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REGULAR MEETING OF THE CITY COUNCIL COUN

REGULAR MEETING OF THE CITY COUNCIL COUNCIL CHAMBERS, CITY HALL MITCHELL, SOUTH DAKOTA August 1, 2022 6:00 P.M. PRESENT: Dan Allen, Marty Barington, John Doescher, Kevin McCardle, Steve Rice, Dan Sabers, Jeffrey Smith, Susan Tjarks ABSENT: PRESIDING: Mayor Bob Everson AGENDA: Moved by Sabers, seconded by McCardle, to approve the following items on the consent agenda: a. City Council Minutes 1. City Council July 18, 2022. b. Committee Reports 1. Planning Commission July 11, 2022, 2. Library Board June 21, 2022, and 3. Community Services Board July 14, 2022. c. Automatic Supplement to General Fund-Municipal Buildings in the amount of $535.00 from insurance proceeds. d. Raffle Permit 1. Dakota Wesleyan University with the drawing to be held at each home game. e. Special Event Application for Grace Baptist Church Vacation Bible School Family Night on August 12, 2022. f. Special Event Application for DWU Blue and White Days Parade on October 1, 2022. g. Set date of August 15, 2022 for hearing 1. On the application to transfer RB-26966 Retail (on-off sale) Malt Beverage & SD Farm Wine License from Bathke Properties, LLC, 1101 East Havens Avenue to Lucky Clovers, LLC 1101 East Havens Avenue. (License includes video lottery.) 2. On the application to transfer RB-26967 Retail (on-off sale) Malt Beverage & SD Farm Wine License from Bathke Properties, LLC, 1101 East Havens Avenue to Lucky Clovers, LLC 1101 East Havens Avenue. (License includes video lottery.) h. Pay Estimates August 1, 2022 Pay Estimate #18 in the amount of $1,119.90 for Dailey Drive Lift Station #2020-12 contracted to SPN & Associates, Pay Estimate #8 in the amount of $712.00 for Ground Storage Tank #2020-20 contracted to Infrastructure Design Group, Pay Estimate #9 in the amount of $110,751.95 for Ground Storage Tank #2020-20 contracted to Infrastructure Design Group, Pay Estimate #12 in the amount of $28,492.50 for Foster Street Bridge Rehabilitation #2021-2 contracted to Brosz Engineering, Pay Estimate #2 in the amount of $148,882.95 for Foster Street Bridge Rehabilitation #2021-2 contracted to BX Civil & Construction, Pay Estimate #10 in the amount of $727.50 for West Side Water Tower #2021-3 contracted to SPN & Associates, Pay Estimate #1 in the amount of $474,953.12 for 9th & 5th Reconstruction #2021-07 contracted to Menning Excavating, Pay Estimate #2 in the amount of $23,287.50 for 9th & 5th Reconstruction #2021-07 contracted to Brosz Engineering, Pay Estimate #1 in the amount of $120,175.00 for Landfill Cell #4 Construction #2021-08 contracted to A-G-E Corporation, Pay Estimate #10 in the amount of $1,437.50 for West Harmon Utility Improvements #2021-16 contracted to Brosz Engineering, Pay Estimate #3 in the amount of $6,757.74 for Firesteel Creek Dam Design #2021-18 contracted to Ducks Unlimited, Pay Estimate #1 in the amount of $607,501.71 for North Wastewater Improvements #2021-31 contracted to PKG Contracting, Pay Estimate #1 in the amount of $5,108.06 for NAWCA Wetlands Agreement #2021-41 contracted to Ducks Unlimited, Pay Estimate #11 in the amount of $6,885.43 for Recreation Center Fitness Room-Phase II #2021-50 contracted to Schemmer Associates, Pay Estimate #2 in the amount of $5,677.50 for Ohlman & 23rd Lift Station Replacement #2022-03 contracted to SPN & Associates, Pay Estimate #3 in the amount of $2,643.75 for Quince Street Design #2022-07 contracted to SPN & Associates, Pay Estimate #1 in the amount of $33,008.00 for Paving & Overlay #2022-15 contracted to Commercial Asphalt, and Pay Estimate #2 in the amount of $3,825.00 for North Main Window Repair #2022-24 contracted to Custom Carpentry. i. Approve Bills, Payroll, Salary Adjustments and New Employee Hires and Authorize Payment of Recurring and other expenses in advance as approved by the Finance Officer. PAYROLL JULY 10, 2022 – JULY 23, 2022: City Council $3,411.04, Mayor $1,474.35, City Administrator $5,686.92, Attorney $4,601.23, Finance $12,820.21, Human Resources $3,703.81, Municipal Building $3,139.60, Information Technology $2,844.80, Police $74,296.68, Traffic $5,145.05, Fire $35,561.03, Street $34,087.51, Public Works $18,733.28, Cemetery $6,051.86, Animal Control $1,630.08, Library $14,628.54, Recreation & Aquatics $29,019.83, Recreation Center $14,500.99, Sports Complexes $14,343.91, Cadwell Concessions $701.60, Parks $20,967.10, Supervision $5,666.66, E911 $19,959.79, MVP $499.68, Palace Transit $23,352.58, JVCC $906.38, Nutrition $3,999.25, Water Distribution $12,778.12, Sewer $15,116.39, Airport $2,672.72, Recycling Program $6,749.18, Waste Collection $6,236.03, Landfill $9,014.58, Corn Palace $29,168.22, Golf Course $7,667.10, Campground $2,217.60, Emergency Medical Services $31,863.67. NEW HIRES: E-911: Noah Blair-$20.124 GOLF: Jakob Dobney-$11.45 JVCC: Corinne Goldammer-$10.95 POLICE: Cole Albaugh-Edgecomb-$25.761 RECREATION CENTER: Kelsey Van Loh-$9.95 SALARY ADJUSTMENTS: E-911: Kalla Albertz-$20.376 POLICE: Niko Arnold-$26.409 WATER DISTRIBUTION: Thomas Schuman-$27.428 TERMINATIONS: FINANCE: Paula Morgan GOLF COURSE: Tyrel Haley, Patrick Starr JVCC: Anthony Lucas RECREATION & AQUATICS: Janice Pecenka WARRANTS: A-G-E Corporation, #2021-8 P.E.#1-$120,175.00; AAA Collections, Refunds-$69.54; AAA Lawn Care and Maintenance, Mowing-$325.00; Amanda Radke, Books-$20.00; Amazon Capital Services, Supplies-$1,247.99; American Garage Door, Supplies-$40.00; Aramark Uniform Services, Supplies-$253.87; AT&T Mobility, Cell Phone Software-$638.38; AT&T Mobility, July Wireless-$967.62; ATV Holdings, LLC DBA Mitchell Telecom, Utilities-$75.45; Avera Queen of Peace Hospital, Supplies-$503.05; Baker & Taylor, Books-$281.35; Big Daddy D’s, Contract Services-$4,297.80; Blackburn Manufacturing, Supplies-$130.97; Blackstone Publishing, Books-$193.57; Blackstrap, Supplies-$1,859.00; Book Systems, Subscription-$3,395.00; Boyer Ford Trucks, Supplies/Maintenance-$1,085.76; Brosz Engineering, #2021-16 P.E.#10-$53,217.50; Builders First Source, Supplies-$536.00; Butler Machinery, Supplies-$3,680.38; BX Civil Engineering, #2021-2 P.E.#2-$148,882.95; C&B Operations, Supplies-$1,021.97; CDW Government, Supplies-$511.57; Center Point Large Print, Books-$91.68; Central Electric, Utilities-$1,421.98; Century Link, Utilities-$27.14; Cherrybee’s, Supplies-$56.00; CHR Solutions, Contract Services-$3,233.49; City of Mitchell, Golf Course Deductions-$836.51; City of Mitchell, Recreation Deductions-$987.01; CK Bicycles & Locks, Supplies-$8.25; Commercial Asphalt, #2022-15 P.E. #1-$44,729.16; Conrad Repair, Supplies-$232.89; Core & Main, Supplies-$7,282.26; Core-Mark Midcontinent, Supplies-$8,451.81; Corporate Translation Service, Translation Services-$148.65; County Fair, Supplies-$67.80; Dak Tech, Supplies-$848.00; Dakota Pump, Supplies-$911.63; Dakota Supply Group, Supplies-$85.51; Department of Social Services, Child Support-$1,008.46; Diamond Surface, Refund Hydrant-$1,500.00; Dimock Dairy, Supplies, $522.00; Dive Rescue International, Training-$3,600.00; Doug L Driggs, #2022-24 P.E. #2-$3,825.00; Dr Hilary Rockwell, Contract Services-$1,500.00; Ducks Unlimited, #2021-18 P.E.#3-$11,865.80; Eric Hieb, Contract Services-$7,139.72; Etix, Box Office Fee-$452.60; Farmers Alliance, Supplies-$946.55; Fedex, Express Services-$15.89; Ferguson Waterworks #2516, Supplies-$351.10; First National Bank Omaha, Supplies-$9,987.62; Galls, Supplies-$49.82; Gaylen’s Homegrown Popcorn, Supplies-$1,117.20; Gold Medal Products, Supplies-$420.91; Golden West Technologies, Alarm Monitoring-$89.97; Graham Tire, Supplies-$205.00; Grainger, Supplies-$176.34; Great Western Tire, Supplies-$2,119.60; Hawkins, Supplies-$4,045.75; Heartland Ag Systems, Supplies-$150.57; Henry Schein, Supplies-$654.20; Honda of Mitchell, Supplies-$39.39; Howes Oil, Supplies-$30,607.00; I-State Truck Center, Supplies-$58.44; Infrastructure Design Group, #2020-20 P.E.#8-$111,463.95; Ingram Library Services, Books-$1,366.67; Innovative Office Solution, Supplies-$75.85; Iverson Chrysler Center, Rental-$69.95; JJ Keller & Associates, Manual-$131.65; James Valley Nursery, Repair-$1,750.86; JCL Solutions, Supplies-$78.75; Johnson Controls, Repair-$7,886.54; Jones Supplies, Supplies-$2,052.32; Karl’s, Equipment-$1,130.98; Krohmer Plumbing, Supplies-$22,788.32; Larry’s I-90 Service, Maintenance-$195.00; Learning Opportunities, Books-$442.39; Leighton Family Farms, Supplies-$1,515.00; Lewis Bruske, Supplies-$22.03; Locators and Supplies, Supplies-$1,123.42; M & T Fire and Safety, Supplies-$304.50; Make it Mine Designs, Supplies-$747.00; Maxi-Sweep, Supplies-$224.48; McLeod’s Printing, Supplies-$956.56; Menard’s, Supplies-$634.12; Menning Excavating, #2021-7 P.E. #1-$474,953.12; Mettler Implement, Supplies-$169.93; Meyers Oil, Supplies-$688.50; Microsoft, Subscription Fees-$910.00; Midcontinent Communication, Utilities-$251.29; Midwest Alarm Company, Maintenance-$385.00; Midwest Laboratories, Lab-$1,074.84; Millennium Recycling, Single Stream Fee-$3,078.60; Mitchell Lion’s Club, Service-$750.00; Mitchell United Way, Deductions-$197.66; Mr. Golf Car, Supplies-$169.83; Mueller Lumber, Supplies-$28.88; Muth Electric, Repair-$212.20; Napa Central, Supplies-$242.54; Northwestern Energy & Communications, Utilities-$27,273.04; Overdrive, Ebooks-$1,519.23; Parkeon, Professional Service-$65.00; Pepsi Cola, Supplies-$709.05; Phil Baker, Performance-$650.00; Pkg Contracting, #2021-31 P.E.#1-$607,501.71; Prehistoric Indian Village, 2022-3rd Quarter Allocation-$3,250.00; Public Health Laboratory, Lab-$587.00; Qualified Presort, Mailing Service-$301.18; Quality Cut Lawn & Tree Service, Mowing-$300.00; Quick Med Claims, Contract-$3,076.59; Rantizo, Repairs-$1,125.00; Recreonics, Supplies-$1,372.28; Reel Sharp, Supplies-$225.00; Retail Resource, Supplies-$372.32; Riverside Technologies, Professional Service-$3,988.00; Runnings, Supplies-$1,071.78; Saga Communications of south Dakota, Publishing-$135.00; Schemmer, #2021-50 P.E.#11-$6,885.43; SPN, #2020-12 P.E.#18-$10,168.65; Schoenfelder Portables, Rental-$350.00; Scholastic Inc Education, Books-$3.00; South Dakota Department of Public Safety, Boiler Fee-$80.00; South Dakota Department of Transportation, Supplies-$856.00; South Dakota Retirement System, Retirement Contributions-$53,221.14; South Dakota Supplemental Retirement, Supplemental Retirement-$3,439.80; South Dakota Supplemental Roth 457, Roth 457 Contributions-$1,253.50; SDI, Supplies-$140.00; Sherwin-Williams, Supplies-$204.69; Sign Solutions, Supplies-$187.54; Siteone Landscape Supply. Supplies-$546.92; Streicher’s Minneapolis, Supplies-$354.99; Sturdevants, Supplies-$1,794.25; Subway, Meals-$37.45; Sun Gold Sports, Supplies-$450.00; Tessier’s, Maintenance-$209.48; Thune True Value Hardware, Repair-$257.97; TMA Stores, Repair-$514.07; Transource, Supplies-$58.96; Trizetto Provider Solution, Professional Service-$81.80; Upper Midwest Garage Door, Supplies-$160.71; USA Blue Book, Supplies-$4,006.79; Van Diest Supply, Supplies-$2,447.30; Verizon Wireless, Utilities-$374.13; Vern Eide Ford Lincoln, Supplies-$128.88; Walmart/Capital One, Supplies-$409.91; Weston Frank Live, Stage Performance-$2,000.00; Wheelco Brake & Supply, Repair-$767.66; Wicklein’s Native Plants, Supplies-$3,403.11; US Bank, Bond Payment-$128,351.49. Members present voting aye: Allen, Barington, Doescher, McCardle, Rice, Sabers, Smith, Tjarks. Members present voting nay: none. Motion carried. CITIZENS INPUT: Mitchell Township resident, Sonja Vanerdewyk spoke regarding COVID shots. Elizabeth Luczak was introduced as the new MMSB Event Coordinator and promoted the PreSturgis events happening on August 4th. Mitchell resident, Reed Bender, stated he had concerns with the approved water study. BOARD OF ADJUSTMENT: Moved by Allen, seconded by Rice, for the City Council to recess and sit as the Board of Adjustment. Motion carried. It was advised that this is the date and time set for hearing on the application of Vander Hamm Motorsports for a conditional use permit to operate an automotive repair services facility located at 2951 South Rowley Street, legally described as Lot 11, Iverson’s Addition in the SE ¼ of Section 33, T 103 N, R 60 W of the 5th P.M., Davison County, South Dakota. The property is zoned UD Urban Development District. The Planning Commission recommended approval of said application. Moved by McCardle, seconded by Rice, to approve said application. Doescher and Tjarks voting nay. Motion carried. It was advised that this is the date and time set for hearing on the application of Ethan Coop Lumber on behalf of Darwin and Pat Kreth for a variance for a combination of attached and detached accessory buildings of 3,036 square feet vs 1,050 square feet to build a new detached accessory building of 1,656 square feet located at 2709 Mentzer Court, legally described as Lots 5 & 6, Block 3, Woodland Heights 1st Addition, City of Mitchell, Davison County, South Dakota. The property is zoned Woodland Heights Planned Development District. The Planning Commission recommended approval of said application. Moved by Allen, seconded by Rice, to approve said application. Motion carried. Moved by Tjarks, seconded by Rice, for the Board of Adjustment to adjourn and the City Council to reconvene in regular session. Motion carried. CONSIDER APPROVAL: Moved by Rice, seconded by Smith, to approve Agreement #A2022-29, South Lake Estates Phase I Engineering with SPN in an amount not to exceed $340,000.00. Motion carried. Moved by McCardle, seconded by Barington, to approve Agreement #A2022-30, DANR American Rescue Plan Act Grant for the North Wastewater Treatment Facilities Improvements Project #2021-31. Motion carried, RESOLUTIONS: Moved by Allen, seconded by Tjarks, to approve Resolution #R2022-47, Plat of Lots 3, 4, and 5 of CJM Third Addition, as follows: RESOLUTION #R2022-47 WHEREAS, it appears that the City Planning Commission of the City of Mitchell, South Dakota, did duly consider and did recommend the approval and adoption of the hereinafter described plat, at its meeting held on the 25th day of July, 2022; and WHEREAS, it appears from an examination of the plat of LOTS 3, 4 AND 5 OF CJM THIRD ADDITION, A SUBDIVISION OF THE NW ¼ AND OF IRREGULAR TRACT NO. 3 IN THE SW ¼ OF SECTION 32 T 104 N, R 60 W OF THE 5TH P.M., DAVISON COUNTY, SOUTH DAKOTA as prepared by Jeremy A. Wolbrink, a duly licensed Land Surveyor in and for the State of South Dakota, that said is in accordance with the system of streets and alleys set forth in the master plan adopted by the City Planning Commission of the City of Mitchell, South Dakota, and that such plat has been prepared according to law; THEREFORE, be it resolved by the City Council of Mitchell, South Dakota that the plat of LOTS 3, 4 AND 5 OF CJM THIRD ADDITION, A SUBDIVISION OF THE NW ¼ AND OF IRREGULAR TRACT NO. 3 IN THE SW ¼ OF SECTION 32 T 104 N, R 60 W OF THE 5TH P.M., DAVISON COUNTY, SOUTH DAKOTA as prepared by Jeremy A. Wolbrink, be and the same is approved and the description set forth therein and the accompanying surveyor’s certificate shall prevail. Motion carried and resolution declared duly adopted. Moved by Sabers, seconded by Tjarks, to approve Resolution #R2022-48, Plat of Kelley Tracts 1A and 2, as follows: RESOLUTION #R2022-48 WHEREAS, it appears that the City Planning Commission of the City of Mitchell, South Dakota, did duly consider and did recommend the approval and adoption of the hereinafter described plat, at its meeting held on the 25th day of July, 2022; and WHEREAS, it appears from an examination of the plat of KELLEY TRACTS 1A AND 2, A SUDIVISION OF THE SOUTH ½ OF THE SE ¼ OF SECTION 36, T 104 N, R 60 W OF THE 5TH P.M., CITY OF MITCHELL, DAVISON COUNTY, SOUTH DAKOTA as prepared by Paul J. Reiland, a duly licensed Land Surveyor in and for the State of South Dakota, that said is in accordance with the system of streets and alleys set forth in the master plan adopted by the City Planning Commission of the City of Mitchell, South Dakota, and that such plat has been prepared according to law; THEREFORE, be it resolved by the City Council of Mitchell, South Dakota that the plat of KELLEY TRACTS 1A AND 2, A SUDIVISION OF THE SOUTH ½ OF THE SE ¼ OF SECTION 36, T 104 N, R 60 W OF THE 5TH P.M., CITY OF MITCHELL, DAVISON COUNTY, SOUTH DAKOTA as prepared by Paul J. Reiland, be and the same is approved and the description set forth therein and the accompanying surveyor’s certificate shall prevail. Motion carried and resolution declared duly adopted. Moved by McCardle, seconded by Rice, to approve Resolution #R2022-49, DANR Application for a Tire Recycling Grant, as follows: RESOLUTION #R2022-49 A RESOLUTION APPROVING APPLICATION FOR A TIRE GRANT WITH THE SOUTH DAKOTA DEPARTMENT OF AGRICULTURE AND NATURAL RESOURCES FOR THE CITY OF MITCHELL, SD WHEREAS the City of Mitchell wishes to provide an opportunity for the City of Mitchell, Davison County, and area residents to recycle tires: and WHEREAS The South Dakota Department of Agriculture and Natural Resources may have grant funding available for tire recycling efforts in Davison County; and WHEREAS The City of Mitchell Regional Landfill provides sanitation disposal services for the City of Mitchell and surrounding areas would be an ideal location to recycle tires for Davison County; and WHEREAS the DANR grant would reimburse the City of Mitchell Regional Landfill 80% for the costs to have a vendor remove the tires recycled by the residents. THEREFORE, BE IT RESOLVED that the Governing Body of the City of Mitchell authorizes the tire recycling grant application and supports the South Dakota Department of Natural Resources efforts to encourage tire recycling and offers the City of Mitchell Regional Landfill as a potential collection site. Motion carried and resolution declared duly adopted. Moved by Tjarks, seconded by Allen, to approve Resolution #R2022-50, Declaring Certain Real Property Near 40580 250th Street to be Surplus, Appointing a Board to Conduct an Appraisal, and Authorizing the Sale of Such Real Property Pursuant to State Law, as follows: RESOLUTION #R2022-50 A RESOLUTION DECLARING CERTAIN REAL PROPERTY NEAR 40580 250TH STREET TO BE SURPLUS, APPOINTING A BOARD TO CONDUCT AN APPRAISAL, AND AUTHORIZING THE SALE OF SUCH REAL PROPERTY PURSUANT TO STATE LAW WHEREAS the City of Mitchell is the owner of approximately 5.3 acres of real property located adjacent to 40580 250th Street, Mitchell, SD 57301 which is legally described as: Kelley Tracts 1A and 2, a subdivision of the S 1/2 of the SE 1/4 of Section 36, T 104 N, R 61 W of the 5th P.M., Davison County, South Dakota; and WHEREAS the City has considered the sale of the above described real after previously listing the 40580 250th Street property; and THEREFORE, BE IT RESOLVED by the City Council of the City of Mitchell, SD that the City hereby determines that the above described real property is no longer necessary, useful, or suitable for the purpose for which it was acquired. IT IS FURTHER RESOLVED, that such property shall be appraised pursuant to state law by a three person board consisting of Jordan Gau, Steve Schoenfelder, and Riley Heck, who are all residents of the City of Mitchell. IT IS FURTHER RESOLVED, that upon completion of said appraisal, the Mayor, and such city staff as the Mayor may designate, may proceed with the steps necessary under state law in order to provide appropriate notice of the sale and to utilize a real estate broker, pursuant to SDCL 6-13-5.2, for the purpose of obtaining offers to purchase the property. When in the opinion of the Mayor a suitable offer to purchase the real property has been received, such offer shall be presented to the City Council at a future meeting to consider acceptance of the offer by the City Council. Motion carried and resolution declared duly adopted. Moved by Rice, seconded by Sabers, to approve Resolution #R2022-51, a Resolution Giving Approval to Certain Sewer Facility Improvements, Giving Approval to the Issuance and Sale of Revenue Bonds, in One or More Series, to Finance, Directly or Indirectly, the Improvements to the Facilities; Approving the Form of the Loan Agreement and the Revenue Bonds and Pledging Project 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 Bonds and Providing for a Segregated Special Charge or Surcharge for the Payment of the Bonds (CW-12), as follows: RESOLUTION NO. R2022-51 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 PROJECT 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 AND PROVIDING FOR A SEGREGATED SPECIAL CHARGE OR SURCHARGE FOR THE PAYMENT OF THE BONDS. 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 by Section 6 of the Act to issue revenue bonds to defray the cost of extensions, additions and improvements to any utility previously owned without pledging its credit and is authorized to pledge the net income or revenues from the Project in accordance with Section 15 of the Act; and, WHEREAS, the City of Mitchell (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 shall adopt special rates or surcharges for the improvements to be pledged, segregated and used for the payment of the Bonds. 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 the City of Mitchell Livesay Lane Wastewater and Storm Sewer Improvements. “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. 2.1.1. 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, only the net income from the Project 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 $1,245,000 of the costs of the Project through the issuance of bonds payable from the revenue of the Project 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 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 $1,245,000 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 covenants and agrees to charge rates for all services from the Project 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 Project, and depreciation, and the Rate Resolution 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. Special Charge or Surcharge for Revenue Bond. 4.1. The City does hereby create the Revenue Bond Special-Surcharge District (the “Surcharge District”) which shall include all users which benefit from the Project. There shall be charged a special charge or surcharge pursuant to Section 15 of the Act for the services provided by Project financed by the Revenue Bond. The special charge or surcharge shall be segregated from other revenues of the System and shall be used for the payment of the Revenue Bond. The special charge or surcharge shall create net income, remaining from time to time after first paying all reasonable and current expenses of maintenance, repairs, replacements and operation, sufficient to fund interest, reserve and debt service fund annual requirements and shall be 110% of the debt service requirements on the Revenue Bond. 4.2. Rates and collection. The rate herein specific will be collected as a special charge or surcharge for the Project. This special charge or surcharge shall remain in effect until such time as the Revenue Bond is defeased or paid in full. 4.3. Initial Surcharge. The initial special charge or surcharge shall be set by resolution and collected at the same time as other charges of the utility. All users within the Surcharge District which benefit from the Project, current and future, shall be charged the special charge or surcharge. The special charge or surcharge is found to be equitable for the services provided by the Project. The special charge or surcharge shall begin at such time as will produce sufficient revenue to pay principal of, interest and Administrative Surcharge on the Revenue Bond when due. 4.4. Segregation. The Finance Officer shall set up bookkeeping accounts in accordance with South Dakota Legislative Audit guidelines for the segregation of the revenue, special charges and surcharges. 4.5. Periodic review. The amount of the surcharge 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 surcharge may be set by resolution in accordance with this Section. The rate resolution shall be necessary for the support of government and shall be effective upon passage. SECTION 5. Additional Bonds. As permitted by Sections 8 and 9 of the Act, Additional Bonds payable from revenues and income of the System or Project 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 the income of the Project 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 resolutions and ordinances of the City of Mitchell, South Dakota (collectively the “Rate Resolution”). 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 February 15, May 15, August 15 or November 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 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 U.S. Bank National Association, St. Paul, Minnesota, 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 Section 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 Sections 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. Repeal of Resolution. At such time as the Revenue Bond is defeased or paid in full, this Resolution and the special charge or surcharge shall automatically be repealed without any further action of the City. SECTION 15. 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 16. Effective Date. This Resolution shall take effect on the 20th day following its publication, unless suspended by a referendum. Motion carried and resolution declared duly adopted. Moved by Smith, seconded by Rice, to approve Resolution #R2022-52, a Resolution Giving Approval to Certain Sewer Facility Improvements, Giving Approval to the Issuance and Sale of Revenue Bonds, in One or More Series, to Finance, Directly or Indirectly, the Improvements to the Facilities; Approving the Form of the Loan Agreement and the Revenue Bonds and Pledging Project 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 Bonds and Providing for a Segregated Special Charge or Surcharge for the Payment of the Bonds (CW-09), as follows: RESOLUTION NO. R2022-52 RESOLUTION GIVING APPROVAL TO CERTAIN SEWER FACILITIES IMPROVEMENTS; GIVING APPROVAL TO THE ISSUANCE AND SALE OF REVENUE BONDS, IN ONE OR MORE SERIES, TO FINANCE, DIRECTLY OR INDIRECTLY, THE IMPROVEMENTS TO THE FACILITIES; APPROVING THE FORM OF THE LOAN AGREEMENT AND THE REVENUE BONDS AND PLEDGING PROJECT 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 BONDS AND PROVIDING FOR A SEGREGATED SPECIAL CHARGE OR SURCHARGE FOR THE PAYMENT OF THE BONDS. 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 by Section 6 of the Act to issue revenue bonds to defray the cost of extensions, additions and improvements to any utility, including non-point source projects, previously owned without pledging its credit and is authorized to pledge the net income or revenues from the Project in accordance with Section 15 of the Act; and, WHEREAS, the City of Mitchell (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 and the non-point source projects 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 shall adopt special rates or surcharges for the improvements to be pledged, segregated and used for the payment of the Bonds. 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 the City of Mitchell Wastewater Treatment Facility Improvements. “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 and undertake non-point source projects 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, only the net income from the Project 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 $17,675,902 of the costs of the Project through the issuance of bonds, in two series designated Series 2022 in the amount of $15,942,528 and NPS Series 2022 in the amount of $1,733,374, payable from the revenue of the Project and other funds secured by the City. The City hereby determines that because the Revenue Bonds are 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 Revenue Bonds Series 2022 and NPS Series 2022, on a parity basis and in aggregate principal amount not to exceed $17,675,902 as determined according to the Loan Agreement in the form and content set forth in Appendix B attached to the form of Loan Agreement (collectively 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 covenants and agrees to charge rates for all services from the Project 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 Project, and depreciation, and the Rate Resolution 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. Special Charge or Surcharge for Revenue Bond. 4.1. The City does hereby create the Revenue Bond Special-Surcharge District (the “Surcharge District”) which shall include all users which benefit from the Project. There shall be charged a special charge or surcharge pursuant to Section 15 of the Act for the services provided by Project financed by the Revenue Bond. The special charge or surcharge shall be segregated from other revenues of the System and shall be used for the payment of the Revenue Bond. The special charge or surcharge shall create net income, remaining from time to time after first paying all reasonable and current expenses of maintenance, repairs, replacements and operation, sufficient to fund interest, reserve and debt service fund annual requirements and shall be 110% of the debt service requirements on the Revenue Bond. 4.2. Rates and collection. The rate herein specific will be collected as a special charge or surcharge for the Project. This special charge or surcharge shall remain in effect until such time as the Revenue Bond is defeased or paid in full. 4.3. Initial Surcharge. The initial special charge or surcharge shall be set by resolution and collected at the same time as other charges of the utility. All users within the Surcharge District which benefit from the Project, current and future, shall be charged the special charge or surcharge. The special charge or surcharge is found to be equitable for the services provided by the Project. The special charge or surcharge shall begin at such time as will produce sufficient revenue to pay principal of, interest and Administrative Surcharge on the Revenue Bond when due. 4.4. Segregation. The Finance Officer shall set up bookkeeping accounts in accordance with South Dakota Legislative Audit guidelines for the segregation of the revenue, special charges and surcharges. 4.5. Periodic review. The amount of the surcharge 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 surcharge may be set by resolution in accordance with this Section. The rate resolution shall be necessary for the support of government and shall be effective upon passage. SECTION 5. Additional Bonds. As permitted by Sections 8 and 9 of the Act, Additional Bonds payable from revenues and income of the System or Project 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 the income of the Project 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 Mitchell, South Dakota (collectively the “Rate Resolution”). 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, 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 February 15, May 15, August 15, or November 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 U.S. Bank National Association, St. Paul, Minnesota, 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, interest and Administrative Surcharge 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 Section 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 Sections 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. Repeal of Resolution. At such time as the Revenue Bond is defeased or paid in full, this Resolution and the special charge or surcharge shall automatically be repealed without any further action of the City. SECTION 15. 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 16. Effective Date. This Resolution shall take effect on the 20th day following its publication, unless suspended by a referendum. Motion carried and resolution declared duly adopted. Moved by Allen, seconded by Smith, to approve Resolution #R2022-53, a Resolution Amending the City of Mitchell Sewer Rates to Include and Implementing a Surcharge for the Wastewater Treatment Plant Phase I and Livesay Projects, as follows: Resolution R2022-53 A RESOLUTION AMENDING THE CITY OF MITCHELL SEWER RATES TO INCLUDE AND IMPLEMENTING A SURCHARGE FOR THE WASTE WATER TREATMENT PLANT PHASE I, AND LIVESAY PROJECTS IT IS RESOLVED, by the City Council of the City of Mitchell, SD that effective September 1, 2022 rates be set at: Current Water Rates- No Change $9.21 base fee $4.15 per unit charge Water rates include the following surcharges that are segregated from the total fees collected: $1.78/month/user for DSWRF-02 (water storage tank) .85/month/user for DSWRF-05 (west water tower repairs) New Sewer Rates $22.01 base fee $3.40 per unit charge Sewer Rates include the following surcharges that are segregated from the total fees collected: $8.05/month/user for CW-05 (Sanborn Phase II) $3. 70 /month/user for CW-06 (East Central Drainage Phase I) $.99/month/user for CW-07 (East Central Drainage Phase II) $1.11/month/user for CW-08 (Daily Drive Lift Station) $11.60 /month/user for CW-09 (Waste Water Treatment Plant Improvements- Phase I) $.77/month/user for CW-12 (Livesay Improvements) Motion carried and resolution declared duly adopted. ADJOURN: There being no further business to come before the meeting, Mayor Everson adjourned the meeting. Michelle Bathke Finance Officer Published once at the approximate cost of $627.64. (Aug. 6, 2022) 88541