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Home My WebLink About2007 05-22 CCPCITY OF GEM LAKE, MN City Council Agenda May 22, 2007 CALL TO ORDER - By Mayor Emeott at PM CALL OF ROLL Emeott, Artig-Swomley, Rasmussen, Schilling, Watson OTHERS IN ATTENDANCE (Attach list) APPROVAL OF CITY COUNCIL MINUTES AND AGENDA A) Minutes of City Council Workshop on May 7th B) Minutes of City Council meeting of April, 2007 C) City Council Agenda for this meeting PUBLIC NOTICES NONE COMMITTEE REPORTS Planning Commission report Building Committee (City Hall) report — Craig Rafferty OLD BUSINESS A) SEH work on Gem Lake 2006 SWPP and MS4 report — Chuck Watson B) Proposals request for City Engineer to do feasibility studies — Comp plan ? b. Utilities to: i. Hoffman's comer water ii. Tom Hansen parcel iii. Bryan Hansen parcel c. Roads to and in parcel: i. Hoffman's corner shopping center ii. Tom Hansen parcel iii. Bryan Hansen parcel C) Should Gem Lake join the Ramsey -Washington Cable Commission? NEW BUSINESS A) Award of contract for City Hall building B) Resolution 2007-11 for selling bonds for City Hall — Todd from Elhers C) Approval of payment of claims for April -May 2007 D) Moratorium on construction in the Hoffman's Corner Business District without a master plan E) Request for payment for automobile damage on Hoffman Rd (Pothole) PRESENTATIONS FROM THE FLOOR FUTURE CITY COUNCIL MEETINGS Next City Council workshop June 4, 2007 7:00 PM Next meeting — Tuesday, June 19, 2007 7 PM or Other time ADJORNMENT CITY COUNCIL CLOSED SESSION WITH CITY ATTORNEY Minutes of the Gem Lake Council Meeting 22 May 2007 The May 2007 regular meeting of the City Council of the City of Gem Lake was called to order by Mayor Emeott on Tuesday, May 22, 2007, at 7:05 p.m., in the first floor meeting room of Tousley Ford. Mayor Emeott, Councilors Rasmussen, Watson, Schilling and Artig-Swomley were present. Also present was City Attorney, Trevor Oliver. Other members of the public were also in attendance per the sign -in sheet sent around the room. APPROVAL OF AGENDA AND MEETING MINUTES Mayor Emeott called for additions, deletions and corrections to the Agenda. Changes were made to the agenda as follows: 1) Ramsey County Fair Exhibit; 2) VLAWMO Watershed Management Organization; 3) Letter from State Administrator Hearing Officer. Motion by Watson and second by Schilling to accept the agenda with changes was unanimously approved; Motion by Rasmussen and second by Artig-Swomley to approve the Minutes of April 24, 2007 was unanimously approved. COMMITTEE REPORTS: Planning Commission Report: The Planning Commission Chair was not present but Planning Commission member Craig Rafferty reported that they were working on the Comprehensive Plan and related issues. He noted that they discovered some of the planning documents are carryovers from previous document of 1975 and really need updating. Motion by Schilling, Second by Watson to receive Planning Commission Report was unanimously approved. Building Committee (City Hall) Report: Craig Rafferty reported that there was excellent response to the advertisement for bids for the Town/City Hall project. 22 general contractors pulled plans for the project. There were 14 bids received. Three bids were close to the low bidder, Lund Martin Construction. Each contractor was asked to provide three possible options.. To move the project ahead the Council needs to sign the contract with the low bidder Once signed, it will set the contract in motion. The low bidder provided prices for the three specified alternates: 1) eliminate landscaping (White Bear Township will do); 2) an alternate for insulation, and 3) an alternate to remove the roof dormers. -There are other possible options that have been identified and once the contract is signed, change orders can be executed for those options. The representative from Lund Martin Construction thanked the Council on behalf of Lund Martin. He noted that the bids were very competitive and they are pleased to have provided the apparent low bid. Craig -noted that the quantity of bids received were the best he has seen, partly due to the time of year that the bids were put out. The Lund Martin representative stated that they will need to move the completion date to November 1". He -noted that this will be no threat to construction since all outside work will be done by that time. Craig Rafferty stated that the adjustment in timing for completion will not affect Gem Lake, but may have some impact on White Bear Township's plans to move their Town Hall. He stated that may mean that the Township may have to schedule one meeting at another location or have the meeting in the Gem Lake City Hall, even though all interior work may not be done. OLD BUSINESS SEH Work on Gem Lake 2006 SWPP and MS4 Report - Chuck Watson: Watson reported that he has talked with the MPCA and they suggest that the City do what White Bear Township does. He stated that he has the information needed and will be getting together with the MPCA who will assist in the report. Watson will report back next month. Proposals Request for City Engineer to do Feasibility Studies — Comp Plan: Mayor Emeott reported that there is a letter from SEH in the meeting packet that explains what the feasibility report would contain and the cost for doing the various items. This report allows for engineering studies —on the Hoffman's corner water; Tom Hansen parcel; and Bryan Hansel parcel Water, Sewer and road access data. Mayor Emeott reported that as part of the water feasibility plan an additional -a fee needs to be paid of between $5,000 to $6,000 in addition to the feasibility project. He noted that there needs to be discussions with Vadnais Heights to see if they can provide water service to the three parcels using their model and it will cost for use of the model. Justin Gese, our engineer from SEH, noted that a letter to the City of Vadnais Heights from the council is needed. -to use their model and data. In response to a question what the time line for the feasibility study is, it was noted that the 15` deadline is the end of this week and the balance could be done within a few months. There was discussion regarding road access, entrances and exits, to the Hoffman's corner shopping center and who pays for it. The Engineer will get a break down of road accesses. It was noted that there needs to be a vision for the whole project. The council needs to continue to gather facts and as the vision is developed there will be a better idea of how to proceed. Action on this study were tabled. Should Gem Lake Join the Ramsey -Washington Cable Commission: Mayor Emeott stated that he could not get any one to attend tonight's meeting. Award of Contract for City Hall Building: It was noted that changes that are to be made are available in the supplemental information provided tonight. The contract is for $801,700 which is the low bid. There will most likely be negotiated value engineering change orders after the contract has been signed in an amount between $57,000 - $64,000. Craig Rafferty stated that he went over the suggested changes with Lund Martin Construction. Craig Rafferty stated that the recommended contract changes that Trevor Oliver suggested are being implemented but are for contractor approval. He noted that the City has the approval of the attorney for these contract changes but needs the approval of Lund Martin Construction. Regarding an example of change for the contractor, Trevor Oliver stated that they added in payment terms for general contractor, the subcontractor to be paid in 10 days and that there would be a penalty if the work is not done. Schilling urged that they hold to an October 1 completion date, rather than November. There would be no penalty but he suggested that they try for October lst. Craig Rafferty will discuss the matter with the contractor. A voice vote was made as follows: motion by Schilling and second by Watson to award the contract for City Hall in the amount of $801,700 to Lund Martin was unanimously approved. Resolution 2007-11 for Selling Bonds for City Hall: Todd Hagen, Ehlers & Associates, Inc. reviewed the results of the bond sale. He reported that there were four bids received. He reported that low bidder was Northland Securities, Inc., Minneapolis, MN. True interest rate will be 4.4227%. The range of bids was 4.4227% - 4.5757%. The results of the sale were as follows: Principal amount is $850,000; Discount taken - $9,715; Average Interest Rate — 4.321.8%; Interest Rates: 4.00% - 4.50%; Available for Construction: $1,227,223; Township Contribution - $408,500; Bond Buyer Index: 4.29%; Closing Date: June 20, 2007. Motion by Watson, second by Atig-Swomley to accept the bid from Northland Securities, and to adopt the Resolution Providing for the Issuance and Sale of $850,000, General Obligation Capital Improvement Plan Bonds, Series 2007A was unanimously approved by voice vote. Approval for Payment of Claims for April — May 2007: Motion by Rasmussen, Second by Schilling to approve the payment of claims for April -May 2007 as presented was unanimously approved. K Moratorium on Construction in the Hoffman's Corner Business District Without a Master Plan: Mayor Emeott reported that there are various owners of properties in this area.- One owner -wants to sell now. If there is no master plan, multiple small developments could be started without any coordination between them. He reported that he spoke with Jerry Urban, Vadnais Heights, to find out what they had in mind for the areas in their city that abut the shopping center area. It was the consensus that it makes sense to place a moratorium on development until there is a completed master plan. Trevor Oliver stated that the proper process is to commence a study regarding what it is planned to do. He noted that the maximum time for a moratorium is one year. It was suggested that the city wait to see what SEH comes up with their feasibility study for Hoffinan corners. It was suggested that the matter be tabled to next month's meeting and to see if Vadnais Heights would place a moratorium on development at Hoffman's comer also. Trevor Oliver will prepare language for a moratorium. In response to a question on a possible moratorium on construction in this area, Trevor Oliver stated that it is premature in discussing the matter because a moratorium has not been prepared. Motion by Watson, second by Schilling to table further discussion to New Business Item D) Moratorium on construction in the Hoffman's Corner Business District without a master plan was unanimously approved. It was noted that Rasmussen and Artig-Swomley are looking at finding a planner for the City. They will try to have someone for the next workshop. Request for Payment for Automobile Damage on Hoffman Road (Pothole): Mayor Emeott reported that he has received photos of the pothole and automobile which a resident claimed was damaged due to a pot hole. He is asking for reimbursement for replacing two wheel rims in the amount of $282.59. Mayor Emeott noted that the pot hole was filled with Class V material within two days. There was considerable discussion regarding the claim and it was the consensus that paying the claim would set a precedent. It was noted that the area of the pot hole falls in four jurisdictions. Animal Control Policy: Mayor Emeott reported that he put together an Animal Control Policy for the City website. He stated that this will provide some direction for animal owners. He noted that dog licenses, which are now required, protect both the dog owner and the dog. Presentations from the Floor: 1) A resident asked why the minutes were being approved without being read. She stated that she found an error. She also asked why the meeting packets were only distributed at the meeting and not before. Mayor Emeott explained that many of the agenda items are things that were submitted a day or two before the meeting. The Councilors indicated that it would help to receive the meeting packets a few days before the meeting. Watson noted that they need to be responsive to the needs of the community. Mayor Emeott stated that he would make that change and have meeting materials ready a few days before the meeting. He noted that any agenda items that were received after the meeting packets were prepared and distributed would be held for inclusion on the agenda for the next meeting. A property owner asked if the meeting materials could be posted somewhere. Mayor Emeott stated that they have never done that. Agendas are e-mailed out to persons who have specifically requested them. They asked if a copy of the minutes could be posted at the door with the meeting notice. Mayor Emeott explained that the DRAFT minutes should not eot be posted or distributed until approved at the meeting. 3 2) Kevin Dodge asked about the signature he needs for this Minnesota Dealers License. Mayor Emeott explained that the applicant wants to sell cars in a GB-2 district. He asked how it can be defined that cars will be sold when there are will be no sales lots for the cars. He stated that the request is for retail sale of cars but there are no cars to be stored on the site to sell. Mayor Emeott stated that it is a zoning issue and needs to go to the Planning Commission. The applicant stated that by definition of the GB-2 district, auto sales are permitted. Mayor Emeott stated that as Zoning Administrator for the City, he does not see how there can be retail sales with only storage for cars. He noted that a Conditional -Use Permit is needed if there are outside retail sales. He stated that at the present time the City does not allow outdoor sales or storage lot in a GB-2 district. He stated that Section 10.4 which deals with this is incomplete. Trevor Oliver stated that he will look at the Ordinance. He invited the applicant to provide detail to him. FUTURE CITY COUNCIL MEETINGS: Next City Council Workshop — June 4, 2007 at 7:00 p.m. Next City Council Meeting — Tuesday, June 19, 2007 at 7:00 p.m. The meeting closed at 9:11 p.m. and the council went into closed session with the City Attorney. AUTHORIZED: May 22, 2007 APPROVED: June 19, 2007 ATTEST: Joan J. Clemens Recording Secretary 6A 7/ G E 1fafi Em tt Mayor Certified Copy 4 Attendees for May 22, 2007 Council Meeting Kevin Dodge 1513 Woodview West Eagan, MN 55122 612-965-3464 Pat and Barb Madigan 711 North Oak Drive Vadnais Heights, MN 55127 651-762-8999 Ron Wagner, Lund Martin Construction 3023 Randolph St. NE Minneapolis, MN 612-782-2250 Cathy Carey PMB 150 — 4707 Highway 61 White Bear Lake, MN 55110 651-292-9343 Robert Uzpen 3646 Big Fox Road Gem Lake, MN 55110 651-426-8310 Kimberly Anderson-Uzpen 3646 Big Fox Road Gem Lake, MN 55110 651-426-8310 Justin Gese S.E.H. 612-758-6757 Steve Herzog 1433 Goose Lake Road Craig Rafferty 3750 Big Fox Road St. Paul, MN 651-330-5612 Todd Hagen Ehlers & Associates 3060 Centre Pointe Drive Roseville MN,55113-1105 651-697-8506 CITY OF GEM LAKE 4707 Hwy 61 # 253 White Bear Lake, MN 55110-3227 Telephone 651-747-2790 City Council Workshop May 7, 2007 The following people attended this City Council workshop which started at 7:10 PM:: Paul Emeott, Chuck Watson, Gretchen Artig-Swomley, Craig Rafferty, Jim Lindner Kim Anderson, Bryan Hansen. 1) This workshop reviewed the existing 1997 City of Gem Lake Comprehensive Plan and then looked at what our planning consultant suggested as updated wording and data for Section 3 & 4. A lot of discussion was done on what population numbers to use in the up -dated plan, as there are big conflicts between what the city thinks we now have for residents and what the Metro Council is forecasting. These numbers are important, so we will strive to find a number that all can agree on.. A lively session was then held on suggested wording for Section 5 — Land use goals and Policies, of the up -dated 2008 City of Gem Lake Comprehensive plan. This section is the area where our planner has said that the City has to provide most of the text changes and ideas. A lot more work is needed to get more in agreement on what our policies might be. We also looked at what is currently in Section 6 — Transportation Plan, but decided that most of this section can be updated by our planner. Section 7 is the Sanitary Sewer Section and the engineers at SEH are currently finishing our policies and system design features for this section. 2) The need for an Animal Control Policy for the city was brought up. As no one had any ideas on this matter, the Mayor will write the policy and put it on the City website. 3) The need for an updated "Capital Improvement Plan (budget ) was mentioned, but no suggestions or work was done on it. All of these subjects will have further discussion at future City Council Workshops. Meeting ajorned at 9:25 PM Notes by Paul Emeott 5/7/07 MA,62LA?�, WHITE BEAR LAKE L"= AREA PUBLIC SCHOOLS Independent School District No. 624 BARBARA KEARN Principal J May 7, 2007 City of Gem Lake Paul Emeott, Nlayor 4707 Hwy 61 #253 White Bear Lake MN 55110 Dear Mayor Emeott & Gem Lake City Council, WILLOW LANE ELEMENTARY 3375 Willow Avenue White Bear Lake, MN 55110 (651) 773-6170 • Fax (651) 773-6176 Thank you so very much for the $1332.00 contribution made to Willow Lane Elementary School. As we have previously indicated, the money will be used to purchase non-fiction books to improve our literacy program. This year, for February's "I Love to Read Month" the students were challenged to read 5000 books. They greatly surpassed that goal by reading 12,123 books! We believe the increased emphasis on literacy that we can provide with your added help is shown in that total of over 12,000 books. Thank you for continued support of our students. Sincerely, Barbara Kearn Principal The Mission of the White Bear Lake School District is to provide a high -quality educational experience for all learners. CITY OF GEM LAKE 4707 Hwy 61 # 253 = White Bear Lake, MN 55110-3227 Telephone 651-747-2790 Animal Control Policy Animal control in the City of Gem Lake is defined in the Animal Ordinance (No 69) enacted in 2005. This Animal Ordinance (No. 69) is posted on the City of Gem Lake website at xvwxv.gemlakeMN.org and copies are available at the City Office. Dogs Dog Licensing All dogs that are kept in the City of Gem Lake must be licensed. This is done to insure that Animal Control Services Inc. can identify the owner of a dog in the City of Gem Lake and in adjacent cities. Contact the city license bureau at 651-747-2756 for information on licensing Vicious Dog or Dog Bite Public Safely) Call the Ramsey County Sheriff — 911 (EMERGENCY only) or 651-484-3366 immediately depending on the circumstances. The Sheriff will call Animal Control to arrange to pick up the dog and for an Ambulance and/or Paramedic to treat the person bitten, as needed. Dogs running at large. During normal working hours (7:30 AM to 4:30 PM on weekdays) call the City of Gem Lake office at 651-747-2790. At all other hours call the Ramsey County Sheriff at 651-484-3366. Dogs will be picked up by Animal Control Services who contracts with the City of Gem Lake for such services. Animal Control Services Inc. will hold and then identify the owner thru the information on the dog licensing tags on the animal. The dog owner must pay for all charges accessed by Animal Control Co. The city will also tag dog owners whose dogs run at large. Barking dogs (Nuisance) Call the Ramsey County Sheriff at 651-484-3366. A constantly barking dog is identified as a nuisance and will be treated as described in the City of Gem Lake nuisance ordinance. See section 3.7 of the Animal Ordinance for a definition of barking dog nuisances. All other domestic animals Loose or stray domestic animals During normal working hours (7:30 AM to 4:30 PM on weekdays) call the City of Gem Lake office at 651-747-2790. At all other hours call the Ramsey County Sheriff at 651-484-3366. See Section 2.3 of the Animal Ordinance for a definition of what is classified as a Domestic Animal. Page 1 of 2 Horses or other agricultural animals To report a horse or other agricultural animal that is loose on the County Roads or City of Gem Lake Streets call the Ramsey County Sheriff at 651-484-3366. Loose agricultural animals on private property will require the property owner to find and notify the owner to recover the animal. Animal Protection The City of Gem Lake is also concerned about the care of Domestic and Agricultural animals in the city. Section 3.11 of the Animal Ordinance describes the "Housing and Keeping of Animals". Stable and Kennel operation is also described in Section 5. Call the City office or the Ramsey County Sheriff with concerns. Exotic Animals Exotic animals are not allowed to be kept in City of Gem Lake. See the Animal Ordinance for a definition of what is identified as an exotic animal. Deer Deer that are injured and must be put down will be handled by the Ramsey County Sheriff — Call 651-484-3366 unless there is an EMERGENCY, then call 911. It is illegal for anyone but a sheriff s officer to discharge a firearm in the City of Gem Lake and Ramsey County. Handling of dead deer is accomplished as follows: In MNDOT right-of-way (Highway 61) Call Ramsey County Sheriff at 651-484-3366 In Ramsey County road right-of-way ( County Rd E, Otter Lake Rd, Labore Rd) Call Ramsey County Sheriff at 651-484-3366 In City of Gem Lake streets and right-of-way (Schuneman Rd, Big For Rd, Little Fox Lane, Haven Lane, Terrier Rd) Call 651-474-2790 during normal working hours (7:30 AM to 4:30 PM) or the Ramsey County Sheriff at 651-484-3366. On Private Property and Private roads and driveways Call Rick Johnson at 612-860-3551 and ask for dead deer pickup- Cost is $100.00 per deer to be paid by the landowner or person who makes the call. Otherwise dispose of the deer by burying the dead animal. 5/7/07 Page 2 of 2 IL IL az VI 4 cz �v ti C, ION q Z f/? A Li106101.1 v Qj Q w 66 699 199 lrl"9�:n !007 ' l''IM-i h19a, 18 ?OCi? 3 21SAM 651 653 y!y F. !4 CY44805 UNIT# 40581 LEt41S ALBERT DAVIS 2327 cotMITY ROAD FL E SAINT PAUL, PAN 55110-7401 HOME:651-429-0550 BUS: iaea.s7 BUERKLE HYUNDAI *INVOICE* 3350 HIGHWAY 61 VADNAI5 HEIGHTS - ST. PAUL, MN 55110 PAGE 1 (e51) 490-6666 SERVICE ADVISOR: 7 MATT VELLIEUX EBONY BLA 06 HYUNDAI FI=, RA KMHDN46D9GU339003 3132 3132 5968 >JaT 1 va s ; t : Rau a✓ et a s: AAT - << : > Pit ! fa ;.: z > 23JAN07 14 17:00 10MAY07 1 1 120.00 1 CC 110MAY07 OPTIONS: STK:40581 DLR:206806 ENG:2.0 Liter 1)40581 2)BLACK 3)D-TRADE FROM METRO HYUNDAI 17:18 09MAY07 10:04 lOMAY07 MICHELIN LINE OPCODE TECH TYPE HOURS LIST NET TOTAL A CUSTOMER STATES THAT THE 2 LEFT SIDE RIMS ARE BENT AND WOULD LIKE THEM REPLACED - OK TO REPLACE BOTH DRIVERS SIDE RIMS 3M2 MOUNT AND BALANCE 2 TIRES 521 CR 1.00 28.00 28.00 2 52910-2D050 WHEEL ASSY 65.24 65.24 130.48 2 STEM VALVE 2.00 2.00 4.00 I REPLACED THE TWO LEFT SIDE RIMS AND BALANCED. ----- 1.OHR----- CUSTOMER STATES THAT THE RIMS WERE BBNT -DUE -TO._.GQING INTO A LARGE POT HOLE. � B PLEASE PERFORM ALL WHEEL ,-NMENT : CIC AND ADJUST ° I C . PER CUSTOMER REQUEST ` .�_ 4A FOUR WHEEL ALIGNME14T' r 521 CR 2. Q$}4; �„99.95 FOUR WHEEL ALIGN COMPLETEDT`^ FRT EA TOE,6ESTED OPERATION OK. p' C QUALITY FINAL INSPECTION BY TES FOR TEST DRIVE RESULTS QCT QUALITY FINAL INSPECTION BY TECHNICIAN - SEE NOTES FOR TEST D_ ILr� 52 CR 0.0'�ai. D PLEASE WASH VEHICLE - AS PER CUSTOMER REQUEST - NO CHARGE W PLEASE WASH VEHICLE - AS PER CUSTOMER REQUEST - NO CHARGE 52 CR 0.00 E TREAD DEPTH 9/32 OF AN INCH TIRE9 TREAD DEPTH 9/32 OF AN INCH 52 CR 0.00 gccidenestate �t>�itlfAtbtett6tight� *****�r *` AS**S�'�WeAV WEIS* CUSTOMER pAi D 'r A 'YFO12 REPAIR ORDE RANGEMENTS MADE doesn have to e Any warranties on the prod4j= Sold h5rd0y Buerkle Hyundai • Honda are trwo of the menufoctwer. As betwedn Thia retail Relief alw buvef, the product Is to be told 'as 4- and the entire rook BB To the Ouallty, Let Buerkte Hyundai - Honda and out and wtorm<rx:e of The product is with the state of the art Collision Center relieve buy°`• Tha seller exprecely diecialme all wamnTles, elinar exprirw or implied, 'rrauding some of the stress for you, and :mplied wsrrarrty or merchantabl y or utneis for a perVouler ourooed. and the seller We utilize a computerized estimating amm" nor authorizes any other person to assume for It any IWbodulitly In person stem, and electronic frame die s nosks y 9 ConneCTlon whh The 561e OT said prduCC4. and repair. In addition, we are approved Thce d9Claimer by thi: tile, :n no way atfects for a(I insurance companies and offer the term: of tM manufbcturers warranty. Tne shuttlo S9CViCe and On site rentals. buyer wknowtedae,; balN eo iAT&rntd prwr to ea!d. ALL PARTS NEW ORIGINAL EQUIPMENT UNLESS OTHERWIS9 SPECIFIED. With over 50 years of experience, Gan" MOLore & reorroe warreniv on installed our team is more than qualified to handle Pam and labor . 12 months or 12,000 maez whichever comas firm. all of your collision needs. CUSTOMER SIGNATURE We re air ALL makes and models, Car or light duty trucks. CUSTOMER COPY itt*ai**ftilt !?Esf:FriPi'10N LABOR AMOUNT PARTS AMOUNT GAS, OIL, LUSE SUBLET AMOUNT MISC. CHARGES TOTAL CHARGES LESS INSURANCE PLEASE PAY THIS AMOUNT 99.95 0.00 0.00 0.00 0.00 0.00 0.00 11.52 127.95 134.48 0.00 0.00 11.52 273.95 0.00 i trIll ' d �l 10 6 0 N L � 6 6 r 9 L 0 0 i tr%b 'd LIOPON 6 6^ fig 199 y,� h,' 9 8 A H • i ' , 1. • - •�•. .' . �� • t � � / a ld� . , 1 . • 1 � 1 I , • M CP 42 S. 1, 1 1 r i 1 'f a •t�;:tip i•..:. '[�',l.•' ��.Yt �: .li � � t 4;; •tsttyt+?1 ,•••��!=�.�M••l1'��.�rrS•`ti►f'•i,f.} ell r► r1 .. ; Yr�., 1, i[ALI •t :1, _''� � t ±; f, ' ♦ Jam••: Jr Al i ' '�' • h 0' +s , tit ! ,�- g - l • i, �.• • r:1-?+ ��JILj.1.-� •w'�� 1� t.l+�.'Y�It:T TLC•' }' - - :1 ,,>>. .•t'_ .��._ ter , j'(k e4,. t .�YY�• . t •T '. MEMORANDUM TO: MAYOR EMEOTT FROM: WILLIAM F. SHORT DATE: APRIL 23, 2007 (Updated May 2, 2007) SUBJECT: SCHEUNEMAN ROAD PATCHING Last week, Bill LaBore, the Town's Public Works Coordinator, visited Scheuneman Road between Co. Rd. E and TH 61 to review the pothole problems, and estimate the cost to patch them. Bill recommends the following: Fill potholes on east side of Scheuneman Road where they are within, or adjacent to, the driving lanes and paved shoulder. 2 Workers and 1 Truck for 4 Hours 8 hours labor @ $40/hr $320.00 4 hours 1-ton truck @ $19/hr $ 76.00 4 tons bituminous mix @ $50/ton $200.00 TOTAL COST $596.00 Bill's estimate includes patching some potholes that are outside the drive lane but still in the right-of-way. He advises that the additional patching be done because it has been his experience that once a Township truck is seen patching holes, there will be calls from the property owners complaining that they didn't "finish the job". Such calls are time-consuming, result in a negative view of their public image, and frequently result in the additional patching being done anyway. W FS/j b:schueneman rd cc:file CONTINUING DISCLOSURE In order to assist bidders in complying with SEC Rule 15c2-12, as amended, the City will covenant to undertake (pursuant to a Resolution to be adopted by the City Council), to provide annual reports upon request and timely notice of certain events for the benefit of holders of the Bonds. The details and terms of the undertaking are set forth in a Continuing Disclosure Certificate to be executed and delivered by the City, a form of which is included in the Official Statement. INFORMATION FROM PURCHASER The successful purchaser will be required to provide, in a timely manner, certain information relating to the initial offering prices of the Bonds necessary to compute the yield on the Bonds pursuant to the provisions of the Internal Revenue Code of 1986, as amended. PRELIMINARY OFFICIAL STATEMENT Underwriters may obtain a copy of the Preliminary Official Statement relating to the Bonds prior to the proposal opening by request from Ehlers at,*vww.ehlers-inc.com by connecting to the link to the Bond Sales. The Syndicate Manager will be provided with 50 copies of the Final Official Statement within seven business days of the proposal acceptance. Additional copies of the Final Official Statement will be available at a cost of $10.00 per copy. Information for bidders and proposal forms may be obtained from Ehlers at 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, Telephone (651) 697-8500. By Order of the City Council William Short, City Clerk City of Gem Lake, Minnesota D-5 PROPOSAL FORM The City Council May 22, 2007 City of Gem Lake, Minnesota RE: $850,000* General Obligation Capital Improvement Plan Bonds, Series 2007A DATED: June 20, 2007 For all or none of the above Bonds, in accordance with the Terms of Proposal and terms of the Global Book -Entry System as stated in this Preliminary Official Statement, we will pay you $ (not less than $837,250) plus accrued interest to date of delivery for fully registered Bonds bearing interest rates and maturing in the stated years as follows: • due 2009 % due 2016 % due 2023 • due 2010 % due 2017 % due 2024 % due 2011 % due 2012 % due 2013 % due 2014 % due 2015 % due 2018 % due 2019 % due 2020 % due 2021 % due 2022 % due 2025 % due 2026 % due 2027 % due 2028 * The City reserves the right to increase or decrease the principal amount of the Bonds on the day of sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted to maintain the same gross spread per $1,000. We enclose our good faith deposit in the amount of $17,000, to be held by you pending delivery and payment. Alternatively, we have provided a financial surety bond or have wired our good faith deposit to the U. S. Trust Company, N.A., Greenwich, CT, ABA No. 0210-01318, for further credit to Ehlers & Associates, Inc. Bond Issue Escrow Account No. 850-788-1. If our proposal is not accepted, said deposit shall be promptly returned to us. If the good faith deposit is wired to such escrow account, we agree to the conditions and duties of Ehlers & Associates, Inc., as escrow holder of the good faith deposit, pursuant to this Preliminary Official Statement dated May 11, 2007. This proposal is for prompt acceptance and is conditional upon deposit of said Bonds to The Depository Trust Company, New York, New York, in accordance with the Terms of Proposal. Delivery is anticipated to be on or about June 20, 2007. This proposal is subject to the City's covenant and agreement to enter into a written undertaking to provide continuing disclosure under Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 as described in the Preliminary Official Statement for this Issue. We have received and reviewed the Preliminary Official Statement and have submitted our requests for additional information or corrections to the Final Official Statement. As Syndicate Manager, we agree to provide the City with the reoffering price of the Bonds within 24 hours of the proposal acceptance. Account Manager: Bv: Account Members: Award will be on a true interest cost basis. According to our computations (the correct computation being controlling in the award), the total dollar interest cost (including any discount or less any premium) computed from June 20, 2007 of the above proposal is $ and the true interest cost (TIC) is _ %. The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Gem Lake, Minnesota, on May 22, 2007. BY: By: Title: Title: City of Gem Lake, MN �-� Results of Bond Sale May 22, 2007 a $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A Low Bidder Northland Securities, Inc. Minneapolis, Minnesota True Interest Cost 4.4227% Number of Bids 4 Rating Non -Rated Range of Bids 4.4227% - 4.5757% Total Debt Service Results of Sale Principal Amount $850,000 Discount Taken $9,715 Average Interest Rate 4.3218% Interest Rates 4.00% - 4.50% Available for Const. $I,227,223 Twp. Contribution $408,500 Bond Buyer Index 4.29% Closing Date June 20, 2007 Council Action Accept the bid from Northland Securities, Inc. and Adopt "Resolution Providing for the Issuance and Sale of $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A" Attachments ■ Bid Tabulation ■ Final Debt Schedule ■ Graph, Bond Market EHLERS ■ Bond Resolution & ASSOCIATES INC 3060 Centre Pointe Drive Roseville, MN 55113-1105 651.697.8506 fax 651.697.8506 www.ehlers-inc.com BID TABULATION $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A CITY OF GEM LAKE, MINNESOTA SALE: May 22, 2007 AWARD: NORTHLAND SECURITIES, INC. RATING: Non -Rated BBI: 4.29% NET TRUE NAME OF BIDDER MATURITY RATE REOFFERING PRICE INTEREST INTEREST (February 1) YIELD COST RATE NORTHLAND SECURITIES, INC. 2009* 4.000% 4 000% Minneapolis, Minnesota 2010* 4.000% 4.000% 2011* 4.000% 4.000% 2012* 4.000% 4.000% 2013* 4.000% 4.000% 2014* 4.000% 4.000% 2015* 4.000% 4.000% 2016* 4.000% 4.000% 2017** 4.100% 4.100% 2018** 4100% 4100% 2019*** 4150% 4.150% 2020*** 4.150% 4.150% 2021 **** 4.250% 4.250% 2022**** 4 250% 4.250% 2023***** 4.350% 4 350% 2024***** 4.350% 4.350% 2025****** 4.400% 4.400% 2026****** 4.400% 4.400% 2027******* 4.500% 4.500% 2028******* 4.500% 4.500% *$120,000 Term Bond due 2016 with mandatory redemption in 2009-2015 **$100,000 Term Bond due 2018 with mandatory redemption in 2017 *'$110,000 Term Bond due 2020 with mandatory redemption in 2019 ****$115,000 Term Bond due 2022 with mandatory redemption in 2021 *****$125,000 Term Bond due 2024 with mandatory redemption in 2023 ******$135,000 Term Bond due 2026 with mandatory redemption in 2025 *******$145,000 Term Bond due 2028 with mandatory redemption in 2027 $840,284.50 $526,907.04 4.4227% QjEHLERS & ASSOCIATES INC 3060 Centre Pointe Drive, Roseville, MN 55113 651.697.8500 fax 651.697.8555 www.ehlers-inc.com Offices in Roseville, MN Brookfield, WI and Lisle, IL City of Gem Lake, Minnesota $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007 (Joint Use City Hall Project) -Full Competitive Sale/20 Year Level @ $50K/Year Balloon - Net Debt Service Schedule Fiscal Date Princioal Coupon Interest Total P+I Net New D/S Total 02/01/2008 22,256.54 22,256.54 22,256.54 22,256.54 08/01/2008 - - 18,127.50 18,127.50 18,127.50 - 02/01/2009 15,000.00 4.000% 18,127.50 33,127.50 33,127.50 51,255.00 08/01/2009 - - 17,827.50 17,827.50 17,827.50 02/01/2010 15,000.00 4.000% 17,827.50 32,827.50 32,827.50 50,655.00 08/01/2010 - - 17,527.50 17,527.50 17,527.50 - 02/01/2011 15,000.00 4.000% 17,527.50 32,527.50 32,527.50 50,055.00 08/01/2011 - - 17,227.50 17,227.50 17,227.50 - 02/01/2012 15,000.00 4.000% 17,227.50 32,227.50 32,227.50 49,455.00 08/01/2012 - - 16,927.50 16,927.50 16,927.50 - 02/01/2013 15,000.00 4.000% 16,927.50 31,927.50 31,927.50 48,855.00 08/01/2013 - - 16,627.50 16,627.50 16,627.50 - 02/01/2014 15,000.00 4.000% 16,627.50 31,627.50 31,627.50 48,255.00 08/01/2014 - 16,327.50 16,327.50 16,327.50 02/01/2015 15,000.00 4.000% 16,327.50 31,327.50 31,327.50 47,655.00 08/01/2015 - - 16,027.50 16,027.50 16,027.50 - 02/01/2016 15,000.00 4.000% 16,027.50 31,027.50 31,027.50 47,055.00 08/01/2016 - - 15,727.50 15,727.50 15,727.50 - 02/01/2017 50 000.00 4.100% 15,727.50 65,727.50 65,727.50 81.455.00 08/01/2017 - - 14,702.50 14,702.50 14,702.50 - 02/01/2018 50,000.00 4.100% 14,702.50 64,702.50 64,702.50 79,405.00 08/01/2018 - - 13,677.50 13,677.50 13,677.50 - 02/01/2019 55,000.00 4.150% 13,677.50 68,677.50 68,677.50 82,355.00 08/01/2019 - 12,536.25 12,536.25 12,536.25 02/01/2020 55,000.00 4.150% 12,536.25 67,536.25 67,536.25 80,072.50 08/01/2020 - - 11,395.00 11,395.00 11,395.00 - 02/01/2021 55,000.00 4.250% 11,395.00 66,395.00 66,395.00 77,790.00 O8/01/2021 - - 10,226.25 10,226.25 10,226.25 - 02/01/2022 60 000.00 4.250% 10,226.25 70,226.25 70,226.25 80,452.50 08/01/2022 - - 8,951.25 8,951.25 8,951.25 02/01/2023 60,000.00 4.350% 8,951.25 68,951.25 68,951.25 77,902.50 08/01/2023 - - 7,646.25 7,646.25 7,646.25 - 02/01/2024 65,000.00 4.350% 7,646.25 72,646.25 72,646.25 80,292.50 08/01/2024 - - 6,232.50 6,232.50 6,232.50 - 02/01/2025 65,000.00 4.400% 6,232.50 71,232.50 71,232.50 77,465.00 08/01/2025 - - 4,802.50 4,802.50 4,802.50 - 02/01/2026 70,000.00 4.400% 4,802.50 74,802.50 74,802.50 79,605.00 08/01/2026 - - 3,262.50 3,262.50 3,262.50 - 02/01/2027 7_0,000.00 4.500% 3,262.50 73,262.50 73,262.50 76,525.00 08/01/2027 - 1,687.50 1,687.50 1,687.50 - 02/01/2028 75,000.00 4.500% 1,687.50 76,687.50 76,687.50 78,375.00 Total $850,000.00 - $517,191.54 $1,367,191.54 $1,367,191.54 - ell N - �- — - ---r- — 0 CM m--- ---� --- m m - O m- - - - -- - N. co N - - — —1 - - - - -- 7 - - - --I- -- -- - - - - - - - - m a N--�- -- - - - - - - R C N w- -- . C - -�—�� - -f -- - - _ G O .{- - Q mCo — C O - -- 4-- -- --i --- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N O o0 (O N O LO LO LO 't V 7 A SEH May 11, 2007 Paul Emeott, Mayor City of Gem Lake 4707 Hwy 61 #253 White Bear Lake, MN 55110 Dear Mr. Emeott: RE: City of Gem Lake Engineering Feasibility Studies SEH No. GEMLK0703.00 Short Elliott Hendrickson Inc. (SEH) has developed a plan to provide the City of Gem Lake with the feasibility studies for road access, and water and sewer service. As part of this plan, we will expedite the information you need for the Western Hansen Parcel by May 27, 2007, with the full report — including Eastern Hansen Parcel and Hoffmann Corners — to be completed by June 30, 2007. We have summarized the specific tasks we will be taking for each parcel, project deliverables, an hourly -not -to -exceed fee, additional services that we can provide to the City, and an overview of the staff assigned to your project. Project Deliverables SEH will provide the City of Gem Lake the following items at the noted dates: Project Memo for Western Hansen Parcel — May 27, 2007 Includes a summary for the Western Hansen Parcel of initial findings regarding feasibility of road access, water supply and sewer system, based on two options. With each of the two options, SEH will provide supporting graphics, layouts, and design -and -construction cost estimates. Final Report for Western Hansen Parcel, Eastern Hansen Parcel and Hoffmann Corners —June 30, 2007 Includes final findings regarding feasibility of road access, water supply and sewer system, for all three parcels, based on two options for each parcel, for a total of six options. SEH will provide graphics, layouts, and design -and -construction cost estimates for each option. Based on the options analyses for each parcel, SEH will include a recommended option for each parcel. Project Work Scope Tasks — Road Access Feasibility A. Western Hansen Parcel • Review County Road E access requirements with Ramsey County and determine number of access points for parcel. • Investigate potential for signal at CR E/English Street intersection; use available traffic count data and conduct traffic count on English Street south of CR E. J• Assist with roadway layouts for parcel. Short Elliott Hendrickson Inc., 3535 Vadnais Center Drive, St. Paul, MN 55110-5196 SEH is an equal opportunity employer I www.sehinc.com 1 651.490.2000 1 800.325.2055 1 651.490.2150 fax Paul Emeott, Mayor l May 11, 2007 Page 2 • Provide traffic memo on findings. B. Eastern Hansen Parcel • Review CR E access requirements with Ramsey County and determine number of access points for parcel. • Investigate potential for signal at CR E/International Drive intersection; use available traffic count data and determine expected trip generation for parcel. • Assist with roadway layouts for parcel. Provide advantages/disadvantages of roadway connection between Eastern and Western parcels and revising private driveway that currently divides Eastern and Western parcels. Provide traffic memo on findings. C. Hoffman Corners • Review TH 61 access requirements with Mn/DOT, CR E access requirements with Ramsey County, and possible connection to Hoffman Road with Vadnais Heights. Determine number of access points for parcel. • Determine expected trip generation for parcel. • Assist with roadway layouts for parcel. • Provide traffic memo on findings. Tasks — Water Supply A. Hydrant Flow Testing on Vadnais Heights Water System The City of Vadnais Heights would like Gem Lake to perform hydrant flow testing near the locations identified for development, where connections to the Vadnais Heights water system are anticipated. The information obtained in this process will assist in calibration of the water distribution system model (see Section B below), and will help the City to determine the amount of water that is available for fire protection activities in that area. SEH proposes to conduct two hydrant flow tests, one near County Road E and International Drive, and one near Highway 61 and Wolters Boulevard. This task will require the cooperation of Vadnais Heights City Staff. B. Water Model Calibration Information from the hydrant flow tests performed in Section A will be used to adjust the Vadnais Heights water distribution system model to reflect results obtained in the field. This will improve the accuracy of water system modeling results that will be used to make recommendations for connection locations to serve the proposed developments. C. Water System Scenario Modeling With permission from the City of Vadnais Heights, their water distribution system model will be used to calculate the hydraulic properties of the water system as it is expanded to serve the proposed development areas. The City of Gem Lake will need to request permission in writing from the City of Vadnais Heights to use this model. SEH proposes to model two alternative scenarios for each parcel that is planned for development, and to present the results from these modeling scenarios. Scenarios modeled will examine system pressures, available fire flow rates, and pipe velocities under varying demand conditions on the system. Paul Emeott, Mayor -1 May 11, 2007 Page 3 D. Technical Memorandum of Study Results A memorandum will be presented, which summarizes the results of the model. The memorandum will discuss each proposed development, the alternatives investigated, the results of our investigation, and conclusions. Recommendations will be made for implementation of water system connections, along with cost estimates for design and construction. Tasks — Sanitary Sewer A. Existing Sewer System Information Gather information on the existing systems for both Vadnais Heights and Gem Lake. Review this information to determine the available capacities of the systems. B. Determine required capacities Coordinate with the Comprehensive Plan as to what the proposed land use will be. This will determine the proposed flow from each of the three parcels. This will require meeting with the City's Planning Department to make sure our proposed system coincides with the Comprehensive Plan Update. C. Develop two alternatives for Sewer Service There are different options on how to provide service to these three parcels. This will narrow it down to two for each parcel. Will need to determine if elevations will work for each particular system option. D. Study Results A report will be presented, which summarizes the results of the analysis. The memorandum will discuss each proposed development, the alternatives investigated, the results of our investigation, and conclusions. Recommendations will be made for implementation of sewer system connections, along with cost estimates for design and construction. Tasks — Overall Report Funding Options The final report will provide discussion addressing costs, including developer -paid, joint -municipality - paid, and County -paid funding options. Operation and Maintenance Impacts The final report will outline the affect of each option on your operational and maintenance budget and services to provide the City with a longer -term view of "real" costs. Fee for Services SEH proposes an hourly -not -to -exceed -fee of $18,004.00 for this project based on the services outlined above. We have attached a supplemental spreadsheet demonstrating hours and rates for each parcel. Please note that this fee does not include cost for the Vadnais Heights City Engineer's involvement. SEH can include him on an hourly basis or he can bill the City of Vadnais Heights, who would then bill the City of Gem Lake separately. Additional Services Public meetings are not included in our proposed scope and fee for this project, but SEH can provide you a variety of public meeting and outreach support services for an additional, negotiated fee. Paul Emeott, Mayor May 11, 2001 Page 4 Personnel Justin Gese, PE, is a professional engineer with eight years of experience in a variety of municipal engineering projects from the feasibility stages through construction completion. Project scopes include site design, new roadway construction, existing street reconstruction, stormwater collection systems, sanitary sewer systems, water distribution systems, traffic signal systems, and site and roadway grading. Justin is responsible for project management, feasibility study development, preliminary and final design, cost estimating, preparing plans and specifications. George Calebaugh, PE, PTOE, has more than 30 years of experience in traffic engineering and transportation planning. George has managed and worked on a wide variety of projects including traffic impact studies for developments and transportation facilities, comprehensive transportation plans, traffic access and circulation analyses, traffic signal and traffic control plan design, traffic safety and research studies, traffic operations analyses, and parking studies. John Chlebeck is a project engineer with two years of experience in SEH's Water Services Department. The emphasis of his experience has been with water comprehensive planning studies and water distribution system computer modeling. John is proficient in the use of several computer modeling software packages, included WaterCAD, H2O", and InfoWater. Planning experience has also included the development of water system capital improvement plans, utility rate studies, wellhead protection plans, and emergency and conservation plans. This project would be especially exciting for us to help bring to a successful conclusion because of our knowledge of the community. We have established excellent working relationships with your staff, the staff of neighboring communities and with the County. We are confident that we can support your needs in a timely and effective manner. 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LL O H CITY OF GEM LAKE 4707 Hwy 61 # 253 _ White Bear Lake, MN 55110-3227 Telephone 651-747-2790 City Council Workshop May 7, 2007 The following people attended this City Council workshop which started at 7:10 PM:: Paul Emeott, Chuck Watson, Gretchen Artig-Swomley, Craig Rafferty, Jim Lindner Kim Anderson, Bryan Hansen 1) This workshop reviewed the existing 1997 City of Gem Lake Comprehensive Plan and then looked at what our planning consultant suggested as updated wording and data for Section 3 & 4. A lot of discussion was done on what population numbers to use in the up -dated plan, as there are big conflicts between what the city thinks we now have for residents and what the Metro Council is forecasting. These numbers are important, so we will strive to find a number that all can agree on.. A lively session was then held on suggested wording for Section 5 — Land use goals and Policies, of the up -dated 2008 City of Gem Lake Comprehensive plan. This section is the area where our planner has said that the City has to provide most of the text changes and ideas. A lot more work is needed to get more in agreement on what our policies might be. We also looked at what is currently in Section 6 — Transportation Plan, but decided that most of this section can be updated by our planner. Section 7 is the Sanitary Sewer Section and the engineers at SEH are currently finishing our policies and system design features for this section. 2) The need for an Animal Control Policy for the city was brought up. As no one had any ideas on this matter, the Mayor will write the policy and put it on the City website. 3) The need for an updated "Capital Improvement Plan (budget) was mentioned, but no suggestions or work was done on it. All of these subjects will have further discussion at future City Council Workshops. Meeting ajorned at 9:25 PM Notes by Paul Emeott 5/7/07 In the opinion of Bond Counsel, the interest on the Bonds is exempt from taxation by the Stale of Minnesota and its subdivisions and municipalities and the interest to be paid on the Bonds is not includible in the gross income of the recipient for United States or State of Minnesota income lax purposes (but is subject to federal alternative minimum taxes on corporations and Minnesota franchise taxes imposed on corporations, including financial institutions, and measured by net income and the alternative minimum tax base) according to present federal and Minnesota laws, regulations, rulings and decisions. (See "Tax Exemption" herein) City will designate the Bonds as "qualified tax-exempt obligations "forpurposes of Section 265(b)(3) of the Internal Revenue Code of 1986. as amended, relating to the ability offnancial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. New Issue Non -Rated PRELIMINARY OFFICIAL STATEMENT DATED MAY 11, 2007 CITY OF GEM LAKE, MINNESOTA $850,000* GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2007A PROPOSAL OPENING: May 22, 2007, 10:00 A.M., C.T. CONSIDERATION: May 22, 2007, 7:00 P.M., C.T. PURPOSE/AUTHORITY/SECURITY: The $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A (the "Bonds") are being issued by the City of Gem Lake, Minnesota (the "City") pursuant to Minnesota Statutes, Section 475.521 and Chapter 475, for the purpose of financing the 2007 capital expenditure of approximately $1,225,500 for the Joint Use City Hall Building described in the City's 5-Year Capital Improvement Plan dated February 20, 2007. The Bonds are general obligations of the City, for which its full faith, credit and taxing powers are pledged. Delivery is subject to receipt of an approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota. DATE OF BONDS: June 20, 2007 MATURITY: February 1 as follows: Year Amount* Year Amount* Year Amount* 2009 $15,000 2016 $15,000 2023 $60,000 2010 15,000 2017 50,000 2024 65,000 2011 15,000 2018 50,000 2025 65,000 2012 15,000 2019 55,000 2026 70,000 2013 15,000 2020 55,000 2027 70,000 2014 15,000 2021 55,000 2028 75,000 2015 15,000 2022 60,000 MATURITY ADJUSTMENTS: * The City reserves the right to increase or decrease the principal amount of the Bonds on the day of sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted to maintain the same gross spread per $1,000. TERM BONDS: See "Term Bond Option" herein. INTEREST: February 1, 2008 and semiannually thereafter. OPTIONAL REDEMPTION: Bonds maturing February 1, 2017 and thereafter are subject to call for prior redemption on February 1, 2016 and any date thereafter, at par. MINIMUM PROPOSAL: $837,250. GOOD FAITH DEPOSIT: $17,000. PAYING AGENT: Bond Trust Services Corporation, Roseville, Minnesota. BOOK -ENTRY -ONLY: See "Book -Entry -Only System" herein. This Preliminary Official Statement will be further supplemented by an addendum specifying the offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate Members, together with any other information required by law, and, as supplemented, shall constitute a "Final Official Statement" of the City with respect to the Bonds, �iefined in S.E.C. Rule 15c2-12. EHLERS & ASSOCIATES INC 3060 Centre Pointe Drive, Roseville, MN 55113 651.697.8500 fax 651.697.8555 www.ehlers-inc.com Offices in Roseville, MN Brookfield, WI and Lisle, IL TABLE OF CONTENTS INTRODUCTORY STATEMENT I THE BONDS ......... . .................... 1 GENERAL ............................. ... .. 1 OPTIONAL REDEMPTION .... . ............... . 1 AUTHORITY; PURPOSE ........................ 2 ESTIMATED SOURCES AND USES .......... ... 2 SECURITY ................................... 2 RATING...................................... 3 CONTINUING DISCLOSURE .................... 3 LEGAL OPINION ............. . ................ 3 TAX EXEMPTION ...... . . . ....... . ............ 3 QUALIFIED TAX-EXEMPT OBLIGATIONS ...... . 4 FINANCIAL ADVISOR ......................... 4 RISK FACTORS ............... . .......... .. 5 VALUATIONS .. .................................. 7 CURRENT PROPERTY VALUATIONS ............ 8 2006/07 NET TAX CAPACITY BY CLASSIFICATION 9 TREND OF VALUATIONS ...................... 9 LARGER TAXPAYERS .......... . .... . ........ 10 DEBT........................................... I DIRECT DEBT ................ . .............. 11 DEBT LIMIT ................................. 11 SCHEDULES OF BONDED INDEBTEDNESS ...... 12 OVERLAPPING DEBT ....... . ................. 14 DEBT RATIOS ............................... 15 DEBT PAYMENT HISTORY ........ . ... . ....... 15 FUTURE FINANCING ... . .......... . . ......... 15 TAX LEVIES AND COLLECTIONS .................. 16 TAX COLLECTIONS .......................... 16 TAX CAPACITY RATES ... . ................... 16 THE ISSUER ..................................... 17 CITY GOVERNMENT ......................... 17 LITIGATION ................................. 17 FUNDS ON HAND ............................ 17 GENERAL INFORMATION .......... . .............. 18 LOCATION .................................. 18 LARGER EMPLOYERS ........................ 18 U.S. CENSUS DATA ................ . .......... 19 EMPLOYMENT/UNEMPLOYMENT DATA ....... 19 FINANCIAL INSTITUTIONS . ......... . ......... 20 EDUCATION ....... . .......... . . . ............ 20 IN -PATIENT MEDICAL FACILITIES ............. 20 FORM OF LEGAL OPINION . . .................... . A-1 BOOK -ENTRY -ONLY SYSTEM .................... B-1 FORM OF CONTINUING DISCLOSURE CERTIFICATE CA TERMS OF PROPOSAL .... . ...................... D-1 om INTRODUCTORY STATEMENT This Preliminary Official Statement contains certain information regarding the City of Gem Lake, Minnesota (the "City") and the issuance of its $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A (the "Bonds"). Any descriptions or summaries of the Bonds, statutes, or documents included herein are not intended to be complete and are qualified in their entirety by reference to such statutes and documents and the form of the Bonds to be included in the resolution awarding the sale of the Bonds to be adopted by the City Council on May 22, 2007. Inquiries may be directed to Ehlers & Associates, Inc. ("Ehlers" or the "Financial Advisor"), Roseville, Minnesota, (651) 697-8500, the City's Financial Advisor. A copy of this Preliminary Official Statement may be downloaded from Ehlers' web site at www.ehlers-inc.com by connecting to the link to the Bond Sales and following the directions at the top of the site. THE BONDS GENERAL The Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 each or any integral multiple thereof, and will be dated, as originally issued, as of June 20, 2007. The Bonds will mature on February 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interest will be payable on February 1 and August 1 of each year, commencing February 1, 2008, to the registered owners of the Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year of twelve 30- day months and will be rounded pursuant to rules of the MSRB. All Bonds of the same maturity will bear interest from date of issue until paid at a single, uniform rate. The Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). (See "Book -Entry -Only System" herein.) As long as the Bonds are held under the book -entry system, beneficial ownership interests in the Bonds may be acquired in book -entry form only, and all payments of principal of, premium, if any, and interest on the Bonds shall be made through the facilities of DTC and its Participants. If the book -entry system is terminated, principal of, premium, if any, and interest on the Bonds shall be payable as provided in the resolution awarding the sale of the Bonds. The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "Paying Agent"). The City will pay the charges for Paying Agent services. The City reserves the right to remove the Paying Agent and to appoint a successor. OPTIONAL REDEMPTION At the option of the City, Bonds maturing on or after February 1, 2017 shall be subject to prior payment on February 1, 2016 or any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Bonds to be prepaid shall be at the discretion of the City. If only part of the Bonds having a common maturity date are called for prepayment, the City or Paying Agent, if any, will notify DTC RATING None of the outstanding indebtedness of the City is currently rated, and the City has not requested a rating on this issue. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934 (the "Rule"), the City shall covenant pursuant to a Resolution adopted by the Governing Body to enter into an undertaking (the "Undertaking") for the benefit of holders of the Bonds to provide certain financial information and operating data relating to the City upon request, and to provide notices of the occurrence of certain events enumerated in the Rule to certain information repositories or the Municipal Securities Rulemaking Board and to any state information depository. The details and terms of the Undertaking, as well as the information to be contained in any requested report or the notices of material events and the name, address and telephone number of the person to contact to request a report, are set forth in the Continuing Disclosure Certificate to be executed and delivered by the City at the time the Bonds are delivered. Such Certificate will be in substantially the form attached hereto as Appendix D. The City has never failed to comply in all material respects with any previous undertakings under the Rule to provide requested reports or notices of material events. A failure by the City to comply with the Undertaking will not constitute an event of default on the Bonds (although holders will have any available remedy at law or in equity). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. LEGAL OPINION An opinion as to the validity of the Bonds and the exemption from taxation of the interest thereon will be furnished by Kennedy & Graven, Chartered, Minneapolis, Minnesota, bond counsel to the City, and will accompany the Bonds. The legal opinion will state that the Bonds are valid and binding general obligations of the City enforceable in accordance with their terms, except to the extent to which enforceability may be limited by Minnesota or United States laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally. TAX EXEMPTION In the opinion of Bond Counsel, under existing statutes, regulations, rulings and decisions, interest on the Bonds is not includible in the "gross income" of the owners thereof for purposes of federal income taxation and is not includable in taxable net income of individuals, estates or trusts for purposes of State of Minnesota income taxation, but is subject to State of Minnesota franchise taxes measured by income that are imposed upon corporations, including financial institutions. Noncompliance following the issuance of the Bonds with certain requirements of the Internal Revenue Code of 1986, as amended, (the "Code") and covenants of the bond resolution may result in the inclusion of interest on the Bonds in gross income (for federal tax purposes) and taxable net income (for State of Minnesota tax purposes) of the owners thereof. No provision has been made for redemption of the Bonds, or for an increase in the interest rate on the Bonds, in the event that interest on the Bonds becomes subject to United States or State of Minnesota income taxation. RISK FACTORS Following is a description of possible risks to holders of these Bonds without weighting as to probability. This description of risks is not intended to be all-inclusive, and there may be other risks not now perceived or listed here. Taxes: The Bonds of this offering are general obligations of the City, the ultimate payment of which rests in the City's ability to levy and collect sufficient taxes to pay debt service. State Actions: Many elements of local government finance, including the issuance of debt and the levy of property taxes, are controlled by state government. Past and future actions of the State may affect the overall financial condition of the City, the taxable value of property within the City, and the ability of the City to levy property taxes. Interest Rates: In the future, interest rates for this type of obligation may rise generally, possibly resulting in a reduction in the value of the Bonds for resale prior to maturity. Tax Exemption: If the federal government or the State of Minnesota taxes the interest on municipal obligations, directly or indirectly, or if there is a change in federal or state tax policy, the value of the Bonds may fall for purposes of resale. Noncompliance following the issuance of the Bonds with certain requirements of the Code and covenants of the bond resolution may result in the inclusion of interest on the Bonds in gross income of the recipient for United States or in taxable net income of individuals, estates or trusts for State of Minnesota income tax purposes. No provision has been made for redemption of the Bonds, or for an increase in the interest rate on the Bonds, in the event that interest on the Bonds becomes subject to United States or State of Minnesota income taxation, retroactive to the date of issuance. The 1995 Minnesota Legislature enacted a statement of intent that interest on obligations of Minnesota governmental units and Indian tribes be included in net income of individuals, estates and trusts for Minnesota income tax purposes if a court determines that Minnesota's exemption of such interest unlawfully discriminates against interstate commerce because interest on obligations of governmental issuers located in other states is so included. This provision applies to taxable years that begin during or after the calendar year in which any such court decision becomes final, irrespective of the date on which the obligations were issued. The City is not aware of any judicial decision holding that a state's exemption of interest on its own bonds or those of its political subdivisions or Indian tribes, but not of interest on the bonds of other states or their political subdivisions or Indian tribes, unlawfully discriminates against interstate commerce or otherwise contravenes the United States Constitution. Nevertheless, the City cannot predict the likelihood that interest on the Bonds would become taxable under this Minnesota statutory provision. Continuing Disclosure: A failure by the City to comply with the Undertaking for continuing disclosure (as described herein) will not constitute an event of default on the Bonds. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer, or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. State Economy; State Aids: State cash flow problems could affect local governments and possibly increase property taxes. VALUATIONS OVERVIEW All non-exempt property is subject to taxation by local taxing districts. Exempt real property includes Indian lands, public property, and educational, religious and charitable institutions. Most personal property is exempt from taxation (except investor -owned utility mains, generating plants, etc.). The valuation of property in Minnesota consists of two elements. (1) The estimated market value is set by city or county assessors. Not less than 20% of all real properties are to be appraised by local assessors each year. (2) The tax capacity (taxable) value of property is determined by class rates set by the State Legislature. The tax capacity rate varies according to the classification of the property. Tax capacity represents a percent of estimated market value. The property tax rate for a local taxing jurisdiction is determined by dividing the total tax capacity or market value of property within the jurisdiction into the dollars to be raised from the levy. State law determines whether a levy is spread on tax capacity or market value. Major classifications and the percentages by which tax capacity is determined are: Type of Property Residential homestead' Agricultural homestead' Agricultural non -homestead 2004/05 First $500,000 - 1.00% Over $500,000 - 1.25% First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $600,000 - 0.55%' Over $600,000 - 1.00% z Land - 1.00% z Seasonal recreational residentiaJ2 First $500,000 - 1.00%" Over $500,000 - 125% a Residential non -homestead: Industri al/Commerci al/Utility' 1 unit - 1 st $500,000 - 1.00% Over $500,000 - 1.25% 2-3 units - 1.25% 4 or more - 1.25% Small Citys - 1.25% First $150,000 - 1.50% Over $150,000 - 2.00% 2005/06 First $500,000 - 1.00% Over $500,000 - 1.25% First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $600,000 - 0.55% z Over $600,000 - 1.00% 2 Land - 1.00% z First $500,000 - 1.00% ° Over $500,000 - 1.25% " 1 unit - I st $500,000 - 1.00% Over $500,000 - 1.25% 2-3 units - 1.25% 4 or more - 1.25% Small City' - 125% First $150,000 - 1.50% Over $150,000 - 2.00% 2006/07 First $500,000 - 1.00% Over $500,000 - 1.25% First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $690,000 - 0.55% z Over $690,000 - 1.00% z Land - 1.00% z First $500,000 - 1.00% ° Over $500,000 - 1.25% a 1 unit - 1 st $500,000 - 1.00% Over $500,000 - 1.25% 2-3 units - 1.25% 4 or more - 1.25% Small City'- 1.25% First $150,000 - 1.50% Over $150,000 - 2.00% A residential property qualifies as "homestead" if it is occupied by the owner or a relative of the owner on the assessment date. 2 For seasonal recreational residential property, the class rate percentages for the new statewide general tax beginning with taxes payable in 2002 are: First $76,000 - 0.4%, next $424,000 - I.0%, and over $500,000 - 1.25%. 3 The estimated market value of utility property is determined by the Minnesota Department of Revenue. 2006/07 NET TAX CAPACITY BY CLASSIFICATION 2006/07 Percent of Total Net Tax Capacity Net Tax Capacity Residential homestead $ 604,621 53.29% Agricultural 18,916 1.67% Commercial/industrial 339,891 29.96% Non -homestead residential 149,677 13.19% Commercial & residential seasonal/rec. 10,842 0.96% Personal property 10,548 0.93% Total $1,134,495 100.00% TREND OF VALUATIONS Adjusted Assessor's Taxable Levy Taxable Net Tax Net Tax Percent +/- in Assessor's Year Market Value Capacity' Capacity' Taxable Market Value 2002/03 $49,738,900 $629,005 $569,076 + 13.16% 2003/04 59,889,600 765,835 697,592 + 20.41% 2004/05 68,698,000 864,201 768,394 + 14.71% 2005/06 78,235,400 966,457 885,142 + 13.88% 2006/07 91,266,800 1,134,495 1,047,894 + 16.66% Net Tax Capacity is before fiscal disparities adjustments. ' Adjusted Taxable Net Tax Capacity is after fiscal disparities adjustments. 9 DEBT DIRECT DEBT' General Obligation Debt (see schedules following) Total g.o. debt being paid from taxes (the Bonds of this offering) $ 850,000 Total g.o. debt being paid from special assessments 781,587 Total General Obligation Debt $1,631,587 DEBT LIMIT The statutory limit on debt of Minnesota municipalities other than school districts or cities of the first class (Minnesota Statutes, Section 475.53, subd. 1) is 2% of the Assessor's Taxable Market Value of all taxable property within its boundaries. "Net debt" (Minnesota Statutes, Section 475.51, subd. 4) is the amount remaining after deducting from gross debt: (1) obligations payable wholly or partly from special assessments levied against benefitted property; (2) warrants or orders having no definite or fixed maturity; (3) obligations issued to finance any public revenue producing convenience; (4) obligations issued to create or maintain a permanent improvement revolving fund; (5) funds held as sinking funds for payment of principal and interest on debt other than those deductible under 1-4 above; (6) other obligations which are not to be included in computing the net debt of a municipality under the provisions of the law authorizing their issuance. Assessor's Taxable Market Value Multiply by 2% Statutory Debt Limit $91,266,800 0.02 $ 1,825,336 Less: Long -Term Debt Outstanding Being Paid Solely from Taxes (the Bonds of this offering) (850,000) Unused Debt Limit $ 975,336 Outstanding debt is as of the dated date of the Bonds. 11 �C 0 0 0 0 0 0 0 0 0 0 0 () C N N N N N N N N N N N NW LL o C 0 C 0 0 C 0 0 0 0 •L 04 W w N w M (O m CO C)t1 N V (r r M M (O O w O V (O (D I- w O) O (0 m m CDr (O m m 0 0 CD 0. C m w m ((') � N m w (D'V .0 O) OD m m C71 (D O C C (p m C, m C) V n C-- V O m (O w O m N CD Ih w m m d y r (D (O (n V Cl) N O O cc) V w N O w m (D (O V O F a (O ti ccC C m C), Octt` N O r O O OJ (A m r• C) 0 w P- C) N V O CA (A O O O O) CY) (D m V � (n .D.. O V m V w m 0 w Ih I-- V O m r OC n L(') N O N (O CO C N N N fD l0 f0 V n (D m to N O N O O t- y0 Q O OL�2 t` (O (O w w O w U M N N V r O V M O Cn C (O N V (O CO (O r O N V O N r r r w OD w CA m (D m IL n wU-)(nwwmwmwww O C m O V OD V (D W m V N N m V M N (n (D N cr N E y ate+ C u) O M w I` M LO V M �- CO m r_ N tU E co OO N 0 o N LOT o Q O N _ (6 O O O O O O O O O O O O 26 L fl. w CA V) Q 'V C) O CD C) C) C) C) O CD O 0 0 0 0 0 0 0 0 0 0 CD69 O ( j E C O O O (O (O (O (O CC) O O (O N N N N N N N N N M M V Q O N co C C L LL y I` co m m co O m C) N V : co - O W O v v V o) O) L (VD mww�"or-U)m 0)W (p (D a C .o d Z(Da E oo 2 m > mo (D co as -� ++ O L w (O p _ (0 a V ti CD m (D N O N O m C) to r- I` (O U) w w w W >✓ a) Q m N V M N N V O V (D w Y Q E C m Ni (D w O N (O r v (O Q = d N (O (O M (O w w co CD m C0 J o 0 C } o (6 W m LL N o N .0 C a16i rn O 7 m 7 •� C_ I-- CO MCD, Co N M V (O to r,(O W E w O C. O CD O O O Co Co C) O O t r C N N N N N N N N N N N 1"' to U En C7 Q to W iL 13 E co 0) w rn Q U N O_ co U u I U c v� m •U O CD Cn Q C m a� W a N co a (D a DEBT RATIOS Debt/Estimated Full Value of Debt/442 Taxable Property Estimated G.O. Debt ($110,781,835) Population Direct G.O. Debt Being Paid From: Taxes $ 850,000 Special Assessments 781,587 Total General Obligation Debt $1,631,587 Less: Funds on Hand' (165,579) Net General Obligation Debt $1,466,008 1.32% $3,316.76 City's Share of Total Overlapping Debt $1,319,286 1.19% $2,984.81 DEBT PAYMENT HISTORY The City has never defaulted in the payment of principal and interest on its debt. FUTURE FINANCING The City reports no plans for additional financing in the next three months. ' Funds on hand for debt redemption (available for payment of principal and interest) have been deducted from total general obligation debt to determine net general obligation debt. 15 THEISSUER CITY GOVERNMENT The City of Gem Lake was organized as a municipality in 1959. The City operates under a statutory form of government consisting of a five -member City Council of which the Mayor is a voting member. The City Clerk and City Treasurer are responsible for administrative details and financial records. LITIGATION There is no litigation threatened or pending questioning the organization or boundaries of the City or the right of any of its officers to their respective offices or in any manner questioning their rights and power to execute and deliver these Bonds or otherwise questioning the validity of these Bonds. LEVY LIMITS The State Legislature has periodically imposed limitations on the ability of municipalities to levy property taxes. In 2001, the Legislature imposed levy limits for all counties and all cities over 2,500 population. These limitations have not applied to taxes levied to pay debt service. While these limitations have expired, the potential exists for future legislation to limit the ability of local governments to levy property taxes. For more detailed information about Minnesota levy limits, contact the Minnesota Department of Revenue or Ehlers & Associates. FUNDS ON HAND (As of April 12, 2007) Total Cash Fund and Investments General $ 70,546 Special Revenue 32,790 Debt Service 165,579 Capital Projects 46,299 Enterprise Funds 111,277 Total Funds on Hand $426,491 17 U.S. CENSUS DATA Population Trend: City of Gem Lake, Minnesota 1990 U.S. Census 439 2000 U.S. Census 419 Current State Demographer's Estimate 442 Percent of Change 1990 - 2000 -4.56% Income and Age Statistics 1999 per capita income 1999 median household income 1999 median family income 2000 median gross rent 2000 median value owner occupied housing 2000 median age Housing Statistics All Housing Units City of Ramsey State of Gem Lake County Minnesota $28,750 $23,536 $23,198 $64,167 $45,722 $47,111 $82,909 $57,747 $56,874 $813 $606 $566 $159,600 $126,400 $122,400 37.5 yrs. 33.7 yrs. 35.4 yrs. City of Gem Lake 1990 2000 140 143 Source: 1990 and 2000 Census of Population and Housing. EMPLOYMENT/UNEMPLOYMENT DATA Rates are not compiled for individual communities within counties. AveraLn Emnlovment Year Ramsey County 2003 270,983 2004 268,601 2005 271,553 2006 265,911 2007, February 262,038 Percent of Change 2.14% Average Unemployment Ramsey County State of Minnesota 4.9% 4.8% 4.7% 4.6% 4.0% 4.1% 3.8% 4.0% 4.3% 5.1% Source: Minnesota Department of Employment and Economic Development. 19 _J APPENDIX A FORM OF LEGAL OPINION ' Kennedy a 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis MN 55402 Graven (612) 337-9300 telephone (612) 337-9310 fax http://www.kennedy-graven.com CHARTERED General Obligation Capital Improvement Plan Bonds, Series 2007A City of Gem Lake Ramsey County, Minnesota We have acted as bond counsel to the City of Gem Lake (the "Issuer") in connection with the issuance by the Issuer of its General Obligation Capital Improvement Plan Bonds, Series 2007A, (the "Bonds"), originally dated as of June 20, 2007, and issued in the original aggregate principal amount of $ In such capacity and for the purpose of rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents, and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied on certified proceedings and other certifications of public officials and other documents furnished to us without undertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that: 1. The Bonds have been duly authorized and executed, and are valid and binding general obligations of the Issuer, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable primarily from ad valorem taxes levied by the Issuer, but if necessary for the payment thereof additional ad valorem taxes are required by law to be levied on all taxable property of the Issuer, which taxes are not subject to any limitation as to rate or amount. 3. Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes and, to the same extent, is excludable from taxable net income of individuals, trusts, and estates for Minnesota income tax purposes, and is not a preference item for purposes of the computation of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income and the alternative minimum tax base. The opinion set forth in this paragraph is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal and Minnesota income tax A-1 APPENDIX B BOOK -ENTRY -ONLY SYSTEM 1. The Depository Trust Company ("DTC'), New York, New York, will act as securities depository for the securities (the "Securities'). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Security certificate will be issued for each maturity of the Securities, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ( "Direct Participants') deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC'). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members ofthe National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants'). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtc.org. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner') is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. APPENDIX C FORM OF CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Gem Lake, Ramsey County, Minnesota (the "City") in connection with the issuance by the City of $ General Obligation Capital Improvement Plan Bonds, Series 2007A (the `Bonds"). The Bonds are being issued pursuant to a Resolution adopted by the City Council of the City on May 22, 2007, and the Bonds will be delivered to the Purchaser(s) on the date hereof. The City hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Owners of the Bonds in order to assist the Participating Underwriters within the meaning of SEC Rule 15c2-12(b)(5) (the "Rule") in complying with the Rule. This Disclosure Certificate constitutes the written Undertaking required by the Rule. Section 2. Definitions. In addition to the defined terms set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Audited Financial Statements" means the financial statements of the City, audited annually by an independent certified public accounting firm, and prepared in accordance with generally accepted accounting principles ("GAAP") for Governmental Units as Prescribed by the Governmental Accounting Standards Board ("GASB") or as otherwise required by Minnesota law for the preceding Fiscal Year, including a balance sheet and statement of revenues, expenditures and changes in fund balances. "City" means the City of Gem Lake, Ramsey County, Minnesota, which is the obligated person with respect to the Bonds. "Fiscal Year" means the fiscal year of the City. "Material Event" means any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600, Alexandria, VA 22314. "NRMSIR" means any nationally recognized municipal securities information repository as recognized from time to time by the SEC for purposes of the Rule. "Owner" means the person in whose name a Bond is registered or a beneficial owner of such a Bond. "Participating Underwriter" means any of the original underwriter(s) of the Bonds (including the Purchaser(s)) required to comply with the Rule in connection with the offering of the Bonds. "Repository" means each NRMSIR and each SID, if any. "Requested Report" means any requested report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. C-1 8. Bond calls; 9. Defeasances; 10. Release, substitution or sale of property securing repayment of the securities; and 11. Rating changes. (b) Whenever a Material Event occurs, the City shall promptly file a notice of such occurrence with either all NRMSIRs or with the MSRB and with any SID. Notwithstanding the foregoing, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Owners of affected Bonds pursuant to the Resolution. (c) Unless otherwise required by law and subject to technical and economic feasibility, the City shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the City's information. Section 6. Termination of Reporting Obligation. The City's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all the Bonds. Section 7. Agent. The City may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 8. Amendment; Waiver. Notwithstanding any other provision ofthis Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate maybe waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, if and of itself, cause the undertakings to violate the Rule. This Disclosure Certificate, or any provision hereof, shall be null and void in the event that the City delivers to each then existing NRMSIR and the SID, if any, an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of this Disclosure Certificate may be amended without the consent of the Owners of the Bonds, but only upon the delivery by the City to each then existing NRMSIR and the SID, if any, of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance of this Disclosure Certificate and by the City with the Rule. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Requested Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Requested Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Requested Report or notice of occurrence of a Material Event. Section 10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate any Owner of the Bonds may take such actions as may be necessary and appropriate, including seeldng mandamus or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance. C-3 i J APPENDIX D TERMS OF PROPOSAL $850,000* GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2007A CITY OF GEM LAKE, MINNESOTA Proposals for the purchase of $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A (the "Bonds") of the City of Gem Lake, Minnesota (the "City") will be received at the offices of Ehlers & Associates, Inc. ("Ehlers"), 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, Financial Advisors to the City, until 10:00 A.M., Central Time, and ELECTRONIC PROPOSALS will be received via PARITY, in the manner described below, until 10:00 A.M. Central Time, on May 22, 2007, at which time they will be opened, read and tabulated. The proposals will be presented to the City Council for consideration for award at a meeting to be held at 7:00 P.M., Central Time, on the same date. The proposal offering to purchase the Bonds upon the terms specified herein and most favorable to the City will be accepted unless all proposals are rejected. PURPOSE The Bonds are being issued by the City pursuant to Minnesota Statutes, Section 475.521 and Chapter 475, for the purpose of financing the 2007 capital expenditure of approximately $1,225,500 for the Joint Use City Hall Building described in the City's 5-Year Capital Improvement Plan dated February 20, 2007. The Bonds are general obligations of the City, for which its full faith, credit and taxing powers are pledged. DATES AND MATURITIES The Bonds will be dated June 20, 2007, will be issued as fully registered Bonds in the denomination of $5,000 each, or any integral multiple thereof, and will mature on February 1 as follows: Year Amount* Year Amount* Year Amount* 2009 $15,000 2016 $15,000 2023 $60,000 2010 15,000 2017 50,000 2024 65,000 2011 15,000 2018 50,000 2025 65,000 2012 15,000 2019 55,000 2026 70,000 2013 15,000 2020 55,000 2027 70,000 2014 15,000 2021 55,000 2028 75,000 2015 15,000 2022 60,000 ADJUSTMENT OPTION * The City reserves the right to increase or decrease the principal amount of the Bonds on the day of sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted to maintain the same gross spread per $1,000. D-1 DELIVERY On or about June 20, 2007, the Bonds will be delivered without cost to the original purchaser at DTC. On the day of closing, the City will furnish to the purchaser the opinion of bond counsel hereinafter described, an arbitrage certification and certificates verifying that no litigation in any manner questioning the validity of the Bonds is then pending or, to the best knowledge of officers of the City, threatened. Payment for the Bonds must be received by the City at its designated depository on the date of closing in immediately available funds. LEGAL OPINION An opinion as to the validity of the Bonds and the exemption from taxation of the interest thereon will be furnished by Kennedy & Graven, Chartered, Minneapolis, Minnesota, bond counsel to the City, and will accompany the Bonds. The legal opinion will state that the Bonds are valid and binding general obligations of the City enforceable in accordance with their terms, except to the extent to which enforceability may be limited by Minnesota or United States laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally. SUBMISSION OF PROPOSALS Proposals must not be for less than $837,250 plus accrued interest on the principal sum of $850,000 from date of original issue of the Bonds to date of delivery. A signed proposal form must be submitted to Ehlers prior to the time established above for the opening of proposals as follows: 1) In a sealed envelope as described herein; or ) 2) A facsimile submission to Ehlers, Facsimile Number (651) 697-8555; or 3) Electronically via PARITY in accordance with this Terms of Proposal until 10:00 A.M. Central Time, but no proposal will be received after the time for receiving proposals specified above. To the extent any instructions or directions set forth in PARITY conflict with this Terms of Proposal, the terms of this Terms of Proposal shall control. For further information about PARITY, potential bidders may contact Ehlers or i-Deal LLC at 1359 Broadway, 2°d Floor, New York, New York 10018, Telephone (212) 849-5021. Proposals must be submitted to Ehlers via one of the methods described above and must be received prior to the time established above for the opening of proposals. Each proposal must be unconditional except as to legality. Neither the City nor Ehlers shall be responsible for any failure to receive a facsimile submission. A good faith deposit (the "Deposit") in the amount of $17,000, complying with the provisions below, must be submitted with each proposal. The Deposit must be in the form of a certified or cashier's check, or a financial surety bond or a wire transfer of funds to U. S. Trust Company, N.A., Greenwich, Connecticut, ABA No. 0210-01318 for further credit to Ehlers, Bond Issue Escrow Account No. 850-788-1. The Deposit will be retained by the City as liquidated damages if the proposal is accepted and the bidder fails to comply therewith. The Deposit will be returned to the Purchaser at the closing for the Bonds. The Deposit, payable to the City, shall be retained in the offices of Ehlers with the same effect as if delivered to the City. Alternatively, bidders may wire the Deposit to U. S. Trust Company, N.A., Greenwich, Connecticut, ABA No. 0210-01318 for credit to Ehlers Bond Issue Escrow Account, No. 850-788-1. The City and any bidder who chooses to so wire the Deposit hereby agree irrevocably that Ehlers shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: 1) All income earned thereon shall be retained by the escrow holder as payment for its expenses; 2) If the proposal is not accepted, Ehlers shall, at its expense, promptly return the Deposit amount to the losing bidder; 3) If the proposal is accepted, the Deposit shall be returned to the purchaser D-3 Extract of Minutes of Meeting of the City Council of the City of Gem Lake, Ramsey County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Gem Lake, Minnesota, was duly held in the City Hall in said City on Tuesday, May 22, 2007, commencing at 7:00 P.M. The following members were present: and the following were absent: 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 approximately $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A. The City Clerk presented a tabulation of the proposals that have been received in the manner specified in the Terms of Proposal for the Bonds. The proposals are as set forth in Exhibit A attached. After due consideration of the proposal, Member then introduced the following resolution, and moved its adoption: RESOLUTION NO. al7-1 ` A RESOLUTION AWARDING THE SALE OF $ GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2007A FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT 310976v1 NMI GE190-4 Section 2. Sale of Bond. 2.01. Award to the Purchaser and Interest Rates. The proposal of (the "Purchaser") to purchase the Bonds of the City described in the Terms of Proposal thereof is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $_ _ plus accrued interest to date of delivery, for Bonds bearing interest as follows: Year Interest Rate 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Year Interest Rate 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2.02. Purchase Contract. The sum of $ being the amount proposed by the Purchaser in excess of $ shall be credited to the Debt Service Fund hereinafter created, or deposited in the Construction Fund under Section 5.01 hereof, as determined by the City's financial advisor. The City Treasurer is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Clerk are directed to execute a contract with the Purchaser on behalf of the City. 2.03. Terms and Principal Amounts of Bonds. The City will forthwith issue and sell the Bonds pursuant to the (the "Act") to the Purchaser in the total principal amount of $ . The Bonds will be originally dated as of June 20, 2007 in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1 upward, bearing interest as above set forth and maturing serially on February 1 in the years and amounts as follows: 310976v1 MNI GE190-4 3 (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 of the Bond entitled to be registered or transferred. (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, a new Bond of a like principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. The Bond surrendered upon transfer will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name 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 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 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. (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 310976v1 MNI GE190-4 5 need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Clerk 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. 3.06. Temporary Bond. The City may elect to deliver in lieu of a printed definitive Bond a typewritten temporary Bond in substantially the form set forth in Section 3. Upon the execution and delivery of the definitive Bond the temporary Bond will be exchanged therefor and cancelled. Section 4. Form of Bond. 4.01. Execution of the Bonds. The Bond will be printed or typewritten in substantially the following form: No. R- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF RAMSEY CITY OF GEM LAKE GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND, SERIES 2007A Date of Rate Maturi Original Issue CUSIP February 1, 20_ June 20, 2007 Registered Owner: Cede & Co. The City of Gem Lake, Minnesota, a duly organized and existing municipal corporation in Ramsey 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 $ on the maturity date specified above, payable February 1 and August 1 in each year, commencing February 1, 2008, 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 Bond Trust Services Corporation, Roseville, 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 310976vI MNI GE190-4 7 4l 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, 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 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 Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Gem Lake, Ramsey 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 Clerk and has caused this Bond to be dated as of the date set forth below. Dated: CITY OF GEM LAKE, MINNESOTA (Facsimile) (Facsimile) City Clerk Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. BOND TRUST SERVICES CORPORATION I0 3109760 MNI GE190-4 9 The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: Please insert social security identifying number of assignee (Include information for all joint owners if this Bond is held by joint account.) or other 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 Cede & Co. Federal ID #13-2555119 Signature of Officer of Registrar 4.02. Approving Legal Opinion. The City Clerk is directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and to cause the opinion to be printed on or accompany the Bond. Section 5. Payment; Security; Pledges and Covenants. 5.01. Debt Service Fund. (a) The Bonds are payable from the General Obligation Capital Improvement Plan Bonds, Series 2007A Debt Service Fund (the "Debt Service Fund") hereby created, and the proceeds of the ad valorem taxes hereinafter levied are hereby pledged to the Debt Service Fund. If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the Treasurer will 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 the taxes levied by this resolution, when collected. There is appropriated to the Debt Service Fund (i) capitalized interest financed from Bond proceeds, if any, (ii) any amount over the minimum purchase price paid by the Purchaser, to the extent designated for 310976v1 MNI GE190-4 11 including any heretofore furnished, may be deemed representations of the City as to the facts stated therein. 6.02. Certification as to Official Statement. The Mayor, City Clerk and Treasurer are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 6.03. Payment of Costs of Issuance. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses (other than amounts payable to Kennedy & Graven, Chartered as Bond Counsel) to U.S. Trust Company, Minneapolis, Minnesota on the closing date for further distribution as directed by the City's financial adviser, Ehlers & Associates, Inc. Section 7. Tax Covenant. 7.01. Tax -Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bond 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 Bond to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bond. 7.02. No Rebate Required. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bond under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States, if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2007) exceed the small -issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small -issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds is issued is not reasonably expected to exceed $5,000,000, within the meaning of Section 148(f)(4)(D) of the Code. 7.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be a "private activity bond" within the meaning of Sections 103 and 141 through 150 of the Code. 310976v1 MNI GE190-4 13 Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Clerk 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 Clerk will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. 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 Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond 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 Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the 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. 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and 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. 310976v1 MNI GE190-4 15 The motion for the adoption of the foregoing resolution was duly seconded by Member and upon vote being taken thereon, the following voted in favor thereof - and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 310976v1 MNI GE190-4 17