HomeMy WebLinkAboutCCMinutes_1998_11_17 023
Commission Chambers November 17, 1998
City of Brookings
The City Commission convened in regular session at 2:00 PM with the following members
present: Mayor Hauschild, Klavetter, Artz and Plumart; absent: Murra
Alan Glover, Attorney was present.
Minutes of the regular meering held November 10, 1998 were read and approved.
Motion was made by Artz, seconded by Plumart approving the bills and claims.
Miller Sellers Heroux, multiplex, 10,774.23;Nielsen's,repairs, 24.56;Beal Distributing,beer,
22,328.45; Beckman& Sons, supplies, 210.91; Bowes Construction, asphalt, 1,507.95; Brkgs. Area
Chamber of Commerce, supplies, 20.00;Three Eagles Communications, advertising, 850.00; Brkgs.
Register, advertising, 835.00; Central Business, supplies, 2,646.98; Carlson Distributing,beer,
10,346.55; Coast to Coast, supplies, 8.85; Dakota Beverage, b�er, 12,585.70; Dale's Alignment,
repairs, 256.86; LG Everist, supplies, 1,614.10; Visa, supplies, 108.00; Foster Farms, salt, 6,072.89;
Geotek Engineering, testing, 3,599.00; Interstate Detroit Diesel,repairs, 150.00; L&L Auto, supplies,
105.48; Shanken Communications, supplies, 15.00; Midwest Marketing, advertising, 200.00; NWPS,
services, 31.09; Quill Corp., supplies, 76.53; Sioux Falls Two Way,repairs,439.93; SD Commission
of Examiner, renewal, 60.00; SD Treasurer, sales tax, 14,174.52; Storytime Productions,membership,
100.00; IBM Corp:, maintenance,46.00; Commnet Cellular, services, 48.11
Motion was made by Plumart, seconded by Klavetter approving the agenda.
Bids which were opened and publicly read today at 11:00 am were presented at this time:
One (1) 1999 4WD Sport Utility Wagon
Paula Motors, Brookings, SD $32,292.00
Fall Automotive, Fergus Falls, MN $31,147.00
Motion was made by Klavetter, seconded by Artz appr�ving the low bid of Falls Automotive in
the amount of$31,147.00 for one (1) 1999 four wheel drive utility wagon for Engineers office. All
members voted YES; motion carried.
Three (3) 1999 Ford Crown Victoria Police Cars
Einspahr, Brookings, SD $20,438.00 per unit
$61,314.00 total for three units
Motion was made by Klavetter, seconded by Plumart approving the low bid of Einspahr in the
amount of$61,314.00 for three (3) 1999 police vehicles. All members voted YES; motion cazried.
One(1) 1999 Broom Street Sweeper
Sanitation Products �$98,757.50
22 051.50 less trade in of 1991 Elgin Pelican
$76,706.00 net cost to City of Brookings
Motion was made by Artz, seconded by Klavetter approving the low bid of Sanitation Products
in the amount of$76,706.00 for one (1) 1999 Broom Street Sweeper. AIl members voted YES; motion
carried.
024
One (1) 1999 47,000 GV W Truck Chassis
Prostrollo's, Madison, SD $43,999.00
9 051.00 less trade in of 1987 GMC Tandem Truck Chassis
$34,948.00 net cost to City of Brookings
J& R GMC, Sioux Falls, SD $45,108.00 ,
7 000.00 less trade in of 1987 GMC Tandem Truck Chassis
$38,108.00 net cost to City of Brookings
Falls Automotive,
Fergus Falls,MN $44,997.00
$3,000.00 less trade in of 1987 GMC Tandem Truck Chassis
$41,997.00 net cost to City of Brookings
Motion was made by Artz, seconded by Plumart approving the low bid of Prostrollo's in the
amount of$34,948.00 for one(1) 1999 47,000 GVW Truck Chassis for Street Department. All
members voted YES; motion carried.
Motion was made by Klavetter, seconded by Plumart approving Resolution No. 130-98 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 documents. All members voted YES; motion carried.
RESOLUTION NO. 130-98
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 DOCUMENTS
BE IT RESOLVED by the City Commission of the City of Brookings, South Dakota(the City),
as follows:
Section 1. Recitals.
1.01. The City is authorized by South Dakota Codified Laws, Chapters 9-40 and 9-41, as
amended(together,the Act), and the city charter,to acquire land and acquire and construct
improvements and equipment comprising a system for the purpose of providing (i)electricity, gas or
other light,heat and power, (ii)water and water supply for municipal, industrial and domestic
purposes, (iii) collection, treatment and disposal of sewage and other domestic,commercial and
industrial wastes, and (iv)a telephone system and related services. Pursuant to the Act and the city
charter,the City has established the Brookings Municipal Utilities(the Utility)to provide such
services. The Utility and the City have found it necessary and appropriate to acquire and construct
certain interests in land(the Land), improvements, and equipment(the Facilities) described in the
Lease(as hereinafter defined}, and have temporarily financed the acquisition and construction of the
Facilities through a lease-purchase agreement between the First National Bank in Brookings,
Brookings, South Dakota(the Trustee) and the City(the Refunded Lease), and certificates of
participation in the Refunded Lease(the Refunded Certificates,together with the Refunded Lease,the
Refunded Obligations). The Utility Boazd has advised the City Commission that the Refunded �
Obligations can be advantageously refunded at this time to provide definitive long-term financing for
the Facilities.
, �.02. The City has agreed with First National Bank in Brookings, Brookings, South Dakota
(the Trustee)that the Trustee will, pursuant to a Ground Lease and Easement Agreement between the
025
City and the Trustee (the Ground Lease), acquire the interests in the Land, including any Facilities now
in existence, from the City, and the Trustee will lease its interest in the Land and lease and agree to sell
the existing Facilities and the Facilities to be acquired, renovated, constructed and equipped thereon to
the City pursuant 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 Certificates of Participation(the Certificates)
in the lease payments to be made by the City under the Lease and (ii)receive the proceeds of the sale of
the Certificates and disburse such proceeds for payment of the Refunded Obligations on March 11,
1999, and for payment of costs of issuance of the Certificates. The proceeds of the Refunded
Certificates now on deposit in the trust funds for the Refunded Obligations shall be transferred to the
Reserve Fund and the Construction Fund estabiished under the Trust Agreement.
1.04. Dougherty Summit Securities LLC (the Purchaser) is hereby retained by the City to
underwrite the Certificates.
1.05. Forms of the following documents relating to the Facilities and the refunding of the
Refunded Obligations (the Documents) will be prepared and submitted to the City and, when received,
are hereby directed to be filed with the Finance Officer: (a)the Lease; (b)the Trust Agreement; (c)the
Ground Lease; and (d)the Certificate Purchase Agreement described in Section 2.
Section 2. Approvals.
2.01. Authorization and ApprovaI of the Documents. The financing described above is found
to be favorable and is hereby approved. The Mayor and Financ.e Officer are authorized to approve the
execution and delivery of the Lease and the Certificates, in a principal amount not to exceed
$20,155,000, which includes, without limitation, amounts to pay the premium for qualified credit
enhancement, if any, and costs of issuance (including underwriter's discount not exceeding 2.50% of
par), and plus any original issue discount(not exceeding 2.00% of par), the Certificates to bear interest
at a rate or rates per annum resulting in an average interest rate not greater than 7.00%per annum and
to mature over a period of not to exceed 20 years. The Mayor and Finance Officer are directed to enter
into a Certificate Purchase Agreement with the Purchaser whereby the Purchaser will agree to purchase
the Certificates; the execution of the Certificate Purchase Agreement by the Mayor and Finance Officer
shall be conclusive evidence of their approval of the principal amount, purchase price, interest rates
and other terms set forth therein. The Mayor, Finance Officer and City Attorney are authorized to
approve the final forms of Documents and the Mayor and Finance Officer are directed to execute the
Documents. Copies of all Documents shall be delivered, filed and recorded as provided therein. The
Mayor, Finance Officer and City Attorney are also authorized and directed to execute such other
instruments as may be required to give effect to the transactions herein contemplated. The City will
cooperate in the issuance of the Certificates and the Mayor, Finance Officer and the City Attorney shall
execute such other instruments as are necessary to the issuance of the Certificates.
2.02. Additional UtiIitv Revenue Obligations. This Commission acknowledges that the Lease
contains provisions limiting the City's ability to issue or incur��dditional Utility Revenue Obligations
while the Lease is in force and any Certificates are Outstanding. The Commission will not approve 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 approval hereby given to the Documents
includes an approval of such additional details therein as may be necessary and appropriate and such
modifications thereto, deletions therefrom and additions thereto as may be necessary and appropriate
and approved by the City Attorney prior to the execution of the Documents. The execution of any
instrument by the appropriate officer or officers of the City herein authorized shall be conclusive
evidence of the approval of such documents in accordance with the terms hereof. In the absence of the
Mayor or the Finance Officer, any of the Documents authorized by this resolution to be executed may
be executed by such officers as, in the opinion of the City Attorney, may execute documents in their
stead.
Section 4. Payment of Lease Pavments. The City will pay to the Trustee promptly when due,
all of the Lease Payments (as defined in the Lease)and other amounts required by the Lease. To '
provide 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 City
lawfully available for this purpose. The City agrees that it will appropriate to the payment of the Lease
026
Payments all collections of special assessments levied with respect to the Facilities. The agreements of
the City in this section are subject to the provisions for termination set forth in the Lease, which shall
provide that the Lease will be subject to termination by the City, without penalty, at the end of any
fiscal year of the City, if the City Commission notifies the Trustee,not later than July 1 of that fiscal
year that it will not budget or appropriate money for the payment of the City's obligations under the
Lease for the succeeding fiscal year.
Section 5. Tax and Arbitra�e Matters.
5.01. Covenant. The City 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 or 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
thereunder(the Treasury Regulations), in effect at the time of such action, and that it will take, or it
will cause its officers, employees or agents to take, all affirmative actions within its powers which 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 are outstanding,the
City will not enter into any lease,use agreement or other contract or agreement respecting the Facilities
which would cause the Certificates to be considered "private activity bonds" or "private loan bonds"
pursuant to the provisions of Section 141 of the Code.
5.02. Arbitra�e Certification. The Mayor and Finance Officer being the officers of the City
charged with the responsibility for issuing the Certificates 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 Section 1.148-2(b) of the Treasury Regulations, stating the facts,
estimates and circumstances in existence on the date of issue and delivery of the Certificates which
make it reasonable to expect that the proceeds of the Certificates will not be used in a manner that
would cause the Certificates to be arbitrage bonds within the meaning of the Code and Treasury
Regulations.
5.03. Arbitrage Rebate. The City acknowledges that the arbitrage rebate requirements of
Section 148(�(4)(D) of the Code are applicable to the Certificates,the City hereby covenants and
agrees to make computations, retain records and pay amounts to the United States at the times and in
the manner required 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 Certificates to the
Purchaser.
Section 6. Continuing Disclosure. The City acknowledges that the Certificates 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 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 Certificates and the security therefor and to permit
participating underwriters in the primary offering of the Certificates to comply with the Rule, which
will enhance the marketability of the Certificates,the Mayor and the Finance Officer are hereby
authorized and directed to execute an Agreement Concerning Continuing Disclosure, by which the City
agrees to provide such information, either directly or through 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
owners or beneficial owners 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 resolution adopted by this Commission.
Motion was made by Plumart, seconded by Artz approving Resolution No. 138-98 authorizing
the issuance and awarding the sale of sales tax revenue bonds, series 1998 to finance acquisition, �
construction, and equipping of MultiPlex Project. All members voted YES; motion carried.
027
RESOLUTION NO. 138-98
Resolution Authorizing The Issuance And Awarding The Sale Of Sales
Tax Revenue Bonds, Series 1998, To Finance Acquisition, Construction,
And Equipping Of Multi-Plex Project
BE IT RESOLVED by the City Commission of the City of Brookings, Brookings
County, 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.
(b) Under the Iaws of the State of South Dakota, the City is possessed of alt powers
which are necessary, requisite or proper for the government and administration of its local and
municipal matters, and all rights ana powers that now or hereafter may be granted to
municipalities by the laws of the State of South Dakota.
(c) 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 (the
"Act"), subject to certain exceptions. The City adopted and imposed a sales tax authorized by
the Act (the "Sales Tax") with an original tax rate equal to 1% (the "Initial 1% Tax Rate"),
pursuant to the Act and pursuant to Ordinance No. 21-81. Ordinance No. 21-81 was amended
by Ordinances No. 25-96 and 20-98 which, among other things, imposed an additional 1% tax
rate on the sale, use, storage and consumption of items taxed under Section 10-45 and 10-46 of
the Act (the "Second 1% Tax Rate"). Ordinance No. 21-81, as amended, has been codified as
Section 2-59 of the Revised Ordinances of the City of Brookings, South Dakota(the "Sales Tax
Ordinances"}.
(d) The Act provides that cities levying a Sales Tax may issue non-ad valorem sales
tax 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 Sales Tax. In accordance with the
provisions of the Act and the Sales Tax Ordinances, such bonds are required to be payable
solely from collections of the Second 1% Tax Rate (the "Pledged Revenues"). In accordance
with the provisions of the Act, the City is required to covenant that it will continue to impose
and collect the Sales Tax so long as such bonds are outstanding.
(e) As authorized by the Sales Tax Ordinances 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 $7,200,000 (the "Bonds"), to be paid from Pledged Revenues.
The Bonds shall be issued to provide funds to finance the acquisition, construction and
equipping of a multiuse agricultural exposition and research center to be located in the
northeast quadrant of the intersection of U.S. Highway I-29 and State Highway 14 (the "Multi-
Plex" or the"Project").
(� In accordance with the requirements of the Act and the Sales Tax Ordinances,
the use of Pledged Revenues to finance the Project will be open to referendum for the period
from November 21, 1998,to December 10, 1998.
1.02. Sale, Terms and Bond Purchase A�reement. The Bonds authorized by this
Resolution (the "Bond Resolution") shall be sold to Norwest Investment Services, Inc. (the
Underwriter) at a purchase price of not less than 98% of par, plus accrued interest, less original issue
discount, if any. The Bonds are to bear interest at a rate or rates per annum resulting in a net interest
cost of not to exceed 5.75% per annum and to mature over a period not to exceed 16 years. The
Finance Officer is hereby authorized, empowered and directed to determine, approve and ratify the
final purchase price, principal amount, maturities, net interest cost or costs and payment dates of and
for the Bonds, together with such related underwriting details, including but not limited to rights of '
optional redemption provisions, so long as the maturities and net interest costs are within the
parameters set forth in this Section 1.02. The execution and delivery of a Bond Purchase Agreement
between the City and the Underwriter setting forth such final terms are hereby approved and authorized
and such execution shall be conclusive evidence of such authority and shall be binding upon the City.
0 � �The provisions of the Bond Purchase Agreement as so executed, including all Exhibits and Appendices
thereto, are incorporated herein by reference. The law firm of Faegre & Benson LLP, of Minneapolis,
Minnesota, is hereby appointed as the City's Bond Counsel for purposes of the issuance of the Bonds.
1.03. Official Statement. The Mayor, the City Attorney, and the Finance Officer, are
authorized, in cooperation with the Underwriter, to prepare a Preliminary Official Statement and an
Official Statement, (together referred to as the "Official Statement"), to be distributed to prospective
purchasers of the Bonds. The Finance Officer is hereby authorized and directed to approve, to "deem
final" and, if requested,to execute the Official Statement.
1.04 Continuin� Disclosure Agreement. The City is hereby authorized to enter into a
Continuing Disclosure Agreement that complies with the requirements of Regulation 15c2-12,
promulgated by the Securities and Exchange Commission. The execution and delivery of such a
Continuing Disclosure Agreement by the Mayor and Finance Officer (or other officers of the City) are
hereby approved and authorized and such execution shall be conclusive evidence of such authority and
shall be binding upon the City.
Section 2. FORMS.
2.01. The Bonds. The Bonds shall be printed in substantially the following form:
[The balance of this page is intentionally left blank.]
029
UNITED STATES OF AMERICA
STATE OF SOUTH DAKOTA
COUNTY OF BROOKINGS
CITY OF BROOKINGS
SALES TAX REVENUE BOND
SERIES 1998
Interest Date of Original
Rate Maturitv Issue � CUSIP
December 1, 1998
REGISTERED OWNER: CEDE& Company, as nominee of The Depository Trust Company
PRINCIPAL AMOUNT:
THE CITY OF BROOKINGS, a duly organized and existing municipal corpora.tion of Brookings
County, South Dakota (the City) acknowledges itself to be indebted and for value received promises to
pay to the registered owner named above, or registered assigns, the principal amount specified above, on
the maturity date specified above, with interest thereon from the date of original issue specified above at
the annual rate specified above, payable June 1, 1999, and each December 1 and June 1 thereafter by
check or draft mailed to the person in whose name this Bond is registered at the close of business on the
fifteenth day of the preceding month (whether or not a business day) at the registered owner's address
set forth on the registration records maintained by The First National Bank in Sioux Falls, as Bond
Registrar and Paying Agent (the "Bond Registrar"), or its successor designated under the Bond
Resolution hereinafter described. Notwithstanding anything else herein, so long as the Bonds are in
Book-Entry-Only Form, principal and interest shall be paid in accordance with the requirements of the
Depository Trust Company, New York,New York ("DTC"), as in effect from time to time. So long as
the Bonds are in Book-Entry-Only Form, the operating procedures of DTC and the City's Blanket Letter
of Representations shall apply, notwithstanding anything to the contrary set forth in this Bond ar the
Bond Resolution. Any interest not punctually paid or provided for will cease to be payable on the
regular record dates provided for in the Bond Resolution 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 pursuant to the Bond
Resolution.
This Bond is one of an issue of Bonds in the aggregate principal amount of$7,200,000
(the "Bonds"), all issued by the City for the purpose of providing money to finance the acquisition,
construction and equipping of a multiuse agricultural exposition and research center to be located in the
northeast quadrant of the intersection of U.S. Highway I-29 and State Highway 14 (the "Multi-Plex" or
the "Project"), and in full conformity with the provisions of the Constitution and laws of the State of
South Dakota including Chapter 10-52, South Dakota Codified Laws, as amended, and pursuant to an
authorizing resolution adopted by the City Commission on November 17, 1998 (the "Bond
Resolution"), to which reference is made for a description of the nature and extent of the security for
the Bonds, the rights thereunder of the City and the Bondholders, and the terms upon which the Bonds
and any additional obligations may be issued and secured. The Bonds are issuable in Book-Entry-Only
form, in denominations of$5,000 or any integral multiple thereof, of single maturities.
Series 1998 Bonds maturing on and after December 1, 2004 are subject to optional redemption
and prepayment upon request by the City to the Bond Registrat, on December 1, 2003, and on any date
thereafter, in whole or in part, in inverse order of maturity, and if in part within a maturity, then by lot,
at a redemption price equal to their principal amount, plus accrued interest and a premium (expressed
as a percentage of the principal amount to be redeemed), as follows:
Redemption Dates Premium
December 1, 2003 to and including November 30, 2.00%
2004 ,
December 1, 2004 to and including November 30, 1.00%
2005
and without premium thereafter.
030
Not less than 30 nor more than 45 days prior to the date specified for redemption and
prepayment of any Bonds, the City will mail notice of the call thereof to the registered owner of the
Bonds to be redeemed and to the Bond Registrar. Upon partial redemption of any Bond, a new Bond
or Bonds will be delivered to the owner without charge, representing the remaining principal amount
outstanding.
The Bonds have been designated as "qualified tax-exempt obligations" by the City
pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
As provided in the Bond Resolution and subject to certain limitations set forth therein
(including the Book-Entry-Only system of ownership), this Bond is transferable upon the books of the
City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the
owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of
transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's
attorney; and may also be surrendered in exchange for Bonds of other authorized denominations.
Upon such transfer or exchange, the City will cause a new Bond or Bonds to be issued in the name of
the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same
rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge
required to be paid with respect to such transfer or exchange.
The City and the Bond Registrar may deem and treat the person in whose name this
Bond is registered as the absolute owner hereof,whether this Bond is overdue or not,for the purpose of
receiving payment and for all other purposes, and neither the City nor the Bond Registrar shall be
affected by any notice to the contrary.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Resolution until the Certificate of Authentication hereon shall have
been executed by the Bond Registrar by manual signature of one of its authorized representatives.
IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that under the laws
and resolution referred to above, the City has duly created a Principal and Interest Account in its
Special Tax Fund and has agreed to appropriate thereto monthly, from the collections of the non-ad
valorem sales and use taxes, (excluding any collections received under the "Initial 1% Tax Rate"
described in the Bond Resolution and excluding any collections of the City's LLR Tax) imposed by the
City (the "Pledged Revenues"), an amount sufficient to pay all principal of and interest on the Bonds as
such become due; that so long as the Bonds and any additional obligations payable therefrom axe
outstanding, the City will continue to impose and collect such non-ad valorem sales and use taxes; that
a Reserve Account (the "Reserve Account") has been created in the Special Tax Fund and will be
funded by the deposit of proceeds of the Bonds to an amount equal to the Reserve Requirement (as
provided for and within the meaning set forth in the Bond Resolution); that the City has pledged to the
payment of the Bonds so much of the collections of the non-ad valorem sales and use taxes imposed by
the City as are necessary to provide for the payment of the principal of and interest on the Bonds and to
maintain the required amounts in the Reserve Account; that additional obligations may be issued and
made payable from the Pledged Revenues on a parity with �he Bonds in the manner and upon the
conditions set forth in the Bond Resolution; that all acts, conditions and things required by the
Constitution and laws of the State of South Dakota to be done precedent to and in the issuance of this
Bond, in order to make it a valid and binding special obligation of the City in accordance with its
terms, have been done, have happened and have been performed in regular and due time, form and
manner.
IN WITNESS WHEREOF,the City of Brookings, Brookings County, South Dakota, by
its City Commission, has caused this Bond to be executed by the signatures of the Mayor and the
Finance Officer, countersigned by an attorney resident and licensed to practice in the State of South
Dakota, all such signatures being authentic manual,printed,engraved or lithographed facsimiles.
CITY OF BROOKINGS
Mayor
Finance Officer
Countersigned:
Resident Attorney
031
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Bond Resolution mentioned within.
DATE OF AUTHENTICATION:
THE FIRST NATIONAL BANK IN SIOUX FALLS,
as Bond Registrar
By -
Authorized Representative
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
, the within
Bond and all rights thereunder, and hereby irr,:vocably 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 OR
OTHER IDENTIFYING NUMBER OF NOTICE: The signature to this Assignment
ASSIGNEE: must correspond with the name as it appears
upon the face of the within Bond in every
_ / particular, without alteration or enlargement or
any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or trust
company or by a brokerage firm having a
membership in one of the major stock
exchanges.
The following abbreviations,when used in the inscription on the face of this Bond, shall
be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in LJNIF TRANS MIN ACT . . . . . .Custodian . . . . . .
common (Cust) (Minor)
TEN ENT-- as tenants by the under Uniform Transfers to
entireties Minors Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(State)
JT TEN -- as joint tenants with
right of
survivorship and
not as tenants in
common
Additional abbreviations may also be used.
2.02. [Intentionally Omitted]
Section 3. BOND TERMS,EXECUTION AND DELIVERY.
3.01. Date, Maturities and Interest Rates. T'he Bonds shall be designated Sales Tax
Revenue Bonds, Series 1998 shall 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 payable on the dates and at
the respective annual rates stated opposite such maturity years as shown on Exhibit A to the Bond �
Purchase Agreement, subject to the provisions of Section 1.02 hereof.
The Bonds shall be initially issued in Book-Entry-Only Form, as further provided in
Section 3.07, by using and delivering to The Depository Trust Company (the "Depository") one typed
03 �ond for each stated maturity of the Bonds, registered to CEDE & Company, as nominee for the
Depository Trust Company. The interest thereon and, upon surrender of each Bond, the principal
amount thereof, shall be payable by check or draft issued by the Bond Registrar described herein.
3.02. Dates and Interest Pavment Dates. Each Bond shall bear a date of original issue
as of the first day of the month in which the Bonds are delivered to the Underwriter. Upon the initial
delivery of the Bonds pursuant to Section 3.06 and upon any subsequent transfer or exchange pursuant
to Section 3.03, the date of authentication shall be noted on each Bond so delivered, exchanged or
transferred. The interest on the Bonds shall be payable on each interest payment date therefor 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.
3.03. Re�istration. The City hereby appoints The First National Bank in Sioux Falls,
as bond registrar, transfer agent and paying agent for the Bonds (the "Bond Registrar"). Subject to the
Book-Entry System described in Section 3.07, the effect of registration and the rights and duties of the
City and the Bond Registrar with respect thereto shall be as follows:
(a) Re ister. The Bond Registrar shall keep at its principal corporate trust office a
bond register in which the Bond 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 Bond Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Bond 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 Bond Registrar may, however, close the books �or 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 Bond 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 by the Bond Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When any Bond is presented to the Bond
Registrar for transfer, the Bond 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 Bond Registrar shall incur no liability for the
refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(fl Persons Deemed Owners. The City and the Bond 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.
(g) Taxes, Fees and Char�es. For every transfer or exchange of Bonds, the Bond
Registrar may impose a chazge upon the owner thereof sufficient to reimburse the Bond
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 Bond 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 Bond
033
Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon
filing with the Bond Registrar of evidence satisfactory to it that such Bond was destroyed,
stolen or lost, and of the ownership thereof, and upon furnishing to the Bond Registrar of an
appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both
the City and the Bond Registrar shall be named as obligees. All Bonds so surrendered to the
Bond 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.
3.04. Appointment of Initial and Successor Re istrars. The Mayor and the Finance
Officer are authorized to execute and deliver, on behalf of the City, a contract with the Bond Registrar.
Upon merger or consolidation of the Bond 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 Bond Registrar. The City agrees to pay the reasonable and
customary charges of the Bond Registrar for the services performed. The City reserves the right to
remove the Bond Registrar upon thirty (30) days' notice and upon the appointment of a successor
Registrar, in which event the predecessor Bond Registrar shall deliver all cash and Bonds in its
possession to the successor Bond Registrar and shall deliver the bond register to the successor Bond
Registrar. On or before each principal or interest due date, without further order of the Commission,
the Finance Officer shall transmit to the Bond Registrar, frcrn the accounts described in Section 4,
moneys sufficient for the payment of all principal and interest then due.
3.05. Redemntion. (a) 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 Exhibit 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.
(b) Subject to the Book-Entry System described in Section 3.07, notice of
redemption shall be given by first class mail not less than 30 nor more than 45 days prior to the
redemption date, to the registered owner of each Bond to be redeemed, at the registered owner's
address as it appears on the bond registration books maintained by the Bond Registrar or at such
address as the registered owner may have filed with the Bond Registrar for the purpose. Neither failure
to mail any such notice nor any defect in any notice so mailed shall affect the sufficiency of the
proceedings for the redemption of any of the Bonds not affected thereby. Each notice of redemption
shall state:
(1) the redemption date,
(2) the redemption price,
(3) the interest rates, maturities and CUSIP numbers of the Bonds to be redeemed,
(4) the principal amount of the Bonds to be redeemed,
(5) if less than all of the outstanding Bonds of any series aze to be redeemed, the
certificate numbers and the respective principal amounts of the Bonds to be
redeemed.
(6) that on the redemption date the redemption price and interest accrued to the
redemption date will become due and payable upon each such Bond or portion
thereof called for redemption, and that interest thereon shall cease to accrue from
and after the redemption date, and
(7) the address to which such Bonds are to be surrendered for payment of the
Redemption Price.
(c) Notice of redemption shall be given by the Registrar for and on behalf and at the
expense of the City,upon the written request of the Finance Officer.
(d) Notice of redemption having been given as aforesaid, the Bonds or portions of
Bonds so to be redeemed shall, on the redemption date, becnme due and payable at the redemption
price specified in such notice, and from and after such redemption date (unless the City shall default in �
the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest.
Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid
by the Registrar at the redemption price.
034
(e) In addition to the foregoing notice, if required by the Underwriter or by the rules
of the Municipal Securities Rulemaking Board, further notice shall be given by the Bond Registrar as
set out below, but no defect in said further notice nor any failure to give all or any portion of such
further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is
given as set forth herein:
(1) Each further notice of redemption given hereunder shall contain (i) the date of
mailing of such notice of redemption; (ii) CUSIP number of each Bond being
redeemed; (iii) the date of each Bond being redeemed; (iv) the rate of interest
borne by each Bond being redeemed; (v) the maturity date of each Bond being
redeemed; and (vi) any other descriptive information needed to identify
accurately the Bonds being redeemed.
(2) Each further notice of redemption shall be sent at least 35 days before the
redemption date by registered or certified mail or overnight delivery service to
(i) the following registered securities depositories (if at the time of such notice
such depositories are then in the business of holding substantial amounts of
obligations of types comprising the Bonds of the relevant series): Depository
Trust Company of New York, New York and Midwest Securities Trust
Company of Chicago, Illinois, (ii) Moody's Municipal and Government and
Standard and Poor's Called Bond Record; and (iii) any other such depositories
or national information services that disseminate notices of redemption of
obligations such as the Bonds designated by the City to receive such notice.
(3) Each such further notice shall be published one time in The Bond Buver of New
York,New York or, at the option of the City, in some other financial newspaper
or journal which regularly carries notices of redemption of other obligatians
similar to the Bonds of the relevant series, such publication to be made at least
30 days prior to the date fixed for redemption.
(4) Upon the payment of the redemption price of the Bonds redeemed, each check
or other transfer of funds issued for such purpose shall bear the CUSIP number
identifying, by issue and maturity, the Bonds being redeemed with the proceeds
of such check or other transfer.
3.06. Execution, Authentication and Deliverv. The Bonds shall be prepared under the
direction of the Finance Officer and shall be executed and authenticated on behalf of the City by the
signatures of the Mayor and the Finance Officer, countersigned by an attorney resident and licensed to
practice in the State of South Dakota, and the official seal of the City affixed thereto, and any
certificates as to registration, indebtedness or legal opinion on the reverse side of each Bond shall be
executed by the signature of the Finance Officer. All signatures and the seal may be printed,
lithographed or engraved facsimiles of the original. 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 any
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 Bond 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 Bond 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 Bond Resolution. After the Bonds have been so prepared and executed, the Finance Officer
shall deliver them to the Bond Registrar for delivery to the Underwriter on receipt of the purchase price
heretofore agreed upon, and the Underwriter shall not be required to see to the application thereof.
3.07. Book-Entr�-On1�System. The Bonds shall be initially issued in Book-Entry-
Only Form by using and delivering to The Depository Trust Company (the "Depository") one typed
Bond for each stated maturity of the Bonds, registered to CEDE & Company, as nominee for the
Depository Trust Company. While the Bonds remain issued in Book-Entry-Only Form, the provisions
of this Bond Resolution which conflict with the operation of the Book-Entry-Only System shall not
apply, and the provisions of the Letter of Representations previously entered into by the City (the '
"Letter of Representations") relating to such Book-Entry-Only System and the following provisions
shall prevail.
035
(a) Registration, Recordin� and Transfer of Ownershi�. The Depository (or its
nominees) shall be and remain recorded on the registration records maintained by the Bond
Registrar as the Holder of all Bonds which are in Book-Entry-Only Form. No transfer of any
Bond in Book-Entry-Only Form shall be made, except from one Depository to another (or its
nominee) or except to terminate the Book-Entry-Only Form. All Bonds of each stated maturity
in Book-Entry-Only Form shall be issued and remain in a single Bond certificate registered in the
name of the Depository (or its nominee); provided, however, that upon termination of the Book-
Entry-Only Form pursuant to the Letter of Representations or as otherwise directed by written
notice from the City, Bond Registrar and Depository, the City shall, upon delivery of all Bonds
from the Depository, promptly execute, and the Bond Registrar shall thereupon authenticate and
deliver, Bonds to all persons who were Beneficial Owners thereof immediately prior to such
termination; and the Bond Registrar shall register such Beneficial Owners as Holders of the
applicable Bonds. The Bond Registrar, as bond registrar and paying agent, shall maintain
accurate books and records of the principal balance, if any, of each such Outstanding Bond in
Book-Entry-Only Form, which shall be conclusive for all purposes whatsoever. Upon the
authentication of any new Bond in Book-Entry-Only Form in exchange for a previous Bond, the
Bond Registrar shall designate thereon the principal balance remaining on such Bond according
to the Bond Registrar's books and records.
(b) Notices. The City and Bond Registrar shall each give notices to the Depository of
such matters and at such times as are required by the Letter of Representations. All notices of
any nature required or permitted hereunder to be delivered to a Holder of a Bond in Book-Entry-
Only Form shall be transmitted to Beneficial Owners of such Bonds at such times and in such
manner as shall be determined by the Depository and the Participants in accordance with the
Book-Entry-Only System and Letter of Representations.
(c) Payments. All payments of principal of, premium, if any, and interest on Bonds
while in Book-Entry-Only Form shall be paid to the Depository in accordance with the Book-
Entry-Only System and Letter of Representations in same day funds by wire transfer. All
payments of principal of, premium, if any, and interest on any Bonds in Book-Entry-Only Form
due Beneficial Owners shall be made at such times and in such manner as shall be determined by
the Depository and the Participants in accordance with the Book-Entry-Only System and Letter
of Representations.
(d) Limitations on Liabilitv. With respect to Bonds in Book-Entry-Only Form, and
any Beneficial Owners thereof, except as expressly provided to the contrary herein, the City and
the Bond Registrar shall have no responsibility, liabili�y or obligation of any nature whatsoever
with respect to (i) the non-payment to any Beneficial Owner or any other person, other than the
Depository, of any amount due for principal or interest; (ii) the failure to give any notice or other
information to the applicable Beneficial Owner; (iii) the inaccuracy of the records of the
Depository or any Participant, or (iv) the failure in any manner of the Depository or any
Participant to timely or properly comply with procedures or requirements of the Book-Entry-
Only System.
Section 4. SPECIAL TAX FLTND.
4.01. S�ecial Tax Fund. The Finance Officer has established and will maintain the
Special Tax Fund as a separate and special fund in the financial records of the City until all 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, shall be credited, as received, to the
Special Tax Fund. Within the Special Tax Fund are various separate accounts to be maintained by the
City.
4.02. Pledged Revenues. Pursuant to the Act and the Sales Tax Ordinances, the City
has levied the Sales Tax on the sale, use, storage and consumption of certain of the items taxed under
Sections 10-45 and 10-46 of South Dakota Codified Laws. Sales Tax revenues consisting of the
proceeds collected from the Second 1% Tax Rate, imposed by the Sales Tax Ordinances, are
irrevocably pledged and appropriated to, and shall be deposited to the Special Tax Fund (the "Pledged
Revenues"). For purposes of this Bond Resolution, "Outstanding Bonds" shall mean these Bonds and
any parity lien bonds hereafter issued pursuant to this Bond Resolution. The Pledged Revenues and '
the Special Tax Fund shall be used and applied only in the manner and order hereinafter set forth.
4.03. Construction Account. There is hereby created and established as an account of
the Special Tax Fund, a"Construction Account." There shall be credited to the Construction Account
the proceeds from the sale of the Bonds remaining after (a) the deposit to the Reserve Fund, if any,
0 3 6 equired by Section 4.05, and (b) payment of the (i) underwriter's discount and ii an other ex enses
c ) y p
of issuing the Bonds. All moneys credited to the Construction Account shall be applied solely to the
payment of the costs of the Project. For the purposes of this Bond Resolution, "costs of the Project"
shall include costs of acquisition, construction and equipping the Project, including legal, accounting
and other professional expenses relating to the Project, 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 Project. All sums derived from the investment of moneys in the
Construction Account shall remain in and become part of such account. When all costs of the Project
have been paid, any balance remaining in the Construction Account shall be credited to the Principal
and Interest Account hereinafter established.
4 .04. Principal and Interest Account. There is hereby created and established as an
account of the Special Tax 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 Underwriter. Commencing on the first day of the month following the month in
which the Bonds are delivered to the Underwriter, there shall 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 interest becoming due on the next succeeding interest payment date with
respect to the Outstanding Bonds issued. Commencing on the first day of the month following the
month in which the Bonds are delivered to the Underwriter, there shall 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-twelfth (1/12th) of the principal becoming due on the next succeeding principal
payment date with respect to the Outstanding Bonds. In all 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.
4.05. Reserve Account. There is hereby created and established as an account of the
Special Tax Fund, a "Reserve Account." There shall be credited to the Reserve Account from the
proceeds of the Bonds, an amount not greater than the lesser of(i) 10% of the original principal amount
of the Bonds, or (ii) 125% of the average annual debt servicP on the Outstanding Bonds, or (iii) the
maximum annual debt service on all Outstanding Bonds having a parity lien on the Pledged Revenues
(the "Maximum Reserve Requirement"). Subject to the foregoing, the actual Reserve Requirement
shall be in the amount set forth in Exhibit A to the Bond Purchase Agreement (for all purposes of this
Bond Resolution, such amount shall be referred to as the "Reserve Requirement"). Thereafter, in the
event that the amount on deposit in the Reserve Account shall thereafter fall below the Maximum
Reserve Requirement, additional deposits shall be made from the Pledged Revenues to the Reserve
Account until the Maximum Reserve Requirement is again reached. Upon the issuance of any parity
lien bonds, the Maximum Reserve Requirement established in this section shall be increased to an
amount equal to the combined maximum annual debt service on the Outstanding Bonds, subject to the
applicable provisions of Section 148 of the Internal Revenue Code and pertinent regulations. The
balance required shall be funded on the delivery date of the parity lien bonds.
Moneys credited to the Reserve Account may be used only for the payment of principal
of and interest on the Outstanding Bonds and shall be used only in the event that there are insufficient
moneys in the Principal and Interest Account to meet such principal and interest payments promptly
when due. The interest from any investment of the Reserve Account may be transferred from time to
time to the Construction Account, or 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 Reserve Requirement. Such investments shalt be subject to the limitations of South
Dakota law.
4.06. 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.
4.07. Other Pavment Sources. To the extent that the amounts on hand in the Principal
and Interest Account and the Reserve Account are not sufficient to pay principal of and interest on the
Bonds when due, the City agrees to appropriate in each Fiscal Year from other sources available to it,
for deposit in the Special Tax Fund, such additional amounts as are necessary to pay such principal and '
interest and to restore the Reserve Account to the Reserve Requirement; provided that the amount so
appropriated shall be restored from Pledged Revenues.
4.08. Other Improvements. The remaining Pledged Revenues may be used for paying
f�i� cost of other projects or land acquisition which the City is legally authorized to undertake and/or
037
the payment of debt service on other bonds of the City, and contractual obligations of the City incurred
for the purpose of paying the costs of legally authorized projects for the City. Such Pledged Revenues
shall not be pledged or expended, by interfund transfer or otherwise, for any general purposes of the
City except as herein indicated.
4.09. Deposit and Investment of Funds. The Finance Officer shall 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 shall be accounted for separate and apart from all other accounts of the
City, so long as any of the Bonds and the interest thereon shall remain 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 Bond Resolution; except that moneys from time to time on
hand in the Fund may at any time, in the discretion of this Commission, be invested in securities
permitted 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 5. ADDITIONAL OBLIGATIONS
(a) No additional obligations shall be issued and made payable from the Pledged
Revenues and having a lien upon such revenues and the Special Tax Fund which is prior to or
superior to the lien of the Bonds authorized herein.
(b) Nothing in this Bond Resolution shall be construed in such manner as to prevent
the issuance by the City of additional obligations 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 current 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 obligations, or (iv) the estimated Pledged Revenues to be collected in
the fiscal year in which the proposed parity lien obligations 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 obligations.
(c) Nothing herein shall prevent the City from issuing obligations 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 6. COVENANTS OF THE CITY. The City hereby irrevocably covenants
and agrees 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 Sales Tax Ordinances relating to the Sales Tax by
decreasing the sales tax rate or the allocation of revenues thereof to the Special Tax Fund, or in
any way that would adversely affect the amount of Sales Tax revenues which would otherwise
be collected and deposited to the Special Tax Fund. However, nothing shall prevent the City
from amending the Sales Tax Ordinances 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 Sales Tax authorized by the Sales Tax Ordinances, 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 Sales Tax, in which complete entries shall be made in accordance with standard principles
038
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 Tax.
(d) In the event the Sales Tax of the City is replaced and superseded by a state
collected-locally shared sales tax 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 shall 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.
(e) The City covenants that, as of the date of issuance of the Bonds, no prior
obligations will have been issued and remain outstanding payable in any manner from the
Pledged Revenues or any portion thereof.
Section 7. TAX MATTERS.
7.O1. Tax Matters.
(a) Covenant. The City covenants and agrees with the holders 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 subject to taxation under the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations issued
thereunder.
(b) Investment of Monevs on Deposit in the Principal and Interest Account. The
Finance Officer shall ascertain monthly the amount on deposit in the Principal and Interest
Account. If the amount on deposit therein, ever exceeds by more than an amount equal to the
lesser of(i) 5% of the original principal amount of all Outstanding Bonds, or (ii) $100,000, the
aggregate amount of principal and interest due and payable from the Principal and Interest
Account within 13 months thereafter, such excess shall 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.
(c) Certification. The Mayor and Finance Officer, being the officers of the City
charged with the responsibility for issuing the obligations pursuant to this Bond Resolution, are
authorized and directed to execute and deliver to the purchaser a certification in order ta satisfy
the provisions of all applicable arbitrage and arbitrage rebate regulations adopted by the
treasury or other applicable agency or department and applicable to the Bonds. Such
certification shall state tha� on the basis of the facts, estimates and circumstances in existence
on the date of issue and delivery of the Bonds as therein set forth, it is not expected that the
proceeds of the Bonds will be used in such a manner that would cause any of the Bonds to be
an arbitrage bond, and the certification shall further state that to the best of the knowledge and
belief of the certifying officers there are no other facts, estimates or circumstances that would
materially change such expectation.
7.02. Qualified Tax-Exem�t Obli ations. The City 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 all subordinate entities thereof during calendar year 1998,
including the Bonds,does not exceed$10,000,000.
7.03. Arbitra�e Rebate. In order to comply with relevant provisions of the Internal
Revenue Code (the "Code") relating to the tax-exempt status of the Bonds, the City will undertake to
prevent the Bonds (or any series or portion thereo fl from being considered an "arbitrage bond" within
the meaning of Section 148 of the Code and regulations thereunder. The City hereby covenants to
comply with the arbitrage rebate requirements of Section 148(� of the Code. The City and agrees to
make computations, retain records and pay amounts to the United States at the times and in the manner
required by said Section 148(�.
Section 8. CERTIFICATIONS, DEFEASANCE.
8.01. Certifications of Proceedin�s. The officers of the City and the County Auditor
of Brookings County are authorized and directed to prepare and furnish to the City's financial
039
consultants, the Underwriter and to Faegre & Benson LLP Bond Counsel, certified copies of all
proceedings and records of the City relating to the authorization and issuance of the Bonds and such
other affidavits, certificates and opinions 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, affidavits and opinions,
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.
8.02. Defeasance. When all of the Bonds have been discharged as provided in this
section, all pledges, covenants and other rights granted by this Bond Resolution shall cease. The City
may discharge its obligations with respect to any Bonds which are due on any date by depositing with
the paying agent 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 paying
agent 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 paying agent 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 a� 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 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.
Motion was made by Artz, seconded by Klavetter approving an application to move a 16' x 24'
residential garage from 3024 Highway 14 By-Pass to Outlot M in the SE '/a of Section 26-T110N-
RSOW also known as#99 Medary Village Mobile Home Park. All members voted YES; motion
carried.
Motion was made by Plumart, seconded by Artz approving authorization to publish a notice on
applications for alcoholic beverage licenses for the Elks and VFW Club. All members voted YES;
motion carried.
Motion was made by Klavetter, seconded by Plumart approving Resolution No. 136-98
authorizing final change order for Medary Avenue So. Street Ii�lprovement Project No. P3301(03)
Halstead Construction. All members voted YES; motion carried.
RESOLUTION NO. 136-98
RESOLUTION AUTHORIZING FINAL CHANGE ORDER(CCO#1 FINAL)FOR STREET
IMPROVEMENT PROJECT NO. P3301(03)HALSTEAD CONSTRUCTION
Medary Avenue South(15`h Street South—20`h Street South)
BE IT RESOLVED by the City Commission that the following change order be allowed for the
Street Improvement Project P3301 (03)Medary Avenue South
Construction Chan�e Order Number 1 (Fina1�
Adjust estimated quantities to"as built" for a total increase of$25,085.74.
Motion was made by Artz, seconded by Klavetter approving Resolution No. 137-98 authorizing
the placement of stop signs on Seventh Street at Eleventh Avenue. All members voted YES; motion �
carried.
040
RESOLUTION NO. 137-98
CONCURRING IN THE PLACEMENT OF A STOP SIGN ON SEVENTH STREET.AT
ELEVENTH AVENUE
WHEREAS, Chapter 34,Article XIII, Section 34-204 of the Revised Ordinance of the City of
Brookings,provides for approval by the Commission for placement of stop signs in locations other
than along through streets.
NOW, THEREFORE, BE IT RESOLVED that the City Coinmission concurs in the
recommendation of the Traffic Safety Committee and the Public Safety Commissioner and approves
the placement of stop signs on Seventh Street at its intersection with Eleventh Avenue.
Motion was made by Klavetter, seconded by Plumart approving the cancellation of the
December 1, 1998 City Commission Meeting due to lack of a quorum. All members voted YES;
motion carried.
Introduction and first reading of Ordinance No. 25-98 providing for disposition of contracts
declared void pursuant to SDCL 5-18-19. Motion was made by Plumart, seconded by Artz approving
the first reading of Ordinance 25-98. All members voted YES;motion carried.
ORDINANCE 25-98
AN ORDINANCE PROVIDING FOR DISPOSITION OF CONTRACTS DECLARED VOiD
PURSUANT TO SDCL 5-18-19.
Commission meeting adjourned.
Budget hearings for Liquor, Solid Waste, and Airport were heard at this time.
Budget hearings adjourned. �
.
Mayor
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