2016-15 EXTRACT OF MINUTES OF A MEETING
CITY COUNCIL OF THE
CITY OF CHANHASSEN, MINNESOTA
HELD: February 8, 2016
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
February 8,2016, at 7:00 P.M., for the purpose, in part, of authorizing the issuance and awarding
the sale of$6,370,000 General Obligation Bonds, Series 2016A.
The following members were present: Denny Laufenburger, Dan Campion, Jerry
McDonald, and Elise Ryan
and the following was absent: Bethany Tjornhorn
Member McDonald introduced the following resolution and moved its adoption:
RESOLUTION NO. 2016-15
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $6,370,000 GENERAL
OBLIGATION BONDS, SERIES 2016A, PLEDGING FOR THE SECURITY THEREOF NET
REVENUES 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$6,370,000
General Obligation Bonds, Series 2016A(the "Bonds" or individually a"Bond"),to finance(i)
improvements to the City's water system, pursuant to Minnesota Statutes, Chapters 444 and 475
(the "System Improvements");and(ii) a crossover refunding(the "Refunding"), on February 1,
2018 (the "Crossover Date") of the February 1, 2019 through February 1, 2030 maturities of the
City's outstanding$7,550,000 original principal amount of the General Obligation Capital
Improvement Plan Bonds, Series 2008A, dated November 18, 2008 (the "Prior Bonds"), pursuant
to Minnesota Statutes, Chapter 475; and
B. WHEREAS, the City owns and operates a municipal sanitary sewer system (the
"Sewer System")and a municipal water system(the "Water System" and together with the Sewer
System the "System") as separate revenue producing public utilities and there are outstanding:
(i)$1,245,000 General Obligation Water and Sewer Revenue Bonds, Series 2012A, dated
November 15,2012 which are payable from the net revenues of the System(the "Outstanding
2012A Bonds"); (ii) $5,920,000 original principal amount of General Obligation Bonds, Series
2011A,dated October 6, 2011,which are payable from the net revenues of the Water System
(the "Outstanding 2011A Bonds");and(iii) $3,720,000 original principal amount of General
Obligation Water Revenue Refunding Bonds, Series 2011B, dated October 6, 2011,which are
payable from the net revenues of the Water System(the "Outstanding 2011B Bonds" and
together with the Outstanding 2011A Bonds,the "Outstanding Water Bonds"); and
C. WHEREAS, $5,290,000 aggregate principal amount of the Prior Bonds will be
called on the Crossover Date(the "Refunded Bonds"), at a price of par plus accrued interest, as
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provided in the resolution of the City Council adopted on October 27,2008, authorizing the
issuance of the Prior Bonds(the "Prior Resolution")and Refunding of the Refunded Bonds on
the Crossover Date is consistent with covenants made with the holders thereof,and is necessary
and desirable for the reduction of debt service cost to the City; and
D. WHEREAS,the City has retained Ehlers&Associates, Inc., in Roseville,
Minnesota('Ehlers"), 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
Statutes, Section 475.60, Subdivision 2(9)and proposals to purchase the Bonds have been
solicited by Ehlers;and
E. WHEREAS,the proposals set forth on Exhibit A attached hereto were received
by the City Finance Director, or designee, at the offices of Ehlers at 10:00 A.M. on the date
hereof,pursuant to the Preliminary Official Statement, dated January 28, 2016, established for
the Bonds; 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 Proposal. The proposal of Stifel,Nicolaus&Co.,Birmingham,
Alabama(the "Purchaser"),to purchase the Bonds in accordance with the Preliminary Official
Statement established for the Bonds, at the rates of interest hereinafter set forth, and to pay
therefor the sum of$6,692,090, plus interest accrued to settlement, is hereby found, determined
and declared to be the most favorable proposal received and is hereby accepted, and the Bonds
are hereby awarded to the Purchaser. The City Finance Director is directed to retain the deposit
of the Purchaser and to forthwith return to the unsuccessful bidders their good faith checks or
drafts.
2. Bond Terms.
(a) Original Issue Date;Denominations;Maturities; Term Bond Option. The Bonds
shall be dated March 3, 2016, as the date of original issue and 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 on February 1 in the years and amounts as follows:
Year Amount Year Amount
2017 $140,000 2024 $560,000
2018 140,000 2025 580,000
2019 475,000 2026 595,000
2020 495,000 2027 430,000
2021 515,000 2028 440,000
2022 530,000 2029 455,000
2023 550,000 2030 465,000
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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) Allocation. The aggregate principal amount of$1,565,000 maturing in each of
the years and amounts hereinafter set forth are issued to finance the System Improvements (the
"System Portion");and aggregate principal amount of$4,805,000 maturing in each of the years
and amounts hereinafter set forth are issued to finance the Refunding(the "Refunding Portion"):
Year System Portion Refunding Portion Total Amount
2017 $140,000 - $140,000
2018 140,000 - 140,000
2019 145,000 $330,000 475,000
2020 150,000 345,000 495,000
2021 155,000 360,000 515,000
2022 160,000 370,000 530,000
2023 165,000 385,000 550,000
2024 165,000 395,000 560,000
2025 170,000 410,000 580,000
2026 175,000 420,000 595,000
2027 - 430,000 430,000
2028 - 440,000 440,000
2029 - 455,000 455,000
2030 - 465,000 465,000
If Bonds are prepaid,the prepayments shall be allocated to the portions of debt service
(and hence allocated to the payment of Bonds treated as relating to a particular portion of debt
service)as provided in this paragraph. If the source of prepayment moneys is the general fund of
the City,or other generally available source,the prepayment may be allocated to any portion of
debt service in such amounts as the City shall determine. If the source of a prepayment is excess
net revenues of the System pledged to the System Improvements,the prepayment shall be
allocated to the System Portion of debt service. If the source of prepayments is taxes levied for
the Prior Bonds,the prepayment shall be allocated to the Refunding Portion of the Bonds.
(c) 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
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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 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
hereof, references to the Nominee hereunder shall refer to such new Nominee.
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(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 fifteen 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.
(d) 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.
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(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(d) shall limit or restrict the provisions of paragraph
10.
(e) 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;Refunding Findings. The System Portion of the Bonds shall provide
funds to finance the System Improvements(the "System Improvements"). The Refunding
Portion shall provide funds to finance the Refunding. The total cost of the System Improvements
and the Refunding(herein,together,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.
The City covenants that it shall do all things and perform all acts required of it to assure that
work on the System Improvements proceed with due diligence to completion and that any and all
permits and studies required under law for the System Improvements are obtained. It is hereby
found,determined and declared that the Refunding is pursuant to Minnesota Statutes, Section
475.67, Subdivision 13, and as of the Crossover Date, shall result in a reduction of the present
value of the dollar amount of the debt service to the City from a total dollar amount of
$7,605,147.50 for the Prior Bonds to a total dollar amount of$6,676,575.77 for the Refunding
Portion of the Bonds, computed in accordance with the provisions of Minnesota Statutes, Section
475.67, Subdivision 12, and accordingly the dollar amount of such present value of the debt
service for the Refunding Portion of the Bonds is lower by at least three percent than the dollar
amount of such present value of the debt service for the Prior Bonds, as required in Minnesota
Statutes, Section 475.67, Subdivision 12.
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4. Interest. The Bonds shall bear interest payable semiannually on February 1 and
August 1 of each year(each, an "Interest Payment Date"), commencing August 1, 2016,
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
2017 3.00% 2024 3.00%
2018 3.00 2025 2.00
2019 3.00 2026 2.00
2020 3.00 2027 2.00
2021 3.00 2028 2.00
2022 3.00 2029 2.00
2023 3.00 2030 2.00
5. Redemption. All Bonds maturing on February 1, 2025 and thereafter, shall be
subject to redemption and prepayment at the option of the City on February 1, 2024, 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 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 registered holder of the Bonds thirty days prior to the date
fixed for redemption.
To effect a partial redemption of Bonds having a common maturity date,the Bond
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
Bond 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 such Bonds, as many numbers as, at$5,000 for
each number, shall equal the principal amount of such 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 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
City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the
City and Bond 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 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.
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6. Bond Registrar. Bond Trust Services Corporation, in Roseville, 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:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
HENNEPIN AND CARVER COUNTIES
CITY OF CHANHASSEN
R- $
GENERAL OBLIGATION BOND, SERIES 2016A
Interest Rate Maturity Date Date of Original Issue CUSIP
February 1, March 3,2016
REGISTERED OWNER: CEDE&CO.
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, unless called for earlier redemption, in the manner
hereinafter set forth,the principal amount specified above, on the maturity date specified above,
and to pay interest thereon semiannually on February 1 and August 1 of each year(each,an
"Interest Payment Date"),commencing August 1,2016, 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 Bond Trust Services Corporation, in
Roseville,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 fifteenth day of the calendar month
next preceding 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, and surrender of
this Bond shall not be required for payment of the redemption price upon a partial redemption of
this Bond. 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.
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Optional Redemption. All Bonds of this issue(the "Bonds")maturing on February 1,
2025,and thereafter, are subject to redemption and prepayment at the option of the Issuer on
February 1,2024, 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 registered holder of the Bonds
at least thirty days prior to the date fixed for redemption.
Prior to the date on which any Bond or Bonds are directed by the Issuer to be redeemed
in advance of maturity,the Issuer will cause notice of the call thereof for redemption identifying
the Bonds to be redeemed to be mailed to the Bond Registrar and all Bondholders, at the
addresses shown on the Bond Register. All Bonds so called for redemption will cease to bear
interest on the specified redemption date, provided funds for their redemption have been duly
deposited.
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 such 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$6,370,000, 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 on February 8, 2016(the "Resolution"), for the purpose of providing money to
finance improvements within the Issuer to the municipal water system(the "System")and for a
crossover refunding on February 1,2018, of the Issuer's outstanding General Obligation Capital
Improvement Plan Bonds, Series 2008A, dated November 18, 2008. This Bond is payable out of
the General Obligation Bonds, Series 2016A 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,
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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
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 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 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;that the
Issuer has covenanted and agreed with the Holders of the Bonds that it will impose and collect
charges for the service, use and availability of its municipal water system(the "System")at the
times and in amounts necessary to produce net revenues,together with other sums pledged to the
payment of the System Portion of the Bonds, as defined in the Resolution, adequate to pay all
principal and interest when due on the System Portion of the Bonds;and that the Issuer will levy
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a direct, annual, irrepealable ad valorem tax upon all of the taxable property of the Issuer,
without limitation as to rate or amount, for the years and in amounts sufficient to pay the
principal and interest on System Portion of the Bonds as they respectively become due, if the net
revenues from the System, and any other sums irrevocably appropriated to the Debt Service
Account are insufficient therefor;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 City Manager,the corporate seal of the Issuer having been
intentionally omitted as permitted by law.
Date of Registration: Registrable by: BOND TRUST SERVICES
CORPORATION
Payable at: BOND TRUST SERVICES
BOND REGISTRAR'S CORPORATION
CERTIFICATE OF
AUTHENTICATION CITY OF CHANHASSEN,
HENNEPIN AND CARVER COUNTIES,
This Bond is one of the Bonds MINNESOTA
described in the Resolution
mentioned within. /s/Facsimile
Mayor
BOND TRUST SERVICES
CORPORATION
Roseville,Minnesota /s/Facsimile
Bond Registrar City Manager
By:
Authorized Signature
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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
(State)
Transfers to Minors Act
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
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.)
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PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s)and in the amount(s)as follows:
Date Amount Authorized signature of Holder
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8. Execution. The Bonds shall be in typewritten form, shall be executed on behalf of
the City by the signatures of its Mayor and City 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 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
such 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 of
March 3, 2016. 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 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.
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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 City Manager 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 fifteenth day of the calendar
month next preceding 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 such 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, such Bond and for all other purposes whatsoever whether or not
such 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 City Finance Director 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 established a special fund to be designated
"General Obligation Bonds, Series 2016A Fund" (the "Fund")to be administered and maintained
by the City Finance Director as a bookkeeping account separate and apart from all other funds
maintained in the official financial records of the City. The Fund shall be maintained in the
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manner herein specified until all of the Bonds and the interest thereon have been fully paid. The
Operation and Maintenance Account for the Water System heretofore established by the City
shall continue to be maintained in the manner heretofore provided by the City. The Operation
and Maintenance Account for the Sewer System heretofore established by the City shall continue
to be maintained in the manner heretofore provided by the City. All moneys remaining after
paying or providing for the items set forth in the resolution establishing the Operation and
Maintenance Accounts shall constitute or are referred to as "net revenues"until the System
Portion of the Bonds and the Outstanding Water Bonds and the Outstanding 2012A Bonds have
been paid. There shall be maintained in the Fund the following separate accounts to which shall
be credited and debited all income and disbursements of the System as hereinafter set forth. The
City Finance Director and all officials and employees concerned therewith shall establish and
maintain financial records of the receipts and disbursements of the System in accordance with
this resolution. In such records there shall be established accounts or accounts shall continue to
be maintained as the case may be,of the Fund for the purposes and in the amounts as follows:
(a) Escrow Account. The Escrow Account shall be maintained as an escrow account
with U.S.Bank National Association(the "Escrow Agent"), in St.Paul,Minnesota,which is a
suitable financial institution within or without the State. $4,973,831.54 in proceeds of the sale of
the Refunding Portion of the Bonds shall be received by the Escrow Agent and applied to fund
the Escrow Account. $67,909 in proceeds of the sale of the Bonds shall be received by the
Escrow Agent and applied to pay costs of issuing the Bonds. Proceeds of the Refunding Portion
of the Bonds, less proceeds used to pay costs of issuance and any Bond proceeds returned to the
City, are hereby irrevocably pledged and appropriated to the Escrow Account,together with all
investment earnings thereon. The Escrow Account shall be invested in securities maturing or
callable at the option of the holder on such dates and bearing interest at such rates as shall be
required to provide sufficient funds,together with any cash or other funds retained in the Escrow
Account, (i)to pay when due the interest to accrue on the Refunding Portion of the Bonds to and
including the Crossover Date; and(ii)to pay when called for redemption on the Crossover Date,
the principal amount of the Refunded Bonds. The Escrow Account shall be irrevocably
appropriated to the payment of(i)all interest on the Refunding Portion of the Bonds to and
including the Crossover Date,and(ii)the principal of the Refunded Bonds due by reason of their
call for redemption on the Crossover Date. The moneys in the Escrow Account shall be used
solely for the purposes herein set forth and for no other purpose, except that any surplus in the
Escrow Account may be remitted to the City, all in accordance with the Escrow Agreement, by
and between the City and Escrow Agent(the "Escrow Agreement"),a form of which is on file in
the office of the City Manager. Any moneys remitted to the City pursuant to the Escrow
Agreement shall be deposited in the Debt Service Account.
(b) Construction Account. To the Construction Account there shall be credited the
proceeds of the sale of the System Portion of the Bonds. From the Construction Account there
shall be paid all costs and expenses of making the Improvements and making the System
Improvements, including the cost of any construction or other binding 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 System Portion of the Bonds
may also be used to the extent necessary to pay interest on the System Portion of the Bonds due
prior to the anticipated date of commencement of the collection of net revenues herein pledged;
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and provided further that if upon the construction of the System Improvements there shall remain
any unexpended balance in the Construction Account,the balance shall be transferred to the
System Improvements Debt Service Subaccount.
(c) Debt Service Account. There shall be maintained separate subaccounts in the
Debt Service Account to be designated the "System Improvements Debt Service Subaccount"
and the "Refunding Debt Service Subaccount." There are hereby irrevocably appropriated and
pledged to, and there shall be credited to the separate subaccounts of the Debt Service Account:
(i) System Improvements Debt Service Subaccount. To the System Improvements
Debt Service Subaccount there shall be credited: (A)the net revenues of the
System not otherwise pledged and applied to the payment of other obligations of
the City, in an amount,together with other funds which may herein or hereafter
from time to time be irrevocably appropriated to the System Improvements Debt
Service Subaccount, sufficient to meet the requirements of Minnesota Statutes,
Section 475.61 for the payment of the principal and interest of the System Portion
of the Bonds; (B)any collections of all taxes which may hereafter be levied in the
event that the net revenues of the System and other funds herein pledged to the
payment of the principal and interest on the System Portion of the Bonds are
insufficient therefore; (C) all funds remaining in the Construction Account after
completion of the System Improvements and payment of the costs thereof; (D)all
investment earnings on funds held in the System Improvements Debt Service
Subaccount; and (E)any and all other moneys which are properly available and
are appropriated by the governing body of the City to the System Improvements
Debt Service Subaccount. The System Improvements Debt Service Subaccount
shall be used solely to pay the principal and interest and any premium for
redemption of the System Portion of the Bonds and any other general obligation
bonds of the City hereafter issued by the City and made payable from said
subaccount as provided by law.
(ii) Refunding Debt Service Subaccount. To the Refunding Debt Service Subaccount
there shall be irrevocably appropriated and pledged to: (A)collections of all taxes
herein or hereinafter levied for the payment of the Refunding Portion of the
Bonds and interest thereon; (B)all investment earnings on funds held in the
Refunding Debt Service Subaccount; (C)any funds remaining after the Crossover
Date in the Debt Service Account established by the Prior Resolution; and(D)
any and all other moneys which are properly available and are appropriated by the
governing body of the City to the Refunding Debt Service Subaccount. The
Refunding Debt Service Subaccount shall be used solely to pay the principal and
interest and any premium for redemption of the Refunding Portion of the Bonds
and any other general obligation bonds of the City hereafter issued by the City
and made payable from said subaccount 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
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7396427v1
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 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. Covenants Relating to the System Portion of the Bonds.
(a) Sufficiency of Net Revenues. It is hereby found, determined and declared that the
Water System net revenues are sufficient to pay when due the principal of and interest the
Outstanding Water Bonds and a sum at least five percent in excess thereof. The net revenues of
the System are sufficient to pay when due the principal and interest on the Bonds and the
Outstanding 2012A Bonds and a sum at least five percent in excess thereof. The net revenues of
the System are hereby pledged on a parity lien with the Outstanding Water Bonds and the
Outstanding 2012A Bonds for the payment of the System Portion of the Bonds and shall be
applied for that purpose, but solely to the extent required to meet the principal and interest
requirements of the System Portion of the Bonds as the same become due. Nothing contained
herein shall be deemed to preclude the City from making further pledges and appropriations of
the net revenues of the System for the payment of other or additional obligations of the City,
provided that it has first been determined by the City Council that the estimated net revenues of
the System will be sufficient in addition to all other sources, for the payment of the System
Portion of the Bonds and such additional obligations and any such pledge and appropriation of
the net revenues may be made superior or subordinate to, or on a parity with the pledge and
appropriation herein.
(b) Excess Net Revenues. Net revenues in excess of those required for the foregoing
may be used for any proper purpose.
(c) Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes,
Section 444.075,the City hereby covenants and agrees with the Holders of the Bonds that it will
impose and collect charges for the service,use,availability and connection to the Water System
at the times and in the amounts required to produce net revenues adequate to pay all principal
and interest when due on the System Portion of the Bonds. Minnesota Statutes, Section 444.075,
Subdivision 2, provides as follows: "Real estate tax revenues should be used only, and then on a
temporary basis,to pay general or special obligations when the other revenues are insufficient to
meet the obligations."
(d) General Obligation Pledge. For the prompt and full payment of the principal and
interest on the System Portion of 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 net
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7396427v1
revenues of the Water System appropriated and pledged to the payment of principal and interest
on the System Portion of the Bonds,together with other funds irrevocably appropriated to the
System Improvements Debt Service Subaccount herein established, shall at any time be
insufficient to pay such principal and interest when due,the City covenants and agrees to levy,
without limitation as to rate or amount an ad valorem tax upon all taxable property in the City
sufficient to pay such principal and interest as it becomes due.
17. Covenants Relating to the Refunding Portion of the Bonds.
(a) Tax Levy; Coverage Test;Cancellation of Certain Tax Levies. To provide
moneys for payment of the principal and interest on the Refunding Portion of 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:
Years of Tax Levy Years of Tax Collection Amount
2015-2028 See attached schedule $5,820,097.50
The tax levies are such that if collected in full they,together with estimated collections of
any other revenues herein pledged for the payment of the Refunding Portion 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 Refunding Portion of the Bonds. The tax levies shall be irrepealable so
long as any of the Refunding Portion 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.
Upon payment of the Prior Bonds,the uncollected taxes levied in the Prior Resolution
authorizing the issuance of the Prior Bonds which are not needed to pay the Prior Bonds as a
result of the Refunding shall be canceled.
(b) General Obligation Pledge. For the prompt and full payment of the principal of
and interest on the Refunding Portion of 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 Escrow Account or Refunding Debt Service Subaccount is ever insufficient to pay
all principal and interest then due on the Refunding Portion of the Bonds payable therefrom,the
deficiency shall be promptly paid out of any other accounts of the City which are available for
such purpose, and such other funds may be reimbursed without interest from the Escrow
Account or Debt Service Account when a sufficient balance is available therein.
18. 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:
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7396427v1
TAX LEVY CALCULATION Issue ID# 328347
City of Chanhassen,MN Dated Date: 3/3/2016
$6,370,000 General Obligation Bonds,Series 2016A Call Date: 2/1/2024
Crossover Refunding Series 2008A Bonds
Tax Tax Bond
Levy Collect Pay
Year Year Year Total P&I Escrow P&I @ 105% Net Levy
2015 / 2016 / 2017 107,465.56 (107,465.56) 0.00 0.00
2016 / 2017 / 2018 117,950.00 (117,950.00) 0.00 0.00
2017 / 2018 / 2019 447,950.00 470,347.50 470,347.50
2018 / 2019 / 2020 453,050.00 475,702.50 475,702.50
2019 / 2020 / 2021 457,700.00 480,585.00 480,585.00
2020 / 2021 / 2022 456,900.00 479,745.00 479,745.00
2021 / 2022 / 2023 460,800.00 483,840.00 483,840.00
2022 / 2023 / 2024 459,250.00 482,212.50 482,212.50
2023 / 2024 / 2025 462,400.00 485,520.00 485,520.00
2024 / 2025 / 2026 464,200.00 487,410.00 487,410.00
2025 / 2026 / 2027 465,800.00 489,090.00 489,090.00
2026 / 2027 / 2028 467,200.00 490,560.00 490,560.00
2027 / 2028 / 2029 473,400.00 497,070.00 497,070.00
2028 / 2029 / 2030 474,300.00 498,015.00 498,015.00
Totals 5.768,365.56 5.820.097.50 5.820,097.50
Notes: The interest payments due 8/1/16 through 2/1/18 will be paid from the Escrow Account.Original
tax levies for collection years 2018 through 2029 on the Series 2008A Bonds will be cancelled.
Excess bond proceeds in the amount of$309.23(contingency)will be deposited into the Debt
Service Account for the Series 2016A Bonds.
EHLERS
,t‘t.til 111 1.I4•.1 ill,!.1`:t
(a) Provide or cause to be provided to the Municipal Securities Rulemaking Board
(the "MSRB")by filing at www.emma.msrb.org in accordance with the Rule,certain annual
financial information and operating data in accordance with the Undertaking. The City reserves
the right to modify from time to time the terms of the Undertaking as provided therein.
(b) Provide or cause to be provided to the MSRB notice of the occurrence of certain
events with respect to the Bonds in not more than ten(10)business days after the occurrence of
the event, in accordance with the Undertaking.
(c) Provide or cause to be provided to the MSRB notice of a failure by the City to
provide the annual financial information with respect to the City described in the Undertaking, in
not more than ten(10)business days following such amendment.
(d) The City agrees that 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 City Manager, or any other officer of the City authorized to act in their
place(the "Officers")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 City Manager.
19. 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.
20. Compliance With Reimbursement Bond Regulations. The provisions of this
paragraph are intended to establish and provide for the City's compliance with United States
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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 sixty 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 System Improvements;provided,however,
that no such Declaration shall necessarily have been made with respect to: (i) "preliminary
expenditures" for the System Improvements, 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 System Portion of the Bonds.
(b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of
the System Portion 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 System Portion 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 System Portion of the Bonds are issued, shall be treated as made on the day the
System Portion of 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 System
Portion of the Bonds stating in effect that such action will not impair the tax-exempt status of the
System Portion of the Bonds.
21. Securities;Escrow Agent. Securities purchased from moneys in the Escrow
Account shall be limited to securities set forth in Minnesota Statutes, Section 475.67,
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Subdivision 8, and any amendments or supplements thereto. Securities purchased from the
Escrow Account shall be purchased simultaneously with the delivery of the Bonds. The City
Council has investigated the facts and hereby finds and determines that the Escrow Agent is a
suitable financial institution to act as escrow agent.
22. Redemption of Refunded Bonds. The Refunded Bonds shall be redeemed and
prepaid on the Crossover Date in accordance with the terms and conditions set forth in the Notice
of Call for Redemption, in substantially the form attached to the Escrow Agreement,which terms
and conditions are hereby approved and incorporated herein by reference.
23. Escrow Agreement. On or prior to the delivery of the Bonds the Mayor and City
Manager shall,and are hereby authorized and directed to, execute the Escrow Agreement on
behalf of the City. The Escrow Agreement is hereby approved and adopted and made a part of
this resolution,and the City covenants that it will promptly enforce all provisions thereof in the
event of default thereunder by the Escrow Agent.
24. Purchase of SLGS or Open Market Securities. The Escrow Agent, as agent for
the City, is hereby authorized and directed to purchase on behalf of the City and in its name the
appropriate United States Treasury Securities, State and Local Government Series and/or open
market securities as provided in paragraph 21, from the proceeds of the Refunding Portion of the
Bonds,to the extent necessary, other available funds, all in accordance with the provisions of this
resolution and the Escrow Agreement and to execute all such documents(including the
appropriate subscription form)required to effect such purchase in accordance with the applicable
U.S.Treasury Regulations.
25. Certificate of Registration. The City Manager is hereby directed to file a certified
copy of this resolution with the County Auditor of Carver County,Minnesota, and with the
Director of Property Tax and Public Records of Hennepin County,Minnesota,together with such
other information as the County Auditor and the Director shall require, and to obtain from the
County Auditor and Director the certificates that the Bonds have been entered in the County
Auditor's and Director's Bond Registers and the tax levies required by law have been made.
26. 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.
27. 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.
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28. Tax-Exempt Status of the Bonds;Rebate
(a) Refunding Portion of the Bonds. With respect to the Refunding Portion of the
Bonds,the City is subject to the rebate requirement imposed by Section 148(f)of the Code
because the Refunded Bonds did not qualify for the small issuer exemption from rebate,as
provided in Section 148(f)(4)(D)of the Code and Section 1.148-8 of the Regulations.
(b) System Portion of the Bonds. With respect to the System Portion of the Bonds,
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 twenty four
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 Finance Director,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.
29. 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 2016 will
not exceed$10,000,000;
(e) not more than $10,000,000 of obligations issued by the City during this calendar
year 2016 have been designated for purposes of Section 265(b)(3)of the Code;
(f) the aggregate face amount of the Bonds does not exceed $10,000,000.
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.
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30. 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
31. 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
Ryan and, after a full discussion thereof and upon a vote being taken thereon,the following
voted in favor thereof: Laufenburger, Campion,McDonald, and Ryan
and the following voted against the same: None
Whereupon the resolution was declared duly passed and adopted.
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STATE OF MINNESOTA
COUNTIES OF HENNEPIN AND CARVER
CITY OF CHANHASSEN
I, the undersigned, being the duly qualified and acting City 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, duly called and
held on the date therein indicated, insofar as such minutes relate to authorizing the issuance and
awarding the sale of $6,655,000 General Obligation Bonds, Series 2016A.
WITNESS my hand on February 8, 2016. aa
city Manager
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