Mahnomen ISD #432

School board Minutes September 12, 2016

MINUTES
REGULAR MONTHLY BOARD MEETING AGENDA
 I.S.D. NO. 432, MAHNOMEN, MINNESOTA
September 12, 2016

 

CALL TO ORDER at 6:00 pm by Jim DeVries in the High School Media Center.

ROLL CALL Board Members Present:  Jim DeVries, David VanDenEinde, Judy Hanson,Jon McArthur, Melissa Buck and Nicole Ose.  Staff participating at the table were: Superintendent Jeff Bisek, Elementary Principal Jacob Melby, High School Principal Kevin Hedstrom and District Secretary Delane Schaumburg.

Staff and visitors in attendance:  Holly Ristau, Vicki Haverkamp, Jennifer Accobee, Lindsey Swiers, Brady Liebl, Jill Kettner, Marlene Myhre, Dennis Williams, Dana Goodwin, Joan LaVoy and Mahnomen Pioneer Representative, Sue Kraft.

 

ADOPTING THE AGENDA-

MOTION BY  VanDenEinde  to approve the agenda with additions.  SECONDED BY Hanson. VOTE-u/c

 

VISITORS/PRESENTERS IN ATTENDANCE SPEAKING AT THIS MEETING.   Marlene Myhre representing the Indian Education Parent Committee commented on their request to repost the full-time Ojibwe Language/Culture position and fill when a candidate was available.  Dana Goodwin also spoke in support of a full-time Language/Culture teacher position. 

           

MONTHLY MINUTE AND FINANCE CONSENT BUSINESS

MOTION BY McArthur to approve the August 8, 2016 Regular Meeting Minutes and the August 29, 2016 Special Board Meeting Minutes as presented as well as monthly financial claims for August 22, 2016 Bills totaling $105,645.07 with check numbers 72319-72368 payments for September 12, 2016 totaling $80,788.93 with check numbers 72369-72413 and additional payments for September 12, 2016 totaling $127,568.90 with check numbers 72414-72468 whereby the September total amount of bills paid is $208,357.83, and also approve this action to recognize and accept the following donation-Father Dave Super - $75.00 – Athletic Program. SECONDED BY Hanson.  VOTE-u/c

COMMUNICATIONS-None

     

STUDENT REPRESENTATIVE, COMMITTEE, AND SCHOOL BOARD REPORTS-

People Parade is September 30 with Homecoming festivities the week of October 10-14, 2016.  Powder Puff game is October 10. 

Building & Grounds Committee-Design Committee Meeting, Sept. 13, 2016; Region 1-Minutes July 28, 2016 meeting; BRIC-Council Minutes August 16, 2016; MSBA-MSBA Advocacy Tour Sept. 20, 2016 in TRF; MREA-Annual Conference-November 13-15, 2016.   

 

ADMINISTRATION REPORTS-Elementary Principal-What’s Happened, What’s Going to Happen, Attendance and Discipline Referrals. High School Principal-MN Report Card Summary and ACT Scores-Report Card.  Superintendent Report: Summer Projects, Ready for School, Search for Staff and Bonding.   

 

OLD BUSINESS-

Final Reading of Policy 721

MOTION BY Hanson to conduct the 3rd reading and approve Policy 721 Uniform Grant Guidance.

SECONDED BY  VanDenEinde.  VOTE- u/c

Acknowledgement of Annual Impact Aid Hearing Meeting

MOTION BY McArthur to acknowledge receipt and review of the September 8, 2016 Impact Aid Public Hearing minutes as well as the review of policy 903.1.  SECONDED BY Buck.    VOTE-u/c

 

NEW BUSINESS-

2016 Payable 2017 Property Tax Levy and Date of the Final Certification Action

MOTION BY VanDenEinde to hereby set the proposed 2016 payable 2017 tax levy at the maximum formula allowable amount with it being understood that the final levy certification and current year budget review will be during the 6 p.m. regular board meeting on December 12, 2016.

SECONDED BY Hanson.  VOTE-u/c

 

Naming the Local Education Agency Representative regarding Public Law 107-110 for the 2016-17 School Year

MOTION BY McArthur to name Superintendent Jeff Bisek to act as the local agency representative (LEA) for PL 107-110 for the 2016-17 school year.  SECONDED BY VanDenEinde.  VOTE-u/c

ISD 432 “Red Flags Rule” Plan

MOTION BY Buck to name Delane Schaumburg as the local Federal Trade Commission (FTC) “Red Flag Rule” compliance person.  SECONDED BY Ose.   VOTE-u/c

Identifying the Local Official with Authority

MOTION BY Hanson to name Superintendent Jeff Bisek the Local Official with Authority to authorize user access to MDE secure websites for Mahnomen Public School District.  SECONDED BY McArthur.  VOTE-u/c

Notice of General Election

MOTION BY VanDenEinde to giving notice that the general election has been called and will be held in and for Independent School District #432 (Mahnomen), State of Minnesota, Tuesday, the 8th day of November, 2016 for the purpose of electing three (3) school board members for a 4 year term. The ballot shall provide as follows:

SCHOOL BOARD MEMBER - (4 year term)

VOTE FOR THREE (3)          

  • DENNIS WILLIAMS                                       
  • JIM DEVRIES                                                                              
  • KYLE LARSON
  • JILL KETTNER

SECONDED BY Ose.  VOTE-u/c

Resolution Awarding Sale of Series 2016A Bonds

Member DeVries introduced the following resolution and moved its adoption:

RESOLUTION AWARDING THE SALE OF $3,090,000 GENERAL OBLIGATION FACILITIES MAINTENANCE BONDS, SERIES 2016A; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT

BE IT RESOLVED, by the School Board (the “Board”) of Independent School District No. 432 (Mahnomen Public Schools), State of Minnesota (the “District”), as follows:

            1.01.    Background.  It is determined that:

(a)       pursuant to a resolution adopted by this Board on June 13, 2016, this Board memorialized the District’s intent to undertake the following health and safety projects and accessibility improvements at Mahnomen High School (the “Health and Safety Projects”): (i) upgrades to the 1985 pool, the 1985 gymnasium, and the locker room for each, including improvements to the mechanical space or boiler room (including ceilings and lights in the locker room); (ii) upgrades to the 1965 gymnasium, including dehumidification upgrades and improvements to the mechanical space or boiler room; (iii) upgrades to the 1985 community hallway and band storage area, including ceilings and lights and improvements to the mechanical space or boiler room; and (iv) asbestos abatement throughout the facility;

(b)       pursuant to a separate resolution adopted by this Board on June 13, 2016, this Board memorialized the District’s intent to undertake the following deferred capital expenditures and maintenance projects to prevent further erosion to the District’s facilities at Mahnomen High School (the “Maintenance Projects,” and together with the Health and Safety Projects, the “Projects”): (i) replacement of the swimming pool heater; and (ii) replacement of the basement locker room epoxy flooring;

(c)       the District is authorized by Minnesota Statutes, Section 123B.595 and Chapter 475, as amended (collectively, the “Act”), to finance the Projects by the issuance of general obligation facilities maintenance bonds of the District payable from ad valorem taxes levied on all taxable property in the District;

(d)       pursuant to Section 123B.595, Subdivision 5(b) of the Act, on July 28, 2016 the District published a notice of the Projects, the total estimated amount of the Bonds (hereafter defined), and the total amount of District indebtedness in the Mahnomen Pioneer, the District’s official newspaper;

(e)       it is necessary and expedient to the sound financial management of the District that the District issue its General Obligation Facilities Maintenance Bonds, Series 2016A, in a total aggregate principal amount of $3,090,000 (the “Bonds”) pursuant to the Act to provide financing for the Projects; and

(f)        this Board has retained PMA Securities, Inc. to act as an independent municipal advisor for the purpose of reviewing the pricing fairness associated with the purchase and subsequent reoffering of the Bonds.  The Board Chair and the District Superintendent have previously been authorized to execute an agreement with PMA Securities, Inc.  Therefore, it is determined that the District has retained an “independent financial advisor” in connection with such sale and has been authorized by Section 475.60, Subdivision 2(9) of the Act to negotiate the sale of the Bonds.  The actions of District staff and the District’s financial advisors in negotiating the sale of the Bonds are ratified and confirmed in all aspects.

            1.02.    Award to the Purchaser and Interest Rates.  The proposal of Robert W. Baird & Co. Incorporated (the “Purchaser”) to purchase the Bonds is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $3,095,408.75 (par amount of $3,090,000.00, plus original issue premium of $52,463.85, less original issue discount of $8,430.10, less underwriter’s discount of $38,625.00), for Bonds bearing interest as follows:

Year

Interest Rate

Year

Interest Rate

       

2018

   2.000%

2025

   2.000%

2019

2.000

2026

2.000

2020

2.000

2027

2.000

2021

2.000

2028

2.000

2022

2.000

2029

2.000

2023

2.000

2030

2.000

2024

2.000

2031

2.000

            1.03.    Purchase Contract.  The Board Chair and the District Superintendent are directed to execute a contract with the Purchaser on behalf of the District.

            1.04.    Terms and Principal Amounts of the Bonds.  The District will forthwith issue and sell the Bonds pursuant to the Act in the total principal amount of $3,090,000, originally dated September 26, 2016, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1, 2018 the years and amounts as follows:

Year

Amount

Year

Amount

       

2018

             $35,000

2025

            $335,000

2019

45,000

2026

340,000

2020

45,000

2027

345,000

2021

15,000

2028

355,000

2022

15,000

2029

360,000

2023

            165,000

2030

370,000

2024

            325,000

2031

340,000

            1.05.  Optional Redemption.  The District may elect on February 1, 2024, and on any date thereafter to prepay Bonds due on or after February 1, 2025.  Redemption may be in whole or in part and if in part, at the option of the District and in such manner as the District will determine.  If less than all Bonds of a maturity are called for redemption, the District will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid.  DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed.  Prepayments will be at a price of par plus accrued interest.

            1.06.    Combined Maturities.  The maturity schedule of the Bonds shall be combined with the maturity schedules of the District’s total currently outstanding general obligation debt, which combined maturities conform to Section 475.54, Subdivisions 1 and 2 of the Act.

            Section 2.        Registration and Payment.

            2.01.    Registered Form.  The Bonds will be issued only in fully registered form.  The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein.

            2.02.    Dates; Interest Payment Dates.  Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue.  The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2017, to the registered owners of record as of the close of business on the fifteenth day of the calendar month next preceding such interest payment date, whether or not that day is a business day.

            2.03.    Registration.  The District will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”).  The effect of registration and the rights and duties of the District and the Registrar with respect thereto are as follows:

                        (a)       Register.  The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged.

                        (b)       Transfer of Bonds.  Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, 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 that interest payment date.

                        (c)       Exchange of Bonds.  When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing.

                        (d)       Cancellation.  Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the District.

                        (e)       Improper or Unauthorized Transfer.  When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized.  The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.

                        (f)        Persons Deemed Owners.  The District and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid.

                        (g)       Taxes, Fees and Charges.  The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange.

                        (h)       Mutilated, Lost, Stolen or Destroyed Bonds.  If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the 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 evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the District and the Registrar must be named as obligees.  Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the District.  If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment.

                        (i)        Redemption.  In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law.  Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of any proceeding for the redemption of Bonds.  Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time.

            2.04.    Appointment of Initial Registrar.  The District appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar.  The Board Chair and the District Superintendent are authorized to execute and deliver, on behalf of the District, 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 authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar.  The District agrees to pay the reasonable and customary charges of the Registrar for the services performed.  The District reserves the right to remove the Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar.  On or before each principal or interest due date, without further order of this Board, the District Superintendent must transmit to the Registrar money sufficient for the payment of all principal and interest then due.

            2.05.    Execution, Authentication and Delivery.  The Bonds will be prepared under the direction of the District Superintendent and executed on behalf of the District by the signatures of the Board Chair and the District Superintendent, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals.  If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery.  Notwithstanding such execution, a Bond will not 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 a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution.  When the Bonds have been so prepared, executed and authenticated, the District Superintendent will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price.

            2.06.    Temporary Bonds.  The District may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond.  Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled.

            Section 3.        Form of Bond.

            3.01.    Form.  The Bonds will be printed or typewritten in substantially the form as attached hereto as EXHIBIT A.

            3.02.    Approving Legal Opinion.  The District Superintendent is authorized and directed to obtain a copy of the proposed approving legal opinion of Eckberg Lammers, P.C., Stillwater, Minnesota, Bond Counsel to the District, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond.

            Section 4.        Payment; Security; Pledges and Covenants.

            4.01.    Funds and Accounts.  (a)          Debt Service Fund.  The Bonds are payable from the General Obligation Facilities Maintenance Bonds, Series 2016A Debt Service Fund (the “Debt Service Fund”) created herein.  The Debt Service Fund shall be administered and maintained by the District Superintendent and District Finance staff as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the District.  The proceeds of the ad valorem taxes hereinafter levied by the District are pledged to the Debt Service Fund.  If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the District Finance staff will pay such principal or interest from the general fund of the District, and the general fund may be reimbursed for those advances out of the proceeds of the taxes levied by this Resolution, when collected.    

            (b)       Construction Fund.  The proceeds of the Bonds, together with any other funds appropriated during the construction and equipping of the Projects, will be deposited in a separate construction fund (the “Construction Fund”), to be used solely to defray expenses of the Projects.  When the Projects are completed and the cost thereof paid, the Construction Fund is to be closed and any balance in the fund is to be deposited in the Debt Service Fund.  Net reoffering premium in the amount of $44,033.75 hereby deposited in the Construction Fund.

            (c)       Capitalized Interest Fund.  Proceeds of the Bonds in the amount of $12,000 will be deposited in a separate fund (the “Capitalized Interest Fund”) to be used to make a portion of the August 1, 2017 interest payment on the Bonds.  Once such payment has been made the Capitalized Interest Fund is to be closed and any balance in the fund is to be deposited in the Debt Service Fund.

            4.02.    Pledge of Tax Levy.  For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the District, which tax will be spread upon the tax rolls and collected with and as part of other general taxes of the District.  Such tax will be credited to the Debt Service Fund above provided and will be in the years and amounts attached hereto as EXHIBIT B.

            4.03.    Debt Service Coverage.  It is determined that the estimated aggregate collections of taxes will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds.  The tax levy herein provided is irrepealable until all of the Bonds are paid, provided that at the time the District makes its annual tax levies the District Superintendent or District Finance staff may certify to the Mahnomen County Auditor/Treasurer the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the County Auditor/Treasurer will thereupon reduce the levy collectible during such year by the amount so certified.

            4.04.    Certificate as to Registration.  The District Superintendent is authorized and directed to file a certified copy of this Resolution with the Mahnomen County Auditor/Treasurer and to obtain the certificate required by Section 475.63 of the Act.

           

            Section 5.        Authentication of Transcript; Credit Enhancement.

            5.01.    District Proceedings and Records.  The officers of the District are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds certified copies of proceedings and records of the District relating to the Bonds and to the financial condition and affairs of the District, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the District as to the facts stated therein.

            5.02.    Certification as to Official Statement.  The Board Chair and the District Superintendent are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of said Official Statement.

            5.03.    Other Certificates.  The Board Chair and the District Superintendent are authorized and directed to furnish to the Purchaser at closing on the Bonds such certificates as are required as a condition of sale.  Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the District or incumbency of its officers, at the closing the Board Chair and the District Superintendent shall also execute and deliver to the Purchaser a suitable certificate as to the absence of material litigation, and the District Superintendent shall also execute and deliver a certificate as to payment for and delivery of the Bonds.

            5.04.    Payment of Costs of Issuance.  The District authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to the Registrar on the closing date for further distribution as directed by the Purchaser, or the Purchaser may directly forward payments of issuance expenses to the appropriate parties with the permission of the District.

            5.05.    Minnesota School District Credit Enhancement Program.  The District hereby covenants and obligates itself to notify the Minnesota Commissioner of Education of a potential default in the payment of principal and interest on the Bonds and to use the provisions of Minnesota Statutes, Section 126C.55, as amended (the “Credit Enhancement Act”), to guarantee payment of the principal and interest on the Bonds when due.  The District further covenants to deposit with the Registrar or any successor registrar/paying agent three days prior to the date on which a payment is due on the Bonds an amount sufficient to make that payment or to notify the Minnesota Commissioner of Education that it will be unable to make all or a portion of that payment.  The Registrar is authorized and directed to notify the Minnesota Commissioner of Education if it becomes aware of a potential default in the payment of principal or interest on the Bonds, or if on the day two business days prior to the date a payment is due on the Bonds, there are insufficient funds to make that payment on deposit with the Registrar.  The District acknowledges that as a result of its covenant to be bound by the provisions of the Credit Enhancement Act, the provisions of that section shall be binding as long as any Bonds remain outstanding.

            Section 6.        Tax Covenants.

            6.01.    Tax-Exempt Bonds.  The District covenants and agrees with the holders 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 subject to taxation under the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds.  To that end, the District will comply with all requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds.

            6.02.    No Rebate.   For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the District finds, determines, and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the District (and all subordinate entities of the District) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $15,000,000, all within the meaning of Section 148(f)(4)(D) of the Code.

            6.03.    Not Private Activity Bonds.  The District further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used in such a manner as to cause the Bonds to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code.

            6.04.    Qualified Tax-Exempt Obligations.  To qualify the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the District makes the following factual statements and representations:

                        (a)       the Bonds are not “private activity bonds” as defined in Section 141 of the Code;

                        (b)       the District designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code;

                        (c)       the reasonably anticipated amount of tax-exempt obligations (other than any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the District (and all subordinate entities of the District) during calendar year 2016 will not exceed $10,000,000; and

                        (d)       not more than $10,000,000 of obligations issued by the District during calendar year 2016 have been designated for purposes of Section 265(b)(3) of the Code.

            6.05.    Procedural Requirements.  The District will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this Section.

            Section 7.        Book-Entry System; Limited Obligation of District.

            7.01.    DTC.  The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof.  Upon initial issuance, the ownership of each such Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”).  Except as provided in this Section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC.

            7.02.    Participants.  With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, neither the District nor the Registrar will have any responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of or interest on the Bonds.  The District and the Registrar may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes.  The Registrar will pay all principal of and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the District’s obligations with respect to payment of principal of or interest on the Bonds to the extent of the sum or sums so paid.  No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this Resolution.  Upon delivery by DTC to the District Superintendent of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.,” will refer to such new nominee of DTC; and upon receipt of such a notice, the District Superintendent will promptly deliver a copy of the same to the Registrar.

            7.03.    Representation Letter.  The District has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of and interest on the Bonds and notices with respect to the Bonds.  Any registrar subsequently appointed by the District with respect to the Bonds will agree to take all action necessary for all representations of the District in the Representation Letter with respect to the Registrar to be complied with at all times.

            7.04.    Transfers Outside Book-Entry System.  In the event the District, by resolution of this Board, determines that it is in the best interests of the persons having beneficial interest in the Bonds that they be able to obtain Bond certificates, the District will notify DTC, whereupon DTC will notify the Participants of the availability through DTC of Bond certificates.  In such event the District will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution.  DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the District and discharging its responsibilities with respect thereto under applicable law.  In such event, if no successor securities depository is appointed, the District will issue and the Registrar will authenticate Bond certificates in accordance with this Resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof.

            7.05.    Payments to Cede & Co.  Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of and interest on the Bond and notices with respect to the Bond will be made and given, respectively, in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter.

            Section 8.        Continuing Disclosure.

            8.01.    Execution of the Continuing Disclosure Certificate.  “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate, executed by the Board Chair and the District Superintendent and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof.

            8.02.    Compliance with Provisions of the Continuing Disclosure Certificate.  The District covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.  Notwithstanding any other provision of this Resolution, failure of the District to comply with the Continuing Disclosure Certificate will not be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under this Section.

            Section 9.        Defeasance.  When all Bonds and all interest thereon have been discharged as provided in this Section, all pledges, covenants and other rights granted by this Resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the District for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect.  The District may discharge all 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.  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 to the date of such deposit.

This Resolution is passed and adopted by the School Board of Independent School District No. 432 (Mahnomen Public Schools), State of Minnesota, this 12th day of September, 2016.

            The motion for the adoption of the foregoing resolution was duly seconded by Member McArthur, and upon vote being taken thereon, the following voted in favor thereof:  DeVries, McArthur, Ose, Buck, Hanson and VanDenEinde. 

and the following voted against the same:   None

whereupon said resolution was declared duly passed and adopted.

Resolution Awarding Sale of Series 2016B Bonds

Member DeVries introduced the following resolution and moved its adoption:

RESOLUTION AWARDING THE SALE OF $605,000 GENERAL OBLIGATION CAPITAL FACILITIES BONDS, SERIES 2016B; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT

BE IT RESOLVED, by the School Board (the “Board”) of Independent School District No. 432 (Mahnomen Area School District), State of Minnesota (the “District”), as follows:

            1.01.    Background.  It is determined that:

(a)       pursuant to a resolution adopted by this Board on June 13, 2016 (the “Parameters Resolution”), this Board memorialized the District’s intent to undertake the following projects and improvements to its facilities, consisting of bringing its facilities into compliance with life and safety codes and fire codes, and modifying its buildings and equipment for security purposes, including: (i) renovations to its nursing, special education, superintendent, reception, and computer lab rooms, as well as its staff and student restrooms; (ii) securing of entrances to its elementary and high school facilities; and (iii) improvements to a basement locker room (collectively, the “Projects”);

(b)       the District is authorized by Minnesota Statutes, Section 123B.62 and Chapter 475, as amended (collectively, the “Act”), to finance the Projects by the issuance of general obligation capital facilities bonds of the District payable from ad valorem taxes levied on all taxable property in the District;

(c)       pursuant to Section 123B.62(b) of the Act, on July 28, 2016, the District published a notice of the Projects, the total estimated amount of the Bonds (hereafter defined), and the total amount of District indebtedness in the Mahnomen Pioneer, the District’s official newspaper;

(d)       pursuant to Section 123B.62(c) of the Act, this Board did not receive a petition signed by more than 15 percent of the registered voters of the District within 30 days of this Board’s adoption of the Parameters Resolution, so the issuance of the Bonds (hereafter defined) is fully authorized pursuant to this Resolution;

(e)       it is necessary and expedient to the sound financial management of the District that the District issue its General Obligation Capital Facilities Bonds, Series 2016B, in a total aggregate principal amount of $605,000 (the “Bonds”), pursuant to the Act to provide financing for the Projects; and

(f)        this Board has retained PMA Securities, Inc. to act as an independent municipal advisor for the purpose of reviewing the pricing fairness associated with the purchase and subsequent reoffering of the Bonds.  The Board Chair and the District Superintendent have previously been authorized to execute an agreement with PMA Securities, Inc.  Therefore, it is determined that the District has retained an “independent financial advisor” in connection with such sale and has been authorized by Section 475.60, Subdivision 2(9) of the Act to negotiate the sale of the Bonds.  The actions of District staff and the District’s financial advisors in negotiating the sale of the Bonds are ratified and confirmed in all aspects.

            1.02.    Award to the Purchaser and Interest Rates.  The proposal of Robert W. Baird & Co. Incorporated (the “Purchaser”) to purchase the Bonds is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $595,597.90 (par amount of $605,000, plus original issue premium of $2,496.15, less original issue discount of $4,335.75, less underwriter’s discount of $7,562.50), for Bonds bearing interest as follows:

Year

Interest Rate

   

2019

   2.000%

2020

2.000

            Term Bonds due February 1, 2023 at 1.350%.

            Term Bonds due February 1, 2026 at 1.650%.

            Term Bonds due February 1, 2031 at 2.000%.

            1.03.    Purchase Contract.  The Board Chair and the District Superintendent are directed to execute a contract with the Purchaser on behalf of the District.

            1.04.    Terms and Principal Amounts of the Bonds.  The District will forthwith issue and sell the Bonds pursuant to the Act in the total principal amount of $605,000, originally dated September 26, 2016, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows:

Year

Amount

   

2019

$45,000

2020

  45,000

       

            Term Bonds due February 1, 2023 in the aggregate principal amount of $135,000.

            Term Bonds due February 1, 2026 in the aggregate principal amount of $145,000.

            Term Bonds due February 1, 2031 in the aggregate principal amount of $235,000.

            1.05.  Optional Redemption.  The District may elect on February 1, 2024, and on any date thereafter to prepay Bonds due on or after February 1, 2025.  Redemption may be in whole or in part and if in part, at the option of the District and in such manner as the District will determine.  If less than all Bonds of a maturity are called for redemption, the District will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid.  DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed.  Prepayments will be at a price of par plus accrued interest.

            1.06.  Mandatory Redemption.  The Term Bonds are subject to mandatory sinking fund redemption and shall be redeemed in part by lot at par plus accrued interest on the sinking fund installment dates and in the principal amounts as follows:

Sinking Fund Installment Date                                                       Principal Amount

                                                                                                         February 1,

                                                                                                         2023 Term Bonds

                    2021                                                                             $45,000

                    2022                                                                             45,000

                    2023 (maturity)                                                           45,000

                                                                                                        

February 1,

                                                                                                         2026 Term Bonds

                    2024                                                                             $50,000

                    2025                                                                             50,000

                    2026 (maturity)                                                           45,000

February 1,

                                                                                                         2031 Term Bonds

                    2027                                                                             $45,000

                    2028                                                                             45,000

                    2029                                                                             45,000

                    2030                                                                             50,000

                    2031 (maturity)                                                           50,000

The specific Term Bonds to be redeemed will be selected by lot by the Registrar (herein defined).  All prepayments will be at a price of par plus accrued interest.

            Section 2.        Registration and Payment.

            2.01.    Registered Form.  The Bonds will be issued only in fully registered form.  The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein.

            2.02.    Dates; Interest Payment Dates.  Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue.  The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2017, to the registered owners of record as of the close of business on the first day of the calendar month next preceding such interest payment date, whether or not that day is a business day.

            2.03.    Registration.  The District will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”).  The effect of registration and the rights and duties of the District and the Registrar with respect thereto are as follows:

                        (a)       Register.  The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged.

                        (b)       Transfer of Bonds.  Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, 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 that interest payment date.

                        (c)       Exchange of Bonds.  When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing.

                        (d)       Cancellation.  Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the District.

                        (e)       Improper or Unauthorized Transfer.  When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized.  The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.

                        (f)        Persons Deemed Owners.  The District and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid.

                        (g)       Taxes, Fees and Charges.  The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange.

                        (h)       Mutilated, Lost, Stolen or Destroyed Bonds.  If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the 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 evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the District and the Registrar must be named as obligees.  Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the District.  If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment.

                        (i)        Redemption.  In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law.  Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of any proceeding for the redemption of Bonds.  Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time.

            2.04.    Appointment of Initial Registrar.  The District appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar.  The Board Chair and the District Superintendent are authorized to execute and deliver, on behalf of the District, 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 authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar.  The District agrees to pay the reasonable and customary charges of the Registrar for the services performed.  The District reserves the right to remove the Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar.  On or before each principal or interest due date, without further order of this Board, the District Superintendent must transmit to the Registrar money sufficient for the payment of all principal and interest then due.

            2.05.    Execution, Authentication and Delivery.  The Bonds will be prepared under the direction of the District Superintendent and executed on behalf of the District by the signatures of the Board Chair and the District Superintendent, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals.  If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery.  Notwithstanding such execution, a Bond will not 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 a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution.  When the Bonds have been so prepared, executed and authenticated, the District Superintendent will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price.

            2.06.    Temporary Bonds.  The District may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond.  Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled.

            Section 3.        Form of Bond.

            3.01.    Form.  The Bonds will be printed or typewritten in substantially the form as attached hereto as EXHIBIT A.

            3.02.    Approving Legal Opinion.  The District Superintendent is authorized and directed to obtain a copy of the proposed approving legal opinion of Eckberg Lammers, P.C., Stillwater, Minnesota, Bond Counsel to the District, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond.

            Section 4.        Payment; Security; Pledges and Covenants.

            4.01.    Funds and Accounts.  (a)          Debt Service Fund.  The Bonds are payable from the General Obligation Capital Facilities Bonds, Series 2016B Debt Service Fund (the “Debt Service Fund”) created herein.  The Debt Service Fund shall be administered and maintained by the District Superintendent and District Finance staff as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the District.  The proceeds of the ad valorem taxes hereinafter levied by the District are pledged to the Debt Service Fund.  If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the District Finance staff will pay such principal or interest from the general fund of the District, and the general fund may be reimbursed for those advances out of the proceeds of the taxes levied by this Resolution, when collected.  

            (b)       Project Fund.  The proceeds of the Bonds, together with any other funds appropriated during the construction and equipping of the Projects, will be deposited in a separate project construction fund (the “Project Fund”), to be used solely to defray expenses of the Projects.  When the Projects are completed and the cost thereof paid, the Project Fund is to be closed and any balance in the fund is to be deposited in the Debt Service Fund.

            4.02.    Pledge of Tax Levy.  For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the District, which tax will be spread upon the tax rolls and collected with and as part of other general taxes of the District.  Such tax will be credited to the Debt Service Fund above provided and will be in the years and amounts attached hereto as EXHIBIT B.

            4.03.    Debt Service Coverage.  It is determined that the estimated aggregate collections of taxes will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds.  The tax levy herein provided is irrepealable until all of the Bonds are paid, provided that at the time the District makes its annual tax levies the District Superintendent or District Finance staff may certify to the Mahnomen County Auditor/Treasurer the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and said County Auditor/Treasurer will thereupon reduce the levy collectible during such year by the amount so certified.

            4.04.    Certificate as to Registration.  The District Superintendent is authorized and directed to file a certified copy of this Resolution with the Mahnomen County Auditor/Treasurer and to obtain the certificate required by Section 475.63 of the Act.

           

            Section 5.        Authentication of Transcript; Credit Enhancement.

            5.01.    District Proceedings and Records.  The officers of the District are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds certified copies of proceedings and records of the District relating to the Bonds and to the financial condition and affairs of the District, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the District as to the facts stated therein.

            5.02.    Certification as to Official Statement.  The Board Chair and the District Superintendent are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of said Official Statement.

            5.03.    Other Certificates.  The Board Chair and the District Superintendent are authorized and directed to furnish to the Purchaser at closing on the Bonds such certificates as are required as a condition of sale.  Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the District or incumbency of its officers, at the closing the Board Chair and the District Superintendent shall also execute and deliver to the Purchaser a suitable certificate as to the absence of material litigation, and the District Superintendent shall also execute and deliver a certificate as to payment for and delivery of the Bonds.

            5.04.    Payment of Costs of Issuance.  The District authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to the Registrar on the closing date for further distribution as directed by the Purchaser, or the Purchaser may directly forward payments of issuance expenses to the appropriate parties with the permission of the District.

            5.05.    Minnesota School District Credit Enhancement Program.  The District hereby covenants and obligates itself to notify the Minnesota Commissioner of Education of a potential default in the payment of principal and interest on the Bonds and to use the provisions of Minnesota Statutes, Section 126C.55, as amended (the “Credit Enhancement Act”), to guarantee payment of the principal and interest on the Bonds when due.  The District further covenants to deposit with the Registrar or any successor registrar/paying agent three days prior to the date on which a payment is due on the Bonds an amount sufficient to make that payment or to notify the Minnesota Commissioner of Education that it will be unable to make all or a portion of that payment.  The Registrar is authorized and directed to notify the Minnesota Commissioner of Education if it becomes aware of a potential default in the payment of principal or interest on the Bonds, or if on the day two business days prior to the date a payment is due on the Bonds, there are insufficient funds to make that payment on deposit with the Registrar.  The District acknowledges that as a result of its covenant to be bound by the provisions of the Credit Enhancement Act, the provisions of that section shall be binding as long as any Bonds remain outstanding.

            Section 6.        Tax Covenants.

            6.01.    Tax-Exempt Bonds.  The District covenants and agrees with the holders 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 subject to taxation under the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds.  To that end, the District will comply with all requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds.

            6.02.    No Rebate.   For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the District finds, determines, and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the District (and all subordinate entities of the District) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $15,000,000, all within the meaning of Section 148(f)(4)(D) of the Code.

            6.03.    Not Private Activity Bonds.  The District further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used in such a manner as to cause the Bonds to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code.

            6.04.    Qualified Tax-Exempt Obligations.  To qualify the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the District makes the following factual statements and representations:

                        (a)       the Bonds are not “private activity bonds” as defined in Section 141 of the Code;

                        (b)       the District designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code;

                        (c)       the reasonably anticipated amount of tax-exempt obligations (other than any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the District (and all subordinate entities of the District) during calendar year 2016 will not exceed $10,000,000; and

                        (d)       not more than $10,000,000 of obligations issued by the District during calendar year 2016 have been designated for purposes of Section 265(b)(3) of the Code.

            6.05.    Procedural Requirements.  The District will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this Section.

            Section 7.        Book-Entry System; Limited Obligation of District.

            7.01.    DTC.  The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof.  Upon initial issuance, the ownership of each such Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”).  Except as provided in this Section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC.

            7.02.    Participants.  With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the District, the Registrar will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of or interest on the Bonds.  The District and the Registrar may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes.  The Registrar will pay all principal of and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the District’s obligations with respect to payment of principal of or interest on the Bonds to the extent of the sum or sums so paid.  No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this Resolution.  Upon delivery by DTC to the District Superintendent of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.,” will refer to such new nominee of DTC; and upon receipt of such a notice, the District Superintendent will promptly deliver a copy of the same to the Registrar.

            7.03.    Representation Letter.  The District has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of and interest on the Bonds and notices with respect to the Bonds.  Any registrar subsequently appointed by the District with respect to the Bonds will agree to take all action necessary for all representations of the District in the Representation Letter with respect to the Registrar to be complied with at all times.

            7.04.    Transfers Outside Book-Entry System.  In the event the District, by resolution of this Board, determines that it is in the best interests of the persons having beneficial interest in the Bonds that they be able to obtain Bond certificates, the District will notify DTC, whereupon DTC will notify the Participants of the availability through DTC of Bond certificates.  In such event the District will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution.  DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the District and discharging its responsibilities with respect thereto under applicable law.  In such event, if no successor securities depository is appointed, the District will issue and the Registrar will authenticate Bond certificates in accordance with this Resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof.

            7.05.    Payments to Cede & Co.  Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of and interest on the Bond and notices with respect to the Bond will be made and given, respectively, in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter.

            Section 8.        Continuing Disclosure.

            8.01.    Execution of the Continuing Disclosure Certificate.  “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate, executed by the Board Chair and the District Superintendent and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof.

            8.02.    Compliance with Provisions of the Continuing Disclosure Certificate.  The District covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.  Notwithstanding any other provision of this Resolution, failure of the District to comply with the Continuing Disclosure Certificate will not be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under this Section.

            Section 9.        Defeasance.  When all Bonds and all interest thereon have been discharged as provided in this Section, all pledges, covenants and other rights granted by this Resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the District for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect.  The District may discharge all 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.  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 to the date of such deposit.

            The motion for the adoption of the foregoing resolution was duly seconded by Member VanDenEinde, and upon vote being taken thereon, the following voted in favor thereof:   DeVries, McArthur, Ose, Buck, Hanson and VanDenEinde. 

and the following voted against the same:    None

whereupon said resolution was declared duly passed and adopted.

Resolution Awarding Sale of Series 2016C Bonds

Member DeVries introduced the following resolution and moved its adoption:

RESOLUTION AWARDING THE SALE OF $690,000 GENERAL OBLIGATION TAX ABATEMENT BONDS, SERIES 2016C; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT

BE IT RESOLVED, by the School Board (the “Board”) of Independent School District No. 432 (Mahnomen Public Schools), State of Minnesota (the “District”), as follows:

            1.01.    Background.  It is determined that:

(a)       pursuant to a resolution adopted by this Board on July 11, 2016 (the “Abatement Resolution”), this Board approved a prospective property tax abatement covering the District’s share of real property taxes allocated to various parcels located within the District in the maximum amount of $900,000 (the “Abatement”), all pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815, as amended (the “Abatement Act”);

(b)       pursuant to Section 469.1813, Subdivision 5(b) of the Abatement Act, notice of a public hearing on the Abatement, which identified the properties for which the Abatement was under consideration and the total estimated amount of the Abatement, was published on June 30, 2016 in the Mahnomen Pioneer, the District’s official newspaper and a newspaper of general circulation in the District;

(c)       the proceeds of the Abatement are proposed to finance improvements to off-street parking options at the District’s High School and improve the parking lot and lighting for the parking lot at the District’s Elementary School (collectively, the “Projects”);

(d)       the District is authorized by the Abatement Act and Minnesota Statutes, Chapter 475, as amended (the “Municipal Bond Act”), to finance the Projects by the issuance of general obligation tax abatement bonds of the District payable from the Abatement; and

(e)       it is necessary and expedient to the sound financial management of the District that the District issue its General Obligation Tax Abatement Bonds, Series 2016C, in a total aggregate principal amount of $690,000 (the “Bonds”) pursuant to the Abatement Act and the Municipal Bond Act (collectively, the “Act”) to provide financing for the Projects;

(f)        specifically, the proceeds of the Bonds (hereafter defined) will finance public improvements that benefit the land underlying the Projects, as well as costs of issuance of the Bonds, as allowed by Section 469.1814, Subdivision 5 of the Abatement Act; and

(g)       this Board has retained PMA Securities, Inc. to act as an independent municipal advisor for the purpose of reviewing the pricing fairness associated with the purchase and subsequent reoffering of the Bonds.  The Board Chair and the District Superintendent have previously been authorized to execute an agreement with PMA Securities, Inc.  Therefore, it is determined that the District has retained an “independent financial advisor” in connection with such sale and has been authorized by Section 475.60, Subdivision 2(9) of the Act to negotiate the sale of the Bonds.  The actions of District staff and the District’s financial advisors in negotiating the sale of the Bonds are ratified and confirmed in all aspects.

            1.02.    Award to the Purchaser and Interest Rates.  The proposal of Robert W. Baird & Co. Incorporated (the “Purchaser”) to purchase the Bonds is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $677,408.25 (par amount of $690,000.00, less original issue discount of $3,966.75, less underwriter’s discount of $8,625.00), for Bonds bearing interest as follows:

            Term Bonds due February 1, 2021 at 1.150%.

            Term Bonds due February 1, 2024 at 1.450%.

            Term Bonds due February 1, 2027 at 1.750%.

            Term Bonds due February 1, 2031 at 2.000%.

            1.03.    Purchase Contract.  The Board Chair and the District Superintendent are directed to execute a contract with the Purchaser on behalf of the District.

            1.04.    Terms and Principal Amounts of the Bonds.  The District will forthwith issue and sell the Bonds pursuant to the Act in the total principal amount of $690,000, originally dated September 26, 2016, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing on February 1 in the years and amounts as follows:

            Term Bonds due February 1, 2021, in the aggregate principal amount of $175,000.

            Term Bonds due February 1, 2024, in the aggregate principal amount of $150,000.

            Term Bonds due February 1, 2027, in the aggregate principal amount of $150,000.

            Term Bonds due February 1, 2031, in the aggregate principal amount of $215,000.

            1.05.    Optional Redemption.  The District may elect on February 1, 2024 and on any date thereafter to prepay Bonds due on or after February 1, 2025.  Redemption may be in whole or in part and if in part, at the option of the District and in such manner as the District will determine.  If less than all Bonds of a maturity are called for redemption, the District will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid.  DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed.  Prepayments will be at a price of par plus accrued interest.

            1.06.  Mandatory Redemption.  The Term Bonds are subject to mandatory sinking fund redemption and shall be redeemed in part by lot at par plus accrued interest on the sinking fund installment dates and in the principal amounts as follows:

Sinking Fund Installment Date                                             Principal Amount

                                                                                               February 1,

                                                                                               2021 Term Bonds

                                                                                               2018                                                                                                                                                              $40,000

                                                                                               2019                                                                                                                                                     45,000

                                                                                               2020                                                                                                                                                 45,000

2021 (maturity)                                                45,000

                                                                                              

February 1,

                                                                                               2024 Term Bonds

                                                                                               2022                                                                                                                                                      $50,000

                                                                                               2023                                                                                                                                                         50,000

                                                                                               2024 (maturity)                                                                                                                                     50,000

February 1,

                                                                                               2027 Term Bonds

                                                                                               2025                                                                                                                                            $50,000

                                                                                               2026                                                                                                                                                      50,000

                                                                                               2027 (maturity)                                                                                                                                        50,000

February 1,

                                                                                               2031 Term Bonds

                                                                                               2028                                                                                                                                                     $50,000

                                                                                               2029                                                                                                                                                   55,000

                                                                                               2030                                                                                                                                                 55,000

                                                                                               2031 (maturity)                                                                                                                                      55,000

           

The specific Term Bonds to be redeemed will be selected by lot by the Registrar (herein defined).  All prepayments will be at a price of par plus accrued interest.

            Section 2.        Registration and Payment.

            2.01.    Registered Form.  The Bonds will be issued only in fully registered form.  The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein.

            2.02.    Dates; Interest Payment Dates.  Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue.  The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2017, to the registered owners of record as of the close of business on the first day of the calendar month next preceding such interest payment date, whether or not that day is a business day.

            2.03.    Registration.  The District will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”).  The effect of registration and the rights and duties of the District and the Registrar with respect thereto are as follows:

                        (a)       Register.  The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged.

                        (b)       Transfer of Bonds.  Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, 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 that interest payment date.

                        (c)       Exchange of Bonds.  When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing.

                        (d)       Cancellation.  Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the District.

                        (e)       Improper or Unauthorized Transfer.  When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized.  The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.

                        (f)        Persons Deemed Owners.  The District and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid.

                        (g)       Taxes, Fees and Charges.  The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange.

                        (h)       Mutilated, Lost, Stolen or Destroyed Bonds.  If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the 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 evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the District and the Registrar must be named as obligees.  Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the District.  If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment.

                        (i)        Redemption.  In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law.  Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of any proceeding for the redemption of Bonds.  Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time.

            2.04.    Appointment of Initial Registrar.  The District appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar.  The Board Chair and the District Superintendent are authorized to execute and deliver, on behalf of the District, 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 authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar.  The District agrees to pay the reasonable and customary charges of the Registrar for the services performed.  The District reserves the right to remove the Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar.  On or before each principal or interest due date, without further order of this Board, the District Superintendent must transmit to the Registrar money sufficient for the payment of all principal and interest then due.

            2.05.    Execution, Authentication and Delivery.  The Bonds will be prepared under the direction of the District Superintendent and executed on behalf of the District by the signatures of the Board Chair and the District Superintendent, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals.  If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery.  Notwithstanding such execution, a Bond will not 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 a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution.  When the Bonds have been so prepared, executed and authenticated, the District Superintendent will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price.

            2.06.    Temporary Bonds.  The District may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond.  Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled.

            Section 3.        Form of Bond.

            3.01.    Form.  The Bonds will be printed or typewritten in substantially the form as attached hereto as EXHIBIT A.

            3.02.    Approving Legal Opinion.  The District Superintendent is authorized and directed to obtain a copy of the proposed approving legal opinion of Eckberg Lammers, P.C., Stillwater, Minnesota, Bond Counsel to the District, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond.

            Section 4.        Payment; Security; Pledges and Covenants.

            4.01.    Funds and Accounts.  (a)          Debt Service Fund.  The Bonds are payable from the General Obligation Tax Abatement Bonds, Series 2016C Debt Service Fund (the “Debt Service Fund”) created herein.  The Debt Service Fund shall be administered and maintained by the District Superintendent and District Business staff as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the District.  The proceeds of the Abatement levied by the District described in Section 4.02 hereof are pledged to the Debt Service Fund.  If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the District will pay such principal or interest from the general fund of the District, and the general fund may be reimbursed for those advances out of the proceeds of the Abatement, when collected.

            (b)       Project Fund.  The proceeds of the Bonds, together with any other funds appropriated during the construction of the Projects, will be deposited in a separate project construction fund (the “Project Fund”), to be used solely to defray expenses of the Projects.  When the Projects are completed and the cost thereof paid, the Project Fund is to be closed and any balance in the fund is to be deposited in the Debt Service Fund.

            4.02.    Pledge of Abatement.  The Abatement is pledged to the Debt Service Fund to be used to pay principal of and interest on the Bonds.  There is further pledged to the Debt Service Fund the money derived from the levy of taxes, if any, pursuant to Section 4.03 hereof.  All amounts deposited in the Debt Service Fund are irrevocably pledged to the Bonds.  The Abatement is such that if collected in full it will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds.  As a result, it will not be necessary to impose a tax levy at this time to provide for the timely payment of the principal of and interest on the Bonds.

            4.03.    General Obligation Pledge.  For the prompt and full payment of the principal of and interest on the Bonds as the same respectively become due, the full faith, credit, and taxing powers of the District shall be and are hereby irrevocably pledged.  If the balance in the Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds, the deficiency shall be promptly paid out of money in the general fund of the District which is available for such purpose, and such general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient balance is available therein.  If necessary to provide for timely payment of the principal of and interest on the Bonds, or to reimburse the general fund of the District for money transferred from the general fund to pay principal of or interest on the Bonds, there shall be levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the District, which tax shall be spread upon the tax rolls and collected with and as part of other general taxes of the District.  Such tax revenues shall be credited to the Debt Service Fund.  Such taxes, if levied, shall be irrepealable so long as any of the Bonds are outstanding and unpaid, provided that the District reserves the right to reduce the levies in the manner and to the extent permitted by Section 475.61, Subdivision 3 of the Act.

            4.04.    Abatement Determinations.  It is determined that the Bonds are issued under the Act and that none of the proceeds of the Bonds shall be used for a purpose prohibited under Minnesota Statutes, Section 469.176, Subdivision 4g(b).  It is hereby further determined that, pursuant to authorization given under the Abatement Act: (i) the principal amount of the Bonds ($690,000) does not exceed the estimated maximum sum of the Abatement ($900,000, or 105% of the debt service on the Bonds, whichever is less); and (ii) the proceeds of the Bonds will be used to pay for the Projects and the costs of issuance with respect to the Bonds.

            4.05.    Certificate as to Registration.  The District Superintendent is authorized and directed to file a certified copy of this Resolution with the Mahnomen County Auditor/Treasurer and to obtain the certificate required by Section 475.63 of the Act.

           

            Section 5.        Authentication of Transcript.

            5.01.    District Proceedings and Records.  The officers of the District are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds certified copies of proceedings and records of the District relating to the Bonds and to the financial condition and affairs of the District, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the District as to the facts stated therein.

            5.02.    Certification as to Official Statement.  The Board Chair and the District Superintendent are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of said Official Statement.

            5.03.    Other Certificates.  The Board Chair and the District Superintendent are authorized and directed to furnish to the Purchaser at closing on the Bonds such certificates as are required as a condition of sale.  Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the District or incumbency of its officers, at the closing the Board Chair and the District Superintendent shall also execute and deliver to the Purchaser a suitable certificate as to the absence of material litigation, and the District Superintendent shall also execute and deliver a certificate as to payment for and delivery of the Bonds.

            5.04.    Payment of Costs of Issuance.  The District authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to the Registrar on the closing date for further distribution as directed by the Purchaser, or the Purchaser may directly forward payments of issuance expenses to the appropriate parties with the permission of the District.

            5.05.    Minnesota School District Credit Enhancement Program.  The District hereby covenants and obligates itself to notify the Minnesota Commissioner of Education of a potential default in the payment of principal and interest on the Bonds and to use the provisions of Minnesota Statutes, Section 126C.55, as amended (the “Credit Enhancement Act”), to guarantee payment of the principal and interest on the Bonds when due.  The District further covenants to deposit with the Registrar or any successor registrar/paying agent three days prior to the date on which a payment is due on the Bonds an amount sufficient to make that payment or to notify the Minnesota Commissioner of Education that it will be unable to make all or a portion of that payment.  The Registrar is authorized and directed to notify the Minnesota Commissioner of Education if it becomes aware of a potential default in the payment of principal or interest on the Bonds, or if on the day two business days prior to the date a payment is due on the Bonds, there are insufficient funds to make that payment on deposit with the Registrar.  The District acknowledges that as a result of its covenant to be bound by the provisions of the Credit Enhancement Act, the provisions of that Section shall be binding as long as any Bonds remain outstanding.

            Section 6.        Tax Covenants.

            6.01.    Tax-Exempt Bonds.  The District covenants and agrees with the holders 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 subject to taxation under the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds.  To that end, the District will comply with all requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds.

            6.02.    No Rebate.  For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the District finds, determines, and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the District (and all subordinate entities of the District) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $15,000,000, all within the meaning of Section 148(f)(4)(D) of the Code.

            6.03.    Not Private Activity Bonds.  The District further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used in such a manner as to cause the Bonds to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code.

            6.04.    Qualified Tax-Exempt Obligations.  To qualify the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the District makes the following factual statements and representations:

                        (a)       the Bonds are not “private activity bonds” as defined in Section 141 of the Code;

                        (b)       the District designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code;

                        (c)       the reasonably anticipated amount of tax-exempt obligations (other than any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the District (and all subordinate entities of the District) during calendar year 2016 will not exceed $10,000,000; and

                        (d)       not more than $10,000,000 of obligations issued by the District during calendar year 2015 have been designated for purposes of Section 265(b)(3) of the Code.

            6.05.    Procedural Requirements.  The District will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this Section.

            Section 7.        Book-Entry System; Limited Obligation of District.

            7.01.    DTC.  The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof.  Upon initial issuance, the ownership of each such Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”).  Except as provided in this Section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC.

            7.02.    Participants.  With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the District and the Registrar will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of or interest on the Bonds.  The District and the Registrar may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes.  The Registrar will pay all principal of and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the District’s obligations with respect to payment of principal of or interest on the Bonds to the extent of the sum or sums so paid.  No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this Resolution.  Upon delivery by DTC to the District Superintendent of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.,” will refer to such new nominee of DTC; and upon receipt of such a notice, the District Superintendent will promptly deliver a copy of the same to the Registrar.

            7.03.    Representation Letter.  The District has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of and interest on the Bonds and notices with respect to the Bonds.  Any registrar subsequently appointed by the District with respect to the Bonds will agree to take all action necessary for all representations of the District in the Representation Letter with respect to the Registrar to be complied with at all times.

            7.04.    Transfers Outside Book-Entry System.  In the event the District, by resolution of this Board, determines that it is in the best interests of the persons having beneficial interest in the Bonds that they be able to obtain Bond certificates, the District will notify DTC, whereupon DTC will notify the Participants of the availability through DTC of Bond certificates.  In such event the District will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution.  DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the District and discharging its responsibilities with respect thereto under applicable law.  In such event, if no successor securities depository is appointed, the District will issue and the Registrar will authenticate Bond certificates in accordance with this Resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof.

            7.05.    Payments to Cede & Co.  Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of and interest on the Bond and notices with respect to the Bond will be made and given, respectively, in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter.

            Section 8.        Continuing Disclosure.

            8.01.    Execution of the Continuing Disclosure Certificate.  “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate, executed by the Board Chair and the District Superintendent and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof.

            8.02.    Compliance with Provisions of the Continuing Disclosure Certificate.  The District covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.  Notwithstanding any other provision of this Resolution, failure of the District to comply with the Continuing Disclosure Certificate will not be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under this Section.

            Section 9.        Defeasance.  When all Bonds and all interest thereon have been discharged as provided in this Section, all pledges, covenants and other rights granted by this Resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the District for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect.  The District may discharge all 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.  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 to the date of such deposit.

Passed and adopted by the School Board of Independent School District No. 432 (Mahnomen Public Schools), State of Minnesota, this 12th day of September, 2016.

            The motion for the adoption of the foregoing resolution was duly seconded by Member Hanson, and upon vote being taken thereon, the following voted in favor thereof:  DeVries, McArthur, Ose, Buck, Hanson and VanDenEinde. 

           

and the following voted against the same:   None

whereupon said resolution was declared duly passed and adopted.

White Earth Head Start Catering Agreement

MOTION BY Hanson to approve the White Earth Head Start Catering Agreement for the 2016-2017 program year as presented.  SECONDED By Ose.  Vote.  u/c

PERSONNEL TOPICS-

Memorandum of Understanding (MOU) Early Childhood/Pre-Kindergarten Teacher

MOTION BY McArthur to approve the Memorandum of Understanding (MOU) with Ed MN - Mahnomen on the hiring of full-time Early Childhood/Pre-Kindergarten Teachers.  SECONDED BY Hanson.    VOTE-u/c

ADJOURNMENT-

MOTION BY Buck to adjourn the meeting at 7:20 p.m.   SECONDED BY McArthur.  VOTE-u/c

 

RESPECTFULLY SUBMITTED:                                        APPROVED BY:

____________________________                                        ______________________________

Judy Hanson, Clerk                                                                Presiding Officer on date of approval Public School District #432            

Home School Board Board Minutes School board Minutes September 12, 2016