HomeMy WebLinkAboutCCMinutes_2006_10_10 205
Brookings City Council
October 10, 2006
The Bxookings City Council held a meeting on Tuesday, October 10,2006 at 4:00 p.m.,at City Hall
with the following members present: Mayor Scott Munsterman,Council Members Tom Bezdichek,
Julie Whaley,Mike Baxdey, Ginger Thomson,Tim Reed, and Michael Reitz. Interim City Manager
Dennis Falken,City Attorney Steve Britzman,and City Clerk Shari Thornes were also present.
4:00 P.M. WORK SESSION
Brookings Munici�al Utilities. Steve MeyeY and othex representatives of the Brookings Municipal
Utilities were present for this discussion of the proposed lease purchase. Meyer explained that the
proposed resolution on the action agenda was similar to those done in 1998 and 1999. A lease-
puYChase is a means of financing used by muxucipalities that is exempt from the statutoxy debt limit.
Dougherty Summit Securities LLC would be the underwriter and First Bank and Trust would be the
Trustee. The proposed lease-purchase of$8 million is for a term of 20 years at an intexest rate not
to exceed 6 percent. BMU is still negotiating the rates and terms. He noted there is a non-
appxopriation clause,which is a technical term in leases that states the borrowex is not under any
obligation if terminated eaYly;however,very few cities exercise that option because it is damaging to
credit rating and standing. It is BMU's intent to caxry the lease-purchase to the full 20 year term.
Laura Julius reviewed BMU's ability to meet the debt service requirements to include current ratio,
debt to asset ratio,debt to equity ratio,and current and future coverage xatios.
Reitz asked if the net income available for debt service was put into the genexal fund each year.
Julius said not necessarily;it's a true net income but takes out non-cash related items (intexest
expense, etc.) and reflects net income available for debt.
Meyer said the cost breakdown shows $4M from telephone, $3M fxom electric,and�500,000 from
water and$500,000 from wastewater funds. Reitz asked what BMU buys with the$8M. Meyer said
specific assets are purchased for each of those depaxttnents: telephone fund-fiber cable,electric
fund-conductor& switch geax deploying with combined projects, and water&wastewater- 6th
St.xeet project replacement of inetal mains with plastic.
Reitz asked if the$8M was to replace thixigs already paid for. Meyer xesponded yes, some.
Meyer said they plan to convert the electric infrastructure from overhead to underground incxeasing
the voltage and capaciry. Paul Melby,Utilities Operations Manager, said the conversion project
started in the 1980s. He noted pxoblems with the overhead system infringing an the tree canopy.
Transformers for the undexground system will be located in backyards and boulevards. All the old
substations will be eliminated. Benefits of the new system include increased reliability,higher '
capaciry and aesthetics.
Another infrastructure project BMU is working on is replacement of water and wastewater mains on
6th Street. This wasn't a planned project;however,since the street was pulled up by the State Dept.
of Transportation it was a good time to make the upgxades.
Jim Adkins, Swiftel Communications,cited many benefits to the installation of fiber.optic cable to
replace the aging copper cable plant. He noted that fiber optics have virtually unlimited capacity and
is the prefexred infYastructure to pxovide broadband connection.
Bezdichek asked if additional profits come in would BMU consider increasing the transfexs to
general government. Meyex said the BMU Board and staff analyzes the transfer every time they
assess a long term planning pxocess. It is their policy to transfer as much as possible. If the Utilities
enterprises are more profitable than expected, the city could expect the transfers to be increased.
Bezdichek asked if BMU sells an asset, does the payment go to BMU or does it go to the City
Council to possibly relieve some debt. Meyer said he couldn't answer the question specifically from
a legal standpoint,but would anticipate that if a majox utility asset were sold,both the Utility Boaxd
and the City Council would be involved in how to use those proceeds.
Review of 6:00 p.m. meeting to�ics. The Interim Ciry Manager responded to questions
pertaining to the action items on the agenda.
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Briefin�on October 24`� agenda items. Shari Thornes,Bxookings City Clerk,provided a briefing
on futuxe agenda items.
Code Enforcement. Reitz asked when the code enforcement topic was scheduled fox council
discussion. It was noted that the item had not been scheduled because the Council had not taken
official action to place it on an agenda. A motion was made by Reitz, seconded by Bartley, to
schedule a general discussion on code enfoxcement on the October 24`�agenda. All present voted
yes;motion carried.
Briefing on upcomin�council invitations and obligations. Thornes reviewed the City
Council's upcoming invitations and obligations.
Downtown Streetscape Pro�ect. Dennis Falken,Interim Ciry Manager, said ciry staff needs
direction from the Council on how to proceed with this project. He referenced the following
background information that was provided in the Council packet:
His�
In 2003, the City Council discussed the timeline and process steps for the Downtown Streetscape
Project,which received a federally HUD grant of$360,000. In 2003 and 2004, the City Council
appointed the Downtown Stteetscape Committee and authorized Request for Proposals.
Designworks,Inc. of Rapid City was retained fox the Downtown Streetscape Project with Randy
Fisher,Landscape Architect,updating the streetscape design and Carey Bretsch,Civil Design Inc.
coordinating the civil engineering features. The design was pxesented to the City Council in
November 2004.
Utilit�Issue:
In Decembex 2004,the City Council appxoved a contract with Civil Design,Inc. to pxepare a
Facilities Plan for the Downtown Main Avenue Utilities Improvements. This analysis was not part
of the original Downtown Streetscape Study but was intended to evaluate the cost of replacing any
utility line that may be deficient. The rationale was that improvements made to the suxface would
not be distutbed by repair of underground utilities once the surface improvements axe complete.
The Facilities plan examined alternative options for construction of utilities,which included the
water main,sanitary sewer main and water and sewer services. The Utility Replacement Plan does
include replacement of curb and gutter, sidewalk and street surfacing.
Current Estimates:
Randy Fisher,Designworks, Inc.updated the cost estimate fot the Streetscape Only Project. He
used inflation percentages experienced in the industry since 2004 and estimated into the future,
calculated on a total project basis. His estimate is as follows:
Original Streetsca�e Cost Estimates Cost estimates without sidewalks
2004 Estimate $1,200,000 $868,320
200G Plus 6.4% $1,276.800 $923,892
2008 Plus 9.6% $1,399,373 $1,012,586
2008 Including Signal $1,549,373 $1,162,586
The figures include engineering fees and a contingency but no work on under-the-street utilities or
utility service lines. The original estimate did not include xeplacement of the signals at 3rd&Main,
which would be an additional$150,000. The Master Plan contemplates 4-way stops at 4th and 5th
Street,which costs are included in the estimate.
Carey Bxetsch,Civil Design Inc. updated the cost estimate for the Utility Only Project (using 2006
dollars),which is the following: Utility Project Cost Esrimates (including sidewalks): Cost of
Services-$301,493;Remove&Replace Water Main-$206,985;Remove&Replace Sewer Main-
$136,121;Remove&Replace Sutfacing-$532,518;Remove&Replace Cuxb &Gutter-$ 51,567;
Remove&Replace Sidewalk-$364,580;Contingency&Engineering-$205,133 for a total of
$1,798,397 for utilities only.
Discussion:
At this point in time it would be very difficult to meet a 2007 construction timetable,even for just
the Streetscape. Some factors to consider:
• In order to begin construction on April 1 st,bids should be let and a contract in place no later
than Feb.1 st.
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� The Master Plan we have is conceptual,in that specifics of materials, final design of
intersections, street light selection and many othex details are not finalized. Reaching consensus
on these items will take time.
■ Negoriating an architect/engineering contract and the final design and developing bid
specifications would require a minimum of 150-180 days, and it should also include at least one
more public meeting with property owners. A more leisurely design process would be
advantageous.
• The amount of funding participation by property owners,if any, towards the cost of the
streetscape, has not been determined at this time. Method of collection of these funds will
require an assessment process.
■ The Federal HUD grant is good unti12010,but that would mean the project should be
completely done and paid fox by that date. 2008 would be the pteferred year to do the work,as
some of it could extend into 2009 for completion.
The Council was given a handout with cost estimates for the streetscape and the utilities portion.
Falken said the total project,including utilities,is estimated at$2.9 million for 2008 costs, for a total
city cost of$1.7 million. Streetscape only would be approximately$1.5 million.
Jackie Lanning,Ciry Engineer,reported that the street is in good condition and would withstand a
number of years with chip sealing and overlay maintenance.
Bretsch said when the utilities were examined two years ago the e�sting services to businesses were
found to be in poor condition. He said BMU's position was there was nothing wrong with the water
and sewer mains and both could last another 20 years. The lines from the main lines to the
buildings would be the responsibility of the business owners. If the street was torn up it would
make sense to replace the mains and the services to the businesses.
Munsterman asked if the services could also last another 20 years. Bretsch said that would be hard
to predict. The pipes are functioning and have been there 80 years. Some businesses have upgraded
their service to increase water for spxinkler systems.
Whaley asked how many water main breaks had occurred downtown in the last year. Paul Melby,
BMU, said none,but some businesses installed new lines and tore up the street.
Bezdichek asked if the water mains would break if theYe were a fire downtown. Melby said all older
parts of town axe subject to that happening when the hydrants are opened and closed.
Patty Kratochvil, owner of'Threads of Memories building, said they've had the sewer back up in the
basement and dug up the stxeet three times to fu�the pxoblem. She feels there axe more problems
waiting to happen.
Falken said replacement of the utilities would be a decision the Council must make. The utilities
won't be replaced unless the street is dug up and the street is in good condition. If the utilities are to
be replaced there would need to be an assessment project.
Britzman agreed that the lines from the main to the buildings are the responsibility of the property
owner. He noted that the City has the authority to dictate what happens with those lines. The City
would need to determine the cost of the ovexall pxoject and level of owner participation. This has
not been completely analyzed.
Falken said the estimate is$479,000 fox the water main, sewer main,and sidewalks.
Allyn Frerichs,Park,Recreation&Forestry Superintendent, said he asked the Design Works firm to
prepaxe updated estimates for the streetscape project. The 2008 cost is estimated at$1.5 million,a
6.4%increase from 2004-2006 and 9.6%incxease fxom 2006-2008. The gxant must be spent by
2010,but the pYOject should be done in 2008 in oxder to be done on time. The grant is a matching
grant but no specific dollar amount. The streetscape project is for Main Avenue only and didn't
include the signals or utilities in the original estimates. There would be no stteet work other than
the bump-out corners.
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Munsterman asked if the services could be installed without teaxing up Main Avenue. Bretsch said
yes,but it wouldn't make sense to install services without upgrading the mains. BMU will only
upgrade the mains if the street comes off.
Bezdichek noted that the old abandoned steam tunnel runs down Main and depending on which
side of the street you are on could mean additional costs. He felt one side shouldn't pay more than
the other.
Falken said staff is investigating grant options. This project is not eligible for CDBG funds. The
City can apply for the State Water Fund loan and grant program but First Planning District needs to
know by Novembex in oxder to prepaxe the application.
Lanning said they are also looking at ISTEA funds and hazard grant funding from DOT.
Falken said the city will be at least$370,000 short fot the streetscape project. It was clarified that
the round-abouts axe not part of the streetscape project estimate. The sidewalk, other than the
bump-out area,will be standard design and not as difficult to match.
Bartley asked if the utilities services could be tunnel bored. Btetsch said there wasn't adequate
distance to bore and would cost more than an open cut.
Basdey asked Doris Roden,DBI Program Manager,if there was consensus of property owners that
there would be participation level if the City removed the street to repla.ce the mains. Roden said
she had not contacted pYOperty owners because this is a city project. She commented that owners
do anticipate paying a share of the project,but not to the point whexe it's cost prohibitive. She also
noted that not everyone has a back door and thexe needs to be a close parmership with the City for
the least impact on those business owners. She asked if those who have already installed new
services would be recharged for those services.
Reed asked about the TIF District that was earliet pxoposed. Roden said the window had closed on
that project. It needed to be done before the First Bank&Trust building project went on the tax
xoles on November 15L. There isn't another laxge building project anticipated in downtown that
would generate that level of income.
Falken said city staff needs direction in order to start moving forward for design and engineering for
a 2008 project.
Whaley said she felt the city should do the whole project and there was no reason to spend$1.5M
on something that would just be torn up later. She asked what the business owners want to do.
Falken said the city hasn't met with the owners because a total project cost was needed first to
identify costs and patticipation shares. He also needed direction from the council on whether to do
utilities only, streetscape only, or both projects.
Whaley asked Steve Meyer,BMU,if the Utilities could fit this into their 2008 project schedule. Yes,
they would woxk hard to fit it in.
Roden said there were good conversations with building owners some time ago and there was good
support in getting this project done,but that's been a couple of pears. Former city manager Alan
Lanning referenced assessment estimates of$100/running foot ranging from $2,500 to$10,000.
Falken noted that Senator Tim Johnson was xecendy in town and asked how the project was going.
He facilitated Brookings getting the funds back in 2001 when Ciry Manager Mike Williams applied
fox the grant.
Munste�nan said the City Council needs to decide if the streetscape project is important and if we
should do it.
Baxdey said yes,it is very important. When the retail development project was going on the Ciry
Council suggested it would be wonderful fox the streetscape to be completed at the same time. A
strong downtown is very important.
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Falken said city staff would need to come up with estimated costs and the Council will need to
identify how much should be the burden of the owners. Once that is determined,then public
meetings would start.
Munsterman recommended a work session in November to get an update on second penny funds
and projects.
Whaley said the pxoject should be all or nothing. Some subsidy funding may be reduced for a while,
but the city needs to fmd a way to pay for the entire project.
Lanning noted that public hearings will be xequixed. Thornes clarified that public notices would
need to be published by late November for December council action on the state water fund grant
project.
Reed agreed that the City should do as much of the project as possible within the constraints fox
funding.
6:00 P.M. CITY COUNCIL MEETING
Consent Agenda: A motion was made by Bardey, seconded by Reitz,to approve the consent agenda
which included:
A. Agenda.
B. Minutes (9/26/06).
C. Appointtnent-Action to appoint Officer Lee Lunt to the Traffic Safety Coinmittee.
D. Action on Resolution No. 105-06, a Final Change Order for Liquor Store Shelving
Project.
Resolution No.105-06
A Resolution Authorizing Change Otder CCO#2(Final)For
Brookings Liquor Store Shelving Project,Bid Package#1
Taylor Industries,Brooldngs,SD
BE IT RESOLVED by the City Council that the following change order be allowed for Liquor Store
SheIving Project:Change Oxder Number 2(final):Adjust base bid fox Brookings Liquor Store
Shelving Project,Bid Package#1 (Permanent steel floor&wall shelving units) for a total increase of
$0.00 to final out the project.
E. Action on Resolution No. 106-06, a Final Change Order for 2006-44PRK Soccer
Cornplex Paving Project.
Resolution No.106-06
A Resolution Authorizing Change Order CCO#1(FINAL)For
2006-04PRK Soccer Complex Paving Ptoject
Bowes Construction Inc.,Brookings,SD
BE IT RESOLVED by the Ciry Council that the following change order be allowed for 2006-04PRK
Soccer Complex Paving Project:Change Order Number 1(final):
Adjust bid quantities to the as-built quantities,at the appxopriate unit prices as bid for a total decxease
of$6,035.89.
F. Action to approve an I-1R Site Plan for Midwest Micro-Tek.
G. Appointment-Action to appoint Jessie Kuechenmeister to the Brookings Committee for
People who have Disabilities, filling an unexpired term to January 1,2009.
On the consent agenda, all present voted yes;motion carried.
18`Reading: Ordinance No.36-06—Zoning: Fi�st xeading was held on Ordinance No. 36-06,an
Oxdinance Amending the Zoning Ordinances of the City Of Brookings by Establishing Temporary
Zoning Control Concexning Animated Signs and Declaring an Emergency. Public Hearing
October 24, 2006
2°a Reading: House Moving. Public hearing and action was held on a house moving request
from Peg and Ken James to move a single-family ranch sryle house with attached garage ftom the
United Burlding Center in Brookings to Lot 16,Parsley Way Addition in the N 1/2 of the SE1/4 of
Section 10-T109N-R50W,also known as 405 Wicklow Lane. Motion was made by Reed, seconded
by Whaley, to approve. All present voted yes;motion carried.
Resolution No. 107-06—Amendment D. A motion was made by Thomson,seconded by Reed,
to approve Resolution No. 107-06,perta.ining to Amendment D, an Amendment to Article XI,
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Section 2 of the SD Constitution,relating to real property assessment for taxation. All present
voted yes;motion carried.
Resolution#107-06-Opposing Amendment D
A Constitutional Amendment on the general election ballot which would alter the method of
assessing valuation of property for the purpose of taxation.
Whereas: Amendment D places a tax system in the constitution that will cause a shift of property
taxes so people most recendy puxchasing property will pay a dispxoportional amount of taxes;and
Whereas: Those most harmed by this tax shift will be senior,young families,first time home buyers
and new businesses;and
Whereas: Amendment D xesults in two similai homes paying significantly dissimilar tax bills which
will create inequities within neighborhoods;and
Whereas: The state has five prograxns in place to help the elderly and disabled to pay property taxes;
and
Whereas: Amendment D will hurt farm families that seek to consolidate farm land and achieve
needed economic scales of efficienry by incxeasing the taxes on the newly purchased land;and
DUhereas: Amendment D will require a long list of legislative remedies before it can be functional,
many of which will require a 2/3rds vote of the legislature and none of which can be guaxanteed to
pass;and
Whereas: Amendment D will cost schools an estimated$15 million by reducing the assessed
valuations to 2003 and limiting increases to those valuations;and
Whereas: South Dakota voters have iejected every othex proposed eacperimental change in the
property tax system,defeating 5 other ill-advised restructuring attempts;
Therefore be it resolved by the Brookings City Council that Amendxnent D is not in the best intexests
of the members of this organization or the citizens of South Dakota and that it should be defeated in
the November 200G election.
Be it Furthet Resolved that the Brookings City Council will lend any and all appropriate suppoxt to
the efforts of the coalition urging votexs to Vote No on D including officially announcing this
resolution,joining the coalition,helping communicate the messages of the coaiition and when
possible assisting with raising funds.
Resolution No. 108-06—Lease-Puxchase. A motion was made by Bartley,seconded by Reed, to
approve Resolution No. 108-06, a resolution Relating To Lease-Purchase Of City Facilities;
Authorizing The Execution And Delivery Of A Ground Lease And Easement Agreement And A
Lease-Purchase Agreement And Approving And Authorizing Execution Of Related Doctunents.
Di,rcus�ion: KeitZ expre.c.red concern why a bond i.c needed if,�6.4 of the,$8.0 million project is already completea�
Meyer.raid theyear-end financial pmjection.r include the a.r.rum�ition of a bond. KeitZ que.rtioned if BMU u�ould
require additional fznancing for the cable video project. Meyer said they lvon't be returning to the Council for any more
funding. On the motion: All present voted yes;except Reitz voted no;motion carried.
Resolution No.108-06
Resolution Relating To Lease-Purchase of City Facilities;Authorizing the Execution and Delivery of A
Ground Lease and Easement Agreement and A Lease-Putchase Agreement and Approving and
Authorizing Execution of Related Documents
BE IT RESOLVED by the Ciry Council of the City of Brookings,South Dakota(the City),as follows:
Section i. 'tals.
1.01. The City is authorized by South Dakota Codifled Laws,Chapters 9-40 and 9-41,as amended(together,
the Act),and the ciry charter,to acquire land and acquire,construct and equip imptovements consisting of (i)the
installation of underground electric cabling and the upgrading of voltage levels to cunent standazds,(ii)the xeplacement
of water and wastewater mains with new plastic mains,and(iri)the installation of new fiber optic cabling and other
improvements to the telephone system. Pursuant to the Act and the city charter,the City has established the Brookings
�funicipal Utilities(the Utiliry)to provide such services. The governing body finds that it is necessary and appropriate to
acquixe and construct the interests in land,impsovements,and equipment(the Facilities)described in the I.ease(as
hereinafter defined).
1.02. The City has agxeed with First Bank&Trust,Brookings,South Dakota(the Trustee)that the Trustee
will,pursuant to a Ground Lease and Easement Agreement between the City and the Trustee(the Ground Lease),
acquiue certain interests in real property(the Land,including any Facilities now in existence,which are to be repaired or
renovated)from the City,and the Trustee will lease its intezest in the Land and lease and agree to sell the Facilities to be
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acqu�ed,renovated,constructed and equipped thereon to the City puxsuant to a Lease-Purchase Agreement between the
Trustee and the City(the Lease).
1.03. The Trustee will execute and deliver a Declaration of Trust(the Trust Agreement),joined in by the City,
pursuant to which the Trustee will(i)issue Cexrificates of Parricipation(the Certificates)in the lease payments to be
made by the City undex the Lease and(u)xeceive,hold and invest the proceeds of the sale of the Certificates and
disburse such pxoceeds fox payment of Construction Costs and Costs of Issuance(as defined in the Lease).
1.04. Fixst Bank&Trust(the Purchasex)has agreed to purchase the Certificates on the terms and conditions
hexeinaftex set forth.
1.05. Forxns of the following docuxnents relating to the Facilities(the Docuxnents)will be prepared and
submitted to the City and,when received,are hereby directed to be filed with the City Clerk:(a)the Lease;(b)the Trust
Agreement;(c)the Ground Lease;and(d)the Cextificate Puxchase Agreement described in Section 2.
Section 2. A��xovals.
2.01. Authorization and A�pxoval of the Documents. The financing described above is found to be favoxable
and is hereby approved. The Mayor and City Clerk aze authorized to appxove the execution and delivery of the Lease
and the Certificates,in a principal amount not to exceed$8,000,000,plus a reserve fund,capitalized intexest(not
exceeding one yeai),the premium for qualified cxedit enhancement,if any,and costs of issuance and plus any original
issue discount(not exceeding 2.00%of pai),the Certificates to beax interest at a rate or rates per annum resulting in an
average interest rate not greater than 6.00%per annum and to mature over a period of not to exceed 20 years. The
Mayor and City Clerk are d�ected to enter into a Certificate Purchase Agreement with the Purchasex whereby the
Purchaser will agxee to purchase the Certificates;the execution of the Certificate Purchase Agreement by the Mayor and
City Clerk shall be conclusive evidence of their approval of the principal amount,purchase price,interest iates and other
terms set forth therein. T'he Mayor,City Clerk and City Attomey are authorized to approve the final forms of
Documents and the Mayor and City Clerk are directed to execute the Documents. Copies of all Documents shall be
delivered,filed and recorded as provided therein. The Mayor,City Clerk and City Attorney are also authorized and
dixected to execute such other instruments as may be requixed to give effect to the uansactions hexein contemplated.
The City will cooperate in the issuance of the Certificates and the Mayor,City Clerk and the City Attorney shall execute
such other instruments as are necessary to the issuance of the Certificates. T'he City hereby retains Dougherty&
Company LLC as its financial advisor with respect to the Lease and the sale and issuance of the Certificates.
2.02. Additional Utility Revenue Obligations. This Council acknowledges that the Lease contains provisions
limiting the City's ability to issue ox incux Additional Utility Revenue Obligations while the Lease is in force and anp
Certificates are Outstanding. The Council will not appxove or participate in the issuance of any Additional Utility
Revenue Obligations unless the conditions set forth in the Lease for issuance of Additional Utility Revenue Obligations
have been satisfied.
Section 3. Modifications,Absence of Officers. The appxoval hereby given to the Documents includes an
approval of such additional details thexein as may be necessary and appropriate and such modifications thereto,deletions
therefxom and additions thereto as may be necessary and appropriate and approved by the City Attomey prior to the
execution of the Docuxnents. The execution of any instrument by the appropriate officet or oFficers of the City herein
authorized shall be conclusive evidence of the approval of such documents in accordance with the terms heteof. In the
absence of the:�layox or the Ciry Cletk,any of the Documents authorized by this xesolution to be executed may be
executed by such officers as,in the opinion of the City Attorney,may execute documents in theit stead.
Section 4. Payment of Lease Payments. The Ciry will pay to the Trustee prompdy when due,all of the Lease
Payments(as defined in the Lease)and other amounts required by the Lease. To pxovide moneys to make such
payments,the City will include in its annual budget,for each fiscal year during the term of the Lease,moneys sufficient
to pay and for the purpose of paying all Lease Payments and other amounts payable under the Lease,and will take all
other actions necessary to provide moneys for the payment of the obligations of the City under the Lease from sources
of the Ciry lawfully available for this purpose. The City agiees that it will appropriate to the payment of the Lease
Payments all collections of special assessments levied with xespect to the Facilities. The agreements of the City in this
section axe subject to the pxovisions for ternunation set forth in the Lease,which shall pxovide that the Lease will be
subject to terxnination by the City,without penalry,at the end of any fiscal yeai of the City,if the City Council notifies
the Trustee,not later than July 1 of that fiscal yeax that it will not budget ox appropriate money for the payment of the
City's obligations under the Lease fox the succeeding fiscal year.
Section 5. Tax and Aibitrage Mattexs.
5.01. v ant. The Ciry covenants and agrees with the owners from time to time of the Certificates,that it
will not take,or permit to be taken by any of its officers,employees ox agents,any action which would cause the interest
component of the Lease Payment to become subject to taxation under the Internal Revenue Code of 1986,as amended
(the Code)and any regulations issued thexeunder(the Txeasury Regulations),in effect at the time of such action,and that
it will take,or it will cause its officers,employees oi agents to take,all affumative actions within its powers wluch may be
necessary to insure that the interest component of the Lease Payment will not become subject to taxation under the
Code and the Treasury Regulations,as presently existing or as hereafter amended and made applicable to the
Certificates. The City represents and covenants that the City is the owner of the Facilities and uses them for its
municipal functions. So long as the Certificates axe outstanding,the City will not enter into any lease,use agreement oc
othex contract or agreement respecting the Faciliries which would cause the Certificates to be considered"private acrivity
bonds"or"private loan bonds"pursuant to the provisions of Section 141 of the Code.
5.02. Atbitrage Certification. The Mayor and City Clerk being the officexs of the City chaxged with the
responsibility for issuing the Certificates pursuant to this resolution,are authorized and directed to execute and deliver to
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the Purchaser a certificate in accordance with the pxovisions of Section 148 of the Code,and Section 1.148-2(b)of the
Txeasuty Regulations,stating the facts,estimates and cixcumstances in e�cistence on the date of issue and delivery of the
Certificates which make it reasonable to expect that the proceeds of the Cextificates will not be used in a manner that
would cause the Certificates to be arbitrage bonds within the meaning of the Code and Txeasury Regulations.
5.03. �rbitrage Rebate. The City acknowledges that the arbitrage rebate requirements of Section 148(�(4)(D)
of the Code axe applicable to the Cextificates,the City hereby covenants and agrees to make computations,ietain records
and pay amounts to the United States at the times and in the mannez xequized by said Section 148(�(4)(D)of the Code,
and as set forth in the tax compliance agreement or similar document executed in connection with the delivery of the
Cerrificates to the Purchaser.
Secrion 6. Continuing Disclosure. The City acknowledges that the Cerrificates are subject to the continuing
disclosure requixements of Rule 15c2-12 promulgated by the Securities and Exchange Council 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 obligations of certain underwriters to xequire that issuexs of municipal obligations enter into ag�eements for
the benefit of the holders of the obligations to provide continuing disclosure with respect to the obligations. To provide
fox the public availability of certain information relating to the Certificates and the security therefor and to pecmit
participating underwritexs in the primary offering of the Cextificates to comply with the Rule,which will enhance the
marketability of the Cextificates,the Mayor and the City Clexk are hereby authorized and directed to execute an
Agreement Concerning Continuing Disclosure,by which the City agrees to provide such information,either direcdy or
thxough a disclosure agent,and the City hereby covenants and agrees to observe and perform the covenants and
agreements contained therein,unless amended or terminated in accordance with the provisions thereof,for the benefit
of the registered ownexs or beneficial ownexs from time to time of the Outstanding Certificates as therein provided.
Section 7. Amendment. This resolution may be amended from time to time,prior to the issuance of the
Certificates,by an administrative xesolurion adopted by this Council.
Adjourn. A motion was made by Whaley, seconded by Reed,to adjourn. All present voted yes;
motion carried. Meeting adjourned at 6:19 p.m.
of Brool '
cott . Munsterman,Mayor
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