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HomeMy WebLinkAbout2021-61 Extract of Minutes of Meeting of the City Council of the City of Columbia Heights, Anoka County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Columbia Heights, Minnesota, was duly held on Monday, July 12, 2021, commencing at 7:00 p.m. in the City Hall in said City and by electronic means as authorized by Minnesota Statutes, Section 13D.021, as amended, and a declaration by the Mayor made on March 20, 2020. The following members were present: Buesgens; Jacobs; Márquez Simula; Murzyn, Jr.; Novitsky and the following were absent: None * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City’s Taxable General Obligation Temporary Tax Increment Bonds, Series 2021A, to be issued in the original aggregate principal amount of $5,935,000. The City Manager presented a tabulation of the proposals which had been received in the manner specified in the Terms of Proposal of the Bond. The proposals are attached hereto as EXHIBIT A. After due consideration of the proposals, Member Novitzsky then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: CL162-59-732330.v2 2 RESOLUTION NO. 2021-61 A RESOLUTION AWARDING THE SALE OF TAXABLE GENERAL OBLIGATION TEMPORARY TAX INCREMENT BONDS, SERIES 2021A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $5,935,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; AND AUTHORIZING THE EXECUTION OF DOCUMENTS IN CONNECTION THEREWITH BE IT RESOLVED By the City Council (the “City Council”) of the City of Columbia Heights, Anoka County, Minnesota (the “City”), as follows: Section 1. Sale of the Bond. 1.01. Authorization. (a) The City has established and the Columbia Heights Economic Development Authority (the “Authority”) administers the Alatus TIF District (the “TIF District”) within the Downtown Central Business Redevelopment Project (the “Redevelopment Project”), pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”). The Authority and the City have approved a tax increment financing plan for the TIF District (the “TIF Plan”). The TIF District was created to facilitate redevelopment to create additional market-rate, senior, and single-family housing, renovate blighted properties, and improve the tax base in the City. (b) Pursuant to Section 469.178 of the TIF Act, the Authority is authorized to pledge the tax increment revenues generated by the TIF District to the payment of principal of and interest on general obligation bonds to be issued by the City to pay all or a portion of the public redevelopment costs incurred or to be incurred by the City in the Redevelopment Project as identified in the TIF Plan. On June 7, 2021, the Board of Commissioners of the Authority approved the Authority’s pledge of tax increment revenues generated by the TIF District to the payment of the Bond. (c) Pursuant to Section 469.178, subdivision 5 of the TIF Act and Minnesota Statutes, Section 475.61, subdivision 6, the City is authorized to issue temporary bonds maturing within three (3) years from their date of issue to pay all or a portion of the public redevelopment costs incurred or to be incurred by the City in the Redevelopment Project as identified in the TIF Plan. (d) Pursuant to a resolution adopted by the City Council on June 28, 2021, the City agreed to make a bridge loan to Alatus LLC, a Minnesota limited liability company or a designated affiliate of Alatus LLC reasonably acceptable to the City, for land acquisition, demolition, and related costs (the “Project”). (e) The City finds it necessary and desirable to the sound financial management of the affairs of the City to issue its Taxable General Obligation Temporary Tax Increment Bonds, CL162-59-732330.v2 3 Series 2021A (the “Bond”), in the original aggregate principal amount of $5,935,000, pursuant to the TIF Act and Minnesota Statutes, Chapter 475, as amended (collectively, the “Act”), specifically Section 469.178, subdivision 5 and Section 475.61, subdivision 6, to provide temporary financing for redevelopment costs incurred or to be incurred by the City for the Project as more fully described in the TIF Plan and the costs of issuing the Bond (the “Project Costs”). (f) The City is authorized by Section 475.60, subdivision 2(6) of the Act to negotiate the sale of the Bond, it being determined, on the advice of bond counsel, that interest on the Bond cannot be represented to be excluded from gross income for purposes of federal income taxation. 1.02. Award to the Purchaser and Interest Rate. The proposal of Piper Sandler & Co., Chicago, Illinois (the “Purchaser”), to purchase the Bond of the City is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bond at a price of $5,920,815.35 (par amount of $5,935,000.00, less underwriter’s discount of $14,184.65), plus accrued interest, if any, to date of delivery for the Bond bearing interest at a rate of 0.450% per annum. The true interest cost of the Bond is 0.5461710%. 1.03. Purchase Contract. The amount proposed by the Purchaser in excess of the minimum bid shall be credited to the Debt Service Fund hereinafter created or applied to Project Costs, as determined by the Finance Director in consultation with the City’s municipal advisor. The good faith deposit of the Purchaser shall be retained and deposited until the Bond has been delivered and shall be deducted from the purchase price paid at settlement. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amount of the Bond. The City will forthwith issue and sell the Bond pursuant to the Act, in the total principal amount of $5,935,000, originally dated July 29, 2021, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, bearing interest as above set forth, and maturing on February 1, 2024. 1.05. Optional Redemption. The City may elect on August 1, 2022, and on any day thereafter to prepay the Bond. 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 of the Bond is called for redemption, the City will notify DTC (as defined in Section 6 hereof) of the particular amount 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. Section 2. Registration and Payment. 2.01. Registered Form. The Bond will be issued only in fully registered form. The interest thereon and, upon surrender of the Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. The 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 Bond is payable on February 1 and August 1 of each year, CL162-59-732330.v2 4 commencing February 1, 2022, 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 such day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”). The effect of registration and the rights 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 the Bond and the registration of transfers and exchanges of the Bond entitled to be registered, transferred or exchanged. (b) Transfer of Bond. Upon surrender for transfer of the 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 Bond. When the Bond is 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. The Bond 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 the 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 the 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 the Bond 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 Bond. If the 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 CL162-59-732330.v2 5 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 the 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 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. The Bond 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 the Bond is called for redemption, notice thereof identifying the Bond to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of the 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 any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of the Bond. The Bond 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 National Association, Saint 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 thirty (30) days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and the Bond 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 the City Council, the City Manager must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bond 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 those 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 Bond ceases to be such officer before the delivery of the 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, the 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 a different Bond need not be signed by the same representative. The executed certificate of authentication on the Bond is conclusive evidence that it has been authenticated and delivered under this resolution. When the Bond has 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. CL162-59-732330.v2 6 Section 3. Form of Bond. 3.01. Execution of the Bond. The Bond will be printed or typewritten in substantially the form attached hereto as EXHIBIT B. 3.02. Approving Legal Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, and to cause the opinion to be printed on or accompany the Bond. Section 4. Payment; Security; Pledges and Covenants. 4.01. Debt Service Fund. The Bond will be payable from the Taxable General Obligation Temporary Tax Increment Bonds, Series 2021A Debt Service Fund (the “Debt Service Fund”) hereby created. The Debt Service Fund shall be administered and maintained by the Finance Director of the City as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. Tax increment revenues resulting from increases in taxable valuation of real property in the TIF District (the “Tax Increment Revenues”) received by the Authority from the TIF District are pledged to the Debt Service Fund pursuant to the Pledge Agreement (hereinafter defined). There is also appropriated to the Debt Service Fund (i) amounts over the minimum purchase price of the Bond paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof; and (ii) capitalized interest financed from Bond proceeds. 4.02. Project Costs. Proceeds of the Bond will be used by the City to finance the Project Costs. 4.03. Pledge Agreement. A Tax Increment Pledge Agreement between the City and the Authority, to be dated the date of issuance and delivery of the Bond (the “Pledge Agreement”), is hereby approved and shall be executed by the Mayor and the City Manager in substantially the form now on file with the City, with such additions, deletions, and other changes as are approved by the City Manager. The Pledge Agreement is to be executed and delivered in order to satisfy the requirements of Section 469.178, subdivision 2, Section 475.58, subdivision 1, and Section 475.61, subdivision 1 of the Act. The Pledge Agreement creates rights in the City and the Authority but is not intended to create duties or obligations of the City or the Authority to any other persons (including the beneficial or registered owners of the Bond) with respect to the Tax Increment Revenues or other revenues described or referenced in the Pledge Agreement, except to the extent required by applicable law, and is not intended to create rights in or claims by any other persons (including the beneficial or registered owners of the Bond) with respect to the Tax Increment Revenues or other revenues described or referenced in the Pledge Agreement, except to the extent required by applicable law. 4.03. Tax Increment Revenues. The estimated amount of the Tax Increment Revenues available to pay debt service on the Bond exceeds twenty percent (20%) of the Project Costs related to the TIF District. The total Project Costs are estimated to be at least equal to the amount of the Bond. 4.04. General Obligation Pledge. For the prompt and full payment of the principal of and interest on the Bond, as the same respectively become due, the full faith, credit, and taxing powers of the City are irrevocably pledged. If a payment of principal of or interest on the Bond becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the Finance Director is directed to pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for those advances out of the proceeds of Tax Increment Revenues when received. CL162-59-732330.v2 7 Furthermore, in accordance with its statutory duties under Section 475.61, subdivision 6 and Section 469.178, subdivision 5 of the Act, the City covenants and agrees with the holders of the Bond that if the Bond cannot be paid at maturity from Tax Increment Revenues or from other funds appropriated by the City Council, the Bond will be paid from the proceeds of definitive or additional temporary bonds that will be issued and sold prior to the maturity date of the Bond. 4.05. Debt Service Coverage. It is hereby determined that the estimated collection of the Tax Increment Revenues for the payment of principal of and interest on the Bond will produce at least five percent (5%) in excess of the amount needed to meet, when due, the principal and interest payments on the Bond and that no tax levy is needed at this time. 4.06. Certificate of Manager of Property Records and Taxation as to Registration. The City Manager is authorized and directed to file a certified copy of this resolution with the Manager of Property Records and Taxation of Anoka County, Minnesota and to obtain the certificate required by Section 475.63 of the Act. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bond certified copies of proceedings and records of the City relating to the Bond 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 and marketability of the Bond, and such instruments, including any heretofore furnished, may be deemed representations of the City as to the facts stated therein. 5.02. Certification as to Official Statement. The Mayor, the City Manager, and the Finance Director 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 Bond 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. 5.03. Closing Certificates. The Mayor, the City Manager, and the Finance Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bond or the organization of the City or incumbency of its officers, at the closing the Mayor, the City Manager, and the Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for and delivery of the Bond. 5.04. Payment of Costs of Issuance. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to Old National Bank, Chaska, Minnesota, on the closing date for further distribution as directed by the City’s municipal advisor, Ehlers and Associates, Inc. Section 6. Book-Entry System; Limited Obligation of City. 6.01. DTC. The Bond will be initially issued in the form of a separate single typewritten or printed fully registered Bond for the maturity set forth in Section 1.04 hereof. Upon initial issuance, the CL162-59-732330.v2 8 ownership of the Bond will be registered in the registration books kept by the 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 Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 6.02. Participants. With respect to the Bond registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the 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 the Bond as a securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bond, 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 Bond, (ii) the delivery to any Participant or any other person (other than a registered owner of the Bond, as shown by the registration books kept by the Registrar), of any notice with respect to the Bond, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of the Bond, of any amount with respect to principal of, premium, if any, or interest on the Bond. The City, the Registrar and the Paying Agent may treat and consider the person in whose name the Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of the Bond for the purpose of payment of principal, premium and interest with respect to the Bond, for the purpose of registering transfers with respect to the Bond, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bond only to or on the order of the respective registered owners, as shown in the registration books kept by the 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 Bond to the extent of the sum or sums so paid. No person other than a registered owner of Bond, as shown in the registration books kept by the 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 Registrar and Paying Agent. 6.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of, premium, if any, and interest on the Bond and notices with respect to the Bond. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bond will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 6.04. 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 Bond that they be able to obtain Bond certificates, 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 owners in accordance with the provisions of this resolution. DTC may determine to discontinue providing its services with respect to the Bond 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 Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 6.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the contrary, so long as the Bond is registered in the name of Cede & Co., as nominee of DTC, payments with CL162-59-732330.v2 9 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 7. Continuing Disclosure. 7.01. Execution of Continuing Disclosure Certificate. “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 Bond, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 7.02. City Compliance with Provisions of Continuing Disclosure Certificate. 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 Bond; 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. Section 8. Defeasance. When all of the Bond and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bond 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 Bond will remain in full force and effect. The City may discharge all of the Bond which is due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If the 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 remainder of this page is intentionally left blank.) CL162-59-732330.v2 10 The motion for the adoption of the foregoing resolution was duly seconded by Member Murzyn, Jr. and upon vote being taken thereon, the following voted in favor thereof: Buesgens; Jacobs; Márquez Simula; Murzyn, Jr.; Novitsky and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. CL162-59-732330.v2 A-1 EXHIBIT A PROPOSALS CL162-59-732330.v2 B-1 EXHIBIT B FORM OF BOND No. R-_____ $5,935,000 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA CITY OF COLUMBIA HEIGHTS TAXABLE GENERAL OBLIGATION TEMPORARY TAX INCREMENT BOND SERIES 2021A Rate Maturity Date of Original Issue CUSIP 0.450% February 1, 2024 July 29, 2021 Registered Owner: Cede & Co. The City of Columbia Heights, Minnesota, a duly organized and existing municipal corporation in Anoka County, Minnesota (the “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 sum of $5,935,000 on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable February 1 and August 1 in each year, commencing February 1, 2022, 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, 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 August 1, 2022, and on any day thereafter to prepay this Bond. 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 of the Bond is called for redemption, the City will notify The Depository Trust Company (“DTC”) of the particular amount to be prepaid. DTC will determine by lot the amount of each participant’s interest to be redeemed and each participant will then select by lot the beneficial ownership interests to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is issued pursuant to a resolution adopted by the City Council on July 12, 2021 (the “Resolution”), for the purpose of providing money to aid in providing temporary financing for public redevelopment costs of projects in the Alatus TIF District (the “TIF District”) in the City, 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, Sections 469.174 through 469.1794, as amended, and Minnesota Statutes, Chapter 475, as amended, specifically Section 469.178, subdivision 5 and CL162-59-732330.v2 B-2 Section 475.61, subdivision 6. The principal hereof and interest hereon are payable primarily from tax increments resulting in increases in the taxable value of real property in the TIF District and from proceeds of definitive bonds or additional temporary bonds to be issued by the City prior to the maturity hereof, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The Columbia Heights Economic Development Authority (the “Authority”) has pledged the tax increments from the TIF District to the City for payment of the principal of and interest on the Bonds, pursuant to the terms of a Tax Increment Pledge Agreement of even date herewith between the City and the Authority. The full faith and credit of the City is irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in tax increment revenues pledged, which taxes may be levied without limitation as to rate or amount. The Bond is issued only as a fully registered Bond 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, charter, or statutory 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. CL162-59-732330.v2 B-3 Dated: July 29, 2021 CITY OF COLUMBIA HEIGHTS, MINNESOTA (Facsimile) (Facsimile) Mayor City Manager ______________________________________ CERTIFICATE OF AUTHENTICATION This is the Bond delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION By Authorized Representative _________________________________ ABBREVIATIONS 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 in common UNIF GIFT MIN ACT _________ Custodian _________ (Cust) (Minor) TEN ENT -- as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of _______________ JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ________________________________________ CL162-59-732330.v2 B-4 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: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), 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 Registrar 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 _________________________________ CL162-59-732330.v2 B-5 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 Registrar Cede & Co. Federal ID #13-2555119