MINUTES OF THE REGULAR MEETING

OF THE ORTONVILLE CITY COUNCIL

COUNTY OF BIG STONE, STATE OF  MINNESOTA

MONDAY, MARCH 17, 2003 7:00 PM

SENIOR CITIZENS CENTER

CALL TO ORDER AND ROLL CALL:

Mayor Dinnel called the regular meeting of the Ortonville City Council to order at 7:11 P.M..  Roll call was taken with the following present:  Lisa Berkner, Mel Reinke, Lenore Sellin, Mike Dorry, Dan Oakes, Artie Arndt.  City staff present:  Judith Roberts and Dave McLaughlin..  Media present:  Ardith Eckardt and John Paulson.  Others present:  Jerry Wiegman,  Michael Spors, Verna Stoehr, Virginia Dawson, Gen Strube, Diane Dinnel, Gary Dinnel, Art Vollmer, John S. Jurgens, Joan Jurgens, Brenda Dinnel, Marcia Anderson, Nadine Villella, Mary Worrall, Mary Zahn, Margaret Johnson, Mae Larson, Delores Sitter, Valina Nichols, Arvilla Bergseth, Dewona Amberg,  Mary Beling, Kenneth Simonitch, Aletta Simonitch,  Dolores Christensen, Gwen Oswood, Woody Sellin, Stacy Longnecker, Isaiah Longnecker, Ron Athey, Deb Barnhardt, Ron Kottke, Vadnae Kottke, Harriet Kidman, Jan Hanson, Julie Kunrath, Donna Leiferman, Steve Berkner, Kimberly Jenkins, Darlyne Ceaser, Evie Swigerd, Bruce Swigerd, Bill Elmstrom, Brad Schipper, Jim Foster, Ken Archer, Harvey Kelzer, Joan Hasslen, Dave Hasslen, Tom Tobin, Bill Hoel, Donna Hoel, Marge Dragseth, Cindy Jorgenson, Deb Goergen, Gloria Ross, Twyla Hinneberg, Ruth Hansen, Peter Hansen.

AGENDA AMENDMENTS:

The following agenda amendments were offered by Dinnel and seconded by Berkner and the motion did pass unanimously to approve the following agenda:

 Number 5 (Public Hearings) will be before Number 3 (City Attorney Reports and Recommendations).

 NEW BUSINESS:

13.e. Consider Refunding 1993 Public Utility revenue Warrants-To follow Public Hearing.

 PUBLIC HEARINGS:

5.a. Proposed issuance of Housing Development Bonds.

 PUBLIC HEARING:

At 7:20 P.M. Mayor Dinnel opened the public hearing for a presentation by Carolyn Drude of Ehlers and Associates and Ben Schmidt of Prairie Grass Communities regarding the assisted living project.  After all who wished to be heard had spoken, Dinnel declared the public hearing closed at 8:25.

 Dinnel introduced the following resolution and moved its adoption:

RESOLUTION 03-026

RESOLUTION APPROVING THE HOUSING FINANCE PROGRAM AND THE ISSUANCE AND SALE BY THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ORTONVILLE OF ITS HOUSING DEVELOPMENT BONDS OF 2003 (CITY OF ORTONVILLE, MINNESOTA GENERAL OBLIGATION) IN AN AMOUNT NOT TO EXCEED $3,000,000 BACKED BY THE FULL FAITH AND CREDIT OF THE CITY OF ORTONVILLE, CONTINGENT UPON ARRIVING AT A SATISFACTORY AGREEMENT WITH PRAIRIE GRASS  COMMUNITIES, LLC.

          WHEREAS, pursuant to Minnesota Statutes, Sections 469.090 to 469.1081, the Economic Development Authority of the City of Ortonville, Minnesota (the “Authority”), is authorized to exercise the powers of a housing and redevelopment authority under Minnesota Statutes, Sections 469.001 to 469.047 (the “Act”); and

          WHEREAS, under the Act the Authority is authorized to carry out housing development projects to provide affordable housing to the elderly or to persons of low and moderate income; and

           WHEREAS, pursuant to Minnesota Statutes, Section 469.034, the Authority is authorized to issue bonds to finance a housing development project (the “Bonds”) and upon (a) a determination by the Authority that pledged revenues will equal or exceed 110% of the principal and interest due on such Bonds for each year beginning 2005 and (b) approval of the principal amount of the Bonds by the City of Ortonville, Minnesota (the “City”) following a public hearing, the Authority may pledge the general obligation of the City to its Bonds issued for the purpose of financing a qualified housing development project; and

            WHEREAS, a “ qualified housing development project” is defined as a housing development project providing housing either for the elderly or for individuals and families with incomes not greater than 80% of the median income for the standard metropolitan statistical area or non-metropolitan county in which the project is located, with certain limited exceptions defined in Minnesota Statutes, Section 469.034; and

             WHEREAS, the proceeds of the Bonds will be used to fund the acquisition and construction of an elderly residential rental housing facility (the “Project”) to be owned and operated by the Authority; and

             WHEREAS, on the date hereof, the City Council held a public hearing at 7:20 p.m.  at the Senior Citizens Center for which notice was published at least 15 days in advance regarding the issuance of up to $3,000,000 aggregate principal amount of housing development bonds to be issued by the Authority to finance the Project and to which the full faith and credit of the City will be pledged, all in accordance with the requirements of Minnesota Statutes, Section 469.034; and

              WHEREAS, on the date hereof the City has conducted a public hearing following publication of notice pursuant to Minnesota Statutes, Chapter 462C, including Section 469.1071.

                NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Ortonville as follows:   

1.        The City hereby approves the housing finance program.  

2.        The City hereby approves the issuance by the Authority of up to $3,000,000 aggregate principal amount of housing development bonds to which the full faith and credit of the City will be pledged, the proceeds of which Bonds will be used by the Authority to finance the Project.  

3.        The approval is conditioned upon a determination by the Authority to be made in the Authority’s resolution approving the sale of the Bonds that the revenues pledged to the payment of the Bonds will equal or exceed 110% of the principal and interest due on the Bonds for each year beginning  in the year 2005.  

The motion for the adoption of the foregoing resolution was duly seconded by Member Reinke and upon vote being taken thereon, the following voted in favor thereof: Arndt, Dorry, Reinke, Dinnel, Sellin and Oakes, and the following voted against the same: Berkner. 

Whereupon the resolution was declared duly passed and adopted and was signed by the Mayor and Deputy City Clerk-Administrator. 

                                                                                     APPROVED: 

                                                                                      _______________________

                                                                                      David Dinnel

                                                                                      Mayor 

ATTEST: 

_________________________

Judith Roberts

Deputy City Clerk/ Administrator

CITY ATTORNEY REPORTS & RECOMMENDATIONS:

Dave McLaughlin, City Attorney discussed the judgement that had been placed against the Jon Raffety property.  The property has since reverted back to the original owner, Mark Moen.  Mr. Moen would like the City to remove the judgement on the property. No action was taken on the matter. 

RECOGNITIONS AND PRESENTATIONS:

Ron Athey, fire chief was present to discuss the FEMA grant that is available for new fire trucks.  FEMA would pay 90% and the City would be responsible for the remaining 10%. 

Reinke moved and Dorry seconded and the motion passed unanimously approving the application to FEMA. 

CONSENT AGENDA:

Mayor Dinnel asked if there were any additions, corrections, or deletions to be made to the Consent Agenda.  Motion was made by council member Berkner, and seconded by council member Sellin to approve the Consent Agenda which included the following items: 

9.a:     Motion approving proposed council minutes of March 3, 2003. 

13.a:   Approve  Catholic Church of St. John’s-April 10, 2003 Bingo. 

13.b:   Approve hospital project pay request #21-$344,024.55. 

15:      Motion approving payment of bills as presented. 

With all members voting in favor, the motion carried. 

UNFINISHED BUSINESS:

Mike Spors of Berkner Plumbing & Heating was present to discuss the quotes on the clubhouse electric furnace & central air conditioning.   

Dorry moved and Oakes seconded that the following resolution be adopted: 

RESOLUTION 03-027

RESOLUTION ACCEPTING THE QUOTE OF LARRY’S REFRIGERATION  FOR CLUBHOUSE ELECTRIC FURNACE AND CENTRAL AIR CONDITIONING

WHEREAS, the Golf Board of the City of Ortonville had previously solicited quotes for mechanical work for a clubhouse electric furnace and central air conditioning, and 

WHEREAS, quotes were received as follows:           

Berkner Plumbing & Heating                             $  8,165.00

Alternate Bid                                                    $     200.00

Ortonville Plumbing & Heating              $  9,945.00

Alternate Bid                                                    $     200.00

Hynnek Bros. Plumbing & Heating                    $  8,690.00

Alternate Bid                                                    $       70.00

Bill’s Plumbing & Heating                                 $12,250.00

Larry’s Refrigeration                                         $  7,195.00

Sales Tax Not Included

Alternate Bid                                                   $      150.00

WHEREAS, quotes have been reviewed by the Council and 

Whereas, upon the recommendation of the City Council, the quote of Larry’s Refrigeration, Ortonville, Minnesota in the amount of  $7,195.00 ( sales tax not included) and the Alternate Bid of $150.00 has been determined by the Council to be the lowest responsible bid for the Project. 

Upon roll call vote the following voted aye: Arndt, Dinnel, Berkner, Oakes , Dorry and the following voted nay:  Sellin and Reinke. 

Resolution 03-027 passed this 17^th day of March 2003. 

                                                                                APPROVED: 

                                                                                ______________________

                                                                                 David Dinnel

                                                                                 Mayor 

ATTEST: 

 __________________ 

Judith M. Roberts

Deputy City Clerk/Administrator

NEW BUSINESS:

Ken Archer presented information on the Hospital Change Order #45-Net Change of $6,260.00 plus 21 days.  More information will follow. 

Ken Archer also explained the Hospital Equipment Lease.  A motion was made by Reinke and seconded by Berkner and the motion passed unanimously to authorize  Ken Archer to advertise for bids  for the Lease of Hospital Equipment. 

Carolyn Drude discussed the refunding of the Public Utility Revenue Warrants-Series 5/26/1993. 

Reinke introduced the following resolution and moved its adoption: 

RESOLUTION 03-028

 EXTRACT OF MINUTES OF A MEETING OF THE

CITY COUNCIL OF THE

CITY OF ORTONVILLE, MINNESOTA

HELD:  March 17, 2003

Pursuant to due call, a regular meeting of the City Council of the City of Ortonville, Minnesota, was duly held at the City Hall on March 17, 2003, at 7:00 P.M., for the purpose, in part, of considering a proposal and awarding the sale of $555,000 Public Utility Revenue Refunding Warrants, Series 2003.

The following members were present:  David Dinnel, Artie Arndt, Lisa Berkner, Mike Dorry, Dan Oakes, Mel Reinke, and Lenore Sellin

and the following were absent:   None

Member           Mel Reinke       introduced the following resolution and moved its adoption:

RESOLUTION ACCEPTING PROPOSAL ON THE SALE OF $555,000 PUBLIC UTILITY REVENUE REFUNDING WARRANTS, SERIES 2003 AND PROVIDING FOR THEIR ISSUANCE

A.                 WHEREAS, the City of Ortonville, Minnesota (the "City") has investigated the facts necessary to determine and does hereby find and declare that, pursuant to the provisions of Chapter 11 of the City Charter, the City has heretofore duly authorized the establishment and operation of a municipal public utility department; which includes all properties now or hereafter included under the Public Utility Department of the City, including the public water works; electric light and power system; sanitary sewer system; garbage and waste collection and disposal system; municipal health services system, including the municipal hospital, municipal nursing home and municipal medical clinic; municipal airport; municipal golf course, including the golf clubhouse and golf cart houses; municipal swimming pool; municipal liquor store; municipal library and any other public utility from which a revenue is or may be derived whether now or hereafter owned and operated by the City (the "Public Utility"); and

B.                 WHEREAS, the City has heretofore issued $1,085,000 Refunding Public Utility Revenue Warrants, Series 1993, dated September 22, 1993 (the "Prior Warrants"), for the purpose, in part, of providing money to refinance warrants originally issued to refund the City's outstanding Public Utility Revenue Warrants dated January 1, 1990 and the outstanding Public Utility Revenue Warrants, Series 1990 dated July 1, 1990; and

C.                 WHEREAS, $540,000 of the principal amount of the Prior Warrants which mature on and after February 1, 2004, are callable on February 1, 2002 and on any date thereafter (the "Refunded Warrants"), at a price of par plus accrued interest, as provided in the Resolution of the City Council, adopted August 25, 1993, authorizing the issuance of the Prior Warrants (the "Prior Resolution"); and

D.                 WHEREAS, the refunding of the Refunded Warrants is consistent with covenants made with the holders thereof, and is necessary and desirable for the reduction of debt service cost to the City; and

E.                  WHEREAS, to provide funds for a current refunding of the Refunded Warrants, it is necessary for the City to issue $555,000 principal amount of its Public Utility Revenue Refunding Warrants, Series 2003 (the “Warrants” or, individually, a "Warrant"), pursuant to the City Charter and Minnesota Statutes, Chapter 475; and

F.                  WHEREAS, this Council reasonably anticipates that the gross revenues to be received from the operation of the Public Utility during the period for which the Warrants will be outstanding will be more than sufficient to pay all costs of the operation and maintenance thereof and to provide Net Revenues (as hereinafter defined) adequate to pay the principal of and interest on the Warrants when due, as well as the following outstanding obligations payable from or constituting a lien or charge upon the Net Revenues, and it is in the best interests of the City that the Warrants be made payable solely from the Net Revenues:

It is hereby found and determined that the annual Net Revenues of the Public Utility for each of the last two complete fiscal years have been not less than 125% of the maximum annual principal and interest payable from the Revenue Warrant Account described in Section 11.05 in any future fiscal year during the term of the above-described issues (the "Prior Obligations") and on the Warrants; and

G.                 WHEREAS, the Warrants and the interest coming due thereon shall be payable solely from the Net Revenues of the Public Utility; however the Warrants shall not constitute a lien on the property comprising the Public Utility.  The Warrants shall not constitute a general obligation of the City, and the full faith and credit and taxing powers of the City are not pledged for the payment of the Warrants, and no person shall ever have the right to compel the application of City moneys (other than Net Revenues) or the levy of ad valorem taxes for the payment of such principal and interest; and

H.                 WHEREAS, all acts, conditions and things which are required by the City Charter and by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the valid issuance of the Warrants have been done, do exist, have happened and have been performed, in due form, time and manner as required by law; and

I.                    WHEREAS, no other obligations have been sold pursuant to a private sale within the last twelve (12) calendar months of the date hereof which when combined with this issue would exceed the $1,200,000 limitation on negotiated sales as required by Minnesota Statutes, Section 475.60, subdivision 2(2); and

J.                   WHEREAS, it is in the best interests of the City that the Warrants be issued in book-entry form as hereinafter provided.

NOW, THEREFORE, BE IT RESOLVED by the City of Ortonville, Minnesota, as follows:

Section 1.  Findings.  It is hereby found, determined and declared that:

1.01.        Purpose.  The Warrants shall provide funds for a current refunding of the Refunded Warrants (the "Refunding").  It is hereby found, determined and declared that the Refunding is pursuant to Minnesota Statutes, Section 475.67 and shall result in a reduction of debt service cost to the City.

1.02.        Prior Outstanding Obligations.  Except for the Prior Obligations, the City has no outstanding Warrants, warrants, certificates, or other obligations or evidences of indebtedness, or money borrowed for or on account of the Public Utility or indebtedness for which any of the net revenues of all or a part of the Public Utility has been appropriated or pledged.

1.03.        Parity of Lien Test.  All of the payments required to be made into the various funds and accounts provided for in the resolutions authorizing the issuance of the Prior Obligations, have been made and there is sufficient money in the Revenue Warrant Account described in Section 11.05 to pay all principal and interest on all obligations payable from the revenues of the Public Utility, coming due during the twelve (12) month period next succeeding the issuance of the Warrants authorized by this resolution.  The gross revenues, expenses of operation and maintenance, and net revenues of the Public Utility from all sources for the past completed two (2) fiscal years have been as follows:

*   The 2002 computations are based upon the December 20, 2002, audited financial statement for the Ortonville Area Health Services and preliminary figures for the December 31, 2002, fiscal year for the City of Ortonville Enterprise Funds.

Said net revenues for each of the preceding two (2) completed fiscal years have been not less than one hundred twenty-five percent (125%) of the maximum annual principal and interest payable from the Revenue Warrant Account described in Section 11.05 in any future fiscal year during the term of the Prior Obligations and the Warrants and the City is therefore authorized to issue the Warrants on a parity of lien with the Prior Obligations.

1.04.        Sufficiency of Net Revenues.  The estimated revenues to be derived from the operation of the Public Utility during the term of the Warrants will be more than sufficient to produce net revenues after current costs of operation and maintenance adequate to pay principal and interest when due on the Prior Obligations and the Warrants and to maintain reasonable reserves for the Prior Obligations and the Warrants.

Section 2.  Acceptance of Proposal.  The proposal of Miller Johnson Steichen Kinnard Investment Securities, Inc. (the "Purchaser"), to purchase the Warrants in accordance with the terms established for the Warrants, at the rates of interest hereinafter set forth, and to pay therefor the sum of $550,550 plus interest accrued to settlement, is hereby accepted, and the Warrants are hereby awarded to the Purchaser.

Section 3.  Warrant Terms, Execution and Delivery.

3.01.        Maturities, Interest Rates, Denominations and Payment.  The City shall forthwith issue and deliver the Warrants, which shall be dated originally as of April 1, 2003, shall be in fully registered form, in the denomination of $5,000 each or any integral multiple thereof of a single maturity, shall mature on February 1 in the years and amounts set forth below and shall bear interest from their date of original issue until paid or duly called for redemption at the rates per annum shown opposite such years and amounts as follows:

The Council finds and determines that such maturities, as set forth above, are warranted by the anticipated collection of the Public Utility Net Revenues pledged for their payment.

3.02.        Interest Payment Dates.  The interest on the Warrants shall be payable on February 1 and August 1 in each year, commencing August 1, 2003, to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day.

3.03.        Redemption.  All Warrants maturing on February 1, 2010 and 2011, shall be subject to redemption and prepayment at the option of the City on February 1, 2009, and on any date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of the Warrants subject to prepayment.  If redemption is in part, the City shall determine the maturities and the principal amounts within each maturity to be prepaid, and if only part of the Warrants having a common maturity date are called for prepayment, the specific Warrants to be prepaid shall be chosen by lot by the Registrar.  Warrants or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Warrants.

To effect a partial redemption of Warrants having a common maturity date, the Registrar prior to giving notice of redemption shall assign to each Warrant having a common maturity date a distinctive number for each $5,000 of the principal amount of such Warrant.  The Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Warrants, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Warrants to be redeemed.  The Warrants to be redeemed shall be the Warrants to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Warrant of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected.  If a Warrant is to be redeemed only in part, it shall be surrendered to the Registrar (with, if the City or the Registrar so requires, a written instrument of transfer in form satisfactory to the City and the Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the City shall execute and the Registrar shall authenticate and deliver to the Holder of the Warrant, without service charge, a new Warrant or Warrants of the same series having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Warrant so surrendered.

3.04.        Appointment of Initial Registrar.  The City hereby appoints U.S. Bank National Association in St. Paul, Minnesota, as the initial Registrar, transfer agent and paying agent (the "Registrar").  The Mayor and the City Clerk-Administrator are authorized to execute and deliver, on behalf of the City, a contract with the Registrar for this purpose. 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, such corporation shall be authorized to act as successor Registrar.  The City agrees to pay the reasonable and customary charges of the Registrar for the services performed.  The City reserves the right to remove any Registrar upon thirty days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Warrants in its possession to the successor Registrar and shall deliver the Warrant register to the successor Registrar.

3.05.        Book Entry Only System.  The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository") will act as securities depository for the Warrants, and to this end:

(i)                  The Warrants shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period"), shall at all times be in the form of a separate single fully registered Warrant for each maturity of the Warrants; and for purposes of complying with this requirement under Sections 3 and 7 Authorized Denominations for any Warrant shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Warrant.

(ii)                Upon initial issuance, ownership of the Warrants shall be registered in a Warrant register maintained by the Registrar (as hereinafter defined) in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee").

(iii)               With respect to the Warrants neither the City nor the Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Warrants as securities depository (the "Participant") or the person for which a Participant holds an interest in the Warrants shown on the books and records of the Participant (the "Beneficial Owner").  Without limiting the immediately preceding sentence, neither the City, nor the Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Warrants, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Warrants, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Warrants, or (D) the consent given or other action taken by the Depository as the Registered Holder of any Warrants (the "Holder").  For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to certain Participants to whose accounts the Warrants are credited on the record date identified in a listing attached to the omnibus proxy.

(iv)              The City and the Registrar may treat as and deem the Depository to be the absolute owner of the Warrants for the purpose of payment of the principal of and premium, if any, and interest on the Warrants, for the purpose of giving notices of redemption and other matters with respect to the Warrants, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Warrants, and for all purpose whatsoever.  The Registrar, as paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Warrants only to the Holder or the Holders of the Warrants as shown on the Warrant register, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Warrants to the extent of the sum or sums so paid.

(v)                Upon delivery by the Depository to the Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in Section 7 hereof, references to the Nominee hereunder shall refer to such new Nominee.

(vi)              So long as any Warrant is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Warrant and all notices with respect to such Warrant shall be made and given, respectively, by the Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book-entry Depository for the Warrants (said Letter of Representations, together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book-entry Depository for the Warrants, collectively hereinafter referred to as the "Letter of Representations").

(vii)             All transfers of beneficial ownership interests in each Warrant issued in book-entry form shall be limited in principal amount to Authorized Denominations and shall be effected by procedures by the Depository with the Participants for recording and transferring the ownership of beneficial interests in such Warrants.

(viii)           In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Registrar may establish a special record date for such consent or other action.  The City or the Registrar shall, to the extent possible, give the Depository notice of such special record date not less than 15 calendar days in advance of such special record date to the extent possible.

(ix)              Any successor Registrar in its written acceptance of its duties under this Resolution and any paying agency/Registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations.

(x)                In the case of a partial prepayment of a Warrant, the Holder may, in lieu of surrendering the Warrants for a Warrant of a lesser denomination as provided in Section 3 hereof, make a notation of the reduction in principal amount on the panel provided on the Warrant stating the amount so redeemed.

3.06.        Termination of Book-Entry Only System.  Discontinuance of a particular Depository's services and termination of the book-entry only system may be effected as follows:

(i)                  The Depository may determine to discontinue providing its services with respect to the Warrants at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law.  The City may terminate the services of the Depository with respect to the Warrant if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book-entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners.

(ii)                Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute securities depository is willing to undertake the functions of the Depository hereunder can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terms, or if the City determines that it is in the best interests of the City or the Beneficial Owners of the Warrant that the Beneficial Owners be able to obtain certificates for the Warrants, the Warrants shall no longer be registered as being registered in the Warrant register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Warrants shall designate at that time, in accordance with Section 7 hereof.  To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with Section 7 hereof, the Warrants will be delivered to the Beneficial Owners.

(iii)               Nothing in this subparagraph (iii) shall limit or restrict the provisions of Section 7 hereof.

3.07.        Letter of Representations.  The provisions in the Letter of Representation are incorporated herein by referenced and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representation shall control.

Section 4.  Form of Warrants.  The Warrants shall be prepared in substantially the following form, with appropriate variations, omissions and insertions as indicated by this resolution: 

UNITED STATES OF AMERICA

STATE OF MINNESOTA

COUNTY OF BIG STONE

CITY OF ORTONVILLE

PUBLIC UTILITY REVENUE REFUNDING WARRANT, SERIES 2003

No. R-_____                                                                                                       $_______________

REGISTERED OWNER:         CEDE & CO.

PRINCIPAL AMOUNT:        

THE CITY OF ORTONVILLE, County of Big Stone, State of Minnesota (the “City”), acknowledges itself to be indebted and, for value received, hereby promises to pay to the registered owner specified above, or registered assigns, solely from the Net Revenues of the Public Utility referred to below, the principal amount specified above, on the maturity date specified above, with interest thereon from the date of original issue specified above or from the most recent interest payment date to which interest has been paid or duly provided for, at the annual rate specified above, all subject to the provisions referred to herein with respect to the redemption of the principal of this Warrant before maturity.  Interest hereon is payable on February 1 and August 1 in each year, commencing August 1, 2003, to the person in whose name this Warrant is registered at the close of business on the 15th day (whether or not a business day) of the immediately preceding month.  The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, in St. Paul, Minnesota, as Registrar, Transfer Agent and Paying Agent (the “Registrar”), or its successor designated under the Resolution described herein.  So long as this Warrant is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of principal of, premium, if any, and interest on this Warrant and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution and surrender of this Warrant shall not be required for payment of the redemption price upon a partial redemption of this Warrant.  Until termination of the book-entry only system pursuant to the Resolution, Warrants may only be registered in the name of the Depository or its Nominee.

Issuance; Purpose; General Obligation.  This Warrant is one of an issue in the aggregate principal amount of $555,000 (the “Warrants”), issued pursuant to a resolution adopted by the City Council on March 17, 2003 (the “Resolution”), for the purpose of providing funds for a current refunding of the Issuer's Refunding Public Utility Revenue Warrants, Series 1993, dated September 22, 1993, which mature after February 1, 2003, and is issued pursuant to and in full conformity with the provisions of the City Charter and the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statutes, Chapter 475.  This Warrant and the interest thereon are payable solely from moneys on hand in the Revenue Warrant Account of the Public Utility Fund of the City (the “Revenue Warrant Account”), but this Warrant shall not constitute a lien on the property comprising the Public Utility.  The Warrants shall not constitute a general obligation of the City, and the full faith and credit and taxing powers of the City are not pledged for the payment of the Warrants and interest thereon, and no person shall ever have the right to compel the application of City moneys (other than Net Revenues) or the levy of ad valorem taxes for the payment of such principal and interest.  The Warrants are issuable only in fully registered form, in denominations of $5,000 or any multiple thereof of single maturities.

Redemption.  All Warrants of this issue (the "Warrants") maturing on February 1, 2010 and 2011, are subject to redemption and prepayment at the option of the City on February 1, 2009, and on any date thereafter at a price of par plus accrued interest.  Redemption may be in whole or in part of the Warrants subject to prepayment.  If redemption is in part, the City shall determine the maturities and the principal amounts within each maturity to be prepaid; and if only part of the Warrants having a common maturity date are called for prepayment, the specific Warrants to be prepaid shall be chosen by lot by the Registrar.  Warrants or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date.  Mailed notice of redemption shall be given to the paying agent and to each affected Holder of the Warrants.

Selection of Warrants for Redemption; Partial Redemption.  To effect a partial redemption of Warrants having a common maturity date, the Registrar shall assign to each Warrant having a common maturity date, a distinctive number for each $5,000 of the principal amount of such Warrant.  The Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion from the numbers assigned to the Warrants, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Warrants to be redeemed.  The Warrants to be redeemed shall be the Warrants to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Warrant of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected.  If a Warrant is to be redeemed only in part, it shall be surrendered to the Registrar (with, if the City or the Registrar so requires, a written instrument of transfer in form satisfactory to the City and the Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the City shall execute and the Registrar shall authenticate and deliver to the Holder of the Warrant, without service charge, a new Warrant or Warrants having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Warrant so surrendered.

Denominations; Exchange; Resolution.  The Warrants are issuable solely in fully registered form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully registered Warrants of other Authorized Denominations in equal aggregate principal amounts at the principal office of the Registrar, but only in the manner and subject to the limitations provided in the Resolution.  Reference is hereby made to the Resolution for a description of the rights and duties of the Registrar.  Copies of the Resolution are on file in the principal office of the Registrar.

Transfer.  This Warrant is transferable by the Holder in person or by the Holder's attorney duly authorized in writing at the principal office of the Registrar upon presentation and surrender hereof to the Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the City contained in any agreement with the Registrar.  Thereupon the City shall execute and the Registrar shall authenticate and deliver, in exchange for this Warrant, one or more new fully registered Warrants in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized Denomination or Denominations, in aggregate principal amount equal to the principal amount of this Warrant, of the same maturity and bearing interest at the same rate.

Fees upon Transfer or Loss.  The 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 Warrant and any legal or unusual costs regarding transfers and lost Warrants.

Treatment of Registered Owners.  The City and Registrar may treat the person in whose name this Warrant is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Warrant shall be overdue, and neither the City nor the Registrar shall be affected by notice to the contrary.

Authentication.  This Warrant shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Registrar.

Qualified Tax‑Exempt Obligations.  The Warrants have been designated by the City as "qualified tax‑exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.

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 City Charter, to be done, to exist, to happen and to be performed precedent to and in the issuance of this Warrant in order to make this Warrant a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed in regular and due form as so required; that in and by the Resolution the City has covenanted and agreed with the registered owners of the Warrants that, to the extent permitted by law, it will impose and collect charges for the service, use and availability of its municipal Public Utility at the times and in the amounts required to produce Net Revenues in each year during which the Warrants are outstanding at least equal to 125% of the principal and interest coming due on the Warrants and certain other outstanding obligations of the municipal Public Utility in such year and has pledged and appropriated said Net Revenues to the Revenue Warrant Account to the extent necessary to pay such principal and interest when due; that in and by the Resolution, the City has made other covenants for the security and payment of the Warrants, including the establishment and maintenance of a Debt Service Reserve Account and will at all times comply therewith; that the City has heretofore issued and may hereafter issue obligations having a lien on the Net Revenues on a parity with the Warrants, but only as permitted by the Resolution; and that the issuance of this Warrant does not cause the indebtedness of the City to exceed any charter, constitutional or statutory limitation.

IN WITNESS WHEREOF, the City of Ortonville, County of Big Stone, State of Minnesota, by its City Council, has caused this Warrant to be executed by the facsimile signatures of the Mayor and the City Clerk-Administrator.

Date of Registration:                             Registrable by:  U.S. BANK NATIONAL ASSOCIATION

Payable at:         U.S. BANK NATIONAL ASSOCIATION

_______________________                                     

REGISTRAR'S                                    CITY OF ORTONVILLE,

CERTIFICATE OF                             BIG STONE COUNTY, MINNESOTA

AUTHENTICATION

This Warrant is one of the

Warrants described in the                     /s/ Facsimile                                                     

Resolution mentioned                            Mayor

within.

/s/ Facsimile                                                    

City Clerk-Administrator

U.S. BANK NATIONAL ASSOCIATION,

Saint Paul, Minnesota,

Registrar

By____________________

  Authorized Signature

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this Warrant, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM ‑ as tenants in common

TEN ENT ‑ as tenants by the entireties

JT TEN ‑ as joint tenants with right of survivorship and not as tenants in common

UTMA ‑ _______________ as custodian for ___________________

                        (Cust)                                                   (Minor)

       under the _____________________ Uniform Transfers to Minors Act

                        (State)

Additional abbreviations may also be used though not in the above list.

ASSIGNMENT

For value received, the undersigned hereby sells, assigns and transfers unto _______________________________ the within Warrant and does hereby irrevocably constitute and appoint _________________ attorney to transfer the Warrant on the books kept for the registration thereof, with full power of substitution in the premises.

Dated:_____________________        ________________________________________________

Notice:             The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Warrant in every particular, without alteration or any change whatever.

Signature Guaranteed:  ___________________________

Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15(a)(2).

The Registrar will not effect transfer of this Warrant unless the information concerning the transferee requested below is provided.

Name and Address:          ________________________________________

                                         ________________________________________

                                         ________________________________________

(Include information for all joint owners if the Warrant is held by joint account.)

PREPAYMENT SCHEDULE

This Warrant has been prepaid in part on the date(s) and in the amount(s) as follows:

Section 5.  Execution; Temporary Warrants.  The Warrants shall be printed (or, at the request of the Purchaser, typewritten) and shall be executed on behalf of the City by the signatures of its Mayor and Clerk-Administrator and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed facsimile; and provided further that both of such signatures may be printed (or, at the request of the Purchaser, photocopied) facsimiles and the corporate seal may be omitted on the Warrants as permitted by law.  In the event of disability or resignation or other absence of either such officer, the Warrants may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer.  In case either such officer whose signature or facsimile of whose signature shall appear on the Warrants shall cease to be such officer before the delivery of the Warrants, 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.  The City may elect to deliver, in lieu of printed definitive warrants, one or more typewritten temporary warrants in substantially the form set forth above, with such changes as may be necessary