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November 21, 1991
OFFICIAL PROCEEDINGS BUDGET PUBLIC HEARING NOVEMBER 21, 1991 The Budget Public Hearing was called to order by Mayor Carlson at 6:30 p.m.. 1. ROLL CALL Nawrocki, Clerkin, Ruettimann, Peterson, Carlson - present 2. PURPOSE OF PUBLIC HEARING To consider adoption of the 1992 budget and establish tax levies. 3. PRESENTATION OF INFORMATION BY STAFF Information on the proposed 1992 budget was presented by the City Manager, Stuart Anderson and the Finance Director, William Elrite. The City Manager stated that the State of Minnesota has a far more complicated tax system than almost any other state and that the Legislature has more impact on taxes than other levels of government. He noted that it requires more money to run the City than that which is generated by property taxes. The City anticipates underspending the 1992 budget by approximately $200,000. The 1991 adopted budget was $6,854,326.00 and the 1992 proposed budget is $6,815,951.00, which is a $38,375.00 reduction. No funds are received by the City to operate until July or after, so operating cash must be kept available to cover City expenses the first six months of the year. 4. QUESTIONS AND ANSWERS A resident noted that taxes are based on property value. He questioned how the property values will increase in the future. He was advised that there is no way of knowing what property values will be in the future. Councilmember Nawrocki stated that the City has saved about $50,000 each year since it decided to contract with Anoka County for assessing services. Residents were advised that there is an appeal process for those property owners who feel their valuation is incorrect; that being the Board of Review. A resident inquired if the property taxes would decrease fifty percent if the population decreased fifty percent. The City Manager responded this would not happen and advised that Columbia Heights has more housing units with its current population of 18,900 than it did with a population of 27,000 BUDGET PUBLIC HEARING NOVEMBER 21, 1991 PAGE 2 a number of years ago. Population is 3ust one of the factors which affects costs. A rental property owner suGGested that Columbia HeiGhts attract businesses into the City thereby broadening the City's tax base. The City ManaGer responded that the City through its HRA and financing incentive programs is attempting to attract new business into the community. He noted there is presently a real estate depression and that other communities also have vacant buildings and land so the competition for business is keen. The City ManaGer referred to the low interest loans which have been available to first time homebuyers in Columbia HeiGhts and to how successful this program has been. A resident recalled that when he lived in Boston each property owner received a complete list of all of the services and purchases of the City. He suGGested this type of information be made available to each home and business in the City. He felt this knowledge would produce Goods and services from local people which could save the City money. It was noted that to mail this type of document to each person in the City would be cost-prohibitive. The bidding process was explained and the resident was advised that the State mandates the City to award the bid to the low, responsible bidder. One resident inquired what happened to the surplus which had been discussed in the past. The Finance Director explained the surplus reserves are earmarked for anticipated expenses. Councilmember Ruettimann gave examples of purchases which will be necessary in the future and how the Council prudently anticipates these expenditures by budGetinG reserving funds for them. It was noted that the interest earned on the reserve funds aids in keeping down property taxes. Councilmember Nawrocki, referring to the recent Citizens' LeaGue Report reGardinG property taxes in the metropolitan area, noted that the City of Columbia HeiGhts ranks very favorably in its tax structure. The City enjoys a bond rating of A-1 and he feels the City supplies more than adequate service. Letters were received reGardinG the budget from owners of property at the following addresses: 4849 Central Avenue, 1227 45 1/2 Avenue and 3731 Jackson Street. Many of the residents in attendance expressed their feelings on how the City operated and on the City budget. Many suggested cuts could be considered in various areas such as the parks, recreation and the library. BUDGET PUBLIC HEARING NOVEMBER 21, 1991 PAGE 3 Members of the Council assured the residents that over the last nine months of budget meetings all areas of activity and services were carefully scrutinized to attain a "lean" budget. It was acknowledged that what appears to one resident as a low priority activity or service may be of prime interest or concern to another resident. The resident at 4249 Stinson Boulevard inquired who sets the priorities or demands for services. He was advised that input is sought from residents and, in the case of public safety, is responsive to public needs. The City Manager stated that all households received a survey regarding their interests/concerns with all facets of the City operation. Nearly 1,000 surveys were returned to the City Council and considerable direction was given in those surveys. Also, all of the Council work sessions which address the budget are public meetings and are posted so members of the community are aware of their being held. Some residents have chosen to attend these work sessions and state their priorities. RECESS OF PUBLIC HEARING Motion by Nawrocki, second by Clerkin to recess the Budget Public Hearing at 9:30 p.m. t© convene a scheduled Council Special Meeting. Roll call: All ayes RECONVENING OF BUDGET PUBLIC HEARING The Budget Public Hearing was reconvened at 10:05 p.m. The resident at 1309 Lincoln Terrace stated her concerns with regard to the clientele Generated by the City's municipal liquor stores. She considered this a less than appropriate way for the City to make a profit. This resident was advised that a neighboring city, Hilltop, also has the hours of operation as Columbia Heights and this business would continue to flourish only in another location. She felt the liquor operations had a negative impact on the City and was directly responsible for some of the residents whose behavior she finds objectionable. She suggested that both of the cities cease operation at 8:00 p.m. Members of the Council assured the resident that they share her concern for some of the slum areas in the City and have found enforcement of the Housing Maintenance Code has somewhat alleviated the problems associated with rental property. BUDGET PUBLIC HEARING NOVEMBER 12, 1991 PAGE 4 Councilmember Nawrocki advised this resident that the question of the City operating a municipal liquor business has been on the ballot twice in the last twenty years and had been overwhelmingly approved by the Cify's residents on both occasions. Councilmember Ruettimann felt the budget proposed is a "bare bones" budget and that the Council and staff have done a very good job. Mayor Carlson agreed and noted that this year these deliberations were particularly difficult because the City did not know until very late in the budget deliberations what amount of funding was going to be received from the State· CONSIDERATION OF RESOLUTION NO. 91-69 Motion by Ruettimann, second by Peterson to waive the reading of the resolution there being ample copies available for the public. Roll call: Ail ayes RESOLUTION NO. 91-69 BEING A RESOLUTION ADOPTING A BUDGET FOR THE YEAR 1992 AND SETTING THE TAX LEVY COLLECTABLE FOR THE YEAR 1992 BE IT RESOLVED by the City Council of the City of Columbia Heights as follows: Section A. The budget for the City of Columbia Heights for the year 1992 is hereby approved and adopted with appropriations for each of the funds as follows: Expense General Fund Recreation Fund Para Transit Fund State Aid Cable Television Fund Capital Improvements Fund Capital Equipment Replacement Funds: General Fund Water Fund Sewer Fund Central Garage Fund Central Garage Fund Liquor Fund Water Utility Fund Sewer Utility Fund Refuse Fund Debt Service Fund 6,815,951 0 98,000 182,802 89,242 165,000 136,900 32,500 28,000 0 276,885 4,811,736 1,098,359 1,247,334 1,574,525 3.596,910 BUDGET PUBLIC HEARING NOVEMBER 21, 1991 PAGE 5 Total Expense Including Interfund Transfers 20,154,144 Section B. The estimated gross revenue to fund the budget of the City of Columbia Heights for all funds, including general ad valorem tax levies as hereinafter set forth for the year 1992: Revenue Available General Fund Recreation Fund Para Transit Fund State Aid Cable Television Fund Capital Improvements Fund Capital Equipment Replacement Funds: General Fund Water Fund Sewer Fund Central Garage Fund Central Garage Fund Liquor Fund Water Utility Fund Sewer Utility Fund Refuse Fund Debt Service Fund 6,815,951 0 98,000 182,802 89,242 165,000 136,900 32,500 28,000 0 276,885 4,811,736 1,098,359 1,247,334 1,574,525 3,596,910 Total Revenue Including Interfund Transfers 20,154,144 Section C. The budget for the City of Columbia Heights for the year 1991 is hereby amended and adopted with appropriations for each of the funds as follows: General Fund Recreation Department Para Transit Fund State Aid Cable Television Fund Capital Improvements Fund Capital Equipment Replacement Funds General Fund Water Fund Sewer Fund Central Garage Fund Central Garage Fund Liquor Fund Water Utility Fund 6,643,332 0 88,274 94,112 132,010 558,559 222,810 177,551 44,479 0 319,372 4,552,623 1,276,008 BUDGET PUBLIC HEARING NOVEMBER 21, 1991 PAGE 6 Sewer Utility Fund Refuse Fund Debt Service Fund 1,664,355 1,421,703 7,260,414 Total Expense Including Interfund Transfers 24,455,602 Section D. The following sums of money are levied for the current year, collectable in 1992, upon the taxable property in said City of Columbia Heights, for the following purposes: General Fund Bond & Interest 3,368,595 0 Total 3,368,595 The City Clerk is hereby instructed to transmit a certified copy of this resolution to the County Auditor of Anoka County, Minnesota. Passed this 21st day of November, 1991. Offered by: Seconded by: Roll call: Ruettimann Peterson All ayes Mayor Edward M. Carlson Jo-Anne Student, Council Secretary Councilmember Nawrocki inquired as to the status of the issue of Meals on Wheels qualifying for C.D.B.G. funding. The City Manager responded that the City Attorney has been discussing this matter with the party responsible for drafting the requirements. Councilmember Nawrocki stated he had received a call from a party regarding a delinquent water bill on property she had not been living in for some time. The City Manager advised he had spoken to this person and arrangements for payment have been made and the water is on. ADJOURNMENT Motion by Peterson, second by Ruettimann to adjourn the hearing at Mayor Edward M. Carlson /6-;~nhe Student '~0uncil Secretary Notice of Proposed Property Tax for 1992 Taxes your county, school district and city or township propose to collect... GENOSKY RICHARD J SR 4441 TYLER NE COLUMBIA HGTS, MN 55421 Meetings you can attend to give your opinions on the amounts of tax.~./_.~.~~ Property Owner(s) Property Identiflcatlon,~,~/~ J/~ / ~¢/ Your county commissioners, your school board and your city council (if you live in a city) will hold meetings soon to decide on the amount of property taxes to collect in 1992 to pay for services they will provide. The county board and city council will also discuss their proposed budgets for 1992 and the school board will discuss its budget for the current school year at the meetings. Line 1 below shows the total estimated percentage increase (or decrease) in your property tax for 1992 if the property tax amounts now being considered are approved. I Proposed increase (or decrease) Line 2 below shows the total property tax amounts your county, school district and city or township are proposing to collect in 1992. Referendums, legal judgments, natural disasters and special assessments could increase these amounts. This notice does not show property tax amounts for special taxing dis- tricts -- such as watershed and hospital districts -- because they collect comparatively small amounts. Your county commissioners, school board members, and city council (if you live in a city) invite you to attend the meetings at the times and places shown below to express your opinions on the proposed amounts of property tax before they are voted on. in your property tax in 1992 ..... + 5 2 Total tax proposed for 1992 3 Total tax for 1991 4 Change from 1991 to 1992 5 One-year population change ( 6 Times and places of meetings on proposed taxes 7 Where to send comments and/or review s copy of proposed budget the CZTY OF C0LUMB][A HETGHTS $ 1,827,872 $ 1,559,127 + 17.2% 6:30 PM NOV. 21 COUNCIL CHAMBERS CZTY HALL MAYOR'S OFF~CE 590 40TH AVE N.E. COLUMBZA HEZGI-n'$~MN 55421 782-2800 COUl~rrY OF AJ~IOKA 34,401,719 32,861,133 4.7% 2.7% :00 PM DEC. 4 ,OARD ROOM COUNTY COURTHOUSE COUNTY ADMZNISTRATOR 325 E. MAIN STREET AMOKA, MN 55303 421-4760 SCHOOL DZSTRZCT 13 COLUMBIA HEIGHTS :$ 8,149,271 $ 7,128,035 + 14.4% i+ 1.2% pupil units ?:00 PM DEC. 10 )OARD ROOM dZGH SCHOOL 5CH00L SUPERZNTENDENT 1400 497H AVE N.E. ~OLUMBZA HEZGHTS,MN 55421 574-6505 FROM THE DESK OF Edythe Keeley PI~OPI~cTY I.D. ~',- Z~ 36 30 2~ 2.3 0180 City of Columbia ~s ~oka County Illness prevents me from attending your meeting of Nov. 21 regarding the tremendous increase in our Property Taxes for 1992. You are encouraging the elderly to stay in their homes... (I am pushing 80) how can we with all these price increases? Columbia Heights and Anoka County are very fortunate to have three LaBelle Condo Buildings in such a small area and be able to collect property taxes from over 200 plus taxpayers° ~;e have not made any big demands from either the city nor the county for any soecial services° %~e are cuite self-maintaining of our oroperties. ~N~one in our three buildings have school age children. believe in Education, however, there is a limit to pay, Day, Day and I oersonally have paid taxes for over 60 years, there should be a day of reckoning for us ~Jho have suoported the schools theme many years° The LaBelle hor~eo%mers feel that our taxes already are extre~.~ely high .... but increasing 17.2% for 1Q92 i~ really anfair~ See to it that you fill up all the empty commercial buildings and you then collect more taxes.. Emp_ty buildings are indeed, a deteriation of properties as well ~as the City of Colu~oia Heights. ~ a memo from EDYTHE KEELEY a memo from EDYTHE KEELEY OFFICIAL PROCEEDINGS COLUMBIA HEIGHTS CITY COUNCIL SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 The Special Council Meeting was called to order by Mayor Carlson at 9:30 p.m.. 1. ROLL CALL Nawrocki, Clerkin, Ruettimann, Peterson, Carlson - present 2. PURPOSE OF MEETING Consideration of the proposal which has been received for the purchase of General Obligation Tax Increment Refunding Bonds 3. PRESENTATION OF INFORMATION Cleo Rasmussen, representing Miller Schroeder Financial, Inc., Stephanie Galley, bond counsel from Holmes & Graven and Dan Hartmann of Springsted Financial Advisors were in attendance to present information regarding the refunding. Hartmann advised that the City will realize a net savings on the refunding of $317,212.62 which is somewhat higher than the figure he had previously quoted. Rasmussen stated that 1 1/4% will be paid to Miller Schroeder for its expenses and added that there is no penalty for early payment of the bonds. The City Manager requested if there are any other expenses associated with this transaction besides those listed in Schedules G and H. Hartmann stated that there were no other expenses. 4. ADOPTION OF RESOLUTION NO. 91-70 Motion by Nawrocki, second by Ruettimann to waive the reading of the resolution there being ample copies available for the public. Roll call: All ayes RESOLUTION NO. 91-70 A RESOLUTION AWARDING THE SALE OF $6,670,000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1991A; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF~ AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY BE IT RESOLVED, by the City Council of the City of Columbia SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 2 Heights, Anoka County, Minnesota (City) as follows: Section 1. Sale of Bonds 1.01. The proposal of Miller & Schroeder Financial, Inc. (Purchaser) to purchase $6,670,000 General Obligation Tax Increment Refunding Bonds, Series 1991A (Bonds) of the City described in the Terms and Conditions is accepted, the proposal being to purchase the Bonds at a price of $6,586,625 plus accrued interest to date of delivery, for Bonds bearing interest as follows: Year of Interest Year of Interest Maturity Rate Maturity Rate I995 4.75% 1999 5.50% 1996 5.00 2000 5.60 1997 5.10 2001 5.70 1998 5.30 2002 5.80 Net effective interest rate: 5.59454% 1.02. The sum of $16,675.00 being the amount bid by the Purchaser in excess of $6,569,950 is credited to the Escrow Account hereinafter created, or designated to pay costs of issuance of the Bonds, as the case may be. The City Treasurer is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Bonds. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.03. The City will forthwith issue and sell the Bonds in the total principal amount of $6,670,000, originally dated December 1, 1991, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-l, upward, bearing interest as above set forth, and which mature serially on March 1 years and amounts as follows: Year Amount Year Amount 1995 $835,000 1999 $945,000 1996 965,000 2000 900,000 1997 955,000 2001 860,000 1998 990,000 2002 220,000 1.04. Optional Redemption. The City may elect on March 1, 1999 and on any date thereafter to prepay Bonds maturing on or after March 1, 2000. Redemption may be in whole or in part of the Bonds subject to prepayment, and if in part, at the option SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 3 of the City and in such order as the City shall determine. If only part of the Bonds having a common maturity date are called for prepayment the specific Bonds to be prepaid will be chosen by lot by the Registrar. All payments will be at a price of par plus accrued interest. Section 2. Registration and Payment. 2.01. Registered Form. The Bonds shall 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 Paying 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 such Bond shall 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 such Bond will be dated as of the date of the original issue. The interest on the Bonds is payable on March 1 and September 1 of each year, commencing September 1, 1992, to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 2.03.Registration. The City will appoint, and shall maintain, a bond registrar, transfer agent, authenticating agent and paying agent (Registrar). The effect of registration and the rights and duties of the City and of the Registrar with respect thereto are as follows: (a) Registrar. 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 SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 4 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 such 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 any 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 judgement, 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 such Bond to the extent of the sum or sums so paid. Taxes, Fees and Charges. For a transfer or exchange of Bonds, the Registrar may impose a charge upon the owner thereof 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. If a 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 of any Bond destroyed, stolen or SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 5 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 evidenced 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) not more than 60 or not less than 30 days prior to the date fixed 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 in the manner required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of any proceeding for the redemption of the 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 the time. 2.04. Appointment of Initial Reqistrar. The City appoints Norwest Bank Minnesota, N.A., Minneapolis, Minnesota, as the initial Registrar. The Mayor and 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, such 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 SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 6 interest due date, without further order of this Council, the 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. In case any officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, such 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 each 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 ManaGer shall 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 for 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 in substantially the following form: SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 7 [FACE OF THE BOND] UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA CITY OF COLUMBIA HEIGHTS GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND, SERIES 1991A Rate Maturity Date of CUSIP Original Issue December 1, 1991 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 promises to pay to or registered assigns, the principal sum of $ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable March 1 and September 1 in each year, commencing September 1, 1992, 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 , 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 March 1, 1999, and on any date thereafter, to prepay Bonds of this issue maturing on or after March 1, 2000. Redemption may be in whole or in part of the Bonds subject to prepayment, and if in part, at the option of the City and in such order as the City shall determine. If only part of the Bonds having a common maturity date are called for prepayment the specific Bonds to be prepaid will be chosen by lot by the Registrar. All prepayments shall be at a price of par plus accrued interest. The City Council has designaGed the Bonds as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 8 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. Additional provisions of this Bond are contained on the reverse hereof and such provisions for all purposes have the same effect as though fully set forth in this place. 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 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 AUTHENTICATIO~ This is one of the Bonds delivered pursuant to the Resolution mentioned within. By Authorized Representative [Reverse of the Bond] This Bond is one of an issue in the aggregate principal amount of $6,670,000 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 November 21, 1991 (the Resolution), for the purpose of providing money to refund in advance of maturity and on the Redemption Date, as defined in the Resolution, a portion of certain general obligation bonds of the City, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, and the City's home rule charter, including Minnesota Statutes, Sections 475.67, Subdivision 13 and 469.178. The interest hereon is payable SPECIAL COUNCIL MEETING NOVEMBER 21~ 199] PAGE 9 until the Redemption Date, primarily out of the Escrow Account and Debt Service Account in the City's Refunding Bonds, Series 1991A Debt Service Fund and after the Redemption Date from tax increments resulting from increases in the taxable value of real property in a tax increment financing district in the City, 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 tax increments 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 intregal 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 hereef together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the City's home rule charter 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 cr charter limitation of indebtedness. SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 10 (Form of certificate to be printed on the reverse side of each Bond, following a full copy of the legal opinion.) I certify that the above is a full, true and correct copy of the legal opinion rendered by bond counsel on the issue of Bonds of the City of Columbia Meights, Minnesota, which includes the within Bond, dated as of the date of delivery of and payment for the Bonds. Facsimile Signature City Manager The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws and regulations: TEN COM --- as tenants in common TEN ENT --- as tenants by entireties JT TEN --- as joint tenants with right of survivorship and not as tenants in common. UNIF GIFT MIN ACT Custodian under (Cust) (Minor) Uniform Gifts or Transfers to Minors Act (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 assignor's 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 national bank or trust company SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 11 or by a brokerage firm having a membership in one of the major · stock exchanges. The Bond Registrar will not affect 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. 3.02. The City Manager is authorized and directed to obtain a copy of the proposed approvin~ legal opinion of Holmes & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on each Bond, to~ether with a certificate to be signed by the facsimile signature of the Manager in substantially the form set forth in the form of Bond. The Manaoer is authorized and directed to execute the certificate in the name of the City upon receipt of the opinion and to file the opinion in the City offices. Section 4. Bends: Security: Escrow. 4.01. Funds and Accounts. For the convenience and proper administration of the moneys to be borrowed and repaid on the Bonds and the General Obligation Tax Increment Refundin~ Bonds of 1987, Series A, dated June 1, 1987, $785,000 maturin~ on March 1, 1995, and all amounts on March 1, 1996 and thereafter (the "Refunded Bonds"), and to provide adequate and specific security for the Purchaser and holders from time to time of the Bonds and Refunded Bonds, there is hereby created a special fund to be designated the Refundin~ Bonds, Series 1991A Debt Service 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 all of the Refunded Bonds have been paid and until all of the Bonds and the interest thereon shall have been fully paid. There shall be maintained in the Fund two separate accounts, to be designated the Escrow Account and Debt Service Account. SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 12 (a) Escrow Account. The Escrow Account shall be maintained as an Escrow Account (Escrow Account) with Norwest Bank Minnesota N.A., in Minneapolis, Minnesota, which is a suitable financial institution within the State, whose deposits are insured by the Federal Deposit Insurance Corporation, whose combined capital and surplus is not less than $500,000 and said financial institution is hereby designated escrow agent (Escrow Agent) for the Escrow Account. All proceeds of the sale of the Bonds shall be received by the Escrow Agent and applied to fund the Escrow Account or to pay cost of issuing the Bonds. Proceeds of the Bonds not used to pay costs of issuance are hereby irrevocably pledged and appropriated to the Escrow Account, together with all investment earnings thereon. The Escrow Account shall be invested in securities maturing or callable at the option of the holder on such dates and bearing interest at such rates as shall be required to provide sufficient funds, together with any cash or other funds retained in the Escrow Account, to pay when due the interest to accrue on each Bond to and including March 1, 1994 (Redemption Date), and to pay when due on the Redemption Date the principal amount of each of the Refunded Bonds then outstanding. From the Escrow Account there shall be paid (i) all interest paid on, or to be paid on, or to accrue on, the Bonds to and including the Redemption Date, and (ii) the principal of the Refunded Bonds due by reason of redemption on the Redemption Date. The Escrow Account shall be irrevocably appropriated to the payment of the principal of and interest on the Bonds until the proceeds of the Bonds therein are applied to prepayment of the Refunded Bonds. The moneys in the Escrow Account shall be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Escrow Account may be remitted to the City, all in accordance with the Escrow Agreement (hereinafter defined) by and between the City and the Escrow Agent. Any moneys remitted to the City upon termination of the Escrow Agreement shall be deposited in the Debt Service Account. (b) Debt Service Account. To the Debt Service Account there is hereby pledged and irrevocably appropriated and there shall be credited: (i) any balance remitted to the City upon the termination of the Escrow Agreement; (ii) any balance remaining on March 2, 1995, in the Debt Service Fund created by the City Council resolution authorizing the issuance and sale of the Refunded Bonds (Prior Resolution); (iii) any collections of all taxes hereafter levied for the payment of the Bonds and interest thereon; (iv) all investment earnings on funds in the Debt Service SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 13 Account; (v) from and after the Redemption Date, after deposit in the Project Account maintained with respect to the City's General ObliGation Tax Increment Refunding Bonds of 1987, Series A (the "1987 Bonds") of amounts sufficient to pay principal of and interest on outstanding bonds of that issue, tax increments resulting from increases in the taxable value of real property in a tax increment financing district in the City pledged to repayment of the Refunded Bonds in the Prior Resolution; (vi) accrued interest (if any) received upon delivery of the Bonds to the extent not required to fund the Escrow Account; and (vii) any and all other moneys which are properly available and are appropriated by the City Council to the Debt Service Account. The amount of any surplus remaining in the Debt Service Account when the Bonds and interest thereon are paid shall be used as provided in Section 475.61, Subdivision 4 of the Act. 402. The moneys in the Debt Service Account shall be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to rep]ace funds which were used directly or indirectly to acquire higher yielding investments, except (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued,and (ii) in addition to the above,in an amount not Greater than the lesser of five percent of the of the proceeds of the Bonds or $100,000. To this effect any proceeds of the Bonds any sums from time to time held in the Fund (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess amounts which under the applicable federal arbitrage regulations on such investments after taking into account any applicable temporary periods of minor portion made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and 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 Bonds to be federally Guaranteed within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the Code). 4.03. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 14 credit and taxing Dowers of the City shall be and are hereby irrevocably pledged. If the balance in the Escrow Account or Debt Service Account if ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Escrow Account or Debt Service Account when a sufficient balance is available therein. 4.04. It is determined that estimated collection of tax increments for the payment of principal and interest on the Bonds after the Redemption Date will produce at least five percent in excess of the amount needed to meet when due, the principal and interest payments on the Bonds and the 1987 Bonds and that no tax levy is needed at this time. 4.05. Filing. The Manager is authorized and directed to file a certified copy of this resolution with the County Auditor of Anoka County and to obtain the certificate required by Section 475.63 of the Act. 4.06. Prior Resolution Pledqes. The pledges and covenants of the City made by the Prior Resolution relating to the tax increments and improvements financed by the Bonds and the Refunded Bonds are restated and confirmed in all respects. The provisions of the Prior Resolution are hereby supplemented to the extent necessary to give full effect to the provisions of this resolution. Section 5. Refunding: Findings: Redemption of Refunded Bonds. 5.01. As of the date of delivery of and payment for the Bonds the proceeds of the Bonds (Proceeds), in the amount of $6,608,212.05 less necessary expenses of the issuance of the Bonds, together with other funds (Funds) in the amount of $ -0- are hereby pledged and appropriated and shall be deposited in the Escrow Account. 5.02. It is hereby found and determined that the Proceeds and Funds available and appropriated to the Escrow Account will be sufficient, together with the permitted earnings on the investment of the Escrow Account, to pay at maturity or redemption all of the principal of and redemption premium (if any) on the Refunded Bonds. SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 15 5.03. Securities purchased from the monies in the Escrow Account shall be limited to securities specified in Section 475.67, Subdivision 8 of the Act. Securities purchased for the Escrow Account shall be purchased simultaneously with the delivery of and payment for the Bonds. The Mayor and Manager are authorized and directed to purchase such securities. 5.04. The Refunded Bonds being the 1987 Bonds maturing on March 1, 1995 in the amount of $785,000, and all 1987 Bonds maturing on March 1, 1996 and thereafter shall be redeemed and prepaid on the Redemption Date. The Refunded Bonds shall be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as Attachment A which terms and conditions are hereby approved and incorporated herein by reference. The Manager is hereby authorized and directed to forthwith publish the Notice of Call for Redemption in a publication qualified under Section 475.54 of the Act and to send written notices of call to the paying agent for the Refunded Bonds, provided that published notice alone shall be effective. 5.05. Escrow Aqreement. On or prior to delivery of the Refunding Bonds, the Mayor and the Manager are hereby authorized and directed to execute on behalf of the City an escrow agreement (Escrow Agreement) with the Escrow AGent in substantially the form now on file with the Manager. All essential terms and conditions of the Escrow Agreement including payment by the City of reasonable charges for the services of the Escrow Agent, are hereby approved and adopted and made a part of this resolution, and the City covenants that it will promptly enforce all provisions thereof in the event of default thereunder by the Escrow Agent. 5.06. Defeasance. When all Bonds and all interest thereon, have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds shall 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 shall remain in ful! force and effect. The City may discharge all Bonds 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 SPECIAL COUNCIL MEETING NOVEMBER 21, I991 PAGE 16 with the ReGistrar on or before the date a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also at any time discharge and defease the Bonds in their entirety by complying with the provisions of Section 475.67 of Minnesota Statutes, except that the funds deposited in escrow in accordance with said provisions may (to the extent permitted by law) but need not be, in whole or in part, proceeds of bonds as therein provided without the consent of any Bondholders. Section 6. Authentication of Transcript. 6.01. 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 may be 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 amd marketability of the Bonds and such instruments, including any heretofore furnished, shall be deemed representatives of the City as to the facts stated herein. 6.02. The Mayor and City ManaGer are hereby 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 7. Tax Covenant. 7.01. 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 and agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation SPECIAL COUNCIL MEETING NOVEMBER 21, !991 PAGE 17 under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 7.02. 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. 7.03. The City further covenants not to use the proceeds of the Bonds or to cause or permit then, 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. 7.04. In order to qualify the Bonds as "qualified rex- 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 hereby 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, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 1991 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 1991 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. SPECIAL COUNCIL MEETING NOVEMBER 21, 1991 PAGE 18 Section 8. Section 9. Effectiveness of Resolution. This resolution shall be in full force and effect from and after the effective date of Ordinance No. 1235 pursuant to which the City authorized the issuance of the Bonds. Ordinance No. 1235 will be in effect from and after December 10, 1991. Underwriting AGreement. The discount provided for in Section 1.01 is intended to and shall be the entire compensation due under the Underwriting Agreement dated October 18, 1991 between the City and Miller & Schroeder Financial, Inc. in connection with the issuance of the Bonds. Offered by: Seconded by: Roll call: Nawrocki Ruettimann All ayes Passed this 21st day of November, 1991. Mayor Edward M. Carlson Jo-Anne Student, Council Secretary ADJOURNMENT Motion by Nawrocki, second by Peterson to adjourn the Special Council Meeting at 9:45 p.m.. Roll call: All ayes Ma¥~ Edwa'rd 'M.- C-~:~l son Anh'~ stUdent'S-council secretary