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HomeMy WebLinkAbout12-13-2021 Special Council PacketAgenda Special City Council Meeting Monday, December 13, 2021 6:00 P.M. Orono Council Chambers, 2780 Kelley Parkway, Orono, MN 55356 952-249-4600 / www.ci.orono.mn.us Sign up for email notifications at www.ci.orono.mn.us The public is invited to address the council regarding any item on the regular agenda. If your topic is not on the agenda, you may speak during the Public Comments section. Roll Call Pledge of Allegiance Approval of Agenda 1. Approve Sale of General Obligation Bonds Adjournment AGENDA ITEM Prepared By: RJO Reviewed By: A. Carlson Approved By: 1. Purpose. The purpose of this action item is to award the sale of $16,000,000 of GO Capital Improvement Bonds Series 2021A. 2. Background. At the November 8th meeting of the City Council, the Council approved the City’s Supplemental Capital Improvement Plan and approved the sale of $16,000,000 in bonds. The proceeds from the bond sale will be used to fund the construction of a new public works building and the acquisition or construction of a fire station. Proposals for the bond sale have been received by Ehlers and Associates, Inc., and are being presented by a representative from Ehlers. The Council is being asked to award the sale of the bonds. 3. Cost. In addition to the principal amount of $16,000,000, issuance and interest costs estimated at $6,920,000 will be incurred. 4. Funding. Funding for the payment of the bonds will be mainly through the tax levy with some costs paid by funds on hand. 5. Staff Recommendation. Staff recommends approving the Supplemental Capital Improvement Plan and confirming the City’s intent to issue bonds to fund the plan. COUNCIL ACTION REQUESTED Motion to Adopt Resolution No.7243, approving the Supplemental Capital Improvement Plan and confirming the City’s intent to issue bonds to fund the plan. Exhibits A. Preliminary Resolution Item No.: 1 Date: December 13, 2021 Item Description: Award Sale of Series 2021A Bonds Presenter: Ron Olson Finance Director Agenda Section: 1 4854-7635-7637.1 Extract of Minutes of Meeting of the City Council of the City of Orono Hennepin County, Minnesota Pursuant to due call and notice thereof, a special meeting of the City Council of the City of Orono, Minnesota, was duly held at the City Hall in the City, on Monday, December 13, 2021, at 6:00 o’clock P.M. * * * * * * * * * The Mayor announced that the meeting was convened for the purpose of considering proposals for the purchase of $16,000,000 General Obligation Capital Improvement Bonds, Series 2021A. * * * * * * * * * It was reported that _______ proposals for the purchase of the City’s General Obligation Capital Improvement Bonds, Series 2021A (the principal amount being subject to adjustment in accordance with the Terms of Offering), had been received prior to 10:00 a.m., Central Time, pursuant to the Terms of Offering contained in the Preliminary Official Statement dated December 2, 2021; and that the proposals had been opened, read and tabulated. CITY OF ORONO RESOLUTION OF THE CITY COUNCIL NO. ________________________ 4854-7635-7637.1 RESOLUTION AWARDING SALE OF $16,000,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT BONDS, SERIES 2021A, FIXING THE FORM AND SPECIFICATIONS THEREOF, PROVIDING FOR THEIR EXECUTION AND DELIVERY, AND LEVYING TAXES FOR THEIR PAYMENT BE IT RESOLVED by the City Council (the “City Council”) of the City of Orono (the “City”), Minnesota, as follows: ARTICLE I AUTHORIZATION AND SALE 1.01. Authorization and Purpose. At a meeting held on November 8, 2021, this Council determined to sell and issue its general obligation bonds of the City in the total aggregate principal amount of approximately $16,000,000 (as more fully described herein, the “Bonds”). The Bonds are being issued to finance various capital improvement projects identified in the City’s 2022 to 2026 Supplemental Capital Improvement Plan adopted November 8, 2021 (the “Plan”) pursuant to Minnesota Statutes, Section 475.521. In the Terms of Offering (the “Terms of Offering”), the City reserved the right, after proposals were opened and prior to award, to increase or decrease the principal amount of the Bonds offered for sale or the amount of any individual maturity, with the increase or decrease to occur in multiples of $5,000 in any of the maturities. The Terms of Offering are hereby ratified and confirmed in all respects and are incorporated herein by reference as though fully specified in this Article. 1.02. Sale. The City Council, having been advised by Ehlers and Associates, Inc., its independent municipal advisor (the “Municipal Advisor”), authorized its Municipal Advisor to solicit proposals on behalf of the City for the sale of the Bonds (as defined below) on a competitive basis without requirement of published notice, all in accordance with Minnesota Statutes, Section 475.60, Subdivision 2. The City Council has publicly received and considered all proposals presented in conformity with the Terms of Offering. The most favorable of such proposals is ascertained to be that of ___________ (the “Purchaser”) to purchase the Bonds at a price of $_________ plus interest accrued to settlement, and upon the further terms and conditions set forth in the Terms of Offering and this resolution. The proposal of the Purchaser is hereby accepted and the sale of the Bonds is hereby awarded to the Purchaser. 2 4854-7635-7637.1 1.03. Execution of Documents; Good Faith Deposit. The Mayor, the City Administrator, City Clerk and the Finance Director (including anyone authorized to act on his or her behalf, the “Authorized Officers”), or each individually, is authorized and directed to endorse an acceptance on both copies of the most favorable proposal and to send one copy to the Purchaser. The Finance Director is directed to deposit the good faith deposit of the Purchaser, specified in the Terms of Offering, pending delivery of the Bonds and payment therefor. 1.04. Compliance with the Laws. 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 the issuance of the Bonds having been done, having happened and having been performed in regular and due form, time and manner as required by law, the City Council hereby finds and determines that it is necessary for this City Council to provide for the issuance, sale and deliver of the Bonds, to establish the form and terms of the Bonds and to provide for the payment and the security thereof. ARTICLE II AUTHORIZATION; BOND TERMS; REGISTRATION; EXECUTION AND DELIVERY 2.01. Authorization and Designation. The City Council hereby authorizes the issuance of its General Obligation Capital Improvement Bonds, Series 2021A under the terms provided in this resolution. 2.02. Maturities, Interest Rates and Denominations. The Bonds shall be originally dated their date of original issue and delivery (December 30, 2021), shall be issued and sold in denominations of $5,000 or any integral multiple thereof within a single maturity, shall mature on December 20 in the years and amounts set forth below and shall bear interest at the rates per annum set forth below opposite such years and amounts from their date of original issue or from the most recent Interest Payment Date to which interest has been paid or duly provided for until paid or duly called for redemption (if any), as follows: Maturity Date (December 20) Principal Amount Interest Rate 2023 $ 420,000 % 2024 420,000 2025 425,000 2026 430,000 2027 435,000 2028 445,000 2029 450,000 2030 455,000 2031 465,000 2032 475,000 2033 485,000 2034 495,000 2035 505,000 2036 515,000 3 4854-7635-7637.1 2037 530,000 2038 540,000 2039 555,000 2040 570,000 2041 585,000 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 600,000 615,000 630,000 650,000 670,000 685,000 705,000 725,000 750,000 770,000 The Bonds shall be issuable only in fully registered form. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. The interest thereon and, upon surrender of each Bond, the principal amount thereof, shall be paid by check or draft issued by Bond Trust Services Corporation (the “Paying Agent”) described herein; provided, however, that so long as the Bonds are registered in the name of a securities depository, or a nominee thereof, in accordance with Section 2.08 hereof, the principal of and the interest on the Bonds shall be paid in accordance with the operational arrangements of the securities depository. 2.03. Dates and Interest Payments. Upon initial delivery of the Bonds pursuant to Section 2.07 hereof and upon any subsequent transfer or exchange pursuant to Section 2.06 hereof, the date of authentication shall be noted on each Bond so delivered, exchanged or transferred. The interest on the Bonds shall be payable on December 20 and June 20 (each, an “Interest Payment Date”), commencing December 20, 2022, to the owners of record thereof as of the close of business on the fifth day of that month, whether or not such day is a business day the (“Record Date”). If any payments of interest due on the Bonds on an Interest Payment Date are not timely made, such interest shall cease to be payable to the registered owners as of the Record Date for such Interest Payment Date and shall be payable to the registered owners of the Bonds as of a special date of record for payment of such defaulted interest as shall be designated by the Registrar whenever monies for the purpose of paying such defaulted interest becomes available. If the date for payment of the principal of or the interest on the Bonds shall be a Saturday, Sunday, legal holiday or day on which banking institutions in the city in which the principal corporate trust office of the Registrar is located are authorized by law or executive order to close, the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal payment date. 2.04. Redemption. 4 4854-7635-7637.1 (a) Optional Redemption. All Bonds maturing on or after December 20, 2031, are subject to redemption and prior payment in whole or in part in such order as the City may determine and by lot within a maturity at the option of the City on December 20, 2030, and any date thereafter at par and accrued interest. All Bonds shall be redeemed at a price of par plus accrued interest to the date of redemption. If redemption is in part, the selection of the amounts and maturities of the Bonds to be redeemed shall be at the discretion of the City. If only part of the Bonds having a common maturity date are called for redemption, then the City or Paying Agent, if any, will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. (b) Notice of Redemption. Notice of redemption of Bonds stating their designation, date, maturity, principal amounts and the redemption date shall be given by the Registrar by mailing such notice by first class mail, postage prepaid, not more than 60 days and not less than 30 days prior to the date fixed for redemption (or such shorter period as may be acceptable to the then registered owner of the Bonds) to the registered owners at their most recent addresses appearing upon the books of the Registrar. Failure to give notice to any particular registered owner or any defect in the notice given to such owner shall not affect the validity of the proceedings calling the Bonds or the redemption of any Bonds for which proper notice has been given. Notice of redemption need not be given to the holder of any Bonds, whether registered or not, who has waived notice of redemption. Notice of redemption having been given as provided above or notice of redemption having been waived by the owners of Bonds called for redemption to whom such notice has not been given as provided above, the Bonds so called for redemption shall become due and payable on the designated redemption date. 2.05. Appointment of Initial Registrar. The City hereby appoints Bond Trust Services Corporation in Roseville, Minnesota, as the initial bond registrar, transfer agent and paying agent (the “Registrar”). The Authorized Officers, or each individually, is authorized to execute and deliver, on behalf of the City, a contract with the Registrar (the “Registrar Agreement”). The Registrar shall have only such duties and obligations as are expressly specified by this Resolution and the Registrar Agreement, and no other duties or obligations shall be implied to the Registrar, except as may be set forth in a written agreement between the City and a successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The Registrar shall notify the City in writing of any changes in its principal corporate trust office as set forth in this Section. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The City reserves the right to remove the Registrar upon thirty (30) days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar and shall deliver the bond register to the successor Registrar. The Authorized Officers, or each individually, is authorized to remove the 5 4854-7635-7637.1 Registrar as provided herein if such officer determines removal is in the best interest of the City. Upon such removal, any Authorized Officer may appoint a successor Registrar and execute a Registrar Agreement with such successor Registrar in a form substantially similar to that approved by the City Council pursuant to this Resolution, but with such changes as such officer deems appropriate or necessary. 2.06. Registration. The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its principal corporate trust office a bond register in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after any Record Date and until the immediately succeeding Interest Payment Date. (c) Exchange of Bonds. Whenever any Bonds are surrendered by the registered owner for exchange the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity, as requested by the registered owner or the owner’s attorney in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be promptly canceled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon the owner’s order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. 6 4854-7635-7637.1 (g) Taxes, Fees and Charges. For every transfer or exchange of Bonds, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be canceled by it and evidence of such cancellation shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment. (i) Authenticating Agent. The Registrar is hereby designated authenticating agent for the Bonds, within the meaning of Minnesota Statutes, Section 475.55, Subdivision 1. (j) Valid Obligations. All Bonds issued upon any transfer or exchange of Bonds shall be the valid obligations of the City, evidencing the same debt, and entitled to the same benefits under this Resolution as the Bonds surrendered upon such transfer or exchange. 2.07. Execution; Authentication and Delivery. The Bonds shall be prepared under the direction of the Finance Director and shall be executed on behalf of the City by the manual or facsimile signatures of each of the Mayor and the City Clerk, provided that all signatures may be printed, engraved, or lithographed facsimiles of the originals. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Bonds shall cease to be such officer before the delivery of an y Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on such Bond has been duly executed by the manual signature of the Registrar. The executed certificate of authentication on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so executed and authenticated, they shall be delivered by the Finance Director to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed. 2.08. Securities Depository. (a) For purposes of this section the following terms shall have the following meanings: 7 4854-7635-7637.1 “Beneficial Owner” shall mean, whenever used with respect to a Bond, the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or such person’s subrogee. “Cede & Co.” shall mean Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Bonds. “DTC” shall mean The Depository Trust Company of New York, New York. “Participant” shall mean any broker-dealer, bank or other financial institution for which DTC holds Bonds as securities depository. “Representation Letter” shall mean the Representation Letter pursuant to which the City agrees to comply with DTC’s Operational Arrangements. (b) The Bonds shall be initially issued as separately authenticated fully registered bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon initial issuance, the ownership of such Bonds shall be registered in the bond register in the name of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving any notice permitted or required to be given to registered owners of Bonds under this Resolution, registering the transfer of Bonds, and for all other purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the bond register as being a registered owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any Participant, with respect to the payment by DTC or any Participant of any amount with respect to the principal of or interest on the Bonds, with respect to any notice which is permitted or required to be given to owners of Bonds under this Resolution, with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond, only to Cede & Co. in accordance with DTC’s Operational Arrangements, 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 interest on the Bonds to the extent of the sum or sums so paid. No person other than DTC shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in accordance with paragraph (e) hereof. (c) If the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bonds in the form of bond certificates, the City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of Bonds 8 4854-7635-7637.1 in the form of certificates. In such event, the Bonds will be transferable in accordance with paragraph (e) hereof DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and the Registrar and discharging its responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with paragraph (e) hereof. (d) The execution and delivery of the Representation Letter to DTC by the Authorized Officers, or each individually, if not previously filed with DTC, is hereby authorized and directed. (e) If any transfer or exchange of Bonds is permitted under paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this Resolution. If Bonds in the form of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as owner of all the Bonds, or another securities depository as owner of all the Bonds, the provisions of this Resolution shall also apply to all matters relating thereto, including, without limitation, the printing of such Bonds in the form of bond certificates and the method of payment of principal of and interest on such Bonds in the form of bond certificates. ARTICLE III FORM OF BONDS The Bonds, the Registrar’s Authentication Certificate and the form of assignment shall be in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF ORONO No. ___ $_________ GENERAL OBLIGATION CAPITAL IMPROVEMENT BOND, SERIES 2021A Interest Rate Maturity Date of Original Issue CUSIP December ___, 2021 Registered Owner: Cede & Co. Principal Amount: 9 4854-7635-7637.1 The City of Orono, Hennepin County, Minnesota, for value received, hereby promises to pay to the Registered Owner specified above, or registered assigns, the Principal Amount specified above on the maturity date specified above, upon the presentation and surrender hereof, and to pay to the Registered Owner hereof interest on such Principal Amount at the Interest Rate specified above from December __, 2021, or the most recent interest payment date to which interest has been paid or duly provided for as specified below, on December 20 and June 20 of each year, commencing December 20, 2022, until said principal amount is paid. Principal is payable in lawful money of the United States of America at the office of Bond Trust Services Corporation, in Roseville, Minnesota, as Bond Registrar or of its successor as Bond Registrar designated by the City upon 60 days’ notice to the registered owners at their registered addresses. Interest shall be paid on each December 20 and June 20 interest payment date by check or draft mailed to the person in whose name this Bond is registered at the close of business on the 5th day of th at month (whether or not a business day) at said person’s address set forth on the registration books maintained by the Bond Registrar. Any such interest not punctually paid or provided for will cease to be payable to the owner of record as of such regular record dates and such defaulted interest may be paid to the person in whose name this Bond shall be registered at the close of business on a special record date for the payment of such defaulted interest established by the Bond Registrar. All Bonds maturing on or after December 20, 2031, are subject to redemption and prior payment in whole or in part in such order as the City may determine and by lot within a maturity at the option of the City on December 20, 2030, and any date thereafter at par and accrued interest. Notice of redemption of Bonds stating their designation, date, maturity, principal amounts and the redemption date shall be given by the Registrar by mailing such notice by first class mail, postage prepaid, not more than 60 days and not less than 30 days prior to the date fixed for redemption (or such shorter period as may be acceptable to the then registered owner of the Bonds) to the registered owners at their most recent addresses appearing upon the books of the Registrar. Failure to give notice to any particular registered owner or any defect in the notice given to such owner shall not affect the validity of the proceedings calling the Bonds or the redempt ion of any Bonds for which proper notice has been given. Notice of redemption need not be given to the holder of any Bonds, whether registered or not, who has waived notice of redemption. Notice of redemption having been given as provided above or notice of redemption having been waived by the owners of Bonds called for redemption to whom such notice has not been given as provided above, the Bonds so called for redemption shall become due and payable on the designated redemption date. Any Bond called for redemption, and for the payment of which moneys are set aside by the City on the redemption date, shall not bear interest after the redemption date, regardless of any delay in its presentation. During such time as this Bond is registered in the name of Cede & Co., as nominee of Depository Trust Company (“DTC”), the method of payment, notice of redemption and certain other matters are subject to the terms of the Representation Letter executed by the City and DTC prior to the date of issuance of the Bonds as such Representation Letter may be amended from time to time. This Bond is one of an issue of Bonds in the aggregate principal amount of $16,000,000, all of like date and tenor except as to maturity, interest rate and redemption privilege, issued pursuant to and in full conformity with the Constitution and Laws of the State of Minnesota, including Minnesota Statutes, Section 475.521 and Chapter 475, for the purpose of financing the 10 4854-7635-7637.1 construction of various capital improvement projects identified in the City’s 2022 to 2026 Supplemental Capital Improvement Plan adopted November 8, 2021. This Bond is payable from ad valorem taxes levied under the Resolution. This Bond constitutes a general obligation of the City and to provide moneys for the prompt and full payment of said principal and interest as the same become due the full faith and credit of the City is hereby irrevocably pledged, and the City will levy additional ad valorem taxes on all taxable property in the City, if required for such purpose, without limitation as to rate or amount. This Bond is transferable, as provided by the Resolution of the City Council authorizing the issuance of the Bonds of this series adopted December 13, 2021 (the “Resolution”), only upon books of the City kept at the office of the Bond Registrar by the Registered Owner hereof in person or by the Registered Owner’s duly authorized attorney, upon surrender of this Bond for transfer at the office of the Bond Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Bond Registrar duly executed by, the Registered Owner hereof or the Registered Owner’s duly authorized attorney, and, upon payment of any tax, fee or other governmental charge required to be paid with respect to such transfer, one or more fully registered Bonds of the series of the same principal amount, maturity and interest rate will be issued to the designated transferee or transferees. The Registered Owner of this Bond may be treated as the absolute owner hereof for all purposes. The Bonds of this series are issuable only as fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof not exceeding the principal amount maturing in any one year. As provided in the Resolution and subject to certain limitations therein set forth, the Bonds of this series are exchangeable for a like aggregate principal amount of Bonds of this series of a different authorized denomination, as requested by the Registered Owner or the owner’s duly authorized attorney upon surrender thereof to the Bond Registrar. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed precedent to and in the issuance of this Bond have been done, have happened and have been performed in regular and due form, time and manner as required by law and that this Bond, together with all other indebtedness of the City outstanding on the date of its issuance, does not exceed any constitutional or statutory limitation of indebtedness. This Bond shall not be valid or become obligatory for any purpose until the Certificate of Authentication and Registration hereon shall have been signed by the Bond Registrar. IN WITNESS WHEREOF, the City of Orono, Minnesota, by its City Council, has caused this Bond to be executed in its behalf by the facsimile signature of the Mayor and by the facsimile signature of the City Clerk, all as of the Date of Original Issue specified above. Dennis Walsh, Mayor 11 4854-7635-7637.1 Anna Carlson, City Clerk BOND REGISTRAR’S CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Bonds described in the within mentioned Resolution and this Bond has been registered as to principal and interest in the name of the Registered Owner identified above on the registration books of the City of Orono, Minnesota. Dated: December __, 2021 BOND TRUST SERVICES CORPORATION As Bond Registrar By Authorized Signature ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ____________________________ attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated:______________________ Please Insert Social Security Number or Other Identifying Number of Assignee Notice: The signature to this assignment must correspond with the name as it appears on the face of this Bond in every particular, without alteration or any change whatever Signature Guaranteed: Signatures must be guaranteed by a national bank or trust company or by a brokerage firm having membership in one of the major stock exchanges. ARTICLE IV USE OF PROCEEDS Use of Proceeds. 12 4854-7635-7637.1 (i) $__________ of the proceeds of the Bonds shall be accounted for as a separate construction fund and used for construction of the improvement projects specified in the Plan. (ii) The remainder of the proceeds of the Bonds may be disbursed by Bond Trust Services Corporation on behalf of the City to pay the costs of issuing the Bonds. The City may also pay such costs from other legally available moneys. (iii) From other available funds, the City shall deposit $_______ in the Debt Service Fund to pay interest on the Bonds due December 20, 2022. ARTICLE V CREATION OF FUNDS; ESTABLISHMENT AND PLEDGE OF TAX LEVIES; INVESTMENTS Section 5.01. General Obligation Capital Improvement Bonds, Series 2021A Debt Service Fund. The principal of and the interest on the Bonds shall be paid from a “General Obligation Capital Improvement Bonds, Series 2021A Debt Service Fund” (the “Debt Service Fund”) which shall be created and maintained on the books of the City as a separate debt payment fund until the Bonds, and all interest thereon, are fully paid. All ad valorem taxes levied and collected as hereinafter specified shall be credited to the Debt Service Fund, as well as any other funds appropriated by the City for the payment of the Bonds. If any payment of principal of or interest on the Bonds shall become due when there is not sufficient money in the Debt Service Fund to make such payment, the City Treasurer shall pay the same from any other available fund of the City, and such other fund shall be reimbursed for such advances out of the proceeds of such revenues and the taxes levied for the payment of the Bonds when available. The moneys and investments in the Debt Service Fund shall be used for no other purpose than to pay principal and interest on the Bonds until such principal and interest shall have been paid in full. Section 5.02. General Obligations; Establishment and Pledge of Tax Levies. The Bonds shall be direct, general obligations of the City, and the City irrevocably pledges the full faith and credit and the tax power of the City to the prompt payment of the principal of, premium, if any, and the interest on the Bonds as the same become due. As required by Minnesota Statutes, Section 475.61, Subdivision 1, there is hereby levied on all taxable property in the City a direct, annual ad valorem tax which shall be spread upon the tax rolls for collection in the years and amounts as follows, as a part of other general taxes of the City, as follows: Levy Year Collection Year Amount 2022 2023 $ 2023 2024 2024 2025 2025 2026 13 4854-7635-7637.1 2026 2027 2027 2028 2028 2029 2029 2030 2030 2031 2031 2032 2032 2033 2033 2034 2034 2035 2035 2036 2036 2037 2037 2038 2038 2039 2039 2040 2040 2041 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 Such tax shall be in excess of and in addition to all other taxes now or hereafter authorized to be levied by the City. The special tax described herein and all receipts therefrom are pledged to the payment of debt service on the Bonds. Such tax shall be irrepealable as 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. It is hereby found and determined that the foregoing taxes, if collected in full, will produce at least five percent (5%) in excess of the annual principal and interest requirements of the Bonds; but the Bonds are general obligations of the City to which the full faith, credit and unlimited taxing powers of the City have been and are hereby pledged; and the City Council shall levy additional general ad valorem taxes on all taxable property in the City, if necessary, to pay the principal of and interest on the Bonds when due. If, as of the date tax levies are certified in any year, the sum of the balance in the Debt Service Fund plus estimated collections of pledged special assessments and any ad valorem taxes theretofore levied for the payment of Bonds payable therefrom and collectible through the end of the following calendar year is not sufficient to pay when due all principal and interest to become due on all Bonds payable therefrom in said following calendar year, or the Debt Service Fund has incurred a deficiency in the manner provided in Section 5.02 hereof, an additional direct, irrepealable, ad valorem tax shall be levied on all taxable property within the corporate limits of the City for the purpose of restoring such accumulated or anticipated deficiency in accordance with the provisions of this Resolution. 14 4854-7635-7637.1 Section 5.03. Investments. Moneys in each of the funds and accounts created and established by this Resolution shall be deposited, invested and secured in accordance with State law. Moneys held in such funds and accounts may be invested by the City or at its direction in such amounts and maturing at such times as shall reasonably provide for moneys to be available when required in the accounts or funds; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund or account was created; and provided further that such investments shall be subject to the covenants and provisions of the Article VII hereof. All interest on any authorized investment held in any fund or account shall accrue to and become a part of such fund or account. All money held in the funds created by this Resolution shall be kept separate and apart from all other funds of the City so that there shall be no commingling of such funds with any other funds of the City. ARTICLE VI CERTIFICATION OF PROCEEDINGS 6.01. Filing with County Auditor. The City Clerk of the City is hereby authorized and directed to file with the County Auditor of Hennepin County a certified copy of this Resolution together with such other information as the County Auditor shall require and to obtain from the County Auditor a certificate that the Bonds have been entered upon the bond registers and that the tax for the payment of the Bonds has been levied as required by law. 6.02. Certification of Proceedings. The officers of the City and the County Auditor are hereby authorized and directed to prepare and furnish to the Purchaser and to Kutak Rock LLP, Bond Counsel, 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 may be required to show the facts relating to the legality and marketability of the Bonds as they appear from the books and records under the officer’s custody and control or as otherwise known to the them. All such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City to the correctness of all statements contained herein. 6.03. Official Statement. The Preliminary Official Statement relating to the Bonds, as of its date December 2, 2021, prepared and distributed by the Municipal Advisor, including any amendments or supplements thereto, is hereby ratified, approved and deemed “final” for purposes of Rule 15c2-12 promulgated under the Securities and Exchange Act of 1934, as amended (“Rule 15c2-12”). The Municipal Advisor is hereby authorized on behalf of the City to prepare and distribute to the Purchaser, within seven business days from the date hereof, a final Official Statement listing the offering prices, the interest rates, selling compensation, delivery date, the underwriters and such other information relating to the Bonds required to be included in the Official Statement by Rule 15c2-12. The use and public distribution of the final Official Statement by the Purchaser in connection with the offering and sale of the Bonds is hereby authorized. The 15 4854-7635-7637.1 officers of the City are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency of the Official Statement. ARTICLE VII COVENANTS AND ARBITRAGE MATTERS 7.01. Restrictive Action. The City covenants and agrees with the registered owners of the Bonds that the City (a) will not take or permit to be taken by any of its officers, employees or agents any actions that would cause interest on the Bonds to become includable in gross income of the recipient under the Code and applicable Regulations, and (b) will take any and all actions within its powers to ensure that the interest will not become includable in gross income of the recipient under the Code and the Regulations. So long as the Bonds are outstanding, the City shall not enter into any lease, management agreement, use agreement or other contract with any nongovernmental entity which would cause the Bonds to be considered “private activity bonds” or “private loan bonds” pursuant to Section 141 of the Code. 7.02. Arbitrage Certification. The Authorized Officers, or each individually, is authorized and directed to execute and deliver to the Purchaser a certificate in accordance with the provisions of Section 148 of the Code and applicable Regulations stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds which make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be “arbitrage bonds” within the meaning of the Code and the Regulations. 7.03. Arbitrage Rebate. The City Council acknowledges that the Bonds are subject to the rebate requirements of Section 148(f) of the Code and covenants to retain such records, make such determinations, file such reports and documents and pay such amounts at such times as are required under Section 148(f) and applicable Regulations to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes, unless the Bonds qualify for an exception from the rebate requirement pursuant to one of the spending exceptions set forth in Section 1.148-7 of the Regulations and no “gross proceeds” of the Bonds (other than amounts constituting a “bona fide debt service fund”) arise during or after the expenditure of the original proceeds thereof. 7.04. Filing. The officers of the City are hereby authorized and directed to prepare and furnish to the Secretary of the Treasury a statement meeting the information reporting requirements of Section 149(e) of the Internal Revenue Code of 1986, as amended (the “Code”), by the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued. 7.05. Policies and Procedures. In order to ensure compliance with the requirements of the Code necessary to preserve the tax exempt status of interest on the Bonds and any other obligations heretofore or hereafter issued, the Policies and Procedures on file in the office of the Finance Director are hereby approved and the Finance Director shall be responsible for their implementation. 16 4854-7635-7637.1 ARTICLE VIII CONTINUING DISCLOSURE 8.01. Continuing Disclosure Undertaking. The City Council (a) authorizes and directs the Mayor and the City Clerk to execute and deliver, on the date of the issuance of the Bonds, a continuing disclosure certificate (the “Undertaking”) in such form that satisfies the requirements of Rule 15c2-12 and is acceptable to the Purchaser and (b) covenants that it will comply with and carry out all of the provisions of the Undertaking. A description of this undertaking is set forth in the Official Statement. The Mayor and the City Clerk, or each individually, may appoint a dissemination agent to assist the City with such Undertaking if such officer finds that such appointment is in the best interest of the City. Notwithstanding any other provisions of this Resolution or the Undertaking, failure of the City to comply with the Undertaking will not be considered a default under this Resolution or the Bonds. However, any Bondholder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this subparagraph and the Undertaking. For purposes of this subparagraph, “Beneficial Owner” means any person who (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (ii) is treated as the owner of any Bonds for federal income tax purposes. ARTICLE IX AUTHORIZATION OF OFFICERS Without in any way limiting the power, authority, or discretion elsewhere herein granted or delegated, the City Council hereby (a) authorizes and directs each officer, employee and agent of the City to carry out, or cause to be carried out, and to perform such obligations of the City and such other actions as they, or any one of them shall consider necessary, advisable, desirable, or appropriate in connection with this Resolution and the issuance, sale, and delivery of the Bonds, including, without limitation and whenever applicable, the execution and delivery thereof and of all other related documents, instruments, certificates, and opinions; and (b) delegates to each such officer, employee and agent the right, power, and authority to exercise her or his own independent judgment and absolute discretion in determining and finalizing the terms, provisions, form and contents of each of the foregoing. The execution and delivery by any such officer, employee or agent of the City of any such documents, instruments, certifications, and opinions, or the doing by them of any act in connection with any of the matters which are the subject of this Resolution, shall constitute conclusive evidence of both the City’s and their approval of all changes, modifications, amendments, revisions, and alterations made therein, and shall conclusively establish their absolute, unconditional, and irrevocable authority with respect thereto from the City and the authorization, approval, and ratification by the City of the documents, instruments, certifications, and opinions so executed and the action so taken. CITY OF ORONO RESOLUTION OF THE CITY COUNCIL NO. ________________________ 4854-7635-7637.1 * * * * * Whereupon said resolution was declared duly passed and adopted. Anna Carlson, City Clerk Dennis Walsh, Mayor STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) SS. ) CITY OF ORONO ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Orono, Minnesota, hereby certify that I have carefully compared the attached and foregoing extract of minutes of a meeting of the City Council of said City held December 13, 2021, with the original thereof on file and of record in my office and the same is a full, true and complete transcript therefrom insofar as the same relates to the issuance and sale of $16,000,000 General Obligation Capital Improvement Bonds, Series 2021A of said City. WITNESS My hand officially and the seal of the City this ______ of December 2021. Anna Carlson, City Clerk City of Orono, Minnesota (Seal) 4883-5181-5942.1 Facsimile Signatures for Bonds Mayor 1. 2. City Clerk 1. 2.