November 2

November 2, 2009

The Groton City Council met on the above date at City Hall at 7:00pm for their regular first monthly meeting with the following members present: Brotherton, Hendrickson, Hamilton, Nyberg, Anderson, and Mayor Olson presiding.

The minutes were approved as read on a motion by Brotherton and seconded by Hendrickson. All members present voted aye.

The financial report was approved as read on a motion by Nyberg and seconded by Hamilton. All members present voted aye.

The following bills were allowed for payment on a motion by Hamilton and seconded by Hamilton. All members present voted aye.

Executive Payroll 642.64 salaries
Administrative Payroll 7,661.69 salaries
Public Safety Payroll 9,405.08 salaries
Public Works Payrol 23,978.33 salaries
Cultural & Recreational Payroll 2,302.65 salaries
Wells Fargo 14,227.78 ss & wh
City of Groton 469.04 postage, emp sav, dep ref
Cons Fed Cred Union 1,600.00 emp savings
SD Suppl Retirement 775.00 supp retire
Office of Child Support 386.00 child support
US Post Office 146.83 postage
Aflac 506.36 emp group ins
Wellmark Ins 9,110.00 health ins
Beitelspacher, Lance 68.75 dep refund
Dale Dunker Estate 50.00 dep refund
Heartland Cons Power District 17,650.08 power
Herman House Moving 311.30 dep refund
Lowary, John 11.00 mileage
Mueller, Sara Raap 25.72 dep refund
NECOG 180.00 reg
Nelson, Mary Ann 44.15 dep refund
Pauna, Myron 68.75 dep refund
Rock, Sue 50.00 dep refund
Safety Benefits 55.00 conf reg
Sippel, Jeff 66.53 dep refund
Spitzer, Henry & Nicole 77.10 dep refund
Tveit, Charlie 396.00 mileage
United Accounts 50.00 emp savings
WAPA 22,715.30 power
Wiseman, Dustin 100.00 dep refund
Abeln, April 26.00 meals
Avera 58.50 testing
Border States 774.12 materials
Bound Tree 679.21 RS supplies
Chase Visa 850.14 camera, motel, program, totes, pins
Clark Engineering 6,051.89 engineering
Cleveland, Justin 22.00 mileage
Cannon/Cooper 145.15 repairs
Dacotah Bank 14,066.05 03 C&G loan
Dakota Press 310.30 publishing
Dakota Supply Group 738.07 materials
Darrel's Sinclair 45.65 nozzle
Diesel Machinery 18.27 dsl
Discover 72.79 candy, tape, baskets
Duane's 651.51 gas, dsl
Ellwein Brothers 4,765.30 beer
Fargo Tire Service 487.36 tires
Farmer's Union 123.00 gas
Federal Signal Corp 12,159.28 siren, batteries
Galls 118.96 uniforms
Groton Independent 160.25 publishing
Groton Senior Citizens 275.00 cc cleaning
Heartland Cons Power Dist 1,537.34 breaker loan
Heartland Waste 4,798.05 garbage hauling
James Valley Tele 707.21 phone
Johnson Bros Famous Brands 11,282.89 liquor
Johnson, Drew 1,450.00 legal services
Larson, Nancy 367.92 motel
Lawson Products 554.36 bolts
Lori's Pharmacy 116.65 supplies
Lowary, Anita 227.30 meals, mileage
Meierhenry Sargent 9,800.00 bond doc
NWPS 1,476.54 power del
NW Energy 26.17 nat gas
Office Max 37.99 ink
One Call 28.35 locates
Porter Dist Co 1,581.50 beer
Railroad Management Co 299.48 space rent
Republic Bev Co 3,390.26 liquor
Ringgenberg, Dale 392.92 motel & reg
Runnings 27.95 twine
S&S Lumber 339.58 supplies
SD Retirement 7,245.66 retirement
SD Dept of Health 336.00 testing
SDEMT Assoc 345.00 conf registration
SD State Treasurer 7,345.26 sales tax
SD Work Comp 15,353.00 work comp ins
Share Corp 145.73 cleaner
St Paul Stamp Works 100.57 dog lic
Trail Chevrolet 4.20 bulb
Tveit, Charlie 396.00 mileage
United Lease & Finance 63,482.37 pool rent
WEB Water 9,878.73 water
Wells Fargo Brokerage 8,359.96 01 C&G loan
Wells Fargo Brokerage 8,182.00 06 C&G loan
Winwater 2,109.79 fittings
Woods, Patty 367.92 motel
Wright & Sudlow 84,293.94 C&G const

Department reports were given.

Betty Breck came before the Council to discuss the division of the bill with Marc Hanson for cleaning the culvert on N 5th St. She also requested a list of all decisions made by the Mayor.
Shawna Bogart and Elsie Porter came before the Council to request forgiveness of the new monthly sewer charge which was based on their water usage when they had a running toilet. Moved by Hendrickson and seconded by Nyberg to change their monthly charge from $152 to $21 per month. All members present voted aye.

Letters were read notifying the City that the electric generation plant, Big Stone II, would not be built.

Moved by Hamilton and seconded by Brotherton to pass the following resolution authorizing the Drinking Water SRF loan which will all be forgiven. All members present voted aye.
RESOLUTION NO. 09-112-1
RESOLUTION GIVING APPROVAL TO CERTAIN DRINKING WATER FACILITIES IMPROVEMENTS; GIVING APPROVAL TO THE ISSUANCE AND SALE OF A REVENUE BOND TO FINANCE, DIRECTLY OR INDIRECTLY, THE IMPROVEMENTS TO THE FACILITIES; APPROVING THE FORM OF THE LOAN AGREEMENT AND THE REVENUE BOND AND PLEDGING CERTAIN REVENUES AND COLLATERAL TO SECURE THE PAYMENT OF THE REVENUE BOND; AND CREATING SPECIAL ACCOUNTS FOR THE ADMINISTRATION OF FUNDS FOR OPERATION OF THE SYSTEM AND RETIREMENT OF THE REVENUE BOND.

WHEREAS, one of the purposes of SDCL Chapter 9-40 (the "Act") as found and determined by the Legislature is to provide for financing the acquisition, maintenance, operation, extension or improvement of any system or part of any system of waterworks for the purpose of providing water and water supply for domestic, municipal, and industrial purposes; or any system for the collection, treatment and disposal of sewage and other domestic, commercial and industrial wastes; or any system for the control of floods and drainage; or any combination thereof, together with extensions, additions, and necessary appurtenances; and,

WHEREAS, a municipality is authorized to issue revenue bonds to fund improvements, extensions and additions to its water system by SDCL 9-40-6 and is authorized to pledge the net income or revenues from the system to secure such bonds; and,

WHEREAS, the City of Groton (the "City") currently operates a water distribution system to supply municipal, industrial and domestic water to its inhabitants and has determined that improvements to the drinking water facilities are necessary for the conduct of its governmental programs and qualifies as an improvement, extension or addition to its drinking water system; and,

WHEREAS, the City has determined to issue its revenue bonds to finance the improvements to its system for the purpose of providing water and water supply for domestic, municipal, and industrial purposes (the "System") and has applied for a Loan to finance the improvements;

NOW THEREFORE BE IT RESOLVED by the City as follows:

SECTION 1. Declaration of Necessity and Determination of Facilities Financed. The City desires and hereby determines it is necessary to construct improvements to its drinking water facilities within its System, as described in Exhibit A hereto (the "Project"). The City hereby expressly finds that if the Project is not undertaken, the System will pose a health hazard to the City and its inhabitants, and will make the City unable to comply with state and federal law. Because of the functional interdependence of the various portions of the System, the fact that the System may not lawfully operate unless it complies with state and federal laws, including SDCL Chapter 34A-3A, and the federal Safe Drinking Water Act, and the nature of the improvements financed, the City hereby determines that the Projects will substantially benefit the entire System and all of its users within the meaning of SDCL 9-40-15 and SDCL 9-40-17. Therefore the City hereby determines that for the purposes of the Act, including, in particular, SDCL 9-40-17, the net income or revenues of the entire System shall be pledged to and for the payment of the bonds issued hereunder.

SECTION 2. Approval of Loan. The City hereby determines to finance up to $272,000 of the costs of the Project through the issuance of utility revenue bonds (the "Revenue Bond").

SECTION 3. Approval of Loan Agreement. The execution and delivery of the Revenue Obligation Loan Agreement (the "Loan Agreement") between the City as Borrower and the South Dakota Conservancy District (the "District"), is hereby in all respects authorized, approved and confirmed, and the Mayor and Finance Officer are hereby authorized and directed to execute and deliver the Loan Agreement in the form and content attached hereto, with such changes as the Attorney for the City deems appropriate and approves, for and on behalf of the City. The Mayor and Finance Officer are hereby further authorized and directed to implement and perform the covenants and obligations of the City set forth in or required by the Loan Agreement. The Loan Agreement herein referred to and made a part of this Resolution is on file in the office of the Finance Officer and is available for inspection by any interested party.

SECTION 4. Approval of Revenue Bonds. The issuance of the Revenue Bond in aggregate principal amount not to exceed $272,000 with up to 100% principal forgiveness as determined according to the Loan Agreement in the form and content set forth in Appendix B attached to the form of Loan Agreement shall be and the same is, in all respects, hereby authorized, approved, and confirmed and the Mayor, Finance Officer, and other appropriate officials shall be and are hereby authorized and directed to execute and seal the Revenue Bond and deliver the Revenue Bond to the District, for and on behalf of the City, upon receipt of the purchase price, and to use the proceeds thereof in the manner set forth in the Loan Agreement. The Mayor and Finance Officer are hereby authorized to approve the final terms of the Revenue Bond and their execution and delivery thereof shall evidence that approval. The Revenue Bond shall be issued under the authority of SDCL Chapter 9-40 and SDCL Chapter 6-8B, and the provisions of the Act are hereby expressly incorporated herein as provided in SDCL 9-40-19.

SECTION 5. Paying Agent/Registrar. The Revenue Bond shall be payable at the office of The First National Bank in Sioux Falls, Sioux Falls, South Dakota, hereby designated as paying agent and registrar. The Mayor and Finance Officer are authorized to execute such documents as they deem necessary to retain The First National Bank in Sioux Falls.

SECTION 6. System Fund Accounts. For the purpose of application and proper allocation of the income of the System and to secure the payment of principal of the Revenue Bond, the following mandatory segregation accounts shall be used solely for the following respective purposes until payment in full of the principal of the Revenue Bond:

(a) Revenue Account. There shall be deposited in the Revenue Account as received the entire gross revenues derived from the operation of the System collected pursuant to the ordinances or regulations of the City Council of City of Groton, South Dakota (the "Rate Ordinance") including future improvements, enlargements, extensions and repairs thereto (the "Gross Revenues"). Moneys from the System Revenue Account shall be transferred periodically into separate accounts as provided below.

(b) Operation and Maintenance Account. There shall be established the General Operation and Maintenance Account. Out of the remaining revenues of the System Revenue Account after application described in (c) and (d) below, there shall be set aside each month into the General Operation and Maintenance Account, a sum sufficient to provide for the payment of the next month's current expenses of administration and operation of the remainder of the System and such current expenses for the maintenance thereof as may be necessary to preserve the remainder of such System in good repair and working order. The term current expenses shall be construed to include all reasonable and necessary costs of operating, repairing, maintaining and insuring the System, including without limitation salaries, supplies and rent t, but shall exclude General Depreciation Account and System Debt Service Account.

(c) System Debt Service Account. Out of the revenues in the System Revenue Account, there shall be set aside no later than the 25th day of each month into the account designated System Debt Service Account, a sum sufficient to provide for the payment as the same become due of the next maturing principal, the Revenue Bond and any reserve determined by the City Council to be necessary. The amount set aside monthly shall be not less than one-third of the total principal and other amounts payable on the following January 15, April 15, July 15, or October 15 and if there shall be any deficiency in the amount previously set aside, then the amount of such deficiency shall be added to the current requirement.

(d) Depreciation Account. There shall be established a General Depreciation Account. Out of the revenues of the System Revenue Account there shall be set aside each month into the General Depreciation Account an amount determined by the City Council to be a proper and adequate amount for repair and depreciation of the System.

(e) Surplus Account. There shall be established the General Surplus Account. Revenues remaining in the System Revenue Account at the end of any fiscal year after all periodic transfers have been made therefrom as above required, shall be deemed to be surplus and shall be credited to the General Surplus Account. If at any time there shall exist any default in making any periodic transfer to the System Debt Service Account, the City Council shall authorize the City Finance Officer to rectify such default so far as possible by the transfer of money from the General Surplus Account. If any such default shall exist as to more than one account at any time, then such transfer shall be made in the order such accounts are listed above.

When not required to restore a current deficiency in the System Debt Service Account, moneys in the General Surplus Account from time to time may be used for any of the following purposes and not otherwise:

i. To redeem and prepay the Revenue Bond when and as such Revenue Bond become prepayable according to its terms;

ii. To pay for repairs of or for the construction and installation of improvements or additions to the System; and, if the balances in the System Debt Service Account and the Depreciation Account are sufficient to meet all payments required or reasonably anticipated to be made there from prior to the end of the then current fiscal year, then:

iii. To be held as a reserve for redemption and prepayment of any bonds of the System which are not then but will later be prepayable according to their terms; or

iv. To be used for any other authorized municipal purpose designated by the City Council.

No moneys shall at any time be transferred from the General Surplus Account or any other account to any other account of the City, nor shall such moneys at any time be loaned to other municipal funds or invested in warrants, special improvements bonds or other obligations payable from other funds, except as allowed by this Section.

SECTION 7. Pledge of Revenues. The Revenue Bond shall not constitute a charge against the City's general credit or taxing power, but shall be a limited obligation of the City payable solely out of the System Debt Service Account, which payments, revenues and receipts are hereby and in the Loan Agreement pledged and assigned for the equal and ratable payments of the Revenue Bond and shall be used for no other purpose than to pay the principal of the Revenue Bond, except as may be otherwise expressly authorized in the Loan Agreement (including the purpose of securing Additional Bonds issued as permitted by the terms thereof). The City covenants and agrees to charge rates for all services from the System or establish special charges or surcharges which will be sufficient to provide for the payments upon the Revenue Bond issued hereunder as and when the same become due, and as may be necessary to provide for the operation and maintenance and repairs of the System, and depreciation, and the Rate Ordinance shall be revised from time to time so as to produce these amounts. The City hereby reserves the right to determine on a periodic basis the appropriate allocation of operation and maintenance expenses, depreciation, repair and reserves associated with the facilities financed with the Revenue Bond, provided that such determination of allocable operation and maintenance expenses shall in no event abrogate, abridge or otherwise contravene the covenant of the City set forth in this Section 8 or any other covenant or agreement in the Loan Agreement.

SECTION 8. Additional Bonds. As permitted by SDCL 9-40-8 and SDCL 9-40-9, additional Bonds payable from revenues and income of the System may be issued, as permitted in the Loan Agreement and no provision of this Resolution shall have the effect of restricting the issuance of, or impairing the lien of, such additional parity bonds with respect to the net revenues or income from the extensions, additions or improvements. The City shall have the right to issue additional bonds secured by a lien subordinate to the lien from the Revenue Bond pursuant to the Loan Agreement.

SECTION 9. General Covenants.

(a) The City hereby covenants and agrees with the District and other owners of the Revenue Bond that it will punctually perform all duties with reference to the Project, the System and the Revenue Bond required by the constitution and laws of the State of South Dakota and by this Resolution.

(b) The City agrees and covenants that it will promptly construct the improvements included in the Project.

(c) The City covenants and agrees that pursuant to SDCL 9-40-28 and SDCL 9-40-29, the lawful holders of the Revenue Bond shall have a statutory mortgage lien upon the System and the extensions, additions and improvements thereto acquired pursuant to the Act, until the payment in full of the principal on the Revenue Bond, and the City agrees not to sell or otherwise dispose of the System, the Project, or any substantial part thereof, except as provided in the Loan Agreement and shall not establish, authorize or grant a franchise for the operation of any other utility supplying like products or services in competition therewith, or permit any person, firm or corporation to compete with it in the collection and treatment of wastewater for municipal, industrial, and domestic purposes within the City.

(d) The City covenants and agrees with the District and other owners of the Revenue Bond that it will maintain the Project and the System in good condition and operate the same in an efficient manner and at a reasonable cost, so long as any portion of the Revenue Bond remain outstanding; that it will maintain insurance on the System for the benefit of the holders of the Revenue Bond in an amount which usually would be carried by private companies in a similar type of business; that it will prepare, keep and file records, statements and accounts as provided for in this Resolution and the Loan Agreement. The Revenue Bond shall refer expressly to this Resolution and the Act and shall state that it is subject to all provisions and limitations thereof pursuant to SDCL 9-40-19.

(e) The Finance Officer shall cause all moneys pertaining to the Accounts to be deposited as received with one or more banks which are duly qualified public depositories under the provisions of SDCL Ch. 4-6A, in a deposit account or accounts, which shall be maintained separate and apart from all other accounts of the City, so long as any of the Revenue Bond shall remain unpaid. Any of such moneys not necessary for immediate use may be deposited with such depository banks in savings or time deposits. No money shall at any time be withdrawn from such deposit accounts except for the purposes of the Accounts as authorized in this Resolution; except that moneys from time to time on hand in the Accounts may at any time, in the discretion of the City's governing body, be invested in securities permitted by the provisions of SDCL 4-5-6; provided, however, that the Depreciation Account may be invested in such securities maturing not later than ten years from the date of the investment. Income received from the deposit or investment of moneys shall be credited to the Account from whose moneys the deposit was made or the investment was purchased, and handled and accounted for in the same manner as other moneys therein.

(f) In the event of mismanagement of the System, a default in the payment of the principal of the Revenue Bond, or in any other condition thereof materially affecting the lawful holder of the Revenue Bond, or if the revenues of the Project or System are dissipated, wasted or diverted from their proper application as set forth in the Loan Agreement, Revenue Bond, or herein, the City hereby consents to the appointment of a receiver pursuant to SDCL 9-40-33, and agrees that the receiver will have the powers set forth therein, and in SDCL 9-40-34 and SDCL 9-40-35 to operate and administer the System, and charge and collect rates as described therein.

SECTION 10. Issuance without Election. The City hereby determines that because the Revenue Bond is issued in connection with a financing agreement described in SDCL 46A-1-49, pursuant to SDCL 9-40-15 no election is required to issue the Revenue Bond.

SECTION 11. Severability. If any section, paragraph, clause or provision of this Resolution, the Loan Agreement, the Revenue Bond, or any other Loan Document shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Resolution or said Loan Agreement, Revenue Bond, or any other Loan Document.

SECTION 12. Authorization of City Officials. The Mayor, Finance Officer, City Attorney and City officials shall be and they are hereby authorized to execute and deliver for and on behalf of the City any and all other certificates, documents or other papers and to perform such other acts as they may deem necessary or appropriate in order to implement and carry out the actions authorized herein.

SECTION 13. Definitions. All terms used in this Resolution which are not defined herein shall have the meanings assigned to them in the Loan Agreement unless the context clearly otherwise requires.

SECTION 14. Principal Forgiveness. In order to qualify for up to 100% of the total principal amount of the Loan forgiven in an amount not to exceed $272,000 City officials are directed to cause the compliance with the following deadlines:

(a) Advertise for bids and open bids for the project in accordance with SDCL Chapter 5-18 on or before December 10, 2009;

(b) Submit the bid of the apparent lowest bidder to the Department for review on or before December 21, 2009; and

(c) Execute construction contracts on or before February 1, 2010.

SECTION 15. Effective Date. This Resolution shall take effect on the 20th day following its publication, unless suspended by a referendum.

Moved by Nyberg and seconded by Anderson to pass the following resolution authorizing the Clean Water SRF loan which will have a portion forgiven. All members present voted aye.
RESOLUTION NO. 09-112-2
RESOLUTION GIVING APPROVAL TO CERTAIN SEWER FACILITIES IMPROVEMENTS; GIVING APPROVAL TO THE ISSUANCE AND SALE OF A REVENUE BOND TO FINANCE, DIRECTLY OR INDIRECTLY, THE IMPROVEMENTS TO THE FACILITIES; APPROVING THE FORM OF THE LOAN AGREEMENT AND THE REVENUE BOND AND PLEDGING REVENUES AND COLLATERAL TO SECURE THE PAYMENT OF THE REVENUE BOND; AND CREATING SPECIAL FUNDS AND ACCOUNTS FOR THE ADMINISTRATION OF FUNDS FOR OPERATION OF THE SYSTEM AND RETIREMENT OF THE REVENUE BOND.

WHEREAS, one of the purposes of SDCL Chapter 9-40 (the "Act") as found and determined by the Legislature is to provide for financing the acquisition, maintenance, operation, extension or improvement of any system or part of any system for the collection, treatment and disposal of sewage and other domestic, commercial and industrial wastes; or any system for the control of floods and drainage; or any combination thereof, together with extensions, additions, and necessary appurtenances; and,

WHEREAS, a municipality is authorized to issue revenue bonds to defray the cost of extensions, additions and improvements to any utility previously owned and is authorized to pledge the net income or revenues from the system in accordance with Section 15 of the Act; and,

WHEREAS, the City of Groton (the "City") currently operates a sewer system for the collection, treatment and disposal of sewage and other domestic, commercial and industrial wastes; and for the control of floods and drainage and has determined that improvements to the sewer facilities are necessary for the conduct of its governmental programs and qualifies as an improvement, extension or addition to its sewer system; and,

WHEREAS, the City has determined to issue its revenue bonds to finance the improvements to its sewer system for the purpose of collecting, treating and disposing of sewage and other domestic, commercial and industrial wastes (the "System") and has applied to the South Dakota Conservancy District (the "District") for a Clean Water State Revolving Fund Loan to finance the improvements;

WHEREAS, the City will adopt rates and charges to be pledged, segregated and used for the payment of the Revenue Bond.

NOW THEREFORE BE IT RESOLVED by the City as follows:

SECTION 1. Definitions. The terms when used in this Resolution shall have the following meanings set forth in this section unless the context clearly requires otherwise. All terms used in this Resolution which are not defined herein shall have the meanings assigned to them in the Loan Agreement unless the context clearly otherwise requires.
"Act" means South Dakota Codified Laws Chapter 9-40.
"Loan" means the Loan made by the South Dakota Conservancy District to the City pursuant to the terms of the Loan Agreement and as evidenced by the Revenue Bond.
"Project" means City of Groton Sanitary Sewer Project.
"Revenue Bond" means the revenue bond or bonds issued the date of the Loan Agreement by the City to the South Dakota Conservancy District to evidence the City's obligation to repay the principal of and pay interest and Administrative Expense Surcharge on the Loan.
"System" means the City's system of collecting, treating and disposing of sewage and other domestic, commercial and industrial wastes.

SECTION 2. Declaration of Necessity and Findings.

2.1. Declaration of Necessity. The City hereby determines and declares it is necessary to construct and finance improvements to its System described as the Project.

2.2. Findings. The City does hereby find as follows:

2.2.1. The City hereby expressly finds that if the Project is not undertaken, the System will pose a health hazard to the City and its inhabitants, and will make the City unable to comply with state and federal law.

2.2.2. Because of the functional interdependence of the various portions of the System, the fact that the System may not lawfully operate unless it complies with State and federal laws, including SDCL Chapter 34A-2, and the federal Clean Water Act, and the nature of the improvements financed, the City hereby finds and determines that the Project will substantially benefit the entire System and all of its users within the meaning of Sections 15 and 17 of the Act.
2.2.3. The City hereby determines and finds that for the purposes of the Act, including, in particular, Sections 15 and 17 of the Act, the only the net income from the system as improved, financed by the Revenue Bond, be pledged for its payment.

SECTION 3. Authorization of Loan, Pledge of Revenue and Security.

3.1. Authorization of Loan. The City hereby determines and declares it necessary to finance up to $707,200 of the costs of the Project through the issuance of bonds payable from net revenues of the system and other funds secured by the City. The City hereby determines that because the Revenue Bond is issued in connection with a financing agreement described in SDCL 46A-1-49, pursuant to Section 15 of the Act no election is required to issue the Revenue Bond.

3.2. Approval of Loan Agreement. The execution and delivery of the Revenue Obligation Loan Agreement (the "Loan Agreement"), the form of which is on file with the City Finance Officer (the "Finance Officer") and open to public inspection, between the City as Borrower and the District, is hereby in all respects authorized, approved and confirmed, and the Mayor and Finance Officer are hereby authorized and directed to execute and deliver the Loan Agreement in the form and content attached hereto, with such changes as the Attorney for the City deems appropriate and approves, for and on behalf of the City. The Mayor and Finance Officer are hereby further authorized and directed to implement and perform the covenants and obligations of the City set forth in or required by the Loan Agreement. The Loan Agreement herein referred to and made a part of this Resolution is on file in the office of the Finance Officer and is available for inspection by any interested party.

3.3. Approval of Revenue Bond. The issuance of a revenue bond in a principal amount not to exceed $707,200 as determined according to the Loan Agreement in the form and content set forth in Appendix B attached to the form of Loan Agreement (the "Revenue Bond") shall be and the same is, in all respects, hereby authorized, approved, and confirmed and the Mayor, Finance Officer, and other appropriate officials shall be and are hereby authorized and directed to execute and seal the Revenue Bond and deliver the Revenue Bond to the District, for and on behalf of the City, upon receipt of the purchase price, and to use the proceeds thereof in the manner set forth in the Loan Agreement. The Mayor and Finance Officer are hereby authorized to approve the final terms of the Revenue Bond and their execution and delivery thereof shall evidence that approval. The Revenue Bond shall be issued under the authority of SDCL Chapter 9-40 and SDCL Chapter 6-8B, and the provisions of the Act are hereby expressly incorporated herein as provided in Section 19 of the Act.

3.4. Pledge of Revenues. The Revenue Bond together with the interest thereon, shall not constitute a charge against the City's general credit or taxing power, but shall be a limited obligation of the City payable solely out of the Project Debt Service Account, which payments, revenues and receipts are hereby and in the Loan Agreement pledged and assigned for the equal and ratable payments of the Revenue Bond and shall be used for no other purpose than to pay the principal of, interest and Administrative Surcharge on the Revenue Bond, except as may be otherwise expressly authorized in the Loan Agreement (including the purpose of securing Additional Bonds issued as permitted by the terms thereof). The City hereby irrevocably pledges to the South Dakota conservancy District all income and revenues of the System, including, without limitation, fees, charges to users of the System, penalties and hook-up fees, sign-up fees, proceeds of business interruption insurance, proceeds from the sale of property constituting part of the System and investment income on all such revenues, but only to the extent that the revenues exceed the amounts necessary to operate and maintain the System, provided there shall be excluded from this pledge the proceeds of any federal or state grant or loan, and the investment income therefrom, to the extent such exclusion is a condition of such grant or loan. The City covenants and agrees to charge rates for all services from the System or establish charges or rates which will be sufficient to provide for the payments upon the Revenue Bond issued hereunder as and when the same become due, and as may be necessary to provide for the operation and maintenance and repairs of the System, and depreciation, and the Rate Ordinance shall be revised from time to time so as to produce these amounts. The City hereby reserves the right to determine on a periodic basis the appropriate allocation of operation and maintenance expenses, depreciation, repair and reserves associated with the facilities financed with the Revenue Bond, provided that such determination of allocable operation and maintenance expenses shall in no event abrogate, abridge or otherwise contravene the covenant of the City set forth in this Section 3 or any other covenant or agreement in the Loan Agreement.

SECTION 4. Rates, Certification, Segregation and Review.

4.1. Rates and collection There shall be charged rates for each fiscal year which shall ensure that its Net Revenues Available for Debt Service will equal at least 110% of its System Debt Service for such fiscal year.

4.2. Certification. In each fiscal year, or as soon as practicable, and in any event by the date of the delivery of the unaudited financial statements required in the Loan Agreement, the City shall (a) calculate its Net Revenues Available for Debt Service and System Debt Service for the fiscal year, and (b) certify such figures to the South Dakota Conservancy District. The certification described in clause (b) of the preceding sentence shall be substantially in the form of the certificate attached as Appendix E to the Loan Agreement. If the City fails to meet the Rate Covenant set forth in Section 6.4 of the Loan Agreement, the City shall supply the District with quarterly reports on the actions it is taking to correct its coverage deficiency until it delivers an annual coverage certificate showing compliance with the first sentence of this Section.

4.3. Segregation. The Finance Officer shall setup bookkeeping accounts in accordance with South Dakota Legislative Audit guidelines for the segregation of the revenue.

4.4. Periodic review. The sewer rates shall be reviewed from time to time, not less than yearly, and shall be modified in order to produce such funds as are necessary and required to comply with the Loan Agreement's rate covenant and to pay principal of, interest and Administrative Surcharge on the Revenue Bond when due. The rates may be set by ordinance or resolution in accordance with this Section. The rate ordinance or resolution shall be necessary for the support of government and shall be effective upon passage.

SECTION 5. Additional Bonds. As permitted by Section 8 and 9 of the Act, Additional Bonds payable from revenues and income of the System may be issued, as permitted in the Loan Agreement, and no provision of this Resolution shall have the effect of restricting the issuance of, or impairing the lien of, such additional parity bonds with respect to the net revenues or income from the extensions, additions or improvements. The City shall have the right to issue additional bonds secured by a lien subordinate to the lien from the Revenue Bond pursuant to the Loan Agreement.

SECTION 6. Project Fund Accounts. For the purpose of application and proper allocation of net income of the System and to secure the payment of principal, Administrative Surcharge and interest on the Revenue Bond, the following mandatory asset segregations shall be included in the sewer system account of the City and shall be used solely for the following respective purposes until payment in full of the principal of and interest on the Revenue Bond:

6.1. Project Revenue Account. There shall be deposited periodically into the Project Revenue Account the net revenues as defined in Section 17 of the Act derived from the operation of the Project collected pursuant to the Ordinances and resolutions of the City of City of Groton, South Dakota (collectively the "Rate Ordinance"). Moneys from the Project Revenue Account shall be transferred periodically into separate funds and accounts as provided below.

6.2. Project Debt Service Account. Out of the revenues in the Project Revenue Account, there shall be set aside no later than the 25th day of each month into the account designated Project Debt Service Account, a sum sufficient to provide for the payment as the same become due of the next maturing principal of, interest and Administrative Surcharge on the Revenue Bonds and any reserve determined by the City's governing body to be necessary. The amount set aside monthly shall be not less than one-third of the total principal, interest, and Administrative Surcharge payable on the following January 15, April 15, July 15, or October 15 and if there shall be any deficiency in the amount previously set aside, then the amount of such deficiency shall be added to the current requirement.

6.3. Depreciation Account. There shall be established a General Depreciation Account. Out of the revenues of the Project Revenue Account there shall be set aside each month into the General Depreciation Account an amount determined by the Common Council to be a proper and adequate amount for repair and depreciation of the Project.

6.4. Project Surplus Account. There shall be established the Project Surplus Account. Revenues remaining in the Project Revenue Account at the end of any fiscal year after all periodic transfers have been made therefrom as above required, shall be deemed to be surplus and shall be transferred to the Project Surplus Account. If at any time there shall exist any default in making any periodic transfer to the Project Debt Service Account, the Common Council shall authorize the City Finance Officer to rectify such default so far as possible by the transfer of money from the Project Surplus Account. If any such default shall exist as to more than one account or fund at any time, then such transfer shall be made in the order such funds and accounts are listed above.

When not required to restore a current deficiency in the Project Debt Service Account, moneys in the Project Surplus Account from time to time may be used for any of the following purposes and not otherwise:

(a) To redeem and prepay the Revenue Bond when and as such Revenue Bond becomes prepayable according to its terms;

(b) To pay for repairs of or for the construction and installation of improvements or additions to the System; and, if the balances in the Project Debt Service Account and the Project Depreciation Account are sufficient to meet all payments required or reasonably anticipated to be made there from prior to the end of the then current fiscal year, then:

(c) To be held as a reserve for redemption and prepayment of any bonds of the System which are not then but will later be prepayable according to their terms; or

(d) To be used for any other authorized municipal purpose designated by the Common Council.

(e) No moneys shall at any time be transferred from the Project Surplus Account or any other account of the Fund to any other fund of the City, nor shall such moneys at any time be loaned to other municipal funds or invested in warrants, special improvements bonds or other obligations payable from other funds, except as provided in this Section.

SECTION 7. Approval of Paying Agent/Registrar. The Revenue Bond shall be payable at the office of The First National Bank in Sioux Falls, Sioux Falls, South Dakota, hereby designated as paying agent and registrar.

SECTION 8. Approval of Bond Counsel. Meierhenry Sargent LLP is hereby retained as Bond Counsel with respect to the Revenue Bond.

SECTION 9. Tax Matters. The Interest on the Revenue Bond shall be excludable from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended ("the Code") and applicable Treasury Regulations (the "Regulations").

SECTION 10. Covenants. The City hereby covenants and agrees with the District and other owners of the Revenue Bond as follows:

10.1. The City will punctually perform all duties with reference to the Project, the System and the Revenue Bond required by the constitution and laws of the State of South Dakota and by this Resolution.

10.2. The City agrees and covenants that it will promptly construct the improvements included in the Project.

10.3. The City covenants and agrees that pursuant to Sections 25 through 27 of the Act, the lawful holders of the Revenue Bond shall have a statutory mortgage lien upon the Project and the extensions, additions and improvements thereto acquired pursuant to the Act, until the payment in full of the principal and interest on the Revenue Bond, and the City agrees not to sell or otherwise dispose of the System, the Project, or any substantial part thereof, except as provided in the Loan Agreement and shall not establish, authorize or grant a franchise for the operation of any other utility supplying like products or services in competition therewith, or permit any person, firm or corporation to compete with it in the distribution of water for municipal, industrial, and domestic purposes within the City.

10.4. The City covenants and agrees with the District and other owners of the Revenue Bond that it will maintain the System in good condition and operate the same in an efficient manner and at a reasonable cost, so long as any portion of the Revenue Bond remains outstanding; that it will maintain insurance on the System for the benefit of the holders of the Revenue Bond in an amount which usually would be carried by private companies in a similar type of business; that it will prepare, keep and file records, statements and accounts as provided for in this Resolution and the Loan Agreement. The Revenue Bond shall refer expressly to this Resolution and the Act and shall state that it is subject to all provisions and limitations thereof pursuant to Series 19 of the Act.

SECTION 11. Depositories. The Finance Officer shall cause all moneys pertaining to the Funds and Accounts to be deposited as received with one or more banks which are duly qualified public depositories under the provisions of SDCL Ch. 4-6A, in a deposit account or accounts, which shall be maintained separate and apart from all other accounts of the City, so long as any of the Bonds and the interest thereon shall remain unpaid. Any of such moneys not necessary for immediate use may be deposited with such depository banks in savings or time deposits. No money shall at any time be withdrawn from such deposit accounts except for the purposes of the Funds and Accounts as authorized in this Resolution; except that moneys from time to time on hand in the Funds and Accounts may at any time, in the discretion of the City's governing body, be invested in securities permitted by the provisions of SDCL 4-5-6; provided, however, that the Depreciation Fund may be invested in such securities maturing not later than ten years from the date of the investment. Income received from the deposit or investment of moneys shall be credited to the Fund or Account from whose moneys the deposit was made or the investment was purchased, and handled and accounted for in the same manner as other moneys therein.

SECTION 12. Consent to Appointment. In the event of mismanagement of the Project, a default in the payment of the principal or interest of the Revenue Bond, or in any other condition thereof materially affecting the lawful holder of the Revenue Bond, or if the revenues of the Project are dissipated, wasted or diverted from their proper application as set forth in the Loan Agreement, Revenue Bond, or herein, the City hereby consents to the appointment of a receiver pursuant to Section 33 of the Act, and agrees that the receiver will have the powers set forth therein, and in Section 34 and 35 of the Act to operate and administer the Project, and charge and collect rates as described therein.

SECTION 13. Severability. If any section, paragraph, clause or provision of this Resolution, the Loan Agreement, the Revenue Bond, or any other Loan Document shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Resolution or said Loan Agreement, Revenue Bond, or any other Loan Document.

SECTION 14. Authorization of City Officials. The Mayor, Finance Officer, City Attorney and City officials shall be and they are hereby authorized to execute and deliver for and on behalf of the City any and all other certificates, documents or other papers and to perform such other acts as they may deem necessary or appropriate in order to implement and carry out the actions authorized herein.

SECTION 15. Principal Forgiveness. In order to qualify for up to 42.4% of the total principal amount of the Loan in an amount not to exceed $299,500 forgiven City officials are directed to cause the compliance with the following deadlines:

(a) Advertise for bids and open bids for the project in accordance with SDCL Chapter 5-18 on or before December 10, 2009;

(b) Submit the bid of the apparent lowest bidder to the Department for review on or before December 21, 2009; and

(c) Execute construction contracts on or before February 1, 2010.

SECTION 16. Effective Date. This Resolution shall take effect on the 20th day following its publication, unless suspended by a referendum.

Because the state changed the requirements of 2nd St sewer project and automatic remote reading meter system to include the whole bond before forgiveness, the election from Sept 8 was not based on the correct amounts. Moved by Hendrickson and seconded by Brotherton to pass the following resolution to authorize an election for both water and sewer bonds to be in the additional 5% authorization. All members present voted aye.
RESOLUTION NO. 09-112-3
"RESOLUTION PROVIDING FOR CONSTRUCTION OF WATER AND SEWER IMPROVEMENTS IN AN AMOUNT NOT TO EXCEED $1,000,000 AND CALLING AN ELECTION FOR THE PURPOSE OF APPROVING BOND ISSUANCE"

WHEREAS, it is deemed necessary that the sanitary sewer be improved, and it is deemed necessary that the City contribute to the cost thereof, and

WHEREAS, the City of Groton is without necessary funds to provide for the cost of said improvements and incidental construction,

WHEREAS, the City of Groton needs to increase the amount authorized to include amounts forgiven by the State Revolving Fund.

NOW, THEREFORE, BE IT RESOLVED:

Section 1. Declaration of Necessity.

The City hereby declares that it is necessary to improve the water and sewer systems of the City of Groton.

Section 2. Calling Special Election.

The City of Groton hereby submits the question of issuance of bonds will count in the 10% after the first 5% of constitutional debt to the voters of the City at a special election.

Section 3. Purpose of Bonds.

The estimated total cost of the proposed improvements to be financed, including construction, engineering, fiscal, legal and other proper costs is approximately an amount not to exceed an aggregate $1,000,000 excluding pertinent grants. The bonds shall be issued to pay a portion of the cost of the improvements. The cost of the improvements shall be defrayed by the issuance of negotiable bonds pursuant to, subject to and in conformity with any of the following SDCL 9-40 and 6-8B.

Section 4. Revenue Bonds.

Pursuant to said Chapter 6-8B and 9-40, the City of Groton shall, upon fifty (50%) percent plus one of the voters of the City voting to issue bonds, in two or more series, which constitute indebtedness for constitutional purposes in an aggregate amount not to exceed $1,000,000 and to be amortized over a period of not to exceed 30 years from the date thereof to be negotiated, discounted or disposed of on a basis of yield in such amount as may be authorized by statute, resolution or ordinance, effective as of the date of issuance, sale and delivery of such bonds, and for the purpose of defraying the costs of said improvements to the municipal water and sewer systems.

Section 5. Election Details.

A special election shall be held on the 8th day of December, 2009, and there shall be submitted to the voters of the City of Groton, the following question:

SHALL THE CITY OF GROTON, BROWN COUNTY, SOUTH
DAKOTA, ISSUE ITS NEGOTIABLE BONDS UNDER SDCL 9-
40, IN TWO OR MORE SERIES, WHICH CONSTITUTES
INDEBTEDNESS FOR CONSTITUTIONAL PURPOSES IN AN
AGGREGATE AMOUNT NOT EXCEEDING $1,000,000
BEARING INTEREST AT RATE NOT EXCEEDING 7.00%
AND FOR A TERM NOT TO EXCEED 30 YEARS, FOR THE
PURPOSE OF IMPROVING THE WATER AND SEWER
SYSTEMS OF THE CITY OF GROTON.

SHALL THE ABOVE PROPOSITION BE APPROVED AND
THE BONDS ISSUED?

The election shall be held on the 8th day of December, 2009, between the hours of 7:00 o'clock in the forenoon and 7:00 o'clock in the evening, at the same places as the general election in the City of Groton, Brown County, South Dakota.

Section 6. Notice of Election.

The Finance Officer of the City of Groton is hereby authorized and directed to give notice of bond election, said notice to be published in the official newspaper for the County, once each week for two (2) successive weeks before said date of election. The second notice shall be published not less than four (4) nor more than ten (10) days before the election.

Section 7. Notice of Voter Registration.

The voter registration deadline shall be Monday, November 23, 2009. The Finance Officer of the City of Groton is hereby instructed and directed to give legal notice of voter registration and to cause a copy thereof to be published twice, once each week, in the Groton Dakota Press and the Groton Independent, the official newspapers of the City of Groton, Brown County, South Dakota, giving the voters of the City of Groton notice of such voter registration, the last publication to be not less than ten (10) nor more than fifteen (15) days prior to voter registration.
Section 8. Ballots.

The Finance Officer is authorized and directed to cause printed ballots to be prepared for use at said election in substantially the form on file with the Finance Officer and to publish said form once at least ten (10) days prior to the election.

Section 9. Canvass.

Said election shall be held and conducted and the votes cast thereat shall be counted, certified and canvassed according to law, and this Council shall meet at the regular meeting room in Groton, South Dakota, in the City for the purpose of canvassing the results thereof no later than six (6) calendar days after said election.

Section 10. Effect of Passage.

This resolution is necessary for the immediate preservation of the health and safety, and shall take effect from and after its passage and publication thereof.

Moved by Hamilton and seconded by Anderson to pass the following resolution in support of our troops. All members present voted aye.
RESOLUTION NO. 09-112-4
Statement of Support for the Guard and Reserve

We recognize the National Guard and Reserve are essential to the strength of our nation and the well-being of our communities.
In the highest American tradition, the patriotic men and women of the Guard and Reserve serve voluntarily in an honorable and vital profession. They train to respond to their community and their country in time of need. They deserve the support of every segment of our society.
If these volunteer forces are to continue to serve our nation, increased public understanding is required of the essential role of the Guard and Reserve in preserving our national security.
Therefore, we join other employers in pledging that:
1. We fully recognize, honor and enforce the Uniformed Services Employment and Reemployment Rights Act (USERRA).
2. Our managers and supervisors will have the tools they need to effectively manage those employees who serve in the Guard and Reserve.
3. We will continually recognize and support our country's service members and their families in peace, in crisis, and in war.

Moved by Anderson and seconded by Nyberg to pass the following resolution to accept a grant for road signs. All members present voted aye.
RESOLUTION NO. 09-112-5
Federal Aid Surface Transportation Program Resolution for County and Urban Projects

WHEREAS, the City of Groton desires the construction and improvement of the road and/or bridge as hereinafter described:
LOCATION, LENGTH, STRUCTURE NUMBER: City Wide Project to be Included with the Brown Co. Signing Project

TYPE OF CONSTRUCTION: Traffic Control Signing

Major Collector Route Number (if applicable): N/A

AND WHEREAS, the City of Groton is obligated and hereby agrees to provide proper maintenance as required by the Federal Highway Act as amended and supplemented thereto for the project after construction is completed and to regulate or cause to be regulated the installation of utility facilities within the limits of the right-of-way of the proposed project in accordance with State and Federal requirements.

NOW THEREFORE BE IT RESOLVED:
That the South Dakota Department of Transportation be and hereby is authorized and requested to program for construction, in accordance with the "Secondary Road Plan" and the State's "Standard Specifications for Roads and Bridges," the project described.

Estimated Cost of Project Including Engineering: $30,000
STP Funds: NA
Local Funds (if needed to meet construction year): NA
Proposed Year of Construction: 2012

Hendrickson and Olson reported on the Transit meeting they attended on Oct 21 which informed them that the Transit would be separating from the City to operate independently due to state grant requirements. Hendrickson's position on the Transit Board was terminated.

Moved by Brotherton and seconded by Hendrickson to authorize Anderson to attend the WEB Water annual meeting on Dec 5 in Aberdeen. All members present voted aye.

Lowary reported on the MAP rate making school, and when the Council decided to have the rate review done internally, several policy statements were reviewed and discussed.

The SD Municipal League District meeting is set for Mar 31 in Groton. Council will request use of the American Legion meeting room.

Discussion was held on cash accounting vs. modified accrual accounting. Moved by Hendrickson and seconded by Hamilton to switch Groton City accounting to cash basis as of Jan1, 2010. All members present voted aye.

Ideas for Energy Efficiency grants were discussed and will be investigated.

Council adjourned into executive session at 8:39pm on a motion by Hamilton and seconded by Brotherton to discuss personnel and legal matters. The meeting was reconvened into regular session at 8:56pm.

First Reading was given to Ordinance No. 659, The 2010 Salary Ordinance, on a motion by Brotherton and seconded by Hamilton. All members present voted aye.

Meeting adjourned.

____________________________________ ________________________________
Roy L. Olson, Mayor Anita Lowary, Finance Officer