HomeMy WebLinkAbout2021-043 Council ResolutionExtract of Minutes of Meeting
of the City Council of the
City of Lino Lakes, Anoka County, Minnesota
Pursuant to due call and notice thereof a regular meeting of the City Council of the City of Lino
Lakes, Anoka County, Minnesota, was held at the City Hall in the City on Monday, May 10, 2021,
commencing at 6:30 p.m.
The following members of the Council were present: Ruhland, Cavegn, Stoesz, Lyden, Rafferty
and the following were absent: None
RESOLUTION N0. 21-43
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF
GENERAL OBLIGATION STREET RECONSTRUCTION BONDS,
SERIES 2021A, IN THE PROPOSED AGGREGATE PRINCIPAL
AMOUNT OF $11815,000
BE IT RESOLVED By the City Council of the City of Lino Lakes, Anoka County, Minnesota (the
as follows:
1. Authorization.
(a) Pursuant to Minnesota Statutes, Chapter 475, as amended, specifically
Section 475.58, subdivision 3b (the "Act"), the City is authorized to finance all or a portion of the
cost of street reconstruction projects by the issuance of general obligation bonds of the City payable
from ad valorem taxes.
(b) On June 16, 2020, following a duly noticed public heating, the City Council of the
City adopted a five-year street reconstruction (the "Plan") describing the streets to be reconstructed,
estimated costs, and any planned reconstruction of other streets in the City and approved the
issuance of obligations by vote of at least a two-thirds majority of the members of the City Council,
all pursuant to the Act.
(c) Expenditures described in the Plan for 2021 include, among other projects, the
reconstruction of z+ Avenue (Main to Pine), Karth Road, Joyer Lane, Talle Lane, Canfield Road,
and Gaage Lane in the City (collectively, the "Street Reconstruction"), The City estimates that the
total cost of the Street Reconstruction for 2021 is $1,815,000.
(d) The City Council has determined that, within thirty (30) days after the hearing, no
petition for a referendum on the issuance of bonds to pay costs of the Street Reconstruction was
received by the City in accordance with the Act.
(e) The City Council finds it necessary and expedient to the sound financial
management of the affairs of the City to issue obligations in the proposed principal amount of
$1,815,000 (the "Bonds"), pursuant to the Act, to provide financing for the Street Reconstruction.
(f) The City is authorized by Section 475.60, subdivision 2(9) of the Act to negotiate
the sale of the Bonds, it being determined that the City has retained an independent municipal
advisor in connection with such sale. The actions of the City staff and the City's municipal advisor
in negotiating the sale of the Bonds are ratified and confirmed in all aspects.
2. Sale of Bonds. To finance the Street Reconstruction, the City will therefore issue and sell
the Bonds in the proposed aggregate principal amount of $1,815,000, which amount is subject to adjustment
in accordance with the official Terms of Proposal (the "Terms of Proposal"). The Bonds will be issued,
sold and delivered in accordance with the Terms of Proposal attached hereto as EXHIBIT A.
3. Authority of Municipal Advisor. Baker Tilly Municipal Advisors, LLC (the "Municipal
Advisor") is authorized and directed to negotiate the Bonds on behalf of the City in accordance with the
Terns of Proposal. The City Council will meet at 6:30 p.m. on Monday, June 14, 20215 to consider
proposals on the Bonds and take any other appropriate action with respect to the Bonds.
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4. Authority of Bond Counsel. The law firm of Kennedy & Graven, Chartered, as bond
counsel for the City ("Bond Counsel"), is authorized to act as bond counsel and to assist in the preparation
and review of necessary documents, certificates, and instruments relating to the Bonds. The officers,
employees, and agents of the City are hereby authorized to assist Bond Counsel in the preparation of such
documents, certificates, and instruments.
5. Covenants. In the resolution awarding the sale of the Bonds the City Council will set forth
the covenants and undertakings required by the Act.
6. Official Statement. In connection with the sale of the Bonds, the officers or employees of
the City are authorized and directed to cooperate with the Municipal Advisor and participate in the
preparation of an official statement for the Bonds and to deliver it on behalf of the City upon its completion.
(The remainder of this page is intentionally left blank.)
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LN140-125-7] 8748.v1
Adopted by the City Council of the City of Lino Lakes this 1 Oth day of May 2021.
The motion for the adoption of the foregoing resolution was introduced by Councilmember
Stoesz and was duly seconded by Councilmember Ruhland and upon vote being taken thereon,
the following voted in favor thereof: Stoesz, Ruhland, Lyden, Cavegn, Rafferty
The following voted against same: None
%• /.I%p7n
Rob Rafferty, Mayor
ATTEST:
EXHIBIT A
TERMS OF PROPOSAL
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TIIE CITI IL-�S Ai�THORIZED BAiiER TILLS' �II-�TCIPAL :�D�'ISORS, LLC TO
NEGOTIATE THIS ISStT ON ITS BEILkLF. PROPOSALS NVILL BE RECEIVED ON THE
FOLLOWING BASIS:
TER -IS OF PROPOSAL
g1,8151000"
CITI' OF LINO LAKES, MI\1ESOTA
GEtiER�I.OBLIC�ATIO� STREET REC;OI�STRI'CTIO\ BO\DS, SERIES?031A
{BOOB: E1TRI' O�LI'}
Proposals for the above -referenced obligations (the ''Bonds"} avill be received 1?v the t'ih' of Lino Lakes.
Minnesota (the ``Cit4°'•)on Monday, .Tune 14_ 2f121 {the '`Sale Date"} until 10:00 A.M , Central Time {the
Sale Time at the offices of Baker Tilly illunicipal Advisors, LLC {"Baker T llv MA"), 380 Jackson
Street, Suite 100. Saint Paul. Minnesota, 55101. after which time proposals -will be opened and tabulated.
Consideration for award of the Bonds will be by the Oita% Council at its tneetine commencing at 6:30 P.M..
Central Time. of the same clay. ~
SLiI3'tiIISSIC)N OF PRC)Pt�SALS
Baker Tilltir Ia�i_a `mill :assuane no liahilit�t for the nubility of a bidder or its proposal to reach Baker Ti11y
LA prior to the Sale Time. and neither the City nor Baker I My NIA shall be responsible Tor ana failure.
misdirection or error in the means of transmission selected by anV bidder. All bidders are advised that each
proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds
retyardless of the mariner in which the proposal is submitted.
{<1) Serr7erl Bidding. C'ompfeted . signed proposals may be submitted to Baker Tilly MA by elnnil to
bondsen tc cci)bakertiilv.com of bvfaz {C,11223-30-16and trust he receia>ed prior to the Sale Time.
{bj Electrorrie BidcJin�. Proposals ma5� also, be received via F�RIT�'�. For purposes of the electronic.
biddirl� process, the time as maintained bz- PARITY` shall constitute the official finis aaith respect to all
proposals submitted to PARITY `. Each bidder S)r�jI7 be so7e11' resi�>nsible for mcrtirrb nccecs�n 4
crr-rargements o accesPJRITV` olngvss ormb1litil?Rf ie1ecrorri)ooa1 ia iek ownlzer-and
irr compliance wirh the r•equireinents of floe Terms of P•oI)osat. Neither the City, its agents, nor PARITY''
shall have ant- duty or obligation to undertake registration to bid for any prospective bidder or to provide
or ensure electronic access to any qualified prospective bidder. and neither the City, its agents_ nor
PARITY' shall be responsible for a hidder's failure to register to bid or for and- failure in the proper
operation of or hate any liability for any delays or intemtptions of or any damages caused bz the services
of PARITY`. The Cite is usutg the sengices ofPARITV solely as a communication mechanism to conduct
the electronic bidding for the Bonds, and PARITYA is not an avert of the Citv.
If ant- provisions of this Terms of Proposal conflict with information provided by PARITI-,, this Terns of
Proposal shall control. Further niftarmation about PARITY, including any fee charted. matt be obtained
from:
PARITV. 13;9 Broadaa°aa-• Floor. New York. Neaa- York 1 t)018
Customer Support. {212) S�9->00(}
' 1�TBl77i77J1(77l'; .571b1(:C'J' I0 C'170774'8.
Baker Tilly Munitfaal Advise.,,, LLC i5 a tegistarad rnunid�al adiisar and �cEntrn(lec s+ibsidiary cf Baker T'iiig1�5, LIP, an aaq�mting firm.
6aker Tilly ITS, UP trading as [3aker Tilly is a meinber of the elc�hal netv.arl:nf C9aker ; iEly Internatic�nai Ltd., a6e members ui which are separate
and indeF+endeau legit entities, fSi 2121 Baker Tilly tl�tiznicipal i?d:isc+rs, tLC
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DETAILS tap THE BONDS
The Bonds to ill be dated as of the date of dehA ery and tvi11 bear urterest pay able ou pabruary 1 kind August 1
of each year. corrunencing February 1. 2022. interest will be computed on the basis of 360-dav year of
welve 30-day months.
The Bonds will mature pebntarZ- 1 in the years and amounts` as follo�ys:
?024 S17•5.000 2026 $180-000 2028 $180.000 2030 SMti .1000 2032 $190.000
Tlae Cin' reserves tlae rii?lat, rtfter-prcrizosnZs ar-e opened orxd pr-inr to ms<7rtl, to increase or redrtce thepr-inc�ipra
ctrnourzt of the Bone,14% Orr the tzrnvrnu ofonY rnnturin• or 7notrrrities ira rxulriples of S.3,000. In the everal the amount
ofarar 717O110!tV is rraodified, the it -ill he rrtljustcd to reszrli m the some gross -cprerd per-
S1,000 of Bonds as th t of the oriQinnl propOso7. Grass spread jor this p apose is the dw,&ranfill l between the
17rice poid to the CYm for the ne-t, issue and thenn es of which theproposal indicates will be initially
afferecl to the irn%esring public.
Proposals for the Bonds mat= contain a manrity- schedule providing for a combination of serial bonds rind
term bonds. All term bonds shall be subject to mandaton° sinking fund redemption at a price of par plus
accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above.
In order to desianate term bonds, the proposal must specify "`Years of Tenn Maturitiesin the spaces
propI ided on the proposal form.
BOC)I: E'�TRI' SYSTEM
The Bonds t� il1 be issued by means of a book enm� system �sith no physical distribution of Boncls made to
the public. The Bonds will be issued in frilly registered form and one Bond. representing the aggregate
principal amount of the Bonds maturing in each hear, will be registered in the name of Cede Co. as
nominee of The Depository Trust Company ("DTC"), *,New I ork. Nett York. which Will act as securities
depositoiw for the Bonds. Individual purchases of the Bonds maybe made in the principal amount of S�)000
or any multiple thereof of a single maturity through book entries made on the books and records of DTC
and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered
c wrier of the Bonds. Transfer of principal and interest payments to participants of DTC will be the
responsibility- of DTC; transfer of principal curd interest payments to beneficial oNviiers by participants Neill
be the responsibility of such participants and other nouunees of beneficial owners. The lowest bidder (the
"Purchaser"). as a condition of delis erV of the Bonds. Nvill be required to deposit the Bonds With DTC.
REGISTRAR
The C`it�- �yill name size registrar a-hich shall be subject to applicable re�rrlations of the Securities and
E:~;change Commission. The Cite t�-i11 pas-• for tie serti-ices of tie registrar.
OPTIONAL
REDE'yIPTION
The Cite ura}= elect on petinuary- 1, 2029, and on any day thereafter, to redeem Bonds due on or after
February 1. 2030- Redcnuption may be in u��hale or in part arrd if in part at the option of sire Cut}- and in
such manner as the City- shall determine. If less than all Bonds of a maturity are c-alle-d for redemption. the
City Will notifi7 DTC of the particular amount of such inatturitti_- to be redeemed. DTC AN -ill determine by lot
the amount of each participant's interest in such manirity to be redeemed and each participant Will then
select by lot the beneficial ownership interests in such maturity to be redeemed. All redemptions shall be
at a price of par plus accrued interest.
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LN140-125-718748.v1
I. UFU L I 'Al Lj PtiRPt�SE
The Bonds will be genea, obligations of the City for 1 °Mich tine C`in will l leclae its fill fault and credit and
power to lets- direct general ad valorem taxes. Tine proceeds of the Bonds will be used to finance various
street reconstruction projects as identified in the Citt.`s 2'020,20?4 Street Reconstruction Plan.
QI.I..IPIED TAB-E1FTPT OBLIt:7 �TIC3\S
The C'itti� tt7ll tiesi�ata the Bonds as qualified tax-exempt abligations for piu�tases of Section ?65(b)(3} of
the Internal Revenue Code of 1986. as amended.
BTDDT'3CT P<�R�=��ETERS
Proltosals shall be for not less than'�1.800,480 plus acenied vtterest, if anv, ou the total principal annouut
of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals on the
Sale Date iudess the meeting of the Cite= scheduled for award of the Bonds is adjatuzned, recessed, or
continued to another date ivithout award of the Bonds having been made. Rates shall be in integral multiples
of 1;/100 or 1-8 of 10o. The initial price to the public for each maturity as stated on the proposal roust be
9&011o or greater. Bonds of the same niaturityv shall bear a single rate fram the date of the Bonds to the date
of maturity. NTo conditional proposals will be accepted.
ESTABLISHA3E1ti�I' C>F ISSt?E PRICE
In order to prop°ide the Cite t�=i8i irrfontaation necessary° far cornpliauce with Section 1=t8 of the Internal
Revenue Code of 1986, as amended. and the Treasure Regulations promulgated thereunder (cotlectiveIV
the "Cade"). the Purchaser will be required to assist the City in establishing the issue price of the Bonds
and shall complete. execute, and deliver to the City prior to the closing date. a written certification u) a form
acceptable to the Purchaser. the Cite. and Bond Counsel fthe "Issue Price Certificate"} containing the
followino for each maturity of the Bonds (and, if different interest rates apply within a nnaturritt-* to each
separate CUSIP munber within that mattu•ity): (i) the interest rate: (nil the reasonablw expected initial
offering price to the "public' (as said term is defined in Treasury Regulation Section 1.1484(f) (the
"Regulation"}") or the sale price_ and (iii) pricing wires or equivalent communications supporting such
offering or sale price. Any action to be taken or doctnmentatiou to be received by the City pursuant hereto
rnaw be taken or received on behalf of the Citz- by Baker Tillv TMA.
The Cite intends that the Sale of the Bonds pursuant to this Terms of Proposal shall constitute a "competitive
sale" as defined in the Regulation leased on the faIlawilig_
the C,it�- shall cause this Teens of Proposal to be disseminated to potential bidders in a
manner that is reasonably designed to reach potential bidders;
alt bidders shall have an equal opportunity to submit a bid:
{iii) the City reasonably expects that it will receive bids from at least three bidders that have
established industry reputations for undemwriting municipal bonds such as the Bonds: and
(ir) the Cite- anticipates awarding the sale of the Bonds to the bidder who provides a proposal
with the lowest true interest cost, as set forth in this Terms of Proposal (See "ANVARD
liereiii).
Any bid submitted pursuant to this Terms of Proposal shall be considered a firm offer for the purchase, of
the Bonds. as specified in the proposal. The Purchaser shall constihrte au "urtderlwriter" as said term is
defined in the Regulation. By submitting its proposal, the Purchaser confirms that it shall require any
agreement among underwriters, a selling group agreement, or other agreement to which it is a part-- relating
to the initial sale of the Bonds. to include provisions requiring compliance with the provisions of the Code
and the Regulation renarding the initial sale of the Bonds.
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LN 140-125-718748.v 1
If all of the requirements of a "competitive sale" are not satistied.. the City- shall advise the Purchaser of
such fact prior to the tithe of award of the sale of the Bonds to the Purchaser. In such event, any proposal
submitted will not be subject to cancellation or withdrawal. Within tweety-four (1.4) hours of the notice
of award of the sale of the Bonds. the Purchaser shall advise the City' and Balser Tilly' IMA if 1011,0 of anv
maturity of the Bonds (and. if different interest rates apply within a maturity. to each separate CUSIP
number within that maturity) has been sold to the public and the price at which it was sold. The Cite will
treat such sale price as the "issue price' for such mahrritt, applied on a mahrity-by-nraturitt' basis. The
City will not require the Purchaser to comply with that portion of the Regulation commonly desetibed as
the "hold -the -offering -price' requirement for the remaining maturities, but the Purchaser tray elect such
option. If the Purchaser exercises such option. the City will applw° the initial offering price to the public
provided in the proposal as the issue price for such Maturities. If the Purchaser does not exercise that option.
it shall thereafter promptly provide the City and Barer Tilly NLN the prices at which 100 6 of such maturities
are- sold to the public: provided such determination shall be made and the City and Baker Tilly ILIA notified
of such prices whether or not the closing date has occurred, until the 0°o 1test has been satisfied as to each
maturity of the Bonds or until all of the Bonds of a maturity have been sold.
t�C)D F,�ITH DEPt�SIT
To have its 1:,roposal considered fan ati�-ard, the Purchaser is required to submit a good faith deposi# via ��=ire
transfer to the City in the amount of S15.150 (the `Deposit') no later than 1:00 P.M.. Central Time on the
Sale Date, The Purchaser shall be solely responsible for the timely deliveiA! of its Deposit, and neither the
C ity nor Baker Tilly hLk have auv liabiliry for delays in the receipt of the Deposit. If the Deposit is not
received by the specified time, the City may_ at its sole discretion, tjeet the proposal of the lowest bidder.
dI
rect the second lowest bidder to submit a Deposit, and thereafter award the sale to such bidder.
A Deposit t�`ill be consicleretl tirnelti7 delis=eyed to t11e C`itZ' upon sttbnussion of a federal hire reference
rrtrtiiber by the specified time, I i e transfer iush-uctions will be available front Baker Tilly CIA folloiiI11
the receipt and tabulation of proposals. The successful bidder Hurst send an e-mail including the following
inforniation: (1) the federal reference number and time released: (ii) the amount of the Xvire transfer: and
{ iii) the issue to which it apphes,
t�rnce an au3-ard has been made, the Deposit received from the Purchaser will be retairned by the City and no
interest �t�ill accraue ro the Purchaser. The aurour7t of the Deposit twill be deducted at settlement from the
purchase price. Its the event the Purchaser fails to comply with the accepted proposal. said amount will be
retained bV the Citv.
A)YARD
The Bonds will be awarded on the basis of the lowest interest rate to be deter-trlined oil a hue interest cost
(TIC) basis calculated our the prol)osai prior to guy ac�iustment made by the City . The C`ity's compurtatiou
of the interest rate of each proposal, in accordance Xvith custontary practice. "rill be c-ontroiling.
The City will reserve the right to: (i) waive- non -substantive informalities of any proposal or of matters
relating to the receipt of proposals and air -aid of the Bards, (ii}reject all proposals without cause. and
{iii? reject aul- proposal that the Cite determines to have failed to comply with the teens herein.
BOND
E\,SI_7R-3NC_'E AT PURCHASER'S {JPTION
The C'itl' haS not applied fOr Or pre -approved a COlulnitllletlt for a11j' poltCv of tMrnIeipal tlOnd ll15tr'aill`e
r��itln res}nect to rlre Bands. If the Bonds quali%fir municipal band inaurauce and a bidder desires to
purchase a pohct such indication. the rrrahtrities to be insured, find tale name of the desired insurer must be
set forth on the bidder's proposal. The City specifically reseii�es the right to reject any bid specifi'utg
municipal bond insurance, even thou��tr such bid may result in the lowest TIC to the Cite°. All costs
associated with the issuance and administration of such policy and associated ratings and expenses (other
than anv independent rating requested by the City) shall be paid by the successful bidder. Failure of the
municipal bond insurer to issue the policy after the award ofthe Bonds shall not constihute cause for failure
or refusal bt- the successful bidder to accept delivery of the Bonds.
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CL{SIP'� i4IBERS
If the Bonds qualify for the assigrunent of CUSIP numbers sttclx uttu>t>ers �1°ilI be Ixrinted ou the Bonds_
hoi-'eVer. neither the failure to print such muxxbers on any Bond nor and° error with respect thereto will
constitute cause for failure or refitsal by the Purchaser to accept delivery of the Bonds. Balser Tilly "NIA
Vill apple for CUSIP nunxbers pursitarxt to Rule G-3d implemented by the Municipal Securities Rulenmking
Board. The C USIP Service Bureau charge for the assigrunent of C USIP identification munbets shall be
paid by the Purchaser.
SETTLER IE'_v' T
Ckx or about July 15.2f121 •the Bands x�-ill be deliS-ered i�, ithout cost to the Ptuchaser• tluauglx DTC` in vetiy
Cork. New York. Dellvery will be subject to receipt by the Puuchaser of an approving legal opinion of
Kennedy A Graven, Chartered of Minneapolis. Mirmesom. and of customary closing papers. including a
rxo-litigation certificate. Can the date of settlement. payment for the Bonds shall be made in federal, or
equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noou.
Cents <al Time. finless compliance with the reruns of payment for the Bonds has been grade impossible by
action of the City. or its azents. the Purchaser shall be liable to the City for any loss suffered by the City by
reason of the Purchaser's non-compliance with said terms for payment.
CCi�Ti_'ti't"I1�G DISC'LOSt�RE
fix accordance i�°fish SEC.- Rule 15c2-1?tbl"5?, tlxe Ciry' s�°i11 tuxdettake, ptusuaut to tlxe resolution a��-arding
sale of the Bonds. to provide annual reports and notices of certain events. A description of this tudertaking
is set forth in the Official Statement. ?lie Pturchaser'{ obligation to purchase the Bonds 7,vil1 be conditioned
upon r•eceliling evidence of this undertaking at or prior to delivery of the Bonds,
CiFFIC'L-AL STaTEXiEI1"T
The Cinhas authorized the preparation of a Preluninar�r Official Statement containing pertuxent
information relati�-e to the Bonds. and said Prelitxxinat�� Official Statenxent has beers deenxed #final by the
City as of the elate thereof within the meaning of Rule 1 Sc'- -'12 of the Securities and Exchange Commission.
For an electronic cope of the Prelinxinary Official Statement or for any additional inforivation prior to sale4
any prospective purchaser is referred to the Municipal Advisor to the City. Baker Tilly Municipal Advisors,
LLC. by telephone (651) 223-3000. or by enxail bondser,ice'tcbakert.illv,corn. The Preliminary, Official
Statement will also be made available at Ixttp�: i`comrect.baker tills .corn-l}ond-sales-calendar.
AFilial Official Statement #,as that term is defined in Rule 15c2-14j will be prepar•ecl_ sJpecif3fing the maturity
date;, prirxcipal amoturts. and uxterest rates of the Bond;. together taith any- other irrforruation required by
late. By awarding the Bonds to the Puurchaser. the City aznlees that Ixo snore than seven business days after
tlxe date of such award, it shall provide to the Puurchaser in electronic copy of the Final Official Statenxent,
The City desimiates the Purchaser as its went for purposes of distributing the Filial Official Statement to
eaclx sTrrldicate memben if applicable. The Pturchaser agrees that if its proposal is accepted by the City.
(i) it shall accept desigi ation and (ii) it shall enter into a contractual relationship lkvith its syndicate members
for purposes of assuring the receipt of the Final Official Statement by each such syndicate member.
Dated May 10. 2021
BY ORDER OF THE CITY COUNCIL
i,! Julie Bartell
C'it�- Clerk
LN 140-125-718748.v 1
STATE OF MINNESOTA )
COUNTY OF ANOKA )
CITY OF LINO LAKES )
I, the undersigned, being the duly qualified and acting City Clerk of the City of Lino Lakes,
Minnesota (the "City"), hereby certify that I have carefully compared the attached and foregoing extract of
minutes of a regular meeting of the City Council of the City held on Monday, May 10, 2021, with the
original minutes on file in my office and the extract is a full, true, and correct copy of the minutes, insofar
as they relate to the issuance and sale of the City's General Obligation Street Reconstruction Bonds,
Series 2021A, in the proposed aggregate principal amount of $1,815,000.
WITNESS My hand as City Clerk and the corporate seal of the City this day of May, 2021.
(SEAL)
LN 140-125-718748.v 1
City Clerk
City of Lino Lakes, Minnesota
STAFF ORIGINATOR:
MEETING DATE:
CITY COUNCIL
AGENDA ITEM 2A
Hannah Lynch, Finance Director
May 10, 2021
TOPIC: Consider Resolution No. 21-43, Providing for the Issuance and
Sale of General Obligation Street Reconstruction Bonds, Series
2021A, in the Proposed Aggregate Principal Amount of $1,815,000
VOTE REQUIRED: 3/5
On June 22, 2020, the City Council held a public hearing, approved the 2020-2024 Five Year
Street Reconstruction Plan, and gave preliminary approval regarding the issuance of Street
Reconstruction Bonds.
On February 8, 2021, the City Council accepted bids and awarded a construction contract for
the 2021 Street Improvement Project. The project includes street reconstruction and street
rehabilitation. The street reconstruction portion includes a full depth reclamation, spot subgrade
repairs, and culvert replacements in the following areas:
® 4th Avenue between Main Street and Pine Street
Joyer Lane between Birch Street and Karth Road
Karth Road between Joyer Lane and the cul-de-sac
® Talle Lane between Karth Road and Canfield Road
® Canfield Road between Talle Lane and Gaage Lane
® Gaage Lane between Canfield Road and Birch Street
In order to finance these improvements, the City planned to issue General Obligation Street
Reconstruction Bonds. The street rehabilitation portion of the project will be funded from other
sources.
Also on February 8, 2021, the City Council adopted a resolution declaring the intent to
reimburse from future bond proceeds. The Internal Revenue Code requires cities to declare
their intent to reimburse project costs incurred prior to receipt of bond proceeds. Preliminary
expenditures such as architectural, engineering, surveying, bond issuance, and similar costs are
exempt from this provision.
The General Obligation Street Reconstruction Bonds will be repaid over a 10-year period by an
annual debt service tax levy. This levy was anticipated in the City's Capital Equipment Plan which
was reviewed in the Fall of 2020.
The City's fiscal advisor, Baker Tilly, -has prepared aPre-Sale Summary for the Issuance of
General Obligation Street Reconstruction Bonds to finance the 2021 Street Reconstruction
improvements. Terri Heaton of Baker Tilly will be available to answer any questions that the City
Council may have relative to the recommended financing.
Approval of Resolution No. 2143 provides for the issuance and sale of General Obligation Street
Reconstruction Bonds, Series 2021A, in the proposed aggregate principal amount of $1,815,000.
If approved, bids would be received on June 14, 2021, with consideration of award and sale by
the City Council at its meeting the same day.
RECOMMENDATION
Staff is recommending approval of Resolution No. 21-43.
ATTACHMENTS
Baker Tilly Pre -Sale Summary for Issuance of Bonds
Resolution No. 2143
bakertilly
MUNICIPAL.jaDVISORS
City of Lino Lakes, Minnesota
Pre -Sale Summary for Issuance of Bonds
$1,815,000 General Obligation Street Reconstruction Bonds, Series 2021A
The Council has under consideration the issuance of bonds (the "Bonds") to finance various street reconstruction
projects within the City. This document provides information relative to the proposed issuance.
KEY EVENTS:
RATING:
The following summary schedule includes the timing of some of the key events that will
occur relative to the bond issuance:
May 10, 2021
Week of May 31, 2021
June 14, 2021, 10:00 a.m
June 14, 2021 6:00 p.m.
July 15, 2021
Council sets sale date and terms
Rating conference is conducted
Competitive proposals are received
Council considers award of the Bonds
Proceeds are received
An application will be made to S&P Global Ratings (S&P) for a rating on the Bonds. The
City's general obligation debt is currently rated "AA+" by S&P.
THE MARKET: Performance of the tax-exempt market is often measured by the Bond Buyer's Index ("BBI")
WHICH measures the yield of high grade municipal bonds in the 20th year for general
obligation bonds rated Aa2 by Moody 's or AA by S&P (the BBI 20-13ond GO Index) and the
301h year for revenue bonds rated Al by Moody's or A+ by S&P (the BBI 25-13ond Revenue
Index). The following chart illustrates these two indices over the past five years:
FsBI 2U-Bond {�t�� and 23-6+�nd {Revenue) Indices. for 5 Yeats
2.5%
PURPOSE: Proceeds of the Bonds will be used to finance costs of various street reconstruction
projects as identified in the City's 5-Year Street Reconstruction Plan (2020-2024).
AUTHORITY: Statutory Authority: The Bonds are being issued pursuant to Minnesota Statutes,
Chapter 475, Section 475.58 (subd. 3b).
Statutory Requirements: The City must have a 5-Year Street Reconstruction Plan and
comply with the public hearing requirements. The City previously completed these
requirements with a public hearing held on June 22, 2020 and the 30-day petition period
expiration on July 23, 2020,
SECURITY AND The Bonds will be a general obligation of the City secured by its full faith and credit and
SOURCE OF taxing power and paid from ad valorem property taxes. The City will make their first levy
PAYMENT: for the Bonds in 2021 for collection in 2022. The February 1, 2022 interest payment
comes due prior to the first full anticipated collection of taxes and will be paid from
capitalized interest included in the principal amount of the Bonds. Each year's tax
collections will be used to make the August 1 interest payment due in the collection year
and the February 1 principal and interest payment in the following year.
STRUCTURING In consultation with City staff, the Bonds have been structured with a repayment term of
SUMMARY: 10 years with an approximately level debt service payments.
SCHEDULES Schedules attached for the Bonds include (i) sources and uses of funds; and (ii) estimated
ATTACHED: net debt service, given the current interest rate environment.
RISKSISPECIAL The outcome of this financing will rely on the market conditions at the time of the sale.
CONSIDERATIONS: Any projections included herein are estimates based on current market conditions
SALE TERMS AND Variability of Issue Size: A specific provision in the sale terms permits modifications to
MARKETING: the issue size and/or maturity structure to customize the issue once the price and interest
rates are set on the day of sale.
Prepayment Provisions: Bonds maturing on or after February 1, 2030 may be prepaid at
a price of par plus accrued interest on or after February 1, 2029.
Bank Qualification: The City does not expect to issue more than $10million in tax-exempt
obligations that count against the $10 million limit for this calendar year; therefore, the
Bonds are designated as bank qualified.
Post Issuance Compliance
POST ISSUANCE The issuance of the Bonds will result in post -issuance compliance responsibilities. The
COMPLIANCE: responsibilities are in two primary areas: (i) compliance with federal arbitrage
requirements and (ii) compliance with secondary disclosure requirements.
C� balkertilly
MUNICIPAL ADV35aft5
Federal arbitrage requirements include a wide range of implications that have been taken
into account as this issue has been structured. Post -issuance compliance responsibilities
for this tax-exempt issue include both rebate and yield restriction provisions of the IRS for
this Code. In general terms the arbitrage requirements control the earnings on
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unexpended bond proceeds, including investment earnings, moneys held for debt service
payments (which are considered to be proceeds under the IRS regulations), and/or
reserves. Under certain circumstances, any "excess earnings" will need to be paid to the
IRS to maintain the tax-exempt status of the Bonds. Any interest earnings on gross bond
proceeds or debt service funds should not be spent until it has been determined based on
actual facts that they are not "excess earnings" as defined by the IRS Code.
The arbitrage rules provide for spend -down exceptions for proceeds that are spent within
either a 6-month, 18-month or, for certain construction issues, a 24-month period each in
accordance with certain spending criteria. Proceeds that qualify for an exception will be
exempt from rebate. These exceptions are based on actual expenditures and not based
on reasonable expectations, and expenditures, including any investment proceeds will
have to meet the spending criteria to qualify for the exclusion. The City expects to meet
the 18-month spending exception.
Regardless of whether the issue qualifies for an exemption from the rebate provisions,
yield restriction provisions will apply to Bond proceeds (including interest earnings)
unspent after three years and the debt service fund throughout the term of the Bonds.
These moneys should be monitored until the Bonds are retired.
Secondary disclosure requirements result from an SEC requirement that underwriters
provide ongoing disclosure information to investors. To meet this requirement, any
prospective underwriter will require the City to commit to providing the information needed
to comply under a continuing disclosure agreement.
Baker Tilly MA currently provides both arbitrage and continuing disclosure services to the
City. Baker Tilly MA will work with the City staff to include the Bonds under the existing
Agreement for Municipal Advisor Services.
SUPPLEMENTAL Supplementary information will be available to staff including detailed terms and
INFORMATION AND conons of sale, comprehensive structuring schedules and information to assist in
BOND RECORD: meeting post -issuance compliance responsibilities.
Upon completion of the financing, a bond record will be provided that contains pertinent
documents and final debt service calculations for the transaction.
Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and controlled subsidiary of Baker Tilly US, LLP, an accounting
firm. Baker Tilly US, LLP trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members
of which are separate and independent legal entities. O 2021 Baker Tilly Municipal Advisors, LLC.
MUNIC3FAL ADVISORS
$1,815,000
City of Lino Lakes, Minnesota
General Obligation Street Reconstruction Bonds, 2021A
Issue Summary
Sources &Uses
Dated 07/15/2021 I Delivered 07/15/2021
Sources Of Funds
Par Amount of Bonds.
$1,815,000.00
TotalSources....................................................................................................................................................
$1,8153000.00
Uses Of Funds
Deposit to Project Construction Fund..,,.". ... .............. & ..... & ............. 0 0 ........... . 0. * 6 * . - . b .... I..Ip ................... 1,750,000.00
Costsof Issuance................................................................................................................................................ 387675.00
Total Underwriter's Discount(0.800%)................................................................................................................... 147520.00
Deposit to Capitalized Interest (CIF) Fund.......................................................................................................6....... 10,524.11
RoundingAmount................................................................................................................................................. 1,280.89
TotalUses.......................................................................................................................................................... $1,815,000.00
2021A GO Bonds 10 Yrs 4.2 I SINGLE PURPOSE 14/212021 112:42 PM
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MUNICIPAL ADVISORS
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$1,8153v w
City of Lino Lakes, Minnesota
General Obligation Street Reconstruction Bonds, 2021A
Issue Summary
NET DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+1 CIF Net New DIS 105% Levy
02/01/2022
-
-
10,524.11
10,524.11
(10,524.11)
-
-
02/01/2023
1757000.00
0,550%
195330.00
1947330.00
- 1942330,00
204,046.50
02/01/2024
1757000.00
0.650%
182367.50
193,367,50
- 193,367.50
203,035.88
02/01/2025
175,000.00
0,750%
17,230.00
1923230.00
- 1927230.00
201,841.50
02/01/2026
180,000.00
0.850%
15,917,50
195,917.50
- 195,917,50
205,713.38
02/01 /2027
180,000.00
0.950
%
14,387.50
194, 387.50
194, 387.50
204,106.88
02/01/2028
180,000.00
1.150%
12,677,50
192,677.50
- 192,677.50
202,311.38
02/01/2029
185,000.00
1.200%
103607.50
195,607.50
- 1953607.50
205,387.88
02/01/2030
1859000.00
1.350%
81387,50
193,387.50
- 193,387.50
203,056.88
02/01/2031
190,000.00
1,500%
52890.00
195,890.00
- 195,890.00
2055684.50
02/01/2032
190,000.00
1.600%
3,040.00
1935040.00
- 1935040.00
202,692.00
Total
$1,8157000.00
$1367359.11
$1,9512359.11
(103524,11) $1,9402835.00
$2,0371876.75
SIGNIFICANT DATES
Dated Date ................
Delivery Date .............
First Coupon Date.....,
Yield Statistics
Bond Year Dollars ......................................
AverageLife ...............................................
Average Coupon .........................................
Net Interest Cost(NIC)................................
True Interest Cost (TIC),.., .......
Bond Yield for Arbitrage Purposes',,......,., ....
All Inclusive Cost(AIC)...........................I....
IRS Form 8038
Net Interest Cost ........................................
Weighted Average Maturity ..........................
2021A GO &mds 10 Vrs 42 I SINGLE PURPOSE 14/21/2021 � 12:42 PM
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htUNIClPAt. ADVISORS
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