Details for SNAXLP 70308 1tdly 9/13 EXTRACT OF MINUTES OF MEETING OF
SNAXLP 70308 1tdly 9/13 EXTRACT OF MINUTES OF MEETING OF THE CITY COMMISSION OF THE CITY OF PIERRE HUGHES COUNTY, SOUTH DAKOTA Pursuant to due call and notice thereof, a meeting of the City Commission of the City of Pierre, Hughes County, State of South Dakota, was held on September 10, 2019 at 5:30 o'clock p.m. The following members were present: Mayor Steve Harding, Commissioner Blake Barringer, Vona Johnson, Jamie Huizenga, and Jim Mehlhaff and the following were absent: None. Thereupon the Mayor declared that a quorum was present and the meeting opened for transaction of business. Commission member, ______, introduced the following resolution and moved its adoption: RESOLUTION NO. 2655 RESOLUTION GIVING APPROVAL TO THE ISSUANCE AND SALE OF REVENUE SURCHARGE BONDS TO REFUND THE TAXABLE ELECTRIC REVENUE SURCHARGE BONDS, SERIES 2010C (RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS); APPROVING THE FORM OF THE ELECTRIC REVENUE SURCHARGE BONDS, DESIGNATION OF ELECTRIC REVENUE SURCHARGE BONDS AND PLEDGING PROJECT REVENUES AND COLLATERAL TO SECURE THE PAYMENT OF THE BONDS; AND CREATING SPECIAL FUNDS AND ACCOUNTS FOR THE ADMINISTRATION OF FUNDS FOR OPERATION OF THE SYSTEM AND RETIREMENT OF THE ELECTRIC REVENUE SURCHARGE BONDS AND PROVIDING FOR A SEGREGATED SPECIAL CHARGE OR SURCHARGE FOR THE PAYMENT OF THE BONDS. WHEREAS, the City of Pierre (the “City”) issued $13,890,000 Taxable Electric Revenue Surcharge Bonds, Series 2010C (Recovery Zone Economic Development Bonds) dated December 30, 2010 (the “Refunded Bonds”) ; and WHEREAS, the City finds that under current market conditions the city could reduce debt service costs by refunding the Refunded Bonds; and, WHEREAS, the City has determined to issue its Electric Revenue Surcharge Bonds to refund the Taxable Electric Revenue Surcharge Bonds, Series 2010C (Recovery Zone Economic Development Bonds); NOW THEREFORE BE IT RESOLVED by the City as follows: SECTION 1 Definitions. The terms when used in this Resolution (“Resolution”) shall have the following meanings set forth in this section unless the context clearly requires otherwise. “Act” means South Dakota Codified Laws Chapter 9-40 and Chapter 6-8B, specifically sections 6-8B-30 through 6-8B-52. “Code” means the Internal Revenue Code of 1986, as amended, and the applicable regulations of the United States Department of Treasury promulgated thereunder as in effect on the date of issuance of the Bonds. “Depository” means any securities depository that is a clearing agency under federal laws operating and maintaining, with its participants or otherwise, a Book-Entry System, including, but not limited to DTC. “DTC Participant(s)” means securities brokers and dealers, banks, trust companies and clearing corporations that have access to the DTC system. “DTC” means the Depository Trust Company, a limited purpose company organized under the laws of the State of New York, and its successors and assigns. “Issuance Costs” means costs but only to the extent incurred in connection with, and allocable to, the borrowing: underwriter's discount, purchasers' spread; counsel fees; financial advisory fees; fees paid to an organization to evaluate the credit quality of an issue; trustee fees; paying agent fees; bond registrar, certification, and authentication fees; accounting fees; printing costs for bonds and offering documents; public approval process costs; engineering and feasibility study costs; guarantee fees, other than for qualified guarantees and similar costs. “Letter of Representation” means the Blanket Issuer Letter of Representations to DTC of the City. “Mayor” means the Mayor elected pursuant to the provisions of the SDCL 9-13 or his or her designee acting on his or her behalf pursuant to the Charter. “Official Statement” and ?Preliminary Official Statement? means that Official Statement and Preliminary Official Statement described in Section 15. hereof pertaining to the sale of the Bonds. “Outstanding,” “Bonds Outstanding,” or “Outstanding Bonds” means, as of a particular date all Bonds issued and delivered under this Resolution except: (1) any Bond paid or redeemed or otherwise canceled by the City at or before such date; (2) any Bond for the payment of which cash, equal to the principal amount thereof with interest to date of maturity, shall have theretofore been deposited prior to maturity by the City for the benefit of the owner thereof; (3) any Bond for the redemption of which cash, equal to the redemption price thereof with interest to the redemption date, shall have theretofore been deposited with the registration agent and for which notice of redemption shall have been mailed in accordance with this Resolution; (4) any bond in lieu of or in substitution for which another bond shall have been delivered pursuant to this Resolution, unless proof satisfactory to the City is presented that any bond, for which a bond in lieu of or in substitution therefor shall have been delivered, is held by a bona fide purchaser, as that term is defined in Article 8 of the Uniform Commercial Code of South Dakota, as amended, in which case both the bond in lieu of or in substitution for which a new bond has been delivered and such new bond so delivered therefor shall be deemed Outstanding; and, (5) any bond deemed paid this Resolution, except that any such Bond shall be considered Outstanding until the maturity or redemption date thereof only for the purposes of being exchanged, transferred, or registered. “Paying Agent” means the Paying Agent appointed by the City or its successor or successors hereafter appointed in the manner provided in Article VI hereof. “Person” means an individual, partnership, corporation, trust, or unincorporated organization, or a governmental entity or agency or political subdivision thereof. “President” means the President of the City Council who may act for the Mayor in the absence of the Mayor. “Purchase Agreement” means the Bond Purchase Agreement authorized pursuant to and described in Section 14.2 hereof by and between the City and the Underwriter. “Record Date” means the close of business on the first/fifteenth day (whether or not a business day) of the calendar month next preceding such interest payment date. “Refunded Bonds” means the Taxable Electric Revenue Surcharge Bonds, Series 2010C (Recovery Zone Economic Development Bonds) dated December 30, 2010, as follows: Maturity, December 15, 2020; Principal Outstanding, $740,000; Interest Rate, 4.500%; CUSIP, 720864 AH0 Maturity, December 15, 2022; Principal Outstanding, $780,000; Interest Rate, 4.900%; CUSIP, 720864 AJ6 Maturity, December 15, 2024; Principal Outstanding, $820,000; Interest Rate, 5.350%; CUSIP, 720864 AK3 Maturity, December 15, 2026; Principal Outstanding, $875,000; Interest Rate, 5.850%; CUSIP, 720864 AL1 Maturity, December 15, 2028; Principal Outstanding, $935,000; Interest Rate, 6.350%; CUSIP, 720864 AM9 Maturity, December 15, 2030; Principal Outstanding, $1,000,000; Interest Rate, 6.600%; CUSIP, 720864 AN7 Maturity, December 15, 2035; Principal Outstanding, $2,860,000; Interest Rate, 7.400%; CUSIP, 720864 AQ0 Maturity, December 15, 2040; Principal Outstanding, $3,490,000; Interest Rate, 7.500%; CUSIP, 720864 AP2 Total Principal Outstanding, $11,500,000 “Revenue Surcharge Bonds,” or “Bond” means the Electric Revenue Surcharge Bonds, Series 2019 issued by the City. “System” means the City's electric utility system. “Underwriter” means Dougherty & Company LLC, Sioux Falls, South Dakota. SECTION 2. Declaration of Necessity. Findings. 2.1.1. Declaration of Necessity. The City hereby determines and declares it is necessary to construct and finance improvements to its System described as the Project. 2.2. Findings. The City does hereby find as follows: 2.2.1. The refunding will reduce debt service costs of the City. 2.2.2. The Refunded Bonds are issued in full compliance with §§ 6-8B-30 through 6-8B-52 and are incontestable for any cause whatsoever after their deliver for value. SECTION 3. Authorization of Bonds, Pledge of Revenue and Security. 3.1. Authorization of Bonds. The City hereby determines and declares it necessary to issue Revenue Surcharge Bonds in a principal amount of not to exceed $12,500,000, plus costs of issuance and any reserve fund requirement. The Bonds are issued for the purpose of refunding Taxable Electric Revenue Surcharge Bonds, Series 2010C (Recovery Zone Economic Development Bonds) dated December 30, 2010 and Issuance Costs, including proper reimbursements, and will be payable from a segregated special charge or surcharge established for the services of the facilities financed by the Revenue Surcharge Bonds. The City hereby determines that because the Revenue Surcharge Bonds are payable form solely the segregated portion of the revenue or income of the System, no election is required to issue the Revenue Surcharge Bonds. 3.2. Approval of Revenue Surcharge Bonds. The issuance of Revenue Surcharge Bonds in the principal amount not to exceed $12,500,000, plus costs of issuance and any reserve fund requirement, shall be and the same is, in all respects, hereby authorized, approved, and confirmed and the Mayor, Finance Officer, and other appropriate officials shall be and are hereby authorized and directed to execute and seal the Revenue Surcharge Bonds and deliver the Revenue Surcharge Bonds to the Underwriter, for and on behalf of the City, upon receipt of the purchase price, and to use the proceeds thereof in the manner set forth herein. The Mayor and Finance Officer are hereby authorized to approve the final terms of the Revenue Surcharge Bonds and their execution and delivery thereof shall evidence that approval. The Revenue Surcharge Bonds shall be issued under the authority of SDCL Chapter 9-40 and SDCL Chapter 6-8B, and the provisions of the Act are hereby expressly incorporated herein as provided in Section 19 of the Act. 3.3. Pledge of Revenues. The Revenue Surcharge Bonds together with the interest thereon, shall not constitute a charge against the City's general credit or taxing power, but shall be a limited obligation of the City payable solely from the net revenues of the City's Electric Utility collected in each year, which payments, revenues and receipts are hereby pledged and assigned for the equal and ratable payments of the Revenue Surcharge Bonds and shall be used for no other purpose than to pay the principal of and interest on the Revenue Surcharge Bonds, except as may be otherwise expressly authorized (including the purpose of securing Additional Bonds issued as permitted by the terms thereof). The City covenants and agrees to charge rates for all services from the Project or establish special charges or surcharges which will be sufficient to provide for the payments upon the Revenue Surcharge Bonds issued hereunder as and when the same become due, and as may be necessary to provide for the operation and maintenance and repairs of the Project, and depreciation, and the rate resolution or ordinance shall be revised from time to time so as to produce these amounts. The City hereby reserves the right to determine on a periodic basis the appropriate allocation of operation and maintenance expenses, depreciation, repair and reserves associated with the facilities financed with the Revenue Surcharge Bonds, provided that such determination of allocable operation and maintenance expenses shall in no event abrogate, abridge or otherwise contravene any covenant of the City set forth in this Resolution. SECTION 4. Special Charge or Surcharge for Revenue Surcharge Bonds. 4.1. The City will establish the special charge or surcharge payable by every customer of its electric system who receives or benefits from the services of the Project. Such charge or surcharge shall be set at a level which, assuming a 1.10 coverage ratio, will produce income at the times and in amounts sufficient to pay when due the principal of and interest on the Revenue Surcharge Bonds and all other payments as may be required under this Resolution and Revenue Surcharge Bonds. 4.2. The special charge or surcharge shall be segregated from other revenues of the System and shall be used for the payment of the principal and interest, when due on the Revenue Surcharge Bonds. The special charge or surcharge shall create net income used first for paying debt service fund annual requirements and shall be maintained at not less than 100% of the debt service requirements on the Revenue Surcharge Bonds. 4.3. Rates and collection. The rate herein specific will be collected as a special charge or surcharge for the Project. This special charge or surcharge shall remain in effect until such time as the Revenue Surcharge Bonds is defeased or paid in full. 4.4. Segregation. The Finance Officer shall setup bookkeeping accounts in accordance with South Dakota Legislative Audit guidelines for the segregation of the revenue, special charges and surcharges. 4.5. Periodic review. The amount of the surcharge shall be reviewed from time to time, not less than yearly, and shall be modified in order to produce such funds as are necessary and required to comply with the rate covenant and to pay principal of, interest on the Revenue Surcharge Bonds when due. The surcharge shall be applicable to all customers served whether in or out of the city. The surcharge shall remain in effect until such time as the Revenue Surcharge Bonds are discharged or defeased. The initial surcharge shall be collected at the same time as other charges of the System. The surcharge is found to be equitable for the services provided by the improvement. The surcharge may be set by ordinance or resolution in accordance with this section. The rate ordinance or resolution shall be necessary for the support of government and shall be effective upon passage. 4.6. Annual Review. The charges shall be reviewed yearly by city personal and administratively adjusted, upwards or downwards, pursuant to SDCL § 9-40-15 to such amounts as may be necessary to pay principal, interest, maintain any coverage requirements and other charges as may become due and owing under the Revenue Surcharge Bonds. SECTION 5. Additional Bonds. As permitted by Section 8 and 9 of the Act, additional bonds payable from revenues and income of the System or Project may be issued, as permitted in the section, and no provision of this Resolution shall have the effect of restricting the issuance of, or impairing the lien of, such additional parity bonds with respect to the net revenues or income from the extensions, additions or improvements. The City may issue additional bonds (the “Parity Bonds”) payable from the Pledged Revenues and having a lien upon such revenues on a parity with the Bonds and the Outstanding Parity Bonds providing that: 5.1. the City is current in the payment of principal and interest on the Outstanding Bonds and is current in the collections required for the Principal and Interest Account and the Reserve Account. 5.2. the Pledged Revenues collected by the City in the last preceding fiscal year are sufficient to cover 1.25 times the maximum annual principal and interest requirements on the Outstanding Bonds and the proposed Parity Bonds. The City shall have the right to issue additional bonds secured by a lien subordinate to the lien from the Revenue Surcharge Bonds. SECTION 6. Project Fund Accounts. For the purpose of application and proper allocation of the income of the Project and to secure the payment of principal and interest on the Revenue Surcharge Bonds, the following mandatory asset segregations shall be included in the electric utility system account of the City and shall be used solely for the following respective purposes until payment in full of the principal of and interest on the Revenue Surcharge Bonds: 6.1. Project Revenue Account. There shall be deposited periodically into the Project Revenue Account the net revenues as defined in Section 17 of the Act derived from the operation of the Project collected pursuant to the ordinances and resolutions of the City of Pierre, South Dakota (collectively the “Rate Ordinance”). Moneys from the Project Revenue Account shall be transferred periodically into separate funds and accounts as provided below. 6.2. Project Debt Service Account. Out of the revenues in the Project Revenue Account, there shall be set aside no later than the 25th day of each month into the account designated Project Debt Service Account, a sum sufficient to provide for the payment as the same become due of the next maturing principal and interest payment on the Revenue Surcharge Bonds and any reserve determined by the City's governing body to be necessary. 6.3. Reserve Account. There may be a reserve account established in the amount equal to the lesser of (i) 10% of the original principal amount of the Bonds, (ii) the maximum annual debt service on the Bonds, or (iii) 125% of the average annual debt service on the Bonds and all Outstanding Bonds having a parity lien on the Pledged Revenues if required. 6.4. Depreciation Account. There shall be established a General Depreciation Account. Out of the revenues of the Project Revenue Account there shall be set aside each month into the General Depreciation Account an amount determined by the Common Council to be a proper and adequate amount for repair and depreciation of the Project. 6.5. Project Surplus Account. There shall be established the Project Surplus Account. Revenues remaining in the Project Revenue Account at the end of any fiscal year after all periodic transfers have been made therefrom as above required, shall be deemed to be surplus and shall be transferred to the Project Surplus Account. If at any time there shall exist any default in making any periodic transfer to the Project Debt Service Account, the Common Council shall authorize the City Finance Officer to rectify such default so far as possible by the transfer of money from the Project Surplus Account. If any such default shall exist as to more than one account or fund at any time, then such transfer shall be made in the order such funds and accounts are listed above. When not required to restore a current deficiency in the Project Debt Service Account, moneys in the Project Surplus Account from time to time may be used for any of the following purposes and not otherwise: (a) To redeem and prepay the Revenue Surcharge Bond when and as such Revenue Surcharge Bond becomes prepayable according to its terms; (b) To pay for repairs of or for the construction and installation of improvements or additions to the System; and, if the balances in the Project Debt Service Account and the Project Depreciation Account are sufficient to meet all payments required or reasonably anticipated to be made there from prior to the end of the then current fiscal year, then: (c) To be held as a reserve for redemption and prepayment of any bonds of the System which are not then but will later be prepayable according to their terms; or (d) To be used for any other authorized municipal purpose designated by the Common Council. (e) No moneys shall at any time be transferred from the Project Surplus Account or any other account of the fund to any other fund of the City, nor shall such moneys at any time be loaned to other municipal funds or invested in warrants, special improvements bonds or other obligations payable from other funds, except as provided in this Section. SECTION 7. Approval of Bond Counsel. Meierhenry Sargent LLP is hereby retained as Bond Counsel with respect to the Revenue Surcharge Bond. SECTION 8. Tax Matters. The Interest on the Revenue Surcharge Bond shall be excludable from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended (“the Code”) and applicable Treasury Regulations (the “Regulations”). SECTION 9. Covenants. The City hereby covenants and agrees with the owners of the Revenue Surcharge Bond as follows: 9.1. The City will punctually perform all duties with reference to the Project, the System and the Revenue Surcharge Bond required by the constitution and laws of the State of South Dakota and by this resolution. 9.2. The City covenants and agrees that pursuant to Sections 25 through 27 of the Act, the lawful holders of the Revenue Surcharge Bond shall have a statutory mortgage lien upon the Project and the extensions, additions and improvements thereto acquired pursuant to the Act, until the payment in full of the principal and interest on the Revenue Surcharge Bond, and the City agrees not to sell or otherwise dispose of the System, the Project, or any substantial part thereof, and shall not establish, authorize or grant a franchise for the operation of any other utility supplying like products or services in competition therewith, or permit any person, firm or corporation to compete with it in the distribution of water for municipal, industrial, and domestic purposes within the City. 9.3. The City covenants and agrees with the owners of the Revenue Surcharge Bonds that it will maintain the System in good condition and operate the same in an efficient manner and at a reasonable cost, so long as any portion of the Revenue Surcharge Bond remains outstanding; that it will maintain insurance on the System for the benefit of the holders of the Revenue Surcharge Bond in an amount which usually would be carried by private companies in a similar type of business; that it will prepare, keep and file records, statements and accounts as provided for in this Resolution. The Revenue Surcharge Bond shall refer expressly to this Resolution and the Act and shall state that it is subject to all provisions and limitations thereof pursuant to Series 19 of the Act. 9.4.The City covenants and agrees that it will at all times comply with the Code and Regulation so that the interest on the Bonds will not be includable in gross income for federal income tax purposes. SECTION 10. Depositories. The Finance Officer shall cause all moneys pertaining to the Funds and Accounts to be deposited as received with one or more banks which are duly qualified public depositories under the provisions of SDCL Ch. 4-6A, in a deposit account or accounts, which shall be maintained separate and apart from all other accounts of the City, so long as any of the Bonds and the interest thereon shall remain unpaid. Any of such moneys not necessary for immediate use may be deposited with such depository banks in savings or time deposits. No money shall at any time be withdrawn from such deposit accounts except for the purposes of the Funds and Accounts as authorized in this Ordinance; except that moneys from time to time on Hughes in the Funds and Accounts may at any time, in the discretion of the City's governing body, be invested in securities permitted by the provisions of SDCL 4-5-6; provided, however, that the Depreciation Fund may be invested in such securities maturing not later than ten years from the date of the investment. Income received from the deposit or investment of moneys shall be credited to the Fund or Account from whose moneys the deposit was made or the investment was purchased, and handled and accounted for in the same manner as other moneys therein. SECTION 11. Consent to Appointment. In the event of mismanagement of the Project, a default in the payment of the principal or interest of the Revenue Surcharge Bond, or in any other condition thereof materially affecting the lawful holder of the Revenue Surcharge Bond, or if the revenues of the Project are dissipated, wasted or diverted from their proper application as set forth herein, the City hereby consents to the appointment of a receiver pursuant to Section 33 of the Act, and agrees that the receiver will have the powers set forth therein, and in Section 34 and 35 of the Act to operate and administer the Project, and charge and collect rates as described therein. SECTION 12. Severability. If any section, paragraph, clause or provision of this Resolution, the Revenue Surcharge Bonds, or any agreement pertaining hereto shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Resolution or Revenue Surcharge Bonds, or any other documents pertaining hereto. SECTION 13. Authorization of City Officials. The Mayor, Finance Officer and other City Officials shall be and they are hereby authorized to execute and deliver for and on behalf of the City any and all other certificates, documents or other papers and to perform such other acts as they may deem necessary or appropriate in order to implement and carry out the actions authorized herein. SECTION 14. Sale of Bonds. 14.1. Bond Purchase Agreement. The Bonds shall be sold to the Underwriter at a price set forth in the Bond Purchase Agreement. The Mayor and the Finance Officer, or either of them, in consultation with the Underwriter, is authorized to make such changes in the structuring of the terms and sale of the Bonds as they shall deem necessary. In this regard, they, or either of them, in consultation with the Underwriter, are authorized to cause to be sold an aggregate principal amount of the Bonds less than that authorized herein, to sell any or all of the Bonds as term Bonds with annual mandatory redemption requirements which will produce substantially the same annual principal reductions as authorized herein, to change the dated date of the Bonds, and to adjust principal and interest payment dates and redemption dates of the Bonds. The Mayor and the Finance Officer, or either of them, are hereby authorized to execute and the Finance Officer is authorized to attest the Bond Purchase Agreement with the Underwriter providing for the purchase and sale of the Bonds. The Bond Purchase Agreement shall be in form and content acceptable to the Mayor and Finance Officer, the execution thereof by either of them to constitute conclusive evidence thereof; provided the Bonds Purchase Agreement effects the sale of the Bonds in accordance with the provisions of this Resolution, and is not inconsistent with the terms hereof. The Mayor and Finance Officer are authorized to cause the Bonds to be authenticated and delivered by the Registration Agent to the Underwriter and to execute, publish, and deliver all certificates and documents, including the Official Statement, and closing certificates and documents, as they shall deem necessary in connection with the sale and delivery of the Bonds. 14.2. The Bonds are issuable only as fully registered Bonds, without coupons, in the denomination of Five Thousand Dollars ($5,000) or any integral multiple thereof. All Bonds issued under the Resolution shall be substantially in the form set forth in Exhibit A attached hereto, and by this reference incorporated herein as fully as though copied. 14.3. The Bonds shall be executed in such manner as may be prescribed by applicable law in the name and on behalf of the City with the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the Finance Officer, and approved as to form and countersigned by a Resident Attorney by his manual or facsimile signature. 14.4. In the event any officer whose manual or facsimile signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such manual or such facsimile signature shall nevertheless be valid and sufficient for all purposes as if he or she had remained in office until such delivery. Any Bond may bear the facsimile signature of, or may be manually signed by, such individuals who, at the actual time of the execution of such Bond, were the proper officers of the City to sign such Bond, although on the date of the adoption by the City of this Resolution, such individuals may not have been such officers. 14.5. The Bonds are transferable only by presentation to the Registration Agent by the registered owner, or his legal representative duly authorized in writing, of the registered Bond(s) to be transferred with the form of assignment on the reverse side thereof completed in full and signed with the name of the registered owner as it appears upon the face of the Bond(s) accompanied by appropriate documentation necessary to prove the legal capacity of any legal representative of the registered owner. Upon receipt of the Bond(s) in such form and with such documentation, if any, the Registration Agent shall issue a new Bond or Bonds to the assignee(s) in $5,000 denominations, or integral multiples thereof, as requested by the registered owner requesting transfer. The Registration Agent shall not be required to transfer or exchange any Bond during the period commencing on a Regular or Special Record Date and ending on the corresponding interest payment date of such Bond, nor to transfer or exchange any Bond after the publication of notice calling such Bond for redemption has been made, nor to transfer or exchange any Bond during the period following the receipt of instructions from the City to call such Bond for redemption; provided, the Registration Agent, at its option, may make transfers after any of said dates. No charge shall be made to any registered owner for the privilege of transferring any Bond, provided that any transfer tax relating to such transaction shall be paid by the registered owner requesting transfer. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and neither the City nor the Registration Agent shall be affected by any notice to the contrary whether or not any payments due on the Bonds shall be overdue. Bonds, upon surrender to the Registration Agent, may, at the option of the registered owner, be exchanged for an equal aggregate principal amount of Bonds of the same maturity in any authorized denomination or denominations. 14.6. Except as otherwise provided in this subsection, the Bonds shall be registered in the name of Cede & Co., as nominee of DTC, which will act as securities depository for the Bonds. References in this Section to a Bond or the Bonds shall be construed to mean the Bond or the Bonds that are held under the Book-Entry System. One Bond for each maturity shall be issued to DTC and immobilized in its custody. Unless otherwise provided herein, a Book-Entry System shall be employed, evidencing ownership of the Bonds in authorized denominations, with transfers of beneficial ownership affected on the records of DTC and the DTC Participants pursuant to rules and procedures established by DTC. Each DTC Participant shall be credited in the records of DTC with the amount of such DTC Participant's interest in the Bonds. Beneficial ownership interests in the Bonds may be purchased by or through DTC Participants. The holders of these beneficial ownership interests are herein referred to as the "Beneficial Owners." The Beneficial Owners shall not receive the Bonds representing their beneficial ownership interests. The ownership interests of each Beneficial Owner shall be recorded through the records of the DTC Participant from which such Beneficial Owner purchased its Bonds. Transfers of ownership interests in the Bonds shall be accomplished by book entries made by DTC and, in turn, by DTC Participants acting on behalf of Beneficial Owners. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE REGISTERED OWNER OF THE BONDS, THE REGISTRATION AGENT SHALL TREAT CEDE & CO., AS THE ONLY HOLDER OF THE BONDS FOR ALL PURPOSES UNDER THIS RESOLUTION, INCLUDING RECEIPT OF ALL PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE BONDS, RECEIPT OF NOTICES, VOTING AND REQUESTING OR DIRECTING THE REGISTRATION AGENT TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THIS BOND RESOLUTION. Payments of principal, interest, and redemption premium, if any, with respect to the Bonds, so long as DTC is the only owner of the Bonds, shall be paid by the Registration Agent directly to DTC or its nominee, Cede & Co., as provided in the Letter of Representation. DTC shall remit such payments to DTC Participants, and such payments thereafter shall be paid by DTC Participants to the Beneficial Owners. Neither the City nor the Registration Agent shall be responsible or liable for payment by DTC or DTC Participants, for sending transaction statements or for maintaining, supervising or reviewing records maintained by DTC or DTC Participants. In the event that (1) DTC determines not to continue to act as securities depository for the Bonds or (2) the City determines that the continuation of the Book-Entry System of evidence and transfer of ownership of the Bonds would adversely affect their interests or the interests of the Beneficial Owners of the Bonds, the City may discontinue the Book-Entry System with DTC. If the City fails to identify another qualified securities depository to replace DTC, the City shall cause the Registration Agent to authenticate and deliver replacement Bonds in the form of fully registered Bonds to each Beneficial Owner. NEITHER THE CITY NOR THE REGISTRATION AGENT SHALL HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO ANY DTC PARTICIPANT OR ANY BENEFICIAL OWNER WITH RESPECT TO (i) THE BONDS; (ii) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (iii) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS; (iv) THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC OR ANY DTC PARTICIPANT OF ANY NOTICE DUE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THIS BOND RESOLUTION TO BE GIVEN TO BENEFICIAL OWNERS, (v) THE SELECTION OF BENEFICIAL OWNERS TO RECEIVE PAYMENTS IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (vi) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO., AS OWNER. SO LONG AS A BOOK-ENTRY SYSTEM OF EVIDENCE OF TRANSFER OF OWNERSHIP OF ALL THE BONDS IS MAINTAINED IN ACCORDANCE HEREWITH, THE PROVISIONS OF THIS RESOLUTION RELATING TO THE DELIVERY OF PHYSICAL BOND CERTIFICATES SHALL BE DEEMED INAPPLICABLE OR BE OTHERWISE SO CONSTRUED AS TO GIVE FULL EFFECT TO SUCH BOOK-ENTRY SYSTEM. IF THE PROVISIONS OF THE LETTER OF REPRESENTATION SHALL BE IN CONFLICT WITH THE PROVISIONS OF THIS RESOLUTION AS SAID PROVISIONS RELATE TO DTC, THE PROVISIONS OF THE LETTER OF REPRESENTATION SHALL CONTROL. 14.7. In the event any Bond is mutilated, lost, stolen, or destroyed, the City may execute, and upon the request of an Authorized Officer of the City the Registration Agent shall authenticate and deliver, a new Bond of like maturity, interest rate, and principal amount, and bearing the same number (but with appropriate designation indicating that such new Bond is a replacement Bond) as the mutilated, destroyed, lost, or stolen Bond, in exchange for the mutilated Bond or in substitution for the Bond so destroyed, lost, or stolen. In every case of exchange or substitution, the Bondholder shall furnish to the City and the Registration Agent: (1) such security or indemnity as may be required by them to save each of them harmless from all risks, however remote; and, (2) evidence to their satisfaction of the mutilation, destruction, loss, or theft of the subject Bond and the ownership thereof. Upon the issuance of any Bond upon such exchange or substitution, the City and the Registration Agent may require the Owner thereof to pay a sum sufficient to defray any tax or other governmental charge that may be imposed in relation thereto and any other expenses, including printing costs and counsel fees, of the City and the Registration Agent. In the event any Bond which has matured or is about to mature shall become mutilated or be destroyed, lost, or stolen, the City may, instead of issuing a Bond in exchange or substitution therefor, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Bond) if the Owner thereof shall pay all costs and expenses, including attorneys' fees, incurred by the City and the Registration Agent in connection herewith, as well as a sum sufficient to defray any tax or other governmental charge that may be imposed in relation thereto and shall furnish to the City and the Registration Agent such security or indemnity as they may require to save them harmless and evidence to the satisfaction of the City and the Registration Agent the mutilation, destruction, loss, or theft of such Bond and of the ownership thereof. 14.8. Every Bond issued pursuant to the provisions of this section shall constitute an additional contractual obligation of the City (whether or not the destroyed, lost, or stolen Bond shall be found at any time to be enforceable) and shall be entitled to all the benefits of this Bond Resolution equally and proportionately with any and all other Bonds duly issued under this Bond Resolution. 14.9. All Bonds shall be held and owned upon the express condition that the provisions of this Section are exclusive, with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Bonds, and, to the maximum extent legally permissible, shall preclude all other rights or remedies, notwithstanding any law or statute now existing or hereafter enacted to the contrary. 14.10. The Registration Agent is hereby authorized to authenticate and deliver the Bonds to the Underwriter or as it may designate upon receipt by the City of the proceeds of the sale thereof, to authenticate and deliver Bonds in exchange for Bonds of the same principal amount delivered for transfer upon receipt of the Bond(s) to be transferred in proper form with proper documentation as hereinabove described. The Bonds shall not be valid for any purpose unless authenticated by the Registration Agent by the manual signature of an officer thereof on the certificate set forth herein on the Bond form. 14.11. The Registration Agent is hereby authorized to take such actions as may be necessary from time to time to qualify and maintain the Bonds for deposit with DTC, including but not limited to, wire transfers of interest and principal payments with respect to the Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Bonds and provision of notices with respect to Bonds registered by the DTC (or any of its designees identified to the Registration Agent) by overnight delivery, courier service, telegram, telecopy or other similar means of communication. No such arrangements with DTC may adversely affect the interest of any of the Owners of the Bonds, provided, however, that the Registration Agent shall not be liable with respect to any such arrangements it may make pursuant to this section. SECTION 15. Preliminary Official Statement and Official Statement. The Mayor, Finance Officer, and the Underwriter are hereby authorized and directed to provide for the preparation and distribution of a Preliminary Official Statement describing the Bonds (the "Preliminary Official Statement"). After the Bonds have been sold, the Mayor and Finance Officer shall make such completions, omissions, insertions and changes in the Preliminary Official Statement not inconsistent with this Resolution as are necessary or desirable to complete it as a final Official Statement for purposes of Rule 15c2-12(e)(3) of the Securities and Exchange Commission. To comply with paragraph (b) (3) of Rule 15c212 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule") and with Rule G32 City agrees to deliver to the Underwriter, the Official Statement (which shall be a final official statement, as such term is defined in the Rule, as of its date) in an electronic format as prescribed by the MSRB. The City hereby covenants and agrees that it will provide financial information and material event notices as required by Rule 15c2-12 of the Securities Exchange Commission for the Revenue Surcharge Bonds. The Mayor is authorized to execute at the closing of the sale of the Revenue Surcharge Bonds, an agreement for the benefit of and enforceable by the owners of the Revenue Surcharge Bonds specifying the details of the financial information and material event notices to be provided and its obligations relating thereto. Failure of the City to comply with the undertaking herein described and to be detailed in said closing agreement, shall not be a default hereunder, but any such failure shall entitle the owner or owners of any of the Revenue Surcharge Bonds to take such actions and to initiate such proceedings as shall be necessary and appropriate to cause the City to comply with its undertaking as set forth herein and in said agreement, including the remedies of mandamus and specific performance. SECTION 16. Record Retention and Post Issuance Compliance. The City does hereby adopt Meierhenry Sargent LLP Post-Issuance Compliance Policy and Tax-Advantaged Obligations and Continuing Disclosure manual as its written post issuance compliance procedures with regard to the current financing. The Finance Officer is directed to retain records with regard to this financing for the entire term of the financing plus three years and to keep record of all payments for six years after the payment has been made. Call of the Refunded Bonds. The Finance Officer is authorized to call the refunded bonds on such date as is set forth in the Purchase Agreement. SECTION 18. Effective Date. This Resolution shall take effect on the 20th day following its publication, unless suspended by a referendum. Adopted at City of Pierre, South Dakota, this 10th day of September, 2019. Passed: September 10, 2019 Published: September 13, 2019 Effective: October 2, 2019 APPROVED: Steve Harding, Mayor (Seal) Attest: Twila Hight, Finance Officer ATTACHMENT TO RESOLUTION Post-Issuance Compliance Policy for Tax-Exempt and Tax-Advantaged Obligations and Continuing Disclosure Definitions “Compliance Officer” means the Finance Officer of the Issuer. “Issuer” means the City of Pierre, South Dakota. Statement of Purpose This Post-Issuance Compliance Policy (the "Policy") sets forth specific policies of the Issuer designed to monitor post-issuance compliance: (i) with applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"}, and regulations promulgated thereunder ("Treasury Regulations") for obligations issued by the Issuer on tax-exempt or tax-advantaged basis (''Obligations"); and (ii) with applicable requirements set forth in certificates and agreement(s) ("Continuing Disclosure Agreements") providing for ongoing disclosure in connection with the offering of obligations to investors ("Offerings"), for obligations (whether or not tax exempt I tax-advantaged) subject to the continuing disclosure requirements of Rule 15c2-12(b) (the "Rule") promulgated by the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934. This Policy documents practices and describes various procedures and systems designed to identify on a timely basis facts relevant to demonstrating compliance with the requirements that must be satisfied subsequent to the issuance of Obligations in order that the interest on such Obligations continue to be eligible to be excluded from gross income for federal income tax purposes or that the Obligations continue to receive tax-advantaged treatment. The federal tax law requirements applicable to each particular issue of Obligations will be detailed in the arbitrage or tax certificate prepared by bond counsel and signed by officials of the Issuer and the post-closing compliance checklist provided by bond counsel with respect to that issue. This Policy establishes a permanent, ongoing structure of practices and procedures that will facilitate compliance with the requirements for individual borrowings. This Policy similarly documents practices and describes various procedures and systems designed to ensure compliance with Continuing Disclosure Agreements, by preparing and disseminated related reports and information and reporting "material events" for the benefit of the holders of the Issuer's obligations and to assist the Participating Underwriters (within the meaning of the Rule) in complying with the Rule. The Issuer recognizes that compliance with pertinent law is an on-going process, necessary during the entire term of the obligations, and is an integral component of the Issuer's debt management. Accordingly, the analysis of those facts and implementation of the Policy will require on-going monitoring and consultation with bond counsel and the Issuer's accountants and advisors. General Policies and Procedures The following policies relate to procedures and systems for monitoring post-issuance compliance generally. A. The Compliance Officer shall be responsible for monitoring post-issuance compliance issues. B. The Compliance Officer will coordinate procedures for record retention and review of such records. C. All documents and other records relating to Obligations issued by the Issuer shall be maintained by or at the direction of the Compliance Officer. In maintaining such documents and records, the Compliance Officer will comply with applicable Internal Revenue Service ("IRS") requirements, such as those contained in Revenue Procedure 97-22. D. The Compliance Officer shall be aware of options for voluntary corrections for failure to comply with post-issuance compliance requirements (such as remedial actions under Section 1.141-12 of the Regulations and the Treasury's Tax-Exempt Bonds Voluntary Closing Agreement Program) and take such corrective action when necessary and appropriate. E. The Compliance Officer will review post-issuance compliance procedures and systems on a periodic basis, but not less than annually. Issuance of Obligations - Documents and Records With respect to each issue of Obligations, the Compliance Officer will: A. Obtain and store a closing binder and/or CD or other electronic copy of the relevant and customary transaction documents (the "Transcript"). B. Confirm that bond counsel has filed the applicable information report (e.g., Form 8038, Form 8038-G, Form 8038-CP) for such issue with the IRS on a timely basis. C. Coordinate receipt and retention of relevant books and records with respect to the investment and expenditure of the proceeds of such Obligations with other applicable staff members of the Issuer. Arbitrage The following policies relate to the monitoring and calculating of arbitrage and compliance with specific arbitrage rules and regulations. The Compliance Officer will: A. Confirm that a certification of the initial offering prices of the Obligations with such supporting data, if any, required by bond counsel, is included in the Transcript. B. Confirm that a computation of the yield on such issue from the Issuer's financial advisor or bond counsel (or an outside arbitrage rebate specialist) is contained in the Transcript. C. Maintain a system for tracking investment earnings on the proceeds of the Obligations. D. Coordinate the tracking of expenditures, including the expenditure of any investment earnings. If the project(s) to be financed with the proceeds of the Obligations will be funded with multiple sources of funds, confirm that the Issuer has adopted an accounting methodology that maintains each source of financing separately and monitors the actual expenditure of proceeds of the Obligations. E. Maintain a procedure for the allocation of proceeds of the issue and investment earnings to expenditures, including the reimbursement of pre-issuance expenditures. This procedure shall include an examination of the expenditures made with proceeds of the Obligations within 18 months after each project financed by the Obligations is placed in service and, if necessary, a reallocation of expenditures in accordance with Section 1.148-6(d) of the Treasury Regulations. F. Monitor compliance with the applicable "temporary period" (as defined in the Code and Treasury Regulations) exceptions for the expenditure of proceeds of the issue, and provide for yield restriction on the investment of such proceeds if such exceptions are not satisfied. G. Ensure that investments acquired with proceeds of such issue are purchased at fair market value. In determining whether an investment is purchased at fair market value, any applicable Treasury Regulation safe harbor may be used. H. Avoid formal or informal creation of funds reasonably expected to be used to pay debt service on such issue without determining in advance whether such funds must be invested at a restricted yield. I. Consult with bond counsel prior to engaging in any post-issuance credit enhancement transactions or investments in guaranteed investment contracts. J. Identify situations in which compliance with applicable yield restrictions depends upon later investments and monitor implementation of any such restrictions. K. Monitor compliance with six-month, 18-month or 2-year spending exceptions to the rebate requirement, as applicable. L. Procure a timely computation of any rebate liability and, if rebate is due, to file a Form 8038-T and to arrange for payment of such rebate liability. M. Arrange for timely computation and payment of "yield reduction payments" (as such term is defined in the Code and Treasury Regulations), if applicable. Private Activity Concerns The following polices relate to the monitoring and tracking of private uses and private payments with respect to facilities financed with the Obligations. The Compliance Officer will: A. Maintain records determining and tracking facilities financed with specific Obligations and the amount of proceeds spent on each facility. B. Maintain records, which should be consistent with those used for arbitrage purposes, to allocate the proceeds of an issue and investment earnings to expenditures, including the reimbursement of pre-issuance expenditures. C. Maintain records allocating to a project financed with Obligations any funds from other sources that will be used for otherwise non-qualifying costs. D. Monitor the expenditure of proceeds of an issue and investment earnings for qualifying costs. E. Monitor private use of financed facilities to ensure compliance with applicable limitations on such use. Examples of potential private use include: 1. Sale of the facilities, including sale of capacity rights; 2. Lease or sub-lease of the facilities (including leases, easements or use arrangements for areas outside the four walls, e.g., hosting of cell phone towers) or leasehold improvement contracts; 3. Management contracts (in which the Issuer authorizes a third party to operate a facility, e.g., cafeteria) and research contracts; 4. Preference arrangements (in which the Issuer permits a third party preference, such as parking in a public parking lot); 5. Joint-ventures, limited liability companies or partnership arrangements; 6. Output contracts or other contracts for use of utility facilities (including contracts with large utility users); 7. Development agreements which provide for guaranteed payments or property values from a developer; 8. Grants or loans made to private entities, including special assessment agreements; and 9. Naming rights arrangements. Monitoring of private use should include the following: 1. Procedures to review the amount of existing private use on a periodic basis; and 2. Procedures for identifying in advance any new sale, lease or license, management contract, sponsored research arrangement, output or utility contract, development agreement or other arrangement involving private use of financed facilities and for obtaining copies of any sale agreement, lease, license, management contract, research arrangement or other arrangement for review by bond counsel. If the Compliance Officer identifies private use of facilities financed with tax-exempt or tax-advantaged debt, the Compliance Officer will consult with the Issuer's bond counsel to determine whether private use will adversely affect the tax status of the issue and if so, what remedial action is appropriate. The Compliance Officer should retain all documents related to any of the above potential private uses. Qualified Tax-Exempt Obligations If the Issuer issues qualified tax-exempt obligations in any year, the Compliance Officer shall monitor all tax-exempt financings (including lease purchase arrangements and other similar financing arrangements and conduit financings on behalf of 501(c)(3) organizations) to assure that the $10,000,000 “Small Issuer” limit is not exceeded. Federal Subsidy Payments The Compliance Officer shall be responsible for the calculation of the amount of any federal subsidy payments and the timely preparation and submission of the applicable tax form and application for federal subsidy payments for tax-advantaged obligations such as Build America Bonds, New Clean Renewable Energy Bonds and Qualified School Construction Bonds. Reissuance The following policies relate to compliance with rules and regulations regarding the reissuance of Obligations for federal law purposes. The Compliance Officer will identify and consult with bond counsel regarding any post-issuance change to any terms of an issue of Obligations which could potentially be treated as a reissuance for federal tax purposes. Record Retention The following polices relate to retention of records relating to the Obligations Issued. The Compliance Officer will: A. Coordinate with staff regarding the records to be maintained by the Issuer to establish and ensure that an issue remains in compliance with applicable federal tax requirements for the life of such issue. B. Coordinate with staff to comply with provisions imposing specific recordkeeping requirements and cause compliance with such provisions, where applicable. C. Coordinate with staff to generally maintain the following: 1. The Transcript relating to the transaction (including any arbitrage or other tax certificate and the bond counsel opinion); 2. Documentation evidencing expenditure of proceeds of the issue; 3. Documentation regarding the types of facilities financed with the proceeds of an issue, including, but not limited to, whether such facilities are land, buildings or equipment, economic life calculations and information regarding depreciation. 4. Documentation evidencing use of financed property by public and private entities (e.g., copies of leases, management contracts, utility user agreements, developer agreements and research agreements); 5. Documentation evidencing all sources of payment or security for the issue; and 6. Documentation pertaining to any investment of proceeds of the issue (including the purchase and sale of securities, SLGs subscriptions, yield calculations for each class of investments, actual investment income received by the investment of proceeds, guaranteed investment contracts, and rebate calculations). D. Coordinate the retention of all records in a manner that ensures their complete access to the IRS. E. Keep all material records for so long as the issue is outstanding (including any refunding), plus seven years. Continuing Disclosure Under the provisions of SEC Rule 15c2-12 (the "Rule"), Participating Underwriters (as defined in the Rule) are required to determine that issuers (such as the Issuer) have entered into written Continuing Disclosure Agreements to make ongoing disclosure in connection with Offerings subject to the Rule. Unless the Issuer is exempt from compliance with the Rule or the continuing disclosure provisions of the Rule as a result of certain permitted exemptions, the Transcript for each issue of related obligations will include a Continuing Disclosure Agreement executed by the Issuer. In order to monitor compliance by the Issuer with its Continuing Disclosure Agreements, the Compliance Officer will, if and as required by such Continuing Disclosure Agreements: A. Assist in the preparation or review of annual reports (''Annual Reports") in the form required by the related Continuing Disclosure Agreements. B. Maintain a calendar, with appropriate reminder notifications, listing the filing due dates relating to dissemination of Annual Reports, which annual due date is generally expressed as a date within a certain number of days (e.g., 365 days) following the end of the Issuer's fiscal year (the "Annual Report Due Date"), as provided in the related Continuing Disclosure Agreements. C. Ensure timely dissemination of the Annual Report by the Annual Report Due Date, in the format and manner provided in the related Continuing Disclosure Agreements, which may include transmitting such filing to the Municipal Securities Rulemaking Board ("MSRB") through the Electronic Municipal Market Access ("EMMA") System atwww.emma.msrb.org
in the format prescribed by the MSRB. D. Monitor the occurrence of any "Material Event" (as defined in the Continuing Disclosure Agreements) and timely file notice of the occurrence of any such Material Event in the manner provided under the Continuing Disclosure Agreements. To be timely filed, such notice must transmitted within 10 days (or such other time period as set forth in the Continuing Disclosure Agreements) of the occurrence of such Material Event. E. Ensure timely dissemination of notice of any failure to perform under a Continuing Disclosure Agreement, if and as required by the Continuing Disclosure Agreement. F. Respond to requests, or ensure that the Issuer Contact (as defined in the Continuing Disclosure Agreement) responds to requests, for information under the Rule, as provided in the Continuing Disclosure Agreements. G. Monitor the performance of any dissemination agent(s) engaged by the Issuer to assist in the performance of any obligation under the Continuing Disclosure Agreements. PASSED and ADOPTED by the City of Pierre, South Dakota, this 10th day of September, 2019. Steve Harding, Mayor ATTEST: Twila Hight, Finance Officer Published once at the total approximate cost of $732.11.