HomeMy WebLinkAboutMay 5, 2003 Special MeetingCITY OF COLUMBIA HEIGHTS
590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692
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May 2, 2003
Mayor
Julienne Wyckoff
Councilmembers
Robert ,4. Williams
Bruce Nawrocld
Tammera Ericson
Bruce Kelzenberg
City Manaeer
Walter R. Fehst
The following is the agenda for the special meeting of the City Council to be held at 7:00 p.m. on Monday,
May 5, 2003 in Conference Room 1, City Hall, 590 40th Avenue N.E., Columbia Heights, MN.
employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individuals with
disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for disabled persons are
available upon request when the request is made at least 96 hours in advance. Please call the Deputy City Clerk at 763-706-3611,
to make arrangements. (TDD/706-3692 for deaf or hearing impaired only)
CALL TO ORDER/ROLL CALL
ITEMS FOR CONSIDERATION
A) Bid Considerations
Adopt Resolution No. 2003-21, being a resolution authorizing the sale of general obligation
improvements bonds series 2003A.
MOTION: Move to waive the reading of Resolution No. 2003-21, there being ample copies available to
the public.
MOTION: Move to adopt Resolution #2003-21, being a resolution authorizing the sale of
$ general obligation improvements bonds series 2003A.
3. ADJOURNMENT
Walter R. Feh~t, Cit~'Manager
WF/pvm
THE CITY Of COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY In EMPLOYMENT OR THE PROVISION Of SERVICES
EQUAL OPPORTUNITY EMPLOYER
CITY COUNCIL LETTER
Meeting of: May 5, 2003
AGENDA SECTION: ORDINANCES & ORIGINATING DEPT.: CITY MANAGER
RESOLUTIONS FINANCE APPROVAL
ITEM: A RESOLUTION AWARDING THE BY: WILLIAM ELRITE BY:
SALE OF $ GENERAL DATE: April 30, 2003 DATE:
OBLIGATION IMPROVEMENT BONDS
SERIES 2003A
NO:
Previously the City Council adopted Ordinance 1455 authorizing the sale of bonds. The second
reading of this ordinance was held on March 24, 2003. The sale of these bonds is scheduled for
May 5, 2003. The attached resolution authorizes and awards this sale. At the meeting of May 5,
2003, city bond counsel will have the numbers related to the sale to fill in on the resolution. The
attachment is a drai~ of the resolution that will be presented for adoption at that meeting.
RECOMMENDED MOTION: Move to waive the reading of the resolution, there being ample copies
available to the public.
RECOMMENDED MOTION: Move to adopt Resolution #2003-21, being a resolution authorizing
the sale of $__ general obligation improvement bonds series 2003A.
WE:sms
0304302COUNCIL
Attachment
COUNCIL ACTION:
RESOLUTION NO. 2003-21
A RESOLUTION AWARDING THE SALE OF $ GENERAL
OBLIGATION IMPROVEMENT AND SEWER AND
WATER REVENUE BONDS, SERIES 2003A;
FIXING THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council of the City of Columbia Heights, Anoka County, Minnesota (City) as
follows:
Section 1. Background.
1.01. By Ordinance No. 1455 (Ordinance), the City Council authorized issuance of general obligation
bonds in the maximum principal amount of $3,900,000 in order to finance Zone 6A, Zone 6B and Zone 7 Street
Improvements; and Central Avenue Improvements (consisting of improvements designated as 1999-12 and 1999-
12A).
1.02. The Zone 6A and Zone 6B Street Improvements and the 1999-12A portion of the Central Avenue
Improvements are referred to collectively as the "Assessable Improvements;" and the Zone 7 Street Improvements
and the 1999-12 portion of the Central Avenue Improvements are referred to as the "Utility System Improvements."
1.03. The City has determined that, within 30 days after publication of the Ordinance, no petition for a
referendum on issuance of bonds was received by the City in accordance with the City charter, and accordingly the
City has determined to issue its $ General Obligation Improvement and Sewer and Water Revenue
Bonds, Series 2003A (Bonds) in order to finance the Assessable Improvements and the Utility System
Improvements.
1.04. The proposal of (Purchaser) to purchase the Bonds
described in the Terms of Proposal thereof is found and determined to be a reasonable offer and is accepted, the proposal
being to purchase the Bonds at a price of $ plus accrued interest to date of delivery, for Bonds bearing
interest as follows:
Year of Interest Year of
Maturity Rate Maturi _ty
Interest
Rate
2004 2012
2005 2013
2006 2014
2007 2015
2008 2016
2009 2017
2010 2018
2011
True interest cost:
1.05. The sum of $ being the amountproposed by the Purchaser in excess of $2,567,500 will be
credited to the Debt Service Fund hereinafter created. The City Clerk-Treasurer is directed to retain the good faith check
of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful
proposers forthwith. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the
City.
1.06. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Section 444.075 and
Chapters 429 and 475 (Act), in the total principal amount of $ , originally dated June 1, 2003, in the
denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set
forth, and maturing serially on February 1 in the years and amounts as follows:
Year Amount Year Amount
2004 $135,000 2012 $190,000
2005 145,000 2013 190,000
2006 180,000 2014 165,000
2007 180,000 2015 165,000
2008 185,000 2016 165,000
2009 185,000 2017 170,000
2010 185,000 2018 175,000
2011 185,000
$1,030,000 of the Bonds (the Improvement Bonds) maturing in the amounts and on the dates set forth below are being
issued to finance the Assessable Improvements:
Year Amount Year Amount
2004 $45,000 2012 $75,000
2005 30,000 2013 75,000
2006 65,000 2014 80,000
2007 65,000 2015 80,000
2008 70,000 2016 75,000
2009 70,000 2017 80,000
2010 70,000 2018 80,000
2011 70,000
The remaining $1,570,000 of the Bonds (the Sewer and Water Revenue Bonds) maturing in the amounts and on the dates
set forth below are being issued to finance the Utility System Improvements:
Year Amount Year Amount
2004 $ 90,000 2012 $115,000
2005 115,000 2013 115,000
2006 115,000 2014 85,000
2007 115,000 2015 85,000
2008 115,000 2016 90,000
2009 115,000 2017 90,000
2010 115,000 2018 95,000
2011 115,000
1.07. Optional Redemption. The City may elect on February 1, 2010, and on any day thereafter to prepay Bonds
due on or after February 1,2011. Redemption may be in whole or in part and if in part, at the option of the City and in
such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify
DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot
the amount of each participant's interest in such maturity to be red~med and each participant will then select by lot the
beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued
interest.
Section 2. Registration and Payment.
2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon
surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described
herein.
2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the
date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of
authentication is an interest payment date to which interest has been paid or made available for payment, in which case
the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment
date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds will be payable on
February 1 and August 1 of each year, commencing February 1,2004, to the registered owners of record thereof as of the
close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day.
2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent
(Registrar). The effect of registration and the fights and duties of the City and the Registrar with respect thereto are as
follows:
(a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the
Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds
entitled to be registered, transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof
or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered
owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and
deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal
amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any
transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date.
(c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will
authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the
registered owner or the owner's attorney in writing.
(d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar
and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar
may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of
transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for
the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is
registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of
receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments
so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability
upon the Bond to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or
exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid
with respect to the transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. Ifa Bond becomes mutilated or is destroyed, stolen or lost,
the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for
and upon cancellation of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost, upon the
payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond
destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or
lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form,
substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named
as obligees. Bonds~so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation
must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for
redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment.
(i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds
to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage
prepaid) for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration
books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by
mail to registered owners, or any defect therein, will not affect the validity of the proceedings for the redemption of
Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the
funds for the redemption are on deposit with the place of payment at that time.
2.04. Appointment of Initial Registrar. The City appoints U.S. Bank NationalAssociation, St. Paul, Minnesota,
as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a
contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting
corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized
to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the
services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of
a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the
successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest
due date, without further order of this Council, the Clerk-Treasurer must transmit to the Registrar moneys sufficient for
the payment of all principal and interest then due.
2.05. Execution, Authentication and Delivery_. The Bonds will be prepared under the direction of the City
Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that all
signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a
facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that
signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in
office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to
any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly
executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on
different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is
conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so
prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the
purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to
see to the application of the purchase price.
2.06. Temporary_ Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more
typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to
reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the
temporary Bonds will be exchanged therefor and cancelled.
Section 3. Form of Bond.
3.01. The Bonds will be printed or typewritten in substantially the following form:
No. R- UNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF ANOKA
CITY OF COLUMBIA HEIGHTS
GENERAL OBLIGATION IMPROVEMENT AND SEWER
AND WATER REVENUE BOND, SERIES 2003A
Date of
Rate Maturity Original Issue CUSIP
June 1, 2003
Registered Owner: Cede & Co.
The City of Columbia Heights, Minnesota, a duly organized and existing municipal corporation in Anoka County,
Minnesota (City), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered
Owner specified above or registered assigns, the principal stun of $ on the maturity date specified above,
with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each
year, commencing February 1, 2004, to the person in whose name this Bond is registered at the close of business on the
fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon
presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by
check or draft by U.S. Bank National Association, St. Paul, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent
and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full
payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of
the City have been and are hereby irrevocably pledged.
The City may elect on February 1, 2010, and on any day thereafter to prepay Bonds due on or after February 1,
2011. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will
determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust
Company (DTC) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each
participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership
interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest.
The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt
obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the Code)
relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code
for the calendar year of issue.
This Bond is one of an issue in the aggregate principal amount of $ all of like original issue date
and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued pursuant to a resolution
adopted by the City Council on May 5, 2003 (the Resolution), for the purpose of providing money to aid in financing
various improvements to the water and sewage disposal system of the City and certain other local improvements, pursuant
to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Section 444.075 and Chapters 429 and 475 and the principal hereof and interest hereon are
payable in part primarily from special assessments levied or to be levied on property specially benefited by local
improvements, in part from ad valorem taxes for the City's share of the cost of the improvements, and in part from net
revenues of the water and sewer system, as set forth in the Resolution to which reference is made for a full statement of
rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this
Bond and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the
event of any deficiency in net revenues and special assessments pledged, which taxes may be levied without limitation as
to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any
integral multiple thereof of single maturities.
As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the
books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's
attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the
Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange
for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds
to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at
the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required
to be paid with respect to such transfer or exchange.
The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the
absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other
purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things
required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to exist,
to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding
general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been
performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any
constitutional, statutory or charter limitation of indebtedness.
This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until
the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its
authorized representatives.
IN WITNESS WHEREOF, the City of Columbia Heights, Anoka County, Minnesota, by its City Council, has
caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and
has caused this Bond to be dated as of the date set forth below.
Dated:
CITY OF COLUMBIA HEIGHTS,
MINNESOTA
(Facsimile) (Facsimile)
City Manager Mayor
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
U.S. BANK NATIONAL ASSOCIATION
By
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though
they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants UNIF GIFT MIN ACT
in common
TEN ENT -- as tenants
Custodian
(Gust) (minor)
under Uniform Girls or
by entireties Transfers to Minors
JT TEN --
as joint tenants with
right of survivorship and
not as tenants in common
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and does hereby
irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for
registration of the within Bond, with full power of substitution in the premises.
Dated:
Notice:
The assignors signature to this assignment must correspond with the name as it appears upon the
face of the within Bond in every particular, without alteration or any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion
Program ("STEMP"), the Stock Exchange Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion
Signatures Program ("MSP"") or other such "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as
amended.
The Bond RegisWar will not effect transfer of this Bond unless the information concerning the assignee requested
below is provided.
Name and Address:
(Include information for all joint owners if this Bond is held by joint account.)
Please insert social security or other identifying number of
assignee
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Bond has been registered on the books of the
Registrar in the name of the person last noted below.
Date of Registration
Registered Owner
Signature of
Officer of the Registrar
Cede & Co.
Federal ID//13-2555119
3.02. The City Manager will obtain a copy of the proposed approving legal opinion of Kennedy & Graven,
Chartered, Minneapolis, Minnesota, which will be complete except as to dating thereof and will cause the opinion to be
printed on or accompany each Bond.
Section 4. Payment; Security; Pledges and Covenants.
4.01. (a) The Bonds are payable from the General Obligation Improvement and Sewer and Water Revenue
Bonds, Series 2003A Debt Service Fund (Debt Service Fund) hereby created. The City shall maintain an "Improvements
Account" (Improvements Account) and a "Sewer and Water Utilities Account" ( Utilities Account) in the Debt Service
Fund.
(b) The City Manager shall timely deposit in the Improvements Account the special assessments (Assessments)
and taxes (Taxes) levied or to be levied for the Assessable Improvements, which Assessments and Taxes are pledged to
that account of the Debt Service Fund. There is also appropriated to the Improvements Account of the Debt Service
Fund % of (i) any amount over the minimum purchase price paid by the Purchaser and (ii) the accrued interest
paid by the Purchaser upon closing and delivery of the Bonds. If any payment of principal or interest on the
Improvement Bonds portion of the Bonds shall become due when there is not sufficient money in the Improvements
Account of the Debt Service Fund to pay the same, the City Clerk-Treasurer is directed to pay such principal or interest
from the general fund of the City, and the general fund will be reimbursed for such advances out of the proceeds of
Assessments and Taxes when received.
(c) The City will create and continue to operate its Water and Sewer Fund to which will be credited all gross
revenues of the water and sewer plant and system and out of which will be paid all normal and reasonable expenses of
current operations of the water and sewer plant and system. Any balance therein are deemed net revenues and will be
transferred, from time to time, to the Utilities Account of Debt Service Fund, hereby created in the Water and Sewer
Fund, which account will be used only to pay principal of and interest on Sewer and Water Revenue Bonds portion of
the Bonds and any other bonds similarly authorized. There will always be retained in the Utilities Account of the Debt
Service Fund a sufficient amount to pay principal of and interest on all the Sewer and Water Revenue Bonds portion of
the Bonds and the City Manager must report any current or anticipated deficiency in the Utilities Account to the City
Council. There is appropriated to the Utilities Account of the Debt Service Fund __% of(i) any amount over the
minimum purchase price paid by the Purchaser and (ii) the accrued interest paid by the Purchaser upon closing and
delivery of the Bonds.
(d) The proceeds of the Bonds, less the appropriations made in paragraphs (b) and (c), together with any other
funds appropriated during the construction of the Assessable Improvements and the Utility Improvements (collectively,
the Improvements) will be deposited in an Assessable Improvements subaccount and a Utility Improvements
subaccount, respectively, in a separate construction fund to be used solely to defray expenses of the Improvements and
the payment of principal and interest on the Bonds prior to the completion and payment of all costs of the Projects.
When the Improvements are completed and the cost thereof paid, the construction account is to be closed and any
balance in the respective subaccounts therein to be deposited in the Improvements Account and the Utilities Account,
respectively, of the Debt Service Fund, as the case may be.
4.02. It is hereby determined that the Assessable Improvements will directly and indirectly benefit abutting
property, and the City hereby covenants with the holders from time to time of the Bonds as follows:
(a) The City has caused or will cause the Assessments for the Assessable Improvements to be promptly levied
so that the first installment will be collectible not later than 2003 and will take all steps necessary to assure prompt
collection, and the levy of the Assessments is hereby authorized. The City Council will cause to be taken with due
diligence all further actions that are required for the construction of each Improvement financed wholly or partly from the
proceeds of the Improvement Bonds portion of the Bonds, and will take all further actions necessary for the final and valid
levy of the Assessments and the appropriation of any other funds needed to pay the Improvement Bonds portion of the
Bonds and interest thereon when due.
(b) In the event of any current or anticipated deficiency in Assessments and Taxes, the City Council will levy
additional ad valorem taxes in the amount of the current or anticipated deficiency.
(c) The City will keep complete and accurate books and records showing: receipts and disbursements in
connection with the Assessable Improvements, Assessments and Taxes levied therefor and other funds appropriated for
their payment, collections thereof and disbursements therefrom, monies on hand and, the balance of unpaid Assessments
and Taxes.
(d) The City will cause its books and records to be audited at least annually and will furnish copies of such
audit reports to any interested person upon request.
4.03. The City Council covenants and agrees with the holders of the Bonds that so long as any of the Sewer and
Water Revenue Bonds portion of the Bonds remain outstanding and unpaid, it will keep and enforce the following
covenants and agreements:
(a) The City will continue to maintain and efficiently operate the water and sewer plant and system as public
utilities and conveniences free from competition of other like utilities and will cause all revenues therefrom to be
deposited in bank accounts and credited to the water and sewer system accounts as hereinabove provided, and will make
no expenditures from those accounts except for a duly authorized purpose and in accordance with this resolution.
(b) The City will also maintain the Utilities Account of the Debt Service Fund as a separate account in the
Water and Sewer Fund and will cause money to be credited thereto from time to time, out of net revenues from the water
and sewer plant and system in sums sufficient to pay principal of and interest on the Sewer and Water Revenue Bonds
portion of the Bonds when due.
(c) The City will keep and maintain proper and adequate books of records and accounts separate from all
other records of the City in which will be complete and correct entries as to all transactions relating to the water and sewer
plant and system and which will be open to inspection and copying by any bondholder, or the bondholder's agent or
attorney, at any reasonable time, and it will furnish certified transcripts therefrom upon request and upon payment of a
reasonable fee therefor, and said account will be audited at least annually by a qualified public accountant and statements
of such audit and report will be furnished to all bondholders upon request.
(d) The City Council will cause persons handling revenues of the water and sewer plant and system to be
bonded in reasonable amounts for the protection of the City and the bondholders and will cause the funds collected on
account of the operations of the water and sewer plant and system to be deposited in a bank whose deposits are
guaranteed under the Federal Deposit Insurance Law.
(e) The Council will keep the water and sewer plant and system insured at all times against loss by fire,
tornado and other risks customarily insured against with an insurer or insurers in good standing, in such amounts as are
customary for like plants, to protect the holders, from time to time, of the Bonds and the City from any loss due to any
such casualty and will apply the proceeds of such insurance to make good any such loss.
(f) The City and each and all of its officers will punctually perform all duties with reference to the water and
sewer plant and system as required by law.
(g) The City will impose and collect charges of the nature authorized by Minnesota Statutes, Section 444.075
at the times and in the amounts required to produce, net revenues adequate to pay all principal and interest when due on
the Sewer and Water Revenue Bonds portion of the Bonds and to create and maintain such reserves securing said
payments as may be provided in this resolution.
(h) The City Council will levy general ad valorem taxes on all taxable property in the City, when required to
meet any deficiency in net revenues.
4.04. It is hereby determined that at least 20% of the cost of the Assessable Improvements will be specially
assessed against benefited properties. For the purpose of paying the principal of and interest on the Improvement Bonds
portion of the Bonds, there is levied a direct annual irrepealable ad valorem tax (Taxes) upon all of the taxable property in
the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. The
taxes will be credited to the Debt Service Fund above provided and will be in the years and amounts as follows (year
stated being year of levy for collection the following year):
Year Levy
(See Attachment A)
4.05. It is hereby determined that the estimated collections of Assessments and the foregoing Taxes will produce
at lest five percent in excess of the amount needed to meet when due the principal and interest payments on the
Improvement Bonds portion of the Bonds. The tax levy herein provided is irrepealable until all of the Improvement
Bonds portion of the Bonds are paid, provided that at the time the City makes its annual tax levied the City Manager may
certify to the Manager of Property Records & Taxation of Anoka County the amount available in the Improvements
Account of the Debt Service Fund to pay principal and interest due during the ensuing year, and the Manager of Property
Records & Taxation will thereupon reduce the levy collectible during such year by the amount so certified.
4.06. It is hereby determined that the estimated collection of net revenues for the payment of principal and
interest on the Sewer and Water Revenue Bonds portion of the Bonds will produce at least five percent in excess of
the amount needed to meet, when due, the principal and interest payments on such portion of the Bonds and that no
tax levy is needed at this time with respect to the Sewer and Water Revenue Bonds portion of the Bonds.
4.07. The City Administrator is directed to file a certified copy of this Resolution with the Manager of Property
Records & Taxation of Anoka County and obtain the certificate required by Minnesota Statutes, Section 475.63.
Section 5. Authentication of Transcript.
5.01. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the
attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the
financial condition and affairs of the City, and such other certificates, affidavits and transcripts as maybe required to show
the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to
the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed
representations of the City as to the facts stated therein.
5.02. The Mayor and City Manager are authorized and directed to certify that they have examined the Official
Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their
knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations
made therein as of the date of the Official Statement.
Section 6. Tax Covenant.
6.01. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or
permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to
become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code), and the Treasury
Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers,
employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will
not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter
amended and made applicable to the Bonds.
6.02. (a) The City will comply with requirements necessary under the Code to establish and maintain the
exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation
requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the
yield on the Bonds, and the rebate of excess investment earnings to the United States if the Bonds (together with other
obligations reasonably expected to be issued in calendar year 2003) exceed the small-issuer exception amount of
$5,000,000.
(b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the
City finds, determines and declares that the aggregate face amount of all m-exempt bonds (other than private activity
bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds are issued
and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section
148(f)(4)(C) of the Code.
6.03. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them
to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and
141 through 150 of the Code.
6.04. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section
265(b)(3) of the Code, the City makes the following factual statements and representations:
(a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code;
(b) the City designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of
the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not
qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during
calendar year 2003 will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar year 2003 have been
designated for purposes of Section 265(b)(3) of the Code.
6.05. The City will use its best efforts to comply with any federal procedural requirements which may apply in
order to effectuate the designations made by this section.
Section 7. Book-Entry System; Limited Obligation of City.
7.01. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered
Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be
registered in the registration books kept by the Bond Registrar in the name of Cede & Co., as nominee for The Depository
Trust Company, New York, New York, and its successors and assigns (DTC). Except as provided in this section, all of
the outstanding Bonds will be registered in the registration books kept by the Bond Registrar in the name of Cede & Co.,
as nominee of DTC.
7.02. With respect to Bonds registered in the registration books kept by the Bond Registrar in the name of Cede
& Co., as nominee of DTC, the City, the Bond Registrar and the Paying Agent will have no responsibility or obligation to
any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities
depository (Participants) or to any other person on behalf of which a Participant holds an interest in the Bonds, including
but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or
any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person
(other than a registered owner of Bonds, as shown by the registration books kept by the Bond Registrar), of any notice
with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person,
other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the
Bonds. The City, the Bond Registrar and the Paying Agent may treat and consider the person in whose name each Bond
is registered in the registration books kept by the Bond Registrar as the holder and absolute owner of such Bond for the
purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers
with respect to such Bond, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and
interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept
by the Bond Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations
with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid.
No person other than a registered owner of Bonds, as shown in the registration books kept by the Bond Registrar, will
receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a
written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede
& Co.," will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver
a copy of the same to the Bond Registrar and Paying Agent.
7.03. Representation Letter. The City has heretofore executed and dehvered to DTC a Blanket Issuer Letter of
Representations (Representation Letter) which shall govern payment of principal of, premium, if any, and interest on the
Bonds and notices with respect to the Bonds. Any Paying Agent or Bond Registrar subsequently appointed by the City
with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation
letter with respect to the Bond Registrar and Paying Agent, respectively, to be complied with at all times.
7.04. Transfers Outside Book-Entry_ System. In the event the City, by resolution of the City Council, determines
that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond
certificate, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond
certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other
registered owner in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its
services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect
thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the
Bond Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply
to the transfer, exchange and method of payment thereofi
7.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as
a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if
any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner
provided in DTC's Operational Arrangements, as set forth in the Representation Letter.
Section 8. Continuing Disclosure.
8.01. In order to qualify the Bonds for limited continuing disclosure under paragraph (d)(2) of Securities and
Exchange Commission Rules, Section 15c2-12 (the SEC Rule), the City makes the following factual statement and
representation: As of the date of delivery of the Bonds, the City will not be n obligated person (as defined in
paragraph (f) of the SEC Rule) with respect to more than $10,000,000 in aggregate amount of outstanding municipal
securities, including the Bonds and excluding municipal securities that were exempt from the SEC Rule pursuant to
paragraph (d)(1) thereof.
8.02. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the
Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to
comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the
Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the City to comply with its obligations under this section.
8.03. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by
the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as
it may be amended from time to time in accordance with the terms thereof.
Section 9. Defeasance.
9.01. When all Bonds (or all of either the Improvement Bonds or Sewer and Water Revenue Bonds portion
thereof) have been discharged as provided in this section, all pledges, covenants and other rights granted by this
resolution (with respect to the Improvement Bonds or Sewer and Water Revenue Bonds portion of the Bonds, as the
case may be) to holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the
prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City
may discharge all Bonds (or all of either the Improvement Bonds or Sewer and Water Revenue Bonds portion
thereof) which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the
payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing
with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit.
The motion for the adoption of the foregoing resolution was duly seconded by Member
, and upon vote being taken thereon, the following voted in favor thereof.'
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
STATE OF MINNESOTA )
)
COUNTY OF ANOKA ) SS.
)
CITY OF COLUMBIA )
HEIGHTS )
I, the undersigned, being the duly qualified and acting Manager of the City of Columbia Heights, Anoka County,
Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular
meeting of the City Council of the City held on May 5, 2003 with the original minutes on file in my office and the extract
is a full, tree and correct copy of the minutes insofar as they relate to the issuance and sale of $ General
Obligation Improvement and Sewer and Water Revenue Bonds, Series 2003A of the City.
WITNESS My hand officially as such Manager and the corporate seal of the City this __ day of
,2003.
City Manager
Columbia Heights, Minnesota
(SEAL)
STATE OF MINNESOTA
COUNTY OF ANOKA
MANAGER OF PROPERTY
RECORDS & TAXATION'S
CERTIFICATE AS TO
TAX LEVY AND
REGISTRATION
I, the undersigned Manager of Property Records & Taxation of Anoka County, Minnesota, hereby certify that
a certified copy of a resolution adopted by the governing body of the City of Columbia Heights, Minnesota, on May
5, 2003, levying taxes for the payment of $ General Obligation Improvement and Sewer and Water
Revenue Bonds, Series 2003A, of said municipality dated June 1, 2003, has been filed in my office and said bonds
have been entered on the register of obligations in my office and that such tax has been levied as required by law.
WITNESS My hand and official seal this __ day of ,2003.
(SEAL)
Manager of Property Records & Taxation
Anoka County, Minnesota
Deputy
BID TABULATION
$2,600,000 General Obligation Bonds, Series 2003A
CITY OF COLUMBIA HEIGHTS, MINNESOTA
SALE: May 5, 2003
AWARD: NORTHLAND SECURITIES, INC.
RATING: Moody's Investors service "Al"
BBh 4.58%
NAME OF BIDDER
NET TRUE
MATURITY RATE REOFFERING PRICE INTEREST INTEREST
(February 1) YIELD COST RATE
NORTHLAND SECURITIES, INC.
Minneapolis, Minnesota
2004 1.100% 1.100%
2005 1.300% 1.300%
2006 1.600% 1.600%
2007 2.100% 2.100%
2008 2.400% 2.400%
2009 2.750% 2.750%
2010 3.000% 3.000%
2011 3.250% 3.250%
2012 3.400% 3.400%
2013 3.500% 3.500%
2014 3.600% 3.600%
2015 3.700% 3.700%
2016 3.800% 3.800%
2017 3.900% 3.900%
2018 4.000% 4.000%
$2,588,300.00 $697,568.33 3.4313%
CRONIN & COMPANY, INC.
Minneapolis, Minnesota
CITIGROUP GLOBAL MARKETS, INC.
Chicago, Illinois
UBS PAINEWEBBER, INC.
Chicago, Illinois
MORGAN STANLEY DW, INC.
Chicago, Illinois
CIBC WORLD MARKETS
New York, New York
CITIZENS BANK
Flint, Michigan
2004 2.000%
2005 2.000%
2006 2.000%
2007 2.500%
2008 2.500%
2009 3.000%
2010 3.000%
2011 3.100%
2012 3.250%
2013 3.350%
2014 3.500%
2015 3.550%
2016 3.650%
2017 3.800%
2018 3.850%
$2,579,803.65 $695,302.18 3.4363%
EHLERS
& ASSOCIATES INC
LEADERS IN PUBLIC FINANCE
3060 Centre Pointe Drive, Roseville, MN 55113-1105
651.697.8500 fax 651.697.8555 www.ehlers-inc.com
Offices in Roseville, MN, 8rookfield, WI and Naperville, IL
$2,600,000 General Obligation Bonds, Series 2003A
City of Columbia Heights, Minnesota
Page 3
NAME OF BIDDER
MATURITY
(February 1)
RATE
REOFFERING
YIELD
PRICE
NET
INTEREST
COST
TRUE
INTEREST
RATE
MILLER JOHNSON STEICHEN KINNARD
INVESTMENT SECURITIES, INC.
Minneapolis, Minnesota
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2.0O0%
2,000%
2.000%
2.100%
2.500%
2.750%
3.000%
3.250%
3.40O%
3.500%
3.600%
3.7OO%
3.800%
3.900%
4.O0O%
$2,574,000.00
$717,153.33
3.5449%
Page 1 of 3
Bill Elrite - Columbia Heights (City of) MN
From: "Moody's Investors Service" <epi@moodys.com>
To: <bill.elrite@ci.columbia-heights.m n.us>
Date: 4/30/2003 8:20 AM
Subject: Columbia Heights (City of) MN
MOODY'S ASSIGNS A1 RATING TO COLUMBIA HEIGHTS' (MN) $2.6 MILLION GO BONDS,
SERIES 2003A
A1 AFFIRMATION AFFECTS $6.7 MILLION OF PARITY DEBT, INCLUDING CURRENT ISSUE
Columbia Heights (City of) MN
Municipality
Minnesota
Moody's Rating
Issue
Rating
General Obligation Bonds, Series 2003A
Sale Amount $2,600,000
Expected Sale Date 05/05/03
Rating Description General Obligation
A1
NEW YORK, April 30, 2003 -- Moody's Investors Service has assigned an A1
rating to the City of Columbia Heights' (MN) $2.6 million General Obligation
Bonds, Series 2003A. The Bonds are secured by the City's full faith and credit
taxing powers and proceeds from the bonds will be used to finance vadous
public improvements within the City, including water main, storm sewer and
street improvements. Concurrently, Moody's has affirmed the A1 rating on the
City's $6.7 million of outstanding parity debt, including the current issue.
The rating assignment is based on the City's healthy financial margins,
average debt levels, and continued tax base growth.
SOUND FINANCIAL POSI-I-ION EVIDENCED BY HEALTHY RESERVES
Moody's expects the City to maintain a sound financial position due to prudent
management and a growing tax base. Over seven years of operating surpluses
(before transfers) have contributed to a healthy General Fund balance and the
creation of Capital Equipment and Building Funds. In fiscal year 2001, the
General Fund balance was $3.9 million or 50.7% of General Fund revenues.
Unaudited fiscal year 2002 results show an additional surplus of $879,000
before transfers bdnging the Capital Equipment fund to $4.5 million and the
Capital Building Fund to $2.9 million. This level of reserves precludes the
need for short-term borrowing and provides ample support for unexpected
contingencies. The City has a policy of maintaining reserves at a minimum of
45% of the next year's budget. The City's 2003 budget factors in potential
State aide cuts due to the Governor's proposal and has passed a balanced
budget. Officials believe that the City will use a combination of increased
fees and budget cuts to balance the fiscal year 2004 budget.
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MAINTENANCE OF MANAGEABLE DEBT PROFILE
Moody's believes the City's average debt burden of 3.0% is manageable due tax
increments and utility revenues, which fund a significant portion,
approximately 90% of debt service. In addition, the City has limited future
borrowing plans and a rapid rate of principal retirement (85% in ten years).
The average debt burden is primarily due to the overlapping school district,
which accounts for 82% of the overlapping debt. The City's direct debt ratio
is Iow at 0.6%. Proceeds of this sale will be used to for street improvements
and water and sewer upgrades, which are expected to be self-supporting through
state aid grants, sewer and water revenues and special assessments, yet backed
by a general obligation pledge. City officials do not anticipate future
borrowing of until at least 2005 for similar improvements.
TAX BASE GROWTH EXPECTED TO CON-rINUE
Moody's anticipates future tax base growth to remain modest, as the City is a
mature, fully developed inner-tier suburb north of Minneapolis (rated Aa1).
The City's $1 billion tax base has increased at an average of 8.7% annually
over the last four years. The City has been involved in redevelopment
projects, purchasing and rehabilitating existing homes and building, largely
through successful tax increment districts. The population, presently
estimated at 18,529, has decreased slightly since 1990. Wealth indices are
somewhat lower than state averages.
KEY STATISTICS
2000 census: 18,520
2002 full value: $1 billion
2002 Full value per capita: $57,103
Debt burden: 3.0%
Amortization of principal (10 years): 85%
FY01 General Fund balance: $3.9 million (50.7% of General Fund revenues)
MFI as a % of state (1999): 71.3%
PCI as a % of state (1999): 92.1%
Debt outstanding: $6.7 million
ANALYSTS:
3ulia Harris, Analyst, Public Finance Group, Moody's Investors Service
]on M. North, Backup Analyst, Public Finance Group, Moody's Investors Service
CONTACTS:
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
Copyright 2003, Moody's Investors Service, Inc. and/or its Iicensors including
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Page 3 of 3
Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH
INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER
TRANSMII-I-ED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR
SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER
OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.
All information contained herein is obtained by MOODY'S from sources believed by
it to be accurate and reliable. Because of the possibility of human or
mechanical error as well as other factors, however, such information is provided
"as is" without warranty of any kind and MOODY'S, in particular, makes no
representation or warranty, express or implied, as to the accuracy, timeliness,
completeness, merchantability or fitness for any particular purpose of any such
information. Under no circumstances shall MOODY'S have any liability to any
person or entity for (a) any loss or damage in whole or in part caused by,
resulting from, or relating to, any error (negligent or otherwise) or other
circumstance or contingency within or outside the control of MOODY'S or any of
its directors, officers, employees or agents in connection with the procurement,
collection, compilation, analysis, interpretation, communication, publication or
delivery of any such information, or (b) any direct, indirect, special,
consequential, compensatory or incidental damages whatsoever (including without
limitation, lost profits), even if MOODY'S is advised in advance of the
possibility of such damages, resulting from the use of or inability to use, any
such information. The credit ratings, if any, constituting part of the
information contained herein are, and must be construed solely as, statements of
opinion and not statements of fact or recommendations to purchase, sell or hold
any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,
COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH
RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM
OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one
factor in any investment decision made by or on behalf of any user of the
information contained herein, and each such user must accordingly make its own
study and evaluation of each security and of each issuer and guarantor of, and
each provider of credit support for, each security that it may consider
purchasing, holding or selling. Pursuant to Section 17(b) of the Securities Act
of 1933, MOODY'S hereby discloses that most issuers of debt securities
(including corporate and municipal bonds, debentures, notes and commercial
paper) and preferred stock rated by MOODY'S have, prior to assignment of any
rating, agreed to pay to MOODY'S for appraisal and rating services rendered by
it fees ranging from $1,500 to $1,500,000.
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