HomeMy WebLinkAboutResolution 09-2001 RESOLUTION 09-01
RESOLUTION RELATING TO SALES TAX REVENUE BONDS, SERIES 2001;
AUTHORIZING THE ISSUANCE AND MAKING PROVISIONS FOR THEIR
PAYMENT
BE IT RESOLVED by the City Council of the City of Brookings, South Dakota(the City) as
follows:
SECTION 1. RECITALS. AUTHORIZATION AND SALE.
1.01. Recitals and Authorization. (a) The City is a political subdivision of the
State of South Dakota and a body corporate and politic. Under the laws of the State of South
Dakota, the City is possessed of a11 powers which are necessary, requisite or proper for the
government and administration of its local and municipal matters, and a11 rights and powers that
now or hereafter may be granted to municipalities by the laws of the State of South Dakota.
(b) The City is authorized by Chapter 10-52, South Dakota Codified Laws(the Act)to levy a
"non-ad valorem tax" (as defined by the Act) on the sale, use, storage and consumption of items
taxed under Sections 10-45 and 10-46, South Dakota Codified Laws, subject to certain
exceptions; and the City has adopted and enacted Ordinances Nos. 21-81, 25-96 and 20-98
(together, the Ordinance) pursuant to the Act imposing the sales taxes authorized by the Act
within the City(the Sales Tax).
(c) The Act provides that cities levying a Sa1es Tax may issue non-ad valorem
sales t�revenue bonds pursuant to Section 10-52-2.10 of the Act and Chapter 6-8B, South
Dakota Codified Laws in anticipation of the collection of the Sa1es T�. Such bonds are required
to be payable solely from collections of the Sa1es Tax and the City is required to covenant that it
will continue to impose and collect the Sales Tax so long as such bonds are outstanding.
(d) As authorized by the Ordinance and the Act, the City has determined that it is
necessary and desirable to issue its non-ad valorem sales tax revenue bonds in a principal amount
not to exceed $9,000,000 (the Bonds) for the purpose of(i)paying the costs of improvements of
the kinds authorized by the Ordinance, which improvements are described in E�ibit A attached
hereto (the Projects), (ii) funding a reserve fund, (iii) paying the costs of issuance of the Bonds
and the premium for bond insurance, if any, and (iv) providing an allowance for original issue
discount.
1.02. Sa1e and Bond Purchase Ag,reement. The Bonds authorized hereby shall be
sold to Dougherty& Company LLC, of Minneapolis, Minnesota(the Purchaser), at a purchase
price of not less than 99.10% of par, exclusive of original issue discount, plus accrued interest, to
bear interest at a rate or rates per annum resulting in an average interest rate not to exceed 5.50%
per annum and to mature over a period not to exceed 20 years. The Mayor is hereby authorized
and directed to agree with the Purchaser upon the exact purchase price, principal amount,
maturities, redemption provisions and interest rate or rates for the Bonds, within the parameters
set forth in this Section 1.02. The execution of a Bond Purchase Agreement setting forth such
final terms by the Mayor and attested by the City Clerk is hereby approved and authorized and
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such execution sha11 be conclusive evidence of such agreement and sha11 be binding upon the
City. The provisions of the Bond Purchase Agreement as so executed, including all E�ibits and
Appendices thereto, are incorporated herein by reference. The law firm of Dorsey&Whitney
LLP, in Minneapolis, Minnesota, is hereby appointed as bond counsel and disclosure counsel for
purposes of this issue of Bonds.
1.03. City Oi�icers Authorized to Execute Documents. The Mayor is hereby
authorized and directed to execute, and the City Clerk to attest, and deliver the Bond Purchase
Agreement and the documents required thereunder, the Official Statement, the Bonds and any
other documents required to complete the financing contemplated hereby. Execution and
delivery of such documents by the Mayor, and attestation by the City Clerk, shall constitute
evidence that such items are consistent with the terms of this resolution and have been duly
authorized, executed and delivered by the City and are enforceable against the City in
accordance with their terms, subject to customary exceptions relating to bankruptcy,
reorganization, insolvency and other laws affecting creditors'rights. The Mayor, City Manager
and City Attorney are further authorized to take such other actions as may be required to
effectuate the terms and intent of this resolution. In the event of the absence or disability of the
Mayor, City Clerk or City Attorney, the acting Mayor, the acting City Clerk or the Assistant City
Attorney are hereby authorized to act in the place and stead of the Mayor, City Clerk and City
Attorney, and to take all actions and execute all documents approved hereby.
1.04. Official Statement. The Mayor, City Manager and the City Attorney, are
authorized, in cooperation with the Purchaser, to prepare an Official Statement to be distributed
to prospective purchasers of the Bonds. The Mayor is hereby authorized and directed to
approve, and, if requested, to execute the final Official Statement.
SECTION 2. BOND TERMS. EXECUTION AND DELIVERY.
2.01. Execution. Authentication and Deliverv. The Bonds shall be prepazed
under the direction of the City Manager and shall be executed and authenticated on behalf of the
City by the signature of the Mayor and attested by the City Clerk and countersigned by an
attorney resident and licensed to practice in the State of South Dakota. All signatures may be
printed, lithographed or engraved facsimiles of the original. In case any officer whose signature
or a facsimile of whose signature sha11 appear on the Bonds shall cease to be such of�cer before
the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient
for a11 purposes, the same as if such officer had remained in office until delivery.
Notwithstanding such execution, no Bond sha11 be valid or obligatory for any purpose or entitled
to any security or benefit under this resolution unless and until a certificate of authentication on
the Bond has been duly executed by the manual signature of an authorized representative of the
Registrar. Certificates of authentication on different Bonds need not be signed by the same
representative. The executed certificate of authentication on each Bond shall be conclusive
evidence that it has been authenticated and delivered under this Resolution. After the Bonds
have been so prepared and executed, the City Manager shall deliver them to the Registrar for
delivery to the Purchaser on receipt of the purchase price heretofore agreed upon, and the
Purchaser shall not be required to see to the application thereof.
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2.02. Maturities and Interest Rates. The Bonds sha11 be issued in the
denomination of$5,000 each, or any integral multiple thereof, shall mature on the dates and in
the respective years and amounts, and shall bear interest from date of original issue until paid or
duly called for redemption at the respective annual rates stated opposite such maturity years as
shown on E�ibit A to the Bond Purchase Agreement. The Bonds shall be issuable only in fully
registered form and may be issued either in book-entry only form or in physical form. The
interest thereon and, upon sunender of each Bond, the principal amount thereof, shall be payable
by check or draft issued by the Registrar described herein; provided if the Bonds are registered in
the name of a securities depository, or a nominee thereof, in accordance with Section 2.08
hereof, principal and interest shall be payable in accordance with the operational arrangements of
the securities depository.
2.03. Dates and Interest Payment Dates. Each Bond sha11 bear a date of original
issue as of the first day of the month in which the Bonds are delivered to the Purchaser. Upon
the initial delivery of the Bonds pursuant to Section 2.01 and upon any subsequent transfer or
exchange pursuant to Section 2.06, the date of authentication shall be noted on each Bond so
delivered, exchanged or transferred. The interest on the Bonds shall be payable on the dates
shown on Exhibit A to the Bond Purchase Agreement, to the owner of record thereof as the close
of business on the fifteenth day of the immediately preceding month, whether or not such day is
a business day. Interest shall be computed on the basis of a 360 day year composed of twelve 30
day months.
2.04. Redemption. The Bonds shall be subject to redemption prior to maturity, at
the option of the City, in the years and at the redemption prices set forth in E�ibit A to the Bond
Purchase Agreement in such order of maturities as may be designated by the City and, within
any maturity, in $5,000 principal amounts selected by the Registrar by lot, assigned in proportion
to their principal amounts. The City Manager shall cause notice of the ca11 for redemption
thereof to be published as and if required by law, and, at least thirty days prior to the designated
redemption date, shall cause notice of the call thereof for redemption to be mailed, by first class
mail (or, if applicable, by the bond depository in accordance with its customary procedures), to
the registered owners of any Bonds to be redeemed at their addresses as they appear on the bond
register described in Section 2.06 hereof, but no defect in or failure to give such mailed notice
sha11 affect the validity of proceedings for the redemption of any Bond not affected by such
defect or failure. The notice of redemption sha11 specify the redemption date, redemption price,
the numbers, interest rates and CUSIP numbers of the Bonds to be redeemed and the place at
which the Bonds are to be surrendered for payment, which is the principal office of the Registrar.
Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so
to be redeemed sha11, on the redemption date, become due and payable at the redemption price
therein specified, and from and after such date (unless the City sha11 default in the payment of the
redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon partial
redemption of any Bond, a new Bond or Bonds will be delivered to the registered owner without
charge, representing the remaining principal amount outstanding.
2.05. A�nointment of Initial Re �sg,� trar. The City hereby appoints the First
National Bank in Brookings, Brookings, South Dakota, as bond registrar, transfer agent and
paying agent (the Registrar). The Mayor is authorized to execute and deliver, and the City Clerk
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to attest, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of
the Registrar with another corporation, if the resulting corporation is a bank or trust company
authorized by law to conduct such business, such corporation shall be authorized to act as
successor Registrar. The City agrees to pay the reasonable and customary charges of the
Registrar for the services performed. The City reserves the right to remove the Registrar upon
thirty(30) days' notice and upon the appointment of a successor Registrar, in which event the
predecessor Registrar sha11 deliver all cash and Bonds in its possession to the successor Registrar
and shall deliver the bond register to the successor Registrar. On or before each principal or
interest due date, without further order of the Council, the City Manager shall transmit to the
Registrar, from the accounts described in Section 4, moneys sufficient for the payment of all
principal and interest then due.
2.06. Reg,istration. The effect of registration and the rights and duties of the City
and the Registrar with respect thereto sha11 be as follows:
(a) Re •,g�ster. 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 sunender 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 the fifteenth day of the month preceding each interest payment date and until such
interest payment date.
(c) Exchange of Bonds. Whenever any Bonds are surrendered by the registered
owner for exchange, the Registrar sha11 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 sha11 incur no liability for
the refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
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(� 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
payrnent of, or on account of, the principal of and interest on such Bond and for all other
purposes, and a11 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.
(g) Taxes, Fees and Charges. For every transfer or exchange of Bonds, the
Registrar may impose a charge upon the owner thereof suf�icient to reimburse the
Registrar for any ta� 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 sha11 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 sha11 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.
2.07. Bond Form. The Bonds shall be prepared in substantially the form
presented to and approved by this Council and on file in the office of the City Clerk.
2.08. Securities Depositorv. The Bonds sha11 be initially issued in book-entry
only form and the following provisions sha11 apply:
(a) For purposes of this section the following terms shall have the following
meanings:
"Beneficial Owner" sha11 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.
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"Participant" shall mean any broker-dealer, bank or other financial institution for
which DTC holds Bonds as securities depository.
"Representation Letter" sha11 mean the Blanket Issuer Letter of Representation
pursuant to which the sender agrees to comply with DTC's Operational Arrangements.
(b) The Bonds shall be initially issued as separately authenticated fully registered
bonds, and one Bond sha11 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 a11 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 sha11 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 a11 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 e�ent of the sum or
sums so paid. No person other than DTC sha11 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 deternrined 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) In the event 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 sha11 notify the Participants of the availability through
DTC of Bonds 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 Mayor
or City Manager is hereby authorized and directed.
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(e) In the event that any transfer or exchange of Bonds is permitted under
paragraph(b) or(c) hereof, such transfer or exchange sha11 be accomplished upon receipt by the
Registrar of the Bonds to be transfened or exchanged and appropriate instruments of transfer to
the pernutted transferee in accordance with the provisions of this resolution. In the event 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 a11 the Bonds,
the provisions of this resolution sha11 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.
SECTION 3. SPECIAL TAX FUND.
3.01. Special T�Fund. The City has established and will maintain the Special
T�Fund as a separate and special fund in the financial records of the City until a11 Bonds issued
and made payable therefrom, and interest due thereon, have been duly paid or discharged. All
collections of the Pledged Revenues, as hereinafter defined, sha11 be credited, as received, to the
Special Taa�Fund. Within the Special Tax Fund are various separate accounts to be maintained
by the City.
3.02. Pledged Revenues. Pursuant to the Act and the Ordinance, the City has
levied the Sales Tax on the sa1e, use, storage and consumption of items taxed under Sections 10-
45 and 10-46 of South Dakota Codified Laws, subject to certain exceptions. That portion of the
proceeds of the Sa1es Tax in excess of the proceeds produced by the first one percent (1%) of the
Sales T�is irrevocably pledged and appropriated to, shall be deposited to the Special T�Fund
and is referred to herein as the "Pledged Revenues." The Pledged Revenues and the Special Ta�c
Fund shall be used and applied only in the manner and order set forth in this Resolution. For
purposes of this Resolution, "Outstanding Bonds" shall mean the Bonds and any parity lien
bonds hereafter issued pursuant to this Resolution.
3.03. Construction Account. There is hereby created and established as an
account of the Special Tax Fund, a"Construction Account." There sha11 be credited to the
Construction Account the proceeds from the sale of the Bonds remaining after(a)the deposit to
the Reserve Account required by Section 3.05, and (b) payment of the(i)underwriter's discount,
(ii) original issue discount, (iii)bond insurance premium, if any, and (iv) any other expenses of
issuing the Bonds. All moneys credited to the Construction Account sha11 be applied solely to
the payment of the costs of the Projects. For the purposes of this Resolution, "costs of the
Projects" sha11 include costs of acquiring, constructing, and installing the Projects including costs
of labor, services, materials and supplies, financial, architectural, engineering, legal, accounting
and other professional expenses relating to the Projects, the costs of acquisition of properties,
rights, easements, or other interest in properties, insurance premiums, and the costs of
publishing, posting or mailing notices in connection with the Projects. All sums derived from
the investment of moneys in the Construction Account shall remain in and become part of such
account. Upon completion of the Projects and when all costs of the Projects have been paid, any
balance remaining in the Construction Account shall be credited to the Principal and Interest
Account hereinafter established.
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3.04. Principal and Interest Account. There is hereby created and established as
an account of the Special T�Fund, a"Principal and Interest Account." Immediately upon
delivery of the Bonds, there shall be credited to the Principal and Interest Account the amount of
accrued interest received from the Purchaser. There sha11 be withdrawn from the Special Tax
Fund at least monthly and credited to the Principal and Interest Account an amount which will
equal at least one-sixth(1/6th) of the principal and interest becoming due on the next succeeding
payment date with respect to the Outstanding Bonds. In a11 events there shall be credited to the
Principal and Interest Account amounts sufficient to pay the principal of and interest on the
Outstanding Bonds as the same become due.
3.05. Reserve Account. There is hereby created and established as an account in
the Special Tax Fund, a"Reserve Account." There sha11 be credited to the Reserve Account an
amount equal to the lesser of(i) 10% of the original principal amount of, (ii)the maximum
annual debt service on, or(iii) 125% of the average annual debt service on, all Outstanding
Bonds having a parity lien on the Pledged Revenues (the Minimum Reserve). The Reserve
Account may be funded either by cash and investments pernutted by South Dakota law, or by a
surety bond or similar instrument, or by a combination thereof. Thereafter, in the event the
amount on deposit in the Reserve Account shall thereafter fall below the Minimum Reserve,
additional deposits sha11 be made from the Pledged Revenues to the Reserve Account until the
Minimum Reserve is again reached. Upon the issuance of any parity lien bonds, the Minimum
Reserve established in this section shall be increased to an amount equal to the Minimum
Reserve calculated on the basis of the Outstanding Bonds including the additional parity lien
bonds then to be issued. The balance required sha11 be funded, by cash and investments or by a
surety bond or similar financial instrument or by a combinaxion thereof, on the delivery date of
the parity lien bonds. Moneys credited to the Reserve Account or draws on the surety bond may
be used only for the payment of principal of and interest on the Outstanding Bonds and sha11 be
used only in the event that there are insufficient moneys in the Principal and Interest Account to
meet such principal and interest payrnents promptly when due. The interest from any investment
of the Reserve Account shall be transferred from time to time to the Construction Account,
provided that after completion of the Projects such interest sha11 be transferred to the Principal
and Interest Account. No transfer of investment income shall be made from the Reserve
Account at any time when the balance therein is less than the Minimum Reserve. Such
investments shall be subject to the limitations of South Dakota law.
3.06. Subordinate Lien Bonds. After making the above required payments, any
remaining Pledged Revenues shall be used for the payment of the principal of and interest on any
additional sales tax revenue bonds having a lien which is subordinate to the lien of the
Outstanding Bonds, and for a reserve fund as additional security for the payment of such
subordinate lien bonds.
3.07. Deposit and Investment of Funds. The City Manager sha11 cause all
moneys pertaining to the Fund to be deposited as received with one or more banks which are
duly qualified public depositories under the provisions of Chapter 4-6A, South Dakota Codified
Laws, in a deposit account or accounts, which sha11 be maintained separate and apart from all
other accounts of the City, so long as any of the Bonds and the interest thereon shall remain
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unpaid. Any of such moneys not necessary for immediate use may be deposited with such
depository banks in savings or time deposits. No moneys shall at any time be withdrawn from
such deposit accounts except for the purposes of the Fund as authorized in this Resolution;
except that moneys from time to time on hand in the Fund may at any time, in the discretion of
this Council, be invested in securities pernutted by the provisions of Section 4-5-6, South Dakota
Codified Laws; provided that moneys on hand in the Reserve Account may be invested only in
direct, general obligations of the United States of America maturing and bearing interest at the
times and in the amounts estimated to be required to provide cash when needed for the purposes
of the respective accounts. Income received from the deposit or investment of moneys shall be
credited to the account from whose moneys the deposit was made or the investment was
purchased, and handled and accounted for in the same manner as other moneys in that account.
SECTION 4. ADDITIONAL BONDS. No additional Bonds shall be issued and
made payable from the Pledged Revenues and having a lien upon such revenues and the Special
T�Fund which is prior to or superior to the lien of the Bonds authorized herein. Nothing in this
Resolution shall be construed in such manner as to prevent the issuance by the City of additional
bonds payable from the Pledged Revenues and constituting a lien upon the Pledged Revenues
and the Special Tax Fund equal to or on a parity with the lien of the Bonds authorized herein,
provided (i)the City is current in the payment of principal and interest on the Outstanding Bonds
and is cunent in the accumulations required for the Principal and Interest Account and the
Reserve Account, (ii)the City is in compliance with the covenants herein contained, and either
(iii)the Pledged Revenues collected by the City in the last preceding fiscal year(as determined
by the City) is sufficient to cover 1.25 times the combined average annual principal and interest
requirements on the Outstanding Bonds, and the proposed parity lien bonds, or(iv)the estimated
Pledged Revenues to be collected in the fiscal year in which the proposed parity lien bonds will
be issued shall be at least equal to 1.25 times the combined average annual principal and interest
requirements of the Outstanding Bonds and the proposed parity lien bonds. Nothing herein shall
prevent the City from issuing Bonds payable from the Pledged Revenues and the Special Tax
Fund and having a lien thereon which is junior and subordinate to the lien of the Bonds
authorized herein.
SECTION 5. DEFEASANCE. When all of the Bonds have been discharged as
provided in this section, a11 pledges, covenants and other rights granted by this resolution shall
cease. The City may discharge its obligations with respect to any Bonds which are due on any
date by depositing with the 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, the same may nevertheless be
discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with
interest accrued from the due date of such deposit. The City may also discharge its obligations
with respect to any prepayable Bonds according to their terms by depositing with the Registrar
on or before that date an amount equal to the principal and interest which are then due, provided
that notice of such redemption has been duly given as provided herein. 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
bank qualified by law to act as an escrow agent for this purpose, cash and/or securities which are
general obligations of the United States or securities of United States agencies which are
authorized by law to be so deposited, bearing interest payable at such times and at such rates and
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maturing on such dates, as shall be required to pay all principal and interest to become due on
such Bonds to maturity or the redemption date thereof, as the case may be.
SECTION 6. COVENANTS OF TI� CITY. The City hereby irrevocably
covenants and agees with each and every holder of the Bonds, that so long as any of the Bonds
remain outstanding:
(a) it will not amend or repeal the Ordinance relating to the Sa1es T�by
decreasing the sales tax rate or the allocation of revenues thereof to the Special T�Fund,
or in any way that would adversely af�ect the amount of Sales T�revenues which would
otherwise be collected and deposited to Special T�Fund. However, nothing sha11
prevent the City from amending the Ordinance in order to make certain changes in the
administration, collection or enforcement of the Sales Tax, provided that such changes
would not materially adversely affect the owners of the Bonds;
(b) it will administer, enforce, and collect, or cause to be administered, enforced
or collected, the Sa1es Tax authorized by the Ordinance, and shall take such necessary
action to collect delinquent payments in accordance with law;
(c) it will keep or cause to be kept such books and records showing the proceeds
of the Sa1es Tax, in which complete entries sha11 be made in accordance with standard
principles of accounting, and any owner of any Bond shall have the right at all reasonable
times to inspect the records and accounts relating to the collection and receipts of such
Sales T�; and
(d) in the event the Sa1es Tax of the City is replaced and superseded by a state
collected-locally shared sales t�or taxes, or is replaced and superseded in some other
manner from some other source or sources, the revenues derived by the City from the
replacement source or sources, as received by the City sha11 be appropriated in the same
manner as if the City had levied and imposed a sales tax. From and after the date of a
replacement, the Outstanding Bonds shall have a first and prior lien, but not necessarily
an exclusive such lien, upon such replacement revenues to the extent therein specified.
SECTION 7. 1NVESTMENTS� ARBITRAGE; QUALIFIED TAX-EXEMPT
OBLIGATIONS AND REIlVIBURSEMENT.
7.01. Covenant. The City covenants and agrees with the registered owners from
time to time of the Bonds that it will not take or permit to be taken by any of its officers,
employees or agents any action which would cause the interest on the Bonds to become
includible in gross income of the recipient under the Internal Revenue Code of 1986, as amended
(the Code), and applicable Treasury Regulations(the Regulations) and covenants to take any and
all actions within its powers to ensure that the interest on the Bonds will not become includible
in goss income of the recipient under the Code and the Regulations. The City Manager shall
ascertain monthly the amount on deposit in the Principal and Interest Account. If the amount on
deposit therein, ever exceeds the aggregate amount of principal and interest due and payable
from the Principal and Interest Account within 13 months thereafter by an amount exceeding
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$100,000, such excess sha11 either(1) not be invested except at a yield equal to or less than the
yield borne by the Bonds, or(2) be used to prepay and redeem principal of the Bonds.
7.02. Certification. The Mayor or City Manager, being the officers of the City
charged with the responsibility for issuing the Bonds pursuant to this resolution, are 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 Regulations.
7.03. Qualified Taa�-Exempt Obligations. This Council hereby designates the
Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code
relating to the disallowance of interest expense for financial institutions, and hereby finds that
the reasonably anticipated amount of qualified tax-exempt obligations (within the meaning of
Section 265(b)(3) of the Code)which will be issued by the City and a11 subordinate entities
thereof during calendar year 2001 does not exceed $10,000,000.
7.04. Arbitrage Rebate Exemption. The City acknowledges that the Bonds are
subject to the rebate requirements of Section 148(� of the Code. The City covenants and agrees
to retain such records, make such determinations, file such reports and documents and pay such
amounts at such times as are required under said Section 148(� and applicable Regulations to
preserve the exclusion of interest on the Bonds from gross income for federal income t�
purpose, unless the Bonds qualify for one of the exceptions from the rebate requirement under
Section 148(� of the Code and Sections 1.148-7 of the Regulations. In furtherance of the
foregoing, the Mayor or City Manager are hereby authorized and directed to execute a tax or
rebate certificate, in the form prescribed by Bond Counsel, and the City hereby covenants and
agrees to observe and perform the covenants and agreements contained therein, unless amended
or ternunated in accordance with the provisions thereof.
7.05. Reimbursement. The City certifies that the proceeds of the Bonds will not
be used by the City to reimburse itself for any expenditure with respect to the Projects which the
City paid or will have paid more than 60 days prior to the issuance of the Bonds unless, with
respect to such prior expenditures, the City shall have made a declaration of official intent which
complies with the provisions of Section 1.150-2 of the Regulations; provided that a declaration
of official intent shall not be required (i) with respect to certain de minimis expenditures, if any,
with respect to the Projects meeting the requirements of Section 1.150-2(�(1) of the Regulations,
or(ii)with respect to "preliminary expenditures" for the Projects as defined in Section 1.150-
2(�(2) of the Regulations, including engineering or architectural expenses and similar
preparatory expenses, which in the aggregate do not exceed 20% of the "issue price" of the
Bonds.
SECTION 8. CONTINUING DISCLOSURE. The City acknowledges that the
Bonds are subject to the continuing disclosure requirements of Rule 15c2-12 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934 (17 C.F.R. §
240.15c2-12) (as in effect and interpreted from time to time, the Rule). The Rule governs the
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obligations of certain underwriters to require that issuers of municipal obligations enter into
agreements for the benefit of the holders of the obligations to provide continuing disclosure with
respect to the obligations. To provide for the public availability of certain information relating to
the Bonds and the security therefor and to permit participating underwriters in the primary
offering of the Bonds to comply with the Rule, which will enhance the marketability of the
Bonds, the Mayor or City Manager are hereby authorized and directed to execute an Undertaking
of Continuing Disclosure (the Undertaking), by which the City agrees to provide such
information, either directly or through a disclosure agent. The City hereby covenants and agrees
to observe and perform the covenants and agreements contained in the Undertaking, unless
amended or terminated in accordance with the provisions thereof, for the benefit of the registered
owners or beneficial owners from time to time of the Outstanding Bonds as provided in the
Undertaking.
SECTION 9. CERTIFICATION OF PROCEEDINGS. The officers of the City
are authorized and directed to prepare and furnish to the Purchaser and to Dorsey&Whitney
LLP, Bond Counsel, certified copies of a11 proceedings and records of the City relating to the
authorization and issuance of the Bonds and such other affidavits and certificates as may
reasonably be required to show the facts relating to the legality and marketability of the Bonds as
such facts appear from the officers'books and records or as are otherwise known to them. All
such certified copies, certificates and affidavits, including any heretofore furnished, shall
constitute representations of the City as to the correctness of the facts recited therein and the
actions stated therein to have been taken.
SECTION 10. AMENDMENT. This resolution may be amended at any time
prior to the issuance of the Bonds by adoption of an administrative resolution.
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Upon vote being taken thereon, the following voted in favor thereof: Virgil Herriott, Nate Bibby,
Bill Davidson, Tom Bozied, Keri Weems, Sam Artz, and Mike McClemans
and the following voted against the same: None
whereupon the resolution was declared duly passed and adopted, and was signed by the Mayor
and attested by the City Clerk.
CITY OF BROOKINGS
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EXHIBIT A
Description of Projects
Ty�e of Improvement Estimated Cost
Performing arts center $6,000,000
to be built in conjunction
with South Dakota State
University
Hockey facility $3,000,000
A-1
CERTIFICATE OF MINUTES RELATING TO
SALES TAX REVENUE BONDS, SERIES 2001
Issuer: City of Brookings, South Dakota
Governing Body: City Council
Kind, date, time and place of ineeting: A regular meeting, held on February 12, 2001 at the
City offices.
Members present: Virgil Herriott, Nate Bibby, Bill Davidson, Tom Bozied, Keri Weems,
Sam Artz, and Mike McClemans
Members absenx: None
Member Artz introduced the following resolution and moved its adoption, which motion was
seconded by Member McClemans.
Documents Attached:
Minutes of said meeting (pages): City Council Minutes of February 12, 2001
RESOLUTION RELATING TO SALES TAX REVENUE BONDS, SERIES 2001;
AUTHORIZING THE ISSUANCE AND MAKING PROVISIONS FOR THEIR
PAYMENT
I, the undersigned, being the duly qualified and acting recording officer of the public
corporation issuing the bonds referred to in the title of this certificate, certify that the documents
attached hereto, as described above, have been carefully compared with the original records of
said corporation in my legal custody, from which they have been transcribed; that said
documents are a conect and complete transcript of the minutes of a meeting of the governing
body of said corporation, and correct and complete copies of all resolutions and other actions
taken and of a11 documents approved by the governing body at said meeting, so far as they relate
to said bonds; and that said meeting was duly held by the governing body at the time and place
and was attended throughout by the members indicated above, pursuant to call and notice of such
meeting given as required by law.
WITNESS my hand officially as such recording officer on February 12, 2001.
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CITY OF
BROOKINGS
Brookings, South Dakota
City Clerk Certification
I, the undersigned, being the duly appointed, qualified and acting Clerk of the City of
Brookings, South Dakota, hereby certify that the foregoing Resolution 09-01 is a true, correct
and accurate copy as duly and lawfully passed and adopted by the governing body of the city of
Brookings on the 12th day of February, 2001.
ATTEST:
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Nosti �'°S�iP Thornes, City Clerk
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