Ely City Council minute of Sept. 2

DRAFT MEETING MINUTES<BR><BR>Council Chambers<BR><BR>Ely, Minnesota<BR><BR>Tuesday, September 2, 2008<BR><BR>6:30 P.M. Regular Meeting<BR><BR>Ely City Council<BR><BR>Regular meeting of the Ely City Council was called to order at 6:30 P.M. by Mayor Charles J. Novak.<BR><BR>PRESENT: Council members Debeltz, Lindroos, Nikkola, Omerza, Sheddy, Zupec, Mayor Novak (7)<BR><BR>ABSENT: None (0)<BR><BR>A quorum was determined.<BR><BR>Moved by Zupec supported by Debeltz, that the minutes of the regular meeting of August 19th and special meeting of August 26th, be approved without reading. Carried unanimously. Minutes to stand as recorded.<BR><BR>The following additions were added to tonight's agenda: Council member Sheddy;<BR><BR>Discussion on City of Ely Booth scheduled for Harvest Moon Festival, September 5th - 7th. Council referred to VIII. New Business, Item F on tonight's agenda; Council member Debeltz. - a thank you to the public works department and EUC, for assisting in this weekend's softball tournament. Council member Debeltz offered his thanks to the City Public Works and EUC Departments for their assistance on the Labor Day Weekend Softball Tournament. <BR><BR>Mayor Novak noted that there will be a Special Meeting of the Ely City Council scheduled for Thursday, September 11th, 6:00 P.M. Council Chambers of the Ely City Hall, to address canvassing the local primary election results and any other pertinent city business that may arise. This meeting will be held prior to the EEDA monthly meeting scheduled for September 11th, 6:30 P.M. Council member Omerza noted that she will be late in arriving for the Special Council Meeting and EEDA Meeting. <BR><BR>Mayor Novak noted that Tuesday, September 9th, is Primary Election Day, encouraging members of the public to exercise their right to vote.<BR><BR>The following consent agenda items were brought before the Council for approval:<BR><BR>State of Minnesota - Department of Financial and Employee Relations - City Compliance with Local Government Pay Equity Act ( as submitted by Paul Ness, consultant) - INFORMATION;<BR><BR>Mn. Department of Employment and Economic Development - Health Care Facilities Revenue Note, Series 2008 ( Ely Bloomenson Community Hospital and Nursing Home Cap. Project - $14,000.00 ( referred to Mary Frances Skala) - INFORMATION;<BR><BR>Fryberger, Buchanan, Smith and Frederick, P.A. - Waiver of Conflict of Interest - City of Ely, MN - Tax Exempt Financing for Ely Bloomenson Community Hospital and Nursing Home Corp. - ( Mayor and Clerk-Treasurer authorized to execute);<BR><BR>St. Louis County - Truth In Taxation Hearing - Ely City Hall Council Chambers - Monday, December 1st, 5:30 P.M.; adjourned to Monday, December 8th, 5:30 P.M. if necessary;<BR><BR>Kerry Perushek, candidate for Ely City Council member - public notification to City of announcement that he will not be running for Ely City Council (INFORMATION);<BR><BR>Anna Cheeney - request to block off one-half Avenue, 7th and Camp Street for September 27th Auction ( to coordinate with public works / police department - auctioneer to furnish City copy of license and insurance);<BR><BR>Ely Chamber of Commerce - 15th Annual Harvest Moon Festival, September 5th - 7th - Whiteside Park ( city in kind services as in past);<BR><BR>Klun Law Firm - Storefront Loan Subordination Agreement ( Mayor/Clerk-Treasurer authorized to execute per City Attorney recommendation);<BR><BR>Donald Rausch, Wells Fargo Branch Manager - request to be appointed to Chapman Street Redevelopment Committee;<BR><BR>Fire Chief Lou Gerzin - request to attend 2008 Mn. Fire Chiefs Association Annual Conference - St. Cloud, October 16th - 18th;<BR><BR>Library Director Rachel Heinrich - recommended increase rates for Community Center rentals, effective January 1, 2009;<BR><BR>St. Louis County - classification of State Tax Forfeited Lands ( refer to Planning and Zoning Commission to review / recommendation to Council)<BR><BR>Council member Zupec noted that pertaining to item #9 listed above, the Chapman Street Redevelopment Committee will have an "organization" meeting on Wednesday, October 8, 2008, 6:30 P.M. in the Council member's office, basement floor of the Ely City Hall.<BR><BR>Moved by Zupec supported by Nikkola, that above items be approved and ordered filed. Carried unanimously.<BR><BR>George Eilertson requested placement on tonight's agenda regarding the City of Ely's intent to enter into GO Obligation Bonds for capital equipment purchase. He noted that he had walked through the financing, rates and terms with the City Operations Director and City Budget Committee prior, and proceeded to review with Ely City Council member. The term would be ten years from the date of issuance, and if proper actions are taken tonight, the bonds would be dated October 1, 2008, average rate being 3.7%. Mayor Novak noted that the average annual payment of bond would be what the City is currently now spending in the public works budget for equipment replacement; that this would be new tax money, but equipment purchased will replace the current unsafe, dilapidated equipment in this department and the utilities. <BR><BR>Matter of information.<BR><BR>Representatives from the Ely Greenstone Public Arts Committee requested placement on tonight's agenda, thanking the Mayor and Council for allowing them to utilize the Miner's Dry Building for their recent Juried Art Display, also thanking City Operations Director Harold Langowski and his crew for their assistance. Vice Chair of the Committee Anne Swenson addressed the Council as to the condition of the Captain's Dry Building with building endangered of being lost. She informed the Council that members of the Committee had toured the area with Brad Ashford, State Senator from Nebraska, who would be willing to work with Senator Tom Bakk to seek what type of financial assistance would be available to assist the City with preservation at this site. The Ely Greenstone Public Arts Committee is requesting the following from the City:<BR><BR>To be able to keep current art materials in the Miner's Dry Building;<BR><BR>Large display case ( Jerry Fink would like to donate to group) to be housed securely in shaft house;<BR><BR>Repair of the glass mine levels display case. <BR><BR>Artist Mike Sinesio is looking at a tribute to the men who died in five mines within the Ely area; tribute being the carving of a life size miner, with name plaque to erect in that immediate area.<BR><BR>Moved by Debeltz supported by Omerza, that the City of Ely approve above requests including the erection of a memorial on the Pioneer Mining Property, with city employees to assist with this project as needed. Carried unanimously.<BR><BR>Council member Sheddy questioned the group whether the Ely Greenstone Public Arts Committee would be interested in joint ownership of the buildings in that area in the near future. Committee member Anne Swenson reported that the committee has been talking to a group at this time, in hopes of raising funds for the repair of the Captain's Dry. Mayor Novak also noted that the City would need to check the legality as to whether or not the City could legally allow joint ownership of this property, as it was given to the City by the mining company. The City Attorney will research the possibility and report back to the Council with his findings.<BR><BR>Mr. Jim Belehar and Wendy Varey, representatives of the Ely V.F.W. Post #2717 requested placement on tonight's agenda, requesting Council approval to utilize the Semer's Park and Pavilion for their 2009 Cardboard Boat Regatta, which is scheduled for Saturday, July 18, 2009. They are also requesting a license to sell beer at this event, under the same terms as the 2008 event. Moved by Debeltz supported by Nikkola, that request be approved, with coordination with the appropriate city departments and proper application and paperwork for the beer garden.<BR><BR>Carried unanimously.<BR><BR>Mike Hillman was listed under requests to appear before council on tonight's agenda to update Council members as to the status of his grant application to the USX Foundation for funding for the former Pioneer Mine Site. Clerk-Treasurer Terri Boese reported that Mike Hillman will not be at tonight's meeting, and has not rescheduled for another date as of this time. Council member Sheddy questioned whether or not the City has seen any drafts of grant applications, with the Clerk-Treasurer responding, no.<BR><BR>Mayor Novak reported on behalf of the Ely Rehab/Storefront Renovation Committee Meeting of August 20th: the committee has provided Council members with an updated Storefront Renovation Loan Application, of which they are recommending Council approval of. Moved by Sheddy supported by Nikkola, that the City of Ely approve of updated Storefront Renovation Loan Application Form, as presented. Carried unanimously.<BR><BR>Mayor Novak reported that the Community Joint Powers Board had met last week, to discuss the proposed EADA Executive Director job description and the accountability thereof to the various funding authorities. The revised job description has been modified to reflect that the Director reports to the EADA Executive Board, with objectives being directly under the Community Joint Powers Board. This would allow the funding authorities to have a say in the selection of funding sources. Mayor Novak reported that the EADA will be meeting on Wednesday, September 3rd, 1:00 P.M. and he will be unable to attend, and will be requesting a Council member replacement to sit in for him. Council member Omerza commented that the last Joint Powers Board Meeting was extremely productive, with great comments from everyone there. Matter of information.<BR><BR>Council member Nikkola reported that the City Budget Committee has been meeting on a regular basis, being a "daunting task" in putting together a budget that will provide services to the community; the State has put the City backwards $340,000 which now has to be made up. Matter of information.<BR><BR>Council member Sheddy reported on behalf of the Planning and Zoning Commission; at the last regular meeting the Commission reviewed the communication from St. Louis County regarding classification of State Tax Forfeited Lands, noting that the property in question would have no major benefit to the City at this time. Matter of information.<BR><BR>Mayor Novak recommended that the September 30th Regular Monthly Ely City Council Study Session, be dedicated for discussion of current and proposed City Budgets, with City Department Heads requested to attend this budgetary session. Matter of information.<BR><BR>City Attorney Bentz presented Council members with proposed Charter amendments for the November election ballot. Moved by Lindroos supported by Nikkola, that the Ely City Council approve placing this matter on the City ballot for the November General Election. Carried unanimously.<BR><BR>Clerk-Treasurer Boese requested Council approval in the payment of City bills and payroll for August 2008, totaling: $553,372.91; EUC bills and payroll for August 2008, totaling: $734,390.30. Moved by Debeltz supported by Zupec, that bills and payroll be allowed and paid. Carried unanimously.<BR><BR>City Operations Director Harold Langowski, provided Council members with several sample letters received on Farm Credit System's Mission Related Investment Authority. Rural community economic development is dependent on having broader financing tools with provide greater capital capacity and long term fixed rate financing availability; allowing for locally led economic development. Moved by Zupec supported by Debeltz, that the City of Ely approve support letter as presented. Moved by Zupec supported by Debeltz, that motion be restated to reflect that the City of Ely approve the sample support letter draft #2, as template to pattern City's letter after. Carried unanimously.<BR><BR>The following EUC Consent Agenda items were presented:<BR><BR>Approve EUC participation in the Salvation Army's HeatShare Program;<BR><BR>Authorize the Operations Director, any commissioner and supervisors to attend Minnesota Power's Annual Municipal Customer Meeting on Wednesday, September 24, 2008 in Grand Rapids;<BR><BR>Recommend purchase of 8 fire hydrants and associated valves, piping and fittings from Minnesota Pipe and Equipment for $19,426.13;<BR><BR>Recommend purchase of overhead triplex and overhead service wire from Border States for $4,508.78;<BR><BR>Approve the Chamber of Commerce utility service requests for the Harvest Moon Festival;<BR><BR>Approve payment of the Minnesota Power July Invoice for $140,267.40;<BR><BR>Approve payment of the KBM Inc. Invoice #070815 for the Burntside Line for $710.00 and Invoice #070816 for Feeder 6 for $2,395.00;<BR><BR>Approve payment of the Environmental Toxicity Control Inc. Invoice #2-8-115 for $1,250.00 for toxicity testing.<BR><BR>Moved by Debeltz supported by Zupec, that above items be approved and ordered filed. Carried unanimously.<BR><BR>Claims for payment were received from the following:<BR><BR>Paul Ness, Consultant - Hiring Assistance for Officer Assistant/Dispatcher to the Police and Clerk-Treasurer Offices - $594.00;<BR><BR>RLK Inc.<BR><BR>Harvey / Conan Utility - Improvements / 3rd Avenue East Sewer Improvements - Partial Payment Estimate No. 3 - Leustek and Sons Inc. - $83,688.22 * contingent upon EUC review and approval;<BR><BR>Harvey / Conan Alley Utility Improvements - 3rd Avenue East Sewer - Change Order No. 1 - increase of $32,482.00;<BR><BR>US Bank - Ely General Obligation Crossover Refunding Bond of 2003 - $14,810.00;<BR><BR>WSB and Associates - Change Order #6 - Ely Airport Runway Safety Area - Leustek and Sons - Reduction of $13,440.90 * contingent upon review and approval by Airport Commission;<BR><BR>Klun Law Firm<BR><BR>Professional services - Inv. #14064 - General Matters - $71.40;<BR><BR>Inv. #14065 - Leustek Claim for Idle Equipment at Airport Project - $341.55;<BR><BR>Inv. #14066 - New Pamida Store - $524.70;<BR><BR>Inv. #140068 - Sale to Duluth Metals - $467.14<BR><BR>Moved by Zupec supported by Debeltz, that above claims be approved and ordered filed. Carried unanimously.<BR><BR>Communication was received from Dick Pula, President, Power Electric, informing the City that Paul Schurke and himself are co-hosting the Winter Campers Rendevous in Ely on October 24th - 26th, at the VCC. This event will be the largest gathering of winter tent campers in North America for 2008, and will feature the resources of the BWW, Ely and the outdoor people that have made this area famous for winter out of door activities. They are projecting to have in excess of 100 winter tents and would like to expose people to the possibilities and options that winter camping and tents will provide, with VCC being the main gathering area. They are also requesting the use of Whiteside Park for tents as this would give interested parties a chance to drive by or stop even if they are not attending the rendeveous. It would allow people in tents to be nearer the downtown resources of Ely. Moved by Debeltz supported by Nikkola, that request to utilize Whiteside Park be approved, to coordinate with City Operations Director Harold Langowski. Carried unanimously. <BR><BR>Moved by Omerza supported by Zupec, that the Council waive the readings in their entirety, of all ordinances and resolutions on tonight's agenda. Carried unanimously.<BR><BR>Council member Sheddy reported on the status of the proposed new phase of East Spaulding Addition residential building lots ( currently eleven lots to be platted) presenting Council members with plat map whereby Lots 11 and 12 will be merged into one building lot. Moved by Sheddy supported by Zupec, that the City of Ely accept map as presented. Carried unanimously.<BR><BR>Moved by Sheddy supported by Zupec, that the Mayor and Clerk-Treasurer be authorized to sign above plat, and that the City Attorney be directed to draft up the necessary ordinance for Council review and adoption, pertaining to above building lots to include the prevailing covenants for sale of land. Carried unanimously.<BR><BR>Mayor Novak had placed a communication on tonight's agenda under New Business, pertaining to resolution for bonding, of which this time he will dispense of, as this matter had been taken care of earlier in tonight's meeting by George Eilertson.<BR><BR>Council member Nikkola offered the following resolution: 2008 - 33<BR><BR>RESOLUTION PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF $740,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2008A; ESTABLISHING THE TERMS AND FORM THEREFOR; AND AWARDING THE SALE THEREOF.<BR><BR>RESOLUTION NO. 2008-33<BR><BR>BE IT RESOLVED, by the City Council (the "Council") of the City of Ely, located in St. Louis County, Minnesota (the "Issuer"), as follows:<BR><BR> Section 1. Purpose and Authorization.<BR><BR> 1.01 Recitals. <BR><BR> A. Pursuant to authority contained in Minnesota Statutes, Section 412.301 (the "Act"), the Issuer is authorized to issue its certificates of indebtedness to provide funds for the purchase of capital equipment having have an expected useful life at least as long as the term of the certificates of indebtedness.<BR><BR> B. Since the amount of Certificates exceeds 0.25 percent of the market value of taxable property in the City, the Council adopted Resolution 09-07, entitled "Resolution Determining the Necessity to Issue Not to Exceed $740,000 General Obligation Equipment Certificates of Indebtedness, Series 2008A" (the "Intent Resolution"). The Intent Resolution was published in The Ely Echo, the Issuer's official newspaper, on August 23, 2008.<BR><BR> 1.02 Findings. <BR><BR> A. The Issuer has determined that it is necessary, expedient and in the best interest of the residents of the Issuer that the Issuer purchase certain items of capital equipment having an expected useful life of at least ten years (the "Project") and that the Issuer issue and sell its $740,000 General Obligation Equipment Certificates of Indebtedness, Series 2008A (the "Certificates") in order to finance the Project.<BR><BR> B. No petition asking for an election on the issuance of the Certificates was filed with the Clerk-Treasurer within the ten day period following publication of the Intent Resolution.<BR><BR> C. All acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed precedent to the issuance of the Certificates having been done, having happened and having been performed in regular and due form, time and manner as required by law, it is necessary for this Issuer to establish the form and terms of the Certificates, to provide for the security thereof, and to provide for the issuance of the Certificates forthwith.<BR><BR> 1.03 Ratification. The actions of the Issuer's staff taken with respect to the sale of the Certificates are ratified and approved.<BR><BR> 1.04 Bonds Previously Sold. The Issuer elects to apply the exception to the public sale requirement contained in Minnesota Statutes, Section 475.60, Subdivision 2(2) and will not sell obligations pursuant to this exception in an amount exceeding $1,200,000 during the 12-month period ending October 31, 2008.<BR><BR>1.05 Sale. <BR><BR> A. The Issuer has received an offer for the purchase of the Certificates from Northland Securities, Inc. of Minneapolis, Minnesota (the "Purchaser") at a cash price of $725,496.00 upon the terms and conditions hereafter specified in this Resolution. The Issuer, after due consideration, finds such offer reasonable and proper and favorable to the Issuer, and the offer of the Purchaser is hereby accepted. <BR><BR> B. The Mayor and the Clerk-Treasurer are hereby authorized and directed to execute on the part of the Issuer a contract for the sale of the Certificates in accordance with the Purchaser's proposal. All actions of the Mayor and the Clerk-Treasurer with regard to the sale of the Certificates are hereby ratified and approved.<BR><BR> Section 2. Terms of the Certificates.<BR><BR> 2.01 Designation; Denominations; Maturities; Interest Rates. <BR><BR> A. The Certificates to be issued hereunder shall be issued as fully-registered bonds designated the $740,000 General Obligation Equipment Certificates of Indebtedness, Series 2008A, dated as of October 1, 2008, as the date of original issue, issued in the denomination of $5,000, or any integral multiple thereof, in fully registered form and lettered and numbered R-1 and upward. <BR><BR> B. The Certificates shall mature on February&#160;1 in the years and amounts stated below and shall bear interest from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for, or, if no interest has been paid or provided for, from the date of original issue until paid at the rates per annum set forth below opposite such years and amounts, as follow: <BR><BR>C. The maturities of the Certificates, together with the maturities of all other outstanding general obligation bonds of the Issuer, meet the requirements of Section 475.54 of the Act.<BR><BR> 2.02 Interest Payment Dates; Record Date. <BR><BR> A. The Certificates shall bear interest at the annual rates stated therefor in Section 2.01. The interest shall be payable semiannually on February&#160;1 and August&#160;1 in each year (each herein referred to as an "Interest Payment Date") commencing on August&#160;1, 2009. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to the rules of the Municipal Securities Rulemaking Board. Interest will be payable in the manner set forth in the form of Certificate and this Section.<BR><BR> B. The Bond Registrar designated below shall make all interest payments with respect to the Certificates by check or draft mailed to the person in whose name each Certificate is registered (the "Holder") and in each case at the address shown on the bond registration records maintained by the Bond Registrar at the close of business on the 15th day (whether or not on a business day) of the calendar month next preceding the Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date fixed for the payment of such defaulted interest (the "Special Record Date"). The Special Record Date shall be fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest and notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten (10) days prior thereto. The term "Holder" shall also include those lawfully entitled to take actions on behalf of the beneficial owners of the Certificates for purposes of any consent or approvals given by Holders.<BR><BR> C. Term Bonds. The Certificates maturing on February 1 in the years 2012, 2014, 2016 and 2018 shall be subject to mandatory redemption prior to maturity pursuant to the requirements of this Section 2.01C at a redemption price equal to the stated principal amount thereof plus interest accrued thereon to the redemption date, without premium. The Bond Registrar, as designated below, shall select for redemption, by lot or other manner deemed fair, on February 1 in each of the following years the following stated principal amounts:<BR><BR> For Certificates maturing on February 1, 2012 (the "2012 Term Certificates"):<BR><BR>Year Amount<BR><BR>2011 $75,000<BR><BR>2012 $80,000*<BR><BR>* Final Maturity<BR><BR> For Certificates maturing on February 1, 2014 (the "2014 Term Certificates"):<BR><BR>Year Amount<BR><BR>2013 $80,000<BR><BR>2014 $80,000*<BR><BR>* Final Maturity<BR><BR> For Certificates maturing on February 1, 2016 (the "2016 Term Certificates"):<BR><BR>Year Amount<BR><BR>2015 $85,000<BR><BR>2016 $90,000*<BR><BR>* Final Maturity<BR><BR> For Certificates maturing on February 1, 2018 (the "2018 Term Certificates"):<BR><BR> dYear Amount<BR><BR>2017 $90,000<BR><BR>2018 $95,000*<BR><BR>* Final Maturity<BR><BR>2.03 Redemption. A. The Certificates maturing after February 1, 2016, shall each be subject to redemption and prepayment at the option of the Issuer on February 1, 2016, and on any day thereafter, in whole or in part, and if in part, at the option of the Issuer and in such manner as the Issuer shall determine at a price of par plus accrued interest to the date of redemption.<BR><BR>B. In the event any of the Certificates are called for redemption, notice thereof identifying the Certificates to be redeemed will be given by the Bond Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) at least 30 days but not more than 60 days prior to the date fixed for redemption to the registered owner of each Certificate to be redeemed at the address shown on the registration books kept by the Bond Registrar; provided however, that so long as the Certificates are registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), notice of redemption shall be given in accordance with the terms of the Representation Letter hereinafter described. Failure to give notice by mail to any registered owner, or any defect therein, will not affect the validity of any proceeding for the redemption of Certificates not affected by such defect or failure. Certificates 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.<BR><BR>C. If less than all the Certificates of a maturity are called for redemption while the Certificates are registered in the name of Cede & Co., the Issuer or the Bond Registrar designated below will notify DTC 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 interest in such maturity to be redeemed. If less than all the Certificates of a maturity are called for redemption and the Certificates are not registered in the name of Cede & Co., the Bond Registrar will determine by lot or other manner deemed fair, the amount of each maturity to be redeemed. All prepayments shall be at a price equal to the principal amount thereof plus accrued interest.<BR><BR>Section 3. Registration; Global Book Entry System.<BR><BR>3.01 Designation of Bond Registrar. The Issuer hereby appoints Northland Trust Services, Inc., Minneapolis, Minnesota as registrar, authenticating agent and transfer agent for the Certificates (such bank or its successors is herein referred to as the "Bond Registrar"), and shall do so until a successor Bond Registrar is duly appointed, all pursuant to a contract which the Issuer and the Bond Registrar shall execute which is consistent herewith and which the Mayor and Clerk-Treasurer are hereby authorized to execute and deliver. A successor Bond Registrar shall be a bank or trust company eligible for designation as bond registrar pursuant to the Act. The terms of the appointment of the successor Bond Registrar and its duties shall be specified in a contract between the Issuer and such successor Bond Registrar that is consistent herewith and that the Mayor and Clerk-Treasurer are hereby authorized to execute and deliver. The Bond Registrar, which may act through an agent, shall also serve as paying agent until and unless a successor paying agent is duly appointed. The Bond Registrar shall pay principal and interest on the Certificates to the registered Holders (or record Holders) of the Certificates in the manner set forth herein. The Issuer agrees to pay the reasonable and customary charges for the services of such Bond Registrar.<BR><BR>3.02 Designation of Depository. DTC, a Securities and Exchange Commission designated depository, a limited purpose New York trust company, a member of the Federal Reserve System, and a "clearing corporation" within the meaning of the New York Uniform Commercial Code, is designated as the depository (the "Depository") with respect to the Certificates.<BR><BR>3.03 Authentication of Certificates. No Certificate shall be valid or obligatory for any purpose unless or until either (i) the Bond Registrar's authentication certificate on such Certificate, substantially set forth in Section 4.01 hereof, shall have been duly executed by an authorized representative of the Bond Registrar or (ii) the Certificates have been manually executed by at least one officer of the Issuer. Authentication certificates on different Certificates need not be signed by the same representative. The Bond Registrar shall authenticate each Certificate by execution of the Certificate of Authentication on the Certificate and shall date each Certificate in the space provided as of the date on which the Certificate is registered. For purposes of delivering the original Certificates, the Bond Registrar shall insert as the date of registration the date of original issue. The executed Authentication Certificate or the manual signature of at least one officer of the Issuer on each Certificate shall be conclusive evidence that it has been authenticated and delivered under this Resolution.<BR><BR>3.04 Bond Register; Transfer; Exchange. <BR><BR>A. The Issuer shall cause to be kept by the Bond Registrar at its principal office, a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Issuer shall provide for the registration of the Certificates and the registration of transfers of the Certificates entitled to be registered or transferred as herein provided. In the event of the resignation or removal of the Bond Registrar or its incapability of acting as such, the bond registration records shall be maintained at the office of the successor Bond Registrar as may be appointed by the Issuer. <BR><BR>B. Upon surrender for transfer of any Certificate at the principal corporate office of the Bond Registrar, the Issuer shall execute, if required by law or this Resolution, and the Bond Registrar shall authenticate, if required by law or this Resolution, date (in the space designated Date of Registration) and deliver, in the name(s) of the designated transferee or transferees, one or more new Certificates of the like aggregate principal amount having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Certificate may be registered in blank or in the name of "bearer" or similar designation. Transfer of a Certificate may be made on the Issuer's books by the registered owner in person or by the registered owner's attorney duly authorized in writing. Transfers shall be subject to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. The Issuer and the Bond Registrar shall not be required to make any transfer or exchange of any Certificates called for redemption or to make any such exchange or transfer of the Certificates during the 15 days next preceding the date of the first publication or the mailing (if there is no publication) of notice of redemption in the case of a proposed redemption of the Certificates.<BR><BR>C. Every Certificate presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof, with signature guaranteed, or by the registered Holder's attorney duly authorized in writing, and shall include written instructions as to the details of the transfer of the Certificate. When any Certificate is presented to the Bond Registrar for transfer, the Bond Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Certificate or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Bond Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.<BR><BR>D. At the option of the Holder, replacement Certificates may be exchanged for Certificates of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Certificates to be exchanged at the principal office of the Bond Registrar. Whenever any Certificates are so surrendered for exchange, the Issuer shall execute (if required by law or this Resolution), and the Bond Registrar shall authenticate (if required by law or this Resolution), date (in the space designated Date of Registration) and deliver the replacement Certificates which the Holder making the exchange is entitled to receive.<BR><BR>E. All Certificates surrendered upon any exchange or transfer provided for in this Resolution shall be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the Issuer. <BR><BR>F. Each Certificate delivered upon transfer of or in exchange for or in lieu of any other Certificate shall carry all of the rights to interest, accrued and unpaid and to accrue, which are carried by such other Certificate. All Certificates delivered in exchange for or upon transfer of Certificates shall be valid general obligations of the Issuer evidencing the same debt, shall be entitled to the same benefits under this Resolution as the Certificates surrendered for such exchange or transfer, and shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Certificates.<BR><BR>G. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Certificate and any legal or unusual costs regarding transfers and lost bonds.<BR><BR>H. Certificates registered in the name of Cede & Co. may not after their original delivery, be transferred or exchanged except in accordance with the terms and conditions of the Representation Letter and:<BR><BR>(i) upon exchange of a Certificate after a partial redemption, if provided in Section 2.03 of this Resolution;<BR><BR>(ii) to any successor of the Depository (or its nominee) or any substitute depository (a "Substitute Depository") designated pursuant to clause (iii) below; provided that any successor of the Depository or any Substitute Depository must be both a "clearing corporation" as defined in the Minnesota Uniform Commercial Code, Minnesota Statutes, Section 336.8-102, and a qualified and registered "clearing agency" as provided in Section 17A of the Securities Exchange Act of 1934, as amended;<BR><BR>(iii) to a Substitute Depository designated by and acceptable to the Issuer upon (a)&#160;the determination by the Depository that the Certificates shall no longer be eligible for its depository services or (b) a determination by the Issuer that the Depository is no longer able to carry out its functions; provided that any Substitute Depository must be qualified to act as such, as provided in subclause (ii) above; or<BR><BR>(iv) in the event that (a) the Depository shall resign or discontinue its services for the Certificates or be declared no longer able to carry out its functions and. the Issuer is unable to locate a Substitute Depository within two months following the resignation or discontinuance or determination of noneligibility, or (b) the Issuer determines in its sole discretion that (1)&#160;the continuation of the book-entry system described herein might adversely affect the interests of the beneficial owners of the Certificates, or (2) it is in the best interests of the beneficial owners of the Certificates that they be able to obtain certificated Certificates, then the Issuer shall notify the Holders of its determination and of the availability of replacement Certificates to Holders. The Issuer, the Bond Registrar and the Depository shall cooperate in providing Replacement Certificates to Holders requesting the same and the registration, transfer and exchange of such Certificates shall thereafter be conducted as provided in Section 3 of this Resolution.<BR><BR>I. In the event of the designation of a Substitute Depository as authorized by clause H., the Bond Registrar, upon presentation of a Certificate, shall register their transfer to the Substitute Depository, and the Substitute Depository shall be treated as the Depository for all purposes and functions under this Resolution. The Representation Letter shall not apply to the Substitute Depository unless the Issuer and the Substitute Depository so agree, and the execution of a similar agreement is authorized.<BR><BR>3.05 Persons Deemed Owners; Payment. <BR><BR>A. The Issuer and the Bond Registrar may treat the person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in Section 2.02 above), on such Certificate and for all other purposes whatsoever, whether or not such Certificate shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary.<BR><BR>B. For the purposes of all actions, consents and other matters affecting Holders of Certificates issued under this Resolution as from time to time supplemented, other than payments, redemptions, and purchases, the Issuer may (but shall not be obligated to) treat as the Holder of a Certificate the beneficial owner of the Certificate instead of the person in whose name the Certificate is registered. For that purpose, the Issuer may ascertain the identity of the beneficial owner of the Certificate by such means as the Bond Registrar in its sole discretion deems appropriate, including but not limited to a certificate from the Depository or other person in whose name the Certificate is registered identifying such beneficial owner.<BR><BR>C. The principal of and interest on the Certificates shall be payable by the Bond Registrar in such funds as are legal tender for the payment of debts due the United States of America. The Issuer shall pay the reasonable and customary charges of the Bond Registrar for the disbursement of principal and interest.<BR><BR>3.06 Use of Global Book-Entry System.<BR><BR>A. There has been previously submitted to this City Council a form of Blanket Issuer Letter of Representations (the "Representation Letter") between the Issuer and the Depository setting forth various matters relating to the Depository and its role with respect to the Certificates. The terms and conditions of the Representation Letter are ratified.<BR><BR>B. All of the Certificates shall be registered in the name of Cede & Co., as nominee for DTC. Payment of interest on and principal of any Certificate registered in the name of Cede & Co. shall be made by wire transfer or New York Clearing House or equivalent same day funds by 10:00 a.m. CT or as soon as possible thereafter following the Bond Registrar's receipt of funds from the Issuer on each Interest Payment Date to the account of Cede & Co. on each Interest Payment Date at the address indicated in or pursuant to the Representation Letter.<BR><BR>C. So long as DTC is the Depository or it or its nominee is the Holder of any Certificates, the Issuer shall comply with the provisions of the Representation Letter, as it may be amended or supplemented from time to time.<BR><BR>D. Additional matters with respect to, among other things, notices, consents and approvals by Holders and payments on the Certificates are set forth in the Representation Letter.<BR><BR>E. The provisions in the Representation Letter are incorporated herein by reference and made a part of this resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Representation Letter shall control.<BR><BR>3.07 Mutilated, Stolen or Destroyed Certificates. If a Certificate becomes mutilated or is destroyed, stolen, or lost, the Bond Registrar will deliver a new Certificate of like amount, number, maturity date, and tenor in exchange and substitution for and upon cancellation of the mutilated Certificate or in lieu of and in substitution for any Certificate destroyed, stolen, or lost, upon the payment of the reasonable expenses and charges of the Bond Registrar and the Issuer in connection therewith, including the cost of printing new Certificates; and, in the case of a Certificate destroyed, stolen, or lost, upon filing with the Bond Registrar and the Issuer of evidence satisfactory to it and the Issuer that the Certificate was destroyed, stolen, or lost, and of the ownership thereof, and upon furnishing to the Bond Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it and the Issuer and as provided by law, in which both the Issuer and the Bond Registrar must be named as obligees. Certificates so surrendered to the Bond Registrar will be canceled by the Bond Registrar and evidence of such cancellation must be given to the Issuer. If the mutilated, destroyed, stolen, or lost Certificate has already matured or been called for redemption in accordance with its terms, it is not necessary to issue a new Certificate prior to payment.<BR><BR>Section 4. Preparation, Delivery and Form of the Certificates.<BR><BR>4.01 The Certificates shall be printed or typewritten in substantially the following form:<BR><BR>UNITED STATES OF AMERICA<BR><BR>STATE OF MINNESOTA<BR><BR>COUNTY OF ST. LOUIS<BR><BR>CITY OF ELY, MINNESOTA<BR><BR>GENERAL OBLIGATION EQUIPMENT CERTIFICATE<BR><BR>OF INDEBTEDNESS, SERIES 2008A<BR><BR>The City of Ely, a municipal corporation and political subdivision in St. Louis County, Minnesota (the "Issuer"), certifies that it is indebted and for value received, promises to pay to the registered owner specified above or on the Registration Certificate attached hereto, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, and to pay interest thereon from the date of original issue set forth above, or from the most recent Interest Payment Date (defined below) to which interest has been paid or duly provided for, until the principal amount is paid, said interest being at the rate per annum specified above. Interest is payable semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date") commencing on August 1, 2009, at the rate per annum specified above, calculated on the basis of a 360 day year of twelve 30 day months, until the principal amount is paid or has been provided for. This Certificate will bear interest from the most recent Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or provided for, from the date of original issue hereof set forth above. <BR><BR>Payment. The principal of and premium, if any, on this Certificate are payable by wire transfer (or other agreed means of payment) on each payment date upon presentation and surrender hereof at the office of Northland Trust Services, Inc., Minneapolis, Minnesota, as registrar, paying agent, authenticating agent and transfer agent (the "Bond "Registrar"), or at the office of such successor bond registrar as may be designated by the Issuer. Interest on this Certificate will be paid on each Interest Payment Date by wire transfer (or other agreed means of payment) to the person in whose name this Certificate is registered (the "Holder" or "Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid or duly provided for shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date fixed for the payment of the defaulted interest, and notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than (10) ten days prior thereto. The Bond Registrar shall make all payments with respect to this Certificate without, except for payment of principal on the Certificate, the presentation or surrender of this Certificate, and all such payments shall discharge the obligations of the Issuer to the extent of the payments so made. The principal of, premium, if any, and interest on this Certificate are payable in lawful money of the United States of America. For the prompt and full payment of such principal and interest as they become due, the full faith and credit of the Issuer are irrevocably pledged. <BR><BR>Date of Payment Not Business Day. If the date for payment of the principal of, premium, if any, or interest on this Certificate shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of Minneapolis, Minnesota, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment.<BR><BR>Optional Redemption. The Certificates of this series maturing after February 1, 2016, shall each be subject to redemption and prepayment at the option of the Issuer on February 1, 2016, and on any day thereafter, in whole or in part, and if in part, at the option of the Issuer and in such manner as the Issuer shall determine at a price of par plus accrued interest to the date of redemption.<BR><BR>Mandatory Redemption. The Certificates maturing on February 1 in the years 2012, 2014, 2016 and 2018 shall be subject to mandatory sinking fund redemption prior to maturity at a price equal to the stated principal amount to be redeemed plus interest accrued thereon to the redemption date, without premium. <BR><BR>Notice of and Selection of Certificates for Redemption. Not less than 30 nor more than 60 days prior to the date fixed for redemption and prepayment of any Certificates, notice of redemption shall be mailed to each registered owner of a Bond to be redeemed; provided, however, that so long as the Certificates are registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), notice of redemption shall be given in accordance with the terms of the Blanket Issuer Letter of Representations which has been executed by the Issuer and DTC (the "Representation Letter").<BR><BR>If less than all the Certificates of a maturity are called for redemption while the Certificates are registered in the name of Cede & Co., the Issuer or the Bond Registrar designated below will notify DTC 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 interest in such maturity to be redeemed. If less than all the Certificates of a maturity are called for redemption and the Certificates are not registered in the name of Cede & Co., the Bond Registrar will determine by lot or other manner deemed fair, the amount of each maturity to be redeemed. All prepayments shall be at a price equal to the principal amount thereof plus accrued interest. If any Bond is redeemed in part, upon surrender of the Bond being redeemed, the Issuer shall deliver or cause to be delivered to the registered owner of such Bond, a Bond in like form in the principal amount equal to that portion of the Bond so surrendered not being redeemed.<BR><BR>Issuance; Purpose. This Certificate is one of a series issued by the Issuer in the total aggregate amount of $570,000, all of like original issue date and tenor, except as to number, maturity date, redemption privilege, denomination and interest rate, pursuant to: (i) the authority contained in Minnesota Statutes, Section 412.301 and Chapter 475; (ii)&#160;the Constitution of the State of Minnesota and all other laws thereunto enabling; and (iii)&#160;an authorizing resolution adopted by the governing body of the Issuer on September&#160;2, 2008 (the "Resolution") and is issued for the purpose of financing the cost of acquiring certain items of capital equipment having an expected useful life of at least nine years and related issuance expenses. The principal of and interest on the Certificates are payable from ad valorem taxes levied upon all taxable property in the Issuer as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred<BR><BR>General Obligation. This Certificate constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of the principal and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged.<BR><BR>Denominations; Exchange. The Certificates of this series are issued as fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof. The Issuer will, at the request of the registered owner, issue one or more new fully registered Certificates in the name of the registered owner in the aggregate principal amount equal to the unpaid principal balance of this Bond, and of like tenor except as to number and principal amount at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution and the Representation Letter. Reference is made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar.<BR><BR>Registration; Transfer. This Bond shall be registered in the name of the payee on the books of the Issuer by presenting this Bond for registration to the Bond Registrar, whose representative will endorse his or her name and note the date of registration opposite the name of the payee in the Registration Certificate attached hereto. Thereafter this Bond may be transferred by delivery with an assignment duly executed by the Holder or the Holder's legal representative, and the Issuer and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until this Bond is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the Bond Registrar, all subject to the terms and conditions provided in the Resolution and the Representation Letter and to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar. Thereupon the Issuer shall execute (if required by law or the Resolution) and the Bond Registrar shall authenticate (if required by law or the Resolution) and deliver, in exchange for this Bond, one or more new fully registered Certificates in the name of the transferee, of an authorized denomination, in an aggregate principal amount equal to the principal amount of this Bond, of the same maturity, and bearing interest at the same rate. <BR><BR>Fees Upon Transfer to Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Certificate and any legal or unusual costs regarding transfers and lost Certificates. No service charge shall be made by the Issuer for any transfer or exchange hereinbefore referred to but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.<BR><BR>Treatment of Registered Owner. The Issuer and Bond Registrar may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes whatsoever, whether or not this Certificate shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary.<BR><BR>Authentication. This Certificate shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until either (i) the Bond Registrar's Authentication Certificate hereon shall have been executed by the Bond Registrar by one of its authorized representatives or (ii) the Certificate has been manually executed by at least one officer of the Issuer of the Issuer.<BR><BR>Qualified Tax Exempt Obligations. The Certificates of this issue have been designated by the Issuer as "Qualified tax exempt obligations" for purposes of Section 265(b) of the Internal Revenue Code of 1986, as amended, relating to the deduction of interest expenses allocable to the Certificates by financial institutions.<BR><BR>IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota and the Issuer's home rule charter to be done, to happen and to be performed precedent to and in the issuance of this Certificate in order to make it a valid and binding general obligation of the Issuer enforceable in accordance with its terms, have been done, have happened and have been performed in regular and due form, time and manner as so required; that prior to the issuance hereof, a direct, annual irrepealable ad valorem tax has been duly levied upon all taxable property in the Issuer in the years and amounts required by law; that, if necessary for payment of principal of and interest on the Certificates of this issue, additional ad valorem taxes may be levied upon all taxable property in the Issuer without limitation as to rate or amount; and that the issuance of this Certificate on the date of original issue hereof and the date of its actual original issuance and delivery, does not exceed any charter, constitutional or statutory limitation of indebtedness.<BR><BR>IN WITNESS WHEREOF, the City of Ely has caused this Certificate to be executed in its behalf by the manual signatures of the Mayor and Clerk-Treasurer, the Issuer having no seal or said seal having been intentionally omitted as permitted by law.<BR><BR>ATTEST:<BR><BR>(form-no signature required) (form-no signature required) <BR><BR>Clerk-Treasurer Mayor<BR><BR>Date of Authentication: <BR><BR>BOND REGISTRAR'S AUTHENTICATION CERTIFICATE<BR><BR>The Bond Registrar confirms that the books reflect the ownership of the Bond registered in the name of the owner named above in the principal amount and maturing on the date stated above and this Bond is one of the Certificates of the series issued pursuant to the Resolution hereinabove described.<BR><BR>NORTHLAND TRUST SERVICES, INC., <BR><BR>Bond Registrar<BR><BR>By <BR><BR>&#160;&#160;&#160;&#160;Authorized Representative<BR><BR>REGISTRATION CERTIFICATE<BR><BR>This Certificate must be registered as to both principal and interest in the name of the owner on the books to be kept by Northland Trust Services, Inc. of Minneapolis, Minnesota, as Bond Registrar. No transfer of this Certificate shall be valid unless made on said books by the registered owner or the owner's attorney thereunto duly authorized and similarly noted on the registration books. The ownership of the unpaid principal balance of this Certificate and the interest accruing thereon is registered on the books of Northland Trust Services, Inc. in the name of the registered owner last noted below.<BR><BR>ASSIGNMENT<BR><BR>FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto ________________________________________________________________________________________________________________________________________________<BR><BR> (Name and Address of Assignee)<BR><BR>____________________ Social Security or Other<BR><BR>____________________ Identifying Number of Assignee<BR><BR>the within Certificate and all rights thereunder and does hereby irrevocably constitute and appoint _____________________________________ attorney to transfer the said Certificate on the books kept for registration thereof with full power of substitution in the premises.<BR><BR> Dated: _________________<BR><BR>_____________________________________________<BR><BR>_____________________________________________<BR><BR>NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of the within Certificate in every particular, without alteration or enlargement or any change whatsoever.<BR><BR>Signature Guaranteed:<BR><BR>_______________________________ <BR><BR>(Bank, Trust Company, member of<BR><BR>National Securities Exchange)<BR><BR>Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange, or payment, and any bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof, Cede & Co., has an interest herein.<BR><BR>4.02 Preparation and Execution. The Certificates shall be prepared for execution in accordance with the approved form and shall be signed by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the Clerk-Treasurer. The legal opinion of Fryberger, Buchanan, Smith & Frederick, P.A. shall be appended to or printed on each Certificate. The corporate seal of the Issuer may be omitted from the Certificates as permitted by law. In case any officer whose signature or a facsimile of whose signature shall appear on the Certificates shall cease to be an officer before delivery of the Certificates, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery.<BR><BR>4.03 Delivery of the Certificates. Delivery of the Certificates and payment of the purchase price shall be made at a place mutually satisfactory to the Issuer and the Purchaser. Printed or typewritten, and executed Certificates shall be furnished by the Issuer without cost to the Purchaser. The Certificates, when prepared in accordance with this Resolution and executed, shall be delivered by or under the direction of the Treasurer to the Purchaser upon receipt of the purchase price plus accrued interest.<BR><BR>Section 5. Covenants, Accounts and Representations.<BR><BR>5.01 Acquisition Fund. On receipt of the purchase price of the Certificates, the Issuer shall credit the proceeds from the sale of the Certificates less capitalized interest, if any (the "Capitalized Interest"), less any amounts authorized as additional interest under Section 475.56 of the Act (the "Additional Interest"), and less accrued interest paid by the Purchaser upon closing and delivery of the Certificates (the "Accrued Interest") to a separate fund, which is hereby created and designated as the "2008 Equipment Acquisition Fund" (the "Acquisition Fund"). Proceeds from the Certificates on deposit in the Acquisition Fund shall be used from time to time to pay the capital costs of the Project, including but not limited to, costs of acquiring the Project, planning, architectural, engineering, legal, financial advisory, and other professional services, printing and publication costs, and costs of issuance of the Certificates, as such become due.<BR><BR>5.02 Debt Service Fund.<BR><BR>A. A separate debt service fund is hereby created and is designated as the "General Obligation Equipment Certificates of Indebtedness, Series 2008A Debt Service Fund" (the "Debt Service Fund"). <BR><BR>B. There is hereby pledged and appropriated and there shall be credited to the Debt Service Fund: (i) the Accrued Interest; (ii) the Capitalized Interest; (iii) the Additional Interest; (iv) the ad valorem taxes hereinafter levied; and (v) investment earnings on the monies identified in the foregoing clauses (i) through (iv). The proceeds of the Certificates described in clauses (i) through (iii) of the preceding sentence shall be used for payment of interest on the Certificates.<BR><BR>C. The money in the Debt Service Fund shall be used for no purpose other than the payment of principal and interest on the Certificates; provided, however, that if any payment of principal or interest shall become due when there is not sufficient money in the Debt Service Fund, the Treasurer shall pay the same from any other funds of the Issuer and said funds shall be reimbursed for such advance out of the proceeds of the taxes hereinafter levied.<BR><BR>5.03 Tax Levy.<BR><BR>A. For the prompt and full payment of the principal and interest on the Certificates when due, the full faith and credit and taxing power of the Issuer are hereby irrevocably pledged. There is hereby levied a direct, annual, ad valorem tax upon all taxable property within the Issuer which shall be extended upon the tax rolls and collected with and as part of the other general property taxes in the Issuer for the years and in the amounts set forth on Exhibit A hereto and incorporated herein by reference as though fully specified in this Section.<BR><BR>B. Said levies are such that if collected in full they will produce between five and six percent in excess of the amount needed to meet when due the principal and interest payments on the Certificates.<BR><BR>C. Such tax levies shall be irrevocable as long as any of the Certificates issued hereunder are outstanding and unpaid; provided, however, that on November 30th of each year, while any Certificates issued hereunder remain outstanding, the Issuer may reduce or cancel the above levies to the extent of the amount which has been appropriated to and is on deposit in the Debt Service Fund to pay the principal of and interest on the Certificates, and may direct the County Auditor to reduce the levy for such year by that amount.<BR><BR>5.04 Investments. Monies on deposit in the Acquisition Fund and in the Debt Service Fund may, at the discretion of the Clerk-Treasurer, be invested in securities permitted by Minnesota Statutes, Chapter 118A, that any such investments shall mature at such times and in such amounts as will permit for payment of project costs and/or payment of the principal and interest on the Certificates when due.<BR><BR>Section 6. Tax Covenants.<BR><BR>6.01. General. <BR><BR>A. The Issuer covenants and agrees with the Holders of the Certificates that the Issuer will (i) take all action on its part necessary to cause the interest on the Certificates to be exempt from federal income taxes including, without limitation, restricting, to the extent necessary, the yield on investments made with the proceeds of the Certificates and investment earnings thereon, making required payments to the federal government, if any, and maintaining books and records in a specified manner, where appropriate, and (ii) refrain from taking any action which would cause interest on the Certificates to be subject to federal income taxes, including, without limitation, refraining from spending the proceeds of the Certificates and investment earnings thereon on certain specified purposes.<BR><BR>B. The Issuer covenants with the Holders from time to time of the Certificates 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 payable on the Certificates to become subject to taxation under the Internal Revenue Code; and that it will take, or it will cause its officers, employees or agents to take, all affirmative actions within its powers which may be necessary to insure that such interest will not become subject to taxation under the Code. The term "Internal Revenue Code" or "Code" as used herein includes the Internal Revenue Code of 1986, as amended, and all regulations, amended regulations and proposed regulations issued thereunder, as now existing, or as hereafter amended or proposed.<BR><BR>C. No portion of the proceeds of the Certificates shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Certificates were issued and (ii) in addition to the above in an amount not greater than the lesser of five percent (5%) of the proceeds of the Certificates or $100,000. To this effect any proceeds of the Certificates and any sums from time to time held in the Debt Service Fund (or any other Issuer account which will be used to pay principal or interest to become due on the Certificates payable therefrom) in excess of amounts which under then applicable federal arbitrage restrictions may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in those funds shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Certificates to be "federally guaranteed" within the meaning of Section 149(b) of the Code.<BR><BR>6.02. Small Issuer Rebate Exception. For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the Issuer hereby finds, determines and declares:<BR><BR>A. the Issuer is a governmental unit with general taxing powers;<BR><BR>B. the Certificates are not "private activity bonds" as defined in Section 141 of the Code;<BR><BR>C. 95% or more of the net proceeds of the Certificates are to be used for local governmental activities of the Issuer; and<BR><BR>D. the aggregate face amount of the tax exempt obligations (other than private activity bonds) issued by the Issuer during the calendar year in which the Certificates are issued is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. <BR><BR>6.03. Bank Qualification. In order to qualify the Certificates as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the Issuer hereby makes the following factual statements and representations:<BR><BR>A. the Certificates are not "private activity bonds" as defined in Section 141 of the Code;<BR><BR>B. the Issuer hereby designates the Certificates as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code;<BR><BR>C. the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will by issued by the Issuer (and all entities whose obligations will be aggregated with those of the Issuer) during the calendar year in which the Certificates are being issued will not exceed $10,000,000; and<BR><BR>D. not more than $10,000,000 of obligations issued by the Issuer during the calendar year in which the Certificates are being issued have been designated for purposes of Section 265(b)(3) of the Code.<BR><BR>6.04 Arbitrage Certification. The Mayor and Clerk-Treasurer, being the officers of the Issuer charged with the responsibility for issuing the Certificates pursuant to this Resolution, are authorized and directed to execute and deliver to the Purchaser an arbitrage certification in order to satisfy the provisions of the Code and the regulations promulgated thereunder.<BR><BR>6.05 Opinion of Counsel. Notwithstanding any other provision of this Section 6, any requirement imposed hereunder or under Section 5.04 hereof may be deemed inapplicable and of no force or effect if an opinion of counsel is rendered to the Issuer by nationally recognized Bond Counsel to the effect that the failure to impose such requirement will not adversely effect the tax exempt status of interest on the Certificates.<BR><BR>Section 7. Certificates of Proceedings; Miscellaneous.<BR><BR>7.01 Filing of Resolution; County Auditor Certificate. The Clerk-Treasurer or his designee is directed to file in the office of the County Auditor of St. Louis County a certified copy of this Resolution and such other information as the County Auditor may require, and to obtain from the County Auditor a certificate stating that the Certificates herein authorized have been duly entered on the Auditor's register and that the tax required by law for the payment of said Certificates has been levied.<BR><BR>7.02 Authentication of Transcript. The officers of the Issuer are authorized and directed to prepare and furnish to the Purchaser and to Bond Counsel certified copies of all proceedings and records of the Issuer relating to the authorization and issuance of the Certificates and to the financial condition and affairs of the Issuer and other affidavits and certificates as may reasonably be requested to show the facts relating to the legality and marketability of the Certificates as such facts appear from the official books and records of the officers' custody or otherwise known to them. All of such certified copies, certificates and affidavits, including any heretofore furnished, constitute representations of the Issuer as to the correctness of facts recited therein and the actions stated therein to have been taken.<BR><BR>7.03 Investment Letter. No official statement or prospectus has been prepared or circulated by the Issuer in connection with the sale of the Certificates and the Purchaser has made its own investigation concerning the Issuer as set forth in an investment letter dated as of the date of delivery of the Certificates. In the event the Purchaser prepares reoffering materials for the Certificates, the Mayor and Clerk-Treasurer are hereby authorized and directed to certify that they have examined such reoffering materials prepared and circulated in connection with the reoffering of the Certificates and that to the best of their knowledge and belief such materials are a complete and accurate representation of the facts and representations made therein as of the date thereof.<BR><BR>7.04 Absent or Disabled Officers. In the event of the absence or disability of the Mayor or the Clerk-Treasurer, such officers or members of the Issuer as in the opinion of the Issuer's attorney may act in their behalf, shall without further act or authorization, execute and deliver the Certificates, and do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers.<BR><BR>Section 8. Defeasance. When all of the Certificates have been discharged as provided in this Section, all pledges, covenants and other rights granted by this Resolution shall cease. The Issuer may discharge its obligations with respect to any Certificates which are due on any date by depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit. The Issuer may also discharge all Certificates of said issue at any time by irrevocably depositing in escrow with the Bond Registrar, for the purpose of paying all principal and interest due on such Certificates to maturity, a sum of cash or securities of the types described in Section 475.67 of the Act, as amended, in such aggregate amount, bearing interest at such rates and maturing or callable at the Issuer's option on such dates as shall be required to provide funds sufficient for this purpose.<BR><BR>Section 9. Payment of Issuance Costs: The Issuer authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to Northland Trust Services, Inc. on the closing date for further distribution as directed by the Purchaser. <BR><BR>Adopted: September 2, 2008<BR><BR>EXHIBIT A<BR><BR>TAX LEVY SCHEDULE<BR><BR>Levy Year Collection Year Amount<BR><BR>2008 2009 $99,750.00<BR><BR>2009 2010 $104,340.00<BR><BR>2010 2011 $107,150.00<BR><BR>2011 2012 $104,540.00<BR><BR>2012 2013 $101,600.00<BR><BR>2013 2014 $103,910.00<BR><BR>2014 2015 $105,820.00<BR><BR>2015 2016 $102,270.00<BR><BR>2016 2017 $103,740.00<BR><BR>Motion for the adoption of the foregoing resolution was made by Council member Nikkola, seconded by Council member Lindroos, and declared carried on the following vote:<BR><BR>YES: Council members Debeltz, Lindroos, Nikkola, Omerza, Sheddy, Zupec, Mayor Novak (7)<BR><BR>NO: None (0)<BR><BR>ABSENT: None (0)<BR><BR>Adopted this 2nd day of September 2008.<BR><BR>Council member Nikkola offered the following resolution: 2008-34<BR><BR>A RESOLUTION ADOPTING AND APPROVING PROPOSED TAX LEVY, COLLECTIBLE IN 2009<BR><BR>WHEREAS: The City of Ely is required by Minnesota Law to adopt a proposed 2009 tax levy, and<BR><BR>WHEREAS: The City is required by Minnesota Law to certify it to the county auditor.<BR><BR>NOW, THEREFORE BE IT RESOLVED: That the City Council of Ely adopts and approves the following sums of money be levied for the current year, collectible in 2009, upon taxable property in the City of Ely, for the following purposes:<BR><BR>GENERAL FUND $ 1,020,538<BR><BR>LIBRARY FUND 241,045<BR><BR>DEBT SERVICE 136,635<BR><BR>HRA 32,845<BR><BR>TOTAL LEVY: $ 1,431,063 <BR><BR>BE IT ALSO RESOLVED: That the Ely City Clerk-Treasurer is hereby instructed to transmit a certified copy of this resolution to the County Auditor of St. Louis County, Minnesota.<BR><BR>Motion for the adoption of the foregoing resolution was made by Council member Nikkola, seconded by Council member Lindroos, and declared carried on the following vote:<BR><BR>YES: Council members Debeltz, Lindroos, Nikkola, Omerza, Sheddy, Zupec, Mayor Novak (7)<BR><BR>NO: None (0)<BR><BR>ABSENT: None (0)<BR><BR>Adopted this 2nd day of September 2008.<BR><BR>Communication was received from the State of Minnesota Department of Natural Resources, addressing FY 09 ( 2008/2009) Minnesota Snowmobile Trails Assistance Program, Maintenance and Grooming Grant Agreement ( Lake Trail Ely to Vermilion), in the amount of $10,764.00. Moved by Zupec supported by Debeltz, that agreement be approved with the Mayor and Clerk-Treasurer authorized to execute on behalf of the City of Ely. Carried unanimously.<BR><BR>Communication was received from the State of Minnesota Department of Natural Resources, addressing FY 09 Snowmobile Grant In Aid Agreement ( Lake Trail Ely to Vermilion), in the amount of $11,400.00. Moved by Zupec supported by Lindroos, that agreement be approved with the Mayor and Clerk-Treasurer authorized to execute on behalf of the City of Ely. Council member Zupec withdrew his motion, Council member Lindroos withdrew his support. Mayor Novak commented that per this agreement the City would need to come up with matching funding. Moved by Debeltz supported by Zupec, that above Agreement, along with communication from the State of Minnesota Department of Natural Resources, addressing grant-in-aid agreement ( Hidden Valley Cross Country Ski Trail), in the amount of $1,800.00 be tabled at this time and referred to the City Budget Committee, to address where matching funds may be coming from, to report back to the Council at their next regular meeting. Carried unanimously.<BR><BR>Council member Sheddy reported that the City had tentatively reserved an informational booth for the upcoming Harvest Moon Festival, but that he will be out of town on business and not able to monitor the booth. Due to restrictions from the Chamber as to what could be said by Council members due to upcoming elections, it probably would be best not to have the booth this year, but to plan for the booth in 2009. Council member Nikkola also noted that he will be out of town during that time period, otherwise he would have been able to sit in the booth for a period of time. Council member Sheddy will notify the Chamber that the City will not have an informational booth in the 2008 Harvest Moon Festival, but will have a booth in the 2009 Festival.<BR><BR>Moved by Omerza supported by Lindroos, that the meeting adjourn.<BR><BR>Carried unanimously. Adjournment at 7:30 P.M.<BR><BR>Patricia M. Wellvang<BR><BR>Deputy Clerk<BR><BR>City of Ely<BR><BR>Ely Echo 9/13/2008<BR><BR>