HomeMy WebLinkAbout2007-080 Council Resolution•
•
Extract 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 Tuesday, May
29, 2007, commencing at 6:30 P.M.
The following members of the Council were present:
and the following were absent:
* ** * ** * **
The following written resolution was presented by Councilmember stoltz who
moved its adoption, the reading of which had been dispensed with by unanimous consent:
RESOLUTION NO. 07 -80
RESOLUTION PROVIDING FOR THE ISSUANCE
AND SALE OF $4,215,000 GENERAL OBLIGATION
TAX INCREMENT BONDS, SERIES 2007A
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 and the Lino Lakes Economic Development Authority (the
"Authority ") have duly established Development District No. 1 (the "Project Area ")
311663v1 SJB LNI40 -100
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pursuant to Minnesota Statutes, Sections 469.124 through 469.134 and Sections 469.090
to 469.1081 (the "Act ");
(b) the City and Authority have duly established tax increment financing
district nos. 1 -10 and 1 -11 (the "TIF District ") within the Project Area pursuant to
Minnesota Statutes, Section 469.174 to 469.179 (TIF Act);
(c) the City is authorized by Section 469.178 of the TIF Act to issue and sell
its general obligations to pay all or a portion of the public development costs
(the "Costs ") related to the Project Area as identified in the tax increment financing plans
(the "Plans ") for the TIF District;
(d) the following Costs to be financed by the Bonds are authorized by the
Plan:
Improvements: Cost
I -35W /Lake Drive Interchange
Construction Fund
Underwriter's Discount Allowance
Costs of Issuance
Rounding Amount
Total
$4,134,664.00
44,257.50
35,725.00
353.50
$4,215,000.00
(e) it is necessary and expedient to the sound financial management of the
affairs of the City to issue $4,215,000 General Obligation Tax Increment Bonds, Series
2007A (the "Bonds ") to provide financing for the Costs.
2. In order to provide financing for the Costs, the City will therefore issue and sell
Bonds in the amount of $4,170,743. In order to provide in part the additional interest required to
market the Bonds at this time, additional Bonds will be issued in the amount of $44,257. The
excess of the purchase price of the Bonds over the sum of $4,170,743 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 Bonds will
be issued, sold and delivered in accordance with the terms of the following Terms of Proposal:
311663v1 SJB LNI40 -100
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE
1. THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE
FOLLOWING BASIS:
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TERMS OF PROPOSAL
$4,215,000
CITY OF LINO LAKES, MINNESOTA
GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 2007A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, June 25, 2007, until 11:00 A.M., Central
Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul,
Minnesota, after which time they 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.
311663v1 SJB LN140 -100
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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 July 15, 2007, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2008. 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:
2009 $165,000 2013 $285,000 2017 $400,000 2021 $230,000
2010 $175,000 2014 $345,000 2018 $190,000 2022 $245,000
2011 $215,000 2015 $360,000 2019 $200,000 2023 $265,000
2012 $265,000 2016 $380,000 2020 $215,000 2024 $280,000
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.
311663v1 SJB LN140 -100
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OPTIONAL REDEMPTION
The City may elect on February 1, 2018, and on any day thereafter, to prepay Bonds due on or
after February 1, 2019. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC of the particular amount of such maturity to be
prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to
be redeemed and each participant will then select by lot the beneficial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest.
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 tax
increment revenues from the City's Tax Increment Financing District Nos. 1 -10 and 1 -11. The
proceeds will be used to finance various improvement projects related to the 35W and Lake
Drive Improvement Project within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $4,170,743 and accrued interest on the total principal amount
of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ( "Deposit ") in the form
of a certified or cashier's check or a Financial Surety Bond in the amount of $42,150, payable to
the order of the City. If a check is used, it must accompany the proposal. 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 preapproved 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 purchaser is required to
submit its Deposit to Springsted Incorporated 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. 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 must be in level or ascending order. 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.
311663v1 SJB LN140 -100
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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.
311663v1 SJB LN140 -100
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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.
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 170 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 May 29, 2007 BY ORDER OF THE CITY COUNCIL
311663v1 SJB LN140 -100
/s/ Julianne 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, June 25, 2007, 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.
311663v1 SJB LN140 -100
(Remainder of this page is intentionally left blank.)
• The motion for the adoption of the foregoing resolution was duly seconded by
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Councilmember O'Donnell , and upon vote being taken thereon the following members
voted in favor of the motion:
Stoltz, O'Donnell, Carlson, Bergeson
and the following voted against:
Reinert - Absent
whereupon the resolution was declared duly passed and adopted.
Adopted by the Council of the City of Lino Lakes this 29th day of May, 2007.
Julianne Bartell, C y Clerk
311663v1 SJB LN140 -100
John Bergeson, Mayor
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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:
TERMS OF PROPOSAL
$4,215,000
CITY OF LINO LAKES, MINNESOTA
GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 2007A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, June 25, 2007, until 11:00 A.M., Central
Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul,
Minnesota, after which time they 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
Page 8
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DETAILS OF THE BONDS
The Bonds will be dated July 15, 2007, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2008. 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:
2009 $165,000
2010 $175,000
2011 $215,000
2012 $265,000
2013 $285,000
2014 $345,000
2015 $360,000
2016 $380,000
2017 $400,000
2018 $190,000
2019 $200,000
2020 $215,000
2021 $230,000
2022 $245,000
2023 $265,000
2024 $280,000
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 City may elect on February 1, 2018, and on any day thereafter, to prepay Bonds due on or
after February 1, 2019. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC of the particular amount of such maturity to be
prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to
be redeemed and each participant will then select by lot the beneficial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest.
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 tax
increment revenues from the City's Tax Increment Financing District Nos. 1 -10 and 1 -11. The
proceeds will be used to finance various improvement projects related to the 35W and Lake
Drive Improvement Project within the City.
Page 9
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TYPE OF PROPOSALS
Proposals shall be for not less than $4,170,743 and accrued interest on the total principal
amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ( "Deposit ") in
the form of a certified or cashier's check or a Financial Surety Bond in the amount of $42,150,
payable to the order of the City. If a check is used, it must accompany the proposal. 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 preapproved 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 purchaser is
required to submit its Deposit to Springsted Incorporated 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.
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 must be in level or ascending order. 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.
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.
Page 10
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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.
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 170 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 May 29, 2007 BY ORDER OF THE CITY COUNCIL
/s/ Julianne Bartell
City Clerk
Page 11
AGENDA ITEM 2A
• STAFF ORIGINATOR Al Rolek
MEETING DATE May 29, 2007
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TOPIC Consideration of Resolution 07 -80 Providing For The Issuance And
Sale Of Approximately $4,215,000 General Obligation Tax
Increment Bonds, Series 2007A
VOTE REQUIRED
Simple Majority
On May 14 the City Council awarded a contract to Lunda Construction for the reconstruction of
the 35W /Lake Drive interchange and related improvements. The project is being funded by a
number of sources, including contributions from MN /DOT and Anoka County. To finance the
City's cost of the project staff has proposed utilizing TIF proceeds generated from the Legacy and
Panatonni TIF districts, MSA funds, state highway turnback funds and various other sources that
were presented to Council at prior meetings. As the contract for the project has been awarded,
staff is proposing at this time the issuance of G.O. Tax Increment bonds to finance the city's
portion of the project. Our financial advisor, Springsted, Inc. has issued their recommendation for
the issuance of $4,215,000 G.O. Tax Increment Bonds Series 2007A (see attached).
If approved, bids on this issue would be received on June 25, 2007, with consideration for award
by the City Council at its meeting the same day. The Series 2007A issue would have a 16 -year
term, with final maturity in February, 2024, and would be repaid through the tax increments, as
detailed above, and backed by MSA funding and, ultimately, the full faith and credit of the City of
Lino Lakes. As outlined in the recommendation, the debt service schedule is structured to utilize
TIF proceeds first, with a tax levy schedule for the remaining debt service. The tax levy will be
evaluated annually and offset by MSA funds; the City Council would then cancel the tax levy on an
annual basis, as needed.
Staff recommendation is for the City Council to approve Resolution 07 -80 providing for the
issuance and sale of $4,215,000 G.O. Tax Increment Bonds, Series 2007A.
1. Adopt Resolution 07 -80.
2. Refer to Staff for further review.
3. Deny Resolutions 07 -80.
Option 1
A -3
•
•
Sp
May 23, 2007
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 $4,215,000 General Obligation Tax Increment Bonds, Series 2007A
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 Tuesday, May 29, 2007.
We have also enclosed under separate cover contract amendments for services relating to continuing disclosure and
arbitrage rebate to include this Issue. If the City wishes to continue to engage Springsted for these services for the
new issue, please sign the amendments and return them to us.
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,
L nideure i?2 ge9ao
Christine M. Hogan
Project Manager
smc
Enclosures
Public Sector Advisors
•
•
•
Recommendations
For
City of Lino Lakes, Minnesota
$4,215,000
General Obligation Tax Increment Bonds, Series 2007A
Presented to:
Honorable John Bergeson, Mayor
Members, City Council
Mr. Gordon Heitke, City Administrator
Mr. Alan Rolek, Finance Director
City of Lino Lakes
600 Town Center Parkway
Lino Lakes, MN 55014
Study No.: L050213
SPRINGSTED Incorporated
May 23, 2007
Springsted
•
•
RECOMMENDATIONS
Re: Recommendations for the Issuance of $4,215,000 General Obligation Tax Increment Bonds, Series 2007A
(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 finance the 35W and Lake Drive Interchange and related street improvements within the City.
We recommend the following for the Bonds:
1. Action Requested
2. Sale Date and Time
3. Method of Sate
4. Authority for the Bonds
5. Repayment Term
6. Security and Source of Payment
To establish the date and time of receiving bids and
establish the terms and conditions of the offering.
Monday, June 25, 2007 at 11:00 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
Terris 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.
The Bonds are being issued pursuant to Minnesota
Statutes, Chapters 469 and 475.
The Bonds will mature annually February 1, 2009 through
2024. Interest will be payable semi - annually each
February 1 and August 1, commencing February 1, 2008.
The Bonds will be general obligations of the City, secured
by its full faith and credit and taxing power.
The Bonds will be repaid with a combination of ad valorem
property taxes and tax increment (TIF) revenues from the
City's Tax Increment Financing District Nos. 1 -10 and 1 -11.
The City will make its first levy for the Bonds in 2007 for
collection in 2008. The City will use available funds on
hand along with TIF revenues to make the interest payment
due February 1, 2008.
City of Lino Lakes, Minnesota
May 23, 2007
•
7. Prepayment Provisions
8. Credit Rating Comments
9. Term Bonds
10. Federal Treasury Regulations Conceming Tax -
Exempt Obligations
(a) Bank Qualification
•
Thereafter, each year's collection of TIF revenues and
taxes will be used to make the August 1 interest payment
due in the year of collection and the February 1 principal
and interest payment due the following year. The City
anticipates using Municipal State Aid allotments from the
Department of Transportation to reduce its levy
requirement.
The City may elect on February 1, 2018, and on any date
thereafter, to prepay the Bonds due on or after
February 1, 2019, at a price of par plus accrued interest.
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 ".
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.
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 $10 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 $10 million of tax - exempt obligations in 2007, the
Bonds will be designated as bank qualified.
Page 2
City of Lino Lakes, Minnesota
May 23, 2007
(b) Rebate Requirements
(c) Bona Fide Debt Service Fund
(d) Economic Life
(e) Federal Reimbursement Regulations
11. Continuing Disclosure
All tax - exempt issues 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: bond
proceeds and debt service funds. There are exemptions
from rebate that may apply in both of these categories.
There is an exemption from rebate for municipalities that
issue $5 million or less of tax - exempt obligations in a
calendar year. Since the City does not expect to issue
more than $5 million in tax - exempt obligations in 2007, the
City qualifies as a "small issuer" and will be exempt from
rebating excess eamings on Bond proceeds to the federal
government. Although exempt from rebate, the City must
still comply with the arbitrage regulations which require
yield restriction of any proceeds remaining after the three
year temporary period expires.
The City must maintain a bona fide debt service fund for
the Bonds or be subject to yield restriction. This requires
restricting the investments held 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 carry over permitted equal to
the greater of the investment earnings in the fund for the
prior year or 1/12 the debt service of the prior year.
The average life of the Bonds cannot exceed 120% of the
economic life of the projects to be financed.
The economic life of the projects to be financed with the
Bonds is 20 years. The average life of the Bonds is
9.187 years, therefore within the economic life
requirements.
Federal reimbursement regulations require the City to make
a declaration, within 60 days of the actual payment, of its
intent to reimburse itself from expenses paid prior to the
receipt of Bond proceeds. It is our understanding the City
has taken whatever actions are necessary to comply with
the federal reimbursement regulations in regards to the
Bonds.
The Bonds are subject to continuing disclosure
requirements set forth by the Securities and Exchange
Commission. The SEC rules require the City to undertake
Page 3
•
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City of Lino Lakes, Minnesota
May 23, 2007
12. Attachments
an annual update of certain Official Statement information
and report any material events to the national repositories.
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.
• Sources and Uses of Funds
. Debt Service Schedule
. Terms of Proposal
DISCUSSION
The Bonds are being issued to finance the 35W and Lake Drive Interchange and related street improvements within
the City. The sources and uses for the Bonds is shown on page 6.
Repayment of the Bonds will be made from a combination of ad valorem property taxes and tax increment (TIF)
revenues derived from the City's Tax Increment District Nos. 1 -10 and 1 -11. The majority of revenue for debt service
will come from Tax Increment District 1 -11, and only a small portion will be financed by pooled revenues from Tax
Increment District No. 1 -10. The TIF revenue projections were prepared by Springsted based on information provided
by the City. The City will make its first levy for the Bonds in 2007 for collection in 2008. The City will use available
funds on hand, along with TIF revenues to make the interest payment due February 1, 2008. Thereafter, each year's
collection of TIF revenues and taxes will be used to pay the August 1 interest payment due in the year of collection
and the February 1 principal and interest payment due in the following year.
The Bonds have been structured over a period of 16 years around the projected TIF revenue stream to result in a
level annual levy requirement through 2017. The City anticipates using Municipal State Aid allotments from the
Department of Transportation to reduce its levy requirement. Beginning in 2018, TIF revenues are projected to be
sufficient to make the debt service payments on the Bonds. The debt service schedule for Bonds is shown on page 7
with the following information:
• Columns 1 through 4 show the annual principal amounts, estimated interest rates, and the total debt service
payment due on the Bonds.
• Column 5 shows the 105% overlevy which is required by State statutes and serves as a protection to
bondholders and the City in the event of delinquencies in the collection of tax increment revenues and/or
taxes.
Page 4
•
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•
City of Lino Lakes, Minnesota
May 23, 2007
• Column 6 shows the projected annual tax increment revenues.
• Column 7 shows the difference between column 5 and 6, which represents the City's levy requirement for
the Bonds.
Springsted Incorporated is pleased to again be of service to the City of Lino Lakes.
Respectfully submitted,
SPRINGSTED Incorporated
smc
Page 5
$4,215,000
• City of Lino Lakes, Minnesota
General Obligation Tax Increment Bonds, Series 2007A
•
Sources & Uses
Dated 07/15/2007 1 Delivered 07/15/2007
Sources Of Funds
Par Amount of Bonds $4,215,000.00
Total Sources $4,215,000.00
Uses Of Funds
Deposit to Project Construction Fund 4,134,664.00
Total Underwriter's Discount (1.050 %) 44,257.50
Costs of Issuance 35,725.00
Rounding Amount 353.50
Total Uses $4,215,000.00
2007 TYF Bonds' .5.21.070p / SINGLE PURPOSE / 5/21/2007 / I1:33AM
Springsted
Page 6
$4,215,000
City of Lino Lakes, Minnesota
General Obligation Tax Increment Bonds, Series 2007A
NET DEBT SERVICE vs. REVENUE
(1) (2) (3) (4) (5) (6) (7)
Date Principal Coupon Interest Total P +I 105% Overlevy TIF Revenue Levy Required
02/01/2008 - - 89,680.89 89,680.89 94,164.93 54,926.99 39,237.94
02/01/2009 165,000.00 3.700% 164,720.00 329,720.00 346,206.00 110,191.33 236,014.67
02/01/2010 175,000.00 3.700% 158,615.00 333,615.00 350,295.75 112,082.59 238,213.16
02/01/2011 215,000.00 3.700% 152,140.00 367,140.00 385,497.00 149,904.15 235,592.85
02/01/2012 265,000.00 3.750% 144,185.00 409,185.00 429,644.25 196,458.84 233,185.41
02/01/2013 285,000.00 3.750% 134,247.50 419,247.50 440,209.88 206,608.12 233,601.75
02/01/2014 345,000.00 3.800% 123,560.00 468,560.00 491,988.00 255,042.73 236,945.27
02/01/2015 360,000.00 3.800% 110,450.00 470,450.00 493,972.50 260,578.33 233,394.17
02/01/2016 380,000.00 3.850% 96,770.00 476,770.00 500,608.50 266,223.73 234,384.77
02/01/2017 400,000.00 3.900% 82,140.00 482,140.00 506,247.00 271,981.78 234,265.22
02/01/2018 190,000.00 4.000% 66,540.00 256,540.00 269,367.00 277,856.25 (8,489.25)
02/01/2019 200,000.00 4.000% 58,940.00 258,940.00 271,887.00 283,847.16 (11,960.16)
02/01/2020 215,000.00 4.050% 50,940.00 265,940.00 279,237.00 289,958.28 (10,721.28)
02/01/2021 230,000.00 4.100% 42,232.50 272,232.50 285,844.13 296,191.51 (10,347.38)
02/01/2022 245,000.00 4.100% 32,802.50 277,802.50 291,692.63 302,548.74 (10,856.11)
02/01/2023 265,000.00 4.150% 22,757.50 287,757.50 302,145.38 309,033.76 (6,888.38)
02/01/2024 280,000.00 4.200% 11,760.00 291,760.00 306,348.00 315,648.46 (9,300.46)
Total $4,215,000.00 - $1,542,480.89 $5,757,480.89 $6,045,354.93 $3,959,082.75 $2,086,272.19
Dated 7/15/2007
Delivery Date 7/15/2007
First Coupon Date 2/01 /2008
Yield Statistics
Bond Year Dollars $38,724.83
Average Life 9.187 Years
Average Coupon 3.9831828%
Net Interest Cost (NIC) 4.0974699%
True Interest Cost (TIC) 4.1145500%
Bond Yield for Arbitrage Purposes 3.9716630%
All Inclusive Cost (AIC) 4.2314469%
2007T1FBondv,5.21.07 Op / SINGLE PURPOSE / .5/21/2007 / II..39AM
Springsted
Page 7