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2019-04-16 Council Packet
CITY OF MENDOTA HEIGHTS CITY COUNCIL AGENDA April 16, 2019 – 7:00 pm Mendota Heights City Hall 1. Call to Order 2. Roll Call 3. Pledge of Allegiance 4. Adopt Agenda 5. Consent Agenda a. Approve April 2, 2019 City Council Minutes b. Accept Police Officer Resignation and Authorization to Begin Police Officer Recruitment c. Approve Resolution 2019-28 Administrative Critical Area Permit for 647 Sibley Memorial Highway d. Approve 2019 Workers Compensation Insurance Renewal e. Approve Resolution 2019-27 Adopting Post-Issuance Debt Compliance Policy for Tax- exempt and Tax-advantaged Government Bonds f. Approve the March Building Activity Report g. Acknowledge March 2019 Fire Synopsis h. Approve the February 2019 Treasurer’s Report i. Approve the Claims List 6. Citizen Comment Period (for items not on the agenda) *See guidelines below 7. Presentations a. Recognition of Garold Murphy Community Service Award Recipient 8. Public Hearings - None 9. New and Unfinished Business a. Fire Station Remodel/Expansion Financing 1. Resolution 2019- 26 Providing for the Issuance and Sale of $7,000,000 General Obligation Capital Improvement Plan Bonds Series 2019A 2. Ehlers Investment Advisory Services Proposal b. Presentation of Dakota County Library Services and Activities 10. Community Announcements 11. Council Comments 12. Adjourn Guidelines for Citizen Comment Period: “The Citizen Comments section of the agenda provides an opportunity for the public to address the Council on items which are not on the agenda. All are welcome to speak. Comments should be directed to the Mayor. Comments will be limited to 5 minutes per person and topic; presentations which are longer than five minutes will need to be scheduled with the City Clerk to appear on a future City Council agenda. Comments should not be repetitious. Citizen comments may not be used to air personal attacks, to air personality grievances, to make political endorsements, or for political campaign purposes. Council members will not enter into a dialogue with citizens, nor will any decisions be made at that presentation. Questions from the Council will be for clarification only. Citizen comments will not be used as a time for problem solving or reacting to the comments made, but rather for hearing the citizen for information only. If appropriate, the Mayor may assign staff for follow up to the issues raised.” CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, April 2, 2019 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, Minnesota was held at 7:00 p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Garlock called the meeting to order at 7:00 p.m. Councilors Paper, Miller, and Petschel were also present. Councilor Duggan was absent. PLEDGE OF ALLEGIANCE Council, the audience, and staff recited the Pledge of Allegiance. AGENDA ADOPTION Mayor Garlock presented the agenda for adoption. Councilor Petschel moved adoption of the agenda. Councilor Miller seconded the motion. Ayes: 4 Nays: 0 Absent: 1 (Duggan) CONSENT CALENDAR Mayor Garlock presented the consent calendar for approval. Councilor Petschel moved approval of the consent calendar as presented and authorization for execution of any necessary documents contained therein. a. Approve March 19, 2019 City Council Minutes b. Approve February 26, 2019 Council Work Session Minutes c. Acknowledgement of the February 26, 2019 Planning Commission Meeting Minutes d. Acknowledgment of the January 16, 2019 Airport Relations Commission Meeting Minutes e. Approve Temporary Liquor License for St. Thomas Academy for April 26 - 27, 2019 f. Approve Temporary Liquor License for Beth Jacob Congregation for May 5, 2019 g. Approval to Replace Check Valves at the Main Lift Station h. Approve Ordinance 539 Updating the Tobacco-Free Policy in City Parks i. Approve Ordinance 540 Updating the Stormwater and Erosion Control Ordinance j. Accept Retirement Notice of Terry Blum and Authorize Recruitment to Fill Public Works Superintendent Position page 3 k. Approve Resolution 2019-25 Community Roadside Landscape Partnership Application for Mendota Road Landscaping Improvements l. Approve Job Description and Authorize Recruitment for a Natural Resources / GIS Intern m. Acknowledgement of February 2019 Fire Synopsis n. Approval of Claims List o. Approve Contract for Fire Station Construction Materials Testing Services p. Approve Contract for Fire Station Wet Pipe Fire Sprinkler System Councilor Miller seconded the motion. Ayes: 4 Nays: 0 Absent: 1 (Duggan) PUBLIC COMMENTS Ms. Barb Theisen, 714 Linden Street, in regards to the Request for Proposals for The Village lots, stated that she appreciated that the residents were able to provide feedback at the last Council meeting and that the Mayor recently met with the residents of this area. It was dismaying, however, that the RFP was not tweaked based on residents’ comments to scale back the number of units. She reminded the Council of the public reaction to the Trammel Crow Project proposed for those same lots. She encouraged the Council to only consider proposals that are in-line with the existing plan for this area. A large-scale apartment building on this site is not the right fit. PUBLIC HEARING No items scheduled. NEW AND UNFINISHED BUSINESS A) RESOLUTION 2019-24 APPROVING A CRITICAL AREA PERMIT AND VARIANCE TO JOHN AND THERESA COSGRIFF, FOR PROPERTY LOCATED AT 1875 HUNTER LANE (PLANNING CASE NO. 2019-05) Community Development Director Tim Benetti explained that this was a request from Charlie & Co. Design on behalf of John and Theresa Cosgriff, who were seeking approval of a Critical Area Permit and Variance to remove an existing single-family home and rebuild a new single-family home in its place. The property is located at 1875 Hunter Lane, which is located within the Mississippi River Corridor Area (MRCA), thus the request for the Critical Area Permit. They were also requesting a Variance from the bluff-line setback requirements. Councilor Miller, referencing the string-line rule to the back of the homes, asked if the existing home was built prior to the neighboring homes to the north and south, and is that why the homes do not line up. Mr. Benetti confirmed. Councilor Miller commended the homeowners for planning for the least amount of disruption to the bluff area by maintaining the current footprint and putting the addition to the east, well away from the bluff area. page 4 Councilor Petschel observed that many homes in this area were platted before the string-line rule went into effect. For homes built prior to that point, variances may be necessary to building on the same pad. Councilor Paper stated that the addition of a rain garden to capture the water run-off, along with the addition of new trees, make this a terrific project. Mayor Garlock expressed his opinion that this is going to be a beautiful home and that the owners have put a lot of thought into it. Councilor Petschel moved to adopt RESOLUTION 2019-24 APPROVING A CRITICAL AREA PERMIT WITH VARIANCE FOR PROPERTY LOCATED AT 1875 HUNTER LANE (PLANNING CASE NO. 2019-06). Councilor Miller seconded the motion. Ayes: 4 Nays: 0 Absent: 1 (Duggan) B) PAR 3, RECREATION PROGRAM, AND PARKS ANNUAL REPORT Recreation Program Coordinator Meredith Lawrence presented the 2018 year-end review for Parks, Recreation, and Par 3. Ms. Lawrence noted new commissioners Daniel Sherer and Stephanie Meyer who were appointed to the Parks and Recreation Commission. Facility and parks improvements that were made in 2018 were noted. Ms. Lawrence reviewed the recreation programs offered. The recreation programs included 696 participants and softball had 360 participants. She highlighted plans for 2019 which will include Tour de Rec Program-partnering with West St. Paul; an additional movie night; revival of the summer concert series; a Glow Run; offering youth art classes and possibly theater classes; and workouts in the park. Ms. Lawrence noted that the 2018 Par 3 revenue totaled $132,519 and expenditures were $142,608. Equipment purchased in 2018 for the Par 3 included a rough mower, fairway mower, debris blower, and a utility cart. The Par 3 had 187 participants in golf leagues and 140 participants in golf camps during the summer of 2018. Councilor Miller commented that the report was well done, very thorough and informative. Councilor Paper, in reference to the golf course, asked how they planned to market the senior league better. Ms. Lawrence replied that she was working with some of the seniors that were in the league last year to try to promote it more heavily with their friends. They are also going to be reaching out to some senior living developments in the area. Councilor Paper asked if there is any record of how much additional revenue the Groupon coupon brought in, in the past. Ms. Lawrence replied that she believed it brought in between $7,000 or $8,000. Staff feels that it is a good way to bring in extra revenue along with new users. page 5 Councilor Paper asked if there would be a fee associated with the Tour de Rec Program. Ms. Lawrence replied that there is no fee for that program. Councilor Petschel asked which high schools were using the golf course. Ms. Lawrence replied that St. Paul Academy, Visitation, Cretin-Derham Hall, Humboldt, St. Croix Lutheran all use the Par 3 for their golf programs. Ms. Lawrence confirmed that April 9, 2019 would be the opening day for the Par 3 this year. Councilor Paper asked how the course is looking after the winter season. Ms. Lawrence answered that the course is in good shape. Mayor Garlock stated that this was an outstanding report and he appreciated it. COMMUNITY ANNOUNCEMENTS City Administrator Mark McNeill announced that, weather permitting, the Par 3 will be open on April 9th. The City is hosting an Earth and Arbor Day volunteer event on April 27th from 10:00 am until noon at Mendakota Park, Rogers Lake, and Valley Park. The Recreation Department is looking for one more softball team in the adult league. Clean-up Day is scheduled for May 4th from 8:00 am until noon. COUNCIL COMMENTS Councilor Petschel asked if anyone has ever kept records on ice out on Rogers Lake. On one side of the lake the ice is gone; however, on the other side it is pretty prevalent. Mayor Garlock congratulated Minnehaha Academy boys basketball team which won the AA state tournament for the second consecutive year. Councilor Miller commented that now that the snow is gone, the high school Track & Field teams are out running. He requested that drivers be diligent and mindful of the runners. Share the road and keep everyone safe. Councilor Paper wished the best of luck with the fourth quarter to the all of the students in the district. ADJOURN Councilor Paper moved to adjourn. Councilor Petschel seconded the motion. Ayes: 4 Nays: 0 Absent: 1 (Duggan) page 6 Mayor Garlock adjourned the meeting at 7:38 p.m. ____________________________________ Neil Garlock Mayor ATTEST: _______________________________ Lorri Smith City Clerk page 7 Request for City Council Action DATE: April 16, 2019 TO: Mayor, City Council, and City Administrator FROM: Kelly McCarthy, Chief of Police/Emergency Manager Cheryl Jacobson, Assistant City Administrator SUBJECT: Police Officer Resignation and Position Recruitment INTRODUCTION The City Council is asked to accept the resignation of Police Officer Jeffory VonFeldt and authorize staff to begin the Police Officer recruitment process. BACKGROUND Jeffory VonFeldt has resigned his position as Police Officer effective April 12, 2019. To fill the vacant position, staff is requesting authorization to begin the recruitment process. The recruitment process will start with a position posting/advertisement. It is anticipated that the application period will run from April 17 to May 16. Interested applicants must submit a cover letter, resume, city application and application supplement. Applications will be evaluated and ranked, and interviews and testing conducted. After the initial posting period, the hiring process is anticipated to take eight to ten weeks. BUDGET IMPACT Funding for the position is provided for in the 2019 budget. ACTION RECOMMENDED Staff recommends that the City Council accept Officer VonFeldt’s resignation and authorize staff to begin the recruitment process to fill a Police Officer vacancy within the department. ACTION REQUIRED If the Council concurs, it should, by motion, accept the resignation of Jeffory VonFeldt effective April 12, 2019, and authorize staff to begin the Police Officer recruitment process. page 8 Request for City Council Action DATE: April 2, 2019 TO: Mayor and City Council, City Administrator FROM: Ryan Ruzek, Public Works Director SUBJECT: Planning Case 2019-11 Administrative Critical Area Permit for 647 Sibley Memorial Highway Introduction Ed and Kathy Schones are requesting approval of an Administrative Critical Area Permit for their property located at 647 Sibley Memorial Highway. Background The subject property is located in the R-1 One Family Residential zoning district, and within the Mississippi River Corridor Critical Area. Pursuant to Title 12-3-5 of the City Code, all properties located in the critical overlay area that require any zoning action, including new construction, building additions, demolition, vegetation removal and plantings, and/or grading work requires approval of such permits prior to the commencement of any work in said area. Title 12-3-5 also provides for “administrative” level approval if certain conditions are met. Description of Request The Schones have hired Richard Groh Architects to create plans to add an approximate 120 square foot addition to their home, which will serve as a mud room. The addition is located 67 feet from the bluff line. Analysis - Critical Area Permit According to Title 12-3-5-D of the City Code, in the case of a minor development and/or change involving a single-family dwelling, and if the site plans conform to the standards of the critical area overlay district, the city administrator shall bring the request to the attention of the City Council at its next regular meeting following receipt of an application for critical area ordinance consideration. The city council shall review such request and may, if it so determines, exempt the applicant from complying with any unduly burdensome requirements of this chapter. This allowed exemption can be considered under an administrative review process, which is the case in this particular application. The proposed projects and sites must comply with the following conditions (with Staff comments noted afterwards): 1. No part of the subject property shall have slopes of greater than eighteen percent (18%). Staff Comments: No grading activities are proposed with this project. 2. No part of the subject property shall be within forty feet (40'), whether on the same parcel or on abutting parcels of any area defined as a bluff by this chapter, or any area with slopes greater than forty percent (40%). Staff Comments: The addition is 67 feet away from the bluff. page 9 3. The proposed project shall not expand the enclosed area of the principal or accessory structures by more than one hundred forty four (144) square feet. Staff Comments: The addition shown is approximately 13 feet by 9 feet, 117 square feet. 4. The proposed project shall not increase the height of any existing structure. Staff Comments: The addition will not meet or exceed the height of the existing roof. 5. The proposed project shall be in compliance with all other requirements of this chapter, and any other applicable regulations. Staff Comment: The applicant is also required to obtain a building permit for this addition. 6. The proposed project shall not result in changes to the existing finished grade. Staff Comments: Grading is not proposed with this project. Based on staff’s interpretation of the intent of this provision, the scope of the project does not require Planning Commission recommendation and a public hearing; and therefore may be given full consideration and approval by the City Council only. Discussion Staff is recommending approval of the Administrative Critical Area Permit for the mud room addition at 647 Sibley Memorial Highway. Recommendation Staff recommends the City Council adopt RESOLUTION NO. 2019-26 APPROVING AN ADMINISTRATIVE CRITICAL AREA PERMIT FOR THE PROPERTY LOCATED AT 647 SIBLEY MEMORIAL HIGHWAY Action Required This matter requires a simple majority vote. page 10 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY, MINNESOTA RESOLUTION 2019-28 RESOLUTION APPROVING AN ADMINISTRATIVE CRITICAL AREA PERMIT FOR PROPERTY LOCATED AT 647 SIBLEY MEMORIAL HIGHWAY (PLANNING CASE NO. 2019-11) WHEREAS, Edward and Kathleen Schones (the “Applicants”) have applied for an Administrative Critical Area Permit to construct an approximate 120 square foot addition to the principal structure, as proposed under Planning Case No. 2019-11 application, and located at 647 Sibley Memorial Highway, which is legally described in Exhibit A (the “Subject Property”); and WHEREAS, the Subject Property is located within the Critical Area Overlay District of the City of Mendota Heights, and the proposed project qualifies as a minor development under Title 12-3-5-D of the City Code provisions for properties within the Critical Area Overlay District; and WHEREAS, the proposed project is compliant with the required conditions for exemption from a public hearing to be considered directly by the City Council. NOW THEREFORE BE IT RESOLVED by the Mendota Heights City Council that the administrative critical area permit request as proposed under Planning Case No. 2019-11 is hereby approved with the finding of fact that the proposed project will have no negative impacts upon the critical corridor area or bluffs; will not impact or change any major grades or drainage ways on the property; that the proposed project will be done in accordance with all requirements of the City’s Land Disturbance Guidelines, and meets the general purpose and intent of the Critical Area Overlay District and City Code. Adopted by the City Council of the City of Mendota Heights this 16th day of April, 2019. CITY COUNCIL CITY OF MENDOTA HEIGHTS ________________________________ Neil Garlock, Mayor ATTEST: ________________________________ Lorri Smith, City Clerk page 11 EXHIBIT A Legal Description – 647 Sibley Memorial Highway PID: 27-03900-15-020 PT OF LOTS 14 & 15 COM 134 FT NE OF SW COR OF LOT 15 NE 134 FT SE 363 FT SW 134 FT NW TO BEG, AUDITORS SUBDIVISION NO 4, DAKOTA COUNTY, MINNESOTA page 12 66666666* * * *666666!!2 647 645 649 655 643 1020SIBLEY MEMORIAL HWY324299Dakota County GIS City Base Map 2018Utilities Date: 4/11/2019 City ofMendotaHeights050 SCALE IN FEET GIS Map Disclaimer:This data is for informational purposes only and should not be substituted for a true title search, property appraisal, plat,survey, or for zoning verification. The City of Mendota Heights assumes no legal responsibility for the information containedin this data. The City of Mendota Heights, or any other entity from which data was obtained, assumes no liability for any errorsor omissions herein. If discrepancies are found, please contact the City of Mendota Heights. Contact "Gopher State One Call" at 651-454-0002 for utility locations, 48 hours prior to any excavation. Mud Room Addition page 13 page 14 page 15 page 16 page 17 page 18 page 19 page 20 page 21 DATE: April 16, 2019 TO: Mayor, City Council and City Administrator FROM: Kristen Schabacker, Finance Director SUBJECT: 2019 Workers compensation insurance INTRODUCTION The Council is asked to authorize a renewal of Workers Comp Insurance for a one year period to begin May 1, 2019. BACKGROUND On May 1, 2019 our workers compensation insurance renews. The base premium for this year is $365,202. This represents a 29.40% increase over last year’s premium of $282,222. This increase is based on the high claim history which the City has experienced in recent years. Below are the amounts and number of claims that the City has had for the last 5 renewal periods. 2014/15 $1,137,037.83 13 claims (includes reserves of $635,726.93, not actually paid out) 2015/16 93,558.75 23 claims ($10,738.85 in reserve) 2016/17 687,048.80 17 claims ($421,904.47 in reserve) 2017/18 1,532,249.76 22 claims (1,287,861.06 in reserve) 2018/19 52,735.28 10 claims ($40,090.89 in reserve) The City’s workers’ compensation policy includes a volunteer policy. This provides limited “no- fault” benefits for volunteers injured while working for the city (the firefighters and police reserves are covered under the city’s worker’s comp, and not this volunteer plan). Volunteers receive limited death, disability and impairment benefits. This policy would be covering people volunteering at events such as parks celebration, fishing derby, etc. The City has the option to pay a fixed premium or deductible premium option. The City has chosen to go with the regular premium option and pay a fixed premium amount in the past. We have the option of choosing a deductible per claim. This option reduces the amount of premium paid up front, but has the potential to have a greater cost, depending on the number of claims that the City experiences in the year. page 22 BUDGET IMPACT There is $248,770 in the 2019 budget for workers compensation costs. The amount budgeted is short of the base premium amount by approximately $89,000. However, there is an insurance reserve amount ($136,211) designated in fund balance. That fund should be reduced by $89,000 to cover the amount of premium not budgeted. The 2020 budget will need to have the workers compensation insurance amounts increased to cover the increased premium. RECOMMENDATION Given the City’s recent claim history I recommend renewing with the regular premium option, and further recommend that the Council direct staff to reduce the insurance reserve amount by $89,000 to cover the amount of premium not budgeted. RECOMMENDATION Staff recommends that the council pass a motion accepting the regular premium option for the workers compensation renewal with a base premium of $365,202 effective May1, 2019 – May 1, 2020, and further direct that the insurance reserve fund be reduced by $89,000 to cover the premiums from May 1st through the end of 2019. page 23 DATE: April 16, 2019 TO: Mayor, City Council and City Administrator FROM: Kristen Schabacker, Finance Director SUBJECT: Post-Issuance Debt Compliance Policy & Procedures INTRODUCTION The City Council is asked to adopt a policy relating to compliance with regards to the issuance of Tax-exempt and Tax-advantaged Governmental Bonds, and follow-up procedures. BACKGROUND The city has certain responsibilities in regards to the issuance of debt. The Internal Revenue Service recommends that issuers adopt and implement a post-issuance debt compliance policy and procedures. We adopted a Post Issuance Debt Compliance Policy in May 2012. Ehlers has recommended that we update our policy. The attached policy and procedures from Ehlers updates and replaces our previous policy. The policy states the requirements that are needed for each bond issue. The city will also have procedures regarding the post-issuance debt compliance. These procedures will provide the steps necessary to ensure that the requirements will be met. The finance director will be responsible for these requirements. BUDGET IMPACT N/A RECOMMENDATION Staff recommends that the council pass a motion adopting Resolution 2019-27 Adopting Post- Issuance Debt Compliance Policy for Tax-exempt and Tax-advantaged Governmental Bonds. page 24 City of Mendota Heights, Minnesota Resolution 2019-27 Adopting Post-Issuance Debt Compliance Policy for Tax-exempt and Tax- advantaged Governmental Bonds WHEREAS, the City of Mendota Heights, Minnesota (the “City”) from time to time will issue tax-exempt and tax-advantaged governmental bonds; and WHEREAS, under the Internal Revenue Code of 1986, as amended and related regulations (the “Code”), and Securities and Exchange Commission (the “SEC”) the City is required to take certain actions after bond issuance to ensure that interest on those bonds remains in compliance with the Code and SEC; and WHEREAS, the City has determined to adopt a policy regarding how the City will carry out its compliance responsibilities via written procedures, and to that end, has caused to be prepared documents titled Post-Issuance Debt Compliance Policy and Post-Issuance Debt Compliance Procedures; and WHEREAS, The City Council (the “Council”) of the City has reviewed the Post-Issuance Debt Compliance Policy in connection with the Post-Issuance Debt Compliance Procedures and has determined that it is in the best interest of the City to adopt the Policy. NOW THEREFORE, BE IT RESOLVED BY THE CITY OF MENDOTA HEIGHTS, MINNESOTA; the Council approves the Policy as shown in the form attached; and BE IT FURTHER RESOLVED; the City staff is authorized to take all actions necessary to carry out the Post-Issuance Debt Compliance Policy and Post-Issuance Debt Compliance Procedures. Adopted by the City of Mendota Heights, Minnesota this 16th day of April 2019. ATTEST: ____________________________ ______________________ Neil Garlock, Mayor Lorri Smith, City Clerk page 25 City of Mendota Heights, Minnesota Post-Issuance Debt Compliance Procedures The City Council (the “Council”) of the City of Mendota Heights, Minnesota (the “City”) has adopted the attached Post-Issuance Debt Compliance Policy dated April 16, 2019. The Post-Issuance Debt Compliance Policy applies to qualifying debt obligations issued by the City. As directed by the adoption of the Post-Issuance Debt Compliance Policy, the Finance Director of the City will perform the following Post- Issuance Debt Compliance Procedures for all of the City’s outstanding debt. 1) General Post-Issuance Compliance a) Ensure written procedures and/or guidelines have been put in place for individuals to follow when more than one person is responsible for ensuring compliance with Post-Issuance Debt Compliance Procedures. b) Ensure training and/or educational resources for post-issuance compliance have been approved and obtained. c) The Finance Director understands that there are options for voluntarily correcting failures to comply with post-issuance compliance requirements (e.g. as remedial actions under Section 1.141-12 of the Treasury Regulations and the ability to enter into a closing agreement under the Tax-Exempt Bonds Voluntary Closing Agreement Program described in Notice 2008-31(the “VCAP Program”)). 2) General Recordkeeping a) Retain records and documents for the obligation and all obligations issued to refund the obligation for a period of at least seven years following the final payment of the obligation. If an obligation is refunded, then the final payment of the refunding obligation becomes the beginning of the period unless otherwise directed by the City’s bond counsel. b) Retain electronic (preferred) and/or paper versions of records and documents for the obligation. c) General records and documentation to be assembled and retained: i) Description of the purpose of the obligation (i.e. the project or projects) and the state statute authorizing the project. ii) Record of tax-exempt status or revocation of tax-exempt status, if applicable. iii) Any correspondence between the City and the IRS. iv) Audited financial statements. v) All accounting audits of property financed by the obligation. vi) Obligation transcripts, official statements, and other offering documents of the obligation. vii) Minutes and resolutions authorizing the issuance of the obligation. viii) Certifications of the issue price of the obligation. page 26 ix) Any formal elections for the obligation (i.e. an election to employ an accounting methodology other than the specific tracing method). x) Appraisals, demand surveys, or feasibility studies for property financed by the obligation. xi) All information reports filed for the obligations. xii) All management contracts and other service agreements, research contracts, and naming rights contracts. xiii) Documents related to governmental grants associated with construction, renovation or purchase of property financed by the obligation. xiv) Reports of any prior IRS examinations of the City or the City’s obligation. xv) All correspondence related to the above (faxes, emails, or letters). 3) Arbitrage Yield Restriction and Rebate Recordkeeping a) Investment and arbitrage documentation to be assembled and retained: i) An accounting of all deposits, expenditures, interest income and asset balances associated with each fund established in connection with the obligation. This includes an accounting of all monies deposited to the debt service fund to make debt service payments on the obligation, regardless of the source derived. Accounting for expenditures and assets is described in further detail in Section 4. ii) Statements prepared by Trustee and/or Investment Provider. iii) Documentation of at least quarterly allocations of investments and investment earnings to each obligation. iv) Documentation for investments made with obligation proceeds such as: (1) investment contracts (i.e. guaranteed investment contracts), (2) credit enhancement transactions (i.e. obligation insurance contracts), (3) financial derivatives (e.g. swaps, caps, and collars), and (4) bidding of financial products: (a) Investments acquired with obligation proceeds are purchased at fair market value (e.g. three bid safe harbor rule for open market securities needed in advance refunding escrows). b) Computations of the arbitrage yield. c) Computations of yield restriction and rebate amounts including but not limited to: i) Compliance in meeting the “Temporary Period from Yield Restriction Exception” and limiting the investment of funds after the temporary period expires. ii) Compliance in meeting the “Rebate Exception.” (1) qualifying for the “Small Issuer Exception,” (2) qualifying for a “Spending Exception,” (a) 6-Month Spending Exception (b) 18-Month Spending Exception (c) 24-Month Spending Exception (3) qualifying for the “Bona Fide Debt Service Fund Exception,” and page 27 (4) quantifying arbitrage on all funds established in connection with the obligation in lieu of satisfying arbitrage exceptions including reserve funds and debt service funds. d) Computations of yield restriction and rebate payments. e) Timely Tax Form 8038-T filing, if applicable. i) Remit any arbitrage liability associated with the obligation to the IRS at each five-year anniversary date of the obligation, and the date in which the obligation is no longer outstanding (redemption or maturity date), whichever comes sooner, within 60 days of said date. f) Timely Tax Form 8038-R filing, if applicable. i) Remit the form after the date in which the obligation is no longer outstanding (redemption or maturity date), whichever comes sooner, within 2 years of said date. g) Procedures or guidelines for monitoring instances where compliance with applicable yield restriction requirements depends on subsequent reinvestment of obligation proceeds in lower yielding investments (e.g. reinvestment in zero coupon SLGS). 4) Expenditure and Asset Documentation to be Assembled and Retained a) Documentation of allocations of obligation proceeds to expenditures (e.g. allocation of proceeds to expenditures for the construction, renovation or purchase of facilities owned and used in the performance of exempt purposes). i) Such allocation will be done not later than the earlier of: (1) eighteen (18) months after the later of the date the expenditure is paid, or the date the project, if any, that is financed by the obligation is placed in service; or (2) the date sixty (60) days after the earlier of the fifth anniversary of the issue date of the obligation, or the date sixty (60) days after the retirement of the obligation. b) Documentation of allocations of obligation proceeds to issuance costs. c) Copies of requisitions, draw schedules, draw requests, invoices, bills, and cancelled checks related to obligation proceed expenditures during the construction period. d) Copies of all contracts entered into for the construction, renovation or purchase of facilities financed with obligation proceeds. e) Records of expenditure reimbursements incurred prior to issuing obligations for projects financed with obligation proceeds (declaration of official intent/reimbursement resolutions including all modifications). f) List of all facilities and equipment financed with obligation proceeds. g) Depreciation schedules for depreciable property financed with obligation proceeds. page 28 h) Documentation that tracks the purchase and sale of assets financed with obligation proceeds. i) Documentation of timely payment of principal and interest payments on the obligation. j) Tracking of all issue proceeds and the transfer of proceeds into the debt service fund as appropriate. k) Documentation that excess earnings from a Reserve Fund are transferred to the Debt Service Fund on an annual basis. Excess earnings are balances in a Reserve Fund that exceed the Reserve Fund requirement. 5) Miscellaneous Documentation to be Assembled and Retained a) Ensure that the project, while the obligation is outstanding, will avoid IRS private activity concerns. b) The Finance Director shall monitor the use of all obligation-financed facilities in order to: i) Determine whether private business uses of obligation-financed facilities have exceeded the de minimus limits set forth in Section 141(b) of the Code as a result of: (1) sale of the facilities; (2) sale of City capacity rights; (3) leases and subleases of facilities including easements or use arrangements for areas outside the four walls (e.g. hosting of cell phone towers); (4) leasehold improvement contracts, licenses, management contracts in which the City authorizes a third party to operate a facility (e.g. cafeteria); (5) research contracts; (6) preference arrangements in which the City permits a third-party preference (e.g. parking in a public parking lot, joint ventures, limited liability companies or partnership arrangements); (7) output contracts or other contracts for use of utility facilities including contracts with large utility users; (8) development agreements which provide for guaranteed payments or property values from a developer; (9) grants or loans made to private entities including special assessment agreements; (10) naming rights agreements; and (11) any other arrangements that provide special legal entitlements to nongovernmental persons. ii) Determine whether private security or payments that exceed the de minimus limits set forth in Section 141(b) of the Code have been provided by nongovernmental persons with respect to such obligation-financed facilities. page 29 c) The Finance Director shall provide training and educational resources to any City staff that have the primary responsibility for the operation, maintenance, or inspection of obligation-financed facilities with regard to the limitations on the private business use of obligation-financed facilities and as to the limitations on the private security or payments with respect to obligation- financed facilities. d) The City shall undertake the following with respect to the obligations: i) An annual review of the books and records maintained by the City with respect to such obligations. ii) An annual physical inspection of the facilities financed with the proceeds of such obligations, conducted by the Finance Director with the assistance of any City staff who have the primary responsibility for the operation, maintenance, or inspection of such obligation-financed facilities. e) Changes in the project that impact the terms or commitments of the obligation are properly documented and necessary certificates or opinions are on file. 6) Additional Undertakings and Activities that Support Sections 1 through 5 above: a) The Finance Director will notify the City’s bond counsel, financial advisor and arbitrage provider of any survey or inquiry by the IRS immediately upon receipt. Usually responses to IRS inquiries are due within 21 days of receipt. Such IRS responses require the review of the above-mentioned data and must be in writing. As much time as possible is helpful in preparing the response. b) The Finance Director will consult with the City’s bond counsel, financial advisor and arbitrage provider before engaging in post-issuance credit enhancement transactions (e.g. obligation insurance, letter of credit, or hedging transaction). c) The Finance Director will monitor all “qualified tax-exempt debt obligations” (often referred to as “bank qualified” obligations) within the first calendar year to determine if the limit is exceeded, and if exceeded, will address accordingly. For obligations issued during years 2009 and 2010 the limit was $30,000,000. During this period, the limit also applied to pooled financings of the governing body and provides a separate $30,000,000 for each 501 (c)(3) conduit borrower. In 2011 and thereafter it is $10,000,000 unless changed by Congress. d) Identify any post-issuance change to terms of obligations which could be treated as a current refunding of “old” obligations by “new” obligations, often referred to as a “reissuance.” e) The Finance Director will consult with the City’s bond counsel prior to any sale, transfer, change in use or change in users of obligation-financed property which may require “remedial action” under applicable Treasury Regulations or resolution pursuant to the VCAP Program. page 30 i) A remedial action has the effect of curing a deliberate action taken by the City which results in satisfaction of the private business test or private loan test. Remedial actions under Section 1.141-12(d)(e) and (f) include the redemption of non-qualified obligations and/or the alternative uses of proceeds or the facility (i.e. to be used for another qualified purpose). f) The Finance Director will ensure that the appropriate tax form for federal subsidy payments is prepared and filed in a timely fashion for applicable obligations (e.g. Build America Bonds). 7) Continuing Disclosure Obligations a) Identify a position at the City to be responsible for compliance with continuing disclosure obligations as defined by the Rule and any policies of the City. b) The position responsible for compliance may have the ability to assign responsibilities, delegate where appropriate or engage a dissemination agent or third-party service providers to perform all or some of the duties described in this section. The City cannot delegate its compliance responsibilities. c) The City should specify how providers or delegated authorities will be monitored and supervised. d) The City should identify the documents that set forth the respective requirements being monitored at the time of closing for each obligation. e) The City should catalog all outstanding Continuing Disclosure Agreements and establish consolidated filing requirements based on the outstanding CDAs. f) The City should identify the frequency of the actions to be undertaken to ensure compliance, establish a system or filing alerts or reminders to administer the filing requirements. g) The Finance Director for compliance must be made aware of any new outstanding debt, changes to obligation or loan covenants, events of acceleration or default that would materially affect investors. h) The City should review a compliance checklist to verify compliance with CDA requirements, at least annually, although it may be advisable to provide more frequent reviews in connection to specific material events. i) The City should monitor mandatory material events specifically identified in accordance with the Rule and file required notices within 10 days of occurrence. i) Principal and interest payment delinquencies. ii) Non-payment related defaults, if material. iii) Unscheduled draws on debt service reserves reflecting financial difficulties. iv) Unscheduled draws on credit enhancements reflecting financial difficulties. v) Substitution of credit or liquidity providers or their failure to perform. page 31 vi) Adverse tax opinion, IRS notices or material events affecting the tax status of the obligation. vii) Modifications to rights of security holders, if material. viii) Obligation calls, if material. ix) Defeasances. x) Release, substitution or sale of property securing repayment of the obligations, if material. xi) Rating Changes. xii) Bankruptcy, insolvency, receivership, or similar event of the obligated person(s). xiii) Merger, consolidation, or acquisition of the obligated person, if material. xiv) Appointment of a successor or additional trustee, or change of name of a trustee, if material. xv) Incurrence of financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material. xvi) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the City, any of which reflect financial difficulties. j) In addition to the mandatory material events, the City should review and file any additional or voluntary event notices. k) The City should maintain a catalog of all outstanding obligations whether publicly offered or privately placed, and the terms and conditions that govern default or acceleration provisions. l) Any missed filing requirement should be remedied with a failure to file notice as soon as possible once the late filing is identified and the required information is available to file. m) Sensitive information such as bank accounts and wire information should be redacted from documents prior to posting on EMMA. n) The City needs to monitor for changes in law and regulations that effect continuing disclosure obligations and review disclosure policies and procedures periodically to ensure compliance and consistency with regulation and market expectations. 8) Compliance with Future Requirements a) Take measures to comply with any future requirements issued beyond the date of these Post-Issuance Debt Compliance Procedures which are essential to ensuring compliance with the applicable state and federal regulations. page 32 City of Mendota Heights, Minnesota Post-Issuance Debt Compliance Policy The City Council (the “Council”) of the City of Mendota Heights (the “City”) has chosen, by policy, to take steps to help ensure that all obligations will be in compliance with all applicable federal regulations. This policy may be amended, as necessary, in the future. IRS Background The Internal Revenue Service (IRS) is responsible for enforcing compliance with the Internal Revenue Code (the “Code”) and regulations promulgated thereunder (“Treasury Regulations”) governing certain obligations (for example: tax-exempt obligations, Build America Bonds, Recovery Zone Development Bonds and various “Tax Credit” Bonds). The IRS encourages issuers and beneficiaries of these obligations to adopt and implement a post-issuance debt compliance policy and procedures to safeguard against post-issuance violations. SEC Background The Securities and Exchange Commission (SEC) is responsible for enforcing compliance with the SEC Rule 15c2-12 (the “Rule”). Governments or governmental entities issuing obligations generally have a requirement to meet specific continuing disclosure standards set forth in continuing disclosure agreements (“CDA”). Unless the issuer, obligated person, or a specific obligation is exempt from compliance with CDAs, these agreements are entered into at the time of obligation issuance to enable underwriter(s) to comply with the Rule. The Rule sets forth certain obligations of (i) underwriters to receive, review and disseminate official statements prepared by issuers of most primary offerings of municipal securities, (ii) underwriters to obtain CDAs from issuers and other obligated persons to provide material event disclosure and annual financial information on a continuing basis, and (iii) broker-dealers to have access to such continuing disclosure in order to make recommendations of municipal securities transactions in the secondary market. The SEC encourages issuers and beneficiaries adopt and implement a post-issuance debt compliance policy and procedures to safeguard against Rule violations. When obligations are issued, the CDA commits the issuer or obligated person to provide certain annual financial information and material event notices to the public. Issuers and other obligated persons may also choose to provide periodic, voluntary financial information and filings to investors in addition to fulfilling the specific responsibilities delineated in their CDA. It is important to note that issuers and other obligated persons should not give any one investor certain information that is not readily available to all market participants by disseminating information to the marketplace, at large. Issuers and other obligated persons should be aware that any disclosure activities determined to be “communicating to the market” can be subject to regulatory scrutiny. Post-Issuance Debt Compliance Policy Objective The City desires to monitor these obligations to ensure compliance with the IRS Code, Treasury Regulations and the SEC Rule. To help ensure compliance, the City has developed the following policy (the “Post-Issuance Debt Compliance Policy”). The Post- page 33 Issuance Debt Compliance Policy shall apply to the obligations mentioned above, including bonds, notes, loans, lease purchase contracts, lines of credit, commercial paper or any other form of debt that is subject to compliance. Post-Issuance Debt Compliance Policy The Finance Director of the City is designated as the City’s agent who is responsible for post-issuance compliance of these obligations. The Finance Director shall assemble all relevant documentation, records and activities required to ensure post-issuance debt compliance as further detailed in corresponding procedures (the “Post-Issuance Debt Compliance Procedures”). At a minimum, the Post- Issuance Debt Compliance Procedures for each qualifying obligation will address the following: 1. General Post-Issuance Compliance 2. General Recordkeeping 3. Arbitrage Yield Restriction and Rebate Recordkeeping 4. Expenditure and Asset Documentation to be Assembled and Retained 5. Miscellaneous Documentation to be Assembled and Retained 6. Additional Undertakings and Activities that Support Sections 1 through 5 above 7. Continuing Disclosure Obligations 8. Compliance with Future Requirements The Finance Director shall apply the Post-Issuance Debt Compliance Procedures to each qualifying obligation and maintain a record of the results. Further, the Finance Director will ensure that the Post-Issuance Debt Compliance Policy and Procedures are updated on a regular and as needed basis. The Finance Director or any other individuals responsible for assisting the Finance Director in maintaining records needed to ensure post-issuance debt compliance, are authorized to expend funds as needed to attend training or secure use of other educational resources for ensuring compliance such as consulting, publications, and compliance assistance. Most of the provisions of this Post-Issuance Debt Compliance Policy are not applicable to taxable governmental obligations unless there is a reasonable possibility that the City may refund their taxable governmental obligation, in whole or in part, with the proceeds of a tax-exempt governmental obligation. If this refunding possibility exists, then the Finance Director shall treat the taxable governmental obligation as if such issue were an issue of tax-exempt governmental obligations and comply with the requirements of this Post- Issuance Debt Compliance Policy. Private Activity Bonds The City may issue tax-exempt obligations that are “private activity” bonds because either (1) the bonds finance a facility that is owned by the City but used by one or more qualified 501(c)(3) organizations, or (2) the bonds are so-called “conduit bonds”, where the proceeds are loaned to a qualified 501(c)(3) organization or another private entity that finances activities eligible for tax-exempt financing under federal law (such as certain manufacturing projects and certain affordable housing projects). Prior to the issuance of page 34 either of these types of bonds, the Finance Director shall take steps necessary to ensure that such obligations will remain in compliance with the requirements of this Post-Issuance Debt Compliance Policy. In a case where compliance activities are reasonably within the control of a private party (i.e., a 501(c)(3) organization or conduit borrower), the Finance Director may determine that all or some portion of compliance responsibilities described in this Post-Issuance Debt Compliance Policy shall be assigned to the relevant party. In the case of conduit bonds, the conduit borrower will be assigned all compliance responsibilities other than those required to be undertaken by the City under federal law. In a case where the Finance Director is concerned about the compliance ability of a private party, the Finance Director may require that a trustee or other independent third party be retained to assist with record keeping for the obligation and/or that the trustee or such third party be responsible for all or some portion of the compliance responsibilities. The Finance Director is additionally authorized to seek the advice, as necessary, of bond counsel and/or its financial advisor to ensure the City is in compliance with this Post- Issuance Debt Compliance Policy. Adopted this date April 16, 2019 by the City of Mendota Heights, Minnesota page 35 4/9/2019 Mendota Heights Building Activity Report Mike Andrejka, Building Official March 1, 2019 thru March 31, 2019 January 1, 2019 thru March 31, 2019 January 1, 2018 thru March 31, 2018 January 1, 2017 thru March 31, 2017 Building Permit No.Valuation Fee Collected Building Permit No.Valuation Fee Collected Building Permit No.Valuation Fee Collected Building Permit No.Valuation Fee Collected SFD 0 -$ $0.00 SFD 1 629,742.00$ $6,776.14 SFD 3 1,717,925.00$ $18,856.62 SFD 2 505,000.00$ 6,506.78$ Apartment 0 -$ $0.00 Apartment 0 -$ $0.00 Apartment 0 -$ $0.00 Apartment 1 4,523,000.00$ 33,080.62$ Townhouse 0 -$ $0.00 Townhouse 0 -$ $0.00 Townhouse 4 696,000.00$ $8,921.25 Townhouse 2 450,000.00$ 4,516.88$ Condo 0 -$ $0.00 Condo 0 -$ $0.00 Condo 0 -$ $0.00 Condo 0 -$ -$ Misc 27 371,841.83$ 5,686.64$ Misc 74 1,430,261.83$ 17,910.93$ Misc 89 1,637,977.87$ 22,836.38$ Misc 95 1,211,288.40$ 17,680.56$ Commercial 1 1,500,000.00$ $13,128.64 Commercial 1 1,500,000.00$ $13,128.64 Commercial 2 5,250,960.00$ $38,287.14 Commercial 9 657,895.00$ 10,298.81$ Sub Total 28 1,871,841.83$ 18,815.28$ Sub Total 76 3,560,003.83$ 37,815.71$ Sub Total 98 9,302,862.87$ 88,901.39$ Sub Total 109 7,347,183.40$ 72,083.65$ Trade Permit No.Valuation Fee Collected Trade Permit No.Valuation Fee Collected Trade Permit No.Valuation Fee Collected Trade Permit No.Valuation Fee Collected Plumbing 15 $1,430.00 Plumbing 45 $3,936.50 Plumbing 65 $6,153.54 Plumbing 39 3,293.13$ Water 0 $0.00 Water 0 $0.00 Water 0 $0.00 Water 0 -$ Sewer 0 $0.00 Sewer 0 $0.00 Sewer 13 $975.00 Sewer 12 913.00$ Mechanical 32 $3,834.95 Mechanical 75 397.00$ $7,562.40 Mechanical 133 $13,014.53 Mechanical 77 8,916.48$ Sub Total 47 5,264.95$ Sub Total 120 11,498.90$ Sub Total 211 $20,143.07 Sub Total 128 13,122.61$ License No.Valuation Fee Collected Licenses No.Valuation Fee Collected Licenses No.Valuation Fee Collected Licenses No.Valuation Fee Collected Contractor 21 $1,050.00 Contractor 179 $8,950.00 Contractor 187 $9,350.00 Contractor 210 10,500.00$ Total 96 1,871,841.83$ 25,130.23$ Total 375 3,560,003.83$ 58,264.61$ Total 496 9,302,862.87$ 118,394.46$ Total 447 7,347,183.40$ 95,706.26$ NOTE: All fee amounts exclude SAC, WAC and State Surcharge. Amounts shown will reflect only permit, plan review fee and valuation totals page 36 Request for City Council Action MEETING DATE: April 16, 2019 TO: Mayor, City Council, and City Administrator FROM: Scott Goldenstein, Assistant Fire Chief SUBJECT: March 2019 Fire Synopsis COMMENT: Fire Calls: March ended with a total of 28 calls of service to the Fire Department. The 28 calls broke down as follows: 24 were located in Mendota Heights, 1 in Lilydale, 1 in Mendota and 2 were mutual aid requests supporting South Metro Fire (1 in West Saint Paul and 1 in South Saint Paul). Under the classification of actual fires, we responded to one structure fire at the Somerset Golf Course maintenance building that was put out by their sprinkler system and one vehicle fire on eastbound Highway 62. For medical calls, we were paged to four medical related calls. Under hazardous situation calls, we responded to five calls that including two power lines down calls, a natural gas leak at a residence, a flooded basement with water approximately 2 feet deep and a call for a suspicious powder that had arrived at a business in an envelope. That call ended up including the fire department, police department, HealthEast, the County Special Operations Team liaison and the postal inspector. It was determined that the powder did not present a danger. For service calls we responded to a person trapped in a stalled elevator. For the good intent calls, we responded to one smoke scare that appeared to be due to a possible belt issue on a HVAC unit. We also were paged to four calls that were dispatched and cancelled before our arrival. The false alarm calls were for two system malfunctions, six unintentional trips and one pull station activation with no hazard present. The two mutual aids calls were requests from South Metro Fire for one residential and one commercial fire in their cities. Training: SCBA (Confidence Trailer) OSHA requires annual SCBA training for all of our firefighters. This year we brought in a SCBA confidence trailer from the Dakota County SOT team. This drill can be very challenging in that firefighters go through a trailer that is set up as a maze with no light, obstacles throughout and a confined space with which to work in. Successful firefighters must be comfortable with their equipment and SCBA in order to make it through the trailer. Attack and Search This drill was set up with two stations. The first worked with charged hose lines and the skills for proper hose management in a structure as well as proper procedures to both perform a fire attack and a search for victims at the same time. The second station involved hose movement with both 2.5 inch hose and nozzles as well as 1.75 inch hose and nozzles. page 37 Number of Calls 28 Total Calls for Year 84 FIRE ALARMS DISPATCHED:NUMBER STRUCTURE CONTENTS MISC.TOTALS TO DATE ACTUAL FIRESStructure - MH Commercial 1 $500 $500 $1,200Structure - MH Residential $1,000Structure - Contract Areas $0Cooking Fire - confined $0Vehicle - MH 1 $7,500 $13,000Vehicle - Contract Areas $0Grass/Brush/No Value MHGrass/Brush/No Value Contract TOTAL MONTHLY FIRE LOSSESOther Fire OVERPRESSURE RUPTURE $8,000 $500 $0Excessive heat, scorch burns MEDICALEmergency Medical/Assist 4Vehicle accident w/injuriesExtrication ALL FIRES, ALL AREAS (MONTH)$8,500Medical, other HAZARDOUS SITUATION MEND. HTS. ONLY STRUCT/CONTENTS $1,000Spills/Leaks 2Carbon Monoxide Incident MEND. HTS. ONLY MISCELLANEOUS $13,000Power line down 2Arcing, shorting MEND. HTS. TOTAL LOSS TO DATE $15,200Hazardous, Other 1 SERVICE CALLSmoke or odor removal CONTRACT AREAS LOSS TO DATE $0Assist Police or other agencyService Call, other 1 GOOD INTENTGood IntentDispatched & Cancelled 4 Current To Date Last YearSmoke Scare 1 24 68 40HazMat release investigation 1 8 3Good Intent, Other 1 1 1 FALSE ALARMS 0 0 5 False Alarm 2 7 3Malfunction2Total:28 84 52Unintentional6False Alarm, other 1 FIRE MARSHAL'S TIME FOR MONTH MUTUAL AID 2 INSPECTIONS 36 Total Calls 28 INVESTIGATIONS RE-INSPECTION WORK PERFORMED Hours To Date Last Year MEETINGS 24 FIRE CALLS 438 1381.5 742 MEETINGS 67.5 215 169.25 ADMINISTRATION 7 TRAINING 309.5 903.5 765 SPECIAL ACTIVITY 56.5 9.5 PLAN REVIEW/TRAINING FIRE MARSHAL 48.5 49.5 TOTAL:67 TOTALS 815 2605 1735.25 REMARKS:SEE OTHER SIDE FOR SYNOPSIS LilydaleMendotaSunfish LakeOther MENDOTA HEIGHTS FIRE DEPARTMENT MARCH 2019 MONTHLY REPORT FIRE LOSS TOTALS LOCATION OF FIRE ALARMS Mendota Heights page 38 page 39 page 40 page 41 page 42 page 43 page 44 page 45 page 46 page 47 page 48 page 49 page 50 page 51 To: Mayor and City Council From: Mark McNeill, City Administrator Subject: 2019 Jerry Murphy Award Date: April 16, 2019 Comment: Introduction: The 2019 Jerry Murphy Community Service Award will be presented at the April 16th City Council meeting. Background: (Note: The following information was compiled by the City’s Communications Coordinator Sharon Deziel; portions of this will appear in the next issue of the Heights Highlights): The Jerry Murphy Community Service Award annually honors excellence in volunteerism, enthusiastic leadership, demonstrated compassion, city ambassadorship, and the ability to unite others for positive purpose within the Mendota Heights community. The Jerry Murphy Award Committee is proud to recommend that the 2019 award be presented, in memoriam, to the family of Mr. Bert McKasy. Mr. McKasy passed away on February 11, 2019. Mr. McKasy leaves a legacy of dedicated public service, serving three terms in the Minnesota House of Representatives, was commissioner of the state Department of Commerce, vice chairman of the Metropolitan Airports Commission and chief of staff of former U.S. Senator Dave Durenberger. Mr. McKasy graduated from the University of Minnesota School of Law, and in business served as the board chairman of Mairs & Power Mutual Funds, director of UCare, Lect Tec Corp., Northstar Ice Equipment Corp., and the American National Bank of Minnesota. Additionally, Mr. McKasy served as chairman of the Board of the St. Paul Chamber of Commerce, chairman of the St. Paul Winter Carnival Association, treasurer of Children’s Hospital, chairman of the Board of Trustees of his alma mater, St. Thomas Academy, trustee of the F.R. Bigelow Charitable Foundation, and president of Somerset Country Club. And this may not even encompass the entire list of organizations that he supported and served. page 52 As a forty-five-year resident of Mendota Heights, Mr. McKasy also volunteered on a local level, working with Jerry Murphy to establish and grow the Mendota Heights Community Criminal Apprehension Fund (MCCAF), an organization dedicated to crime prevention through community and police partnerships. He was also one of the founding members of the Mendota Heights Foundation, which is in the final stages of its legal organization process. Once registered, The Mendota Heights Foundation will be able to accept and make philanthropic donations which will benefit the Mendota Heights community. In a Star Tribune article, former Minnesota Governor Arne Carlson refers to Mr. McKasy as, “…truly an outstanding public servant.” And in an accolade printed in the Pioneer Press, his longtime friend Tom Horner indicates, “He was what every person should aspire to be – decent, unquestioned integrity, and passionate about his family and faith.” Mr. McKasy served with humility and a positive spirit, and was dedicated to volunteerism, his family and career. At the City Council meeting, there will be testimonials given by members of the Mendota Heights Community Foundation, and others who knew Mr. McKasy. Action Required: No action is required by Council, other than to recognize the outstanding contributions made to the Mendota Heights Community by Mr. McKasy. ______________________________ Mark McNeill City Administrator page 53 DATE: April 16, 2019 TO: Mayor and City Council FROM: Kristen Schabacker, Finance Director SUBJECT: 2019 Fire Station Remodel/Expansion Bond Issue INTRODUCTION At its April 16th meeting, the City Council will be asked to authorize the sale of General Obligation Improvements to finance the majority of the Fire Station Construction project. BACKGROUND At the April 2, 2019 city council meeting, the council authorized the public sale of $7,000,000 General Obligation Improvement Bonds. The issue will be financing the fire station remodel/expansion. Staff had a conference call with Standard & Poor’s on April 4, 2019. They affirmed our AAA bond rating with a stable outlook. The proposal opening will be held on April 16, 2019 and the results of the opening will be presented that evening at the council meeting. The council will be asked to take action on the sale at the April 16, 2019 council meeting. A representative from Ehlers and Associates will be present to present a tabulation of the bids received. With this bond issue we are requesting that Council also consider the Investment Advisory Services that Ehlers can provide with regards to the bond proceeds. This bond issue is different from the bonds that we issue for our street projects. The amount of these bonds is considerably higher and the construction period is much longer than the construction of our street projects. Ehlers would provide the City an investment manager with a fiduciary oversight to reduce our investment risk and they will work with our Municipal Advisor during the construction project to maximize our return for the project. Their fees and projected investment returns are included in the proposal. BUDGET IMPACT The bonds will be paid with an amount levied each year for the annual bond payments. The fees for investment services are listed in their proposal, which would be .20% of the total on an annualized basis. Based on an even drawdown schedule over 12 months, those would amount to page 54 $7173,61 over the year to manage the proceeds from the bond sale. The fees will be deducted from the monthly investment earnings. RECOMMENDATION I recommendation that the Council approve a resolution authorizing the sale of $7 million in General Obligation Capital Improvement Bonds, and further authorize Ehlers and Associates to serve as the Investment Manager for this bond issue. ACTION REQUIRED If the Council concurs, it should, by motion, adopt the following Resolution 2019-26 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $7,000,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2019A, AND LEVYING A TAX FOR THE PAYMENT THEREOF. In addition, it should approve a motion approving Ehlers as the Investment Manager for the 2019A bond issue. page 55 DATE: April 16, 2019 TO: Mayor and City Council FROM: Kristen Schabacker, Finance Director SUBJECT: 2019 Fire Station Remodel/Expansion Bond Issue INTRODUCTION At its April 16th meeting, the City Council will be asked to authorize the sale of General Obligation Improvements to finance the majority of the Fire Station Construction project. BACKGROUND At the April 2, 2019 city council meeting, the council authorized the public sale of $7,000,000 General Obligation Improvement Bonds. The issue will be financing the fire station remodel/expansion. Staff had a conference call with Standard & Poor’s on April 4, 2019. They affirmed our AAA bond rating with a stable outlook. The proposal opening will be held on April 16, 2019 and the results of the opening will be presented that evening at the council meeting. The council will be asked to take action on the sale at the April 16, 2019 council meeting. A representative from Ehlers and Associates will be present to present a tabulation of the bids received. With this bond issue we are requesting that Council also consider the Investment Advisory Services that Ehlers can provide with regards to the bond proceeds. This bond issue is different from the bonds that we issue for our street projects. The amount of these bonds is considerably higher and the construction period is much longer than the construction of our street projects. Ehlers would provide the City an investment manager with a fiduciary oversight to reduce our investment risk and they will work with our Municipal Advisor during the construction project to maximize our return for the project. Their fees and projected investment returns are included in the proposal. BUDGET IMPACT The bonds will be paid with an amount levied each year for the annual bond payments. The fees for investment services are listed in their proposal, which will be .20% annualized. Based on an even draw down schedule over 12 months, those would amount to $7173,61 over the year to page 56 manage the proceeds from the bond sale. The fees will be deducted from the monthly investment earnings. RECOMMENDATION I recommendation that the Council approve a resolution authorizing the sale of $7 million in General Obligation Capital Improvement Bonds, and further authorize Ehlers and Associates to serve as the Investment Manager for this bond issue. ACTION REQUIRED If the Council concurs, it should, by motion, adopt the following Resolution 2019-26 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $7,000,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2019A, AND LEVYING A TAX FOR THE PAYMENT THEREOF. In addition, it should approve a motion approving Ehlers as the Investment Manager for the 2019A bond issue. page 57 EXTRACT OF MINUTES OF A MEETING CITY COUNCIL OF THE CITY OF MENDOTA HEIGHTS, MINNESOTA HELD: APRIL 16, 2019 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Mendota Heights, Dakota County, Minnesota, was duly held at the City Hall on April 16, 2019, at 7:00 P.M., for the purpose, in part, of authorizing the issuance and awarding the sale of $7,000,000 General Obligation Capital Improvement Plan Bonds, Series 2019A. The following members were present: and the following were absent: Member ________________ introduced the following resolution and moved its adoption: RESOLUTION NO. 2019-26 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $7,000,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2019A AND LEVYING A TAX FOR THE PAYMENT THEREOF A. WHEREAS, on July 2, 2018, the City Council of the City of Mendota Heights, Minnesota (the "City"), held a public hearing on the proposed issuance of general obligation capital improvement plan bonds and, pursuant to resolution approved and adopted the 2018 through 2022 Five-Year Capital Improvement Plan (the "Plan"), and approved the issuance of general obligation capital improvement plan bonds to finance a portion of the costs associated with the acquisition and betterment of a new fire station (the "Project"), all pursuant to the Plan and in accordance with the provisions of Minnesota Statutes, Section 475.521; and B. WHEREAS, no petition signed by voters equal to five percent of the votes cast in the City in the last general election requesting a vote on the issuance of the general obligation capital improvement plan bonds has been filed with the City Clerk within thirty days after the public hearing on the Plan and on the issuance of the general obligation capital improvement plan bonds; and C. WHEREAS, the City Council hereby determines and declares that it is necessary and expedient to issue $7,000,000 General Obligation Capital Improvement Plan Bonds, Series 2019A (the "Bonds" or, individually, a "Bond"), pursuant to Minnesota Statutes, Section 475.521 and Chapter 475, to provide funds to finance the Project; and D. WHEREAS, other than the Bonds, the City no there are no other bonds issued by the City under Minnesota Statutes, Section 475.521; and E. WHEREAS, the City has heretofore determined, in accordance with Minnesota Statutes, Section 475.521, Subd. 4, that the maximum principal and interest to become due in any page 58 year on the Bonds issued by the City under Minnesota Statutes, Section 475.521, will be less than 0.16 percent of the estimated market value of property in the City; and F. WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"), as its independent municipal advisor for the sale of the Bonds and was therefore authorized to sell the Bonds by private negotiation in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9) and proposals to purchase the Bonds have been solicited by Ehlers; and G. WHEREAS, the proposals set forth on Exhibit A attached hereto were received by the Clerk, or designee, at the offices of Ehlers at 11:00 A.M. this same day pursuant to the Preliminary Official Statement for the Bonds, dated April 4, 2019; and H. WHEREAS, it is in the best interests of the City that the Bonds be issued in book- entry form as hereinafter provided; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Mendota Heights, Minnesota, as follows: 1. Acceptance of Proposal. The proposal of ______________________________ (the "Purchaser"), to purchase the Bonds, in accordance with the Preliminary Official Statement established for the Bonds, at the rates of interest hereinafter set forth, and to pay therefor the sum of $__________, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received, is hereby accepted and the Bonds are hereby awarded to the Purchaser. The Finance Director is directed to retain the deposit of the Purchaser and to forthwith return to the unsuccessful bidders their good faith checks or drafts. 2. Bond Terms. (a) Original Issue Date; Denominations; Maturities; Term Bond Option; Debt Limitations. The Bonds shall be dated May 8, 2019, as the date of original issue, be issued forthwith on or after such date in fully registered form, be numbered from R-1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized Denominations"), and shall mature on February 1 in the years and amounts as follows: Year Amount Year Amount 2021 $ 2029 $ 2022 2030 2023 2031 2024 2032 2025 2033 2026 2034 2027 2035 2028 As may be requested by the Purchaser, one or more term Bonds may be issued having mandatory sinking fund redemption and final maturity amounts conforming to the foregoing page 59 principal repayment schedule, and corresponding additions may be made to the provisions of the applicable Bond(s). The Bonds, together with any outstanding bonds of the City that are subject to the City's net debt limit, do not exceed the City's net debt limit. (b) Book Entry Only System. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository") will act as securities depository for the Bonds, and to this end: (i) The Bonds shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period"), shall at all times be in the form of a separate single fully registered Bond for each maturity of the Bonds; and for purposes of complying with this requirement under paragraphs 5 and 10 Authorized Denominations for any Bond shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Bond. (ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee"). (iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Bonds as securities depository (the "Participant") or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant (the "Beneficial Owner"). Without limiting the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Bonds, or (D) the consent given or other action taken by the Depository as the Registered Holder of any Bonds (the "Holder"). For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to certain Participants to whose accounts the Bonds are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Bond Registrar may treat as and deem the Depository to be the absolute owner of the Bonds for the purpose of payment of the principal of and premium, if any, and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to the Bonds, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers page 60 with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Bonds only to the Holder or the Holders of the Bonds as shown on the bond register, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Bond Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 10, references to the Nominee hereunder shall refer to such new Nominee. (vi) So long as any Bond is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, by the Bond Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book-entry Depository for the Bonds (said Letter of Representations, together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book-entry Depository for the Bonds, collectively hereinafter referred to as the "Letter of Representations"). (vii) All transfers of beneficial ownership interests in each Bond issued in book-entry form shall be limited in principal amount to Authorized Denominations and shall be effected by procedures by the Depository with the Participants for recording and transferring the ownership of beneficial interests in such Bonds. (viii) In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Bond Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Bond Registrar may establish a special record date for such consent or other action. The City or the Bond Registrar shall, to the extent possible, give the Depository notice of such special record date not less than 15 calendar days in advance of such special record date to the extent possible. (ix) Any successor Bond Registrar in its written acceptance of its duties under this Resolution and any paying agency/bond registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (c) Termination of Book-Entry Only System. Discontinuance of a particular Depository's services and termination of the book-entry only system may be effected as follows: (i) The Depository may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law. The City may terminate the page 61 services of the Depository with respect to the Bond if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book-entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners. (ii) Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute securities depository is willing to undertake the functions of the Depository hereunder can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terms, or if the City determines that it is in the best interests of the City or the Beneficial Owners of the Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds shall no longer be registered as being registered in the bond register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Bonds shall designate at that time, in accordance with paragraph 10. To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10, the Bonds will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of paragraph 10. (d) Letter of Representations. The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representations shall control. 3. Purpose. The Bonds shall provide funds to finance the Project. The total cost of the Project, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. Work on the Project shall proceed with due diligence to completion. The City covenants that it shall do all things and perform all acts required of it to assure that work on the Project proceeds with due diligence to completion and that any and all permits and studies required under law for the Project are obtained. 4. Interest. The Bonds shall bear interest payable semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 2020, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Year Interest Rate Maturity Year Interest Rate 2021 % 2029 % 2022 2030 2023 2031 2024 2032 2025 2033 2026 2034 2027 2035 2028 page 62 5. Redemption. All Bonds maturing on February 1, 2027, and thereafter shall be subject to redemption and prepayment at the option of the City on February 1, 2026, and on 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 maturities and the principal amounts within each maturity to be redeemed shall be determined by the City and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Bonds not more than sixty (60) days and not fewer than thirty (30) days prior to the date fixed for redemption. To effect a partial redemption of Bonds having a common maturity date, the Registrar prior to giving notice of redemption shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Registrar (with, if the City or Registrar so requires, a written instrument of transfer in form satisfactory to the City and Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the City shall execute (if necessary) and the Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 6. Bond Registrar. Bond Trust Services Corporation in Roseville, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 12. 7. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: page 63 UNITED STATES OF AMERICA STATE OF MINNESOTA DAKOTA COUNTY CITY OF MENDOTA HEIGHTS R-__ $_________ GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND, SERIES 2019A Interest Rate Maturity Date Date of Original Issue CUSIP ____% February 1, 20___ May 8, 2019 ___________ REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: _________________________________________ DOLLARS The City of Mendota Heights, Dakota County, Minnesota (the "Issuer"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for prepayment, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 2020, at the rate per annum specified above (calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of Bond Trust Services Corporation, in Roseville, Minnesota (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. So long as this Bond is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of principal of, premium, if any, and interest on this Bond and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution. Until termination of the page 64 book-entry only system pursuant to the Resolution, Bonds may only be registered in the name of the Depository or its Nominee. Optional Redemption. The Bonds of this issue (the "Bonds") maturing on February 1, 2027, and thereafter, are subject to redemption and prepayment at the option of the Issuer on February 1, 2026, and on 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 maturities and the principal amounts within each maturity to be redeemed shall be determined by the Issuer; and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Bonds not more than sixty (60) days and not fewer than thirty (30) days prior to the date fixed for redemption. Prior to the date on which any Bond or Bonds are directed by the Issuer to be redeemed in advance of maturity, the Issuer will cause notice of the call thereof for redemption identifying the Bonds to be redeemed to be mailed to the Bond Registrar and all Bondholders, at the addresses shown on the Bond Register. All Bonds so called for redemption will cease to bear interest on the specified redemption date, provided funds for their redemption have been duly deposited. Selection of Bonds for Redemption; Partial Redemption. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of the Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $7,000,000, all of like date of original issue and tenor, except as to number, maturity, interest rate and denomination, issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council on April 16, 2019 (the "Resolution"), to finance a portion of the costs associated with the acquisition and construction of a new fire station, as provided in the City's Capital Improvement page 65 Plan. This Bond is payable out of the General Obligation Capital Improvement Plan Bonds, Series 2019A Fund of the Issuer. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable solely in fully registered form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by the Holder's attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized Denomination or Denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owners. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided herein with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Qualified Tax-Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof page 66 and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Mendota Heights, Dakota County, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Clerk, the corporate seal of the Issuer having been intentionally omitted as permitted by law. Date of Registration: ________________________ BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. BOND TRUST SERVICES CORPORATION Roseville, Minnesota, Bond Registrar By____________________ Authorized Signature Registrable by: BOND TRUST SERVICES CORPORATION Payable at: BOND TRUST SERVICES CORPORATION CITY OF MENDOTA HEIGHTS, DAKOTA COUNTY, MINNESOTA /s/ Facsimile Mayor /s/ Facsimile Clerk page 67 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - _________________ as custodian for ________________________ (Cust) (Minor) under the _______________________________ Uniform Transfers to Minors Act (State) Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ______________________________________________________ the within Bond and does hereby irrevocably constitute and appoint _________________ attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated:_____________ _______________________________________ Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: ___________________________ Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: ________________________________________ ________________________________________ ________________________________________ (Include information for all joint owners if the Bond is held by joint account.) page 68 8. Execution. The Bonds shall be in typewritten form, shall be executed on behalf of the City by the signatures of its Mayor and Clerk and be sealed with the seal of the City; provided, as permitted by law, both signatures may be photocopied facsimiles and the corporate seal has been omitted. In the event of disability or resignation or other absence of either officer, the Bonds may be signed by the manual or facsimile signature of the officer who may act on behalf of the absent or disabled officer. In case either officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, the signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. 9. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on the Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and, by inserting as the date of registration in the space provided, the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue of May 8, 2019. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 10. Registration; Transfer; Exchange. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder, Bonds may be exchanged for Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the Holder making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the City. page 69 All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or the Holder's attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. The Clerk is hereby authorized to negotiate and execute the terms of said agreement. 11. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 12. Interest Payment; Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten days prior to the Special Record Date. 13. Treatment of Registered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of the Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 12) on, the Bond and for all other purposes whatsoever whether or not the Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. page 70 15. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Capital Improvement Plan Bonds, Series 2019A Fund" (the "Fund") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Bonds and the interest thereon have been fully paid. There shall be maintained in the Fund the following separate accounts: (a) Construction Account. To the Construction Account there shall be credited the proceeds of the sale of the Bonds. From the Construction Account there shall be paid all costs of issuance of the Bonds and all costs and expenses of financing the Project, including the cost of any construction contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Moneys in the Construction Account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bonds may also be used to the extent necessary to pay interest on the Bonds due prior to the anticipated date of commencement of the collection of taxes herein levied or covenanted to be levied; and provided further that if upon completion of the Project there shall remain any unexpended balance in the Construction Account, the balance shall be transferred by the City Council to the Debt Service Account. (b) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (i) $_________ of available funds of the City to be deposited at bond closing in an amount sufficient to pay interest on the Bonds due on or before February 1, 2020; (ii) all collections of taxes herein and hereafter levied for the payment of the Bonds; (iii) all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (iv) all investment earnings on funds held in the Debt Service Account; and (v) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said account as provided by law. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Construction Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under then applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"). page 71 16. Tax Levy; Coverage Test. To provide moneys for payment of the principal and interest on the Bonds there is hereby levied upon all of the taxable property in the City a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Years of Tax Levy Years of Tax Collection Amount See Attached Schedule in Exhibit B The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levies shall be irrepealable so long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 17. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full, provided that notice of redemption thereof has been duly given. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if notice of redemption as herein required has been duly provided for, to such earlier redemption date. 18. Compliance With Reimbursement Bond Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1.150-2 (the "Reimbursement Regulations") applicable to the "reimbursement proceeds" of the Bonds, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure"). The City hereby certifies and/or covenants as follows: (a) Not later than sixty days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration") which effectively (i) page 72 states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the general functional purpose thereof from which the Reimbursement Expenditure was to be paid (collectively the "Project"); and (iii) states the maximum principal amount of debt expected to be issued by the City for the purpose of financing the Project; provided, however, that no such Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed twenty percent of the "issue price" of the Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of $100,000 or five percent of the proceeds of the Bonds. (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Bonds or any of the other types of expenditures described in Section 1.150-2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Bonds and in all events within the period ending on the date which is the later of three years after payment of the Reimbursement Expenditure or one year after the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30 days after the Bonds are issued, shall be treated as made on the day the Bonds are issued. Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph upon receipt of an opinion of its Bond Counsel for the Bonds stating in effect that such action will not impair the tax-exempt status of the Bonds. 19. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 20. Certificate of Registration. A certified copy of this resolution is hereby directed to be filed with the County Auditor of Dakota County, Minnesota, together with such other information as the County Auditor shall require, and to obtain the County Auditor's Certificate that the Bonds have been entered in the County Auditor's Bond Register and that the tax levy required by law has been made. 21. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the page 73 issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 22. Continuing Disclosure. The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereinafter described to: (a) Provide or cause to be provided to the Municipal Securities Rulemaking Board (the "MSRB") by filing at www.emma.msrb.org in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. (b) Provide or cause to be provided to the MSRB notice of the occurrence of certain events with respect to the Bonds in not more than ten (10) business days after the occurrence of the event, in accordance with the Undertaking. (c) Provide or cause to be provided to the MSRB notice of a failure by the City to provide the annual financial information with respect to the City described in the Undertaking, in not more than ten (10) business days following such occurrence. (d) The City agrees that its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holders; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Clerk of the City or any other officer of the City authorized to act in their place (the "Officers") are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Officers. 23. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or to use the Project, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 24. Tax-Exempt Status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (i) requirements relating to temporary periods for investments, (ii) limitations on amounts page 74 invested at a yield greater than the yield on the Bonds, and (iii) the rebate of excess investment earnings to the United States. The City expects to satisfy the twenty-four month exemption for gross proceeds of the Bonds as provided in Section 1.148-7(d)(1) of the Regulations. The Mayor, the Finance Director or either one of them, are hereby authorized and directed to make such elections as to arbitrage and rebate matters relating to the Bonds as they deem necessary, appropriate or desirable in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 25. Designation of Qualified Tax-Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representation: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2019 will not exceed $10,000,000; (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2019 have been designated for purposes of Section 265(b)(3) of the Code; and (f) the aggregate face amount of the Bonds does not exceed $10,000,000. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 26. Official Statement. The Official Statement relating to the Bonds prepared and distributed by Ehlers is hereby approved and the officers of the City are authorized in connection with the delivery of the Bonds to sign such certificates as may be necessary with respect to the completeness and accuracy of the Official Statement. 27. Payment of Issuance Expenses. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to KleinBank, Chaska, Minnesota on the closing date for further distribution as directed by the City's municipal advisor, Ehlers. 28. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. page 75 29. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. The motion for the adoption of the foregoing resolution was duly seconded by member _____________ and, after a full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon the resolution was declared duly passed and adopted. page 76 STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF MENDOTA HEIGHTS I, the undersigned, the Clerk of the City of Mendota Heights, Minnesota, do hereby certify that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council, duly called and held on the date therein indicated, insofar as such minutes relate to authorizing the issuance and awarding the sale of $7,000,000 General Obligation Capital Improvement Plan Bonds, Series 2019A. WITNESS my hand on April 16, 2019. ________________________________ Clerk page 77 EXHIBIT A PROPOSALS [To be supplied by Ehlers & Associates, Inc.] page 78 EXHIBIT B TAX LEVY SCHEDULE [To be supplied by Ehlers & Associates, Inc.] page 79 STATE OF MINNESOTA COUNTY AUDITOR'S CERTIFICATE COUNTY OF DAKOTA AS TO TAX LEVY AND REGISTRATION I, the undersigned, being the duly qualified and acting County Auditor of Dakota County, Minnesota, do hereby certify that on the date hereof, there was filed in my office a certified copy of a resolution adopted on April 16, 2019 by the City Council of the City of Mendota Heights, Minnesota, authorizing the issuance of $7,000,000 General Obligation Capital Improvement Plan Bonds, Series 2019A (the "Bonds"), and levying a tax for the payment thereof, together with full information regarding the Bonds for which the tax was levied; and the Bonds have been entered in my Bond Register and the tax levy required b y law has been made. WITNESS my hand and the seal of the County Auditor on __________________, 2019. ___________________________________ County Auditor (SEAL) page 80 April 4, 2019 STATEMENT OF PROPOSAL OF INVESTMENT ADVISORY SERVICES FOR City of Mendota Heights Ryan Miles, CPFIM Senior Investment Advisor rmiles@ehlers-inc.com 651-697-8590 Ken Herdeman, CPFIM President kherdeman@ehlers-inc.com 262-796-6184 Dawn Lawson, CCM Director of Client Engagement dlawson@ehlers-inc.com 262.796.6174 page 81 April 10, 2019 City of Mendota Heights Kristen Schabacker Finance Director Re: Investment Advisory Services On behalf of Ehlers, we are pleased to present this proposal to provide investment advisory services to the City of Mendota Heights. We are confident that our proposal will demonstrate our team’s collective qualifications to deliver a full scope of investment services - and to surpass your expectations for quality and value. For more than 60 years, Ehlers has helped municipal clients build strong and vibrant communities through financial planning, debt issuance and management, economic development consulting, arbitrage and investment advisory services. The following factors set us apart from other firms: Accessible Team Players. We pride ourselves on being responsive, meeting short deadlines and having more than one Investment Advisor assigned to each client to ensure we meet their needs. Independent, Best-Practice Approach. Ehlers’ fiduciary responsibility is to you and you alone. The foundation of our firm consists of one simple tenet: Financial advice should always be free of conflict of interest and adhere to industry best practices. Our promise to our clients is equally simple: We will always place your interests first, delivering financial advice and solutions that fulfill your needs as cost-effectively as possible and provide the maximum benefit to your community. Client-First Values. Ehlers prides itself on transparent communication and encourages our clients to call us for any assistance that they may need. Ehlers’ investment advisors will always be transparent with fees and clearly communicate them. At the core, we propose to provide the City with ongoing dialogue and idea-sharing, independent analysis, presentation of customized options, and a competitive, value-oriented fee structure. We appreciate your consideration and look forward to partnering with you in the best interest of the City of Mendota Heights. Respectfully submitted, Ryan Miles, CPFIM Senior Investment Advisor page 82 Ehlers Investment Distinctives “ Building Communities. It’s what we do.” Ehlers Investments is a Registered Investment Adviser, registered with the Securities and Exchange Commission. Ehlers Investments provides all forms of local governments with assistance and expertise in investing their general funds and bond proceeds. We currently work with 115+ clients and manage over $700 Million in assets. Ehlers is a fiduciary, legally bound and committed to serve only the best interest of our clients. Ehlers is uniquely qualified to manage the City of Mendota Height’s investments due to our access to investment markets, investment resources, and over 75 years of combined experience in investment management, municipal finance, banking and treasury management. Safety Safety of principal is our foremost objective. Investments shall be undertaken in a manner to ensure the preservation of capital. Our goals will be to mitigate credit and interest rate risk while maximizing return. Liquidity Our investment portfolios will remain sufficiently liquid as to meet all cash f low requirements. A cash flow forecast will be developed and monitored. Yield/Return Our investment portfolios will be designed with the objective of attaining an agreed upon market rate of return, considering the investment risk constraints of safety and liquidity needs. Specialized Monthly Reporting All Trading Done "In House" Exclusively Municipal Investment Advisors Portfolio Investment Strategy Accessible Team of Advisors Extension of your Finance Office Active Portfolio Managment Investment Fiduciary Integrated Arbitrage Services Robust Investment Reporting Cash Flow Forecasting & Monitoring page 83 Prudent Investor Rule – Fiduciary vs Suitability Standard Ehlers Investments is a Registered Investment Advisor and held to a Fiduciary Standard, to act in the best interests of our clients, in the same way as your Municipal Advisor. Other types of investment professionals are held to a Suitability standard, to only recommend investments that might be suitable to your needs but not necessarily in your best interest. Fiduciary Acts in Good Faith Put Clients Interest First Discloses All Conflicts of Interest Never Misleads Client Provides Full Disclosure page 84 Ehlers Investment Process We engage in a detailed cash-flow analysis for our clients prior to portfolio construction and security selection recommendations. This analysis assists Ehlers in determining the proper portfolio construction with an eye towards avoidance of selling investments to meet liquidity needs. Our primary focus is on a buy-and-hold strategy to balance liquidity and maximize overall yield. Ehlers recommends targeting maturities based on long range budget planning, cash forecasting, as well as maintaining sufficient cash or near cash assets (maturities of 90 days or less) to meet liquidity needs. Focus shall be placed on U.S. Government guaranteed issues, agency issues, negotiable bank CD’s in FDIC-insured amounts, commercial paper, high-quality corporate debt, and high-quality general obligation municipal bonds. No issue should carry a rating lower than the lowest in the “A” category. Analyze and Construct Cash Flow Forecast Develop Optimal Investment Strategy with City and Municipal Advisor Investments are Purchased Based on Strategy, Investment Policy, in Accordance with State Statute Portfolio is Actively Monitored to Enhance Earnings and Minimize Arbitrage Investments Mature and Disbursed in Accordance with Cash Needs or ReInvested to Strategy page 85 General Fund and Bond Proceeds Investment Risks An investment strategy involving fixed income securities is a key component for any City in minimizing market or interest rate risk in a falling rate environment. Utilizing a buy and hold investment strategy utilizing investment grade fixed income securities “locks in” investment returns protecting against future downside interest rate risk or that interest rates could fall. Fixed income investing will also provide a predictable source of investment revenue for budgeting purposes of the life of the project. Ehlers Investments constructs and carefully monitors client portfolios to guard against all these various investment risks. Credit Risk Concentration Risk Liquidity Risk Reputation Risk Custodial Credit Risk Arbitrage Risk Market or Interest Rate Risk page 86 Ehlers Investment Pricing Our Fee is All Encompassing and Includes Ehlers does not impose a minimum fee for investment advisory services. Ehlers receives no additional compensation other than our stated fee. Ehlers stated fees includes all meetings and travel expenses. We charge no other management, transaction, check writing, ACH, or wire fees. We do not receive any compensation from the various broker dealers we work with. It is important to note that your local bank might charge an incoming wire fee. TD Ameritrade Institutional, though not an affiliate of Ehlers Investment Partners, provides safekeeping and custodial services for our clients and holds assets of our clients in a custodial account in the client’s name. Ehlers does not receive any soft dollar compensation. Account Setup Portfolio Construction Cash Flow Forecasting All Investment Trades Monthly Investment Performance reporting Monthly Cash Flow Projection reporting Annual GASB 72 reporting Annual Portfolio Review and Presentation Custodial Services thru TD Ameritrade Arbitrage reporting, as needed Investment Policy Development and Monitoring Investment Strategy Development Best Price Trade Execution Ongoing Account Maintenance Local Investment Advice and Support Ehlers proposes to manage the City's 2019A Bond investment portfolio for an annual fee, assessed monthly, based on a graduated scale of assets under management, beginning at 0.20% and declining 0.025% for additional increments. Our fee is assessed monthly, deducted from interest earnings. page 87 Ehlers is the joint marketing name of the following affiliated businesses (collectively, the “Affiliates”): Ehlers & Associates, Inc. (“EA”), a municipal advisor registered with the Municipal Securities Rulemaking Board (“MSRB”) and the Securities and Exchange Commission (“SEC”); Ehlers Investment Partners, LLC (“EIP”), an investment adviser registered with the SEC; and Bond Trust Services Corporation (“BTS”), holder of a limited banking charter issued by the State of Minnesota. Where an activity requires registration as a municipal advisor pursuant to Section 15B of the Exchange Act of 1934 (Financial Management Planning and Debt Issuance & Management), such activity is or will be performed by EA; where an activity requires registration as an investment adviser pursuant to the Investment Advisers Act of 1940 (Investments and Treasury Management), such activity is or will be performed by EIP; and where an activity requires licensing as a bank pursuant to applicable state law (paying agent services shown under Debt Issuance & Management), such activity is or will be performed by BTS. Activities not requiring registration may be performed by any Affiliate. This communication does not constitute an offer or solicitation for the purchase or sale of any investment (including without limitation, any municipal financial product, municipal security, or other security) or agreement with respect to any investment strategy or program. This communication is offered without charge to clients, friends, and prospective clients of the Affiliates as a source of general information about the services Ehlers provides. This communication is neither advice nor a recommendation by any Affiliate to any person with respect to any municipal financial product, municipal security, or other security, as such terms are defined pursuant to Section 15B of the Exchange Act of 1934 and rules of the MSRB. This communication does not constitute investment advice by any Affiliate that purports to meet the objectives or needs of any person pursuant to the Investment Advisers Act of 1940 or applicable state law. SCHEDULE OF FEES Fee schedule, effective date of 4/10/2019 for the City of Mendota Heights (“Client”) for services related to the Investment Advisory Agreement between Client and Ehlers Investment Partners, LLC (“Adviser”). Investment advisory fees shall be incurred for all assets under the management of Adviser. Investment advisory fees will be charged according to the schedule below based on average daily assets under management calculated on market value of said assets, payable monthly. Fees are all inclusive of other services provided by Adviser to the Client under an investment advisory engagement. ANNUALIZED RATE 0.200% 0.175% 0.150% ASSETS UNDER MANAGEMENT Less than or equal to $2,499,999 at Greater than or equal to $2,500,000 up to $9,999,999 at Greater than or equal to $10,000,000 up to $19,999,999 at Equal to or greater than $20,000,000 0.125% Initial cash forecast services and investment recommendations are included. Fees as described above apply to actual assets under management if/when investment plan(s) are implemented. Fee arrangements will be memorialized under the Investment Advisory Agreement. page 88 Ehlers Investment Pricing vs Competitor Comparison Ehlers Investment management fee is tiered and reduced each month as the construction project is paid down, typically resulting in lower overall fees for the life of the project compared to upfront broker/dealer fees. See hypothetical example below. Ehlers Investments Hypothetical Investment Return Ehlers Investments estimates a portfolio return of $87,540 for a hypothetical construction draw period of approximately 12 months. This could result in a hypothetical investment return net of our fees of an additional $80,366.39 to be used for the construction project. page 89 Your Investment Team Ryan joined Ehlers in 2018 as Senior Investment Advisor. He brings more than 10 years’ financial and investment management experience to his role. He received his Bachelor of Arts in Business Administration from Eastern Washington University and is currently pursuing his MBA in Finance through LSU-Shreveport. Ryan holds his Series 65 license and is a Certified Public Funds Investment Manager (CPFIM). Ryan will be your primary point of contact and will work in partnership with your Finance Dept staff, Municipal Advisor, and/or Project Managers in investment strategy, cash flow forecasting, investment policy development, investing your funds, and portfolio monitoring. President of our Investments and Treasury Management group, Ken oversees our Investment Advisors and operations. Ken has over 30 years’ experience in investments, banking and treasury management. He specialized in money market investments, cash forecasting, and debt management. He received his Bachelor of Arts in Business Administration and Finance from the University of Wisconsin Milwaukee and is a graduate of the National School of Bank Investments, University of Colorado. Ken holds his Series 65 license and is a Certified Public Funds Investment Manager (CPFIM). As a Director of Client Engagement with the firm, Dawn works closely with Ehlers’ advisory teams and other investment professionals to provide analysis and monthly performance reporting for our clients. Prior to joining Ehlers, she spent more than 20 years as a treasury management sales consultant for two super regional banks. She received her Bachelor of Science in Business Economics from the University of Wisconsin Platteville and her MBA in Finance from the University of Michigan. Dawn holds her Series 65 license and is a Certified Cash Manager (CCM). Dawn will act as a direct resource for you in cash flow management, placing investments, funds disbursement requests, and portfolio reporting She will partner with Ryan to coordinate portfolio reviews and re-investment opportunities. Ryan Miles, CPFIM Senior Investment Advisor (651) 697-8590 rmiles@ehlers-inc.com 3060 Centre Pointe Drive Roseville, MN 55113 Dawn Lawson Director of Client Engagement (262)796-6174 dlawson@ehlers-inc.com Kenneth Herdeman, CPFIM President & Senior Investment Advisor (262)796-6176 kherdeman@ehlers-inc.com page 90 ONO rgki EHLERS LEADERS IN PUBLIC FINANCE April 16, 2019 Sale Day Report for City of Mendota Heights, Minnesota $7,000,000 General obligation Capital Improvement Plan Bonds, Series 2019A MENDOTA HEIGHTS*za~4� Prepared by: Stacie Kvilvang, CIPMA Senior Municipal Advisor And Jason Aarsvold, CIPMA Senior Municipal Advisor BUILDING COMMUNITIES. IT'S WHAT WE DO. .J info4ehlers-inc.com 1 (800) 552-1171 www.ehlers-inc.com Sale Day Report — April 16, 2019 City of Mendota Heights, Minnesota $7,000,000 General Obligation Capital Improvement Plan Bonds, Series 2019A Purpose: Financing the remodeling and expansion of the fire station. Rating: S&P Global Ratings "AAA" Number of Bids: 8 Low Bidder: Piper Jaffray, Minneapolis, Minnesota Comparison from Low Bid Lowest to Highest 2.5264% Bid: (TIC as bid) High Bid Interest Difference 2.9354% $327,995 Summary of Sale Results: Principal Amount*: $7,000,000 Underwriter's Discount: $41,238 Reoffering Premium: $401,409 True Interest Cost: 2.5338% Costs of Issuance: $65,840 Yield: 1.65%-2.65% Total Net P&I $ Notes: The City will retain the $401,409 premium to increase the net proceeds for the project. Bond Trust Services Corporation, Roseville, Minnesota will serve as Paying Agent on the Bonds. Closing Date: May 8, 2019 City Council Adopt a resolution awarding the sale of $7,000,000 General Obligation Action: Capital Improvement Plan Bonds, Series 2019A. Attachments: Bid Tabulation • Sources and Uses of Funds • Updated Debt Service Schedules • Rating Report • Bond Resolution (Distributed in City Council Packets) Sale Day Report City of Mendota Heights, Minnesota `-, April 16, 2019 EHLERS BID TABULATION $7,000,000 General Obligation Capital Improvement Plan Bonds, Series 2019A City of Mendota Heights, Minnesota SALE: April 16, 2019 AWARD: PIPER JAFFRAY Rating: S&P Global Ratings "AAA" Tax Exempt - Bank Qualified NET TRUE MATURITY REOFFERING INTEREST INTEREST NAME OF BIDDER (February 1) RATE YIELD PRICE COST RATE PIPER JAFFRAY Minneapolis, Minnesota Cantor Fitzgerald 2021 4.000% 1.650% 2022 4.000% 1.700% 2023 4.000% 1.750% 2024 4.000% 1.800% 2025 4.000% 1.850% 2026 4.000% 1.900% 2027 3.000% 2.000% 2028 3.000% 2.050% 2029 3.000% 2.150% 2030 3.000% 2.250% 2031 3.000% 2.350% 2032 3.000% 2.450% 2033 3.000% 2.500% 2034 3.000% 2.600% 2035 3.000% 2.650% $7,364,013.10 $1,673,767.46 2.5264% * Subsequent to bid opening the individual maturity amounts were adjusted. Adjusted Price - $7,360,171.55 Adjusted Net Interest Cost - $1,705,318.87 Adjusted TIC - 2.5338% BUILDING COMMUNITIES. IT'S WHAT WE DO. V--� info@ehlers-inc.com 1 (800) 552-1171 S www.ehiers-inc.com NET TRUE MATURITY REOFFERING INTEREST INTEREST NAME OF BIDDER (February 1) RATE YIELD PRICE COST RATE SUNTRUST ROBINSON $7,350,630.85 $1,687,149.71 2.5497% HUMPHREY Nashville, Tennessee BAIRD $7,343,121.90 $1,694,658.66 2.5628% Milwaukee, Wisconsin FTN FINANCIAL CAPITAL $7,235,894.90 $1,694,571.77 2.5753% MARKETS Memphis, Tennessee NORTHLAND SECURITIES, INC. $7,294,833.55 $1,742,947.01 2.6475% Minneapolis, Minnesota RAYMOND JAMES & $7,319,925.35 $1,752,642.71 2.6583% ASSOCIATES, INC. Memphis, Tennessee BNY MELLON CAPITAL $7,740,590.80 $1,940,678.64 2.8307% MANAGEMENT Pittsburgh, Pennsylvania IFS SECURITIES $7,679,507.25 $2,001,762.19 2.9354% Atlanta, Georgia Bid Tabulation April 16, 2019 City of Mendota Heights, Minnesota $7,000,000 General Obligation Capital Improvement Plan Bonds, Series 2019A Page 2 Mendota Heights, Minnesota $7,000,000 General Obligation CIP Bonds, Series 2019A Sources & Uses Dated 05/08/2019 1 Delivered 05/08/2019 Sources Of Funds Par Amount of Bonds $7,000,000.00 Reoffering Premium 401,409.05 Total Sources $7,401,409.05 Uses Of Funds Total Underwriter's Discount (0.589%) 41,237.50 Costs of Issuance 65,840.00 Deposit to Project Fund 7,294,331.55 Total Uses Series 2019A GO CI Bonds I SINGLE PURPOSE 1 4/16/2019 1 11:19 AM EHLERS L. F=np F. Fi'i IN VII BI_IC FINAN(:t $7,401,409.05 Mendota Heights, Minnesota $7,000,000 General Obligation CIP Bonds, Series 2019A Net Debt Service Schedule Total $7,000,000.00 - $2,0659490.42 $9,065,490.42 $9,065,490.42 Series 2019A GO CIP Bonds I SINGLE PURPOSE 1 4/16/2019 1 11:19 AM �EHLERS Fiscal Date Principal Coupon Interest Total P+I Net New D/S Total 05/08/2019 - - - - 02/01/2020 170,840.42 170,840.42 170,840.42 170,840.42 08/01/2020 - - 116,925.00 116,925.00 116,925.00 - 02/01/2021 360,000.00 4.000% 116,925.00 476,925.00 476,925.00 593,850.00 08/01/2021 - - 109,725.00 109,725.00 109,725.00 - 02/01/2022 375,000.00 4.000% 109,725.00 484,725.00 484,725.00 594,450.00 08/01/2022 - - 102,225.00 102,225.00 102,225.00 - 02/01/2023 390,000.00 4.000% 102,225.00 492,225.00 492,225.00 594,450.00 08/01/2023 - - 94,425.00 94,425.00 94,425.00 - 02/01/2024 405,000.00 4.000% 94,425.00 499,425.00 499,425.00 593,850.00 08/01/2024 - - 86,325.00 86,325.00 86,325.00 - 02/01/2025 420,000.00 4.000% 86,325.00 506,325.00 506,325.00 592,650.00 08/01/2025 - - 77,925.00 77,925.00 77,925.00 - 02/01/2026 435,000.00 4.000% 77,925.00 512,925.00 512,925.00 590,850.00 08/01/2026 - - 69,225.00 69,225.00 69,225.00 - 02/01/2027 455,000.00 3.000% 69,225.00 524,225.00 524,225.00 593,450.00 08/01/2027 - - 62,400.00 62,400.00 62,400.00 - 02/01/2028 470,000.00 3.000% 62,400.00 532,400.00 532,400.00 594,800.00 08/01/2028 - - 55,350.00 55,350.00 55,350.00 - 02/01/2029 480,000.00 3.000% 55,350.00 535,350.00 535,350.00 590,700.00 08/01/2029 - - 48,150.00 48,150.00 48,150.00 - 02/01/2030 495,000.00 3.000% 48,150.00 543,150.00 543,150.00 591,300.00 08/01/2030 - - 40,725.00 40,725.00 40,725.00 - 02/01/2031 510,000.00 3.000% 40,725.00 550,725.00 550,725.00 591,450.00 08/01/2031 - - 33,075.00 33,075.00 33,075.00 - 02/01/2032 525,000.00 3.000% 33,075.00 558,075.00 558,075.00 591,150.00 08/01/2032 - - 25,200.00 25,200.00 25,200.00 - 02/01/2033 545,000.00 3.000% 25,200.00 570,200.00 570,200.00 595,400.00 08/01/2033 - - 17,025.00 17,025.00 17,025.00 - 02/01/2034 560,000.00 3.000% 17,025.00 577,025.00 577,025.00 594,050.00 08/01/2034 - - 8,625.00 8,625.00 8,625.00 - 02/01/2035 575,000.00 3.000% 8,625.00 583,625.00 583,625.00 592,250.00 Total $7,000,000.00 - $2,0659490.42 $9,065,490.42 $9,065,490.42 Series 2019A GO CIP Bonds I SINGLE PURPOSE 1 4/16/2019 1 11:19 AM �EHLERS Mendota Heights, Minnesota $7,000,000 General Obligation CIP Bonds, Series 2019A Debt Service Schedule 105% Date Principal Coupon Interest Total P+I Overlevy 02/01/2020 - - 170,840.42 170,840.42 179,382.44 02/01/2021 360,000.00 4.000% 233,850.00 593,850.00 623,542.50 02/01/2022 375,000.00 4.000% 219,450.00 594,450.00 624,172.50 02/01/2023 390,000.00 4.000% 204,450.00 594,450.00 624,172.50 02/01/2024 405,000.00 4.000% 188,850.00 593,850.00 623,542.50 02/01/2025 420,000.00 4.000% 172,650.00 592,650.00 622,282.50 02/01/2026 435,000.00 4.000% 155,850.00 590,850.00 620,392.50 02/01/2027 455,000.00 3.000% 138,450.00 593,450.00 623,122.50 02/01/2028 470,000.00 3.000% 124,800.00 594,800.00 624,540.00 02/01/2029 480,000.00 3.000% 110,700.00 590,700.00 620,235.00 02/01/2030 495,000.00 3.000% 96,300.00 591,300.00 620,865.00 02/01/2031 510,000.00 3.000% 81,450.00 591,450.00 621,022.50 02/01/2032 525,000.00 3.000% 66,150.00 591,150.00 620,707.50 02/01/2033 545,000.00 3.000% 50,400.00 595,400.00 625,170.00 02/01/2034 560,000.00 3.000% 34,050.00 594,050.00 623,752.50 02/01/2035 575,000.00 3.000% 17,250.00 592,250.00 621,862.50 Total $7,000,000.00 - $2,065,490.42 $9,065,490.42 $9,518,764.94 Significant Dates Dated First Coupon Date Yield Statistics Bond Year Dollars Average Life Average Coupon Net Interest Cost (NIC) True Interest Cost (TIC) Bond Yield for Arbitrage Purposes All Inclusive Cost (AIC) IRS Form 8038 Net Interest Cost Weighted Average Maturity Series 2019A GO CIP Bonds I SINGLE PURPOSE 1 4/16/2019 1 11:19 AM EHLERS 5/08/2019 2/01/2020 $65,398.89 9.343 Years 3.1582959% 2.6075655% 2.5338614% 2.2088710% 2.6473919% 2.4288378% 9.257 Years Mendota Heights, Minnesota $7,000,000 General Obligation CIP Bonds, Series 2019A Detail Costs Of Issuance Dated 05/08/2019 1 Delivered 05/08/2019 COSTS OF ISSUANCE DETAIL Municipal Advisor $37,950.00 Bond Counsel (Briggs and Morgan) $13,000.00 Rating Agency Fee (S&P) $13,500.00 Paying Agent (Bond Trust Services) $800.00 Dakota County Fee $390.00 Post Issuance Compliance Fee $200.00 TOTAL $65,840.00 Series 2019A GO CIP Bonds I SINGLE PURPOSE 1 4/16/2019 1 11:19 AM g�EHLERSfJ'l�I�I.I lJGF S&P Global Ratings Rati ngsDi rect@ Summary: Mendota Heights, Minnesota; General Obligation Primary Credit Analyst: Daniel E Hughes, Chicago (1) 312-233-7054; daniel.hughes@spglobal.com Secondary Contact: David H Smith, Chicago + 1 (312) 233 7029; david.smith@spglobal.com Table Of Contents ................................................................................. .... ................... Rationale Outlook Related Research www.spgiobaL.com/ratingsdirect April 11, 2019 1 E'er Mendota Heights, Minnesota; General Obligation US$7.0 mil GO bnds ser 2019A dtd 05/08/2019 due 02/01/2035 Long Term Rating AAA/Stable New Mendota Heights GO bnds ser 2018A dtd 11/01/2018 due 02/01/2021-2030 Long Term Rating AAA/Stable Affirmed Mendota Heights GO rfdg bnds Long Term Rating AAA/Stable Affirmed Mendota Heights GO Long Term Rating AAA/Stable Affirmed Mendota Heights GO Long Term Rating AAA/Stable Affirmed Rationale S&P Global Ratings assigned its 'AAA' long-term rating to Mendota Heights, Minn.'s series 2019A general obligation (GO) capital improvement bonds. At the same time, we affirmed our 'AAA' long-term rating on the city's previously issued GO debt. The outlook is stable. A pledge of the city's full -faith -credit -and -resources and an agreement to levy ad valorem property taxes without limitation as to rate or amount secures the bonds. The city intends to issue approximately $7 million in GO debt and proceeds will be used to expand and remodel the city's existing fire station. The city's' GO bonds are eligible to be rated above the sovereign because we believe the city can maintain better credit characteristics than the U.S. can in a stress scenario. Under our criteria, "Ratings Above The Sovereign --Corporate And Government Ratings: Methodology And Assumptions" (published Nov. 19, 2013, on RatingsDirect), U.S. local governments are considered to have moderate sensitivity to country risk. The institutional framework in the U.S. is predictable for local governments, allowing them significant autonomy, independent treasury management, and no history of government intervention. Mendota Heights is a wealthy suburb located just south of St. Paul. Due to its strong and embedded financial management policies and practices, it has maintained strong financial performance and very strong available reserves near 100% of general fund expenditures. The city continues to experience increasing home values and economic growth, and we expect this to continue during the next few fiscal years. In addition, we believe financial performance and reserves will remain strong as the city is not currently not experiencing any significant budgetary pressures. The 'AAA' rating is based on our opinion of the city's: • Very strong economy, with access to a broad and diverse metropolitan statistical area (MSA); www.spgtobal.com/ratingsdirect April 77, 2019 2 Summary: Mendota Heights, Minnesota; General Obligation • Strong management, with good financial policies and practices under our Financial Management Assessment methodology; • Strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2017; • Very strong budgetary flexibility, with a high available fund balance in fiscal 2017 of 105% of operating expenditures; • Very strong liquidity, with total government available cash at 101.4% of total governmental fund expenditures and 6.7x governmental debt service, and access to external liquidity we consider strong; • Weak debt and contingent liability position, with debt service carrying charges at 15.2% of expenditures and net direct debt that is 172.8% of total governmental fund revenue, but rapid amortization, with 69.7% of debt scheduled to be retired in 10 years; and • Strong institutional framework score. Very strong economy We consider Mendota Heights' economy very strong. The city, with an estimated population of 11,036, is located in Dakota County in the Minneapolis -St. Paul -Bloomington MSA, which we consider to be broad and diverse. The city has a projected per capita effective buying income of 211% of the national level and per capita market value of $192,109. Overall, the city's market value grew by 2.6% over the past year to $2.1 billion in 2018. The county unemployment rate was 3.0% in 2017. The 10 -square -mile city is located approximately two miles south of St. Paul. The city's tax base is primarily residential (68%) and commercial/industrial (27%). Net tax capacity has recovered since the recession, with six consecutive years of growth since 2012, indicating stabilization in the housing market and property values and reflecting positive trends in the wider Twin Cities MSA. Officials expect this growth to continue, estimating another increase in market value of approximately 8.9%. Based on improving residential values, along with new residential development, we expect the city's property values to continue to improve and the area economy to remain very strong. Strong management We view the city's management as strong, with good financial policies and practices under our Financial Management Assessment methodology, indicating financial practices exist in most areas, but that governance officials might not formalize or monitor all of them on a regular basis. In developing its budget, the city examines up to three years of historical information and uses line -item budgeting. In addition, the city provides quarterly budget -to -actual updates to the city council regarding budgeting performance, and the council can amend the budget if needed. In 2016, the city developed a 10 -year long-term financial plan, which it continues to use as a guide for future financial planning. While this plan is not currently updated annually, the city is currently working on updating the plan. It also annually updates a five-year capital improvement plan that identifies sources and uses of funds. Mendota Heights has its own investment policy and reports its holdings and performance monthly. It does not have its own debt management policy but adheres to state guidelines. The city recently revised its formal reserve policy, which www.spgiobal.com/ratingsdirect April 11, 2019 3 Summary: Mendota Heights, Minnesota; General Obligation now requires the city to hold at least 75% of operating expenditures to support cash flow needs based on the timing of the receipt of tax revenues. The city has exceeded this level historically, and we expect it will continue to do so. The most recent revision to the policy increased the minimum percentage of expenditures from 65%. Strong budgetary performance Mendota Heights' budgetary performance is strong in our opinion. The city had operating surpluses of 15% of expenditures in the general fund and of 14.6% across all governmental funds in fiscal 2017. Although we expect budgetary performance to remain strong, our assessment accounts for the fact that we believe the city will likely not experience a surplus of more than 5% of expenditures during the next two fiscal years. The city outperformed its budget in fiscal 2017, posting a $1.1 million operating surplus in the general fund. Contributing to this result were higher -than -budgeted licensing and permit fees. In addition, the city's police department recorded lower expenditures in part due to an open captain position that was unfilled during the year and lower street department expenditures. Based on preliminary results for fiscal 2018, management again expects to outperform its budget and projects a surplus of at least $500,000. Licenses and permit revenue is came in better than budgeted and the city still had vacancies in its police department resulting in expenditures coming in lower than budgeted. With regard to total governmental funds performance, we expect a positive result, similar to those of previous years. While we expect the city's ongoing trend of positive operating results to continue in 2018, we anticipate the surplus to be smaller than it was in 2017. For fiscal 2019, we understand the city has adopted a 9.82% levy increase and expects to use approximately $300,000 of general fund reserves to pay for capital purchases. Property taxes typically account for roughly three-quarters of general fund revenue. Given the city's growing tax base and the lack of expenditure pressure, we expect budgetary performance to remain strong. Very strong budgetary flexibility Mendota Heights' budgetary flexibility is very strong, in our view, with a high available fund balance in fiscal 2017 of 105% of operating expenditures, or $8 million. We expect the available fund balance to remain above 75% of expenditures for the current and next fiscal years, which we view as a positive credit factor. We expect the city to maintain reserves in excess of 75% of general fund expenditures, even as the council plans to use $300,000 of reserves in 2019 for equipment purchases. Our expectation is based on the city's trend of adopting balanced budgets and exceeding revenue forecasts, and its recent revision of its fund balance policy requiring it to maintain 75% in reserve. The city strives to maintain high general fund reserves to provide for cash flow requirements and contingency needs because it receives its major revenues (including property taxes) in the second half of its fiscal year. Very strong liquidity In our opinion, Mendota Heights' liquidity is very strong, with total government available cash at 101.4% of total governmental fund expenditures and 6.7x governmental debt service in 2017. In our view, the city has strong access to external liquidity if necessary. www.spglobal.com/ratingsdirect April 11, 2019 4 Summary: Mendota Heights, Minnesota; General Obligation The city's total unrestricted cash holdings exceed $10.6 million, and given its strong trend of positive operating results and commitment to maintain a very high level of reserves, we do not expect its cash position to change significantly over the next two years. Most investments are held in money-market accounts and highly rated securities. We believe the city has no significant outstanding contingent liabilities, including no outstanding direct -placement or privately purchased debt. Weak debt and contingent liability profile In our view, Mendota Heights' debt and contingent liability profile is weak. Total governmental fund debt service is 15.2% of total governmental fund expenditures, and net direct debt is 172.8% of total governmental fund revenue. Approximately 69.7% of the direct debt is scheduled to be repaid within 10 years, which is in our view a positive credit factor. Including the 2019 GO bonds, the city has approximately $20.7 million in net direct debt. Following this issuance, the city intends to issue up to $1.7 million in additional GO debt this year for street projects. The city typically issues GO bonds annually for street improvements. It may also issue additional debt in 2021 for a new fire truck. Overall, we expect the city's debt profile to remain weak. Mendota Heights' combined required pension and actual other postemployment benefits (OPEB) contributions totaled 4.6% of total governmental fund expenditures in 2017. Of that amount, 3.7% represented required contributions to pension obligations, and 0.9% represented OPEB payments. The city made its full annual required pension contribution in 2017. The city participates in cost-sharing multiple -employer defined -benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF). The city's annual required pension contribution to both GERF and PEPFF is determined by state statute and is based on a percentage of payroll. Contributions are not based on an actuarial determined contribution, and have not been keeping up with the plan's increasing liabilities, which indicates that employer contributions may rise in the future. Using reporting standards in accordance with Governmental Accounting Standard Board (GASB) Statement Nos. 67 and 68, the city's proportionate share of the net pension liability as of 2017 was $1.8 million for GERF and $2 million for PEPFF. The most recent GASB valuations showed plan funding ratios of 75.9% for GERF and 85.4% for PEPFF as of June 30, 2017. The city's total contribution to PERA is a small percentage of its total budget. If contribution rates were to rise, we expect the city would have the ability to manage the increase, given its historically strong operating results, willingness and ability to raise its tax levy to cover growing costs, and strong management. Eligible retirees have the option to purchase health insurance through the city at their own expense. As a result, a portion of the city's contributions to its health care plan for active employees constitutes an implicit subsidy on behalf of these retirees. Strong institutional framework The institutional framework score for Minnesota cities with a population greater than 2,500 is strong. Outlook The stable outlook reflects our view that Mendota Heights will likely maintain its very strong budgetary flexibility, www.spgiobai.com/ratingsdirect Apr! l77,2019 5 Summary: Mendota Heights, Minnesota; General Obligation liquidity, and economic profile, given its growing tax base and strong management policies. As a result, we do not expect to revise the rating within the two-year outlook period. Downside scenario While we believe this is unlikely, we could lower the rating if the city experienced sustained deterioration in financial performance, or if the city were to significantly draw down its available general fund reserves. Related Research • S&P Public Finance Local GO Criteria: How We Adjust Data For Analytic Consistency, Sept. 12, 2013 • Incorporating GASB 67 And 68: Evaluating Pension/OPEB Obligations Under Standard & Poor's U.S. Local Government GO Criteria, Sept. 2, 2015 Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. 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STANDARD & POOR'S, S&P and RATINGSDIRECT are registered trademarks of Standard & Poor's Financial Services LLC. www.spglobal.com/ratingsdirect Aprit 11, 2019 7 To: Mayor and City Council From: Mark McNeill, City Administrator Subject: Library Update Date: April 19, 2019 Comment: Introduction: At its meeting of April 19th, the Council will hear an update on activities and services which are provided by the Dakota County Library System. Background: The Dakota County Library System is in the process of making presentations to each City Council in the County. Head Librarian Murray Wilson of the Wentworth Library in West St. Paul will be in attendance at the next Council meeting to speak to the City Council. It should be noted that the Wentworth Library will observe its 50th Anniversary at an Open House which will be held from 4:30 PM until 6:30 PM on Thursday, April 18th. Action Required This is informational only; no action required. ________________________ Mark McNeill City Administrator page 91