Item Description:
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Sale of approximately $3,100,000 of tax-exempt general obligation bonds for watershed district purposes; fixing the form and specifications thereof and providing for their execution, delivery and payment
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Resolution:
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BE IT RESOLVED, by the Board of Commissioners (the “Board”) of Hennepin County, Minnesota (the “County”), as follows:
1. Findings. In 2018, the Riley Purgatory Bluff Creek Watershed District (the “District”) adopted a capital improvement program as part of its 10-Year Watershed Management Plan, pursuant to Minnesota Statutes, Section 103B.231. The District adopted Resolution 23-072 Adopting Plan Amendment for Spring Road Conservation Project and Resolution 23-073 Ordering the Spring Road Conservation Project on November 16, 2023 to provide for certain additional capital improvement projects (the “Watershed Project”) to be included in the 10-Year Watershed Management Plan (as amended, the “Watershed Plan”). On August 14, 2025, the District adopted Resolution 25-046 (the “District Resolution”), by which the District requested long-term financing from the County for the Watershed Project, in accordance with Minnesota Statutes, Section 103B.251. In the District Resolution, the District covenanted to include the amount necessary to pay debt service on the County’s bonds in its annual levy certification.
Pursuant to authority granted by Minnesota Statutes, Section 103B.251 and Chapter 475, the Board deems it necessary and expedient to issue and sell approximately $3,100,000 in principal amount of General Obligation Bonds, Series 2025B (the “Bonds”), to the Watershed Project, contingent upon favorable market conditions, as determined by the Hennepin County Chief Financial Officer (the “Chief Financial Officer”), or the Hennepin County Administrator (the “County Administrator”), as further described below.
2. Determinations of the Board. The Board has made all necessary investigation and hereby finds and determines as follows:
(a) The Bonds shall be dated the date of issuance and shall bear interest at the rates determined by the successful proposer, payable semiannually on June 1 and December 1 in each year, commencing June 1, 2026, as set forth in the Certificate as to Terms of Bond Sale and Levy of Taxes (the “Certificate”) to be executed at closing by the Chair, the County Administrator, or the Chief Financial Officer. Execution of the Certificate or Certificates upon closing shall be conclusive evidence of the final adoption of the terms contained therein. The terms of the Certificate, when approved and finalized as evidenced by execution of the Certificate, are incorporated herein by reference.
(b) The Bonds shall mature on the dates and in the amounts set forth in the Official Terms and Conditions of Bond Sale, and as described in the Certificate; provided, however, the total principal amount of the Bonds shall not exceed $3,100,000, subject to adjustment for a premium sale price as permitted pursuant to Minnesota Statutes, Section 475.60, and the inclusion of costs of issuance as permitted pursuant to Minnesota Statutes, Section 475.67. The final maturity of the Bonds shall be not later than December 1, 2040.
(c) The Chief Financial Officer may permit prospective proposers to designate any portion of the principal of a series of Bonds to be combined within one or more term bonds subject to mandatory sinking fund redemption. The Bonds shall be subject to redemption and prior payment at the option of the County in whole or in part in such order of maturity as the County may determine on the date, at the price, and for the maturities provided in the Official Terms and Conditions of Bond Sale. Thirty days’ mailed notice of any such redemption shall be given to the registered owners of the Bonds pursuant to Minnesota Statutes, Chapter 475. The Bonds shall be numbered from R-1 upwards in order of issuance or in such other order as the Bond Registrar may determine and shall be in denominations of $5,000 each or any integral multiple thereof.
(d) The Chief Financial Officer or the County Administrator may re designate the Bonds authorized hereby as “General Obligation Bonds, Series 2025___,” completing the blank with an uppercase letter as appropriate for the order of such issuance and to eliminate any gaps in the designation of such series caused by the determination not to issue and sell any series of bonds, to issue and sell any series of bonds at a different time, to issue the Bonds in one or more series, or to not issue and sell any other series of bonds being considered by the County, including the General Obligation Bonds, Series 2025A General Obligation Refunding Bonds, Series 2025C; or General Obligation Refunding Bonds, Series 2025D.
3. Bond Sale. Electronic proposals for the Bonds will be received on a date and time determined by the Chief Financial Officer. The Board hereby delegates to the Chief Financial Officer, or his designee, authority to consider the proposals and award the sale to the best proposal, provided the true interest cost of the Bonds does not exceed 5.00% per annum. The Board hereby determines to sell the Bonds in accordance with the procedures set forth in the Official Terms and Conditions of Bond Sale. The County has retained PFM Financial Advisors LLC, Minneapolis, Minnesota (“PFM”), as independent municipal advisor, and pursuant to Minnesota Statutes, Section 475.60, Subdivision 2, paragraph (9), PFM is hereby authorized to solicit proposals for the Bonds on behalf of the County. The specifications set forth in the Official Terms and Conditions of Bond Sale may be revised by the Chief Financial Officer in consultation with PFM.
4. Registrar and Paying Agent. The Chief Financial Officer is hereby designated to act on behalf of the County as Bond Registrar, Transfer Agent and Paying Agent for the Bonds (the “Bond Registrar”).
5. Official Statement. The County staff, in cooperation with PFM, is hereby authorized and directed to prepare on behalf of the County an official statement to be distributed to potential purchasers of the Bonds. Such official statement shall contain the Official Terms and Conditions of Bond Sale for the Bonds, as set forth above, and such other information as shall be deemed advisable and necessary to describe adequately the County and the security for, and terms and conditions of, the Bonds. The final Official Statement shall be in the form approved by the County Administrator or Chief Financial Officer.
6. Continuing Disclosure. The Official Statement will contain an undertaking by the County to execute and deliver a Continuing Disclosure Certificate, substantially in the form approved by the County Administrator or the Chief Financial Officer. The Chief Financial Officer shall have overall responsibility for compliance with the Continuing Disclosure Certificate and other similar undertakings hereafter made by the County under Rule 15c2-12(b)(5) of the Securities and Exchange Commission, and the Chief Financial Officer shall implement the dissemination of reports and notices thereunder. Amendments to the Continuing Disclosure Certificate permitted by the undertakings may be made by the Chief Financial Officer. The Continuing Disclosure Certificate may be executed by the Chief Financial Officer or the County Administrator. The Continuing Disclosure Certificate proposed to be executed and delivered in connection with the Bonds is hereby approved and the undertakings set forth therein shall be deemed covenants for the benefit of the holders of the Bonds.
7. Ratings. The County staff is authorized and directed to obtain ratings of the Bonds from up to three nationally recognized credit rating services, to pay the reasonable and customary charges of such rating services, and to take such other actions as may be required so that the Bonds may be issued and sold as contemplated hereby.
8. Tax Levies.
(a) To pay the principal of and interest on the Bonds there is hereby levied upon all of the taxable property in the District a direct annual ad valorem tax which shall be spread upon the tax rolls and collected as a special taxing district levy and shall be paid into the Debt Service Fund (in any subaccount deemed desirable), which tax is collectible in the years and amounts equal to 105% of the principal and interest on the Bonds due in each year.
(b) It is hereby estimated that all such taxes described above, if collected in full, will produce amounts sufficient to pay 105% of principal of and interest on the Bonds when due. However, the Bonds are general obligations of the County, to the payment of which the full faith and credit and taxing power of the County are pledged, and the County will levy a general ad valorem tax on all taxable property in the County, if required for the purpose, without limitation as to rate or amount.
(c) The taxes required to be levied hereby and other funds appropriated to the Debt Service Fund for payment of the Bonds shall be held and used for no other purpose than to pay principal of and interest on the Bonds; provided, however, that if any payment of principal or interest shall become due when there is not sufficient money in the Debt Service Fund to pay the same, the County shall pay such principal or interest from the General Fund of the County and the General Fund may be reimbursed for such advances out of the proceeds of taxes herein required to be levied.
9. Application of Proceeds. On the date of delivery of the Bonds, the proceeds of the sale of the Bonds shall be used by the County as follows:
(a) To pay for, or reimburse the County or the District for payment of, a portion of the costs of the Watershed Project.
(b) To pay costs of issuance of the Bonds.
(c) Any accrued interest received from the purchaser of the Bonds, or any proceeds of the Bonds not needed for the above-mentioned uses, shall be deposited in the Debt Service Fund, to be used to pay interest on the Bonds.
10. Defeasance. When any Bonds have been discharged as provided in this section, all pledges, covenants and other rights granted by this Resolution to the holders of such Bonds shall cease, and such Bonds shall no longer be deemed to be outstanding under this Resolution. The County may discharge its obligations with respect to any Bond which is due on any date by depositing with the Paying Agent on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Paying Agent a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The County may also discharge its obligations with respect to any prepayable Bond according to its terms, by depositing with the Paying Agent on or before that date an amount equal to the principal, interest and redemption premium, if any, to become due thereon to maturity or the redemption date, provided that notice of such redemption has been duly given as provided herein. The County may also at any time discharge its obligations with respect to any Bond, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or irrevocable direct obligations of, or obligations fully guaranteed by, the United States of America, which are authorized by law to be so deposited, bearing interest payable at such times and at such rates and maturing on such dates and in such amounts as shall be required to pay all principal, interest and redemption premiums to become due thereon to maturity or the redemption date.
11. Tax Covenants. The County shall not take or permit any action that would cause the Bonds to be “private activity bonds” within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the “Code”). The County shall comply with the rebate requirements imposed under Section 148(f) of the Code and regulations thereunder, including (if applicable) the requirement to make periodic calculations of the amount subject to rebate thereunder and the requirement to make all required rebates to the United States with respect to the Bonds. In addition, the County shall make no investment of funds that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code. The Chief Financial Officer or County Administrator is authorized to make any elections or allocations relating to the Bonds and proceeds thereof which are permitted or required under the Code. All terms used in this paragraph 13 shall have the meanings provided in the Code and applicable Treasury Regulations thereunder.
12. Beneficiaries. The provisions of this Resolution shall be deemed covenants for the benefit of the registered owners, from time to time, of the Bonds.
13. Other Matters. As authorized by Minnesota Statutes, Section 475.60, this Board hereby delegates to the Chief Financial Officer authority to approve the final terms of a bid acceptance form or Purchase Agreement (if any), in consultation with PFM and Taft Stettinius & Hollister LLP, as bond counsel to the County (“Bond Counsel”). The Chair, the County Administrator, and the Chief Financial Officer, and their respective designees are further authorized and directed to take all necessary actions to cause the Bonds to be issued, executed and delivered as provided in this Resolution, and to prepare and furnish to the purchaser and Bond Counsel, certified copies of all proceedings and records relating to the issuance of the Bonds and to the right, power and authority of the County and its officers to issue the same, and said certified copies and certificates shall be deemed to be representations of the County as to all matters stated therein. The Chair, the County Administrator, and the Chief Financial Officer, and their designees are further authorized to take such other actions as may be required to effectuate the terms and intent of this Resolution.
The County Administrator shall furnish a certified copy of this Resolution, together with additional details of the terms of the sale and related tax levies, to the Hennepin County Auditor or Deputy County Auditor, and obtain the certificate required by Minnesota Statutes, Section 475.63.
14. Controller Actions. The Controller is hereby authorized to transfer and disburse funds as necessary to carry out the intent of this Resolution. The Controller is further authorized to adjust the 2025 or 2026 debt service budget and any other budget to reflect the issuance of the Bonds or the refunding or defeasing of bonds or as otherwise necessary to carry out the intent of this Resolution.
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Background:
This resolution authorizes the sale of tax-exempt new money general obligation bonds (the 2025B Bonds) in the total approximate principal amount of $3,100,000 by the County on behalf of the Riley Purgatory Bluff Creek Watershed District (the District). Proceeds of the 2025B Bonds will provide a portion of the funding needed by the District to complete its Spring Road Conservation Project, which was authorized in the District’s 10-Year Watershed Management Plan in 2023. The 2025B Bonds will be issued pursuant to Minnesota Statutes, 103B.251 and Chapter 475 which directs counties to provide financing for approved watershed management projects under certain circumstances. The 2025B Bonds will be issued as fixed rate obligations and mature in the years 2026 through 2040.
While the 2025B Bonds for the District will be issued by the County, the general obligation pledge to levy property taxes for payment of the debt service requirements of the 2025B Bonds is a District pledge through a separate resolution approved by the District in August 2025. Property taxes will be levied only on properties located within the boundaries of the District in Hennepin and Carver Counties. The 2025B Bonds would become a County liability if the District levy ever became insufficient to pay the debt service on the2025B Bonds.
Staff recommends that ratings for the 2025B Bonds be requested from two rating agencies: S&P Global and Fitch Ratings. This has been the County’s practice since 2013. Because the 2025B Bonds are being issued concurrently with other County bonds, the District will pay a pro rata share of the costs of issuing the combined issuance.
This resolution grants discretion to the Chief Financial Officer to establish the date of sales, modify the size of the issue, and approve the final terms of the bid. The County utilizes the services of PFM Financial Advisors LLC, its independent registered municipal advisor, and Taft Stettinius & Hollister LLP, as bond counsel, to assist in making these determinations.
recommendation
Recommendation from County Administrator: Recommend Approval