Item 1. Finance Plan for Lease Revenue Bond, Series 2024A
Request for
EDA Board of Commissioners
Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration Executive Director Flaherty November 12, 2024
PRESENTER(s) REVIEWED BY: ITEM #:
Administration Bond Counsel, Taft 4.1 – Finance Plan Review
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
X Is a strong organization that is committed to leading the community through innovative communication.
X Has proactively expanded infrastructure to responsibly provide core services.
X Is committed to delivery of quality emergency service responsive to community needs and expectations in a
cost-effective manner.
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
It is recommended that the Board of Commissioners review and discuss a Finance Plan for bond issuance.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
Yes No
BACKGROUND/JUSTIFICATION:
The Otsego Economic Development Authority (the EDA) is proposing to issue lease revenue bonds pursuant to Minnesota
Statutes 469.090 through 469.1082 to finance a new fire and emergency services building on land located in the City.
Finance Plan
The Municipal Advisor team from Northland Securities, Inc. (Northland) has developed a draft Finance Plan for the
issuance of Lease Revenue Bonds, Series 2024A. The contents of the Finance Plan are preliminary and based on certain
assumptions for the structure of the issuance. The EDA will be presented with the information by Northland
representative Jessica Green.
Municipal Advisory Service Agreement
The agreement is between the EDA and Northland. The agreement outlines the services to be provided by Northland that
are necessary in connection with the sale of the bond.
The agreements outline the compensation to Northland for the services provided in the amount of $57,657, which are
costs of issuance and will be financed with proceeds of the bond. The EDA has no obligation to issue the bond under the
terms of the agreement, and in the event no bond is issued, the EDA has no obligation of fees to Northland.
City Attorney Kendall has reviewed the respective agreement with recommendation for consideration of approval.
Resolution
Taft Law, Bond Counsel, has prepared a Resolution providing for the competitive negotiated sale of Lease Revenue
Bonds, Series 2024A, which has been included within the packet for review and discussion. This resolution essentially
provides notice of the sale, includes terms of the sale, and authorizes Northland to solicit proposals from prospective
bidders.
Meeting Outcomes
The EDA Commissioners are being presented with this information for the first time at this meeting. The EDA
Commissioners will be asked to provide feedback on the assumptions used within the Finance Plan and to provide
direction to Northland whether modifications to the issuance structure are desired.
There is no requirement that any formal action is taken at this meeting. However, if the EDA desires to continue the path
of bond issuance, eventual approvals of the Municipal Advisory Service Agreement and Resolution included within the
packet would be necessary.
Remaining Steps
The remainder of the issuance process would include the following steps and tentative timelines:
- Week of November 18: Credit Rating Analysis Call with S&P Global Ratings
- Week of November 25: Credit Rating Expected from S&P Global Ratings
- December 9: Competitive Negotiated Sale
- December 9: Consideration of Approvals by the EDA and City Council
- December 30: Bond will Close and Proceeds will be Available
SUPPORTING DOCUMENTS ATTACHED:
• Finance Plan
• Municipal Advisory Service Agreement
• Resolution 2024-04
POSSIBLE MOTIONS
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to approve the Municipal Advisory Service Agreement between the Otsego Economic Development Authority
and Northland Securities, Inc.
Motion to adopt Resolution 2024-04 Providing for the Competitive Negotiated Sale of Lease Revenue Bonds, Series
2024A.
Motion to schedule a meeting of the Otsego Economic Development Authority on December 9, 2024, at 5:30PM to be
held at the Prairie Center for discussion and consideration of award of the Lease Revenue Bonds, Series 2024A.
BUDGET INFORMATION
FUNDING: BUDGETED:
Proposed motions at this meeting do not create any
financial commitments or obligations.
N/A
Finance Plan
Otsego Economic Development Authority,
Minnesota
$18,420,000
Lease Revenue Bonds, Series 2024A
(City of Otsego, Minnesota Lease with Option to
Purchase Project)
November 12, 2024
150 South 5th Street, Suite 3300
Minneapolis, MN 55402
612-851-5900 800-851-2920
www.northlandsecurities.com
Member FINRA and SIPC | Registered with SEC and MSRB
Northland Securities, Inc. Page 2
Contents
Executive Summary ............................................................................................................................... 2
Issue Overview ....................................................................................................................................... 3
Purpose ........................................................................................................................................................ 3
Authority ..................................................................................................................................................... 3
Structure ...................................................................................................................................................... 3
Security and Source of Repayment ................................................................................................... 3
Plan Rationale ............................................................................................................................................ 3
Issuing Process .......................................................................................................................................... 3
Attachment 1 – Preliminary Debt Service Schedule .......................................................................... 5
Attachment 2 – Related Considerations .............................................................................................. 6
Bank Qualification ............................................................................................................................ 6
Arbitrage Compliance .................................................................................................................... 6
Continuing Disclosure .................................................................................................................... 6
Premiums ............................................................................................................................................. 6
Rating .................................................................................................................................................... 7
Attachment 3 – Calendar of Events ...................................................................................................... 8
Attachment 4 - Risk Factors ................................................................................................................... 9
Northland Securities, Inc. Page 2
Executive Summary
The following is a summary of the recommended terms for the issuance of $18,420,000 Lease
Revenue Bonds, Series 2024A (City of Otsego, Minnesota Lease with Option to Purchase Project)
(the “Bonds”). Additional information on the proposed finance plan and issuing process can be
found after the Executive Summary, in the Issue Overview and Attachment 2 – Related
Considerations.
Purpose Proceeds from the Bonds will be used to finance a fire and
emergency services building and to finance the costs associated
with the issuance of the Bonds.
Security The EDA will pledge lease payments received from the City of
Otsego, Minnesota for the facility for payment of the Bonds.
The full faith and credit of the City is not pledged for payment
of the Bonds. The lease payments are subject to annual
appropriation by the City.
Repayment Term The Bonds will mature annually each February 1 in the years
2027 through 2046. Interest on the Bonds will be payable on
August 1, 2025 and semiannually thereafter on each February 1
and August 1.
Estimated Interest Rate True interest cost (TIC): 4.26%
Prepayment Option Bonds maturing on and after February 1, 2034 will be subject to
redemption on February 1, 2033 and any day thereafter at a
price of par plus accrued interest. The Bonds will also be subject
to Extraordinary Redemption at a price of par plus accrued
interest.
Rating A rating will be requested from S&P Global Ratings (“S&P”). A
rating of “AA” was assumed for planning purposes.
Tax Status The Bonds will be tax-exempt, bank qualified obligations.
Risk Factors There are certain risks associated with all debt. Risk factors
related to the Bonds are discussed in Attachment 4.
Type of Bond Sale Public Sale – Competitive Bids
Proposals Received Monday, December 9, 2024 @ 10:00 A.M.
Board Consideration Monday, December 9, 2024
Northland Securities, Inc. Page 3
Issue Overview
Purpose
Proceeds from the Bonds will be used to finance a fire and emergency services building (the
“Project”) and to pay costs associated with issuing the Bonds. The Bonds have been sized based
on bids received by the EDA. The table below contains the estimated sources and uses of funds
for the bond issue.
Authority
The Bonds will be issued by the EDA pursuant to the authority of Minnesota Statutes, Chapter
469 and will be an obligation of the EDA pursuant to Minnesota Statutes, Section 465.71.
Structure
The Bonds have been structured to result in relatively level debt service payments over 20 years.
The proposed structure for the bond issue and preliminary debt service projections are illustrated
in Attachment 1.
Security and Source of Repayment
The Bonds will not be general obligations of the City. The finance plan relies on the following
assumptions for the revenues used to pay debt service, as provided by City and EDA staff:
• Lease Payments. The City will covenant to make the lease payments to the EDA from any
revenues available for payment of the Bonds. The Bonds do not constitute a general
obligation of the EDA or the City. The City’s obligation under the Lease is subject to annual
appropriation. The City will make semi-annual lease payments to the Trustee in an amount
sufficient to pay the principal and interest when due on the Bonds. The City expects to use
ad valorem taxes to cover the lease payments.
Plan Rationale
The Finance Plan recommended in this report is based on a variety of factors and information
provided by the EDA and City related to the financed project and EDA and City objectives,
Northland’s knowledge of the EDA and City and our experience in working with similar EDAs
and cities and projects. The issuance of Public Project Lease Revenue Bonds provides the best
means of achieving the EDA’s and City’s objectives and cost-effective financing.
Issuing Process
Northland will receive bids from underwriters to purchase the Bonds on Monday, December 9,
2024 at 10:00 A.M. Market conditions and the marketability of the Bonds support issuance
through a competitive sale. This process has been chosen as it is intended to produce the lowest
Sources Of Funds
Par Amount of Bonds $18,420,000.00
Planned Issuer Equity contribution 2,000,000.00
Total Sources $20,420,000.00
Uses Of Funds
Deposit to Project Construction Fund 19,218,761.00
Deposit to Capitalized Interest (CIF) Fund 787,449.56
Total Underwriter's Discount (1.500%)276,300.00
Costs of Issuance 133,907.00
Rounding Amount 3,582.44
Total Uses $20,420,000.00
Northland Securities, Inc. Page 4
combination of interest expense and underwriting expense on the structure, date and time set to
receive bids. The calendar of events for the issuing process can be found in Attachment 3.
Municipal Advisor: Northland Securities, Inc., Minneapolis, Minnesota
Bond Counsel: Taft, Stettinius & Hollister LLP, Minneapolis, Minnesota
Paying Agent/Trustee: U.S. Bank Trust Company, National Association, St. Paul, Minnesota
Northland Securities, Inc. Page 5
Attachment 1 – Preliminary Debt Service Schedule
Date Principal Coupon Interest Total P+I Fiscal Total
12/30/2024 -----
08/01/2025 --424,940.81 424,940.81 -
02/01/2026 --362,508.75 362,508.75 787,449.56
08/01/2026 --362,508.75 362,508.75 -
02/01/2027 645,000.00 3.300%362,508.75 1,007,508.75 1,370,017.50
08/01/2027 --351,866.25 351,866.25 -
02/01/2028 665,000.00 3.150%351,866.25 1,016,866.25 1,368,732.50
08/01/2028 --341,392.50 341,392.50 -
02/01/2029 690,000.00 3.150%341,392.50 1,031,392.50 1,372,785.00
08/01/2029 --330,525.00 330,525.00 -
02/01/2030 710,000.00 3.200%330,525.00 1,040,525.00 1,371,050.00
08/01/2030 --319,165.00 319,165.00 -
02/01/2031 730,000.00 3.300%319,165.00 1,049,165.00 1,368,330.00
08/01/2031 --307,120.00 307,120.00 -
02/01/2032 755,000.00 3.400%307,120.00 1,062,120.00 1,369,240.00
08/01/2032 --294,285.00 294,285.00 -
02/01/2033 780,000.00 3.500%294,285.00 1,074,285.00 1,368,570.00
08/01/2033 --280,635.00 280,635.00 -
02/01/2034 810,000.00 3.600%280,635.00 1,090,635.00 1,371,270.00
08/01/2034 --266,055.00 266,055.00 -
02/01/2035 840,000.00 3.700%266,055.00 1,106,055.00 1,372,110.00
08/01/2035 --250,515.00 250,515.00 -
02/01/2036 870,000.00 3.850%250,515.00 1,120,515.00 1,371,030.00
08/01/2036 --233,767.50 233,767.50 -
02/01/2037 905,000.00 3.950%233,767.50 1,138,767.50 1,372,535.00
08/01/2037 --215,893.75 215,893.75 -
02/01/2038 940,000.00 4.050%215,893.75 1,155,893.75 1,371,787.50
08/01/2038 --196,858.75 196,858.75 -
02/01/2039 975,000.00 4.150%196,858.75 1,171,858.75 1,368,717.50
08/01/2039 --176,627.50 176,627.50 -
02/01/2040 1,015,000.00 4.200%176,627.50 1,191,627.50 1,368,255.00
08/01/2040 --155,312.50 155,312.50 -
02/01/2041 1,060,000.00 4.250%155,312.50 1,215,312.50 1,370,625.00
08/01/2041 --132,787.50 132,787.50 -
02/01/2042 1,105,000.00 4.300%132,787.50 1,237,787.50 1,370,575.00
08/01/2042 --109,030.00 109,030.00 -
02/01/2043 1,155,000.00 4.350%109,030.00 1,264,030.00 1,373,060.00
08/01/2043 --83,908.75 83,908.75 -
02/01/2044 1,205,000.00 4.400%83,908.75 1,288,908.75 1,372,817.50
08/01/2044 --57,398.75 57,398.75 -
02/01/2045 1,255,000.00 4.450%57,398.75 1,312,398.75 1,369,797.50
08/01/2045 --29,475.00 29,475.00 -
02/01/2046 1,310,000.00 4.500%29,475.00 1,339,475.00 1,368,950.00
Total $18,420,000.00 -$9,777,704.56 $28,197,704.56 -
Yield Statistics
Bond Year Dollars $236,341.17
Average Life 12.831 Years
Average Coupon 4.1371145%
Net Interest Cost (NIC)4.2540217%
True Interest Cost (TIC)4.2622769%
Bond Yield for Arbitrage Purposes 4.1038312%
All Inclusive Cost (AIC)4.3403030%
IRS Form 8038
Net Interest Cost 4.1371145%
Weighted Average Maturity 12.831 Years
Optional Redemption
02/01/2033 @100.000%
Northland Securities, Inc. Page 6
Attachment 2 – Related Considerations
Not Bank Qualified
The Bonds will exceed $10,000,000 in par amount. Therefore, the Bonds will be designated as
“not bank qualified” obligations pursuant to Federal Tax Law.
Arbitrage Compliance
Project/Construction Fund. All tax-exempt bond issues are subject to federal rebate requirements
which require all arbitrage earned to be rebated to the U.S. Treasury. The rebate exemption the
EDA expects to qualify for is the “24-month exemption.”
Debt Service Fund. The EDA must maintain a bona fide debt service fund for the Bonds or be
subject to yield restriction in the debt service fund. A bona fide debt service fund involves an
equal matching of revenues to debt service expense with a balance forward permitted equal to
the greater of the investment earnings in the fund during that year or 1/12 of the debt service of
that year.
The EDA and the City should become familiar with the various Arbitrage Compliance
requirements for this bond issue. The Resolution for the Bonds prepared by Bond Counsel
explains the requirements in greater detail.
Continuing Disclosure
Type: Full
Dissemination Agent: Northland Securities, Inc.
The requirements for continuing disclosure are governed by SEC Rule 15c2-12. The primary
requirements of Rule 15c2-12 actually fall on underwriters. The Rule sets forth due diligence
needed prior to the underwriter’s purchase of municipal securities. Part of this requirement is
obtaining commitment from the issuer to provide continuing disclosure. The document
describing the continuing disclosure commitments (the “Undertaking”) is contained in the
Official Statement that will be prepared to offer the Bonds to investors.
The City, as the “Obligated Party” is primarily responsible for payment on the Bonds, has more
than $10,000,000 of outstanding debt and is required to undertake “full” continuing disclosure.
Full disclosure requires annual posting of the audit and a separate continuing disclosure report,
as well as the reporting of certain “material events.” Material events set forth in the Rule,
including, but not limited to, bond rating changes, call notices, and issuance of “financial
obligations” (such as PFA loans, leases, or bank placements) must be reported within ten business
days of occurrence. The report contains annual financial information and operating data that
“mirrors” material information presented in the Official Statement. The specific contents of the
annual report will be described in the Undertaking that appears in the appendix of the Official
Statement. Northland currently serves as dissemination agent for the City, assisting with the
annual reporting. The information for the Bonds will be incorporated into our reporting.
Premiums
In the current market environment, it is likely that bids received from underwriters will include
premiums. A premium bid occurs when the purchaser pays the EDA an amount in excess of the
par amount of a maturity in exchange for a higher coupon (interest rate). The use of premiums
reflects the bidder’s view on future market conditions, tax considerations for investors and other
factors. Ultimately, the true interest cost (“TIC”) calculation will determine the lowest bid,
regardless of premium.
Northland Securities, Inc. Page 7
A premium bid produces additional funds that can be used in several ways:
• The premium means that the EDA needs less bond proceeds and can reduce the size of
the issue by the amount of the premium.
• The premium can be deposited in the Construction Fund and used to pay additional
project costs, rather than used to reduce the size of the issue.
• The premium can be deposited in the Debt Service Fund and used to pay principal and
interest.
Northland will work with EDA staff prior to the sale day to determine use of premium (if any).
Rating
A rating will be requested from S&P Global Ratings. The City’s general obligation debt is
currently rated "AA+" by S&P. Bonds secured only by annual appropriations for public projects
are typically rated lower than general obligation debt. The rating process will include a
conference call with the rating analyst. Northland will assist City and EDA staff in preparing for
and conducting the rating call.
Northland Securities, Inc. Page 8
Attachment 3 – Calendar of Events
The following checklist of items denotes each milestone activity as well as the members of the
finance team who will have the responsibility to complete it. Please note this proposed timetable
assumes regularly scheduled EDA and City Council meetings.
Date Action Responsible Party
June 24, 2024 EDA Meeting to Elect Officers EDA Board Action
July 1, 2024 Submit Notice to Star News for Publication on
Saturday, July 6, 2024
City/EDA
July 6, 2024 Publication of Public Hearing Notice (10-day notice
required for public hearing pursuant to MN Statute
469.101)
Star News, City/EDA
July 22, 2024 Public Hearing – Establish Development District EDA Board Action,
Bond Counsel,
Northland
October 21, 2024 Preliminary Official Statement Sent to City/EDA for
Sign Off and to Rating Agency
Northland, City Staff
November 4, 2024 Set Sale Resolution Sent to EDA for Packets
Finance Plan Sent to the EDA
Northland, Bond
Counsel
November 12, 2024 Set Sale Resolution for Bonds Adopted
Review of Finance Plan
EDA Board Action,
Bond Counsel
Week of November
18, 2024
Rating Conference Call Northland, City/EDA
Staff, Rating Agency
November 25, 2024 Rating Received Rating Agency,
City/EDA Staff,
Northland
December 2, 2024 Awarding Resolution sent to the EDA Northland, Bond
Counsel
December 9, 2024 Bond Sale 10:00 a.m.
Awarding Resolution Adopted – 7:00 p.m.
EDA Board/City
Council Action,
Northland, Bond
Counsel
December 30, 2024 Closing on the Bonds (proceeds available) City/EDA Staff,
Northland, Bond
Counsel
Northland Securities, Inc. Page 9
Attachment 4 - Risk Factors
Lease Revenue Bonds: The Bonds are subject to the risks of annual appropriation debt described
earlier in this report. Although levy limits are not currently enacted, the most recent legislation
allows a levy to be made for rent payments to the EDA and it can be made outside of levy limits
(levy to pay the bonded indebtedness of another political subdivision). The status of this
authority under future levy limitations (if any) cannot be predicted.
General: In addition to the risks described above, there are certain general risks associated with
the issuance of bonds. These risks include, but are not limited to:
• Failure to comply with covenants in bond resolution.
• Failure to comply with Undertaking for continuing disclosure.
• Failure to comply with IRS regulations, including regulations related to use of the proceeds
and arbitrage/rebate. The IRS regulations govern the ability of the City to issue its bonds as
tax-exempt securities and failure to comply with the IRS regulations may lead to loss of tax-
exemption.
MUNICIPAL ADVISORY SERVICE AGREEMENT
BY AND BETWEEN
THE OTSEGO ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA
AND
NORTHLAND SECURITIES, INC.
This Agreement is made and entered into by and between the Otsego Economic Development
Authority, Minnesota (hereinafter "Client") and Northland Securities, Inc., of Minneapolis, Minnesota
(hereinafter "Northland").
WITNESSETH
WHEREAS, the Client desires to have Northland provide it with advice on the structure, terms, timing
and other matters related to the issuance of the Lease Revenue Bonds, Series 2024A (City of Otsego,
MN Lease with Option to Purchase Project) (the “Debt”) serving in the role of municipal (financial)
advisor, and
WHEREAS, Northland is a registered municipal advisor with both the Securities and Exchange
Commission (“SEC”) and the Municipal Securities Rulemaking Board (“MSRB”) (registration # 866-
00082-00), and
WHEREAS, Northland will act as municipal advisor in accordance with the duties and responsibilities
of Rule G-42 of the MSRB, and
WHEREAS, the MSRB provides a municipal advisory client brochure on its website (www.msrb.org)
that describes the protections that may be provided by the MSRB rules, including professional
competency, fair dealing, duty of loyalty, remedies for disputes and how to file a complaint with an
appropriate regulatory authority, and
WHEREAS, the Client and Northland are entering into this Agreement to define the municipal
advisory relationship at the earliest opportunity related to the inception of the municipal advisory
relationship for the Debt, and
WHEREAS, Northland desires to furnish services to the Client as hereinafter described,
NOW, THEREFORE, it is agreed by and between the parties as follows:
SERVICES TO BE PROVIDED BY NORTHLAND
Northland shall provide the Client with services necessary to analyze, structure, offer for sale and close
the Debt. The services will be tailored to meet the needs of this engagement and may include:
Planning and Development
1. Assist Client officials to define the scope and the objectives for the Debt.
2. Investigate and consider reasonably feasible financing alternatives.
Municipal Advisory Service Agreement
2
3. Assist the Client in understanding the material risks, potential benefits, structure and other
characteristics of the recommended plan for the Debt, including issue structure, estimated debt
service payments, projected revenues, method of issuance, bond rating, sale timing, and call
provisions.
4. Prepare a schedule of events related to the issuance process.
5. Coordinate with bond counsel any actions needed to authorize the issuance of the Debt.
6. Attend meetings of the Client and other project and bond issue related meetings as needed and as
requested.
Bond Sale
1. Assist the Client with the preparation, review and approval of the preliminary official statement
(POS).
2. Assist the Client and bond counsel with preparing and publishing the Official Notice of Sale if
required by law.
3. Prepare and submit application for bond rating(s) and assist the Client with furnishing the rating
agency(s) with any additional information required to conduct the rating review. Assist the Client
with preparing and conducting the rating call or other presentation.
4. Assist the Client in receiving the bids, compute the accuracy of the bids received, and recommend
to the Client the most favorable bid for award.
5. Coordinate with bond counsel the preparation of required contracts and resolutions.
Post-Sale Support
1. Assist the Client with the preparation of final official statement, distribution to the underwriter
and posting on EMMA.
2. Coordinate the bond issue closing, including making all arrangements for bond printing,
registration, and delivery.
3. Furnish to the Client a complete transcript of the transaction, if not provided by bond counsel.
There are no specific limitations on the scope of this agreement.
COMPENSATION
For providing these services with respect to the Debt, Northland shall be paid a lump sum of $57,657.
The fee due to Northland shall be payable by the Client upon the closing of the Bonds.
Northland agrees to pay the following expenses from its fee:
• Out-of-pocket expenses such as travel, long distance phone, and copy costs.
• Production and distribution of material to rating agencies and/or bond insurance companies.
• Preparation of the bond transcript.
The Client agrees to pay for all other expenses related to the processing of the bond issue(s) including,
but not limited to, the following:
• Engineering and/or architectural fees.
• Publication of legal notices.
• Bond counsel and local attorney fees.
• Fees for various debt certificates.
• The cost of printing Official Statements, if any.
• Client staff expenses.
Municipal Advisory Service Agreement
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• Airfare and lodging expenses of one Northland official and Client officials when and if traveling
for rating agency presentations.
• Rating agency fees, if any.
• Bond insurance fees, if any.
• Accounting and other related fees.
It is expressly understood that there is no obligation on the part of the Client under the terms of this
Agreement to issue the Debt. If the Debt is not issued, Northland agrees to pay its own expenses and
receive no fee for any municipal advisory services it has rendered pursuant to this Agreement.
CONFLICTS OF INTEREST
Northland, as your Municipal Advisor, mitigates conflicts through its adherence to its fiduciary duty
to the Client, which includes a duty of loyalty to the Client in performing all municipal advisory
activities for the Client. This duty of loyalty obligates Northland to deal honestly and with the utmost
good faith with the Client and to act in the Client’s best interests without regard to our own financial
or other interests. In addition, because Northland is a broker-dealer with significant capital due to the
nature of its overall business, the success and profitability of Northland is not dependent on
maximizing short-term revenue generated from individualized recommendations to its clients but
instead is dependent on long-term profitably built on a foundation of integrity, quality of service and
strict adherence to its fiduciary duty. Furthermore, Northland’s municipal advisory supervisory
structure leverages our long-standing and comprehensive broker-dealer supervisory processes and
practices, and provides strong safeguards against individual representatives of Northland potentially
departing from our regulatory duties due to personal interests. The disclosures below describe, as
applicable, any additional mitigations that may be relevant with respect to any specific conflict
disclosed below.
Northland serves a wide variety of other clients that may from time to time have interests that could
have a direct or indirect impact on the interests of the Client. For example, Northland serves as
Municipal Advisor to other Municipal Advisory clients and, in such cases, owes a regulatory duty to
such other clients just as it does to the Client under this Agreement. These other clients may, from time
to time and depending on the specific circumstances, have competing interests, such as accessing the
new issue market with the most advantageous timing and with limited competition at the time of the
offering. In acting in the interests of its various clients, Northland could potentially face a conflict of
interest arising from these competing client interests. In other cases, as a broker-dealer that engages in
underwritings of new issuances of municipal securities by other municipal entities, the interests of
Northland to achieve a successful and profitable underwriting for its municipal entity underwriting
clients could potentially constitute a conflict of interest if, as in the example above, the municipal
entities that Northland serves as underwriter or municipal advisor have competing interests in seeking
to access the new issue market with the most advantageous timing and with limited competition at
the time of the offering. However, none of these other engagements or relationships would impair
Northland’s ability to fulfill its regulatory duties to the Client.
The compensation for services provided in this Agreement is customary in the municipal securities
market, however, it may pose a conflict of interest. The fees due under this Agreement are in a fixed
Municipal Advisory Service Agreement
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amount established at the outset of the Agreement. The amount is usually based upon an analysis by
Client and Northland of, among other things, the expected duration and complexity of the transaction
and the Scope of Services to be performed by Northland. This form of compensation presents a
potential conflict of interest because, if the transaction requires more work than originally
contemplated, Northland may suffer a loss. Thus, Northland may recommend less time-consuming
alternatives, or fail to do a thorough analysis of alternatives. This conflict of interest is mitigated by
supervisory policies and procedures to ensure the scope of services within the transaction align with
other comparable engagements. By executing this Agreement, the Client acknowledges and accepts
the potential conflicts of interest posed by the compensation to Northland. Northland does not
participate in any payments to be retained, nor participate in any fee splitting agreements or
arrangements.
Northland is a subsidiary of Northland Capital Holdings, Inc. First National of Nebraska, Inc.
(“FNNI”), is the parent company of Northland Capital Holdings, Inc. and First National Bank of
Omaha.
Under FNNI, Northland and its affiliates are comprised of a securities firm and a commercial bank.
These entities provide investment banking, asset management, financing, financial advisory services
and other commercial and investment banking products and services to a wide range of corporations
and individuals. In addition, Northland and its affiliates currently have, and may in the future have,
investment and commercial banking, trust, and other relationships with parties that may relate to
assets of, or be involved in the issuance of securities and/or instruments by, the Client and its affiliates.
In the ordinary course of their respective businesses, Northland and its affiliates have engaged, and
may in the future engage, in transactions with, and perform services for, the Client and its affiliates for
which they received or will receive customary fees and expenses.
Northland is a broker-dealer that engages in a broad range of securities-related activities to service its
clients, in addition to serving as a Municipal Advisor or Underwriter. Such securities-related activities,
which may include but are not limited to the buying and selling of outstanding securities, including
securities of the Client, may be undertaken on behalf of, or as counterparty to, the Client, and current
or potential investors in the securities of the Client. These other Northland clients may, from time to
time and depending on the specific circumstances, have interests in conflict with those of the Client,
such as when their buying or selling of the Client’s securities may have an adverse effect on the market
for the Client’s securities. However, any potential conflict arising from Northland effecting or
otherwise assisting such other clients in connection with such transactions is mitigated by means of
such activities being engaged in on customary terms through other business units of Northland that
operate independently from Northland’s Municipal Advisory business, thereby reducing or
eliminating the likelihood that the interests of such other clients would have an impact on the services
provided by Northland to the Client under this Agreement. Northland has policies and procedures in
place to ensure that Northland as a broker-dealer or its affiliates are not participating in bidding or
determining market prices for the Client’s transaction that is covered under this Agreement.
Municipal Advisory Service Agreement
5
Northland Trust Services, Inc. is a subsidiary of Northland Capital Holdings, Inc. Northland Trust
Services provides paying agent services to issuers of municipal bonds. The Client is solely responsible
for the decision on the source of paying agent services. Any engagement of Northland Trust Services
is outside the scope of this Agreement. No compensation paid to Northland Trust Services is shared
with Northland Securities.
Northland is not aware of any additional material conflicts of interest that could reasonably be
anticipated to impair Northland’s ability to provide advice to or on behalf of the Client in accordance
with the standards of conduct for municipal advisors.
LEGAL AND DISCIPLINARY ACTIONS
The Client can find information about legal or disciplinary events reported by the Securities and
Exchange Commission contained in Form MA or Form MA-I related to Northland at
www.sec.gov/municipal/oms-edgar-links.
SUCCESSORS OR ASSIGNS
The terms and provisions of this Agreement are binding upon and inure to the benefit of the Client
and Northland and their successors or assigns.
TERM OF THIS AGREEMENT
This Agreement may be terminated by thirty (30) days written notice by either the Client or Northland
and it shall terminate sixty (60) days following the closing date related to the issuance of the Debt.
Dated this 12th day of November, 2024.
Northland Securities, Inc.
By: ___
Jessica Green, Managing Director
By: _________________________________
Craig Jones, Managing Director
Otsego Economic Development Authority, Minnesota
By: _________________________________
Its: _________________________________
135700721v1
EXTRACT OF MINUTES OF A MEETING
OF THE BOARD OF COMMISSIONERS OF THE OTSEGO ECONOMIC DEVELOPMENT
AUTHORITY
HELD: NOVEMBER 12, 2024
Pursuant to due call and notice thereof, a regular or special meeting of the Board of
Commissioners of the Otsego Economic Development Authority, Wright County, Minnesota,
was duly held at the Otsego Prairie Center on November 12, 2024, at 5:30 P.M. for the purpose
in part of authorizing the competitive negotiated sale of the $18,420,000 Lease Revenue Bonds,
Series 2024A (City of Otsego, Minnesota Lease with Option to Purchase Project).
The following members were present:
and the following were absent:
Member _______________ introduced the FOLLOWING resolution and moved its
adoption:
RESOLUTION NO. 2024-04
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF
APPROXIMATELY $18,420,000
LEASE REVENUE BONDS, SERIES 2024A (CITY OF OTSEGO, MINNESOTA LEASE
WITH OPTION TO PURCHASE PROJECT)
A. WHEREAS, Minnesota Statutes, Section 469.090 through 469.1082 (the "Act")
authorizes the Otsego Economic Development Authority (the "Authority") to issue revenue
bonds, in anticipation of the collection of revenues of a project, to finance, in whole or in part,
the cost of acquisition, construction, reconstruction, improvement, betterment or extension of a
project; and
B. WHEREAS, the Authority has heretofore determined that it is necessary and
expedient to issue its Lease Revenue Bonds, Series 2024A (City of Otsego, Minnesota Lease
with Option to Purchase Project) in the approximate aggregate principal amount of $18,420,000
(the "Bonds") pursuant to the Act to finance a new fire and emergency services building located
in the City of Otsego, Minnesota and to pay costs associated with the issuance of the Bonds; and
C. WHEREAS, the Authority has retained Northland Securities, Inc., in
Minneapolis, Minnesota ("Northland"), as its independent municipal advisor and is therefore
authorized to sell the Bonds by competitive negotiated sale in accordance with Minnesota
Statutes, Section 475.60, Subdivision 2(9); and
D. WHEREAS, the Authority has retained Taft Stettinius & Hollister LLP, in
Minneapolis, Minnesota as its bond counsel for purposes of this financing.
135700721v1
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NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Otsego
Economic Development Authority as follows:
1. Authorization. The Board of Commissioners of the Authority hereby authorizes
Northland to solicit proposals for the competitive negotiated sale of the Bonds.
2. Meeting; Proposal Opening. The Board of Commissioners shall meet at the time
and place specified in the Notice of Sale, in substantially the form attached hereto as Attachment
A, for the purpose of considering sealed proposals for and awarding the sale of the Bonds. The
Secretary, or designee, shall open proposals at the time and place specified in the Notice of Sale.
3. Notice of Sale. The terms and conditions of the Bonds and the negotiation thereof
are in substantially in the form set forth in the Notice of Sale attached hereto as Attachment A
and hereby approved and made a part hereof.
4. Official Statement. In connection with the competitive negotiated sale of the
Bonds, the Secretary and other officers or employees of the Authority are hereby authorized to
cooperate with Northland and participate in the preparation of an official statement for the
Bonds, and to execute and deliver it on behalf of the Authority upon its completion.
The motion for the adoption of the foregoing resolution was duly seconded by member
_______________ and, after full discussion thereof and upon a vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
Whereupon the resolution was declared duly passed and adopted.
Adopted this 12th day of November, 2024 by the Board of Commissioners of the Otsego
Economic Development Authority.
_________________________
President
Attest: ________________________
Its: Secretary
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3
STATE OF MINNESOTA
COUNTY OF WRIGHT
I, the undersigned, being the duly qualified and acting Secretary of the Otsego Economic
Development Authority, Minnesota, DO HEREBY CERTIFY that the attached resolution is a
true and correct copy of an extract of minutes of a meeting of the Board of Commissioners of the
Otsego Economic Development Authority, as such minutes relate to the Authority's $18,420,000
Lease Revenue Bonds, Series 2024A (City of Otsego, Minnesota Lease with Option to Purchase
Project).
WITNESS my hand on November 12, 2024.
__________________________________
Secretary
135700721v1
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ATTACHMENT A
NOTICE OF SALE
$18,420,000*
LEASE REVENUE BONDS, SERIES 2024A
(CITY OF OTSEGO, MINNESOTA LEASE WITH OPTION TO PURCHASE PROJECT)
OTSEGO ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA
(Book-Entry Only)
NOTICE IS HEREBY GIVEN that these Bonds will be offered for sale according to the following terms:
TIME AND PLACE:
Proposals (also referred to herein as “bids”) will be opened by the Economic Development Authority’s (the
“EDA”) Treasurer or designee, on Monday, December 9, 2024, at 10:00 A.M., CT, at the offices of
Northland Securities, Inc. (the EDA’s “Municipal Advisor”), 150 South 5th Street, Suite 3300,
Minneapolis, Minnesota 55402. Consideration of the Proposals for award of the sale will be by the EDA
Board at its special meeting at the City Offices beginning Monday, December 9, 2024 at 7:00 P.M., CT.
SUBMISSION OF PROPOSALS
Proposals may be:
a) submitted to the office of Northland Securities, Inc.,
b) emailed to PublicSale@northlandsecurities.com
c) for proposals submitted prior to the sale, the final price and coupon rates may be submitted to
Northland Securities, Inc. by telephone at 612-851-5900 or 612-851-5915, or
d) submitted electronically.
Notice is hereby given that electronic proposals will be received via PARITY™, or its successor, in the
manner described below, until 10:00 A.M., CT, on Monday, December 9, 2024. Proposals may be submitted
electronically via PARITY™ or its successor, pursuant to this Notice until 10:00 A.M., CT, but no Proposal
will be received after the time for receiving Proposals specified above. To the extent any instructions or
directions set forth in PARITY™, or its successor, conflict with this Notice, the terms of this Notice shall
control. For further information about PARITY™, or its successor, potential bidders may contact Northland
Securities, Inc. or i-Deal at 1359 Broadway, 2nd floor, New York, NY 10018, telephone 212-849-5021.
Neither the EDA nor Northland Securities, Inc. assumes any liability if there is a malfunction of
PARITY™ or its successor. All bidders are advised that each Proposal shall be deemed to constitute a
contract between the bidder and the EDA to purchase the Bonds regardless of the manner in which the
Proposal is submitted.
BOOK-ENTRY SYSTEM
The Bonds will be issued by means of a book-entry system with no physical distribution of bond
certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate,
representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the
* The EDA reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or decrease will be
made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted
to maintain the same gross spread.
135700721v1
A-2
name of Cede & Co. as nominee of Depository Trust Company (“DTC”), New York, New York, which
will act as securities depository of the Bonds.
Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof
of a single maturity through book entries made on the books and records of DTC and its participants.
Principal and interest are payable by the EDA through U.S. Bank Trust Company, National Association,
St. Paul, Minnesota (the “Paying Agent/Registrar” and “Trustee”), to DTC, or its nominee as registered
owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the
responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will
be the responsibility of such participants and other nominees of beneficial owners. The successful bidder,
as a condition of delivery of the Bonds, will be required to deposit the bond certificates with DTC. The
EDA will pay reasonable and customary charges for the services of the Paying Agent/Registrar.
DATE OF ORIGINAL ISSUE OF BONDS
Date of Delivery (Estimated to be December 30, 2024)
AUTHORITY/PURPOSE/SECURITY
The Bonds are being issued pursuant to Minnesota Statutes, Sections 469.090 through 469.1082 and 465.71,
as amended, a Lease Agreement, between the Otsego Economic Development Authority, Minnesota (the
“EDA”) and the City of Otsego, Minnesota (the “City”), an Indenture of Trust, between the EDA and US.
Bank Trust, National Association, St. Paul, Minnesota, as Trustee, a Ground Lease, between the City and
the EDA and a resolution adopted by the EDA’s Board of Commissioners on December 9, 2024. Proceeds
will be used to finance a fire and emergency services building (the “Project”) and to pay costs associated
with the issuance of the Bonds. The Bonds are special limited obligations of the EDA and do not
constitute an indebtedness of the EDA nor give rise to a charge against the general credit or taxing
powers of the EDA. Neither the full faith and credit nor the taxing powers of the EDA, the City, or
any other governmental entity is pledged for the payment of principal or interest thereon. The Bonds
are payable solely from Rental Payments to be made by the City to the EDA pursuant to a Lease Agreement.
INTEREST PAYMENTS
Interest is due semiannually on each February 1 and August 1, commencing August 1, 2025, to registered
owners of the Bonds appearing of record in the Bond Register as of the close of business on the fifteenth
day (whether or not a business day) of the calendar month next preceding such interest payment date.
MATURITIES
Principal is due annually on February 1, inclusive, in each of the years and amounts as follows:
Year Amount Year Amount Year Amount Year Amount
2027 $645,000 2032 $755,000 2037 $905,000 2042 $1,105,000
2028 665,000 2033 780,000 2038 940,000 2043 1,155,000
2029 690,000 2034 810,000 2039 975,000 2044 1,205,000
2030 710,000 2035 840,000 2040 1,015,000 2045 1,255,000
2031 730,000 2036 870,000 2041 1,060,000 2046 1,310,000
Proposals for the Bonds may contain a maturity schedule providing for any combination of serial bonds
and term bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject
to mandatory redemption in each year conforms to the maturity schedule set forth above.
135700721v1
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INTEREST RATES
All rates must be in integral multiples of 1/20th or 1/8th of 1%. The rate for any maturity may not be more
than 2.00% less than the rate for any preceding maturity. All Bonds of the same maturity must bear a single
uniform rate from date of issue to maturity.
ESTABLISHMENT OF ISSUE PRICE
(HOLD-THE-OFFERING-PRICE RULE MAY APPLY – BIDS NOT CANCELLABLE)
The winning bidder shall assist the EDA in establishing the issue price of the Bonds and shall execute and
deliver to the EDA at closing an “issue price” or similar certificate setting forth the reasonably expected
initial offering price to the public or the sales price or prices of the Bonds, together with the supporting
pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with
such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder,
the EDA and Bond Counsel. All actions to be taken by the EDA under this Notice of Sale to establish the
issue price of the Bonds may be taken on behalf of the EDA by the EDA’s Municipal Advisor and any
notice or report to be provided to the EDA may be provided to the EDA’s Municipal Advisor.
The EDA intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining “competitive
sale” for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds
(the “competitive sale requirements”) because:
(1) the EDA shall disseminate this Notice of Sale to potential underwriters in a manner that is
reasonably designed to reach potential underwriters;
(2) all bidders shall have an equal opportunity to bid;
(3) the EDA may receive bids from at least three underwriters of municipal bonds who have established
industry reputations for underwriting new issuances of municipal bonds; and
(4) the EDA anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to
purchase the Bonds at the highest price (or lowest cost), as set forth in this Notice of Sale.
Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase
of the Bonds, as specified in the bid.
In the event that the competitive sale requirements are not satisfied, the EDA shall promptly so advise the
winning bidder. The EDA may then determine to treat the initial offering price to the public as of the award
date of the Bonds as the issue price of each maturity by imposing on the winning bidder the Hold-the-
Offering-Price Rule as described in the following paragraph (the “Hold-the-Offering-Price Rule”). Bids
will not be subject to cancellation in the event that the EDA determines to apply the Hold-the-Offering-
Price Rule to the Bonds. Bidders should prepare their bids on the assumption that the Bonds will be
subject to the Hold-the-Offering-Price Rule in order to establish the issue price of the Bonds.
By submitting a bid, the winning bidder shall (i) confirm that the underwriters have offered or will offer
the Bonds to the public on or before the date of award at the offering price or prices (the “Initial Offering
Price”), or at the corresponding yield or yields, set forth in the bid submitted by the winning bidder and (ii)
agree, on behalf of the underwriters participating in the purchase of the Bonds, that the underwriters will
neither offer nor sell unsold Bonds of any maturity to which the Hold-the-Offering Price Rule shall apply
to any person at a price that is higher than the Initial Offering Price to the public during the period starting
on the award date for the Bonds and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the award date; or
(2) the date on which the underwriters have sold at least 10% of a maturity of the Bonds to the public
at a price that is no higher than the Initial Offering Price to the public (the “10% Test”), at which
time only that particular maturity will no longer be subject to the Hold-the-Offering-Price Rule.
135700721v1
A-4
The EDA acknowledges that, in making the representations set forth above, the winning bidder will rely on
(i) the agreement of each underwriter to comply with the requirements for establishing issue price of the
Bonds, including, but not limited to, its agreement to comply with the Hold-the-Offering-Price Rule, if
applicable to the Bonds, as set forth in an agreement among underwriters and the related pricing wires, (ii)
in the event a selling group has been created in connection with the initial sale of the Bonds to the public,
the agreement of each dealer who is a member of the selling group to comply with the requirements for
establishing issue price of the Bonds, including but not limited to, its agreement to comply with the Hold-
the-Offering-Price Rule, if applicable to the Bonds, as set forth in a selling group agreement and the related
pricing wires, and (iii) in the event that an underwriter or dealer who is a member of the selling group is a
party to a third-party distribution agreement that was employed in connection with the initial sale of the
Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with
the requirements for establishing issue price of the Bonds, including, but not limited to, its agreem ent to
comply with the Hold-the-Offering-Price Rule, if applicable to the Bonds, as set forth in the third-party
distribution agreement and the related pricing wires. The EDA further acknowledges that each underwriter
shall be solely liable for its failure to comply with its agreement regarding the requirements for establishing
issue price of the Bonds, including but not limited to, its agreement to comply with the Hold-the-Offering-
Price Rule, if applicable to the Bonds, and that no underwriter shall be liable for the failure of any other
underwriter, or of any dealer who is a member of a selling group, or of any broker -dealer that is a party to
a third-party distribution agreement to comply with its corresponding agreement to comply with the
requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply
with the Hold-the-Offering-Price Rule if applicable to the Bonds.
By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group
agreement and each third-party distribution agreement (to which the bidder is a party) relating to the initial
sale of the Bonds to the public, together with the related pricing wires, contains or will contain language
obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that
is a party to such third-party distribution agreement, as applicable, (A) to compl y with the Hold-the-
Offering-Price Rule, if applicable if and for so long as directed by the winning bidder and as set forth in the
related pricing wires, (B) to promptly notify the winning bidder of any sales of Bonds that to its knowledge,
are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds
to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise
advised by the underwriter, dealer or broker-dealer, the winning bidder shall assume that each order
submitted by the underwriter, dealer or broker-dealer is a sale to the public, and (ii) any agreement among
underwriters or selling group agreement relating to the initial sale of the Bonds to the public, together with
the related pricing wires, contains or will contain language obligating each underwriter or dealer that is a
party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds
to the public to require each broker-dealer that is a party to such retail distribution agreement to comply
with the Hold-the-Offering-Price Rule, if applicable, in each case if and for so long as directed by the
winning bidder or the underwriter and as set forth in the related pricing wires.
Notes: Sales of any Bonds to any person that is a related party to an underwriter participating in the initial
sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to
the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale:
(1) “public” means any person other than an underwriter or a related party,
(2) “underwriter” means (A) any person that agrees pursuant to a written contract with the EDA (or
with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the
Bonds to the public and (B) any person that agrees pursuant to a written contract directly or
indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the
public (including a member of a selling group or a party to a third-party distribution agreement
participating in the initial sale of the Bonds to the public).
(3) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the
purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting
power or the total value of their stock, if both entities are corporations (including direct ownership
135700721v1
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by one corporation or another), (B) more than 50% common ownership of their capital interests
or profits interests, if both entities are partnerships (including direct ownership by one partnership
of another), or (C) more than 50% common ownership of the value of the outstanding stock of the
corporation or the capital interests or profit interests of the partnership, as applicable, if one entity
is a corporation and the other entity is a partnership (including direct ownership of the applicable
stock or interests by one entity of the other), and
(4) “sale date” means the date that the Bonds are awarded by the EDA to the winning bidder.
ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER PROPOSALS
The EDA reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or
decrease will be made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted,
the purchase price will also be adjusted to maintain the same gross spread. Such adjustments shall be made
promptly after the sale and prior to the award of Proposals by the EDA and shall be at the sole discretion of
the EDA. The successful bidder may not withdraw or modify its Proposal once submi tted to the EDA for
any reason, including post-sale adjustment. Any adjustment shall be conclusive and shall be binding upon
the successful bidder.
OPTIONAL REDEMPTION
Bonds maturing on February 1, 2034 through 2046 are subject to redemption and prepayment at the option
of the EDA on February 1, 2033 and any date thereafter, at a price of par plus accrued interest. Redemption
may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and
principal amounts within each maturity to be redeemed shall be determined by the EDA and if only part of
the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall
be chosen by lot by the Bond Registrar.
EXTRAORDINARY REDEMPTION
The Bonds shall be subject to extraordinary redemption and prepayment, in whole but not in part, at the
option of the EDA on any date if there occurs an event of damage, destruction or condemnation relating to
the Project and the EDA determines that rebuilding, restoration and replacement of the Project to an
acceptable condition would not be economically feasible, subject to the provision so of the Lease relating
thereto. Such extraordinary optional redemption shall be at a price equal to the principal amount to be
redeemed plus accrued interest to the redemption date without premium.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but
neither the failure to print such numbers on any Bond nor any error with respect thereto shall constitute cause
for a failure or refusal by the successful bidder thereof to accept delivery of and pay for the Bonds in
accordance with terms of the purchase contract. The CUSIP Service Bureau charge for the assignment of
CUSIP identification numbers shall be paid by the successful bidder.
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DELIVERY
Delivery of the Bonds will be within thirty days after award, subject to an approving legal opinion by Taft
Stettinius & Hollister LLP, Bond Counsel. The legal opinion will be paid by the EDA and delivery will be
anywhere in the continental United States without cost to the successful bidder at DTC.
TYPE OF PROPOSAL
Proposals of not less than $18,143,700 (98.25%) and accrued interest on the principal sum of $18,143,000
must be filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to
legality. Proposals for the Bonds should be delivered to Northland Securities, Inc. and addressed to:
Adam Flaherty, EDA Executive Director
13400 90th St. NE
Otsego, Minnesota 55330
A good faith deposit (the “Deposit”) in the amount of $368,400 in the form of a federal wire transfer
(payable to the order of the EDA) is only required from the apparent winning bidder, and must be received
within two hours after the time stated for the receipt of Proposals. The apparent winning bidder will receive
notification of the wire instructions from the Municipal Advisor promptly after the sale. If the Deposit is
not received from the apparent winning bidder in the time allotted, the EDA may choose to reject their
Proposal and then proceed to offer the Bonds to the next lowest bidder based on the terms of their original
proposal, so long as said bidder wires funds for the Deposit amount within two hours of said offer.
The EDA will retain the Deposit of the successful bidder, the amount of which will be deducted at
settlement and no interest will accrue to the successful bidder. In the event the successful bidder fails to
comply with the accepted Proposal, said amount will be retained by the EDA. No Proposal can be
withdrawn after the time set for receiving Proposals unless the meeting of the EDA scheduled for award
of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been
made.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost
(TIC) basis. The EDA’s computation of the interest rate of each Proposal, in accordance with customary
practice, will be controlling. In the event of a tie, the sale of the Bonds will be awarded by lot. The EDA
will reserve the right to: (i) waive non-substantive informalities of any Proposal or of matters relating to
the receipt of Proposals and award of the Bonds, (ii) reject all Proposals without cause, and (iii) reject any
Proposal which the EDA determines to have failed to comply with the terms herein.
INFORMATION FROM SUCCESSFUL BIDDER
The successful bidder will be required to provide, in a timely manner, certain information relating to the
initial offering price of the Bonds necessary to compute the yield on the Bonds pursuant to the provisions
of the Internal Revenue Code of 1986, as amended.
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OFFICIAL STATEMENT
By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the
EDA agrees that, no more than seven business days after the date of such award, it shall provide to the
senior managing underwriter of the syndicate to which the Bonds are awarded, the Final Official Statement
in an electronic format as prescribed by the Municipal Securities Rulemaking Board (MSRB).
FULL CONTINUING DISCLOSURE UNDERTAKING
The City, as the Obligated Party, will covenant in a resolution and in a Continuing Disclosure
Undertaking to provide, or cause to be provided, annual financial information, including audited financial
statements of the City, and notices of certain material events, as required by SEC Rule 15c2-12.
NO BANK QUALIFICATION
The EDA will not designate the Bonds as qualified tax-exempt obligations for purposes of Section
265(b)(3) of the Internal Revenue Code of 1986, as amended.
BOND INSURANCE AT UNDERWRITER’S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the
option of the successful bidder, the purchase of any such insurance policy or the issuance of any such
commitment shall be at the sole option and expense of the successful bidder of the Bonds. Any increase in
the costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the successful
bidder, except that, if the EDA has requested and received a rating on the Bonds from a rating agency, the
EDA will pay that rating fee. Any other rating agency fees shall be the responsibility of the successful
bidder. Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the
successful bidder shall not constitute cause for failure or refusal by the successful bidder to accept delivery
on the Bonds.
The EDA reserves the right to reject any and all Proposals, to waive informalities and to adjourn the sale.
Dated: November 12, 2024 BY ORDER OF THE OTSEGO ECONOMIC DEVELOPMENT
AUTHORITY, MINNESOTA
/s/ Adam Flaherty
EDA Executive Director
Additional information may be obtained from:
Northland Securities, Inc.
150 South 5th Street, Suite 3300
Minneapolis, Minnesota 55402
Telephone No.: 612-851-5900
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EXHIBIT A
[FORM OF ISSUE PRICE CERTIFICATE – COMPETITIVE SALE SATISFIED]
The undersigned, on behalf of ______________________________ (the "Underwriter"),
hereby certifies as set forth below with respect to the sale of the Lease Revenue Bonds, Series 2024A City
Of Otsego, Minnesota Lease With Option to Purchase Project) (the "Bonds") of the Otsego Economic
Development Authority, Minnesota (the "Issuer").
1. Reasonably Expected Initial Offering Price.
(a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the
Public by the Underwriter are the prices listed in Schedule A (the "Expected Offering Prices"). The
Expected Offering Prices are the prices for the Maturities of the Bonds used by the Underwriter in
formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid
provided by the Underwriter to purchase the Bonds.
(b) The Underwriter was not given the opportunity to review other bids prior to submitting
its bid.
(c) The bid submitted by the Underwriter constituted a firm offer to purchase the Bonds.
2. Defined Terms.
(a) "Maturity" means Bonds with the same credit and payment terms. Bonds with different
maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as
separate Maturities.
(b) "Public" means any person (including an individual, trust, estate, partnership, association,
company, or corporation) other than an Underwriter or a related party to an Underwriter. The term
"related party" for purposes of this certificate generally means any two or more persons who have greater
than 50 percent common ownership, directly or indirectly.
(c) "Sale Date" means the first day on which there is a binding contract in writing for the sale
of a Maturity of the Bonds. The Sale Date of the Bonds is December 9, 2024
(d) "Underwriter" means (i) any person that agrees pursuant to a written contract with the
Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of
the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly
with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the
Public (including a member of a selling group or a party to a retail distribution agreement participating in
the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this
certificate represents the Underwriter's interpretation of any laws, including specifically Sections 103 and
148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The
undersigned understands that the foregoing information will be relied upon by the Issuer with respect to
certain of the representations set forth in the Nonarbitrage Certificate and with respect to compliance with
the federal income tax rules affecting the Bonds, and by Taft Stettinius & Hollister LLP, Bond Counsel in
connection with rendering its opinion that the interest on the Bonds is excluded from gross income for
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federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other
federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
Dated: December 30, 2024.
[FORM OF ISSUE PRICE CERTIFICATE – HOLD-THE-OFFERING-PRICE RULE APPLIES]
The undersigned, on behalf of ________________________________(the
"Underwriter"), on behalf of itself, hereby certifies as set forth below with respect to the sale and issuance
of the Lease Revenue Bonds, Series 2024A City Of Otsego, Minnesota Lease With Option to Purchase
Project) (the "Bonds") of the Otsego Economic Development Authority, Minnesota (the "Issuer").
Initial Offering Price of the Bonds.
The Underwriter offered each Maturity of the Bonds to the Public for purchase at the respective
initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy
of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
As set forth in the Notice of Sale and bid award, the Underwriter has agreed in writing that, (i) for
each Maturity of the Bonds, it would neither offer nor sell any of the Bonds of such Maturity to any person
at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such
Maturity (the "hold-the-offering-price rule"), and (ii) any selling group agreement shall contain the
agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall
contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply
with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has
offered or sold any Maturity of the Bonds at a price that is higher than the respective Initial Offering Price
for that Maturity of the Bonds during the Holding Period.
Defined Terms.
"Holding Period" means, for each Maturity of the Bonds, the period starting on the Sale Date and
ending on the earlier of (i) the close of the fifth business day after the Sale Date (________________), or
(ii) the date on which the Underwriter has sold at least 10% of such Maturity of the Bonds to the Public at
prices that are no higher than the Initial Offering Price for such Maturity.
"Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity
dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate
Maturities.
"Public" means any person (including an individual, trust, estate, partnership, association,
company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related
party" for purposes of this certificate generally means any two or more persons who have greater than 50
percent common ownership, directly or indirectly.
"Sale Date" means the first day on which there is a binding contract in writing for the sale of a
Maturity of the Bonds. The Sale Date of the Bonds is December 9, 2024.
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"Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or
with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds
to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a
person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public
(including a member of a selling group or a party to a retail distribution agreement participating in the initial
sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this
certificate represents the Representative's interpretation of any laws, including specifically Sections 103
and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The
undersigned understands that the foregoing information will be relied upon by the Issuer with respect to
certain of the representations set forth in the Nonarbitrage Certificate and with respect to compliance with
the federal income tax rules affecting the Bonds, and by Taft Stettinius & Hollister LLP, Bond Counsel, in
connection with rendering its opinion that the interest on the Bonds is excluded from gross income for
federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other
federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
Dated: December 30, 2024.