Res. #16-017 - Awarding the Sale of $1,815,000 G.O. Imp. Crossover Refunding Bonds, Series 2016A

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(a) Escrow Account. The Escrow Account will be maintained with Northland Trust Services, Inc., Minneapolis, Minnesota, which is a suitable financial institution within the State of Minnesota, designated as the escrow agent (the "Escrow Agent") for the Escrow Account. All proceeds of the sale of the Bonds will be received by the Escrow Agent and applied to fund the Escrow Account, the Debt Service Account, or to pay costs of issuing the Bonds. Proceeds of the Bonds not used to pay costs of issuance or deposited in the Debt Service Account are irrevocably pledged and appropriated to the Escrow Account, together with any investment earnings thereon. Proceeds deposited in the Escrow Account will be invested in securities maturing or callable at the option of the holder on such dates and bearing interest at such rates as will be required to provide sufficient funds, together with any cash or other funds retained in the Escrow Account, to pay when due (i) the interest paid on, or to be paid on, or to accrue on, each Bond, to and including February 1, 2018, which is the redemption date for the Refunded Bonds (the "Redemption Date"), and (ii) on the Redemption Date, the outstanding principal amount of the Refunded Bonds then outstanding. The Escrow Account will be irrevocably appropriated to the payment of the principal of and interest on the Bonds until the proceeds therein are applied to the prepayment of the Refunded Bonds. The money in the Escrow Account will 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 (hereafter defined), by and between the City and the Escrow Agent. Any money remitted to the City upon termination of the Escrow. Agreement will be deposited in the Debt Service Account. (b) Debt Service Account. To the Debt Service Account there is pledged and irrevocably appropriated and there will be credited: (i) any balance remitted to the City upon the termination of the Escrow Agreement; (ii) any balance remaining on February 2, 2018, in the Debt Service Fund created by Resolution No. 09-020, adopted by this Council on July 22, 2009 authorizing the issuance and sale of the Refunded Bonds (the "Prior Resolution"); (iii) any collections of all taxes hereafter levied for the payment of the Bonds and interest thereon; (iv) the proceeds of special assessments previously levied and pledged to the repayment of the Refunded Bonds pursuant to the Prior Resolution; (v) all investment earnings on funds in the Debt Service Account; (vi) accrued interest received upon delivery of the Bonds, to the extent not required to fund the Escrow Account; and (vii) any other money which is properly available and is appropriated by this 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 will be used as provided in Section 475.61, Subdivision 4 of the Act. 4.02. Findin s. It is found and determined that based upon information presently available from the City's municipal advisor, that the issuance of the Bonds will result in a reduction of debt service cost to the City on the Refunded Bonds, such that the present value of such debt service or interest cost savings (the "Reduction") is at least 3.00% of the debt service on the Refunded Bonds. The Reduction, after the inclusion of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is adequate to authorize the issuance of the Bonds as provided by Section 475.67, Subdivision 13 of the Act. 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, credit and taxing powers of the City will be and are hereby pledged. If the balance in the Escrow Account or the Debt Service Account, as the case may be, is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of money in the general fund of the City which is available for such purpose, and such general fund may be reimbursed with or without interest from the 6