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99-40RESOLUTION NO. EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA HELD: October 25, 1999 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Otsego, Wright County, Minnesota, was duly called and held at the City Hall in said City on Monday, the 25th day of October, 1999, at 6:30 P.M., for the purpose, in part, of authorizing the issuance of, and awarding the sale of, a $112,480 General Obligation Equipment Certificate, Series 1999 of the City. The following members were present: Mayor Fournier, and Council Members Ackerman, Berning, Heidner and Wendel; and the following were absent: None. Member Berning introduced the following resolution and moved its adoption: RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF A $112,480 GENERAL OBLIGATION EQUIPMENT CERTIFICATE, SERIES 1999, AND LEVYING A TAX FOR THE PAYMENT THEREOF A. WHEREAS, the City Council of the City of Otsego, Minnesota (the "City"), has heretofore determined and declared that it is necessary and expedient to issue a $112,480 General Obligation Equipment Certificate, Series 1999 (the "Certificate") of the City, pursuant to Minnesota Statutes, Chapter 475 and Minnesota Statutes, Section 412.301, to finance the acquisition of certain capital equipment (the "Equipment"), specifically a street maintenance plow truck; and B. WHEREAS, each item of Equipment to be financed by the Certificate has an expected useful life at least as long as the term of the Certificate; and C. WHEREAS, the amount of the Certificate to be issued does not exceeds one-quarter of one percent (0.25%) of the market value of the City; and D. WHEREAS, the Certificate is being sold pursuant to a private sale as permitted by Minnesota Statutes, Sections 412.301 and 475.60, Subdivision 2(1); and 1084675.2 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Otsego, Minnesota, as follows: 1. Acceptance of Offer. The offer. of Bank of Elk River (the "Purchaser"), to purchase the Certificate of the City, in accordance with the terms and at the rate of interest hereinafter set forth, and to pay therefor the sum of par is hereby accepted. 2. Title• Original Issue Date• Denomination;_ Maturities. The Certificate shall be titled "General Obligation Equipment Certificate, Series 199911, shall be dated the date of delivery, as the date of original issue and shall be issued forthwith on or after such date as a fully registered certificate. The Certificate shall be numbered R-1 in the denomination of the entire principal amount. The Certificate shall mature on the first day of July on the years and in the installments as follows: Year 2000 2001 2002 In the payments based on year, except that $25,939.56. Amount Year $23,030.68 2003 20,384.68 2004 21,650.58 absence of a prepayment or the above schedule will be the final payment on July Amount $22,995.09 24,418.97 reamortization, $25,939.54 each 1, 2004, will be 3. Purpose. The Certificate shall provide funds for the acquisition of the Equipment. The total cost of the Equipment, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Certificate. 4. Interest• Place of Payment. The Certificate shall bear interest payable annually with principal as provided above (calculated on the basis of a 360 -day year of twelve 30 -day months), at the rate of six and one-eighth percent (6.125%) per annum. The Certificate shall be payable as to principal and interest at the office of the City Treasurer. 5. Redemption. The Certificate shall be subject to redemption and prepayment at the option of the City on any date at a price of par plus accrued interest. Redemption may be in whole or in part. If redemption is in part, the specific portions of the Certificate to be prepaid shall be chosen by lot by the Certificate Registrar. Portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to 1084675.2 2 the paying agent (if other than the City) and to the affected registered Holder of the Certificate. 6. Certificate Registrar. The Treasurer of the City is appointed to act as certificate registrar and transfer agent with respect to the Certificate (the "Certificate Registrar"), and shall do so unless and until a successor Certificate Registrar is duly appointed. Any successor Certificate Registrar shall be an officer of the City or a certificate registrar and transfer agent pursuant to Minnesota Statutes, Chapter 475, and may be appointed pursuant to any contract the City and such successor Certificate Registrar shall execute which is consistent herewith. The Certificate Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Certificate shall be paid to the registered holder (or record holder) of the Certificate in the manner set forth in the form of Certificate and in paragraph 12 of this resolution. 7. Form of Certificate. The Certificate, together with the Certificate of Registration, the Register of Partial Payments, the form of Assignment and the registration information thereon, shall be in substantially the following form, and may be typewritten rather than printed: 1084675.2 3 UNITED STATES OF AMERICA STATE OF MINNESOTA WRIGHT COUNTY CITY OF OTSEGO $112,480 GENERAL OBLIGATION EQUIPMENT CERTIFICATE, SERIES 1999 KNOW ALL PERSONS BY THESE PRESENTS that the City of Otsego, Wright County, Minnesota (the "Issuer"), certifies that it is indebted and for value received promises to pay to BANK OF ELK RIVER, or registered assign, in the manner hereinafter set forth, the principal amount specified above, on the first day of July of the years and in the installments as follows: Year Amount Year Amount 2000 $23,030.68 2003 $22,995.09 2001 20,384.68 2004 24,418.97 2002 21,650.58 unless called for earlier redemption, and to pay interest on the balance of said principal sum from time to time remaining unpaid, from the date hereof until the principal amount hereof is paid, at the rate per annum of six and one-eighth percent (6.125%), payable annually with principal as provided above (calculated on the basis of a 360 -day year of twelve 30 -day months) utitil the principal sum is paid or has been provided for. Both principal of and premium, if any, and interest on this Certificate are payable in lawful money of the United States of America at the principal office of the Treasurer of the Issuer (the "Certificate Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Redemption. The Certificate (the "Certificate") is subject to redemption and prepayment at the option of the Issuer on any date at a price of par plus accrued interest. Redemption may be in whole or in part. If redemption is in part, the specific portions of the Certificate to be prepaid shall be chosen by lot by the Certificate Registrar. Portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue.from and after the redemption date. Mailed notice of redemption shall be given to the paying agent (if other than.the Issuer) and to the affected Holder of the Certificate. Purpose; General Obligation. This Certificate has been issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota pursuant to a resolution 1084675.2 4 adopted by the City Council of the Issuer on October 15, 1999 (the "Resolution"), for the purpose of providing money to finance the acquisition by the Issuer of certain capital equipment. This Certificate is payable out of the General Obligation Equipment Certificate, Series 1999 Fund of the Issuer. This Certificate constitutes a general obligation of.the Issuer, and to provide Moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denomination; Resolution. The Certificate is issuable solely as a fully registered certificate in the denomination of the entire principal amount. Reference is hereby made to the Resolution for a description of the rights and duties of the Certificate Registrar. Copies of the Resolution are on file in the principal office of the Certificate Registrar. Transfer. This Certificate is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at the principal office of the Certificate Registrar upon presentation and surrender hereof to the Certificate Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Certificate Registrar (if other than the Issuer). Thereupon the Issuer shall execute and the Certificate Registrar shall deliver, in exchange for this Certificate, one new fully registered Certificate in the name of the transferee (but not registered in blank or to "bearer" or similar designation), in.aggregate principal amount equal to the principal amount of this Certificate, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer of this Certificate and any legal or unusual costs regarding transfers and a lost Certificate. Treatment of Registered Owner. The Issuer and Certificate Registrar may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Certificate shall be overdue, and neither the Issuer nor the Certificate Registrar shall be affected by notice to the contrary. Qualified Tax -Exempt obligation. The Certificate has been designated by the Issuer as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. 1084675.2 5 IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Certificate, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Certificate, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. 1084675.2 6 IN WITNESS WHEREOF, the City of Otsego, Wright County, Minnesota, by its City Council has caused this Certificate to be executed on its behalf by the manual signatures of its Mayor and its Clerk, the corporate seal of the Issuer having been intentionally omitted as permitted by law. Date of Registration: Registrable by: THE TREASURER OF THE CITY OF OTSEGO, MINNESOTA 1999 Payable at: OFFICE OF THE TREASURER OF THE CITY OF OTSEGO, MINNESOTA CITY OF OTSEGO, WRIGHT COUNTY, MINNESOTA ayor erk 1084675.2 7 CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount of the within Certificate may be made only by the registered owner or his, her or its legal representative last noted below. SIGNATURE OF DATE OF CERTIFICATE REGISTRATION REGISTERED OWNER REGISTRAR Bank of Elk River 630 Main Street 1999 Elk River, MN 55330 1084675.2 8 REGISTER OF PARTIAL PAYMENTS The principal amount of the attached Certificate has been prepaid on the dates and in the amounts noted below: SIGNATURE OF SIGNATURE OF CERTIFICATE DATE AMOUNT CERTIFICATE HOLDER REGISTRAR If a notation is made on this register, such notation has the effect stated in the attached Certificate. Partial payments do not require the presentation of the attached Certificate to the Certificate Registrar, and a Holder could fail to note hereon the partial payment. 1084675.2 9 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Gust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 1084675.2 10 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Certificate and does hereby irrevocably constitute and appoint attorney to transfer the Certificate on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad 15(a)(2). The Certificate Registrar will not effect transfer of this Certificate unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Certificate is held by joint account). 1084675.2 11 8. Execution. The Certificate shall be executed on behalf of the City by the signatures of its Mayor and Clerk and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed facsimile; and provided further that the corporate seal may be omitted as permitted by law. In the event of disability or resignation or other absence of either such officer, the Certificate may be signed by the manual signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature shall appear on the Certificate shall cease to be such officer before the delivery of the Certificate, such signature shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. 9. Date of Registration. The Certificate Registrar shall insert as the date of registration in the space provided the date of original issue, which date is the date of delivery. 10. Registration• Transfer. The City will cause to be kept at the principal office of the Certificate Registrar a certificate register in which, subject to such reasonable regulations as the Certificate Registrar may prescribe (if other than the City), the Certificate Registrar shall provide for the registration of the Certificate and the registration of transfers of the Certificate entitled to be registered or transferred as herein provided. Upon surrender for transfer of the Certificate at the principal office of the Certificate Registrar, the City shall execute (if necessary), and the Certificate Registrar shall insert the date of registration (as provided in paragraph 9) and deliver, in the name of the designated transferee, a new certificate of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that the certificate may not be registered in blank or in the name of "bearer" or similar designation. The Certificate surrendered upon any transfer provided for in this resolution shall be promptly cancelled by the Certificate Registrar and thereafter disposed of as directed by the City. The Certificate delivered upon transfer of the Certificate shall be a valid special obligation of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Certificate surrendered for such transfer. The Certificate presented or surrendered for transfer shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Certificate Regi.strar, 1084675.2 12 duly executed by the Holder thereof or his attorney duly authorized in writing. The Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer of the Certificate. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Certificate Registrar (if other than the City), including regulations which permit the Certificate Registrar to close its transfer books between record dates and payment dates. 11. Rights Upon Transfer. The Certificate delivered upon transfer of or in lieu of another Certificate shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Certificate. 12. Treatment of Registered Owner. The City and Certificate Registrar may treat the person in whose name the Certificate is registered as the owner of the Certificate for the purpose of receiving payment of principal of and premium, if any, and interest on, the Certificate and for all other purposes whatsoever whether or not the Certificate shall be overdue, and neither the City nor the Certificate Registrar shall be affected by notice to the contrary. 13. Delivery• Application of Proceeds. The Certificate when so prepared and executed shall be delivered by the Treasurer to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 14. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Equipment Certificate, Series 1999 Fund" (the "Fund") to be administered and maintained by the Treasurer as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until the Certificate and the interest thereon have been fully paid. There shall be maintained in the Fund two (2) separate accounts, to be designated the "Capital Account" and "Debt Service Account", respectively. (a) Capital Account. To the Capital Account there shall be credited the proceeds of the sale of the Certificate. From the Capital Account there shall be paid all costs and expenses of acquiring the Equipment, including the cost of any acquisition contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65; and the moneys in said account shall be used for no other purpose except as otherwise provided by law; provided 1084675.2 13 that the proceeds of the Certificate may also be used to the extent necessary to pay interest on the Certificate due prior to the anticipated date of commencement of the collection of taxes herein levied. (b) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (i) any collections of all taxes herein or hereafter levied for payment of the Certificate and interest thereon; (ii) available monies of the City in an amount together with sums on deposit in the Debt Service Account to pay one-half of the principal and interest to become due on the Certificate on July 1, 2000; (iii) all funds remaining in the Capital Account after acquisition of the Equipment and payment of the costs thereof; (iv) all investment earnings on funds held in the Debt Service Account; and (v) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest and any premiums for redemption of the Certificate and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. No portion of the proceeds of the Certificate shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Certificate was issued and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the proceeds of the Certificate or $100,000. To this effect, any proceeds of the Certificate and any sums from time to time held in the Capital Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the certificates payable therefrom) in excess of amounts which under then -applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Certificate to be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). 15. Tax Levy• Coverage Test. To provide moneys for payment. of the principal and interest on the Certificate there 1084675.2 14 is hereby levied upon all direct annual ad valorem rolls and collected with taxes in the City for the Year of Tax Levy 1999 2000 2001 2002 2003 of the taxable property in the City a tax which shall be spread upon the tax and as part of other general property years and in the amounts as follows: Year of Tax Collection 2000 2001 2002 2003 2004 Amount $27,236.52* 27,236.52 27,236.52 27,236.52 27,236.54 The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Certificate, will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Certificate. The tax levies shall be irrepealable so long as any of the Certificate is outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 16. Defeasance. When the Certificate has been discharged as.provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Certificate shall, to the extent permitted by law, cease. The City may discharge its obligation with respect to the Certificate which is due on any date by irrevocably depositing with the Certificate Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Certificate should not be paid when due, it may nevertheless be discharged by depositing with the Certificate Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also discharge its obligation with respect to any prepayable installments of the Certificate called for redemption on any date when they are prepayable according to its terms, by depositing with the Certificate Registrar on or before that date a sum sufficient for the payment thereof in full, provided that notice of redemption thereof has been duly given. The City may also at any time discharge its obligations with respect to the Certificate, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in,Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and * heretofore levied or provided from other available City funds 1084675.2 15 at such rates and maturing on such dates as shall be required, subject to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if notice of redemption as herein required has been duly provided for, to such earlier redemption date. 17. Compliance With Reimbursement Bond Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1.150-2 (the "Reimbursement Regulations") applicable to the "reimbursement proceeds" of the Certificate, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure"). The City hereby certifies and/or covenants as follows: (a). Not later than 60 days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration") which effectively (i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the general functional purpose thereof from which the Reimbursement Expenditure was to be paid (collectively the "Project"); and (iii) states the maximum principal amount of debt expected to be issued by the City for the purpose of financing the Project; provided, however, that no such Declaration shall necessarily have been made.with respect to: (i) "preliminary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed 20t of the "issue price" of the Certificate, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of $100,000 or 50 of the proceeds of the Certificate. Notwithstanding the foregoing, with respect to any Declaration made by the City between January 27, 1992 and June 30, 1993, with respect to a Reimbursement Expenditure made prior to March 2, 1992, the City hereby represents that there exists objective evidence, that at the time the Expenditure was paid the City expected to reimburse the cost thereof with the proceeds of a borrowing (taxable or tax-exempt) and that expectation was reasonable. 1084675.2 16 (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Certificate or any of the other types of expenditures described in Section 1.150- 2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Certificate and in all events within the period ending on the date which is the later of three years after payment of the Reimbursement Expenditure or one year after the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Certificate proceeds to reimburse the Reimbursement Expenditure and, if made within 30 days after the Certificate is issued, shall be treated as made on the day the Certificate is issued. Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph 17 upon receipt of an opinion of its Bond Counsel for the Certificate stating in effect that such action will not impair the tax-exempt status of the Certificate. 18. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Certificate, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Certificate and any other certificates payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other fund's may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 19. Certificate of Registration. The Clerk is hereby directed to file a certified copy of this resolution with the County Auditor of Wright County, Minnesota, together with such other information as he or she shall require, and to obtain the County Auditor's certificate that the Certificate has been entered in the County Auditor's Certificate Register, and that the tax levy required by law has been made. 20. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Certificate, certified copies of all proceedings and records of the City relating to the Certificate and to the financial condition and affairs of the City, and such other 1084675.2 17 affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Certificate as the same appear from the books and records under their custody and control or as otherwise known to them, and ail such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 21. Negative Covenant as to the Use of Proceeds and Eq-uipment. The City hereby covenants not to use the proceeds of the Certificate or to use the Equipment, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Equipment, in such a manner as to cause the Certificate to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code. 22. Tax -Exempt Status of the Certificate; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Certificate, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Certificate, and (3) the rebate of excess investment earnings to the United States if the *Certificate (together with other obligations reasonably expected to be issued and outstanding at one time in this calendar year) exceed the small -issuer exception amount of $5,000,000. For purposes of qualifying for the exception to the federal arbitrage rebate requirements for governmental units issuing $5,000,000 or less of bonds, the City hereby finds, determines and declares that (1) the Certificate is issued by a governmental unit with general taxing powers, (2) the Certificate is not a private activity bond, (3) ninety-five percent (95%) or more of the net proceeds of the Certificate is to be used for local governmental activities of the City (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City), and (4) the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities thereof, and all entities treated as one issuer with the City) during the calendar year in which the Certificate is issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. 23. Designation of Qualified Tax -Exempt Obligation. In order to qualify the Certificate as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: 1084675.2 18 (a) the Certificate is issued after August 7, 1986; (b) the Certificate is not a "private activity bond" as defined in Section 141 of the Code; (c) the City hereby designates the Certificate as a "qualified tax-exempt obligation" for purposes of Section 265 (b) (3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 1999 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued by the City during this calendar year 1999 have been designated for purposes of Section 265 (b) (3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 24.'Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 25. Headincrs. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. The motion for the adoption of the foregoing resolution was duly seconded by member Ackerman after a full discussion thereof and upon vote being taken thereon, the following voted in favor thereof:. All members present; and the following voted against the same: None. Whereupon said resolution was declared duly passed and adopted. 1084675.2 19 STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF OTSEGO I, the undersigned, being the duly qualified and acting Clerk of the City of Otsego, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council of said City, duly called and held on the date therein indicated, insofar as such minutes relate to authorizing the issuance of, and awarding the sale of a $112,480 General Obligation Equipment Certificate, Series 1999 of said City. WITNESS my hand this 25th day of October, 1999. 1,4 Jerk 1084675.2 20