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Home My WebLink About12.17.12 Council Packet City of Farmington Mission Statement 430 Third Street Through teamwork and cooperation, Farmington,MN 55024 the City of Farmington provides quality services that preserve our proud past and foster a promising future. FARMINGTON CITY COUNCIL Todd Larson, Mayor Jason Bartholomay Christy Fogarty Terry Donnelly Julie May AGENDA REGULAR CITY COUNCIL MEETING DECEMBER 17, 2012 7:00 P.M. CITY COUNCIL CHAMBERS Action Taken 1. CALL TO ORDER 7:00 P.M. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA 5. ANNOUNCEMENTS/COMMENDATIONS a) Recognition of Service—Councilmember Julie May Recognized 6. CITIZEN COMMENTS/RESPONSES TO COMMENTS(This time is reserved for citizen comments regarding non-agenda items. No official Council action can be taken on these items. Speakers are limited to five minutes to address the Council during"Citizen Comment"time.) 7. CONSENT AGENDA a) Approve Council Minutes (12/3/12 Regular) (12/10/12 Workshop) Approved b) Set Date Board and Commission Interviews -Administration January 14, 2013 c) Approve Temporary On-Sale Liquor License VFW- Administration Approved d) Approve Temporary On-Sale Liquor License Knights of Columbus - Administration Approved e) Adopt Resolution—Approve Gambling Event Permit Knights of Columbus- Administration R56-12 f) Adopt Resolution—Tort Liability Limits—Administration R57-12 g) Adopt Resolution-Approve Annual Adjustment for Non-Represented Employees—Administration R58-12 h) Adopt Resolution-Approve HPC Consultant Contract—Planning R59-12 i) Adopt Ordinance—Amending Section 10-6-3(B)1(g)Increasing Size of Window Signs Allowed—Planning Ord 012-655 j) EDA Loan Payoff—Finance Approved k) School and Conference—Engineering Approved 1) Approve Electrical Inspection Service Agreement- Engineering Approved m) Approve 2012 Tree City USA Recertification—Engineering Approved n) Acknowledge Resignation Fire Department—Human Resources Acknowledged o) Acknowledge Resignation Fire Department—Human Resources Acknowledged p) Approve Bills Approved REGULAR AGENDA (The Council takes a separate action on each item on the Regular Agenda. If you wish to address the Council regarding any or all of the items on the Regular Agenda,please address the item when the item is discussed Speakers will be given at least three minutes to speak per item.Additional time may be granted to speakers representing two or more persons.) 8. PUBLIC HEARINGS a) Adopt Resolution—Approving a Project by St. Francis Health Services and a Joint Powers Agreement-Finance R60-12 9. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS a) Adopt Resolution-Approve Sale of General Obligation Improvement Refunding Bonds Series 2013A—Finance R61-12 b) Adopt Resolution—Approve 2013 CDBG Funds -Planning R62-12 11. UNFINISHED BUSINESS a) Adopt Resolution—Approve 2013 Tax Levy and Budget-Administration R63-12; R64-12 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE 14. ADJOURN Persons with a disability may request a reasonable accommodation by contacting the City Administrator's office at 651-280-6803. Request should be made 24 hours in advance or as early as possible to allow time to arrange accommodation. Table of Contents Agenda 3 Approve Council Minutes (12/3/12 Regular)(12/10/12 Workshop) Regular Minutes 5 Workshop Minutes 11 Set Date Board and Commission Interviews Memo 14 Approve Temporary On-Sale Liquor Licenses VFW Memo 15 Applications 16 Approve Temporary On-Sale Liquor License Knights of Columbus Memo 19 Application 20 Adopt Resolution -Approve Gambling Event Permit Knights of Columbus Memo 21 Resolution 22 Adopt Resolution -Tort Liability Limits Memo 23 Adopt Resolution -Approve Annual Adjustment for Non- Represented Employees Memo 25 Adopt Resolution - Historic Preservation Consultant Services HPC Consultant Services Contract memo 27 2013 HPC contract_201212121046 28 Adopt Ordinance Amending Section 10-6-3(B)1(g) of the City Code Increasing the Size of Window Signs Allowed Window Sign Ord memoCC 30 Window Sign Ordinance 32 Approve EDA Loan Payoff CMResolution - EDA Loan Payoff 20121217 33 School and Conference 2013 CEAM Conference 121712 34 Approve Electrical Inspection Service Agreement Electrical Inspection Services Agreemtent 121712 35 MET Agreement 121712 37 2012 Tree City USA Recertification Tree City USA 42 tree city usa recert signature form 43 Acknowledge Resignation - Fire Department Ack Resignation_Leppert 44 Acknowledge Resignation - Fire Department Ack Resignation_Thelen 45 1 Approve Bills Bills 46 Adopt Resolution -Approving a Project by St. Frances Health Services and a Joint Powers Agreement CMResolution - St. Francis Project And Joint Powers Agreement 20121217 66 CM Farmington approval resolution SFHS 20121217 67 CM Joint Powers Agreement SFHS 20121217 71 CM Final Closing Certificate SFHS 20121217 77 Adopt Resolution—Approve Sale of$5,580,000* General Obligation Improvement Refunding Bonds, Series 2013A CMApprove Sale Resolution - 2013A 81 Bond Resolution (Farmington 2013A)v2 82 2013A Escrow Agreement v1 110 Adopt Resolution -Approve 2013 Community Development Block Grant Application Memo 120 Report 127 Adopt Resolutions -Approve 2013 Tax Levy and Budget Memo 128 2 2a.... COUNCIL MINUTES REGULAR DECEMBER 3, 2012 1. CALL TO ORDER The meeting was called to order by Mayor Larson at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE Cub Scout Troop 117 led the audience and Council in the Pledge of Allegiance. 3. ROLL CALL Members Present: Larson,Bartholomay, Donnelly, Fogarty, May Members Absent: None Also Present: Joel Jamnik, City Attorney;David McKnight, City Administrator; Robin Hanson, Finance Director;Brian Lindquist,Police Chief; Randy Distad, Parks and Recreation Director;Kevin Schorzman, City Engineer;Todd Reiten, Municipal Services Director;Tim Pietsch, Fire Chief; Cynthia Muller, Executive Assistant Audience: Jennifer Chick, Kent&Micah Lillie, John Tonsager 4. APPROVE AGENDA Councilmember Donnelly pulled item 7d) Advertisement to Lease Land in Jim Bell Park and Preserve for Farm Purposes for comment, Councilmember May pulled item 7c) Sale of 431 Third Street for comment. MOTION by Fogarty, second by Donnelly to approve the Agenda. APIF,MOTION CARRIED. 5. ANNOUNCEMENTS a) Recognition of Service—Commissioner Joe Harris Commissioner Harris was elected in 1980 and served Dakota County for 32 years. He is the longest serving Dakota County Commissioner in history. Mr. Harris gave a history of the district and those he served with. Mayor Larson presented him with a certificate in recognition of his service. 6. CITIZEN COMMENTS 7. CONSENT AGENDA MOTION by Fogarty, second by Donnelly to approve the Consent Agenda as follows: a) Approved Council Minutes(11/19/12 Regular) b) Approved Various 2013 License Renewals-Administration c) Approved Sale of 431 Third Street-Administration d) Approved Advertisement to Lease Land in Jim Bell Park and Preserve for Farm Purposes—Parks and Recreation e) Adopted RESOLUTION R53-12 Accepting Donation to Skate with Santa Event —Parks and Recreation 5 Council Minutes(Regular) December 3,2012 Page 2 f) Adopted RESOLUTION R54-12 Accepting Donation to Rambling River Center —Parks and Recreation g) Approved School and Conference-Engineering h) Approved Fire Act Grant Program—Fire Department i) Adopted RESOLUTION R55-12 Approving Revised Master Subscriber Agreement and FAST Access Amendment—City Attorney j) Approved Bills APIF,MOTION CARRIED. d) Approve Advertisement to Lease Land in Jim Bell Park and Preserve for Farm Purposes—Parks and Recreation. Councilmember Donnelly asked where the money goes from the lease. Staff replied it goes to the park improvement fund. c) Approve Sale of 431 Third Street-Administration Councilmember May recommended the proceeds from the sale go into the EDA fund. City Administrator McKnight will bring this item back after the closing. 8. PUBLIC HEARINGS a) Approve Various 2013 License Renewals-Administration Applications were received from various businesses for On-Sale Liquor, On-Sale Sunday Liquor, Club, On-Sale Wine &On-Sale Intoxicating Malt Liquor, Therapeutic Massage licenses. The On-Sale Wine and Intoxicating Malt Liquor license for Farmington Billiards is pending receipt of the Certificate of Insurance. MOTION by Fogarty, second by May to close the public hearing. APIF, MOTION CARRIED. MOTION by Fogarty, second by Bartholomay to approve the above licenses. APIF,MOTION CARRIED. 9. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS 11. UNFINISHED BUSINESS a) Adopt Resolution—Approve 2013 Tax Levy and Budget-Administration City Administrator McKnight presented the 2013 budget and tax levy. The final budget and tax levy must be adopted by December 28,2012. The 2012 general fund budget was just over$10 million. The 2013 budget is proposed to be $10,691,639. This increase is due primarily to the way employees are assigned in the budget. The 2012 tax levy was$8.56 million. The preliminary levy approved in September was$8,808,865,which is a 2.84% increase over last year. The final tax levy proposed is$8,718,968 which is a 1.79% increase over 2012. Employees have been assigned to one home budget in the general fund rather than splitting some into five different budgets. This makes the budget more transparent. The impact transferred over$734,000 worth of expenses into the general fund from the sanitary, storm water and water funds. An equivalent amount of revenue was also transferred into the general fund to make this change tax levy neutral. The 6 Council Minutes(Regular) December 3,2012 Page 3 new approach impacts the Finance, Engineering, and Municipal Services budgets. The Administration and Human Resources budgets are reduced due to staff reductions. The Police Department budget is up because we have settled two union contracts for 2013. The Fire Department budget is up because it includes a Chief's vehicle and a generator for 2013. Parks and Rec is up for some minor reasons. The transfers budget is down because in 2012 there were two one-time expenditures to eliminate negative fund balances in the EDA and Park and Recreation fund. The Police Department makes up one third of the general fund budget and the rest are split between Fire,Engineering, Municipal Services, Parks and Rec, and Administration. There are smaller budgets in the transfer area in Human Resources and Finance. There were some significant challenges to the budget. Revenues were reduced to better reflect past years' receipts amounting to a reduction of$247,000. The first payment of the new fire truck of$120,000 is included. All anticipated personnel costs are included in the budget which was a$107,000 increase to the budget. These changes reflect$474,000 of impact to the general fund. Staff has been reduced by two full time positions;one in Human Resources and one in Community Development, and two part time positions;one in the Police Department and one in Municipal Services. These changes reflect a net impact of $232,000. Since then the tax levy has been reduced to $152,000. The preliminary tax levy approved in September was$8.8 million which represented$242,883 or 2.84% increase. The tax levy proposed now is$8,718,968 or a 1.79%increase. The truth in taxation statements residents received were based on the preliminary levy. All of the City numbers will now be lower than what is shown on the statements. City Administrator McKnight presented the use of the tax levy between 2012 and 2013. The general fund is up $56,000 due to decreased revenues and increased costs including the HR costs in the budget. The Fire relief levy is down$25,000 as finances are doing better and the 2012 number of$180,000 was incorrect and should have been$170,000. The general fund is looking for$30,000 more in tax levy dollars. The debt service levy is up $122,000 due to the new fire truck payment. All anticipated expenditures are included in the budget and revenues are conservative. This is a solid financial document. All interfund loans and liabilities are included in the budget. Separate accounts have been established or continued for seal coating and future building needs. City Administrator McKnight thanked Council and staff for their contributions and patience with the 2013 budget process. Mayor Larson thanked City Administrator McKnight and staff for their hard work. This is the City Administrator's first budget with the Council and he was impressed with the whole process and the ease of the budget document. 7 Council Minutes(Regular) December 3,2012 Page 4 Mr. John Tonsager, owner of Farmington Mini-Storage, stated based on the initial proposed taxes for a commercial business they are looking at a 10% increase. If the proposed taxes are decreased compared to the statements, he asked what they could expect in a reduction. Councilmember Fogarty noted the City Administrator could provide that number tomorrow. Despite there being a small increase,the businesses will take the brunt of it. It has to do with the state changing the market value homestead credit, so homeowners are seeing a reduction in taxes. Mr. Tonsager stated in the commercial industry the market value decreased and at some point we have to weigh in what is being levied against commercial industry if we are looking at long term growth as 10%is not sustainable. If we are looking at a 2%reduction in residential, it is a significant impact on commercial. He was interested in what percentage decrease they can expect. Councilmember Fogarty noted it is out of their control as to how the levy is applied. Mayor Larson stated the legislature has explained that because the commercial value did not drop as fast as the residential value, as the residential value starts gaining it will start to equal out. With the shift in market value homestead credit,they put the brunt on the commercial side. Councilmember May stated we should be honest;we are still proposing a tax increase. No matter who we want to blame,we are still proposing a tax increase. We don't all agree on that. It is unfortunate the commercial businesses are taking the brunt of it. Mr. Tonsager stated we should be looking at reductions as we all experience that in our personal lives. To expect that shift,we should be looking at counties and cities reducing their budgets, not increasing them. MOTION by Bartholomay, second by May to amend the 2013 budget and levy to reflect a 0%increase, keeping the levy the same as 2012. Councilmember May agreed with a lot of the comments,the process,the hard work,the due diligence, but felt there was more we could do with the unknowns in 2013. With the fiscal cliff talk,the continued reduction of home values,the shift to the commercial sector,we cannot be hypocrites and say we care and then have tax increases when we know hit that sector much harder and then say we want to increase commercial development. There is also talk about potentially reorganizing stag not necessarily elimination, but re-organization. We can't keep blaming the state for the shift. We still have to be responsible for any increase we propose. Voting for: Bartholomay, Donnelly, May. Voting against: Larson, Fogarty. MOTION CARRIED. Councilmember Fogarty stated we cannot pass a budget without the tax dollars to match. We have to go back into a budget workshop. Councilmember Bartholomay left it to City Administrator McKnight to determine how to make up the difference. Councilmember Donnelly stated last year we proposed an increase at the last second and didn't talk about it. This year we are proposing a decrease. He agreed with letting the City Administrator decide where the reductions should occur so the budget matches the levy. City Attorney Jamnik stated Council can direct staff to prepare a revised budget to bring back for approval, but ultimately the Council has to approve the budget. You can have a workshop to discuss it, 8 Council Minutes(Regular) December 3,2012 Page 5 otherwise you leave it to staff to come back with a recommendation that you can take or reject or modify. Councilmember Fogarty stated the decision has been made, but this does not prevent businesses from seeing an increase in their taxes. Taxes for businesses will increase despite what the Council does tonight. The vast majority of what we proposed came from this Council voting to get a new fire truck. Basically we have said we want a new fire truck, but we don't want to pay for it and we are going to make the City Administrator fmd other cuts to pay for it. Councilmember May felt Council was aware the commercial will still see an increase and the budget is not all about a fire truck. City Administrator McKnight stated the budget can be approved at the December 17, 2012, Council meeting. He confirmed Council wants him to fmd $152,000 in cuts to get the 2013 tax levy to match the 2012 which matched 2011. Staff will schedule a budget workshop for December 10, 2012. Councilmember Fogarty asked Council if they were fine with whatever decision the City Administrator makes because that could be employment decisions that are being given several weeks before the end of the year. If those decisions will be made, people need to be aware of it. Mayor Larson stated Councilmembers gave the City Administrator the responsibility so they will have to be okay with his decisions. 12. NEW BUSINESS a) 2013 Inflow and Infiltration Grant-Engineering Farmington has been awarded a grant for inflow and infiltration reduction. During the Walnut Street project, staff discovered a sewer line that crosses from the east side of hwy 3 to the west side at Oak Street. It is a clay line that is 2 ft below the ditch along hwy 3. The line will be changed so it goes down the east side of the frontage road and ties into Spruce Street. We have preliminarily been awarded $23,328 of the estimated$95,000 construction cost. The entire project cost was included in the budget for the sanitary sewer fund. So the budget impact would be a reduction in the$95,000 expenditure. Councilmember Fogarty felt that number was odd. City Engineer Schorzman explained the Met Council looks at the project in total and at the part of the project that will control the inflow and infiltration which is specifically what the grant is for. The location is under a street so some of the reconstruction costs were not qualifying expenses. MOTION by Fogarty, second by Bartholomay to authorize staff to continue preparation of plans and specifications for the project, and authorize staff to communicate the City's continued support of the project to the Met Council. APIF,MOTION CARRIED. 13. COUNCIL ROUNDTABLE Councilmember Bartholomay: Thanked staff for the Secret Holiday Shop;there was a huge turnout. He thanked the Farmington High School groups and volunteers for their help with this event. 9 Council Minutes(Regular) December 3,2012 Page 6 City Administrator McKnight: Residents should have received their City News and Recreation Guide in the mail this week. Registration for recreation programs opened today. He acknowledged the work by Danielle Cahlander and staff to put this together. Mayor Larson: Thanked those who worked the Secret Holiday Shop at the senior center. There were over 300 kids attend. He thanked the FBA and those who helped with Dazzle Day and the tree lighting. Stickers with the Shop Local logo have been distributed throughout town to be placed on business windows. He asked everyone to support retail and service businesses. It is important to keep the money in the community. Regarding the budget, we spent nine months working on the budget and it was a good, sound, solid document. He was very disappointed with how tonight went. We bought a fire truck and there are other things in the budget, but we did make cuts. The total increases for the year were $424,000 and we were asking for$150,000. For the remainder we did find ways to cut including personnel and other cost saving measures. By taking the action tonight,we took a sound budget and poked holes in it. 14. ADJOURN MOTION by Fogarty, second by Bartholomay to adjourn at 7:48 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 10 Council Workshop Minutes December 10,2012 Present: Larson, Bartholomay, Donnelly, Fogarty(arrived 6:38 p.m.), May Also Present: David McKnight, City Administrator;Robin Hanson, Finance Director;Brian Lindquist, Police Chief; Randy Distad, Parks and Recreation Director;Kevin Schorzman, City Engineer;Todd Reiten, Municipal Services Director;Brenda Wendlandt,Human Resources Director;Tim Pietsch,Fire Chief;Cynthia Muller, Executive Assistant Mayor Larson called the workshop to order at 6:38 p.m. MOTION by Fogarty, second by Donnelly to approve the agenda. APIF,MOTION CARRIED. The purpose of the workshop was to cut an additional$152,986 from the 2013 budget. Mayor Larson noted in other budget workshops the issue of whether to keep a police officer was discussed and that continues to be the big issue. Mayor Larson and Councilmember Fogarty wanted to keep a police officer. Councilmembers Bartholomay and May wanted to eliminate one officer. Councilmember Donnelly was also in favor of keeping an officer. With a police officer off the table, other options needed to be discussed. Councilmember May noted at the last workshop, it was stated they were in favor of keeping an officer because of a retirement and asked about the status of the retirement. An update on the status was not given. Councilmember May asked for clarification if their decision is based off a retirement that is coming soon, what does that mean. Mayor Larson was in favor of keeping an officer whether there is a retirement or not. Councilmember May did not understand why we cannot have a constructive discussion about this at a workshop. Councilmember Donnelly asked if the date of May 31, 2013,to eliminate a police officer was to coincide with the end of the school year. That was staffs intent, but it is up to Council. Mayor Larson stated the Fire Department offered up the generator. Fire Chief Pietsch explained there are now fixed generators for the lift stations, so there are three extra generators and another one is not needed. Councilmember Bartholomay stated at the last workshop he talked about reducing an officer and also reducing$100,000. He noted the Police Chief already reduced his budget by$60,000 so there is a difference of$40,000. He felt the police officer position will come up every year. Mayor Larson asked about the staff re-organization. City Administrator McKnight was considering a couple different options, but did not want to discuss them until he was clear. If Council was not comfortable including this because it is not clear, he understood. City Administrator McKnight was comfortable with doing a staff re-organization. Staff has been cut for the last five years, but we have not cut any work. He did not want to bring more staff cuts without reducing work,but some of the work cannot be cut. You could generalize it as greater efficiencies. 11 Council Workshop Minutes December 10,2012 Page 2 Mayor Larson asked about charging the EDA for staff time. City Administrator McKnight explained the City Planner spends most of her time on economic development, but we don't charge any of that time to the EDA. He proposed taking$15,000 of economic development next year to pay for some of her staff time. We are paying off the EDA loan this year, so there will be $40,000 of the$50,000 available. The Council suggested putting the net proceeds from the sale of the old senior center building into the EDA fund. There will be some money to spend in economic development next year, but we do not charge them for staff time. Councilmember Donnelly asked where funding for prior staff came from. Some Councilmembers thought previous staff was paid from the EDA and some thought from the general fund. Councilmember Fogarty stated the EDA is broke, so was not sure how the EDA will pay for staff. City Administrator McKnight stated the fund balance will be at zero or a little above by the end of 2012. We have $50,000 we are transferring to the EDA in 2013. Approximately$10,000 of that is committed to other expenditures. That leaves$40,000 and if you take the net proceeds from the sale of the senior center building,that is an additional$30,000. Councilmember Fogarty asked if Councilmembers were looking for permanent changes or are we looking to take$152,000 out of one budget year in one time cuts. Charging the EDA is a permanent policy change and there was not enough time to make a policy change. If we want to switch money from the EDA,then we are better off talking about one time transfers such as the money we just delegated to the EDA and put it back to the general fund. She was not a fan of that because she did not like one time changes. She did not know what the desire was; if we are looking to permanently cut$152,000 out of the budget or if this is just a 2013 issue. She asked what Councilmember Bartholomay's intent was when he made the motion to cut$152,000 from the budget. He stated it was for 2013,one time cuts and reconsider the budget for 2014. Councilmember Fogarty stated if we are talking about one time cuts, she did not want to talk about building or trail maintenance because these are funds we set up to reduce costs. Those should not be on the table because that is a change in policy. Councilmember Bartholomay did not want to use EDA money to pay for staff. Councilmember May felt we should take the full$30,000 from the sale. If we are looking at staff re-organization, she would not take money from one pot and put into another pot. Take the$30,000 now and look at what happens with re-organization in 2013. We have two City Planners,that could be discussed and use them how you see best. Whether they are paid from the EDA or the general fund, she would not touch that now. Mayor Larson asked about using the reserve. Councilmember May questioned the pond testing. She would not touch building or trail maintenance. City Administrator McKnight noted the pond testing comes from the storm water fund, not the general fund. Councilmember May agreed with looking at rent income for farming the park land. When you take staff off the table, you have to look at revenue. Councilmember Bartholomay stated as far as using the reserve money, it depends on what we want to do with the Fire Chief's vehicle. If you eliminate the reserve and the vehicle, and the vehicle breaks down,we have no way to pay for it. He would eliminate one or the other. He would rather not use the reserve,but we may not have a choice. 12 Council Workshop Minutes December 10,2012 Page 3 Councilmember Fogarty stated if we are looking at this as a 2013, one time budget decrease, she would support eliminating the generator, eliminate the reserve, do the staff re-organization, and direct the net proceeds from the sale of the old senior center to the general fund. She would not support eliminating trail maintenance, eliminating a police officer, eliminating building maintenance. As far as the chief's vehicle or reserve, you have to have one or the other. Councilmember Donnelly stated as far as the generator,the Fire Department did not give up anything because they didn't need the generator. He would keep the reserve and eliminate the chief's vehicle, and put the proceeds from the sale of the old senior center to the general fund. By holding the line on taxes, we did some economic development and helped the businesses. The$30,000 from the building sale helps that. Councilmember May left it to the City Administrator as to whether to eliminate the chief's vehicle. Mayor Larson summarized to do the following: Eliminate$50,000 of the reserve or$45,000 for the chief's vehicle Put$30,000 from the net proceeds of the sale of the old senior center in the general fund Do the staff re-organization of$24,000 Eliminate the generator for$50,000 City Administrator McKnight suggested cutting the chief's vehicle and watch the reserve line item during 2013. If there is money left,then purchase the chief's vehicle. The final outcome was: Eliminate the generator$50,000 Building sale revenue to the general fund for$30,000 Staff re-organization of$24,000 Eliminate Chief's vehicle$45,000 Use$3,986 from reserve City Administrator McKnight updated Council on a question from Mr. Tonsager at the last Council meeting. His tax increase will go from$850 to $600. Councilmember Fogarty stated the majority of the$152,000 cut will buy down private property taxes more than commercial. The above list will be brought to the December 17, 2012, Council meeting. MOTION by Fogarty, second by Bartholomay to adjourn at 7:04 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 13 7Z A°`` ! ' �► ► City of Farmington 430 Third Street !Nil ', Farmington,Minnesota 651.280.6R00•Fax 651:280.6899 ww'w 1.tarmmgLnn.m1w. TO: Mayor, Councilmembers and City Administrator FROM: Cynthia Muller, Executive Assistant SUBJECT: Appointments to Boards and Commissions DATE: December 17, 2012 INTRODUCTION/DISCUSSION On January 31, of each year a number of Boards and Commissions terms expire. Traditionally the City Council interviews applicants in January and appoints at the second City Council meeting in January. The following is a list of terms expiring on January 31, 2013: Heritage Preservation Commission Two 3-year terms Parks and Recreation Advisory Commission Two 3-year terms Planning Commission Two 2-year terms Rambling River Center Advisory Board Two 3-year terms Water Board One 3-year term ACTION REOUESTED Set a special meeting of the City Council for Monday, January 14, 2013,at approximately 5:30 p.m. at City Hall to interview applicants for Boards and Commissions appointments. Respectfully submitted, Cynthia Muller Executive Assistant 14 7c__ Ej City of Farmington 430 Third Street t l:annington,(Minnesota 441.A 651.2R0.(S00•Fax fi5l 2E0.6S99 ww yci.t`armingum.mn.Les TO: Mayor, Councilmembers and City Administrator FROM: Cynthia Muller Executive Assistant SUBJECT: Temporary On-Sale Liquor Licenses—VFW Post 7662 DATE: December 17, 2012 INTRODUCTION The VFW is requesting Temporary On-Sale Liquor Licenses for three fundraisers. DISCUSSION The VFW is requesting Temporary On-Sale Liquor Licenses for three fundraisers to be held on January 19, 2013, February 16,2013, and March 16, 2013, at 421 Third Street. Per State Statute, a Temporary On-Sale Liquor License must first be approved by the City and then forwarded to the State for approval. BUDGET IMPACT The State of Minnesota waives all fees for Temporary Liquor Licenses for non-profit organizations. Therefore,the City has not established a fee for a Temporary On-Sale Liquor License. ACTION REQUESTED Approve the attached applications for three Temporary On-Sale Liquor Licenses for the VFW for fundraisers on January 19, 2013, February 16, 2013, and March 16, 2013. Respectfully submitted, Cynthia Muller Executive Assistant 15 rikA Minnesota Department of Public Safety L kk ALCOHOL AND GAMBLING ENFORCEMENT DIVISION MIL 'tr se 444 Cedar Street Suite 133,St.Paul MN 55101-5133 e ms""'"` (651)201-7507 Fax(651)297-5259 TTY(651)282-6555 ':4;: W W W.DPS.STATE.MN.US • APPLICATION AND PERMIT FOR A 1 TO 4 DAY TEMPORARY ON-SALE LIQUOR LICENSE TYPE OR PRINT INFORMATION NAME OF ORGANIZATION DATE ORGANIZED TAX EXEMPT NUMBER S/AV•;G</n",o fr'Y Y '.LI-' lei i 7e1,� of uw 4i/_4 d 67 arV.ar" STREET ADDRESS CITY �I , STA"TE r ZIP CODE EJ /17,2 "1r- rAg J j < ; a X L. 5-'5-6;2 y fI NAME OF PERSON MAKING APPLICATION BUSINESS PHONE _ HOME PHONE DATES LIQUOR WILL BE SOLD , . rep •I;ORGANIZATION ORGANIZATION OFFICER'S NAME ► S • • 7/ 4 6771:;;F114"`- -..1;-"•", yy5) ; .mss, 7, ORGANIZATION OFFICER'S NAME ADDRESS • 07,0, e , $; %Lc? _ �- / G/13'SYl3� ORGANIZATIOW'OFFICER'S NAME ADDRESS C' Tom' JJ 6, �'oa y�3s 186-1 s7L /fr=›T04. >PS�: Location license will be used. If an outdoor area,describe Will the applicant contract for intoxicating liquor service? If so,give the name and address of the liquor licensee providing the service. Will the applicant carry liquor liability insurance? If so,please provide the carrier's name and amount of coverage. t,JSex re YOs•C. "72-1,it 0j4.1e) pad dJ c/ A-r en-7 111's•>- • APPROVAL APPLICATION MUST BE APPROVED BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL&GAMBLING ENFORCEMENT CITY/COUNTY DATE APPROVED CITY FEE AMOUNT LICENSE DATES • DATE FEE PAID SIGNATURE CITY CLERK OR COUNTY OFFICIAL APPROVED DIRECTOR ALCOHOL AND CANDLING ENFORCEN1Vr NOTE:Submit this form to the city or county 30 days prior to event. Forward application signed by city and/or county to the address above. If the application Is approved the Alcohol and Gambling Enforcement Division will return this application to be used as the License for the event PS-09079(05/06) 16 fir-% Minnesota Department of Public Safety - ',,,; ` ALCOHOL AND GAMBLING ENFORCEMENT DIVISION ` ' 444 Cedar Street Suite 133,St.Paul MN 55101-5133 kt(651)201.7507 Fax(651)297.5259 TTY(651)282-6555 ': W WW.DPS.STATE•MN,US APPLICATION AND PERMIT FOR A l TO 4 DAY TEMPORARY ON-SALE LIQUOR LICENSE TYPE OR PRINT INFORMATION NAME OF ORGANIZATION DATE ORGANIZED TAX EXEMPT NUMBER Y/Afd•:G<tnrPl lsr' y " ' 1p r74 �.i e:,� 2, � ,lei/-4 9 in 0 a.,v STREET ADDRESS CITY STATE ZIP CODE Tr • rAgt n) 4 y6N r N• 5'.-"C,;2 / • Noc OF PERSON MAKING APPLICATION BUSINESS PHONE HOME PHONE 01 'IZ511tCLZ7 (051) tai�t�5�3<J� 4,-1;14 ' ,•3"Si3`7 DATES LIQUOR WILL BE SOLD 0•,/ /4 a/3 1;ORGANIZATION CLpi HARITABLE RELIGIOUS OTHER NONPROFIT ORGANIZATION OFFICER'S NAME S ORGANIZATION OFFICER'S NAME ADDRESS PP;f#kat_ .3*AV IA yjl a via�J� ORGANIZATIOI4'OFFICER'S NAME ADDRESS I 1-'673• 41 qJ,s$ /S4-1 Or- 6 rkS Location license will be used. If an outdoor area,describe • Will the applicant contract for intoxicating liquor service? If so,give the name and address of the liquor licensee providing the service. • j Will the applicant carry liquor liability insurance? If so,please provide the carrier's name and amount of coverage. D1,Scr %Y0,,CZ; 41/7J/5 ` Da✓ esf I;r - Ai dv.r7 • APPROVAL APPLICATION MUST BE APPROVED BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL&GAMBLING ENFORCEMENT CITY/COUNTY DATE APPROVED CITY FEE AMOUNT LICENSE DATES DATE FEE PAID '•Y SIGNATURE CITY CLERK OR COUNTY OFFICIAL APPROVED DIRECTOR ALCOHOL AND GAMELLDG ENFORCEMENT NOTE:Submit this form to the city or county30 days prior to event. Forward application signed by city and/or county to the address above. If the application is approved the Alcohol and Gambling Enforcement Division will return this application to be used as the License for the eve of PS-09079(0506) 17 • Minnesota Department of Public Safety •Ltd ALCOHOL AND GAMBLING ENFORCEMENT DIVISION '° �;.,■ ....; '�,,p� sew 444 Cedar Street Suite 133,St.Paul MN 55101-5133 ,. (651)201-7507 Fax(651)297.5259 TTY(651)282-6555 W W W.DPS.STATE.MN.US APPLICATION AND PERMIT FOR A I TO 4 DAY TEMPORARY ON-SALE LIQUOR LICENSE ' TYPE OR PRINT INFORMATION NAME OF ORGANIZATION DATE ORGANIZED TAX EXEMPT NUMBER • •S-Adnz•;C.//et?;D,,n‘t7-r yew. 0Iiir-76 cs,r. L � !iJ-O 6 0 4,vs-- STREET ADDRESS CITY STATE ZIP CODE /Pi ;IT, • 114 =x ,;~: j QH Al N . � .�G;1 �. N4 OF PERSON MAKING APPLICATION BUSINESS PHONE _ HOME PHONE Ci jam$ - L (451) &4)b fv1 ftt (( Z) '-t,3 3 6'7 I, DATES LIQUOR WILL BE SOLD1 , I�" 1;ORGANIZATION • CItt CHARITABLE RELIGIOUS OTHER NONPROFIT ORGANIZATION OFFICER'S NAME S t-r 413 7/1 r5'-arrrr:-4•t44 «..4� y�i'y?-.s„5�� -/ ORGANIZATION OFFICER'S NAME ADDRESS ORGANIZATIOIfOFFICER'S NAME ADDRESS /-,4? t›,Z,4a el "43jS' / G :ff- L� /f r,•s,•r0s yr-s.R;-' Location license will be used. If an outdoor area,describe Will the applicant contract for intoxicating liquor service? If so,give the name and address of the liquor licensee providing the service. Wilt the applicant carry liquor liability insurance? If so,please provide the carrier's name and amount of coverage. pJ,ycrO'ipt,, /r4f2✓J5 >fi Calti82C,'•.i's✓ ed �%�r:2 4- en-7 APPROVAL APPLICATION MUST BE APPROVED BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL&GAMBLING ENFORCEMENT CITY/COUNTY DATE APPROVED CITY FEE AMOUNT LICENSE DATES • DATE FEE PAID SIGNATURE CITY CLERK OR COUNTY OFFICIAL APPROVED DIRECTOR ALCOHOL AND GAMBLING ENFORCEMENT NOTE:Submit this form to the city or county 30 days prior to event. Forward application signed by city and/or county to the address above. If the application is approved the Alcohol and Gambling Enforcement Division will return this application to be used as the License for the eve at PS-09079(05106) 18 71 ',�s�' E7 City of Farmington �`-Y--� 430 Third Street ' = l mrtt:ington,Minnesota 651.2R0.6R00•Fax 651.2S0.6R99 ww ci.tannmgt ni.mn.ur TO: Mayor, Councilmembers and City Administrator FROM: Cynthia Muller Executive Assistant SUBJECT: Temporary On-Sale Liquor License—Knights of Columbus DATE: December 17, 2012 INTRODUCTION The Knights of Columbus are requesting a Temporary On-Sale Liquor License for a fundraiser. DISCUSSION The Knights of Columbus are requesting a Temporary On-Sale Liquor License for a fundraiser to be held on February 23, 2013, at 22120 Denmark Avenue. Per State Statute, a Temporary On- Sale Liquor License must first be approved by the City and then forwarded to the State for approval. BUDGET IMPACT The State of Minnesota waives all fees for Temporary Liquor Licenses for non-profit organizations. Therefore,the City has not established a fee for a Temporary On-Sale Liquor License. ACTION REQUESTED Approve the attached application for a Temporary On-Sale Liquor License for the Knights of Columbus for a fundraiser on February 23,2013. Respectfully submitted, Cynthia Muller Executive Assistant 19 • Minnesota Department of Public Safety , r .&I, 1 ALCOHOL AND GAMBLING ENFORCEMENT DIVISION ` k\? 'S' � 444 Cedar Street Suite 222,St.Paul MN 55101-5133 ? (651)2014507 Fax(651)297-5259 TTY(651)282-6555 s a WWW.DPS.STATE.MN.US APPLICATION AND PERMIT FOR A 1 TO 4 DAY TEMPORARY ON-SALE LIQUOR LICENSE - TYPE OR PRINT INFORMATION NAME OF ORGANIZATION DATE ORGANIZED TAX EXEMPT NUMBER /< 1-5 a (es I r i.,n h a A aJ o /0//96(0 0 g61).5 9 STREETADDRESS CITY ! STATE ZIP CODE r7 /AO O).en vitll^k /90 e. Arm �ori /'!1 S-S( 1/ NAME OF PERSON MAKING APPLICATION BUSINES*HONE HOME PHONE 864r crisQ. J C:.rnc.;s ot. ( ) (9�‘ rj'6 3-- 0/9 7 DATES LIQUOR WILL BE SOLD TYPE OF ORGANIZATIO redo a 3 a /3 CLUB CHARITABLE RELIGIOUS OTHERNONPROFIT ORGANIZATION OFFICER'S NAME ADDRESS 00.s-sit GV rt S S + r ( ORGANIZATION OFFICE S NAME ADDRESS �� n t / N ORGANIZATION OFFICER'S NAME ADDRESS Location licenje will be used. If an outdoor area,describe uhGfrel,Sser • Will the applicant contract for intoxicating liquor service? If so,give the name and address of the liquor licensee providing the service. .t1 Will the applicant carry liquor liability insurance? If so,please provide the carrier's name and amount of coverage. APPROVAL APPLICATION MUST BE APPROVED BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL&GAMBLING ENFORCEMENT CITY/COUNTY DATE APPROVED CITY FEE AMOUNT LICENSE DATES DATE FEE PAID SIGNATURE CITY CLERK OR COUNTY OFFICIAL APPROVED DIRECTOR ALCOHOL AND GAMBLING ENFORCEMENT NOTE:Submit this form to the city or county 30 days prior to event. Forward application signed by city and/or county to the address above. If the application is approved the Alcohol and Gambling Enforcement Division will return this application to be used as the License for the event PS-09079(12/09) 20 • f -No City of Farmington 430 Third Street Farmington,Minnesota � . ° 651,2130.15800•Fax 651.2B0,6899 st•A w W W.ici Armingufliinn ti TO: Mayor, Councilmembers and City Administrator FROM: Cynthia Muller Executive Assistant SUBJECT: Gambling Event Permit—Knights of Columbus DATE: December 17, 2012 INTRODUCTION The Knights of Columbus are requesting a Gambling Event Permit for two bingo fundraisers. DISCUSSION Per State Statute 349.166 and pertinent City Code, a Gambling Event Permit must be issued by the City for this type of event. An application has been received, along with the appropriate fees. The City Attorney has reviewed the application and the attached resolution approving the request. BUDGET IMPACT Gambling fees are included in the revenue portion of the 2013 budget. ACTION REQUESTED Consider the attached resolution granting a Gambling Event Permit to the Knights of Columbus, to be held at St. Michaels Catholic Church, 22120 Denmark Avenue, on February 23 and November 23, 2013. Respectfully submitted, Cynthia Muller Executive Assistant 21 RESOLUTION NO. R56-12 APPROVING A MINNESOTA LAWFUL GAMBLING EVENT PERMIT APPLICATION FOR THE KNIGHTS OF COLUMBUS Pursuant to due call and notice thereof,a regular meeting of the City Council of the City of Farmington,Minnesota,was held in the Council Chambers of said City on the 17th day of December 2012 at 7:00 p.m. Members Present: Larson,Bartholomay,Donnelly,Fogarty, May Members Absent: None Member Fogarty introduced and Member Bartholomay seconded the following: WHEREAS,pursuant to M.S.349.166,the State of Minnesota Gambling Board may not issue or renew a Gambling Event Permit unless the City Council adopts a Resolution approving said permit; and, WHEREAS,the Knights of Columbus have submitted an application for a Gambling Event Permit to be conducted at St. Michael's Catholic Church,22120 Denmark Avenue on February 23 and November 23,2013,for Council consideration. NOW,THEREFORE,BE IT RESOLVED by the Farmington City Council that the Gambling Event Permit for the Knights of Columbus,22120 Denmark Avenue,is hereby approved. This resolution adopted by recorded vote of the Farmington City Council in open session on the 17th day of December 2012. Mayor Attested to the /5?.fh day of December 2012. Administrator SEAL osim8iy� City of Farmington 1 430 Third Street 7�-'^ Farmington,Minnesota 651.280.6800•Fax 651.280.6899 "moo wwwci.farmington.mn.us TO: Mayor and City Council Members FROM: David J.McKnight,City Administrator SUBJECT: Tort Liability Limits DATE: December 17,2012 INTRODUCTION The City of Farmington has annually determined if we wish to waive the statutory tort limits that an individual would be able to recover from the City in the event a single occurrence would result in an insurance claim that would exceed the$500,000 statutory limit, DISCUSSION The decision on this topic defines the limits any individual would be able to recover from the City. If the City waives the limit,an individual could recover up to$3,500,000 for a single occurrence on a claim. Our insurance agent recommends against waiving the statutory limit. BUDGET IMPACT The 2013 budget includes our estimated cost of insurance premiums. If the limits are waived a new estimate would need to be received from the League of Minnesota Cities Insurance Trust with those costs coming out of the employee expense fund. ACTION REOUESTED City staff is recommending that a motion be made to approve the resolution stating that the City does not waive the liability limits for 2013 and beyond since waiving the liability limits would increase our premiums and the potential amount the City may have to pay in claims. In addition, the attached resolution makes this decision on going unless a new resolution is passed stating otherwise in the future. Respectfully submitted, David J.McKnight City Administrator 23 RESOLUTION NO. R57-12 A RESOLUTION ACCEPTING STATE TORT LIMITS Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington was held at the Farmington City Hall on the 17th day of December 2012 at 7:00 p.m. Members Present: Larson, Bartholomay, Donnelly, Fogarty, May Members Absent: None Member Fogarty introduced and Member Bartholomay seconded the following: WHEREAS,the City of Farmington is annually asked if they would like to waive the state tort limits when it comes to the maximum amount an individual can recover from the city with an insurance claim; and WHEREAS,the City would like to make the decision to not waive the state tort limits ongoing since it is beneficial to the City. NOW THEREFORE BE IT RESOLVED by the Mayor and City Council of the City of Farmington,that the City does not waive the statutory tort limits for 2013 and beyond and this decision will remain in effect in future years unless a new resolution is passed stating otherwise. This resolution was adopted by recorded vote of the Farmington City Council in open session on the 17th day of December 2012. Mayor Attested to on the /8i4 day of December 2012. i dministrator SEAL J 401141 City of Farmington 0 430 Third Street >>- � Farmington,Minnesota ,, 0 651.280.6800•Fax 651.280.6899 -.Anp1°�- wwwci.farmington.mnus TO: Mayor and City Council FROM: David J.McKnight,City Administrator SUBJECT: 2013 Non-Represented Compensation Adjustment DATE: December 17,2012 INTRODUCTION Annually the City Council reviews the compensation of the employees in the non represented group. This process is done in conjunction with the annual budget process. DISCUSSION Annual salary adjustments for non-represented employees have been reviewed and are proposed at one percent(1%)effective January 1,2013 for non-represented employees who are in steps one through five of the 2013 wage scale. There is no adjustment proposed for steps six through nine. Non-represented employees for purposes of this annual salary adjustment include confidential and non-represented employees. All other employees belong to collective bargaining units which require the City to formally negotiate changes in the terms and conditions of employment through the collective bargaining process. BUDGET IMPACT The cost of this adjustment is included in the proposed 2013 budget that will be considered at your December 17,2012 meeting. ACTION REQUESTED If the City Council is in agreement with this proposal,a motion should be made to approve the attached resolution adjusting the 2013 non-union wage scale by one percent in steps one through five and not adjustment in steps six through nine effective January 1,2013. Respectfully submitted, David J.McKnight City Administrator 25 RESOLUTION NO. R58-12 A RESOLUTION APPROVING ANNUAL SALARY ADJUSTMENTS FOR NON- REPRESENTED EMPLOYEES FOR 2013 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington was held at the Farmington City Hall on the 17th day of December 2012 at 7:00 p.m. Members Present: Larson, Bartholomay, Donnelly, Fogarty, May Members Absent: None Member Fogarty introduced and Member Bartholomay seconded the following: WHEREAS,there will be no annual percentage adjustment for non-represented employees effective January 1, 2013; and WHEREAS,this will be reconsidered after January 1, 2013,to use the budget reserve for mid- year adjustments; and WHEREAS,non-represented employees are defined as those public employees not formally represented by an exclusive bargaining group as defined under Minnesota Statute. NOW THEREFORE BE IT RESOLVED that the City Council hereby approves no annual salary adjustments for non-represented employees effective January 1, 2013, and to reconsider this after January 1, 2013,to use the budget reserve for mid-year adjustments. This resolution was adopted by recorded vote of the Farmington City Council in open session on the 17th day of December 2012. ayor Attested to on the / 44 day of December 2012. C/ City • dministrator SEAL 7h -- City of Farmington Street .,exh,N',. ,�- Farmington,Minnesota °.� 651,2$0ii 00•Fax 65I.2S0,6899 A Me www.clikrningum.mnAti TO: Mayor, Council Members, City Administrator FROM: Tony Wippler,Assistant City Planner SUBJECT: Adopt Resolution—Historic Preservation Consultant Services DATE: December 17, 2012 DISCUSSION Attached is a proposed contract for historic preservation consultant services with Robert Vogel and Pathfmder CRM, LLC. The contract is for the period of January 1, 2013 through December 31, 2013 and establishes an annual retainer fee and hourly wage for historic preservation services provided. This contract is required to establish an hourly wage for in-kind services Mr. Vogel may provide in conjunction with Certified Local Government Grants. The grants are used to further the exploration of historic sites in Farmington. BUDGET IMPACT The proposed fee for 2013 services is $7,100. The consultant fees are included in the proposed 2013 budget. ACTION REQUIRED Adopt the attached resolution approving the contract for Historic Preservation Consulting Services. Respectfully submitted, Tony Wippler, Assistant City Planner 27 RESOLUTION NO.R59-12 • CONTRACT FOR SERVICES PRESERVATION PLANNER Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington, Minnesota,was held in the Council Chambers of said City on the 17th day of December,20U at 7:00 p.m. Members Present: Larson,Bartholomay,Donnelly,Fogarty,May Members Absent: None Member Fogarty introduced and Member Bartholomay seconded the following: THIS CONTRACT made and entered into as of this 17th day of December,2012 by and between the City of Farmington, Minnesota, herein referred to as the "City", and Robert C. Vogel, doing business as Pathfinder CRM,LLC,herein referred to as the"Consultant". WITNES SETH THAT WHEREAS, the City is desirous of retaining professional historic preservation services on an as- needed basis,and; WHEREAS,the Consultant is a qualified historic preservation professional. NOW, THEREFORE, for and in consideration of the mutual covenants and conditions hereinafter contained, it is agreed by and between the City and the Consultant as follows: SCOPE OF SERVICES Pathfinder CRM,LLC will perform the following tasks as an independent private contractor under the supervision of the City Administrator: A. Advise the City of Farmington on all matters relating to heritage preservation,including the identification,evaluation,registration,and treatment of heritage resources. Pathfinder CRM senior staff will also be available for presentations to the Heritage Preservation Commission,the Planning Commission,and the City Council as needed. B. Prepare applications for grants-in-aid for preservation projects as directed by the City Administrator. C. Provide information,education,and training in heritage preservation to City officials and advise in the development of high-quality public education and outreach programs. D. Assist City staff in reviewing development projects and applications for certificates of appropriateness in relation to designated heritage landmark properties. a ' E. Perform such other preservation planning tasks as authorized by the City Administrator. COMPENSATION For the services described above in paragraphs A through D,Pathfinder CRM will be paid a quarterly retainer fee of one thousand seven hundred seventy-five dollars($1,775), due on the first of January, April,July,and October,2013. Pathfinder CRM agrees to bill the City at the rate of seventy-five dollars($75)per hour for all work performed under paragraph E. PERSONNEL The City and Pathfinder CRM further agree that Robert C.Vogel will be the City's designated preservation planner. Pathfinder CRM architects,planners,archaeologists,and other preservation professionals may be utilized as needed, subject to authorization by the City Administrator. This contract for services shall be in effect from January 1 until December 31,2013. PATHFINDER I , LC THE CITY OF FARMINGTON 7 /444� F �4, City of Farmington - 430 Third Street Farmington,Minnesota �� ' � 651,2R0.6800•Fax 651.2 0.6S99 w ww.ci.tarrn ingM m.mn.uv TO: Mayor,Council Members,City Administrator FROM: Tony Wippler,Assistant City Planner SUBJECT: Adopt Ordinance Amending Section 10-6-3(B)1(g) of the City Code Increasing the Size of Window Signs Allowed DATE: December 17,2012 INTRODUCTION Attached for Council's consideration is an ordinance amending 10-6-3(B)1(g) of the City's sign code proposing an increase to the size of window signs allowed. DISCUSSION Staff has been approached by a new business owner within the downtown who wants to utilize up to 40% of each window of the building he is occupying at 305 Elm Street with painted window signs. At this time, Section 10-6-3(B)1(g) of the City's sign code states that "Permanent signs printed or otherwise displayed from the inside surface on an individual window shall not exceed two(2)square feet or twenty five percent (25%) of the total window area, whichever is greater." This code has been in effect since 1986. With the attached ordinance,staff is proposing increasing the percentage of a window that a widow sign can occupy to forty percent (40%) of the total window area. Staff is suggesting that the two (2) square foot provision remain. Additionally, staff is proposing revising the language to clarify that a window sign is a print, painting or other display located on any surface(whether inside or outside)of an individual window as compared to just the"inside surface"of an individual window as currently specified in the code. Staff has researched other communities in the area to determine their allowance of window sign percentages. These percentages are shown below: • Lakeville—25% • Burnsville—35% • Shakopee—50% • Rosemount—30% • Apple Valley—50% • Prior Lake—No limit Planning Commission Review The Planning Commission held a public hearing concerning this amendment at its regular meeting on December 11, 2012. The Planning Commission recommended approval of the ordinance amendment increasing the size of window signs to 40%with a vote of 4-0. 30 ACTION REQUESTED Adopt the attached ordinance amending Section 10-6-3(B)1(g) of the City Code increasing the size of window signs allowed to 40%. Respectfully submitted, Tony Wippler,Assistant City Planner 31 ORDINANCE NO.012-655 CITY OF FARMINGTON DAKOTA COUNTY,MINNESOTA AN ORDINANCE AMENDING SECTION 10-6-3(B)1(g) OF THE CITY CODE INCREASING THE SIZE OF WINDOW SIGNS ALLOWED THE CITY COUNICL OF THE CITY OF FARMINGTON ORDAINS: SECTION 1. Section 10-6-3(B)1(g) is amended by removing the str-ikethfeugh language and adding the underlined language below as follows: 10-6-3: SIGNS AND BILLBOARDS: (B)Signs Permitted:Upon the adoption of this section,it shall be unlawful and a violation of this section for any person to erect,construct,paint,alter,relocate,reconstruct,display,or maintain or cause to be erected,constructed,displayed or maintained within the city of Farmington any sign without first having obtained a permit from the zoning officer.(Ord.010-619,3-1-2010) 1. Signs Permitted In All Zoning Districts: (g)Window:Permanent signs printed or otherwise displayed from the inside surface of err an individual window shall not exceed two(2)square feet or twenty five percent(25%)forty percent(40%)of the total window area,whichever is greater. SECTION 2. Effective Date. This ordinance shall be effective upon its passage and publication according to law. ADOPTED this 17`i'day of December,2012,by the City Council of the City of Farmington. CITY OF FARMINGTON By: Todd Larson, Mayor ATTEST: By: David McKnig ,Eit Administrator Approved as to form the /9 day of At-e--- ,20 /2. � BI �I By: /City Atto 111 od Published in the Farmington Independent the ,;?7 day of ,20 /„Z.. ?Ji Aft_ i�, City of Farmington 430 Third Street d ', '� Farmington,Minnesota /46 4s' 651,2R0.6R00•Fax 651.280,6899 A Mite ww.v.c1.1drm,gu/A1mn.LIN TO: Mayor, Council Members, City Administrator FROM: Robin Hanson, Finance Director SUBJECT: Approve EDA Loan Payoff DATE: December 17, 2012 INTRODUCTION As of November 30, 2012 the EDA has sufficient cash to pay off the remaining balance on its outstanding loan. DISCUSSION As of December 31, 2011 the EDA had a negative fund balance of$137,438. The primary reason for the negative fund balance was an outstanding loan for improvements made to the library several years ago. The 2012 budget provided for the transfer of$175,000 into the EDA to address the negative fund balance.As a result of this infusion,the EDA now has sufficient funds to pay off the remaining $158,144 loan balance. BUDGET IMPACT No direct budget impact. ACTION REQUESTED Authorize staff to utilize $158,144 of available funds in the EDA to pay off its remaining loan balance,which is owed to the Storm Water Trunk Fund. Respectfully submitted, Robin Hanson, Finance Director 33 24' E / City of Farmington 430 Third Street !� .., s Farmington,Minnesota 651,280.6400•Fax 651.280,6899 �„�A vroa wwwci.tarenmgum.mnu. TO: Mayor, Councilmembers, City Administrator FROM: Kevin Schorzman, P.E., City Engineer SUBJECT: School and Conference DATE: December 17, 2012 INTRODUCTION The City Engineers Association of Minnesota (CEAM) holds its annual meeting in January of each year. The conference is sponsored by CEAM,the Minnesota Department of Transportation (MnDOT)and the League of Minnesota Cities. DISCUSSION In 2013, the CEAM conference is being held at the Earle Brown Heritage Center in Brooklyn Center. The meeting is being held January 30 through February 1, 2013. The conference affords a number of opportunities to learn about, or be updated on, issues relating to municipal engineering. The conference includes sessions on pavement rehabilitation and preventative maintenance, shared services, as well as legal and legislative changes. The conference also includes updates from state agencies such as MnDOT and the Minnesota Pollution Control Agency. BUDGET IMPACT The cost for this conference is $285.00. Funding for this conference is included in the 2013 budget. ACTION REQUESTED Approve Kevin Schorzman's attendance at the 2013 CEAM annual meeting. Respectfully Submitted, Kevin Schorzman, P.E., City Engineer 34 7Z j kEAR City of Farmington /Oa - 430 Third Strect Farmington,Minnesota \ 651,280_68OO•Fax 651.280,6899 wwwci.harmmgtAm.miux TO: Mayor, Councilmembers, City Administrator FROM: Kevin Schorzman, P.E., City Engineer SUBJECT: Approve Contract-Electrical Inspection Services DATE: December 17,2012 INTRODUCTION As a result of the shutdown of the Minnesota government in the summer of 2011, the City of Farmington opted to provide electrical inspection services through an agreement with a private company, thus reducing the impact of the 2011 shutdown, and eliminating the impact of future state government shutdowns if they occur. DISCUSSION Prior to the change in the summer of 2011, electrical inspection services were provided by the State, and Mike Hawke was the inspector for the City of Farmington. Mr. Hawke is the owner of Midwest Electrical Technologies (MET) and this arrangement provided a seamless transition between State inspection and private inspection. Per City ordinance, electrical inspection fees are charged based on the State's fee schedule for electrical inspections. The agreement between the City and MET which currently expires on December 31, 2012, stipulated that MET's compensation would be 75% of the fees collected. The compensation percentage is the main point of the agreement. MET currently provides electrical inspections through private agreements with the following cities in Dakota County: Apple Valley, Farmington, and Hastings. MET also provides electrical inspections through the State for many of the smaller communities in Dakota County as well as several of the surrounding townships. Staff has been pleased with the services provided by Mr.Hawke. Recently,the City of Apple Valley solicited proposals for providing electrical inspection services in their community. They only received two proposals, one from MET, and one from another company. The other company proposed a compensation rate of 80%. Since there are a limited number of electrical inspectors that serve Dakota County, and based on the results of the proposals submitted to Apple Valley, staff is recommending that Council approve the attached 3- year agreement with MET to continue to provide electrical inspection services within the City. 35 Electrical Inspection Services Agreement December 17, 2012 Page 2 of 2 BUDGET IMPACT Estimates for permit revenue are included in the 2013 budget. ACTION REQUESTED Approve the attached professional services agreement with MET. Respectfully Submitted, Kevin Schorzman, P.E., City Engineer 36 PROFESSIONAL SERVICES AGREEMENT FOR INSPECTION OF ELECTRICAL INSTALLATIONS THIS AGREEMENT is made this 17th day of December, 2012, by and between the City of Farmington, a Minnesota municipal corporation ("City") and MIDWEST ELECTRICAL TECHNOLOGIES,Inc., a Minnesota corporation("MET"),to set forth the terms and conditions pursuant to which MET may, from time to time, provide City with professional services (the "Services") consisting of inspection of electrical installations within the City of Farmington (each individually a"Project"). The contract documents that comprise the entire agreement between City and MET concerning the Services consist of this Agreement, the Work Orders, insurance policies, change orders, and additional documents specific to the particular Project, as listed in the Work Orders, and together they set forth the terms and conditions under which MET will provide City with the Services described therein. In consideration of the mutual covenants and agreements herein contained, City and MET hereby agree as follows: 1. Responsibilities of MET 1.1 Services. City may, in its sole discretion, from time to time request MET to perform professional services pursuant to the terms of this Agreement. City will authorize such Services by executing a Work Order specifying the Project and the date for completion of Services. Upon receipt of a signed Work Order, MET shall perform the Services pursuant to the terms of the Work Order and this Agreement. City may order changes to the Work Order consisting of additions, deletions or other revisions,which shall be authorized by written Change Order. If MET is unwilling or unable to perform the requested Services, MET shall promptly notify City's representative who authorized the Services. City's representative(s)with individual authority to execute Work Orders and Change Orders are as designated by the City in writing from time to time. 1.2 Performance Standards. MET shall provide its Services in a professional manner that is consistent with the degree of care and skill ordinarily exercised under similar circumstances by reputable members of its profession practicing in the same locality, MET shall comply with all applicable laws,regulations and ordinances and with inspection procedures established by the City. 1.3 Qualifications of Electrical Inspectors. MET represents and warrants to City that every person performing Services under this Agreement shall meet the following qualifications: pursuant to Minn. Stat. § 326B.36, Subd. 6,each electrical inspector shall be a licensed master or journeyman electrician under Minn. Stat. § 326B.33, Subd. 1,paragraph(1),or Subd. 2,paragraph(b), and shall not otherwise engage or be employed in the sale, installing, altering, or repairing of electrical wiring, apparatus,or equipment for light,heat,power,and other purposes and shall have no financial interest in any concern engaged in any such business. 1.4 Time for Performance of Services. MET shall perform the Services in each Work Order in the sequence and time specified in the Work Order and as otherwise required by the progress and nature of the Project. An electrical inspector employed by MET shall be available to perform the Services as Farmington needed between 8:30 a.m. and 4:00 p.m., Monday 37 through Friday, excluding days on which the Farmington City Hall is closed("Holidays"). Generally,the Services shall be completed with forty-eight (48)hours after receipt of a Work Order, excluding weekends and Holidays. 1.5 Coordination. MET shall coordinate its Services with the services provided by others relative to the Project. 1.6 Failure to Pass Inspection. If any Project does not pass inspection, MET shall notify the contractor,the property owner and the City of the specific findings of the inspection on the date of such inspection, and perform follow-up inspections as needed to obtain compliance. 1.7 Reporting. MET shall prepare and submit to the appropriate authorities any and all documents and information required by the City or by City ordinance, state law or federal law. 1.8 Ownership of Work Product. The work product of MET's Services pursuant to this Agreement, including all documents and information, shall be the property of City. Notwithstanding any provision in this Agreement to the contrary,the City shall not be obligated to pay MET for any Services under this Agreement until MET delivers all related inspection records and documents to the City. 1.9 Agreement Not Exclusive. This Agreement shall not preclude the City from engaging any other person or entity to perform inspection of electrical installations,nor shall this Agreement preclude MET from providing similar or related services for any other entity. However,the particular service MET performs for the City shall be for the exclusive benefit of the City and not for the benefit of any other entity. 1.10 No Office Provided. MET will supply its own office facility, if one is needed. 2. Indemnification and Insurance. 2.1 Indemnification. MET shall indemnify, defend and hold City harmless from and against all liabilities, claims, damages, losses and expense, including reasonable attorney's fees, arising out of or resulting from the performance of the Services. 2.2 Insurance. MET shall keep and maintain the following insurance coverage. 2.2.1 Workers Compensation Insurance,MET shall maintain workers compensation insurance with the following limits or with the minimum limits required by law if greater: Coverage A: Statutory Coverage B: $1,000,000 Bodily Injury by accident Each accident $1,000,000 Bodily Injury by disease Policy limit$1,000,000 Bodily Injury by disease Each employee 2.2.2 General Liability Insurance. MET shall maintain general liability insurance with coverage to include: Premises/Operations, Completed Operations and Contractual Liability(to cover the indemnification provision in paragraph 2.1 of this Agreement). Limits of coverage shall not be less than: 38 $1,000,000 Per occurrence $2,000,000 Aggregate 2.2.3 Automobile Insurance. MET shall maintain automobile liability insurance to include all owned autos(private passenger and other than private passenger),hired and nonowned vehicles. Limits of coverage shall not be less than: $500,000 Per occurrence 2.2.4 Errors and Omissions. MET shall maintain errors and omissions/professional liability insurance. The limit of coverage shall not be less than$1,000,000. 2.2.5 Umbrella Insurance. MET shall maintain umbrella/excess limits insurance in an amount not less than$1,000,000. 2.3 Evidence of Insurance. The above insurance shall be maintained in companies lawfully authorized to do business in Minnesota and which are reasonably acceptable to City. The City shall be listed as an additional insured on the insurance policies, excluding the workers' compensation insurance policy. MET shall furnish City with certificates reflecting such insurance(ACORD form or equivalent)to be in force as long as this agreement remains in effect and providing that said insurance will not be canceled or materially changed without prior written notice to City. 2.4 Health and Safety. MET will take all necessary precautions, meet all legal requirements for the health and safety of all its employees on the Project and all other persons who may be affected by the Services. This requirement will apply continuously and is not limited to normal working hours. 3. Responsibilities of City. 3.1 City will pay compensation to MET for the Services set forth in each Work Order,together with any adjustments set forth in written Change Orders, after the Project passes final electrical inspection. The amount of compensation shall be equal to seventy five percent(75%)of the corresponding electrical permit fees,excluding any City administrative fees and state surcharges. MET shall submit itemized invoices not more than two (2)times per month, listing the Work Order numbers and the corresponding date(s)that each Project passed final electrical inspection. City shall make payment to MET within twenty(20) days after receipt of each invoice. MET shall be responsible for all other expenses, including, but not limited to,transportation,materials, equipment, labor and insurance costs and tax obligations. 3.2 Administration. The City shall perform the following administrative functions in connection with the Services, at the City's cost: 3.2.1 Issue electrical permits; 3.2.2. Issue Work Order and Change Orders; 3.2.3. Provide inspection approval stickers; 3.2.5 Issue correction notices;and 39 3.2.6 Maintain inspection records. 4. Miscellaneous. 4.1 Entire Agreement. The terms and condition set forth herein constitute the entire understanding of the parties relating to the provision of the Services by MET to City and shall be incorporated in all Work Orders unless otherwise so stated therein. This Agreement may be amended only by a written instrument signed by both parties. 4.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. Any action to enforce this Agreement shall be venued in Minnesota District Court in Dakota County, Minnesota. 4.3 Assignment Prohibited. This Agreement may not be assigned by MET of City without the prior written consent of the other party. 4.4 Subcontracting Prohibited. MET may not subcontract with any person or entity for performance of any Services under this Agreement. 4.5 Term. The term of this Agreement shall commence on January 1, 2013 and shall expire on 31s`day of December, 2015, subject to renewal by the parties. 4.6 Termination. This Agreement may be terminated by either party upon seven(7)days written notice should the other party fail to perform in accordance with the terms hereof provided such failure is not cured within such seven(7)day period. City may terminate this Agreement for convenience at anytime, in which event MET shall be compensated in accordance with the terms hereof for Services performed and reimbursable expenses incurred prior to its receipt of written notice of termination from City. 4.7 Force Majeure. Neither party shall be liable for damages or deemed in default of this Agreement and any Work Order hereunder to the extent that any delay or failure in the performance of its obligations(other than the payment of money)results,without its fault or negligence, from any cause beyond its reasonable control, such as acts of God,acts of civil or military authority, embargoes, epidemics, war,riots, insurrections, fires, explosions, earthquakes, floods, adverse weather conditions, strives or lockouts,and changes in laws, statutes,regulations, or ordinances. 4.8 Audit. Under Minn. Stat. §6.551 and 16C.05, subd. 5,MET's books,records,documents and accounting procedures and practices relevant to this Agreement are subject to examination by the City,Legislative Auditor, and/or State Auditor, as appropriate, for a minimum of six years from the end of this Agreement. MET shall maintain its books,records and documents for at least six(6)years. 4.9 Severability. Should a court of law determine that any clause or section of this Agreement is invalid, all other clauses or sections shall remain in effect. 4.10 Compliance with Law and Regulations. In providing services hereunder,MET shall abide by all statutes,ordinance,rules and regulations pertaining to the provisions of services to be provided. 40 4.11 Independent Contractor. The City hereby retains the MET as an independent contractor upon the terms and conditions set forth in the Agreement. MET is not an employee of the City and is free to contract with other entities as provided herein. MET shall be responsible for selecting the means and methods of performing their work. MET shall furnish any and all supplies,equipment, and incidentals necessary for MET's performance under this Agreement. MET shall be exclusively responsible under this Agreement for MET's FICA payments,workers compensation payments,unemployment compensation payments,withholding amounts, and/or self-employment taxes if any such payments, amounts,or taxes are required to be paid by law or regulation. 4.12 Minnesota Government Data Practices Act. MET must comply with the Minnesota Government Data Practices Act,Minnesota Statutes Chapter 13, as it applies to(1)all data provided by the City pursuant to this Agreement, and(2) all data, created, collected,received, stored,used,maintained, or disseminated by the MET pursuant to this Agreement. MET is subject to all the provisions of the Minnesota Data Practices Act, including but not limited to the civil remedies of Minnesota Statutes Section 13.08, as if it were a government entity regarding data created or maintained pursuant to this agreement. In the event MET receives a request to release data,MET must immediately notify City. City will give MET instructions concerning the release of the data to the requesting party before the data is released. MET agrees to defend, indemnify, and hold City, its officials, officers, agents, employees,and volunteers harmless from any claims resulting from MET's officers', agents', city's,partners', employee', volunteers', assignees' or subcontractors' unlawful disclosure and/or use of protected data. The terms of this paragraph shall survive the cancellation or termination of this Agreement. IN WITNESS WHEREOF, CITY and MET have caused this Agreement to be duly executed. MIDWEST ELECTRICAL TECHNO. OGLES,Inc. By: 4. Dated: Michael J.Hawk, CITY OF FARMINGTON By, Dated: /d A-47 Its:Mayor By: GL�C,� (/J" Dated: tR/r//A Its: Clerk 41 2/7-.2 fell j A� City of Farmington Ng 430 Third Strcct ! I l�armington,Minncsota 651.2R0.f5R00•Fax 651.280.6899 , www.d.tarmmgt+m.mn.ur TO: Mayor, Councilmembers, City Administrator FROM: Jennifer Dullum,Natural Resource Specialist SUBJECT: 2012 Tree City USA Recertification DATE: December 17, 2012 INTRODUCTION/DISCUSSION For the past 22 years,the City of Farmington has been recognized as a Tree City USA community through the Arbor Day Foundation. The four standards that must be met to qualify as a Tree City are;a tree board or tree department, a tree care ordinance, a community forestry program with an annual budget of at least $2 per capita, and an Arbor Day observance and proclamation. The City of Farmington meets the above qualifications and is requesting authorization to apply for 2012 Tree City USA recertification. BUDGET IMPACT There is no budget impact. ACTION REQUESTED Approve the City applying for 2012 Tree City USA recertification. Respectfully Submitted, Jennifer Dullum Natural Resource Specialist 42 Page 1 of 1 [ Print this page 1 Tree City USA Application for Certification MEE CI Y USA The Tree City USA award is in recognition of work completed by the community during the 2012 calendar year. As Mayor or Equivalent of the Community of Farmington I herewith make application for this community to be officially certified/recertified as a Tree City USA for 2012,having achieved the standards set forth by the Arbor Day Foundation as noted below. Standard 1:A Tree Board or Department Standard 2:A Community Tree Ordinance !i Our community ordinance is on record Standard 3:A Community Forestry Program with an Annual Budget of at Least$2 Per Capita Total Community Forestry Expenditures $72604.25 Community Population 22653 Per Capita Spending $321 Standard 4:An Arbor Day Observance and Proclamation 1 Official Arbor Day proc>. ion is on record ..'or or Equivalent Signature itle Date Application Certification To Be Completed By The State Forester: Farmington The above named community has made formal application to this office.I am pleased to advise you that we reviewed the application and have concluded that,based on the information contained herein,said community is eligible to be certified as a Tree City USA community,for the 2012 calendar year,having in my opinion met the four standards required for recognition. State Forester Signature Title Date 49 Arbor Dav Foundatiorn' ' 411111111111-411141/4 • [ Print this page https://portal.arborday.org/TreeCityPrintForm.aspx 12/11/2012 ?/1 4 J City of Farmington 430 Third Street Farmington Minnesota fi651.280.6400•Fax 651 2 O.6S99 wwwci.tarmingtln_mn.u.Y TO: Mayor, Councilmembers, and City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Acknowledge Resignation—Fire Department DATE: December 17, 2012 INTRODUCTION The City received notice that Mr. Tyler Leppert has resigned from his position as a paid on-call fire fighter. DISCUSSION Mr. Leppert has been a member of the Fire Department since February 17, 2009 and has been a valued member of the department. The City appreciates his commitment to the organization and wishes him well in his future endeavors. ACTION REQUESTED, Acknowledge the resignation of Mr. Tyler Leppert, effective November 29, 2012. Respectfully Submitted, Brenda Wendlandt, SPHR Human Resources Director cc: Personnel file 44 /® �j City of Farmington ,� 430 Third Street l�arnungton,Minnesota \ 6S1.2RQh400•Fax 65I. O.6899 w+o ci.tarmmgL4m mluiN TO: Mayor, Councilmembers, and City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Acknowledge Resignation—Fire Department DATE: December 17, 2012 INTRODUCTION The City received notice that Ms. Linda Thelen has resigned from her position as a paid on-call fire fighter. DISCUSSION Ms. Thelen began her employment with the City as a part-time liquor clerk on September 8, 2010 and became a member of the Fire Department on April 1, 2011. She has been a valued member of the department. The City appreciates her commitment to the organization and wishes her well in her future endeavors. ACTION REOUESTED Acknowledge the resignation of Ms. Linda Thelen, effective November 25, 2012. 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O Q m U co U 0 -a cc > a i.;�b A1 City of Farmington P iAA_ 430 Third Street Farmington,Minnesota 651.2R0.6R00.Fax 651.280,6899 ww .ci.taremngum.mn.ur TO: Mayor, Council Members, City Administrator FROM: Robin Hanson, Finance Director SUBJECT: Adopt Resolution—Approving a Project by St.Francis Health Services and a Joint Powers Agreement DATE: December 17, 2012 INTRODUCTION St. Francis Health System(SFHS) is working on a$10 million tax-exempt refmancing of several notes. The$10 million bond issue will be issued by the City of Morris(host issuer)and involves amounts which were primarily spent on SFHS campuses in Morris and Duluth. A small amount was spent in Farmington, MN(less than a million).As a result, in order for the bond issue to comply with the tax exempt bond provisions of the Internal Revenue Code, St.Francis has requested the City hold a public hearing and participate in a joint powers agreement. DISCUSSION At the November 19, 2012 Council meeting you approved the holding of a public hearing on December 17, 2012 for St. Francis Health Services' proposed tax exempt refinancing. Following the public hearing, Council is being asked to adopt the enclosed resolution, which incorporates the joint powers agreement(enclosed), final closing certificate(enclosed) and other documents or certificates that may be needed from the City for the sale of the SFHS obligations. BUDGET IMPACT No direct budget impact. ACTION REQUESTED Staff recommends Council adopt the resolution, approving a project by St.Francis Health Services of Morris, Inc. under Minnesota Statutes, Section 469.152 through 469.165 and approving a Joint Powers Agreement. Respectfully submitted, Robin Hanson, Finance Director 66 RESOLUTION NO. 60-12 RESOLUTION APPROVING A PROJECT BY ST. FRANCIS HEALTH SERVICES OF MORRIS,INC. UNDER MINNESOTA STATUTES, SECTION 469.152 THROUGH 469.165 AND APPROVING A JOINT POWERS AGREEMENT BE IT RESOLVED, by the City Council of the City of Farmington, Dakota County, Minnesota (the "City"), as follows: 1. General Recitals. The purpose of Minnesota Statutes, Sections 469.152 through 469.165 as amended, relating to municipal industrial development (the "Act"), as found and determined by the legislature, is to promote the welfare of the State of Minnesota (the "State") by the active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental action to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment. 2. Description of the Project. St. Francis Health Services of Morris, Inc. (the "Borrower") located at 801 Nevada Avenue, Suite 100, Morris, Minnesota, a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code") has proposed issuance of revenue obligations, in one or more series, in an amount not to exceed $10,000,000 (the"Obligations")by the City of Morris, Minnesota (the "Issuer"), to refinance taxable indebtedness incurred in 2010 for capital improvements, including fire safety and energy improvements, HVAC improvements and network upgrades at Farmington Health Center, a 65-bed skilled nursing facility located at 3410 — 213th Street West in the City (the "Project"), and pay costs associated with the issuance of the Obligations. 3. Recitals Relating to the Joint Exercise of Powers. a. The Borrower has requested that the City, the Duluth Economic Development Authority and the Issuer (together, the "Host Municipalities") cooperate through a joint powers agreement in authorizing the refinancing of the Project through the issuance of the Obligations by the Issuer. b. A draft copy of the Joint Powers Agreement among the Host Municipalities (the "Joint Powers Agreement") has been submitted to the City Council and is on file in the office of the City Administrator. 4. Recital of Representations Made by the Borrower. a. The City has been advised by representatives of the Borrower that: (i) conventional refinancing is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced; (ii) on the basis of information submitted to this City Council by the Borrower and their discussions with representatives of area financial institutions and potential buyers of tax-exempt bonds, the Obligations could be issued and sold upon favorable rates and terms to refinance the Project; (iii) the Borrower will experience a significant debt service cost savings as a result of the Project; and (iv) the Project would not be undertaken in its present form but for the availability of refinancing under the Act. b. The Borrower has agreed to pay any and all costs incurred by the City in connection with the issuance of the Obligations, whether or not such issuance is carried to completion. c. The Borrower has represented to the City that no public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project. 5. Public Hearing. a. A Notice of Public Hearing was published in the Farmington Independent, the City's official newspaper and a newspaper of general circulation, calling a public hearing on the proposed issuance of the Obligations and the proposal to undertake and refinance the Project. b. The City Council has, on December 17, 2012, held a public hearing on the proposal to undertake and refinance the Project, through the issuance of the Obligations by the Issuer, at which all those appearing who desired to speak were heard and written comments were accepted. 6. Approvals; Execution of Joint Powers Agreement; Preconditions. a. The proposal to undertake and refinance the Project and the issuance of the Obligations by the Issuer are approved. b. The Joint Powers Agreement is made a part of this Resolution as though fully set forth herein and is approved in substantially the form presented to the City Council. The Mayor and the City Administrator (the "Authorized Officers"), or the authorized designee of any of the Authorized Officers, are authorized and directed to execute, acknowledge, and/or deliver the Joint Powers Agreement on behalf of the City with such changes, insertions, and omissions therein as the City Attorney may hereafter deem appropriate, such execution to be conclusive evidence of approval of such document in accordance with the terms hereof. c. The Authorized Officers, or the authorized designee of any of the Authorized Officers, are authorized and directed to execute and deliver such other documents or certificates needed from the City for the sale of the Obligations. 7. Limited Obligation. The Obligations, when and if issued for the Project, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Host Municipalities. (There will, however, be a charge, lien or encumbrance on the Project, which is not an asset of the Host Municipalities.) The Obligations, when and if issued, shall recite in substance that the Obligations and the interest thereon, are payable 2 solely from revenues received from the Project and property pledged for payment thereof, and shall not constitute a debt of the Host Municipalities. Adopted: December 17, 2012. Mayor Attest: A ministrator 3 EXTRACT OF MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF FARMINGTON,MINNESOTA Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington, Minnesota, was duly called and held at the City Hall located at 430 Third Street, Farmington, Minnesota, on Monday, December 17, 2012, at 7:00 p.m. The following members were present: Larson, Bartholomay, Donnelly, Fogarty, May and the following members were absent:None MOTION: Member Fogarty moved to adopt Resolution No. R60-12, entitled "Resolution Approving a Project by St. Francis Health Services of Morris, Inc. Under Minnesota Statutes, Section 469.152 Through 469.165 and Approving a Joint Powers Agreement." SECOND: Member Bartholomay RESULT: On a roll call vote the motion was carried. Ayes: 5 Nays: 0 Not Voting: 0 Absent: 0 M:I ROCS 10973610000091 ROL I 1 018387.DOCX JOINT POWERS AGREEMENT St.Francis Health Services of Morris,Inc.Project This JOINT POWERS AGREEMENT dated as of December -, 2012 (this "Agreement") is being entered into among: i. the City of Morris, Stevens County, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota (the "Issuer"); ii. the City of Farmington, Dakota County, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota ("Farmington");and iii. the Duluth Economic Development Authority, St. Louis County, a public body corporate and politic and political subdivision of the State of Minnesota("DEDA"). (The Issuer, Farmington and DEDA are collectively referred to herein as the"Parties.") 1. Recitals. a. This Agreement is being entered into pursuant to Minnesota Statutes, Sections 471.59 and 471.656(collectively, the"Act"). b. St. Francis Health Services of Morris, Inc., a Minnesota nonprofit corporation and organization described in Section 501(c)(3)of the Internal Revenue Code of 1986, as amended (the `Borrower"), wishes to: (i) refmance taxable indebtedness incurred in 2010 for capital improvements, including fire safety and energy improvements, HVAC improvements and network upgrades at Farmington Health Center, a 65-bed skilled nursing facility located at 3410 - 213th Street West in Farmington, Minnesota; (ii) refinance the outstanding principal amount of the City of Morris, Minnesota $1,794,500 Health Care Facilities Revenue Note, Series 2002A (St. Francis Health Services of Morris Project), issued to refinance debt incurred for capital improvements to West Wind Village, an 85-bed skilled nursing facility located at 1001 Scott Avenue, Morris, Minnesota, owned by The Villa of St. Francis Nursing Home, a Minnesota nonprofit corporation ("West Wind Village"), and the acquisition of capital equipment used at West Wind Village; (iii) refmance taxable indebtedness incurred in 2007 and 2011 for capital improvements consisting of remodeling, fire safety and energy improvements, HVAC improvements, parking and sidewalk improvements, asbestos abatement, roof replacement, a nurse call system, walk-in cooler/freezer and phone system at West Wind Village;(iv) refmance the outstanding principal amount of the Duluth Economic Development Authority$501,840 Health Care Facilities Revenue Note, Series 1996C (St. Francis Health Services of Morris Project), issued for capital improvements to Viewcrest Health Center, a 100-bed skilled nursing facility located at 3111 Church Place in Duluth, Minnesota("Viewcrest") and Franciscan Health Center, a 48-bed skilled nursing facility located at 3910 Minnesota Avenue 71 in Duluth, Minnesota ("Franciscan"); (v) refmance a portion of the outstanding principal amount of the Housing and Redevelopment Authority of Duluth, Minnesota Health Care Facilities Revenue Note, Series 2003 (St. Francis Health Services of Morris Project), issued to refmance debt incurred for the acquisition of and construction of capital improvements to Viewcrest and Franciscan;and(vi) refmance taxable indebtedness incurred in 2003 for construction and enclosure of atrium space, in 2007 for construction of a 42 bed, two-story atrium addition and in 2011 for capital improvements to the older portions, at Viewcrest. The owner of the above-referenced facilities (together, the "Projects") will be the Borrower or an affiliated entity of the Borrower, and the Projects are expected to be owned, operated and managed by the Borrower or an affiliated entity. c. The Borrower proposes to fmance the Projects through an issuance of revenue obligations pursuant to Minnesota Statutes, Sections 469.152 through 469.165 (the"Municipal Industrial Development Act"). d. The Borrower has requested that the Parties cooperate,through this Agreement,to fmance the Projects through the issuance of Health Care Facilities Revenue Notes, Series 2012 (St. Francis Health Services of Morris, Inc. Project) in an amount not to exceed $10,000,000 in one or more series pursuant to the Municipal Industrial Development Act(the"Obligations"). e. The Borrower has requested that, and the Issuer has consented to, issue the Obligations for the Projects. 2. Findings. a. It is in the best interests of the Parties to cooperate with and facilitate the issuance of the Obligations by the Issuer as requested by the Borrower. b. Each of the Parties will receive substantial benefit from the Projects which will provide health care facilities accessible and available on an equal basis to residents of each of the Parties. 3. Statement of Purpose and Authority. This Agreement is entered into for the purpose of facilitating the issuance of the Obligations by the Issuer pursuant to the Municipal Industrial Development Act to fmance the Projects. 4. Authorization. Farmington and DEDA each consents to the issuance by the Issuer, and authorizes the Issuer to, issue the Obligations in conformance with the terms and conditions set forth herein. 5. Special Limited Obligations. The Obligations shall be special, limited obligations of the Issuer and shall not be payable from nor charged against any funds of any of the Parties, nor shall any of the Parties be subject to any liability thereon, nor shall any holder of the Obligations ever have the right to compel any exercise of the taxing power of any of the Parties to pay the Obligations or the interest thereon, nor to enforce payment against any property of any of the Parties, nor shall the Obligations constitute a charge, lien or 2 72 encumbrance, legal or equitable, upon any property of any of the Parties, nor shall the Obligations constitute a debt of any of the Parties within the meaning of any constitutional or statutory limitation. 6. Bank Qualification. The entire amount of the Obligations will be designated by the Issuer as "qualified tax-exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. 7. Term. This Agreement shall terminate upon the earlier of a. defeasance of the Obligations; b. final maturity and payment of the Obligations;or c. payment in full of the Obligations prior to their final maturity. 8. Distribution of Assets. Upon termination of this Agreement, any property acquired pursuant to this Agreement and any surplus moneys shall be distributed: first, according to the documents entered into by the Issuer in connection with its issuance of the Obligations, second according to the Municipal Industrial Development Act and third, to the Issuer. 9. Amendments. This Agreement may not be amended while any portion of the Obligations remains outstanding, unless such amendment has been requested by the Borrower, the Parties agree to such amendment in writing, and the Issuer has received the opinion of nationally-recognized bond counsel that such amendment will not adversely affect the tax-exempt status of the Obligations. 10. Counterparts. This Agreement may be executed in counterparts, each of which will be an original, but which together will constitute one and the same instrument. (remainder of page left intentionally blank) 3 73 IN WITNESS WHEREOF, the Parties have caused their names to be signed by their respective officers thereunto duly authorized, as of the day and year first above written. CITY OF MORRIS,MINNESOTA By Mayor By City Manager S-1 74 (Signature page to Joint Powers Agreement—St.Francis Health Services of Morris, Inc.Project) CITY OF FARMINGTON, MINNESOTA By Mayor By Administrator S-2 75 (Signature page to Joint Powers Agreement—St.Francis Health Services of Morris, Inc. Project) DULUTH ECONOMIC DEVELOPMENT AUTHORITY By President By Secretary The Duluth Economic Development Authority( "DEDA") has requested my approval of its authorization of the issuance of the Obligations described above by the City of Morris, Minnesota (the "Issuer"). In support of DEDA's request, I have been presented with the following: (i) a copy of the publisher's affidavit evidencing publication of the notice of public hearing held on November 28, 2012, regarding the Obligations and the Projects, and (ii) a copy of the resolution of DEDA adopted November 28, 2012, authorizing the issuance and delivery of the Obligations by the Issuer. Based upon the information and representations noted above, I hereby approve the authorization by DEDA of the issuance of the Obligations by the Issuer in the aggregate amount of not to exceed$10,000,000. CITY OF DULUTH, MINNESOTA By Mayor M IDOCS10973610000091AGMWX2155.DOCX S-3 76 CLOSING CERTIFICATE CITY OF FARMINGTON,MINNESOTA This Closing Certificate, dated as of December , 2012, is given by the undersigned, the Mayor and the Administrator, respectively, of the City of Farmington, Dakota County, Minnesota(the"City"). We certify as follows: I. OFFICERS. A. We are the duly elected or appointed, qualified and acting Mayor and Administrator, respectively, and as such Mayor and Administrator are familiar with the books and records of the City. B. As of the date of this certificate, the members of the governing body of the City and other officers of the City and the date of expiration of their terms of office are as follows: Date Term Date Term Name Office/Member Commenced Expires Todd Larson Mayor 1/1/2009 12/31/2012 Christy Jo Fogarty Member 1/1/2003 12/31/2014 Jason Bartholomay Member 1/1/2011 12/31/2014 Julie May Member 1/1/2009 12/31/2012 Terry Donnelly Member 1/1/2009 12/31/2012 David McKnight Administrator appointed C. Each of the above-named members and officers was duly appointed or elected and was or is the acting officer holding the respective office or position stated immediately following his or her name and prior to entering into his or her duties each of the above-named members and officers duly took and filed their oath of office in the manner and form required by law. II. ORGANIZATION. A. The City is a statutory city and is organized under Minnesota Statutes, Chapter 412. B. The official newspaper of the Issuer is The Farmington Independent, a newspaper of general circulation, published in Farmington,Minnesota, weekly on Thursday. C. The regular meetings of the governing body of the Issuer are held on the first and third Mondays of every month at 7:00 p.m.at the Farmington City Hall. 77 III. THE PROJECT. St. Francis Health Services of Morris, Inc., a Minnesota nonprofit corporation (the "Borrower") has represented to the City that a portion of the proceeds of the Health Care Facilities Revenue Notes, Series 2012 (St. Francis Health Services of Morris, Inc. Project) in the principal amount of not to exceed $10,000,000, issued by the City of Morris, Minnesota (the "Issuer"), will be used to (i) refmance the outstanding principal amount of the City of Farmington, Minnesota $501,840 Health Care Facilities Revenue Note, Series 1996C (St. Francis Health Services of Morris Project), issued for capital improvements to Viewcrest Health Center, a 100-bed skilled nursing facility located at 3111 Church Place in Duluth, Minnesota ("Viewcrest") and Franciscan Health Center, a 48-bed skilled nursing facility located at 3910 Minnesota Avenue in Duluth, Minnesota ("Franciscan"); (ii) refinance a portion of the outstanding principal amount of the Housing and Redevelopment Authority of Duluth, Minnesota Health Care Facilities Revenue Note, Series 2003 (St. Francis Health Services of Morris Project), issued to refmance debt incurred for the acquisition of and construction of capital improvements to Viewcrest and Franciscan; and (iii) refinance taxable indebtedness incurred in 2003 for construction and enclosure of atrium space, in 2007 for construction of a 42 bed, two- story atrium addition and in 2011 for capital improvements to the older portions, at Viewcrest(the"Project"),owned by the Borrower. IV. JOINT POWERS AGREEMENT. A. The Joint Powers Agreement, dated as of the date hereof among the Issuer, the City and the Duluth Economic Development Authority (the "Joint Powers Agreement"), has been duly authorized and executed by and on behalf of the City with the signatures of the undersigned Mayor and Administrator and is in substantially the form approved by the governing body of the City. B. To our knowledge, the execution and delivery of the Joint Powers Agreement and the compliance by the City with the provisions thereof do not constitute on the part of the City a material breach of or a material default under any existing court or administrative decree or order or any agreement or other instrument to which the City is subject or by which it or its properties is or may be bound. C. No litigation is pending, to which the City is a party, or to the knowledge of the undersigned threatened which in any way affects any authority for or the validity of the Joint Powers Agreement. D. Neither the corporate existence of the City nor, to our knowledge, the titles of the present officials of the City to their respective offices are being contested and no authority or proceedings approving the Project or authorizing the execution and delivery of the Joint Powers Agreement, including the Resolution, have been modified,repealed, revoked or rescinded. 2 78 V. EXHIBITS. In connection with the City's approval of the Project, attached hereto and identified as Exhibits are the following: A. Exhibit A— Resolution Calling for Public Hearing— A true and correct copy of an Extract of Minutes of, and a resolution adopted by the City at, a meeting duly called and held on November 19, 2012, said resolution entitled Resolution Calling for a Public Hearing on a Project by St. Francis Health Services of Morris, Inc., which resolution remains in full force and effect on the date hereof in the form in which adopted. B. Exhibit B—Affidavit of Publication—A true and correct copy of an Affidavit of Publication of the Notice of Public Hearing held on December 17, 2012. C. Exhibit C —Resolution Giving Approval—A true and correct copy of an Extract of Minutes of, and a resolution adopted by the City at, a meeting duly called and held on December 17, 2012, said resolution entitled Resolution Approving a Project by St. Francis Health Services of Morris, Inc. Under Minnesota Statutes, Section 469.152 through 469.165 and Approving a Joint Powers Agreement, which resolution remains in full force and effect on the date hereof in the form in which adopted. (remainder of page left intentionally blank) 3 79 WITNESS our hands as of the date first above written. CITY OF FARMINGTON,MINNESOTA Mayor Administrator M•IDOCS109736100000910ERV 0I9363.DOCX 4 80 /Oa_�:ti ARA�j�► City of Farmington 430 Third Street az ;gyp ,, 1 Farmington,Minnesota 651.280.6800.Fax 651.280.6899 TO: Mayor, Council Members, City Administrator FROM: Robin Hanson, Finance Director SUBJECT: Adopt Resolution—Approve Sale of$5,580,000* General Obligation Improvement Refunding Bonds, Series 2013A DATE: December 17, 2012 INTRODUCTION At the November 19, 2012, meeting the City Council authorized the refunding of the 2005B and 2006A bonds and the sale of the General Obligation Improvement Refunding Bonds, Series 2013A. DISCUSSION AND BUDGET IMPACT Competitive bids will be received on Monday, December 17, 2012 at the office of Ehler's& Associates, Inc. Preliminary estimates anticipated the new interest rates would range from.55% - 1.55%with an estimated gross savings of approximately$660,000. The number of bidders, interest rates received, and updated savings amounts,will be presented at the December 17, 2012,Council meeting. Once approved by Council,the draft resolution (attached) and related escrow agreement(attached)will be completed with the correct numbers. ACTION REQUESTED Staff recommends Council adopt the updated resolution awarding the sale of$5,580,000* General Obligation Improvement Refunding Bonds, Series 2013A which will refund the 2005B and 2006A bonds to the low bidder, as presented by Ehler's&Associates, Inc. *Preliminary, subject to change. Respectfully submitted, Robin Hanson, Finance Director 81 Debt Issuance Services December 17, 2012 Sale Report City of Farmington, Minnesota $5,365,000 General Obligation Improvement Refunding Bonds, Series 2013A , 0141111----&--'''''‘ /41/4.110trihr ,.. ...,,,,e) www.ehlers-inc.ccm 8 E H L E RS Minnesota phone 651-697-8500 3060 Centre Pointe lake LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville,MN 55113-1122 _ Debt Issuance Services City of Farmington, Minnesota Results of Bond Sale — December 17, 2012 $5,365,000 General Obligation Improvement Refunding Bonds, Series 2013A Purpose: Advance crossover refunding of the 2015 through 2021 maturities of the City's$2,635,000 General Obligation Improvement Bonds,Series 2005B Current refunding,on March 1,2013,of the 2014 through 2022 maturities of the City's$5,500,000 General Obligation Improvement Bonds,Series 2006A Rating: Standard&Poor's Credit Markets"AA-" Number of Bids: 3 Low Bidder: Baird,Milwaukee,WI True Interest Cost: 1.3353% Interest Savings from Low Bid High Bid Lowest to Highest Bid: 1.3291% 1.4966% Summary of Results: Projected Results of Sale Difference Principal Amount*: $5,580,000 $5,365,000 -$215,000 Reoffering Premium: $0 $228,037 $228,037 Discount Allowance: $41,850 $41,276 -$574 True Interest Cost: 1.2940% 1.3353% 0.0413% Cost of Issuance: $47,500 $45,485 -$2,015 Coupon Rates: 0.55% - 1.55% 2.00% BBI: 3.41% 3.44% 0.03% Future Value Savings: $662,513 $654,498 -$8,015 PV Savings Percentage: 10.412% 10.256% -0.156% Closing Date: January 15,2013 Council Action: Resolution Authorizing The Issuance,Awarding The Sale,Prescribing The Form And Details And Providing For The Payment Of$5,365,000 General Obligation Improvement Refunding Bonds,Series 2013A Attachments: • Bid Tabulation • Updated Debt Service Schedules • BBI Graph • Bond Resolution(Distributed in Council Packets) * The size of the bond issue changed from the projected amount due to a reduction in the costs of issuance and a premium bid received from the underwriter. www.ehlers-inc.com 0 E H L E RS Minnesota phone 651-697-8500 3060 Centre Pointe give LEADERS aw PUBLIC PIABAACE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville,MN 55113-1122 BID TABULATION $5,580,000* General Obligation Improvement Refunding Bonds, Series 2013A CITY OF FARMINGTON, MINNESOTA SALE: December 17, 2012 AWARD: BAIRD RATING: Standard & Poor's Credit Markets "AA-" BBI: 3.44% NET TRUE NAME OF BIDDER MATURITY RATE REOFFERING PRICE INTEREST INTEREST (February 1) YIELD COST RATE BAIRD 2015 2.000% 0.550% $5,774,160.30 $411,299.70 1.3291% Milwaukee,Wisconsin 2016 2.000% 0.650% C.L. King&Associates 2017 2.000% 0.800% Coastal Securities, Inc. 2018 2.000% 0.950% Kildare Capital 2019 2.000% 1.100% Edward D.Jones&Co. 2020 2.000% 1.250% Cronin&Co., Inc. 2021 2.000% 1.450% SAMCO Capital Markets 2022 2.000% 1.600% Loop Capital Markets Crews&Associates, Inc. Davenport&Co. L.L.C. Ross, Sinclaire&Associates, LLC Wedbush Securities Inc. CastleOak Securities, L.P. Vining-Sparks IBG, Limited Partnership Dougherty&Company, LLC Northland Securities, Inc. Country Club Bank Isaak Bond Investments, Inc UMB BANK, N.A. 2015 1.000% $5,550,984.00 $418,318.17 1.3831% Kansas City, Missouri 2016 1.000% 2017 1.000% 2018 1.000% 2019 1.200% 2020 1.350% 2021 1.500% 2022 1.650% BOSC, INC.,A SUBSIDIARY OF BOK FINANCIAL 2015 2.000% $5,724,847.00 $460,613.00 1.4966% CORPORATION 2016 2.000% Milwaukee,Wisconsin 2017 2.000% 2018 2.000% 2019 2.000% 2020 2.000% 2021 2.000% 2022 2.000% *Subsequent to bid opening the issue size was decreased to$5,365,000. Adjusted Price-$5,551,761.31 Adjusted Net Interest Cost-$401,407.58 Adjusted TIC-1.3353% wvvvv.ehlers-enc.com la E H L E RS Minnesota phone 651-697-8500 3060 Centre Pointelnive LEADERS aN PUBLIC Foy Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville,MN 55113-1122 Farmington, Minnesota $5,365,000 General Obligation Improvement Refunding Bonds, Series 2013A Current Refund Series 2006A&Crossover Refund Series 2005B Total Issue Sources And Uses Dated 01/15/2013 I Delivered 01/15/2013 Crossover Current Refund Refund Issue Series 2005B Series 2006A Summary Sources Of Funds Par Amount of Bonds $1,425,000.00 $3,940,000.00 $5,365,000.00 - — - Reoffering Premium 63,059.60 164,977.60 228,037.20 Total Sources $1,488,059.60 $4,104,977.60 $5,593,037.20 Uses Of Funds Denittp_Current Refunding Fund 1,462,942.03 4,038,627.73 5,501,569.76 Total Underwriter's Discount (0.769%) 10,963.31 30,312.58 41,275.89 Financial Advisor 17,184.72 23,400.00 ... .. _ Rating Agency(S&P) 2,656.10 7,343.90 10,000.00 Bond Counsel(porsey&Whitney) 1,99208 5,507.92 7,500.00 Deposit to Debt Service Fund(Rounding) 2,072.97 2,633.58 4,706.55 Verification Agent(Barthe&Waluman) 664.03 1,835.97 2,500.00 Escrow Agent(U.S.Bank) 265.61 734.39 1,000.00 Paying Agent(U.S.Bank) 199.21 550.79 750.00 Dakota County Auditor 88.98 246.02 335.00 Total Uses . $1,488,059.60 $4,104,977.60 $5,593,037.20 Series 2013A GO imp Ref B I issue&mummy I 12/17/2012 I 10:45 AM 0 EHLERS 4 LEADERS IN PUBLIC FINANCE Farmington, Minnesota $5,365,000 General Obligation Improvement Refunding Bonds, Series 2013A Current Refund Series 2006A& Crossover Refund Series 2005B Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 01/15/2013 - - - - - 08/01/2013 - - 58,418.89 58,418.89 - 02/01/2014 - - 53,650.00 53,650.00 112,068.89 08/01/2014 - - 53,650.00 53,650.00 - 02/01/2015 665,000.00 2.000% 53,650.00 718,650.00 772,300.00 08/01/2015 - - 47,000.00 47,000.00 - 02/01/2016 670,000.00 2.000% 47,000.00 717,000.00 764,000.00 08/01/2016 - - 40,300.00 40,300.00 - 02/01/2017 685,000.00 2.000% 40,300.00 725,300.00 765,600.00 08/01/2017 - - 33,450.00 33,450.00 - 02/01/2018 695,000.00 2.000% 33,450.00 728,450.00 761,900.00 08/01/2018 - - 26,500.00 26,500.00 - 02/01/2019 695,000.00 2.000% 26,500.00 721,500.00 748,000.00 08/01/2019 - - 19,550.00 19,550.00 - 02/01/2020 715,000.00 2.000% 19,550.00 734,550.00 754,100.00 08/01/2020 - - 12,400.00 12,400.00 - 02/01/2021 720,000.00 2.000% 12,400.00 732,400.00 744,800.00 08/01/2021 - - 5,200.00 5,200.00 - 02/01/2022 520,000.00 2.000% 5,200.00 525,200.00 530,400.00 Total $5,365,000.00 - $588,168.89 $5,953,168.89 - Yield Statistics Bond Year Dollars $29,408.44 Average Life 5.482 Years Average Coupon --- 2.0000000% Net Interest Cost(MC) 1.3649399% True Interest Cost TIC) — 1.3353673% Bond Yield for Arbitrage Purposes 1.1451757% All Inclusive Cost(AIC) 1.4945228% IRS Form 8038 Net Interest Cost 1.1747502% Weighted Average Maturity — 5.481 Years Series 2013A GO Imp Ref B I Issue Summary I 12/17/2012 I 10:45 AM EHLERS 5 LEADERS IN PUBLIC FINANCE Farmington, Minnesota $5,365,000 General Obligation Improvement Refunding Bonds, Series 2013A Current Refund Series 2006A&Crossover Refund Series 2005B Debt Service Comparison Const Loan Date Total P+I Pmt Existing D/S Net New D/S Old Net D/S Savings 02/01/2013 - - - (4,706.55) - 4,706.55 02/01/2014 112,068.89 (1,464,766.67) 1,493,770.89 141,073.11 597,303.59 456,230.48 02/01/2015 772,300.00 - - 772,300.00 775,177.70 2,877.70 02/01/2016 764,000.00 - - 764,000.00 773,202.70 9,202.70 02/01/2017 765,600.00 - _ 765,600.00 780,052.70 14,452.70 02/01/2018 761,900.00 - - 761,900.00 790,545.20 28,645.20 02/01/2019 748,000.00 - - 748,000.00 784,227.70 36,227.70 02/01/2020 754,100.00 - - 754,100.00 791,762.70 37,662.70 02/01/2021 744,800.00 - - 744,800.00 792,642.50 47,842.50 02/01/2022 530,400.00 - - 530,400.00 547,050.00 16,650.00 Total $5,953,168.89 (1,464,766.67) $1,493,770.89 $5,977,466.56 $6,631,964.79 $654,498.23 PV Analysis Summary(Net to Net) Gross PV Debt Service Savings _ - __- __ _ __ __ . _- -. 632,094.97 Net PV Cashflow Savings @ 1.145%(Bond Yield) _ 632,094.97 Contingency or Rounding Amount___- ______ - - __-_ ---_ __ ____ _ _ __ _— _• _ __ 4,706.55_ Net Present Value Benefit $636,801.52 Net PV Benefit/$6,209,348.19 PV Refunded Debt Service 10.256% ---- ----- — --- -- Net PV Benefit/ $5,460,000 Refunded Principal..._ _ _ _ 11.663% Net PV Benefit/ $5,365,000 Refunding Principal.. 11.870% Refunding Bond Information Refunding Dated Date 1/15/2013 RefundingDeliveryDate —___-- _ 1/15/2013 Series 2013A 0O Imp Ran:Meese M Issue Summary 1 12/172012 I 10:45 AM el EHLERS 6 LEADERS IN PUBLIC FINANCE Farmington, Minnesota $1,425,000 General Obligation Improvement Refunding Bonds, Series 2013A Crossover Refunding of G.O. Improvement Bonds, Series 2005B Debt Service Comparison Const Loan Date Total P+I Pmt Existing D/S Net New D/S Old Net D/S Savings 02/01/2013 - - - (2,072.97) - 2,072.97 02/01/2014 29,766.67 (1,464,766.67) 1,493,770.89 58,770.89 58,770.89 - 02/01/2015 223,500.00 - - 223,500.00 236,270.00 12,770.00 02/01/2016 219,600.00 - - 219,600.00 229,700.00 10,100.00 02/01/2017 225,700.00 - - 225,700.00 237,950.00 12,250.00 02/01/2018 221,600.00 - - 221,600.00 245,442.50 23,842.50 02/01/2019 217,500.00 - - 217,500.00 237,147.50 19,647.50 02/01/2020 218,400.00 - - 218,400.00 243,747.50 25,347.50 02/01/2021 214,200.00 - - 214,200.00 244,635.00 30,435.00 Total $1,570,266.67 (1,464,766.67) $1,493,770.89 $1,597,197.92 $1,733,663.39 $136,465.47 PV Analysis Summary(Net to Net) Gross PV Debt Service Savings 126,264.05 Net PV Cashflow Savings @ 1.145%(Bond Yield) 126,264.05 Contingency or Rounding Amount 2,072.97 Net Present Value Benefit $128,337.02 Net PV Benefit/$1,581,642.46 PV Refunded Debt Service 8.114% Net PV Benefit/ $1,435,000 Refunded Principal... 8.943% Net PV Benefit/ $1,425,000 Refunding Principal.. 9.006% Refunding Bond Information Refunding Dated Date 1/15/2013 Refunding Delivery Date 1/15/2013 Series 2013A GO Imp Ref B I Crossover Refund Series 2 1 12/17/2012 I 10:22 AM x EHLERS LEADERS IN PUBLIC FINANCE Farmington, Minnesota $3,940,000 General Obligation Improvement Refunding Bonds, Series 2013A Current Refunding of G.O. Improvement Bonds, Series 2006A Debt Service Comparison Date Total P+I Net New D/S Old Net D/S Savings 02/01/2013 - (2,633.58) - 2,633.58 02/01/2014 82,302.22 82,302.22 538,532.70 456,230.48 02/01/2015 548,800.00 548,800.00 538,907.70 (9,89230) 02/01/2016 544,400.00 544,400.00 543,502.70 (897.30) 02/01/2017 539,900.00 539,900.00 542,102.70 2,202.70 02/01/2018 540,300.00 540,300.00 545,102.70 4,802.70 02/01/2019 530,500.00 530,500.00 547,080.20 16,580.20 02/01/2020 535,700.00 535,700.00 548,015.20 12,315.20 02/01/2021 530,600.00 530,600.00 548,007.50 17,407.50 02/01/2022 530,400.00 530,400.00 547,050.00 16,650.00 Total $4,382,902.22 $4,380,268.64 $4,898,301.40 $518,032.76 PV Analysis Summary(Net to Net) Gross PV Debt Service Savings 505,830.92 Net PV Cashflow Savings @ 1.145%(Bond Yield) 505,830.92 Contingency or Rounding Amount 2,633.58 Net Present Value Benefit $508.464.50 Net PV Benefit/$4,627,705.73 PV Refunded Debt Service 10.987% Net PV Benefit/ $4,025,000 Refunded Principal... 12.633% Net PV Benefit/ $3,940,000 Refunding Principal.. 12.905% Refunding Bond Information Refunding Dated Date 1/15/2013 Refunding Delivery Date 1/15/2013 Series 2013A GO Imp Ref B I Current Refund Series 200 I 12/17/2012 I 10:22 AM EHLERS LEADERS IN PUBLIC FINANCE 8 1 _° C`1 0 a 04 o r LL . N u u 2 W ilz N II ,- J 12.Z II r d 0. LU5 CO Cal 0 P 7 N ,,AA Y/ W A as V 6 0 0 m N u• Z `; / m y Q N • 0 .0 hi CQ. d Z d — c CO LS O m m d gm O N M A ,a J Q m p y Q G C ODD ✓ N co c0 .0 o Z o.: d •- m .5.,TD c c v- CO m m 2 E z as > � S ? o ec * c ma °a y a m CD d I me e CC CO W m> .°c > IX m ^m H A di mm C m Q' m Q a, r c K 0t m c W o c m W 1° e C e N m m CV 0 VD c > — W m t 1r 6- m m � r jEE lEE a o c1 ill N_ II- X ` c O r G O 1- C 14 7 at at O O O O O O m La O 1A O W. O p 117 1A 4 4 M ei g y 9 CERTIFICATION OF MINUTES RELATING TO $5,580,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2013A City: City of Farmington,Minnesota Governing Body: City Council Kind, date,time and place of meeting: A regular meeting held on December 17, 2012,at 7:00 o'clock p.m., at City Hall, 430 Third Street in Farmington, Minnesota. Members present: Members absent: Documents Attached: Minutes of said meeting(including): RESOLUTION NO. RESOLUTION AUTHORIZING THE ISSUANCE,AWARDING THE SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF$5,580,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2013A I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed;that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above,pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer on ,2012. City Administrator 82 It was reported that sealed proposals for the purchase of$5,580,000 General Obligation Improvement Refunding Bonds, Series 2013A were received prior to 10:00 o'clock a.m. on December 17, 2012, pursuant to the Official Statement distributed to potential purchasers of the Bonds by Ehlers&Associates, Inc., independent fmancial advisor to the City. The proposals have been publicly opened, read and tabulated and were found to be as follows: (See Attached) 83 CERTIFICATION OF MINUTES RELATING TO $5,3 6 5,0 00 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2013A City: City of Farmington,Minnesota Governing Body: City Council Kind, date,time and place of meeting: A regular meeting held on December 17, 2012,at 7:00 o'clock p.m., at City Hall,430 Third Street in Farmington,Minnesota. Members present: Larson, Bartholomay, Donnelly, Fogarty, May Members absent: None Documents Attached: Minutes of said meeting (including): RESOLUTION NO. R61-12 RESOLUTION AUTHORIZING THE ISSUANCE,AWARDING THE SALE,PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF$ 5, 1 ti s,o o n GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2013A I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above,pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer oiPecember 17, 2012. vtileY)) City Administrator It was reported that sealed proposals for the purchase of$5,580,000 General Obligation Improvement Refunding Bonds, Series 2013A were received prior to 10:00 o'clock a.m. on December 17,2012,pursuant to the Official Statement distributed to potential purchasers of the Bonds by Ehlers&Associates, Inc., independent financial advisor to the City. The proposals have been publicly opened,read and tabulated and were found to be as follows: (See Attached) Councilmember Fogarty introduced the following resolution and moved its adoption,which motion was seconded by Councilmember Bartholomay RESOLUTION NO. R 61-1 2 RESOLUTION AUTHORIZING THE ISSUANCE, AWARDING THE SALE,PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF$5,580,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2013A BE IT RESOLVED by the City Council of the City of Farmington,Minnesota (the City), as follows: SECTION 1. AUTHORIZATION AND SALE. 1.1. Authorization. The City Council hereby determines that it is in the best interest of the City to issue its General Obligation Improvement Refunding Bonds, Series 2013A(the Bonds),in the principal amount of$5,580,000,pursuant to Minnesota Statutes, Chapters 429 and 475. The proceeds of the Bonds will be used,together with any additional funds of the City which might be required: (a) to refund in advance of maturity and prepay on February 1,2014 (the Crossover Date),the 2015 through 2021 maturities of the City's General Obligation Improvement Bonds, Series 2005B, aggregating$1,435,000 in principal amount(the Refunded Series 2005 Bonds)in a"crossover refunding" as defined in Minnesota Statutes,Section 475.67, Subdivision 13; and (b) to refund in a current refunding on March 1, 2013 (the Redemption Date), the 2014 through 2022 maturities of the City's General Obligation Improvement Bonds, Series 2006A, aggregating$4,025,000 in principal amount(the Refunded Series 2006 Bonds). The Refunded Series 2005 Bonds and the Refunded Series 2006 Bonds are referred to collectively herein as the Refunded Bonds. The purpose of the refunding is to reduce debt service costs to the City. 1.2. Sale. Pursuant to the Terms of Proposal and the Official Statement prepared on behalf of the City by Ehlers&Associates,Inc., sealed proposals for the purchase of the Bonds were received at or before the time specified for receipt of proposals. The proposals have been opened,publicly read and considered and the purchase price,interest rates and net interest cost under the terms of each proposal have been determined. The most favorable proposal received is that of , in , and associates (the Purchaser),to purchase the Bonds at a price of$ plus accrued interest,if any, on all Bonds to the day of delivery and payment,on the further terms and conditions hereinafter set forth. 1.3. Award. The sale of the Bonds is hereby awarded to the Purchaser, and the Mayor and City Administrator are hereby authorized and directed to execute a contract on behalf of the City for the sale of the Bonds in accordance with the terms of the proposal. The good faith deposit of the Purchaser shall be retained by the City until the Bonds have been delivered,and shall be deducted from the purchase price paid at settlement. 1.4. Savings. It is hereby determined that as of the Crossover Date, (i)the present value of the debt service on the portion of the Bonds, equal to$ allocated to the refunding of the Refunded Series 2005 Bonds (the Series 2005 Refunding Bonds),computed to their stated maturity dates, after deducting any premium,using the yield of the Bonds as the discount rate,plus (ii) any expenses of the refunding payable from a source other than the proceeds of the Series 2005 Refunding Bonds or investment earnings thereon,is lower by % (not less than 3%)than the present value of the debt service on the Refunded Series 2005 Bonds,exclusive of any premium,computed to their stated maturity dates,using the yield of the Bonds as the discount rate. SECTION 2. BOND TERMS; REGISTRATION; EXECUTION AND DELIVERY. 2.1. Issuance of Bonds. All acts,conditions and things which are required by the Constitution and laws of the State of Minnesota to be done,to exist,to happen and to be performed precedent to and in the valid issuance of the Bonds having been done,now existing,having happened and having been performed, it is now necessary for the City Council to establish the form and terms of the Bonds,to provide security therefor and to issue the Bonds forthwith. 2.2. Maturities; Interest Rates; Denominations and Payment. The Bonds shall be dated, as originally issued, as of January 15, 2013, shall be in the denomination of$5,000 each, or any integral multiple thereof,of single maturities, shall mature on February 1 in the years and amounts stated below, and shall bear interest from date of issue until paid or duly called for redemption at the annual rates set forth opposite such years and amounts, as follows: Year Amount Rate Year Amount Rate 2015 $720,000 % 2019 $725,000 % 2016 720,000 2020 725,000 2017 720,000 2021 730,000 2018 720,000 2022 520,000 [REVISE MATURITY SCHEDULE FOR ANY TERM BONDS] The portion of the Bond issue allocable to each purpose matures as set forth on Schedule I hereto. The Bonds shall be issuable only in fully registered form. The interest thereon and,upon surrender of each Bond,the principal amount thereof shall be payable by check 2 or draft issued by the Registrar described herein,provided that, so long as the Bonds are registered in the name of a securities depository, or a nominee thereof,in accordance with Section 2.8 hereof, principal and interest shall be payable in accordance with the operational arrangements of the securities depository. 2.3. Dates and Interest Payment Dates. Upon initial delivery of the Bonds pursuant to Section 2.7 and upon any subsequent transfer or exchange pursuant to Section 2.6,the date of authentication shall be noted on each Bond so delivered,exchanged or transferred. Interest on the Bonds shall be payable on February 1 and August 1, commencing August 1, 2013, each such date being referred to herein as an Interest Payment Date,to the persons in whose names the Bonds are registered on the Bond Register, as hereinafter defined, at the Registrar's close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date,whether or not such day is a business day. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. 2.4. Redemption. Bonds maturing in 2021 and later years shall be subject to redemption and prepayment at the option of the City,in whole or in part, in such order of maturity dates as the City may select and, within a maturity,by lot as selected by the Registrar(or,if applicable,by the bond depository in accordance with its customary procedures)in multiples of$5,000, on February 1, 2020, and on any date thereafter, at a price equal to the principal amount thereof and accrued interest to the date of redemption. The City Administrator shall cause notice of the call for redemption thereof to be published if and as required by law, and at least thirty days prior to the designated redemption date, shall cause notice of call for redemption to be mailed,by first class mail,to the registered holders of any Bonds to be redeemed at their addresses as they appear on the bond register described in Section 2.6 hereof,but no defect in or failure to give such mailed notice of redemption shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. Official notice of redemption having been given as aforesaid,the Bonds or portions of Bonds so to be redeemed shall,on the redemption date,become due and payable at the redemption price therein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the owner without charge,representing the remaining principal amount outstanding. [COMPLETE THE FOLLOWING PROVISIONS IF THERE ARE TERM BONDS—ADD ADDITIONAL PROVISIONS IF THERE ARE MORE THAN TWO TERM BONDS] [Bonds maturing on February 1 in the years (the Term Bonds) shall be subject to mandatory redemption prior to maturity pursuant to the sinking fund requirements of this Section 2.4 at a redemption price equal to the stated principal amount thereof plus interest accrued thereon to the redemption date,without premium. The Registrar shall select for redemption,by lot or other manner deemed fair, on February 1 in each of the following years the following stated principal amounts of such Bonds: 3 Term Bonds Maturing February 1, 20 Year Principal Amount The remaining$ stated principal amount of such Bonds shall be paid at maturity on February 1, 20_. Term Bonds Maturing February 1,20 Year Principal Amount The remaining$ stated principal amount of such Bonds shall be paid at maturity on February 1, 20_. Notice of redemption shall be given as provided in the preceding paragraph.] 2.5. Appointment of Initial Registrar. The City hereby appoints U.S. Bank National Association, St. Paul,Minnesota, as the initial bond registrar,transfer agent and paying agent(the Registrar). The Mayor and City Administrator are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation,if the resulting corporation is a bank or trust company organized under the laws of the United States or one of the states of the United States and authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar,effective upon not less than thirty days' written notice and upon the appointment and acceptance of a successor Registrar,in which event the predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar and shall deliver the Bond Register to the successor Registrar. 2.6. Registration. The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its principal corporate trust office a bond register(the Bond Register)in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered,transferred or exchanged. The term Holder or Bondholder as used herein shall mean the person (whether a natural person,corporation, association,partnership,trust,governmental unit, or other legal entity)in whose name a Bond is registered in the Bond Register. (b) Transfer of Bonds. Upon surrender for transfer of any Bond duly endorsed by the Holder thereof or accompanied by a written instrument of transfer,in form satisfactory to the Registrar, duly executed by the Holder thereof 4 or by an attorney duly authorized by the Holder in writing,the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date. (c) Exchange of Bonds. At the option of the Holder of any Bond in a denomination greater than$5,000, such Bond may be exchanged for other Bonds of authorized denominations,of the same maturity and a like aggregate principal amount,upon surrender of the Bond to be exchanged at the office of the Registrar. Whenever any Bond is so surrendered for exchange the City shall execute and the Registrar shall authenticate and deliver the Bonds which the Bondholder making the exchange is entitled to receive. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be promptly canceled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer,the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal,in good faith,to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of the Bond, whether the Bond shall be overdue or not,for the purpose of receiving payment of or on account of, the principal of and interest on the Bond and for all other purposes, and all payments made to any registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes,Fees and Charges. For every transfer or exchange of Bonds (except for an exchange upon a partial redemption of a Bond),the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax,fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated,Lost,Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost,the Registrar shall deliver a new Bond of like amount,number,maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost,upon the payment of the reasonable expenses and charges of the Registrar in connection therewith, and,in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of 5 evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it,in which both the City and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be canceled by it and evidence of such cancellation shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment. (i) Authenticating Agent. The Registrar is hereby designated authenticating agent for the Bonds,within the meaning of Minnesota Statutes, Section 475.55, Subdivision 1, as amended. (j) Valid Obligations. All Bonds issued upon any transfer or exchange of Bonds shall be the valid obligations of the City, evidencing the same debt, and entitled to the same benefits under this Resolution as the Bonds surrendered upon such transfer or exchange. 2.7. Execution,Authentication and Delivery. The Bonds shall be prepared under the direction of the City Administrator and shall be executed on behalf of the City by the signatures of the Mayor and the City Administrator,provided that the signatures may be printed, engraved or lithographed facsimiles of the originals. In case any officer whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes,the same as if such officer had remained in office until delivery. Notwithstanding such execution,no Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been prepared,executed and authenticated,the City Administrator shall deliver them to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore executed, and the Purchaser shall not be obligated to see to the application of the purchase price. 2.8. Securities Depository. (a) For purposes of this section the following terms shall have the following meanings: "Beneficial Owner" shall mean, whenever used with respect to a Bond,the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or such person's subrogee. "Cede &Co." shall mean Cede&Co.,the nominee of DTC, and any successor nominee of DTC with respect to the Bonds. 6 "DTC" shall mean The Depository Trust Company of New York,New York. "Participant" shall mean any broker-dealer,bank or other fmancial institution for which DTC holds Bonds as securities depository. "Representation Letter" shall mean the Representation Letter pursuant to which the sender agrees to comply with DTC's Operational Arrangements. (b) The Bonds shall be initially issued as separately authenticated fully registered bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon initial issuance,the ownership of such Bonds shall be registered in the bond register in the name of Cede &Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed,if any, giving any notice permitted or required to be given to registered owners of Bonds under this resolution,registering the transfer of Bonds, and for all other purposes whatsoever, and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the bond register as being a registered owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any Participant,with respect to the payment by DTC or any Participant of any amount with respect to the principal of or interest on the Bonds, with respect to any notice which is permitted or required to be given to owners of Bonds under this resolution,with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as any Bond is registered in the name of Cede &Co., as nominee of DTC,the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond, only to Cede &Co. in accordance with DTC's Operational Arrangements, 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 interest on the Bonds to the extent of the sum or sums so paid. No person other than DTC shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede&Co.,the Bonds will be transferable to such new nominee in accordance with paragraph(e)hereof. (c) In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bonds in the form of bond certificates,the City may notify DTC and the Registrar,whereupon DTC shall notify the Participants of the availability through DTC of Bonds in the form of certificates. In such event,the Bonds will be transferable in accordance with paragraph(e) hereof. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving 7 notice to the City and the Registrar and discharging its responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with paragraph (e)hereof. (d) The execution and delivery of the Representation Letter to DTC, if not previously filed with DTC,by the Mayor or City Administrator is hereby authorized and directed. (e) In the event that any transfer or exchange of Bonds is permitted under paragraph(b) or(c)hereof,such transfer or exchange shall be accomplished upon receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this resolution. In the event Bonds in the form of certificates are issued to owners other than Cede&Co., its successor as nominee for DTC as owner of all the Bonds, or another securities depository as owner of all the Bonds,the provisions of this resolution shall also apply to all matters relating thereto,including, without limitation,the printing of such Bonds in the form of bond certificates and the method of payment of principal of and interest on such Bonds in the form of bond certificates. 2.9. Form of Bonds. The Bonds shall be prepared in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF FARMINGTON GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND, SERIES 2013A Interest Rate Maturity Date Date of Original Issue CUSIP NO. % February 1,20_ January 15, 2013 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: THOUSAND DOLLARS THE CITY OF FARMINGTON,MINNESOTA(the "City"), acknowledges itself to be indebted and for value received hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above on the maturity date specified above and promises to pay interest thereon from the date of original issue specified above or from the most recent Interest Payment Date(as hereinafter defined)to which interest has been paid or duly provided for, at the annual interest rate specified above,payable on February 1 and August 1 of each year, commencing August 1,2013 (each such date, an"Interest Payment Date"), subject to prior redemption. The interest so payable on any Interest Payment Date shall be paid to the person in whose name this Bond is registered at the close of business on the fifteenth day(whether or not a business day) of the calendar month next preceding such Interest Payment Date. Interest hereon 8 shall be computed on the basis of a 360-day year composed of twelve 30-day months. The interest hereon and, upon presentation and surrender hereof at the principal office of the Registrar described below,the principal hereof are payable in lawful money of the United States of America by check or draft drawn on U.S. Bank National Association, as bond registrar,transfer agent and paying agent(the"Registrar"),or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due,the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. This Bond is one of an issue in the aggregate principal amount of$5,580,000(the "Bonds") issued pursuant to a resolution adopted by the City Council on December 17, 2012 (the"Resolution")to refund certain outstanding obligations of the City and is issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota thereunto enabling,including Minnesota Statutes, Chapters 429 and 475. The Bonds are issuable only in fully registered form,in denominations of$5,000 or any integral multiple thereof, of single maturities. Bonds maturing in 2021 and later years shall be subject to redemption and prepayment at the option of the City,in whole or in part,in such order of maturity dates as the City may select and,within a maturity,by lot as selected by the Registrar(or,if applicable,by the bond depository in accordance with its customary procedures) in multiples of$5,000, on February 1, 2020 and on any date thereafter, at a price equal to the principal amount thereof and accrued interest to the date of redemption. The City shall cause notice of the call for redemption thereof to be published if and as required by law, and at least thirty days prior to the designated redemption date, shall cause notice of call for redemption to be mailed,by first class mail,to the registered holders of any Bonds,at the holders' addresses as they appear on the bond register maintained by the Bond Registrar,but no defect in or failure to give such mailed notice of redemption shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. Official notice of redemption having been given as aforesaid,the Bonds or portions of Bonds so to be redeemed shall, on the redemption date,become due and payable at the redemption price therein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the owner without charge,representing the remaining principal amount outstanding. [Bonds maturing in the years shall be subject to mandatory redemption, at a redemption price equal to their principal amount plus interest accrued thereon to the redemption date,without premium,on February 1 in each of the years shown below,in an amount equal to the following principal amounts: Term Bonds Maturing in 20 Term Bonds Maturing in 20 9 Sinking Fund Aggregate Sinking Fund Aggregate Payment Date Principal Amount Payment Date Principal Amount $ $ Term Bonds Maturing in 20 Sinking Fund Aggregate Payment Date Principal Amount Notice of redemption shall be given as provided in the preceding paragraph.] As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar,by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney, and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount,bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax,fee or governmental charge required to be paid with respect to such transfer or exchange. The Bonds have been designated as "qualified tax-exempt obligations"pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Notwithstanding any other provisions of this Bond, so long as this Bond is registered in the name of Cede&Co., as nominee of The Depository Trust Company,or in the name of any other nominee of The Depository Trust Company or other securities depository,the Registrar shall pay all principal of and interest on this Bond, and shall give all notices with respect to this Bond, only to Cede&Co. or other nominee in accordance with the operational arrangements of The Depository Trust Company or other securities depository as agreed to by the City. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof,whether this Bond is overdue or not,for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED,RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of 10 Minnesota to be done,to exist,to happen and to be performed prior to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist,have happened and have been performed as so required; that the City has established its General Obligation Improvement Refunding Bonds, Series 2013A Bond Fund(the"Bond Fund") and has appropriated thereto special assessments heretofore levied upon property specially benefited by local improvements fmanced by the bonds being refunded, and ad valorem taxes on all taxable property in the City which,together with certain escrow earnings, will be sufficient to produce sums not less than five percent in excess of the amounts required to pay the principal of and interest on the Bonds when due, and has appropriated such special assessments and ad valorem taxes to the Bond Fund for the payment of such principal and interest;that if necessary for payment of such principal and interest, additional ad valorem taxes are required to be levied upon all taxable property in the City, without limitation as to rate or amount; that the issuance of this Bond,together with all other indebtedness of the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by the Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF,the City of Farmington,Minnesota,by its City Council,has caused this Bond to be executed on its behalf by the facsimile signatures of the Mayor and City Administrator and has caused this Bond to be dated as of the date set forth below. CITY OF FARMINGTON,MINNESOTA (facsimile signature City Administrator) (facsimile signature Mayor) CERTIFICATE OF AUTHENTICATION Dated: This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION, as Bond Registrar By Authorized Representative 11 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 the applicable laws or regulations: TEN COM- as tenants in common UTMA as Custodian for (Cust) (Minor) TEN ENT- as tenants by the entireties under Uniform Transfers to Minors Act .. (State) JT TEN--as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used. ASSIGNMENT For value received,the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond,with full power of substitution in the premises. Dated: NOTICE: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular,without alteration or enlargement or any change whatsoever. Signature Guaranteed: Signature(s)must be guaranteed by an"eligible guarantor institution"meeting the requirements of the Registrar, which requirements include membership or participation in STAMP or such other"signature guaranty program"as may be determined by the Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: [End of the Bond form] SECTION 3. USE OF PROCEEDS AND SECURITY 3.1. Bond Proceeds. Upon payment for the Bonds by the Purchaser,the City Administrator shall apply the proceeds of the Bonds as follows: (a) shall be deposited in the sinking fund established for the Refunded Series 2006 Bonds to be applied to their redemption and prepayment on the Redemption Date; (b) $ 12 shall be deposited in escrow with U.S.Bank National Association,in St. Paul,Minnesota (the Escrow Agent),the funds so deposited(other than an initial cash balance in the escrow account)to be invested in securities authorized for such purpose by Minnesota Statutes, Section 475.67, subdivision 8 (as directed by Section 475.67, Subdivision 13 thereof),maturing on such dates and bearing interest at such rates as are required to provide funds sufficient,with cash retained in the escrow account, (i)to pay all interest to become due on the Series 2005 Refunding Bonds to and including the Crossover Date and(ii)to pay and redeem the outstanding principal of the Refunded Series 2005 Bonds on the Crossover Date; (c)$ shall be deposited with the Escrow Agent to pay issuance expenses of the Bonds; and(d) $ shall be deposited in the Bond Fund created pursuant to Section 3.2 hereof. The Mayor and City Administrator are hereby authorized to enter into an Escrow Agreement with the Escrow Agent establishing the terms and conditions for the escrow account in accordance with Minnesota Statutes, Section 475.67. 3.2. General Obligation Refunding Bonds, Series 2013A Bond Fund. So long as any of the Bonds are outstanding and any principal of or interest thereon unpaid,the City Administrator shall maintain a separate debt service fund on the official books and records of the City to be known as the General Obligation Improvement Refunding Bonds,Series 2013A Bond Fund(the Bond Fund), and the principal of and interest on the Bonds shall be payable from the Bond Fund. If the money in the Bond Fund should at any time be insufficient to pay principal and interest due on the Bonds, such amounts shall be paid from other moneys on hand in other funds of the City, which other funds shall be reimbursed therefor when sufficient money becomes available in the Bond Fund. The City irrevocably appropriates to the Bond Fund(a)the amount specified in Section 3.1 above; (b) all receipts of principal and interest on the investments held in the escrow account established pursuant to Section 3.1 to and including the Crossover Date(other than the sum of$1,435,000 received from maturing investments to be used to retire the Refunded Series 2005 Bonds), (c)commencing after the applicable redemption date, special assessments pledged pursuant to the resolutions authorizing issuance of the Refunded Bonds; (d) ad valorem taxes collected in accordance with the provisions of Section 3.4 hereof; and(e) such other funds as may be appropriated from time to time by the City to the Bond Fund to pay principal of and interest on the Bonds. The moneys on hand in the Bond Fund from time to time shall be used solely to pay the principal of and interest on the Bonds. 3.3. Pledge of Taxing Powers. For the prompt and full payment of the principal of and interest on the Bonds as such payments respectively become due,the full faith, credit and unlimited taxing powers of the City shall be and are hereby irrevocably pledged. In order to produce aggregate amounts which,together with the collections of special assessments and other amounts set forth in Section 4.01, will produce amounts not less than five percent in excess of amounts needed to meet when due the principal and interest payments on the Bonds, ad valorem taxes are hereby levied on all taxable property in the City, said taxes to be levied and collected in the following years and amounts: 13 Levy Years Collection Years Amount 2013-2020 2014-2021 See attached levy computation Said taxes shall be irrepealable as long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce said levies in accordance with the provisions of Minnesota Statutes,Section 475.61. 3.4. Special Assessments. By the resolutions authorizing issuance of the Refunded Bonds,the City has levied special assessments the principal and interest on which are estimated to be levied and collected in the years and amounts shown on the exhibit attached hereto. In the event any such assessment shall at any time be held invalid with respect to any lot or tract of land, due to any error, defect or irregularity in any action or proceeding taken or to be taken by the City or by any of the officers or employees of the City,either in the making of such assessment or in the performance of any condition precedent thereto,the City hereby covenants and agrees that it will forthwith do all such further things and take all such further proceedings as shall be required by law to make such assessment a valid and binding lien upon said property. The collections of the special assessments shall be deposited, as received,into the Bond Fund. SECTION 4. DEFEASANCE. When all of the Bonds have been discharged as provided in this Section, all pledges, covenants and other rights granted by this Resolution to the Holders of the Bonds shall cease. The City may discharge its obligations with respect to any Bonds which are due on any date by depositing with the 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 Registrar a sum sufficient for the payment thereof in full with interest accrued from the due date 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 Registrar on or before that date an amount equal to the principal,interest and redemption premium,if any, which are then due,provided that notice of such redemption has been duly given as provided herein. 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 the Registrar or with a bank or trust company qualified by law to act as an escrow agent for this purpose,cash or securities which are authorized by law to be so deposited for such purpose,bearing interest payable at such times and at such rates and maturing or callable at the holder's option on such dates as shall be required to pay all principal and interest to become due thereon to maturity or,if notice of redemption as herein required has been irrevocably provided for,to an earlier designated redemption date,provided,however,that if such deposit is made more than ninety days before the maturity date or specified redemption date of the Bonds to be discharged, the City shall have received a written opinion of Bond Counsel to the effect that such deposit does not adversely affect the exemption of interest on any Bonds from federal income taxation and a written report of an accountant or investment banking firm verifying that the deposit is 14 sufficient to pay when due all of the principal and interest on the Bonds to be discharged on and before their maturity dates or earlier designated redemption date. SECTION 5. CERTIFICATION OF PROCEEDINGS. 5.1. Registration of Bonds. The City Administrator is hereby authorized and directed to file a certified copy of this resolution with the County Auditor of Dakota County(the County Auditor) and obtain a certificate that the Bonds have been duly entered upon the County Auditor's bond register and the tax required by law has been levied. 5.2. Authentication of Transcript. The officers of the City and the County Auditor are hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey&Whitney LLP,Bond Counsel,certified copies of all proceedings and records relating to the Bonds and such other affidavits,certificates and information as may be required to show the facts relating to the legality and marketability of the Bonds,as the same appear from the books and records in their custody and control or as otherwise known to them, and all such certified copies, affidavits and certificates,including any heretofore furnished, shall be deemed representations of the City as to the correctness of all statements contained therein. 5.3. Official Statement. The Official Statement relating to the Bonds,dated ,2012,prepared and distributed by Ehlers &Associates,Inc.,is hereby approved. Ehlers &Associates,Inc. is hereby authorized on behalf of the City to prepare and distribute to the Purchaser,within seven business days from the date hereof, a supplement to the Official Statement listing the offering price,the interest rates, selling compensation, delivery date,the underwriters and such other information relating to the Bonds required to be included in the Official Statement by Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934. The officers of the City are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency of the Official Statement. SECTION 6. TAX COVENANTS; ARBITRAGE MATTERS AND CONTINUING DISCLOSURE. 6.1. General Tax Covenant. The City covenants and agrees with the registered owners from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents, any action which would cause the interest on the Bonds to become includable in gross income of the recipient under the Code and applicable Treasury Regulations (the Regulations), and covenants to take any and all affirmative actions within its powers to ensure that the interest on the Bonds will not become includable in the gross income of the recipient under the Code and the Regulations. The City has not and will not enter into any lease,management contract, operating agreement, use agreement or other contract relating to the use or operation of the facilities refinanced by the Bonds, or any portion thereof, or security for the payment of the Bonds which would cause the Bonds to be considered"private activity bonds"or"private loan bonds" pursuant to Section 141 of the Code. 15 6.2. Arbitrage Certification. The Mayor and City Administrator,being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the Purchaser a certificate in accordance with the provisions of Section 148 of the Code and Section 1.148-2(b)of the Regulations stating the facts,estimates and circumstances in existence on the date of issue and delivery of the Bonds which make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of the Code and Regulations. 6.3. Arbitrage Rebate. The City acknowledges that the Bonds are subject to the rebate requirements of Section 148(f) of the Code. The City covenants and agrees to retain such records,make such determinations, file such reports and documents and pay such amounts at such times as are required under said Section 148(f) and applicable Regulations unless the Bonds qualify for an exception from the rebate requirement pursuant to one of the spending exceptions set forth in Section 1.148-7 of the Regulations and no"gross proceeds" of the Bonds (other than amounts constituting a"bona fide debt service fund") arise during or after the expenditure of the original proceeds thereof. 6.4. Qualified Tax-Exempt Obligations. The City Council hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3)of the Code relating to the disallowance of interest expense for fmancial institutions, and hereby fmds that the reasonably anticipated amount of tax-exempt obligations which are not private activity bonds (not treating qualified 501(c)(3)bonds under Section 145 of the Code as private activity bonds for the purpose of this representation) and are not excluded from this calculation by Section 265(b)(3)(C)(ii) of the Code which will be issued by the City and all subordinate entities during calendar year 2013 does not exceed$10,000,000. 6.5. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the Purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12),relating to continuing disclosure (as in effect and interpreted from time to time,the Rule),which will enhance the marketability of the Bonds, the City hereby makes the following covenants and agreements for the benefit of the Owners (as hereinafter defined)from time to time of the outstanding Bonds. The City is the only obligated person in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. If the City fails to comply with any provisions of this Section, any person aggrieved thereby,including the Owners of any outstanding Bonds,may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this Section,including an action for a writ of mandamus or specific performance. Direct,indirect,consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event • shall a default under this Section constitute a default under the Bonds or under any other 16 provision of this resolution. As used in this Section, Owner or Bondowner means,in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner(as hereinafter defined)thereof,if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein,Beneficial Owner means,in respect of a Bond, any person or entity which(i)has the power, directly or indirectly,to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other intermediaries), or(ii)is treated as the owner of the Bond for federal income tax purposes. (b) Information To Be Disclosed. The City will provide,in the manner set forth in subsection(c) hereof,either directly or indirectly through an agent designated by the City,the following information at the following times: (1) on or before 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 2012,the following financial information and operating data in respect of the City(the Disclosure Information): (A) the audited fmancial statements of the City for such fiscal year,prepared in accordance with generally accepted accounting principles in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Minnesota law, as in effect from time to time, or,if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City,noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and (B) to the extent not included in the fmancial statements referred to in paragraph(A) hereof,the information for such fiscal year or for the period most recently available of the type contained in the Official Statement under headings: Current Property Valuations; Direct Debt; Tax Levies &Collections; Population Trend; and Employment/Unemployment. Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified,the City shall provide on or before such date unaudited financial statements in the format required for the audited fmancial statements as part of the Disclosure Information and,within 10 days after the receipt thereof,the City shall provide the audited fmancial statements. Any or all of the Disclosure Information may be incorporated by reference,if it is updated as required hereby,from other documents, including official statements,which have been submitted to the Municipal Securities Rulemaking Board("MSRB")through its Electronic Municipal Market Access System 17 ("EMMA")or to the SEC. If the document incorporated by reference is a final official statement,it must be available from the MSRB. The City shall clearly identify in the Disclosure Information each document so incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect;provided, however,if such operations have been replaced by other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact(as defined in paragraph(2)hereof),then,from and after such determination,the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this Section is amended as permitted by this paragraph(b)(1) or subsection(d),then the City shall include in the next Disclosure Information to be delivered hereunder,to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. (2) In a timely manner not in excess of ten business days after the occurrence of the event,notice of the occurrence of any of the following events (each a "Material Fact"): (A) Principal and interest payment delinquencies; (B) Non-payment related defaults,if material; (C) Unscheduled draws on debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting fmancial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions,the issuance by the Internal Revenue Service of proposed or final determinations of taxability,Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (G) Modifications to rights of security holders,if material; (H) Bond calls,if material, and tender offers; (1) Defeasances; (J) Release, substitution,or sale of property securing repayment of the securities,if material; (K) Rating changes; (L) Bankruptcy,insolvency, receivership or similar event of the obligated person; (M) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person,other than in the ordinary course of business,the entry into a definitive agreement to undertake such an action or the 18 termination of a definitive agreement relating to any such actions,other than pursuant to its terms,if material; and (N) Appointment of a successor or additional trustee or the change of name of a trustee,if material. As used herein,for those events that must be reported if material, an event is "material"if it is an event as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or,if not disclosed,would significantly alter the total information otherwise available to an investor from the Official Statement,information disclosed hereunder or information generally available to the public. Notwithstanding the foregoing sentence, an event is also"material"if it is an event that would be deemed material for purposes of the purchase,holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event. For the purposes of the event identified in (L)hereinabove,the event is considered to occur when any of the following occur: the appointment of a receiver,fiscal agent or similar officer for an obligated person in a proceeding under the U.S.Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person,or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization,arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. • (3) In a timely manner,notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph(b)(1) at the time specified thereunder; (B) the amendment or supplementing of this Section pursuant to subsection (d),together with a copy of such amendment or supplement and any explanation provided by the City under subsection(d)(2); (C) the termination of the obligations of the City under this Section pursuant to subsection(d); (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information are prepared; and (E) any change in the fiscal year of the City. (c) Manner of Disclosure. 19 (1) The City agrees to make available to the MSRB through EMMA,in an electronic format as prescribed by the MSRB,the information described in subsection(b). (2) All documents provided to the MSRB pursuant to this subsection(c) shall be accompanied by identifying information as prescribed by the MSRB from time to time. (d) Term;Amendments; Interpretation. (1) The covenants of the City in this Section shall remain in effect so long as any Bonds are outstanding. Notwithstanding the preceding sentence,however, the obligations of the City under this Section shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that,because of legislative action or final judicial or administrative actions or proceedings,the failure of the City to comply with the requirements of this Section will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This Section(and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to time,without notice to (except as provided in paragraph(c)(3)hereof) or the consent of the Owners of any Bonds,by a resolution of this Board filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications,to the effect that: (i) such amendment or supplement(a)is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity,nature or status of the City or the type of operations conducted by the City, or(b) is required by, or better complies with,the provisions of paragraph(b)(5) of the Rule; (ii)this Section as so amended or supplemented would have complied with the requirements of paragraph(b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause(i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended,the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of fmancial information or operating data being provided hereunder. 20 (3) This Section is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph(b)(5) of the Rule. SECTION 7. REDEMPTION OF REFUNDED BONDS. The City Administrator is hereby directed to advise: (1)U.S.Bank National Association, St.Paul,Minnesota, as paying agent for the Refunded Series 2006 Bonds, to call such bonds for redemption and prepayment on the Redemption Date and to give thirty days mailed notice of redemption in the form attached as Exhibit A hereto, all in accordance with the provisions of the resolutions authorizing the issuance of such bonds; and(2)U.S. Bank National Association, St.Paul,Minnesota, as paying agent for the Refunded Series 2005 Bonds,to call the Refunded Series 2005 Bonds for redemption and prepayment on the Crossover Date,their earliest permissible redemption date, and to give notice of redemption in the form attached as Exhibit B hereto, all in accordance with the provisions of the resolution authorizing the issuance of the Refunded Series 2005 Bonds. SECTION 8. AUTHORIZATION OF PAYMENT OF CERTAIN COSTS OF ISSUANCE OF THE BONDS. The City authorizes the Purchaser and Escrow Agent to forward the amount of Bond proceeds allocable to the payment of issuance expenses to Klein Bank,Chaska,Minnesota,on the closing date for further distribution as directed by the County's financial advisor,Ehlers &Associates,Inc. Upon vote being taken thereon,the following voted in favor thereof: Larson, Bartholomay, Donnelly, Fogarty, May and the following voted against the same: None whereupon the resolution was declared duly passed and adopted. 21 SCHEDULE I Series 2005 Refunding Bonds Year Principal Amount 2015 $ 2016 2017 2018 2019 2020 2021 • Series 2006 Refunding Bonds Year Principal Amount 2015 $ 2016 2017 2018 2019 2020 2021 22 DEBT SERVICE COVERAGE TABLE Date Principal Interest Special 105% Assessments 23 EXHIBIT A NOTICE OF REDEMPTION $5,500,000 General Obligation Improvement Bonds,Series 2006A Dated as of July 12,2006 City of Farmington,Minnesota NOTICE IS HEREBY GIVEN THAT there have been called for redemption and prepayment on March 1, 2013,outstanding Bonds of the above referenced issue which mature on January 1 in the following years and amounts and having the interest rates and CUSIP numbers listed below: Year Amount Interest Rate CUSIP Number 2014 $375,000 3.900% 311297 F83* 2015 390,000 3.950 311297 F91* 2016 410,000 4.000 311297 G25* 2017 425,000 4.000 311297 G33* 2018 445,000 4.050 311297 G41* 2019 465,000 4.100 311297 G58* 2020 485,000 4.125 311297 066* 2021 505,000 4.150 311297 G74* 2022 525,000 4.200 311297 G82* The Bonds will be redeemed at a price of 100% of their principal amount plus accrued interest to the date of redemption. Holders of the Bonds should present them for payment to U.S.Bank National Association, St.Paul,Minnesota,on or before said date,when they will cease to bear interest,in the following manner: If by Mail: If by Hand or Overnight Mail: U.S.Bank National Association U.S.Bank National Association Corporate Trust Operations,3rd Floor Bond Drop Window,3rd Floor Post Office Box 64111 60 Livingston Avenue Saint Paul,MN 55164-0111 Saint Paul,Minnesota 55107 (800)934-6802 Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2001, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number,properly certified. This requirement is fulfilled by submitting a W- 9 Form,which may be obtained at a bank or other financial institution. The Paying Agent shall not be responsible for the selection of or use of the CUSIP number, nor is any representation made as to its correctness indicated in this Notice of Redemption. It is included solely for the convenience of the Holders. Additional information may be obtained from the undersigned or from Ehlers&Associates,3060 Centre Pointe Drive,Roseville,MN 55113-1122(651-697-8500),financial advisor to the City. Dated: ,2013. BY ORDER OF THE CITY OF FARMINGTON,MINNESOTA /s/ City Administrator *The Registrar shall not be responsible for the selection or use of the CUSIP numbers,nor is any representation made as to their correctness indicated in this Notice of Redemption or on any Bond. They are included solely for convenience of the Holders. Denotes full call of CUSIP. A-1 EXHIBIT B NOTICE OF REDEMPTION $2,635,000 General Obligation Improvement Bonds,Series 2005B Dated as of July 1,2005 City of Farmington,Minnesota NOTICE IS HEREBY GIVEN THAT there have been called for redemption and prepayment on February 1,2014,all outstanding Bonds of the above referenced issue which mature on February 1 in the following years and amounts and having the interest rates and CUSIP numbers listed below: Year Amount Interest Rate CUSIP Number 2015 $180,000 3.950 311297 B20* 2016 180,000 4.000 311297 B38* 2017 195,000 4.000 311297 B46* 2018 210,000 4.050 311297 B53* 2019 210,000 4.100 311297 B61* 2020 225,000 4.125 311297 B79* 2021 235,000 4.150 311297 B87* The Bonds will be redeemed at a price of 100%of their principal amount plus accrued interest to the date of redemption. Holders of the Bonds should present them for payment to U.S. Bank National Association, St.Paul,Minnesota,on or before said date,when they will cease to bear interest,in the following manner: If by Mail: If by Hand or Overnight Mail: U.S.Bank National Association U.S.Bank National Association Corporate Trust Operations,3rd Floor Bond Drop Window,3rd Floor Post Office Box 64111 60 Livingston Avenue Saint Paul,MN 55164-0111 Saint Paul,Minnesota 55107 (800)934-6802 Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2001, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number,properly certified. This requirement is fulfilled by submitting a W- 9 Form,which may be obtained at a bank or other financial institution. The Paying Agent shall not be responsible for the selection of or use of the CUSIP number, nor is any representation made as to its correctness indicated in this Notice of Redemption. It is included solely for the convenience of the Holders. Additional information may be obtained from the undersigned or from Ehlers&Associates,3060 Centre Pointe Drive,Roseville,MN 55113-1122(651-697-8500),financial advisor to the City. Dated: ,20_. BY ORDER OF THE CITY OF FARMINGTON,MINNESOTA /s/ City Administrator *The Registrar shall not be responsible for the selection or use of the CUSIP numbers,nor is any representation made as to their correctness indicated in this Notice of Redemption or on any Bond. They are included solely for convenience of the Holders. Denotes full call of CUSIP. B-1 CERTIFICATE OF DAKOTA COUNTY AUDITOR AS TO REGISTRATION AND TAX LEVY The undersigned,being the duly qualified and acting County Auditor of Dakota County,Minnesota,hereby certifies that there has been filed in my office a certified copy of a resolution duly adopted on December 17,2012,by the City Council of the City of Farmington,Minnesota, setting forth the form and details of an issue of$ General Obligation Refunding Bonds, Series 2013A, dated as of January 15, 2013, and levying taxes for their payment. I further certify that the issue has been entered on my bond register and the tax required by law for their payment has been levied and filed as required by Minnesota Statutes, Sections 475.61 to 475.63. WITNESS my hand officially this_day of , 2012. County Auditor ESCROW AGREEMENT THIS ESCROW AGREEMENT, made and entered into by and between the City of Farmington, Minnesota(the Issuer) and U.S. Bank National Association, St.Paul, Minnesota (the Agent); WITNES SETH,that the parties hereto recite and, in consideration of the mutual covenants and payments referred to and contained herein, covenant and agree as follows: 1. The Issuer has duly issued and presently has outstanding the following issue: Original Principal Maturities Date of Principal Amount Escrowed and Payment Title Issue Amount Escrowed Redeemed Date General Obligation July 1,2005 $2,635,000 $1,435,000 2015-2021 2/1/14 Improvement Bonds, Series 2005B (the Refunded Bonds) and has issued its$ General Obligation Improvement Refunding Bonds, Series 2013A, dated January 15, 2013 (the Refunding Bonds). With respect to the Refunded Bonds,the February 1, 2014 payment date is referred to herein as the Crossover Date. 2. The Issuer has also, in accordance with a resolution adopted December 17,2012 (the Resolution), simultaneously with the execution of this Agreement,transmitted Refunding Bond proceeds in the amount of$ to the Agent to be used as follows: (a) $ of Refunding Bond proceeds to purchase an equivalent principal amount of federal securities as identified in Exhibit A attached hereto; (b) $ to be applied to costs of issuance of the Refunding Bonds and (c) $ of Refunding Bond proceeds to be deposited as a beginning cash balance in the Escrow Account hereinafter established. In the opinion of Barthe&Wahrman P.A., certified public accountants,the federal securities designated in paragraph(a),together with the initial cash balance designated in paragraph(c), mature at such times and bear interest at such rates that the collections of principal and interest thereon will be sufficient to pay the interest to become due on the portion of the Refunding Bonds allocated to the refunding of the Refunded Bonds(the"Advance Refunding Bonds")to and including the Crossover Date and to pay and redeem the outstanding principal of the Refunded Bonds on the Crossover Date in accordance with the attached Exhibit B. 3. The Agent agrees to apply the funds received from the Issuer in the manner and for the purposes set forth in Section 2 hereof and this Section. The Agent acknowledges receipt of the cash and federal securities described in Section 2 and agrees that it will hold such cash and federal securities in a special escrow account(the Escrow Account) in the name of the Issuer, 110 and will collect and receive on behalf of the Issuer all payments of principal and interest on such securities and as paying agent for the Refunding Bonds, (a)will remit from the Escrow Account moneys sufficient for the payment of interest to become due on the Advance Refunding Bonds to and including the Crossover Date and(b)will remit from the Escrow Account the sum of $1,435,000 to be applied to the payment of principal of the Refunded Bonds called for redemption on the Crossover Date. Any remaining funds in the Escrow Account after such transfer shall be remitted to the Issuer. The Agent will, not fewer than 30 days prior to the Crossover Date, cause the Notice of Redemption attached hereto as Exhibit C to be mailed to the holders of all Refunded Bonds to be redeemed on the Crossover Date. 4. In order to ensure continuing compliance with the Internal Revenue Code of 1986, as amended(the Code),and present Treasury Regulations promulgated thereunder(the Regulations),the Agent agrees that it will not reinvest any cash received in payment of the principal of and interest on the federal securities held in the Escrow Account. Said prohibition on reinvestment shall continue unless and until an opinion is received from nationally recognized bond counsel that reinvestments in general obligations of the United States or obligations the principal of and interest on which are guaranteed as to payment by the United States, as specified in said opinion, may be made in a manner consistent with the Code and then existing Regulations. The federal securities described in Exhibit A hereto may, at the written direction of the Issuer,be replaced, in whole or in part,with general obligations of the United States or obligations the principal of and interest on which are guaranteed as to payment by the United States and which mature as to principal and interest in such amounts and at such times as will assure the availability of sufficient moneys to pay the interest on the Advance Refunding Bonds prior to and the outstanding principal amount of the Refunded Bonds on the Crossover Date, provided, however,that concurrently with such written direction,the Issuer shall provide the Agent with(a) a certification of an independent certified public accountant as to the sufficiency of the federal securities to be subject to this Agreement following such replacement and as to the yields thereof, setting forth in reasonable detail the calculations underlying such certification, (b) an unqualified opinion of nationally recognized bond counsel to the effect that such replacement (1)will not cause the Refunded Bonds or the Refunding Bonds to be subjected to treatment as "arbitrage bonds"under Section 148 of the Code and(2) is otherwise in compliance with this Agreement. Any replacement authorized by this paragraph 4 shall be accomplished by sale, transfer, request for redemption or other disposition of all or a portion of the federal securities described in Exhibit A hereto with the proceeds thereof being applied to the purchase of substitute federal securities, all as specified in the written direction of the Issuer. 5. The Agent acknowledges that arrangements satisfactory to it for payment of its compensation for all services to be performed by it as Agent under this Agreement have been made. The Agent expressly waives any lien upon or claim against the moneys and investments in the Escrow Account. 6. If at any time it shall appear to the Agent that the money in the Escrow Account will not be sufficient to make any payment due to the registered owners of any of the Refunded Bonds,the Agent shall immediately notify the Issuer. Upon receipt of such notice the Issuer shall forthwith transmit to the Agent for deposit in the Escrow Account from moneys on hand and legally available therefor, such additional moneys as may be required to make any such 2 111 payment, and the Issuer recognizes its obligation to levy ad valorem taxes on all taxable property in the Issuer to the extent required to produce the moneys necessary for this purpose. 7. Within 60 days following the close of each fiscal year and close of the Escrow Account,the Agent shall submit to the Issuer a report covering all money it shall have received and all payments it shall have made or caused to be made hereunder during the preceding fiscal year or portion thereof. 8. It is recognized that title to the federal securities and money held in the Escrow Account from time to time shall remain vested in the Issuer but subject always to the prior charge and lien thereon of this Agreement and the use thereof required to be made by the provisions of this Agreement. The Agent shall hold all such money and obligations in a special trust fund and account separate and wholly segregated from all other funds and securities of the Agent or deposited therein. It is understood and agreed that the responsibility of the Agent under this Agreement is limited to the safekeeping and segregation of the moneys and securities deposited with it in the Escrow Account, and the collection of and accounting for the principal and interest payable with respect thereto. 9. This Agreement is made by the Issuer for the benefit of the holders of the Refunding Bonds and the Refunded Bonds under and pursuant to Minnesota Statutes, Section 475.67, and is not revocable by the Issuer, and the investments and other funds deposited in the Escrow Account and all income therefrom have been irrevocably appropriated for the payment of outstanding principal of the Refunded Bonds on the Crossover Date, and to pay interest on the Advance Refunding Bonds prior to and including the Crossover Date, in accordance with this Agreement. This Agreement may not be amended except to(i) sever any clause herein deemed to be illegal, (ii)provide for the reinvestment of funds or the substitution of securities as permitted by Section 4 hereof or(iii) cure any ambiguity or correct or supplement any provision herein which may be inconsistent with any other provision, provided that the Agent shall determine that any such amendment shall not adversely affect the owners of the Refunded Bonds or Refunding Bonds. In the event an amendment to this Agreement is proposed to be made pursuant to this Section 9,prior notice shall be given by first class mail,postage prepaid, to the following organization at the following address(or such other address as may be provided by the addressee)and shall be deemed effective upon receipt: Moody's Municipal Rating Desk/Refunded Bonds, 99 Church Street,New York,New York 10007. 10. This Agreement shall be binding upon and shall inure to the benefit of the Issuer and the Agent and their respective successors and assigns. In addition,this Agreement shall constitute a third party beneficiary contract for the benefit of the holders of the Refunding Bonds and Refunded Bonds, as their interests may appear. Said third party beneficiaries shall be entitled to enforce performance and observance by the Issuer and the Agent of the respective agreements and covenants herein contained as fully and completely as if said third party beneficiaries were parties hereto. 11. Upon merger or consolidation of the Agent, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Agent. Upon the resignation of the Agent,which shall be communicated in writing to the Issuer, or in the event the Agent becomes incapable of acting 3 112 hereunder,the Issuer reserves the power to appoint a successor Agent. No resignation shall become effective until the appointment of a successor Agent by the Issuer. 12. The Issuer acknowledges that to the extent regulations of the Comptroller of the Currency or any other regulatory entity grant the Issuer the right to receive brokerage confirmations of the security transactions as they occur,the Issuer specifically waives receipt of such confirmations to the extent permitted by law. The Escrow Agent will furnish the Issuer with periodic cash transaction statements that include the detail for all investment transactions made by the Escrow Agent for all current and future accounts. 4 113 IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, on January_, 2013. CITY OF FARMINGTON By: Mayor And: City Administrator [Signature Page to Escrow Agreement] 5 114 U.S.BANK NATIONAL ASSOCIATION, Agent By: Its: [Signature Page to Escrow Agreement] 6 115 EXHIBIT A ESCROW ACCOUNT CASH RECEIPTS FROM SLGS ALLOCATED TO THE REFUNDED BONDS PURCHASED WITH REFUNDING BOND PROCEEDS AND PROOF OF YIELD 116 MOM City of Elko New Market,Minnesota Estimated Sources and Uses of Funds Sources: Principal amount of 2012 Bands $ 1,296,000.00 Initial reoffering premium on 2012 Bonds (1,1 .80) $ 1.288.800.20, Uses: Purchase price of SLGS $ 745,384.00 Initial cash deposit to escrow account 0.42 Costs of issuance 40,272.00 Funds to current refund certain Series 2003 Bonds 495,000.00 Underwriter's discount 7,723.32 Contingency 420.46 S 1,288.800.20 117 EXHIBIT B ESCROW ACCOUNT CASH FLOW WOMB R City of Elm New Market,Minnesota 'Yield on 2012 Bonds Present Vale Debt on November 5, Service 2012 Using Payment Interest total Debt a Ylold of Date Prig Rate Yield Interest Service 1.550602% 0810112013 5 - $ 12,631.31 (a) $ 12,831.31 S 12,487.97 0219112014 45900 0.66% (b) 8.547.50 (a) 53,547.50 52,532.55 08/0111 14 - 8,41250 (a) 8,412.60 8,189.65 02/0112015 45,000 0.50% (b) 8,412.50 (a) 53,412.60 51,698.94 08/01/2016 - 8271.50 8,277.50 7,934,62 02/0112016 116,000 0.60% (b) 8,277.60 123,27750 117,281.83 061012018 - 7,932.50 7932.60 7,487.36 0219112017 120.000 0.75% 0.75% 7,932.60 127,932.60 119,824.48 08201/2017 - 7,482.50 746260 8,954.36 02/0112018 125,000 0.90% 0.90% 7,482.50 132,482.60 122,184.17 08101/2018 • 6,620.00 6,920.00 6,332.98 02101/2019 120.000 1.10% 1.10% 6.920.00 128,920.00 115,259.91 08101/2019 - 6,280.00 6,260.00 6,041.16 02/012020 120,000 1.30% 1.30% 6,280.00 126,26090 112903.09 0810112020 - 5,480.00 5480.00 4,882.58 02101/2021 125,000 1.50% 1.50% 5,480.00 130,460.00 114,588.29 08141/2021 - 4,54250 4,54250 3,868.92 02/01/2022 125,000 1.70% 1.70% 4,542.60 129,54250 112,314.62 081212022 - 3,480.00 3,480.0 299398 02/0162023 130,000 1.80% 1.65% 3,460.00 133,48090 113,964.63 08101/2023 2,310.00 2,310.00 1,958.92 02/0112024 135,000 2.10% (a) 2,310.00 137,310.00 115,427.52 08/01/2024 • 892.50 89250 744.49 02101/2025 85,000 2.10% (a) 89260 65,89260 71,097.48 $ 1.280.000 ,h. •. ., , ' . 1. ±,;,,rr , issue pride of 2012 Bonds for yield celattafron purpaaea Pandpel amount of2012Bonds $ 1,290,000.00 Mho original Issue di rmt (1,189.80} $ 1.288.800.20, (a)A portion of these four interest payment wilt be made with funds in few escrow account—see Exhibit A. ON This term bond is assumed to have been Initially exacted to yield 0.600 percent to maturity. (c) This term bond Is assumed to have been IntraBy reofrensd to yield 2.25 percent to maturity. The sum of the present values of debt service payments to be made on the 2012 Bonds,on November 5,2012 using a yield of 1.550602 percent,Is equal to the Issue prow of the 2012 Bonds for yield calculation purposes therefore,the yield on the 2012 Bonds is equal to 1.650602 percent 118 EXHIBIT C NOTICE OF REDEMPTION $2,635,000 General Obligation Improvement Bonds,Series 2005B Dated as of July 1,2005 City of Farmington,Minnesota NOTICE IS HEREBY GIVEN THAT there have been called for redemption and prepayment on February 1,2014,all outstanding Bonds of the above referenced issue which mature on February 1 in the following years and amounts and having the interest rates and CUSIP numbers listed below: Year Amount Interest Rate CUSIP Number 2015 $180,000 3.950 311297 B20* 2016 180,000 4.000 311297 B38* 2017 195,000 4.000 311297 B46* 2018 210,000 4.050 311297 B53* 2019 210,000 4.100 311297 B61* 2020 225,000 4.125 311297 B79* 2021 235,000 4.150 311297 B87* The Bonds will be redeemed at a price of 100% of their principal amount plus accrued interest to the date of redemption. Holders of the Bonds should present them for payment to U.S. Bank National Association, St. Paul, Minnesota,on or before said date,when they will cease to bear interest,in the following manner: If by Mail: If by Hand or Overnight Mail: U.S.Bank National Association U.S.Bank National Association Corporate Trust Operations,3rd Floor Bond Drop Window,3rd Floor Post Office Box 64111 60 Livingston Avenue Saint Paul,MN 55164-0111 Saint Paul,Minnesota 55107 (800)934-6802 Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2001, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number,properly certified. This requirement is fulfilled by submitting a W-9 Form, which may be obtained at a bank or other financial institution. The Paying Agent shall not be responsible for the selection of or use of the CUSIP number,nor is any representation made as to its correctness indicated in this Notice of Redemption. It is included solely for the convenience of the Holders. Additional information may be obtained from the undersigned or from Ehlers&Associates,3060 Centre Pointe Drive,Roseville,MN 55113-1122(651-697-8500),financial advisor to the City. Dated: , 20_. BY ORDER OF THE CITY OF FARMINGTON, MINNESOTA /s/ City Administrator *The Registrar shall not be responsible for the selection or use of the CUSIP numbers,nor is any representation made as to their correctness indicated in this Notice of Redemption or on any Bond. They are included solely for convenience of the Holders. Denotes full call of CUSIP. 119 10 =a � City of Farmington c, 325 Oak Street Farmington,Minnesota ° � �� 651.463 7111 •Fax 651.463.2591 www.ci.farmington.mn.us • TO: Mayor,Council Members, City Administrator FROM: Lee Smick,City Planner AICP, CNU-A SUBJECT: 2013 Community Development Block Grant Application DATE: December 17,2012 INTRODUCTION The City has the opportunity to apply for approximately$35,820 in Community Development Block Grant(CDBG)funds for program year 2013 [July 1,2013 through June 30,2014]. To secure the grant money that is available,the City must prepare and submit an application that specifies eligible activities or projects (see attached Exhibit A)to which the City intends to allocate the available funding. A completed application is due to the Dakota County Community Development Agency(CDA)by December 31,2012 accompanied by an approved City Council Resolution. Typically,the EDA reviews the CDBG application;however,since the EDA is not meeting in December 2012 and a deadline of December 31,2012 is at hand,the City Council is reviewing the allocation of CDBG funds along with the resolution. Annually,the City receives[federal] Community Development Block Grant(CDBG)funds which are distributed by the Dakota County CDA.In 2012,the allocation amount was$39,800. The CDA anticipates a 10%reduction on the 2013 HUD budget for CDBG funds. Farmington's 2013 CDBG allotment is expected to be$35,820. The City currently has$111,146.59 in its CDBG fund. As explained below,the CDA is proposing to reallocate$17,510 from Farmington's Business Development-Grant to other jurisdictions. The Dakota County Board of Commissioners will be asked to approve this proposal on January 8,2013. DISCUSSION Dakota County CDA Responsibilities The CDBG entitlement program under the Department of Housing and Urban Development (HUD)allocates annual grants to larger cities and urban counties to develop viable communities by providing decent housing,a suitable living environment,and opportunities to expand economic opportunities,principally for low and moderate-income persons. 120 Dakota County participates in the CDBG program as an Entitlement County and receives funds each year directly from HUD.The Dakota County Community Development Agency(CDA)is considered a sub-grantee or administrator of CDBG funds.The CDA has several participating cities and townships that receive CDBG funds and implement CDBG activities as sub-recipient cities and townships. The CDA continues to receive funds yearly from HUD. HUD will make a full grant award yearly to the CDA unless the Secretary has made a determination that the CDA has failed to carry out its CDBG-assisted activities in a timely manner(timeliness rate). HUD has recently audited the CDA and is concerned about the timeliness of drawing down CDBG funds at the CDA. Therefore,the CDA has recently become more diligent on ensuring that funds granted to sub-recipient cities be spent down in a timely manner. The CDA has recently informed staff that they will be formally seeking the reallocation of the remaining Farmington CDBG 2007 funds($17,510)from the Business Redevelopment Grant to the following areas: 1)$10,000 to countywide well sealing and 2)$7,510 to the City of Coates for the construction of a weather siren. Both of these activities will be completed by end of April 2013 meeting the May 1,2013 deadline. The CDA is also reviewing the possibility of removing $16,000 from FY2011 from the Public Service—Senior Center fund. The EDA did not approve the use of a portion of these funds and another portion did not meet HUD guidelines in 2011. The reallocation of$17,510 funds needs to be approved by the Dakota County Board of Commissioners on January 8,2013. The CDA stated that they do not want to reallocate funding from jurisdictions,but they need to meet the HUD timeliness rate requirement or lose out on funding in future years. The CDA has reported that they barely met the requirement last year and it is growing more and more difficult to meet. Therefore,the older funding in Farmington needs to be spent. CDBG regulations,specifically CFR 24 Section 570.902,states that 60 days prior to the end of the grantee's current program year,the amount of entitlement grant funds available to the recipient under grant agreements,but not disbursed by the U.S.Treasury,must be at or below 1.5 times the entitlement grant amount for its current program year. At this time,the CDA has $3,113,075.13 in unspent CDBG funds County-wide.Therefore,the CDA cannot have more than $2,311,172,in unspent CDBG funds. Farmington's 1.5 timeliness rate is calculated from FY2012 funds of$39,800. The timeliness rate is multiplied by 1.5,therefore, $59,700 needs to be spent in CDBG dollars by May 1,2013. At this point in time,Farmington has a total of$111,146.59 in unspent CDBG funds. Since the 2008 Business Redevelopment funds of$17,510 will be reallocated to the City of Coates and countywide well sealing,Farmington needs to spend$51,446.59 by May 1,2013 to meet the 1.5 Ratio. If the City does not spend the funds of $51,446.59 by May 1,2013,the CDA may reallocate a portion or all of those funds to other jurisdictions and/or other activities. Fiscal Year 2012 In Fiscal Year 2012(FY2012),the only CDBG fund utilized was the Commercial Rehabilitation Fund which includes$33,830. This was allocated to Pellicci Ace Hardware which received a total grant amount of$31,122.50 including$24,913.52 for roof repairs and$6,208.98 for a 121 sprinkler system. As shown on the attached matrix(see attached Exhibit B),the Farmington CDBG Status Report dated November 30,2012 identifies a total CDBG budget of$111,146.59. Fiscal Year 2013 Staff has been reviewing each fund shown on the matrix to determine where the FY2013 funds of$35,820 should be distributed. Following is an explanation of the attached matrix showing activities with remaining CDBG balances. The City Council may consider allocating 2013 CDBG funds to any of the eligible activities detailed below and in Exhibit A. At least 50%of our 2013 CDBG funds must be allocated to an activity that qualifies as a low/mod benefit. Residential Rehabilitation Loan Program($49.157.99) The Residential Rehabilitation Grant Program assists low income homeowners in financing basic home improvements that directly affect the safety,habitability,energy efficiency or accessibility of their homes. A portion of each year's allocation of CDBG funds are typically directed to the City's Residential Rehabilitation account which funds the CDA's Home Improvement Loan Program. The CDA administers this program on behalf of all cities located within the county. All Dakota County residents are eligible to apply for the Home Improvement Loan Program which assists low-to-moderate-income homeowners with repairs and improvements to their homes. Funds in Farmington's residential rehab account are used exclusively for the benefit of Farmington homeowners. Historically,Farmington's rehab funds are depleted each year,forcing the need to tap into the county-wide rehab account. However,in the Program Year 2011 (July 1,2011 —June 30,2012),the CDA completed four rehab loans in Farmington. In Program Year 2012(July 1,2012—June 30,2013),the CDA has not distributed funds in Farmington and has not worked on any rehab loans to date. Since $49,157.99 is currently funded for this program and no rehab dollars were spent in FY2012 so far,staff is recommending that FY2013 funds should not be dedicated to this program. In 2013, staff will be highlighting the opportunity to offer$49,157.99 CDBG funds to homeowners by advertising the residential rehab loans on the website,City News&Recreation Guide,and Facebook,etc. so this funding is utilized. Commercial Rehabilitation Grant Pram($22,188.60) The intent of the grant program is to prevent the deterioration of commercial structures and discourage blight,encourage projects that correct code violations and to eliminate accessibility restrictions. Grant funds(maximum grant of$35,000)are available to assist local businesses and/or property owners who are making qualified improvements to eligible commercial properties that eliminate conditions detrimental to public health and safety.Correcting code violations,code improvements and the correction of handicap accessibility issues are examples of qualified improvements.This activity meets the slum/blight national objective. (Previous projects: Pellicci Ace Hardware Roof and fire suppression-$31,122.50 in 2011) • Staff is proposing to allocate$10,000 to the Commercial Rehabilitation fund bringing the total of this amount of funding to$35,197.50. 122 Proposed Project Dakota County Lumber is in need of a fire suppression system in their 2,400 SF existing building due to the expansion of 2,400 SF of their building to the south. A total of $35,000 will be utilized for this purpose. Business Development Grant IBDG1($17,510 pending) The intent of the grant program is to retain and create local jobs by encouraging existing businesses to expand within city limits and to support entrepreneurial growth. Eligible uses include grants for business expansion assistance(maximum grant$15,000),microenterprise assistance and redevelopment assistance for certain parcels owned by the City's Economic Development Authority. The maximum funding for this grant is$15,000. As stated above,the CDA will be formally seeking the reallocation of the remaining Farmington CDBG 2007 funds ($17,510)from the Business Redevelopment Grant to the following areas: 1)$10,000 to countywide well sealing and 2)$7,510 to the City of Coates weather siren. Both of these activities will be completed by end of April 2013. (Previous projects:Anna's Bananas Daycare to purchase equipment for outdoor play structures-$15,000--2009;Installed Building Solutions equipment purchase and storage racks for business expansion-$10,500 in 2010;Vinge Tile for purchase of equipment for business expansion-$15,000 in 2009). • Staff is proposing to allocate$25,820 to the Business Development Grant to not only replenish the fund,but offer business expansion opportunities to business in the City. Proposed Project CDBG money will fund$15,000 for the expansion of Installed Building Solutions in the Farmington Industrial Park for equipment. A total of$10,820 will remain in the Business Development Grant funding category after the$15,000 is expended. Specifically the business expansion use of the BDG program can not be funded further unless prior approval is received from the CDA and Dakota County Board. Micro-Enterprise Assistance/Rent Assistance($23,800) Microenterprise rental assistance is based on the tenant's lease terms and will not exceed 75%of the monthly rental payment(not to exceed$15,000)for up to twelve(12)consecutive months. Microenterprise assistance is an eligible use defined in the City's Business Development Grant (BDG)program. This activity meets the low/mod national objective. (Previous projects: Buds &Bytes for rental assistance not to exceed 75%of monthly rent payments-$7,740 in 2008) Micro-enterprise is defined as a business having five or fewer employees and is viewed as a new start-up business with future ownership potential. The assistance provided would help offset the cost of rent for a period up to one year. The City of Farmington administers this program. Public Service/New Part-Time Rambling River Center Staff Position and Scholarship($16,000) In 2011,the EDA approved allocating 40%of 2011 funds towards paying ALL personnel costs associated with a new part-time staff position. However,sometime after the CDBG application was approved by the CDA,but prior to the start of the 2011 program year,I was informed by the CDA that HUD has provided new interpretations on certain details. Staff has determined that it was unlikely that we could meet the"new"requirements. 123 Additionally,the EDA reviewed a proposal for a scholarship providing funds to individuals of low to moderate-income levels to apply to receive funds for recreational programs. The EDA chose not to fund the scholarship,therefore,$16,000 remains in the Public Service fund. Other eligible uses for this funding are being explored. The City Council should discuss the proposal of allocating the 2013 CDBG to the Commercial Rehabilitation and the Business Development Grant funding categories. ACTION REQUESTED Approve the attached resolution to allocate a total of$35,820 CDBG funds for FY2013 to the Commercial Rehabilitation and the Business Development Grant funding categories. Respectfully submitted, Lee Smick,AICP CNU-A City Planner/Economic Development 124 RESOLUTION NO.R62-12 A RESOLUTION APPROVING THE APPLICATION OF THE CITY OF FARMINGTON FOR FISCAL YEAR 2013 DAKOTA COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington, Minnesota, was held in the Council Chambers of said City on the 17th day of December 2012 at 7:00 p.m. Members Present: Larson, Bartholomay, Donnelly, Fogarty,May Members Absent: None Member Fogarty introduced and Member May seconded the following: WHEREAS, the City of Farmington is a participating jurisdiction with the Dakota County CDBG Entitlement Program for Fiscal Year 2013 [July 1, 2013 through June 30, 2014]; and WHEREAS, the Dakota County Community Development Agency (CDA) is a Sub-grantee of Dakota County for the administration of the CDBG Program; and WHEREAS, the Dakota County CDA has requested fiscal year 2012 CDBG applications to be submitted by December 31, 2012, based on a district formula allocation of funds approved in the Community Development Implementation Plan. NOW, THEREFORE, BE IT RESOLVED that the City of Farmington hereby approves the following: 1. The Fiscal Year 2013 CDBG application is approved for submission to the Dakota County CDA. 2. The City Administrator for the City is authorized to execute the application and all agreements and documents related to receiving and using the awarded CDBG funds. 3. The Dakota County CDA is designated as the administrative entity to carry out the CDBG program on behalf of the City/Township, subject to future Subrecipient Agreements that may be required for specific CDBG-funded activities. This resolution adopted by recorded vote of the Farmington the City Council in open session this 17th day of December,2012. CITY OF FARMINGTON ayor Attested to the /$+yday of December 2012. Ci dministrator SEAL CDBG ELIGIBLE ACTIVITIES DEFINITIONS 4( A The following are summary definitions of Community Development Block Grant Eligible Activities: Please Note:Although an activity may be deemed eligible for CDBG funding,it does not guarantee funding. The Community Development Needs for the CDBG Program in the Comprehensive Plan sets forth the priority of needs and as such,dictates which types of eligible activities maybe funded in a given year. CDBG funds may NOT be used for costs attributable to a building used for the general conduct of government or used for political activities. Acquisition/Disposition:The use of CDBG funds to acquire real property,in whole or in part,by purchase,long-term lease,donation, or otherwise,for any public purpose. Real property to be acquired may include:land,air rights,easements,water rights,right-of-ways, buildings and other property improvements,or other interests in real property. Demolition/Clearance:Clearance,demolition,and removal of buildings and improvements including movement of structures to other sites. Economic Development Activities:Economic development activities may include,but are not limited to:(1)Construction by the grantee or subrecipient of a business incubator designed to provide inexpensive space and assistance to new firms to help them become viable businesses,(2)Loans to pay for the expansion of a factory or commercial business,and(3)Providing training needed by persons on welfare to enable them to qualify for jobs created by CDBG-assisted special economic development activities. The level of public benefit to be derived from the economic development activity must be appropriate given the amount of CDBG assistance. Rehabilitation:Rehabilitation related activities may include single-family rehabilitation,multi-family rehabilitation,energy efficiency improvements,public housing modernization,and rehabilitation of commercial properties. General Administration: CDBG funds may be used for the general administration costs incurred by a Subrecipient to administer their CDBG program. Administration costs directly associated with a CDBG activity should be part of the activity as project administration. Relocation:CDBG funds may be used for relocation payments and assistance to displaced persons,including individuals,families, businesses,non-profits,and farms,where required under section 570.606 of the regulations(pursuant to the Uniform Relocation Act). Public Facllltlesllmprovements:CDBG funds may be used by the grantee or other public or private nonprofit entities for the acquisition(including long term leases for periods of 15 years or more),construction,reconstruction,rehabilitation(including removal of architectural barriers to accessibility),or installation,of public improvements or facilities. Buildings for the general conduct of government cannot be acquired or improved with CDBG funds.This includes neighborhood facilities,firehouses,public schools,and libraries,as well as water and/or sewer treatment plants.The regulations further specify that facilities that are designed for use in providing shelter for persons having special needs are considered to be public facilities. Public Services:CDBG funds may be used to provide public services(including labor,supplies,and materials),provided that each of the following criteria is met:1)The public service must be either a new service or a quantifiable increase In the level of service;and 2) The amount of CDBG funds obligated within a program year to support public service activities under this category may not exceed 40%of the City's allocation and the total public services of all Subrecipients may not exceed 15%of the total grant awarded to Dakota County for that year. Planning: Includes studies,analysis,data gathering,preparation of plans,and identification of actions that will implement plans.The types of plans which may be paid for with CDBG funds include,but are not limited to:Comprehensive plans; Individual project plans; Community development plans,Capital improvement programs;Small area and neighborhood plans;Environmental and historic preservation studies;and Functional plans(such as plans for housing,land use,energy conservation,or economic development). Homeownership Assistance: Homeownership assistance activities may include financial assistance for downpayments, closing costs or other part of the purchase process and counseling for pre-purchase,post-purchase or foreclosure prevention. 6 126 ( //,, 0 0 0 0 0 0 ,., NoO •cl- 0 E fl o o d - o G V N r N 0 r a) a 0 0 O O 6) at) to O O to Ti, co co O cr 0 r r O co r I— N e- N r V) En. to tN r CO_ O N O O ° O 0 0 r• N OM OM O to (tl ✓ co co CD r N M M >, co Co S] to Ef3 co C a) O O O Q O O O 00 0 U) •c- O O O O O _O ✓ O co co C O O N to EA Efl M a) a) C O r ° V" CO O 00 M (0 0 COO CO W. 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O a) > U a) 0 N D D O C e w QUoaa cC0 I� 1/a, ,01#1yc City of Farmington f '� i 430 Third Street Farmington,Minnesota A �1a 651.280.6800•Fax 651280.6899 &r."'�0`�� wwwci.farniington.mnus TO: Mayor and City Council FROM: David I.McKnight,City Administrator SUBJECT: 2013 Budget and Tax Levy DATE: December 17,2012 INTRODUCTION The City Council directed staff to make additional changes to the final 2013 budget and tax levy at your December 3,2012 meeting. The City Council and staff met in a work session to discuss different options on December 10,2012. DISCUSSION The City Council gave staff direction to keep the 2013 tax levy at the same amount as the 2012 tax levy. With this direction an additional$152,986 in changes needed to be made to the budget. At the work session on Monday,December 10,2012 a consensus was reached to make the following changes to the budget. ✓ Remove the generator from the Fire Department budget ($50,000) ✓ Use the net sale revenue of the 431 Third Street building($30,000) ✓ Remove the vehicle from the Fire Department budget($45,000) ✓ Staff reorganization($24,000) ✓ Reduce the reserve line item($3,986) These changes amount to $152,986 which is the amount that the 2013 tax levy needed to be reduced. City staff will watch the 2013 reserve line item to see if the vehicle in the Fire Department could potentially be purchased from the reserve line item if that is the desire of the City Council in late 2013. BUDGET IMPACT Your action tonight will set the budget and tax levy for 2013. ACTION REQUESTED If the City Council is comfortable with the changes that were discussed,two separate motions should be made to approve the attached resolutions: 128 1. Adopting the tax levy for the year 2013 collection;(this resolution reaffirms the vote you made on December 3,2012 and includes all of the correct amounts) 2. Approving the 2013 budget. Respectfully submitted, David J.McKnight City Administrator 129 RESOLUTION NO.R63-12 A RESOLUTION ADOPTING THE TAX LEVY FOR THE YEAR 2013 COLLECTION Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington was held at the Farmington City Hall on the 17th day of December 2012 at 7:00 p.m. Members Present: Larson, Bartholomay, Donnelly, Fogarty, May Members Absent: None Member Donnelly introduced and Member May seconded the following: WHEREAS,the City of Farmington is annually required by state law to approve a resolution setting forth an annual tax levy to the Dakota County Auditor; and WHEREAS,Minnesota Statute currently in place require certification of the tax levy to the Dakota County Auditor on or before December 28, 2012; and WHERAS, summary details of the proposed budgets are contained in the budget submitted to the City Council. NOW THEREFORE BE IT RESOLVED by the Mayor and City Council of the City of Farmington,that the following sums of money be levied in 2012, collectible in 2013,upon the taxable property in said City of Farmington for the following purposes: General Fund $ 7,883,800 Special Levy(Ag Credit) $ 3,000 Debt Service (Schedule Attached) $2,720,801 Fire Levy $ 154,255 GROSS LEVY $10,761,856 Less Fiscal Disparities $2,195,874 NET LEVY $ 8,565,982 This resolution was adopted by recorded vote of the Farmington City Council in open session on the 17th day of December 2012. Mayor Attested to on the /g44 day of December 2012. OetAA■; C1 j/ City Administrator SEAL 2013 BUDGET Summary of debt service levy to be attached and become part of the resolution R63-12 FUND PROJECT LEVY AMOUNT 3080 GO Improvement Refunding Bonds of 2005A $176,450 (Pilot Knob Road Project Refinancing) 3085 GO Improvement Bonds 2005B $127,500 (Ash Street Project) 3090 GO Improvement Bonds 2006A $390,000 (Spruce Street Extension and Bridge/Hill Dee) 3095 GO Improvement Bonds 2008A/B $40,000 (Elm Street and 195th Street Projects) 3097 GO Improvement Bonds 2010A $396,000 (Police Station and Maintenance Facility) 3099 GO Improvement Refunding Bonds 2011A $300,000 (Main Street Project) 3110 GO Wastewater Treatment 1995 Bonds $60,000 (Wastewater Treatment Facilities Project) 3130 GO Capital Improvement Plan Bonds 2005C $168,234 (Fire Station#2 Project) 3135 GO Capital Improvement Plan Bonds 2007A $735,837 (City Hall and First Street Garage Projects) 3140 Public Safety Bonds 2007 $61,950 (DCC) 3300 GO Equipment Certificate 2010D $144,830 (Ice Sheet) XXXX Water Board Equipment Loan $120,000 (Fire Truck) The amount levied is less than the required amounts from the payment schedules for some of the bonds. The bonds are listed on the back of Form B which is part of this resolution. The city has sufficient sources to pay the bonds. These sources are also listed on Form B. RESOLUTION NO. R64-12 A RESOLUTION ADOPTING THE 2013 BUDGET Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington was held at the Farmington City Hall on the 17th day of December 2012 at 7:00 p.m. Members Present: Larson, Bartholomay,Donnelly, Fogarty, May Members Absent: None Member Fogarty introduced and Member Donnelly seconded the following: WHEREAS,the City of Farmington Ordinance Chapter 7, Section 1-7-3 requires that an annual budget be submitted to the City Council which accurately reflects the financial needs of the City organization; and WHEREAS, Minnesota Statutes require approval of a resolution setting forth an annual budget and tax levy to the Dakota County Auditor on or before December 28, 2012. NOW THEREFORE BE IT RESOLVED by the Mayor and City Council of the City of Farmington,that the 2013 operating budget shall be adopted. General Fund Revenues Expenditures Property Taxes $8,038,055 Licenses/Permits $381,550 Fines/Forfeitures $62,800 Interest $60,000 Intergovernmental $407,600 Charges for Services $521,650 Miscellaneous $32,500 Transfers from Other Funds $1,064,498 Administration $921,778 HR/IT $188,166 Finance $509,597 Police $4,010,417 Fire $805,504 Engineering $1,155,832 Municipal Services $1,262,851 Parks/Recreation $1,279,508 Transfers to Other Funds $435,000 Total General Fund $10,568,653 $10,568,653 Special Revenue Funds Revenues Expenditures Arena $286,500 $282,582 Park Improvement $69,500 $120,000 Police Forfeiture $4,000 $4,000 Economic Development $52,200 $45,120 Tax Increment $90,135 $85,825 Total Special Revenue $502,335 $537,527 Debt Service All Debt Service Funds $4,062,434 $4,322,703 Capital Projects Funds Capital Acquisition/Cable $140,000 $252,265 Street Construction/Maintenance $1,236,368 $842,000 Private Capital Project Fund $50,000 $50,000 Storm Water Trunk Fund $63,500 $267,633 Sanitary Sewer Trunk Fund $20,000 $152,800 Seal Coating Fund $350,000 $250,000 Total Capital Projects $1,859,868 $1,814,698 Total Governmental Funds $16,993,290 $17,243,581 This resolution was adopted by recorded vote of the Farmington City Council in open session on the 17th day of December 2012. Mayor Attested to on the I day of December 2012. • C / f Administrator SEAL CITY OF FARMINGTON 2013 BUDGET GENERAL FUND -- _ 2011 2012 2013 2014 REVENUES BUDGET BUDGET BUDGET ESTIMATED PROPERTY TAX LEVY $7,084,547 $7,839,637 $8,038,055 $8,513,830 IJCENSES/PERMITS $431,455 $431,455 $381,550 $396,150 FINES/FORFEITURES $70,000 $70,000 $62,800 $62,800 INTEREST $200,000 $80,000 $60,000 $63,000 INTERGOVERNMENTAL $405,590 $405,590 $407,600 $407,600 CHARGES FOR SERVICE $578,678 $617,649 $521,650 $495,150 MISCELLANEOUS $69,000 $79,007 $32,500 $32,500 TOTAL REVENUE $8,839,270 $9,523,338 $9,504,155 $9,971,030 - TRANSFERS IN - - EDA $0 $0 $0 __$0_ _ LIQUOR OPERATIONS _ $70,007 $70,007 $50,000 $50,000 SEWER $70,007 $70,007 $70,007 $70,007 STORM WATER $70,007 $70,007 $305,306 $308,835 - SOLID WASTE $70,007 $70,007 $70,007 $70,007 WATER $70,007 $70,007 $376,739 $381,340 SANITARY $0 $0 $192,439 $195,326 TOTAL TRANSFERS IN $350,035 $350,035 $1,064,498 $1,075,515 GRAND TOTAL REVENUES $9,189,305 $9,873,373 $10,568,653 $11,046,545 EXPENDITURES ADMINISTRATION $932,197 $896,656 $921,778 $996,309 HUMAN RESOURCES $238,159 $248,329 $188,166 $199,358 FINANCE $429,658 $425,357 $509,597 $528,827 POUCE $3,868,994 $3,877,398 $4,010,417 $4,058,005 FIRE $714,085 $836,930 $805,504 $1,090,716 ENGINEERING $896,866 $890,922 $1,155,832 $1,182,546 MUNICIPAL SERVICES $802,352 $800,891 $1,262,851 $1,245,858 PARKS/RECREATION $888,981 $1,201,890 $1,279,508 $1,309,926 TOTAL EXPENDITURES $8,771,292 $9,178,373 $10,133,653 $10,611,545 TRANSFERS OUT RECREATION OPERATING $140,700 $120,000 $0 $0 SEAL COATING $0 $350,000 $350,000 $350,000 12/11/2012 134 General Fund Summary EDA $0 $225,000 $50,000 $50,000 DEBT SERVICES $233,973 $0 $20,000 $20,000 BUILDING FUND $0 $0 $15,000 $15,000 TOTAL TRANSFERS OUT $374,673 $695,000 $435,000 $435,000 GRAND TOTAL EXPENDITURES $9,145,965 $9,873,373 $10,568,653 $11,046,545 ..... EXCESS(DEFICIENCY)OF $43,340 $0 $0 $0 REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES ------- FUND BALANCE 1/1 $2,207,772 $2,207,772 $2,207,772 $2,207,772 FUND BALANCE 12/31 $2,200,074 $2,207,772 $2,207,772 $2,207,772 • 12/11/2012 General Fund Summary 135 CITY OF FARMINGTON 2013 BUDGET SPECIAL REVENUE BUDGET SUMMARY REVENUES 2012 2013 2014 EDA $4,779 $2,200 $2,200 TIF DIST.2 $85,000 $85,000 $85,000 TIF DIST.13 $5,135 $5,135 $5,135 POLICE FORFEITURE $4,000 $4,000 $4,000 PARK IMPROVEMENT $29,500 $69,500 $58,400 ICE ARENA $308,300 $286,500 $291,550 TOTAL REVENUE $436,714 $452,335 $446,285 EXPENDITURES 2012 2013 2014 EDA $5,695 $11,620 $11,620 TIF DIST.2 $8,204 $8,204 $8,204 TIF DIST.13 $5,121 $5,121 $5,121 POLICE FORFEITURE $4,000 $4,000 $4,000 PARK IMPROVEMENT $160,000 $120,000 $70,000 ICE ARENA $301,756 $282,582 $295,471 TOTAL EXPENDITURES $484,776 $431,527 $394,416 TRANSFERS 2012 2013 2014 TRANFERS IN $50,000 $50,000 $50,000 TRANSFERS OUT -$106,000 -$72,500 -$72,500 TOTAL TRANSFERS -$56,000 -$22,500 -$22,500 REV AND TRANS IN $486,714 $502,335 $496,285 EXPEN AND TRAN OUT $590,776 $504,027 $466,916 12/11/2012 136 Special Revenue Budget(TIF,Arena,EDA) CITY OF FARMINGTON 2012 BUDGET DEBT SUMMARY REVENUES 2011 2012 2013 2014 4011 PROPERTY TAX $2,441,760 $2,598,414 $2,720,801 $2,713,800 4110 SPECIAL ASSESSMENTS $291,433 $248,968 $243,282 $224,425 4955 DEFERRED ASSESSMENTS $0 $0 $0 $331,598 _ - TOTAL REVENUE $2,733,193 $2,847,382 $2,964,083 $3,269,823 EXPENDITURES 7110 PRINCIPAL $2,605,095 $2,962,207 $3,052,540 $3,107,032 7120 INTEREST $1,478,335 $1,363,032 $1,270,163 $1,171,615 TOTAL EXPENDITURES $4,083,430 $4,325,239 $4,322,703 $4,278,647 OTHER FINANCING SOURCES AND USES 5105 BOND PROCEEDS $0 $0 $0 $0 5205 TRANSFERS IN $1,862,005 $1,166,209_ $1,098,351 $1,091,430 • XXXX TRANSFERS OUT -$19,104 $0 $0 $0 TOTAL OTHER $1,842,901 $1,166,209 $1,098,351 $1,091,430 ---- EXCESS(DEFICIENCY)OF $492,664 -$311,648 -$260,269 $82,606 REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES FUND BALANCE 1/1 $783,507 $1,276,171 $964,523 $704,254 FUND BALANCE 12/31 $1,276,171 $964,523 $704,254 $786,860 12/11/2012 1 Debt Service Budgets and Summary 37 CITY OF FARMINGTON 2013 BUDGET CAPITAL PROJECTS FUND BUDGET SUMMARY REVENUES 2012 2013 2014 SANITARY SEWER TRUNK FUND $17,484 $20,000 $15,000 CAPITAL ACQUISITION/CABLE FUND $140,000 $140,000 $140,000 STREET RECONSTRUCTION/ROAD AND BRIDGE FUND $518,760 $845,781 $834,956 MUNICIPAL BUILDING FUND $0 $0 $0 STORM WATER TRUNK FUND $10,000 $10,000 $20,000 PRIVATE CAPITAL PROJECTS FUND $50,000 $50,000 $50,000 PERMANENT IMPROVEMENT REVOLVING FUND $9,000 $0 $0 SEAL COATING FUND $0 $0 $0 TOTAL REVENUES $745,244 $1,065,781 $1,059,956 EXPENDITURES SANITARY SEWER TRUNK FUND $0 $95,000 $0 CAPITAL ACQUISITION/CABLE FUND $70,500 $252,265 $60,000 STREET RECONSTRUCTION/ROAD AND BRIDGE FUND $85,000 $0 $0 MUNICIPAL BUILDING FUND $0 $0 $0 STORM WATER TRUNK FUND $60,000 $60,000 $60,000 PRIVATE CAPITAL PROJECTS FUND $50,000 $50,000 $50,000 PERMANENT IMPROVEMENT REVOLVING FUND $208 = $0 $0 SEAL COATING FUND $350,000 $250,000 $300,000 TOTAL EXPENDITURES $615,708 $707,265 $470,000 TRANSFERS IN $931,653 $794,084 $794,088 TRANSFERS OUT -$1,265,572 -$1,107,433 -$1,095,633 TOTAL TRANSFERS -$333,919 -$313,349 -$301,545 REVENUE AND TRANSFERS IN $1,676,897 $1,859,865 $1,854,044 EXPENDITURES AND TRANSFERS OUT $1,881,280 $1,814,698 $1,565,633 12/11/2012 Capital Projects Budgets and Summary 138 CITY OF FARMINGTON 2013 BUDGET ENTERPRISE FUND BUDGET SUMMARY REVENUES 2012 2013 2014 LIQUOR STORES $984,100 $990,000 $996,000 SEWER OPERATIONS $1,794,689 $1,795,750 $1,795,750 SOLID WASTE $1,876,903 $1,936,700 $1,937,700 STORM WATER $464,000 $551,672 $551,672 WATER $1,542,500 $1,747,750 $1,747,750 STREETLIGHTS $195,282 $210,000 $210,000 TOTAL REVENUES $6,857,474 $7,231,872 $7,238,872 EXPENDITURES LIQUOR STORES $878,451 $866,545 $862,972 SEWER OPERATIONS $1,813,102 $1,373,755 $1,104,237 SOLID WASTE $1,930,220 $1,975,128 $1,865,052 STORM WATER $456,826 $302,105 $726,413 WATER -_^�-- - $1,135,098 $874,449 $861,482 STREETLIGHTS $178,823 $189,150 $194,150 TOTAL EXPENDITURES $6,392,520 $5,581,132 $5,614,306 TRANSFERS TRANSFERS IN $0 $0 $0 TRANSFERS OUT -$726,325 -$1,390,114 -$1,393,422 TOTAL TRANSFERS -$726,325 -$1,390,114 -$1,393,422 REVENUE AND TRANSFERS IN $6,857,474 $7,231,872 $7,238,872 EXPENDITURES AND TRANSFERS OUT $7,118,845 $6,971,246 $7,007,728 12/11/2012 Enterprise Fund Budgets 139