, or applicable percentages thereof, to be prepaid.
Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal
amount of $1,540,000, all of like date of original issue and tenor, except as to number, maturity,
interest rate, denomination and redemption privilege, 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 June 14, 2010 (the "Resolution "), for the purpose of providing
money to temporarily finance Improvements within the jurisdiction of the Issuer, to which fund
there have been irrevocably pledged tax levies anticipated to be received with respect to the
Improvements financed by the Bonds, and into which fund there are to be paid proceeds of
definitive street reconstruction bonds or additional temporary street reconstruction bonds which
the Issuer is required by law to issue at or prior to the maturity of this Bond for the purpose of
refunding the same if the tax levies theretofore received or collected or any other municipal
funds which are properly available and are appropriated by the City Council for such purposes,
are not sufficient for the full payment thereof. This Bond is payable out of the General
Obligation Temporary Street Reconstruction Bonds, Series 2010 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
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 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 Obligations. The Bonds have been designated by the Issuer as
"qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended.
IT IS HEREBY CERTIFIED AND REC1'1'ED 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 Chanhassen, Hennepin and Carver Counties,
Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile
signatures of its Mayor and its Manager, the corporate seal of the Issuer having been
intentionally omitted as permitted by law.
CERTIFICATE OF AUTHENTICATION CITY OF CHANHASSEN,
Date of Registration: HENNEPIN AND CARVER COUNTIES,
July 1, 2010 MINNESOTA
This Bond is one of the
Bonds described in the
Resolution mentioned /s/ Facsimile
within. Mayor
REGISTRABLE BY AND PAYABLE AT:
City Manager
City of Chanhassen, Minnesota /s/ Facsimile
Manager
By:
Manager
CERTIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of the attached Bond may be made only by the
registered owner or the registered owner's legal representative last noted below:
DATE OF REGISTERED SIGNATURE OF
REGISTRATION OWNER REGISTRAR
July 1, 2010
REGISTER OF PARTIAL PAYMENTS
The installment of principal amount of the attached Bond has been prepaid on the dates and in
the amounts noted below:
SIGNATURE OF SIGNATURE OF
DATE AMOUNT OWNER REGISTRAR
If a notation is made on this register, such notation has the effect stated in the attached Bond.
Partial payments do not require the presentation of the attached Bond to the Registrar, and an
Owner could fail to note the partial payment here.
6. Execution. The Bonds shall be in typewritten form, and shall be executed on
behalf of the City by the signatures of its Mayor and Manager 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 that 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.
7. 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 July 1, 2010. The Certificate of Authentication so executed on each Bond shall be
conclusive evidence that it has been authenticated and delivered under this resolution.
8. Delivery; Application of Proceeds. The Bonds when so prepared and executed
shall be delivered by the Manager to the Purchaser upon receipt of the purchase price, and the
Purchaser shall not be obliged to see to the proper application thereof.
9. Fund and Accounts. There is hereby created a special fund to be designated the
"General Obligation Temporary Street Reconstruction Bonds, Series 2010 Fund" (the "Fund ") to
be administered and maintained by the Manager 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 "Construction Account" and "Debt
Service Account ":
(a) Construction Account. To the Construction Account shall be credited the
proceeds of the sale of the Bonds. From the Construction Account there shall be paid all costs
and expenses of making the Improvements, 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; and the 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 receipt of the collection of taxes herein levied; and provided further that if
upon completion of the Improvements there shall remain any unexpended balance in the
Construction Account, the balance shall be transferred by the 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) all taxes herein or hereafter levied
for the payment of the Bonds; (ii) funds in the amount of $7,359.50 shall be deposited by the
City to provide sufficient funds to pay interest due on the Bonds on or before December 15,
2010; (iii) all funds remaining in the Construction Account after completion of the
Improvements and payment of the costs thereof; (iv) all investment earnings on funds held in the
Debt Service Account; and (v) 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 and any premiums for redemption
of the Bonds and any other general obligation bonds of the City hereafter issued by the City and
made payable from the 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 the 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 the 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 ").
10. Pledge of Proceeds of Definitive Street Reconstruction Bonds. To provide
moneys for payment of the principal and interest on the Bonds, the City shall issue and sell the
definitive street reconstruction bonds for delivery and payment at or prior to the maturity date of
the Bonds.
11. 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:
Year of Tax Levy Year of Tax Collection Amount
2010 -2012 2011 -2013 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.
12. Bondholder Covenant. The provisions of this resolution constitute a covenant
with the Holder of the Bonds and the definitive street reconstruction bonds to be issued to refund
the Bonds and, with respect to the payment of funds to the Debt Service Account, a pledge of
those funds for the benefit of the holder of the Bonds payable therefrom.
13. 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.
14. 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 or, if
notice of redemption as herein required has been duly provided for, to such earlier redemption
date.
15. 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
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.
16. Certificate of Registration. The Manager is hereby directed to file a certified copy
of this resolution with the County Auditor of Hennepin and Carver Counties, Minnesota,
together with such other information as the Auditor shall require, and to obtain the County
Auditor's 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.
17. 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.
18. Negative Covenant as to Use of Bond Proceeds and Improvements. The City
hereby covenants not to use the proceeds of the Bonds or to use the Improvements, or to cause or
permit them to be used, or to enter into any deferred payment arrangements for the cost of the
Improvements, 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.
19. 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
(i) requirements relating to temporary periods for investments, (ii) limitations on amounts
invested at a yield greater than the yield on the Bonds, and (iii) the rebate of excess investment
earnings to the United States if the Bonds (together with other obligations reasonably expected to
be issued and outstanding at one time in this calendar year) exceed the small issuer exception
amount of $5,000,000.
For purposes of qualifying for the small issuer exception to the federal arbitrage rebate
requirements for governmental units issuing $5,000,000 or less of bonds, the City hereby finds,
determines and declares that (i) the Bonds are issued by a governmental unit with general taxing
powers; (ii) no Bond is a private activity bond; (iii) ninety five percent or more of the net
proceeds of the Bonds are to be used for local governmental activities of the City (or of a
governmental unit the jurisdiction of which is entirely within the jurisdiction of the City); and
(iv) the aggregate face amount of all tax exempt bonds (other than private activity bonds) issued
by the City (and all entities subordinate to, or treated as one issuer with the City) during the
calendar year in which the Bonds are issued and outstanding at one time is not reasonably
expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code.
20. 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 2010 will
not exceed $30,000,000;
(e) not more than $30,000,000 of obligations issued by the City during this calendar
year 2010 have been designated for purposes of Section 265(b)(3) of the Code; and
(f) the aggregate face amount of the Bonds does not exceed $30,000,000.
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.
21. Severability. If any section, paragraph or provision of this resolution shall be held
to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section,
paragraph or provision shall not affect any of the remaining provisions of this resolution.
22. Headings. Headings in this resolution are included for convenience of reference
only and are not a part hereof, and shall not limit or define the meaning of any provision hereof.
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.
STATE OF MINNESOTA
COUNTIES OF HENNEPIN AND CARVER
CITY OF CHANHASSEN
I, the undersigned, being the duly qualified Manager of the City of Chanhassen,
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 of the City, duly called and
held on the date therein indicated, insofar as such minutes relate to authorizing the issuance and
awarding the sale of $1,540,000 General Obligation Temporary Street Reconstruction Bonds,
Series 2010.
WITNESS my hand on June _, 2010.
Manager
EXTRACT OF MINUTES OF A MEETING OF THE
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY
OF CHANHASSEN, MINNESOTA
Held: June 14, 2010
Pursuant to due call and notice thereof, a regular or special meeting of the Board of
Commissioners of the Economic Development Authority of the City of Chanhassen, Minnesota,
was duly held at the City Hall in Chanhassen, Minnesota on the 14th day of June, 2010, at
o'clock P.M., for the purpose of adopting a resolution proposing to purchase bonds.
The following members were present:
and the following were absent:
Member introduced the following resolution and moved its adoption:
RESOLUTION PROPOSING TO PURCHASE
THE CITY OF CHANHASSEN GENERAL OBLIGATION TEMPORARY STREET
RECONSTRUCTION BONDS, SERIES 2010
WHEREAS, the City of Chanhassen, Minnesota, proposes to issue $1,540,000 General
Obligation Temporary Street Reconstruction Bonds, Series 2010 (the "Bonds "), to temporarily
finance street reconstruction improvements in the City pursuant to the City's Street
Reconstruction Plan; and
WHEREAS, the Economic Development Authority of the City of Chanhassen, Minnesota
proposes to purchase the Bonds for investment purposes in accordance with the provisions of
Minnesota Statutes, Chapter 118A.
BE IT RESOLVED by the Board of Commissioners of the Economic Development
Authority of the City of Chanhassen, Minnesota (the "EDA "), as follows:
1. The EDA hereby proposes to the Bonds for a purchase price of $1,540,000, plus
accrued interest, if any, to the date of delivery of the Bonds.
2564836v1
Adopted by the Board of Commissioners of the Economic Development Authority of the
City of Chanhassen, this 14th day of June, 2010.
Chair
Attest:
Executive Director
2
2564836v1
STATE OF MINNESOTA )
COUNTIES OF HENNEPIN AND CARVER ) ss.
CITY OF CHANHASSEN )
I, the undersigned, being the duly qualified and acting Secretary of the Chanhassen
Economic Development Authority (the "EDA"), do hereby certify that attached hereto is a
compared, true and correct copy of a resolution as duly adopted by the Board of Commissioners
of the EDA on June 14, 2010, at a regular or special meeting thereof duly called and held, as on
file and of record in my office, which resolution has not been amended, modified or rescinded
since the date thereof, and is in full force and effect as of the date hereof, and that the attached
Extract of Minutes as to the adoption of such resolution is a true and accurate account of the
proceedings taken in passage thereof.
WITNESS my hand this day of June, 2010.
Secretary
3
2564836v1
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