HomeMy WebLinkAbout2010-031 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,
April 12, 2010, commencing at 6:30 P.M.
The following members of the Council were present:
and the following were absent:
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The following written resolution was presented by Councilmember I)oese,t- , who
moved its adoption, the reading of which had been dispensed with by unanimous consent:
RESOLUTION NO. 10 -31
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF
APPROXIMATELY $1,015,000 GENERAL OBLIGATION IMPROVEMENT
AND UTILITY REVENUE REFUNDING BONDS, SERIES 2010A
BE IT RESOLVED By the City Council of the City of Lino Lakes, Anoka County,
Minnesota (the "City ") as follows:
1. It is hereby determined that:
(a) the City is authorized by Minnesota Statutes, Chapter 475 (the
"Act ") and section 475.67, subdivision 3, of the Act to issue and sell its general
obligation bonds to refund obligations and the interest thereon before the due date of the
obligations, if consistent with covenants made with the holders thereof, when determined
by the City Council to be necessary or desirable for the reduction of debt service cost to
the City or for the extension or adjustment of maturities in relation to the resources
available for their payment;
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(b) Section 475.67, subdivision 4 of the Act permits the sale of
refunding obligations during the six month period prior to the date on which the
obligations to be refunded may be called for redemption;
(c) it is necessary and expedient to the sound financial management of
the City that the City issue approximately $1,015,000 General Obligation Improvement
and Utility Revenue Refunding Bonds, Series 2010A (the "Bonds ") to refund certain
outstanding general obligations of the City.
(d) the outstanding bonds to be refunded (the "Refunded Bonds ")
consist of the $1,330,000 General Obligation Improvement and Utility Revenue Bonds,
Series 2004A, dated November 15, 2004, of which $965,000 in principal amount is
currently outstanding and is callable on July 1, 2010.
2. The City will issue and sell Bonds in the amount of approximately $1,015,000.
To provide in part the additional interest required to market the Bonds at this time, additional
Bonds will be issued in the amount of $1,007,134. The excess of the purchase price of the
Bonds over the sum of $7,866 will be credited to the debt service fund for the Bonds for the
purpose of paying interest first coming due on the additional Bonds, unless otherwise provided in
the resolution awarding sale of the Bonds. The amounts cited above are subject to adjustment in
accordance with the Terms of Proposal. The Bonds will be issued, sold and delivered in
accordance with the terms of the following Terms of Proposal:
366343v1 SJB LN 140 -106
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• THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE
THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE
FOLLOWING BASIS:
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TERMS OF PROPOSAL
$1,015,000*
CITY OF LINO LAKES, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT AND UTILITY REVENUE
REFUNDING BONDS, SERIES 2010A
(BOOK ENTRY ONLY)
Proposals for the Bonds and the Good Faith Deposit ( "Deposit ") will be received on Monday,
May 10, 2010, until 10:30 A.M., Central Time, at the offices of Springsted Incorporated,
380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened
and tabulated. Consideration for award of the Bonds will be by the City Council at 6:30 P.M.,
Central Time, of the same day.
SUBMISSION OF PROPOSALS
Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the
time of sale specified above. All bidders are advised that each Proposal shall be deemed to
constitute a contract between the bidder and the City to purchase the Bonds regardless of the
manner in which the Proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223 -3046
to Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted
prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final
Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in
the submitted Proposal.
OR
(b) Electronic Bidding Notice is hereby given that electronic proposals will be received via
PARITY ®. For purposes of the electronic bidding process, the time as maintained by PARITY®
shall constitute the official time with respect to all Bids submitted to PARITY ®. Each bidder
shall be solely responsible for making necessary arrangements to access PARITY® for purposes
of submitting its electronic Bid in a timely manner and in compliance with the requirements of
the Terms of Proposal. Neither the City, its agents nor PARITY® shall have any 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 bidder's failure to register to bid or for any failure in the
proper operation of, or have any liability for any delays or interruptions of or any damages
caused by the services of PARITY ®. The City is using the services of PARITY® solely as a
communication mechanism to conduct the electronic bidding for the Bonds, and PARITY® is not
an agent of the City.
Preliminary; subject to change.
366343v1 SJB LN140 -106
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If any provisions of this Terms of Proposal conflict with information provided by PARITY ®, this
Terms of Proposal shall control. Further information about PARITY ®, including any fee
charged, may be obtained from:
PARITY ®, 1359 Broadway, 2nd Floor, New York, New York 10018
Customer Support: (212) 849 -5000
DETAILS OF THE BONDS
The Bonds will be dated June 1, 2010, as the date of original issue, and will bear interest payable
on February 1 and August 1 of each year, commencing February 1, 2011. Interest will be
computed on the basis of a 360 -day year of twelve 30 -day months.
The Bonds will mature February 1 in the years and amounts* as follows:
2011 $105,000
2012 $ 95,000
2013 $ 95,000
2014 $ 95,000
2015 $100,000
2016 $100,000
2017 $100,000
2018 $105,000
2019 $110,000
2020 $110,000
* The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal
amount of the Bonds or the maturity amounts offered for sale. Any such increase or reduction will be made in
multiples of $5, 000 in any of the maturities. In the event the principal amount of the Bonds is increased or
reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a
percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced.
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at
a price of par plus accrued interest to the date of redemption and must conform to the maturity
schedule set forth above. In order to designate term bonds, the proposal must specify "Years of
Term Maturities" in the spaces provided on the Proposal Form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Bond,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The Depository Trust Company ( "DTC "),
New York, New York, which will act as securities depository of the Bonds. Individual
purchases of the Bonds may be made in the principal amount of $5,000 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 owner of the Bonds. Transfer of principal and interest payments to participants of
DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial
owners by participants will be the responsibility of such participants and other nominees of
beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to
deposit the Bonds with DTC.
366343v1 SJB LN140 -106
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REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The Bonds will not be subject to payment in advance of their respective stated maturity dates.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition, the City will pledge
special assessments against benefited properties and net revenues of the City's water utility. The
proceeds will be used to refund the February 1, 2011 through February 1, 2020 maturities of the
City's General Obligation Improvement and Utility Revenue Bonds, Series 2004A, dated
November 15, 2004.
BIDDING PARAMETERS
Proposals shall be for not less than $1,007,134 and accrued interest on the total principal amount
of the Bonds.
No proposal can be withdrawn or amended after the time set for receiving proposals unless the
meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to
another date without award of the Bonds having been made. Rates shall be in integral multiples
of 5/100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the rate
for any maturity cannot be more than 1% lower than the highest rate of any of the preceding
maturities. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the
date of maturity. No conditional proposals will be accepted.
GOOD FAITH DEPOSIT
Proposals, regardless of method of submission, shall be accompanied by a Deposit in the amount
of $10,150, in the form of a certified or cashier's check, a wire transfer, or Financial Surety Bond
and delivered to Springsted Incorporated prior to the time proposals will be opened. Each bidder
shall be solely responsible for the timely delivery of their Deposit whether by check, wire
transfer or Financial Surety Bond. Neither the City nor Springsted Incorporated have any
liability for delays in the transmission of the Deposit.
Any Deposit made by certified or cashier's check should be made payable to the City and
delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101.
366343v1 SJB LN140 -106
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Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's agent
according to the following instructions:
Wells Fargo Bank, N.A., San Francisco, CA 94104
ABA #121000248
For credit to Springsted Incorporated, Account #635 - 5007954
Contemporaneously with such wire transfer, the bidder shall send an e -mail to
bond_services @springsted.com, including the following information; (i) indication that a wire
transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and
(iv) the return wire instructions if such bidder is not awarded the Bonds.
Any Deposit made by the successful bidder by check or wire transfer will be delivered to the
City following the award of the Bonds. Any Deposit made by check or wire transfer by an
unsuccessful bidder will be returned to such bidder following City action relative to an award of
the Bonds.
If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such
a bond in the State of Minnesota and pre- approved by the City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that underwriter is
required to submit its Deposit to the City in the form of a certified or cashier's check or wire
transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the
next business day following the award. If such Deposit is not received by that time, the
Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The Deposit received from the purchaser, the amount of which will be deducted at settlement,
will be deposited by the City and no interest will accrue to the purchaser. In the event the
purchaser fails to comply with the accepted proposal, said amount will be retained by the City.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
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 award of the Bonds, (ii) reject all proposals
without cause, and (iii) reject any proposal that the City determines to have failed to comply with
the terms herein.
366343v1 SJB LN140 -106
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BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of the
Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance
shall be paid by the purchaser, except that, if the City has requested and received a rating on the
Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall
be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the
Bonds, but neither the failure to print such numbers on any Bond nor any error with respect
thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the
Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers
shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser through DTC in New York, New York. Delivery will be subject to receipt by the
purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis,
Minnesota, and of customary closing papers, including a no- litigation certificate. On 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 Noon, Central Time.
Unless compliance with the terms of payment for the Bonds has been made impossible by action
of the City, or its agents, 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.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2- 12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior
to delivery of the Bonds.
366343v1 SJB LN140 -106
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OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent information
relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement
within the meaning of Rule 15c2 -12 of the Securities and Exchange Commission. For copies of
the Official Statement or for any additional information prior to sale, any prospective purchaser
is referred to the Financial Advisor to the City, Springsted Incorporated, 380 Jackson Street,
Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2 -12. By awarding the Bonds to any underwriter
or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than
seven business days after the date of such award, it shall provide without cost to the senior
managing underwriter of the syndicate to which the Bonds are awarded 40 copies of the Official
Statement and the addendum or addenda described above. The City designates the senior
managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes
of distributing copies of the Final Official Statement to each Participating Underwriter. Any
underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is
accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual
relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt
by each such Participating Underwriter of the Final Official Statement.
Dated April 12, 2010 BY ORDER OF THE CITY COUNCIL
366343v1 SJB LN140 -106
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/s/ Julie Bartell
City Clerk
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3. Springsted Incorporated is authorized and directed to negotiate the Bonds in
accordance with the foregoing Terms of Proposal. The City Council will meet at 6:30 P.M. on
Monday, May 10, 2010, to consider proposals on the Bonds and take any other appropriate
action with respect to the Bonds.
4. The law firm of Kennedy & Graven, Chartered, as bond counsel for the City, 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 Kennedy & Graven, Chartered in the
preparation of such documents, certificates, and instruments.
366343v1 SJB LN140 -106
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The motion for the adoption of the foregoing resolution was duly seconded by
Councilmember Qat,_ , and upon vote being taken thereon the following members
voted in favor of the motion:
0esc lea t r , � t
and the following voted against:
- or-90ww-LA
whereupon the resolution was declared duly passed and adopted.
ATTEST:
nne Bar ell, City Clerk
366343v1 SJB LNI40 -106
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Je f Rei e r, Mayor
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AGENDA ITEM 2A
STAFF ORIGINATOR Al Rolek
MEETING DATE April 12, 2010
TOPIC Consideration of Resolution 10 -31 Providing for the Issuance and
Sale of Approximately $1,015,000 General Obligation
Improvement and Utility Revenue Refunding Bonds, Series 2010A
VOTE REQUIRED
Simple Majority
Minnesota Statutes Section 475.67, subdivision 3 authorizes the issuance and sale of refunding
obligations during the six month period prior to the date on which the obligations to be refunded
may be called for redemption. Our financial advisor, Springsted, Inc. has issued their
recommendation for the issuance of $1,015,000 G.O. Improvement and Utility Revenue
Refunding Bonds Series 2010A. This issue would refinance the outstanding portion of G.O.
Improvement and Utility Revenue Bonds, Series 2004A bond.
Staff continually monitors the market for opportunities to refinance existing debt issues at lower
interest rates, thereby saving the city money on financing costs. By refinancing the outstanding
balance of our G.O. Improvement and Utility Revenue Bonds 2004A, it is estimated that the city
can achieve net present value savings of approximately $41,120 over the term of the issue, a
4.26% savings.
If approved, the bids for this refunding issue would be received on May 10, 2010, with
consideration for award of sale by the City Council at its meeting the same day. The Series
2010A issue would have a 10 -year term and would be repaid through previously adopted special
assessments and use of utility revenues.
Staff recommendation is for the City Council to approve Resolution 10 -31 providing for the
issuance of $1,015,000 G.O. Improvement and Utility Revenue Refunding Bonds Series 2010A.
1. Adopt Resolution 10 -31.
2. Refer to Staff for further review.
3. Deny Resolution 10 -31.
Option 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, 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, April 12,
2010, 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 approximately $1,015,000
General Obligation Improvement and Utility Revenue Refunding Bonds, Series 2010A of the
City.
WITNESS My hand as City Clerk and the corporate seal of the City this day of
, 2010.
(SEAL)
366343v1 SJB LN140 -106
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City Clerk
City of Lino Lakes, Minnesota
Sp
fl
April 1, 2010
Mr. Alan Rolek
Finance Director
City of Lino Lakes
600 Town Center Parkway
Lino Lakes, MN 55014
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101 -2887
Tel: 651 - 223 -3000
Fax: 651 - 223 -3002
www.springsted.com
Re: Recommendations for the Issuance of $1,015,000 General Obligation Improvement & Utility Revenue
Refunding Bonds, Series 2010A
Dear Mr. Rolek:
We have enclosed an electronic copy of our recommendations for the above - captioned issue for distribution to
Council members and City staff prior to your meeting on Monday, April 12, 2010.
We will be forwarding, under separate cover, contract amendments for services relating to arbitrage compliance and
continuing disclosure to include this issue. Please sign and return the enclosed forms so that Springsted will
be authorized to complete calculations and reporting as may be required related to this issue.
If you should have any questions pertaining to the enclosed documents, or if you require additional copies, please do
not hesitate to contact us.
Sincerely,
Sacv seeeaf
Stacy Seeland
Project Manager
akb
Enclosures
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Public Sector Advisors
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Recommendations
For
City of Lino Lakes, Minnesota
$1,015,000*
General Obligation Improvement and Utility Revenue Refunding Bonds, Series 2010A
*Preliminary; subject to change.
Presented to:
Honorable Jeff Reinert, Mayor
Members, City Council
Mr. Alan Rolek, Finance Director
City of Lino Lakes
600 Town Center Parkway
Lino Lakes, MN 55014
Study No.: 000502107
SPRINGSTED Incorporated
April 1, 2010
Springsted
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RECOMMENDATIONS
Re: Recommendations for the Issuance of $1,015,000* General Obligation Improvement and Utility Revenue
Refunding Bonds, Series 2010A (the "Bonds" or the "Issue ")
We respectfully request your consideration of our recommendations for the above -named Issue. Proceeds of the
Bonds will be used to refund the February 1, 2011 through February 1, 2020 maturities of the City's General
Obligation Improvement and Utility Revenue Bonds, Series 2004A, dated November 15, 2004 (the "Refunding
Bonds ").
We recommend the following for the Bonds:
1. Action Requested To establish the date and time of receiving bids and
establish the terms and conditions of the offering.
2. Sale Date and Time
3. Method of Sale
4. Authority for the Bonds
5. Repayment Term
*Preliminary; subject to change.
Monday, May 10, 2010 at 10:30 A.M., with consideration
for award by the City Council at 6:30 PM that same
evening.
The Bonds will be sold through a competitive bidding
process. In the interest of obtaining as many bids as
possible, we have included a provision in the attached
Terms of Proposal for underwriters to submit their bids
electronically through the electronic bidding platform of
PARITY ®. In addition, physical bids (by phone or fax) will
be accepted at the offices of Springsted.
A good faith deposit will be required of bidders and may be
submitted by (i) certified /cashier's check, (ii) a financial
surety bond or (iii) a wire transfer to Springsted as your
agent.
The Bonds are being issued pursuant to Minnesota
Statutes, Chapter 475. In addition the street improvement
portion of the Bonds is being issued pursuant to Minnesota
Statutes, Chapter 429 and the water utility fund
improvement portion of the Bonds is being issued pursuant
to Minnesota Statutes, Chapter 444.
The Bonds will mature annually February 1, 2011
through 2020. Interest will be payable semi - annually each
February 1 and August 1, commencing February 1, 2011.
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City of Lino Lakes, Minnesota
April 1, 2010
6. Security and Source of Payment
(a) Security The Bonds will be general obligations of the City, secured
by its full faith and credit and taxing power.
(b) Source of Payment
7. Prepayment Provisions
8. Credit Rating Comments
9. Term Bonds
In addition, the City will be pledge special assessments
against benefited property and net revenues of the City's
water utility.
The street improvement portion of the Bonds will be repaid
from special assessments filed against benefited property.
The water improvement portion of the Bonds will be repaid
from net revenues of the City's water utilities.
Due to their short maturity schedule, and to ensure the best
pricing possible, the Bonds will not be subject to optional
redemption prior to their stated maturity dates.
An application will be made to Moody's Investors Service
for a rating on the Bonds. The City's general obligation
debt is currently rated "Aa3."
In May of 2010 Moody's will institute a global rating
platform. This will result in the City receiving a recalibration
of the rating for its general obligation debt. Based on
information released by Moody's, we expect the City's
rating to recalibrate to "Aa2." A full rating review will be
done with Moody's prior to the sale of the Bonds.
We have included a provision that permits the underwriters
to combine multiple maturity years into a term bond,
subject to mandatory redemption on the same maturity
schedule provided in the Terms of Proposal. The
advantage to the underwriter is that it provides large blocks
of bonds, which are more attractive to bond funds, and
certain pension funds, which deal only with large blocks of
bonds. This in turn is a benefit to the City since selling
larger blocks of bonds reduces the risk to the underwriter,
allowing them to lower their costs and the interest coupons.
Since the Bonds are being offered on a competitive bid
basis and awarded on the lowest true interest cost, the City
will award the Bonds to the best bid regardless of whether
term bonds are chosen or not.
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City of Lino Lakes, Minnesota
April 1, 2010
10. Federal Treasury Regulations Concerning Tax-
Exempt Obligations
(a) Bank Qualification
(b) Arbitrage Compliance
(1) Rebate
(ii) Yield Restriction
Under Federal Tax Law, financial institutions cannot deduct
from income for federal income tax purposes, expense that
is allocable to carrying and acquiring tax - exempt bonds.
There is an exemption to this for "bank qualified" bonds,
which can be so designated if the issuer does not issue
more than $30 million of tax - exempt bonds in a calendar
year. Issues that are bank qualified generally receive
slightly lower interest rates than issues that are not bank
qualified. Since the City does not expect to issue more
than $30 million of tax - exempt obligations in 2010, the
Bonds are designated as bank qualified.
The American Recovery and Reinvestment Tax Act of 2009
increased the previous bank qualification limit of $10 million
to $30 million for tax - exempt obligations issued in 2009 and
2010.
All tax - exempt issues and taxable Build America Bonds are
subject to the federal arbitrage and rebate requirements,
which require all excess earnings created by the financing
to be rebated to the U.S. Treasury. The requirements
generally cover two categories: issue proceeds and debt
service funds. There are exemptions from rebate in both of
these categories.
Bond proceeds, defined generally as both the original
principal of the issue and the investment earnings on the
principal, may qualify for a spending exception to rebate.
Since Bond proceeds will be expended within 90 days of
delivery, the proceeds will qualify for the 6 -month spending
exception.
Although the Bonds will qualify for an exception from
rebate, the City must still comply with the arbitrage
regulations which require yield restriction and are
discussed in the section below.
The City must maintain a bona fide debt service fund for
the Bonds or be subject to yield restriction. Yield restriction
requires restricting the investment return in the debt service
fund to the yield on the Bonds. A bona fide debt service
fund is a fund for which there is an equal matching of
revenue to debt service expense, with the fund spent down
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City of Lino Lakes, Minnesota
April 1, 2010
(c) Economic Life
11. Continuing Disclosure
each year to a permitted carry over equal to the greater of
the investment earnings in the fund during the prior year or
1/12 the debt service of the prior year.
Diligence should be exercised in monitoring the debt
service fund for the Bonds due to the potential
accumulation of assessment prepayments, which could
cause the debt service fund to become non -bona fide.
Additionally, all original proceeds of bonds and interest
earnings on those proceeds must be expended within three
years, or the remaining proceeds will be subject to yield
restriction.
The City should monitor the project fund of the Bonds to
ensure yield restriction provisions of the federal arbitrage
rules are met.
Springsted currently provides arbitrage compliance
services for the City under a separate contract. An
amendment to that contract adding the Bonds has been
provided to City staff.
The average life of the Bonds cannot exceed 120% of the
economic life of the projects to be financed. The average
life of the Bonds is less than the remaining average life of
the bonds being refunded; therefore, the Bonds are within
the economic life requirements.
The Bonds are subject to continuing disclosure
requirements set forth by the Securities and Exchange
Commission. The SEC rules require the underwriter of the
Bonds to provide an annual update of certain Official
Statement information and report any material events to
bond holders. The purchaser therefore requires the City to
commit to providing such information under a continuing
disclosure agreement or "undertaking." If the City does not
enter into such an agreement prior to the offering of the
debt, underwriters will not offer a bid to purchase the
Bonds.
Springsted currently provides continuing disclosure
services for the City under a separate contract. An
amendment to that contract adding this Issue has been
provided to City staff.
Page 4
City of Lino Lakes, Minnesota
April 1, 2010
411 12. Attachments • Refunding Schedules
. Terms of Proposal
DISCUSSION
As noted previously, Moody's Investors Service has announced that it will be recalibrating U.S. municipal ratings to its
"global scale." The purpose of this action is to "enhance the comparability of ratings" across the credits that Moody's
rates. Recalibration will be done by sectors beginning in the middle of April. A schedule for the recalibrations is
published which currently calls for ratings of local governments in the state of Iowa to be recalibrated on April 19. We
expect that as a result of this recalibration, the City's rating for its general obligation bonds will recalibrate to "Aa1," an
increase of one notch. In conjunction with the sale of the Bonds, we will be working with City staff to present relevant
information to Moody's for consideration in its review of the City's rating.
Proceeds of Bonds will be used to refund the February 1, 2011 through February 1, 2020 maturities of the City's
General Obligation Improvement and Utility Revenue Bonds, Series 2004A, dated November 15, 2004 (the
"Refunded Bonds ") and currently outstanding in the aggregate principal amount of $965,000. The issuance of the
Bonds is being conducted as a "current" refunding, in which the proceeds of the Bonds are used within ninety days of
bond settlement to redeem the outstanding principal of the Refunded Bonds. The refunding transaction is being
undertaken to achieve interest cost savings.
The Refunded Bonds were orginally issued to finance various street improvements (the "Street Improvement Portion ")
and sanitary sewer and water utility improvements projects (the "Water Utility Portion ") within the City.
• On July 1, 2010, the call date, the City will use the proceeds of the Bonds to redeem the remaining $965,000
outstanding principal on the Refunded Bonds. Beginning with the February 1, 2011 principal & interest payment, the
City will begin to make debt service payments on the Bonds, realizing the interest cost savings. The City will need
to invest the proceeds of the Bonds for the period between the closing date and the July 1, 2010 call date in
order to achieve the savings level estimated for this transaction.
•
Based on current interest rate estimates, the refunding is projected to result in the City realizing an average cash flow
savings of approximately $4,260 per year. This results in future value savings of approximately $45,410, with a net
present value benefit to the City of approximately $41,120. These estimates are net of all costs associated with the
refunding.
We have attached a set of schedules that summarize the refunding statistics and the projected savings resulting from
the sale of the Bonds. These schedules include the following information about the Bonds:
• Preliminary Feasibility Summary: shows the detailed sources and uses of funds for the Bonds and statistical
information relating to the refunding transaction — page 7.
• Prior Original Debt Service: shows the existing debt service requirements on the Refunded Bonds without a
refunding — page 8.
• Debt Service to Call and to Maturity: shows the Refunded Bonds' remaining debt service to the call date and
to maturity — page 9.
• Debt Service Schedule: shows the new projected debt service on the Bonds, based on current estimated
interest rates — pages 10 -12.
• Debt Service Comparison: shows the debt service comparison and the projected annual cash flow savings of
the Bonds to the Refunded Bonds — page 13.
Page 5
•
•
•
City of Lino Lakes, Minnesota
April 1, 2010
The Street Improvement Portion of the Bonds will be paid from special assessments filed against benefited
properties. Special assessments currently in place for the Street Improvement Portion of the Bonds will be sufficient
to pay the February 1, 2011 principal and interest payment on the Street Improvement Portion of the Bonds.
Thereafter, beginning with the August 1, 2011 interest payment, each year's collection of assessments will be used to
pay the August 1 interest payment due in the collection year and the February 1 principal and interest payment due in
the following year. It is not anticipated that the City will be required to levy for the Street Improvement Portion of the
Bonds.
The Water Utility Portion of the Bonds will be repaid from net revenues of the City's water utility. Pursuant to
Minnesota Statutes, Chapter 444 and the resolution awarding the Water Utility Portion of the Bonds, the City will
covenant to maintain water rates in an amount sufficient to generate revenues to support the operation of the water
utility and to pay debt service. The City is required to annually review the budget of the water utility to determine
whether current rates and charges are sufficient and to adjust them as necessary.
The City has two outstanding bond issues which are also being repaid in whole or in part from net revenues of the
City's water utility. The table below shows the net revenues available for debt service of the City's water utility for the
fiscal year ending 2008. The projected maximum annual debt service payable from net revenues of the water utility,
including the Water Utility Portion of the Bonds, is projected to be approximately $511,126.
Operating Revenues
Less: Operating Expenses
Add Back: Depreciation
Add: Investment Earnings
Net Revenues Available for Debt Service
Maximum Annual Debt Service
Remaining Net Revenues Available
$1,058,493
(959,043)
411,992
90.992
$602,434
(511,126)
$91 308
The success of any refunding transaction is in a large part dependent upon market conditions at the time the Bonds
are sold. Springsted will continue to monitor the market prior to the sale date and will keep you apprised of any
change in conditions that might affect the success of this refunding.
Springsted Incorporated is pleased to again be of service to the City of Lino Lakes.
Respectfully submitted,
SPRINGSTED Incorporated
SAS
akb
Page 6
•
$1,015,000
City of Lino Lakes, Minnesota
General Obligation Improvement & Utility Revenue Refunding Bonds, Series 2010A
Current Refunding of Series 2004A
Preliminary Feasibility Summary
Dated 06/01/2010 1 Delivered 06/08/2010
Series 2004A Series 2004A Issue
IMP Utility Summary
Sources Of Funds
Par Amount of Bonds $475,000.00 $540,000.00 $1,015,000.00
Accrued Interest from 06/01/2010 to 06/08/2010 176.94 202.51 379.45
Total Sources $475,176.94 $540,202.51 $1,015,379.45
Uses Of Funds
Deposit to Current Refunding Fund 457,138.02 523,168.75 980,306.77
Costs of Issuance 11,231.53 12,768.47 24,000.00
Total Underwriter's Discount (0.775 %) 3,681.25 4,185.00 7,866.25
Rounding Amount 2,949.20 (122.22) 2,826.98
Deposit to Debt Service Fund 176.94 202.51 379.45
Total Uses $475,176.94 $540,202.51 $1,015,379.45
Flow of Funds Detail
Call Date 7/1/2010 7/1/2010 7/1/2010
Primary Purpose Fund Solution Method Gross Funded Gross Funded Gross Funded
Total Cost of Investments $457,138.02 $523,168.75 $980,306.77
Total Draws $457,138.02 $523,168.75 $980,306.77
PV Analysis Summary (Net to Net)
Net PV Cashflow Savings @ 2.396 %(Bond Yield) 16,371.23 21,937.09 38,308.32
Accrued Interest Credit to Debt Service Fund 176.94 202.51 379.45
Contingency or Rounding Amount 2,949.20 (122.22) 2,826.98
Net Present Value Benefit $19,497.37 $22,017.38 $41,514.75
Net PV Benefit / $965,000 Refunded Principal 4.333% 4.275% 4.302%
Net PV Benefit / $1,015,000 Refunding Principal 4.105% 4.077% 4.090%
Bond Statistics
Average Life 5.226 Years 5.277 Years 5.253 Years
Average Coupon 2.4162477% 2.4298414% 2.4235124%
Net Interest Cost (NIC) 2.5645398% 2.5767092% 2.5710434%
Bond Yield for Arbitrage Purposes 2.3961265% 2.3961265% 2.3961265%
True Interest Cost (TIC) 2.5501293% 2.5620433% 2.5564947%
All Inclusive Cost (AIC) 3.0531688% 3.0607241% 3.0572053%
Series 20/0 Ref 2004A / In Summriry / 3/30/2010 / I /:S7AM
Springsted
Page 7
•
$1,330,000
City of Lino Lakes, Minnesota
General Obligation Improvement & Utility Revenue Bonds, Series 2004A
Prior Original Debt Service
Date
Principal Coupon Interest Total P+I
02/01/2005
08/01/2005 - 33,465.78 33,465.78
02/01/2006 65,000.00 2.500% 23,530.63 88,530.63
08/01/2006 - 22,718.13 22,718.13
02/01/2007 75,000.00 2.500% 22,718.13 97,718.13
08/01/2007 - - 21,780.63 21,780.63
02/01/2008 75,000.00 3.000% 21,780.63 96,780.63
08/01/2008 - 20,655.63 20,655.63
02/01/2009 75,000.00 3.000% 20,655.63 95,655.63
08/01/2009 - 19,530.63 19,530.63
02/01/2010 75,000.00 3.100% 19,530.63 94, 530.63
08/01/2010 - 18,368.13 18,368.13
02/01/2011 85,000.00 3.100% 18,368.13 103, 368.13
08/01/2011 - - 17,050.63 17,050.63
02/01/2012 85,000.00 3.300% 17,050.63 102,050.63
08/01/2012 - 15,648.13 15,648.13
02/01/2013 85,000.00 3.500% 15,648.13 100,648.13
08/01/2013 - 14,160.63 14,160.63
02/01/2014 90,000.00 3.600% 14,160.63 104,160.63
08/01/2014 - 12,540.63 12,540.63
02/01/2015 95,000.00 4.000% 12,540.63 107,540.63
08/01/2015 - 10,640.63 10,640.63
02/01/2016 95,000.00 4.000% 10,640.63 105,640.63
08/01 /2016 - 8,740.63 8,740.63
02/01/2017 100,000.00 4.000% 8,740.63 108,740.63
08/01/2017 - 6,740.63 6,740.63
02/01/2018 105,000.00 4.000% 6,740.63 111,740.63
08/01/2018 - 4,640.63 4,640.63
02/01/2019 110,000.00 4.125% 4,640.63 114,640.63
08/01/2019 - 2,371.88 2,371.88
02/01/2020 115,000.00 4.125% 2,371.88 117,371.88
Total $1,330,000.00 - $448,171.55 $1,778,171.55
Yield Statistics
Base date for Avg. Life & Avg. Coupon Calculation 6/01/2010
Average Life 5.465 Years
Average Coupon 3.9739509%
Weighted Average Maturity (Par Basis) 5.465 Years
Refunding Bond Information
Refunding Dated Date 6/01/2010
Refunding Delivery Date 6/01/2010
2004A / .v7Nt :LE Ef A'P0.1E / 3/25/2010 / 10:19 AA4
Springsted
Page 8
•
$1,330,000
City of Lino Lakes, Minnesota
General Obligation Improvement & Utility Revenue Bonds, Series 2004A
Debt Service To CaII And To Maturity
Date Refunded Interest to D/S To Call Principal Coupon Interest Refunded D/S
Bonds CaII
06/01/2010 - - -
07/01/2010 965,000.00 15,306.77 980,306.77 -
08/01/2010 - - - 18,368.13 18,368.13
02/01/2011 - - 85,000.00 3.100% 18,368.13 103,368.13
08/01/2011 - - - 17,050.63 17,050.63
02/01/2012 - - 85,000.00 3.300% 17,050.63 102,050.63
08/01/2012 - - - 15,648.13 15,648.13
02/01/2013 - - 85,000.00 3.500% 15,648.13 100,648.13
08/01/2013 - - - 14,160.63 14,160.63
02/01/2014 - - 90,000.00 3.600% 14,160.63 104,160.63
08/01/2014 - - - 12,540.63 12,540.63
02/01/2015 - 95,000.00 4.000% 12,540.63 107,540.63
08/01/2015 - - 10,640.63 10,640.63
02/01/2016 - - 95,000.00 4.000% 10,640.63 105,640.63
08/01/2016 - - 8,740.63 8,740.63
02/01/2017 - - 100,000.00 4.000% 8,740.63 108,740.63
08/01/2017 - - - 6,740.63 6,740.63
02/01/2018 - - - 105,000.00 4.000% 6,740.63 111,740.63
08/01/2018 - - - 4,640.63 4,640.63
02/01/2019 - - 110,000.00 4.125% 4,640.63 114,640.63
08/01/2019 - - 2,371.88 2,371.88
02/01/2020 - - 115,000.00 4.125% 2,371.88 117,371.88
Total $965,000.00 $15,306.77 $980,306.77 $965,000.00 $221,805.10 $1,186,805.10
Yield Statistics
Base date for Avg. Life & Avg. Coupon Calculation 6/01/2010
Average Life 5.465 Years
Average Coupon 3.9739509%
Weighted Average Maturity (Par Basis) 5.465 Years
Refunding Bond Information
Refunding Dated Date 6/01/2010
Refunding Delivery Date 6/01/2010
Sem, 2004A / SINGLE %UR%OSE / 3/25/20I0 / 10.-1.9 Nl1
sprngsted
Page 9
•
•
$1,015,000
City of Lino Lakes, Minnesota
General Obligation Improvement & Utility Revenue Refunding Bonds, Series 2010A
Current Refunding of Series 2004A
Debt Service Schedule
Date
Principal Coupon Interest Total P +I
02/01/2011 105,000.00 0.550% 13,010.00 118,010.00
02/01/2012 95,000.00 0.800% 18,937.50 113,937.50
02/01/2013 95,000.00 1.050% 18,177.50 113,177.50
02/01/2014 95,000.00 1.350% 17,180.00 112,180.00
02/01/2015 100,000.00 1.700% 15,897.50 115,897.50
02/01/2016 100,000.00 2.150% 14,197.50 114,197.50
02/01/2017 100,000.00 2.450% 12,047.50 112,047.50
02/01/2018 105,000.00 2.750% 9,597.50 114,597.50
02/01/2019 110,000.00 2.950% 6,710.00 116,710.00
02/01/2020 110,000.00 3.150% 3,465.00 113,465.00
Total $1,015,000.00 - $129,220.00 $1,144,220.00
Yield Statistics
Bond Year Dollars $5,351.67
Average Life 5.273 Years
Average Coupon 2.4145749%
Net Interest Cost (NIC) 2.5615618%
True Interest Cost (TIC) 2.5540823%
Bond Yield for Arbitrage Purposes 2.3942941%
All Inclusive Cost (AIC) 3.0529611%
IRS Form 8038
Net Interest Cost 2.4145749%
Weighted Average Maturity 5.273 Years
Sem, 2010 Ref 2004A / SINGLE IMPOSE / 3/25/2010 / 1g AM
Springsted
Page 10
$475,000
City of Lino Lakes, Minnesota
General Obligation Improvement & Utility Revenue Refunding Bonds, Series 2010A
Street Improvement Portion
Debt Service Schedule
Date Principal Coupon Interest Total P +I 105% Overlevy Special
Assessments
Surplus /(Shortfall)
02/01/2011
02/01/2012
02/01/2013
02/01/2014
02/01/2015
02/01/2016
02/01/2017
02/01/2018
02/01/2019
02/01/2020
50,000.00
45,000.00
45,000.00
40,000.00
50,000.00
50,000.00
45,000.00
50,000.00
50,000.00
50,000.00
0.550%
0.800%
1.050%
1.350%
1.700%
2.150%
2.450%
2.750%
2.950%
3.150%
6,066.67
8,825.00
8,465.00
7,992.50
7,452.50
6,602.50
5,527.50
4,425.00
3,050.00
1,575.00
56,066.67
53,825.00
53,465.00
47,992.50
57,452.50
56,602.50
50,527.50
54,425.00
53,050.00
51,575.00
58,870.00
56,516.25
56,138.25
50,392.13
60,325.13
59,432.63
53,053.88
57,146.25
55,702.50
54,153.75
66,786.60
66,786.61
66,786.61
66,786.60
66,786.59
66,786.60
66,786.60
66,786.60
66,786.60
66,786.60
7,916.60
10,270.36
10,648.36
16,394.48
6,461.47
7,353.98
13,732.73
9,640.35
11,084.10
12,632.85
Total $475,000.00 - $59,981.67 $534,981.67
$561,730.75 $667,866.01
$106,135.26
Yield Statistics
Accrued Interest from 06/01/2010 to 06/08/2010
Bond Year Dollars
Average Life
Average Coupon
Net Interest Cost (NIC)
True Interest Cost (TIC)
Bond Yield for Arbitrage Purposes
All Inclusive Cost (AIC)
IRS Form 8038
Net Interest Cost
Weighted Average Maturity
Ser thr 2010 Ref 2004A / .knes 2004A IMP / 3/30 /2010 / 11:37 AM
176.94
$2,482.43
5.226 Years
2.4162477%
2.5645398%
2.5501293%
2.3961265%
3.0531688%
2.4091200%
5.226 Years
Springsted
Page 11
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$540,000
City of Lino Lakes, Minnesota
General Obligation Improvement & Utility Revenue Refunding Bonds, Series 2010A
Utility Revenue Portion
Debt Service Schedule
Date
Principal Coupon Interest Total P +I
02/01/2011 55,000.00 0.550% 6,943.33 61,943.33
02/01/2012 50,000.00 0.800% 10,112.50 60,112.50
02/01/2013 50,000.00 1.050% 9,712.50 59,712.50
02/01 /2014 55,000.00 1.350% 9,187.50 64,187.50
02/01/2015 50,000.00 1.700% 8,445.00 58,445.00
02/01/2016 50,000.00 2.150% 7,595.00 57,595.00
02/01/2017 55,000.00 2.450% 6,520.00 61,520.00
02/01/2018 55,000.00 2.750% 5,172.50 60,172.50
02/01/2019 60, 000.00 2.950% 3,660.00 63,660.00
02/01/2020 60,000.00 3.150% 1,890.00 61,890.00
Total $540,000.00 - $69,238.33 $609,238.33
Yield Statistics
Accrued Interest from 06/01/2010 to 06/08/2010 202.51
Bond Year Dollars $2,849.50
Average Life 5.277 Years
Average Coupon 2.4298414%
Net Interest Cost (NIC) 2.5767092%
True Interest Cost (TIC) 2.5620433%
Bond Yield for Arbitrage Purposes 2.3961265%
All Inclusive Cost (AIC) 3.0607241%
IRS Form 8038
Net Interest Cost 2.4227345%
Weighted Average Maturity 5.277 Years
Seri'ee 2010 Re! 2004A / Sem, 2004A U /;lily / 3/30/2010 / 11.37AM
Springsted
Page 12
•
•
$1,015,000
City of Lino Lakes, Minnesota
General Obligation Improvement & Utility Revenue Refunding Bonds, Series 2010A
Current Refunding of Series 2004A
Debt Service Comparison
Date Total P +I Net New D/S Old Net D/S Savings
02/01 /2011 118,010.00 118,010.00 121,736.26 3,726.26
02/01/2012 113,937.50 113,937.50 119,101.26 5,163.76
02/01/2013 113,177.50 113,177.50 116,296.26 3,118.76
02/01/2014 112,180.00 112,180.00 118,321.26 6,141.26
02/01/2015 115,897.50 115,897.50 120,081.26 4,183.76
02/01/2016 114,197.50 114,197.50 116,281.26 2,083.76
02/01/2017 112, 047.50 112, 047.50 117,481.26 5,433.76
02/01/2018 114, 597.50 114,597.50 118,481.26 3,883.76
02/01/2019 116, 710.00 116,710.00 119,281.26 2,571.26
02/01/2020 113,465.00 113,465.00 119,743.76 6,278.76
Total $1,144,220.00 $1,144,220.00 $1,186,805.10 $42,585.10
PV Analysis Summary (Net to Net)
Net FV Cashflow Savings 42,585.10
Gross PV Debt Service Savings 38,293.58
Net PV Cashflow Savings @ 2.394 %(Bond Yield) 38,293.58
Contingency or Rounding Amount 2,826.98
Net Future Value Benefit $45,412.08
Net Present Value Benefit $41,120.56
Net PV Benefit / $203,982.76 PV Refunded Interest 20.159%
Net PV Benefit / $1,053,293.58 PV Refunded Debt Service 3.904%
Net PV Benefit / $965,000 Refunded Principal 4.261%
Net PV Benefit / $1,015,000 Refunding Principal 4.051%
Refunding Bond Information
Refunding Dated Date 6/01/2010
Refunding Delivery Date 6/01/2010
Series 2010 Ref 20045 / .s'Nd11: PI %TOSE / 3/25/2010 / 10:10 AM
Springsted
Page 13
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Preliminary
City of Lino Lakes, Minnesota
Aggregate Water Utility Debt Service
DATE
2006B Utility Revenue
Bonds - PS - County
Road 19 Watermain
2006F GO Water
Revenue Ref Bonds
(96B) - PS
2010A GO Imp &
Utility Rev Ref 04A -
Water Utility Portion
TOTAL
02/01/2011
02/01/2012
02/01/2013
02/01/2014
02/01/2015
02/01/2016
02/01/2017
02/01/2018
02/01/2019
02/01/2020
27,132.50
31, 332.50
30,332.50
29,332.50
28,307.50
27,282.50
31,245.00
418, 721.26
419, 681.26
61, 943.33
60,112.50
59, 712.50
64,187.50
58,445.00
57,595.00
61, 520.00
60,172.50
63,660.00
61,890.00
507,797.09
511,126.26
90,045.00
93,520.00
86,752.50
84,877.50
92,765.00
60,172.50
63,660.00
61, 890.00
Total
$204,965.00 $838,402.52
$609,238.33 $1,652,605.85
Operating Revenues $1,058,493
Less: Operating Expenses (959,043)
Add Back: Depreciation 411,992
Add: Investment Earnings 90,992
Net Revenues Available for Debt Service $602,434
Maximum Annual Debt Service (511,126)
Remaining Net Revenues Available $91,308
Ayy, Kd/e / 3/5'/Z)1' / I:30 PM
Springsted
Page 14
• THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
•
•
TERMS OF PROPOSAL
$1,015,000*
CITY OF LINO LAKES, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT AND UTILITY REVENUE
REFUNDING BONDS, SERIES 2010A
(BOOK ENTRY ONLY)
Proposals for the Bonds and the Good Faith Deposit ( "Deposit ") will be received on Monday,
May 10, 2010, until 10:30 A.M., Central Time, at the offices of Springsted Incorporated,
380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened
and tabulated. Consideration for award of the Bonds will be by the City Council at 6:30 P.M.,
Central Time, of the same day.
SUBMISSION OF PROPOSALS
Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the
time of sale specified above. All bidders are advised that each Proposal shall be deemed to
constitute a contract between the bidder and the City to purchase the Bonds regardless of the
manner in which the Proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax
(651) 223 -3046 to Springsted. Signed Proposals, without final price or coupons, may be
submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting
to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax
(651) 223 -3046 for inclusion in the submitted Proposal.
OR
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
PARITY. For purposes of the electronic bidding process, the time as maintained by PARITY®
shall constitute the official time with respect to all Bids submitted to PARITY®. Each bidder shall
be solely responsible for making necessary arrangements to access PARITY® for purposes of
submitting its electronic Bid in a timely manner and in compliance with the requirements of the
Terms of Proposal. Neither the City, its agents nor PARITY' shall have any 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 bidder's failure to register to bid or for any failure in the proper operation of, or
have any liability for any delays or interruptions of or any damages caused by the services of
PARITY . The City is using the services of PARITY® solely as a communication mechanism to
conduct the electronic bidding for the Bonds, and PARITY® is not an agent of the City.
If any provisions of this Terms of Proposal conflict with information provided by PARITY ®, this
Terms of Proposal shall control. Further information about PARITY ®, including any fee charged,
may be obtained from:
PARITY ®, 1359 Broadway, 2 "d Floor, New York, New York 10018
Customer Support: (212) 849 -5000
Preliminary; subject to change.
Page 15
•
DETAILS OF THE BONDS
The Bonds will be dated June 1, 2010, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2011. Interest will
be computed on the basis of a 360 -day year of twelve 30 -day months.
The Bonds will mature February 1 in the years and amounts* as follows:
2011 $105,000
2012 $ 95,000
2013 $ 95,000
2014 $ 95,000
2015 $100,000
2016 $100,000
2017 $100,000 2019 $110,000
2018 $105,000 2020 $110,000
The City reserves the right, after proposals are opened and prior to award, to increase or reduce the
principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or
reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal
amount of the Bonds is increased or reduced, any premium offered or any discount taken by the
successful bidder will be increased or reduced by a percentage equal to the percentage by which the
principal amount of the Bonds is increased or reduced.
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at
a price of par plus accrued interest to the date of redemption and must conform to the maturity
schedule set forth above. In order to designate term bonds, the proposal must specify "Years of
Term Maturities" in the spaces provided on the Proposal Form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Bond,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The Depository Trust Company ( "DTC "),
New York, New York, which will act as securities depository of the Bonds. Individual purchases
of the Bonds may be made in the principal amount of $5,000 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 owner of
the Bonds. Transfer of principal and interest payments to participants of DTC will be the
responsibility of DTC; transfer of principal and interest payments to beneficial owners by
participants will be the responsibility of such participants and other nominees of beneficial
owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The Bonds will not be subject to payment in advance of their respective stated maturity dates.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special
assessments against benefited properties and net revenues of the City's water utility. The
proceeds will be used to refund the February 1, 2011 through February 1, 2020 maturities of the
City's General Obligation Improvement and Utility Revenue Bonds, Series 2004A, dated
November 15, 2004.
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BIDDING PARAMETERS
Proposals shall be for not less than $1,007,134 and accrued interest on the total principal
amount of the Bonds.
No proposal can be withdrawn or amended after the time set for receiving proposals unless the
meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to
another date without award of the Bonds having been made. Rates shall be in integral multiples
of 5/100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the
rate for any maturity cannot be more than 1% lower than the highest rate of any of the
preceding maturities. Bonds of the same maturity shall bear a single rate from the date of the
Bonds to the date of maturity. No conditional proposals will be accepted.
GOOD FAITH DEPOSIT
Proposals, regardless of method of submission, shall be accompanied by a Deposit in the
amount of $10,150, in the form of a certified or cashier's check, a wire transfer, or Financial
Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be
opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether
by check, wire transfer or Financial Surety Bond. Neither the City nor Springsted Incorporated
have any liability for delays in the transmission of the Deposit.
Any Deposit made by certified or cashier's check should be made payable to the City and
delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota
55101.
Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's
agent according to the following instructions:
Wells Fargo Bank, N.A., San Francisco, CA 94104
ABA #121000248
For credit to Springsted Incorporated, Account #635- 5007954
Contemporaneously with such wire transfer, the bidder shall send an e-mail to
bond_services @springsted.com, including the following information; (i) indication that a wire
transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies,
and (iv) the return wire instructions if such bidder is not awarded the Bonds.
Any Deposit made by the successful bidder by check or wire transfer will be delivered to the City
following the award of the Bonds. Any Deposit made by check or wire transfer by an
unsuccessful bidder will be returned to such bidder following City action relative to an award of
the Bonds.
If a Financial Surety Bond is used, it must be from an insurance company licensed to issue
such a bond in the State of Minnesota and pre- approved by the City. Such bond must be
submitted to Springsted Incorporated prior to the opening of the proposals. The Financial
Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial
Surety Bond. If the Bonds are awarded to an underwriter using a Financial Surety Bond, then
that underwriter is required to submit its Deposit to the City in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time on the next business day following the award. If such Deposit is not received by that time,
the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The Deposit received from the purchaser, the amount of which will be deducted at settlement,
will be deposited by the City and no interest will accrue to the purchaser. In the event the
purchaser fails to comply with the accepted proposal, said amount will be retained by the City.
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AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
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 award of the Bonds, (ii) reject all proposals
without cause, and (iii) reject any proposal that the City determines to have failed to comply with
the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the
Bonds, but neither the failure to print such numbers on any Bond nor any error with respect
thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the
Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers
shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser through DTC in New York, New York. Delivery will be subject to receipt by the
purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis,
Minnesota, and of customary closing papers, including a no- litigation certificate. On 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 Noon, Central Time.
Unless compliance with the terms of payment for the Bonds has been made impossible by
action of the City, or its agents, 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.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2- 12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
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OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent information
relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement
within the meaning of Rule 15c2 -12 of the Securities and Exchange Commission. For copies of
the Official Statement or for any additional information prior to sale, any prospective purchaser
is referred to the Financial Advisor to the City, Springsted Incorporated, 380 Jackson Street,
Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2 -12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 40 copies of the
Official Statement and the addendum or addenda described above. The City designates the
senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for
purposes of distributing copies of the Final Official Statement to each Participating Underwriter.
Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its
proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring
the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 12, 2010 BY ORDER OF THE CITY COUNCIL
/s/ Julie Bartell
City Clerk
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